10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

¨ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly period ended June 30, 2012

OR

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from            to            

Commission File Number: 000-54474

Care Investment Trust Inc.

(Exact name of Registrant as Specified in Its Charter)

Maryland	38-3754322
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)
780 Third Avenue, 21st Floor, New York, New York	10017
(Address of Registrant’s Principal Executive Offices)	(Zip Code)

(212) 446-1410

(Registrant’s Telephone Number, Including Area Code)

Not applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨    No  x

(Explanatory Note: The registrant is a voluntary filer and is not subject to the filing requirements of the Securities Exchange Act of 1934. Although not subject to these filing requirements, Care Investment Trust Inc. has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months.)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 9, 2012, there were 10,217,695 shares, par value $0.001, of the registrant’s common stock outstanding.

Care Investment Trust Inc.

INDEX

Part I Financial Information
Item 1. Financial Statements	1
Condensed Consolidated Balance Sheets	1
Condensed Consolidated Statements of Operations	2
Condensed Consolidated Statements of Stockholders’ Equity	3
Condensed Consolidated Statements of Cash Flows	4
Notes to Consolidated Financial Statements	5
Item  2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk	33
Item 4. Controls and Procedures	33
Part II Other Information
Item 1. Legal Proceedings	34
Item 1A. Risk Factors Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34 34
Item 3. Defaults Upon Senior Securities	34
Item 4. Mine Safety Disclosures	34
Item 5. Other Information	34
Item 6. Exhibits	35
Signatures	37
EX-31.1
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

Part I — Financial Information

ITEM 1. Financial Statements.

Care Investment Trust Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(dollars in thousands — except share and per share data)

	June 30, 2012		December 31, 2011
	(Unaudited)
Assets:
Real estate:
Land	$	10,620	$	10,620
Buildings and improvements		116,222		116,222
Less: accumulated depreciation and amortization		(6,263)		(4,540)
Total real estate, net		120,579		122,302
Investment in loans		5,593		5,766
Investments in partially-owned entities		2,491		2,491
Identified intangible assets — leases in place, net		6,616		6,939
Cash and cash equivalents		48,040		52,306
Other assets		5,752		4,412
Total Assets	$	189,071	$	194,216
Liabilities and Stockholders’ Equity
Liabilities:
Mortgage notes payable	$	95,880	$	96,079
Accounts payable and accrued expenses		1,268		2,170
Accrued expenses payable to related party		89		1,794
Other liabilities		609		593
Total Liabilities		97,846		100,636
Commitments and Contingencies
Stockholders’ Equity
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding		—		—
Common stock: $0.001 par value, 250,000,000 shares authorized 10,215,551 and 10,171,550 shares issued and outstanding, respectively		11		11
Additional paid-in capital		83,993		83,615
Retained earnings		7,221		9,954
Total Stockholders’ Equity		91,225		93,580
Total Liabilities and Stockholders’ Equity	$	189,071	$	194,216

See Notes to Condensed Consolidated Financial Statements

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Care Investment Trust Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(dollars in thousands — except share and per share data)

	Three Months Ended June 30, 2012		Three Months Ended June 30, 2011		Six Months Ended June 30, 2012		Six Months Ended June 30, 2011
Revenue
Rental income	$	3,442	$	2,961	$	6,884	$	5,923
Reimbursable income		353		315		705		629
Income from investments in loans		182		198		364		443
Total Revenue		3,977		3,474		7,953		6,995
Expenses
Base services fees to related party		133		99		245		203
Incentive fee to related party		—		176		—		481
Marketing, general and administrative (including stock-based compensation of $36, $15, $105 and $45, respectively)		898		878		2,070		1,707
Reimbursed property expenses		358		324		710		633
Depreciation and amortization		994		868		1,976		1,736
Operating Expenses		2,383		2,345		5,001		4,760
Other (Income) Expense
Income from investments in partially-owned entities, net		(81)		(1,384)		(162)		(771)
Unrealized loss on derivative instruments		420		—		—		255
Realized gain on derivative instruments, net		(86)		—		(86)		—
Impairment of investments		—		77		—		77
Interest income		(19)		(5)		(40)		(8)
Interest expense including amortization of deferred financing costs		1,599		1,374		3,185		2,728
Net income (loss)	$	(239)	$	1,067	$	55	$	(46)
Net income (loss) allocated to common stockholders per share of common stock
Net income (loss), basic	$	(0.03)	$	0.11	$	0.00	$	(0.00)
Net income (loss), diluted	$	(0.03)	$	0.10	$	0.00	$	(0.00)
Weighted average common shares outstanding, basic		10,224,845		10,149,562		10,200,141		10,145,018
Weighted average common shares outstanding, diluted		10,224,845		10,167,272		10,214,265		10,145,018
Dividends declared per common share	$	0.270	$	0.135	$	0.270	$	0.135

See Notes to Condensed Consolidated Financial Statements

2

Care Investment Trust Inc. and Subsidiaries

Condensed Consolidated Statement of Stockholders’ Equity (Unaudited)

(dollars in thousands, except share data)

	Common Stock
	Shares		$		Additional Paid-in Capital		Retained Earnings		Total
Balance at December 31, 2011		10,171,550	$	11	$	83,615	$	9,954	$	93,580
Stock-based compensation to directors for services		4,428		*		30		—		30
Stock-based compensation to employees		—		—		75		—		75
Issuance of stock for related party incentive fee		49,573		*		345		—		345
Dividends		—		—		—		(2,788)		(2,788)
Repurchased shares		(10,000)		*		(72)		—		(72)
Net income		—		—		—		55		55
Balance at June 30, 2012		10,215,551	$	11	$	83,993	$	7,221	$	91,225

* Less than $500

See Notes to Condensed Consolidated Financial Statements

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Care Investment Trust Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

	For the Six Months  Ended June 30, 2012		For the Six Months Ended June 30, 2011
Cash Flow From Operating Activities
Net income (loss)	$	55	$	(46)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities
Increase in deferred rent receivable		(799)		(1,189)
(Income) or loss from investments in partially-owned entities		(162)		(771)
Distribution of income from partially-owned entities		162		2,763
Impairment of investments		—		77
Amortization of above-market leases		104		104
Amortization of deferred financing costs		134		—
Amortization of mortgage note premium		(74)		(74)
Stock-based compensation		105		30
Non-cash incentive fee		—		96
Depreciation and amortization on real estate and fixed assets, including intangible assets		1,976		1,736
Gain on derivative instruments		(86)		—
Unrealized loss on derivative instruments		—		255
Changes in operating assets and liabilities:
Other assets		(71)		489
Accounts payable and accrued expenses		(891)		(10)
Other liabilities including payable to related parties		(1,345)		(261)
Net cash (used in) provided by operating activities		(892)		3,199
Cash Flow From Investing Activities
Fixed asset purchases		(23)		(228)
Proceeds from derivative transactions		86		—
Proceeds from loan repayments		173		1,582
Return of investment in partially-owned entities		—		6,093
Net cash provided by investing activities		236		7,447
Cash Flow From Financing Activities
Principal payments under mortgage notes payable		(15,805)		(369)
Borrowings under mortgage notes payable		15,680		—
Financing costs		(625)		—
Repurchases of common stock		(72)		—
Dividends paid		(2,788)		(1,371)
Net cash used in financing activities		(3,610)		(1,740)
Net increase (decrease) in cash and cash equivalents		(4,266)		8,906
Cash and cash equivalents, beginning of period		52,306		5,032
Cash and cash equivalents, end of period	$	48,040	$	13,938
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	3,139	$	1,419
Cash paid for taxes	$	227	$	—
Non-cash financing and investing activities
Warrant issued	$	—	$	222
Modification of operating partnership units	$	—	$	(1,870)
Stock-based payments to related parties	$	375	$	—
Accrued expenses for financing costs	$	53	$	—

See Notes to Condensed Consolidated Financial Statements

4

Care Investment Trust Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2012

Note 1 — Organization

Care Investment Trust Inc. (together with its subsidiaries, the “Company” or “Care” unless otherwise indicated or except where the context otherwise requires, “we”, “us” or “our”) is a real estate investment trust (“REIT”) that invests in healthcare facilities including assisted-living, independent-living, memory care, skilled nursing and other healthcare-related real estate assets in the United States of America (the “U.S.”). The Company, which utilizes a hybrid management structure containing components of both internal and external management, was incorporated in Maryland in March 2007 and completed its initial public offering on June 22, 2007.

On August 13, 2010, Tiptree Financial Partners, L.P. (“Tiptree”) acquired control of the Company (the “Tiptree Transaction”). As part of the Tiptree Transaction, we entered into a hybrid management structure whereby senior management was internalized and we entered into a services agreement with TREIT Management, LLC (“TREIT”) for certain advisory and support services (the “Services Agreement”). TREIT was previously a subsidiary of Tiptree Capital Management, LLC (“Tiptree Capital”), the manager of Tiptree. On June 30, 2012, TREIT and Tiptree Capital became indirect subsidiaries of Tiptree. The Services Agreement remains in full effect following the closing of such transaction.

As of June 30, 2012, Care’s portfolio of assets consisted of senior housing facilities, including assisted living facilities, independent living facilities, and memory care facilities, both wholly-owned and owned through a joint venture, as well as a mortgage loan on skilled nursing facilities, assisted living facilities and a multifamily property. Our wholly-owned senior housing facilities are leased, under “triple-net” leases, which require the tenants to pay all property-related expenses.

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) commencing with our taxable year ended December 31, 2007. To maintain our tax status as a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders. At present, we do not have any taxable REIT subsidiaries (“TRS”), but in the normal course of business we may form such subsidiaries as necessary.

Note 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited. In our opinion, all estimates and adjustments necessary to present fairly the financial position, results of operations and cash flows have been made. The condensed consolidated balance sheet as of December 31, 2011 has been derived from the audited consolidated balance sheet as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U. S. (“GAAP”) have been omitted in accordance with Article 10 of Regulation S-X and the instructions to Form 10-Q. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the operating results for the full year ending December 31, 2012.

Consolidation

The condensed consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or controlled by us. All intercompany balances and transactions have been eliminated. Our condensed consolidated financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.

Comprehensive Income

We have no items of other comprehensive income, and accordingly net income (loss) is equal to comprehensive income (loss) for all periods presented.

Segment Reporting

ASC 280 Segment Reporting (“ASC 280”) establishes standards for the way that public entities report information about operating segments in the financial statements. We are a REIT focused on originating and acquiring healthcare-related real estate and commercial mortgage debt and currently operate in only one reportable segment.

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Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Included in cash and cash equivalents at June 30, 2012 and December 31, 2011 is approximately $48.0 million and approximately $52.3 million, respectively, deposited with one major financial institution.

Real Estate and Identified Intangible Assets

Real estate and identified intangible assets are carried at cost, net of accumulated depreciation and amortization. Betterments, major renewals and certain costs directly related to the improvement and leasing of real estate are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is provided on a straight-line basis over the assets’ estimated useful lives, which range from 9 to 40 years. Amortization is provided on a straight-line basis over the life of the in-place leases.

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, personal property and identified intangible assets such as above and below market leases, acquired in-place leases and customer relationships) and acquired liabilities in accordance with ASC 805 Business Combinations (“ASC 805”), and ASC 350 Intangibles — Goodwill and Other (“ASC 350”), and we allocate purchase price based on these assessments. We assess fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each property and the respective tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods and market conditions. In estimating carrying costs, the Company includes estimates of lost rents at estimated market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions and expected trends.

We review the carrying value of our real estate assets and intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets, (“ASC 360”). If such reviews indicate that the asset is impaired, the asset’s carrying amount is written down to its fair value. An impairment loss is measured based on the excess of the carrying amount over the fair value. We determine fair value by using a discounted cash flow model and appropriate discount and capitalization rates. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. If our anticipated holding periods change or estimated cash flows decline based on market conditions or otherwise, an impairment loss may be recognized. Long-lived assets to be disposed of are recorded at the lower of carrying value or fair value less estimated costs to sell. There were no impairments of our wholly-owned real estate investments and intangibles for the three and six month periods ended June 30, 2012 and 2011.

Investments in Loans

We account for our investment in loans in accordance with ASC Topic 948 Financial Services — Mortgage Banking (“ASC 948”). Under ASC 948, loans expected to be held for the foreseeable future or to maturity should be held at amortized cost, and all other loans should be held at lower of cost or market (“LOCOM”), measured on an individual basis. In accordance with ASC 820 Fair Value Measurements and Disclosures (“ASC 820”), the Company includes nonperformance risk in calculating fair value adjustments. As specified in ASC 820, the framework for measuring fair value is based on observable inputs of market data.

We periodically review our loans held for investment for impairment. Impairment losses are taken for impaired loans based on the fair value of collateral and a recoverability analysis on an individual loan basis. The fair value of the collateral may be determined by an evaluation of operating cash flow from the property during the projected holding period, and/or estimated sales value computed by applying an expected capitalization rate to the current net operating income of the specific property, less selling costs. Whichever method is used, other factors considered relate to geographic trends and project diversification, the size of the portfolio and current economic conditions. When it is probable that we will be unable to collect all amounts contractually due, the loan would be considered impaired.

Interest income is generally recognized using the effective interest method or on a basis approximating a level rate of return over the term of the loan. Nonaccrual loans are those on which the accrual of interest has been suspended. Loans are placed on nonaccrual status and considered nonperforming when full payment of principal and interest is in doubt, or when principal or interest is 90 days or more past due or if cash collateral, if any, is insufficient to cover principal and interest. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred loan fees is suspended. Interest income on nonaccrual loans may be recognized only to the extent it is received in cash. However, where there is doubt regarding the ultimate collectability of loan principal, cash receipts on such nonaccrual loans are applied to reduce the carrying value of such loans. Nonaccrual loans may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the restructured terms of such loan. The Company did not have any loans on non-accrual status as of June 30, 2012 or December 31, 2011.

As discussed in Note 4, as of June 30, 2012 and December 31, 2011, we have one remaining loan investment that is part of a

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larger credit facility, in which we have an approximately one-third interest. Our intent is to hold the remaining loan to maturity and as such it is carried on the June 30, 2012 and December 31, 2011 balance sheets at its amortized cost basis, net of principal payments received.

Investments in Partially-Owned Entities

We invest in common equity and preferred equity interests that allow us to participate in a percentage of the underlying property’s cash flows from operations and proceeds from a sale or refinancing. At the inception of the investment, we must determine whether such investment should be accounted for as a loan, joint venture or as real estate. Investments in partially-owned entities where we exercise significant influence over operating and financial policies of the subsidiary, but do not control the subsidiary, are reported under the equity method of accounting. Under the equity method of accounting, the Company’s share of the investee’s earnings or loss is included in the Company’s operating results. As of June 30, 2012 and December 31, 2011, we held one (1) such equity investment and account for such investment under the equity method.

We assess whether there are indicators that the value of our partially owned entities may be impaired. An investment’s value is impaired if we determine that a decline in the value of the investment below its carrying value is other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated value of the investment. For the three and six month periods ended June 30, 2012, we did not recognize any impairment on investments in partially owned entities. We recognized impairment on our investments in partially-owned entities of approximately $0.1 million for the three and six month periods ended June 30, 2011 related to our SMC investment due to lower occupancy.

Rental Revenue

We recognize rental revenue in accordance with ASC 840 Leases (“ASC 840”). ASC 840 requires that revenue be recognized on a straight-line basis over the non-cancelable term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Renewal options in leases with rental terms that are higher than those in the primary term are excluded from the calculation of straight line rent if the renewals are not reasonably assured. We commence rental revenue recognition when the tenant takes control of the leased space. The Company recognizes lease termination payments as a component of rental revenue in the period received, provided that there are no further obligations under the lease. Amortization expense of above-market leases reduces rental income on a straight-line basis over the non-cancelable term of the lease. Taxes, insurance and reserves collected from tenants are separately shown as reimbursable income and corresponding payments are included in reimbursed property expenses.

Deferred Financing Costs

Deferred financing costs represent commitment fees, legal and other third party costs associated with obtaining such financing. These costs are amortized over the terms of the respective financing agreements and the amortization of such costs is reflected in interest expense. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Stock-based Compensation Plans

We have two stock-based compensation plans. We recognize compensation cost for stock-based compensation ratably over the service period of the award for employees, board members and non-employees. Compensation cost recorded for employees (including awards to non-employee directors) is measured based on the estimated fair value of the award on the grant date, and such amount is charged to compensation expense on a straight-line basis over the vesting period. Compensation cost recorded for our non-employees is adjusted in each subsequent reporting period based on the fair value of the award at the end of the reporting period until such time as the award has vested and the service being provided, if required, is substantially completed or, under certain circumstances, likely to be completed, whichever occurs first.

Derivative Instruments

We account for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). In the normal course of business, we may use a variety of derivative instruments to manage, or hedge, interest rate risk. We will require that hedging derivative instruments be effective in reducing the interest rate risk exposure they are designated to hedge. This effectiveness is essential for qualifying for hedge accounting. Some derivative instruments may be associated with an anticipated transaction. In those cases, hedge effectiveness criteria also require that it be probable that the underlying transaction will occur. Instruments that meet these hedging criteria, to the extent we elect to utilize hedge accounting, will be formally designated as hedges at the inception of the derivative contract.

To determine the fair value of derivative instruments, we may use a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date including standard market conventions and techniques such as discounted cash flow analysis, option-pricing models, replacement cost, and termination cost. All methods of assessing fair value result in a general approximation of fair value, and such value may never actually be realized.

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Unrealized gain or loss on the change in the value of a derivative instrument for which hedge accounting is elected, to the extent that it is determined to be an effective hedge, is included in other comprehensive income. Realized gain or loss on a derivative instrument, as well as the unrealized gain or loss on a derivative instrument for which hedge accounting is not elected, or the portion of such derivative instrument which is not an effective hedge, will be included in net income (loss) from operations.

We may use a variety of commonly used derivative products that are considered “plain vanilla” derivatives. These derivatives typically include interest rate swaps, caps, collars and floors. Similarly, we may also become a party to the sale or “short” of U.S. Treasury securities in anticipation of entering into a fixed rate mortgage of approximately equal duration. We expressly prohibit the use of unconventional derivative instruments and using derivative instruments for trading or speculative purposes. Further, we have a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors; therefore, we do not anticipate nonperformance by any of our counterparties.

Income Taxes

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our REIT taxable income to stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to Federal income tax on our taxable income at regular corporate rates and we will not be permitted to qualify for treatment as a REIT for Federal income tax purposes for four (4) years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distributions to stockholders. We believe that we will continue to operate in such a manner as to qualify for treatment as a REIT for Federal income tax purposes. We may, however, be subject to certain state and local taxes.

Deferred tax assets and liabilities, if any, are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as operating loss and tax credit carryforwards. As a REIT, we generally will not be subject to Federal income tax on taxable income that we distribute to our stockholders and, therefore, the inclusion of Federal deferred tax assets and liabilities in our financial statements may not be applicable. Notwithstanding the foregoing, subject to certain limitations, net operating losses (“NOLs”) incurred by the Company can be treated as a carryforward for up to 20 years and utilized to reduced our taxable income in future years, thereby reducing the amount of taxable income which we are required to distribute to our stockholders in order to maintain our REIT status or, to the extent that we elect to distribute less than 100% of our taxable income to our stockholders, reducing our Federal tax liability on that portion of our taxable income which we elect not to distribute.

In assessing the potential realization of deferred tax assets, if any, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences reverse and/or NOL carryforwards are available. Management considers the scheduled reversal of deferred tax assets and liabilities, projected future taxable income, and tax planning strategies in making this assessment. As there is no assurance that the Company will generate taxable income in future periods, management does not believe that it is more likely than not that the Company will realize the benefits of these temporary differences and NOL carryforwards and therefore established a full valuation allowance at June 30, 2012 and December 31, 2011.

We account for uncertain tax positions in accordance with FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes — An Interpretation (“ASC 740”) of FASB Statement No. 109 (“FIN 48”). ASC 740 prescribes a recognition threshold and measurement attribute for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 requires that the financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts, but without considering time values. We evaluate uncertainties of tax positions taken or expected to be taken in our tax returns based on the probability of whether it is more likely than not those positions would be sustained upon audit by applicable tax authorities, based on technical merit for open tax years. We assessed the Company’s tax positions for open federal, state and local tax years from 2008 through 2012. The Company does not have any uncertain tax positions as of June 30, 2012 that would not be sustained on its technical merits on a more likely than not basis. Our policy is, if necessary, to account for interest and penalties related to uncertain tax positions as a component of our income tax provision.

Earnings per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur, if securities or other contracts to issue common stock were exercised or converted into common stock where such exercise or conversion would result in a lower earnings per share amount.

In accordance with ASC 260 Earnings Per Share, regarding the determination of whether instruments granted in share-based

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payments transactions are participation securities, we have applied the two-class method of computing basic EPS. This guidance clarifies that outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends or dividend equivalent payments participate in undistributed earnings with common stockholders and are considered participating securities. The Company’s excess of distributions over earnings relating to participating securities are shown as a reduction in net income (increase in net loss) available to common shareholders in the Company’s computation of EPS. The Company does not reallocate undistributed earnings to the participating securities and the common shares in the diluted earnings per share calculation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the consolidated financial statements and the accompanying notes. Significant estimates are made for the valuation of real estate and related intangibles, valuation of financial instruments, impairment assessments and fair value assessments with respect to purchase price allocations. Actual results could differ from those estimates.

Concentrations of Credit Risk

Real estate triple-net leases and financial instruments, primarily consisting of cash, mortgage loan investments and interest receivable, potentially subject us to concentrations of credit risk. We may place our cash investments in excess of insured amounts with high quality financial institutions. We perform ongoing analysis of credit risk concentrations in our real estate and loan investment portfolios by evaluating exposure to various markets, underlying property types, investment structure, term, sponsors, tenant mix and other credit metrics. Our triple-net leases rely on our underlying tenants. The collateral securing our investment in our remaining loan is real estate properties located in the U.S.

In addition, we are required to disclose fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate that value. In cases where quoted market prices are not available, fair value is based upon the application of discount rates to estimated future cash flows based on market yields or other appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). The amendments in ASU 2011-04 change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments are intended to create comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material effect on the condensed consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”), which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. This ASU does not change the items that must be reported in other comprehensive income. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011. As we have no other comprehensive income, the adoption of this standard did not have any effect on the condensed consolidated financial statements.

Note 3 — Investments in Real Estate

As of June 30, 2012 and December 31, 2011, we owned 17 senior housing facilities. In 2008, we acquired 14 independent living, assisted living and memory care facilities located in four (4) states, of which six (6) are in Iowa, five (5) in Illinois, two (2) in Nebraska and one (1) in Indiana. These 14 properties were acquired in two separate sale-leaseback transactions from affiliates of Bickford Senior Living Group, L.L.C., a privately-held owner and operator of senior housing facilities (“Bickford”). We lease those properties to Bickford Master I, LLC (the “Bickford Master Lessee”), an affiliate of Bickford pursuant to a triple-net lease, for an initial annual base rent of approximately $9.1 million and additional base rent of approximately $0.3 million, with fixed escalations of 3.0% per annum through June 2023. The master lease provides for four (4) extension options of ten (10) years each. The additional base rent was deferred and accrued until July 2011 and is being paid over a 24 month period that commenced at that time. See also Note 7 for the mortgage loans underlying the Bickford properties.

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As an enticement for the Company to enter into the leasing arrangement for the properties, we received additional collateral and guarantees of the lease obligation from parties affiliated with Bickford. The additional collateral pledged in support of Bickford’s obligation to the lease commitment included ownership interests in Bickford affiliated companies.

The Bickford real estate assets, including personal property, consist of the following at each period end (in millions):

	June 30, 2012		December 31, 2011
Land	$	5.0	$	5.0
Buildings and improvements		102.0		102.0
Less: accumulated depreciation and amortization		(5.9)		(4.4)
Total real estate, net	$	101.1	$	102.6

In September 2011, the Company acquired three (3) assisted living and memory care facilities located in Virginia from affiliates of Greenfield Senior Living, Inc., a privately-held owner and operator of senior housing facilities (“Greenfield”). The aggregate purchase price for the three (3) properties was $20.8 million, of which approximately $15.5 million was funded with the proceeds of a first mortgage bridge loan (the “Bridge Loan”) with KeyBank National Association (“KeyBank”) (see Note 7), and the balance with cash on hand. Concurrent with the acquisition, the properties were leased to three (3) wholly-owned affiliates of Greenfield, which are responsible for operating each of the properties pursuant to a triple net master lease (the “Greenfield Master Lease”). The initial term of the Greenfield Master Lease is 12 years with two (2) extension options of ten (10) years each. Rent payments during the first year are approximately $1.7 million, with rental increases of 2.75% per annum during the initial term of the lease. At the end of the initial term, Greenfield, subject to certain conditions, holds a one-time purchase option that provides the right to acquire all three (3) of the properties at the then fair market value. Greenfield has guaranteed the obligations of the tenants under the Greenfield Master Lease.

The Greenfield real estate assets, including personal property, consist of the following at each period end (in millions):

	June 30, 2012		December 31, 2011
Land	$	5.6	$	5.6
Buildings and improvements		14.2		14.2
Less: accumulated depreciation and amortization		(0.3)		(0.1)
Total real estate, net	$	19.5	$	19.7

For each of the three and six months ended June 30, 2012, revenues from the Bickford and Greenfield tenants accounted for approximately 95%, of total revenue and for each of the three and six months ended June 30 2011, revenues from the Bickford tenants accounted for approximately 94% of total revenue.

