REAL ESTATE INVESTMENTS, NET

The following tables summarize the Company’s investment in owned properties as of September 30, 2017 and December 31, 2016 (dollars in thousands):



	September 30, 2017			December 31, 2016
Land	$	128,815		$	110,648
Buildings and improvements	1,004,347			875,567
Integral equipment, furniture and fixtures	74,234			64,120
Identified intangible assets	2,382			1,914
Escrowed cash for acquisitions	65,638			—
Real estate investments	1,275,416			1,052,249
Accumulated depreciation	(186,327		)	(158,331		)
Real estate investments, net	$	1,089,089		$	893,918

As of September 30, 2017, 92 of the Company’s 174 facilities were leased to subsidiaries of Ensign under eight master leases (the “Ensign Master Leases”) which commenced on June 1, 2014. The obligations under the Ensign Master Leases are guaranteed by Ensign. A default by any subsidiary of Ensign with regard to any facility leased pursuant to an Ensign Master Lease will result in a default under all of the Ensign Master Leases. As of September 30, 2017, annualized revenues from the Ensign Master Leases were $57.7 million and are escalated annually by an amount equal to the product of (1) the lesser of the percentage change in the Consumer Price Index (“CPI”) (but not less than zero) or 2.5%, and (2) the prior year’s rent. In addition to rent, the subsidiaries of Ensign that are tenants under the Ensign Master Leases are solely responsible for the costs related to the leased properties (including property taxes, insurance, and maintenance and repair costs).

As of September 30, 2017, 79 of the Company’s 174 facilities were leased to various other operators under triple-net leases. All of these leases contain annual escalators based on CPI, some of which are subject to a cap, or fixed rent escalators.

The Company’s three remaining properties as of September 30, 2017 are the independent living facilities that the Company owns and operates.

Escrowed cash for acquisitions represents cash in escrow for three asset acquisitions that closed on October 1, 2017. See further discussion in Note 13, Subsequent Events.

The Company has only two identified intangible assets which relate to a below-market ground lease and five acquired operating leases. The ground lease has a remaining term of 81 years.

As of September 30, 2017, the Company’s total future minimum rental revenues for all of its tenants were (dollars in thousands):



Year	Amount
Remaining 2017	$	30,729
2018	122,973
2019	121,069
2020	119,743
2021	119,743
Thereafter	1,055,628
	$	1,569,885

Recent Real Estate Acquisitions

The following recent real estate acquisitions were accounted for as asset acquisitions:

Premier Senior Living, LLC

In February 2017, the Company acquired two assisted living and memory care facilities with 96 beds in the Milwaukee metropolitan area for $26.1 million, which includes capitalized acquisition costs. In connection with the acquisition, the Company amended its triple-net master lease with subsidiaries of Premier Senior Living, LLC. The amended lease has a remaining initial term of approximately 14 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by $2.2 million.

WLC Management Firm, LLC

In March 2017, the Company acquired a five facility 455-bed skilled nursing portfolio in Illinois for $29.2 million, which includes capitalized acquisition costs. In connection with the acquisition, the Company entered into a triple-net master lease with affiliates of WLC Management Firm, LLC. The lease carries an initial term of 15 years with two five-year renewal options and CPI-based rent escalators. Initial annual cash rent is $2.9 million under the lease.

In July 2017, the Company acquired a skilled nursing facility with 99 beds in Eldorado, Illinois for $3.7 million, which includes capitalized acquisition costs. In connection with the acquisition, the Company amended its triple-net master lease with affiliates of WLC Management Firm, LLC. The amended lease has a remaining initial term of approximately 14 years with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by $0.4 million.

Better Senior Living Consulting, LLC

In May 2017, the Company acquired an assisted living and memory care facility with 170 beds in Brooksville, Florida for $2.0 million, which includes capitalized acquisition costs. In connection with the acquisition, the Company amended its triple-net master lease with subsidiaries of Better Senior Living Consulting, LLC. The amended lease has a remaining initial term of approximately 13 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by $0.3 million.

Cascadia Healthcare, LLC

In May 2017, the Company acquired a skilled nursing facility with 119 units in Nampa, Idaho valued at $6.5 million, which includes capitalized acquisition costs. This facility acquisition was part of a three-skilled nursing facility portfolio acquisition that was completed in the third quarter of 2017. The remaining two skilled nursing facilities with 129 units in Oregon and Washington were valued at $4.9 million, which includes capitalized acquisition costs. In connection with the acquisition, the Company amended its triple-net master lease with subsidiaries of Cascadia Healthcare, LLC. The amended lease has a remaining initial term of approximately 14 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by $1.1 million.

In September 2017, the Company acquired three skilled nursing facilities with 236 beds in Idaho for $29.8 million, which includes capitalized acquisition costs. The acquisition is a part of a staged seven-facility portfolio transaction that was completed in October 2017. See further discussion in Note 13, Subsequent Events. In connection with the acquisition, the Company amended its triple-net master lease with subsidiaries of Cascadia Healthcare, LLC. The amended lease has a remaining initial term of approximately 13.5 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by $2.7 million.

OnPointe Health, LLC

In June 2017, the Company acquired a skilled nursing facility in Brownsville, Texas with 126 units and a skilled nursing facility in Albuquerque, New Mexico with 136 units for $27.3 million, which includes capitalized acquisition costs. The two facilities are leased to affiliates of OnPointe Health, LLC under two leases. Current contractual annual cash rent totals $2.5 million under the leases. The leases carry remaining terms of approximately 17 and 19 years, respectively, with CPI-based rent escalators. The tenant has an option to purchase the Brownsville, Texas facility at a fixed price of $14.3 million that becomes exercisable on a periodic basis beginning in 2024.

Prelude Homes & Services, LLC

In July 2017, the Company acquired an assisted living and memory care facility with 30 units in White Bear Lake, Minnesota for $7.8 million, which includes capitalized acquisition costs. In connection with the acquisition, the Company amended its triple-net master lease with affiliates of Prelude Homes & Services, LLC. The amended lease has a remaining initial term of approximately 12.5 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by $0.6 million.

Priority Management Group, LLC

In September 2017, the Company acquired a three facility 405-bed skilled nursing portfolio in the greater Dallas-Fort Worth, Texas area for $20.3 million, which includes capitalized acquisition costs. In connection with the acquisition, the Company amended its triple-net master lease with subsidiaries of Priority Management Group, LLC. The amended lease has a remaining initial term of approximately 14 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by $1.9 million.

Impairment of Real Estate Investment

During the nine months ended September 30, 2017, the Company recorded an impairment loss of $0.9 million related to its investment in La Villa Rehab & Healthcare Center (“La Villa”). In April 2017, the Company and Ensign mutually determined that La Villa had reached the natural end of its useful life as a skilled nursing facility and that the facility was no longer economically viable, the improvements thereon could not be economically repurposed to any other use, and the cost to remove the obsolete improvements and reclaim the underlying land for redevelopment was expected to exceed the market value of the land. Ensign agreed to wind up and terminate the operations of the facility and the Company transferred title to the property to Ensign. There was no adjustment to the contractual rent under the applicable master lease. Additionally, the Company and Ensign agreed that the licensed beds will be transferred to another facility included in the Ensign Master Leases.