Other Real Estate Investments

3 Months Ended

Mar. 31, 2016

Real Estate [Abstract]

Other Real Estate Investments

OTHER REAL ESTATE INVESTMENTS

In December 2014, the Company completed a $7.5 million preferred equity investment with Signature Senior Living, LLC and Milestone Retirement Communities. The preferred equity investment yields 12.0% calculated on a quarterly basis on the outstanding carrying value of the investment. The investment will be used to develop Signature Senior Living at Arvada, a planned 134-unit upscale assisted living and memory care community in Arvada, Colorado that will be constructed on a five-acre site. In connection with its investment, CareTrust obtained an option to purchase the Arvada development at a fixed-formula price upon stabilization, with an initial lease yield of at least 8.0%. The project is expected to be completed in mid-2016.

During the three months ended March 31, 2016 and 2015, respectively, the Company recognized $0.3 million and $0.2 million of interest income and these unpaid amounts were added to the outstanding carrying value of the investment.