Welltower Inc. (WELL, NYSE)
Industry: REIT - Healthcare Facilities
Annual report, fiscal year 2018


## welltower \( ^{®} $ 
2018 Annual
Report



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## LETTER FROM
THE CEO

## Dear Shareholders,

2018 was a year of strategic transformation and growth at Welltower. Our continued alignment with best-in-class partners, proprietary data-driven investment approach, and persistent optimization of our portfolio advanced our competitive position in the marketplace and led to strong financial results and a significant increase in accretive new investment volume financed by our effective and efficient access to capital. Multiple large-scale achievements validated our innovative strategy and confirmed our demonstrable leadership in health care real estate and infrastructure.

## Well Positioned in a Dynamic
Health Care Landscape

The health care industry is in a period of transformative change driven by a profound demographic shift. In the upcoming decade, all baby boomers will be older than 65, and one in five Americans will be of retirement age. Developments in technology, changes in government reimbursement, and evolving consumer expectations are propelling a movement to value-based, data-driven, outcome-oriented care. The concurrence of these movements is generating a paradigm shift in care delivery along the entire care continuum. As the global leader in health care real estate, Welltower is uniquely positioned to support this broad transition, and is committed to driving the health care industry to new, cost-effective settings.

## Prepared for Growth and Innovation

2018 marked a definitive turning point in our strategic focus from portfolio repositioning to growth and innovation.



The most notable indicator of this shift was the $4.4 billion acquisition of HCR ManorCare and the related real estate with ProMedica Health System, which was completed in July.

This immediately
accretive
investment
validated
Welltower’s
unique thesis of
partnering with
the nation’s largest
non-profit health
systems to drive
new models of and
settings for health
care delivery. The
synergies created
through this first of
its kind partnership
This immediately
accretive investment
validated Welltower’s
unique thesis of
partnering with
the nation’s largest
non-profit health systems
to drive new models of
and settings for health
care delivery.

will bring immense value to the patients, residents, care providers, and shareholders we serve for years to come.

In November, we announced the development of a modern, 140,000-sq. ft., 17-story memory care and assisted living center on the Upper West Side of Manhattan. This will be the second senior living community that we will develop in Manhattan and illustrates our strategy to expand our presence in high barrier to entry markets.

We have consistently recognized the critical shortage of seniors housing options in urban settings and articulated the widespread effects of this deficit on the elderly population, their families and the health care system. Our active presence in core markets such as Manhattan, London, Los Angeles, San Francisco, and Toronto demonstrates our ability to not only identify areas of need, but to act on this thesis to bring high quality, dignified care to a vastly underserved population.

In addition to major developments in seniors housing, 2018 saw a significant expansion of our outpatient medical portfolio. In December, we announced the acquisition of a 75% ownership interest in two state-of-the-art “Class A+” medical office buildings under development in Charlotte, North Carolina. This transaction aligned Welltower with two highly reputable entities: prominent Southeast developer Pappas Properties and world-class health system, Atrium Health,

and will serve as a foundation for future growth opportunities.

We began 2019 with the announcement of a $1.25 billion acquisition of 55 medical office buildings from CNL Healthcare Properties which marked an important development for our outpatient medical and health system portfolio. The optimal location and high occupancy of the assets, combined with their affiliations with premier health systems including Novant Health, Memorial Hermann and Cleveland Clinic, provide a great opportunity for us.

We completed several key restructurings and dispositions in 2018, including a broad restructuring of our Brookdale assets. By decreasing the overall concentration of Brookdale operated assets from 7.6%* to 2.7%* of In-Place NOI while substantially improving lease coverage on the remaining Brookdale portfolio, we



positioned ourselves for an optimal long-term relationship with multiple potential opportunities for expansion in the future. We also completed $1.8 billion in total dispositions in the year, proving that the acceleration in our growth opportunities has not compromised our highly disciplined and selective approach to our portfolio management.

## Continuing our Trend of Strong Financial Performance

Welltower’s strategy was validated by our solid financial results in 2018. Average total portfolio Same Store NOI growth increased by 1.6% \( ^{*} \) , driven by positive year-over-year growth in all segments. We generated 795 million of gross proceeds from common stock issuances at an average price of 67.51 per share, including a 300 million investment from the Qatar Investment Authority (“QIA”).

Our relationship with QIA is yet another example of our ability to attract new sources of long-term institutional capital.

Our net debt to Adjusted EBITDA was 5.84x \( ^{*} \)  and our net debt to undepreciated book capitalization ratio was 37.8% \( ^{*} \) . Our exceptional balance sheet strength allows us critical flexibility in deploying capital to the advantage of our shareholders.

## Building a Reputation of Thought Leadership

In October, we released the first edition of The Welltower Report, a thought-leadership initiative focused on trends and insights within the dynamic health care real estate industry. Titled “Health Systems & Post-Acute Care: An Evolving Perspective”, the report examined the care-delivery strategies deployed by health systems in response to the challenges of an aging population and changing payment models that demand better health outcomes at lower costs.

In November, we released The AL Quality Standards Report, which identified five key domains for assisted living care quality. The purpose of this report was to provide a foundation for the development of standardized quality measurement and care improvement at the national level. The publication outlined the work of the AL Quality Network, a new stakeholder group comprised of best-in-class assisted living operators, academics, industry representatives, and family members of parents receiving assisted living care.

These two works highlighted the value of integrated health systems and post-acute care settings and identified the real estate implications of this growing care model. The industry trends that we outlined strongly support our use of data analytics

The industry trends that we outlined strongly support our use of data analytics to quantify meaningful quality-of-life enhancements and cost-savings achieved through the delivery of care in senior living settings.
to quantify meaningful quality-of-life enhancements and cost-savings achieved through the delivery of care in senior



## Demonstrating Excellence
in Environmental, Social and
Governance

I am extremely proud of our tremendous progress in ESG initiatives. We were named to the Dow Jones Sustainability World Index for the first time in 2018 and to the Dow Jones Sustainability North America Index for the third consecutive year. We became the first North American REIT to sign the Women's Empowerment Principles and the CEO Action for Diversity & Inclusion.

It was my honor to announce three appointments to the Board of Directors:

Dr. Karen DeSalvo, M.D., MPH, physician and professor of medicine and population health at The University of Texas at Austin Dell Medical School and former Acting Assistant Secretary for Health at the U.S. Department of Health and Human Services during the Obama Administration

• Johnese Spisso, MPA, President of UCLA Health, Chief Executive Officer of UCLA Hospital System and Associate Vice Chancellor of UCLA Health Sciences

• Kathryn Sullivan, former Chief Executive Officer of UnitedHealthcare, Employer & Individual, Local Markets

These national health care executives possess extensive experience in the medical, health system and health payer environments and will add immense value to the Board and to the organization as we continue to develop valuable collaborations and integrations along the health care continuum. In January 2019, Welltower was named one of the World’s Most Admired Companies by Fortune Magazine, the only health care real estate company to be named to the list this year.

Welltower remains committed to driving the transformation of health care infrastructure, and I am fortunate to work alongside colleagues who are deeply invested in our vision for the future of the industry. The work that we do each day at Welltower is bringing wellness to our communities and creating value for you, our shareholders. We are thankful for your confidence in us and for your continued support.

Sincerely,



Thomas J. DeRosa
CEO, Welltower Inc.



## Non-GAAP
Reconciliations



# NON-GAAP RECONCILIATIONS

The company believes that revenues and net income, as defined by U.S. generally accepted accounting principles (U.S. GAAP), are the most appropriate earnings measurements. However, the company considers EBITDA, Adjusted EBITDA, NOI, In-Place NOI (IPNOI) and SSNOI to be useful supplemental measures of its operating performance. Excluding EBITDA and Adjusted EBITDA, these supplemental measures are disclosed on a Welltower pro rata ownership basis. Pro rata amounts are derived by reducing consolidated amounts for minority partners' noncontrolling ownership interests and adding Welltower's minority ownership share of unconsolidated amounts. Welltower does not control unconsolidated investments. While the company considers pro rata disclosures useful, they may not accurately depict the legal and economic implications of Welltower's joint venture arrangements and should be used with caution.

The company defines 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 seniors housing operating and outpatient medical 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. IPNOI represents NOI excluding interest income, other income and non-IPNOI and adjusted for timing of current quarter portfolio changes such as acquisitions, development conversions, segment transitions, dispositions and investments held for sale. 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. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-over-year reporting periods. Land parcels, loans, and sub-leases as well as any properties acquired, developed/redeveloped (including major refurbishments where 20% or more of units are simultaneously taken out of commission for 30 days or more), sold or classified as held for sale during that period are excluded from the same store amounts. Properties undergoing operator transitions and/or segment transitions (except triple-net to seniors housing operating with the same operator) are also excluded from the same store amounts. Normalizers include adjustments that in management's opinion are appropriate in considering SSNOI, a supplemental, non-GAAP performance measure. None of these adjustments, which may increase or decrease SSNOI, are reflected in the company's financial statements prepared in accordance with U.S. GAAP. Significant normalizers (defined as any that individually exceed 0.50% of SSNOI growth per property type) are separately disclosed and explained. The company believes NOI, IPNOI and SSNOI provide investors relevant and useful information because they measure the operating performance of the company's properties at the property level on an unleveraged basis. The company uses NOI, IPNOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties.

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. 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 EBITDA which stands for earnings (net income per income statement) before interest expense, income taxes, depreciation and amortization. Covenants in our senior unsecured notes and primary credit facility contain financial ratios based on a definition of EBITDA that is specific to those agreements. Failure to satisfy these covenants could result in an event of default that could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. Due to the materiality of these debt agreements and the financial covenants, we have defined Adjusted EBITDA to exclude unconsolidated entities and to include adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/losses/impairments on properties, gains/losses on derivatives and financial instruments, other expenses, and additional other income. We believe that EBITDA and Adjusted EBITDA, along with net income and cash flow provided from operating activities, are important supplemental measures because they provide additional information to assess and evaluate the performance of our operations. We primarily utilize them to measure 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. Our leverage ratios include net debt to Adjusted EBITDA, 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. Our leverage ratios are defined as the proportion of net debt to total capitalization.

The company’s 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. The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, these measures are utilized by the Board of Directors to evaluate management. None of the supplemental reporting 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 reporting measures, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Multi-period amounts may not equal the sum of the individual quarterly amounts due to rounding.



