WELLTOWER INC. - Annual Report: 2020 (Form 10-K)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 1-8923
WELLTOWER INC.
(Exact name of registrant as specified in its charter)
| Delaware | 34-1096634 | ||||||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| 4500 Dorr Street, | Toledo, | Ohio | 43615 | ||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
(419) 247-2800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
| Common Stock, $1.00 par value | WELL | New York Stock Exchange | ||||||
| 4.800% Notes due 2028 | WELL28 | New York Stock Exchange | ||||||
| 4.500% Notes due 2034 | WELL34 | New York Stock Exchange | ||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate by check mark whether the registrant has filed a report on and attestation of the effectiveness of its internal control over financial reporting under Section 404(b) of Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by registered public accounting firm that prepared or issued its audit report ☑
The aggregate market value of the shares of voting common stock held by non-affiliates of the registrant, computed by reference to the closing sales price of such shares on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second fiscal quarter was $21,561,545,000.
As of January 29, 2021, the registrant had 417,383,039 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for the annual stockholders’ meeting to be held May 6, 2021, are incorporated by reference into Part III.
WELLTOWER INC. AND SUBSIDIARIES
2020 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
| Page | ||||||||
| PART I | ||||||||
| Item 1. | Business | |||||||
| Item 1A. | Risk Factors | |||||||
| Item 1B. | Unresolved Staff Comments | |||||||
| Item 2. | Properties | |||||||
| Item 3. | Legal Proceedings | |||||||
| Item 4. | Mine Safety Disclosures | |||||||
| PART II | ||||||||
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |||||||
| Item 6. | Selected Financial Data | |||||||
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | |||||||
| Item 8. | Financial Statements and Supplementary Data | |||||||
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |||||||
| Item 9A. | Controls and Procedures | |||||||
| Item 9B. | Other Information | |||||||
| PART III | ||||||||
| Item 10. | Directors, Executive Officers and Corporate Governance | |||||||
| Item 11. | Executive Compensation | |||||||
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |||||||
| Item 13. | Certain Relationships and Related Transactions and Director Independence | |||||||
| Item 14. | Principal Accounting Fees and Services | |||||||
| PART IV | ||||||||
| Item 15. | Exhibits and Financial Statement Schedules | |||||||
| Item 16. | Form 10-K Summary | |||||||
| Signature | ||||||||
PART I
Item 1. Business
General
Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower™, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States (“U.S.”), Canada and the United Kingdom (“U.K.”), consisting of seniors housing, post-acute communities and outpatient medical properties. More information is available on the Internet at www.welltower.com. The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.
Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, relationship and geographic location.
References herein to “we,” “us,” “our” or the “company” refer to Welltower Inc., a Delaware corporation, and its subsidiaries unless specifically noted otherwise.
Portfolio of Properties
Please see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – Executive Summary – Company Overview” for a table that summarizes our portfolio as of December 31, 2020.
Property Types
We invest in seniors housing and health care real estate and evaluate our business through three reportable segments: Seniors Housing Operating, Triple-net and Outpatient Medical. For additional information regarding our segments, please see Note 18 to our consolidated financial statements. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 2 to our consolidated financial statements. The following is a summary of our various property types.
Seniors Housing Operating
Our Seniors Housing Operating properties include seniors apartments, independent living and independent supportive living, continuing care retirement communities, assisted living, Alzheimer's/dementia care and include care homes with or without nursing (U.K.), which assist with activities of daily living that preserve a person's mobility and social systems to promote cognitive engagement. Our properties include stand-alone properties that provide one level of service, combination properties that provide multiple levels of service and communities or campuses that provide a wide range of services. Properties are primarily held in joint venture entities with operating partners. We utilize the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the Internal Revenue Code authorizing the RIDEA structure were enacted as part of the Housing and Economic Recovery Act of 2008).
Seniors Apartments Seniors apartments generally refer to age-restricted multi-unit housing with self-contained living units for older adults, usually aged 55+ who are able to care for themselves. Seniors apartments generally do not offer other additional services such as meals.
Independent Living and Independent Supportive Living (Canada) Independent living and independent supportive living generally refers to age-restricted, multifamily properties with central dining that provide residents access to meals and other services such as housekeeping, linen service, transportation and social and recreational activities.
Continuing Care Retirement Communities Continuing care retirement communities typically include a combination of detached homes and properties offering independent living, assisted living and/or long-term/post-acute care services on one campus. These communities appeal to residents because there is no need to relocate when health and medical needs change. Resident payment plans vary, but can include entrance fees, condominium fees and rental fees. Many of these communities also charge monthly maintenance fees in exchange for a living unit, meals and some health services.
Assisted Living Assisted living refers to state-regulated rental properties that provide independent living services, but also provide supportive care from trained employees to residents who require assistance with activities of daily living, including, but not limited to, management of medications, bathing, dressing, toileting, ambulating and eating.
Alzheimer’s/Dementia Care Alzheimer's/Dementia Care refers to state-regulated rental properties that generally provide assisted living and independent living services, but also provide supportive care to residents with memory loss, Alzheimer's
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disease and/or other types of dementia. Amenities vary, but may include enhanced security, specialized design features and memory-enhancing therapies that promote relaxation and help slow cognitive decline.
Care Homes with or without Nursing (U.K.) Care homes without nursing, regulated by the Care Quality Commission ("CQC”), are rental properties that provide essentially the same services as U.S. assisted living. Care homes with nursing, also regulated by the CQC, are licensed daily rate or rental properties where most individuals require 24-hour nursing and/or medical care. Generally, these properties are licensed for various national and local reimbursement programs. Unlike the U.S., care homes with nursing in the U.K. generally do not provide post-acute care.
Our Seniors Housing Operating segment accounted for 67%, 67% and 69% of total revenues for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, we had relationships with 27 operators to manage our Seniors Housing Operating properties. In each instance, our partner provides management services to the properties pursuant to an incentive-based management contract. We rely on our partners to effectively and efficiently manage these properties. For the year ended December 31, 2020, our relationship with Sunrise Senior Living accounted for approximately 37% of our Seniors Housing Operating segment revenues and 25% of our total revenues. Additionally Revera accounted for approximately 12% of our Seniors Housing Operating segment revenues and 8% of our total revenues. Revera owns a controlling interest in Sunrise Senior Living.
Triple-net
Our Triple-net properties offer services including independent living and independent supportive living (Canada), assisted living, continuing care retirement communities, Alzheimer's/dementia care and care homes with or without nursing (U.K.) described above, as well as long-term/post-acute care. We invest primarily through acquisitions, development and joint venture partnerships. Our properties are primarily leased to operators under long-term, triple-net master leases that obligate the tenant to pay all operating costs, utilities, real estate taxes, insurance, building repairs, maintenance costs and all obligations under certain ground leases. We are not involved in property management. Our properties include stand-alone properties that provide one level of service, combination facilities that provide multiple levels of service, and communities or campuses that provide a wide range of services.
Long-Term/Post-Acute Care Facilities Post-acute care is at the leading edge of reducing health care costs while improving quality. These high-impact centers help patients recover from illness or surgery with the goals of getting the patient home and healed faster and reducing hospital readmission rates. Our long-term/post-acute care properties generally offer skilled nursing/post-acute care, inpatient rehabilitation and long-term acute care services. Skilled nursing/post-acute care refers to licensed daily rate or rental properties where most individuals require 24-hour nursing and/or medical care. Generally, these properties are licensed for Medicaid and/or Medicare reimbursement in the U.S. or provincial reimbursement in Canada. All properties offer some level of rehabilitation services. Some properties focus on higher acuity patients and offer rehabilitation units specializing in cardiac, orthopedic, dialysis, neurological or pulmonary rehabilitation. Inpatient rehabilitation properties provide intensive inpatient services after illness, injury or surgery to patients able to tolerate and benefit from three hours of rehabilitation per day. Long-term acute care properties provide inpatient services for patients with complex medical conditions that require more intensive care, monitoring or emergency support than is available in most skilled nursing/post-acute care properties.
Our Triple-net segment accounted for 17%, 19% and 19% of total revenues for the years ended December 31, 2020, 2019 and 2018, respectively. For the year ended December 31, 2020, our revenues related to our relationship with ProMedica Health System ("ProMedica") accounted for approximately 27% of our Triple-net segment revenues and 5% of total revenues. As of December 31, 2020, our relationship with ProMedica was comprised of a master lease for 215 properties owned by a joint venture landlord of which we own 80%. In addition to rent, the master lease requires ProMedica to pay all operating costs, utilities, real estate taxes, insurance, building repairs, maintenance costs and all obligations under certain ground leases. All obligations under the master lease have been guaranteed by ProMedica.
During 2020, Genesis Healthcare ("Genesis") indicated substantial doubt as to their ability to continue as a going concern. As a result, effective July 1, 2020, we have written off all existing straight-line rent receivable balances of $91,025,000 as a reduction to rental income and now recognize rental income from Genesis on a cash basis. For the year ended December 31, 2020, our revenues related to our relationship with Genesis accounted for approximately 4% of our Triple-net segment revenues and 1% of our total revenues. As of December 31, 2020, our relationship with Genesis was comprised of two master leases for 52 properties owned 100% by us, six loans with a balance net of allowance for credit losses of $136,162,000, approximately 9.5 million shares of GEN Series A common stock (representing approximately 9% of total GEN common stock) and a 25% ownership stake in an unconsolidated joint venture that includes two master leases for 28 properties operated by Genesis. In addition to rent, the master leases require Genesis to pay all operating costs, utilities, real estate taxes, insurance, building repairs, maintenance costs and all obligations under certain ground leases. All obligations under the master lease have been guaranteed by FC-GEN Operations Investment, LLC, a subsidiary of Genesis and Genesis is current on all obligations to Welltower through December 31, 2020.
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Outpatient Medical
Outpatient Medical Buildings Demand for outpatient medical services is growing as more procedures are performed safely and efficiently outside the hospital setting. State-of-the-art outpatient centers are needed in accessible, consumer-friendly locations. Our portfolio of outpatient medical buildings is an integral part of creating health care provider connectivity in local markets and generally include physician offices, ambulatory surgery centers, diagnostic facilities, outpatient services and/or labs. Approximately 92% of our outpatient medical building portfolio is affiliated with health systems (buildings directly on or adjacent to hospital campuses or with tenants that are satellite locations for the health system and its physicians). We typically lease our outpatient medical buildings to multiple tenants and provide varying levels of property management. Our Outpatient Medical segment accounted for 16%, 13% and 12% of total revenues for each of the years ended December 31, 2020, 2019 and 2018, respectively. No single tenant exceeds 20% of segment revenues.
Investments
Providing high-quality and affordable health care to an aging global population requires vast investments and infrastructure development. We invest in seniors housing and health care real estate primarily through acquisitions, developments and joint venture partnerships. For additional information regarding acquisition and development activity, please see Note 3 to our consolidated financial statements. Our portfolio creates opportunities to connect partners across the continuum of care and drive efficiency. We seek to diversify our investment portfolio by property type, relationship and geographic location. In determining whether to invest in a property, we focus on the following: (1) the experience of the obligor’s/partner’s management team; (2) the historical and projected financial and operational performance of the property; (3) the credit of the obligor/partner; (4) the security for any lease or loan; (5) the real estate attributes of the building and its location; (6) the capital committed to the property by the obligor/partner; and (7) the operating fundamentals of the applicable industry.
We monitor our investments through a variety of methods determined by the type of property. Our asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division manages and monitors the outpatient medical portfolio with a comprehensive process including review of, among other things, tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs, and market conditions.
Investment Types
Real Property Our properties are primarily comprised of land, buildings, improvements and related rights. Our triple-net properties are generally leased to operators under long-term operating leases. The leases generally have a fixed contractual term of 12 to 15 years and contain one or more five to 15-year renewal options. Certain of our leases also contain purchase options, a portion of which could result in the disposition of properties for less than full market value if the options were to be exercised. Most of our rents are received under triple-net leases requiring the operator to pay rent and all additional charges incurred in the operation of the leased property. The tenants are required to repair, rebuild and maintain the leased properties. Substantially all these operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.
At December 31, 2020, approximately 95% of our triple-net properties were subject to master leases. A master lease is a lease of multiple properties to one tenant entity under a single lease agreement. From time to time, we may acquire additional properties that are then leased to the tenant under the master lease. The tenant is required to make one monthly payment that represents rent on all the properties that are subject to the master lease. Typically, the master lease tenant can exercise its right to purchase the properties or to renew the master lease only with respect to all leased properties at the same time. We believe this bundling feature benefits us because the tenant cannot limit the purchase or renewal to better performing properties and terminate the leasing arrangement with respect to poorer performing properties. This spreads our risk among the entire group of properties within the master lease. The bundling feature should provide a similar advantage to us if the master lease tenant is in bankruptcy. Subject to certain restrictions, a debtor in bankruptcy has the right to assume or reject its unexpired leases and executory contracts. In the context of integrated master leases such as ours, our tenants in bankruptcy would be required to assume or reject the master lease as a whole, rather than deciding on a property by property basis.
Our outpatient medical portfolio is primarily self-managed and consists principally of multi-tenant properties leased to health care providers. Our leases typically include increasers and some form of operating expense reimbursement by the tenant. As of December 31, 2020, 77% of our portfolio included leases with full pass through, 20% with a partial expense reimbursement (modified gross) and 3% with no expense reimbursement (gross). Our outpatient medical leases are non-cancellable operating leases that have a weighted-average remaining term of six years at December 31, 2020 and are often credit enhanced by security deposits, guarantees and/or letters of credit.
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Construction We provide for the construction of properties for tenants primarily as part of long-term operating leases. We capitalize certain interest costs associated with funds used for the construction of properties owned by us. The amount capitalized is based upon the amount advanced during the construction period using the rate of interest that approximates our company-wide cost of financing. Our interest expense is reduced by the amount capitalized. The construction period commences upon funding and terminates upon the earlier of the completion of the applicable property or the end of a specified period. During the construction period, we advance funds to the tenants in accordance with agreed upon terms and conditions which require, among other things, periodic site visits by a company representative. During the construction period, we generally require an additional credit enhancement in the form of payment and performance bonds and/or completion guarantees. At December 31, 2020, we had outstanding construction investments of $487,742,000 and were committed to provide additional funds of approximately $622,108,000 to complete construction for investment properties. We also provide for construction loans which, depending on the terms and conditions, could be treated as loans, real property or investments in unconsolidated entities.
Loans Our real estate loans are typically structured to provide us with interest income, principal amortization and transaction fees. Real estate loans consist of mortgage loans and other real estate loans which are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in the related properties, corporate guarantees and/or personal guarantees. Non-real estate loans are generally corporate loans with no real estate backing. At December 31, 2020, we had outstanding loans, net of allowances, of $683,641,000 with an interest yield of approximately 7.7% per annum. Our yield on loans depends upon a number of factors, including the stated interest rate, average principal amount outstanding during the term of the loan and any interest rate adjustments. The loans outstanding at December 31, 2020 are generally subject to one to 15-year terms with principal amortization schedules and/or balloon payments of the outstanding principal balances at the end of the term.
Investments in Unconsolidated Entities Investments in entities that we do not consolidate but for which we can exercise significant influence over operating and financial policies are reported under the equity method of accounting. Our investments in unconsolidated entities generally represent interests ranging from 10% to 65% in real estate assets. Under the equity method of accounting, our share of the investee’s earnings or losses is included in our consolidated results of operations. The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest inclusive of transaction costs. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded.
In Substance Real Estate Additionally, we provide loans to third parties for the acquisition, development and construction of real estate. Under these arrangements, it is possible that we will participate in the expected residual profits of the project through the sale, refinancing or acquisition of the property. We evaluate the characteristics of each arrangement, including its risks and rewards, to determine whether they are more similar to those associated with a loan or an investment in real estate. Arrangements with characteristics implying real estate joint ventures are treated as in substance real estate investments, accounted for using the equity method, and are presented as investments in unconsolidated entities. We have made loans totaling $333,934,000 related to eight properties as of December 31, 2020, which are classified as in substance real estate investments.
Principles of Consolidation
The consolidated financial statements are in conformity with U.S general accepted accounting principles (“U.S. GAAP”) and include the accounts of our wholly-owned subsidiaries and joint venture entities that we control, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation.
At inception of joint venture transactions, we identify entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary. Accounting Standards Codification Topic 810, "Consolidations", requires enterprises to perform a qualitative approach to determining whether or not a VIE will need to be consolidated. This evaluation is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance.
For investments in joint ventures, U.S. GAAP may preclude consolidation by the sole general partner in certain circumstances based on the type of rights held by the limited partner(s). We assess the limited partners’ rights and their impact on our consolidation conclusions, and we reassess if there is a change to the terms or in the exercisability of the rights of the limited partners, the sole general partner increases or decreases its ownership of limited partnership interests, or there is an increase or decrease in the number of outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited liability companies.
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Borrowing Policies
We utilize a combination of debt and equity to fund investments. Generally, we intend to issue unsecured, fixed-rate public debt with long-term maturities to approximate the maturities on our triple-net leases and investment strategy. For short-term purposes, we may borrow on our primary unsecured credit facility or issue commercial paper. We replace these borrowings with long-term capital such as senior unsecured notes or common stock. When terms are deemed favorable, we may invest in properties subject to existing mortgage indebtedness. In addition, we may obtain secured financing for unleveraged properties in which we have invested or may refinance properties acquired on a leveraged basis. In certain agreements with our lenders, we are subject to restrictions with respect to secured and unsecured indebtedness.
Competition
We compete with other real estate investment trusts, real estate partnerships, private equity and hedge fund investors, banks, insurance companies, finance/investment companies, government-sponsored agencies, taxable and tax-exempt bond funds, health care operators, developers and other investors in the acquisition, development, leasing and financing of health care and seniors housing properties. We compete for investments based on a number of factors including relationships, certainty of execution, investment structures and underwriting criteria. Our ability to successfully compete is impacted by economic and demographic trends, availability of acceptable investment opportunities, our ability to negotiate beneficial investment terms, availability and cost of capital, construction and renovation costs and applicable laws and regulations.
The operators/tenants of our properties compete with properties that provide comparable services in the local markets. Operators/tenants compete for patients and residents based on a number of factors including quality of care, reputation, physical appearance of properties, location, services offered, family preferences (including a preference for home health services instead of residing in one of our communities), physicians, staff and price. Throughout the COVID-19 pandemic, seniors housing operators have experienced broad-based occupancy declines and as a result, we expect competition to increase in 2021 and beyond as operators attempt to fill unoccupied units. We also face competition from other health care facilities for tenants, such as physicians and other health care providers that provide comparable facilities and services.
For additional information on the risks associated with our business, please see “Item 1A — Risk Factors” of this Annual Report on Form 10-K.
Environmental, Social and Governance ("ESG")
We are committed to operating in a responsible, transparent and sustainable manner. Our leadership and Board of Directors (through the Nominating and Governance Committee), oversee and advance our ESG initiatives. They recognize that focusing on ESG engagement, integration and impact benefit our stakeholders and are fundamental to our business. Our corporate responsibility and sustainability strategy is focused on adopting the best ESG practices across our business and we were recognized for our leadership in this space over the past year in the following ways:
•Named by S&P Global in collaboration with RobecoSAM for the third consecutive year in the 2020 edition of The Sustainability Yearbook;
•Named to top 20 percent of Newsweek’s America’s Most Responsible Companies list for the second consecutive year;
•Named to Corporate Responsibility Magazine’s 21st annual 100 Best Corporate Citizens list for the second consecutive year;
•Named to 2020 Dow Jones Sustainability World Index for the third consecutive year and the North American Index for the fifth consecutive year;
•Recognized on Management band level with a “B” score by CDP for taking coordinated action on climate issues;
•Recognized as Energy Star Partner of the Year for the second time;
•Listed on the FTSE4Good Index since 2012;
•Achieved Gold Level 2020 Green Lease Leader status by the Institute for Market Transformation and the U.S. Department of Energy’s Better Buildings Alliance, after several prior years of repeated recognition;
•Named to the Bloomberg Gender-Equality Index for the second consecutive year; and
•Named to the Workplace Health Achievement Index by the American Heart Association for the third consecutive year.
Environmental We strive to reduce our environmental impact by increasing energy and water efficiency, reducing greenhouse gas emissions, investing in projects that reduce energy and water consumption that meet our rate of return thresholds, and focusing on the environmental aspects within our supply chain. After several years of portfolio and program evolution, along with our increased ability to collect data in partnership with our operators and tenants, our property-level sustainability dataset (energy, GHG, water, and waste) is evolving to become a set of tools for benchmarking. Our self-managed Outpatient Medical portfolio is benchmarked in EPA ENERGY STAR Portfolio Manager (ESPM) and we regularly engage with our operators on
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Energy Star, utility bill aggregators, utilities, and others to add to our number of ESPM benchmarked properties throughout our portfolio. As a result, in 2019 we reset and launched new environmental goals that provide a broader and more inclusive representation of our portfolio. We are targeting a 10% reduction in greenhouse gas emissions and energy and water usage by 2025 from our 2018 baseline. As of the end of 2019, we reduced greenhouse gas emissions by 8.5%, energy consumption by 2.1% and water consumption by 5%.
We have comprehensive employee, tenant and vendor engagement programs in place focused on operational strategies to drive energy and water efficiency. In 2019 and 2020, we issued guidance with accompanying training to assist our managers and operators to successfully benchmark their buildings and to engage our tenants to improve energy and water efficiency as well as increase their recycling diversion rates. We continue to not only monitor adherence and compliance with this guidance in connection with our sustainability reporting, but also work to expand its utilization throughout our portfolio.
In December 2019, we issued our inaugural green bond of $500,000,000 of 2.700% notes due 2027. The net proceeds from the offering will be used to fund renewable energy, water conservation, energy efficiency and green building projects. We are the first healthcare REIT to successfully complete a green bond issuance.
We understand that as we continue to make our operations and buildings more sustainable, we also have a responsibility to effectuate the same in our supply chain and our purchasing decisions. We developed a Supplier ESG Survey that was delivered to our highest spend national accounts, which we analyzed and leveraged for compliance and opportunity engagement with suppliers. Additionally, we partner with suppliers that offer take back programs for their products, look for the ENERGY STAR label when purchasing eligible items, seek to purchase office supply products that contain recycled content and purchase paper products that are either Forest Stewardship Council or Sustainable Forestry Initiative certified.
Social We have a number of social initiatives in place that are focused on fostering a more diverse workforce, giving back to our communities and ensuring the health and well-being of our employees, tenants and residents. Over the past six years, since we began reporting the impact of our charitable contributions through programs such as the Welltower Charitable Foundation, we have donated over $40 million to charitable initiatives related to aging, health care, education and the arts.
We value and are committed to our employees. In addition to enhancing progressive talent attraction, development programs and mandatory training for all employees, we have reinforced our already strong commitment to diversity and inclusion through our Diversity Council and the launch of seven new associated ENGs in 2020. These, taken together with other employee initiatives, such as tailored messaging, training and discussions on equality and understanding, support our efforts to compete for and foster talent and inclusiveness in an ever changing workforce.
Governance We have adopted corporate governance practices that meet the dynamic needs of the corporate governance environment. In 2020, we announced changes and appointments to our Board of Directors, resulting in (1) 80% of our Director positions being held by racially and ethnically diverse minorities and women, (2) 50% of our Director positions being held by women, (3) 40% of our Board committees being led by women and (4) the separation of the roles of CEO and Board Chair resulting in the appointment of an independent and racially diverse Chair of the Board. We annually review our policies and procedures and strive to lead through advancement and adherence to impactful areas, such as with our 2020 revision to our human rights policy which included approval by the Board of Directors, no tolerance for modern slavery, and commitment to fair and equal compensation for its employees. Additionally, we improved our already high CDP, Dow Jones Sustainability Index (DJSI), ISS, ISS-ESG, Sustainalytics and Vigeo Eiris scores through enhanced tracking and reporting.
Additional information regarding our ESG programs and initiatives is available in our 2019 Corporate Social Responsibility Report (located on our website at www.welltower.com). Information on our website, including our Corporate Social Responsibility Report or sections thereof, is not incorporated by reference into this Annual Report.
Human Capital
Our employees are our greatest asset. As of December 31, 2020, we had 423 employees (406 located in United States, ten in the United Kingdom, five in Canada and 2 in Luxembourg). We are committed to the success of our people and the unique combination of skills and experiences they bring to achieving our mission.
Employee Development Programs and Performance Management Development through the talent pipeline, recognizing and rewarding performance and providing opportunities for continued growth are the cornerstones of our Human Capital strategy. We offer employees resources, trainings and tools designed to develop future leaders, advance careers and attract and retain talent including but not limited to our rotational associate program, formal mentorship program, manager development training, skill development courses and education assistance. We sustain a high-performance culture by measuring performance, recognizing employee achievements and identifying areas of development and professional growth.
Compensation and Benefits In addition to salary, our compensation and benefits programs include annual short term incentive bonuses, long-term incentive stock plans, a 401(k) plan, an employee stock purchase plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, maternity and caregiver leave, senior wellness leave, employee assistance programs, tuition assistance and health and wellness reimbursement programs, among many others. We annually
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evaluate and benchmark the consistency and competitiveness of our compensation and benefits programs to ensure fair pay practices that reward performance and support the needs of our employees. We also regularly review our compensation practices, both in terms of our overall workforce and by individual employee, to ensure our compensation and benefits programs are fair and equitable.
Health, Safety and Wellness The success of our business is fundamentally connected to the safety and well-being of our employees, tenants and visitors. We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs that support physical, mental and financial well-being. During most of 2020, a large majority of our workforce worked remotely and will continue to do so for the foreseeable future. We have increased leadership updates and other communication, utilizing many forms of technology, to keep employees engaged and informed while out of the office. Additionally, we instituted safety protocols and procedures for essential employees who continued to work in our offices or on-site to manage our properties. We provided access to personal protective equipment, enhanced cleaning and sanitation procedures and required temperature and symptom monitoring. We measure success through monitoring the number of employees that received safety training, measuring progress towards our goal of zero lost time for incidents, and aligning with goals of our signature wellness program ("WELL+Being").
Credit Concentrations Please see Note 9 to our consolidated financial statements.
Geographic Concentrations Please see “Item 2 – Properties” below and Note 18 to our consolidated financial statements.
Certain Government Regulations
United States
Health Law Matters — Generally
Typically, operators of seniors housing facilities do not receive significant funding from government programs and are largely subject to state laws, as opposed to federal laws. Operators of long-term/post-acute care facilities and hospitals do receive significant funding from government programs, and these facilities are subject to extensive regulation, including federal and state laws covering the type and quality of medical and/or nursing care provided, ancillary services (e.g., respiratory, occupational, physical and infusion therapies), qualifications of the administrative personnel and nursing staff, the adequacy of the physical plant and equipment, reimbursement and rate setting and operating policies. In addition, as described below, operators of these facilities are subject to extensive laws and regulations pertaining to health care fraud and abuse, including, but not limited to, the federal Anti-Kickback Statute (“AKS”), the federal Stark Law (“Stark Law”), and the federal False Claims Act (“FCA”), as well as comparable state laws. Hospitals, physician group practice clinics, and other health care providers that operate in our portfolio are subject to extensive federal, state, and local licensure, registration, certification, and inspection laws, regulations, and industry standards, as well as other conditions of participation in federal and state government programs such as Medicare and Medicaid. Further, operators of long-term care facilities are required to have in place compliance and ethics programs that meet the requirements of federal laws and regulations. Our tenants’ failure to comply with applicable laws and regulations could result in, among other things: loss of accreditation; denial of reimbursement; imposition of fines; suspension, decertification, or exclusion from federal and state health care programs; loss of license; or closure of the facility. See risk factors “The requirements of, or changes to, governmental reimbursement programs, such as Medicare or Medicaid, could have a material adverse effect on our obligors’ liquidity, financial condition and results of operations, which could adversely affect our obligors’ ability to meet their obligations to us” and “Our operators’ or tenants’ failure to comply with federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards could adversely affect such operators’ or tenants’ operations, which could adversely affect our operators’ and tenants’ ability to meet their obligations to us” in “Item 1A – Risk Factors” below. Moreover, in light of certain arrangements that Welltower may pursue with healthcare entities who are directly subject to laws and regulations pertaining to health care fraud and abuse, and given that certain of our arrangements are structured under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA"), certain health care fraud and abuse laws and data privacy laws could apply directly to Welltower. See risk factor "We assume operational and legal risks with respect to our properties managed in RIDEA structures that could have a material adverse effect on our business results of operations, and financial condition" in "Item 1A - Risk Factors" below.
Licensing and Certification
The primary regulations that affect long-term and post-acute care facilities are state licensing and registration laws. For example, certain health care facilities are subject to a variety of licensure and certificate of need (“CON”) laws and regulations. Where applicable, CON laws generally require, among other requirements, that a facility demonstrate the need for (1) constructing a new facility, (2) adding beds or expanding an existing facility, (3) investing in major capital equipment or adding new services, (4) changing the ownership or control of an existing licensed facility or (5) terminating services that have been previously approved through the CON process. Certain state CON laws and regulations may restrict the ability of operators to add new properties or expand an existing facility’s size or services. In addition, CON laws may constrain the ability of an operator to transfer responsibility for operating a particular facility to a new operator.
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With respect to licensure, generally our long-term/post-acute care facilities are required to be licensed and certified for participation in Medicare, Medicaid and other federal and state health care programs. The failure of our operators to maintain or renew any required license or regulatory approval as well as the failure of our operators to correct serious deficiencies identified in a compliance survey could require those operators to discontinue operations at a property. In addition, if a property is found to be out of compliance with Medicare, Medicaid or other federal or state health care program conditions of participation, the property operator may be excluded from participating in those government health care programs.
Reimbursement
The reimbursement methodologies applied to health care facilities continue to evolve. Federal and state authorities have considered and implemented and may continue seeking to implement new or modified reimbursement methodologies, including value-based reimbursement methodologies that may negatively impact health care property operations. Likewise, third-party payors may continue imposing greater controls on operators, including through changes in reimbursement rates and fee structures. The impact of any such changes, if implemented, may result in a material adverse effect on our portfolio. No assurance can be given that current revenue sources or levels will be maintained. Accordingly, there can be no assurance that payments under a government health care program are currently, or will be in the future, sufficient to fully reimburse the property operators for their operating and capital expenses.
•Seniors Housing Facilities The majority of the revenues received by the operators of U.S. seniors housing facilities are from private pay sources. The remaining revenue source is primarily Medicaid provided under state waiver programs for home and community-based care. There can be no guarantee that a state Medicaid program operating pursuant to a waiver will be able to maintain its waiver status. Rates paid by self-pay residents are set by the facilities and are determined by local market conditions and operating costs. Generally, facilities receive a higher payment per day for a private pay resident than for a Medicaid beneficiary who requires a comparable level of care. The level of Medicaid reimbursement varies from state to state. Thus, the revenues generated by operators of our assisted living facilities may be adversely affected by payor mix, acuity level, changes in Medicaid eligibility and reimbursement levels.
•Long-Term/Post-Acute Care Facilities The majority of the revenues received by the operators of these facilities are from the Medicare and Medicaid programs, with the balance representing reimbursement payments from private payors and patients. Consequently, changes in federal or state reimbursement policies may adversely affect an operator’s ability to cover its expenses, including our rent or debt service. Long-term/post-acute care facilities are subject to periodic pre- and post-payment reviews and other audits by federal and state authorities. A review or audit of a property operator’s claims could result in recoupments, denials or delay of payments in the future. Due to the significant judgments and estimates inherent in payor settlement accounting, no assurance can be given as to the adequacy of any reserves maintained by our property operators to cover potential adjustments to reimbursements or to cover settlements made to payors.
◦Medicare Reimbursement Generally, long-term/post-acute care facilities are reimbursed by Medicare under prospective payment systems, which generally provide reimbursement based upon a predetermined fixed amount per episode of care and are updated by CMS, an agency of the Department of Health and Human Services (“HHS”) annually. There is a risk under these payment systems that costs will exceed the fixed payments, or that payments may be set below the costs to provide certain items and services. Further, there is risk that Medicare Skilled Nursing Facility ("SNF") payment reforms may impact our tenants and operators. In addition, the HHS Office of Inspector General has released recommendations to address SNF billing practices and Medicare payment rates. If followed, these recommendations regarding SNF payment reform may impact our tenants and operators.
◦Medicaid Reimbursement Many states reimburse SNFs using fixed daily rates, which are applied prospectively based on patient acuity and the historical costs incurred in providing patient care. In most states, Medicaid does not fully reimburse the cost of providing services. Certain states are attempting to slow the rate of Medicaid growth by freezing rates or restricting eligibility and benefits. In addition, Medicaid reimbursement rates may decline if state revenues in a particular state are not sufficient to fund budgeted expenditures.
•Medicare Reimbursement for Physicians, Hospital Outpatient Departments (“HOPDs”), and Ambulatory Surgical Centers (“ASCs”) Changes in reimbursement to physicians, HOPDs and ASCs may further affect our tenants and operators. Generally, Medicare reimburses physicians under the Physician Fee Schedule, while HOPDs and ASCs are reimbursed under prospective payment systems. The Physician Fee Schedule and the HOPD and ASC prospective payment systems are updated annually by CMS. These annual Medicare payment regulations have resulted in lower net pay increases than providers of those services have often expected. In addition, the Medicare and Children’s Health Insurance Program Reauthorization Act of 2015 (“MACRA”) includes payment reductions for providers who do not meet government quality standards. The implementation of pay-for-quality models like those required under MACRA has the potential to produce funding disparities that could adversely impact some provider tenants in outpatient medical buildings and other health care properties. Changes in Medicare Advantage plan payments may also indirectly affect our operators and tenants that contract with Medicare Advantage plans.
•Health Reform Laws The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Reform Laws”) dramatically altered how health care is delivered and reimbursed in
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the U.S. and contained various provisions, including Medicaid expansion and the establishment of Health Insurance Exchanges (“HIEs”) providing subsidized health insurance, that may directly impact us or the operators and tenants of our properties. The status of the Health Reform Laws may be subject to change as a result of political, legislative, regulatory and administrative developments and judicial proceedings. While legislative attempts to completely repeal the Health Reform Laws have been unsuccessful to date, there have been multiple attempts to repeal or amend the Health Reform Laws through legislative action and legal challenges. During the Trump Administration, the former president and U.S. Congress sought to modify, repeal or otherwise invalidate all or portions of the Health Reform Laws. For example, in December 2017, the U.S. Congress passed the Tax Cuts and Jobs Act, which included a provision that eliminates the penalty under the Health Reform Laws’ individual mandate, effective in 2019, and could impact the future state of the HIEs established by the Health Reform Laws. In December 2018, a federal district court in Texas ruled the individual mandate was unconstitutional and could not be severed from the Health Reform Laws. As a result, the court ruled the remaining provisions of the Health Reform Laws were also invalid, though the court declined to issue a preliminary injunction with respect to the Health Reform Laws. In December 2019, the Fifth Circuit Court of Appeals agreed that the individual mandate was unconstitutional, but remanded the case back to the district court to reassess how much of the Health Reform Laws would be damaged without the individual mandate provision, and if the individual mandate could indeed be severed. The Fifth Circuit's decision was appealed to the Supreme Court of the United States, which granted certiorari on these issues and conducted an oral argument in November 2020. This litigation is still ongoing, but places great uncertainty upon the longevity and nature of the Health Reform Laws moving forward. There is also uncertainty with respect to the impact the Biden Administration and the new U.S. Congress may have on health reform including through new legislative, executive order, or regulatory efforts and any changes will likely take time to unfold, and could have an impact on coverage and reimbursement for health care items and services covered by plans that were authorized by the Health Reform Laws. We cannot predict whether the existing Health Reform Laws, or future health care reform legislation, executive order, or regulatory changes, will have a material impact on our operators’ or tenants’ property or business.
Fraud & Abuse Enforcement
Long-term/post-acute care facilities (and seniors housing facilities that receive Medicaid payments) are subject to federal, state, and local laws, regulations, and applicable guidance that govern the operations and financial and other arrangements that may be entered into by health care providers. Certain of these laws, such as the AKS and Stark Law, prohibit direct or indirect payments of any kind for the purpose of inducing or encouraging the referral of patients for medical products or services reimbursable by government health care programs. Other government health program laws require providers to furnish only medically necessary services and submit to the government valid and accurate statements for each service. Our operators and tenants that receive payments from federal health care programs, such as Medicare and Medicaid, are subject to substantial financial penalties under the Civil Monetary Penalties Act and the FCA upon a finding of noncompliance with such laws. In addition, states may also have separate false claims acts, which, among other things, generally prohibit health care providers from filing false claims or making false statements to receive payments. Federal and state FCAs contain "whistleblower" provisions that permit private individuals to bring health care fraud enforcement claims on behalf of the government. Still other laws require providers to comply with a variety of safety, health and other requirements relating to the condition of the licensed property and the quality of care provided. Sanctions for violations of these laws, regulations and other applicable guidance may include, but are not limited to, criminal and/or civil penalties and fines, loss of licensure, immediate termination of government payments, exclusion from any government health care program, damage assessments and imprisonment. In certain circumstances, violation of these rules (such as those prohibiting abusive and fraudulent behavior) with respect to one property may subject other facilities under common control or ownership to sanctions, including exclusion from participation in the Medicare and Medicaid programs, as well as other government health care programs. In the ordinary course of its business, a property operator is regularly subjected to inquiries, investigations and audits by the federal and state agencies that oversee these laws and regulations.
Prosecutions, investigations or whistleblower actions could have a material adverse effect on a property operator’s liquidity, financial condition, and operations, which could adversely affect the ability of the operator to meet its financial obligations to us. In addition, government investigations and enforcement actions brought against the health care industry have increased dramatically over the past several years and are expected to continue. The costs for an operator of a health care property associated with both defending such enforcement actions and the undertakings in settling these actions can be substantial and could have a material adverse effect on the ability of an operator to meet its obligations to us. In addition, Welltower could potentially be directly subject to these health care fraud and abuse laws, as well as potential investigation or enforcement, as a result of our RIDEA-structured arrangements, and certain collaboration or other arrangements we may pursue with stakeholders who are directly subject to these laws.
Federal and State Data Privacy and Security Laws
The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act, and numerous other state and federal laws govern the collection, security, dissemination, use, access to and confidentiality of personal information, including individually identifiable health
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information. Violations of these laws may result in substantial civil and/or criminal fines and penalties. The costs to a business such as ours or to an operator of a health care property associated with developing and maintaining programs and systems to comply with data privacy and security laws, defending against privacy and security related claims or enforcement actions and paying any assessed fines, can be substantial. Moreover, such costs could have a material adverse effect on the ability of an operator to meet its obligations to us. Finally, data privacy and security laws and regulations continue to develop, including with regard to HIPAA and U.S. state privacy laws such as the California Consumer Privacy Act and the new California Privacy Rights Act that will go into effect in 2023. As we use data to better inform our investments and the efficacy of care in our communities, these developments may add potential uncertainty towards compliance obligations, business operations or transactions that depend on data. These new privacy laws may create restrictions or requirements in our, our operators' and other business partners' use, sharing and securing of data. New privacy and security laws could require substantial investment in resources to comply with regulatory changes as privacy and security laws proliferate in divergent ways or impose additional obligations.
United Kingdom
In the U.K., care home services are principally regulated by the Health and Social Care Act 2008 (as amended) and other regulations. This legislation subjects service providers to a number of legally binding “Fundamental Standards” and requires, amongst other things, that all persons carrying out “Regulated Activities” in the U.K., and the managers of such persons, be registered. Providers of care home services are also subject (as data controllers) to laws governing their use of personal data (including in relation to their employees, clients and recipients of their services). These laws currently take the form of the U.K.’s Data Protection Act 2018 and the U.K. General Data Protection Regulation (collectively “U.K. DP Laws”). U.K. DP Laws impose a significant number of obligations on controllers with the potential for fines of up to 4% of annual worldwide turnover or €17.50 million, whichever is greater. Entities incorporated in or carrying on a business in the U.K., as well as individuals residing in the U.K., are also subject to the U.K. Bribery Act 2010. The U.K. has national minimum wage legislation with a maximum fine for non-payment of £20,000 per worker and employers who fail to pay will be banned from being a company director for up to 15 years. In addition, there is a bill currently going through the U.K. Parliament which will require a care home provider, where entering into a contract for the provision of healthcare or social care services with a local public authority, to enter into mandatory contractual terms to provide the local public authority with evidence that it pays the national minimum wage to all of its employees engaged in the provision of services for which the provider has contracted for (e.g., a national minimum wage record). Further, the Working Time and Holiday Pay Bill 2019-2021 is currently going through the U.K. Parliament, which makes provision for the expiration of the Working Time Regulations 1998, provides for additional regulations governing working time and makes provisions for holiday pay for employees.
The U.K. exited from the EU (“Brexit”) on January 31, 2020. Prior to the end of the Brexit Transition Period on December 31, 2020, the EU and U.K. agreed to a Trade and Cooperation on December 24, 2020, which has been approved by the U.K. Parliament to enter into force, which is currently pending. The impact of Brexit on the U.K. health and care workforce will depend on future migration policy and the barriers or incentives to live in the U.K.
Canada
Senior living residences in Canada are provincially regulated. Within each province, there are different categories for senior living residences that are generally based on the level of care sought and/or required by a resident (e.g. assisted or retirement living, senior living residences, residential care, long-term care). In some of these categories and depending on the province, residences may be government funded, or the individual residents may be eligible for a government subsidy, while other residences are exclusively private-pay. The governing legislation and regulations vary by province, but generally the object of the laws is to set licensing requirements and minimum standards for senior living residences, and regulate operations. These laws empower regulators in each province to take a variety of steps to ensure compliance, conduct inspections, issue reports and generally regulate the industry.
Our operations in Canada are subject to privacy legislation, including, in certain provinces, privacy laws specifically related to personal health information. Although the obligations of senior living residences in the various provinces differ, they all include the obligation to protect personal information. Under some of these laws, notification to the regulator in the event of an actual or suspected privacy breach is mandatory. The powers of privacy regulators and penalties for violations of privacy law vary according to the applicable law or are left to the courts. Senior living residences may also be subject to laws pertaining to residential tenancy, provincial and/or municipal laws applicable to fire safety, food services, zoning, occupational health and safety, public health and the provision of community health care and funded long-term/post-acute care.
Taxation
The following summary of the taxation of the company and the material U.S. federal income tax consequences to the holders of our debt and equity securities is for general information only and is not tax advice. This summary does not address all aspects of taxation that may be relevant to certain types of holders of stock or securities (including, but not limited to, insurance
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companies, tax-exempt entities, financial institutions or broker-dealers, persons holding shares of common stock as part of a hedging, integrated conversion, or constructive sale transaction or a straddle, traders in securities that use a mark-to-market method of accounting for their securities, investors in pass-through entities and foreign corporations and persons who are not citizens or residents of the United States).
This summary does not discuss all of the aspects of U.S. federal income taxation that may be relevant to you in light of your particular investment or other circumstances. In addition, this summary does not discuss any state or local income taxation or foreign income taxation or other foreign tax consequences. This summary is based on current U.S. federal income tax laws. A discussion of the potential implications to the Company of the Tax Act is provided at the end of this summary below. Subsequent developments in U.S. federal income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income tax consequences of purchasing, owning and disposing of our securities as set forth in this summary. Before you purchase our securities, you should consult your own tax advisor regarding the particular U.S. federal, state, local, foreign and other tax consequences of acquiring, owning and selling our securities.
General
We elected to be taxed as a real estate investment trust (a “REIT”) commencing with our first taxable year. We intend to continue to operate in such a manner as to qualify as a REIT, but there is no guarantee that we will qualify or remain qualified as a REIT for subsequent years. Qualification and taxation as a REIT depends upon our ability to meet a variety of qualification tests imposed under U.S. federal income tax law with respect to our income, assets, distributions and share ownership, as discussed below under “Qualification as a REIT.” There can be no assurance that we will qualify or remain qualified as a REIT.
In any year in which we qualify as a REIT, in general, we will not be subject to U.S. federal income tax on that portion of our REIT taxable income or capital gain that is distributed to stockholders. We may, however, be subject to tax at normal corporate rates on any taxable income or capital gain not distributed. If we elect to retain and pay income tax on our net capital gain, stockholders would be taxed on their proportionate share of our undistributed net capital gain and would receive a refundable credit for their share of any taxes paid by us on such gain.
Despite the REIT election, we may be subject to U.S. federal income and excise tax as follows:
•To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates;
•If we have net income from the sale or other disposition of “foreclosure property” that is held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, such income will be taxed at the highest corporate rate;
•Any net income from prohibited transactions (which are, in general, sales or other dispositions of property held primarily for sale to customers in the ordinary course of business, other than dispositions of foreclosure property) will be subject to a 100% tax;
•If we fail to satisfy either the 75% or 95% gross income tests (as discussed below), but nonetheless maintain our qualification as a REIT because certain other requirements are met, we will be subject to a 100% tax on an amount equal to (1) the gross income attributable to the greater of (i) 75% of our gross income over the amount of qualifying gross income for purposes of the 75% gross income test (discussed below) or (ii) 95% of our gross income over the amount of qualifying gross income for purposes of the 95% gross income test (discussed below) multiplied by (2) a fraction intended to reflect our profitability;
•If we fail to distribute during each year at least the sum of (1) 85% of our REIT ordinary income for the year, (2) 95% of our REIT capital gain net income for such year (other than capital gain that we elect to retain and pay tax on) and (3) any undistributed taxable income from preceding periods, we will be subject to a 4% excise tax on the excess of such required distribution over amounts actually distributed; and
•We will be subject to a 100% tax on certain amounts from certain transactions involving our “taxable REIT subsidiaries” that are not conducted on an arm’s length basis. See “Qualification as a REIT - Investments in Taxable REIT Subsidiaries.
If we acquire any assets from a corporation, which is or has been a “C” corporation, in a carryover basis transaction (including where a “C” corporation elects REIT status), we could be liable for specified liabilities that are inherited from the “C” corporation. A “C” corporation is generally defined as a corporation that is required to pay full corporate level U.S. federal income tax. If we recognize gain on the disposition of the assets during the five-year period beginning on the date on which the assets were acquired by us, then, to the extent of the assets’ “built-in gain” (e.g., the excess of the fair market value of the asset over the adjusted tax basis of the asset, in each case determined as of the beginning of the five-year period), we will be subject to tax on the gain at the highest regular corporate rate applicable. The results described in this paragraph with respect to the recognition of built-in gain assume that the “C” corporation did not make and was not treated as making an election to treat the built-in gain assets as sold to an unrelated party. For those properties that are subject to the built-in gains tax, the potential
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amount of built-in gains tax will be an additional factor when considering a possible sale of the properties within the five-year period beginning on the date on which the properties were acquired by us. See Note 19 to our consolidated financial statements for additional information regarding the built-in gains tax.
Qualification as a REIT
A REIT is defined as a corporation, trust or association:
1.which is managed by one or more trustees or directors;
2.the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest;
3.which would be taxable as a domestic corporation but for the U.S. federal income tax law relating to REITs;
4.which is neither a financial institution nor an insurance company;
5.the beneficial ownership of which is held by 100 or more persons in each taxable year of the REIT except for its first taxable year;
6.not more than 50% in value of the outstanding stock of which is owned during the last half of each taxable year, excluding its first taxable year, directly, indirectly or constructively, by or for five or fewer individuals (which includes certain entities) (the "Five or Fewer Requirement"); and
7. which meets certain income and asset tests described below.
Conditions (1) to (4), inclusive, must be met during the entire taxable year and condition (5) must be met during at least 335 days of a taxable year of 12 months or during a proportionate part of a taxable year of less than 12 months. For purposes of conditions (5) and (6), pension funds and certain other tax-exempt entities are treated as individuals, subject to a “look-through” exception in the case of condition (6).
Based on publicly available information, we believe we have satisfied the share ownership requirements set forth in (5) and (6) above. In addition, Article VI of our by-laws provides for restrictions regarding ownership and transfer of shares. These restrictions are intended to assist us in continuing to satisfy the share ownership requirements described in (5) and (6) above but may not ensure that we will, in all cases, be able to satisfy such requirements.
We have complied with, and will continue to comply with, regulatory rules to send annual letters to certain of our stockholders requesting information regarding the actual ownership of our stock. If, despite sending the annual letters, we do not know, or after exercising reasonable diligence would not have known, whether we failed to meet the Five or Fewer Requirement, we will be treated as having met the Five or Fewer Requirement. If we fail to comply with these regulatory rules, we will be subject to a monetary penalty. If our failure to comply were due to intentional disregard of the requirement, the penalty would be increased. However, if our failure to comply were due to reasonable cause and not willful neglect, no penalty would be imposed.
We may own a number of properties through wholly owned subsidiaries. A corporation will qualify as a “qualified REIT subsidiary” if 100% of its stock is owned by a REIT, and the REIT does not elect to treat the subsidiary as a taxable REIT subsidiary. A “qualified REIT subsidiary” will not be treated as a separate corporation for U.S. federal income tax purposes, and all assets, liabilities and items of income, deductions and credits of a “qualified REIT subsidiary” will be treated as assets, liabilities and items (as the case may be) of the REIT for U.S. federal income tax purposes. A “qualified REIT subsidiary” is not subject to U.S. federal income tax, and our ownership of the voting stock of a qualified REIT subsidiary will not violate the restrictions against ownership of securities of any one issuer which constitute more than 10% of the value or total voting power of such issuer or more than 5% of the value of our total assets, as described below under “- Asset Tests.”
If we invest in an entity treated as a partnership for U.S. federal income tax purposes, we will be deemed to own a proportionate share of the entity’s assets. Likewise, we will be treated as receiving our share of the income and loss of the entity, and the gross income will retain the same character in our hands as it has in the hands of the entity. These “look-through” rules apply for purposes of the income tests and assets tests described below.
The deduction of business interest is limited to 30% (50% in the case of taxable years beginning in 2019 or 2020) of adjusted taxable income, which may limit the deductibility of interest expense by us, our taxable REIT subsidiaries, or our joint venture and partnership arrangements. A “real property trade or business” may irrevocably elect out of the applicability of the limitation, but if it does so it must use the less favorable alternative depreciation system to depreciate real property used in the trade or business. Regulations provide guidance on how to allocate interest deductions among multiple trades or businesses and contain special rules, including a safe harbor, regarding the allocation of a REIT’s interest deductions to a “real property trade or business.”
Income Tests There are two separate percentage tests relating to our sources of gross income that we must satisfy each taxable year:
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•At least 75% of our gross income (excluding gross income from certain sales of property held primarily for sale) generally must be directly or indirectly derived each taxable year from “rents from real property,” other income from investments relating to real property or mortgages on real property or certain income from qualified temporary investments.
•At least 95% of our gross income (excluding gross income from certain sales of property held primarily for sale) generally must be directly or indirectly derived each taxable year from any of the sources qualifying for the 75% gross income test and from dividends (including dividends from taxable REIT subsidiaries) and interest.
Income from hedging and foreign currency transactions is excluded from the 95% and 75% gross income tests if certain requirements are met but otherwise will constitute gross income which does not qualify under the 95% or 75% gross income tests.
Rents received by us will qualify as “rents from real property” for purposes of satisfying the gross income tests for a REIT only if several conditions are met:
•The amount of rent must not be based in whole or in part on the income or profits of any person, although rents generally will not be excluded merely because they are based on a fixed percentage or percentages of receipts or sales.
•Rents received from a tenant will not qualify as rents from real property if the REIT, or an owner of 10% or more of the REIT, also directly or constructively owns 10% or more of the tenant, unless the tenant is our taxable REIT subsidiary and certain other requirements are met with respect to the real property being rented.
•If rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent received under the lease, then the portion of rent attributable to such personal property will not qualify as “rents from real property.”
•For rents to qualify as rents from real property, we generally must not furnish or render services to tenants, other than through a taxable REIT subsidiary or an “independent contractor” from whom we derive no income, except that we may directly provide services that are usually or customarily rendered in the geographic area in which the property is located in connection with the rental of real property for occupancy only or are not otherwise considered rendered to the occupant for his convenience.
•We may lease “qualified health care properties” on an arm’s-length basis to a taxable REIT subsidiary if the property is operated on behalf of such subsidiary by a person who qualifies as an “independent contractor” and who is, or is related to a person who is, actively engaged in the trade or business of operating health care facilities for any person unrelated to us or our taxable REIT subsidiary (such person, an “eligible independent contractor”). If this is the case, the rent that the REIT receives from the taxable REIT subsidiary generally will be treated as “rents from real property.” A “qualified health care property” includes any real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility that extends medical or nursing or ancillary services to patients and is operated by a provider of such services that is eligible for participation in the Medicare program with respect to such facility.
A REIT is permitted to render a de minimis amount of impermissible services to tenants and still treat amounts received with respect to that property as rent from real property. The amount received or accrued by the REIT during the taxable year for the impermissible services with respect to a property may not exceed 1% of all amounts received or accrued by the REIT directly or indirectly from the property. The amount received for any service or management operation for this purpose shall be deemed to be not less than 150% of the direct cost of the REIT in furnishing or rendering the service or providing the management or operation. Furthermore, impermissible services may be furnished to tenants by a taxable REIT subsidiary subject to certain conditions, which would permit us to still treat rents received with respect to the property as rent from real property.
The term “interest” generally does not include any amount if the determination of the amount depends in whole or in part on the income or profits of any person, although an amount generally will not be excluded from the term “interest” solely by reason of being based on a fixed percentage of receipts or sales.
If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may nevertheless qualify as a REIT for such year if we are eligible for certain relief provisions provided by the Internal Revenue Code. These relief provisions generally will be available if (1) following our identification of the failure, we file a schedule for such taxable year describing each item of our gross income, and (2) the failure to meet such tests was due to reasonable cause and not due to willful neglect. It is not now possible to determine the circumstances under which we may be entitled to the benefit of these relief provisions. If these relief provisions apply, a 100% tax is imposed on an amount equal to (1) the gross income attributable to (i) 75% of our gross income over the amount of qualifying gross income for purposes of the 75% income test and (ii) 95% of our gross income over the amount of qualifying gross income for purposes of the 95% income test, multiplied by (2) a fraction intended to reflect our profitability. The Secretary of the Treasury is given broad authority to determine whether particular items of income or gain qualify under the 75% and 95% gross income tests and to exclude items from the measure of gross income for such purposes.
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Asset Tests Within 30 days after the close of each quarter of our taxable year, we must also satisfy several tests relating to the nature and diversification of our assets determined in accordance with generally accepted accounting principles. At least 75% of the value of our total assets must be represented by real estate assets (including interests in real property, interests in mortgages on real property or on interests in real property, shares in other REITs and debt instruments issued by publicly offered REITs), cash, cash items (including receivables arising in the ordinary course of our operation), government securities and qualified temporary investments. Although the remaining 25% of our assets generally may be invested without restriction, we are prohibited from owning securities representing more than 10% of either the vote (the “10% vote test”) or value (the “10% value test”) of the outstanding securities of any issuer other than a qualified REIT subsidiary, another REIT or a taxable REIT subsidiary. Further, no more than 20% of our total assets may be represented by securities of one or more taxable REIT subsidiaries (the “20% asset test”) and no more than 5% of the value of our total assets may be represented by securities of any non-governmental issuer other than a qualified REIT subsidiary (the “5% asset test”), another REIT or a taxable REIT subsidiary. Each of the 10% vote test, the 10% value test and the 20% and 5% asset tests must be satisfied at the end of each quarter. There are special rules which provide relief if the value-related tests are not satisfied due to changes in the value of the assets of a REIT.
Certain items are excluded from the 10% value test, including: (1) straight debt securities meeting certain requirements; (2) any loan to an individual or an estate; (3) any rental agreement described in Section 467 of the Internal Revenue Code, other than with a “related person” (4) any obligation to pay rents from real property; (5) certain securities issued by a state or any subdivision thereof, the District of Columbia, a foreign government, or any political subdivision thereof, or the Commonwealth of Puerto Rico; (6) any security issued by a REIT; and (7) any other arrangement that, as determined by the Secretary of the Treasury, is excepted from the definition of security (“excluded securities”). If a REIT, or its taxable REIT subsidiary, holds (1) straight debt securities of a corporate or partnership issuer and (2) securities of such issuer that are not excluded securities and have an aggregate value greater than 1% of such issuer’s outstanding securities, the straight debt securities will be included in the 10% value test.
A REIT’s interest as a partner in a partnership is not treated as a security for purposes of applying the 10% value test to securities issued by the partnership. Further, any debt instrument issued by a partnership that is not an excluded security will not be a security for purposes of applying the 10% value test (1) to the extent of the REIT’s interest as a partner in the partnership or (2) if at least 75% of the partnership’s gross income (excluding gross income from prohibited transactions) would qualify for the 75% gross income test. For purposes of the 10% value test, a REIT’s interest in a partnership’s assets is determined by the REIT’s proportionate interest in any securities issued by the partnership (other than the excluded securities described in the preceding paragraph).
If a REIT or its “qualified business unit” uses a foreign currency as its functional currency, the term “cash” includes such foreign currency, but only to the extent such foreign currency is (i) held for use in the normal course of the activities of the REIT or “qualified business unit” which give rise to items of income or gain that are included in the 95% and 75% gross income tests or are directly related to acquiring or holding assets qualifying under the 75% asset test, and (ii) not held in connection with dealing or engaging in substantial and regular trading in securities.
With respect to corrections of failures as to violations of the 10% vote test, the 10% value test or the 5% asset test, a REIT may avoid disqualification as a REIT by disposing of sufficient assets to cure a violation due to the ownership of assets that do not exceed the lesser of 1% of the REIT’s assets at the end of the relevant quarter or $10,000,000, provided that the disposition occurs within six months following the last day of the quarter in which the REIT first identified the assets. For violations of any of the REIT asset tests due to reasonable cause and not willful neglect that exceed the thresholds described in the preceding sentence, a REIT can avoid disqualification as a REIT after the close of a taxable quarter by taking certain steps, including disposition of sufficient assets within the six month period described above to meet the applicable asset test, paying a tax equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net income generated by the non-qualifying assets during the period of time that the assets were held as non-qualifying assets and filing a schedule with the Internal Revenue Service that describes the non-qualifying assets.
Investments in Taxable REIT Subsidiaries REITs may own more than 10% of the voting power and value of securities in taxable REIT subsidiaries. Unlike a qualified REIT subsidiary, other disregarded entity or partnership, the income and assets of a taxable REIT subsidiary are not attributable to the REIT for purposes of satisfying the income and asset ownership requirements applicable to REIT qualification. We and any taxable corporate entity in which we own an interest are allowed to jointly elect to treat such entity as a “taxable REIT subsidiary.”
Certain of our subsidiaries have elected taxable REIT subsidiary status. Taxable REIT subsidiaries are subject to full corporate level U.S. federal taxation on their earnings but are permitted to engage in certain types of activities that cannot be performed directly by REITs without jeopardizing their REIT status. Our taxable REIT subsidiaries will attempt to minimize the amount of these taxes, but there can be no assurance whether or the extent to which measures taken to minimize taxes will be successful. To the extent our taxable REIT subsidiaries are required to pay U.S. federal, state or local taxes, the cash available for distribution as dividends to us from our taxable REIT subsidiaries will be reduced.
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The Internal Revenue Service may redetermine amounts from transactions between a REIT and its taxable REIT subsidiary where there is a lack of arm’s-length dealing between the parties. Any taxable income allocated to, or deductible expenses allocated away, from a taxable REIT subsidiary would increase its tax liability. Further, certain amounts from certain transactions involving a REIT and its taxable REIT subsidiaries could be subject to a 100% tax if not conducted on an arm’s length basis. Additional taxable REIT subsidiary elections may be made in the future for additional entities in which we obtain an interest.
Annual Distribution Requirements In order to avoid being taxed as a regular corporation, we are required to make distributions (other than capital gain distributions) to our stockholders which qualify for the dividends paid deduction in an amount at least equal to (1) the sum of (i) 90% of our “REIT taxable income” (computed without regard to the dividends paid deduction and our net capital gain) and (ii) 90% of the after-tax net income, if any, from foreclosure property, minus (2) a portion of certain items of non-cash income. These distributions must be paid in the taxable year to which they relate, or in the following taxable year if declared before we timely file our tax return for that year and if paid on or before the first regular distribution payment after such declaration. Prior to 2014, with respect to all REITs the amount distributed could not be preferential. This means that every stockholder of the class of stock to which a distribution is made must be treated the same as every other stockholder of that class, and no class of stock may be treated otherwise than in accordance with its dividend rights as a class (the “preferential dividend rule”). Beginning in tax years after 2014, the preferential dividend rule no longer applies to publicly offered REITs, however, the rule is still applicable to other entities taxed as REITs, which would include several of our subsidiaries. To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates. As discussed above, we may be subject to an excise tax if we fail to meet certain other distribution requirements. We believe we have satisfied the annual distribution requirements for the year of our initial REIT election and each year thereafter through the year ended December 31, 2020. Although we intend to make timely distributions sufficient to satisfy these annual distribution requirements for subsequent years, economic, market, legal, tax or other factors could limit our ability to meet those requirements. See “Item 1A - Risk Factors.”
It is also possible that, from time to time, we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement, or to distribute such greater amount as may be necessary to avoid income and excise taxation, due to, among other things, (1) timing differences between (i) the actual receipt of income and actual payment of deductible expenses and (ii) the inclusion of income and deduction of expenses in arriving at our taxable income, or (2) the payment of severance benefits that may not be deductible to us. In the event that timing differences occur, we may find it necessary to arrange for borrowings or, if possible, pay dividends in the form of taxable stock dividends in order to meet the distribution requirement.
Under certain circumstances, including in the event of a deficiency determined by the Internal Revenue Service, we may be able to rectify a resulting failure to meet the distribution requirement for a year by paying “deficiency dividends” to stockholders in a later year, which may be included in our deduction for distributions paid for the earlier year. Thus, we may be able to avoid being disqualified as a REIT and/or taxed on amounts distributed as deficiency dividends; however, we will be required to pay applicable penalties and interest based upon the amount of any deduction taken for deficiency dividend distributions.
Failure to Qualify as a REIT
If we fail to qualify for taxation as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates. Distributions to stockholders in any year in which we fail to qualify as a REIT will not be deductible nor will any particular amount of distributions be required to be made in any year. All distributions to stockholders will be taxable as dividends to the extent of current and accumulated earnings and profits allocable to these distributions and, subject to certain limitations, will be eligible for the dividends received deduction for corporate stockholders. Unless entitled to relief under specific statutory provisions, we also will be disqualified from taxation as a REIT for the four taxable years following the year during which qualification was lost. It is not possible to state whether in all circumstances we would be entitled to statutory relief. Failure to qualify for even one year could result in our need to incur indebtedness or liquidate investments in order to pay potentially significant resulting tax liabilities.
In addition to the relief described above under “Income Tests” and “Asset Tests,” relief is available in the event that we violate a provision of the Internal Revenue Code that would result in our failure to qualify as a REIT if: (1) the violation is due to reasonable cause and not due to willful neglect; (2) we pay a penalty of $50,000 for each failure to satisfy the provision; and (3) the violation does not include a violation described under “Income Tests” or “Asset Tests” above. It is not now possible to determine the circumstances under which we may be entitled to the benefit of these relief provisions.
U.S. Federal Income Taxation of Holders of Our Stock
Treatment of Taxable U.S. Stockholders The following summary applies to you only if you are a “U.S. stockholder.” A “U.S. stockholder” is a holder of shares of stock who, for U.S. federal income tax purposes, is:
•a citizen or resident of the United States;
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•an entity classified as a corporation or partnership, created or organized in or under the laws of the United States or of any political subdivision of the United States, including any state;
•an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
•a trust, if, in general, a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons, within the meaning of the Internal Revenue Code, has the authority to control all of the trust’s substantial decisions.
So long as we qualify for taxation as a REIT, distributions on shares of our stock made out of the current or accumulated earnings and profits allocable to these distributions (and not designated as capital gain dividends) will be taxable as dividends for U.S. federal income tax purposes. None of these distributions will be eligible for the dividends received deduction for U.S. corporate stockholders.
Generally, the current maximum marginal rate of tax payable by individuals on dividends received from corporations that are subject to a corporate level of tax is 20%. Except in limited circumstances, this tax rate will not apply to dividends paid to you by us on our shares, because generally we are not subject to U.S. federal income tax on the portion of our REIT taxable income or capital gains distributed to our stockholders. The reduced maximum U.S. federal income tax rate will apply to that portion, if any, of dividends received by you with respect to our shares that are attributable to: (1) dividends received by us from non-REIT corporations or other taxable REIT subsidiaries; (2) income from the prior year with respect to which we were required to pay U.S. federal corporate income tax during the prior year (if, for example, we did not distribute 100% of our REIT taxable income for the prior year); or (3) the amount of any earnings and profits distributed by us and accumulated in a non-REIT year.
Although the preferential 20% rate on qualified dividends is generally not applicable to dividends to our shareholders, the Internal Revenue Code provides for a deduction from income for individuals, trusts and estates for 20% of taxable REIT dividends not eligible for the preferential rate, excluding capital gain dividends. This deduction is not taken into account for purposes of determining the 3.8% tax on net investment income (described below) and, unlike the preferential rate, expires after 2025.
Distributions that are designated as capital gain dividends will be taxed as long-term capital gains (to the extent they do not exceed our actual net capital gain for the taxable year), without regard to the period for which you held our stock. However, if you are a corporation, you may be required to treat a portion of some capital gain dividends as ordinary income.
If we elect to retain and pay income tax on any net capital gain and designate such amount in a timely notice to you, you would include in income, as long-term capital gain, your proportionate share of this net capital gain. You would also receive a refundable tax credit for your proportionate share of the tax paid by us on such retained capital gains, and you would have an increase in the basis of your shares of our stock in an amount equal to your includable capital gains less your share of the tax deemed paid.
You may not include in your U.S. federal income tax return any of our net operating losses or capital losses. U.S. federal income tax rules may also require that certain minimum tax adjustments and preferences be apportioned to you. In addition, any distribution declared by us in October, November or December of any year on a specified date in any such month shall be treated as both paid by us and received by you on December 31 of that year, provided that the distribution is actually paid by us no later than January 31 of the following year.
We will be treated as having sufficient earnings and profits to treat as a dividend any distribution up to the amount required to be distributed in order to avoid imposition of the 4% excise tax discussed under “General” and “Qualification as a REIT - Annual Distribution Requirements” above. As a result, you may be required to treat as taxable dividends certain distributions that would otherwise result in a tax-free return of capital. Moreover, any “deficiency dividend” will be treated as a dividend (an ordinary dividend or a capital gain dividend, as the case may be), regardless of our earnings and profits. Any other distributions in excess of current or accumulated earnings and profits will generally not be taxable to you to the extent these distributions do not exceed the adjusted tax basis of your shares of our stock. You will be required to reduce the tax basis of your shares of our stock by the amount of these distributions until the basis has been reduced to zero, after which these distributions will be taxable as capital gain, if the shares of our stock are held as capital assets. The tax basis as so reduced will be used in computing the capital gain or loss, if any, realized upon the sale of the shares of our stock. Any loss upon a sale or exchange of shares of our stock which were held for six months or less (after application of certain holding period rules) will generally be treated as a long-term capital loss to the extent you previously received capital gain distributions with respect to these shares of our stock.
Upon the sale or exchange of any shares of our stock to or with a person other than us or a sale or exchange of all shares of our stock (whether actually or constructively owned) with us, you will generally recognize gain or loss equal to the difference between the amount realized on the sale or exchange and your adjusted tax basis in these shares of our stock. This gain or loss will be capital gain or loss if you held these shares of our stock as a capital asset.
If we redeem any of your shares in us, the treatment can only be determined on the basis of particular facts at the time of redemption. In general, you will recognize gain or loss (as opposed to dividend income) equal to the difference between the amount received by you in the redemption and your adjusted tax basis in your shares redeemed if such redemption: (1) results
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in a “complete termination” of your interest in all classes of our equity securities; (2) is a “substantially disproportionate redemption” or (3) is “not essentially equivalent to a dividend” with respect to you. In applying these tests, you must take into account your ownership of all classes of our equity securities (e.g., common stock, preferred stock, depositary shares and warrants). You also must take into account any equity securities that are considered to be constructively owned by you.
If, as a result of a redemption by us of your shares, you no longer own (either actually or constructively) any of our equity securities or only own (actually and constructively) an insubstantial percentage of our equity securities, then it is probable that the redemption of your shares would be considered “not essentially equivalent to a dividend” and, thus, would result in gain or loss to you. However, whether a distribution is “not essentially equivalent to a dividend” depends on all of the facts and circumstances, and if you rely on any of these tests at the time of redemption, you should consult your tax advisor to determine their application to the particular situation.
Generally, if the redemption does not meet the tests described above, then the proceeds received by you from the redemption of your shares will be treated as a distribution taxable as a dividend to the extent of the allocable portion of current or accumulated earnings and profits. If the redemption is taxed as a dividend, your adjusted tax basis in the redeemed shares will be transferred to any other shareholdings in us that you own. If you own no other shareholdings in us, under certain circumstances, such basis may be transferred to a related person, or it may be lost entirely.
Gain from the sale or exchange of our shares held for more than one year is generally taxed at a maximum long-term capital gain rate of 20% in the case of stockholders who are individuals and 21% in the case of stockholders that are corporations. Pursuant to Internal Revenue Service guidance, we may classify portions of our capital gain dividends as eligible for specific treatment provided under the Internal Revenue Code, which, depending on the nature of the capital gains, may result in taxation of such portions at rates of either 20% or 25%. Capital losses recognized by a stockholder upon the disposition of our shares held for more than one year at the time of disposition will be considered long-term capital losses. The deduction for capital losses is subject to limitations.
An additional tax of 3.8% generally will be imposed on the “net investment income” of U.S. stockholders who meet certain requirements and are individuals, estates or certain trusts. Among other items, “net investment income” generally includes gross income from dividends and net gain attributable to the disposition of certain property, such as shares of our common stock or warrants. In the case of individuals, this tax will only apply to the extent such individual’s modified adjusted gross income exceeds $200,000 ($250,000 for married couples filing a joint return and surviving spouses, and $125,000 for married individuals filing a separate return). U.S. stockholders should consult their tax advisors regarding the possible applicability of this additional tax in their particular circumstances.
Treatment of Tax-Exempt U.S. Stockholders Tax-exempt entities, including qualified employee pension and profit sharing trusts and individual retirement accounts (“Exempt Organizations”), generally are exempt from U.S. federal income taxation. However, they are subject to taxation on their unrelated business taxable income (“UBTI”). The Internal Revenue Service has issued a published revenue ruling that dividend distributions from a REIT to an exempt employee pension trust do not constitute UBTI, provided that the shares of the REIT are not otherwise used in an unrelated trade or business of the exempt employee pension trust. Based on this ruling, amounts distributed by us to Exempt Organizations generally should not constitute UBTI. However, if an Exempt Organization finances its acquisition of the shares of our stock with debt, a portion of its income from us will constitute UBTI pursuant to the “debt financed property” rules. Likewise, a portion of the Exempt Organization’s income from us would constitute UBTI if we held a residual interest in a real estate mortgage investment conduit. A tax-exempt U.S. stockholder that is subject to tax on its UBTI will be required to segregate its taxable income and loss for each unrelated trade or business activity for purposes of determining its UBTI.
Backup Withholding and Information Reporting Under certain circumstances, you may be subject to backup withholding at applicable rates on payments made with respect to, or cash proceeds of a sale or exchange of, shares of our stock. Backup withholding will apply only if you: (1) fail to provide a correct taxpayer identification number, which if you are an individual, is ordinarily your social security number; (2) furnish an incorrect taxpayer identification number; (3) are notified by the Internal Revenue Service that you have failed to properly report payments of interest or dividends; or (4) fail to certify, under penalties of perjury, that you have furnished a correct taxpayer identification number and that the Internal Revenue Service has not notified you that you are subject to backup withholding.
Backup withholding will not apply with respect to payments made to certain exempt recipients, such as corporations and tax-exempt organizations. You should consult with a tax advisor regarding qualification for exemption from backup withholding, and the procedure for obtaining an exemption. Backup withholding is not an additional tax. Rather, the amount of any backup withholding with respect to a payment to a stockholder will be allowed as a credit against such stockholder’s U.S. federal income tax liability and may entitle such stockholder to a refund, provided that the required information is provided to the Internal Revenue Service.
Taxation of Foreign Stockholders The following summary applies to you only if you are a foreign person. A “foreign person” is a holder of shares of stock who, for U.S. federal income tax purposes, is not a U.S. stockholder. The U.S. federal taxation of foreign persons is a highly complex matter that may be affected by many considerations.
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Except as discussed below, distributions to you of cash generated by our real estate operations in the form of ordinary dividends, but not by the sale or exchange of our capital assets, generally will be subject to U.S. withholding tax at a rate of 30%, unless an applicable tax treaty reduces that tax and you file with us the required form evidencing the lower rate.
In general, you will be subject to U.S. federal income tax on a graduated rate basis rather than withholding with respect to your investment in our stock if such investment is “effectively connected” with your conduct of a trade or business in the United States. A corporate foreign stockholder that receives income that is, or is treated as, effectively connected with a United States trade or business may also be subject to the branch profits tax, which is payable in addition to regular United States corporate income tax. The following discussion will apply to foreign stockholders whose investment in us is not so effectively connected. We expect to withhold United States income tax, as described below, on the gross amount of any distributions paid to you unless (1) you file an Internal Revenue Service Form W-8ECI with us claiming that the distribution is “effectively connected” or (2) certain other exceptions apply.
Distributions by us that are attributable to gain from the sale or exchange of a United States real property interest will be taxed to you under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) as if these distributions were gains “effectively connected” with a United States trade or business. Accordingly, you will be taxed at the normal capital gain rates applicable to a U.S. stockholder on these amounts, subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals. Distributions subject to FIRPTA may also be subject to a branch profits tax in the hands of a corporate foreign stockholder that is not entitled to treaty exemption. We will be required to withhold tax at a rate of 21% from distributions subject to FIRPTA. We will be required to withhold from distributions subject to FIRPTA, and remit to the Internal Revenue Service, 21% of designated capital gain dividends, or, if greater, 21% of the amount of any distributions that could be designated as capital gain dividends. In addition, if we designate prior distributions as capital gain dividends, subsequent distributions, up to the amount of the prior distributions not withheld against, will be treated as capital gain dividends for purposes of withholding.
Any capital gain dividend with respect to any class of stock that is “regularly traded” on an established securities market will be treated as an ordinary dividend if the foreign stockholder did not own more than 10% of such class of stock at any time during the taxable year. Foreign stockholders generally will not be required to report distributions received from us on U.S. federal income tax returns and all distributions received by such stockholders treated as dividends for U.S. federal income tax purposes (including any such capital gain dividends) will be subject to a 30% U.S. withholding tax (unless reduced under an applicable income tax treaty) as discussed above. In addition, the branch profits tax will not apply to such distributions.
Unless our shares constitute a “United States real property interest” within the meaning of FIRPTA or are effectively connected with a U.S. trade or business, a sale of our shares by you generally will not be subject to United States taxation. Even if our shares were to constitute a “United States real property interest,” non-U.S. stockholders that are “qualified foreign pension funds” (or are owned by a qualified foreign pension fund) meeting certain requirements may be exempt from FIRPTA withholding on the sale or disposition of our shares. Our shares will not constitute a United States real property interest if we qualify as a “domestically controlled REIT.” We believe that we qualify as and expect to continue to qualify as a domestically controlled REIT. A domestically controlled REIT is a REIT in which at all times during a specified testing period less than 50% in value of its shares is held directly or indirectly by foreign stockholders. Generally, we are permitted to assume that holders of less than 5% of our shares at all times during a specified testing period are U.S. persons. However, if you are a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions apply, you will be subject to a 30% tax on such capital gains. In any event, a purchaser of our shares from you will not be required under FIRPTA to withhold on the purchase price if the purchased shares are “regularly traded” on an established securities market or if we are a domestically controlled REIT. Otherwise, under FIRPTA, the purchaser may be required to withhold 15% of the purchase price and remit such amount to the Internal Revenue Service.
Backup withholding tax and information reporting will generally not apply to distributions paid to you outside the United States that are treated as: (1) dividends to which the 30% or lower treaty rate withholding tax discussed above applies; (2) capital gains dividends; or (3) distributions attributable to gain from the sale or exchange by us of U.S. real property interests. Payment of the proceeds of a sale of stock within the United States or conducted through certain U.S. related financial intermediaries is subject to both backup withholding and information reporting unless the beneficial owner certifies under penalties of perjury that he or she is not a U.S. person (and the payor does not have actual knowledge that the beneficial owner is a U.S. person) or otherwise establishes an exemption. You may obtain a refund of any amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the Internal Revenue Service.
Withholding tax at a rate of 30% will be imposed on certain payments to you or certain foreign financial institutions (including investment funds) and other non-US persons receiving payments on your behalf, including distributions in respect of shares of our stock, if you or such institutions fail to comply with certain due diligence, disclosure and reporting rules, as set forth in Treasury regulations. Accordingly, the entity through which shares of our stock are held will affect the determination of whether such withholding is required. Stockholders that are otherwise eligible for an exemption from, or reduction of, U.S. withholding taxes with respect to such dividends will be required to seek a refund from the Internal Revenue Service to obtain the benefit of such exemption or reduction. Additional requirements and conditions may be imposed pursuant to an
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intergovernmental agreement, if and when entered into, between the United States and such institution’s home jurisdiction. We will not pay any additional amounts to any stockholders in respect of any amounts withheld. You are encouraged to consult with your tax advisor regarding U.S. withholding taxes and the application of Treasury regulations in light of your particular circumstances.
