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Real Property Acquisitions and Development
 3 Months Ended
Jun. 30, 2012
Real Property Acquisitions and Development [Abstract]  
Real Property Acquisitions and Development

3. Real Property Acquisition and Development

  Seniors Housing Triple-net Activity

During the six months ended June 30, 2012, we completed the acquisition of 24 seniors housing triple-net properties. The total purchase price for the communities acquired has been allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values in accordance with our accounting policies. Also during the three months ended March 31, 2012, we finalized our purchase price allocation of the previously acquired Genesis HealthCare Corporation real estate assets. There were no material changes in the Genesis purchase accounting allocation from those previously disclosed in Note 3 to our Annual Report on Form 10-K for the year ended December 31, 2011, as updated by our Current Report on Form 8-K filed on May 10, 2012. The following is our purchase price allocations and other seniors housing triple-net real property investment activity for the periods presented (in thousands):

  Six Months Ended 
  June 30, 2012(1)June 30, 2011 
   Amount Amount 
        
Land and land improvements $ 29,320 $ 179,321 
Buildings and improvements   394,508   2,670,282 
 Total assets acquired   423,828   2,849,603 
Assumed debt   (56,337)   (93,425) 
Accrued expenses and other liabilities    (1,568)   (75,144) 
 Total liabilities assumed   (57,905)   (168,569) 
Capital in excess of par   1,024   - 
Noncontrolling interest   (15,820)   - 
Non-cash acquisition related activity   (310)   - 
 Cash disbursed for acquisitions   350,817   2,681,034 
Construction in progress additions   81,419   75,999 
Less: Capitalized interest   (2,629)   (2,331) 
Cash disbursed for construction in progress   78,790   73,668 
Capital improvements to existing properties   36,421   11,556 
Total cash invested in real property, net of cash acquired $ 466,028 $ 2,766,258 
         
         
(1) Includes acquisitions with an aggregate purchase price of $129,545,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
         

Seniors Housing Operating Activity

During the six months ended June 30, 2012, we completed the acquisition of 48 seniors housing operating properties. Also, during the three months ended June 30, 2012, we entered into a new partnership with Chartwell Seniors Housing REIT to own and operate a portfolio of 42 seniors housing properties. We own a 50% partnership interest and Chartwell owns the remaining 50% interest in 39 properties. We wholly own the remaining three properties and Chartwell will manage all 42 properties. See Note 7 for additional information. Certain of our subsidiaries' functional currencies are the local currencies of their respective countries. We translate the results of operations of our foreign subsidiaries into U.S. dollars using average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the period. We record resulting currency translation adjustments in accumulated other comprehensive income, a component of stockholders' equity, on our balance sheet. The total purchase price for the properties acquired has been allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values in accordance with our accounting policies. The following is a summary of our seniors housing operating real property investment activity for the periods presented (in thousands):

  Six Months Ended 
  June 30, 2012(2)June 30, 2011 
   Amount Amount 
         
Land and land improvements $ 27,647 $ 71,610 
Building and improvements   241,287   966,235 
Acquired lease intangibles   24,052   88,285 
Restricted cash   -   5,451 
Receivables and other assets   1,182   14,960 
 Total assets acquired(1)   294,168   1,146,541 
Assumed debt   (8,684)   (585,656) 
Accrued expenses and other liabilities    (1,665)   (30,681) 
 Total liabilities assumed   (10,349)   (616,337) 
Capital in excess of par   -   (6,017) 
Noncontrolling interests   (2,054)   (27,411) 
Non-cash acquisition related activity   -   (28,090) 
Cash disbursed for acquisitions   281,765   468,686 
Capital improvements to existing properties   8,553   7,661 
Total cash invested in real property, net of cash acquired $ 290,318 $ 476,347 
        
         
(1) Excludes $1,619,000 and $34,342,000 of cash acquired during the six months ended June 30, 2012 and 2011, respectively.
(2) Includes acquisitions with an aggregate purchase price of $82,774,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

Medical Facilities Activity

During the six months ended June 30, 2012, we acquired 19 medical office buildings, one hospital, and one parcel of land. The total purchase price for the communities acquired has been allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values in accordance with our accounting policies. The following is a summary of our medical facilities real property investment activity for the periods presented (in thousands):

  Six Months Ended 
  June 30, 2012(2) June 30, 2011 
   Amount Amount 
         
Land and land improvements $ 30,160 $ 7,711 
Buildings and improvements   489,659   63,532 
Acquired lease intangibles   58,998   1,126 
Restricted cash   975   - 
Receivables and other assets   4,250   - 
 Total assets acquired   584,042   72,369 
Assumed debt   (238,589)   (42,551) 
Accrued expenses and other liabilities   (12,775)   (568) 
 Total liabilities assumed    (251,364)    (43,119) 
Non-cash acquisition activity   (880)   - 
Cash disbursed for acquisitions   331,798   29,250 
Construction in progress additions:   64,937   124,150 
Less: Capitalized interest   (1,929)   (4,648) 
 Accruals(1)   (10,911)   (30,736) 
Cash disbursed for construction in progress   52,097   88,766 
Capital improvements to existing properties   18,025   9,976 
Total cash invested in real property $ 401,920 $ 127,992 
        
         
(1) Represents non-cash accruals for amounts to be paid in future periods relating to properties that converted in the periods noted above.
(2) Includes acquisitions with an aggregate purchase price of $545,824,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

Development Conversions

 

The following is a summary of the construction projects that were placed into service and began generating revenues during the periods presented:

    Six Months Ended
    June 30, 2012 June 30, 2011
 Development projects:        
  Seniors housing triple-net  $ 59,167  $ 0
  Medical facilities    105,666    325,563
  Total development projects    164,833    325,563
 Expansion projects    240    19,218
Total construction in progress conversions  $ 165,073  $ 344,781

Transaction Costs

 

Transaction costs primarily represent costs incurred with property acquisitions, including due diligence costs, fees for legal and valuation services and termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs.