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Real Estate Investments, Net
 12 Months Ended
Dec. 31, 2021
Real Estate [Abstract]  
Real Estate Investments, Net Real Estate Investments, Net
Property Acquisitions and Development Costs
The Company invests in healthcare-related facilities, primarily MOBs and seniors housing properties which expand and diversify its portfolio and revenue base. The Company owned 202 properties as of December 31, 2021. During the year ended December 31, 2021, the Company, through wholly-owned subsidiaries of the OP, completed its acquisitions of five multi-tenant MOBs and 12 single tenant MOBs for an aggregate contract purchase price of $160.2 million. All acquisitions in 2021, 2020 and 2019 were considered asset acquisitions for accounting purposes.
The following table presents the allocation of the assets acquired and liabilities assumed, as well as development costs during the years ended December 31, 2021, 2020 and 2019:
Year Ended December 31,
(In thousands)202120202019
Real estate investments, at cost:
Land$12,848 $7,665 $6,356 
Buildings, fixtures and improvements121,376 90,699 68,903 
Development costs— — 5,721 
Total tangible assets134,224 98,364 80,980 
Acquired intangibles:
In-place leases and other intangible assets (1)
28,499 10,369 11,777 
Market lease and other intangible assets (1)
794 496 724 
Market lease liabilities (1)
(1,639)(362)(1,483)
Total intangible assets and liabilities
27,654 10,503 11,018 
Mortgage notes payable, net— (13,883)— 
Issuance of Series A Preferred OP Units(2,578)— — 
Cash paid for real estate investments, including acquisitions$159,300 $94,984 $91,998 
Number of properties purchased17 9 9 
_______________
(1) Weighted-average remaining amortization periods for in-place leases, above-market leases and below market leases acquired were 11.2, 10.2 years and 8.5 years, respectively, as of December 31, 2021. Weighted-average remaining amortization periods for in-place leases and above-market leases acquired were 1.7 years, 7.7 years and 7.4 years, respectively, as of December 31, 2020.
Significant Tenants
As of December 31, 2021, 2020 and 2019, the Company did not have any tenants (including for this purpose, all affiliates of such tenants) whose annualized rental income on a straight-line basis represented 10% or greater of total annualized rental income on a straight-line basis for the portfolio. 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, 2021, 2020 and 2019:
December 31,
State202120202019
Florida (1)
17.7%20.6%25.2%
Michigan (2)
**10.9%
Pennsylvania*10.4*
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*    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)In May 2021, the Company’s skilled nursing facility in Wellington, Florida, and the Company’s development property in Jupiter, Florida were sold. In December 2020, the Company’s skilled nursing facility in Lutz, Florida was sold.
(2)During the year ended December 31, 2020, the Company sold 11 SHOPs located in Michigan, seven of which were transferred to the buyer during the fourth quarter of 2020 and four of which were transferred to the buyer during the first quarter of 2021.
Intangible Assets and Liabilities
Acquired intangible assets and liabilities consisted of the following as of the periods presented:
December 31, 2021December 31, 2020
(In thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Intangible assets:
In-place leases$264,741 $183,073 $81,668 $241,097 $172,648 $68,449 
Market lease assets14,164 11,212 2,952 14,116 10,845 3,271 
Other intangible assets9,467 1,006 8,461 20,802 1,171 19,631 
Total acquired intangible assets
$288,372 $195,291 $93,081 $276,015 $184,664 $91,351 
Intangible liabilities:
Market lease liabilities $23,472 $12,529 $10,943 $22,109 $11,306 $10,803 
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)202120202019
Amortization of in-place leases and other intangible assets (1)
$15,071 $15,121 $15,559 
Accretion of above-and below-market leases, net (2)
$(422)$(257)$(247)
Amortization of above-and below-market ground leases, net (3)
$214 $178 $86 
________
(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.
