Subsequent Events

6 Months Ended

Jun. 30, 2012

Subsequent Events

Subsequent Events

12.Subsequent Events

Subsequent to June 30, 2012 the following events occurred.

We purchased a 90-bed skilled nursing property located in Texas for an aggregate purchase price of $6,500,000.  Simultaneous with the purchase, we added the property to an existing master lease with an unrelated third-party operator at an incremental GAAP yield of 10.7%. Additionally, we purchased two 144-bed skilled nursing properties located in Ohio for an aggregate purchase price of $54,000,000.  Simultaneous with the purchase, we leased the properties to an unrelated third-party operator at a GAAP yield of 10.1%. The initial term of the lease is 15 years with two 5-year renewal options and annual rent escalations of the lesser of i) 2.25% for the first seven years and 2.50% for the remainder of the term or ii) a calculation based on the consumer price index.

We received $493,000 plus accrued interest related to the early payoff of a mortgage loan secured by a skilled nursing property with 118 beds located in Texas.

We entered into a new 10-year lease of an existing skilled nursing property in California whose lease term had expired.  The operator remained the same. The lease contains provisions for a 2.5% annual escalation of minimum rent and a capital improvement allowance in the amount of $1,700,000.  The capital allowance commitment expires in July 2014 and includes interest compounded at 9% on each disbursement made from the disbursement date until either the final distribution of the commitment or the commitment expiration date. Upon final distribution or expiration of the capital improvement commitment, minimum rent increases by the total commitment funded multiplied by 9%.

We funded the following capital improvement commitments and investments (dollar amounts in thousands):

Commitment	Expiration Date	Funded in July 2012	Used Commitment	Open Commitment	Estimated Yield		Property Type	Properties	Major Operator
$1,700	3/31/13	$  87	$325	$1,375	9.00%	(1)	SNF	2	N/A
7,935	12/1/13	145	295	7,640	9.25%	(1)	UDP(2)	—	N/A
$9,635		$232	$620	$9,015

(1)Minimum rent will increase upon final funding and project completion or in some cases, the improvement deadline as defined in each lease agreement.

(2)This commitment is to construct a 60-unit free-standing memory care property on a vacant parcel of land in Colorado.

We funded the following loan commitments and investments (dollar amounts in thousands):

Commitment	Expiration Date	Funded in July 2012	Used Commitment	Open Commitment	Yield	Property Type	Properties	Major Operator
$2,500 (1)	12/31/12	$232	$2,431	$69	8.50%	Other	2	N/A

(1)This commitment is a construction and term loan for capital improvements at two senior housing properties we own and lease to the borrower. Upon the earlier of the full funding of the commitment or December 31, 2012, construction distribution under this loan will cease and this loan will fully amortize to maturity in November 2017.

We sold 12-year senior unsecured notes in the aggregate amount of $85,800,000 to a group of institutional investors in a private placement transaction. The notes bear interest at 5.03%, mature on July 19, 2024 and have scheduled annual principal pay downs of $17,160,000 in years 8 through 12. We used a portion of the proceeds to pay down our Unsecured Credit Agreement and used the remaining proceeds to fund acquisitions.

We repaid $62,000,000 and borrowed $29,500,000 under our Unsecured Credit Agreement.  Accordingly, we had $35,500,000 outstanding under our Unsecured Credit Agreement with $204,500,000 available for borrowing.

We declared a monthly cash dividend of $0.145 per share on our common stock for the month of July 2012, payable on July 31, 2012, to stockholders of record on July 23, 2012. We increased the monthly dividend on our common stock to $0.155 per share which is a 6.9% increase from the previous monthly $0.145 per share dividend. We declared a $0.155 per share monthly dividend for the months of August and September 2012, payable on August 31 and September 28, 2012, to stockholders of record on August 23 and September 20, 2012.

Our Board of Directors terminated our share repurchase program enabling us to repurchase up to 5,000,000 shares of our equity securities, including common and preferred stock in the open market.

Our remaining limited partner exercised his conversion rights to exchange 3,294 partnership units in the limited partnership. At our discretion, we converted his partnership units into an equal number of our common shares.  The partnership conversion price is $17.00 per partnership unit.  We accounted for this exchange as an equity transaction because there was no change in control requiring consolidation or deconsolidation and remeasurement. After this conversion, we have reserved 20,000 shares of our common stock under this partnership agreement.