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Real Estate Investments (Tables)
 6 Months Ended
Jun. 30, 2018
Real Estate Investments  
Summary of investments in owned properties

Owned Properties. The following table summarizes our investments in owned properties at June 30, 2018 (dollar amounts in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

Percentage

 

Number

 

Number of

 

Investment

 

 

 

Gross

 

of

 

of

 

SNF

 

ALF

 

per

 

Type of Property

 

Investment

 

Investment

 

Properties (1)

 

Beds

 

Units

 

Bed/Unit

 

Assisted Living

 

$

787,373

 

56.2

% 

102

 

 —

 

5,796

 

$

135.85

 

Skilled Nursing

 

 

578,030

 

41.2

%  

75

 

9,204

 

261

 

$

61.07

 

Under Development (2)

 

 

25,077

 

1.8

% 

 —

 

 —

 

 —

 

 

 —

 

Other (3)

 

 

10,823

 

0.8

% 

 1

 

118

 

 —

 

 

 —

 

Total

 

$

1,401,303

 

100.0

% 

178

 

9,322

 

6,057

 

 

 

 

(1)

We own properties in 28 states that are leased to 30 different operators.

 

(2)

Represents three development projects, consisting of a 143-bed SNF in Kentucky, a 78-unit ALF/MC located in Oregon and a 110-unit ILF/ALF/MC in Wisconsin.

 

(3)

Includes three parcels of land held-for-use, and one behavioral health care hospital.

 

Summary of investments acquired

Acquisitions and Developments: The following table summarizes our acquisitions for the six months ended June 30, 2018 and 2017 (dollar amounts in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

Number

 

Number

 

 

 

 

Purchase

 

Transaction

 

Acquisition

 

of

 

of

Year

 

Type of Property

 

Price

 

Costs (1)

 

Costs

 

Properties

 

Beds/Units

2018

 

Assisted Living (2)

 

$

25,200

 

$

66

 

$

25,266

 

 2

 

88

 

 

Land (3)

 

 

600

 

 

36

 

 

636

 

 —

 

 —

 

 

Total

 

$

25,800

 

$

102

 

$

25,902

 

 2

 

88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

Assisted Living (4)

 

$

54,463

 

$

277

 

$

54,740

 

 3

 

240

Total

 

 

 

$

54,463

 

$
277

 

$

54,740

 

 3

 

240

(1)

Represents cost associated with our acquisitions; however, upon adoption of ASU 2017-01, our acquisitions meet the definition of an asset acquisition resulting in capitalization of transaction costs to the properties’ basis. For our land purchases with forward development commitments, transaction costs are capitalized as part of construction in progress. Additionally, transaction costs may include costs related to the prior year due to timing and terminated transactions.

 

(2)

We acquired two memory care communities in Texas.

 

(3)

We entered into a partnership to own the real estate and develop a 78-unit assisted living and memory care community in Medford, OR for $18,108 and committed to purchase an existing operational 89-unit independent living community in Oregon. We anticipate acquiring the independent living community in the third quarter of 2018.

 

(4)

We acquired a 107-unit ALF and a 73-unit MC for an aggregate purchase price of $38,813. Additionally, we acquired a 60-unit MC for $15,650.

 

Schedule of investment in development and improvement projects

During the six months ended June 30, 2018 and 2017, we invested the following in development and improvement projects (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2018

 

Six months ended June 30, 2017

 

 

Developments

 

Improvements

 

 

Developments

 

 

Improvements

Assisted Living Communities

 

$

14,653

 

$

1,048

 

 

$

7,198

 

$

839

Skilled Nursing Centers

 

 

3,970

 

 

500

 

 

 

1,957

 

 

1,356

Other

 

 

 —

 

 

215

 

 

 

 —

 

 

 —

Total

 

$

18,623

 

$

1,763

 

 

$

9,155

 

$

2,195

 

Schedule of completed projects

Completed Developments. The following table summarizes our completed developments during the six months ended June 30, 2018 (dollar amounts in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number

 

Type

 