<table><tr><td>In-Place NOI Reconciliations</td><td>Three Months Ended December 31, 2018</td><td>Three Months Ended March 31, 2018</td></tr><tr><td>Net income (loss)</td><td>$ 124,696</td><td>$ 453,555</td></tr><tr><td>Loss (gain) on real estate dispositions, net</td><td>(41,913)</td><td>(338,184)</td></tr><tr><td>Loss (income) from unconsolidated entities</td><td>(195)</td><td>2,429</td></tr><tr><td>Income tax expense (benefit)</td><td>1,504</td><td>1,588</td></tr><tr><td>Other expenses</td><td>10,502</td><td>3,712</td></tr><tr><td>Impairment of assets</td><td>76,022</td><td>28,185</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>53</td><td>11,707</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>1,626</td><td>(7,173)</td></tr><tr><td>General and administrative expenses</td><td>31,101</td><td>33,705</td></tr><tr><td>Depreciation and amortization</td><td>242,834</td><td>228,201</td></tr><tr><td>Interest expense</td><td>144,369</td><td>122,775</td></tr><tr><td>Consolidated net operating income</td><td>590,599</td><td>540,500</td></tr><tr><td>NOI attributable to unconsolidated investments (1)</td><td>21,933</td><td>21,620</td></tr><tr><td>NOI attributable to noncontrolling interests (2)</td><td>(40,341)</td><td>(31,283)</td></tr><tr><td>Pro rata net operating income (NOI)</td><td>$ 572,191</td><td>$ 530,837</td></tr><tr><td>Adjust:</td><td></td><td></td></tr><tr><td>Interest income</td><td>$ (13,082)</td><td>$ (14,647)</td></tr><tr><td>Other income</td><td>(7,092)</td><td>(3,008)</td></tr><tr><td>Sold / held for sale</td><td>(12,724)</td><td>(13,001)</td></tr><tr><td>Developments / land</td><td>545</td><td>212</td></tr><tr><td>Non In-Place NOI (3)</td><td>(21,892)</td><td>(15,229)</td></tr><tr><td>Timing adjustments (4)</td><td>5,099</td><td>6,235</td></tr><tr><td>Total adjustments</td><td>(49,146)</td><td>(39,438)</td></tr><tr><td>In-Place NOI</td><td>523,045</td><td>491,399</td></tr><tr><td>Annualized In-Place NOI</td><td>$ 2,092,180</td><td>$ 1,965,596</td></tr></table>

<table><tr><td rowspan="2"></td><td colspan="2">Three Months Ended</td><td colspan="2">Three Months Ended</td></tr><tr><td>December 31, 2018</td><td>% of Total</td><td>March 31, 2018</td><td>% of Total</td></tr><tr><td>Sunrise Senior Living North America</td><td>$ 252,687</td><td>12.1%</td><td>$ 243,824</td><td>12.4%</td></tr><tr><td>Sunrise Senior Living United Kingdom</td><td>71,638</td><td>3.4%</td><td>76,239</td><td>3.9%</td></tr><tr><td>ProMedica</td><td>143,200</td><td>6.8%</td><td>-</td><td>0.0%</td></tr><tr><td>Revera</td><td>113,750</td><td>5.4%</td><td>118,321</td><td>6.0%</td></tr><tr><td>Brookdale Senior Living</td><td>56,874</td><td>2.7%</td><td>150,254</td><td>7.6%</td></tr><tr><td>Brookdale Senior Living - Transitions</td><td>34,640</td><td>1.7%</td><td>-</td><td>0.0%</td></tr><tr><td>Remaining</td><td>1,419,391</td><td>67.8%</td><td>1,376,958</td><td>70.1%</td></tr><tr><td>Annualized In-Place NOI</td><td>$ 2,092,180</td><td>100.0%</td><td>$ 1,965,596</td><td>100.0%</td></tr></table>

Notes:

(1) Represents Welltower's interest in joint ventures where Welltower is the minority partner.

(2) Represents minority partners' interest in joint ventures where Welltower is the majority owner.

(3) Primarily represents non-cash NOI.

(4) Represents timing adjustments for current quarter acquisitions, construction conversions and segment transitions.



<table><tr><td rowspan="3"></td><td colspan="8">Three Months Ended</td></tr><tr><td colspan="4">March 31,</td><td colspan="2">June 30,</td><td colspan="2">September 30,</td></tr><tr><td>2018</td><td>2017</td><td>2018</td><td>2017</td><td>2018</td><td>2017</td><td>2018</td><td></td></tr><tr><td>Net income (loss)</td><td>$ 453,555</td><td>$ 337,610</td><td>$ 167,273</td><td>$ 203,441</td><td>$ 84,226</td><td>$ 89,299</td><td>$ 124,696</td><td>$ (89,743)</td></tr><tr><td>Loss (gain) on real estate dispositions, net</td><td>(338,184)</td><td>(244,092)</td><td>(10,755)</td><td>(42,155)</td><td>(24,723)</td><td>(1,622)</td><td>(41,913)</td><td>(56,381)</td></tr><tr><td>Loss (income) from unconsolidated entities</td><td>2,429</td><td>23,106</td><td>(1,249)</td><td>3,978</td><td>(344)</td><td>(3,408)</td><td>(195)</td><td>59,449</td></tr><tr><td>Income tax expense (benefit)</td><td>1,588</td><td>2,245</td><td>3,841</td><td>(8,448)</td><td>1,741</td><td>669</td><td>1,504</td><td>25,663</td></tr><tr><td>Other expenses</td><td>3,712</td><td>11,675</td><td>10,058</td><td>6,339</td><td>88,626</td><td>99,595</td><td>10,502</td><td>60,167</td></tr><tr><td>Impairment of assets</td><td>28,185</td><td>11,031</td><td>4,632</td><td>13,631</td><td>6,740</td><td>-</td><td>76,022</td><td>99,821</td></tr><tr><td>Provision for loan losses</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>62,966</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>11,707</td><td>31,356</td><td>299</td><td>5,515</td><td>4,038</td><td>-</td><td>53</td><td>371</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>(7,173)</td><td>1,224</td><td>(7,460)</td><td>736</td><td>8,991</td><td>324</td><td>1,626</td><td>-</td></tr><tr><td>General and administrative expenses</td><td>33,705</td><td>31,101</td><td>32,831</td><td>32,632</td><td>28,746</td><td>29,913</td><td>31,101</td><td>28,365</td></tr><tr><td>Depreciation and amortization</td><td>228,201</td><td>228,276</td><td>236,275</td><td>224,847</td><td>243,149</td><td>230,138</td><td>242,834</td><td>238,458</td></tr><tr><td>Interest expense</td><td>122,775</td><td>118,597</td><td>121,416</td><td>116,231</td><td>138,032</td><td>122,578</td><td>144,369</td><td>127,217</td></tr><tr><td>Consolidated NOI</td><td>540,500</td><td>552,129</td><td>557,161</td><td>556,747</td><td>579,222</td><td>567,486</td><td>590,599</td><td>556,353</td></tr><tr><td>NOI attributable to unconsolidated investments</td><td>21,620</td><td>21,279</td><td>21,725</td><td>21,873</td><td>22,247</td><td>22,431</td><td>21,933</td><td>21,539</td></tr><tr><td>NOI attributable to noncontrolling interests</td><td>(31,283)</td><td>(27,542)</td><td>(30,962)</td><td>(29,359)</td><td>(37,212)</td><td>(30,538)</td><td>(40,341)</td><td>(29,760)</td></tr><tr><td>Pro rata NOI</td><td>530,837</td><td>545,866</td><td>547,924</td><td>549,261</td><td>564,257</td><td>559,379</td><td>572,191</td><td>548,132</td></tr><tr><td>Non-cash NOI attributable to same store properties</td><td>(11,220)</td><td>(9,985)</td><td>(7,131)</td><td>(8,059)</td><td>(8,578)</td><td>(10,761)</td><td>(12,019)</td><td>(9,384)</td></tr><tr><td>NOI attributable to non-same store properties</td><td>(55,795)</td><td>(84,139)</td><td>(98,281)</td><td>(107,931)</td><td>(109,610)</td><td>(119,574)</td><td>(121,255)</td><td>(114,345)</td></tr><tr><td>Currency and ownership adjustments(1)</td><td>(823)</td><td>4,002</td><td>1,105</td><td>5,945</td><td>3,255</td><td>1,839</td><td>4,270</td><td>1,184</td></tr><tr><td>Other adjustments(2)</td><td>425</td><td>(536)</td><td>(724)</td><td>(2,516)</td><td>(593)</td><td>10,892</td><td>(158)</td><td>10,293</td></tr><tr><td>Same store NOI (SSNOI)</td><td>$ 463,424</td><td>$ 455,208</td><td>$ 442,893</td><td>$ 436,700</td><td>$ 448,731</td><td>$ 441,775</td><td>$ 443,029</td><td>$ 435,880</td></tr><tr><td>Total quarterly SSNOI growth</td><td></td><td>1.896</td><td></td><td>1.4%</td><td></td><td>1.6%</td><td></td><td>1.6%</td></tr><tr><td>Total annual SSNOI growth</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>1.6%</td></tr></table>

(1) Includes adjustments to reflect consistent property ownership percentages and foreign currency exchange rates for properties in the U.K. and Canada.  
(2) Includes other adjustments described in the relevant respective Supplements

<table><tr><td colspan="2">Net Debt to Adjusted EBITDA Reconciliations</td><td>Three Months Ended December 31, 2018</td></tr><tr><td>Net income (loss)</td><td>$ 124,696</td><td></td></tr><tr><td>Interest expense</td><td>144,369</td><td></td></tr><tr><td>Income tax expense (benefit)</td><td>1,504</td><td></td></tr><tr><td>Depreciation and amortization</td><td>242,834</td><td></td></tr><tr><td>EBITDA</td><td>513,403</td><td></td></tr><tr><td>Loss (income) from unconsolidated entities</td><td>(195)</td><td></td></tr><tr><td>Stock-based compensation (1)</td><td>4,847</td><td></td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>53</td><td></td></tr><tr><td>Loss (gain) on real estate dispositions, net</td><td>(41,913)</td><td></td></tr><tr><td>Impairment of assets</td><td>76,022</td><td></td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>1,626</td><td></td></tr><tr><td>Other expenses (1)</td><td>10,502</td><td></td></tr><tr><td>Additional other income (4)</td><td>(4,027)</td><td></td></tr><tr><td>Adjusted EBITDA</td><td>$ 560,318</td><td></td></tr><tr><td>Net Debt to Adjusted EBITDA Ratio:</td><td></td><td></td></tr><tr><td>Total debt</td><td>$ 13,297,144</td><td></td></tr><tr><td>Less: cash and cash equivalents (3)</td><td>(215,376)</td><td></td></tr><tr><td>Net debt</td><td>13,081,768</td><td></td></tr><tr><td>Adjusted EBITDA annualized</td><td>$ 2,241,272</td><td></td></tr><tr><td>Net debt to Adjusted EBITDA ratio</td><td>5.84x</td><td></td></tr><tr><td>Notes:</td><td></td><td></td></tr><tr><td>(1) Certain severance-related costs are included in stock-based compensation and excluded from other expenses.</td><td></td><td></td></tr><tr><td>(2) Relates to the reversal of a contingent liability related to a prior year acquisition.</td><td></td><td></td></tr><tr><td>(3) Includes IRC section 1031 deposits, if any.</td><td></td><td></td></tr></table>

<table><tr><td colspan="2">Net Debt to Undepreciated Book Capitalization Reconciliation</td></tr><tr><td>Line of credit</td><td>December 31, 2018</td></tr><tr><td>Long-term debt obligations(1)</td><td>$ 1,147,000</td></tr><tr><td>Cash and cash equivalents(2)</td><td>12,150,144</td></tr><tr><td>Net debt</td><td>(215,376)</td></tr><tr><td>Accumulated depreciation and amortization</td><td>13,081,768</td></tr><tr><td>Total equity(3)</td><td>5,499,958</td></tr><tr><td>Undepreciated book capitalization</td><td>16,010,645</td></tr><tr><td>Net debt to undepreciated book capitalization ratio</td><td>34,592,371</td></tr><tr><td>Notes:</td><td></td></tr><tr><td>(1) Includes unamortized premiums/discounts and other fair value adjustments as reflected on our balance sheet.</td><td></td></tr><tr><td>(2) Inclusive of IRC section 1031 deposits.</td><td></td></tr><tr><td>(3) Includes all noncontrolling interests (redeemable and permanent).</td><td></td></tr></table>



## Form 10-K



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# 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, 2018
Commission File No. 1-8923

# welltower
WELLTOWER INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)
4500 Dorr Street, Toledo, Ohio
(Address of principal executive offices)

34-1096634

(I.R.S. Employer

Identification No.)

