QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
☒ | Accelerated Filer | ☐ | |
Non-accelerated Filer | ☐ | Smaller Reporting Company | |
Emerging Growth Company |
PART I. FINANCIAL INFORMATION | ||
June 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Real estate: | |||||||
Buildings and improvements | $ | $ | |||||
Development costs and construction in progress | |||||||
Land | |||||||
Accumulated depreciation and amortization | ( | ) | ( | ) | |||
Net real estate | |||||||
Net investment in direct financing leases | |||||||
Loans receivable, net | |||||||
Investments in and advances to unconsolidated joint ventures | |||||||
Accounts receivable, net of allowance of $6,899 and $5,127 | |||||||
Cash and cash equivalents | |||||||
Restricted cash | |||||||
Intangible assets, net | |||||||
Assets held for sale, net | |||||||
Right-of-use asset, net | — | ||||||
Other assets, net | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND EQUITY | |||||||
Bank line of credit | $ | $ | |||||
Term loan | |||||||
Senior unsecured notes | |||||||
Mortgage debt | |||||||
Other debt | |||||||
Intangible liabilities, net | |||||||
Liabilities of assets held for sale, net | |||||||
Lease liability | — | ||||||
Accounts payable and accrued liabilities | |||||||
Deferred revenue | |||||||
Total liabilities | |||||||
Commitments and contingencies | |||||||
Common stock, $1.00 par value: 750,000,000 shares authorized; 491,108,584 and 477,496,499 shares issued and outstanding | |||||||
Additional paid-in capital | |||||||
Cumulative dividends in excess of earnings | ( | ) | ( | ) | |||
Accumulated other comprehensive income (loss) | ( | ) | ( | ) | |||
Total stockholders' equity | |||||||
Joint venture partners | |||||||
Non-managing member unitholders | |||||||
Total noncontrolling interests | |||||||
Total equity | |||||||
Total liabilities and equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues: | |||||||||||||||
Rental and related revenues | $ | $ | $ | $ | |||||||||||
Resident fees and services | |||||||||||||||
Income from direct financing leases | |||||||||||||||
Interest income | |||||||||||||||
Total revenues | |||||||||||||||
Costs and expenses: | |||||||||||||||
Interest expense | |||||||||||||||
Depreciation and amortization | |||||||||||||||
Operating | |||||||||||||||
General and administrative | |||||||||||||||
Transaction costs | |||||||||||||||
Impairments (recoveries), net | |||||||||||||||
Total costs and expenses | |||||||||||||||
Other income (expense): | |||||||||||||||
Gain (loss) on sales of real estate, net | |||||||||||||||
Loss on debt extinguishments | ( | ) | ( | ) | |||||||||||
Other income (expense), net | ( | ) | |||||||||||||
Total other income (expense), net | |||||||||||||||
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures | ( | ) | |||||||||||||
Income tax benefit (expense) | |||||||||||||||
Equity income (loss) from unconsolidated joint ventures | ( | ) | ( | ) | ( | ) | |||||||||
Net income (loss) | ( | ) | |||||||||||||
Noncontrolling interests' share in earnings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net income (loss) attributable to HCP, Inc. | ( | ) | |||||||||||||
Participating securities' share in earnings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net income (loss) applicable to common shares | $ | ( | ) | $ | $ | $ | |||||||||
Earnings per common share: | |||||||||||||||
Basic | $ | ( | ) | $ | $ | $ | |||||||||
Diluted | $ | ( | ) | $ | $ | $ | |||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) | $ | ( | ) | $ | $ | $ | |||||||||
Other comprehensive income (loss): | |||||||||||||||
Net unrealized gains (losses) on derivatives | |||||||||||||||
Change in Supplemental Executive Retirement Plan obligation and other | |||||||||||||||
Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Reclassification adjustment realized in net income (loss) | |||||||||||||||
Total other comprehensive income (loss) | ( | ) | |||||||||||||
Total comprehensive income (loss) | ( | ) | |||||||||||||
Total comprehensive income (loss) attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total comprehensive income (loss) attributable to HCP, Inc. | $ | ( | ) | $ | $ | $ |
Common Stock | Additional Paid-In Capital | Cumulative Dividends In Excess Of Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | Total Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||
April 1, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Net income (loss) | — | — | — | ( | ) | — | ( | ) | ( | ) | ||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||
Issuance of common stock, net | — | — | — | |||||||||||||||||||||||||||
Repurchase of common stock | ( | ) | ( | ) | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Exercise of stock options | — | — | — | |||||||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | |||||||||||||||||||||||||
Common dividends ($0.37 per share) | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||
Issuances of noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||||||||
Purchase of noncontrolling interests | — | — | ( | ) | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
June 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ |
Common Stock | Additional Paid-In Capital | Cumulative Dividends In Excess Of Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | Total Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||
April 1, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of common stock, net | — | — | — | ||||||||||||||||||||||||||||
Repurchase of common stock | ( | ) | ( | ) | ( | ) | — | — | ( | ) | — | ( | ) | ||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | ||||||||||||||||||||||||||
Common dividends ($0.37 per share) | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ |
Common Stock | Additional Paid-In Capital | Cumulative Dividends In Excess Of Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | Total Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||
December 31, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Impact of adoption of ASU No. 2016-02(1) | — | — | — | — | — | |||||||||||||||||||||||||
January 1, 2019 | ( | ) | ( | ) | ||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of common stock, net | — | — | — | |||||||||||||||||||||||||||
Conversion of DownREIT units to common stock | — | — | ( | ) | ||||||||||||||||||||||||||
Repurchase of common stock | ( | ) | ( | ) | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Exercise of stock options | — | — | — | |||||||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | |||||||||||||||||||||||||
Common dividends ($0.74 per share) | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||
Issuances of noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||||||||
Purchase of noncontrolling interests | — | — | ( | ) | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
June 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ |
Common Stock | Additional Paid-In Capital | Cumulative Dividends In Excess Of Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | Total Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||
December 31, 2017 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Impact of adoption of ASU No. 2017-05(2) | — | — | — | — | — | |||||||||||||||||||||||||
January 1, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Net income (loss) | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of common stock, net | — | — | — | |||||||||||||||||||||||||||
Repurchase of common stock | ( | ) | ( | ) | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | |||||||||||||||||||||||||
Common dividends ($0.74 per share) | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||
Issuances of noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||||||||
Purchase of noncontrolling interests | — | — | ( | ) | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
June 30, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ |
(1) | On January 1, 2019, the Company adopted a series of Accounting Standards Updates (“ASUs”) related to accounting for leases, and recognized the cumulative-effect of adoption to beginning retained earnings. Refer to Note 2 for a detailed impact of adoption. |
(2) | On January 1, 2018, the Company adopted ASU No. 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), and recognized the cumulative-effect of adoption to beginning retained earnings. Refer to Note 2 for a detailed impact of adoption. |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | $ | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization of real estate, in-place lease and other intangibles | |||||||
Amortization of deferred compensation | |||||||
Amortization of deferred financing costs | |||||||
Straight-line rents | ( | ) | ( | ) | |||
Equity loss (income) from unconsolidated joint ventures | ( | ) | |||||
Distributions of earnings from unconsolidated joint ventures | |||||||
Deferred income tax expense (benefit) | ( | ) | ( | ) | |||
Impairments (recoveries), net | |||||||
Loss on extinguishment of debt | |||||||
Loss (gain) on sales of real estate, net | ( | ) | ( | ) | |||
Loss (gain) on consolidation, net | ( | ) | |||||
Casualty-related loss (recoveries), net | ( | ) | |||||
Other non-cash items | ( | ) | ( | ) | |||
Decrease (increase) in accounts receivable and other assets, net | ( | ) | ( | ) | |||
Increase (decrease) in accounts payable, accrued liabilities and deferred revenue | ( | ) | |||||
Net cash provided by (used in) operating activities | |||||||
Cash flows from investing activities: | |||||||
Acquisitions of real estate | ( | ) | ( | ) | |||
Development and redevelopment of real estate | ( | ) | ( | ) | |||
Leasing costs, tenant improvements, and recurring capital expenditures | ( | ) | ( | ) | |||
Proceeds from sales of real estate, net | |||||||
Contributions to unconsolidated joint ventures | ( | ) | ( | ) | |||
Distributions in excess of earnings from unconsolidated joint ventures | |||||||
Proceeds from insurance recovery | |||||||
Proceeds from the RIDEA II transaction, net | |||||||
Proceeds from sales/principal repayments on debt investments and direct financing leases | |||||||
Investments in loans receivable, direct financing leases and other | ( | ) | ( | ) | |||
Net cash provided by (used in) investing activities | ( | ) | |||||
Cash flows from financing activities: | |||||||
Borrowings under bank line of credit | |||||||
Repayments under bank line of credit | ( | ) | ( | ) | |||
Repayments and repurchase of debt, excluding bank line of credit | ( | ) | ( | ) | |||
Borrowings under term loan | |||||||
Payments for debt extinguishment and deferred financing costs | ( | ) | |||||
Issuance of common stock and exercise of options | |||||||
Repurchase of common stock | ( | ) | ( | ) | |||
Dividends paid on common stock | ( | ) | ( | ) | |||
Issuance of noncontrolling interests | |||||||
Distributions to and purchase of noncontrolling interests | ( | ) | ( | ) | |||
Net cash provided by (used in) financing activities | ( | ) | |||||
Effect of foreign exchanges on cash, cash equivalents and restricted cash | ( | ) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | |||||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ |
• | Prior to the adoption of the Revenue ASUs, the Company recognized a gain on sale of real estate using the full accrual method when collectibility of the sales price was reasonably assured, the Company was not obligated to perform additional activities that may be considered significant, the initial investment from the buyer was sufficient and other profit recognition criteria had been satisfied. The Company deferred all or a portion of a gain on sale of real estate if the requirements for gain recognition were not met at the time of sale. Subsequent to adopting the Revenue ASUs on January 1, 2018, the Company began recognizing a gain on sale of real estate upon transferring control of the asset to the purchaser, which is generally satisfied at the time of sale. In conjunction with its adoption of the Revenue ASUs, the Company reassessed its historical partial sale of real estate transactions to determine which transactions, if any, were not completed contracts (i.e., the transaction did not qualify for sale treatment under previous guidance). The Company concluded that it had one such material transaction, its partial sale of RIDEA II in the first quarter of 2017 (which was not a completed sale under historical guidance as of the Company's adoption date due to a minor obligation related to the interest sold). In accordance with the Revenue ASUs, the Company recorded its retained |
• | The Company generally expects that the new guidance will result in certain transactions qualifying as sales of real estate at an earlier date than under historical accounting guidance. |
• | The Company, which owned |
• | The Company received the right to sell, or transition to other operators, |
• | The Company provided an aggregate $ |
• | Brookdale agreed to purchase |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Fixed income from operating leases | $ | $ | $ | $ | |||||||||||
Variable income from operating leases | |||||||||||||||
Interest income from direct financing leases |
June 30, 2019 | |||
Present value of minimum lease payments receivable | $ | ||
Present value of estimated residual value | |||
Less deferred selling profits | ( | ) | |
Net investment in direct financing leases before allowance | |||
Allowance for direct financing lease losses | ( | ) | |
Net investment in direct financing leases | $ | ||
Properties subject to direct financing leases |
December 31, 2018 | |||
Minimum lease payments receivable | $ | ||
Estimated residual value | |||
Less unearned income | ( | ) | |
Net investment in direct financing leases | $ | ||
Properties subject to direct financing leases |
Carrying Amount | Percentage of DFL Portfolio | Internal Ratings | ||||||||||||||||
Segment | Performing DFLs | Watch List DFLs | Workout DFLs | |||||||||||||||
Senior housing triple-net | $ | $ | $ | $ | ||||||||||||||
Other non-reportable segments | ||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Income from DFLs | $ | $ | $ | $ | ||||||||||||
Cash payments received |
Year | Amount | |||
2019 (six months) | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
2024 | ||||
Thereafter | ||||
Undiscounted minimum lease payments receivable | ||||
Less: imputed interest | ( | ) | ||
Present value of minimum lease payments receivable | $ |
Year | Amount | |||
2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
$ |
Year | Amount | |||
2019 (six months) | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
2024 | ||||
Thereafter | ||||
$ |
Year | Amount | |||
2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
$ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Lease Expense Information: | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Total lease expense(1) | $ | $ | $ | $ |
(1) | Lease expense related to corporate assets is included in general and administrative expenses and lease expense related to ground leases is included within operating expenses in the Company’s consolidated statements of operations. |
Six Months Ended June 30, | ||||||||
Supplemental Cash Flow Information: | 2019 | 2018 | ||||||
Cash paid for amounts included in the measurement of lease liability: | ||||||||
Operating cash flows for operating leases | $ | $ | ||||||
ROU asset obtained in exchange for new lease liability: | ||||||||
Operating leases | $ | $ |
Weighted Average Lease Term and Discount Rate: | June 30, 2019 | ||
Weighted average remaining lease term (years): | |||
Operating leases | |||
Weighted average discount rate: | |||
Operating leases | % |
Year | Amount | |||
2019 (six months) | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
2024 | ||||
Thereafter | ||||
Undiscounted minimum lease payments included in the lease liability | ||||
Less: imputed interest | ( | ) | ||
Present value of lease liability | $ |
Year | Amount | |||
2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
$ |
June 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
Real Estate Secured | Other Secured | Total | Real Estate Secured | Other Secured | Total | ||||||||||||||||||
Mezzanine | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Participating development loans and other(1) | |||||||||||||||||||||||
Unamortized discounts, fees and costs | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
$ | $ | $ | $ | $ | $ |
(1) | At June 30, 2019, the Company had $ |
Carrying Amount | Percentage of Loan Portfolio | Internal Ratings | ||||||||||||||||
Investment Type | Performing Loans | Watch List Loans | Workout Loans | |||||||||||||||
Real estate secured | $ | $ | $ | $ | ||||||||||||||
Other secured | ||||||||||||||||||
$ | $ | $ | $ |
Carrying Amount | ||||||||||||||
June 30, | December 31, | |||||||||||||
Entity(1) | Property Count | Ownership % | 2019 | 2018 | ||||||||||
CCRC JV | $ | $ | ||||||||||||
U.K. JV(2) | ||||||||||||||
MBK JV | ||||||||||||||
Other SHOP JVs(3) | 41- 90 | |||||||||||||
Medical Office JVs(4) | 20 - 67 | |||||||||||||
K&Y JVs(5) | ||||||||||||||
Advances to unconsolidated joint ventures, net | ||||||||||||||
$ | $ |
(1) | These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures. |
(2) | See Note 3 for discussion of the formation of the U.K. JV and the Company’s equity method investment. |
(3) | In June 2019, the Company acquired the outstanding equity interests in, and began consolidating, the Vintage Park JV (see Note 3). Remaining unconsolidated SHOP joint ventures (and the Company’s ownership percentage) include: (i) Waldwick JV ( |
(4) | Includes |
(5) | At June 30, 2019, includes |
Intangible lease assets | June 30, 2019 | December 31, 2018 | ||||||
Gross intangible lease assets | $ | $ | ||||||
Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
Intangible assets, net | $ | $ |
Intangible lease liabilities | June 30, 2019 | December 31, 2018 | ||||||
Gross intangible lease liabilities | $ | $ | ||||||
Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
Intangible liabilities, net | $ | $ |
Date | Amount | Coupon Rate | |||||
July 16, 2018(1) | $ | % | |||||
November 8, 2018 | $ | % |
(1) | The Company recorded a $ |
Year | Bank Line of Credit(1) | Term Loan | Senior Unsecured Notes(2) | Mortgage Debt(3) | Total(4) | |||||||||||||||
2019 (six months) | $ | $ | $ | $ | $ | |||||||||||||||
2020 | ||||||||||||||||||||
2021 | ||||||||||||||||||||
2022 | ||||||||||||||||||||
2023 | ||||||||||||||||||||
Thereafter | ||||||||||||||||||||
(Discounts), premium and debt costs, net | ( | ) | ( | ) | ( | ) | ||||||||||||||
Debt on assets held for sale(5) | ||||||||||||||||||||
$ | $ | $ | $ | $ |
(1) | Includes £ |
(2) | Effective interest rates on the notes ranged from |
(3) | Excluding mortgage debt on assets held for sale, effective interest rates on the mortgage debt ranged from |
(4) | Excludes $ |
(5) | Represents mortgage debt on assets held for sale with an interest rate of |
June 30, 2019 | December 31, 2018 | ||||||
Cumulative foreign currency translation adjustment(1) | $ | ( | ) | $ | ( | ) | |
Unrealized gains (losses) on derivatives, net | ( | ) | ( | ) | |||
Supplemental Executive Retirement plan minimum liability and other | ( | ) | ( | ) | |||
Total accumulated other comprehensive income (loss) | $ | ( | ) | $ | ( | ) |
(1) |
Senior Housing Triple-Net | SHOP | Life Science | Medical Office | Other Non-reportable | Corporate Non-segment | Total | ||||||||||||||||||||||
Real estate revenues(1) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
NOI | ||||||||||||||||||||||||||||
Adjustments to NOI(2) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Adjusted NOI | ||||||||||||||||||||||||||||
Addback adjustments | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
General and administrative | ( | ) | ( | ) | ||||||||||||||||||||||||
Transaction costs | ( | ) | ( | ) | ||||||||||||||||||||||||
Recoveries (impairments), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
Gain (loss) on sales of real estate, net | ||||||||||||||||||||||||||||
Loss on debt extinguishments | ( | ) | ( | ) | ||||||||||||||||||||||||
Other income (expense), net | ||||||||||||||||||||||||||||
Income tax benefit (expense) | ||||||||||||||||||||||||||||
Equity income (loss) from unconsolidated joint ventures | ( | ) | ( | ) | ||||||||||||||||||||||||
Net income (loss) | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | ( | ) |
(1) | Represents rental and related revenues, resident fees and services, and income from DFLs. |
(2) | Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, net, and termination fees. |
Senior Housing Triple-Net | SHOP | Life Science | Medical Office | Other Non-reportable | Corporate Non-segment | Total | ||||||||||||||||||||||
Real estate revenues(1) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
NOI | ||||||||||||||||||||||||||||
Adjustments to NOI(2) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Adjusted NOI | ||||||||||||||||||||||||||||
Addback adjustments | ( | ) | ||||||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
General and administrative | ( | ) | ( | ) | ||||||||||||||||||||||||
Transaction costs | ( | ) | ( | ) | ||||||||||||||||||||||||
Recoveries (impairments), net | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Gain (loss) on sales of real estate, net | ( | ) | ||||||||||||||||||||||||||
Other income (expense), net | ||||||||||||||||||||||||||||
Income tax benefit (expense) | ||||||||||||||||||||||||||||
Equity income (loss) from unconsolidated joint ventures | ( | ) | ( | ) | ||||||||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | $ | $ | ( | ) | $ |
(1) | Represents rental and related revenues, resident fees and services, and income from DFLs. |
(2) | Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, net, and termination fees. |
Senior Housing Triple-Net | SHOP | Life Science | Medical Office | Other Non-reportable | Corporate Non-segment | Total | ||||||||||||||||||||||
Real estate revenues(1) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
NOI | ||||||||||||||||||||||||||||
Adjustments to NOI(2) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Adjusted NOI | ||||||||||||||||||||||||||||
Addback adjustments | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
General and administrative | ( | ) | ( | ) | ||||||||||||||||||||||||
Transaction costs | ( | ) | ( | ) | ||||||||||||||||||||||||
Recoveries (impairments), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
Gain (loss) on sales of real estate, net | ||||||||||||||||||||||||||||
Loss on debt extinguishments | ( | ) | ( | ) | ||||||||||||||||||||||||
Other income (expense), net | ||||||||||||||||||||||||||||
Income tax benefit (expense) | ||||||||||||||||||||||||||||
Equity income (loss) from unconsolidated joint ventures | ( | ) | ( | ) | ||||||||||||||||||||||||
Net income (loss) | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ |
(1) | Represents rental and related revenues, resident fees and services, and income from DFLs. |
(2) | Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, net, and termination fees. |
Senior Housing Triple-Net | SHOP | Life Science | Medical Office | Other Non-reportable | Corporate Non-segment | Total | ||||||||||||||||||||||
Real estate revenues(1) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
NOI | ||||||||||||||||||||||||||||
Adjustments to NOI(2) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Adjusted NOI | ||||||||||||||||||||||||||||
Addback adjustments | ||||||||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
General and administrative | ( | ) | ( | ) | ||||||||||||||||||||||||
Transaction costs | ( | ) | ( | ) | ||||||||||||||||||||||||
Recoveries (impairments), net | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Gain (loss) on sales of real estate, net | ( | ) | ||||||||||||||||||||||||||
Other income (expense), net | ( | ) | ( | ) | ||||||||||||||||||||||||
Income tax benefit (expense) | ||||||||||||||||||||||||||||
Equity income (loss) from unconsolidated joint ventures | ||||||||||||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | $ | $ | ( | ) | $ |
(1) | Represents rental and related revenues, resident fees and services, and income from DFLs. |
(2) | Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, net, and termination fees. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Segment | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Senior housing triple-net | $ | $ | $ | $ | ||||||||||||
SHOP | ||||||||||||||||
Life science | ||||||||||||||||
Medical office | ||||||||||||||||
Other non-reportable segments | ||||||||||||||||
Total revenues | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Numerator | |||||||||||||||
Net income (loss) | $ | ( | ) | $ | $ | $ | |||||||||
Noncontrolling interests' share in earnings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net income (loss) attributable to HCP, Inc. | ( | ) | |||||||||||||
Less: Participating securities' share in earnings | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net income (loss) applicable to common shares | $ | ( | ) | $ | $ | $ | |||||||||
Denominator | |||||||||||||||
Basic weighted average shares outstanding | |||||||||||||||
Dilutive potential common shares - equity awards | |||||||||||||||
Dilutive potential common shares - forward equity agreements(1) | |||||||||||||||
Diluted weighted average common shares | |||||||||||||||
Basic earnings per common share | |||||||||||||||
Basic | $ | ( | ) | $ | $ | $ | |||||||||
Diluted | $ | ( | ) | $ | $ | $ |
(1) | Represents the current dilutive impact of |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Supplemental cash flow information: | |||||||
Interest paid, net of capitalized interest | $ | $ | |||||
Income taxes paid (refunded) | |||||||
Capitalized interest | |||||||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Accrued construction costs | |||||||
Retained equity method investment and proceeds receivable from U.K. JV transaction | |||||||
Derecognition of U.K. Bridge Loan receivable | |||||||
Consolidation of net assets related to U.K. Bridge Loan | |||||||
Vesting of restricted stock units and conversion of non-managing member units into common stock | |||||||
Liabilities assumed with real estate acquisitions | |||||||
Conversion of DFLs to real estate | |||||||
Net noncash impact from the consolidation of previously unconsolidated joint ventures (see Note 3) |
June 30, | ||||||||
2019 | 2018 | |||||||
Cash and cash equivalents | $ | $ | ||||||
Restricted cash | ||||||||
Cash, cash equivalents and restricted cash | $ | $ |
VIE Type | Asset/Liability Type | Maximum Loss Exposure and Carrying Amount(1) | ||||
VIE tenants - DFLs(2) | Net investment in DFLs | $ | ||||
VIE tenants - operating leases(2) | Lease intangibles, net and straight-line rent receivables | |||||
CCRC OpCo | Investments in unconsolidated joint ventures | |||||
Unconsolidated development joint ventures | Loans receivable, net and Investments in unconsolidated joint ventures | |||||
Loan - seller financing | Loans receivable, net | |||||
CMBS and LLC investment | Marketable debt and LLC investment |
(1) | The Company’s maximum loss exposure represents the aggregate carrying amount of such investments (including accrued interest). |
(2) | The Company’s maximum loss exposure may be mitigated by re-leasing the underlying properties to new tenants upon an event of default. |
June 30, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Buildings and improvements | $ | $ | |||||
Development costs and construction in progress | |||||||
Land | |||||||
Accumulated depreciation and amortization | ( | ) | ( | ) | |||
Net real estate | |||||||
Investments in and advances to unconsolidated joint ventures | |||||||
Accounts receivable, net | |||||||
Cash and cash equivalents | |||||||
Restricted cash | |||||||
Intangible assets, net | |||||||
Right-of-use asset, net | |||||||
Other assets, net | |||||||
Total assets | $ | $ | |||||
Liabilities | |||||||
Mortgage debt | |||||||
Intangible liabilities, net | |||||||
Lease liability | |||||||
Accounts payable and accrued liabilities | |||||||
Deferred revenue | |||||||
Total liabilities | $ | $ |
Percentage of Total Assets | ||||||||
Total Company | Senior Housing Triple-Net | |||||||
June 30, | December 31, | June 30, | December 31, | |||||
Tenant | 2019 | 2018 | 2019 | 2018 | ||||
Brookdale(1) |
Percentage of Revenues | ||||||||||||||||
Total Company | Senior Housing Triple-Net | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
Tenant | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||
Brookdale(1) |
(1) | Excludes senior housing facilities operated by Brookdale in the Company’s SHOP segment as discussed below. Percentages of segment and total company revenues include partial-year revenue earned from senior housing triple-net facilities that were sold during 2018. |
June 30, 2019(3) | December 31, 2018(3) | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Loans receivable, net(2) | $ | $ | $ | $ | |||||||||||
Marketable debt securities(2) | |||||||||||||||
Bank line of credit(2) | |||||||||||||||
Term loan(2) | |||||||||||||||
Senior unsecured notes(1) | |||||||||||||||
Mortgage debt(2) | |||||||||||||||
Other debt(2) | |||||||||||||||
Interest-rate swap liabilities(2) |
(1) | Level 1: Fair value calculated based on quoted prices in active markets. |
(2) | Level 2: Fair value based on (i) for marketable debt securities, quoted prices for similar or identical instruments in active or inactive markets, respectively, or (ii) for loans receivable, net, mortgage debt and swaps, calculated utilizing standardized pricing models in which significant inputs or value drivers are observable in active markets. For bank line of credit, term loan and other debt, the carrying values are a reasonable estimate of fair value because the borrowings are primarily based on market interest rates and the Company’s credit rating. |
(3) | During the six months ended June 30, 2019 and year ended December 31, 2018, there were no material transfers of financial assets or liabilities within the fair value hierarchy. |
Date Entered | Maturity Date | Hedge Designation | Notional | Pay Rate | Receive Rate | Fair Value(1) | ||||||||||
Interest rate: | ||||||||||||||||
July 2005(2) | July 2020 | Cash Flow | $ | BMA Swap Index | $ | ( | ) |
(1) | Derivative liabilities are recorded in accounts payable and accrued liabilities on the consolidated balance sheets. |
(2) | Represents |
• | our reliance on a concentration of a small number of tenants and operators for a significant percentage of our revenues and net operating income; |
• | the financial condition of our existing and future tenants, operators and borrowers, including potential bankruptcies and downturns in their businesses, and their legal and regulatory proceedings, which results in uncertainties regarding our ability to continue to realize the full benefit of such tenants’ and operators’ leases and borrowers’ loans; |
• | the ability of our existing and future tenants, operators and borrowers to conduct their respective businesses in a manner sufficient to maintain or increase their revenues and manage their expenses in order to generate sufficient income to make rent and loan payments to us and our ability to recover investments made, if applicable, in their operations; |
• | our concentration in the healthcare property sector, particularly in senior housing, life sciences and medical office buildings, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries; |
• | operational risks associated with third party management contracts, including the additional regulation and liabilities of our RIDEA lease structures; |
• | the effect on us and our tenants and operators of legislation, executive orders and other legal requirements, including compliance with the Americans with Disabilities Act, fire, safety and health regulations, environmental laws, the Affordable Care Act, licensure, certification and inspection requirements, and laws addressing entitlement programs and related services, including Medicare and Medicaid, which may result in future reductions in reimbursements or fines for noncompliance; |
• | our ability to identify replacement tenants and operators and the potential renovation costs and regulatory approvals associated therewith; |
• | the risks associated with property development and redevelopment, including costs above original estimates, project delays and lower occupancy rates and rents than expected; |
• | the potential impact of uninsured or underinsured losses; |
• | the risks associated with our investments in joint ventures and unconsolidated entities, including our lack of sole decision making authority and our reliance on our partners’ financial condition and continued cooperation; |
• | competition for the acquisition and financing of suitable healthcare properties as well as competition for tenants and operators, including with respect to new leases and mortgages and the renewal or rollover of existing leases; |
• | our or our counterparties’ ability to fulfill obligations, such as financing conditions and/or regulatory approval requirements, required to successfully consummate acquisitions, dispositions, transitions, developments, redevelopments, joint venture transactions or other transactions; |
• | our ability to achieve the benefits of acquisitions or other investments within expected time frames or at all, or within expected cost projections; |
• | the potential impact on us and our tenants, operators and borrowers from current and future litigation matters, including the possibility of larger than expected litigation costs, adverse results and related developments; |
• | changes in federal, state or local laws and regulations, including those affecting the healthcare industry that affect our costs of compliance or increase the costs, or otherwise affect the operations, of our tenants and operators; |
• | our ability to foreclose on collateral securing our real estate-related loans; |
• | volatility or uncertainty in the capital markets, the availability and cost of capital as impacted by interest rates, changes in our credit ratings, and the value of our common stock, and other conditions that may adversely impact our ability to fund our obligations or consummate transactions, or reduce the earnings from potential transactions; |
• | changes in global, national and local economic and other conditions, including currency exchange rates; |
• | our ability to manage our indebtedness level and changes in the terms of such indebtedness; |
• | competition for skilled management and other key personnel; |
• | our reliance on information technology systems and the potential impact of system failures, disruptions or breaches; and |
• | our ability to maintain our qualification as a real estate investment trust (“REIT”). |
• | Executive Summary |
• | 2019 Transaction Overview |
• | Dividends |
• | Results of Operations |
• | Liquidity and Capital Resources |
• | Contractual obligations and Off-Balance Sheet Arrangements |
• | Non-GAAP Financial Measures Reconciliations |
• | Critical Accounting Policies |
• | Recent Accounting Pronouncements |
• | In April 2019, we acquired a portfolio of nine senior housing properties, with a total of 1,242 units, for $445 million. The properties are located across Florida, Georgia, and Texas and are operated by Discovery Senior Living, LLC. |
