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Real Property Acquisitions and Development
12 Months Ended
Dec. 31, 2017
Real Property Acquisitions and Development [Abstract]  
Real Property Acquisitions and Development

3. Real Property Acquisitions and Development

The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets, liabilities and noncontrolling interests based upon their relative fair values in accordance with our accounting policies. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments. Transaction costs primarily represent costs incurred with property acquisitions, including due diligence costs, fees for legal and valuation services, termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees, and other acquisition-related costs. Effective January 1, 2017, with our adoption of ASU 2017-01, transaction costs incurred for asset acquisitions are capitalized as a component of purchase price and all other non-capitalizable costs are reflected in “Other Expenses” on our consolidated statement of comprehensive income. Acquisitions that occurred prior to January 1, 2017, were accounted for as business combinations. Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. See Notes 2 and 11 for information regarding our foreign currency policies. During the year ended December 31, 2017, we finalized our purchase price allocation of certain previously reported acquisitions and there were no material changes from those previously disclosed.

Triple-Net Activity

The following provides our purchase price allocations and other triple-net real property investment activity for the periods presented (in thousands):

Year Ended December 31,
201720162015
Land and land improvements $ 33,416 $104,754$95,835
Buildings and improvements 248,459 418,6331,061,431
Acquired lease intangibles - 2,8764,408
Receivables and other assets - 551194
Total assets acquired(1) 281,875 526,8141,161,868
Secured debt --(47,741)
Accrued expenses and other liabilities(21,236)(3,384)(2,905)
Total liabilities assumed(21,236)(3,384)(50,646)
Noncontrolling interests(7,275)(26,771)(13,465)
Non-cash acquisition related activity(2)(54,901)(51,733)(38,355)
Cash disbursed for acquisitions198,463444,9261,059,402
Construction in progress additions120,797181,084143,140
Less: Capitalized interest(4,713)(8,729)(5,699)
Accruals Foreign currency translation(610)(3,665)(167)
Cash disbursed for construction in progress115,474168,690137,274
Capital improvements to existing properties19,98932,60345,293
Total cash invested in real property, net of cash acquired $ 333,926 $646,219$1,241,969
(1) Excludes $318,000, $682,000 and $16,578,000 of cash and restricted cash acquired during the years ended December 31, 2017, 2016 and 2015, respectively.
(2) For the year ended December 31, 2017, $54,901,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the year ended December 31, 2016, primarily relates to $45,044,000 for the acquisition of assets previously financed as real estate loans receivable and $6,630,000 previously financed as an equity investment. For the year ended December 31, 2015, primarily relates to $23,288,000 for the acquisition of assets previously financed as real estate loans receivable and $6,743,000 previously financed as equity investments.

Seniors Housing Operating Activity

Acquisitions of seniors housing operating properties are structured under RIDEA, which is described in Note 18. This structure results in the inclusion of all resident revenues and related property operating expenses from the operation of these qualified health care properties in our consolidated statements of comprehensive income. The following is a summary of our seniors housing operating real property investment activity for the periods presented (in thousands):

Year Ended December 31,
201720162015
Land and land improvements $ 42,525 $164,653$218,581
Buildings and improvements 428,777 1,518,4722,367,486
Acquired lease intangibles 63,912 115,643187,512
Receivables and other assets 3,959 2,46229,501
Total assets acquired(1) 539,173 1,801,2302,803,080
Secured debt -(63,732)(871,471)
Senior unsecured notes--(24,621)
Accrued expenses and other liabilities(46,301)(23,681)(81,778)
Total liabilities assumed(46,301)(87,413)(977,870)
Noncontrolling interests(4,701)(6,007)(183,854)
Non-cash acquisition related activity (67,633)(2) (47,065)(3)-
Cash disbursed for acquisitions420,5381,660,7451,641,356
Construction in progress additions84,874157,84544,173
Less: Capitalized interest(9,106)(5,793)(1,740)
Less: Foreign currency translation(6,830)(8,500)(2,499)
Cash disbursed for construction in progress68,938143,55239,934
Capital improvements to existing properties185,473138,673104,308
Total cash invested in real property, net of cash acquired $ 674,949 $1,942,970$1,785,598
(1) Excludes $6,273,000, $351,000 and $42,728,000 of cash and restricted cash acquired during the years ended December 31, 2017, 2016 and 2015, respectively.
(2) Includes $59,665,000 related to the acquisition of assets previously financed as investments in unconsolidated entities, and $6,349,000 related to the acquisition of assets previously financed as real estate loans receivable.
(3) Includes $43,372,000 related to the acquisition of assets previously financed as investments in unconsolidated entities.

Outpatient Medical Activity

The following is a summary of our outpatient medical real property investment activity for the periods presented (in thousands):

Year Ended December 31,
201720162015
Land and land improvements $ 40,565 $5,738$223,708
Buildings and improvements 159,643 46,056614,770
Acquired lease intangibles 24,014 4,59245,226
Receivables and other assets 10 -939
Total assets acquired 224,232 56,386884,643
Secured debt (25,708)-(120,977)
Accrued expenses and other liabilities(3,181)(1,670)(7,777)
Total liabilities assumed(28,889)(1,670)(128,754)
Noncontrolling interests(9,080)-(76,535)
Non-cash acquisition related activity - (15,013)(2) (27,025)(3)
Cash disbursed for acquisitions(1)186,26339,703652,329
Construction in progress additions37,094113,93370,560
Less: Capitalized interest(2,406)(3,723)(1,286)
Accruals(4)13,615(19,321)(1,921)
Cash disbursed for construction in progress48,30390,88967,353
Capital improvements to existing properties44,81447,87038,151
Total cash invested in real property, net of cash acquired $ 279,380 $178,462$757,833
(1) Excludes $5,522,000 of cash acquired during the year ended December 31, 2015.
(2) The non-cash activity relates to the acquisition of assets previously financed as real estate loans. Please refer to Note 6 for additional information.
(3) The non-cash activity relates to the acquisition of a controlling interest in a portfolio of properties that was historically reported as an unconsolidated property investment.
(4) Represents non-cash consideration accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current period.

Construction Activity

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

Year Ended
December 31, 2017December 31, 2016December 31, 2015
Development projects:
Triple-net$283,472$46,094$104,844
Seniors housing operating3,63418,97919,869
Outpatient medical63,036108,00116,592
Total development projects350,142173,074141,305
Expansion projects10,33611,36338,808
Total construction in progress conversions$360,478$184,437$180,113

At December 31, 2017, future minimum lease payments receivable under operating leases (excluding properties in our seniors housing operating partnerships and excluding any operating expense reimbursements) are as follows (in thousands):

2018$1,098,987
20191,056,731
20201,034,583
2021980,716
2022944,028
Thereafter7,771,145
Totals$12,886,190