Note 3. Acquisitions and Dispositions

During 2015, the Trust completed acquisitions of 66 properties located in 22 states for an aggregate purchase price of approximately $818.6 million. In addition, the Trust completed loan investments totaling $22.4 million. Acquisition activity for the year ending December 31, 2015 is summarized below:



Property (1)		Location	Acquisition Date	Purchase Price (in thousands)
Minnesota Portfolio	(2)
Edina MOB	(5)	Edina MN	January 22, 2015	$	14,190
Crystal MOB	(5)	Crystal, MN	January 22, 2015	14,782
Savage MOB	(5)	Savage, MN	January 22, 2015	12,800
Dell Road MOB	(5)	Chanhassen, MN	January 22, 2015	6,410
Vadnais Heights MOB	(5)	Vadnais Heights, MN	January 29, 2015	18,422
Minnetonka MOB	(3) (5)	Minnetonka, MN	February 5, 2015	26,000
Jamestown MOB	(5)	Jamestown, ND	February 5, 2015	12,819
Minnesota Eye MOB	(5)	Minnetonka, MN	February 17, 2015	10,882
Columbus MOB	(5)	Columbus, GA	January 23, 2015	6,540
Methodist Sports MOB	(4) (6)	Greenwood, IN	January 28, 2015	10,000
Indianapolis South (4 MOBs)	(5)	Greenwood, IN	February 13, 2015	17,183
Baylor Cancer Center	(5)	Dallas, TX	February 27, 2015	8,200
Bridgeport Medical Center	(5)	Lakewood, WA	February 27, 2015	13,750
Renaissance Office Building	(5)	Milwaukee, WI	March 27, 2015	6,500
University of Rochester Strong Memorial Portfolio (5 MOBs)	(5)	Rochester, NY	March 31, 2015	41,000
Avalon Park Florida Hospital MOB	(5)	Avalon Park, FL	March 31, 2015	14,600
Premier Surgery Center of Louisville	(5)	Louisville, KY	April 10, 2015	8,000
Baton Rouge MOB	(5)	Baton Rouge, LA	April 15, 2015	10,486
Healthpark Medical Center	(5)	Grand Blanc, MI	April 30, 2015	18,913
Plaza HCA MOB	(5)	Jacksonville, FL	April 30, 2015	19,000
Northern Ohio Medical Center	(4)	Sheffield, OH	May 28, 2015	11,236
University of Michigan - Northville MOB	(5)	Livonia, MI	May 29, 2015	14,750
Coon Rapids Medical Center MOB	(5)	Coon Rapids, MN	June 1, 2015	7,298
Mezzanine Loan - UF Health MOB	(7)	Jacksonville, FL	June 1, 2015	9,000
Premier Landmark MOB	(4) (8)	Bloomington, IN	June 5, 2015	11,308
Palm Beach ASC	(5)	Palm Beach, FL	June 26, 2015	14,070
Brookstone Physician Center MOB	(5)	Jacksonville, AL	June 30, 2015	2,800
Jackson Woman's Clinic MOB	(5)	Jackson, TN	June 30, 2015	5,672
Hillside Medical Center MOB	(5)	Hanover, PA	June 30, 2015	11,400
Randall Road MOB	(5)	Elgin, IL	June 30, 2015	13,045
Randall Road MOB - Unit 140	(4)	Elgin, IL	July 17, 2015	1,750
Medical Specialists of Palm Beach MOB	(5)	Atlantis, FL	July 24, 2015	11,051
OhioHealth - SW Health Center MOB	(5)	Grove City, OH	July 31, 2015	11,460
Trios Health MOB	(5)	Kennewick, WA	July 31, 2015	64,000
Integrated Medical Services (IMS) Portfolio
IMS - Paradise Valley MOB	(5)	Phoenix, AZ	August 14, 2015	31,814
IMS - Avondale MOB	(5)	Avondale, AZ	August 19, 2015	22,144
IMS - Palm Valley MOB	(5)	Goodyear, AZ	August 19, 2015	35,184
IMS - North Mountain MOB	(5)	Phoenix, AZ	August 31, 2015	51,740



