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Subsequent Events Subsequent Events
3 Months Ended
Mar. 31, 2016
Subsequent Events [Abstract]  
Subsequent Events [Text Block]
SUBSEQUENT EVENTS

On April 1, 2016, we purchased eight skilled nursing facilities totaling 931 beds in Texas for $118,500,000. The facilities are currently operated by NHI’s existing tenant, Legend Healthcare (“Legend”). Concurrent with the acquisition, we amended in-place leases covering our nine other skilled nursing facilities operated by Legend, extending their provisions to the new facilities. The amendment also replaced purchase options that provided for equal sharing of any appreciation in value, within a specified range with purchase options with a price determined at fair value, exercisable at the end of the lease term. Based on our tentative analysis of the in-place options, approximately $6,000,000 of the consideration in the acquisition will likely attach to the canceled provisions.

Legend elected to transition its current skilled nursing operations to a new operator on May 1, 2016, and NHI entered into a new 15-year master lease with affiliates of The Ensign Group, Inc. (“Ensign”) on 15 of the former Legend facilities for an initial annual amount of $17,750,000, plus an annual escalator based on inflation. The lease has two 5-year renewal options. Upon entering the new lease, NHI agreed to sell two existing skilled nursing facilities previously under lease to Legend in Texas totaling 245 beds to Ensign for $24,600,000. The new lease, which includes a corporate guaranty from Ensign, replaces the Legend lease, and, accordingly, the purchase options held by Legend have terminated. For accounting purposes, the transition of our lease from Legend to Ensign will require a non-cash write-off related to the approximate $6,000,000 fair value assigned to the former Legend purchase options and $8,247,000 of accumulated straight-line rent receivable.

As part of this transaction, NHI has committed to purchase four skilled nursing facilities in Texas from Legend for $56,000,000 and lease them to Ensign. The facilities are in various stages of development and the purchase window for the first facility is expected to open in 2017.