• | In May 2019, we acquired three newly-built, senior housing communities for $113 million. The portfolio is operated by Oakmont Senior Living LLC (“Oakmont”) and includes 132 assisted living units and 68 memory care units with an average occupancy of 96% at closing. |
• | In July 2019, we acquired five additional senior housing communities for $284 million. The portfolio is operated by Oakmont and includes 430 units. The properties are located in Huntington Beach, Los Angeles, San Jose, and San Francisco. |
• | In June 2019, we completed the previously announced acquisition of two life science buildings in South San Francisco, California adjacent to our The Shore at Sierra Point development, for $245 million. |
• | In July 2019, we acquired a life science campus in the suburban Boston submarket of Lexington, Massachusetts, for $228 million. The 277,000 square feet campus, comprised of four buildings, is 100% leased to seven biopharmaceutical and medical diagnostics tenants. |
• | During the first quarter of 2019, we acquired a life science facility for $71 million and development rights at an adjacent undeveloped land parcel for consideration of up to $27 million. The existing facility and land parcel are located in Cambridge, Massachusetts. |
• | In May 2019, we acquired one medical office building (“MOB”) in Kansas for $15 million. |
• | In June 2019, we acquired the outstanding equity interests of, and began consolidating, a senior housing joint venture structure (which owned one senior housing facility), in which we previously held an unconsolidated equity investment, for $24 million. |
• | In July 2019, we acquired a $16 million, Class A two-story building in the Sorrento Mesa submarket of San Diego. The 56,000 square foot property is located on our Directors Place life science campus and is adjacent to our future development site. |
• | During the six months ended June 30, 2019, we transitioned 33 senior housing triple-net assets, including a 14-property direct financing lease (“DFL”) portfolio, to a RIDEA structure, with Sunrise Senior Living, LLC (“Sunrise”) as the operator. We expect to transition two additional senior housing triple-net assets to a RIDEA structure with Sunrise later in 2019. |
• | During the second quarter of 2019, we entered into agreements to sell 13 senior housing facilities under DFLs for $274 million. We expect to complete the transaction during the second half of 2019. |
• | During the six months ended June 30, 2019, we sold 10 senior housing operating portfolio (“SHOP”) assets for $82 million, 2 senior housing triple-net assets for $26 million, 5 MOBs for $15 million, 1 life science asset for $7 million, and 1 undeveloped life science land parcel for $35 million. |
• | In February 2019, we terminated our previous at-the-market equity program established in February 2018 (the “2018 ATM Program”) and established a new ATM Program (the “2019 ATM Program”) pursuant to which shares of common stock having an aggregate gross sales price of up to $1.0 billion may be sold (i) by HCP through a consortium of banks acting as sales agents or directly to the banks acting as principals or (ii) by a consortium of banks acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. |
• | In May 2019, we entered into a new $2.5 billion unsecured revolving line of credit facility (the “Revolving Facility”) maturing on May 23, 2023. The Revolving Facility contains two, six-month extension options, subject to certain customary conditions. Borrowings under the Revolving Facility accrue interest at LIBOR plus a margin that depends on our credit ratings (0.825% as of June 30, 2019). We pay a facility fee on the entire revolving commitment that depends on our credit ratings (0.15% as of June 30, 2019). |
• | In May 2019, we entered into a new $250 million unsecured term loan facility (the “2019 Term Loan” and, together with the Revolving Facility, the “Facilities”), which we borrowed the full $250 million capacity of in June 2019. The 2019 Term Loan matures on May 23, 2024. The Facilities include a feature that allows us to increase the borrowing capacity by an aggregate amount of up to $750 million, subject to securing additional commitments. |
• | In June 2019, we priced a public offering of $650 million aggregate principal amount of 3.25% senior unsecured notes due 2026 (the “2026 Notes”) and $650 million aggregate principal amount of 3.50% senior unsecured notes due 2029 (the “2029 Notes” and, together with the 2026 Notes, the “Notes”). The offering was completed and proceeds were received on July 5, 2019. |
• | As part of the previously-announced development program with HCA Healthcare, during the second quarter of 2019, we commenced the development of three additional MOBs, two of which are on-campus, with an aggregate estimated cost of approximately $71 million. |
Declaration Date | Record Date | Amount Per Share | Dividend Payment Date | |||||
January 30 | February 19 | $ | 0.37 | February 28 | ||||
April 25 | May 6 | 0.37 | May 21 | |||||
July 25 | August 5 | 0.37 | August 20 |
Three Months Ended June 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net income (loss) applicable to common shares | $ | (13,991 | ) | $ | 89,481 | $ | (103,472 | ) | |||
NAREIT FFO | 198,422 | 209,895 | (11,473 | ) | |||||||
FFO as adjusted | 212,939 | 219,511 | (6,572 | ) | |||||||
FAD | 195,067 | 190,103 | 4,964 |
• | an increase in impairment charges related to real estate and DFLs during the second quarter of 2019; |
• | a reduction in net gain on sales of real estate during the second quarter of 2019; |
• | increased depreciation and amortization expense as a result of: (i) assets acquired during 2018 and 2019, (ii) development and redevelopment projects placed into service during 2018 and 2019, and (iii) the conversion of 14 senior housing triple-net assets from a DFL to a RIDEA structure in 2019, partially offset by dispositions of real estate throughout 2018 and 2019; and |
• | a reduction in income as a result of: (i) asset sales during 2018 and 2019 and (ii) selling interests into the U.K. JV and MSREI JV during 2018 (see Note 3 to the Consolidated Financial Statements). |
• | a gain on consolidation related to the acquisition of the outstanding equity interests in a senior housing joint venture in June 2019; |
• | a reduction in interest expense as a result of debt repayments during 2018; |
• | increased NOI from: (i) 2018 and 2019 acquisitions, (ii) development and redevelopment projects placed in service during 2018 and 2019, and (iii) new leasing activity during 2018 and 2019; and |
• | a casualty-related gain recognized in the second quarter of 2019 as a result of insurance proceeds received related to hurricanes in 2017. |
• | depreciation and amortization expense; |
• | impairments of real estate; |
• | net gain on sales of real estate; and |
• | gain on consolidation of real estate. |
• | impairments of DFLs; and |
• | casualty-related gains. |
Six Months Ended June 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net income (loss) applicable to common shares | $ | 47,036 | $ | 129,322 | $ | (82,286 | ) | ||||
NAREIT FFO | 404,455 | 429,328 | (24,873 | ) | |||||||
FFO as adjusted | 424,961 | 446,861 | (21,900 | ) | |||||||
FAD | 386,536 | 391,834 | (5,298 | ) |
• | an increase in impairment charges related to real estate and DFLs during the first half of 2019; |
• | a reduction in net gain on sales of real estate during the first half of 2019; |
• | a reduction in NOI in our SHOP segment, primarily as a result of occupancy declines and higher labor costs; |
• | increased depreciation and amortization expense as a result of: (i) assets acquired during 2018 and 2019, (ii) development and redevelopment projects placed into service during 2018 and 2019, and (iii) the conversion of 14 senior housing triple-net assets from a DFL to a RIDEA structure in 2019, partially offset by dispositions of real estate throughout 2018 and 2019; and |
• | a reduction in income as a result of: (i) asset sales during 2018 and 2019 and (ii) selling interests into the U.K. JV and MSREI JV during 2018 (see Note 3 to the Consolidated Financial Statements). |
• | a one-time loss on consolidation of seven care homes in the U.K. during the first quarter of 2018 and a one-time gain on consolidation related to the acquisition of the outstanding equity interests in a senior housing joint venture in June 2019; |
• | a reduction in interest expense as a result of debt repayments and a lower average balance under our revolving credit facility; |
• | increased NOI from: (i) 2018 and 2019 acquisitions, (ii) development and redevelopment projects placed in service during 2018 and 2019, and (iii) new leasing activity during 2018 and 2019; |
• | a casualty-related gain recognized in the second quarter of 2019 as a result of insurance proceeds received related to hurricanes in 2017; and |
• | a reduction in severance and related charges. |
• | depreciation and amortization expense; |
• | impairments of real estate; |
• | net gain on sales of real estate; and |
• | gains and losses on consolidation of real estate. |
• | impairments of DFLs; |
• | casualty-related gains; and |
• | severance and related charges. |
SPP | Total Portfolio(1) | ||||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Real estate revenues(2) | $ | 46,630 | $ | 45,730 | $ | 900 | $ | 49,866 | $ | 70,713 | $ | (20,847 | ) | ||||||||||
Operating expenses | (80 | ) | (65 | ) | (15 | ) | (866 | ) | (791 | ) | (75 | ) | |||||||||||
NOI | 46,550 | 45,665 | 885 | 49,000 | 69,922 | (20,922 | ) | ||||||||||||||||
Adjustments to NOI | 331 | (193 | ) | 524 | 4,807 | 1,006 | 3,801 | ||||||||||||||||
Adjusted NOI | $ | 46,881 | $ | 45,472 | $ | 1,409 | 53,807 | 70,928 | (17,121 | ) | |||||||||||||
Less: non-SPP adjusted NOI | (6,926 | ) | (25,456 | ) | 18,530 | ||||||||||||||||||
SPP adjusted NOI | $ | 46,881 | $ | 45,472 | $ | 1,409 | |||||||||||||||||
Adjusted NOI % change | 3.1 | % | |||||||||||||||||||||
Property count(3) | 103 | 103 | 105 | 169 | |||||||||||||||||||
Average capacity (units)(4) | 11,040 | 11,044 | 12,474 | 17,535 | |||||||||||||||||||
Average annual rent per unit | $ | 17,015 | $ | 16,493 | $ | 17,532 | $ | 16,360 |
(1) | Total Portfolio includes results of operations from disposed properties and properties that transitioned segments through the disposition or transition date. |
(2) | Represents rental and related revenues and income from DFLs. |
(3) | From our 2018 presentation of SPP, we removed 2 senior housing triple-net properties that were sold, 2 senior housing triple-net properties that were classified as held for sale, and 51 senior housing triple-net properties that were transitioned to SHOP. |
(4) | Represents average capacity as reported by the respective tenants or operators for the three-month period. |
• | the transfer of 12 and 39 senior housing triple-net facilities to our SHOP segment during 2018 and 2019, respectively, and |
• | senior housing triple-net facilities sold during 2018 and 2019. |
SPP | Total Portfolio(1) | ||||||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Real estate revenues(2) | $ | 92,547 | $ | 91,586 | $ | 961 | $ | 108,758 | $ | 145,003 | $ | (36,245 | ) | ||||||||||
Operating expenses | (159 | ) | (148 | ) | (11 | ) | (1,859 | ) | (1,837 | ) | (22 | ) | |||||||||||
NOI | 92,388 | 91,438 | 950 | 106,899 | 143,166 | (36,267 | ) | ||||||||||||||||
Adjustments to NOI | (1,822 | ) | (3,282 | ) | 1,460 | 5,371 | (858 | ) | 6,229 | ||||||||||||||
Adjusted NOI | $ | 90,566 | $ | 88,156 | $ | 2,410 | 112,270 | 142,308 | (30,038 | ) | |||||||||||||
Less: non-SPP adjusted NOI | (21,704 | ) | (54,152 | ) | 32,448 | ||||||||||||||||||
SPP adjusted NOI | $ | 90,566 | $ | 88,156 | $ | 2,410 | |||||||||||||||||
Adjusted NOI % change | 2.7 | % | |||||||||||||||||||||
Property count(3) | 103 | 103 | 105 | 169 | |||||||||||||||||||
Average capacity (units)(4) | 11,038 | 11,044 | 13,543 | 17,930 | |||||||||||||||||||
Average annual rent per unit | $ | 16,439 | $ | 15,991 | $ | 16,854 | $ | 16,079 |
(1) | Total Portfolio includes results of operations from disposed properties and properties that transitioned segments through the disposition or transition date. |
(2) | Represents rental and related revenues and income from DFLs. |
(3) | From our 2018 presentation of SPP, we removed 2 senior housing triple-net properties that were sold, 2 senior housing triple-net properties that were classified as held for sale, and 51 senior housing triple-net properties that were transitioned to SHOP. |
(4) | Represents average capacity as reported by the respective tenants or operators for the three-month period. |
• | the transfer of 22 and 39 senior housing triple-net facilities to our SHOP segment during 2018 and 2019, respectively, and |
• | senior housing triple-net facilities sold during 2018 and 2019. |
SPP | Total Portfolio(1) | ||||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Resident fees and services | $ | 62,042 | $ | 61,656 | $ | 386 | $ | 177,001 | $ | 138,352 | $ | 38,649 | |||||||||||
Operating expenses | (41,572 | ) | (41,074 | ) | (498 | ) | (137,460 | ) | (101,767 | ) | (35,693 | ) | |||||||||||
NOI | 20,470 | 20,582 | (112 | ) | 39,541 | 36,585 | 2,956 | ||||||||||||||||
Adjustments to NOI | 80 | 461 | (381 | ) | 841 | (124 | ) | 965 | |||||||||||||||
Adjusted NOI | $ | 20,550 | $ | 21,043 | $ | (493 | ) | 40,382 | 36,461 | 3,921 | |||||||||||||
Less: non-SPP adjusted NOI | (19,832 | ) | (15,418 | ) | (4,414 | ) | |||||||||||||||||
SPP adjusted NOI | $ | 20,550 | $ | 21,043 | $ | (493 | ) | ||||||||||||||||
Adjusted NOI % change | (2.3 | )% | |||||||||||||||||||||
Property count(2) | 39 | 39 | 135 | 102 | |||||||||||||||||||
Average capacity (units)(3) | 5,438 | 5,438 | 14,590 | 13,315 | |||||||||||||||||||
Average annual rent per unit | $ | 45,789 | $ | 45,303 | $ | 48,835 | $ | 41,066 |
(1) | Total Portfolio includes results of operations from disposed properties and properties that transitioned segments through the disposition or transition date. |
(2) | From our 2018 presentation of SPP, we removed four SHOP properties that were sold, nine SHOP properties that were classified as held for sale, and seven SHOP properties that were placed in redevelopment. |
(3) | Represents average capacity as reported by the respective tenants or operators for the three-month period. |
• | occupancy declines and higher labor costs; partially offset by |
• | increased rates for resident fees. |
• | increased NOI from (i) 2019 acquisitions and (ii) the transfer of 12 and 39 senior housing triple-net assets to our SHOP segment during 2018 and 2019, respectively; partially offset by |
• | decreased NOI from assets sold in 2018 and 2019. |
SPP | Total Portfolio(1) | ||||||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Resident fees and services | $ | 119,350 | $ | 119,110 | $ | 240 | $ | 303,182 | $ | 283,022 | $ | 20,160 | |||||||||||
Operating expenses | (79,888 | ) | (78,185 | ) | (1,703 | ) | (234,407 | ) | (203,513 | ) | (30,894 | ) | |||||||||||
NOI | 39,462 | 40,925 | (1,463 | ) | 68,775 | 79,509 | (10,734 | ) | |||||||||||||||
Adjustments to NOI | 327 | 657 | (330 | ) | 1,993 | (1,732 | ) | 3,725 | |||||||||||||||
Adjusted NOI | $ | 39,789 | $ | 41,582 | $ | (1,793 | ) | 70,768 | 77,777 | (7,009 | ) | ||||||||||||
Less: non-SPP adjusted NOI | (30,979 | ) | (36,195 | ) | 5,216 | ||||||||||||||||||
SPP adjusted NOI | $ | 39,789 | $ | 41,582 | $ | (1,793 | ) | ||||||||||||||||
Adjusted NOI % change | (4.3 | )% | |||||||||||||||||||||
Property count(2) | 38 | 38 | 135 | 102 | |||||||||||||||||||
Average capacity (units)(3) | 5,257 | 5,258 | 13,663 | 13,056 | |||||||||||||||||||
Average annual rent per unit | $ | 45,653 | $ | 45,087 | $ | 44,686 | $ | 42,742 |
(1) | Total Portfolio includes results of operations from disposed properties and properties that transitioned segments through the disposition or transition date. |
(2) | From our 2018 presentation of SPP, we removed four SHOP properties that were sold, nine SHOP properties that were classified as held for sale, and seven SHOP properties that were placed in redevelopment. |
(3) | Represents average capacity as reported by the respective tenants or operators for the six-month period. |
• | occupancy declines and higher labor costs; partially offset by |
• | increased rates for resident fees. |
• | decreased NOI from assets sold in 2018 and 2019; partially offset by |
• | increased NOI from (i) 2019 acquisitions and (ii) the transfer of 22 and 39 senior housing triple-net assets to our SHOP segment during 2018 and 2019, respectively. |
SPP | Total Portfolio | ||||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Rental and related revenues | $ | 76,519 | $ | 70,924 | $ | 5,595 | $ | 107,596 | $ | 101,031 | $ | 6,565 | |||||||||||
Operating expenses | (18,007 | ) | (16,441 | ) | (1,566 | ) | (25,480 | ) | (22,732 | ) | (2,748 | ) | |||||||||||
NOI | 58,512 | 54,483 | 4,029 | 82,116 | 78,299 | 3,817 | |||||||||||||||||
Adjustments to NOI | (1,520 | ) | (745 | ) | (775 | ) | (7,614 | ) | (2,233 | ) | (5,381 | ) | |||||||||||
Adjusted NOI | $ | 56,992 | $ | 53,738 | $ | 3,254 | 74,502 | 76,066 | (1,564 | ) | |||||||||||||
Less: non-SPP adjusted NOI | (17,510 | ) | (22,328 | ) | 4,818 | ||||||||||||||||||
SPP adjusted NOI | $ | 56,992 | $ | 53,738 | $ | 3,254 | |||||||||||||||||
Adjusted NOI % change | 6.1 | % | |||||||||||||||||||||
Property count(1) | 95 | 95 | 126 | 133 | |||||||||||||||||||
Average occupancy | 95.5 | % | 94.4 | % | 96.3 | % | 94.2 | % | |||||||||||||||
Average occupied square feet | 5,557 | 5,495 | 7,010 | 7,333 | |||||||||||||||||||
Average annual total revenues per occupied square foot | $ | 54 | $ | 51 | $ | 57 | $ | 54 | |||||||||||||||
Average annual base rent per occupied square foot(2) | $ | 43 | $ | 41 | $ | 45 | $ | 44 |
(1) | From our 2018 presentation of SPP, we removed 13 life science facilities that were sold, 4 life science facilities that were placed in redevelopment, and 1 life science facility related to a casualty event. |
(2) | Base rent does not include tenant recoveries, additional rents in excess of floors and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues). |
• | mark-to-market lease renewals; |
• | increased occupancy; |
• | new leasing activity; and |
• | specific to adjusted NOI, annual rent escalations. |
• | decreased NOI from (i) facilities sales in 2018 and 2019 and (ii) the placement of facilities into redevelopment in 2018 and 2019; partially offset by |
• | increased NOI from (i) increased occupancy in developments and redevelopments placed into service in 2018 and 2019 and (ii) acquisitions in 2019. |
SPP | Total Portfolio | ||||||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Rental and related revenues | $ | 145,929 | $ | 136,125 | $ | 9,804 | $ | 202,068 | $ | 200,653 | $ | 1,415 | |||||||||||
Operating expenses | (33,691 | ) | (31,109 | ) | (2,582 | ) | (47,472 | ) | (44,541 | ) | (2,931 | ) | |||||||||||
NOI | 112,238 | 105,016 | 7,222 | 154,596 | 156,112 | (1,516 | ) | ||||||||||||||||
Adjustments to NOI | (1,926 | ) | (1,400 | ) | (526 | ) | (10,091 | ) | (5,984 | ) | (4,107 | ) | |||||||||||
Adjusted NOI | $ | 110,312 | $ | 103,616 | $ | 6,696 | 144,505 | 150,128 | (5,623 | ) | |||||||||||||
Less: non-SPP adjusted NOI | (34,193 | ) | (46,512 | ) | 12,319 | ||||||||||||||||||
SPP adjusted NOI | $ | 110,312 | $ | 103,616 | $ | 6,696 | |||||||||||||||||
Adjusted NOI % change | 6.5 | % | |||||||||||||||||||||
Property count(1) | 94 | 94 | 126 | 133 | |||||||||||||||||||
Average occupancy | 95.7 | % | 94.0 | % | 96.4 | % | 93.9 | % | |||||||||||||||
Average occupied square feet | 5,458 | 5,362 | 6,833 | 7,311 | |||||||||||||||||||
Average annual total revenues per occupied square foot | $ | 53 | $ | 50 | $ | 56 | $ | 53 | |||||||||||||||
Average annual base rent per occupied square foot(2) | $ | 42 | $ | 41 | $ | 45 | $ | 43 |
(1) | From our 2018 presentation of SPP, we removed 13 life science facilities that were sold, 4 life science facilities that were placed in redevelopment, and 1 related to a casualty event. |
(2) | Base rent does not include tenant recoveries, additional rents in excess of floors and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues). |
• | mark-to-market lease renewals; |
• | increased occupancy; |
• | new leasing activity; and |
• | specific to adjusted NOI, annual rent escalations. |
• | decreased NOI from: (i) facilities sales in 2018 and 2019 and (ii) the placement of facilities into redevelopment in 2018 and 2019; partially offset by |
• | increased NOI from: (i) increased occupancy in developments and redevelopments placed into service in 2018 and 2019, and (ii) acquisitions in 2019. |
SPP | Total Portfolio | ||||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Rental and related revenues | $ | 126,653 | $ | 123,887 | $ | 2,766 | $ | 141,927 | $ | 134,574 | $ | 7,353 | |||||||||||
Operating expenses | (44,059 | ) | (43,320 | ) | (739 | ) | (50,176 | ) | (48,528 | ) | (1,648 | ) | |||||||||||
NOI | 82,594 | 80,567 | 2,027 | 91,751 | 86,046 | 5,705 | |||||||||||||||||
Adjustments to NOI | (773 | ) | (1,771 | ) | 998 | (1,203 | ) | (1,831 | ) | 628 | |||||||||||||
Adjusted NOI | $ | 81,821 | $ | 78,796 | $ | 3,025 | 90,548 | 84,215 | 6,333 | ||||||||||||||
Less: non-SPP adjusted NOI | (8,727 | ) | (5,419 | ) | (3,308 | ) | |||||||||||||||||
SPP adjusted NOI | $ | 81,821 | $ | 78,796 | $ | 3,025 | |||||||||||||||||
Adjusted NOI % change | 3.8 | % | |||||||||||||||||||||
Property count(1) | 237 | 237 | 268 | 256 | |||||||||||||||||||
Average occupancy | 92.4 | % | 92.4 | % | 91.7 | % | 92.4 | % | |||||||||||||||
Average occupied square feet | 17,348 | 17,317 | 19,078 | 18,335 | |||||||||||||||||||
Average annual total revenues per occupied square foot | $ | 29 | $ | 28 | $ | 29 | $ | 29 | |||||||||||||||
Average annual base rent per occupied square foot(2) | $ | 24 | $ | 23 | $ | 25 | $ | 24 |
(1) | From our 2018 presentation of SPP, we removed eight MOBs that were sold, four MOBs that were classified as held for sale, and two MOBs that were placed into redevelopment. |
(2) | Base rent does not include tenant recoveries, additional rents in excess of floors and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues). |
• | mark-to-market lease renewals; |
• | new leasing activity; |
• | an increase in percentage-based rents; and |
• | specific to adjusted NOI, annual rent escalations. |
• | increased NOI from 2018 and 2019 acquisitions; and |
• | increased occupancy in former redevelopment and development properties that have been placed into service; partially offset by |
• | decreased NOI from MOB sales during 2018 and 2019. |
SPP | Total Portfolio | ||||||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Rental and related revenues | $ | 241,021 | $ | 234,856 | $ | 6,165 | $ | 284,122 | $ | 267,794 | $ | 16,328 | |||||||||||
Operating expenses | (81,446 | ) | (80,368 | ) | (1,078 | ) | (99,163 | ) | (96,406 | ) | (2,757 | ) | |||||||||||
NOI | 159,575 | 154,488 | 5,087 | 184,959 | 171,388 | 13,571 | |||||||||||||||||
Adjustments to NOI | (2,079 | ) | (3,289 | ) | 1,210 | (2,974 | ) | (3,764 | ) | 790 | |||||||||||||
Adjusted NOI | $ | 157,496 | $ | 151,199 | $ | 6,297 | 181,985 | 167,624 | 14,361 | ||||||||||||||
Less: non-SPP adjusted NOI | (24,489 | ) | (16,425 | ) | (8,064 | ) | |||||||||||||||||
SPP adjusted NOI | $ | 157,496 | $ | 151,199 | $ | 6,297 | |||||||||||||||||
Adjusted NOI % change | 4.2 | % | |||||||||||||||||||||
Property count(1) | 230 | 230 | 268 | 256 | |||||||||||||||||||
Average occupancy | 92.9 | % | 93.1 | % | 91.9 | % | 92.4 | % | |||||||||||||||
Average occupied square feet | 16,578 | 16,569 | 19,091 | 18,339 | |||||||||||||||||||
Average annual total revenues per occupied square foot | $ | 29 | $ | 28 | $ | 29 | $ | 29 | |||||||||||||||
Average annual base rent per occupied square foot(2) | $ | 24 | $ | 23 | $ | 25 | $ | 24 |
(1) | From our 2018 presentation of SPP, we removed eight MOBs that were sold, four MOBs that were classified as held for sale, and two MOBs that were placed into redevelopment. |
(2) | Base rent does not include tenant recoveries, additional rents in excess of floors and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues). |
• | mark-to-market lease renewals; |
• | new leasing activity; |
• | an increase in percentage-based rents; and |
• | specific to adjusted NOI, annual rent escalations of annual rent escalations. |
• | increased NOI from 2018 and 2019 acquisitions; and |
• | increased occupancy in former redevelopment and development properties that have been placed into service; partially offset by |
• | decreased NOI from MOB sales during 2018 and 2019. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||||
Interest income | $ | 2,414 | $ | 1,447 | $ | 967 | $ | 4,127 | $ | 7,812 | $ | (3,685 | ) | ||||||||||
Interest expense | 56,942 | 73,038 | (16,096 | ) | 106,269 | 148,140 | (41,871 | ) | |||||||||||||||
Depreciation and amortization | 165,296 | 143,292 | 22,004 | 297,247 | 286,542 | 10,705 | |||||||||||||||||
General and administrative | 27,120 | 22,514 | 4,606 | 48,475 | 51,689 | (3,214 | ) | ||||||||||||||||
Transaction costs | 1,337 | 2,404 | (1,067 | ) | 5,855 | 4,599 | 1,256 | ||||||||||||||||
Impairments (recoveries), net | 68,538 | 13,912 | 54,626 | 77,396 | 13,912 | 63,484 | |||||||||||||||||
Gain (loss) on sales of real estate, net | 11,448 | 46,064 | (34,616 | ) | 19,492 | 66,879 | (47,387 | ) | |||||||||||||||
Loss on debt extinguishments | (1,135 | ) | — | (1,135 | ) | (1,135 | ) | — | (1,135 | ) | |||||||||||||
Other income (expense), net | 21,008 | 1,786 | 19,222 | 24,141 | (38,621 | ) | 62,762 | ||||||||||||||||
Income tax benefit (expense) | 1,864 | 4,654 | (2,790 | ) | 5,322 | 9,990 | (4,668 | ) | |||||||||||||||
Equity income (loss) from unconsolidated joint ventures | (1,506 | ) | (101 | ) | (1,405 | ) | (2,369 | ) | 469 | (2,838 | ) | ||||||||||||
Noncontrolling interests’ share in earnings | (3,617 | ) | (2,986 | ) | (631 | ) | (7,137 | ) | (5,991 | ) | (1,146 | ) |
• | fund capital expenditures, including tenant improvements and leasing costs and |
• | fund future acquisition, transactional and development activities. |
• | cash flow from operations; |
• | sale or exchange of ownership interests in properties; |
• | draws on our credit facilities; |
• | issuance of additional debt, including unsecured notes and mortgage debt; and/or |
• | issuance of common or preferred stock. |
Six Months Ended June 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net cash provided by (used in) operating activities | $ | 380,560 | $ | 439,674 | $ | (59,114 | ) | ||||
Net cash provided by (used in) investing activities | (1,088,977 | ) | 491,768 | (1,580,745 | ) | ||||||
Net cash provided by (used in) financing activities | 724,658 | (891,740 | ) | 1,616,398 |
• | made investments of $1.3 billion primarily related to the acquisition, development, and redevelopment of real estate and |
• | received net proceeds of $179 million primarily from sales of real estate assets. |
• | received net proceeds of $803 million primarily from the sale of our RIDEA II, Tandem Mezzanine Loan, and other real estate and |
• | made investments of $311 million primarily for the development of real estate. |
• | made net borrowings of $695 million under our bank line of credit, term loan, and mortgage debt; |
• | Issued common stock of $407 million; and |
• | paid cash dividends on common stock of $355 million. |
• | made net repayments of $470 million under our bank line of credit; |
• | paid cash dividends on common stock of $348 million; and |
• | paid $63 million to purchase Brookdale’s noncontrolling interest in RIDEA I. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) applicable to common shares | $ | (13,991 | ) | $ | 89,481 | $ | 47,036 | $ | 129,322 | ||||||
Real estate related depreciation and amortization | 165,296 | 143,292 | 297,247 | 286,542 | |||||||||||
Real estate related depreciation and amortization on unconsolidated joint ventures | 15,123 | 16,162 | 30,200 | 33,550 | |||||||||||
Real estate related depreciation and amortization on noncontrolling interests and other | (5,013 | ) | (1,664 | ) | (9,934 | ) | (4,207 | ) | |||||||
Other real estate-related depreciation and amortization | 1,357 | 1,268 | 3,442 | 2,563 | |||||||||||
Loss (gain) on sales of real estate, net | (11,448 | ) | (46,064 | ) | (19,492 | ) | (66,879 | ) | |||||||
Loss (gain) on sales of real estate, net on noncontrolling interests | 208 | — | 208 | — | |||||||||||
Loss (gain) upon consolidation of real estate, net(1) | (11,501 | ) | — | (11,501 | ) | 41,017 | |||||||||
Taxes associated with real estate dispositions | — | 1,147 | — | 1,147 | |||||||||||
Impairments (recoveries) of depreciable real estate, net | 58,391 | 6,273 | 67,249 | 6,273 | |||||||||||
NAREIT FFO applicable to common shares | 198,422 | 209,895 | 404,455 | 429,328 | |||||||||||
Distributions on dilutive convertible units and other | 1,484 | — | 3,279 | — | |||||||||||
Diluted NAREIT FFO applicable to common shares | $ | 199,906 | $ | 209,895 | $ | 407,734 | $ | 429,328 | |||||||
Weighted average shares outstanding - diluted NAREIT FFO | 485,054 | 469,941 | 484,435 | 469,799 | |||||||||||
Impact of adjustments to NAREIT FFO: | |||||||||||||||
Transaction-related items | $ | 6,435 | $ | 1,993 | $ | 12,324 | $ | 3,934 | |||||||
Other impairments (recoveries) and losses (gains), net(2) | 10,147 | 7,639 | 10,147 | 4,341 | |||||||||||
Severance and related charges(3) | 3,728 | — | 3,728 | 8,738 | |||||||||||
Loss on debt extinguishments | 1,135 | — | 1,135 | — | |||||||||||
Litigation costs (recoveries) | (527 | ) | 179 | (399 | ) | 585 | |||||||||
Casualty-related charges (recoveries), net(4) | (6,242 | ) | — | (6,242 | ) | — | |||||||||
Foreign currency remeasurement losses (gains) | (159 | ) | (195 | ) | (187 | ) | (65 | ) | |||||||
Total adjustments | $ | 14,517 | $ | 9,616 | $ | 20,506 | $ | 17,533 | |||||||
FFO as adjusted applicable to common shares | $ | 212,939 | $ | 219,511 | $ | 424,961 | $ | 446,861 | |||||||
Distributions on dilutive convertible units and other | 1,446 | (28 | ) | 3,226 | (45 | ) | |||||||||
Diluted FFO as adjusted applicable to common shares | $ | 214,385 | $ | 219,483 | $ | 428,187 | $ | 446,816 | |||||||
Weighted average shares outstanding - diluted FFO as adjusted | 485,054 | 469,941 | 484,435 | 469,799 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
FFO as adjusted applicable to common shares | $ | 212,939 | $ | 219,511 | $ | 424,961 | $ | 446,861 | |||||||
Amortization of deferred compensation(5) | 4,308 | 4,299 | 7,898 | 7,719 | |||||||||||
Amortization of deferred financing costs | 2,740 | 3,355 | 5,440 | 6,690 | |||||||||||
Straight-line rents | (5,695 | ) | (5,793 | ) | (11,940 | ) | (16,479 | ) | |||||||
FAD capital expenditures | (19,513 | ) | (26,346 | ) | (38,733 | ) | (45,592 | ) | |||||||
Lease restructure payments | 292 | 303 | 580 | 601 | |||||||||||
CCRC entrance fees(6) | 4,845 | 3,652 | 8,340 | 6,679 | |||||||||||
Deferred income taxes | (3,897 | ) | (5,731 | ) | (7,629 | ) | (7,871 | ) | |||||||
Other FAD adjustments(7) | (952 | ) | (3,147 | ) | (2,381 | ) | (6,774 | ) | |||||||
FAD applicable to common shares | 195,067 | 190,103 | 386,536 | 391,834 | |||||||||||
Distributions on dilutive convertible units and other | 1,484 | — | 3,278 | — | |||||||||||
Diluted FAD applicable to common shares | $ | 196,551 | $ | 190,103 | $ | 389,814 | $ | 391,834 | |||||||
Weighted average shares outstanding - diluted FAD | 485,054 | 469,941 | 484,435 | 469,799 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Diluted earnings per common share | $ | (0.03 | ) | $ | 0.19 | $ | 0.10 | $ | 0.28 | ||||||
Depreciation and amortization | 0.36 | 0.35 | 0.66 | 0.67 | |||||||||||
Loss (gain) on sales of real estate, net | (0.02 | ) | (0.10 | ) | (0.04 | ) | (0.14 | ) | |||||||
Loss (gain) upon consolidation of real estate, net(1) | (0.02 | ) | — | (0.02 | ) | 0.09 | |||||||||
Impairments (recoveries) of depreciable real estate, net | 0.12 | 0.01 | 0.14 | 0.01 | |||||||||||
Diluted NAREIT FFO per common share | $ | 0.41 | $ | 0.45 | $ | 0.84 | $ | 0.91 | |||||||
Transaction-related items | 0.01 | — | 0.02 | 0.01 | |||||||||||
Other impairments (recoveries) and losses (gains), net(2) | 0.02 | 0.02 | 0.02 | 0.01 | |||||||||||
Severance and related charges(3) | 0.01 | — | 0.01 | 0.02 | |||||||||||
Casualty-related charges (recoveries), net(4) | (0.01 | ) | — | (0.01 | ) | — | |||||||||
Diluted FFO as adjusted per common share | $ | 0.44 | $ | 0.47 | $ | 0.88 | $ | 0.95 |
(1) | For the three and six months ended June 30, 2019, represents the gain related to the acquisition of the outstanding equity interests in a previously unconsolidated senior housing joint venture. For the six months ended June 30, 2018, represents the loss on consolidation of seven U.K. care homes. |
(2) | For the three and six months ended June 30, 2019, represents the impairment of 13 senior housing triple-net facilities under DFLs recognized as a result of entering into sales agreements. For the three months ended June 30, 2018, represents the impairment of an undeveloped life science land parcel classified as held for sale. For the six months ended June 30, 2018, represents the impairment of an undeveloped life science land parcel classified as held for sale, partially offset by an impairment recovery upon the sale of our Tandem Mezzanine Loan in March 2018. |
(3) | For the three and six months ended June 30, 2019, relates to the departure of certain former employees. For the six months ended June 30, 2018, primarily relates to the departure of our former Executive Chairman, which consisted of $6 million of cash severance and $3 million of equity award vestings. |
(4) | For the three and six months ended June 30, 2019, represents incremental insurance proceeds received for property damage and other associated costs related to hurricanes in 2017. |
(5) | Excludes amounts related to the acceleration of deferred compensation for restricted stock units that vested upon the departure of certain former employees, which have already been excluded from FFO as adjusted in severance and related charges. |
(6) | Represents our 49% share of our CCRC JV's non-refundable entrance fees collected in excess of amortization. |
(7) | Primarily includes our share of FAD capital expenditures from unconsolidated joint ventures, partially offset by noncontrolling interests' share of FAD capital expenditures from consolidated joint ventures. |
Period Covered | Total Number Of Shares Purchased(1) | Average Price Paid Per Share | Total Number Of Shares (Or Units) Purchased As Part Of Publicly Announced Plans Or Programs | Maximum Number (Or Approximate Dollar Value) Of Shares (Or Units) That May Yet Be Purchased Under The Plans Or Programs | |||||||||
April 1-30, 2019 | 7,678 | $ | 29.64 | — | — | ||||||||
May 1-31, 2019 | 23,376 | 30.13 | — | — | |||||||||
June 1-30, 2019 | 23,135 | 31.58 | — | — | |||||||||
Total | 54,189 | $ | 30.68 | — | — |
(1) | Represents shares of our common stock withheld under our equity incentive plans to offset tax withholding obligations that occur upon vesting of restricted shares. The value of the shares withheld is based on the closing price of our common stock on the last trading day prior to the date the relevant transaction occurred. |
3.1 | ||
3.2 | ||
4.1 | ||
4.2 | ||
4.3 | ||
10.1 | ||
