REAL ESTATE INVESTMENTS

6 Months Ended

Jun. 30, 2012

Real Estate Investments, Net [Abstract]

Real Estate Investments

REAL ESTATE INVESTMENTS

The Company’s investments in real estate consisted of the following (dollars in thousands):

As of June 30, 2012

Property Type	Number of Properties	Number of Beds/Units	Total Real Estate at Cost		Accumulated Depreciation			Total Real Estate Investments, Net
Skilled Nursing/Post-Acute	93	10,549	$	712,458	$	(112,476	)	$	599,982
Senior Housing	9	773	47,892		(9,021		)	38,871
Acute Care Hospital	1	70	61,640		(2,077		)	59,563
	103	11,392	821,990		(123,574		)	698,416
Corporate Level			239		(77		)	162
			$	822,229	$	(123,651	)	$	698,578

As of December 31, 2011

Property Type	Number of Properties	Number of Beds/Units	Total Real Estate at Cost		Accumulated Depreciation			Total Real Estate Investments, Net
Skilled Nursing/Post-Acute	87	10,034	$	658,222	$	(99,570	)	$	558,652
Senior Housing	9	773	47,192		(8,140		)	39,052
Acute Care Hospital	1	70	61,640		(1,154		)	60,486
	97	10,877	767,054		(108,864		)	658,190
Corporate Level			239		(52		)	187
			$	767,293	$	(108,916	)	$	658,377

	June 30, 2012			December 31, 2011
Building and improvements	$	670,605		$	626,877
Furniture and equipment	46,043			44,045
Land improvements	4,640			4,640
Land	100,941			91,731
	822,229			767,293
Accumulated depreciation	(123,651		)	(108,916		)
	$	698,578		$	658,377

Operating Leases

As of June 30, 2012, all of the Company’s real estate properties are leased under triple-net operating leases with expirations ranging from nine to 22 years. As of June 30, 2012, the leases have a weighted-average remaining term of 12 years. The leases include provisions to extend the lease terms and other negotiated terms and conditions. The Company, through its subsidiaries, retains substantially all of the risks and benefits of ownership of the real estate assets leased to the tenants. In addition, the Company may receive additional security under these operating leases in the form of security deposits from the lessee or guarantees from the parent of the lessee. As of June 30, 2012, 86 of the Company's 103 real estate properties were leased to subsidiaries of Sun Healthcare Group, Inc. (“Sun”).

The Company monitors the creditworthiness of its tenants by reviewing credit ratings (if available) and evaluating the ability of tenants to meet their lease obligations to the Company based on the tenants' financial performance, including the evaluation of any parent guarantees of tenant lease obligations. Because formal credit ratings may not be available for most of the Company's tenants, the primary basis for the Company's evaluation of the credit quality of its tenants (and more specifically the tenants' ability to pay their rent obligations to the Company) is the tenants' lease coverage ratios. These coverage ratios include EBITDAR to rent coverage and EBITDARM to rent coverage at the facility level and consolidated EBITDAR to total rent coverage at the parent guarantor level when such a guarantee exists (currently the Sun lease portfolio). EBITDARM is defined as EBITDAR before management fees. The Company obtains various financial and operational information from its tenants each month and reviews this information in conjunction with the above-described coverage metrics to determine trends and the operational and financial impact of the environment in the industry (including the impact of government reimbursement) and the management of the tenant's operations. These metrics help the Company identify potential areas of concern relative to its tenants' credit quality and ultimately the tenants' ability to generate sufficient liquidity to meet its obligations, including its obligation to continue to pay the rent due to the Company. For further discussion of the Company's tenant and revenue concentration, see “Note 11. Commitments and Contingencies—Concentration of Credit Risk.”

As of June 30, 2012, the future minimum rental income from the Company’s properties under non-cancelable operating leases is as follows (in thousands):

July 1, 2012 through December 31, 2012	$	50,633
2013	101,267
2014	101,267
2015	101,267
2016	101,267
Thereafter	711,325
	$	1,167,026