43615

(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

Name of Each Exchange on Which Registered

Common Stock, $1.00 par value

New York Stock Exchange

6.50% Series I Cumulative

New York Stock Exchange

Convertible Perpetual Preferred Stock, $1.00 par value

4.800% Notes due 2028

New York Stock Exchange

4.500% Notes due 2034

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 and post such files). Yes ☑ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ( \( §229.405 \)  of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☑

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 ☐ (Do not check if a smaller reporting 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 ☑

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 $23,282,837,560.

As of February 13, 2019, the registrant had 386,361,193 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 2, 2019, are incorporated by reference into Part III.



## WELLTOWER INC. AND SUBSIDIARIES
2018 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS

Page

PART I

Item 1. Business ..... 2
Item 1A. Risk Factors ..... 31
Item 1B. Unresolved Staff Comments ..... 42
Item 2. Properties ..... 43
Item 3. Legal Proceedings ..... 44
Item 4. Mine Safety Disclosures ..... 44

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ..... 45
Item 6. Selected Financial Data ..... 47
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ..... 48
Item 7A. Quantitative and Qualitative Disclosures About Market Risk ..... 76
Item 8. Financial Statements and Supplementary Data ..... 78
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ..... 123
Item 9A. Controls and Procedures ..... 123
Item 9B. Other Information ..... 126

PART III

Item 10. Directors, Executive Officers and Corporate Governance ..... 126
Item 11. Executive Compensation ..... 126
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ..... 126
Item 13. Certain Relationships and Related Transactions and Director Independence ..... 126
Item 14. Principal Accounting Fees and Services ..... 126

PART IV

Item 15. Exhibits and Financial Statement Schedules ..... 127
Item 16. Form 10-K Summary ..... 132
Signature ..... 133



## 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 \( ^{TM} \) , 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. 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, 2018.

## 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 17 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 offer services including 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).

Independent Living and Independent Supportive Living (Canada) Independent living and independent supportive living 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 Certain properties offering assisted living may include state-licensed settings that specialize in caring for those afflicted with Alzheimer’s disease and/or other types of dementia.

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 69%, 65% and 59% of total revenues for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, we had relationships with 21 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, 2018, our relationship with Sunrise Senior Living accounted for approximately 36% of our Seniors Housing Operating segment revenues and 25% of our total revenues.

## 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 hours 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 19%, 22% and 28% of total revenues for the years ended December 31, 2018, 2017 and 2016, respectively. For the year ended December 31, 2018, our revenues related to



our relationship with Genesis HealthCare (“Genesis”) accounted for approximately 15% of our Triple-net segment revenues and 3% of our total revenues. As of December 31, 2018, our relationship with Genesis was comprised of a master lease for 87 properties owned 100% by us, two real estate loans totaling approximately $187 million, 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 a master lease for 28 properties operated by Genesis. In addition to rent, the master lease requires 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.

## 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 95% of our outpatient medical building portfolio is affiliated with health systems (buildings directly on 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 12%, 13% and 13% of total revenues for each of the years ended December 31, 2018, 2017 and 2016, 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, 2018, approximately 94% 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 increases and some form of operating expense reimbursement by the tenant. As of December 31, 2018, 75% of our portfolio included leases with full pass through, 23% with a partial expense reimbursement (modified gross) and 2% 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, 2018 and are often credit enhanced by security deposits, guaranties and/or letters of credit.

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. We also typically charge a transaction fee at the commencement of construction which we defer and amortize to income over the term of the resulting lease. 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 guaranties. At December 31, 2018, we had outstanding construction investments of $194,365,000 and were committed to provide additional funds of approximately $436,984,000 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.

Real Estate Loans Our real estate loans are typically structured to provide us with interest income, principal amortization and transaction fees and are generally secured by first/second mortgage liens, leasehold mortgages, corporate guaranties and/or personal guaranties. At December 31, 2018, we had gross outstanding real estate loans of $398,711,000. The interest yield averaged approximately 7.9% per annum on our outstanding real estate loan balances. Our yield on real estate 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 real estate loans outstanding at December 31, 2018 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. Typically, real estate loans are cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.

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 50% 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. 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. 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.

## 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.

## 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, physicians, staff, and price. 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.

## Corporate Responsibility

Sustainability Approach Our sustainability strategy is focused on adopting the best environmental, social and governance practices across our business and we have been recognized for our leadership in this space. Most recently, Welltower was listed to the 2018 Dow Jones Sustainability World Index and named an industry mover for highest corporate sustainability assessment score increase by sustainable investment specialists RobecoSAM.

Environmental We strive to reduce our environmental impact by increasing energy and water efficiency, reducing greenhouse gas emissions and investing in projects that reduce energy and water consumption that meet our rate of return thresholds. We have comprehensive employee, tenant and vendor engagement programs in place focused on operational strategies to drive energy and water efficiency. In our medical office building portfolio, we have transitioned to a standard green lease, which aligns tenant and landlord interests on energy and water efficiency. We seek to increase our consumption of green and renewable energy where possible and have on-site solar installations at seven properties in our medical office building portfolio. We are actively pursuing LEED or BREEAM certification for over 200,000 square feet of our new developments, have 38 ENERGY STAR certified properties and 11 IREM Certified Sustainable Property certifications across our portfolio. Additionally, 100% of our control boundary, comprised of our managed outpatient medical portfolio, is benchmarked in EPA ENERGY STAR Portfolio Manager.

<table><tr><td>Year \( ^{(1)} \)</td><td>Total energy consumption in control boundary \( ^{(2)} \)</td><td>Control boundary energy use intensity (EUI)</td><td>Like-for-like change in energy consumption within control boundary \( ^{(3)} \)</td><td>Percent renewable energy consumed within control boundary \( ^{(4)} \)</td></tr><tr><td>2017</td><td>375,059 MWh</td><td>24.35 kWh/sq ft</td><td>(1)%</td><td>7.25%</td></tr><tr><td>2016</td><td>360,165 MWh</td><td>22.82 kWh/sq ft</td><td>n/a</td><td>n/a</td></tr><tr><td>2015</td><td>350,342 MWh</td><td>21.49 kWh/sq ft</td><td>n/a</td><td>n/a</td></tr><tr><td>Year \( ^{(1)} \)</td><td colspan="2">Control Boundary Water consumption \( ^{(2)} \)</td><td>Water use intensity (WUI)</td><td>Like-for-like change in water consumption within control boundary \( ^{(3)} \)</td></tr><tr><td>2017</td><td>319,045 kgal</td><td>24.0 gal/sq ft</td><td>(6.23)%</td><td></td></tr><tr><td>2016</td><td>337,081 kgal</td><td>26.4 gal/sq ft</td><td>7.01%</td><td></td></tr><tr><td>2015</td><td>319,630 kgal</td><td>25.0 gal/sq ft</td><td>n/a</td><td></td></tr></table>

(1) Full 2018 calendar year energy and water data is not available until March 2019. 2017 is the most recent year for which fill energy and water is available and externally verified.

(2) Our control boundary refers to its managed medical office building portfolio. Energy and water data reported is reflective of control boundary energy and water consumption.

(3) Like-for-like change in energy consumption within control boundary is not available prior to 2017 due to a change in energy consumption methodology. 2017 represents the first year where tenant data is included in our sustainability performance metrics. Like-for-like change in water consumption within control boundary is not available prior to 2016 due to lack of available data.

(4) Renewable energy consumption data within control boundary is not available prior to 2017 due to lack of data. The data represent on-site and off-site renewable energy generated and consumed by properties within our control boundary.

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 wellbeing of our employees, tenants and



residents. We were recently awarded Silver level of recognition by the American Heart Association’s Workplace Health Achievement Index. Through our Welltower Foundation, we have donated over $2.5 million since 2015 to organizations that support health and wellness, the arts and education.

Governance We announced two new appointments to our Board of Directors, resulting in 55% of our independent director positions being held by minorities and women as of December 31, 2018.

Employees As of January 31, 2019, we had 384 employees.

Credit Concentrations Please see Note 8 to our consolidated financial statements.

Geographic Concentrations Please see “Item 2 — Properties” below and Note 17 to our consolidated financial statements.

## Health Care Industry

The demand for health care services, and consequently health care properties, is projected to reach unprecedented levels in the near future. The Centers for Medicare and Medicaid Services (“CMS”) projects that national health expenditures will rise to approximately $3.7 trillion in 2018 or 18.5% of gross domestic product. The average annual growth in national health expenditures for 2015 through 2025 is expected to be 5.8%. While demographics are the primary driver of demand, economic conditions and availability of services contribute to health care service utilization rates. We believe the health care property market may be less susceptible to fluctuations and economic downturns relative to other property sectors. Investor interest in the market remains strong, especially in specific sectors such as private-pay seniors housing and outpatient medical buildings. The total U.S. population for 2015 through 2025 is projected to increase by 9.3%. The elderly population aged 65 and over is projected to increase by 36% through 2025. The elderly are an important component of health care utilization, especially independent living services, assisted living services, long-term/post-acute care services, inpatient and outpatient hospital services and physician ambulatory care. Most health care services are provided within a health care facility such as a hospital, a physician’s office or a seniors housing community. Therefore, we believe there will be continued demand for companies, such as ours, with expertise in health care real estate.

Health care real estate investment opportunities tend to increase as demand for health care services increases. We recognize the need for health care real estate as it correlates to health care service demand. Health care providers require real estate to house their businesses and expand their services. We believe that investment opportunities in health care real estate will continue to be present due to:

- The specialized nature of the industry, which enhances the credibility and experience of the company;

- The projected population growth combined with stable or increasing health care utilization rates, which ensures demand; and

• The on-going merger and acquisition activity.

## 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 or Medicaid. 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.

## 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.

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 may seek to implement new or modified reimbursement methodologies, including value-based reimbursement methodologies that may negatively impact health care property operations. 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. 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. 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 is expected 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 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. Since taking office, President Trump and the current U.S. Congress have sought to modify, repeal, or otherwise invalidate all or portions of the Health Reform Laws. For example, in October 2017, President Trump issued an executive order in which he stated that it is his Administration’s policy to seek the prompt repeal of the Health Reform Laws and directed executive departments and federal agencies to waive, defer, grant exemptions from, or delay the implementation of the provisions of the Health Reform Laws to the maximum extent permitted by law. On the same day, the federal government separately announced that cost-sharing reduction payments to insurers offering qualified health plans through the HIEs would end, effective immediately, unless Congress appropriated the funds. Further, 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 and could impact the future state of the HIEs established by the Health Reform Laws. There is still uncertainty with respect to the additional impact President Trump’s Administration and the U.S.



Congress may have, if any, 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 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 healthcare 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.

## 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 individually identifiable health information. Violations of these laws may result in substantial civil and/or criminal fines and penalties. The costs for an operator of a health care property associated with developing and maintaining HIPAA compliance systems, defending enforcement actions and paying any assessed fines, can be substantial and could have a material adverse effect on the ability of an operator to meet its obligations to us.

## 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 European Union's ("EU") General Data Protection Regulation ("GDPR") among other laws. The Data Protection Act and the GDPR impose a significant number of new obligations with the potential for fines of up to 4% of annual worldwide turnover or €20 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 recently introduced a new 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. The U.K. recently voted to exit from the EU ("Brexit"). Negotiations on the exit agreement are underway but at present it is not possible to predict whether Brexit will have a material impact on our operators' or tenants' property or business.

## Canada

Retirement homes and long-term care homes are subject to regulation, and long-term care homes receive funding, under provincial law. There is no federal regulation in this area. Set out below are summaries of the principal regulatory requirements in the provinces where we have a material number of facilities.

## Licensing and Regulation

## Alberta

In Alberta, there are three relevant designations for seniors’ living arrangements, ordered below from the most independent to the highest level of care.