10.2 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.* | |
101.SCH | XBRL Taxonomy Extension Schema Document.* | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document.* | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document.* | |
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document.* | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document.* |
Date: August 1, 2019 | HCP, Inc. |
(Registrant) | |
/s/ THOMAS M. HERZOG | |
Thomas M. Herzog | |
President and Chief Executive Officer | |
(Principal Executive Officer) | |
/s/ PETER A. SCOTT | |
Peter A. Scott | |
Executive Vice President and | |
Chief Financial Officer | |
(Principal Financial Officer) | |
/s/ SHAWN G. JOHNSTON | |
Shawn G. Johnston | |
Executive Vice President and | |
Chief Accounting Officer | |
(Principal Accounting Officer) |
Page | ||||
ARTICLE I DEFINED TERMS | 1 | |||
ARTICLE II ORGANIZATIONAL MATTERS | 21 | |||
2.1 | Formation | 21 | ||
2.2 | Name | 21 | ||
2.3 | Registered Office and Agent; Principal Place of Business; Other Places of Business | 21 | ||
2.4 | Power of Attorney | 22 | ||
2.5 | Term | 23 | ||
ARTICLE III PURPOSE | 23 | |||
3.1 | Purpose and Business | 23 | ||
3.2 | Powers | 23 | ||
3.3 | Specified Purposes | 24 | ||
3.4 | Representations and Warranties by the Members; Disclaimer of Certain Representations | 24 | ||
ARTICLE IV CAPITAL CONTRIBUTIONS | 26 | |||
4.1 | Capital Contributions of the Initial Members | 26 | ||
4.2 | Additional Members | 26 | ||
4.3 | Loans and Incurrence and Payment of Debt | 26 | ||
4.4 | Additional Funding and Capital Contributions | 27 | ||
4.5 | No Interest; No Return | 27 | ||
ARTICLE V DISTRIBUTIONS | 28 | |||
5.1 | Requirement and Characterization of Distributions | 28 | ||
5.2 | Distributions in Kind | 29 | ||
5.3 | Amounts Withheld | 29 | ||
5.4 | Distributions Upon Liquidation | 30 | ||
5.5 | Restricted Distributions | 30 | ||
5.6 | Distributions of Proceeds from Sale of Properties and Refinancing Debt | 30 | ||
5.7 | Distributions Following Redemption | 32 | ||
5.8 | Offsets | 32 | ||
5.9 | Special Managing Member Distribution Calculation | 32 | ||
5.10 | Special Distribution to Initial Non-Managing Member | 32 | ||
ARTICLE VI ALLOCATIONS | 32 | |||
6.1 | Timing and Amount of Allocations of Net Income and Net Loss | 32 | ||
6.2 | General Allocations | 33 | ||
6.3 | Additional Allocation Provisions | 34 | ||
6.4 | Tax Allocations | 36 | ||
6.5 | Other Provisions | 37 |
6.6 | Amendments to Allocation to Reflect Issuance of Additional Membership Interests | 37 | ||||||
ARTICLE VII MANAGEMENT AND OPERATION OF BUSINESS | 38 | |||||||
7.1 | Management | 38 | ||||||
7.2 | Certificate of Formation | 42 | ||||||
7.3 | Restrictions on Managing Member’s Authority | 42 | ||||||
7.4 | Compensation of the Managing Member | 48 | ||||||
7.5 | Other Business of Managing Member | 49 | ||||||
7.6 | Contracts with Affiliates | 50 | ||||||
7.7 | Indemnification | 50 | ||||||
7.8 | Liability of the Managing Member | 52 | ||||||
7.9 | Other Matters Concerning the Managing Member | 53 | ||||||
7.10 | Title to Company Assets | 54 | ||||||
7.11 | Reliance by Third Parties | 54 | ||||||
ARTICLE VIII RIGHTS AND OBLIGATIONS OF MEMBERS | 54 | |||||||
8.1 | Limitation of Liability | 54 | ||||||
8.2 | Managing of Business | 54 | ||||||
8.3 | Outside Activities of Members | 55 | ||||||
8.4 | Return of Capital | 55 | ||||||
8.5 | Rights of Non-Managing Members Relating to the Company | 55 | ||||||
8.6 | Redemption Rights | 56 | ||||||
ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS | 59 | |||||||
9.1 | Records and Accounting | 59 | ||||||
9.2 | Fiscal Year | 59 | ||||||
9.3 | Reports | 59 | ||||||
9.4 | Cooperation Regarding Tax Matters Relating to the Contributed Properties | 60 | ||||||
ARTICLE X TAX MATTERS | 61 | |||||||
10.1 | Preparation of Tax Returns | 61 | ||||||
10.2 | Tax Elections | 61 | ||||||
10.3 | Partnership Representative | 61 | ||||||
10.4 | Organizational Expenses | 64 | ||||||
10.5 | Tax Partnership Treatment | 64 | ||||||
ARTICLE XI TRANSFERS AND WITHDRAWALS | 64 | |||||||
11.1 | Transfer | 64 | ||||||
11.2 | Transfer of Managing Member’s Membership Interest | 64 | ||||||
11.3 | Non-Managing Members’ Rights to Transfer | 66 | ||||||
11.4 | Substituted Members | 67 | ||||||
11.5 | Assignees | 68 | ||||||
11.6 | General Provisions | 68 | ||||||
ARTICLE XII ADMISSION OF MEMBERS | 70 | |||||||
12.1 | Admission of Initial Non-Managing Member | 70 | ||||||
12.2 | Admission of Successor Managing Member | 70 |
12.3 | Admission of Additional Members | 70 | ||||
12.4 | Amendment of Agreement and Certificate | 71 | ||||
12.5 | Limitation on Admission of Members | 71 | ||||
ARTICLE XIII DISSOLUTION, LIQUIDATION AND TERMINATION | 71 | |||||
13.1 | Dissolution | 71 | ||||
13.2 | Redemption of Non-Managing Member Units | 72 | ||||
13.3 | Winding Up | 73 | ||||
13.4 | Deemed Contribution and Distribution | 74 | ||||
13.5 | Rights of Members | 74 | ||||
13.6 | Notice of Dissolution | 74 | ||||
13.7 | Cancellation of Certificate | 75 | ||||
13.8 | Reasonable Time for Winding-Up | 75 | ||||
13.9 | Liability of Liquidator | 75 | ||||
ARTICLE XIV PROCEDURES FOR ACTIONS AND CONSENTS OF MEMBERS; AMENDMENTS; MEETINGS | 75 | |||||
14.1 | Procedures for Actions and Consents of Members | 75 | ||||
14.2 | Amendments | 75 | ||||
14.3 | Meetings of the Members | 76 | ||||
ARTICLE XV GENERAL PROVISIONS | 77 | |||||
15.1 | Addresses and Notice | 77 | ||||
15.2 | Titles and Captions | 77 | ||||
15.3 | Pronouns and Plurals | 77 | ||||
15.4 | Further Action | 77 | ||||
15.5 | Binding Effect | 77 | ||||
15.6 | Creditors | 77 | ||||
15.7 | Waiver | 78 | ||||
15.8 | Counterparts | 78 | ||||
15.9 | Applicable Law | 78 | ||||
15.10 | Entire Agreement | 78 | ||||
15.11 | Invalidity of Provisions | 78 | ||||
15.12 | No Partition | 78 | ||||
15.13 | Non-Managing Member Representative | 79 | ||||
15.14 | Uniform Commercial Code Article 8 (Opt-In) | 79 | ||||
Guarantee Joinder by HCP, Inc | Guarantee-1 |
Exhibits and Schedules: | ||
Exhibit A | Member Information | A-1 |
Exhibit B | Notice of Redemption | B-1 |
Exhibit C | Form of Joinder Agreement | C-1 |
Exhibit D | Example of Certain Calculations Pursuant to Section 5.6.C | D-1 |
Exhibit E | Form of Principal Guarantee | E-1 |
Exhibit F | Form of HCP Note | F-1 |
Exhibit G | Form of Pledge and Security Agreement | G-1 |
Schedule 1 | Contributor Principals | 1-1 |
Schedule 2 | Existing Indebtedness | 2-1 |
MANAGING MEMBER: | |
HCP DR CALIFORNIA III HOLDCO, LLC, | |
a Delaware limited liability company | |
By: | /s/ Adam G. Mabry |
Name: Adam G. Mabry | |
Title: Senior Vice President |
NON-MANAGING MEMBER: | |
DOWLING COURT PROPERTIES I LLC, a | |
California limited liability company | |
By: | /s/ William P. Gallaher |
Name: William P. Gallaher | |
Title: Manager |
HCP, INC., | |
a Maryland corporation | |
By: | /s/ Adam G. Mabry |
Name: Adam G. Mabry | |
Title: Senior Vice President |
Non-Managing Member (1) | Contribution | Gross Asset Value of Contribution (2) | Net Asset Value of Contribution (2) | ||||
Dowling Court Properties I LLC | Fair Oaks Property | $54,278,000.00 | $1,802,035.58 | ||||
Mariner Point Property | $28,037,000.00 | $795,114.53 | |||||
Whittier Property | $30,600,000.00 | $1,018,240.80 | |||||
Total: | $112,915,000.00 | $3,615,390.91 |
Managing Member | Contribution | Gross Asset Value of Contribution | Net Asset Value of Contribution |
HCP DR California III HoldCo, LLC | Cash | $28,915,746.22 | $28,915,746.22 |
Name | Address | Non-Managing Member Units |
Dowling Court Properties I LLC | Dowling Court Properties I LLC 9240 Old Redwood Highway, Suite 200 Windsor, CA 95492 Attention: Joe Lin Facsimile: (707) 535-8299 Email: joe.lin@oakmontsl.com | 117,079 |
Name | Address | Managing Member Units |
HCP DR California III HoldCo, LLC | HCP DR California III HoldCo, LLC 1920 Main Street, Suite 1200 Irvine, California 92614 Attention: Senior Vice President, Asset Management Facsimile: (949) 407-0800 Email: shnotices@hcpi.com | 936,391 |
To: | HCP DR California III, LLC | |
c/o HCP, Inc. | ||
1920 Main Street, Suite 1200 | ||
Irvine, California 92614 | ||
Attention: Senior Vice President, Asset Management | ||
Facsimile: (949) 407-0800 | ||
Email: shnotices@hcpi.com | ||
With a copy to: | HCP DR California III, LLC | |
c/o HCP, Inc. | ||
1920 Main Street, Suite 1200 | ||
Irvine, California 92614 | ||
Attention: Scott Graziano, Senior Vice President, Deputy General | ||
Counsel, Assistant Corporate Secretary | ||
Facsimile: (949) 407-0800 | ||
Email: sgraziano@hcpi.com |
Name of Member or Assignee: | |
(Signature of Member or Assignee) | |
(Street Address) | |
(City) (State) (Zip) | |
Signature Guaranteed by: | |
Issue REIT Shares in the name of: | |
Please insert social security or identifying | |
number: |
COMPANY: | NEW MEMBER: |
HCP DR California III, LLC, a Delaware limited liability company | [______________________], a [_______________________] |
By: HCP DR California III HoldCo, LLC, a Delaware limited liability company, its Managing Member | By:__________________________ Name:_______________________ Title: ________________________ |
By:______________________________ Name:___________________________ Title: ____________________________ |
1. | LLC unit ownership: |
Units | Effective Price | Value of Interest | Percentage Interest | |
Managing Member Units (MMUs) | 2,400,000 | $25 | 60,000,000 | 75% |
Non-Managing Member Units (NMMUs) | 800,000 | $25 | 20,000,000 | 25% |
Total | 3,200,000 | 80,000,000 |
2. | Sale of property to which distribution pursuant to Sec. 5.6.A(2) relates: Disposition Proceeds = $30MM Initial value = $25MM Property Appreciation = $5MM Portion of Disposition Proceeds to be distributed = $10MM |
3. | Other assumptions: Value of REIT stock on Reduction Date = $30 There is no Preferred Return Shortfall or Managing Member Shortfall Unit Portion (Net Cash Flow of property sold/Net Cash Flow of all Contributed Properties) = .20 There have been no previous distributions of Disposition Proceeds or Refinancing Debt Proceeds Adjustment Factor = 1.0 |
(a) | $2.5MM ($10MM distribution * 25% NMM LLC units), over |
(b) | NMM Sharing Amount of $18,000 |
1. | Guarantee. |
A. | Guarantors hereby irrevocably and unconditionally guarantee the collection by Guaranteed Party of, and hereby agree to pay to Guaranteed Party upon demand (following the commercially reasonable exhaustion of the exercise of any and all remedies available to Guaranteed Party against Borrower, including, without limitation and to the extent applicable, realizing upon the assets of Borrower or any other collateral for the Guaranteed Obligations), an amount equal to the excess, if any, of the Guaranteed Amount over the Borrower Proceeds (as hereinafter defined); provided that the obligation of each Guarantor shall be limited severally, and not jointly, to such Guarantor’s Maximum Guaranteed Amount, as set forth on such Guarantor’s counterpart signature page attached hereto. Each Guarantor’s obligations as set forth in this Paragraph 1.A are hereinafter referred to as the “Guaranteed Obligations.” |
B. | For the purposes of this Guarantee, the term “Borrower Proceeds” shall mean the aggregate of all amounts collected from Borrower or realized |
(i) | waive or otherwise consent to noncompliance with any provision of the Credit Document, or any part thereof, or any other instrument or agreement in respect of the Guaranteed Obligations now or hereafter executed by Borrower or any other person and delivered to Guaranteed Party; |
(ii) | accept partial payments on the Guaranteed Obligations by Borrower; |
(iii) | receive, take and hold additional security or collateral for the payment of the Guaranteed Obligations or for the payment of this Guarantee, or for the payment of any other guarantees of the Guaranteed Obligations, and exchange, enforce, waive, substitute, liquidate, terminate, abandon, fail to perfect, subordinate, transfer, or otherwise alter or release any such additional security or collateral; |
(iv) | apply any and all such security or collateral and direct the order or manner of sale thereof as Guaranteed Party may determine in its sole discretion; |
(v) | settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations or accept, substitute, release, exchange or otherwise alter, affect or impair any mortgage or any other security or collateral for the Guaranteed Obligations or any other guarantee therefor, in any manner; |
(vi) | add, release or substitute any one or more other guarantors, borrowers or endorsers of the Guaranteed Obligations and otherwise deal with Borrower or any other guarantor as Guaranteed Party may elect in its sole discretion; and |
(vii) | apply any and all payments or recoveries from Borrower, any Guarantor or any other guarantor of the Guaranteed Obligations, to such of the Guaranteed Obligations as Guaranteed Party in its sole discretion may determine, whether such Guaranteed Obligations are secured or unsecured or guaranteed or not guaranteed by others. |
A. | Subject to the provisions of this Paragraph 4.A, this Guarantee is irrevocable as to any and all of the Guaranteed Obligations of each Guarantor until such Guarantor has disposed of all of its equity interests in Borrower (the “Termination Date”), provided that the obligations of such Guarantor hereunder shall continue after the Termination Date to the extent of any claims that are attributable fully and solely to an event or action that occurred on or before the Termination Date. |
B. | In the event that any Guarantor disposes of all or any portion of such Guarantor’s equity interest in Borrower, the Guaranteed Obligations of such Guarantor shall be decreased by an amount equal to the portion of the Guaranteed Obligations of such Guarantor allocable to the disposed of equity interest (a “Reduction Date”), provided that the obligations of such Guarantor hereunder shall continue after the Reduction Date with respect to the Guaranteed Obligations undiminished by such reduction to the extent of any claims that are attributable fully and solely to an event or action that occurred on or before said Reduction Date. |
C. | This Guarantee is binding on each Guarantor and its successors and assigns, and inures to the benefit of Guaranteed Party. |
D. | Upon request of the Guaranteed Party, the Guarantor shall provide the Guaranteed Party commercially reasonable documentation regarding the Guarantor’s financial condition, including any applicable financial statements that illustrate the Guarantor’s wherewithal to satisfy the Guarantee. |
E. | The Guarantor intends that this Guarantee satisfy the requirements of Code Section 752 and the Treasury Regulations promulgated thereunder for a valid payment obligation with respect to the Guaranteed Obligation. |
F. | No delay on the part of Guaranteed Party in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise or waiver by Guaranteed Party of any right or remedy shall preclude any further exercise thereof, nor shall any modification or waiver of any of the provisions of this Guarantee be binding upon Guaranteed Party, except as expressly set forth in a writing duly signed or delivered by Guaranteed Party or on Guaranteed Party’s behalf by an authorized officer or agent of Guaranteed Party. Guaranteed Party’s failure at any time or times hereafter to require strict performance by Borrower, any Guarantor or any other person of any of the provisions, warranties, terms and conditions contained in any security agreement, agreements, guarantee, instrument or document now or at any time or times hereafter executed by Borrower or any Guarantor or delivered to Guaranteed Party shall not waive, affect or diminish any right of Guaranteed Party at any time or times hereafter to demand strict performance thereof and such right shall not be deemed to have been waived by any act or knowledge of Guaranteed Party, its agents, officers, or employees, unless such waiver is contained in an instrument in writing signed by an officer or agent of Guaranteed Party and directed to Borrower or such Guarantor, or any of them (as the case may be) specifying such waiver. No waiver by Guaranteed Party of any default shall operate as a waiver of any other default or the same default on a future occasion, and no action by Guaranteed Party permitted hereunder shall in any way affect or impair Guaranteed Party’s rights or the obligations of any Guarantor under this Guarantee. |
G. | This Guarantee shall be interpreted and the rights and liabilities of the parties hereto determined in accordance with the internal laws of the State of California without regard to the principles of conflicts of laws. |
H. | This Guarantee contains all the terms and conditions of the agreement between Guaranteed Party and each Guarantor. The terms and provisions of this Guarantee may not be waived, altered, modified or amended except in writing duly executed by the party to be charged thereby. |
I. | This Guarantee may be executed in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same agreement. The exchange of copies of this Guarantee and of signature pages by facsimile transmission or electronic mail transmission (e.g., in .PDF format) will constitute effective execution and delivery of this Guarantee as to the parties and may be used in lieu of the original Guarantee for all purposes. Signatures of the parties transmitted by facsimile or electronic mail (e.g., in .PDF format) will be deemed to be their original signatures for any purpose whatsoever. |
J. | Guarantor acknowledges that Guaranteed Party makes no representation or warranty concerning the treatment or effect of this Guaranty Agreement under federal, state, local, or foreign tax law. |
K. | Any notice shall be directed to the parties at the following addresses: |
If to a Guarantor: | To the address set forth next to such Guarantor’s name on Schedule 1 attached hereto |
If to Guaranteed Party: | HCP, Inc. 1920 Main Street, Suite 1200 Irvine, California 92614 Attention: Senior Vice President, Asset Management Facsimile: (949) 407-0800 Email: shnotices@hcpi.com |
GUARANTOR: |
[Name] |
GUARANTOR: |
[Name] |
GUARANTOR: |
[Name] |
GUARANTOR: |
[Name] |
GUARANTOR: |
[Name] |
Guarantor | Address |
[__________] | [__________] [__________] [__________] |
[__________] | [__________] [__________] [__________] |
[__________] | [__________] [__________] [__________] |
[__________] | [__________] [__________] [__________] |
[__________] | [__________] [__________] [__________] |
HCP DR CALIFORNIA III, LLC, | |
a Delaware limited liability company | |
By: | |
Name: Adam G. Mabry | |
Title: Senior Vice President |
Page | |||||
Section 1 | DEFINED TERMS | 1 | |||
1.1 | Definitions | 1 | |||
1.2 | Other Definitional Provisions | 4 | |||
Section 2 | GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL | 4 | |||
Section 3 | REPRESENTATIONS AND WARRANTIES | 5 | |||
3.1 | Organization and Qualification; Authority; Binding Effect | 5 | |||
3.2 | No Conflict; Required Filings and Consents | 6 | |||
3.3 | Title; No Other Liens | 6 | |||
3.4 | Valid, Perfected First Priority Liens | 6 | |||
3.5 | Name; Jurisdiction of Organization, Etc. | 6 | |||
3.6 | Pledged Equity Interests | 7 | |||
Section 4 | COVENANTS | ||||
4.1 | Covenants in Note | 7 | |||
4.2 | Delivery and Control of Pledged Equity Interests | 8 | |||
4.3 | Maintenance of Perfected Security Interest; Further Documentation | 8 | |||
4.4 | Changes in Locations, Name, Jurisdiction of Incorporation, Etc. | 8 | |||
4.5 | Notices | 9 | |||
4.6 | Pledged Equity Interests | 9 | |||
4.7 | Voting and Other Rights with Respect to Pledged Equity Interests | 10 | |||
4.8 | Issuer Subsidiary Interests | 11 | |||
Section 5 | REMEDIAL PROVISIONS | 11 | |||
5.1 | Proceeds to be Turned Over To Secured Party | 11 | |||
5.2 | Application of Proceeds | 11 | |||
5.3 | Code and Other Remedies | 12 | |||
5.4 | Effect of Securities Laws | 13 | |||
5.5 | Deficiency | 13 | |||
Section 6 | POWER OF ATTORNEY AND FURTHER ASSURANCES | 13 | |||
6.1 | Secured Party’s Appointment as Attorney-in-Fact, Etc. | 13 | |||
6.2 | Authorization of Financing Statements | 15 | |||
6.3 | Further Assurances | 15 | |||
Page | |||||
Section 7 | MISCELLANEOUS | 16 | |||
7.1 | Amendments in Writing | 16 | |||
7.2 | Notices | 16 | |||
7.3 | No Waiver by Course of Conduct; Cumulative Remedies | 16 | |||
7.4 | Enforcement Expenses; Indemnification | 16 | |||
7.5 | Successors and Assigns | 17 | |||
7.6 | Set-Off | 17 | |||
7.7 | Counterparts | 17 | |||
7.8 | Severability | 18 | |||
7.9 | Section Headings | 18 | |||
7.10 | Integration/Conflict | 18 | |||
7.11 | GOVERNING LAW | 18 | |||
7.12 | Submission to Jurisdiction; Waivers | 18 | |||
7.13 | Acknowledgments | 19 | |||
7.14 | Releases | 19 | |||
7.15 | WAIVER OF JURY TRIAL | 19 | |||
SCHEDULE 1 | Description of Pledged Equity Interests and Issuer Subsidiary Interests | 1-1 | |||
SCHEDULE 2 | Filings and Other Actions Required to Perfect Security Interests | 2-1 | |||
SCHEDULE 3 | Exact Legal Name, Location of Jurisdiction of Organization, | ||||
Chief Executive Office and Notice Address | 3-1 | ||||
EXHIBIT A | Form of Uncertificated Securities Control Agreement | A-1 |
If to Secured Party: | HCP, Inc. |
1920 Main Street, Suite 1200 | |
Irvine, California 92614 | |
Attention: Senior Vice President, Asset Management | |
Facsimile: (949) 407-0800 | |
Email: shnotices@hcpi.com |
PLEDGOR: | |
HCP DR CALIFORNIA III, LLC, | |
a Delaware limited liability company | |
By: | |
Name: Adam G. Mabry | |
Title: Senior Vice President | |
SECURED PARTY: | |
HCP, INC., | |
a Maryland corporation | |
By: | |
Name: Adam G. Mabry | |
Title: Senior Vice President | |
Pledgor | Issuer | Certificated (Y/N) | Certificate No. (if any) | No. of Pledged Units | % of Outstanding LLC Interests of the Issuer | |||||
HCP DR California III, LLC | WPG Fair Oaks Senior Living LLC | N | N/A | 100 | 100% | |||||
HCP DR California III, LLC | WPG Mariner Point Senior Living LLC | N | N/A | 100 | 100% | |||||
HCP DR California III, LLC | WPG Whittier Senior Living LLC | N | N/A | 100 | 100% |
Issuer | Issuer Subsidiary | Certificated (Y/N) | Certificate No. (if any) | No. of Owned Units | % of Outstanding LLC Interests of the Issuer Subsidiary |
WPG Fair Oaks Senior Living LLC | Oakmont of Fair Oaks LLC | N | N/A | 100 | 100% |
WPG Mariner Point Senior Living LLC | Mariner Point Special SPE LLC | N | N/A | 100 | 100% |
WPG Mariner Point Senior Living LLC | Oakmont of Mariner Point LLC | N | N/A | 99 | 99% |
Mariner Point Special SPE LLC | Oakmont of Mariner Point LLC | N | N/A | 1 | 1% |
WPG Whittier Senior Living LLC | Oakmont of Fair Oaks LLC | N | N/A | 100 | 100% |
Exact Legal Name | Jurisdiction of Organization | Chief Executive Office or Sole Place of Business and Notice Address | Notice Address |
HCP DR California III, LLC | Delaware | 1920 Main Street, Suite 1200, Irvine, California 92614 | HCP DR California III, LLC 1920 Main Street, Suite 1200 Irvine, California 92614 Attention: Senior Vice President, Asset Management Facsimile: (949) 407-0800 Email: shnotices@hcpi.com |
If to any Issuer: | c/o HCP DR California III, LLC |
PLEDGOR: | |||
HCP DR CALIFORNIA III, LLC, | |||
a Delaware limited liability company | |||
By: | |||
Name: | |||
Title: |
SECURED PARTY: | |||
HCP, INC., | |||
a Maryland corporation | |||
By: | |||
Name: | |||
Title: |
ISSUERS: | |||
WPG FAIR OAKS SENIOR LIVING LLC, | |||
a California limited liability company | |||
By: | |||
Name: | |||
Title: | |||
WPG MARINER POINT SENIOR LIVING | |||
LLC, a California limited liability company | |||
By: | |||
Name: | |||
Title: | |||
WPG WHITTIER SENIOR LIVING LLC, a | |||
California limited liability company | |||
By: | |||
Name: | |||
Title: |
1. | Jeffrey L. Breithaupt |
2. | Crystal Dillard |
3. | Keith E. Fitzsimons |
4. | Molly Renee Gallaher Flater |
5. | William P. Gallaher |
6. | William K. Gallaher |
7. | Ken Garrett |
8. | Christian M. Holland |
9. | David Hunter |
10. | Christine A. Kasulka |
11. | Ken Kidd |
12. | Joseph G. Lin |
13. | William R. Mabry III |
14. | Stephen B. McCullagh |
15. | Komron Shahhosseini |
16. | Courtney Siegel |
17. | Malcolm Taylor |
1. | That certain loan in the amount of $31,496,000.00, made by Greystone Servicing Corporation, Inc., a Georgia corporation (as the same may have been assigned), to Oakmont of Fair Oaks LLC, a California limited liability company. |
2. | That certain loan in the amount of $18,750,000.00, made by Greystone Servicing Corporation, Inc., a Georgia corporation (as the same may have been assigned), to Oakmont of Mariner Point LLC, a California limited liability company. |
4 | ||
Date: August 1, 2019 | /s/ THOMAS M. HERZOG | |
Thomas M. Herzog | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
4 | ||
Date: August 1, 2019 | /s/ PETER A. SCOTT | |
Peter A. Scott | ||
Executive Vice President and | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
Date: August 1, 2019 | /s/ THOMAS M. HERZOG |
Thomas M. Herzog | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
Date: August 1, 2019 | /s/ PETER A. SCOTT |
Peter A. Scott | |
Executive Vice President and | |
Chief Financial Officer | |
(Principal Financial Officer) |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Balance Sheet Parenthetical Disclosures | ||
Accounts receivable, allowance (in dollars) | $ 6,899 | $ 5,127 |
Common stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 491,108,584 | 477,496,499 |
Common stock, shares outstanding (in shares) | 491,108,584 | 477,496,499 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenues: | ||||
Rental and related revenues | $ 301,197 | $ 317,840 | $ 595,419 | $ 634,592 |
Resident fees and services | 177,766 | 136,774 | 304,461 | 279,588 |
Income from direct financing leases | 10,190 | 13,490 | 23,714 | 26,756 |
Interest income | 2,414 | 1,447 | 4,127 | 7,812 |
Total revenues | 491,567 | 469,551 | 927,721 | 948,748 |
Costs and expenses: | ||||
Interest expense | 56,942 | 73,038 | 106,269 | 148,140 |
Depreciation and amortization | 165,296 | 143,292 | 297,247 | 286,542 |
Operating | 213,993 | 173,866 | 382,920 | 346,418 |
General and administrative | 27,120 | 22,514 | 48,475 | 51,689 |
Transaction costs | 1,337 | 2,404 | 5,855 | 4,599 |
Impairments (recoveries), net | 68,538 | 13,912 | 77,396 | 13,912 |
Total costs and expenses | 533,226 | 429,026 | 918,162 | 851,300 |
Other income (expense): | ||||
Gain (loss) on sales of real estate, net | 11,448 | 46,064 | 19,492 | 66,879 |
Loss on debt extinguishments | (1,135) | 0 | (1,135) | 0 |
Other income (expense), net | 21,008 | 1,786 | 24,141 | (38,621) |
Total other income (expense), net | 31,321 | 47,850 | 42,498 | 28,258 |
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures | (10,338) | 88,375 | 52,057 | 125,706 |
Income tax benefit (expense) | 1,864 | 4,654 | 5,322 | 9,990 |
Equity income (loss) from unconsolidated joint ventures | (1,506) | (101) | (2,369) | 469 |
Net income (loss) | (9,980) | 92,928 | 55,010 | 136,165 |
Noncontrolling interests' share in earnings | (3,617) | (2,986) | (7,137) | (5,991) |
Net income (loss) attributable to HCP, Inc. | (13,597) | 89,942 | 47,873 | 130,174 |
Participating securities' share in earnings | (394) | (461) | (837) | (852) |
Net income (loss) applicable to common shares | $ (13,991) | $ 89,481 | $ 47,036 | $ 129,322 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ (0.03) | $ 0.19 | $ 0.10 | $ 0.28 |
Diluted (in dollars per share) | $ (0.03) | $ 0.19 | $ 0.10 | $ 0.28 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 478,739 | 469,769 | 478,260 | 469,664 |
Diluted (in shares) | 478,739 | 469,941 | 479,885 | 469,799 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (9,980) | $ 92,928 | $ 55,010 | $ 136,165 |
Other comprehensive income (loss): | ||||
Net unrealized gains (losses) on derivatives | 101 | 195 | ||
Net unrealized gains (losses) on derivatives | 10,793 | 5,629 | ||
Change in Supplemental Executive Retirement Plan obligation and other | 68 | 78 | 137 | 182 |
Foreign currency translation adjustment | (745) | (11,327) | (83) | (3,675) |
Reclassification adjustment realized in net income (loss) | 0 | 17,683 | 0 | 17,808 |
Total other comprehensive income (loss) | (576) | 17,227 | 249 | 19,944 |
Total comprehensive income (loss) | (10,556) | 110,155 | 55,259 | 156,109 |
Total comprehensive income (loss) attributable to noncontrolling interests | (3,617) | (2,986) | (7,137) | (5,991) |
Total comprehensive income (loss) attributable to HCP, Inc. | $ (14,173) | $ 107,169 | $ 48,122 | $ 150,118 |
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands |
Total |
Common Stock |
Additional Paid-In Capital |
Cumulative Dividends In Excess Of Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total Stockholders’ Equity |
Total Noncontrolling Interests |
|||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Cumulative effect of new accounting principle | [1] | $ 79,144 | $ 79,144 | $ 79,144 | ||||||||
Adjusted balance, January 1 | 5,674,082 | $ 469,436 | $ 8,226,113 | (3,291,376) | $ (24,024) | 5,380,149 | $ 293,933 | |||||
Balance at Dec. 31, 2017 | 5,594,938 | $ 469,436 | 8,226,113 | (3,370,520) | (24,024) | 5,301,005 | 293,933 | |||||
Balance (in shares) at Dec. 31, 2017 | 469,436 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income (loss) | 136,165 | 130,174 | 130,174 | 5,991 | ||||||||
Other comprehensive income (loss) | 19,944 | 19,944 | 19,944 | |||||||||
Issuance of common stock, net | 3,433 | $ 511 | 2,922 | 3,433 | ||||||||
Issuance of common stock, net (in shares) | 511 | |||||||||||
Repurchase of common stock | (2,778) | $ (117) | (2,661) | (2,778) | ||||||||
Repurchase of common stock (in shares) | (117) | |||||||||||
Amortization of deferred compensation | 10,218 | 10,218 | 10,218 | |||||||||
Common dividends (usd per share) | (348,439) | (348,439) | (348,439) | |||||||||
Distributions to noncontrolling interests | (9,466) | 0 | (9,466) | |||||||||
Issuances of noncontrolling interests | 995 | 995 | ||||||||||
Purchase of noncontrolling interests | (67,431) | (49,207) | (49,207) | (18,224) | ||||||||
Balance at Jun. 30, 2018 | 5,416,723 | $ 469,830 | 8,187,385 | (3,509,641) | (4,080) | 5,143,494 | 273,229 | |||||
Balance (in shares) at Jun. 30, 2018 | 469,830 | |||||||||||
Balance at Dec. 31, 2017 | 5,594,938 | $ 469,436 | 8,226,113 | (3,370,520) | (24,024) | 5,301,005 | 293,933 | |||||
Balance (in shares) at Dec. 31, 2017 | 469,436 | |||||||||||
Balance at Dec. 31, 2018 | 6,512,591 | $ 477,496 | 8,398,847 | (2,927,196) | (4,708) | 5,944,439 | 568,152 | |||||
Balance (in shares) at Dec. 31, 2018 | 477,496 | |||||||||||
Balance at Mar. 31, 2018 | 5,480,923 | $ 469,725 | 8,183,166 | (3,425,293) | (21,307) | 5,206,291 | 274,632 | |||||
Balance (in shares) at Mar. 31, 2018 | 469,725 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income (loss) | 92,928 | 89,942 | 89,942 | 2,986 | ||||||||
Other comprehensive income (loss) | 17,227 | 17,227 | 17,227 | |||||||||
Issuance of common stock, net | 659 | $ 129 | 530 | 659 | ||||||||
Issuance of common stock, net (in shares) | 129 | |||||||||||
Repurchase of common stock | (634) | $ (24) | (610) | (634) | ||||||||
Repurchase of common stock (in shares) | (24) | |||||||||||
Amortization of deferred compensation | 4,299 | 4,299 | 4,299 | |||||||||
Common dividends (usd per share) | (174,290) | (174,290) | (174,290) | |||||||||
Distributions to noncontrolling interests | (4,389) | 0 | (4,389) | |||||||||
Balance at Jun. 30, 2018 | 5,416,723 | $ 469,830 | 8,187,385 | (3,509,641) | (4,080) | 5,143,494 | 273,229 | |||||
Balance (in shares) at Jun. 30, 2018 | 469,830 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Cumulative effect of new accounting principle | [2] | 590 | 590 | 590 | ||||||||
Adjusted balance, January 1 | 6,513,181 | $ 477,496 | 8,398,847 | (2,926,606) | (4,708) | 5,945,029 | 568,152 | |||||
Balance at Dec. 31, 2018 | 6,512,591 | $ 477,496 | 8,398,847 | (2,927,196) | (4,708) | 5,944,439 | 568,152 | |||||
Balance (in shares) at Dec. 31, 2018 | 477,496 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income (loss) | 55,010 | 47,873 | 47,873 | 7,137 | ||||||||
Other comprehensive income (loss) | 249 | 249 | 249 | |||||||||
Issuance of common stock, net | 406,813 | $ 13,569 | 393,244 | 406,813 | ||||||||
Issuance of common stock, net (in shares) | 13,569 | |||||||||||
Conversion of DownREIT units to common stock | 0 | $ 184 | 3,890 | 4,074 | (4,074) | |||||||
Conversion of DownREIT units to common stock (in shares) | 184 | |||||||||||
Repurchase of common stock | (4,582) | $ (149) | (4,433) | (4,582) | ||||||||
Repurchase of common stock (in shares) | (149) | |||||||||||
Exercise of stock options | 219 | $ 9 | 210 | 219 | ||||||||
Exercise of stock options (in shares) | 9 | |||||||||||
Amortization of deferred compensation | 10,358 | 10,358 | 10,358 | |||||||||
Common dividends (usd per share) | (354,550) | (354,550) | (354,550) | |||||||||
Distributions to noncontrolling interests | (9,823) | (9,823) | ||||||||||
Issuances of noncontrolling interests | 3,615 | 3,615 | ||||||||||
Purchase of noncontrolling interests | (1,218) | (1,079) | (1,079) | (139) | ||||||||
Balance at Jun. 30, 2019 | 6,619,272 | $ 491,109 | 8,801,037 | (3,233,283) | (4,459) | 6,054,404 | 564,868 | |||||
Balance (in shares) at Jun. 30, 2019 | 491,109 | |||||||||||
Balance at Mar. 31, 2019 | 6,399,065 | $ 477,929 | 8,405,258 | (3,042,422) | (3,883) | 5,836,882 | 562,183 | |||||
Balance (in shares) at Mar. 31, 2019 | 477,929 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income (loss) | (9,980) | (13,597) | (13,597) | 3,617 | ||||||||
Other comprehensive income (loss) | (576) | (576) | (576) | |||||||||
Issuance of common stock, net | 405,281 | $ 13,227 | 392,054 | 405,281 | ||||||||
Issuance of common stock, net (in shares) | 13,227 | |||||||||||
Repurchase of common stock | (1,663) | $ (54) | (1,609) | (1,663) | ||||||||
Repurchase of common stock (in shares) | (54) | |||||||||||
Exercise of stock options | 173 | $ 7 | 166 | 173 | ||||||||
Exercise of stock options (in shares) | 7 | |||||||||||
Amortization of deferred compensation | 6,247 | 6,247 | 6,247 | |||||||||
Common dividends (usd per share) | (177,264) | (177,264) | (177,264) | |||||||||
Distributions to noncontrolling interests | (4,408) | 0 | (4,408) | |||||||||
Issuances of noncontrolling interests | 3,615 | 3,615 | ||||||||||
Purchase of noncontrolling interests | (1,218) | (1,079) | (1,079) | (139) | ||||||||
Balance at Jun. 30, 2019 | $ 6,619,272 | $ 491,109 | $ 8,801,037 | $ (3,233,283) | $ (4,459) | $ 6,054,404 | $ 564,868 | |||||
Balance (in shares) at Jun. 30, 2019 | 491,109 | |||||||||||
|
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Common dividends, per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 0.74 | $ 0.74 |
Business |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Overview HCP, Inc., a Standard & Poor’s 500 company, is a Maryland corporation that is organized to qualify as a real estate investment trust (“REIT”) which, together with its consolidated entities (collectively, “HCP” or the “Company”), invests primarily in real estate serving the healthcare industry in the United States (“U.S.”). The Company acquires, develops, leases, owns, and manages healthcare real estate. The Company’s diverse portfolio is comprised of investments in the following reportable healthcare segments: (i) senior housing triple-net; (ii) senior housing operating portfolio (“SHOP”); (iii) life science; and (iv) medical office.