Property (1)		Location	Acquisition Date	Purchase Price (in thousands)
Mezzanine Loan - Warm Springs Rehab Hospital	(9)	Kyle, TX	August 21, 2015	3,138
Memorial Hermann Medical Complex (2 MOBs)	(5)	Katy, TX	September 1, 2015	40,400
Construction Loan - Tinseltown	(10)	Jacksonville, FL	September 4, 2015	1,005
New Albany Medical Center MOB	(5) (11)	New Albany, OH	September 9, 2015	11,200
Fountain Hills Medical Campus MOB	(5)	Fountain Hills, AZ	September 30, 2015	13,250
Catalyst Portfolio (12 MOBs)	(5)	AL & FL	October 13, 2015	23,805
Mezzanine Loan - Truman Medical Center	(12)	Kansas City, MO	October 16, 2015	4,500
Arete Surgical Center	(5)	Johnstown, CO	October 19, 2015	9,100
Cambridge Professional Center MOB	(5)	Waldorf, MD	October 30, 2015	11,550
Mezzanine Loan - Great Falls Replacement Surgical Hospital	(13)	Great Falls, MT	November 2, 2015	4,500
HonorHealth 44th Street MOB	(5)	Phoenix, AZ	November 13, 2015	7,163
Mercy Medical Center MOB	(5)	Fenton, MO	December 1, 2015	9,850
Nashville MOB	(5) (14)	Nashville, TN	December 17, 2015	45,440
Mezzanine Loan - Wilson Surgery Center	(15)	Wilson, NC	December 17, 2015	216
Hillside Medical Center - Suite 100	(4)	Hanover, PA	December 18, 2015	4,240
Randall Road MOB - Suite 170	(4)	Elgin, IL	December 21, 2015	408
KSF Orthopaedic MOB	(5)	Houston, TX	December 22, 2015	6,250
Great Falls Clinic MOB	(5) (16)	Great Falls, MT	December 29, 2015	24,244
Randall Road MOB - Suite 320	(4)	Elgin, IL	December 30, 2015	500
Total				$	840,958


(1)	“MOB” means medical office building and “ASC” means ambulatory surgical center.

(2)

Through subsidiaries of the Operating Partnership, the Trust acquired seven medical office facilities located in the Minneapolis-St. Paul Metropolitan area and one additional medical office facility located in Jamestown, North Dakota from affiliates of The Davis Group and investors associated with The Davis Group. The Davis Group retained a less than 1% minority interest in the property holding entities.


(3)	The Operating Partnership partially funded the purchase price of this acquisition by issuing a total of 44,685 Series A Preferred Units valued at approximately $9.7 million in the aggregate on the date of issuance.


(4)	The Trust accounted for these acquisitions as asset acquisitions and capitalized $0.4 million of total acquisition costs to the basis of the properties.


(5)	The Trust accounted for these acquisitions as business combinations pursuant to the acquisition method and expensed total acquisition costs of $14.9 million.


(6)	The Operating Partnership partially funded the purchase price of this acquisition by issuing a total of 420,963 OP Units valued at approximately $7.3 million in the aggregate on the date of issuance.


(7)	The Trust made a $9.0 million mezzanine term loan to fund the development of a MOB in Jacksonville, Florida. The loan is collateralized by an equity interest in the medical building development and accrues interest at a rate of 8.4% per year.


(8)	The Operating Partnership partially funded the purchase price of this acquisition by issuing a total of 210,820 OP Units valued at approximately $3.4 million in the aggregate on the date of issuance.


(9)	The Trust made a $3.1 million mezzanine term loan to partially fund the borrower’s acquisition of the 54,500 square foot Warm Springs Rehabilitation Hospital in Kyle, Texas. The mezzanine loan is collateralized by an equity interest in the property and accrues interest at a rate of 8.5% per year. The Trust has an option to purchase the property.


(10)	The Trust made additional advances on a construction loan to Tinseltown Partners, LLC to fund the renovations and additions of two re-purposed buildings in Jacksonville, Florida. The additional advances total $1.0 million and accrue at an interest rate of 9.0% per year.


(11)	The Operating Partnership partially funded the purchase price of this acquisition by issuing a total of 16,866 OP Units valued at approximately $0.2 million in the aggregate on the date of issuance.