Note 4 — Investments in Loans

As of June 30, 2012 and December 31, 2011, our remaining loan investment is part of a larger credit facility, in which we have an approximately one-third interest. The loan is secured by a total of ten (10) properties consisting of skilled nursing facilities, assisted living facilities and a multifamily property all located in Louisiana. Originally scheduled to mature on February 1, 2011, the loan was extended several times during 2011 and eventually restructured in November 2011. Pursuant to the restructuring, the revised loan has a five (5) year term with a maturity date of November 1, 2016, a 25 year amortization schedule and a limited cash sweep. The interest rate on the loan was increased from London Interbank Offered Rate (“Libor”) plus 4.00% to Libor plus 6.00% in year one through year three, Libor plus 8.00% in year four and Libor plus 10.00% in year five. As part of the restructuring, a new independent operator was brought in to manage the properties. At the time of the restructuring, our portion of the loan had a notional balance of approximately $10.1 million. In conjunction with the restructuring, we received a revised note with a face amount of approximately $10.5 million. As part of the analysis at the time of the restructuring of the loan, we determined that expected future gross receipts, exclusive of interest payments, from this investment were approximately equal to our carrying value of approximately $5.8 million. Accordingly, all principal amortization payments, including prepayments received from the limited cash sweep are applied to the carrying value of our asset. No gain or loss was recognized as a result of the restructuring. One month Libor was 0.25% and 0.30% at June 30, 2012 and December 31, 2011, respectively. Pursuant to Accounting Standards Codification Topic 310 Receivables (“ASC 310”), we recognize interest income at the effective interest rate based on Libor in effect at the inception of the restructured loan and using a weighted average spread of 7.20%.

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Accordingly, cash interest will be less than effective interest during the first three (3) years of the loan and cash interest will be greater than effective interest during the last two (2) years of the loan. Our cost basis in the loan at June 30, 2012 and December 31, 2011 was approximately $5.6 million and $5.8 million, respectively.

Note 5 — Investments in Partially Owned Entities

The following table summarizes the Company’s investments in partially owned entities at June 30, 2012 and December 31, 2011 (in millions):

Investment	June 30, 2012		December 31, 2011
Senior Management Concepts Senior Living Portfolio	$	2.5	$	2.5
Total	$	2.5	$	2.5

Cambridge Medical Office Building Portfolio

On November 30, 2011, we sold our entire interest in the Cambridge Medical Office Portfolio (the “Cambridge Portfolio”) and subsequently dissolved our related partnership entities, ERC Sub, L.P. and ERC Sub, LLC. In December of 2007, we acquired an 85% equity interest in eight (8) limited partnerships that own nine (9) Class A medical office buildings owned and operated by affiliates of Cambridge Holdings, Inc. (“Cambridge”). Our total investment was approximately $72.4 million consisting of: (i) approximately $61.9 million of cash, of which approximately $2.8 million was held back to perform tenant improvements; and (ii) subject to the properties achieving certain performance hurdles, the commitment to issue to Cambridge 700,000 operating partnership units (the “OP Units”) in ERC Sub, L.P. (the limited partnership through which we held our investment in the Cambridge Portfolio) with a stated value of $10.5 million. Total rentable area of the Cambridge Portfolio was approximately 767,000 square feet. As originally structured, Cambridge retained ownership of the remaining 15% interest in each of the limited partnerships and continued to operate the underlying properties pursuant to long-term management contracts. In accordance with the terms of our management agreements, Cambridge acted as the manager and leasing agent of each medical office building.

On April 14, 2011 (effective as of April 15, 2011) we entered into an Omnibus Agreement (the “Omnibus Agreement”) with Cambridge and certain of its affiliates (the “Cambridge Parties”) regarding our investment in the Cambridge Portfolio. Pursuant to the Omnibus Agreement, we simultaneously entered into a settlement agreement with Cambridge in regard to the ongoing litigation between ourselves and Cambridge. The economic terms of our investment in the Cambridge Portfolio were amended by the Omnibus Agreement as follows:

• The number and terms of the OP Units were revised such that Cambridge retained rights to 200,000 OP Units. These OP Units were entitled to dividend equivalent payments equal to any ordinary dividend declared and paid by Care to its stockholders, but were no longer convertible into or redeemable for shares of common stock of Care and had limited voting rights in ERC Sub, L.P.;

• We issued a warrant (the “Warrant”) to Cambridge to purchase 300,000 shares of our common stock at $6.00 per share;

• Our obligation to fund up to approximately $0.9 million in additional tenant improvements in the Cambridge Portfolio was eliminated;

• Our aggregate interest in the Cambridge Portfolio was converted from a stated equity interest of 85% to a fixed dollar investment of $40 million with a preferred return of 14%;

• Retroactive to January 1, 2011, we were to receive a preferential distribution of cash flow from operations with a target distribution rate of 12% on our $40 million fixed dollar investment with any cash flow from operations in excess of the target distribution rate being retained by Cambridge;

• We had a preference with regard to any distributions from special events, such as property sales, refinancings and capital contributions, equal to the sum of our outstanding fixed dollar investment plus our accrued but unpaid preferred return;

• Cambridge received the right to purchase our interest in the Cambridge Portfolio at any time during the term of the Omnibus Agreement for an amount equal to the sum of our outstanding fixed dollar investment plus our accrued but unpaid preferred return plus a cash premium that increased annually as well as the return to Care of the OP Units, the Warrant and any Care stock acquired upon a cashless exercise of the Warrant (the “Redemption Price” as defined in the Omnibus Agreement);

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Prior to April 15, 2011, we included 85% of the net losses (after depreciation and amortization) from the Cambridge Portfolio in our statements of operations and reduced the value of our investment in the Cambridge Portfolio based on such losses and the receipt of cash distributions. On April 15, 2011, there was no effect to our results of operations for the three and six month periods ending June 30, 2011 as a result of the above transaction. Our statement of operations for the first quarter of 2011 includes the aforementioned allocated loss of approximately $1.1 million as well as a loss of approximately $0.3 million pertaining to an increase in the liability associated with the operating partnership units. During the second quarter of 2011, we recognized approximately $1.2 million representing a preferential distribution of cash flow from operations.

On October 19, 2011, we entered into an agreement with Cambridge to amend the Omnibus Agreement (the “First Amendment”). Pursuant to the First Amendment, Cambridge was granted the ability to purchase our interest in the Cambridge Portfolio at any time up to December 9, 2011 for an amount equal to the sum of our $40 million fixed dollar investment plus our accrued but unpaid preferred return (approximately $2.0 million inclusive of our preferred distribution of cash flow from operations). As consideration for the First Amendment, Cambridge agreed to forfeit all of its rights and interests in the Warrant and the OP Units upon the earlier of the closing of such purchase or December 9, 2011.

On November 30, 2011, Cambridge completed its acquisition of our preferred interest in the Cambridge Portfolio. In connection therewith, the parties to the Omnibus Agreement terminated the agreement. We received proceeds of approximately $42 million of which, approximately $40.8 million of the proceeds received were treated as proceeds from sale of investments and the balance of approximately $1.2 million as income from investments in partially-owned entities.

Summarized financial information for the three and six months ended June 30, 2011 of the Cambridge Portfolio is as follows (in millions):

	2011
Revenue (six months)	$	12.7
Expenses (six months)		15.4
Net loss before preferred distribution (six months)	$	(2.8)
Net loss after preferred distribution (six months)	$	(4.2)
Revenue (three months)	$	6.4
Expenses (three months)	$	7.9
Net loss before preferred distribution (three months)	$	(1.5)
Net loss after preferred distribution (three months)	$	(2.9)

Senior Management Concepts Senior Living Portfolio

Until May 2011, we owned a preferred and common equity investment in four (4) independent and assisted living facilities located in Utah and operated by Senior Management Concepts, LLC (“SMC”), a privately held owner and operator of senior housing facilities. The four (4) private pay facilities contain 408 units of which 243 are independent living units and 165 are assisted living units. At the time of our acquisition, four (4) affiliates of SMC each entered into 15-year leases for the respective facilities that expire in 2022. We acquired our preferred and common equity interest in the SMC portfolio in December 2007, paying approximately $6.8 million in exchange for 100% of the preferred equity interests and 10% of the common equity interests in the four (4) properties. At the time of our initial investment, we entered into an agreement with SMC that provides for payments to us of an annual cumulative preferred return of 15.0% on our investment. In addition, we are to receive a common equity return payable for up to ten (10) years equal to 10.0% of budgeted free cash flow after payment of debt service and the preferred return as such amounts were determined prior to closing, as well as 10% of the net proceeds from a sale of one or more of the properties. Subject to certain conditions being met, our preferred equity interest in the properties is subject to redemption at par. If our preferred equity interest is redeemed, we have the right to put our common equity interests to SMC within 30 days after notice at fair market value as determined by a third-party appraiser. In addition, we have an option to put our preferred equity interest to SMC at par any time beginning on January 1, 2016, along with our common equity interests at fair market value as determined by a third-party appraiser.

In May 2011, with our prior consent, three (3) of the four (4) SMC properties were sold. We received approximately $6.6 million of gross proceeds consisting of approximately $5.2 million representing a return of our preferred equity investment allocable to the three (3) sold properties, approximately $0.9 million representing our 10% common equity interest in the three (3) sold properties and approximately $0.4 million which satisfied all outstanding delinquent preferred return and default interest payments. In conjunction with the sale of the three (3) properties, we returned a security deposit of approximately $0.4 million which was held by us as payment collateral for those facilities. We received approximately $12,000 in excess of the then current cost basis of our investment.

Subsequent to the aforementioned sale and through June 30, 2012, we retain our 100% preferred equity interest and 10% common equity interest in the remaining property in Utah. The remaining facility contains 120 units of which approximately one-half are assisted living and one-half are independent living. The property is subject to a lease which expires in 2022.

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The summarized financial information as of June 30, 2012 and December 31, 2011 and for the three and six months ended June 30, 2012 and 2011, for the Company’s unconsolidated joint venture in SMC, which for the three and six months ended June 30, 2011 includes the net results of operations for the three (3) properties sold in May 2011 as discontinued operations, is as follows (in millions):

	June 30, 2012		December 31, 2011
Assets	$	11.0	$	11.1
Liabilities		14.7		14.6
Equity	$	(3.7)	$	(3.5)
	June 30, 2012		June 30, 2011
Revenue (six months)	$	1.7	$	1.8
Expenses (six months)		1.8		1.8
Net loss from discontinued operations (six months)		—		—
Net income (loss) (six months)	$	(0.1)	$	—
Revenue (three months)	$	0.9	$	0.9
Expenses (three months)		0.9		0.9
Net loss from discontinued operations (three months)		—		—
Net income (loss) (three months)	$	—	$	—

Note 6 — Identified Intangible Assets — leases in-place, net

The following table summarizes the Company’s identified intangible assets at June 30, 2012 and December 31, 2011 (in millions):

	June 30, 2012		December 31, 2011
Leases in-place — including above market leases of $2.7	$	7.7	$	7.7
Accumulated amortization		(1.1)		(0.8)
Total	$	6.6	$	6.9

The Company amortizes these intangible assets over the terms of the underlying leases on a straight-line basis. Amortization expense for each of the next five (5) years is expected to be approximately $0.4 million per annum and the amortization for above-market leases, which reduces rental income, is expected to be approximately $0.2 million per annum for each of the next five (5) years.

Note 7 — Borrowings under Mortgage Notes Payable

The following table summarizes the Company’s outstanding mortgage notes as of June 30, 2012 and December 31, 2011 (dollars in millions):

	Interest Rate			Date of Mortgage Note	Maturity Date	June 30, 2012		December 31, 2011
Red Mortgage Capital, Inc (12 properties)(1)		6.845	%	June 2008	July 2015	$	72.4	$	72.8
Red Mortgage Capital, Inc (2 properties)(1)		7.17	%	September 2008	July 2015		7.4		7.5
Key Bank National Association (3 properties)(2)		Libor +4.00	%	September 2011	June 2012		—		15.3
KeyCorp Real Estate Capital Markets, Inc. (3 properties)(2)		4.76	%	April 2012	May 2022		15.7		—
Subtotal							95.5		95.6
Unamortized premium(3)							0.4		0.5
Total						$	95.9	$	96.1

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(1) The mortgage loan obtained on June 26, 2008 (the “June Bickford Loan”) requires a fixed monthly payment of approximately $0.5 million for both principal and interest, until maturity in July 2015, at which time the then outstanding balance of approximately $69.6 million is due and payable. The mortgage loan obtained on September 30, 2008 together with the June Bickford Loan (the “Bickford Loans”), provides for a fixed monthly debt service payment of approximately $52,000 for principal and interest until the maturity in July 2015 when the then outstanding balance of approximately $7.1 million is due and payable. In addition, we are required to make monthly escrow payments for taxes and reserves for which we are reimbursed by the Bickford Master Lessee under the Bickford Master Lease. Both mortgage loans are serviced by and payable to Red Mortgage Capital, Inc. (“Red Capital”) and contain prepayment restrictions that impact our ability to refinance either of the mortgage loans prior to 2015. The Bickford Loans are secured by separate cross-collateralized, cross-defaulted first priority mortgages/deeds of trust on each of the Bickford properties. The Bickford Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for the Bickford Loans. Each Bickford Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Bickford Loans, which would result in all amounts owing under each of the Bickford Loans to become immediately due and payable since all of the Bickford Loans are cross-defaulted. On June 30, 2012, the Bickford Loans had an effective yield of 6.88% and the Company was in compliance with respect to the financial covenants related to the Bickford Loans.

(2) On September 20, 2011, in connection with our acquisition of the Greenfield properties, the Company entered into the Bridge Loan with KeyBank in the principal amount of approximately $15.5 million (see Note 3). The Bridge Loan bore interest at a floating rate per annum equal to Libor plus 400 basis points, with no Libor floor, and provided for monthly interest and principal payments commencing on October 1, 2011. The Bridge Loan was scheduled to mature on June 20, 2012. On April 24, 2012, Care refinanced the Bridge Loan for the Greenfield properties by entering into three separate non-recourse loans (each a “Greenfield Loan” and collectively the “Greenfield Loans”) with KeyCorp Real Estate Capital Markets, Inc. (“KeyCorp”) for an aggregate amount of approximately $15.7 million. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. In June 2012, KeyCorp sold each of the Greenfield Loans to Federal Home Loan Mortgage Corporation (“Freddie Mac”) under Freddie Mac’s Capital Markets Execution (“CME”) Program. As of June 30, 2012, the Company was in compliance with respect to all financial covenants related to the Greenfield Loans.

(3) As a result of the utilization of push-down accounting in connection with the Tiptree Transaction, the Red Mortgage Capital mortgage notes payable were recorded at their then fair value of approximately $82.1 million, an increase of approximately $0.8 million over the combined amortized loan balances of approximately $81.3 million at August 13, 2010. The premium is amortized over the remaining term of such loans.

On February 1, 2012, the Company became party to the short sale of a $15.5 million 2.00% U.S. Treasury Note due November 15, 2021 (the “10-Year U.S. Treasury Note”). Care entered into this transaction in conjunction with its application to Freddie Mac for a ten-year fixed rate mortgage to be secured by the Greenfield properties in order to limit its interest rate exposure. The Company closed the aforementioned short position upon rate locking the Freddie Mac mortgage on April 18, 2012, and realized a net gain of approximately $0.1 million. Tiptree acted as agent, through its prime broker, for us with respect to this transaction and assigned to us all of its rights and obligations related to this transaction (see Note 9).

Note 8 — Related Party Transactions

Services Agreement with TREIT Management LLC

The Company has a Services Agreement with TREIT pursuant to which TREIT provides certain advisory and support services related to the Company’s business. For such services, the Company: (i) pays TREIT a monthly base services fee in arrears of one-twelfth of 0.5% of the Company’s Equity (as defined in the Services Agreement) as adjusted to account for Equity Offerings (as defined in the Services Agreement); (ii) provides TREIT with office space and certain office-related services (as provided in the Services Agreement and subject to a cost sharing agreement between the Company and TREIT); and (iii) pays, to the extent earned, a quarterly incentive fee equal to the lesser of (a) 15% of the Company’s adjusted funds from operations (“AFFO”) Plus Gain/(Loss) on Sale (as defined in the Services Agreement) and (b) the amount by which the Company’s AFFO Plus Gain /(Loss) on Sale exceeds an amount equal to Adjusted Equity multiplied by the Hurdle Rate (as defined in the Services Agreement). Twenty percent (20%) of any such incentive fee shall be paid in shares of common stock of the Company, unless a greater percentage is requested by TREIT and approved by an independent committee of directors. On November 9, 2011, we entered into an amendment to the Services Agreement that clarified the basis upon which the Company calculates the quarterly incentive fee. The initial term of the Services Agreement extends until December 31, 2013. Unless terminated earlier in accordance with its terms, the Services Agreement will be automatically renewed for one year periods

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following such date unless either party elects not to renew. If the Company elects to terminate without cause, or elects not to renew the Services Agreement, a Termination Fee (as defined in the Services Agreement) shall be payable by the Company to TREIT. Such termination fee is not fixed and determinable.

For the three and six months ended June 30, 2012, we incurred approximately $0.1 million and $0.2 million, respectively, in base service fee expense to TREIT. For the three and six months ended June 30, 2011, we incurred approximately $0.1 million and $0.2 million, respectively, in base service fee expense to TREIT. In addition, during the three and six months ended June 30, 2011, we incurred an incentive fee expense to TREIT of approximately $0.2 million and $0.5 million, respectively, of which 20% was paid in the Company’s common stock. There was no incentive fee expense incurred for the three and six months ended June 30, 2012, respectively. For the three and six month periods ended June 30, 2012, TREIT’s reimbursement to the Company for certain office related services was approximately $4,000 and $8,000, respectively. At June 30, 2012, accrued expenses payable to TREIT of approximately $37,000 for the outstanding base service fee was offset by the reimbursement due to us.

Other Transactions with Related Parties

At June 30, 2012 and December 31, 2011, Tiptree owns a warrant (the “2008 Warrant”) to purchase 652,500 shares of the Company’s common stock at $11.33 per share under the Manager Equity Plan adopted by the Company on June 21, 2007 (the “Manager Equity Plan”). The warrant is immediately exercisable and expires on September 30, 2018.

Note 9 — Fair Value Measurements

The Company has established processes for determining fair value measurements. Fair value is based on quoted market prices, where available. If listed prices or quotes are not available, then fair value is based upon internally developed models that primarily use inputs that are market-based or independently-sourced market parameters.

An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of valuation hierarchy are defined as follows:

Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following describes the valuation methodologies used for the Company’s assets and liabilities measured at fair value, as well as the general classification of such pursuant to the valuation hierarchy.

Real estate — The estimated fair value of tangible and intangible assets and liabilities recorded in connection with real estate properties acquired are based on Level 3 inputs. We estimated fair values utilizing income and market valuation techniques. The Company may estimate fair values using market information such as recent sales data for similar assets, income capitalization, or discounted cash flow models. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.

Investments in loans — The estimated fair value of loans is determined utilizing either internal modeling using Level 3 inputs or third party appraisals. The methodology used to value the loans is based on collateral performance, credit risk, interest rate spread movements, and market data. Loans of the type which the Company invests in are infrequently traded and market quotes are not widely available and disseminated.

Obligation to issue operating partnership units — Prior to the sale of our interest in the Cambridge Portfolio, the fair value of our obligation to issue the OP Units associated with the Cambridge acquisition was based on internally developed valuation models, as quoted market prices were not available nor were quoted prices available for similar liabilities. Our model involved the use of management estimates as well as some Level 2 inputs. The variables in the model prior to April 15, 2011 included the estimated release dates of the shares out of escrow, based on the expected performance of the underlying properties, a discount factor of approximately 21%, and the market price and expected quarterly dividend of Care’s common shares at each measurement date. As discussed above in Note 5, pursuant to the Omnibus Agreement, as of April 15, 2011, the number of OP Units outstanding was reduced to 200,000 and the terms of such OP Units were altered to eliminate any conversion right and provided for forfeiture of the OP Units upon the occurrence of certain events. Under the modified terms, the variables (Level 3 inputs) in the model include the expected life of the OP Units, and the expected dividend rate on our common stock and a discount factor of 12%. The obligation with respect to OP Units was eliminated in conjunction with the sale of the Cambridge Portfolio.

U.S. Treasury Short-Position — The estimated fair value of our position in a 10-Year U.S. Treasury Note is based on market quoted prices, a Level 1 input. For the purposes of determining fair value we obtain market quotes from at least two independent sources.

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ASC 820 requires disclosure of the amounts of significant transfers among levels of the fair value hierarchy and the reasons for the transfers. In addition, ASC 820 requires entities to separately disclose, in their roll-forward reconciliation of Level 3 fair value measurements, changes attributable to transfers in and/or out of Level 3 and the reasons for those transfers. Significant transfers into a level must be disclosed separately from transfers out of a level. We had no transfers among levels for the three and six month periods ended June 30, 2012 and 2011.

Recurring Fair Value Measurement

As of June 30, 2012 and December 31, 2011, we had no assets or liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets. As of March 31, 2012, we maintained a short-position on the 10-Year US Treasury Note of November 15, 2021 and recorded an unrealized gain of approximately $0.4 million in the first quarter of 2012. During the three months ended June 30, 2012, the position was closed whereby the approximately $0.4 million unrealized gain was reversed and an approximately $0.1 gain was realized (see Note 7).

The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant Level 3 inputs during the six month period ended June 30, 2011 (for the six month period ended June 30, 2012 we had no such assets or liabilities). Level 3 instruments presented in the tables include a liability to issue OP Units, which were carried at fair value. The Level 3 instruments were valued using internally developed valuation models that, in management’s judgment, reflect the assumptions a marketplace participant would utilize:

Level 3 Instruments Fair Value Measurements June 30, 2011 (in millions)	Obligation to  Issue Partnership Units
Balance, December 31, 2010	$	(2.1)
Modification of OP Units (offset against investment)		1.9
Net change in unrealized loss from obligations		(0.3)
Balance, June 30, 2011	$	(0.5)

We are required to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. We have not designated any derivative instruments as hedging instruments. As of June 30, 2012 and December 31, 2011, we did not have any derivative instruments outstanding. As discussed in Note 5, Cambridge forfeited all of its rights and interests in the OP Units upon the closing of the purchase of Care’s interest in the Cambridge Portfolio on November 30, 2011.

Our consolidated financial statements include the following gains and losses associated with the aforementioned Cambridge OP Units and our 2012 10-Year US Treasury Note short-position:

(in millions)	Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments	Location of (Gain) Loss Recognized in Income on Derivative	Three Months Ended June 30, 2012		Three Months Ended June 30, 2011		Six Months Ended June  30, 2012		Six Months Ended June 30, 2011
Operating partnership units	Unrealized loss on derivative instruments		$    —		$  —		$  —		$(0.3)
10-Year U.S. Treasury Note (short sale)	Unrealized loss on derivative instruments		$ (0.4)		$  —		$  —		$   —
10-Year U.S. Treasury Note (short sale)	Realized gain on derivative instruments		$   0.1		$  —		$ 0.1		$   —

Estimates of other assets and liabilities in financial statements

We are required to disclose fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate that value. In cases where quoted market prices are not available, fair value is based upon the application of discount rates to estimated future cash flows based on market yields or other appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

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In addition to the amounts reflected in the financial statements at fair value as provided above, cash and cash equivalents, restricted cash, accrued interest receivable, accounts payable and other liabilities reasonably approximate their fair values due to the short maturities of these items. The fair value of the debt was calculated by determining the present value of the agreed upon interest and principal payments at a discount rate reflective of financing terms currently available in the market for collateral with the similar credit and quality characteristics (based on Level 2 measurements). The mortgage notes payable that were used to finance the acquisitions of the Bickford properties have a combined fair value of approximately $83.1 million and $84.8 million as of June 30, 2012 and December 31, 2011, respectively. As of June 30, 2012, the combined fair value of the Greenfield Loans was approximately $15.3 million. The Bridge Loan used to finance the Greenfield acquisition was a floating rate facility and closed on September 20, 2011. Due to the short -term nature of the Bridge Loan and the fact that it had a floating interest rate, the carrying value of the Bridge Loan approximated fair market value as of December 31, 2011. We determined that the fair value of our loan investment, computed by discounting expected future cash flow at market rate, was approximately equal to our carrying value at June 30, 2012 and December 31, 2011.

Note 10 — Stockholders’ Equity

Our authorized capital stock consists of 100,000,000 shares of preferred stock, $0.001 par value and 250,000,000 shares of common stock, $0.001 par value. As of June 30, 2012 and December 31, 2011, no shares of preferred stock were issued and outstanding and 10,215,551 and 10,171,550 shares of our common stock were issued and outstanding, respectively.

Tiptree owns the 2008 Warrant that entitles it to purchase 652,500 shares of our common stock at a price of $11.33 per share under the Manager Equity Plan. The 2008 Warrant is immediately exercisable and expires on September 30, 2018.

During 2012, we issued 4,428 shares of common stock with a combined aggregate fair value of approximately $30,000 to our independent directors as part of their annual retainer for 2012 and 2011. Each independent director receives an annual base retainer of $50,000, payable quarterly in arrears, of which 70% is paid in cash and 30% in shares of Care common stock. Shares paid to our directors are issued under our Equity Plan, which was adopted in June 2007 (the “Equity Plan”).

On March 30, 2012, we issued 49,573 common shares with a combined aggregate fair value of approximately $345,000 to TREIT in conjunction with the 2011 fourth quarter incentive fee due under the Services Agreement (see Note 8). These shares were issued under the Manager Equity Plan.

On April 3, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the fourth quarter of 2011 which was paid on May 1, 2012 to stockholders of record as of April 17, 2012. Such dividend will be treated as a 2012 distribution for tax purposes.

On May 10, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the first quarter of 2012 was paid on June 7, 2012 to stockholders of record as of May 24, 2012.

In December 2011, we granted 100,153 restricted stock units (“RSUs”) to certain officers and employees at a grant date fair value of approximately $0.7 million. For the three month period ended June 30, 2012, dividend equivalent distributions were made to the holders of the unvested RSUs of approximately $27,000.

In conjunction with the resignation of our former chief financial officer, effective June 23, 2012, 30,769 restricted stock units were forfeited that were previously granted during his employment. Those units are available for future issuance under the Equity Plan. In addition, on June 25, 2012, the Company repurchased from our former chief financial officer 10,000 shares of our common stock at fair market value of $7.15 per common share. The repurchased shares are available for future issuance.

