The following table summarizes the significant asset acquisitions that occurred in 2021:

(1)

Excludes $10.6 million of land acquisitions, $58.6 million of non-cash acquisitions of facilities previously subject to mortgage loans with Omega in which principal amounts under the loan agreements were reduced or settled in exchange for title to the facilities (See Note 7 – Mortgage Notes Receivable), and $1.2 million of transaction costs incurred related to the non-cash acquisitions.

(2)	Initial annual cash yield reflects the initial annual contractual cash rent divided by the purchase price.

On January 20, 2021, we acquired 24 senior living facilities from Healthpeak Properties, Inc. for $511.3 million. The acquisition involved the assumption of an in-place master lease with Brookdale Senior Living Inc. We recognized approximately $45.0 million of rental income for the year ended December 31, 2021 under this master lease, which includes 24 facilities representing 2,552 operating units.

Construction in progress investments

During the third quarter of 2021, we purchased a real estate property located in Washington, D.C. (not reflected in the table above) for approximately $68.0 million and plan to redevelop the property into a 174 bed ALF. Concurrent with the acquisition, we entered into a single facility lease for this property with Maplewood Senior Living (along with affiliates, “Maplewood”) through August 31, 2045. For accounting purposes, the lease will commence upon the substantial completion of construction of the ALF, which is currently expected to be in the first quarter of 2025. The lease provides for the accrual of financing costs at a rate of 5% per annum during the construction phase. The lease provides for an annual cash yield of 6% in the first year following the completion of construction, increasing to 7% in year two and 8% in year three with 2.5% annual escalators thereafter. We are committed to a maximum funding of $177.7 million for the redevelopment of the real estate property, subject to ordinary development related cost changes (see Note 20 - Commitments and Contingencies).

2020 Acquisitions

The following table summarizes the significant asset acquisitions that occurred in 2020:


	Number of			Total Real Estate		Initial
	Facilities			Assets Acquired		Annual
Period	SNF	ALF	Country/State	(in millions)		Cash Yield⁽¹⁾
Q1	—	2	U.K.	$	12.1	8.00	%
Q1	1	—	IN		7.0	9.50	%
Q2	1	—	OH		6.9	9.50	%
Q4	6	1	VA		78.4	9.50	%
Total	8	3		$	104.4

(1)

Initial annual cash yield reflects the initial annual contractual cash rent divided by the purchase price.

2019 Acquisitions and Other

The following table summarizes the significant transactions that occurred in 2019:


	Number of					Total Real Estate			Initial
	Facilities					Assets Acquired			Annual
Period	SNF	ALF	Specialty	MOB	Country/State	(in millions)			Cash Yield⁽¹⁾
Q1	1	—	—	—	OH	$	11.9	⁽³⁾	12.00	%
Q2	20	1	11	1	CA, CT, IN, NV, SC, TN, TX		440.7	⁽²⁾	9.82	%
Q2	7	1	3	—	PA, VA		131.8	⁽³⁾	9.35	%
Q3	3	—	—	—	NC, VA		24.9		9.50	%
Q4	58	2	—	—	FL, ID, KY, LA, MS, MO, MT, NC		735.2		8.71	%
Total	89	4	14	1		$	1,344.5

(1)	Initial annual cash yield reflects the initial annual contractual cash rent divided by the purchase price.

(2)	The acquisition was accounted for as a business combination. The other 2019 acquisitions were accounted for as asset acquisitions.

(3)	Acquired via a deed-in-lieu of foreclosure.

Encore Portfolio Acquisition

On October 31, 2019, we completed the $757 million portfolio acquisition of 60 facilities (the “Encore Portfolio”). Consideration consisted of approximately $369 million of cash and the assumption of approximately $389 million in mortgage loans guaranteed by HUD. See Note 14 – Borrowing Arrangements for additional information.

The following table highlights the fair value of the assets acquired and liabilities assumed on October 31, 2019:


	(in thousands)
Fair value of net assets acquired:
Real estate assets	$	735,182
Other investments		600
Contractual receivables		2,216
Cash		227
Other assets		28,173
Total investments		766,398
Secured borrowings		(388,627)
Accrued expenses and other liabilities		(8,978)
Fair value of net assets acquired	$	368,793

MedEquities Merger

On May 17, 2019, we completed our acquisition by merger of MedEquities (the “MedEquities Merger”) and its subsidiary operating partnership and the general partner of its subsidiary operating partnership.

In connection with the MedEquities Merger, we issued approximately 7.5 million shares of Omega common stock and paid approximately $63.7 million of cash consideration to former MedEquities stockholders. We borrowed approximately $350 million under our existing senior unsecured revolving credit facility to fund the cash consideration and the repayment of MedEquities’ previously outstanding debt. As a result of the MedEquities Merger, we acquired 33 facilities subject to operating leases, four mortgages, three other investments and an investment in an unconsolidated joint venture. We also acquired other assets and assumed debt and other liabilities. Based on the closing price of our common stock on May 16, 2019, the fair value of the consideration exchanged approximated $346 million.

Our purchase price allocation was finalized during the second quarter of 2020, with no material adjustments recorded. The following table highlights the final fair value of the assets acquired and liabilities assumed on May 17, 2019:


	(in thousands)
Fair value of net assets acquired:
Real estate assets	$	440,690
Mortgage notes receivable		108,097
Other investments		19,192
Investment in unconsolidated joint venture		73,834
Cash		4,067
Contractual receivables		1,002
Other assets ⁽¹⁾		7,698
Total investments		654,580
Debt⁽²⁾		(285,100)
Accrued expenses and other liabilities ⁽³⁾		(23,931)
Fair value of net assets acquired	$	345,549

(1)	Includes approximately $2.5 million in above market lease assets.

(2)

In connection with the MedEquities Merger on May 17, 2019, we assumed a $125.0 million term loan and outstanding borrowings of $160.1 million under MedEquities’ previous revolving credit facility. We repaid the total outstanding balance on both the term loan and the revolving credit facility and terminated the related agreements on May 17, 2019.

(3)	Includes approximately $1.1 million in below market lease liabilities.

The MedEquities facilities acquired in 2019 are included in our results of operations from the date of acquisition. For the period from May 17, 2019 through December 31, 2019, we recognized approximately $35.2 million of total revenue from the assets acquired in connection with the MedEquities Merger. For the year ended December 31, 2019, we incurred approximately $5.1 million of acquisition and merger related costs associated with the MedEquities Merger.

Pro Forma Acquisition Results

The following unaudited pro forma information presents consolidated financial information as if the MedEquities Merger occurred on January 1, 2019. In the opinion of management, all significant necessary adjustments to reflect the effect of the merger have been made. The following pro forma information is not indicative of future operations.


	Pro Forma
	Year Ended December 31, 2019
	(in thousands, except per share amounts, unaudited)

Pro forma revenues	$	950,318
Pro forma net income	$	362,220

Earnings per share – diluted:
Net income – as reported	$	1.58
Net income – pro forma	$	1.60