(12)	The Trust made a $4.5 million mezzanine term loan to partially fund the owner’s permanent financing of the 87,500 square foot Truman Medical Center in Kansas City, Missouri. The loan accrues interest at the rate of 8.02% per year. The Trust has rights of first offer and first refusal to purchase the property.


(13)	The Trust made a $4.5 million mezzanine term loan to partially fund the construction of the 63,250 square foot Great Falls Hospital in Great Falls, Montana. The loan accrues interest at the rate of 9.0% per year. The Trust has a contract to purchase the property upon completion of construction.

(14)

The Operating Partnership partially funded the purchase price of this acquisition by issuing a total of 91,236 Series A Preferred Units valued at approximately $19.7 million in the aggregate on the date of issuance. Holders of the Series A Preferred Units issued in connection with the acquisition of the Nashville MOB are entitled to certain redemption rights under the partnership agreement of the Operating Partnership which allow them to cause the Operating Partnership to redeem the Series A Preferred Units in exchange for cash, or at the Trust’s option, for common shares, pursuant to a formula provided in the partnership agreement. The investors in the Series A Preferred Units have agreed not cause the Operating Partnership to redeem their Series A Preferred Units prior to December 17, 2016.


(15)	The Trust made a $0.2 million short term mezzanine loan to partially fund the owner’s acquisition of a 9,890 square foot ambulatory surgery center in Wilson, North Carolina. The loan accrues interest at the rate of 8.8% per year.


(16)	The Trust’s $24.2 million investment represents the acquisition of an approximate 75% membership interest in the entity which owns the Great Falls Clinic.

For 2015, the Trust recorded revenues and net income of $41.4 million and $10.6 million, respectively, from its 2015 acquisitions.

During 2014, the Trust completed acquisitions of 61 properties located in 15 states for an aggregate purchase price of approximately $543.4 million. Acquisition activity for the year ending December 31, 2014 is summarized below:



Property (1)		Location	Acquisition Date	Purchase Price (in thousands)
Foundations San Antonio Surgical Hospital	(2)	San Antonio, TX	February 19, 2014	$	25,556
Eagles Landing Family Practice 4 MOBs	(2)	Atlanta, GA	February 19, 2014	20,800
21st Century Oncology 4 MOBs	(3)	Sarasota, FL	February 26, 2014	17,486
Foundations San Antonio MOB	(3)	San Antonio, TX	February 28, 2014	6,800
Peachtree Dunwoody MOB	(3)	Atlanta, GA	February 28, 2014	36,726
LifeCare LTACH	(2)	Fort Worth, TX	March 28, 2014	27,160
LifeCare LTACH	(2)	Pittsburgh, PA	March 28, 2014	12,840
Pinnacle Health Cardiology Portfolio 2 MOBs	(3)	Carlisle & Wormleyburg, PA	April 22, 2014	9,208
South Bend Orthopaedic MOB	(3)	South Bend, IN	April 30, 2014	14,900
Grenada Medical Complex MOB	(3)	Grenada, MS	April 30, 2014	7,100
Mississippi Sports Medicine and Orthopaedics Center MOB	(2) (4)	Jackson, MS	May 23, 2014	16,700
Carmel Medical Pavilion MOB	(3) (5)	Carmel, IN	May 28, 2014	4,664
Summit Urology MOB	(2)	Bloomington, IN	June 30, 2014	4,783
Renaissance Center	(3)	Oshkosh, WI	June 30, 2014	8,500
Presbyterian Medical Plaza MOB	(3)	Monroe, NC	June 30, 2014	7,750
Landmark Medical Portfolio (Premier) 3 MOBs	(2) (6)	Bloomington, IN	July 1, 2014	23,837
Carlisle II MOB	(3)	Carlisle, PA	July 25, 2014	4,500
Surgical Institute of Monroe ASC		Monroe, MI	July 28, 2014	6,000
The Oaks Medical Building MOB	(3)	Lady Lake, FL	July 31, 2014	10,600
Baylor Surgicare ASC — Mansfield	(3)	Mansfield, TX	September 2, 2014	8,500
Eye Center of Southern Indiana	(2) (7)	Bloomington, IN	September 5, 2014	12,174
Wayne State Medical Center and MOB	(2)	Troy, MI	September 10, 2014	46,500
El Paso Portfolio (specialty surgical hospital and 2 MOBs)	(3) (8)	El Paso, TX	September 30, 2014	46,235
The Mark H. Zangmeister Center	(3)	Columbus, OH	September 30, 2014	36,600
Berger Medical Center	(3)	Orient, OH	September 30, 2014	6,785
Orthopedic One 2 MOBs	(3)	Columbus, OH Westerville, OH	September 30, 2014	24,500
Pinnacle Health Portfolio 5 MOBs	(3)	Harrisburg, PA	October 29, 2014	23,100
Columbus Regional Health Portfolio 12 MOBs Columbus Regional Health Portfolio 1 MOB	(3)	Columbus, GA Phenix City, AL	November 20, 2014	27,997
Middletown Medical 2 MOBs	(2)	Middletown, NY	November 26, 2014	14,399
Carle Danville Clinic MOB	(3)	Danville, IL	November 26, 2014	10,300
Napoleon Medical Building MOB	(3)	New Orleans, LA	December 18, 2014	10,500
West Tennessee Bone & Joint 1 MOB 1 ASC	(2)	Jackson, TN	December 30, 2014	9,936
Total				$	543,436


