10-K 1 10-k.htm 10-K  

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2016

Commission File No. 1-8923

 

 

 

WELLTOWER INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware

 

34-1096634

 

 

 

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

4500 Dorr Street, Toledo, Ohio

 

43615

 

 

 

(Address of principal executive offices)

 

(Zip Code)

(419) 247-2800

(Registrant’s telephone number, including area code)  

 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on Which Registered

Common Stock, $1.00 par value

New York Stock Exchange

6.50% Series I Cumulative

Convertible Perpetual Preferred Stock, $1.00 par value

New York Stock Exchange

6.50% Series J Cumulative

Redeemable Preferred Stock, $1.00 par value

New York Stock Exchange

4.800% Notes due 2028

New York Stock Exchange

4.500% Notes due 2034

New York Stock Exchange

 

Securities registered pursuant to Section 12(g) of the Act:  None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  þ  No  o 

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes  o  No  þ 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ  No  o 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  þ  No  o 

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  R 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

 

 

Large accelerated filer þ  

 

Accelerated filer o  

 

Non-accelerated filer   o

(Do not check if a smaller reporting company)

 

Smaller reporting company o  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o  No  þ 

 

The aggregate market value of the shares of voting common stock held by non-affiliates of the registrant, computed by reference to the closing sales price of such shares on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second fiscal quarter was $27,176,263,145.

 

As of January 31, 2017, the registrant had 362,558,457 shares of common stock outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Portions of the registrant’s definitive proxy statement for the annual stockholders’ meeting to be held May 4, 2017, are incorporated by reference into Part III.

 

 

 

WELLTOWER INC.

2016 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

 

 

 

Page

 

PART I

 

 

 

Item 1.

Business

2

Item 1A.

Risk Factors

25

Item 1B.

Unresolved Staff Comments

34

Item 2.

Properties

35

Item 3.

Item 4.

Legal Proceedings

Mine Safety Disclosures

37

37

 

 

 

 

PART II

 

 

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

37

Item 6.

Selected Financial Data

39

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

40

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

63

Item 8.

Financial Statements and Supplementary Data

64

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

100

Item 9A.

Controls and Procedures

100

Item 9B.

Other Information

101

 

 

 

 

PART III

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance

102

Item 11.

Executive Compensation

102

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

102

Item 13.

Certain Relationships and Related Transactions and Director Independence

102

Item 14.

Principal Accounting Fees and Services

102

 

 

 

 

PART IV

 

 

 

Item 15.

Exhibits and Financial Statement Schedules

103

  

 

 

 

PART I

 

Item 1.  Business 

 

General

 

Welltower Inc. (NYSE:HCN), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure.  The company invests with leading seniors housing operators, post-acute providers and health systems to fund real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience.  WelltowerTM, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.  Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets.  More information is available on the Internet at www.welltower.com.  The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.

 

Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, relationship and geographic location.

 

Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund operations, meet debt service obligations (both principal and interest), make dividend distributions and complete construction projects in process. We also continuously evaluate opportunities to finance future investments. New investments are generally funded from temporary borrowings under our primary unsecured credit facility, internally generated cash and the proceeds from investment dispositions. Our investments generate cash from net operating income and principal payments on loans receivable. Permanent financing for future investments, which replaces funds drawn under our primary unsecured credit facility, has historically been provided through a combination of the issuance of public debt and equity securities and the incurrence or assumption of secured debt.

 

References herein to “we,” “us,” “our” or the “Company” refer to Welltower Inc. and its subsidiaries unless specifically noted otherwise.

 

Portfolio of Properties

 

Please see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – Executive Summary – Company Overview” for a table that summarizes our portfolio as of December 31, 2016.

 

Property Types

 

We invest in seniors housing and health care real estate and evaluate our business on three reportable segments: triple-net, seniors housing operating and outpatient medical. For additional information regarding our segments, please see Note 17 to our consolidated financial statements.  The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 2 to our consolidated financial statements.  The following is a summary of our various property types.

 

Triple-Net

 

Our triple-net properties include independent living facilities and independent supportive living facilities (Canada), continuing care retirement communities, assisted living facilities, care homes with and without nursing (United Kingdom), Alzheimer’s/dementia care facilities and long-term/post-acute care facilities.  We invest primarily through acquisitions, development and joint venture partnerships. Our properties are primarily leased to operators under long-term, triple-net master leases. We are not involved in property management.  Our properties include stand-alone facilities that provide one level of service, combination facilities that provide multiple levels of service, and communities or campuses that provide a wide range of services.

 

Independent Living Facilities and Independent Supportive Living Facilities (Canada).  Independent living facilities and independent supportive living facilities are age-restricted, multifamily properties with central dining facilities that provide residents access to meals and other services such as housekeeping, linen service, transportation and social and recreational activities.

 

Continuing Care Retirement Communities.  Continuing care retirement communities typically include a combination of detached homes, an independent living facility, an assisted living facility and/or a long-term/post-acute care facility on one campus. These communities appeal to residents because there is no need to relocate when health and medical needs change. Resident payment plans

2

 

 

vary, but can include entrance fees, condominium fees and rental fees. Many of these communities also charge monthly maintenance fees in exchange for a living unit, meals and some health services.

 

Assisted Living Facilities.  Assisted living facilities are state regulated rental properties that provide the same services as independent living facilities, but also provide supportive care from trained employees to residents who require assistance with activities of daily living, including, but not limited to, management of medications, bathing, dressing, toileting, ambulating and eating.

 

Care Homes with Nursing (United Kingdom).  Care homes with nursing, regulated by the Care Quality Commission are licensed daily rate or rental properties where the majority of individuals require 24-hour nursing and/or medical care. Generally, these properties are licensed for various national and local reimbursement programs.  Unlike the U.S., care homes with nursing in the U.K. generally do not provide post-acute care.

 

Care Homes (United Kingdom).  Care homes, regulated by the Care Quality Commission, are rental properties that provide essentially the same services as U.S. assisted living facilities.

 

Alzheimer’s/Dementia Care Facilities.  Certain assisted living facilities may include state-licensed settings that specialize in caring for those afflicted with Alzheimer’s disease and/or other types of dementia.

 

Long-Term/Post-Acute Care Facilities.  Our long-term/post-acute care facilities generally include skilled nursing/post-acute care facilities, inpatient rehabilitation facilities and long-term acute care facilities.  Skilled nursing/post-acute care facilities are licensed daily rate or rental properties where the majority of individuals require 24-hour nursing and/or medical care. Generally, these properties are licensed for Medicaid and/or Medicare reimbursement in the U.S. or provincial reimbursement in Canada.  All facilities offer some level of rehabilitation services.  Some facilities focus on higher acuity patients and offer rehabilitation units specializing in cardiac, orthopedic, dialysis, neurological or pulmonary rehabilitation.  Inpatient rehabilitation facilities provide inpatient services for patients with intensive rehabilitation needs.  Long-term acute care facilities provide inpatient services for patients with complex medical conditions that require more intensive care, monitoring or emergency support than is available in most skilled nursing/post-acute care facilities. 

 

     Our triple-net segment accounted for 28%, 31% and 31% of total revenues for the years ended December 31, 2016, 2015 and 2014, respectively.  We lease 85 facilities to Genesis Healthcare, LLC, an operator of long-term/post-acute care facilities, pursuant to a long-term, triple-net master lease.  In addition to rent, the master lease requires Genesis to pay all operating costs, utilities, real estate taxes, insurance, building repairs, maintenance costs and all obligations under certain ground leases.  All obligations under the master lease have been guaranteed by FC-GEN Operations Investment, LLC, a subsidiary of Genesis Healthcare, LLC.  For the year ended December 31, 2016, our lease with Genesis accounted for approximately 27% of our triple-net segment revenues and 8% of our total revenues.

 

Seniors Housing Operating

 

Our seniors housing operating properties include several of the facility types described in “Item 1 – Business – Property Types – Triple-Net”, including independent living facilities and independent supportive living facilities, assisted living facilities, care homes and Alzheimer’s/dementia care facilities.  Properties are primarily held in consolidated joint venture entities with operating partners. We utilize the structure proposed in the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the Internal Revenue Code authorizing the RIDEA structure were enacted as part of the Housing and Economic Recovery Act of 2008).  See Note 18 to our consolidated financial statements for more information.

 

     Our seniors housing operating segment accounted for 59%, 56% and 57% of total revenues for the years ended December 31, 2016, 2015 and 2014, respectively.  We have relationships with 16 operators to own and operate 420 facilities (plus 69 unconsolidated facilities).  In each instance, our partner provides management services to the properties pursuant to an incentive-based management contract.  We rely on our partners to effectively and efficiently manage these properties.  For the year ended December 31, 2016, our relationship with Sunrise Senior Living accounted for approximately 40% of our seniors housing operating segment revenues and 23% of our total revenues.

 

Outpatient Medical

 

Our outpatient medical properties include outpatient medical buildings and, prior to June 30, 2015, life science facilities.  We typically lease our outpatient medical buildings to multiple tenants and provide varying levels of property management.  Our life science investment represented an investment in an unconsolidated joint venture entity.  Our outpatient medical segment accounted for 13%, 13% and 12% of total revenues for the years ended December 31, 2016, 2015 and 2014, respectively.  No single tenant exceeds 20% of segment revenues.

 

3

 

 

Outpatient Medical Buildings.  The outpatient medical building portfolio consists of health care related buildings that generally include physician offices, ambulatory surgery centers, diagnostic facilities, outpatient services and/or labs. Our portfolio has a strong affiliation with health systems. Approximately 95% of our outpatient medical building portfolio is affiliated with health systems (with buildings on hospital campuses or serving as satellite locations for the health system and its physicians).

 

Life Science Facilities.  The life science portfolio consisted of laboratory and office facilities specifically designed and constructed for use by biotechnology and pharmaceutical companies.  These facilities were located adjacent to The Massachusetts Institute of Technology, which is a well-established market known for pharmaceutical and biotechnology research. They are similar to commercial office buildings with advanced HVAC (heating, ventilation and air conditioning), electrical and mechanical systems. On June 30, 2015, we disposed of our life science investments.

 

Investments

 

Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders.  We invest in seniors housing and health care real estate primarily through acquisitions, developments and joint venture partnerships. For additional information regarding acquisition and development activity, please see Note 3 to our consolidated financial statements.  We diversify our investment portfolio by property type, relationship and geographic location. In determining whether to invest in a property, we focus on the following: (1) the experience of the obligor’s/partner’s management team; (2) the historical and projected financial and operational performance of the property; (3) the credit of the obligor/partner; (4) the security for any lease or loan; (5) the real estate attributes of the building and its location; (6) the capital committed to the property by the obligor/partner; and (7) the operating fundamentals of the applicable industry. We conduct market research and analysis for all potential investments. In addition, we review the value of all properties, the interest rates and covenant requirements of any facility-level debt to be assumed at the time of the acquisition and the anticipated sources of repayment of any existing debt that is not to be assumed at the time of the acquisition.

 

We monitor our investments through a variety of methods determined by the type of property. Our proactive and comprehensive asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division actively manages and monitors the outpatient medical portfolio with a comprehensive process including review of, among other things, tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs, and market conditions. In monitoring our portfolio, our personnel use a proprietary database to collect and analyze property-specific data. Additionally, we conduct extensive research to ascertain industry trends.

 

We evaluate the operating environment in each property’s market to determine the likely trend in operating performance of the facility.  When we identify unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we are generally able to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of revenue and the value of our investment.

 

Investment Types

 

Real Property.  Our properties are primarily comprised of land, buildings, improvements and related rights.  Our triple-net properties are generally leased to operators under long-term operating leases.  The leases generally have a fixed contractual term of 12 to 15 years and contain one or more five to 15-year renewal options. Certain of our leases also contain purchase options, a portion of which could result in the disposition of properties for less than full market value.  Most of our rents are received under triple-net leases requiring the operator to pay rent and all additional charges incurred in the operation of the leased property. The tenants are required to repair, rebuild and maintain the leased properties. Substantially all of these operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.

 

At December 31, 2016, approximately 92% of our triple-net properties were subject to master leases. A master lease is a lease of multiple properties to one tenant entity under a single lease agreement. From time to time, we may acquire additional properties that are then leased to the tenant under the master lease. The tenant is required to make one monthly payment that represents rent on all the properties that are subject to the master lease. Typically, the master lease tenant can exercise its right to purchase the properties or to renew the master lease only with respect to all leased properties at the same time. This bundling feature benefits us because the tenant cannot limit the purchase or renewal to the better performing properties and terminate the leasing arrangement with respect to the poorer performing properties. This spreads our risk among the entire group of properties within the master lease. The bundling feature should provide a similar advantage to us if the master lease tenant is in bankruptcy. Subject to certain restrictions, a debtor in bankruptcy has the right to assume or reject each of its leases. It is our intent that a tenant in bankruptcy would be required to assume or reject the master lease as a whole, rather than deciding on a property by property basis.

 

4

 

 

Our outpatient medical portfolio is primarily self-managed and consists principally of multi-tenant properties leased to health care providers. Our leases typically include increasers and some form of operating expense reimbursement by the tenant. As of December 31, 2016, 80% of our portfolio included leases with full pass through, 17% with a partial expense reimbursement (modified gross) and 3% with no expense reimbursement (gross). Our outpatient medical leases are non-cancellable operating leases that have a weighted-average remaining term of seven years at December 31, 2016 and are often credit enhanced by security deposits, guaranties and/or letters of credit.   

 

Construction.  We occasionally provide for the construction of properties for tenants as part of long-term operating leases. We capitalize certain interest costs associated with funds used for the construction of properties owned by us. The amount capitalized is based upon the amount advanced during the construction period using the rate of interest that approximates our Company-wide cost of financing. Our interest expense is reduced by the amount capitalized. We also typically charge a transaction fee at the commencement of construction which we defer and amortize to income over the term of the resulting lease. The construction period commences upon funding and terminates upon the earlier of the completion of the applicable property or the end of a specified period. During the construction period, we advance funds to the tenants in accordance with agreed upon terms and conditions which require, among other things, periodic site visits by a Company representative. During the construction period, we generally require an additional credit enhancement in the form of payment and performance bonds and/or completion guaranties. At December 31, 2016, we had outstanding construction investments of $506,091,000 and were committed to provide additional funds of approximately $493,972,000 to complete construction for investment properties.

 

Real Estate Loans.  Our real estate loans are typically structured to provide us with interest income, principal amortization and transaction fees and are generally secured by first/second mortgage liens, leasehold mortgages, corporate guaranties and/or personal guaranties. At December 31, 2016, we had outstanding real estate loans of $622,627,508.  The interest yield averaged approximately 9.5% per annum on our outstanding real estate loan balances. Our yield on real estate loans depends upon a number of factors, including the stated interest rate, average principal amount outstanding during the term of the loan and any interest rate adjustments. The real estate loans outstanding at December 31, 2016 are generally subject to one to 15-year terms with principal amortization schedules and/or balloon payments of the outstanding principal balances at the end of the term. Typically, real estate loans are cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.

 

     Investments in Unconsolidated Entities. Investments in entities that we do not consolidate but have the ability to exercise significant influence over operating and financial policies are reported under the equity method of accounting.  Our investments in unconsolidated entities generally represent interests ranging from 10% to 50% in real estate assets.  Under the equity method of accounting, our share of the investee’s earnings or losses is included in our consolidated results of operations. To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity.  The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest or the estimated fair value of the assets prior to the sale of interests in the entity. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded.  See Note 7 to our consolidated financial statements for more information.

 

Principles of Consolidation

     The consolidated financial statements include the accounts of our wholly-owned subsidiaries and joint venture entities that we control, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation.

     At inception of joint venture transactions, we identify entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary.  Accounting Standards Codification Topic 810, Consolidations, requires enterprises to perform a qualitative approach to determining whether or not a VIE will need to be consolidated on a continuous basis. This evaluation is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance.

     For investments in joint ventures, GAAP may preclude consolidation by the sole general partner in certain circumstances based on the type of rights held by the limited partner(s).  We assess the limited partners’ rights and their impact on our consolidation conclusions, and we reassess if there is a change to the terms or in the exercisability of the rights of the limited partners, the sole general partner increases or decreases its ownership of limited partnership interests, or there is an increase or decrease in the number of outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited liability companies.

  

 

5

 

 

Borrowing Policies

 

We utilize a combination of debt and equity to fund investments. Our debt and equity levels are determined by management to maintain a conservative balance sheet and credit profile. Generally, we intend to issue unsecured, fixed-rate public debt with long-term maturities to approximate the maturities on our triple-net leases and investment strategy. For short-term purposes, we may borrow on our primary unsecured credit facility. We replace these borrowings with long-term capital such as senior unsecured notes or common stock. When terms are deemed favorable, we may invest in properties subject to existing mortgage indebtedness. In addition, we may obtain secured financing for unleveraged properties in which we have invested or may refinance properties acquired on a leveraged basis. In certain agreements with our lenders, we are subject to restrictions with respect to secured and unsecured indebtedness.

 

Competition

 

We compete with other real estate investment trusts, real estate partnerships, private equity and hedge fund investors, banks, insurance companies, finance/investment companies, government-sponsored agencies, taxable and tax-exempt bond funds, health care operators, developers and other investors in the acquisition, development, leasing and financing of health care and seniors housing properties. We compete for investments based on a number of factors including relationships, certainty of execution, investment structures and underwriting criteria. Our ability to successfully compete is impacted by economic and demographic trends, availability of acceptable investment opportunities, our ability to negotiate beneficial investment terms, availability and cost of capital, construction and renovation costs and applicable laws and regulations.

 

The operators/tenants of our properties compete with properties that provide comparable services in the local markets. Operators/tenants compete for patients and residents based on a number of factors including quality of care, reputation, physical appearance of properties, location, services offered, family preferences, physicians, staff and price. We also face competition from other health care facilities for tenants, such as physicians and other health care providers that provide comparable facilities and services.

 

For additional information on the risks associated with our business, please see “Item 1A — Risk Factors” of this Annual Report on Form 10-K.

 

Employees  As of January 31, 2017, we had 466 employees.

 

Credit Concentrations  Please see Note 8 to our consolidated financial statements.

 

Geographic Concentrations  Please see “Item 2 – Properties” of this Annual Report on Form 10-K and Note 17 to our consolidated financial statements.

  

 

Health Care Industry

 

     The demand for health care services, and consequently health care properties, is projected to reach unprecedented levels in the near future. The Centers for Medicare and Medicaid Services (“CMS”) projects that national health expenditures will rise to approximately $3.5 trillion in 2017 or 18.2% of gross domestic product. The average annual growth in national health expenditures for 2015 through 2025 is expected to be 5.8%. While demographics are the primary driver of demand, economic conditions and availability of services contribute to health care service utilization rates. We believe the health care property market may be less susceptible to fluctuations and economic downturns relative to other property sectors. Investor interest in the market remains strong, especially in specific sectors such as private-pay senior living and outpatient medical buildings. The total U.S. population for 2015 through 2025 is projected to increase by 9.3%. The elderly population aged 65 and over is projected to increase by 36% through 2025. The elderly are an important component of health care utilization, especially independent living services, assisted living services, long-term/post-acute care services, inpatient and outpatient hospital services and physician ambulatory care. Most health care services are provided within a health care facility such as a hospital, a physician’s office or a seniors housing community. Therefore, we believe there will be continued demand for companies, such as ours, with expertise in health care real estate.

 

     Health care real estate investment opportunities tend to increase as demand for health care services increases.  We recognize the need for health care real estate as it correlates to health care service demand.  Health care providers require real estate to house their businesses and expand their services.  We believe that investment opportunities in health care real estate will continue to be present due to:

·         The specialized nature of the industry, which enhances the credibility and experience of the Company;

·         The projected population growth combined with stable or increasing health care utilization rates, which ensures demand; and

·         The on-going merger and acquisition activity.

 

Certain Government Regulations

6

 

 

 

United States

 

Health Law Matters — Generally

 

     Typically, operators of seniors housing facilities do not receive significant funding from government programs and are largely subject to state laws, as opposed to federal laws.  Operators of long-term/post-acute care facilities and hospitals do receive significant funding from government programs, and these facilities are subject to the federal and state laws that regulate the type and quality of the medical and/or nursing care provided, ancillary services (e.g., respiratory, occupational, physical and infusion therapies), qualifications of the administrative personnel and nursing staff, the adequacy of the physical plant and equipment, reimbursement and rate setting and operating policies.  In addition, as described below, operators of these facilities are subject to extensive laws and regulations pertaining to health care fraud and abuse, including, but not limited to, the federal Anti-Kickback Statute (“AKS”), the federal Stark Law (“Stark Law”), and the federal False Claims Act (“FCA”), as well as comparable state laws.  Hospitals, physician group practice clinics, and other health care providers that operate in our portfolio are subject to extensive federal, state, and local licensure, registration, certification, and inspection laws, regulations, and industry standards.  Our tenants’ failure to comply with any of these, and other, laws could result in, among other things, loss of accreditation; denial of reimbursement; imposition of fines; suspension, decertification, or exclusion from federal and state health care programs; loss of license; or closure of the facility.  See Risk Factors “The requirements of, or changes to, governmental reimbursement programs, such as Medicare or Medicaid, could have a material adverse effect on our obligors’ liquidity, financial condition and results of operations, which could adversely affect our obligors’ ability to meet their obligations to us” and “Our operators’ or tenants’ failure to comply with federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards could adversely affect such operators’ or tenants’ operations, which could adversely affect our operators’ and tenants’ ability to meet their obligations to us” below.  

 

Licensing and Certification

     

     The primary regulations that affect long-term and post-acute care facilities are state licensing and registration laws.  For example, certain health care facilities are subject to a variety of licensure and certificate of need (“CON”) laws and regulations.  Where applicable, CON laws generally require, among other requirements, that a facility demonstrate the need for (1) constructing a new facility, (2) adding beds or expanding an existing facility, (3) investing in major capital equipment or adding new services, (4) changing the ownership or control of an existing licensed facility, or (5) terminating services that have been previously approved through the CON process.  Certain state CON laws and regulations may restrict the ability of operators to add new properties or expand an existing facility’s size or services. In addition, CON laws may constrain the ability of an operator to transfer responsibility for operating a particular facility to a new operator.

 

     With respect to licensure, generally our long-term/post-acute care facilities and acute care facilities are required to be licensed and certified for participation in Medicare, Medicaid, and other federal and state health care programs.  The failure of our operators to maintain or renew any required license or regulatory approval as well as the failure of our operators to correct serious deficiencies identified in a compliance survey could require those operators to discontinue operations at a property.  In addition, if a property is found to be out of compliance with Medicare, Medicaid, or other federal or state health care program conditions of participation, the property operator may be excluded from participating in those government health care programs. 

 

Reimbursement

 

     The reimbursement methodologies applied to health care facilities continue to evolve.  Federal and state authorities have considered and may seek to implement new or modified reimbursement methodologies, including value-based reimbursement methodologies that may negatively impact health care property operations.  The impact of any such changes, if implemented, may result in a material adverse effect on our portfolio.  No assurance can be given that current revenue sources or levels will be maintained.  Accordingly, there can be no assurance that payments under a government health care program are currently, or will be in the future, sufficient to fully reimburse the property operators for their operating and capital expenses.

·         Seniors Housing Facilities (excluding long-term/post-acute care facilities).  Approximately 55% of our overall revenues for the year ended December 31, 2016 were attributable to U.S. seniors housing facilities.  The majority of the revenues received by the operators of these facilities are from private pay sources. The remaining revenue source is primarily Medicaid under certain waiver programs.  As of September 30, 2016, 15 of our 44 seniors housing operators received Medicaid reimbursement pursuant to Medicaid waiver programs. For the twelve months ended September 30, 2016, approximately 1.7% of the revenues at our seniors housing facilities were from Medicaid reimbursement.  There can be no guarantee that a state Medicaid program operating pursuant to a waiver will be able to maintain its waiver status.  Rates paid by self-pay residents are set by the facilities and are determined by local market conditions and operating costs.  Generally, facilities receive a higher payment per day for a private pay resident than for a Medicaid beneficiary who requires a comparable level of care.  The level of Medicaid reimbursement varies from state to state.  Thus, the revenues generated by operators of our assisted living facilities may be adversely affected by payor mix, acuity level, changes in Medicaid eligibility, and

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reimbursement levels.  In addition, a state could lose its Medicaid waiver and no longer be permitted to utilize Medicaid dollars to reimburse for assisted living services.

·         Long-Term/Post-Acute Care Facilities.  Approximately 13% of our overall revenues for the year ended December 31, 2016 were attributable to long-term/post-acute care facilities.  The majority of the revenues received by the operators of these facilities are from the Medicare and Medicaid programs, with the balance representing reimbursement payments from private payors.  Consequently, changes in federal or state reimbursement policies may adversely affect an operator’s ability to cover its expenses, including our rent or debt service.  Long-term/post-acute care facilities are subject to periodic pre- and post-payment reviews, and other audits by federal and state authorities.  A review or audit of a property operator’s claims could result in recoupments, denials, or delay of payments in the future.  Due to the significant judgments and estimates inherent in payor settlement accounting, no assurance can be given as to the adequacy of any reserves maintained by our property operators to cover potential adjustments to reimbursements, or to cover settlements made to payors. Recent attention on billing practices, payments, and quality of care, or ongoing government pressure to reduce spending by government health care programs, could result in lower payments to long-term/post-acute care facilities and, as a result, may impair an operator’s ability to meet its financial obligations to us.

o    Medicare Reimbursement.  For the twelve months ended September 30, 2016, approximately 39% of the revenues at our long-term/post-acute care facilities were paid by Medicare. Generally, long-term/post-acute care facilities are reimbursed under the Medicare Skilled Nursing Facility Prospective Payment System (“SNF PPS”), the Inpatient Rehabilitation Facility Prospective Payment System (“IRF PPS”), or the Long Term Care Hospital Prospective Payment System (“LTCH PPS”), which generally provide reimbursement based upon a predetermined fixed amount per episode of care and are updated by CMS, an agency of the Department of Health and Human Services (“HHS”) annually.  CMS made some positive payment updates for fiscal year (“FY”) 2017 under the SNF PPS, the IRF PPS and the LTCH PPS, specifically:

§   On August 5, 2016, CMS published a final rule regarding FY 2017 Medicare payment policies and rates for skilled nursing facilities (“SNFs”).  Under the final SNF rule, CMS projects that aggregate payments to SNFs will increase in FY 2017 by $920 million, or 2.4%, from payments in FY 2016. 

§   On August 5, 2016, CMS published a final rule regarding FY 2017 Medicare payment policies and rates for inpatient rehabilitation facilities (“IRFs”).  Under the rule, CMS estimates that aggregate payments to IRFs will increase in FY 2017 by $145 million, or 1.9%, relative to payments in FY 2016.

§   On August 22, 2016, CMS published a final rule regarding FY 2017 Medicare payment policies and rates for long term care hospitals (“LTCHs”).  As a result of the continuation of the phase-in of site neutral payment rates for specified cases in LTCHs, CMS projects FY 2017 Medicare payments to LTCHs will decrease by 7.1%, or approximately $363 million.  Payment rates will increase by 0.7% for cases that qualify for the higher standard LTCH PPS rate.  In response to a federal district court’s review of the “Two-Midnight” payment policy, CMS finalized its proposal to remove the 0.2% Medicare Part A hospital payment cut and also its effects for FYs 2014, 2015, and 2016 though an approximate 0.8% increase to FY 2017 payment rates. 

There is a risk under these payment systems that costs will exceed the fixed payments, or that payments may be set below the costs to provide certain items and services.  In addition, the HHS Office of Inspector General has released recommendations to address SNF billing practices and Medicare payment rates.  If followed, these recommendations regarding SNF payment reform may impact our tenants and operators.

o    Medicaid Reimbursement.  For the twelve months ended September 30, 2016, approximately 33% of the revenues of long-term/post-acute care facilities were paid by Medicaid.  Many states reimburse SNFs, for example, using fixed daily rates, which are applied prospectively based on patient acuity and the historical costs incurred in providing patient care.  In most states, Medicaid does not fully reimburse the cost of providing services.  Certain states are attempting to slow the rate of Medicaid growth by freezing rates or restricting eligibility and benefits.  In addition, Medicaid reimbursement rates may decline if revenues in a particular state are not sufficient to fund budgeted expenditures. 

·         Medicare Reimbursement for Physicians, Hospital Outpatient Departments, and Ambulatory Surgical Centers.  Changes in reimbursement to physicians, Hospital Outpatient Departments (“HOPDs”), and Ambulatory Surgical Centers (“ASCs”) may further affect our tenants and operators.  Generally, Medicare reimburses physicians under the Physician Fee Schedule, while HOPDs and ASCs are reimbursed under prospective payment systems.  The Physician Fee Schedule and the HOPD and ASC prospective payment systems are updated annually by CMS.  These annual Medicare payment regulations have resulted in lower net pay increases than providers of those services have often expected.  In addition, Congress recently passed the Medicare and CHIP Reauthorization Act of 2015 (“MACRA”), which includes payment reductions for providers who do not meet government quality standards.  The implementation of pay-for-quality models like those required under MACRA is expected to produce funding disparities that could adversely impact some provider tenants in medical buildings and other health care properties.  Changes in Medicare Advantage plan payments may also indirectly affect our operators and tenants that contract with Medicare Advantage plans.

·         Health Reform Laws.  On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Reform Laws”), which dramatically

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altered how health care is delivered and reimbursed in the United States and contained various provisions, including Medicaid expansion and the establishment of Health Insurance Exchanges providing subsidized health insurance, that may directly impact us or the operators and tenants of our properties.  We expect that the new Presidential Administration and U.S. Congress will seek to modify, repeal, or otherwise invalidate all, or certain provisions of, the Health Reform Laws. Since taking office, President Trump has continued to support the repeal of all or portions of the Health Reform Laws.  The House and Senate have recently passed a budget resolution that authorizes congressional committees to draft legislation to repeal all or portions of the Health Reform Laws and permits such legislation to pass with a majority vote in the Senate.  President Trump has also recently issued an executive order in which he stated that it is his Administration’s policy to seek the prompt repeal of the Health Reform Laws and directed executive departments and federal agencies to waive, defer, grant exemptions from, or delay the implementation of the provisions of the Health Reform Laws to the maximum extent permitted by law.  There is still uncertainty with respect to the impact President Trump’s Administration and the U.S. Congress may have, if any, and any changes will likely take time to unfold, and could have an impact on coverage and reimbursement for health care items and services covered by plans that were authorized by the Health Reform Laws.  We cannot predict whether the existing Health Reform Laws, or future health care reform legislation or regulatory changes, will have a material impact on our operators’ or tenants’ property or business. 

 

     Fraud & Abuse Enforcement

 

     Long-term/post-acute care facilities (and seniors housing facilities that receive Medicaid payments) are subject to federal, state, and local laws, regulations, and applicable guidance that govern the operations and financial and other arrangements that may be entered into by health care providers.  Certain of these laws, such as the AKS and Stark Law, prohibit direct or indirect payments of any kind for the purpose of inducing or encouraging the referral of patients for medical products or services reimbursable by government health care programs.  Other laws require providers to furnish only medically necessary services and submit to the government valid and accurate statements for each service.  Specifically, our operators and tenants that receive payments from federal healthcare programs, such as Medicare and Medicaid, are subject to substantial financial penalties under the Civil Monetary Penalties Act and the FCA and, in particular, actions under the FCA’s “whistleblower” provisions.  Private enforcement of health care fraud has increased due in large part to amendments to the FCA that encourage private individuals to sue on behalf of the government. In addition, states may also have separate false claims acts, which, among other things, generally prohibit health care providers from filing false claims or making false statements to receive payments.  Still other laws require providers to comply with a variety of safety, health and other requirements relating to the condition of the licensed property and the quality of care provided.  Sanctions for violations of these laws, regulations, and other applicable guidance may include, but are not limited to, criminal and/or civil penalties and fines, loss of licensure, immediate termination of government payments, exclusion from any government health care program, damage assessments, and imprisonment.  In certain circumstances, violation of these rules (such as those prohibiting abusive and fraudulent behavior) with respect to one property may subject other facilities under common control or ownership to sanctions, including exclusion from participation in the Medicare and Medicaid programs, as well as other government health care programs.  In the ordinary course of its business, a property operator is regularly subjected to inquiries, investigations, and audits by the federal and state agencies that oversee these laws and regulations.

 

     Prosecutions, investigations, or whistleblower actions could have a material adverse effect on a property operator’s liquidity, financial condition, and operations, which could adversely affect the ability of the operator to meet its financial obligations to us.  In addition, government investigations and enforcement actions brought against the health care industry have increased dramatically over the past several years and are expected to continue.  Although the responsibility for enforcing these laws and regulations lies with a variety of federal, state and local governmental agencies, some may be enforced by private litigants through federal and state false claims acts and other laws, including some state privacy laws, that allow for private individuals to bring actions.  The costs for an operator of a health care property associated with both defending such enforcement actions and the undertakings in settling these actions can be substantial and could have a material adverse effect on the ability of an operator to meet its obligations to us.

 

Federal and State Data Privacy and Security Laws

 

    The Health Insurance Portability and Accountability Act of 1996, as amended by Health Information Technology for Economic and Clinical Health Act, and numerous other state and federal laws govern the collection, security, dissemination, use, access to and confidentiality of individually identifiable health information.  Violations of these laws may result in substantial civil and/or criminal fines and penalties.

 

United Kingdom

 

     In England, care home services are principally regulated by the Health and Social Care Act 2008 (as amended) and other regulations.  This legislation subjects service providers to a number of legally binding "Fundamental Standards" and requires, amongst other things, that all persons carrying out "Regulated Activities" in England, and the managers of such persons, be registered. Providers of care home services are also subject (as data controllers) to laws governing their use of personal data (including in relation

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to their employees, clients and recipients of their services).  These laws currently take the form of the UK's Data Protection Act 1998, enforced by the UK's Information Commissioner's Office, but this will be replaced in mid-2018 by the EU's new General Data Protection Regulation (“GDPR”).  The GDPR will impose a significant number of new obligations with the potential for fines of up to 4% of annual worldwide turnover or €20 million, whichever is greater.  Entities incorporated in or carrying on a business in the UK as well as individuals residing in the U.K. are also subject to the UK Bribery Act 2010.  The UK recently introduced a new national minimum wage with a maximum fine for non-payment of £20,000 per worker and employers who fail to pay will be banned from being a company director for up to 15 years.  The UK recently voted to exit from the EU (“Brexit”).  Negotiations on the exit agreement are underway but at present it is not possible to predict whether Brexit will have a material impact on our operators' or tenants' property or business.

 

Canada

 

     Retirement homes and long-term care homes are subject to regulation, and long-term care homes receive funding, under provincial law.  There is no federal regulation in this area.  Set out below are summaries of the principal regulatory requirements in the provinces where we have a material number of facilities.

 

     Licensing and Regulation

 

     Alberta

 

     In Alberta, there are three relevant designations for seniors’ living arrangements, ordered below from the most independent to the highest level of care.

·         Retirement Homes (also called independent living) are designed for older adults able to live on their own, and may offer various lifestyle amenities.  These residences may be rented, privately owned, or life-leased, and may be operated for profit or non-profit.  Support services are not usually offered, but can be arranged by residents.  Retirement homes do not generally receive government funding; residents pay for tenancy and services received.  Rental subsidies may be available to qualified seniors. Independent living residences are subject to provincial tenancy and housing laws.

·         Supportive Living (also called assisted living) provides home-like accommodation for residents who wish or need to access care, assistance, and services. Operators provide at least one meal a day or housekeeping services.  There are four levels of supportive living, addressing care needs from basic to advanced.  In addition, there are two specialized designations of supportive care to address the needs of residents who require the highest level of care including for those who have cognitive impairments. Supportive living can include seniors lodges, group homes, and mental health and designated supportive living accommodations, which can be operated by private for-profit or not-for-profit, or public operators.  Supportive living services are licensed and regulated under Provincial laws, and governed by the Ministry of Health.  Operators receiving public funds for health and personal care services must also comply with additional provincial legislation, and are subject to legislated safeguards aimed at investigation of suspected abuse. The maximum accommodation fee in publicly-funded designated supportive living is regulated by Alberta Health. In other supportive living settings, the operator sets the cost of accommodation. Health services are publicly-funded and provided through Alberta Health Services.  Private sector operators are eligible to apply for government funding under a government capital grant program that provides funding to develop long-term care and affordable supportive living spaces.

·         Nursing Homes (also called long-term care) are for residents who have complex, unpredictable medical needs and who require 24-hour on-site registered nurse assessment or treatment. Nursing homes are regulated by Provincial laws, and governed by the Ministry of Health.  Operators are not licensed, but enter into agreements with the Ministry for the operation of nursing homes and must comply with certain accommodation standards.  Homes can be operated by private for-profit or not-for-profit, or public operators. Operators that receive public funds for health and personal care services must also comply with certain health service standards and legislation aimed at protecting residents.  Alberta Health regulates the maximum accommodation fee in publicly-funded nursing homes.  Health services in long-term care are publicly-funded, provided through Alberta Health Services.  Private sector operators are eligible to apply for government funding, and the Minister may make grants to an operator in respect of its operating or capital costs.

 

Ontario

 

     Long-term care homes (also called nursing homes), receive government funding, are licensed under provincial law aimed at resident protection, and are governed by the Ministry of Health and Long-Term Care.  Retirement homes are regulated and licensed under a provincial law aimed at protecting residents. Retirement homes do not receive government funding; residents enter into tenancy agreements under provincial tenancy law, and pay for tenancy and services received.  Residents may access publicly-funded external care services at the home from external suppliers.  Retirement home licenses are granted by the Retirement Homes Regulatory Authority (“RHRA”), and are non-transferable. The RHRA administers the law governing retirement homes, to ensure that licensees are meeting certain standards, generally with respect to care and safety.  The law requires any person to report to the RHRA when there are reasonable grounds to suspect abuse of a resident by anyone, or neglect of a resident by staff.  The RHRA conducts a

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mandatory inspection and issues a report that is posted on the RHRA’s public website, and also must be posted in the subject home if it is the most recent report.  The Registrar of the RHRA can receive complaints about a retirement home contravening a provision of the law, and if such a complaint is received, it must be reviewed promptly.  The Registrar has broad powers relating to complaint investigation and action.  The RHRA Registrar has the power to inspect a retirement home at any time without warning or issue a warrant to ensure compliance.  Compliance inspections occur at least every three years. The Registrar has the power to make a variety of orders including the imposition of a fine or an order revoking the operator’s license.  The applicable law also enumerates offenses, such as operating without a license, and provides for penalties for offenses. All of the homes in which we have an interest in Ontario are licensed as retirement homes. One of the homes also has some licensed long-term care beds.

 

     British Columbia

 

     Provincial laws regulate and license “community care facilities” (long-term care homes) in substantially the same manner as retirement homes are regulated under Ontario laws. Community care facilities are defined as premises used for the purpose of supervising vulnerable persons who require three or more prescribed services (from a list that includes regular assistance with activities of daily living; distribution of medication; management of cash resources; monitoring of food intake; structured behavior management and intervention; and psychosocial or physical rehabilitative therapy).

 

     Provincial law also recognizes and regulates “assisted living residences,” for seniors who can live independently, but require assistance with certain activities. Services available can include meals, housekeeping, monitoring and emergency support, social/recreational opportunities, and transportation.  Assisted living residences do not require a license, but must be registered with the registrar of assisted living residences and must be operated in a manner that does not jeopardize the health or safety of residents. If the registrar believes the standard is not being met, the registrar may inspect the residence and may suspend or cancel a registration. 

 

    Independent living residences offer housing and hospitality services for retired adults who are functionally independent and able to direct their own care.   Most of the residences in which we have an interest in B.C. are assisted living residences, with one being an independent living residence.  

 

Québec

 

     Provincial laws in Québec regulate retirement homes (private seniors’ residences) as well as long-term care homes (residential and long-term care centers). All homes in which we have an interest in Québec are private seniors’ residences which are required to obtain a certificate of compliance based on prescribed operating standards. 

 

     A certificate of compliance is issued for a period of four years and is renewable. The regional health and social agency may revoke or refuse to issue or renew a certificate of compliance if, among other things, the operator fails to comply with the applicable law. The agency may also order corrective measures, further to an inspection, complaint or investigation. The agency is authorized to inspect a residence, at any reasonable time of day, in order to ascertain whether it complies with the law.

 

     Private seniors’ residences may belong to either or both of the following categories: (i) those offering services to independent elderly persons and (ii) those offering services to semi-independent elderly persons. The operator must, for each category, comply with the applicable criteria and standards, with some exceptions for residences with fewer than six or ten rooms or apartments. There are requirements with respect to residents’ health and safety, meal services and recreation, content of residents’ files, disclosure of information to residents, and staffing, among other things.   

 

  Other Related Laws

 

     Privacy

 

     The services provided in our facilities are subject to privacy legislation in Canada, including, in certain provinces, privacy laws specifically related to personal health information.  Although the obligations of custodians of personal information in the various provinces differ, they all include the obligation to protect the information.  The organizations with which we have management agreements may be the custodian of personal information collected in connection with the operation of our facilities.

 

     Privacy laws in Canada are consent-based and require the implementation of a privacy program involving policies, procedures and the designation of an individual or team with primary responsibility for privacy law compliance.  Mandatory breach notification to affected individuals is a requirement under some laws.  Mandatory breach notification to the applicable regulator is a requirement in some provinces.  Some laws require notification where personal information is processed or stored outside of Canada.  One provincial law (in Quebec) provides for fines where an organization fails to perform due diligence before outsourcing activities involving personal information to a service provider outside of the province.

 

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     The powers of privacy regulators and penalties for violations of privacy law vary according to the applicable law or are left to the courts.  To date, monetary penalties granted have been on the low side, although that is changing with civil actions for breach of privacy and may change further as a result of class action activity.  Regulators have the authority to make public the identity of a custodian that has been found to have committed a breach, so there is a reputational risk associated with privacy law violations even where no monetary damages are incurred. The notification of residents (mandatory under some privacy laws) and other activities required to manage a privacy breach can give rise to significant costs.

 

     Other Legislation

 

     Retirement homes may be subject to residential tenancy laws, such that there can be restrictions on rent increases and termination of tenancies, for instance.  Other provincial and/or municipal laws applicable to fire safety, food services, zoning, occupational health and safety, public health, and the provision of community health care and funded long-term/post-acute care may also apply to retirement homes. 

  

  

Taxation

 

Federal Income Tax Considerations

 

The following summary of the taxation of the Company and the material federal tax consequences to the holders of our debt and equity securities is for general information only and is not tax advice. This summary does not address all aspects of taxation that may be relevant to certain types of holders of stock or securities (including, but not limited to, insurance companies, tax-exempt entities, financial institutions or broker-dealers, persons holding shares of common stock as part of a hedging, integrated conversion, or constructive sale transaction or a straddle, traders in securities that use a mark-to-market method of accounting for their securities, investors in pass-through entities and foreign corporations and persons who are not citizens or residents of the United States).

 

This summary does not discuss all of the aspects of U.S. federal income taxation that may be relevant to you in light of your particular investment or other circumstances. In addition, this summary does not discuss any state or local income taxation or foreign income taxation or other tax consequences. This summary is based on current U.S. federal income tax law. Subsequent developments in U.S. federal income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income tax consequences of purchasing, owning and disposing of our securities as set forth in this summary. Before you purchase our securities, you should consult your own tax advisor regarding the particular U.S. federal, state, local, foreign and other tax consequences of acquiring, owning and selling our securities.

 

General

 

We elected to be taxed as a real estate investment trust (a “REIT”) commencing with our first taxable year. We intend to continue to operate in such a manner as to qualify as a REIT, but there is no guarantee that we will qualify or remain qualified as a REIT for subsequent years. Qualification and taxation as a REIT depends upon our ability to meet a variety of qualification tests imposed under federal income tax law with respect to income, assets, distribution level and diversity of share ownership as discussed below under “— Qualification as a REIT.” There can be no assurance that we will be owned and organized and will operate in a manner so as to qualify or remain qualified.

 

In any year in which we qualify as a REIT, in general, we will not be subject to federal income tax on that portion of our REIT taxable income or capital gain that is distributed to stockholders. We may, however, be subject to tax at normal corporate rates on any taxable income or capital gain not distributed. If we elect to retain and pay income tax on our net long-term capital gains, stockholders are required to include their proportionate share of our undistributed long-term capital gains in income, but they will receive a refundable credit for their share of any taxes paid by us on such gain.

 

Despite the REIT election, we may be subject to federal income and excise tax as follows:

•     To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates;

•     We may be subject to the “alternative minimum tax” (the “AMT”) on certain tax preference items to the extent that the AMT exceeds our regular tax;

•     If we have net income from the sale or other disposition of “foreclosure property” that is held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, such income will be taxed at the highest corporate rate;

•     Any net income from prohibited transactions (which are, in general, sales or other dispositions of property held primarily for sale to customers in the ordinary course of business, other than dispositions of foreclosure property and dispositions of property due to an involuntary conversion) will be subject to a 100% tax;

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•     If we fail to satisfy either the 75% or 95% gross income tests (as discussed below), but nonetheless maintain our qualification as a REIT because certain other requirements are met, we will be subject to a 100% tax on an amount equal to (1) the gross income attributable to the greater of (i) 75% of our gross income over the amount of qualifying gross income for purposes of the 75% gross income test (discussed below) or (ii) 95% of our gross income over the amount of qualifying gross income for purposes of the 95% gross income test (discussed below) multiplied by (2) a fraction intended to reflect our profitability;

•     If we fail to distribute during each year at least the sum of (1) 85% of our REIT ordinary income for the year, (2) 95% of our REIT capital gain net income for such year (other than capital gain that we elect to retain and pay tax on) and (3) any undistributed taxable income from preceding periods, we will be subject to a 4% excise tax on the excess of such required distribution over amounts actually distributed;

•     We will be subject to a 100% tax on the amount of any rents from real property, deductions or excess interest paid to us by any of our “taxable REIT subsidiaries” that would be reduced through reallocation under certain federal income tax principles in order to more clearly reflect income of the taxable REIT subsidiary. See “— Qualification as a REIT — Investments in Taxable REIT Subsidiaries;” and

•     We may be subject to the corporate “alternative minimum tax” on any items of tax preference, including any deductions of net operating losses.

 

If we acquire any assets from a corporation, which is or has been a “C” corporation, in a carryover basis transaction, we could be liable for specified liabilities that are inherited from the “C” corporation. A “C” corporation is generally defined as a corporation that is required to pay full corporate level federal income tax. If we recognize gain on the disposition of the assets during the five-year period beginning on the date on which the assets were acquired by us, then, to the extent of the assets’ “built-in gain” (i.e., the excess of the fair market value of the asset over the adjusted tax basis in the asset, in each case determined as of the beginning of the five-year period), we will be subject to tax on the gain at the highest regular corporate rate applicable. The results described in this paragraph with respect to the recognition of built-in gain assume that the built-in gain assets, at the time the built-in gain assets were subject to a conversion transaction (either where a “C” corporation elected REIT status or a REIT acquired the assets from a “C” corporation), were not treated as sold to an unrelated party and gain recognized.  For those properties that are subject to the built-in-gains tax, if triggered by a sale within the five-year period beginning on the date on which the properties were acquired by us, then the potential amount of built-in-gains tax will be an additional factor when considering a possible sale of the properties.  See Note 18 to our consolidated financial statements for additional information regarding the built-in gains tax.

 

Qualification as a REIT

 

A REIT is defined as a corporation, trust or association:

(1)     which is managed by one or more trustees or directors;

(2)     the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest;

(3)     which would be taxable as a domestic corporation but for the federal income tax law relating to REITs;

(4)     which is neither a financial institution nor an insurance company;

(5)     the beneficial ownership of which is held by 100 or more persons in each taxable year of the REIT except for its first taxable year;

(6)     not more than 50% in value of the outstanding stock of which is owned during the last half of each taxable year, excluding its first taxable year, directly or indirectly, by or for five or fewer individuals (which includes certain entities) (the “Five or Fewer Requirement”); and

(7)     which meets certain income and asset tests described below.

 

Conditions (1) to (4), inclusive, must be met during the entire taxable year and condition (5) must be met during at least 335 days of a taxable year of 12 months or during a proportionate part of a taxable year of less than 12 months. For purposes of conditions (5) and (6), pension funds and certain other tax-exempt entities are treated as individuals, subject to a “look-through” exception in the case of condition (6).

 

Based on publicly available information, we believe we have satisfied the share ownership requirements set forth in (5) and (6) above. In addition, Article VI of our by-laws provides for restrictions regarding ownership and transfer of shares. These restrictions are intended to assist us in continuing to satisfy the share ownership requirements described in (5) and (6) above. These restrictions, however, may not ensure that we will, in all cases, be able to satisfy the share ownership requirements described in (5) and (6) above.

 

We have complied with, and will continue to comply with, regulatory rules to send annual letters to certain of our stockholders requesting information regarding the actual ownership of our stock. If, despite sending the annual letters, we do not know, or after exercising reasonable diligence would not have known, whether we failed to meet the Five or Fewer Requirement, we will be treated as having met the Five or Fewer Requirement. If we fail to comply with these regulatory rules, we will be subject to a monetary penalty. If our failure to comply was due to intentional disregard of the requirement, the penalty would be increased. However, if our failure to comply were due to reasonable cause and not willful neglect, no penalty would be imposed.

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We may own a number of properties through wholly owned subsidiaries. A corporation will qualify as a “qualified REIT subsidiary” if 100% of its stock is owned by a REIT, and the REIT does not elect to treat the subsidiary as a taxable REIT subsidiary. A “qualified REIT subsidiary” will not be treated as a separate corporation, and all assets, liabilities and items of income, deductions and credits of a “qualified REIT subsidiary” will be treated as assets, liabilities and items (as the case may be) of the REIT. A “qualified REIT subsidiary” is not subject to federal income tax, and our ownership of the voting stock of a qualified REIT subsidiary will not violate the restrictions against ownership of securities of any one issuer which constitute more than 10% of the value or total voting power of such issuer or more than 5% of the value of our total assets, as described below under “— Asset Tests.”

 

If we invest in a partnership, a limited liability company or a trust taxed as a partnership or as a disregarded entity, we will be deemed to own a proportionate share of the partnership’s, limited liability company’s or trust’s assets. Likewise, we will be treated as receiving our share of the income and loss of the partnership, limited liability company or trust, and the gross income will retain the same character in our hands as it has in the hands of the partnership, limited liability company or trust. These “look-through” rules apply for purposes of the income tests and assets tests described below.

 

Income Tests.  There are two separate percentage tests relating to our sources of gross income that we must satisfy each taxable year.

•     At least 75% of our gross income (excluding gross income from certain sales of property held primarily for sale) must be directly or indirectly derived each taxable year from “rents from real property,” other income from investments relating to real property or mortgages on real property or certain income from qualified temporary investments.

•     At least 95% of our gross income (excluding gross income from certain sales of property held primarily for sale) must be directly or indirectly derived each taxable year from any of the sources qualifying for the 75% gross income test and from dividends (including dividends from taxable REIT subsidiaries) and interest.

 

As to transactions entered into in taxable years beginning after October 22, 2004 and on or prior to July 30, 2008, any of our income from a “clearly identified” hedging transaction that is entered into by us in the normal course of business, directly or indirectly, to manage the risk of interest rate movements, price changes or currency fluctuations with respect to borrowings or obligations incurred or to be incurred by us, or such other risks that are prescribed by the Internal Revenue Service, is excluded from the 95% gross income test.

 

For transactions entered into after July 30, 2008, any of our income from a “clearly identified” hedging transaction that is entered into by us in the normal course of business, directly or indirectly, to manage the risk of interest rate movements, price changes or currency fluctuations with respect to borrowings or obligations incurred or to be incurred by us is excluded from the 95% and 75% gross income tests. For transactions entered into after July 30, 2008, any of our income from a “clearly identified” hedging transaction entered into by us primarily to manage risk of currency fluctuations with respect to any item of income or gain that is included in gross income in the 95% and 75% gross income tests is excluded from the 95% and 75% gross income tests.

 

In general, a hedging transaction is “clearly identified” if (1) the transaction is identified as a hedging transaction before the end of the day on which it is entered into and (2) the items or risks being hedged are identified “substantially contemporaneously” with the hedging transaction. An identification is not substantially contemporaneous if it is made more than 35 days after entering into the hedging transaction.

 

As to gains and items of income recognized after July 30, 2008, “passive foreign exchange gain” for any taxable year will not constitute gross income for purposes of the 95% gross income test and “real estate foreign exchange gain” for any taxable year will not constitute gross income for purposes of the 75% gross income test. Real estate foreign exchange gain is foreign currency gain (as defined in Internal Revenue Code Section 988(b)(1)) which is attributable to: (i) any qualifying item of income or gain for purposes of the 75% gross income test; (ii) the acquisition or ownership of obligations secured by mortgages on real property or interests in real property; or (iii) becoming or being the obligor under obligations secured by mortgages on real property or on interests in real property. Real estate foreign exchange gain also includes Internal Revenue Code Section 987 gain attributable to a qualified business unit (a “QBU”) of a REIT if the QBU itself meets the 75% gross income test for the taxable year and the 75% asset test at the close of each quarter that the REIT has directly or indirectly held the QBU. Real estate foreign exchange gain also includes any other foreign currency gain as determined by the Secretary of the Treasury. Passive foreign exchange gain includes all real estate foreign exchange gain and foreign currency gain which is attributable to: (i) any qualifying item of income or gain for purposes of the 95% gross income test; (ii) the acquisition or ownership of obligations; (iii) becoming or being the obligor under obligations; and (iv) any other foreign currency gain as determined by the Secretary of the Treasury.

 

Generally, other than income from “clearly identified” hedging transactions entered into by us in the normal course of business, any foreign currency gain derived by us from dealing, or engaging in substantial and regular trading, in securities will constitute gross income which does not qualify under the 95% or 75% gross income tests.

 

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Rents received by us will qualify as “rents from real property” for purposes of satisfying the gross income tests for a REIT only if several conditions are met:

•     The amount of rent must not be based in whole or in part on the income or profits of any person, although rents generally will not be excluded merely because they are based on a fixed percentage or percentages of receipts or sales.

•     Rents received from a tenant will not qualify as rents from real property if the REIT, or an owner of 10% or more of the REIT, also directly or constructively owns 10% or more of the tenant, unless the tenant is our taxable REIT subsidiary and certain other requirements are met with respect to the real property being rented.

•     If rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent received under the lease, then the portion of rent attributable to such personal property will not qualify as “rents from real property.”

•     For rents to qualify as rents from real property, we generally must not furnish or render services to tenants, other than through a taxable REIT subsidiary or an “independent contractor” from whom we derive no income, except that we may directly provide services that are “usually or customarily rendered” in the geographic area in which the property is located in connection with the rental of real property for occupancy only, or are not otherwise considered “rendered to the occupant for his convenience.”

•     For taxable years beginning after July 30, 2008, the REIT may lease “qualified health care properties” on an arm’s-length basis to a taxable REIT subsidiary if the property is operated on behalf of such subsidiary by a person who qualifies as an “independent contractor” and who is, or is related to a person who is, actively engaged in the trade or business of operating health care facilities for any person unrelated to us or our taxable REIT subsidiary, an “eligible independent contractor.” Generally, the rent that the REIT receives from the taxable REIT subsidiary will be treated as “rents from real property.”  A “qualified health care property” includes any real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility that extends medical or nursing or ancillary services to patients and is operated by a provider of such services that is eligible for participation in the Medicare program with respect to such facility.

 

A REIT is permitted to render a de minimis amount of impermissible services to tenants and still treat amounts received with respect to that property as rent from real property. The amount received or accrued by the REIT during the taxable year for the impermissible services with respect to a property may not exceed 1% of all amounts received or accrued by the REIT directly or indirectly from the property. The amount received for any service or management operation for this purpose shall be deemed to be not less than 150% of the direct cost of the REIT in furnishing or rendering the service or providing the management or operation. Furthermore, impermissible services may be furnished to tenants by a taxable REIT subsidiary subject to certain conditions, and we may still treat rents received with respect to the property as rent from real property.

 

The term “interest” generally does not include any amount if the determination of the amount depends in whole or in part on the income or profits of any person, although an amount generally will not be excluded from the term “interest” solely by reason of being based on a fixed percentage of receipts or sales.

 

If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may nevertheless qualify as a REIT for such year if we are eligible for relief.  These relief provisions generally will be available if (1) following our identification of the failure, we file a schedule for such taxable year describing each item of our gross income, and (2) the failure to meet such tests was due to reasonable cause and not due to willful neglect. It is not now possible to determine the circumstances under which we may be entitled to the benefit of these relief provisions. If these relief provisions apply, a 100% tax is imposed on an amount equal to (a) the gross income attributable to (1) 75% of our gross income over the amount of qualifying gross income for purposes of the 75% income test and (2) 95% of our gross income over the amount of qualifying gross income for purposes of the 95% income test, multiplied by (b) a fraction intended to reflect our profitability. The Secretary of the Treasury is given broad authority to determine whether particular items of income or gain qualify or not under the 75% and 95% gross income tests, or are to be excluded from the measure of gross income for such purposes.

 

Asset Tests.  Within 30 days after the close of each quarter of our taxable year, we must also satisfy several tests relating to the nature and diversification of our assets determined in accordance with generally accepted accounting principles. At least 75% of the value of our total assets must be represented by real estate assets, cash, cash items (including receivables arising in the ordinary course of our operation), government securities and qualified temporary investments. Although the remaining 25% of our assets generally may be invested without restriction, we are prohibited from owning securities representing more than 10% of either the vote (the “10% vote test”) or value (the “10% value test”) of the outstanding securities of any issuer other than a qualified REIT subsidiary, another REIT or a taxable REIT subsidiary. Further, no more than 25% (20% for tax years beginning after 2017) of the total assets may be represented by securities of one or more taxable REIT subsidiaries (the “25% asset test”) and no more than 5% of the value of our total assets may be represented by securities of any non-governmental issuer other than a qualified REIT subsidiary (the “5% asset test”), another REIT or a taxable REIT subsidiary. Each of the 10% vote test, the 10% value test and the 25% and 5% asset tests must be satisfied at the end of each quarter. There are special rules which provide relief if the value related tests are not satisfied due to changes in the value of the assets of a REIT.

 

Certain items are excluded from the 10% value test, including: (1) straight debt securities (as defined in Internal Revenue Code Section 1361(c)(5)) of an issuer (including straight debt that provides certain contingent payments); (2) any loan to an individual or an

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estate; (3) any rental agreement described in Section 467 of the Internal Revenue Code, other than with a “related person”; (4) any obligation to pay rents from real property; (5) certain securities issued by a state or any subdivision thereof, the District of Columbia, a foreign government, or any political subdivision thereof, or the Commonwealth of Puerto Rico; (6) any security issued by a REIT; and (7) any other arrangement that, as determined by the Secretary of the Treasury, is excepted from the definition of security (“excluded securities”). Special rules apply to straight debt securities issued by corporations and entities taxable as partnerships for federal income tax purposes. If a REIT, or its taxable REIT subsidiary, holds (1) straight debt securities of a corporate or partnership issuer and (2) securities of such issuer that are not excluded securities and have an aggregate value greater than 1% of such issuer’s outstanding securities, the straight debt securities will be included in the 10% value test.

 

A REIT’s interest as a partner in a partnership is not treated as a security for purposes of applying the 10% value test to securities issued by the partnership. Further, any debt instrument issued by a partnership will not be a security for purposes of applying the 10% value test (1) to the extent of the REIT’s interest as a partner in the partnership and (2) if at least 75% of the partnership’s gross income (excluding gross income from prohibited transactions) would qualify for the 75% gross income test.  For purposes of the 10% value test, a REIT’s interest in a partnership’s assets is determined by the REIT’s proportionate interest in any securities issued by the partnership (other than the excluded securities described in the preceding paragraph).

 

For taxable years beginning after July 30, 2008, if the REIT or its QBU uses a foreign currency as its functional currency, the term “cash” includes such foreign currency, but only to the extent such foreign currency is (i) held for use in the normal course of the activities of the REIT or QBU which give rise to items of income or gain that are included in the 95% and 75% gross income tests or are directly related to acquiring or holding assets qualifying under the 75% asset test, and (ii) not held in connection with dealing or engaging in substantial and regular trading in securities.

 

With respect to corrections of failures as to violations of the 10% vote test, the 10% value test or the 5% asset test, a REIT may avoid disqualification as a REIT by disposing of sufficient assets to cure a violation that does not exceed the lesser of 1% of the REIT’s assets at the end of the relevant quarter or $10,000,000, provided that the disposition occurs within six months following the last day of the quarter in which the REIT first identified the assets. For violations of any of the REIT asset tests due to reasonable cause and not willful neglect that exceed the thresholds described in the preceding sentence, a REIT can avoid disqualification as a REIT after the close of a taxable quarter by taking certain steps, including disposition of sufficient assets within the six month period described above to meet the applicable asset test, paying a tax equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net income generated by the non-qualifying assets during the period of time that the assets were held as non-qualifying assets and filing a schedule with the Internal Revenue Service that describes the non-qualifying assets.

 

Investments in Taxable REIT Subsidiaries.   REITs may own more than 10% of the voting power and value of securities in taxable REIT subsidiaries. Unlike a qualified REIT subsidiary, other disregarded entity or partnership, the income and assets of a taxable REIT subsidiary are not attributable to the REIT for purposes of satisfying the income and asset ownership requirements applicable to REIT qualification.  We and any taxable corporate entity in which we own an interest are allowed to jointly elect to treat such entity as a “taxable REIT subsidiary.”

 

Certain of our subsidiaries have elected to be treated as a taxable REIT subsidiary. Taxable REIT subsidiaries are subject to full corporate level federal taxation on their earnings but are permitted to engage in certain types of activities that cannot be performed directly by REITs without jeopardizing their REIT status. Our taxable REIT subsidiaries will attempt to minimize the amount of these taxes, but there can be no assurance whether or the extent to which measures taken to minimize taxes will be successful. To the extent our taxable REIT subsidiaries are required to pay federal, state or local taxes, the cash available for distribution as dividends to us from our taxable REIT subsidiaries will be reduced.

 

The amount of interest on related-party debt that a taxable REIT subsidiary may deduct is limited. Further, a 100% tax applies to any interest payments by a taxable REIT subsidiary to its affiliated REIT to the extent the interest rate is not commercially reasonable. A taxable REIT subsidiary is permitted to deduct interest payments to unrelated parties without any of these restrictions.

 

The Internal Revenue Service may reallocate costs between a REIT and its taxable REIT subsidiary where there is a lack of arm’s-length dealing between the parties. Any deductible expenses allocated away from a taxable REIT subsidiary would increase its tax liability. Further, any amount by which a REIT understates its deductions and overstates those of its taxable REIT subsidiary may, subject to certain exceptions, be subject to a 100% tax. Additional taxable REIT subsidiary elections may be made in the future for additional entities in which we obtain an interest.

 

     Annual Distribution Requirements.  In order to avoid being taxed as a regular corporation, we are required to make distributions (other than capital gain distributions) to our stockholders which qualify for the dividends paid deduction in an amount at least equal to (1) the sum of (i) 90% of our “REIT taxable income” (computed without regard to the dividends paid deduction and our net capital gain) and (ii) 90% of the after-tax net income, if any, from foreclosure property, minus (2) a portion of certain items of non-cash income. These distributions must be paid in the taxable year to which they relate, or in the following taxable year if declared before we timely file our tax return for that year and if paid on or before the first regular distribution payment after such declaration.  Prior to recently enacted legislation, with respect to all REITs the amount distributed could not be preferential. This means that every stockholder of the class of stock to which a distribution is made must be treated the same as every other stockholder of that class, and

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no class of stock may be treated otherwise than in accordance with its dividend rights as a class (the “preferential dividend rule”).  Beginning in tax years after 2014, the preferential dividend rule no longer applies to publicly offered REITs, however, the rule is still applicable to other entities taxed as REITs, which would include several of our subsidiaries.  To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates.  As discussed above, we may be subject to an excise tax if we fail to meet certain other distribution requirements. We believe we have satisfied the annual distribution requirements for the year of our initial REIT election and each year thereafter through the year ended December 31, 2016. Although we intend to make timely distributions sufficient to satisfy these annual distribution requirements for subsequent years, economic, market, legal, tax or other factors could limit our ability to meet those requirements. See “Item 1A — Risk Factors.”

 

It is also possible that, from time to time, we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement, or to distribute such greater amount as may be necessary to avoid income and excise taxation, due to, among other things, (1) timing differences between (i) the actual receipt of income and actual payment of deductible expenses and (ii) the inclusion of income and deduction of expenses in arriving at our taxable income, or (2) the payment of severance benefits that may not be deductible to us. In the event that timing differences occur, we may find it necessary to arrange for borrowings or, if possible, pay dividends in the form of taxable stock dividends in order to meet the distribution requirement.

 

Under certain circumstances, in the event of a deficiency determined by the Internal Revenue Service, we may be able to rectify a resulting failure to meet the distribution requirement for a year by paying “deficiency dividends” to stockholders in a later year, which may be included in our deduction for distributions paid for the earlier year. Thus, we may be able to avoid being taxed on amounts distributed as deficiency dividends; however, we will be required to pay applicable penalties and interest based upon the amount of any deduction taken for deficiency dividend distributions.

 

     Failure to Qualify as a REIT

 

If we fail to qualify for taxation as a REIT in any taxable year, we will be subject to federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates. Distributions to stockholders in any year in which we fail to qualify as a REIT will not be deductible nor will any particular amount of distributions be required to be made in any year. All distributions to stockholders will be taxable as ordinary income to the extent of current and accumulated earnings and profits allocable to these distributions and, subject to certain limitations, will be eligible for the dividends received deduction for corporate stockholders. Unless entitled to relief under specific statutory provisions, we also will be disqualified from taxation as a REIT for the four taxable years following the year during which qualification was lost. It is not possible to state whether in all circumstances we would be entitled to statutory relief. Failure to qualify for even one year could result in our need to incur indebtedness or liquidate investments in order to pay potentially significant resulting tax liabilities.

 

In addition to the relief described above under “— Income Tests” and “— Asset Tests,” relief is available in the event that we violate a provision of the Internal Revenue Code that would result in our failure to qualify as a REIT if: (1) the violation is due to reasonable cause and not due to willful neglect; (2) we pay a penalty of $50,000 for each failure to satisfy the provision; and (3) the violation does not include a violation described under “— Income Tests” or “— Asset Tests” above. It is not now possible to determine the circumstances under which we may be entitled to the benefit of these relief provisions.

 

Federal Income Taxation of Holders of Our Stock

 

Treatment of Taxable U.S. Stockholders.  The following summary applies to you only if you are a “U.S. stockholder.” A “U.S. stockholder” is a holder of shares of stock who, for United States federal income tax purposes, is:

•     a citizen or resident of the United States;

•     a corporation, partnership or other entity classified as a corporation or partnership for these purposes, created or organized in or under the laws of the United States or of any political subdivision of the United States, including any state;

•     an estate, the income of which is subject to United States federal income taxation regardless of its source; or

•     a trust, if, in general, a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons, within the meaning of the Internal Revenue Code, has the authority to control all of the trust’s substantial decisions.

 

So long as we qualify for taxation as a REIT, distributions on shares of our stock made out of the current or accumulated earnings and profits allocable to these distributions (and not designated as capital gain dividends) will be includable as ordinary income for federal income tax purposes. None of these distributions will be eligible for the dividends received deduction for U.S. corporate stockholders.

 

Generally, the current maximum marginal rate of tax payable by individuals on dividends received from corporations that are subject to a corporate level of tax is 20%. Except in limited circumstances, this tax rate will not apply to dividends paid to you by us on our shares, because generally we are not subject to federal income tax on the portion of our REIT taxable income or capital gains

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distributed to our stockholders. The reduced maximum federal income tax rate will apply to that portion, if any, of dividends received by you with respect to our shares that are attributable to: (1) dividends received by us from non-REIT corporations or other taxable REIT subsidiaries; (2) income from the prior year with respect to which we were required to pay federal corporate income tax during the prior year (if, for example, we did not distribute 100% of our REIT taxable income for the prior year); or (3) the amount of any earnings and profits that were distributed by us and accumulated in a non-REIT year.

 

Distributions that are designated as capital gain dividends will be taxed as long-term capital gains (to the extent they do not exceed our actual net capital gain for the taxable year), without regard to the period for which you held our stock. However, if you are a corporation, you may be required to treat a portion of some capital gain dividends as ordinary income.

 

If we elect to retain and pay income tax on any net long-term capital gain, you would include in income, as long-term capital gain, your proportionate share of this net long-term capital gain. You would also receive a refundable tax credit for your proportionate share of the tax paid by us on such retained capital gains, and you would have an increase in the basis of your shares of our stock in an amount equal to your includable capital gains less your share of the tax deemed paid.

 

You may not include in your federal income tax return any of our net operating losses or capital losses. Federal income tax rules may also require that certain minimum tax adjustments and preferences be apportioned to you. In addition, any distribution declared by us in October, November or December of any year on a specified date in any such month shall be treated as both paid by us and received by you on December 31 of that year, provided that the distribution is actually paid by us no later than January 31 of the following year.

 

We will be treated as having sufficient earnings and profits to treat as a dividend any distribution up to the amount required to be distributed in order to avoid imposition of the 4% excise tax discussed under “— General” and “— Qualification as a REIT — Annual Distribution Requirements” above. As a result, you may be required to treat as taxable dividends certain distributions that would otherwise result in a tax-free return of capital. Moreover, any “deficiency dividend” will be treated as a dividend (an ordinary dividend or a capital gain dividend, as the case may be), regardless of our earnings and profits. Any other distributions in excess of current or accumulated earnings and profits will not be taxable to you to the extent these distributions do not exceed the adjusted tax basis of your shares of our stock. You will be required to reduce the tax basis of your shares of our stock by the amount of these distributions until the basis has been reduced to zero, after which these distributions will be taxable as capital gain, if the shares of our stock are held as capital assets. The tax basis as so reduced will be used in computing the capital gain or loss, if any, realized upon sale of the shares of our stock. Any loss upon a sale or exchange of shares of our stock which were held for six months or less (after application of certain holding period rules) will generally be treated as a long-term capital loss to the extent you previously received capital gain distributions with respect to these shares of our stock.

 

Upon the sale or exchange of any shares of our stock to or with a person other than us or a sale or exchange of all shares of our stock (whether actually or constructively owned) with us, you will generally recognize capital gain or loss equal to the difference between the amount realized on the sale or exchange and your adjusted tax basis in these shares of our stock. This gain will be capital gain if you held these shares of our stock as a capital asset.

 

If we redeem any of your shares in us, the treatment can only be determined on the basis of particular facts at the time of redemption. In general, you will recognize gain or loss (as opposed to dividend income) equal to the difference between the amount received by you in the redemption and your adjusted tax basis in your shares redeemed if such redemption: (1) results in a “complete termination” of your interest in all classes of our equity securities; (2) is a “substantially disproportionate redemption”; or (3) is “not essentially equivalent to a dividend” with respect to you. In applying these tests, you must take into account your ownership of all classes of our equity securities (e.g., common stock, preferred stock, depositary shares and warrants). You also must take into account any equity securities that are considered to be constructively owned by you.

 

If, as a result of a redemption by us of your shares, you no longer own (either actually or constructively) any of our equity securities or only own (actually and constructively) an insubstantial percentage of our equity securities, then it is probable that the redemption of your shares would be considered “not essentially equivalent to a dividend” and, thus, would result in gain or loss to you. However, whether a distribution is “not essentially equivalent to a dividend” depends on all of the facts and circumstances, and if you rely on any of these tests at the time of redemption, you should consult your tax advisor to determine their application to the particular situation.

 

Generally, if the redemption does not meet the tests described above, then the proceeds received by you from the redemption of your shares will be treated as a distribution taxable as a dividend to the extent of the allocable portion of current or accumulated earnings and profits. If the redemption is taxed as a dividend, your adjusted tax basis in the redeemed shares will be transferred to any other shareholdings in us that you own. If you own no other shareholdings in us, under certain circumstances, such basis may be transferred to a related person, or it may be lost entirely.

 

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Gain from the sale or exchange of our shares held for more than one year is generally taxed at a maximum long-term capital gain rate of 20% in the case of stockholders who are individuals and 35% in the case of stockholders that are corporations.  Pursuant to Internal Revenue Service guidance, we may classify portions of our capital gain dividends as gains eligible for the long-term capital gains rate or as gain taxable to individual stockholders at a maximum rate of 25%.  Capital losses recognized by a stockholder upon the disposition of our shares held for more than one year at the time of disposition will be considered long-term capital losses, and are generally available only to offset capital gain income of the stockholder but not ordinary income (except in the case of individuals, who may offset up to $3,000 of ordinary income each year).