U.S. Federal Income Taxation of Holders of Depositary Shares
Owners of our depositary shares will be treated as if you were owners of the series of preferred stock represented by the depositary shares. Thus, you will be required to take into account the income and deductions to which you would be entitled if you were a holder of the underlying series of preferred stock.
Conversion or Exchange of Shares for Preferred Stock No gain or loss will be recognized upon the withdrawal of preferred stock in exchange for depositary shares and the tax basis of each share of preferred stock will, upon exchange, be the same as the aggregate tax basis of the depositary shares exchanged. If you held your depositary shares as a capital asset at the time of the exchange for shares of preferred stock, the holding period for your shares of preferred stock will include the period during which you owned the depositary shares.
U.S. Federal Income and Estate Taxation of Holders of Our Debt Securities
The following is a general summary of the U.S. federal income tax consequences and, in the case that you are a holder that is a non-U.S. holder, as defined below, the U.S. federal estate tax consequences, of purchasing, owning and disposing of debt securities periodically offered under one or more indentures (the “notes”). This summary assumes that you hold the notes as capital assets. This summary applies to you only if you are the initial holder of the notes and you acquire the notes for a price equal to the issue price of the notes. The issue price of the notes is the first price at which a substantial amount of the notes is sold other than to bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers. In addition, this summary does not consider any foreign, state, local or other tax laws that may be applicable to us or a purchaser of the notes.
U.S. Holders
The following summary applies to you only if you are a U.S. holder, as defined below.
Definition of a U.S. Holder A “U.S. holder” is a beneficial owner of a note or notes that is for U.S. federal income tax purposes:
•a citizen or resident of the United States;
•a corporation, partnership or other entity classified as a corporation or partnership for these purposes, created or organized in or under the laws of the United States or of any political subdivision of the United States, including any state;
•an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
•a trust, if, in general, a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons, within the meaning of the Internal Revenue Code, has the authority to control all of the trust’s substantial decisions.
Payments of Interest Stated interest on the notes generally will be taxed as ordinary interest income from domestic sources at the time it is paid or accrues in accordance with your method of accounting for tax purposes.
Sale, Exchange or Other Disposition of Notes The adjusted tax basis in your note will generally be your cost. You generally will recognize taxable gain or loss when you sell or otherwise dispose of your notes equal to the difference, if any, between:
•the amount realized on the sale or other disposition, less any amount attributable to any accrued interest, which will be taxable in the manner described under “Payments of Interest” above; and
•your adjusted tax basis in the notes.
Your gain or loss generally will be capital gain or loss. This capital gain or loss will be long-term capital gain or loss if at the time of the sale or other disposition you have held the notes for more than one year. Subject to limited exceptions, your capital losses cannot be used to offset your ordinary income (except in the case of individuals, who may offset up to $3,000 of ordinary income each year).
Backup Withholding and Information Reporting In general, “backup withholding” may apply to any payments made to you of principal and interest on your note, and to the payment of the proceeds of a sale or other disposition of your note before maturity, if you are a non-corporate U.S. holder and: (1) fail to provide a correct taxpayer identification number, which if you are an individual, is ordinarily your social security number; (2) furnish an incorrect taxpayer identification number; (3) are notified by the Internal Revenue Service that you have failed to properly report payments of interest or dividends; or (4) fail to
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certify, under penalties of perjury, that you have furnished a correct taxpayer identification number and that the Internal Revenue Service has not notified you that you are subject to backup withholding.
The amount of any reportable payments, including interest, made to you (unless you are an exempt recipient) and the amount of tax withheld, if any, with respect to such payments will be reported to you and to the Internal Revenue Service for each calendar year. You should consult your tax advisor regarding your qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, if applicable. The backup withholding tax is not an additional tax and will be credited against your U.S. federal income tax liability, provided that correct information is provided to the Internal Revenue Service.
Non-U.S. Holders
The following summary applies to you if you are a beneficial owner of a note and are not a U.S. holder, as defined above (a “non-U.S. holder”).
Special rules may apply to certain non-U.S. holders such as “controlled foreign corporations,” “passive foreign investment companies” and “foreign personal holding companies.” Such entities are encouraged to consult their tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.
U.S. Federal Withholding Tax Subject to the discussion below, U.S. federal withholding tax will not apply to payments by us or our paying agent, in its capacity as such, of principal and interest on your notes under the “portfolio interest” exception of the Internal Revenue Code, provided that:
•you do not, directly or indirectly, actually or constructively, own 10% or more of the total combined voting power of all classes of our stock entitled to vote;
•you are not (1) a controlled foreign corporation for U.S. federal income tax purposes that is related, directly or indirectly, to us through sufficient stock ownership, as provided in the Internal Revenue Code, or (2) a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue Code;
•such interest is not effectively connected with your conduct of a U.S. trade or business; and
•you provide a signed written statement, under penalties of perjury, which can reliably be related to you, certifying that you are not a U.S. person within the meaning of the Internal Revenue Code and providing your name and address to us or our paying agent; or
•a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business and holds your notes on your behalf and that certifies to us or our paying agent under penalties of perjury that it, or the bank or financial institution between it and you, has received from you your signed, written statement and provides us or our paying agent with a copy of such statement.
Treasury regulations provide that:
•if you are a foreign partnership, the certification requirement will generally apply to your partners, and you will be required to provide certain information;
•if you are a foreign trust, the certification requirement will generally be applied to you or your beneficial owners depending on whether you are a “foreign complex trust,” “foreign simple trust,” or “foreign grantor trust” as defined in the Treasury regulations; and
•look-through rules will apply for tiered partnerships, foreign simple trusts and foreign grantor trusts.
If you are a foreign partnership or a foreign trust, you should consult your own tax advisor regarding your status under these Treasury regulations and the certification requirements applicable to you.
If you cannot satisfy the portfolio interest requirements described above, payments of interest will be subject to the 30% United States withholding tax, unless you provide us with a properly executed (1) Internal Revenue Service Form W-8BEN claiming an exemption from or reduction in withholding under the benefit of an applicable treaty or (2) Internal Revenue Service Form W-8ECI stating that interest paid on the note is not subject to withholding tax because it is effectively connected with your conduct of a trade or business in the United States. Alternative documentation may be applicable in certain circumstances.
If you are engaged in a trade or business in the United States and interest on a note is effectively connected with the conduct of that trade or business, you will be required to pay U.S. federal income tax on that interest on a net income basis (although you will be exempt from the 30% withholding tax provided the certification requirement described above is met) in the same manner as if you were a U.S. person, except as otherwise provided by an applicable tax treaty. If you are a foreign corporation, you may be required to pay a branch profits tax on the earnings and profits that are effectively connected to the conduct of your trade or business in the United States.
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Withholding tax at a rate of 30% will be imposed on payments of interest (including original issue discount) to you or certain foreign financial institutions (including investment funds) and other non-US persons receiving payments on your behalf if you or such institutions fail to comply with certain due diligence, disclosure and reporting rules, as set forth in Treasury regulations. We will not pay any additional amounts to any holders of our debt instruments in respect of any amounts withheld. You are encouraged to consult with your tax advisor regarding U.S. withholding taxes and the application of the relevant Treasury regulations in light of your particular circumstances.
Sale, Exchange or other Disposition of Notes You generally will not have to pay U.S. federal income tax on any gain or income realized from the sale, redemption, retirement at maturity or other disposition of your notes, unless:
•in the case of gain, you are an individual who is present in the United States for 183 days or more during the taxable year of the sale or other disposition of your notes, and specific other conditions are met;
•you are subject to tax provisions applicable to certain United States expatriates; or
•the gain is effectively connected with your conduct of a U.S. trade or business.
If you are engaged in a trade or business in the United States, and gain with respect to your notes is effectively connected with the conduct of that trade or business, you generally will be subject to U.S. income tax on a net basis on the gain. In addition, if you are a foreign corporation, you may be subject to a branch profits tax on your effectively connected earnings and profits for the taxable year, as adjusted for certain items.
U.S. Federal Estate Tax. If you are an individual and are not a U.S. citizen or a resident of the United States, as specially defined for U.S. federal estate tax purposes, at the time of your death, your notes will generally not be subject to the U.S. federal estate tax, unless, at the time of your death (1) you owned actually or constructively 10% or more of the total combined voting power of all our classes of stock entitled to vote, or (2) interest on the notes is effectively connected with your conduct of a U.S. trade or business.
Backup Withholding and Information Reporting Backup withholding will not apply to payments of principal or interest made by us or our paying agent, in its capacity as such, to you if you have provided the required certification that you are a non-U.S. holder as described in “U.S. Federal Withholding Tax” above, and provided that neither we nor our paying agent have actual knowledge that you are a U.S. holder, as described in “U.S. Holders” above. We or our paying agent may, however, report payments of interest on the notes.
The gross proceeds from the disposition of your notes may be subject to information reporting and backup withholding tax. If you sell your notes outside the United States through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then the U.S. backup withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if you sell your notes through a non-U.S. office of a broker that has certain connections with the United States.
You should consult your own tax advisor regarding application of backup withholding in your particular circumstance and the availability of and procedure for obtaining an exemption from backup withholding. Any amounts withheld under the backup withholding rules from a payment to you will be allowed as a refund or credit against your U.S. federal income tax liability, provided the required information is furnished to the Internal Revenue Service.
U.S. Federal Income of Holders of Our Warrants
Exercise of Warrants You will not generally recognize gain or loss upon the exercise of a warrant. Your basis in the debt securities, preferred stock, depositary shares or common stock, as the case may be, received upon the exercise of the warrant will be equal to the sum of your adjusted tax basis in the warrant and the exercise price paid. Your holding period in the debt securities, preferred stock, depositary shares or common stock, as the case may be, received upon the exercise of the warrant will not include the period during which the warrant was held by you.
Expiration of Warrants Upon the expiration of a warrant, you will generally recognize a capital loss in an amount equal to your adjusted tax basis in the warrant.
Sale or Exchange of Warrants Upon the sale or exchange of a warrant to a person other than us, you will recognize gain or loss in an amount equal to the difference between the amount realized on the sale or exchange and your adjusted tax basis in the warrant. Such gain or loss will generally be capital gain or loss and will be long-term capital gain or loss if the warrant was held for more than one year. Upon the sale of the warrant to us, the Internal Revenue Service may argue that you should recognize ordinary income on the sale. You are advised to consult your own tax advisors as to the consequences of a sale of a warrant to us.
Potential Legislation or Other Actions Affecting Tax Consequences
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Current and prospective securities holders should recognize that the present U.S. federal income tax treatment of an investment in us may be modified by legislative, judicial or administrative action at any time and that any such action may affect investments and commitments previously made. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the Department of the Treasury, resulting in revisions of regulations and revised interpretations of established concepts as well as statutory changes. Revisions in U.S. federal tax laws and interpretations of these laws could adversely affect the tax consequences of an investment in us.
State, Local and Foreign Taxes
We, and holders of our debt and equity securities, may be subject to state, local or foreign taxation in various jurisdictions, including those in which we or they transact business, own property or reside. It should be noted that we own properties located in a number of state, local and foreign jurisdictions, and may be required to file tax returns in some or all of those jurisdictions. The state, local or foreign tax treatment of us and holders of our debt and equity securities may not conform to the U.S. federal income tax consequences discussed above. Consequently, you are urged to consult your advisor regarding the application and effect of state, local and foreign tax laws with respect to any investment in our securities.
Because the U.S. generally maintains a worldwide corporate tax system, the foreign and U.S. tax systems are somewhat interdependent. Longstanding international tax norms that determine each country’s jurisdiction to tax cross-border international trade are evolving and could reduce the ability of our foreign subsidiaries to deduct for foreign tax purposes the interest they pay on loans from the Company, thereby increasing the foreign tax liability of the subsidiaries. It is also possible that foreign countries could increase their withholding taxes on dividends and interest. Given the unpredictability of these possible changes and their potential interdependency, it is very difficult to assess the overall effect of such potential tax changes on our earnings and cash flow, but such changes could adversely impact our financial results.
Internet Access to Our SEC Filings
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as well as our proxy statements and other materials that are filed with, or furnished to, the Securities and Exchange Commission (“SEC”) are made available, free of charge, on the Internet at www.welltower.com/investors, as soon as reasonably practicable after they are filed with, or furnished to, the SEC. We routinely post important information on our website at www.welltower.com in the “Investors” section, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading “Investors.” Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls, and filings with the SEC. The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.
Cautionary Statement Regarding Forward-Looking Statements
This Annual Report on Form 10-K and the documents incorporated by reference contain statements that constitute “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995. When we use words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, we are making forward-looking statements. In particular, these forward-looking statements include, but are not limited to, those relating to our opportunities to acquire, develop or sell properties; our ability to close our anticipated acquisitions, investments or dispositions on currently anticipated terms, or within currently anticipated timeframes; the expected performance of our operators/tenants and properties; our expected occupancy rates; our ability to declare and to make distributions to stockholders; our investment and financing opportunities and plans; our continued qualification as a REIT; and our ability to access capital markets or other sources of funds.
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause our actual results to differ materially from our expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to:
•the impact of the COVID-19 pandemic;
•uncertainty regarding the implementation and impact of the CARES Act and future stimulus or other COVID-19 relief legislation;
•status of the economy;
•the status of capital markets, including availability and cost of capital;
•issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance;
•changes in financing terms;
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•competition within the health care and seniors housing industries;
•negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans;
•our ability to transition or sell properties with profitable results;
•the failure to make new investments or acquisitions as and when anticipated;
•natural disasters and other acts of God affecting our properties;
•our ability to re-lease space at similar rates as vacancies occur;
•our ability to timely reinvest sale proceeds at similar rates to assets sold;
•operator/tenant or joint venture partner bankruptcies or insolvencies;
•the cooperation of joint venture partners;
•government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements;
•liability or contract claims by or against operators/tenants;
•unanticipated difficulties and/or expenditures relating to future investments or acquisitions;
•environmental laws affecting our properties;
•changes in rules or practices governing our financial reporting;
•the movement of U.S. and foreign currency exchange rates;
•our ability to maintain our qualification as a REIT;
•key management personnel recruitment and retention; and
•the risks described under “Item 1A — Risk Factors.”
We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.
Item 1A. Risk Factors
Risk Factor Summary
The following summarizes the principal factors that make an investment in our company speculative or risky, all of which are more fully described in the Risk Factors section below. This summary should be read in conjunction with the Risk Factors section and should not be relied upon as an exhaustive summary of the material risks facing our business. The order of presentation is not necessarily indicative of the level of risk that each factor poses to us.
Risks Arising from Our Business:
Our business model and the operations of our business involve risks, including those related to:
•the effects of the COVID-19 pandemic;
•uncertainty regarding the implementation and impact of the CARES Act and future stimulus or other COVID-19 relief legislation;
•investments in and acquisitions of health care and seniors housing properties;
•unknown liability exposure related to acquired properties;
•competition for acquisitions may result in increased prices;
•our joint venture partners;
•Seniors Housing Operating properties operational risks;
•our ability to terminate our management agreements with Seniors Housing Operating managers;
•operational and legal risks with respect to our properties managed in RIDEA structures;
•the ability of operators to make payments to us;
•the impacts of severe cold and flu seasons or other widespread illnesses on occupancy;
•the insolvency or bankruptcy of our tenants, operators, borrowers, managers and other obligors;
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•our ability to timely reinvest our sale proceeds on terms acceptable to us;
•any adverse developments in the business or financial condition of Sunrise Senior Living, LLC;
•any failure, inability or unwillingness by ProMedica Health System and Genesis Healthcare to satisfy obligations under their agreements with us;
•ownership of property outside the U.S.;
•the impact of Brexit on our operations located in the U.K.;
•our ability to lease or sell properties on favorable terms;
•tenant, operator and manager insurance coverage;
•loss of properties owned through ground leases upon breach or termination of the ground leases;
•requirements of, or changes to governmental reimbursement programs, such as Medicare, Medicaid or government funding;
•controls imposed on certain of our tenants who provide health care services that are reimbursed by Medicare, Medicaid and other third-party payors to reduce admissions and length of stay;
•our operators’ or tenants’ failure to comply with federal, state, province, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards;
•development, redevelopment and construction;
•losses caused by severe weather conditions, natural disasters or the physical effects of climate change;
•costs incurred to remediate environmental contamination at our properties;
•cybersecurity incidents; and
•our dependence on key personnel.
Risks Arising from Our Capital Structure
Our capital structure involves exposure to risks, including those related to:
•our future leverage;
•the availability of cash for distributions to stockholders;
•covenants in our debt agreements;
•limitations on our ability to access capital;
•changes affecting the availability of LIBOR;
•any downgrades in our credit ratings; and
•increases in interest rates.
Risks Arising from Our Status as a REIT
As a result of our status as a REIT, we are exposed to risks, including those related to:
•our ability to remain qualified as a REIT;
•the ability of our subsidiaries to qualify as a REIT;
•the impact of the 90% annual distribution requirement on our liquidity and ability to engage in otherwise beneficial transactions;
•our limited use of TRSs under the Code;
•special requirements applicable to the lease of qualified health care properties to a taxable REIT subsidiary;
•tax consequences if certain sale-leaseback transactions are not characterized by the IRS as “true leases; and
•changes in our tax rate or exposure to additional tax liabilities.
Risks Factors
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This section highlights significant factors, events and uncertainties that could create risk with an investment in our securities. The events and consequences discussed in these risk factors could, in circumstances we may not be able to accurately predict, recognize or control, have a material adverse effect on our business, growth, reputation, prospects, financial condition, operating results, cash flows, liquidity, ability to pay dividends and stock price. These risk factors do not identify all risks that we face: our operations could also be affected by factors, events or uncertainties that are not presently known to us or that we currently do not consider to present significant risks to our operations. We group these risk factors into three categories:
•Risks arising from our business;
•Risks arising from our capital structure; and
•Risks arising from our status as a REIT.
Risks Arising from Our Business
The ongoing COVID-19 pandemic may continue to adversely affect our business, results of operations and financial condition.
We are unable to accurately predict the full impact that the COVID-19 pandemic will have on our results of operations, financial condition, liquidity and cash flows due to numerous factors that are not within our control. These factors include the duration and severity of the outbreak; availability and timely delivery and effectiveness of vaccines; public health measures, such as business closures and stay-at-home orders, and other actions taken by governments, businesses and individuals in response to the pandemic; the availability of federal, state, local or non-U.S. funding programs; general economic disruption and uncertainty in key markets and financial market volatility; and the impact of the COVID-19 pandemic on general macroeconomic conditions and the pace of recovery when the pandemic subsides.
The COVID-19 pandemic has subjected our business, operations and financial condition to a number of risks, including but not limited to those discussed below:
•Risks Related to Revenue: Our revenues and our operators' revenues are dependent on occupancy. Our Seniors Housing Operating portfolio has experienced a decline in spot occupancy from 85.8% at February 29, 2020 to 76.2% at December 31, 2020 and 74.4% at February 5, 2021. In addition to the impact of increases in mortality rates on occupancy of our Seniors Housing Operating facilities, the ongoing COVID-19 pandemic has, to varying degrees during the course of the pandemic, prevented prospective occupants and their families from visiting our facilities and limited the ability of new occupants to move into our facilities due to heightened move-in criteria and screening. Although the ongoing impact of the pandemic and vaccine deployment on occupancy remain uncertain, occupancy of our Seniors Housing Operating and Triple-net properties could further decrease. Such a decrease could affect the net operating income of our Seniors Housing Operating properties and the ability of our Triple-net operators to make contractual payments to us. In addition, although we collected over 98% of rent due in the fourth quarter of 2020, rental income in our Outpatient Medical segment may decrease if our tenants do not renew leases or do not make timely or full lease payments as a result of temporary medical practice closures or decreases in revenue due to government imposed restrictions on elective medical procedures or decisions by patients to delay treatments. As a result of the financial impact of the COVID-19 pandemic on our operators and tenants, we may offer certain tenants concessions such as rent deferrals or rent abatements across our Triple-net and Outpatient Medical segments.
•Risks Related to Operator and Tenant Financial Condition: In addition to decreased revenue from tenant and operator payments, the impact of the COVID-19 pandemic creates a heightened risk of tenant, operator, borrower, manager or other obligor bankruptcy or insolvency due to factors such as decreased occupancy, medical practice disruptions resulting from stay-at-home orders, increased health and safety and labor expenses or litigation resulting from developments related to the COVID-19 pandemic. See" - The insolvency or bankruptcy of our tenants, operators, borrowers, managers and other obligors may adversely affect our business, results of operations and financial condition" for more information regarding operator and tenant bankruptcy risks. Our ability to terminate our lease with a tenant and relet the property to another tenant may be severely limited under current conditions due to the industry and macroeconomic effects of the COVID-19 pandemic and local ordinances. If we cannot transition a leased property to a new tenant due to the effects of the COVID-19 pandemic or for other reasons, we may take possession of that property, which may expose us to certain successor liabilities. Publicity about the operator's financial condition and insolvency proceedings, particularly in light of ongoing publicity related to the COVID-19 pandemic, may also negatively impact their and our reputations, decreasing customer demand and revenues. Should such events occur, our revenue and operating cash flow may be adversely affected.
•Risks Related to Operations: Across all of our properties, we and our operators have incurred increased operational costs as a result of the introduction of public health measures and other regulations affecting our properties and our operations, as well as additional health and safety measures adopted by us and our operators related to the COVID-19 pandemic, including increases in labor and property cleaning expenses and expenditures related to our efforts to procure PPE and supplies on behalf of our operators. Such operational costs may increase in the future based on the duration and severity of the pandemic or the introduction of additional public health regulations. Operators and tenants are also subject to risks arising from the unique pressures on seniors housing and medical practice employees during
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the COVID-19 pandemic. As a result of difficult conditions and stresses related to the COVID-19 pandemic, employee morale and productivity may suffer and additional pay, such as hazard pay, may not be sufficient to retain key operator and tenant employees. In addition, our operations or those of our operators or tenants may be adversely impacted if a significant number of our employees or those of our operators or tenants contract COVID-19. Although we continue to undertake extensive efforts to ensure the safety of our properties, employees and residents and to provide operator support in this regard, the impact of the COVID-19 pandemic on our facilities could result in additional operational costs and reputational and litigation risk to us and our operators. As a result of the COVID-19 pandemic, operator and tenant cost of insurance is expected to increase and such insurance may not cover certain claims related to COVID-19. Our exposure to COVID-19 related litigation risk may be increased if the operators or tenants of the relevant facilities are subject to bankruptcy or insolvency. In addition, to varying degrees during the course of the pandemic we have experienced increased operational challenges and costs resulting from logistical challenges such as supply chain interruptions, business closures and restrictions on the movement of people. In response to stay-at-home orders and to support the health and well-being of our employees, the large majority of our employees are currently working remotely. The effects of such work arrangements for an extended period of time could impact employee productivity and morale and introduce additional operational risk, including but not limited to cybersecurity risks.
•Risks Related to Property Acquisitions and Dispositions: As a result of uncertainty regarding the length and severity of the COVID-19 pandemic and the impact of the pandemic on our business and related industries, our investments in and acquisitions of seniors housing and health care properties, as well as our ability to transition or sell properties with profitable results, may be limited. Such disruptions to acquisition, disposition and development activity may negatively impact our long-term competitive position.
•Risks Related to Liquidity: If our access to capital is restricted or our borrowing costs increase as a result of developments in financial markets relating to the pandemic, our operations and financial condition could be adversely impacted. In addition, a prolonged period of decreased revenue and limited acquisition and disposition activity may adversely affect our financial condition and long-term growth prospects and there can also be no assurance that we will not face credit rating downgrades. Future downgrades could adversely affect our cost of capital, liquidity, competitive position and access to capital markets.
•Risks Related to Dividends: The impacts of the COVID-19 pandemic on our results of operations, liquidity and financial condition could adversely affect our ability to pay dividend distributions at expected levels or at all. All distributions are made at the discretion of our Board of Directors in accordance with Delaware law and depend on our earnings, our financial condition, debt and equity capital available to us, our expectation of our future capital requirements and operating performance, restrictive covenants in our financial and other contractual agreements, maintenance of our REIT qualification, restrictions under Delaware law and other factors as our Board of Directors may deem relevant from time to time. Our Board of Directors will continue to assess our dividend rate on an ongoing basis, as the COVID-19 pandemic and related market conditions and our financial position continue to evolve. Our Board of Directors declared a cash dividend for the quarter ended December 31, 2020 of $0.61 per share, consistent with the cash dividends for the quarters ended September 30, June 30 and March 31, 2020, representing a 30% decrease from the $0.87 per share dividend for the quarter ended December 31, 2019.
The events and consequences discussed in these risk factors could, in circumstances we may not be able to accurately predict, recognize or control, have a material adverse effect on our business, growth, reputation, prospects, financial condition, operating results, cash flows, liquidity, ability to pay dividends and stock price. As the COVID-19 pandemic continues to adversely affect our operating and financial results, it may also have the effect of heightening many of the other risks described in the risk factors in this Annual Report on Form 10-K.
There remains uncertainty regarding the implementation and impact of the CARES Act and any future stimulus or other COVID-19 relief legislation. There can be no assurance as to the amount of financial assistance we and our operators will receive or that we will be able to comply with the terms and conditions to keep such assistance.
In response to the COVID-19 pandemic, the Coronavirus Aid Relief, and Economic Security Act ("CARES Act") and the Paycheck Protection Program and Health Care Enhancement Act ("PPPHCE Act"), signed into law on March 20, 2020, and April 24, 2020, respectively, authorized $175 billion in funding to be distributed to healthcare providers, including assisted living facilities. These funds, distributed through the Provider Relief Fund and administered by the Department of Health and Human Services, are required to be used to prevent, prepare for and respond to COVID-19 and reimburse expenses or lost revenues attributable the COVID-19 pandemic. Although these distributions are not subject to repayment, attestation and compliance with certain terms and conditions including detailed reporting and auditing are required. Any funds that are ultimately received and retained by us are not expected to fully offset the losses incurred in our senior living portfolio that are attributable to the COVID-19 pandemic.
In 2020 applications were made for amounts under Phase 2 and Phase 3 of the Provider Relief Fund following the announcement from the Department of Health and Human Services that it expanded the eligibility of the CARES Act to include assisted living facilities. During the fourth quarter, we received Provider Relief Funds of approximately $9 million which was recognized as a reduction to property operating expenses. To date in 2021, we have received approximately $34 million of
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Provider Relief Funds. While we have received some funds to date, there can be no assurance that all of our applications will be approved or that additional funds will ultimately be received in full or in part.
Our investments in and acquisitions of health care and seniors housing properties may be unsuccessful or fail to meet our expectations
Some of our acquisitions may not prove to be successful. We could encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent liabilities, and acquired properties might require significant management attention that would otherwise be devoted to our ongoing business. If we agree to provide construction funding to an operator/tenant and the project is not completed, we may need to take steps to ensure completion of the project. Such expenditures may negatively affect our results of operations. Investments in and acquisitions of seniors housing and health care properties entail risks associated with real estate investments generally, including risks that the investment will not achieve expected returns, that the cost estimates for necessary property improvements will prove inaccurate or that the tenant, operator or manager will fail to meet performance expectations. Furthermore, there can be no assurance that our anticipated acquisitions and investments, the completion of which is subject to various conditions, will be consummated in accordance with anticipated timing, on anticipated terms, or at all. We may be unable to obtain or assume financing for acquisitions on favorable terms or at all. Health care properties are often highly customizable and the development or redevelopment of such properties may require costly tenant-specific improvements. We also may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and this could have an adverse effect on our results of operations and financial condition. Acquired properties may be located in new markets, either within or outside the United States, where we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, costs associated with opening a new regional office and unfamiliarity with local governmental and permitting procedures. As a result, we cannot assure you that we will achieve the economic benefit we expect from acquisitions, investment, development and redevelopment opportunities.
Acquired properties may expose us to unknown liability
We may acquire properties or invest in joint ventures that own properties subject to liabilities and without any recourse, or with only limited recourse, against the prior owners or other third parties with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle or contest it, which could adversely affect our results of operations and cash flow. Unknown liabilities with respect to acquired properties might include: liabilities for clean-up of undisclosed environmental contamination, claims by tenants, vendors or other persons against the former owners of the properties, liabilities incurred in the ordinary course of business and claims for indemnification by general partners, directors and others indemnified by the former owners of the properties.
Competition for acquisitions may result in increased prices for properties
We may face competition for acquisition opportunities from other well-capitalized investors, including publicly traded and privately held REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, sovereign wealth funds, pension trusts, partnerships and individual investors. This competition may adversely affect us by subjecting us to the following risks: we may be unable to acquire a desired property because of competition from other well-capitalized real estate investors and, even if we are able to acquire a desired property, competition from other real estate investors may significantly increase the purchase price.
Our investments in joint ventures could be adversely affected by our lack of exclusive control over these investments, our partners’ insolvency or failure to meet their obligations, and disputes between us and our partners
We have entered into, and may continue in the future to enter into, partnerships or joint ventures with other persons or entities. Joint venture investments involve risks that may not be present with other methods of ownership, including the possibility that our partner might become insolvent, refuse to make capital contributions when due or otherwise fail to meet its obligations, which may result in certain liabilities to us for guarantees and other commitments; that our partner might at any time have economic or other business interests or goals that are or become inconsistent with our interests or goals; that we could become engaged in a dispute with our partner, which could require us to expend additional resources to resolve such dispute and could have an adverse impact on the operations and profitability of the joint venture; that our partner may be in a position to take action or withhold consent contrary to our instructions or requests; and that our joint venture partners may be structured differently than us for tax purposes, which could create conflicts of interest and risks to our REIT status. In some instances, we and/or our partner may have the right to trigger a buy-sell, put right or forced sale arrangement, which could cause us to sell our interest, acquire our partner’s interest or sell the underlying asset at a time when we otherwise would not have initiated such a transaction. Our ability to acquire our partner’s interest may be limited if we do not have sufficient cash, available borrowing capacity or other capital resources. In such event, we may be forced to sell our interest in the joint venture when we would otherwise prefer to retain it. On the other hand, our ability to transfer our interest in a joint venture to a third party may be restricted and the market for our interest may be limited and/or valued lower than fair market value. Joint ventures may require us to share decision-making authority with our partners, which could limit our ability to control the properties in the joint ventures. Even when we have a controlling interest, certain major decisions may require partner approval, such as the sale, acquisition or financing of a property.
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We assume operational and legal risks with respect to our properties managed in RIDEA structures that could have a material adverse effect on our business, results of operations and financial condition
We have entered into various joint ventures that were structured under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), which permits REITs to own or partially own “qualified health care properties” in a structure through which we can participate directly in the cash flow of the properties’ operations (as compared to receiving only contractual rent payments) in compliance with REIT requirements. A “qualified health care property” includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients.
Under a RIDEA structure, we are required to rely on our operator to manage and operate the property, including complying with laws and providing resident care. However, as the owner of the property under a RIDEA structure, we are responsible for operational and legal risks and liabilities of the property, including, but not limited to, those relating to employment matters of our operators, compliance with health care fraud and abuse and other laws, governmental reimbursement matters, compliance with federal, state, local and industry-related licensure, certification and inspection laws, regulations, and standards, and litigation involving our properties or residents/patients, even though we have limited ability to control or influence our operators’ management of these risks. Further, our taxable REIT subsidiary (“TRS”) is generally required to hold the applicable health care license and enroll in the applicable government health care programs (e.g., Medicare- and Medicaid), which subjects us to potential liability under various health care regulatory laws. Penalties for failure to comply with applicable laws may include loss or suspension of licenses and certificates of need, certification or accreditation, exclusion from government health care programs (e.g., Medicare and Medicaid), administrative sanctions and civil monetary penalties. Although we have some general oversight approval rights and the right to review operational and financial reporting information, our operators are ultimately in control of the day-to-day business of the property, including clinical decision-making, and we rely on them to operate the properties in a manner that complies with applicable law.
We are exposed to operational risks with respect to our Seniors Housing Operating properties that could adversely affect our revenue and operations
We are exposed to various operational risks with respect to our Seniors Housing Operating properties that may increase our costs or adversely affect our ability to generate revenues. In addition to operational challenges related to the COVID-19 pandemic, these risks include fluctuations in occupancy experienced during the normal course of business, Medicare and Medicaid reimbursement, if applicable, and private pay rates; economic conditions; competition; federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards; the availability and increases in cost of general and professional liability insurance coverage; increases in property taxes; state regulation and rights of residents related to entrance fees; federal and state housing laws and regulations, including rent and eviction restrictions related to the COVID-19 pandemic; and the availability and increases in the cost of labor (as a result of unionization or otherwise). Any one or a combination of these factors may adversely affect our revenue and operations.
We have rights to terminate our management agreements with operators, in whole or with respect to specific properties under certain circumstances, and we may be unable to replace if our management agreements are terminated or not renewed
We are parties to long-term management agreements with our Seniors Housing Operating managers pursuant to which they provide comprehensive property management, accounting and other services with respect to our Seniors Housing Operating properties. We have the ability to terminate any of our management agreements upon the occurrence of certain events such as insolvency relating to such manager, and in some cases, the failure to meet specific NOI targets without curing, as well as the occurrence of other events or certain conditions.
We regularly monitor and review our rights and remedies under our management agreements. When determining if we will take significant action under those agreements, including terminating a manager, we consider numerous legal, contractual, regulatory, business and other relevant factors. In exercising our rights to terminate or not renew a management agreement, we would work with our existing seniors housing operators or potentially new operators to manage the properties; however, there is no assurance that we would be able to timely source a replacement or that any replacement manager would be effective. Any transition to a new manager would most likely require regulatory approval and potentially the approval of the holders of any liens on the property. The failure to replace on a timely basis, as well as the failure to receive these approvals, either at all or in a timely manner, could have an adverse effect on the properties and our revenue.
Decreases in our operators’ revenues or increases in our operators’ expenses could affect our operators’ ability to make payments to us
We have very limited control over the success or failure of our operators' businesses and, at any time, an operator may experience a downturn in its business that weakens its financial condition. Our operators’ revenues are primarily driven by occupancy, private pay rates, and Medicare and Medicaid reimbursement, if applicable. Expenses for these facilities are
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primarily driven by the costs of labor, food, utilities, taxes, insurance and rent or debt service. Revenues from government reimbursement have, and may continue to, come under pressure due to reimbursement cuts and state budget shortfalls. Operating costs continue to increase for our operators. To the extent that any decrease in revenues and/or any increase in operating expenses result in a property not generating enough cash to make payments to us, the credit of our operator and the value of other collateral would have to be relied upon. To the extent the value of such property is reduced, we may need to record an impairment for such asset. Furthermore, if we determine to dispose of an underperforming property, such sale may result in a loss. Any such impairment or loss on sale would negatively affect our financial results. These risks are magnified where we lease multiple properties to a single operator under a master lease, as an operator failure or default under a master lease would expose us to these risks across multiple properties. Although our lease agreements give us the right to exercise certain remedies in the event of default on the obligations owing to us, we may determine not to do so if we believe that enforcement of our rights would be more detrimental to our business than seeking alternative approaches.
Increased competition and oversupply may affect our operators’ and managers' ability to meet their obligations to us
The operators and managers of our properties compete on a local and regional basis with operators and managers of properties and other health care providers that provide comparable services for residents and patients, including on the basis of the scope and quality of care and services provided, reputation and financial condition, physical appearance of the properties, price, and location. Our operators and managers are expected to encounter increased competition in the future that could limit their ability to attract residents or expand their businesses. In addition, we expect that there will continue to be a more than adequate inventory of seniors housing facilities. We cannot be certain that the operators of all of our facilities will be able to achieve and maintain occupancy and rate levels that meet our expected yields and fulfill their obligations to us, including but not limited to the results of the COVID-19 pandemic. If our operators and managers cannot compete effectively or if there is an oversupply of facilities, their financial performance could have a material adverse effect on our financial results.
A severe cold and flu season, epidemics or any other widespread illnesses could adversely affect the occupancy of our Seniors Housing Operating and Triple-net properties
In addition to the impact of the COVID-19 pandemic, our business and operations are exposed to risks from severe cold and flu seasons or the occurrence of epidemics or any other widespread illnesses. Our revenues and our operators' revenues are dependent on occupancy and the occupancy of our Seniors Housing Operating and Triple-net properties could significantly decrease in the event of a severe cold and flu season, an epidemic or any other widespread illness. Such a decrease could affect the operating income of our Seniors Housing Operating properties and the ability of our Triple-net operators to make payments to us. As experienced during the COVID-19 pandemic, a future flu or other pandemic could significantly increase the cost burdens faced by our operators, including if they are required to implement quarantines for residents, and adversely affect their ability to meet their obligations to us, which would have a material adverse effect on our financial results.
The insolvency or bankruptcy of our tenants, operators, borrowers, managers and other obligors may adversely affect our business, results of operations and financial condition
We are exposed to the risk that our tenants, operators, borrowers, managers or other obligors may not be able to meet the rent, principal and interest or other payments due us, which may result in a tenant, operator, borrower, manager or other obligor bankruptcy or insolvency, or that a tenant, operator, borrower, manager or other obligor might become subject to bankruptcy or insolvency proceedings for other reasons. Although our operating lease agreements provide us with the right to evict a tenant, demand immediate payment of rent and exercise other remedies, and our loans provide us with the right to terminate any funding obligation, demand immediate repayment of principal and unpaid interest, foreclose on the collateral and exercise other remedies, the bankruptcy and insolvency laws afford certain rights to a party that has filed for bankruptcy or reorganization. A tenant, operator, borrower, manager or other obligor in bankruptcy or subject to insolvency proceedings may be able to limit or delay our ability to collect unpaid rent in the case of a lease or to receive unpaid principal and interest in the case of a loan, and to exercise other rights and remedies. In addition, if a lease is rejected in a tenant bankruptcy, our claim against the tenant may be limited by applicable provisions of the bankruptcy law. We may be required to fund certain expenses (e.g., real estate taxes and maintenance) to preserve the value of an investment property, avoid the imposition of liens on a property and/or transition a property to a new tenant. In some instances, we have terminated our lease with a tenant and relet the property to another tenant. In some of those situations, we have provided working capital loans to and limited indemnification of the new obligor. If we cannot transition a leased property to a new tenant, we may take possession of that property, which may expose us to certain successor liabilities. Publicity about the operator's financial condition and insolvency proceedings may also negatively impact their and our reputations, decreasing customer demand and revenues. Should such events occur, our revenue and operating cash flow may be adversely affected.
We may not be able to timely reinvest our sale proceeds on terms acceptable to us
From time to time, we will have cash available from the proceeds of sales of our securities, principal payments on our loans receivable or the sale of properties, including non-elective dispositions, under the terms of master leases or similar financial support arrangements. In order to maintain current revenues and continue generating attractive returns, we expect to reinvest these proceeds in a timely manner. We compete for real estate investments with a broad variety of potential investors, including
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other health care REITs, real estate partnerships, health care providers, health care lenders and other investors, including developers, banks, insurance companies, pension funds, government-sponsored entities and private equity firms, some of whom may have greater financial resources and lower costs of capital than we do. This competition for attractive investments may negatively affect our ability to make timely investments on terms acceptable to us. In addition, our ability to execute on our real estate investment strategies may be temporarily disrupted during periods of financial market volatility or real estate and health care industry market uncertainty, including as a result of the COVID-19 pandemic.
The properties managed by Sunrise Senior Living, LLC (“Sunrise”) account for a significant portion of our revenues and net operating income and any adverse developments in its business or financial condition could adversely affect us
As of December 31, 2020, Sunrise managed 165 of our Seniors Housing Operating properties. These properties account for a significant portion of our revenues and net operating income. Although we have various rights as the property owner under our management agreements, we rely on Sunrise’s personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our Seniors Housing Operating properties efficiently and effectively. We also rely on Sunrise to set appropriate resident fees, to provide accurate property-level financial results for our properties in a timely manner and to otherwise operate them in compliance with the terms of our management agreements and all applicable laws and regulations. Any adverse developments in Sunrise’s business or financial condition could impair its ability to manage our properties efficiently and effectively, which could adversely affect our business, results of operations, and financial condition. For example, we depend on Sunrise’s ability to attract and retain skilled management personnel who are responsible for the day-to-day operations of our Seniors Housing Operating properties. A shortage of nurses or other trained personnel or general inflationary pressures may force Sunrise to enhance its pay and benefits packages to compete effectively for such personnel, but it may not be able to offset these added costs by increasing the rates charged to residents. Any increase in labor costs and other property operating expenses, any failure by Sunrise to attract and retain qualified personnel, or significant changes in Sunrise’s senior management or equity ownership could adversely affect the income we receive from our Seniors Housing Operating properties and have a material adverse effect on us. Also, if Sunrise experiences any significant financial, legal, accounting or regulatory difficulties, such difficulties could result in, among other things, acceleration of its indebtedness, impairment of its continued access to capital or the commencement of insolvency proceedings by or against it under the U.S. Bankruptcy Code, which, in turn, could adversely affect our business, results of operations and financial condition. If we determine to sell or transition properties currently managed by Sunrise, we may experience operational challenges and/or significantly declining financial performance for those properties. See Note 9 to our consolidated financial statements for additional information.
We depend on ProMedica Health System ("ProMedica") and Genesis Healthcare (“Genesis”) for a significant portion of our revenues and any failure, inability or unwillingness by them to satisfy obligations under their agreements with us could adversely affect us
The properties we lease to ProMedica and Genesis account for a significant portion of our revenues, and because these leases are triple-net leases, we also depend on ProMedica and Genesis to pay all insurance, taxes, utilities and maintenance and repair expenses in connection with the leased properties. We cannot assure you that ProMedica and Genesis will have sufficient assets, income and access to financing to enable them to make rental payments to us or to otherwise satisfy their respective obligations under our leases, and any failure, inability or unwillingness by ProMedica and Genesis to do so could have an adverse effect on our business, results of operations and financial condition. ProMedica and Genesis have also agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their respective businesses, and we cannot assure you that ProMedica and Genesis will have sufficient assets, income, access to financing and insurance coverage to enable them to satisfy their respective indemnification obligations. ProMedica and Genesis's failure to effectively conduct their operations or to maintain and improve our properties could adversely affect their business reputations and their ability to attract and retain patients and residents in our properties, which, in turn, could adversely affect our business, results of operations and financial condition. Additionally, we have made loans to Genesis and their operational or other failures could adversely impact their ability to repay these loans when due. During 2020, Genesis indicated substantial doubt as to their ability to continue as a going concern. Effective July 1, 2020, we revised our method of revenue recognition to a cash-basis accounting method from a straight-line accounting method and wrote off existing straight-line rent receivable balances of $91,025,000. In addition, during 2020 we recognized $80,873,000 of provision for loan losses with respect to our Genesis loan portfolio. As of December 31, 2020, Genesis is current on all obligations to us.
Ownership of property outside the U.S. may subject us to different or greater risks than those associated with our domestic operations
We have operations in the U.K. and Canada which represent 9.8% and 9.4% of total Welltower revenues, respectively. As of December 31, 2020, Revera managed 94 of our Seniors Housing Operating properties in Canada, representing a significant portion of our revenues, and also owned a controlling interest in Sunrise. International development, ownership, and operating activities involve risks that are different from those we face with respect to our domestic properties and operations. These risks include, but are not limited to, any international currency gain or loss recognized with respect to changes in exchange rates, which may not qualify under the 75% gross income test or the 95% gross income test required for us to satisfy annually in order to qualify and maintain our status as a REIT; challenges with respect to the repatriation of foreign earnings and cash; impact
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from international trade disputes and the associated impact on our tenants' supply chain and consumer spending levels; changes in foreign political, regulatory, and economic conditions (regionally, nationally and locally) including, but not limited to, the macroeconomic and regulatory effects of Brexit, including impacts on the U.K. real estate market; challenges in managing international operations; challenges of complying with a wide variety of foreign laws and regulations, including those relating to real estate, corporate governance, operations, taxes, employment and other civil and criminal legal proceedings; foreign ownership restrictions with respect to operations in foreign countries; local businesses and cultural factors that differ from our usual standards and practices; differences in lending practices and the willingness of domestic or foreign lenders to provide financing; regional or country-specific business cycles and political and economic instability; and failure to comply with applicable laws and regulations in the U.S. that affect foreign operations, including, but not limited to, the U.S. Foreign Corrupt Practices Act. If we are unable to successfully manage the risks associated with international expansion and operations, our results of operations and financial condition may be adversely affected.
The business and financial results of our operations located in the U.K. may be negatively impacted as a result of Brexit
The future relationship between the U.K. and the EU, as well as the legal and economic consequences of those terms remain unclear, including with respect to the post-Brexit regulatory environment in the U.K. It is possible that the level of health care and other economic activity in the U.K. will be adversely impacted by the U.K.'s withdrawal from the EU in 2020 (commonly referred to as "Brexit") and that we will face increased regulatory and legal complexities which could have an adverse impact on the financial condition and results of operations of our properties in the U.K.
Moreover, the value of the British Pound Sterling incurred significant fluctuations. If the value of the British Pound Sterling continues to incur similar fluctuations, unfavorable exchange rate changes may negatively affect the value of our operations located in the U.K., as translated to our reporting currency, the U.S. Dollar, in accordance with U.S. GAAP, which may impact the revenue and earnings we report. Continued fluctuations in the British Pound Sterling may also result in the imposition of price adjustments by E.U.-based suppliers to our U.K. operations, as those suppliers seek to compensate for the changes in value of the British Pound Sterling as compared to the European Euro.
If our tenants do not renew their existing leases, or if we are required to sell properties for liquidity reasons, we may be unable to lease or sell the properties on favorable terms, or at all
We cannot predict whether our tenants will renew existing leases at the end of their lease terms, which expire at various times. If these leases are not renewed, we would be required to find other tenants to occupy those properties, or sell them. There can be no assurance that we would be able to identify suitable replacement tenants or enter into leases with new tenants on terms as favorable to us as the current leases or that we would be able to lease those properties at all. Our competitors may offer space at rental rates below current market rates or below the rental rates we currently charge our customers, we may lose potential customers, and we may be pressured to reduce our rental rates below those we currently charge to retain customers when leases expire. In addition, our ability to reposition our properties with a suitable replacement tenant or operator could be significantly delayed or limited by state licensing, receivership, CON or other laws, as well as by the Medicare and Medicaid change-of-ownership rules, and we could incur substantial additional expenses in connection with any licensing, receivership or change-of-ownership proceedings. Even if tenants decide to renew or lease new space, the terms of renewals or new leases, including the cost of required renovations or concessions to tenants, may be less favorable to us than current lease terms.
Real estate investments are relatively illiquid and most of the property we own is highly customized for specific uses. Our ability to quickly sell or exchange any of our properties in response to changes in operator, economic and other conditions will be limited. No assurances can be given that we will recognize full value for any property that we are required to sell. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations. In addition, we are exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health care industries. A downturn in the real estate industry could adversely affect the value of our properties and our ability to sell properties for a price or on terms acceptable to us.
Our tenants, operators and managers may not have the necessary insurance coverage to insure adequately against losses
We maintain or require our tenants, operators and managers to maintain comprehensive insurance coverage on our properties and their operations with terms, conditions, limits and deductibles that we believe are customary for similarly situated companies in our industry and we frequently review our insurance programs and requirements. Our tenants, operators and manager may not be able to maintain adequate levels of insurance and required coverages. Also, we may not be able to require the same levels of insurance coverage under our lease, management and other agreements, which could adversely affect us in the event of a significant uninsured loss. We cannot make any guarantee as to the future financial viability of the insurers that underwrite our policies and the policies maintained by our tenants, operators and managers. Insurance may not be available at a reasonable cost in the future or policies may not be maintained at a level that will fully cover all losses on our properties upon the occurrence of a catastrophic event. This may be especially the case due to increases in property insurance costs. In addition, in recent years, long-term/post-acute care and seniors housing operators and managers have experienced substantial increases in both the number and size of patient care liability claims. As a result, general and professional liability costs have increased in some markets. Due to the uncertainty of the long term effects of the COVID-19 pandemic, general and professional liability insurance coverage may be restricted or very costly, which may adversely affect the tenants’, operators’ and managers’ future
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operations, cash flows and financial conditions, and may have a material adverse effect on the tenants’, operators’ and managers’ ability to meet their obligations to us.
Our ownership of properties through ground leases exposes us to the loss of such properties upon breach or termination of the ground leases
We have acquired an interest in certain of our properties by acquiring a leasehold interest in the property on which the building is located, and we may acquire additional properties in the future through the purchase of interests in ground leases. Many of these ground leases impose significant limitations on our uses of the subject properties, restrict our ability to sell or otherwise transfer our interests in the properties or restrict the leasing of the properties. These restrictions may limit our ability to timely sell or exchange the properties, impair the properties’ value or negatively impact our ability to find suitable tenants for the properties. As the lessee under a ground lease, we are exposed to the possibility of losing the property upon termination of the ground lease or an earlier breach of the ground lease by us.
The requirements of, or changes to, governmental reimbursement programs, such as Medicare, Medicaid or government funding, could have a material adverse effect on our obligors’ liquidity, financial condition and results of operations, which could adversely affect our obligors’ ability to meet their obligations to us
Some of our obligors’ businesses are affected by government reimbursement. To the extent that an operator/tenant receives a significant portion of its revenues from government payors, primarily Medicare and Medicaid, such revenues may be subject to statutory and regulatory changes, retroactive rate adjustments, recovery of program overpayments or set-offs, court decisions, administrative rulings, policy interpretations, payment or other delays by fiscal intermediaries or carriers, government funding restrictions (at a program level or with respect to specific facilities), any lapse in Congressional funding of the Centers for Medicare and Medicaid Services and interruption or delays in payments due to any ongoing government investigations and audits at such property. In recent years, government payors have frozen or reduced payments to health care providers due to budgetary pressures. Federal and state authorities may continue seeking to implement new or modified reimbursement methodologies that may negatively impact health care property operations. See “Item 1 - Business - Certain Government Regulations - United States - Reimbursement” above for additional information. Health care reimbursement will likely continue to be of paramount importance to federal and state authorities. We cannot make any assessment as to the ultimate timing or effect any future legislative reforms may have on the financial condition of our obligors and properties. There can be no assurance that adequate reimbursement levels will be available for services provided by any property operator, whether the property receives reimbursement from Medicare, Medicaid or private payors. Significant limits on the scope of services reimbursed and on reimbursement rates and fees could have a material adverse effect on an obligor’s liquidity, financial condition and results of operations, which could adversely affect the ability of an obligor to meet its obligations to us.
Since January 1, 2014, the Health Reform Laws have provided those states that expand their Medicaid coverage to otherwise eligible state residents with incomes at or below 138% of the federal poverty level with an increased federal medical assistance percentage, effective January 1, 2014, when certain conditions are met. Given that the federal government substantially funds the Medicaid expansion, it is unclear how many states will ultimately pursue this option, although, as of early January 2021, more than 75% of the states have expanded Medicaid coverage. The participation by states in the Medicaid expansion could have the dual effect of increasing our tenants’ revenues, through new patients, but further straining state budgets and their ability to pay our tenants.
The status of the Health Reform Laws may be subject to change as a result of political, legislative, regulatory, and administrative developments and judicial proceedings. For example, the U.S. Supreme Court heard oral argument in a case seeking to invalidate the Affordable Care Act on November 10, 2020, with a decision expected to be issued in 2021. Additionally, while the Trump Administration and prior U.S. Congresses have sought to modify, repeal, or otherwise invalidate all, or certain provisions of, the Health Reform Laws, including Medicaid expansion, there is uncertainty with respect to the impact the Biden Administration and the new U.S. Congress may have upon the Health Reform Laws. If the operations, cash flows or financial condition of our operators and tenants are materially adversely impacted by the Health Reform Laws or future legislation, our revenue and operations may be adversely affected as well. More generally, and because of the dynamic nature of the legislative and regulatory environment for health care products and services, and in light of existing federal deficit and budgetary concerns, we cannot predict the impact that broad-based, far-reaching legislative or regulatory changes could have on the U.S. economy, our business, or that of our operators and tenants.
If controls imposed on certain of our tenants who provide health care services that are reimbursed by Medicare, Medicaid and other third-party payors to reduce admissions and length of stay affect inpatient volumes at our health care facilities, the financial condition or results of operations of those tenants could be adversely affected
Controls imposed by Medicare, Medicaid and commercial third-party payors designed to reduce admissions and lengths of stay, commonly referred to as “utilization reviews,” have affected and are expected to continue to affect certain of our health care facilities, specifically our acute care hospitals and post-acute facilities. Utilization review entails the review of the admission and course of treatment of a patient by managed care plans. Inpatient utilization, average lengths of stay and occupancy rates continue to be negatively affected by payor-required pre-admission authorization and utilization review and by payor pressures to maximize outpatient and alternative health care delivery services for less acutely ill patients. Efforts to
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impose more stringent cost controls and reductions are expected to continue, which could negatively impact the financial condition of our tenants who provide health care services in our hospitals and post-acute facilities. If so, this could adversely affect these tenants’ ability and willingness to comply with the terms of their leases with us and/or renew those leases upon expiration, which could have a material adverse effect on us.
Our operators’ or tenants’ failure to comply with federal, state, province, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards could adversely affect such operators’ or tenants’ operations, which could adversely affect our operators’ and tenants’ ability to meet their obligations to us
Our operators and tenants generally are subject to or impacted by varying levels of federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards. These laws and regulations include, among others: laws protecting consumers against deceptive practices; laws relating to the operation of our properties and how our tenants and operators conduct their business, such as fire, health and safety, data security and privacy laws; federal and state laws affecting hospitals, clinics and other health care communities that participate in both Medicare and Medicaid that specify reimbursement rates, pricing, reimbursement procedures and limitations, quality of services and care, background checks, food service and physical plants, and similar foreign laws regulating the health care industry; resident rights laws (including abuse and neglect laws) and fraud laws; anti-kickback and physician referral laws; the ADA and similar state and local laws; and safety and health standards set by the Occupational Safety and Health Administration or similar foreign agencies. Our operators’ or tenants’ failure to comply with any of these laws, regulations, or standards could result in loss of accreditation, denial of reimbursement, imposition of fines, suspension, decertification or exclusion from federal and state health care programs, civil liability, and in certain limited instances, criminal penalties, loss of license, closure of the facility and/or the incurrence of considerable costs arising from an investigation or regulatory action. The likelihood of these actions may increase due to the uncertainty of the long term effects of the COVID-19 pandemic. Such actions may have an effect on our operators’ or tenants’ ability to make lease payments to us and, therefore, adversely impact us. In addition, we may be directly subject to certain health care fraud and abuse laws and data privacy laws, as well as potential investigation or enforcement, as a result of our RIDEA-structured arrangements, and certain other arrangements we may pursue with healthcare entities who are directly subject to these laws. See “Item 1 - Business - Certain Government Regulations - United States - Fraud & Abuse Enforcement” and “Item 1 - Business - Certain Government Regulations - United States - Health Care Matters - Generally” above.
Many of our properties may require a license, registration, and/or CON to operate. Failure to obtain a license, registration, or CON, or loss of a required license, registration, or CON would prevent a facility from operating in the manner intended by the operators or tenants. These events could materially adversely affect our operators’ or tenants’ ability to make rent or other obligatory payments to us. State and local laws also may regulate the expansion, including the addition of new beds or services or acquisition of medical equipment, and the construction or renovation of health care facilities, by requiring a CON or other similar approval from a state agency. See “Item 1 — Business — Certain Government Regulations — United States — Licensing and Certification” above.
In addition, we cannot assure you that future changes in government regulation will not adversely affect the health care industry, including our tenants and operators, nor can we be certain that our tenants and operators will achieve and maintain occupancy and rate levels or labor cost levels that will enable them to satisfy their obligations to us.
Unfavorable resolution of pending and future litigation matters and disputes could have a material adverse effect on our financial condition
From time to time, we are directly involved or named as a party in in legal proceedings, lawsuits and other claims that involve class actions, disputes regarding property damage, care matters and other issues. We also are named as defendants in lawsuits allegedly arising out of our actions or the actions of our operators/tenants or managers in which such operators/tenants or managers have agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their respective businesses. There can be no assurance that we will be able to prevail in, or achieve a favorable settlement of, pending or future litigation. In addition, pending litigation or future litigation, government proceedings or environmental matters could lead to increased costs or interruption of our normal business operations. An unfavorable resolution of pending or future litigation or legal proceedings may have a material adverse effect on our business, results of operations and financial condition. Regardless of its outcome, litigation may result in substantial costs and expenses, significantly divert the attention of management, and could damage our reputation and our brand. In addition, any such resolution could involve our agreement to terms that restrict the operation of our business. We cannot guarantee losses incurred in connection with any current or future legal or regulatory proceedings or actions will not exceed any provisions we may have set aside in respect of such proceedings or actions or will not exceed any available insurance coverage.
Development, redevelopment and construction risks could affect our profitability
In connection with our renovation, redevelopment, development and related construction activities, we may be unable to obtain, or suffer delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations. These factors could result in increased costs or our abandonment of these projects. In addition, we may abandon opportunities we have begun to investigate, for a range of reasons, including changes in expected financing or
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construction costs, adverse changes in expected rents or expenses, adverse environmental findings, or conditions to zoning approval, which would result in additional expenses beyond those originally expected. In addition, we may not be able to obtain financing on favorable terms, or at all, which may render us unable to proceed with our development activities. We may not be able to complete construction and lease-up of a property on budget and on schedule, which could result in increased debt service expense or construction costs. Additionally, the time frame required for development, construction and lease-up of these properties means that we may have to wait years for significant cash returns. Because we are required to make cash distributions to our stockholders, if the cash flow from operations or refinancing is not sufficient, we may be forced to borrow additional money to fund such distributions. Newly developed and acquired properties may not produce the cash flow that we expect, which could adversely affect our overall financial performance.
In deciding whether to acquire or develop a particular property, we make assumptions regarding the expected future performance of that property. In particular, we estimate the return on our investment based on expected occupancy, rental rates, operating expenses, capital costs and future competition. If our financial projections with respect to a new property are inaccurate, the property may fail to perform as we expected in analyzing our investment. Our estimate of the costs of repositioning or redeveloping an acquired property may prove to be inaccurate, which may result in our failure to meet our profitability goals. Additionally, we may acquire new properties that are not fully leased, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with that property.
Operators of new facilities we construct may need to obtain Medicare and Medicaid certification and enter into Medicare and Medicaid provider agreements and/or third-party payor contracts. In the event that the operator is unable to obtain the necessary licensure, certification, provider agreements or contracts after the completion of construction, there is a risk that we will not be able to earn any revenues on the facility until either the initial operator obtains a license or certification to operate the new facility and the necessary provider agreements or contracts or we find and contract with a new operator that is able to obtain a license to operate the facility for its intended use and the necessary provider agreements or contracts.
We may experience losses caused by severe weather conditions, natural disasters or the physical effects of climate change, which could result in an increase of our or our tenants’ cost of insurance, unanticipated costs associated with evacuation, a decrease in our anticipated revenues or a significant loss of the capital we have invested in a property
We maintain or require our tenants to maintain comprehensive insurance coverage on our properties with terms, conditions, limits and deductibles that we believe are appropriate given the relative risk and costs of such coverage. However, a large number of our properties are located in areas particularly susceptible to revenue loss, cost increase or damage caused by severe weather conditions or natural disasters such as hurricanes, earthquakes, tornadoes and floods, as well as the effects of climate change. We believe, given current industry practice and analysis prepared by outside consultants, that our and our tenants’ insurance coverage is appropriate to cover reasonably anticipated losses that may be caused by hurricanes, earthquakes, tornadoes, floods, wildfires and other severe weather conditions and natural disasters, including the effects of climate change. Nevertheless, we are always subject to the risk that such insurance will not fully cover all losses and, depending on the severity of the event and the impact on our properties, such insurance may not cover a significant portion of the losses including but not limited to the costs associated with evacuation. These losses may lead to an increase of our and our tenants’ cost of insurance, a decrease in our anticipated revenues from an affected property and a loss of all or a portion of the capital we have invested in an affected property. In addition, we or our tenants may not purchase insurance under certain circumstances if the cost of insurance exceeds, in our or our tenants’ judgment, the value of the coverage relative to the risk of loss. Also, changes in federal and state legislation and regulation relating to climate change could result in increased capital expenditures to improve the energy efficiency and resiliency of our existing properties and could also necessitate us to spend more on our new development properties without a corresponding increase in revenue.
To the extent that significant changes in the climate occur in areas where our communities are located, we may experience extreme weather and changes in precipitation and temperature, all of which may result in physical damage to or a decrease in demand for properties located in these areas or affected by these conditions. Should the impact of climate change be material, including significant property damage to or destruction of our communities, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected. In addition, changes in federal, state and local legislation and regulation based on concerns about climate change could result in increased capital expenditures on our existing properties and our new development properties without a corresponding increase in revenue, resulting in adverse impacts to our net income.
We may incur costs to remediate environmental contamination at our properties, which could have an adverse effect on our or our obligors’ business or financial condition
Under various laws, owners or operators of real estate may be required to respond to the presence or release of hazardous substances on the property and may be held liable for property damage, personal injuries or penalties that result from environmental contamination or exposure to hazardous substances. These laws often impose liability without regard to whether the owner or operator knew of the release of the substances or caused the release. We may become liable to reimburse the government for damages and costs it incurs in connection with the contamination. Generally, such liability attaches to a person based on the person’s relationship to the property. Our tenants or borrowers are primarily responsible for the condition of the property. Moreover, we review environmental site assessments of the properties that we own or encumber prior to taking an
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interest in them. Those assessments are designed to meet the “all appropriate inquiry” standard, which we believe qualifies us for the innocent purchaser defense if environmental liabilities arise. Based upon such assessments, we do not believe that any of our properties are subject to material environmental contamination. However, environmental liabilities may be present in our properties and we may incur costs to remediate contamination, which could have a material adverse effect on our business or financial condition or the business or financial condition of our obligors.
Cybersecurity incidents could disrupt our business and result in the loss of confidential information
Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data through phishing or other malicious activity, attempts to interrupt our access to or use of information technology systems through distributed denial-of-service or ransomware attacks, breaches related to our increased receipt and use of data from multiple sources, and other electronic security breaches or other cybersecurity incidents within our environment or our third party vendors' environments, including those resulting from human error, product defects and technology failures. Such cyber-attacks can range from individual attempts to gain unauthorized access to our or our vendors' information technology systems to more sophisticated security threats, and may be specifically targeted to our business or more general industry wide risks. Our information technology networks, suppliers and related systems are essential to our ability to perform day-to-day operations of our business. While we employ a number of measures to prevent, detect and mitigate these threats, there is no guarantee such efforts will be successful in preventing or detecting a cyber-attack. Even the most well-protected information, networks, systems and facilities remain vulnerable because the techniques used in such attempted cybersecurity breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques, implement adequate cybersecurity barriers or other preventative measures, or recover from an attack without operational impact, and thus it is impossible for us to entirely mitigate this risk. In the past, we have experienced cybersecurity breaches, which to date have not had a material impact on our operations; however, there is no assurance that such impacts will not be material in the future. We must continuously monitor and develop our systems to protect our technology infrastructure and data from misappropriation or corruption. Cybersecurity incidents could disrupt our business, damage our reputation, cause us to incur significant remediation expense and have a materially adverse effect on our business, financial condition and results of operations. Cybersecurity breaches that compromise proprietary, personal identifying or confidential information of our employees, operators, tenants and partners or result in operational disruptions could result in legal claims or proceedings, including enforcement actions by regulators under data privacy regulations, such as the U.K. General Data Protection Regulation which imposes administrative fines for serious breaches up to the greater of 4% of annual worldwide turnover or £17.5 million.
Our success depends on key personnel whose continued service is not guaranteed
Our success depends on the continued availability and service of key personnel, including our executive officers and other highly qualified employees, and competition for their talents is intense. There is substantial competition for qualified personnel. We cannot assure you that we will retain our key personnel or that we will be able to recruit and retain other highly qualified employees in the future. Losing any key personnel could, at least temporarily, have a material adverse effect on our business, financial position and results of operations.
Risks Arising from Our Capital Structure
We may become more leveraged
Permanent financing for our investments is typically provided through a combination of public offerings of debt and equity securities and the incurrence or assumption of secured debt. The incurrence or assumption of indebtedness may cause us to become more leveraged, which could (1) require us to dedicate a greater portion of our cash flow to the payment of debt service, (2) make us more vulnerable to a downturn in the economy, (3) limit our ability to obtain additional financing, (4) negatively affect our credit ratings or outlook by one or more of the rating agencies or (5) make us more vulnerable to increases in interest rates because of the variable interest rates on some of our borrowings to the extent we have not entirely hedged such variable rate debt.
Cash available for distributions to stockholders may be insufficient to make dividend contributions at expected levels and are made at the discretion of the Board of Directors
If cash available for distribution generated by our assets decreases due to dispositions or otherwise, we may be unable to make dividend distributions at expected levels. Our inability to make expected distributions would likely result in a decrease in the market price of our common stock. All distributions are made at the discretion of our Board of Directors in accordance with Delaware law and depend on our earnings, our financial condition, debt and equity capital available to us, our expectation of our future capital requirements and operating performance, restrictive covenants in our financial and other contractual arrangements, maintenance of our REIT qualification, restrictions under Delaware law and other factors as our Board of Directors may deem relevant from time to time. Additionally, our ability to make distributions will be adversely affected if any of the risks described herein, or other significant adverse events, occur.
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We are subject to covenants in our debt agreements that could have a material adverse effect on our business, results of operations and financial condition
Our debt agreements contain various covenants, restrictions and events of default. Among other things, these provisions require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. Breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness, in addition to any other indebtedness cross-defaulted against such instruments. These defaults could have a material adverse effect on our business, results of operations and financial condition.
Limitations on our ability to access capital could have an adverse effect on our ability to make future investments or to meet our obligations and commitments
We cannot assure you that we will be able to raise the capital necessary to make future investments or to meet our obligations and commitments as they mature. Our access to capital depends upon a number of factors over which we have little or no control, including rising interest rates, inflation and other general market conditions; the market’s perception of our growth potential and our current and potential future earnings and cash distributions; the market price of the shares of our common stock and the credit ratings of our debt securities; changes in the credit ratings on U.S. government debt securities; uncertainty from the expected discontinuance of LIBOR and the transition to any other interest rate benchmark; and default or delay in payment by the U.S. of its obligations. We also rely on the financial institutions that are parties to our revolving credit facilities. If these institutions become capital constrained, tighten their lending standards or become insolvent or if they experience excessive volumes of borrowing requests from other borrowers within a short period of time, they may be unable or unwilling to honor their funding commitments to us, which would adversely affect our ability to draw on our revolving credit facilities and, over time, could negatively impact our ability to consummate acquisitions, repay indebtedness as it matures, fund capital expenditures or make distributions to our stockholders. If our access to capital is limited by these factors or other factors, it could negatively impact our ability to acquire properties, repay or refinance our indebtedness, fund operations or make distributions to our stockholders.
Changes affecting the availability of the London Interbank Offered Rate (“LIBOR”) may have consequences for us that cannot yet reasonably be predicted
We have outstanding debt, hedge agreements and receivable transactions with variable interest rates based on LIBOR. The LIBOR benchmark has been subject of national, international, and other regulatory guidance and proposals for reform. In November 2020, ICE Benchmark Administration, the administrator of LIBOR, with support of the United States Federal Reserve and the United Kingdom's Financial Conduct Authority, announced plans to consult on ceasing publication of USD LIBOR on December 31, 2021 for the one week and two month USD LIBOR tenors, and on June 30, 2023 for all other USD LIBOR tenors. While this announcement extends the transition period, the United States Federal Reserve concurrently issued a statement advising banks to stop new USD LIBOR issuances by the end of 2021. At this time, no consensus exists as to which reference rate or rates or benchmarks may become acceptable alternatives to LIBOR. The Alternative Reference Rates Committee, which was convened by the Federal Reserve Board and the New York Fed, has identified the Second Oversight Financing Rate as the recommended alternative rate for LIBOR. These reforms may cause LIBOR to perform differently than in the past and LIBOR may ultimately cease to exist after 2021. While it is not currently possible to determine precisely whether, or to what extent, the withdrawal and replacement of LIBOR would affect us, the implementation of alternative benchmark rates to LIBOR may have an adverse effect on our business, results of operations or financial condition. Any new benchmark rate will likely not replicate LIBOR exactly, which could impact contracts that terminate after 2023. There is uncertainty about how applicable law, the courts or we will address the replacement of LIBOR with alternative rates on agreements that do not include alternative rate fallback provisions. In addition, any changes to benchmark rates may have an uncertain impact on our cost of funds and our access to the capital markets, which could impact our results of operations and cash flows. Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our securities. Additional financing, therefore, may be unavailable, more expensive or restricted by the terms of our outstanding indebtedness.
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital
We plan to manage the company to maintain a capital structure consistent with our current profile, but there can be no assurance that we will be able to maintain our current credit ratings. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse effect on our cost and availability of capital, which could in turn have a material adverse effect on our results of operations, liquidity, cash flows, the trading/redemption price of our securities and our ability to satisfy our debt service obligations and to pay dividends and distributions to our equity holders.
Increases in interest rates could have a material adverse effect on our cost of capital
An increase in interest rates may increase interest cost on new and existing variable rate debt. Such increases in the cost of capital could adversely impact our ability to finance operations, acquire and develop properties, and refinance existing debt. Additionally, increased interest rates may also result in less liquid property markets, limiting our ability to sell existing assets.
Risks Arising from Our Status as a REIT
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We might fail to qualify or remain qualified as a REIT
We intend to operate as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and believe we have operated and will continue to operate in such a manner. If we lose our status as a REIT, we will face serious income tax consequences that will substantially reduce the funds available for satisfying our obligations and for distribution to our stockholders because:
•we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates;
•we would be subject to increased state and local taxes; and
•unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified.
Since REIT qualification requires us to meet a number of complex requirements, it is possible that we may fail to fulfill them, and if we do, our earnings will be reduced by the amount of U.S. federal and other income taxes owed. A reduction in our earnings would affect the amount we could distribute to our stockholders. If we do not qualify as a REIT, we will not be required to make distributions to stockholders, since a non-REIT is not required to pay dividends to stockholders in order to maintain REIT status or avoid an excise tax. In addition, if we fail to qualify as a REIT, all distributions to stockholders will continue to be treated as dividends to the extent of our current and accumulated earnings and profits, although corporate stockholders may be eligible for the dividends received deduction, and individual stockholders may be eligible for taxation at the rates generally applicable to long-term capital gains with respect to distributions.
As a result of all these factors, our failure to qualify as a REIT also could impair our ability to implement our business strategy and would adversely affect the value of our common stock. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to remain qualified as a REIT. Although we believe that we qualify as a REIT, we cannot assure you that we will remain qualified as a REIT for U.S. federal income tax purposes.
Certain subsidiaries might fail to qualify or remain qualified as a REIT
We own interests in a number of entities which have elected to be taxed as REITs for U.S. federal income tax purposes, some of which we consolidate for financial reporting purposes but each of which is treated as a separate REIT for federal income tax purposes (each a “Subsidiary REIT”). To qualify as a REIT, each Subsidiary REIT must independently satisfy all of the REIT qualification requirements under the Code, together with all other rules applicable to REITs. Provided that each Subsidiary REIT qualifies as a REIT, our interests in the Subsidiary REITs will be treated as qualifying real estate assets for purposes of the REIT asset tests. If a Subsidiary REIT fails to qualify as a REIT in any taxable year, such Subsidiary REIT will be subject to federal and state income taxes and may not be able to qualify as a REIT for the four subsequent taxable years. Any such failure could have an adverse effect on our ability to comply with the REIT income and asset tests, and thus our ability to qualify as a REIT, unless we are able to avail ourselves of certain relief provisions.
The 90% annual distribution requirement will decrease our liquidity and may limit our ability to engage in otherwise beneficial transactions
To comply with the 90% distribution requirement applicable to REITs and to avoid the nondeductible excise tax, we must make distributions to our stockholders. Although we anticipate that we generally will have sufficient cash or liquid assets to enable us to satisfy the REIT distribution requirement, it is possible that, from time to time, we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement. This may be due to timing differences between the actual receipt of income and actual payment of deductible expenses, on the one hand, and the inclusion of that income and deduction of those expenses in arriving at our taxable income, on the other hand. In addition, non-deductible expenses such as principal amortization or repayments or capital expenditures in excess of non-cash deductions may cause us to fail to have sufficient cash or liquid assets to enable us to satisfy the 90% distribution requirement. In the event that timing differences occur, or we deem it appropriate to retain cash, we may borrow funds, even if the then-prevailing market conditions are not favorable for these borrowings, issue additional equity securities (although we cannot assure you that we will be able to do so), pay taxable stock dividends, if possible, distribute other property or securities or engage in other transactions intended to enable us to meet the REIT distribution requirements. This may require us to raise additional capital to meet our obligations.
Our use of TRSs is limited under the Code
Under the Code, no more than 20% of the value of the gross assets of a REIT may be represented by securities of one or more TRSs. This limitation may affect our ability to increase the size of our TRSs’ operations and assets, and there can be no assurance that we will be able to comply with the applicable limitation, or that such compliance will not adversely affect our business. Also, our TRSs may not, among other things, operate or manage certain health care facilities, which may cause us to forgo investments we might otherwise make. Finally, we may be subject to a 100% excise tax on the income derived from certain transactions with our TRSs that are not on an arm's-length basis. We believe our arrangements with our TRSs are on arm's-length terms and intend to continue to operate in a manner that allows us to avoid incurring the 100% excise tax described above, but there can be no assurance that we will be able to avoid application of that tax.
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The lease of qualified health care properties to a taxable REIT subsidiary is subject to special requirements
We lease certain qualified health care properties to taxable REIT subsidiaries (or limited liability companies of which the taxable REIT subsidiaries are members), which lessees contract with managers (or related parties) to manage the health care operations at these properties. The rents from this taxable REIT subsidiary lessee structure are treated as qualifying rents from real property if (1) they are paid pursuant to an arm's-length lease of a qualified health care property with a taxable REIT subsidiary and (2) the manager qualifies as an eligible independent contractor (as defined in the Code). If any of these conditions are not satisfied, then the rents will not be qualifying rents.
If certain sale-leaseback transactions are not characterized by the Internal Revenue Service (“IRS”) as “true leases,” we may be subject to adverse tax consequences
We have purchased certain properties and leased them back to the sellers of such properties, and we may enter into similar transactions in the future. We intend for any such sale-leaseback transaction to be structured in such a manner that the lease will be characterized as a “true lease,” thereby allowing us to be treated as the owner of the property for U.S. federal income tax purposes. However, depending on the terms of any specific transaction, the IRS might take the position that the transaction is not a “true lease” but is more properly treated in some other manner. In the event any sale-leaseback transaction is challenged and successfully re-characterized by the IRS, we would not be entitled to claim the deductions for depreciation and cost recovery generally available to an owner of property. Furthermore, if a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT asset tests or income tests and, consequently, could lose our REIT status effective with the year of re-characterization. Alternatively, the amount of our REIT taxable income could be recalculated, which may cause us to fail to meet the REIT annual distribution requirements for a taxable year.
We could be subject to changes in our tax rates, the adoption of new U.S. or international tax legislation, or exposure to additional tax liabilities
We are subject to taxes in the U.S. and foreign jurisdictions. Because the U.S. maintains a worldwide corporate tax system, the foreign and U.S. tax systems are somewhat interdependent. Longstanding international norms that determine each country's jurisdiction to tax cross-border international trade are evolving and could reduce the ability of our foreign subsidiaries to deduct for foreign tax purposes the interest they pay on loans from us, thereby increasing the foreign tax liability of the subsidiaries; it is also possible that foreign countries could increase their withholding taxes on dividends and interest.
Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates or changes in tax laws or their interpretation. We are also subject to the examination of our tax returns and other tax matters by the IRS and other tax authorities and governmental bodies. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for taxes. There can be no assurance as to the outcome of these examinations. If we were subject to review or examination by the IRS or applicable foreign jurisdiction as the result of any new tax law changes, the ultimate determination of which may change our taxes owed for an amount in excess of amounts previously accrued or recorded, our financial condition, operating results, and cash flows could be adversely affected.
The present federal income tax treatment of REITs may be modified, possibly with retroactive effect, by legislative, judicial or administrative action at any time, which could affect the federal income tax treatment of an investment in us. The federal income tax rules dealing with U.S. federal income taxation and REITs are constantly under review by persons involved in the legislative process, the IRS and the U.S. Treasury Department, which results in statutory changes as well as frequent revisions to regulations and interpretations.