|
Summary of Significant Accounting Policies |
6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management’s estimates. The consolidated financial statements include the accounts of HCP, Inc., its wholly-owned subsidiaries, joint ventures (“JVs”) and variable interest entities (“VIEs”) that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. All adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The accompanying unaudited interim financial information should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”). Recent Accounting Pronouncements Adopted Revenue Recognition. Between May 2014 and February 2017, the Financial Accounting Standards Board (“FASB”) issued four ASUs changing the requirements for recognizing and reporting revenue (together, herein referred to as the “Revenue ASUs”): (i) ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), (ii) ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), (iii) ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), and (iv) ASU No. 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”). ASU 2014-09 provides guidance for revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2016-08 is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. ASU 2016-12 provides practical expedients and improvements on the previously narrow scope of ASU 2014-09. ASU 2017-05 clarifies the scope of the FASB’s guidance on nonfinancial asset derecognition and aligns the accounting for partial sales of nonfinancial assets and in-substance nonfinancial assets with the guidance in ASU 2014-09. The Company adopted the Revenue ASUs effective January 1, 2018 and utilized a modified retrospective adoption approach, resulting in a cumulative-effect adjustment to equity of $79 million as of January 1, 2018. Under the Revenue ASUs, the Company also elected to utilize a practical expedient which allows the Company to only reassess contracts that were not completed as of the adoption date, rather than all historical contracts. As the timing and recognition of the majority of the Company’s revenue is the same whether accounted for under the Revenue ASUs or lease accounting guidance (see discussion below), the impact of the Revenue ASUs, upon and subsequent to adoption, is generally limited to the following:
Leases. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 (codified under Accounting Standards Codification (“ASC”) 842, Leases) amends the previous accounting for leases to: (i) require lessees to put most leases on their balance sheets (not required for short-term leases with lease terms of 12 months or less), but continue recognizing expenses on their income statements in a manner similar to requirements under prior accounting guidance, (ii) eliminate real estate specific lease provisions, and (iii) modify the classification criteria and accounting for sales-type leases for lessors. Additionally, ASU 2016-02 provides a practical expedient, which the Company elected, that allows an entity to not reassess the following upon adoption (must be elected as a group): (i) whether an expired or existing contract contains a lease arrangement, (ii) lease classification related to expired or existing lease arrangements, or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs. As a result of adopting ASU 2016-02 on January 1, 2019 using the modified retrospective transition approach, the Company recognized a cumulative-effect adjustment to equity of $1 million as of January 1, 2019. Under ASU 2016-02, the Company began capitalizing fewer costs related to the drafting and negotiation of its lease agreements. Additionally, the Company began recognizing all of its significant operating leases for which it is the lessee, including corporate office leases, equipment leases, and ground leases, on its consolidated balance sheets as a lease liability and corresponding right-of-use asset. As such, the Company recognized a lease liability of $153 million and right-of-use asset of $166 million on January 1, 2019. The aggregate lease liability is calculated as the present value of minimum lease payments, discounted using a rate that approximates the Company’s secured incremental borrowing rate, adjusted for the noncancelable term of each lease. The right-of-use asset is calculated as the aggregate lease liability, adjusted for the existing accrued straight-line rent liability balance of $20 million and net unamortized above/below market ground lease intangible assets of $33 million. Under ASU 2016-02, a practical expedient was offered to lessees to make a policy election, which the Company elected, to not separate lease and nonlease components, but rather account for the combined components as a single lease component under ASC 842. In July 2018, the FASB issued ASU No. 2018-11, Leases - Targeted Improvements (“ASU 2018-11”), which provides lessors with a similar option to elect a practical expedient allowing them to not separate lease and nonlease components in a contract for the purpose of revenue recognition and disclosure. This practical expedient is limited to circumstances in which: (i) the timing and pattern of transfer are the same for the nonlease component and the related lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. This practical expedient causes an entity to assess whether a contract is predominantly lease or service based and recognize the entire contract under the relevant accounting guidance (i.e., predominantly lease-based would be accounted for under ASU 2016-02 and predominantly service-based would be accounted for under the Revenue ASUs). The Company elected this practical expedient as well and, as a result, beginning January 1, 2019, the Company recognizes revenue from its senior housing triple-net, medical office, and life science segments under ASC 842 and revenue from its SHOP segment under the Revenue ASUs (codified under ASC 606, Revenue from Contracts with Customers). In conjunction with reaching the conclusions above, the Company concluded it was appropriate (under ASC 205, Presentation of Financial Statements) to reclassify amounts previously classified as revenue from tenant recoveries (within the senior housing triple-net, life science, and medical office segments) and present them combined with rental and related revenues within the consolidated statements of operations. The Company implemented this change during the fourth quarter of 2018. Included within rental and related revenues for the three and six months ended June 30, 2018 is $39 million and $76 million, respectively, of tenant recoveries. In December 2018, the FASB issued ASU No. 2018-20, Narrow Scope Improvements for Lessors (“ASU 2018-20”), which requires that a lessor: (i) exclude certain lessor costs paid directly by a lessee to third parties on behalf of the lessor from a lessor's measurement of variable lease revenue and associated expense (i.e., no gross up of revenue and expense for these costs) and (ii) include lessor costs that are paid by the lessor and reimbursed by the lessee in the measurement of variable lease revenue and the associated expense (i.e., gross up revenue and expense for these costs). This is consistent with the Company’s historical presentation and did not require a material change on January 1, 2019. Other. Effective January 1, 2019, the Company adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The amendments in ASU 2017-12 expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. For cash flow and net investment hedges existing at the date of adoption, the Company adopted the amendments in ASU 2017-12 using the modified retrospective approach. For amendments impacting presentation and disclosure, the Company adopted ASU 2017-12 using a prospective approach. The adoption of ASU 2017-12 did not have a material impact to the Company’s consolidated financial position, results of operations, cash flows, or disclosures upon adoption. Not Yet Adopted Credit Losses. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments held by financial institutions and other organizations. The amendments in ASU 2016-13 eliminate the “probable” initial threshold for recognition of credit losses in current accounting guidance and, instead, reflect an entity’s current estimate of all expected credit losses over the life of the financial instrument. Previously, when credit losses were measured under current accounting guidance, an entity generally only considered past events and current conditions in measuring the incurred loss. The amendments in ASU 2016-13 broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss. ASU 2016-13 is effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. A reporting entity is required to apply the amendments in ASU 2016-13 using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. Upon adoption of ASU 2016-13, the Company is required to reassess its financing receivables, including direct financing leases (“DFLs”) and loans receivable, and expects that application of ASU 2016-13 may result in the Company recognizing credit losses at an earlier date than would otherwise be recognized under current accounting guidance. The Company is evaluating the impact of the adoption of ASU 2016-13 on January 1, 2020 to its consolidated financial position and results of operations. Segment Reporting The Company’s reportable segments, based on how it evaluates its business and allocates resources, are as follows: (i) senior housing triple-net, (ii) SHOP, (iii) life science, and (iv) medical office. During the first quarter of 2019, as a result of a change in how operating results are reported to the Company's chief operating decision makers for the purpose of evaluating performance and allocating resources, two facilities were reclassified from other non-reportable segments to the medical office segment. Accordingly, all prior period segment information has been recast to conform to the current period presentation.
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Real Estate Transactions |
6 Months Ended | ||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||
Real Estate Transactions | Real Estate Transactions 2019 Real Estate Investments Cambridge Acquisition During the first quarter of 2019, the Company acquired a life science facility for $71 million and development rights at an adjacent undeveloped land parcel for consideration of up to $27 million. The existing facility and land parcel are located in Cambridge, Massachusetts. Discovery Portfolio Acquisition In April 2019, the Company acquired a portfolio of nine senior housing properties for $445 million. The properties are located across Florida, Georgia and Texas and are operated by Discovery Senior Living, LLC. Oakmont Portfolio Acquisitions In May 2019, the Company acquired three senior housing communities for $113 million and in July 2019, the Company acquired an additional five senior housing communities for $284 million. Both portfolios were acquired from and will continue to be operated by Oakmont Senior Living LLC (“Oakmont”). Each portfolio was contributed to a DownREIT joint venture in which the sellers received non-controlling interests in lieu of cash for a portion of the sales price. The Company, as the managing member, consolidates each DownREIT joint venture. As part of the Oakmont transactions, the Company assumed $50 million of debt in May 2019 and an additional $112 million of debt in July 2019, both of which were recorded at their relative fair values through asset acquisition accounting. Sierra Point Towers Acquisition In June 2019, the Company completed the previously announced acquisition of two life science buildings in South San Francisco, California adjacent to the Company’s The Shore at Sierra Point development, for $245 million. Senior Housing JV Interest Purchase (Vintage Park JV) In June 2019, the Company acquired the outstanding equity interests of a senior housing joint venture structure (which owned one senior housing facility), in which the Company previously held an unconsolidated equity investment, for $24 million. Subsequent to acquisition, the Company owned 100% of the equity. As the Company began consolidating the facility upon acquisition, it derecognized the existing investment in the joint venture structure, marked the real estate to fair value (using a relative fair value allocation), and recognized a gain on consolidation of $12 million, net of a tax impact of $1 million. The gain on consolidation is recognized within other income (expense), net and the tax impact is recognized within income tax benefit (expense). Other During the six months ended June 30, 2019, the Company acquired one medical office building (“MOB”) in Kansas for $15 million. In July 2019, the Company acquired a $16 million life science building in the Sorrento Mesa submarket of San Diego. The property is located on the Company’s Directors Place life science campus and is adjacent to its future development site. Hartwell Innovation Campus Acquisition In July 2019, the Company acquired a life science campus in the suburban Boston submarket of Lexington, Massachusetts, for $228 million. The campus is comprised of four buildings. 2018 Real Estate Investments MSREI MOB JV In August 2018, the Company and Morgan Stanley Real Estate Investment (“MSREI”) formed a joint venture (the “MSREI JV”) to own a portfolio of MOBs for which the Company is a 51% owner and consolidates. To form the joint venture, MSREI contributed cash of $298 million and HCP contributed nine wholly-owned MOBs (the “Contributed Assets”). The Contributed Assets are primarily located in Texas and Florida and were valued at approximately $320 million at the time of contribution. The MSREI JV used substantially all of the cash contributed by MSREI to acquire an additional portfolio of 16 MOBs in Greenville, South Carolina (the “Greenville Portfolio”) for $285 million. Concurrent with acquiring the additional MOBs, the MSREI JV entered into 10-year leases with the anchor tenants in the Greenville Portfolio. The Contributed Assets are accounted for at historical depreciated cost by the Company, as the assets continue to be consolidated. The Greenville Portfolio was accounted for as an asset acquisition, which required the Company to record the individual components of the acquisition at their relative fair values. As a result, the Company recorded net real estate of $276 million and net intangible assets of $20 million during the three months ended September 30, 2018 related to the Greenville Portfolio. Additionally, during the three months ended September 30, 2018, the Company recognized a noncontrolling interest of $298 million related to the interest owned by MSREI. Refer to Note 14 for a discussion of the Company’s consolidation of the MSREI JV. Life Science JV Interest Purchase In November 2018, the Company acquired the outstanding equity interests in three life science joint ventures (which owned four buildings) for $92 million, bringing the Company’s equity ownership to 100% for all three joint ventures. As the Company began consolidating the assets upon acquisition, it derecognized the existing investment in the joint ventures, marked the real estate to fair value (using a relative fair value allocation), and recognized a gain on consolidation of $50 million within other income (expense), net. Other During the six months ended June 30, 2018, the Company acquired development rights on a land parcel in the Boston suburb of Lexington, Massachusetts for $21 million. The Company commenced a life science development on the land in 2018. Development Activities As part of the development program with HCA Healthcare, during the second quarter of 2019, the Company commenced development on three additional MOBs, two of which will be on-campus. The Company’s commitments related to development and redevelopment projects increased by $82 million, to $382 million at June 30, 2019, when compared to December 31, 2018, primarily as a result of additional development and redevelopment projects. Held for Sale At June 30, 2019, 2 senior housing triple-net facilities, 6 MOBs, and 20 SHOP facilities were classified as held for sale, with an aggregate carrying value of $161 million, primarily comprised of real estate assets of $157 million, net of accumulated depreciation of $87 million. Liabilities of assets held for sale was primarily comprised of mortgage debt, intangible liabilities, and other liabilities at June 30, 2019. At December 31, 2018, nine SHOP facilities and one undeveloped life science land parcel were classified as held for sale, with an aggregate carrying value of $108 million, primarily comprised of real estate assets of $101 million, net of accumulated depreciation of $30 million. Liabilities of assets held for sale was primarily comprised of intangible liabilities and other liabilities at December 31, 2018. 2019 Dispositions of Real Estate During the quarter ended March 31, 2019, the Company sold nine SHOP assets for $68 million, two senior housing triple-net assets for $26 million, and one undeveloped life science land parcel for $35 million, resulting in total gain on sales of $8 million. During the quarter ended June 30, 2019, the Company sold one SHOP asset for $14 million, five MOBs for $15 million, and one life science asset for $7 million, resulting in total gain on sales of $11 million. 2018 Dispositions of Real Estate Shoreline Technology Center In November 2018, the Company sold its Shoreline Technology Center life science campus located in Mountain View, California for $1.0 billion and recognized a gain on sale of $726 million. RIDEA II Sale Transaction In January 2017, the Company completed the contribution of its ownership interest in RIDEA II to an unconsolidated joint venture owned by HCP and an investor group led by Columbia Pacific Advisors, LLC (“CPA”) (the “HCP/CPA JV”). Also in January 2017, RIDEA II was recapitalized with $602 million of debt, of which $360 million was provided by a third-party and $242 million was provided by HCP. In return for both transaction elements, the Company received combined proceeds of $480 million from the HCP/CPA JV and $242 million in loans receivable and retained an approximately 40% ownership interest in RIDEA II. This transaction resulted in the Company deconsolidating the net assets of RIDEA II and recognizing a net gain on sale of $99 million. Refer to Note 2 for the impact of adopting the Revenue ASUs on January 1, 2018 to the Company’s partial sale of RIDEA II in the first quarter of 2017. In June 2018, the Company sold its remaining 40% ownership interest in RIDEA II to an investor group led by CPA for $91 million. Additionally, CPA refinanced the Company’s $242 million of loans receivable from RIDEA II, resulting in total proceeds of $332 million. The Company no longer holds an economic interest in RIDEA II. U.K. Portfolio In June 2018, the Company entered into a joint venture with an institutional investor (the “U.K. JV”) through which the Company sold a 51% interest in substantially all United Kingdom (“U.K.”) assets previously owned by the Company (the “U.K. Portfolio”) based on a total value of £382 million ($507 million). The Company retained a 49% noncontrolling interest in the joint venture and received gross proceeds of $402 million, including proceeds from the refinancing of the Company’s previously held intercompany loans. Upon closing the U.K. JV, the Company deconsolidated the U.K. Portfolio, recognized its retained noncontrolling interest investment at fair value ($105 million) and recognized a gain on sale of $11 million, net of $17 million of cumulative foreign currency translation reclassified from other comprehensive income. The U.K. JV provides numerous mechanisms by which the joint venture partner can acquire the Company’s remaining interest in the U.K. JV. The fair value of the Company’s retained noncontrolling interest investment was based on Level 2 measurements within the fair value hierarchy. Additionally, in August 2018, the Company sold its remaining £11 million U.K. development loan at par. Other During the quarter ended March 31, 2018, the Company sold two SHOP assets for $35 million, resulting in total gain on sales of $21 million. During the quarter ended June 30, 2018, the Company sold eight SHOP assets for $268 million and two senior housing triple-net assets for $35 million, resulting in total gain on sales of $25 million. During the quarter ended September 30, 2018, the Company sold 4 life science assets for $269 million, 11 SHOP assets for $76 million and 2 MOBs for $21 million, resulting in total gain on sales of $95 million. During the quarter ended December 31, 2018, the Company sold two SHOP facilities for $15 million, two MOBs for $4 million, and one undeveloped land parcel for $3 million, resulting in no material gain or loss on sales. Additionally, during 2018, the Company sold 19 senior housing assets to a third-party buyer for $377 million, resulting in a gain on sale of $40 million. Impairments of Real Estate 2019 During the second quarter of 2019, the Company recognized an aggregate impairment charge of $59 million in conjunction with classifying 2 senior housing triple-net assets, 14 SHOP assets, and 1 MOB as held for sale and writing their aggregate carrying value of $164 million down to their aggregate fair value less estimated costs to sell of $105 million. During the first quarter of 2019, the Company determined the carrying value of two MOBs that were candidates for potential future sale was no longer recoverable due to the Company’s shortened intended hold period under the held-for-use impairment model. Accordingly, the Company wrote-down the carrying amount of these two assets to their respective fair value, which resulted in an aggregate impairment charge of $9 million. The fair value of the impaired assets was based on forecasted sales prices, which are considered to be Level 3 measurements within the fair value hierarchy. Forecasted sales prices were determined using a direct capitalization model or a market approach (comparable sales model), which rely on certain assumptions by management, including: (i) property hold periods, (ii) market capitalization rates, (iii) market prices per unit, and (iv) forecasted cash flow streams (lease revenue rates, expense rates, growth rates, etc.). There are inherent uncertainties in making these assumptions. For the Company’s impairment calculations during the six months ended June 30, 2019, the Company used a range of (i) market capitalization rates ranging from 4.97% to 6.64%, with a weighted average rate of 5.41%, and (ii) prices per unit ranging from $52,000 to $90,000, with a weighted average price of $62,000. Additionally, during the second quarter of 2019, the Company recognized a $6 million casualty-related gain, net of a $0.3 million deferred tax expense, as a result of insurance proceeds received for property damage and other associated costs related to hurricanes in 2017. The gain is recorded in other income (expense). 2018 During the second quarter of 2018, in conjunction with classifying two underperforming SHOP portfolios (13 assets total) and an undeveloped life science land parcel as held for sale, the Company concluded the assets were impaired and wrote-down the carrying value of the assets to their fair value less estimated costs to sell. Accordingly, the Company recognized a $14 million impairment charge during the second quarter of 2018. The fair value of the assets was based on contractual sales prices, which are considered to be Level 2 measurements within the fair value hierarchy. Brookdale MTCA Transactions In November 2017, the Company and Brookdale Senior Living, Inc. (“Brookdale”) entered into a Master Transactions and Cooperation Agreement (the “MTCA”) to provide the Company with the ability to significantly reduce its concentration of assets leased to and/or managed by Brookdale (the “Brookdale Transactions”). In connection with the overall transaction pursuant to the MTCA, the Company and Brookdale, and certain of their respective subsidiaries, agreed to the following:
Additionally, during 2018, the Company terminated the previous management agreements or leases with Brookdale on 37 assets contemplated under the MTCA and completed the transition of 20 SHOP assets and 17 senior housing triple-net assets to other managers.
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Leases | Leases Lease Income The following table summarizes the Company’s lease income (dollars in thousands):
Direct Financing Leases Net investment in DFLs consists of the following (dollars in thousands):
Direct Financing Lease Internal Ratings The following table summarizes the Company’s internal ratings for DFLs at June 30, 2019 (dollars in thousands):
Direct Financing Lease Conversion During the first quarter of 2019, the Company converted a DFL portfolio of 14 senior housing triple-net properties, previously on “Watch List” status, to a RIDEA structure, requiring the Company to recognize net assets equal to the lower of the net assets’ fair value or the carrying value of the net investment in the DFL. As a result, the Company derecognized the $351 million carrying value of the net investment in DFL related to the 14 properties and recognized a combination of net real estate ($331 million) and net intangibles assets ($20 million) for the same aggregate amount, with no gain or loss recognized. As a result of the transaction, the 14 properties were transitioned from the senior housing triple-net segment to the SHOP segment during the first quarter of 2019. Pending Direct Financing Lease Sale During the second quarter of 2019, the Company entered into agreements to sell 13 senior housing facilities under DFLs (the “DFL Sale Portfolio”) for $274 million. Upon entering into the agreements, the Company recognized an allowance for DFL losses and related impairment charge of $10 million to write-down the carrying value of the DFL Sale Portfolio to its fair value. The fair value of the DFL Sale Portfolio is based upon the agreed upon sale price, less estimated costs to sell, which is considered to be a Level 2 measurement within the fair value hierarchy. No previous allowances have been recognized related to the DFL Sale Portfolio. The following table summarizes the activity of the DFL Sale Portfolio during the periods presented (dollars in thousands):
In conjunction with the entering into agreements to sell the DFL Sale Portfolio, the Company placed the portfolio on nonaccrual status and will begin recognizing income equal to the amount of cash received. Direct Financing Lease Receivable Maturities The following table summarizes future minimum lease payments contractually due under DFLs at June 30, 2019 (in thousands):
The following table summarizes future minimum lease payments contractually due under DFLs at December 31, 2018 (in thousands):
Residual Value Risk Quarterly, the Company reviews the estimated unguaranteed residual value of assets under DFLs to determine if there have been any material changes compared to the prior quarter. As needed, the Company and/or the related tenants will invest necessary funds to maintain the residual value of each asset. Operating Leases Future Minimum Rents The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under non-cancelable operating leases as of June 30, 2019 (in thousands):
The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under non-cancelable operating leases as of December 31, 2018 (in thousands):
Lease Costs The following tables provide information regarding the Company’s leases to which it is the lessee, such as corporate offices and ground leases (dollars in thousands):
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The following table summarizes future minimum lease payments under non-cancelable ground and other operating leases included in the Company’s lease liability as of June 30, 2019 (in thousands):
The following table summarizes future minimum lease obligations under non-cancelable ground and other operating leases as of December 31, 2018 (in thousands):
Depreciation Expense While the Company leases the majority of its property, plant, and equipment to various tenants under operating leases and DFLs, in certain situations, the Company owns and operates certain property, plant, and equipment for general corporate purposes. Corporate assets are recorded within other assets, net within the Company’s consolidated balance sheets and depreciation expense for those assets is recorded in general and administrative expenses in the Company’s consolidated statements of operations. Included within other assets, net as of both June 30, 2019 and December 31, 2018 is $3 million and $2 million, respectively, of accumulated depreciation related to corporate assets. Included within general and administrative expenses for the three months ended June 30, 2019 and 2018 is $0.4 million and $0.2 million, respectively, of depreciation expense related to corporate assets. Included within general and administrative expenses for the six months ended June 30, 2019 and 2018 is $0.9 million and $0.4 million, respectively, of depreciation expense related to corporate assets.
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Leases | Leases Lease Income The following table summarizes the Company’s lease income (dollars in thousands):
Direct Financing Leases Net investment in DFLs consists of the following (dollars in thousands):
Direct Financing Lease Internal Ratings The following table summarizes the Company’s internal ratings for DFLs at June 30, 2019 (dollars in thousands):
Direct Financing Lease Conversion During the first quarter of 2019, the Company converted a DFL portfolio of 14 senior housing triple-net properties, previously on “Watch List” status, to a RIDEA structure, requiring the Company to recognize net assets equal to the lower of the net assets’ fair value or the carrying value of the net investment in the DFL. As a result, the Company derecognized the $351 million carrying value of the net investment in DFL related to the 14 properties and recognized a combination of net real estate ($331 million) and net intangibles assets ($20 million) for the same aggregate amount, with no gain or loss recognized. As a result of the transaction, the 14 properties were transitioned from the senior housing triple-net segment to the SHOP segment during the first quarter of 2019. Pending Direct Financing Lease Sale During the second quarter of 2019, the Company entered into agreements to sell 13 senior housing facilities under DFLs (the “DFL Sale Portfolio”) for $274 million. Upon entering into the agreements, the Company recognized an allowance for DFL losses and related impairment charge of $10 million to write-down the carrying value of the DFL Sale Portfolio to its fair value. The fair value of the DFL Sale Portfolio is based upon the agreed upon sale price, less estimated costs to sell, which is considered to be a Level 2 measurement within the fair value hierarchy. No previous allowances have been recognized related to the DFL Sale Portfolio. The following table summarizes the activity of the DFL Sale Portfolio during the periods presented (dollars in thousands):
In conjunction with the entering into agreements to sell the DFL Sale Portfolio, the Company placed the portfolio on nonaccrual status and will begin recognizing income equal to the amount of cash received. Direct Financing Lease Receivable Maturities The following table summarizes future minimum lease payments contractually due under DFLs at June 30, 2019 (in thousands):
The following table summarizes future minimum lease payments contractually due under DFLs at December 31, 2018 (in thousands):
Residual Value Risk Quarterly, the Company reviews the estimated unguaranteed residual value of assets under DFLs to determine if there have been any material changes compared to the prior quarter. As needed, the Company and/or the related tenants will invest necessary funds to maintain the residual value of each asset. Operating Leases Future Minimum Rents The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under non-cancelable operating leases as of June 30, 2019 (in thousands):
The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under non-cancelable operating leases as of December 31, 2018 (in thousands):
Lease Costs The following tables provide information regarding the Company’s leases to which it is the lessee, such as corporate offices and ground leases (dollars in thousands):
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The following table summarizes future minimum lease payments under non-cancelable ground and other operating leases included in the Company’s lease liability as of June 30, 2019 (in thousands):
The following table summarizes future minimum lease obligations under non-cancelable ground and other operating leases as of December 31, 2018 (in thousands):
Depreciation Expense While the Company leases the majority of its property, plant, and equipment to various tenants under operating leases and DFLs, in certain situations, the Company owns and operates certain property, plant, and equipment for general corporate purposes. Corporate assets are recorded within other assets, net within the Company’s consolidated balance sheets and depreciation expense for those assets is recorded in general and administrative expenses in the Company’s consolidated statements of operations. Included within other assets, net as of both June 30, 2019 and December 31, 2018 is $3 million and $2 million, respectively, of accumulated depreciation related to corporate assets. Included within general and administrative expenses for the three months ended June 30, 2019 and 2018 is $0.4 million and $0.2 million, respectively, of depreciation expense related to corporate assets. Included within general and administrative expenses for the six months ended June 30, 2019 and 2018 is $0.9 million and $0.4 million, respectively, of depreciation expense related to corporate assets.