 

An additional tax of 3.8% generally will be imposed on the “net investment income” of U.S. stockholders who meet certain requirements and are individuals, estates or certain trusts.  Among other items, “net investment income” generally includes gross income from dividends and net gain attributable to the disposition of certain property, such as shares of our common stock or warrants. In the case of individuals, this tax will only apply to the extent such individual’s modified adjusted gross income exceeds $200,000 ($250,000 for married couples filing a joint return and surviving spouses, and $125,000 for married individuals filing a separate return). U.S. stockholders should consult their tax advisors regarding the possible applicability of this additional tax in their particular circumstances.

 

Treatment of Tax-Exempt U.S. Stockholders.  Tax-exempt entities, including qualified employee pension and profit sharing trusts and individual retirement accounts (“Exempt Organizations”), generally are exempt from federal income taxation. However, they are subject to taxation on their unrelated business taxable income (“UBTI”). The Internal Revenue Service has issued a published revenue ruling that dividend distributions from a REIT to an exempt employee pension trust do not constitute UBTI, provided that the shares of the REIT are not otherwise used in an unrelated trade or business of the exempt employee pension trust. Based on this ruling, amounts distributed by us to Exempt Organizations generally should not constitute UBTI. However, if an Exempt Organization finances its acquisition of the shares of our stock with debt, a portion of its income from us will constitute UBTI pursuant to the “debt financed property” rules. Likewise, a portion of the Exempt Organization’s income from us would constitute UBTI if we held a residual interest in a real estate mortgage investment conduit.

 

In addition, in certain circumstances, a pension trust that owns more than 10% of our stock is required to treat a percentage of our dividends as UBTI. This rule applies to a pension trust holding more than 10% of our stock only if: (1) the percentage of our income that is UBTI (determined as if we were a pension trust) is at least 5%; (2) we qualify as a REIT by reason of the modification of the Five or Fewer Requirement that allows beneficiaries of the pension trust to be treated as holding shares in proportion to their actuarial interests in the pension trust; and (3) either (i) one pension trust owns more than 25% of the value of our stock, or (ii) a group of pension trusts individually holding more than 10% of the value of our stock collectively own more than 50% of the value of our stock.

 

Backup Withholding and Information Reporting.  Under certain circumstances, you may be subject to backup withholding at applicable rates on payments made with respect to, or cash proceeds of a sale or exchange of, shares of our stock. Backup withholding will apply only if you: (1) fail to provide a correct taxpayer identification number, which if you are an individual, is ordinarily your social security number; (2) furnish an incorrect taxpayer identification number; (3) are notified by the Internal Revenue Service that you have failed to properly report payments of interest or dividends; or (4) fail to certify, under penalties of perjury, that you have furnished a correct taxpayer identification number and that the Internal Revenue Service has not notified you that you are subject to backup withholding.

 

Backup withholding will not apply with respect to payments made to certain exempt recipients, such as corporations and tax-exempt organizations. You should consult with a tax advisor regarding qualification for exemption from backup withholding, and the procedure for obtaining an exemption. Backup withholding is not an additional tax. Rather, the amount of any backup withholding with respect to a payment to a stockholder will be allowed as a credit against such stockholder’s United States federal income tax liability and may entitle such stockholder to a refund, provided that the required information is provided to the Internal Revenue Service. In addition, withholding a portion of capital gain distributions made to stockholders may be required for stockholders who fail to certify their non-foreign status.

 

Taxation of Foreign Stockholders.  The following summary applies to you only if you are a foreign person. The federal taxation of foreign persons is a highly complex matter that may be affected by many considerations.

 

Except as discussed below, distributions to you of cash generated by our real estate operations in the form of ordinary dividends, but not by the sale or exchange of our capital assets, generally will be subject to U.S. withholding tax at a rate of 30%, unless an applicable tax treaty reduces that tax and you file with us the required form evidencing the lower rate.

 

In general, you will be subject to United States federal income tax on a graduated rate basis rather than withholding with respect to your investment in our stock if such investment is “effectively connected” with your conduct of a trade or business in the United States. A corporate foreign stockholder that receives income that is, or is treated as, effectively connected with a United States trade or business may also be subject to the branch profits tax, which is payable in addition to regular United States corporate income tax. The following discussion will apply to foreign stockholders whose investment in us is not so effectively connected. We expect to withhold United States income tax, as described below, on the gross amount of any distributions paid to you unless (1) you file an Internal Revenue Service Form W-8ECI with us claiming that the distribution is “effectively connected” or (2) certain other exceptions apply.

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Distributions by us that are attributable to gain from the sale or exchange of a United States real property interest will be taxed to you under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) as if these distributions were gains “effectively connected” with a United States trade or business. Accordingly, you will be taxed at the normal capital gain rates applicable to a U.S. stockholder on these amounts, subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals. Distributions subject to FIRPTA may also be subject to a branch profits tax in the hands of a corporate foreign stockholder that is not entitled to treaty exemption.

 

We will be required to withhold from distributions subject to FIRPTA, and remit to the Internal Revenue Service, 35% of designated capital gain dividends, or, if greater, 35% of the amount of any distributions that could be designated as capital gain dividends. In addition, if we designate prior distributions as capital gain dividends, subsequent distributions, up to the amount of the prior distributions not withheld against, will be treated as capital gain dividends for purposes of withholding.

 

Any capital gain dividend with respect to any class of stock that is “regularly traded” on an established securities market will be treated as an ordinary dividend if the foreign stockholder did not own more than 10% of such class of stock at any time during the taxable year. Foreign stockholders generally will not be required to report distributions received from us on U.S. federal income tax returns and all distributions treated as dividends for U.S. federal income tax purposes (including any such capital gain dividends) will be subject to a 30% U.S. withholding tax (unless reduced under an applicable income tax treaty) as discussed above. In addition, the branch profits tax will not apply to such distributions.

 

Unless our shares constitute a “United States real property interest” within the meaning of FIRPTA or are effectively connected with a U.S. trade or business, a sale of our shares by you generally will not be subject to United States taxation. Though, under the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”), enacted on December 18, 2015, even if our shares were to constitute a “United States real property interest,” non-U.S. stockholders that are “qualified foreign pension funds” (or are owned by a qualified foreign pension) meeting certain requirements may be exempt from FIRPTA withholding on the sale or disposition of our shares. Our shares will not constitute a United States real property interest if we qualify as a “domestically controlled REIT.” We believe that we, and expect to continue to, qualify as a domestically controlled REIT. A domestically controlled REIT is a REIT in which at all times during a specified testing period less than 50% in value of its shares is held directly or indirectly by foreign stockholders. Generally, under the PATH Act, we are permitted to assume that holders of less than 5% of our shares at all times during a specified testing period are U.S. persons.  However, if you are a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions apply, you will be subject to a 30% tax on such capital gains. In any event, a purchaser of our shares from you will not be required under FIRPTA to withhold on the purchase price if the purchased shares are “regularly traded” on an established securities market or if we are a domestically controlled REIT. Otherwise, under FIRPTA, the purchaser may be required to withhold 10% (increased to 15% under the PATH Act for distributions occurring after February 16, 2016) of the purchase price and remit such amount to the Internal Revenue Service.

 

Backup withholding tax and information reporting will generally not apply to distributions paid to you outside the United States that are treated as: (1) dividends to which the 30% or lower treaty rate withholding tax discussed above applies; (2) capital gains dividends; or (3) distributions attributable to gain from the sale or exchange by us of U.S. real property interests. Payment of the proceeds of a sale of stock within the United States or conducted through certain U.S. related financial intermediaries is subject to both backup withholding and information reporting unless the beneficial owner certifies under penalties of perjury that he or she is not a U.S. person (and the payor does not have actual knowledge that the beneficial owner is a U.S. person) or otherwise established an exemption. You may obtain a refund of any amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the Internal Revenue Service.

 

     Withholding tax at a rate of 30% will be imposed on certain payments to you or certain foreign financial institutions (including investment funds) and other non-US persons receiving payments on your behalf, including distributions in respect of shares of our stock and gross proceeds from the sale of shares of our stock, if you or such institutions fail to comply with certain due diligence, disclosure and reporting rules, as set forth in recently issued Treasury regulations. Accordingly, the entity through which shares of our stock are held will affect the determination of whether such withholding is required. Withholding currently applies to payments of dividends made after June 30, 2014, and will apply to payments of gross proceeds from a sale of shares of our stock made after December 31, 2018.  Stockholders that are otherwise eligible for an exemption from, or reduction of, U.S. withholding taxes with respect to such dividends and proceeds will be required to seek a refund from the Internal Revenue Service to obtain the benefit of such exemption or reduction.  Additional requirements and conditions may be imposed pursuant to an intergovernmental agreement, if and when entered into, between the United States and such institution’s home jurisdiction. We will not pay any additional amounts to any stockholders in respect of any amounts withheld. You are encouraged to consult with your tax advisor regarding U.S. withholding taxes and the application of the recently issued Treasury regulations in light of your particular circumstances.

 

U.S. Federal Income Taxation of Holders of Depositary Shares

 

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Owners of our depositary shares will be treated as if you were owners of the series of preferred stock represented by the depositary shares. Thus, you will be required to take into account the income and deductions to which you would be entitled if you were a holder of the underlying series of preferred stock.

 

Conversion or Exchange of Shares for Preferred Stock.  No gain or loss will be recognized upon the withdrawal of preferred stock in exchange for depositary shares and the tax basis of each share of preferred stock will, upon exchange, be the same as the aggregate tax basis of the depositary shares exchanged. If you held your depositary shares as a capital asset at the time of the exchange for shares of preferred stock, the holding period for your shares of preferred stock will include the period during which you owned the depositary shares.

 

U.S. Federal Income and Estate Taxation of Holders of Our Debt Securities

 

The following is a general summary of the United States federal income tax consequences and, in the case that you are a holder that is a non-U.S. holder, as defined below, the United States federal estate tax consequences, of purchasing, owning and disposing of debt securities periodically offered under one or more indentures (the “notes”). This summary assumes that you hold the notes as capital assets. This summary applies to you only if you are the initial holder of the notes and you acquire the notes for a price equal to the issue price of the notes. The issue price of the notes is the first price at which a substantial amount of the notes is sold other than to bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers. In addition, this summary does not consider any foreign, state, local or other tax laws that may be applicable to us or a purchaser of the notes.

 

U.S. Holders

 

The following summary applies to you only if you are a U.S. holder, as defined below.

 

Definition of a U.S. Holder.  A “U.S. holder” is a beneficial owner of a note or notes that is for United States federal income tax purposes:

•     a citizen or resident of the United States;

•     a corporation, partnership or other entity classified as a corporation or partnership for these purposes, created or organized in or under the laws of the United States or of any political subdivision of the United States, including any state;

•     an estate, the income of which is subject to United States federal income taxation regardless of its source; or

•     a trust, if, in general, a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons, within the meaning of the Internal Revenue Code, has the authority to control all of the trust’s substantial decisions.

 

Payments of Interest.  Stated interest on the notes generally will be taxed as ordinary interest income from domestic sources at the time it is paid or accrues in accordance with your method of accounting for tax purposes.

 

Sale, Exchange or Other Disposition of Notes.  The adjusted tax basis in your note acquired at a premium will generally be your cost. You generally will recognize taxable gain or loss when you sell or otherwise dispose of your notes equal to the difference, if any, between:

•     the amount realized on the sale or other disposition, less any amount attributable to any accrued interest, which will be taxable in the manner described under “— Payments of Interest” above; and

•     your adjusted tax basis in the notes.

 

Your gain or loss generally will be capital gain or loss. This capital gain or loss will be long-term capital gain or loss if at the time of the sale or other disposition you have held the notes for more than one year. Subject to limited exceptions, your capital losses cannot be used to offset your ordinary income (except in the case of individuals, who may offset up to $3,000 of ordinary income each year).

 

Backup Withholding and Information Reporting.  In general, “backup withholding” may apply to any payments made to you of principal and interest on your note, and to payment of the proceeds of a sale or other disposition of your note before maturity, if you are a non-corporate U.S. holder and: (1) fail to provide a correct taxpayer identification number, which if you are an individual, is ordinarily your social security number; (2) furnish an incorrect taxpayer identification number; (3) are notified by the Internal Revenue Service that you have failed to properly report payments of interest or dividends; or (4) fail to certify, under penalties of perjury, that you have furnished a correct taxpayer identification number and that the Internal Revenue Service has not notified you that you are subject to backup withholding.

 

The amount of any reportable payments, including interest, made to you (unless you are an exempt recipient) and the amount of tax withheld, if any, with respect to such payments will be reported to you and to the Internal Revenue Service for each calendar year.

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You should consult your tax advisor regarding your qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, if applicable. The backup withholding tax is not an additional tax and will be credited against your U.S. federal income tax liability, provided that correct information is provided to the Internal Revenue Service.

 

Non-U.S. Holders

 

The following summary applies to you if you are a beneficial owner of a note and are not a U.S. holder, as defined above (a “non-U.S. holder”).

 

Special rules may apply to certain non-U.S. holders such as “controlled foreign corporations,” “passive foreign investment companies” and “foreign personal holding companies.” Such entities are encouraged to consult their tax advisors to determine the United States federal, state, local and other tax consequences that may be relevant to them.

 

U.S. Federal Withholding Tax.  Subject to the discussion below, U.S. federal withholding tax will not apply to payments by us or our paying agent, in its capacity as such, of principal and interest on your notes under the “portfolio interest” exception of the Internal Revenue Code, provided that:

•     you do not, directly or indirectly, actually or constructively, own 10% or more of the total combined voting power of all classes of our stock entitled to vote;

•     you are not (1) a controlled foreign corporation for U.S. federal income tax purposes that is related, directly or indirectly, to us through sufficient stock ownership, as provided in the Internal Revenue Code, or (2) a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue Code;

•     such interest is not effectively connected with your conduct of a U.S. trade or business; and

•     you provide a signed written statement, under penalties of perjury, which can reliably be related to you, certifying that you are not a U.S. person within the meaning of the Internal Revenue Code and providing your name and address to:

•     us or our paying agent; or

•          a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business and holds your notes on your behalf and that certifies to us or our paying agent under penalties of perjury that it, or the bank or financial institution between it and you, has received from you your signed, written statement and provides us or our paying agent with a copy of such statement.

 

Treasury regulations provide that:

•     if you are a foreign partnership, the certification requirement will generally apply to your partners, and you will be required to provide certain information;

•     if you are a foreign trust, the certification requirement will generally be applied to you or your beneficial owners depending on whether you are a “foreign complex trust,” “foreign simple trust,” or “foreign grantor trust” as defined in the Treasury regulations; and

•     look-through rules will apply for tiered partnerships, foreign simple trusts and foreign grantor trusts.

 

If you are a foreign partnership or a foreign trust, you should consult your own tax advisor regarding your status under these Treasury regulations and the certification requirements applicable to you.

 

If you cannot satisfy the portfolio interest requirements described above, payments of interest will be subject to the 30% United States withholding tax, unless you provide us with a properly executed (1) Internal Revenue Service Form W-8BEN claiming an exemption from or reduction in withholding under the benefit of an applicable treaty or (2) Internal Revenue Service Form W-8ECI stating that interest paid on the note is not subject to withholding tax because it is effectively connected with your conduct of a trade or business in the United States. Alternative documentation may be applicable in certain circumstances.

 

If you are engaged in a trade or business in the United States and interest on a note is effectively connected with the conduct of that trade or business, you will be required to pay United States federal income tax on that interest on a net income basis (although you will be exempt from the 30% withholding tax provided the certification requirement described above is met) in the same manner as if you were a U.S. person, except as otherwise provided by an applicable tax treaty. If you are a foreign corporation, you may be required to pay a branch profits tax on the earnings and profits that are effectively connected to the conduct of your trade or business in the United States.

 

     Withholding tax at a rate of 30% will be imposed on payments of interest (including original issue discount) and gross proceeds of sale in respect of debt instruments to you or certain foreign financial institutions (including investment funds) and other non-US persons receiving payments on your behalf, if you or such institutions fail to comply with certain due diligence, disclosure and reporting rules, as set forth in recently issued Treasury regulations. However, the Treasury regulations generally exempt from such withholding requirement obligations, such as debt instruments, issued before July 1, 2014, provided that any material modification of such an obligation made after such date will result in such obligation being considered newly issued as of the effective date of such

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modification. These withholding rules are generally effective with respect to payments of interest made after June 30, 2014, and with respect to proceeds of sales received after December 31, 2018. We will not pay any additional amounts to any holders or our debt instruments in respect of any amounts withheld. You are encouraged to consult with your tax advisor regarding U.S. withholding taxes and the application of the recently issued Treasury regulations in light of your particular circumstances.

 

Sale, Exchange or other Disposition of Notes.  You generally will not have to pay U.S. federal income tax on any gain or income realized from the sale, redemption, retirement at maturity or other disposition of your notes, unless:

•     in the case of gain, you are an individual who is present in the United States for 183 days or more during the taxable year of the sale or other disposition of your notes, and specific other conditions are met;

•     you are subject to tax provisions applicable to certain United States expatriates; or

•     the gain is effectively connected with your conduct of a U.S. trade or business.

 

If you are engaged in a trade or business in the United States, and gain with respect to your notes is effectively connected with the conduct of that trade or business, you generally will be subject to U.S. income tax on a net basis on the gain. In addition, if you are a foreign corporation, you may be subject to a branch profits tax on your effectively connected earnings and profits for the taxable year, as adjusted for certain items.

 

U.S. Federal Estate Tax.  If you are an individual and are not a U.S. citizen or a resident of the United States, as specially defined for U.S. federal estate tax purposes, at the time of your death, your notes will generally not be subject to the U.S. federal estate tax, unless, at the time of your death (1) you owned actually or constructively 10% or more of the total combined voting power of all our classes of stock entitled to vote, or (2) interest on the notes is effectively connected with your conduct of a U.S. trade or business.

 

Backup Withholding and Information Reporting.  Backup withholding will not apply to payments of principal or interest made by us or our paying agent, in its capacity as such, to you if you have provided the required certification that you are a non-U.S. holder as described in “— U.S. Federal Withholding Tax” above, and provided that neither we nor our paying agent have actual knowledge that you are a U.S. holder, as described in “— U.S. Holders” above. We or our paying agent may, however, report payments of interest on the notes.

 

The gross proceeds from the disposition of your notes may be subject to information reporting and backup withholding tax. If you sell your notes outside the United States through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then the U.S. backup withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if you sell your notes through a non-U.S. office of a broker that:

•     is a U.S. person, as defined in the Internal Revenue Code;

•     derives 50% or more of its gross income in specific periods from the conduct of a trade or business in the United States;

•     is a “controlled foreign corporation” for U.S. federal income tax purposes; or

•     is a foreign partnership, if at any time during its tax year, one or more of its partners are U.S. persons who in the aggregate hold more than 50% of the income or capital interests in the partnership, or the foreign partnership is engaged in a U.S. trade or business, unless the broker has documentary evidence in its files that you are a non-U.S. person and certain other conditions are met or you otherwise establish an exemption. If you receive payments of the proceeds of a sale of your notes to or through a U.S. office of a broker, the payment is subject to both U.S. backup withholding and information reporting unless you provide a Form W-8BEN certifying that you are a non-U.S. person or you otherwise establish an exemption.

 

You should consult your own tax advisor regarding application of backup withholding in your particular circumstance and the availability of and procedure for obtaining an exemption from backup withholding. Any amounts withheld under the backup withholding rules from a payment to you will be allowed as a refund or credit against your U.S. federal income tax liability, provided the required information is furnished to the Internal Revenue Service.

 

U.S. Federal Income and Estate Taxation of Holders of Our Warrants

 

Exercise of Warrants.  You will not generally recognize gain or loss upon the exercise of a warrant. Your basis in the debt securities, preferred stock, depositary shares or common stock, as the case may be, received upon the exercise of the warrant will be equal to the sum of your adjusted tax basis in the warrant and the exercise price paid. Your holding period in the debt securities, preferred stock, depositary shares or common stock, as the case may be, received upon the exercise of the warrant will not include the period during which the warrant was held by you.

 

Expiration of Warrants.  Upon the expiration of a warrant, you will recognize a capital loss in an amount equal to your adjusted tax basis in the warrant.

 

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Sale or Exchange of Warrants.  Upon the sale or exchange of a warrant to a person other than us, you will recognize gain or loss in an amount equal to the difference between the amount realized on the sale or exchange and your adjusted tax basis in the warrant. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the warrant was held for more than one year. Upon the sale of the warrant to us, the Internal Revenue Service may argue that you should recognize ordinary income on the sale. You are advised to consult your own tax advisors as to the consequences of a sale of a warrant to us.

 

Potential Legislation or Other Actions Affecting Tax Consequences

 

Current and prospective securities holders should recognize that the present federal income tax treatment of an investment in us may be modified by legislative, judicial or administrative action at any time and that any such action may affect investments and commitments previously made. The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the Treasury Department, resulting in revisions of regulations and revised interpretations of established concepts as well as statutory changes. Revisions in federal tax laws and interpretations of these laws could adversely affect the tax consequences of an investment in us.

 

State, Local and Foreign Taxes

 

We, and holders of our debt and equity securities, may be subject to state, local or foreign taxation in various jurisdictions, including those in which we or they transact business, own property or reside. It should be noted that we own properties located in a number of state, local and foreign jurisdictions, and may be required to file tax returns in some or all of those jurisdictions. The state, local or foreign tax treatment of us and holders of our debt and equity securities may not conform to the U.S. federal income tax consequences discussed above. Consequently, you are urged to consult your advisor regarding the application and effect of state, local and foreign tax laws with respect to any investment in our securities.

 

Changes in applicable tax regulations could negatively affect our financial results

 

The Company is subject to taxation in the U.S. and numerous foreign jurisdictions. Because the U.S. maintains a worldwide corporate tax system, the foreign and U.S. tax systems are somewhat interdependent. Longstanding international tax norms that determine each country’s jurisdiction to tax cross-border international trade are evolving, such as the Base Erosion and Profit Shifting project (“BEPS") currently being undertaken by the G8, G20, and Organization for Economic Cooperation and Development.  Tax changes pursuant to BEPS could reduce the ability of our foreign subsidiaries to deduct for foreign tax purposes the interest they pay on loans from the Company, thereby increasing the foreign tax liability of the subsidiaries; it is also possible that foreign countries could increase their withholding taxes on dividends and interest. Given the unpredictability of these possible changes and their potential interdependency, it is very difficult to assess the overall effect of such potential tax changes on our earnings and cash flow, but such changes could adversely impact our financial results.

 

Internet Access to Our SEC Filings

 

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as well as our proxy statements and other materials that are filed with, or furnished to, the Securities and Exchange Commission are made available, free of charge, on the Internet at www.welltower.com, as soon as reasonably practicable after they are filed with, or furnished to, the Securities and Exchange Commission. We routinely post important information on our website at www.welltower.com in the “Investors” section, including corporate and investor presentations and financial information.  We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading “Investors.”  Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls and filings with the Securities and Exchange Commission.  The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.

 

Cautionary Statement Regarding Forward-Looking Statements

 

     This Annual Report on Form 10-K and the documents incorporated by reference contain statements that constitute “forward-looking statements” as that term is defined in the federal securities laws. When we use words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, we are making forward-looking statements. In particular, these forward-looking statements include, but are not limited to, those relating to our opportunities to acquire, develop or sell properties; our ability to close our anticipated acquisitions, investments or dispositions on currently anticipated terms, or within currently anticipated timeframes; the expected performance of our operators/tenants and properties; our expected occupancy rates; our ability to declare and to make distributions to stockholders; our investment and financing opportunities and plans; our continued qualification as a real estate investment trust (“REIT”); and our ability to access capital markets or other sources of funds.

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     Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause our actual results to differ materially from our expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to:

•          the status of the economy;

•          the status of capital markets, including availability and cost of capital;

•          issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance;

•          changes in financing terms;

•          competition within the health care and seniors housing industries;

•          negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans;

•          our ability to transition or sell properties with profitable results;

•          the failure to make new investments or acquisitions as and when anticipated;

•          natural disasters and other acts of God affecting our properties;

•          our ability to re-lease space at similar rates as vacancies occur;

•          our ability to timely reinvest sale proceeds at similar rates to assets sold;

•          operator/tenant or joint venture partner bankruptcies or insolvencies;

•          the cooperation of joint venture partners;

•          government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements;

•          liability or contract claims by or against operators/tenants;

•          unanticipated difficulties and/or expenditures relating to future investments or acquisitions;

•          environmental laws affecting our properties;

•          changes in rules or practices governing our financial reporting;

•          the movement of U.S. and foreign currency exchange rates;

•          our ability to maintain our qualification as a REIT;

•          key management personnel recruitment and retention; and

•          the risks described under “Item 1A — Risk Factors.”

 

     We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

 

Item 1A. Risk Factors

 

     This section discusses the most significant factors that affect our business, operations and financial condition. It does not describe all risks and uncertainties applicable to us, our industry or ownership of our securities. If any of the following risks, as well as other risks and uncertainties that are not yet identified or that we currently think are not material, actually occur, we could be materially adversely affected. In that event, the value of our securities could decline. We group these risk factors into three categories:

•          Risks arising from our business;

•          Risks arising from our capital structure; and

•          Risks arising from our status as a REIT.

 

Risks Arising from Our Business

 

Our investments in and acquisitions of health care and seniors housing properties may be unsuccessful or fail to meet our expectations

 

     We are exposed to the risk that some of our acquisitions may not prove to be successful. We could encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent liabilities, and acquired properties might require significant management attention that would otherwise be devoted to our ongoing business. If we agree to provide construction funding to an operator/tenant and the project is not completed, we may need to take steps to ensure completion of the project. Such expenditures may negatively affect our results of operations. Furthermore, there can be no assurance that our anticipated acquisitions and investments, the completion of which is subject to various conditions, will be consummated in accordance with anticipated timing, on anticipated terms, or at all.  We also may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and this could have an adverse effect on our results of operations and financial condition.

 

Our investments in joint ventures could be adversely affected by our lack of exclusive control over these investments, our partners’ insolvency or failure to meet their obligations and disputes between us and our partners

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     We have entered into, and may continue in the future to enter into, partnerships or joint ventures with other persons or entities. Joint venture investments involve risks that may not be present with other methods of ownership, including the possibility that our partner might become insolvent, refuse to make capital contributions when due or otherwise fail to meet its obligations, which may result in certain liabilities to us for guarantees and other commitments; that our partner might at any time have economic or other business interests or goals that are or become inconsistent with our interests or goals; that we could become engaged in a dispute with our partner, which could require us to expend additional resources to resolve such dispute and could have an adverse impact on the operations and profitability of the joint venture; and that our partner may be in a position to take action or withhold consent contrary to our instructions or requests. In addition, our ability to transfer our interest in a joint venture to a third party may be restricted. In some instances, we and/or our partner may have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have initiated such a transaction. Our ability to acquire our partner’s interest may be limited if we do not have sufficient cash, available borrowing capacity or other capital resources. In such event, we may be forced to sell our interest in the joint venture when we would otherwise prefer to retain it. Joint ventures may require us to share decision-making authority with our partners, which could limit our ability to control the properties in the joint ventures. Even when we have a controlling interest, certain major decisions may require partner approval, such as the sale, acquisition or financing of a property.

 

We are exposed to operational risks with respect to our seniors housing operating properties that could adversely affect our revenue and operations

 

     We are exposed to various operational risks with respect to our seniors housing operating properties that may increase our costs or adversely affect our ability to generate revenues. These risks include fluctuations in occupancy, Medicare and Medicaid reimbursement, if applicable, and private pay rates; economic conditions; competition; federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards; the availability and increases in cost of general and professional liability insurance coverage; state regulation and rights of residents related to entrance fees; and the availability and increases in the cost of labor (as a result of unionization or otherwise). Any one or a combination of these factors may adversely affect our revenue and operations.

 

Decreases in our operators’ revenues or increases in our operators’ expenses could affect our operators’ ability to make payments to us

 

     Our operators’ revenues are primarily driven by occupancy, private pay rates, and Medicare and Medicaid reimbursement, if applicable. Expenses for these facilities are primarily driven by the costs of labor, food, utilities, taxes, insurance and rent or debt service. Revenues from government reimbursement have, and may continue to, come under pressure due to reimbursement cuts and state budget shortfalls. Operating costs continue to increase for our operators. To the extent that any decrease in revenues and/or any increase in operating expenses result in a property not generating enough cash to make payments to us, the credit of our operator and the value of other collateral would have to be relied upon. To the extent the value of such property is reduced, we may need to record an impairment for such asset. Furthermore, if we determine to dispose of an underperforming property, such sale may result in a loss. Any such impairment or loss on sale would negatively affect our financial results.

 

Increased competition may affect our operators’ ability to meet their obligations to us  

 

     The operators of our properties compete on a local and regional basis with operators of properties and other health care providers that provide comparable services. We cannot be certain that the operators of all of our facilities will be able to achieve and maintain occupancy and rate levels that will enable them to meet all of their obligations to us. Our operators are expected to encounter increased competition in the future that could limit their ability to attract residents or expand their businesses.

 

A severe cold and flu season, epidemics or any other widespread illnesses could adversely affect the occupancy of our seniors housing operating and triple-net properties

 

     Our and our operators’ revenues are dependent on occupancy.  It is impossible to predict the severity of the cold and flu season or the occurrence of epidemics or any other widespread illnesses.  The occupancy of our seniors housing operating and triple-net properties could significantly decrease in the event of a severe cold and flu season, an epidemic or any other widespread illness.  Such a decrease could affect the operating income of our seniors housing operating properties and the ability of our triple-net operators to make payments to us.

 

The insolvency or bankruptcy of our obligors may adversely affect our business, results of operations and financial condition

 

     We are exposed to the risk that our obligors may not be able to meet the rent, principal and interest or other payments due us, which may result in an obligor bankruptcy or insolvency, or that an obligor might become subject to bankruptcy or insolvency

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proceedings for other reasons. Although our operating lease agreements provide us with the right to evict a tenant, demand immediate payment of rent and exercise other remedies, and our loans provide us with the right to terminate any funding obligation, demand immediate repayment of principal and unpaid interest, foreclose on the collateral and exercise other remedies, the bankruptcy and insolvency laws afford certain rights to a party that has filed for bankruptcy or reorganization. An obligor in bankruptcy or subject to insolvency proceedings may be able to limit or delay our ability to collect unpaid rent in the case of a lease or to receive unpaid principal and interest in the case of a loan, and to exercise other rights and remedies. We may be required to fund certain expenses (e.g., real estate taxes and maintenance) to preserve the value of an investment property, avoid the imposition of liens on a property and/or transition a property to a new tenant. In some instances, we have terminated our lease with a tenant and relet the property to another tenant. In some of those situations, we have provided working capital loans to and limited indemnification of the new obligor. If we cannot transition a leased property to a new tenant, we may take possession of that property, which may expose us to certain successor liabilities. Should such events occur, our revenue and operating cash flow may be adversely affected.

 

We may not be able to timely reinvest our sale proceeds on terms acceptable to us

 

     From time to time, we will have cash available from (1) the proceeds of sales of our securities, (2) principal payments on our loans receivable and (3) the sale of properties, including non-elective dispositions, under the terms of master leases or similar financial support arrangements. In order to maintain current revenues and continue generating attractive returns, we expect to re-invest these proceeds in a timely manner. We compete for real estate investments with a broad variety of potential investors. This competition for attractive investments may negatively affect our ability to make timely investments on terms acceptable to us.

 

Failure to properly manage our rapid growth could distract our management or increase our expenses

 

     We have experienced rapid growth and development in a relatively short period of time and expect to continue this rapid growth in the future. This growth has resulted in increased levels of responsibility for our management. Future property acquisitions could place significant additional demands on, and require us to expand, our management, resources and personnel. Our failure to manage any such rapid growth effectively could harm our business and, in particular, our financial condition, results of operations and cash flows, which could negatively affect our ability to make distributions to stockholders. Our growth could also increase our capital requirements, which may require us to issue potentially dilutive equity securities and incur additional debt.

 

We depend on Genesis Healthcare, LLC (“Genesis”) and Brookdale Senior Living for a significant portion of our revenues and any inability or unwillingness by Genesis and Brookdale Senior Living to satisfy their obligations under their agreements with us could adversely affect us

 

     The properties we lease to Genesis and Brookdale Senior Living account for a significant portion of our revenues, and because our leases with Genesis and Brookdale Senior Living are triple-net leases, we also depend on Genesis and Brookdale Senior Living to pay all insurance, taxes, utilities and maintenance and repair expenses in connection with the leased properties. We cannot assure you that Genesis and Brookdale Senior Living will have sufficient assets, income and access to financing to enable them to make rental payments to us or to otherwise satisfy their respective obligations under our leases, and any inability or unwillingness by Genesis or Brookdale Senior Living to do so could have an adverse effect on our business, results of operations and financial condition. Genesis and Brookdale Senior Living have also agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their respective businesses, and we cannot assure you that Genesis and Brookdale Senior Living will have sufficient assets, income, access to financing and insurance coverage to enable them to satisfy their respective indemnification obligations.  Genesis and Brookdale Senior Living’s failure to effectively conduct their operations or to maintain and improve our properties could adversely affect their business reputations and their ability to attract and retain patients and residents in our properties, which, in turn, could adversely affect our business, results of operations and financial condition.

 

The properties managed by Sunrise Senior Living, LLC account for a significant portion of our revenues and operating income and any adverse developments in its business or financial condition could adversely affect us

 

     Sunrise Senior Living, LLC manages our entire Sunrise property portfolio, which as of December 31, 2016, consisted of 157 seniors housing properties.  These properties account for a significant portion of our revenues, and we rely on Sunrise Senior Living, LLC to manage these properties efficiently and effectively.  We also rely on Sunrise Senior Living, LLC to set appropriate resident fees, to provide accurate property-level financial results for our properties in a timely manner and to otherwise operate them in compliance with the terms of our management agreements and all applicable laws and regulations.  Any adverse developments in Sunrise Senior Living, LLC’s business or financial condition could impair its ability to manage our properties efficiently and effectively, which could adversely affect our business, results of operations, and financial condition.  Also, if Sunrise Senior Living, LLC experiences any significant financial, legal, accounting or regulatory difficulties, such difficulties could result in, among other things, acceleration of its indebtedness, impairment of its continued access to capital or the commencement of insolvency proceedings by or against it under the U.S. Bankruptcy Code, which, in turn, could adversely affect our business, results of operations and financial condition.

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Ownership of property outside the United States may subject us to different or greater risks than those associated with our domestic operations

 

     We have operations in Canada and the United Kingdom. International development, ownership, and operating activities involve risks that are different from those we face with respect to our domestic properties and operations. These risks include, but are not limited to, any international currency gain recognized with respect to changes in exchange rates may not qualify under the 75% gross income test or the 95% gross income test that we must satisfy annually in order to qualify and maintain our status as a REIT; challenges with respect to the repatriation of foreign earnings and cash; changes in foreign political, regulatory, and economic conditions, including regionally, nationally, and locally, including, but not limited to, the United Kingdom’s June 2016 vote to exit the European Union (commonly known as “Brexit”); challenges in managing international operations; challenges of complying with a wide variety of foreign laws and regulations, including those relating to real estate, corporate governance, operations, taxes, employment and other civil and criminal legal proceedings; foreign ownership restrictions with respect to operations in countries; differences in lending practices and the willingness of domestic or foreign lenders to provide financing; regional or country-specific business cycles and political and economic instability; and failure to comply with applicable laws and regulations in the United States that affect foreign operations, including, but not limited to, the U.S. Foreign Corrupt Practices Act. If we are unable to successfully manage the risks associated with international expansion and operations, our results of operations and financial condition may be adversely affected.

 

We do not know if our tenants will renew their existing leases, and if they do not, we may be unable to lease the properties on as favorable terms, or at all

 

     We cannot predict whether our tenants will renew existing leases at the end of their lease terms, which expire at various times. If these leases are not renewed, we would be required to find other tenants to occupy those properties or sell them. There can be no assurance that we would be able to identify suitable replacement tenants or enter into leases with new tenants on terms as favorable to us as the current leases or that we would be able to lease those properties at all.

 

Our operators and managers may not have the necessary insurance coverage to insure adequately against losses

 

     We maintain or require our operators and managers to maintain comprehensive insurance coverage on our properties and their operations with terms, conditions, limits and deductibles that we believe are customary for similarly-situated companies in our industry, and we continually review our insurance programs and requirements.  That said, we cannot assure you that we or our operators or managers will continue to be able to maintain adequate levels of insurance and required coverages, which could adversely affect us in the event of a significant uninsured loss.  Also, in recent years, long-term/post-acute care and seniors housing operators and managers have experienced substantial increases in both the number and size of patient care liability claims. As a result, general and professional liability costs have increased in some markets. General and professional liability insurance coverage may be restricted or very costly, which may adversely affect the property operators’ and managers’ future operations, cash flows and financial condition, and may have a material adverse effect on the property operators’ and managers’ ability to meet their obligations to us. 

 

Our ownership of properties through ground leases exposes us to the loss of such properties upon breach or termination of the ground leases

 

     We have acquired an interest in certain of our properties by acquiring a leasehold interest in the property on which the building is located, and we may acquire additional properties in the future through the purchase of interests in ground leases. As the lessee under a ground lease, we are exposed to the possibility of losing the property upon termination of the ground lease or an earlier breach of the ground lease by us.

 

The requirements of, or changes to, governmental reimbursement programs, such as Medicare or Medicaid, could have a material adverse effect on our obligors’ liquidity, financial condition and results of operations, which could adversely affect our obligors’ ability to meet their obligations to us

 

     Some of our obligors’ businesses are affected by government reimbursement. To the extent that an operator/tenant receives a significant portion of its revenues from government payors, primarily Medicare and Medicaid, such revenues may be subject to statutory and regulatory changes, retroactive rate adjustments, recovery of program overpayments or set-offs, court decisions, administrative rulings, policy interpretations, payment or other delays by fiscal intermediaries or carriers, government funding restrictions (at a program level or with respect to specific facilities) and interruption or delays in payments due to any ongoing government investigations and audits at such property. In recent years, government payors have frozen or reduced payments to health care providers due to budgetary pressures. Health care reimbursement will likely continue to be of paramount importance to federal and state authorities. We cannot make any assessment as to the ultimate timing or effect any future legislative reforms may have on the financial condition of our obligors and properties. There can be no assurance that adequate reimbursement levels will be available

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for services provided by any property operator, whether the property receives reimbursement from Medicare, Medicaid or private payors. Significant limits on the scope of services reimbursed and on reimbursement rates and fees could have a material adverse effect on an obligor’s liquidity, financial condition and results of operations, which could adversely affect the ability of an obligor to meet its obligations to us.

 

     The Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Reform Laws”), provides those states that expand their Medicaid coverage to otherwise eligible state residents with incomes at or below 138% of the federal poverty level with an increased federal medical assistance percentage, effective January 1, 2014, when certain conditions are met. Given that the federal government substantially funds the Medicaid expansion, it is unclear how many states will ultimately pursue this option, although, as of early February 2017, more than half of the states have expanded Medicaid coverage. The participation by states in the Medicaid expansion could have the dual effect of increasing our tenants’ revenues, through new patients, but further straining state budgets and their ability to pay our tenants. We expect that the new Presidential Administration and U.S. Congress will seek to modify, repeal, or otherwise invalidate all, or certain provisions of, the Health Reform Laws, including Medicaid expansion. Since taking office, President Trump has continued to support the repeal of all or portions of the Health Reform Laws.  The House and Senate have recently passed a budget resolution that authorizes congressional committees to draft legislation to repeal all or portions of the Health Reform Laws and permits such legislation to pass with a majority vote in the Senate.  President Trump has also recently issued an executive order in which he stated that it is his Administration’s policy to seek the prompt repeal of the Health Reform Laws and directed executive departments and federal agencies to waive, defer, grant exemptions from, or delay the implementation of the provisions of Health Reform Laws to the maximum extent permitted by law.  There is still uncertainty with respect to the impact President Trump’s Administration and the U.S. Congress may have, if any, and any changes will likely take time to unfold, and could have an impact on coverage and reimbursement for health care items and services covered by plans that were authorized by the Health Reform Laws.  We cannot predict whether the existing Health Reform Laws, or future health care reform legislation or regulatory changes, will have a material impact on our operators’ or tenants’ property or business.  If the operations, cash flows or financial condition of our operators and tenants are materially adversely impacted by the Health Reform Laws or future legislation, our revenue and operations may be adversely affected as well.  See “Item 1 — Business — Certain Government Regulations — United States — Reimbursement” above.                                                                                                                                                        

 

     More generally, and because of the dynamic nature of the legislative and regulatory environment for health care products and services, and in light of existing federal deficit and budgetary concerns, we cannot predict the impact that broad-based, far-reaching legislative or regulatory changes could have on the U.S. economy, our business or that of our operators and tenants.

 

Our operators’ or tenants’ failure to comply with federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards could adversely affect such operators’ or tenants’ operations, which could adversely affect our operators’ and tenants’ ability to meet their obligations to us

 

     Our operators and tenants generally are subject to varying levels of federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards. Our operators’ or tenants’ failure to comply with any of these laws, regulations, or standards could result in loss of accreditation, denial of reimbursement, imposition of fines, suspension, decertification or exclusion from federal and state health care programs, loss of license or closure of the facility. Such actions may have an effect on our operators’ or tenants’ ability to make lease payments to us and, therefore, adversely impact us. See “Item 1 — Business — Certain Government Regulations — United States — Fraud & Abuse Enforcement” above.

 

     Many of our properties may require a license, registration, and/or certificate of need (“CON”) to operate. Failure to obtain a license, registration, or CON, or loss of a required license, registration, or CON would prevent a facility from operating in the manner intended by the operators or tenants. These events could materially adversely affect our operators’ or tenants’ ability to make rent payments to us. State and local laws also may regulate the expansion, including the addition of new beds or services or acquisition of medical equipment, and the construction or renovation of health care facilities, by requiring a CON or other similar approval from a state agency. See “Item 1 — Business — Certain Government Regulations — United States — Licensing and Certification” above.

 

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties

 

     Real estate investments are relatively illiquid. Our ability to quickly sell or exchange any of our properties in response to changes in economic and other conditions will be limited. No assurances can be given that we will recognize full value for any property that we are required to sell for liquidity reasons. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations. In addition, we are exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health care industries. A downturn in the real estate industry could adversely affect the value of our properties and our ability to sell properties for a price or on terms acceptable to us.

 

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Unfavorable resolution of pending and future litigation matters and disputes could have a material adverse effect on our financial condition

 

     From time to time, we may be directly involved in a number of legal proceedings, lawsuits and other claims. We may also be named as defendants in lawsuits allegedly arising out of our actions or the actions of our operators/tenants or managers in which such operators/tenants or managers have agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their respective businesses. An unfavorable resolution of pending or future litigation may have a material adverse effect on our business, results of operations and financial condition. Regardless of its outcome, litigation may result in substantial costs and expenses and significantly divert the attention of management. There can be no assurance that we will be able to prevail in, or achieve a favorable settlement of, pending or future litigation. In addition, pending litigation or future litigation, government proceedings or environmental matters could lead to increased costs or interruption of our normal business operations.

 

Development, redevelopment and construction risks could affect our profitability

 

     At any given time, we may be in the process of constructing one or more new facilities that ultimately will require a CON and license before they can be utilized by the operator for their intended use. The operator also may need to obtain Medicare and Medicaid certification and enter into Medicare and Medicaid provider agreements and/or third party payor contracts. In the event that the operator is unable to obtain the necessary CON, licensure, certification, provider agreements or contracts after the completion of construction, there is a risk that we will not be able to earn any revenues on the facility until either the initial operator obtains a license or certification to operate the new facility and the necessary provider agreements or contracts or we find and contract with a new operator that is able to obtain a license to operate the facility for its intended use and the necessary provider agreements or contracts.

 

     In connection with our renovation, redevelopment, development and related construction activities, we may be unable to obtain, or suffer delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations. These factors could result in increased costs or our abandonment of these projects. In addition, we may not be able to obtain financing on favorable terms, which may render us unable to proceed with our development activities, and we may not be able to complete construction and lease-up of a property on schedule, which could result in increased debt service expense or construction costs. Additionally, the time frame required for development, construction and lease-up of these properties means that we may have to wait years for significant cash returns. Because we are required to make cash distributions to our stockholders, if the cash flow from operations or refinancing is not sufficient, we may be forced to borrow additional money to fund such distributions. Newly developed and acquired properties may not produce the cash flow that we expect, which could adversely affect our overall financial performance.

 

     In deciding whether to acquire or develop a particular property, we make assumptions regarding the expected future performance of that property. In particular, we estimate the return on our investment based on expected occupancy, rental rates and capital costs. If our financial projections with respect to a new property are inaccurate as a result of increases in capital costs or other factors, the property may fail to perform as we expected in analyzing our investment. Our estimate of the costs of repositioning or redeveloping an acquired property may prove to be inaccurate, which may result in our failure to meet our profitability goals. Additionally, we may acquire new properties that are not fully leased, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with that property.

 

We may experience losses caused by severe weather conditions or natural disasters, which could result in an increase of our or our tenants’ cost of insurance, a decrease in our anticipated revenues or a significant loss of the capital we have invested in a property

 

     We maintain or require our tenants to maintain comprehensive insurance coverage on our properties with terms, conditions, limits and deductibles that we believe are appropriate given the relative risk and costs of such coverage, and we continually review our insurance programs and requirements. However, a large number of our properties are located in areas particularly susceptible to revenue loss, cost increase or damage caused by severe weather conditions or natural disasters such as hurricanes, earthquakes, tornadoes and floods. We believe, given current industry practice and analysis prepared by outside consultants, that our and our tenants’ insurance coverage is appropriate to cover reasonably anticipated losses that may be caused by hurricanes, earthquakes, tornadoes, floods and other severe weather conditions and natural disasters. Nevertheless, we are always subject to the risk that such insurance will not fully cover all losses and, depending on the severity of the event and the impact on our properties, such insurance may not cover a significant portion of the losses. These losses may lead to an increase of our and our tenants’ cost of insurance, a decrease in our anticipated revenues from an affected property and a loss of all or a portion of the capital we have invested in an affected property.  In addition, we or our tenants may not purchase insurance under certain circumstances if the cost of insurance exceeds, in our or our tenants’ judgment, the value of the coverage relative to the risk of loss.

 

We may incur costs to remediate environmental contamination at our properties, which could have an adverse effect on our or our obligors’ business or financial condition

 

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     Under various federal and state laws, owners or operators of real estate may be required to respond to the presence or release of hazardous substances on the property and may be held liable for property damage, personal injuries or penalties that result from environmental contamination or exposure to hazardous substances. We may become liable to reimburse the government for damages and costs it incurs in connection with the contamination. Generally, such liability attaches to a person based on the person’s relationship to the property. Our tenants or borrowers are primarily responsible for the condition of the property. Moreover, we review environmental site assessments of the properties that we own or encumber prior to taking an interest in them. Those assessments are designed to meet the “all appropriate inquiry” standard, which we believe qualifies us for the innocent purchaser defense if environmental liabilities arise. Based upon such assessments, we do not believe that any of our properties are subject to material environmental contamination. However, environmental liabilities may be present in our properties and we may incur costs to remediate contamination, which could have a material adverse effect on our business or financial condition or the business or financial condition of our obligors.

 

Cybersecurity incidents could disrupt our business and result in the loss of confidential information

 

     Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data, and other electronic security breaches. Such cyber attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. While we employ a number of measures to prevent, detect and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber attack. Cybersecurity incidents could disrupt our business and compromise the confidential information of our employees, operators and tenants.

 

Actual or threatened terrorist attacks could adversely affect the occupancy and the value of our properties

 

     We have significant investments in large metropolitan markets that have been or may be in the future the targets of actual or threatened terrorism attacks, including Boston, Chicago, New York, San Diego, San Francisco, Los Angeles and Washington D.C.  As a result, some of our tenants in these markets may choose to relocate to other markets that may be perceived to be less likely targets of future terrorist activity.  This could result in an overall decrease in the occupancy of our properties.  In addition, terrorist attacks could also result in significant damages to, or loss of, our properties, which could exceed our insurance coverage.

 

Our certificate of incorporation and by-laws contain anti-takeover provisions

 

     Our certificate of incorporation and by-laws contain anti-takeover provisions (restrictions on share ownership and transfer and super majority stockholder approval requirements for business combinations) that could make it more difficult for or even prevent a third party from acquiring us without the approval of our incumbent Board of Directors. Provisions and agreements that inhibit or discourage takeover attempts could reduce the market value of our common stock.

 

Our success depends on key personnel whose continued service is not guaranteed

 

     We are dependent on key personnel. Although we have entered into employment agreements with our executive officers, losing any one of them could, at least temporarily, have an adverse impact on our operations. We believe that losing more than one could have a material adverse impact on our business.

 

Risks Arising from Our Capital Structure

 

We may become more leveraged

 

     Permanent financing for our investments is typically provided through a combination of public offerings of debt and equity securities and the incurrence or assumption of secured debt. The incurrence or assumption of indebtedness may cause us to become more leveraged, which could (1) require us to dedicate a greater portion of our cash flow to the payment of debt service, (2) make us more vulnerable to a downturn in the economy, (3) limit our ability to obtain additional financing, or (4) negatively affect our credit ratings or outlook by one or more of the rating agencies.

 

We are subject to covenants in our debt agreements that may restrict or limit our operations and acquisitions and our failure to comply with the covenants in our debt agreements could have a material adverse impact on our business, results of operations and financial condition

 

     Our debt agreements contain various covenants, restrictions and events of default. Among other things, these provisions require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. Breaches of these covenants could result in defaults under the instruments governing the

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applicable indebtedness, in addition to any other indebtedness cross-defaulted against such instruments. These defaults could have a material adverse impact on our business, results of operations and financial condition.

 

Limitations on our ability to access capital could have an adverse effect on our ability to make future investments or to meet our obligations and commitments

 

     We cannot assure you that we will be able to raise the capital necessary to make future investments or to meet our obligations and commitments as they mature.  Our access to capital depends upon a number of factors over which we have little or no control, including rising interest rates, inflation and other general market conditions; the market’s perception of our growth potential and our current and potential future earnings and cash distributions; the market price of the shares of our capital stock and the credit ratings of our debt securities; the financial stability of our lenders, which might impair their ability to meet their commitments to us or their willingness to make additional loans to us; changes in the credit ratings on U.S. government debt securities; or default or delay in payment by the United States of its obligations. If our access to capital is limited by these factors or other factors, it could negatively impact our ability to acquire properties, repay or refinance our indebtedness, fund operations or make distributions to our stockholders.

 

Downgrades in our credit ratings could have a material adverse impact on our cost and availability of capital

 

     We plan to manage the Company to maintain a capital structure consistent with our current profile, but there can be no assurance that we will be able to maintain our current credit ratings. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

 

Fluctuations in the value of foreign currencies could adversely affect our results of operations and financial position

 

     As we expand our operations internationally, currency exchange rate fluctuations could affect our results of operations and financial position. We expect to generate an increasing portion of our revenue and expenses in such foreign currencies as the Canadian dollar and the British pound. Although we may enter into foreign exchange agreements with financial institutions and/or obtain local currency mortgage debt in order to reduce our exposure to fluctuations in the value of foreign currencies, we cannot assure you that foreign currency fluctuations will not have a material adverse effect on us.

 

Our entry into swap agreements may not effectively reduce our exposure to changes in interest rates or foreign currency exchange rates

 

     We enter into swap agreements from time to time to manage some of our exposure to interest rate and foreign currency exchange rate volatility. These swap agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements. In addition, these arrangements may not be effective in reducing our exposure to changes in interest rates or foreign currency exchange rates. When we use forward-starting interest rate swaps, there is a risk that we will not complete the long-term borrowing against which the swap is intended to hedge. If such events occur, our results of operations may be adversely affected.

 

Risks Arising from Our Status as a REIT

 

We might fail to qualify or remain qualified as a REIT

 

     We intend to operate as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and believe we have and will continue to operate in such a manner. If we lose our status as a REIT, we will face serious income tax consequences that will substantially reduce the funds available for satisfying our obligations and for distribution to our stockholders because:

•          we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates;

•          we could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and

•          unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified.

 

     Since REIT qualification requires us to meet a number of complex requirements, it is possible that we may fail to fulfill them, and if we do, our earnings will be reduced by the amount of U.S. federal and other income taxes owed. A reduction in our earnings would affect the amount we could distribute to our stockholders. If we do not qualify as a REIT, we would not be required to make distributions to stockholders since a non-REIT is not required to pay dividends to stockholders in order to maintain REIT status or avoid an excise tax. See “Item 1 — Business — Taxation — Federal Income Tax Considerations” above for a discussion of the provisions of the Code that apply to us and the effects of failure to qualify as a REIT. In addition, if we fail to qualify as a REIT, all distributions to stockholders would continue to be treated as dividends to the extent of our current and accumulated earnings and

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profits, although corporate stockholders may be eligible for the dividends received deduction, and individual stockholders may be eligible for taxation at the rates generally applicable to long-term capital gains (currently at a maximum rate of 20%) with respect to distributions.

 

     As a result of all these factors, our failure to qualify as a REIT also could impair our ability to implement our business strategy and would adversely affect the value of our common stock. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to remain qualified as a REIT. Although we believe that we qualify as a REIT, we cannot assure you that we will continue to qualify or remain qualified as a REIT for U.S. federal income tax purposes. See “Item 1 — Business — Taxation — Federal Income Tax Considerations” above.

 

Certain subsidiaries might fail to qualify or remain qualified as a REIT

 

     We own interests in a number of entities which have elected to be taxed as REITs for federal income tax purposes, some of which we consolidate for financial reporting purposes but each of which is treated as a separate REIT for federal income tax purposes (each a “Subsidiary REIT”).  To qualify as a REIT, each Subsidiary REIT must independently satisfy all of the REIT qualification requirements under the Code, together with all other rules applicable to REITs.  Provided that each Subsidiary REIT qualifies as a REIT, our interests in the Subsidiary REITs will be treated as qualifying real estate assets for purposes of the REIT asset tests.  See “Item 1 – Business – Taxation – Federal Income Tax Considerations – Qualification as a REIT – Asset Tests” above.  If a Subsidiary REIT fails to qualify as a REIT in any taxable year, such Subsidiary REIT will be subject to federal and state income taxes and may not be able to qualify as a REIT for the four subsequent taxable years.  Any such failure could have an adverse effect on our ability to comply with the REIT income and asset tests, and thus our ability to qualify as a REIT, unless we are able to avail ourselves of certain relief provisions.

 

The 90% annual distribution requirement will decrease our liquidity and may limit our ability to engage in otherwise beneficial transactions

 

     To comply with the 90% distribution requirement applicable to REITs and to avoid the nondeductible excise tax, we must make distributions to our stockholders. See “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Annual Distribution Requirements” above. Although we anticipate that we generally will have sufficient cash or liquid assets to enable us to satisfy the REIT distribution requirement, it is possible that, from time to time, we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement, or we may decide to retain cash or distribute such greater amount as may be necessary to avoid income and excise taxation. This may be due to timing differences between the actual receipt of income and actual payment of deductible expenses, on the one hand, and the inclusion of that income and deduction of those expenses in arriving at our taxable income, on the other hand. In addition, non-deductible expenses such as principal amortization or repayments or capital expenditures in excess of non-cash deductions may cause us to fail to have sufficient cash or liquid assets to enable us to satisfy the 90% distribution requirement. In the event that timing differences occur, or we deem it appropriate to retain cash, we may borrow funds, issue additional equity securities (although we cannot assure you that we will be able to do so), pay taxable stock dividends, if possible, distribute other property or securities or engage in another transaction intended to enable us to meet the REIT distribution requirements. This may require us to raise additional capital to meet our obligations.

 

The lease of qualified health care properties to a taxable REIT subsidiary is subject to special requirements

 

     We lease certain qualified health care properties to taxable REIT subsidiaries (or limited liability companies of which the taxable REIT subsidiaries are members), which lessees contract with managers (or related parties) to manage the health care operations at these properties. The rents from this taxable REIT subsidiary lessee structure are treated as qualifying rents from real property if (1) they are paid pursuant to an arms-length lease of a qualified health care property with a taxable REIT subsidiary and (2) the manager qualifies as an eligible independent contractor (as defined in the Code). If any of these conditions are not satisfied, then the rents will not be qualifying rents. See “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Income Tests” above.

 

If certain sale-leaseback transactions are not characterized by the Internal Revenue Service as “true leases,” we may be subject to adverse tax consequences

 

     We have purchased certain properties and leased them back to the sellers of such properties, and we may enter into similar transactions in the future. We intend for any such sale-leaseback transaction to be structured in such a manner that the lease will be characterized as a “true lease,” thereby allowing us to be treated as the owner of the property for U.S. federal income tax purposes. However, depending on the terms of any specific transaction, the Internal Revenue Service might take the position that the transaction is not a “true lease” but is more properly treated in some other manner. In the event any sale-leaseback transaction is challenged and successfully re-characterized by the Internal Revenue Service, we would not be entitled to claim the deductions for depreciation and

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cost recovery generally available to an owner of property. Furthermore, if a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT asset tests or income tests and, consequently, could lose our REIT status effective with the year of re-characterization. See “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Asset Tests” and “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Income Tests” above. Alternatively, the amount of our REIT taxable income could be recalculated, which may cause us to fail to meet the REIT annual distribution requirements for a taxable year. See “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Annual Distribution Requirements” above.

 

The new Presidential Administration may propose substantial changes to fiscal and tax policies that, if enacted, may adversely affect REITs and our business

 

     The recently inaugurated U.S. President and his Administration have called for substantial changes to fiscal and tax policies, which may include comprehensive tax reform. We cannot predict the impact, if any, of such tax reform to REITs or to our business.  It is possible that any comprehensive tax reform could adversely affect REITs in general or our business specifically.  Until any such tax reform changes are enacted, we will not know whether we will benefit from, or will be negatively affected by, such changes.

  

Item 1B.  Unresolved Staff Comments

None.

34

 

 

Item 2.  Properties 

 

We own our corporate headquarters located at 4500 Dorr Street, Toledo, Ohio 43615. We also lease corporate offices in Canada, the United Kingdom and Luxembourg and have ground leases relating to certain of our properties. The following table sets forth certain information regarding the properties that comprise our consolidated real property and real estate loan investments as of December 31, 2016 (dollars in thousands and annualized revenues adjusted for timing of investment):

 

 

 

 

Triple-Net

 

Seniors Housing Operating

Property Location

 

Number of Properties

 

Total Investment

 

Annualized Revenues

 

Number of Properties

 

Total Investment

 

Annualized Revenues

 

Alabama

 

4

 

$

35,149

 

$

3,856

 

-

 

$

-

 

$

-

 

Arizona

 

2

 

 

26,126

 

 

2,237

 

4

 

 

60,346

 

 

22,075

 

California

 

28

 

 

506,530

 

 

54,595

 

69

 

 

2,564,855

 

 

585,482

 

Colorado

 

7

 

 

241,603

 

 

21,311

 

5

 

 

140,940

 

 

40,800

 

Connecticut

 

14

 

 

178,295

 

 

21,102

 

15

 

 

391,695

 

 

126,697

 

District Of Columbia

 

-

 

 

-

 

 

-

 

1

 

 

63,194

 

 

14,544

 

Delaware

 

6

 

 

105,106

 

 

15,537

 

1

 

 

21,160

 

 

6,268

 

Florida

 

34

 

 

585,009

 

 

48,896

 

6

 

 

550,064

 

 

78,566

 

Georgia

 

8

 

 

98,973

 

 

11,019

 

7

 

 

122,512

 

 

36,955

 

Iowa

 

4

 

 

56,783

 

 

5,346

 

1

 

 

32,434

 

 

10,068

 

Idaho

 

2

 

 

32,254

 

 

3,564

 

-

 

 

-

 

 

-

 

Illinois

 

12

 

 

259,844

 

 

25,446

 

14

 

 

448,055

 

 

114,224

 

Indiana

 

37

 

 

519,632

 

 

54,568

 

-

 

 

-

 

 

-

 

Kansas

 

29

 

 

267,942

 

 

24,639

 

3

 

 

70,132

 

 

17,262

 

Kentucky

 

7

 

 

74,482

 

 

10,037

 

2

 

 

38,805

 

 

13,096

 

Louisiana

 

3

 

 

20,260

 

 

3,369

 

2

 

 

50,879

 

 

12,278

 

Massachusetts

 

21

 

 

226,246

 

 

31,814

 

39

 

 

1,159,025

 

 

224,522

 

Maryland

 

8

 

 

144,638

 

 

8,829

 

4

 

 

153,359

 

 

47,671

 

Maine

 

-

 

 

-

 

 

-

 

2

 

 

49,790

 

 

17,831

 

Michigan

 

6

 

 

99,727

 

 

9,989

 

5

 

 

110,532

 

 

26,436

 

Minnesota

 

9

 

 

205,989

 

 

17,162

 

4

 

 

113,982

 

 

23,538

 

Missouri

 

2

 

 

28,164

 

 

870

 

4

 

 

134,202

 

 

20,225

 

Mississippi

 

3

 

 

27,446

 

 

3,241

 

-

 

 

-

 

 

-

 

Montana

 

1

 

 

6,050

 

 

959

 

-

 

 

-

 

 

-

 

North Carolina

 

49

 

 

359,869

 

 

33,706

 

1

 

 

40,413

 

 

7,181

 

Nebraska

 

4

 

 

32,988

 

 

4,067

 

-

 

 

-

 

 

-

 

New Hampshire

 

4

 

 

52,757

 

 

19,578

 

4

 

 

118,242

 

 

28,647

 

New Jersey

 

56

 

 

1,238,636

 

 

131,635

 

8

 

 

239,091

 

 

65,946

 

New Mexico

 

-

 

 

-

 

 

-

 

1

 

 

18,606

 

 

1,496

 

Nevada

 

5

 

 

83,529

 

 

12,519

 

2

 

 

36,658

 

 

10,576

 

New York

 

9

 

 

197,196

 

 

38,570

 

11

 

 

468,303

 

 

85,404

 

Ohio

 

28

 

 

222,137

 

 

41,569

 

4

 

 

193,825

 

 

37,672

 

Oklahoma

 

19

 

 

175,095

 

 

13,864

 

2

 

 

40,441

 

 

3,864

 

Oregon

 

10

 

 

76,035

 

 

6,741

 

-

 

 

-

 

 

-

 

Pennsylvania

 

31

 

 

911,973

 

 

90,347

 

6

 

 

81,188

 

 

39,484

 

Rhode Island

 

-

 

 

-

 

 

4,603

 

3

 

 

60,107

 

 

20,290

 

South Carolina

 

5

 

 

33,116

 

 

5,656

 

-

 

 

-

 

 

-

 

Tennessee

 

4

 

 

40,926

 

 

3,600

 

2

 

 

50,044

 

 

15,624

 

Texas

 

47

 

 

631,977

 

 

66,283

 

20

 

 

593,826

 

 

118,877

 

Utah

 

2

 

 

30,908

 

 

2,533

 

1

 

 

16,892

 

 

10,796

 

Virginia

 

13

 

 

181,903

 

 

19,166

 

2

 

 

37,677

 

 

11,252

 

Vermont

 

-

 

 

-

 

 

2,680

 

1

 

 

27,428

 

 

6,405

 

Washington

 

24

 

 

444,970

 

 

45,324

 

12

 

 

410,424

 

 

74,123

 

Wisconsin

 

8

 

 

130,602

 

 

15,138

 

-

 

 

-

 

 

-

 

West Virginia

 

4

 

 

68,678

 

 

19,591

 

-

 

 

-

 

 

-

 

Total domestic

 

569

 

 

8,659,543

 

 

955,556

 

268

 

 

8,709,126

 

 

1,976,175

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada

 

6

 

 

153,544

 

 

10,530

 

104

 

 

2,058,447

 

 

427,444

 

United Kingdom

 

56

 

 

996,194

 

 

88,262

 

48

 

 

1,291,441

 

 

273,270

 

Total international

 

62

 

 

1,149,738

 

 

98,792

 

152

 

 

3,349,888

 

 

700,714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grand total

 

631

 

$

9,809,281

 

$

1,054,348

 

420

 

$

12,059,014

 

$

2,676,889

  

35

 

 

 

 

 

Outpatient Medical

Property Location

 

Number of Properties

 

Total Investment

 

Annualized Revenues

 

Alaska

 

1

 

$

21,859

 

$

2,562

 

Alabama

 

3

 

 

30,531

 

 

5,233

 

Arkansas

 

1

 

 

22,845

 

 

2,079

 

Arizona

 

4

 

 

65,537

 

 

8,466

 

California

 

29

 

 

841,277

 

 

80,417

 

Colorado

 

3

 

 

29,924

 

 

4,097

 

Connecticut

 

1

 

 

41,153

 

 

2,318

 

Florida

 

33

 

 

400,031

 

 

48,218

 

Georgia

 

10

 

 

175,245

 

 

24,572

 

Iowa

 

1

 

 

6,794

 

 

1,653

 

Illinois

 

5

 

 

51,613

 

 

8,920

 

Indiana

 

8

 

 

146,612

 

 

18,383

 

Kansas

 

7

 

 

75,300

 

 

12,673

 

Kentucky

 

1

 

 

7,677

 

 

752

 

Maryland

 

5

 

 

85,994

 

 

13,394

 

Maine

 

1

 

 

20,470

 

 

2,980

 

Michigan

 

2

 

 

22,315

 

 

1,931

 

Minnesota

 

8

 

 

172,680

 

 

28,877

 

Missouri

 

7

 

 

142,631

 

 

18,383

 

North Carolina

 

3

 

 

55,776

 

 

7,199

 

Nebraska

 

2

 

 

35,186

 

 

5,465

 

New Hampshire

 

1

 

 

14,009

 

 

806

 

New Jersey

 

7

 

 

205,118

 

 

42,169

 

New Mexico

 

3

 

 

33,235

 

 

3,715

 

Nevada

 

5

 

 

45,069

 

 

4,194

 

New York

 

8

 

 

102,417

 

 

6,849

 

Ohio

 

7

 

 

67,209

 

 

11,365

 

Oklahoma

 

2

 

 

24,987

 

 

3,262

 

Oregon

 

1

 

 

9,506

 

 

1,575

 

South Carolina

 

1

 

 

25,853

 

 

2,138

 

Tennessee

 

7

 

 

78,058

 

 

10,499

 

Texas

 

53

 

 

891,821

 

 

97,226

 

Virginia

 

2

 

 

33,073

 

 

5,103

 

Washington

 

6

 

 

179,100

 

 

20,751

 

Wisconsin

 

20

 

 

267,226

 

 

27,991

 

Total domestic

 

258

 

 

4,428,131

 

 

536,215

 

 

 

 

 

 

 

 

 

 

 

United Kingdom

 

4

 

 

267,204

 

 

23,849

 

Grand total

 

262

 

$

4,695,335

 

$

560,064

 

The following table sets forth occupancy, coverages and average annualized revenues for certain property types (excluding investments in unconsolidated entities):

 

 

Occupancy(1)

 

Coverages(1,2)

 

Average Annualized Revenues(3)

 

 

 

 

2016

 

2015

 

2016

 

2015

 

2016

 

2015

 

 

Triple-net(4)

 

86.5%

 

87.2%

 

 1.43x  

 

1.49x

 

$

16,841

 

$

15,966

 

per bed/unit

Seniors housing operating(5)

 

88.7%

 

91.2%

 

n/a

 

n/a

 

 

59,627

 

 

60,260

 

per unit

Outpatient medical(6)

 

94.7%

 

95.1%

 

n/a

 

n/a

 

 

33

 

 

32

 

per sq. ft.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) We use unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy and coverages for properties other than medical office buildings and have not independently verified the information.

(2) Represents the ratio of our triple-net customers' earnings before interest, taxes, depreciation, amortization, rent and management fees to contractual rent or interest due us. Data reflects the 12 months ended September 30 for the periods presented.

(3) Represents annualized revenues divided by total beds, units or square feet as presented in the tables above.

(4) Occupancy represents average quarterly operating occupancy based on the quarters ended September 30 and excludes properties that are unstabilized, closed or for which data is not available or meaningful.

(5) Occupancy for seniors housing operating represents average occupancy for the three months ended December 31.

(6) Outpatient medical facilities occupancy represents the percentage of total rentable square feet leased and occupied (including month-to-month and holdover leases and excluding terminations) as of December 31.

  

36

 

 

The following table sets forth information regarding lease expirations for certain portions of our portfolio as of December 31, 2016 (dollars in thousands):

 

 

 

 

Expiration Year

 

 

 

 

2017

 

 

2018

 

 

2019

 

 

2020

 

 

2021

 

 

2022

 

 

2023

 

 

2024

 

 

2025

 

 

2026

 

 

Thereafter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Triple-net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Properties

 

 

30

 

 

51

 

 

0

 

 

14

 

 

12

 

 

7

 

 

4

 

 

5

 

 

61

 

 

32

 

 

368

  

Base rent(1)

 

$

12,936

 

$

37,120

 

$

0

 

$

17,740

 

$

24,906

 

$

7,295

 

$

4,175

 

$

11,076

 

$

72,866

 

$

64,361

 

$

665,719

 

% of base rent

 

 

1.4%

 

 

4.0%

 

 

0.0%

 

 

1.9%

 

 

2.7%

 

 

0.8%

 

 

0.5%

 

 

1.2%

 

 

7.9%

 

 

7.0%

 

 

72.5%

 

Units

 

 

1,165

 

 

3,151

 

 

0

 

 

1,225

 

 

2,289

 

 

690

 

 

317

 

 

762

 

 

4,538

 

 

3,724

 

 

39,644

 

% of units

 

 

2.0%

 

 

5.5%

 

 

0.0%

 

 

2.1%

 

 

4.0%

 

 

1.2%

 

 

0.6%

 

 

1.3%

 

 

7.9%

 

 

6.5%

 

 

68.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outpatient medical:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Square feet

 

 

1,253,812

 

 

923,728

 

 

1,171,476

 

 

1,153,444

 

 

1,442,424

 

 

2,297,626

 

 

1,168,037

 

 

1,347,883

 

 

669,305

 

 

1,064,151

 

 

3,684,305

  

Base rent(1)

 

$

32,570

 

$

23,952

 

$

30,651

 

$

30,505

 

$

38,660

 

$

48,713

 

$

28,635

 

$

37,287

 

$

18,552

 

$

27,262

 

$

83,817

 

% of base rent

 

 

8.1%

 

 

6.0%

 

 

7.7%

 

 

7.6%

 

 

9.7%

 

 

12.2%

 

 

7.1%

 

 

9.3%

 

 

4.6%

 

 

6.8%

 

 

20.9%

 

Leases

 

 

337

 

 

263

 

 

296

 

 

259

 

 

255

 

 

222

 

 

171

 

 

100

 

 

91

 

 

119

 

 

125

 

% of leases

 

 

15.1%

 

 

11.8%

 

 

13.2%

 

 

11.6%

 

 

11.4%

 

 

9.9%

 

 

7.6%

 

 

4.5%

 

 

4.1%

 

 

5.3%

 

 

5.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The most recent monthly base rent including straight line for leases with fixed escalators or annual cash rents with contingent escalators.  Base rent does not include tenant recoveries or amortization of above and below market lease intangibles.

 

Item 3.  Legal Proceedings

 

     From time to time, there are various legal proceedings pending against us that arise in the ordinary course of our business.  Management does not believe that the resolution of any of these legal proceedings either individually or in the aggregate will have a material adverse effect on our business, results of operations or financial condition.  Despite management’s view of the ultimate resolution of these legal proceedings, we may have significant legal expenses and costs associated with the defense of such matters.  Further, management cannot predict the outcome of these legal proceedings and if management’s expectation regarding such matters is not correct, such proceedings could have a material adverse effect on our business, results of operations or financial condition. 

 

     From time to time, we are party to certain legal proceedings for which third parties, such as tenants, operators and/or managers are contractually obligated to indemnify, defend and hold us harmless.  In some of these matters, the indemnitors have insurance for the potential damages.  In other matters, we are being defended by tenants and other obligated third parties and these indemnitors may not have sufficient insurance, assets, income or resources to satisfy their defense and indemnification obligations to us.  The unfavorable resolution of such legal proceedings could, individually or in the aggregate, materially adversely affect the indemnitors’ ability to satisfy their respective obligations to us, which, in turn, could have a material adverse effect on our business, results of operations or financial condition.  It is management’s opinion that there are currently no such legal proceedings pending that will, individually or in the aggregate, have such a material adverse effect.

  

 

Item 4.  Mine Safety Disclosures

 

None.

