NOTE 3. Real Estate Property Investments

2016 Acquisitions

A summary of real estate acquisitions for the three months ended March 31, 2016 (in thousands):


	Consideration				Assets Acquired(1)
			Liabilities				Net
Segment	Cash Paid		Assumed		Real Estate		Intangibles
Senior housing	$	76,362	$	1,200	$	71,875	$	5,687
Post-acute/skilled nursing		17,909		—		16,596		1,313
	$	94,271	$	1,200	$	88,471	$	7,000

(1)

The purchase price allocation is preliminary and may be subject to change.

Acquisition of Private Pay Senior Housing Portfolio (“RIDEA III”)

On June 30, 2015, the Company and Brookdale Senior Living (“Brookdale”) acquired a portfolio of 35 private pay senior housing communities from Chartwell Retirement Residences, including two leasehold interests, representing 5,025 units. The portfolio was acquired in a RIDEA structure (“RIDEA III”), with Brookdale owning a 10% noncontrolling interest. Brookdale has operated these communities since 2011 and continues to manage the communities under a long-term management agreement, which is cancellable under certain conditions (subject to a fee if terminated within seven years from the acquisition date). The Company paid $770 million in cash consideration, net of cash assumed, and assumed $32 million of net liabilities and $29 million of noncontrolling interests to acquire: (i) real estate with a fair value of $771 million, (ii) lease-up intangible assets with a fair value of $53 million and (iii) working capital of $7 million. As a result of the acquisition, the Company recognized a net termination fee of $8 million in rental and related revenues, which represents the termination value of the two leasehold interests. The lease-up intangible assets recognized were attributable to the value of the acquired underlying operating resident leases of the senior housing communities that were stabilized or nearly stabilized (i.e., resident occupancy above 80%). As of March 31, 2016, the purchase price allocation is preliminary and may be subject to change.

Pro Forma Results of Operations

The following unaudited pro forma consolidated results of operations assume that the RIDEA III acquisition was completed as of January 1, 2014 (in thousands, except per share amounts):



	Three Months Ended
	March 31, 2015
Revenues	$	654,354
Net loss		(233,598)
Net loss applicable to HCP, Inc.		(237,099)
Basic earnings per common share		(0.51)
Diluted earnings per common share		(0.51)

2015 Other Acquisitions

A summary of real estate acquisitions for the three months ended March 31, 2015 (in thousands):


	Consideration						Assets Acquired
			Liabilities		Noncontrolling				Net
Segment	Cash Paid		Assumed		Interest		Real Estate		Intangibles
Senior housing	$	34,068	$	626	$	1,306	$	34,350	$	1,650
Medical office		180		—		—		180		—
	$	34,248	$	626	$	1,306	$	34,530	$	1,650

Construction, Tenant and Other Capital Improvements

A summary of the Company’s funding for construction, tenant and other capital improvements (in thousands):


	Three Months Ended March 31,
Segment	2016		2015
Senior housing	$	39,513	$	16,172
Post-acute/skilled nursing		—		1,960
Life science		39,070		27,391
Medical office		30,920		19,233
Hospital		—		37
	$	109,503	$	64,793

Subsequent Event. In May 2016, the Company announced it entered into definitive agreements to acquire a portfolio of seven private pay senior housing communities for $190 million, including the assumption of $75 million of debt maturing in 2044 at a 4.0% rate. Consisting of 526 assisted living and memory care units, the portfolio will be managed by Senior Lifestyle Corporation in a 100% owned RIDEA structure at closing. The closing of this transaction is expected in the second half of 2016 and remains subject to customary closing conditions.