Real Estate Investments (Tables)

9 Months Ended

Sep. 30, 2012

Real Estate Investments

Summary of investments in mortgage loans secured by first mortgages

							Average
		Percentage		Number	Number of		Investment
	Gross	of	Number	of	SNF	ALF	per
Type of Property	Investments	Investments	of Loans	Properties (1)	Beds	Units	Bed/Unit
Skilled Nursing	$23,780	48.4%	18	18	1,994	—	$11.93
Assisted Living	22,438	45.7%	9	14	—	424	52.92
Other Senior Housing (2)	2,923	5.9%	1	1	99	74	16.90
Totals	$49,141	100.0%	28	33	2,093	498

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

(2)Other senior housing consists of independent living properties and properties providing any combination of skilled nursing, assisted living and/or independent living services.

Summary of investments in owned properties

				Number of			Average
			Number				Investment
	Gross	Percentage of	of	SNF	ALF	ILF	per
Type of Property	Investments	Investments	Properties (1)	Beds	Units	Units	Bed/Unit
Skilled Nursing	$438,135	54.4%	71	8,403	—	—		$52.14
Assisted Living	285,981	35.5%	88	—	3,941	—		72.57
Other Senior Housing (2)	64,704	8.0%	13	814	256	423		43.34
School	12,268	1.5%	2	—	—	—		N/A
Under Development (3)	4,671	0.6%	—	—	—	—		N/A
Totals	$805,759	100.0%	174	9,217	4,197	423

(1)We have investments in 25 states leased to 32 different operators.

(2)Other senior housing consists of independent living properties and properties providing any combination of skilled nursing, assisted living and/or independent living services.

(3)We have two properties under development: 120-bed skilled nursing property in Texas which will replace an existing 90-bed skilled nursing property we own and 60-unit free-standing memory care property in Colorado.

Summary of acquisitions

			Total	Number	Number
Type of Property	Purchase Price	Transaction Costs	Acquisition Costs	of Properties	of Beds
Skilled Nursing (1)	$79,100	$246	$79,346	4	522
Land(2)	1,882	120	2,002	—	—
Totals	$80,982	$366	$81,348	4	522

(1)Includes two skilled nursing properties with a total of 234 beds located in Texas. These properties were purchased separately for a total purchase price of $25,100.  Simultaneous with these purchases, we added these properties to an existing master lease with a third party operator at an incremental GAAP yield of 10.7%. Also, includes two 144-bed skilled nursing properties located in Ohio purchased for an aggregate purchase price of $54,000.  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.

(2)We purchased a vacant parcel of land in Colorado for $1,882. Simultaneous with the purchase, we entered into a lease agreement and development commitment in an amount not to exceed $7,935 to fund the construction of a 60-unit free-standing memory care property.  Rent under the lease will begin upon the earlier of project completion or the improvement deadline of August 1, 2013.  Initial rent at the rate of 9.25% will be calculated based on the land purchase price and construction costs funded plus 9.0% compounded on each advance under the commitment from the disbursement date until the earlier of project completion or the improvement deadline.  The lease has an 11-year initial term, four 5-year renewal options and annual escalations of 2.5%.

			Total	Number	Number of
Type of Property	Purchase Price	Transaction Costs	Acquisition Costs	of Properties	SNF Beds	ALF Units	ILF Units
Skilled Nursing (1)	$60,841	$188	$61,029	5	664	—	—
Other Senior Housing (2)	11,450	34	11,484	2	118	40	53
Totals	$72,291	$222	$72,513	7	782	40	53

(1)We purchased four skilled nursing properties with 524-beds in Texas for $50,841 which consisted 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 totalling up to $11,000 upon the properties achieving a sustainable stipulated rent coverage ratio. During the quarter ended September 30, 2011, we paid $4,000 related to the first contingent earn-out payment. We estimated the fair value of the contingent earn-out payments using a discounted cash flow analysis.

(2)Other senior housing properties consist of independent living properties and properties providing any combination of skilled nursing, assisted living and/or independent living services.