- Retirement Homes (also called independent living) are designed for older adults able to live on their own, and may offer various lifestyle amenities. These residences may be rented, privately owned, or life-leased, and may be operated for profit or non-profit. Support services are not usually offered, but can be arranged by residents. Retirement homes do not generally receive government funding; residents pay for tenancy and services received. Rental subsidies may be available to qualified seniors. Independent living residences are subject to provincial tenancy and housing laws.

- Supportive Living (also called assisted living) provides home-like accommodation for residents who wish or need to access care, assistance, and services. Operators provide at least one meal a day and/or housekeeping services. There are four levels of supportive living, addressing care needs from basic to advanced. In addition, there are two specialized designations of supportive care to address the needs of residents who require the highest level of care including for those who have cognitive impairments. Supportive living can include senior lodges, group homes, and mental health and designated supportive living accommodations, which can be operated by private for-profit or not-for-profit, or public operators. Supportive living services are licensed and regulated under provincial laws, and governed by the Ministry of Health. Operators receiving public funds for health and personal care services must also comply with additional provincial legislation, and are subject to legislated safeguards aimed at investigation of suspected abuse. The maximum accommodation fee in publicly-funded designated supportive living is regulated by Alberta Health. In other supportive living settings, the operator sets the cost of accommodation. Health services are publicly-funded and provided through Alberta Health Services. Private sector operators are eligible to apply for government funding under a government capital grant program that provides funding to develop long-term care and affordable supportive living spaces.

- Nursing Homes (also called long-term care) are for residents who have complex, unpredictable medical needs and who require 24-hour on-site registered nurse assessment or treatment. Nursing homes are regulated by provincial laws, and governed by the Ministry of Health. Operators are not licensed, but enter into agreements with the Ministry for the operation of nursing homes and must comply with certain accommodation standards. Homes can be operated by private for-profit or not-for-profit, or public operators. Operators that receive public funds for health and personal care services must also comply with certain health service standards and legislation aimed at protecting residents. Alberta



Health regulates the maximum accommodation fee in publicly-funded nursing homes. Health services in long-term care are publicly-funded, provided through Alberta Health Services. Private sector operators are eligible to apply for government funding, and the Minister may make grants to an operator in respect of its operating or capital costs.

## Ontario

Retirement homes are regulated and licensed under a provincial law aimed at protecting residents. Retirement homes do not receive government funding; residents enter into tenancy agreements under provincial tenancy law, and pay for tenancy and services received. Residents may access publicly-funded external care services at the home from external suppliers. Retirement home licenses are granted by the Retirement Homes Regulatory Authority (“RHRA”), and are non-transferable. The RHRA administers the law governing retirement homes, to ensure that licensees are meeting certain standards, generally with respect to care and safety. The law requires any person to report to the RHRA when there are reasonable grounds to suspect abuse of a resident by anyone, or neglect of a resident by staff. The RHRA conducts a mandatory inspection and issues a report that is posted on the RHRA’s public website, and also must be posted in the subject home if it is the most recent report. The Registrar of the RHRA can receive complaints about a retirement home contravening a provision of the law, and if such a complaint is received, it must be reviewed promptly. The Registrar has broad powers relating to complaint investigation and action. The RHRA Registrar has the power to inspect a retirement home at any time without warning or issue a warrant to ensure compliance. Compliance inspections occur at least every three years. The Registrar has the power to make a variety of orders including the imposition of a fine or an order revoking the operator’s license. The applicable law also enumerates offenses, such as operating without a license, and provides for penalties for offenses.

## British Columbia

Provincial laws regulate and license “community care facilities” (long-term care homes) in substantially the same manner as retirement homes are regulated under Ontario laws. Community care facilities are defined as premises used for the purpose of supervising vulnerable persons who require three or more prescribed services (from a list that includes regular assistance with activities of daily living; distribution of medication; management of cash resources; monitoring of food intake; structured behavior management and intervention; and psychosocial or physical rehabilitative therapy).

Provincial law also recognizes and regulates “assisted living residences,” for seniors who can live independently, but require assistance with certain activities. Services available can include meals, housekeeping, monitoring and emergency support, social/recreational opportunities, and transportation. Assisted living residences do not require a license, but must be registered with the registrar of assisted living residences and must be operated in a manner that does not jeopardize the health or safety of residents. If the registrar believes the standard is not being met, the registrar may inspect the residence and may suspend or cancel a registration. Independent living residences offer housing and hospitality services for retired adults who are functionally independent and able to direct their own care.

## Québec

Provincial laws in Québec regulate retirement homes (private seniors’ residences) as well as long-term care homes (residential and long-term care centers). Private seniors’ residences are required to obtain a certificate of compliance based on prescribed operating standards. A certificate of compliance is issued for a period of four years and is renewable. The regional health and social agency may revoke or refuse to issue or renew a certificate of compliance if, among other things, the operator fails to comply with the applicable law. The agency may also order corrective measures, further to an inspection, complaint or investigation. The agency is authorized to inspect a residence, at any reasonable time of day, in order to ascertain whether it complies with the law.

Private seniors’ residences may belong to either or both of the following categories: (i) those offering services to independent elderly persons and (ii) those offering services to semi-independent elderly persons. The operator must, for each category, comply with the applicable criteria and standards, with some exceptions for



residences with fewer than six or ten rooms or apartments. There are requirements with respect to residents' health and safety, meal services and recreation, content of residents' files, disclosure of information to residents, and staffing, among other things.

In May 2017, Quebec adopted the Act to combat maltreatment of seniors and other persons of full age in vulnerable situations, which aims to implement a Quebec-wide framework agreement to combat maltreatment, targets all facilities that provide health services and social services to seniors and vulnerable persons, including health establishments and private residences. We expect that it will affect private seniors' residences in the following ways:

- Health establishments are required to adopt an “Anti-Maltreatment Policy”, providing notably for the measures put in place to prevent maltreatment of persons in vulnerable situations;

- The policy adopted by health establishments will notably have to include the required adaptation for the implementation of the policy in private sector residences; and

- Operators of private seniors’ residences will be required to apply the policy adopted by the integrated health and social services center in their territory, as well as ensure that the policy is known by residents, their family members and their employees.

## Other Related Laws

## Privacy

The services provided in our facilities are subject to privacy legislation in Canada, including, in certain provinces, privacy laws specifically related to personal health information. Although the obligations of custodians of personal information in the various provinces differ, they all include the obligation to protect the information. The organizations with which we have management agreements may be the custodian of personal information collected in connection with the operation of our facilities.

Privacy laws in Canada are consent-based and require the implementation of a privacy program involving policies, procedures and the designation of an individual or team with primary responsibility for privacy law compliance. Mandatory breach notification to affected individuals is a requirement under some laws. Mandatory breach notification to the applicable regulator is a requirement in some provinces. Some laws require notification where personal information is processed or stored outside of Canada. One provincial law (in Quebec) provides for fines where an organization fails to perform due diligence before outsourcing activities involving personal information to a service provider outside of the province.

The powers of privacy regulators and penalties for violations of privacy law vary according to the applicable law or are left to the courts. To date, monetary penalties granted have been on the low side, although that is changing with civil actions for breach of privacy and may change further as a result of class action activity. There are over 60 privacy class actions which have been filed in Canada over recent years although none have yet been decided on their merits. Regulators have the authority to make public the identity of a custodian that has been found to have committed a breach, so there is a reputational risk associated with privacy law violations even where no monetary damages are incurred. The notification of residents (mandatory under some privacy laws) and other activities required to manage a privacy breach can give rise to significant costs.

## Other Legislation

Retirement homes may be subject to residential tenancy laws, such that there can be restrictions on rent increases and termination of tenancies, for instance. Other 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 may also apply to retirement homes.

## 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 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 law, including the provisions of the “Tax Cuts and Jobs Act” (the “Tax Act”). 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” (i.e., the excess of the fair market value of the asset over the adjusted tax basis in 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 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 18 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% 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. Proposed 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:

- 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 (a) the gross income attributable to (1) 75% of our gross income over the amount of qualifying gross income for purposes of the 75% income test and (2) 95% of our gross income over the amount of qualifying gross income for purposes of the 95% income test, multiplied by (b) 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.

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).

For taxable years beginning after July 30, 2008, if the 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 that does 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.

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, 2018. 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;

- 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.

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 that were 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 Tax Act 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 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. In addition, withholding a portion of capital gain distributions made to stockholders may be required for stockholders who fail to certify their non-foreign status.

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.

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 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 established 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 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 Depository 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 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 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.

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:

• is a U.S. person, as defined in the Internal Revenue Code;

• derives 50% or more of its gross income in specific periods from the conduct of a trade or business in the United States;

• is a “controlled foreign corporation” for U.S. federal income tax purposes; or

- is a foreign partnership, if at any time during its tax year, one or more of its partners are U.S. persons who in the aggregate hold more than 50% of the income or capital interests in the partnership, or the foreign partnership is engaged in a U.S. trade or business, unless the broker has documentary evidence in its files that you are a non-U.S. person and certain other conditions are met or you otherwise establish an exemption. If you receive payments of the proceeds of a sale of your notes to or through a U.S. office of a broker, the payment is subject to both U.S. backup withholding and information reporting unless you provide a Form W-8BEN certifying that you are a non-U.S. person or you otherwise establish an exemption.

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

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.

## Changes in applicable tax regulations could negatively affect our financial results

The Company is subject to taxation in the U.S. and numerous foreign jurisdictions. Because, even with the passage of the Tax Act, the U.S. maintains a worldwide corporate tax system, the foreign and U.S. tax systems are somewhat interdependent. Long-standing 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 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;

• 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

This section discusses the most significant factors that affect our business, operations and financial condition. It does not describe all risks and uncertainties applicable to us, our industry or ownership of our securities. If any of the following risks, as well as other risks and uncertainties that are not addressed in this section or that we have not yet identified, actually occur, we could be materially adversely affected and the value of our securities could decline. 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

Our investments in and acquisitions of health care and seniors housing properties may be unsuccessful or fail to meet our expectations

We are exposed to the risk that 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. 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. As a result, we cannot assure you that we will achieve the economic benefit we expect from acquisitions, investment, development and redevelopment opportunities. All of the foregoing could affect our ability to continue paying dividends at the current rate.

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; and that our partner may be in a position to take action or withhold consent contrary to our instructions or requests. In addition, our ability to transfer our interest in a joint venture to a third party may be restricted. In some instances, we and/or our partner may have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner's interest, 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. 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.

## 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. These risks include fluctuations in occupancy, 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; state regulation and rights of residents related to entrance fees; 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.

## Decreases in our operators’ revenues or increases in our operators’ expenses could affect our operators’ ability to make payments to us

Our operators’ revenues are primarily driven by occupancy, private pay rates, and Medicare and Medicaid reimbursement, if applicable. Expenses for these facilities are 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. All of the foregoing could affect our ability to continue paying dividends at the current rate.

## Increased competition and oversupply may affect our operators’ ability to meet their obligations to us

The operators of our properties compete on a local and regional basis with operators 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 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 will enable them to meet all of their obligations to us. If our operators cannot compete effectively or if there is an oversupply of facilities, their financial performance and ability to meet their obligations to us 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

Our revenues and our operators’ revenues are dependent on occupancy. It is impossible to predict the severity of the cold and flu season or the occurrence of epidemics or any other widespread illnesses. 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. In addition, a flu 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, foreclosure 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. Should such events occur, our revenue and operating cash flow may be adversely affected. All of the foregoing could affect our ability to continue paying dividends at the current rate.

## 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 re-invest these proceeds in a timely manner. We compete for real estate investments with a broad variety of potential investors, including 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.

