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Subsequent Events
6 Months Ended
Jun. 30, 2012
Subsequent Events

11. Subsequent Events

On July 3, 2012, we entered into master lease agreements with certain subsidiaries of Prime, which replace the current leases with the same tenants covering the same properties. The master lease agreements with Prime cover 10 properties with a total lease base of $251 million. The master leases are for 10 years and contain two renewal options of five years each. The initial lease rate is generally consistent with the blended average rate of the prior lease agreements, which generated annual cash rents of $26 million. However, the annual escalators, which in the prior leases were limited, have been increased to reflect 100% of CPI increases, along with a minimum floor. The master leases include repurchase options substantially similar to those in the prior leases, including provisions establishing minimum repurchase prices equal to our total investment.

In addition, we funded a new $100 million mortgage loan secured by the real property of Centinela Hospital Medical Center. The mortgage loan, the master lease agreements discussed above and two other hospitals previously mortgaged to us are all cross-defaulted with one another.