As of June 30, 2012, 200,904 common shares remain available for future issuances under the Equity Plan and 134,629 shares (which is net of 652,500 shares that are reserved for potential issuance upon conversion of the 2008 Warrant) remain available for future issuances under the Manager Equity Plan.

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Note 11 — Income (Loss) per Share (in thousands, except share and per share data)

	Three Months Ended				Six Months Ended
	June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Net income (loss) per share of common stock
Net income (loss) per share, basic	$	(0.03)	$	0.11	$	0.00	$	(0.00)
Net income (loss) per share, diluted	$	(0.03)	$	0.10	$	0.00	$	(0.00)
Numerator:
Net income (loss)	$	(239)	$	1,067	$	55	$	(46)
Less: Allocation to participating securities		(27)		—		(27)		—
Net income (loss) allocated to common stockholders, basic and diluted	$	(266)	$	1,067	$	28	$	(46)
Denominator:
Weighted average common shares outstanding, basic		10,224,845		10,149,562		10,200,141		10,145,018
Shares underlying RSU grants		—		—		14,124		—
Shares underlying the Cambridge warrant		—		17,710		—		—
Weighted average common shares outstanding, diluted		10,224,845		10,167,272		10,214,265		10,145,018

For the six month period ended June 30, 2012, diluted income per share includes the effect of 69,384 remaining unvested RSUs which were granted to certain officers and employees on December 30, 2011. For the three month period ended June 30, 2012, diluted loss per share excludes the effect of these awards as they were anti-dilutive. The RSUs are participating securities.

For the three month period ended June 30, 2011, diluted income per share includes the effect of 17,710 common shares pertaining to the Warrant issued to Cambridge on April 15, 2011 under the Omnibus Agreement. For the six month period ended June 30, 2011 there were no outstanding securities that were dilutive.

For the three months ended June 30, 2011, the original operating partnership units did not affect diluted EPS. For the six month period ended June 30, 2011, basic and diluted EPS did not include operating partnership units that were outstanding prior to April 15, 2011 as they were anti-dilutive.

As described in Note 5, on April 14, 2011 (effective April 15, 2011), our Cambridge investment was restructured and the OP Units issued in connection with the Cambridge investment were no longer redeemable for or convertible into shares of our common stock.

All periods above exclude the dilutive effect of the 2008 Warrant convertible into 652,500 shares because the exercise price was more than the average market price during such periods.

Note 12 — Commitments and Contingencies

The table below summarizes our remaining contractual obligations as of June 30, 2012.

Amounts in millions	2012		2013		2014		2015		2016		2017		Thereafter		Total
Mortgage notes payable and related interest	$	3.7	$	7.5	$	7.5	$	81.4	$	1.0	$	1.0	$	10.2	$	112.3
Base Service Fee Obligations(1)		0.2		0.5		—		—		—		—		—		0.7
Operating Lease Obligations(2)		0.2		0.2		0.2		0.2		0.2		0.2		0.4		1.6
Total	$	4.1	$	8.2	$	7.7	$	81.6	$	1.2	$	1.2	$	10.6	$	114.6

(1) TREIT base service fee, subject to increase or decrease based on changes in shareholders’ equity. The termination fee payable to TREIT in the event of non-renewal of the Services Agreement by the Company is not fixed and determinable and is therefore not included in the table.

(2) Minimum rental obligations for Company office lease.

For the three and six month periods ended June 30, 2012 and 2011, rent expense for the Company’s office lease was approximately $0.1 million and $0.1 million, respectively.

Litigation

Care is not presently involved in any material litigation or, to our knowledge, is any material litigation threatened against us or our investments, other than routine litigation arising in the ordinary course of business. Management believes the costs, if any, incurred by us related to litigation will not materially affect our financial position, operating results or liquidity.

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Note 13 — Subsequent Events

Share Issuances

On July 2, 2012, we issued 2,144 shares of common stock with a combined aggregate fair value of approximately $15,000 to our independent directors as part of their annual retainer for the quarter ended June 30, 2012.

Dividends Declaration

On August 9, 2012, the Company declared a cash dividend of $0.135 per share of common stock with respect to the second quarter of 2012 that will be paid on September 6, 2012 to stockholders of record as of August 23, 2012.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Information

Our disclosure and analysis in this Form 10-Q, and the documents that are incorporated by reference herein contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations and funds from operations (“FFO”) and adjusted funds from operations (“AFFO”), our strategic plans and objectives, cost management, occupancy and leasing rates and trends, liquidity and ability to refinance our indebtedness as it matures, anticipated capital expenditures (and access to capital) required to complete projects, amounts of anticipated cash distributions to our stockholders in the future and other matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecast in the forward-looking statements. You should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Statements regarding the following subjects, among others, are forward-looking by their nature:

• our business and financing strategy;

• our ability to acquire investments on attractive terms;

• our ability to pay down, refinance, restructure and/or extend our indebtedness as it becomes due;

• our understanding of our competition;

• our projected operating results;

• market trends;

• estimates relating to our future dividends;

• completion of any pending transactions;

• projected capital expenditures; and

• impact of technology on our operations and business.

Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. You are cautioned to not place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to:

• risks and uncertainties related to the current market environment, the national and local economies, and the real estate industry in general and in our specific markets, which may have a negative effect on the following, among other things:

• the financial condition and performance of our tenants, borrowers, operators, corporate customers, joint-venture partners, lenders and/or institutions that hold our cash balances, which may expose us to increased risks of default by these parties;

• our ability to obtain equity or debt financing on attractive terms or at all, which may adversely impact our ability to pursue acquisition opportunities and refinance existing debt and our future interest expense; and

• the value of our real estate investments, which may limit our ability to divest our assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis.

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• general volatility of the securities markets in which we invest and the market price of our common stock;

• changes in our business or investment strategy;

• changes in healthcare laws and regulations;

• availability, terms and deployment of capital;

• our ability to pay distributions and the amount of such distributions;

• our dependence upon key personnel whose continued service is not guaranteed and our ability to identify, hire and retain highly qualified executives in the future;

• changes in our industry, interest rates, the debt securities markets, the general economy or the commercial finance and real estate markets specifically;

• the degree and nature of our competition;

• the risks associated with the Company’s investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners’ financial condition and continued cooperation;

• increased rates of default and/or decreased recovery rates on our investments;

• potential environmental contingencies, and other liabilities;

• our ability to maintain our status as a real estate investment trust (“REIT”) for federal and state income tax purposes;

• increased prepayments or extensions of the mortgages and other loans underlying our mortgage portfolio;

• actual and potential conflicts of interest with Tiptree Financial Partners, L.P. (“Tiptree”), TREIT Management LLC (“TREIT”), Tiptree Capital Management LLC (“Tiptree Capital”), their respective affiliates and their related persons and entities;

• the extent of future or pending healthcare reform and regulation;

• changes in governmental regulations, tax rates and similar matters;

• legislative and regulatory changes (including changes to laws governing the taxation of REITs or the exemptions from registration as an investment company);

• the adequacy of our cash reserves and working capital; and

• the timing of cash flows, if any, from our investments.

This list of risks and uncertainties, however, is only a summary of some of the most important factors to us and is not intended to be exhaustive. New factors may also emerge from time to time that could materially and adversely affect us.

The following should be read in conjunction with the condensed consolidated financial statements and notes included herein. This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) contains certain non-GAAP financial measures. See “Non-GAAP Financial Measures” and supporting schedules for reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures.

Overview

Care Investment Trust Inc. (all references to “Care,” “the Company,” “we,” “us,” and “our” means Care Investment Trust Inc. and its subsidiaries) is an equity real estate investment trust (“REIT”) that invests in healthcare facilities including assisted-living, independent-living, memory care, skilled nursing and other healthcare-related real estate assets in the United States of America (the “U.S.”). The Company, which utilizes a hybrid management structure containing components of both internal and external management, was incorporated in Maryland in March 2007 and completed its initial public offering on June 22, 2007.

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As of June 30, 2012, we maintain a geographically-diversified investment portfolio consisting of approximately $2.5 million (2%) in an unconsolidated joint venture that owns real estate, approximately $127.2 million (94%) in wholly-owned real estate and approximately $5.6 million (4%) in a mortgage loan. As of June 30, 2012, Care’s portfolio of assets consists of wholly-owned real estate of senior housing facilities, including assisted living, independent living and memory care facilities, as well as a joint-venture which owns an assisted / independent living facility and a mortgage loan secured by skilled nursing facilities, assisted living facilities and a multifamily property. Our wholly-owned senior housing facilities are leased, under triple-net leases, which require the tenants to pay all property-related expenses.

As a REIT, we are generally not subject to income taxes. To maintain our REIT status, we are required to distribute on an annual basis dividends equal to at least 90% of our REIT taxable income, as defined by the Internal Revenue Code of 1986, as amended (the “Code”), to our stockholders, among other requirements. If we fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal income tax on our taxable income at regular corporate tax rates.

Transactions in 2011 and 2012

In May 2011, with our prior consent, Senior Management Concepts, LLC (“SMC”) sold three (3) of the four (4) properties in our SMC portfolio. We received approximately $6.6 million of gross proceeds consisting of approximately $5.2 million representing a return of our preferred equity investment in the three (3) sold properties, approximately $0.9 million representing our 10% common equity interest in the three (3) sold properties and approximately $0.4 million which satisfied all outstanding delinquent preferred return and default interest payments owed us. In conjunction with the sale of the three (3) properties, we returned a security deposit of approximately $0.4 million that was held by us as payment collateral for those facilities. We received approximately $12,000 in excess of the then current cost basis of our investment.

In September 2011, the Company acquired three (3) assisted living and memory care facilities located in Virginia from affiliates of Greenfield Senior Living, Inc. (“Greenfield”). The aggregate purchase price for the three (3) properties was $20.8 million, of which approximately $15.5 million was funded with the proceeds of a first mortgage bridge loan (the “Bridge Loan”) with KeyBank N. A. (“KeyBank”), and the balance with cash on hand. Concurrent with the acquisition, the properties were leased to three (3) wholly-owned affiliates of Greenfield, which are responsible for operating each of the properties pursuant to a triple net master lease (the “Greenfield Master Lease”). The initial term of the Greenfield Master Lease is 12 years with two (2) renewal options of ten (10) years each. Rent payments during the first year are approximately $1.7 million, with annual rental increases of 2.75% during the initial term of the lease. At the end of the initial term, Greenfield, subject to certain conditions, holds a one-time purchase option that provides the right to acquire all three (3) of the properties at the then fair market value. Greenfield has guaranteed the obligations of the tenants under the Greenfield Master Lease.

In April 2012, Care refinanced the Bridge Loan for the Greenfield properties by entering into three (3) separate non-recourse loans with KeyCorp for an aggregate amount of approximately $15.7 million. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. In June 2012, KeyCorp sold each of the Greenfield Loans to Freddie Mac under Freddie Mac’s CME Program.

In November 2011, Care consummated the sale of its interest in its nine (9) property medical office portfolio (the “Cambridge Portfolio”) for total cash consideration of approximately $42.0 million, which included approximately $1.2 million of income allocable to our preferred distribution of cash flow from operations. Pursuant to an amendment to the Omnibus Agreement entered into in October 2011, the Company granted to Cambridge Holdings LLC and its affiliates (“Cambridge”) the option to purchase all of Care’s interest in the medical office portfolio at any time up to December 9, 2011, for an amount equal to the sum of the Company’s $40.0 million preferred fixed dollar investment plus its accrued but unpaid preferred return of approximately $2.0 million. In connection with the sale, the remaining 200,000 operating partnership units and a warrant to purchase 300,000 shares of the Company’s common stock previously issued to Cambridge were canceled.

Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2011 in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no significant changes to those policies during the six-month period ended June 30, 2012.

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Results of Operations

Comparison of the three months ended June 30, 2012 and the three months ended June 30, 2011

Revenue

During the three month period ended June 30, 2012, we recognized approximately $3.4 million of rental revenue and approximately $0.4 million of reimbursable income on our Bickford properties (the “Bickford Portfolio”) and our Greenfield properties (the “Greenfield Portfolio”), as compared with approximately $3.0 million of rental revenue and approximately $0.3 million of reimbursable income related solely to the Bickford Portfolio during the comparable period in 2011. Our acquisition of the Greenfield Portfolio in September 2011 accounts for the $0.4 million increase in rental revenue and the $0.1 million increase in reimbursable income in the second quarter of 2012 as compared to the second quarter of 2011. Reimbursable income includes real estate taxes and certain other escrows that we collect on behalf of our Bickford and Greenfield Portfolios and which are used to pay such expense as they come due.

We earned interest income on our remaining loan investment, which is part of a syndicated loan in which we have an approximately one-third interest, of approximately $0.2 million for each of the three month periods ended June 30, 2012 and 2011. Our loan portfolio had a lower average outstanding principal loan balance during the three month period ended June 30, 2012, as compared with the comparable period during 2011, as a result of scheduled principal payments and prepayments received. The impact of the reduction in the outstanding principal balance is partially offset by the increase in the applicable interest rate for the three months ended June 30, 2012 which resulted from a restructuring of the loan in November 2011. We recognized interest income for the three months ended June 30, 2012 at an effective interest rate based on Libor in effect at the inception of the restructured loan and using a weighted average spread of 7.20%. For the three months ended June 30, 2011, the effective yield was 4.21%.

Expenses

For the three months ended June 30, 2012, we recorded base service fee and incentive fee expense under our services agreement with TREIT for certain advisory and support services (the “Services Agreement”) of approximately $0.1 million (base) and none (incentive), respectively, as compared with approximately $0.1 million (base) and approximately $0.2 million (incentive), respectively, for the comparable period in 2011. The decrease of approximately $0.2 million in incentive fee expense in the second fiscal quarter of 2012 is primarily attributable to the sale of our interest in the Cambridge Portfolio that occurred in November 2011, thereby reducing the Company’s AFFO Plus Gain (Loss) on Sale (as defined in the Services Agreement) for the three month period ended June 30, 2012 as compared to the comparable period in 2011.

Marketing, general and administrative expenses, which include fees for professional services, such as audit, legal and investor relations; directors & officers (D&O) insurance; general overhead costs for the Company; and employee salaries and benefits, as well as, fees paid to our directors were approximately $0.9 million for each of the three month periods ended June 30, 2012 and 2011. During the second quarter of fiscal 2012, as compared to the comparable period of 2011, there was an increase of approximately $0.2 million in professional fees incurred relating to transaction expenses and stock-based compensation costs associated with restricted stock units granted in December 2011, offset by a decrease of approximately $0.2 million in compensation expense relating to reduction in annual bonus accruals, a reduction in D&O insurance expense and the reduction in local income taxes.

The services fees, incentive fees, expense reimbursements, and the relationship between us and our advisor, TREIT, are discussed further in Note 8 to the Condensed Consolidated Financial Statements.

Reimbursed property expenses include real estate taxes and other reserves that we collect and disburse on behalf of our tenants in our owned properties. Reimbursable expenses for the three months ended June 30, 2012 were approximately $0.4 million as compared to approximately $0.3 million during the comparable period in 2011. The $0.1 million increase is primarily attributable to the additional properties acquired in the September 2011 Greenfield transaction. Reimbursable income substantially offsets reimbursable expenses.

Depreciation and Amortization

Depreciation and amortization expenses amounted to approximately $1.0 million for the three months ended June 30, 2012 as compared to approximately $0.9 million during the three months ended June 30, 2011. The depreciation and amortization expense for the three month period ended June 30, 2011 related to the Bickford Portfolio. For the three month period ended June 30, 2012, depreciation and amortization expense included the Bickford Portfolio as well as the Greenfield Portfolio that the Company acquired in September 2011. Also included in depreciation and amortization were expenses related to the amortization of the in-place leases related to these properties as well as depreciation related to the fixtures, furniture and equipment located in the Company’s corporate headquarters.

Income or loss from investments in partially-owned entities

For the three month period ended June 30, 2012 income from partially-owned entities amounted to approximately $0.1 million as compared with income of approximately $1.4 million for the comparable period in 2011, a decrease of approximately $1.3 million. For the three months ended June 30, 2012 and 2011, we recognized our share of our equity income in the SMC investment of $0.1 million and $0.2 million, respectively. As per the terms of the restructured Cambridge investment (as outlined in the Omnibus Agreement dated

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April 15, 2011, which was retroactive as of January 1, 2011) we recognized in the three months ended June 30, 2011 approximately $1.2 million representing a preferential distribution of cash flow from operations. An impairment of approximately $0.1 million was recognized on our SMC investment during the three month period ended June 30, 2011 due to lower occupancy.

Gain or loss on derivative instruments

During the quarter ended March 31, 2012, we became party to the short sale of a $15.5 million 2.00% U.S. Treasury Note due November 15, 2021 (the “10-Year U.S. Treasury Note”) in anticipation of entering into a ten-year fixed rate mortgage secured by our Greenfield Portfolio. During the three month period ended March 31, 2012, we recognized an unrealized gain on derivative instruments of approximately $0.4 million relating to the short-position. During the quarter ended June 30, 2012, the short-position was closed whereby the original unrealized gain was reversed and a net realized gain of approximately $0.1 was recognized (see Notes 7 and 9 to the Condensed Consolidated Financial Statements).

Interest Expense

We incurred interest expense of approximately $1.6 million for the three month period ended June 30, 2012 as compared with interest expense of approximately $1.4 million for the three month period ended June 30, 2011. Interest expense for both of these periods ended June 30 includes the interest incurred on the mortgage debt secured by the Bickford Portfolio. The increase in interest expense of approximately $0.2 million during the second quarter in 2012 was primarily the result of interest and amortization of deferred financing costs on the mortgage debt secured by the Greenfield properties.

Comparison of the six months ended June 30, 2012 and the six months ended June 30, 2011

Revenue

During the six month period ended June 30, 2012, we recognized approximately $6.9 million of rental revenue and approximately $0.7 million of reimbursable income on the Bickford Portfolio and our Greenfield Portfolio, as compared with approximately $5.9 million of rental revenue and approximately $0.6 million of reimbursable income related solely to the Bickford Portfolio during the comparable period in 2011. Our acquisition of the Greenfield Portfolio in September 2011 accounts for the increase in rental revenue and reimbursable income.

We earned interest income on our remaining loan investment of approximately $0.4 million for each of the six month periods ended June 30, 2012 and 2011. Our loan portfolio had a lower average outstanding principal loan balance during the six month period ended June 30, 2012, as compared with the comparable period during 2011, as a result of scheduled principal payments and prepayments received. The impact of the reduction in the outstanding principal balance is partially offset by the increase in the applicable interest rate for the six months ended June 30, 2012 which resulted from a restructuring of the loan in November 2011. We recognized interest income for the six months ended June 30, 2012 at an effective interest rate based on Libor in effect at the inception of the restructured loan and using a weighted average spread of 7.20%. For the six months ended June 30, 2011, the effective yield was 4.21%.

Expenses

For the six months ended June 30, 2012, we recorded base service fee and incentive fee expense under our Services Agreement of approximately $0.2 million (base) and none (incentive), respectively, as compared with approximately $0.2 million (base) and approximately $0.5 million (incentive), respectively, for the comparable period in 2011. The decrease of approximately $0.5 million in incentive fee expense during the first six months of 2012 is primarily attributable to the sale of our interest in the Cambridge Portfolio that occurred in November 2011, thereby reducing the Company’s AFFO Plus Gain (Loss) on Sale (as defined in the Services Agreement) for the six month period ended June 30, 2012 as compared to the comparable period in 2011.

Marketing, general and administrative expenses were approximately $2.1 million for the six month period ended June 30, 2012 as compared with approximately $1.7 million for the comparable period in 2011, an increase of approximately $0.4 million. The increase is primarily attributable to an increase of approximately $0.5 million in professional fees incurred during fiscal 2012 relating to an increase in transaction expenses and approximately $0.1 million for stock-based compensation costs associated with restricted stock units granted in December 2011, partially offset by a decrease of approximately $0.2 million in compensation expense relating to reduction in annual bonus accruals, reduction in local income taxes and a reduction in D&O insurance expense during the six months ended June 30, 2012 as compared to the comparable period in 2011.

Reimbursed property expenses include real estate taxes and other reserves that we collect and disburse on behalf of our tenants in our owned properties. Reimbursable expenses for the six months ended June 30, 2012 were approximately $0.7 million as compared to approximately $0.6 million during the comparable period in 2011. The $0.1 million increase is primarily attributable to the additional properties acquired in the September 2011 Greenfield transaction. Reimbursable income substantially offsets reimbursable expenses.

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Depreciation and Amortization

Depreciation and amortization expenses amounted to approximately $2.0 million for the six months ended June 30, 2012 as compared to approximately $1.7 million during the six months ended June 30, 2011. The depreciation and amortization expense for the six month period ended June 30, 2011 related to the Bickford Portfolio. For the six month period ended June 30, 2012, depreciation and amortization expense included the Bickford Portfolio as well as the Greenfield Portfolio which the Company acquired in September 2011. Also included in depreciation and amortization were expenses related to the amortization of the in-place leases related to these properties as well as depreciation related to the fixtures, furniture and equipment located in the Company’s corporate headquarters.

Income or loss from investments in partially-owned entities

For the six month period ended June 30, 2012 income from partially-owned entities amounted to approximately $0.2 million as compared with income of approximately $0.8 million for the comparable period in 2011, a change of approximately $0.6 million. For the six months ended June 30, 2012 and 2011, we recognized our share of our equity income in the SMC investment of $0.2 million and $0.6 million respectively. We recognized our allocable non-cash operating loss from the Cambridge Portfolio of approximately $1.1 million representing 85% of the operating loss of Cambridge for the first quarter of 2011, which included approximately $2.6 million attributable to our share of the depreciation and amortization expenses associated with these properties. During the second quarter of 2011, per the terms of the restructured Cambridge investment (as outlined in the Omnibus Agreement dated April 15, 2011, we recognized approximately $1.2 million representing a preferential distribution of cash flow from operations. We sold our interest in the Cambridge Portfolio in November 2011. An impairment of approximately $0.1 million was recognized on our SMC investment during the three month period ended June 30, 2011 due to lower occupancy.

Gain or loss on derivative instruments

During the quarter ended March 31, 2012, we became party to the short sale of a $15.5 million 10-Year U.S. Treasury Note in anticipation of entering into a ten-year fixed rate mortgage secured by our Greenfield Portfolio. The short-position was closed in April 2012 and a net realized gain of approximately $0.1 was recognized for the six month period ended June 30, 2012 (see Notes 7 and 9 to the Condensed Consolidated Financial Statements). We recognized approximately $0.3 million unrealized loss on the fair value of our obligation to issue operating partnership units (“OP Units”) related to the Cambridge investment for the six month period ended June 30, 2011. As a result of the terms of the Omnibus Agreement, the valuation and accounting for the OP Units had been modified on April 15, 2011 (see Note 5 to the Condensed Consolidated Financial Statements). Our obligation with respect to the OP Units associated with the Cambridge Portfolio was eliminated upon the sale of our interest in the Cambridge Portfolio in the fourth quarter of 2011.

Interest Expense

We incurred interest expense of approximately $3.2 million for the six month period ended June 30, 2012 as compared with interest expense of approximately $2.7 million for the six month period ended June 30, 2011. Interest expense for both of these periods ended June 30 includes the interest incurred on the mortgage debt secured by the Bickford Portfolio. The increase in interest expense of approximately $0.5 million during the six month period ended June 30, 2012 was primarily the result of interest and amortization of deferred financing costs on the mortgage debt secured by the Greenfield properties acquired in September 2011.

Liquidity and Capital Resources

Short-term Liquidity Needs

Liquidity is a measurement of our ability to meet short and long-term cash needs. Our principal current cash needs are: (i) to fund operating expenses, including potential expenditures for repairs and maintenance of our properties and debt service on our outstanding mortgage loan obligations; (ii) to distribute 90% of our REIT taxable income to our stockholders in order to maintain our REIT status; and (iii) to fund other general ongoing business needs, including employee compensation expense, D&O insurance, administrative expenses, as well as property acquisitions and investments. As of June 30, 2012, we did not have any development and / or redevelopment projects or any outstanding purchase obligations for the acquisition of additional assets. Our primary sources of liquidity are our current working capital, rental income from our wholly-owned real estate properties, distributions from our interest in a partially-owned entity that holds real estate, interest and principal payments on our remaining loan investment and interest income earned from our available cash balances. Management currently believes that the Company has adequate liquidity to meet its short-term capital needs.

We intend to invest in additional healthcare-related real estate properties only as suitable opportunities arise. In the short term, we may seek to fund any future acquisitions, developments or redevelopments with a combination of cash on hand, working capital and equity and/or debt financing. Potential increases in real estate investments and decreases in cash may potentially result in increases in revenue, cash flow and earnings, offset by a reduction in liquidity. In evaluating acquisition opportunities, the Company takes into consideration its current and future cash needs as well as the availability of equity and/or debt financing.

Long-term Liquidity Needs

Our long-term liquidity requirements consist primarily of funds necessary for scheduled debt maturities, property acquisitions, developments and redevelopments of health-care facilities and other non-recurring capital expenditures that are needed periodically for

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our properties. We currently do not have a revolving credit facility or other credit line. As we grow our business, we may seek additional equity and/or debt financing. We may also pursue joint ventures with equity partners as a means of capitalizing property acquisitions. We may also in the future issue operating partnerships units in either UpREIT or DownREIT transactions, which units could be convertible into our common stock. However, our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by potential and current lenders. Our ability to access additional equity and/or debt capital will be dependent on a number of factors as well, including general market conditions for REITs and market perceptions about our Company. Nevertheless, we believe that these sources of liquidity, in addition to existing working capital and cash provided by operations, will allow us to meet our anticipated future liquidity needs.

We routinely review our liquidity requirements and believe that our current cash flows are sufficient to allow us to continue operations, satisfy our contractual obligations and pay dividends to our stockholders. Sources of cash and cash equivalents, cash flows provided by (used in) operating activities, investing activities and financing activities are discussed below.