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Leases | Leases Lease Income The following table summarizes the Company’s lease income (dollars in thousands):
Direct Financing Leases Net investment in DFLs consists of the following (dollars in thousands):
Direct Financing Lease Internal Ratings The following table summarizes the Company’s internal ratings for DFLs at June 30, 2019 (dollars in thousands):
Direct Financing Lease Conversion During the first quarter of 2019, the Company converted a DFL portfolio of 14 senior housing triple-net properties, previously on “Watch List” status, to a RIDEA structure, requiring the Company to recognize net assets equal to the lower of the net assets’ fair value or the carrying value of the net investment in the DFL. As a result, the Company derecognized the $351 million carrying value of the net investment in DFL related to the 14 properties and recognized a combination of net real estate ($331 million) and net intangibles assets ($20 million) for the same aggregate amount, with no gain or loss recognized. As a result of the transaction, the 14 properties were transitioned from the senior housing triple-net segment to the SHOP segment during the first quarter of 2019. Pending Direct Financing Lease Sale During the second quarter of 2019, the Company entered into agreements to sell 13 senior housing facilities under DFLs (the “DFL Sale Portfolio”) for $274 million. Upon entering into the agreements, the Company recognized an allowance for DFL losses and related impairment charge of $10 million to write-down the carrying value of the DFL Sale Portfolio to its fair value. The fair value of the DFL Sale Portfolio is based upon the agreed upon sale price, less estimated costs to sell, which is considered to be a Level 2 measurement within the fair value hierarchy. No previous allowances have been recognized related to the DFL Sale Portfolio. The following table summarizes the activity of the DFL Sale Portfolio during the periods presented (dollars in thousands):
In conjunction with the entering into agreements to sell the DFL Sale Portfolio, the Company placed the portfolio on nonaccrual status and will begin recognizing income equal to the amount of cash received. Direct Financing Lease Receivable Maturities The following table summarizes future minimum lease payments contractually due under DFLs at June 30, 2019 (in thousands):
The following table summarizes future minimum lease payments contractually due under DFLs at December 31, 2018 (in thousands):
Residual Value Risk Quarterly, the Company reviews the estimated unguaranteed residual value of assets under DFLs to determine if there have been any material changes compared to the prior quarter. As needed, the Company and/or the related tenants will invest necessary funds to maintain the residual value of each asset. Operating Leases Future Minimum Rents The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under non-cancelable operating leases as of June 30, 2019 (in thousands):
The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under non-cancelable operating leases as of December 31, 2018 (in thousands):
Lease Costs The following tables provide information regarding the Company’s leases to which it is the lessee, such as corporate offices and ground leases (dollars in thousands):
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The following table summarizes future minimum lease payments under non-cancelable ground and other operating leases included in the Company’s lease liability as of June 30, 2019 (in thousands):
The following table summarizes future minimum lease obligations under non-cancelable ground and other operating leases as of December 31, 2018 (in thousands):
Depreciation Expense While the Company leases the majority of its property, plant, and equipment to various tenants under operating leases and DFLs, in certain situations, the Company owns and operates certain property, plant, and equipment for general corporate purposes. Corporate assets are recorded within other assets, net within the Company’s consolidated balance sheets and depreciation expense for those assets is recorded in general and administrative expenses in the Company’s consolidated statements of operations. Included within other assets, net as of both June 30, 2019 and December 31, 2018 is $3 million and $2 million, respectively, of accumulated depreciation related to corporate assets. Included within general and administrative expenses for the three months ended June 30, 2019 and 2018 is $0.4 million and $0.2 million, respectively, of depreciation expense related to corporate assets. Included within general and administrative expenses for the six months ended June 30, 2019 and 2018 is $0.9 million and $0.4 million, respectively, of depreciation expense related to corporate assets.
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Loans Receivable |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable | Loans Receivable The following table summarizes the Company’s loans receivable (in thousands):
Loans Receivable Internal Ratings The following table summarizes the Company’s internal ratings for loans receivable at June 30, 2019 (dollars in thousands):
U.K. Bridge Loan In 2016, the Company provided a £105 million ($131 million at closing) bridge loan (the “U.K. Bridge Loan”) to Maria Mallaband Care Group Ltd. (“MMCG”) to fund the acquisition of a portfolio of seven care homes in the U.K. Under the U.K. Bridge Loan, the Company retained a three year call option to acquire those seven care homes at a future date for £105 million, subject to certain conditions precedent being met. In March 2018, upon resolution of all conditions precedent, the Company began the process of exercising its call option to acquire the seven care homes and concluded that it should consolidate the real estate. As a result, the Company derecognized the outstanding loan receivable of £105 million and recognized a £29 million ($41 million) loss on consolidation. Refer to Note 14 for the complete impact of consolidating the seven care homes during the first quarter of 2018. In June 2018, the Company completed the process of exercising the above-mentioned call option. The seven care homes acquired through the call option were included in the U.K. JV transaction (see Note 3).
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Investments in and Advances to Unconsolidated Joint Ventures |
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Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in and Advances to Unconsolidated Joint Ventures | Investments in and Advances to Unconsolidated Joint Ventures The Company owns interests in the following entities that are accounted for under the equity method (dollars in thousands):
(5) At June 30, 2019, includes two unconsolidated joint ventures. At December 31, 2018, includes three unconsolidated joint ventures.
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Intangibles |
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Intangibles | Intangibles Intangible assets primarily consist of lease-up intangibles and above market tenant lease intangibles. Intangible liabilities primarily consist of below market lease intangibles. The following tables summarize the Company’s intangible lease assets and liabilities (in thousands):
During the six months ended June 30, 2019, in conjunction with the Company’s acquisitions of real estate (see Note 3), the Company acquired intangible assets of $86 million and intangible liabilities of $8 million. The intangible assets and intangible liabilities acquired have a weighted average amortization period of 2 years and 5 years, respectively. On January 1, 2019, in conjunction with the adoption of ASU 2016-12 (see Note 2), the Company reclassified $39 million of intangible assets, net and $6 million of intangible liabilities, net related to above and below market ground leases to right-of-use asset, net.
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Debt |
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Debt | Debt Bank Line of Credit and Term Loans On May 23, 2019, the Company executed a $2.5 billion unsecured revolving line of credit facility (the “Revolving Facility”), which matures on May 23, 2023 and contains two, six months extension options, subject to certain customary conditions. Borrowings under the Revolving Facility accrue interest at LIBOR plus a margin that depends on the Company’s credit ratings. The Company pays a facility fee on the entire revolving commitment that depends on its credit ratings. Based on the Company’s credit ratings at June 30, 2019, the margin on the Revolving Facility was 0.825% and the facility fee was 0.15%. At June 30, 2019, the Company had $530 million, including £55 million ($70 million), outstanding under the Revolving Facility, with a weighted average effective interest rate of 3.29%. In May 2019, the Company also entered into a new $250 million unsecured term loan facility, which the Company fully drew down on June 20, 2019 (the “2019 Term Loan” and, together with the Revolving Facility, the “Facilities”). The 2019 Term Loan matures on May 23, 2024. Based on the Company’s credit ratings at June 30, 2019, the 2019 Term Loan accrues interest at a rate of LIBOR plus 0.90%, with a weighted average effective interest rate of 3.38%. The Facilities include a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to $750 million, subject to securing additional commitments. The Facilities also contain certain financial restrictions and other customary requirements, including cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreements: (i) limit the ratio of Enterprise Total Indebtedness to Enterprise Gross Asset Value to 60%; (ii) limit the ratio of Enterprise Secured Debt to Enterprise Gross Asset Value to 40%; (iii) limit the ratio of Enterprise Unsecured Debt to Enterprise Unencumbered Asset Value to 60%; (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times; and (v) require a minimum Consolidated Tangible Net Worth of $7.0 billion. At June 30, 2019, the Company believes it was in compliance with each of these restrictions and requirements of the Facilities. On July 3, 2018, the Company exercised its one-time right under a previously-drawn term loan to repay the outstanding British pound sterling (“GBP”) balance and re-borrow in U.S. Dollars (“USD”) with all other key terms unchanged, which resulted in repayment of a £169 million balance and re-borrowing of $224 million. In November 2018, the Company repaid the $224 million unsecured term loan, bringing the total term loan balance to zero at December 31, 2018. Senior Unsecured Notes At June 30, 2019, the Company had senior unsecured notes outstanding with an aggregate principal balance of $5.3 billion. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions and other customary terms. The Company believes it was in compliance with these covenants at June 30, 2019. There were no senior unsecured notes issuances during the six months ended June 30, 2019 or year ended December 31, 2018. In June 2019, the Company priced a public offering of $650 million aggregate principal amount of 3.25% senior unsecured notes due 2026 (the “2026 Notes”) and $650 million aggregate principal amount of 3.50% senior unsecured notes due 2029 (the “2029 Notes” and, together with the 2026 Notes, the “Notes”). The Notes were issued and the proceeds were received on July 5, 2019. In July 2019, using the net proceeds from the Notes offering, the Company: (i) redeemed all of the its $800 million, 2.625% senior unsecured notes due February 2020 (the “2020 Notes”), (ii) repurchased $250 million aggregate principal amount of its 4.250% senior notes due 2023 (the “2023 Notes”), and (iii) repurchased $250 million aggregate principal amount of its 4.000% senior notes due 2022 (the “2022 Notes”). Upon completing the redemption of the 2020 Notes and repurchase of a portion of the 2022 Notes and 2023 Notes, the Company incurred a loss on debt extinguishment of approximately $35 million in July 2019. The following table summarizes the Company’s senior unsecured notes payoffs during the year ended December 31, 2018 (dollars in thousands):
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Mortgage Debt At June 30, 2019, the Company had $155 million in aggregate principal of mortgage debt outstanding (excluding mortgage debt on assets held for sale), which is secured by 15 healthcare facilities with an aggregate carrying value of $305 million. Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets and is generally non-recourse. Mortgage debt typically restricts transfer of the encumbered assets, prohibits additional liens, restricts prepayment, requires payment of real estate taxes, requires maintenance of the assets in good condition, requires insurance on the assets, and includes conditions to obtain lender consent to enter into or terminate material leases. Some of the mortgage debt may require tenants or operators to maintain compliance with the applicable leases or operating agreements of such real estate assets. In May 2019, upon acquiring three senior housing assets from Oakmont, the Company assumed $50 million of secured mortgage debt. In July 2019, upon acquiring five senior housing assets from Oakmont, the Company assumed an additional $112 million of secured mortgage debt (see Note 3). Debt Maturities The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at June 30, 2019 (in thousands):
(5) Represents mortgage debt on assets held for sale with an interest rate of 3.45% and maturity in 2044.
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time, the Company is a party to, or has a significant relationship to, legal proceedings, lawsuits and other claims. Except as described below, the Company is not aware of any legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company’s policy is to expense legal costs as they are incurred. Class Action. On May 9, 2016, a purported stockholder of the Company filed a putative class action complaint, Boynton Beach Firefighters’ Pension Fund v. HCP, Inc., et al., Case No. 3:16-cv-01106-JJH, in the U.S. District Court for the Northern District of Ohio against the Company, certain of its officers, HCR ManorCare, Inc. (“HCRMC”), and certain of its officers, asserting violations of the federal securities laws. The suit asserts claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and alleges that the Company made certain false or misleading statements relating to the value of and risks concerning its investment in HCRMC by allegedly failing to disclose that HCRMC had engaged in billing fraud, as alleged by the U.S. Department of Justice (“DoJ”) in a suit against HCRMC arising from the False Claims Act that the DoJ voluntarily dismissed with prejudice. The plaintiff in the class action suit demands compensatory damages (in an unspecified amount), costs and expenses (including attorneys’ fees and expert fees), and equitable, injunctive, or other relief as the Court deems just and proper. On November 28, 2017, the Court appointed Societe Generale Securities GmbH (SGSS Germany) and the City of Birmingham Retirement and Relief Systems (Birmingham) as Co-Lead Plaintiffs in the class action. The motion to dismiss was fully briefed on May 21, 2018 and oral arguments were held on October 23, 2018. Subsequently, on December 6, 2018, HCRMC and its officers were voluntarily dismissed from the class action lawsuit without prejudice to such claims being refiled. The Company believes the suit to be without merit and intends to vigorously defend against it. Derivative Actions. On June 16, 2016 and July 5, 2016, purported stockholders of the Company filed two derivative actions, Subodh v. HCR ManorCare Inc., et al., Case No. 30-2016-00858497-CU-PT-CXC and Stearns v. HCR ManorCare, Inc., et al., Case No. 30-2016-00861646-CU-MC-CJC, in the Superior Court of California, County of Orange, against certain of the Company’s current and former directors and officers and HCRMC. The Company is named as a nominal defendant. As both derivative actions contained substantially the same allegations, they have been consolidated into a single action (the “California derivative action”). The consolidated action alleges that the defendants engaged in various acts of wrongdoing, including, among other things, breaching fiduciary duties by publicly making false or misleading statements of fact regarding HCRMC’s finances and prospects and failing to maintain adequate internal controls. On April 18, 2017, the Court approved the parties’ stipulation to stay the case pending disposition of the motion to dismiss the class action litigation. On April 10, 2017, a purported stockholder of the Company filed a derivative action, Weldon v. Martin et al., Case No. 3:17-cv-755, in federal court in the Northern District of Ohio, Western Division, against certain of the Company’s current and former directors and officers and HCRMC. The Company is named as a nominal defendant. The Weldon complaint asserts similar claims to those asserted in the California derivative action. In addition, the complaint asserts a claim under Section 14(a) of the Exchange Act, alleging that the Company made false statements in its 2016 proxy statement by not disclosing that the Company’s performance issues in 2015 were the direct result of alleged billing fraud at HCRMC. On April 18, 2017, the Court re-assigned and transferred this action to the judge presiding over the related federal securities class action. On July 11, 2017, the Court approved a stipulation by the parties to stay the case pending disposition of the motion to dismiss the class action. On July 21, 2017, a purported stockholder of the Company filed another derivative action, Kelley v. HCR ManorCare, Inc., et al., Case No. 8:17-cv-01259, in federal court in the Central District of California, against certain of the Company’s current and former directors and officers and HCRMC. The Company is named as a nominal defendant. The Kelley complaint asserts similar claims to those asserted in Weldon and in the California derivative action. Like Weldon, the Kelley complaint also additionally alleges that the Company made false statements in its 2016 proxy statement, and asserts a claim for a violation of Section 14(a) of the Exchange Act. On November 28, 2017, the federal court in the Central District of California granted Defendants’ motion to transfer the action to the Northern District of Ohio (i.e., the court where the class action and other federal derivative action are pending). The Court in the Northern District of Ohio is currently considering whether to consolidate the Weldon and Kelley actions, appointment of lead plaintiffs and counsel, and whether the stay in Weldon should continue as to either or both actions. The Company’s Board of Directors received letters dated August 17, 2016, April 19, 2017, and April 20, 2017 from private law firms acting on behalf of clients who are purported stockholders of the Company, each asserting allegations similar to those made in the California derivative action matters discussed above. Each letter demands that the Board of Directors take action to assert the Company’s rights. The Board of Directors completed its evaluation and rejected the demand letters in December of 2017. One of the law firms has more recently requested that the Board of Directors reconsider its determination after a ruling on the motion to dismiss in the class action litigation. The Company believes that the plaintiffs lack standing or the lawsuits and demands are without merit, but cannot predict the outcome of these proceedings or reasonably estimate any potential loss at this time. Accordingly, no loss contingency has been recorded for these matters as of June 30, 2019, as the likelihood of loss is not considered probable or estimable.
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Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity At-The-Market Equity Offering Program In June 2015, the Company established an at-the-market equity offering program (“ATM Program”) to sell shares of its common stock from time to time through a consortium of banks acting as sales agents or directly to the banks acting as principals. In May 2018, the Company renewed its ATM Program (the “2018 ATM Program”). During the year ended December 31, 2018, the Company issued 5.4 million shares of common stock at a weighted average net price of $28.27 per share, resulting in net proceeds of $154 million. In February 2019, the Company terminated the 2018 ATM Program and established a new ATM Program (the “2019 ATM Program”) pursuant to which shares of common stock having an aggregate gross sales price of up to $1.0 billion may be sold (i) by the Company through a consortium of banks acting as sales agents or directly to the banks acting as principals or (ii) by a consortium of banks acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. The use of a forward sale agreement would allow the Company to lock in a share price on the sale of shares at the time the agreement is effective, but defer receiving the proceeds from the sale of shares until a later date. ATM Direct Issuances During the three and six months ended June 30, 2019, the Company issued 5.9 million shares of common stock at a weighted average net price of $31.84 per share, after commissions, resulting in net proceeds of $189 million. ATM Forward Contracts During the six months ended June 30, 2019, the Company utilized the forward provisions under the 2019 ATM Program to allow for the sale of up to an aggregate of 13.6 million shares of its common stock at an initial weighted average net price of $31.24 per share, after commissions. During the three and six months ended June 30, 2019, the Company settled 5.5 million shares at a weighted average net price of $30.91 per share, after commissions, resulting in net proceeds of $171 million. At June 30, 2019, 8.1 million shares remained outstanding under forward contracts, with a weighted average net price of $31.35 per share, after commissions. At June 30, 2019, approximately $378 million of our common stock remained available for sale under the 2019 ATM Program. Subsequent to June 30, 2019, the Company utilized the forward provisions under the 2019 ATM Program to allow for the sale of up to an additional 1.2 million shares of its common stock at an initial weighted average net price of $31.10 per share, after commissions. Each forward sale has a one year term. At any time during the term, the Company may settle the forward sale by delivery of physical shares of common stock to the forward seller or, at the Company’s election, in cash or net shares. The forward sale price that the Company expects to receive upon settlement of outstanding forward contracts will be the initial forward price established upon the effective date, subject to adjustments for: (i) accrued interest, (ii) the forward purchasers’ stock borrowing costs, and (iii) certain fixed price reductions during the term of the agreement. 2018 Forward Equity Offering In December 2018, the Company entered into a forward sales agreement to sell up to an aggregate of 15.25 million shares of its common stock (including shares issued through the exercise of underwriters’ options) at an initial net price of $28.60 per share, after underwriting discounts and commissions. The agreement has a one year term that expires on December 13, 2019 during which time the Company may settle the forward sales agreement by delivery of physical shares of common stock to the forward seller or, at the Company’s election, by settling in cash or net shares. The forward sale price that the Company expects to receive upon settlement of the agreement will be the initial net price of $28.60 per share, subject to adjustments for: (i) accrued interest, (ii) the forward purchasers’ stock borrowing costs, and (iii) certain fixed price reductions during the term of the agreement. During the three and six months ended June 30, 2019, the Company settled 1.5 million shares under the forward sales agreement at a net price of $28.11 per share, resulting in net proceeds of $42 million. At June 30, 2019, 13.75 million shares remained outstanding under the forward sales agreement. In December 2018, contemporaneous with the forward equity offering discussed above, the Company completed an offering of 2 million shares of common stock at a net price of $28.60 per share, resulting in net proceeds of $57 million. Accumulated Other Comprehensive Income (Loss) The following table summarizes the Company’s accumulated other comprehensive income (loss) (in thousands):
_______________________________________ (1) See Note 3 for a discussion of the U.K. JV transaction.
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Segment Disclosures |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Disclosures | Segment Disclosures The Company evaluates its business and allocates resources based on its reportable business segments: (i) senior housing triple-net, (ii) SHOP, (iii) life science, and (iv) medical office. The Company has non-reportable segments that are comprised primarily of the Company’s debt investments, hospital properties, unconsolidated joint ventures, and U.K. investments. The accounting policies of the segments are the same as those in Note 2 to the Consolidated Financial Statements in the Company’s 2018 Annual Report on Form 10-K filed with the SEC, as updated by Note 2 herein. During the first quarter of 2019, as a result of a change in how operating results are reported to the chief operating decision makers for the purpose of evaluating performance and allocating resources, the Company reclassified operating results related to two facilities from its other non-reportable segment to its medical office segment. Accordingly, all prior period segment information has been recast to conform to current period presentation. During the three and six months ended June 30, 2019, 21 and 39 senior housing triple-net facilities, respectively, were transferred to the Company’s SHOP segment as a result of terminating the triple-net leases and transitioning the assets to a RIDEA structure. During each of the three and six months ended June 30, 2018, 10 senior housing triple-net facilities were transferred to the Company’s SHOP segment. When an asset is transferred from one segment to another, the results associated with that asset are included in the original segment until the date of transfer. Results generated after the transfer date are included in the new segment. The Company evaluates performance based upon property NOI and Adjusted NOI. NOI is defined as real estate revenues (inclusive of rental and related revenues, resident fees and services, and income from direct financing leases), less property level operating expenses (which exclude transition costs); NOI excludes all other financial statement amounts included in net income (loss). Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, termination fees, actuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee income and expense. NOI and Adjusted NOI exclude the Company’s share of income (loss) from unconsolidated joint ventures, which is recognized as equity income (loss) from unconsolidated joint ventures in the consolidated statements of operations. Non-segment assets consist of assets in the Company's other non-reportable segments and corporate non-segment assets. Corporate non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, accounts receivable, net, marketable equity securities, and real estate assets and liabilities held for sale. See Note 15 for other information regarding concentrations of credit risk. The following tables summarize information for the reportable segments (in thousands): For the three months ended June 30, 2019:
For the three months ended June 30, 2018:
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For the six months ended June 30, 2019:
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For the six months ended June 30, 2018:
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The following table summarizes the Company’s revenues by segment (in thousands):
See Note 3 for significant transactions impacting the Company’s segment assets during the periods presented.
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Earnings Per Common Share |
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Earnings Per Common Share | Earnings Per Common Share Basic income (loss) per common share (“EPS”) is computed based upon the weighted average number of common shares outstanding. Diluted income (loss) per common share is computed based upon the weighted average number of common shares outstanding plus the impact of forward equity sales agreements using the treasury stock method and common shares issuable from the assumed conversion of DownREIT units, stock options, certain performance restricted stock units, and unvested restricted stock units. Only those instruments having a dilutive impact on our basic income (loss) per share are included in diluted income (loss) per share during the periods presented. Restricted stock and certain performance restricted stock units are considered participating securities, because dividend payments are not forfeited even if the underlying award does not vest, and require use of the two-class method when computing basic and diluted earnings per share. During the six months ended June 30, 2019, the Company utilized the forward sale provisions under the 2019 ATM Program to sell up to an aggregate of 13.6 million shares of common stock with a one year term. During the three and six months ended June 30, 2019, the Company settled 5.5 million shares under ATM forward contracts, leaving 8.1 million shares outstanding thereunder. Additionally, in December 2018, the Company entered into a forward equity sales agreement to sell up to an aggregate of 15.25 million shares of its common stock by December 13, 2019. During each of the three and six months ended June 30, 2019, the Company settled 1.5 million shares under the December 2018 forward sales agreement, leaving 13.75 million shares outstanding thereunder. The Company expects to settle the remaining forward sales with shares of common stock prior to their respective expiration dates. See Note 10 for further details. The Company considered the potential dilution resulting from the forward agreements to the calculation of earnings per share. At inception, the agreements do not have an effect on the computation of basic EPS as no shares are delivered until settlement. However, the Company uses the treasury stock method to determine the dilution, if any, resulting from the forward sales agreements during the period of time prior to settlement. The aggregate effect on the Company’s diluted weighted-average common shares for the six months ended June 30, 2019, was 1.3 million weighted-average incremental shares from the forward equity sales agreements, respectively. The following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts):
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Supplemental Cash Flow Information |
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Supplemental Cash Flow Information | Supplemental Cash Flow Information The following table provides supplemental cash flow information (in thousands):
See discussions related to: (i) the U.K. JV transaction in Note 3, (ii) the U.K. Bridge Loan in Notes 5 and 14, (iii) the conversion of DFLs to real estate in Note 4, and (iv) the consolidation of previously unconsolidated joint ventures in Note 3. The following table summarizes cash, cash equivalents and restricted cash (in thousands):
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Variable Interest Entities |
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Variable Interest Entities | Variable Interest Entities Unconsolidated Variable Interest Entities At June 30, 2019, the Company had investments in: (i) 15 properties leased to VIE tenants, (ii) 4 unconsolidated VIE joint ventures, (iii) marketable debt securities of 1 VIE, and (iv) 1 loan to a VIE borrower. The Company determined it is not the primary beneficiary of and therefore does not consolidate these VIEs because it does not have the ability to control the activities that most significantly impact their economic performance. Except for the Company’s equity interest in the unconsolidated joint ventures (CCRC OpCo, the development investment, Waldwick JV and the LLC investment discussed below), it has no formal involvement in these VIEs beyond its investments. VIE Tenants. The Company leases 15 properties to a total of 4 tenants that have also been identified as VIEs (“VIE tenants”). These VIE tenants are “thinly capitalized” entities that rely on the operating cash flows generated from the senior housing facilities to pay operating expenses, including the rent obligations under their leases. CCRC OpCo. The Company holds a 49% ownership interest in CCRC OpCo, a joint venture entity formed in August 2014 that operates senior housing properties in a RIDEA structure and has been identified as a VIE. The equity members of CCRC OpCo “lack power” because they share certain operating rights with Brookdale, as manager of the CCRCs. The assets of CCRC OpCo primarily consist of the CCRCs that it owns and leases, resident fees receivable, notes receivable, and cash and cash equivalents; its obligations primarily consist of operating lease obligations to CCRC PropCo, debt service payments, capital expenditures, accounts payable, and expense accruals. Assets generated by the CCRC operations (primarily rents from CCRC residents) of CCRC OpCo may only be used to settle its contractual obligations (primarily from debt service payments, capital expenditures, and rental costs and operating expenses incurred to manage such facilities). Waldwick Development JV. The Company holds an 85% ownership interest in a development joint venture (the “Waldwick JV”), which has been identified as a VIE as power is shared with a member that does not have a substantive equity investment at risk. The assets of the joint venture primarily consist of an in-progress senior housing facility development project that it owns and cash and cash equivalents; its obligations primarily consist of accounts payable and expense accruals associated with the cost of its development obligations. Any assets generated by the joint venture may only be used to settle its contractual obligations (primarily development expenses and debt service payments). LLC Investment. The Company holds a limited partner ownership interest in an unconsolidated LLC that has been identified as a VIE. The Company’s involvement in the entity is limited to its equity investment as a limited partner and it does not have any substantive participating rights or kick-out rights over the general partner. The assets and liabilities of the entity primarily consist of those associated with its senior housing real estate and development activities. Any assets generated by the entity may only be used to settle its contractual obligations (primarily development expenses and debt service payments). Development Investment. The Company holds an investment (consisting of mezzanine debt and preferred equity) in a senior housing development joint venture. The joint venture is also capitalized by a senior loan from a third party and equity from the third party managing-member, but is considered to be “thinly capitalized” as there is insufficient equity investment at risk. Debt Securities Investment. The Company holds commercial mortgage-backed securities (“CMBS”) issued by Federal Home Loan Mortgage Corporation (commonly referred to as Freddie MAC) through a special purpose entity that has been identified as a VIE because it is “thinly capitalized.” The CMBS issued by the VIE are backed by mortgage debt obligations on real estate assets. Seller Financing Loan. The Company provided seller financing of $10 million related to its sale of seven senior housing triple-net facilities. The financing was provided in the form of a secured five year mezzanine loan to a “thinly capitalized” borrower created to acquire the facilities. The classification of the related assets and liabilities and the maximum loss exposure as a result of the Company’s involvement with these VIEs at June 30, 2019 was as follows (in thousands):
At June 30, 2019, the Company had not provided, and is not required to provide, financial support through a liquidity arrangement or otherwise, to its unconsolidated VIEs, including circumstances in which it could be exposed to further losses (e.g., cash shortfalls). See Notes 4, 5, and 6 for additional descriptions of the nature, purpose, and operating activities of the Company’s unconsolidated VIEs and interests therein. Consolidated Variable Interest Entities HCP, Inc.’s consolidated total assets and total liabilities at June 30, 2019 and December 31, 2018 include certain assets of VIEs that can only be used to settle the liabilities of the related VIE. The VIE creditors do not have recourse to HCP, Inc. Total assets and total liabilities include VIE assets and liabilities as follows (in thousands):
HCP Ventures V, LLC. The Company holds a 51% ownership interest in and is the managing member of a joint venture entity formed in October 2015 that owns and leases MOBs (“HCP Ventures V”). The Company classifies HCP Ventures V as a VIE due to the non-managing member lacking substantive participation rights in the management of HCP Ventures V or kick-out rights over the managing member. The Company consolidates HCP Ventures V as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIE’s economic performance. The assets of HCP Ventures V primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of capital expenditures for the properties. Assets generated by HCP Ventures V may only be used to settle its contractual obligations (primarily from capital expenditures). Watertown JV. The Company holds a 95% ownership interest in and is the managing member of joint venture entities formed in November 2017 that own and operate a senior housing property in a RIDEA structure (“Watertown JV”). Watertown PropCo is a VIE as the Company and the non-managing member share in control of the entity, but substantially all of the entity's activities are performed on behalf of the Company. Watertown OpCo is a VIE as the non-managing member, through its equity interest, lacks substantive participation rights in the management of Watertown OpCo or kick-out rights over the managing member. The Company consolidates Watertown PropCo and Watertown OpCo as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of Watertown PropCo primarily consist of a leased property (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of notes payable to a non-VIE consolidated subsidiary of the Company. The assets of Watertown OpCo primarily consist of leasehold interests in a senior housing facility (operating lease), resident fees receivable, and cash and cash equivalents; its obligations primarily consist of lease payments to Watertown PropCo and operating expenses of its senior housing facilities (accounts payable and accrued expenses). Assets generated by the senior housing operations (primarily from senior housing resident rents) of the Watertown structure may only be used to settle its contractual obligations (primarily from the rental costs, operating expenses incurred to manage such facilities, and debt costs). Life Science JVs. The Company holds a 99% ownership interest in multiple joint venture entities that own and lease life science assets (the “Life Science JVs”). The Life Science JVs are VIEs as the members share in control of the entities, but substantially all of the activities are performed on behalf of the Company. The Company consolidates the Life Science JVs as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the Life Science JVs primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of debt service payments and capital expenditures for the properties. Assets generated by the Life Science JVs may only be used to settle their contractual obligations (primarily from capital expenditures). MSREI MOB JV. The Company holds a 51% ownership interest in, and is the managing member of, a joint venture entity formed in August 2018 that owns and leases MOBs (the “MSREI JV” - see Note 3). The MSREI JV is a VIE due to the non-managing member lacking substantive participation rights in the management of the joint venture or kick-out rights over the managing member. The Company consolidates the MSREI JV as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIE’s economic performance. The assets of the MSREI JV primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of capital expenditures for the properties. Assets generated by the MSREI JV may only be used to settle its contractual obligations (primarily from capital expenditures). Consolidated Lessee. The Company leases two senior housing properties to a lessee entity under a cash flow lease through which the Company receives monthly rent equal to the residual cash flows of the property. The lessee entity is classified as a VIE as it is a "thinly capitalized" entity. The Company consolidates the lessee entity as it has the ability to control the activities that most significantly impact the economic performance of the lessee entity. The lessee entity’s assets primarily consist of leasehold interests in a senior housing facility (operating leases), resident fees receivable, and cash and cash equivalents; its obligations primarily consist of lease payments to the Company and operating expenses of the senior housing facility (accounts payable and accrued expenses). Assets generated by the senior housing operations (primarily from senior housing resident rents) may only be used to settle its contractual obligations (primarily from the rental costs, operating expenses incurred to manage such facilities, and debt costs). DownREITs. The Company holds a controlling ownership interest in and is the managing member of six limited liability companies (“DownREITs”). The Company classifies the DownREITs as VIEs due to the non-managing members lacking substantive participation rights in the management of the DownREITs or kick-out rights over the managing member. The Company consolidates the DownREITs as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the DownREITs primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of debt service payments and capital expenditures for the properties. Assets generated by the DownREITs (primarily from resident rents) may only be used to settle their contractual obligations (primarily from debt service and capital expenditures). Other Consolidated Real Estate Partnerships. The Company holds a controlling ownership interest in and is the general partner (or managing member) of multiple partnerships that own and lease real estate assets (the “Partnerships”). The Company classifies the Partnerships as VIEs due to the limited partners (non-managing members) lacking substantive participation rights in the management of the Partnerships or kick-out rights over the general partner (managing member). The Company consolidates the Partnerships as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the Partnerships primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of debt service payments and capital expenditures for the properties. Assets generated by the Partnerships (primarily from resident rents) may only be used to settle their contractual obligations (primarily from debt service and capital expenditures). Other consolidated VIEs. The Company made a loan to an entity that entered into a tax credit structure (“Tax Credit Subsidiary”) and a loan to an entity that made an investment in a development joint venture (“Development JV”) both of which are considered VIEs. The Company consolidates the Tax Credit Subsidiary and Development JV as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIEs’ economic performance. The assets and liabilities of the Tax Credit Subsidiary and Development JV substantially consist of a development in progress, notes receivable, prepaid expenses, notes payable, and accounts payable and accrued liabilities generated from their operating activities. Any assets generated by the operating activities of the Tax Credit Subsidiary and Development JV may only be used to settle their contractual obligations. U.K. Bridge Loan. In 2016, the Company provided a £105 million ($131 million at closing) bridge loan to MMCG to fund the acquisition of a portfolio of seven care homes in the U.K. MMCG created a special purpose entity to acquire the portfolio and funded it entirely using the Company’s bridge loan. As such, the special purpose entity had historically been identified as a VIE because it was “thinly capitalized.” The Company retained a three year call option to acquire all the shares of the special purpose entity, which it could only exercise upon the occurrence of certain events. During the quarter ended March 31, 2018, the Company concluded that the conditions required to exercise the call option had been met and initiated the call option process to acquire the special purpose entity. In conjunction with initiating the process to legally exercise its call option and the satisfaction of required contingencies, the Company concluded that it was the primary beneficiary of the special purpose entity and therefore, should consolidate the entity. As such, during the quarter ended March 31, 2018, the Company derecognized the previously outstanding loan receivable, recognized the special purpose entity’s assets and liabilities at their respective fair values, and recognized a £29 million ($41 million) loss on consolidation, net of a tax benefit of £2 million ($3 million), to account for the difference between the carrying value of the loan receivable and the fair value of net assets and liabilities assumed. The loss on consolidation was recognized within other income (expense), net and the tax benefit was recognized within income tax benefit (expense). The fair value of net assets and liabilities consolidated during the first quarter of 2018 consisted of £81 million ($114 million) of net real estate, £4 million ($5 million) of intangible assets, and £9 million ($13 million) of net deferred tax liabilities. In June 2018, the Company completed the exercise of the above-mentioned call option and formally acquired full ownership of the special purpose entity. As such, the Company reconsidered whether the special purpose entity was a VIE and concluded that it was no longer “thinly capitalized” as the previously outstanding bridge loan converted to equity at risk and, therefore, was no longer a VIE. The real estate assets held by the special purpose entity were contributed to the U.K. JV formed by the Company in June 2018 (see Note 3).