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, 2018, Sunrise managed 161 of our seniors housing operating properties. These properties account for a significant portion of our revenues, and we rely on Sunrise to manage these 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. 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. See Note 8 to our consolidated financial statements for additional information.



We depend on Genesis HealthCare (“Genesis”), Brookdale Senior Living (“Brookdale”) and ProMedica Health System (“ProMedica”) 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 Genesis, Brookdale and ProMedica account for a significant portion of our revenues, and because these leases are triple-net leases, we also depend on Genesis, Brookdale and ProMedica to pay all insurance, taxes, utilities and maintenance and repair expenses in connection with the leased properties. We cannot assure you that Genesis, Brookdale and ProMedica 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 Genesis, Brookdale or ProMedica to do so could have an adverse effect on our business, results of operations and financial condition. Genesis, Brookdale and ProMedica 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 Genesis, Brookdale and ProMedica will have sufficient assets, income, access to financing and insurance coverage to enable them to satisfy their respective indemnification obligations. Genesis, Brookdale and ProMedica’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 real estate and other loans to Genesis and their operational or other failures could adversely impact their ability to repay these loans when due.

## 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 Canada and the U.K. which represent 10.0% and 9.6% of total Welltower revenues, respectively. As of December 31, 2018, Revera managed 98 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 recognized with respect to changes in exchange rates may not qualify under the 75% gross income test or the 95% gross income test that we must satisfy annually in order to qualify and maintain our status as a REIT; challenges with respect to the repatriation of foreign earnings and cash; changes in foreign political, regulatory, and economic conditions (regionally, nationally and locally) including, but not limited to, continuing uncertainty surrounding the process of Brexit and 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 countries; 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.

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.

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. All of the foregoing could affect our ability to continue paying dividends at the current rate.

## 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. That said, we cannot assure you that we or our tenants, operators or managers will continue to be able to maintain adequate levels of insurance and required coverages or that we will continue 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. Also, 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. General and professional liability insurance coverage may be restricted or very costly, which may adversely affect the tenants', operators' and managers' future operations, cash flows and financial condition, 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. 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. 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.

The Health Reform Laws, provide 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 February 2018, more than 60% 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. We expect that the current Presidential Administration and U.S. Congress will seek to modify, repeal, or otherwise invalidate all, or certain provisions of, the Health Reform Laws, including Medicaid expansion. Since taking office, President Trump has continued to support the repeal of all or portions of the Health Reform Laws. See “Item 1 — Business — Certain Government Regulations — United States — Reimbursement” above for additional information. 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.

Our operators’ or tenants’ failure to comply with federal, state, province, local, and industry-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 varying levels of federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards. 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, loss of license or closure of the facility. Such actions may have an effect on our operators’ or tenants’ ability to make lease payments to us and, therefore, adversely impact us. See “Item 1 — Business — Certain Government Regulations — United States — Fraud & Abuse Enforcement” 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.

## The real estate market and our business may be negatively impacted by changes to U.S. tax laws

The Tax Cuts and Jobs Act (“Tax Act”) enacted in December 2017 significantly changes the U.S. income tax rules for individuals and corporations. Although the Tax Act involves comprehensive changes to the system of corporate income tax, it does not substantively change the manner in which REITs are taxed. Although numerous provisions of the Tax Act do affect REITs, we are generally not subject to federal taxes applicable to regular corporations if we comply with the tax law governing REIT status and distribute annually an amount at least equal to our taxable income. Nonetheless, the Tax Act makes numerous changes to the individual income tax rules that may affect the real estate market in the U.S., including limitations on the deductibility of state and local property taxes and interest. Although the impact of these changes is likely to be most significant in the residential real estate market, rather than in the sectors where we operate, the effects of these changes on the broader real estate market in the geographic areas in which we operate and on our tenants remain uncertain.

## Changes in applicable tax regulations could negatively affect our financial results

We are subject to taxation in the U.S. and numerous foreign jurisdictions. Because, even with the passage of the Tax Act, 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. 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.

## 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 may be directly involved in a number of legal proceedings, lawsuits and other claims. We may also be 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. 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 and significantly divert the attention of management. 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.

## Development, redevelopment and construction risks could affect our profitability

At any given time, we may be in the process of constructing one or more new facilities that ultimately will require a CON and license before they can be utilized by the operator for their intended use. The operator also 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 CON, 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.

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 not be able to obtain financing on favorable terms, which may render us unable to proceed with our development activities, and we may not be able to complete construction and lease-up of a property 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 and capital costs. If our financial projections with respect to a new property are inaccurate as a result of increases in capital costs or other factors, 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.



We may experience losses caused by severe weather conditions or natural disasters, which could result in an increase of our or our tenants' cost of insurance, 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, and we frequently review our insurance programs and requirements. 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. 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 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. 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.

## 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. 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 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, and other electronic security breaches, 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 information technology systems to more sophisticated security threats. 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 a cyber-attack. 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. 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 could result in legal claims or proceedings, including under data privacy regulations.

## 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. 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

## Our certificate of incorporation and by-laws contain anti-takeover provisions

Our certificate of incorporation and by-laws contain anti-takeover provisions (restrictions on share ownership and transfer and super majority stockholder approval requirements for business combinations) that could make it more difficult for or even prevent a third party from acquiring us without the approval of our incumbent Board of Directors. Provisions and agreements that inhibit or discourage takeover attempts could reduce the market value of our common stock.

## 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, or (4) negatively affect our credit ratings or outlook by one or more of the rating agencies.

## 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.

## We are subject to covenants in our debt agreements that could have a material adverse impact 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 impact 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 capital stock and the credit ratings of our debt securities; the financial stability of our lenders, which might impair their ability to meet their commitments to us or their willingness to make additional loans to us; changes in the credit ratings on U.S. government debt securities; or



default or delay in payment by the U.S. of its obligations. 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.

## Downgrades in our credit ratings could have a material adverse impact 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 impact on our cost and availability of capital, which could in turn have a material adverse impact on our results of operations, liquidity and/or financial condition.

## Increases in interest rates could have a material adverse impact 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, the acquisition and development of properties, and refinance existing debt. Additionally, increased interest rates may also result in less liquid property markets, limiting our ability to sell existing assets.

## Fluctuations in the value of foreign currencies could adversely affect our results of operations and financial position

Currency exchange rate fluctuations could affect our results of operations and financial position, including exchange rate fluctuations resulting from Brexit. We generate a portion of our revenue and expenses in such foreign currencies as the Canadian dollar and the British pound sterling. Although we may enter into foreign exchange agreements with financial institutions and/or obtain local currency mortgage debt in order to reduce our exposure to fluctuations in the value of foreign currencies, we cannot assure you that foreign currency fluctuations will not have a material adverse effect on us.

## Our entry into hedge agreements may not effectively reduce our exposure to changes in interest rates or foreign currency exchange rates

We enter into hedge agreements from time to time to manage some of our exposure to interest rate and foreign currency exchange rate volatility. These agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements. In addition, these arrangements may not be effective in reducing our exposure to changes in interest rates or foreign currency exchange rates. When we use forward-starting interest rate swaps, there is a risk that we will not complete the long-term borrowing against which the swap is intended to hedge. If such events occur, our results of operations may be adversely affected.

## Risks Arising from Our Status as a REIT

## 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 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 could be subject to possibly 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 would 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 would 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 (currently at a maximum rate of 20%) 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, or we may decide to retain cash or distribute such greater amount as may be necessary to avoid income and excise taxation. 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, 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.

## 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 arms-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. Our analysis of the Tax Act may be impacted by any corrective legislation and any guidance provided by the U.S. Treasury and the IRS. Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, 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 (including the recently enacted Tax Act) 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.