Cash and Cash Equivalents

Cash and cash equivalents were approximately $48.0 million at June 30, 2012 as compared with approximately $52.3 million at December 31, 2011, a decrease of approximately $4.3 million. The decrease in cash and cash equivalents during the six months ended June 30, 2012 was primarily due to payment of approximately $1.3 million in base service fees and incentive fees to our advisor TREIT; approximately $15.8 million of principal payments on outstanding mortgage loans, which included the payoff of the Bridge Loan on the Greenfield Portfolio; payment of deferred financing costs of approximately $0.6 million; dividend payments of approximately $2.8 million; repurchase of common stock of approximately $0.1 million; and payment of approximately $0.8 million for 2011 cash bonuses. This amount was partially offset by income generated from our real estate investments; approximately $15.7 million in borrowings from mortgage notes; $0.2 million distributions from partially-owned entities; $0.1 million proceeds from derivative transactions; and $0.2 million in loan repayments. During the six months ended June 30, 2012, cash of approximately $0.9 million was used in operating activities, approximately $0.2 million provided by investing activities and approximately $3.6 million used in financing activities.

Cash Uses

The Company continually evaluates new investment opportunities in healthcare properties as well as expansions and/or modifications to existing investments. The availability of attractive investment opportunities that are suitable for our risk-adjusted return parameters, and the availability of third-party financing will impact our uses of cash in 2012. In addition, in 2012 we expect to use cash to fund operating expenses, including potential expenditures for repairs and maintenance of our properties and debt service on our outstanding mortgage loan obligations, as well as other general ongoing business needs, employee compensation expense, D&O insurance, professional fees and rent. We also expect to distribute cash to our stockholders in the form of dividends and/or return of capital.

Cash from Operating Activities

Net cash used in operating activities for the six months ended June 30, 2012 was approximately $0.9 million as compared with approximately $3.2 million provided by operating activities for the comparable 2011 period, a change of approximately $4.1 million. The change was primarily attributable to an approximately $0.5 million increase in operating expenses associated with transaction activity and other professional fee expenses; a reduction of approximately $2.6 million of cash distributions from the Company’s investments in partially-owned entities resulting from our restructuring and sale of the Cambridge Portfolio in 2011, which was offset by an increase in rental revenues of approximately $1.0 million and a decrease of approximately $0.5 million in incentive fees incurred to our advisor TREIT, of which 20% is payable in stock. The net change in operating assets and liabilities was approximately $2.3 million use of cash in the six month period ended June 30, 2012, which was primarily attributable to approximately $1.7 million in base service fees and incentive fees relating to our fiscal fourth quarter of 2011 and approximately $0.8 million for 2011 cash bonuses, both paid in 2012, partially offset by additional 2012 accruals for operating expenses.

Cash from Investing Activities

Net cash provided by investing activities for the six months ended June 30, 2012 was approximately $0.2 million as compared with approximately $7.4 million provided by investing activities for the six months ended June 30, 2011, a decrease of approximately $7.2 million. The change is primarily attributable to the receipt of loan repayments of approximately $0.2 million in 2012 as compared to the receipt of loan repayments of approximately $1.6 million for the comparable period in 2011; return of investment in partially-owned entities of approximately $6.1 million in the six months ended June 30, 2011 associated with the sale of three (3) of the Company’s four (4) properties in its SMC investment which did not occur during the comparable period in 2012, which were partially offset by proceeds of approximately $0.1 million from the sale of derivatives in the six months ended June 30, 2012; and fixed asset purchases of $23,000 in 2012 as compared with approximately $0.2 million during the comparable period in 2011.

Cash from Financing Activities

Net cash used in financing activities for the six months ended June 30, 2012 was approximately $3.6 million as compared with approximately $1.7 million used for the six months ended June 30, 2011, an increase of approximately $1.9 million. The change is

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primarily attributable to the scheduled principal repayments under our mortgage notes and payoff of the Bridge Loan for our Greenfield Portfolio of approximately $15.8 million for the six months ended June 30, 2012 as compared to approximately $0.4 million for the comparable 2011 period which only included principal repayments; payment of deferred financing costs of approximately $0.6 million in 2012; dividend payments of approximately $2.8 million in 2012 as compared to approximately $1.4 million in 2011; and the repurchase of common stock of approximately $0.1 million in 2012, which was partially offset by additional borrowings of mortgage notes during the six month period ended June 30, 2012 of approximately $15.7 million which did not occur during the comparable period in 2011.

Debt

On June 26, 2008, in connection with the acquisition of the initial 12 properties from affiliates of Bickford Senior Living Group LLC (“Bickford”) (discussed in Note 3 to the Condensed Consolidated Financial Statements), we entered into a mortgage loan with Red Mortgage Capital, Inc. (“Red Capital”) in the principal amount of approximately $74.6 million. The mortgage loan has a fixed interest rate of 6.845% and requires a fixed monthly debt service payment of approximately $0.5 million for principal and interest, until maturity in July 2015, at which time the then outstanding balance of approximately $69.6 million is due and payable. In addition, we are required to make monthly escrow payments for taxes and reserves for which we are reimbursed by the tenants of these properties. The mortgage loan is collateralized by the 12 properties.

On September 30, 2008, we acquired two (2) additional properties from Bickford and entered into a second mortgage loan with Red Capital in the principal amount of approximately $7.6 million. The mortgage loan has a fixed interest rate of 7.17% and requires a fixed monthly debt service payment of approximately $52,000 for principal and interest until the maturity in July 2015 when the then outstanding balance of approximately $7.1 million is due and payable. In addition, we are required to make monthly escrow payments for taxes and reserves for which we are reimbursed by the tenants of these properties. The mortgage loan is collateralized by the two (2) properties.

Both mortgage loans payable to Red Capital (the “Bickford Loans”) contain prepayment restrictions that impact our ability to refinance either of the mortgage loans prior to 2015. The Bickford loans are secured by separate cross-collateralized, cross-defaulted first priority mortgages/deeds of trust on each of the 14 Bickford properties. The Bickford loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for the Bickford loans. Each Bickford Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Bickford Loans, which would result in all amounts owing under each of the Bickford Loans to become immediately due and payable since all of the Bickford Loans are cross-defaulted. As of June 30, 2012, approximately $0.4 million of premium remains to be amortized over the remaining term of the two (2) mortgage loans.

On September 20, 2011, we entered into the Bridge Loan with KeyBank in the principal amount of approximately $15.5 million for the purpose of financing the purchase price for the Greenfield Portfolio. The Bridge Loan bore interest at a floating interest rate equal to Libor plus 4.00% with no Libor floor, and provided for monthly interest and principal payments commencing on October 1, 2011. On April 24, 2012 Care refinanced the Bridge Loan for the Greenfield Portfolio by entering into three separate non-recourse loans (each a “Greenfield Loan” and collectively the “Greenfield Loans”) with KeyCorp Real Estate Capital Markets, Inc. (“KeyCorp”) for an aggregate amount of approximately $15.7 million. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. In June 2012, KeyCorp sold each of the Greenfield Loans to Federal Home Loan Mortgage Corporation (“Freddie Mac”) under Freddie Mac’s Capital Markets Execution (“CME”) Program.

The Company leases its corporate office space with monthly rental payments approximating $20,000. The lease expires March 7, 2019.

Per the terms of the Services Agreement, the Company is obligated to: (i) pay TREIT a monthly base services fee of one-twelfth of 0.5% of the Company’s Equity (as defined in the Services Agreement), as adjusted to account for Equity Offerings (as defined in the Services Agreement), (ii) provide TREIT with office space and certain office related services (as provided in the Services Agreement and subject to a cost sharing agreement between the Company and TREIT); and (iii) pay a quarterly incentive fee, if earned, equal to the lesser of (a) 15% of the Company’s AFFO Plus Gain/(Loss) on Sale (as defined in the Services Agreement) and (b) the amount by which the Company’s AFFO Plus Gain /(Loss) on Sale exceeds an amount equal to Adjusted Equity multiplied by the Hurdle Rate (as defined in the Services Agreement) (see Note 8 to the Condensed Consolidated Financial Statements). On November 9, 2011, we entered into an amendment to the Services Agreement which clarified the basis upon which the Company calculates the quarterly incentive fee. On June 30, 2012, TREIT and Tiptree Capital became indirect subsidiaries of Tiptree. The Services Agreement remains in full effect following the closing of such transaction.

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Equity

As of June 30, 2012, we had 10,215,551 shares of common stock and no shares of preferred stock outstanding.

On March 30, 2012, the Company issued 49,573 common shares to TREIT in conjunction with its quarterly incentive fee due under the Services Agreement for the fourth quarter of 2011. These shares were issued under the Manager Equity Plan, which was adopted in June 2007 (the “Manager Equity Plan”).

During 2012, we issued 4,428 shares of common stock with a combined aggregate fair value of approximately $30,000 to our independent directors as part of their annual retainer for 2012 and 2011. The shares paid to our directors were issued under the equity plan, which was adopted in June 2007 (the “Equity Plan”). Each independent director receives an annual base retainer of $50,000, payable quarterly in arrears, of which 70% is paid in cash and 30% in shares of Care common stock. Shares granted as part of the annual retainer vest immediately and are included in general and administrative expense.

Tiptree owns a warrant (the “2008 Warrant”) to purchase 652,500 shares of our common stock at a price of $11.33 per share. The 2008 Warrant is immediately exercisable and expires on September 30, 2018.

In December 2011, we granted 100,153 restricted stock units (“RSUs”) to certain officers and employees at a grant date fair value of approximately $0.7 million.

In conjunction with the resignation of our former chief financial officer, effective June 23, 2012, 30,769 restricted stock units were forfeited that were previously granted during his employment. Those units are available for future issuance under the Equity Plan. In addition, on June 25, 2012, the Company repurchased from our former chief financial officer 10,000 shares of our common stock at fair market value of $7.15 per common share. The repurchased shares are available for future issuance.

As of June 30, 2012, 200,904 common shares remain available for future issuances under the Equity Plan and 134,629 shares (which is net of 652,500 shares that are reserved for potential issuance upon conversion of the 2008 Warrant) remain available for future issuances under the Manager Equity Plan.

Distributions

We are required to distribute 90% of our REIT taxable income (excluding the deduction for dividends paid and capital gains) on an annual basis in order to qualify as a REIT for federal income tax purposes. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly distributions to holders of our common stock and, when applicable, dividend equivalent payments to holders of RSUs. All such distributions are authorized at the discretion of our board of directors. We consider market factors and our performance in addition to REIT requirements in determining distribution levels.

On April 3, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the quarter ended on December 31, 2011, which was paid to stockholders of record at the close of business on April 17, 2012. For tax purposes, this will be treated as a 2012 distribution.

On May 10, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the quarter ended on March 31, 2012, which was paid to stockholders of record at the close of business on May 24, 2012.

On August 9, 2012, the Company declared a cash dividend of $0.135 per share of common stock with respect to the second quarter of 2012 which will be paid on September 6, 2012 to stockholders of record as of August 23, 2012.

Our ability to make future distributions depends upon a number of factors, including our future earnings. We may be unable to maintain our current rate of distributions and future distributions may be suspended or paid at a lesser rate than the distributions we now pay.

Current Market Conditions

The U.S. economy is still experiencing weakness from the recent economic conditions, which resulted in increased unemployment, weakening of tenant financial condition, large-scale business failures and tight credit markets. Our results of operations may be sensitive to changes in overall economic conditions that impact tenant leasing practices. Adverse economic conditions affecting tenant income, such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs and other matters, could reduce overall tenant leasing or cause tenants to shift their leasing practices. In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, could result in a general decline in rents or an increased incidence of defaults under existing leases. Recently, high levels of unemployment have persisted, and rental rates and valuations have not fully recovered to pre-recession levels and may not for a number of years. Furthermore, the uncertainty surrounding the rapidly increasing national debt of the U.S. and continuing global economic malaise have kept markets volatile. These unstable conditions could continue for a prolonged period of time. It is difficult to determine the breadth and duration of the financial market problems and the many ways in which they may affect our tenants and our business in general. A significant additional deterioration in the U.S. economy or the bankruptcy or insolvency of one or more of our significant tenants could cause our current plans to meet any projected cash obligations to be insufficient.

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Contractual Obligations

The table below summarizes our contractual obligations as of June 30, 2012 (amounts in millions):

Payments due by Period

Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Mortgage notes payable and related interest	$	112.3	$	3.7	$	96.4	$	2.0	$	10.2
Base service fee obligations(1)		0.7		0.2		0.5		—		—
Operating lease obligations(2)		1.6		0.2		0.6		0.4		0.4
Total	$	114.6	$	4.1	$	97.5	$	2.4	$	10.6

(1) TREIT base service fee, subject to increase or decrease based on changes in shareholders’ equity. The termination fee payable to TREIT in the event of non-renewal of the Services Agreement by the Company is not fixed and determinable and is therefore not included in the table.

(2) Minimum rental obligations for Company office lease.

On November 4, 2010, the Company entered into the Services Agreement with TREIT pursuant to which TREIT will provide certain advisory services related to the Company’s business. For such services, the Company will pay TREIT a monthly base services fee in arrears of one-twelfth of 0.5% of the Company’s Equity (as defined in the Services Agreement). The initial term of the Services Agreement shall expire on December 31, 2013 and will renew automatically each year thereafter for an additional one-year period unless the Company or TREIT elects not to renew.

For a discussion of our debt, see “Liquidity and Capital Resources — Debt.”

Acquisitions and Dispositions

Management continually monitors potential investment and expansion opportunities. Our focus is on potential acquisitions in the senior housing industry that provide attractive risk adjusted returns. Our overall strategy is to identify strong and experienced regional operators of assisted living, independent living and memory care facilities who are looking to expand and diversify their operations by entering into strategic relationships with capital partners. We believe that by entering into such relationships, we will not only generate attractive current returns for our stockholders, but create a forward pipeline of additional opportunities as well. While cap rates for larger portfolios have compressed during the past few years, thereby increasing the cost of acquisitions, we continue to see opportunities to acquire small portfolios of three (3) to ten (10) properties at attractive yields.

As of June 30, 2012, the Company did not have any definitive purchase and sale obligations with regard to any real estate transactions. The Company regularly evaluates potential real estate acquisitions and dispositions. While current and projected returns for a subject property significantly influence the decision making process, other items, such as the impact on the geographic diversity of the Company’s portfolio, the type of property, the Company’s experience with and the overall reputation of the property operator and the availability of mortgage financing are also taken into consideration. Applicable capitalization rates for such acquisitions vary depending on a number of factors including, but not limited to, the type of facility, its location, competition and barriers to entry in the particular marketplace, age and physical condition of the facility, status and experience of the property operator and the existence or availability of mortgage financing. The property net operating income for prospective acquisitions is generally based upon the earnings before interest, taxes, depreciation or amortization, or EBITDA, for such property adjusted for market vacancy and property management fees as well as applicable maintenance, operating and tax reserves.

Impact of Inflation

Inflation may affect us in the future by changing the underlying value of our real estate or by impacting our cost of financing our operations. Our revenues are generated primarily from long-term investments. Inflation has remained relatively low during recent periods. There can be no assurance that future Medicare, Medicaid or private pay rate increases will be sufficient to offset future inflation increases. Certain of our leases require increases in rental income based upon annual rent escalation clauses.

Off-Balance Sheet Arrangements

As of June 30, 2012, we maintain an interest in one (1) unconsolidated joint venture. See Note 5 to our consolidated financial statements for more information regarding our interest in the unconsolidated joint venture. Our risk of loss associated with this investment is limited to our investment in this joint venture. We have no material off-balance sheet arrangements as of June 30, 2012.

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Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). The amendments in ASU 2011-04 change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments are intended to create comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material effect on the condensed consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”), which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. This ASU does not change the items that must be reported in other comprehensive income. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011. As we have no other comprehensive income, the adoption of this standard did not have any effect on the condensed consolidated financial statements.

Related Party Transactions

We have relationships with certain of our affiliates and other related parties whereby those persons or entities receive income from us, including the following:

• On November 4, 2010, the Company entered into a Services Agreement with TREIT pursuant to which TREIT provides certain advisory services related to the Company’s business. On November 9, 2011, we entered into an amendment to the Services Agreement that clarified the basis upon which the Company calculates the quarterly incentive fee.

• Tiptree owns the 2008 Warrant to purchase 652,500 shares of our common stock at a price of $11.33 per share. The 2008 Warrant is immediately exercisable and expires in September 30, 2018.

Non-GAAP Financial Measures

Funds from Operations

Funds From Operations, or FFO, which is a non-GAAP financial measure, is a widely recognized measure of REIT performance. We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently.

The revised White Paper on FFO, approved by the Board of Governors of NAREIT in April 2002, defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis.

Adjusted Funds from Operations

Adjusted Funds From Operations, or AFFO, is a non-GAAP financial measure. We calculate AFFO as net income (loss) (computed in accordance with GAAP), excluding gains (losses) from debt restructuring and gains (losses) from sales of property, the effects of straight lining lease revenue, plus the expenses associated with depreciation and amortization on real estate assets, certain expenses associated with real estate acquisitions, non-cash equity compensation expenses, and excess cash distributions from the Company’s equity method investments and one-time events pursuant to changes in GAAP and other non-cash charges. Proportionate adjustments for unconsolidated partnerships and joint ventures will also be taken when calculating the Company’s AFFO.

We believe that FFO and AFFO provide additional measures of our core operating performance by eliminating the impact of certain non-cash and capitalized expenses and facilitating a comparison of our financial results to those of other comparable REITs with fewer or no non-cash charges and comparison of our own operating results from period to period. The Company uses FFO and AFFO in this way and also uses AFFO as one performance metric in the Company’s executive compensation program as well as a variation of AFFO in calculating the Incentive Fee payable to its advisor, TREIT (as adjusted pursuant to the Services Agreement). Additionally, the Company believes that its investors also use FFO and AFFO to evaluate and compare the performance of the Company and its peers, and as such, the Company believes that the disclosure of FFO and AFFO is useful to (and expected by) its investors.

However, the Company cautions that neither FFO nor AFFO represent cash generated from operating activities in accordance with GAAP and they should not be considered as an alternative to net income (determined in accordance with GAAP), or an indication of our cash flow from operating activities (determined in accordance with GAAP), as a measure of our liquidity, or an indication of funds available to fund our cash needs, including our ability to make cash distributions. In addition, our methodology for calculating FFO and/or AFFO may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and accordingly, our reported FFO and/or AFFO may not be comparable to the FFO and AFFO reported by other REITs.

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The following is a reconciliation of FFO and AFFO to net income (loss), which is the most directly comparable GAAP performance measure, for the three and six month periods ended June 30, 2012 and 2011, respectively (in thousands, except share and per share data):

	For the three months ended June 30, 2012						For the six months ended June 30, 2012
	FFO			AFFO			FFO		AFFO
Net income (loss)	$	(239	)	$	(239	)	$	55	$	55
Add:
Depreciation and amortization from partially-owned entities		—			—			—		—
Depreciation and amortization on owned properties		975			975			1,943		1,943
Stock-based compensation		—			36			—		105
Amortization of above-market leases		—			52			—		104
Amortization of deferred financing costs		—			67			—		134
Transaction costs		—			233			—		233
Other non-cash		—			—			—		79
Stock issued to related parties		—			—			—		—
Straight-line effect of lease revenue		—			(399	)		—		(799	)
Excess cash distributions from the Company’s equity method investments		—			—			—		—
Change in the obligation to issue OP Units		—			—			—		—
Unrealized loss on derivative instruments		—			420			—		—
Funds From Operations and Adjusted Funds From Operations	$	736		$	1,145			1,998	$	1,854
FFO and Adjusted FFO per share basic	$	0.07		$	0.11		$	0.20	$	0.18
FFO and Adjusted FFO per share diluted	$	0.07		$	0.11		$	0.20	$	0.18
Weighted average shares outstanding — basic (1)		10,224,845			10,224,845			10,200,141		10,200,141
Weighted average shares outstanding — diluted (1) (2)		10,239,979			10,239,979			10,214,265		10,214,265

(1) The diluted FFO and AFFO per share calculations exclude the dilutive effect of the 2008 Warrant convertible into 652,500 common shares for the three and six month periods ended June 30, 2012, respectively, because the exercise price was more than the average market price for each of those periods.

(2) The diluted FFO and AFFO per share calculations include the dilutive effect of 69,384 remaining unvested restricted stock units which were granted to certain officers and employees on December 30, 2011.

31

	For the three months ended June 30, 2011					For the six months ended June 30, 2011
	FFO		AFFO			FFO			AFFO
Net income (loss)	$	1,067	$	1,067		$	(46	)	$	(46	)
Add:
Depreciation and amortization from partially-owned entities		—		—			2,601			2,601
Depreciation and amortization on owned properties		854		854			1,708			1.708
Stock-based compensation		—		—			—			30
Amortization of above-market leases		—		52			—			104
Amortization of deferred financing costs		—		—			—			—
Transaction costs		—		—			—			—
Other non-cash		—		—			—			—
Stock issued to related parties		—		61			—			61
Straight-line effect of lease revenue		—		(594	)		—			(1,188	)
Excess cash distributions from the Company’s equity method investments		—		—			—			1
Change in the obligation to issue OP Units		—		—			—			255
Unrealized loss on derivative instruments		—		—			—			—
Funds From Operations and Adjusted Funds From Operations	$	1,921	$	1,440		$	4,263		$	3,526
FFO and Adjusted FFO per share basic	$	0.19	$	0.14		$	0.42		$	0.35
FFO and Adjusted FFO per share diluted	$	0.19	$	0.14		$	0.42		$	0.35
Weighted average shares outstanding — basic (1)(2)		10,149,562		10,149,562			10,145,018			10,145,018
Weighted average shares outstanding — diluted (1)(2)		10,167,272		10,167,272			10,153,922			10,153,922

(1) The diluted FFO and AFFO per share calculations exclude the dilutive effect of the 2008 Warrant convertible into 652,500 common shares for the three and six month periods ended June 30, 2012 and 2011, respectively, because the exercise price was more than the average market price for each of those periods. The diluted FFO and AFFO per share calculations include the dilutive effect of the Warrant issued pursuant to the Omnibus Agreement because the average market price was more than the exercise price (see Note 5 to the Condensed Consolidated Financial Statements) convertible into 300,000 common shares for the three month period ended June 30, 2011.

(2) For 2011, does not include original operating partnership units issued to Cambridge that were held in escrow and were reduced and restructured in conjunction with the Omnibus Agreement (see Note 5 to the Condensed Consolidated Financial Statements).

32

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

ITEM 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosures. Notwithstanding the foregoing, no matter how well a control system is designed and operated, it can provide only reasonable, not absolute, assurance that it will detect or uncover failures within our Company to disclose material information otherwise required to be set forth in our periodic reports.

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

In connection with the resignation of Steven M. Sherwyn, the Company’s former Chief Financial Officer and Treasurer, which resignation was effective on June 23, 2012, the Company’s Board of Directors appointed Joseph B. Sacks, as Principal Accounting Officer of the Company and Salvatore (Torey) V. Riso, Jr., as Principal Financial Officer of the Company, in each case, Mr. Sacks and Mr. Riso will serve in these positions until a Chief Financial Officer has been identified to replace Mr. Sherwyn.

Except as described above, there has been no change in our internal control over financial reporting during the three months ended June 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

33

Part II. Other Information

Item 1. Legal Proceedings.

Care is not presently involved in any material litigation or, to our knowledge, is any material litigation threatened against us or our investments, other than routine litigation arising in the ordinary course of business. Management believes the costs, if any, incurred by us related to litigation will not materially affect our financial position, operating results or liquidity.

Item 1A. Risk Factors.

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On June 25, 2012 pursuant to a stock repurchase agreement (the “Repurchase Agreement”) by and between the Company and Steven M. Sherwyn, the Company’s former Chief Financial Officer, the Company repurchased 10,000 shares of its common stock owned by Mr. Sherwyn at a purchase price of $7.15 per share.

Issuer Purchases of Equity Securities

Period	(a) Total Number of Shares  Purchased			(b) Average Price Paid per Share		(c) Total Number of Shares  Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number of Shares that May Yet be Purchased Under the Plan
April 1, 2012 – April 30, 2012		—			—		—		—
May 1, 2012 – May 31, 2012		—			—		—		—
June 1, 2102 – June 30, 2012		10,000	(1)	$	7.15		—		—
Total		10,000		$	7.15		—		—

⁽¹⁾  The shares were purchased pursuant to the Repurchase Agreement, which was not a publicly announced plan or program. Pursuant to the Repurchase Agreement, the shares were purchased at the price equal to the closing trading price of the Company’s common stock on the OTCQX US, on the day immediately preceding the Closing Date as defined in the Repurchase Agreement.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

34

ITEM 6. Exhibits

(a) Exhibits

3.1	Third Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on September 3, 2010 and herein incorporated by reference).
3.2	Third Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on November 8, 2010 and herein incorporated by reference).
4.1	Form of Certificate for Common Stock (previously filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference).
10.1	Senior Housing Loan and Security Agreement by and between Care GSL Stafford LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.2	Multifamily Note by Care GSL Stafford LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.2 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.3	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Stafford Loan, dated as of April 24, 2012 (previously filed as Exhibit 10.3 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.4	Senior Housing Loan and Security Agreement by and between Care GSL Fredericksburg LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.4 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.5	Multifamily Note by Care GSL Fredericksburg LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.5 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference)
10.6	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Fredericksburg Loan, dated as of April 24, 2012 (previously filed as Exhibit10.6 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.7	Senior Housing Loan and Security Agreement by and between Care GSL Berryville LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.7 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference)
10.8	Multifamily Note by Care GSL Berryville LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.8 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference)
10.9	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Berryville Loan, dated as of April 24, 2012 (previously filed as Exhibit 10.9 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference)
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*

35

101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

* Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at June 30, 2012 (unaudited) and December 31, 2011, (ii) the Condensed Consolidated Statements of Operations (unaudited) for the three and six month periods ended June 30, 2012 and 2011, (iii) the Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the six month period ended June 30, 2012, (iv) the Condensed Consolidated Statements of Cash Flows (unaudited) for the six month periods ended June 30, 2012 and 2011 and (v) the Notes to the Condensed Consolidated Financial Statements (unaudited).

Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CARE INVESTMENT TRUST INC.
Date: August 10, 2012	By:	/s/ Salvatore (Torey) V. Riso, Jr.
		Salvatore (Torey) V. Riso, Jr.
		President, Chief Executive Officer and Principal Financial Officer
Date: August 10, 2012	By:	/s/ Joseph B. Sacks
		Joseph B. Sacks
		Principal Accounting Officer and Controller

37

EXHIBIT INDEX

Exhibit No.	Description
3.1	Third Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on September 3, 2010 and herein incorporated by reference).
3.2	Third Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on November 8, 2010 and herein incorporated by reference).
4.1	Form of Certificate for Common Stock (previously filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference).
10.1	Senior Housing Loan and Security Agreement by and between Care GSL Stafford LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.2	Multifamily Note by Care GSL Stafford LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.2 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.3	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Stafford Loan, dated as of April 24, 2012 (previously filed as Exhibit 10.3 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.4	Senior Housing Loan and Security Agreement by and between Care GSL Fredericksburg LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.4 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.5	Multifamily Note by Care GSL Fredericksburg LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.5 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference)
10.6	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Fredericksburg Loan, dated as of April 24, 2012 (previously filed as Exhibit10.6 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference) .
10.7	Senior Housing Loan and Security Agreement by and between Care GSL Berryville LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.7 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference)
10.8	Multifamily Note by Care GSL Berryville LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (previously filed as Exhibit 10.8 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference)
10.9	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Berryville Loan, dated as of April 24, 2012 (previously filed as Exhibit 10.9 to the Registrant’s Form 10-Q for the quarter ended March 31, 2012 and herein incorporated by reference)
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*

38

101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

* Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at June 30, 2012 (unaudited) and December 31, 2011, (ii) the Condensed Consolidated Statements of Operations (unaudited) for the three and six month periods ended June 30, 2012 and 2011, (iii) the Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the six month period ended June 30, 2012, (iv) the Condensed Consolidated Statements of Cash Flows (unaudited) for the six month periods ended June 30, 2012 and 2011 and (v) the Notes to the Condensed Consolidated Financial Statements (unaudited).

Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

39

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Salvatore (Torey) V. Riso, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Care Investment Trust Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 10, 2012	/s/ Salvatore (Torey) V. Riso, Jr.
	Salvatore (Torey) V. Riso, Jr.
	Chief Executive Officer and Principal Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Care Investment Trust Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Salvatore (Torey) V. Riso, Jr., the Chief Executive Officer and Principal Financial Officer of the Company, certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that;

(i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Salvatore (Torey) V. Riso, Jr.

Salvatore (Torey) V. Riso, Jr.

Chief Executive Officer and Principal Financial Officer

Date: August 10, 2012

XML

Identified Intangible Assets - leases in-place, net (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Company's identified intangible assets
Leases in-place - including above market leases of $2.7	$ 7,700,000	$ 7,700,000
Accumulated amortization	(1,100,000)	(800,000)
Total	$ 6,616,000	$ 6,939,000

XML

Income (Loss) per Share (in thousands, except share and per share data) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net income (loss) per share of common stock
Net income (loss) per share, basic	$ (0.03)	$ 0.11	$ 0.00	$ 0.00
Net income (loss) per share, diluted	$ (0.03)	$ 0.10	$ 0.00	$ 0.00
Numerator:
Net income (loss)	$ (239)	$ 1,067	$ 55	$ (46)
Less: Allocation to participating securities	(27)		(27)
Net income (loss) allocated to common stockholders, basic and diluted	$ (266)	$ 1,067	$ 28	$ (46)
Denominator:
Weighted average common shares outstanding, basic	10,224,845	10,149,562	10,200,141	10,145,018
Shares underlying RSU Grants			14,124
Shares underlying the Cambridge warrant		17,710
Weighted average common shares outstanding, diluted	10,224,845	10,167,272	10,214,265	10,145,018

XML

Fair Value Measurements (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012 Source	Mar. 31, 2012	Jun. 30, 2011	Dec. 31, 2011 Source	Sep. 20, 2011	Apr. 15, 2011 Unit
Fair Value Measurements (Additional Textual) [Abstract]
Discount factor						21.00%
Reduction of Operating Partnership Units						200,000
Dividend rate and discount factor						12.00%
Number of independent sources for market quotes	2			2
Unrealized gain (loss) on derivative instruments	$ (420,000)	$ 400,000	$ (255,000)
U.S. Treasury Note maturity date		Nov. 15, 2021
Closing date of bridge Loan used to finance the Greenfield acquisition					Sep. 20, 2011
Fair value of mortgage notes payable	83,100,000			84,800,000
Combined fair value of greenfield loans			15,300,000
10-Year U.S. Treasury Note (short sale) [Member] | U S Treasury Notes Securities [Member]
Fair Value Measurements (Textual) [Abstract]
Unrealized gain realized	$ 100,000

XML

Investments in Real Estate (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Greenfield real estate assets
Land	$ 10,620	$ 10,620
Buildings and improvements	116,222	116,222
Less: accumulated depreciation and amortization	(6,263)	(4,540)
Total real estate, net	120,579	122,302
Greenfield real estate assets [Member]
Greenfield real estate assets
Land	5,600	5,600
Buildings and improvements	14,200	14,200
Less: accumulated depreciation and amortization	(300)	(100)
Total real estate, net	$ 19,500	$ 19,700

XML

Identified Intangible Assets - leases in-place, net (Tables)

6 Months Ended

Jun. 30, 2012

Identified Intangible Assets - leases in-place, net [Abstract]

Company's identified intangible assets

	June 30, 2012		December 31, 2011
Leases in-place — including above market leases of $2.7	$	7.7	$	7.7
Accumulated amortization		(1.1)		(0.8)
Total	$	6.6	$	6.9

XML

Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012
Contractual obligations
Contractual Obligations, 2012	$ 4.1
Contractual Obligations, 2013	8.2
Contractual Obligations, 2014	7.7
Contractual Obligations, 2015	81.6
Contractual Obligations, 2016	1.2
Contractual Obligations, 2017	1.2
Contractual Obligations, Thereafter	10.6
Contractual Obligations, Total	114.6
Mortgage notes payable and related interest [Member]
Contractual obligations
Contractual Obligations, 2012	3.7
Contractual Obligations, 2013	7.5
Contractual Obligations, 2014	7.5
Contractual Obligations, 2015	81.4
Contractual Obligations, 2016	1.0
Contractual Obligations, 2017	1.0
Contractual Obligations, Thereafter	10.2
Contractual Obligations, Total	112.3
Base Service Fee Obligations [Member]
Contractual obligations
Contractual Obligations, 2012	0.2
Contractual Obligations, 2013	0.5
Contractual Obligations, Total	0.7
Operating Lease Obligations [Member]
Contractual obligations
Contractual Obligations, 2012	0.2
Contractual Obligations, 2013	0.2
Contractual Obligations, 2014	0.2
Contractual Obligations, 2015	0.2
Contractual Obligations, 2016	0.2
Contractual Obligations, 2017	0.2
Contractual Obligations, Thereafter	0.4
Contractual Obligations, Total	$ 1.6

XML

Borrowings under Mortgage Notes Payable (Details Textual) (USD $)	3 Months Ended	6 Months Ended	1 Months Ended	6 Months Ended		1 Months Ended	6 Months Ended		6 Months Ended		6 Months Ended
	Mar. 31, 2012	Jun. 30, 2012	Jun. 30, 2008 June Bickford Loan [Member]	Jun. 30, 2012 June Bickford Loan [Member]	Jun. 26, 2008 June Bickford Loan [Member]	Sep. 30, 2008 Bickford Loans [Member]	Jun. 30, 2012 Bickford Loans [Member]	Aug. 13, 2010 Bickford Loans [Member]	Jun. 30, 2012 Bridge Loan [Member]	Sep. 20, 2011 Bridge Loan [Member]	Jun. 30, 2012 Greenfield Loans [Member]	Feb. 01, 2012 Greenfield Loans [Member]
Borrowings under Mortgage Notes Payable (Textual) [Abstract]
Periodic payment, principal and interest			$ 500,000			$ 52,000
Maturity period of mortgage loan				Jul. 01, 2015			Jul. 01, 2015
Outstanding balance								81,300,000
Outstanding balance due and payable					69,600,000	7,100,000
Effective yield							6.88%
Bridge loan amount										15,500,000
Libor plus Interest rate on the loan									4.00%
Libor floor rate									0.00%
Non-recourse loans											15,700,000
U.S. Treasury Note maturity period		10 years
Maturity date of loan		Nov. 01, 2016							Jun. 20, 2012		May 01, 2022
Fixed rate of interest on loans											4.76%
Amortization period of loans											30 years
Fair value of mortgage capital								82,100,000
Increase in fair value of mortgage loans								800,000
Short sale												15,500,000
Treasury note stated percentage											2.00%
U.S. Treasury Note maturity date	Nov. 15, 2021										Nov. 15, 2021
Net gain											$ 100,000

XML

Investments in Partially Owned Entities (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Cambridge Medical Office Building Portfolio [Member]
Summary of financial information
Revenue		$ 6.4		$ 12.7
Expenses		7.9		15.4
Net loss before preferred distribution		(1.5)		(2.8)
Net loss after preferred distribution		(2.9)		(4.2)
Senior Management Concepts Senior Living Portfolio [Member]
Summary of financial information
Assets	11.0		11.0		11.1
Liabilities	14.7		14.7		14.6
Equity	(3.7)		(3.7)		(3.5)
Revenue	0.9	0.9	1.7	1.8
Expenses	0.9	0.9	1.8	1.8
Net loss from discontinued operations
Net income (loss)			$ (0.1)

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Subsequent Events (Details) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended				3 Months Ended		6 Months Ended
	Aug. 31, 2012	Jul. 31, 2012	May 31, 2012	Apr. 30, 2012	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Subsequent Events (Textual) [Abstract]
Stock based compensation to directors for services, shares		2,144
Stock-based compensation to directors for services		$ 15					$ 30
Dividends declared date			May 10, 2012	Apr. 03, 2012			Aug. 09, 2012
Dividends declared per common share	$ 0.135		$ 0.135	$ 0.135	$ 0.270	$ 0.135	$ 0.270	$ 0.135
Dividends paid date			Jun. 07, 2012	May 01, 2012			Sep. 06, 2012
Dividends paid, date of record			Apr. 24, 2012	Apr. 17, 2012			Aug. 23, 2012

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Stockholders' Equity (Details) (USD $)	1 Months Ended				3 Months Ended		6 Months Ended				1 Months Ended	6 Months Ended			6 Months Ended
	Aug. 31, 2012	Jul. 31, 2012	May 31, 2012	Apr. 30, 2012	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jun. 25, 2012	Dec. 31, 2011	Dec. 31, 2011 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2012 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2012 Equity Plan [Member]	Jun. 30, 2011 Equity Plan [Member]	Jun. 30, 2012 Manager Equity Plan [Member]	Mar. 30, 2012 Manager Equity Plan [Member]
Stockholders' Equity (Textual) [Abstract]
Common stock issued					10,215,551		10,215,551			10,215,551
Warrant to purchase shares					652,500	652,500	652,500	652,500		652,500					652,500
Common stock, par value					$ 0.001		$ 0.001			$ 0.001
Common stock, conversion rate					11.33		11.33			11.33					11.33
Expiration date							Sep. 30, 2018								Sep. 30, 2018
Issue of common stock		2,144											4,428
Issuance of stock for related party incentive fee, shares															49,573
Aggregate fair value														$ 30,000		$ 345,000
Annual base retainer amount received													50,000
Common shares remain available for future issuances													200,904		134,629
Percentage of annual base retainer amount paid in cash													70.00%
Percentage of annual base retainer amount paid in shares													30.00%
Granted restricted stock units											100,153
Fair value restricted stock units											$ 700,000
Previously granted restricted stock units forfeited												30,769
Stockholders Equity (Additional Textual) [Abstract]
Authorized preferred stock					100,000,000		100,000,000			100,000,000
Preferred stock, par value					$ 0.001		$ 0.001			$ 0.001
Authorized common stock					250,000,000		250,000,000			250,000,000
Preferred stock issued
Preferred stock outstanding
Common stock outstanding					10,171,550		10,171,550			10,171,550
Dividends declared date			May 10, 2012	Apr. 03, 2012			Aug. 09, 2012
Dividends declared per common share	$ 0.135		$ 0.135	$ 0.135	$ 0.270	$ 0.135	$ 0.270	$ 0.135
Dividends paid date			Jun. 07, 2012	May 01, 2012			Sep. 06, 2012
Dividends paid, date of record			Apr. 24, 2012	Apr. 17, 2012			Aug. 23, 2012
Unvested RSU					27,000
Stock-based compensation					$ 36,000	$ 15,000	$ 105,000	$ 30,000
Common stock repurchased by company							10,000
Fair value of Common stock repurchased by company									$ 7.15

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Organization

6 Months Ended

Jun. 30, 2012

Organization [Abstract]

Organization

Note 1 — Organization

Care Investment Trust Inc. (together with its subsidiaries, the “Company” or “Care” unless otherwise indicated or except where the context otherwise requires, “we”, “us” or “our”) is a real estate investment trust (“REIT”) that invests in healthcare facilities including assisted-living, independent-living, memory care, skilled nursing and other healthcare-related real estate assets in the United States of America (the “U.S.”). The Company, which utilizes a hybrid management structure containing components of both internal and external management, was incorporated in Maryland in March 2007 and completed its initial public offering on June 22, 2007.

On August 13, 2010, Tiptree Financial Partners, L.P. (“Tiptree”) acquired control of the Company (the “Tiptree Transaction”). As part of the Tiptree Transaction, we entered into a hybrid management structure whereby senior management was internalized and we entered into a services agreement with TREIT Management, LLC (“TREIT”) for certain advisory and support services (the “Services Agreement”). TREIT was previously a subsidiary of Tiptree Capital Management, LLC (“Tiptree Capital”), the manager of Tiptree. On June 30, 2012, TREIT and Tiptree Capital became indirect subsidiaries of Tiptree. The Services Agreement remains in full effect following the closing of such transaction.

As of June 30, 2012, Care’s portfolio of assets consisted of senior housing facilities, including assisted living facilities, independent living facilities, and memory care facilities, both wholly-owned and owned through a joint venture, as well as a mortgage loan on skilled nursing facilities, assisted living facilities and a multifamily property. Our wholly-owned senior housing facilities are leased, under “triple-net” leases, which require the tenants to pay all property-related expenses.

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) commencing with our taxable year ended December 31, 2007. To maintain our tax status as a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders. At present, we do not have any taxable REIT subsidiaries (“TRS”), but in the normal course of business we may form such subsidiaries as necessary.

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Related Party Transactions (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Related Party Transactions (Textual) [Abstract]
Monthly base services fee			one-twelfth of 0.5% of company equity
Percentage of adjusted funds from operations			15.00%
Percentage of incentive fee paid in shares			20.00%
Services Agreement, amendment date			Nov. 09, 2011
Services Agreement, termination date			Dec. 31, 2013
Service fees	$ 100,000	$ 100,000	$ 200,000	$ 200,000
Incentive fees payable	0	200,000	0	500,000
Reimbursement for office related services	4,000		8,000
Accrued expenses outstanding	$ 37,000		$ 37,000
Warrant to purchase shares	652,500	652,500	652,500	652,500	652,500
Common stock, conversion rate	11.33		11.33		11.33
Warrant expiration date			Sep. 30, 2018

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

Contractual obligations

Amounts in millions	2012		2013		2014		2015		2016		2017		Thereafter		Total
Mortgage notes payable and related interest	$	3.7	$	7.5	$	7.5	$	81.4	$	1.0	$	1.0	$	10.2	$	112.3
Base Service Fee Obligations (1)		0.2		0.5		—		—		—		—		—		0.7
Operating Lease Obligations (2)		0.2		0.2		0.2		0.2		0.2		0.2		0.4		1.6
Total	$	4.1	$	8.2	$	7.7	$	81.6	$	1.2	$	1.2	$	10.6	$	114.6

(1) TREIT base service fee, subject to increase or decrease based on changes in shareholders’ equity. The termination fee payable to TREIT in the event of non-renewal of the Services Agreement by the Company is not fixed and determinable and is therefore not included in the table.

(2) Minimum rental obligations for Company office lease.

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Income (Loss) per Share (in thousands, except share and per share data) (Tables)

6 Months Ended

Jun. 30, 2012

Income (Loss) per Share (in thousands, except share and per share data) [Abstract]

Income (loss) per share

	Three Months Ended				Six Months Ended
	June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Net income (loss) per share of common stock
Net income (loss) per share, basic	$	(0.03)	$	0.11	$	0.00	$	(0.00)
Net income (loss) per share, diluted	$	(0.03)	$	0.10	$	0.00	$	(0.00)
Numerator:
Net income (loss)	$	(239)	$	1,067	$	55	$	(46)
Less: Allocation to participating securities		(27)		—		(27)		—
Net income (loss) allocated to common stockholders, basic and diluted	$	(266)	$	1,067	$	28	$	(46)
Denominator:
Weighted average common shares outstanding, basic		10,224,845		10,149,562		10,200,141		10,145,018
Shares underlying RSU grants		—		—		14,124		—
Shares underlying the Cambridge warrant		—		17,710		—		—
Weighted average common shares outstanding, diluted		10,224,845		10,167,272		10,214,265		10,145,018

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Fair Value Measurements (Details) (Obligation to Issue Partnership Units [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Obligation to Issue Partnership Units [Member]
Reconciliations of assets and liabilities measured at fair value on recurring basis using significant Level 3 inputs
Balance, December 31, 2010	$ (2.1)
Modification of OP Units (offset against investment)	1.9
Net change in unrealized loss from obligations	(0.3)
Balance, June 30, 2011	$ (0.5)

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Organization (Details)	Jun. 30, 2012
Organization (Textual) [Abstract]
Percentage of REIT taxable income distributed to stockholders	90.00%

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Basis of Presentation and Significant Accounting Policies (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012 Loan	Jun. 30, 2011	Jun. 30, 2012 Loan	Jun. 30, 2011	Dec. 31, 2011 Loan
Basis of Presentation and Significant Accounting Policies (Additional Textual) [Abstract]
Original maturity period of investments			three months or less		three months or less
Liquid investments with original maturities	$ 48.0		$ 48.0		$ 52.3
Impairments of wholly-owned real estate investments and intangible assets
Impairment on investments in partially-owned entities				0.1
Percentage of REIT taxable income distributed to stockholders	90.00%		90.00%
Net operating losses carryforward, maximum period			20 years
Duration for which the loans will be in non accrual status			90 days
Loans on non-accrual status	$ 0		$ 0		$ 0
Period for non qualification as real estate investment trust			P4Y
Number of remaining loan that was a part of larger credit facility	1		1		1
Maximum [Member]
Basis of Presentation and Significant Accounting Policies (Textual) [Abstract]
Estimated useful lives of assets			40 years
Minimum [Member]
Basis of Presentation and Significant Accounting Policies (Textual) [Abstract]
Estimated useful lives of assets			9 years

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash Flow From Operating Activities
Net income (loss)	$ 55	$ (46)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities
Increase in deferred rent receivable	(799)	(1,189)
Income from investments in partially-owned entities, net	(162)	(771)
Distribution of income from partially-owned entities	162	2,763
Impairment of investments		77
Amortization of above-market leases	104	104
Amortization of deferred financing costs	134
Amortization of mortgage note premium	(74)	(74)
Stock-based compensation	105	30
Non-cash incentive fee		96
Depreciation and amortization on real estate and fixed assets, including intangible assets	1,976	1,736
Gain on derivative instruments	(86)
Unrealized loss on derivative instruments		255
Changes in operating assets and liabilities:
Other assets	(71)	489
Accounts payable and accrued expenses	(891)	(10)
Other liabilities including payable to related parties	(1,345)	(261)
Net cash (used in) provided by operating activities	(892)	3,199
Cash Flow From Investing Activities
Fixed asset purchases	(23)	(228)
Proceeds from derivative transactions	86
Proceeds from loan repayments	173	1,582
Return of investment in partially-owned entities		6,093
Net cash provided by investing activities	236	7,447
Cash Flow From Financing Activities
Principal payments under mortgage notes payable	(15,805)	(369)
Borrowings under mortgage notes payable	15,680
Financing costs	(625)
Repurchases of common stock	(72)
Dividends paid	(2,788)	(1,371)
Net cash used in financing activities	(3,610)	(1,740)
Net increase (decrease) in cash and cash equivalents	(4,266)	8,906
Cash and cash equivalents, beginning of period	52,306	5,032
Cash and cash equivalents, end of period	48,040	13,938
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	3,139	1,419
Cash paid for taxes	227
Non-cash financing and investing activities
Warrant issued		222
Modification of operating partnership units		(1,870)
Stock-based payments to related parties	375
Accrued expenses for financing costs	$ 53

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Investments in Real Estate (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Bickford real estate assets
Land	$ 10,620	$ 10,620
Buildings and improvements	116,222	116,222
Less: accumulated depreciation and amortization	(6,263)	(4,540)
Total real estate, net	120,579	122,302
Bickford real estate assets [Member]
Bickford real estate assets
Land	5,000	5,000
Buildings and improvements	102,000	102,000
Less: accumulated depreciation and amortization	(5,900)	(4,400)
Total real estate, net	$ 101,100	$ 102,600

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Identified Intangible Assets - leases in-place, net (Details Textual) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Identified Intangible Assets - leases in-place, net (Textual) [Abstract]
Above market leases	$ 2.7	$ 2.7
Amortization expense, year one	0.4
Amortization expense, year two	0.4
Amortization expense, year three	0.4
Amortization expense, year four	0.4
Amortization expense, year five	0.4
Amortization of above market leases next twelve months	0.2
Amortization of above market leases year two	0.2
Amortization of above market leases year three	0.2
Amortization of above market leases year four	0.2
Amortization of above market leases year five	$ 0.2

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Real estate:
Land	$ 10,620	$ 10,620
Buildings and improvements	116,222	116,222
Less: accumulated depreciation and amortization	(6,263)	(4,540)
Total real estate, net	120,579	122,302
Investment in loans	5,593	5,766
Investments in partially-owned entities	2,491	2,491
Identified intangible assets - leases in place, net	6,616	6,939
Cash and cash equivalents	48,040	52,306
Other assets	5,752	4,412
Total Assets	189,071	194,216
Liabilities:
Mortgage notes payable	95,880	96,079
Accounts payable and accrued expenses	1,268	2,170
Accrued expenses payable to related party	89	1,794
Other liabilities	609	593
Total Liabilities	97,846	100,636
Commitments and Contingencies
Stockholders' Equity
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding
Common stock: $0.001 par value, 250,000,000 shares authorized 10,215,551 and 10,171,550 shares issued and outstanding, respectively	11	11
Additional paid-in capital	83,993	83,615
Retained earnings	7,221	9,954
Total Stockholders' Equity	91,225	93,580
Total Liabilities and Stockholders' Equity	$ 189,071	$ 194,216

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Fair Value Measurements (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2012 Not Designated as Hedging Instrument [Member] Cambridge Medical Office Building Portfolio [Member] 10-Year U.S. Treasury Note (short sale) [Member] Unrealized loss on derivative instruments [Member]	Jun. 30, 2012 Not Designated as Hedging Instrument [Member] Cambridge Medical Office Building Portfolio [Member] 10-Year U.S. Treasury Note (short sale) [Member] Realized gain on derivative instruments [Member]	Jun. 30, 2012 Not Designated as Hedging Instrument [Member] Cambridge Medical Office Building Portfolio [Member] 10-Year U.S. Treasury Note (short sale) [Member] Realized gain on derivative instruments [Member]	Jun. 30, 2011 Not Designated as Hedging Instrument [Member] Cambridge Medical Office Building Portfolio [Member] Operating Partnership Units [Member] Unrealized loss on derivative instruments [Member]
Amount of Gain (Loss) Recognized in Income on Derivatives
Amount of Gain (Loss) Recognized in Income on Derivative	$ 86	$ 86	$ (400)	$ 100	$ 100	$ (300)

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Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (USD $) In Thousands, except Share data	Total	Common Stock		Additional Paid-in Capital	Retained Earnings
Balance at Dec. 31, 2011	$ 93,580	$ 11		$ 83,615	$ 9,954
Balance, shares at Dec. 31, 2011		10,171,550
Stock-based compensation to directors for services	30		[1]	30
Stock based compensation to directors for services, shares		4,428
Stock-based compensation to employees	75			75
Issuance of stock for related party incentive fee, shares		49,573
Issuance of stock for related party incentive fee	345		[1]	345
Dividends	(2,788)				(2,788)
Repurchased shares	(72)			(72)
Repurchased shares, shares	(10,000)	(10,000)
Net income	55				55
Balance at Jun. 30, 2012	$ 91,225	$ 11		$ 83,993	$ 7,221
Balance, shares at Jun. 30, 2012		10,215,551

[1] Less than $500

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Investments in Loans (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2012 Property	Dec. 31, 2011	Nov. 01, 2011
Investments in Loans (Additional Textual) [Abstract]
Loan secured by properties	10
Maturity term, revised loan	5 years
Maturity date of loan	Nov. 01, 2016
Amortization schedule	25 years
Portion of the loan have notional balance			$ 10,100,000
Face amount of revised note			10,500,000
Stated Libor rate	0.25%	0.30%
Weighted average spread	7.20%
Cost basis in the loan	$ 5,593,000	$ 5,766,000
Period of year for which cash interest less than effective interest	3 years
Period of year for which cash interest greater than effective interest	2 years
Year one through three [Member] | Maximum [Member]
Investments in Loans (Textual) [Abstract]
Libor plus Interest rate on the loan	6.00%
Year one through three [Member] | Minimum [Member]
Investments in Loans (Textual) [Abstract]
Libor plus Interest rate on the loan	4.00%
Year four [Member]
Investments in Loans (Textual) [Abstract]
Libor plus Interest rate on the loan	8.00%
Year five [Member]
Investments in Loans (Textual) [Abstract]
Libor plus Interest rate on the loan	10.00%

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Basis of Presentation and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Basis of Presentation and Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited. In our opinion, all estimates and adjustments necessary to present fairly the financial position, results of operations and cash flows have been made. The condensed consolidated balance sheet as of December 31, 2011 has been derived from the audited consolidated balance sheet as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U. S. (“GAAP”) have been omitted in accordance with Article 10 of Regulation S-X and the instructions to Form 10-Q. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the operating results for the full year ending December 31, 2012.

