Real Estate Investments (Tables)

12 Months Ended

Dec. 31, 2012

Summary of investments in owned properties

The following table summarizes our investment in owned properties at December 31, 2012(dollar amounts in thousands):

								Number of

								Number of				Average Investment per Bed/Unit
Type of Property	Gross Investments		Percentage of Investments			Number of Properties⁽¹⁾		SNF Beds		ALF Units		Average Investment per Bed/Unit
Skilled Nursing	$	438,388		48.7	%		71		8,211		—	$	53.39
Assisted Living		379,869		42.2	%		96		—		4,502		84.38
Range of Care		52,870		5.9	%		10		814		318		46.70
Under Development		16,642		1.8	%		—		—		—		—
School		12,326		1.4	%		2		—		—		—

Totals	$	900,095		100.0	%		179		9,025		4,820

⁽¹⁾: We have investments in 26 states leased to 35 different operators.

Summary of acquisitions

The following table summarizes our acquisitions during 2012 (dollar amounts in thousands):

Type of Property	Purchase Price		Transaction Costs		Total Acquisition Costs

Skilled Nursing⁽¹⁾	$	79,100	$	275	$	79,375	4	522
Assisted Living⁽²⁾		81,987		285		82,272	5	266
Land⁽³⁾		5,663		207		5,870	—	—

Totals	$	166,750	$	767	$	167,517	9	788

⁽¹⁾: Includes two skilled nursing properties with a total of 234 beds located in Texas and two skilled nursing properties with a total of 288 beds located in Ohio. The weighted average GAAP rent is 10.3%.
⁽²⁾: Includes two properties with a total of 100 units located in Colorado and three properties with a total of 166 units located in New Jersey. The weighted average GAAP rent is 8.1%.
⁽³⁾: We purchased four vacant parcels of land in the following states: Colorado, Kansas, Kentucky and Texas. Simultaneous with the purchase, we entered into lease agreements and development commitments in an amount not to exceed $49,702 to fund the construction of a memory care property with 60 units and two assisted living properties with a total of 158 units and one skilled nursing property with 143 beds. Rents due under the lease will begin upon the earlier of project completion or the improvement deadline specified in the lease. The weighted average initial rent rate is 9.2%.

The following table summarizes our acquisitions during 2011 (dollar amounts in thousands):

Type of Property	Purchase Price		Transaction Costs		Total Acquisition Costs

Skilled Nursing⁽¹⁾⁽²⁾	$	93,841	$	330	$	94,171	7	1,016
Range of Care⁽³⁾		11,450		34		11,484	2	211
Land⁽⁴⁾		844		11		855	—	—

Totals	$	106,135	$	375	$	106,510	9	1,227

⁽¹⁾: Includes two skilled nursing properties with a total of 336 beds located in Texas for $25,500 and a 156-bed skilled nursing property located in California for $17,500.
⁽²⁾: We purchased four skilled nursing properties with 524-beds in Texas for $50,841 which consists of $41,000 in cash at closing with the remainder in the form of contingent earn-out payments. The contingent earn-out payment arrangements require us to pay two earn-out payments totaling up to $11,000 upon the properties achieving a sustainable stipulated rent coverage ratio. During 2011, we paid $4,000 related to the first contingent earn-out payment. See Note 11. Commitments and Contingencies for further discussion on the contingent earn-out.
⁽³⁾: We purchased two senior housing properties located in South Carolina with 118 skilled nursing beds, 40 assisted living units and 53 independent living units for $11,450.
⁽⁴⁾: We acquired a vacant parcel of land in Texas for the purpose of building a replacement skilled nursing property for a purchase price of $844.