## 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, 2018 (dollars in thousands):

<table><tr><td rowspan="2">Property Location</td><td colspan="4">Seniors Housing Operating</td><td colspan="4">Triple-net</td><td colspan="4">Outpatient Medical</td></tr><tr><td>Number of Properties</td><td>Total Investment</td><td>Annualized Revenues \( ^{(1)} \)</td><td>Number of Properties</td><td>Total Investment</td><td>Annualized Revenues \( ^{(1)}</td><td>Number of Properties</td><td>Total Investment</td><td>Annualized Revenues \( ^{(1} \)</td><td>Number of Properties</td><td>Total Investment</td><td>Annualized Revenues \( ^{(1)} \)</td></tr><tr><td>Alaska</td><td>—</td><td>$—</td><td>—</td><td>—</td><td>$—</td><td>$—</td><td>—</td><td>2</td><td>$—</td><td>28,820</td><td>$3,628</td><td></td></tr><tr><td>Alabama</td><td>—</td><td>—</td><td>—</td><td>4</td><td>33,434</td><td>3,356</td><td>7</td><td>80,968</td><td>7,782</td><td></td><td></td><td></td></tr><tr><td>Arkansas</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>1</td><td>22,949</td><td>2,228</td><td></td><td></td><td></td></tr><tr><td>Arizona</td><td>3</td><td>52,715</td><td>20,712</td><td>3</td><td>34,957</td><td>2,192</td><td>4</td><td>61,618</td><td>8,539</td><td></td><td></td><td></td></tr><tr><td>California</td><td>84</td><td>2,762,952</td><td>715,203</td><td>16</td><td>390,915</td><td>40,140</td><td>34</td><td>877,181</td><td>89,356</td><td></td><td></td><td></td></tr><tr><td>Colorado</td><td>4</td><td>114,217</td><td>32,053</td><td>13</td><td>331,738</td><td>29,536</td><td>2</td><td>31,643</td><td>5,947</td><td></td><td></td><td></td></tr><tr><td>Connecticut</td><td>18</td><td>443,781</td><td>148,458</td><td>13</td><td>145,985</td><td>16,087</td><td>1</td><td>41,820</td><td>4,746</td><td></td><td></td><td></td></tr><tr><td>District Of Columbia</td><td>1</td><td>61,763</td><td>14,680</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>Delaware</td><td>4</td><td>85,736</td><td>28,372</td><td>6</td><td>101,096</td><td>16,269</td><td>—</td><td>19,687</td><td>340</td><td></td><td></td><td></td></tr><tr><td>Florida</td><td>11</td><td>820,940</td><td>138,385</td><td>51</td><td>580,495</td><td>54,033</td><td>38</td><td>465,835</td><td>54,695</td><td></td><td></td><td></td></tr><tr><td>Georgia</td><td>6</td><td>110,534</td><td>29,961</td><td>6</td><td>59,190</td><td>6,874</td><td>10</td><td>164,211</td><td>27,547</td><td></td><td></td><td></td></tr><tr><td>Iowa</td><td>1</td><td>31,059</td><td>11,937</td><td>10</td><td>105,633</td><td>10,551</td><td>1</td><td>6,435</td><td>1,438</td><td></td><td></td><td></td></tr><tr><td>Idaho</td><td>—</td><td>—</td><td>—</td><td>1</td><td>4,096</td><td>1,098</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>Illinois</td><td>14</td><td>428,803</td><td>113,909</td><td>27</td><td>399,815</td><td>35,118</td><td>7</td><td>106,276</td><td>10,514</td><td></td><td></td><td></td></tr><tr><td>Indiana</td><td>—</td><td>—</td><td>—</td><td>30</td><td>385,372</td><td>41,623</td><td>9</td><td>156,095</td><td>19,261</td><td></td><td></td><td></td></tr><tr><td>Kansas</td><td>2</td><td>29,458</td><td>10,668</td><td>28</td><td>300,665</td><td>28,286</td><td>5</td><td>61,037</td><td>13,562</td><td></td><td></td><td></td></tr><tr><td>Kentucky</td><td>2</td><td>37,556</td><td>14,754</td><td>7</td><td>59,124</td><td>13,121</td><td>1</td><td>6,872</td><td>797</td><td></td><td></td><td></td></tr><tr><td>Louisiana</td><td>2</td><td>48,893</td><td>11,173</td><td>3</td><td>18,177</td><td>2,717</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>Massachusetts</td><td>40</td><td>1,103,287</td><td>261,207</td><td>18</td><td>152,967</td><td>13,766</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>Maryland</td><td>6</td><td>250,315</td><td>74,605</td><td>24</td><td>306,394</td><td>17,290</td><td>6</td><td>175,587</td><td>18,271</td><td></td><td></td><td></td></tr><tr><td>Maine</td><td>2</td><td>48,130</td><td>19,155</td><td>—</td><td>—</td><td>—</td><td>1</td><td>18,293</td><td>2,404</td><td></td><td></td><td></td></tr><tr><td>Michigan</td><td>5</td><td>105,899</td><td>23,987</td><td>24</td><td>281,423</td><td>30,649</td><td>2</td><td>29,874</td><td>6,221</td><td></td><td></td><td></td></tr><tr><td>Minnesota</td><td>4</td><td>108,830</td><td>21,491</td><td>10</td><td>218,152</td><td>18,909</td><td>8</td><td>159,033</td><td>30,553</td><td></td><td></td><td></td></tr><tr><td>Missouri</td><td>5</td><td>142,202</td><td>23,278</td><td>1</td><td>12,376</td><td>968</td><td>8</td><td>137,216</td><td>19,352</td><td></td><td></td><td></td></tr><tr><td>Mississippi</td><td>—</td><td>—</td><td>—</td><td>3</td><td>25,835</td><td>1,057</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>Montana</td><td>1</td><td>5,710</td><td>4,302</td><td>1</td><td>6,281</td><td>752</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>North Carolina</td><td>2</td><td>119,188</td><td>20,243</td><td>50</td><td>362,777</td><td>60,081</td><td>11</td><td>103,708</td><td>8,906</td><td></td><td></td><td></td></tr><tr><td>Nebraska</td><td>—</td><td>—</td><td>—</td><td>4</td><td>30,897</td><td>4,067</td><td>2</td><td>32,719</td><td>5,310</td><td></td><td></td><td></td></tr><tr><td>New Hampshire</td><td>4</td><td>114,495</td><td>32,511</td><td>4</td><td>49,700</td><td>4,136</td><td>1</td><td>12,705</td><td>1,770</td><td></td><td></td><td></td></tr><tr><td>New Jersey</td><td>26</td><td>693,703</td><td>201,450</td><td>46</td><td>815,490</td><td>60,776</td><td>9</td><td>268,927</td><td>43,281</td><td></td><td></td><td></td></tr><tr><td>New Mexico</td><td>1</td><td>17,772</td><td>1,793</td><td>—</td><td>—</td><td>—</td><td>3</td><td>30,344</td><td>3,796</td><td></td><td></td><td></td></tr><tr><td>Nevada</td><td>2</td><td>35,225</td><td>11,279</td><td>3</td><td>32,315</td><td>4,309</td><td>5</td><td>42,113</td><td>3,263</td><td></td><td></td><td></td></tr><tr><td>New York</td><td>12</td><td>428,241</td><td>111,700</td><td>4</td><td>42,201</td><td>5,795</td><td>9</td><td>162,066</td><td>10,114</td><td></td><td></td><td></td></tr><tr><td>Ohio</td><td>6</td><td>299,653</td><td>41,009</td><td>42</td><td>363,009</td><td>34,429</td><td>5</td><td>49,245</td><td>8,985</td><td></td><td></td><td></td></tr><tr><td>Oklahoma</td><td>2</td><td>38,951</td><td>2,576</td><td>21</td><td>208,973</td><td>20,907</td><td>2</td><td>22,695</td><td>3,591</td><td></td><td></td><td></td></tr><tr><td>Oregon</td><td>—</td><td>—</td><td>—</td><td>1</td><td>2,914</td><td>804</td><td>1</td><td>9,330</td><td>1,562</td><td></td><td></td><td></td></tr><tr><td>Pennsylvania</td><td>9</td><td>155,558</td><td>61,400</td><td>77</td><td>1,012,532</td><td>99,319</td><td>1</td><td>35,687</td><td>1,386</td><td></td><td></td><td></td></tr><tr><td>Rhode Island</td><td>3</td><td>59,381</td><td>20,945</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>South Carolina</td><td>2</td><td>7,101</td><td>10,190</td><td>8</td><td>49,243</td><td>4,889</td><td>1</td><td>23,837</td><td>2,364</td><td></td><td></td><td></td></tr><tr><td>Tennessee</td><td>2</td><td>48,089</td><td>15,482</td><td>4</td><td>38,684</td><td>4,536</td><td>6</td><td>62,239</td><td>10,622</td><td></td><td></td><td></td></tr><tr><td>Texas</td><td>28</td><td>820,461</td><td>192,066</td><td>41</td><td>483,016</td><td>55,358</td><td>62</td><td>973,590</td><td>101,286</td><td></td><td></td><td></td></tr><tr><td>Utah</td><td>2</td><td>20,765</td><td>12,356</td><td>2</td><td>26,538</td><td>2,775</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>Virginia</td><td>5</td><td>243,676</td><td>60,168</td><td>28</td><td>299,224</td><td>34,530</td><td>4</td><td>58,476</td><td>6,337</td><td></td><td></td><td></td></tr><tr><td>Vermont</td><td>1</td><td>25,536</td><td>7,160</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>Washington</td><td>14</td><td>474,394</td><td>90,927</td><td>14</td><td>195,075</td><td>21,038</td><td>9</td><td>225,029</td><td>23,975</td><td></td><td></td><td></td></tr><tr><td>Wisconsin</td><td>—</td><td>—</td><td>—</td><td>7</td><td>105,832</td><td>11,694</td><td>2</td><td>29,513</td><td>2,197</td><td></td><td></td><td></td></tr><tr><td>West Virginia</td><td>—</td><td>—</td><td>—</td><td>4</td><td>65,116</td><td>8,866</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>Total domestic</td><td>336</td><td>10,394,969</td><td>2,611,545</td><td>659</td><td>8,137,656</td><td>822,701</td><td>280</td><td>4,793,673</td><td>565,926</td><td></td><td></td><td></td></tr><tr><td>Canada</td><td>110</td><td>2,101,067</td><td>451,347</td><td>6</td><td>143,362</td><td>9,944</td><td>—</td><td>—</td><td>—</td><td></td><td></td><td></td></tr><tr><td>United Kingdom</td><td>54</td><td>1,475,141</td><td>321,623</td><td>61</td><td>1,111,086</td><td>113,498</td><td>4</td><td>263,815</td><td>24,742</td><td></td><td></td><td></td></tr><tr><td>Total international</td><td>164</td><td>3,576,208</td><td>772,970</td><td>67</td><td>1,254,448</td><td>123,442</td><td>4</td><td>263,815</td><td>24,742</td><td></td><td></td><td></td></tr><tr><td>Grand total</td><td>500</td><td>$13,971,177</td><td>$3,384,515</td><td>726</td><td>$9,392,104</td><td>$946,143</td><td>284</td><td>$5,057,488</td><td>$590,668</td><td></td><td></td><td></td></tr></table>

(1) Represents revenue for the month ended December 31, 2018 annualized.



The following table sets forth occupancy, coverages and average annualized revenues for certain property types (excluding investments in unconsolidated entities):

<table><tr><td rowspan="2"></td><td colspan="2">Occupancy \( ^{(1)} \)</td><td colspan="2">Coverages \( ^{(1,2)} \)</td><td colspan="2">Average Annualized Revenues \( ^{(3)} \)</td></tr><tr><td>2018</td><td>2017</td><td>2018</td><td>2017</td><td>2018</td><td>2017</td></tr><tr><td>Seniors Housing Operating \( ^{(4)} \)</td><td>87.5%</td><td>86.5%</td><td>n/a</td><td>n/a</td><td>60,635</td><td>60,828 per unit</td></tr><tr><td>Triple-net \( ^{(5)} \)</td><td>84.9%</td><td>85.8%</td><td>1.39x</td><td>1.34x</td><td>12,831</td><td>15,663 per bed/unit</td></tr><tr><td>Outputati Medical \( ^{(6)} \)</td><td>93.1%</td><td>93.7%</td><td>n/a</td><td>n/a</td><td>34</td><td>33 per sq. ft.</td></tr></table>

(1) We use unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy and coverages for properties other than outpatient medical buildings and have not independently verified the information.

(2) Represents the ratio of our triple-net customers' earnings before interest, taxes, depreciation, amortization, rent and management fees to contractual rent or interest due us. Data reflects the twelve months ended September 30 for the periods presented.

(3) Represents annualized revenues divided by total beds, units or square feet as presented in the tables above.

(4) Occupancy represents average occupancy for the three months ended December 31.

(5) 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.

(6) 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, 2018 (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="12">Expiration Year \( ^{(1)} \)</td></tr><tr><td>2019</td><td>2020</td><td>2021</td><td>2022</td><td>2023</td><td>2024</td><td>2025</td><td>2026</td><td>2027</td><td>2028</td><td>Thereafter</td><td></td></tr><tr><td>Triple-net:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Properties</td><td>67</td><td>—</td><td>8</td><td>12</td><td>—</td><td>4</td><td>55</td><td>95</td><td>19</td><td>33</td><td>410</td><td></td></tr><tr><td>Base rent \( ^{(2)} \)</td><td>58,718</td><td>$ —</td><td>$ 13,691</td><td>$ 8,272</td><td>$ —</td><td>$ 11,096</td><td>$ 62,108</td><td>$ 123,694</td><td>$ 35,006</td><td>$ 49,075</td><td>$ 452,444</td><td></td></tr><tr><td>% of base rent</td><td>7.2%</td><td>—%</td><td>1.7%</td><td>1.0%</td><td>—%</td><td>1.4%</td><td>7.6%</td><td>15.2%</td><td>4.3%</td><td>6.0%</td><td>55.6%</td><td></td></tr><tr><td>Units</td><td>8,401</td><td>—</td><td>1,416</td><td>1,245</td><td>—</td><td>692</td><td>4,140</td><td>7,717</td><td>2,401</td><td>2,840</td><td>43,019</td><td></td></tr><tr><td>% of units</td><td>11.7%</td><td>—%</td><td>2.0%</td><td>1.7%</td><td>—%</td><td>1.0%</td><td>5.8%</td><td>10.7%</td><td>3.3%</td><td>4.0%</td><td>59.9%</td><td></td></tr><tr><td>Outputati Medical:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Square feet</td><td>1,232,245</td><td>1,346,567</td><td>1,630,750</td><td>1,769,937</td><td>1,398,798</td><td>1,404,470</td><td>834,530</td><td>1,327,844</td><td>579,397</td><td>763,969</td><td>4,660,901</td><td></td></tr><tr><td>Base rent \( ^{(2)} \)</td><td>34,810</td><td>$ 38,060</td><td>$ 45,882</td><td>$ 47,951</td><td>$ 38,075</td><td>$ 41,464</td><td>$ 22,411</td><td>$ 33,712</td><td>$ 14,550</td><td>$ 20,441</td><td>$ 95,301</td><td></td></tr><tr><td>% of base rent</td><td>8.0%</td><td>8.8%</td><td>10.6%</td><td>11.1%</td><td>8.8%</td><td>9.6%</td><td>5.2%</td><td>7.8%</td><td>3.4%</td><td>4.7%</td><td>22.0%</td><td></td></tr><tr><td>Leases</td><td>350</td><td>332</td><td>323</td><td>313</td><td>312</td><td>181</td><td>134</td><td>154</td><td>86</td><td>88</td><td>171</td><td></td></tr><tr><td>% of leases</td><td>14.3%</td><td>13.6%</td><td>13.2%</td><td>12.8%</td><td>12.8%</td><td>7.4%</td><td>5.5%</td><td>6.3%</td><td>3.5%</td><td>3.6%</td><td>7.0%</td><td></td></tr></table>

(1) Excludes investments in unconsolidated entities. Investments classified as held for sale are included in 2019.