Consolidation

Consolidation

The condensed consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or controlled by us. All intercompany balances and transactions have been eliminated. Our condensed consolidated financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.

Comprehensive Income

Comprehensive Income

We have no items of other comprehensive income, and accordingly net income (loss) is equal to comprehensive income (loss) for all periods presented.

Segment Reporting

Segment Reporting

ASC 280 Segment Reporting (“ASC 280”) establishes standards for the way that public entities report information about operating segments in the financial statements. We are a REIT focused on originating and acquiring healthcare-related real estate and commercial mortgage debt and currently operate in only one reportable segment.

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Included in cash and cash equivalents at June 30, 2012 and December 31, 2011 is approximately $48.0 million and approximately $52.3 million, respectively, deposited with one major financial institution.

Real Estate and Identified Intangible Assets

Real Estate and Identified Intangible Assets

Real estate and identified intangible assets are carried at cost, net of accumulated depreciation and amortization. Betterments, major renewals and certain costs directly related to the improvement and leasing of real estate are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is provided on a straight-line basis over the assets’ estimated useful lives, which range from 9 to 40 years. Amortization is provided on a straight-line basis over the life of the in-place leases.

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, personal property and identified intangible assets such as above and below market leases, acquired in-place leases and customer relationships) and acquired liabilities in accordance with ASC 805 Business Combinations (“ASC 805”), and ASC 350 Intangibles — Goodwill and Other (“ASC 350”), and we allocate purchase price based on these assessments. We assess fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each property and the respective tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods and market conditions. In estimating carrying costs, the Company includes estimates of lost rents at estimated market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions and expected trends.

We review the carrying value of our real estate assets and intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets, (“ASC 360”). If such reviews indicate that the asset is impaired, the asset’s carrying amount is written down to its fair value. An impairment loss is measured based on the excess of the carrying amount over the fair value. We determine fair value by using a discounted cash flow model and appropriate discount and capitalization rates. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. If our anticipated holding periods change or estimated cash flows decline based on market conditions or otherwise, an impairment loss may be recognized. Long-lived assets to be disposed of are recorded at the lower of carrying value or fair value less estimated costs to sell. There were no impairments of our wholly-owned real estate investments and intangibles for the three and six month periods ended June 30, 2012 and 2011.

Investments in Loans

Investments in Loans

We account for our investment in loans in accordance with ASC Topic 948 Financial Services — Mortgage Banking (“ASC 948”). Under ASC 948, loans expected to be held for the foreseeable future or to maturity should be held at amortized cost, and all other loans should be held at lower of cost or market (“LOCOM”), measured on an individual basis. In accordance with ASC 820 Fair Value Measurements and Disclosures (“ASC 820”), the Company includes nonperformance risk in calculating fair value adjustments. As specified in ASC 820, the framework for measuring fair value is based on observable inputs of market data.

We periodically review our loans held for investment for impairment. Impairment losses are taken for impaired loans based on the fair value of collateral and a recoverability analysis on an individual loan basis. The fair value of the collateral may be determined by an evaluation of operating cash flow from the property during the projected holding period, and/or estimated sales value computed by applying an expected capitalization rate to the current net operating income of the specific property, less selling costs. Whichever method is used, other factors considered relate to geographic trends and project diversification, the size of the portfolio and current economic conditions. When it is probable that we will be unable to collect all amounts contractually due, the loan would be considered impaired.

Interest income is generally recognized using the effective interest method or on a basis approximating a level rate of return over the term of the loan. Nonaccrual loans are those on which the accrual of interest has been suspended. Loans are placed on nonaccrual status and considered nonperforming when full payment of principal and interest is in doubt, or when principal or interest is 90 days or more past due or if cash collateral, if any, is insufficient to cover principal and interest. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred loan fees is suspended. Interest income on nonaccrual loans may be recognized only to the extent it is received in cash. However, where there is doubt regarding the ultimate collectability of loan principal, cash receipts on such nonaccrual loans are applied to reduce the carrying value of such loans. Nonaccrual loans may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the restructured terms of such loan. The Company did not have any loans on non-accrual status as of June 30, 2012 or December 31, 2011.

As discussed in Note 4, as of June 30, 2012 and December 31, 2011, we have one remaining loan investment that is part of a larger credit facility, in which we have an approximately one-third interest. Our intent is to hold the remaining loan to maturity and as such it is carried on the June 30, 2012 and December 31, 2011 balance sheets at its amortized cost basis, net of principal payments received.

Investments in Partially-Owned Entities

Investments in Partially-Owned Entities

We invest in common equity and preferred equity interests that allow us to participate in a percentage of the underlying property’s cash flows from operations and proceeds from a sale or refinancing. At the inception of the investment, we must determine whether such investment should be accounted for as a loan, joint venture or as real estate. Investments in partially-owned entities where we exercise significant influence over operating and financial policies of the subsidiary, but do not control the subsidiary, are reported under the equity method of accounting. Under the equity method of accounting, the Company’s share of the investee’s earnings or loss is included in the Company’s operating results. As of June 30, 2012 and December 31, 2011, we held one (1) such equity investment and account for such investment under the equity method.

We assess whether there are indicators that the value of our partially owned entities may be impaired. An investment’s value is impaired if we determine that a decline in the value of the investment below its carrying value is other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated value of the investment. For the three and six month periods ended June 30, 2012, we did not recognize any impairment on investments in partially owned entities. We recognized impairment on our investments in partially-owned entities of approximately $0.1 million for the three and six month periods ended June 30, 2011 related to our SMC investment due to lower occupancy.

Rental Revenue

Rental Revenue

We recognize rental revenue in accordance with ASC 840 Leases (“ASC 840”). ASC 840 requires that revenue be recognized on a straight-line basis over the non-cancelable term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Renewal options in leases with rental terms that are higher than those in the primary term are excluded from the calculation of straight line rent if the renewals are not reasonably assured. We commence rental revenue recognition when the tenant takes control of the leased space. The Company recognizes lease termination payments as a component of rental revenue in the period received, provided that there are no further obligations under the lease. Amortization expense of above-market leases reduces rental income on a straight-line basis over the non-cancelable term of the lease. Taxes, insurance and reserves collected from tenants are separately shown as reimbursable income and corresponding payments are included in reimbursed property expenses.

Deferred Financing Costs

Deferred Financing Costs

Deferred financing costs represent commitment fees, legal and other third party costs associated with obtaining such financing. These costs are amortized over the terms of the respective financing agreements and the amortization of such costs is reflected in interest expense. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Stock-based Compensation Plans

Stock-based Compensation Plans

We have two stock-based compensation plans. We recognize compensation cost for stock-based compensation ratably over the service period of the award for employees, board members and non-employees. Compensation cost recorded for employees (including awards to non-employee directors) is measured based on the estimated fair value of the award on the grant date, and such amount is charged to compensation expense on a straight-line basis over the vesting period. Compensation cost recorded for our non-employees is adjusted in each subsequent reporting period based on the fair value of the award at the end of the reporting period until such time as the award has vested and the service being provided, if required, is substantially completed or, under certain circumstances, likely to be completed, whichever occurs first.

Derivative Instruments

Derivative Instruments

We account for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). In the normal course of business, we may use a variety of derivative instruments to manage, or hedge, interest rate risk. We will require that hedging derivative instruments be effective in reducing the interest rate risk exposure they are designated to hedge. This effectiveness is essential for qualifying for hedge accounting. Some derivative instruments may be associated with an anticipated transaction. In those cases, hedge effectiveness criteria also require that it be probable that the underlying transaction will occur. Instruments that meet these hedging criteria, to the extent we elect to utilize hedge accounting, will be formally designated as hedges at the inception of the derivative contract.

To determine the fair value of derivative instruments, we may use a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date including standard market conventions and techniques such as discounted cash flow analysis, option-pricing models, replacement cost, and termination cost. All methods of assessing fair value result in a general approximation of fair value, and such value may never actually be realized.

Unrealized gain or loss on the change in the value of a derivative instrument for which hedge accounting is elected, to the extent that it is determined to be an effective hedge, is included in other comprehensive income. Realized gain or loss on a derivative instrument, as well as the unrealized gain or loss on a derivative instrument for which hedge accounting is not elected, or the portion of such derivative instrument which is not an effective hedge, will be included in net income (loss) from operations.

We may use a variety of commonly used derivative products that are considered “plain vanilla” derivatives. These derivatives typically include interest rate swaps, caps, collars and floors. Similarly, we may also become a party to the sale or “short” of U.S. Treasury securities in anticipation of entering into a fixed rate mortgage of approximately equal duration. We expressly prohibit the use of unconventional derivative instruments and using derivative instruments for trading or speculative purposes. Further, we have a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors; therefore, we do not anticipate nonperformance by any of our counterparties.

Income Taxes

Income Taxes

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our REIT taxable income to stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to Federal income tax on our taxable income at regular corporate rates and we will not be permitted to qualify for treatment as a REIT for Federal income tax purposes for four (4) years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distributions to stockholders. We believe that we will continue to operate in such a manner as to qualify for treatment as a REIT for Federal income tax purposes. We may, however, be subject to certain state and local taxes.

Deferred tax assets and liabilities, if any, are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as operating loss and tax credit carryforwards. As a REIT, we generally will not be subject to Federal income tax on taxable income that we distribute to our stockholders and, therefore, the inclusion of Federal deferred tax assets and liabilities in our financial statements may not be applicable. Notwithstanding the foregoing, subject to certain limitations, net operating losses (“NOLs”) incurred by the Company can be treated as a carryforward for up to 20 years and utilized to reduced our taxable income in future years, thereby reducing the amount of taxable income which we are required to distribute to our stockholders in order to maintain our REIT status or, to the extent that we elect to distribute less than 100% of our taxable income to our stockholders, reducing our Federal tax liability on that portion of our taxable income which we elect not to distribute.

In assessing the potential realization of deferred tax assets, if any, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences reverse and/or NOL carryforwards are available. Management considers the scheduled reversal of deferred tax assets and liabilities, projected future taxable income, and tax planning strategies in making this assessment. As there is no assurance that the Company will generate taxable income in future periods, management does not believe that it is more likely than not that the Company will realize the benefits of these temporary differences and NOL carryforwards and therefore established a full valuation allowance at June 30, 2012 and December 31, 2011.

We account for uncertain tax positions in accordance with FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes — An Interpretation (“ASC 740”) of FASB Statement No. 109 (“FIN 48”). ASC 740 prescribes a recognition threshold and measurement attribute for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 requires that the financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts, but without considering time values. We evaluate uncertainties of tax positions taken or expected to be taken in our tax returns based on the probability of whether it is more likely than not those positions would be sustained upon audit by applicable tax authorities, based on technical merit for open tax years. We assessed the Company’s tax positions for open federal, state and local tax years from 2008 through 2012. The Company does not have any uncertain tax positions as of June 30, 2012 that would not be sustained on its technical merits on a more likely than not basis. Our policy is, if necessary, to account for interest and penalties related to uncertain tax positions as a component of our income tax provision.

Earnings per Share

Earnings per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur, if securities or other contracts to issue common stock were exercised or converted into common stock where such exercise or conversion would result in a lower earnings per share amount.

In accordance with ASC 260 Earnings Per Share, regarding the determination of whether instruments granted in share-based payments transactions are participation securities, we have applied the two-class method of computing basic EPS. This guidance clarifies that outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends or dividend equivalent payments participate in undistributed earnings with common stockholders and are considered participating securities. The Company’s excess of distributions over earnings relating to participating securities are shown as a reduction in net income (increase in net loss) available to common shareholders in the Company’s computation of EPS. The Company does not reallocate undistributed earnings to the participating securities and the common shares in the diluted earnings per share calculation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the consolidated financial statements and the accompanying notes. Significant estimates are made for the valuation of real estate and related intangibles, valuation of financial instruments, impairment assessments and fair value assessments with respect to purchase price allocations. Actual results could differ from those estimates.

Concentrations of Credit Risk

Concentrations of Credit Risk

Real estate triple-net leases and financial instruments, primarily consisting of cash, mortgage loan investments and interest receivable, potentially subject us to concentrations of credit risk. We may place our cash investments in excess of insured amounts with high quality financial institutions. We perform ongoing analysis of credit risk concentrations in our real estate and loan investment portfolios by evaluating exposure to various markets, underlying property types, investment structure, term, sponsors, tenant mix and other credit metrics. Our triple-net leases rely on our underlying tenants. The collateral securing our investment in our remaining loan is real estate properties located in the U.S.

In addition, we are required to disclose fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate that value. In cases where quoted market prices are not available, fair value is based upon the application of discount rates to estimated future cash flows based on market yields or other appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Reclassification

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). The amendments in ASU 2011-04 change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments are intended to create comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material effect on the condensed consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”), which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. This ASU does not change the items that must be reported in other comprehensive income. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011. As we have no other comprehensive income, the adoption of this standard did not have any effect on the condensed consolidated financial statements.

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Investments in Partially Owned Entities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Summary of investments in partially owned entities
Investments in partially-owned entities	$ 2,491	$ 2,491
Senior Management Concepts Senior Living Portfolio [Member]
Summary of investments in partially owned entities
Investments in partially-owned entities	$ 2,500	$ 2,500

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Investments in Partially Owned Entities (Tables)

6 Months Ended

Jun. 30, 2012

Investment Holdings [Line Items]

Summary of investments in partially owned entities

Investment	June 30, 2012		December 31, 2011
Senior Management Concepts Senior Living Portfolio	$	2.5	$	2.5
Total	$	2.5	$	2.5

Cambridge Medical Office Building Portfolio [Member]

Investment Holdings [Line Items]

Summary of financial information

	2011
Revenue (six months)	$	12.7
Expenses (six months)		15.4
Net loss before preferred distribution (six months)	$	(2.8)
Net loss after preferred distribution (six months)	$	(4.2)
Revenue (three months)	$	6.4
Expenses (three months)	$	7.9
Net loss before preferred distribution (three months)	$	(1.5)
Net loss after preferred distribution (three months)	$	(2.9)

Senior Management Concepts Senior Living Portfolio [Member]

Investment Holdings [Line Items]

Summary of financial information

	June 30, 2012		December 31, 2011
Assets	$	11.0	$	11.1
Liabilities		14.7		14.6
Equity	$	(3.7)	$	(3.5)
	June 30, 2012		June 30, 2011
Revenue (six months)	$	1.7	$	1.8
Expenses (six months)		1.8		1.8
Net loss from discontinued operations (six months)		—		—
Net income (loss) (six months)	$	(0.1)	$	—
Revenue (three months)	$	0.9	$	0.9
Expenses (three months)		0.9		0.9
Net loss from discontinued operations (three months)		—		—
Net income (loss) (three months)	$	—	$	—

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Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) (Common Stock)	6 Months Ended
	Jun. 30, 2012
Common Stock
Stock-based compensation to directors for services	Less than $500
Issuance of stock for related party incentive fee	Less than $500
Repurchased shares	Less than $500

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	10,215,551	10,215,551
Common stock, shares outstanding	10,171,550	10,171,550

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Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 9 — Fair Value Measurements

The Company has established processes for determining fair value measurements. Fair value is based on quoted market prices, where available. If listed prices or quotes are not available, then fair value is based upon internally developed models that primarily use inputs that are market-based or independently-sourced market parameters.

An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of valuation hierarchy are defined as follows:

Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following describes the valuation methodologies used for the Company’s assets and liabilities measured at fair value, as well as the general classification of such pursuant to the valuation hierarchy.

Real estate — The estimated fair value of tangible and intangible assets and liabilities recorded in connection with real estate properties acquired are based on Level 3 inputs. We estimated fair values utilizing income and market valuation techniques. The Company may estimate fair values using market information such as recent sales data for similar assets, income capitalization, or discounted cash flow models. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.

Investments in loans — The estimated fair value of loans is determined utilizing either internal modeling using Level 3 inputs or third party appraisals. The methodology used to value the loans is based on collateral performance, credit risk, interest rate spread movements, and market data. Loans of the type which the Company invests in are infrequently traded and market quotes are not widely available and disseminated.

Obligation to issue operating partnership units — Prior to the sale of our interest in the Cambridge Portfolio, the fair value of our obligation to issue the OP Units associated with the Cambridge acquisition was based on internally developed valuation models, as quoted market prices were not available nor were quoted prices available for similar liabilities. Our model involved the use of management estimates as well as some Level 2 inputs. The variables in the model prior to April 15, 2011 included the estimated release dates of the shares out of escrow, based on the expected performance of the underlying properties, a discount factor of approximately 21%, and the market price and expected quarterly dividend of Care’s common shares at each measurement date. As discussed above in Note 5, pursuant to the Omnibus Agreement, as of April 15, 2011, the number of OP Units outstanding was reduced to 200,000 and the terms of such OP Units were altered to eliminate any conversion right and provided for forfeiture of the OP Units upon the occurrence of certain events. Under the modified terms, the variables (Level 3 inputs) in the model include the expected life of the OP Units, and the expected dividend rate on our common stock and a discount factor of 12%. The obligation with respect to OP Units was eliminated in conjunction with the sale of the Cambridge Portfolio.

U.S. Treasury Short-Position — The estimated fair value of our position in a 10-Year U.S. Treasury Note is based on market quoted prices, a Level 1 input. For the purposes of determining fair value we obtain market quotes from at least two independent sources.

ASC 820 requires disclosure of the amounts of significant transfers among levels of the fair value hierarchy and the reasons for the transfers. In addition, ASC 820 requires entities to separately disclose, in their roll-forward reconciliation of Level 3 fair value measurements, changes attributable to transfers in and/or out of Level 3 and the reasons for those transfers. Significant transfers into a level must be disclosed separately from transfers out of a level. We had no transfers among levels for the three and six month periods ended June 30, 2012 and 2011.

Recurring Fair Value Measurement

As of June 30, 2012 and December 31, 2011, we had no assets or liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets. As of March 31, 2012, we maintained a short-position on the 10-Year US Treasury Note of November 15, 2021 and recorded an unrealized gain of approximately $0.4 million in the first quarter of 2012. During the three months ended June 30, 2012, the position was closed whereby the approximately $0.4 million unrealized gain was reversed and an approximately $0.1 gain was realized (see Note 7).

The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant Level 3 inputs during the six month period ended June 30, 2011 (for the six month period ended June 30, 2012 we had no such assets or liabilities). Level 3 instruments presented in the tables include a liability to issue OP Units, which were carried at fair value. The Level 3 instruments were valued using internally developed valuation models that, in management’s judgment, reflect the assumptions a marketplace participant would utilize:

Level 3 Instruments Fair Value Measurements June 30, 2011 (in millions)	Obligation to  Issue Partnership Units
Balance, December 31, 2010	$	(2.1)
Modification of OP Units (offset against investment)		1.9
Net change in unrealized loss from obligations		(0.3)
Balance, June 30, 2011	$	(0.5)

We are required to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. We have not designated any derivative instruments as hedging instruments. As of June 30, 2012 and December 31, 2011, we did not have any derivative instruments outstanding. As discussed in Note 5, Cambridge forfeited all of its rights and interests in the OP Units upon the closing of the purchase of Care’s interest in the Cambridge Portfolio on November 30, 2011.

Our consolidated financial statements include the following gains and losses associated with the aforementioned Cambridge OP Units and our 2012 10-Year US Treasury Note short-position:

(in millions)	Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments	Location of (Gain) Loss Recognized in Income on Derivative	Three Months Ended June 30, 2012		Three Months Ended June 30, 2011		Six Months Ended June  30, 2012		Six Months Ended June 30, 2011
Operating partnership units	Unrealized loss on derivative instruments		$    —		$  —		$  —		$(0.3)
10-Year U.S. Treasury Note (short sale)	Unrealized loss on derivative instruments		$ (0.4)		$  —		$  —		$   —
10-Year U.S. Treasury Note (short sale)	Realized gain on derivative instruments		$   0.1		$  —		$ 0.1		$   —

Estimates of other assets and liabilities in financial statements

We are required to disclose fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate that value. In cases where quoted market prices are not available, fair value is based upon the application of discount rates to estimated future cash flows based on market yields or other appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

In addition to the amounts reflected in the financial statements at fair value as provided above, cash and cash equivalents, restricted cash, accrued interest receivable, accounts payable and other liabilities reasonably approximate their fair values due to the short maturities of these items. The fair value of the debt was calculated by determining the present value of the agreed upon interest and principal payments at a discount rate reflective of financing terms currently available in the market for collateral with the similar credit and quality characteristics (based on Level 2 measurements). The mortgage notes payable that were used to finance the acquisitions of the Bickford properties have a combined fair value of approximately $83.1 million and $84.8 million as of June 30, 2012 and December 31, 2011, respectively. As of June 30, 2012, the combined fair value of the Greenfield Loans was approximately $15.3 million. The Bridge Loan used to finance the Greenfield acquisition was a floating rate facility and closed on September 20, 2011. Due to the short -term nature of the Bridge Loan and the fact that it had a floating interest rate, the carrying value of the Bridge Loan approximated fair market value as of December 31, 2011. We determined that the fair value of our loan investment, computed by discounting expected future cash flow at market rate, was approximately equal to our carrying value at June 30, 2012 and December 31, 2011.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 09, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	Care Investment Trust Inc.
Entity Central Index Key	0001393726
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		10,217,695

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Stockholders' Equity

6 Months Ended

Jun. 30, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 10 — Stockholders’ Equity

Our authorized capital stock consists of 100,000,000 shares of preferred stock, $0.001 par value and 250,000,000 shares of common stock, $0.001 par value. As of June 30, 2012 and December 31, 2011, no shares of preferred stock were issued and outstanding and 10,215,551 and 10,171,550 shares of our common stock were issued and outstanding, respectively.

Tiptree owns the 2008 Warrant that entitles it to purchase 652,500 shares of our common stock at a price of $11.33 per share under the Manager Equity Plan. The 2008 Warrant is immediately exercisable and expires on September 30, 2018.

During 2012, we issued 4,428 shares of common stock with a combined aggregate fair value of approximately $30,000 to our independent directors as part of their annual retainer for 2012 and 2011. Each independent director receives an annual base retainer of $50,000, payable quarterly in arrears, of which 70% is paid in cash and 30% in shares of Care common stock. Shares paid to our directors are issued under our Equity Plan, which was adopted in June 2007 (the “Equity Plan”).

On March 30, 2012, we issued 49,573 common shares with a combined aggregate fair value of approximately $345,000 to TREIT in conjunction with the 2011 fourth quarter incentive fee due under the Services Agreement (see Note 8). These shares were issued under the Manager Equity Plan.

On April 3, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the fourth quarter of 2011 which was paid on May 1, 2012 to stockholders of record as of April 17, 2012. Such dividend will be treated as a 2012 distribution for tax purposes.

On May 10, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the first quarter of 2012 was paid on June 7, 2012 to stockholders of record as of May 24, 2012.

In December 2011, we granted 100,153 restricted stock units (“RSUs”) to certain officers and employees at a grant date fair value of approximately $0.7 million. For the three month period ended June 30, 2012, dividend equivalent distributions were made to the holders of the unvested RSUs of approximately $27,000.

In conjunction with the resignation of our former chief financial officer, effective June 23, 2012, 30,769 restricted stock units were forfeited that were previously granted during his employment. Those units are available for future issuance under the Equity Plan. In addition, on June 25, 2012, the Company repurchased from our former chief financial officer 10,000 shares of our common stock at fair market value of $7.15 per common share. The repurchased shares are available for future issuance.

As of June 30, 2012, 200,904 common shares remain available for future issuances under the Equity Plan and 134,629 shares (which is net of 652,500 shares that are reserved for potential issuance upon conversion of the 2008 Warrant) remain available for future issuances under the Manager Equity Plan.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue
Rental income	$ 3,442	$ 2,961	$ 6,884	$ 5,923
Reimbursable income	353	315	705	629
Income from investments in loans	182	198	364	443
Total Revenue	3,977	3,474	7,953	6,995
Expenses
Base services fees to related party	133	99	245	203
Incentive fee to related party		176		481
Marketing, general and administrative (including stock-based compensation of $36, $15, $105 and $45, respectively)	898	878	2,070	1,707
Reimbursed property expenses	358	324	710	633
Depreciation and amortization	994	868	1,976	1,736
Operating Expenses	2,383	2,345	5,001	4,760
Other (Income) Expense
Income from investments in partially-owned entities, net	(81)	(1,384)	(162)	(771)
Unrealized loss on derivative instruments	420			255
Realized gain on derivative instruments, net	(86)		(86)
Impairment of investments		77		77
Interest income	(19)	(5)	(40)	(8)
Interest expense including amortization of deferred financing costs	1,599	1,374	3,185	2,728
Net income (loss)	$ (239)	$ 1,067	$ 55	$ (46)
Net income (loss) allocated to common stockholders per share of common stock
Net income (loss), basic	$ (0.03)	$ 0.11	$ 0.00	$ 0.00
Net income (loss), diluted	$ (0.03)	$ 0.10	$ 0.00	$ 0.00
Weighted average common shares outstanding, basic	10,224,845	10,149,562	10,200,141	10,145,018
Weighted average common shares outstanding, diluted	10,224,845	10,167,272	10,214,265	10,145,018
Dividends declared per common share	$ 0.270	$ 0.135	$ 0.270	$ 0.135

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Investments in Loans

6 Months Ended

Jun. 30, 2012

Investments in Loans [Abstract]

Investments in Loans

Note 4 — Investments in Loans

As of June 30, 2012 and December 31, 2011, our remaining loan investment is part of a larger credit facility, in which we have an approximately one-third interest. The loan is secured by a total of ten (10) properties consisting of skilled nursing facilities, assisted living facilities and a multifamily property all located in Louisiana. Originally scheduled to mature on February 1, 2011, the loan was extended several times during 2011 and eventually restructured in November 2011. Pursuant to the restructuring, the revised loan has a five (5) year term with a maturity date of November 1, 2016, a 25 year amortization schedule and a limited cash sweep. The interest rate on the loan was increased from London Interbank Offered Rate (“Libor”) plus 4.00% to Libor plus 6.00% in year one through year three, Libor plus 8.00% in year four and Libor plus 10.00% in year five. As part of the restructuring, a new independent operator was brought in to manage the properties. At the time of the restructuring, our portion of the loan had a notional balance of approximately $10.1 million. In conjunction with the restructuring, we received a revised note with a face amount of approximately $10.5 million. As part of the analysis at the time of the restructuring of the loan, we determined that expected future gross receipts, exclusive of interest payments, from this investment were approximately equal to our carrying value of approximately $5.8 million. Accordingly, all principal amortization payments, including prepayments received from the limited cash sweep are applied to the carrying value of our asset. No gain or loss was recognized as a result of the restructuring. One month Libor was 0.25% and 0.30% at June 30, 2012 and December 31, 2011, respectively. Pursuant to Accounting Standards Codification Topic 310 Receivables (“ASC 310”), we recognize interest income at the effective interest rate based on Libor in effect at the inception of the restructured loan and using a weighted average spread of 7.20%. Accordingly, cash interest will be less than effective interest during the first three (3) years of the loan and cash interest will be greater than effective interest during the last two (2) years of the loan. Our cost basis in the loan at June 30, 2012 and December 31, 2011 was approximately $5.6 million and $5.8 million, respectively.

