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Real Estate Investments
 9 Months Ended
Sep. 30, 2017
Business Combinations [Abstract]  
Real Estate Investments
Real Estate Investments
2017 Acquisitions
The following table details the Company's acquisitions for the nine months ended September 30, 2017 (dollars in millions):
Location
Type (1)
 
Date Acquired
 
Purchase Price
 
Mortgage
Note Payable Assumed (2)
 
Cash
Consideration (3)
 
Real
Estate
 
Other (4)
 
Square
Footage
St. Paul, Minnesota
MOB
 
3/6/17
 
$
13.5

 
$
—

 
$
13.5

 
$
13.3

 
$
0.2

 
34,608

San Francisco, California
MOB
 
6/12/17
 
26.8

 
—

 
26.8

 
26.8

 
—

 
75,649

Washington, D.C.
MOB
 
6/13/17
 
24.0

 
(12.1
)
 
12.5

 
24.8

 
(0.2
)
 
62,379

Los Angeles, California
MOB
 
7/31/17
 
16.3

 
—

 
16.7

 
16.9

 
(0.2
)
 
42,780

Total acquisitions
 
 
 
 
$
80.6

 
$
(12.1
)
 
$
69.5

 
$
81.8

 
$
(0.2
)
 
215,416

______
(1)
MOB = medical office building
(2)
The mortgage note payable assumed in the acquisition does not reflect the fair value adjustments totaling $0.4 million recorded by the Company upon acquisition (included in Other).
(3)
Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.
(4)
Includes assets acquired, liabilities assumed, and intangibles recognized at acquisition.

Subsequent Acquisitions
The Company is under contract to purchase eight medical office buildings in the Atlanta, Georgia market from Meadows & Ohly, LLC and its affiliates for a total purchase price of $193.8 million. On November 1, 2017, the Company acquired four of these properties totaling 288,880 square feet for a total purchase price of $112.1 million. The Company expects to close on the remaining four properties in December 2017.

On November 1, 2017, the Company acquired a 26,345 square foot medical office building in Seattle, Washington for a purchase price of $12.7 million.

2017 Dispositions
The following table details the Company's dispositions for the nine months ended September 30, 2017 (dollars in millions):
Location
Type (1)
 
Date
Disposed
 
Sales Price
 
Closing Adjustments
 
Net
Proceeds
 
Net Real
Estate
Investment
 
Other
(including
receivables)(3)
 
Gain/(Impairment)
 
Square
Footage
Evansville, Indiana
OTH
 
3/6/17
 
$
6.4

 
$
—

 
$
6.4

 
$
1.1

 
$
—

 
$
5.3

 
29,500

Columbus, Georgia (2)
MOB
 
3/7/17
 
0.6

 
—

 
0.6

 
0.6

 
—

 
—

 
12,000

Las Vegas, Nevada (2)
MOB
 
3/30/17
 
5.5

 
(0.7
)
 
4.8

 
2.2

 
0.3

 
2.3

 
18,147

Texas (3 properties)
IRF
 
3/31/17
 
69.5

 
(1.6
)
 
67.9

 
46.9

 
5.2

 
15.8

 
169,722

Chicago, Illinois (2) (4)
MOB
 
6/16/17
 
0.5

 
(0.1
)
 
0.4

 
0.4

 
—

 
—

 
5,100

San Antonio, Texas (2)
IRF
 
6/29/17
 
14.5

 
(0.2
)
 
14.3

 
5.1

 
0.9

 
8.3

 
39,786

Roseburg, Oregon
MOB
 
6/29/17
 
23.2

 
(0.6
)
 
22.6

 
14.5

 
0.3

 
7.8

 
62,246

St. Louis, Missouri
MOB
 
9/7/17
 
2.5

 
(0.1
)
 
2.4

 
7.4

 
0.1

 
(5.1
)
 
79,980

Total dispositions
 
 
 
 
$
122.7

 
$
(3.3
)
 
$
119.4

 
$
78.2

 
$
6.8

 
$
34.4

 
416,481

______
(1)
OTH = other; MOB = medical office building; IRF = inpatient rehabilitation facility
(2)
Previously classified as held for sale.
(3)
Includes straight-line rent receivables, leasing commissions and lease inducements.
(4)
The Company recorded an impairment of approximately $0.3 million in the first quarter of 2017 upon management’s decision to sell. 