(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.



## 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 3,668 stockholders of record as of January 31, 2019.

## 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, 2018, 161 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. 2013 equals $100 and dividends are assumed to be reinvested.



<table><tr><td></td><td>12/31/2013</td><td>12/31/2014</td><td>12/31/2015</td><td>12/31/2016</td><td>12/31/2017</td><td>12/31/2018</td></tr><tr><td>S &amp; P 500</td><td>$100.00</td><td>$113.69</td><td>$115.26</td><td>$129.05</td><td>$157.22</td><td>$150.33</td></tr><tr><td>Welltower Inc.</td><td>100.00</td><td>148.51</td><td>140.01</td><td>144.73</td><td>145.02</td><td>167.21</td></tr><tr><td>FTSE NAREIT Equity</td><td>100.00</td><td>130.14</td><td>134.30</td><td>145.74</td><td>153.36</td><td>146.27</td></tr></table>



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.

Issuer Purchases of Equity Securities

<table><tr><td>Period</td><td>Total Number of Shares Purchased(1)</td><td>Average Price Paid Per Share</td><td>Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)</td><td>Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs</td></tr><tr><td>October 1, 2018 through October 31, 2018</td><td>1,739</td><td>$62.01</td><td></td><td></td></tr><tr><td>November 1, 2018 through November 30, 2018</td><td>416</td><td>69.17</td><td></td><td></td></tr><tr><td>December 1, 2018 through December 31, 2018</td><td>—</td><td>—</td><td></td><td></td></tr><tr><td>Totals</td><td>2,155</td><td>$63.39</td><td></td><td></td></tr></table>

(1) During the three months ended December 31, 2018, the company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

(2) No shares were purchased as part of publicly announced plans or programs.



## Item 6. Selected Financial Data

The following selected financial data for the five years ended December 31, 2018 are derived from our audited consolidated financial statements (in thousands, except per share data):

<table><tr><td rowspan="2"></td><td colspan="5">Year Ended December 31,</td></tr><tr><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>2018</td></tr><tr><td>Operating Data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total revenues</td><td>$3,343,546</td><td>$3,859,826</td><td>$4,281,160</td><td>$4,316,641</td><td>$4,700,499</td></tr><tr><td>Total expenses</td><td>2,959,333</td><td>3,223,709</td><td>3,571,907</td><td>4,017,025</td><td>4,277,009</td></tr><tr><td>Income from continuing operations before income taxes and other items</td><td>384,213</td><td>636,117</td><td>709,253</td><td>299,616</td><td>423,490</td></tr><tr><td>Income tax (expense) benefit</td><td>1,267</td><td>(6,451)</td><td>19,128</td><td>(20,128)</td><td>(8,674)</td></tr><tr><td>Income (loss) from unconsolidated entities</td><td>(27,426)</td><td>(21,504)</td><td>(10,357)</td><td>(83,125)</td><td>(641)</td></tr><tr><td>Gain (loss) on real estate dispositions, net</td><td>147,111</td><td>280,387</td><td>364,046</td><td>344,250</td><td>415,575</td></tr><tr><td>Income from continuing operations</td><td>505,165</td><td>888,549</td><td>1,082,070</td><td>540,613</td><td>829,750</td></tr><tr><td>Income from discontinued operations, net</td><td>7,135</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net income</td><td>512,300</td><td>888,549</td><td>1,082,070</td><td>540,613</td><td>829,750</td></tr><tr><td>Preferred stock dividends</td><td>65,408</td><td>65,406</td><td>65,406</td><td>49,410</td><td>46,704</td></tr><tr><td>Preferred stock redemption charge</td><td>—</td><td>—</td><td>—</td><td>9,769</td><td>—</td></tr><tr><td>Net income (loss) attributable to noncontrolling interests</td><td>147</td><td>4,799</td><td>4,267</td><td>17,839</td><td>24,796</td></tr><tr><td>Net income attributable to common stockholders</td><td>$ 446,745</td><td>$ 818,344</td><td>$1,012,397</td><td>$ 463,595</td><td>$ 758,250</td></tr><tr><td>Other Data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Average number of common shares outstanding:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>306,272</td><td>348,240</td><td>358,275</td><td>367,237</td><td>373,620</td></tr><tr><td>Diluted</td><td>307,747</td><td>349,424</td><td>360,227</td><td>369,001</td><td>375,250</td></tr><tr><td>Per Share Data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income from continuing operations</td><td>$ 1.65</td><td>$ 2.55</td><td>$ 3.02</td><td>$ 1.47</td><td>$ 2.22</td></tr><tr><td>Discontinued operations, net</td><td>$ 0.02</td><td>$ —</td><td>$ —</td><td>$ —</td><td>$ —</td></tr><tr><td>Net income attributable to common stockholders</td><td>$ 1.46</td><td>$ 2.35</td><td>$ 2.83</td><td>$ 1.26</td><td>$ 2.03</td></tr><tr><td>Diluted:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income from continuing operations</td><td>$ 1.64</td><td>$ 2.54</td><td>$ 3.00</td><td>$ 1.47</td><td>$ 2.21</td></tr><tr><td>Discontinued operations, net</td><td>$ 0.02</td><td>$ —</td><td>$ —</td><td>$ —</td><td>$ —</td></tr><tr><td>Net income attributable to common stockholders</td><td>$ 1.45</td><td>$ 2.34</td><td>$ 2.81</td><td>$ 1.26</td><td>$ 2.02</td></tr><tr><td>Cash distributions per common share</td><td>$ 3.18</td><td>$ 3.30</td><td>$ 3.44</td><td>$ 3.48</td><td>$ 3.48</td></tr></table>

<table><tr><td></td><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>2018</td></tr><tr><td>Balance Sheet Data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net real estate investments</td><td>$22,851,196</td><td>$26,888,685</td><td>$26,563,629</td><td>$26,171,077</td><td>$28,420,769</td></tr><tr><td>Total assets</td><td>24,962,923</td><td>29,023,845</td><td>28,865,184</td><td>27,944,445</td><td>30,342,072</td></tr><tr><td>Total long-term obligations</td><td>10,776,640</td><td>12,967,686</td><td>12,358,245</td><td>11,731,936</td><td>13,297,144</td></tr><tr><td>Total liabilities</td><td>11,403,465</td><td>13,664,877</td><td>13,185,279</td><td>12,643,799</td><td>14,331,427</td></tr><tr><td>Total preferred stock</td><td>1,006,250</td><td>1,006,250</td><td>1,006,250</td><td>718,503</td><td>718,498</td></tr><tr><td>Total equity</td><td>13,473,049</td><td>15,175,885</td><td>15,281,472</td><td>14,925,452</td><td>15,586,599</td></tr></table>



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

## EXECUTIVE SUMMARY

Company Overview ..... 49
Business Strategy ..... 49
Key Transactions ..... 50
Key Performance Indicators, Trends and Uncertainties ..... 52
Corporate Governance ..... 53

## LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash ..... 54
Off-Balance Sheet Arrangements ..... 55
Contractual Obligations ..... 55
Capital Structure ..... 56

## RESULTS OF OPERATIONS

Summary ..... 57
Seniors Housing Operating ..... 58
Triple-net ..... 61
Outpatient Medical ..... 64
Non-Segment/Corporate ..... 67

## OTHER

Non-GAAP Financial Measures ..... 68
Critical Accounting Policies ..... 74



## 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 \( ^{TM} \) , 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. Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets.

The following table summarizes our consolidated portfolio for the year ended December 31, 2018 (dollars in thousands):

<table><tr><td>Type of Property</td><td>NOI \( ^{(1)} \)</td><td>Percentage of NOI</td><td>Number of Properties</td></tr><tr><td>Seniors Housing Operating</td><td>$ 985,022</td><td>43.5%</td><td>500</td></tr><tr><td>Triple-net</td><td>900,049</td><td>39.7%</td><td>726</td></tr><tr><td>Outpatient Medical</td><td>380,136</td><td>16.8%</td><td>284</td></tr><tr><td>Totals</td><td>$2,265,207</td><td>100.0%</td><td>1,510</td></tr></table>

(1) Represents consolidated 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.

## 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 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.

Substantially all of our revenues are derived from operating lease rentals, resident fees/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,



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 guaranties 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, 2018, resident fees/services and rental income represented 69% and 29%, 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/services, rent and interest receipts, borrowings under our primary unsecured credit facility, public issuances of debt and equity securities, our commercial paper program, 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 and general and administrative 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 primary unsecured credit facility, internally generated cash and the proceeds from investment dispositions. Our investments generate cash from net operating income. Permanent financing for future investments, which replaces funds drawn under our primary unsecured credit facility, 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 primary unsecured credit facility. At December 31, 2018, we had $215,376,000 of cash and cash equivalents, $100,753,000 of restricted cash and $1,853,000,000 of available borrowing capacity under our primary unsecured credit facility.

## Key Transactions

Capital The following summarizes key capital transactions that occurred and supported new investments made during the year ended December 31, 2018:

- In April 2018, we issued $550,000,000 of 4.25% senior unsecured notes due 2028 for net proceeds of approximately $545,074,000.

- In connection with the QCP acquisition, in July 2018, we drew on a $1,000,000,000 term loan facility to fund a portion of the cash consideration and other expenses.



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

- In August 2018, we issued $200,000,000 of 4.25% senior unsecured notes due 2028, $600,000,000 of 3.95% senior unsecured notes due 2023 and $500,000,000 of 4.95% senior unsecured notes due 2048 for aggregate net proceeds of approximately $1,283,226,000. Proceeds from these issuances were used to repay advances under the $1,000,000,000 term loan facility drawn on in July 2018 and the primary unsecured credit facility.

- In July 2018, we closed on a new $3,700,000,000 unsecured credit facility with improved pricing across both our line of credit and term loan facility and terminated the existing unsecured credit facility. The credit facility includes a $3,000,000,000 revolving credit facility at a borrowing rate of 0.825% over LIBOR, a $500,000,000 USD unsecured term credit facility at a borrowing rate of 0.90% over LIBOR and a $250,000,000 CAD unsecured term credit facility at 0.90% over CDOR.

• We extinguished $306,553,000 of secured debt at a blended average interest rate of 5.36%.

• We repaid our $450,000,000 of 2.25% senior unsecured notes at par upon maturity on March 15, 2018.

• We raised $794,649,000 through our dividend reinvestment program and our Equity Shelf Program (as defined below).