 

PART II

 

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

There were 5,066 stockholders of record as of January 31, 2017. The following table sets forth, for the periods indicated, the high and low prices of our common stock on the New York Stock Exchange (NYSE:HCN), and common dividends paid per share:

  

 

 

  

Sales Price

 

Dividends Paid

 

 

  

High

 

Low

 

Per Share

2016

  

 

 

 

 

 

 

 

 

 

First Quarter

  

$

70.45

 

$

52.80

 

$

0.86

 

Second Quarter

  

 

76.24

 

 

66.55

 

 

0.86

 

Third Quarter

  

 

80.19

 

 

72.34

 

 

0.86

 

Fourth Quarter

  

 

74.85

 

 

59.39

 

 

0.86

 

 

  

 

 

 

 

 

 

 

 

2015

  

 

 

 

 

 

 

 

 

 

First Quarter

  

$

84.88

 

$

73.20

 

$

0.825

 

Second Quarter

  

 

79.60

 

 

65.48

 

 

0.825

 

Third Quarter

  

 

70.22

 

 

61.00

 

 

0.825

 

Fourth Quarter

  

 

71.25

 

 

58.21

 

 

0.825

 

37

 

 

Our Board of Directors has approved a new quarterly cash dividend rate of $0.87 per share of common stock per quarter, commencing with the February 2017 dividend. The declaration and payment of quarterly dividends remains subject to the review and approval of the Board of Directors.

 

Stockholder Return Performance Presentation

 

Set forth below is a line graph comparing the yearly percentage change and the cumulative total stockholder return on our shares of common stock against the cumulative total return of the S & P Composite-500 Stock Index and the FTSE NAREIT Equity Index. As of December 31, 2016, 161 companies comprised the FTSE NAREIT Equity Index. The Index consists of REITs identified by NAREIT as equity (those REITs which have at least 75% of their investments in real property). The data are based on the closing prices as of December 31 for each of the five years. 2011 equals $100 and dividends are assumed to be reinvested.

 

 

 

 

12/31/11

12/31/12

12/31/13

12/31/14

12/31/15

12/31/16

 

S & P 500

100.00

116.00

153.57

174.60

177.01

198.18

 

 Welltower Inc.

100.00

118.21

108.27

160.79

151.58

156.69

 

FTSE NAREIT Equity

100.00

118.06

120.97

157.43

162.46

176.30

 

 

Except to the extent that we specifically incorporate this information by reference, the foregoing Stockholder Return Performance Presentation shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended. This information shall not otherwise be deemed filed under such Acts.

Issuer Purchases of Equity Securities

Period

 

Total Number of Shares Purchased(1)

 

Average Price Paid Per Share

 

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)

 

Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs

October 1, 2016 through October 31, 2016

 

-

 

$

-

 

 

 

 

November 1, 2016 through November 30, 2016

 

145

 

 

62.33

 

 

 

 

December 1, 2016 through December 31, 2016

 

37,916

 

 

66.93

 

 

 

 

Totals

 

38,061

 

$

66.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) During the three months ended December 31, 2016, the Company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

(2) No shares were purchased as part of publicly announced plans or programs.

  

38

 

 

Item 6.  Selected Financial Data

 

The following selected financial data for the five years ended December 31, 2016 are derived from our audited consolidated financial statements (in thousands, except per share data):

 

 

 

Year Ended December 31,

 

 

 

2012

 

2013

 

2014

 

2015

 

2016

Operating Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

1,805,044

 

$

2,880,608

 

$

3,343,546

 

$

3,859,826

 

$

4,281,160

Expenses

 

 

1,619,132

 

 

2,778,363

 

 

2,959,333

 

 

3,223,709

 

 

3,571,907

Income from continuing operations before income taxes and income (loss) from unconsolidated entities

 

 

185,912

 

 

102,245

 

 

384,213

 

 

636,117

 

 

709,253

Income tax (expense) benefit

 

 

(7,612)

 

 

(7,491)

 

 

1,267

 

 

(6,451)

 

 

19,128

Income (loss) from unconsolidated entities

 

 

2,482

 

 

(8,187)

 

 

(27,426)

 

 

(21,504)

 

 

(10,357)

Income from continuing operations

 

 

180,782

 

 

86,567

 

 

358,054

 

 

608,162

 

 

718,024

Income from discontinued operations, net

 

 

114,058

 

 

51,713

 

 

7,135

 

 

-

 

 

-

Gain (loss) on real estate dispositions, net

 

 

-

 

 

-

 

 

147,111

 

 

280,387

 

 

364,046

Net income

 

 

294,840

 

 

138,280

 

 

512,300

 

 

888,549

 

 

1,082,070

Preferred stock dividends

 

 

69,129

 

 

66,336

 

 

65,408

 

 

65,406

 

 

65,406

Preferred stock redemption charge

 

 

6,242

 

 

-

 

 

-

 

 

-

 

 

-

Net income (loss) attributable to noncontrolling interests

 

 

(2,415)

 

 

(6,770)

 

 

147

 

 

4,799

 

 

4,267

Net income attributable to common stockholders

 

$

221,884

 

$

78,714

 

$

446,745

 

$

818,344

 

$

1,012,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

224,343

 

 

276,929

 

 

306,272

 

 

348,240

 

 

358,275

 

Diluted

 

 

225,953

 

 

278,761

 

 

307,747

 

 

349,424

 

 

360,227

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to common stockholders

 

$

0.48

 

$

0.10

 

$

1.44

 

$

2.35

 

$

2.83

 

Discontinued operations, net

 

 

0.51

 

 

0.19

 

 

0.02

 

 

-

 

 

-

 

Net income attributable to common stockholders *

 

$

0.99

 

$

0.28

 

$

1.46

 

$

2.35

 

$

2.83

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to common stockholders

 

$

0.48

 

$

0.10

 

$

1.43

 

$

2.34

 

$

2.81

 

Discontinued operations, net

 

 

0.50

 

 

0.19

 

 

0.02

 

 

-

 

 

-

 

Net income attributable to common stockholders *

 

$

0.98

 

$

0.28

 

$

1.45

 

$

2.34

 

$

2.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash distributions per common share

 

$

2.96

 

$

3.06

 

$

3.18

 

$

3.30

 

$

3.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

Balance Sheet Data

 

 

2012

 

 

2013

 

 

2014

 

 

2015

 

 

2016

 

Net real estate investments

 

$

17,423,009

 

$

21,680,221

 

$

22,851,196

 

$

26,888,685

 

$

26,563,629

 

Total assets

 

 

19,491,552

 

 

23,026,666

 

 

24,962,923

 

 

29,023,845

 

 

28,865,184

 

Total long-term obligations

 

 

8,474,342

 

 

10,594,723

 

 

10,776,640

 

 

12,967,686

 

 

12,358,245

 

Total liabilities

 

 

8,936,441

 

 

11,235,296

 

 

11,403,465

 

 

13,664,877

 

 

13,185,279

 

Total preferred stock

 

 

1,022,917

 

 

1,017,361

 

 

1,006,250

 

 

1,006,250

 

 

1,006,250

 

Total equity

 

 

10,520,519

 

 

11,756,331

 

 

13,473,049

 

 

15,175,885

 

 

15,281,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Amounts may not sum due to rounding

  

39

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

EXECUTIVE SUMMARY

 

 

 

 

 

 

     Company Overview

     Business Strategy

     Capital Market Outlook

     Key Transactions in 2016

     Key Performance Indicators, Trends and Uncertainties

     Corporate Governance

41

41

42

42

43

44

 

 

 

 

 

 

LIQUIDITY AND CAPITAL RESOURCES

 

 

 

 

 

 

     Sources and Uses of Cash

     Off-Balance Sheet Arrangements

     Contractual Obligations

     Capital Structure

44

45

45

46

 

 

 

 

 

 

RESULTS OF OPERATIONS

 

 

 

 

 

 

     Summary

     Triple-net

     Seniors Housing Operating

     Outpatient Medical

     Non-Segment/Corporate

46

48

51

53

55

 

 

 

 

 

 

OTHER

 

 

 

 

 

 

     Non-GAAP Financial Measures

56

 

 

     Critical Accounting Policies

60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

40

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

     The following discussion and analysis is based primarily on the consolidated financial statements of Welltower Inc. for the periods presented and should be read together with the notes thereto contained in this Annual Report on Form 10-K. Other important factors are identified in “Item 1 — Business” and “Item 1A — Risk Factors” above.

Executive Summary

Company Overview

     Welltower Inc. (NYSE: HCN), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure.  The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience.  WelltowerTM, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.  Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets.

     The following table summarizes our consolidated portfolio for the year ended December 31, 2016 (dollars in thousands):

 

Net Operating

 

Percentage of

 

Number of

 

Type of Property

Income (NOI)(1)

 

NOI

 

Properties

 

Triple-net

$

1,208,860

 

50.3%

 

631

 

Seniors housing operating

 

814,114

 

33.9%

 

420

 

Outpatient medical

 

380,264

 

15.8%

 

262

 

Totals

$

2,403,238

 

100.0%

 

1,313

 

 

 

 

 

 

 

 

 

(1) Excludes our share of investments in unconsolidated entities and non-segment/corporate NOI.  Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount.

Business Strategy

     Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, relationship and geographic location.

     Substantially all of our revenues are derived from operating lease rentals, resident fees and services, and interest earned on outstanding loans receivable. These items represent our primary sources of liquidity to fund distributions and depend upon the continued ability of our obligors to make contractual rent and interest payments to us and the profitability of our operating properties. To the extent that our customers/partners experience operating difficulties and become unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by the type of property. Our proactive and comprehensive asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division actively manages and monitors the outpatient medical portfolio with a comprehensive process including review of tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs, and market conditions among other things. In monitoring our portfolio, our personnel use a proprietary database to collect and analyze property-specific data. Additionally, we conduct extensive research to ascertain industry trends.  We evaluate the operating environment in each property’s market to determine the likely trend in operating performance of the facility.  When we identify unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we are generally able to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of revenue and the value of our investment.

     In addition to our asset management and research efforts, we also structure our investments to help mitigate payment risk. Operating leases and loans are normally credit enhanced by guaranties and/or letters of credit. In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.

     For the year ended December 31, 2016, rental income and resident fees represented 39% and 59%, respectively, of total revenues.  Substantially all of our operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Our yield on loans receivable depends upon a number of factors, including the stated interest rate, the average principal amount

41

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

outstanding during the term of the loan and any interest rate adjustments.

     Our primary sources of cash include rent and interest receipts, resident fees and services, borrowings under our primary unsecured credit facility, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses and general and administrative expenses.  Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund these uses of cash.

     We also continuously evaluate opportunities to finance future investments.  New investments are generally funded from temporary borrowings under our primary unsecured credit facility, internally generated cash and the proceeds from investment dispositions. Our investments generate cash from net operating income and principal payments on loans receivable. Permanent financing for future investments, which replaces funds drawn under our primary unsecured credit facility, has historically been provided through a combination of the issuance of public debt and equity securities and the incurrence or assumption of secured debt.

     Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders. It is also likely that investment dispositions may occur in the future. To the extent that investment dispositions exceed new investments, our revenues and cash flows from operations could be adversely affected. We expect to reinvest the proceeds from any investment dispositions in new investments. To the extent that new investment requirements exceed our available cash on-hand, we expect to borrow under our primary unsecured credit facility. At December 31, 2016, we had $419,378,000 of cash and cash equivalents, $187,842,000 of restricted cash and $2,313,122,000 of available borrowing capacity under our primary unsecured credit facility.

Capital Market Outlook

     We believe the capital markets remain supportive of our investment strategy. For the year ended December 31, 2016, we raised $1,235,138,000 in aggregate gross proceeds through the issuance of common stock and unsecured debt. The capital raised, in combination with available cash and borrowing capacity under our primary unsecured credit facility, supported pro rata gross new investments of $3,007,040,000 for the year. We expect attractive investment opportunities to remain available in the future as we continue to leverage the benefits of our relationship investment strategy.

Key Transactions in 2016

          Capital.   In March 2016, we issued $700,000,000 of 4.25% senior unsecured notes due 2026, generating approximately $688,560,000 of net proceeds.  In May 2016, we closed on a new primary unsecured credit facility that includes a $3,000,000,000 unsecured revolving credit facility, a $500,000,000 unsecured term credit facility and a $250,000,000 Canadian-denominated unsecured term credit facility plus an option to upsize the unsecured revolving credit facility and the $500,000,000 unsecured term credit facility by up to an additional $1,000,000,000, in the aggregate, and the $250,000,000 Canadian-denominated unsecured term credit facility by up to an additional $250,000,000.  The facility also allows us to borrow up to $1,000,000,000 in alternate currencies.  Based on our current credit ratings, the unsecured revolving credit facility is priced at 0.90% over LIBOR with a 0.15% annual facility fee and the unsecured term credit facilities are priced at 0.95% over LIBOR for the U.S. tranche and CDOR for the Canadian tranche.  The unsecured term credit facilities mature on May 13, 2021 and the unsecured revolving credit facility matures on May 13, 2020. The unsecured revolving credit facility can be extended for two successive terms of six months each at our option.  Also, for the year ended December 31, 2016, we raised $527,530,000 through our dividend reinvestment program and our Equity Shelf Program (as defined below).

 

     Investments. The following summarizes our acquisitions and joint venture investments made during the year ended December 31, 2016 (dollars in thousands):

 

Properties

 

Investment Amount(1)

 

Capitalization Rates(2)

 

 

Book Amount(3)

 

Triple-net

14

$

450,537

 

6.7%

 

$

526,814

 

Seniors housing operating

34

 

1,680,165

 

6.2%

 

 

1,801,446

 

Outpatient medical

3

 

51,434

 

6.3%

 

 

56,386

 

Totals

51

$

2,182,136

 

6.3%

 

$

2,384,646

 

 

 

 

 

 

 

 

 

 

 

(1) Represents stated pro rata purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S. GAAP.

(2) Represents annualized contractual or projected income to be received in cash divided by investment amounts.

(3) Represents amounts recorded on our books including fair value adjustments pursuant to U.S. GAAP.  See Note 3 to our consolidated financial statements for additional information.

 

42

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

     Dispositions. The following summarizes property dispositions made during the year ended December 31, 2016 (dollars in thousands):

 

Properties

 

Proceeds(1)

 

Capitalization Rates(2)

 

 

Book Amount(3)

 

Triple-net

151

$

2,288,211

 

8.8%

 

$

1,773,614

 

Outpatient medical

7

 

80,300

 

7.9%

 

 

78,786

 

Totals

158

$

2,368,511

 

8.8%

 

$

1,852,400

 

 

 

 

 

 

 

 

 

 

 

(1) Represents pro rata proceeds received upon disposition including any seller financing.

(2) Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.

(3) Represents carrying value of assets at time of disposition.  See Note 5 to our consolidated financial statements for additional information.

 

     Dividends. Our Board of Directors increased the annual cash dividend to $3.48 per common share ($0.87 per share quarterly), as compared to $3.44 per common share for 2016, beginning in February 2017.  The dividend declared for the quarter ended December 31, 2016 represents the 183rd consecutive quarterly dividend payment.

  

Key Performance Indicators, Trends and Uncertainties

     We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to operating performance, credit strength and concentration risk.  Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results, in making operating decisions and for budget planning purposes.

     Operating Performance. We believe that net income attributable to common stockholders (“NICS”) is the most appropriate earnings measure. Other useful supplemental measures of our operating performance include funds from operations attributable to common stockholders (“FFO”), net operating income from continuing operations (“NOI”) and same store NOI (“SSNOI”); however, these supplemental measures are not defined by U.S. generally accepted accounting principles (“U.S. GAAP”). Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion and reconciliations of FFO, NOI and SSNOI. These earnings measures are widely used by investors and analysts in the valuation, comparison and investment recommendations of companies. The following table reflects the recent historical trends of our operating performance measures for the periods presented (in thousands):

  

 

 

 

 

Year Ended December 31,

 

 

 

 

2014

 

2015

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

446,745

 

$

818,344

 

$

1,012,397

Funds from operations attributable to common stockholders

 

 

1,174,081

 

 

1,409,640

 

 

1,593,143

Net operating income from continuing operations

 

 

1,940,188

 

 

2,237,569

 

 

2,404,177

Same store net operating income

 

 

1,404,158

 

 

1,425,795

 

 

1,445,748

 

     Credit Strength. We measure our credit strength both in terms of leverage ratios and coverage ratios. The leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt, net of cash and IRC section 1031 deposits. The coverage ratios indicate our ability to service interest and fixed charges (interest, secured debt principal amortization and preferred dividends). We expect to maintain capitalization ratios and coverage ratios sufficient to maintain a capital structure consistent with our current profile. The coverage ratios are based on earnings before interest, taxes, depreciation and amortization (“EBITDA”) which is discussed in further detail, and reconciled to net income, below in “Non-GAAP Financial Measures.” Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, investment recommendations and rating of companies. The following table reflects the recent historical trends for our credit strength measures for the periods presented:

  

 

 

 

 

Year Ended December 31,

 

 

 

 

2014

 

2015

 

2016

 

 

 

 

 

 

 

 

 

Net debt to book capitalization ratio

 

43%

 

45%

 

43%

Net debt to undepreciated book capitalization ratio

 

38%

 

40%

 

37%

Net debt to market capitalization ratio

 

28%

 

33%

 

31%

 

 

 

 

 

 

 

 

 

Adjusted interest coverage ratio

 

3.73x

 

4.20x

 

4.19x

Adjusted fixed charge coverage ratio

 

2.96x

 

3.32x

 

3.32x

 

43

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

     Concentration Risk. We evaluate our concentration risk in terms of NOI by property mix, relationship mix and geographic mix. Concentration risk is a valuable measure in understanding what portion of our NOI could be at risk if certain sectors were to experience downturns. Property mix measures the portion of our NOI that relates to our various property types. Relationship mix measures the portion of our NOI that relates to our top five relationships.  Geographic mix measures the portion of our NOI that relates to our top five states (or international equivalents). The following table reflects our recent historical trends of concentration risk by NOI for the periods indicated below:

 

 

 

 

December 31,

 

 

 

 

2014

 

2015

 

2016

 

 

 

 

 

 

 

 

 

Property mix:(1)

 

 

 

 

 

 

 

Triple-net

 

53%

 

54%

 

50%

 

Seniors housing operating

 

33%

 

31%

 

34%

 

Outpatient medical

 

14%

 

15%

 

16%

 

 

 

 

 

 

 

 

 

Relationship mix:(1)

 

 

 

 

 

 

 

Genesis Healthcare

 

16%

 

17%

 

16%

 

Sunrise Senior Living(2)

 

15%

 

13%

 

13%

 

Revera

 

4%

 

5%

 

6%

 

Brookdale Senior Living(2)

 

9%

 

7%

 

6%

 

Benchmark Senior Living

 

4%

 

4%

 

4%

 

Remaining customers

 

52%

 

54%

 

55%

 

 

 

 

 

 

 

 

 

Geographic mix:(1)

 

 

 

 

 

 

 

California

 

10%

 

10%

 

10%

 

New Jersey

 

8%

 

8%

 

8%

 

Canada

 

5%

 

6%

 

7%

 

United Kingdom

 

7%

 

9%

 

7%

 

Texas

 

7%

 

7%

 

7%

 

Remaining

 

63%

 

60%

 

61%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes our share of investments in unconsolidated entities and non-segment/corporate NOI. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount.

(2) Revera owns a controlling interest in Sunrise Senior Living.

 

     We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved and actual results may differ materially from our expectations. Factors that may cause actual results to differ from expected results are described in more detail in “Item 1 — Business — Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A — Risk Factors” and other sections of this Annual Report on Form 10-K. Management regularly monitors economic and other factors to develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and Company-specific trends. Please refer to “Item 1 — Business,” “Item 1A — Risk Factors” and “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K for further discussion of these risk factors.

Corporate Governance

     Maintaining investor confidence and trust is important in today’s business environment. Our Board of Directors and management are strongly committed to policies and procedures that reflect the highest level of ethical business practices. Our corporate governance guidelines provide the framework for our business operations and emphasize our commitment to increase stockholder value while meeting all applicable legal requirements. These guidelines meet the listing standards adopted by the New York Stock Exchange and are available on the Internet at www.welltower.com/investors/governance.  The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.

Liquidity and Capital Resources

Sources and Uses of Cash

     Our primary sources of cash include rent and interest receipts, resident fees and services, borrowings under our primary unsecured credit facility, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real

44

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses, and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows and are discussed in further detail below.  The following is a summary of our sources and uses of cash flows (dollars in thousands):

  

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

Beginning cash and cash equivalents

 

$

158,780

 

$

473,726

 

$

314,946

 

198%

 

$

360,908

 

$

(112,818)

 

-24%

 

$

202,128

 

127%

Cash provided from (used in):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Operating activities

 

 

1,138,670

 

 

1,373,468

 

 

234,798

 

21%

 

 

1,628,695

 

 

255,227

 

19%

 

 

490,025

 

43%

   Investing activities

 

 

(2,126,206)

 

 

(3,484,160)

 

 

(1,357,954)

 

64%

 

 

(309,503)

 

 

3,174,657

 

-91%

 

 

1,816,703

 

-85%

   Financing activities

 

 

1,303,172

 

 

2,006,449

 

 

703,277

 

54%

 

 

(1,240,448)

 

 

(3,246,897)

 

n/a

 

 

(2,543,620)

 

n/a

Effect of foreign currency translation on cash and cash equivalents

 

 

(690)

 

 

(8,575)

 

 

(7,885)

 

1,143%

 

 

(20,274)

 

 

(11,699)

 

136%

 

 

(19,584)

 

2,838%

Ending cash and cash equivalents

 

$

473,726

 

$

360,908

 

$

(112,818)

 

-24%

 

$

419,378

 

$

58,470

 

16%

 

$

(54,348)

 

-11%

     Operating Activities. The change in net cash provided from operating activities is primarily attributable to increases in NOI, which is primarily due to acquisitions, net of dispositions.  Please see “Results of Operations” for further discussion.  For the years ended December 31, 2014, 2015 and 2016, cash flows from operations exceeded cash distributions to stockholders.

Investing Activities.  The changes in net cash used in investing activities are primarily attributable to net changes in real property investments, real estate loans receivable and investments in unconsolidated entities which are summarized above in “Key Transactions in 2016.”  Please refer to Notes 3 and 6 of our consolidated financial statements for additional information.  The following is a summary of cash used in non-acquisition capital improvement activities (dollars in thousands):

  

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

New development

 

$

197,881

 

$

244,561

 

$

46,680

 

24%

 

$

403,131

 

$

158,570

 

65%

 

$

205,250

 

104%

Recurring capital expenditures, tenant improvements and lease commissions

 

 

59,134

 

 

64,458

 

 

5,324

 

9%

 

 

66,332

 

 

1,874

 

3%

 

 

7,198

 

12%

Renovations, redevelopments and other capital improvements

 

 

73,646

 

 

123,294

 

 

49,648

 

67%

 

 

152,814

 

 

29,520

 

24%

 

 

79,168

 

107%

Total

 

$

330,661

 

$

432,313

 

$

101,652

 

31%

 

$

622,277

 

$

189,964

 

44%

 

$

291,616

 

88%

     The change in new development is primarily due to the number and size of construction projects on-going during the relevant periods.  Renovations, redevelopments and other capital improvements include expenditures to maximize property value, increase net operating income, maintain a market-competitive position and/or achieve property stabilization.  Generally, these expenditures have increased as a result of acquisitions, primarily in our seniors housing operating segment.

     Financing Activities. The changes in net cash provided from financing activities are primarily attributable to changes related to our long-term debt arrangements, the issuance/redemptions of common and preferred stock, and dividend payments which are summarized above in “Key Transactions in 2016.”  Please refer to Notes 9, 10 and 13 of our consolidated financial statements for additional information.

 

Off-Balance Sheet Arrangements

     At December 31, 2016, we had investments in unconsolidated entities with our ownership ranging from 10% to 50%. Please see Note 7 to our consolidated financial statements for additional information.  We use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure. Please see Note 11 to our consolidated financial statements for additional information.  At December 31, 2016, we had twelve outstanding letter of credit obligations. Please see Note 12 to our consolidated financial statements for additional information.

Contractual Obligations

     The following table summarizes our payment requirements under contractual obligations as of December 31, 2016 (in thousands):

  

45

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

Payments Due by Period

Contractual Obligations

 

Total

 

2017

 

2018-2019

 

2020-2021

 

Thereafter

Unsecured revolving credit facility(1)

 

$

645,000

 

$

-

 

$

-

 

$

645,000

 

$

-

Senior unsecured notes and term credit facilities:(2)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     U.S. Dollar senior unsecured notes

 

 

6,050,000

 

 

-

 

 

1,050,000

 

 

900,000

 

 

4,100,000

     Canadian Dollar senior unsecured notes(3)

 

 

223,447

 

 

-

 

 

-

 

 

223,447

 

 

-

     Pounds Sterling senior unsecured notes(3)

 

 

1,295,385

 

 

-

 

 

-

 

 

-

 

 

1,295,385

     U.S. Dollar term credit facility

 

 

505,000

 

 

-

 

 

5,000

 

 

500,000

 

 

-

     Canadian Dollar term credit facility(3)

 

 

186,206

 

 

-

 

 

-

 

 

186,206

 

 

-

Secured debt:(2,3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Consolidated

 

 

3,465,066

 

 

550,620

 

 

1,321,310

 

 

516,038

 

 

1,077,098

     Unconsolidated  

 

 

668,282

 

 

22,886

 

 

153,360

 

 

40,919

 

 

451,117

Contractual interest obligations:(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Unsecured revolving credit facility

 

 

53,638

 

 

10,728

 

 

21,455

 

 

21,455

 

 

-

     Senior unsecured notes and term loans(3)

 

 

3,386,130

 

 

352,450

 

 

686,783

 

 

578,625

 

 

1,768,272

     Consolidated secured debt(3)

 

 

623,851

 

 

132,620

 

 

188,243

 

 

121,016

 

 

181,972

     Unconsolidated secured debt(3)

 

 

163,201

 

 

24,801

 

 

49,414

 

 

33,968

 

 

55,018

Capital lease obligations(5)

 

 

93,836

 

 

4,731

 

 

9,012

 

 

8,346

 

 

71,747

Operating lease obligations(5)

 

 

1,105,992

 

 

16,939

 

 

34,332

 

 

33,457

 

 

1,021,264

Purchase obligations(5)

 

 

523,099

 

 

242,962

 

 

277,995

 

 

-

 

 

2,142

Other long-term liabilities(6)

 

 

4,179

 

 

1,475

 

 

2,704

 

 

-

 

 

-

Total contractual obligations

 

$

18,992,312

 

$

1,360,212

 

$

3,799,608

 

$

3,808,477

 

$

10,024,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Relates to our unsecured revolving credit facility with an aggregate commitment of $3,000,000,000. See Note 9 to our consolidated financial statements.

(2) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.

(3) Based on foreign currency exchange rates in effect as of balance sheet date.

(4) Based on variable interest rates in effect as of balance sheet date.

(5) See Note 12 to our consolidated financial statements.

(6) Primarily relates to payments to be made under our Supplemental Executive Retirement Plan, which is discussed in Note 19 to the consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Structure

     Please refer to “Credit Strength” above for a discussion of our leverage and coverage ratio trends.  Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2016, we were in compliance with all of the covenants under our debt agreements. None of our debt agreements contain provisions for acceleration which could be triggered by our debt ratings. However, under our primary unsecured credit facility, the ratings on our senior unsecured notes are used to determine the fees and interest charged.  We plan to manage the Company to maintain compliance with our debt covenants and with a capital structure consistent with our current profile. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

          On May 1, 2015, we filed with the Securities and Exchange Commission (1) an open-ended automatic or “universal” shelf registration statement covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units and (2) a registration statement in connection with our enhanced dividend reinvestment plan under which we may issue up to 15,000,000 shares of common stock. As of January 31, 2017, 7,737,978 shares of common stock remained available for issuance under this registration statement. We have entered into separate Equity Distribution Agreements with each of UBS Securities LLC, KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. relating to the offer and sale from time to time of up to $630,015,000 aggregate amount of our common stock (“Equity Shelf Program”). As of January 31, 2017, we had $170,640,000 of remaining capacity under the Equity Shelf Program. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our primary unsecured credit facility.

 

Results of Operations

 

Summary

     Our primary sources of revenue include rent, resident fees and services, and interest income. Our primary expenses include interest

46

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

expense, depreciation and amortization, property operating expenses, transaction costs and general and administrative expenses.  We evaluate our business and make resource allocations on our three business segments: triple-net, seniors housing operating and outpatient medical.  The primary performance measures for our properties are NOI and SSNOI, which are discussed below.  Please see Note 17 to our consolidated financial statements for additional information.  The following is a summary of our results of operations (dollars in thousands, except per share amounts):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

Amount

 

%

 

2016

 

Amount

 

%

 

Amount

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

446,745

 

$

818,344

 

$

371,599

 

83%

 

$

1,012,397

 

$

194,053

 

24%

 

$

565,652

 

127%

Funds from operations attributable to common stockholders

 

 

1,174,081

 

 

1,409,640

 

 

235,559

 

20%

 

 

1,593,143

 

 

183,503

 

13%

 

 

419,062

 

36%

Adjusted EBITDA

 

 

1,813,241

 

 

2,091,754

 

 

278,513

 

15%

 

 

2,246,507

 

 

154,753

 

7%

 

 

433,266

 

24%

Net operating income from continuing operations

 

 

1,940,188

 

 

2,237,569

 

 

297,381

 

15%

 

 

2,404,177

 

 

166,608

 

7%

 

 

463,989

 

24%

Same store NOI

 

 

1,404,158

 

 

1,425,795

 

 

21,637

 

2%

 

 

1,445,748

 

 

19,953

 

1%

 

 

41,590

 

3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data (fully diluted):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

1.45

 

$

2.34

 

$

0.89

 

61%

 

$

2.81

 

$

0.47

 

20%

 

$

1.36

 

94%

 

Funds from operations attributable to common stockholders

 

 

3.82

 

 

4.03

 

 

0.21

 

5%

 

 

4.42

 

 

0.39

 

10%

 

 

0.60

 

16%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted interest coverage ratio

 

 

3.73x

 

 

4.20x

 

 

0.47x

 

13%

 

 

4.19x

 

 

-0.01x

 

0%

 

 

0.46x

 

12%

Adjusted fixed charge coverage ratio

 

 

2.96x

 

 

3.32x

 

 

0.36x

 

12%

 

 

3.32x

 

 

0.00x

 

0%

 

 

0.36x

 

12%

 

     The following table represents the changes in outstanding common stock for the period from January 1, 2014 to December 31, 2016 (in thousands):

 

 

 

Year Ended

 

 

 

 

 

December 31, 2014

 

December 31, 2015

 

December 31, 2016

 

Totals

Beginning balance

 

289,564

 

328,790

 

354,778

 

289,564

Public offerings

 

33,925

 

19,550

 

-

 

53,475

Dividend reinvestment plan issuances

 

4,123

 

4,024

 

4,145

 

12,292

Senior note conversions

 

259

 

1,330

 

-

 

1,589

Preferred stock conversions

 

233

 

-

 

-

 

233

Option exercises

 

498

 

249

 

141

 

888

Equity Shelf Program issuances

 

-

 

696

 

3,135

 

3,831

Other, net

 

188

 

139

 

403

 

730

Ending balance

 

328,790

 

354,778

 

362,602

 

362,602

 

 

 

 

 

 

 

 

 

 

Average number of shares outstanding:

 

 

 

 

 

 

 

Basic

 

306,272

 

348,240

 

358,275

 

 

 

Diluted

 

307,747

 

349,424

 

360,227

 

 

 

     During the past three years, inflation has not significantly affected our earnings because of the moderate inflation rate. Additionally, a large portion of our earnings are derived primarily from long-term investments with predictable rates of return. These investments are mainly financed with a combination of equity, senior unsecured notes, secured debt and borrowings under our primary unsecured credit facility. During inflationary periods, which generally are accompanied by rising interest rates, our ability to grow may be adversely affected because the yield on new investments may increase at a slower rate than new borrowing costs. Presuming the current inflation rate remains moderate and long-term interest rates do not increase significantly, we believe that inflation will not impact the availability of equity and debt financing for us.

47

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Triple-net

 

     The following is a summary of our NOI for the triple-net segment (dollars in thousands):

  

 

 

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

SSNOI(1)

 

 $ 

536,231

 

 $ 

566,188

 

 $ 

29,957

 

6%

 

 $ 

575,764

 

 $ 

9,576

 

2%

 

 $ 

39,533

 

7%

Non-cash NOI attributable to same store properties(1)

 

 

43,448

 

 

53,578

 

 

10,130

 

23%

 

 

44,215

 

 

(9,363)

 

-17%

 

 

767

 

2%

NOI attributable to non same store properties(2)

 

 

447,455

 

 

556,040

 

 

108,585

 

24%

 

 

588,881

 

 

32,841

 

6%

 

 

141,426

 

32%

NOI

 

 $ 

1,027,134

 

 $ 

1,175,806

 

 $ 

148,672

 

14%

 

 $ 

1,208,860

 

 $ 

33,054

 

3%

 

 $ 

181,726

 

18%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Change is due to increases in cash and non-cash NOI (described below) related to 397 same store properties.

(2) Change is primarily due to the acquisition of 144 properties and the conversion of 26 construction projects into revenue-generating properties subsequent to January 1, 2014.

 

    The following is a summary of our results of operations for the triple-net segment (dollars in thousands):

  

 

 

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

992,638

 

 $ 

1,094,827

 

 $ 

102,189

 

10%

 

 $ 

1,112,325

 

 $ 

17,498

 

2%

 

 $ 

119,687

 

12%

 

Interest income

 

 

32,255

 

 

74,108

 

 

41,853

 

130%

 

 

90,476

 

 

16,368

 

22%

 

 

58,221

 

181%

 

Other income

 

 

2,973

 

 

6,871

 

 

3,898

 

131%

 

 

6,059

 

 

(812)

 

-12%

 

 

3,086

 

104%

 

 

 

 

 

1,027,866

 

 

1,175,806

 

 

147,940

 

14%

 

 

1,208,860

 

 

33,054

 

3%

 

 

180,994

 

18%

Property operating expenses

 

 

732

 

 

-

 

 

(732)

 

-100%

 

 

-

 

 

-

 

n/a

 

 

(732)

 

-100%

 

Net operating income from continuing operations (NOI)

 

 

1,027,134

 

 

1,175,806

 

 

148,672

 

14%

 

 

1,208,860

 

 

33,054

 

3%

 

 

181,726

 

18%

Other expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

32,135

 

 

28,384

 

 

(3,751)

 

-12%

 

 

21,370

 

 

(7,014)

 

-25%

 

 

(10,765)

 

-33%

 

Loss (gain) on derivatives, net

 

 

(1,770)

 

 

(58,427)

 

 

(56,657)

 

3,201%

 

 

68

 

 

58,495

 

-100%

 

 

1,838

 

-104%

 

Depreciation and amortization

 

 

273,296

 

 

288,242

 

 

14,946

 

5%

 

 

297,197

 

 

8,955

 

3%

 

 

23,901

 

9%

 

Transaction costs

 

 

45,146

 

 

53,195

 

 

8,049

 

18%

 

 

10,016

 

 

(43,179)

 

-81%

 

 

(35,130)

 

-78%

 

Loss (gain) on extinguishment of debt, net

 

 

98

 

 

10,095

 

 

9,997

 

10,201%

 

 

863

 

 

(9,232)

 

-91%

 

 

765

 

781%

 

Provision for loan losses

 

 

-

 

 

-

 

 

-

 

n/a

 

 

6,935

 

 

6,935

 

n/a

 

 

6,935

 

n/a

 

Impairment of assets

 

 

-

 

 

2,220

 

 

2,220

 

n/a

 

 

20,169

 

 

17,949

 

809%

 

 

20,169

 

n/a

 

Other expenses

 

 

8,825

 

 

35,648

 

 

26,823

 

304%

 

 

-

 

 

(35,648)

 

-100%

 

 

(8,825)

 

-100%

 

 

 

 

 

357,730

 

 

359,357

 

 

1,627

 

%

 

 

356,618

 

 

(2,739)

 

-1%

 

 

(1,112)

 

0%

Income from continuing operations before income taxes and income (loss) from unconsolidated entities

 

 

669,404

 

 

816,449

 

 

147,045

 

22%

 

 

852,242

 

 

35,793

 

4%

 

 

182,838

 

27%

Income tax benefit (expense)

 

 

6,141

 

 

(4,244)

 

 

(10,385)

 

n/a

 

 

(1,087)

 

 

3,157

 

-74%

 

 

(7,228)

 

-118%

Income (loss) from unconsolidated entities

 

 

5,423

 

 

8,260

 

 

2,837

 

52%

 

 

9,767

 

 

1,507

 

18%

 

 

4,344

 

80%

Income from continuing operations

 

 

680,968

 

 

820,465

 

 

139,497

 

20%

 

 

860,922

 

 

40,457

 

5%

 

 

179,954

 

26%

Discontinued operations, net

 

 

7,135

 

 

-

 

 

(7,135)

 

-100%

 

 

-

 

 

-

 

n/a

 

 

(7,135)

 

-100%

Gain (loss) on real estate dispositions, net

 

 

146,205

 

 

86,261

 

 

(59,944)

 

-41%

 

 

355,394

 

 

269,133

 

312%

 

 

209,189

 

143%

Net income

 

 

834,308

 

 

906,726

 

 

72,418

 

9%

 

 

1,216,316

 

 

309,590

 

34%

 

 

382,008

 

46%

Less: Net income attributable to noncontrolling interests

 

 

1,874

 

 

6,348

 

 

4,474

 

239%

 

 

1,221

 

 

(5,127)

 

-81%

 

 

(653)

 

-35%

Net income attributable to common stockholders

 

$

832,434

 

$

900,378

 

$

67,944

 

8%

 

$

1,215,095

 

$

314,717

 

35%

 

$

382,661

 

46%

 

48

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

The increase in rental income is primarily attributable to the acquisitions of new properties and the conversion of newly constructed triple-net properties from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index and/or changes in the gross operating revenues of the tenant’s properties.  These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period.  If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our revenues may not continue to increase.  Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues.  Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income.  For the three months ended December 31, 2016, we had no lease renewals but we had 26 leases with rental rate increasers ranging from 0.07% to 0.60% in our triple-net portfolio. 

The increase in interest income is attributable to higher loan volume in the current year, which includes first mortgage loans to Genesis Healthcare.  The decrease in other income is due to the receipt of an early prepayment fee in 2015 related to a real estate loan receivable. 

During the year ended December 31, 2016, we completed two triple-net construction projects totaling $46,094,000 or $251,880 per bed/unit and one expansion project totaling $2,879,000. The following is a summary of triple-net construction projects pending as of December 31, 2016 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

Location

 

Units/Beds

 

 

Commitment

 

 

Balance

 

Est. Completion

Raleigh, NC

 

225

 

$

95,700

 

$

83,566

 

1Q17

Livingston, NJ

 

120

 

 

53,439

 

 

37,566

 

1Q17

Edmond, OK

 

142

 

 

27,300

 

 

23,881

 

1Q17

Tulsa, OK

 

145

 

 

28,500

 

 

19,197

 

1Q17

Lititz, PA

 

80

 

 

15,200

 

 

13,867

 

1Q17

Lancaster, PA

 

80

 

 

15,875

 

 

12,778

 

1Q17

Piscataway, NJ

 

124

 

 

40,800

 

 

34,924

 

2Q17

Bracknell, England

 

64

 

 

15,573

 

 

10,394

 

2Q17

Alexandria,VA

 

116

 

 

60,156

 

 

20,918

 

1Q18

Total

 

1,096

 

$

352,543

 

$

257,091

 

 

 

     Total interest expense represents secured debt interest expense and gains and losses on forward exchange contracts.  The change in secured debt interest expense is due to the net effect and timing of assumptions, segment transitions, fluctuations in foreign currency rates, extinguishments and principal amortizations. The following is a summary of our triple-net secured debt principal activity (dollars in thousands):

 

 

Year Ended

 

Year Ended

 

Year Ended

 

 

December 31, 2014

 

December 31, 2015

 

December 31, 2016

 

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

Beginning balance

 

$

587,136

 

5.394%

 

$

670,769

 

5.337%

 

$

554,014

 

5.488%

Debt issued

 

 

-

 

0.000%

 

 

-

 

0.000%

 

 

166,155

 

2.205%

Debt assumed

 

 

120,352

 

5.404%

 

 

44,142

 

5.046%

 

 

-

 

0.000%

Debt extinguished

 

 

(22,970)

 

6.235%

 

 

(132,545)

 

4.695%

 

 

(118,500)

 

5.562%

Foreign currency

 

 

(2,180)

 

5.317%

 

 

(15,633)

 

5.315%

 

 

3,157

 

5.247%

Principal payments

 

 

(11,569)

 

5.564%

 

 

(12,719)

 

5.450%

 

 

(10,627)

 

5.682%

Ending balance

 

$

670,769

 

5.337%

 

$

554,014

 

5.488%

 

$

594,199

 

4.580%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly averages

 

$

596,941

 

5.381%

 

$

551,803

 

5.518%

 

$

497,213

 

5.414%

 

In April 2011, we completed the acquisition of substantially all of the real estate assets of privately-owned Genesis Healthcare Corporation.  In conjunction with this transaction, we received the option to acquire an ownership interest in Genesis Healthcare.  In February 2015, Genesis Healthcare closed on a transaction to merge with Skilled Healthcare Group to become a publicly traded company which required us to record the value of the derivative asset due to the net settlement feature.  This event resulted in $58,427,000 gain. During the fourth quarter of 2015, the cost basis of this investment exceeded the fair value.  Management performed an assessment to determine whether the decline in fair value was other than temporary and concluded that it was.  As a result, we recognized an other than temporary impairment charge of $35,648,000 which is recorded in other expense. 

49

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Depreciation and amortization increased primarily as a result of new property acquisitions and the conversions of newly constructed properties. To the extent that we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.

Transaction costs are costs incurred with property acquisitions including due diligence costs, fees for legal and valuation services, the termination of pre-existing relationships, lease termination expenses and other similar costs.  The change in transaction costs from year to year is primarily a function of investment volume.  The fluctuations in loss (gain) on extinguishment of debt is primarily attributable to the volume of extinguishments and terms of the related secured debt. 

Changes in gains on sales of properties are related to the volume of property sales and the sales prices.  We recognized impairment losses on certain held-for-sale properties as the fair value less estimated costs to sell exceeded our carrying values.

During the year ended December 31, 2016, we recorded a provision for loan loss related to the restructuring of two first mortgage loans.  During the years ended December 31, 2014 and 2015, we did not record a provision for loan loss or record loan write-offs.  The provision for loan losses is related to our critical accounting estimate for the allowance for loan losses and is discussed in “Critical Accounting Policies” and Note 6 to our consolidated financial statements.

A portion of our triple-net properties were formed through partnerships.  Income or loss from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner.  Net income attributable to noncontrolling interests represents our partners’ share of net income relating to those partnerships where we are the controlling partner.

  

50

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Seniors Housing Operating

 

     The following is a summary of our NOI for the seniors housing operating segment (dollars in thousands):

  

 

 

 

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

SSNOI(1)

 

 $ 

625,732

 

 $ 

614,044

 

 $ 

(11,688)

 

-2%

 

 $ 

619,850

 

 $ 

5,806

 

1%

 

 $ 

(5,882)

 

-1%

Non-cash NOI attributable to same store properties

 

 

(1,044)

 

 

(1,003)

 

 

41

 

-4%

 

 

(2,404)

 

 

(1,401)

 

140%

 

 

(1,360)

 

130%

NOI attributable to non same store properties(2)

 

 

6,575

 

 

88,221

 

 

81,646

 

1,242%

 

 

196,668

 

 

108,447

 

123%

 

 

190,093

 

2,891%

NOI

 

 $ 

631,263

 

 $ 

701,262

 

 $ 

69,999

 

11%

 

 $ 

814,114

 

 $ 

112,852

 

16%

 

 $ 

182,851

 

29%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Relates to 278 same store properties.

(2) Primarily due to the acquisition of 137 properties subsequent to January 1, 2014.

The following is a summary of our results of operations for the seniors housing operating segment (dollars in thousands):

 

 

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resident fees and services

 

$

1,892,237

 

$

2,158,031

 

$

265,794

 

14%

 

$

2,504,731

 

$

346,700

 

16%

 

$

612,494

 

32%

 

Interest income

 

 

2,119

 

 

4,180

 

 

2,061

 

97%

 

 

4,180

 

 

-

 

0%

 

 

2,061

 

97%

 

Other income

 

 

3,215

 

 

6,060

 

 

2,845

 

88%

 

 

17,085

 

 

11,025

 

182%

 

 

13,870

 

431%

 

 

 

 

 

1,897,571

 

 

2,168,271

 

 

270,700

 

14%

 

 

2,525,996

 

 

357,725

 

16%

 

 

628,425

 

33%

Property operating expenses

 

 

1,266,308

 

 

1,467,009

 

 

200,701

 

16%

 

 

1,711,882

 

 

244,873

 

17%

 

 

445,574

 

35%

 

Net operating income from continuing operations (NOI)

 

 

631,263

 

 

701,262

 

 

69,999

 

11%

 

 

814,114

 

 

112,852

 

16%

 

 

182,851

 

29%

Other expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

64,130

 

 

70,388

 

 

6,258

 

10%

 

 

81,853

 

 

11,465

 

16%

 

 

17,723

 

28%

 

Loss (gain) on derivatives, net

 

 

275

 

 

-

 

 

(275)

 

-100%

 

 

-

 

 

-

 

n/a

 

 

(275)

 

-100%

 

Depreciation and amortization

 

 

418,199

 

 

351,733

 

 

(66,466)

 

-16%

 

 

415,429

 

 

63,696

 

18%

 

 

(2,770)

 

-1%

 

Transaction costs

 

 

16,880

 

 

54,966

 

 

38,086

 

226%

 

 

29,207

 

 

(25,759)

 

-47%

 

 

12,327

 

73%

 

Loss (gain) on extinguishment of debt, net

 

 

383

 

 

(195)

 

 

(578)

 

-151%

 

 

(88)

 

 

107

 

-55%

 

 

(471)

 

-123%

 

Impairment of assets

 

 

-

 

 

-

 

 

-

 

n/a

 

 

12,403

 

 

12,403

 

n/a

 

 

12,403

 

n/a

 

Other expenses

 

 

1,437

 

 

-

 

 

(1,437)

 

-100%

 

 

-

 

 

-

 

n/a

 

 

(1,437)

 

-100%

 

 

 

 

 

501,304

 

 

476,892

 

 

(24,412)

 

-5%

 

 

538,804

 

 

61,912

 

13%

 

 

37,500

 

7%

(Loss) income from continuing operations before income from unconsolidated entities

 

 

129,959

 

 

224,370

 

 

94,411

 

73%

 

 

275,310

 

 

50,940

 

23%

 

 

145,351

 

112%

Income tax expense

 

 

(3,047)

 

 

986

 

 

4,033

 

-132%

 

 

(3,762)

 

 

(4,748)

 

-482%

 

 

(715)

 

23%

(Loss) income from unconsolidated entities

 

 

(38,204)

 

 

(32,672)

 

 

5,532

 

-14%

 

 

(20,442)

 

 

12,230

 

-37%

 

 

17,762

 

-46%

Net income (loss)

 

 

88,708

 

 

192,684

 

 

103,976

 

117%

 

 

251,106

 

 

58,422

 

30%

 

 

162,398

 

183%

Less: Net income (loss) attributable to noncontrolling interests

 

 

(2,335)

 

 

(1,438)

 

 

897

 

-38%

 

 

2,292

 

 

3,730

 

-259%

 

 

4,627

 

-198%

Net income (loss) attributable to common stockholders

 

$

91,043

 

$

194,122

 

$

103,079

 

113%

 

$

248,814

 

$

54,692

 

28%

 

$

157,771

 

173%

      Fluctuations in revenues and property operating expenses are primarily a result of acquisitions and the movement of U.S. and foreign currency exchange rates.  The increase in other income for the year ended December 31, 2016 is primarily a result of insurance proceeds received relating to a property as well as a bargain purchase gain recognized in conjunction with a single property acquisition.  The fluctuations in depreciation and amortization are due to the net impact of acquisitions and variations in amortization of short-lived intangible assets.  To the extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly.  Losses from unconsolidated entities are primarily attributable to depreciation and amortization of short-lived

51

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

intangible assets related to our investments in unconsolidated joint ventures with Chartwell in 2012, Sunrise in 2013 and Senior Resource Group in 2014.

     During the year ended December 31, 2016, we completed one seniors housing operating construction project representing $18,979,000 or $210,878 per unit plus one expansion project representing $8,484,000.  The following is a summary of our seniors housing operating construction projects, excluding expansions, pending as of December 31, 2016 (dollars in thousands):

  

Location

 

Units/Beds

 

 

Commitment

 

 

Balance

 

Est. Completion

Camberley, England

 

12

 

$

3,487

 

$

3,436

 

1Q17

Chertsey, England

 

93

 

 

38,160

 

 

18,727

 

1Q18

Bushey, England

 

95

 

 

48,861

 

 

16,949

 

2Q18

Total

 

200

 

$

90,508

 

 

39,112

 

 

New York, NY

 

Project in planning stage

 

 

126,781

 

 

 

 

 

 

 

 

 

$

165,893

 

 

 

      Interest expense represents secured debt interest expense.  Please refer to Note 10 to our consolidated financial statements for additional information. The following is a summary of our seniors housing operating property secured debt principal activity (dollars in thousands):

 

 

 

Year Ended

 

 

Year Ended

 

Year Ended

 

 

December 31, 2014

 

 

December 31, 2015

 

December 31, 2016

 

 

 

 

 

Weighted Avg.

 

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

Amount

 

Interest Rate

 

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

Beginning balance

 

$

1,714,714

 

4.622%

 

 

$

1,654,531

 

4.422%

 

$

2,290,552

 

3.958%

Debt issued

 

 

109,503

 

3.374%

 

 

 

228,685

 

2.776%

 

 

293,860

 

2.895%

Debt assumed

 

 

18,484

 

4.359%

 

 

 

842,316

 

3.420%

 

 

60,898

 

4.301%

Debt extinguished

 

 

(114,793)

 

3.626%

 

 

 

(285,599)

 

4.188%

 

 

(159,498)

 

3.656%

Foreign currency

 

 

(39,379)

 

3.727%

 

 

 

(110,691)

 

3.625%

 

 

26,549

 

3.483%

Principal payments

 

 

(33,998)

 

4.296%

 

 

 

(38,690)

 

4.126%

 

 

(49,112)

 

3.888%

Ending balance

 

$

1,654,531

 

4.422%

 

 

$

2,290,552

 

3.958%

 

$

2,463,249

 

3.936%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly averages

 

$

1,657,416

 

4.515%

 

 

$

1,894,609

 

4.261%

 

$

2,391,706

 

3.926%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     The fluctuations in gains/losses on debt extinguishments is primarily attributable the volume of extinguishments and terms of the related secured debt.  During the year ended December 31, 2016, we recorded impairment charges totaling $12,403,000 relating to two properties.  Transaction costs 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 similar costs.  The change in transaction costs from year to year is primarily a function of investment volume.  The majority of our seniors housing operating properties are formed through partnership interests.  Net income attributable to noncontrolling interests represents our partners’ share of net income or loss related to those partnerships where we are the controlling partner.

52

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Outpatient Medical

 

     The following is a summary of our NOI for the outpatient medical segment (dollars in thousands):

  

 

 

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

SSNOI(1)

 

 $ 

242,195

 

 $ 

245,563

 

 $ 

3,368

 

1%

 

 $ 

250,134

 

 $ 

4,571

 

2%

 

 $ 

7,939

 

3%

Non-cash NOI attributable to same store properties(1)

 

 

8,015

 

 

5,186

 

 

(2,829)

 

-35%

 

 

2,440

 

 

(2,746)

 

-53%

 

 

(5,575)

 

-70%

NOI attributable to non same store properties(2)

 

 

30,904

 

 

108,661

 

 

77,757

 

252%

 

 

127,690

 

 

19,029

 

18%

 

 

96,786

 

313%

NOI

 

 $ 

281,114

 

 $ 

359,410

 

 $ 

78,296

 

28%

 

 $ 

380,264

 

 $ 

20,854

 

6%

 

 $ 

99,150

 

35%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Due to increases in cash and non-cash NOI (described below) related to 176 same store properties.

(2) Primarily due to the acquisition of 54 properties and conversions of construction projects into 17 revenue-generating properties subsequent to January 1, 2013.

 

The following is a summary of our results of operations for the outpatient medical segment (dollars in thousands):

 

 

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

413,129

 

$

504,121

 

$

90,992

 

22%

 

$

536,490

 

$

32,369

 

6%

 

$

123,361

 

30%

 

Interest income

 

 

3,293

 

 

5,853

 

 

2,560

 

78%

 

 

3,307

 

 

(2,546)

 

-43%

 

 

14

 

0%

 

Other income

 

 

1,010

 

 

4,684

 

 

3,674

 

364%

 

 

5,568

 

 

884

 

19%

 

 

4,558

 

451%

 

 

 

 

 

417,432

 

 

514,658

 

 

97,226

 

23%

 

 

545,365

 

 

30,707

 

6%

 

 

127,933

 

31%

Property operating expenses

 

 

136,318

 

 

155,248

 

 

18,930

 

14%

 

 

165,101

 

 

9,853

 

6%

 

 

28,783

 

21%

 

Net operating income from continuing operations (NOI)

 

 

281,114

 

 

359,410

 

 

78,296

 

28%

 

 

380,264

 

 

20,854

 

6%

 

 

99,150

 

35%

Other expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

31,050

 

 

27,542

 

 

(3,508)

 

-11%

 

 

19,087

 

 

(8,455)

 

-31%

 

 

(11,963)

 

-39%

 

Depreciation and amortization

 

 

152,635

 

 

186,265

 

 

33,630

 

22%

 

 

188,616

 

 

2,351

 

1%

 

 

35,981

 

24%

 

Transaction costs

 

 

7,512

 

 

2,765

 

 

(4,747)

 

-63%

 

 

3,687

 

 

922

 

33%

 

 

(3,825)

 

-51%

 

Loss (gain) on extinguishment of debt, net

 

 

405

 

 

-

 

 

(405)

 

-100%

 

 

-

 

 

-

 

n/a

 

 

(405)

 

-100%

 

Provision for loan losses

 

 

-

 

 

-

 

 

-

 

n/a

 

 

3,280

 

 

3,280

 

n/a

 

 

3,280

 

n/a

 

Impairment of assets

 

 

-

 

 

-

 

 

-

 

n/a

 

 

4,635

 

 

4,635

 

n/a

 

 

4,635

 

n/a

 

 

 

 

 

191,602

 

 

216,572

 

 

24,970

 

13%

 

 

219,305

 

 

2,733

 

1%

 

 

27,703

 

14%

Income from continuing operations before income taxes and income (loss)  from unconsolidated entities

 

 

89,512

 

 

142,838

 

 

53,326

 

60%

 

 

160,959

 

 

18,121

 

13%

 

 

71,447

 

80%

Income tax expense

 

 

(1,827)

 

 

245

 

 

2,072

 

n/a

 

 

(511)

 

 

(756)

 

n/a

 

 

1,316

 

-72%

Income (loss) from unconsolidated entities

 

 

5,355

 

 

2,908

 

 

(2,447)

 

-46%

 

 

318

 

 

(2,590)

 

-89%

 

 

(5,037)

 

-94%

Income from continuing operations

 

 

93,040

 

 

145,991

 

 

52,951

 

57%

 

 

160,766

 

 

14,775

 

10%

 

 

67,726

 

73%

Gain (loss) on real estate dispositions, net

 

 

906

 

 

194,126

 

 

193,220

 

21,327%

 

 

(1,228)

 

 

(195,354)

 

n/a

 

 

(2,134)

 

n/a

Net income (loss)

 

 

93,946

 

 

340,117

 

 

246,171

 

262%

 

 

159,538

 

 

(180,579)

 

-53%

 

 

65,592

 

70%

Less: Net income (loss) attributable to noncontrolling interests

 

 

608

 

 

(110)

 

 

(718)

 

n/a

 

 

768

 

 

878

 

n/a

 

 

160

 

26%

Net income (loss) attributable to common stockholders

 

$

93,338

 

$

340,227

 

$

246,889

 

265%

 

$

158,770

 

$

(181,457)

 

-53%

 

$

65,432

 

70%

The increase in rental income is primarily attributable to the acquisitions of new properties and the conversion of newly constructed outpatient medical properties from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index.  These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period.  If the Consumer Price Index does not increase, a portion of our revenues may not continue to increase.  Revenue from real property that is sold would offset revenue increases and, to the extent that revenues from sold properties exceed those from new acquisitions, we would experience decreased revenues.  Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income.  For the

53

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

three months ended December 31, 2016, our consolidated outpatient medical portfolio signed 81,930 square feet of new leases and 305,176 square feet of renewals.  The weighted-average term of these leases was eight years, with a rate of $35.61 per square foot and tenant improvement and lease commission costs of $18.23 per square foot.  Substantially all of these leases during the referenced quarter contain an annual fixed or contingent escalation rent structure ranging from the change in CPI to 5%.   

The increase in other income is primarily attributable to the acquisition of a controlling interest in a portfolio of properties that were historically reported as unconsolidated property investments, and subsequent adjustments made to certain contingent receivables.

During the year ended December 31, 2016, we completed five outpatient medical construction projects representing $108,001,000 or $304 per square foot. The following is a summary of outpatient medical construction projects pending as of December 31, 2016 (dollars in thousands):

  

Location

 

Square Feet

 

 

Commitment

 

 

Balance

 

Est. Completion

Wausau, WI

 

43,883

 

$

14,100

 

$

13,125

 

1Q17

Castle Rock, CO

 

56,822

 

 

13,148

 

 

7,290

 

1Q17

Timmonium, MD

 

46,000

 

 

20,996

 

 

10,717

 

2Q17

Howell, MI

 

56,211

 

 

15,509

 

 

7,174

 

2Q17

Brooklyn, NY

 

140,955

 

 

103,624

 

 

39,867

 

1Q18

Total

 

343,871

 

$

167,377

 

$

78,173

 

 

 

     Total interest expense represents secured debt interest expense. The change in secured debt interest expense is primarily due to the net effect and timing of assumptions, extinguishments and principal amortizations. The following is a summary of our outpatient medical secured debt principal activity (dollars in thousands):

  

 

 

Year Ended

 

Year Ended

 

Year Ended

 

 

December 31, 2014

 

December 31, 2015

 

December 31, 2016

 

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

Beginning balance

 

$

700,427

 

5.999%

 

$

609,268

 

5.838%

 

$

627,689

 

5.177%

Debt assumed

 

 

66,113

 

3.670%

 

 

120,959

 

2.113%

 

 

-

 

0.000%

Debt extinguished

 

  

(141,796)

 

5.567%

 

  

(88,182)

 

5.257%

 

  

(210,115)

 

5.970%

Principal payments

 

  

(15,476)

 

5.797%

 

  

(14,356)

 

5.975%

 

  

(13,495)

 

6.552%

Ending balance

 

$

609,268

 

5.838%

 

$

627,689

 

5.177%

 

$

404,079

 

4.846%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly averages

 

$

626,797

 

5.928%

 

$

613,155

 

5.434%

 

$

536,774

 

5.106%

The increases in property operating expenses and depreciation and amortization are primarily attributable to acquisitions and construction conversions of new outpatient medical facilities for which we incur certain property operating expenses. Transaction costs represent costs incurred with property acquisitions including due diligence costs, fees for legal and valuation services, termination of pre-existing relationships, a lease termination expense and other similar costs. During the year ended December 31, 2016, we recorded a provision for loan loss related to our critical accounting estimate for the allowance for loan losses discussed in “Critical Accounting Policies” and Note 6 to our consolidated financial statements. In addition, we recognized impairment losses on certain held-for-sale properties as the fair value less estimated costs to sell exceeded our carrying values. Income from unconsolidated entities represents our share of net income or losses related to the periods for which we held a joint venture investment with Forest City Enterprises and certain unconsolidated property investments. Changes in gains/losses on sales of properties are related to volume of property sales and the sales prices.

A portion of our outpatient medical properties were formed through partnerships.  Net income attributable to noncontrolling interests represents our partners’ share of net income or loss relating to those partnerships where we are the controlling partner.

  

54

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 Non-Segment/Corporate

     The following is a summary of our results of operations for the non-segment/corporate activities (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

$

677

 

$

1,091

 

$

414

 

61%

 

$

939

 

$

(152)

 

-14%

 

$

262

 

39%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

353,724

 

 

365,855

 

 

12,131

 

3%

 

 

399,035

 

 

33,180

 

9%

 

 

45,311

 

13%

 

Loss (gain) on derivatives, net

 

 

-

 

 

-

 

 

-

 

n/a

 

 

(2,516)

 

 

(2,516)

 

n/a

 

 

(2,516)

 

n/a

 

General and administrative

 

 

142,943

 

 

147,416

 

 

4,473

 

3%

 

 

155,241

 

 

7,825

 

5%

 

 

12,298

 

9%

 

Loss (gain) on extinguishments of debt, net

 

 

8,672

 

 

24,777

 

 

16,105

 

186%

 

 

16,439

 

 

(8,338)

 

-34%

 

 

7,767

 

90%

 

Other expenses

 

 

-

 

 

10,583

 

 

10,583

 

n/a

 

 

11,998

 

 

1,415

 

13%

 

 

11,998

 

n/a

 

 

 

 

505,339

 

 

548,631

 

 

43,292

 

9%

 

 

580,197

 

 

31,566

 

6%

 

 

74,858

 

15%

Loss from continuing operations before income taxes

 

 

(504,662)

 

 

(547,540)

 

 

(42,878)

 

8%

 

 

(579,258)

 

 

(31,718)

 

6%

 

 

(74,596)

 

15%

Income tax expense

 

 

-

 

 

(3,438)

 

 

(3,438)

 

n/a

 

 

24,488

 

 

27,926

 

n/a

 

 

24,488

 

n/a

Net loss

 

 

(504,662)

 

 

(550,978)

 

 

(46,316)

 

9%

 

 

(554,770)

 

 

(3,792)

 

1%

 

 

(50,108)

 

10%

Preferred stock dividends

 

 

65,408

 

 

65,406

 

 

(2)

 

0%

 

 

65,406

 

 

-

 

0%

 

 

(2)

 

0%

Net loss attributable to common stockholders

 

$

(570,070)

 

$

(616,384)

 

$

(46,314)

 

8%

 

$

(620,176)

 

$

(3,792)

 

1%

 

$

(50,106)

 

9%

 

     The following is a summary of our non-segment/corporate interest expense (dollars in thousands):

  

 

 

Year Ended

 

One Year Change

 

Year Ended

 

One Year Change

 

Two Year Change

 

 

December 31,

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2015

 

$

 

%

 

2016

 

$

 

%

 

$

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior unsecured notes

 

$

329,352

 

$

341,265

 

$

11,913

 

4%

 

$

368,775

 

$

27,510

 

8%

 

$

39,423

 

12%

Secured debt

 

  

460

 

  

357

 

  

(103)

 

-22%

 

  

310

 

  

(47)

 

-13%

 

  

(150)

 

-33%

Primary unsecured credit facility

 

  

8,914

 

  

10,812

 

  

1,898

 

21%

 

  

16,811

 

  

5,999

 

55%

 

  

7,897

 

89%

Loan expense

 

  

14,998

 

  

13,421

 

  

(1,577)

 

-11%

 

  

13,139

 

  

(282)

 

-2%

 

  

(1,859)

 

-12%

Totals

 

$

353,724

 

$

365,855

 

$

12,131

 

3%

 

$

399,035

 

$

33,180

 

9%

 

$

45,311

 

13%

 

The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments.  Please refer to Note 10 to our consolidated financial statements for additional information.  The increases in interest expense are attributed to the £500,000,000 Sterling-denominated senior unsecured notes issued in November 2014, the $300,000,000 Canadian-denominated senior unsecured notes issued in November 2015 and the $700,000,000 of 4.25% senior unsecured notes issued in March 2016.  Loan expense represents the amortization of deferred loan costs incurred in connection with the issuance and amendments of debt. Loan expense changes are due to amortization of charges for costs incurred in connection with senior unsecured note issuances.  The change in interest expense on our primary unsecured credit facility is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes.  Please refer to Note 9 of our consolidated financial statements for additional information regarding our primary unsecured credit facility.

     General and administrative expenses for 2014 included $19,688,000 of CEO transition costs.  Excluding these costs, general and administrative expenses as a percentage of consolidated revenues for the years ended December 31, 2016, 2015 and 2014 were 3.63%, 3.82% and 3.69%, respectively. The loss on extinguishment of debt in 2015 is primarily due to the early extinguishment of the 2016 senior unsecured notes. The loss on extinguishment of debt in 2016 is due to the early extinguishment of the 2017 senior unsecured notes. Other expenses in 2016 and 2015 included costs associated with the departure of executive officers.  Other expenses in 2015 also included costs associated with the termination of our investment in a strategic outpatient medical partnership.

55

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Other

 

Non-GAAP Financial Measures

     We believe that net income, as defined by U.S. GAAP, is the most appropriate earnings measurement. However, we consider funds from operations attributable to common stockholders (“FFO”), net operating income from continuing operations (“NOI”), same store NOI (“SSNOI”), EBITDA and Adjusted EBITDA to be useful supplemental measures of our operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (“NAREIT”) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income attributable to common stockholders, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairment of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests.

     NOI is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our seniors housing operating and medical facility properties.  These expenses include, but are not limited to, property-related payroll and benefits, property management fees, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance.  General and administrative expenses represent costs unrelated to property operations or transaction costs.  These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets.  SSNOI is used to evaluate the operating performance of our properties under a consistent population which eliminates changes in the composition of our portfolio.  As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the reporting period subsequent to January 1, 2015.  Land parcels, loans and sub-leases as well as any properties acquired, developed/redeveloped, transitioned, sold or classified as held for sale during that period are excluded from the same store amounts.  We believe NOI and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties.

     EBITDA stands for earnings before interest, taxes, depreciation and amortization. We believe that EBITDA, along with net income and cash flow provided from operating activities, is an important supplemental measure because it provides additional information to assess and evaluate the performance of our operations. We primarily utilize EBITDA to measure our interest coverage ratio, which represents EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization and preferred dividends. 

     A covenant in our primary unsecured credit facility contains a financial ratio based on a definition of EBITDA that is specific to that agreement. Failure to satisfy these covenants could result in an event of default that could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. Due to the materiality of these debt agreements and the financial covenants, we have disclosed Adjusted EBITDA, which represents EBITDA as defined above and adjusted for items per our covenant. We use Adjusted EBITDA to measure our adjusted fixed charge coverage ratio, which represents Adjusted EBITDA divided by fixed charges on a trailing twelve months basis. Fixed charges include total interest (excluding capitalized interest and non-cash interest expenses), secured debt principal amortization and preferred dividends. Our covenant requires an adjusted fixed charge coverage ratio of at least 1.50 times.

     Other than Adjusted EBITDA, our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Management uses these financial measures to facilitate internal and external comparisons to our historical operating results and in making operating decisions. Additionally, these measures are utilized by the Board of Directors to evaluate management. Adjusted EBITDA is used to demonstrate our compliance with a comparable financial covenant in our primary unsecured credit facility and is not being presented for use by investors for any other purpose. None of our supplemental measures represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies.

 

 

56

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

     The table below reflects the reconciliation of FFO to net income attributable to common stockholders, the most directly comparable U.S. GAAP measure, for the periods presented. The provisions for depreciation and amortization include provisions for depreciation and amortization from discontinued operations. Noncontrolling interest and unconsolidated entity amounts represent adjustments to reflect our share of depreciation and amortization.  Amounts are in thousands except for per share data.

 

 

 

 

Year Ended December 31,

FFO Reconciliation:

  

2014

 

2015

 

2016

Net income attributable to common stockholders

  

$

446,745

 

$

818,344

 

$

1,012,397

Depreciation and amortization

  

 

844,130

 

 

826,240

 

 

901,242

Impairment of assets

 

 

-

 

 

2,220

 

 

37,207

Loss (gain) on sales of properties, net

  

 

(153,522)

 

 

(280,387)

 

 

(364,046)

Noncontrolling interests

 

 

(37,852)

 

 

(39,271)

 

 

(71,527)

Unconsolidated entities

  

 

74,580

 

 

82,494

 

 

67,667

Funds from operations attributable to common stockholders

  

$

1,174,081

 

$

1,409,640

 

$

1,582,940

 

 

  

 

 

 

 

 

 

 

 

Average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

  

 

306,272

 

 

348,240

 

 

358,275

 

Diluted

  

 

307,747

 

 

349,424

 

 

360,227

 

 

  

 

 

 

 

 

 

 

 

Per share data:

  

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

  

 

 

 

 

 

 

 

 

 

Basic

  

$

1.46

 

$

2.35

 

$

2.83

 

Diluted

  

 

1.45

 

 

2.34

 

 

2.81

 

 

  

 

 

 

 

 

 

 

 

Funds from operations attributable to common stockholders

  

 

 

 

 

 

 

 

 

 

Basic

  

$

3.83

 

$

4.05

 

$

4.42

 

Diluted

  

 

3.82

 

 

4.03

 

 

4.39

  

57

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

     The table below reflects the reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented. Interest expense and the provisions for depreciation and amortization include discontinued operations. Dollars are in thousands.

 

 

 

Year Ended December 31,

Adjusted EBITDA Reconciliation:

 

2014

 

2015

 

2016

Net income

 

$

512,300

 

$

888,549

 

$

1,082,070

Interest expense

 

  

481,196

 

 

492,169

 

 

521,345

Income tax expense (benefit), net

 

  

(1,267)

 

 

6,451

 

 

(19,128)

Depreciation and amortization

 

  

844,130

 

 

826,240

 

 

901,242

 

EBITDA

 

 

1,836,359

 

 

2,213,409

 

 

2,485,529

Stock-based compensation expense

 

  

32,075

 

 

30,844

 

 

28,869

Transaction costs

 

 

69,538

 

 

110,926

 

 

42,910

Provision for loan losses

 

  

-

 

 

-

 

 

10,215

Loss (gain) on extinguishment of debt, net

 

  

9,558

 

 

34,677

 

 

17,214

Loss/impairment (gain) on sales of properties, net

 

 

(153,522)

 

 

(278,167)

 

 

(326,839)

Loss (gain) on derivatives, net

 

 

(1,495)

 

 

(58,427)

 

 

(2,448)

CEO transition costs

 

 

10,465

 

 

-

 

 

-

Other expenses

 

 

10,262

 

 

40,636

 

 

7,721

Additional other income

 

 

-

 

 

(2,144)

 

 

(16,664)

Adjusted EBITDA

 

$

1,813,240

 

$

2,091,754

 

$

2,246,507

 

 

 

  

 

 

  

 

 

  

 

Adjusted Interest Coverage Ratio:

 

 

 

 

 

 

 

 

 

Interest expense

 

$

481,196

 

$

492,169

 

$

521,345

Capitalized interest

 

  

7,150

 

  

8,670

 

  

16,943

Non-cash interest expense

 

  

(2,427)

 

  

(2,586)

 

  

(1,681)

 

Total interest

 

  

485,919

 

  

498,253

 

  

536,607

Adjusted EBITDA

 

$

1,813,240

 

$

2,091,754

 

$

2,246,507

 

Adjusted interest coverage ratio

 

  

3.73x

 

 

4.20x

 

 

4.19x

 

 

 

  

 

 

  

 

 

  

 

Adjusted Fixed Charge Coverage Ratio:

 

 

 

 

 

 

 

 

 

Interest expense

 

$

481,196

 

$

492,169

 

$

521,345

Capitalized interest

 

  

7,150

 

  

8,670

 

  

16,943

Non-cash interest expense

 

  

(2,427)

 

  

(2,586)

 

  

(1,681)

Secured debt principal payments

 

  

62,280

 

  

67,064

 

  

74,466

Preferred dividends

 

  

65,408

 

  

65,406

 

  

65,406

 

Total fixed charges

 

  

613,607

 

  

630,723

 

  

676,479

Adjusted EBITDA

 

$

1,813,240

 

$

2,091,754

 

$

2,246,507

 

Adjusted fixed charge coverage ratio

 

  

2.96x

 

 

3.32x

 

 

3.32x

  

58

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

     The following tables reflect the reconciliation of NOI and SSNOI to net operating income from continuing operations, the most directly comparable U.S. GAAP measure, for the periods presented.  Dollar amounts are in thousands.