(1)	“MOB” means medical office building, “LTACH” means long-term acute care hospital and “ASC” means ambulatory surgical center.


(2)	The Trust accounted for these acquisitions as asset acquisitions and capitalized $1.7 million of total acquisition costs to the basis of the properties.


(3)	The Trust accounted for these acquisitions as business combinations pursuant to the acquisition method and expensed total acquisition costs of $10.9 million.


(4)	The Operating Partnership partially funded the purchase price of these acquisitions by issuing a total of 147,659 OP Units valued at approximately $1.9 million in the aggregate on the date of issuance.


(5)	The Operating Partnership partially funded the purchase price of these acquisitions by issuing a total of 96,099 OP Units valued at approximately $1.2 million in the aggregate on the date of issuance.


(6)	The Operating Partnership partially funded the purchase price of these acquisitions by issuing a total of 576,040 OP Units valued at approximately $8.3 million in the aggregate on the date of issuance.


(7)	The Operating Partnership partially funded the purchase price of these acquisitions by issuing a total of 272,191 OP Units valued at approximately $4.0 million in the aggregate on the date of issuance.


(8)	The Operating Partnership partially funded the purchase price of these acquisitions by issuing a total of 950,324 OP Units valued at approximately $13.2 million in the aggregate on the date of issuance.

The following table summarizes the preliminary purchase price allocations of the assets acquired and the liabilities assumed, which the Trust determined using Level 2 and Level 3 inputs (in thousands):



	December 31, 2015			December 31, 2014
Land	$	52,224		$	53,687
Building and improvements	643,470			451,691
In-place lease intangibles	99,763			35,720
Above market lease intangibles	19,337			5,270
Below market lease intangibles	(3,738		)	(2,330		)
Below market ground lease	13,941			—
Above market ground lease	—			(701		)
Investment in unconsolidated entity	—			1,300
Lease inducement	2,478			1,532
Leasehold interest	—			759
Derivative liability assumed	—			(197		)
Contingent consideration	(2,718		)	(840		)
Receivable	3,564			640
Debt assumed	(18,690		)	(15,283		)
Issuance of OP Units	(10,973		)	(28,589		)
Issuance of Series A Preferred Units	(29,403		)	—
Noncontrolling interest	(13,970		)	—
Net assets acquired	$	755,285		$	502,659

These preliminary allocations are subject to revision within the measurement period, not to exceed one year from the date of the acquisitions.

Unaudited Pro Forma Financial Information

The following table illustrates the pro forma consolidated revenue, net income, and earnings per share as if the Trust had acquired the 2015 acquisitions detailed above as of January 1, 2014 (in thousands, except share and per share amounts):



	Year Ended December 31,
	2015		2014
Revenue	$	168,154	$	133,411
Net income	38,959		17,512
Net income available to common shareholders	36,938		16,599
Earnings per share	$	0.42	$	0.19
Common shares outstanding	87,175,904		87,175,904