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Real Property Acquisitions and Development
 12 Months Ended
Dec. 31, 2019
Real Estate Liabilities Associated with Assets Held for Development and Sale [Abstract]  
Real Property Acquisitions and Development Real Property Acquisitions and Development 
The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets and liabilities at cost on a relative fair value basis. Liabilities assumed and any associated noncontrolling interests are reflected at fair value. 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 acquisitions, including due diligence costs, fees for legal and valuation services, termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs. Transaction costs related to asset acquisitions are capitalized as a component of the purchase price and all other non-capitalizable costs are reflected in other expenses on our Consolidated Statement of Comprehensive Income.
The following tables summarize our real property investment activity by segment for the years ended December 31, 2019, 2018 and 2017 (in thousands):
 
 
Year Ended December 31, 2019
 
 
Seniors Housing Operating
 
Triple-net
 
Outpatient Medical
 
Total
Land and land improvements  
 
$
154,470

 
$
24,097

 
$
293,933

 
$
472,500

Buildings and improvements  
 
1,518,748

 
203,282

 
1,954,928

 
3,676,958

Acquired lease intangibles  
 
76,009

 
—

 
183,921

 
259,930

Real property held for sale
 
17,435

 
—

 
—

 
17,435

Construction in progress
 
36,174

 
—

 
—

 
36,174

Right of use assets, net
 
—

 
—

 
58,377

 
58,377

Receivables and other assets
 
15,634

 
—

 
1,586

 
17,220

Total assets acquired(1)
 
1,818,470

 
227,379

 
2,492,745

 
4,538,594

Secured debt  
 
(194,408
)
 
—

 
(206,754
)
 
(401,162
)
Lease liabilities
 
—

 
—

 
(47,740
)
 
(47,740
)
Accrued expenses and other liabilities
 
(12,024
)
 
—

 
(32,893
)
 
(44,917
)
Total liabilities assumed
 
(206,432
)
 
—

 
(287,387
)
 
(493,819
)
Noncontrolling interests(2)
 
(67,987
)
 
(4,015
)
 
(1,201
)
 
(73,203
)
Non-cash acquisition related activity(3)
(11,889
)
 
—

 
—

 
(11,889
)
 Cash disbursed for acquisitions
 
1,532,162

 
223,364

 
2,204,157

 
3,959,683

Construction in progress additions
 
227,018

 
61,414

 
60,884

 
349,316

Capitalized interest
 
(8,889
)
 
(2,385
)
 
(3,998
)
 
(15,272
)
Foreign currency translation
 
(8,643
)
 
(878
)
 
—

 
(9,521
)
Accruals(4)
 
—

 
—

 
(1,035
)
 
(1,035
)
Cash disbursed for construction in progress
 
209,486

 
58,151

 
55,851

 
323,488

Capital improvements to existing properties
 
260,413

 
17,426

 
50,985

 
328,824

Total cash invested in real property, net of cash acquired  
 
$
2,002,061

 
$
298,941

 
$
2,310,993

 
$
4,611,995

(1) Excludes $2,090,000 of unrestricted and restricted cash acquired.
(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) Relates to the acquisition of assets previously recognized as investments in unconsolidated entities.
(4) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current period.
 
 
Year Ended December 31, 2018
 
 
Seniors Housing Operating
 
Triple-net
 
Outpatient Medical
 
Total
Land and land improvements  
 
$
51,440

 
$
413,588

 
$
77,239

 
$
542,267

Buildings and improvements  
 
621,731

 
2,242,884

 
478,740

 
3,343,355

Acquired lease intangibles  
 
69,504

 
9,690

 
50,813

 
130,007

Real property held for sale
 
—

 
396,265

 
22,032

 
418,297

Receivables and other assets  
 
1,492

 
1,354

 
1,185

 
4,031

Total assets acquired(1)
 
744,167


3,063,781


630,009

 
4,437,957

Secured debt  
 
(134,752
)
 
—

 
(169,156
)
 
(303,908
)
Accrued expenses and other liabilities
 
(18,463
)
 
(13,199
)
 
(14,896
)
 
(46,558
)
Total liabilities assumed
 
(153,215
)

(13,199
)

(184,052
)
 
(350,466
)
Noncontrolling interests(2)
 
(14,390
)
 
(512,741
)
 
—

 
(527,131
)
Cash disbursed for acquisitions
 
576,562


2,537,841


445,957

 
3,560,360

Construction in progress additions
 
82,621

 
55,558

 
26,565

 
164,744

Capitalized interest
 
(3,190
)
 
(2,238
)
 
(2,477
)
 
(7,905
)
Foreign currency translation
 
3,934

 
272

 
—

 
4,206

Accruals(3)
 
—

 
—

 
(339
)
 
(339
)
Cash disbursed for construction in progress
 
83,365


53,592


23,749

 
160,706

Capital improvements to existing properties
 
201,001

 
10,046

 
55,136

 
266,183

Total cash invested in real property, net of cash acquired  
 
$
860,928


$
2,601,479


$
524,842

 
$
3,987,249

(1) Excludes $395,397,000 of unrestricted and restricted cash acquired.
(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current period.
 