We cannot predict how changes in the tax laws in the U.S. or foreign jurisdictions might affect our investors or us. Revisions in tax laws and interpretations thereof could significantly and negatively affect our ability to qualify as a REIT, as well as the tax considerations relevant to an investment in us, could cause us to change our investments and commitments, and adversely affect our earnings and cash flow.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We lease our corporate headquarters located at 4500 Dorr Street, Toledo, Ohio 43615. We also lease corporate offices throughout the U.S., Canada, the United Kingdom and Luxembourg and have ground leases relating to certain of our properties. The following table sets forth certain information regarding the properties that comprise our consolidated real property and real estate loan investments as of December 31, 2020 (dollars in thousands):
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| Seniors Housing Operating | Triple-net | Outpatient Medical | ||||||||||||||||||||||||||||||||||||
| Property Location | Number of Properties | Total Investment | Annualized Revenues(1) | Number of Properties | Total Investment | Annualized Revenues(1) | Number of Properties | Total Investment | Annualized Revenues(1) | |||||||||||||||||||||||||||||
Alabama | 2 | $ | 15,547 | $ | 5,955 | 2 | $ | 19,186 | $ | 2,562 | 2 | $ | 34,636 | $ | 4,626 | |||||||||||||||||||||||
Arkansas | — | — | — | — | — | — | 1 | 23,932 | 3,619 | |||||||||||||||||||||||||||||
Arizona | 7 | 88,797 | 27,276 | — | — | — | 7 | 81,371 | 8,904 | |||||||||||||||||||||||||||||
California | 78 | 2,828,278 | 578,066 | 23 | 455,370 | 64,088 | 39 | 943,263 | 73,657 | |||||||||||||||||||||||||||||
Colorado | 12 | 440,994 | 82,385 | 11 | 276,364 | 29,041 | 3 | 32,331 | 5,464 | |||||||||||||||||||||||||||||
Connecticut | 3 | 69,392 | 14,888 | 8 | 114,188 | 15,169 | — | — | — | |||||||||||||||||||||||||||||
District Of Columbia | 2 | 81,008 | 9,534 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Delaware | 3 | 67,202 | 21,516 | 7 | 111,356 | 12,184 | — | 51,372 | 1,548 | |||||||||||||||||||||||||||||
Florida | 7 | 351,736 | 58,586 | 51 | 567,485 | 57,614 | 24 | 228,424 | 42,292 | |||||||||||||||||||||||||||||
Georgia | 9 | 127,428 | 33,200 | 3 | 39,834 | 2,715 | 12 | 222,174 | 27,456 | |||||||||||||||||||||||||||||
Iowa | 3 | 47,758 | 17,434 | 7 | 55,982 | 6,184 | — | — | — | |||||||||||||||||||||||||||||
Idaho | 1 | 20,512 | 3,631 | — | — | — | 2 | 52,930 | 3,433 | |||||||||||||||||||||||||||||
Illinois | 16 | 441,293 | 94,750 | 25 | 347,417 | 32,780 | 7 | 115,858 | 14,600 | |||||||||||||||||||||||||||||
Indiana | 3 | 90,732 | 8,086 | 27 | 334,689 | 50,198 | — | — | — | |||||||||||||||||||||||||||||
Kansas | 3 | 67,391 | 13,979 | 27 | 240,888 | 30,101 | — | — | — | |||||||||||||||||||||||||||||
Kentucky | 2 | 36,324 | 11,374 | 6 | 57,010 | 7,042 | — | — | — | |||||||||||||||||||||||||||||
Louisiana | 3 | 49,884 | 13,295 | 1 | 7,785 | 840 | — | — | — | |||||||||||||||||||||||||||||
Massachusetts | 13 | 346,901 | 62,062 | 8 | 96,521 | 16,031 | 7 | 108,729 | 12,847 | |||||||||||||||||||||||||||||
Maryland | 8 | 404,791 | 79,794 | 21 | 273,062 | 14,989 | 11 | 246,339 | 27,273 | |||||||||||||||||||||||||||||
Maine | 1 | 23,988 | 11,866 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Michigan | 6 | 179,491 | 27,958 | 29 | 267,661 | 27,330 | 5 | 79,400 | 7,568 | |||||||||||||||||||||||||||||
Minnesota | 3 | 81,102 | 11,252 | 11 | 227,346 | 27,666 | 7 | 150,504 | 29,941 | |||||||||||||||||||||||||||||
Missouri | 3 | 68,961 | 11,294 | 1 | 11,752 | 69 | 12 | 197,889 | 23,962 | |||||||||||||||||||||||||||||
Mississippi | 2 | 15,910 | 8,694 | 1 | 10,453 | — | 1 | 36,417 | 2,265 | |||||||||||||||||||||||||||||
Montana | 1 | 5,749 | 4,451 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
North Carolina | 3 | 111,536 | 18,502 | 51 | 384,336 | 56,361 | 24 | 410,779 | 32,576 | |||||||||||||||||||||||||||||
Nebraska | — | — | — | 4 | 28,806 | 4,728 | 2 | 31,536 | 4,406 | |||||||||||||||||||||||||||||
New Hampshire | — | — | — | 4 | 45,892 | 6,803 | — | — | — | |||||||||||||||||||||||||||||
New Jersey | 28 | 709,757 | 177,237 | 40 | 734,164 | 58,934 | 13 | 340,111 | 48,302 | |||||||||||||||||||||||||||||
New Mexico | 1 | 13,230 | 774 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Nevada | 6 | 105,538 | 24,727 | 1 | 18,154 | 3,327 | 9 | 144,490 | 10,057 | |||||||||||||||||||||||||||||
New York | 29 | 598,244 | 114,782 | 4 | 40,469 | 3,525 | 15 | 431,649 | 26,950 | |||||||||||||||||||||||||||||
Ohio | 20 | 391,987 | 47,786 | 34 | 310,810 | 44,716 | 5 | 88,341 | 8,944 | |||||||||||||||||||||||||||||
Oklahoma | 2 | 28,900 | 1,781 | 20 | 213,073 | 25,723 | 1 | 14,354 | 2,085 | |||||||||||||||||||||||||||||
Oregon | 8 | 88,469 | 15,034 | 1 | 2,671 | 818 | 1 | 44,609 | 2,730 | |||||||||||||||||||||||||||||
Pennsylvania | 15 | 223,050 | 59,129 | 70 | 743,994 | 112,934 | 4 | 75,136 | 6,966 | |||||||||||||||||||||||||||||
South Carolina | 1 | 4,029 | 4,697 | 8 | 36,765 | 3,181 | 2 | 10,364 | 1,570 | |||||||||||||||||||||||||||||
Tennessee | 2 | 46,751 | 13,832 | 4 | 36,721 | 3,985 | 5 | 130,646 | 13,381 | |||||||||||||||||||||||||||||
Texas | 47 | 1,169,494 | 231,006 | 24 | 323,695 | 48,740 | 55 | 1,112,114 | 113,178 | |||||||||||||||||||||||||||||
Utah | 3 | 68,458 | 15,628 | 1 | 22,993 | 2,103 | — | — | — | |||||||||||||||||||||||||||||
Virginia | 5 | 274,569 | 72,707 | 26 | 272,615 | 34,368 | 6 | 114,942 | 13,617 | |||||||||||||||||||||||||||||
Washington | 23 | 498,147 | 101,953 | 7 | 91,264 | 10,254 | 9 | 207,224 | 28,552 | |||||||||||||||||||||||||||||
Wisconsin | 2 | 19,298 | 4,816 | 4 | 68,135 | 8,905 | 5 | 91,270 | 9,367 | |||||||||||||||||||||||||||||
West Virginia | — | — | — | 3 | 35,159 | 4,648 | — | — | — | |||||||||||||||||||||||||||||
Total domestic | 386 | 10,302,626 | 2,115,717 | 575 | 6,924,065 | 830,656 | 296 | 5,853,134 | 612,136 | |||||||||||||||||||||||||||||
Canada | 106 | 2,137,818 | 426,383 | 6 | 144,937 | 10,192 | — | — | — | |||||||||||||||||||||||||||||
United Kingdom | 64 | 2,107,965 | 342,293 | 60 | 831,038 | 110,363 | — | 173,364 | 11,667 | |||||||||||||||||||||||||||||
Total international | 170 | 4,245,783 | 768,676 | 66 | 975,975 | 120,555 | — | 173,364 | 11,667 | |||||||||||||||||||||||||||||
Grand total | 556 | $ | 14,548,409 | $ | 2,884,393 | 641 | $ | 7,900,040 | $ | 951,211 | 296 | $ | 6,026,498 | $ | 623,803 | |||||||||||||||||||||||
(1) Represents revenue for the month ended December 31, 2020 annualized.
The following table sets forth occupancy and average annualized revenues for certain property types (excluding investments in unconsolidated entities):
40
Occupancy(1) | Average Annualized Revenues(2) | |||||||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||
Seniors Housing Operating(3) | 77.4% | 86.9% | $ | 52,280 | $ | 56,329 | per unit | |||||||||||||||||||||||||
Triple-net(4) | 72.7% | 84.3% | 15,291 | 14,578 | per bed/unit | |||||||||||||||||||||||||||
Outpatient Medical(5) | 94.9% | 94.1% | 36 | 34 | per sq. ft. | |||||||||||||||||||||||||||
(1) We use unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy for properties other than Outpatient Medical buildings and have not independently verified the information.
(2) Represents December annualized revenues divided by total beds, units or square feet as presented in the tables above.
(3) Occupancy represents average occupancy for the three months ended December 31.
(4) Occupancy represents average quarterly operating occupancy based on the quarters ended September 30 and excludes properties that are unstabilized, closed or for which data is not available or meaningful.
(5) Occupancy represents the percentage of total rentable square feet leased and occupied (including month-to-month and holdover leases and excluding terminations) as of December 31.
The following table sets forth information regarding lease expirations for certain portions of our portfolio as of December 31, 2020 (dollars in thousands):
Expiration Year(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Properties | 6 | 9 | 2 | 4 | 28 | 67 | 18 | 15 | 15 | 23 | 433 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Base rent(2) | $ | 9,020 | $ | 6,503 | $ | 840 | $ | 11,431 | $ | 5,968 | $ | 85,929 | $ | 36,129 | $ | 22,587 | $ | 31,309 | $ | 44,598 | $ | 448,545 | ||||||||||||||||||||||||||||||||||||||||||||||
% of base rent | 1.3 | % | 0.9 | % | 0.1 | % | 1.6 | % | 0.8 | % | 12.2 | % | 5.1 | % | 3.2 | % | 4.5 | % | 6.3 | % | 64.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Units | 877 | 942 | 222 | 692 | 1,759 | 5,089 | 2,350 | 1,633 | 1,429 | 2,439 | 44,576 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
% of units | 1.4 | % | 1.5 | % | 0.4 | % | 1.1 | % | 2.8 | % | 8.2 | % | 3.8 | % | 2.6 | % | 2.3 | % | 3.9 | % | 72.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Square feet | 1,507,450 | 1,571,222 | 1,750,045 | 1,892,217 | 1,024,825 | 1,046,414 | 994,202 | 870,878 | 714,632 | 1,394,936 | 3,668,425 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Base rent(2) | $ | 44,135 | $ | 47,043 | $ | 48,626 | $ | 57,471 | $ | 28,244 | $ | 28,049 | $ | 25,384 | $ | 22,168 | $ | 20,494 | $ | 34,637 | $ | 79,937 | ||||||||||||||||||||||||||||||||||||||||||||||
% of base rent | 10.1 | % | 10.8 | % | 11.1 | % | 13.2 | % | 6.5 | % | 6.4 | % | 5.8 | % | 5.1 | % | 4.7 | % | 7.9 | % | 18.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Leases | 375 | 326 | 360 | 293 | 211 | 166 | 129 | 113 | 71 | 89 | 125 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
% of leases | 16.6 | % | 14.4 | % | 15.9 | % | 13.0 | % | 9.3 | % | 7.4 | % | 5.7 | % | 5.0 | % | 3.1 | % | 3.9 | % | 5.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||
(1) Excludes investments in unconsolidated entities, developments, land parcels, loans receivable and sub-leases. Investments classified as held for sale are included in 2021.
(2) The most recent monthly cash base rent annualized. Base rent does not include tenant recoveries or amortization of above and below market lease intangibles or other non-cash income.
Item 3. Legal Proceedings
From time to time, there are various legal proceedings pending against us that arise in the ordinary course of our business. Management does not believe that the resolution of any of these legal proceedings either individually or in the aggregate will have a material adverse effect on our business, results of operations or financial condition. Further, from time to time, we are party to certain legal proceedings for which third parties, such as tenants, operators and/or managers are contractually obligated to indemnify, defend and hold us harmless. In some of these matters, the indemnitors have insurance for the potential damages. In other matters, we are being defended by tenants and other obligated third parties and these indemnitors may not have sufficient insurance, assets, income or resources to satisfy their defense and indemnification obligations to us. The unfavorable resolution of such legal proceedings could, individually or in the aggregate, materially adversely affect the indemnitors’ ability to satisfy their respective obligations to us, which, in turn, could have a material adverse effect on our business, results of operations or financial condition. It is management’s opinion that there are currently no such legal proceedings pending that will, individually or in the aggregate, have such a material adverse effect. Despite management’s view of the ultimate resolution of these legal proceedings, we may have significant legal expenses and costs associated with the defense of such matters. Further, management cannot predict the outcome of these legal proceedings and if management’s expectation regarding such matters is not correct, such proceedings could have a material adverse effect on our business, results of operations or financial condition.
Item 4. Mine Safety Disclosures
None.
41
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock trades on the New York Stock Exchange (NYSE:WELL). There were 3,335 stockholders of record as of January 29, 2021.
Stockholder Return Performance Presentation
Set forth below is a line graph comparing the yearly percentage change and the cumulative total stockholder return on our shares of common stock against the cumulative total return of the S&P Composite-500 Stock Index and the FTSE NAREIT Equity Index. As of December 31, 2020, 153 companies comprised the FTSE NAREIT Equity Index, which consists of REITs identified by NAREIT as equity (those REITs which have at least 75% of their investments in real property). The data are based on the closing prices as of December 31 for each of the five years. 2015 equals $100 and dividends are assumed to be reinvested.
| 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018 | 12/31/2019 | 12/31/2020 | |||||||||||||||||||||||||||||||||
| S & P 500 | $ | 100.00 | $ | 113.51 | $ | 138.29 | $ | 132.23 | $ | 173.86 | $ | 202.96 | ||||||||||||||||||||||||||
| Welltower Inc. | 100.00 | 97.45 | 97.65 | 112.59 | 138.52 | 121.24 | ||||||||||||||||||||||||||||||||
| FTSE NAREIT Equity | 100.00 | 111.99 | 117.84 | 112.39 | 141.61 | 126.25 | ||||||||||||||||||||||||||||||||
Except to the extent that we specifically incorporate this information by reference, the foregoing Stockholder Return Performance Presentation shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended. This information shall not otherwise be deemed filed under such Acts.
During the three months ended December 31, 2020, we acquired shares of our common stock held by employees who tendered shares to satisfy tax withholding obligations upon the vesting of previously issued restricted stock awards. Specifically, the number of shares of common stock acquired from employees and the average prices paid per share for each month in the fourth quarter ended December 31, 2020 are as shown in the table below.
On May 1, 2020, our Board of Directors authorized a share repurchase program whereby we may repurchase up to $1 billion of common stock through December 31, 2021 (the "Repurchase Program"). Under this authorization, we are not required to purchase shares but may choose to do so in the open market or through private transactions at times and amounts based on our evaluation of market conditions and other factors. We expect to finance any share repurchases under the Repurchase Program using available cash and may use proceeds from borrowings or debt offerings. We did not repurchase any shares of our common stock during the three months ended December 31, 2020.
42
| Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
| Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Repurchase Program | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Repurchase Program | ||||||||||||||||||||||
| October 1, 2020 through October 31, 2020 | — | $ | — | — | $ | — | ||||||||||||||||||||
| November 1, 2020 through November 30, 2020 | 44 | 58.13 | — | — | ||||||||||||||||||||||
| December 1, 2020 through December 31, 2020 | 166,969 | 65.72 | — | — | ||||||||||||||||||||||
| Totals | 167,013 | $ | 65.72 | — | $ | 992,348,000 | ||||||||||||||||||||
Item 6. Selected Financial Data
The following selected financial data for the five years ended December 31, 2020 are derived from our audited consolidated financial statements (in thousands, except per share data):
| Year Ended December 31, | ||||||||||||||||||||||||||||||||
| 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||
| Operating Data | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 4,281,160 | $ | 4,316,641 | $ | 4,700,499 | $ | 5,121,306 | $ | 4,605,967 | ||||||||||||||||||||||
| Total expenses | 3,571,907 | 4,017,025 | 4,277,009 | 4,578,414 | 4,637,519 | |||||||||||||||||||||||||||
| Income from continuing operations before income taxes and other items | 709,253 | 299,616 | 423,490 | 542,892 | (31,552) | |||||||||||||||||||||||||||
| Income tax (expense) benefit | 19,128 | (20,128) | (8,674) | (2,957) | (9,968) | |||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | (10,357) | (83,125) | (641) | 42,434 | (8,083) | |||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | 364,046 | 344,250 | 415,575 | 748,041 | 1,088,455 | |||||||||||||||||||||||||||
| Income from continuing operations | 1,082,070 | 540,613 | 829,750 | 1,330,410 | 1,038,852 | |||||||||||||||||||||||||||
| Net income | 1,082,070 | 540,613 | 829,750 | 1,330,410 | 1,038,852 | |||||||||||||||||||||||||||
| Preferred stock dividends | 65,406 | 49,410 | 46,704 | — | — | |||||||||||||||||||||||||||
| Preferred stock redemption charge | — | 9,769 | — | — | — | |||||||||||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | 4,267 | 17,839 | 24,796 | 97,978 | 60,008 | |||||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 1,012,397 | $ | 463,595 | $ | 758,250 | $ | 1,232,432 | $ | 978,844 | ||||||||||||||||||||||
| Other Data | ||||||||||||||||||||||||||||||||
| Average number of common shares outstanding: | ||||||||||||||||||||||||||||||||
| Basic | 358,275 | 367,237 | 373,620 | 401,845 | 415,451 | |||||||||||||||||||||||||||
| Diluted | 360,227 | 369,001 | 375,250 | 403,808 | 417,387 | |||||||||||||||||||||||||||
| Per Share Data | ||||||||||||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||||||||||||
| Income from continuing operations | $ | 3.02 | $ | 1.47 | $ | 2.22 | $ | 3.31 | $ | 2.50 | ||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 2.83 | $ | 1.26 | $ | 2.03 | $ | 3.07 | $ | 2.36 | ||||||||||||||||||||||
| Diluted: | ||||||||||||||||||||||||||||||||
| Income from continuing operations | $ | 3.00 | $ | 1.47 | $ | 2.21 | $ | 3.29 | $ | 2.49 | ||||||||||||||||||||||
Net income attributable to common stockholders (1) | $ | 2.81 | $ | 1.26 | $ | 2.02 | $ | 3.05 | $ | 2.33 | ||||||||||||||||||||||
| Cash distributions per common share | $ | 3.44 | $ | 3.48 | $ | 3.48 | $ | 3.48 | $ | 2.70 | ||||||||||||||||||||||
| December 31, | ||||||||||||||||||||||||||||||||
| Balance Sheet Data | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||
Net real estate investments(2) | $ | 26,563,629 | $ | 26,171,077 | $ | 28,420,769 | $ | 31,119,271 | $ | 28,474,947 | ||||||||||||||||||||||
| Total assets | 28,865,184 | 27,944,445 | 30,342,072 | 33,380,751 | 32,483,642 | |||||||||||||||||||||||||||
Total debt and lease obligations(2) | 12,358,245 | 11,731,936 | 13,297,144 | 15,388,765 | 14,216,986 | |||||||||||||||||||||||||||
| Total liabilities | 13,185,279 | 12,643,799 | 14,331,427 | 16,398,247 | 15,258,580 | |||||||||||||||||||||||||||
| Total preferred stock | 1,006,250 | 718,503 | 718,498 | — | — | |||||||||||||||||||||||||||
| Total equity | 15,281,472 | 14,925,452 | 15,586,599 | 16,506,627 | 16,881,572 | |||||||||||||||||||||||||||
(1) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. | ||||||||||||||||||||||||||||||||
(2) Effective January 1, 2019, we adopted new guidance on leases using the prospective method. | ||||||||||||||||||||||||||||||||
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
| EXECUTIVE SUMMARY | |||||
| Company Overview | |||||
| Business Strategy | |||||
| Key Transactions | |||||
| Key Performance Indicators, Trends and Uncertainties | |||||
| Corporate Governance | |||||
| LIQUIDITY AND CAPITAL RESOURCES | |||||
| Sources and Uses of Cash | |||||
| Off-Balance Sheet Arrangements | |||||
| Contractual Obligations | |||||
| Capital Structure | |||||
| RESULTS OF OPERATIONS | |||||
| Summary | |||||
| Seniors Housing Operating | |||||
| Triple-net | |||||
| Outpatient Medical | |||||
| Non-Segment/Corporate | |||||
| OTHER | |||||
| Non-GAAP Financial Measures | |||||
| Critical Accounting Policies | |||||
44
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis is based primarily on the consolidated financial statements of Welltower Inc. presented in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for the periods presented and should be read together with the notes thereto contained in this Annual Report on Form 10-K. Other important factors are identified in “Item 1 — Business” and “Item 1A — Risk Factors” above.
Executive Summary
Company Overview
Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower™, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States (“U.S.”), Canada and the United Kingdom (“U.K.”), consisting of seniors housing and post-acute communities and outpatient medical properties.
The following table summarizes our consolidated portfolio for the year ended December 31, 2020 (dollars in thousands):
| Percentage of | Number of | |||||||||||||||||||
| Type of Property | NOI(1) | NOI | Properties | |||||||||||||||||
| Seniors Housing Operating | $ | 755,552 | 37.6 | % | 556 | |||||||||||||||
| Triple-net | 748,121 | 37.2 | % | 641 | ||||||||||||||||
| Outpatient Medical | 505,071 | 25.2 | % | 296 | ||||||||||||||||
| Totals | $ | 2,008,744 | 100.0 | % | 1,493 | |||||||||||||||
(1) Represents consolidated net operating income ("NOI") and excludes our share of investments in unconsolidated entities. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount. See Non-GAAP Financial Measures for additional information and reconciliation.
The COVID-19 pandemic has had and may continue to have material and adverse effects on our financial condition, results of operations and cash flows in the future. The extent to which the COVID-19 pandemic impacts our operations and those of our operators and tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the effectiveness and availability of vaccines and the success of ongoing vaccination deployment efforts in our facilities and the geographic areas in which we operate, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others.
Our Seniors Housing Operating revenues are dependent on occupancy. While admission bans were lifted across our portfolio during the second and third quarter, with the ramp up of COVID-19 cases in the general community in the fourth quarter, admissions bans, both government-imposed and voluntary bans adopted by operators, have been reinstated in many locations which have significantly affected occupancy rates. Occupancy has consistently declined since the beginning of the pandemic to 76.2% as of December 31, 2020. Through February 5, 2021, total occupancy declined an additional 180 basis points to 74.4%. Occupancy metrics represents approximate spot occupancy as reported by our operators for properties in operation as of February 29, 2020, including unconsolidated properties but excluding acquisitions, executed dispositions and development conversions since such date.
We have incurred increased operational costs as a result of the introduction of public health measures and other regulations affecting our properties, as well as additional health and safety measures adopted by us and our operators related to the COVID-19 pandemic, including increases in labor, personal protective equipment and sanitation. We expect total Seniors Housing Operating expenses to remain elevated during the pandemic and potentially beyond as these additional health and safety measures become standard practice.
Our Triple-net operators are experiencing similar occupancy declines and operating costs as described above with respect to our Seniors Housing Operating properties. However, long-term/post-acute care facilities are generally experiencing a higher degree of occupancy declines. These factors may continue to impact the ability of our Triple-net operators to make contractual rent payments to us in the future. Many of our Triple-net operators received funds under the Coronavirus Aid Relief, and Economic Security Act (“CARES Act”) Paycheck Protection Program. In addition, operators of long-term/post-acute care facilities have generally received funds from Phase 1 of the Provider Relief Fund and operators of assisted living facilities have or are expected to receive funds from Phase 2 of the Provider Relief Fund. Accordingly, collection of Triple-net rent due during the COVID-19 pandemic to date (from March to December) has generally been consistent with historical collection rates and no significant rent concessions or deferrals have been made.
45
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our Outpatient Medical tenants have experienced temporary medical practice closures or decreases in revenue due to government-imposed restrictions on elective medical procedures, stay at home orders or decisions by patients to delay treatments which may continue to adversely affect their ability to make contractual rent payments. These factors have and may continue to cause operators or tenants to seek modifications of such obligations, resulting in reductions in revenue and increases in uncollectible receivables. We will continue to evaluate each request on a case-by-case basis and determine if a form of rent relief is warranted following an examination of the tenant’s financial health, rent coverage, current operating situation and other factors.
Outpatient Medical rent collections through March were generally consistent with pre COVID-19 levels. During the second quarter we executed short term rent deferrals with certain Outpatient Medical tenants which in most cases were required to be repaid by year end. Since then we have collected approximately 99% of Outpatient Medical rent due in the second half of the year, with uncollected amounts primarily attributable to local jurisdictions with COVID-19 related ordinances providing temporary rent relief to tenants. Furthermore, collections of deferred rent due under executed deferrals was over 99%. To the extent that deferred rent is not repaid as expected, or the prolonged impact of the COVID-19 pandemic causes operators or tenants to seek further modifications of their lease agreements, we may recognize reductions in revenue and increases in uncollectible receivables.
As a result of uncertainty regarding the length and severity of the COVID-19 pandemic and the impact of the pandemic on our business and related industries, our investments in and acquisitions of seniors housing and health care properties, as well as our ability to transition or sell properties with profitable results in the future, may be limited. In response to the COVID-19 pandemic, acquisitions during the year ended December 31, 2020 declined compared to recent years. Additionally, we undertook certain opportunistic disposals to enhance near-term liquidity. We have a significant development portfolio as of December 31, 2020. To date we have only experienced minor construction and licensing delays with respect to our development portfolio, but may experience more significant delays in the future. Such disruptions to acquisition, disposition and development activity may negatively impact our long-term competitive position.
Business Strategy
Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in NOI and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, relationship and geographic location.
Substantially all of our revenues are derived from operating lease rentals, resident fees and services and interest earned on outstanding loans receivable. These items represent our primary sources of liquidity to fund distributions and depend upon the continued ability of our obligors to make contractual rent and interest payments to us and the profitability of our operating properties. To the extent that our obligors/partners experience operating difficulties and become unable to generate sufficient cash to make payments or operating distributions to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by the type of property. Our asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division manages and monitors the outpatient medical portfolio with a comprehensive process including review of tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs and market conditions among other things. We evaluate the operating environment in each property’s market to determine the likely trend in operating performance of the facility. When we identify unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we generally aim to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of revenue and the value of our investment.
In addition to our asset management and research efforts, we also aim to structure our relevant investments to mitigate payment risk. Operating leases and loans are normally credit enhanced by guarantees and/or letters of credit. In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.
For the year ended December 31, 2020, resident fees and services and rental income represented 67% and 31%, respectively, of total revenues. Substantially all of our operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Our yield on loans receivable depends upon a number of factors, including the stated interest rate, the average principal amount outstanding during the term of the loan and any interest rate adjustments.
Our primary sources of cash include resident fees and services, rent and interest receipts, borrowings under our unsecured revolving credit facility and commercial paper program, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions,
46
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses, general and administrative expenses and other expenses. Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund these uses of cash.
We also continuously evaluate opportunities to finance future investments. New investments are generally funded from temporary borrowings under our unsecured revolving credit facility and commercial paper program, internally generated cash and the proceeds from investment dispositions. Our investments generate cash from NOI and principal payments on loans receivable. Permanent financing for future investments, which replaces funds drawn under our unsecured revolving credit facility and commercial paper program, has historically been provided through a combination of the issuance of public debt and equity securities and the incurrence or assumption of secured debt.
Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders. It is also likely that investment dispositions may occur in the future. To the extent that investment dispositions exceed new investments, our revenues and cash flows from operations could be adversely affected. We expect to reinvest the proceeds from any investment dispositions in new investments. To the extent that new investment requirements exceed our available cash on-hand, we expect to borrow under our unsecured revolving credit facility and commercial paper program. During 2020, in response to the COVID-19 pandemic, we were strategic and opportunistic in disposing of certain real estate which provided significant near term liquidity. At December 31, 2020, we had $1,545,046,000 of cash and cash equivalents, $475,997,000 of restricted cash and $3,000,000,000 of available borrowing capacity under our unsecured revolving credit facility.
Key Transactions
Capital The following summarizes key capital transactions that occurred during the year ended December 31, 2020:
•In April 2020, we closed on a $1.0 billion two-year unsecured term loan. The term loan bears interest at a rate of 1-month LIBOR + 1.20%, based on our credit rating.
•In June 2020, we completed the issuance of $600,000,000 senior unsecured notes bearing interest at 2.75% with a maturity date of January 2031. Net proceeds were used to fund tender offers for $426,248,000 of our 3.75% senior unsecured notes due 2023 and our 3.95% senior unsecured notes due 2023 which settled on July 1, 2020. The remaining proceeds were used to reduce borrowings under our term loan by $140,000,000.
•We sold 2,128,000 shares of common stock under our ATM and DRIP programs, primarily in the first quarter, via both cash settle and forward sale agreements, generating gross proceeds of approximately $175,484,000. The sale of these shares and settlement of previously outstanding forward sales resulted in gross proceeds of approximately $607,177,000 which were used to reduce borrowings under our unsecured revolving credit facility.
•We extinguished $632,288,000 of secured debt at a blended average interest rate of 2.21% throughout 2020.
Investments The following summarizes property acquisitions and joint venture investments completed during the year ended December 31, 2020 (dollars in thousands):
| Properties | Investment Amount(1) | Capitalization Rates(2) | Book Amount(3) | |||||||||||||||||||||||
| Seniors Housing Operating | 26 | $ | 574,793 | 3.5% | $ | 610,857 | ||||||||||||||||||||
| Triple-net | 11 | 88,908 | 6.5% | 90,731 | ||||||||||||||||||||||
| Outpatient Medical | 17 | 246,516 | 6.1% | 249,312 | ||||||||||||||||||||||
| Totals | 54 | $ | 910,217 | 4.5% | $ | 950,900 | ||||||||||||||||||||
(1) Represents stated pro rata purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S. GAAP.
(2) Represents annualized contractual or projected NOI to be received in cash divided by investment amounts.
(3) Represents amounts recorded in real property including fair value adjustments pursuant to U.S. GAAP. See Note 3 to our consolidated financial statements for additional information.
Dispositions The following summarizes property dispositions completed during the year ended December 31, 2020 (dollars in thousands):
| Properties | Proceeds(1) | Capitalization Rates(2) | Book Amount(3) | |||||||||||||||||||||||
| Seniors Housing Operating | 31 | $ | 1,282,439 | 4.8% | $ | 1,289,769 | ||||||||||||||||||||
| Triple-net | 8 | 109,439 | 7.9% | 51,666 | ||||||||||||||||||||||
| Outpatient Medical | 108 | 2,324,062 | 5.6% | 1,755,864 | ||||||||||||||||||||||
| Totals | 147 | $ | 3,715,940 | 5.4% | $ | 3,097,299 | ||||||||||||||||||||
(1) Represents pro rata proceeds received upon disposition including any seller financing.
(2) Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.
(3) Represents carrying value of net real estate assets at time of disposition. See Note 5 to our consolidated financial statements for additional information.
47
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Dividends On February 9, 2021, the Board of Directors declared a cash dividend for the quarter ended December 31, 2020 of $0.61 per share, consistent with the cash dividends for the quarters ended September 30, June 30 and March 31, 2020, representing a 30% decrease from the $0.87 per share dividend for the quarter ended December 31, 2019. The dividend declaration represents the 199th consecutive quarterly dividend payment.
Key Performance Indicators, Trends and Uncertainties
We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to operating performance, credit strength and concentration risk. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results, in making operating decisions, and for budget planning purposes.
Operating Performance We believe that net income and net income attributable to common stockholders (“NICS”) per the Statement of Comprehensive Income are the most appropriate earnings measures. Other useful supplemental measures of our operating performance include funds from operations attributable to common stockholders (“FFO”) and consolidated net operating income (“NOI”); however, these supplemental measures are not defined by U.S. GAAP. Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion and reconciliations. These earnings measures are widely used by investors and analysts in the valuation, comparison and investment recommendations of companies. The following table reflects the recent historical trends of our operating performance measures for the periods presented (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Net income | $ | 1,038,852 | $ | 1,330,410 | $ | 829,750 | ||||||||||||||
| Net income attributable to common stockholders | 978,844 | 1,232,432 | 758,250 | |||||||||||||||||
| Funds from operations attributable to common stockholders | 1,102,562 | 1,577,080 | 1,392,183 | |||||||||||||||||
| Consolidated net operating income | 2,008,144 | 2,431,264 | 2,267,482 | |||||||||||||||||
Credit Strength We measure our credit strength both in terms of leverage ratios and coverage ratios. The leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt, net of cash and Internal Revenue Code (“IRC”) Section 1031 deposits. The coverage ratios indicate our ability to service interest and fixed charges (interest, secured debt principal amortization and preferred dividends). We expect to maintain capitalization ratios and coverage ratios sufficient to maintain a capital structure consistent with our current profile. The coverage ratios are based on adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion and reconciliation of these measures. Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, investment recommendations and rating of companies. The following table reflects the recent historical trends for our credit strength measures for the periods presented:
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Net debt to book capitalization ratio | 40.9% | 46.5% | 45.0% | |||||||||||||||||
| Net debt to undepreciated book capitalization ratio | 33.8% | 39.4% | 37.8% | |||||||||||||||||
| Net debt to market capitalization ratio | 29.7% | 29.6% | 31.3% | |||||||||||||||||
| Adjusted interest coverage ratio | 3.97x | 4.14x | 4.11x | |||||||||||||||||
| Adjusted fixed charge coverage ratio | 3.54x | 3.78x | 3.44x | |||||||||||||||||
Concentration Risk We evaluate our concentration risk in terms of NOI by property mix, relationship mix and geographic mix. Concentration risk is a valuable measure in understanding what portion of our NOI could be at risk if certain sectors were to experience downturns. Property mix measures the portion of our NOI that relates to our various property types. Relationship mix measures the portion of our NOI that relates to our current top five relationships. Geographic mix measures the portion of our NOI that relates to our current top five states (or international equivalents). The following table reflects our recent historical trends of concentration risk by NOI for the years indicated below:
48
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
December 31,(1) | |||||||||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||||||||
| Property mix: | |||||||||||||||||||||||
| Seniors Housing Operating | 38% | 43% | 43% | ||||||||||||||||||||
| Triple-net | 37% | 38% | 40% | ||||||||||||||||||||
| Outpatient Medical | 25% | 19% | 17% | ||||||||||||||||||||
| Relationship mix: | |||||||||||||||||||||||
Sunrise Senior Living(2) | 13% | 14% | 15% | ||||||||||||||||||||
| ProMedica | 11% | 9% | 4% | ||||||||||||||||||||
Revera(2) | 5% | 6% | 7% | ||||||||||||||||||||
| Avery Healthcare | 4% | 3% | 3% | ||||||||||||||||||||
| Sagora Senior Living | 3% | 3% | 3% | ||||||||||||||||||||
| Remaining | 64% | 65% | 68% | ||||||||||||||||||||
| Geographic mix: | |||||||||||||||||||||||
| California | 14% | 13% | 14% | ||||||||||||||||||||
| United Kingdom | 10% | 8% | 9% | ||||||||||||||||||||
| Texas | 9% | 8% | 8% | ||||||||||||||||||||
| Canada | 6% | 7% | 7% | ||||||||||||||||||||
| Pennsylvania | 6% | 6% | 5% | ||||||||||||||||||||
| Remaining | 55% | 58% | 57% | ||||||||||||||||||||
(1) Excludes our share of investments in unconsolidated entities and non-segment/corporate NOI. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount.
(2) Revera owns a controlling interest in Sunrise Senior Living.
We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved and actual results may differ materially from our expectations. Factors that may cause actual results to differ from expected results are described in more detail in “Item 1 — Business — Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A — Risk Factors” and other sections of this Annual Report on Form 10-K. Management regularly monitors economic and other factors to develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends. Please refer to “Item 1 — Business,” “Item 1A — Risk Factors” in this Annual Report on Form 10-K for further discussion of these risk factors.
Corporate Governance
Maintaining investor confidence and trust is important in today’s business environment. Our Board of Directors and management are strongly committed to policies and procedures that reflect the highest level of ethical business practices. Our corporate governance guidelines provide the framework for our business operations and emphasize our commitment to increase stockholder value while meeting all applicable legal requirements. These guidelines meet the listing standards adopted by the New York Stock Exchange and are available on the Internet at www.welltower.com/investors/governance. The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.
Liquidity and Capital Resources
Sources and Uses of Cash
Our primary sources of cash include resident fees and services, rent and interest receipts, borrowings under our unsecured revolving credit facility and commercial paper program, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses, general and administrative expenses and other expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows and are discussed in further detail below. The following is a summary of our sources and uses of cash flows for the periods presented (dollars in thousands):
49
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
| Year Ended | One Year Change | Year Ended | One Year Change | Two Year Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | $ | % | 2018 | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | $ | 385,766 | $ | 316,129 | $ | 69,637 | 22 | % | $ | 309,303 | $ | 6,826 | 2 | % | $ | 76,463 | 25 | % | ||||||||||||||||||||||||||||||||||||||
| Net cash provided from (used in): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating activities | 1,364,756 | 1,535,968 | (171,212) | -11 | % | 1,583,944 | (47,976) | -3 | % | (219,188) | -14 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Investing activities | 2,347,928 | (2,048,791) | 4,396,719 | n/a | (2,386,471) | 337,680 | -14 | % | 4,734,399 | n/a | ||||||||||||||||||||||||||||||||||||||||||||||
| Financing activities | (2,080,858) | 577,150 | (2,658,008) | n/a | 818,368 | (241,218) | -29 | % | (2,899,226) | n/a | ||||||||||||||||||||||||||||||||||||||||||||||
| Effect of foreign currency translation | 3,451 | 5,310 | (1,859) | -35 | % | (9,015) | 14,325 | n/a | 12,466 | n/a | ||||||||||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 2,021,043 | $ | 385,766 | $ | 1,635,277 | 424 | % | $ | 316,129 | $ | 69,637 | 22 | % | $ | 1,704,914 | 539 | % | ||||||||||||||||||||||||||||||||||||||
Operating Activities The changes in net cash provided from operating activities are primarily attributable to declines in revenue and increases in property operating expenses, as well as the impact of short-term deferrals granted as a result of the COVID-19 pandemic in 2020. Please see “Results of Operations” for discussion of net income fluctuations. For the years ended December 31, 2020, 2019 and 2018, cash flows from operations exceeded cash distributions to stockholders.
Investing Activities The changes in net cash used in investing activities are primarily attributable to net changes in real property investments and dispositions, loans receivable and investments in unconsolidated entities which are summarized above in “Key Transactions.” Please refer to Notes 3 and 5 of our consolidated financial statements for additional information. The following is a summary of cash used in non-acquisition capital improvement activities for the periods presented (dollars in thousands):
| Year Ended | One Year Change | Year Ended | One Year Change | Two Year Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | $ | % | 2018 | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| New development | $ | 201,336 | $ | 323,488 | $ | (122,152) | -38 | % | $ | 160,706 | $ | 162,782 | 101 | % | $ | 40,630 | 25 | % | ||||||||||||||||||||||||||||||||||||||
| Recurring capital expenditures, tenant improvements and lease commissions | 83,146 | 136,535 | (53,389) | -39 | % | 90,190 | 46,345 | 51 | % | (7,044) | -8 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Renovations, redevelopments and other capital improvements | 161,843 | 192,289 | (30,446) | -16 | % | 175,993 | 16,296 | 9 | % | (14,150) | -8 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 446,325 | $ | 652,312 | $ | (205,987) | -32 | % | $ | 426,889 | $ | 225,423 | 53 | % | $ | 19,436 | 5 | % | ||||||||||||||||||||||||||||||||||||||
The change in new development is primarily due to the number and size of construction projects on-going during the relevant periods. Renovations, redevelopments and other capital improvements include expenditures to maximize property value, increase net operating income, maintain a market-competitive position and/or achieve property stabilization.
Financing Activities The changes in net cash provided from/used in financing activities are primarily attributable to changes related to our long-term debt arrangements, the issuances of common stock and dividend payments which are summarized above in “Key Transactions.” Please refer to Notes 10, 11 and 14 of our consolidated financial statements for additional information.
On April 1, 2020, in response to uncertain financial market conditions arising from the COVID-19 pandemic, we undertook steps to strengthen our balance sheet and to enhance our liquidity by entering into a $1.0 billion two-year unsecured term loan. Additionally, on June 30, 2020, we completed the issuance of $600,000,000 senior unsecured notes with a maturity date of January 2031. Net proceeds were used to fund tender offers for $426,248,000 of our 3.75% senior unsecured notes due 2023 and our 3.95% senior unsecured notes due 2023, which settled on July 1, 2020. The remaining proceeds were used to reduce borrowings under the term loan by $140,000,000. As of December 31, 2020, we have total near-term available liquidity of approximately $4.5 billion. However, we are unable to accurately predict the full impact that the pandemic will have on our results from operations, financial condition, liquidity and cash flows due to numerous factors discussed in Part I Item 1A. Risk Factors.
Off-Balance Sheet Arrangements
At December 31, 2020, we had investments in unconsolidated entities with our ownership generally ranging from 10% to 65%. We use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure. At December 31, 2020, we had nine outstanding letter of credit obligations. Please see Notes 8, 12 and 13 to our consolidated financial statements for additional information.
50
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Contractual Obligations
The following table summarizes our payment requirements under contractual obligations as of December 31, 2020 (in thousands):
| Payments Due by Period | ||||||||||||||||||||||||||||||||
| Contractual Obligations | Total | 2021 | 2022-2023 | 2024-2025 | Thereafter | |||||||||||||||||||||||||||
Senior unsecured notes and term credit facilities:(1) | ||||||||||||||||||||||||||||||||
| U.S. Dollar senior unsecured notes | $ | 8,273,752 | $ | — | $ | 673,752 | $ | 2,600,000 | $ | 5,000,000 | ||||||||||||||||||||||
Canadian Dollar senior unsecured notes(2) | 235,239 | — | — | — | 235,239 | |||||||||||||||||||||||||||
Pounds Sterling senior unsecured notes(2) | 1,434,510 | — | — | — | 1,434,510 | |||||||||||||||||||||||||||
| U.S. Dollar term credit facility | 1,370,000 | — | 1,370,000 | — | — | |||||||||||||||||||||||||||
Canadian Dollar term credit facility(2) | 196,032 | — | 196,032 | — | — | |||||||||||||||||||||||||||
Secured debt:(1,2) | ||||||||||||||||||||||||||||||||
| Consolidated | 2,378,073 | 451,038 | 833,433 | 397,785 | 695,817 | |||||||||||||||||||||||||||
Unconsolidated | 1,064,949 | 54,073 | 206,924 | 557,508 | 246,444 | |||||||||||||||||||||||||||
Contractual interest obligations:(3) | ||||||||||||||||||||||||||||||||
Senior unsecured notes and term loans(2) | 3,872,398 | 423,475 | 816,492 | 651,101 | 1,981,330 | |||||||||||||||||||||||||||
Consolidated secured debt(2) | 309,885 | 72,990 | 101,412 | 58,755 | 76,728 | |||||||||||||||||||||||||||
Unconsolidated secured debt(2) | 200,426 | 35,099 | 65,011 | 42,031 | 58,285 | |||||||||||||||||||||||||||
Financing lease liabilities(4) | 197,427 | 8,777 | 78,026 | 2,950 | 107,674 | |||||||||||||||||||||||||||
Operating lease obligations(4) | 1,002,538 | 20,316 | 38,133 | 33,955 | 910,134 | |||||||||||||||||||||||||||
Purchase obligations(5) | 784,797 | 399,771 | 309,660 | 65,920 | 9,446 | |||||||||||||||||||||||||||
| Total contractual obligations | $ | 21,320,026 | $ | 1,465,539 | $ | 4,688,875 | $ | 4,410,005 | $ | 10,755,607 | ||||||||||||||||||||||
(1) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the Consolidated Balance Sheets.
(2) Based on foreign currency exchange rates in effect as of balance sheet date.
(3) Based on variable interest rates in effect as of December 31, 2020.
(4) See Note 6 to our consolidated financial statements for additional information.
(5) See Note 13 to our consolidated financial statements for additional information.
Capital Structure
Please refer to “Credit Strength” above for a discussion of our leverage and coverage ratio trends. Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2020, we were in compliance with all of the covenants under our debt agreements. None of our debt agreements contain provisions for acceleration which could be triggered by our debt ratings. However, under our primary unsecured credit facility, the ratings on our senior unsecured notes are used to determine the fees and interest charged. We plan to manage the company to maintain compliance with our debt covenants and with a capital structure consistent with our current profile. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.
On May 17, 2018, we filed with the Securities and Exchange Commission (1) an open-ended automatic or “universal” shelf registration statement covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units and (2) a registration statement in connection with our enhanced dividend reinvestment plan (“DRIP”) under which we may issue up to 15,000,000 shares of common stock. As of January 29, 2021, 2,541,750 shares of common stock remained available for issuance under the DRIP registration statement. On February 25, 2019, we entered into separate amended and restated equity distribution agreements with each of Barclays Capital Inc., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC relating to the offer and sale from time to time of up to $1,500,000,000 aggregate amount of our common stock (“Equity Shelf Program”). The Equity Shelf Program also allows us to enter into forward sale agreements. As of January 29, 2021, we had $499,341,000 of remaining capacity under the Equity Shelf Program and there were no outstanding forward sales agreements. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our unsecured revolving credit facility and commercial paper program.
On May 1, 2020, our Board of Directors authorized a share repurchase program whereby we may repurchase up to $1 billion of common stock through December 31, 2021 (the "Repurchase Program"). Under this authorization, we are not required to purchase shares but may choose to do so in the open market or through private transactions at times and amounts based on our
51
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
evaluation of market conditions and other factors. We expect to finance any share repurchases under the Repurchase Program using available cash and may use proceeds from borrowings or debt offerings.
Results of Operations
Summary
Our primary sources of revenue include resident fees and services, rent and interest income. Our primary expenses include property operating expenses, depreciation and amortization, interest expense, general and administrative expenses, and other expenses. We evaluate our business and make resource allocations on our three business segments: Seniors Housing Operating, Triple-net and Outpatient Medical. The primary performance measures for our properties are NOI and same store NOI ("SSNOI") and other supplemental measures include FFO and Adjusted EBITDA, which are further discussed below. Please see "Non-GAAP Financial Measures" for additional information and reconciliations related to these supplemental measures.
This section of this Form 10-K generally discusses 2020 and 2019 items and year-to-year comparisons between 2020 and 2019. Discussions of 2018 items and year-to-year comparisons between 2019 and 2018 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
The following is a summary of our results of operations for the periods presented (dollars in thousands, except per share amounts):
| Year Ended | One Year Change | Year Ended | One Year Change | Two Year Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | Amount | % | 2018 | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 1,038,852 | $ | 1,330,410 | $ | (291,558) | -22 | % | $ | 829,750 | $ | 500,660 | 60 | % | $ | 209,102 | 25 | % | ||||||||||||||||||||||||||||||||||||||
| NICS | 978,844 | 1,232,432 | (253,588) | -21 | % | 758,250 | 474,182 | 63 | % | 220,594 | 29 | % | ||||||||||||||||||||||||||||||||||||||||||||
| FFO | 1,102,562 | 1,577,080 | (474,518) | -30 | % | 1,392,183 | 184,897 | 13 | % | (289,621) | -21 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | 2,048,412 | 2,328,202 | (279,790) | -12 | % | 2,153,005 | 175,197 | 8 | % | (104,593) | -5 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Consolidated NOI | 2,008,144 | 2,431,264 | (423,120) | -17 | % | 2,267,482 | 163,782 | 7 | % | (259,338) | -11 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Per share data (fully diluted): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to common stockholders (1) | $ | 2.33 | $ | 3.05 | $ | (0.72) | -24 | % | $ | 2.02 | $ | 1.03 | 51 | % | $ | 0.31 | 15 | % | ||||||||||||||||||||||||||||||||||||||
Funds from operations attributable to common stockholders | $ | 2.64 | $ | 3.91 | $ | (1.27) | -32 | % | $ | 3.71 | $ | 0.20 | 5 | % | $ | (1.07) | -29 | % | ||||||||||||||||||||||||||||||||||||||
| Adjusted interest coverage ratio | 3.97x | 4.14x | -0.17x | -4 | % | 4.11x | 0.03x | 1 | % | -0.14x | -3 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted fixed charge coverage ratio | 3.54x | 3.78x | -0.24x | -6 | % | 3.44x | 0.34x | 10 | % | 0.10x | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||
(1) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table represents the changes in outstanding common stock for the period from January 1, 2018 to December 31, 2020 (in thousands):
| Year Ended | ||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | Totals | |||||||||||||||||||||||
| Beginning balance | 410,257 | 383,675 | 371,732 | 371,732 | ||||||||||||||||||||||
| Dividend reinvestment plan issuances | 264 | 5,799 | 6,529 | 12,592 | ||||||||||||||||||||||
| Preferred stock conversions | — | 12,712 | — | 12,712 | ||||||||||||||||||||||
| Option exercises | — | 11 | 57 | 68 | ||||||||||||||||||||||
| Equity Shelf Program issuances | 6,800 | 7,856 | 5,241 | 19,897 | ||||||||||||||||||||||
| Repurchase of common stock | (202) | — | — | (202) | ||||||||||||||||||||||
| Other, net | 282 | 204 | 116 | 602 | ||||||||||||||||||||||
| Ending balance | 417,401 | 410,257 | 383,675 | 417,401 | ||||||||||||||||||||||
| Average number of shares outstanding: | ||||||||||||||||||||||||||
| Basic | 415,451 | 401,845 | 373,620 | |||||||||||||||||||||||
| Diluted | 417,387 | 403,808 | 375,250 | |||||||||||||||||||||||
During the past three years, inflation has not significantly affected our earnings because of the moderate inflation rate. Additionally, a portion of our earnings are derived primarily from long-term investments with predictable rates of return. These investments are mainly financed with a combination of equity, senior unsecured notes, secured debt and borrowings under our primary unsecured credit facility. During inflationary periods, which generally are accompanied by rising interest rates, our ability to grow may be adversely affected because the yield on new investments may increase at a slower rate than new borrowing costs. Presuming the current inflation rate remains moderate and long-term interest rates do not increase significantly, we believe that inflation will not impact the availability of equity and debt financing for us.
52
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Seniors Housing Operating
The following is a summary of our SSNOI at Welltower's Share for the Seniors Housing Operating segment (dollars in thousands):
| QTD Pool | YTD Pool | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Change | Year Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | $ | % | December 31, 2020 | December 31, 2019 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
SSNOI(1) | $ | 154,373 | $ | 216,166 | $ | (61,793) | -28.6 | % | $ | 591,133 | $ | 764,328 | $ | (173,195) | -22.7 | % | ||||||||||||||||||||||||||||||||||
(1) Relates to 514 properties for the QTD Pool and 399 properties for the YTD Pool. Please see "Non-GAAP Financial Measures for additional information and reconciliations.
The following is a summary of our results of operations for the Seniors Housing Operating segment for the years presented (dollars in thousands):
| Year Ended | One Year Change | Year Ended | One Year Change | Two Year Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | $ | % | 2018 | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Resident fees and services | $ | 3,074,022 | $ | 3,448,175 | $ | (374,153) | -11 | % | $ | 3,234,852 | $ | 213,323 | 7 | % | $ | (160,830) | -5 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Interest income | 618 | 36 | 582 | n/a | 578 | (542) | -94 | % | 40 | 7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other income | 7,223 | 8,658 | (1,435) | -17 | % | 5,024 | 3,634 | 72 | % | 2,199 | 44 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 3,081,863 | 3,456,869 | (375,006) | -11 | % | 3,240,454 | 216,415 | 7 | % | (158,591) | -5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 2,326,311 | 2,417,349 | (91,038) | -4 | % | 2,255,432 | 161,917 | 7 | % | 70,879 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
NOI(1) | 755,552 | 1,039,520 | (283,968) | -27 | % | 985,022 | 54,498 | 6 | % | (229,470) | -23 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 544,462 | 553,189 | (8,727) | -2 | % | 529,449 | 23,740 | 4 | % | 15,013 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 54,901 | 67,983 | (13,082) | -19 | % | 69,060 | (1,077) | -2 | % | (14,159) | -21 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 12,659 | 1,614 | 11,045 | 684 | % | 110 | 1,504 | n/a | 12,549 | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for loan losses | 671 | — | 671 | n/a | — | — | n/a | 671 | n/a | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of assets | 100,741 | 2,145 | 98,596 | n/a | 7,599 | (5,454) | -72 | % | 93,142 | 1,226 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses | 14,265 | 26,348 | (12,083) | -46 | % | 6,624 | 19,724 | 298 | % | 7,641 | 115 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 727,699 | 651,279 | 76,420 | 12 | % | 612,842 | 38,437 | 6 | % | 114,857 | 19 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | 27,853 | 388,241 | (360,388) | -93 | % | 372,180 | 16,061 | 4 | % | (344,327) | -93 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | (33,857) | 12,388 | (46,245) | -373 | % | (28,142) | 40,530 | 144 | % | (5,715) | -20 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | 328,249 | 528,747 | (200,498) | -38 | % | (2,245) | 530,992 | n/a | 330,494 | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income from continuing operations | 322,245 | 929,376 | (607,131) | -65 | % | 341,793 | 587,583 | 172 | % | (19,548) | -6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 322,245 | 929,376 | (607,131) | -65 | % | 341,793 | 587,583 | 172 | % | (19,548) | -6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | 20,301 | 56,513 | (36,212) | -64 | % | (660) | 57,173 | n/a | 20,961 | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 301,944 | $ | 872,863 | $ | (570,919) | -65 | % | $ | 342,453 | $ | 530,410 | 155 | % | $ | (40,509) | -12 | % | ||||||||||||||||||||||||||||||||||||||||||||
(1) See Non-GAAP Financial Measures below.
Decreases in resident fees and services and property operating expenses are primarily a result of property dispositions and decreases in occupancy across the portfolio due to the COVID-19 pandemic. Occupancy within our Seniors Housing Operating portfolio has declined as follows:
| Feb. | Mar. | Apr. | May | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Spot occupancy (1) | 85.6 | % | 84.9 | % | 82.6 | % | 80.9 | % | 79.9 | % | 79.3 | % | 78.7 | % | 78.4 | % | 78.0 | % | 77.3 | % | 76.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Sequential occupancy change | (0.7) | % | (2.3) | % | (1.7) | % | (1.0) | % | (0.6) | % | (0.6) | % | (0.3) | % | (0.4) | % | (0.7) | % | (1.1) | % | ||||||||||||||||||||||||||||||||||||||||||||||||
(1) Spot occupancy represents approximate month end occupancy for properties in operation as of February 29, 2020, including unconsolidated properties but excluding acquisitions, dispositions and development conversions since this date.
In addition, we have experienced increased operational costs, net of reimbursements, of $78,792,000 during the year ended December 31, 2020, included in property operating expenses relating to our consolidated properties. These expenses were incurred as a result of the introduction of public health measures and other regulations affecting our properties, as well as additional health and safety measures adopted by us and our operators related to the COVID-19 pandemic, including increases in labor and property cleaning expenses and expenditures related to our efforts to procure PPE and supplies, net of reimbursements. We expect total portfolio expenses to be elevated during the pandemic and potentially beyond as these additional health and safety measures become standard practice.
53
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
In 2020 applications were made for amounts under Phase 2 and Phase 3 of the Provider Relief Fund following the announcement from the Department of Health and Human Services that it expanded the eligibility of the CARES Act Provider Relief Fund to include assisted living facilities. During the fourth quarter, we received Provider Relief Funds of approximately $9 million which was recognized as a reduction to property operating expenses. To date in 2021, we have received approximately $34 million of Provider Relief Funds.
During the year ended December 31, 2020, we recorded impairment charges of $100,741,000 related to 15 held for sale or sold properties and six held for use properties. During the year ended December 31, 2019, we recorded impairment charges of $2,145,000 related to four held for use properties. Transaction costs related to asset acquisitions are capitalized as a component of the purchase price. Changes in the gain on sale of properties are due to the volume of property sales and sales prices. During the year ended December 31, 2020, we recognized a gain on real estate disposition of $313 million related to an 11 property U.S. portfolio. During the year ended December 31, 2019, we recognized a gain on real estate disposition of $520 million related to the Benchmark Senior Living portfolio. The fluctuation in other expenses is primarily due to the timing of noncapitalizable transaction costs associated with acquisitions and operator transitions.
Depreciation and amortization fluctuates as a result of acquisitions, disposition and transitions. To the extent we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.
During the year ended December 31, 2020, we completed three Seniors Housing Operating construction projects representing $93,188,000 or $300,606 per unit. The following is a summary of our consolidated Seniors Housing Operating construction projects, excluding expansions, pending as of December 31, 2020 (dollars in thousands):
| Location | Units/Beds | Commitment | Balance | Est. Completion | ||||||||||||||||||||||
| Potomac, MD | 120 | $ | 56,720 | $ | 48,783 | 2Q21 | ||||||||||||||||||||
| Beckenham, UK | 100 | 64,348 | 45,722 | 3Q21 | ||||||||||||||||||||||
| Barnet, UK | 100 | 70,769 | 41,215 | 4Q21 | ||||||||||||||||||||||
| Hendon, UK | 102 | 75,824 | 50,817 | 1Q22 | ||||||||||||||||||||||
| Princeton, NJ | 80 | 29,780 | 19,209 | 3Q22 | ||||||||||||||||||||||
| Berea, OH | 120 | 14,934 | 1,538 | 4Q22 | ||||||||||||||||||||||
| Painesville, OH | 119 | 14,462 | 1,508 | 4Q22 | ||||||||||||||||||||||
| Beaver, PA | 116 | 14,184 | 1,152 | 4Q22 | ||||||||||||||||||||||
| 857 | $ | 341,021 | 209,944 | |||||||||||||||||||||||
| Toronto, ON | Project in planning stage | 46,856 | ||||||||||||||||||||||||
| Brookline, MA | Project in planning stage | 23,679 | ||||||||||||||||||||||||
| Washington, DC | Project in planning stage | 22,951 | ||||||||||||||||||||||||
| Columbus, OH | Project in planning stage | 11,492 | ||||||||||||||||||||||||
| Raleigh, NC | Project in planning stage | 3,107 | ||||||||||||||||||||||||
| $ | 318,029 | |||||||||||||||||||||||||
Interest expense represents secured debt interest expense which fluctuates based on the net effect and timing of assumptions, segment transitions, fluctuations in foreign currency rates, extinguishments and principal amortizations. The fluctuations in loss (gain) on extinguishment of debt is primarily attributable to the volume of extinguishments and terms of the related secured debt. The following is a summary of our Seniors Housing Operating segment property secured debt principal activity (dollars in thousands):
| Year Ended | Year Ended | Year Ended | ||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Weighted Avg. | Weighted Avg. | Weighted Avg. | ||||||||||||||||||||||||||||||||||||
| Amount | Interest Rate | Amount | Interest Rate | Amount | Interest Rate | |||||||||||||||||||||||||||||||||
| Beginning balance | $ | 2,115,037 | 3.54% | $ | 1,810,587 | 3.87% | $ | 1,988,700 | 3.66% | |||||||||||||||||||||||||||||
| Debt transferred in | — | —% | — | —% | 35,830 | 3.84% | ||||||||||||||||||||||||||||||||
| Debt issued | 62,055 | 2.55% | 343,696 | 3.11% | 45,447 | 3.40% | ||||||||||||||||||||||||||||||||
| Debt assumed | — | —% | 183,061 | 4.58% | 121,612 | 5.55% | ||||||||||||||||||||||||||||||||
| Debt extinguished | (441,208) | 2.18% | (219,864) | 4.28% | (240,095) | 4.83% | ||||||||||||||||||||||||||||||||
| Debt transferred out | — | —% | (12,072) | 3.89% | — | —% | ||||||||||||||||||||||||||||||||
| Principal payments | (48,498) | 3.30% | (43,997) | 3.45% | (47,886) | 3.59% | ||||||||||||||||||||||||||||||||
| Foreign currency | 18,803 | 2.93% | 53,626 | 3.33% | (93,021) | 3.31% | ||||||||||||||||||||||||||||||||
| Ending balance | $ | 1,706,189 | 3.05% | $ | 2,115,037 | 3.54% | $ | 1,810,587 | 3.87% | |||||||||||||||||||||||||||||
| Monthly averages | $ | 1,875,910 | 3.19% | $ | 1,966,892 | 3.70% | $ | 1,915,663 | 3.74% | |||||||||||||||||||||||||||||
54
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The majority of our Seniors Housing Operating properties are formed through partnership interests. Losses from unconsolidated entities during the year ended December 31, 2020 are largely attributable to depreciation and amortization of short-lived intangible assets related to certain investments in unconsolidated joint ventures. The gains from unconsolidated entities during the year ended December 31, 2019 are largely due to a gain on the disposition of an unconsolidated entity. Net income attributable to noncontrolling interests represents our partners’ share of net income (loss) related to joint ventures. The increase during the years ended December 31, 2020 and 2019 relates primarily to our partner's share of the gains recognized on the sale of the 11 property U.S. portfolio and the Benchmark Senior Living portfolio, respectively.
Triple-net
The following is a summary of our SSNOI at Welltower's Share for the Triple-net segment (dollars in thousands):
| QTD Pool | YTD Pool | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Change | Year Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | $ | % | December 31, 2020 | December 31, 2019 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
SSNOI(1) | $ | 168,697 | $ | 170,052 | $ | (1,355) | -0.8 | % | $ | 628,972 | $ | 624,877 | $ | 4,095 | 0.7 | % | ||||||||||||||||||||||||||||||||||
(1) Relates to 632 properties for the QTD Pool and 608 properties for the YTD Pool. Please see Non-GAAP Financial Measures for additional information and reconciliations.
The following is a summary of our results of operations for the Triple-net segment for the years presented (dollars in thousands):
| Year Ended | One Year Change | Year Ended | One Year Change | Two Year Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | $ | % | 2018 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 733,776 | $ | 903,798 | $ | (170,022) | -19 | % | $ | 828,865 | $ | 74,933 | 9 | % | $ | (95,089) | -11 | % | |||||||||||||||||||||||||||||||||||||||||
| Interest income | 62,625 | 62,599 | 26 | — | % | 54,926 | 7,673 | 14 | % | 7,699 | 14 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other income | 4,903 | 6,246 | (1,343) | -22 | % | 17,173 | (10,927) | -64 | % | (12,270) | -71 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 801,304 | 972,643 | (171,339) | -18 | % | 900,964 | 71,679 | 8 | % | (99,660) | -11 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 53,183 | 53,900 | (717) | -1 | % | 915 | 52,985 | 5,791 | 52,268 | 5,712 | |||||||||||||||||||||||||||||||||||||||||||||||||
NOI(1) | 748,121 | 918,743 | (170,622) | -19 | % | 900,049 | 18,694 | 2 | % | (151,928) | -17 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 232,604 | 232,626 | (22) | — | % | 235,480 | (2,854) | -1 | % | (2,876) | -1 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 9,477 | 12,892 | (3,415) | -26 | % | 14,225 | (1,333) | -9 | % | (4,748) | -33 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | 11,049 | (4,399) | 15,448 | 351 | % | (4,016) | (383) | -10 | % | 15,065 | 375 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | — | — | — | n/a | (32) | 32 | 100 | % | 32 | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for loan losses | 90,563 | 18,690 | 71,873 | 385 | — | 18,690 | n/a | 90,563 | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of assets | 34,867 | 11,926 | 22,941 | 192 | % | 107,980 | (96,054) | -89 | % | (73,113) | -68 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses | 22,923 | 13,771 | 9,152 | 66 | % | 90,975 | (77,204) | -85 | % | (68,052) | -75 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| 401,483 | 285,506 | 115,977 | 41 | % | 444,612 | (159,106) | -36 | % | (43,129) | -10 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Income from continuing operations before income taxes and other items | 346,638 | 633,237 | (286,599) | -45 | % | 455,437 | 177,800 | 39 | % | (108,799) | -24 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | 18,462 | 22,985 | (4,523) | -20 | % | 21,938 | 1,047 | 5 | % | (3,476) | -16 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | 64,288 | 218,322 | (154,034) | -71 | % | 196,589 | 21,733 | 11 | % | (132,301) | -67 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Income from continuing operations | 429,388 | 874,544 | (445,156) | -51 | % | 673,964 | 200,580 | 30 | % | (244,576) | -36 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 429,388 | 874,544 | (445,156) | -51 | % | 673,964 | 200,580 | 30 | % | (244,576) | -36 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | 39,985 | 36,271 | 3,714 | 10 | % | 19,306 | 16,965 | 88 | % | 20,679 | 107 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 389,403 | $ | 838,273 | $ | (448,870) | -54 | % | $ | 654,658 | $ | 183,615 | 28 | % | $ | (265,255) | -41 | % | |||||||||||||||||||||||||||||||||||||||||
(1) See Non-GAAP Financial Measures below.
The decrease in rental income is primarily attributable to the write-off of straight-line rent receivable balances of $146,508,000 during the year ended December 31, 2020, relating to leases for which collection of substantially all contractual lease payments was no longer deemed probable. Included in such amounts was $91,025,000 relating to Genesis Healthcare whom noted substantial doubt as to their ability to continue as a going concern in August. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index and/or changes in the gross operating revenues of the tenant’s properties. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period. If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our revenues may not continue to increase. For the three months ended
55
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
December 31, 2020, we had 18 leases with rental rate increasers ranging from 0.07% to 0.34% in our Triple-net portfolio. Our Triple-net operators are experiencing similar impacts on occupancy and operating costs due to the COVID-19 pandemic as described above with respect to our Seniors Housing Operating properties. However, long-term/post-acute facilities are generally experiencing a higher degree of occupancy declines which may impact the ability of our Triple-net operators to make contractual rent payments to us in the future. Many of our Triple-net operators received funds under the CARES Act Paycheck Protection Program. In addition, operators of long-term/post-acute facilities have generally received funds from Phase 1 of the Provider Relief Fund and operators of assisted living facilities have or are expected to receive funds from Phase 2 of the Provider Relief Fund. Accordingly, collection of rent due during the COVID-19 pandemic to date (March through December) has generally been consistent with historical collection rates and no significant rent concessions or deferrals have been made.
Depreciation and amortization fluctuates as a result of acquisitions, disposition and transitions of triple-net properties. To the extent we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.
During the year ended December 31, 2020, we recognized a provision for loan losses of $90,563,000, of which $80,873,000 represents additional reserves as a result of the current collateral estimate related to the Genesis Healthcare outstanding loans. During the year ended December 31, 2019, we recognized a provision for loan losses of $18,690,000 to fully reserve for certain real estate loans receivable that were no longer deemed collectible. During the year ended December 31, 2020, we recorded impairment charges of $34,867,000 related to one held for sale and four held for use properties. During the year ended December 31, 2019, we recorded impairment charges of $11,374,000 related to two properties. Changes in the gain on sales of properties are related to the volume and timing of property sales and the sales prices. The fluctuation in other expense is primarily due to noncapitalizable transaction costs from acquisitions and segment transitions.
During the year ended December 31, 2020, we completed three Triple-net construction projects representing $75,149,000 or $224,997 per unit. The following is a summary of our consolidated Triple-net construction projects, excluding expansions, pending as of December 31, 2020 (dollars in thousands):
| Location | Units/Beds | Commitment | Balance | Est. Completion | ||||||||||||||||||||||
| Thousand Oaks, CA | 82 | $ | 25,391 | $ | 21,408 | 1Q21 | ||||||||||||||||||||
| Redhill, UK | 76 | 21,723 | 11,869 | 2Q21 | ||||||||||||||||||||||
| Leicester, UK | 60 | 15,301 | 5,566 | 1Q22 | ||||||||||||||||||||||
| Wombourne, UK | 66 | 16,394 | 5,537 | 2Q22 | ||||||||||||||||||||||
| Raleigh, NC | 191 | 154,256 | 14,339 | 2Q23 | ||||||||||||||||||||||
| Total | 475 | $ | 233,065 | $ | 58,719 | |||||||||||||||||||||
Loss (gain) on derivatives and financial instruments, net is primarily attributable to the mark-to-market adjustments recorded on our Genesis Healthcare available-for-sale investment. Interest expense represents secured debt interest expense and related fees. The change in secured debt interest expense is due to the net effect and timing of assumptions, segment transitions, fluctuations in foreign currency rates, extinguishments and principal amortizations. The following is a summary of our Triple-net secured debt principal activity for the periods presented (dollars in thousands):
| Year Ended | Year Ended | Year Ended | ||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Weighted Avg. | Weighted Avg. | Weighted Avg. | ||||||||||||||||||||||||||||||||||||
| Amount | Interest Rate | Amount | Interest Rate | Amount | Interest Rate | |||||||||||||||||||||||||||||||||
| Beginning balance | $ | 306,038 | 3.60% | $ | 288,386 | 3.63% | $ | 347,474 | 3.55% | |||||||||||||||||||||||||||||
| Debt transferred in | — | —% | 12,072 | 3.89% | — | —% | ||||||||||||||||||||||||||||||||
| Debt extinguished | (176,875) | 2.03% | — | —% | (4,107) | 4.94% | ||||||||||||||||||||||||||||||||
| Debt transferred out | — | —% | — | —% | (35,830) | 3.84% | ||||||||||||||||||||||||||||||||
| Principal payments | (4,376) | 5.16% | (4,017) | 5.21% | (3,982) | 5.38% | ||||||||||||||||||||||||||||||||
| Foreign currency | (1,135) | 2.97% | 9,597 | 2.99% | (15,169) | 3.44% | ||||||||||||||||||||||||||||||||
| Ending balance | $ | 123,652 | 4.91% | $ | 306,038 | 3.60% | $ | 288,386 | 3.63% | |||||||||||||||||||||||||||||
| Monthly averages | $ | 215,796 | 3.85% | $ | 294,080 | 3.63% | $ | 321,730 | 3.51% | |||||||||||||||||||||||||||||
A portion of our Triple-net properties were formed through partnerships. Income or loss from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. The decrease in income from unconsolidated entities during the year ended December 31, 2020 is primarily related to the write-off of Genesis Healthcare straight-line rent receivable balances at unconsolidated entities. Net income attributable to noncontrolling interests represents our partners’ share of net income relating to those partnerships where we are the controlling partner.
56
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Outpatient Medical
The following is a summary of our SSNOI at Welltower Share for the Outpatient Medical segment (dollars in thousands):
| QTD Pool | YTD Pool | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Change | Year Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | $ | % | December 31, 2020 | December 31, 2019 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
SSNOI(1) | $ | 84,985 | $ | 84,144 | $ | 841 | 1.0 | % | $ | 252,512 | $ | 246,789 | $ | 5,723 | 2.3 | % | ||||||||||||||||||||||||||||||||||
(1) Relates to 303 properties for the QTD Pool and 231 properties for the YTD Pool. Please see Non-GAAP Financial Measures for additional information and reconciliations.
The following is a summary of our results of operations for the Outpatient Medical segment for the periods presented (dollars in thousands):
| Year Ended | One Year Change | Year Ended | One Year Change | Two Year Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | $ | % | 2018 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 709,584 | $ | 684,602 | $ | 24,982 | 4 | % | $ | 551,557 | $ | 133,045 | 24 | % | $ | 158,027 | 29 | % | |||||||||||||||||||||||||||||||||||||||||
| Interest income | 5,913 | 1,195 | 4,718 | 395 | % | 310 | 885 | 285 | % | 5,603 | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other income | 4,522 | 2,031 | 2,491 | 123 | % | 4,939 | (2,908) | -59 | % | (417) | -8 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 720,019 | 687,828 | 32,191 | 5 | % | 556,806 | 131,022 | 24 | % | 163,213 | 29 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 214,948 | 218,793 | (3,845) | -2 | % | 176,670 | 42,123 | 24 | % | 38,278 | 22 | % | |||||||||||||||||||||||||||||||||||||||||||||||
NOI(1) | 505,071 | 469,035 | 36,036 | 8 | % | 380,136 | 88,899 | 23 | % | 124,935 | 33 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 261,371 | 241,258 | 20,113 | 8 | % | 185,530 | 55,728 | 30 | % | 75,841 | 41 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 17,579 | 13,411 | 4,168 | 31 | % | 7,051 | 6,360 | 90 | % | 10,528 | 149 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 1,046 | — | 1,046 | n/a | 11,928 | (11,928) | -100 | % | (10,882) | -91 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Provision for loan losses. | 3,202 | — | 3,202 | n/a | — | — | n/a | 3,202 | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of assets | — | 14,062 | (14,062) | -100 | % | — | 14,062 | n/a | — | n/a | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses | 8,218 | 1,788 | 6,430 | 360 | % | 7,570 | (5,782) | -76 | % | 648 | 9 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| 291,416 | 270,519 | 20,897 | 8 | % | 212,079 | 58,440 | 28 | % | 79,337 | 37 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Income from continuing operations before income taxes and other item | 213,655 | 198,516 | 15,139 | 8 | % | 168,057 | 30,459 | 18 | % | 45,598 | 27 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | 7,312 | 7,061 | 251 | 4 | % | 5,563 | 1,498 | 27 | % | 1,749 | 31 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | 695,918 | 972 | 694,946 | n/a | 221,231 | (220,259) | -100 | % | 474,687 | 215 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Income from continuing operations | 916,885 | 206,549 | 710,336 | 344 | % | 394,851 | (188,302) | -48 | % | 522,034 | 132 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 916,885 | 206,549 | 710,336 | 344 | % | 394,851 | (188,302) | -48 | % | 522,034 | 132 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | (278) | 5,194 | (5,472) | -105 | % | 6,150 | (956) | -16 | % | (6,428) | -105 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 917,163 | $ | 201,355 | $ | 715,808 | 355 | % | $ | 388,701 | $ | (187,346) | -48 | % | $ | 528,462 | 136 | % | |||||||||||||||||||||||||||||||||||||||||
(1) See Non-GAAP Financial Measures below.
Increases in rental income are primarily attributable to the acquisitions of new properties and the conversion of newly constructed outpatient medical properties, particularly the $1.25 billion CNL Healthcare Properties portfolio acquisition that closed in May 2019, partially offset by 2020 dispositions. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period. If the Consumer Price Index does not increase, a portion of our revenues may not continue to increase. Our leases could renew above or below current rental rates, resulting in an increase or decrease in rental income. For the three months ended December 31, 2020, our consolidated outpatient medical portfolio signed 133,859 square feet of new leases and 282,719 square feet of renewals. The weighted-average term of these leases was six years, with a rate of $26.55 per square foot and tenant improvement and lease commission costs of $15.23 per square foot. Substantially all of these leases contain an annual fixed or contingent escalation rent structure ranging from 2.0% to 3.5%.
In addition, our Outpatient Medical tenants are experiencing temporary medical practice closures or decreases in revenue due to government imposed restrictions on elective medical procedures or decisions by patients to delay treatments which may adversely affect their ability to make contractual rent payments. Outpatient Medical rent collections through March were generally consistent with pre COVID-19 levels. During the second quarter we executed short term rent deferrals with certain Outpatient Medical tenants which in most cases were required to be repaid by year end. Since then we have collected approximately 99% of Outpatient Medical rent due in the second half of the year, with uncollected amounts primarily attributable to local jurisdictions with COVID-19 related ordinances providing temporary rent relief to tenants. Furthermore,
57
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
collections of deferred rent due under executed deferrals was over 99%. To the extent that deferred rent is not repaid as expected, or the prolonged impact of the COVID-19 pandemic causes operators or tenants to seek further modifications of their lease agreements, we may recognize reductions in revenue and increases in uncollectible receivables.
The fluctuation in property operating expenses and depreciation and amortization are primarily attributable to acquisitions and construction conversions of outpatient medical facilities, offset by dispositions. To the extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly. During the year ended December 31, 2019, we recognized impairment charges of $14,062,000 related to three held for sale properties as the carrying values exceeded the estimated fair values less costs to sell. Changes in gains/losses on sales of properties are related to volume of property sales and the sales prices. The increase in other expense during the year ended December 31, 2020 is primarily due to noncapitalizable transaction costs from acquisitions no longer expected to be consummated.
