Investments in Unconsolidated Entities

12 Months Ended

Dec. 31, 2012

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Entities

Investments in Unconsolidated Entities

We report investments in unconsolidated entities over whose operating and financial policies we have the ability to exercise significant influence under the equity method of accounting. In December 2012, we acquired a 34% interest in Atria. At December 31, 2012 and 2011, we also owned interests ranging between 5% and 25% in 55 properties and 92 properties, respectively, that were accounted for under the equity method.

With the exception of our interest in Atria, we serve as the managing member of each unconsolidated entity and provide various services in exchange for fees and reimbursements. Total management fees earned in connection with these entities were $7.3 million, $5.7 million and $1.9 million for the years ended December 31, 2012, 2011 and 2010, respectively.

We are not required to consolidate these entities, as our joint venture partners have significant participating rights, nor are these entities considered variable interest entities, as they are controlled by equity holders with sufficient capital. Our net investment in properties owned through unconsolidated entities as of December 31, 2012 and 2011 was $95.4 million and $105.3 million, respectively. For the years ended December 31, 2012, 2011 and 2010, we recorded income (loss) from unconsolidated entities of $18.2 million, $(0.1) million and $(0.7) million, respectively.

In August 2012, we acquired the controlling interests (ranging between 80% and 95%) in 36 MOBs and one other MOB that is being marketed for sale for approximately $350.0 million, including the assumption of $101.6 million in debt. This transaction had a total value of approximately $380.0 million. Prior to this acquisition, our equity method investment in these joint ventures was approximately $12.5 million. In connection with our acquisition of the controlling interests, we re-measured the fair value of our previously held equity interest at the acquisition date fair value to be approximately $30.0 million and recognized a net gain of $16.6 million, which is included in income (loss) from unconsolidated entities in our Consolidated Statements of Income. Operations relating to these properties are now consolidated in our Consolidated Statements of Income.