Real Estate Transactions

3 Months Ended

Mar. 31, 2021

Real Estate [Abstract]

Real Estate Transactions

Real Estate Transactions

2021 Real Estate Investments

South San Francisco Land Site Acquisition

In October 2020, the Company executed a definitive agreement to acquire approximately 12 acres of land for $128 million. The acquisition site is located in South San Francisco, California, adjacent to two sites currently held by the Company as land for future development. The Company paid a $10 million nonrefundable deposit upon completing due diligence in November 2020. The first phase, with a purchase price of $61 million, closed in April 2021.

Westview Medical Plaza Acquisition

In February 2021, the Company acquired one medical office building (“MOB”) in Nashville, Tennessee for $13 million.

Pinnacle at Ridgegate Acquisition

In April 2021, the Company acquired one MOB in Denver, Colorado for $38 million.

MOB Portfolio Acquisition

In April 2021, the Company acquired 14 MOBs for $371 million (the “MOB Portfolio”). In conjunction with the acquisition, the Company issued $142 million of secured mortgage debt.

2020 Real Estate Investments

The Post Acquisition

In April 2020, the Company acquired a life science campus in Waltham, Massachusetts for $320 million.

Scottsdale Gateway Acquisition

In July 2020, the Company acquired one MOB in Scottsdale, Arizona for $27 million.

Midwest MOB Portfolio Acquisition

In October 2020, the Company acquired a portfolio of seven MOBs located in Indiana, Missouri, and Illinois for $169 million.

Cambridge Discovery Park Acquisition

In December 2020, the Company acquired three life science facilities in Cambridge, Massachusetts for $610 million and a 49% unconsolidated joint venture interest in a fourth property on the same campus for $54 million. If the fourth property is sold in a taxable transaction, the Company is generally obligated to indemnify its joint venture partner for its federal and state income taxes associated with the gain that existed at the time of the contribution to the joint venture.

Waldwick JV Interest Purchase

In October 2020, the Company acquired the remaining 15% equity interest of a senior housing joint venture structure (which owned one senior housing facility), in which the Company previously held an unconsolidated equity investment, for $4 million. Subsequent to acquisition, the Company owned 100% of the equity, began consolidating the facility, and recognized a gain upon change of control of $6 million, which is recorded in other income (expense), net within income (loss) from discontinued operations. In December 2020, the Company sold the property as part of the Atria SHOP Portfolio disposition (see Note 5).

MBK JV Dissolution

In November 2020, as part of the dissolution of a senior housing joint venture, the Company was distributed one property, one land parcel, and $11 million in cash. Upon consolidating the property and land parcel at the time of distribution, the Company recognized a loss upon change of control of $16 million, which is recorded in other income (expense), net within income (loss) from discontinued operations. In conjunction with the distribution of the property, the Company assumed $36 million of secured mortgage debt, which was recorded at its fair value through asset acquisition accounting. The property is classified as discontinued operations as of March 31, 2021.

Other Real Estate Acquisitions

In December 2020, the Company acquired one hospital in Dallas, Texas for $34 million.

Development Activities

The Company’s commitments related to development and redevelopment projects increased by $9 million, to $315 million at March 31, 2021, when compared to December 31, 2020, primarily as a result of increased commitments on existing projects and new projects started during the first quarter of 2021.

In March 2021, management reviewed the estimated useful lives of certain Life Science properties in connection with future plans of densification and related demolition. These changes in the planned use of the properties resulted in the Company updating their estimated useful lives, which differ from the Company’s previous estimates. The estimated useful lives of these assets was reduced from a weighted average remaining useful life of 15 years to 6 years to reflect the timing of the planned demolitions. This change in estimate increased depreciation expense by $3 million in the current quarter, resulting in a corresponding decrease to income (loss) from continuing operations and net income (loss) as well as a decrease of approximately $0.01 to basic and diluted earnings per share for the three months ended March 31, 2021.