The following table provides the projected amortization and adjustments to revenue from tenants for the next five years:
(In thousands)20222023202420252026
In-place lease assets$14,324 $12,227 $10,691 $9,103 $8,052 
Other intangible assets10 10 10 10 10 
Total to be added to amortization expense$14,334 $12,237 $10,701 $9,113 $8,062 
Above-market lease assets$(814)$(468)$(389)$(336)$(302)
Below-market lease liabilities1,625 1,512 1,294 1,103 941 
Total to be added to revenue from tenants$811 $1,044 $905 $767 $639 
Dispositions
The following table summarizes the properties sold during the years ended December 31, 2021, 2020 and 2019:
(In thousands)Disposition DateContract Sale PriceGain (Loss)
on Sale, of Real Estate Investments
2021 Dispositions:
Hampton River Portfolio (two properties)
December 21, 2021$37,800 $1,323 
NuVista Jupiter (1)
May 14, 202165,000 2,383 
Wellington Green (2)
May 14, 202130,750 114 
Michigan SHOPs (four properties) (3)
January 15, 2021— (172)
Totals$133,550 $3,648 
2020 Dispositions:
Lutz (4)
December 15, 2020$20,000 $3,832 
Michigan SHOPs (seven properties) (3)
November 2, 202011,750 (908)
Cape GirardeauMarch 19, 20208,600 2,306 
Totals$40,350 $5,230 
2019 Dispositions:
New York Six MOBs (one property)
August 22, 2019$13,600 $2,883 
Ocean Park (5)
August 1, 20193,600 (152)
New York Six MOBs (five properties)
February 6, 201945,000 6,059 
Totals$62,200 $8,790 
______
(1)Impairment charges of $14.6 million and $19.8 million were recorded during the years ended December 31, 2020 and 2019, respectively.
(2)Impairment charges of $0.9 million, $2.3 million and $9.9 million were recorded during the years ended December 31, 2021, 2020 and 2019, respectively.
(3)Impairment charges of $19.6 million and $22.6 million were recorded during the years ended December 31, 2020 and 2019, respectively. The contract sales price for all 11 properties was received in November of 2020. Loss on sale amounts relate to the properties transferred at the respective dates.
(4)Impairment charges of $3.6 million were recorded during the year ended December 31, 2019.
(5)Impairment charges of $19,000 were recorded during the year ended December 31, 2019.

The sales of the properties noted above did not represent a strategic shift that has a major effect on the Company’s operations and financial results. Accordingly, the results of operations of these properties remain classified within continuing operations for all periods presented until the respective sale dates.
2021 Dispositions
During the fourth quarter of 2021, the Company sold two MOBs in Virginia for an aggregate contract purchase price of $37.8 million, which resulted in gains on sale of $1.3 million. These gains are included in the consolidated statement of operations for the year ended December 31, 2021. No impairments were previously recorded on these properties.
During the second quarter of 2021, the Company sold its skilled nursing facility in Wellington, Florida and its development property in Jupiter, Florida, which resulted in gains on sale of $0.1 million and $2.4 million, respectively. These gains are included in the consolidated statement of operations for the year ended December 31, 2021. The Company had previously recorded impairments on these properties (see dispositions table above).
During the first quarter of 2021, the Company transferred four SHOP properties located in Michigan to the buyer at a second closing, and $0.8 million held in escrow was released to the buyer. This amount had been placed in escrow at the first closing of the transaction during the year ended December 31, 2020 when the purchase price for all 11 properties sold in the transaction was received from the buyer. The Company recorded a loss on sale of $0.2 million related to this transaction in the year ended December 31, 2021. The Company had previously recorded impairments on these properties (see dispositions table above).
2020 Dispositions
On December 16 2020, the Company completed the sale of its skilled nursing facility in Lutz, Florida for a contract purchase price of $20.0 million, resulting in a gain on sale of real estate investments of $3.8 million recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021. At closing, $17.6 million of net proceeds were used to repay amounts outstanding under the Revolving Credit Facility. The Company had previously recorded impairments on these properties (see dispositions table above).