 
Year Ended December 31, 2017
 
 
Seniors Housing Operating
 
Triple-net
 
Outpatient Medical
 
Total
Land and land improvements  
 
$
42,525

 
$
33,416

 
$
40,565

 
$
116,506

Buildings and improvements  
 
428,777

 
248,459

 
159,643

 
836,879

Acquired lease intangibles  
 
63,912

 
—

 
24,014

 
87,926

Receivables and other assets  
 
3,959

 
—

 
10

 
3,969

Total assets acquired(1)
 
539,173

 
281,875

 
224,232

 
1,045,280

Secured debt  
 
—

 
—

 
(25,708
)
 
(25,708
)
Accrued expenses and other liabilities
 
(46,301
)
 
(21,236
)
 
(3,181
)
 
(70,718
)
Total liabilities assumed
 
(46,301
)
 
(21,236
)
 
(28,889
)
 
(96,426
)
Noncontrolling interests(2)
 
(4,701
)
 
(7,275
)
 
(9,080
)
 
(21,056
)
Non-cash acquisition related activity(3)
 
(67,633
)
 
(54,901
)
 
—

 
(122,534
)
Cash disbursed for acquisitions
 
420,538

 
198,463

 
186,263

 
805,264

Construction in progress additions
 
84,874

 
120,797

 
37,094

 
242,765

Capitalized interest
 
(9,106
)
 
(4,713
)
 
(2,406
)
 
(16,225
)
Foreign currency translation
 
(6,830
)
 
(610
)
 
—

 
(7,440
)
Accruals(4)
 
—

 
—

 
13,615

 
13,615

Cash disbursed for construction in progress
 
68,938

 
115,474

 
48,303

 
232,715

Capital improvements to existing properties
 
185,473

 
19,989

 
44,814

 
250,276

Total cash invested in real property, net of cash acquired  
 
$
674,949

 
$
333,926

 
$
279,380

 
$
1,288,255

(1) Excludes $6,591,000 of unrestricted and restricted cash acquired.
(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) For the Seniors Housing Operating segment, includes $59,665,000 related to the acquisition of assets previously financed as investments in unconsolidated entities and $7,968,000 related to the acquisition of assets previously financed as loans receivable. For the Triple-net segment, amount is related to the acquisition of assets previously financed as loans receivable.
(4) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current period.
Acquisition of Quality Care Properties
On July 26, 2018, we completed the acquisition of Quality Care Properties Inc. ("QCP"), with QCP shareholders receiving $20.75 of cash for each share of QCP common stock and all existing QCP debt was repaid upon closing. Prior to the acquisition, ProMedica Health System ("ProMedica") completed the acquisition of HCR ManorCare. Immediately following the acquisition of QCP, we formed an 80/20 joint venture with ProMedica to own the real estate associated with the 218 seniors housing properties leased to ProMedica under a lease agreement with the following key terms: (i) 15-year absolute triple-net master lease with three five-year renewal options; (ii) initial annual cash rent of $179 million with a year one escalator of 1.375% and 2.75% annual escalators thereafter; and (iii) full corporate guarantee of ProMedica. Additionally, we acquired 59 seniors housing properties classified as held for sale and leased to ProMedica under a non-yielding lease, 12 seniors housing properties and one surgery center classified as held for sale and leased to operators under existing triple-net leases, 14 seniors housing properties leased to operators under existing triple-net leases and one multi-tenant medical office building leased to various tenants. The aggregate consideration to acquire the QCP shares and repay outstanding QCP debt was approximately $3.5 billion.
We concluded that the QCP acquisition met the definition of an asset acquisition under ASU 2017-01, "Clarifying the Definition of a Business". The following table presents the purchase price calculation and the allocation to assets acquired and liabilities assumed based upon their relative fair value:
(In thousands)
 
 
Land and land improvements
 
$
417,983

Buildings and improvements
 
2,253,451

Acquired lease intangibles
 
12,820

Real property held for sale
 
418,297

Cash and cash equivalents
 
381,913

Restricted cash
 
4,981

Receivables and other assets
 
1,354

Total assets acquired
 
3,490,799

Accrued expenses and other liabilities  
 
(13,199
)
Total liabilities assumed
 
(13,199
)
Noncontrolling interests
 
(512,741
)
Net assets acquired
 
$
2,964,859


Construction Activity 
The following is a summary of the construction projects that were placed into service and began generating revenues during the periods presented (in thousands):
 
 
Year Ended
 
 
December 31, 2019
 
December 31, 2018
 
December 31, 2017
Development projects:
 
 
 
 
 
 
Seniors Housing Operating
 
$
28,117

 
$
86,931

 
$
3,634

Triple-net
 
—

 
90,055

 
283,472

Outpatient Medical
 
21,006

 
11,358

 
63,036

Total development projects
 
49,123

 
188,344

 
350,142

Expansion projects
 
—

 
20,029

 
10,336

Total construction in progress conversions
 
$
49,123

 
$
208,373

 
$
360,478