During the year ended December 31, 2020, we completed three Outpatient Medical construction projects representing $43,493,000 or $306 per square foot. The following is a summary of our consolidated Outpatient Medical construction projects pending as of December 31, 2020 (dollars in thousands):
| Location | Square Feet | Commitment | Balance | Est. Completion | ||||||||||||||||||||||
| Brooklyn, NY | 140,955 | $ | 105,306 | $ | 104,148 | 2Q21 | ||||||||||||||||||||
| Kalamazoo, MI | 40,607 | 14,267 | 2,654 | 3Q21 | ||||||||||||||||||||||
| Total | 181,562 | $ | 119,573 | $ | 106,802 | |||||||||||||||||||||
Total interest expense represents secured debt interest expense. The change in secured debt interest expense is primarily due to the net effect and timing of assumptions, extinguishments and principal amortizations. The following is a summary of our Outpatient Medical secured debt principal activity for the periods presented (dollars in thousands):
| Year Ended | Year Ended | Year Ended | ||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Weighted Avg. | Weighted Avg. | Weighted Avg. | ||||||||||||||||||||||||||||||||||||
| Amount | Interest Rate | Amount | Interest Rate | Amount | Interest Rate | |||||||||||||||||||||||||||||||||
| Beginning balance | $ | 572,267 | 3.97% | $ | 386,738 | 4.20% | $ | 279,951 | 4.72% | |||||||||||||||||||||||||||||
| Debt assumed | — | —% | 202,084 | 4.12% | 171,275 | 3.99% | ||||||||||||||||||||||||||||||||
| Debt extinguished | (14,205) | 5.34% | (10,244) | 5.75% | (61,291) | 7.43% | ||||||||||||||||||||||||||||||||
| Principal payments | (9,833) | 4.60% | (6,311) | 4.97% | (3,197) | 5.91% | ||||||||||||||||||||||||||||||||
| Ending balance | $ | 548,229 | 3.55% | $ | 572,267 | 3.97% | $ | 386,738 | 4.20% | |||||||||||||||||||||||||||||
| Monthly averages | $ | 562,017 | 3.72% | $ | 397,756 | 4.15% | $ | 238,214 | 4.25% | |||||||||||||||||||||||||||||
A portion of our Outpatient Medical properties were formed through partnerships. Income or loss from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. Net income attributable to noncontrolling interests represents our partners’ share of net income or loss relating to those partnerships where we are the controlling partner.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Non-Segment/Corporate
The following is a summary of our results of operations for the Non-Segment/Corporate activities (dollars in thousands) for the periods presented:
| Year Ended | One Year Change | Year Ended | One Year Change | Two Year Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | $ | % | 2018 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other income | $ | 2,781 | $ | 3,966 | $ | (1,185) | -30 | % | $ | 2,275 | $ | 1,691 | 74 | % | $ | 506 | 22 | % | |||||||||||||||||||||||||||||||||||||||||
| Total revenues | 2,781 | 3,966 | (1,185) | -30 | % | 2,275 | 1,691 | 74 | % | 506 | 22 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 3,381 | — | 3,381 | n/a | — | — | n/a | 3,381 | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||
NOI(1) | (600) | 3,966 | (4,566) | -115 | % | 2,275 | 1,691 | 74 | % | (2,875) | -126 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 432,431 | 461,273 | (28,842) | -6 | % | 436,256 | 25,017 | 6 | % | (3,825) | -1 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 128,394 | 126,549 | 1,845 | 1 | % | 126,383 | 166 | 0 | % | 2,011 | 2 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishments of debt, net | 33,344 | 82,541 | (49,197) | -60 | % | 4,091 | 78,450 | 1,918 | % | 29,253 | 715 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses | 24,929 | 10,705 | 14,224 | 133 | % | 7,729 | 2,976 | 39 | % | 17,200 | 223 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total expenses | 619,098 | 681,068 | (61,970) | -9 | % | 574,459 | 106,609 | 19 | % | 44,639 | 8 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss from continuing operations before income taxes and other items | (619,698) | (677,102) | 57,404 | 8 | % | (572,184) | (104,918) | -18 | % | (47,514) | -8 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | — | — | — | n/a | — | — | n/a | — | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax benefit (expense) | (9,968) | (2,957) | (7,011) | -237 | % | (8,674) | 5,717 | 66 | % | (1,294) | -15 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss from continuing operations | (629,666) | (680,059) | 50,393 | 7 | % | (580,858) | (99,201) | -17 | % | (48,808) | -8 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | — | — | — | n/a | 46,704 | (46,704) | -100 | % | (46,704) | -100 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss attributable to common stockholders | $ | (629,666) | $ | (680,059) | $ | 50,393 | 7 | % | $ | (627,562) | $ | (52,497) | -8 | % | $ | (2,104) | 0 | % | |||||||||||||||||||||||||||||||||||||||||
(1) See Non-GAAP Financial Measures below.
Property operating expenses represent insurance costs related to our captive insurance company formed as of July 1, 2020, which acts as a direct insurer of property level insurance coverage for our portfolio.
The following is a summary of our Non-Segment/Corporate interest expense for the periods presented (dollars in thousands):
| Year Ended | One Year Change | Year Ended | One Year Change | Two Year Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | $ | % | 2018 | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Senior unsecured notes | $ | 400,014 | $ | 402,133 | $ | (2,119) | -1 | % | $ | 387,955 | $ | 14,178 | 4 | % | $ | 12,059 | 3 | % | ||||||||||||||||||||||||||||||||||||||
| Secured debt | — | — | — | n/a | 115 | (115) | -100 | % | (115) | -100 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Unsecured credit facility and commercial paper program | 15,313 | 43,861 | (28,548) | -65 | % | 34,626 | 9,235 | 27 | % | (19,313) | -56 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Loan expense | 17,104 | 15,279 | 1,825 | 12 | % | 13,560 | 1,719 | 13 | % | 3,544 | 26 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Totals | $ | 432,431 | $ | 461,273 | $ | (28,842) | -6 | % | $ | 436,256 | $ | 25,017 | 6 | % | $ | (3,825) | -1 | % | ||||||||||||||||||||||||||||||||||||||
The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments, as well as the movement in foreign exchange rates and related hedge activity. Please refer to Note 11 to consolidated financial statements for additional information. The change in interest expense on our unsecured credit facility and commercial paper program is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes. Please refer to Note 10 of our consolidated financial statements for additional information regarding our unsecured revolving credit facility and commercial paper program. Loan expenses represent the amortization of costs incurred in connection with senior unsecured notes issuances. The loss on extinguishment recognized during the year ended December 31, 2020 is due primarily to the early extinguishment of $160,872,000 of our 3.75% senior unsecured notes due March 2023 and $265,376,000 of our 3.95% senior unsecured notes due September 2023. The loss on extinguishment recognized in 2019 is due primarily to the early extinguishment of the $600,000,000 of 4.125% senior unsecured notes due 2019 and the $450,000,000 of 6.125% senior unsecured notes due 2020 in March 2019, the early extinguishment of the $450,000,000 of 4.95% senior unsecured notes due 2021 and the $600,000,000 of 5.25% senior unsecured notes due 2022 in September 2019 and the early redemption of the $300 million Canadian-denominated 3.35% senior unsecured notes due 2020 in December 2019.
General and administrative expenses as a percentage of consolidated revenues for the years ended December 31, 2020, 2019 and 2018 were 2.79%, 2.47% and 2.69%, respectively. Other expenses for all years include severance-related costs associated with the departure of certain executive officers and key employees.
Income tax expense primarily relates to state taxes, foreign taxes and taxes based on income generated by entities that are structured as TRSs.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Other
Non-GAAP Financial Measures
We believe that net income and net income attributable to common stockholders (“NICS”), as defined by U.S. GAAP, are the most appropriate earnings measurements. However, we consider FFO, NOI, SSNOI, EBITDA and Adjusted EBITDA to be useful supplemental measures of our operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (“NAREIT”) created funds from operations attributable to common stockholders (“FFO”) as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means NICS, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairment of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests.
Consolidated net operating income (“NOI”) is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to operators, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations. These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. Same store NOI (“SSNOI”) is used to evaluate the operating performance of our properties using a consistent population which controls for changes in the composition of our portfolio. We believe the drivers of property level NOI for both consolidated properties and unconsolidated properties are generally the same and therefore, we evaluate SSNOI based on our ownership interest in each property ("Welltower Share"). To arrive at Welltower's Share, NOI is adjusted by adding our minority ownership share related to unconsolidated properties and by subtracting the minority partners' noncontrolling ownership interests for consolidated properties. We do not control investments in unconsolidated properties and while we consider disclosures at Welltower Share to be useful, they may not accurately depict the legal and economic implications of our joint venture arrangements and should be used with caution. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-over-year reporting periods. Acquisitions and development conversions are included in SSNOI five full quarters or eight full quarters after acquisition or being placed into service for the QTD Pool and the YTD Pool, respectively. Land parcels, loans and sub-leases, as well as any properties sold or classified as held for sale during the respective periods are excluded from SSNOI. Redeveloped properties (including major refurbishments of a Seniors Housing Operating property where 20% or more of units are simultaneously taken out of commission for 30 days or more or Outpatient Medical properties undergoing a change in intended use) are excluded from SSNOI until five full quarters or eight full quarters post completion of the redevelopment for the QTD Pool and YTD Pool, respectively. Properties undergoing operator transitions and/or segment transitions are also excluded from SSNOI until five full quarters or eight full quarters post completion of the transition for the QTD Pool and YTD Pool, respectively. In addition, properties significantly impacted by force majeure, acts of God, or other extraordinary adverse events are excluded from SSNOI until five full quarters or eight full quarters after the properties are placed back into service for the QTD Pool and YTD Pool, respectively. SSNOI excludes non-cash NOI and includes adjustments to present consistent ownership percentages and to translate Canadian properties and U.K. properties using a consistent exchange rate. We believe NOI and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties.
EBITDA is defined as earnings (net income) before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding unconsolidated entities and including adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/loss/impairments on properties, gains/losses on derivatives and financial instruments, other expense, additional other income and other impairment charges. We believe that EBITDA and Adjusted EBITDA, along with net income, are important supplemental measures because they provide additional information to assess and evaluate the performance of our operations. We primarily use these measures to determine our interest coverage ratio, which represents EBITDA and Adjusted EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA and Adjusted EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization, and preferred dividends. Covenants in our unsecured senior notes and primary credit facility contain financial ratios based on a definition of EBITDA and Adjusted EBITDA that is specific to those agreements. Our leverage ratios are defined as the proportion of net debt to total capitalization and include book capitalization, undepreciated book capitalization and market capitalization. Book capitalization represents the sum of net debt (defined as total long-term debt, excluding operating lease liabilities, less cash and cash equivalents and any IRC Section 1031 deposits), total equity and redeemable noncontrolling interests. Undepreciated book capitalization represents book capitalization adjusted for accumulated
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
depreciation and amortization. Market capitalization represents book capitalization adjusted for the fair market value of our common stock.
Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Management uses these financial measures to facilitate internal and external comparisons to our historical operating results and in making operating decisions. Additionally, these measures are utilized by the Board of Directors to evaluate management. None of our supplemental measures represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies.
The table below reflects the reconciliation of FFO to NICS, the most directly comparable U.S. GAAP measure, for the periods presented. Noncontrolling interest and unconsolidated entity amounts represent adjustments to reflect our share of depreciation and amortization, gains/losses on real estate dispositions and impairments of assets. Amounts are in thousands except for per share data.
| Year Ended December 31, | ||||||||||||||||||||
| FFO Reconciliation: | 2020 | 2019 | 2018 | |||||||||||||||||
| Net income attributable to common stockholders | $ | 978,844 | $ | 1,232,432 | $ | 758,250 | ||||||||||||||
| Depreciation and amortization | 1,038,437 | 1,027,073 | 950,459 | |||||||||||||||||
| Impairment of assets | 135,608 | 28,133 | 115,579 | |||||||||||||||||
| Loss (gain) on real estate dispositions, net | (1,088,455) | (748,041) | (415,575) | |||||||||||||||||
| Noncontrolling interests | (23,968) | (20,197) | (69,193) | |||||||||||||||||
| Unconsolidated entities | 62,096 | 57,680 | 52,663 | |||||||||||||||||
| Funds from operations attributable to common stockholders | $ | 1,102,562 | $ | 1,577,080 | $ | 1,392,183 | ||||||||||||||
| Average diluted shares outstanding: | 417,387 | 403,808 | 375,250 | |||||||||||||||||
| Per diluted share data: | ||||||||||||||||||||
Net income attributable to common stockholders(1) | $ | 2.33 | $ | 3.05 | $ | 2.02 | ||||||||||||||
| Funds from operations attributable to common stockholders | $ | 2.64 | $ | 3.91 | $ | 3.71 | ||||||||||||||
(1) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. | ||||||||||||||||||||
The following tables reflect the reconciliation of NOI to net income, the most directly comparable U.S. GAAP measure, for the years presented. Dollar amounts are in thousands.
| Year Ended December 31, | ||||||||||||||||||||
| NOI Reconciliation: | 2020 | 2019 | 2018 | |||||||||||||||||
| Net income | $ | 1,038,852 | $ | 1,330,410 | $ | 829,750 | ||||||||||||||
| Loss (gain) on real estate dispositions, net | (1,088,455) | (748,041) | (415,575) | |||||||||||||||||
| Loss (income) from unconsolidated entities | 8,083 | (42,434) | 641 | |||||||||||||||||
| Income tax expense (benefit) | 9,968 | 2,957 | 8,674 | |||||||||||||||||
| Other expenses | 70,335 | 52,612 | 112,898 | |||||||||||||||||
| Impairment of assets | 135,608 | 28,133 | 115,579 | |||||||||||||||||
| Provision for loan losses | 94,436 | 18,690 | — | |||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 47,049 | 84,155 | 16,097 | |||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | 11,049 | (4,399) | (4,016) | |||||||||||||||||
| General and administrative expenses | 128,394 | 126,549 | 126,383 | |||||||||||||||||
| Depreciation and amortization | 1,038,437 | 1,027,073 | 950,459 | |||||||||||||||||
| Interest expense | 514,388 | 555,559 | 526,592 | |||||||||||||||||
| Consolidated net operating income (NOI) | $ | 2,008,144 | $ | 2,431,264 | $ | 2,267,482 | ||||||||||||||
| NOI by segment: | ||||||||||||||||||||
| Seniors Housing Operating | $ | 755,552 | $ | 1,039,520 | $ | 985,022 | ||||||||||||||
| Triple-net | 748,121 | 918,743 | 900,049 | |||||||||||||||||
| Outpatient Medical | 505,071 | 469,035 | 380,136 | |||||||||||||||||
| Non-segment/corporate | (600) | 3,966 | 2,275 | |||||||||||||||||
| Total NOI | $ | 2,008,144 | $ | 2,431,264 | $ | 2,267,482 | ||||||||||||||
61
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
| Quarterly NOI by Segment: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 851,128 | $ | 872,386 | $ | 773,650 | $ | 915,529 | $ | 742,065 | $ | 835,496 | $ | 715,020 | $ | 833,458 | $ | 3,081,863 | $ | 3,456,869 | |||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 607,871 | 607,686 | 595,513 | 637,317 | 567,704 | 581,341 | 555,223 | 591,005 | 2,326,311 | 2,417,349 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOI | $ | 243,257 | $ | 264,700 | $ | 178,137 | $ | 278,212 | $ | 174,361 | $ | 254,155 | $ | 159,797 | $ | 242,453 | $ | 755,552 | $ | 1,039,520 | |||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 207,729 | $ | 248,241 | $ | 233,619 | $ | 240,758 | $ | 120,928 | $ | 244,607 | $ | 239,028 | $ | 239,037 | $ | 801,304 | $ | 972,643 | |||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 13,302 | 14,955 | 13,563 | 12,823 | 12,567 | 13,922 | 13,751 | 12,200 | 53,183 | 53,900 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOI | $ | 194,427 | $ | 233,286 | $ | 220,056 | $ | 227,935 | $ | 108,361 | $ | 230,685 | $ | 225,277 | $ | 226,837 | $ | 748,121 | $ | 918,743 | |||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 199,329 | $ | 149,461 | $ | 180,831 | $ | 163,365 | $ | 172,704 | $ | 185,189 | $ | 167,155 | $ | 189,813 | $ | 720,019 | $ | 687,828 | |||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 60,608 | 48,166 | 51,688 | 50,987 | 52,728 | 60,325 | 49,924 | 59,315 | 214,948 | 218,793 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOI | $ | 138,721 | $ | 101,295 | $ | 129,143 | $ | 112,378 | $ | 119,976 | $ | 124,864 | $ | 117,231 | $ | 130,498 | $ | 505,071 | $ | 469,035 | |||||||||||||||||||||||||||||||||||||||||||||
| Corporate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 416 | $ | 2,157 | $ | 375 | $ | 454 | $ | 1,177 | $ | 841 | $ | 813 | $ | 514 | $ | 2,781 | $ | 3,966 | |||||||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | — | — | — | — | 1,718 | — | 1,663 | — | 3,381 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOI | $ | 416 | $ | 2,157 | $ | 375 | $ | 454 | $ | (541) | $ | 841 | $ | (850) | $ | 514 | $ | (600) | $ | 3,966 | |||||||||||||||||||||||||||||||||||||||||||||
The following is a reconciliation of the properties included in our QTD Pool and YTD Pool for SSNOI:
| QTD Pool | YTD Pool | |||||||||||||||||||||||||||||||||||||||||||||||||
| SSNOI Property Reconciliations: | Seniors Housing Operating | Triple-net | Outpatient Medical | Total | Seniors Housing Operating | Triple-net | Outpatient Medical | Total | ||||||||||||||||||||||||||||||||||||||||||
| Consolidated properties | 556 | 641 | 296 | 1,493 | 556 | 641 | 296 | 1,493 | ||||||||||||||||||||||||||||||||||||||||||
| Unconsolidated properties | 90 | 39 | 72 | 201 | 90 | 39 | 72 | 201 | ||||||||||||||||||||||||||||||||||||||||||
| Total properties | 646 | 680 | 368 | 1,694 | 646 | 680 | 368 | 1,694 | ||||||||||||||||||||||||||||||||||||||||||
Recent acquisitions/development conversions(1) | (46) | (18) | (51) | (115) | (93) | (24) | (123) | (240) | ||||||||||||||||||||||||||||||||||||||||||
| Under development | (27) | (4) | (2) | (33) | (27) | (4) | (2) | (33) | ||||||||||||||||||||||||||||||||||||||||||
Under redevelopment(2) | (10) | (1) | (2) | (13) | (11) | (1) | (2) | (14) | ||||||||||||||||||||||||||||||||||||||||||
| Current held for sale | (10) | (1) | (2) | (13) | (10) | (1) | (2) | (13) | ||||||||||||||||||||||||||||||||||||||||||
| Loans, land parcels and subleases | (11) | (18) | (8) | (37) | (11) | (18) | (8) | (37) | ||||||||||||||||||||||||||||||||||||||||||
Transitions(3) | (27) | (6) | — | (33) | (93) | (24) | — | (117) | ||||||||||||||||||||||||||||||||||||||||||
Other(4) | (1) | — | — | (1) | (2) | — | — | (2) | ||||||||||||||||||||||||||||||||||||||||||
| Same store properties | 514 | 632 | 303 | 1,449 | 399 | 608 | 231 | 1,238 | ||||||||||||||||||||||||||||||||||||||||||
(1) Acquisitions and development conversions will enter the QTD Pool and YTD Pool five full quarters and eight full quarters after acquisition or certificate of occupancy, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Redevelopment properties will enter the QTD Pool and YTD Pool after five full quarters and eight full quarters of operations post redevelopment completion, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Transitioned properties will enter the QTD Pool and YTD Pool after five full quarters and eight full quarters of operations with the new operator in place or under the new structure, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(4) Includes one closed property in the QTD pool and one closed property and one flooded property in the YTD pool. | ||||||||||||||||||||||||||||||||||||||||||||||||||
62
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a reconciliation of our consolidated NOI to same store NOI for the periods presented for the respective pools. Dollar amounts are in thousands.
| QTD Pool | YTD Pool | |||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
| SSNOI Reconciliations: | December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||
| Consolidated NOI | $ | 159,797 | $ | 242,453 | $ | 755,552 | $ | 1,039,520 | ||||||||||||||||||
| NOI attributable to unconsolidated investments | 13,182 | 16,491 | 53,736 | 65,387 | ||||||||||||||||||||||
| NOI attributable to noncontrolling interests | (9,405) | (19,436) | (51,334) | (81,426) | ||||||||||||||||||||||
| Non-cash NOI attributable to same store properties | (349) | (842) | (3,239) | (4,295) | ||||||||||||||||||||||
| NOI attributable to non-same store properties | (8,291) | (23,254) | (166,567) | (261,002) | ||||||||||||||||||||||
Currency and ownership adjustments (1) | (561) | 754 | 2,985 | 6,144 | ||||||||||||||||||||||
| SSNOI at Welltower Share | 154,373 | 216,166 | 591,133 | 764,328 | ||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||
| Consolidated NOI | 225,277 | 226,837 | $ | 748,121 | $ | 918,743 | ||||||||||||||||||||
| NOI attributable to unconsolidated investments | 4,818 | 5,133 | 13,797 | 20,532 | ||||||||||||||||||||||
| NOI attributable to noncontrolling interests | (14,563) | (14,751) | (58,288) | (58,462) | ||||||||||||||||||||||
| Non-cash NOI attributable to same store properties | (12,313) | (15,224) | 80,630 | (58,846) | ||||||||||||||||||||||
| NOI attributable to non-same store properties | (34,236) | (32,080) | (155,566) | (197,487) | ||||||||||||||||||||||
Currency and ownership adjustments (1) | (286) | 137 | 278 | 397 | ||||||||||||||||||||||
| SSNOI at Welltower Share | 168,697 | 170,052 | 628,972 | 624,877 | ||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||
| Consolidated NOI | 117,231 | 130,498 | 505,071 | 469,035 | ||||||||||||||||||||||
| NOI attributable to unconsolidated investments | 3,481 | 541 | 9,629 | 1,930 | ||||||||||||||||||||||
| NOI attributable to noncontrolling interests | (4,264) | (6,853) | (16,565) | (27,637) | ||||||||||||||||||||||
| Non-cash NOI attributable to same store properties | (1,542) | (2,915) | (1,094) | (2,807) | ||||||||||||||||||||||
| NOI attributable to non-same store properties | (24,050) | (19,674) | (204,525) | (129,723) | ||||||||||||||||||||||
Currency and ownership adjustments (1) | (5,871) | (17,453) | (40,004) | (64,009) | ||||||||||||||||||||||
| SSNOI at Welltower Share | 84,985 | 84,144 | 252,512 | 246,789 | ||||||||||||||||||||||
| SSNOI at Welltower Share: | ||||||||||||||||||||||||||
| Seniors Housing Operating | 154,373 | 216,166 | 591,133 | 764,328 | ||||||||||||||||||||||
| Triple-net | 168,697 | 170,052 | 628,972 | 624,877 | ||||||||||||||||||||||
| Outpatient Medical | 84,985 | 84,144 | 252,512 | 246,789 | ||||||||||||||||||||||
| Total | $ | 408,055 | $ | 470,362 | $ | 1,472,617 | $ | 1,635,994 | ||||||||||||||||||
63
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The table below reflects the reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented. Dollars are in thousands.
| Year Ended December 31, | ||||||||||||||||||||
| Adjusted EBITDA Reconciliation: | 2020 | 2019 | 2018 | |||||||||||||||||
| Net income (loss) | $ | 1,038,852 | $ | 1,330,410 | $ | 829,750 | ||||||||||||||
| Interest expense | 514,388 | 555,559 | 526,592 | |||||||||||||||||
| Income tax expense (benefit) | 9,968 | 2,957 | 8,674 | |||||||||||||||||
| Depreciation and amortization | 1,038,437 | 1,027,073 | 950,459 | |||||||||||||||||
| EBITDA | 2,601,645 | 2,915,999 | 2,315,475 | |||||||||||||||||
| Loss (income) from unconsolidated entities | 8,083 | (42,434) | 641 | |||||||||||||||||
Stock-based compensation expense(1) | 28,318 | 25,047 | 27,646 | |||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 47,049 | 84,155 | 16,097 | |||||||||||||||||
| Loss (gain) on real estate dispositions, net | (1,088,455) | (748,041) | (415,575) | |||||||||||||||||
| Impairment of assets | 135,608 | 28,133 | 115,579 | |||||||||||||||||
| Provision for loan losses | 94,436 | 18,690 | — | |||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | 11,049 | (4,399) | (4,016) | |||||||||||||||||
Other expenses(1) | 64,171 | 51,052 | 111,990 | |||||||||||||||||
| Other impairment | 146,508 | — | — | |||||||||||||||||
| Additional other income | — | — | (14,832) | |||||||||||||||||
| Adjusted EBITDA | $ | 2,048,412 | $ | 2,328,202 | $ | 2,153,005 | ||||||||||||||
| Adjusted Interest Coverage Ratio: | ||||||||||||||||||||
| Interest expense | $ | 514,388 | $ | 555,559 | $ | 526,592 | ||||||||||||||
| Capitalized interest | 17,472 | 15,272 | 7,905 | |||||||||||||||||
| Non-cash interest expense | (15,751) | (8,645) | (10,860) | |||||||||||||||||
| Total interest | 516,109 | 562,186 | 523,637 | |||||||||||||||||
| Adjusted EBITDA | $ | 2,048,412 | $ | 2,328,202 | $ | 2,153,005 | ||||||||||||||
| Adjusted interest coverage ratio | 3.97x | 4.14x | 4.11x | |||||||||||||||||
| Adjusted Fixed Charge Coverage Ratio: | ||||||||||||||||||||
| Total interest | $ | 516,109 | $ | 562,186 | $ | 523,637 | ||||||||||||||
| Secured debt principal payments | 62,707 | 54,325 | 56,288 | |||||||||||||||||
| Preferred dividends | — | — | 46,704 | |||||||||||||||||
| Total fixed charges | 578,816 | 616,511 | 626,629 | |||||||||||||||||
| Adjusted EBITDA | $ | 2,048,412 | $ | 2,328,202 | $ | 2,153,005 | ||||||||||||||
| Adjusted fixed charge coverage ratio | 3.54x | 3.78x | 3.44x | |||||||||||||||||
(1) Certain severance-related costs are included in stock-based compensation and excluded from other expenses.
64
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our leverage ratios include book capitalization, undepreciated book capitalization and market capitalization. Book capitalization represents the sum of net debt (defined as total long-term debt less cash and cash equivalents and any IRC Section 1031 deposits), total equity and redeemable noncontrolling interests. Undepreciated book capitalization represents book capitalization adjusted for accumulated depreciation and amortization. Market capitalization represents book capitalization adjusted for the fair market value of our common stock. Our leverage ratios are defined as the proportion of net debt to total capitalization. The table below reflects the reconciliation of our leverage ratios to our balance sheets for the periods presented. Amounts are in thousands, except share price.
| Year Ended December 31, | ||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||||||||
| Book capitalization: | ||||||||||||||||||||||||||
| Unsecured credit facility and commercial paper | $ | — | $ | 1,587,597 | $ | 1,147,000 | ||||||||||||||||||||
Long-term debt obligations(1) | 13,905,822 | 13,436,365 | 12,150,144 | |||||||||||||||||||||||
Cash and cash equivalents(2) | (1,968,765) | (284,917) | (215,376) | |||||||||||||||||||||||
| Total net debt | 11,937,057 | 14,739,045 | 13,081,768 | |||||||||||||||||||||||
Total equity and noncontrolling interests(3) | 17,225,062 | 16,982,504 | 16,010,645 | |||||||||||||||||||||||
| Book capitalization | $ | 29,162,119 | $ | 31,721,549 | $ | 29,092,413 | ||||||||||||||||||||
| Net debt to book capitalization ratio | 40.9 | % | 46.5 | % | 45.0 | % | ||||||||||||||||||||
| Undepreciated book capitalization: | ||||||||||||||||||||||||||
| Total net debt | $ | 11,937,057 | $ | 14,739,045 | $ | 13,081,768 | ||||||||||||||||||||
| Accumulated depreciation and amortization | 6,104,297 | 5,715,459 | 5,499,958 | |||||||||||||||||||||||
Total equity and noncontrolling interests(3) | 17,225,062 | 16,982,504 | 16,010,645 | |||||||||||||||||||||||
| Undepreciated book capitalization | $ | 35,266,416 | $ | 37,437,008 | $ | 34,592,371 | ||||||||||||||||||||
| Net debt to undepreciated book capitalization ratio | 33.8 | % | 39.4 | % | 37.8 | % | ||||||||||||||||||||
| Market capitalization: | ||||||||||||||||||||||||||
| Common shares outstanding | 417,401 | 410,257 | 383,675 | |||||||||||||||||||||||
| Period end share price | $ | 64.62 | $ | 81.78 | $ | 69.41 | ||||||||||||||||||||
| Common equity market capitalization | $ | 26,972,453 | $ | 33,550,817 | $ | 26,630,882 | ||||||||||||||||||||
| Total net debt | 11,937,057 | 14,739,045 | 13,081,768 | |||||||||||||||||||||||
Noncontrolling interests(3) | 1,252,343 | 1,442,060 | 1,378,311 | |||||||||||||||||||||||
| Preferred stock | — | — | 718,498 | |||||||||||||||||||||||
| Market capitalization: | $ | 40,161,853 | $ | 49,731,922 | $ | 41,809,459 | ||||||||||||||||||||
| Net debt to market capitalization ratio | 29.7 | % | 29.6 | % | 31.3 | % | ||||||||||||||||||||
(1) Amounts include senior unsecured notes, secured debt and lease liabilities related to financing leases, as reflected on our Consolidated Balance Sheets. Operating lease liabilities related to the ASC 842 adoption are excluded.
(2) Inclusive of IRC Section 1031 deposits, if any.
(3) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests as reflected on our Consolidated Balance Sheets.
Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions. Management considers an accounting estimate or assumption critical if:
•the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and
•the impact of the estimates and assumptions on financial condition or operating performance is material.
Management has discussed the development and selection of its critical accounting policies with the Audit Committee of the Board of Directors. Management believes the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate and are not reasonably likely to change in the future. However, since these estimates require assumptions to be made that were uncertain at the time the estimate was made, they bear the risk of change. If actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial condition. Please refer to Note 2 to our consolidated financial statements for further information on significant accounting policies that impact us and for the impact of new accounting standards, including accounting pronouncements that were issued but not yet adopted by us.
The following table presents information about our critical accounting policies, as well as the material assumptions used to develop each estimate:
65
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Nature of Critical Accounting Estimate | Assumptions/Approach Used | |||||||
Impairment of Real Property Assessing impairment of real property involves subjectivity in determining if indicators of impairment are present and in estimating the future undiscounted cash flows or estimated fair value of an asset. In estimating the undiscounted cash flows or fair value, key assumptions that would be made are the estimation of future rental revenues, operating expenses, capitalization rates and the ability and intent to hold the respective asset, all of which are affected by our expectations of future market or economic conditions. These estimates can have a significant impact on the undiscounted cash flows or estimated fair value of an asset. | Quarterly, we evaluate our real estate investments on a property by property basis to determine if there are indicators of impairment. These indicators may include expected operational performance, the tenant's ability to make rent payments, a decision to dispose of an asset before the end of its estimated useful life and changes in the market that may permanently reduce the value of the property. If indicators of impairment exist, an undiscounted cash flow analysis will be prepared and the results of such analysis will be compared to the current net book value to determine if an impairment charge is necessary. This analysis requires us to use judgment in determining whether indicators of impairment exist and to estimate the expected future undiscounted cash flows or estimated fair values of the property. Properties that meet the held for sale criteria are recorded at the lesser of the fair value less costs to sell or carrying value. | |||||||
Real Estate Acquisitions We believe that substantially all of our real estate acquisitions are considered asset acquisitions for which we record the related real estate acquired (tangible assets and identifiable intangible assets and liabilities) at cost on a relative fair value basis. Liabilities assumed and any associated noncontrolling interests are reflected at fair value. Tangible assets consist primarily of land, building and improvements. Identifiable intangible assets and liabilities primarily consist of the above or below market component of in-place leases and the value of in-place leases. The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values based on management's evaluation of the specific characteristics of each tenant's lease and our overall relationship with respect to that tenant. | The allocation of the purchase price to the related real estate acquired (tangible assets and intangible assets and liabilities) involves subjectivity as such allocations are based on a relative fair value analysis. In determining the fair values that drive such analysis, we estimate the fair value of each component of the real estate acquired which generally includes land, buildings and improvements, the above or below market component of in-place leases and the value of in-place leases. Significant assumptions used to determine such fair values include comparable land sales, capitalization rates, discount rates, market rental rates and property operating data, all of which can be impacted by expectations about future market or economic conditions. Our estimates of the values of these components affect the amount of depreciation and amortization we record over the estimated useful life of the property or the term of the lease. | |||||||
Principles of Consolidation The consolidated financial statements include our accounts, the accounts of our wholly-owned subsidiaries, and the accounts of joint venture entities in which we own a majority voting interest with the ability to control operations and where no substantive participating rights or substantive kick out rights have been granted to the noncontrolling interests. In addition, we consolidate those entities deemed to be variable interest entities (“VIEs”) in which we are determined to be the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation. | We make judgments about which entities are VIEs based on an assessment of whether (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We make judgments with respect to our level of influence or control of an entity and whether we are (or are not) the primary beneficiary of a VIE. Consideration of various factors includes, but is not limited to, our ability to direct the activities that most significantly impact the entity's economic performance, our form of ownership interest, our representation on the entity's governing body, the size and seniority of our investment, our ability and the rights of other investors to participate in policy making decisions, replace the manager and/or liquidate the entity, if applicable. Our ability to correctly assess our influence or control over an entity at inception of our involvement or on a continuous basis when determining the primary beneficiary of a VIE affects the presentation of these entities in our consolidated financial statements. If we perform a primary beneficiary analysis at a date other than at inception of the VIE, our assumptions may be different and may result in the identification of a different primary beneficiary. | |||||||
66
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Nature of Critical Accounting Estimate | Assumptions/Approach Used | |||||||
Allowance for Credit Losses on Loans Receivable The allowance for credit losses is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the credit allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments. | The determination of the allowance for credit losses is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments. We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, payment status, historical loan charge-offs, financial strength of the borrower and guarantors, and nature, extent and value of the underlying collateral. A loan is considered to have deteriorated credit quality when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the loan agreement. For those loans we identified as having deteriorated credit quality, we determine the amount of credit loss on an individual basis. Placement on non-accrual status may be required. Consistent with this definition, all loans on non-accrual are deemed to have deteriorated credit quality. To the extent circumstances improve and the risk of collectability is diminished, we may return these loans to income accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance. For the remaining loans, we assess credit loss on a collective pool basis and use our historical loss experience for similar loans to determine the reserve for credit losses. | |||||||
67
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We seek to mitigate the underlying foreign currency exposures with gains and losses on derivative contracts hedging these exposures. We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to match our variable rate investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. This section is presented to provide a discussion of the risks associated with potential fluctuations in interest rates and foreign currency exchange rates. For more information, see Notes 12 and 17 to our consolidated financial statements.
We historically borrow on our unsecured revolving credit facility and commercial paper program to acquire, construct or make loans relating to health care and seniors housing properties. Then, as market conditions dictate, we will issue equity or long-term fixed rate debt to repay the borrowings under our unsecured revolving credit facility and commercial paper program. We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of refinancing may not be as favorable as the terms of current indebtedness. The majority of our borrowings were completed under indentures or contractual agreements that limit the amount of indebtedness we may incur. Accordingly, in the event that we are unable to raise additional equity or borrow money because of these limitations, our ability to acquire additional properties may be limited.
A change in interest rates will not affect the interest expense associated with our fixed rate debt. Interest rate changes, however, will affect the fair value of our fixed rate debt. Changes in the interest rate environment upon maturity of this fixed rate debt could have an effect on our future cash flows and earnings, depending on whether the debt is replaced with other fixed rate debt, variable rate debt or equity or repaid by the sale of assets. To illustrate the impact of changes in the interest rate markets, we performed a sensitivity analysis on our fixed rate debt instruments whereby we modeled the change in net present values arising from a hypothetical 1% increase in interest rates to determine the instruments’ change in fair value. The following table summarizes the analysis performed as of the dates indicated (in thousands):
| December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||
| Principal balance | Change in fair value | Principal balance | Change in fair value | |||||||||||||||||||||||
| Senior unsecured notes | $ | 9,943,501 | $ | (761,581) | $ | 9,724,691 | $ | (751,848) | ||||||||||||||||||
| Secured debt | 1,702,196 | (57,756) | 1,814,229 | (69,756) | ||||||||||||||||||||||
| Totals | $ | 11,645,697 | $ | (819,337) | $ | 11,538,920 | $ | (821,604) | ||||||||||||||||||
Our variable rate debt, including our unsecured revolving credit facility and commercial paper program, is reflected at fair value. At December 31, 2020, we had $2,241,909,000 outstanding related to our variable rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would result in increased annual interest expense of $22,420,000. At December 31, 2019, we had $3,470,584,000 outstanding under our variable rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would have resulted in increased annual interest expense of $34,706,000.
We are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations. Increases or decreases in the value of the Canadian Dollar or British Pounds Sterling relative to the U.S. Dollar impact the amount of net income we earn from our investments in Canada and the United Kingdom. Based solely on our results for the year ended December 31, 2020, including the impact of existing hedging arrangements, if these exchange rates were to increase or decrease by 10%, our net income from these investments would increase or decrease, as applicable, by less than $3,000,000. We will continue to mitigate these underlying foreign currency exposures with non-U.S. denominated borrowings and gains and losses on derivative contracts. If we increase our international presence through investments in, or acquisitions or development of, seniors housing and health care properties outside the U.S., we may also decide to transact additional business or borrow funds in currencies other than U.S. Dollars, Canadian Dollars or British Pounds Sterling. To illustrate the impact of changes in foreign currency markets, we performed a sensitivity analysis on our derivative portfolio whereby we modeled the change in net present values arising from a hypothetical 1% increase in foreign currency exchange rates to determine the instruments’ change in fair value. The following table summarizes the results of the analysis performed, excluding cross currency hedge activity (dollars in thousands):
| December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||
| Carrying value | Change in fair value | Carrying value | Change in fair value | |||||||||||||||||||||||
| Foreign currency exchange contracts | $ | 61,851 | $ | 12,731 | $ | 26,767 | $ | 12,136 | ||||||||||||||||||
| Debt designated as hedges | 1,630,542 | 16,305 | 1,586,116 | 15,861 | ||||||||||||||||||||||
| Totals | $ | 1,692,393 | $ | 29,036 | $ | 1,612,883 | $ | 27,997 | ||||||||||||||||||
68
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Welltower Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Welltower Inc. and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 10, 2021 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Impairment of Real Property
Description of the Matter At December 31, 2020, the Company’s net real property owned was approximately $27.6 billion. As discussed in Note 2 to the consolidated financial statements, the Company reviews its real property quarterly on a property-by-property basis to determine if facts and circumstances suggest that the real property may be impaired. If the undiscounted cash flows indicate that the real property will not be recoverable, the carrying value of the real property is reduced to its estimated fair value and an impairment charge is recognized for the difference between the carrying value and the fair value.
Auditing the Company’s process to evaluate real property owned for impairment was complex due to the high degree of subjectivity in determining whether indicators of impairment were present for certain properties, and in determining the future undiscounted cash flows and estimated fair values, if necessary, of properties where indicators of impairment were determined to be present. In particular, the undiscounted cash flows and fair value estimates were sensitive to significant assumptions, including future rental revenues and operating expenses, capitalization rates, and anticipated hold period, which are affected by expectations about future market or economic conditions.
How We Addressed the | ||
Matter in Our Audit | ||
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process to evaluate real property owned for impairment. This
69
included testing controls over the Company’s review of impairment indicators by property and management's review and approval of the significant assumptions described above.
To test the Company's evaluation of real property for impairment, we performed audit procedures that included, among others, assessing the methodologies used by management, evaluating the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by the Company in its analyses. We compared the significant assumptions used by management to current industry and economic trends and evaluated whether changes to the Company’s business and other relevant factors would affect the significant assumptions. In addition, we assessed the historical accuracy of the Company’s estimates and performed sensitivity analyses of the significant assumptions to evaluate the changes in the undiscounted future cash flows and estimated fair values of the property that would result from changes in the significant assumptions.
Real Estate Acquisitions
Description of the Matter During 2020, the Company completed approximately $904 million of real estate acquisitions. As disclosed in Note 3 of the consolidated financial statements, the total purchase price for all properties acquired has been allocated to the related real estate acquired (tangible assets and identifiable intangible assets and liabilities) based upon their relative fair values.
Auditing the fair values allocated by management to the real estate acquired was complex because the fair value estimates were sensitive to significant assumptions, including comparable land sales, capitalization rates, discount rates, market rental rates and property operating data, which can be impacted by expectations about future market or economic conditions.
| How We Addressed the | ||
| Matter in Our Audit | ||
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process to account for real estate acquisitions, including controls over the Company’s review of the significant assumptions discussed above.
To test the fair values allocated to the real estate acquired, we performed audit procedures that included, among others, assessing the methodologies used by management and evaluating the significant assumptions used by the Company discussed above. We compared certain of management’s assumptions to external market data for similar properties and tested the clerical accuracy of the valuation models. We involved our valuation specialist in our evaluation of the significant assumptions used by the Company and the review of the valuation models.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1970.
Toledo, Ohio
February 10, 2021
70
CONSOLIDATED BALANCE SHEETS
WELLTOWER INC. AND SUBSIDIARIES
(in thousands)
| December 31, 2020 | December 31, 2019 | |||||||||||||
| Assets | ||||||||||||||
| Real estate investments: | ||||||||||||||
| Real property owned: | ||||||||||||||
| Land and land improvements | $ | 3,440,650 | $ | 3,486,620 | ||||||||||
| Buildings and improvements | 28,024,971 | 29,163,305 | ||||||||||||
| Acquired lease intangibles | 1,500,030 | 1,617,051 | ||||||||||||
| Real property held for sale, net of accumulated depreciation | 216,613 | 1,253,008 | ||||||||||||
| Construction in progress | 487,742 | 507,931 | ||||||||||||
| Gross real property owned | 33,670,006 | 36,027,915 | ||||||||||||
| Less accumulated depreciation and amortization | (6,104,297) | (5,715,459) | ||||||||||||
| Net real property owned | 27,565,709 | 30,312,456 | ||||||||||||
| Right of use assets, net | 465,866 | 536,433 | ||||||||||||
| Real estate loans receivable, net of credit allowance | 443,372 | 270,382 | ||||||||||||
| Net real estate investments | 28,474,947 | 31,119,271 | ||||||||||||
| Other assets: | ||||||||||||||
| Investments in unconsolidated entities | 946,234 | 583,423 | ||||||||||||
| Goodwill | 68,321 | 68,321 | ||||||||||||
| Cash and cash equivalents | 1,545,046 | 284,917 | ||||||||||||
| Restricted cash | 475,997 | 100,849 | ||||||||||||
| Straight-line rent receivable | 344,066 | 466,222 | ||||||||||||
| Receivables and other assets | 629,031 | 757,748 | ||||||||||||
| Total other assets | 4,008,695 | 2,261,480 | ||||||||||||
| Total assets | $ | 32,483,642 | $ | 33,380,751 | ||||||||||
| Liabilities and equity | ||||||||||||||
| Liabilities: | ||||||||||||||
| Unsecured credit facility and commercial paper | $ | — | $ | 1,587,597 | ||||||||||
| Senior unsecured notes | 11,420,790 | 10,336,513 | ||||||||||||
| Secured debt | 2,377,930 | 2,990,962 | ||||||||||||
| Lease liabilities | 418,266 | 473,693 | ||||||||||||
| Accrued expenses and other liabilities | 1,041,594 | 1,009,482 | ||||||||||||
| Total liabilities | 15,258,580 | 16,398,247 | ||||||||||||
| Redeemable noncontrolling interests | 343,490 | 475,877 | ||||||||||||
| Equity: | ||||||||||||||
| Common stock | 418,691 | 411,005 | ||||||||||||
| Capital in excess of par value | 20,823,145 | 20,190,119 | ||||||||||||
| Treasury stock | (104,490) | (78,955) | ||||||||||||
| Cumulative net income | 8,327,598 | 7,353,966 | ||||||||||||
| Cumulative dividends | (13,343,721) | (12,223,534) | ||||||||||||
| Accumulated other comprehensive income (loss) | (148,504) | (112,157) | ||||||||||||
| Total Welltower Inc. stockholders’ equity | 15,972,719 | 15,540,444 | ||||||||||||
| Noncontrolling interests | 908,853 | 966,183 | ||||||||||||
| Total equity | 16,881,572 | 16,506,627 | ||||||||||||
| Total liabilities and equity | $ | 32,483,642 | $ | 33,380,751 | ||||||||||
See accompanying notes
71
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
WELLTOWER INC. AND SUBSIDIARIES
(In thousands, except per share data)
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Resident fees and services | $ | 3,074,022 | $ | 3,448,175 | $ | 3,234,852 | ||||||||||||||
| Rental income | 1,443,360 | 1,588,400 | 1,380,422 | |||||||||||||||||
| Interest income | 69,156 | 63,830 | 55,814 | |||||||||||||||||
| Other income | 19,429 | 20,901 | 29,411 | |||||||||||||||||
| Total revenues | 4,605,967 | 5,121,306 | 4,700,499 | |||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Property operating expenses | 2,597,823 | 2,690,042 | 2,433,017 | |||||||||||||||||
| Depreciation and amortization | 1,038,437 | 1,027,073 | 950,459 | |||||||||||||||||
| Interest expense | 514,388 | 555,559 | 526,592 | |||||||||||||||||
| General and administrative expenses | 128,394 | 126,549 | 126,383 | |||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | 11,049 | (4,399) | (4,016) | |||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 47,049 | 84,155 | 16,097 | |||||||||||||||||
| Provision for loan losses | 94,436 | 18,690 | — | |||||||||||||||||
| Impairment of assets | 135,608 | 28,133 | 115,579 | |||||||||||||||||
| Other expenses | 70,335 | 52,612 | 112,898 | |||||||||||||||||
| Total expenses | 4,637,519 | 4,578,414 | 4,277,009 | |||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | (31,552) | 542,892 | 423,490 | |||||||||||||||||
| Income tax (expense) benefit | (9,968) | (2,957) | (8,674) | |||||||||||||||||
| Income (loss) from unconsolidated entities | (8,083) | 42,434 | (641) | |||||||||||||||||
| Gain (loss) on real estate dispositions, net | 1,088,455 | 748,041 | 415,575 | |||||||||||||||||
| Income (loss) from continuing operations | 1,038,852 | 1,330,410 | 829,750 | |||||||||||||||||
| Net income | 1,038,852 | 1,330,410 | 829,750 | |||||||||||||||||
| Less: Preferred stock dividends | — | — | 46,704 | |||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests(1) | 60,008 | 97,978 | 24,796 | |||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 978,844 | $ | 1,232,432 | $ | 758,250 | ||||||||||||||
| Average number of common shares outstanding: | ||||||||||||||||||||
| Basic | 415,451 | 401,845 | 373,620 | |||||||||||||||||
| Diluted | 417,387 | 403,808 | 375,250 | |||||||||||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic: | ||||||||||||||||||||
| Income (loss) from continuing operations | $ | 2.50 | $ | 3.31 | $ | 2.22 | ||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 2.36 | $ | 3.07 | $ | 2.03 | ||||||||||||||
| Diluted: | ||||||||||||||||||||
| Income (loss) from continuing operations | $ | 2.49 | $ | 3.29 | $ | 2.21 | ||||||||||||||
Net income (loss) attributable to common stockholders(2) | $ | 2.33 | $ | 3.05 | $ | 2.02 | ||||||||||||||
(1) Includes amounts attributable to redeemable noncontrolling interests
(2) Includes adjustment to the numerator for income (loss) attributable to OP unitholders .
See accompanying notes
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Net income | $ | 1,038,852 | $ | 1,330,410 | $ | 829,750 | ||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||
Unrecognized actuarial gain (loss) | — | 540 | 344 | |||||||||||||||||
Foreign currency translation gain (loss) | 103,612 | 161,915 | (253,022) | |||||||||||||||||
Derivative and financial instruments designated as hedges gain (loss) | (134,369) | (131,120) | 211,390 | |||||||||||||||||
| Total other comprehensive income (loss) | (30,757) | 31,335 | (41,288) | |||||||||||||||||
| Total comprehensive income (loss) | 1,008,095 | 1,361,745 | 788,462 | |||||||||||||||||
Less: Total comprehensive income (loss) attributable to noncontrolling interests(1) | 65,598 | 111,701 | 1,812 | |||||||||||||||||
| Total comprehensive income (loss) attributable to common stockholders | $ | 942,497 | $ | 1,250,044 | $ | 786,650 | ||||||||||||||
(1) Includes amounts attributable to redeemable noncontrolling interests.
See accompanying notes
73
CONSOLIDATED STATEMENTS OF EQUITY
WELLTOWER INC. AND SUBSIDIARIES
| (in thousands) | Preferred Stock | Common Stock | Capital in Excess of Par Value | Treasury Stock | Cumulative Net Income | Cumulative Dividends | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2017 | $ | 718,503 | $ | 372,449 | $ | 17,663,351 | $ | (64,559) | $ | 5,316,580 | $ | (9,471,712) | $ | (111,465) | $ | 502,305 | $ | 14,925,452 | ||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 804,954 | 25,065 | 830,019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (18,304) | (22,984) | (41,288) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | 788,731 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in noncontrolling interests | (43,101) | 449,879 | 406,778 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts related to issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures | 188 | 27,901 | (3,940) | 24,149 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds from issuance of common stock | 11,828 | 776,506 | 788,334 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of preferred stock | (5) | 5 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends paid: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends | (1,300,141) | (1,300,141) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | (46,704) | (46,704) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2018 | 718,498 | 384,465 | 18,424,662 | (68,499) | 6,121,534 | (10,818,557) | (129,769) | 954,265 | 15,586,599 | |||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 1,232,432 | 67,365 | 1,299,797 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | 17,612 | 13,440 | 31,052 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | 1,330,849 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in noncontrolling interests | 3,583 | (68,887) | (65,304) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts related to issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures | 162 | 25,163 | (10,456) | 14,869 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds from issuance of common stock | 13,666 | 1,030,925 | 1,044,591 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of preferred stock | (718,498) | 12,712 | 705,786 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends paid: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends | (1,404,977) | (1,404,977) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2019 | — | 411,005 | 20,190,119 | (78,955) | 7,353,966 | (12,223,534) | (112,157) | 966,183 | 16,506,627 | |||||||||||||||||||||||||||||||||||||||||||||||
| Cumulative change in accounting principle (Note 2) | (5,212) | (5,212) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at January 1, 2020 (as adjusted for change in accounting principle) | — | 411,005 | 20,190,119 | (78,955) | 7,348,754 | (12,223,534) | (112,157) | 966,183 | 16,501,415 | |||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 978,844 | 98,910 | 1,077,754 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (36,347) | 5,493 | (30,854) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | 1,046,900 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in noncontrolling interests | 18,158 | (161,733) | (143,575) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts related to issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures | 622 | 27,666 | (17,879) | 10,409 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds from issuance of common stock | 7,064 | 587,202 | 594,266 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (7,656) | (7,656) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends paid: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends | (1,120,187) | (1,120,187) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2020 | $ | — | $ | 418,691 | $ | 20,823,145 | $ | (104,490) | $ | 8,327,598 | $ | (13,343,721) | $ | (148,504) | $ | 908,853 | $ | 16,881,572 | ||||||||||||||||||||||||||||||||||||||
See accompanying notes
74
CONSOLIDATED STATEMENTS OF CASH FLOWS
WELLTOWER INC. AND SUBSIDIARIES
(in thousands)
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Operating activities: | ||||||||||||||||||||
| Net income | $ | 1,038,852 | $ | 1,330,410 | $ | 829,750 | ||||||||||||||
| Adjustments to reconcile net income to net cash provided from (used in) operating | ||||||||||||||||||||
| activities: | ||||||||||||||||||||
| Depreciation and amortization | 1,038,437 | 1,027,073 | 950,459 | |||||||||||||||||
| Other amortization expenses | 13,213 | 16,827 | 17,000 | |||||||||||||||||
| Provision for loan losses | 94,436 | 18,690 | — | |||||||||||||||||
| Impairment of assets | 135,608 | 28,133 | 115,579 | |||||||||||||||||
| Stock-based compensation expense | 28,318 | 25,047 | 27,646 | |||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | 11,049 | (4,399) | (4,016) | |||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 47,049 | 84,155 | 16,097 | |||||||||||||||||
| Loss (income) from unconsolidated entities | 8,083 | (42,434) | 641 | |||||||||||||||||
| Rental income less than ( in excess of) cash received | 60,254 | (106,331) | (32,857) | |||||||||||||||||
| Amortization related to above (below) market leases, net | (1,870) | (676) | 2,608 | |||||||||||||||||
| Loss (gain) on real estate dispositions, net | (1,088,455) | (748,041) | (415,575) | |||||||||||||||||
| Distributions by unconsolidated entities | 11,601 | — | 21 | |||||||||||||||||
| Increase (decrease) in accrued expenses and other liabilities | 22,764 | (29,068) | 70,762 | |||||||||||||||||
| Decrease (increase) in receivables and other assets | (54,583) | (63,418) | 5,829 | |||||||||||||||||
| Net cash provided from (used in) operating activities | 1,364,756 | 1,535,968 | 1,583,944 | |||||||||||||||||
| Investing activities: | ||||||||||||||||||||
| Cash disbursed for acquisitions, net of cash acquired | (903,756) | (3,959,683) | (3,560,360) | |||||||||||||||||
| Cash disbursed for capital improvements to existing properties | (244,989) | (328,824) | (266,183) | |||||||||||||||||
| Cash disbursed for construction in progress | (201,336) | (323,488) | (160,706) | |||||||||||||||||
| Capitalized interest | (17,472) | (15,272) | (7,905) | |||||||||||||||||
| Investment in loans receivable | (247,543) | (119,699) | (112,048) | |||||||||||||||||
| Principal collected on loans receivable | 31,548 | 127,706 | 203,935 | |||||||||||||||||
| Other investments, net of payments | 7,726 | (8,282) | (44,535) | |||||||||||||||||
| Contributions to unconsolidated entities | (411,154) | (279,631) | (136,854) | |||||||||||||||||
| Distributions by unconsolidated entities | 48,195 | 216,231 | 90,916 | |||||||||||||||||
| Proceeds from (payments on) derivatives | (13,319) | (8,499) | 65,399 | |||||||||||||||||
| Proceeds from sales of real property | 4,300,028 | 2,650,650 | 1,541,870 | |||||||||||||||||
| Net cash provided from (used in) investing activities | 2,347,928 | (2,048,791) | (2,386,471) | |||||||||||||||||
| Financing activities: | ||||||||||||||||||||
| Net increase (decrease) under unsecured credit facility and commercial paper | (1,587,597) | 440,597 | 428,000 | |||||||||||||||||
| Proceeds from issuance of senior unsecured notes | 1,588,549 | 3,974,559 | 2,824,176 | |||||||||||||||||
| Payments to extinguish senior unsecured notes | (566,248) | (3,335,290) | (1,450,000) | |||||||||||||||||
| Net proceeds from the issuance of secured debt | 62,055 | 343,696 | 45,447 | |||||||||||||||||
| Payments on secured debt | (694,995) | (284,433) | (362,841) | |||||||||||||||||
| Net proceeds from the issuance of common stock | 595,313 | 1,056,125 | 789,575 | |||||||||||||||||
| Repurchase of common stock | (7,656) | — | — | |||||||||||||||||
| Payments for deferred financing costs and prepayment penalties | (39,087) | (84,142) | (29,691) | |||||||||||||||||
Contributions by noncontrolling interests(1) | 44,023 | 55,365 | 39,207 | |||||||||||||||||
Distributions to noncontrolling interests(1) | (333,489) | (172,940) | (109,871) | |||||||||||||||||
| Cash distributions to stockholders | (1,119,232) | (1,400,712) | (1,348,863) | |||||||||||||||||
| Other financing activities | (22,494) | (15,675) | (6,771) | |||||||||||||||||
| Net cash provided from (used in) financing activities | (2,080,858) | 577,150 | 818,368 | |||||||||||||||||
| Effect of foreign currency translation on cash and cash equivalents and restricted cash | 3,451 | 5,310 | (9,015) | |||||||||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 1,635,277 | 69,637 | 6,826 | |||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 385,766 | 316,129 | 309,303 | |||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 2,021,043 | $ | 385,766 | $ | 316,129 | ||||||||||||||
| Supplemental cash flow information: | ||||||||||||||||||||
| Interest paid | $ | 508,454 | $ | 574,536 | $ | 501,404 | ||||||||||||||
| Income taxes paid | 13,671 | 14,338 | 2,250 | |||||||||||||||||
(1) Includes amounts attributable to redeemable noncontrolling interests.
See accompanying notes.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Business
Welltower Inc., an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower™, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States (“U.S.”), Canada and the United Kingdom (“U.K.”), consisting of seniors housing and post-acute communities and outpatient medical properties.
2. Accounting Policies and Related Matters
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of our wholly-owned subsidiaries and joint venture (“JV”) entities that we control, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation. At inception of JV transactions, we identify entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary. Accounting Standards Codification Topic 810, Consolidations (“ASC 810”), requires enterprises to perform a qualitative approach to determining whether or not a VIE will need to be consolidated. This evaluation is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance. For investments in JVs, U.S. GAAP may preclude consolidation by the sole general partner in certain circumstances based on the type of rights held by the limited partner(s). We assess the limited partners’ rights and their impact on our consolidation conclusions, and we reassess if there is a change to the terms or in the exercisability of the rights of the limited partners, the sole general partner increases or decreases its ownership of limited partnership interests, or there is an increase or decrease in the number of outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited liability companies.
Revenue Recognition
For our Triple-net and Outpatient Medical segments, a significant source of our revenue is generated through leasing arrangements. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Leases in our Outpatient Medical portfolio typically include some form of operating expense reimbursement by the tenant. Certain payments made to operators are treated as lease incentives and amortized as a reduction of revenue over the lease term.
For our Seniors Housing Operating segment, revenue from resident fees and services is predominantly service-based, and generally is recognized monthly as services are provided. Agreements with residents generally have a term of one year and are cancellable by the resident with 30 days’ notice. Management contracts are present in some of our joint venture agreements to provide asset and property management, leasing, marketing and other services.
Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk.
We recognize gains on the disposition of real estate when the recognition criteria have been met, generally at the time the risks and rewards and title have transferred and we no longer have substantial continuing involvement with the real estate sold. We recognize losses from disposition of real estate when known.
Cash and Cash Equivalents
Cash and cash equivalents consist of all highly liquid investments with an original maturity of three months or less.
Restricted Cash
Restricted cash primarily consists of amounts held by lenders to provide future payments for real estate taxes, insurance, tenant and capital improvements, amounts held in escrow relating to transactions we are entitled to receive over a period of time as outlined in the escrow agreement and net proceeds from property sales that were executed as tax-deferred dispositions under Internal Revenue Code (“IRC”) Section 1031.
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Deferred Loan Expenses
Deferred loan expenses are costs incurred by us in connection with the issuance, assumption and amendments of debt arrangements. Deferred loan expenses related to debt instruments, excluding the primary unsecured credit facility, are recorded as a reduction of the related debt liability. Deferred loan expenses related to the primary unsecured credit facility are included in other assets. We amortize these costs over the term of the debt using the straight-line method, which approximates the effective interest method.
Investments in Unconsolidated Entities
Investments in entities that we do not consolidate but have the ability to exercise significant influence over operating and financial policies are reported under the equity method of accounting. Under the equity method, our share of the investee’s earnings or losses is included in our consolidated results of operations. The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest inclusive of transaction costs. To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded.
Equity Securities
Equity securities are measured at fair value with gains and losses recognized in loss (gain) on derivatives and financial instruments, net in the Consolidated Statements of Comprehensive Income.
Redeemable Noncontrolling Interests
Certain noncontrolling interests are redeemable at fair value. Accordingly, we record the carrying amount of the noncontrolling interests at the greater of (i) the initial carrying amount, increased or decreased for the noncontrolling interest’s share of net income or loss and its share of other comprehensive income or loss, and dividends or (ii) the redemption value. If it is probable that the interests will be redeemed in the future, we accrete the carrying value to the redemption value over the period until expected redemption, currently a weighted-average period of approximately two years. In accordance with ASC 810, the redeemable noncontrolling interests are classified outside of permanent equity, as a mezzanine item, on the balance sheet. At December 31, 2020, the current redemption value of redeemable noncontrolling interests exceeded the carrying value of $343,490,000 by $15,696,000.
We entered into certain DownREIT partnerships which give a real estate seller the ability to exchange its property on a tax deferred basis for equity membership interests (“OP units”). The OP units may be redeemed any time following the first anniversary of the date of issuance at the election of the holders for one share of our common stock per unit or, at our option, cash.
Real Property Owned
Real estate acquisitions are generally classified as asset acquisitions for which we record tangible assets and identifiable intangible assets and liabilities at cost on a relative fair value basis. Liabilities assumed and any associated noncontrolling interests are reflected at fair value. Tangible assets primarily consist of land, buildings and improvements.
Identifiable intangible assets and liabilities consist primarily of the above or below market component of in-place leases and the value associated with the presence of in-place leases. The value allocable to the above or below market component of the acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above market leases are included in acquired lease intangibles and below market leases are included in other liabilities on the balance sheet and are amortized to rental income over the remaining terms of the respective leases or lease-up period.
The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values for in-place tenants based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The total amount of other intangible assets acquired is further allocated to in-place lease values for in-place residents with such value representing (i) value associated with lost revenue related to tenant reimbursable operating costs that would be incurred in an assumed re-leasing period, and (ii) value associated with lost rental revenue from existing leases during an assumed re-leasing period. This intangible asset is amortized over the remaining life of the lease or the assumed re-leasing period.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Real property developed by us is recorded at cost, including the capitalization of construction period interest. These properties are depreciated on a straight-line basis over their estimated useful lives which range from 15 to 40 years for buildings and 5 to 15 years for improvements. We consider costs incurred in conjunction with re-leasing properties, including tenant improvements and lease commissions, to represent the acquisition of productive assets and, accordingly, such costs are reflected as investment activities in our Consolidated Statement of Cash Flows.
The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if facts and circumstances suggest that the assets may be impaired or that the depreciable life may need to be changed. We consider external factors relating to each asset and the existence of a master lease which may link the cash flows of an individual asset to a larger portfolio of assets leased to the same tenant. If these factors and the projected undiscounted cash flows of the assets over the remaining depreciation period indicate that the assets will not be recoverable, the carrying value is reduced to the estimated fair market value. In addition, we are exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health care industries. A downturn in the real estate industry could adversely affect the value of our properties and our ability to sell properties for a price or on terms acceptable to us. Additionally, properties that meet the held for sale criteria are recorded at the lesser of fair value less costs to sell or the carrying value.
Expenditures for repairs and maintenance are expensed as incurred.
Capitalization of Construction Period Interest
We capitalize interest costs associated with funds used for the construction of properties owned by us. The amount capitalized is based upon the balance outstanding during the construction period using the rate of interest which approximates our company-wide cost of financing. Our interest expense reflected in the Consolidated Statements of Comprehensive Income has been reduced by the amounts capitalized.
Loans Receivable
Loans receivable are recorded on our Consolidated Balance Sheets in real estate loans receivable, net of credit allowance, or for non-real estate loans receivable, in receivables and other assets. Real estate loans receivable consists of mortgage loans and other real estate loans which are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in, the related properties, corporate guarantees and/or personal guarantees. Non-real estate loans are generally corporate loans with no real estate backing. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risks.
In Substance Real Estate Investments
We provide loans to third parties for the acquisition, development and construction of real estate. Under these arrangements, it is possible that we will participate in the expected residual profits of the project through the sale, refinancing or acquisition of the property. We evaluate the characteristics of each arrangement, including its risks and rewards, to determine whether they are more similar to those associated with a loan or an investment in real estate. Arrangements with characteristics implying loan classification are presented as real estate loans receivable and result in the recognition of interest income. Arrangements with characteristics implying real estate joint ventures are treated as in substance real estate investments and presented as investments in unconsolidated entities and are accounted for using the equity method. The classification of each arrangement as either a real estate loan receivable or investment in unconsolidated entity involves judgment and relies on various factors, including market conditions, amount and timing of expected residual profits, credit enhancements in the form of guarantees, estimated fair value of the collateral, and significance of borrower equity in the project, among others. The classification of such arrangements is performed at inception, and periodically reassessed when significant changes occur in the circumstances or conditions described above.
Allowance for Credit Losses on Loans Receivable
The allowance for credit losses on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the credit allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments. We evaluate the collectability of our loans receivable based on a combination of credit quality indicators, including, but not limited to, payment status, historical loan charge-offs, financial strength of the borrower and guarantors, and nature, extent, and value of the underlying collateral. A loan is considered to have deteriorated credit quality when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the loan agreement. For those loans we identified as having deteriorated credit quality we determine the amount of credit loss on an individual basis. Placement on non-accrual status may be required. Consistent with this definition, all loans on non-accrual status are deemed to have deteriorated credit quality. To the extent circumstances improve and the risk of collectability is diminished, we may return these loans to income accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance. For the remaining loans we assess credit loss on a collective pool basis and use our historical loss experience for similar loans to determine the reserve for credit losses.
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Goodwill
Goodwill is tested annually for impairment and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill. We have not had any goodwill impairments.
Fair Value of Derivative Instruments
Derivatives are recorded at fair value on the balance sheet as assets or liabilities. The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments. Fair values of our derivatives are estimated by pricing models that consider the forward yield curves and discount rates. The fair value of our forward exchange contracts are estimated by pricing models that consider foreign currency spot rates, forward trade rates and discount rates. Such amounts and the recognition of such amounts are subject to estimates that may change in the future. See Note 12 for additional information.
Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following (in thousands):
| Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | |||||||||||||
| Accounts payable | $ | 101,592 | $ | 58,646 | ||||||||||
| Accrued interest | 112,202 | 104,548 | ||||||||||||
| Other accrued expenses | 41,471 | 71,860 | ||||||||||||
| Unearned revenues | 115,411 | 183,011 | ||||||||||||
| Taxes payable | 99,916 | 97,094 | ||||||||||||
| Other liabilities | 571,002 | 494,323 | ||||||||||||
| Total | $ | 1,041,594 | $ | 1,009,482 | ||||||||||
Federal Income Tax
We have elected to be treated as a REIT under the applicable provisions of the IRC, commencing with our first taxable year, and made no provision for U.S. federal income tax purposes prior to our acquisition of our taxable REIT subsidiaries (“TRSs”). As a result of these as well as subsequent acquisitions, we now record income tax expense or benefit with respect to certain of our entities that are taxed as TRSs under provisions similar to those applicable to regular corporations and not under the REIT provisions. We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our consolidated financial statements or tax returns. Under this method, we determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes a change in our judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes a change in our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur. See Note 19 for additional information.
Foreign Currency
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 Consolidated Balance Sheets.
Earnings Per Share
Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding for the period adjusted for non-vested shares of restricted stock. The computation of diluted earnings per share is similar to basic earnings per share, except that the number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued. Additionally, net income (loss) allocated to OP units (discussed above) has been included in the numerator and redeemable common stock related to the OP units have been included in the denominator for the purpose of computing diluted earnings per share.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reclassifications
Certain amounts in prior years have been reclassified to conform to current year presentation.
Impact of COVID-19 Pandemic
The extent to which the COVID-19 pandemic impacts our operations and those of our operators and tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. The COVID-19 pandemic could have material and adverse effects on our financial condition, results of operations and cash flows in the future, including but not limited to, the following:
•Our Seniors Housing Operating revenues are dependent on occupancy. Declines in occupancy are expected due to heightened move-in criteria and screening, as well as increased mortality rates among seniors. Occupancy within our total Seniors Housing Operating portfolio has declined as follows (unaudited):
| Feb. | Mar. | Apr. | May | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Spot occupancy (1) | 85.6 | % | 84.9 | % | 82.6 | % | 80.9 | % | 79.9 | % | 79.3 | % | 78.7 | % | 78.4 | % | 78.0 | % | 77.3 | % | 76.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Sequential occupancy change | (0.7) | % | (2.3) | % | (1.7) | % | (1.0) | % | (0.6) | % | (0.6) | % | (0.3) | % | (0.4) | % | (0.7) | % | (1.1) | % | ||||||||||||||||||||||||||||||||||||||||||||||||
(1) Spot occupancy represents approximate month end occupancy for properties in operation as of February 29, 2020, including unconsolidated properties but excluding acquisitions, dispositions and development conversions since this date.
•Increased Seniors Housing Operating expenses are expected to continue until the pandemic subsides. We experienced incremental operational costs, net of reimbursements, of $78,792,000 related to consolidated properties for the year ended December 31, 2020, included in property operating expenses. These expenses were incurred as a result of the introduction of public health measures and other regulations affecting our properties, as well as additional health and safety measures adopted by us and our operators related to the COVID-19 pandemic, including increases in labor and property cleaning expenses and expenditures related to our efforts to procure personal protective equipment ("PPE") and supplies, net of reimbursements. Certain new expenses incurred since the start of the pandemic may continue on an ongoing basis as part of new health and safety protocols.
•In 2020 applications were made for amounts under Phase 2 and Phase 3 of the Provider Relief Fund related to our Seniors Housing Operating portfolio following the announcement from the Department of Health and Human Services that it expanded the eligibility of the Coronavirus Aid Relief, and Economic Security Act (“CARES Act”) Provider Relief Fund to include assisted living facilities. During the fourth quarter, we received Provider Relief Funds of approximately $9 million which was recognized as a reduction to property operating expenses. To date in 2021, we have received approximately $34 million of Provider Relief Funds.
•Our Triple-net operators are experiencing similar occupancy declines and expense increases, however, long-term/post-acute care facilities are generally experiencing a higher degree of occupancy declines. These factors may impact our Triple-net operators' ability to pay rent and contractual obligations. Many of our Triple-net operators have received funds under the CARES Act Paycheck Protection Program. In addition, operators of long-term/post-acute care facilities have generally received funds from Phase 1 of the Provider Relief Fund and operators of assisted living facilities are receiving funds from Phase 2 of the Provider Relief Fund. Accordingly, collection of Triple-net rent due during the COVID-19 pandemic to date (from March to December) has generally been consistent with historical collection rates and no significant rent concessions or deferrals have been made.
•Outpatient Medical rent collections through March were generally consistent with pre COVID-19 levels. During the second quarter we executed short term rent deferrals with certain Outpatient Medical tenants which in most cases were required to be repaid by year end. Since then we have collected approximately 99% of Outpatient Medical rent due in the second half of the year, with uncollected amounts primarily attributable to local jurisdictions with COVID-19 related ordinances providing temporary rent relief to tenants. Furthermore, collections of deferred rent due under executed deferrals was over 99%. To the extent that deferred rent is not repaid as expected, or the prolonged impact of the COVID-19 pandemic causes operators or tenants to seek further modifications of their lease agreements, we may recognize reductions in revenue and increases in uncollectible receivables.
•Assessing properties for potential impairment involves subjectivity in determining if impairment indicators are present and in estimating the future undiscounted cash flows or estimated fair value of the asset. Key assumptions are made in these assessments including the estimation of future rental revenues, occupancy, operating expenses, capitalization rates and the ability and intent to hold the respective asset. All of these assumptions are significantly affected by our expectations of future market or economic conditions and can be highly impacted by the uncertainty of the COVID-19 pandemic. We will continue to evaluate the assumptions used in these analyses, changes to which may result in impairments in future periods.
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•The determination of the allowance for credit losses is based on our evaluation of collectability of our loans receivable and includes review of factors such as delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and the value of the underlying collateral. Reduced economic activity severely impacts our borrowers' businesses, financial conditions and liquidity and may hinder their ability to make contractual payments to us, leading to an increase in loans deemed to have deteriorated credit which could result in an increase in the provision for loan losses.
New Accounting Standards
•On January 1, 2020, we adopted ASU 2016-13, “Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). This standard requires a new forward-looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments. In November 2018, the FASB issued an amendment excluding operating lease receivables accounted for under the new leases standard from the scope of the new credit losses standard. ASU 2016-13 primarily impacts our measurement for credit losses related to our real estate and non-real estate loans receivable. In conjunction with our adoption of , we recorded a $5,212,000 increase to our allowance for credit losses on loans receivable (both real estate and non-real estate) with a corresponding adjustment to cumulative net income related to the change in accounting principle. See Note 7 for further details.
•At the FASB's April 8, 2020 Board meeting, the staff acknowledged that the economics of lease concessions that result from a global pandemic may not be aligned with the underlying premise of the modification framework in ASC 842, under which the concession would be recognized over the remainder of the lease term. In a Q&A document, the FASB provided entities with COVID-19 related lease concessions an option to either (1) apply the modification framework for these concessions in accordance with ASC 842 as applicable or (2) account for concessions as if they were made under the enforceable rights included in the original agreement as long as total cash flows resulting from the modified contract are substantially the same or less than cash flows in the original contract. Due to the continuing adverse economic conditions caused by the COVID-19 pandemic, certain tenants and operators have requested rent relief, most often in the form of a short-term rent deferral. Not all requests result in modification of agreements, nor do we intend to forgo our contractual rights under our lease agreements. We evaluate each rent relief request on an individual basis. To date, the majority of rent deferral agreements resulted in two months of full or partial rent relief to be repaid by the end of the year unless local ordinances mandate otherwise. We have elected to apply the accounting relief provided by the FASB to such short-term rent deferrals, and will account for such deferrals as if no change had been made to the original lease contract.
•In August 2020, the FASB issued ASU 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”. This ASU simplifies accounting for convertible instruments and removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. This ASU also simplifies the diluted earnings per share calculation in certain areas and provides updated disclosure requirements. We are currently evaluating the guidance and the impact it may have on our consolidated financial statements.
3. Real Property Acquisitions and Development
The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets and liabilities at cost on a relative fair value basis. Liabilities assumed and any associated noncontrolling interests are reflected at fair value. 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 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. Transaction costs related to asset acquisitions are capitalized as a component of purchase price and all other non-capitalizable costs are reflected in other expenses on our Consolidated Statements of Comprehensive Income.
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The following is a summary of our real property investment activity by segment for the periods presented (in thousands):
| Year Ended December 31, 2020 | ||||||||||||||||||||||||||
| Seniors Housing Operating | Triple-net | Outpatient Medical | Total | |||||||||||||||||||||||
| Land and land improvements | $ | 55,000 | $ | 16,876 | $ | 45,590 | $ | 117,466 | ||||||||||||||||||
| Buildings and improvements | 527,189 | 73,855 | 179,004 | 780,048 | ||||||||||||||||||||||
| Acquired lease intangibles | 28,668 | — | 24,718 | 53,386 | ||||||||||||||||||||||
| Total net real estate assets | 610,857 | 90,731 | 249,312 | 950,900 | ||||||||||||||||||||||
| Receivables and other assets | 746 | — | 268 | 1,014 | ||||||||||||||||||||||
Total assets acquired(1) | 611,603 | 90,731 | 249,580 | 951,914 | ||||||||||||||||||||||
| Accrued expenses and other liabilities | (1,650) | — | (962) | (2,612) | ||||||||||||||||||||||
| Total liabilities assumed | (1,650) | — | (962) | (2,612) | ||||||||||||||||||||||
Noncontrolling interests(2) | (45,546) | — | — | (45,546) | ||||||||||||||||||||||
| Cash disbursed for acquisitions | 564,407 | 90,731 | 248,618 | 903,756 | ||||||||||||||||||||||
| Construction in progress additions | 134,945 | 45,256 | 39,833 | 220,034 | ||||||||||||||||||||||
| Less: Capitalized interest | (10,389) | (3,209) | (3,874) | (17,472) | ||||||||||||||||||||||
Accruals(3) | (1,226) | — | — | (1,226) | ||||||||||||||||||||||
| Cash disbursed for construction in progress | 123,330 | 42,047 | 35,959 | 201,336 | ||||||||||||||||||||||
| Capital improvements to existing properties | 107,379 | 76,625 | 60,985 | 244,989 | ||||||||||||||||||||||
Total cash invested in real property, net of cash acquired | $ | 795,116 | $ | 209,403 | $ | 345,562 | $ | 1,350,081 | ||||||||||||||||||
(1) Excludes $580,000 of unrestricted and restricted cash acquired.
(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current period.
| Year Ended December 31, 2019 | ||||||||||||||||||||||||||
| Seniors Housing Operating | Triple-net | Outpatient Medical | Total | |||||||||||||||||||||||
| Land and land improvements | $ | 154,470 | $ | 24,097 | $ | 293,933 | $ | 472,500 | ||||||||||||||||||
| Buildings and improvements | 1,518,748 | 203,282 | 1,954,928 | 3,676,958 | ||||||||||||||||||||||
| Acquired lease intangibles | 76,009 | — | 183,921 | 259,930 | ||||||||||||||||||||||
| Real property held for sale | 17,435 | — | — | 17,435 | ||||||||||||||||||||||
| Construction in progress | 36,174 | — | — | 36,174 | ||||||||||||||||||||||
| Right of use assets, net | — | — | 58,377 | 58,377 | ||||||||||||||||||||||
| Total net real estate assets | 1,802,836 | 227,379 | 2,491,159 | 4,521,374 | ||||||||||||||||||||||
| Receivables and other assets | 15,634 | — | 1,586 | 17,220 | ||||||||||||||||||||||
Total assets acquired(1) | 1,818,470 | 227,379 | 2,492,745 | 4,538,594 | ||||||||||||||||||||||
| Secured debt | (194,408) | — | (206,754) | (401,162) | ||||||||||||||||||||||
| Lease liabilities | — | — | (47,740) | (47,740) | ||||||||||||||||||||||
| Accrued expenses and other liabilities | (12,024) | — | (32,893) | (44,917) | ||||||||||||||||||||||
| Total liabilities assumed | (206,432) | — | (287,387) | (493,819) | ||||||||||||||||||||||
Noncontrolling interests(2) | (67,987) | (4,015) | (1,201) | (73,203) | ||||||||||||||||||||||
Non-cash acquisition related activity(3) | (11,889) | — | — | (11,889) | ||||||||||||||||||||||
| Cash disbursed for acquisitions | 1,532,162 | 223,364 | 2,204,157 | 3,959,683 | ||||||||||||||||||||||
| Construction in progress additions | 227,018 | 61,414 | 60,884 | 349,316 | ||||||||||||||||||||||
| Less: Capitalized interest | (8,889) | (2,385) | (3,998) | (15,272) | ||||||||||||||||||||||
Accruals(4) | — | — | (1,035) | (1,035) | ||||||||||||||||||||||
| Cash disbursed for construction in progress | 218,129 | 59,029 | 55,851 | 333,009 | ||||||||||||||||||||||
| Capital improvements to existing properties | 260,413 | 17,426 | 50,985 | 328,824 | ||||||||||||||||||||||
| Total cash invested in real property, net of cash acquired | $ | 2,010,704 | $ | 299,819 | $ | 2,310,993 | $ | 4,621,516 | ||||||||||||||||||
(1) Excludes $2,090,000 of unrestricted and restricted cash acquired.
