Operating Real Estate

6 Months Ended

Jun. 30, 2019

The following table presents operating real estate, net as of June 30, 2019 and December 31, 2018 (dollars in thousands):



	June 30, 2019 (Unaudited)			December 31, 2018
Land	$	236,036		$	236,736
Land improvements	22,620			22,453
Buildings and improvements	1,560,418			1,580,058
Tenant improvements	13,439			11,774
Construction in progress	4,943			5,605
Furniture, fixtures and equipment	95,495			93,371
Subtotal	$	1,932,951		$	1,949,997
Less: Accumulated depreciation	(199,932		)	(171,083		)
Operating real estate, net	$	1,733,019		$	1,778,914

Within the table above, buildings and improvements have been reduced by impairment totaling $41.0 million and $31.0 million as of June 30, 2019 and December 31, 2018, respectively. Impairment loss, as presented on the consolidated statements of operations, totaled $10.1 million and $5.2 million for the six months ended June 30, 2019 and 2018, respectively.

Future Minimum Rental Income

Minimum rental amounts due under leases are generally either subject to scheduled fixed increases or adjustments. The following table presents approximate future minimum rental income under noncancelable operating leases to be received over the next five years and thereafter as of June 30, 2019 (dollars in thousands):



July 1 to December 31, 2019⁽¹⁾	$	16,721
Years Ending December 31:⁽¹⁾
2020	34,282
2021	35,139
2022	14,910
2023	10,919
Thereafter	68,268
Total	$	180,239

_______________________________________


(1)	Excludes rental income from residents at ILFs that are subject to short-term leases.

As of December 31, 2018, approximate future minimum rental income under noncancelable operating leases to be received over the next five years and thereafter was as follows (dollars in thousands):



Years Ending December 31:⁽¹⁾
2019	$	33,405
2020	34,240
2021	35,096
2022	14,635
2023	10,919
Thereafter	68,268
Total	$	196,563

_______________________________________


(1)	Excludes rental income from residents at ILFs that are subject to short-term leases.

Net lease rental properties owned as of June 30, 2019 are leased under noncancelable operating leases with current expirations ranging from 2021 to 2029, with certain tenant renewal rights. These net lease arrangements require the tenant to pay rent and substantially all the expenses of the leased property including maintenance, taxes, utilities and insurance. For certain properties, the tenants pay the Company, in addition to the contractual base rent, their pro rata share of real estate taxes and operating expenses. The Company’s net lease agreements provide for periodic rental increases based on the greater of certain percentages or increase in the consumer price index.

Dispositions

In May 2019, the Company completed the sale of two properties within the Peregrine portfolio for $19.7 million. The sale generated net proceeds of $3.3 million after the repayment of the outstanding mortgage principal balance of $16.4 million and transaction costs.