Equity

Common Equity

As of September 30, 2016, the Company had received aggregate gross offering proceeds of approximately $1.4 billion from the sale of shares in the Private Offering, the Public Offerings, and the DRP Offerings, as discussed in Note 1, Organization. There were 175,945,568 shares outstanding at September 30, 2016, including shares issued pursuant to the DRP, less shares redeemed pursuant to the share redemption program discussed below.

Distribution Reinvestment Plan (DRP)

The Company has adopted a DRP, which allows stockholders to have distributions otherwise distributable to them invested in additional shares of common stock. No sales commissions or dealer manager fees are paid on shares sold through the DRP. The Company may amend or terminate the DRP for any reason at any time upon 10 days' prior written notice to stockholders. (See Note 13, Subsequent Events — Amended and Restated Distribution Reinvestment Plan, for a discussion on the current status of the Company's distribution reinvestment plan.)

As of September 30, 2016 and December 31, 2015, the Company had issued approximately $149.5 million and $110.2 million in shares of common stock, respectively, under the DRP, pursuant to the Private Offering, the Public Offerings, and the DRP Offerings.

Share Redemption Program

The Company has adopted a share redemption program ("SRP") that enables stockholders to sell their stock to the Company in limited circumstances. As long as the common stock is not listed on a national securities exchange or over-the-counter market, stockholders who have held their stock for at least one year may, under certain circumstances, be able to have all or any portion of their shares of stock redeemed by the Company. During any calendar year, the Company will not redeem more than 5% of the weighted average number of shares outstanding during the prior calendar year. The cash available for redemption will be limited to the proceeds from the sale of shares pursuant to the DRP. Effective March 17, 2013, the redemption price per share shall be as shown below, which is based upon the number of years the stock is held:



Period of Time Held		Redemption Price
At least one year		Lower of $9.25 or the price paid by the stockholder
At least two years		Lower of $9.50 or the price paid by the stockholder
At least three years		Lower of $9.75 or the price paid by the stockholder
At least four years		Lower of $10.28 or the price paid by the stockholder

As the use of the proceeds from the DRP for redemptions is outside the Company’s control, the net proceeds from the DRP are considered to be temporary equity and are presented as common stock subject to redemption on the accompanying consolidated balance sheets. The cumulative proceeds from the DRP, net of any redemptions, will be computed at each reporting date and will be classified as temporary equity on the Company’s consolidated balance sheets. As noted above, the redemption is limited to proceeds from new permanent equity from the sale of shares pursuant to the DRP. (See Note 13, Subsequent Events — Amendment to Share Redemption Program, for a discussion on the current status of the Company's share redemption program.)

Redemption requests will be honored on or about the last business day of the month following the end of each quarter. Requests for redemption must be received on or prior to the end of the quarter in order for the Company to repurchase the shares as of the end of the following month. Since inception and through September 30, 2016, the Company had redeemed 4,768,238 shares of common stock for approximately $47.2 million at a weighted average price per share of $9.91 pursuant to the SRP. As of September 30, 2016, there were 1,159,442 shares totaling approximately $11.6 million subject to redemption requests. The Company’s board of directors may choose to amend, suspend, or terminate the SRP upon 30 days' written notice at any time.

Noncontrolling Interests

Noncontrolling interests represent limited partnership interests in the Operating Partnership in which the Company is the general partner. General partnership units and limited partnership units of the Operating Partnership were issued as part of the initial capitalization of the Operating Partnership, and limited partnership units were issued in conjunction with management's contribution of certain assets, as discussed in Note 1, Organization.

As of September 30, 2016, noncontrolling interests were approximately 3% of total shares and weighted average shares outstanding (both measures assuming limited partnership units were converted to common stock). The Company has evaluated the terms of the limited partnership interests in the Operating Partnership and as a result, has classified limited partnership interests issued in the initial capitalization and in conjunction with the contributed assets as noncontrolling interests, which are presented as a component of permanent equity, except as discussed below.

The Company evaluates individual noncontrolling interests for the ability to recognize the noncontrolling interest as permanent equity on the consolidated balance sheets at the time such interests are issued and on a continual basis. Any noncontrolling interest that fails to qualify as permanent equity has been reclassified as temporary equity and adjusted to the greater of (a) the carrying amount or (b) its redemption value as of the end of the period in which the determination is made.

As part of the acquisition of the remaining 90% beneficial interest in the HealthSpring property, the Company, through the Operating Partnership, issued approximately $11.9 million in limited partnership units of the Operating Partnership in April 2016, which is included in noncontrolling interest on the Company's balance sheet, as a component of permanent equity. (See Note 4, Investments, for additional detail.)

The Operating Partnership issued 6.6 million limited partnership units to affiliated parties and unaffiliated third parties in exchange for certain properties and 0.1 million limited partnership units to unaffiliated third parties unrelated to property contributions. To the extent the contributors should elect to redeem all or a portion of their Operating Partnership units, pursuant to the terms of the respective contribution agreement, such redemption shall be at a per unit value equivalent to the price at which the contributor acquired its limited partnership units in the respective transaction.

The limited partners of the Operating Partnership, other than those related to the Will Partners REIT, LLC ("Will Partners" property) contribution, will have the right to cause the general partner of the Operating Partnership, the Company, to redeem their limited partnership units for cash equal to the value of an equivalent number of shares, or, at the Company’s option, purchase their limited partnership units by issuing one share of the Company’s common stock for the original redemption value of each limited partnership unit redeemed. These rights may not be exercised under certain circumstances which could cause the Company to lose its REIT election. There were no redemption requests during the nine months ended September 30, 2016 and year ended December 31, 2015.

The following summarizes the activity for noncontrolling interests recorded as equity for the nine months ended September 30, 2016 and year ended December 31, 2015:



	Nine Months Ended September 30, 2016			Year Ended December 31, 2015
Beginning balance	$	21,318		$	17,478
Contribution/issuance of noncontrolling interests	11,941			7,282
Distributions to noncontrolling interests	(3,022		)	(3,150		)
Allocated distributions to noncontrolling interests subject to redemption	(9		)	(10		)
Net income (loss)	896			(138		)
Other comprehensive loss	(622		)	(144		)
Ending balance	$	30,502		$	21,318

Noncontrolling interests subject to redemption

Operating partnership units issued pursuant to the Will Partners property contribution are not included in permanent equity on the consolidated balance sheets. The partners holding these units can cause the general partner to redeem the units for the cash value, as defined in the operating partnership agreement. As the general partner does not control these redemptions, these units are presented on the consolidated balance sheets as noncontrolling interest subject to redemption at their redeemable value. The net income (loss) and distributions attributed to these limited partners is allocated proportionately between common stockholders and other noncontrolling interests that are not considered redeemable.