On November 2, 2020 the initial closing under the PSA pursuant to which the Company had agreed to sell 11 Michigan SHOPs occurred. The contract purchase price for the 11 Michigan SHOPs was $11.8 million, resulting in a loss on sale of $0.9 million on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021. At the initial closing, the Company received payment of the full $11.8 million sales price for all 11 of the Michigan SHOPs, less $0.8 million held in escrow, and transferred seven of the properties to the buyer. The remaining four properties were transferred to the buyer a second closing separate closings in the first quarter of 2021 when the $0.8 million held in escrow was released to the buyer. Of the properties transferred at the initial closing, four had been part of the borrowing base under the Credit Facility, one was part of the collateral pool under the Fannie Mae Master Credit Facility with Capital One and two were unencumbered. Of the properties transferred at the second closing, three were part of the borrowing base under the Credit Facility until the initial closing and one was unencumbered. At the initial closing, $4.2 million of the net proceeds was used to repay amounts outstanding under the Fannie Mae Master Credit Facility with Capital One, $4.4 million of the net proceeds were used to repay amounts outstanding under the Revolving Credit Facility, with the remainder used for closing costs. For the avoidance of any doubt, all impairments related to the disposal of the 11 Michigan SHOP assets were recognized in the year ended December 31, 2020. The Company had previously recorded impairments on these properties (see dispositions table above).
On March 19, 2020 the Company disposed of one MOB property for a contract purchase price of $8.6 million, resulting in a gain on sale of $2.3 million.
2019 Dispositions
On February 6, 2019, the Company sold five of the MOB properties within the State of New York (the “New York Six MOBs”) for a contract sales price of $45.0 million, resulting in a gain on sale of real estate investments of $6.1 million which is included on the Consolidated Statement of Operations for the year ended December 31, 2019. The Company had reconsidered the intended holding period for all six of the New York Six MOBs due to various market conditions and the potential to reinvest in properties generating a higher yield. On July 26, 2018, the Company had originally entered into a PSA for the sale of the New York Six MOBs, for an aggregate contract sale price of approximately $68.0 million and subsequently, on September 25, 2018, the Company further amended the PSA to decrease the aggregate contract sale price to $58.8 million. The one remaining New York Six MOB was sold for a contract sales price of $13.6 million on August 22, 2019, resulting in a gain on sale of real estate investments of $2.9 million recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2019. No impairments were previously recorded on these properties.
During the first quarter of 2019, the Company reconsidered the intended holding period for one of its SHOPs located in Brookings, OR (“Ocean Park”) due to various market conditions and the potential to reinvest in properties generating a higher yield. On March 21, 2019, the Company entered into a PSA for the sale of Ocean Park, for an aggregate contract sale price of approximately $3.6 million. On April 1, 2019, the Company amended the purchase and sale agreement to decrease the aggregate contract sale price to $3.5 million. In connection with this amendment, the Company recognized an impairment
charge of approximately $19,000 on Ocean Park during the second quarter of 2019, which is included on the consolidated statement of operations and comprehensive loss. On August 1, 2019, the Company closed its disposition of Ocean Park resulting in a loss on sale of real estate investments of $0.2 million recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2019.
Impairments
The following is a summary of impairments taken during the years ended December 31, 2021, 2020 and 2019:
Year Ended December 31,
(In thousands)202120202019
Assets held for sale$— $19,570 $22,634 
Assets held for use40,951 16,876 33,335 
Total$40,951 $36,446 $55,969 
For additional information on impairments related to assets held for sale and assets held for use, see the “Assets Held for Sale and Related Impairments” and “Assets Held for Use and Related Impairments” sections below.
Assets Held For Sale and Related Impairments
When assets are identified by management as held for sale, the Company reflects them separately on its balance sheet and stops recognizing depreciation and amortization expense on the identified assets and estimates the sales price, net of costs to sell, of those assets. If the carrying amount of the assets classified as held for sale exceeds the estimated net sales price, the Company records an impairment charge equal to the amount by which the carrying amount of the assets exceeds the Company’s estimate of the net sales price of the assets. For held-for-sale properties, the Company predominately uses the contract sale price as fair market value.
Balance Sheet Details - Assets Held for Sale
There were no properties classified as held for sale as of December 31, 2021. 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, 2020:
December 31,
(In thousands)
2020 (1)
   Land$145 
   Buildings, fixtures and improvements(55)
Assets held for sale$90 
_____
(1) Assets held for sale as of December 31, 2020 relates to four Michigan SHOPs.