Number

 

 

 

 

 

 

 

of

 

of

 

of

 

 

 

 

Total

Type of Project

 

Properties

 

Property

 

Beds/Units

 

State

 

Investment

Development

 

1

 

MC

 

66

 

Illinois

 

$

13,974

 

Summary of properties held-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number

 

Type

 

Number

 

 

 

 

 

 

 

of

 

of

 

of

 

 

 

 

Total

Type of Project

 

Properties

 

Property

 

Beds/Units

 

State

 

Investment

Development

 

1

 

MC

 

66

 

Illinois

 

$

13,974

Properties held-for-sale. The following table summarizes our properties held-for-sale as of June 30, 2018 and December 31, 2017 (dollar amounts in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Type

 

Number

 

 

 

 

 

 

 

Number

 

 

of

 

of

 

 

Gross

 

 

Accumulated

 

of

State

 

Property

 

Properties

 

 

Investment

 

 

Depreciation

 

Beds/units

Texas

 

ILF

 

 1

 

$

5,746

 

$

1,916

 

140

 

Schedule of real estate investment property sold

Properties sold. The following table summarizes property sales during the six months ended June 30, 2018 and 2017(dollar amounts in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Type

 

Number

 

Number

 

 

 

 

 

 

 

 

 

 

 

 

 

of

 

of

 

of

 

 

Sales

 

 

Carrying

 

 

Net

Year

 

State

 

Properties

 

Properties

 

Beds

 

 

Price

 

 

Value

 

 

Gain

2018

 

Ohio and Pennsylvania

 

ALF

 
6

 
320

 

$

67,500

 

$

16,352

 

$

48,345

2017

 

Indiana and Iowa

 

ALF

 
4

 
175

 

$

14,250

 

$

8,726

 

$

5,054

 

Schedule of mortgage loans secured by first mortgage

The following table summarizes our investments in mortgage loans secured by first mortgages at June 30, 2018 (dollar amounts in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Type

 

Percentage

 

Number of

 

Investment

 

 

 

 

Gross

 

of

 

of

 

 

 

 

 

SNF

 

per

Interest Rate (1)

 

Maturity

 

Investment

 

Property

 

Investment

 

Loans (2)

 

Properties (3)

 

Beds

 

Bed/Unit

9.5%

 

2043

 

$

186,496

 

SNF

 

79.0

%

 1

 

15

 

2,043

 

$

91.29

9.2%

 

2045

 

 

25,326

 

SNF

 

10.7

%

 1

 

 3

 

375

 

$

67.54

9.4%

 

2045

 

 

14,300

 

SNF

 

6.0

%

 1

 

 1

 

157

 

$

91.08

9.5%

 

2020

 

 

10,056

 

SNF

 

4.3

%

 1

 

 2

 

205

 

$

49.05

Total

 

 

 

$

236,178

 

 

 

100.0

%

 4

 

21

 

2,780

 

$

84.96

(1)

The majority of the mortgage loans provide for annual increases in the interest rate based upon a specified increase of 2.25%.

 

(2)

Some loans contain certain guarantees, provide for certain facility fees and the majority of the mortgage loans have a 30-year term.

 

(3)

We have investments in properties located in one state that includes mortgages to one operator.
Schedule of mortgage loan activity

The following table summarizes our mortgage loan activity for the six months ended June 30, 2018 and 2017 (in thousands):

 

 

 

 

 

 

 

 

 

Six months ended June 30, 

 

 

2018

 

2017

Originations and funding under mortgage loans receivable

 

$

11,654

(1)

$

7,829

Pay-offs received

 

 

(1,086)

 

 

(16,665)

Scheduled principal payments received

 

 

(550)

 

 

(674)

Net increase (decrease) in mortgage loans receivable

 

$

10,018

 

$

(9,510)

During 2018, we funded an additional $7,400 under an existing mortgage loan for the purchase of a 112-bed skilled nursing center in Michigan. The incremental funding bears interest at 8.7%, fixed for five years, and escalating by 2.25% thereafter.