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Concentration of Credit Risk |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk Concentrations of credit risk arise when one or more tenants, operators, or obligors related to the Company’s investments are engaged in similar business activities or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. The Company regularly monitors various segments of its portfolio to assess potential concentrations of credit risks. The following tables provide information regarding the Company’s concentrations of credit risk with respect to certain tenants:
At both June 30, 2019 and December 31, 2018, Brookdale managed or operated, in the Company’s SHOP segment, approximately 6% and 7%, respectively, of the Company’s real estate investments (based on total assets). Because an operator manages the Company’s facilities in exchange for the receipt of a management fee, the Company is not directly exposed to the credit risk of its operators in the same manner or to the same extent as its triple-net tenants. At June 30, 2019, Brookdale provided comprehensive facility management and accounting services with respect to 26 of the Company’s consolidated SHOP facilities and 15 SHOP facilities owned by its unconsolidated joint ventures, for which the Company or joint venture pay annual management fees pursuant to long-term management agreements. Most of the management agreements have terms ranging from 10 to 15 years, with three to four 5-year renewal periods. The base management fees are 4.5% to 5.0% of gross revenues (as defined) generated by the RIDEA properties. In addition, there are incentive management fees payable to Brookdale if operating results of the RIDEA properties exceed pre-established EBITDAR (as defined) thresholds. To mitigate the credit risk of leasing properties to certain senior housing and post-acute/skilled nursing operators, leases with operators are often combined into portfolios that contain cross-default terms, so that if a tenant of any of the properties in a portfolio defaults on its obligations under its lease, the Company may pursue its remedies under the lease with respect to any of the properties in the portfolio. Certain portfolios also contain terms whereby the net operating profits of the properties are combined for the purpose of securing the funding of rental payments due under each lease.
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Fair Value Measurements |
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Financial Instruments, Owned, at Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets are immaterial at June 30, 2019. The table below summarizes the carrying amounts and fair values of the Company’s financial instruments (in thousands):
(3) During the six months ended June 30, 2019 and year ended December 31, 2018, there were no material transfers of financial assets or liabilities within the fair value hierarchy.
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Derivative Financial Instruments |
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Derivative Financial Instruments | Derivative Financial Instruments The following table summarizes the Company’s outstanding swap contracts at June 30, 2019 (dollars in thousands):
The Company uses derivative instruments to mitigate the effects of interest rate fluctuations on specific forecasted transactions as well as recognized financial obligations or assets. Utilizing derivative instruments allows the Company to manage the risk of fluctuations in interest rates related to the potential impact these changes could have on future earnings and forecasted cash flows. The Company does not use derivative instruments for speculative or trading purposes. Assuming a one percentage point shift in the underlying interest rate curve, the estimated change in fair value of each of the underlying derivative instruments would not exceed $1 million. At June 30, 2019, £55 million of the Company’s GBP-denominated borrowings under the Revolving Facility are designated as a hedge of a portion of the Company’s net investments in GBP-functional currency unconsolidated subsidiaries to mitigate its exposure to fluctuations in the GBP to USD exchange rate. For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to USD exchange rate of the instrument is recorded as part of the cumulative translation adjustment component of accumulated other comprehensive income (loss). Accordingly, the remeasurement value of the designated £55 million GBP-denominated borrowings due primarily to fluctuations in the GBP to USD exchange rate are reported in accumulated other comprehensive income (loss) as the hedging relationship is considered to be effective. The balance in accumulated other comprehensive income (loss) will be reclassified to earnings when the Company sells its remaining investment in the U.K.
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management’s estimates. The consolidated financial statements include the accounts of HCP, Inc., its wholly-owned subsidiaries, joint ventures (“JVs”) and variable interest entities (“VIEs”) that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. All adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The accompanying unaudited interim financial information should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”).
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted Revenue Recognition. Between May 2014 and February 2017, the Financial Accounting Standards Board (“FASB”) issued four ASUs changing the requirements for recognizing and reporting revenue (together, herein referred to as the “Revenue ASUs”): (i) ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), (ii) ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), (iii) ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), and (iv) ASU No. 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”). ASU 2014-09 provides guidance for revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2016-08 is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. ASU 2016-12 provides practical expedients and improvements on the previously narrow scope of ASU 2014-09. ASU 2017-05 clarifies the scope of the FASB’s guidance on nonfinancial asset derecognition and aligns the accounting for partial sales of nonfinancial assets and in-substance nonfinancial assets with the guidance in ASU 2014-09. The Company adopted the Revenue ASUs effective January 1, 2018 and utilized a modified retrospective adoption approach, resulting in a cumulative-effect adjustment to equity of $79 million as of January 1, 2018. Under the Revenue ASUs, the Company also elected to utilize a practical expedient which allows the Company to only reassess contracts that were not completed as of the adoption date, rather than all historical contracts. As the timing and recognition of the majority of the Company’s revenue is the same whether accounted for under the Revenue ASUs or lease accounting guidance (see discussion below), the impact of the Revenue ASUs, upon and subsequent to adoption, is generally limited to the following:
Leases. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 (codified under Accounting Standards Codification (“ASC”) 842, Leases) amends the previous accounting for leases to: (i) require lessees to put most leases on their balance sheets (not required for short-term leases with lease terms of 12 months or less), but continue recognizing expenses on their income statements in a manner similar to requirements under prior accounting guidance, (ii) eliminate real estate specific lease provisions, and (iii) modify the classification criteria and accounting for sales-type leases for lessors. Additionally, ASU 2016-02 provides a practical expedient, which the Company elected, that allows an entity to not reassess the following upon adoption (must be elected as a group): (i) whether an expired or existing contract contains a lease arrangement, (ii) lease classification related to expired or existing lease arrangements, or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs. As a result of adopting ASU 2016-02 on January 1, 2019 using the modified retrospective transition approach, the Company recognized a cumulative-effect adjustment to equity of $1 million as of January 1, 2019. Under ASU 2016-02, the Company began capitalizing fewer costs related to the drafting and negotiation of its lease agreements. Additionally, the Company began recognizing all of its significant operating leases for which it is the lessee, including corporate office leases, equipment leases, and ground leases, on its consolidated balance sheets as a lease liability and corresponding right-of-use asset. As such, the Company recognized a lease liability of $153 million and right-of-use asset of $166 million on January 1, 2019. The aggregate lease liability is calculated as the present value of minimum lease payments, discounted using a rate that approximates the Company’s secured incremental borrowing rate, adjusted for the noncancelable term of each lease. The right-of-use asset is calculated as the aggregate lease liability, adjusted for the existing accrued straight-line rent liability balance of $20 million and net unamortized above/below market ground lease intangible assets of $33 million. Under ASU 2016-02, a practical expedient was offered to lessees to make a policy election, which the Company elected, to not separate lease and nonlease components, but rather account for the combined components as a single lease component under ASC 842. In July 2018, the FASB issued ASU No. 2018-11, Leases - Targeted Improvements (“ASU 2018-11”), which provides lessors with a similar option to elect a practical expedient allowing them to not separate lease and nonlease components in a contract for the purpose of revenue recognition and disclosure. This practical expedient is limited to circumstances in which: (i) the timing and pattern of transfer are the same for the nonlease component and the related lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. This practical expedient causes an entity to assess whether a contract is predominantly lease or service based and recognize the entire contract under the relevant accounting guidance (i.e., predominantly lease-based would be accounted for under ASU 2016-02 and predominantly service-based would be accounted for under the Revenue ASUs). The Company elected this practical expedient as well and, as a result, beginning January 1, 2019, the Company recognizes revenue from its senior housing triple-net, medical office, and life science segments under ASC 842 and revenue from its SHOP segment under the Revenue ASUs (codified under ASC 606, Revenue from Contracts with Customers). In conjunction with reaching the conclusions above, the Company concluded it was appropriate (under ASC 205, Presentation of Financial Statements) to reclassify amounts previously classified as revenue from tenant recoveries (within the senior housing triple-net, life science, and medical office segments) and present them combined with rental and related revenues within the consolidated statements of operations. The Company implemented this change during the fourth quarter of 2018. Included within rental and related revenues for the three and six months ended June 30, 2018 is $39 million and $76 million, respectively, of tenant recoveries. In December 2018, the FASB issued ASU No. 2018-20, Narrow Scope Improvements for Lessors (“ASU 2018-20”), which requires that a lessor: (i) exclude certain lessor costs paid directly by a lessee to third parties on behalf of the lessor from a lessor's measurement of variable lease revenue and associated expense (i.e., no gross up of revenue and expense for these costs) and (ii) include lessor costs that are paid by the lessor and reimbursed by the lessee in the measurement of variable lease revenue and the associated expense (i.e., gross up revenue and expense for these costs). This is consistent with the Company’s historical presentation and did not require a material change on January 1, 2019. Other. Effective January 1, 2019, the Company adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The amendments in ASU 2017-12 expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. For cash flow and net investment hedges existing at the date of adoption, the Company adopted the amendments in ASU 2017-12 using the modified retrospective approach. For amendments impacting presentation and disclosure, the Company adopted ASU 2017-12 using a prospective approach. The adoption of ASU 2017-12 did not have a material impact to the Company’s consolidated financial position, results of operations, cash flows, or disclosures upon adoption. Not Yet Adopted Credit Losses. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments held by financial institutions and other organizations. The amendments in ASU 2016-13 eliminate the “probable” initial threshold for recognition of credit losses in current accounting guidance and, instead, reflect an entity’s current estimate of all expected credit losses over the life of the financial instrument. Previously, when credit losses were measured under current accounting guidance, an entity generally only considered past events and current conditions in measuring the incurred loss. The amendments in ASU 2016-13 broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss. ASU 2016-13 is effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. A reporting entity is required to apply the amendments in ASU 2016-13 using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. Upon adoption of ASU 2016-13, the Company is required to reassess its financing receivables, including direct financing leases (“DFLs”) and loans receivable, and expects that application of ASU 2016-13 may result in the Company recognizing credit losses at an earlier date than would otherwise be recognized under current accounting guidance. The Company is evaluating the impact of the adoption of ASU 2016-13 on January 1, 2020 to its consolidated financial position and results of operations. Segment Reporting The Company’s reportable segments, based on how it evaluates its business and allocates resources, are as follows: (i) senior housing triple-net, (ii) SHOP, (iii) life science, and (iv) medical office. During the first quarter of 2019, as a result of a change in how operating results are reported to the Company's chief operating decision makers for the purpose of evaluating performance and allocating resources, two facilities were reclassified from other non-reportable segments to the medical office segment. Accordingly, all prior period segment information has been recast to conform to the current period presentation.
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases, Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Company's Lease Income | The following table summarizes the Company’s lease income (dollars in thousands):
The following table summarizes the activity of the DFL Sale Portfolio during the periods presented (dollars in thousands):
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Schedule of Components of Net Investment in DFLs | Net investment in DFLs consists of the following (dollars in thousands):
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Schedule of Future Minimum Lease Payments Contractually Due Under DFLs | The following table summarizes future minimum lease payments contractually due under DFLs at June 30, 2019 (in thousands):
The following table summarizes future minimum lease payments contractually due under DFLs at December 31, 2018 (in thousands):
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Summary of the Company's Internal Ratings for DFLs | The following table summarizes the Company’s internal ratings for DFLs at June 30, 2019 (dollars in thousands):
The following table summarizes the Company’s internal ratings for loans receivable at June 30, 2019 (dollars in thousands):
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Schedule of Future Minimum Lease Payments Due Under Operating Leases | The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under non-cancelable operating leases as of June 30, 2019 (in thousands):
The following table summarizes future minimum lease payments to be received, excluding operating expense reimbursements, from tenants under non-cancelable operating leases as of December 31, 2018 (in thousands):
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Schedule of Other Lease Information | The following tables provide information regarding the Company’s leases to which it is the lessee, such as corporate offices and ground leases (dollars in thousands):
_______________________________________
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Schedule of Future Minimum Lease Obligations, 842 | The following table summarizes future minimum lease payments under non-cancelable ground and other operating leases included in the Company’s lease liability as of June 30, 2019 (in thousands):
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Schedule of Future Minimum Lease Obligations, 840 | The following table summarizes future minimum lease obligations under non-cancelable ground and other operating leases as of December 31, 2018 (in thousands):
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Loans Receivable (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable | The following table summarizes the Company’s loans receivable (in thousands):
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Summary of the Company's Internal Ratings for Loans Receivable | The following table summarizes the Company’s internal ratings for DFLs at June 30, 2019 (dollars in thousands):
The following table summarizes the Company’s internal ratings for loans receivable at June 30, 2019 (dollars in thousands):
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Investments in and Advances to Unconsolidated Joint Ventures (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Method Investments | The Company owns interests in the following entities that are accounted for under the equity method (dollars in thousands):
(5) At June 30, 2019, includes two unconsolidated joint ventures. At December 31, 2018, includes three unconsolidated joint ventures.
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Intangibles (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Lease Assets | The following tables summarize the Company’s intangible lease assets and liabilities (in thousands):
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Schedule of Intangible Lease Liabilities |
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Senior Notes Issuances | The following table summarizes the Company’s senior unsecured notes payoffs during the year ended December 31, 2018 (dollars in thousands):
_______________________________________ (1) The Company recorded a $44 million loss on debt extinguishment related to the repurchase of senior notes.
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Summary of Debt Maturities and Schedule Principal Repayments | The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at June 30, 2019 (in thousands):
(5) Represents mortgage debt on assets held for sale with an interest rate of 3.45% and maturity in 2044.
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Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other comprehensive Loss | The following table summarizes the Company’s accumulated other comprehensive income (loss) (in thousands):
_______________________________________ (1) See Note 3 for a discussion of the U.K. JV transaction.
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Segment Disclosures (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Information of Reportable Segments | The following tables summarize information for the reportable segments (in thousands): For the three months ended June 30, 2019:
For the three months ended June 30, 2018:
_______________________________________
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Reconciliation of Company's Revenues by Segment | The following table summarizes the Company’s revenues by segment (in thousands):
|
Earnings Per Common Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings per Share | The following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts):
_______________________________________ (1) Represents the current dilutive impact of 22 million shares of common stock under forward sales agreements that have not been settled as of June 30, 2019. Based on the forward price of each agreement as of June 30, 2019, issuance of all 22 million shares would result in approximately $641 million of net proceeds.
|
Supplemental Cash Flow Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | The following table provides supplemental cash flow information (in thousands):
|
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Schedule of Cash, Cash Equivalents and Restricted Cash | The following table summarizes cash, cash equivalents and restricted cash (in thousands):
|
Variable Interest Entities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The classification of the related assets and liabilities and the maximum loss exposure as a result of the Company’s involvement with these VIEs at June 30, 2019 was as follows (in thousands):
(2) The Company’s maximum loss exposure may be mitigated by re-leasing the underlying properties to new tenants upon an event of default.
|
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Consolidated Assets and Liabilities of Variable Interest Entities | Total assets and total liabilities include VIE assets and liabilities as follows (in thousands):
|
Concentration of Credit Risk (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Concentration of Credit Risk | The following tables provide information regarding the Company’s concentrations of credit risk with respect to certain tenants:
(1) Excludes senior housing facilities operated by Brookdale in the Company’s SHOP segment as discussed below. Percentages of segment and total company revenues include partial-year revenue earned from senior housing triple-net facilities that were sold during 2018.
|
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments, Owned, at Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Carry Amounts and Fair Value of Financial Instruments | The table below summarizes the carrying amounts and fair values of the Company’s financial instruments (in thousands):
(3) During the six months ended June 30, 2019 and year ended December 31, 2018, there were no material transfers of financial assets or liabilities within the fair value hierarchy.
|
Derivative Financial Instruments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following table summarizes the Company’s outstanding swap contracts at June 30, 2019 (dollars in thousands):
|
Real Estate Transactions - 2019 Real Estate Investments (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Jul. 31, 2019
USD ($)
property
facility
|
Jun. 30, 2019
USD ($)
property
|
May 31, 2019
USD ($)
property
|
Apr. 30, 2019
USD ($)
property
|
Nov. 30, 2018
USD ($)
property
|
Mar. 31, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
property
|
Jun. 30, 2018
USD ($)
|
|
Real Estate [Line Items] | ||||||||
Payments to acquire real estate | $ 21,000 | |||||||
Long-term debt | $ 6,234,984 | $ 6,234,984 | ||||||
Gain (loss) on consolidation | $ 50,000 | $ 11,501 | $ (41,017) | |||||
Life science | Life science facility | ||||||||
Real Estate [Line Items] | ||||||||
Payments to acquire real estate | $ 71,000 | |||||||
Life science | Land | ||||||||
Real Estate [Line Items] | ||||||||
Payments to acquire real estate | $ 27,000 | |||||||
Senior Housing | ||||||||
Real Estate [Line Items] | ||||||||
Payments to acquire outstanding equity interests | $ 24,000 | |||||||
Investment ownership percentage | 100.00% | 100.00% | ||||||
Gain (loss) on consolidation | $ 12,000 | |||||||
Gain on consolidation, tax | 1,000 | |||||||
Senior Housing | Senior Housing | ||||||||
Real Estate [Line Items] | ||||||||
Payments to acquire real estate | $ 113,000 | $ 445,000 | ||||||
Number of properties acquired (in properties) | property | 3 | 9 | ||||||
Subsequent Event | Senior Housing | Senior Housing | ||||||||
Real Estate [Line Items] | ||||||||
Payments to acquire real estate | $ 284,000 | |||||||
Number of properties acquired (in properties) | property | 5 | |||||||
Life science joint ventures | ||||||||
Real Estate [Line Items] | ||||||||
Payments to acquire real estate | $ 245,000 | $ 92,000 | ||||||
Number of properties acquired (in properties) | property | 2 | 4 | ||||||
Investment ownership percentage | 100.00% | |||||||
Medical office | ||||||||
Real Estate [Line Items] | ||||||||
Payments to acquire real estate | $ 15,000 | |||||||
Number of properties acquired (in properties) | property | 1 | |||||||
Mortgage Debt | ||||||||
Real Estate [Line Items] | ||||||||
Long-term debt | $ 154,980 | $ 50,000 | $ 154,980 | |||||
Mortgage Debt | Subsequent Event | ||||||||
Real Estate [Line Items] | ||||||||
Long-term debt | $ 112,000 | |||||||
San Diego | Subsequent Event | Life science | Life science facility | ||||||||
Real Estate [Line Items] | ||||||||
Payments to acquire real estate | 16,000 | |||||||
Boston | Subsequent Event | Life science | Life science facility | ||||||||
Real Estate [Line Items] | ||||||||
Payments to acquire real estate | $ 228,000 | |||||||
Number of properties acquired (in properties) | facility | 4 |
Real Estate Transactions - MSREI MOB JV (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Aug. 31, 2018
USD ($)
property
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Real Estate [Line Items] | |||||
Payments to acquire real estate | $ 21,000 | ||||
Net real estate | $ 11,233,904 | $ 10,209,450 | |||
Intangible assets acquired | $ 86,000 | ||||
MSREI JV | |||||
Real Estate [Line Items] | |||||
Ownership percentage (as a percent) | 51.00% | 51.00% | |||
Proceeds from contribution to a joint venture | $ 298,000 | ||||
Number of properties contributed to joint venture | property | 9 | ||||
Value of contributed properties | $ 320,000 | ||||
Number of properties acquired (in properties) | property | 16 | ||||
Noncontrolling interest in VIE | $ 298,000 | ||||
Greenville Portfolio | MSREI JV | |||||
Real Estate [Line Items] | |||||
Payments to acquire real estate | $ 285,000 | ||||
Lease term | 10 years | ||||
Net real estate | 276,000 | ||||
Intangible assets acquired | $ 20,000 |
Real Estate Transactions - Life Science JV Interest Purchase (Details) $ in Thousands |
1 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019
USD ($)
property
|
Nov. 30, 2018
USD ($)
property
joint_venture
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
|
Real Estate [Line Items] | ||||
Payments to acquire real estate | $ 21,000 | |||
Gain (loss) on consolidation | $ 50,000 | $ 11,501 | $ (41,017) | |
Life science joint ventures | ||||
Real Estate [Line Items] | ||||
Number of joint ventures (in joint ventures) | joint_venture | 3 | |||
Number of properties acquired (in properties) | property | 2 | 4 | ||
Payments to acquire real estate | $ 245,000 | $ 92,000 | ||
Investment ownership percentage | 100.00% |
Real Estate Transactions - 2018 Other Real Estate Investments (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Real Estate [Abstract] | |
Payments to acquire real estate | $ 21 |
Real Estate Transactions - Development Activities (Details) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
property
|
Jun. 30, 2019
USD ($)
|
|
Real Estate [Line Items] | ||
Increase to development commitments | $ | $ 82 | |
Development commitments | $ | $ 382 | $ 382 |
Medical office | ||
Real Estate [Line Items] | ||
Number of properties to be developed (in properties) | property | 3 | |
On-campus | ||
Real Estate [Line Items] | ||
Number of properties to be developed (in properties) | property | 2 |
Real Estate Transactions - Held for Sale (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
property
|
Dec. 31, 2018
USD ($)
property
|
Jun. 30, 2018
property
|
---|---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of properties classified as held for sale (in properties) | property | 13 | ||
Assets held for sale, net | $ | $ 160,999 | $ 108,086 | |
Accumulated depreciation | $ | 2,926,656 | 2,842,947 | |
Held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Assets held for sale, net | $ | $ 161,000 | $ 108,000 | |
Held-for-sale | SHOP | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of properties classified as held for sale (in properties) | property | 20 | 9 | |
Held-for-sale | Medical office | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of properties classified as held for sale (in properties) | property | 6 | ||
Held-for-sale | Senior housing triple-net | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of properties classified as held for sale (in properties) | property | 2 | ||
Held-for-sale | Life science | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of properties classified as held for sale (in properties) | property | 1 | ||
Held-for-sale | Real Estate | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Assets held for sale, net | $ | $ 157,000 | $ 101,000 | |
Accumulated depreciation | $ | $ 87,000 | $ 30,000 |
Real Estate Transactions - 2019 Dispositions (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
facility
|
Mar. 31, 2019
USD ($)
facility
|
Dec. 31, 2018
USD ($)
facility
|
Sep. 30, 2018
USD ($)
facility
|
Jun. 30, 2018
USD ($)
facility
|
Mar. 31, 2018
USD ($)
facility
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
|
Real Estate [Line Items] | ||||||||
Gain (loss) on sales of real estate, net | $ 11,448 | $ 8,000 | $ 95,000 | $ 46,064 | $ 19,492 | $ 66,879 | ||
SHOP | ||||||||
Real Estate [Line Items] | ||||||||
Number of properties disposed (in facilities) | facility | 1 | 9 | 2 | 11 | 8 | 2 | ||
Total consideration for disposal of real estate | $ 14,000 | $ 68,000 | $ 15,000 | $ 76,000 | $ 268,000 | $ 35,000 | ||
Gain (loss) on sales of real estate, net | $ 21,000 | |||||||
Medical office | ||||||||
Real Estate [Line Items] | ||||||||
Number of properties disposed (in facilities) | facility | 5 | 2 | 2 | |||||
Total consideration for disposal of real estate | $ 15,000 | $ 4,000 | $ 21,000 | |||||
Senior housing triple-net | ||||||||
Real Estate [Line Items] | ||||||||
Number of properties disposed (in facilities) | facility | 2 | 2 | ||||||
Total consideration for disposal of real estate | $ 26,000 | $ 35,000 | ||||||
Gain (loss) on sales of real estate, net | $ 25,000 | |||||||
Life science | ||||||||
Real Estate [Line Items] | ||||||||
Number of properties disposed (in facilities) | facility | 4 | |||||||
Total consideration for disposal of real estate | $ 7,000 | $ 269,000 | ||||||
Land | Life science | ||||||||
Real Estate [Line Items] | ||||||||
Number of properties disposed (in facilities) | facility | 1 | 1 | 1 | |||||
Total consideration for disposal of real estate | $ 35,000 | $ 3,000 |
Real Estate Transactions - Shoreline Technology Center (Details) - USD ($) $ in Thousands |
1 Months Ended | 6 Months Ended | |
---|---|---|---|
Nov. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Real Estate [Line Items] | |||
Proceeds from sale of buildings | $ 0 | $ 335,709 | |
Shoreline Technology Center | |||
Real Estate [Line Items] | |||
Proceeds from sale of buildings | $ 1,000,000 | ||
Recognized gain on sale | $ 726,000 |
Real Estate Transactions - RIDEA II Sale Transaction (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jan. 31, 2017 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Mar. 31, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Gain (loss) on sales of real estate | $ 11,448 | $ 8,000 | $ 95,000 | $ 46,064 | $ 19,492 | $ 66,879 | |||
HCP/CPA/Brookdale JV | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Debt instrument provided | $ 602,000 | ||||||||
Debt provided by third-party | 360,000 | ||||||||
Debt provided by entity | 242,000 | ||||||||
Net proceeds from the RIDEA II transaction | $ 480,000 | ||||||||
RIDEA II | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Investment ownership percentage | 40.00% | ||||||||
RIDEA II | HCP/CPA/Brookdale JV | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Investment ownership percentage | 40.00% | ||||||||
Disposed of by Sale | RIDEA II | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Gain (loss) on sales of real estate | $ 99,000 | ||||||||
RIDEA II | HCP/CPA/Brookdale JV | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Debt provided by entity | $ 242,000 | 242,000 | 242,000 | ||||||