(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) Relates to the acquisition of assets previously recognized as investments in unconsolidated entities.
(4) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current period.
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| Year Ended December 31, 2018 | ||||||||||||||||||||||||||
| Seniors Housing Operating | Triple-net | Outpatient Medical | Total | |||||||||||||||||||||||
| Land and land improvements | $ | 51,440 | $ | 413,588 | $ | 77,239 | $ | 542,267 | ||||||||||||||||||
| Buildings and improvements | 621,731 | 2,242,884 | 478,740 | 3,343,355 | ||||||||||||||||||||||
| Acquired lease intangibles | 69,504 | 9,690 | 50,813 | 130,007 | ||||||||||||||||||||||
| Real property held for sale | — | 396,265 | 22,032 | 418,297 | ||||||||||||||||||||||
| Total net real estate assets | 742,675 | 3,062,427 | 628,824 | 4,433,926 | ||||||||||||||||||||||
| Receivables and other assets | 1,492 | 1,354 | 1,185 | 4,031 | ||||||||||||||||||||||
Total assets acquired(1) | 744,167 | 3,063,781 | 630,009 | 4,437,957 | ||||||||||||||||||||||
| Secured debt | (134,752) | — | (169,156) | (303,908) | ||||||||||||||||||||||
| Accrued expenses and other liabilities | (18,463) | (13,199) | (14,896) | (46,558) | ||||||||||||||||||||||
| Total liabilities assumed | (153,215) | (13,199) | (184,052) | (350,466) | ||||||||||||||||||||||
Noncontrolling interests(2) | (14,390) | (512,741) | — | (527,131) | ||||||||||||||||||||||
| Cash disbursed for acquisitions | 576,562 | 2,537,841 | 445,957 | 3,560,360 | ||||||||||||||||||||||
| Construction in progress additions | 82,621 | 55,558 | 26,565 | 164,744 | ||||||||||||||||||||||
| Less: Capitalized interest | (3,190) | (2,238) | (2,477) | (7,905) | ||||||||||||||||||||||
Accruals(3) | — | — | (339) | (339) | ||||||||||||||||||||||
| Cash disbursed for construction in progress | 79,431 | 53,320 | 23,749 | 156,500 | ||||||||||||||||||||||
| Capital improvements to existing properties | 201,001 | 10,046 | 55,136 | 266,183 | ||||||||||||||||||||||
| Total cash invested in real property, net of cash acquired | $ | 856,994 | $ | 2,601,207 | $ | 524,842 | $ | 3,983,043 | ||||||||||||||||||
(1) Excludes $395,397,000 of unrestricted and restricted cash acquired.
(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current period.
Acquisition of Quality Care Properties
On July 26, 2018, we completed the acquisition of Quality Care Properties Inc. ("QCP"), with QCP shareholders receiving $20.75 of cash for each share of QCP common stock and all existing QCP debt was repaid upon closing. Prior to the acquisition, ProMedica Health System ("ProMedica") completed the acquisition of HCR ManorCare. Immediately following the acquisition of QCP, we formed an 80/20 joint venture with ProMedica to own the real estate associated with the 218 seniors housing properties leased to ProMedica under a lease agreement with the following key terms: (i) 15-year absolute triple-net master lease with three 5-year renewal options; (ii) initial annual cash rent of $179 million with a year one escalator of 1.375% and 2.75% annual escalators thereafter; and (iii) full corporate guarantee of ProMedica. Additionally, we acquired 59 seniors housing properties classified as held for sale and leased to ProMedica under a non-yielding lease, 12 seniors housing properties and one surgery center classified as held for sale and leased to operators under existing triple-net leases, 14 seniors housing properties leased to operators under existing triple-net leases and one multi-tenant medical office building leased to various tenants. The aggregate consideration to acquire the QCP shares and repay outstanding QCP debt was approximately $3.5 billion.
We concluded that the QCP acquisition met the definition of an asset acquisition under ASU 2017-01, "Clarifying the Definition of a Business". The following table presents the purchase price calculation and the allocation to assets acquired and liabilities assumed based upon their relative fair value:
| (In thousands) | ||||||||
| Land and land improvements | $ | 417,983 | ||||||
| Buildings and improvements | 2,253,451 | |||||||
| Acquired lease intangibles | 12,820 | |||||||
| Real property held for sale | 418,297 | |||||||
| Cash and cash equivalents | 381,913 | |||||||
| Restricted cash | 4,981 | |||||||
| Receivables and other assets | 1,354 | |||||||
| Total assets acquired | 3,490,799 | |||||||
| Accrued expenses and other liabilities | (13,199) | |||||||
| Total liabilities assumed | (13,199) | |||||||
| Noncontrolling interests | (512,741) | |||||||
| Net assets acquired | $ | 2,964,859 | ||||||
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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, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||
| Development projects: | ||||||||||||||||||||
| Seniors Housing Operating | $ | 93,188 | $ | 28,117 | $ | 86,931 | ||||||||||||||
| Triple-net | 75,149 | — | 90,055 | |||||||||||||||||
| Outpatient Medical | 43,493 | 21,006 | 11,358 | |||||||||||||||||
| Total development projects | 211,830 | 49,123 | 188,344 | |||||||||||||||||
| Expansion projects | 48,600 | — | 20,029 | |||||||||||||||||
| Total construction in progress conversions | $ | 260,430 | $ | 49,123 | $ | 208,373 | ||||||||||||||
4. Real Estate Intangibles
The following is a summary of our real estate intangibles, excluding those classified as held for sale, as of the dates indicated (dollars in thousands):
| December 31, 2020 | December 31, 2019 | |||||||||||||
| Assets: | ||||||||||||||
| In place lease intangibles | $ | 1,406,705 | $ | 1,513,836 | ||||||||||
| Above market tenant leases | 52,621 | 59,540 | ||||||||||||
| Lease commissions | 40,704 | 43,675 | ||||||||||||
| Gross historical cost | 1,500,030 | 1,617,051 | ||||||||||||
| Accumulated amortization | (1,177,513) | (1,181,158) | ||||||||||||
| Net book value | $ | 322,517 | $ | 435,893 | ||||||||||
| Weighted-average amortization period in years | 10.5 | 10.3 | ||||||||||||
| Liabilities: | ||||||||||||||
| Below market tenant leases | $ | 77,851 | $ | 99,035 | ||||||||||
| Accumulated amortization | (40,871) | (49,390) | ||||||||||||
| Net book value | $ | 36,980 | $ | 49,645 | ||||||||||
| Weighted-average amortization period in years | 8.3 | 8.6 | ||||||||||||
The following is a summary of real estate intangible amortization income (expense) for the periods presented (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Rental income related to (above)/below market tenant leases, net | $ | 1,710 | $ | 508 | $ | (1,269) | ||||||||||||||
| Amortization related to in place lease intangibles and lease commissions | (121,004) | (135,047) | (122,515) | |||||||||||||||||
The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):
| Assets | Liabilities | |||||||||||||
| 2021 | $ | 78,160 | $ | 7,993 | ||||||||||
| 2022 | 43,726 | 7,320 | ||||||||||||
| 2023 | 34,071 | 5,158 | ||||||||||||
| 2024 | 26,524 | 3,049 | ||||||||||||
| 2025 | 21,324 | 2,482 | ||||||||||||
| Thereafter | 118,712 | 10,978 | ||||||||||||
| Totals | $ | 322,517 | $ | 36,980 | ||||||||||
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5. Dispositions, Real Property Held for Sale and Impairment
We periodically sell properties for various reasons, including favorable market conditions, the exercise of tenant purchase options or reduction of concentrations (e.g. property type, relationship or geography). At December 31, 2020, four Seniors Housing Operating, one Triple-net and ten Outpatient Medical properties with an aggregate net real estate balance of $216,613,000 were classified as held for sale for which we expect gross sales proceeds of approximately $276,363,000. In addition to the real property balances held for sale, net other assets and (liabilities) of $35,811,000 are included in the Consolidated Balance Sheets related to held for sale properties.
During the year ended December 31, 2020, we recorded impairment charges of $87,873,000 related to 15 Seniors Housing Operating and one Triple-net properties which were disposed of or classified as held for sale for which the carrying value exceeded the fair values, less estimated costs to sell. Additionally, during the year ended December 31, 2020, we recorded $47,735,000 of impairment charges related to six Seniors Housing Operating and four Triple-net properties that were held for use in which the carrying value exceed the fair value. The following is a summary of our real property disposition activity for the periods presented (in thousands):
| Year Ended | ||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||
| Real estate dispositions: | ||||||||||||||||||||
| Seniors Housing Operating | $ | 1,289,769 | $ | 1,232,816 | $ | 36,627 | ||||||||||||||
| Triple-net | 51,666 | 667,632 | 835,093 | |||||||||||||||||
| Outpatient Medical | 1,755,864 | 482 | 253,397 | |||||||||||||||||
| Total dispositions | 3,097,299 | 1,900,930 | 1,125,117 | |||||||||||||||||
| Gain (loss) on real estate dispositions, net | 1,088,455 | 748,041 | 415,575 | |||||||||||||||||
| Net other assets (liabilities) disposed | 114,274 | 1,679 | 1,178 | |||||||||||||||||
| Proceeds from real estate dispositions | $ | 4,300,028 | $ | 2,650,650 | $ | 1,541,870 | ||||||||||||||
Operating results attributable to properties sold or classified as held for sale which do not meet the definition of discontinued operations, are not reclassified on our Consolidated Statements of Comprehensive Income. The following represents the activity related to these properties for the periods presented (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Total revenues | $ | 257,089 | $ | 712,529 | $ | 916,896 | ||||||||||||||
| Expenses: | ||||||||||||||||||||
| Interest expense | 6,665 | 18,506 | 18,801 | |||||||||||||||||
| Property operating expenses | 134,119 | 375,327 | 495,770 | |||||||||||||||||
| Provision for depreciation | 55,114 | 138,041 | 189,909 | |||||||||||||||||
| Total expenses | 195,898 | 531,874 | 704,480 | |||||||||||||||||
| Income (loss) from real estate dispositions, net | $ | 61,191 | $ | 180,655 | $ | 212,416 | ||||||||||||||
6. Leases
We lease land, buildings, office space and certain equipment. Many of our leases include a renewal option to extend the term from to 25 years or more. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities. As most of our leases do not provide a rate implicit in the lease agreement, we use our incremental borrowing rate available at lease commencement to determine the present value of lease payments. The incremental borrowing rates were determined using our longer term borrowing rates (actual pricing through 30 years, as well as other longer-term market rates).
We sublease certain real estate to a third party. Our sublease portfolio consists of a finance lease for seven buildings which are subleased to Genesis Healthcare.
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The components of lease expense were as follows for the periods presented (in thousands):
| Year Ended | ||||||||||||||||||||
| Classification | December 31, 2020 | December 31, 2019 | ||||||||||||||||||
Operating lease cost: (1) | ||||||||||||||||||||
| Real estate lease expense | Property operating expenses | $ | 23,472 | $ | 25,166 | |||||||||||||||
| Non-real estate investment lease expense | General and administrative expenses | 4,745 | 1,654 | |||||||||||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of leased assets | Property operating expenses | 8,203 | 7,795 | |||||||||||||||||
| Interest on lease liabilities | Interest expense | 6,411 | 4,748 | |||||||||||||||||
| Sublease income | Rental income | (4,173) | (4,173) | |||||||||||||||||
| Total | $ | 38,658 | $ | 35,190 | ||||||||||||||||
(1) Includes short-term leases which are immaterial.
Maturities of lease liabilities as of December 31, 2020 are as follows (in thousands):
| Operating Leases | Finance Leases | |||||||||||||
| 2021 | $ | 20,316 | $ | 8,777 | ||||||||||
| 2022 | 19,051 | 8,587 | ||||||||||||
| 2023 | 19,082 | 69,439 | ||||||||||||
| 2024 | 18,380 | 1,491 | ||||||||||||
| 2025 | 15,575 | 1,459 | ||||||||||||
| Thereafter | 910,134 | 107,674 | ||||||||||||
| Total lease payments | 1,002,538 | 197,427 | ||||||||||||
| Less: Imputed interest | (691,374) | (90,325) | ||||||||||||
| Total present value of lease liabilities | $ | 311,164 | $ | 107,102 | ||||||||||
Supplemental balance sheet information related to leases was as follows for the periods presented (in thousands, except lease terms and discount rate):
| Classification | December 31, 2020 | December 31, 2019 | |||||||||||||||
| Right of use assets: | |||||||||||||||||
| Operating leases - real estate | Right of use assets, net | $ | 310,017 | $ | 374,217 | ||||||||||||
| Finance leases - real estate | Right of use assets, net | 155,849 | 162,216 | ||||||||||||||
| Real estate right of use assets, net | 465,866 | 536,433 | |||||||||||||||
| Operating leases - non-real estate investments | Receivables and other assets | 9,624 | 12,474 | ||||||||||||||
| Total right of use assets, net | $ | 475,490 | $ | 548,907 | |||||||||||||
| Lease liabilities: | |||||||||||||||||
| Operating leases | $ | 311,164 | $ | 364,803 | |||||||||||||
| Financing leases | 107,102 | 108,890 | |||||||||||||||
| Total lease liabilities | $ | 418,266 | $ | 473,693 | |||||||||||||
| Weighted average remaining lease term (years): | |||||||||||||||||
| Operating leases | 46.9 | 46.0 | |||||||||||||||
| Finance leases | 17.7 | 15.9 | |||||||||||||||
| Weighted average discount rate: | |||||||||||||||||
| Operating leases | 5.02 | % | 5.00 | % | |||||||||||||
| Finance leases | 5.16 | % | 5.18 | % | |||||||||||||
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Supplemental cash flow information related to leases was as follows for the periods indicated (in thousands):
| Year Ended | |||||||||||||||||
| Cash Paid for Amounts Included in the Measurement of Lease Liabilities | Classification | December 31, 2020 | December 31, 2019 | ||||||||||||||
| Operating cash flows from operating leases | Decrease (increase) in receivables and other assets | $ | 9,323 | $ | 6,397 | ||||||||||||
| Operating cash flows from operating leases | Increase (decrease) in accrued expenses and other liabilities | (3,918) | (5,489) | ||||||||||||||
| Operating cash flows from finance leases | Decrease (increase) in receivables and other assets | 8,263 | 10,732 | ||||||||||||||
| Financing cash flows from finance leases | Other financing activities | (3,568) | (3,401) | ||||||||||||||
Substantially all of our operating leases in which we are the lessor contain escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. During the year ended December 31, 2020, we wrote off straight-line recent receivable balances of $146,508,000 relating to leases for which collection of substantially all contractual lease payments was no longer deemed probable. Included in such amounts was $91,025,000 relating to Genesis Healthcare whom noted substantial doubt as to their ability to continue as a going concern in August.
Leases in our Triple-net and Outpatient Medical portfolios typically include some form of operating expense reimbursement by the tenant. For the year ended December 31, 2020, we recognized $1,443,360,000 of rental income related to operating leases, of which $203,348,000 was for variable lease payments, which primarily represents the reimbursement of operating costs such as common area maintenance expenses, utilities, insurance and real estate taxes. For the year ended December 31, 2019, we recognized $1,588,400,000 of rental income related to operating leases, of which $200,564,000 was for variable lease payments.
The following table sets forth the future minimum lease payments receivable for leases in effect at December 31, 2020 (excluding properties in our Seniors Housing Operating portfolio and excluding any operating expense reimbursements) (in thousands):
| 2021 | $ | 1,405,428 | ||||||
| 2022 | 1,390,915 | |||||||
| 2023 | 1,332,520 | |||||||
| 2024 | 1,306,595 | |||||||
| 2025 | 1,236,338 | |||||||
| Thereafter | 7,957,714 | |||||||
| Totals | $ | 14,629,510 | ||||||
7. Loans Receivable
Loans receivable are recorded on our Consolidated Balance Sheets in real estate loans receivable, net of allowance for credit losses, or for non-real estate loans receivable, in receivables and other assets, net of allowance for credit losses. Real estate loans receivable consists of mortgage loans and other real estate loans which are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in, the related properties, corporate guarantees and/or personal guarantees. Non-real estate loans are generally corporate loans with no real estate backing. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of the risk of credit loss. Accrued interest receivable was $15,615,000 and $6,897,000 as of December 31, 2020 and December 31, 2019, respectively, and is included in receivables and other assets on the Consolidated Balance Sheets. The following is a summary of our loans receivable (in thousands):
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| Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | |||||||||||||
| Mortgage loans | $ | 299,430 | $ | 188,062 | ||||||||||
| Other real estate loans | 152,739 | 124,696 | ||||||||||||
| Allowance for credit losses on real estate loans receivable | (8,797) | (42,376) | ||||||||||||
| Real estate loans receivable, net of credit allowance | 443,372 | 270,382 | ||||||||||||
| Non-real estate loans | 455,508 | 362,850 | ||||||||||||
| Allowance for credit losses on non-real estate loans receivable | (215,239) | (25,996) | ||||||||||||
Non-real estate loans receivable, net of credit allowance(1) | 240,269 | 336,854 | ||||||||||||
| Total loans receivable, net of credit allowance | $ | 683,641 | $ | 607,236 | ||||||||||
(1) Included in receivables and other assets on the Consolidated Balance Sheets.
During the year ended December 31, 2020, the real estate collateral associated with one loan was released, therefore, the principal balance of $86,411,000 and related allowance for credit losses of $42,376,000 was reclassified to non-real estate loans.
The following is a summary of our loan activity for the periods presented (in thousands):
| Year Ended | ||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||
| Advances on loans receivable: | ||||||||||||||||||||
| Investments in new loans | $ | 224,078 | $ | 46,824 | $ | 77,289 | ||||||||||||||
| Draws on existing loans | 23,465 | 72,875 | 34,759 | |||||||||||||||||
| Net cash advances on loans receivable | 247,543 | 119,699 | 112,048 | |||||||||||||||||
| Receipts on loans receivable: | ||||||||||||||||||||
| Loan payoffs | 15,677 | 118,703 | 144,700 | |||||||||||||||||
| Principal payments on loans | 15,871 | 9,003 | 59,235 | |||||||||||||||||
Net cash receipts on loans receivable | 31,548 | 127,706 | 203,935 | |||||||||||||||||
| Net cash advances (receipts) on loans receivable | $ | 215,995 | $ | (8,007) | $ | (91,887) | ||||||||||||||
The following is a summary of our loans by credit loss category (in thousands):
| December 31, 2020 | |||||||||||||||||
| Loan category | Years of Origination | Loan Carrying Value | Allowance for Credit Loss | Net Loan Balance | No. of Loans | ||||||||||||
Deteriorated loans (1) | 2007 - 2018 | $ | 242,319 | $ | (212,514) | $ | 29,805 | 6 | |||||||||
| Collective loan pool | 2007 - 2015 | 130,436 | (2,452) | 127,984 | 14 | ||||||||||||
| Collective loan pool | 2016 | 126,465 | (2,381) | 124,084 | 4 | ||||||||||||
| Collective loan pool | 2017 | 126,792 | (1,429) | 125,363 | 7 | ||||||||||||
| Collective loan pool | 2018 | 19,923 | (374) | 19,549 | 1 | ||||||||||||
| Collective loan pool | 2019 | 48,819 | (886) | 47,933 | 7 | ||||||||||||
| Collective loan pool | 2020 | 212,923 | (4,000) | 208,923 | 9 | ||||||||||||
| Total loans | $ | 907,677 | $ | (224,036) | $ | 683,641 | 48 | ||||||||||
In 2019, we recognized a provision for loan losses of $18,690,000 to fully reserve for and eventually wrote off certain Triple-net real estate loans receivable that were no longer deemed collectible. During the year ended December 31, 2020, we recognized additional provision for loan losses of $88,201,000 as a result of the current collateral estimates for loans with deteriorated credit, primarily relating to our outstanding Genesis Healthcare loans. As of December 31, 2020, the total allowance for credit losses balance of $224,036,000 is deemed to be sufficient to absorb expected losses relating to our loan portfolio. The following is a summary of the allowance for credit losses on loans receivable for the periods presented (in thousands):
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| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Balance at beginning of year | $ | 68,372 | $ | 68,372 | $ | 68,372 | ||||||||||||||
| 5,212 | — | — | ||||||||||||||||||
| Provision for loan losses | 94,436 | 18,690 | — | |||||||||||||||||
| Loan write-offs | (7,000) | (18,690) | — | |||||||||||||||||
| Foreign currency translation | 197 | — | — | |||||||||||||||||
Reclassification of deferred gain as credit loss(1) | 62,819 | — | — | |||||||||||||||||
| Balance at end of year | $ | 224,036 | $ | 68,372 | $ | 68,372 | ||||||||||||||
(1) During the year ended December 31, 2020, two loans receivable originated in 2016 to Genesis Healthcare with an aggregate carrying value of $62,753,000 were transferred to the deteriorated loan pool. In addition, deferred gains of $62,819,000 previously recorded in accrued expenses and other liabilities were reclassified to the allowance for credit losses. | ||||||||||||||||||||
The following is a summary of our deteriorated loans (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
Balance of deteriorated loans at end of year(1) | $ | 242,319 | $ | 188,018 | $ | 189,272 | ||||||||||||||
| Allowance for credit losses | (212,514) | (68,372) | (68,372) | |||||||||||||||||
| Balance of deteriorated loans not reserved | $ | 29,805 | $ | 119,646 | $ | 120,900 | ||||||||||||||
Interest recognized on deteriorated loans(2) | 18,937 | 16,235 | 17,241 | |||||||||||||||||
(1) Balances include $3,623,000, $2,534,000 and 2567000 of loans on non-accrual as of December 31, 2020, 2019 and 2018, respectively.
(2) Represents cash interest recognized in the period.
8. Investments in Unconsolidated Entities
We participate in a number of joint ventures, which generally invest in seniors housing and health care real estate. The results of operations for these properties have been included in our consolidated results of operations from the date of acquisition by the joint ventures and are reflected in our Consolidated Statements of Comprehensive Income as income or loss from unconsolidated entities. The following is a summary of our investments in unconsolidated entities (dollars in thousands):
Percentage Ownership(1) | December 31, 2020 | December 31, 2019 | ||||||||||||||||||
| Seniors Housing Operating | 10% to 65% | $ | 653,057 | $ | 463,741 | |||||||||||||||
| Triple-net | 10% to 25% | 5,629 | 7,740 | |||||||||||||||||
| Outpatient Medical | 15% to 50% | 287,548 | 111,942 | |||||||||||||||||
| Total | $ | 946,234 | $ | 583,423 | ||||||||||||||||
(1) Includes ownership of investments classified as liabilities and excludes ownership of in-substance real estate.
We own 34% of Sunrise Senior Living Management, Inc. ("Sunrise"), who provides comprehensive property management and accounting services with respect to certain of our Seniors Housing Operating properties that Sunrise operates. We pay Sunrise annual management fees pursuant to long-term management agreements. Our management agreements have initial terms expiring through December 2035 plus, if applicable, optional renewal periods ranging from an additional 5 to 15 years depending on the property. The management fees payable to Sunrise under the management agreements include a fee based on a percentage of revenues generated by the applicable properties plus, if applicable, positive or negative adjustments based on specified performance targets. For the years ended December 31, 2020, 2019 and 2018, we recognized fees to Sunrise of $40,088,000, $41,200,000 and $36,378,000, respectively, which are reflected within property operating expenses in our Consolidated Statements of Comprehensive Income.
During the year ended December 31, 2019, we sold our interest in a Seniors Housing Operating joint venture and recognized a gain of $38,681,000 in income (loss) from unconsolidated entities in our Consolidated Statements of Comprehensive Income.
At December 31, 2020, the aggregate unamortized basis difference of our joint venture investments of $116,504,000 is primarily attributable to the difference between the amount for which we purchased our interest in the entity, including transaction costs, and the historical carrying value of the net assets of the joint venture. This difference is being amortized over the remaining useful life of the related properties and included in the reported amount of income from unconsolidated entities.
We have made loans totaling $333,934,000 related to eight properties as of December 31, 2020 for the development and construction of certain properties which are classified as in substance real estate investments. We believe that such borrowers typically represent variable interest entities (“VIE” or VIE’s”) in accordance with ASC 810 Consolidation. VIE’s are required to be consolidated by their Primary Beneficiary (“PB”) which is the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impacts the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We have concluded that we are not the PB of such
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borrowers, therefore, the loan arrangements were assessed based on among other factors, the amount and timing of expected residual profits, the estimated fair value of the collateral and the significance of the borrower’s equity in the project. Based on these assessments the arrangements have been classified as in substance real estate investments. We expect to fund an additional $120,004,000 related to these investments.
9. Credit Concentration
We use consolidated net operating income (“NOI”) as our credit concentration metric. See Note 18 for additional information and reconciliation. The following table summarizes certain information about our credit concentration for the year ended December 31, 2020, excluding our share of NOI in unconsolidated entities (dollars in thousands):
| Number of | Total | Percent of | ||||||||||||||||||
Concentration by relationship:(1) | Properties | NOI | NOI(2) | |||||||||||||||||
Sunrise Senior Living(3) | 165 | $ | 257,558 | 13% | ||||||||||||||||
| ProMedica | 215 | 212,593 | 11% | |||||||||||||||||
Revera(3) | 94 | 100,344 | 5% | |||||||||||||||||
| Avery Healthcare | 60 | 75,863 | 4% | |||||||||||||||||
| Sagora Senior Living | 31 | 67,399 | 3% | |||||||||||||||||
| Remaining portfolio | 928 | 1,294,387 | 64% | |||||||||||||||||
| Totals | 1,493 | $ | 2,008,144 | 100% | ||||||||||||||||
(1) Sunrise Senior Living and Revera are in our Seniors Housing Operating segment. ProMedica is in our Triple-net segment. Avery Healthcare and Sagora Senior Living are in both the Triple-net and Seniors Housing Operating segments.
(2) NOI with our top five relationships comprised 37% of total NOI for the year ending December 31, 2019.
(3) Revera owns a controlling interest in Sunrise. For the year ended December 31, 2020, we recognized $1,147,146,000 of revenue from properties managed by Sunrise Senior Living.
10. Borrowings Under Credit Facilities and Commercial Paper Program
At December 31, 2020, we had a primary unsecured credit facility with a consortium of 31 banks that includes a $3,000,000,000 unsecured revolving credit facility ($0 outstanding at December 31, 2020), a $500,000,000 unsecured term credit facility and a $250,000,000 Canadian-denominated unsecured term credit facility. We have an option, through an accordion feature, to upsize the unsecured revolving credit facility and the $500,000,000 unsecured term credit facility by up to an additional $1,000,000,000, in the aggregate, and the $250,000,000 Canadian-denominated unsecured term credit facility by up to an additional $250,000,000. The primary unsecured credit facility also allows us to borrow up to $1,000,000,000 in alternate currencies (none outstanding at December 31, 2020). Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate. The applicable margin is based on our debt ratings and was 0.825% at December 31, 2020. In addition, we pay a facility fee quarterly to each bank based on the bank’s commitment amount. The facility fee depends on our debt ratings and was 0.15% at December 31, 2020. The term credit facilities mature on July 19, 2023. The revolving credit facility is scheduled to mature on July 19, 2022 and can be extended for two successive terms of six months each at our option.
In January 2019, we established an unsecured commercial paper program. Under the terms of the program, we may issue unsecured commercial paper notes with maturities that vary, but do not exceed 397 days from the date of issue, up to a maximum aggregate face or principal amount outstanding at any time of $1,000,000,000 (none outstanding at December 31, 2020.
The following information relates to aggregate borrowings under the unsecured revolving credit facility and commercial paper program for the periods presented (dollars in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Balance outstanding at year end | $ | — | $ | 1,588,600 | $ | 1,147,000 | ||||||||||||||
| Maximum amount outstanding at any month end | $ | 2,100,000 | $ | 2,880,000 | $ | 2,148,000 | ||||||||||||||
| Average amount outstanding (total of daily principal balances | ||||||||||||||||||||
| divided by days in period) | $ | 497,014 | $ | 1,376,813 | $ | 950,581 | ||||||||||||||
| Weighted-average interest rate (actual interest expense divided | ||||||||||||||||||||
| by average borrowings outstanding) | 2.09 | % | 2.84 | % | 3.07 | % | ||||||||||||||
11. Senior Unsecured Notes and Secured Debt
We may repurchase, redeem or refinance senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms. The senior
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unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of (i) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (ii) any “make-whole” amount due under the terms of the notes in connection with early redemptions. Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. At December 31, 2020, the annual principal payments due on these debt obligations were as follows (in thousands):
Senior Unsecured Notes(1,2) | Secured Debt (1,3) | Totals | ||||||||||||||||||
| 2021 | $ | — | $ | 451,038 | $ | 451,038 | ||||||||||||||
2022(4) | 870,000 | 460,892 | 1,330,892 | |||||||||||||||||
2023(5,6) | 1,369,784 | 372,541 | 1,742,325 | |||||||||||||||||
| 2024 | 1,350,000 | 183,345 | 1,533,345 | |||||||||||||||||
| 2025 | 1,250,000 | 214,440 | 1,464,440 | |||||||||||||||||
Thereafter(7,8,9) | 6,669,749 | 695,817 | 7,365,566 | |||||||||||||||||
| Totals | $ | 11,509,533 | $ | 2,378,073 | $ | 13,887,606 | ||||||||||||||
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value adjustments as reflected on the Consolidated Balance Sheets.
(2) Annual interest rates range from 0.85% to 6.50%.
(3) Annual interest rates range from 0.09% to 12.00%. Carrying value of the properties securing the debt totaled $5,388,000,000 at December 31, 2020.
(4) Includes a $860,000,000 unsecured term credit facility. The loan matures on April 1, 2022 and bears interest at LIBOR plus 1.20% (1.35% at December 31, 2020).
(5) Includes a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $196,032,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2020). The loan matures on July 19, 2023 and bears interest at the Canadian Dealer Offered Rate plus 0.9% (1.37% at December 31, 2020).
(6) Includes a $500,000,000 unsecured term credit facility. The loan matures on July 19, 2023 and bears interest at LIBOR plus 0.9% (1.05% at December 31, 2020).
(7) Includes a $300,000,000 Canadian-denominated 2.95% senior unsecured notes due 2027 (approximately $235,239,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2020).
(8) Includes a £550,000,000 4.80% senior unsecured notes due 2028 (approximately $751,410,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on December 31, 2020).
(9) Includes a £500,000,000 4.50% senior unsecured notes due 2034 (approximately $683,100,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on December 31, 2020).
The following is a summary of our senior unsecured note principal activity during the periods presented (dollars in thousands):
| Year Ended | ||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Weighted Avg. | Weighted Avg. | Weighted Avg. | ||||||||||||||||||||||||||||||||||||
| Amount | Interest Rate | Amount | Interest Rate | Amount | Interest Rate | |||||||||||||||||||||||||||||||||
| Beginning balance | $ | 10,427,562 | 4.03% | $ | 9,699,984 | 4.48% | $ | 8,417,447 | 4.31% | |||||||||||||||||||||||||||||
| Debt issued | 1,600,000 | 1.89% | 3,987,790 | 3.34% | 2,850,000 | 4.57% | ||||||||||||||||||||||||||||||||
| Debt extinguished | (566,248) | 3.26% | (3,335,290) | 4.39% | (1,450,000) | 3.46% | ||||||||||||||||||||||||||||||||
| Foreign currency | 48,219 | 4.35% | 75,078 | 4.22% | (117,463) | 4.16% | ||||||||||||||||||||||||||||||||
| Ending balance | $ | 11,509,533 | 3.67% | $ | 10,427,562 | 4.03% | $ | 9,699,984 | 4.48% | |||||||||||||||||||||||||||||
The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):
| Year Ended | ||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Weighted Avg. | Weighted Avg. | Weighted Avg. | ||||||||||||||||||||||||||||||||||||
| Amount | Interest Rate | Amount | Interest Rate | Amount | Interest Rate | |||||||||||||||||||||||||||||||||
| Beginning balance | $ | 2,993,342 | 3.63% | $ | 2,485,711 | 3.90% | $ | 2,618,408 | 3.76% | |||||||||||||||||||||||||||||
| Debt issued | 62,055 | 2.55% | 343,696 | 3.11% | 45,447 | 3.40% | ||||||||||||||||||||||||||||||||
| Debt assumed | — | —% | 385,145 | 4.34% | 292,887 | 4.64% | ||||||||||||||||||||||||||||||||
| Debt extinguished | (632,288) | 2.21% | (230,108) | 4.35% | (306,553) | 5.36% | ||||||||||||||||||||||||||||||||
| Principal payments | (62,707) | 3.63% | (54,325) | 3.75% | (56,288) | 3.91% | ||||||||||||||||||||||||||||||||
| Foreign currency | 17,671 | 2.93% | 63,223 | 3.28% | (108,190) | 3.33% | ||||||||||||||||||||||||||||||||
| Ending balance | $ | 2,378,073 | 3.27% | $ | 2,993,342 | 3.63% | $ | 2,485,711 | 3.90% | |||||||||||||||||||||||||||||
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Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2020, we were in compliance with all of the covenants under our debt agreements.
12. Derivative Instruments
We are exposed to, among other risks, the impact of changes in foreign currency exchange rates as a result of our non-U.S. investments and interest rate risk related to our capital structure. Our risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes foreign currency forward contracts, cross currency swap contracts, interest rate swaps, interest rate locks and debt issued in foreign currencies to offset a portion of these risks.
Foreign Currency Forward Contracts Designated as Cash Flow Hedges
For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is deferred as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same period or periods, during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings.
Cash Flow Hedges of Interest Rate Risk
We enter into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our fixed-rate payments. These interest rate swap agreements are used to hedge the variable cash flows associated with variable-rate debt.
Periodically, we enter into and designate interest rate locks to partially hedge the risk of changes in interest payments attributable to increases in the benchmark interest rate during the period leading up to the probable issuance of fixed-rate debt. We designate our interest rate locks as cash flow hedges. Gains and losses when we settle our interest rate locks are amortized into income over the life of the related debt, except where a material amount is deemed to be ineffective, which would be immediately reclassified to the Consolidated Statements of Comprehensive Income. Approximately $2,686,000 of losses, which are included in OCI, are expected to be reclassified into earnings in the next 12 months.
Foreign Currency Forward Contracts and Cross Currency Swap Contracts Designated as Net Investment Hedges
We use foreign currency forward and cross currency forward swap contracts to hedge a portion of the net investment in foreign subsidiaries against fluctuations in foreign exchange rates. For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to U.S. Dollar of the instrument is recorded as a cumulative translation adjustment component of OCI.
During the years ended December 31, 2020, 2019, and 2018 we settled certain net investment hedges necessitating cash payments of $1,988,000 and generating cash proceeds of $6,716,000, and $70,897,000, respectively. The balance of the cumulative translation adjustment will be reclassified to earnings if the hedged investment is sold or substantially liquidated.
Derivative Contracts Undesignated
We use foreign currency exchange contracts to manage existing exposures to foreign currency exchange risk. Gains and losses resulting from the changes in fair value of these instruments are recorded in interest expense on the Consolidated Statements of Comprehensive Income, and are substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures. In addition, we have several interest rate cap contracts related to variable rate secured debt agreements. Gains and losses resulting from the changes in fair values of these instruments are also recorded in interest expense.
The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):
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| December 31, 2020 | December 31, 2019 | |||||||||||||
| Derivatives designated as net investment hedges: | ||||||||||||||
| Denominated in Canadian Dollars | $ | 625,000 | $ | 725,000 | ||||||||||
| Denominated in Pound Sterling | £ | 1,340,708 | £ | 1,340,708 | ||||||||||
| Financial instruments designated as net investment hedges: | ||||||||||||||
| Denominated in Canadian Dollars | $ | 250,000 | $ | 250,000 | ||||||||||
| Denominated in Pound Sterling | £ | 1,050,000 | £ | 1,050,000 | ||||||||||
| Interest rate swaps designated as cash flow hedges: | ||||||||||||||
Denominated in U.S. Dollars(1) | $ | 450,000 | $ | 1,188,250 | ||||||||||
| Derivative instruments not designated: | ||||||||||||||
| Interest rate caps denominated in U.S. Dollars | $ | 26,137 | $ | 405,819 | ||||||||||
| Forward sales contracts denominated in Canadian Dollars | $ | 80,000 | $ | — | ||||||||||
| Forward purchase contracts denominated in Pound Sterling | £ | — | £ | (125,000) | ||||||||||
| Forward sales contracts denominated in Pound Sterling | £ | — | £ | 125,000 | ||||||||||
(1) At December 31, 2020 the maximum maturity date was January 15, 2021.
The following presents the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the periods presented (in thousands):
| Year Ended | ||||||||||||||||||||||||||
| Description | Location | December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||
| Gain (loss) on derivative instruments designated as hedges recognized in income | Interest expense | $ | 22,698 | $ | 26,419 | $ | 12,271 | |||||||||||||||||||
| Gain (loss) on derivative instruments not designated as hedges recognized in income | Interest expense | $ | (5,982) | $ | (2,310) | $ | 5,233 | |||||||||||||||||||
| Gain (loss) on derivative and financial instruments designated as hedges recognized in OCI | OCI | $ | (134,369) | $ | (131,120) | $ | 211,390 | |||||||||||||||||||
13. Commitments and Contingencies
At December 31, 2020, we had 9 outstanding letter of credit obligations totaling $19,476,000 and expiring between 2021 and 2024. At December 31, 2020, we had outstanding construction in progress of $487,742,000 and were committed to providing additional funds of approximately $622,108,000 to complete construction. Additionally, at December 31, 2020, we had outstanding investments classified as in substance real estate of $333,934,000 and were committed to provide additional funds of $120,004,000 (see Note 8 for additional information). Purchase obligations include $42,685,000 of contingent obligations to fund capital improvements. Rents due from the operator are increased to reflect the additional investment in the property.
14. Stockholders’ Equity
The following is a summary of our stockholders’ equity capital accounts as of the dates indicated:
| December 31, 2020 | December 31, 2019 | |||||||||||||
Preferred Stock, $1.00 par value: | ||||||||||||||
| Authorized shares | 50,000,000 | 50,000,000 | ||||||||||||
| Issued shares | — | — | ||||||||||||
| Outstanding shares | — | — | ||||||||||||
Common Stock, $1.00 par value: | ||||||||||||||
| Authorized shares | 700,000,000 | 700,000,000 | ||||||||||||
| Issued shares | 419,124,469 | 411,550,857 | ||||||||||||
| Outstanding shares | 417,400,602 | 410,256,615 | ||||||||||||
Preferred Stock
The following is a summary of our preferred stock activity during the periods presented:
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| Year Ended | ||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Weighted Avg. | Weighted Avg. | Weighted Avg. | ||||||||||||||||||||||||||||||||||||
| Shares | Dividend Rate | Shares | Dividend Rate | Shares | Dividend Rate | |||||||||||||||||||||||||||||||||
| Beginning balance | — | —% | 14,369,965 | 6.50% | 14,370,060 | 6.50% | ||||||||||||||||||||||||||||||||
| Shares converted | — | —% | (14,369,965) | 6.50% | (95) | 6.50% | ||||||||||||||||||||||||||||||||
| Ending balance | — | —% | — | —% | 14,369,965 | 6.50% | ||||||||||||||||||||||||||||||||
During the year ended December 31, 2019, we converted all of the outstanding Series I Preferred Stock. Each share was converted into 0.8857 shares of common stock.
Common Stock
In February 2019, we entered into an amended and restated equity distribution agreement whereby we can offer and sell up to $1,500,000,000 aggregate amount of our common stock ("Equity Shelf Program"). The Equity Shelf Program also allows us to enter into forward sale agreements. During the year ended December 31, 2020, we physically settled all of our outstanding forward sale agreements for cash proceeds of $576,196,000. As of December 31, 2020, we had $499,341,000 of remaining capacity under the Equity Shelf Program.
On May 1, 2020, our Board of Directors authorized a share repurchase program whereby we may repurchase up to $1 billion of common stock through December 31, 2021 (the "Repurchase Program"). Under this authorization, we are not required to purchase shares but may choose to do so in the open market or through private transactions at times and amounts based on our evaluation of market conditions and other factors. We expect to finance any share repurchases under the Repurchase Program using available cash and may use proceeds from borrowings or debt offerings. During the year ended December 31, 2020, we repurchased 201,947 shares at an average price of $37.89 per share.
The following is a summary of our common stock activity during the periods indicated (dollars in thousands, except average price amounts):
| Shares Issued | Average Price | Gross Proceeds | Net Proceeds | |||||||||||||||||||||||
| 2018 Dividend reinvestment plan issuances | 6,529,417 | $ | 65.55 | $ | 428,009 | $ | 423,075 | |||||||||||||||||||
| 2018 Option exercises | 56,960 | 42.66 | 2,430 | 2,430 | ||||||||||||||||||||||
| 2018 Equity Shelf Program issuances | 5,241,349 | 69.95 | 366,640 | 364,070 | ||||||||||||||||||||||
| 2018 Preferred stock conversions | 83 | — | — | |||||||||||||||||||||||
| 2018 Stock incentive plans, net of forfeitures | 115,243 | — | — | |||||||||||||||||||||||
| 2018 Totals | 11,943,052 | $ | 797,079 | $ | 789,575 | |||||||||||||||||||||
| 2019 Dividend reinvestment plan issuances | 5,798,979 | $ | 77.18 | $ | 447,559 | $ | 443,929 | |||||||||||||||||||
| 2019 Option exercises | 10,736 | 51.32 | 551 | 551 | ||||||||||||||||||||||
| 2019 Equity Shelf Program issuances | 7,855,956 | 78.15 | 613,948 | 611,645 | ||||||||||||||||||||||
| 2019 Preferred stock conversions | 12,712,452 | — | — | |||||||||||||||||||||||
| 2019 Stock incentive plans, net of forfeitures | 203,889 | — | — | |||||||||||||||||||||||
| 2019 Totals | 26,582,012 | $ | 1,062,058 | $ | 1,056,125 | |||||||||||||||||||||
| 2020 Dividend reinvestment plan issuances | 264,153 | $ | 72.33 | $ | 19,105 | $ | 19,105 | |||||||||||||||||||
| 2020 Option exercises | 251 | 47.81 | 12 | 12 | ||||||||||||||||||||||
| 2020 Equity Shelf Program issuances | 6,799,978 | 86.48 | 588,072 | 576,196 | ||||||||||||||||||||||
| 2020 Stock incentive plans, net of forfeitures | 281,552 | — | — | |||||||||||||||||||||||
| 2020 Totals | 7,345,934 | $ | 607,189 | $ | 595,313 | |||||||||||||||||||||
Dividends
During the year ended December 31, 2020, we declared a reduced cash dividend beginning with the quarter ended March 31, 2020. Please refer to Note 19 for information related to federal income tax of dividends. The following is a summary of our dividend payments (in thousands, except per share amounts):
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| Year Ended | ||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Per Share | Amount | Per Share | Amount | Per Share | Amount | |||||||||||||||||||||||||||||||||
| Common Stock | $ | 2.7000 | $ | 1,120,187 | $ | 3.4800 | $ | 1,404,977 | $ | 3.4800 | $ | 1,300,141 | ||||||||||||||||||||||||||
| Series I Preferred Stock | — | — | — | — | 3.2500 | 46,704 | ||||||||||||||||||||||||||||||||
| Totals | $ | 1,120,187 | $ | 1,404,977 | $ | 1,346,845 | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income
The following is a summary of accumulated other comprehensive income/(loss) for the periods presented (in thousands):
| December 31, 2020 | December 31, 2019 | |||||||||||||
| Foreign currency translation | $ | (621,792) | $ | (719,814) | ||||||||||
| Derivative and financial instruments designated as hedges | 473,288 | 607,657 | ||||||||||||
| Total accumulated other comprehensive loss | $ | (148,504) | $ | (112,157) | ||||||||||
15. Stock Incentive Plans
Our 2016 Long-Term Incentive Plan (“2016 Plan”) authorizes up to 10,000,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors. Our non-employee directors, officers and key employees are eligible to participate in the 2016 Plan. The 2016 Plan allows for the issuance of, among other things, stock options, stock appreciation rights, restricted stock, deferred stock units, performance units, and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted shares generally range from to four years. Options expire ten years from the date of grant.
Under our long-term incentive plan, certain restricted stock awards are market, performance and time-based. For market and performance based awards, we will grant a target number of restricted stock units, with the ultimate award determined by the total shareholder return and operating performance metrics, measured in each case over a measurement period of three years. These awards vest after the end of the performance periods. The expected term represents the period from the grant date to the end of the performance period. Compensation expense for these performance grants is measured based on the probability of achievement of certain performance goals and is recognized over the performance period. For the portion of the grant for which the award is determined by the operating performance metrics, the compensation cost is based on the grant date closing price and management’s estimate of corporate achievement of the financial metrics. If the estimated number of performance based restricted stock to be earned changes, an adjustment will be recorded to recognize the accumulated difference between the revised and previous estimates. For the portion of the grant determined by the total shareholder return, management used a Monte Carlo model to assess the fair value and compensation cost. Forfeitures are accounted for as they occur.
For the years ended December 31, 2020, 2019 and 2018, we recognized stock compensation expense (a component of general and administrative expenses, property operating expenses, and other expenses) of $28,318,000, $25,047,000, and $27,646,000, respectively.
Restricted Stock
The fair value of the restricted stock is equal to the market price of the company’s common stock on the date of grant and is amortized over the vesting periods. As of December 31, 2020, there was $20,900,000 of total unrecognized compensation expense related to unvested restricted stock that is expected to be recognized over a weighted-average period of two years. The following table summarizes information about non-vested restricted stock incentive awards as of and for the year ended December 31, 2020:
| Restricted Stock | ||||||||||||||
| Number of Shares (000's) | Weighted-Average Grant Date Fair Value | |||||||||||||
Non-vested at December 31, 2019 | 1,106 | $ | 70.26 | |||||||||||
| Vested | (580) | 71.36 | ||||||||||||
| Granted | 274 | 88.24 | ||||||||||||
| Forfeited or Expired | (395) | 83.01 | ||||||||||||
Non-vested at December 31, 2020 | 405 | $ | 69.35 | |||||||||||
16. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):
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| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Numerator for basic earnings per share - net income attributable | ||||||||||||||||||||
| to common stockholders | $ | 978,844 | $ | 1,232,432 | $ | 758,250 | ||||||||||||||
| Adjustment for net income (loss) attributable to OP units | (6,146) | 806 | 173 | |||||||||||||||||
| Numerator for diluted earnings per share | $ | 972,698 | $ | 1,233,238 | $ | 758,423 | ||||||||||||||
| Denominator for basic earnings per share - weighted average shares | 415,451 | 401,845 | 373,620 | |||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||
| Employee stock options | — | — | 9 | |||||||||||||||||
| Non-vested restricted shares | 519 | 835 | 512 | |||||||||||||||||
| Redeemable OP units | 1,396 | 1,112 | 1,096 | |||||||||||||||||
| Employee stock purchase program | 21 | 16 | 13 | |||||||||||||||||
| Dilutive potential common shares | 1,936 | 1,963 | 1,630 | |||||||||||||||||
| Denominator for diluted earnings per share - adjusted weighted average shares | 417,387 | 403,808 | 375,250 | |||||||||||||||||
| Basic earnings per share | $ | 2.36 | $ | 3.07 | $ | 2.03 | ||||||||||||||
| Diluted earnings per share | $ | 2.33 | $ | 3.05 | $ | 2.02 | ||||||||||||||
As of December 31, 2018, the Series I Cumulative Convertible Perpetual Preferred Stock were excluded from the calculations as the effect of the conversions were anti-dilutive. As of December 31, 2019, forward sales agreements outstanding for the sale of 4,935,804 shares of common stock were not included in the computation of diluted earnings per share because such forward sales were anti-dilutive for the period.
17. Disclosure about Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level valuation hierarchy exists for disclosures of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined below:
•Level 1 - Quoted prices in active markets for identical assets or liabilities.
•Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Mortgage Loans, Other Real Estate Loans and Non-real Estate Loans Receivable — The fair value of mortgage loans, other real estate loans and non-real estate loans receivable is generally estimated by using Level 2 and Level 3 inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
Cash and Cash Equivalents and Restricted Cash — The carrying amount approximates fair value.
Equity Securities — Equity securities are recorded at their fair value based on Level 1 publicly available trading prices.
Borrowings Under Primary Unsecured Credit Facility and Commercial Paper Program — The carrying amount of the primary unsecured credit facility and commercial paper program approximates fair value because the borrowings are interest rate adjustable.
Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on Level 1 publicly available trading prices. The carrying amount of the variable rate senior unsecured notes approximates fair value because they are interest rate adjustable.
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Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 inputs by discounting the estimated future cash flows using the current rates at which similar loans would be made with similar credit ratings and for the same remaining maturities. The carrying amount of variable rate secured debt approximates fair value because the borrowings are interest rate adjustable.
Foreign Currency Forward Contracts, Interest Rate Swaps and Cross Currency Swaps — Foreign currency forward contracts, interest rate swaps and cross currency swaps are recorded in other assets or other liabilities on the balance sheet at fair value that is derived from observable market data, including yield curves and foreign exchange rates (all of our derivatives are Level 2).
Redeemable OP Unitholder Interests — Our redeemable OP unitholder interests are recorded on the balance sheet at fair value using Level 2 inputs unless the fair value is below the initial amount in which case the redeemable OP unitholder interests are recorded at the initial amount adjusted for distributions to the unitholders and income or loss attributable to the unitholders. The fair value is measured using the closing price of our common stock, as units may be redeemed at the election of the holder for cash or, at our option, one share of our common stock per unit, subject to adjustment in certain circumstances.
The carrying amounts and estimated fair values of our financial instruments are as follows as of the dates presented (in thousands):
| December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||
| Carrying | Fair | Carrying | Fair | |||||||||||||||||||||||
| Amount | Value | Amount | Value | |||||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||||||||
| Mortgage loans receivable | $ | 293,752 | $ | 297,207 | $ | 145,686 | $ | 150,217 | ||||||||||||||||||
| Other real estate loans receivable | 149,620 | 152,211 | 124,696 | 128,512 | ||||||||||||||||||||||
| Equity securities | 4,636 | 4,636 | 15,685 | 15,685 | ||||||||||||||||||||||
| Cash and cash equivalents | 1,545,046 | 1,545,046 | 284,917 | 284,917 | ||||||||||||||||||||||
| Restricted cash | 475,997 | 475,997 | 100,849 | 100,849 | ||||||||||||||||||||||
| Non-real estate loans receivable | 240,269 | 255,724 | 336,854 | 379,239 | ||||||||||||||||||||||
| Foreign currency forward contracts, interest rate swaps and cross currency swaps | 4,668 | 4,668 | 18,554 | 18,554 | ||||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||||
| Borrowings under unsecured credit facility and commercial paper program | $ | — | $ | — | $ | 1,587,597 | $ | 1,587,597 | ||||||||||||||||||
| Senior unsecured notes | 11,420,790 | 13,093,926 | 10,336,513 | 11,400,571 | ||||||||||||||||||||||
| Secured debt | 2,377,930 | 2,451,782 | 2,990,962 | 3,041,893 | ||||||||||||||||||||||
| Foreign currency forward contracts, interest rate swaps and cross currency swaps | 118,054 | 118,054 | 53,601 | 53,601 | ||||||||||||||||||||||
| Redeemable OP unitholder interests | $ | 116,240 | $ | 115,346 | $ | 121,440 | $ | 121,440 | ||||||||||||||||||
Items Measured at Fair Value on a Recurring Basis
The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair value on a recurring basis. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The following summarizes items measured at fair value on a recurring basis (in thousands):
Fair Value Measurements as of December 31, 2020 | ||||||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
| Equity securities | $ | 4,636 | $ | 4,636 | $ | — | $ | — | ||||||||||||||||||
Foreign currency forward contracts, interest rate swaps and cross currency swaps, net asset (liability)(1) | (113,386) | — | (113,386) | — | ||||||||||||||||||||||
| Totals | $ | (108,750) | $ | 4,636 | $ | (113,386) | $ | — | ||||||||||||||||||
(1) Please see Note 12 for additional information.
Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, we also have assets and liabilities on our balance sheet that are measured at fair value on a nonrecurring basis that are not included in the tables above. Assets, liabilities and noncontrolling interests that are measured at fair value on a nonrecurring basis include those acquired or assumed. Asset
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impairments (if applicable, see Note 5 for impairments of real property and Note 7 for impairments of loans receivable) are also measured at fair value on a nonrecurring basis. We have determined that the fair value measurements included in each of these assets and liabilities rely primarily on company-specific inputs and our assumptions about the use of the assets and settlement of liabilities, as observable inputs are not available. As such, we have determined that each of these fair value measurements generally resides within Level 3 of the fair value hierarchy. We estimate the fair value of real estate and related intangibles using the income approach and unobservable data such as net operating income, and estimated capitalization and discount rates. We also consider local and national industry market data including comparable sales, and commonly engage an external real estate appraiser to assist us in our estimation of fair value. We estimate the fair value of assets held for sale based on current sales price expectations or, in the absence of such price expectations, Level 3 inputs described above. We estimate the fair value of loans receivable using projected payoff valuations based on the expected future cash flows and/or the estimated fair value of collateral, net of sales costs, if the repayment of the loan is expected to be provided solely by the collateral. We estimate the fair value of secured debt assumed in asset acquisitions using current interest rates at which similar borrowings could be obtained on the transaction date.
18. Segment Reporting
We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our three operating segments: Seniors Housing Operating, Triple-net and Outpatient Medical. Our Seniors Housing Operating properties include seniors apartments, assisted living, independent living/continuing care retirement communities, independent supportive living communities (Canada), care homes with and without nursing (U.K.) and combinations thereof that are generally owned and/or operated through RIDEA structures (see Note 19). Our Triple-net properties include the property types described above as well as long-term/post-acute care facilities. Under the Triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties. Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property. Our Outpatient Medical properties are typically leased to multiple tenants and generally require a certain level of property management by us.
We evaluate performance based upon consolidated NOI of each segment. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. We believe NOI provides investors relevant and useful information as it measures the operating performance of our properties at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties.
Non-segment revenue consists mainly of other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments. There are no intersegment sales or transfers.
Summary information for the reportable segments (which excludes unconsolidated entities) during the years ended December 31, 2020, 2019 and 2018 is as follows (in thousands):
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| Year Ended December 31, 2020: | Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment / Corporate | Total | |||||||||||||||||||||||||||
| Resident fees and services | $ | 3,074,022 | $ | — | $ | — | $ | — | $ | 3,074,022 | ||||||||||||||||||||||
| Rental income | — | 733,776 | 709,584 | — | 1,443,360 | |||||||||||||||||||||||||||
| Interest income | 618 | 62,625 | 5,913 | — | 69,156 | |||||||||||||||||||||||||||
| Other income | 7,223 | 4,903 | 4,522 | 2,781 | 19,429 | |||||||||||||||||||||||||||
| Total revenues | 3,081,863 | 801,304 | 720,019 | 2,781 | 4,605,967 | |||||||||||||||||||||||||||
| Property operating expenses | 2,326,311 | 53,183 | 214,948 | 3,381 | 2,597,823 | |||||||||||||||||||||||||||
| Consolidated net operating income | 755,552 | 748,121 | 505,071 | (600) | 2,008,144 | |||||||||||||||||||||||||||
| Depreciation and amortization | 544,462 | 232,604 | 261,371 | — | 1,038,437 | |||||||||||||||||||||||||||
| Interest expense | 54,901 | 9,477 | 17,579 | 432,431 | 514,388 | |||||||||||||||||||||||||||
| General and administrative expenses | — | — | — | 128,394 | 128,394 | |||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | — | 11,049 | — | — | 11,049 | |||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 12,659 | — | 1,046 | 33,344 | 47,049 | |||||||||||||||||||||||||||
| Provision for loan losses | 671 | 90,563 | 3,202 | — | 94,436 | |||||||||||||||||||||||||||
| Impairment of assets | 100,741 | 34,867 | — | — | 135,608 | |||||||||||||||||||||||||||
| Other expenses | 14,265 | 22,923 | 8,218 | 24,929 | 70,335 | |||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | 27,853 | 346,638 | 213,655 | (619,698) | (31,552) | |||||||||||||||||||||||||||
| Income tax (expense) benefit | — | — | — | (9,968) | (9,968) | |||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | (33,857) | 18,462 | 7,312 | — | (8,083) | |||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | 328,249 | 64,288 | 695,918 | — | 1,088,455 | |||||||||||||||||||||||||||
| Income (loss) from continuing operations | 322,245 | 429,388 | 916,885 | (629,666) | 1,038,852 | |||||||||||||||||||||||||||
| Net income (loss) | $ | 322,245 | $ | 429,388 | $ | 916,885 | $ | (629,666) | $ | 1,038,852 | ||||||||||||||||||||||
| Total assets | $ | 16,044,153 | $ | 8,547,482 | $ | 6,522,880 | $ | 1,369,127 | $ | 32,483,642 | ||||||||||||||||||||||
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| Year Ended December 31, 2019: | Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment / Corporate | Total | |||||||||||||||||||||||||||
| Resident fees and services | $ | 3,448,175 | $ | — | $ | — | $ | — | $ | 3,448,175 | ||||||||||||||||||||||
| Rental income | — | 903,798 | 684,602 | — | 1,588,400 | |||||||||||||||||||||||||||
| Interest income | 36 | 62,599 | 1,195 | — | 63,830 | |||||||||||||||||||||||||||
| Other income | 8,658 | 6,246 | 2,031 | 3,966 | 20,901 | |||||||||||||||||||||||||||
| Total revenues | 3,456,869 | 972,643 | 687,828 | 3,966 | 5,121,306 | |||||||||||||||||||||||||||
| Property operating expenses | 2,417,349 | 53,900 | 218,793 | — | 2,690,042 | |||||||||||||||||||||||||||
| Consolidated net operating income | 1,039,520 | 918,743 | 469,035 | 3,966 | 2,431,264 | |||||||||||||||||||||||||||
| Depreciation and amortization | 553,189 | 232,626 | 241,258 | — | 1,027,073 | |||||||||||||||||||||||||||
| Interest expense | 67,983 | 12,892 | 13,411 | 461,273 | 555,559 | |||||||||||||||||||||||||||
| General and administrative expenses | — | — | — | 126,549 | 126,549 | |||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | — | (4,399) | — | — | (4,399) | |||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 1,614 | — | — | 82,541 | 84,155 | |||||||||||||||||||||||||||
| Provision for loan losses | — | 18,690 | — | — | 18,690 | |||||||||||||||||||||||||||
| Impairment of assets | 2,145 | 11,926 | 14,062 | — | 28,133 | |||||||||||||||||||||||||||
| Other expenses | 26,348 | 13,771 | 1,788 | 10,705 | 52,612 | |||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | 388,241 | 633,237 | 198,516 | (677,102) | 542,892 | |||||||||||||||||||||||||||
| Income tax (expense) benefit | — | — | — | (2,957) | (2,957) | |||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | 12,388 | 22,985 | 7,061 | — | 42,434 | |||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | 528,747 | 218,322 | 972 | — | 748,041 | |||||||||||||||||||||||||||
| Income (loss) from continuing operations | 929,376 | 874,544 | 206,549 | (680,059) | 1,330,410 | |||||||||||||||||||||||||||
| Net income (loss) | $ | 929,376 | $ | 874,544 | $ | 206,549 | $ | (680,059) | $ | 1,330,410 | ||||||||||||||||||||||
| Total assets | $ | 15,784,898 | $ | 9,434,817 | $ | 7,991,521 | $ | 169,515 | $ | 33,380,751 | ||||||||||||||||||||||
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| Year Ended December 31, 2018: | Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment / Corporate | Total | |||||||||||||||||||||||||||
| Resident fees and services | $ | 3,234,852 | $ | — | $ | — | $ | — | $ | 3,234,852 | ||||||||||||||||||||||
| Rental income | — | 828,865 | 551,557 | — | 1,380,422 | |||||||||||||||||||||||||||
| Interest income | 578 | 54,926 | 310 | — | 55,814 | |||||||||||||||||||||||||||
| Other income | 5,024 | 17,173 | 4,939 | 2,275 | 29,411 | |||||||||||||||||||||||||||
| Total revenues | 3,240,454 | 900,964 | 556,806 | 2,275 | 4,700,499 | |||||||||||||||||||||||||||
| Property operating expenses | 2,255,432 | 915 | 176,670 | — | 2,433,017 | |||||||||||||||||||||||||||
| Consolidated net operating income | 985,022 | 900,049 | 380,136 | 2,275 | 2,267,482 | |||||||||||||||||||||||||||
| Depreciation and amortization | 529,449 | 235,480 | 185,530 | — | 950,459 | |||||||||||||||||||||||||||
| Interest expense | 69,060 | 14,225 | 7,051 | 436,256 | 526,592 | |||||||||||||||||||||||||||
| General and administrative expenses | — | — | — | 126,383 | 126,383 | |||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | — | (4,016) | — | — | (4,016) | |||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 110 | (32) | 11,928 | 4,091 | 16,097 | |||||||||||||||||||||||||||
| Impairment of assets | 7,599 | 107,980 | — | — | 115,579 | |||||||||||||||||||||||||||
Other expenses(1) | 6,624 | 90,975 | (1) | 7,570 | 7,729 | 112,898 | ||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | 372,180 | 455,437 | 168,057 | (572,184) | 423,490 | |||||||||||||||||||||||||||
| Income tax (expense) benefit | — | — | — | (8,674) | (8,674) | |||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | (28,142) | 21,938 | 5,563 | — | (641) | |||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | (2,245) | 196,589 | 221,231 | — | 415,575 | |||||||||||||||||||||||||||
| Income (loss) from continuing operations | 341,793 | 673,964 | 394,851 | (580,858) | 829,750 | |||||||||||||||||||||||||||
| Net income (loss) | $ | 341,793 | $ | 673,964 | $ | 394,851 | $ | (580,858) | $ | 829,750 | ||||||||||||||||||||||
(1) Represents non-capitalizable transaction costs of $81,116,000 primarily related to a joint venture transaction with an existing seniors housing operator including the conversion of properties from Triple-net to Seniors Housing Operating and termination/restructuring of preexisting relationships.
Our portfolio of properties and other investments are located in the United States, the United Kingdom and Canada. Revenues and assets are attributed to the country in which the property is physically located. The following is a summary of geographic information for the periods presented (dollars in thousands):
| Year Ended | ||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Revenues: | Amount(1) | % | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||
| United States | $ | 3,720,155 | 80.8 | % | $ | 4,205,492 | 82.1 | % | $ | 3,777,960 | 80.4 | % | ||||||||||||||||||||||||||
| United Kingdom | 451,399 | 9.8 | % | 452,698 | 8.8 | % | 452,956 | 9.6 | % | |||||||||||||||||||||||||||||
| Canada | 434,413 | 9.4 | % | 463,116 | 9.1 | % | 469,583 | 10.0 | % | |||||||||||||||||||||||||||||
| Total | $ | 4,605,967 | 100.0 | % | $ | 5,121,306 | 100.0 | % | $ | 4,700,499 | 100.0 | % | ||||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||
| Assets: | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||
| United States | $ | 26,658,659 | 82.1 | % | $ | 27,513,911 | 82.4 | % | ||||||||||||||||||||||||||||||
| United Kingdom | 3,352,549 | 10.3 | % | 3,405,388 | 10.2 | % | ||||||||||||||||||||||||||||||||
| Canada | 2,472,434 | 7.6 | % | 2,461,452 | 7.4 | % | ||||||||||||||||||||||||||||||||
| Total | $ | 32,483,642 | 100.0 | % | $ | 33,380,751 | 100.0 | % | ||||||||||||||||||||||||||||||
(1) The United States, United Kingdom and Canada represent 76%, 10% and 14%, respectively, of our resident fees and services revenue for the year ended December 31, 2020.
101
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
19. Income Taxes and Distributions
We elected to be taxed as a REIT commencing with our first taxable year. To qualify as a REIT for federal income tax purposes, at least 90% of taxable income (excluding 100% of net capital gains) must be distributed to stockholders. REITs that do not distribute a certain amount of taxable income in the current year are also subject to a 4% federal excise tax. The main differences between undistributed net income for federal income tax purposes and financial statement purposes are the recognition of straight-line rent for reporting purposes, basis differences in acquisitions, recording of impairments, differing useful lives and depreciation and amortization methods for real property and the provision for loan losses for reporting purposes versus bad debt expense for tax purposes.
Cash distributions paid to common stockholders, for federal income tax purposes, are as follows for the periods presented:
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Per share: | ||||||||||||||||||||
Ordinary dividend(1) | $ | 1.6389 | $ | 2.6937 | $ | 2.1988 | ||||||||||||||
Long-term capital gain/(loss)(2) | 1.0611 | 0.7863 | 1.1153 | |||||||||||||||||
| Return of capital | — | — | 0.1659 | |||||||||||||||||
| Totals | $ | 2.7000 | $ | 3.4800 | $ | 3.4800 | ||||||||||||||
(1) For the years ended December 31, 2020, 2019 and 2018, includes Section 199A dividends of $1.6389, $2.6937 and $2.1988 respectively.
(2) For the years ended December 31, 2020, 2019 and 2018, includes Unrecaptured SEC. 1250 Gains of $0.3458, $0.2835 and $0.3822, respectively.
Our consolidated provision for income tax expense (benefit) is as follows for the periods presented (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Current tax expense | $ | 11,358 | $ | 12,594 | $ | 15,850 | ||||||||||||||
| Deferred tax benefit | (1,390) | (9,637) | (7,176) | |||||||||||||||||
| Income tax expense (benefit) | $ | 9,968 | $ | 2,957 | $ | 8,674 | ||||||||||||||
REITs generally are not subject to U.S. federal income taxes on that portion of REIT taxable income or capital gain that is distributed to stockholders. For the tax year ended December 31, 2020, as a result of ownership of investments in Canada and the U.K., we were subject to foreign income taxes under the respective tax laws of these jurisdictions.
The provision for income taxes for the year ended December 31, 2020 primarily relates to state taxes, foreign taxes, and taxes based on income generated by entities that are structured as TRSs. For the tax years ended December 31, 2020, 2019 and 2018, the foreign tax provision/(benefit) amount included in the consolidated provision for income taxes was $5,777,000, ($3,892,000) and $9,804,000, respectively.
A reconciliation of income taxes, which is computed by applying the federal corporate tax rate for the years ended December 31, 2020, 2019 and 2018, to the income tax expense/(benefit) is as follows for the periods presented (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interests and income taxes | $ | 220,252 | $ | 280,005 | $ | 176,069 | ||||||||||||||
Increase (decrease) in valuation allowance(1) | 85,881 | 3,465 | 28,309 | |||||||||||||||||
| Tax at statutory rate on earnings not subject to federal income taxes | (300,196) | (311,224) | (206,937) | |||||||||||||||||
| Foreign permanent depreciation | 1,504 | 9,260 | 8,110 | |||||||||||||||||
| Other differences | 2,527 | 21,451 | 3,123 | |||||||||||||||||
| Totals | $ | 9,968 | $ | 2,957 | $ | 8,674 | ||||||||||||||
(1) Excluding purchase price accounting.
Each TRS and foreign entity subject to income taxes is a tax paying component for purposes of classifying deferred tax assets and liabilities. The tax effects of taxable and deductible temporary differences, as well as tax asset/(liability) attributes, are summarized as follows for the periods presented (in thousands):
102
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Investments and property, primarily differences in investment basis, depreciation and amortization, the basis of land assets and the treatment of interests and certain costs | $ | (24,085) | $ | (13,064) | $ | (2,533) | ||||||||||||||
| Operating loss and interest deduction carryforwards | 196,634 | 127,525 | 98,713 | |||||||||||||||||
| Expense accruals and other | 72,459 | 43,056 | 48,804 | |||||||||||||||||
| Valuation allowances | (244,938) | (159,057) | (155,592) | |||||||||||||||||
| Net deferred tax assets (liabilities) | $ | 70 | $ | (1,540) | $ | (10,608) | ||||||||||||||
On the basis of the evaluations performed as required by the codification, valuation allowances totaling $244,938,000 were recorded on U.S. taxable REIT subsidiaries as well as entities in other jurisdictions to limit the deferred tax assets to the amount that we believe is more likely than not realizable. However, the amount of the deferred tax asset considered realizable could be adjusted if (i) estimates of future taxable income during the carryforward period are reduced or increased or (ii) objective negative evidence in the form of cumulative losses is no longer present (and additional weight may be given to subjective evidence such as our projections for growth). The valuation allowance rollforward is summarized as follows for the periods presented (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Beginning balance | $ | 159,057 | $ | 155,592 | $ | 127,283 | ||||||||||||||
| Expense (benefit) | 85,881 | 3,465 | 28,309 | |||||||||||||||||
| Ending balance | $ | 244,938 | $ | 159,057 | $ | 155,592 | ||||||||||||||
As a result of certain acquisitions, we are subject to corporate level taxes for any related asset dispositions that may occur during the five-year period immediately after such assets were owned by a C corporation (“built-in gains tax”). The amount of income potentially subject to this special corporate level tax is generally equal to the lesser of (i) the excess of the fair value of the asset over its adjusted tax basis as of the date it became a REIT asset, or (ii) the actual amount of gain. Some but not all gains recognized during this period of time could be offset by available net operating losses and capital loss carryforwards. During the year ended December 31, 2017, we acquired certain additional assets with built-in gains as of the date of acquisition that could be subject to the built-in gains tax if disposed of prior to the expiration of the applicable five-year period. We have not recorded a deferred tax liability as a result of the potential built-in gains tax based on our intentions with respect to such properties and available tax planning strategies.
Given the applicable statute of limitations, we generally are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2017 and subsequent years. The statute of limitations may vary in the states in which we own properties or conduct business. We do not expect to be subject to audit by state taxing authorities for any year prior to the year ended December 31, 2016. We are also subject to audit by the Canada Revenue Agency and provincial authorities generally for periods subsequent to May 2016 related to entities acquired or formed in connection with acquisitions, and by the U.K.’s HM Revenue & Customs for periods subsequent to August 2014 related to entities acquired or formed in connection with acquisitions.
At December 31, 2020, we had a net operating loss (“NOL”) carryforward related to the REIT of $351,254,000. Due to our uncertainty regarding the realization of certain deferred tax assets, we have not recorded a deferred tax asset related to NOLs generated by the REIT. These amounts can be used to offset future taxable income (and/or taxable income for prior years if an audit determines that tax is owed), if any. The REIT will be entitled to utilize NOLs and tax credit carryforwards only to the extent that REIT taxable income exceeds our deduction for dividends paid. The NOL carryforwards generated through December 31, 2018 will expire through 2038. Beginning with the tax years after December 31, 2017, the law eliminates the NOL carryback period for REITs, replaces the 20-year NOL carryforward period with an indefinite carryforward period and, with respect to tax years beginning after 2020, limits the use of NOLs to 80% of taxable income.
At December 31, 2020 and 2019, we had an NOL carryforward related to Canadian entities of $262,345,000 and $195,791,000 respectively. These Canadian losses have a 20-year carryforward period. At December 31, 2020 and 2019, we had an NOL carryforward related to U.K. entities of $207,085,000 and $209,776,000 respectively. These U.K. losses do not have a finite carryforward period.
The CARES Act, among its economic stimulus provisions, includes a number of tax provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carrybacks, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Certain of these provisions may impact the provision for taxes in our consolidated financial statements, including in particular the provision allowing for the carryback of net operating losses which would be applicable to our TRSs. We have made a reasonable estimate of the tax impact to us of the CARES Act in our consolidated financial
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WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
statements, and while we do not believe that there will be further material impacts to the consolidated financial statements related to the CARES Act tax provisions, we will continue to evaluate the impact of the CARES Act and any guidance provided by the U.S. Treasury and the IRS on our consolidated financial statements. It is possible our estimates could differ materially from the actual tax impact to us of the CARES Act.
20. Quarterly Results of Operations (Unaudited)
The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2020 and 2019 (in thousands, except per share data). The sum of individual quarterly amounts may not agree to the annual amounts included in the Consolidated Statements of Comprehensive Income due to rounding.
| Year Ended December 31, 2020 | ||||||||||||||||||||||||||
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||||||||||||||
| Revenues | $ | 1,258,602 | $ | 1,188,475 | $ | 1,036,874 | $ | 1,122,016 | ||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 310,284 | $ | 179,246 | $ | 325,585 | $ | 163,729 | ||||||||||||||||||
| Net income (loss) attributable to common stockholders per share: | ||||||||||||||||||||||||||
| Basic | $ | 0.76 | $ | 0.43 | $ | 0.78 | $ | 0.39 | ||||||||||||||||||
Diluted (1) | $ | 0.75 | $ | 0.42 | $ | 0.77 | $ | 0.39 | ||||||||||||||||||
| Year Ended December 31, 2019 | ||||||||||||||||||||||||||
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||||||||||||||
| Revenues | $ | 1,272,245 | $ | 1,320,106 | $ | 1,266,133 | $ | 1,262,822 | ||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 280,470 | $ | 137,762 | $ | 589,876 | $ | 224,324 | ||||||||||||||||||
| Net income (loss) attributable to common stockholders per share: | ||||||||||||||||||||||||||
| Basic | $ | 0.72 | $ | 0.34 | $ | 1.46 | $ | 0.55 | ||||||||||||||||||
Diluted (1) | $ | 0.71 | $ | 0.34 | $ | 1.45 | $ | 0.55 | ||||||||||||||||||
(1) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. | ||||||||||||||||||||||||||
21. Variable Interest Entities
We have entered into joint ventures to own certain seniors housing and outpatient medical assets which are deemed to be VIEs. We have concluded that we are the primary beneficiary of these VIEs based on a combination of operational control of the joint venture and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures. Except for capital contributions associated with the initial joint venture formations, the joint ventures have been and are expected to be funded from the ongoing operations of the underlying properties. Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs in the aggregate (in thousands):
| December 31, 2020 | December 31, 2019 | |||||||||||||
| Assets: | ||||||||||||||
| Net real estate investments | $ | 454,333 | $ | 960,093 | ||||||||||
| Cash and cash equivalents | 15,547 | 27,522 | ||||||||||||
| Receivables and other assets | 11,171 | 14,586 | ||||||||||||
Total assets(1) | $ | 481,051 | $ | 1,002,201 | ||||||||||
| Liabilities and equity: | ||||||||||||||
| Secured debt | $ | 165,671 | $ | 460,117 | ||||||||||
| Lease liabilities | 1,325 | 1,326 | ||||||||||||
| Accrued expenses and other liabilities | 14,997 | 22,215 | ||||||||||||
| Total equity | 299,058 | 518,543 | ||||||||||||
| Total liabilities and equity | $ | 481,051 | $ | 1,002,201 | ||||||||||
(1) Note that assets of the consolidated VIEs can only be used to settle obligations relating to such VIEs. Liabilities of the consolidated VIEs represent claims against the specific assets of the VIEs.
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020 based on the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) in a report entitled Internal Control — Integrated Framework.
Based on this assessment, using the criteria above, management concluded that the Company’s system of internal control over financial reporting was effective as of December 31, 2020.
The independent registered public accounting firm of Ernst & Young LLP, as auditors of the Company’s consolidated financial statements, has issued an attestation report on the Company’s internal control over financial reporting.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended) occurred during the fourth quarter of the one-year period covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Welltower Inc.
Opinion on Internal Control over Financial Reporting
We have audited Welltower Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Welltower Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Welltower Inc. and subsidiaries as of December 31, 2020 and 2019, the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedules listed in the index at Item 15(a) and our report dated February 10, 2021 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Toledo, Ohio
February 10, 2021
106
Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item is incorporated herein by reference to the information under the headings “Election of Directors,” “Corporate Governance,” “Executive Officers,” and “Security Ownership of Directors and Management and Certain Beneficial Owners — Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement, which will be filed with the Securities and Exchange Commission (the “Commission”) prior to April 30, 2021.
We have adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees. The code is posted on the Internet at www.welltower.com/investors/governance. Any amendment to, or waivers from, the code that relate to any officer or director of the company will be promptly disclosed on the Internet at www.welltower.com.
In addition, the Board has adopted charters for the Audit, Compensation and Nominating/Corporate Governance Committees. These charters are posted on the Internet at www.welltower.com/investors/governance. Please refer to “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Summary – Corporate Governance” in the Annual Report on Form 10-K for further discussion of corporate governance.
The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.
Item 11. Executive Compensation
The information required by this Item is incorporated herein by reference to the information under the headings “Executive Compensation” and “Director Compensation” in our definitive proxy statement, which will be filed with the Commission prior to April 30, 2021.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item is incorporated herein by reference to the information under the headings “Security Ownership of Directors and Management and Certain Beneficial Owners” and “Equity Compensation Plan Information” in our definitive proxy statement, which will be filed with the Commission prior to April 30, 2021.
Item 13. Certain Relationships and Related Transactions and Director Independence
The information required by this Item is incorporated herein by reference to the information under the headings “Corporate Governance — Independence and Meetings” and “Security Ownership of Directors and Management and Certain Beneficial Owners — Certain Relationships and Related Transactions” in our definitive proxy statement, which will be filed with the Commission prior to April 30, 2021.