 

 

 

 

 

Year Ended December 31,

NOI Reconciliation:

 

2014

 

2015

 

2016

Total revenues:

 

 

 

 

 

 

 

 

 

 

Triple-net

 

$

1,027,866

 

$

1,175,806

 

$

1,208,860

 

Seniors housing operating

 

 

1,897,571

 

 

2,168,271

 

 

2,525,996

 

Outpatient medical

 

 

417,432

 

 

514,658

 

 

545,365

 

Non-segment/corporate

 

 

677

 

 

1,091

 

 

939

 

 

 

Total revenues

 

 

3,343,546

 

 

3,859,826

 

 

4,281,160

Property operating expenses:

 

 

 

 

 

 

 

 

 

 

Triple-net

 

 

732

 

 

-

 

 

-

 

Seniors housing operating

 

 

1,266,308

 

 

1,467,009

 

 

1,711,882

 

Outpatient medical

 

 

136,318

 

 

155,248

 

 

165,101

 

 

 

Total property operating expenses

 

 

1,403,358

 

 

1,622,257

 

 

1,876,983

Net operating income:

 

 

 

 

 

 

 

 

 

 

Triple-net

 

 

1,027,134

 

 

1,175,806

 

 

1,208,860

 

Seniors housing operating

 

 

631,263

 

 

701,262

 

 

814,114

 

Outpatient medical

 

 

281,114

 

 

359,410

 

 

380,264

 

Non-segment/corporate

 

 

677

 

 

1,091

 

 

939

 

 

 

Net operating income from continuing operations

 

$

1,940,188

 

$

2,237,569

 

$

2,404,177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

Same Store NOI Reconciliation:

 

2014

 

2015

 

2016

Net operating income from continuing operations:

 

 

 

 

 

 

 

 

 

 

Triple-net

 

$

1,027,134

 

$

1,175,806

 

$

1,208,860

 

Seniors housing operating

 

 

631,263

 

 

701,262

 

 

814,114

 

Outpatient medical

 

 

281,114

 

 

359,410

 

 

380,264

 

 

 

Total

 

 

1,939,511

 

 

2,236,478

 

 

2,403,238

Adjustments:

 

 

 

 

 

 

 

 

 

 

Triple-net:

 

 

 

 

 

 

 

 

 

 

 

Non-cash NOI on same store properties

 

 

(43,448)

 

 

(53,578)

 

 

(44,215)

 

 

NOI attributable to non same store properties

 

 

(447,455)

 

 

(556,040)

 

 

(588,881)

 

 

 

Subtotal

 

 

(490,903)

 

 

(609,618)

 

 

(633,096)

 

Seniors housing operating:

 

 

 

 

 

 

 

 

 

 

 

Non-cash NOI on same store properties

 

 

1,044

 

 

1,003

 

 

2,404

 

 

NOI attributable to non same store properties

 

 

(6,575)

 

 

(88,221)

 

 

(196,668)

 

 

 

Subtotal

 

 

(5,531)

 

 

(87,218)

 

 

(194,264)

 

Outpatient medical:

 

 

 

 

 

 

 

 

 

 

 

Non-cash NOI on same store properties

 

 

(8,015)

 

 

(5,186)

 

 

(2,440)

 

 

NOI attributable to non same store properties

 

 

(30,904)

 

 

(108,661)

 

 

(127,690)

 

 

 

Subtotal

 

 

(38,919)

 

 

(113,847)

 

 

(130,130)

 

 

 

Total

 

 

(535,353)

 

 

(810,683)

 

 

(957,490)

Same store net operating income:

 

 

 

 

 

 

 

 

 

 

Triple-net

 

 

536,231

 

 

566,188

 

 

575,764

 

Seniors housing operating

 

 

625,732

 

 

614,044

 

 

619,850

 

Outpatient medical

 

 

242,195

 

 

245,563

 

 

250,134

 

 

 

Total

 

$

1,404,158

 

$

1,425,795

 

$

1,445,748

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store NOI Property Reconciliation:

 

 

 

 

 

 

 

 

 

 

Total properties

 

 

1,313

 

 

 

 

 

 

 

Acquisitions

 

 

(335)

 

 

 

 

 

 

 

Developments

 

 

(44)

 

 

 

 

 

 

 

Disposals/Held-for-sale

 

 

(72)

 

 

 

 

 

 

 

Segment transitions

 

 

(2)

 

 

 

 

 

 

 

Other(1)

 

 

(9)

 

 

 

 

 

 

 

 

Same store properties

 

 

851

 

 

 

 

 

 

(1) Includes eight land parcels and one loan.

  

59

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions.  Management considers accounting estimates or assumptions critical if:

·         the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and

·         the impact of the estimates and assumptions on financial condition or operating performance is material.

Management has discussed the development and selection of its critical accounting policies with the Audit Committee of the Board of Directors and the Audit Committee has reviewed the disclosure presented below relating to them.  Management believes the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate and are not reasonably likely to change in the future.  However, since these estimates require assumptions to be made that were uncertain at the time the estimate was made, they bear the risk of change.  If actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial condition.  Please refer to Note 2 to our consolidated financial statements for further information on significant accounting policies that impact us and for the impact of new accounting standards, including accounting pronouncements that were issued but not yet adopted by us.

The following table presents information about our critical accounting policies, as well as the material assumptions used to develop each estimate:

 

Nature of Critical

Accounting Estimate

Assumptions/Approach

Used

Principles of Consolidation

The consolidated financial statements include our accounts, the accounts of our wholly-owned subsidiaries and the accounts of joint venture entities in which we own a majority voting interest with the ability to control operations and where no substantive participating rights or substantive kick out rights have been granted to the noncontrolling interests.  In addition, we consolidate those entities deemed to be variable interest entities (VIEs) in which we are determined to be the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation.

 

We make judgments about which entities are VIEs based on an assessment of whether (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We make judgments with respect to our level of influence or control of an entity and whether we are (or are not) the primary beneficiary of a VIE. Consideration of various factors includes, but is not limited to, our ability to direct the activities that most significantly impact the entity's economic performance, our form of ownership interest, our representation on the entity's governing body, the size and seniority of our investment, our ability and the rights of other investors to participate in policy making decisions, replace the manager and/or liquidate the entity, if applicable. Our ability to correctly assess our influence or control over an entity at inception of our involvement or on a continuous basis when determining the primary beneficiary of a VIE affects the presentation of these entities in our consolidated financial statements. If we perform a primary beneficiary analysis at a date other than at inception of the variable interest entity, our assumptions may be different and may result in the identification of a different primary beneficiary.

Income Taxes

As part of the process of preparing our consolidated financial statements, significant management judgment is required to evaluate our compliance with REIT requirements.

 

Our determinations are based on interpretation of tax laws, and our conclusions may have an impact on the income tax expense recognized. Adjustments to income tax expense may be required as a result of: (i) audits conducted by federal, state and international tax authorities, (ii) our ability to qualify as a REIT, (iii) the potential for built-in-gain recognized related to prior-tax-free acquisitions of C corporations and (iv) changes in tax laws. Adjustments required in any given period are included in income.
     

 

60

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Nature of Critical

Accounting Estimate

Assumptions/Approach

Used

 

Business Combinations

Real property developed by us is recorded at cost, including the capitalization of construction period interest. The cost of real property acquired is allocated to net tangible and identifiable intangible assets based on their respective fair values. Tangible assets primarily consist of land, buildings and improvements. The remaining purchase price is allocated among identifiable intangible assets primarily consisting of the above or below market component of in-place leases and the value of in-place leases. The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant.

 

We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our allocations are typically the allocation of fair value to the buildings as-if-vacant, land and in-place leases. In the case of the fair value of buildings and the allocation of value to land and other intangibles, our estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in-place leases, we make our best estimates based on our evaluation of the specific characteristics of each tenant's lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases.

We compute depreciation and amortization on our properties using the straight-line method based on their estimated useful lives which range from 15 to 40 years for buildings and five to 15 years for improvements. Amortization periods for intangibles are based on the remaining life of the lease.

 

Allowance for Loan Losses

We maintain an allowance for loan losses in accordance with U.S. GAAP.  The allowance for loan losses is maintained at a level believed adequate to absorb potential losses in our loans receivable.  The determination of the allowance is based on a quarterly evaluation of all outstanding loans.  If this evaluation indicates that there is a greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required.  A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the original loan agreement or if it has been modified in a troubled debt restructuring.  Consistent with this definition, all loans on non-accrual are deemed impaired.  To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to full accrual status.

 

The determination of the allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments and principal. We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and value of the underlying property.  Any loans with collectability concerns are subjected to a projected payoff valuation.  The valuation is based on the expected future cash flows and/or the estimated fair value of the underlying collateral.  The valuation is compared to the outstanding balance to determine the reserve needed for each loan.  We may base our valuation on a loan’s observable market price, if any, or the fair value of collateral, net of sales costs, if the repayment of the loan is expected to be provided solely by the collateral.

Fair Value of Derivative Instruments

 

The valuation of derivative instruments is accounted for in accordance with U.S. GAAP, which requires companies to record derivatives at fair market value on the balance sheet as assets or liabilities.

 

The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments. Fair values of our forward exchange contracts are estimated using pricing models that consider forward currency spot rates, forward trade rates and discount rates.  Fair values of our interest rate swaps are estimated by utilizing pricing models that consider forward yield curves, discount rates and counterparty credit risk. Such amounts and their recognition are subject to significant estimates which may change in the future.
       

 

61

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Nature of Critical

Accounting Estimate

Assumptions/Approach

Used

Revenue Recognition

Revenue is recorded in accordance with U.S. GAAP, which requires that revenue be recognized after four basic criteria are met. These four criteria include persuasive evidence of an arrangement, the rendering of service, fixed and determinable income and reasonably assured collectability. If the collectability of revenue is determined incorrectly, the amount and timing of our reported revenue could be significantly affected. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Substantially all of our operating leases contain fixed and/or contingent escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.  We recognize resident fees and services, other than move-in fees, monthly as services are provided.  Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days’ notice.

 

 

We evaluate the collectability of our revenues and related receivables on an on-going basis. We evaluate collectability based on assumptions and other considerations including, but not limited to, the certainty of payment, payment history, the financial strength of the investment’s underlying operations as measured by cash flows and payment coverages, the value of the underlying collateral and guaranties and current economic conditions.

If our evaluation indicates that collectability is not reasonably assured, we may place an investment on non-accrual or reserve against all or a portion of current income as an offset to revenue.

 

 

Impairment of Long-Lived Assets

We review our long-lived assets for potential impairment in accordance with U.S. GAAP. An impairment charge must be recognized when the carrying value of a long-lived asset is not recoverable.  The carrying value is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.  If it is determined that a permanent impairment of a long-lived asset has occurred, the carrying value of the asset is reduced to its fair value and an impairment charge is recognized for the difference between the carrying value and the fair value.

 

 

The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if there are indicators of impairment.  These indicators may include anticipated operating losses at the property level, the tenant’s inability to make rent payments, a decision to dispose of an asset before the end of its estimated useful life and changes in the market that may permanently reduce the value of the property.  If indicators of impairment exist, then the undiscounted future cash flows from the most likely use of the property are compared to the current net book value.  This analysis requires us to determine if indicators of impairment exist and to estimate the most likely stream of cash flows to be generated from the property during the period the property is expected to be held.

 

  

62

 

  

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

     We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We seek to mitigate the underlying foreign currency exposures with gains and losses on derivative contracts hedging these exposures.  We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to match our variable rate investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. This section is a discussion of the risks associated with potential fluctuations in interest rates and foreign currency exchange rates. For additional information, see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” and Notes 11 and 16 to our consolidated financial statements.

     We historically borrow on our primary unsecured credit facility to acquire, construct or make loans relating to health care and seniors housing properties. Then, as market conditions dictate, we will issue equity or long-term fixed rate debt to repay the borrowings under our primary unsecured credit facility.  We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of refinancing may not be as favorable as the terms of current indebtedness. The majority of our borrowings were completed under indentures or contractual agreements that limit the amount of indebtedness we may incur. Accordingly, in the event that we are unable to raise additional equity or borrow money because of these limitations, our ability to acquire additional properties may be limited.

     A change in interest rates will not affect the interest expense associated with our fixed rate debt. Interest rate changes, however, will affect the fair value of our fixed rate debt. Changes in the interest rate environment upon maturity of this fixed rate debt could have an effect on our future cash flows and earnings, depending on whether the debt is replaced with other fixed rate debt, variable rate debt or equity or repaid by the sale of assets. To illustrate the impact of changes in the interest rate markets, we performed a sensitivity analysis on our fixed rate debt instruments whereby we modeled the change in net present values arising from a hypothetical 1% increase in interest rates to determine the instruments’ change in fair value. The following table summarizes the analysis performed as of the dates indicated (in thousands):

  

 

 

December 31, 2016

 

December 31, 2015

 

 

Principal balance

 

Fair value change

 

Principal balance

 

Fair value change

Senior unsecured notes

 

$

7,568,832

 

$

(521,203)

 

$

7,965,107

 

$

(519,901)

Secured debt

 

 

2,489,276

 

 

(73,944)

 

 

2,757,123

 

 

(91,376)

Totals

 

$

10,058,108

 

$

(595,147)

 

$

10,722,230

 

$

(611,277)

 

 

 

 

 

 

 

 

 

 

 

 

 

     Our variable rate debt, including our primary unsecured credit facility, is reflected at fair value. At December 31, 2016, we had $2,311,996,000 outstanding related to our variable rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would result in increased annual interest expense of $23,120,000. At December 31, 2015, we had $2,236,733,000 outstanding under our variable rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would have resulted in increased annual interest expense of $22,367,000.

     We are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations. Increases or decreases in the value of the Canadian Dollar or Pounds Sterling relative to the U.S. Dollar impact the amount of net income we earn from our investments in Canada and the United Kingdom. Based solely on our results for the year ended December 31, 2016, including the impact of existing hedging arrangements, if these exchange rates were to increase or decrease by 10%, our net income from these investments would increase or decrease, as applicable, by less than $2,000,000.  We will continue to mitigate these underlying foreign currency exposures with non-U.S. denominated borrowings and gains and losses on derivative contracts.  If we increase our international presence through investments in, or acquisitions or development of, seniors housing and health care properties outside the U.S., we may also decide to transact additional business or borrow funds in currencies other than U.S. Dollars, Canadian Dollars or Pounds Sterling. To illustrate the impact of changes in foreign currency markets, we performed a sensitivity analysis on our derivative portfolio whereby we modeled the change in net present values arising from a hypothetical 1% increase in foreign currency exchange rates to determine the instruments’ change in fair value.  The following table summarizes the results of the analysis performed, excluding cross currency hedge activity (dollars in thousands):

 

 

December 31, 2016

 

December 31, 2015

 

 

Carrying value

 

Fair value change

 

Carrying value

 

Fair value change

Foreign currency exchange contracts

 

$

87,962

 

$

722

 

$

117,452

 

$

1,915

Debt designated as hedges

 

 

1,481,591

 

 

13,000

 

 

1,728,979

 

 

13,000

Totals

 

$

1,569,553

 

$

13,722

 

$

1,846,431

 

$

14,915

 

 

 

 

 

 

 

 

 

 

 

 

 

  

63

 

  

Item 8.  Financial Statements and Supplementary Data

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Board of Directors and Shareholders of Welltower Inc.

 

     We have audited the accompanying consolidated balance sheets of Welltower Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

 

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

     In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Welltower Inc. and subsidiaries at December 31, 2016 and 2015, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

 

     We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Welltower Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 22, 2017 expressed an unqualified opinion thereon.

 

                                    /s/  Ernst & Young LLP

 

 

Toledo, Ohio

February 22, 2017

  

 

64

 

CONSOLIDATED BALANCE SHEETS

WELLTOWER INC. AND SUBSIDIARIES 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

  

2016

 

2015

Assets

  

(In thousands)

Real estate investments:

 

 

 

 

 

 

 

Real property owned:

 

 

 

 

 

 

 

 

Land and land improvements

  

$

2,591,071

 

$

2,563,445

 

 

Buildings and improvements

 

 

24,496,153

 

 

25,522,542

 

 

Acquired lease intangibles

 

 

1,402,884

 

 

1,350,585

 

 

Real property held for sale, net of accumulated depreciation

 

 

1,044,859

 

 

169,950

 

 

Construction in progress

 

 

506,091

 

 

258,968

 

 

 

Gross real property owned

 

 

30,041,058

 

 

29,865,490

 

 

Less accumulated depreciation and amortization

 

 

(4,093,494)

 

 

(3,796,297)

 

 

 

Net real property owned

 

 

25,947,564

 

 

26,069,193

 

 

Real estate loans receivable

 

 

622,628

 

 

819,492

 

 

Less allowance for losses on loans receivable

 

 

(6,563)

 

 

-

 

 

 

Net real estate loans receivable

 

 

616,065

 

 

819,492

 

Net real estate investments

 

 

26,563,629

 

 

26,888,685

Other assets:

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

 

457,138

 

 

542,281

 

 

Goodwill

 

 

68,321

 

 

68,321

 

 

Cash and cash equivalents

 

 

419,378

 

 

360,908

 

 

Restricted cash

 

 

187,842

 

 

61,782

 

 

Straight-line receivable

 

 

342,578

 

 

395,562

 

 

Receivables and other assets

 

 

826,298

 

 

706,306

 

 

 

Total other assets

 

 

2,301,555

 

 

2,135,160

Total assets

 

$

28,865,184

 

$

29,023,845

 

 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Borrowings under primary unsecured credit facility

 

$

645,000

 

$

835,000

 

 

Senior unsecured notes

 

 

8,161,619

 

 

8,548,055

 

 

Secured debt

 

 

3,477,699

 

 

3,509,142

 

 

Capital lease obligations

 

 

73,927

 

 

75,489

 

 

Accrued expenses and other liabilities

 

 

827,034

 

 

697,191

Total liabilities

 

 

13,185,279

 

 

13,664,877

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

398,433

 

 

183,083

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

1,006,250

 

 

1,006,250

 

 

Common stock

 

 

363,071

 

 

354,811

 

 

Capital in excess of par value

 

 

16,999,691

 

 

16,478,300

 

 

Treasury stock

 

 

(54,741)

 

 

(44,372)

 

 

Cumulative net income

 

 

4,803,575

 

 

3,725,772

 

 

Cumulative dividends

 

 

(8,144,981)

 

 

(6,846,056)

 

 

Accumulated other comprehensive income (loss)

 

 

(169,531)

 

 

(88,243)

 

 

Other equity

 

 

3,059

 

 

4,098

 

 

 

Total Welltower Inc. stockholders’ equity

 

 

14,806,393

 

 

14,590,560

 

 

Noncontrolling interests

 

 

475,079

 

 

585,325

Total equity

 

 

15,281,472

 

 

15,175,885

Total liabilities and equity

 

$

28,865,184

 

$

29,023,845

 

See accompanying notes

 

65

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

WELLTOWER INC. AND SUBSIDIARIES

(In thousands, except per share data)

 

 

 

 

Year Ended December 31,

 

 

 

 

2016

 

2015

 

2014

Revenues:

 

 

 

 

 

 

 

 

 

 

Rental income

  

$

1,648,815

 

$

1,598,948

 

$

1,405,767

 

Resident fees and services

 

 

2,504,731

 

 

2,158,031

 

 

1,892,237

 

Interest income

 

 

97,963

 

 

84,141

 

 

37,667

 

Other income

 

 

29,651

 

 

18,706

 

 

7,875

 

 

Total revenues

 

 

4,281,160

 

 

3,859,826

 

 

3,343,546

Expenses:

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

521,345

 

 

492,169

 

 

481,039

 

Property operating expenses

 

 

1,876,983

 

 

1,622,257

 

 

1,403,358

 

Depreciation and amortization

 

 

901,242

 

 

826,240

 

 

844,130

 

General and administrative

 

 

155,241

 

 

147,416

 

 

142,943

 

Transaction costs

 

 

42,910

 

 

110,926

 

 

69,538

 

Loss (gain) on derivatives, net

 

 

(2,448)

 

 

(58,427)

 

 

(1,495)

 

Loss (gain) on extinguishment of debt, net

 

 

17,214

 

 

34,677

 

 

9,558

 

Provision for loan losses

 

 

10,215

 

 

-

 

 

-

 

Impairment of assets

 

 

37,207

 

 

2,220

 

 

-

 

Other expenses

 

 

11,998

 

 

46,231

 

 

10,262

 

 

Total expenses

 

 

3,571,907

 

 

3,223,709

 

 

2,959,333

Income from continuing operations before income taxes

 

 

 

 

 

 

 

 

 

 

and income from unconsolidated entities

 

 

709,253

 

 

636,117

 

 

384,213

Income tax (expense) benefit

 

 

19,128

 

 

(6,451)

 

 

1,267

Income (loss) from unconsolidated entities

 

 

(10,357)

 

 

(21,504)

 

 

(27,426)

Income from continuing operations

 

 

718,024

 

 

608,162

 

 

358,054

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sales of properties, net

 

 

-

 

 

-

 

 

6,411

 

Income (loss) from discontinued operations, net

 

 

-

 

 

-

 

 

724

 

 

Discontinued operations, net

 

 

-

 

 

-

 

 

7,135

Gain (loss) on real estate dispositions, net

 

 

364,046

 

 

280,387

 

 

147,111

Net income

 

 

1,082,070

 

 

888,549

 

 

512,300

Less:  Preferred stock dividends

 

 

65,406

 

 

65,406

 

 

65,408

Less:  Net income (loss) attributable to noncontrolling interests(1)

 

 

4,267

 

 

4,799

 

 

147

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

1,012,397

 

$

818,344

 

$

446,745

 

 

 

 

 

 

 

 

 

 

 

 

Average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

358,275

 

 

348,240

 

 

306,272

 

Diluted

 

 

360,227

 

 

349,424

 

 

307,747

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to common

 

 

 

 

 

 

 

 

 

 

 

stockholders, including real estate dispositions

 

$

2.83

 

$

2.35

 

$

1.44

 

Discontinued operations, net

 

 

-

 

 

-

 

 

0.02

 

Net income attributable to common stockholders*

 

$

2.83

 

$

2.35

 

$

1.46

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to common

 

 

 

 

 

 

 

 

 

 

 

stockholders, including real estate dispositions

 

$

2.81

 

$

2.34

 

$

1.43

 

Discontinued operations, net

 

 

-

 

 

-

 

 

0.02

 

Net income attributable to common stockholders*

 

$

2.81

 

$

2.34

 

$

1.45

 

 

 

 

 

 

 

 

 

 

* Amounts may not sum due to rounding

(1) Includes amounts attributable to redeemable noncontrolling interests

See accompanying notes

 

66

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)

WELLTOWER INC. AND SUBSIDIARIES

(In thousands)

 

 

 

 

Year Ended December 31,

 

 

 

 

2016

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1,082,070

 

$

888,549

 

$

512,300

 

 

 

  

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

Unrecognized gain/(loss) on equity investments

 

 

5,120

 

 

-

 

 

389

 

Unrecognized gain/(loss) on cash flow hedges

 

 

1,414

 

 

(766)

 

 

4,409

 

Unrecognized actuarial gain/(loss)

 

 

190

 

 

246

 

 

(137)

 

Foreign currency translation gain/(loss)

 

 

(85,557)

 

 

(46,679)

 

 

(71,964)

Total other comprehensive income (loss)

 

 

(78,833)

 

 

(47,199)

 

 

(67,303)

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

 

 

1,003,237

 

 

841,350

 

 

444,997

Less: Total comprehensive income (loss) attributable to noncontrolling interests(1)

 

 

6,722

 

 

(31,166)

 

 

(14,678)

Total comprehensive income attributable to stockholders

 

$

996,515

 

$

872,516

 

$

459,675

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes amounts attributable to redeemable noncontrolling interests.

 

 

 

 

See accompanying notes

 

67

 

CONSOLIDATED STATEMENTS OF EQUITY

WELLTOWER INC. AND SUBSIDIARIES

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Preferred

Common

Excess of

Treasury

Cumulative

Cumulative

Comprehensive

Other

Noncontrolling

 

 

 

 

 

Stock

Stock

Par Value

Stock

Net Income

Dividends

Income

Equity

Interests

Total

Balances at December 31, 2013

$

1,017,361

$

289,461

$

12,418,520

$

(21,263)

$

2,329,869

$

(4,600,854)

$

(24,531)

$

6,020

$

341,748

$

11,756,331

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

512,153

 

 

 

 

 

 

 

(342)

 

511,811

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

(52,478)

 

 

 

(14,825)

 

(67,303)

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

444,508

Net change in noncontrolling interests

 

 

 

 

 

(17,653)

 

 

 

 

 

 

 

 

 

 

 

(28,685)

 

(46,338)

Amounts related to issuance of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from dividend reinvestment and stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

incentive plans, net of forfeitures

 

 

 

337

 

22,710

 

(13,978)

 

 

 

 

 

 

 

(1,425)

 

 

 

7,644

Net proceeds from sale of common stock

 

 

 

38,546

 

2,305,322

 

 

 

 

 

 

 

 

 

 

 

 

 

2,343,868

Equity component of convertible debt

 

 

 

258

 

935

 

 

 

 

 

 

 

 

 

 

 

 

 

1,193

Conversion of preferred stock

 

(11,111)

 

233

 

10,878

 

 

 

 

 

 

 

 

 

 

 

 

 

-

Option compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

912

 

 

 

912

Cash dividends paid:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock cash dividends

 

 

 

 

 

 

 

 

 

 

 

(969,661)

 

 

 

 

 

 

 

(969,661)

 

Preferred stock cash dividends

 

 

 

 

 

 

 

 

 

 

 

(65,408)

 

 

 

 

 

 

 

(65,408)

Balances at December 31, 2014

 

1,006,250

 

328,835

 

14,740,712

 

(35,241)

 

2,842,022

 

(5,635,923)

 

(77,009)

 

5,507

 

297,896

 

13,473,049

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

883,750

 

 

 

 

 

 

 

4,878

 

888,628

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,234)

 

 

 

(35,965)

 

(47,199)

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

841,429

Net change in noncontrolling interests

 

 

 

 

 

(23,077)

 

 

 

 

 

 

 

 

 

 

 

318,516

 

295,439

Amounts related to issuance of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

incentive plans, net of forfeitures

 

 

 

126

 

25,053

 

(9,131)

 

 

 

 

 

 

 

(2,107)

 

 

 

13,941

Net proceeds from sale of common stock

 

 

 

24,520

 

1,730,181

 

 

 

 

 

 

 

 

 

 

 

 

 

1,754,701

Equity component of convertible debt

 

 

 

1,330

 

5,431

 

 

 

 

 

 

 

 

 

 

 

 

 

6,761

Option compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

698

 

 

 

698

Cash dividends paid:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock cash dividends

 

 

 

 

 

 

 

 

 

 

 

(1,144,727)

 

 

 

 

 

 

 

(1,144,727)

 

Preferred stock cash dividends

 

 

 

 

 

 

 

 

 

 

 

(65,406)

 

 

 

 

 

 

 

(65,406)

Balances at December 31, 2015

 

1,006,250

 

354,811

 

16,478,300

 

(44,372)

 

3,725,772

 

(6,846,056)

 

(88,243)

 

4,098

 

585,325

 

15,175,885

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

1,077,803

 

 

 

 

 

 

 

9,277

 

1,087,080

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

(81,288)

 

 

 

2,455

 

(78,833)

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,008,247

Net change in noncontrolling interests

 

 

 

  

 

(51,478)

 

 

 

 

 

 

 

 

 

 

 

(121,978)

 

(173,456)

Amounts related to issuance of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from dividend reinvestment and stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

incentive plans, net of forfeitures

 

 

 

839

 

46,938

 

(10,369)

 

 

 

 

 

 

 

(1,305)

 

 

 

36,103

Net proceeds from sale of common stock

 

 

 

7,421

 

525,931

 

 

 

 

 

 

 

 

 

 

 

 

 

533,352

Option compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

266

 

 

 

266

Cash dividends paid:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock cash dividends

 

 

 

 

 

 

 

 

 

 

 

(1,233,519)

 

 

 

 

 

 

 

(1,233,519)

 

Preferred stock cash dividends

 

 

 

 

 

 

 

 

 

 

 

(65,406)

 

 

 

 

 

 

 

(65,406)

Balances at December 31, 2016

$

1,006,250

$

363,071

$

16,999,691

$

(54,741)

$

4,803,575

$

(8,144,981)

$

(169,531)

$

3,059

$

475,079

$

15,281,472

 

See accompanying notes

 

68

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

WELLTOWER INC. AND SUBSIDIARIES

 

 

 

 

  

Year Ended December 31,

(In thousands)

  

2016

 

2015

 

2014

Operating activities

  

 

 

 

 

 

 

 

 

Net income

  

$

1,082,070

 

$

888,549

 

$

512,300

Adjustments to reconcile net income to

  

 

 

 

 

 

 

 

 

 

net cash provided from (used in) operating activities:

  

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

  

 

901,242

 

 

826,240

 

 

844,130

 

 

Other amortization expenses

  

 

8,822

 

 

4,991

 

 

6,971

 

 

Provision for loan losses

  

 

10,215

 

 

-

 

 

-

 

 

Impairment of assets

  

 

37,207

 

 

2,220

 

 

-

 

 

Stock-based compensation expense

  

 

28,869

 

 

30,844

 

 

32,075

 

 

Loss (gain) on derivatives, net

  

 

(2,448)

 

 

(58,427)

 

 

(1,495)

 

 

Loss (gain) on extinguishment of debt, net

  

 

17,214

 

 

34,677

 

 

9,558

 

 

Loss (income) from unconsolidated entities

 

 

10,357

 

 

21,504

 

 

27,426

 

 

Rental income in excess of cash received

  

 

(83,233)

 

 

(115,756)

 

 

(74,552)

 

 

Amortization related to above (below) market leases, net

  

 

322

 

 

4,018

 

 

739

 

 

Loss (gain) on sales of properties, net

  

 

(364,046)

 

 

(280,387)

 

 

(153,522)

 

 

Other (income) expense, net

 

 

(4,853)

 

 

31,979

 

 

-

 

 

Distributions by unconsolidated entities

  

 

1,065

 

 

637

 

 

9,060

 

 

Increase (decrease) in accrued expenses and other liabilities

  

 

3,929

 

 

(18,099)

 

 

(48,381)

 

 

Decrease (increase) in receivables and other assets

  

 

(18,037)

 

 

478

 

 

(25,639)

Net cash provided from (used in) operating activities

  

 

1,628,695

 

 

1,373,468

 

 

1,138,670

 

 

 

 

  

 

 

 

 

 

 

 

 

Investing activities

  

 

 

 

 

 

 

 

 

 

Cash disbursed for acquisitions

  

 

(2,145,590)

 

 

(3,364,891)

 

 

(2,210,600)

 

Cash disbursed for capital improvements to existing properties

 

 

(219,146)

 

 

(187,752)

 

 

(132,780)

 

Cash disbursed for construction in progress

 

 

(403,131)

 

 

(244,561)

 

 

(197,881)

 

Capitalized interest

  

 

(16,943)

 

 

(8,670)

 

 

(7,150)

 

Investment in real estate loans receivable

  

 

(129,884)

 

 

(598,722)

 

 

(202,207)

 

Other investments, net of payments

  

 

4,760

 

 

(141,994)

 

 

(100,033)

 

Principal collected on real estate loans receivable

  

 

249,552

 

 

131,830

 

 

105,496

 

Contributions to unconsolidated entities

  

 

(101,415)

 

 

(160,323)

 

 

(353,496)

 

Distributions by unconsolidated entities

 

 

119,723

 

 

130,880

 

 

57,183

 

Proceeds from (payments on) derivatives

 

 

108,347

 

 

106,360

 

 

10,269

 

Decrease (increase) in restricted cash

  

 

(125,844)

 

 

29,719

 

 

(6,072)

 

Proceeds from sales of real property

  

 

2,350,068

 

 

823,964

 

 

911,065

Net cash provided from (used in) investing activities

  

 

(309,503)

 

 

(3,484,160)

 

 

(2,126,206)

 

 

 

 

  

 

 

 

 

 

 

 

 

Financing activities

  

 

 

 

 

 

 

 

 

 

Net increase (decrease) under unsecured credit facilities

  

 

(190,000)

 

 

835,000

 

 

(130,000)

 

Proceeds from issuance of senior unsecured notes

  

 

693,560

 

 

1,451,434

 

 

773,992

 

Payments to extinguish senior unsecured notes

  

 

(865,863)

 

 

(558,830)

 

 

(365,188)

 

Net proceeds from the issuance of secured debt

  

 

460,015

 

 

228,685

 

 

109,503

 

Payments on secured debt

  

 

(563,759)

 

 

(573,390)

 

 

(341,839)

 

Net proceeds from the issuance of common stock

  

 

534,194

 

 

1,755,722

 

 

2,343,868

 

Decrease (increase) in deferred loan expenses

  

 

(22,196)

 

 

(11,513)

 

 

(16,782)

 

Contributions by noncontrolling interests(1)

  

 

148,666

 

 

173,018

 

 

9,962

 

Distributions to noncontrolling interests(1)

  

 

(134,578)

 

 

(50,877)

 

 

(43,691)

 

Acquisitions of noncontrolling interests

 

 

-

 

 

(5,663)

 

 

(1,175)

 

Cash distributions to stockholders

  

 

(1,298,925)

 

 

(1,210,133)

 

 

(1,035,069)

 

Other financing activities

 

 

(1,562)

 

 

(27,004)

 

 

(409)

Net cash provided from (used in) financing activities

  

 

(1,240,448)

 

 

2,006,449

 

 

1,303,172

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign currency translation on cash and cash equivalents

 

 

(20,274)

 

 

(8,575)

 

 

(690)

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

  

 

58,470

 

 

(112,818)

 

 

314,946

Cash and cash equivalents at beginning of period

  

 

360,908

 

 

473,726

 

 

158,780

Cash and cash equivalents at end of period

  

$

419,378

 

$

360,908

 

$

473,726

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

 

Interest paid

 

$

541,545

 

$

492,771

 

$

504,165

 

Income taxes paid

 

 

8,011

 

 

12,214

 

 

18,548

 

(1)      Includes amounts attributable to redeemable noncontrolling interests.

 

See accompanying notes.

69

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1. Business

 

     Welltower Inc., an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure.  The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience.  WelltowerTM, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.  Founded in 1970, we were the first REIT to invest exclusively in health care facilities.

 

2. Accounting Policies and Related Matters

Principles of Consolidation

     The consolidated financial statements include the accounts of our wholly-owned subsidiaries and joint venture (“JV”) entities that we control, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation. At inception of JV transactions, we identify entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary.  Accounting Standards Codification Topic 810, Consolidations (“ASC 810”), requires enterprises to perform a qualitative approach to determining whether or not a VIE will need to be consolidated on a continuous basis. This evaluation is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance. For investments in JVs, GAAP may preclude consolidation by the sole general partner in certain circumstances based on the type of rights held by the limited partner(s).  We assess the limited partners’ rights and their impact on our consolidation conclusions, and we reassess if there is a change to the terms or in the exercisability of the rights of the limited partners, the sole general partner increases or decreases its ownership of limited partnership interests, or there is an increase or decrease in the number of outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited liability companies.

Use of Estimates

     The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition

     Revenue is recorded in accordance with U.S. GAAP, which requires that revenue be recognized after four basic criteria are met. These four criteria include persuasive evidence of an arrangement, the rendering of service, fixed and determinable income and reasonably assured collectability. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Substantially all of our operating leases contain escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.  Leases in our outpatient medical portfolio typically include some form of operating expense reimbursement by the tenant.  Certain payments made to operators are treated as lease incentives and amortized as a reduction of revenue over the lease term.  We recognize resident fees and services, other than move-in fees, monthly as services are provided.  Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days’ notice.

Cash and Cash Equivalents

     Cash and cash equivalents consist of all highly liquid investments with an original maturity of three months or less.

Restricted Cash

     Restricted cash primarily consists of amounts held by lenders to provide future payments for real estate taxes, insurance, tenant and capital improvements, amounts held in escrow relating to acquisitions we are entitled to receive over a period of time as outlined in the escrow agreement and net proceeds from property sales that were executed as tax-deferred dispositions.  At December 31, 2016, $138,281,000 of sales proceeds is on deposit in an Internal Revenue Code Section 1031 exchange escrow account with a qualified intermediary. 

Deferred Loan Expenses

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WELLTOWER INC.

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     Deferred loan expenses are costs incurred by us in connection with the issuance, assumption and amendments of debt arrangements. Deferred loan expenses related to debt instruments, excluding the primary unsecured credit facility, are recorded as a reduction of the related debt liability.  Deferred loan expenses related to the primary unsecured credit facility are included in other assets.  We amortize these costs over the term of the debt using the straight-line method, which approximates the effective interest method.

Investments in Unconsolidated Entities

     Investments in entities that we do not consolidate but have the ability to exercise significant influence over operating and financial policies are reported under the equity method of accounting.  Under the equity method, our share of the investee’s earnings or losses is included in our consolidated results of operations. The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest inclusive of transaction costs.  To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity.  We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded.

Marketable Securities

     We classify marketable securities as available-for-sale.  These securities are carried at their fair value with unrealized gains and losses recognized in stockholders’ equity as a component of accumulated other comprehensive income (loss).  When we determine declines in fair value of marketable securities are other-than-temporary, a loss is recognized in earnings.

Redeemable Noncontrolling Interests

     Certain noncontrolling interests are redeemable at fair value.  Accordingly, we record the carrying amount of the noncontrolling interests at the greater of (i) the initial carrying amount, increased or decreased for the noncontrolling interest’s share of net income or loss and its share of other comprehensive income or loss and dividends or (ii) the redemption value.  If it is probable that the interests will be redeemed in the future, we accrete the carrying value to the redemption value over the period until expected redemption, currently a weighted-average period of approximately four years.  In accordance with ASC 810, the redeemable noncontrolling interests are classified outside of permanent equity, as a mezzanine item, in the balance sheet.  At December 31, 2016, the current redemption value of redeemable noncontrolling interests exceeded the carrying value of $398,433,000 by $70,818,000.

     During the year ended December 31, 2016, we determined that an immaterial portion of our noncontrolling interests related to a 2015 transaction was misclassified in permanent equity rather than temporary equity based on a redemption feature of the partnership agreement.  We have corrected the $114,714,000 misclassification by recording the change in the consolidated statement of equity for the year ended December 31, 2016.

     During 2014 and 2015, we entered into DownREIT partnerships which give a real estate seller the ability to exchange its property on a tax deferred basis for equity membership interests (“OP units”).  The OP units may be redeemed any time following the first anniversary of the date of issuance at the election of the holders for one share of our common stock per unit or, at our option, cash.

Real Property Owned

     Real property developed by us is recorded at cost, including the capitalization of construction period interest. Expenditures for repairs and maintenance are expensed as incurred.  Property acquisitions are accounted for as business combinations where we measure the assets acquired, liabilities (including assumed debt and contingencies) and any noncontrolling interests at their fair values on the acquisition date.  The cost of real property acquired, which represents substantially all of the purchase price, is allocated to net tangible and identifiable intangible assets based on their respective fair values. These properties are depreciated on a straight-line basis over their estimated useful lives which range from 15 to 40 years for buildings and 5 to 15 years for improvements. Tangible assets primarily consist of land, buildings and improvements, including those related to capital leases.  We consider costs incurred in conjunction with re-leasing properties, including tenant improvements and lease commissions, to represent the acquisition of productive assets and, accordingly, such costs are reflected as investment activities in our statement of cash flows.

     The remaining purchase price is allocated among identifiable intangible assets primarily consisting of the above or below market component of in-place leases and the value associated with the presence of in-place tenants or residents.  The value allocable to the above or below market component of the acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above market leases are included in acquired lease intangibles and below market leases are included in other liabilities in the balance sheet and are amortized to rental income over the remaining terms of the respective leases.

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WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

     The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values for in-place tenants based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors.  The total amount of other intangible assets acquired is further allocated to in-place lease values for in-place residents with such value representing (i) value associated with lost revenue related to tenant reimbursable operating costs that would be incurred in an assumed re-leasing period, and (ii) value associated with lost rental revenue from existing leases during an assumed re-leasing period.  This intangible asset will be amortized over the remaining life of the lease.

     The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if facts and circumstances suggest that the assets may be impaired or that the depreciable life may need to be changed. We consider external factors relating to each asset and the existence of a master lease which may link the cash flows of an individual asset to a larger portfolio of assets leased to the same tenant. If these factors and the projected undiscounted cash flows of the asset over the remaining depreciation period indicate that the asset will not be recoverable, the carrying value is reduced to the estimated fair market value.  In addition, we are exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health care industries. A downturn in the real estate industry could adversely affect the value of our properties and our ability to sell properties for a price or on terms acceptable to us.

Capitalization of Construction Period Interest

     We capitalize interest costs associated with funds used for the construction of properties owned directly by us. The amount capitalized is based upon the balance outstanding during the construction period using the rate of interest which approximates our cost of financing. Our interest expense reflected in the consolidated statements of comprehensive income has been reduced by the amounts capitalized.

Gain on Sale of Assets

     We recognize sales of assets only upon the closing of the transaction with the purchaser. Payments received from purchasers prior to closing are recorded as deposits and classified as other assets on our consolidated balance sheets. Gains on assets sold are recognized using the full accrual method upon closing when (i) the collectability of the sales price is reasonably assured, (ii) we are not obligated to perform significant activities after the sale to earn the profit, (iii) we have received adequate initial investment from the purchaser and (iv) other profit recognition criteria have been satisfied. Gains may be deferred in whole or in part until the sales satisfy the requirements of gain recognition on sales of real estate.

Real Estate Loans Receivable

     Real estate loans receivable consist of mortgage loans and other real estate loans. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risks. The loans are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in, the related properties, corporate guaranties and/or personal guaranties.

Allowance for Losses on Loans Receivable

     The allowance for losses on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the allowance is based on a quarterly evaluation of these loans, including general economic conditions and estimated collectability of loan payments. We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and value of the underlying collateral. If such factors indicate that there is greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required. A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the original loan agreement. Consistent with this definition, all loans on non-accrual are deemed impaired. To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to full accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance.  Any loans with collectability concerns are subjected to a projected payoff valuation.  The valuation is based on the expected future cash flows and/or the estimated fair value of the underlying collateral.  The valuation is compared to the outstanding balance to determine the reserve needed for each loan.  We may base our valuation on a loan’s observable market price, if any, or the fair value of collateral, net of sales costs, if the repayment of the loan is expected to be provided solely by the collateral.

Goodwill

    We account for goodwill in accordance with U.S. GAAP. Goodwill is tested annually for impairment and is tested for impairment

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more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill.  We have not had any goodwill impairments.

 Fair Value of Derivative Instruments

     Derivatives are recorded at fair value on the balance sheet as assets or liabilities.  The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments.  Fair values of our derivatives are estimated by pricing models that consider the forward yield curves and discount rates.  The fair value of our forward exchange contracts are estimated by pricing models that consider foreign currency spot rates, forward trade rates and discount rates.  Such amounts and the recognition of such amounts are subject to significant estimates that may change in the future. See Note 11 for additional information.

Federal Income Tax

    We have elected to be treated as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our first taxable year, and made no provision for federal income tax purposes prior to our acquisition of our “taxable REIT subsidiaries.” As a result of these as well as subsequent acquisitions, we now record income tax expense or benefit with respect to certain of our entities that are taxed as taxable REIT subsidiaries under provisions similar to those applicable to regular corporations and not under the REIT provisions. We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Under this method, we determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes a change in our judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes a change in our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur.  See Note 18 for additional information.

Foreign Currency

    Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. We translate the results of operations of our foreign subsidiaries into U.S. dollars using average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the period. We record resulting currency translation adjustments in accumulated other comprehensive income, a component of stockholders’ equity, on our consolidated balance sheets. We record transaction gains and losses in our consolidated statements of comprehensive income.

Earnings Per Share

     Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding for the period adjusted for non-vested shares of restricted stock. The computation of diluted earnings per share is similar to basic earnings per share, except that the number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

Reclassifications

     Certain amounts in prior years have been reclassified to conform to current year presentation.

Immaterial Error Correction

          During the year ended December 31, 2016, we identified and corrected an immaterial mathematical error in the Consolidated Statement of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013. The error affected only the financial statement line item of “total comprehensive income attributable to stockholders” in the Consolidated Statement of Comprehensive Income.  Total comprehensive income and total accumulated comprehensive income for all periods presented were not impacted.  Additionally, no other line items within any of the other financial statements and none of the footnotes were impacted. The error resulted in an understatement of total comprehensive income attributable to stockholders of $62,332,000, $29,356,000 and $26,534,000 for the years ended December 31, 2015, 2014 and 2013, respectively. See the Consolidated Statement of Comprehensive Income for corrected total comprehensive income attributable to stockholders.

New Accounting Standards

     In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”).  The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer

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WELLTOWER INC.

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of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services.  ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted beginning after December 15, 2016.  A reporting entity may apply the new standard using either a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or a full retrospective approach.  We are currently evaluating the impact of the adoption on our consolidated financial statements and have not yet determined the method by which we will adopt the standard.  A significant source of revenue for the Company is generated through leasing arrangements, which are specifically excluded from the new standard.  We expect that the new standard will affect our accounting policies related to non-lease revenue, including certain fees in our RIDEA joint ventures, common area maintenance in our outpatient medical properties and real estate sales.  Under 2014-09, revenue recognition for real estate sales is mainly based on the transfer of control versus current guidance of continuing involvement.  We expect that the new guidance will result in more transactions qualifying as sales of real estate and being recognized at an earlier date than under the current guidance.

     In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” (“ASU 2015-02”), which makes certain changes to both the variable interest model and the voting interest model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination.  We adopted ASU 2015-02 on January 1, 2016.  This guidance did not have a significant impact on our consolidated financial statements.

     In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”) to simplify the accounting for business combinations, specifically as it relates to measurement-period adjustments.  Acquiring entities in a business combination must recognize measurement-period adjustments in the reporting period in which the adjustment amounts are determined.  Also, ASU 2015-16 requires entities to present separately on the face of the income statement (or disclose in the notes to the financial statements) the portion of the amount recorded in the current period earnings, by line item, that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.  We adopted ASU 2015-16 on January 1, 2016.  This guidance did not have a significant impact on our consolidated financial statements.

     In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,” which will require entities to measure their investments at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception.  The practicability exception will be available for equity investments that do not have readily determinable fair values.  ASU 2016-01 is effective for fiscal years and interim periods within those years, beginning after December 15, 2017.  We are currently evaluating the impact that the standard will have on our consolidated financial statements.

     In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize assets and liabilities on their balance sheet related to the rights and obligations created by most leases, while continuing to recognize expenses on their income statements over the lease term.  It will also require disclosures designed to give financial statement users information regarding amount, timing, and uncertainty of cash flows arising from leases.  ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted.  Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements.  We are currently evaluating the impact of this guidance on our consolidated financial statements.  We believe that the adoption of this standard will likely have a material impact to our consolidated balance sheet for the recognition of certain operating leases as right-of-use assets and lease liabilities.  Our operating lease obligations are described in Note 12 of the consolidated financial statements.  We are in the process of analyzing our lease portfolio and evaluating systems to comply with the standard’s retrospective adoption requirements.

     In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting”.  This standard simplifies the accounting treatment for excess tax benefits and deficiencies, forfeitures, and cash flow considerations related to share-based compensation.  ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted.  We are currently evaluating the impact of the standard; however, we do not expect its adoption to have a significant impact on our consolidated financial statements.

     In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments”.  This standard requires a new forward-looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments.  ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted for fiscal years beginning after December 15, 2018.  We are currently evaluating the impact that the standard will have on our consolidated financial statements.

     In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business”.  This standard changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business.  ASU 2017-01 is

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effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted.  A reporting entity must apply ASU 2017-01 using a prospective approach.  Upon adoption, we expect that the majority of our real estate acquisitions will be deemed asset acquisitions rather than business combinations.  We will record identifiable assets acquired, liabilities assumed and any noncontrolling interests associated with any asset acquisitions at cost on a relative fair value basis and will capitalize transaction costs.  Furthermore, contingent considerations associated with asset acquisitions will be recorded when the contingency is resolved.

 

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.  Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries.  See Note 2 for information regarding our foreign currency policies.  During the year ended December 31, 2016, we finalized our purchase price allocation of certain previously reported acquisitions and there were no material changes from those previously disclosed.

 

     Triple-Net Activity

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2016(1)

 

 

2015

 

 

2014

Land and land improvements  

 

$

 104,754   

 

$

95,835

 

$

141,387

Buildings and improvements  

 

 

 418,633   

 

 

1,061,431

 

 

1,365,638

Acquired lease intangibles  

 

 

 2,876   

 

 

4,408

 

 

19,196

Restricted cash

 

 

-

 

 

6

 

 

-

Receivables and other assets  

 

 

 551   

 

 

194

 

 

4,895

 

Total assets acquired(2)

 

 

 526,814   

 

 

1,161,874

 

 

1,531,116

Secured debt  

 

 

-

 

 

(47,741)

 

 

(130,638)

Senior unsecured notes

 

 

-

 

 

-

 

 

(48,567)

Accrued expenses and other liabilities

 

 

(3,384)

 

 

(2,905)

 

 

(9,067)

 

Total liabilities assumed

 

 

(3,384)

 

 

(50,646)

 

 

(188,272)

Noncontrolling interests

 

 

(26,771)

 

 

(13,465)

 

 

-

Non-cash acquisition related activity(3)

 

 

(51,733)

 

 

(38,355)

 

 

(3,453)

 

Cash disbursed for acquisitions

 

 

444,926

 

 

1,059,408

 

 

1,339,391

Construction in progress additions

 

 

181,084

 

 

143,140

 

 

135,349

Less:  Capitalized interest

 

 

(8,729)

 

 

(5,699)

 

 

(4,582)

          Accruals

    Foreign currency translation

 

 

(3,665)

 

 

(167)

 

 

421

 

    Non-cash related activity

 

 

-

 

 

-

 

 

(14,459)

Cash disbursed for construction in progress

 

 

168,690

 

 

137,274

 

 

116,729

Capital improvements to existing properties

 

 

32,603

 

 

45,293

 

 

18,901

 

Total cash invested in real property, net of cash acquired  

 

$

 646,219   

 

$

1,241,975

 

$

1,475,021

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes acquisitions with an aggregate purchase price of $67,847,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

 

(2) Excludes $682,000, $16,572,000 and $1,382,000 of cash acquired during the years ended December 31, 2016, 2015 and 2014, respectively. 

 

(3)  For the year ended December 31, 2016, primarily relates to $45,044,000 for the acquisition of assets previously financed as real estate loans receivable and $6,630,000 previously financed as an equity investment.  For the year ended December 31, 2015, primarily relates to $23,288,000 for the acquisition of assets previously financed as real estate loans receivable and $6,743,000 previously financed as equity investments.

 

 

 

 

 

 

 

 

 

 

 

  

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WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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. 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2016(1)

 

 

2015

 

 

2014

Land and land improvements  

 

$

 164,653   

 

$

218,581

 

$

57,534

Buildings and improvements  

 

 

 1,518,472   

 

 

2,367,486

 

 

297,314

Acquired lease intangibles  

 

 

 115,643   

 

 

187,512

 

 

12,983

Construction in progress

 

 

-

 

 

-

 

 

27,957

Restricted cash

 

 

216

 

 

11,798

 

 

804

Receivables and other assets  

 

 

 2,462   

 

 

29,501

 

 

9,327

 

Total assets acquired(2)

 

 

 1,801,446   

 

 

2,814,878

 

 

405,919

Secured debt  

 

 

(63,732)

 

 

(871,471)

 

 

(19,834)

Senior unsecured notes

 

 

-

 

 

(24,621)

 

 

-

Accrued expenses and other liabilities

 

 

(23,681)

 

 

(81,778)

 

 

(17,802)

 

Total liabilities assumed

 

 

(87,413)

 

 

(977,870)

 

 

(37,636)

Noncontrolling interests

 

 

(6,007)

 

 

(183,854)

 

 

(482)

Non-cash acquisition related activity(3)

 

 

(47,065)

 

 

-

 

 

-

     Cash disbursed for acquisitions

 

 

1,660,961

 

 

1,653,154

 

 

367,801

Construction in progress additions

 

 

157,845

 

 

44,173

 

 

12,291

Less:  Capitalized interest

 

 

(5,793)

 

 

(1,740)

 

 

(714)

Less:  Foreign currency translation

 

 

(8,500)

 

 

(2,499)

 

 

(2,012)

Cash disbursed for construction in progress

 

 

143,552

 

 

39,934

 

 

9,565

Capital improvements to existing properties

 

 

138,673

 

 

104,308

 

 

86,803

 

Total cash invested in real property, net of cash acquired  

 

$

 1,943,186   

 

$

1,797,396

 

$

464,169

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes an aggregate purchase price of $1,672,961,000 relating to acquisitions for which the allocation of the purchase price consideration is preliminary and subject to change.

 

(2) Excludes $135,000, $30,930,000 and $9,060,000 of cash acquired during the years ended December 31, 2016, 2015 and 2014, respectively.

 

(3) Primarily relates to the acquisition of assets previously financed as an equity investment.

 

 

 

 

 

 

 

 

 

 

 

  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

     Outpatient Medical Activity

 

          Accrued contingent consideration related to certain outpatient medical acquisitions was $0, $0 and $27,374,000 as of December 31, 2016, 2015 and 2014, respectively.  The following is a summary of our outpatient medical real property investment activity for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2016(1)

 

 

2015

 

 

2014

Land and land improvements  

 

$

 5,738   

 

$

223,708

 

$

63,129

Buildings and improvements  

 

 

 46,056   

 

 

614,770

 

 

567,847

Acquired lease intangibles  

 

 

 4,592   

 

 

45,226

 

 

46,661

Receivables and other assets  

 

 

 -     

 

 

939

 

 

-

 

Total assets acquired(2)

 

 

 56,386   

 

 

884,643

 

 

677,637

Secured debt  

 

 

-

 

 

(120,977)

 

 

(66,113)

Accrued expenses and other liabilities

 

 

(1,670)

 

 

(7,777)

 

 

(22,293)

 

Total liabilities assumed

 

 

(1,670)

 

 

(128,754)

 

 

(88,406)

Noncontrolling interests

 

 

-

 

 

(76,535)

 

 

(39,987)

Non-cash acquisition related activity

 

 

 (15,013)(3)

 

 

 (27,025)(4)

 

 

 (45,836)(3)

     Cash disbursed for acquisitions

 

 

39,703

 

 

652,329

 

 

503,408

Construction in progress additions

 

 

113,933

 

 

70,560

 

 

99,878

Less:  Capitalized interest

 

 

(3,723)

 

 

(1,286)

 

 

(1,854)

          Accruals(5)

 

 

(19,321)

 

 

(1,921)

 

 

(26,437)

Cash disbursed for construction in progress

 

 

90,889

 

 

67,353

 

 

71,587

Capital improvements to existing properties

 

 

47,870

 

 

38,151

 

 

27,076

 

Total cash invested in real property, net of cash acquired  

 

$

 178,462   

 

$

757,833

 

$

602,071

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes acquisitions with an aggregate purchase price of $18,784,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

 

(2) Excludes $0, $5,522,000 and $0 of cash acquired during the years ended December 31, 2016, 2015 and 2014, respectively.

 

(3) The non-cash activity relates to the acquisition of assets previously financed as real estate loans.  Please refer to Note 6 for additional information.

 

(4) The non-cash activity relates to the acquisition of a controlling interest in a portfolio of properties that was historically reported as an unconsolidated property investment.

 

(5) Represents non-cash consideration 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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

December 31, 2016

 

December 31, 2015

 

December 31, 2014

 

Development projects:

 

 

 

 

 

 

 

 

 

 

 

Triple-net

 

$

46,094

 

$

104,844

 

$

71,569

 

 

Seniors housing operating

 

 

18,979

 

 

19,869

 

 

-

 

 

Outpatient medical

 

 

108,001

 

 

16,592

 

 

127,290

 

 

Total development projects

 

 

173,074

 

 

141,305

 

 

198,859

 

Expansion projects

 

 

11,363

 

 

38,808

 

 

24,804

Total construction in progress conversions

 

$

184,437

 

$

180,113

 

$

223,663

 

 

 

 

 

 

 

 

 

 

 

 

     At December 31, 2016, 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):

77

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

2017

 

$

1,258,565

2018

 

 

1,243,041

2019

 

 

1,196,065

2020

 

 

1,178,410

2021

 

 

1,126,074

Thereafter

 

 

8,459,291

Totals

 

$

14,461,446

 

 

 

 

 

4. Real Estate Intangibles

 

     The following is a summary of our real estate intangibles, excluding those classified as held for sale, as of the dates indicated (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

December 31, 2015

Assets:

  

 

 

 

 

 

 

In place lease intangibles

  

$

1,252,143

 

$

1,179,537

 

Above market tenant leases

  

 

61,700

 

 

67,529

 

Below market ground leases

  

 

61,628

 

 

80,224

 

Lease commissions

  

 

27,413

 

 

23,295

 

Gross historical cost

  

 

1,402,884

 

 

1,350,585

 

Accumulated amortization

  

 

(966,714)

 

 

(881,096)

 

Net book value

  

$

436,170

 

$

469,489

 

 

  

 

 

 

 

 

 

Weighted-average amortization period in years

  

 

13.7

 

 

13.4

 

 

  

 

 

 

 

 

Liabilities:

  

 

 

 

 

 

 

Below market tenant leases

  

$

89,468

 

$

93,089

 

Above market ground leases

  

 

8,107

 

 

7,907

 

Gross historical cost

  

 

97,575

 

 

100,996

 

Accumulated amortization

  

 

(52,134)

 

 

(46,048)

 

Net book value

  

$

45,441

 

$

54,948

 

 

  

 

 

 

 

 

 

Weighted-average amortization period in years

  

 

15.2

 

 

14.5

 

 

 

 

 

 

 

 

     The following is a summary of real estate intangible amortization for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2016

 

2015

 

2014

Rental income related to above/below market tenant leases, net

 

$

919

 

$

(2,746)

 

$

509

Property operating expenses related to above/below market ground leases, net

 

 

(1,241)

 

 

(1,272)

 

 

(1,248)

Depreciation and amortization related to in place lease intangibles and lease commissions

 

 

(132,141)

 

 

(115,855)

 

 

(214,966)

 

 

 

 

 

 

 

 

 

 

     The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):

78

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

Liabilities

2017

 

$

141,094

 

$

6,544

2018

 

 

78,905

 

 

5,959

2019

 

 

33,228

 

 

5,551

2020

 

 

22,958

 

 

5,074

2021

 

 

19,045

 

 

4,586

Thereafter

 

 

140,940

 

 

17,727

Totals

 

$

436,170

 

$

45,441

 

 

 

 

 

 

 

5. Dispositions, Assets Held for Sale and Discontinued Operations

We periodically sell properties for various reasons, including favorable market conditions, the exercise of tenant purchase options or reduction of concentrations (e.g. property type, operator or geography).  Impairment of assets, as reflected in our consolidated statements of comprehensive income, primarily represents the charges necessary to adjust the carrying values of certain properties to estimated fair values less costs to sell.  The following is a summary of our real property disposition activity for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

December 31, 2016

 

December 31, 2015

 

December 31, 2014

Real property dispositions:

 

 

 

 

 

 

 

 

 

 

Triple-net

 

$

1,773,614

 

$

356,300

 

$

747,720

 

Outpatient medical(1)

 

 

78,786

 

 

181,553

 

 

45,695

 

Land parcels

 

 

-

 

 

5,724

 

 

-

 

Total dispositions

 

 

1,852,400

 

 

543,577

 

 

793,415

Gain (loss) on sales of real property, net

 

 

364,046

 

 

280,387

 

 

153,522

Net other assets/liabilities disposed

 

 

133,622

 

 

-

 

 

(35,872)

Proceeds from real property sales

 

$

2,350,068

 

$

823,964

 

$

911,065

 

 

 

 

 

 

 

 

 

 

 

 

(1) Dispositions occurring in the year ended December 31, 2015 primarily relate to the disposition of an unconsolidated equity investment with Forest City Enterprises.

 

 

 

 

 

 

 

 

 

 

 

During the year ended December 31, 2016, we completed two portfolio dispositions of properties leased to Genesis Healthcare for which we received loans for termination fees relating to the properties sold under the master lease.  At December 31, 2016, $74,445,000 of principal is outstanding on the loans.  The related termination fee income will be deferred and recognized as the principal balance of the loans are repaid.

 

Dispositions and Assets Held for Sale

 

Pursuant to our adoption of ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (ASU 2014-08”), operating results attributable to properties sold subsequent to or classified as held for sale after January 1, 2014 and which do not meet the definition of discontinued operations are no longer reclassified on our Consolidated Statements of Comprehensive Income.  The following represents the activity related to these properties for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

December 31,

 

 

 

 

2016

 

2015

 

2014

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

310,390

 

$

352,615

 

$

401,640

 

Expenses:

 

  

 

 

 

 

 

 

 

 

 

Interest expense

 

  

49,599

 

 

64,741

 

 

80,893

 

 

Property operating expenses

 

  

10,846

 

 

12,117

 

 

14,127

 

 

Provision for depreciation

 

  

68,280

 

 

88,580

 

 

111,593

 

 

Total expenses

 

 

128,725

 

 

165,438

 

 

206,613

 

Income (loss) from real estate dispositions, net

 

$

181,665

 

$

187,177

 

$

195,027

 

 

 

 

 

 

 

 

 

 

 

 

 

  

79

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

6. Real Estate Loans Receivable

     The following is a summary of our real estate loans receivable (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

2016

 

2015

Mortgage loans

 

$

485,735

 

$

635,492

Other real estate loans

 

 

136,893

 

 

184,000

Totals

 

$

622,628

 

$

819,492

 

 

 

 

 

 

 

 

     The following is a summary of our real estate loan activity for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

December 31, 2016

 

December 31, 2015

 

December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outpatient

 

 

 

 

Outpatient

 

 

 

 

Outpatient

 

 

 

 

 

Triple-net

Medical

Totals

 

Triple-net

Medical

Totals

 

Triple-net

Medical

Totals

Advances on real estate loans receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in new loans

 

$

8,445

$

-

$

8,445

 

$

530,497

$

-

$

530,497

 

$

61,730

$

60,902

$

122,632

 

Draws on existing loans

 

 

118,788

 

2,651

 

121,439

 

 

65,614

 

2,611

 

68,225

 

 

59,420

 

20,155

 

79,575

 

Net cash advances on real estate loans

 

 

127,233

 

2,651

 

129,884

 

 

596,111

 

2,611

 

598,722

 

 

121,150

 

81,057

 

202,207

Receipts on real estate loans receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan payoffs

 

 

275,439

 

27,303

 

302,742

 

 

121,778

 

-

 

121,778

 

 

71,004

 

48,258

 

119,262

 

Principal payments on loans

 

 

6,867

 

-

 

6,867

 

 

33,340

 

-

 

33,340

 

 

31,998

 

72

 

32,070

 

   Sub-total

 

 

282,306

 

27,303

 

309,609

 

 

155,118

 

-

 

155,118

 

 

103,002

 

48,330

 

151,332

 

Less: Non-cash activity(1)

 

 

(45,044)

 

(15,013)

 

(60,057)

 

 

(23,288)

 

-

 

(23,288)

 

 

-

 

(45,836)

 

(45,836)

 

Net cash receipts on real estate loans

 

 

237,262

 

12,290

 

249,552

 

 

131,830

 

-

 

131,830

 

 

103,002

 

2,494

 

105,496

Net cash advances (receipts) on real estate loans

 

 

(110,029)

 

(9,639)

 

(119,668)

 

 

464,281

 

2,611

 

466,892

 

 

18,148

 

78,563

 

96,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in balance due to foreign currency translation

 

(14,086)

 

-

 

(14,086)

 

 

(4,281)

 

-

 

(4,281)

 

 

(2,852)

 

-

 

(2,852)

Loan impairments(2)

 

 

-

 

(3,053)

 

(3,053)

 

 

-

 

-

 

-

 

 

-

 

-

 

-

Net change in real estate loans receivable

 

$

(169,159)

$

(27,705)

$

(196,864)

 

$

436,712

$

2,611

$

439,323

 

$

15,296

$

32,727

$

48,023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents an acquisition of assets previously financed as a real estate loan.  Please see Note 3 for additional information.

 

(2) Represents a direct write down of an impaired loan receivable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     The Company restructured two existing real estate loans in the triple-net segment to Genesis Healthcare.  The two existing loans, with a combined principal balance of $317,000,000, were scheduled to mature in 2017 and 2018.  These loans were restructured into four separate loans effective October 1, 2016.  Each loan has a five year term, a 10% interest rate and 25 basis point annual escalator.  We recorded a loan loss charge in the amount of $6,935,000 on one of the loans as the present value of expected future cash flows was less than the carrying value of the loan.  We expect to collect all principal amounts due under the loans. 

     The following is a summary of the allowance for losses on loans receivable for the periods presented (in thousands):

80

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2016

 

2015

 

2014

Balance at beginning of  year

$

-

 

$

-

 

$

-

Provision for loan losses(1)

 

6,935

 

 

-

 

 

-

Change in present value

  

(372)

 

  

-

 

  

-

Balance at end of  year

$

6,563

 

$

-

 

$

-

(1) Excludes direct write down of an impaired loan receivable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following is a summary of our loan impairments (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2016

 

2015

 

2014

Balance of impaired loans at end of  year

 

$

377,549

 

$

-

 

$

21,000

Allowance for loan losses

 

 

6,563

 

 

-

 

 

-

Balance of impaired loans not reserved

 

$

370,986

 

$

-

 

$

21,000

Average impaired loans for the year

 

$

188,775

 

$

10,500

 

$

10,750

Interest recognized on impaired loans(1)

 

 

8,707

 

 

-

 

 

757

 

 

 

 

 

 

 

 

 

 

 

(1) Represents interest recognized in period since loans were identified as impaired.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7. Investments in Unconsolidated Entities

 

     We participate in a number of joint ventures, which generally invest in seniors housing and health care real estate.  The results of operations for these properties have been included in our consolidated results of operations from the date of acquisition by the joint ventures and are reflected in our Consolidated Statements of Comprehensive Income as income or loss from unconsolidated entities.  The following is a summary of our investments in unconsolidated entities (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

Percentage Ownership(1)

 

December 31, 2016

 

December 31, 2015

 

Triple-net

10% to 49%

 

$

27,005

 

$

36,351

 

Seniors housing operating

10% to 50%

 

 

407,172

 

 

499,537

 

Outpatient medical

43%

 

 

22,961

 

 

6,393

 

Total

 

 

$

457,138

 

$

542,281

 

(1) Excludes ownership of in-substance real estate.

 

 

 

 

 

 

 

 

 

 

     At December 31, 2016, the aggregate unamortized basis difference of our joint venture investments of $149,147,000 is primarily attributable to the difference between the amount for which we purchased our interest in the entity, including transaction costs, and the historical carrying value of the net assets of the entity.  This difference will be amortized over the remaining useful life of the related properties and included in the reported amount of income from unconsolidated entities.

81

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

8. Credit Concentration

     We use net operating income from continuing operations (“NOI”) as our credit concentration metric.  See Note 17 for additional information and reconciliation.  The following table summarizes certain information about our credit concentration for the year ended December 31, 2016, excluding our share of NOI in unconsolidated entities (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

Total

 

Percent of

Concentration by relationship:(1)

 

Properties

 

NOI

 

NOI(2)

 

Genesis Healthcare

 

86

 

$

373,577

 

16%

 

Sunrise Senior Living(3)

 

152

 

 

308,771

 

13%

 

Revera

 

98

 

 

153,712

 

6%

 

Brookdale Senior Living

 

148

 

 

151,337

 

6%

 

Benchmark Senior Living

 

48

 

 

96,958

 

4%

 

Remaining portfolio

 

781

 

 

1,319,822

 

55%

 

Totals

 

1,313

 

$

2,404,177

 

100%

 

 

 

 

 

 

 

 

 

 

(1) Genesis Healthcare is in our triple-net segment. Sunrise Senior Living and Revera are in our seniors housing operating segment.  Brookdale Senior Living and Benchmark Senior Living are in both our triple-net and seniors housing operating segments.

 

(2) Investments with our top five relationships comprised 46% of total NOI in 2015.

 

(3) Revera owns a controlling interest in Sunrise Senior Living. For the year ended December 31, 2016, we recognized $998,783,000 of revenue from Sunrise Senior Living.

 

 

 

 

 

 

 

 

 

9. Borrowings Under Credit Facilities and Related Items

     At December 31, 2016, we had a primary unsecured credit facility with a consortium of 29 banks that includes a $3,000,000,000 unsecured revolving credit facility, a $500,000,000 unsecured term credit facility and a $250,000,000 Canadian-denominated unsecured term credit facility.  We have an option, through an accordion feature, to upsize the unsecured revolving credit facility and the $500,000,000 unsecured term credit facility by up to an additional $1,000,000,000, in the aggregate, and the $250,000,000 Canadian-denominated unsecured term credit facility by up to an additional $250,000,000.  The primary unsecured credit facility also allows us to borrow up to $1,000,000,000 in alternate currencies (none outstanding at December 31, 2016).  Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate (1.66% at December 31, 2016).  The applicable margin is based on certain of our debt ratings and was 0.90% at December 31, 2016.  In addition, we pay a facility fee quarterly to each bank based on the bank’s commitment amount.  The facility fee depends on certain of our debt ratings and was 0.15% at December 31, 2016.  The term credit facilities mature on May 13, 2021. The revolving credit facility is scheduled to mature on May 13, 2020 and can be extended for two successive terms of six months each at our option.

     The following information relates to aggregate borrowings under the primary unsecured revolving credit facility for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2016

 

2015

 

2014

Balance outstanding at year end(1)

 

$

645,000

 

$

835,000

 

$

-

Maximum amount outstanding at any month end

 

$

1,560,000

 

$

835,000

 

$

637,000

Average amount outstanding (total of daily

 

  

 

 

  

 

 

  

 

 

principal balances divided by days in period)

 

$

762,896

 

$

452,644

 

$

207,452

Weighted-average interest rate (actual interest

 

 

 

 

 

 

 

 

 

 

expense divided by average borrowings outstanding)

 

 

1.39%

 

 

1.17%

 

 

1.50%

 

 

 

 

 

 

 

 

 

 

 

(1) As of December 31, 2016, letters of credit in the aggregate amount of $41,878,000 have been issued, which reduce the available borrowing capacity on our primary unsecured revolving credit facility.

 

 

 

 

 

 

 

 

 

 

 

10. Senior Unsecured Notes and Secured Debt

We may repurchase, redeem or refinance senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms.   The senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of (1) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (2) any “make-whole” amount due under the terms of the notes in connection with early redemptions.   Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.   At

82

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

December 31, 2016, the annual principal payments due on these debt obligations were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

  

 

 

Senior

 

Secured

 

 

 

  

 

 

Unsecured Notes(1,2)

 

Debt (1,3)

 

Totals

  

2017

 

$

-

 

$

550,620

 

$

550,620

  

2018

 

 

450,000

 

 

697,557

 

 

1,147,557

  

2019

 

 

605,000

 

 

623,753

 

 

1,228,753

  

2020(4)

 

 

673,447

 

 

166,932

 

 

840,379

  

2021(5,6)

 

 

1,136,206

 

 

349,106

 

 

1,485,312

  

Thereafter(7,8,9,10)

 

 

5,395,385

 

 

1,077,098

 

 

6,472,483

  

Totals

 

$

8,260,038

 

$

3,465,066

 

$

11,725,104

  

 

 

 

 

 

 

 

 

 

 

  

(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value adjustments as reflected on the consolidated balance sheet.

  

(2) Annual interest rates range from 1.4% to 6.5%.

  

(3) Annual interest rates range from 1.24% to 7.98%.  Carrying value of the properties securing the debt totaled $6,149,872,000 at December 31, 2016.

  

(4) In November 2015, one of our wholly-owned subsidiaries issued and we guaranteed $300,000,000 of Canadian-denominated 3.35% senior unsecured notes due 2020 (approximately $223,447,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2016).

  

(5) On May 13, 2016, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $186,206,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2016).  The loan matures on May 13, 2021 and bears interest at the Canadian Dealer Offered Rate plus 95 basis points (1.84% at December 31, 2016).

  

(6) On May 13, 2016, we refinanced the funding on a $500,000,000 unsecured term credit facility.  The loan matures on May 13, 2021 and bears interest at LIBOR plus 95 basis points (1.63% at December 31, 2016).