Equity method investment ownership interest disposed | 40.00% | ||||||||
Consideration of disposal of equity method investment | $ 91,000 | $ 91,000 | $ 91,000 | ||||||
Proceeds from sale of ownership interest | $ 332,000 |
Real Estate Transactions - U.K. Portfolio (Details) $ in Thousands, £ in Millions |
1 Months Ended | ||||
---|---|---|---|---|---|
Aug. 31, 2018
GBP (£)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Jun. 30, 2018
GBP (£)
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Value of U.K. Portfolio | $ 13,713,093 | $ 12,718,553 | |||
Disposed of by Sale | U.K. Portfolio | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Ownership interest percentage selling | 51.00% | ||||
Value of U.K. Portfolio | $ 507,000 | £ 382 | |||
Proceeds from divestiture of interest in joint venture | 402,000 | ||||
Gain on disposal of interest in joint venture | 11,000 | ||||
Cumulative foreign currency translation reclassification from OCI | $ 17,000 | ||||
U.K. Portfolio | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Percentage of noncontrolling interest in the joint venture | 49.00% | 49.00% | |||
Fair value of investment | $ 105,000 | ||||
Development loan to MMCG | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from sale of development loan receivables | £ | £ 11 |
Real Estate Transactions - 2018 Other Dispositions (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
facility
|
Mar. 31, 2019
USD ($)
facility
|
Dec. 31, 2018
USD ($)
property
facility
|
Sep. 30, 2018
USD ($)
facility
|
Jun. 30, 2018
USD ($)
facility
|
Mar. 31, 2018
USD ($)
facility
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
property
|
Nov. 30, 2017
property
|
|
Real Estate [Line Items] | ||||||||||
Gain (loss) on sales of real estate | $ 11,448 | $ 8,000 | $ 95,000 | $ 46,064 | $ 19,492 | $ 66,879 | ||||
Proceeds from sale of buildings | $ 0 | $ 335,709 | ||||||||
SHOP | ||||||||||
Real Estate [Line Items] | ||||||||||
Number of properties disposed (in facilities) | facility | 1 | 9 | 2 | 11 | 8 | 2 | ||||
Total consideration for disposal of real estate | $ 14,000 | $ 68,000 | $ 15,000 | $ 76,000 | $ 268,000 | $ 35,000 | ||||
Gain (loss) on sales of real estate | $ 21,000 | |||||||||
Medical office | ||||||||||
Real Estate [Line Items] | ||||||||||
Number of properties disposed (in facilities) | facility | 5 | 2 | 2 | |||||||
Total consideration for disposal of real estate | $ 15,000 | $ 4,000 | $ 21,000 | |||||||
Senior housing triple-net | ||||||||||
Real Estate [Line Items] | ||||||||||
Number of properties disposed (in facilities) | facility | 2 | 2 | ||||||||
Total consideration for disposal of real estate | $ 26,000 | $ 35,000 | ||||||||
Gain (loss) on sales of real estate | $ 25,000 | |||||||||
Life science | ||||||||||
Real Estate [Line Items] | ||||||||||
Number of properties disposed (in facilities) | facility | 4 | |||||||||
Total consideration for disposal of real estate | $ 7,000 | $ 269,000 | ||||||||
Land | Life science | ||||||||||
Real Estate [Line Items] | ||||||||||
Number of properties disposed (in facilities) | facility | 1 | 1 | 1 | |||||||
Total consideration for disposal of real estate | $ 35,000 | $ 3,000 | ||||||||
Brookedale MTCA | ||||||||||
Real Estate [Line Items] | ||||||||||
Number of assets to be sold (in properties) | property | 19 | 19 | ||||||||
Assets Leased to Others | Brookedale MTCA | ||||||||||
Real Estate [Line Items] | ||||||||||
Gain (loss) on sales of real estate | $ 40,000 | |||||||||
Proceeds from sale of buildings | $ 377,000 | |||||||||
Assets Leased to Others | Brookedale MTCA | SHOP | ||||||||||
Real Estate [Line Items] | ||||||||||
Number of assets to be sold (in properties) | property | 4 |
Real Estate Transactions - Impairments of Real Estate (Details) $ / item in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
property
$ / item
|
Mar. 31, 2019
USD ($)
property
|
Jun. 30, 2018
USD ($)
property
|
Jun. 30, 2019
USD ($)
$ / item
|
Jun. 30, 2018
USD ($)
property
|
Dec. 31, 2018
USD ($)
|
|
Real Estate [Line Items] | ||||||
Impairments (recoveries), net | $ 59,000 | $ 77,396 | $ 13,912 | |||
Real estate carrying value | 164,000 | 164,000 | ||||
Casualty-related loss (recoveries), net | 6,000 | 6,579 | $ 0 | |||
Deferred tax liabilities, deferred expense | $ 300 | 300 | ||||
Number of properties classified as held for sale (in properties) | property | 13 | 13 | ||||
Senior housing triple-net | ||||||
Real Estate [Line Items] | ||||||
Number of real estate properties impaired (in properties) | property | 2 | |||||
Senior Housing | ||||||
Real Estate [Line Items] | ||||||
Number of real estate properties impaired (in properties) | property | 14 | |||||
Medical office | ||||||
Real Estate [Line Items] | ||||||
Number of real estate properties impaired (in properties) | property | 1 | 2 | ||||
Impairments (recoveries), net | $ 9,000 | |||||
Medical office and senior housing | ||||||
Real Estate [Line Items] | ||||||
Selling expense | $ 105,000 | $ 105,000 | ||||
SHOP | ||||||
Real Estate [Line Items] | ||||||
Impairments (recoveries), net | $ 10,000 | |||||
Properties classified as held for sale (in properties) | property | 2 | |||||
Impairment of real estate | $ 14,000 | |||||
Minimum | ||||||
Real Estate [Line Items] | ||||||
Impairment test, market capitalization rate | 4.97% | 4.97% | ||||
Impairment calculation, price per unit | $ / item | 52 | 52 | ||||
Maximum | ||||||
Real Estate [Line Items] | ||||||
Impairment test, market capitalization rate | 6.64% | 6.64% | ||||
Impairment calculation, price per unit | $ / item | 90 | 90 | ||||
Weighted Average | ||||||
Real Estate [Line Items] | ||||||
Impairment test, market capitalization rate | 5.41% | 5.41% | ||||
Impairment calculation, price per unit | $ / item | 62 | 62 |
Real Estate Transactions - Brookedale MTCA Transactions (Details) $ in Millions |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Nov. 30, 2017
USD ($)
property
facility
|
Dec. 31, 2018
property
|
Jan. 01, 2018
USD ($)
property
|
|
Real Estate [Line Items] | |||||
Percentage of interest acquired | 10.00% | ||||
Consideration transferred | $ | $ 95 | ||||
Payment to acquired noncontrolling interest | $ | $ 63 | $ 32 | |||
Brookedale MTCA | |||||
Real Estate [Line Items] | |||||
Number of assets to be sold (in properties) | 19 | ||||
RIDEA Facilities | |||||
Real Estate [Line Items] | |||||
Ownership percentage (as a percent) | 90.00% | ||||
Assets Leased to Others | |||||
Real Estate [Line Items] | |||||
Number of assets transitioned | 37 | ||||
Assets Leased to Others | RIDEA Facilities | |||||
Real Estate [Line Items] | |||||
Property count (in properties) | 58 | ||||
Senior housing triple-net | Assets Leased to Others | |||||
Real Estate [Line Items] | |||||
Property count (in properties) | 78 | ||||
Disposition of properties, available for sale (in properties) | 32 | ||||
Reduction in rent | $ | $ 5 | ||||
Number of properties with rent concessions | 3 | ||||
Total consideration for disposition of real estate | $ | $ 35 | ||||
Number of assets transitioned | 17 | ||||
Senior housing triple-net | Assets Leased to Others | Brookedale MTCA | |||||
Real Estate [Line Items] | |||||
Number of properties acquired (in properties) | facility | 2 | ||||
SHOP | Assets Leased to Others | |||||
Real Estate [Line Items] | |||||
Number of assets transitioned | 20 | ||||
SHOP | Assets Leased to Others | Brookedale MTCA | |||||
Real Estate [Line Items] | |||||
Number of assets to be sold (in properties) | 4 | ||||
SHOP | Assets Leased to Others | RIDEA Facilities | |||||
Real Estate [Line Items] | |||||
Property count (in properties) | 36 | ||||
Total consideration for disposition of real estate | $ | $ 240 |
Leases - Lease Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Interest and Other Income [Abstract] | ||||
Fixed income from operating leases | $ 237,607 | $ 262,885 | $ 474,830 | $ 526,240 |
Variable income from operating leases | 63,590 | 54,955 | 120,589 | 108,352 |
Interest income from direct financing leases | $ 10,190 | $ 13,490 | $ 23,714 | $ 26,756 |
Leases - Direct Financing Leases (Details) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
property
facility
|
Mar. 31, 2019
USD ($)
property
|
Jun. 30, 2019
USD ($)
property
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
property
|
|
Lessor, Lease, Description [Line Items] | |||||
Present value of minimum lease payments receivable | $ 264,277,000 | $ 264,277,000 | |||
Present value of estimated residual value | 114,364,000 | 114,364,000 | |||
Less deferred selling profits | (11,390,000) | (11,390,000) | |||
Net investment in direct financing leases before allowance | 367,251,000 | 367,251,000 | |||
Allowance for direct financing lease losses | (10,147,000) | (10,147,000) | |||
Net investment in direct financing leases before allowance | $ 357,104,000 | $ 357,104,000 | |||
Percentage of DFL Portfolio | 100.00% | 100.00% | |||
Minimum lease payments receivable | $ 1,013,976,000 | ||||
Estimated residual value | 507,484,000 | ||||
Less deferred selling profits | (807,642,000) | ||||
Net investment in direct financing leases | $ 713,818,000 | ||||
Properties subject to direct financing leases (in properties) | property | 15 | 15 | 29 | ||
Conversion of DFLs to real estate | $ 350,540,000 | $ 0 | |||
Intangible assets, net | $ 317,960,000 | 317,960,000 | $ 305,079,000 | ||
Impairments (recoveries), net | 59,000,000 | 77,396,000 | $ 13,912,000 | ||
Senior housing triple-net | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | $ 272,500,000 | $ 272,500,000 | |||
Percentage of DFL Portfolio | 76.00% | 76.00% | |||
SHOP | |||||
Lessor, Lease, Description [Line Items] | |||||
Number of leases disposed of (in facilities) | facility | 13 | ||||
Proceeds from sale of lease receivable | $ 274,000,000 | ||||
Impairments (recoveries), net | 10,000,000 | ||||
Other non-reportable segments | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | $ 84,604,000 | $ 84,604,000 | |||
Percentage of DFL Portfolio | 24.00% | 24.00% | |||
Performing Loans | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | $ 357,104,000 | $ 357,104,000 | |||
Performing Loans | Senior housing triple-net | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | 272,500,000 | 272,500,000 | |||
Performing Loans | Other non-reportable segments | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | 84,604,000 | 84,604,000 | |||
Watch List DFLs | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | 0 | 0 | |||
Watch List DFLs | Senior housing triple-net | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | 0 | 0 | |||
Watch List DFLs | Other non-reportable segments | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | 0 | 0 | |||
Workout Loans | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | 0 | 0 | |||
Workout Loans | Senior housing triple-net | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | 0 | 0 | |||
Workout Loans | Other non-reportable segments | |||||
Lessor, Lease, Description [Line Items] | |||||
Net investment in direct financing leases before allowance | $ 0 | $ 0 | |||
DFL Portfolio | Watch List DFLs | Senior housing triple-net | |||||
Lessor, Lease, Description [Line Items] | |||||
Properties with derecognized carrying value during the period (in properties) | property | 14 | ||||
Conversion of DFLs to real estate | $ 351,000,000 | ||||
DFL Portfolio | Watch List DFLs | SHOP | |||||
Lessor, Lease, Description [Line Items] | |||||
Properties subject to direct financing leases (in properties) | property | 14 | ||||
Gain (loss) on recognition of lease | $ 0 | ||||
Real Estate Investment | DFL Portfolio | Watch List DFLs | Senior housing triple-net | |||||
Lessor, Lease, Description [Line Items] | |||||
Real estate investment property | 331,000,000 | ||||
Intangible assets | DFL Portfolio | Watch List DFLs | Senior housing triple-net | |||||
Lessor, Lease, Description [Line Items] | |||||
Intangible assets, net | $ 20,000,000 |
Leases - Direct Financing Lease Sale (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Leases [Abstract] | ||||
Income from DFLs | $ 6,013 | $ 5,782 | $ 11,875 | $ 11,552 |
Cash payments received | $ 5,758 | $ 4,838 | $ 10,593 | $ 9,484 |
Leases - Future Minimum Rents, DFLs (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Leases [Abstract] | ||
2019 (six months) | $ 19,577 | |
2019 | $ 114,970 | |
2020 | 32,558 | 63,308 |
2021 | 31,989 | 63,687 |
2022 | 25,346 | 58,135 |
2023 | 24,774 | 58,570 |
2024 | 25,393 | |
Thereafter | 390,893 | 655,306 |
Lease payments receivable | 550,530 | $ 1,013,976 |
Less: imputed interest | (286,253) | |
Present value of minimum lease payments receivable | $ 264,277 |
Leases - Future Minimum Rents (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Leases [Abstract] | ||
2019 (six months) | $ 480,607 | |
2020 | 947,697 | |
2021 | 889,007 | |
2022 | 788,835 | |
2023 | 714,922 | |
2024 | 620,603 | |
Thereafter | 2,024,028 | |
Total | $ 6,465,699 | |
2019 | $ 971,417 | |
2020 | 928,102 | |
2021 | 853,451 | |
2022 | 751,972 | |
2023 | 675,537 | |
Thereafter | 2,320,847 | |
Total | $ 6,501,326 |
Leases - Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Real Estate [Abstract] | ||||
Total lease expense | $ 4,117 | $ 3,578 | $ 7,996 | $ 7,225 |
Operating cash flows for operating leases | 6,235 | 5,723 | ||
ROU asset obtained in exchange for new lease liability, operating leases | $ 4,084 | $ 0 | ||
Weighted average remaining lease term, operating leases | 51 years | 51 years | ||
Weighted average discount rate, operating leases | 4.36% | 4.36% |
Leases - Future Lease Obligations (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Leases [Abstract] | ||
2019 (six months) | $ 4,781 | |
2020 | 8,934 | |
2021 | 8,568 | |
2022 | 8,228 | |
2023 | 7,915 | |
2024 | 6,761 | |
Thereafter | 448,712 | |
Less: imputed interest | 493,899 | |
Less: imputed interest | (339,022) | |
Present value of lease liabilities | $ 154,877 | |
2019 | $ 5,597 | |
2020 | 5,687 | |
2021 | 5,776 | |
2022 | 5,862 | |
2023 | 5,983 | |
Thereafter | 466,130 | |
Total | $ 495,035 |
Leases - Depreciation Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
General and Administrative Expense | |||||
Real Estate [Line Items] | |||||
Depreciation expense related to corporate assets | $ 0.4 | $ 0.2 | |||
Other Assets | |||||
Real Estate [Line Items] | |||||
Accumulated depreciation related to corporate assets | $ 3.0 | $ 3.0 | $ 2.0 | ||
Corporate Assets | |||||
Real Estate [Line Items] | |||||
Depreciation expense related to corporate assets | $ 0.9 | $ 0.4 |
Loans Receivable - Schedule of Loans Receivable (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Loans Receivable: | ||
Mezzanine | $ 25,886 | $ 21,013 |
Participating development loans and other | 98,704 | 42,037 |
Unamortized discounts, fees and costs | (31) | (52) |
Loans receivable, net | 124,559 | 62,998 |
Remaining loans receivable commitments | 31,000 | |
Loans receivable commitments | 115,000 | |
Real Estate Secured | ||
Loans Receivable: | ||
Mezzanine | 0 | 0 |
Participating development loans and other | 98,704 | 42,037 |
Unamortized discounts, fees and costs | 0 | 0 |
Loans receivable, net | 98,704 | 42,037 |
Other Secured | ||
Loans Receivable: | ||
Mezzanine | 25,886 | 21,013 |
Participating development loans and other | 0 | 0 |
Unamortized discounts, fees and costs | (31) | (52) |
Loans receivable, net | $ 25,855 | $ 20,961 |
Loans Receivable - Schedule of Loans Receivable Internal Ratings (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Percentage of Loan Portfolio | 100.00% | |
Loans receivable, net | $ 124,559 | $ 62,998 |
Performing Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net | 124,559 | |
Watch List Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net | 0 | |
Workout Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net | $ 0 | |
Real Estate Secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Percentage of Loan Portfolio | 79.00% | |
Loans receivable, net | $ 98,704 | 42,037 |
Real Estate Secured | Performing Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net | 98,704 | |
Real Estate Secured | Watch List Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net | 0 | |
Real Estate Secured | Workout Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net | $ 0 | |
Other Secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Percentage of Loan Portfolio | 21.00% | |
Loans receivable, net | $ 25,855 | $ 20,961 |
Other Secured | Performing Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net | 25,855 | |
Other Secured | Watch List Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net | 0 | |
Other Secured | Workout Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net | $ 0 |
Loans Receivable - Narrative (Details) $ in Thousands, £ in Millions |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018
property
|
Mar. 31, 2018
USD ($)
property
|
Mar. 31, 2018
GBP (£)
property
|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2018
GBP (£)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2016
USD ($)
property
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2016
GBP (£)
property
|
|
Loans Receivable: | ||||||||||
Loans receivable, net | $ | $ 124,559 | $ 62,998 | ||||||||
Notes reduction due to call option exercised | $ | $ 0 | $ 147,474 | ||||||||
MMCG | ||||||||||
Loans Receivable: | ||||||||||
Loss from initial consolidation of VIE | $ 41,000 | £ 29 | ||||||||
Bridge Loan | MMCG | ||||||||||
Loans Receivable: | ||||||||||
Loans receivable, net | $ 131,000 | £ 105 | ||||||||
Period of call-option retained | 3 years | |||||||||
Number of properties in a purchase option (in properties) | property | 7 | 7 | ||||||||
Number of properties acquired in a purchase option | property | 7 | 7 | 7 | |||||||
Notes reduction due to call option exercised | £ | £ 105 | |||||||||
Loss from initial consolidation of VIE | $ 41,000 | £ 29 |
Investments in and Advances to Unconsolidated Joint Ventures (Details) $ in Thousands |
1 Months Ended | |
---|---|---|
Jun. 30, 2019
USD ($)
property
joint_venture
|
Dec. 31, 2018
USD ($)
joint_venture
|
|
Schedule of Equity Method Investments [Line Items] | ||
Investments in and advances to unconsolidated joint ventures | $ 518,033 | $ 540,088 |
CCRC JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Property count (in properties) | property | 15 | |
Investment ownership percentage | 49.00% | |
Investments in and advances to unconsolidated joint ventures | $ 349,732 | 365,764 |
UK JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Property count (in properties) | property | 68 | |
Investment ownership percentage | 49.00% | |
Investments in and advances to unconsolidated joint ventures | $ 100,581 | 101,735 |
MBK JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Property count (in properties) | property | 5 | |
Investment ownership percentage | 50.00% | |
Investments in and advances to unconsolidated joint ventures | $ 34,317 | 35,435 |
Other SHOP JVs | ||
Schedule of Equity Method Investments [Line Items] | ||
Property count (in properties) | property | 4 | |
Investments in and advances to unconsolidated joint ventures | $ 21,929 | 25,493 |
Other SHOP JVs | Minimum | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 41.00% | |
Other SHOP JVs | Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 90.00% | |
Waldwick | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 85.00% | |
Otay Ranch | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 90.00% | |
MBK Development JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 50.00% | |
Discovery Naples JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 41.00% | |
Investment return percentage | 10.00% | |
Medical Office JVs | ||
Schedule of Equity Method Investments [Line Items] | ||
Property count (in properties) | property | 3 | |
Investments in and advances to unconsolidated joint ventures | $ 9,963 | 10,160 |
Number of unconsolidated joint ventures (in joint ventures) | joint_venture | 3 | |
Medical Office JVs | Minimum | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 20.00% | |
Medical Office JVs | Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 67.00% | |
HCP Ventures IV, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 20.00% | |
HCP Ventures III, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 30.00% | |
Suburban Properties, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment ownership percentage | 67.00% | |
K&Y JVs | ||
Schedule of Equity Method Investments [Line Items] | ||
Property count (in properties) | property | 3 | |
Investment ownership percentage | 80.00% | |
Investments in and advances to unconsolidated joint ventures | $ 1,496 | $ 1,430 |
Number of unconsolidated joint ventures (in joint ventures) | joint_venture | 2 | 3 |
Advances to unconsolidated joint ventures, net | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in and advances to unconsolidated joint ventures | $ 15 | $ 71 |
Intangibles - Intangibles Lease Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Intangibles | ||
Gross intangible lease assets | $ 555,150 | $ 556,114 |
Accumulated depreciation and amortization | (237,190) | (251,035) |
Intangible assets, net | $ 317,960 | $ 305,079 |
Intangibles - Intangibles Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Intangibles | ||
Gross intangible lease liabilities | $ 88,892 | $ 94,444 |
Accumulated depreciation and amortization | (35,121) | (39,781) |
Intangible liabilities, net | $ 53,771 | $ 54,663 |
Intangibles - Additional Information (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|
Intangibles [Abstract] | |||
Intangible assets acquired | $ 86,000 | ||
Intangible liabilities acquired | $ 8,000 | ||
Acquired intangible assets acquired, weighted average useful life | 2 years | ||
Acquired intangible liabilities acquired, weighted average useful life | 5 years | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Intangible assets, net | $ (317,960) | $ (305,079) | |
Intangible liabilities, net | $ (53,771) | $ (54,663) | |
Accounting Standards Update 2016-12 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Intangible assets, net | $ 39,000 | ||
Intangible liabilities, net | $ 6,000 |
Debt - Bank Line of Credit and Term Loan (Details) £ in Millions |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
May 23, 2019
USD ($)
renewal_option
|
Jul. 03, 2018
USD ($)
|
Jul. 03, 2018
GBP (£)
|
Nov. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
GBP (£)
|
May 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Debt Instrument | |||||||||||
Loss on debt extinguishments | $ (1,135,000) | $ 0 | $ (1,135,000) | $ 0 | |||||||
Bank line of credit | 530,004,000 | 530,004,000 | $ 80,103,000 | ||||||||
Repayment under bank line of credit | 890,000,000 | $ 923,164,000 | |||||||||
Term loan | $ 0 | $ 248,821,000 | $ 248,821,000 | $ 0 | |||||||
2015 Term Loan | |||||||||||
Debt Instrument | |||||||||||
Repayment under bank line of credit | £ | £ 169 | ||||||||||
Repayments of debt | $ 224,000,000 | ||||||||||
2018 term loan | |||||||||||
Debt Instrument | |||||||||||
Issuance and borrowings of debt, excluding bank line of credit | $ 224,000,000 | ||||||||||
Line of Credit and Term Loan | |||||||||||
Debt Instrument | |||||||||||
Debt instrument, covenant debt to assets (as a percent) | 60.00% | 60.00% | 60.00% | ||||||||
Debt instrument, covenant secured debt to assets (as a percent) | 40.00% | 40.00% | 40.00% | ||||||||
Debt instrument, covenant unsecured debt to unencumbered assets (as a percent) | 60.00% | 60.00% | 60.00% | ||||||||
Debt instrument, covenant minimum fixed charge coverage ratio | 1.5 | 1.5 | 1.5 | ||||||||
Debt instrument, covenant net worth | $ 7,000,000,000.0 | $ 7,000,000,000.0 | |||||||||
Bank Line of Credit | Revolving Credit Facility | |||||||||||
Debt Instrument | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 2,500,000,000 | ||||||||||
Number of extensions | renewal_option | 2 | ||||||||||
Length of debt instrument extension period | 6 months | ||||||||||
Debt instrument, facility fee (as a percent) | 0.15% | ||||||||||
Line of credit facility additional aggregate amount, maximum | $ 750,000,000 | ||||||||||
Bank line of credit | 530,000,000 | 530,000,000 | |||||||||
Debt denominated in foreign currency outstanding | $ 70,000,000 | $ 70,000,000 | £ 55 | ||||||||
Weighted-average interest rate (as a percent) | 3.29% | 3.29% | 3.29% | ||||||||
Bank Line of Credit | Revolving Credit Facility | LIBOR | |||||||||||
Debt Instrument | |||||||||||
Debt instrument, basis spread on variable rate (as a percent) | 0.825% | ||||||||||
Bank Line of Credit | 2019 Term Loan | |||||||||||
Debt Instrument | |||||||||||
Weighted-average interest rate (as a percent) | 3.38% | 3.38% | 3.38% | ||||||||
Face amount | $ 250,000,000 | ||||||||||
Bank Line of Credit | 2019 Term Loan | LIBOR | |||||||||||
Debt Instrument | |||||||||||
Debt instrument, basis spread on variable rate (as a percent) | 0.90% |
Debt - Senior Unsecured Notes (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Nov. 08, 2018 |
Jul. 16, 2018 |
Jul. 31, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Debt Instrument | ||||||||
Principal balance on debt | $ 6,234,984,000 | $ 6,234,984,000 | ||||||
Senior unsecured notes | 5,262,694,000 | 5,262,694,000 | $ 5,258,550,000 | |||||
Loss on extinguishment of debt | 1,135,000 | $ 0 | 1,135,000 | $ 0 | ||||
Senior Unsecured Note | ||||||||
Debt Instrument | ||||||||
Principal balance on debt | 5,300,000,000 | 5,300,000,000 | ||||||
Senior unsecured notes | 0 | 0 | $ 0 | |||||
Senior Unsecured Note | 2026 Notes | ||||||||
Debt Instrument | ||||||||
Face amount | $ 650,000,000 | $ 650,000,000 | ||||||
Percentage of stated interest rate | 3.25% | 3.25% | ||||||
Senior Unsecured Note | 2029 Notes | ||||||||
Debt Instrument | ||||||||
Face amount | $ 650,000,000 | $ 650,000,000 | ||||||
Percentage of stated interest rate | 3.50% | 3.50% | ||||||
Senior Unsecured Note | 2020 Notes | ||||||||
Debt Instrument | ||||||||
Face amount | $ 800,000,000 | $ 800,000,000 | ||||||
Percentage of stated interest rate | 2.625% | 2.625% | ||||||
Senior Unsecured Note | 2023 Notes | ||||||||
Debt Instrument | ||||||||
Face amount | $ 250,000,000 | $ 250,000,000 | ||||||
Percentage of stated interest rate | 4.25% | 4.25% | ||||||
Senior Unsecured Note | 2022 Notes | ||||||||
Debt Instrument | ||||||||
Face amount | $ 250,000,000 | $ 250,000,000 | ||||||
Percentage of stated interest rate | 4.00% | 4.00% | ||||||
Senior Unsecured Note | Unsecured Note 5.375% | ||||||||
Debt Instrument | ||||||||
Percentage of stated interest rate | 5.375% | |||||||
Loss on extinguishment of debt | $ 44,000,000 | |||||||
Repayment of senior unsecured notes | $ 700,000,000 | |||||||
Senior Unsecured Note | Unsecured Debt 3.750% | ||||||||
Debt Instrument | ||||||||
Percentage of stated interest rate | 3.75% | |||||||
Repayment of senior unsecured notes | $ 450,000,000 | |||||||
Subsequent Event | Senior Unsecured Note | Senior Notes Due 2020, 2022, and 2023 | ||||||||
Debt Instrument | ||||||||
Loss on extinguishment of debt | $ (35,000,000) |
Debt - Debt Maturities (Details) $ in Thousands, £ in Millions |
1 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 31, 2019
USD ($)
property
|
May 31, 2019
USD ($)
property
|
Apr. 30, 2019
property
|
Jun. 30, 2019
USD ($)
facility
|
Jun. 30, 2019
GBP (£)
facility
|
Dec. 31, 2018
USD ($)
|
|
Debt Instrument | ||||||
2019 (six months) | $ 1,456 | |||||
2020 | 803,046 | |||||
2021 | 10,679 | |||||
2022 | 902,694 | |||||
2023 | 1,332,830 | |||||
Thereafter | 3,184,279 | |||||
Total debt before discount, net | 6,234,984 | |||||
(Discounts), premiums and debt costs, net | (31,636) | |||||
Long-term debt, net assets held for sale | 6,203,348 | |||||
Long-term debt | 6,231,752 | |||||
Other debt | 87,211 | $ 90,785 | ||||
Bank Line of Credit | ||||||
Debt Instrument | ||||||
2019 (six months) | 0 | |||||
2020 | 0 | |||||
2021 | 0 | |||||
2022 | 0 | |||||
2023 | 530,004 | |||||
Thereafter | 0 | |||||
Total debt before discount, net | 530,004 | |||||
(Discounts), premiums and debt costs, net | 0 | |||||
Long-term debt, net assets held for sale | 530,004 | |||||
Long-term debt | 530,004 | |||||
Term loans | ||||||
Debt Instrument | ||||||
2019 (six months) | 0 | |||||
2020 | 0 | |||||
2021 | 0 | |||||
2022 | 0 | |||||
2023 | 0 | |||||
Thereafter | 250,000 | |||||
Total debt before discount, net | 250,000 | |||||
(Discounts), premiums and debt costs, net | (1,179) | |||||
Long-term debt, net assets held for sale | 248,821 | |||||
Long-term debt | $ 248,821 | |||||
Weighted-average interest rate (as a percent) | 4.03% | 4.03% | ||||
Weighted-average maturity | 5 years | |||||
Term loans | Minimum | ||||||
Debt Instrument | ||||||
Percentage of stated interest rate | 2.79% | 2.79% | ||||
Term loans | Maximum | ||||||
Debt Instrument | ||||||
Percentage of stated interest rate | 6.87% | 6.87% | ||||
Senior Unsecured Note | ||||||
Debt Instrument | ||||||
2019 (six months) | $ 0 | |||||
2020 | 800,000 | |||||
2021 | 0 | |||||
2022 | 900,000 | |||||
2023 | 800,000 | |||||
Thereafter | 2,800,000 | |||||
Total debt before discount, net | 5,300,000 | |||||
(Discounts), premiums and debt costs, net | (37,306) | |||||
Long-term debt, net assets held for sale | 5,262,694 | |||||
Long-term debt | $ 5,262,694 | |||||
Mortgage Debt | ||||||
Debt Instrument | ||||||
Number of healthcare facilities used to secure debt (in facilities) | facility | 15 | 15 | ||||
Debt instrument, collateral, healthcare facilities carrying value | $ 305,000 | |||||
2019 (six months) | 1,456 | |||||
2020 | 3,046 | |||||
2021 | 10,679 | |||||
2022 | 2,694 | |||||
2023 | 2,826 | |||||
Thereafter | 134,279 | |||||
Total debt before discount, net | $ 50,000 | 154,980 | ||||
(Discounts), premiums and debt costs, net | 6,849 | |||||
Long-term debt, net assets held for sale | 161,829 | |||||
Long-term debt | $ 190,233 | |||||
Weighted-average interest rate (as a percent) | 4.13% | 4.13% | ||||
Weighted-average maturity | 14 years | |||||
Mortgage Debt | Minimum | ||||||
Debt Instrument | ||||||
Percentage of stated interest rate | 2.52% | 2.52% | ||||
Mortgage Debt | Maximum | ||||||
Debt Instrument | ||||||
Percentage of stated interest rate | 5.91% | 5.91% | ||||
Revolving Credit Facility | Bank Line of Credit | ||||||
Debt Instrument | ||||||
Debt denominated in foreign currency outstanding | $ 70,000 | £ 55 | ||||
Weighted-average interest rate (as a percent) | 3.29% | 3.29% | ||||
Held-for-sale | Bank Line of Credit | ||||||
Debt Instrument | ||||||
Weighted-average interest rate (as a percent) | 3.45% | 3.45% | ||||
Held-for-sale | ||||||
Debt Instrument | ||||||
Debt on assets held for sale | $ 28,404 | |||||
Held-for-sale | Bank Line of Credit | ||||||
Debt Instrument | ||||||
Debt on assets held for sale | 0 | |||||
Held-for-sale | Term loans | ||||||
Debt Instrument | ||||||
Debt on assets held for sale | 0 | |||||
Held-for-sale | Senior Unsecured Note | ||||||
Debt Instrument | ||||||
Debt on assets held for sale | 0 | |||||
Held-for-sale | Mortgage Debt | ||||||
Debt Instrument | ||||||
Debt on assets held for sale | $ 28,404 | |||||
Subsequent Event | Term loans | ||||||
Debt Instrument | ||||||
Weighted-average interest rate (as a percent) | 4.07% | |||||
Weighted-average maturity | 7 years | |||||
Subsequent Event | Mortgage Debt | ||||||
Debt Instrument | ||||||
Total debt before discount, net | $ 112,000 | |||||
Senior Housing | Senior Housing | ||||||
Debt Instrument | ||||||
Number of properties acquired (in properties) | property | 3 | 9 | ||||
Senior Housing | Senior Housing | Subsequent Event | ||||||
Debt Instrument | ||||||
Number of properties acquired (in properties) | property | 5 |
Commitments and Contingencies (Details) |
Jun. 30, 2019
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingency accrual | $ 0 |
Equity - Additional Information (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|---|
Aug. 01, 2019 |
Feb. 28, 2019 |
Dec. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Class of Stock [Line Items] | ||||||||
Issuance of common stock, net | $ 405,281,000 | $ 659,000 | $ 406,813,000 | $ 3,433,000 | ||||
Maximum shares issuable under forward equity sales agreement (in shares) | 13,750,000 | 13,750,000.00 | ||||||
Forward equity sales agreement, initial net price (in usd per share) | $ 31.84 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of common stock, net (in shares) | 5,900,000 | 5,900,000 | ||||||
Issuance of common stock, net | $ 189,000,000 | $ 189,000,000 | ||||||
At-The-Market Program 2018 | ||||||||
Class of Stock [Line Items] | ||||||||