Item 14. Principal Accounting Fees and Services
The information required by this Item is incorporated herein by reference to the information under the heading “Ratification of the Appointment of the Independent Registered Public Accounting Firm” in our definitive proxy statement, which will be filed with the Commission prior to April 30, 2021.
107
PART IV
Item 15. Exhibits and Financial Statement Schedules
1. (i) Our Consolidated Financial Statements are included in Part II, Item 8:
| Report of Independent Registered Public Accounting Firm | |||||
Consolidated Balance Sheets – December 31, 2020 and 2019 | |||||
Consolidated Statements of Comprehensive Income — Years ended December 31, 2020, 2019 and 2018 | |||||
Consolidated Statements of Equity — Years ended December 31, 2020, 2019 and 2018 | |||||
Consolidated Statements of Cash Flows — Years ended December 31, 2020, 2019 and 2018 | |||||
| Notes to Consolidated Financial Statements | |||||
(ii) The following Financial Statement Schedules are included beginning on page 116
III – Real Estate and Accumulated Depreciation
IV – Mortgage Loans on Real Estate
The financial statement schedule required by Item15(a) (Schedule II, Valuation and Qualifying Accounts) is included in Item 8 of this Annual Report on Form 10-K.
2. Exhibits:
The exhibits listed below are either filed with this Form 10-K or incorporated by reference in accordance with Rule 12b-32 of the Securities Exchange Act of 1934.
108
3.1(a) Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-K filed March 20, 2000 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(c) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed June 13, 2003 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(e) Certificate of Change of Location of Registered Office and of Registered Agent of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-Q filed August 6, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(f) Certificate of Designation of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed March 7, 2011 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(g) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed May 10, 2011 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(i) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed September 30, 2015 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(a) Indenture, dated as of March 15, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed March 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(c) Amendment No. 1 to Supplemental Indenture No. 1, dated as of June 18, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed June 18, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(d) Supplemental Indenture No. 2, dated as of April 7, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed April 7, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(e) Amendment No. 1 to Supplemental Indenture No. 2, dated as of June 8, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed June 8, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
109
4.1(f) Supplemental Indenture No. 3, dated as of September 10, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed September 13, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(g) Supplemental Indenture No. 4, dated as of November 16, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 16, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(i) Supplemental Indenture No. 6, dated as of April 3, 2012, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed April 4, 2012 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(j) Supplemental Indenture No. 7, dated as of December 6, 2012, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed December 11, 2012 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(l) Supplemental Indenture No. 9, dated as of November 20, 2013, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 20, 2013 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(m) Supplemental Indenture No. 10, dated as of November 25, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 25, 2014 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(o) Amendment No. 1 to Supplemental Indenture No. 11, dated as of October 19, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed October 20, 2015 (File No. 001-08923), and incorporated herein by reference thereto).
110
4.4(a) Indenture, dated as of November 25, 2015, by and among HCN Canadian Holdings-1 LP, the Company and BNY Trust Company of Canada (filed with the Commission as Exhibit 4.5(a) to the Company’s Form 10-K filed February 18, 2016 (File No. 001-08923), and incorporated herein by reference thereto).
4.4(b) First Supplemental Indenture, dated as of November 25, 2015, by and among HCN Canadian Holdings-1 LP, the Company and BNY Trust Company of Canada (filed with the Commission as Exhibit 4.5(b) to the Company’s Form 10-K filed February 18, 2016 (File No. 001-08923), and incorporated herein by reference thereto).
10.2(a) Amended and Restated Health Care REIT, Inc. 2005 Long-Term Incentive Plan (filed with the Commission as Appendix A to the Company’s Proxy Statement for the 2009 Annual Meeting of Stockholders, filed March 25, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.2(c) Form of Stock Option Agreement (without Dividend Equivalent Rights) for Executive Officers under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*
10.2(d) Form of Restricted Stock Agreement for the Chief Executive Officer under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*
111
10.2(e) Form of Restricted Stock Agreement for Executive Officers under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*
112
101.INS Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
104 The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline XBRL (included in Exhibit 101)
113
| * | Management Contract or Compensatory Plan or Arrangement. | |||||||
Item 16. Form 10-K Summary
None.
114
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 10, 2021
WELLTOWER INC.
By: /s/ Shankh Mitra
Shankh Mitra,
Chief Executive Officer, Chief Investment Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 10, 2021 by the following persons on behalf of the Registrant and in the capacities indicated.
| /s/ Kenneth J. Bacon ** | /s/ Johnese M. Spisso ** | |||||||
| Kenneth J. Bacon, Chairman and Director | Johnese M. Spisso, Director | |||||||
| /s/ Karen B. DeSalvo ** | /s/ Kathryn M. Sullivan ** | |||||||
| Karen B. DeSalvo, Director | Kathryn M. Sullivan, Director | |||||||
| /s/ Jeffrey H. Donahue ** | /s/ Shankh Mitra ** | |||||||
| Jeffrey H. Donahue, Director | Shankh Mitra, Chief Executive Officer, Chief Investment Officer and Director | |||||||
| (Principal Executive Officer) | ||||||||
| /s/ Philip L. Hawkins ** | /s/ Timothy G. McHugh ** | |||||||
| Philip L. Hawkins, Director | Timothy G. McHugh, Executive Vice President - Chief | |||||||
| Financial Officer (Principal Financial Officer) | ||||||||
| /s/ Sharon M. Oster ** | /s/ Joshua T. Fieweger** | |||||||
| Sharon M. Oster, Director | Joshua T. Fieweger, Chief Accounting Officer | |||||||
| (Principal Accounting Officer) | ||||||||
| /s/ Diana W. Reid ** | ||||||||
| Diana W. Reid, Director | ||||||||
| /s/ Sergio D. Rivera ** | **By: /s/ Shankh Mitra | |||||||
| Sergio D. Rivera, Director | Shankh Mitra, Attorney-in-Fact | |||||||
115
| Welltower Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate and Accumulated Depreciation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adderbury, UK | $ | — | $ | 2,144 | $ | 12,549 | $ | 1,178 | $ | 2,296 | $ | 13,575 | $ | 1,478 | 2015 | 2017 | Banbury Road | |||||||||||||||||||||||||||||||||||||||||||||
| Albertville, AL | — | 170 | 6,203 | 1,079 | 176 | 7,276 | 2,233 | 2010 | 1999 | 151 Woodham Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alexandria, VA | — | 8,280 | 50,914 | 411 | 8,280 | 51,325 | 3,881 | 2016 | 2018 | 5550 Cardinal Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Altrincham, UK | — | 4,244 | 25,187 | 4,252 | 4,700 | 28,983 | 7,942 | 2012 | 2009 | 295 Hale Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amherst, NY | — | 1,136 | 10,522 | 806 | 1,136 | 11,328 | 1,371 | 2019 | 2013 | 1880 Sweet Home Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amherstview, ON | — | 473 | 4,446 | 804 | 527 | 5,196 | 1,213 | 2015 | 1974 | 4567 Bath Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Anderson, SC | — | 710 | 6,290 | 1,159 | 710 | 7,449 | 4,147 | 2003 | 1986 | 311 Simpson Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ankeny, IA | — | 1,129 | 10,270 | 116 | 1,146 | 10,369 | 1,241 | 2016 | 2012 | 1275 SW State Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Apple Valley, CA | — | 480 | 16,639 | 1,893 | 486 | 18,526 | 5,658 | 2010 | 1999 | 11825 Apple Valley Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arlington, TX | — | 1,660 | 37,395 | 3,860 | 1,660 | 41,255 | 12,160 | 2012 | 2000 | 1250 West Pioneer Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arlington, VA | — | 8,385 | 31,198 | 15,809 | 8,393 | 46,999 | 18,499 | 2017 | 1992 | 900 N Taylor Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arlington, VA | — | — | 2,338 | 1,742 | 76 | 4,004 | 550 | 2018 | 1992 | 900 N Taylor Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arnprior, ON | — | 788 | 6,283 | 1,098 | 863 | 7,306 | 2,015 | 2013 | 1991 | 15 Arthur Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Atlanta, GA | — | 2,058 | 14,914 | 3,825 | 2,080 | 18,717 | 12,682 | 1997 | 1999 | 1460 S Johnson Ferry Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Atlanta, GA | — | 2,100 | 20,603 | 1,872 | 2,206 | 22,369 | 5,546 | 2014 | 2000 | 1000 Lenox Park Blvd NE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin, TX | — | 880 | 9,520 | 2,717 | 885 | 12,232 | 6,580 | 1999 | 1998 | 12429 Scofield Farms Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin, TX | — | 1,560 | 21,413 | 853 | 1,574 | 22,252 | 4,204 | 2014 | 2013 | 11330 Farrah Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin, TX | — | 4,200 | 74,850 | 1,744 | 4,200 | 76,594 | 12,324 | 2015 | 2014 | 4310 Bee Caves Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bagshot, UK | — | 4,960 | 29,881 | 8,525 | 5,499 | 37,867 | 10,118 | 2012 | 2009 | 14 - 16 London Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ballston Spa, NY | — | 5,532 | 17,823 | 173 | 5,532 | 17,996 | 62 | 2020 | 2019 | 2000 Carlton Hollow Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Banstead, UK | — | 6,695 | 55,113 | 13,868 | 7,468 | 68,208 | 17,976 | 2012 | 2005 | Croydon Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basingstoke, UK | — | 3,420 | 18,853 | 2,820 | 3,787 | 21,306 | 3,945 | 2014 | 2012 | Grove Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basking Ridge, NJ | — | 2,356 | 37,710 | 1,776 | 2,395 | 39,447 | 10,183 | 2013 | 2002 | 404 King George Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bassett, UK | — | 4,874 | 32,304 | 10,899 | 5,411 | 42,666 | 12,448 | 2013 | 2006 | 111 Burgess Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bath, UK | — | 2,696 | 11,876 | 1,321 | 2,888 | 13,005 | 1,413 | 2015 | 2017 | Clarks Way, Rush Hill | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Baton Rouge, LA | 12,930 | 790 | 29,436 | 1,366 | 886 | 30,706 | 7,788 | 2013 | 2009 | 9351 Siegen Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beaconsfield, UK | — | 5,566 | 50,952 | 6,670 | 6,175 | 57,013 | 14,248 | 2013 | 2009 | 30-34 Station Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beaconsfield, QC | — | 1,149 | 17,484 | 2,113 | 1,310 | 19,436 | 6,210 | 2013 | 2008 | 505 Elm Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beavercreek, OH | — | 981 | 11,187 | — | 981 | 11,187 | 345 | 2019 | 2020 | 2475 Lillian Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bee Cave, TX | — | 1,820 | 21,084 | 727 | 1,832 | 21,799 | 3,286 | 2016 | 2014 | 14058 A Bee Cave Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bellevue, WA | — | 2,800 | 19,004 | 2,734 | 2,816 | 21,722 | 6,821 | 2013 | 1998 | 15928 NE 8th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bellingham, WA | — | 1,500 | 19,861 | 1,920 | 1,507 | 21,774 | 6,629 | 2010 | 1996 | 4415 Columbine Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bellingham, WA | — | — | — | 18,529 | 1,290 | 17,239 | 6 | 2020 | 1999 | 848 W Orchard Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Belmont, CA | — | — | 35,300 | 2,576 | 178 | 37,698 | 10,196 | 2013 | 2002 | 1010 Alameda de Las Pulgas | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethel Park, PA | — | 1,626 | 12,947 | — | 1,626 | 12,947 | 775 | 2019 | 2019 | 631 McMurray Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethesda, MD | — | — | 45,309 | 1,395 | 3 | 46,701 | 11,970 | 2013 | 2009 | 8300 Burdett Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethesda, MD | — | — | — | 69,551 | 3,513 | 66,038 | 3,225 | 2016 | 2018 | 4925 Battery Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethesda, MD | — | — | 45 | 893 | — | 938 | 351 | 2013 | 2009 | 8300 Burdett Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethesda, MD | — | — | 212 | 926 | — | 1,138 | 642 | 2013 | 2009 | 8300 Burdett Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Birmingham, UK | — | 4 | 19,646 | 148 | 152 | 19,646 | 5,292 | 2013 | 2006 | 5 Church Road, Edgbaston | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Birmingham, UK | — | 1,480 | 13,014 | 1,799 | 1,639 | 14,654 | 1,668 | 2015 | 2016 | 47 Bristol Road South | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Birmingham, UK | — | 2,807 | 11,313 | 2,156 | 3,108 | 13,168 | 1,466 | 2015 | 2016 | 134 Jockey Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Blainville, QC | — | 2,077 | 8,902 | 1,648 | 2,340 | 10,287 | 3,589 | 2013 | 2008 | 50 des Chateaux Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bloomfield Hills, MI | — | 2,000 | 35,662 | 1,437 | 2,133 | 36,966 | 9,457 | 2013 | 2009 | 6790 Telegraph Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boca Raton, FL | 32,270 | 6,565 | 111,247 | 26,328 | 6,991 | 137,149 | 28,424 | 2018 | 1994 | 6343 Via De Sonrise Del Sur | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boise, ID | — | 2,220 | 18,881 | 1,830 | 2,220 | 20,711 | 2,419 | 2019 | 1999 | 10250 W Smoke Ranch Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borehamwood, UK | — | 5,367 | 41,937 | 6,100 | 5,983 | 47,421 | 12,648 | 2012 | 2003 | Edgwarebury Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bothell, WA | — | 1,350 | 13,439 | 6,986 | 1,827 | 19,948 | 4,434 | 2015 | 1988 | 10605 NE 185th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boulder, CO | — | 2,994 | 27,458 | 2,490 | 3,064 | 29,878 | 9,331 | 2013 | 2003 | 3955 28th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bournemouth, UK | — | 5,527 | 42,547 | 6,334 | 6,143 | 48,265 | 12,456 | 2013 | 2008 | 42 Belle Vue Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Braintree, MA | — | — | 41,290 | 1,282 | 100 | 42,472 | 11,224 | 2013 | 2007 | 618 Granite Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brampton, ON | 40,728 | 10,196 | 59,989 | 5,359 | 10,906 | 64,638 | 14,535 | 2015 | 2009 | 100 Ken Whillans Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brandon, MS | — | 1,220 | 10,241 | 867 | 1,220 | 11,108 | 2,945 | 2010 | 1999 | 140 Castlewoods Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bremerton, WA | — | — | — | 26,732 | 2,417 | 24,315 | 7 | 2020 | 1999 | 966 Oyster Bay Ct | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brentwood, UK | — | 8,537 | 45,869 | 6,786 | 9,454 | 51,738 | 5,881 | 2016 | 2013 | London Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brick, NJ | — | 1,170 | 17,372 | 1,797 | 1,213 | 19,126 | 5,383 | 2010 | 1998 | 515 Jack Martin Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brick, NJ | — | 690 | 17,125 | 5,933 | 695 | 23,053 | 5,412 | 2010 | 1999 | 1594 Route 88 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bridgewater, NJ | — | 1,730 | 48,201 | 2,992 | 1,774 | 51,149 | 13,166 | 2010 | 1999 | 2005 Route 22 West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brockport, NY | — | 1,500 | 23,355 | 142 | 1,642 | 23,355 | 4,552 | 2015 | 1999 | 90 West Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brockville, ON | 4,301 | 484 | 7,445 | 1,110 | 533 | 8,506 | 1,754 | 2015 | 1996 | 1026 Bridlewood Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brookfield, WI | — | 1,300 | 12,830 | 227 | 1,300 | 13,057 | 2,511 | 2012 | 2013 | 1105 Davidson Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Broomfield, CO | — | 4,140 | 44,547 | 14,643 | 10,140 | 53,190 | 20,993 | 2013 | 2009 | 400 Summit Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brossard, QC | 10,233 | 5,499 | 31,854 | 3,463 | 5,813 | 35,003 | 8,694 | 2015 | 1989 | 2455 Boulevard Rome | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Buckingham, UK | — | 2,979 | 13,880 | 2,521 | 3,327 | 16,053 | 3,035 | 2014 | 1883 | Church Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Buffalo Grove, IL | — | 2,850 | 49,129 | 4,325 | 2,850 | 53,454 | 13,701 | 2012 | 2003 | 500 McHenry Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burbank, CA | — | 4,940 | 43,466 | 4,846 | 4,940 | 48,312 | 13,352 | 2012 | 2002 | 455 E. Angeleno Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burbank, CA | 18,476 | 3,610 | 50,817 | 4,315 | 3,610 | 55,132 | 8,536 | 2016 | 1985 | 2721 Willow Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burke, VA | — | — | — | 52,550 | 2,575 | 49,975 | 2,496 | 2016 | 2018 | 9617 Burke Lake Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burleson, TX | — | 3,150 | 10,437 | 702 | 3,150 | 11,139 | 1,986 | 2012 | 2014 | 621 Old Highway 1187 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burlingame, CA | — | — | 62,786 | 141 | — | 62,927 | 8,886 | 2016 | 2015 | 1818 Trousdale Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burlington, ON | 17,594 | 1,309 | 19,311 | 2,676 | 1,433 | 21,863 | 5,769 | 2013 | 1990 | 500 Appleby Line | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burlington, MA | — | 2,443 | 34,354 | 1,671 | 2,578 | 35,890 | 9,969 | 2013 | 2005 | 24 Mall Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burlington, WA | — | 877 | 15,030 | 915 | 877 | 15,945 | 1,833 | 2019 | 1999 | 410 S Norris St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burlington, WA | — | 768 | 7,622 | 568 | 768 | 8,190 | 1,090 | 2019 | 1996 | 112 / 210 North Skagit Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bushey, UK | — | 12,690 | 36,482 | 3,763 | 13,594 | 39,341 | 2,890 | 2015 | 2018 | Elton House, Elton Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calgary, AB | 10,958 | 2,252 | 37,415 | 4,441 | 2,481 | 41,627 | 11,250 | 2013 | 2003 | 20 Promenade Way SE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calgary, AB | 12,398 | 2,793 | 41,179 | 4,674 | 3,049 | 45,597 | 12,073 | 2013 | 1998 | 80 Edenwold Drive NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calgary, AB | 9,876 | 3,122 | 38,971 | 4,837 | 3,452 | 43,478 | 11,351 | 2013 | 1998 | 150 Scotia Landing NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calgary, AB | 21,132 | 3,431 | 28,983 | 4,317 | 3,718 | 33,013 | 7,963 | 2013 | 1989 | 9229 16th Street SW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calgary, AB | 24,841 | 2,385 | 36,776 | 5,754 | 2,595 | 42,320 | 8,175 | 2015 | 2006 | 2220-162nd Avenue SW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Camberley, UK | — | 2,654 | 5,736 | 20,037 | 5,947 | 22,480 | 2,847 | 2014 | 2016 | Fernhill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Camberley, UK | — | 9,974 | 39,168 | 3,791 | 10,684 | 42,249 | 4,098 | 2016 | 2017 | Pembroke Broadway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Camillus, NY | — | 2,071 | 11,149 | 766 | 2,071 | 11,915 | 1,442 | 2019 | 2016 | 3877 Milton Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cardiff, UK | — | 3,191 | 12,566 | 3,576 | 3,559 | 15,774 | 4,779 | 2013 | 2007 | 127 Cyncoed Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cardiff by the Sea, CA | 35,133 | 5,880 | 64,711 | 5,313 | 5,880 | 70,024 | 20,409 | 2011 | 2009 | 3535 Manchester Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carmichael, CA | 24,155 | 2,440 | 41,959 | 1,935 | 2,440 | 43,894 | 2,893 | 2019 | 2014 | 4717 Engle Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carol Stream, IL | — | 1,730 | 55,048 | 4,076 | 1,730 | 59,124 | 16,036 | 2012 | 2001 | 545 Belmont Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrollton, TX | — | 4,280 | 31,444 | 1,513 | 4,280 | 32,957 | 6,058 | 2013 | 2010 | 2105 North Josey Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cary, NC | — | 740 | 45,240 | 986 | 742 | 46,224 | 10,734 | 2013 | 2009 | 1206 West Chatham Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cary, NC | — | 6,112 | 70,008 | 10,053 | 6,155 | 80,018 | 13,977 | 2018 | 1999 | 300 Kildaire Woods Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cedar Hill, TX | — | — | — | 26,503 | 1,958 | 24,545 | 127 | 2020 | 2020 | 1240 East Pleasant Run | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cedar Park, TX | — | 1,750 | 15,664 | 775 | 1,750 | 16,439 | 1,929 | 2016 | 2015 | 800 C-Bar Ranch Trail | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cerritos, CA | — | — | 27,494 | 7,051 | — | 34,545 | 8,444 | 2016 | 2002 | 11000 New Falcon Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charlottesville, VA | — | 4,651 | 91,468 | 17,155 | 4,651 | 108,623 | 18,492 | 2018 | 1991 | 2610 Barracks Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chatham, ON | 382 | 1,098 | 12,462 | 4,231 | 1,272 | 16,519 | 4,229 | 2015 | 1965 | 25 Keil Drive North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chelmsford, MA | — | 1,040 | 10,951 | 4,744 | 1,123 | 15,612 | 5,392 | 2003 | 1997 | 4 Technology Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chertsey, UK | — | 9,566 | 25,886 | 3,241 | 10,247 | 28,446 | 2,645 | 2015 | 2018 | Bittams Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chesterfield, MO | — | 1,857 | 48,366 | 1,684 | 1,917 | 49,990 | 12,277 | 2013 | 2001 | 1880 Clarkson Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chesterton, IN | — | 2,980 | 37,496 | 1,246 | 2,980 | 38,742 | 216 | 2020 | 2019 | 700 Dickinson Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chorleywood, UK | — | 5,636 | 43,191 | 8,343 | 6,268 | 50,902 | 14,586 | 2013 | 2007 | High View, Rickmansworth Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chula Vista, CA | — | 2,072 | 22,163 | 1,506 | 2,186 | 23,555 | 6,264 | 2013 | 2003 | 3302 Bonita Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Church Crookham, UK | — | 2,591 | 14,215 | 2,512 | 2,890 | 16,428 | 3,855 | 2014 | 2014 | 2 Bourley Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cincinnati, OH | — | 1,750 | 11,287 | 79 | 1,750 | 11,366 | 723 | 2019 | 2019 | 732 Clough Pike Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Citrus Heights, CA | — | 2,300 | 31,876 | 2,353 | 2,300 | 34,229 | 10,753 | 2010 | 1997 | 7418 Stock Ranch Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Claremont, CA | — | 2,430 | 9,928 | 2,019 | 2,515 | 11,862 | 3,635 | 2013 | 2001 | 2053 North Towne Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clay, NY | — | 1,316 | 10,734 | 734 | 1,316 | 11,468 | 1,357 | 2019 | 2014 | 8547 Morgan Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cleburne, TX | — | 520 | 5,369 | 7 | 520 | 5,376 | 1,960 | 2006 | 2007 | 402 S Colonial Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cohasset, MA | — | 2,485 | 26,147 | 2,174 | 2,500 | 28,306 | 7,753 | 2013 | 1998 | 125 King Street (Rt 3A) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colleyville, TX | — | 1,050 | 17,082 | 53 | 1,050 | 17,135 | 1,848 | 2016 | 2013 | 8100 Precinct Line Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colorado Springs, CO | — | 800 | 14,756 | 2,060 | 1,034 | 16,582 | 4,791 | 2013 | 2001 | 2105 University Park Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colts Neck, NJ | — | 780 | 14,733 | 3,216 | 1,269 | 17,460 | 4,808 | 2010 | 2002 | 3 Meridian Circle | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbus, IN | — | 610 | 3,190 | — | 610 | 3,190 | 940 | 2010 | 1998 | 2564 Foxpointe Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conroe, TX | — | 980 | 7,771 | 27 | 980 | 7,798 | 2,423 | 2009 | 2010 | 903 Longmire Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Coos Bay, OR | — | — | — | 9,416 | 864 | 8,552 | 5 | 2020 | 1996 | 192 Norman Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Coos Bay, OR | — | — | — | 12,151 | 1,792 | 10,359 | 6 | 2020 | 2006 | 1855 Ocean Blvd SE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Coquitlam, BC | 8,721 | 3,047 | 24,567 | 3,352 | 3,344 | 27,622 | 8,403 | 2013 | 1990 | 1142 Dufferin Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crystal Lake, IL | — | 875 | 12,461 | 1,678 | 971 | 14,043 | 4,359 | 2013 | 2001 | 751 E Terra Cotta Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dallas, TX | — | 6,330 | 114,794 | 2,606 | 6,330 | 117,400 | 20,125 | 2015 | 2013 | 3535 N Hall Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Decatur, GA | — | — | — | 31,336 | 1,946 | 29,390 | 8,285 | 2013 | 1998 | 920 Clairemont Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Denver, CO | — | 1,450 | 19,389 | 4,606 | 1,450 | 23,995 | 5,701 | 2012 | 1997 | 4901 South Monaco Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Denver, CO | — | 2,910 | 35,838 | 6,259 | 2,910 | 42,097 | 11,184 | 2012 | 2007 | 8101 E Mississippi Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Denver, CO | — | 5,402 | 105,307 | 8,008 | 5,402 | 113,315 | 10,003 | 2019 | 2014 | 1500 Little Raven St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Denver, CO | — | — | — | 24,301 | 1,989 | 22,312 | 153 | 2020 | 2017 | 2979 Uinta Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dix Hills, NY | — | 3,808 | 39,014 | 2,279 | 3,959 | 41,142 | 10,964 | 2013 | 2003 | 337 Deer Park Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dollard-Des-Ormeaux, QC | — | 1,957 | 14,431 | 1,878 | 2,185 | 16,081 | 5,908 | 2013 | 2008 | 4377 St. Jean Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dresher, PA | 8,380 | 1,900 | 10,664 | 1,361 | 1,914 | 12,011 | 4,397 | 2013 | 2006 | 1650 Susquehanna Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dublin, OH | — | 1,169 | 25,345 | 157 | 1,169 | 25,502 | 3,903 | 2016 | 2015 | 4175 Stoneridge Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| East Amherst, NY | — | 1,626 | 10,765 | 863 | 1,626 | 11,628 | 1,501 | 2019 | 2015 | 8040 Roll Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| East Meadow, NY | — | 69 | 45,991 | 2,003 | 127 | 47,936 | 12,498 | 2013 | 2002 | 1555 Glen Curtiss Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| East Setauket, NY | — | 4,920 | 37,354 | 2,102 | 4,986 | 39,390 | 10,360 | 2013 | 2002 | 1 Sunrise Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eastbourne, UK | — | 4,145 | 33,744 | 4,798 | 4,604 | 38,083 | 10,244 | 2013 | 2008 | 6 Upper Kings Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edgbaston, UK | — | 2,720 | 13,969 | 2,142 | 3,012 | 15,819 | 1,792 | 2014 | 2015 | Speedwell Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edgewater, NJ | — | 4,561 | 25,047 | 1,896 | 4,564 | 26,940 | 7,439 | 2013 | 2000 | 351 River Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edison, NJ | — | 1,892 | 32,314 | 3,634 | 1,943 | 35,897 | 11,562 | 2013 | 1996 | 1801 Oak Tree Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edmonds, WA | — | 1,650 | 24,449 | 9,428 | 1,765 | 33,762 | 5,802 | 2015 | 1976 | 21500 72nd Avenue West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edmonds, WA | — | — | — | 30,883 | 2,891 | 27,992 | 6 | 2020 | 2000 | 180 2nd Ave S | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edmonton, AB | 7,871 | 1,589 | 29,819 | 4,079 | 1,782 | 33,705 | 9,321 | 2013 | 1999 | 103 Rabbit Hill Court NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edmonton, AB | 10,332 | 2,063 | 37,293 | 4,931 | 2,257 | 42,030 | 13,320 | 2013 | 1968 | 10015 103rd Avenue NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| El Dorado Hills, CA | — | 5,190 | 52,112 | 156 | 5,190 | 52,268 | 1,762 | 2017 | 2019 | 2020 Town Center West Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Encino, CA | — | 5,040 | 46,255 | 5,986 | 5,040 | 52,241 | 13,879 | 2012 | 2003 | 15451 Ventura Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Englishtown, NJ | — | 690 | 12,520 | 2,335 | 860 | 14,685 | 4,353 | 2010 | 1997 | 49 Lasatta Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Epsom, UK | — | 20,159 | 34,803 | 6,798 | 22,324 | 39,436 | 4,528 | 2016 | 2014 | 450-458 Reigate Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Erie, PA | — | 1,455 | 8,324 | 792 | 1,455 | 9,116 | 1,292 | 2019 | 2013 | 4400 East Lake Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Esher, UK | — | 5,783 | 48,361 | 10,235 | 6,427 | 57,952 | 14,454 | 2013 | 2006 | 42 Copsem Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Everett, WA | — | — | — | 9,923 | 638 | 9,285 | 4 | 2020 | 1998 | 524 75th St SE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fairfield, NJ | — | 3,120 | 43,868 | 2,447 | 3,255 | 46,180 | 12,090 | 2013 | 1998 | 47 Greenbrook Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fairfield, CA | — | 1,460 | 14,040 | 5,375 | 1,460 | 19,415 | 7,797 | 2002 | 1998 | 3350 Cherry Hills St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fairfield, OH | — | 1,416 | 12,627 | 294 | 1,416 | 12,921 | 991 | 2019 | 2018 | 520 Patterson Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fareham, UK | — | 3,408 | 17,970 | 2,900 | 3,800 | 20,478 | 4,373 | 2014 | 2012 | Redlands Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Florence, AL | — | 353 | 13,049 | 1,243 | 385 | 14,260 | 4,370 | 2010 | 1999 | 3275 County Road 47 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flossmoor, IL | — | 1,292 | 9,496 | 2,112 | 1,339 | 11,561 | 3,959 | 2013 | 2000 | 19715 Governors Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Folsom, CA | — | 1,490 | 32,754 | 101 | 1,490 | 32,855 | 6,212 | 2015 | 2014 | 1574 Creekside Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Wayne, IN | — | — | — | 46,548 | 3,637 | 42,911 | 183 | 2020 | 2018 | 3715 Union Chapel Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth, TX | — | 7,131 | 52,680 | 2,365 | 7,131 | 55,045 | 5,260 | 2019 | 2017 | 3401 Amador Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth, TX | — | — | — | 21,446 | 2,538 | 18,908 | 529 | 2020 | 2020 | 3401 Amador Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth, TX | — | 2,080 | 27,888 | 5,314 | 2,080 | 33,202 | 9,741 | 2012 | 2001 | 2151 Green Oaks Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth, TX | — | 1,740 | 19,799 | 766 | 1,740 | 20,565 | 3,011 | 2016 | 2014 | 7001 Bryant Irvin Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fremont, CA | — | 3,400 | 25,300 | 6,190 | 3,456 | 31,434 | 11,995 | 2005 | 1987 | 2860 Country Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fresno, CA | 23,376 | 2,459 | 33,023 | 1,755 | 2,459 | 34,778 | 2,543 | 2019 | 2014 | 5605 North Gates Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Frome, UK | — | 2,720 | 14,813 | 2,569 | 3,012 | 17,090 | 3,321 | 2014 | 2012 | Welshmill Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fullerton, CA | — | 1,964 | 19,989 | 1,277 | 1,998 | 21,232 | 5,885 | 2013 | 2008 | 2226 North Euclid Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gahanna, OH | — | 772 | 11,214 | 1,920 | 787 | 13,119 | 3,672 | 2013 | 1998 | 775 East Johnstown Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gardnerville, NV | — | 1,143 | 10,831 | 2,203 | 1,164 | 13,013 | 9,346 | 1998 | 1999 | 1565-A Virginia Ranch Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gig Harbor, WA | — | 1,560 | 15,947 | 2,347 | 1,583 | 18,271 | 5,298 | 2010 | 1994 | 3213 45th St. Court NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gilbert, AZ | 14,200 | 2,160 | 28,246 | 2,255 | 2,206 | 30,455 | 10,058 | 2013 | 2008 | 580 S. Gilbert Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Glen Cove, NY | — | 4,594 | 35,236 | 2,432 | 4,643 | 37,619 | 11,444 | 2013 | 1998 | 39 Forest Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Glenview, IL | — | 2,090 | 69,288 | 4,924 | 2,090 | 74,212 | 20,009 | 2012 | 2001 | 2200 Golf Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Golden Valley, MN | 3,600 | 1,520 | 33,513 | 1,609 | 1,634 | 35,008 | 8,973 | 2013 | 2005 | 4950 Olson Memorial Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Granbury, TX | — | 2,040 | 30,670 | 746 | 2,040 | 31,416 | 8,060 | 2011 | 2009 | 100 Watermark Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grimsby, ON | — | 636 | 5,617 | 947 | 694 | 6,506 | 1,441 | 2015 | 1991 | 84 Main Street East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grosse Pointe Woods, MI | — | 950 | 13,662 | 913 | 950 | 14,575 | 3,693 | 2013 | 2006 | 1850 Vernier Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grosse Pointe Woods, MI | — | 1,430 | 31,777 | 1,284 | 1,435 | 33,056 | 8,353 | 2013 | 2005 | 21260 Mack Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grove City, OH | 36,420 | 3,575 | 85,764 | 966 | 3,498 | 86,807 | 6,373 | 2018 | 2017 | 3717 Orders Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Guildford, UK | — | 5,361 | 56,494 | 7,236 | 5,940 | 63,151 | 15,926 | 2013 | 2006 | Astolat Way, Peasmarsh | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gurnee, IL | — | 890 | 27,931 | 2,610 | 935 | 30,496 | 7,606 | 2013 | 2002 | 500 North Hunt Club Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Haddonfield, NJ | — | 520 | 16,363 | 641 | 527 | 16,997 | 2,848 | 2011 | 2015 | 132 Warwick Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hamburg, NY | — | 967 | 10,014 | 821 | 967 | 10,835 | 1,368 | 2019 | 2009 | 4600 Southwestern Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hamilton, OH | — | 1,163 | 11,968 | — | 1,163 | 11,968 | 957 | 2019 | 2019 | 1740 Eden Park Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hampshire, UK | — | 4,172 | 26,035 | 3,658 | 4,632 | 29,233 | 7,764 | 2013 | 2006 | 22-26 Church Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Happy Valley, OR | — | 721 | 9,920 | 446 | 721 | 10,366 | 1,051 | 2019 | 1998 | 8915 S.E. Monterey | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Haverford, PA | — | 1,880 | 33,993 | 2,745 | 1,904 | 36,714 | 9,369 | 2010 | 2000 | 731 Old Buck Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Henderson, NV | — | 1,190 | 11,600 | 1,144 | 1,253 | 12,681 | 4,488 | 2013 | 2008 | 1555 West Horizon Ridge Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| High Wycombe, UK | — | 3,567 | 13,422 | 1,771 | 3,821 | 14,939 | 1,582 | 2015 | 2017 | The Row Lane End | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Highland Park, IL | — | 2,820 | 15,832 | 890 | 2,820 | 16,722 | 3,511 | 2011 | 2012 | 1651 Richfield Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Highland Park, IL | — | 2,250 | 25,313 | 1,626 | 2,271 | 26,918 | 7,965 | 2013 | 2005 | 1601 Green Bay Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hindhead, UK | — | 17,852 | 48,645 | 8,307 | 19,769 | 55,035 | 6,302 | 2016 | 2012 | Portsmouth Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hingham, MA | — | 1,440 | 32,292 | 408 | 1,444 | 32,696 | 6,220 | 2015 | 2012 | 1 Sgt. William B Terry Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Holbrook, NY | — | 3,957 | 35,337 | 2,406 | 4,219 | 37,481 | 9,723 | 2013 | 2001 | 320 Patchogue Holbrook Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Horley, UK | — | 2,332 | 12,144 | 2,413 | 2,591 | 14,298 | 3,379 | 2014 | 2014 | Court Lodge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | 3,830 | 55,674 | 8,871 | 3,830 | 64,545 | 18,811 | 2012 | 1998 | 2929 West Holcombe Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | 1,040 | 31,965 | 6,602 | 1,040 | 38,567 | 9,597 | 2012 | 1999 | 505 Bering Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | 1,750 | 15,603 | 1,672 | 1,750 | 17,275 | 2,155 | 2016 | 2014 | 10120 Louetta Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | 960 | 15,420 | — | 960 | 15,420 | 8,350 | 2011 | 1995 | 10225 Cypresswood Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Howell, NJ | 7,666 | 1,066 | 21,577 | 1,481 | 1,154 | 22,970 | 6,161 | 2010 | 2007 | 100 Meridian Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Huntington Beach, CA | — | 3,808 | 31,172 | 2,780 | 3,931 | 33,829 | 10,425 | 2013 | 2004 | 7401 Yorktown Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Independence, MO | — | 1,550 | 14,441 | — | 1,550 | 14,441 | 1,026 | 2019 | 2019 | 19301 East Eastland Ctr Ct | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jacksonville, FL | — | 6,550 | 29,454 | — | 6,550 | 29,454 | 1,395 | 2019 | 2019 | 10520 Validus Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Johns Creek, GA | — | 1,580 | 23,285 | 1,332 | 1,588 | 24,609 | 6,496 | 2013 | 2009 | 11405 Medlock Bridge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Johnson City, NY | — | 1,407 | 11,862 | 876 | 1,407 | 12,738 | 1,556 | 2019 | 2013 | 1035 Anna Maria Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kanata, ON | — | 1,689 | 28,670 | 2,552 | 1,778 | 31,133 | 8,426 | 2012 | 2005 | 70 Stonehaven Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kelowna, BC | 4,965 | 2,688 | 13,647 | 2,552 | 2,935 | 15,952 | 4,895 | 2013 | 1999 | 863 Leon Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kennebunk, ME | — | 2,700 | 30,204 | 5,668 | 3,304 | 35,268 | 14,599 | 2013 | 2006 | One Huntington Common Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kenner, LA | — | 1,100 | 10,036 | 3,132 | 1,100 | 13,168 | 10,562 | 1998 | 2000 | 1600 Joe Yenni Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kennett Square, PA | — | 1,050 | 22,946 | 918 | 1,104 | 23,810 | 6,138 | 2010 | 2008 | 301 Victoria Gardens Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kingston, ON | 12,018 | 1,030 | 11,416 | 1,968 | 1,165 | 13,249 | 2,524 | 2015 | 1983 | 181 Ontario Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kingston upon Thames, UK | — | 33,063 | 46,696 | 9,565 | 36,610 | 52,714 | 5,883 | 2016 | 2014 | Coombe Lane West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kingwood, TX | — | 480 | 9,777 | 999 | 480 | 10,776 | 3,084 | 2011 | 1999 | 22955 Eastex Freeway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kingwood, TX | — | 1,683 | 24,207 | 2,495 | 1,683 | 26,702 | 4,596 | 2017 | 2012 | 24025 Kingwood Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kirkland, WA | — | 1,880 | 4,315 | 2,248 | 1,880 | 6,563 | 2,334 | 2003 | 1996 | 6505 Lakeview Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kitchener, ON | 1,281 | 708 | 2,744 | 285 | 695 | 3,042 | 992 | 2013 | 1979 | 164 - 168 Ferfus Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kitchener, ON | 3,253 | 1,093 | 4,454 | 1,248 | 1,186 | 5,609 | 2,804 | 2013 | 1964 | 290 Queen Street South | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kitchener, ON | 12,138 | 1,341 | 13,939 | 5,013 | 1,498 | 18,795 | 4,293 | 2016 | 2003 | 1250 Weber Street E | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Klamath Falls, OR | — | — | — | 12,961 | 1,335 | 11,626 | 9 | 2020 | 2000 | 615 Washburn Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| La Palma, CA | — | 2,950 | 16,591 | 1,312 | 2,996 | 17,857 | 4,940 | 2013 | 2003 | 5321 La Palma Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lackawanna, NY | — | 1,015 | 5,280 | 478 | 1,015 | 5,758 | 826 | 2019 | 2002 | 133 Orchard Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lafayette Hill, PA | — | 1,750 | 11,848 | 2,427 | 1,867 | 14,158 | 5,021 | 2013 | 1998 | 429 Ridge Pike | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laguna Hills, CA | — | 12,820 | 75,926 | 19,497 | 12,820 | 95,423 | 21,737 | 2016 | 1988 | 24903 Moulton Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laguna Woods, CA | — | 11,280 | 76,485 | 13,280 | 11,280 | 89,765 | 18,637 | 2016 | 1987 | 24441 Calle Sonora | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laguna Woods, CA | — | 9,150 | 57,842 | 12,329 | 9,150 | 70,171 | 14,664 | 2016 | 1986 | 24962 Calle Aragon | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake Havasu City, AZ | — | — | — | 2,126 | 364 | 1,762 | 3 | 2020 | 2009 | 320 Lake Havasu Ave. N, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake Zurich, IL | — | 1,470 | 9,830 | 2,867 | 1,470 | 12,697 | 4,766 | 2011 | 2007 | 550 America Court | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lancaster, CA | — | 700 | 15,295 | 2,173 | 712 | 17,456 | 5,756 | 2010 | 1999 | 43051 15th St. West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lancaster, NY | — | 1,262 | 11,154 | 976 | 1,262 | 12,130 | 1,611 | 2019 | 2011 | 18 Pavement Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas, NV | — | — | — | 46,049 | 5,144 | 40,905 | 2,514 | 2020 | 1999 | 1600 S Valley View Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas, NV | — | — | — | 15,509 | 1,263 | 14,246 | 806 | 2020 | 2001 | 3300 Winterhaven Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas, NV | — | — | — | 25,440 | 2,201 | 23,239 | 1,352 | 2020 | 1997 | 3210 S Sandhill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laval, QC | 21,939 | 2,105 | 32,161 | 6,328 | 2,250 | 38,344 | 5,879 | 2018 | 2005 | 269, boulevard Ste. Rose | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laval, QC | 4,167 | 2,383 | 5,968 | 1,760 | 2,548 | 7,563 | 1,105 | 2018 | 1989 | 263, boulevard Ste. Rose | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lawrenceville, GA | — | 1,500 | 29,003 | 833 | 1,529 | 29,807 | 8,040 | 2013 | 2008 | 1375 Webb Gin House Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leatherhead, UK | — | 4,682 | 17,835 | 2,557 | 5,016 | 20,058 | 1,982 | 2015 | 2017 | Rectory Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leawood, KS | — | 2,490 | 32,493 | 5,960 | 5,610 | 35,333 | 9,682 | 2012 | 1999 | 4400 West 115th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lecanto, FL | — | 200 | 6,900 | 481 | 218 | 7,363 | 3,089 | 2004 | 1986 | 2341 W. Norvell Bryant Hwy. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lenexa, KS | 9,700 | 826 | 26,251 | 1,511 | 927 | 27,661 | 7,971 | 2013 | 2006 | 15055 West 87th Street Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lincroft, NJ | — | 9 | 19,958 | 1,933 | 131 | 21,769 | 5,983 | 2013 | 2002 | 734 Newman Springs Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Linwood, NJ | — | 800 | 21,984 | 2,050 | 861 | 23,973 | 6,397 | 2010 | 1997 | 432 Central Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Litchfield, CT | — | 1,240 | 17,908 | 11,751 | 1,292 | 29,607 | 6,509 | 2010 | 1998 | 19 Constitution Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Little Neck, NY | — | 3,350 | 38,461 | 3,204 | 3,358 | 41,657 | 10,809 | 2010 | 2000 | 5515 Little Neck Pkwy. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Livingston, NJ | — | 8,000 | 44,424 | 1,494 | 8,017 | 45,901 | 5,148 | 2015 | 2017 | 369 E Mt Pleasant Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lombard, IL | 17,010 | 2,130 | 59,943 | 1,884 | 2,218 | 61,739 | 15,787 | 2013 | 2009 | 2210 Fountain Square Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| London, UK | — | 3,121 | 10,027 | 2,450 | 3,471 | 12,127 | 2,483 | 2014 | 2012 | 71 Hatch Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| London, UK | — | 7,691 | 16,797 | 2,029 | 8,238 | 18,279 | 2,248 | 2015 | 2016 | 6 Victoria Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| London, UK | — | — | — | 77,904 | 24,836 | 53,068 | 1,047 | 2017 | 2020 | 39-41 East Hill, Wandsworth | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| London, ON | — | 987 | 8,228 | 1,414 | 1,105 | 9,524 | 2,117 | 2015 | 1989 | 760 Horizon Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| London, ON | 10,985 | 1,969 | 16,985 | 3,077 | 2,139 | 19,892 | 4,256 | 2015 | 1953 | 1486 Richmond Street North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| London, ON | — | 1,445 | 13,631 | 2,339 | 1,697 | 15,718 | 3,060 | 2015 | 1950 | 81 Grand Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Longueuil, QC | 8,891 | 3,992 | 23,711 | 4,942 | 4,411 | 28,234 | 6,240 | 2015 | 1989 | 70 Rue Levis | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Longview, TX | — | 610 | 5,520 | 6 | 610 | 5,526 | 2,022 | 2006 | 2007 | 311 E Hawkins Pkwy | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lorain, OH | — | 1,394 | 12,960 | 23 | 1,394 | 12,983 | 763 | 2019 | 2018 | 5401 North Pointe Pkwy | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Los Angeles, CA | 56,950 | — | 114,438 | 8,201 | — | 122,639 | 34,914 | 2011 | 2009 | 10475 Wilshire Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Los Angeles, CA | — | 3,540 | 19,007 | 3,979 | 3,540 | 22,986 | 6,560 | 2012 | 2001 | 2051 N. Highland Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Los Angeles, CA | — | — | 28,050 | 6,009 | 71 | 33,988 | 5,570 | 2016 | 2006 | 4061 Grand View Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisville, KY | — | 2,420 | 20,816 | 3,043 | 2,420 | 23,859 | 6,878 | 2012 | 1999 | 4600 Bowling Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisville, KY | 13,650 | 1,600 | 20,326 | 1,150 | 1,600 | 21,476 | 6,154 | 2013 | 2010 | 6700 Overlook Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisville, CO | — | 1,939 | 32,639 | 1,769 | 1,939 | 34,408 | 3,259 | 2019 | 2008 | 1336 E Hecla Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisville, CO | — | 1,156 | 27,170 | — | 1,156 | 27,170 | 1,228 | 2019 | 2019 | 1800 Plaza Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisville, CO | — | 2,584 | 52,320 | 6,311 | 2,584 | 58,631 | 6,825 | 2019 | 1999 | 1855 Plaza Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisville, CO | — | 1,391 | 15,783 | 682 | 1,391 | 16,465 | 1,458 | 2019 | 1999 | 282 McCaslin Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisville, CO | — | 2,332 | 44,245 | 2,681 | 2,332 | 46,926 | 4,656 | 2019 | 2004 | 1331 E Hecla Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lynnfield, MA | — | 3,165 | 45,200 | 2,821 | 3,757 | 47,429 | 12,922 | 2013 | 2006 | 55 Salem Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mahwah, NJ | — | 1,605 | 27,249 | 1,035 | 1,608 | 28,281 | 4,051 | 2012 | 2015 | 15 Edison Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Malvern, PA | — | 1,651 | 17,194 | 2,407 | 1,800 | 19,452 | 6,692 | 2013 | 1998 | 324 Lancaster Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mansfield, TX | — | 660 | 5,251 | 22 | 660 | 5,273 | 1,945 | 2006 | 2007 | 2281 Country Club Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Manteca, CA | — | 1,300 | 12,125 | 4,040 | 1,312 | 16,153 | 6,471 | 2005 | 1986 | 430 N. Union Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maple Ridge, BC | 8,171 | 2,875 | 11,922 | 2,060 | 3,244 | 13,613 | 2,194 | 2015 | 2009 | 12241 224th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marieville, QC | 6,097 | 1,278 | 12,113 | 1,360 | 1,414 | 13,337 | 2,607 | 2015 | 2002 | 425 rue Claude de Ramezay | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Markham, ON | 50,027 | 3,727 | 48,939 | 5,609 | 4,002 | 54,273 | 17,577 | 2013 | 1981 | 7700 Bayview Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marlboro, NJ | — | 2,222 | 14,888 | 1,619 | 2,268 | 16,461 | 4,821 | 2013 | 2002 | 3A South Main Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marlow, UK | — | 9,068 | 39,720 | 3,958 | 9,714 | 43,032 | 5,502 | 2013 | 2014 | 210 Little Marlow Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marysville, WA | — | 620 | 4,780 | 2,520 | 620 | 7,300 | 2,747 | 2003 | 1998 | 9802 48th Dr. N.E. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| McKinney, TX | — | 1,570 | 7,389 | 10 | 1,570 | 7,399 | 2,312 | 2009 | 2010 | 2701 Alma Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Medicine Hat, AB | 10,235 | 1,432 | 14,141 | 1,245 | 1,562 | 15,256 | 4,002 | 2015 | 1999 | 223 Park Meadows Drive SE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Medina, OH | — | 1,708 | 12,049 | 457 | 1,708 | 12,506 | 1,164 | 2019 | 2017 | 699 North Huntington St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Melbourne, FL | — | 7,070 | 48,257 | 44,815 | 7,070 | 93,072 | 28,795 | 2007 | 2009 | 7300 Watersong Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Melville, NY | — | 4,280 | 73,283 | 7,588 | 4,332 | 80,819 | 20,582 | 2010 | 2001 | 70 Pinelawn Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Memphis, TN | — | 1,800 | 17,744 | 2,960 | 1,800 | 20,704 | 7,011 | 2012 | 1999 | 6605 Quail Hollow Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Menomonee Falls, WI | — | 1,020 | 6,984 | 2,307 | 1,020 | 9,291 | 2,859 | 2006 | 2007 | W128 N6900 Northfield Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mesa, AZ | — | 950 | 9,087 | 3,872 | 950 | 12,959 | 6,010 | 1999 | 2000 | 7231 E. Broadway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Metairie, LA | 14,200 | 725 | 27,708 | 1,073 | 740 | 28,766 | 7,145 | 2013 | 2009 | 3732 West Esplanade Ave. S | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mill Creek, WA | — | 10,150 | 60,274 | 4,074 | 10,179 | 64,319 | 21,876 | 2010 | 1998 | 14905 Bothell-Everett Hwy | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Milton, ON | 19,529 | 4,542 | 25,321 | 4,439 | 4,966 | 29,336 | 4,996 | 2015 | 2012 | 611 Farmstead Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Minnetonka, MN | — | 920 | 29,344 | 1,269 | 964 | 30,569 | 7,644 | 2013 | 2006 | 18605 Old Excelsior Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mission Viejo, CA | 13,280 | 6,600 | 52,118 | 8,559 | 6,600 | 60,677 | 10,757 | 2016 | 1998 | 27783 Center Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mississauga, ON | 8,313 | 1,602 | 17,996 | 2,245 | 1,742 | 20,101 | 5,431 | 2013 | 1984 | 1130 Bough Beeches Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mississauga, ON | 2,802 | 873 | 4,655 | 703 | 949 | 5,282 | 1,540 | 2013 | 1978 | 3051 Constitution Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mississauga, ON | 26,739 | 3,649 | 35,137 | 4,763 | 4,004 | 39,545 | 10,655 | 2015 | 1988 | 1490 Rathburn Road East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mississauga, ON | 5,998 | 2,548 | 15,158 | 3,882 | 2,767 | 18,821 | 4,409 | 2015 | 1989 | 85 King Street East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Missoula, MT | — | 550 | 7,490 | 919 | 553 | 8,406 | 3,210 | 2005 | 1998 | 3620 American Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mobberley, UK | — | 5,146 | 26,665 | 4,409 | 5,728 | 30,492 | 9,758 | 2013 | 2007 | Barclay Park, Hall Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Molalla, OR | — | — | — | 5,468 | 1,210 | 4,258 | 4 | 2020 | 1998 | 835 E Main St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monterey, CA | — | 6,440 | 29,101 | 2,865 | 6,443 | 31,963 | 8,485 | 2013 | 2009 | 1110 Cass St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Montgomery, MD | — | 6,482 | 83,642 | 13,251 | 6,563 | 96,812 | 15,680 | 2018 | 1992 | 3701 International Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Montgomery Village, MD | — | 3,530 | 18,246 | 7,178 | 4,291 | 24,663 | 11,086 | 2013 | 1993 | 19310 Club House Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Montreal-Nord, QC | 11,450 | 4,407 | 23,719 | 10,196 | 4,713 | 33,609 | 5,405 | 2018 | 1988 | 6700, boulevard Gouin Est | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Moorestown, NJ | — | 2,060 | 51,628 | 7,445 | 2,095 | 59,038 | 14,024 | 2010 | 2000 | 1205 N. Church St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Moose Jaw, SK | 1,785 | 582 | 12,973 | 2,051 | 631 | 14,975 | 3,967 | 2013 | 2001 | 425 4th Avenue NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Morton Grove, IL | — | 1,900 | 19,374 | 923 | 1,900 | 20,297 | 4,871 | 2010 | 2011 | 5520 N. Lincoln Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Murphy, TX | — | 1,950 | 19,182 | 816 | 1,950 | 19,998 | 2,919 | 2015 | 2012 | 304 West FM 544 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nacogdoches, TX | — | 390 | 5,754 | 24 | 390 | 5,778 | 2,104 | 2006 | 2007 | 5902 North St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Naperville, IL | — | 1,550 | 12,237 | 2,282 | 1,550 | 14,519 | 4,204 | 2012 | 2013 | 1936 Brookdale Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Naperville, IL | — | 1,540 | 28,204 | 1,531 | 1,593 | 29,682 | 8,163 | 2013 | 2002 | 535 West Ogden Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nashville, TN | — | 3,900 | 35,788 | 4,426 | 3,900 | 40,214 | 12,856 | 2012 | 1999 | 4206 Stammer Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nepean, ON | 5,395 | 1,575 | 5,770 | 1,240 | 1,735 | 6,850 | 2,404 | 2015 | 1988 | 1 Mill Hill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| New Braunfels, TX | — | 1,200 | 19,800 | 10,442 | 2,729 | 28,713 | 6,464 | 2011 | 2009 | 2294 East Common Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newbury, UK | — | 2,850 | 12,796 | 2,074 | 3,156 | 14,564 | 1,717 | 2015 | 2016 | 370 London Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newmarket, UK | — | 4,071 | 11,902 | 3,108 | 4,529 | 14,552 | 3,297 | 2014 | 2011 | Jeddah Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newtown Square, PA | — | 1,930 | 14,420 | 1,686 | 1,953 | 16,083 | 5,468 | 2013 | 2004 | 333 S. Newtown Street Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Tonawanda, NY | — | 1,203 | 7,338 | 600 | 1,203 | 7,938 | 1,030 | 2019 | 2005 | 705 Sandra Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Tustin, CA | — | 2,880 | 18,059 | 1,037 | 3,044 | 18,932 | 4,630 | 2013 | 2000 | 12291 Newport Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oak Harbor, WA | — | 739 | 7,670 | 448 | 739 | 8,118 | 955 | 2019 | 1998 | 171 SW 6th Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oak Park, IL | — | 1,250 | 40,383 | 3,088 | 1,250 | 43,471 | 12,055 | 2012 | 2004 | 1035 Madison Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakdale, PA | — | 1,882 | 11,941 | 880 | 1,882 | 12,821 | 1,599 | 2019 | 2017 | 7420 Steubenville Pike | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakland, CA | — | 3,877 | 47,508 | 3,619 | 4,117 | 50,887 | 13,960 | 2013 | 1999 | 11889 Skyline Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakton, VA | — | 2,250 | 37,576 | 3,081 | 2,393 | 40,514 | 10,712 | 2013 | 1997 | 2863 Hunter Mill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakville, ON | 5,533 | 1,252 | 7,382 | 1,157 | 1,415 | 8,376 | 2,411 | 2013 | 1982 | 289 and 299 Randall Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakville, ON | 8,867 | 2,134 | 29,963 | 4,327 | 2,324 | 34,100 | 9,491 | 2013 | 1994 | 25 Lakeshore Road West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakville, ON | 4,647 | 1,271 | 13,754 | 2,153 | 1,391 | 15,787 | 3,939 | 2013 | 1988 | 345 Church Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ogden, UT | — | 360 | 6,700 | 1,231 | 360 | 7,931 | 3,102 | 2004 | 1998 | 1340 N. Washington Blv. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Okotoks, AB | 19,133 | 714 | 20,943 | 2,436 | 792 | 23,301 | 5,018 | 2015 | 2010 | 51 Riverside Gate | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Orange, CA | 35,726 | 8,021 | 65,189 | 3,238 | 8,021 | 68,427 | 4,046 | 2019 | 2018 | 630 The City Drive South | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oshawa, ON | 6,609 | 841 | 7,570 | 1,302 | 946 | 8,767 | 2,445 | 2013 | 1991 | 649 King Street East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 9,476 | 1,341 | 15,425 | 3,391 | 1,472 | 18,685 | 3,179 | 2015 | 2001 | 110 Berrigan Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 17,834 | 3,454 | 23,309 | 3,872 | 3,806 | 26,829 | 9,183 | 2015 | 1966 | 2370 Carling Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 20,373 | 4,256 | 39,141 | 3,116 | 4,551 | 41,962 | 7,496 | 2015 | 2005 | 751 Peter Morand Crescent | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 7,076 | 2,103 | 18,421 | 5,833 | 2,331 | 24,026 | 4,164 | 2015 | 1989 | 1 Eaton Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 13,466 | 2,963 | 26,424 | 4,433 | 3,263 | 30,557 | 5,313 | 2015 | 2008 | 691 Valin Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 10,169 | 1,561 | 18,170 | 3,517 | 1,769 | 21,479 | 3,608 | 2015 | 2006 | 22 Barnstone Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 13,374 | 3,403 | 31,090 | 4,858 | 3,730 | 35,621 | 5,964 | 2015 | 2009 | 990 Hunt Club Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 17,052 | 3,411 | 28,335 | 7,114 | 3,757 | 35,103 | 7,156 | 2015 | 2009 | 2 Valley Stream Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 2,750 | 724 | 4,710 | 721 | 786 | 5,369 | 1,564 | 2013 | 1995 | 1345 Ogilvie Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 2,001 | 818 | 2,165 | 1,338 | 740 | 3,581 | 1,183 | 2013 | 1993 | 370 Kennedy Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 9,193 | 2,809 | 27,299 | 3,787 | 3,030 | 30,865 | 9,859 | 2013 | 1998 | 43 Aylmer Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 4,427 | 1,156 | 9,758 | 1,386 | 1,283 | 11,017 | 2,928 | 2013 | 1998 | 1351 Hunt Club Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 5,761 | 746 | 7,800 | 1,471 | 848 | 9,169 | 2,411 | 2013 | 1999 | 140 Darlington Private | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, ON | 8,742 | 1,176 | 12,764 | 1,814 | 1,316 | 14,438 | 2,769 | 2015 | 1987 | 10 Vaughan Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outremont, QC | 17,538 | 6,746 | 45,981 | 12,666 | 7,214 | 58,179 | 9,960 | 2018 | 1976 | 1000, avenue Rockland | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Overland Park, KS | — | 1,540 | 16,269 | 2,197 | 1,670 | 18,336 | 4,577 | 2012 | 1998 | 9201 Foster | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palestine, TX | — | 180 | 4,320 | 1,328 | 180 | 5,648 | 2,083 | 2006 | 2005 | 1625 W. Spring St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palo Alto, CA | 25,050 | — | 39,639 | 3,214 | 24 | 42,829 | 11,441 | 2013 | 2007 | 2701 El Camino Real | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Paramus, NJ | — | 2,840 | 35,728 | 2,006 | 2,986 | 37,588 | 9,852 | 2013 | 1998 | 567 Paramus Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Paris, TX | — | 490 | 5,452 | 22 | 490 | 5,474 | 5,148 | 2005 | 2006 | 750 N Collegiate Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Parma, OH | — | 1,533 | 9,203 | 701 | 1,533 | 9,904 | 1,254 | 2019 | 2016 | 11500 Huffman Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Paso Robles, CA | — | 1,770 | 8,630 | 2,748 | 1,770 | 11,378 | 4,685 | 2002 | 1998 | 1919 Creston Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peabody, MA | 5,767 | 2,250 | 16,071 | 1,363 | 2,380 | 17,304 | 3,859 | 2013 | 1994 | 73 Margin Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pella, IA | — | 870 | 6,716 | 218 | 886 | 6,918 | 1,408 | 2012 | 2002 | 2602 Fifield Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pembroke, ON | — | 1,931 | 9,427 | 1,341 | 2,032 | 10,667 | 2,922 | 2012 | 1999 | 1111 Pembroke Street West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pennington, NJ | — | 1,380 | 27,620 | 1,557 | 1,507 | 29,050 | 7,227 | 2011 | 2000 | 143 West Franklin Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peoria, AZ | — | 766 | 21,796 | 1,552 | 766 | 23,348 | 3,314 | 2018 | 2014 | 13391 N 94th Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pittsburgh, PA | — | 1,580 | 18,017 | 11,751 | 1,587 | 29,761 | 5,750 | 2013 | 2009 | 900 Lincoln Club Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Placentia, CA | — | 8,480 | 17,076 | 6,087 | 8,513 | 23,130 | 5,396 | 2016 | 1987 | 1180 N Bradford Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plainview, NY | — | 3,066 | 19,901 | 1,261 | 3,182 | 21,046 | 5,342 | 2013 | 2001 | 1231 Old Country Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plano, TX | 28,960 | 3,120 | 59,950 | 4,143 | 3,231 | 63,982 | 20,101 | 2013 | 2006 | 4800 West Parker Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plano, TX | — | 1,750 | 15,390 | 1,545 | 1,750 | 16,935 | 2,292 | 2016 | 2014 | 3690 Mapleshade Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Playa Vista, CA | — | 1,580 | 40,531 | 3,340 | 1,677 | 43,774 | 11,332 | 2013 | 2006 | 5555 Playa Vista Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pleasanton, CA | — | — | — | 52,006 | 3,676 | 48,330 | 2,838 | 2016 | 2017 | 5700 Pleasant Hill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Port Perry, ON | 11,811 | 3,685 | 26,788 | 4,729 | 4,001 | 31,201 | 5,078 | 2015 | 2009 | 15987 Simcoe Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Port St. Lucie, FL | — | 8,700 | 47,230 | 21,304 | 8,700 | 68,534 | 21,013 | 2008 | 2010 | 10685 SW Stony Creek Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Portage, MI | 42,000 | 2,880 | 59,955 | 2,569 | 2,880 | 62,524 | 5,885 | 2019 | 2017 | 3951 W. Milham Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Princeton, NJ | — | 1,730 | 30,888 | 2,325 | 1,814 | 33,129 | 8,500 | 2011 | 2001 | 155 Raymond Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Princeton, NJ | — | — | — | 189 | — | 189 | — | 2020 | 2001 | 775 Mt Lucas Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purley, UK | — | 7,365 | 35,161 | 5,941 | 8,218 | 40,249 | 11,730 | 2012 | 2005 | 21 Russell Hill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Puyallup, WA | — | 1,150 | 20,776 | 2,348 | 1,156 | 23,118 | 7,047 | 2010 | 1985 | 123 Fourth Ave. NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quebec City, QC | 7,816 | 2,420 | 21,977 | 4,060 | 2,588 | 25,869 | 3,705 | 2018 | 2000 | 795, rue Alain | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quebec City, QC | 12,074 | 3,300 | 28,325 | 6,353 | 3,529 | 34,449 | 4,722 | 2018 | 1987 | 650 and 700, avenue Murray | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Queensbury, NY | — | 1,260 | 21,744 | 1,451 | 1,273 | 23,182 | 3,907 | 2015 | 1999 | 27 Woodvale Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rancho Cucamonga, CA | — | 1,480 | 10,055 | 2,295 | 2,084 | 11,746 | 3,834 | 2013 | 2001 | 9519 Baseline Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rancho Palos Verdes, CA | — | 5,450 | 60,034 | 6,368 | 5,450 | 66,402 | 17,880 | 2012 | 2004 | 5701 Crestridge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Randolph, NJ | 29,300 | 1,540 | 46,934 | 2,416 | 1,718 | 49,172 | 12,543 | 2013 | 2006 | 648 Route 10 West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Red Deer, AB | 12,346 | 1,247 | 19,283 | 3,064 | 1,368 | 22,226 | 4,375 | 2015 | 2004 | 3100 - 22 Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Red Deer, AB | 14,526 | 1,199 | 22,339 | 3,883 | 1,296 | 26,125 | 5,200 | 2015 | 2004 | 10 Inglewood Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redding, CA | 26,446 | 4,474 | 36,828 | 2,161 | 4,474 | 38,989 | 2,943 | 2019 | 2017 | 2150 Bechelli Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Regina, SK | 5,975 | 1,485 | 21,148 | 2,613 | 1,705 | 23,541 | 6,840 | 2013 | 1999 | 3651 Albert Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Regina, SK | 5,983 | 1,244 | 21,036 | 2,612 | 1,357 | 23,535 | 6,124 | 2013 | 2004 | 3105 Hillsdale Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Regina, SK | 15,178 | 1,539 | 24,053 | 5,214 | 1,678 | 29,128 | 5,238 | 2015 | 1992 | 1801 McIntyre Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rehoboth Beach, DE | — | 960 | 24,248 | 9,327 | 993 | 33,542 | 7,929 | 2010 | 1999 | 36101 Seaside Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reno, NV | — | 1,060 | 11,440 | 1,529 | 1,060 | 12,969 | 5,138 | 2004 | 1998 | 5165 Summit Ridge Court | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ridgeland, MS | — | 520 | 7,675 | 2,051 | 520 | 9,726 | 3,732 | 2003 | 1997 | 410 Orchard Park | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Riviere-du-Loup, QC | 2,733 | 592 | 7,601 | 1,592 | 694 | 9,091 | 1,704 | 2015 | 1956 | 35 des Cedres | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Riviere-du-Loup, QC | 12,015 | 1,454 | 16,848 | 5,728 | 1,847 | 22,183 | 5,068 | 2015 | 1993 | 230-235 rue Des Chenes | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rocky Hill, CT | — | 1,090 | 6,710 | 4,381 | 1,132 | 11,049 | 3,613 | 2003 | 1996 | 60 Cold Spring Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rohnert Park, CA | — | 6,500 | 18,700 | 4,467 | 6,546 | 23,121 | 9,016 | 2005 | 1986 | 4855 Snyder Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Romeoville, IL | — | 854 | 12,646 | 61,940 | 6,197 | 69,243 | 20,699 | 2006 | 2010 | 605 S Edward Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roseville, MN | — | 1,540 | 35,877 | 1,318 | 1,648 | 37,087 | 9,191 | 2013 | 2002 | 2555 Snelling Avenue, North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roseville, CA | — | 3,300 | 41,652 | 6,978 | 3,300 | 48,630 | 9,235 | 2016 | 2000 | 5161 Foothills Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roswell, GA | — | 1,107 | 9,627 | 3,277 | 1,114 | 12,897 | 8,730 | 1997 | 1999 | 655 Mansell Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roswell, GA | — | 2,080 | 6,486 | 3,577 | 2,380 | 9,763 | 2,377 | 2012 | 1997 | 75 Magnolia Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rowlett, TX | — | 1,610 | 21,254 | 223 | 1,610 | 21,477 | 176 | 2020 | 2019 | 4205-4209 Dalrock Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sabre Springs, CA | — | — | — | 46,910 | 3,726 | 43,184 | 2,326 | 2016 | 2017 | 12515 Springhurst Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sacramento, CA | — | 940 | 14,781 | 1,759 | 952 | 16,528 | 4,994 | 2010 | 1978 | 6350 Riverside Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sacramento, CA | — | 1,300 | 23,394 | 1,761 | 1,369 | 25,086 | 6,572 | 2013 | 2004 | 345 Munroe Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Saint-Lambert, QC | 33,489 | 10,259 | 61,903 | 9,649 | 11,208 | 70,603 | 18,472 | 2015 | 1989 | 1705 Avenue Victoria | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salem, OR | — | — | — | 11,341 | 916 | 10,425 | 5 | 2020 | 1999 | 4452 Lancaster Dr NE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salem, OR | — | — | — | 10,531 | 1,227 | 9,304 | 5 | 2020 | 1997 | 4050 12th Street Cutoff SE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salinas, CA | — | 5,110 | 41,424 | 11,019 | 5,150 | 52,403 | 10,619 | 2016 | 1990 | 1320 Padre Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salisbury, UK | — | 2,720 | 15,269 | 2,299 | 3,012 | 17,276 | 3,176 | 2014 | 2013 | Shapland Close | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salt Lake City, UT | — | 1,360 | 19,691 | 946 | 1,360 | 20,637 | 7,187 | 2011 | 1986 | 1430 E. 4500 S. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio, TX | — | 6,120 | 28,169 | 2,656 | 6,120 | 30,825 | 7,825 | 2010 | 2011 | 2702 Cembalo Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio, TX | — | 5,045 | 58,048 | 3,275 | 5,045 | 61,323 | 8,159 | 2017 | 2015 | 11300 Wild Pine | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio, TX | — | 11,686 | 69,620 | 3,634 | 11,686 | 73,254 | 6,766 | 2019 | 2016 | 6870 Heuermann Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Diego, CA | — | 5,810 | 63,078 | 4,276 | 5,810 | 67,354 | 20,890 | 2012 | 2001 | 13075 Evening Creek Drive S | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Diego, CA | — | 3,000 | 27,164 | 1,576 | 3,016 | 28,724 | 7,069 | 2013 | 2003 | 810 Turquoise Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Diego, CA | 29,359 | 4,179 | 40,607 | 1,920 | 4,179 | 42,527 | 2,939 | 2019 | 2017 | 955 Grand Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco, CA | — | 5,920 | 91,639 | 13,785 | 5,920 | 105,424 | 20,404 | 2016 | 1998 | 1550 Sutter Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco, CA | — | 11,800 | 77,214 | 10,544 | 11,800 | 87,758 | 16,961 | 2016 | 1923 | 1601 19th Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Gabriel, CA | — | 3,120 | 15,566 | 1,204 | 3,165 | 16,725 | 4,715 | 2013 | 2005 | 8332 Huntington Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Jose, CA | — | 3,280 | 46,823 | 4,443 | 3,280 | 51,266 | 14,267 | 2012 | 2002 | 500 S Winchester Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Jose, CA | — | 11,900 | 27,647 | 5,369 | 11,966 | 32,950 | 6,795 | 2016 | 2002 | 4855 San Felipe Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Rafael, CA | — | 1,620 | 27,392 | 4,109 | 1,860 | 31,261 | 5,333 | 2016 | 2001 | 111 Merrydale Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Ramon, CA | — | 8,700 | 72,223 | 10,149 | 8,768 | 82,304 | 15,770 | 2016 | 1992 | 9199 Fircrest Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sandy Springs, GA | — | 2,214 | 8,360 | 1,541 | 2,220 | 9,895 | 3,551 | 2012 | 1997 | 5455 Glenridge Drive NE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Santa Monica, CA | 15,820 | 5,250 | 28,340 | 1,166 | 5,266 | 29,490 | 7,717 | 2013 | 2004 | 1312 15th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Santa Rosa, CA | — | 2,250 | 26,273 | 3,761 | 2,292 | 29,992 | 5,429 | 2016 | 2001 | 4225 Wayvern Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Saskatoon, SK | 3,686 | 981 | 13,905 | 1,961 | 1,064 | 15,783 | 3,927 | 2013 | 1999 | 220 24th Street East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Saskatoon, SK | 13,136 | 1,382 | 17,609 | 2,564 | 1,568 | 19,987 | 4,858 | 2013 | 2004 | 1622 Acadia Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schaumburg, IL | — | 2,460 | 22,863 | 1,454 | 2,497 | 24,280 | 7,172 | 2013 | 2001 | 790 North Plum Grove Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Scottsdale, AZ | — | 2,500 | 3,890 | 1,505 | 2,500 | 5,395 | 1,692 | 2008 | 1998 | 9410 East Thunderbird Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Scranton, PA | — | 875 | 10,562 | 695 | 875 | 11,257 | 1,288 | 2019 | 2014 | 1651 Dickson Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seal Beach, CA | — | 6,204 | 72,954 | 3,165 | 6,271 | 76,052 | 23,111 | 2013 | 2004 | 3850 Lampson Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seattle, WA | — | 5,190 | 9,350 | 2,031 | 5,199 | 11,372 | 4,231 | 2010 | 1962 | 11501 15th Ave NE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seattle, WA | 27,180 | 10,670 | 37,291 | 2,007 | 10,700 | 39,268 | 14,211 | 2010 | 2005 | 805 4th Ave N | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seattle, WA | — | 1,150 | 19,887 | 2,790 | 1,153 | 22,674 | 4,109 | 2015 | 1995 | 11039 17th Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selbyville, DE | — | 750 | 25,912 | 964 | 769 | 26,857 | 7,050 | 2010 | 2008 | 21111 Arrington Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sevenoaks, UK | — | 6,181 | 40,240 | 8,029 | 6,844 | 47,606 | 14,328 | 2012 | 2009 | 64 - 70 Westerham Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Severna Park, MD | — | — | 67,623 | 6,130 | 44 | 73,709 | 12,815 | 2016 | 1997 | 43 W McKinsey Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shelby Township, MI | 13,180 | 1,040 | 26,344 | 1,477 | 1,110 | 27,751 | 7,250 | 2013 | 2006 | 46471 Hayes Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sherman, TX | — | 700 | 5,221 | 7 | 700 | 5,228 | 1,979 | 2005 | 2006 | 1011 E. Pecan Grove Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shrewsbury, NJ | — | 2,120 | 38,116 | 2,750 | 2,151 | 40,835 | 10,565 | 2010 | 2000 | 5 Meridian Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sidcup, UK | — | 7,446 | 56,570 | 8,847 | 8,272 | 64,591 | 19,813 | 2012 | 2000 | Frognal Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Spring, MD | — | — | — | 64,377 | 3,436 | 60,941 | 3,256 | 2016 | 2018 | 2201 Colston Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Simi Valley, CA | — | 3,200 | 16,664 | 1,938 | 3,298 | 18,504 | 5,955 | 2013 | 2009 | 190 Tierra Rejada Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Simi Valley, CA | — | 5,510 | 51,406 | 8,517 | 5,510 | 59,923 | 12,238 | 2016 | 2003 | 5300 E Los Angeles Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Solihull, UK | — | 5,070 | 43,297 | 9,048 | 5,615 | 51,800 | 14,877 | 2012 | 2009 | 1270 Warwick Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Solihull, UK | — | 3,571 | 26,053 | 3,942 | 4,009 | 29,557 | 8,354 | 2013 | 2007 | 1 Worcester Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Solihull, UK | — | 1,851 | 10,585 | 2,023 | 2,049 | 12,410 | 1,547 | 2015 | 2016 | Warwick Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sonning, UK | — | 5,644 | 42,155 | 6,442 | 6,280 | 47,961 | 12,724 | 2013 | 2009 | Old Bath Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sonoma, CA | — | 1,100 | 18,400 | 4,807 | 1,109 | 23,198 | 8,685 | 2005 | 1988 | 800 Oregon St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sonoma, CA | — | 2,820 | 21,890 | 3,292 | 2,827 | 25,175 | 4,594 | 2016 | 2005 | 91 Napa Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| South Jordan, UT | — | — | — | 51,165 | 4,639 | 46,526 | 2,705 | 2020 | 2015 | 11289 Oakmond Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southlake, TX | — | 6,207 | 56,655 | 7,624 | 6,207 | 64,279 | 7,920 | 2019 | 2008 | 101 Watermere Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Spokane, WA | — | 3,200 | 25,064 | 2,502 | 3,200 | 27,566 | 8,323 | 2013 | 2001 | 3117 E. Chaser Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Spokane, WA | — | 2,580 | 25,342 | 2,298 | 2,580 | 27,640 | 7,353 | 2013 | 1999 | 1110 E. Westview Ct. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| St. Albert, AB | 9,268 | 1,145 | 17,863 | 2,257 | 1,285 | 19,980 | 6,301 | 2014 | 2005 | 78C McKenney Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| St. John's, NL | 5,219 | 706 | 11,765 | 900 | 760 | 12,611 | 2,110 | 2015 | 2005 | 64 Portugal Cove Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stittsville, ON | 4,057 | 1,175 | 17,397 | 2,258 | 1,346 | 19,484 | 4,876 | 2013 | 1996 | 1340 - 1354 Main Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockport, UK | — | 4,369 | 25,018 | 3,888 | 4,860 | 28,415 | 8,513 | 2013 | 2008 | 1 Dairyground Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockton, CA | — | 2,280 | 5,983 | 1,718 | 2,372 | 7,609 | 2,527 | 2010 | 1988 | 6725 Inglewood | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Strongsville, OH | — | 1,113 | 10,904 | 656 | 1,113 | 11,560 | 1,451 | 2019 | 2017 | 15100 Howe Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stuart, FL | — | 5,276 | 23,980 | 730 | 5,276 | 24,710 | 1,762 | 2019 | 2019 | 2625 SE Cove Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Studio City, CA | — | 4,006 | 25,307 | 1,401 | 4,115 | 26,599 | 7,825 | 2013 | 2004 | 4610 Coldwater Canyon Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Suffield, CT | — | 4,416 | 31,176 | 2,392 | 4,416 | 33,568 | 3,369 | 2019 | 1998 | 7 Canal Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sugar Land, TX | — | 960 | 31,423 | 1,184 | 960 | 32,607 | 9,638 | 2011 | 1996 | 1221 Seventh St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sugar Land, TX | — | 4,272 | 60,493 | 6,546 | 4,272 | 67,039 | 11,697 | 2017 | 2015 | 744 Brooks Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summit, NJ | — | 3,080 | 14,152 | 506 | 3,080 | 14,658 | 3,817 | 2011 | 2001 | 41 Springfield Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sun City West, AZ | — | 1,250 | 21,778 | 1,973 | 1,250 | 23,751 | 5,755 | 2012 | 1998 | 13810 West Sandridge Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunninghill, UK | — | 11,632 | 42,233 | 4,116 | 12,460 | 45,521 | 4,347 | 2014 | 2017 | Bagshot Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunnyvale, CA | — | 5,420 | 41,682 | 3,191 | 5,420 | 44,873 | 12,824 | 2012 | 2002 | 1039 East El Camino Real | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Surrey, BC | 6,069 | 3,605 | 18,818 | 3,107 | 3,907 | 21,623 | 7,209 | 2013 | 2000 | 16028 83rd Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Surrey, BC | 15,070 | 4,552 | 22,338 | 3,865 | 4,952 | 25,803 | 9,069 | 2013 | 1987 | 15501 16th Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sutton, UK | — | 4,096 | 14,532 | 3,309 | 4,538 | 17,399 | 1,941 | 2015 | 2016 | 123 Westmead Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Suwanee, GA | — | 1,560 | 11,538 | 1,672 | 1,560 | 13,210 | 4,220 | 2012 | 2000 | 4315 Johns Creek Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sway, UK | — | 4,145 | 15,508 | 3,024 | 4,643 | 18,034 | 4,402 | 2014 | 2008 | Sway Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Swift Current, SK | 1,624 | 492 | 10,119 | 1,412 | 540 | 11,483 | 3,057 | 2013 | 2001 | 301 Macoun Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sylvania, OH | — | 1,205 | 11,988 | — | 1,205 | 11,988 | 730 | 2019 | 2019 | 4120 King Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Syracuse, NY | — | 1,418 | 11,617 | 863 | 1,418 | 12,480 | 1,544 | 2019 | 2011 | 6715 Buckley Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tacoma, WA | — | 4,170 | 73,377 | 17,896 | 4,170 | 91,273 | 20,323 | 2016 | 1987 | 8201 6th Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taylor, PA | — | 1,910 | 11,996 | — | 1,910 | 11,996 | 434 | 2019 | 2020 | 512 Oak St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Woodlands, TX | — | 480 | 12,379 | 663 | 480 | 13,042 | 3,755 | 2011 | 1999 | 7950 Bay Branch Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toms River, NJ | — | 1,610 | 34,627 | 1,518 | 1,695 | 36,060 | 9,559 | 2010 | 2005 | 1587 Old Freehold Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tonawanda, NY | — | 1,542 | 13,280 | 1,252 | 1,542 | 14,532 | 1,927 | 2019 | 2011 | 300 Fries Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tonawanda, NY | — | 2,436 | 12,507 | 1,428 | 2,436 | 13,935 | 1,991 | 2019 | 2009 | 285 Crestmount Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 18,270 | 2,927 | 20,713 | 4,407 | 3,209 | 24,838 | 4,394 | 2015 | 1900 | 54 Foxbar Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 7,502 | 5,082 | 25,493 | 4,045 | 5,531 | 29,089 | 7,178 | 2015 | 1988 | 645 Castlefield Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 12,566 | 2,008 | 19,620 | 1,826 | 2,123 | 21,331 | 4,384 | 2015 | 1999 | 4251 Dundas Street West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 36,318 | 5,132 | 41,657 | 7,211 | 5,591 | 48,409 | 13,447 | 2015 | 1964 | 10 William Morgan Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 7,586 | 2,480 | 7,571 | 1,381 | 2,693 | 8,739 | 2,385 | 2015 | 1971 | 123 Spadina Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 4,640 | 1,079 | 5,364 | 877 | 1,135 | 6,185 | 1,702 | 2013 | 1982 | 25 Centennial Park Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 7,273 | 2,513 | 19,695 | 2,668 | 2,763 | 22,113 | 5,163 | 2013 | 2002 | 305 Balliol Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 17,430 | 3,400 | 32,757 | 4,542 | 3,797 | 36,902 | 10,244 | 2013 | 1973 | 1055 and 1057 Don Mills Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 5,719 | 1,447 | 3,918 | 871 | 1,598 | 4,638 | 1,556 | 2013 | 1987 | 1340 York Mills Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toronto, ON | 30,720 | 5,304 | 53,488 | 5,453 | 5,791 | 58,454 | 19,389 | 2013 | 1988 | 8 The Donway East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Torrance, CA | — | 3,497 | 73,138 | 297 | 3,504 | 73,428 | 8,315 | 2016 | 2016 | 25535 Hawthorne Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tucson, AZ | — | 830 | 6,179 | 5,317 | 830 | 11,496 | 2,496 | 2012 | 1997 | 5660 N. Kolb Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tulsa, OK | — | 1,330 | 21,285 | 2,094 | 1,362 | 23,347 | 9,163 | 2010 | 1986 | 8887 South Lewis Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tulsa, OK | — | 1,500 | 20,728 | 114 | 1,614 | 20,728 | 8,988 | 2010 | 1984 | 9524 East 71st St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Turlock, CA | — | 2,266 | 12,869 | 1,122 | 2,266 | 13,991 | 1,748 | 2019 | 2001 | 3791 Crowell Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Twinsburg, OH | — | 1,042 | 8,343 | 543 | 1,042 | 8,886 | 1,162 | 2019 | 2016 | 3092 Kendal Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tyler, TX | — | 650 | 5,268 | 24 | 650 | 5,292 | 1,937 | 2006 | 2007 | 5550 Old Jacksonville Hwy. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Upland, CA | — | 3,160 | 42,596 | 98 | 3,160 | 42,694 | 7,628 | 2015 | 2014 | 2419 North Euclid Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Upper Providence, PA | — | 1,900 | 28,195 | 489 | 1,906 | 28,678 | 4,254 | 2013 | 2015 | 1133 Black Rock Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Upper St Claire, PA | — | 1,102 | 13,455 | 1,668 | 1,153 | 15,072 | 4,718 | 2013 | 2005 | 500 Village Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vacaville, CA | — | 900 | 17,100 | 3,978 | 900 | 21,078 | 8,261 | 2005 | 1987 | 799 Yellowstone Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vallejo, CA | — | 4,000 | 18,000 | 5,193 | 4,030 | 23,163 | 8,965 | 2005 | 1989 | 350 Locust Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vallejo, CA | — | 2,330 | 15,407 | 1,667 | 2,330 | 17,074 | 5,368 | 2010 | 1990 | 2261 Tuolumne | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vancouver, WA | — | 1,820 | 19,042 | 1,271 | 1,821 | 20,312 | 6,357 | 2010 | 2006 | 10011 NE 118th Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vancouver, BC | — | 7,282 | 6,572 | 2,428 | 7,787 | 8,495 | 5,968 | 2015 | 1974 | 2803 West 41st Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vancouver, WA | — | — | — | 16,606 | 1,406 | 15,200 | 6 | 2020 | 2001 | 201 NW 78th St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vankleek Hill, ON | 542 | 389 | 2,960 | 628 | 426 | 3,551 | 1,072 | 2013 | 1987 | 48 Wall Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vaudreuil, QC | 7,888 | 1,852 | 14,214 | 2,062 | 1,956 | 16,172 | 3,404 | 2015 | 1975 | 333 rue Querbes | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vero Beach, FL | — | 2,930 | 40,070 | 26,571 | 2,930 | 66,641 | 28,297 | 2007 | 2003 | 7955 16th Manor | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Victoria, BC | 6,629 | 2,856 | 18,038 | 2,320 | 3,121 | 20,093 | 6,029 | 2013 | 1974 | 3000 Shelbourne Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Victoria, BC | 18,976 | 3,681 | 15,774 | 2,184 | 3,997 | 17,642 | 5,490 | 2013 | 1988 | 3051 Shelbourne Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Victoria, BC | 17,634 | 2,476 | 15,379 | 2,695 | 2,718 | 17,832 | 3,245 | 2015 | 1990 | 3965 Shelbourne Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Virginia Water, UK | — | 7,106 | 29,937 | 9,185 | 6,029 | 40,199 | 13,356 | 2012 | 2002 | Christ Church Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Voorhees, NJ | — | 3,700 | 24,312 | 2,565 | 3,854 | 26,723 | 5,739 | 2012 | 2013 | 311 Route 73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wall, NJ | — | 1,650 | 25,350 | 3,045 | 1,694 | 28,351 | 7,011 | 2011 | 2003 | 2021 Highway 35 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Walnut Creek, CA | — | 3,700 | 12,467 | 3,583 | 3,808 | 15,942 | 5,189 | 2013 | 1998 | 2175 Ygnacio Valley Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Walnut Creek, CA | — | 10,320 | 100,890 | 18,335 | 10,320 | 119,225 | 24,385 | 2016 | 1988 | 1580 Geary Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Washington, DC | — | 4,000 | 69,154 | 3,369 | 4,021 | 72,502 | 18,471 | 2013 | 2004 | 5111 Connecticut Avenue NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Watchung, NJ | — | 1,920 | 24,880 | 2,084 | 2,058 | 26,826 | 6,743 | 2011 | 2000 | 680 Mountain Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waterville, OH | — | — | — | 48,130 | 2,566 | 45,564 | 217 | 2020 | 2018 | 1470 Pray Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waukee, IA | — | 1,870 | 31,878 | 1,042 | 1,900 | 32,890 | 6,744 | 2012 | 2007 | 1650 SE Holiday Crest Circle | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waxahachie, TX | — | 650 | 5,763 | 10 | 650 | 5,773 | 1,997 | 2007 | 2008 | 1329 Brown St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wayland, MA | — | 1,207 | 27,462 | 2,437 | 1,364 | 29,742 | 8,380 | 2013 | 1997 | 285 Commonwealth Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weatherford, TX | — | 660 | 5,261 | 7 | 660 | 5,268 | 1,949 | 2006 | 2007 | 1818 Martin Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Webster Groves, MO | — | 1,790 | 15,425 | 2,711 | 1,812 | 18,114 | 5,560 | 2011 | 2012 | 45 E Lockwood Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Welland, ON | 5,769 | 983 | 7,530 | 1,086 | 1,060 | 8,539 | 1,525 | 2015 | 2006 | 110 First Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wellesley, MA | — | 4,690 | 77,462 | 571 | 4,690 | 78,033 | 15,666 | 2015 | 2012 | 23 & 27 Washington Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Babylon, NY | — | 3,960 | 47,085 | 2,671 | 4,062 | 49,654 | 12,541 | 2013 | 2003 | 580 Montauk Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Bloomfield, MI | — | 1,040 | 12,300 | 945 | 1,100 | 13,185 | 3,728 | 2013 | 2000 | 7005 Pontiac Trail | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Chester Township, OH | — | 2,281 | 47,848 | 1,288 | 2,281 | 49,136 | 317 | 2020 | 2019 | 7129 Gilmore Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Hills, CA | — | 2,600 | 7,521 | 1,760 | 2,658 | 9,223 | 3,344 | 2013 | 2002 | 9012 Topanga Canyon Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Seneca, NY | — | 1,413 | 6,626 | 634 | 1,413 | 7,260 | 1,080 | 2019 | 2000 | 1187 Orchard Park Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Seneca, NY | — | 1,042 | 7,475 | 604 | 1,042 | 8,079 | 1,036 | 2019 | 2007 | 2341 Union Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Vancouver, BC | 17,543 | 7,059 | 28,155 | 5,580 | 7,717 | 33,077 | 9,434 | 2013 | 1987 | 2095 Marine Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westbourne, UK | — | 5,441 | 41,420 | 10,347 | 6,027 | 51,181 | 12,905 | 2013 | 2006 | 16-18 Poole Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westford, MA | — | 1,440 | 32,607 | 463 | 1,468 | 33,042 | 5,977 | 2015 | 2013 | 108 Littleton Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weston, MA | — | 1,160 | 2,750 | 268 | 1,160 | 3,018 | 1,347 | 2013 | 1998 | 135 North Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westworth Village, TX | — | 2,060 | 31,296 | 86 | 2,060 | 31,382 | 4,994 | 2014 | 2014 | 25 Leonard Trail | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weybridge, UK | — | 7,899 | 48,240 | 6,767 | 8,784 | 54,122 | 15,969 | 2013 | 2008 | Ellesmere Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weymouth, UK | — | 2,591 | 16,551 | 2,540 | 2,908 | 18,774 | 3,380 | 2014 | 2013 | Cross Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| White Oak, MD | — | 2,304 | 24,768 | 3,092 | 2,437 | 27,727 | 7,122 | 2013 | 2002 | 11621 New Hampshire Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Whitesboro, NY | — | 1,587 | 11,946 | 789 | 1,587 | 12,735 | 1,487 | 2019 | 2015 | 4770 Clinton Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Willoughby, OH | — | 1,309 | 10,536 | 662 | 1,309 | 11,198 | 1,279 | 2019 | 2016 | 35100 Chardon Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilmington, DE | — | 1,040 | 23,338 | 2,395 | 1,176 | 25,597 | 6,754 | 2013 | 2004 | 2215 Shipley Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winchester, UK | — | 6,009 | 29,405 | 4,451 | 6,671 | 33,194 | 9,383 | 2012 | 2010 | Stockbridge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winnipeg, MB | 11,271 | 1,960 | 38,612 | 7,129 | 2,217 | 45,484 | 15,196 | 2013 | 1999 | 857 Wilkes Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winnipeg, MB | 25,011 | 1,276 | 21,732 | 3,371 | 1,664 | 24,715 | 6,421 | 2013 | 1988 | 3161 Grant Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winnipeg, MB | 12,084 | 1,317 | 15,609 | 3,641 | 1,450 | 19,117 | 4,278 | 2015 | 1999 | 125 Portsmouth Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woking, UK | — | 2,990 | 12,523 | 1,598 | 3,210 | 13,901 | 1,234 | 2016 | 2017 | 12 Streets Heath, West End | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wolverhampton, UK | — | 2,941 | 8,922 | 1,846 | 3,264 | 10,445 | 4,030 | 2013 | 2008 | 73 Wergs Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodland Hills, CA | — | 3,400 | 20,478 | 1,441 | 3,456 | 21,863 | 6,494 | 2013 | 2005 | 20461 Ventura Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yonkers, NY | — | 3,962 | 50,107 | 2,471 | 4,047 | 52,493 | 13,792 | 2013 | 2005 | 65 Crisfield Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yorkton, SK | 2,996 | 463 | 8,760 | 1,100 | 504 | 9,819 | 2,663 | 2013 | 2001 | 94 Russell Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating Total | $ | 1,706,192 | $ | 1,466,472 | $ | 13,489,025 | $ | 2,648,613 | $ | 1,642,393 | $ | 15,961,717 | $ | 3,554,697 | ||||||||||||||||||||||||||||||||||||||||||||||||
116
| Welltower Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate and Accumulated Depreciation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Abilene, TX | $ | — | $ | 950 | $ | 20,987 | $ | 11,660 | $ | 950 | $ | 32,647 | $ | 4,299 | 2014 | 1998 | 6565 Central Park Boulevard | |||||||||||||||||||||||||||||||||||||||||||||
| Abilene, TX | — | 990 | 8,187 | 1,089 | 990 | 9,276 | 1,523 | 2014 | 1985 | 1250 East N 10th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Aboite Twp, IN | — | 1,770 | 19,930 | 1,601 | 1,770 | 21,531 | 5,743 | 2010 | 2008 | 611 W County Line Rd South | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agawam, MA | — | 880 | 16,112 | 2,134 | 880 | 18,246 | 8,903 | 2002 | 1993 | 1200 Suffield St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Akron, OH | — | 633 | 3,002 | — | 633 | 3,002 | 206 | 2018 | 1999 | 171 North Cleveland Massillon Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alexandria, VA | — | 2,452 | 6,826 | — | 2,452 | 6,826 | 453 | 2018 | 1964 | 1510 Collingwood Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alhambra, CA | — | 600 | 6,305 | 8,847 | 600 | 15,152 | 2,752 | 2011 | 1923 | 1118 N. Stoneman Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allen Park, MI | — | 1,767 | 5,025 | — | 1,767 | 5,025 | 337 | 2018 | 1960 | 9150 Allen Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allentown, PA | — | 494 | 11,845 | — | 494 | 11,845 | 775 | 2018 | 1995 | 5151 Hamilton Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allentown, PA | — | 1,491 | 4,822 | — | 1,491 | 4,822 | 331 | 2018 | 1988 | 1265 Cedar Crest Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alma, MI | — | — | — | 7,810 | 1,267 | 6,543 | 47 | 2020 | 2009 | 1320 Pine Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ames, IA | — | 330 | 8,870 | 7 | 330 | 8,877 | 2,553 | 2010 | 1999 | 1325 Coconino Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ann Arbor, MI | — | 2,172 | 11,123 | — | 2,172 | 11,123 | 786 | 2018 | 1997 | 4701 East Huron River Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annandale, VA | — | 1,687 | 18,974 | — | 1,687 | 18,974 | 1,215 | 2018 | 2002 | 7104 Braddock Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arlington, VA | — | 4,016 | 8,801 | — | 4,016 | 8,801 | 575 | 2018 | 1976 | 550 South Carlin Southprings Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asheboro, NC | — | 290 | 5,032 | 312 | 290 | 5,344 | 2,388 | 2003 | 1998 | 514 Vision Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asheville, NC | — | 204 | 3,489 | — | 204 | 3,489 | 2,019 | 1999 | 1999 | 4 Walden Ridge Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asheville, NC | — | 280 | 1,955 | 532 | 280 | 2,487 | 1,137 | 2003 | 1992 | 308 Overlook Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Atchison, KS | — | 140 | 5,610 | 23 | 140 | 5,633 | 792 | 2015 | 2001 | 1301 N 4th St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin, TX | — | 1,691 | 5,005 | — | 1,691 | 5,005 | 436 | 2018 | 2000 | 11630 Four Iron Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Avon, IN | — | 1,830 | 14,470 | 34 | 1,830 | 14,504 | 4,349 | 2010 | 2004 | 182 S Country RD. 550E | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Avon, IN | — | 900 | 19,444 | — | 900 | 19,444 | 3,464 | 2014 | 2013 | 10307 E. CR 100 N | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Avon, CT | — | 2,132 | 7,624 | — | 2,132 | 7,624 | 610 | 2018 | 2000 | 100 Fisher Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Azusa, CA | — | 570 | 3,141 | 7,430 | 570 | 10,571 | 3,607 | 1998 | 1953 | 125 W. Sierra Madre Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bad Axe, MI | — | — | — | 7,289 | 1,317 | 5,972 | 48 | 2020 | 2010 | 150 Meadow Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Baldwin City, KS | — | 190 | 4,810 | 55 | 190 | 4,865 | 701 | 2015 | 2000 | 321 Crimson Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Baltimore, MD | — | 4,306 | 4,303 | — | 4,306 | 4,303 | 308 | 2018 | 1978 | 6600 Ridge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Baltimore, MD | — | 3,069 | 3,148 | — | 3,069 | 3,148 | 240 | 2018 | 1996 | 4669 Falls Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Barberton, OH | — | 1,307 | 9,310 | — | 1,307 | 9,310 | 605 | 2018 | 1979 | 85 Third Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bartlesville, OK | — | 100 | 1,380 | — | 100 | 1,380 | 892 | 1996 | 1995 | 5420 S.E. Adams Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Battle Creek, MI | — | 857 | 1,821 | — | 857 | 1,821 | 168 | 2018 | 1965 | 200 Roosevelt Avenue East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bay City, MI | — | 633 | 2,619 | — | 633 | 2,619 | 194 | 2018 | 1968 | 800 Mulholland Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bedford, PA | — | 637 | 4,432 | — | 637 | 4,432 | 341 | 2018 | 1965 | 136 Donahoe Manor Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Belmont, CA | — | 3,000 | 23,526 | 1,728 | 3,000 | 25,254 | 7,611 | 2011 | 1971 | 1301 Ralston Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Belvidere, NJ | — | 2,001 | 26,191 | — | 2,001 | 26,191 | 1,614 | 2019 | 2009 | 1 Brookfield Ct | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Benbrook, TX | — | 1,550 | 13,553 | 2,747 | 1,550 | 16,300 | 3,667 | 2011 | 1984 | 4242 Bryant Irvin Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Berkeley, CA | 11,689 | 3,050 | 32,677 | 5,008 | 3,050 | 37,685 | 6,816 | 2016 | 1966 | 2235 Sacramento Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethel Park, PA | — | 1,700 | 16,007 | — | 1,700 | 16,007 | 5,149 | 2007 | 2009 | 5785 Baptist Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethel Park, PA | — | 1,008 | 6,740 | — | 1,008 | 6,740 | 469 | 2018 | 1986 | 60 Highland Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethesda, MD | — | 2,218 | 6,869 | — | 2,218 | 6,869 | 440 | 2018 | 1974 | 6530 Democracy Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethlehem, PA | — | 1,191 | 16,887 | — | 1,191 | 16,887 | 1,053 | 2018 | 1979 | 2021 Westgate Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bethlehem, PA | — | 1,143 | 13,588 | — | 1,143 | 13,588 | 852 | 2018 | 1982 | 2029 Westgate Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beverly Hills, CA | — | 6,000 | 13,385 | 203 | 6,000 | 13,588 | 2,101 | 2014 | 2000 | 220 N Clark Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bexleyheath, UK | — | 3,750 | 10,807 | 1,564 | 4,153 | 11,968 | 1,931 | 2014 | 1996 | 35 West Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bingham Farms, MI | — | 781 | 15,671 | — | 781 | 15,671 | 1,013 | 2018 | 1999 | 24005 West 13 Mile Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Birmingham, UK | — | 1,647 | 14,853 | 1,772 | 1,824 | 16,448 | 2,447 | 2015 | 2010 | Clinton Street, Winson Green | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Birmingham, UK | — | 1,591 | 19,092 | 2,222 | 1,762 | 21,143 | 3,100 | 2015 | 2010 | Braymoor Road, Tile Cross | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Birmingham, UK | — | 1,462 | 9,056 | 1,129 | 1,619 | 10,028 | 1,515 | 2015 | 2010 | Clinton Street, Winson Green | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Birmingham, UK | — | 1,184 | 10,085 | 1,211 | 1,312 | 11,168 | 1,650 | 2015 | 1997 | 122 Tile Cross Road, Garretts Green | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bloomington, IN | — | 670 | 17,423 | — | 670 | 17,423 | 2,641 | 2015 | 2015 | 363 S. Fieldstone Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boca Raton, FL | — | 2,200 | 4,974 | — | 2,200 | 4,974 | 419 | 2018 | 1994 | 7225 Boca Del Mar Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boca Raton, FL | — | 2,826 | 4,061 | — | 2,826 | 4,061 | 306 | 2018 | 1984 | 375 Northwest 51st Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boulder, CO | — | 3,601 | 21,364 | — | 3,601 | 21,364 | 1,477 | 2018 | 1990 | 2800 Palo Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bournemouth, UK | — | 2,668 | 16,470 | — | 2,668 | 16,470 | 576 | 2019 | 2017 | Poole Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boynton Beach, FL | — | 2,138 | 10,201 | — | 2,138 | 10,201 | 721 | 2018 | 1991 | 3600 Old Boynton Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boynton Beach, FL | — | 2,804 | 14,222 | — | 2,804 | 14,222 | 918 | 2018 | 1984 | 3001 South Congress Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bracknell, UK | — | 4,081 | 11,470 | 684 | 4,372 | 11,863 | 1,048 | 2014 | 2017 | Crowthorne Road North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bradenton, FL | — | 252 | 3,298 | — | 252 | 3,298 | 2,145 | 1996 | 1995 | 6101 Pointe W. Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bradenton, FL | — | 480 | 9,953 | 113 | 480 | 10,066 | 2,244 | 2012 | 2000 | 2800 60th Avenue West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Braintree, MA | — | 170 | 7,157 | 1,290 | 170 | 8,447 | 8,447 | 1997 | 1968 | 1102 Washington St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Braintree, UK | — | — | 13,296 | 1,428 | — | 14,724 | 2,458 | 2014 | 2009 | Meadow Park Tortoiseshell Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brecksville, OH | — | 990 | 19,353 | — | 990 | 19,353 | 3,434 | 2014 | 2011 | 8757 Brecksville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brick, NJ | — | 1,290 | 25,247 | 1,330 | 1,290 | 26,577 | 6,627 | 2011 | 2000 | 458 Jack Martin Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bridgewater, NJ | — | 1,800 | 31,810 | 1,678 | 1,800 | 33,488 | 8,322 | 2011 | 2001 | 680 US-202/206 North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bristol, UK | — | — | — | 22,876 | 4,382 | 18,494 | 1,433 | 2015 | 2017 | 339 Badminton Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bristol, UK | — | 2,337 | 13,416 | — | 2,337 | 13,416 | 639 | 2017 | 2019 | Avon Valley Care Home, Tenniscourt Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brooks, AB | 1,662 | 376 | 4,951 | 464 | 408 | 5,383 | 934 | 2014 | 2000 | 951 Cassils Road West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bucyrus, OH | — | 1,119 | 2,611 | — | 1,119 | 2,611 | 207 | 2018 | 1976 | 1170 West Mansfield Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burleson, TX | — | 670 | 13,985 | 2,457 | 670 | 16,442 | 3,898 | 2011 | 1988 | 300 Huguley Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burlington, NC | — | 280 | 4,297 | 849 | 280 | 5,146 | 2,277 | 2003 | 2000 | 3619 S. Mebane St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burlington, NC | — | 460 | 5,467 | 110 | 460 | 5,577 | 2,530 | 2003 | 1997 | 3615 S. Mebane St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burlington, NJ | — | 1,700 | 12,554 | 501 | 1,700 | 13,055 | 4,074 | 2011 | 1965 | 115 Sunset Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burlington, NJ | — | 1,170 | 19,205 | 172 | 1,170 | 19,377 | 5,206 | 2011 | 1994 | 2305 Rancocas Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burnaby, BC | 7,069 | 7,623 | 13,844 | 1,839 | 8,273 | 15,033 | 2,646 | 2014 | 2006 | 7195 Canada Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calgary, AB | 14,118 | 2,341 | 42,768 | 3,912 | 2,541 | 46,480 | 7,760 | 2014 | 1971 | 1729-90th Avenue SW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Calgary, AB | 23,452 | 4,569 | 70,199 | 6,378 | 4,958 | 76,188 | 12,605 | 2014 | 2001 | 500 Midpark Way SE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Camp Hill, PA | — | 517 | 3,596 | — | 517 | 3,596 | 240 | 2018 | 1970 | 1700 Market Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Canonsburg, PA | — | 911 | 4,828 | — | 911 | 4,828 | 352 | 2018 | 1986 | 113 West McMurray Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Canton, OH | — | 300 | 2,098 | — | 300 | 2,098 | 1,214 | 1998 | 1998 | 1119 Perry Dr., N.W. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Canton, MI | — | 1,399 | 16,966 | — | 1,399 | 16,966 | 1,093 | 2018 | 2005 | 7025 Lilley Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cape Coral, FL | — | 530 | 3,281 | — | 530 | 3,281 | 1,629 | 2002 | 2000 | 911 Santa Barbara Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cape Coral, FL | 7,925 | 760 | 18,868 | 110 | 760 | 18,978 | 4,296 | 2012 | 2009 | 831 Santa Barbara Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cape May Court House, NJ | — | 1,440 | 17,002 | 1,775 | 1,440 | 18,777 | 3,303 | 2014 | 1990 | 144 Magnolia Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carlisle, PA | — | 978 | 8,204 | — | 978 | 8,204 | 562 | 2018 | 1987 | 940 Walnut Bottom Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carmel, IN | — | 1,700 | 19,491 | 1 | 1,700 | 19,492 | 3,070 | 2015 | 2015 | 12315 Pennsylvania Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carmel, IN | — | 1,583 | 6,069 | — | 1,583 | 6,069 | 447 | 2018 | 1985 | 12999 North Pennsylvania Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carmel, IN | — | — | 2,296 | — | — | 2,296 | 140 | 2018 | 1985 | 12999 North Pennsylvania Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrollton, TX | — | 2,010 | 19,549 | — | 2,010 | 19,549 | 2,254 | 2014 | 2016 | 2645 East Trinity Mills Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cary, NC | — | 1,500 | 4,350 | 1,366 | 1,500 | 5,716 | 2,956 | 1998 | 1996 | 111 MacArthur | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Castleton, IN | — | 920 | 15,137 | — | 920 | 15,137 | 2,801 | 2014 | 2013 | 8405 Clearvista Lake | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cedar Grove, NJ | — | 2,850 | 27,737 | 20 | 2,850 | 27,757 | 7,524 | 2011 | 1970 | 536 Ridge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cedar Rapids, IA | — | 596 | 9,352 | — | 596 | 9,352 | 592 | 2018 | 1965 | 1940 1st Avenue Northeast | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Centerville, OH | — | 920 | 3,958 | — | 920 | 3,958 | 388 | 2018 | 1997 | 1001 E. Alex Bell Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chagrin Falls, OH | — | 832 | 10,837 | — | 832 | 10,837 | 731 | 2018 | 1999 | 8100 East Washington Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chambersburg, PA | — | 1,373 | 8,862 | — | 1,373 | 8,862 | 629 | 2018 | 1976 | 1070 Stouffer Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chapel Hill, NC | — | 354 | 2,646 | 1,201 | 354 | 3,847 | 1,667 | 2002 | 1997 | 100 Lanark Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charleston, SC | — | 1,333 | 5,554 | — | 1,333 | 5,554 | 374 | 2018 | 1982 | 1137 Sam Rittenberg Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charleston, WV | — | 440 | 17,575 | 306 | 440 | 17,881 | 4,635 | 2011 | 1998 | 1000 Association Drive, North Gate Business Park | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chatham, VA | — | 320 | 14,039 | — | 320 | 14,039 | 2,595 | 2014 | 2009 | 100 Rorer Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cherry Hill, NJ | — | 1,416 | 9,871 | — | 1,416 | 9,871 | 693 | 2018 | 1997 | 2700 Chapel Avenue West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chester, VA | — | 1,320 | 18,127 | — | 1,320 | 18,127 | 3,318 | 2014 | 2009 | 12001 Iron Bridge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chevy Chase, MD | — | 4,515 | 8,685 | — | 4,515 | 8,685 | 574 | 2018 | 1964 | 8700 Jones Mill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chickasha, OK | — | 85 | 1,395 | — | 85 | 1,395 | 896 | 1996 | 1996 | 801 Country Club Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chillicothe, OH | — | 1,145 | 8,994 | — | 1,145 | 8,994 | 590 | 2018 | 1977 | 1058 Columbus Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cincinnati, OH | — | 912 | 14,010 | — | 912 | 14,010 | 934 | 2018 | 2000 | 6870 Clough Pike | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Citrus Heights, CA | — | 5,207 | 31,715 | — | 5,207 | 31,715 | 1,989 | 2018 | 1988 | 7807 Upland Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Claremore, OK | — | 155 | 1,427 | 6,130 | 155 | 7,557 | 1,970 | 1996 | 1996 | 1605 N. Hwy. 88 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clarksville, TN | — | 330 | 2,292 | — | 330 | 2,292 | 1,322 | 1998 | 1998 | 2183 Memorial Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clayton, NC | — | 520 | 15,733 | — | 520 | 15,733 | 2,636 | 2014 | 2013 | 84 Johnson Estate Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clevedon, UK | — | 2,838 | 16,927 | 2,122 | 3,142 | 18,745 | 3,128 | 2014 | 1994 | 18/19 Elton Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cloquet, MN | — | 340 | 4,660 | 120 | 340 | 4,780 | 1,239 | 2011 | 2006 | 705 Horizon Circle | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cobham, UK | — | 9,808 | 24,991 | 3,737 | 10,861 | 27,675 | 5,364 | 2013 | 2013 | Redhill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colchester, CT | — | 980 | 4,860 | 544 | 980 | 5,404 | 1,828 | 2011 | 1986 | 59 Harrington Court | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colorado Springs, CO | — | 4,280 | 62,168 | — | 4,280 | 62,168 | 8,523 | 2015 | 2008 | 1605 Elm Creek View | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colorado Springs, CO | — | 1,730 | 25,493 | 693 | 1,730 | 26,186 | 3,548 | 2016 | 2016 | 2818 Grand Vista Circle | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbia, TN | — | 341 | 2,295 | — | 341 | 2,295 | 1,324 | 1999 | 1999 | 5011 Trotwood Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbia, SC | — | 1,699 | 2,319 | — | 1,699 | 2,319 | 170 | 2018 | 1968 | 2601 Forest Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbia Heights, MN | — | 825 | 14,175 | 163 | 825 | 14,338 | 3,496 | 2011 | 2009 | 3807 Hart Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Concord, NC | — | 550 | 3,921 | 416 | 550 | 4,337 | 1,959 | 2003 | 1997 | 2452 Rock Hill Church Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Concord, NH | — | 1,760 | 43,179 | 634 | 1,760 | 43,813 | 11,371 | 2011 | 1994 | 239 Pleasant Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Concord, NH | — | 720 | 3,041 | 340 | 720 | 3,381 | 1,099 | 2011 | 1926 | 227 Pleasant Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Congleton, UK | — | 2,036 | 5,120 | 768 | 2,254 | 5,670 | 917 | 2014 | 1994 | Rood Hill | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Coppell, TX | — | 1,550 | 8,386 | 228 | 1,550 | 8,614 | 1,872 | 2012 | 2013 | 1530 East Sandy Lake Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corby, UK | — | 1,228 | 5,144 | 881 | 1,240 | 6,013 | 595 | 2017 | 1997 | 25 Rockingham Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Costa Mesa, CA | — | 2,050 | 19,969 | 969 | 2,050 | 20,938 | 6,446 | 2011 | 1965 | 350 West Bay St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Coventry, UK | — | 1,962 | 13,830 | 1,695 | 2,172 | 15,315 | 2,349 | 2015 | 2014 | 1 Glendale Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crawfordsville, IN | — | 720 | 17,239 | 1,426 | 720 | 18,665 | 3,344 | 2014 | 2013 | 517 Concord Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dallastown, PA | — | 1,377 | 16,797 | — | 1,377 | 16,797 | 1,121 | 2018 | 1979 | 100 West Queen Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Danville, VA | — | 410 | 3,954 | 1,032 | 410 | 4,986 | 2,182 | 2003 | 1998 | 149 Executive Ct. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Danville, VA | — | 240 | 8,436 | — | 240 | 8,436 | 1,577 | 2014 | 1996 | 508 Rison Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Daphne, AL | — | 2,880 | 8,670 | 384 | 2,880 | 9,054 | 2,143 | 2012 | 2001 | 27440 County Road 13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Davenport, IA | — | 566 | 2,017 | — | 566 | 2,017 | 138 | 2018 | 1966 | 815 East Locust Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Davenport, IA | — | 910 | 20,038 | — | 910 | 20,038 | 1,300 | 2018 | 2008 | 3800 Commerce Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dayton, OH | — | 1,188 | 5,412 | — | 1,188 | 5,412 | 385 | 2018 | 1977 | 1974 North Fairfield Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dearborn Heights, MI | — | 1,197 | 3,394 | — | 1,197 | 3,394 | 266 | 2018 | 1964 | 26001 Ford Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Decatur, GA | — | 1,413 | 13,796 | — | 1,413 | 13,796 | 857 | 2018 | 1977 | 2722 North Decatur Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Delray Beach, FL | — | 1,158 | 13,572 | — | 1,158 | 13,572 | 912 | 2018 | 1998 | 16150 Jog Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Delray Beach, FL | — | 2,125 | 11,840 | — | 2,125 | 11,840 | 818 | 2018 | 1998 | 16200 Jog Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Denton, TX | — | 1,760 | 8,305 | 216 | 1,760 | 8,521 | 2,320 | 2010 | 2011 | 2125 Brinker Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Denver, CO | — | 3,222 | 24,804 | — | 3,222 | 24,804 | 1,547 | 2018 | 1988 | 290 South Monaco Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derby, UK | — | 2,359 | 8,539 | 776 | 2,527 | 9,147 | 1,220 | 2014 | 2015 | Rykneld Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dover, DE | — | 600 | 22,266 | 141 | 600 | 22,407 | 5,944 | 2011 | 1984 | 1080 Silver Lake Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dowagiac, MI | — | — | — | 2,603 | 825 | 1,778 | 21 | 2020 | 2006 | 29601 Amerihost Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Droitwich, UK | — | — | — | 16,380 | 3,895 | 12,485 | — | 2018 | 2020 | Mulberry Tree Hill | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dublin, OH | — | 1,393 | 2,911 | — | 1,393 | 2,911 | 237 | 2018 | 2014 | 4075 W. Dublin-Granville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dubuque, IA | — | 568 | 8,902 | — | 568 | 8,902 | 564 | 2018 | 1971 | 901 West Third Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dunedin, FL | — | 1,883 | 13,325 | — | 1,883 | 13,325 | 849 | 2018 | 1983 | 870 Patricia Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Durham, NC | — | 1,476 | 10,659 | 3,085 | 1,476 | 13,744 | 12,561 | 1997 | 1999 | 4434 Ben Franklin Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eagan, MN | 15,890 | 2,260 | 31,643 | 300 | 2,260 | 31,943 | 4,397 | 2015 | 2004 | 3810 Alder Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| East Brunswick, NJ | — | 1,380 | 34,229 | 1,093 | 1,380 | 35,322 | 8,636 | 2011 | 1998 | 606 Cranbury Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eastbourne, UK | — | 4,071 | 24,438 | 3,062 | 4,508 | 27,063 | 4,457 | 2014 | 1999 | Carew Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Easton, PA | — | 1,109 | 7,500 | — | 1,109 | 7,500 | 651 | 2018 | 2015 | 4100 Freemansburg Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Easton, PA | — | 1,430 | 13,396 | — | 1,430 | 13,396 | 898 | 2018 | 1981 | 2600 Northampton Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Easton, PA | — | 1,620 | 10,049 | — | 1,620 | 10,049 | 796 | 2018 | 2000 | 4100 Freemansburg Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eden, NC | — | 390 | 4,877 | 86 | 390 | 4,963 | 2,277 | 2003 | 1998 | 314 W. Kings Hwy. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edmond, OK | — | 410 | 8,388 | — | 410 | 8,388 | 1,988 | 2012 | 2001 | 15401 North Pennsylvania Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edmond, OK | — | 1,810 | 14,849 | 3,260 | 1,810 | 18,109 | 2,931 | 2014 | 1985 | 1225 Lakeshore Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edmond, OK | — | 1,650 | 25,167 | 1,700 | 1,650 | 26,867 | 2,824 | 2014 | 2017 | 2709 East Danforth Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elizabeth City, NC | — | 200 | 2,760 | 2,197 | 200 | 4,957 | 2,487 | 1998 | 1999 | 400 Hastings Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elk Grove Village, IL | — | 1,344 | 7,073 | — | 1,344 | 7,073 | 496 | 2018 | 1995 | 1940 Nerge Road Elk | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elk Grove Village, IL | — | 3,733 | 18,745 | — | 3,733 | 18,745 | 1,163 | 2018 | 1988 | 1920 Nerge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Encinitas, CA | — | 1,460 | 7,721 | 1,987 | 1,460 | 9,708 | 4,656 | 2000 | 1988 | 335 Saxony Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Englewood, NJ | — | 930 | 4,514 | 26 | 930 | 4,540 | 1,354 | 2011 | 1966 | 333 Grand Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Escondido, CA | — | 1,520 | 24,024 | 785 | 1,520 | 24,809 | 7,574 | 2011 | 1987 | 1500 Borden Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eureka, KS | — | 50 | 3,950 | 71 | 50 | 4,021 | 568 | 2015 | 1994 | 1820 E River St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Everett, WA | — | 1,400 | 5,476 | — | 1,400 | 5,476 | 3,080 | 1999 | 1999 | 2015 Lake Heights Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exton, PA | — | 3,600 | 27,267 | — | 3,600 | 27,267 | 2,086 | 2017 | 2018 | 501 Thomas Jones Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fairfax, VA | — | 1,827 | 17,304 | — | 1,827 | 17,304 | 1,171 | 2018 | 1997 | 12469 Lee Jackson Mem Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fairfax, VA | — | 4,099 | 17,614 | — | 4,099 | 17,614 | 1,166 | 2018 | 1990 | 12475 Lee Jackson Memorial Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fairhope, AL | — | 570 | 9,119 | 112 | 570 | 9,231 | 2,164 | 2012 | 1987 | 50 Spring Run Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fall River, MA | — | 620 | 5,829 | 4,856 | 620 | 10,685 | 5,967 | 1996 | 1973 | 1748 Highland Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fanwood, NJ | — | 2,850 | 55,175 | 1,467 | 2,850 | 56,642 | 13,649 | 2011 | 1982 | 295 South Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Faribault, MN | — | 780 | 11,539 | 300 | 780 | 11,839 | 1,578 | 2015 | 2003 | 828 1st Street NE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Farmington, CT | — | 1,693 | 10,455 | — | 1,693 | 10,455 | 722 | 2018 | 1997 | 45 South Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Farnborough, UK | — | 2,036 | 5,737 | 834 | 2,254 | 6,353 | 998 | 2014 | 1980 | Bruntile Close, Reading Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fayetteville, PA | — | 2,150 | 20,173 | — | 2,150 | 20,173 | 4,633 | 2015 | 1991 | 6375 Chambersburg Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fayetteville, NY | — | 410 | 3,962 | 500 | 410 | 4,462 | 2,187 | 2001 | 1997 | 5125 Highbridge St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Findlay, OH | — | 200 | 1,800 | — | 200 | 1,800 | 1,104 | 1997 | 1997 | 725 Fox Run Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fishers, IN | — | 1,500 | 14,500 | 21 | 1,500 | 14,521 | 4,357 | 2010 | 2000 | 9745 Olympia Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fishersville, VA | — | 788 | 2,101 | 3 | 788 | 2,104 | 908 | 2018 | 1998 | 83 Crossroad Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flint, MI | — | 1,271 | 18,050 | — | 1,271 | 18,050 | 1,135 | 2018 | 1969 | 3011 North Center Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Florence, NJ | — | 300 | 2,978 | — | 300 | 2,978 | 1,474 | 2002 | 1999 | 901 Broad St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flourtown, PA | — | 1,800 | 14,830 | 266 | 1,800 | 15,096 | 4,159 | 2011 | 1908 | 350 Haws Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flower Mound, TX | — | 1,800 | 8,414 | 253 | 1,800 | 8,667 | 2,066 | 2011 | 2012 | 4141 Long Prairie Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Floyd, VA | — | 680 | 3,618 | 4 | 680 | 3,622 | 679 | 2018 | 1979 | 237 Franklin Pike Rd SE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flushing, MI | — | 690 | 1,701 | — | 690 | 1,701 | 178 | 2018 | 1999 | 640 Sunnyside Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flushing, MI | — | 1,415 | 8,533 | — | 1,415 | 8,533 | 588 | 2018 | 1967 | 540 Sunnyside Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forest City, NC | — | 320 | 4,497 | 208 | 320 | 4,705 | 2,113 | 2003 | 1999 | 493 Piney Ridge Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Ashby, WV | — | 330 | 19,566 | 356 | 330 | 19,922 | 5,139 | 2011 | 1980 | Diane Drive, Box 686 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Collins, CO | — | 3,680 | 58,608 | — | 3,680 | 58,608 | 8,009 | 2015 | 2007 | 4750 Pleasant Oak Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Collins, CO | — | 890 | 4,532 | 4 | 890 | 4,536 | 561 | 2018 | 1965 | 1005 East Elizabeth | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth, TX | — | 450 | 13,615 | 5,086 | 450 | 18,701 | 5,411 | 2010 | 2011 | 425 Alabama Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fountain Valley, CA | — | 5,259 | 9,375 | — | 5,259 | 9,375 | 619 | 2018 | 1988 | 11680 Warner Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Franconia, NH | — | 360 | 11,320 | 70 | 360 | 11,390 | 3,062 | 2011 | 1971 | 93 Main Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fredericksburg, VA | — | 1,000 | 20,000 | 2,161 | 1,000 | 22,161 | 8,448 | 2005 | 1999 | 3500 Meekins Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fredericksburg, VA | — | 1,130 | 23,202 | — | 1,130 | 23,202 | 4,022 | 2014 | 2010 | 140 Brimley Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ft. Myers, FL | — | 1,110 | 10,559 | — | 1,110 | 10,559 | 717 | 2018 | 1999 | 15950 McGregor Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ft. Myers, FL | — | 2,139 | 18,235 | — | 2,139 | 18,235 | 1,210 | 2018 | 1990 | 1600 Matthew Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ft. Myers, FL | — | 2,502 | 9,741 | — | 2,502 | 9,741 | 782 | 2018 | 2000 | 13881 Eagle Ridge Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gainesville, FL | — | — | — | 31,462 | 2,374 | 29,088 | 964 | 2016 | 2018 | 3605 NW 83rd Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Galesburg, IL | — | 1,708 | 3,839 | — | 1,708 | 3,839 | 258 | 2018 | 1964 | 280 East Losey Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gardner, KS | — | 200 | 2,800 | 93 | 200 | 2,893 | 433 | 2015 | 2000 | 869 Juniper Terrace | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gastonia, NC | — | 470 | 6,129 | 55 | 470 | 6,184 | 2,826 | 2003 | 1998 | 1680 S. New Hope Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gastonia, NC | — | 310 | 3,096 | 85 | 310 | 3,181 | 1,497 | 2003 | 1994 | 1717 Union Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gastonia, NC | — | 400 | 5,029 | 624 | 400 | 5,653 | 2,385 | 2003 | 1996 | 1750 Robinwood Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Geneva, IL | — | 1,502 | 16,193 | — | 1,502 | 16,193 | 1,071 | 2018 | 2000 | 2388 Bricher Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Georgetown, TX | — | 200 | 2,100 | — | 200 | 2,100 | 1,278 | 1997 | 1997 | 2600 University Dr., E. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gig Harbor, WA | — | 3,000 | 4,461 | — | 3,000 | 4,461 | 362 | 2018 | 1990 | 3309 45th Street Court Northwest | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Glen Ellyn, IL | — | 1,496 | 6,634 | — | 1,496 | 6,634 | 488 | 2018 | 2001 | 2S706 Park Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Granbury, TX | — | 2,550 | 2,940 | 777 | 2,550 | 3,717 | 1,015 | 2012 | 1996 | 916 East Highway 377 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Granger, IN | — | 1,670 | 21,280 | 2,401 | 1,670 | 23,681 | 6,248 | 2010 | 2009 | 6330 North Fir Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grapevine, TX | — | 2,220 | 17,648 | 112 | 2,220 | 17,760 | 2,451 | 2013 | 2014 | 4545 Merlot Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greeley, CO | — | 1,077 | 18,051 | — | 1,077 | 18,051 | 1,877 | 2017 | 2009 | 5300 West 29th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greensboro, NC | — | 330 | 2,970 | 643 | 330 | 3,613 | 1,669 | 2003 | 1996 | 5809 Old Oak Ridge Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greensboro, NC | — | 560 | 5,507 | 1,390 | 560 | 6,897 | 3,072 | 2003 | 1997 | 4400 Lawndale Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenville, MI | — | — | — | 5,831 | 1,490 | 4,341 | 41 | 2020 | 2016 | 1515 Meijer Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenville, SC | — | 310 | 4,750 | 252 | 310 | 5,002 | 2,143 | 2004 | 1997 | 23 Southpointe Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenville, SC | — | 1,751 | 8,771 | — | 1,751 | 8,771 | 596 | 2018 | 1966 | 600 Sulphur Springs Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenville, SC | — | 947 | 1,445 | — | 947 | 1,445 | 164 | 2018 | 1976 | 601 Sulphur Springs Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenville, NC | — | 290 | 4,393 | 328 | 290 | 4,721 | 2,097 | 2003 | 1998 | 2715 Dickinson Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenwood, IN | — | 1,550 | 22,770 | 81 | 1,550 | 22,851 | 6,128 | 2010 | 2007 | 2339 South SR 135 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grosse Pointe, MI | — | 867 | 2,385 | — | 867 | 2,385 | 170 | 2018 | 1964 | 21401 Mack Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Groton, CT | — | 2,430 | 19,941 | 968 | 2,430 | 20,909 | 6,038 | 2011 | 1975 | 1145 Poquonnock Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hamilton, NJ | — | 440 | 4,469 | — | 440 | 4,469 | 2,206 | 2001 | 1998 | 1645 Whitehorse-Mercerville Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hanahan, SC | — | 1,934 | 3,986 | — | 1,934 | 3,986 | 322 | 2018 | 1989 | 1800 Eagle Landing Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hanford, UK | — | 1,382 | 9,829 | 1,204 | 1,530 | 10,885 | 2,131 | 2013 | 2012 | Bankhouse Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Harrisburg, PA | — | 569 | 12,822 | — | 569 | 12,822 | 844 | 2018 | 2000 | 2625 Ailanthus Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Harrow, UK | — | 7,402 | 8,266 | 1,683 | 8,197 | 9,154 | 1,538 | 2014 | 2001 | 177 Preston Hill | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hastings, MI | — | — | — | 8,122 | 1,603 | 6,519 | 51 | 2020 | 2002 | 1821 N. East St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hatboro, PA | — | — | 28,112 | 1,771 | — | 29,883 | 7,692 | 2011 | 1996 | 3485 Davisville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hatboro, PA | — | 1,192 | 7,608 | — | 1,192 | 7,608 | 683 | 2018 | 2000 | 779 West County Line Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hatfield, UK | — | 2,924 | 7,527 | 1,122 | 3,238 | 8,335 | 1,644 | 2013 | 2012 | St Albans Road East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hattiesburg, MS | — | 450 | 13,469 | — | 450 | 13,469 | 3,467 | 2010 | 2009 | 217 Methodist Hospital Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hemet, CA | — | 6,224 | 8,410 | — | 6,224 | 8,410 | 575 | 2018 | 1989 | 1717 West Stetson Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Henry, IL | — | 1,860 | 3,688 | — | 1,860 | 3,688 | 239 | 2018 | 1987 | 1650 Old Indian Town Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hermitage, TN | — | 1,500 | 9,943 | 540 | 1,500 | 10,483 | 2,470 | 2011 | 2006 | 4131 Andrew Jackson Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Herne Bay, UK | — | 1,900 | 24,353 | 3,585 | 2,104 | 27,734 | 5,757 | 2013 | 2011 | 165 Reculver Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hiawatha, KS | — | 40 | 4,210 | 29 | 40 | 4,239 | 619 | 2015 | 1996 | 400 Kansas Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hickory, NC | — | 290 | 987 | 374 | 290 | 1,361 | 696 | 2003 | 1994 | 2530 16th St. N.E. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| High Point, NC | — | 560 | 4,443 | 894 | 560 | 5,337 | 2,450 | 2003 | 2000 | 1568 Skeet Club Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| High Point, NC | — | 370 | 2,185 | 464 | 370 | 2,649 | 1,265 | 2003 | 1999 | 1564 Skeet Club Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| High Point, NC | — | 330 | 3,395 | 126 | 330 | 3,521 | 1,609 | 2003 | 1994 | 201 W. Hartley Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| High Point, NC | — | 430 | 4,143 | 186 | 430 | 4,329 | 1,937 | 2003 | 1998 | 1560 Skeet Club Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Highlands Ranch, CO | — | 940 | 3,721 | 4,983 | 940 | 8,704 | 2,728 | 2002 | 1999 | 9160 S. University Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hillsboro, OH | — | 1,792 | 6,339 | — | 1,792 | 6,339 | 589 | 2018 | 1983 | 1141 Northview Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hinckley, UK | — | 2,159 | 4,194 | 682 | 2,391 | 4,644 | 1,003 | 2013 | 2013 | Tudor Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hinsdale, IL | — | 4,033 | 24,280 | — | 4,033 | 24,280 | 1,517 | 2018 | 1971 | 600 W Ogden Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hockessin, DE | — | 1,120 | 6,308 | 1,247 | 1,120 | 7,555 | 1,385 | 2014 | 1992 | 100 Saint Claire Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Holton, KS | — | 40 | 7,460 | 13 | 40 | 7,473 | 1,018 | 2015 | 1996 | 410 Juniper Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Homewood, IL | — | 2,395 | 7,649 | — | 2,395 | 7,649 | 489 | 2018 | 1989 | 940 Maple Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Howard, WI | — | 579 | 32,122 | 3,072 | 633 | 35,140 | 3,268 | 2017 | 2016 | 2790 Elm Tree Hill | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Huntingdon Valley, PA | — | 1,150 | 3,728 | — | 1,150 | 3,728 | 355 | 2018 | 1993 | 3430 Huntingdon Pike | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hutchinson, KS | — | 600 | 10,590 | 397 | 600 | 10,987 | 4,525 | 2004 | 1997 | 2416 Brentwood | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Independence, VA | — | 1,082 | 6,767 | 7 | 1,082 | 6,774 | 1,221 | 2018 | 1998 | 400 S Independence Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Indianapolis, IN | — | 870 | 14,688 | — | 870 | 14,688 | 2,729 | 2014 | 2014 | 1635 N Arlington Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Indianapolis, IN | — | 1,105 | 6,642 | — | 1,105 | 6,642 | 428 | 2018 | 1979 | 8549 South Madison Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jackson, NJ | — | 6,500 | 26,405 | 3,107 | 6,500 | 29,512 | 6,091 | 2012 | 2001 | 2 Kathleen Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jacksonville, FL | — | 750 | 25,231 | 115 | 750 | 25,346 | 2,963 | 2013 | 2014 | 5939 Roosevelt Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jacksonville, FL | — | — | 26,381 | 1,805 | 1,691 | 26,495 | 3,092 | 2013 | 2014 | 4000 San Pablo Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jacksonville, FL | — | 1,752 | 2,552 | — | 1,752 | 2,552 | 173 | 2018 | 1989 | 3648 University Blvd South | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jacksonville, FL | — | 2,182 | 9,488 | — | 2,182 | 9,488 | 689 | 2018 | 1980 | 8495 Normandy Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jefferson Hills, PA | — | 2,265 | 13,614 | — | 2,265 | 13,614 | 1,309 | 2018 | 1997 | 380 Wray Large Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jersey Shore, PA | — | 600 | 8,104 | — | 600 | 8,104 | 499 | 2018 | 1973 | 1008 Thompson Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kansas City, KS | — | 700 | 20,115 | — | 700 | 20,115 | 2,890 | 2015 | 2015 | 8900 Parallel Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Katy, TX | — | 1,778 | 22,622 | — | 1,778 | 22,622 | 2,366 | 2017 | 2015 | 24802 Kingsland Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kensington, MD | — | 1,753 | 18,621 | — | 1,753 | 18,621 | 1,186 | 2018 | 2002 | 4301 Knowles Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kenwood, OH | — | 821 | 11,040 | — | 821 | 11,040 | 727 | 2018 | 2000 | 4580 East Galbraith Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kettering, OH | — | 1,229 | 4,701 | — | 1,229 | 4,701 | 352 | 2018 | 1977 | 3313 Wilmington Pike | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| King of Prussia, PA | — | 720 | 14,776 | — | 720 | 14,776 | 1,009 | 2018 | 1995 | 620 West Valley Forge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| King of Prussia, PA | — | 1,205 | 4,725 | — | 1,205 | 4,725 | 381 | 2018 | 1990 | 600 West Valley Forge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kingsford, MI | — | 1,362 | 10,594 | — | 1,362 | 10,594 | 727 | 2018 | 1968 | 1225 Woodward Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kingston, PA | — | 986 | 5,710 | — | 986 | 5,710 | 382 | 2018 | 1974 | 200 Second Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kirkstall, UK | — | 2,437 | 9,414 | 1,272 | 2,698 | 10,425 | 2,047 | 2013 | 2009 | 29 Broad Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kokomo, IN | — | 710 | 16,044 | — | 710 | 16,044 | 2,974 | 2014 | 2014 | 2200 S. Dixon Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lacey, WA | — | 2,582 | 18,175 | — | 2,582 | 18,175 | 1,175 | 2018 | 2012 | 4524 Intelco Loop SE | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lafayette, CO | — | 1,420 | 20,192 | — | 1,420 | 20,192 | 3,143 | 2015 | 2015 | 329 Exempla Circle | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lafayette, IN | — | 670 | 16,833 | 1 | 670 | 16,834 | 2,866 | 2015 | 2014 | 2402 South Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeway, TX | — | 5,142 | 23,203 | — | 5,142 | 23,203 | 4,717 | 2007 | 2011 | 2000 Medical Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakewood, CO | — | 2,160 | 28,091 | 62 | 2,160 | 28,153 | 5,037 | 2014 | 2010 | 7395 West Eastman Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakewood Ranch, FL | — | 650 | 6,714 | 1,988 | 650 | 8,702 | 1,939 | 2011 | 2012 | 8230 Nature's Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakewood Ranch, FL | — | 1,000 | 22,388 | 89 | 1,000 | 22,477 | 5,000 | 2012 | 2005 | 8220 Natures Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lancaster, PA | — | 1,680 | 14,039 | — | 1,680 | 14,039 | 1,557 | 2015 | 2017 | 31 Millersville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lancaster, PA | — | 1,011 | 7,502 | — | 1,011 | 7,502 | 502 | 2018 | 1966 | 100 Abbeyville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lapeer, MI | — | — | — | 10,621 | 1,827 | 8,794 | 65 | 2020 | 2004 | 101 Devonshire Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Largo, FL | — | 1,166 | 3,426 | — | 1,166 | 3,426 | 296 | 2018 | 1997 | 300 Highland Avenue Northeast | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas, NV | — | 580 | 23,420 | — | 580 | 23,420 | 5,846 | 2011 | 2002 | 2500 North Tenaya Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laureldale, PA | — | 1,171 | 14,420 | — | 1,171 | 14,420 | 931 | 2018 | 1980 | 2125 Elizabeth Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lawrence, KS | — | 250 | 8,716 | — | 250 | 8,716 | 1,923 | 2012 | 1996 | 3220 Peterson Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lebanon, PA | — | 728 | 10,367 | — | 728 | 10,367 | 733 | 2018 | 1998 | 100 Tuck Court | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lebanon, PA | — | 1,214 | 5,960 | — | 1,214 | 5,960 | 473 | 2018 | 1980 | 900 Tuck Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lee, MA | — | 290 | 18,135 | 926 | 290 | 19,061 | 9,316 | 2002 | 1998 | 600 & 620 Laurel St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leeds, UK | — | 1,974 | 13,239 | 1,634 | 2,186 | 14,661 | 2,160 | 2015 | 2013 | 100 Grove Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leicester, UK | — | 3,060 | 24,410 | 2,950 | 3,388 | 27,032 | 5,645 | 2012 | 2010 | 307 London Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lenoir, NC | — | 190 | 3,748 | 920 | 190 | 4,668 | 2,047 | 2003 | 1998 | 1145 Powell Rd., N.E. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lethbridge, AB | 1,245 | 1,214 | 2,750 | 347 | 1,317 | 2,994 | 674 | 2014 | 2003 | 785 Columbia Boulevard West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lexana, KS | — | 480 | 1,770 | 152 | 480 | 1,922 | 311 | 2015 | 1994 | 8710 Caenen Lake Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lexington, NC | — | 200 | 3,900 | 1,123 | 200 | 5,023 | 2,359 | 2002 | 1997 | 161 Young Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Libertyville, IL | — | 6,500 | 40,024 | 75 | 6,500 | 40,099 | 10,693 | 2011 | 2001 | 901 Florsheim Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Libertyville, IL | — | 2,993 | 11,546 | — | 2,993 | 11,546 | 732 | 2018 | 1988 | 1500 South Milwaukee | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lichfield, UK | — | 1,382 | 30,324 | 3,405 | 1,530 | 33,581 | 4,959 | 2015 | 2012 | Wissage Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lillington, NC | — | 470 | 17,579 | — | 470 | 17,579 | 3,140 | 2014 | 2013 | 54 Red Mulberry Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lillington, NC | — | 500 | 16,451 | — | 500 | 16,451 | 2,759 | 2014 | 1999 | 2041 NC-210 N | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lincoln, NE | — | 390 | 13,807 | 95 | 390 | 13,902 | 3,884 | 2010 | 2000 | 7208 Van Dorn St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lititz, PA | — | 1,200 | 13,836 | — | 1,200 | 13,836 | 1,537 | 2015 | 2016 | 80 West Millport Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Livermore, CA | — | 4,100 | 24,996 | 79 | 4,100 | 25,075 | 3,910 | 2014 | 1974 | 35 Fenton Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Livonia, MI | — | 985 | 13,555 | — | 985 | 13,555 | 924 | 2018 | 1999 | 32500 Seven Mile Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Livonia, MI | — | 1,836 | 2,277 | — | 1,836 | 2,277 | 185 | 2018 | 1960 | 28550 Five Mile Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Longwood, FL | — | 1,260 | 6,445 | — | 1,260 | 6,445 | 1,742 | 2011 | 2011 | 425 South Ronald Reagan Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Los Angeles, CA | — | — | 11,430 | 1,058 | — | 12,488 | 3,719 | 2008 | 1971 | 330 North Hayworth Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisburg, KS | — | 280 | 4,320 | 44 | 280 | 4,364 | 601 | 2015 | 1996 | 202 Rogers St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Louisville, KY | — | 490 | 10,010 | 2,768 | 490 | 12,778 | 5,419 | 2005 | 1978 | 4604 Lowe Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loxley, UK | — | 1,369 | 15,668 | 2,636 | 1,516 | 18,157 | 3,551 | 2013 | 2008 | Loxley Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lutherville, MD | — | 1,100 | 19,786 | 1,744 | 1,100 | 21,530 | 5,663 | 2011 | 1988 | 515 Brightfield Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lynchburg, VA | — | 340 | 16,114 | — | 340 | 16,114 | 2,923 | 2014 | 2013 | 189 Monica Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lynchburg, VA | — | 2,904 | 3,696 | — | 2,904 | 3,696 | 244 | 2018 | 1978 | 2200 Landover Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lynnwood, WA | — | 2,302 | 5,632 | — | 2,302 | 5,632 | 378 | 2018 | 1987 | 3701 188th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Macomb, IL | — | 1,586 | 4,058 | — | 1,586 | 4,058 | 260 | 2018 | 1966 | 8 Doctors Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Macungie, PA | — | 960 | 29,033 | 84 | 960 | 29,117 | 7,618 | 2011 | 1994 | 1718 Spring Creek Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Manalapan, NJ | — | 900 | 22,624 | 760 | 900 | 23,384 | 5,745 | 2011 | 2001 | 445 Route 9 South | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Manassas, VA | — | 750 | 7,446 | 1,103 | 750 | 8,549 | 3,484 | 2003 | 1996 | 8341 Barrett Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mankato, MN | — | 1,460 | 32,104 | 300 | 1,460 | 32,404 | 4,285 | 2015 | 2006 | 100 Dublin Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marietta, OH | — | 1,149 | 9,373 | — | 1,149 | 9,373 | 614 | 2018 | 1977 | 5001 State Route 60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marietta, GA | — | 2,406 | 12,229 | — | 2,406 | 12,229 | 784 | 2018 | 1980 | 4360 Johnson Ferry Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marietta, PA | — | 1,050 | 13,633 | 537 | 1,050 | 14,170 | 1,944 | 2015 | 1999 | 2760 Maytown Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marion, IN | — | 720 | 9,604 | — | 720 | 9,604 | 2,465 | 2014 | 2012 | 614 W. 14th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marion, IN | — | 990 | 9,190 | 824 | 990 | 10,014 | 2,322 | 2014 | 1976 | 505 N. Bradner Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marion, OH | — | 2,768 | 17,415 | — | 2,768 | 17,415 | 1,453 | 2018 | 2004 | 400 Barks Road West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marlborough, UK | — | 2,677 | 6,822 | 1,021 | 2,965 | 7,555 | 1,240 | 2014 | 1999 | The Common | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Martinsville, VA | — | 349 | — | — | 349 | — | — | 2003 | 1900 | Rolling Hills Rd. & US Hwy. 58 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Matawan, NJ | — | 1,830 | 20,618 | 166 | 1,830 | 20,784 | 5,370 | 2011 | 1965 | 625 State Highway 34 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Matthews, NC | — | 560 | 4,738 | 137 | 560 | 4,875 | 2,252 | 2003 | 1998 | 2404 Plantation Center Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| McHenry, IL | — | 1,576 | — | — | 1,576 | — | — | 2006 | 1900 | 5200 Block of Bull Valley Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| McMurray, PA | — | 1,440 | 15,805 | 3,894 | 1,440 | 19,699 | 4,738 | 2010 | 2011 | 240 Cedar Hill Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Medicine Hat, AB | 2,046 | 932 | 5,566 | 564 | 1,012 | 6,050 | 1,082 | 2014 | 1999 | 65 Valleyview Drive SW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mentor, OH | — | 1,827 | 9,938 | — | 1,827 | 9,938 | 660 | 2018 | 1985 | 8200 Mentor Hills Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mercerville, NJ | — | 860 | 9,929 | 173 | 860 | 10,102 | 2,922 | 2011 | 1967 | 2240 White Horse- Merceville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Meriden, CT | — | 1,300 | 1,472 | 233 | 1,300 | 1,705 | 961 | 2011 | 1968 | 845 Paddock Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Miamisburg, OH | — | 786 | 3,232 | — | 786 | 3,232 | 303 | 2018 | 1983 | 450 Oak Ridge Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Middleburg Heights, OH | — | 960 | 7,780 | 472 | 960 | 8,252 | 3,326 | 2004 | 1998 | 15435 Bagley Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Middleton, WI | — | 420 | 4,006 | 600 | 420 | 4,606 | 2,141 | 2001 | 1991 | 6701 Stonefield Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Milton Keynes, UK | — | 1,826 | 18,654 | 2,199 | 2,022 | 20,657 | 3,141 | 2015 | 2007 | Tunbridge Grove, Kents Hill | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Minnetonka, MN | — | 2,080 | 24,360 | 1,806 | 2,080 | 26,166 | 6,883 | 2012 | 1999 | 500 Carlson Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mishawaka, IN | — | 740 | 10,698 | — | 740 | 10,698 | 3,023 | 2014 | 2013 | 60257 Bodnar Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Moline, IL | — | 2,946 | 18,672 | — | 2,946 | 18,672 | 1,158 | 2018 | 1964 | 833 Sixteenth Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monmouth Junction, NJ | — | 720 | 6,209 | 86 | 720 | 6,295 | 1,919 | 2011 | 1996 | 2 Deer Park Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monroe, NC | — | 470 | 3,681 | 839 | 470 | 4,520 | 2,050 | 2003 | 2001 | 918 Fitzgerald St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monroe, NC | — | 310 | 4,799 | 922 | 310 | 5,721 | 2,585 | 2003 | 2000 | 919 Fitzgerald St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monroe, NC | — | 450 | 4,021 | 386 | 450 | 4,407 | 1,955 | 2003 | 1997 | 1316 Patterson Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monroe Township, NJ | — | 3,250 | 27,771 | 765 | 3,250 | 28,536 | 3,767 | 2015 | 1996 | 319 Forsgate Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monroeville, PA | — | 1,216 | 12,749 | — | 1,216 | 12,749 | 1,006 | 2018 | 1997 | 120 Wyngate Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monroeville, PA | — | 1,237 | 3,641 | — | 1,237 | 3,641 | 383 | 2018 | 1996 | 885 MacBeth Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Montgomeryville, PA | — | 1,176 | 9,824 | — | 1,176 | 9,824 | 686 | 2018 | 1989 | 640 Bethlehem Pike | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Montville, NJ | — | 3,500 | 31,002 | 1,699 | 3,500 | 32,701 | 8,126 | 2011 | 1988 | 165 Changebridge Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Moorestown, NJ | — | 4,143 | 23,902 | — | 4,143 | 23,902 | 4,655 | 2012 | 2014 | 250 Marter Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Morehead City, NC | — | 200 | 3,104 | 1,787 | 200 | 4,891 | 2,483 | 1999 | 1999 | 107 Bryan St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Morrison, CO | — | 2,720 | 16,261 | 17 | 2,720 | 16,278 | 1,983 | 2018 | 1974 | 150 Spring Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Moulton, UK | — | 1,695 | 12,510 | 2,079 | 1,711 | 14,573 | 1,368 | 2017 | 1995 | Northampton Lane North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mountainside, NJ | — | 3,097 | 7,807 | — | 3,097 | 7,807 | 525 | 2018 | 1988 | 1180 Route 22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mt. Pleasant, MI | — | — | — | 8,330 | 1,863 | 6,467 | 57 | 2020 | 2013 | 2378 S. Lincoln Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Naperville, IL | — | 3,470 | 29,547 | 62 | 3,470 | 29,609 | 8,046 | 2011 | 2001 | 504 North River Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Naples, FL | — | 1,222 | 10,639 | — | 1,222 | 10,639 | 749 | 2018 | 1998 | 6125 Rattlesnake Hammock Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Naples, FL | — | 1,672 | 23,119 | — | 1,672 | 23,119 | 1,813 | 2018 | 1993 | 1000 Lely Palms Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Naples, FL | — | 1,854 | 12,398 | — | 1,854 | 12,398 | 786 | 2018 | 1987 | 3601 Lakewood Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nashville, TN | — | 4,910 | 29,590 | — | 4,910 | 29,590 | 9,905 | 2008 | 2007 | 15 Burton Hills Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Naugatuck, CT | — | 1,200 | 15,826 | 199 | 1,200 | 16,025 | 4,382 | 2011 | 1980 | 4 Hazel Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Needham, MA | — | 1,610 | 12,667 | — | 1,610 | 12,667 | 5,960 | 2002 | 1994 | 100 West St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| New Lenox, IL | — | 1,225 | 21,575 | — | 1,225 | 21,575 | 1,067 | 2019 | 2007 | 1023 South Cedar Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| New Moston, UK | — | 1,480 | 4,378 | 630 | 1,639 | 4,849 | 991 | 2013 | 2010 | 90a Broadway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newark, DE | — | 560 | 21,220 | 2,442 | 560 | 23,662 | 9,189 | 2004 | 1998 | 200 E. Village Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newcastle Under Lyme, UK | — | 1,110 | 5,655 | 728 | 1,230 | 6,263 | 1,223 | 2013 | 2010 | Hempstalls Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newcastle-under-Lyme, UK | — | 1,125 | 5,537 | 716 | 1,246 | 6,132 | 1,006 | 2014 | 1999 | Silverdale Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newport News, VA | — | 839 | 6,077 | 6 | 839 | 6,083 | 1,071 | 2018 | 1998 | 12997 Nettles Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Norman, OK | — | 55 | 1,484 | — | 55 | 1,484 | 1,000 | 1995 | 1995 | 1701 Alameda Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Norman, OK | — | 1,480 | 33,330 | — | 1,480 | 33,330 | 7,285 | 2012 | 1985 | 800 Canadian Trails Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Augusta, SC | — | 332 | 2,558 | — | 332 | 2,558 | 1,467 | 1999 | 1998 | 105 North Hills Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Cape May, NJ | — | 77 | 151 | 4,294 | 77 | 4,445 | 328 | 2015 | 1988 | 610 Town Bank Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northampton, UK | — | 5,182 | 17,348 | 2,420 | 5,738 | 19,212 | 3,900 | 2013 | 2011 | Cliftonville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northampton, UK | — | 2,013 | 6,257 | 889 | 2,230 | 6,929 | 1,068 | 2014 | 2014 | Cliftonville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northbrook, IL | — | 1,298 | 13,337 | — | 1,298 | 13,337 | 866 | 2018 | 1999 | 3240 Milwaukee Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nuneaton, UK | — | 3,325 | 8,983 | 1,321 | 3,682 | 9,947 | 1,944 | 2013 | 2011 | 132 Coventry Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nuthall, UK | — | 1,628 | 6,263 | 848 | 1,803 | 6,936 | 1,055 | 2014 | 2014 | 172A Nottingham Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nuthall, UK | — | 2,498 | 10,436 | 1,390 | 2,767 | 11,557 | 2,282 | 2013 | 2011 | 172 Nottingham Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oak Lawn, IL | — | 2,418 | 5,426 | — | 2,418 | 5,426 | 350 | 2018 | 1977 | 9401 South Kostner Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oak Lawn, IL | — | 3,876 | 7,985 | — | 3,876 | 7,985 | 534 | 2018 | 1960 | 6300 W 95th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oakland, CA | — | 4,760 | 16,143 | 282 | 4,760 | 16,425 | 2,808 | 2014 | 2002 | 468 Perkins Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ocala, FL | — | 1,340 | 10,564 | 105 | 1,340 | 10,669 | 3,369 | 2008 | 2009 | 2650 SE 18TH Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City, OK | — | 590 | 7,513 | — | 590 | 7,513 | 2,589 | 2007 | 2008 | 13200 S. May Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City, OK | — | 760 | 7,017 | — | 760 | 7,017 | 2,401 | 2007 | 2009 | 11320 N. Council Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City, OK | — | — | — | 17,862 | 1,590 | 16,272 | 563 | 2014 | 2016 | 2800 SW 131st Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Olathe, KS | — | 1,930 | 19,765 | 553 | 1,930 | 20,318 | 2,998 | 2016 | 2015 | 21250 W 151 Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Omaha, NE | — | 370 | 10,230 | — | 370 | 10,230 | 2,916 | 2010 | 1998 | 11909 Miracle Hills Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Omaha, NE | — | 380 | 8,769 | — | 380 | 8,769 | 2,641 | 2010 | 1999 | 5728 South 108th St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ona, WV | — | 950 | 7,460 | — | 950 | 7,460 | 2,049 | 2015 | 2007 | 100 Weatherholt Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oneonta, NY | — | 80 | 5,020 | — | 80 | 5,020 | 1,697 | 2007 | 1996 | 1846 County Highway 48 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Orange Park, FL | — | 2,201 | 4,016 | — | 2,201 | 4,016 | 361 | 2018 | 1990 | 570 Wells Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Orem, UT | — | 2,150 | 24,107 | — | 2,150 | 24,107 | 3,264 | 2015 | 2014 | 250 East Center Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Osage City, KS | — | 50 | 1,700 | 142 | 50 | 1,842 | 311 | 2015 | 1996 | 1403 Laing St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Osawatomie, KS | — | 130 | 2,970 | 136 | 130 | 3,106 | 477 | 2015 | 2003 | 1520 Parker Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ottawa, KS | — | 160 | 6,590 | 44 | 160 | 6,634 | 928 | 2015 | 2007 | 2250 S Elm St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Overland Park, KS | — | 4,500 | 29,105 | 38,441 | 8,230 | 63,816 | 19,060 | 2010 | 1988 | 6101 W 119th St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Overland Park, KS | — | 410 | 2,840 | 92 | 410 | 2,932 | 469 | 2015 | 2004 | 14430 Metcalf Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Overland Park, KS | — | 1,300 | 25,311 | 677 | 1,300 | 25,988 | 3,760 | 2016 | 2015 | 7600 Antioch Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owasso, OK | — | 215 | 1,380 | — | 215 | 1,380 | 866 | 1996 | 1996 | 12807 E. 86th Place N. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owensboro, KY | — | 225 | 13,275 | — | 225 | 13,275 | 5,736 | 2005 | 1964 | 1205 Leitchfield Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owenton, KY | — | 100 | 2,400 | — | 100 | 2,400 | 1,206 | 2005 | 1979 | 905 Hwy. 127 N. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palm Beach Gardens, FL | — | 2,082 | 6,622 | — | 2,082 | 6,622 | 490 | 2018 | 1991 | 11375 Prosperity Farms Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palm Coast, FL | — | 870 | 10,957 | 102 | 870 | 11,059 | 3,352 | 2008 | 2010 | 50 Town Ct. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palm Desert, CA | — | 6,195 | 8,918 | — | 6,195 | 8,918 | 599 | 2018 | 1989 | 74350 Country Club Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palm Harbor, FL | — | 1,306 | 13,807 | — | 1,306 | 13,807 | 962 | 2018 | 1997 | 2895 Tampa Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palm Harbor, FL | — | 3,281 | 22,450 | — | 3,281 | 22,450 | 1,535 | 2018 | 1990 | 2851 Tampa Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palos Heights, IL | — | 1,225 | 12,453 | — | 1,225 | 12,453 | 795 | 2018 | 1999 | 7880 West College Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palos Heights, IL | — | 3,431 | 28,803 | — | 3,431 | 28,803 | 1,776 | 2018 | 1987 | 7850 West College Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Palos Heights, IL | — | 2,590 | 7,644 | — | 2,590 | 7,644 | 490 | 2018 | 1996 | 11860 Southwest Hwy | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Panama City Beach, FL | — | 900 | 6,402 | 734 | 900 | 7,136 | 1,520 | 2011 | 2005 | 6012 Magnolia Beach Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Paola, KS | — | 190 | 5,610 | 59 | 190 | 5,669 | 809 | 2015 | 2000 | 601 N. East Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Parma, OH | — | 960 | 12,718 | — | 960 | 12,718 | 870 | 2018 | 1998 | 9205 Sprague Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Parma, OH | — | 1,833 | 10,314 | — | 1,833 | 10,314 | 794 | 2018 | 2006 | 9055 West Sprague Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Paulsboro, NJ | — | 3,264 | 8,023 | — | 3,264 | 8,023 | 555 | 2018 | 1987 | 550 Jessup Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Paw Paw, MI | — | — | — | 7,289 | 1,687 | 5,602 | 51 | 2020 | 2012 | 677 Hazen | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Perrysburg, OH | — | 1,456 | 5,431 | — | 1,456 | 5,431 | 379 | 2018 | 1973 | 10540 Fremont Pike | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Perrysburg, OH | — | 1,213 | 7,108 | — | 1,213 | 7,108 | 460 | 2018 | 1978 | 10542 Fremont Pike | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Philadelphia, PA | — | 2,930 | 10,433 | 3,536 | 2,930 | 13,969 | 4,088 | 2011 | 1952 | 1526 Lombard Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Phillipsburg, NJ | — | 800 | 21,175 | 238 | 800 | 21,413 | 5,858 | 2011 | 1992 | 290 Red School Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Phillipsburg, NJ | — | 300 | 8,114 | 101 | 300 | 8,215 | 2,249 | 2011 | 1905 | 843 Wilbur Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pikesville, MD | — | — | 2,487 | — | — | 2,487 | 151 | 2018 | 1998 | 8911 Reisterstown Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pikesville, MD | — | 4,247 | 8,379 | — | 4,247 | 8,379 | 605 | 2018 | 1996 | 8909 Reisterstown Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pinehurst, NC | — | 290 | 2,690 | 521 | 290 | 3,211 | 1,535 | 2003 | 1998 | 17 Regional Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Piqua, OH | — | 204 | 1,885 | — | 204 | 1,885 | 1,114 | 1997 | 1997 | 1744 W. High St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Piscataway, NJ | — | 3,100 | 33,501 | — | 3,100 | 33,501 | 3,315 | 2013 | 2017 | 10 Sterling Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pittsburgh, PA | — | 603 | 11,354 | — | 603 | 11,354 | 772 | 2018 | 1998 | 1125 Perry Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pittsburgh, PA | — | 1,005 | 15,160 | — | 1,005 | 15,160 | 992 | 2018 | 1997 | 505 Weyman Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pittsburgh, PA | — | 1,140 | 3,164 | — | 1,140 | 3,164 | 209 | 2018 | 1962 | 550 South Negley Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pittsburgh, PA | — | 994 | 3,789 | — | 994 | 3,789 | 356 | 2018 | 1986 | 2170 Rhine Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pittsburgh, PA | — | 761 | 4,213 | — | 761 | 4,213 | 267 | 2018 | 1965 | 5609 Fifth Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pittsburgh, PA | — | 1,480 | 9,712 | — | 1,480 | 9,712 | 718 | 2018 | 1986 | 1105 Perry Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pittsburgh, PA | — | 1,139 | 5,844 | — | 1,139 | 5,844 | 423 | 2018 | 1986 | 1848 Greentree Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pittsburgh, PA | — | 1,750 | 8,572 | 6,320 | 1,750 | 14,892 | 4,061 | 2005 | 1998 | 100 Knoedler Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plainview, NY | — | 3,990 | 11,969 | 1,713 | 3,990 | 13,682 | 3,719 | 2011 | 1963 | 150 Sunnyside Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plano, TX | — | 1,840 | 20,152 | 560 | 1,840 | 20,712 | 2,802 | 2016 | 2016 | 3325 W Plano Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plattsmouth, NE | — | 250 | 5,650 | — | 250 | 5,650 | 1,694 | 2010 | 1999 | 1913 E. Highway 34 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Poole, UK | — | 3,520 | 17,691 | — | 3,520 | 17,691 | 652 | 2019 | 2019 | Kingsmill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Potomac, MD | — | 1,448 | 14,622 | — | 1,448 | 14,622 | 939 | 2018 | 1994 | 10718 Potomac Tennis Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Potomac, MD | — | 4,119 | 14,916 | — | 4,119 | 14,916 | 989 | 2018 | 1988 | 10714 Potomac Tennis Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pottstown, PA | — | 984 | 4,563 | — | 984 | 4,563 | 325 | 2018 | 1907 | 724 North Charlotte Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pottsville, PA | — | 171 | 3,559 | — | 171 | 3,559 | 237 | 2018 | 1976 | 420 Pulaski Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Lake, MN | 13,320 | 1,870 | 29,849 | 300 | 1,870 | 30,149 | 3,983 | 2015 | 2003 | 4685 Park Nicollet Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Raleigh, NC | — | 7,598 | 88,870 | 904 | 7,598 | 89,774 | 8,796 | 2008 | 2017 | 4030 Cardinal at North Hills St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Raleigh, NC | — | 3,530 | 59,589 | — | 3,530 | 59,589 | 12,968 | 2012 | 2002 | 5301 Creedmoor Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Raleigh, NC | — | 2,580 | 16,837 | — | 2,580 | 16,837 | 3,901 | 2012 | 1988 | 7900 Creedmoor Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reading, PA | — | 980 | 19,906 | 140 | 980 | 20,046 | 5,407 | 2011 | 1994 | 5501 Perkiomen Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Red Bank, NJ | — | 1,050 | 21,275 | 1,158 | 1,050 | 22,433 | 5,431 | 2011 | 1997 | One Hartford Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redondo Beach, CA | — | — | 9,557 | 711 | — | 10,268 | 7,787 | 2011 | 1957 | 514 North Prospect Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reidsville, NC | — | 170 | 3,830 | 1,383 | 170 | 5,213 | 2,265 | 2002 | 1998 | 2931 Vance St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Richardson, TX | — | 1,468 | 12,975 | — | 1,468 | 12,975 | 867 | 2018 | 1999 | 410 Buckingham Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Richmond, IN | — | 700 | 14,222 | 393 | 700 | 14,615 | 2,142 | 2016 | 2015 | 400 Industries Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Richmond, VA | — | 3,261 | 17,974 | — | 3,261 | 17,974 | 1,141 | 2018 | 1990 | 1719 Bellevue Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Richmond, VA | — | 1,046 | 8,233 | — | 1,046 | 8,233 | 559 | 2018 | 1966 | 2125 Hilliard Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roanoke, VA | — | 748 | 4,483 | 5 | 748 | 4,488 | 996 | 2018 | 1997 | 4355 Pheasant Ridge Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rockford, MI | — | — | — | 15,932 | 2,386 | 13,546 | 85 | 2020 | 2014 | 6070 Northland Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rockville Centre, NY | — | 4,290 | 20,310 | 1,379 | 4,290 | 21,689 | 5,552 | 2011 | 2002 | 260 Maple Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rockwall, TX | — | 2,220 | 17,650 | 112 | 2,220 | 17,762 | 2,508 | 2012 | 2014 | 720 E Ralph Hall Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Romeoville, IL | — | 1,895 | — | — | 1,895 | — | — | 2006 | 1900 | Grand Haven Circle | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roseville, MN | — | 2,140 | 24,679 | 100 | 2,140 | 24,779 | 3,318 | 2015 | 1989 | 2750 North Victoria Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rugeley, UK | — | 1,900 | 10,262 | 1,306 | 2,104 | 11,364 | 2,351 | 2013 | 2010 | Horse Fair | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ruston, LA | — | 710 | 9,790 | — | 710 | 9,790 | 2,715 | 2011 | 1988 | 1401 Ezelle St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| S Holland, IL | — | 1,423 | 8,907 | — | 1,423 | 8,907 | 609 | 2018 | 1997 | 2045 East 170th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salem, OR | — | 449 | 5,171 | 1 | 449 | 5,172 | 2,949 | 1999 | 1998 | 1355 Boone Rd. S.E. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salisbury, NC | — | 370 | 5,697 | 390 | 370 | 6,087 | 2,700 | 2003 | 1997 | 2201 Statesville Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Angelo, TX | — | 260 | 8,800 | 425 | 260 | 9,225 | 3,797 | 2004 | 1997 | 2695 Valleyview Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Angelo, TX | — | 1,050 | 24,689 | 1,361 | 1,050 | 26,050 | 4,374 | 2014 | 1999 | 6101 Grand Court Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio, TX | — | 1,499 | 12,658 | — | 1,499 | 12,658 | 836 | 2018 | 2000 | 15290 Huebner Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio, TX | — | — | 17,303 | — | — | 17,303 | 9,129 | 2007 | 2007 | 8902 Floyd Curl Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Diego, CA | — | — | 22,003 | 1,845 | — | 23,848 | 7,260 | 2008 | 1992 | 555 Washington St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Juan Capistrano, CA | — | 1,390 | 6,942 | 1,506 | 1,390 | 8,448 | 3,880 | 2000 | 2001 | 30311 Camino Capistrano | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sand Springs, OK | — | 910 | 19,654 | — | 910 | 19,654 | 4,376 | 2012 | 2002 | 4402 South 129th Avenue West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sandusky, MI | — | — | — | 7,706 | 967 | 6,739 | 45 | 2020 | 2008 | 70 W. Argyle Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sarasota, FL | — | 475 | 3,175 | — | 475 | 3,175 | 2,064 | 1996 | 1995 | 8450 McIntosh Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sarasota, FL | — | 4,101 | 11,204 | — | 4,101 | 11,204 | 1,190 | 2018 | 1993 | 5401 Sawyer Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sarasota, FL | — | 1,370 | 4,082 | — | 1,370 | 4,082 | 278 | 2018 | 1968 | 3250 12th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sarasota, FL | — | 2,792 | 11,173 | — | 2,792 | 11,173 | 737 | 2018 | 1993 | 5511 Swift Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sarasota, FL | — | 3,360 | 19,140 | — | 3,360 | 19,140 | 4,684 | 2011 | 2006 | 6150 Edgelake Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sarasota, FL | — | 443 | 8,892 | — | 443 | 8,892 | 649 | 2018 | 1998 | 5509 Swift Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Scranton, PA | — | 440 | 17,609 | — | 440 | 17,609 | 3,029 | 2014 | 2005 | 2741 Blvd. Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Scranton, PA | — | 320 | 12,144 | 1 | 320 | 12,145 | 2,082 | 2014 | 2013 | 2751 Boulevard Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seminole, FL | — | 1,165 | 8,975 | — | 1,165 | 8,975 | 634 | 2018 | 1998 | 9300 Antilles Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seven Fields, PA | — | 484 | 4,663 | 59 | 484 | 4,722 | 2,695 | 1999 | 1999 | 500 Seven Fields Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sewell, NJ | — | 3,127 | 14,090 | — | 3,127 | 14,090 | 1,059 | 2018 | 2010 | 378 Fries Mill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shawnee, OK | — | 80 | 1,400 | — | 80 | 1,400 | 903 | 1996 | 1995 | 3947 Kickapoo | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shelbyville, KY | — | 630 | 3,870 | 630 | 630 | 4,500 | 1,789 | 2005 | 1965 | 1871 Midland Trail | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Spring, MD | — | 1,469 | 10,392 | — | 1,469 | 10,392 | 687 | 2018 | 1995 | 2505 Musgrove Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Spring, MD | — | 4,678 | 11,679 | — | 4,678 | 11,679 | 823 | 2018 | 1990 | 2501 Musgrove Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silvis, IL | — | 880 | 16,420 | 139 | 880 | 16,559 | 4,580 | 2010 | 2005 | 1900 10th St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sinking Spring, PA | — | 1,393 | 19,842 | — | 1,393 | 19,842 | 1,296 | 2018 | 1982 | 3000 Windmill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sittingbourne, UK | — | 1,357 | 6,539 | 848 | 1,503 | 7,241 | 1,142 | 2014 | 1997 | 200 London Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Smithfield, NC | — | 290 | 5,680 | 508 | 290 | 6,188 | 2,632 | 2003 | 1998 | 830 Berkshire Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Smithfield, NC | — | 360 | 8,216 | — | 360 | 8,216 | 1,408 | 2014 | 1999 | 250 Highway 210 West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| South Bend, IN | — | 670 | 17,770 | — | 670 | 17,770 | 3,176 | 2014 | 2014 | 52565 State Road 933 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| South Point, OH | — | 1,135 | 9,387 | — | 1,135 | 9,387 | 614 | 2018 | 1984 | 7743 County Road 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southampton, UK | — | 1,519 | 16,041 | 1,250 | 1,627 | 17,183 | 1,506 | 2017 | 2013 | Botley Road, Park Gate | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southbury, CT | — | 1,860 | 23,613 | 958 | 1,860 | 24,571 | 6,218 | 2011 | 2001 | 655 Main St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Spokane, WA | — | 2,649 | 11,699 | — | 2,649 | 11,699 | 774 | 2018 | 1985 | 6025 North Assembly Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Springfield, IL | — | 990 | 13,378 | 1,085 | 990 | 14,463 | 2,536 | 2014 | 2013 | 3089 Old Jacksonville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| St. Louis, MO | — | 1,890 | 12,390 | 837 | 1,890 | 13,227 | 3,365 | 2010 | 1963 | 6543 Chippewa St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| St. Paul, MN | — | 2,100 | 33,019 | 100 | 2,100 | 33,119 | 4,396 | 2015 | 1996 | 750 Mississippi River | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stafford, UK | — | 2,009 | 8,238 | 730 | 2,152 | 8,825 | 1,009 | 2014 | 2016 | Stone Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stamford, UK | — | 1,820 | 3,238 | 543 | 2,015 | 3,586 | 603 | 2014 | 1998 | Priory Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Statesville, NC | — | 150 | 1,447 | 377 | 150 | 1,824 | 827 | 2003 | 1990 | 2441 E. Broad St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Statesville, NC | — | 310 | 6,183 | 164 | 310 | 6,347 | 2,811 | 2003 | 1996 | 2806 Peachtree Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Statesville, NC | — | 140 | 3,627 | 53 | 140 | 3,680 | 1,676 | 2003 | 1999 | 2814 Peachtree Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Staunton, VA | — | 899 | 6,391 | 6 | 899 | 6,397 | 1,153 | 2018 | 1999 | 1410 N Augusta St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sterling Heights, MI | — | 790 | 10,784 | — | 790 | 10,784 | 718 | 2018 | 1996 | 11095 East Fourteen Mile Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sterling Heights, MI | — | 1,583 | 15,634 | — | 1,583 | 15,634 | 1,057 | 2018 | 2013 | 38200 Schoenherr Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stillwater, OK | — | 80 | 1,400 | — | 80 | 1,400 | 905 | 1995 | 1995 | 1616 McElroy Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stratford-upon-Avon, UK | — | 790 | 14,508 | 1,643 | 874 | 16,067 | 2,370 | 2015 | 2012 | Scholars Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stroudsburg, PA | — | 340 | 16,313 | — | 340 | 16,313 | 3,143 | 2014 | 2011 | 370 Whitestone Corner Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunbury, PA | — | 695 | 7,244 | — | 695 | 7,244 | 463 | 2018 | 1981 | 800 Court Street Circle | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunnyvale, CA | — | 4,946 | 22,123 | — | 4,946 | 22,123 | 1,408 | 2018 | 1990 | 1150 Tilton Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Superior, WI | — | 1,020 | 13,735 | 6,159 | 1,020 | 19,894 | 4,005 | 2009 | 2010 | 1915 North 34th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tacoma, WA | — | 2,522 | 8,573 | — | 2,522 | 8,573 | 558 | 2018 | 1984 | 5601 South Orchard Southtreet | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tampa, FL | — | 1,315 | 6,911 | — | 1,315 | 6,911 | 531 | 2018 | 1999 | 14950 Casey Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Terre Haute, IN | — | 1,370 | 18,016 | — | 1,370 | 18,016 | 2,990 | 2015 | 2015 | 395 8th Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Texarkana, TX | — | 192 | 1,403 | — | 192 | 1,403 | 880 | 1996 | 1996 | 4204 Moores Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Villages, FL | — | 1,035 | 7,446 | — | 1,035 | 7,446 | 1,551 | 2013 | 2014 | 2450 Parr Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Thomasville, GA | — | 530 | 12,520 | 1,347 | 530 | 13,867 | 2,766 | 2011 | 2006 | 423 Covington Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Rivers, MI | — | 1,255 | 2,760 | — | 1,255 | 2,760 | 241 | 2018 | 1976 | 517 South Erie Southtreet | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tomball, TX | — | 1,050 | 13,300 | 840 | 1,050 | 14,140 | 3,538 | 2011 | 2001 | 1221 Graham Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toms River, NJ | — | 3,466 | 23,311 | — | 3,466 | 23,311 | 1,742 | 2019 | 2006 | 1657 Silverton Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tonganoxie, KS | — | 310 | 3,690 | 76 | 310 | 3,766 | 593 | 2015 | 2009 | 120 W 8th St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Topeka, KS | — | 260 | 12,712 | — | 260 | 12,712 | 2,923 | 2012 | 2011 | 1931 Southwest Arvonia Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Towson, MD | — | 1,715 | 13,111 | — | 1,715 | 13,111 | 865 | 2018 | 2000 | 8101 Bellona Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Towson, MD | — | 3,100 | 6,465 | — | 3,100 | 6,465 | 408 | 2018 | 1960 | 509 East Joppa Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Towson, MD | — | 4,527 | 3,126 | — | 4,527 | 3,126 | 249 | 2018 | 1970 | 7001 North Charles Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Troy, MI | — | 1,381 | 24,445 | — | 1,381 | 24,445 | 1,543 | 2018 | 2006 | 925 West South Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Troy, OH | — | 200 | 2,000 | 4,254 | 200 | 6,254 | 2,513 | 1997 | 1997 | 81 S. Stanfield Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trumbull, CT | — | 4,440 | 43,384 | — | 4,440 | 43,384 | 11,166 | 2011 | 2001 | 6949 Main Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tulsa, OK | — | 1,390 | 7,110 | 1,102 | 1,390 | 8,212 | 2,542 | 2010 | 1998 | 7220 S. Yale Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tulsa, OK | — | 1,320 | 10,087 | — | 1,320 | 10,087 | 2,417 | 2011 | 2012 | 7902 South Mingo Road East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tulsa, OK | — | 1,100 | 27,007 | 2,233 | 1,100 | 29,240 | 3,182 | 2015 | 2017 | 18001 East 51st Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tulsa, OK | 12,935 | 1,752 | 28,421 | — | 1,752 | 28,421 | 2,830 | 2017 | 2014 | 701 W 71st Street South | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tulsa, OK | — | 890 | 9,410 | — | 890 | 9,410 | 836 | 2017 | 2009 | 7210 South Yale Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tustin, CA | — | 840 | 15,299 | 537 | 840 | 15,836 | 4,448 | 2011 | 1965 | 240 East 3rd St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Twinsburg, OH | — | 1,446 | 5,919 | — | 1,446 | 5,919 | 432 | 2018 | 2014 | 8551 Darrow Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Union, KY | — | — | — | 33,617 | 2,242 | 31,375 | 558 | 2018 | 2020 | 9255 US-42 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Union, SC | — | 1,932 | 2,372 | — | 1,932 | 2,372 | 242 | 2018 | 1981 | 709 Rice Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Valparaiso, IN | — | 112 | 2,558 | — | 112 | 2,558 | 1,326 | 2001 | 1998 | 2601 Valparaiso St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Valparaiso, IN | — | 108 | 2,962 | — | 108 | 2,962 | 1,519 | 2001 | 1999 | 2501 Valparaiso St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vancouver, WA | — | 2,503 | 28,393 | — | 2,503 | 28,393 | 1,777 | 2018 | 2011 | 2811 N.E. 139th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Venice, FL | — | 1,150 | 10,674 | 111 | 1,150 | 10,785 | 3,324 | 2008 | 2009 | 1600 Center Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Venice, FL | — | 2,246 | 10,094 | — | 2,246 | 10,094 | 710 | 2018 | 1997 | 1450 East Venice Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vero Beach, FL | — | 263 | 3,187 | — | 263 | 3,187 | 1,626 | 2001 | 1999 | 420 4th Ct. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vero Beach, FL | — | 297 | 3,263 | — | 297 | 3,263 | 1,673 | 2001 | 1996 | 410 4th Ct. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Virginia Beach, VA | — | 1,540 | 22,593 | — | 1,540 | 22,593 | 3,925 | 2014 | 1993 | 5520 Indian River Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Voorhees, NJ | — | 1,800 | 37,299 | 671 | 1,800 | 37,970 | 10,209 | 2011 | 1965 | 2601 Evesham Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Voorhees, NJ | — | 3,100 | 25,950 | 26 | 3,100 | 25,976 | 6,004 | 2011 | 2013 | 113 South Route 73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Voorhees, NJ | — | 2,193 | 6,990 | — | 2,193 | 6,990 | 511 | 2018 | 2006 | 1086 Dumont Circle | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| W Palm Beach, FL | — | 1,175 | 8,294 | — | 1,175 | 8,294 | 595 | 2018 | 1996 | 2330 Village Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| W Palm Beach, FL | — | 1,921 | 5,731 | — | 1,921 | 5,731 | 397 | 2018 | 1996 | 2300 Village Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wabash, IN | — | 670 | 14,588 | 1 | 670 | 14,589 | 2,713 | 2014 | 2013 | 20 John Kissinger Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waconia, MN | — | 890 | 14,726 | 4,495 | 890 | 19,221 | 4,592 | 2011 | 2005 | 500 Cherry Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wake Forest, NC | — | 200 | 3,003 | 2,084 | 200 | 5,087 | 2,531 | 1998 | 1999 | 611 S. Brooks St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wallingford, PA | — | 1,356 | 6,487 | — | 1,356 | 6,487 | 483 | 2018 | 1930 | 115 South Providence Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Walnut Creek, CA | — | 4,358 | 18,407 | — | 4,358 | 18,407 | 1,202 | 2018 | 1997 | 1975 Tice Valley Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Walnut Creek, CA | — | 5,394 | 39,084 | — | 5,394 | 39,084 | 2,426 | 2018 | 1990 | 1226 Rossmoor Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Walsall, UK | — | 1,184 | 8,562 | 1,047 | 1,312 | 9,481 | 1,481 | 2015 | 2015 | Little Aston Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wamego, KS | — | 40 | 2,510 | 57 | 40 | 2,567 | 372 | 2015 | 1996 | 1607 4th St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wareham, MA | — | 875 | 10,313 | 1,701 | 875 | 12,014 | 6,070 | 2002 | 1989 | 50 Indian Neck Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warren, NJ | — | 2,000 | 30,810 | 1,337 | 2,000 | 32,147 | 7,798 | 2011 | 1999 | 274 King George Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waterloo, IA | — | 605 | 3,030 | — | 605 | 3,030 | 218 | 2018 | 1964 | 201 West Ridgeway Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wayne, NJ | — | 1,427 | 15,674 | — | 1,427 | 15,674 | 1,301 | 2018 | 1998 | 800 Hamburg Turnpike | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wellingborough, UK | — | 1,480 | 5,724 | 774 | 1,639 | 6,339 | 1,102 | 2015 | 2015 | 159 Northampton | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Bend, WI | — | 620 | 17,790 | 38 | 620 | 17,828 | 4,256 | 2010 | 2011 | 2130 Continental Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Des Moines, IA | — | 828 | 5,103 | — | 828 | 5,103 | 372 | 2018 | 2006 | 5010 Grand Ridge Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Milford, NJ | — | 1,960 | 24,614 | — | 1,960 | 24,614 | 1,406 | 2019 | 2000 | 197 Cahill Cross Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Orange, NJ | — | 1,347 | 19,389 | — | 1,347 | 19,389 | 1,507 | 2018 | 1998 | 510 Prospect Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Reading, PA | — | 890 | 12,118 | — | 890 | 12,118 | 749 | 2018 | 1975 | 425 Buttonwood Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westerville, OH | — | 740 | 8,287 | 4,146 | 740 | 12,433 | 10,835 | 1998 | 2001 | 690 Cooper Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westerville, OH | — | — | — | 25,574 | 2,566 | 23,008 | 194 | 2017 | 2020 | 702 Polaris Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westerville, OH | — | 1,420 | 5,371 | — | 1,420 | 5,371 | 369 | 2018 | 1982 | 1060 Eastwind Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westerville, OH | — | 1,582 | 10,279 | — | 1,582 | 10,279 | 719 | 2018 | 1980 | 215 Huber Village Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westfield, IN | — | 890 | 15,964 | 1 | 890 | 15,965 | 2,943 | 2014 | 2013 | 937 E. 186th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Initial Cost to Company | Gross Amount at Which Carried at Close of Period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westlake, OH | — | 855 | 11,963 | — | 855 | 11,963 | 805 | 2018 | 1997 | 28400 Center Ridge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weston Super Mare, UK | — | 2,517 | 7,054 | 1,028 | 2,787 | 7,812 | 1,535 | 2013 | 2011 | 141b Milton Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wheaton, MD | — | 3,864 | 3,788 | — | 3,864 | 3,788 | 270 | 2018 | 1961 | 11901 Georgia Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Whippany, NJ | — | 1,571 | 14,977 | — | 1,571 | 14,977 | 1,014 | 2018 | 2000 | 18 Eden Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Whitehall, MI | — | — | — | 8,434 | 1,645 | 6,789 | 54 | 2020 | 2012 | 6827 Whitehall Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wichita, KS | — | 1,400 | 11,000 | — | 1,400 | 11,000 | 5,732 | 2006 | 1997 | 505 North Maize Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wichita, KS | — | 860 | 8,873 | — | 860 | 8,873 | 2,323 | 2011 | 2012 | 10604 E 13th Street North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wichita, KS | 12,300 | 630 | 19,747 | — | 630 | 19,747 | 4,352 | 2012 | 2009 | 2050 North Webb Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wichita, KS | — | 260 | 2,240 | 129 | 260 | 2,369 | 346 | 2015 | 1992 | 900 N Bayshore Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wichita, KS | — | 900 | 10,134 | — | 900 | 10,134 | 2,504 | 2011 | 2012 | 10600 E 13th Street North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilkes-Barre, PA | — | 570 | 2,301 | 686 | 570 | 2,987 | 1,035 | 2011 | 1992 | 300 Courtright Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilkes-Barre, PA | — | 753 | 3,456 | — | 753 | 3,456 | 272 | 2018 | 1970 | 1548 Sans Souci Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Williamsburg, VA | — | 1,187 | 5,728 | 6 | 1,187 | 5,734 | 1,069 | 2018 | 2000 | 1811 Jamestown Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Williamsport, PA | — | 919 | 6,924 | — | 919 | 6,924 | 468 | 2018 | 1976 | 300 Leader Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Williamsport, PA | — | 780 | 1,898 | — | 780 | 1,898 | 170 | 2018 | 1972 | 101 Leader Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Williamstown, KY | — | 70 | 6,430 | — | 70 | 6,430 | 2,797 | 2005 | 1987 | 201 Kimberly Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Willoughby, OH | — | 1,774 | 8,653 | — | 1,774 | 8,653 | 592 | 2018 | 1974 | 37603 Euclid Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilmington, DE | — | 800 | 9,494 | 114 | 800 | 9,608 | 2,769 | 2011 | 1970 | 810 S Broom Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilmington, DE | — | 1,376 | 13,450 | — | 1,376 | 13,450 | 892 | 2018 | 1998 | 700 1/2 Foulk Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilmington, DE | — | 2,843 | 36,948 | — | 2,843 | 36,948 | 2,356 | 2018 | 1988 | 5651 Limestone Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilmington, DE | — | 2,266 | 9,500 | — | 2,266 | 9,500 | 647 | 2018 | 1984 | 700 Foulk Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilmington, NC | — | 210 | 2,991 | — | 210 | 2,991 | 1,701 | 1999 | 1999 | 3501 Converse Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilmington, NC | — | 400 | 15,355 | — | 400 | 15,355 | 2,759 | 2014 | 2012 | 3828 Independence Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Windsor, VA | — | 1,148 | 6,514 | 7 | 1,148 | 6,521 | 1,213 | 2018 | 1999 | 23352 Courthouse Hwy | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winston-Salem, NC | — | 360 | 2,514 | 509 | 360 | 3,023 | 1,406 | 2003 | 1996 | 2980 Reynolda Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winter Garden, FL | — | 1,110 | 7,937 | — | 1,110 | 7,937 | 1,855 | 2012 | 2013 | 720 Roper Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winter Springs, FL | — | 1,152 | 14,822 | — | 1,152 | 14,822 | 972 | 2018 | 1999 | 1057 Willa Springs Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Witherwack, UK | — | 944 | 6,915 | 844 | 1,045 | 7,658 | 1,506 | 2013 | 2009 | Whitchurch Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wolverhampton, UK | — | 1,573 | 6,678 | 886 | 1,742 | 7,395 | 1,467 | 2013 | 2011 | 378 Prestonwood Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodbury, MN | — | 1,317 | 20,935 | 298 | 1,317 | 21,233 | 2,275 | 2017 | 2015 | 2195 Century Avenue South | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodstock, VA | — | 594 | 5,108 | 5 | 594 | 5,113 | 850 | 2018 | 2001 | 803 S Main St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Worcester, MA | — | 3,500 | 54,099 | — | 3,500 | 54,099 | 15,931 | 2007 | 2009 | 101 Barry Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Worcester, MA | — | 2,300 | 9,060 | 6,000 | 2,300 | 15,060 | 5,708 | 2008 | 1993 | 378 Plantation St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yardley, PA | — | 773 | 14,914 | — | 773 | 14,914 | 1,035 | 2018 | 1995 | 493 Stony Hill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yardley, PA | — | 1,561 | 9,439 | — | 1,561 | 9,439 | 779 | 2018 | 1990 | 1480 Oxford Valley Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yeadon, PA | — | 1,075 | 10,690 | — | 1,075 | 10,690 | 681 | 2018 | 1963 | 14 Lincoln Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| York, PA | — | 976 | 9,354 | — | 976 | 9,354 | 631 | 2018 | 1972 | 200 Pauline Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| York, PA | — | 1,050 | 4,210 | — | 1,050 | 4,210 | 336 | 2018 | 1983 | 2400 Kingston Court | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| York, PA | — | 1,121 | 7,584 | — | 1,121 | 7,584 | 546 | 2018 | 1979 | 1770 Barley Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| York, UK | — | 2,961 | 8,266 | 1,206 | 3,279 | 9,154 | 1,509 | 2014 | 2006 | Rosetta Way, Boroughbridge Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Youngsville, NC | — | 380 | 10,689 | — | 380 | 10,689 | 1,870 | 2014 | 2013 | 100 Sunset Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Zephyrhills, FL | — | 2,131 | 6,669 | — | 2,131 | 6,669 | 505 | 2018 | 1987 | 38220 Henry Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Zionsville, IN | — | 1,610 | 22,400 | 1,691 | 1,610 | 24,091 | 6,410 | 2010 | 2009 | 11755 N Michigan Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net Total | $ | 123,652 | $ | 905,073 | $ | 7,397,004 | $ | 596,731 | $ | 957,163 | $ | 7,941,645 | $ | 1,432,228 | ||||||||||||||||||||||||||||||||||||||||||||||||
117
| Welltower Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate and Accumulated Depreciation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Addison, IL | $ | 5,455 | $ | 102 | $ | 18,842 | $ | 137 | $ | 102 | $ | 18,979 | $ | 1,151 | 2018 | 2012 | 303 West Lake Street | |||||||||||||||||||||||||||||||||||||||||||||
| Agawam, MA | — | 1,072 | 5,164 | 4 | 1,072 | 5,168 | 296 | 2019 | 2005 | 230-232 Main Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allen, TX | — | 726 | 14,196 | 1,402 | 726 | 15,598 | 5,901 | 2012 | 2006 | 1105 N Central Expressway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alpharetta, GA | — | 1,862 | — | — | 1,862 | — | — | 2011 | 1900 | 940 North Point Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alpharetta, GA | — | 773 | 18,902 | 642 | 773 | 19,544 | 7,940 | 2011 | 1993 | 3400-A Old Milton Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alpharetta, GA | — | 1,769 | 36,152 | 460 | 1,769 | 36,612 | 16,249 | 2011 | 1999 | 3400-C Old Milton Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alpharetta, GA | — | 476 | 14,694 | 323 | 476 | 15,017 | 6,282 | 2011 | 2003 | 11975 Morris Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alpharetta, GA | — | 548 | 17,103 | 826 | 548 | 17,929 | 7,230 | 2011 | 2007 | 3300 Old Milton Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Appleton, WI | 6,897 | 1,881 | 8,866 | 7 | 1,881 | 8,873 | 399 | 2019 | 2004 | 5320 W Michael Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Appleton, WI | 12,112 | 3,782 | 20,440 | 15 | 3,782 | 20,455 | 888 | 2019 | 2005 | 2323 N Casaloma Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arcadia, CA | — | 5,408 | 23,219 | 5,506 | 5,618 | 28,515 | 12,940 | 2006 | 1984 | 301 W. Huntington Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arlington, TX | — | 82 | 18,243 | 572 | 82 | 18,815 | 5,040 | 2012 | 2012 | 902 W. Randol Mill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arlington Heights, IL | — | 1,233 | 2,826 | 623 | 1,233 | 3,449 | 243 | 2020 | 1997 | 1632 W. Central Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Atlanta, GA | — | 1,947 | 24,248 | 2,465 | 2,172 | 26,488 | 9,774 | 2012 | 1984 | 975 Johnson Ferry Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Atlanta, GA | — | — | 43,425 | 1,841 | — | 45,266 | 15,310 | 2012 | 2006 | 5670 Peachtree-Dunwoody Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Atlanta, GA | — | 4,931 | 18,720 | 7,261 | 5,387 | 25,525 | 13,575 | 2006 | 1991 | 755 Mt. Vernon Hwy. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin, TX | — | 1,066 | 10,112 | — | 1,066 | 10,112 | 1,354 | 2017 | 2017 | 5301-B Davis Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin, TX | — | 1,688 | 6,784 | — | 1,688 | 6,784 | 613 | 2019 | 2015 | 5301-A Davis Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Baltimore, MD | — | 4,490 | 31,222 | 22 | 4,490 | 31,244 | 1,169 | 2019 | 2014 | 1420 Key Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bellaire, TX | — | 5,572 | 72,478 | 6 | 5,572 | 72,484 | 3,576 | 2019 | 2007 | 5410 - 5420 WEST LOOP SOUTH | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bellevue, NE | — | — | 16,680 | 10 | — | 16,690 | 6,415 | 2010 | 2010 | 2510 Bellevue Medical Center Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bend, OR | — | 16,516 | 30,338 | 3 | 16,516 | 30,341 | 2,248 | 2019 | 2001 | 1501 Northeast Medical Center Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Berkeley Heights, NJ | — | 49,555 | 92,806 | — | 49,555 | 92,806 | 4,457 | 2019 | 1978 | 1 Diamond Hill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beverly Hills, CA | — | 20,766 | 40,730 | 3,508 | 20,766 | 44,238 | 9,079 | 2015 | 1946 | 9675 Brighton Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beverly Hills, CA | — | 18,863 | 1,192 | 481 | 18,885 | 1,651 | 860 | 2015 | 1955 | 415 North Bedford | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beverly Hills, CA | — | 19,863 | 31,690 | 1,996 | 19,863 | 33,686 | 6,519 | 2015 | 1946 | 416 North Bedford | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beverly Hills, CA | 33,729 | 32,603 | 28,639 | 1,182 | 32,603 | 29,821 | 7,056 | 2015 | 1950 | 435 North Bedford | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beverly Hills, CA | 78,272 | 52,772 | 87,366 | 2,111 | 52,764 | 89,485 | 16,264 | 2015 | 1989 | 436 North Bedford | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boca Raton, FL | — | 109 | 34,002 | 4,320 | 214 | 38,217 | 16,237 | 2006 | 1995 | 9970 S. Central Park Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boca Raton, FL | — | 31 | 12,312 | 497 | 251 | 12,589 | 4,486 | 2012 | 1993 | 9960 S. Central Park Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bridgeton, MO | — | 450 | 21,221 | 1,917 | 450 | 23,138 | 8,603 | 2010 | 2006 | 12266 DePaul Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bridgeton, MO | — | 1,701 | 6,228 | 254 | 1,501 | 6,682 | 1,370 | 2017 | 2008 | 3440 De Paul Ln. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burleson, TX | — | 10 | 12,611 | 933 | 10 | 13,544 | 5,196 | 2011 | 2007 | 12001 South Freeway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Burnsville, MN | — | — | 31,596 | 2,272 | — | 33,868 | 10,455 | 2013 | 2014 | 14101 Fairview Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cary, NC | — | 2,816 | 11,146 | 349 | 2,816 | 11,495 | 1,268 | 2019 | 2007 | 540 Waverly Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cedar Park, TX | — | 132 | 23,753 | 6,338 | 132 | 30,091 | 5,076 | 2017 | 2014 | 1401 Medical Parkway, Building 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chapel Hill, NC | — | 488 | 2,390 | 1 | 488 | 2,391 | 165 | 2019 | 2010 | 100 Perkins Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chapel Hill, NC | 5,050 | 1,970 | 8,874 | 84 | 1,970 | 8,958 | 819 | 2018 | 2007 | 6011 Farrington Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chapel Hill, NC | 5,050 | 1,970 | 8,925 | 5 | 1,970 | 8,930 | 924 | 2018 | 2007 | 6013 Farrington Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chapel Hill, NC | 14,356 | 5,681 | 25,035 | 15 | 5,681 | 25,050 | 2,386 | 2018 | 2006 | 2226 North Carolina Highway 54 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charlotte, NC | — | 10 | 24,796 | 86 | 10 | 24,882 | 2,652 | 2019 | 1971 | 1900 Randolph Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charlotte, NC | — | 30 | 61,799 | 3,036 | 30 | 64,835 | 6,134 | 2019 | 1994 | 1918 Randolph Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charlotte, NC | — | 40 | 40,606 | 1,259 | 40 | 41,865 | 3,884 | 2019 | 1989 | 1718 East Fourth Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charlotte, NC | — | 1,746 | 8,645 | 609 | 1,746 | 9,254 | 1,197 | 2019 | 1998 | 309 South Sharon Amity Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chicopee, MA | — | 6,078 | 15,842 | 102 | 6,078 | 15,944 | 973 | 2019 | 2005 | 444 Montgomery Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chula Vista, CA | — | 1,045 | 22,252 | 372 | 1,045 | 22,624 | 2,201 | 2019 | 1973 | 480 4th Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chula Vista, CA | — | 826 | 5,557 | 368 | 826 | 5,925 | 590 | 2019 | 1985 | 450 4th Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chula Vista, CA | — | 1,114 | 15,459 | 1 | 1,114 | 15,460 | 965 | 2019 | 2008 | 971 Lane Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chula Vista, CA | — | 1,075 | 7,165 | 1 | 1,075 | 7,166 | 452 | 2019 | 2006 | 959 Lane Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cincinnati, OH | — | 537 | 10,122 | 187 | 537 | 10,309 | 1,039 | 2019 | 2001 | 4850 Red Bank Expressway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cincinnati, OH | — | — | 17,880 | 287 | 2 | 18,165 | 4,948 | 2012 | 2013 | 3301 Mercy Health Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clarkson Valley, MO | — | — | 35,592 | — | — | 35,592 | 15,581 | 2009 | 2010 | 15945 Clayton Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clear Lake, TX | — | — | 13,882 | 20 | 2,319 | 11,583 | 1,835 | 2013 | 2014 | 1010 South Ponds Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Clyde, NC | — | 1,433 | 22,062 | 2 | 1,433 | 22,064 | 1,087 | 2019 | 2012 | 581 Leroy George Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbia, MO | — | 438 | 12,949 | 58 | 438 | 13,007 | 1,536 | 2019 | 1994 | 1601 E. Broadway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbia, MO | — | 488 | 16,033 | 524 | 488 | 16,557 | 1,702 | 2019 | 1999 | 1605 E. Broadway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbia, MO | — | 199 | 23,403 | 14 | 199 | 23,417 | 2,095 | 2019 | 2007 | 1705 E. Broadway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbia, MD | — | 23 | 33,885 | 3,227 | 9,353 | 27,782 | 10,012 | 2015 | 1982 | 5450 & 5500 Knoll N Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbia, MD | — | 2,333 | 19,232 | 1,884 | 2,333 | 21,116 | 6,749 | 2012 | 2002 | 10700 Charter Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbia, MD | — | 12,159 | 72,636 | 595 | 12,159 | 73,231 | 6,135 | 2018 | 2009 | 10710 Charter Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Coon Rapids, MN | — | — | 26,679 | 1,320 | — | 27,999 | 7,677 | 2013 | 2014 | 11850 Blackfoot Street NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Costa Mesa, CA | 20,411 | 22,033 | 24,332 | 1,087 | 22,033 | 25,419 | 5,963 | 2017 | 2007 | 1640 Newport Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dade City, FL | — | 1,211 | 5,511 | — | 1,211 | 5,511 | 1,873 | 2011 | 1998 | 13413 US Hwy 301 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dallas, TX | — | 122 | 15,418 | 10 | 122 | 15,428 | 2,914 | 2013 | 2014 | 8196 Walnut Hill Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dallas, TX | — | 6,086 | 18,007 | 3,581 | 6,542 | 21,132 | 2,397 | 2018 | 2010 | 10740 North Central Expressway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deerfield Beach, FL | — | 2,408 | 7,809 | 793 | 2,540 | 8,470 | 3,859 | 2011 | 2001 | 1192 East Newport Center Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Delray Beach, FL | — | 1,882 | 34,767 | 1,889 | 2,449 | 36,089 | 19,241 | 2006 | 1985 | 5130-5150 Linton Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dunkirk, MD | — | 259 | 2,458 | 33 | 259 | 2,491 | 321 | 2019 | 1997 | 10845 Town Center Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Durham, NC | — | 1,403 | 25,163 | 2 | 1,403 | 25,165 | 1,493 | 2019 | 2000 | 120 William Penn Plaza | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Durham, NC | — | 1,751 | 44,425 | 3 | 1,751 | 44,428 | 2,166 | 2019 | 2004 | 3916 Ben Fanklin Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| El Paso, TX | — | 677 | 17,075 | 1,633 | 677 | 18,708 | 9,338 | 2006 | 1997 | 2400 Trawood Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elgin, IL | — | 1,634 | 9,443 | 1,355 | 1,634 | 10,798 | 558 | 2020 | 2004 | 745 Fletcher Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elmhurst, IL | — | 41 | 39,562 | 259 | 41 | 39,821 | 3,245 | 2018 | 2011 | 133 E Brush Hill Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elyria, OH | — | 3,263 | 28,176 | 3 | 3,263 | 28,179 | 1,772 | 2019 | 2008 | 303 Chestnut Commons Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Escondido, CA | — | 2,278 | 20,967 | 2 | 2,278 | 20,969 | 1,449 | 2019 | 1994 | 225 East 2nd Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Everett, WA | — | 4,842 | 26,010 | 64 | 4,842 | 26,074 | 9,697 | 2010 | 2011 | 13020 Meridian Ave. S. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fenton, MO | — | 958 | 27,461 | 132 | 958 | 27,593 | 9,230 | 2013 | 2009 | 1011 Bowles Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fenton, MO | — | 369 | 13,911 | 198 | 369 | 14,109 | 3,931 | 2013 | 2009 | 1055 Bowles Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Florham Park, NJ | — | 8,578 | 61,779 | — | 8,578 | 61,779 | 5,858 | 2017 | 2017 | 150 Park Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flower Mound, TX | — | 4,620 | — | — | 4,620 | — | — | 2014 | 1900 | Medical Arts Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flower Mound, TX | — | 737 | 9,276 | 429 | 737 | 9,705 | 2,336 | 2015 | 2014 | 2560 Central Park Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Flower Mound, TX | — | 4,164 | 27,027 | 1,414 | 4,164 | 28,441 | 7,366 | 2014 | 2012 | 4370 Medical Arts Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Washington, PA | — | 2,015 | 16,104 | 2,040 | 2,015 | 18,144 | 731 | 2020 | 1980 | 467 Pennsylvania Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth, TX | — | 401 | 5,266 | 2,752 | 2,805 | 5,614 | 1,800 | 2014 | 2007 | 7200 Oakmont Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fort Worth, TX | — | 462 | 26,020 | 205 | 462 | 26,225 | 7,049 | 2012 | 2012 | 10840 Texas Health Trail | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Frederick, MD | — | 1,065 | 7,430 | — | 1,065 | 7,430 | 721 | 2019 | 1979 | 194 Thomas Johnson Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Frederick, MD | — | 1,930 | 18,748 | 195 | 1,930 | 18,943 | 1,822 | 2019 | 2006 | 45 Thomas Johnson Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fresno, CA | — | 1,497 | 12,669 | 8 | 1,497 | 12,677 | 601 | 2019 | 2004 | 1105 E Spruce Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Frisco, TX | — | — | 18,635 | 235 | — | 18,870 | 7,881 | 2007 | 2004 | 4401 Coit Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Frisco, TX | — | — | 15,309 | 2,588 | — | 17,897 | 7,619 | 2007 | 2004 | 4461 Coit Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gardendale, AL | 4,184 | 1,150 | 8,162 | 231 | 1,150 | 8,393 | 880 | 2018 | 2005 | 2217 Decatur Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Garland, TX | — | 4,952 | 32,718 | — | 4,952 | 32,718 | 2,392 | 2019 | 2018 | 7217 Telecome Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gastonia, NC | — | 569 | 1,092 | 615 | 569 | 1,707 | 70 | 2019 | 2000 | 934 Cox Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gig Harbor, WA | — | 80 | 30,810 | 1,332 | 80 | 32,142 | 6,057 | 2010 | 2009 | 11511 Canterwood Blvd. NW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Glendale, CA | — | 70 | 44,354 | 163 | 70 | 44,517 | 2,749 | 2019 | 2008 | 1500 E Chevy Chase Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gloucester, VA | — | 2,128 | 9,169 | 40 | 2,128 | 9,209 | 947 | 2018 | 2008 | 5659 Parkway Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grand Prairie, TX | — | 981 | 6,086 | — | 981 | 6,086 | 2,702 | 2012 | 2009 | 2740 N State Hwy 360 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grapevine, TX | — | — | 5,943 | 4,778 | 2,081 | 8,640 | 2,405 | 2014 | 2002 | 2040 W State Hwy 114 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grapevine, TX | — | 3,365 | 15,669 | 3,089 | 3,365 | 18,758 | 5,311 | 2014 | 2002 | 2020 W State Hwy 114 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenville, SC | — | 1,567 | 5,167 | 585 | 1,790 | 5,529 | 1,192 | 2019 | 1987 | 10 Enterprise Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Harrisburg, NC | — | 1,347 | 3,059 | — | 1,347 | 3,059 | 395 | 2019 | 2012 | 9550 Rocky River Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hattiesburg, MS | 17,633 | 3,155 | 34,710 | 23 | 3,155 | 34,733 | 1,472 | 2019 | 2012 | 3688 Veterans Memorial Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Haymarket, VA | — | 1,250 | 29,254 | 57 | 1,250 | 29,311 | 1,962 | 2019 | 2008 | 15195 Heathcote Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Henderson, NV | — | 2,587 | 5,654 | 1 | 2,587 | 5,655 | 381 | 2019 | 2002 | 2825 Siena Heights Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Henderson, NV | — | 7,372 | 24,027 | 42 | 7,372 | 24,069 | 1,953 | 2019 | 2005 | 2845 Siena Heights Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Henderson, NV | — | 5,492 | 18,718 | 214 | 5,492 | 18,932 | 1,303 | 2019 | 2005 | 2865 Siena Heights Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Highland, IL | — | — | 8,834 | 51 | — | 8,885 | 2,197 | 2012 | 2013 | 12860 Troxler Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hopewell Junction, NY | — | 2,164 | 5,333 | 9 | 2,164 | 5,342 | 230 | 2019 | 1999 | 10 Cranberry Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hopewell Junction, NY | — | 2,316 | 5,332 | 5 | 2,316 | 5,337 | 209 | 2019 | 2015 | 1955 NY-52 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | 9,943 | — | — | 9,943 | — | 9 | 2011 | 1900 | F.M. 1960 & Northgate Forest Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | 2,988 | 18,018 | 365 | 2,988 | 18,383 | 499 | 2016 | 2019 | 13105 Wortham Center Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | 5,837 | 33,109 | 1,370 | 5,837 | 34,479 | 14,193 | 2012 | 2005 | 15655 Cypress Woods Medical Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | 3,688 | 13,313 | 132 | 3,688 | 13,445 | 4,530 | 2012 | 2007 | 10701 Vintage Preserve Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | 1,099 | 1,604 | 81,406 | 12,815 | 71,294 | 19,648 | 2012 | 1998 | 2727 W Holcombe Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | 3,644 | 377 | 13,660 | 583 | 377 | 14,243 | 1,494 | 2018 | 2011 | 20207 Chasewood Park Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Houston, TX | — | — | — | 10,607 | 2,338 | 8,269 | — | 2020 | 2013 | 11476 Space Center Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Howell, MI | — | 2,000 | 13,928 | 805 | 2,000 | 14,733 | 2,146 | 2016 | 2017 | 1225 South Latson Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Humble, TX | — | — | 9,941 | — | 1,702 | 8,239 | 1,270 | 2013 | 2014 | 8233 N. Sam Houston Parkway E. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Huntersville, NC | — | — | 42,143 | 60 | — | 42,203 | 3,328 | 2019 | 2004 | 10030 Gilead Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Independence, MO | — | 762 | 3,480 | 333 | 762 | 3,813 | 158 | 2020 | 2007 | 19401 East 37th Terrace Court South | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jackson, MI | — | 668 | 17,294 | — | 668 | 17,294 | 5,519 | 2013 | 2009 | 1201 E Michigan Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jacksonville, FL | — | 3,562 | 27,249 | 56 | 3,562 | 27,305 | 2,171 | 2019 | 2006 | 10475 Centurion Parkway North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jacksonville, FL | — | 1,113 | 10,970 | 1,082 | 1,113 | 12,052 | 539 | 2020 | 2000 | 5742 Booth Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jefferson City, TN | — | 109 | 16,453 | 3 | 109 | 16,456 | 1,366 | 2019 | 2001 | 120 Hospital Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jonesboro, GA | — | 567 | 16,329 | 1 | 567 | 16,330 | 1,304 | 2019 | 2009 | 7813 Spivey Station Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jonesboro, GA | — | 627 | 16,554 | 70 | 627 | 16,624 | 1,224 | 2019 | 2007 | 7823 Spivey Station Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jupiter, FL | — | 2,252 | 11,415 | 4,992 | 2,639 | 16,020 | 6,960 | 2006 | 2001 | 550 Heritage Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jupiter, FL | — | 2,825 | 5,858 | 1,367 | 3,036 | 7,014 | 3,555 | 2007 | 2004 | 600 Heritage Dr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Katy, TX | — | — | 11,530 | — | — | 11,530 | 145 | 2019 | 2020 | 0 Grand Parkway & Morton Ranch Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Katy, TX | — | 2,025 | 7,557 | 1,255 | 2,025 | 8,812 | 325 | 2020 | 2016 | 21502 Merchants Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Katy, TX | — | 3,699 | 12,701 | 1,668 | 3,699 | 14,369 | 961 | 2020 | 2006 | 1331 West Grand Parkway North | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Knoxville, TN | — | 199 | 45,961 | 3 | 199 | 45,964 | 2,713 | 2019 | 2012 | 1926 Alcoa Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| La Jolla, CA | — | 12,855 | 32,658 | 1,932 | 12,869 | 34,576 | 8,509 | 2015 | 1989 | 4150 Regents Park Row | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| La Jolla, CA | — | 9,425 | 26,525 | 627 | 9,440 | 27,137 | 5,951 | 2015 | 1988 | 4120 & 4130 La Jolla Village Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lacey, WA | 6,402 | 1,751 | 10,345 | — | 1,751 | 10,345 | 1,061 | 2018 | 1971 | 2555 Marvin Road Northeast | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lake St Louis, MO | — | 240 | 14,249 | 337 | 240 | 14,586 | 5,879 | 2010 | 2008 | 400 Medical Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeway, TX | — | 2,801 | — | — | 2,801 | — | — | 2007 | 1900 | Lohmans Crossing Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas, NV | — | 433 | 4,928 | — | 433 | 4,928 | 2,222 | 2007 | 1997 | 1776 E. Warm Springs Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas, NV | — | 2,319 | 4,612 | 1,602 | 2,319 | 6,214 | 3,160 | 2006 | 1991 | 2870 S. Maryland Pkwy. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas, NV | — | 4,180 | 20,064 | 2,913 | 4,180 | 22,977 | 823 | 2020 | 2017 | 9880 West Flamingo Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas, NV | — | 5,864 | 22,502 | 3,070 | 5,864 | 25,572 | 858 | 2020 | 2017 | 4980 West Sahara Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Little Rock, AR | — | 3,021 | 16,058 | 5,944 | 3,021 | 22,002 | 1,091 | 2019 | 2014 | 6119 Midtown Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Los Alamitos, CA | — | 39 | 18,340 | 24 | 39 | 18,364 | 7,584 | 2007 | 2003 | 3771 Katella Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lowell, MA | — | 3,016 | 9,663 | — | 3,016 | 9,663 | 303 | 2011 | 2020 | 839 Merrimack Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loxahatchee, FL | — | 1,637 | 5,048 | 1,324 | 1,719 | 6,290 | 3,141 | 2006 | 1997 | 12977 Southern Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loxahatchee, FL | — | 1,340 | 6,509 | 1,526 | 1,440 | 7,935 | 3,801 | 2006 | 1993 | 12989 Southern Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loxahatchee, FL | — | 1,553 | 4,694 | 1,938 | 1,650 | 6,535 | 3,171 | 2006 | 1994 | 12983 Southern Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lubbock, TX | 42,233 | 2,286 | 72,893 | 46 | 2,286 | 72,939 | 2,457 | 2019 | 2006 | 4515 Marsha Sharp Freeway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lynbrook, NY | 26,580 | 10,028 | 37,319 | 1,069 | 10,028 | 38,388 | 3,297 | 2018 | 1962 | 444 Merrick Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Madison, WI | — | 3,670 | 28,329 | 55 | 3,670 | 28,384 | 1,679 | 2019 | 2012 | 1102 South Park Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Margate, FL | — | 219 | 9,293 | 3 | 219 | 9,296 | 992 | 2019 | 2004 | 2960 N. State Rd 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marietta, GA | — | 2,682 | 20,053 | 1,516 | 2,703 | 21,548 | 4,727 | 2016 | 2016 | 4800 Olde Towne Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mars, PA | — | 1,925 | 8,307 | 1,132 | 1,925 | 9,439 | 492 | 2020 | 2006 | 6998 Crider Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Matthews, NC | — | 10 | 32,741 | 571 | 10 | 33,312 | 2,528 | 2019 | 1994 | 1450 Matthews Township Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Menasha, WI | — | 1,374 | 13,861 | 2,967 | 1,345 | 16,857 | 3,578 | 2016 | 1994 | 1550 Midway Place | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Merced, CA | — | — | 13,772 | 1,164 | — | 14,936 | 6,008 | 2009 | 2010 | 315 Mercy Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Meridian, ID | — | 3,206 | 27,107 | 18 | 3,206 | 27,125 | 1,588 | 2019 | 2009 | 3277 E Louise Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mesa, AZ | — | 3,158 | 5,588 | 1,122 | 3,158 | 6,710 | 218 | 2020 | 2016 | 1910 S. Gilbert Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mesa, AZ | — | 3,889 | 5,816 | 1,257 | 3,889 | 7,073 | 247 | 2020 | 2016 | 1833 N. Power Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mission Hills, CA | 22,797 | — | 42,276 | 6,914 | 4,791 | 44,399 | 12,014 | 2014 | 1986 | 11550 Indian Hills Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Missouri City, TX | — | 1,360 | 7,143 | — | 1,360 | 7,143 | 774 | 2015 | 2016 | 7010 Highway 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mobile, AL | 15,447 | 2,759 | 25,180 | 13 | 2,759 | 25,193 | 1,980 | 2018 | 2003 | 6144 Airport Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Monroeville, PA | — | 1,544 | 10,012 | 1,075 | 1,544 | 11,087 | 721 | 2020 | 1979 | 2550 Mosside Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Moorestown, NJ | — | 6 | 50,896 | 918 | 362 | 51,458 | 16,887 | 2011 | 2012 | 401 Young Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mount Juliet, TN | — | 1,566 | 11,697 | 1,878 | 1,601 | 13,540 | 6,467 | 2007 | 2005 | 5002 Crossings Circle | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mount Kisco, NY | — | 12,632 | 51,220 | 38 | 12,632 | 51,258 | 1,877 | 2019 | 1996 | 90 - 110 South Bedford Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mount Vernon, IL | — | — | 24,892 | 144 | — | 25,036 | 8,362 | 2011 | 2012 | 2 Good Samaritan Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Murrieta, CA | — | 3,800 | — | — | 3,800 | — | — | 2014 | 1900 | 28078 Baxter Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Murrieta, CA | — | — | 47,190 | 301 | — | 47,491 | 22,793 | 2010 | 2011 | 28078 Baxter Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Myrtle Beach, SC | — | 1,357 | 3,658 | 72 | 1,357 | 3,730 | 850 | 2019 | 1996 | 8170 Rourk Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nampa, ID | 15,675 | 3,439 | 21,566 | 15 | 3,439 | 21,581 | 832 | 2019 | 2017 | 1510 12th Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newburgh, NY | — | 9,213 | 32,354 | 25 | 9,213 | 32,379 | 1,041 | 2019 | 2015 | 1200 NY-300 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newburyport, MA | — | 3,104 | 19,370 | 74 | 3,104 | 19,444 | 1,502 | 2019 | 2008 | One Wallace Bashaw Jr. Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Niagara Falls, NY | — | 1,433 | 10,891 | 545 | 1,721 | 11,148 | 6,612 | 2007 | 1995 | 6932 - 6934 Williams Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Niagara Falls, NY | — | 454 | 8,362 | 310 | 454 | 8,672 | 3,934 | 2007 | 2004 | 6930 Williams Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Norfolk, VA | — | 1,138 | 26,989 | — | 1,138 | 26,989 | 2,342 | 2019 | 2014 | 155 Kingsley Lane | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Canton, OH | 12,967 | 2,518 | 24,452 | 17 | 2,518 | 24,469 | 869 | 2019 | 2014 | 7442 Frank Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Easton, MA | — | 2,336 | 19,876 | 13 | 2,336 | 19,889 | 966 | 2019 | 2007 | 15 Roche Brothers Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Easton, MA | — | 2,882 | 15,999 | 12 | 2,882 | 16,011 | 752 | 2019 | 2008 | 31 Roche Brothers Way | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Norwood, OH | — | 1,017 | 6,638 | 29 | 1,017 | 6,667 | 513 | 2019 | 2006 | 4685 Forest Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Novi, MI | — | 895 | 36,944 | 16 | 895 | 36,960 | 2,681 | 2019 | 2008 | 26750 Providence Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oklahoma City, OK | — | 216 | 18,762 | 187 | 216 | 18,949 | 5,982 | 2013 | 2008 | 535 NW 9th Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oxford, NC | — | 478 | 4,971 | — | 478 | 4,971 | 339 | 2019 | 2011 | 107 East McClanahan Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pasadena, TX | — | 1,700 | 8,009 | 158 | 1,700 | 8,167 | 1,532 | 2012 | 2013 | 5001 E Sam Houston Parkway S | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pearland, TX | — | 1,500 | 11,253 | 6 | 1,500 | 11,259 | 2,021 | 2012 | 2013 | 2515 Business Center Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pearland, TX | — | 9,594 | 32,753 | 191 | 9,807 | 32,731 | 7,497 | 2014 | 2013 | 11511 Shadow Creek Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Phoenix, AZ | — | 199 | 3,853 | 131 | 199 | 3,984 | 349 | 2019 | 1980 | 9225 N 3rd Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Phoenix, AZ | — | 109 | 2,207 | 65 | 109 | 2,272 | 219 | 2019 | 1986 | 9327 North 3rd Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Phoenix, AZ | — | 229 | 5,867 | 21 | 229 | 5,888 | 653 | 2019 | 1994 | 9100 N 2nd Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Phoenix, AZ | — | 1,149 | 48,018 | 12,830 | 1,149 | 60,848 | 29,815 | 2006 | 1998 | 2222 E. Highland Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plano, TX | — | 793 | 83,209 | 5,220 | 793 | 88,429 | 26,476 | 2012 | 2005 | 6020 West Parker Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plantation, FL | — | 8,563 | 10,666 | 6,012 | 8,575 | 16,666 | 9,013 | 2006 | 1997 | 851-865 SW 78th Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Port Orchard, WA | 9,767 | 2,810 | 22,716 | 102 | 2,810 | 22,818 | 1,958 | 2018 | 1995 | 450 South Kitsap Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Porter, TX | — | 3,746 | 15,119 | — | 3,746 | 15,119 | 346 | 2018 | 2019 | 25553 US Highway 59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Poughkeepsie, NY | — | 2,144 | 36,880 | 252 | 2,144 | 37,132 | 1,178 | 2019 | 2008 | 2507 South Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Poughkeepsie, NY | — | 4,035 | 30,459 | 21 | 4,035 | 30,480 | 872 | 2019 | 2010 | 30 Columbia Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Poughkeepsie, NY | — | 6,513 | 27,863 | 21 | 6,513 | 27,884 | 901 | 2019 | 2006 | 600 Westage Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Poughkeepsie, NY | 18,770 | 5,128 | 20,769 | 15 | 5,128 | 20,784 | 686 | 2019 | 2012 | 1910 South Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prince Frederick, MD | — | 229 | 26,889 | 34 | 229 | 26,923 | 1,798 | 2019 | 2009 | 130 Hospital Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prince Frederick, MD | — | 179 | 12,801 | 259 | 179 | 13,060 | 1,031 | 2019 | 1991 | 110 Hospital Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rancho Mirage, CA | — | 7,292 | 15,141 | 14 | 7,292 | 15,155 | 828 | 2019 | 2005 | 72780 Country Club Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redmond, WA | — | 5,015 | 26,697 | 1,080 | 5,015 | 27,777 | 10,609 | 2010 | 2011 | 18100 NE Union Hill Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Richmond, TX | — | 2,000 | 9,118 | 4 | 2,000 | 9,122 | 1,084 | 2015 | 2016 | 22121 FM 1093 Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Richmond, VA | — | 2,969 | 26,697 | 1,482 | 3,090 | 28,058 | 10,687 | 2012 | 2008 | 7001 Forest Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rockwall, TX | — | 132 | 17,197 | 448 | 132 | 17,645 | 5,281 | 2012 | 2008 | 3142 Horizon Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rolla, MO | — | 1,931 | 47,639 | 1 | 1,931 | 47,640 | 16,641 | 2011 | 2009 | 1605 Martin Spring Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rome, GA | — | 99 | 29,597 | 725 | 99 | 30,322 | 3,235 | 2019 | 2005 | 330 Turner McCall Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roseville, MN | — | 2,963 | 20,169 | 59 | 2,963 | 20,228 | 1,064 | 2019 | 1994 | 1835 W County Road C | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roxboro, NC | — | 368 | 2,477 | — | 368 | 2,477 | 171 | 2019 | 2000 | 799 Doctors Court | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio, TX | — | 3,050 | 12,073 | 55 | 3,050 | 12,128 | 1,153 | 2016 | 2017 | 5206 Research Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio, TX | — | 2,915 | 11,141 | 1,746 | 2,915 | 12,887 | 1,157 | 2019 | 2006 | 150 E Sonterra Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Santa Clarita, CA | — | — | 2,338 | 20,605 | 5,304 | 17,639 | 4,488 | 2014 | 1976 | 23861 McBean Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Santa Clarita, CA | — | — | 28,384 | 2,703 | 5,277 | 25,810 | 6,014 | 2014 | 1998 | 23929 McBean Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Santa Clarita, CA | — | 278 | 185 | 11,594 | 11,872 | 185 | 206 | 2014 | 1996 | 23871 McBean Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Santa Clarita, CA | 25,000 | 295 | 39,284 | — | 295 | 39,284 | 7,523 | 2014 | 2013 | 23803 McBean Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Santa Clarita, CA | — | — | 20,618 | 1,276 | 4,407 | 17,487 | 4,184 | 2014 | 1989 | 24355 Lyons Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Seattle, WA | — | 4,410 | 38,428 | 449 | 4,410 | 38,877 | 19,658 | 2010 | 2010 | 5350 Tallman Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sewell, NJ | — | 1,242 | 11,616 | 6 | 1,242 | 11,622 | 1,282 | 2018 | 2007 | 556 Egg Harbor Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shakopee, MN | 5,115 | 509 | 11,350 | 15 | 509 | 11,365 | 4,895 | 2010 | 1996 | 1515 St Francis Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shakopee, MN | 8,617 | 707 | 18,089 | 195 | 773 | 18,218 | 6,179 | 2010 | 2007 | 1601 St Francis Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shenandoah, TX | — | — | 21,135 | 62 | 4,574 | 16,623 | 2,504 | 2013 | 2014 | 106 Vision Park Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sherman Oaks, CA | — | — | 32,186 | 3,591 | 3,121 | 32,656 | 8,361 | 2014 | 1969 | 4955 Van Nuys Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silverdale, WA | 12,846 | 3,451 | 21,176 | 12 | 3,451 | 21,188 | 1,838 | 2018 | 2004 | 2200 NW Myhre Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southlake, TX | — | 3,000 | — | — | 3,000 | — | — | 2014 | 1900 | Central Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southlake, TX | — | 2,875 | 15,471 | — | 2,875 | 15,471 | 1,185 | 2019 | 2017 | 925 E. Southlake Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southlake, TX | — | 592 | 18,036 | — | 592 | 18,036 | 6,515 | 2012 | 2004 | 1545 East Southlake Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southlake, TX | — | 698 | 30,549 | 48 | 698 | 30,597 | 9,556 | 2012 | 2004 | 1545 East Southlake Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Springfield, MA | — | 2,721 | 6,615 | 6 | 2,721 | 6,621 | 428 | 2019 | 2012 | 305 Bicentennial Highway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| St Paul, MN | — | 49 | 37,695 | 396 | 49 | 38,091 | 7,590 | 2014 | 2006 | 225 Smith Avenue N. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| St. Paul, MN | — | 2,706 | 39,507 | 392 | 2,701 | 39,904 | 15,060 | 2011 | 2007 | 435 Phalen Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockton, CA | 11,436 | 4,966 | 16,844 | 13 | 4,966 | 16,857 | 797 | 2019 | 2009 | 2388 - 2488 N California Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Suffern, NY | — | 696 | 37,211 | 46 | 696 | 37,257 | 15,306 | 2011 | 2007 | 257 Lafayette Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Suffolk, VA | — | 1,566 | 11,511 | 293 | 1,620 | 11,750 | 5,486 | 2010 | 2007 | 5838 Harbour View Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sugar Land, TX | — | 3,543 | 15,532 | — | 3,543 | 15,532 | 7,054 | 2012 | 2005 | 11555 University Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sycamore, IL | — | 1,113 | 12,910 | 2,473 | 1,113 | 15,383 | 535 | 2020 | 2002 | 1630 Gateway Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tacoma, WA | — | — | 64,307 | — | — | 64,307 | 23,421 | 2011 | 2013 | 1608 South J Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tampa, FL | — | 4,319 | 12,234 | — | 4,319 | 12,234 | 3,558 | 2011 | 2003 | 14547 Bruce B Downs Blvd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tarzana, CA | — | 6,115 | 15,510 | 1,868 | 6,115 | 17,378 | 1,085 | 2020 | 1986 | 5620 Wilbur Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Timonium, MD | — | 8,829 | 12,568 | 247 | 8,850 | 12,794 | 1,869 | 2015 | 2017 | 2118 Greenspring Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tustin, CA | — | 3,345 | 541 | 223 | 3,345 | 764 | 384 | 2015 | 1976 | 14591 Newport Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tustin, CA | — | 3,361 | 12,039 | 3,530 | 3,361 | 15,569 | 3,981 | 2015 | 1985 | 14642 Newport Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tyler, TX | 60,479 | 2,903 | 114,853 | 72 | 2,903 | 114,925 | 3,795 | 2019 | 2013 | 1814 Roseland Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Van Nuys, CA | — | — | 36,187 | — | — | 36,187 | 12,029 | 2009 | 1991 | 6815 Noble Ave. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Voorhees, NJ | — | 6,404 | 24,251 | 1,832 | 6,477 | 26,010 | 11,369 | 2006 | 1997 | 900 Centennial Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Voorhees, NJ | — | 6 | 96,075 | 907 | 99 | 96,889 | 33,093 | 2010 | 2012 | 200 Bowman Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waco, TX | — | 125 | 164 | — | 125 | 164 | 8 | 2018 | 1962 | 6612 Fish Pond Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waco, TX | — | 35 | 113 | — | 35 | 113 | 6 | 2018 | 1961 | 6620 Fish Pond Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waco, TX | 14,046 | 2,250 | 28,632 | 346 | 2,250 | 28,978 | 2,479 | 2018 | 1981 | 601 Highway 6 West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waco, TX | — | 441 | 2,537 | 852 | 441 | 3,389 | 471 | 2018 | 2000 | 6600 Fish Pond Rd | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Washington, PA | 18,899 | 3,981 | 31,706 | 17 | 3,981 | 31,723 | 2,778 | 2018 | 2010 | 100 Trich Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wausau, WI | — | 2,050 | 12,175 | — | 2,050 | 12,175 | 1,658 | 2015 | 2017 | 1901 Westwood Center Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Waxahachie, TX | — | 303 | 18,069 | 6 | 303 | 18,075 | 3,403 | 2016 | 2014 | 2460 N I-35 East | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Building & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Building & Improvements | Accumulated Depreciation(1) | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wellington, FL | — | 107 | 16,933 | 2,490 | 326 | 19,204 | 8,355 | 2006 | 2000 | 10115 Forest Hill Blvd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wellington, FL | — | 580 | 11,047 | 11 | 580 | 11,058 | 5,315 | 2007 | 2003 | 1395 State Rd. 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westlake Village, CA | 8,000 | 2,553 | 15,851 | 157 | 2,553 | 16,008 | 1,904 | 2018 | 1975 | 1250 La Venta Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Westlake Village, CA | 6,360 | 2,487 | 9,776 | 114 | 2,487 | 9,890 | 1,149 | 2018 | 1989 | 1220 La Venta Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winston-Salem, NC | — | 2,006 | 7,497 | 260 | 2,006 | 7,757 | 1,184 | 2019 | 1998 | 2025 Frontis Plaza | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodbridge, VA | — | 346 | 16,534 | 21 | 346 | 16,555 | 1,236 | 2018 | 2012 | 12825 Minnieville Road | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wyandotte, MI | — | 581 | 8,023 | 773 | 581 | 8,796 | 312 | 2020 | 2002 | 1700 Biddle Ave | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yuma, AZ | — | 1,592 | 10,185 | 4 | 1,592 | 10,189 | 1,116 | 2019 | 2004 | 2270 South Ridgeview Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Zephyrhills, FL | — | 3,875 | 27,270 | — | 3,875 | 27,270 | 8,708 | 2011 | 1974 | 38135 Market Square Dr | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical Total | $ | 548,229 | $ | 765,282 | $ | 5,363,198 | $ | 334,253 | $ | 841,094 | $ | 5,621,639 | $ | 1,117,372 | ||||||||||||||||||||||||||||||||||||||||||||||||
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| Welltower Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate and Accumulated Depreciation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land & Land Improvements | Buildings & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Buildings & Improvements | Accumulated Depreciation | Year Acquired | Year Built | Address | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets Held For Sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Albuquerque, NM | $ | — | $ | 1,270 | $ | 20,837 | $ | — | $ | — | $ | 13,230 | $ | — | 2010 | 1984 | 500 Paisano St NE | |||||||||||||||||||||||||||||||||||||||||||||
| Brookline, MA | — | — | 17,435 | — | — | 17,435 | — | 2019 | 1900 | 110 Fisher Avenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Castle Rock, CO | — | 80 | 9,667 | — | — | 9,667 | — | 2014 | 2013 | 2352 Meadows Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Castle Rock, CO | — | — | — | 10,480 | — | 10,480 | — | 2016 | 2017 | Meadows Boulevard | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Glendale, CA | — | — | — | 11,228 | — | 11,228 | — | 2007 | 2002 | 222 W. Eulalia St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Irving, TX | — | 1,030 | 2,450 | — | — | 2,450 | — | 2007 | 1999 | 8855 West Valley Ranch Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakewood, WA | — | — | — | 11,639 | — | 11,639 | — | 2012 | 2005 | 11307 Bridgeport Way SW | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Las Vegas, NV | — | — | — | 2,945 | — | 2,945 | — | 2007 | 1900 | SW corner of Deer Springs Way and Riley Street | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lincoln, NE | — | — | — | 19,641 | — | 19,641 | — | 2010 | 2003 | 575 South 70th St | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Powell, TN | — | — | 25,692 | — | — | 25,692 | — | 2019 | 2005 | 7557 A Dannaher Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Powell, TN | — | — | 34,994 | — | — | 34,994 | — | 2019 | 2008 | 7557 B Dannaher Drive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reno, NV | — | — | — | 14,413 | — | 14,413 | — | 2006 | 1991 | 343 Elm St. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rexburg, ID | — | 1,267 | 3,213 | — | — | 67 | — | 2018 | 1988 | 660 South 2nd West | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| St. Louis, MO | — | 336 | 17,247 | — | — | 11,772 | — | 2007 | 2001 | 2325 Dougherty Ferry Rd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Toledo, OH | — | 2,040 | 47,129 | — | — | 30,960 | — | 2010 | 1985 | 3501 Executive Parkway | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets Held For Sale Total | $ | — | $ | 6,023 | $ | 178,664 | $ | 70,346 | $ | — | $ | 216,613 | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||
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| Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||||||||
| Encumbrances | Land & Land Improvements | Buildings & Improvements | Cost Capitalized Subsequent to Acquisition | Land & Land Improvements | Buildings & Improvements | Accumulated Depreciation | ||||||||||||||||||||||||||||||||||||||
| Summary: | ||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating | $ | 1,706,192 | $ | 1,466,472 | $ | 13,489,025 | $ | 2,648,613 | $ | 1,642,393 | $ | 15,961,717 | $ | 3,554,697 | ||||||||||||||||||||||||||||||
| Triple-net | 123,652 | 905,073 | 7,397,004 | 596,731 | 957,163 | 7,941,645 | 1,432,228 | |||||||||||||||||||||||||||||||||||||
| Outpatient Medical | 548,229 | 765,282 | 5,363,198 | 334,253 | 841,094 | 5,621,639 | 1,117,372 | |||||||||||||||||||||||||||||||||||||
| Construction in progress | — | — | 487,742 | — | — | 487,742 | — | |||||||||||||||||||||||||||||||||||||
| Total continuing operating properties | 2,378,073 | 3,136,827 | 26,736,969 | 3,579,597 | 3,440,650 | 30,012,743 | 6,104,297 | |||||||||||||||||||||||||||||||||||||
| Assets held for sale | — | 6,023 | 178,664 | 70,346 | — | 216,613 | — | |||||||||||||||||||||||||||||||||||||
| Total investments in real property owned | $ | 2,378,073 | $ | 3,142,850 | $ | 26,915,633 | $ | 3,649,943 | $ | 3,440,650 | $ | 30,229,356 | $ | 6,104,297 | ||||||||||||||||||||||||||||||
(1) Please see Note 2 to our consolidated financial statements for information regarding lives used for depreciation and amortization.
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Investment in real estate: | ||||||||||||||||||||
| Beginning balance | $ | 36,027,915 | $ | 33,590,388 | $ | 30,581,948 | ||||||||||||||
| Acquisitions and development | 1,174,148 | 4,807,418 | 4,598,670 | |||||||||||||||||
| Improvements | 242,147 | 328,824 | 266,183 | |||||||||||||||||
| Impairment of assets | (135,608) | (28,074) | (71,336) | |||||||||||||||||
Dispositions(1) | (3,782,120) | (2,673,203) | (1,330,679) | |||||||||||||||||
| Foreign currency translation | 143,524 | 187,853 | (454,398) | |||||||||||||||||
Other(2) | — | (185,291) | — | |||||||||||||||||
Ending balance(3) | $ | 33,670,006 | $ | 36,027,915 | $ | 33,590,388 | ||||||||||||||
| Accumulated depreciation: | ||||||||||||||||||||
| Beginning balance | $ | 5,715,459 | $ | 5,499,958 | $ | 4,838,370 | ||||||||||||||
| Depreciation and amortization expenses | 1,038,437 | 1,027,073 | 950,459 | |||||||||||||||||
| Amortization of above market leases | 5,217 | 5,752 | 6,375 | |||||||||||||||||
Disposition and other (1) | (684,395) | (772,273) | (205,562) | |||||||||||||||||
| Foreign currency translation | 29,579 | (45,051) | (89,684) | |||||||||||||||||
| Ending balance | $ | 6,104,297 | $ | 5,715,459 | $ | 5,499,958 | ||||||||||||||
(1) Includes property dispositions and dispositions of leasehold improvements which are generally fully depreciated.
(2) Primarily relates to the adoption of ASC 842.
(3) The unaudited aggregate cost for tax purposes for real property equals $30,050,020,000 at December 31, 2020.
120
| Welltower Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule IV - Mortgage Loans on Real Estate | ||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Location | Segment | Interest Rate | Final Maturity Date | Monthly Payment Terms | Prior Liens | Face Amount of Mortgages | Carrying Amount of Mortgages | Principal Amount of Loans Subject to Delinquent Principal or Interest | ||||||||||||||||||||||||||||||||||||||||||
| First mortgages relating to 1 property located in: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| United Kingdom | Triple-net | 7.25% | 3/15/2022 | $ | 143 | $ | — | $ | 28,652 | $ | 23,104 | $ | — | |||||||||||||||||||||||||||||||||||||
| United Kingdom | Triple-net | 8.53% | 7/7/2021 | 144 | — | 20,493 | 20,107 | — | ||||||||||||||||||||||||||||||||||||||||||
| Pennsylvania | Triple-net | 8.72% | 3/1/2022 | 108 | — | 15,530 | 14,795 | — | ||||||||||||||||||||||||||||||||||||||||||
| North Carolina | Triple-net | 7.83% | 12/18/2023 | 92 | — | 32,783 | 31,993 | — | ||||||||||||||||||||||||||||||||||||||||||
| Texas | Outpatient Medical | 7.86% | 1/19/2025 | 24 | — | 3,740 | 1,701 | — | ||||||||||||||||||||||||||||||||||||||||||
| United Kingdom | Triple-net | 8.50% | 2/1/2024 | 95 | — | 20,464 | 19,549 | — | ||||||||||||||||||||||||||||||||||||||||||
| — | 121,662 | 111,249 | — | |||||||||||||||||||||||||||||||||||||||||||||||
| First mortgages relating to multiple properties located in: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| United Kingdom | Outpatient Medical | 7.10% | 8/20/2021 | 972 | — | 181,022 | 173,361 | — | ||||||||||||||||||||||||||||||||||||||||||
| — | 181,022 | 173,361 | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Second mortgages relating to 1 property located in: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Florida | Triple-net | 10.27% | 10/21/2025 | 54 | — | 6,250 | 6,098 | — | ||||||||||||||||||||||||||||||||||||||||||
| Florida | Seniors Housing Operating | 10.14% | 8/15/2025 | 23 | — | 12,500 | 3,044 | — | ||||||||||||||||||||||||||||||||||||||||||
| — | 18,750 | 9,142 | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Totals | $ | — | $ | 321,434 | $ | 293,752 | $ | — | ||||||||||||||||||||||||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Reconciliation of mortgage loans: | (in thousands) | |||||||||||||||||||
| Balance at beginning of year | $ | 145,686 | $ | 249,071 | $ | 306,120 | ||||||||||||||
| Additions: | ||||||||||||||||||||
| New mortgage loans | 193,505 | — | 25,290 | |||||||||||||||||
| Draws on existing loans | 20,844 | 45,961 | 36,458 | |||||||||||||||||
| Total additions | 214,349 | 45,961 | 61,748 | |||||||||||||||||
| Deductions: | ||||||||||||||||||||
| Collections of principal | (17,019) | (87,249) | (116,905) | |||||||||||||||||
| Loan balance transferred to non-real estate loans receivable | (53,071) | (64,040) | — | |||||||||||||||||
| Change in allowance for credit losses and charge-offs | (5,645) | — | — | |||||||||||||||||
| Other | (329) | — | — | |||||||||||||||||
| Total deductions | (76,064) | (151,289) | (116,905) | |||||||||||||||||
| Change in balance due to foreign currency translation | 9,781 | 1,944 | (1,892) | |||||||||||||||||
| Balance at end of year | $ | 293,752 | $ | 145,686 | $ | 249,071 | ||||||||||||||
121