  

(7)  On November 20, 2013, we completed the sale of £550,000,000 (approximately $678,535,000 based on the Sterling/U.S. Dollar exchange rate in effect on December 31, 2016) of 4.8% senior unsecured notes due 2028.

  

(8)  On November 25, 2014, we completed the sale of £500,000,000 (approximately $616,850,000 based on the Sterling/U.S. Dollar exchange rate in effect on December 31, 2016) of 4.5% senior unsecured notes due 2034.

  

(9)  In May 2015, we issued $750,000,000 of 4.0% senior unsecured notes due 2025.  In October 2015, we issued an additional $500,000,000 of these notes under a re-opening of the offer.

  

(10) In March 2016, we issued $700,000,000 of 4.25% senior unsecured notes due 2026. 

 

  

    The following is a summary of our senior unsecured note principal activity during the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

December 31, 2016

 

December 31, 2015

 

December 31, 2014

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 $ 

8,645,758

 

4.237%

 

 $ 

7,817,154

 

4.385%

 

 $ 

7,421,707

 

4.395%

Debt issued

 

705,000

 

4.228%

 

 

1,475,540

 

3.901%

 

 

838,804

 

4.572%

Debt assumed

 

-

 

0.000%

 

 

24,621

 

6.000%

 

 

-

 

0.000%

Debt extinguished

  

(850,000)

 

4.194%

 

  

(300,000)

 

6.200%

 

  

(298,567)

 

5.855%

Debt redeemed

 

-

 

0.000%

 

 

(240,249)

 

3.303%

 

 

(59,143)

 

3.000%

Foreign currency

 

(240,720)

 

4.565%

 

 

(131,308)

 

3.966%

 

 

(85,647)

 

4.222%

Ending balance

 $ 

8,260,038

 

4.245%

 

 $ 

8,645,758

 

4.237%

 

 $ 

7,817,154

 

4.385%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):  

83

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

  

December 31, 2016

 

December 31, 2015

 

December 31, 2014

 

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

Beginning balance

 

$

3,478,207

 

4.440%

 

$

2,941,765

 

4.940%

 

$

3,010,711

 

5.095%

Debt issued

 

 

460,015

 

2.646%

 

 

228,685

 

2.776%

 

 

109,503

 

3.374%

Debt assumed

 

 

60,898

 

4.301%

 

 

1,007,482

 

3.334%

 

 

204,949

 

4.750%

Debt extinguished

 

 

(489,293)

 

5.105%

 

 

(506,326)

 

4.506%

 

 

(279,559)

 

4.824%

Principal payments

 

 

(74,466)

 

4.663%

 

 

(67,064)

 

4.801%

 

 

(62,280)

 

4.930%

Foreign currency

 

 

29,705

 

3.670%

 

 

(126,335)

 

3.834%

 

 

(41,559)

 

3.811%

Ending balance

 

$

3,465,066

 

4.094%

 

$

3,478,207

 

4.440%

 

$

2,941,765

 

4.940%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2016, we were in compliance with all of the covenants under our debt agreements.

 

11. Derivative Instruments

     We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates. We may elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to manage the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates.  In addition, non-U.S. investments expose us to the potential losses associated with adverse changes in foreign currency to U.S. Dollar exchange rates.  We have elected to manage these risks through the use of forward exchange contracts and issuing debt in the foreign currency.

Interest Rate Swap Contracts and Foreign Currency Forward Contracts Designated as Cash Flow Hedges

     For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”), and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings.  Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings.  Approximately $7,650,000 of gains, which are included in accumulated other comprehensive income (“AOCI”), are expected to be reclassified into earnings in the next 12 months.

Foreign Currency Hedges

     For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to U.S. dollar of the instrument is recorded as a cumulative translation adjustment component of OCI.  During the years ended December 31, 2016 and 2015, we settled certain net investment hedges generating cash proceeds of $108,347,000 and $106,360,000, respectively.  The balance of the cumulative translation adjustment will be reclassified to earnings when the hedged investment is sold or substantially liquidated. 

     The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):

 

84

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

December 31, 2016

 

December 31, 2015

Derivatives designated as net investment hedges:

 

 

 

 

Denominated in Canadian Dollars

$

900,000

$

1,175,000

Denominated in Pounds Sterling

£

550,000

£

550,000

 

 

 

 

 

Financial instruments designated as net investment hedges:

 

 

 

 

Denominated in Canadian Dollars

$

250,000

$

250,000

Denominated in Pounds Sterling

£

1,050,000

£

1,050,000

 

 

 

 

 

Derivatives designated as cash flow hedges

 

 

 

 

Denominated in U.S. Dollars

$

57,000

$

57,000

Denominated in Canadian Dollars

$

54,000

$

72,000

Denominated in Pounds Sterling

£

48,000

£

60,000

 

 

 

 

 

Derivative instruments not designated:

 

 

 

 

Denominated in Canadian Dollars

$

37,000

$

47,000

 

 

 

 

 

 

 

 

 

 

     The following presents the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

Location

 

December 31, 2016

 

December 31, 2015

 

December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on forward exchange contracts recognized in income

 

Interest expense

 

$

8,544

 

$

14,474

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) on option exercise(1)

 

Loss (gain) on derivatives, net

 

$

-

 

$

(58,427)

 

$

-

Gain on release of cumulative translation adjustment related to ineffectiveness on net investment hedge

 

Loss (gain) on derivatives, net

 

$

(2,516)

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on forward exchange contracts and term loans designated as net investment hedge recognized in OCI

 

OCI

 

$

357,021

 

$

298,116

 

$

103,140

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) In April 2011, we completed the acquisition of substantially all of the real estate assets of privately-owned Genesis Healthcare Corporation.  In conjunction with this transaction, we received the option to acquire an ownership interest in Genesis Healthcare.  In February 2015, Genesis Healthcare closed on a transaction to merge with Skilled Healthcare Group to become a publicly traded company which required us to record the value of the derivative asset due to the net settlement feature.

 

 

 

 

 

 

 

 

 

 

 

 

 

12. Commitments and Contingencies

     At December 31, 2016, we had twelve outstanding letter of credit obligations totaling $174,799,000 and expiring between 2017 and 2024.  At December 31, 2016, we had outstanding construction in process of $506,091,000 for leased properties and were committed to providing additional funds of approximately $493,972,000 to complete construction. At December 31, 2016, we had contingent purchase obligations totaling $29,127,000. 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.

     We evaluate our leases for operating versus capital lease treatment in accordance with 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

85

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

and have been classified as capital leases.  At December 31, 2016, we had operating lease obligations of $1,105,992,000 relating to certain ground leases and Company office space. Regarding the 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 December 31, 2016, aggregate future minimum rentals to be received under these noncancelable subleases totaled $74,744,000.

     At December 31, 2016, future minimum lease payments due under operating and capital leases are as follows (in thousands):

 

 

 

 

 

 

 

 

 

Operating Leases

 

Capital Leases(1)

2017

 

$

16,939

 

$

4,731

2018

 

 

17,063

 

 

4,678

2019

 

 

17,269

 

 

4,334

2020

 

 

16,810

 

 

4,173

2021

 

 

16,647

 

 

4,173

Thereafter

 

 

1,021,264

 

 

71,747

Totals

 

$

1,105,992

 

$

93,836

 

 

 

 

 

 

 

(1) Amounts above represent principal and interest obligations under capital lease arrangements.  Related assets with a gross value of $167,324,000 and accumulated depreciation of $24,929,000 are recorded in real property.

 

 

 

 

 

 

 

13. Stockholders’ Equity

 

     The following is a summary of our stockholder’s equity capital accounts as of the dates indicated:

 

 

 

 

 

 

 

 

 

December 31, 2016

 

December 31, 2015

Preferred Stock, $1.00 par value:

 

 

 

 

 

Authorized shares

 

50,000,000

 

50,000,000

 

Issued shares

 

25,875,000

 

25,875,000

 

Outstanding shares

 

25,875,000

 

25,875,000

 

 

 

 

 

 

Common Stock, $1.00 par value:

 

 

 

 

 

Authorized shares

 

700,000,000

 

700,000,000

 

Issued shares

 

363,576,924

 

355,594,373

 

Outstanding shares

 

362,602,173

 

354,777,670

 

 

 

 

 

 

     Preferred Stock.  The following is a summary of our preferred stock activity during the periods presented:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2016

 

December 31, 2015

 

December 31, 2014

 

 

 

 

Weighted Avg.

 

 

 

Weighted Avg.

 

 

 

Weighted Avg.

 

 

Shares

 

Dividend Rate

 

Shares

 

Dividend Rate

 

Shares

 

Dividend Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

25,875,000

 

6.500%

 

25,875,000

 

6.500%

 

26,108,236

 

6.496%

Shares converted

 

-

 

0.000%

 

-

 

0.000%

 

(233,236)

 

6.000%

Ending balance

 

25,875,000

 

6.500%

 

25,875,000

 

6.500%

 

25,875,000

 

6.500%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     During the three months ended December 31, 2010, we issued 349,854 shares of 6.00% Series H Cumulative Convertible and Redeemable Preferred Stock in connection with a business combination.  During the years ended December 31, 2013 and 2014, all shares were converted into common stock, leaving zero shares outstanding.

 

     During the three months ended March 31, 2011, we issued 14,375,000 of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock.  These shares have a liquidation value of $50.00 per share.  Dividends are payable quarterly in arrears.  The preferred stock is not redeemable by us.  The preferred shares are convertible, at the holder’s option, into 0.8460 shares of common stock (equal to an initial conversion price of approximately $59.10).

 

     During the three months ended March 31, 2012, we issued 11,500,000 of 6.50% Series J Cumulative Redeemable Preferred Stock.  Dividends are payable quarterly in arrears.  On February 2, 2017, we announced that we will redeem all 11,500,000 shares outstanding

86

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

on March 7, 2017 at a redemption price of $25.00 per share plus accrued and unpaid dividends to, but not including, March 7, 2017.

 

     Common Stock. The following is a summary of our common stock issuances during the periods indicated (dollars in thousands, except per share amounts):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Issued

 

 

Average Price

 

 

Gross Proceeds

 

 

Net Proceeds

 

 

 

 

 

 

 

 

 

 

 

 

June 2014 public issuance

 

16,100,000

 

$

 62.35  

 

$

1,003,835

 

$

968,517

September 2014 public issuance

 

17,825,000

 

 

 63.75  

 

 

1,136,344

 

 

1,095,465

2014 Dividend reinvestment plan issuances

 

4,122,941

 

 

 62.35  

 

 

257,055

 

 

257,055

2014 Option exercises

 

498,549

 

 

 45.79  

 

 

22,831

 

 

22,831

2014 Preferred stock conversions

 

233,236

 

 

 

 

 

-

 

 

-

2014 Stock incentive plans, net of forfeitures

 

188,147

 

 

 

 

 

-

 

 

-

2014 Senior note conversions

 

258,542

 

 

  

 

 

-

 

 

-

2014 Totals

 

39,226,415

 

 

 

 

$

2,420,065

 

$

2,343,868

 

 

 

 

 

 

 

 

 

 

 

 

February 2015 public issuance

 

19,550,000

 

$

 75.50  

 

$

1,476,025

 

$

1,423,935

2015 Dividend reinvestment plan issuances

 

4,024,169

 

 

 67.72  

 

 

272,531

 

 

272,531

2015 Option exercises

 

249,054

 

 

 47.35  

 

 

11,793

 

 

11,793

2015 Equity Shelf Program issuances

 

696,070

 

 

 69.23  

 

 

48,186

 

 

47,463

2015 Stock incentive plans, net of forfeitures

 

137,837

 

 

  

 

 

-

 

 

-

2015 Senior note conversions

 

1,330,474

 

 

 

 

 

-

 

 

-

2015 Totals

 

25,987,604

 

 

 

 

$

1,808,535

 

$

1,755,722

 

 

 

 

 

 

 

 

 

 

 

 

2016 Dividend reinvestment plan issuances

 

4,145,457

 

$

 70.34  

 

$

291,852

 

$

291,571

2016 Option exercises

 

141,405

 

 

 47.13  

 

 

6,664

 

 

6,664

2016 Equity Shelf Program issuances

 

3,134,901

 

 

 75.27  

 

 

238,286

 

 

235,959

2016 Stock incentive plans, net of forfeitures

 

402,740

 

 

  

 

 

-

 

 

-

2016 Totals

 

7,824,503

 

 

 

 

$

536,802

 

$

534,194

 

 

  

 

 

 

 

 

 

 

 

 

     Dividends.  The increase in dividends is primarily attributable to increases in our common shares outstanding as described above.  Please refer to Notes 2 and 18 for information related to federal income tax of dividends.  The following is a summary of our dividend payments (in thousands, except per share amounts):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2016

 

December 31, 2015

 

December 31, 2014

  

 

Per Share

 

Amount

 

Per Share

 

Amount

 

Per Share

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

3.44000

 

$

1,233,519

 

$

3.30000

 

$

1,144,727

 

$

3.18000

 

$

969,661

Series H Preferred Stock

 

 

-

 

 

-

 

 

-

 

 

-

 

 

0.00794

 

 

1

Series I Preferred Stock

 

 

3.25000

 

 

46,719

 

 

3.25000

 

 

46,719

 

 

3.25000

 

 

46,719

Series J Preferred Stock

 

 

1.62510

 

 

18,687

 

 

1.62510

 

 

18,687

 

 

1.62510

 

 

18,688

Totals

 

 

 

 

$

1,298,925

 

 

 

 

$

1,210,133

 

 

 

 

$

1,035,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Accumulated Other Comprehensive Income. The following is a summary of accumulated other comprehensive income/(loss) for the periods presented (in thousands):

87

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrecognized gains (losses) related to:

 

 

 

 

 

 

 Foreign Currency Translation

 

 

Equity Investments

 

 

Actuarial losses

 

 

Cash Flow Hedges

 

 

Total

Balance at December 31, 2015

 

$

(85,484)

 

$

-

 

$

(1,343)

 

$

(1,416)

 

$

(88,243)

Other comprehensive income (loss) before reclassification adjustments

 

  

(90,528)

 

 

5,120

 

 

190

 

 

1,414

 

 

(83,804)

Reclassification amount to net income

 

 

2,516

 

 

-

 

 

-

 

 

-

 

 

2,516

Net current-period other comprehensive income (loss)

 

  

(88,012)

 

 

5,120

 

 

190

 

 

1,414

 

 

(81,288)

Balance at December 31, 2016

 

$

(173,496)

 

$

5,120

 

$

(1,153)

 

$

(2)

 

$

(169,531)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2014

 

$

(74,770)

 

$

-

 

$

(1,589)

 

$

(650)

 

$

(77,009)

Other comprehensive income (loss) before reclassification adjustments

 

  

(10,714)

 

 

-

 

 

246

 

 

(2,626)

 

 

(13,094)

Reclassification amount to net income

 

 

-

 

 

-

 

 

-

 

 

1,860

 

 

1,860

Net current-period other comprehensive income (loss)

 

  

(10,714)

 

 

-

 

 

246

 

 

(766)

 

 

(11,234)

Balance at December 31, 2015

 

$

(85,484)

 

$

-

 

$

(1,343)

 

$

(1,416)

 

$

(88,243)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Other Equity.  Other equity consists of accumulated option compensation expense, which represents the amount of amortized compensation costs related to stock options awarded to employees and directors.

 

14. Stock Incentive Plans

     In May 2016, our shareholders approved the 2016 Long-Term Incentive Plan (“2016 Plan”), which authorizes up to 10,000,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors. Awards granted after May 5, 2016 will be issued out of the 2016 Plan.  The awards granted under the Amended and Restated 2005 Long-Term Incentive Plan continue to vest and options expire ten years from the date of grant.  Our non-employee directors, officers and key employees are eligible to participate in the 2016 Plan. The 2016 Plan allows for the issuance of, among other things, stock options, stock appreciation rights, restricted stock, deferred stock units and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted shares generally range from three to five years. Options expire ten years from the date of grant. 

     Under our long-term incentive plan, certain restricted stock awards are performance based.  We will grant a target number of restricted stock units, with the ultimate award determined by the total shareholder return and operating performance metrics, measured in each case over a measurement period of three years.  One third of the award will vest immediately at the end of the three year performance period, one third will vest a year after the performance period, and the remaining one third will vest two years after the performance period.  Compensation expense for these performance grants is measured based on the probability of achievement of certain performance goals and is recognized over both the performance period and vesting period.  For the portion of the grant for which the award is determined by the operating performance metrics, the estimated compensation cost was based on the grant date closing price and management’s estimate of corporate achievement for the financial metrics.  If the estimated number of performance based restricted stock to be earned changes, an adjustment will be recorded to recognize the accumulated difference between the revised and previous estimates.  For the portion of the grant determined by the total shareholder return, management used a Monte Carlo model to assess the compensation cost.  The expected term represents the period from the grant date to the end of the three-year performance period. 

    The estimated compensation cost for each performance based plan was derived using the assumptions presented in the following table:

 

 

 

Risk Free Rates

 

Volatility(1)

 

Dividend Yield

2015-2017 Program

 

0.16% - 1.16%

 

13.64% - 42.75%

 

4.818%

2016-2018 Program

 

0.40% - 1.07%

 

15.75% - 38.61%

 

5.039%

 

 

 

 

 

 

 

(1) Figures use 50% historical and 50% implied volatility.

 

  

 

     The following table summarizes compensation expense recognized for the periods presented (in thousands):

88

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2016

 

2015

 

2014

Stock options

 

$

266

 

$

698

 

$

912

Restricted stock

 

 

28,603

 

 

30,146

 

 

31,163

 

 

$

28,869

 

$

30,844

 

$

32,075

 

 

 

 

 

 

 

 

 

 

Stock Options

     We have not granted stock options since the year ended December 31, 2012 but some remain outstanding.  As of December 31, 2016, there was no unrecognized compensation expense related to unvested stock options.  Stock options outstanding at December 31, 2016 have an aggregate intrinsic value of $5,553,000.

Restricted Stock

The fair value of the restricted stock is equal to the market price of the Company’s common stock on the date of grant and is amortized over the vesting periods.   As of December 31, 2016, there was $32,830,000 of total unrecognized compensation expense related to unvested restricted stock that is expected to be recognized over a weighted-average period of three years.  The following table summarizes information about non-vested restricted stock incentive awards as of and for the year ended December 31, 2016:

 

 

 

 

 

 

 

 

Restricted Stock

 

 

Number of

 

Weighted-Average

 

 

Shares

 

Grant Date

 

  

(000's)

 

Fair Value

Non-vested at December 31, 2015

  

638

 

$

62.00

Vested

  

(396)

 

 

64.36

Granted

  

785

 

 

59.42

Terminated

  

(40)

 

 

62.64

Non-vested at December 31, 2016

  

987

 

$

58.98

 

 

 

 

 

 

  

89

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

15. Earnings Per Share

     The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2016

 

2015

 

2014

Numerator for basic and diluted earnings per share -

 

 

 

 

 

 

 

 

 

 

net income attributable to common stockholders

 

$

1,012,397

 

$

818,344

 

$

446,745

 

 

 

 

 

 

 

 

 

 

 

Denominator for basic earnings per

 

 

 

 

 

 

 

 

 

 

share: weighted-average shares

 

 

358,275

 

 

348,240

 

 

306,272

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

Employee stock options

 

 

110

 

 

143

 

 

188

 

Non-vested restricted shares

 

 

449

 

 

535

 

 

500

 

Redeemable shares

 

 

1,393

 

 

310

 

 

-

 

Convertible senior unsecured notes

 

 

-

 

 

196

 

 

787

Dilutive potential common shares

 

 

1,952

 

 

1,184

 

 

1,475

Denominator for diluted earnings per

 

 

 

 

 

 

 

 

 

 

share: adjusted-weighted average shares

 

 

360,227

 

 

349,424

 

 

307,747

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

2.83

 

$

2.35

 

$

1.46

Diluted earnings per share

 

$

2.81

 

$

2.34

 

$

1.45

 

 

 

 

 

 

 

 

 

 

 

Stock options outstanding were anti-dilutive for the years ended December 31, 2016, 2015 and 2014.  The Series H Cumulative Convertible and Redeemable Preferred Stock and the Series I Cumulative Convertible Perpetual Preferred Stock were excluded from the calculations as the effect of the conversions also were anti-dilutive.

16. Disclosure about Fair Value of Financial Instruments

 

U.S. GAAP provides authoritative guidance for measuring and disclosing fair value measurements of assets and liabilities.  The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  The guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The guidance describes three levels of inputs that may be used to measure fair value:

·         Level 1 - Quoted prices in active markets for identical assets or liabilities.

·         Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. 

·         Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.

 

Mortgage Loans and Other Real Estate Loans Receivable — The fair value of mortgage loans and other real estate loans receivable is generally estimated by using Level 2 and Level 3 inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. 

 

Cash and Cash Equivalents — The carrying amount approximates fair value.

 

Available-for-sale Equity Investments — Available-for-sale equity investments are recorded at their fair value based on Level 1 publicly available trading prices.

 

Borrowings Under Primary Unsecured Credit Facility — The carrying amount of the primary unsecured credit facility approximates fair value because the borrowings are interest rate adjustable.

 

90

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on Level 1 publicly available trading prices.  The carrying amount of the variable rate senior unsecured notes approximates fair value because they are interest rate adjustable.

 

Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 inputs by discounting the estimated future cash flows using the current rates at which similar loans would be made with similar credit ratings and for the same remaining maturities.  The carrying amount of variable rate secured debt approximates fair value because the borrowings are interest rate adjustable.

 

Foreign Currency Forward Contracts — Foreign currency forward contracts are recorded in other assets or other liabilities on the balance sheet at fair market value.  Fair market value is determined using Level 2 inputs by estimating the future value of the currency pair based on existing exchange rates, comprised of current spot and traded forward points, and calculating a present value of the net amount using a discount factor based on observable traded interest rates.

 

Redeemable OP Unitholder Interests — Our redeemable unitholder interests are recorded on the balance sheet at fair value using Level 2 inputs.  The fair value is measured using the closing price of our common stock, as units may be redeemed at the election of the holder for cash or, at our option, one share of our common stock per unit, subject to adjustment in certain circumstances.

 

The carrying amounts and estimated fair values of our financial instruments are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

December 31, 2015

 

 

 

Carrying

 

Fair

 

Carrying

 

Fair

 

 

 

Amount

 

Value

 

Amount

 

Value

Financial Assets:

 

  

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans receivable

 

$

485,735

 

$

521,773

 

$

635,492

 

$

663,501

 

Other real estate loans receivable

 

  

136,893

 

 

138,050

 

 

184,000

 

 

185,693

 

Available-for-sale equity investments

 

  

27,899

 

 

27,899

 

 

22,779

 

 

22,779

 

Cash and cash equivalents

 

  

419,378

 

 

419,378

 

 

360,908

 

 

360,908

 

Foreign currency forward contracts

 

 

135,561

 

 

135,561

 

 

129,520

 

 

129,520

 

 

 

  

 

 

 

 

 

 

 

 

 

 

Financial Liabilities:

 

  

 

 

 

 

 

 

 

 

 

 

 

Borrowings under unsecured lines of credit arrangements

 

$

645,000

 

$

645,000

 

$

835,000

 

$

835,000

 

Senior unsecured notes

 

  

8,161,619

 

 

8,879,176

 

 

8,548,055

 

 

9,020,529

 

Secured debt

 

  

3,477,699

 

 

3,558,378

 

 

3,509,142

 

 

3,678,564

 

Foreign currency forward contracts

 

 

4,342

 

 

4,342

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable OP unitholder interests

 

$

110,502

 

$

110,502

 

$

112,029

 

$

112,029

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Items Measured at Fair Value on a Recurring Basis

 

The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair value on a recurring basis.  The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.  The following summarizes items measured at fair value on a recurring basis (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements as of December 31, 2016

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Available-for-sale equity investments(1)

 

$

 27,899  

 

$

 27,899  

 

$

 -    

 

$

 -    

Foreign currency forward contracts, net(2)

 

 

 131,219  

 

 

 -    

 

 

 131,219  

 

 

 -    

Redeemable OP unitholder interests

 

 

 110,502  

 

 

 -    

 

 

 110,502  

 

 

 -    

 Totals 

 

$

 269,620  

 

$

 27,899  

 

$

 241,721  

 

$

 -    

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Unrealized gains or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date. During the year ended December 31, 2015, we recognized an other than temporary impairment charge of $35,648,000 on the Genesis Healthcare stock investment.  Also, see Note 11 for details related to the gain on the derivative asset originally recognized.

(2) Please see Note 11 for additional information.

 

 

 

 

 

 

 

 

 

 

 

 

 

Items Measured at Fair Value on a Nonrecurring Basis

 

91

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

In addition to items that are measured at fair value on a recurring basis, we also have assets and liabilities in our balance sheet that are measured at fair value on a nonrecurring basis.  As these assets and liabilities are not measured at fair value on a recurring basis, they are not included in the tables above. Assets, liabilities and noncontrolling interests that are measured at fair value on a nonrecurring basis include those acquired/assumed in business combinations (see Note 3) and asset impairments (see Note 5 for impairments of real property and Note 6 for impairments of loans receivable). We have determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and our assumptions about the use of the assets and settlement of liabilities, as observable inputs are not available. As such, we have determined that each of these fair value measurements generally reside within Level 3 of the fair value hierarchy. We estimate the fair value of real estate and related intangibles using the income approach and unobservable data such as net operating income and estimated capitalization and discount rates.  We also consider local and national industry market data including comparable sales, and commonly engage an external real estate appraiser to assist us in our estimation of fair value.  We estimate the fair value of assets held for sale based on current sales price expectations or, in the absence of such price expectations, Level 3 inputs described above.  We estimate the fair value of secured debt assumed in business combinations using current interest rates at which similar borrowings could be obtained on the transaction date.

 

17. Segment Reporting

     We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our three operating segments: triple-net, seniors housing operating and outpatient medical. During the year ended December 31, 2016, we reclassified four properties previously classified in the triple-net segment to the outpatient medical segment.  In addition, we reclassified interest expense on our foreign-denominated senior notes from the seniors housing operating segment to non-segment.  Accordingly, the segment information provided in this Note has been reclassified to conform to the current presentation for all periods presented.

     Our triple-net properties include long-term/post-acute care facilities, assisted living facilities, independent living/continuing care retirement communities, care homes (United Kingdom), independent support living facilities (Canada), care homes with nursing (United Kingdom) and combinations thereof.  Under the triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties.  Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property.  Our seniors housing operating properties include the seniors housing communities referenced above that are owned and/or operated through RIDEA structures (see Notes 3 and 18).

     Our outpatient medical properties include outpatient medical buildings and, during past years, life science buildings which are aggregated into our outpatient medical reportable segment. Our outpatient medical buildings are typically leased to multiple tenants and generally require a certain level of property management.  During the year ended December 31, 2015, we disposed of our life science investments.

     We evaluate performance based upon NOI of each segment.  We define NOI as total revenues, including tenant reimbursements, less property operating expenses.  We believe NOI provides investors relevant and useful information because it measures the operating performance of our properties at the property level on an unleveraged basis.  We use NOI to make decisions about resource allocations and to assess the property level performance of our properties.

      Non-segment revenue consists mainly of interest income on certain non-real estate investments and other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.

     The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments.  There are no intersegment sales or transfers.

     Summary information for the reportable segments (which excludes unconsolidated entities) during the years ended December 31, 2016, 2015 and 2014 is as follows (in thousands):

  

92

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2016:

 

Triple-net

 

Seniors Housing Operating

 

Outpatient Medical

 

Non-segment / Corporate

 

Total

Rental income

$

1,112,325

$

-

$

536,490

$

-

$

1,648,815

Resident fees and services

 

-

 

2,504,731

 

-

 

-

 

2,504,731

Interest income

 

90,476

 

4,180

 

3,307

 

-

 

97,963

Other income

 

6,059

 

17,085

 

5,568

 

939

 

29,651

Total revenues

 

1,208,860

 

2,525,996

 

545,365

 

939

 

4,281,160

Property operating expenses

 

-

 

1,711,882

 

165,101

 

-

 

1,876,983

Net operating income from continuing operations

 

1,208,860

 

814,114

 

380,264

 

939

 

2,404,177

Interest expense

 

21,370

 

81,853

 

19,087

 

399,035

 

521,345

Loss (gain) on derivatives, net

 

68

 

-

 

-

 

(2,516)

 

(2,448)

Depreciation and amortization

 

297,197

 

415,429

 

188,616

 

-

 

901,242

General and administrative

 

-

 

-

 

-

 

155,241

 

155,241

Transaction costs

 

10,016

 

29,207

 

3,687

 

-

 

42,910

Loss (gain) on extinguishment of debt, net

 

863

 

(88)

 

-

 

16,439

 

17,214

Provision for loan losses

 

6,935

 

-

 

3,280

 

-

 

10,215

Impairment of assets

 

20,169

 

12,403

 

4,635

 

-

 

37,207

Other expenses

 

-

 

-

 

-

 

11,998

 

11,998

Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities

 

852,242

 

275,310

 

160,959

 

(579,258)

 

709,253

Income tax expense

 

(1,087)

 

(3,762)

 

(511)

 

24,488

 

19,128

(Loss) income from unconsolidated entities

 

9,767

 

(20,442)

 

318

 

-

 

(10,357)

Income (loss) from continuing operations

 

860,922

 

251,106

 

160,766

 

(554,770)

 

718,024

Gain (loss) on real estate dispositions, net

 

355,394

 

9,880

 

(1,228)

 

-

 

364,046

Net income (loss)

$

1,216,316

$

260,986

$

159,538

$

(554,770)

$

1,082,070

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

10,713,032

$

12,851,414

$

4,951,538

$

349,200

$

28,865,184

 

 

 

 

 

 

 

 

 

 

 

  

93

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2015:

 

Triple-net

 

Seniors Housing Operating

 

Outpatient Medical

 

Non-segment / Corporate

 

Total

Rental income

$

1,094,827

$

-

$

504,121

$

-

$

1,598,948

Resident fees and services

 

-

 

2,158,031

 

-

 

-

 

2,158,031

Interest income

 

74,108

 

4,180

 

5,853

 

-

 

84,141

Other income

 

6,871

 

6,060

 

4,684

 

1,091

 

18,706

Total revenues

 

1,175,806

 

2,168,271

 

514,658

 

1,091

 

3,859,826

Property operating expenses

 

-

 

1,467,009

 

155,248

 

-

 

1,622,257

Net operating income from continuing operations

 

1,175,806

 

701,262

 

359,410

 

1,091

 

2,237,569

Interest expense

 

28,384

 

70,388

 

27,542

 

365,855

 

492,169

Loss (gain) on derivatives, net

 

(58,427)

 

-

 

-

 

-

 

(58,427)

Depreciation and amortization

 

288,242

 

351,733

 

186,265

 

-

 

826,240

General and administrative

 

-

 

-

 

-

 

147,416

 

147,416

Transaction costs

 

53,195

 

54,966

 

2,765

 

-

 

110,926

Loss (gain) on extinguishment of debt, net

 

10,095

 

(195)

 

-

 

24,777

 

34,677

Impairment of Assets

 

2,220

 

-

 

-

 

-

 

2,220

Other expenses

 

35,648

 

-

 

-

 

10,583

 

46,231

Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities

 

816,449

 

224,370

 

142,838

 

(547,540)

 

636,117

Income tax expense

 

(4,244)

 

986

 

245

 

(3,438)

 

(6,451)

(Loss) income from unconsolidated entities

 

8,260

 

(32,672)

 

2,908

 

-

 

(21,504)

Income (loss) from continuing operations

 

820,465

 

192,684

 

145,991

 

(550,978)

 

608,162

Gain (loss) on real estate dispositions, net

 

86,261

 

-

 

194,126

 

-

 

280,387

Net income (loss)

$

906,726

$

192,684

$

340,117

$

(550,978)

$

888,549

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

12,358,605

$

11,519,902

$

5,060,676

$

84,662

$

29,023,845

 

 

 

 

 

 

 

 

 

 

 

  

94

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2014:

 

Triple-net

 

Seniors Housing Operating

 

Outpatient Medical

 

Non-segment / Corporate

 

Total

Rental income

$

992,638

$

-

$

413,129

$

-

$

1,405,767

Resident fees and services

 

-

 

1,892,237

 

-

 

-

 

1,892,237

Interest income

 

32,255

 

2,119

 

3,293

 

-

 

37,667

Other income

 

2,973

 

3,215

 

1,010

 

677

 

7,875

Total revenues

 

1,027,866

 

1,897,571

 

417,432

 

677

 

3,343,546

Property operating expenses

 

732

 

1,266,308

 

136,318

 

-

 

1,403,358

Net operating income from continuing operations

 

1,027,134

 

631,263

 

281,114

 

677

 

1,940,188

Interest expense

 

32,135

 

64,130

 

31,050

 

353,724

 

481,039

Loss (gain) on derivatives, net

 

(1,770)

 

275

 

-

 

-

 

(1,495)

Depreciation and amortization

 

273,296

 

418,199

 

152,635

 

-

 

844,130

General and administrative

 

-

 

-

 

-

 

142,943

 

142,943

Transaction costs

 

45,146

 

16,880

 

7,512

 

-

 

69,538

Loss (gain) on extinguishment of debt, net

 

98

 

383

 

405

 

8,672

 

9,558

Other expenses

 

8,825

 

1,437

 

-

 

-

 

10,262

Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities

 

669,404

 

129,959

 

89,512

 

(504,662)

 

384,213

Income tax expense

 

6,141

 

(3,047)

 

(1,827)

 

-

 

1,267

(Loss) income from unconsolidated entities

 

5,423

 

(38,204)

 

5,355

 

-

 

(27,426)

Income from continuing operations

 

680,968

 

88,708

 

93,040

 

(504,662)

 

358,054

Income (loss) from discontinued operations

 

7,135

 

-

 

-

 

-

 

7,135

Gain (loss) on real estate dispositions, net

 

146,205

 

-

 

906

 

-

 

147,111

Net income (loss)

$

834,308

$

88,708

$

93,946

$

(504,662)

$

512,300

 

 

 

 

 

 

 

 

 

 

 

     Our portfolio of properties and other investments are located in the United States, the United Kingdom and Canada. Revenues and assets are attributed to the country in which the property is physically located. The following is a summary of geographic information for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2016

 

 

December 31, 2015

 

 

December 31, 2014

Revenues:

 

Amount

%

 

 

Amount

%

 

 

Amount

%

United States

$

3,453,485

80.6%

 

$

3,133,327

81.2%

 

$

2,801,474

83.8%

United Kingdom

 

388,383

9.1%

 

 

407,745

10.6%

 

 

305,275

9.1%

Canada

 

439,292

10.3%

 

 

318,754

8.3%

 

 

236,797

7.1%

Total

$

4,281,160

100.0%

 

$

3,859,826

100.0%

 

$

3,343,546

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

 

 

 

 

December 31, 2016

 

 

December 31, 2015

 

 

 

 

Assets:

 

Amount

%

 

 

Amount

%

 

 

 

 

United States

$

23,572,459

81.7%

 

$

23,513,498

81.0%

 

 

 

 

United Kingdom

 

2,782,489

9.6%

 

 

2,958,509

10.2%

 

 

 

 

Canada

 

2,510,236

8.7%

 

 

2,551,838

8.8%

 

 

 

 

Total

$

28,865,184

100.0%

 

$

29,023,845

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

95

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

18. Income Taxes and Distributions

 

We elected to be taxed as a REIT commencing with our first taxable year.  To qualify as a REIT for federal income tax purposes, at least 90% of taxable income (excluding 100% of net capital gains) must be distributed to stockholders.  REITs that do not distribute a certain amount of current year taxable income are also subject to a 4% federal excise tax. The main differences between net income for federal income tax purposes and financial statement purposes are the recognition of straight-line rent for reporting purposes, basis differences in acquisitions, recording of impairments, differing useful lives and depreciation and amortization methods for real property and the provision for loan losses for reporting purposes versus bad debt expense for tax purposes.

 

Cash distributions paid to common stockholders, for federal income tax purposes, are as follows for the periods presented:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2016

 

 

2015

 

 

2014

Per Share:

 

  

 

 

 

 

 

 

 

 

Ordinary income

 

$

2.5067

 

$

1.9134

 

$

1.7861

 

Qualified dividend

 

 

0.0047

 

 

0.0529

 

 

-

 

Return of capital

 

  

0.0573

 

  

0.0503

 

  

0.8368

 

Long-term capital gains

 

 

0.4593

 

 

0.9352

 

 

0.1638

 

Unrecaptured section 1250 gains

 

  

0.4120

 

  

0.3482

 

  

0.3933

 

Totals

 

$

3.4400

 

$

3.3000

 

$

3.1800

 

 

 

 

 

 

 

 

 

 

 

     Our consolidated provision for income taxes is as follows for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2016

 

 

2015

 

 

2014

Current

 

$

14,944

 

$

10,177

 

$

2,672

Deferred

 

  

(34,072)

 

  

(3,726)

 

  

(3,939)

Totals

 

$

(19,128)

 

$

6,451

 

$

(1,267)

 

 

 

 

 

 

 

 

 

 

      REITs generally are not subject to U.S. federal income taxes on that portion of REIT taxable income or capital gain that is distributed to stockholders.  For the tax year ended December 31, 2016, as a result of acquisitions located in Canada and the United Kingdom, we were subject to foreign income taxes under the respective tax laws of these jurisdictions. 

 

     The provision for income taxes for the year ended December 31, 2016 primarily relates to state taxes, foreign taxes, and taxes based on income generated by entities that are structured as taxable REIT subsidiaries.  For the tax years ended December 31, 2016, 2015 and 2014, the foreign tax provision/(benefit) amount included in the consolidated provision for income taxes was ($3,315,000), $7,385,000 and ($6,069,000), respectively.

 

     A reconciliation of income tax expense, which is computed by applying the federal corporate tax rate for the years ended December 31, 2016, 2015 and 2014, to the income tax provision/(benefit) is as follows for the periods presented (dollars in thousands):

96

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2016

 

 

2015

 

 

2014

Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interests and income taxes

 

$

372,030

 

$

313,250

 

$

178,862

Increase  / (decrease) in valuation allowance(1)

 

 

(2,128)

 

 

13,759

 

 

9,133

Tax at statutory rate on earnings not subject to federal income taxes

 

 

(399,571)

 

 

(319,832)

 

 

(189,070)

Foreign permanent depreciation

 

 

9,205

 

 

7,500

 

 

4,383

Other differences

 

 

1,336

 

 

(8,226)

 

 

(4,575)

Totals

 

$

(19,128)

 

$

6,451

 

$

(1,267)

 

 

 

 

 

 

 

 

 

 

(1) Excluding purchase price accounting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Each TRS and foreign entity subject to income taxes is a tax paying component for purposes of classifying deferred tax assets and liabilities. The tax effects of taxable and deductible temporary differences, as well as tax attributes, are summarized as follows for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2016

 

 

2015

 

 

2014

Investments and property, primarily differences in investment basis, depreciation and amortization, the basis of land assets and the treatment of interests and certain costs

 

$

(7,089)

 

$

(30,564)

 

$

(1,020)

Operating loss and interest deduction carryforwards

 

  

82,469

 

  

75,455

 

  

47,528

Expense accruals and other

 

 

15,978

 

 

6,259

 

 

26,191

Valuation allowance

 

 

(96,838)

 

 

(98,966)

 

 

(85,207)

Totals

 

$

(5,480)

 

$

(47,816)

 

$

(12,508)

 

 

 

 

 

 

 

 

 

 

    We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.  As required under the provisions of ASC 740, we apply the concepts on an entity-by-entity, jurisdiction-by-jurisdiction basis.  With respect to the analysis of certain entities in multiple jurisdictions, a significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2016.  Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. 

 

     On the basis of the evaluations performed as required by the codification, valuation allowances totaling $96,838,000 were recorded on U.S. taxable REIT subsidiaries as well as entities in other jurisdictions to limit the deferred tax assets to the amount that we believe is more likely that not realizable.  However, the amount of the deferred tax asset considered realizable could be adjusted if (i) estimates of future taxable income during the carryforward period are reduced or increased or (ii) objective negative evidence in the form of cumulative losses is no longer present (and additional weight may be given to subjective evidence such as our projections for growth).  The valuation allowance rollforward is summarized as follows for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2016

 

 

2015

 

 

2014

Beginning balance

 

$

98,966

 

$

85,207

 

$

71,955

Additions:

 

 

 

 

 

 

 

 

 

   Purchase price accounting

 

  

-

 

  

-

 

  

4,119

   Expense

 

 

(2,128)

 

 

13,759

 

 

9,133

Ending balance

 

$

96,838

 

$

98,966

 

$

85,207

 

 

 

 

 

 

 

 

 

 

       As a result of certain acquisitions, we are subject to corporate level taxes for any related asset dispositions that may occur during the five-year period immediately after such assets were owned by a C corporation (“built-in gains tax”). The amount of income potentially subject to this special corporate level tax is generally equal to the lesser of (a) the excess of the fair value of the asset over its adjusted tax basis as of the date it became a REIT asset, or (b) the actual amount of gain. Some but not all gains recognized during this period of time could be offset by available net operating losses and capital loss carryforwards.  During the year ended December 31, 2016, we acquired certain additional assets with built-in gains as of the date of acquisition that could be subject to the built-in

97

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

gains tax if disposed of prior to the expiration of the applicable ten-year period.  We have not recorded a deferred tax liability as a result of the potential built-in gains tax based on our intentions with respect to such properties and available tax planning strategies.

 

      Under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), for taxable years beginning after July 30, 2008, the REIT may lease “qualified health care properties” on an arm’s-length basis to a TRS if the property is operated on behalf of such subsidiary by a person who qualifies as an “eligible independent contractor.” Generally, the rent received from the TRS will meet the related party rent exception and will be treated as “rents from real property.” A “qualified health care property” includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients.  We have entered into various joint ventures that were structured under RIDEA.  Resident level rents and related operating expenses for these facilities are reported in the consolidated financial statements and are subject to federal and state income taxes as the operations of such facilities are included in a TRS.  Certain net operating loss carryforwards could be utilized to offset taxable income in future years.

 

     Given the applicable statute of limitations, we generally are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2013 and subsequent years. The statute of limitations may vary in the states in which we own properties or conduct business.  We do not expect to be subject to audit by state taxing authorities for any year prior to the year ended December 31, 2010. We are also subject to audit by the Canada Revenue Agency and provincial authorities generally for periods subsequent to May 2012 related to entities acquired or formed in connection with acquisitions, and by HM Revenue & Customs for periods subsequent to August 2012 related to entities acquired or formed in connection with acquisitions.  

 

      At December 31, 2016, we had a net operating loss (“NOL”) carryforward related to the REIT of $418,739,000.  Due to our uncertainty regarding the realization of certain deferred tax assets, we have not recorded a deferred tax asset related to NOLs generated by the REIT.  These amounts can be used to offset future taxable income (and/or taxable income for prior years if an audit determines that tax is owed), if any. The REIT will be entitled to utilize NOLs and tax credit carryforwards only to the extent that REIT taxable income exceeds our deduction for dividends paid.  The NOL carryforwards will expire through 2035.

 

     At December 31, 2016 and 2015, we had a net operating loss carryforward related to Canadian entities of $104,988,000, and $78,680,000, respectively.  These Canadian losses have a 20-year carryforward period.  At December 31, 2016 and 2015, we had a net operating loss carryforward related to United Kingdom entities of $158,156,000 and $179,598,000, respectively.  These United Kingdom losses do not have a finite carryforward period.

 

19. Retirement Arrangements

 

We have a Supplemental Executive Retirement Plan (“SERP”), a non-qualified defined benefit pension plan, which provides one former executive officer with supplemental deferred retirement benefits. The SERP provides an opportunity for the participant to receive retirement benefits that cannot be paid under our tax-qualified plans because of the restrictions imposed by ERISA and the Internal Revenue Code of 1986, as amended. Benefits are based on compensation and length of service and the SERP is unfunded. Benefit payments are expected to total $4,179,000 during the next three fiscal years. We use a December 31 measurement date for the SERP. The accrued liability on our balance sheet for the SERP was $4,081,000 at December 31, 2016 ($5,474,000 at December 31, 2015).

 

On April 13, 2014, George L. Chapman, formerly the Chairman, Chief Executive Officer and President of the Company, informed the Board of Directors that he wished to retire from the Company, effective immediately.  As a result of Mr. Chapman’s retirement, general and administrative expenses for the year ended December 31, 2014 included charges of $19,688,000 related to: (i) the acceleration of $9,223,000 of deferred compensation for restricted stock; and (ii) consulting, retirement payments and other costs of $10,465,000.

98

 

WELLTOWER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

20. Quarterly Results of Operations (Unaudited)

 

The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2016 and 2015 (in thousands, except per share data). The sum of individual quarterly amounts may not agree to the annual amounts included in the consolidated statements of income due to rounding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2016

 

 

 

1st Quarter

 

2nd Quarter

 

3rd Quarter(1)

 

4th Quarter

Revenues

 

$

1,047,050

 

$

1,076,657

 

$

1,079,133

 

$

1,078,321

Net income (loss) attributable to common stockholders

 

 

148,969

 

 

195,474

 

 

334,910

 

 

333,044

Net income (loss) attributable to common stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.42

 

$

0.55

 

$

0.93

 

$

0.92

 

Diluted

 

 

0.42

 

 

0.54

 

 

0.93

 

 

0.91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2015

 

 

 

1st Quarter

 

2nd Quarter

 

3rd Quarter

 

4th Quarter

Revenues

 

$

894,177

 

$

957,169

 

$

978,997

 

$

1,029,484

Net income attributable to common stockholders

 

 

190,799

 

 

312,573

 

 

182,043

 

 

132,929

Net income attributable to common stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.57

 

$

0.89

 

$

0.52

 

$

0.38

 

Diluted

 

 

0.56

 

 

0.89

 

 

0.52

 

 

0.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The increase in net income and amounts per share are primarily attributable to gains on sales of real estate of $162,351,000 for the third quarter as compared to gains of $1,530,000 for the second quarter.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21. Variable Interest Entities

 

     We have entered into joint ventures to own certain seniors housing and outpatient medical assets which are deemed to be variable interest entities (“VIE”).   We have concluded that we are the primary beneficiary of these VIE’s based on a combination of operational control of the joint venture and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures.  Except for capital contributions associated with the initial joint venture formations, the joint ventures have been and are expected to be funded from the ongoing operations of the underlying properties.  Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIE’s in the aggregate (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

 

December 31, 2015

Assets

 

 

 

 

 

 

 

 

Net real property owned

 

$

989,596 

 

 

$

453,889 

 

Cash and cash equivalents

 

 

10,501 

 

 

 

8,759 

 

Receivables and other assets

 

 

12,102 

 

 

 

8,082 

 

Total assets(1)

 

$

1,012,199 

 

 

$

470,730 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

 

Secured debt

 

$

450,255 

 

 

$

147,021 

 

Accrued expenses and other liabilities

 

 

13,803 

 

 

 

7,732 

 

Redeemable noncontrolling interests

 

 

185,556 

 

 

 

70,090 

 

Total equity

 

 

362,585 

 

 

 

245,887 

 

Total liabilities and equity

 

$

1,012,199 

 

 

$

470,730 

 

 

 

 

 

 

 

 

 

(1) Note that assets of the consolidated variable interest entities can only be used to settle obligations relating to such variable interest entities.  Liabilities of the consolidated variable interest entities represent claims against the specific assets of the variable interest entities.

 

 

 

 

 

 

 

 

 

  

99

 

  

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

Not applicable.

 

Item 9A.  Controls and Procedures

 

Disclosure Controls and Procedures

 

An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.

 

Management’s Report on Internal Control over Financial Reporting

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016 based on the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) in a report entitled Internal Control — Integrated Framework. 

 

The scope of management’s assessment as of December 31, 2016 did not include an assessment of the internal control over financial reporting for certain acquisitions because the business combinations occurred during the year ended December 31, 2016. The acquired businesses represent 4% of total assets at December 31, 2016 and less than 1% of revenues and net operating income for the year then ended. The scope of management’s assessment on internal control over financial reporting for the year ended December 31, 2017 will include the aforementioned acquired operations.

 

Based on this assessment, using the criteria above, management concluded that the Company’s system of internal control over financial reporting was effective as of December 31, 2016.

 

The independent registered public accounting firm of Ernst & Young LLP, as auditors of the Company’s consolidated financial statements, has issued an attestation report on the Company’s internal control over financial reporting.

 

Changes in Internal Control over Financial Reporting

 

No change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended) occurred during the fourth quarter of the one-year period covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

100

 

  

Report of Independent Registered Public Accounting Firm

 

The Board of Directors and Shareholders of Welltower Inc.

 

     We have audited Welltower Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria, 2013 framework). Welltower Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

 

     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

 

     A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

 

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

     As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of certain acquisitions, which are included in the 2016 consolidated financial statements of Welltower Inc. and subsidiaries and aggregate to 4% of total assets as of December 31, 2016 and less than 1% of revenues and net operating income for the year then ended. Our audit of the internal control over financial reporting of Welltower Inc. also did not include an evaluation of the internal control over financial reporting of the aforementioned acquisitions.

 

     In our opinion, Welltower Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the COSO criteria.

 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Welltower Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2016 of Welltower Inc. and subsidiaries and our report dated February 22, 2017 expressed an unqualified opinion thereon.

 

       /s/  Ernst & Young LLP

 

Toledo, Ohio

February 22, 2017

Item 9B. Other Information

     None.

101

 

  

PART III

 

Item 10.  Directors, Executive Officers and Corporate Governance

 

The information required by this Item is incorporated herein by reference to the information under the headings “Election of Directors,” “Corporate Governance,” “Executive Officers,” and “Security Ownership of Directors and Management and Certain Beneficial Owners — Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement, which will be filed with the Securities and Exchange Commission (the “Commission”) prior to May 1, 2017.

 

We have adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees. The code is posted on the Internet at www.welltower.com/investors/governance. Any amendment to, or waivers from, the code that relate to any officer or director of the Company will be promptly disclosed on the Internet at www.welltower.com.

 

In addition, the Board has adopted charters for the Audit, Compensation and Nominating/Corporate Governance Committees. These charters are posted on the Internet at www.welltower.com/investors/governance.

 

The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.

 

Item 11.  Executive Compensation

 

The information required by this Item is incorporated herein by reference to the information under the headings “Executive Compensation” and “Director Compensation” in our definitive proxy statement, which will be filed with the Commission prior to May 1, 2017.

 

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The information required by this Item is incorporated herein by reference to the information under the headings “Security Ownership of Directors and Management and Certain Beneficial Owners” and “Equity Compensation Plan Information” in our definitive proxy statement, which will be filed with the Commission prior to May 1, 2017.

 

Item 13.  Certain Relationships and Related Transactions and Director Independence 

 

The information required by this Item is incorporated herein by reference to the information under the headings “Corporate Governance — Independence and Meetings” and “Security Ownership of Directors and Management and Certain Beneficial Owners — Certain Relationships and Related Transactions” in our definitive proxy statement, which will be filed with the Commission prior to May 1, 2017.

 

Item 14.  Principal Accounting Fees and Services

 

The information required by this Item is incorporated herein by reference to the information under the heading “Ratification of the Appointment of the Independent Registered Public Accounting Firm” in our definitive proxy statement, which will be filed with the Commission prior to May 1, 2017.

102

 

  

PART IV

 

Item 15. Exhibits and Financial Statement Schedules

 

(a) 1.           Our Consolidated Financial Statements are included in Part II, Item 8: 

 

Report of Independent Registered Public Accounting Firm

64

Consolidated Balance Sheets – December 31, 2016 and 2015

65

Consolidated Statements of  Comprehensive Income — Years ended  December 31, 2016, 2015 and  2014

66

Consolidated Statements of  Equity — Years ended  December 31, 2016, 2015 and  2014

68

Consolidated Statements of  Cash Flows — Years ended  December 31, 2016, 2015 and  2014

69

Notes to Consolidated Financial Statements

70

 

     2.           The following Financial Statement Schedules are included in Item 15(c): 

 

                    III – Real Estate and Accumulated Depreciation

                    IV – Mortgage Loans on Real Estate

 

The financial statement schedule required by Item15(a) (Schedule II, Valuation and Qualifying Accounts) is included in Item 8 of this Annual Report on Form 10-K.

 

     3.           Exhibit Index:                                                                                                                                  

 

The information required by this item is set forth on the Exhibit Index that follows the Financial Statement Schedules to this Annual Report on Form 10-K.

 

(b)           Exhibits: 

 

The exhibits listed on the Exhibit Index are either filed with this Form 10-K or incorporated by reference in accordance with Rule 12b-32 of the Securities Exchange Act of 1934.

 

(c)           Financial Statement Schedules:

 

Financial statement schedules are included beginning on page 105.

103

 

  

SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date:  February 22, 2017

                                                                                                                   WELLTOWER INC.

 

                                                                                                                   By: /s/  T homas J. DeRosa                                             

                                                                                                                           Thomas J. DeRosa,

                                                                                                                           Chief Executive Officer and Director

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 22, 2017 by the following persons on behalf of the Registrant and in the capacities indicated.

 

                         /s/  Jeffrey H. Donahue **                         

                                        /s/  Sergio D. Rivera **                             

           Jeffrey H. Donahue, Chairman of the Board            

                                       Sergio D. Rivera, Director                            

 

 

                           /s/  Kenneth J. Bacon **                           

                                      /s/  R. Scott Trumbull **                           

                          Kenneth J. Bacon, Director                              

                                      R. Scott Trumbull, Director                           

 

 

                             /s/  Fred S. Klipsch **                             

                                       /s/  Thomas J. DeRosa **                            

                            Fred S. Klipsch, Director                               

     Thomas J. DeRosa, Chief Executive Officer and Director

 

                                     (Principal Executive Officer)                          

 

 

                        /s/  Geoffrey G. Meyers  **                        

                                          /s/  Scott A. Estes **                               

                        Geoffrey G. Meyers, Director                        

                 Scott A. Estes, Executive Vice President and Chief      

 

                      Financial Officer (Principal Financial Officer)          

 

 

                       /s/  Timothy J. Naughton  **                       

                                   /s/  Paul D. Nungester, Jr.**                        

                       Timothy J. Naughton, Director                       

                   Paul D. Nungester, Jr., Senior Vice President and        

 

                          Controller (Principal Accounting Officer)              

 

 

                           /s/  Sharon M. Oster **                            

**By:             /s/  Thomas J. DeRosa                                                 

                           Sharon M. Oster, Director                           

                              Thomas J. DeRosa, Attorney-in-Fact                   

                           /s/  Judith C. Pelham **                            

 

                           Judith C. Pelham, Director

 

 

 

 

 

  

104

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Welltower Inc.

 

 

Schedule III

 

 

Real Estate and Accumulated Depreciation

 

 

December 31, 2016

 

 

(Dollars in thousands)

 

 

 

Initial Cost to Company

 

 

 

Gross Amount at Which Carried at Close of Period

 

 

 

 

 

 

Description

 

Encumbrances

 

Land

 

Building & Improvements

 

Cost Capitalized Subsequent to Acquisition

 

Land

 

Building & Improvements

 

Accumulated Depreciation(1)

 

Year Acquired

 

Year Built

 

Address

Triple-net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Abilene, TX

$

-

$

950

$

20,987

$

185

$

950

$

21,172

$

1,409

 

2014

 

1998

 

6565 Central Park Boulevard

Abilene, TX

 

-

 

990

 

8,187

 

800

 

990

 

8,987

 

496

 

2014

 

1985

 

1250 East N 10th Street

Aboite Twp, IN

 

-

 

1,770

 

19,930

 

1,601

 

1,770

 

21,531

 

3,483

 

2010

 

2008

 

611 W County Line Rd South

Agawam, MA

 

-

 

880

 

16,112

 

2,134

 

880

 

18,246

 

7,193

 

2002

 

1993

 

1200 Suffield St.

Agawam, MA

 

-

 

1,230

 

13,618

 

593

 

1,230

 

14,211

 

2,393

 

2011

 

1975

 

61 Cooper Street

Agawam, MA

 

-

 

930

 

15,304

 

292

 

930

 

15,596

 

2,524

 

2011

 

1970

 

55 Cooper Street

Agawam, MA

 

-

 

920

 

10,661

 

36

 

920

 

10,697

 

1,826

 

2011

 

1985

 

464 Main Street

Agawam, MA

 

-

 

920

 

10,562

 

45

 

920

 

10,607

 

1,811

 

2011

 

1967

 

65 Cooper Street

Albertville, AL

 

1,956

 

170

 

6,203

 

280

 

176

 

6,477

 

1,423

 

2010

 

1999

 

151 Woodham Dr.

Alexandria, IN

 

-

 

190

 

6,491

 

-

 

190

 

6,491

 

408

 

2014

 

1982

 

1912 South Park Avenue

Ames, IA

 

-

 

330

 

8,870

 

-

 

330

 

8,870

 

1,596

 

2010

 

1999

 

1325 Coconino Rd.

Anderson, SC

 

-

 

710

 

6,290

 

419

 

710

 

6,709

 

3,032

 

2003

 

1986

 

311 Simpson Rd.

Ankeny, IA

 

-

 

1,129

 

10,270

 

-

 

1,129

 

10,270

 

255

 

2016

 

2012

 

1275 SW State Street

Apple Valley, CA

 

10,250

 

480

 

16,639

 

168

 

486

 

16,801

 

3,770

 

2010

 

1999

 

11825 Apple Valley Rd.

Asheboro, NC

 

-

 

290

 

5,032

 

165

 

290

 

5,197

 

1,897

 

2003

 

1998

 

514 Vision Dr.

Asheville, NC

 

-

 

204

 

3,489

 

-

 

204

 

3,489

 

1,697

 

1999

 

1999

 

4 Walden Ridge Dr.

Asheville, NC

 

-

 

280

 

1,955

 

351

 

280

 

2,306

 

932

 

2003

 

1992

 

308 Overlook Rd.

Aspen Hill, MD

 

-

 

-

 

9,008

 

2,394

 

-

 

11,402

 

1,687

 

2011

 

1988

 

3227 Bel Pre Road

Atchison, KS

 

-

 

140

 

5,610

 

8

 

140

 

5,618

 

158

 

2015

 

2001

 

1301 N 4th St.

Atlanta, GA

 

7,294

 

2,058

 

14,914

 

1,143

 

2,080

 

16,035

 

11,207

 

1997

 

1999

 

1460 S Johnson Ferry Rd.

Aurora, OH

 

-

 

1,760

 

14,148

 

106

 

1,760

 

14,254

 

2,517

 

2011

 

2002

 

505 S. Chillicothe Rd

Aurora, CO

 

-

 

2,600

 

5,906

 

7,915

 

2,600

 

13,821

 

5,212

 

2006

 

1988

 

14101 E. Evans Ave.

Aurora, CO

 

-

 

2,440

 

28,172

 

-

 

2,440

 

28,172

 

9,071

 

2006

 

2007

 

14211 E. Evans Ave.

Austin, TX

 

18,076

 

880

 

9,520

 

1,216

 

885

 

10,731

 

5,113

 

1999

 

1998

 

12429 Scofield Farms Dr.

Avon, IN

 

-

 

1,830

 

14,470

 

-

 

1,830

 

14,470

 

2,719

 

2010

 

2004

 

182 S Country RD. 550E

Avon, IN

 

-

 

900

 

19,444

 

-

 

900

 

19,444

 

1,201

 

2014

 

2013

 

10307 E. CR 100 N

Avon Lake, OH

 

-

 

790

 

10,421

 

5,822

 

790

 

16,243

 

2,195

 

2011

 

2001

 

345 Lear Rd.

Ayer, MA

 

-

 

-

 

22,074

 

3

 

-

 

22,077

 

3,464

 

2011

 

1988

 

400 Groton Road

Baldwin City, KS

 

-

 

190

 

4,810

 

40

 

190

 

4,850

 

138

 

2015

 

2000

 

321 Crimson Ave

Bartlesville, OK

 

-

 

100

 

1,380

 

-

 

100

 

1,380

 

763

 

1996

 

1995

 

5420 S.E. Adams Blvd.

Beachwood, OH

 

-

 

1,260

 

23,478

 

-

 

1,260

 

23,478

 

9,511

 

2001

 

1990

 

3800 Park East Drive

Bellingham, WA

 

8,272

 

1,500

 

19,861

 

321

 

1,507

 

20,175

 

4,423

 

2010

 

1996

 

4415 Columbine Dr.

Benbrook, TX

 

-

 

1,550

 

13,553

 

1,148

 

1,550

 

14,701

 

2,065

 

2011

 

1984

 

4242 Bryant Irvin Road

Bend, OR

 

-

 

1,210

 

9,181

 

25

 

1,210

 

9,206

 

410

 

2015

 

1981

 

1801 NE Lotus Drive

Bethel Park, PA

 

-

 

1,700

 

16,007

 

-

 

1,700

 

16,007

 

3,399

 

2007

 

2009

 

5785 Baptist Road

Beverly Hills, CA

 

-

 

6,000

 

13,385

 

-

 

6,000

 

13,385

 

738

 

2014

 

2000

 

220 N Clark Drive

Bexleyheath, UKI

 

-

 

3,750

 

10,807

 

-

 

3,750

 

10,807

 

598

 

2014

 

1996

 

35 West Street

Birmingham, UKG

 

-

 

1,647

 

14,853

 

-

 

1,647

 

14,853

 

674

 

2015

 

2010

 

Clinton Street, Winson Green

Birmingham, UKG

 

-

 

1,591

 

19,092

 

-

 

1,591

 

19,092

 

853

 

2015

 

2010

 

Braymoor Road, Tile Cross

Birmingham, UKG

 

-

 

1,462

 

9,056

 

-

 

1,462

 

9,056

 

417

 

2015

 

2010

 

Clinton Street, Winson Green

Birmingham, UKG

 

-

 

1,184

 

10,085

 

-

 

1,184

 

10,085

 

454

 

2015

 

1997

 

122 Tile Cross Road, Garretts Green

Bloomington, IN

 

-

 

670

 

17,423

 

-

 

670

 

17,423

 

661

 

2015

 

2015

 

363 S. Fieldstone Boulevard

Boardman, OH

 

-

 

1,200

 

12,800

 

-

 

1,200

 

12,800

 

3,447

 

2008

 

2008

 

8049 South Ave.

Bowling Green, KY

 

-

 

3,800

 

26,700

 

149

 

3,800

 

26,849

 

5,751

 

2008

 

1992

 

1300 Campbell Lane

Bradenton, FL

 

-

 

252

 

3,298

 

-

 

252

 

3,298

 

1,838

 

1996

 

1995

 

6101 Pointe W. Blvd.

Bradenton, FL

 

-

 

480

 

9,953

 

-

 

480

 

9,953

 

1,187

 

2012

 

2000

 

2800 60th Avenue West

Braintree, MA

 

-

 

170

 

7,157

 

1,290

 

170

 

8,447

 

8,381

 

1997

 

1968

 

1102 Washington St.

Braintree, UKH

 

-

 

-

 

13,296

 

-

 

-

 

13,296

 

818

 

2014

 

2009

 

Meadow Park Tortoiseshell Way

Brandon, MS

 

-

 

1,220

 

10,241

 

-

 

1,220

 

10,241

 

1,730

 

2010

 

1999

 

140 Castlewoods Blvd

Brecksville, OH

 

-

 

990

 

19,353

 

-

 

990

 

19,353

 

1,185

 

2014

 

2011

 

8757 Brecksville Road

Bremerton, WA

 

-

 

390

 

2,210

 

144

 

390

 

2,354

 

609

 

2006

 

1999

 

3231 Pine Road

Bremerton, WA

 

-

 

830

 

10,420

 

950

 

830

 

11,370

 

1,982

 

2010

 

1984

 

3201 Pine Road NE

Bremerton, WA

 

-

 

590

 

2,899

 

13

 

590

 

2,912

 

221

 

2014

 

1997

 

3210 Rickey Road

Brentwood, UKH

 

47,467

 

8,537

 

45,869

 

-

 

8,537

 

45,869

 

-

 

2016

 

2013

 

London Road

Brick, NJ

 

-

 

1,290

 

25,247

 

660

 

1,290

 

25,907

 

3,649

 

2011

 

2000

 

458 Jack Martin Blvd.

Brick, NJ

 

-

 

1,170

 

17,372

 

1,323

 

1,184

 

18,681

 

3,038

 

2010

 

1998

 

515 Jack Martin Blvd

Brick, NJ

 

-

 

690

 

17,125

 

5,484

 

692

 

22,607

 

2,925

 

2010

 

1999

 

1594 Route 88

Bridgewater, NJ

 

-

 

1,850

 

3,050

 

37

 

1,850

 

3,087

 

1,485

 

2004

 

1970

 

875 Route 202/206 North

Bridgewater, NJ

 

-

 

1,730

 

48,201

 

1,289

 

1,752

 

49,469

 

7,660

 

2010

 

1999

 

2005 Route 22 West

Bridgewater, NJ

 

-

 

1,800

 

31,810

 

552

 

1,800

 

32,362

 

4,524

 

2011

 

2001

 

680 US-202/206 North

Broadview Heights, OH

 

-

 

920

 

12,400

 

2,393

 

920

 

14,793

 

5,414

 

2001

 

1984

 

2801 E. Royalton Rd.

Brookfield, WI

 

-

 

1,300

 

12,830

 

-

 

1,300

 

12,830

 

1,091

 

2012

 

2013

 

1185 Davidson Road

Brooks, AB

 

1,971

 

376

 

4,951

 

164

 

387

 

5,103

 

306

 

2014

 

2000

 

951 Cassils Road West

Brookville, IN

 

-

 

300

 

13,461

 

-

 

300

 

13,461

 

794

 

2014

 

1987

 

11049 State Road 101

Burleson, TX

 

-

 

670

 

13,985

 

345

 

670

 

14,330

 

2,159

 

2011

 

1988

 

300 Huguley Boulevard

Burleson, TX

 

-

 

3,150

 

10,437

 

576

 

3,150

 

11,013

 

738

 

2012

 

2014

 

621 Old Highway 1187

Burlington, NC

 

-

 

280

 

4,297

 

707

 

280

 

5,004

 

1,798

 

2003

 

2000

 

3619 S. Mebane St.

Burlington, NC

 

-

 

460

 

5,467

 

-

 

460

 

5,467

 

2,012

 

2003

 

1997

 

3615 S. Mebane St.

Burlington, NJ

 

-

 

1,700

 

12,554

 

482

 

1,700

 

13,036

 

2,388

 

2011

 

1965

 

115 Sunset Road

Burlington, NJ

 

-

 

1,170

 

19,205

 

172

 

1,170

 

19,377

 

3,012

 

2011

 

1994

 

2305 Rancocas Road

Burlington, WA

 

-

 

3,860

 

31,722

 

84

 

3,860

 

31,805

 

1,518

 

2015

 

2001

 

400 Gilkey Road

Burnaby, BC

 

8,082

 

7,623

 

13,844

 

660

 

7,858

 

14,270

 

869

 

2014

 

2006

 

7195 Canada Way

Calgary, AB

 

16,716

 

2,341

 

42,768

 

1,408

 

2,413

 

44,105

 

2,549

 

2014

 

1971

 

1729-90th Avenue SW

Calgary, AB

 

27,724

 

4,569

 

70,199

 

2,300

 

4,709

 

72,358

 

4,144

 

2014

 

2001

 

500 Midpark Way SE

Canton, MA

 

-

 

820

 

8,201

 

263

 

820

 

8,464

 

5,743

 

2002

 

1993

 

One Meadowbrook Way

Canton, OH

 

-

 

300

 

2,098

 

-

 

300

 

2,098

 

1,016

 

1998

 

1998

 

1119 Perry Dr., N.W.

Cape Coral, FL

 

-

 

530

 

3,281

 

-

 

530

 

3,281

 

1,318

 

2002

 

2000

 

911 Santa Barbara Blvd.

Cape Coral, FL

 

8,716

 

760

 

18,868

 

-

 

760

 

18,868

 

2,273

 

2012

 

2009

 

831 Santa Barbara Boulevard

Cape May Court House, NJ

 

-

 

1,440

 

17,002

 

1,673

 

1,440

 

18,675

 

1,232

 

2014

 

1990

 

144 Magnolia Drive

Carmel, IN

 

-

 

1,700

 

19,491

 

-

 

1,700

 

19,491

 

872

 

2015

 

2015

 

12315 Pennsylvania Street

Carrollton, TX

 

-

 

4,280

 

31,444

 

861

 

4,280

 

32,305

 

2,510

 

2013

 

2010

 

2105 North Josey Lane

Carrollton, TX

 

-

 

-

 

-

 

21,559

 

2,010

 

19,549

 

133

 

2014

 

2016

 

2645 East Trinity Mills Road

Carson City, NV

 

-

 

520

 

8,238

 

250

 

520

 

8,488

 

731

 

2013

 

1997

 

1111 W. College Parkway

Cary, NC

 

-

 

1,500

 

4,350

 

986

 

1,500

 

5,336

 

2,441

 

1998

 

1996

 

111 MacArthur

Castleton, IN

 

-

 

920

 

15,137

 

-

 

920

 

15,137

 

970

 

2014

 

2013

 

8405 Clearvista Lake

Cedar Grove, NJ

 

-

 

2,850

 

27,737

 

20

 

2,850

 

27,757

 

4,438

 

2011

 

1970

 

536 Ridge Road

Centreville, MD(2)

 

-

 

600

 

14,602

 

241

 

600

 

14,843

 

2,402

 

2011

 

1978

 

205 Armstrong Avenue

Chapel Hill, NC

 

-

 

354

 

2,646

 

783

 

354

 

3,429

 

1,348

 

2002

 

1997

 

100 Lanark Rd.

Charles Town, WV

 

-

 

230

 

22,834

 

62

 

230

 

22,896

 

3,471

 

2011

 

1997

 

219 Prospect Ave

Charleston, WV

 

-

 

440

 

17,575

 

304

 

440

 

17,879

 

2,726

 

2011

 

1998

 

1000 Association Drive, North Gate Business Park

Chatham, VA

 

-

 

320

 

14,039

 

-

 

320

 

14,039

 

936

 

2014

 

2009

 

100 Rorer Street

Chelmsford, MA

 

-

 

1,040

 

10,951

 

1,499

 

1,040

 

12,450

 

4,016

 

2003

 

1997

 

4 Technology Dr.

Chester, VA

 

-

 

1,320

 

18,127

 

-

 

1,320

 

18,127

 

1,177

 

2014

 

2009

 

12001 Iron Bridge Road

Chickasha, OK

 

-

 

85

 

1,395

 

-

 

85

 

1,395

 

766

 

1996

 

1996

 

801 Country Club Rd.

Cinnaminson, NJ

 

-

 

860

 

6,663

 

157

 

860

 

6,820

 

1,242

 

2011

 

1965

 

1700 Wynwood Drive

Citrus Heights, CA

 

14,252

 

2,300

 

31,876

 

589

 

2,300

 

32,465

 

7,280

 

2010

 

1997

 

7418 Stock Ranch Rd.

Claremore, OK

 

-

 

155

 

1,427

 

6,130

 

155

 

7,557

 

1,223

 

1996

 

1996

 

1605 N. Hwy. 88

Clarksville, TN

 

-

 

330

 

2,292

 

-

 

330

 

2,292

 

1,104

 

1998

 

1998

 

2183 Memorial Dr.

Clayton, NC

 

-

 

520

 

15,733

 

-

 

520

 

15,733

 

912

 

2014

 

2013

 

84 Johnson Estate Road

Cleburne, TX

 

-

 

520

 

5,369

 

-

 

520

 

5,369

 

1,379

 

2006

 

2007

 

402 S Colonial Drive

Clevedon, UKK

 

-

 

2,838

 

16,927

 

-

 

2,838

 

16,927

 

1,041

 

2014

 

1994

 

18/19 Elton Road

Cloquet, MN

 

-

 

340

 

4,660

 

120

 

340

 

4,780

 

700

 

2011

 

2006

 

705 Horizon Circle

Cobham, UKJ

 

-

 

9,808

 

24,991

 

-

 

9,808

 

24,991

 

2,232

 

2013

 

2013

 

Redhill Road

Colchester, CT

 

-

 

980

 

4,860

 

532

 

980

 

5,392

 

1,061

 

2011

 

1986

 

59 Harrington  Court

Colleyville, TX

 

-

 

1,050

 

17,082

 

-

 

1,050

 

17,082

 

-

 

2016

 

2013

 

8100 Precinct Line Road

Colorado Springs, CO

 

-

 

4,280

 

62,168

 

-

 

4,280

 

62,168

 

2,132

 

2015

 

2008

 

1605 Elm Creek View

Colorado Springs, CO

 

-

 

1,730

 

25,493

 

693

 

1,730

 

26,186

 

396

 

2016

 

2016

 