In January 2020, the Company entered into a PSA for the sale of a portfolio of 14 SHOPs located in Michigan (the “Michigan SHOPs”) as a single portfolio for $71.8 million. Accordingly, all 14 of these SHOPs were classified as held for sale as of December 31, 2019.
During April, 2020, the PSA was amended so that only 11 of the Michigan SHOPs were to be sold pursuant to this PSA for $11.8 million. As a result of the amended PSA from April 2020, the three remaining Michigan SHOPs at that time no longer qualified as held for sale and were reclassified to assets held for use at their original carrying values as of March 31, 2020 and an additional $0.7 million in catch-up depreciation was recorded in the third quarter of 2020. In addition, the original deposit made by the buyer was reduced from $1.0 million to $0.3 million.
In October 2020, the PSA was amended to provide that the full $11.8 million sales price for all 11 Michigan SHOPs would be paid at an initial closing which occurred in November 2020, when seven of the properties were transferred to the buyer with the remaining four properties scheduled to be transferred to the buyer at a second closing, which occurred in the first quarter of 2021. This amendment to the PSA also provided that $0.8 million of the sales price would be held in escrow and returned to the buyer at the second closing; provided that, if the PSA is terminated before the second closing closings due to a material default by the buyer, the Company will receive the escrowed amount. This amount was returned to the buyer at final closing. As a result, it represented an effective reduction in the sale price and the Company reflected an additional impairment loss to reflect this. The Company determined that the four Michigan SHOPs should be classified as held for sale as of December 31, 2020. As
of December 31, 2020, of the four Michigan SHOPs that were classified as held for sale, three Michigan SHOPs were part of the borrowing base of the Credit Facility and one was unencumbered.
Held for Sale Impairments - 2020
As a result of the amendment to the PSA in April 2020, in which the number of properties under sale was reduced from 14 to 11, and in which the total consideration was reduced from $71.8 million to $11.8 million, the Company recorded an additional impairment charge of $19.6 million for the year ended December 31, 2020 related to the Michigan SHOP assets held for sale.
Held for Sale Impairments - 2019
During the year ended December 31, 2019 the Company recorded an impairment charge of $22.6 million related to assets held for sale, representing the amount by which the carrying amount of the Michigan SHOPs exceeded the Company’s estimate, at that time, of the net sales price of the Michigan SHOPs.
Assets Held for Use and Related Impairments
When circumstances indicate the carrying value of a property classified as held for use may not be recoverable, the Company reviews the property for impairment. For the Company, the most common triggering events are (i) concerns regarding the tenant (i.e., credit or expirations) in the Company’s single tenant properties or significant vacancy in the Company’s multi-tenant properties and (ii) changes to the Company’s expected holding period as a result of business decisions or non-recourse debt maturities. If a triggering event is identified, the Company considers the projected cash flows due to various performance indicators, and where appropriate, the Company evaluates the impact on its ability to recover the carrying value of the properties based on the expected cash flows on an undiscounted basis over its intended holding period. The Company makes certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values. Where more than one possible scenario exists, the Company uses a probability weighted approach in estimating cash flows. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses for impairment may be realized in the future. If the undiscounted cash flows over the expected hold period are less than the carrying value, the Company reflects an impairment charge to write the asset down to its fair value.
The Company owns held for use properties for which the Company may from time to time reconsider the projected cash flows due to various performance indicators, and where appropriate, the Company evaluates the impact on its ability to recover the carrying value of such properties based on the expected cash flows over its intended holding period. The Company makes certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values. Where more than one possible scenario exists, the Company uses a probability weighted approach. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses for impairment may be realized in the future.