The following table summarizes our acquisitions during 2010 (dollar amounts in thousands):

Type of Property	Purchase Price			Transaction Costs			Total Acquisition Costs

Skilled Nursing	$	54,011	⁽¹⁾	$	140	⁽²⁾	$	54,151	5	668
Assisted Living		26,900			210			27,110	4	241
Range of Care		13,339			—	⁽³⁾		13,339	1	230

Totals	$	94,250		$	350		$	94,600	10	1,139

⁽¹⁾: Includes three skilled nursing properties with a total of 458 beds located in Texas, a 120-bed skilled nursing property located in Florida, and a 90-bed skilled nursing property located in Virginia.
⁽²⁾: Includes a $125 lease inducement payment which is amortized as a yield adjustment over the life of the lease.
⁽³⁾: We purchased this range of care property along with a 90-bed skilled nursing property for $22,000 and incurred $7 in transaction costs. The transaction costs for this acquisition are included in the skilled nursing property transaction costs above.

Schedule of pro forma consolidated results of operations

The following unaudited pro forma consolidated results of operations for the years ended December 31, 2012 and 2011 assume that the 2012 acquisitions of the above properties were completed as of January 1, 2011 as shown below (in thousands):

	For the year ended December 31,

	2012		2011
Revenues	$	104,342	$	100,636
Net Income	$	59,100	$	58,686

Schedule of investment commitments

The following table summarizes our investment commitments and year to date funding on our development, redevelopment, renovation and expansion projects (excludes capitalized interest, dollar amounts in thousands):

Type of Property	Investment Commitment		2012 Funding⁽²⁾			Total Funded		Remaining Commitment

Skilled Nursing	$	36,094	$	8,310		$	9,204	$	26,890	6	759
Assisted Living⁽¹⁾		40,927		8,242			8,242		32,685	6	458
Range of Care		739		66			739		—	2	211

Totals	$	77,760	$	16,618	⁽³⁾	$	18,185	$	59,575	14	1,428

⁽¹⁾: Includes the development of a 60-unit memory care property for $9,817 and two assisted living and memory care combination properties for a total of $16,385, the expansion of two assisted living properties for a total $14,600 and the renovation of a 140-unit independent living property for $125.
⁽²⁾: Includes acquired land of $5,663 and excludes $134 of capital improvement funding.
⁽³⁾: In January and February of 2013, we funded $2,484 and $488, respectively, under investment commitments.

Schedule of future minimum base rents receivable

Future minimum base rents receivable under the remaining non-cancelable terms of operating leases excluding the effects of straight-line rent and extension options are as follows (in thousands):

	Annual Cash Rent

2013	$	95,425
2014		96,222
2015		83,163
2016		82,861
2017		82,529
Thereafter		422,329

Schedule of components of the net loss from discontinued operations

Set forth in the table below are the components of the loss from discontinued operations (in thousands):

	For the year ended December 31,

	2012		2011			2010
Rental income	$	—	$	—		$	404
Interest and other income		—		—			—

Total revenues		—		—			404
Depreciation and amortization		—		(99	)		(256	)
Provisions for doubtful accounts		—		—			—
General and administrative expenses		—		—			—

Total expenses		—		—			—

(Loss) income from discontinued operations		—	$	(99	)	$	148

Summary of investments in mortgage loans secured by first mortgages

The following table summarizes our investments in mortgage loans secured by first mortgages at December 31, 2012(dollar amounts in thousands):

										Number of

Type of Property	Gross Investments		Percentage of Investments			Number of Loans		Number of Properties⁽¹⁾		SNF Beds		ALF Units		Investment per Bed/Unit
Skilled Nursing	$	24,931		62.2	%		16		17		1,861		—	$	13.40
Assisted Living		12,288		30.7	%		3		8		—		211	$	58.24
Range of Care		2,862		7.1	%		1		1		99		74	$	16.54

Totals	$	40,081		100.0	%		20		26		1,960		285

⁽¹⁾: We have investments in 9 states that include mortgages to 12 different operators.

Scheduled of principal payments on mortgage loans

Scheduled principal payments on mortgage loans are as follows (in thousands):

	Scheduled Principal

2013	$	1,933
2014		14,244
2015		4,272
2016		2,195
2017		6,118
Thereafter		11,319

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

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- Definition

Tabular disclosure of disposal groups, which may include the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the classification and carrying value of the assets and liabilities comprising the disposal group, and the segment in which the disposal group was reported. Also may include the amount of adjustments to amounts previously reported in discontinued operations such as resolution of contingencies arising from the disposal transaction or the operations of the component prior to disposal.

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