2818 Grand Vista Circle

Colts Neck, NJ

 

-

 

780

 

14,733

 

1,244

 

1,028

 

15,729

 

2,613

 

2010

 

2002

 

3 Meridian Circle

Columbia, TN

 

-

 

341

 

2,295

 

-

 

341

 

2,295

 

1,112

 

1999

 

1999

 

5011 Trotwood Ave.

Columbia, SC

 

-

 

2,120

 

4,860

 

5,709

 

2,120

 

10,569

 

4,232

 

2003

 

2000

 

731 Polo Rd.

Columbia Heights, MN

 

-

 

825

 

14,175

 

163

 

825

 

14,338

 

1,980

 

2011

 

2009

 

3807 Hart Boulevard

Columbus, IN

 

-

 

610

 

3,190

 

-

 

610

 

3,190

 

588

 

2010

 

1998

 

2564 Foxpointe Dr.

Concord, NC

 

-

 

550

 

3,921

 

55

 

550

 

3,976

 

1,604

 

2003

 

1997

 

2452 Rock Hill Church Rd.

Concord, NH

 

-

 

1,760

 

43,179

 

606

 

1,760

 

43,785

 

6,683

 

2011

 

1994

 

239 Pleasant Street

Concord, NH

 

-

 

720

 

3,041

 

340

 

720

 

3,381

 

643

 

2011

 

1926

 

227 Pleasant Street

Congleton, UKD

 

-

 

2,036

 

5,120

 

-

 

2,036

 

5,120

 

284

 

2014

 

1994

 

Rood Hill

Conroe, TX

 

-

 

980

 

7,771

 

-

 

980

 

7,771

 

1,507

 

2009

 

2010

 

903 Longmire Road

Coppell, TX

 

-

 

1,550

 

8,386

 

46

 

1,550

 

8,432

 

822

 

2012

 

2013

 

1530 East Sandy Lake Road

Coventry, UKG

 

-

 

1,962

 

13,830

 

-

 

1,962

 

13,830

 

646

 

2015

 

2014

 

Banner Lane, Tile Hill

Crawfordsville, IN

 

-

 

720

 

17,239

 

1,426

 

720

 

18,665

 

1,149

 

2014

 

2013

 

517 Concord Road

Crown Point, IN

 

-

 

920

 

20,044

 

-

 

920

 

20,044

 

852

 

2015

 

2015

 

1555 South Main Street

Dallas, OR

 

-

 

410

 

9,427

 

1,000

 

410

 

10,428

 

414

 

2015

 

1972

 

664 SE Jefferson

Danville, VA

 

-

 

410

 

3,954

 

722

 

410

 

4,676

 

1,744

 

2003

 

1998

 

149 Executive Ct.

Danville, VA

 

-

 

240

 

8,436

 

-

 

240

 

8,436

 

558

 

2014

 

1996

 

508 Rison Street

Daphne, AL

 

-

 

2,880

 

8,670

 

192

 

2,880

 

8,862

 

1,119

 

2012

 

2001

 

27440 County Road 13

Dedham, MA

 

-

 

1,360

 

9,830

 

-

 

1,360

 

9,830

 

4,191

 

2002

 

1996

 

10 CareMatrix Dr.

Denton, TX

 

-

 

1,760

 

8,305

 

90

 

1,760

 

8,395

 

1,276

 

2010

 

2011

 

2125 Brinker Rd

Derby, UKF

 

-

 

-

 

-

 

10,542

 

2,282

 

8,260

 

276

 

2014

 

2015

 

Rykneld Road

Dover, DE

 

-

 

600

 

22,266

 

91

 

600

 

22,357

 

3,494

 

2011

 

1984

 

1080 Silver Lake Blvd.

Dresher, PA

 

-

 

2,060

 

40,236

 

997

 

2,083

 

41,210

 

6,361

 

2010

 

2001

 

1405 N. Limekiln Pike

Dundalk, MD(2)

 

-

 

1,770

 

32,047

 

784

 

1,770

 

32,831

 

5,091

 

2011

 

1978

 

7232 German Hill Road

Durham, NC

 

-

 

1,476

 

10,659

 

2,196

 

1,476

 

12,855

 

10,667

 

1997

 

1999

 

4434 Ben Franklin Blvd.

Dyer, IN

 

-

 

1,800

 

25,061

 

-

 

1,800

 

25,061

 

884

 

2015

 

2015

 

1532 Calumet Avenue

Eagan, MN

 

17,000

 

2,260

 

31,643

 

4

 

2,260

 

31,647

 

954

 

2015

 

2004

 

3810 Alder Avenue

East Brunswick, NJ

 

-

 

1,380

 

34,229

 

679

 

1,380

 

34,908

 

4,842

 

2011

 

1998

 

606 Cranbury Rd.

East Norriton, PA

 

-

 

1,200

 

28,129

 

1,387

 

1,262

 

29,454

 

4,582

 

2010

 

1988

 

2101 New Hope St

Eastbourne, UKJ

 

-

 

4,071

 

24,438

 

-

 

4,071

 

24,438

 

1,483

 

2014

 

1999

 

Carew Road

Eden, NC

 

-

 

390

 

4,877

 

-

 

390

 

4,877

 

1,816

 

2003

 

1998

 

314 W. Kings Hwy.

Edmond, OK

 

-

 

410

 

8,388

 

-

 

410

 

8,388

 

1,099

 

2012

 

2001

 

15401 North Pennsylvania Avenue

Edmond, OK

 

-

 

1,810

 

14,849

 

1,106

 

1,810

 

15,955

 

1,048

 

2014

 

1985

 

1225 Lakeshore Drive

Elizabeth City, NC

 

-

 

200

 

2,760

 

2,011

 

200

 

4,771

 

2,040

 

1998

 

1999

 

400 Hastings Lane

Emeryville, CA

 

-

 

2,560

 

57,491

 

561

 

2,560

 

58,052

 

3,683

 

2014

 

2010

 

1440 40th Street

Englewood, NJ

 

-

 

930

 

4,514

 

17

 

930

 

4,531

 

797

 

2011

 

1966

 

333 Grand Avenue

Englishtown, NJ

 

-

 

690

 

12,520

 

1,141

 

768

 

13,583

 

2,270

 

2010

 

1997

 

49 Lasatta Ave

Epsom, UKJ

 

39,189

 

20,159

 

34,803

 

-

 

20,159

 

34,803

 

-

 

2016

 

2014

 

450-458 Reigate Road

Eugene, OR

 

-

 

800

 

5,822

 

35

 

800

 

5,857

 

254

 

2015

 

1990

 

4550 West Amazon Drive

Eureka, KS

 

-

 

50

 

3,950

 

40

 

50

 

3,990

 

111

 

2015

 

1994

 

1820 E River St

Everett, WA

 

-

 

1,400

 

5,476

 

-

 

1,400

 

5,476

 

2,558

 

1999

 

1999

 

2015 Lake Heights Dr.

Fairfield, CA

 

-

 

1,460

 

14,040

 

1,541

 

1,460

 

15,581

 

5,898

 

2002

 

1998

 

3350 Cherry Hills St.

Fairhope, AL

 

-

 

570

 

9,119

 

46

 

570

 

9,165

 

1,152

 

2012

 

1987

 

50 Spring Run Road

Fall River, MA

 

-

 

620

 

5,829

 

4,856

 

620

 

10,685

 

4,960

 

1996

 

1973

 

1748 Highland Ave.

Fanwood, NJ

 

-

 

2,850

 

55,175

 

968

 

2,850

 

56,143

 

7,694

 

2011

 

1982

 

295 South Ave.

Faribault, MN

 

-

 

780

 

11,539

 

50

 

780

 

11,590

 

351

 

2015

 

2003

 

828 1st Street NE

Farnborough, UKJ

 

-

 

2,036

 

5,737

 

-

 

2,036

 

5,737

 

309

 

2014

 

1980

 

Bruntile Close, Reading Road

Fayetteville, PA

 

-

 

2,150

 

32,951

 

1,802

 

2,150

 

34,753

 

1,267

 

2015

 

1991

 

6375 Chambersburg Road

Fayetteville, NY

 

-

 

410

 

3,962

 

500

 

410

 

4,462

 

1,759

 

2001

 

1997

 

5125 Highbridge St.

Findlay, OH

 

-

 

200

 

1,800

 

-

 

200

 

1,800

 

933

 

1997

 

1997

 

725 Fox Run Rd.

Fishers, IN

 

-

 

1,500

 

14,500

 

-

 

1,500

 

14,500

 

2,724

 

2010

 

2000

 

9745 Olympia Dr.

Florence, NJ

 

-

 

300

 

2,978

 

-

 

300

 

2,978

 

1,191

 

2002

 

1999

 

901 Broad St.

Florence, AL

 

6,879

 

353

 

13,049

 

200

 

385

 

13,217

 

2,888

 

2010

 

1999

 

3275 County Road 47

Flourtown, PA

 

-

 

1,800

 

14,830

 

236

 

1,800

 

15,066

 

2,436

 

2011

 

1908

 

350 Haws Lane

Flower Mound, TX

 

-

 

1,800

 

8,414

 

37

 

1,800

 

8,451

 

1,014

 

2011

 

2012

 

4141 Long Prairie Road

Folsom, CA

 

-

 

-

 

33,600

 

-

 

1,582

 

32,018

 

3,087

 

2013

 

2009

 

330 Montrose Drive

Forest City, NC

 

-

 

320

 

4,497

 

-

 

320

 

4,497

 

1,691

 

2003

 

1999

 

493 Piney Ridge Rd.

Fort Ashby, WV

 

-

 

330

 

19,566

 

128

 

330

 

19,694

 

2,983

 

2011

 

1980

 

Diane Drive, Box 686

Fort Collins, CO

 

-

 

3,680

 

58,608

 

-

 

3,680

 

58,608

 

2,003

 

2015

 

2007

 

4750 Pleasant Oak Drive

Fort Wayne, IN

 

-

 

170

 

8,232

 

-

 

170

 

8,232

 

2,167

 

2006

 

2006

 

2626 Fairfield Ave.

Fort Worth, TX

 

-

 

450

 

13,615

 

5,086

 

450

 

18,701

 

3,016

 

2010

 

2011

 

425 Alabama Ave.

Franconia, NH

 

-

 

360

 

11,320

 

70

 

360

 

11,390

 

1,805

 

2011

 

1971

 

93 Main Street

Fredericksburg, VA

 

-

 

1,000

 

20,000

 

1,200

 

1,000

 

21,200

 

6,351

 

2005

 

1999

 

3500 Meekins Dr.

Fredericksburg, VA

 

-

 

1,130

 

23,202

 

-

 

1,130

 

23,202

 

1,387

 

2014

 

2010

 

140 Brimley Drive

Fredonia, KS

 

-

 

40

 

460

 

35

 

40

 

495

 

20

 

2015

 

1991

 

2111 E Washington St

Fremont, CA

 

18,517

 

3,400

 

25,300

 

3,203

 

3,456

 

28,447

 

8,469

 

2005

 

1987

 

2860 Country Dr.

Fresno, CA

 

-

 

2,500

 

35,800

 

118

 

2,500

 

35,918

 

7,701

 

2008

 

1991

 

7173 North Sharon Avenue

Gardner, KS

 

-

 

200

 

2,800

 

58

 

200

 

2,858

 

85

 

2015

 

2000

 

869 Juniper Terrace

Gardnerville, NV

 

11,967

 

1,143

 

10,831

 

1,075

 

1,164

 

11,885

 

8,531

 

1998

 

1999

 

1565-A Virginia Ranch Rd.

Gastonia, NC

 

-

 

470

 

6,129

 

-

 

470

 

6,129

 

2,245

 

2003

 

1998

 

1680 S. New Hope Rd.

Gastonia, NC

 

-

 

310

 

3,096

 

22

 

310

 

3,118

 

1,212

 

2003

 

1994

 

1717 Union Rd.

Gastonia, NC

 

-

 

400

 

5,029

 

120

 

400

 

5,149

 

1,901

 

2003

 

1996

 

1750 Robinwood Rd.

Georgetown, TX

 

-

 

200

 

2,100

 

-

 

200

 

2,100

 

1,077

 

1997

 

1997

 

2600 University Dr., E.

Gettysburg, PA

 

-

 

590

 

8,913

 

116

 

590

 

9,029

 

1,568

 

2011

 

1987

 

867 York Road

Gig Harbor, WA

 

4,867

 

1,560

 

15,947

 

253

 

1,583

 

16,177

 

3,453

 

2010

 

1994

 

3213 45th St. Court NW

Glastonbury, CT

 

-

 

1,950

 

9,532

 

2,077

 

2,360

 

11,199

 

1,724

 

2011

 

1966

 

72 Salmon Brook Drive

Granbury, TX

 

-

 

2,040

 

30,670

 

258

 

2,040

 

30,928

 

4,646

 

2011

 

2009

 

100 Watermark Boulevard

Granbury, TX

 

-

 

2,550

 

2,940

 

480

 

2,550

 

3,420

 

476

 

2012

 

1996

 

916 East Highway 377

Grand Ledge, MI

 

-

 

1,150

 

16,286

 

5,119

 

1,150

 

21,405

 

3,150

 

2010

 

1999

 

4775 Village Dr

Granger, IN

 

-

 

1,670

 

21,280

 

2,401

 

1,670

 

23,681

 

3,773

 

2010

 

2009

 

6330 North Fir Rd

Grapevine, TX

 

-

 

-

 

-

 

19,803

 

2,220

 

17,583

 

659

 

2013

 

2014

 

4545 Merlot Drive

Grass Valley, CA

 

4,193

 

260

 

7,667

 

258

 

260

 

7,925

 

643

 

2013

 

2001

 

415 Sierra College Drive

Greenfield, WI

 

-

 

-

 

15,204

 

-

 

890

 

14,314

 

1,285

 

2013

 

1983

 

5017 South 110th Street

Greensboro, NC

 

-

 

330

 

2,970

 

554

 

330

 

3,524

 

1,343

 

2003

 

1996

 

5809 Old Oak Ridge Rd.

Greensboro, NC

 

-

 

560

 

5,507

 

1,013

 

560

 

6,520

 

2,467

 

2003

 

1997

 

4400 Lawndale Dr.

Greenville, SC

 

-

 

310

 

4,750

 

-

 

310

 

4,750

 

1,704

 

2004

 

1997

 

23 Southpointe Dr.

Greenville, NC

 

-

 

290

 

4,393

 

168

 

290

 

4,561

 

1,666

 

2003

 

1998

 

2715 Dickinson Ave.

Greenwood, IN

 

-

 

1,550

 

22,770

 

81

 

1,550

 

22,851

 

3,736

 

2010

 

2007

 

2339 South SR 135

Groton, CT

 

-

 

2,430

 

19,941

 

911

 

2,430

 

20,852

 

3,532

 

2011

 

1975

 

1145 Poquonnock Road

Haddonfield, NJ

 

-

 

-

 

-

 

16,883

 

520

 

16,363

 

790

 

2011

 

2015

 

132 Warwick Road

Hamburg, PA

 

-

 

840

 

10,543

 

215

 

840

 

10,758

 

1,932

 

2011

 

1966

 

125 Holly Road

Hamilton, NJ

 

-

 

440

 

4,469

 

-

 

440

 

4,469

 

1,774

 

2001

 

1998

 

1645 Whitehorse-Mercerville Rd.

Hanford, UKG

 

-

 

1,382

 

9,829

 

-

 

1,382

 

9,829

 

887

 

2013

 

2012

 

Bankhouse Road

Harrow, UKI

 

-

 

7,402

 

8,266

 

-

 

7,402

 

8,266

 

476

 

2014

 

2001

 

177 Preston Hill

Hatboro, PA

 

-

 

-

 

28,112

 

1,746

 

-

 

29,858

 

4,501

 

2011

 

1996

 

3485 Davisville Road

Hatfield, UKH

 

-

 

2,924

 

7,527

 

-

 

2,924

 

7,527

 

684

 

2013

 

2012

 

St Albans Road East

Haverford, PA

 

-

 

1,880

 

33,993

 

987

 

1,883

 

34,977

 

5,374

 

2010

 

2000

 

731 Old Buck Lane

Hemet, CA

 

-

 

870

 

3,405

 

-

 

870

 

3,405

 

847

 

2007

 

1996

 

25818 Columbia St.

Herne Bay, UKJ

 

-

 

1,900

 

24,353

 

-

 

1,900

 

24,353

 

2,464

 

2013

 

2011

 

165 Reculver Road

Hiawatha, KS

 

-

 

40

 

4,210

 

22

 

40

 

4,232

 

123

 

2015

 

1996

 

400 Kansas Ave

Hickory, NC

 

-

 

290

 

987

 

232

 

290

 

1,219

 

604

 

2003

 

1994

 

2530 16th St. N.E.

High Point, NC

 

-

 

560

 

4,443

 

793

 

560

 

5,236

 

1,960

 

2003

 

2000

 

1568 Skeet Club Rd.

High Point, NC

 

-

 

370

 

2,185

 

410

 

370

 

2,595

 

1,032

 

2003

 

1999

 

1564 Skeet Club Rd.

High Point, NC

 

-

 

330

 

3,395

 

28

 

330

 

3,423

 

1,291

 

2003

 

1994

 

201 W. Hartley Dr.

High Point, NC

 

-

 

430

 

4,143

 

-

 

430

 

4,143

 

1,549

 

2003

 

1998

 

1560 Skeet Club Rd.

Highland Park, IL

 

-

 

2,820

 

15,832

 

189

 

2,820

 

16,021

 

1,714

 

2011

 

2012

 

1651 Richfield Avenue

Highlands Ranch, CO

 

-

 

940

 

3,721

 

4,983

 

940

 

8,704

 

1,879

 

2002

 

1999

 

9160 S. University Blvd.

Hinckley, UKF

 

-

 

2,159

 

4,194

 

-

 

2,159

 

4,194

 

418

 

2013

 

2013

 

Tudor Road

Hindhead, UKJ

 

38,700

 

17,852

 

48,645

 

-

 

17,852

 

48,645

 

-

 

2016

 

2012

 

Portsmouth Road

Hockessin, DE

 

-

 

1,120

 

6,308

 

1,234

 

1,120

 

7,542

 

497

 

2014

 

1992

 

100 Saint Claire Drive

Holton, KS

 

-

 

40

 

7,460

 

12

 

40

 

7,472

 

203

 

2015

 

1996

 

410 Juniper Dr

Howell, NJ

 

9,177

 

1,066

 

21,577

 

383

 

1,070

 

21,956

 

3,507

 

2010

 

2007

 

100 Meridian Place

Hutchinson, KS

 

-

 

600

 

10,590

 

194

 

600

 

10,784

 

3,453

 

2004

 

1997

 

2416 Brentwood

Indianapolis, IN

 

-

 

495

 

6,287

 

22,565

 

495

 

28,852

 

10,370

 

2006

 

1981

 

8616 W. Tenth St.

Indianapolis, IN

 

-

 

255

 

2,473

 

12,123

 

255

 

14,596

 

5,170

 

2006

 

1981

 

8616 W.Tenth St.

Indianapolis, IN

 

-

 

870

 

14,688

 

-

 

870

 

14,688

 

945

 

2014

 

2014

 

1635 N Arlington Avenue

Indianapolis, IN

 

-

 

890

 

18,781

 

-

 

890

 

18,781

 

1,104

 

2014

 

2014

 

5404 Georgetown Road

Jacksonville, FL

 

-

 

-

 

-

 

25,981

 

750

 

25,231

 

330

 

2013

 

2014

 

5939 Roosevelt Boulevard

Jacksonville, FL

 

-

 

-

 

-

 

26,381

 

-

 

26,381

 

345

 

2013

 

2014

 

4000 San Pablo Parkway

Kansas City, KS

 

-

 

700

 

20,116

 

-

 

700

 

20,116

 

579

 

2015

 

2015

 

8900 Parallel Parkway

Kenner, LA

 

-

 

1,100

 

10,036

 

328

 

1,100

 

10,364

 

8,536

 

1998

 

2000

 

1600 Joe Yenni Blvd

Kennett Square, PA

 

-

 

1,050

 

22,946

 

293

 

1,083

 

23,206

 

3,604

 

2010

 

2008

 

301 Victoria Gardens Dr.

Kent, WA

 

-

 

940

 

20,318

 

10,470

 

940

 

30,788

 

6,892

 

2007

 

2000

 

24121 116th Avenue SE

Kingston upon Thames, UKI

 

40,799

 

33,063

 

46,696

 

-

 

33,063

 

46,696

 

-

 

2016

 

2014

 

Coombe Lane West

Kirkland, WA

 

-

 

1,880

 

4,315

 

683

 

1,880

 

4,998

 

1,673

 

2003

 

1996

 

6505 Lakeview Dr.

Kirkstall, UKE

 

-

 

2,437

 

9,414

 

-

 

2,437

 

9,414

 

852

 

2013

 

2009

 

29 Broad Lane

Kokomo, IN

 

-

 

710

 

16,044

 

-

 

710

 

16,044

 

1,030

 

2014

 

2014

 

2200 S. Dixon Rd

Lafayette, LA

 

-

 

1,928

 

10,483

 

25

 

1,928

 

10,509

 

4,053

 

2006

 

1993

 

204 Energy Parkway

Lafayette, CO

 

-

 

1,420

 

20,192

 

-

 

1,420

 

20,192

 

859

 

2015

 

2015

 

329 Exempla Circle

Lafayette, IN

 

-

 

670

 

16,833

 

-

 

670

 

16,833

 

873

 

2015

 

2014

 

2402 South Street

Lakeway, TX

 

-

 

-

 

-

 

27,982

 

5,142

 

22,840

 

1,796

 

2007

 

2011

 

2000 Medical Dr

Lakewood, CO

 

-

 

2,160

 

28,091

 

49

 

2,160

 

28,140

 

2,086

 

2014

 

2010

 

7395 West Eastman Place

Lakewood Ranch, FL

 

-

 

650

 

6,714

 

1,988

 

650

 

8,702

 

995

 

2011

 

2012

 

8230 Nature's Way

Lakewood Ranch, FL

 

-

 

1,000

 

22,388

 

-

 

1,000

 

22,388

 

2,646

 

2012

 

2005

 

8220 Natures Way

Lancaster, CA

 

9,561

 

700

 

15,295

 

625

 

712

 

15,907

 

3,835

 

2010

 

1999

 

43051 15th St. West

Langhorne, PA

 

-

 

1,350

 

24,881

 

140

 

1,350

 

25,021

 

4,014

 

2011

 

1979

 

262 Toll Gate Road

LaPlata, MD(2)

 

-

 

700

 

19,068

 

466

 

700

 

19,534

 

3,108

 

2011

 

1984

 

One Magnolia Drive

Las Vegas, NV

 

-

 

580

 

23,420

 

-

 

580

 

23,420

 

3,341

 

2011

 

2002

 

2500 North Tenaya Way

Lawrence, KS

 

-

 

250

 

8,716

 

-

 

250

 

8,716

 

1,019

 

2012

 

1996

 

3220 Peterson Road

Lecanto, FL

 

-

 

200

 

6,900

 

-

 

200

 

6,900

 

2,378

 

2004

 

1986

 

2341 W. Norvell Bryant Hwy.

Lee, MA

 

-

 

290

 

18,135

 

926

 

290

 

19,061

 

7,491

 

2002

 

1998

 

600 & 620 Laurel St.

Leeds, UKE

 

-

 

1,974

 

13,239

 

-

 

1,974

 

13,239

 

575

 

2015

 

2013

 

100 Grove Lane

Leicester, UKF

 

-

 

3,060

 

24,410

 

-

 

3,060

 

24,410

 

2,569

 

2012

 

2010

 

307 London Road

Lenoir, NC

 

-

 

190

 

3,748

 

641

 

190

 

4,389

 

1,636

 

2003

 

1998

 

1145 Powell Rd., N.E.

Lethbridge, AB

 

1,469

 

1,214

 

2,750

 

122

 

1,251

 

2,835

 

221

 

2014

 

2003

 

785 Columbia Boulevard West

Lexana, KS

 

-

 

480

 

1,770

 

95

 

480

 

1,865

 

57

 

2015

 

1994

 

8710 Caenen Lake Rd

Lexington, NC

 

-

 

200

 

3,900

 

1,015

 

200

 

4,915

 

1,895

 

2002

 

1997

 

161 Young Dr.

Libertyville, IL

 

-

 

6,500

 

40,024

 

-

 

6,500

 

40,024

 

6,270

 

2011

 

2001

 

901 Florsheim Dr

Lichfield, UKG

 

-

 

1,382

 

30,324

 

-

 

1,382

 

30,324

 

1,365

 

2015

 

2012

 

Wissage Road

Lillington, NC

 

-

 

470

 

17,579

 

-

 

470

 

17,579

 

1,089

 

2014

 

2013

 

54 Red Mulberry Way

Lillington, NC

 

-

 

500

 

16,451

 

-

 

500

 

16,451

 

958

 

2014

 

1999

 

2041 NC-210 N

Lincoln, NE

 

-

 

390

 

13,807

 

95

 

390

 

13,902

 

2,424

 

2010

 

2000

 

7208 Van Dorn St.

Linwood, NJ

 

-

 

800

 

21,984

 

979

 

838

 

22,925

 

3,685

 

2010

 

1997

 

432 Central Ave

Litchfield, CT

 

-

 

1,240

 

17,908

 

10,969

 

1,254

 

28,864

 

3,283

 

2010

 

1998

 

19 Constitution Way

Little Neck, NY

 

-

 

3,350

 

38,461

 

1,235

 

3,357

 

39,689

 

6,221

 

2010

 

2000

 

55-15 Little Neck Pkwy.

Livermore, CA

 

-

 

4,100

 

24,996

 

-

 

4,100

 

24,996

 

1,374

 

2014

 

1974

 

35 Fenton Street

London, UKI

 

-

 

-

 

-

 

23,257

 

7,439

 

15,818

 

105

 

2015

 

2016

 

6 Victoria Drive

Longview, TX

 

-

 

610

 

5,520

 

-

 

610

 

5,520

 

1,427

 

2006

 

2007

 

311 E Hawkins Pkwy

Longwood, FL

 

-

 

1,260

 

6,445

 

-

 

1,260

 

6,445

 

982

 

2011

 

2011

 

425 South Ronald Reagan Boulevard

Louisburg, KS

 

-

 

280

 

4,320

 

20

 

280

 

4,340

 

119

 

2015

 

1996

 

202 Rogers St

Louisville, KY

 

-

 

490

 

10,010

 

2,768

 

490

 

12,778

 

4,245

 

2005

 

1978

 

4604 Lowe Rd

Lowell, MA

 

-

 

1,070

 

13,481

 

169

 

1,070

 

13,650

 

2,284

 

2011

 

1975

 

841 Merrimack Street

Lowell, MA

 

-

 

680

 

3,378

 

44

 

680

 

3,422

 

701

 

2011

 

1969

 

30 Princeton Blvd

Loxley, UKE

 

-

 

1,369

 

15,668

 

-

 

1,369

 

15,668

 

1,573

 

2013

 

2008

 

Loxley Road

Lutherville, MD

 

-

 

1,100

 

19,786

 

1,675

 

1,100

 

21,461

 

3,285

 

2011

 

1988

 

515 Brightfield Road

Lynchburg, VA

 

-

 

340

 

16,114

 

-

 

340

 

16,114

 

1,011

 

2014

 

2013

 

189 Monica Blvd

Macungie, PA

 

-

 

960

 

29,033

 

56

 

960

 

29,089

 

4,478

 

2011

 

1994

 

1718 Spring Creek Road

Mahwah, NJ

 

-

 

-

 

-

 

28,854

 

1,605

 

27,249

 

1,117

 

2012

 

2015

 

15 Edison Road

Manalapan, NJ

 

-

 

900

 

22,624

 

347

 

900

 

22,971

 

3,195

 

2011

 

2001

 

445 Route 9 South

Manassas, VA

 

-

 

750

 

7,446

 

530

 

750

 

7,976

 

2,706

 

2003

 

1996

 

8341 Barrett Dr.

Mankato, MN

 

12,512

 

1,460

 

32,104

 

13

 

1,460

 

32,117

 

965

 

2015

 

2006

 

100 Dublin Road

Mansfield, TX

 

-

 

660

 

5,251

 

-

 

660

 

5,251

 

1,373

 

2006

 

2007

 

2281 Country Club Dr

Manteca, CA

 

5,878

 

1,300

 

12,125

 

1,566

 

1,312

 

13,679

 

4,520

 

2005

 

1986

 

430 N. Union Rd.

Marietta, PA

 

-

 

1,050

 

13,633

 

-

 

1,050

 

13,633

 

509

 

2015

 

1999

 

2760 Maytown Road

Marion, IN

 

-

 

720

 

12,750

 

1,136

 

720

 

13,886

 

857

 

2014

 

2012

 

614 W. 14th Street

Marion, IN

 

-

 

990

 

9,190

 

824

 

990

 

10,014

 

732

 

2014

 

1976

 

505 N. Bradner Avenue

Marlborough, UKK

 

-

 

2,677

 

6,822

 

-

 

2,677

 

6,822

 

384

 

2014

 

1999

 

The Common

Marlow, UKJ

 

-

 

-

 

-

 

47,193

 

8,772

 

38,421

 

1,329

 

2013

 

2014

 

210 Little Marlow Road

Martinsville, VA

 

-

 

349

 

-

 

-

 

349

 

-

 

-

 

2003

 

1900

 

Rolling Hills Rd. & US Hwy. 58

Marysville, WA

 

4,355

 

620

 

4,780

 

903

 

620

 

5,683

 

1,905

 

2003

 

1998

 

9802 48th Dr. N.E.

Matawan, NJ

 

-

 

1,830

 

20,618

 

83

 

1,830

 

20,701

 

2,950

 

2011

 

1965

 

625 State Highway 34

Matthews, NC

 

-

 

560

 

4,738

 

-

 

560

 

4,738

 

1,810

 

2003

 

1998

 

2404 Plantation Center Dr.

McHenry, IL

 

-

 

1,576

 

-

 

-

 

1,576

 

-

 

-

 

2006

 

1900

 

5200 Block of Bull Valley Road

McKinney, TX

 

-

 

1,570

 

7,389

 

-

 

1,570

 

7,389

 

1,452

 

2009

 

2010

 

2701 Alma Rd.

McMinnville, OR

 

-

 

720

 

7,984

 

150

 

720

 

8,134

 

350

 

2015

 

1996

 

3121 NE Cumulus Avenue

McMurray, PA

 

-

 

1,440

 

15,805

 

3,894

 

1,440

 

19,699

 

2,544

 

2010

 

2011

 

240 Cedar Hill Dr

Mechanicsburg, PA

 

-

 

1,350

 

16,650

 

-

 

1,350

 

16,650

 

2,432

 

2011

 

1971

 

4950 Wilson Lane

Medicine Hat, AB

 

2,412

 

932

 

5,566

 

200

 

961

 

5,737

 

353

 

2014

 

1999

 

65 Valleyview Drive SW

Melbourne, FL

 

-

 

7,070

 

48,257

 

16,324

 

7,070

 

64,581

 

11,663

 

2007

 

2009

 

7300 Watersong Lane

Melville, NY

 

-

 

4,280

 

73,283

 

4,305

 

4,299

 

77,570

 

11,736

 

2010

 

2001

 

70 Pinelawn Rd

Mendham, NJ

 

-

 

1,240

 

27,169

 

638

 

1,240

 

27,807

 

4,260

 

2011

 

1968

 

84 Cold Hill Road

Menomonee Falls, WI

 

-

 

1,020

 

6,984

 

1,652

 

1,020

 

8,636

 

1,830

 

2006

 

2007

 

W128 N6900 Northfield Drive

Mercerville, NJ

 

-

 

860

 

9,929

 

167

 

860

 

10,096

 

1,709

 

2011

 

1967

 

2240 White Horse- Merceville Road

Meriden, CT

 

-

 

1,300

 

1,472

 

98

 

1,300

 

1,570

 

518

 

2011

 

1968

 

845 Paddock Ave

Meridian, ID

 

-

 

3,600

 

20,802

 

251

 

3,600

 

21,053

 

7,802

 

2006

 

2008

 

2825 E. Blue Horizon Dr.

Merrillville, IN

 

-

 

700

 

11,699

 

154

 

700

 

11,853

 

2,781

 

2007

 

2008

 

9509 Georgia St.

Mesa, AZ

 

5,805

 

950

 

9,087

 

801

 

950

 

9,888

 

4,367

 

1999

 

2000

 

7231 E. Broadway

Middleburg Heights, OH

 

-

 

960

 

7,780

 

-

 

960

 

7,780

 

2,571

 

2004

 

1998

 

15435 Bagley Rd.

Middleton, WI

 

-

 

420

 

4,006

 

600

 

420

 

4,606

 

1,689

 

2001

 

1991

 

6701 Stonefield  Rd.

Midland, MI

 

-

 

200

 

11,025

 

5,522

 

200

 

16,547

 

2,118

 

2010

 

1994

 

2325 Rockwell Dr

Mill Creek, WA

 

18,239

 

10,150

 

60,274

 

935

 

10,179

 

61,179

 

15,746

 

2010

 

1998

 

14905 Bothell-Everett Hwy

Millville, NJ

 

-

 

840

 

29,944

 

127

 

840

 

30,071

 

4,710

 

2011

 

1986

 

54 Sharp Street

Milton Keynes, UKJ

 

-

 

1,826

 

18,654

 

-

 

1,826

 

18,654

 

864

 

2015

 

2007

 

Tunbridge Grove, Kents Hill

Milwaukie, OR

 

-

 

400

 

6,782

 

115

 

400

 

6,897

 

294

 

2015

 

1991

 

5770 SE Kellogg Creek Drive

Mishawaka, IN

 

-

 

740

 

16,114

 

-

 

740

 

16,114

 

1,054

 

2014

 

2013

 

60257 Bodnar Blvd

Missoula, MT

 

-

 

550

 

7,490

 

377

 

550

 

7,867

 

2,367

 

2005

 

1998

 

3620 American Way

Monmouth Junction, NJ

 

-

 

720

 

6,209

 

79

 

720

 

6,288

 

1,125

 

2011

 

1996

 

2 Deer Park Drive

Monroe, NC

 

-

 

470

 

3,681

 

648

 

470

 

4,329

 

1,650

 

2003

 

2001

 

918 Fitzgerald St.

Monroe, NC

 

-

 

310

 

4,799

 

857

 

310

 

5,656

 

2,046

 

2003

 

2000

 

919 Fitzgerald St.

Monroe, NC

 

-

 

450

 

4,021

 

114

 

450

 

4,135

 

1,573

 

2003

 

1997

 

1316 Patterson Ave.

Monroe Township, NJ

 

-

 

3,250

 

27,771

 

91

 

3,250

 

27,862

 

723

 

2015

 

1996

 

319 Forsgate Drive

Monroe Twp, NJ

 

-

 

1,160

 

13,193

 

102

 

1,160

 

13,295

 

2,268

 

2011

 

1996

 

292 Applegarth Road

Montville, NJ

 

-

 

3,500

 

31,002

 

847

 

3,500

 

31,849

 

4,485

 

2011

 

1988

 

165 Changebridge Rd.

Moorestown, NJ

 

-

 

2,060

 

51,628

 

1,569

 

2,071

 

53,186

 

8,185

 

2010

 

2000

 

1205 N. Church St

Moorestown, NJ

 

-

 

6,400

 

23,875

 

-

 

6,400

 

23,875

 

1,824

 

2012

 

2014

 

250 Marter Avenue

Morehead City, NC

 

-

 

200

 

3,104

 

1,648

 

200

 

4,752

 

2,038

 

1999

 

1999

 

107 Bryan St.

Morton Grove, IL

 

-

 

1,900

 

19,374

 

159

 

1,900

 

19,533

 

2,673

 

2010

 

2011

 

5520 N. Lincoln Ave.

Mount Pleasant, SC

 

-

 

-

 

17,200

 

-

 

4,052

 

13,149

 

1,945

 

2013

 

1985

 

1200 Hospital Drive

Mount Vernon, WA

 

-

 

3,440

 

21,842

 

2,227

 

3,440

 

24,069

 

1,259

 

2014

 

1987

 

1810 E. Division Street

Mt. Vernon, WA

 

-

 

400

 

2,200

 

156

 

400

 

2,356

 

627

 

2006

 

2001

 

3807 East College Way

Murphy, TX

 

-

 

1,950

 

19,182

 

578

 

1,950

 

19,760

 

660

 

2015

 

2012

 

304 West FM 544

Nacogdoches, TX

 

-

 

390

 

5,754

 

-

 

390

 

5,754

 

1,480

 

2006

 

2007

 

5902 North St

Naperville, IL

 

-

 

3,470

 

29,547

 

-

 

3,470

 

29,547

 

4,718

 

2011

 

2001

 

504 North River Road

Nashville, TN

 

-

 

4,910

 

29,590

 

-

 

4,910

 

29,590

 

6,736

 

2008

 

2007

 

15 Burton Hills Boulevard

Naugatuck, CT

 

-

 

1,200

 

15,826

 

197

 

1,200

 

16,023

 

2,576

 

2011

 

1980

 

4 Hazel Avenue

Needham, MA

 

-

 

1,610

 

13,715

 

366

 

1,610

 

14,081

 

6,108

 

2002

 

1994

 

100 West St.

Neodesha, KS

 

-

 

20

 

430

 

19

 

20

 

449

 

19

 

2015

 

1994

 

400 Fir St

New Braunfels, TX

 

-

 

1,200

 

19,800

 

10,154

 

2,729

 

28,425

 

3,382

 

2011

 

2009

 

2294 East Common Street

New Haven, IN

 

-

 

176

 

3,524

 

-

 

176

 

3,524

 

1,559

 

2004

 

1981

 

1201 Daly Dr.

New Moston, UKD

 

-

 

1,480

 

4,378

 

-

 

1,480

 

4,378

 

412

 

2013

 

2010

 

90a Broadway

Newark, DE

 

-

 

560

 

21,220

 

1,488

 

560

 

22,708

 

6,946

 

2004

 

1998

 

200 E. Village Rd.

Newcastle Under Lyme, UKG

 

-

 

1,110

 

5,655

 

-

 

1,110

 

5,655

 

509

 

2013

 

2010

 

Hempstalls Lane

Newcastle-under-Lyme, UKG

 

-

 

1,125

 

5,537

 

-

 

1,125

 

5,537

 

311

 

2014

 

1999

 

Silverdale Road

Norman, OK

 

-

 

55

 

1,484

 

-

 

55

 

1,484

 

875

 

1995

 

1995

 

1701 Alameda Dr.

Norman, OK

 

-

 

1,480

 

33,330

 

-

 

1,480

 

33,330

 

3,858

 

2012

 

1985

 

800 Canadian Trails Drive

North Augusta, SC

 

-

 

332

 

2,558

 

-

 

332

 

2,558

 

1,228

 

1999

 

1998

 

105 North Hills Dr.

North Bend, OR

 

-

 

1,290

 

7,361

 

686

 

1,290

 

8,047

 

331

 

2015

 

1995

 

2290 Inland Drive

North Cape May, NJ

 

-

 

600

 

22,266

 

48

 

600

 

22,314

 

3,488

 

2011

 

1995

 

700 Townbank Road

North Cape May, NJ

 

-

 

77

 

151

 

460

 

77

 

610

 

31

 

2015

 

1988

 

610 Town Bank Road

Northampton, UKF

 

-

 

5,182

 

17,348

 

-

 

5,182

 

17,348

 

1,623

 

2013

 

2011

 

Cliftonville Road

Northampton, UKF

 

-

 

2,013

 

6,257

 

-

 

2,013

 

6,257

 

339

 

2014

 

2014

 

Cliftonville Road

Nuneaton, UKG

 

-

 

3,325

 

8,983

 

-

 

3,325

 

8,983

 

809

 

2013

 

2011

 

132 Coventry Road

Nuthall, UKF

 

-

 

1,628

 

6,263

 

-

 

1,628

 

6,263

 

326

 

2014

 

2014

 

172A Nottingham Road

Nuthall, UKF

 

-

 

2,498

 

10,436

 

-

 

2,498

 

10,436

 

950

 

2013

 

2011

 

172 Nottingham Road

Oakland, CA

 

-

 

4,760

 

16,143

 

57

 

4,760

 

16,200

 

1,065

 

2014

 

2002

 

468 Perkins Street

Ocala, FL

 

-

 

1,340

 

10,564

 

-

 

1,340

 

10,564

 

2,169

 

2008

 

2009

 

2650 SE 18TH Avenue

Ogden, UT

 

-

 

360

 

6,700

 

699

 

360

 

7,399

 

2,330

 

2004

 

1998

 

1340 N. Washington Blv.

Oklahoma City, OK

 

-

 

590

 

7,513

 

-

 

590

 

7,513

 

1,761

 

2007

 

2008

 

13200 S. May Ave

Oklahoma City, OK

 

-

 

760

 

7,017

 

-

 

760

 

7,017

 

1,584

 

2007

 

2009

 

11320 N. Council Road

Olathe, KS

 

-

 

1,930

 

19,765

 

553

 

1,930

 

20,318

 

517

 

2016

 

2015

 

21250 W 151 Street

Omaha, NE

 

-

 

370

 

10,230

 

-

 

370

 

10,230

 

1,823

 

2010

 

1998

 

11909 Miracle Hills Dr.

Omaha, NE

 

-

 

380

 

8,769

 

-

 

380

 

8,769

 

1,647

 

2010

 

1999

 

5728 South 108th St.

Ona, WV

 

-

 

950

 

15,998

 

-

 

950

 

15,998

 

560

 

2015

 

2007

 

100 Weatherholt Drive

Oneonta, NY

 

-

 

80

 

5,020

 

-

 

80

 

5,020

 

1,188

 

2007

 

1996

 

1846 County Highway 48

Orem, UT

 

-

 

2,150

 

24,107

 

-

 

2,150

 

24,107

 

778

 

2015

 

2014

 

250 East Center Street

Osage City, KS

 

-

 

50

 

1,700

 

102

 

50

 

1,802

 

56

 

2015

 

1996

 

1403 Laing St

Osawatomie, KS

 

-

 

130

 

2,970

 

67

 

130

 

3,037

 

90

 

2015

 

2003

 

1520 Parker Ave

Ottawa, KS

 

-

 

160

 

6,590

 

28

 

160

 

6,618

 

185

 

2015

 

2007

 

2250 S Elm St

Overland Park, KS

 

-

 

3,730

 

27,076

 

340

 

3,730

 

27,416

 

5,416

 

2008

 

2009

 

12000 Lamar Avenue

Overland Park, KS

 

-

 

4,500

 

29,105

 

7,295

 

4,500

 

36,400

 

6,277

 

2010

 

1988

 

6101 W 119th St

Overland Park, KS

 

-

 

410

 

2,840

 

27

 

410

 

2,867

 

90

 

2015

 

2004

 

14430 Metcalf Ave

Overland Park, KS

 

-

 

1,300

 

25,311

 

677

 

1,300

 

25,988

 

699

 

2016

 

2015

 

7600 Antioch Road

Owasso, OK

 

-

 

215

 

1,380

 

-

 

215

 

1,380

 

737

 

1996

 

1996

 

12807 E. 86th Place N.

Owensboro, KY

 

-

 

225

 

13,275

 

-

 

225

 

13,275

 

4,465

 

2005

 

1964

 

1205 Leitchfield Rd.

Owenton, KY

 

-

 

100

 

2,400

 

-

 

100

 

2,400

 

992

 

2005

 

1979

 

905 Hwy. 127 N.

Oxford, MI

 

-

 

1,430

 

15,791

 

-

 

1,430

 

15,791

 

2,719

 

2010

 

2001

 

701 Market St

Palestine, TX

 

-

 

180

 

4,320

 

1,300

 

180

 

5,620

 

1,512

 

2006

 

2005

 

1625 W. Spring St.

Palm Coast, FL

 

-

 

870

 

10,957

 

-

 

870

 

10,957

 

2,112

 

2008

 

2010

 

50 Town Ct.

Paola, KS

 

-

 

190

 

5,610

 

10

 

190

 

5,620

 

158

 

2015

 

2000

 

601 N. East Street

Paris, TX

 

-

 

490

 

5,452

 

-

 

490

 

5,452

 

3,694

 

2005

 

2006

 

750 N Collegiate Dr

Paso Robles, CA

 

-

 

1,770

 

8,630

 

693

 

1,770

 

9,323

 

3,591

 

2002

 

1998

 

1919 Creston Rd.

Pella, IA

 

-

 

870

 

6,716

 

89

 

870

 

6,805

 

776

 

2012

 

2002

 

2602 Fifield Road

Pennington, NJ

 

-

 

1,380

 

27,620

 

814

 

1,471

 

28,343

 

3,947

 

2011

 

2000

 

143 West Franklin Avenue

Pennsauken, NJ

 

-

 

900

 

10,780

 

179

 

900

 

10,959

 

1,992

 

2011

 

1985

 

5101 North Park Drive

Petoskey, MI

 

-

 

860

 

14,452

 

-

 

860

 

14,452

 

2,348

 

2011

 

1997

 

965 Hager Dr

Pewaukee, WI

 

-

 

4,700

 

20,669

 

-

 

4,700

 

20,669

 

6,858

 

2007

 

2007

 

2400 Golf Rd.

Philadelphia, PA

 

-

 

2,930

 

10,433

 

3,527

 

2,930

 

13,960

 

2,324

 

2011

 

1952

 

1526 Lombard Street

Phillipsburg, NJ

 

-

 

800

 

21,175

 

226

 

800

 

21,401

 

3,443

 

2011

 

1992

 

290 Red School Lane

Phillipsburg, NJ

 

-

 

300

 

8,114

 

77

 

300

 

8,191

 

1,312

 

2011

 

1905

 

843 Wilbur Avenue

Pinehurst, NC

 

-

 

290

 

2,690

 

484

 

290

 

3,174

 

1,248

 

2003

 

1998

 

17 Regional Dr.

Piqua, OH

 

-

 

204

 

1,885

 

-

 

204

 

1,885

 

934

 

1997

 

1997

 

1744 W. High St.

Pittsburgh, PA

 

-

 

1,750

 

8,572

 

115

 

1,750

 

8,687

 

2,881

 

2005

 

1998

 

100 Knoedler Rd.

Plainview, NY

 

-

 

3,990

 

11,969

 

818

 

3,990

 

12,787

 

1,958

 

2011

 

1963

 

150 Sunnyside Blvd

Plano, TX

 

-

 

1,840

 

20,152

 

560

 

1,840

 

20,712

 

357

 

2016

 

2016

 

3325 W Plano Parkway

Plattsmouth, NE

 

-

 

250

 

5,650

 

-

 

250

 

5,650

 

1,059

 

2010

 

1999

 

1913 E. Highway 34

Plymouth, MI

 

-

 

1,490

 

19,990

 

235

 

1,490

 

20,225

 

3,293

 

2010

 

1972

 

14707 Northville Rd

Port St. Lucie, FL

 

-

 

8,700

 

47,230

 

6,090

 

8,700

 

53,320

 

9,314

 

2008

 

2010

 

10685 SW Stony Creek Way

Post Falls, ID

 

-

 

2,700

 

14,217

 

2,181

 

2,700

 

16,398

 

3,695

 

2007

 

2008

 

460 N. Garden Plaza Ct.

Princeton, NJ

 

-

 

1,730

 

30,888

 

1,516

 

1,810

 

32,324

 

4,587

 

2011

 

2001

 

155 Raymond Road

Prior Lake, MN

 

14,250

 

1,870

 

29,849

 

13

 

1,870

 

29,862

 

896

 

2015

 

2003

 

4685 Park Nicollet Avenue

Puyallup, WA

 

10,968

 

1,150

 

20,776

 

445

 

1,156

 

21,216

 

4,713

 

2010

 

1985

 

123 Fourth Ave. NW

Raleigh, NC

 

-

 

3,530

 

59,589

 

-

 

3,530

 

59,589

 

6,682

 

2012

 

2002

 

5301 Creedmoor Road

Raleigh, NC

 

-

 

2,580

 

16,837

 

-

 

2,580

 

16,837

 

2,029

 

2012

 

1988

 

7900 Creedmoor Road

Reading, PA

 

-

 

980

 

19,906

 

120

 

980

 

20,026

 

3,180

 

2011

 

1994

 

5501 Perkiomen Ave

Red Bank, NJ

 

-

 

1,050

 

21,275

 

496

 

1,050

 

21,771

 

3,016

 

2011

 

1997

 

One Hartford Dr.

Rehoboth Beach, DE

 

-

 

960

 

24,248

 

8,632

 

976

 

32,864

 

4,296

 

2010

 

1999

 

36101 Seaside Blvd

Reidsville, NC

 

-

 

170

 

3,830

 

857

 

170

 

4,687

 

1,825

 

2002

 

1998

 

2931 Vance St.

Reno, NV

 

-

 

1,060

 

11,440

 

605

 

1,060

 

12,045

 

3,857

 

2004

 

1998

 

5165 Summit Ridge Road

Richardson, TX

 

-

 

1,800

 

16,562

 

331

 

1,800

 

16,893

 

769

 

2015

 

2009

 

1350 East Lookout Drive

Richmond, IN

 

-

 

700

 

14,222

 

393

 

700

 

14,615

 

370

 

2016

 

2015

 

400 Industries Road

Richmond, VA

 

-

 

-

 

12,000

 

-

 

250

 

11,750

 

1,229

 

2013

 

1989

 

2220 Edward Holland Drive

Ridgeland, MS

 

-

 

520

 

7,675

 

427

 

520

 

8,102

 

2,771

 

2003

 

1997

 

410 Orchard Park

Rochdale, MA

 

-

 

-

 

7,100

 

-

 

690

 

6,410

 

642

 

2013

 

1994

 

111 Huntoon Memorial Highway

Rockville, MD

 

-

 

-

 

16,398

 

10

 

-

 

16,408

 

2,195

 

2012

 

1986

 

9701 Medical Center Drive

Rockville, CT

 

-

 

1,500

 

4,835

 

132

 

1,500

 

4,967

 

1,056

 

2011

 

1960

 

1253 Hartford Turnpike

Rockville Centre, NY

 

-

 

4,290

 

20,310

 

781

 

4,290

 

21,091

 

3,064

 

2011

 

2002

 

260 Maple Ave

Rockwall, TX

 

-

 

-

 

-

 

19,801

 

2,220

 

17,581

 

674

 

2012

 

2014

 

720 E Ralph Hall Parkway

Rocky Hill, CT

 

-

 

1,090

 

6,710

 

1,500

 

1,090

 

8,210

 

2,690

 

2003

 

1996

 

60 Cold Spring Rd.

Rohnert Park, CA

 

13,024

 

6,500

 

18,700

 

2,116

 

6,546

 

20,769

 

6,372

 

2005

 

1986

 

4855 Snyder Lane

Romeoville, IL

 

-

 

1,895

 

-

 

-

 

1,895

 

-

 

-

 

2006

 

1900

 

Grand Haven Circle

Roseburg, OR

 

-

 

1,200

 

4,891

 

44

 

1,200

 

4,935

 

215

 

2015

 

1990

 

1901 NW Hughwood Drive

Roseville, MN

 

-

 

2,140

 

24,679

 

67

 

2,140

 

24,746

 

746

 

2015

 

1989

 

2750 North Victoria Street

Roswell, GA

 

7,489

 

1,107

 

9,627

 

1,086

 

1,114

 

10,706

 

7,739

 

1997

 

1999

 

655 Mansell Rd.

Rugeley, UKG

 

-

 

1,900

 

10,262

 

-

 

1,900

 

10,262

 

978

 

2013

 

2010

 

Horse Fair

Ruston, LA

 

-

 

710

 

9,790

 

-

 

710

 

9,790

 

1,551

 

2011

 

1988

 

1401 Ezelle St

Sacramento, CA

 

9,762

 

940

 

14,781

 

251

 

952

 

15,020

 

3,341

 

2010

 

1978

 

6350 Riverside Blvd

Salem, OR

 

-

 

449

 

5,171

 

-

 

449

 

5,172

 

2,463

 

1999

 

1998

 

1355 Boone Rd. S.E.

Salem, OR

 

-

 

440

 

4,726

 

71

 

440

 

4,796

 

209

 

2015

 

1992

 

3988 12th Street SE

Salisbury, NC

 

-

 

370

 

5,697

 

168

 

370

 

5,865

 

2,145

 

2003

 

1997

 

2201 Statesville Blvd.

San Angelo, TX

 

-

 

260

 

8,800

 

425

 

260

 

9,225

 

2,896

 

2004

 

1997

 

2695 Valleyview Blvd.

San Angelo, TX

 

-

 

1,050

 

24,689

 

552

 

1,050

 

25,241

 

1,650

 

2014

 

1999

 

6101 Grand Court Road

San Antonio, TX

 

-

 

6,120

 

28,169

 

2,281

 

6,120

 

30,450

 

4,358

 

2010

 

2011

 

2702 Cembalo Blvd

San Antonio, TX

 

-

 

-

 

17,303

 

-

 

-

 

17,303

 

6,432

 

2007

 

2007

 

8902 Floyd Curl Dr.

San Bernardino, CA

 

-

 

3,700

 

14,300

 

687

 

3,700

 

14,987

 

3,115

 

2008

 

1993

 

1760 W. 16th St.

San Diego, CA

 

-

 

-

 

22,003

 

1,845

 

-

 

23,848

 

4,875

 

2008

 

1992

 

555 Washington St.

Sanatoga, PA

 

-

 

980

 

30,695

 

75

 

980

 

30,770

 

4,725

 

2011

 

1993

 

225 Evergreen Road

Sand Springs, OK

 

6,431

 

910

 

19,654

 

-

 

910

 

19,654

 

2,317

 

2012

 

2002

 

4402 South 129th Avenue West

Sarasota, FL

 

-

 

475

 

3,175

 

-

 

475

 

3,175

 

1,769

 

1996

 

1995

 

8450 McIntosh Rd.

Sarasota, FL

 

-

 

3,360

 

19,140

 

-

 

3,360

 

19,140

 

2,677

 

2011

 

2006

 

6150 Edgelake Drive

Scranton, PA

 

-

 

440

 

17,609

 

-

 

440

 

17,609

 

1,056

 

2014

 

2005

 

2741 Blvd. Ave

Scranton, PA

 

-

 

320

 

12,144

 

-

 

320

 

12,144

 

722

 

2014

 

2013

 

2751 Boulevard Ave

Seattle, WA

 

7,344

 

5,190

 

9,350

 

564

 

5,199

 

9,905

 

3,119

 

2010

 

1962

 

11501 15th Ave NE

Seattle, WA

 

27,180

 

10,670

 

37,291

 

894

 

10,700

 

38,155

 

10,575

 

2010

 

2005

 

805 4th Ave N

Selbyville, DE

 

-

 

750

 

25,912

 

360

 

769

 

26,253

 

4,141

 

2010

 

2008

 

21111 Arrington Dr

Seven Fields, PA

 

-

 

484

 

4,663

 

60

 

484

 

4,722

 

2,254

 

1999

 

1999

 

500 Seven Fields Blvd.

Severna Park, MD(2)

 

-

 

2,120

 

31,273

 

808

 

2,120

 

32,081

 

4,897

 

2011

 

1981

 

24 Truckhouse Road

Shawnee, OK

 

-

 

80

 

1,400

 

-

 

80

 

1,400

 

771

 

1996

 

1995

 

3947 Kickapoo

Shelbyville, KY

 

-

 

630

 

3,870

 

630

 

630

 

4,500

 

1,357

 

2005

 

1965

 

1871 Midland Trail

Shelton, WA

 

-

 

530

 

17,049

 

472

 

530

 

17,521

 

2,157

 

2012

 

1989

 

900 W Alpine Way

Sherman, TX

 

-

 

700

 

5,221

 

-

 

700

 

5,221

 

1,414

 

2005

 

2006

 

1011 E. Pecan Grove Rd.

Shrewsbury, NJ

 

-

 

2,120

 

38,116

 

910

 

2,128

 

39,018

 

6,095

 

2010

 

2000

 

5 Meridian Way

Silvis, IL

 

-

 

880

 

16,420

 

139

 

880

 

16,559

 

2,802

 

2010

 

2005

 

1900 10th St.

Sittingbourne, UKJ

 

-

 

1,357

 

6,539

 

-

 

1,357

 

6,539

 

353

 

2014

 

1997

 

200 London Road

Smithfield, NC

 

-

 

290

 

5,680

 

-

 

290

 

5,680

 

2,094

 

2003

 

1998

 

830 Berkshire Rd.

Smithfield, NC

 

-

 

360

 

8,216

 

-

 

360

 

8,216

 

487

 

2014

 

1999

 

250 Highway 210 West

Sonoma, CA

 

14,278

 

1,100

 

18,400

 

1,700

 

1,109

 

20,090

 

6,132

 

2005

 

1988

 

800 Oregon St.

South Bend, IN

 

-

 

670

 

17,770

 

-

 

670

 

17,770

 

1,080

 

2014

 

2014

 

52565 State Road 933

South Boston, MA

 

-

 

385

 

2,002

 

5,218

 

385

 

7,220

 

3,486

 

1995

 

1961

 

804 E. Seventh St.

Southbury, CT

 

-

 

1,860

 

23,613

 

958

 

1,860

 

24,571

 

3,660

 

2011

 

2001

 

655 Main St

Sparks, NV

 

-

 

3,700

 

46,526

 

-

 

3,700

 

46,526

 

9,398

 

2007

 

2009

 

275 Neighborhood Way

Springfield, OR

 

-

 

1,790

 

8,865

 

90

 

1,790

 

8,954

 

385

 

2015

 

1994

 

770 Harlow Road

Springfield, IL

 

-

 

-

 

10,100

 

-

 

768

 

9,332

 

1,258

 

2013

 

2010

 

701 North Walnut Street

Springfield, IL

 

-

 

990

 

13,378

 

1,084

 

990

 

14,462

 

866

 

2014

 

2013

 

3089 Old Jacksonville Road

St. Paul, MN

 

-

 

2,100

 

33,019

 

78

 

2,100

 

33,097

 

988

 

2015

 

1996

 

750 Mississippi River

Stafford, UKG

 

-

 

-

 

-

 

9,909

 

1,943

 

7,966

 

54

 

2014

 

2016

 

Stone Road

Stamford, UKF

 

-

 

1,820

 

3,238

 

-

 

1,820

 

3,238

 

187

 

2014

 

1998

 

Priory Road

Statesville, NC

 

-

 

150

 

1,447

 

266

 

150

 

1,713

 

672

 

2003

 

1990

 

2441 E. Broad St.

Statesville, NC

 

-

 

310

 

6,183

 

8

 

310

 

6,191

 

2,216

 

2003

 

1996

 

2806 Peachtree Place

Statesville, NC

 

-

 

140

 

3,627

 

-

 

140

 

3,627

 

1,330

 

2003

 

1999

 

2814 Peachtree Rd.

Stillwater, OK

 

-

 

80

 

1,400

 

-

 

80

 

1,400

 

774

 

1995

 

1995

 

1616 McElroy Rd.

Stockton, CA

 

2,810

 

2,280

 

5,983

 

397

 

2,372

 

6,288

 

1,638

 

2010

 

1988

 

6725 Inglewood

Stratford-upon-Avon, UKG

 

-

 

790

 

14,508

 

-

 

790

 

14,508

 

652

 

2015

 

2012

 

Scholars Lane

Stroudsburg, PA

 

-

 

340

 

16,313

 

-

 

340

 

16,313

 

987

 

2014

 

2011

 

370 Whitestone Corner Road

Summit, NJ

 

-

 

3,080

 

14,152

 

-

 

3,080

 

14,152

 

2,238

 

2011

 

2001

 

41 Springfield Avenue

Superior, WI

 

-

 

1,020

 

13,735

 

6,159

 

1,020

 

19,894

 

1,813

 

2009

 

2010

 

1915 North 34th Street

Swanton, OH

 

-

 

330

 

6,370

 

-

 

330

 

6,370

 

2,245

 

2004

 

1950

 

401 W. Airport Hwy.

Terre Haute, IN

 

-

 

1,370

 

18,016

 

-

 

1,370

 

18,016

 

881

 

2015

 

2015

 

395 8th Avenue

Texarkana, TX

 

-

 

192

 

1,403

 

-

 

192

 

1,403

 

749

 

1996

 

1996

 

4204 Moores Lane

The Villages, FL

 

-

 

1,035

 

7,446

 

-

 

1,035

 

7,446

 

654

 

2013

 

2014

 

2450 Parr Drive

Tomball, TX

 

-

 

1,050

 

13,300

 

779

 

1,050

 

14,079

 

2,076

 

2011

 

2001

 

1221 Graham Dr

Toms River, NJ

 

-

 

1,610

 

34,627

 

813

 

1,679

 

35,371

 

5,584

 

2010

 

2005

 

1587 Old Freehold Rd

Tonganoxie, KS

 

-

 

310

 

3,690

 

69

 

310

 

3,759

 

114

 

2015

 

2009

 

120 W 8th St

Topeka, KS

 

-

 

260

 

12,712

 

-

 

260

 

12,712

 

1,548

 

2012

 

2011

 

1931 Southwest Arvonia Place

Towson, MD(2)

 

-

 

1,180

 

13,280

 

195

 

1,180

 

13,475

 

2,204

 

2011

 

1973

 

7700 York Road

Troy, OH

 

-

 

200

 

2,000

 

4,254

 

200

 

6,254

 

1,841

 

1997

 

1997

 

81 S. Stanfield Rd.

Troy, OH

 

-

 

470

 

16,730

 

-

 

470

 

16,730

 

5,678

 

2004

 

1971

 

512 Crescent Drive

Trumbull, CT

 

-

 

4,440

 

43,384

 

-

 

4,440

 

43,384

 

6,548

 

2011

 

2001

 

6949 Main Street

Tucson, AZ

 

-

 

1,190

 

18,318

 

668

 

1,190

 

18,985

 

521

 

2015

 

1997

 

8151 E Speedway Boulevard

Tulsa, OK

 

-

 

3,003

 

6,025

 

20

 

3,003

 

6,045

 

3,248

 

2006

 

1992

 

3219 S. 79th E. Ave.

Tulsa, OK

 

-

 

1,390

 

7,110

 

517

 

1,390

 

7,627

 

1,467

 

2010

 

1998

 

7220 S. Yale Ave.

Tulsa, OK

 

-

 

1,320

 

10,087

 

-

 

1,320

 

10,087

 

1,233

 

2011

 

2012

 

7902 South Mingo Road East

Tyler, TX

 

-

 

650

 

5,268

 

-

 

650

 

5,268

 

1,366

 

2006

 

2007

 

5550 Old Jacksonville Hwy.

Upper Providence, PA

 

-

 

-

 

-

 

30,095

 

1,900

 

28,195

 

1,226

 

2013

 

2015

 

1133 Black Rock Road

Vacaville, CA

 

13,392

 

900

 

17,100

 

1,651

 

900

 

18,751

 

5,857

 

2005

 

1987

 

799 Yellowstone Dr.

Vallejo, CA

 

13,407

 

4,000

 

18,000

 

2,344

 

4,030

 

20,315

 

6,287

 

2005

 

1989

 

350 Locust Dr.

Vallejo, CA

 

7,147

 

2,330

 

15,407

 

310

 

2,330

 

15,717

 

3,716

 

2010

 

1990

 

2261 Tuolumne

Valparaiso, IN

 

-

 

112

 

2,558

 

-

 

112

 

2,558

 

1,087

 

2001

 

1998

 

2601 Valparaiso St.

Valparaiso, IN

 

-

 

108

 

2,962

 

-

 

108

 

2,962

 

1,238

 

2001

 

1999

 

2501 Valparaiso St.

Vancouver, WA

 

11,214

 

1,820

 

19,042

 

270

 

1,821

 

19,311

 

4,339

 

2010

 

2006

 

10011 NE 118th Ave

Venice, FL

 

-

 

1,150

 

10,674

 

-

 

1,150

 

10,674

 

2,113

 

2008

 

2009

 

1600 Center Rd.

Vero Beach, FL

 

-

 

263

 

3,187

 

-

 

263

 

3,187

 

1,322

 

2001

 

1999

 

420 4th Ct.

Vero Beach, FL

 

-

 

297

 

3,263

 

-

 

297

 

3,263

 

1,363

 

2001

 

1996

 

410 4th Ct.

Vero Beach, FL

 

-

 

2,930

 

40,070

 

15,112

 

2,930

 

55,182

 

12,173

 

2007

 

2003

 

7955 16th Manor

Virginia Beach, VA

 

-

 

1,540

 

22,593

 

-

 

1,540

 

22,593

 

1,361

 

2014

 

1993

 

5520 Indian River Rd

Voorhees, NJ

 

-

 

1,800

 

37,299

 

657

 

1,800

 

37,956

 

5,987

 

2011

 

1965

 

2601 Evesham Road

Voorhees, NJ(2)

 

-

 

1,900

 

26,040

 

894

 

1,900

 

26,934

 

4,266

 

2011

 

1985

 

3001 Evesham Road

Voorhees, NJ

 

-

 

3,100

 

25,950

 

21

 

3,100

 

25,971

 

2,965

 

2011

 

2013

 

113 South Route 73

Voorhees, NJ

 

-

 

3,700

 

24,312

 

1,560

 

3,847

 

25,725

 

2,443

 

2012

 

2013

 

311 Route 73

Wabash, IN

 

-

 

670

 

14,588

 

-

 

670

 

14,588

 

940

 

2014

 

2013

 

20 John Kissinger Drive

Waconia, MN

 

-

 

890

 

14,726

 

4,495

 

890

 

19,221

 

2,567

 

2011

 

2005

 

500 Cherry Street

Wake Forest, NC

 

-

 

200

 

3,003

 

1,742

 

200

 

4,745

 

2,086

 

1998

 

1999

 

611 S. Brooks St.

Wall, NJ

 

-

 

1,650

 

25,350

 

2,421

 

1,692

 

27,729

 

3,774

 

2011

 

2003

 

2021 Highway 35

Wallingford, CT

 

-

 

490

 

1,210

 

65

 

490

 

1,275

 

343

 

2011

 

1962

 

35 Marc Drive

Walsall, UKG

 

-

 

1,184

 

8,562

 

-

 

1,184

 

8,562

 

408

 

2015

 

2015

 

Little Aston Road

Wamego, KS

 

-

 

40

 

2,510

 

14

 

40

 

2,524

 

74

 

2015

 

1996

 

1607 4th St

Wareham, MA

 

-

 

875

 

10,313

 

1,701

 

875

 

12,014

 

4,983

 

2002

 

1989

 

50 Indian Neck Rd.

Warren, NJ

 

-

 

2,000

 

30,810

 

727

 

2,000

 

31,537

 

4,322

 

2011

 

1999

 

274 King George Rd

Watchung, NJ

 

-

 

1,920

 

24,880

 

1,030

 

1,976

 

25,853

 

3,620

 

2011

 

2000

 

680 Mountain Boulevard

Waukee, IA

 

-

 

1,870

 

31,878

 

1,075

 

1,870

 

32,953

 

3,686

 

2012

 

2007

 

1650 SE Holiday Crest Circle

Waxahachie, TX

 

-

 

650

 

5,763

 

-

 

650

 

5,763

 

1,362

 

2007

 

2008

 

1329 Brown St.

Weatherford, TX

 

-

 

660

 

5,261

 

-

 

660

 

5,261

 

1,375

 

2006

 

2007

 

1818 Martin Drive

Wellingborough, UKF

 

-

 

1,480

 

5,724

 

-

 

1,480

 

5,724

 

322

 

2015

 

2015

 

159 Northampton

West Bend, WI

 

-

 

620

 

17,790

 

38

 

620

 

17,828

 

2,364

 

2010

 

2011

 

2130 Continental Dr

West Chester, PA

 

-

 

1,350

 

29,237

 

251

 

1,350

 

29,488

 

4,641

 

2011

 

1974

 

800 West Miner Street

West Orange, NJ

 

-

 

2,280

 

10,687

 

182

 

2,280

 

10,869

 

1,915

 

2011

 

1963

 

20 Summit Street

Westerville, OH

 

-

 

740

 

8,287

 

3,105

 

740

 

11,392

 

8,620

 

1998

 

2001

 

690 Cooper Rd.

Westfield, IN

 

-

 

890

 

15,964

 

-

 

890

 

15,964

 

1,019

 

2014

 

2013

 

937 E. 186th Street

Westfield, NJ(2)

 

-

 

2,270

 

16,589

 

497

 

2,270

 

17,086

 

2,961

 

2011

 

1970

 

1515 Lamberts Mill Road

Westlake, OH

 

-

 

1,330

 

17,926

 

-

 

1,330

 

17,926

 

7,346

 

2001

 

1985

 

27601 Westchester Pkwy.

Weston Super Mare, UKK

 

-

 

2,517

 

7,054

 

-

 

2,517

 

7,054

 

639

 

2013

 

2011

 

141b Milton Road

Westworth Village, TX

 

-

 

2,060

 

31,296

 

-

 

2,060

 

31,296

 

1,705

 

2014

 

2014

 

25 Leonard Trail

White Lake, MI

 

-

 

2,920

 

20,179

 

92

 

2,920

 

20,271

 

3,386

 

2010

 

2000

 

935 Union Lake Rd

Wichita, KS

 

-

 

1,400

 

11,000

 

-

 

1,400

 

11,000

 

3,955

 

2006

 

1997

 

505 North Maize Road

Wichita, KS

 

-

 

860

 

8,873

 

-

 

860

 

8,873

 

1,261

 

2011

 

2012

 

10604 E 13th Street North

Wichita, KS

 

13,208

 

629

 

19,749

 

-

 

629

 

19,752

 

2,302

 

2012

 

2009

 

2050 North Webb Road

Wichita, KS

 

-

 

260

 

2,240

 

81

 

260

 

2,321

 

67

 

2015

 

1992

 

900 N Bayshore Dr

Wichita, KS

 

-

 

-

 

-

 

11,034

 

900

 

10,134

 

1,360

 

2011

 

2012

 

10604 E 13th Street North

Wilkes-Barre, PA

 

-

 

570

 

2,301

 

44

 

570

 

2,345

 

603

 

2011

 

1992

 

300 Courtright Street

Williamstown, KY

 

-

 

70

 

6,430

 

-

 

70

 

6,430

 

2,183

 

2005

 

1987

 

201 Kimberly Lane

Wilmington, DE

 

-

 

800

 

9,494

 

59

 

800

 

9,553

 

1,621

 

2011

 

1970

 

810 S Broom Street

Wilmington, NC

 

-

 

210

 

2,991

 

-

 

210

 

2,991

 

1,419

 

1999

 

1999

 

3501 Converse Dr.

Wilmington, NC

 

-

 

400

 

15,356

 

-

 

400

 

15,356

 

955

 

2014

 

2012

 

3828 Independence Blvd

Windsor, CT

 

-

 

2,250

 

8,539

 

1,848

 

2,250

 

10,387

 

1,783

 

2011

 

1969

 

One Emerson Drive

Windsor, CT

 

-

 

1,800

 

600

 

944

 

1,800

 

1,544

 

394

 

2011

 

1974

 

One Emerson Drive

Winston-Salem, NC

 

-

 

360

 

2,514

 

459

 

360

 

2,973

 

1,130

 

2003

 

1996

 

2980 Reynolda Rd.

Winter Garden, FL

 

-

 

1,350

 

7,937

 

-

 

1,350

 

7,937

 

908

 

2012

 

2013

 

720 Roper Road

Witherwack, UKC

 

-

 

944

 

6,915

 

-

 

944

 

6,915

 

627

 

2013

 

2009

 

Whitchurch Road

Wolverhampton, UKG

 

-

 

1,573

 

6,678

 

-

 

1,573

 

6,678

 

610

 

2013

 

2011

 

378 Prestonwood Road

Worcester, MA

 

-

 

3,500

 

54,099

 

-

 

3,500

 

54,099

 

10,138

 

2007

 

2009

 

101 Barry Road

Worcester, MA

 

-

 

2,300

 

9,060

 

5,037

 

2,300

 

14,097

 

2,185

 

2008

 

1993

 

378 Plantation St.

Wyncote, PA

 

-

 

2,700

 

22,244

 

233

 

2,700

 

22,477

 

3,639

 

2011

 

1960

 

1245 Church Road

York, UKE

 

-

 

2,961

 

8,266

 

-

 

2,961

 

8,266

 

467

 

2014

 

2006

 

Rosetta Way, Boroughbridge Road

Youngsville, NC

 

-

 

380

 

10,689

 

-

 

380

 

10,689

 

647

 

2014

 

2013

 

100 Sunset Drive

Zionsville, IN

 

-

 

1,610

 

22,400

 

1,691

 

1,610

 

24,091

 

3,894

 

2010

 

2009

 

11755 N Michigan Rd

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Triple-net total

$

594,199

$

804,007

$

7,794,067

$

718,637

$

853,984

$

8,462,729

$

1,317,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

105

 

   

Welltower Inc.