As of December 31, 2019, the Company was actively considering plans to sell three assets in Florida including the recently completed development project in Jupiter, Florida and the Company’s two skilled nursing facilities in Lutz, Florida and Wellington, Florida. The Company began marketing the properties in 2020 and, during the three months ended June 30, 2020, the Company received multiple bids and accepted a non-binding letter of intent from a prospective buyer to purchase the completed development project in Jupiter, Florida for $65.0 million and the Company’s two skilled nursing facilities in Lutz, Florida and Wellington, Florida for $20.0 million and $33.0 million, respectively. During August 2020, the Company entered into PSAs with the buyer on the terms generally set forth in the letter of intent. The property in Lutz, Florida was sold in December 2020 (see “Dispositions” above) and the property in Jupiter, Florida and the property in Wellington, Florida were sold in May 2021. The Company used the proceeds of the sales to repay amounts outstanding under its Revolving Credit Facility.
Held for Use Impairments — 2021
On April 30, 2021, the Company amended the PSA which reduced the sales price of the skilled nursing facility in Wellington, Florida to $30.7 million. In connection with this amendment to the PSA, the Company determined that the fair value had declined as of March 31, 2021 and the Company recognized an impairment charge of $0.9 million during the first quarter of 2021, which is included in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.
During the second quarter of 2021, the Company began to actively consider plans to sell a property located in Sun City, Arizona. As a result of changes to the Company’s expected holding period, the Company determined that projected cash flows,
on an undiscounted basis over its intended holding period, did not recover the carrying value of the property. During July 2021, the Company entered into a non-binding letter of intent to sell the property and as a result, the Company determined that the fair market value of the property had declined and recorded an impairment charge of $6.1 million during the second quarter of 2021, which is included in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.
The LaSalle Tenant
On July 1, 2020, the Company transitioned four triple-net leased properties in Texas (collectively, the “LaSalle Properties”) from the former triple-net leased healthcare facilities segment to the SHOP segment, and the LaSalle Properties are now leased to the Company’s TRS and operated and managed on the Company’s behalf by a third-party operator.
During 2019, The LaSalle Group Inc., a guarantor of certain of the lease obligations of prior tenants (collectively, the “LaSalle Tenant”), filed for voluntarily relief under chapter 11 of the United States Bankruptcy Code. The Company has filed proofs of claims related to amounts previously awarded to it from the bankruptcy proceeding, however, the Company has no amounts due from the LaSalle Tenant in its consolidated balance sheets as of December 31, 2021 and December 2020 as the Company does not believe recovery is likely against the LaSalle Tenant.
During the third quarter of 2021, the Company began to actively market the LaSalle Properties for sale, and a non-binding letter of intent was signed in the fourth quarter for an aggregate contract sales price of $12.4 million. As a result of changes to the Company’s expected holding period, the Company determined that projected cash flows, on an undiscounted basis over its intended holding period, did not recover the carrying value of the properties and concluded that the properties were impaired. The fair value measurement was determined by estimated discounted cash flows using three significant unobservable inputs, including the cash flow discount rate, terminal capitalization rate, and the estimated stabilized occupancy range. The Company recorded an impairment charge of $34.0 million during the year ended December 31, 2021 which is included in the consolidated statement of operations and comprehensive income. There can be no assurance that the sale of these properties will close on the terms contained in the purchase and sale agreement, if at all.
Held for Use Impairments — 2020
During the year ended December 31, 2020, as a result of the Company’s marketing efforts during the COVID-19 pandemic which concluded with a PSA in August 2020, the Company recorded an additional impairment charge of $16.9 million on its completed development project in Jupiter, Florida and its skilled nursing facility in Wellington, Florida. The impairment charge represents the amount by which the carrying amount of the properties exceeded the Company’s estimate of the net sales price set forth in the PSA described above.
Held for Use Impairments — 2019
During the year ended December 31, 2019, the Company began to evaluate the properties in Lutz, Florida, Wellington, Florida and its completed development property in Jupiter, Florida for potential sales. As a result of these potential changes in plans, the Company concluded these held for use assets were impaired and recognized impairment charges in the aggregate of $33.3 million to reduce their carrying value to estimated fair value. The Company obtained third-party appraisals of all three properties (Lutz, Wellington, and Jupiter) which estimated fair value primarily applying an income approach using stabilized cash flows and capitalization rates of 9.0%, 9.0% and 7.0%, respectively.