REAL ESTATE PROPERTIES HELD FOR INVESTMENT

The Company’s real estate properties held for investment consisted of the following (dollars in thousands):

As of June 30, 2014



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	102	11,460	$	825,011	$	(145,207	)	$	679,804
Senior Housing	26	1,966	205,003		(15,955		)	189,048
Acute Care Hospitals	2	124	175,807		(8,422		)	167,385
	130	13,550	1,205,821		(169,584		)	1,036,237
Corporate Level			254		(179		)	75
			$	1,206,075	$	(169,763	)	$	1,036,312

As of December 31, 2013



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	96	10,826	$	737,188	$	(132,068	)	$	605,120
Senior Housing	23	1,518	153,247		(13,337		)	139,910
Acute Care Hospitals	2	124	175,807		(5,520		)	170,287
	121	12,468	1,066,242		(150,925		)	915,317
Corporate Level			254		(153		)	101
			$	1,066,496	$	(151,078	)	$	915,418



	June 30, 2014			December 31, 2013
Building and improvements	$	1,000,240		$	879,926
Furniture and equipment	57,891			50,567
Land improvements	4,393			4,392
Land	143,551			131,611
	1,206,075			1,066,496
Accumulated depreciation	(169,763		)	(151,078		)
	$	1,036,312		$	915,418

Operating Leases

As of June 30, 2014, all of the Company’s real estate properties were leased under triple-net operating leases with expirations ranging from seven to 18 years. As of June 30, 2014, the leases had a weighted-average remaining term of 10 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 letters of credit and security deposits from the lessee or guarantees from the parent of the lessee or other related parties. Security deposits received in cash related to tenant leases are included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets and totaled $0.5 million and $1.6 million as of June 30, 2014 and December 31, 2013, respectively. As of June 30, 2014, 81 of the Company's 130 real estate properties held for investment were leased to subsidiaries of Genesis.

The Company monitors the creditworthiness of its tenants by reviewing credit ratings (if available) and evaluating the ability of the tenants to meet their lease obligations to the Company based on the tenants’ financial performance, including the evaluation of any parent guarantees (or the guarantees of other related parties) 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 earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”) to rent coverage and earnings before interest, taxes, depreciation, amortization, rent and management fees (“EBITDARM”) to rent coverage at the facility level and consolidated EBITDAR to total fixed charge coverage at the parent guarantor level when such a guarantee exists (currently the Genesis lease portfolio). 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.

As of June 30, 2014, the future minimum rental payments from the Company’s properties under non-cancelable operating leases were as follows (in thousands):



July 1, 2014 through December 31, 2014	$	67,130
2015	139,039
2016	141,993
2017	145,642
2018	149,414
Thereafter	944,560
	$	1,587,778