 

 

Schedule III

 

 

Real Estate and Accumulated Depreciation

 

 

December 31, 2016

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

Initial Cost to Company

 

 

 

Gross Amount at Which Carried at Close of Period

 

 

 

 

 

 

Description

 

 

Encumbrances

 

Land

 

Building & Improvements

 

Cost Capitalized Subsequent to Acquisition

 

Land

 

Building & Improvements

 

Accumulated Depreciation(1)

 

Year Acquired

 

Year Built

 

Address

Seniors housing operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acton, MA

 

$

-

$

-

$

31,346

$

1,107

$

14

$

32,440

$

4,201

 

2013

 

2000

 

10 Devon Drive

Agawam, MA

 

 

6,334

 

880

 

10,044

 

629

 

959

 

10,594

 

2,441

 

2011

 

1996

 

153 Cardinal Drive

Albuquerque, NM

 

 

-

 

1,270

 

20,837

 

1,543

 

1,275

 

22,375

 

5,044

 

2010

 

1984

 

500 Paisano St NE

Alhambra, CA

 

 

-

 

600

 

6,305

 

8,987

 

600

 

15,292

 

1,342

 

2011

 

1923

 

1118 N. Stoneman Ave.

Altrincham, UKD

 

 

-

 

4,244

 

25,187

 

-

 

4,244

 

25,187

 

4,127

 

2012

 

2009

 

295 Hale Road

Amherstview, ON

 

 

591

 

473

 

4,446

 

236

 

500

 

4,654

 

530

 

2015

 

1974

 

4567 Bath Road

Arlington, TX

 

 

21,090

 

1,660

 

37,395

 

2,990

 

1,709

 

40,336

 

8,632

 

2012

 

2000

 

1250 West Pioneer Parkway

Arnprior, ON

 

 

412

 

788

 

6,283

 

331

 

813

 

6,590

 

1,148

 

2013

 

1991

 

15 Arthur Street

Atlanta, GA

 

 

-

 

2,100

 

20,603

 

749

 

2,154

 

21,298

 

2,843

 

2014

 

2000

 

1000 Lenox Park Blvd NE

Austin, TX

 

 

-

 

1,560

 

21,413

 

113

 

1,560

 

21,526

 

1,840

 

2014

 

2013

 

11330 Farrah Lane

Austin, TX

 

 

-

 

4,200

 

74,850

 

418

 

4,200

 

75,268

 

3,964

 

2015

 

2014

 

4310 Bee Caves Road

Avon, CT

 

 

18,645

 

1,550

 

30,571

 

2,290

 

1,580

 

32,831

 

8,359

 

2011

 

1998

 

101 Bickford Extension

Azusa, CA

 

 

-

 

570

 

3,141

 

6,941

 

570

 

10,082

 

2,656

 

1998

 

1953

 

125 W. Sierra Madre Ave.

Bagshot, UKJ

 

 

-

 

4,960

 

29,881

 

-

 

4,960

 

29,881

 

5,347

 

2012

 

2009

 

14 - 16 London Road

Banstead, UKJ

 

 

-

 

6,695

 

55,113

 

-

 

6,695

 

55,113

 

8,492

 

2012

 

2005

 

Croydon Lane

Basingstoke, UKJ

 

 

-

 

3,420

 

18,853

 

-

 

3,420

 

18,853

 

1,395

 

2014

 

2012

 

Grove Road

Basking Ridge, NJ

 

 

-

 

2,356

 

37,710

 

1,000

 

2,389

 

38,677

 

5,871

 

2013

 

2002

 

404 King George Road

Bassett, UKJ

 

 

-

 

4,874

 

32,304

 

-

 

4,874

 

32,304

 

5,540

 

2013

 

2006

 

111 Burgess Road

Baton Rouge, LA

 

 

9,186

 

790

 

29,436

 

367

 

801

 

29,792

 

4,477

 

2013

 

2009

 

9351 Siegen Lane

Beaconsfield, UKJ

 

 

-

 

5,566

 

50,952

 

-

 

5,566

 

50,952

 

7,642

 

2013

 

2009

 

30-34 Station Road

Beaconsfield, QC

 

 

-

 

1,149

 

17,484

 

739

 

1,197

 

18,175

 

3,954

 

2013

 

2008

 

505 Elm Avenue

Bedford, NH

 

 

-

 

-

 

-

 

33,235

 

2,548

 

30,687

 

4,123

 

2011

 

2012

 

5 Corporate Drive

Bee Cave, TX

 

 

-

 

1,820

 

21,084

 

634

 

1,820

 

21,718

 

1,153

 

2016

 

2014

 

14058 A Bee Cave Parkway

Bellevue, WA

 

 

-

 

2,800

 

19,004

 

1,543

 

2,816

 

20,531

 

3,885

 

2013

 

1998

 

15928 NE 8th Street

Belmont, CA

 

 

-

 

3,000

 

23,526

 

1,889

 

3,000

 

25,415

 

5,447

 

2011

 

1971

 

1301 Ralston Avenue

Belmont, CA

 

 

-

 

-

 

35,300

 

1,206

 

-

 

36,506

 

5,883

 

2013

 

2002

 

1010 Alameda de Las Pulgas

Berkeley, CA

 

 

12,663

 

3,050

 

32,677

 

2,058

 

3,050

 

34,735

 

716

 

2016

 

1966

 

2235 Sacramento Street

Bethesda, MD

 

 

-

 

-

 

45,309

 

500

 

3

 

45,807

 

7,170

 

2013

 

2009

 

8300 Burdett Road

Bethesda, MD

 

 

-

 

-

 

-

 

127

 

-

 

127

 

22

 

2013

 

2009

 

8300 Burdett Road

Bethesda, MD

 

 

-

 

-

 

-

 

405

 

-

 

405

 

51

 

2013

 

2009

 

8300 Burdett Road

Billerica, MA

 

 

-

 

1,619

 

21,381

 

657

 

1,624

 

22,034

 

1,852

 

2015

 

2000

 

20 Charnstaffe Lane

Birmingham, UKG

 

 

-

 

4

 

21,321

 

-

 

4

 

21,321

 

3,631

 

2013

 

2006

 

5 Church Road, Edgbaston

Birmingham, UKG

 

 

-

 

-

 

-

 

14,494

 

1,480

 

13,014

 

28

 

2015

 

2016

 

47 Bristol Road South

Birmingham, UKG

 

 

-

 

-

 

-

 

14,119

 

2,807

 

11,313

 

-

 

2015

 

2016

 

134 Jockey Road

Blainville, QC

 

 

-

 

2,077

 

8,902

 

399

 

2,141

 

9,237

 

2,400

 

2013

 

2008

 

50 des Chateaux Boulevard

Bloomfield Hills, MI

 

 

-

 

2,000

 

35,662

 

604

 

2,000

 

36,266

 

5,510

 

2013

 

2009

 

6790 Telegraph Road

Borehamwood, UKH

 

 

-

 

5,367

 

41,937

 

-

 

5,367

 

41,937

 

6,423

 

2012

 

2003

 

Edgwarebury Lane

Bothell, WA

 

 

-

 

1,350

 

13,439

 

1,928

 

1,361

 

15,357

 

1,270

 

2015

 

1988

 

10605 NE 185th Street

Boulder, CO

 

 

-

 

2,994

 

27,458

 

1,821

 

3,014

 

29,259

 

5,621

 

2013

 

2003

 

3955 28th Street

Bournemouth, UKK

 

 

-

 

5,527

 

42,547

 

-

 

5,527

 

42,547

 

5,235

 

2013

 

2008

 

42 Belle Vue Road

Braintree, MA

 

 

20,617

 

-

 

41,290

 

607

 

56

 

41,841

 

6,713

 

2013

 

2007

 

618 Granite Street

Brampton, ON

 

 

43,804

 

10,256

 

60,021

 

-

 

10,256

 

60,021

 

4,334

 

2015

 

2009

 

100 Ken Whillans Drive

Brighton, MA

 

 

10,127

 

2,100

 

14,616

 

1,060

 

2,109

 

15,667

 

3,583

 

2011

 

1995

 

50 Sutherland Road 

Brockport, NY

 

 

-

 

1,500

 

23,496

 

94

 

1,500

 

23,590

 

1,808

 

2015

 

1999

 

90 West Avenue

Brockville, ON

 

 

4,604

 

484

 

7,445

 

338

 

506

 

7,761

 

744

 

2015

 

1996

 

1026 Bridlewood Drive

Brookfield, CT

 

 

19,001

 

2,250

 

30,180

 

1,630

 

2,262

 

31,799

 

7,206

 

2011

 

1999

 

246A Federal Road 

Broomfield, CO

 

 

-

 

4,140

 

44,547

 

10,646

 

10,054

 

49,279

 

12,387

 

2013

 

2009

 

400 Summit Blvd

Brossard, QC

 

 

11,401

 

5,499

 

31,854

 

-

 

5,499

 

31,854

 

2,272

 

2015

 

1989

 

2455 Boulevard Rome

Buckingham, UKJ

 

 

-

 

2,979

 

13,880

 

-

 

2,979

 

13,880

 

969

 

2014

 

1883

 

Church Street

Buffalo Grove, IL

 

 

-

 

2,850

 

49,129

 

785

 

2,850

 

49,914

 

7,822

 

2012

 

2003

 

500 McHenry Road

Burbank, CA

 

 

-

 

4,940

 

43,466

 

1,003

 

4,940

 

44,469

 

8,242

 

2012

 

2002

 

455 E. Angeleno Avenue

Burbank, CA

 

 

19,935

 

3,610

 

50,817

 

2,503

 

3,610

 

53,320

 

941

 

2016

 

1985

 

2721 Willow Street

Burlington, ON

 

 

12,810

 

1,309

 

19,311

 

885

 

1,349

 

20,156

 

3,377

 

2013

 

1990

 

500 Appleby Line

Burlington, MA

 

 

-

 

2,443

 

34,354

 

1,022

 

2,522

 

35,298

 

5,935

 

2013

 

2005

 

24 Mall Road

Burlington, MA

 

 

-

 

2,750

 

57,488

 

3,024

 

2,750

 

60,512

 

-

 

2016

 

2011

 

50 Greenleaf Way

Calabasas, CA

 

 

-

 

-

 

6,438

 

877

 

-

 

7,315

 

4,377

 

2013

 

1972

 

25100 Calabasas Road

Calgary, AB

 

 

12,534

 

2,252

 

37,415

 

1,566

 

2,324

 

38,909

 

6,804

 

2013

 

2003

 

20 Promenade Way SE

Calgary, AB

 

 

14,376

 

2,793

 

41,179

 

1,565

 

2,888

 

42,650

 

7,196

 

2013

 

1998

 

80 Edenwold Drive NW

Calgary, AB

 

 

11,364

 

3,122

 

38,971

 

1,461

 

3,229

 

40,325

 

6,743

 

2013

 

1998

 

150 Scotia Landing NW

Calgary, AB

 

 

23,014

 

3,431

 

28,983

 

1,292

 

3,551

 

30,155

 

4,188

 

2013

 

1989

 

9229 16th Street SW

Calgary, AB

 

 

24,579

 

2,385

 

36,776

 

1,348

 

2,463

 

38,047

 

3,082

 

2015

 

2006

 

2220-162nd Avenue SW

Camberley, UKJ

 

 

-

 

2,654

 

5,736

 

16,874

 

7,217

 

18,048

 

106

 

2014

 

2016

 

Fernhill Road

Cardiff, UKL

 

 

-

 

3,191

 

12,566

 

-

 

3,191

 

12,566

 

2,665

 

2013

 

2007

 

127 Cyncoed Road

Cardiff by the Sea, CA

 

 

38,767

 

5,880

 

64,711

 

1,174

 

5,880

 

65,885

 

12,242

 

2011

 

2009

 

3535 Manchester Avenue

Carol Stream, IL

 

 

-

 

1,730

 

55,048

 

1,420

 

1,730

 

56,468

 

9,664

 

2012

 

2001

 

545 Belmont Lane

Cary, NC

 

 

-

 

740

 

45,240

 

390

 

740

 

45,630

 

5,956

 

2013

 

2009

 

1206 West Chatham Street

Cedar Park, TX

 

 

-

 

1,750

 

15,664

 

118

 

1,750

 

15,782

 

9

 

2016

 

2015

 

800 C-Bar Ranch Trail

Centerville, MA

 

 

-

 

1,300

 

27,357

 

1,041

 

1,324

 

28,375

 

5,481

 

2011

 

1998

 

22 Richardson Road

Cerritos, CA

 

 

-

 

-

 

27,494

 

3,554

 

-

 

31,048

 

779

 

2016

 

2002

 

11000 New Falcon Way

Chatham, ON

 

 

1,422

 

1,098

 

12,462

 

1,114

 

1,139

 

13,536

 

1,253

 

2015

 

1965

 

25 Keil Drive North

Chelmsford, MA

 

 

-

 

1,589

 

26,432

 

714

 

1,594

 

27,141

 

2,148

 

2015

 

1997

 

199 Chelmsford Street

Chesterfield, MO

 

 

-

 

1,857

 

48,366

 

798

 

1,857

 

49,164

 

6,929

 

2013

 

2001

 

1880 Clarkson Road

Chorleywood, UKH

 

 

-

 

5,636

 

43,191

 

-

 

5,636

 

43,191

 

6,942

 

2013

 

2007

 

High View, Rickmansworth Road

Chula Vista, CA

 

 

-

 

2,072

 

22,163

 

695

 

2,128

 

22,802

 

3,583

 

2013

 

2003

 

3302 Bonita Road

Church Crookham, UKJ

 

 

-

 

2,591

 

14,215

 

-

 

2,591

 

14,215

 

1,690

 

2014

 

2014

 

Bourley Road

Cincinnati, OH

 

 

-

 

2,060

 

109,388

 

10,021

 

2,060

 

119,409

 

19,242

 

2007

 

2010

 

5445 Kenwood Road

Claremont, CA

 

 

-

 

2,430

 

9,928

 

1,100

 

2,438

 

11,019

 

1,963

 

2013

 

2001

 

2053 North Towne Avenue

Cohasset, MA

 

 

-

 

2,485

 

26,147

 

1,202

 

2,487

 

27,347

 

4,369

 

2013

 

1998

 

125 King Street (Rt 3A)

Colorado Springs, CO

 

 

-

 

800

 

14,756

 

1,409

 

840

 

16,125

 

2,433

 

2013

 

2001

 

2105 University Park Boulevard

Concord, NH

 

 

13,081

 

720

 

21,164

 

702

 

779

 

21,807

 

4,171

 

2011

 

2001

 

300 Pleasant Street 

Coquitlam, BC

 

 

10,245

 

3,047

 

24,567

 

1,035

 

3,142

 

25,507

 

5,378

 

2013

 

1990

 

1142 Dufferin Street

Costa Mesa, CA

 

 

-

 

2,050

 

19,969

 

1,176

 

2,050

 

21,145

 

4,508

 

2011

 

1965

 

350 West Bay St

Crystal Lake, IL

 

 

-

 

875

 

12,461

 

1,040

 

893

 

13,483

 

2,575

 

2013

 

2001

 

751 E Terra Cotta Avenue

Dallas, TX

 

 

-

 

1,080

 

9,655

 

612

 

1,080

 

10,267

 

2,202

 

2011

 

1997

 

3611 Dickason Avenue

Dallas, TX

 

 

-

 

6,330

 

114,794

 

637

 

6,330

 

115,431

 

7,170

 

2015

 

2013

 

3535 N Hall Street

Danvers, MA

 

 

9,175

 

1,120

 

14,557

 

910

 

1,145

 

15,442

 

3,328

 

2011

 

2000

 

1 Veronica Drive

Danvers, MA

 

 

-

 

2,203

 

28,761

 

154

 

2,257

 

28,860

 

2,865

 

2015

 

1997

 

9 Summer Street

Davenport, IA

 

 

-

 

1,403

 

35,893

 

3,068

 

1,480

 

38,884

 

7,930

 

2006

 

2009

 

4500 Elmore Ave.

Decatur, GA

 

 

-

 

-

 

-

 

30,456

 

1,946

 

28,510

 

4,979

 

2013

 

1998

 

920 Clairemont Avenue

Denver, CO

 

 

12,283

 

1,450

 

19,389

 

3,009

 

1,470

 

22,379

 

3,490

 

2012

 

1997

 

4901 South Monaco Street

Denver, CO

 

 

-

 

2,910

 

35,838

 

1,002

 

2,933

 

36,817

 

7,299

 

2012

 

2007

 

8101 E Mississippi Avenue

Dix Hills, NY

 

 

-

 

3,808

 

39,014

 

1,059

 

3,809

 

40,072

 

6,394

 

2013

 

2003

 

337 Deer Park Road

Dollard-Des-Ormeaux, QC

 

 

-

 

1,957

 

14,431

 

629

 

2,017

 

15,000

 

3,932

 

2013

 

2008

 

4377 St. Jean Blvd

Dresher, PA

 

 

7,103

 

1,900

 

10,664

 

774

 

1,900

 

11,438

 

2,871

 

2013

 

2006

 

1650 Susquehanna Road

Dublin, OH

 

 

-

 

1,680

 

43,423

 

5,727

 

1,775

 

49,055

 

10,839

 

2010

 

1990

 

6470 Post Rd

East Haven, CT

 

 

22,079

 

2,660

 

35,533

 

2,234

 

2,681

 

37,746

 

10,112

 

2011

 

2000

 

111 South Shore Drive 

East Meadow, NY

 

 

-

 

69

 

45,991

 

848

 

124

 

46,783

 

7,311

 

2013

 

2002

 

1555 Glen Curtiss Boulevard

East Setauket, NY

 

 

-

 

4,920

 

37,354

 

1,047

 

4,975

 

38,347

 

5,962

 

2013

 

2002

 

1 Sunrise Drive

Eastbourne, UKJ

 

 

-

 

4,145

 

33,744

 

-

 

4,145

 

33,744

 

5,511

 

2013

 

2008

 

6 Upper Kings Drive

Edgbaston, UKG

 

 

-

 

-

 

-

 

16,689

 

2,720

 

13,969

 

638

 

2014

 

2015

 

Pershore Road

Edgewater, NJ

 

 

-

 

4,561

 

25,047

 

1,000

 

4,564

 

26,044

 

4,349

 

2013

 

2000

 

351 River Road

Edison, NJ

 

 

-

 

1,892

 

32,314

 

1,051

 

1,896

 

33,361

 

7,579

 

2013

 

1996

 

1801 Oak Tree Road

Edmonds, WA

 

 

10,991

 

1,650

 

24,449

 

541

 

1,651

 

24,989

 

2,056

 

2015

 

1976

 

21500 72nd Avenue West

Edmonton, AB

 

 

9,222

 

1,589

 

29,819

 

1,176

 

1,638

 

30,946

 

5,496

 

2013

 

1999

 

103 Rabbit Hill Court NW

Edmonton, AB

 

 

11,914

 

2,063

 

37,293

 

1,587

 

2,127

 

38,816

 

8,990

 

2013

 

1968

 

10015 103rd Avenue NW

Encinitas, CA

 

 

-

 

1,460

 

7,721

 

2,377

 

1,460

 

10,098

 

4,102

 

2000

 

1988

 

335 Saxony Rd.

Encino, CA

 

 

-

 

5,040

 

46,255

 

1,195

 

5,040

 

47,450

 

8,407

 

2012

 

2003

 

15451 Ventura Boulevard

Escondido, CA

 

 

-

 

1,520

 

24,024

 

1,300

 

1,520

 

25,324

 

5,450

 

2011

 

1987

 

1500 Borden Rd

Esher, UKJ

 

 

-

 

5,783

 

48,361

 

-

 

5,783

 

48,361

 

6,956

 

2013

 

2006

 

42 Copsem Lane

Fairfax, VA

 

 

-

 

19

 

2,678

 

175

 

47

 

2,825

 

708

 

2013

 

1991

 

9207 Arlington Boulevard

Fairfield, NJ

 

 

-

 

3,120

 

43,868

 

934

 

3,175

 

44,747

 

7,192

 

2013

 

1998

 

47 Greenbrook Road

Fareham, UKJ

 

 

-

 

3,408

 

17,970

 

-

 

3,408

 

17,970

 

1,699

 

2014

 

2012

 

Redlands Lane

Flossmoor, IL

 

 

-

 

1,292

 

9,496

 

1,339

 

1,339

 

10,788

 

2,209

 

2013

 

2000

 

19715 Governors Highway

Folsom, CA

 

 

-

 

1,490

 

32,754

 

11

 

1,490

 

32,765

 

2,292

 

2015

 

2014

 

1574 Creekside Drive

Fort Worth, TX

 

 

-

 

2,080

 

27,888

 

3,217

 

2,085

 

31,100

 

6,747

 

2012

 

2001

 

2151 Green Oaks Road

Fort Worth, TX

 

 

-

 

1,740

 

19,799

 

961

 

1,740

 

20,760

 

-

 

2016

 

2014

 

7001 Bryant Irvin Road

Franklin, MA

 

 

-

 

2,430

 

30,597

 

2,416

 

2,442

 

33,000

 

4,550

 

2013

 

1999

 

4 Forge Hill Road

Frome, UKK

 

 

-

 

2,720

 

14,813

 

-

 

2,720

 

14,813

 

1,160

 

2014

 

2012

 

Welshmill Lane

Fullerton, CA

 

 

12,537

 

1,964

 

19,989

 

638

 

1,998

 

20,593

 

3,484

 

2013

 

2008

 

2226 North Euclid Street

Gahanna, OH

 

 

-

 

772

 

11,214

 

1,209

 

787

 

12,408

 

1,870

 

2013

 

1998

 

775 East Johnstown Road

Gilbert, AZ

 

 

16,042

 

2,160

 

28,246

 

472

 

2,160

 

28,718

 

6,703

 

2013

 

2008

 

580 S. Gilbert Road

Gilroy, CA

 

 

-

 

760

 

13,880

 

24,615

 

1,575

 

37,680

 

9,028

 

2006

 

2007

 

7610 Isabella Way

Glen Cove, NY

 

 

-

 

4,594

 

35,236

 

1,447

 

4,615

 

36,662

 

7,045

 

2013

 

1998

 

39 Forest Avenue

Glenview, IL

 

 

-

 

2,090

 

69,288

 

1,542

 

2,090

 

70,830

 

11,838

 

2012

 

2001

 

2200 Golf Road

Golden Valley, MN

 

 

19,396

 

1,520

 

33,513

 

827

 

1,545

 

34,314

 

5,088

 

2013

 

2005

 

4950 Olson Memorial Highway

Grimsby, ON

 

 

-

 

636

 

5,617

 

259

 

655

 

5,857

 

651

 

2015

 

1991

 

84 Main Street East

Grosse Pointe Woods, MI

 

 

-

 

950

 

13,662

 

250

 

950

 

13,912

 

2,025

 

2013

 

2006

 

1850 Vernier Road

Grosse Pointe Woods, MI

 

 

-

 

1,430

 

31,777

 

799

 

1,430

 

32,576

 

4,721

 

2013

 

2005

 

21260 Mack Avenue

Guelph, ON

 

 

4,313

 

1,190

 

7,597

 

380

 

1,237

 

7,930

 

1,098

 

2015

 

1978

 

165 Cole Road

Guildford, UKJ

 

 

-

 

5,361

 

56,494

 

-

 

5,361

 

56,494

 

8,384

 

2013

 

2006

 

Astolat Way, Peasmarsh

Gurnee, IL

 

 

-

 

890

 

27,931

 

1,005

 

935

 

28,891

 

4,033

 

2013

 

2002

 

500 North Hunt Club Road

Hamden, CT

 

 

14,857

 

1,460

 

24,093

 

1,296

 

1,487

 

25,362

 

5,965

 

2011

 

1999

 

35 Hamden Hills Drive 

Hampshire, UKJ

 

 

-

 

4,172

 

26,035

 

-

 

4,172

 

26,035

 

4,104

 

2013

 

2006

 

22-26 Church Road

Haverhill, MA

 

 

-

 

1,720

 

50,046

 

831

 

1,723

 

50,873

 

4,973

 

2015

 

1997

 

254 Amesbury Road

Henderson, NV

 

 

-

 

880

 

29,809

 

471

 

895

 

30,265

 

4,784

 

2011

 

2009

 

1935 Paseo Verde Parkway

Henderson, NV

 

 

5,572

 

1,190

 

11,600

 

499

 

1,212

 

12,078

 

3,007

 

2013

 

2008

 

1555 West Horizon Ridge Parkway

Highland Park, IL

 

 

-

 

2,250

 

25,313

 

847

 

2,259

 

26,150

 

4,895

 

2013

 

2005

 

1601 Green Bay Road

Hingham, MA

 

 

-

 

1,440

 

32,292

 

64

 

1,440

 

32,356

 

2,840

 

2015

 

2012

 

1 Sgt. William B Terry Drive

Holbrook, NY

 

 

-

 

3,957

 

35,337

 

773

 

4,016

 

36,051

 

5,617

 

2013

 

2001

 

320 Patchogue Holbrook Road

Horley, UKJ

 

 

-

 

2,332

 

12,144

 

-

 

2,332

 

12,144

 

1,457

 

2014

 

2014

 

Court Lodge Road

Houston, TX

 

 

-

 

3,830

 

55,674

 

5,115

 

3,830

 

60,789

 

11,699

 

2012

 

1998

 

2929 West Holcombe Boulevard

Houston, TX

 

 

17,274

 

1,040

 

31,965

 

5,258

 

1,044

 

37,218

 

6,026

 

2012

 

1999

 

505 Bering Drive

Houston, TX

 

 

-

 

1,750

 

15,603

 

210

 

1,750

 

15,813

 

9

 

2016

 

2014

 

10120 Louetta Road

Houston, TX

 

 

-

 

960

 

27,598

 

1,538

 

960

 

29,136

 

6,194

 

2011

 

1995

 

10225 Cypresswood Dr

Hove, UKJ

 

 

-

 

1,360

 

6,979

 

-

 

1,360

 

6,979

 

656

 

2014

 

1987

 

Furze Hill

Huntington Beach, CA

 

 

-

 

3,808

 

31,172

 

1,743

 

3,886

 

32,838

 

6,231

 

2013

 

2004

 

7401 Yorktown Avenue

Irving, TX

 

 

-

 

1,030

 

6,823

 

1,421

 

1,030

 

8,244

 

2,122

 

2007

 

1999

 

8855 West Valley Ranch Parkway

Johns Creek, GA

 

 

-

 

1,580

 

23,285

 

362

 

1,588

 

23,639

 

3,789

 

2013

 

2009

 

11405 Medlock Bridge Road

Kanata, ON

 

 

-

 

1,689

 

28,670

 

-

 

1,689

 

28,670

 

3,951

 

2012

 

2005

 

70 Stonehaven Drive

Kansas City, MO

 

 

-

 

1,820

 

34,898

 

4,138

 

1,845

 

39,011

 

8,933

 

2010

 

1980

 

12100 Wornall Road

Kansas City, MO

 

 

5,950

 

1,930

 

39,997

 

3,760

 

1,963

 

43,724

 

10,341

 

2010

 

1986

 

6500 North Cosby Ave

Kansas City, MO

 

 

-

 

541

 

23,962

 

52

 

541

 

24,015

 

1,713

 

2015

 

2014

 

6460 North Cosby Avenue

Kelowna, BC

 

 

5,802

 

2,688

 

13,647

 

620

 

2,771

 

14,184

 

3,047

 

2013

 

1999

 

863 Leon Avenue

Kennebunk, ME

 

 

-

 

2,700

 

30,204

 

3,199

 

3,022

 

33,081

 

9,952

 

2013

 

2006

 

One Huntington Common Drive

Kingston, ON

 

 

4,614

 

1,030

 

11,416

 

549

 

1,061

 

11,933

 

1,144

 

2015

 

1983

 

181 Ontario Street

Kingwood, TX

 

 

-

 

480

 

9,777

 

1,033

 

480

 

10,810

 

2,148

 

2011

 

1999

 

22955 Eastex Freeway

Kirkland, WA

 

 

24,600

 

3,450

 

38,709

 

595

 

3,515

 

39,239

 

6,861

 

2011

 

2009

 

14 Main Street South

Kitchener, ON

 

 

1,473

 

640

 

2,744

 

161

 

660

 

2,885

 

581

 

2013

 

1979

 

164 - 168 Ferfus Avenue

Kitchener, ON

 

 

4,645

 

1,130

 

9,939

 

437

 

1,167

 

10,338

 

1,870

 

2013

 

1988

 

20 Fieldgate Street

Kitchener, ON

 

 

3,539

 

1,093

 

7,327

 

372

 

1,129

 

7,663

 

1,801

 

2013

 

1964

 

290 Queen Street South

Kitchener, ON

 

 

13,146

 

1,341

 

13,939

 

2,419

 

1,341

 

16,358

 

262

 

2016

 

2003

 

1250 Weber Street E

La Palma, CA

 

 

-

 

2,950

 

16,591

 

640

 

2,966

 

17,216

 

2,835

 

2013

 

2003

 

5321 La Palma Avenue

Lafayette Hill, PA

 

 

-

 

1,750

 

11,848

 

1,738

 

1,867

 

13,469

 

2,909

 

2013

 

1998

 

429 Ridge Pike

Laguna Hills, CA

 

 

-

 

12,820

 

75,926

 

10,284

 

12,820

 

86,210

 

-

 

2016

 

1988

 

24903 Moulton Parkway

Laguna Woods, CA

 

 

-

 

11,280

 

76,485

 

7,142

 

11,280

 

83,627

 

1,628

 

2016

 

1987

 

24441 Calle Sonora

Laguna Woods, CA

 

 

-

 

9,150

 

57,842

 

5,246

 

9,150

 

63,088

 

1,358

 

2016

 

1986

 

24962 Calle Aragon

Lake Zurich, IL

 

 

-

 

1,470

 

9,830

 

2,799

 

1,470

 

12,629

 

2,074

 

2011

 

2007

 

550 America Court

Lawrenceville, GA

 

 

15,602

 

1,500

 

29,003

 

507

 

1,508

 

29,502

 

4,799

 

2013

 

2008

 

1375 Webb Gin House Road

Leawood, KS

 

 

15,328

 

2,490

 

32,493

 

3,191

 

5,690

 

32,484

 

6,775

 

2012

 

1999

 

4400 West 115th Street

Lenexa, KS

 

 

9,581

 

826

 

26,251

 

599

 

836

 

26,841

 

4,937

 

2013

 

2006

 

15055 West 87th Street Parkway

Leominster, MA

 

 

-

 

944

 

23,164

 

534

 

947

 

23,695

 

2,240

 

2015

 

1999

 

1160 Main Street

Lincroft, NJ

 

 

-

 

9

 

19,958

 

1,268

 

9

 

21,226

 

3,302

 

2013

 

2002

 

734 Newman Springs Road

Lombard, IL

 

 

16,603

 

2,130

 

59,943

 

501

 

2,130

 

60,444

 

9,202

 

2013

 

2009

 

2210 Fountain Square Dr

London, UKI

 

 

-

 

3,121

 

10,027

 

-

 

3,121

 

10,027

 

817

 

2014

 

2012

 

71 Hatch Lane

London, ON

 

 

835

 

987

 

8,228

 

473

 

1,037

 

8,651

 

969

 

2015

 

1989

 

760 Horizon Drive

London, ON

 

 

6,329

 

1,969

 

16,985

 

1,087

 

2,029

 

18,012

 

2,153

 

2015

 

1953

 

1486 Richmond Street North

London, ON

 

 

-

 

1,445

 

13,631

 

570

 

1,598

 

14,048

 

1,155

 

2015

 

1950

 

81 Grand Avenue

Longueuil, QC

 

 

9,905

 

3,992

 

23,711

 

852

 

4,166

 

24,388

 

1,771

 

2015

 

1989

 

70 Rue Levis

Los Angeles, CA

 

 

-

 

-

 

11,430

 

2,034

 

-

 

13,464

 

2,849

 

2008

 

1971

 

330 North Hayworth Avenue

Los Angeles, CA

 

 

62,843

 

-

 

114,438

 

1,599

 

-

 

116,037

 

22,542

 

2011

 

2009

 

10475 Wilshire Boulevard

Los Angeles, CA

 

 

-

 

3,540

 

19,007

 

1,151

 

3,540

 

20,158

 

3,470

 

2012

 

2001

 

2051 N. Highland Avenue

Los Angeles, CA

 

 

-

 

-

 

28,050

 

1,122

 

-

 

29,172

 

547

 

2016

 

2006

 

4061 Grand View Boulevard

Louisville, KY

 

 

-

 

2,420

 

20,816

 

1,039

 

2,420

 

21,855

 

3,954

 

2012

 

1999

 

4600 Bowling Boulevard

Louisville, KY

 

 

10,977

 

1,600

 

20,326

 

333

 

1,600

 

20,659

 

3,774

 

2013

 

2010

 

6700 Overlook Drive

Lynnfield, MA

 

 

-

 

3,165

 

45,200

 

1,817

 

3,165

 

47,016

 

7,489

 

2013

 

2006

 

55 Salem Street

Malvern, PA

 

 

-

 

1,651

 

17,194

 

1,318

 

1,708

 

18,454

 

4,281

 

2013

 

1998

 

324 Lancaster Avenue

Mansfield, MA

 

 

27,347

 

3,320

 

57,011

 

5,846

 

3,431

 

62,747

 

13,897

 

2011

 

1998

 

25 Cobb Street 

Maple Ridge, BC

 

 

8,781

 

2,875

 

11,922

 

-

 

2,875

 

11,922

 

926

 

2015

 

2009

 

12241 224th Street

Marieville, QC

 

 

6,762

 

1,278

 

12,113

 

87

 

1,323

 

12,155

 

927

 

2015

 

2002

 

425 rue Claude de Ramezay

Markham, ON

 

 

39,383

 

3,727

 

48,939

 

1,801

 

3,848

 

50,620

 

11,766

 

2013

 

1981

 

7700 Bayview Avenue

Marlboro, NJ

 

 

-

 

2,222

 

14,888

 

680

 

2,222

 

15,568

 

2,772

 

2013

 

2002

 

3A South Main Street

Medicine Hat, AB

 

 

11,092

 

1,432

 

14,141

 

137

 

1,476

 

14,234

 

2,156

 

2015

 

1999

 

223 Park Meadows Drive SE

Memphis, TN

 

 

-

 

1,800

 

17,744

 

1,116

 

1,800

 

18,860

 

4,350

 

2012

 

1999

 

6605 Quail Hollow Road

Meriden, CT

 

 

9,056

 

1,500

 

14,874

 

1,032

 

1,538

 

15,868

 

4,645

 

2011

 

2001

 

511 Kensington Avenue 

Metairie, LA

 

 

13,013

 

725

 

27,708

 

380

 

725

 

28,089

 

4,051

 

2013

 

2009

 

3732 West Esplanade Ave. S

Middletown, CT

 

 

14,916

 

1,430

 

24,242

 

1,226

 

1,439

 

25,458

 

6,148

 

2011

 

1999

 

645 Saybrook Road

Middletown, RI

 

 

15,863

 

2,480

 

24,628

 

1,577

 

2,511

 

26,174

 

6,217

 

2011

 

1998

 

303 Valley Road

Milford, CT

 

 

11,128

 

3,210

 

17,364

 

1,420

 

3,213

 

18,781

 

4,973

 

2011

 

1999

 

77 Plains Road 

Milton, ON

 

 

14,760

 

4,542

 

25,321

 

2,068

 

4,687

 

27,244

 

1,920

 

2015

 

2012

 

611 Farmstead Drive

Minnetonka, MN

 

 

13,938

 

2,080

 

24,360

 

1,923

 

2,376

 

25,987

 

4,604

 

2012

 

1999

 

500 Carlson Parkway

Minnetonka, MN

 

 

15,959

 

920

 

29,344

 

564

 

920

 

29,908

 

4,241

 

2013

 

2006

 

18605 Old Excelsior Blvd.

Mission Viejo, CA

 

 

14,375

 

6,600

 

52,118

 

4,025

 

6,600

 

56,143

 

1,031

 

2016

 

1998

 

27783 Center Drive

Mississauga, ON

 

 

9,046

 

1,602

 

17,996

 

729

 

1,651

 

18,675

 

3,274

 

2013

 

1984

 

1130 Bough Beeches Boulevard

Mississauga, ON

 

 

3,046

 

873

 

4,655

 

270

 

900

 

4,899

 

872

 

2013

 

1978

 

3051 Constitution Boulevard

Mississauga, ON

 

 

19,440

 

3,649

 

35,137

 

1,569

 

3,778

 

36,577

 

4,676

 

2015

 

1988

 

1490 Rathburn Road East

Mississauga, ON

 

 

6,191

 

2,548

 

15,158

 

842

 

2,626

 

15,922

 

2,359

 

2015

 

1989

 

85 King Street East

Mobberley, UKD

 

 

-

 

5,146

 

26,665

 

-

 

5,146

 

26,665

 

5,676

 

2013

 

2007

 

Barclay Park, Hall Lane

Monterey, CA

 

 

-

 

6,440

 

29,101

 

680

 

6,440

 

29,781

 

4,786

 

2013

 

2009

 

1110 Cass St.

Montgomery Village, MD

 

 

-

 

3,530

 

18,246

 

5,175

 

3,570

 

23,381

 

6,912

 

2013

 

1993

 

19310 Club House Road

Moose Jaw, SK

 

 

2,507

 

582

 

12,973

 

584

 

600

 

13,539

 

2,392

 

2013

 

2001

 

425 4th Avenue NW

Mystic, CT

 

 

11,128

 

1,400

 

18,274

 

860

 

1,427

 

19,107

 

4,431

 

2011

 

2001

 

20 Academy Lane  Mystic

Naperville, IL

 

 

-

 

1,550

 

12,237

 

2,227

 

1,550

 

14,464

 

2,868

 

2012

 

2013

 

1936 Brookdale Road

Naperville, IL

 

 

-

 

1,540

 

28,204

 

887

 

1,540

 

29,091

 

4,868

 

2013

 

2002

 

535 West Ogden Avenue

Naples, FL

 

 

57,939

 

8,989

 

119,398

 

2,012

 

9,068

 

121,331

 

8,426

 

2015

 

2000

 

4800 Aston Gardens Way

Nashua, NH

 

 

-

 

1,264

 

43,026

 

492

 

1,264

 

43,519

 

3,149

 

2015

 

1999

 

674 West Hollis Street

Nashville, TN

 

 

-

 

3,900

 

35,788

 

2,004

 

3,900

 

37,792

 

7,958

 

2012

 

1999

 

4206 Stammer Place

Needham, MA

 

 

-

 

1,240

 

32,992

 

1,068

 

1,240

 

34,060

 

-

 

2016

 

2011

 

880 Greendale Avenue

Nepean, ON

 

 

5,794

 

1,575

 

5,770

 

383

 

1,638

 

6,090

 

1,101

 

2015

 

1988

 

1 Mill Hill Road

Newbury, UKJ

 

 

-

 

-

 

-

 

15,646

 

2,850

 

12,796

 

85

 

2015

 

2016

 

370 London Road

Newburyport, MA

 

 

-

 

1,750

 

29,187

 

1,063

 

1,750

 

30,250

 

-

 

2016

 

2015

 

4 Wallace Bashaw Junior Way

Newmarket, UKH

 

 

-

 

4,071

 

11,902

 

-

 

4,071

 

11,902

 

1,212

 

2014

 

2011

 

Jeddah Way

Newton, MA

 

 

26,992

 

2,250

 

43,614

 

992

 

2,263

 

44,593

 

9,596

 

2011

 

1996

 

2300 Washington Street

Newton, MA

 

 

15,558

 

2,500

 

30,681

 

1,897

 

2,514

 

32,564

 

7,387

 

2011

 

1996

 

280 Newtonville Avenue 

Newton, MA

 

 

-

 

3,360

 

25,099

 

1,508

 

3,385

 

26,582

 

6,339

 

2011

 

1994

 

430 Centre Street

Newtown Square, PA

 

 

-

 

1,930

 

14,420

 

669

 

1,941

 

15,078

 

3,629

 

2013

 

2004

 

333 S. Newtown Street Rd.

Niagara Falls, ON

 

 

6,814

 

1,225

 

7,963

 

380

 

1,263

 

8,305

 

1,025

 

2015

 

1991

 

7860 Lundy's Lane

Niantic, CT

 

 

-

 

1,320

 

25,986

 

4,266

 

1,334

 

30,238

 

5,525

 

2011

 

2001

 

417 Main Street

North Andover, MA

 

 

21,901

 

1,960

 

34,976

 

1,459

 

2,019

 

36,377

 

7,872

 

2011

 

1995

 

700 Chickering Road 

North Chelmsford, MA

 

 

11,542

 

880

 

18,478

 

839

 

927

 

19,271

 

3,938

 

2011

 

1998

 

2 Technology Drive 

North Dartmouth, MA

 

 

-

 

1,700

 

35,337

 

1,463

 

1,700

 

36,800

 

-

 

2016

 

1997

 

239 Cross Road

North Tustin, CA

 

 

-

 

2,880

 

18,059

 

562

 

2,901

 

18,600

 

2,510

 

2013

 

2000

 

12291 Newport Avenue

Oak Park, IL

 

 

-

 

1,250

 

40,383

 

1,058

 

1,250

 

41,441

 

7,219

 

2012

 

2004

 

1035 Madison Street

Oakland, CA

 

 

-

 

3,877

 

47,508

 

2,539

 

3,900

 

50,024

 

8,007

 

2013

 

1999

 

11889 Skyline Boulevard

Oakton, VA

 

 

-

 

2,250

 

37,576

 

1,753

 

2,260

 

39,319

 

6,066

 

2013

 

1997

 

2863 Hunter Mill Road

Oakville, ON

 

 

5,890

 

1,252

 

7,382

 

322

 

1,291

 

7,666

 

1,400

 

2013

 

1982

 

289 and 299 Randall Street

Oakville, ON

 

 

10,145

 

2,134

 

29,963

 

1,310

 

2,214

 

31,192

 

5,960

 

2013

 

1994

 

25 Lakeshore Road West

Oakville, ON

 

 

5,306

 

1,271

 

13,754

 

674

 

1,310

 

14,389

 

2,227

 

2013

 

1988

 

345 Church Street

Oceanside, CA

 

 

-

 

2,160

 

18,352

 

3,518

 

2,202

 

21,829

 

4,566

 

2011

 

2005

 

3500 Lake Boulevard

Okotoks, AB

 

 

18,174

 

714

 

20,943

 

716

 

736

 

21,636

 

2,660

 

2015

 

2010

 

51 Riverside Gate

Oshawa, ON

 

 

3,119

 

841

 

7,570

 

363

 

882

 

7,892

 

1,464

 

2013

 

1991

 

649 King Street East

Ottawa, ON

 

 

10,221

 

1,341

 

15,425

 

1,018

 

1,395

 

16,388

 

1,400

 

2015

 

2001

 

110 Berrigan Drive

Ottawa, ON

 

 

19,153

 

3,454

 

23,309

 

1,033

 

3,606

 

24,190

 

3,854

 

2015

 

1966

 

2370 Carling Avenue

Ottawa, ON

 

 

22,027

 

4,305

 

39,106

 

-

 

4,305

 

39,106

 

2,868

 

2015

 

2005

 

751 Peter Morand Crescent

Ottawa, ON

 

 

6,720

 

2,103

 

18,421

 

2,337

 

2,176

 

20,685

 

1,506

 

2015

 

1989

 

1 Eaton Street

Ottawa, ON

 

 

12,149

 

2,963

 

26,424

 

2,093

 

3,054

 

28,425

 

2,127

 

2015

 

2008

 

691 Valin Street

Ottawa, ON

 

 

10,138

 

1,561

 

18,170

 

848

 

1,612

 

18,966

 

1,440

 

2015

 

2006

 

22 Barnstone Drive

Ottawa, ON

 

 

13,924

 

3,403

 

31,090

 

2,159

 

3,511

 

33,142

 

2,360

 

2015

 

2009

 

990 Hunt Club Road

Ottawa, ON

 

 

18,783

 

3,411

 

28,335

 

4,221

 

3,516

 

32,451

 

2,524

 

2015

 

2009

 

2 Valley Stream Drive

Ottawa, ON

 

 

2,991

 

724

 

4,710

 

215

 

747

 

4,902

 

904

 

2013

 

1995

 

1345 Ogilvie Road

Ottawa, ON

 

 

2,180

 

818

 

2,165

 

1,129

 

702

 

3,409

 

690

 

2013

 

1993

 

370 Kennedy Lane

Ottawa, ON

 

 

10,626

 

2,809

 

27,299

 

1,134

 

2,899

 

28,343

 

5,910

 

2013

 

1998

 

43 Aylmer Avenue

Ottawa, ON

 

 

4,795

 

1,156

 

9,758

 

439

 

1,221

 

10,132

 

1,620

 

2013

 

1998

 

1351 Hunt Club Road

Ottawa, ON

 

 

6,246

 

746

 

7,800

 

426

 

775

 

8,198

 

1,410

 

2013

 

1999

 

140 Darlington Private

Ottawa, ON

 

 

9,389

 

1,176

 

12,764

 

715

 

1,228

 

13,427

 

1,176

 

2015

 

1987

 

10 Vaughan Street

Overland Park, KS

 

 

3,405

 

1,540

 

16,269

 

1,177

 

1,728

 

17,258

 

2,992

 

2012

 

1998

 

9201 Foster

Palo Alto, CA

 

 

16,535

 

-

 

39,639

 

1,937

 

22

 

41,554

 

6,344

 

2013

 

2007

 

2701 El Camino Real

Paramus, NJ

 

 

-

 

2,840

 

35,728

 

1,457

 

2,851

 

37,174

 

5,520

 

2013

 

1998

 

567 Paramus Road

Parkland, FL

 

 

57,514

 

4,880

 

111,481

 

1,612

 

4,885

 

113,088

 

8,239

 

2015

 

2000

 

5999 University Drive

Peabody, MA

 

 

6,235

 

-

 

-

 

19,199

 

2,250

 

16,949

 

1,855

 

2013

 

1994

 

73 Margin Street

Pembroke, ON

 

 

-

 

1,931

 

9,427

 

-

 

1,931

 

9,427

 

1,320

 

2012

 

1999

 

1111 Pembroke Street West

Pittsburgh, PA

 

 

-

 

1,580

 

18,017

 

427

 

1,587

 

18,436

 

3,346

 

2013

 

2009

 

900 Lincoln Club Dr.

Placentia, CA

 

 

-

 

8,480

 

17,076

 

1,663

 

8,480

 

18,739

 

578

 

2016

 

1987

 

1180 N Bradford Avenue

Plainview, NY

 

 

-

 

3,066

 

19,901

 

597

 

3,174

 

20,390

 

2,923

 

2013

 

2001

 

1231 Old Country Road

Plano, TX

 

 

28,215

 

3,120

 

59,950

 

1,009

 

3,120

 

60,959

 

13,352

 

2013

 

2006

 

4800 West Parker Road

Plano, TX

 

 

-

 

1,750

 

15,390

 

418

 

1,750

 

15,808

 

9

 

2016

 

2014

 

3690 Mapleshade Lane

Playa Vista, CA

 

 

-

 

1,580

 

40,531

 

862

 

1,584

 

41,389

 

6,732

 

2013

 

2006

 

5555 Playa Vista Drive

Plymouth, MA

 

 

-

 

1,444

 

34,951

 

625

 

1,444

 

35,576

 

3,016

 

2015

 

1998

 

157 South Street

Plymouth, MA

 

 

13,742

 

2,550

 

35,055

 

2,004

 

2,550

 

37,059

 

-

 

2016

 

1970

 

60 Stafford Hill

Port Perry, ON

 

 

9,723

 

3,685

 

26,788

 

2,405

 

3,799

 

29,079

 

2,005

 

2015

 

2009

 

15987 Simcoe Street

Providence, RI

 

 

-

 

2,655

 

21,910

 

-

 

2,655

 

21,910

 

8,265

 

2011

 

1998

 

700 Smith Street

Purley, UKI

 

 

-

 

7,365

 

35,161

 

-

 

7,365

 

35,161

 

6,581

 

2012

 

2005

 

21 Russell Hill Road

Queensbury, NY

 

 

-

 

1,260

 

21,744

 

655

 

1,260

 

22,399

 

1,712

 

2015

 

1999

 

27 Woodvale Road

Quincy, MA

 

 

-

 

1,350

 

12,584

 

765

 

1,423

 

13,276

 

3,180

 

2011

 

1998

 

2003 Falls Boulevard

Rancho Cucamonga, CA

 

 

-

 

1,480

 

10,055

 

671

 

1,539

 

10,667

 

2,200

 

2013

 

2001

 

9519 Baseline Road

Rancho Palos Verdes, CA

 

 

-

 

5,450

 

60,034

 

1,681

 

5,450

 

61,715

 

10,709

 

2012

 

2004

 

5701 Crestridge Road

Randolph, NJ

 

 

-

 

1,540

 

46,934

 

636

 

1,540

 

47,570

 

7,337

 

2013

 

2006

 

648 Route 10 West

Red Deer, AB

 

 

12,215

 

1,247

 

19,283

 

740

 

1,285

 

19,984

 

1,585

 

2015

 

2004

 

3100 - 22 Street

Red Deer, AB

 

 

14,375

 

1,199

 

22,339

 

825

 

1,238

 

23,125

 

1,935

 

2015

 

2004

 

10 Inglewood Drive

Redondo Beach, CA

 

 

-

 

-

 

9,557

 

821

 

-

 

10,378

 

4,750

 

2011

 

1957

 

514 North Prospect Ave

Regina, SK

 

 

6,937

 

1,485

 

21,148

 

790

 

1,531

 

21,892

 

4,285

 

2013

 

1999

 

3651 Albert Street

Regina, SK

 

 

6,749

 

1,244

 

21,036

 

844

 

1,287

 

21,838

 

3,517

 

2013

 

2004

 

3105 Hillsdale Street

Regina, SK

 

 

13,241

 

1,539

 

24,053

 

2,709

 

1,586

 

26,715

 

1,931

 

2015

 

1992

 

1801 McIntyre Street

Renton, WA

 

 

21,150

 

3,080

 

51,824

 

606

 

3,103

 

52,407

 

9,093

 

2011

 

2007

 

104 Burnett Avenue South

Ridgefield, CT

 

 

-

 

3,100

 

80,614

 

1,892

 

3,150

 

82,456

 

8,965

 

2015

 

1998

 

640 Danbury Road

Riviere-du-Loup, QC

 

 

3,258

 

592

 

7,601

 

-

 

592

 

7,601

 

550

 

2015

 

1956

 

35 des Cedres

Riviere-du-Loup, QC

 

 

9,331

 

1,454

 

16,848

 

2,636

 

1,585

 

19,353

 

1,394

 

2015

 

1993

 

230-235 rue Des Chenes

Rocky Hill, CT

 

 

10,063

 

810

 

16,351

 

682

 

909

 

16,934

 

3,612

 

2011

 

2000

 

1160 Elm Street

Romeoville, IL

 

 

-

 

854

 

12,646

 

59,857

 

6,168

 

67,189

 

12,459

 

2006

 

2010

 

605 S Edward Dr.

Roseville, MN

 

 

-

 

1,540

 

35,877

 

720

 

1,585

 

36,553

 

5,273

 

2013

 

2002

 

2555 Snelling Avenue, North

Roseville, CA

 

 

-

 

3,300

 

41,652

 

2,785

 

3,300

 

44,437

 

953

 

2016

 

2000

 

5161 Foothills Boulevard

Roswell, GA

 

 

-

 

2,080

 

6,486

 

1,425

 

2,385

 

7,606

 

1,601

 

2012

 

1997

 

75 Magnolia Street

Sacramento, CA

 

 

-

 

1,300

 

23,394

 

961

 

1,334

 

24,321

 

3,601

 

2013

 

2004

 

345 Munroe Street

Saint-Lambert, QC

 

 

23,342

 

10,259

 

61,903

 

-

 

10,259

 

61,903

 

5,074

 

2015

 

1989

 

1705 Avenue Victoria

Salem, NH

 

 

20,184

 

980

 

32,721

 

2,031

 

1,051

 

34,680

 

6,651

 

2011

 

2000

 

242 Main Street

Salinas, CA

 

 

-

 

5,110

 

41,424

 

3,996

 

5,110

 

45,420

 

1,088

 

2016

 

1990

 

1320 Padre Drive

Salisbury, UKK

 

 

-

 

2,720

 

15,269

 

-

 

2,720

 

15,269

 

1,046

 

2014

 

2013

 

Shapland Close

Salt Lake City, UT

 

 

-

 

1,360

 

19,691

 

1,766

 

1,360

 

21,457

 

5,925

 

2011

 

1986

 

1430 E. 4500 S.

San Diego, CA

 

 

-

 

4,200

 

30,707

 

315

 

4,228

 

30,995

 

4,114

 

2011

 

2011

 

2567 Second Avenue

San Diego, CA

 

 

-

 

5,810

 

63,078

 

1,790

 

5,810

 

64,868

 

13,456

 

2012

 

2001

 

13075 Evening Creek Drive S

San Diego, CA

 

 

-

 

3,000

 

27,164

 

510

 

3,000

 

27,674

 

3,941

 

2013

 

2003

 

810 Turquoise Street

San Francisco, CA

 

 

-

 

5,920

 

91,639

 

8,480

 

5,920

 

100,120

 

1,674

 

2016

 

1998

 

1550 Sutter Street

San Francisco, CA

 

 

-

 

11,800

 

77,214

 

6,911

 

11,800

 

84,125

 

1,623

 

2016

 

1923

 

1601 19th Avenue

San Gabriel, CA

 

 

-

 

3,120

 

15,566

 

548

 

3,130

 

16,103

 

2,783

 

2013

 

2005

 

8332 Huntington Drive

San Jose, CA

 

 

-

 

2,850

 

35,098

 

453

 

2,856

 

35,545

 

6,132

 

2011

 

2009

 

1420 Curvi Drive

San Jose, CA

 

 

-

 

3,280

 

46,823

 

1,833

 

3,280

 

48,656

 

8,350

 

2012

 

2002

 

500 S Winchester Boulevard

San Jose, CA

 

 

-

 

11,900

 

27,647

 

2,606

 

11,900

 

30,253

 

860

 

2016

 

2002

 

4855 San Felipe Road

San Juan Capistrano, CA

 

 

-

 

1,390

 

6,942

 

1,304

 

1,390

 

8,246

 

3,324

 

2000

 

2001

 

30311 Camino Capistrano

San Rafael, CA

 

 

-

 

1,620

 

27,392

 

1,308

 

1,620

 

28,700

 

1,610

 

2016

 

2001

 

111 Merrydale Road

San Ramon, CA

 

 

-

 

8,700

 

72,223

 

6,220

 

8,700

 

78,443

 

1,388

 

2016

 

1992

 

9199 Fircrest Lane

Sandy Springs, GA

 

 

-

 

2,214

 

8,360

 

552

 

2,220

 

8,905

 

2,093

 

2012

 

1997

 

5455 Glenridge Drive NE

Santa Maria, CA

 

 

-

 

6,050

 

50,658

 

2,450

 

6,089

 

53,069

 

11,991

 

2011

 

2001

 

1220 Suey Road

Santa Monica, CA

 

 

19,551

 

5,250

 

28,340

 

767

 

5,263

 

29,094

 

4,526

 

2013

 

2004

 

1312 15th Street

Santa Rosa, CA

 

 

-

 

2,250

 

26,273

 

1,634

 

2,250

 

27,907

 

738

 

2016

 

2001

 

4225 Wayvern Drive

Saskatoon, SK

 

 

4,280

 

981

 

13,905

 

639

 

1,011

 

14,514

 

2,185

 

2013

 

1999

 

220 24th Street East

Saskatoon, SK

 

 

10,080

 

1,382

 

17,609

 

714

 

1,425

 

18,280

 

2,719

 

2013

 

2004

 

1622 Acadia Drive

Schaumburg, IL

 

 

-

 

2,460

 

22,863

 

980

 

2,479

 

23,824

 

4,509

 

2013

 

2001

 

790 North Plum Grove Road

Scottsdale, AZ

 

 

-

 

2,500

 

3,890

 

1,507

 

2,500

 

5,397

 

1,354

 

2008

 

1998

 

9410 East Thunderbird Road

Seal Beach, CA

 

 

-

 

6,204

 

72,954

 

1,232

 

6,229

 

74,161

 

15,443

 

2013

 

2004

 

3850 Lampson Avenue

Seattle, WA

 

 

48,540

 

6,790

 

85,369

 

2,103

 

6,825

 

87,437

 

15,599

 

2011

 

2009

 

5300 24th Avenue NE

Seattle, WA

 

 

10,539

 

1,150

 

19,887

 

1,002

 

1,150

 

20,889

 

1,499

 

2015

 

1995

 

11039 17th Avenue

Sevenoaks, UKJ

 

 

-

 

6,181

 

40,240

 

-

 

6,181

 

40,240

 

7,403

 

2012

 

2009

 

64 - 70 Westerham Road

Severna Park, MD

 

 

-

 

-

 

67,623

 

4,391

 

-

 

72,015

 

2,437

 

2016

 

1997

 

43 W McKinsey Road

Shelburne, VT

 

 

19,178

 

720

 

31,041

 

1,833

 

772

 

32,821

 

6,165

 

2011

 

1988

 

687 Harbor Road

Shelby Township, MI

 

 

16,207

 

1,040

 

26,344

 

486

 

1,093

 

26,777

 

3,961

 

2013

 

2006

 

46471 Hayes Road

Shrewsbury, MA

 

 

-

 

950

 

26,824

 

924

 

950

 

27,747

 

2,398

 

2015

 

1997

 

3111 Main Street

Sidcup, UKI

 

 

-

 

7,446

 

56,570

 

-

 

7,446

 

56,570

 

11,400

 

2012

 

2000

 

Frognal Avenue

Simi Valley, CA

 

 

-

 

3,200

 

16,664

 

580

 

3,217

 

17,227

 

3,877

 

2013

 

2009

 

190 Tierra Rejada Road

Simi Valley, CA

 

 

-

 

5,510

 

51,406

 

4,123

 

5,510

 

55,529

 

1,175

 

2016

 

2003

 

5300 E Los Angeles Avenue

Solihull, UKG

 

 

-

 

5,070

 

43,297

 

-

 

5,070

 

43,297

 

7,435

 

2012

 

2009

 

1270 Warwick Road

Solihull, UKG

 

 

-

 

3,571

 

26,053

 

-

 

3,571

 

26,053

 

4,584

 

2013

 

2007

 

1 Worcester Way

Solihull, UKG

 

 

-

 

-

 

-

 

12,436

 

1,851

 

10,585

 

162

 

2015

 

2016

 

Warwick Road

Sonning, UKJ

 

 

-

 

5,644

 

42,155

 

-

 

5,644

 

42,155

 

6,711

 

2013

 

2009

 

Old Bath Rd.

Sonoma, CA

 

 

-

 

2,820

 

21,890

 

1,352

 

2,820

 

23,241

 

651

 

2016

 

2005

 

91 Napa Road

South Windsor, CT

 

 

-

 

3,000

 

29,295

 

2,630

 

3,099

 

31,826

 

7,537

 

2011

 

1999

 

432 Buckland Road

Spokane, WA

 

 

-

 

3,200

 

25,064

 

558

 

3,271

 

25,551

 

6,047

 

2013

 

2001

 

3117 E. Chaser Lane

Spokane, WA

 

 

-

 

2,580

 

25,342

 

306

 

2,639

 

25,589

 

4,897

 

2013

 

1999

 

1110 E. Westview Ct.

St. Albert, AB

 

 

8,616

 

1,145

 

17,863

 

851

 

1,180

 

18,679

 

4,394

 

2014

 

2005

 

78C McKenney Avenue

St. John's, NL

 

 

6,063

 

706

 

11,765

 

-

 

706

 

11,765

 

842

 

2015

 

2005

 

64 Portugal Cove Road

Stittsville, ON

 

 

4,732

 

1,175

 

17,397

 

748

 

1,211

 

18,109

 

2,752

 

2013

 

1996

 

1340 - 1354 Main Street

Stockport, UKD

 

 

-

 

4,369

 

25,018

 

-

 

4,369

 

25,018

 

4,828

 

2013

 

2008

 

1 Dairyground Road

Studio City, CA

 

 

-

 

4,006

 

25,307

 

807

 

4,040

 

26,080

 

4,965

 

2013

 

2004

 

4610 Coldwater Canyon Avenue

Sugar Land, TX

 

 

-

 

960

 

31,423

 

1,535

 

960

 

32,958

 

7,509

 

2011

 

1996

 

1221 Seventh St

Sun City, FL

 

 

21,636

 

6,521

 

48,476

 

1,244

 

6,560

 

49,680

 

4,592

 

2015

 

1995

 

231 Courtyards

Sun City, FL

 

 

24,378

 

5,040

 

50,923

 

1,383

 

5,066

 

52,280

 

4,325

 

2015

 

1999

 

1311 Aston Gardens Court

Sun City West, AZ

 

 

12,026

 

1,250

 

21,778

 

1,030

 

1,271

 

22,787

 

3,630

 

2012

 

1998

 

13810 West Sandridge Drive

Sunnyvale, CA

 

 

-

 

5,420

 

41,682

 

1,564

 

5,420

 

43,246

 

7,780

 

2012

 

2002

 

1039 East El Camino Real

Surrey, BC

 

 

7,047

 

3,605

 

18,818

 

795

 

3,716

 

19,503

 

4,767

 

2013

 

2000

 

16028 83rd Avenue

Surrey, BC

 

 

16,391

 

4,552

 

22,338

 

1,380

 

4,692

 

23,578

 

6,114

 

2013

 

1987

 

15501 16th Avenue

Sutton, UKI

 

 

-

 

-

 

-

 

18,628

 

4,096

 

14,532

 

10

 

2015

 

2016

 

123 Westmead Road

Suwanee, GA

 

 

-

 

1,560

 

11,538

 

742

 

1,560

 

12,280

 

2,486

 

2012

 

2000

 

4315 Johns Creek Parkway

Sway, UKJ

 

 

-

 

4,145

 

15,508

 

-

 

4,145

 

15,508

 

2,033

 

2014

 

2008

 

Sway Place

Swift Current, SK

 

 

2,248

 

492

 

10,119

 

381

 

507

 

10,485

 

1,815

 

2013

 

2001

 

301 Macoun Drive

Tacoma, WA

 

 

18,080

 

2,400

 

35,053

 

413

 

2,457

 

35,408

 

6,180

 

2011

 

2008

 

7290 Rosemount Circle

Tacoma, WA

 

 

-

 

1,535

 

6,068

 

39

 

1,535

 

6,107

 

777

 

2015

 

2012

 

7290 Rosemount Circle

Tacoma, WA

 

 

-

 

4,170

 

73,377

 

7,687

 

4,170

 

81,064

 

475

 

2016

 

1987

 

8201 6th Avenue

Tampa, FL

 

 

69,330

 

4,910

 

114,148

 

1,699

 

4,950

 

115,807

 

8,042

 

2015

 

2001

 

12951 W Linebaugh Avenue

Tewksbury, MA

 

 

-

 

2,350

 

24,118

 

1,779

 

2,350

 

25,897

 

-

 

2016

 

2006

 

2000 Emerald Court

The Woodlands, TX

 

 

-

 

480

 

12,379

 

787

 

480

 

13,166

 

2,657

 

2011

 

1999

 

7950 Bay Branch Dr

Toledo, OH

 

 

-

 

2,040

 

47,129

 

3,125

 

2,144

 

50,150

 

12,012

 

2010

 

1985

 

3501 Executive Parkway

Toronto, ON

 

 

17,354

 

2,927

 

20,713

 

1,203

 

3,017

 

21,826

 

1,861

 

2015

 

1900

 

54 Foxbar Road

Toronto, ON

 

 

9,601

 

5,082

 

25,493

 

1,298

 

5,243

 

26,629

 

3,841

 

2015

 

1988

 

645 Castlefield Avenue

Toronto, ON

 

 

13,336

 

2,040

 

19,822

 

-

 

2,040

 

19,822

 

2,030

 

2015

 

1999

 

4251 Dundas Street West

Toronto, ON

 

 

22,989

 

5,132

 

41,657

 

3,422

 

5,290

 

44,921

 

5,740

 

2015

 

1964

 

10 William Morgan Drive

Toronto, ON

 

 

4,335

 

2,480

 

7,571

 

508

 

2,556

 

8,003

 

1,305

 

2015

 

1971

 

123 Spadina Road

Toronto, ON

 

 

1,445

 

1,079

 

5,364

 

257

 

1,112

 

5,588

 

917

 

2013

 

1982

 

25 Centennial Park Road

Toronto, ON

 

 

8,351

 

2,513

 

19,695

 

897

 

2,602

 

20,504

 

2,694

 

2013

 

2002

 

305 Balliol Street

Toronto, ON

 

 

18,699

 

3,400

 

32,757

 

1,483

 

3,509

 

34,131

 

6,106

 

2013

 

1973

 

1055 and 1057 Don Mills Road

Toronto, ON

 

 

1,027

 

1,361

 

2,915

 

233

 

1,405

 

3,104

 

952

 

2013

 

1985

 

3705 Bathurst Street

Toronto, ON

 

 

1,700

 

1,447

 

3,918

 

264

 

1,491

 

4,137

 

896

 

2013

 

1987

 

1340 York Mills Road

Toronto, ON

 

 

32,956

 

5,304

 

53,488

 

2,399

 

5,467

 

55,725

 

13,210

 

2013

 

1988

 

8 The Donway East

Trumbull, CT

 

 

23,795

 

2,850

 

37,685

 

1,395

 

2,927

 

39,004

 

9,228

 

2011

 

1998

 

2750 Reservoir Avenue 

Tucson, AZ

 

 

4,528

 

830

 

6,179

 

3,645

 

905

 

9,749

 

1,453

 

2012

 

1997

 

5660 N. Kolb Road

Tulsa, OK

 

 

-

 

1,330

 

21,285

 

3,318

 

1,350

 

24,583

 

5,283

 

2010

 

1986

 

8887 South Lewis Ave

Tulsa, OK

 

 

-

 

1,500

 

20,861

 

2,912

 

1,551

 

23,722

 

5,481

 

2010

 

1984

 

9524 East 71st St

Tustin, CA

 

 

-

 

840

 

15,299

 

577

 

840

 

15,876

 

2,957

 

2011

 

1965

 

240 East 3rd St

Upland, CA

 

 

-

 

3,160

 

42,596

 

3

 

3,160

 

42,600

 

2,781

 

2015

 

2014

 

2419 North Euclid Avenue

Upper St Claire, PA

 

 

-

 

1,102

 

13,455

 

614

 

1,102

 

14,069

 

2,828

 

2013

 

2005

 

500 Village Drive

Vancouver, BC

 

 

14,862

 

24,122

 

42,675

 

2,620

 

37,543

 

31,874

 

5,207

 

2015

 

1974

 

2803 West 41st Avenue

Vankleek Hill, ON

 

 

994

 

389

 

2,960

 

215

 

401

 

3,164

 

630

 

2013

 

1987

 

48 Wall Street

Vaudreuil, QC

 

 

8,348

 

1,852

 

14,214

 

-

 

1,852

 

14,214

 

1,099

 

2015

 

1975

 

333 rue Querbes

Venice, FL

 

 

64,425

 

6,820

 

100,501

 

1,225

 

6,832

 

101,714

 

7,572

 

2015

 

2002

 

1000 Aston Gardens Drive

Victoria, BC

 

 

7,502

 

2,856

 

18,038

 

745

 

2,944

 

18,695

 

3,741

 

2013

 

1974

 

3000 Shelbourne Street

Victoria, BC

 

 

6,916

 

3,681

 

15,774

 

717

 

3,795

 

16,377

 

3,384

 

2013

 

1988

 

3051 Shelbourne Street

Victoria, BC

 

 

7,756

 

2,476

 

15,379

 

980

 

2,554

 

16,281

 

1,269

 

2015

 

1990

 

3965 Shelbourne Street

Virginia Water, UKJ

 

 

-

 

7,106

 

29,937

 

314

 

5,419

 

31,938

 

5,473

 

2012

 

2002

 

Christ Church Road

Walnut Creek, CA

 

 

-

 

3,700

 

12,467

 

1,397

 

3,794

 

13,770

 

3,120

 

2013

 

1998

 

2175 Ygnacio Valley Road

Walnut Creek, CA

 

 

-

 

10,320

 

100,890

 

9,225

 

10,320

 

110,115

 

2,085

 

2016

 

1988

 

1580 Geary Road

Waltham, MA

 

 

-

 

2,462

 

40,062

 

1,115

 

2,486

 

41,153

 

4,199

 

2015

 

2000

 

126 Smith Street

Warwick, RI

 

 

15,390

 

2,400

 

24,635

 

1,420

 

2,407

 

26,048

 

7,115

 

2011

 

1998

 

75 Minnesota Avenue 

Washington, DC

 

 

31,489

 

4,000

 

69,154

 

909

 

4,002

 

70,061

 

10,870

 

2013

 

2004

 

5111 Connecticut Avenue NW

Waterbury, CT

 

 

23,854

 

2,460

 

39,547

 

2,511

 

2,495

 

42,023

 

12,656

 

2011

 

1998

 

180 Scott Road 

Wayland, MA

 

 

-

 

1,207

 

27,462

 

1,163

 

1,307

 

28,525

 

4,755

 

2013

 

1997

 

285 Commonwealth Road

Welland, ON

 

 

6,637

 

983

 

7,530

 

-

 

983

 

7,530

 

702

 

2015

 

2006

 

110 First Street

Wellesley, MA

 

 

-

 

4,690

 

77,462

 

111

 

4,690

 

77,573

 

7,260

 

2015

 

2012

 

23 & 27 Washington Street

West Babylon, NY

 

 

-

 

3,960

 

47,085

 

912

 

3,960

 

47,997

 

6,886

 

2013

 

2003

 

580 Montauk Highway

West Bloomfield, MI

 

 

-

 

1,040

 

12,300

 

564

 

1,060

 

12,844

 

2,159

 

2013

 

2000

 

7005 Pontiac Trail

West Hills, CA

 

 

-

 

2,600

 

7,521

 

477

 

2,610

 

7,988

 

2,083

 

2013

 

2002

 

9012 Topanga Canyon Road

West Vancouver, BC

 

 

19,151

 

7,059

 

28,155

 

1,578

 

7,276

 

29,516

 

5,545

 

2013

 

1987

 

2095 Marine Drive

Westbourne, UKK

 

 

-

 

5,441

 

41,420

 

-

 

5,441

 

41,420

 

6,812

 

2013

 

2006

 

16-18 Poole Road

Westford, MA

 

 

-

 

1,440

 

32,607

 

67

 

1,440

 

32,674

 

2,480

 

2015

 

2013

 

108 Littleton Road

Weston, MA

 

 

-

 

1,160

 

6,200

 

812

 

1,160

 

7,012

 

1,004

 

2013

 

1998

 

135 North Avenue

Weybridge, UKJ

 

 

-

 

7,899

 

48,240

 

-

 

7,899

 

48,240

 

9,412

 

2013

 

2008

 

Ellesmere Road

Weymouth, UKK

 

 

-

 

2,591

 

16,551

 

-

 

2,591

 

16,551

 

1,099

 

2014

 

2013

 

Cross Road

White Oak, MD

 

 

-

 

2,304

 

24,768

 

1,417

 

2,316

 

26,173

 

3,846

 

2013

 

2002

 

11621 New Hampshire Avenue

Wilbraham, MA

 

 

10,773

 

660

 

17,639

 

835

 

685

 

18,449

 

3,935

 

2011

 

2000

 

2387 Boston Road 

Wilmington, DE

 

 

-

 

1,040

 

23,338

 

691

 

1,129

 

23,940

 

3,910

 

2013

 

2004

 

2215 Shipley Street

Winchester, UKJ

 

 

-

 

6,009

 

29,405

 

-

 

6,009

 

29,405

 

5,367

 

2012

 

2010

 

Stockbridge Road

Winnipeg, MB

 

 

13,116

 

1,960

 

38,612

 

1,973

 

2,024

 

40,521

 

10,618

 

2013

 

1999

 

857 Wilkes Avenue

Winnipeg, MB

 

 

16,190

 

1,276

 

21,732

 

894

 

1,315

 

22,586

 

3,765

 

2013

 

1988

 

3161 Grant Avenue

Winnipeg, MB

 

 

13,111

 

1,317

 

15,609

 

1,631

 

1,357

 

17,200

 

2,245

 

2015

 

1999

 

125 Portsmouth Boulevard

Wolverhampton, UKG

 

 

-

 

2,941

 

8,922

 

-

 

2,941

 

8,922

 

2,316

 

2013

 

2008

 

73 Wergs Road

Woodbridge, CT

 

 

-

 

1,370

 

14,219

 

1,180

 

1,426

 

15,343

 

4,691

 

2011

 

1998

 

21 Bradley Road

Woodland Hills, CA

 

 

-

 

3,400

 

20,478

 

742

 

3,436

 

21,183

 

4,005

 

2013

 

2005

 

20461 Ventura Boulevard

Worcester, MA

 

 

13,496

 

1,140

 

21,664

 

993

 

1,156

 

22,640

 

4,797

 

2011

 

1999

 

340 May Street 

Yarmouth, ME

 

 

16,811

 

450

 

27,711

 

1,185

 

470

 

28,876

 

5,706

 

2011

 

1999

 

27 Forest Falls Drive

Yonkers, NY

 

 

-

 

3,962

 

50,107

 

1,341

 

3,967

 

51,443

 

7,956

 

2013

 

2005

 

65 Crisfield Street

Yorkton, SK

 

 

3,384

 

467

 

8,762

 

355

 

476

 

9,102

 

1,536

 

2013

 

2001

 

94 Russell Drive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Seniors housing operating total

 

$

2,400,836

$

1,085,554

$

11,775,094

$

807,677

$

1,151,566

$

12,516,758

$

1,791,579

 

 

 

 

 

 

116

 

   

Welltower Inc.