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Investments in Real Estate

6 Months Ended

Jun. 30, 2012

Investments in Real Estate [Abstract]

Investments in Real Estate

Note 3 — Investments in Real Estate

As of June 30, 2012 and December 31, 2011, we owned 17 senior housing facilities. In 2008, we acquired 14 independent living, assisted living and memory care facilities located in four (4) states, of which six (6) are in Iowa, five (5) in Illinois, two (2) in Nebraska and one (1) in Indiana. These 14 properties were acquired in two separate sale-leaseback transactions from affiliates of Bickford Senior Living Group, L.L.C., a privately-held owner and operator of senior housing facilities (“Bickford”). We lease those properties to Bickford Master I, LLC (the “Bickford Master Lessee”), an affiliate of Bickford pursuant to a triple-net lease, for an initial annual base rent of approximately $9.1 million and additional base rent of approximately $0.3 million, with fixed escalations of 3.0% per annum through June 2023. The master lease provides for four (4) extension options of ten (10) years each. The additional base rent was deferred and accrued until July 2011 and is being paid over a 24 month period that commenced at that time. See also Note 7 for the mortgage loans underlying the Bickford properties.

As an enticement for the Company to enter into the leasing arrangement for the properties, we received additional collateral and guarantees of the lease obligation from parties affiliated with Bickford. The additional collateral pledged in support of Bickford’s obligation to the lease commitment included ownership interests in Bickford affiliated companies.

The Bickford real estate assets, including personal property, consist of the following at each period end (in millions):

	June 30, 2012		December 31, 2011
Land	$	5.0	$	5.0
Buildings and improvements		102.0		102.0
Less: accumulated depreciation and amortization		(5.9)		(4.4)
Total real estate, net	$	101.1	$	102.6

In September 2011, the Company acquired three (3) assisted living and memory care facilities located in Virginia from affiliates of Greenfield Senior Living, Inc., a privately-held owner and operator of senior housing facilities (“Greenfield”). The aggregate purchase price for the three (3) properties was $20.8 million, of which approximately $15.5 million was funded with the proceeds of a first mortgage bridge loan (the “Bridge Loan”) with KeyBank National Association (“KeyBank”) (see Note 7), and the balance with cash on hand. Concurrent with the acquisition, the properties were leased to three (3) wholly-owned affiliates of Greenfield, which are responsible for operating each of the properties pursuant to a triple net master lease (the “Greenfield Master Lease”). The initial term of the Greenfield Master Lease is 12 years with two (2) extension options of ten (10) years each. Rent payments during the first year are approximately $1.7 million, with rental increases of 2.75% per annum during the initial term of the lease. At the end of the initial term, Greenfield, subject to certain conditions, holds a one-time purchase option that provides the right to acquire all three (3) of the properties at the then fair market value. Greenfield has guaranteed the obligations of the tenants under the Greenfield Master Lease.

The Greenfield real estate assets, including personal property, consist of the following at each period end (in millions):

	June 30, 2012		December 31, 2011
Land	$	5.6	$	5.6
Buildings and improvements		14.2		14.2
Less: accumulated depreciation and amortization		(0.3)		(0.1)
Total real estate, net	$	19.5	$	19.7

For each of the three and six months ended June 30, 2012, revenues from the Bickford and Greenfield tenants accounted for approximately 95%, of total revenue and for each of the three and six months ended June 30 2011, revenues from the Bickford tenants accounted for approximately 94% of total revenue.

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Investments in Real Estate (Tables)

6 Months Ended

Jun. 30, 2012

Investments in Real Estate [Abstract]

Bickford real estate assets

	June 30, 2012		December 31, 2011
Land	$	5.0	$	5.0
Buildings and improvements		102.0		102.0
Less: accumulated depreciation and amortization		(5.9)		(4.4)
Total real estate, net	$	101.1	$	102.6

Greenfield real estate assets

	June 30, 2012		December 31, 2011
Land	$	5.6	$	5.6
Buildings and improvements		14.2		14.2
Less: accumulated depreciation and amortization		(0.3)		(0.1)
Total real estate, net	$	19.5	$	19.7

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Income (Loss) per Share (in thousands, except share and per share data)

6 Months Ended

Jun. 30, 2012

Income (Loss) per Share (in thousands, except share and per share data) [Abstract]

Income (Loss) per Share (in thousands, except share and per share data)

Note 11 — Income (Loss) per Share (in thousands, except share and per share data)

	Three Months Ended				Six Months Ended
	June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Net income (loss) per share of common stock
Net income (loss) per share, basic	$	(0.03)	$	0.11	$	0.00	$	(0.00)
Net income (loss) per share, diluted	$	(0.03)	$	0.10	$	0.00	$	(0.00)
Numerator:
Net income (loss)	$	(239)	$	1,067	$	55	$	(46)
Less: Allocation to participating securities		(27)		—		(27)		—
Net income (loss) allocated to common stockholders, basic and diluted	$	(266)	$	1,067	$	28	$	(46)
Denominator:
Weighted average common shares outstanding, basic		10,224,845		10,149,562		10,200,141		10,145,018
Shares underlying RSU grants		—		—		14,124		—
Shares underlying the Cambridge warrant		—		17,710		—		—
Weighted average common shares outstanding, diluted		10,224,845		10,167,272		10,214,265		10,145,018

For the six month period ended June 30, 2012, diluted income per share includes the effect of 69,384 remaining unvested RSUs which were granted to certain officers and employees on December 30, 2011. For the three month period ended June 30, 2012, diluted loss per share excludes the effect of these awards as they were anti-dilutive. The RSUs are participating securities.

For the three month period ended June 30, 2011, diluted income per share includes the effect of 17,710 common shares pertaining to the Warrant issued to Cambridge on April 15, 2011 under the Omnibus Agreement. For the six month period ended June 30, 2011 there were no outstanding securities that were dilutive.

For the three months ended June 30, 2011, the original operating partnership units did not affect diluted EPS. For the six month period ended June 30, 2011, basic and diluted EPS did not include operating partnership units that were outstanding prior to April 15, 2011 as they were anti-dilutive.

As described in Note 5, on April 14, 2011 (effective April 15, 2011), our Cambridge investment was restructured and the OP Units issued in connection with the Cambridge investment were no longer redeemable for or convertible into shares of our common stock.

All periods above exclude the dilutive effect of the 2008 Warrant convertible into 652,500 shares because the exercise price was more than the average market price during such periods.

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Borrowings under Mortgage Notes Payable

6 Months Ended

Jun. 30, 2012

Borrowings under Mortgage Notes Payable [Abstract]

Borrowings under Mortgage Notes Payable

Note 7 — Borrowings under Mortgage Notes Payable

The following table summarizes the Company’s outstanding mortgage notes as of June 30, 2012 and December 31, 2011 (dollars in millions):

	Interest Rate			Date of Mortgage Note	Maturity Date	June 30, 2012		December 31, 2011
Red Mortgage Capital, Inc (12 properties) (1)		6.845	%	June 2008	July 2015	$	72.4	$	72.8
Red Mortgage Capital, Inc (2 properties) (1)		7.17	%	September 2008	July 2015		7.4		7.5
Key Bank National Association (3 properties) (2)		Libor +4.00	%	September 2011	June 2012		—		15.3
KeyCorp Real Estate Capital Markets, Inc. (3 properties) (2)		4.76	%	April 2012	May 2022		15.7		—
Subtotal							95.5		95.6
Unamortized premium (3)							0.4		0.5
Total						$	95.9	$	96.1

(1) The mortgage loan obtained on June 26, 2008 (the “June Bickford Loan”) requires a fixed monthly payment of approximately $0.5 million for both principal and interest, until maturity in July 2015, at which time the then outstanding balance of approximately $69.6 million is due and payable. The mortgage loan obtained on September 30, 2008 together with the June Bickford Loan (the “Bickford Loans”), provides for a fixed monthly debt service payment of approximately $52,000 for principal and interest until the maturity in July 2015 when the then outstanding balance of approximately $7.1 million is due and payable. In addition, we are required to make monthly escrow payments for taxes and reserves for which we are reimbursed by the Bickford Master Lessee under the Bickford Master Lease. Both mortgage loans are serviced by and payable to Red Mortgage Capital, Inc. (“Red Capital”) and contain prepayment restrictions that impact our ability to refinance either of the mortgage loans prior to 2015. The Bickford Loans are secured by separate cross-collateralized, cross-defaulted first priority mortgages/deeds of trust on each of the Bickford properties. The Bickford Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for the Bickford Loans. Each Bickford Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Bickford Loans, which would result in all amounts owing under each of the Bickford Loans to become immediately due and payable since all of the Bickford Loans are cross-defaulted. On June 30, 2012, the Bickford Loans had an effective yield of 6.88% and the Company was in compliance with respect to the financial covenants related to the Bickford Loans.

(2) On September 20, 2011, in connection with our acquisition of the Greenfield properties, the Company entered into the Bridge Loan with KeyBank in the principal amount of approximately $15.5 million (see Note 3). The Bridge Loan bore interest at a floating rate per annum equal to Libor plus 400 basis points, with no Libor floor, and provided for monthly interest and principal payments commencing on October 1, 2011. The Bridge Loan was scheduled to mature on June 20, 2012. On April 24, 2012, Care refinanced the Bridge Loan for the Greenfield properties by entering into three separate non-recourse loans (each a “Greenfield Loan” and collectively the “Greenfield Loans”) with KeyCorp Real Estate Capital Markets, Inc. (“KeyCorp”) for an aggregate amount of approximately $15.7 million. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. In June 2012, KeyCorp sold each of the Greenfield Loans to Federal Home Loan Mortgage Corporation (“Freddie Mac”) under Freddie Mac’s Capital Markets Execution (“CME”) Program. As of June 30, 2012, the Company was in compliance with respect to all financial covenants related to the Greenfield Loans.

(3) As a result of the utilization of push-down accounting in connection with the Tiptree Transaction, the Red Mortgage Capital mortgage notes payable were recorded at their then fair value of approximately $82.1 million, an increase of approximately $0.8 million over the combined amortized loan balances of approximately $81.3 million at August 13, 2010. The premium is amortized over the remaining term of such loans.

On February 1, 2012, the Company became party to the short sale of a $15.5 million 2.00% U.S. Treasury Note due November 15, 2021 (the “10-Year U.S. Treasury Note”). Care entered into this transaction in conjunction with its application to Freddie Mac for a ten-year fixed rate mortgage to be secured by the Greenfield properties in order to limit its interest rate exposure. The Company closed the aforementioned short position upon rate locking the Freddie Mac mortgage on April 18, 2012, and realized a net gain of approximately $0.1 million. Tiptree acted as agent, through its prime broker, for us with respect to this transaction and assigned to us all of its rights and obligations related to this transaction (see Note 9).

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Investments in Partially Owned Entities

6 Months Ended

Jun. 30, 2012

Investments in Partially Owned Entities [Abstract]

Investments in Partially Owned Entities

Note 5 — Investments in Partially Owned Entities

The following table summarizes the Company’s investments in partially owned entities at June 30, 2012 and December 31, 2011 (in millions):

Investment	June 30, 2012		December 31, 2011
Senior Management Concepts Senior Living Portfolio	$	2.5	$	2.5
Total	$	2.5	$	2.5

Cambridge Medical Office Building Portfolio

On November 30, 2011, we sold our entire interest in the Cambridge Medical Office Portfolio (the “Cambridge Portfolio”) and subsequently dissolved our related partnership entities, ERC Sub, L.P. and ERC Sub, LLC. In December of 2007, we acquired an 85% equity interest in eight (8) limited partnerships that own nine (9) Class A medical office buildings owned and operated by affiliates of Cambridge Holdings, Inc. (“Cambridge”). Our total investment was approximately $72.4 million consisting of: (i) approximately $61.9 million of cash, of which approximately $2.8 million was held back to perform tenant improvements; and (ii) subject to the properties achieving certain performance hurdles, the commitment to issue to Cambridge 700,000 operating partnership units (the “OP Units”) in ERC Sub, L.P. (the limited partnership through which we held our investment in the Cambridge Portfolio) with a stated value of $10.5 million. Total rentable area of the Cambridge Portfolio was approximately 767,000 square feet. As originally structured, Cambridge retained ownership of the remaining 15% interest in each of the limited partnerships and continued to operate the underlying properties pursuant to long-term management contracts. In accordance with the terms of our management agreements, Cambridge acted as the manager and leasing agent of each medical office building.

On April 14, 2011 (effective as of April 15, 2011) we entered into an Omnibus Agreement (the “Omnibus Agreement”) with Cambridge and certain of its affiliates (the “Cambridge Parties”) regarding our investment in the Cambridge Portfolio. Pursuant to the Omnibus Agreement, we simultaneously entered into a settlement agreement with Cambridge in regard to the ongoing litigation between ourselves and Cambridge. The economic terms of our investment in the Cambridge Portfolio were amended by the Omnibus Agreement as follows:

• The number and terms of the OP Units were revised such that Cambridge retained rights to 200,000 OP Units. These OP Units were entitled to dividend equivalent payments equal to any ordinary dividend declared and paid by Care to its stockholders, but were no longer convertible into or redeemable for shares of common stock of Care and had limited voting rights in ERC Sub, L.P.;

• We issued a warrant (the “Warrant”) to Cambridge to purchase 300,000 shares of our common stock at $6.00 per share;

• Our obligation to fund up to approximately $0.9 million in additional tenant improvements in the Cambridge Portfolio was eliminated;

• Our aggregate interest in the Cambridge Portfolio was converted from a stated equity interest of 85% to a fixed dollar investment of $40 million with a preferred return of 14%;

• Retroactive to January 1, 2011, we were to receive a preferential distribution of cash flow from operations with a target distribution rate of 12% on our $40 million fixed dollar investment with any cash flow from operations in excess of the target distribution rate being retained by Cambridge;

• We had a preference with regard to any distributions from special events, such as property sales, refinancings and capital contributions, equal to the sum of our outstanding fixed dollar investment plus our accrued but unpaid preferred return;

• Cambridge received the right to purchase our interest in the Cambridge Portfolio at any time during the term of the Omnibus Agreement for an amount equal to the sum of our outstanding fixed dollar investment plus our accrued but unpaid preferred return plus a cash premium that increased annually as well as the return to Care of the OP Units, the Warrant and any Care stock acquired upon a cashless exercise of the Warrant (the “Redemption Price” as defined in the Omnibus Agreement);

Prior to April 15, 2011, we included 85% of the net losses (after depreciation and amortization) from the Cambridge Portfolio in our statements of operations and reduced the value of our investment in the Cambridge Portfolio based on such losses and the receipt of cash distributions. On April 15, 2011, there was no effect to our results of operations for the three and six month periods ending June 30, 2011 as a result of the above transaction. Our statement of operations for the first quarter of 2011 includes the aforementioned allocated loss of approximately $1.1 million as well as a loss of approximately $0.3 million pertaining to an increase in the liability associated with the operating partnership units. During the second quarter of 2011, we recognized approximately $1.2 million representing a preferential distribution of cash flow from operations.

On October 19, 2011, we entered into an agreement with Cambridge to amend the Omnibus Agreement (the “First Amendment”). Pursuant to the First Amendment, Cambridge was granted the ability to purchase our interest in the Cambridge Portfolio at any time up to December 9, 2011 for an amount equal to the sum of our $40 million fixed dollar investment plus our accrued but unpaid preferred return (approximately $2.0 million inclusive of our preferred distribution of cash flow from operations). As consideration for the First Amendment, Cambridge agreed to forfeit all of its rights and interests in the Warrant and the OP Units upon the earlier of the closing of such purchase or December 9, 2011.

On November 30, 2011, Cambridge completed its acquisition of our preferred interest in the Cambridge Portfolio. In connection therewith, the parties to the Omnibus Agreement terminated the agreement. We received proceeds of approximately $42 million of which, approximately $40.8 million of the proceeds received were treated as proceeds from sale of investments and the balance of approximately $1.2 million as income from investments in partially-owned entities.

Summarized financial information for the three and six months ended June 30, 2011 of the Cambridge Portfolio is as follows (in millions):

	2011
Revenue (six months)	$	12.7
Expenses (six months)		15.4
Net loss before preferred distribution (six months)	$	(2.8)
Net loss after preferred distribution (six months)	$	(4.2)
Revenue (three months)	$	6.4
Expenses (three months)	$	7.9
Net loss before preferred distribution (three months)	$	(1.5)
Net loss after preferred distribution (three months)	$	(2.9)

Senior Management Concepts Senior Living Portfolio

Until May 2011, we owned a preferred and common equity investment in four (4) independent and assisted living facilities located in Utah and operated by Senior Management Concepts, LLC (“SMC”), a privately held owner and operator of senior housing facilities. The four (4) private pay facilities contain 408 units of which 243 are independent living units and 165 are assisted living units. At the time of our acquisition, four (4) affiliates of SMC each entered into 15-year leases for the respective facilities that expire in 2022. We acquired our preferred and common equity interest in the SMC portfolio in December 2007, paying approximately $6.8 million in exchange for 100% of the preferred equity interests and 10% of the common equity interests in the four (4) properties. At the time of our initial investment, we entered into an agreement with SMC that provides for payments to us of an annual cumulative preferred return of 15.0% on our investment. In addition, we are to receive a common equity return payable for up to ten (10) years equal to 10.0% of budgeted free cash flow after payment of debt service and the preferred return as such amounts were determined prior to closing, as well as 10% of the net proceeds from a sale of one or more of the properties. Subject to certain conditions being met, our preferred equity interest in the properties is subject to redemption at par. If our preferred equity interest is redeemed, we have the right to put our common equity interests to SMC within 30 days after notice at fair market value as determined by a third-party appraiser. In addition, we have an option to put our preferred equity interest to SMC at par any time beginning on January 1, 2016, along with our common equity interests at fair market value as determined by a third-party appraiser.

In May 2011, with our prior consent, three (3) of the four (4) SMC properties were sold. We received approximately $6.6 million of gross proceeds consisting of approximately $5.2 million representing a return of our preferred equity investment allocable to the three (3) sold properties, approximately $0.9 million representing our 10% common equity interest in the three (3) sold properties and approximately $0.4 million which satisfied all outstanding delinquent preferred return and default interest payments. In conjunction with the sale of the three (3) properties, we returned a security deposit of approximately $0.4 million which was held by us as payment collateral for those facilities. We received approximately $12,000 in excess of the then current cost basis of our investment.

Subsequent to the aforementioned sale and through June 30, 2012, we retain our 100% preferred equity interest and 10% common equity interest in the remaining property in Utah. The remaining facility contains 120 units of which approximately one-half are assisted living and one-half are independent living. The property is subject to a lease which expires in 2022.

The summarized financial information as of June 30, 2012 and December 31, 2011 and for the three and six months ended June 30, 2012 and 2011, for the Company’s unconsolidated joint venture in SMC, which for the three and six months ended June 30, 2011 includes the net results of operations for the three (3) properties sold in May 2011 as discontinued operations, is as follows (in millions):

	June 30, 2012		December 31, 2011
Assets	$	11.0	$	11.1
Liabilities		14.7		14.6
Equity	$	(3.7)	$	(3.5)
	June 30, 2012		June 30, 2011
Revenue (six months)	$	1.7	$	1.8
Expenses (six months)		1.8		1.8
Net loss from discontinued operations (six months)		—		—
Net income (loss) (six months)	$	(0.1)	$	—
Revenue (three months)	$	0.9	$	0.9
Expenses (three months)		0.9		0.9
Net loss from discontinued operations (three months)		—		—
Net income (loss) (three months)	$	—	$	—

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Identified Intangible Assets - leases in-place, net

6 Months Ended

Jun. 30, 2012

Identified Intangible Assets - leases in-place, net [Abstract]

Identified Intangible Assets - leases in-place, net

Note 6 — Identified Intangible Assets — leases in-place, net

The following table summarizes the Company’s identified intangible assets at June 30, 2012 and December 31, 2011 (in millions):

	June 30, 2012		December 31, 2011
Leases in-place — including above market leases of $2.7	$	7.7	$	7.7
Accumulated amortization		(1.1)		(0.8)
Total	$	6.6	$	6.9

The Company amortizes these intangible assets over the terms of the underlying leases on a straight-line basis. Amortization expense for each of the next five (5) years is expected to be approximately $0.4 million per annum and the amortization for above-market leases, which reduces rental income, is expected to be approximately $0.2 million per annum for each of the next five (5) years.

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Related Party Transactions

6 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

Note 8 — Related Party Transactions

Services Agreement with TREIT Management LLC

The Company has a Services Agreement with TREIT pursuant to which TREIT provides certain advisory and support services related to the Company’s business. For such services, the Company: (i) pays TREIT a monthly base services fee in arrears of one-twelfth of 0.5% of the Company’s Equity (as defined in the Services Agreement) as adjusted to account for Equity Offerings (as defined in the Services Agreement); (ii) provides TREIT with office space and certain office-related services (as provided in the Services Agreement and subject to a cost sharing agreement between the Company and TREIT); and (iii) pays, to the extent earned, a quarterly incentive fee equal to the lesser of (a) 15% of the Company’s adjusted funds from operations (“AFFO”) Plus Gain/(Loss) on Sale (as defined in the Services Agreement) and (b) the amount by which the Company’s AFFO Plus Gain /(Loss) on Sale exceeds an amount equal to Adjusted Equity multiplied by the Hurdle Rate (as defined in the Services Agreement). Twenty percent (20%) of any such incentive fee shall be paid in shares of common stock of the Company, unless a greater percentage is requested by TREIT and approved by an independent committee of directors. On November 9, 2011, we entered into an amendment to the Services Agreement that clarified the basis upon which the Company calculates the quarterly incentive fee. The initial term of the Services Agreement extends until December 31, 2013. Unless terminated earlier in accordance with its terms, the Services Agreement will be automatically renewed for one year periods following such date unless either party elects not to renew. If the Company elects to terminate without cause, or elects not to renew the Services Agreement, a Termination Fee (as defined in the Services Agreement) shall be payable by the Company to TREIT. Such termination fee is not fixed and determinable.

For the three and six months ended June 30, 2012, we incurred approximately $0.1 million and $0.2 million, respectively, in base service fee expense to TREIT. For the three and six months ended June 30, 2011, we incurred approximately $0.1 million and $0.2 million, respectively, in base service fee expense to TREIT. In addition, during the three and six months ended June 30, 2011, we incurred an incentive fee expense to TREIT of approximately $0.2 million and $0.5 million, respectively, of which 20% was paid in the Company’s common stock. There was no incentive fee expense incurred for the three and six months ended June 30, 2012, respectively. For the three and six month periods ended June 30, 2012, TREIT’s reimbursement to the Company for certain office related services was approximately $4,000 and $8,000, respectively. At June 30, 2012, accrued expenses payable to TREIT of approximately $37,000 for the outstanding base service fee was offset by the reimbursement due to us.

Other Transactions with Related Parties

At June 30, 2012 and December 31, 2011, Tiptree owns a warrant (the “2008 Warrant”) to purchase 652,500 shares of the Company’s common stock at $11.33 per share under the Manager Equity Plan adopted by the Company on June 21, 2007 (the “Manager Equity Plan”). The warrant is immediately exercisable and expires on September 30, 2018.

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Investments in Real Estate (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		9 Months Ended	12 Months Ended
	Jun. 30, 2012 Home	Jun. 30, 2011	Jun. 30, 2012 Home	Jun. 30, 2011	Sep. 30, 2011 Home	Dec. 31, 2008 States Home	Dec. 31, 2011 Home
Investment in Real Estate (Textual) [Abstract]
Senior living properties						14
Investment in Real Estate (Additional Textual) [Abstract]
Senior housing facilities	17		17				17
Number of states consisting senior living properties						4
Initial annual base rent			$ 9.1
Additional base rent			0.3
Fixed escalations percentage			3.00%
Fixed escalations period			through June 2023
Additional base rent accrued			until July 2011
Additional base rent paid over a period			24 months
Number of memory care facilities acquired					3
Aggregate purchase price					20.8
Amount of mortgage bridge loan					15.5
Initial term of lease					12 years
Rent payment					$ 1.7
Rental increase					2.75%
Percentage of revenue	95.00%	94.00%	95.00%	94.00%
Iowa [Member]
Investment in Real Estate (Textual) [Abstract]
Senior living properties						6
Illinois [Member]
Investment in Real Estate (Textual) [Abstract]
Senior living properties						5
Nebraska [Member]
Investment in Real Estate (Textual) [Abstract]
Senior living properties						2
Indiana [Member]
Investment in Real Estate (Textual) [Abstract]
Senior living properties						1
Bickford Master Lessee [Member]
Investment in Real Estate (Textual) [Abstract]
Number of extension options			4
Period extension option under master lease			10 years
Greenfield Master Lease [Member]
Investment in Real Estate (Textual) [Abstract]
Number of extension options					2
Period extension option under master lease			10 years

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Commitments and Contingencies (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Commitments and contingencies (Textual) [Abstract]
Rent expense for office lease	$ 0.1	$ 0.1	$ 0.1	$ 0.1

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Subsequent Events

6 Months Ended

Jun. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

Note 13 — Subsequent Events

Share Issuances

On July 2, 2012, we issued 2,144 shares of common stock with a combined aggregate fair value of approximately $15,000 to our independent directors as part of their annual retainer for the quarter ended June 30, 2012.