Potential Disposition
In October 2017, the Company received notice that a tenant is exercising a purchase option on seven buildings, including five medical office buildings. The seven properties are covered by one purchase option with a stated purchase price of approximately $45.2 million, subject to certain contractual adjustments. The buildings are located in Roanoke, Virginia, and the Company's aggregate net investment was approximately $24.0 million as of September 30, 2017. The closing is expected to occur in April 2018.

Assets Held for Sale
At September 30, 2017 and December 31, 2016, the Company had one and two properties, respectively, classified as held for sale. During the nine months ended September 30, 2017, the Company reclassified four properties to held for sale and five properties were sold. A summary of each of the properties reclassified as held for sale is below:

•
a 78,731 square foot inpatient rehabilitation facility located in Pittsburgh, Pennsylvania reclassified to held for sale in connection with management's decision to sell the property;

•
a 39,786 square foot inpatient rehabilitation facility located in San Antonio, Texas reclassified to held for sale in connection with management's decision to sell the property. The Company sold this property in the second quarter of 2017 and recognized an $8.3 million gain on the disposition;

•
a 5,100 square foot medical office building located in Chicago, Illinois reclassified to held for sale in connection with management's decision to sell the property. In the first quarter of 2017, the Company recorded an impairment charge of $0.3 million. The Company sold this property in the second quarter of 2017 and recognized an immaterial impairment loss on the disposition; and

•
a 79,980 square foot medical office building located in St. Louis, Missouri reclassified to held for sale when the sale became probable based on the expiration of the due diligence period. The Company sold this property in the third quarter of 2017 and recognized a $5.1 million impairment on the disposition.

The table below reflects the assets and liabilities of the properties classified as held for sale and discontinued operations as of September 30, 2017 and December 31, 2016:
(Dollars in thousands)
September 30,
2017
 
December 31,
2016
Balance Sheet data:
 
 
 
Land
$
1,125

 
$
1,362

Buildings, improvements and lease intangibles
18,231

 
4,410

 
19,356

 
5,772

Accumulated depreciation
(10,657
)
 
(2,977
)
Real estate assets held for sale, net
8,699

 
2,795

Other assets, net (including receivables)
73

 
297

Assets held for sale and discontinued operations, net
$
8,772

 
$
3,092

 
 
 
 
Accounts payable and accrued liabilities
$
49

 
$
22

Other liabilities
10

 
592

Liabilities of properties held for sale and discontinued operations
$
59

 
$
614




Discontinued Operations
The following table represents the results of operations of the properties included in discontinued operations on the Company's Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2017 and 2016.
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(Dollars in thousands)
2017
 
2016
 
2017
 
2016
Statements of Income data:
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
Rental income
$
—

 
$
—

 
$
—

 
$
—

 
—

 
—

 
—

 
—

Expenses
 
 
 
 
 
 
 
Property operating
2

 
23

 
19

 
50

Bad debts, net of recoveries
(10
)
 
—

 
(10
)
 
—

 
(8
)
 
23

 
9

 
50

Other Income (Expense)
 
 
 
 
 
 
 
Interest and other income, net
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Discontinued Operations
 
 
 
 
 
 
 
Income (Loss) from discontinued operations
8

 
(23
)
 
(9
)
 
(50
)
Gain on sales of real estate assets
—

 
—

 
5

 
7

Income (Loss) from Discontinued Operations
$
8

 
$
(23
)
 
$
(4
)
 
$
(43
)