 

 

Schedule III

 

 

Real Estate and Accumulated Depreciation

 

 

December 31, 2016

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

Initial Cost to Company

 

 

 

Gross Amount at Which Carried at Close of Period

 

 

 

 

 

 

Description

 

 

Encumbrances

 

Land

 

Building & Improvements

 

Cost Capitalized Subsequent to Acquisition

 

Land

 

Building & Improvements

 

Accumulated Depreciation(1)

 

Year Acquired

 

Year Built

 

Address

Outpatient medical:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akron, OH

 

$

-

$

821

$

12,105

$

-

$

821

$

12,105

$

2,050

 

2012

 

2010

 

701 White Pond Drive

Allen, TX

 

 

-

 

726

 

14,196

 

412

 

726

 

14,607

 

3,626

 

2012

 

2006

 

1105 N Central Expressway

Alpharetta, GA

 

 

-

 

476

 

14,757

 

31

 

476

 

14,789

 

3,798

 

2011

 

2003

 

11975 Morris Road

Alpharetta, GA

 

 

-

 

1,862

 

-

 

-

 

1,862

 

-

 

-

 

2011

 

1900

 

940 North Point Parkway

Alpharetta, GA

 

 

-

 

548

 

17,103

 

205

 

548

 

17,308

 

5,331

 

2011

 

2007

 

3300 Old Milton Parkway

Alpharetta, GA

 

 

-

 

773

 

18,902

 

522

 

773

 

19,424

 

4,755

 

2011

 

1993

 

3400-A Old Milton Parkway

Alpharetta, GA

 

 

-

 

1,769

 

36,152

 

594

 

1,769

 

36,745

 

10,190

 

2011

 

1999

 

3400-C Old Milton Parkway

Arcadia, CA

 

 

-

 

5,408

 

23,219

 

3,343

 

5,618

 

26,352

 

8,913

 

2006

 

1984

 

301 W. Huntington Drive

Arlington, TX

 

 

-

 

82

 

18,243

 

295

 

82

 

18,537

 

1,941

 

2012

 

2012

 

902 W. Randol Mill Road

Atlanta, GA

 

 

-

 

4,931

 

18,720

 

6,650

 

5,301

 

25,000

 

9,325

 

2006

 

1991

 

755 Mt. Vernon Hwy.

Atlanta, GA

 

 

-

 

1,947

 

24,248

 

1,687

 

1,947

 

25,934

 

5,558

 

2012

 

1984

 

975 Johnson Ferry Road

Atlanta, GA

 

 

25,347

 

-

 

43,425

 

611

 

-

 

44,036

 

10,358

 

2012

 

2006

 

5670 Peachtree-Dunwoody Road

Bardstown, KY

 

 

1,928

 

-

 

-

 

8,238

 

274

 

7,964

 

561

 

2010

 

2006

 

4359 New Shepherdsville Rd

Bartlett, TN

 

 

-

 

187

 

15,015

 

1,889

 

187

 

16,904

 

5,734

 

2007

 

2004

 

2996 Kate Bond Rd.

Bel Air, MD

 

 

-

 

-

 

-

 

24,708

 

-

 

24,708

 

464

 

2014

 

2016

 

12 Medstar Boulevard

Bellevue, NE

 

 

-

 

-

 

16,680

 

-

 

-

 

16,680

 

4,032

 

2010

 

2010

 

2510 Bellevue Medical Center Drive

Bettendorf, IA

 

 

-

 

-

 

7,110

 

73

 

-

 

7,183

 

389

 

2013

 

2014

 

2140 53rd Avenue

Beverly Hills, CA

 

 

-

 

20,766

 

40,730

 

124

 

20,766

 

40,854

 

2,755

 

2015

 

1946

 

9675 Brighton Way

Beverly Hills, CA

 

 

-

 

18,863

 

1,192

 

-

 

18,863

 

1,192

 

332

 

2015

 

1955

 

415 North Bedford

Beverly Hills, CA

 

 

-

 

19,863

 

31,690

 

156

 

19,863

 

31,846

 

2,334

 

2015

 

1946

 

416 North Bedford

Beverly Hills, CA

 

 

33,729

 

32,603

 

28,639

 

2

 

32,603

 

28,642

 

2,918

 

2015

 

1950

 

435 North Bedford

Beverly Hills, CA

 

 

78,271

 

52,772

 

87,192

 

-

 

52,772

 

87,192

 

5,720

 

2015

 

1989

 

436 North Bedford

Birmingham, AL

 

 

-

 

52

 

10,201

 

503

 

52

 

10,704

 

3,496

 

2006

 

1971

 

801 Princeton Avenue SW

Birmingham, AL

 

 

-

 

124

 

11,733

 

1,235

 

124

 

12,967

 

4,127

 

2006

 

1985

 

817 Princeton Avenue SW

Birmingham, AL

 

 

-

 

476

 

18,726

 

1,881

 

476

 

20,607

 

6,776

 

2006

 

1989

 

833 Princeton Avenue SW

Boardman, OH

 

 

-

 

80

 

12,161

 

10

 

80

 

12,170

 

3,768

 

2010

 

2007

 

8423 Market St

Boca Raton, FL

 

 

-

 

31

 

12,312

 

88

 

50

 

12,381

 

2,548

 

2012

 

1993

 

9960 S. Central Park Boulevard

Boca Raton, FL

 

 

-

 

109

 

34,002

 

2,588

 

214

 

36,485

 

12,111

 

2006

 

1995

 

9970 S. Central Park Blvd.

Boerne, TX

 

 

-

 

50

 

13,120

 

-

 

50

 

13,120

 

3,067

 

2011

 

2007

 

134 Menger Springs Road

Boynton Beach, FL

 

 

-

 

2,048

 

7,692

 

588

 

2,048

 

8,280

 

3,253

 

2006

 

1995

 

8188 Jog Rd.

Boynton Beach, FL

 

 

-

 

2,048

 

7,403

 

1,261

 

2,048

 

8,664

 

3,324

 

2006

 

1997

 

8200 Jog Road

Boynton Beach, FL

 

 

-

 

214

 

5,611

 

8,279

 

270

 

13,834

 

4,708

 

2007

 

1996

 

10075 Jog Rd.

Boynton Beach, FL

 

 

25,399

 

13,324

 

40,369

 

2,175

 

13,963

 

41,905

 

7,314

 

2013

 

1995

 

10301 Hagen Ranch Road

Bradenton, FL

 

 

-

 

1,184

 

9,799

 

30

 

1,184

 

9,829

 

1,037

 

2014

 

1975

 

315 75th Street West

Bradenton, FL

 

 

-

 

1,035

 

4,298

 

-

 

1,035

 

4,298

 

498

 

2014

 

2006

 

7005 Cortez Road West

Bridgeton, MO

 

 

-

 

450

 

21,084

 

-

 

450

 

21,084

 

5,382

 

2010

 

2006

 

12266 DePaul Dr

Buckhurst Hill, UKH

 

 

-

 

11,597

 

49,243

 

-

 

11,597

 

49,243

 

2,263

 

2015

 

2013

 

High Road

Burleson, TX

 

 

-

 

10

 

12,611

 

401

 

10

 

13,012

 

3,068

 

2011

 

2007

 

12001 South Freeway

Burnsville, MN

 

 

-

 

-

 

31,596

 

391

 

-

 

31,987

 

4,373

 

2013

 

2014

 

14101 Fairview Dr

Carmel, IN

 

 

-

 

2,280

 

19,238

 

425

 

2,280

 

19,663

 

6,292

 

2011

 

2005

 

12188-A North Meridian Street

Carmel, IN

 

 

-

 

2,026

 

21,559

 

26

 

2,026

 

21,586

 

7,140

 

2011

 

2007

 

12188-B North Meridian Street

Castle Rock, CO

 

 

-

 

80

 

13,004

 

571

 

79

 

13,576

 

1,679

 

2014

 

2013

 

2352 Meadows Boulevard

Cedar Grove, WI

 

 

-

 

113

 

618

 

-

 

113

 

618

 

154

 

2010

 

1986

 

313 S. Main St.

Charleston, SC

 

 

-

 

2,773

 

25,928

 

53

 

2,815

 

25,939

 

2,900

 

2014

 

2009

 

325 Folly Road

Cincinnati, OH

 

 

-

 

-

 

17,880

 

135

 

-

 

18,015

 

2,151

 

2012

 

2013

 

3301 Mercy West Boulevard

Claremore, OK

 

 

-

 

132

 

12,829

 

811

 

132

 

13,640

 

4,900

 

2007

 

2005

 

1501 N. Florence Ave.

Clarkson Valley, MO

 

 

-

 

-

 

35,592

 

-

 

-

 

35,592

 

9,599

 

2009

 

2010

 

15945 Clayton Rd

Clear Lake, TX

 

 

-

 

-

 

13,882

 

-

 

-

 

13,882

 

810

 

2013

 

2014

 

1010 South Ponds Drive

Columbia, MD

 

 

-

 

2,333

 

19,232

 

12

 

2,333

 

19,243

 

3,412

 

2012

 

2002

 

10700 Charter Drive

Columbia, MD

 

 

-

 

23

 

33,885

 

-

 

23

 

33,885

 

1,039

 

2015

 

1982

 

5450 & 5500 Knoll N Drive

Coon Rapids, MN

 

 

-

 

-

 

26,679

 

1,106

 

-

 

27,785

 

3,124

 

2013

 

2014

 

11850 Blackfoot Street NW

Cypress, TX

 

 

-

 

1,287

 

-

 

-

 

1,287

 

-

 

-

 

2016

 

1900

 

14940 Mueschke Road

Cypress, TX

 

 

-

 

2,985

 

-

 

-

 

2,985

 

-

 

-

 

2016

 

1900

 

13105 Wortham Center Drive

Dade City, FL

 

 

-

 

1,211

 

5,511

 

-

 

1,211

 

5,511

 

1,078

 

2011

 

1998

 

13413 US Hwy 301

Dallas, TX

 

 

-

 

-

 

-

 

15,541

 

122

 

15,419

 

421

 

2013

 

2014

 

8196 Walnut Hill Lane

Dallas, TX

 

 

-

 

137

 

28,690

 

3,395

 

137

 

32,085

 

11,242

 

2006

 

1995

 

9330 Poppy Dr.

Dallas, TX

 

 

-

 

462

 

52,488

 

36

 

462

 

52,524

 

8,297

 

2012

 

2004

 

7115 Greenville Avenue

Dayton, OH

 

 

-

 

730

 

6,919

 

85

 

730

 

7,005

 

2,165

 

2011

 

1988

 

1530 Needmore Road

Deerfield Beach, FL

 

 

-

 

2,408

 

7,809

 

137

 

2,540

 

7,814

 

2,872

 

2011

 

2001

 

1192 East Newport Center Drive

Delray Beach, FL

 

 

-

 

1,882

 

34,767

 

6,015

 

2,152

 

40,512

 

15,966

 

2006

 

1985

 

5130-5150 Linton Blvd.

Durham, NC

 

 

-

 

1,212

 

22,858

 

1

 

1,212

 

22,859

 

2,375

 

2013

 

2012

 

1823 Hillandale Road

Edina, MN

 

 

-

 

310

 

15,132

 

263

 

310

 

15,395

 

3,791

 

2010

 

2003

 

8100 W 78th St

El Paso, TX

 

 

-

 

677

 

17,075

 

2,132

 

677

 

19,208

 

7,613

 

2006

 

1997

 

2400 Trawood Dr.

Everett, WA

 

 

-

 

4,842

 

26,010

 

-

 

4,842

 

26,010

 

5,637

 

2010

 

2011

 

13020 Meridian Ave. S.

Fenton, MO

 

 

11,258

 

958

 

27,485

 

329

 

958

 

27,814

 

4,826

 

2013

 

2009

 

1011 Bowles Avenue

Fenton, MO

 

 

5,345

 

369

 

13,911

 

49

 

369

 

13,961

 

1,666

 

2013

 

2009

 

1055 Bowles Avenue

Flower Mound, TX

 

 

-

 

737

 

9,654

 

71

 

737

 

9,724

 

807

 

2015

 

2014

 

2560 Central Park Avenue

Flower Mound, TX

 

 

-

 

4,164

 

27,529

 

80

 

4,164

 

27,609

 

2,525

 

2014

 

2012

 

4370 Medical Arts Drive

Flower Mound, TX

 

 

-

 

4,620

 

-

 

-

 

4,620

 

-

 

-

 

2014

 

1900

 

Medical Arts Drive

Fort Wayne, IN

 

 

-

 

1,105

 

22,836

 

-

 

1,105

 

22,836

 

3,707

 

2012

 

2004

 

7916 Jefferson Boulevard

Fort Worth, TX

 

 

-

 

462

 

26,020

 

218

 

462

 

26,238

 

2,785

 

2012

 

2012

 

10840 Texas Health Trail

Fort Worth, TX

 

 

-

 

401

 

6,099

 

-

 

401

 

6,099

 

639

 

2014

 

2007

 

7200 Oakmont Boulevard

Franklin, TN

 

 

-

 

2,338

 

12,138

 

2,449

 

2,338

 

14,587

 

4,973

 

2007

 

1988

 

100 Covey Drive

Franklin, WI

 

 

4,445

 

6,872

 

7,550

 

-

 

6,872

 

7,550

 

1,976

 

2010

 

1984

 

9200 W. Loomis Rd.

Frisco, TX

 

 

-

 

-

 

18,635

 

1,443

 

-

 

20,078

 

6,460

 

2007

 

2004

 

4401 Coit Road

Frisco, TX

 

 

-

 

-

 

15,309

 

2,314

 

-

 

17,623

 

6,401

 

2007

 

2004

 

4461 Coit Road

Gallatin, TN

 

 

-

 

20

 

21,801

 

533

 

20

 

22,334

 

6,053

 

2010

 

1997

 

300 Steam Plant Rd

Gig Harbor, WA

 

 

-

 

-

 

-

 

30,890

 

80

 

30,810

 

1,481

 

2010

 

2009

 

11511 Canterwood Blvd NW

Glendale, CA

 

 

-

 

37

 

18,398

 

1,207

 

37

 

19,605

 

5,747

 

2007

 

2002

 

222 W. Eulalia St.

Grand Prairie, TX

 

 

-

 

981

 

6,086

 

-

 

981

 

6,086

 

1,490

 

2012

 

2009

 

2740 N State Hwy 360

Grapevine, TX

 

 

-

 

-

 

5,943

 

4,778

 

2,081

 

8,640

 

802

 

2014

 

2002

 

2040 W State Hwy 114

Grapevine, TX

 

 

-

 

3,365

 

15,669

 

-

 

3,365

 

15,669

 

2,170

 

2014

 

2002

 

2020 W State Hwy 114

Green Bay, WI

 

 

6,053

 

-

 

14,891

 

-

 

-

 

14,891

 

3,442

 

2010

 

2002

 

2253 W. Mason St.

Green Bay, WI

 

 

-

 

-

 

20,098

 

-

 

-

 

20,098

 

4,557

 

2010

 

2002

 

2845 Greenbrier Road

Green Bay, WI

 

 

-

 

-

 

11,696

 

-

 

-

 

11,696

 

3,683

 

2010

 

2002

 

2845 Greenbrier Road

Greeneville, TN

 

 

-

 

970

 

10,104

 

73

 

970

 

10,178

 

2,894

 

2010

 

2005

 

438 East Vann Rd

Greenwood, IN

 

 

-

 

8,316

 

26,384

 

-

 

8,316

 

26,384

 

4,763

 

2012

 

2010

 

1260 Innovation Parkway

Greenwood, IN

 

 

-

 

1,262

 

7,045

 

645

 

1,262

 

7,691

 

863

 

2014

 

2010

 

333 E County Line Road

Grenwood, IN

 

 

-

 

2,098

 

21,538

 

1

 

2,098

 

21,538

 

1,761

 

2014

 

2013

 

3000 S State Road 135

Harker Heights, TX

 

 

-

 

1,907

 

3,575

 

-

 

1,907

 

3,575

 

387

 

2011

 

2012

 

E Central Texas Expressway

High Point, NC

 

 

-

 

2,659

 

29,069

 

163

 

2,659

 

29,232

 

4,463

 

2012

 

2010

 

4515 Premier Drive

Highland, IL

 

 

-

 

-

 

8,834

 

-

 

-

 

8,834

 

999

 

2012

 

2013

 

12860 Troxler Avenue

Houston, TX

 

 

-

 

-

 

-

 

10,403

 

10,403

 

-

 

3

 

2011

 

1900

 

15655 Cypress Woods Medical Drive

Houston, TX

 

 

-

 

5,837

 

33,128

 

9

 

5,837

 

33,137

 

8,093

 

2012

 

2005

 

15655 Cypress Woods Medical Drive

Houston, TX

 

 

-

 

3,102

 

32,323

 

910

 

3,242

 

33,094

 

3,999

 

2014

 

2014

 

1900 N Loop W Freeway

Houston, TX

 

 

-

 

378

 

31,206

 

-

 

378

 

31,206

 

6,893

 

2012

 

1981

 

18100 St John Drive

Houston, TX

 

 

-

 

91

 

10,613

 

1,217

 

91

 

11,830

 

3,098

 

2012

 

1986

 

2060 Space Park Drive

Houston, TX

 

 

-

 

3,688

 

13,313

 

91

 

3,688

 

13,405

 

2,374

 

2012

 

2007

 

10701 Vintage Preserve Parkway

Houston, TX

 

 

-

 

-

 

-

 

80,886

 

12,815

 

68,072

 

9,242

 

2012

 

1998

 

2727 W Holcombe Boulevard

Hudson, OH

 

 

-

 

2,587

 

13,720

 

396

 

2,587

 

14,116

 

3,403

 

2012

 

2006

 

5655 Hudson Drive

Humble, TX

 

 

-

 

-

 

9,941

 

-

 

-

 

9,941

 

539

 

2013

 

2014

 

8233 N. Sam Houston Parkway E.

Jackson, MI

 

 

-

 

607

 

17,367

 

83

 

668

 

17,389

 

2,917

 

2013

 

2009

 

1201 E Michigan Avenue

Jupiter, FL

 

 

-

 

2,252

 

11,415

 

2,903

 

2,608

 

13,962

 

4,344

 

2006

 

2001

 

550 Heritage Dr.

Jupiter, FL

 

 

-

 

2,825

 

5,858

 

884

 

3,005

 

6,562

 

2,579

 

2007

 

2004

 

600 Heritage Dr.

Kenosha, WI

 

 

6,110

 

-

 

18,058

 

-

 

-

 

18,058

 

4,086

 

2010

 

1993

 

10400 75th St.

Killeen, TX

 

 

-

 

760

 

22,878

 

76

 

760

 

22,954

 

6,000

 

2010

 

2010

 

2405 Clear Creek Rd

Kyle, TX

 

 

-

 

2,569

 

14,384

 

372

 

2,569

 

14,756

 

1,676

 

2014

 

2011

 

135 Bunton Road

La Jolla, CA

 

 

-

 

12,855

 

32,229

 

-

 

12,855

 

32,229

 

2,871

 

2015

 

1989

 

4150 Regents Park Row

La Jolla, CA

 

 

-

 

9,425

 

26,571

 

-

 

9,425

 

26,571

 

1,665

 

2015

 

1988

 

4120 & 4130 La Jolla Village Drive

La Quinta, CA

 

 

-

 

3,266

 

22,066

 

180

 

3,279

 

22,234

 

2,727

 

2014

 

2006

 

47647 Caleo Bay Drive

Lake St Louis, MO

 

 

-

 

240

 

14,249

 

106

 

240

 

14,355

 

3,919

 

2010

 

2008

 

400 Medical Dr

Lakeway, TX

 

 

-

 

-

 

-

 

2,801

 

2,801

 

-

 

-

 

2007

 

1900

 

Lohmans Crossing Road

Lakewood, CA

 

 

-

 

146

 

14,885

 

1,957

 

146

 

16,842

 

5,315

 

2006

 

1993

 

5750 Downey Ave.

Lakewood, WA

 

 

-

 

72

 

16,017

 

658

 

72

 

16,675

 

2,561

 

2012

 

2005

 

11307 Bridgeport Way SW

Las Vegas, NV

 

 

-

 

-

 

-

 

6,127

 

6,127

 

-

 

-

 

2007

 

1900

 

SW corner of Deer Springs Way and Riley Street

Las Vegas, NV

 

 

-

 

2,319

 

4,612

 

1,021

 

2,319

 

5,632

 

2,254

 

2006

 

1991

 

2870 S. Maryland Pkwy.

Las Vegas, NV

 

 

-

 

74

 

15,287

 

1,259

 

74

 

16,546

 

5,430

 

2006

 

2000

 

1815 E. Lake Mead Blvd.

Las Vegas, NV

 

 

-

 

433

 

6,921

 

212

 

433

 

7,133

 

2,763

 

2007

 

1997

 

1776 E. Warm Springs Rd.

Lenexa, KS

 

 

-

 

540

 

17,926

 

302

 

540

 

18,228

 

3,995

 

2010

 

2008

 

23401 Prairie Star Pkwy

Lenexa, KS

 

 

-

 

100

 

13,723

 

-

 

100

 

13,723

 

969

 

2013

 

2013

 

23351 Prairie Star Parkway

Lincoln, NE

 

 

-

 

1,420

 

29,723

 

153

 

1,420

 

29,876

 

8,758

 

2010

 

2003

 

575 South 70th St

London, UKI

 

 

-

 

17,395

 

152,642

 

-

 

17,395

 

152,642

 

7,015

 

2015

 

2010

 

53 Parkside

London, UKI

 

 

-

 

3,948

 

27,188

 

-

 

3,948

 

27,188

 

1,250

 

2015

 

2003

 

49 Parkside

London, UKI

 

 

-

 

5,058

 

11,174

 

-

 

5,058

 

11,174

 

514

 

2015

 

2007

 

17-19 View Road

Los Alamitos, CA

 

 

-

 

39

 

18,635

 

1,087

 

39

 

19,722

 

6,191

 

2007

 

2003

 

3771 Katella Ave.

Los Gatos, CA

 

 

-

 

488

 

22,386

 

1,761

 

488

 

24,147

 

9,201

 

2006

 

1993

 

555 Knowles Dr.

Loxahatchee, FL

 

 

-

 

1,637

 

5,048

 

1,024

 

1,719

 

5,990

 

2,272

 

2006

 

1997

 

12977 Southern Blvd.

Loxahatchee, FL

 

 

-

 

1,340

 

6,509

 

761

 

1,440

 

7,170

 

2,582

 

2006

 

1993

 

12989 Southern Blvd.

Loxahatchee, FL

 

 

-

 

1,553

 

4,694

 

1,121

 

1,650

 

5,719

 

2,083

 

2006

 

1994

 

12983 Southern Blvd.

Marietta, GA

 

 

-

 

2,682

 

20,053

 

-

 

2,682

 

20,053

 

-

 

2016

 

2016

 

4800 Olde Towne Parkway

Marinette, WI

 

 

5,455

 

-

 

13,538

 

-

 

-

 

13,538

 

3,685

 

2010

 

2002

 

4061 Old Peshtigo Rd.

Melbourne, FL

 

 

-

 

3,439

 

50,461

 

318

 

3,439

 

50,779

 

5,089

 

2014

 

2009

 

2222 South Harbor City Boulevard

Menasha, WI

 

 

-

 

1,374

 

13,861

 

3,119

 

1,374

 

16,980

 

650

 

2016

 

1994

 

1550 Midway Place

Merced, CA

 

 

-

 

-

 

14,585

 

-

 

-

 

14,585

 

3,858

 

2009

 

2010

 

315 Mercy Ave.

Merriam, KS

 

 

-

 

176

 

8,005

 

133

 

176

 

8,138

 

2,592

 

2011

 

1972

 

8800 West 75th Street

Merriam, KS

 

 

-

 

-

 

1,996

 

2,166

 

81

 

4,081

 

1,347

 

2011

 

1980

 

7301 Frontage Street

Merriam, KS

 

 

-

 

-

 

10,222

 

4,283

 

358

 

14,146

 

4,293

 

2011

 

1977

 

8901 West 74th Street

Merriam, KS

 

 

-

 

-

 

5,862

 

3,132

 

182

 

8,811

 

2,655

 

2011

 

1985

 

9119 West 74th Street

Merriam, KS

 

 

-

 

1,226

 

24,998

 

62

 

1,257

 

25,029

 

3,699

 

2013

 

2009

 

9301 West 74th Street

Merrillville, IN

 

 

-

 

-

 

22,134

 

689

 

-

 

22,823

 

5,749

 

2008

 

2006

 

101 E. 87th Ave.

Mesa, AZ

 

 

-

 

1,558

 

9,561

 

653

 

1,558

 

10,214

 

3,928

 

2008

 

1989

 

6424 East Broadway Road

Mesquite, TX

 

 

-

 

496

 

3,834

 

-

 

496

 

3,834

 

699

 

2012

 

2012

 

1575 I-30

Milwaukee, WI

 

 

3,658

 

540

 

8,457

 

-

 

540

 

8,457

 

2,069

 

2010

 

1930

 

1218 W. Kilbourn Ave.

Milwaukee, WI

 

 

8,062

 

1,425

 

11,520

 

-

 

1,425

 

11,520

 

3,676

 

2010

 

1962

 

3301-3355 W. Forest Home Ave.

Milwaukee, WI

 

 

2,016

 

922

 

2,185

 

-

 

922

 

2,185

 

871

 

2010

 

1958

 

840 N. 12th St.

Milwaukee, WI

 

 

15,896

 

-

 

44,535

 

-

 

-

 

44,535

 

9,857

 

2010

 

1983

 

2801 W. Kinnickinnic Pkwy.

Mission Hills, CA

 

 

24,796

 

-

 

42,276

 

2,080

 

4,791

 

39,565

 

4,793

 

2014

 

1986

 

11550 Indian Hills Road

Missouri City, TX

 

 

-

 

-

 

-

 

8,883

 

1,360

 

7,523

 

63

 

2015

 

2016

 

7010 Highway 6

Moline, IL

 

 

-

 

-

 

8,783

 

29

 

-

 

8,812

 

715

 

2012

 

2013

 

3900 28th Avenue Drive

Monticello, MN

 

 

8,021

 

61

 

18,489

 

48

 

61

 

18,537

 

2,651

 

2012

 

2008

 

1001 Hart Boulevard

Moorestown, NJ

 

 

-

 

6

 

50,896

 

6

 

6

 

50,902

 

8,377

 

2011

 

2012

 

401  Young Avenue

Mount Juliet, TN

 

 

2,479

 

1,566

 

11,697

 

1,173

 

1,566

 

12,870

 

4,749

 

2007

 

2005

 

5002 Crossings Circle

Mount Vernon, IL

 

 

-

 

-

 

24,892

 

-

 

-

 

24,892

 

4,238

 

2011

 

2012

 

4121 Veterans Memorial Dr

Murrieta, CA

 

 

-

 

3,800

 

-

 

-

 

3,800

 

-

 

-

 

2014

 

1900

 

28078 Baxter Rd.

Murrieta, CA

 

 

-

 

-

 

47,190

 

46

 

-

 

47,236

 

13,323

 

2010

 

2011

 

28078 Baxter Rd.

Muskego, WI

 

 

970

 

964

 

2,159

 

-

 

964

 

2,159

 

488

 

2010

 

1993

 

S74 W16775 Janesville Rd.

Nashville, TN

 

 

-

 

1,806

 

7,165

 

3,120

 

1,806

 

10,285

 

3,787

 

2006

 

1986

 

310 25th Ave. N.

New Albany, IN

 

 

-

 

2,411

 

16,494

 

30

 

2,411

 

16,524

 

1,656

 

2014

 

2001

 

2210 Green Valley Road

New Berlin, WI

 

 

3,738

 

3,739

 

8,290

 

-

 

3,739

 

8,290

 

2,035

 

2010

 

1993

 

14555 W. National Ave.

Niagara Falls, NY

 

 

-

 

1,433

 

10,891

 

448

 

1,731

 

11,042

 

4,807

 

2007

 

1995

 

6932 - 6934 Williams Rd

Niagara Falls, NY

 

 

-

 

454

 

8,362

 

322

 

454

 

8,683

 

2,662

 

2007

 

2004

 

6930 Williams Rd

Oklahoma City, OK

 

 

-

 

216

 

19,135

 

280

 

216

 

19,415

 

3,515

 

2013

 

2008

 

535 NW 9th Street

Oro Valley, AZ

 

 

-

 

89

 

18,339

 

856

 

89

 

19,195

 

6,000

 

2007

 

2004

 

1521 E. Tangerine Rd.

Oshkosh, WI

 

 

-

 

-

 

18,339

 

-

 

-

 

18,339

 

4,117

 

2010

 

2000

 

855 North Wethaven Dr.

Oshkosh, WI

 

 

6,749

 

-

 

15,881

 

-

 

-

 

15,881

 

3,528

 

2010

 

2000

 

855 North Wethaven Dr.

Palmer, AK

 

 

-

 

217

 

29,705

 

1,362

 

217

 

31,067

 

9,424

 

2007

 

2006

 

2490 South Woodworth Loop

Pasadena, TX

 

 

-

 

1,700

 

8,009

 

-

 

1,700

 

8,009

 

702

 

2012

 

2013

 

5001 E Sam Houston Parkway S

Pearland, TX

 

 

-

 

1,500

 

11,253

 

-

 

1,500

 

11,253

 

894

 

2012

 

2013

 

2515 Business Center Drive

Pearland, TX

 

 

-

 

9,594

 

32,753

 

191

 

9,807

 

32,731

 

2,569

 

2014

 

2013

 

11511 Shadow Creek Parkway

Pendleton, OR

 

 

-

 

-

 

10,312

 

6

 

-

 

10,318

 

812

 

2012

 

2013

 

3001 St. Anthony Drive

Phoenix, AZ

 

 

-

 

1,149

 

48,018

 

11,308

 

1,149

 

59,327

 

20,711

 

2006

 

1998

 

2222 E. Highland Ave.

Pineville, NC

 

 

-

 

961

 

6,974

 

2,463

 

1,077

 

9,321

 

3,747

 

2006

 

1988

 

10512 Park Rd.

Plano, TX

 

 

-

 

5,423

 

20,698

 

57

 

5,423

 

20,755

 

10,292

 

2008

 

2007

 

6957 Plano Parkway

Plano, TX

 

 

51,686

 

793

 

83,209

 

989

 

793

 

84,198

 

16,056

 

2012

 

2005

 

6020 West Parker Road

Plantation, FL

 

 

-

 

8,563

 

10,666

 

3,475

 

8,575

 

14,130

 

6,384

 

2006

 

1997

 

851-865 SW 78th Ave.

Plantation, FL

 

 

-

 

8,848

 

9,262

 

640

 

8,908

 

9,842

 

6,207

 

2006

 

1996

 

600 Pine Island Rd.

Plymouth, WI

 

 

1,131

 

1,250

 

1,870

 

-

 

1,250

 

1,870

 

515

 

2010

 

1991

 

2636 Eastern Ave.

Portland, ME

 

 

-

 

655

 

25,930

 

13

 

655

 

25,943

 

6,128

 

2011

 

2008

 

195 Fore River Parkway

Redmond, WA

 

 

-

 

5,015

 

26,709

 

284

 

5,015

 

26,993

 

6,187

 

2010

 

2011

 

18000 NE Union Hill Rd.

Reno, NV

 

 

-

 

1,117

 

21,972

 

2,070

 

1,117

 

24,042

 

7,907

 

2006

 

1991

 

343 Elm St.

Richmond, TX

 

 

-

 

-

 

-

 

11,118

 

2,000

 

9,118

 

171

 

2015

 

2016

 

22121 FM 1093 Road

Richmond, VA

 

 

-

 

2,969

 

26,697

 

60

 

3,004

 

26,722

 

5,926

 

2012

 

2008

 

7001 Forest Avenue

Rockwall, TX

 

 

-

 

132

 

17,197

 

522

 

132

 

17,719

 

3,516

 

2012

 

2008

 

3142 Horizon Road

Rogers, AR

 

 

-

 

1,062

 

29,277

 

-

 

1,062

 

29,277

 

7,493

 

2011

 

2008

 

2708 Rife Medical Lane

Rolla, MO

 

 

-

 

1,931

 

47,639

 

-

 

1,931

 

47,639

 

9,312

 

2011

 

2009

 

1605 Martin Spring Drive

Roswell, NM

 

 

-

 

183

 

5,851

 

-

 

183

 

5,851

 

1,368

 

2011

 

2004

 

601 West Country Club Road

Roswell, NM

 

 

-

 

883

 

15,984

 

30

 

883

 

16,014

 

3,346

 

2011

 

2006

 

350 West Country Club Road

Roswell, NM

 

 

-

 

762

 

17,171

 

1

 

762

 

17,171

 

2,916

 

2011

 

2009

 

300 West Country Club Road

Sacramento, CA

 

 

-

 

866

 

12,756

 

1,834

 

869

 

14,587

 

5,092

 

2006

 

1990

 

8120 Timberlake Way

Salem, NH

 

 

-

 

1,655

 

14,050

 

20

 

1,655

 

14,070

 

1,716

 

2014

 

2013

 

31 Stiles Road

San Antonio, TX

 

 

-

 

1,012

 

10,178

 

-

 

1,012

 

10,178

 

4,177

 

2006

 

1999

 

19016 Stone Oak Pkwy.

San Antonio, TX

 

 

-

 

1,038

 

9,173

 

1,777

 

1,038

 

10,950

 

4,777

 

2006

 

1999

 

540 Stone Oak Centre Drive

San Antonio, TX

 

 

-

 

4,518

 

31,041

 

2,610

 

4,548

 

33,621

 

7,824

 

2012

 

1986

 

5282 Medical Drive

San Antonio, TX

 

 

-

 

900

 

17,288

 

473

 

900

 

17,761

 

2,700

 

2014

 

2007

 

3903 Wiseman Boulevard

Santa Clarita, CA

 

 

-

 

-

 

2,338

 

19,914

 

5,196

 

17,056

 

1,932

 

2014

 

1976

 

23861 McBean Parkway

Santa Clarita, CA

 

 

-

 

-

 

28,384

 

1,926

 

5,250

 

25,060

 

2,736

 

2014

 

1998

 

23929 McBean Parkway

Santa Clarita, CA

 

 

-

 

278

 

185

 

11,595

 

11,872

 

185

 

95

 

2014

 

1996

 

23871 McBean Parkway

Santa Clarita, CA

 

 

25,000

 

295

 

40,257

 

-

 

295

 

40,257

 

2,745

 

2014

 

2013

 

23803 McBean Parkway

Santa Clarita, CA

 

 

-

 

-

 

20,618

 

375

 

4,407

 

16,586

 

1,957

 

2014

 

1989

 

24355 Lyons Avenue

Sarasota, FL

 

 

-

 

62

 

47,325

 

1,964

 

62

 

49,290

 

9,088

 

2012

 

1990

 

1921 Waldemere Street

Seattle, WA

 

 

-

 

4,410

 

38,428

 

392

 

4,410

 

38,820

 

11,598

 

2010

 

2010

 

5350 Tallman Ave

Sewell, NJ

 

 

-

 

60

 

57,929

 

294

 

74

 

58,209

 

18,809

 

2007

 

2009

 

239 Hurffville-Cross Keys Road

Shakopee, MN

 

 

6,132

 

508

 

11,412

 

275

 

509

 

11,687

 

3,201

 

2010

 

1996

 

1515 St Francis Ave

Shakopee, MN

 

 

10,363

 

707

 

18,089

 

66

 

773

 

18,089

 

3,781

 

2010

 

2007

 

1601 St Francis Ave

Sheboygan, WI

 

 

1,563

 

1,012

 

2,216

 

-

 

1,012

 

2,216

 

616

 

2010

 

1958

 

1813 Ashland Ave.

Shenandoah, TX

 

 

-

 

-

 

21,135

 

-

 

-

 

21,135

 

1,057

 

2013

 

2014

 

106 Vision Park Boulevard

Sherman Oaks, CA

 

 

-

 

-

 

32,186

 

2,423

 

3,121

 

31,488

 

3,439

 

2014

 

1969

 

4955 Van Nuys Boulevard

Somerville, NJ

 

 

-

 

3,400

 

22,244

 

2

 

3,400

 

22,246

 

4,681

 

2008

 

2007

 

30 Rehill Avenue

Southlake, TX

 

 

-

 

3,000

 

-

 

-

 

3,000

 

-

 

-

 

2014

 

1900

 

Central Avenue

Southlake, TX

 

 

-

 

592

 

18,243

 

338

 

592

 

18,581

 

3,616

 

2012

 

2004

 

1545 East Southlake Boulevard

Southlake, TX

 

 

17,534

 

698

 

30,549

 

3,840

 

698

 

34,389

 

5,370

 

2012

 

2004

 

1545 East Southlake Boulevard

Springfield, IL

 

 

-

 

-

 

-

 

11,919

 

1,568

 

10,351

 

459

 

2010

 

2011

 

1100 East Lincolnshire Blvd

Springfield, IL

 

 

-

 

-

 

-

 

3,728

 

177

 

3,551

 

161

 

2010

 

2011

 

2801 Mathers Rd

St Paul, MN

 

 

-

 

49

 

37,695

 

330

 

49

 

38,025

 

2,691

 

2014

 

2006

 

225 Smith Avenue N.

St. Louis, MO

 

 

-

 

336

 

17,247

 

1,501

 

336

 

18,748

 

6,141

 

2007

 

2001

 

2325 Dougherty Rd.

St. Paul, MN

 

 

-

 

2,706

 

39,507

 

11

 

2,701

 

39,523

 

9,139

 

2011

 

2007

 

435 Phalen Boulevard

Stamford, CT

 

 

-

 

-

 

-

 

41,153

 

-

 

41,153

 

-

 

2015

 

2016

 

29 Hospital Plaza

Suffern, NY

 

 

-

 

653

 

37,255

 

200

 

696

 

37,412

 

8,423

 

2011

 

2007

 

255 Lafayette Avenue

Suffolk, VA

 

 

-

 

1,566

 

11,511

 

25

 

1,566

 

11,537

 

3,829

 

2010

 

2007

 

5838 Harbour View Blvd.

Sugar Land, TX

 

 

8,076

 

3,543

 

15,532

 

-

 

3,543

 

15,532

 

3,526

 

2012

 

2005

 

11555 University Boulevard

Summit, WI

 

 

-

 

2,899

 

87,416

 

-

 

2,899

 

87,416

 

26,616

 

2008

 

2009

 

36500 Aurora Dr.

Tacoma, WA

 

 

-

 

-

 

64,307

 

-

 

-

 

64,307

 

11,469

 

2011

 

2013

 

1608 South J Street

Tallahassee, FL

 

 

-

 

-

 

17,449

 

-

 

-

 

17,449

 

4,335

 

2010

 

2011

 

One Healing Place

Tampa, FL

 

 

-

 

4,319

 

12,234

 

-

 

4,319

 

12,234

 

2,047

 

2011

 

2003

 

14547 Bruce B Downs Blvd

Temple, TX

 

 

-

 

2,900

 

9,954

 

26

 

2,900

 

9,980

 

1,122

 

2011

 

2012

 

2601 Thornton Lane

Tucson, AZ

 

 

-

 

1,302

 

4,925

 

847

 

1,325

 

5,749

 

2,429

 

2008

 

1995

 

2055 W. Hospital Dr.

Tustin, CA

 

 

-

 

3,345

 

541

 

-

 

3,345

 

541

 

193

 

2015

 

1976

 

14591 Newport Ave

Tustin, CA

 

 

-

 

3,361

 

12,039

 

1,374

 

3,361

 

13,413

 

1,294

 

2015

 

1985

 

14642 Newport Ave

Van Nuys, CA

 

 

-

 

-

 

36,187

 

-

 

-

 

36,187

 

7,655

 

2009

 

1991

 

6815 Noble Ave.

Voorhees, NJ

 

 

-

 

6,404

 

24,251

 

1,474

 

6,477

 

25,651

 

8,389

 

2006

 

1997

 

900 Centennial Blvd.

Voorhees, NJ

 

 

-

 

6

 

96,075

 

77

 

6

 

96,152

 

17,750

 

2010

 

2012

 

200 Bowman Drive

Waxahachie, TX

 

 

-

 

-

 

18,784

 

-

 

-

 

18,784

 

40

 

2016

 

2014

 

2460 N I-35 East

Wellington, FL

 

 

-

 

107

 

16,933

 

2,639

 

316

 

19,364

 

5,685

 

2006

 

2000

 

10115 Forest Hill Blvd.

Wellington, FL

 

 

-

 

388

 

13,697

 

1,572

 

580

 

15,077

 

4,256

 

2007

 

2003

 

1395 State Rd. 7

West Allis, WI

 

 

2,869

 

1,104

 

3,303

 

-

 

1,106

 

3,301

 

1,100

 

2010

 

1961

 

11333 W. National Ave.

West Seneca, NY

 

 

-

 

917

 

22,435

 

3,531

 

1,665

 

25,218

 

8,459

 

2007

 

1990

 

550 Orchard Park Rd

Zephyrhills, FL

 

 

-

 

3,875

 

27,270

 

-

 

3,875

 

27,270

 

4,992

 

2011

 

1974

 

38135 Market Square Dr

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outpatient medical total:

 

$

404,079

$

505,698

$

4,548,662

$

450,707

$

585,521

$

4,919,550

$

984,766

 

 

 

 

 

 

124

 

   

 

Assets held for sale:

 

 

Akron, OH

 

$

-

$

630

$

7,535

$

-

$

-

$

6,212

$

-

 

2006

 

1915

 

209 Merriman Road

Akron, OH

 

 

-

 

290

 

8,219

 

-

 

-

 

6,260

 

-

 

2005

 

1961

 

721 Hickory St.

Alliance, OH

 

 

-

 

270

 

7,723

 

-

 

-

 

5,764

 

-

 

2006

 

1982

 

1785 Freshley Ave.

Aventura, FL

 

 

-

 

4,540

 

33,986

 

-

 

-

 

35,599

 

-

 

2012

 

2001

 

2777 NE 183rd Street

Baltic, OH

 

 

-

 

50

 

8,709

 

-

 

-

 

6,339

 

-

 

2006

 

1983

 

130 Buena Vista St.

Bellingham, MA

 

 

-

 

9,270

 

-

 

-

 

-

 

1,372

 

-

 

2007

 

1900

 

Maple Street and High Street

Boca Raton, FL

 

 

-

 

1,440

 

31,048

 

-

 

-

 

30,214

 

-

 

2012

 

1989

 

1080 Northwest 15th Street

Boonville, IN

 

 

-

 

190

 

5,510

 

-

 

-

 

3,492

 

-

 

2002

 

2000

 

1325 N. Rockport Rd.

Chicago, IL

 

 

-

 

1,800

 

19,256

 

-

 

-

 

18,878

 

-

 

2012

 

2005

 

6700 South Keating Avenue

Chicago, IL

 

 

-

 

2,900

 

17,016

 

-

 

-

 

17,840

 

-

 

2012

 

2007

 

4239 North Oak Park Avenue

Columbus, OH

 

 

-

 

530

 

5,170

 

4,434

 

-

 

10,134

 

-

 

2005

 

1968

 

1425 Yorkland Rd.

Columbus, OH

 

 

-

 

1,010

 

5,022

 

-

 

-

 

4,386

 

-

 

2006

 

1983

 

1850 Crown Park Ct.

Columbus, OH

 

 

-

 

1,010

 

4,931

 

8,418

 

-

 

14,359

 

-

 

2006

 

1978

 

5700 Karl Rd.

Columbus, IN

 

 

-

 

530

 

6,710

 

-

 

-

 

4,703

 

-

 

2002

 

2001

 

2011 Chapa Dr.

Columbus, OH

 

 

-

 

-

 

-

 

7,023

 

-

 

7,023

 

-

 

2012

 

1994

 

750 Mt. Carmel Mall

Conyers, GA

 

 

-

 

2,740

 

19,302

 

-

 

-

 

20,186

 

-

 

2012

 

1998

 

1504 Renaissance Drive

Cortland, NY

 

 

-

 

700

 

18,041

 

-

 

-

 

16,935

 

-

 

2012

 

2001

 

839 Bennie Road

El Paso, TX

 

 

-

 

1,420

 

12,394

 

-

 

-

 

13,347

 

-

 

2014

 

1999

 

435 S Mesa Hills Drive

Fayetteville, GA

 

 

-

 

560

 

12,665

 

-

 

-

 

12,165

 

-

 

2012

 

1994

 

1967 Highway 54 West

Fredericksburg, VA

 

 

-

 

3,700

 

22,016

 

-

 

-

 

23,684

 

-

 

2012

 

1992

 

12100 Chancellors Village

Germantown, TN

 

 

-

 

3,049

 

12,456

 

-

 

-

 

12,202

 

-

 

2006

 

2002

 

1325 Wolf Park Drive

Greendale, WI

 

 

-

 

2,060

 

35,383

 

-

 

-

 

33,762

 

-

 

2012

 

1988

 

5700 Mockingbird Lane

Hanover, IN

 

 

-

 

210

 

4,430

 

-

 

-

 

3,025

 

-

 

2004

 

2000

 

188 Thornton Rd

Hattiesburg, MS

 

 

-

 

-

 

-

 

11,863

 

-

 

11,863

 

-

 

2010

 

2009

 

217 Methodist Hospital Blvd

Hemet, CA

 

 

-

 

1,890

 

28,606

 

-

 

-

 

22,635

 

-

 

2010

 

1989

 

1001 N. Lyon Ave

Hemet, CA

 

 

-

 

430

 

9,630

 

-

 

-

 

8,993

 

-

 

2010

 

1988

 

1001 N. Lyon Ave

Hermitage, TN

 

 

-

 

-

 

-

 

10,121

 

-

 

10,121

 

-

 

2011

 

2006

 

4131 Andrew Jackson Parkway

Hollywood, FL

 

 

-

 

1,240

 

13,806

 

-

 

-

 

14,106

 

-

 

2012

 

2001

 

3880 South Circle Drive

Houston, TX

 

 

-

 

5,090

 

9,471

 

-

 

-

 

8,503

 

-

 

2007

 

2009

 

15015 Cypress Woods Medical Drive

Huron, OH

 

 

-

 

160

 

6,088

 

-

 

-

 

5,566

 

-

 

2005

 

1983

 

1920 Cleveland Rd. W.

Jackson, NJ

 

 

-

 

6,500

 

26,405

 

-

 

-

 

32,201

 

-

 

2012

 

2001

 

2 Kathleen Drive

Jacksonville Beach, FL

 

 

-

 

1,210

 

26,207

 

-

 

-

 

25,088

 

-

 

2012

 

1999

 

1700 The Greens Way

Jefferson, OH

 

 

-

 

80

 

9,120

 

-

 

-

 

6,402

 

-

 

2006

 

1984

 

222 Beech St.

Jupiter, FL

 

 

-

 

3,100

 

47,453

 

-

 

-

 

46,458

 

-

 

2012

 

2002

 

110 Mangrove Bay Way

Kennesaw, GA

 

 

-

 

940

 

10,848

 

-

 

-

 

10,943

 

-

 

2012

 

1998

 

5235 Stilesboro Road

Kennewick, WA

 

 

-

 

1,820

 

27,991

 

-

 

-

 

23,390

 

-

 

2010

 

1994

 

2802 W 35th Ave

Lake Barrington, IL

 

 

-

 

3,400

 

66,179

 

-

 

-

 

63,190

 

-

 

2012

 

2000

 

22320 Classic Court

Lancaster, NH

 

 

-

 

160

 

434

 

-

 

-

 

493

 

-

 

2011

 

1905

 

63 Country Village Road

Lexington, KY

 

 

-

 

1,980

 

21,258

 

-

 

-

 

21,928

 

-

 

2014

 

2013

 

2531 Old Rosebud Road

Loganville, GA

 

 

-

 

1,430

 

22,912

 

-

 

-

 

22,257

 

-

 

2012

 

1997

 

690 Tommy Lee Fuller Drive

Marietta, GA

 

 

-

 

1,270

 

10,519

 

-

 

-

 

11,054

 

-

 

2012

 

1997

 

3039 Sandy Plains Road

Monclova, OH

 

 

-

 

1,750

 

11,868

 

-

 

-

 

12,230

 

-

 

2011

 

2013

 

6935 Monclova Road

Monroe, WA

 

 

-

 

2,560

 

34,460

 

-

 

-

 

29,936

 

-

 

2010

 

1994

 

15465 179th Ave. SE

Morrow, GA

 

 

-

 

818

 

8,064

 

-

 

-

 

5,913

 

-

 

2007

 

1990

 

6635 Lake Drive

Naples, FL

 

 

-

 

1,716

 

17,306

 

-

 

-

 

4,055

 

-

 

1997

 

1999

 

1710 S.W. Health Pkwy.

Olympia, WA

 

 

-

 

550

 

16,689

 

-

 

-

 

13,830

 

-

 

2010

 

1995

 

616 Lilly Rd. NE

Orange Village, OH

 

 

-

 

610

 

7,419

 

-

 

-

 

6,096

 

-

 

2007

 

1985

 

3755 Orange Place

Palm Springs, FL

 

 

-

 

739

 

4,066

 

-

 

-

 

2,061

 

-

 

2006

 

1993

 

1640 S. Congress Ave.

Palm Springs, FL

 

 

-

 

1,182

 

7,765

 

-

 

-

 

3,062

 

-

 

2006

 

1997

 

1630 S. Congress Ave.

Panama City Beach, FL

 

 

-

 

-

 

-

 

6,367

 

-

 

6,367

 

-

 

2011

 

2005

 

6012 Magnolia Beach Road

Plano, TX

 

 

4,032

 

840

 

8,538

 

-

 

-

 

2,499

 

-

 

2011

 

1996

 

5521 Village Creek Dr

San Ramon, CA

 

 

-

 

2,430

 

17,488

 

-

 

-

 

16,188

 

-

 

2010

 

1989

 

18888 Bollinger Canyon Rd

Sarasota, FL

 

 

-

 

950

 

8,825

 

-

 

-

 

9,314

 

-

 

2012

 

1998

 

3221 Fruitville Road

Sarasota, FL

 

 

-

 

1,120

 

12,489

 

-

 

-

 

12,360

 

-

 

2012

 

1999

 

2290 Cattlemen Road

Sarasota, FL

 

 

-

 

880

 

9,854

 

-

 

-

 

9,998

 

-

 

2012

 

1990

 

3749 Sarasota Square Boulevard

Seattle, WA

 

 

-

 

3,420

 

15,555

 

-

 

-

 

15,455

 

-

 

2010

 

2000

 

2326 California Ave SW

Seattle, WA

 

 

-

 

2,630

 

10,257

 

-

 

-

 

10,996

 

-

 

2010

 

2003

 

4611 35th Ave SW

St. Louis, MO

 

 

-

 

-

 

-

 

12,522

 

-

 

12,522

 

-

 

2010

 

1963

 

6543 Chippewa St

Stanwood, WA

 

 

-

 

2,260

 

28,474

 

-

 

-

 

24,648

 

-

 

2010

 

1998

 

7212 265th St NW

Thomasville, GA

 

 

-

 

-

 

-

 

11,378

 

-

 

11,378

 

-

 

2011

 

2006

 

423 Covington Avenue

Uhrichsville, OH

 

 

-

 

24

 

6,716

 

-

 

-

 

4,763

 

-

 

2006

 

1977

 

5166 Spanson Drive S.E.

Victoria, BC

 

 

-

 

2,674

 

14,218

 

-

 

-

 

13,876

 

-

 

2012

 

2002

 

2638 Ross Lane

Webster, NY

 

 

-

 

800

 

8,968

 

-

 

-

 

8,847

 

-

 

2012

 

2001

 

100 Kidd Castle Way

Webster, NY

 

 

-

 

1,300

 

21,127

 

-

 

-

 

20,295

 

-

 

2012

 

2001

 

200 Kidd Castle Way

Webster Groves, MO

 

 

-

 

1,790

 

15,425

 

-

 

-

 

15,642

 

-

 

2011

 

2012

 

45 E Lockwood Avenue

West Chester, PA

 

 

-

 

3,290

 

42,258

 

-

 

-

 

41,176

 

-

 

2012

 

2000

 

1615 East Boot Road

West Chester, PA

 

 

-

 

600

 

11,894

 

-

 

-

 

11,065

 

-

 

2012

 

2002

 

1615 East Boot Road

West Worthington, OH

 

 

-

 

510

 

5,090

 

-

 

-

 

4,046

 

-

 

2006

 

1980

 

111 Lazelle Rd., E.

Whittier, CA

 

 

-

 

4,470

 

22,151

 

-

 

-

 

20,590

 

-

 

2010

 

1988

 

13250 E Philadelphia St

Wichita Falls, TX

 

 

-

 

1,070

 

26,167

 

-

 

-

 

25,898

 

-

 

2014

 

1998

 

3908 Kell W Boulevard

Willard, OH

 

 

-

 

730

 

6,447

 

-

 

-

 

6,317

 

-

 

2011

 

2012

 

1050 Neal Zick

Winter Haven, FL

 

 

-

 

710

 

10,038

 

-

 

-

 

10,364

 

-

 

2014

 

1979

 

650 North Lake Howard Drive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets held for sale total

 

$

4,032

$

112,022

$

1,044,065

$

72,126

$

-

$

1,044,859

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

128

 

   



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Triple-net

$

594,199

$

804,007

$

7,794,067

$

718,637

$

853,984

$

8,462,729

$

1,317,149

Seniors housing operating

 

2,400,836

 

1,085,554

 

11,775,094

 

807,677

 

1,151,566

 

12,516,758

 

1,791,579

Outpatient medical

 

404,079

 

505,698

 

4,548,662

 

450,707

 

585,521

 

4,919,550

 

984,766

Construction in progress

 

58,381

 

-

 

506,091

 

-

 

-

 

506,091

 

-

Total continuing operating properties

 

3,457,495

 

2,395,259

 

24,623,914

 

1,977,021

 

2,591,071

 

26,405,128

 

4,093,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets held for sale

 

4,032

 

112,022

 

1,044,065

 

72,126

 

-

 

1,044,859

 

-

Total investments in real property owned

$

3,461,527

$

2,507,281

$

25,667,979

$

2,049,147

$

2,591,071

$

27,449,987

$

4,093,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Please see Note 2 to our consolidated financial statements for information regarding lives used for depreciation and amortization.

(2) Represents real property asset associated with a capital lease.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

129

 

   

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

2016

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of real property:

 

 

(in thousands)

 

Investment in real estate:

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of year

 

$

29,865,490

 

$

25,491,935

 

$

23,734,733

 

 

Additions:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions

 

 

2,145,590

 

 

3,364,891

 

 

2,210,600

 

 

 

Improvements

 

 

672,008

 

 

445,625

 

 

380,298

 

 

 

Assumed other items, net

 

 

172,095

 

 

389,256

 

 

160,897

 

 

 

Assumed debt

 

 

63,732

 

 

1,064,810

 

 

265,152

 

 

Total additions

 

 

3,053,425

 

 

5,264,582

 

 

3,016,947

 

 

Deductions:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of real estate sold

 

 

(2,118,305)

 

 

(449,932)

 

 

(916,997)

 

 

 

Reclassification of accumulated depreciation and amortization for assets held for sale

 

 

(292,914)

 

 

(41,464)

 

 

(64,476)

 

 

 

Impairment of assets

 

 

(37,207)

 

 

(2,220)

 

 

-

 

 

Total deductions

 

 

(2,448,426)

 

 

(493,616)

 

 

(981,473)

 

 

Foreign currency translation

 

 

(429,431)

 

 

(397,411)

 

 

(278,272)

 

 

Balance at end of year(1)

 

$

30,041,058

 

$

29,865,490

 

$

25,491,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation:

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of year

 

$

3,796,297

 

$

3,020,908

 

$

2,386,658

 

 

Additions:

 

 

 

 

 

 

 

 

.

 

 

 

Depreciation and amortization expenses

 

 

901,242

 

 

826,240

 

 

844,130

 

 

 

Amortization of above market leases

 

 

7,909

 

 

11,912

 

 

7,935

 

 

Total additions

 

 

909,151

 

 

838,152

 

 

852,065

 

 

Deductions:

 

 

 

 

 

 

 

 

 

 

 

 

Sale of properties

 

 

(221,737)

 

 

(69,735)

 

 

(123,582)

 

 

 

Reclassification of accumulated depreciation and amortization for assets held for sale

 

 

(292,914)

 

 

(41,464)

 

 

(64,476)

 

 

Total deductions

 

 

(514,651)

 

 

(111,199)

 

 

(188,058)

 

 

Foreign currency translation

 

 

(97,303)

 

 

48,436

 

 

(29,757)

 

 

Balance at end of year

 

$

4,093,494

 

$

3,796,297

 

$

3,020,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The unaudited aggregate cost for tax purposes for real property equals $24,887,189,000 at December 31, 2016.

 

131

 

   

Welltower Inc.

Schedule IV - Mortgage Loans on Real Estate

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Location

Segment

 

Interest Rate

 

Final Maturity Date

 

 

Monthly Payment Terms

 

 

Prior Liens

 

 

Face Amount of Mortgages

 

 

Carrying Amount of Mortgages

 

 

Principal Amount of Loans Subject to Delinquent Principal or Interest

 

First mortgages relating to 1 property located in:

 

 

 

 

 

 

 

 

 

 

 

 

 

California

Outpatient Medical

 

6.35%

 

12/22/17

 

$

348,542

 

$

-

 

$

65,000

 

$

60,500

 

$

63,553

 

United Kingdom

Triple-Net

 

7.25%

 

11/21/18

 

 

105,443

 

 

-

 

 

17,149

 

 

17,149

 

 

-

 

United Kingdom

Triple-Net

 

7.00%

 

12/31/19

 

 

133,193

 

 

-

 

 

28,047

 

 

22,273

 

 

-

 

United Kingdom

Triple-Net

 

8.55%

 

07/01/19

 

 

64,706

 

 

-

 

 

14,122

 

 

9,022

 

 

-

 

United Kingdom

Triple-Net

 

8.00%

 

07/06/19

 

 

48,485

 

 

-

 

 

18,506

 

 

7,202

 

 

-

 

United Kingdom

Triple-Net

 

8.04%

 

01/16/18

 

 

8,409

 

 

-

 

 

2,591

 

 

1,233

 

 

-

 

United Kingdom

Triple-Net

 

7.00%

 

02/28/21

 

 

107,010

 

 

-

 

 

26,074

 

 

17,680

 

 

-

 

Oklahoma

Triple-Net

 

8.72%

 

11/01/19

 

 

85,043

 

 

-

 

 

11,610

 

 

11,486

 

 

-

 

Oregon

Triple-Net

 

7.10%

 

05/01/17

 

 

1,357

 

 

-

 

 

225

 

 

225

 

 

-

 

Pennsylvania

Triple-Net

 

7.10%

 

06/01/17

 

 

1,479

 

 

-

 

 

250

 

 

250

 

 

-

 

Texas

Triple-Net

 

8.00%

 

02/28/21

 

 

53,507

 

 

-

 

 

7,875

 

 

7,875

 

 

-

 

Florida

Triple-Net

 

8.11%

 

06/23/21

 

 

13,955

 

 

-

 

 

17,100

 

 

2,029

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgages relating to multiple properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

3 properties in two states

Triple-Net

 

10.00%

 

01/01/22

 

$

76,331

 

$

-

 

$

9,000

 

$

9,000

 

$

-

 

13 properties in Texas

Triple-Net

 

10.00%

 

01/01/22

 

 

878,820

 

 

-

 

 

103,620

 

 

103,620

 

 

-

 

11 properties in six states

Triple-Net

 

10.00%

 

01/01/22

 

 

558,025

 

 

-

 

 

65,796

 

 

65,796

 

 

-

 

18 properties in six states

Triple-Net

 

10.00%

 

01/01/22

 

 

1,175,775

 

 

-

 

 

138,634

 

 

138,634

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second mortgages relating to 1 property located in:

 

 

 

 

 

 

 

 

 

 

 

 

 

Connecticut

Triple-Net

 

8.11%

 

04/01/18

 

$

43,225

 

$

16,709

 

$

6,270

 

$

6,270

 

$

-

 

Texas

Triple-Net

 

12.17%

 

05/01/19

 

 

32,033

 

 

11,751

 

 

3,100

 

 

3,100

 

 

-

 

Texas

Triple-Net

 

10.00%

 

12/30/18

 

 

20,247

 

 

11,186

 

 

25,000

 

 

2,391

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Totals

 

 

 

 

 

 

 

 

 

$

39,646

 

$

559,969

 

$

485,735

 

$

63,553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

 

 

 

2016

 

 

2015

 

 

2014

Reconciliation of mortgage loans:

 

 

 

 

 

 

(in thousands)

 

Balance at beginning of year

 

 

 

 

 

$

635,492

 

$

188,651

 

$

146,987

 

Additions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New mortgage loans

 

 

 

 

 

 

8,223

 

 

524,088

 

 

113,996

 

 

Draws on existing loans

 

 

 

 

 

 

92,815

 

 

30,550

 

 

26,330

 

Total additions

 

 

 

 

 

 

101,038

 

 

554,638

 

 

140,326

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deductions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collections of principal

 

 

 

 

 

 

(191,134)

 

 

(80,552)

 

 

(49,974)

 

 

Conversions to real property

 

 

 

 

 

 

(45,044)

 

 

(23,288)

 

 

(45,836)

 

 

Charge-offs

 

 

 

 

 

 

(3,053)

 

 

-

 

 

-

 

Total deductions

 

 

 

 

 

 

(239,231)

 

 

(103,840)

 

 

(95,810)

 

Change in balance due to foreign currency translation

 

 

 

 

 

 

(11,564)

 

 

(3,957)

 

 

(2,852)

 

Balance at end of year

 

 

 

 

 

$

485,735

 

$

635,492

 

$

188,651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

132

 

  

EXHIBIT INDEX

 

3.1(a)     Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-K filed March 20, 2000 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(b)     Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-K filed March 20, 2000 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(c)      Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed June 13, 2003 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(d)     Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.9 to the Company’s Form 10-Q filed August 9, 2007 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(e)      Certificate of Change of Location of Registered Office and of Registered Agent of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-Q filed August 6, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(f)      Certificate of Designation of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed March 7, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(g)     Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed May 10, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(h)     Certificate of Designation of 6.50% Series J Cumulative Redeemable Preferred Stock of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed March 8, 2012 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(i)       Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed May 6, 2014 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(j)      Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed September 30, 2015 (File No. 001-08923), and incorporated herein by reference thereto).

3.2          Fifth Amended and Restated By-Laws of the Company (filed with the Commission as Exhibit 3.2 to the Company’s Form 10-Q filed October 30, 2015 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(a)     Indenture, dated as of March 15, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed March 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(b)     Supplemental Indenture No. 1, dated as of March 15, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed March 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(c)      Amendment No. 1 to Supplemental Indenture No. 1, dated as of June 18, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed June 18, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

 

 

  

4.1(d)     Supplemental Indenture No. 2, dated as of April 7, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed April 7, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(e)      Amendment No. 1 to Supplemental Indenture No. 2, dated as of June 8, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed June 8, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(f)      Supplemental Indenture No. 3, dated as of September 10, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed September 13, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(g)      Supplemental Indenture No. 4, dated as of November 16, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 16, 2010 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(h)     Supplemental Indenture No. 5, dated as of March 14, 2011, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed March 14, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(i)       Supplemental Indenture No. 6, dated as of April 3, 2012, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed April 4, 2012 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(j)      Supplemental Indenture No. 7, dated as of December 6, 2012, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed December 11, 2012 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(k)     Supplemental Indenture No. 8, dated as of October 7, 2013, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed October 9, 2013 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(l)       Supplemental Indenture No. 9, dated as of November 20, 2013, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 20, 2013 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(m)    Supplemental Indenture No. 10, dated as of November 25, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 25, 2014 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(n)     Supplemental Indenture No. 11, dated as of May 26, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed May 27, 2015 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(o)     Amendment No. 1 to Supplemental Indenture No. 11, dated as of October 19, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed October 20, 2015 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(p)     Supplemental Indenture No. 12, dated as of March 1, 2016, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed March 3, 2016 (File No. 001-08923), and incorporated herein by reference thereto).

4.2          Form of Indenture for Senior Subordinated Debt Securities (filed with the Commission as Exhibit 4.9 to the Company’s Form S-3 (File No. 333-73936) filed November 21, 2001, and incorporated herein by reference thereto).

 

 

  

4.3          Form of Indenture for Junior Subordinated Debt Securities (filed with the Commission as Exhibit 4.10 to the Company’s Form S-3 (File No. 333-73936) filed November 21, 2001, and incorporated herein by reference thereto).

4.4(a)     Indenture, dated as of November 25, 2015, by and among HCN Canadian Holdings-1 LP, the Company and BNY Trust Company of Canada (filed with the Commission as Exhibit 4.5(a) to the Company’s Form 10-K  filed February 18, 2016 (File No. 001-08923), and incorporated herein by reference thereto).

4.4(b)     First Supplemental Indenture, dated as of November 25, 2015, by and among HCN Canadian Holdings-1 LP, the Company and BNY Trust Company of Canada (filed with the Commission as Exhibit 4.5(b) to the Company’s Form 10-K filed February 18, 2016 (File No. 001-08923), and incorporated herein by reference thereto).

10.1        Credit Agreement dated as of May 13, 2016 by and among the Company; the lenders listed therein; KeyBank National Association, as administrative agent, L/C issuer and a swingline lender; Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents; Deutsche Bank Securities Inc., as documentation agent; Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and Deutsche Bank Securities Inc., as U.S. joint lead arrangers; Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and RBC Capital Markets, as Canadian joint lead arrangers; and Merrill Lynch, Pierce, Fenner & Smith Incorporated and JPMorgan Chase Bank, N.A., as joint book runners (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed May 16, 2016 (File No. 001-08923), and incorporated herein by reference thereto).

10.2        Equity Purchase Agreement, dated as of February 28, 2011, by and among the Company, FC-GEN Investment, LLC and FC-GEN Operations Investment, LLC (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed February 28, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

10.3(a)   Amended and Restated Health Care REIT, Inc. 2005 Long-Term Incentive Plan (filed with the Commission as Appendix A to the Company’s Proxy Statement for the 2009 Annual Meeting of Stockholders, filed March 25, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(b)   Form of Stock Option Agreement (with Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.18 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(c)   Form of Amendment to Stock Option Agreements (with Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.6 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(d)   Form of Stock Option Agreement (with Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.8 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(e)   Form of Stock Option Agreement (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.19 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(f)    Form of Amendment to Stock Option Agreements (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.7 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(g)   Form of Stock Option Agreement (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.9 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

 

 

  

10.3(h)   Form of Stock Option Agreement (without Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.20 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(i)    Form of Stock Option Agreement (without Dividend Equivalent Rights) for the Chief Executive Officer under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(j)    Form of Stock Option Agreement (without Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.21 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(k)   Form of Stock Option Agreement (without Dividend Equivalent Rights) for Executive Officers under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(l)    Form of Restricted Stock Agreement for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.22 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(m)  Form of Restricted Stock Agreement for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.23 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(n)   Form of Restricted Stock Agreement for the Chief Executive Officer under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(o)   Form of Restricted Stock Agreement for Executive Officers under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(p)   Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.24 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(q)   Form of Amendment to Deferred Stock Unit Grant Agreements for Non-Employee Directors under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.10 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(r)    Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.11 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(s)    Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.5 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.4(a)   Amended and Restated Employment Agreement, dated January 3, 2017, between the Company and Thomas J. DeRosa.*

10.4(b)   Performance-Based Restricted Stock Unit Grant Agreement, dated effective as of July 30, 2014, between the Company and Thomas J. DeRosa (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed November 4, 2014 (File No. 001-08923), and incorporated herein by reference thereto).*

 

 

  

10.5        Second Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Scott A. Estes (filed with the Commission as Exhibit 10.4 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.6(a)   Executive Retirement Agreement, effective July 1, 2015, between the Company and Charles J. Herman, Jr. (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

10.6(b)   Consulting Agreement, effective July 1, 2015, between the Company and Charles J. Herman, Jr. (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

10.7        Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Jeffrey H. Miller (filed with the Commission as Exhibit 10.8 to the Company’s Form 10-K filed March 2, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.8        Executive Retirement Agreement, dated as of February 10, 2017, by and between Jeffery H. Miller and the Company.*

10.9        Employment Agreement, dated March 11, 2013, by and between the Company and Scott M. Brinker (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 7, 2013 (File No. 001-08923), and incorporated herein by reference thereto).*

10.10      Separation Agreement, dated as of February 6, 2017, by and between Scott M. Brinker and the Company.*

10.11      Third Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Erin C. Ibele (filed with the Commission as Exhibit 10.11 to the Company’s Form 10-K filed March 2, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.12      Transition Agreement, dated as of June 30, 2016, by and between Erin C. Ibele and the Company (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed August 2, 2016 (File No. 001-08923), and incorporated herein by reference thereto).*

10.13      Employment Agreement, dated as of October 4, 2016, by and between the Company and Mercedes T. Kerr (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed November 2, 2016 (File No. 001-08923), and incorporated herein by reference thereto).*

10.14      Amended and Restated Health Care REIT, Inc. Supplemental Executive Retirement Plan, dated December 29, 2008 (filed with the Commission as Exhibit 10.12 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.15      Form of Indemnification Agreement between the Company and each director, executive officer and officer of the Company (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed February 18, 2005 (File No. 001-08923), and incorporated herein by reference thereto).*

10.16      Summary of Director Compensation.*

10.17      Health Care REIT, Inc. 2013-2015 Long-Term Incentive Program, as Amended and Restated (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 8, 2014 (File No. 001-08923), and incorporated herein by reference thereto).*

10.18(a) Health Care REIT, Inc. 2015-2017 Long-Term Incentive Program (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

 

 

  

10.18(b) Form of Performance Restricted Stock Unit Award Agreement under the 2015-2017 Long-Term Incentive Program (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

10.19      Welltower Inc. 2016 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed May 10, 2016 (File No. 001-08923), and incorporated herein by reference thereto).*

10.20      Welltower Inc. 2016-2018 Long-Term Incentive Program (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed August 2, 2016 (File No. 001-08923), and incorporated herein by reference thereto).*

12           Statement Regarding Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Unaudited).

21           Subsidiaries of the Company.

23           Consent of Ernst & Young LLP, independent registered public accounting firm.

24           Powers of Attorney.

31.1        Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2        Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1        Certification pursuant to 18 U.S.C. Section 1350 by Chief Executive Officer.

32.2        Certification pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer.

101.INS     XBRL Instance Document**

101.SCH   XBRL Taxonomy Extension Schema Document**

101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document**

101.LAB   XBRL Taxonomy Extension Label Linkbase Document**

101.PRE    XBRL Taxonomy Extension Presentation Linkbase Document**

101.DEF    XBRL Taxonomy Extension Definition Linkbase Document**

                           

 

*

  

Management Contract or Compensatory Plan or Arrangement.

**

 

Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets at December 31, 2016 and 2015, (ii) the Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014, (iii) the Consolidated Statements of Equity for the years ended December 31, 2016, 2015 and 2014, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014, (v) the Notes to Consolidated Financial Statements, (vi) Schedule III – Real Estate and Accumulated Depreciation and (vii) Schedule IV – Mortgage Loans on Real Estate.