Real Estate Investments, Net (Tables)

12 Months Ended

Dec. 31, 2019

Real Estate [Abstract]

Schedule of Business Acquisitions, by Acquisition

The following table presents the allocation of the assets acquired and liabilities assumed, as well as capitalized construction in progress during the years ended December 31, 2019, 2018 and 2017:

	Year Ended December 31,
(In thousands)	2019			2018			2017
Real estate investments, at cost:
Land	$	6,356		$	14,417		$	18,501
Buildings, fixtures and improvements	68,903			98,236			135,344
Development costs	5,721			8,591			11,952
Total tangible assets	80,980			121,244			165,797
Acquired intangibles:
In-place leases and other intangible assets (1)	11,777			6,823			21,546
Market lease and other intangible assets (1)	724			275			2,472
Market lease liabilities (1)	(1,483		)	(286		)	(888		)
Total intangible assets and liabilities	11,018			6,812			23,130
Mortgage notes payable, net	—			—			(4,897		)
Other liabilities assumed in the Asset Acquisition, net (2)	—			—			(1,056		)
Cash paid for real estate investments, including acquisitions	$	91,998		$	128,056		$	182,974
Number of properties purchased	9			14			23

_______________

⁽¹⁾  Weighted-average remaining amortization periods for in-place leases and above-market and below market lease liabilities acquired were 8.1 years and 7.0 years as of December 31, 2019.

⁽²⁾ Includes liabilities of $0.8 million in accounts payable and accrued expenses, $0.5 million in non-controlling interests and $0.1 million in deferred rent and includes assets of $0.2 million in cash and $0.2 million in restricted cash related to the Company’s acquisition from American Realty Capital Healthcare Trust III, Inc. (“HT III”) of 19 properties comprising substantially all of HT III’s assets (the “Asset Purchase”), pursuant to a purchase agreement (the “Purchase Agreement”), dated as of June 16, 2017. HT III was sponsored and advised by an affiliate of the Advisor. See Note 9 — Related Party Transactions and Arrangements for additional information.

At closing of the transfer of operations, the Company assumed the following assets and liabilities which are included in the consolidated balance sheet within the line items as shown below. The amounts below reflect the fair values of these assets and liabilities, as of the transfer closing date, to the appropriate financial statement line as shown below.

(In thousands)	June 8, 2017
Buildings, fixtures and improvements	$	723
Cash and cash equivalents	865
Prepaid expenses and other assets	651
Total assets acquired	$	2,239
Accounts payable and accrued expenses	$	1,188
Deferred rent	744
Total liabilities acquired	$	1,932
Gain on acquisition	$	307

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas

The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of consolidated annualized rental income on a straight-line basis for all properties as of December 31, 2019, 2018 and 2017:

	December 31,
State	2019	2018	2017
Florida (1)	25.2%	16.6%	17.5%
Georgia	*	10.1%	10.7%
Michigan (2)	10.9%	13.1%	11.6%
Pennsylvania	*	10.2%	10.8%

_______________

* State’s annualized rental income on a straight-line basis was not greater than 10% of total annualized rental income for all portfolio properties as of the period specified.

⁽¹⁾  As of December 31, 2019, the Company was considering plans to sell three assets in Florida including the recently completed development project in Jupiter, Florida and its two skilled nursing facilities in Lutz, Florida and Wellington, Florida . See “Assets Held for Use and Related Impairments” in this note for more information.

⁽²⁾ 

As of December 31, 2019, the Company had 14 SHOP assets located in Michigan (the “Michigan SHOPs”) that are under contract to be sold pursuant to a definitive purchase and sale agreement (“PSA”). See “Assets Held for Sale and Related Impairments” in this note for more information.

Schedule of Acquired Finite-Lived Intangible Assets by Major Class

Acquired intangible assets and liabilities consisted of the following as of the periods presented:

	December 31, 2019						December 31, 2018
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets:
In-place leases	$	229,300	$	156,428	$	72,872	$	214,953	$	144,669	$	70,284
Market lease assets (1)	13,616		9,501		4,115		30,910		9,970		20,940
Other intangible assets	26,700		1,144		25,556		10,589		1,103		9,486
Total acquired intangible assets	$	269,616	$	167,073	$	102,543	$	256,452	$	155,742	$	100,710
Intangible liabilities:
Market lease liabilities (1)	$	21,777	$	9,725	$	12,052	$	26,241	$	9,137	$	17,104

__________

⁽¹⁾ Effective January 1, 2019, upon the adoption of ASU 2016-02, any amounts related to ground leases are included in operating lease right-of-use assets on the Company’s consolidated balance sheet. See Note 2 — Summary of Significant Accounting Polices - Recently Issued Accounting Pronouncements for additional information.

Schedule of Finite-Lived Intangible Assets

The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangible assets, amortization and accretion of above-and below-market lease assets and liabilities, net and the amortization of above-and below-market ground leases, for the periods presented:

	Year Ended December 31,
(In thousands)	2019			2018			2017
Amortization of in-place leases and other intangible assets(1)	$	15,559		$	18,851		$	17,369
Accretion of above-and below-market leases, net(2)	$	(247	)	$	(39	)	$	(308	)
Amortization of above-and below-market ground leases, net(3)	$	86		$	147		$	172

____________

⁽¹⁾  Reflected within depreciation and amortization expense.

⁽²⁾  Reflected within revenue from tenants.

⁽³⁾  Reflected within property operating and maintenance expense. Upon adoption of ASC 842 effective January 1, 2019, intangible balances related to ground leases were reclassified to be included as part of the Operating lease right-of-use assets presented on the consolidated balance sheet with no change to placement of the amortization expense of such balances. Refer to Note 2 — Summary of Significant Accounting Policies for additional details.

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table provides the projected amortization and adjustments to revenue from tenants for the next five years:

(In thousands)	2020			2021			2022			2023			2024
In-place lease assets	$	13,115		$	10,650		$	8,644		$	6,770		$	6,009
Other intangible assets	414			414			414			414			389
Total to be added to amortization expense	$	13,529		$	11,064		$	9,058		$	7,184		$	6,398
Above-market lease assets	$	(1,295	)	$	(933	)	$	(645	)	$	(307	)	$	(260	)
Below-market lease liabilities	1,488			1,269			1,208			1,095			955
Total to be added to revenue from tenants	$	193		$	336		$	563		$	788		$	695

Real Estate Sales

The following table summarizes the properties sold during the years ended December 31, 2019, 2018 and 2017:

(In thousands)	Disposition Date	Contract Sale Price		Gain (Loss) on Sale, of Real Estate Investments
2019 Dispositions:
New York Six MOBs (1 property)	August 22, 2019	$	13,600	$	2,883
Ocean Park (1)	August 1, 2019	3,600		(152		)
New York Six MOBs (5 properties)	February 6, 2019	45,000		6,059
Totals		$	62,200	$	8,790
2018 Dispositions:
Missouri SNF Properties (1)	December 5, 2018	$	27,500	$	(70	)
2017 Dispositions:
Dental Arts Building - Peoria, AZ	May 16, 2017	$	825	$	438

__________

⁽¹⁾ These properties were previously impaired. See “Impairments” section below.

The following is a summary of impairments taken during the years ended December 31, 2019, 2018 and 2017:

	Year Ended December 31,
(In thousands)	2019		2018		2017
Assets held for sale	$	22,634	$	18,255	$	—
Assets held for use	33,335		2,400		18,993
Total	$	55,969	$	20,655	$	18,993

The following table details the major classes of assets associated with the properties that have been classified as held for sale as of December 31, 2019 and 2018:

	December 31,
(In thousands)	2019		2018 (1)
Land	$	4,051	$	5,285
Buildings, fixtures and improvements	66,788		47,112
Assets held for sale	$	70,839	$	52,397

_________

⁽¹⁾ Represents assets of the New York Six MOB. The Company also had liabilities associated with the held-for-sale New York Six MOBs of $3.5 million which is presented within Market lease intangible liabilities, net, and $0.5 million which is presented within Accounts Payable and Accrued Expenses on the Consolidated Balance Sheet as of December 31, 2018.