ATM aggregate amount authorized | $ 1,000,000,000.0 | |||||||
Issuance of common stock, net (in shares) | 5,400,000 | |||||||
Weighted average net price (in usd per share) | $ 28.27 | $ 28.27 | ||||||
Issuance of common stock, net | $ 171,000,000 | |||||||
Remainder outstanding (in shares) | 8,100,000 | 8,100,000 | ||||||
Proceeds from issuance of common stock | $ 154,000,000 | |||||||
Share settlement (in shares) | 5,500,000 | 5,500,000 | ||||||
At-The-Market Program 2019 | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of common stock, net | $ 189,000,000 | |||||||
Forward equity sales agreement, initial net price (in usd per share) | $ 30.91 | |||||||
Forward Equity Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of common stock, net (in shares) | 1,500,000 | 1,500,000 | ||||||
ATM aggregate amount remaining | $ 378,000,000 | |||||||
Weighted average net price (in usd per share) | $ 28.11 | $ 28.11 | ||||||
Issuance of common stock, net | $ 42,000,000 | |||||||
Forward rate, remainder outstanding (in usd per share) | $ 31.35 | $ 31.35 | ||||||
Remainder outstanding (in shares) | 13,750,000 | 13,750,000 | ||||||
Maximum shares issuable under forward equity sales agreement (in shares) | 15,250,000 | 13,600,000.0 | 13,600,000 | |||||
Forward equity sales agreement, initial net price (in usd per share) | $ 28.60 | $ 30.91 | $ 31.24 | |||||
Option indexed to issuers equity, term | 1 year | 1 year | ||||||
Forward Equity Offering | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of common stock, net (in shares) | 2,000,000 | |||||||
Weighted average net price (in usd per share) | $ 28.60 | $ 28.60 | ||||||
Proceeds from issuance of common stock | $ 57,000,000 | |||||||
Subsequent Event | Forward Equity Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Maximum shares issuable under forward equity sales agreement (in shares) | 1,200,000 | |||||||
Forward equity sales agreement, initial net price (in usd per share) | $ 31.10 | |||||||
Option indexed to issuers equity, term | 1 year |
Equity - AOCI (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Accumulated Other Comprehensive Loss | ||
Cumulative foreign currency translation adjustment | $ (1,766) | $ (1,683) |
Unrealized gains (losses) on derivatives, net | (272) | (467) |
Supplemental Executive Retirement plan minimum liability and other | (2,421) | (2,558) |
Total accumulated other comprehensive income (loss) | $ (4,459) | $ (4,708) |
Segment Disclosures - Summary Information for the Reportable Segments (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
facility
|
Mar. 31, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
facility
|
Mar. 31, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
facility
|
Jun. 30, 2018
USD ($)
facility
|
|
Segment reporting information, revenues | |||||||
Rental revenues | $ 489,153 | $ 468,104 | $ 923,594 | $ 940,936 | |||
Operating expenses | (213,993) | (173,866) | (382,920) | (346,418) | |||
Segment NOI | 275,160 | 294,238 | 540,674 | 594,518 | |||
Adjustments to NOI | (2,950) | (3,662) | (5,288) | (13,349) | |||
Adjusted NOI | 272,210 | 290,576 | 535,386 | 581,169 | |||
Addback adjustments | 2,950 | 3,662 | 5,288 | 13,349 | |||
Interest income | 2,414 | 1,447 | 4,127 | 7,812 | |||
Interest expense | (56,942) | (73,038) | (106,269) | (148,140) | |||
Depreciation and amortization | (165,296) | (143,292) | (297,247) | (286,542) | |||
General and administrative | (27,120) | (22,514) | (48,475) | (51,689) | |||
Transaction costs | (1,337) | (2,404) | (5,855) | (4,599) | |||
Recoveries (impairments), net | (68,538) | (13,912) | (77,396) | (13,912) | |||
Gain (loss) on sales of real estate, net | 11,448 | $ 8,000 | $ 95,000 | 46,064 | 19,492 | 66,879 | |
Other income (expense), net | 21,008 | 1,786 | 24,141 | (38,621) | |||
Income tax benefit (expense) | 1,864 | 4,654 | 5,322 | 9,990 | |||
Equity income (loss) from unconsolidated joint ventures | (1,506) | (101) | (2,369) | 469 | |||
Net income (loss) | (9,980) | 92,928 | 55,010 | 136,165 | |||
Corporate and other assets | |||||||
Segment reporting information, revenues | |||||||
Rental revenues | 0 | 0 | 0 | 0 | |||
Operating expenses | 0 | 0 | 0 | 0 | |||
Segment NOI | 0 | 0 | 0 | 0 | |||
Adjustments to NOI | 0 | 0 | 0 | 0 | |||
Adjusted NOI | 0 | 0 | 0 | 0 | |||
Addback adjustments | 0 | 0 | 0 | 0 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (55,231) | (70,500) | (103,121) | (143,084) | |||
Depreciation and amortization | 0 | 0 | 0 | 0 | |||
General and administrative | (27,120) | (22,514) | (48,475) | (51,689) | |||
Transaction costs | (1,337) | (2,404) | (5,855) | (4,599) | |||
Recoveries (impairments), net | 0 | 0 | 0 | 0 | |||
Gain (loss) on sales of real estate, net | 0 | 0 | 0 | 0 | |||
Other income (expense), net | 8,191 | 1,786 | 11,324 | 1,946 | |||
Income tax benefit (expense) | 1,864 | 4,654 | 5,322 | 9,990 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | $ (74,768) | $ (88,978) | $ (141,940) | $ (187,436) | |||
Senior housing triple-net | |||||||
Segment Disclosure | |||||||
Number of facilities transitioned | facility | 21 | 10 | 39 | 10 | |||
Segment reporting information, revenues | |||||||
Gain (loss) on sales of real estate, net | $ 25,000 | ||||||
Senior housing triple-net | Operating segment | |||||||
Segment reporting information, revenues | |||||||
Rental revenues | $ 49,866 | 70,713 | $ 108,758 | $ 145,003 | |||
Operating expenses | (866) | (791) | (1,859) | (1,837) | |||
Segment NOI | 49,000 | 69,922 | 106,899 | 143,166 | |||
Adjustments to NOI | 4,807 | 1,006 | 5,371 | (858) | |||
Adjusted NOI | 53,807 | 70,928 | 112,270 | 142,308 | |||
Addback adjustments | (4,807) | (1,006) | (5,371) | 858 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (206) | (607) | (795) | (1,207) | |||
Depreciation and amortization | (15,693) | (21,251) | (32,376) | (43,157) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | (15,485) | (6,273) | (15,485) | (6,273) | |||
Gain (loss) on sales of real estate, net | 0 | (23,039) | 3,557 | (23,039) | |||
Other income (expense), net | 0 | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | 17,616 | 18,752 | 61,800 | 69,490 | |||
SHOP | |||||||
Segment reporting information, revenues | |||||||
Gain (loss) on sales of real estate, net | $ 21,000 | ||||||
SHOP | Operating segment | |||||||
Segment reporting information, revenues | |||||||
Rental revenues | 177,001 | 138,352 | 303,182 | 283,022 | |||
Operating expenses | (137,460) | (101,767) | (234,407) | (203,513) | |||
Segment NOI | 39,541 | 36,585 | 68,775 | 79,509 | |||
Adjustments to NOI | 841 | (124) | 1,993 | (1,732) | |||
Adjusted NOI | 40,382 | 36,461 | 70,768 | 77,777 | |||
Addback adjustments | (841) | 124 | (1,993) | 1,732 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (1,326) | (990) | (1,989) | (1,979) | |||
Depreciation and amortization | (52,242) | (28,002) | (76,328) | (55,630) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | (52,963) | 0 | (52,963) | 0 | |||
Gain (loss) on sales of real estate, net | 4,691 | 48,252 | 9,314 | 69,067 | |||
Other income (expense), net | 0 | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | (62,299) | 55,845 | (53,191) | 90,967 | |||
Life science | Operating segment | |||||||
Segment reporting information, revenues | |||||||
Rental revenues | 107,596 | 101,031 | 202,068 | 200,653 | |||
Operating expenses | (25,480) | (22,732) | (47,472) | (44,541) | |||
Segment NOI | 82,116 | 78,299 | 154,596 | 156,112 | |||
Adjustments to NOI | (7,614) | (2,233) | (10,091) | (5,984) | |||
Adjusted NOI | 74,502 | 76,066 | 144,505 | 150,128 | |||
Addback adjustments | 7,614 | 2,233 | 10,091 | 5,984 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (70) | (80) | (143) | (162) | |||
Depreciation and amortization | (41,431) | (35,269) | (77,677) | (71,350) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | 0 | (7,639) | 0 | (7,639) | |||
Gain (loss) on sales of real estate, net | 3,816 | 0 | 3,738 | 0 | |||
Other income (expense), net | 0 | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | 44,431 | 35,311 | $ 80,514 | 76,961 | |||
Medical office | |||||||
Segment Disclosure | |||||||
Number of facilities transitioned | facility | 2 | ||||||
Medical office | Operating segment | |||||||
Segment reporting information, revenues | |||||||
Rental revenues | 141,927 | 134,574 | $ 284,122 | 267,794 | |||
Operating expenses | (50,176) | (48,528) | (99,163) | (96,406) | |||
Segment NOI | 91,751 | 86,046 | 184,959 | 171,388 | |||
Adjustments to NOI | (1,203) | (1,831) | (2,974) | (3,764) | |||
Adjusted NOI | 90,548 | 84,215 | 181,985 | 167,624 | |||
Addback adjustments | 1,203 | 1,831 | 2,974 | 3,764 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (109) | (119) | (221) | (239) | |||
Depreciation and amortization | (54,096) | (48,098) | (107,198) | (95,295) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | (90) | 0 | (8,948) | 0 | |||
Gain (loss) on sales of real estate, net | 2,941 | 0 | 2,883 | 0 | |||
Other income (expense), net | 0 | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | 40,397 | 37,829 | 71,475 | 75,854 | |||
Other non-reportable segments | Operating segment | |||||||
Segment reporting information, revenues | |||||||
Rental revenues | 12,763 | 23,434 | 25,464 | 44,464 | |||
Operating expenses | (11) | (48) | (19) | (121) | |||
Segment NOI | 12,752 | 23,386 | 25,445 | 44,343 | |||
Adjustments to NOI | 219 | (480) | 413 | (1,011) | |||
Adjusted NOI | 12,971 | 22,906 | 25,858 | 43,332 | |||
Addback adjustments | (219) | 480 | (413) | 1,011 | |||
Interest income | 2,414 | 1,447 | 4,127 | 7,812 | |||
Interest expense | 0 | (742) | 0 | (1,469) | |||
Depreciation and amortization | (1,834) | (10,672) | (3,668) | (21,110) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | 0 | 0 | 0 | 0 | |||
Gain (loss) on sales of real estate, net | 0 | 20,851 | 0 | 20,851 | |||
Other income (expense), net | 12,817 | 0 | 12,817 | (40,567) | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | (1,506) | (101) | (2,369) | 469 | |||
Net income (loss) | $ 24,643 | $ 34,169 | $ 36,352 | $ 10,329 |
Segment Disclosures - Revenues and Assets by Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Segment Disclosure | |||||||
Rental revenues | $ 489,153 | $ 468,104 | $ 923,594 | $ 940,936 | |||
Operating expenses | (213,993) | (173,866) | (382,920) | (346,418) | |||
Segment NOI | 275,160 | 294,238 | 540,674 | 594,518 | |||
Adjustments to NOI | (2,950) | (3,662) | (5,288) | (13,349) | |||
Adjusted NOI | 272,210 | 290,576 | 535,386 | 581,169 | |||
Addback adjustments | 2,950 | 3,662 | 5,288 | 13,349 | |||
Interest income | 2,414 | 1,447 | 4,127 | 7,812 | |||
Interest expense | (56,942) | (73,038) | (106,269) | (148,140) | |||
Depreciation and amortization | (165,296) | (143,292) | (297,247) | (286,542) | |||
General and administrative | (27,120) | (22,514) | (48,475) | (51,689) | |||
Transaction costs | (1,337) | (2,404) | (5,855) | (4,599) | |||
Recoveries (impairments), net | (68,538) | (13,912) | (77,396) | (13,912) | |||
Gain (loss) on sales of real estate, net | 11,448 | $ 8,000 | $ 95,000 | 46,064 | 19,492 | 66,879 | |
Loss on debt extinguishments | (1,135) | 0 | (1,135) | 0 | |||
Other income (expense), net | 21,008 | 1,786 | 24,141 | (38,621) | |||
Income tax benefit (expense) | 1,864 | 4,654 | 5,322 | 9,990 | |||
Equity income (loss) from unconsolidated joint ventures | (1,506) | (101) | (2,369) | 469 | |||
Net income (loss) | (9,980) | 92,928 | 55,010 | 136,165 | |||
Total revenues | 491,567 | 469,551 | 927,721 | 948,748 | |||
Senior housing triple-net | |||||||
Segment Disclosure | |||||||
Gain (loss) on sales of real estate, net | 25,000 | ||||||
SHOP | |||||||
Segment Disclosure | |||||||
Gain (loss) on sales of real estate, net | $ 21,000 | ||||||
Operating segment | |||||||
Segment Disclosure | |||||||
Total revenues | 491,567 | 469,551 | 927,721 | 948,748 | |||
Operating segment | Senior housing triple-net | |||||||
Segment Disclosure | |||||||
Rental revenues | 49,866 | 70,713 | 108,758 | 145,003 | |||
Operating expenses | (866) | (791) | (1,859) | (1,837) | |||
Segment NOI | 49,000 | 69,922 | 106,899 | 143,166 | |||
Adjustments to NOI | 4,807 | 1,006 | 5,371 | (858) | |||
Adjusted NOI | 53,807 | 70,928 | 112,270 | 142,308 | |||
Addback adjustments | (4,807) | (1,006) | (5,371) | 858 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (206) | (607) | (795) | (1,207) | |||
Depreciation and amortization | (15,693) | (21,251) | (32,376) | (43,157) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | (15,485) | (6,273) | (15,485) | (6,273) | |||
Gain (loss) on sales of real estate, net | 0 | (23,039) | 3,557 | (23,039) | |||
Loss on debt extinguishments | 0 | 0 | |||||
Other income (expense), net | 0 | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | 17,616 | 18,752 | 61,800 | 69,490 | |||
Total revenues | 49,866 | 70,713 | 108,758 | 145,003 | |||
Operating segment | SHOP | |||||||
Segment Disclosure | |||||||
Rental revenues | 177,001 | 138,352 | 303,182 | 283,022 | |||
Operating expenses | (137,460) | (101,767) | (234,407) | (203,513) | |||
Segment NOI | 39,541 | 36,585 | 68,775 | 79,509 | |||
Adjustments to NOI | 841 | (124) | 1,993 | (1,732) | |||
Adjusted NOI | 40,382 | 36,461 | 70,768 | 77,777 | |||
Addback adjustments | (841) | 124 | (1,993) | 1,732 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (1,326) | (990) | (1,989) | (1,979) | |||
Depreciation and amortization | (52,242) | (28,002) | (76,328) | (55,630) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | (52,963) | 0 | (52,963) | 0 | |||
Gain (loss) on sales of real estate, net | 4,691 | 48,252 | 9,314 | 69,067 | |||
Loss on debt extinguishments | 0 | 0 | |||||
Other income (expense), net | 0 | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | (62,299) | 55,845 | (53,191) | 90,967 | |||
Total revenues | 177,001 | 138,352 | 303,182 | 283,022 | |||
Operating segment | Life science | |||||||
Segment Disclosure | |||||||
Rental revenues | 107,596 | 101,031 | 202,068 | 200,653 | |||
Operating expenses | (25,480) | (22,732) | (47,472) | (44,541) | |||
Segment NOI | 82,116 | 78,299 | 154,596 | 156,112 | |||
Adjustments to NOI | (7,614) | (2,233) | (10,091) | (5,984) | |||
Adjusted NOI | 74,502 | 76,066 | 144,505 | 150,128 | |||
Addback adjustments | 7,614 | 2,233 | 10,091 | 5,984 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (70) | (80) | (143) | (162) | |||
Depreciation and amortization | (41,431) | (35,269) | (77,677) | (71,350) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | 0 | (7,639) | 0 | (7,639) | |||
Gain (loss) on sales of real estate, net | 3,816 | 0 | 3,738 | 0 | |||
Loss on debt extinguishments | 0 | 0 | |||||
Other income (expense), net | 0 | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | 44,431 | 35,311 | 80,514 | 76,961 | |||
Total revenues | 107,596 | 101,031 | 202,068 | 200,653 | |||
Operating segment | Medical office | |||||||
Segment Disclosure | |||||||
Rental revenues | 141,927 | 134,574 | 284,122 | 267,794 | |||
Operating expenses | (50,176) | (48,528) | (99,163) | (96,406) | |||
Segment NOI | 91,751 | 86,046 | 184,959 | 171,388 | |||
Adjustments to NOI | (1,203) | (1,831) | (2,974) | (3,764) | |||
Adjusted NOI | 90,548 | 84,215 | 181,985 | 167,624 | |||
Addback adjustments | 1,203 | 1,831 | 2,974 | 3,764 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (109) | (119) | (221) | (239) | |||
Depreciation and amortization | (54,096) | (48,098) | (107,198) | (95,295) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | (90) | 0 | (8,948) | 0 | |||
Gain (loss) on sales of real estate, net | 2,941 | 0 | 2,883 | 0 | |||
Loss on debt extinguishments | 0 | 0 | |||||
Other income (expense), net | 0 | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | 40,397 | 37,829 | 71,475 | 75,854 | |||
Total revenues | 141,927 | 134,574 | 284,122 | 267,794 | |||
Operating segment | Other non-reportable segments | |||||||
Segment Disclosure | |||||||
Rental revenues | 12,763 | 23,434 | 25,464 | 44,464 | |||
Operating expenses | (11) | (48) | (19) | (121) | |||
Segment NOI | 12,752 | 23,386 | 25,445 | 44,343 | |||
Adjustments to NOI | 219 | (480) | 413 | (1,011) | |||
Adjusted NOI | 12,971 | 22,906 | 25,858 | 43,332 | |||
Addback adjustments | (219) | 480 | (413) | 1,011 | |||
Interest income | 2,414 | 1,447 | 4,127 | 7,812 | |||
Interest expense | 0 | (742) | 0 | (1,469) | |||
Depreciation and amortization | (1,834) | (10,672) | (3,668) | (21,110) | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Transaction costs | 0 | 0 | 0 | 0 | |||
Recoveries (impairments), net | 0 | 0 | 0 | 0 | |||
Gain (loss) on sales of real estate, net | 0 | 20,851 | 0 | 20,851 | |||
Loss on debt extinguishments | 0 | 0 | |||||
Other income (expense), net | 12,817 | 0 | 12,817 | (40,567) | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Equity income (loss) from unconsolidated joint ventures | (1,506) | (101) | (2,369) | 469 | |||
Net income (loss) | 24,643 | 34,169 | 36,352 | 10,329 | |||
Total revenues | 15,177 | 24,881 | 29,591 | 52,276 | |||
Corporate and other assets | |||||||
Segment Disclosure | |||||||
Rental revenues | 0 | 0 | 0 | 0 | |||
Operating expenses | 0 | 0 | 0 | 0 | |||
Segment NOI | 0 | 0 | 0 | 0 | |||
Adjustments to NOI | 0 | 0 | 0 | 0 | |||
Adjusted NOI | 0 | 0 | 0 | 0 | |||
Addback adjustments | 0 | 0 | 0 | 0 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Interest expense | (55,231) | (70,500) | (103,121) | (143,084) | |||
Depreciation and amortization | 0 | 0 | 0 | 0 | |||
General and administrative | (27,120) | (22,514) | (48,475) | (51,689) | |||
Transaction costs | (1,337) | (2,404) | (5,855) | (4,599) | |||
Recoveries (impairments), net | 0 | 0 | 0 | 0 | |||
Gain (loss) on sales of real estate, net | 0 | 0 | 0 | 0 | |||
Loss on debt extinguishments | (1,135) | (1,135) | |||||
Other income (expense), net | 8,191 | 1,786 | 11,324 | 1,946 | |||
Income tax benefit (expense) | 1,864 | 4,654 | 5,322 | 9,990 | |||
Equity income (loss) from unconsolidated joint ventures | 0 | 0 | 0 | 0 | |||
Net income (loss) | $ (74,768) | $ (88,978) | $ (141,940) | $ (187,436) |
Earnings Per Common Share - Narrative (Details) - shares |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Earnings Per Share [Abstract] | ||||||
Maximum shares issuable under forward equity sales agreement (in shares) | 13,750,000 | 13,750,000.00 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive potential common shares - forward equity agreements (in shares) | 0 | 0 | (1,344,000) | 0 | ||
Down REIT | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Shares of anti-dilutive securities excluded from earnings per share calculation (in shares) | 7,000,000 | 7,000,000 | 7,000,000 | 7,000,000 | ||
Employee stock option | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Shares of anti-dilutive securities excluded from earnings per share calculation (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||
Convertible Units | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Shares of anti-dilutive securities excluded from earnings per share calculation (in shares) | 22,000,000 | 21,000,000 | ||||
Forward Equity Offering | ||||||
Earnings Per Share [Abstract] | ||||||
Maximum shares issuable under forward equity sales agreement (in shares) | 15,250,000 | 13,600,000.0 | 13,600,000 | |||
Option indexed to issuers equity, term | 1 year | 1 year | ||||
Issuance of common stock, net (in shares) | 1,500,000 | 1,500,000 | ||||
At-The-Market Program 2018 | ||||||
Earnings Per Share [Abstract] | ||||||
Share settlement (in shares) | 5,500,000 | 5,500,000 | ||||
Issuance of common stock, net (in shares) | 5,400,000 |
Earnings Per Common Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Numerator | ||||
Net income (loss) | $ (9,980) | $ 92,928 | $ 55,010 | $ 136,165 |
Noncontrolling interests' share in earnings | (3,617) | (2,986) | (7,137) | (5,991) |
Net income (loss) attributable to HCP, Inc. | (13,597) | 89,942 | 47,873 | 130,174 |
Less: Participating securities' share in earnings | (394) | (461) | (837) | (852) |
Net income (loss) applicable to common shares | $ (13,991) | $ 89,481 | $ 47,036 | $ 129,322 |
Denominator | ||||
Basic weighted average shares outstanding (in shares) | 478,739 | 469,769 | 478,260 | 469,664 |
Dilutive potential common shares - equity awards (in shares) | 0 | 172 | 281 | 135 |
Dilutive potential common shares - forward equity agreements (in shares) | 0 | 0 | 1,344 | 0 |
Diluted weighted average common shares (in shares) | 478,739 | 469,941 | 479,885 | 469,799 |
Basic earnings per common share | ||||
Earnings per common share, basic (in dollars per share) | $ (0.03) | $ 0.19 | $ 0.10 | $ 0.28 |
Earnings per common share, diluted (in dollars per share) | $ (0.03) | $ 0.19 | $ 0.10 | $ 0.28 |
Forward sales agreements that have not been settled (in shares) | 22,000 | |||
Forward equity sales agreements that have not been settled | $ 641,000 |
Supplemental Cash Flow Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Supplemental cash flow information: | ||
Interest paid, net of capitalized interest | $ 99,934 | $ 141,777 |
Income taxes paid (refunded) | 1,171 | 2,735 |
Capitalized interest | 15,413 | 8,033 |
Supplemental schedule of non-cash investing and financing activities: | ||
Accrued construction costs | 102,307 | 66,233 |
Retained equity method investment and proceeds receivable from U.K. JV transaction | 0 | 507,369 |
Derecognition of U.K. Bridge Loan receivable | 0 | 147,474 |
Consolidation of net assets related to U.K. Bridge Loan | 0 | 106,457 |
Vesting of restricted stock units and conversion of non-managing member units into common stock | 4,498 | 340 |
Liabilities assumed with real estate acquisitions | 59,778 | 0 |
Conversion of DFLs to real estate | 350,540 | 0 |
Net noncash impact from the consolidation of previously unconsolidated joint ventures | $ 17,850 | $ 0 |
Supplemental Cash Flow Information - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 130,521 | $ 110,790 | $ 91,381 | |
Restricted cash | 25,531 | 29,056 | 30,548 | |
Cash, cash equivalents and restricted cash | $ 156,052 | $ 139,846 | $ 121,929 | $ 82,203 |
Variable Interest Entities - Narrative (Details) $ in Thousands, £ in Millions |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2018 |
Mar. 31, 2018
USD ($)
|
Mar. 31, 2018
GBP (£)
|
Mar. 31, 2019
facility
|
Jun. 30, 2018
facility
|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2018
GBP (£)
|
Jun. 30, 2019
USD ($)
property
facility
joint_venture
tenant
loan
|
Dec. 31, 2016
USD ($)
property
|
Dec. 31, 2018
USD ($)
|
Mar. 31, 2018
GBP (£)
|
Dec. 31, 2016
GBP (£)
property
|
|
Variable Interest Entity [Line Items] | ||||||||||||
Mezzanine | $ | $ 25,886 | $ 21,013 | ||||||||||
Loans receivable, net | $ | $ 124,559 | $ 62,998 | ||||||||||
Senior housing triple-net | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Number of properties disposed (in facilities) | facility | 2 | 2 | ||||||||||
Unconsolidated Variable Interest Entities | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Number of unconsolidated joint ventures (in joint ventures) | joint_venture | 4 | |||||||||||
Number of VIE borrowers with marketable debt securities (in joint ventures) | joint_venture | 1 | |||||||||||
Number of loans to VIE borrowers (in loans) | loan | 1 | |||||||||||
VIE tenants-operating leases | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Number of properties leased (in properties) | property | 15 | |||||||||||
Number of VIE tenants (in tenants) | tenant | 4 | |||||||||||
CCRC OpCo | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Ownership percentage (as a percent) | 49.00% | |||||||||||
Waldwick | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Ownership percentage (as a percent) | 85.00% | |||||||||||
Loan - seller financing | Senior housing triple-net | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Mezzanine | $ | $ 10,000 | |||||||||||
Number of properties disposed (in facilities) | facility | 7 | |||||||||||
Term of facility | 5 years | |||||||||||
HCP Ventures V | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Ownership percentage (as a percent) | 51.00% | |||||||||||
Watertown JV | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Ownership percentage (as a percent) | 95.00% | |||||||||||
Life science joint ventures | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Ownership percentage (as a percent) | 99.00% | |||||||||||
MSREI JV | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Ownership percentage (as a percent) | 51.00% | 51.00% | ||||||||||
Consolidated lessees VIE | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Number of properties leased (in properties) | property | 2 | |||||||||||
DownREIT Partnerships | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Number of controlling ownership interest entities as a managing member | joint_venture | 6 | |||||||||||
MMCG | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Loss from initial consolidation of VIE | $ 41,000 | £ 29 | ||||||||||
Tax benefit of initial consolidation of variable interest entity | 3,000 | £ 2 | ||||||||||
Carrying amount of liabilities in VIE | $ 13,000 | 13,000 | £ 9 | |||||||||
MMCG | Property, plant and equipment | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Carrying amount of assets in VIE | 114,000 | 114,000 | 81 | |||||||||
MMCG | Intangible assets | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Carrying amount of assets in VIE | 5,000 | $ 5,000 | £ 4 | |||||||||
MMCG | Bridge Loan | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Loans receivable, net | $ 131,000 | £ 105 | ||||||||||
Number of properties in a purchase option (in properties) | property | 7 | 7 | ||||||||||
Period of call-option retained | 3 years | |||||||||||
Loss from initial consolidation of VIE | $ 41,000 | £ 29 |
Variable Interest Entities - Schedule of Variable Interest Entities (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
VIE tenants-DFLs | |
Variable Interest Entity [Line Items] | |
Maximum Loss Exposure and Carrying Amount | $ 251,438 |
VIE tenants-operating leases | |
Variable Interest Entity [Line Items] | |
Maximum Loss Exposure and Carrying Amount | 7,446 |
CCRC OpCo | |
Variable Interest Entity [Line Items] | |
Maximum Loss Exposure and Carrying Amount | 171,915 |
Unconsolidated Development JVs | |
Variable Interest Entity [Line Items] | |
Maximum Loss Exposure and Carrying Amount | 18,715 |
Loan - seller financing | |
Variable Interest Entity [Line Items] | |
Maximum Loss Exposure and Carrying Amount | 10,000 |
CMBS and LLC investment | |
Variable Interest Entity [Line Items] | |
Maximum Loss Exposure and Carrying Amount | $ 34,537 |
Variable Interest Entities - Consolidated Assets and Liabilities of VIEs (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
---|---|---|---|
ASSETS | |||
Buildings and improvements | $ 11,784,671 | $ 10,877,248 | |
Development costs and construction in progress | 496,662 | 537,643 | |
Land | 1,879,227 | 1,637,506 | |
Accumulated depreciation and amortization | (2,926,656) | (2,842,947) | |
Net real estate | 11,233,904 | 10,209,450 | |
Investments in and advances to unconsolidated joint ventures | 518,033 | 540,088 | |
Accounts receivable, net | 53,840 | 48,171 | |
Cash and cash equivalents | 130,521 | 110,790 | $ 91,381 |
Restricted cash | 25,531 | 29,056 | $ 30,548 |
Intangible assets, net | 317,960 | 305,079 | |
Right-of-use asset, net | 172,424 | ||
Other assets, net | 618,218 | 591,017 | |
Total assets | 13,713,093 | 12,718,553 | |
LIABILITIES AND EQUITY | |||
Mortgage debt | 161,829 | 138,470 | |
Intangible liabilities, net | 53,771 | 54,663 | |
Lease liability | 154,877 | ||
Accounts payable and accrued liabilities | 30,093 | 1,125 | |
Deferred revenue | 193,286 | 190,683 | |
Total liabilities | 7,093,821 | 6,205,962 | |
VIEs | |||
ASSETS | |||
Buildings and improvements | 2,454,366 | 1,949,582 | |
Development costs and construction in progress | 49,101 | 39,584 | |
Land | 267,288 | 151,746 | |
Accumulated depreciation and amortization | (416,738) | (398,143) | |
Net real estate | 2,354,017 | 1,742,769 | |
Investments in and advances to unconsolidated joint ventures | 0 | 1,550 | |
Accounts receivable, net | 5,329 | 7,904 | |
Cash and cash equivalents | 55,574 | 23,772 | |
Restricted cash | 4,349 | 3,399 | |
Intangible assets, net | 137,749 | 111,333 | |
Right-of-use asset, net | 93,363 | 0 | |
Other assets, net | 43,610 | 43,149 | |
Total assets | 2,693,991 | 1,933,876 | |
LIABILITIES AND EQUITY | |||
Mortgage debt | 98,064 | 44,598 | |
Intangible liabilities, net | 16,162 | 19,128 | |
Lease liability | 90,266 | 0 | |
Accounts payable and accrued liabilities | 57,310 | 66,736 | |
Deferred revenue | 24,119 | 24,215 | |
Total liabilities | $ 285,921 | $ 154,677 |
Concentration of Credit Risk - Schedule of Concentration Risk (Details) - Brookdale |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Total Assets | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 6.00% | 6.00% | |||
Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 4.00% | 6.00% | 4.00% | 6.00% | |
Senior housing triple-net | Total Assets | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 40.00% | 27.00% | |||
Senior housing triple-net | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 38.00% | 41.00% | 35.00% | 42.00% |
Concentration of Credit Risk - Narrative (Details) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2019
facility
renewal
|
Dec. 31, 2018 |
|
Brookdale | Minimum | ||
Concentration Risk [Line Items] | ||
Percentage of EDITDAR payable as base management fee | 4.50% | |
Brookdale | Maximum | ||
Concentration Risk [Line Items] | ||
Percentage of EDITDAR payable as base management fee | 5.00% | |
SHOP | Management and Accounting Services | Brookdale | ||
Concentration Risk [Line Items] | ||
Number of facilities | facility | 26 | |
Number of facilities owned by unconsolidated joint venture | facility | 15 | |
Management and Accounting Services | SHOP | Brookdale | ||
Concentration Risk [Line Items] | ||
Management agreement renewal term (in years) | 5 years | |
Management and Accounting Services | SHOP | Brookdale | Minimum | ||
Concentration Risk [Line Items] | ||
Management agreement term (in years) | 10 years | |
Number of renewals on management agreement | renewal | 3 | |
Management and Accounting Services | SHOP | Brookdale | Maximum | ||
Concentration Risk [Line Items] | ||
Management agreement term (in years) | 15 years | |
Number of renewals on management agreement | renewal | 4 | |
Total Assets | SHOP | Brookdale | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 6.00% | 7.00% |
Brookdale | Total Assets | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 6.00% | 6.00% |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Summary of financial instruments | ||
Bank line of credit | $ 530,004 | $ 80,103 |
Senior unsecured notes | 5,262,694 | 5,258,550 |
Mortgage debt | 161,829 | 138,470 |
Other debt | 87,211 | 90,785 |
Carrying Value | ||
Summary of financial instruments | ||
Loans receivable, net | 124,559 | 62,998 |
Marketable debt securities | 19,474 | 19,202 |
Bank line of credit | 530,004 | 80,103 |
Term loan | 248,821 | 0 |
Senior unsecured notes | 5,262,694 | 5,258,550 |
Mortgage debt | 161,829 | 138,470 |
Other debt | 87,211 | 90,785 |
Derivative liabilities | 1,116 | 1,310 |
Fair Value | Level 1 | ||
Summary of financial instruments | ||
Senior unsecured notes | 5,600,495 | 5,302,485 |
Fair Value | Level 2 | ||
Summary of financial instruments | ||
Loans receivable, net | 124,559 | 62,998 |
Marketable debt securities | 19,474 | 19,202 |
Bank line of credit | 530,004 | 80,103 |
Term loan | 248,821 | 0 |
Mortgage debt | 159,530 | 136,161 |
Other debt | 87,211 | 90,785 |
Derivative liabilities | $ 1,116 | $ 1,310 |
Derivative Financial Instruments - Schedule of Derivative Instruments (Details) - Cash Flow - Interest-rate swap contracts |
Jun. 30, 2019
USD ($)
derivative
|
---|---|
Derivative [Line Items] | |
Notional | $ 42,300,000 |
Pay Rate | 3.82% |
Fair value of interest rate hedge, liabilities | $ (1,116,000) |
Number of interest-rate contracts held | derivative | 3 |
Derivative Financial Instruments - Narrative (Details) - 6 months ended Jun. 30, 2019 £ in Millions, $ in Millions |
USD ($) |
GBP (£) |
---|---|---|
Net Investment | Facility and 2015 Term Loan | ||
Derivative [Line Items] | ||
Borrowings designated as hedge of net investment | £ | £ 55 | |
Interest-rate swap contracts | Maximum | ||
Derivative [Line Items] | ||
Estimate change in fair value of derivative for assumption of one percentage point change in the interest rate | $ | $ 1 |
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