Dividends Declaration

On August 9, 2012, the Company declared a cash dividend of $0.135 per share of common stock with respect to the second quarter of 2012 that will be paid on September 6, 2012 to stockholders of record as of August 23, 2012.

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Borrowings under Mortgage Notes Payable (Tables)

6 Months Ended

Jun. 30, 2012

Borrowings under Mortgage Notes Payable [Abstract]

Outstanding mortgage notes

	Interest Rate			Date of Mortgage Note	Maturity Date	June 30, 2012		December 31, 2011
Red Mortgage Capital, Inc (12 properties) (1)		6.845	%	June 2008	July 2015	$	72.4	$	72.8
Red Mortgage Capital, Inc (2 properties) (1)		7.17	%	September 2008	July 2015		7.4		7.5
Key Bank National Association (3 properties) (2)		Libor +4.00	%	September 2011	June 2012		—		15.3
KeyCorp Real Estate Capital Markets, Inc. (3 properties) (2)		4.76	%	April 2012	May 2022		15.7		—
Subtotal							95.5		95.6
Unamortized premium (3)							0.4		0.5
Total						$	95.9	$	96.1

(1) The mortgage loan obtained on June 26, 2008 (the “June Bickford Loan”) requires a fixed monthly payment of approximately $0.5 million for both principal and interest, until maturity in July 2015, at which time the then outstanding balance of approximately $69.6 million is due and payable. The mortgage loan obtained on September 30, 2008 together with the June Bickford Loan (the “Bickford Loans”), provides for a fixed monthly debt service payment of approximately $52,000 for principal and interest until the maturity in July 2015 when the then outstanding balance of approximately $7.1 million is due and payable. In addition, we are required to make monthly escrow payments for taxes and reserves for which we are reimbursed by the Bickford Master Lessee under the Bickford Master Lease. Both mortgage loans are serviced by and payable to Red Mortgage Capital, Inc. (“Red Capital”) and contain prepayment restrictions that impact our ability to refinance either of the mortgage loans prior to 2015. The Bickford Loans are secured by separate cross-collateralized, cross-defaulted first priority mortgages/deeds of trust on each of the Bickford properties. The Bickford Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for the Bickford Loans. Each Bickford Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Bickford Loans, which would result in all amounts owing under each of the Bickford Loans to become immediately due and payable since all of the Bickford Loans are cross-defaulted. On June 30, 2012, the Bickford Loans had an effective yield of 6.88% and the Company was in compliance with respect to the financial covenants related to the Bickford Loans.

(2) On September 20, 2011, in connection with our acquisition of the Greenfield properties, the Company entered into the Bridge Loan with KeyBank in the principal amount of approximately $15.5 million (see Note 3). The Bridge Loan bore interest at a floating rate per annum equal to Libor plus 400 basis points, with no Libor floor, and provided for monthly interest and principal payments commencing on October 1, 2011. The Bridge Loan was scheduled to mature on June 20, 2012. On April 24, 2012, Care refinanced the Bridge Loan for the Greenfield properties by entering into three separate non-recourse loans (each a “Greenfield Loan” and collectively the “Greenfield Loans”) with KeyCorp Real Estate Capital Markets, Inc. (“KeyCorp”) for an aggregate amount of approximately $15.7 million. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. In June 2012, KeyCorp sold each of the Greenfield Loans to Federal Home Loan Mortgage Corporation (“Freddie Mac”) under Freddie Mac’s Capital Markets Execution (“CME”) Program. As of June 30, 2012, the Company was in compliance with respect to all financial covenants related to the Greenfield Loans.

(3) As a result of the utilization of push-down accounting in connection with the Tiptree Transaction, the Red Mortgage Capital mortgage notes payable were recorded at their then fair value of approximately $82.1 million, an increase of approximately $0.8 million over the combined amortized loan balances of approximately $81.3 million at August 13, 2010. The premium is amortized over the remaining term of such loans.

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Income (Loss) per Share (in thousands, except share and per share data) (Details Textual)	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2012	Dec. 31, 2011
Income (Loss) per Share (in thousands, except share and per share data) (Textual) [Abstract]
Unvested restricted stock units		69,384
Common shares pertaining to the OP Units issued to Cambridge	17,710
Warrant convertible into shares	652,500	652,500	652,500

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Borrowings under Mortgage Notes Payable (Details) (USD $)	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Outstanding mortgage notes
Subtotal	$ 95,500,000	$ 95,600,000
Unamortized premium	400,000	500,000
Total	95,880,000	96,079,000
Red Mortgage Capital, Inc (12 properties) [Member]
Outstanding mortgage notes
Interest Rate	6.845%
Date of Mortgage Note	Jun. 30, 2008
Maturity Date	Jul. 01, 2015
Subtotal	72,400,000	72,800,000
Red Mortgage Capital, Inc (2 properties) [Member]
Outstanding mortgage notes
Interest Rate	7.17%
Date of Mortgage Note	Sep. 30, 2008
Maturity Date	Jul. 01, 2015
Subtotal	7,400,000	7,500,000
Key Bank National Association (3 properties) [Member]
Outstanding mortgage notes
Libor + Interest rate	Libor +4.00%
Date of Mortgage Note	Sep. 30, 2011
Maturity Date	Jun. 01, 2012
Subtotal		15,300,000
KeyCorp Real Estate Capital Markets, Inc. (3 Properties) [Member]
Outstanding mortgage notes
Date of Mortgage Note	Apr. 30, 2012
Maturity Date	May 01, 2022
Subtotal	$ 15,700,000

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Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidated Statements of Operations [Abstract]
Stock-based compensation	$ 36	$ 15	$ 105	$ 30

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Basis of Presentation and Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Basis of Presentation and Significant Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Note 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited. In our opinion, all estimates and adjustments necessary to present fairly the financial position, results of operations and cash flows have been made. The condensed consolidated balance sheet as of December 31, 2011 has been derived from the audited consolidated balance sheet as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U. S. (“GAAP”) have been omitted in accordance with Article 10 of Regulation S-X and the instructions to Form 10-Q. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the operating results for the full year ending December 31, 2012.

Consolidation

The condensed consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or controlled by us. All intercompany balances and transactions have been eliminated. Our condensed consolidated financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.

Comprehensive Income

We have no items of other comprehensive income, and accordingly net income (loss) is equal to comprehensive income (loss) for all periods presented.

Segment Reporting

ASC 280 Segment Reporting (“ASC 280”) establishes standards for the way that public entities report information about operating segments in the financial statements. We are a REIT focused on originating and acquiring healthcare-related real estate and commercial mortgage debt and currently operate in only one reportable segment.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Included in cash and cash equivalents at June 30, 2012 and December 31, 2011 is approximately $48.0 million and approximately $52.3 million, respectively, deposited with one major financial institution.

Real Estate and Identified Intangible Assets

Real estate and identified intangible assets are carried at cost, net of accumulated depreciation and amortization. Betterments, major renewals and certain costs directly related to the improvement and leasing of real estate are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is provided on a straight-line basis over the assets’ estimated useful lives, which range from 9 to 40 years. Amortization is provided on a straight-line basis over the life of the in-place leases.

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, personal property and identified intangible assets such as above and below market leases, acquired in-place leases and customer relationships) and acquired liabilities in accordance with ASC 805 Business Combinations (“ASC 805”), and ASC 350 Intangibles — Goodwill and Other (“ASC 350”), and we allocate purchase price based on these assessments. We assess fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each property and the respective tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods and market conditions. In estimating carrying costs, the Company includes estimates of lost rents at estimated market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions and expected trends.

We review the carrying value of our real estate assets and intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets, (“ASC 360”). If such reviews indicate that the asset is impaired, the asset’s carrying amount is written down to its fair value. An impairment loss is measured based on the excess of the carrying amount over the fair value. We determine fair value by using a discounted cash flow model and appropriate discount and capitalization rates. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. If our anticipated holding periods change or estimated cash flows decline based on market conditions or otherwise, an impairment loss may be recognized. Long-lived assets to be disposed of are recorded at the lower of carrying value or fair value less estimated costs to sell. There were no impairments of our wholly-owned real estate investments and intangibles for the three and six month periods ended June 30, 2012 and 2011.

Investments in Loans

We account for our investment in loans in accordance with ASC Topic 948 Financial Services — Mortgage Banking (“ASC 948”). Under ASC 948, loans expected to be held for the foreseeable future or to maturity should be held at amortized cost, and all other loans should be held at lower of cost or market (“LOCOM”), measured on an individual basis. In accordance with ASC 820 Fair Value Measurements and Disclosures (“ASC 820”), the Company includes nonperformance risk in calculating fair value adjustments. As specified in ASC 820, the framework for measuring fair value is based on observable inputs of market data.

We periodically review our loans held for investment for impairment. Impairment losses are taken for impaired loans based on the fair value of collateral and a recoverability analysis on an individual loan basis. The fair value of the collateral may be determined by an evaluation of operating cash flow from the property during the projected holding period, and/or estimated sales value computed by applying an expected capitalization rate to the current net operating income of the specific property, less selling costs. Whichever method is used, other factors considered relate to geographic trends and project diversification, the size of the portfolio and current economic conditions. When it is probable that we will be unable to collect all amounts contractually due, the loan would be considered impaired.

Interest income is generally recognized using the effective interest method or on a basis approximating a level rate of return over the term of the loan. Nonaccrual loans are those on which the accrual of interest has been suspended. Loans are placed on nonaccrual status and considered nonperforming when full payment of principal and interest is in doubt, or when principal or interest is 90 days or more past due or if cash collateral, if any, is insufficient to cover principal and interest. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred loan fees is suspended. Interest income on nonaccrual loans may be recognized only to the extent it is received in cash. However, where there is doubt regarding the ultimate collectability of loan principal, cash receipts on such nonaccrual loans are applied to reduce the carrying value of such loans. Nonaccrual loans may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the restructured terms of such loan. The Company did not have any loans on non-accrual status as of June 30, 2012 or December 31, 2011.

As discussed in Note 4, as of June 30, 2012 and December 31, 2011, we have one remaining loan investment that is part of a larger credit facility, in which we have an approximately one-third interest. Our intent is to hold the remaining loan to maturity and as such it is carried on the June 30, 2012 and December 31, 2011 balance sheets at its amortized cost basis, net of principal payments received.

Investments in Partially-Owned Entities

We invest in common equity and preferred equity interests that allow us to participate in a percentage of the underlying property’s cash flows from operations and proceeds from a sale or refinancing. At the inception of the investment, we must determine whether such investment should be accounted for as a loan, joint venture or as real estate. Investments in partially-owned entities where we exercise significant influence over operating and financial policies of the subsidiary, but do not control the subsidiary, are reported under the equity method of accounting. Under the equity method of accounting, the Company’s share of the investee’s earnings or loss is included in the Company’s operating results. As of June 30, 2012 and December 31, 2011, we held one (1) such equity investment and account for such investment under the equity method.

We assess whether there are indicators that the value of our partially owned entities may be impaired. An investment’s value is impaired if we determine that a decline in the value of the investment below its carrying value is other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated value of the investment. For the three and six month periods ended June 30, 2012, we did not recognize any impairment on investments in partially owned entities. We recognized impairment on our investments in partially-owned entities of approximately $0.1 million for the three and six month periods ended June 30, 2011 related to our SMC investment due to lower occupancy.

Rental Revenue

We recognize rental revenue in accordance with ASC 840 Leases (“ASC 840”). ASC 840 requires that revenue be recognized on a straight-line basis over the non-cancelable term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Renewal options in leases with rental terms that are higher than those in the primary term are excluded from the calculation of straight line rent if the renewals are not reasonably assured. We commence rental revenue recognition when the tenant takes control of the leased space. The Company recognizes lease termination payments as a component of rental revenue in the period received, provided that there are no further obligations under the lease. Amortization expense of above-market leases reduces rental income on a straight-line basis over the non-cancelable term of the lease. Taxes, insurance and reserves collected from tenants are separately shown as reimbursable income and corresponding payments are included in reimbursed property expenses.

Deferred Financing Costs

Deferred financing costs represent commitment fees, legal and other third party costs associated with obtaining such financing. These costs are amortized over the terms of the respective financing agreements and the amortization of such costs is reflected in interest expense. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Stock-based Compensation Plans

We have two stock-based compensation plans. We recognize compensation cost for stock-based compensation ratably over the service period of the award for employees, board members and non-employees. Compensation cost recorded for employees (including awards to non-employee directors) is measured based on the estimated fair value of the award on the grant date, and such amount is charged to compensation expense on a straight-line basis over the vesting period. Compensation cost recorded for our non-employees is adjusted in each subsequent reporting period based on the fair value of the award at the end of the reporting period until such time as the award has vested and the service being provided, if required, is substantially completed or, under certain circumstances, likely to be completed, whichever occurs first.

Derivative Instruments

We account for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). In the normal course of business, we may use a variety of derivative instruments to manage, or hedge, interest rate risk. We will require that hedging derivative instruments be effective in reducing the interest rate risk exposure they are designated to hedge. This effectiveness is essential for qualifying for hedge accounting. Some derivative instruments may be associated with an anticipated transaction. In those cases, hedge effectiveness criteria also require that it be probable that the underlying transaction will occur. Instruments that meet these hedging criteria, to the extent we elect to utilize hedge accounting, will be formally designated as hedges at the inception of the derivative contract.

To determine the fair value of derivative instruments, we may use a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date including standard market conventions and techniques such as discounted cash flow analysis, option-pricing models, replacement cost, and termination cost. All methods of assessing fair value result in a general approximation of fair value, and such value may never actually be realized.

Unrealized gain or loss on the change in the value of a derivative instrument for which hedge accounting is elected, to the extent that it is determined to be an effective hedge, is included in other comprehensive income. Realized gain or loss on a derivative instrument, as well as the unrealized gain or loss on a derivative instrument for which hedge accounting is not elected, or the portion of such derivative instrument which is not an effective hedge, will be included in net income (loss) from operations.

We may use a variety of commonly used derivative products that are considered “plain vanilla” derivatives. These derivatives typically include interest rate swaps, caps, collars and floors. Similarly, we may also become a party to the sale or “short” of U.S. Treasury securities in anticipation of entering into a fixed rate mortgage of approximately equal duration. We expressly prohibit the use of unconventional derivative instruments and using derivative instruments for trading or speculative purposes. Further, we have a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors; therefore, we do not anticipate nonperformance by any of our counterparties.

Income Taxes

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our REIT taxable income to stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to Federal income tax on our taxable income at regular corporate rates and we will not be permitted to qualify for treatment as a REIT for Federal income tax purposes for four (4) years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distributions to stockholders. We believe that we will continue to operate in such a manner as to qualify for treatment as a REIT for Federal income tax purposes. We may, however, be subject to certain state and local taxes.

Deferred tax assets and liabilities, if any, are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as operating loss and tax credit carryforwards. As a REIT, we generally will not be subject to Federal income tax on taxable income that we distribute to our stockholders and, therefore, the inclusion of Federal deferred tax assets and liabilities in our financial statements may not be applicable. Notwithstanding the foregoing, subject to certain limitations, net operating losses (“NOLs”) incurred by the Company can be treated as a carryforward for up to 20 years and utilized to reduced our taxable income in future years, thereby reducing the amount of taxable income which we are required to distribute to our stockholders in order to maintain our REIT status or, to the extent that we elect to distribute less than 100% of our taxable income to our stockholders, reducing our Federal tax liability on that portion of our taxable income which we elect not to distribute.

In assessing the potential realization of deferred tax assets, if any, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences reverse and/or NOL carryforwards are available. Management considers the scheduled reversal of deferred tax assets and liabilities, projected future taxable income, and tax planning strategies in making this assessment. As there is no assurance that the Company will generate taxable income in future periods, management does not believe that it is more likely than not that the Company will realize the benefits of these temporary differences and NOL carryforwards and therefore established a full valuation allowance at June 30, 2012 and December 31, 2011.

We account for uncertain tax positions in accordance with FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes — An Interpretation (“ASC 740”) of FASB Statement No. 109 (“FIN 48”). ASC 740 prescribes a recognition threshold and measurement attribute for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 requires that the financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts, but without considering time values. We evaluate uncertainties of tax positions taken or expected to be taken in our tax returns based on the probability of whether it is more likely than not those positions would be sustained upon audit by applicable tax authorities, based on technical merit for open tax years. We assessed the Company’s tax positions for open federal, state and local tax years from 2008 through 2012. The Company does not have any uncertain tax positions as of June 30, 2012 that would not be sustained on its technical merits on a more likely than not basis. Our policy is, if necessary, to account for interest and penalties related to uncertain tax positions as a component of our income tax provision.

Earnings per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur, if securities or other contracts to issue common stock were exercised or converted into common stock where such exercise or conversion would result in a lower earnings per share amount.

In accordance with ASC 260 Earnings Per Share, regarding the determination of whether instruments granted in share-based payments transactions are participation securities, we have applied the two-class method of computing basic EPS. This guidance clarifies that outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends or dividend equivalent payments participate in undistributed earnings with common stockholders and are considered participating securities. The Company’s excess of distributions over earnings relating to participating securities are shown as a reduction in net income (increase in net loss) available to common shareholders in the Company’s computation of EPS. The Company does not reallocate undistributed earnings to the participating securities and the common shares in the diluted earnings per share calculation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the consolidated financial statements and the accompanying notes. Significant estimates are made for the valuation of real estate and related intangibles, valuation of financial instruments, impairment assessments and fair value assessments with respect to purchase price allocations. Actual results could differ from those estimates.

Concentrations of Credit Risk

Real estate triple-net leases and financial instruments, primarily consisting of cash, mortgage loan investments and interest receivable, potentially subject us to concentrations of credit risk. We may place our cash investments in excess of insured amounts with high quality financial institutions. We perform ongoing analysis of credit risk concentrations in our real estate and loan investment portfolios by evaluating exposure to various markets, underlying property types, investment structure, term, sponsors, tenant mix and other credit metrics. Our triple-net leases rely on our underlying tenants. The collateral securing our investment in our remaining loan is real estate properties located in the U.S.

In addition, we are required to disclose fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate that value. In cases where quoted market prices are not available, fair value is based upon the application of discount rates to estimated future cash flows based on market yields or other appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). The amendments in ASU 2011-04 change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments are intended to create comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material effect on the condensed consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”), which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. This ASU does not change the items that must be reported in other comprehensive income. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011. As we have no other comprehensive income, the adoption of this standard did not have any effect on the condensed consolidated financial statements.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Measurements [Abstract]

Reconciliations of assets and liabilities measured at fair value on recurring basis using significant Level 3 inputs

Level 3 Instruments Fair Value Measurements June 30, 2011 (in millions)	Obligation to  Issue Partnership Units
Balance, December 31, 2010	$	(2.1)
Modification of OP Units (offset against investment)		1.9
Net change in unrealized loss from obligations		(0.3)
Balance, June 30, 2011	$	(0.5)

Amount of Gain (Loss) Recognized in Income on Derivatives

(in millions)	Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments	Location of (Gain) Loss Recognized in Income on Derivative	Three Months Ended June 30, 2012		Three Months Ended June 30, 2011		Six Months Ended June  30, 2012		Six Months Ended June 30, 2011
Operating partnership units	Unrealized loss on derivative instruments		$    —		$  —		$  —		$(0.3)
10-Year U.S. Treasury Note (short sale)	Unrealized loss on derivative instruments		$ (0.4)		$  —		$  —		$   —
10-Year U.S. Treasury Note (short sale)	Realized gain on derivative instruments		$   0.1		$  —		$ 0.1		$   —

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Investments in Partially Owned Entities (Details Textual) (USD $)	3 Months Ended		6 Months Ended			1 Months Ended		3 Months Ended					1 Months Ended	6 Months Ended	12 Months Ended		1 Months Ended			1 Months Ended			1 Months Ended
	Jun. 30, 2012 Property	Jun. 30, 2011	Jun. 30, 2012 Property	Jun. 30, 2011	Dec. 31, 2011	Nov. 30, 2011 Cambridge Medical Office Building Portfolio [Member] sqft	Apr. 30, 2011 Cambridge Medical Office Building Portfolio [Member]	Jun. 30, 2011 Cambridge Medical Office Building Portfolio [Member]	Dec. 31, 2011 Cambridge Medical Office Building Portfolio [Member]	Oct. 19, 2011 Cambridge Medical Office Building Portfolio [Member]	Apr. 15, 2011 Cambridge Medical Office Building Portfolio [Member]	Dec. 31, 2007 Cambridge Medical Office Building Portfolio [Member] PartnershipUnit Property	May 31, 2011 Senior Management Concepts Senior Living Portfolio [Member] Property	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Property	Dec. 31, 2007 Senior Management Concepts Senior Living Portfolio [Member]	Dec. 31, 2011 Senior Management Concepts Senior Living Portfolio [Member]	May 31, 2011 Senior Management Concepts Senior Living Portfolio [Member] Three Sold Properties [Member]	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Property in Utah [Member]	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Common Stock [Member]	May 31, 2011 Senior Management Concepts Senior Living Portfolio [Member] Common Stock [Member] Three Sold Properties [Member]	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Common Stock [Member] Property in Utah [Member]	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Preferred Stock [Member]	May 31, 2011 Senior Management Concepts Senior Living Portfolio [Member] Preferred Stock [Member] Three Sold Properties [Member]	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Preferred Stock [Member] Property in Utah [Member]	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Independent Living Units [Member]	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Independent Living Units [Member] Property in Utah [Member]	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Assisted Living Units [Member]	Jun. 30, 2012 Senior Management Concepts Senior Living Portfolio [Member] Assisted Living Units [Member] Property in Utah [Member]	Nov. 30, 2011 ERC SUB LP [Member]
Investment in Partially Owned Entities (Textual) [Abstract]
Percentage of equity interest												85.00%							10.00%		10.00%	100.00%		100.00%
Number of limited partnerships												8
Number of office buildings												9
Total investment approximately	$ 2,491,000		$ 2,491,000		$ 2,491,000				$ 72,400,000					$ 2,500,000		$ 2,500,000
Cash approximately						61,900,000								6,800,000
Held back to perform tenant improvements						2,800,000
Commitment to issue to Cambridge operating partnership units																													700,000
Investment held in the Cambridge Portfolio with a stated value						10,500,000
Total rentable area of Cambridge Portfolio						767,000
Percentage of ownership retained						15.00%
Operating Partnership units revised											200,000
Issued Warrant											300,000
Common stock	11.33		11.33		11.33						6.00
Additional tenant improvements eliminated											900,000
Fixed dollar investment, value											40,000,000
Fixed dollar investment, preferred return rate, percentage											14.00%
Fixed dollar investment, preferential distribution of cash flow from operations, percentage											12.00%
Percentage of operating losses from portfolio							85.00%
Allocated loss of approximately								1,100,000
Increase in liability associated with operating partnership								300,000
Unpaid preferred distribution of cash flow from operations										2,000,000
Proceeds from sale of investments and income from investments						42,000,000
Proceeds from sale of investments						40,800,000
Return of investment in partially-owned entities						1,200,000																	5,200,000
Number properties acquired for preferred and common equity investments														4
Units outstanding														408				120							243	60	165	60
Leases, Term															15 years
Leases Expire, Year															2022
Annual cumulative preferred return															15.00%
Common equity return payable, years															10 years
Common equity return payable threshold, budgeted free cash flow after payment of debt service and preferred return, percentage															10.00%
Common Equity Return Payable Threshold Proceeds from Sale of Properties, Percentage															10.00%
Right to Put Common Equity Interests After Notice At Fair Market Value Determined by Third-Party Appraiser, Period															30 days
Option to Put Preferred Equity Interest at Par, Date															Jan. 01, 2016
Proceeds from Sale, Maturity and Collection of Investments, Total																	6,600,000
Return of common equity investment	81,000	1,384,000	162,000	771,000																900,000
Proceeds for outstanding delinquent preferred return and default interest payments																	400,000
Security deposit																	400,000
Number of real estate properties held	10		10											4
Number of real estate properties sold													3
Received excess																	12,000
Preferential distribution of cash flow from Operations								$ 1,200,000

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 12 — Commitments and Contingencies

The table below summarizes our remaining contractual obligations as of June 30, 2012.

Amounts in millions	2012		2013		2014		2015		2016		2017		Thereafter		Total
Mortgage notes payable and related interest	$	3.7	$	7.5	$	7.5	$	81.4	$	1.0	$	1.0	$	10.2	$	112.3
Base Service Fee Obligations (1)		0.2		0.5		—		—		—		—		—		0.7
Operating Lease Obligations (2)		0.2		0.2		0.2		0.2		0.2		0.2		0.4		1.6
Total	$	4.1	$	8.2	$	7.7	$	81.6	$	1.2	$	1.2	$	10.6	$	114.6

(1) TREIT base service fee, subject to increase or decrease based on changes in shareholders’ equity. The termination fee payable to TREIT in the event of non-renewal of the Services Agreement by the Company is not fixed and determinable and is therefore not included in the table.

(2) Minimum rental obligations for Company office lease.

For the three and six month periods ended June 30, 2012 and 2011, rent expense for the Company’s office lease was approximately $0.1 million and $0.1 million, respectively.

Litigation

Care is not presently involved in any material litigation or, to our knowledge, is any material litigation threatened against us or our investments, other than routine litigation arising in the ordinary course of business. Management believes the costs, if any, incurred by us related to litigation will not materially affect our financial position, operating results or liquidity.