Investments The following summarizes our property acquisitions and joint venture investments made during the year ended December 31, 2018 (dollars in thousands):

<table><tr><td></td><td>Properties</td><td>Investment Amount \( ^{(1)} \)</td><td>Capitalization Rates \( ^{(2)} \)</td><td>Book Amount \( ^{(3)} \)</td></tr><tr><td>Seniors Housing Operating</td><td>12</td><td>$ 673,374</td><td>6.7%</td><td>$ 742,675</td></tr><tr><td>Triple-net</td><td>246</td><td>2,438,899</td><td>6.9%</td><td>3,062,427</td></tr><tr><td>Outpatient Medical</td><td>30</td><td>605,866</td><td>5.8%</td><td>628,824</td></tr><tr><td>Totals</td><td>288</td><td>$3,718,139</td><td>6.7%</td><td>$4,433,926</td></tr></table>

(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 net operating income 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 made during the year ended December 31, 2018 (dollars in thousands):

<table><tr><td></td><td>Properties</td><td>Proceeds \( ^{(1)} \)</td><td>Capitalization Rates \( ^{(2)} \)</td><td>Book Amount \( ^{(3)} \)</td></tr><tr><td>Seniors Housing Operating</td><td>4</td><td>40,073</td><td>7.5%</td><td>36,627</td></tr><tr><td>Triple-net</td><td>107</td><td>1,050,290</td><td>5.3%</td><td>835,093</td></tr><tr><td>Outpatient Medical</td><td>21</td><td>464,843</td><td>6.2%</td><td>253,397</td></tr><tr><td>Totals</td><td>132</td><td>1,555,206</td><td>5.6%</td><td>1,125,117</td></tr></table>

(1) Represents pro rata proceeds received upon disposition.

(2) Represents annualized contractual net operating income that was being received in cash at date of disposition divided by disposition proceeds.

(3) Represents carrying value of assets at time of disposition. See Note 5 to our consolidated financial statements for additional information.

Dividends Our Board of Directors announced the 2019 annual cash dividend of $3.48 per common share ($0.87 per share quarterly), consistent with 2018, beginning in February 2019. The dividend declared for the quarter ended December 31, 2018 represents the 191 \( ^{st} \)  consecutive quarterly dividend payment.



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

## 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”), consolidated net operating income (“NOI”) and same store NOI (“SSNOI”); 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):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2016</td><td>2017</td><td>2018</td></tr><tr><td>Net income</td><td>$1,082,070</td><td>$ 540,613</td><td>$ 829,750</td></tr><tr><td>Net income attributable to common stockholders</td><td>1,012,397</td><td>463,595</td><td>758,250</td></tr><tr><td>Funds from operations attributable to common stockholders</td><td>1,582,940</td><td>1,165,576</td><td>1,392,183</td></tr><tr><td>Consolidated net operating income</td><td>2,404,177</td><td>2,232,716</td><td>2,267,482</td></tr><tr><td>Same store net operating income</td><td>1,528,340</td><td>1,544,462</td><td>1,551,424</td></tr></table>

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:

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2016</td><td>2017</td><td>2018</td></tr><tr><td>Net debt to book capitalization ratio</td><td>42.9%</td><td>42.9%</td><td>45.0%</td></tr><tr><td>Net debt to undepreciated book capitalization ratio</td><td>37.4%</td><td>36.3%</td><td>37.8%</td></tr><tr><td>Net debt to market capitalization ratio</td><td>31.1%</td><td>31.2%</td><td>31.3%</td></tr><tr><td>Adjusted interest coverage ratio</td><td>4.21x</td><td>4.36x</td><td>4.11x</td></tr><tr><td>Adjusted fixed charge coverage ratio</td><td>3.34x</td><td>3.54x</td><td>3.44x</td></tr></table>

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 top five relationships. Geographic mix measures the portion of our NOI that relates to our top five states (or international



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

equivalents). The following table reflects our recent historical trends of concentration risk by NOI for the years indicated below:

<table><tr><td rowspan="2"></td><td colspan="4">December 31, \( ^{(1)} \)</td></tr><tr><td>2016</td><td>2017</td><td>2018</td><td></td></tr><tr><td>Property mix:</td><td></td><td></td><td></td><td></td></tr><tr><td>Seniors Housing Operating</td><td>34%</td><td>40%</td><td>43%</td><td></td></tr><tr><td>Triple-net</td><td>50%</td><td>43%</td><td>40%</td><td></td></tr><tr><td>Outpatient Medical</td><td>16%</td><td>17%</td><td>17%</td><td></td></tr><tr><td>Relationship mix:</td><td></td><td></td><td></td><td></td></tr><tr><td>Sunrise Senior Living \( ^{(2)} \)</td><td>13%</td><td>14%</td><td>15%</td><td></td></tr><tr><td>Revera \( ^{(2)} \)</td><td>6%</td><td>7%</td><td>7%</td><td></td></tr><tr><td>Brookdale Senior Living</td><td>6%</td><td>7%</td><td>6%</td><td></td></tr><tr><td>Genesis HealthCare</td><td>16%</td><td>9%</td><td>6%</td><td></td></tr><tr><td>Benchmark Senior Living</td><td>4%</td><td>4%</td><td>4%</td><td></td></tr><tr><td>Remaining</td><td>55%</td><td>59%</td><td>62%</td><td></td></tr><tr><td>Geographic mix:</td><td></td><td></td><td></td><td></td></tr><tr><td>California</td><td>10%</td><td>13%</td><td>14%</td><td></td></tr><tr><td>United Kingdom</td><td>8%</td><td>9%</td><td>9%</td><td></td></tr><tr><td>Canada</td><td>7%</td><td>8%</td><td>8%</td><td></td></tr><tr><td>Texas</td><td>7%</td><td>7%</td><td>8%</td><td></td></tr><tr><td>New Jersey</td><td>8%</td><td>8%</td><td>7%</td><td></td></tr><tr><td>Remaining</td><td>60%</td><td>55%</td><td>54%</td><td></td></tr></table>

(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.



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

## Liquidity and Capital Resources

## Sources and Uses of Cash

Our primary sources of cash include resident fees/services, rent and interest receipts, borrowings under our primary unsecured credit facility, 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 and general and administrative 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):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2">Two Year Change</td></tr><tr><td colspan="2">December 31, 2016</td><td colspan="2">December 31, 2017</td><td>%</td><td colspan="2">December 31, 2018</td><td>%</td></tr><tr><td>Beginning cash, cash equivalents and restricted cash</td><td>422,690</td><td>607,220</td><td>184,530</td><td>44%</td><td>309,303</td><td>(297,917)</td><td>-49%</td><td>(113,387)</td><td>-27%</td></tr><tr><td>Net cash provided from (used in):</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating activities</td><td>1,639,064</td><td>1,434,177</td><td>(204,887)</td><td>-13%</td><td>1,583,944</td><td>149,767</td><td>10%</td><td>(55,120)</td><td>-3%</td></tr><tr><td>Investing activities</td><td>(183,443)</td><td>154,581</td><td>338,024</td><td>n/a</td><td>(2,386,471)</td><td>(2,541,052)</td><td>n/a</td><td>(2,203,028)</td><td>1,201%</td></tr><tr><td>Financing activities</td><td>(1,250,817)</td><td>(1,913,527)</td><td>(662,710)</td><td>53%</td><td>818,368</td><td>2,731,895</td><td>n/a</td><td>2,069,185</td><td>n/a</td></tr><tr><td>Effect of foreign currency translation</td><td>(20,274)</td><td>26,852</td><td>47,126</td><td>n/a</td><td>(9,015)</td><td>(35,867)</td><td>n/a</td><td>11,259</td><td>-56%</td></tr><tr><td>Ending cash, cash equivalents and restricted cash</td><td>607,220</td><td>309,303</td><td>(297,917)</td><td>-49%</td><td>316,129</td><td>6,826</td><td>2%</td><td>(291,091)</td><td>-48%</td></tr></table>

Operating Activities The change in net cash provided from operating activities is attributable to changes in NOI, which is primarily due to acquisitions and annual rent increases, partially offset to dispositions. Please see “Results of Operations” below for further discussion. For the years ended December 31, 2016, 2017 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, real estate loans receivable, and investments in unconsolidated entities which are summarized above in “Key Transactions.” Please refer to Notes 3, 6, and 7 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):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>$</td><td>%</td><td>December 31, 2018</td><td>$</td><td>%</td><td>$</td></tr><tr><td>New development</td><td>$403,131</td><td>$232,715</td><td>$(170,416)</td><td>-42%</td><td>$160,706</td><td>$72,009)</td><td>-31%</td><td>$(242,425)</td><td>-60%</td></tr><tr><td>Recurring capital expenditures, tenant improvements and lease commissions</td><td>66,332</td><td>67,797</td><td>1,465</td><td>2%</td><td>90,190</td><td>22,393</td><td>33%</td><td>23,858</td><td>36%</td></tr><tr><td>Renovations, redevelopments and other capital improvements</td><td>152,814</td><td>182,479</td><td>29,665</td><td>19%</td><td>175,993</td><td>(6,486)</td><td>-4%</td><td>23,179</td><td>15%</td></tr><tr><td>Total</td><td>$622,277</td><td>$482,991</td><td>$139,286)</td><td>-22%</td><td>$426,889</td><td>$56,102)</td><td>-12%</td><td>$(195,388)</td><td>-31%</td></tr></table>

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



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

to maximize property value, increase net operating income, maintain a market-competitive position, and/or achieve property stabilization. Generally, these expenditures have increased as a result of acquisitions, primarily in our Seniors Housing Operating segment.

Financing Activities The changes in net cash provided from financing activities are primarily attributable to changes related to our long-term debt arrangements, the issuance/redemptions of common and preferred stock and dividend payments which are summarized above in “Key Transactions.” Please refer to Notes 9, 10 and 13 of our consolidated financial statements for additional information.

## Off-Balance Sheet Arrangements

At December 31, 2018, we had investments in unconsolidated entities with our ownership generally ranging from 10% to 50%. We use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure. At December 31, 2018, we had fourteen outstanding letter of credit obligations. Please see Notes 7, 11 and 12 to our consolidated financial statements for additional information.

## Contractual Obligations

The following table summarizes our payment requirements under contractual obligations as of December 31, 2018 (in thousands):

<table><tr><td rowspan="2">Contractual Obligations</td><td colspan="5">Payments Due by Period</td></tr><tr><td>Total</td><td>2019</td><td>2020-2021</td><td>2022-2023</td><td>Thereafter</td></tr><tr><td>Unsecured revolving credit facility(1)</td><td>$ 1,147,000</td><td>$ —</td><td>$ 1,147,000</td><td>$ —</td><td></td></tr><tr><td>Senior unsecured notes and term credit facilities:(2)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. Dollar senior unsecured notes</td><td>7,450,000</td><td>600,000</td><td>900,000</td><td>1,700,000</td><td>4,250,000</td></tr><tr><td>Canadian Dollar senior unsecured notes(3)</td><td>219,989</td><td>—</td><td>219,989</td><td>—</td><td>—</td></tr><tr><td>Pounds Sterling senior unsecured notes(3)</td><td>1,339,170</td><td>—</td><td>—</td><td>—</td><td>1,339,170</td></tr><tr><td>U.S. Dollar term credit facility</td><td>507,500</td><td>—</td><td>7,500</td><td>500,000</td><td>—</td></tr><tr><td>Canadian Dollar term credit facility(3)</td><td>183,325</td><td>—</td><td>—</td><td>183,325</td><td>—</td></tr><tr><td>Secured debt:(2,3)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consolidated</td><td>2,485,711</td><td>508,899</td><td>507,412</td><td>605,789</td><td>863,611</td></tr><tr><td>Unconsolidated</td><td>790,643</td><td>51,614</td><td>88,024</td><td>39,495</td><td>611,510</td></tr><tr><td>Contractual interest obligations:(4)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Unsecured revolving credit facility</td><td>171,910</td><td>38,202</td><td>76,405</td><td>57,303</td><td>—</td></tr><tr><td>Senior unsecured notes and term loans(3)</td><td>3,930,812</td><td>424,529</td><td>758,541</td><td>638,183</td><td>2,109,559</td></tr><tr><td>Consolidated secured debt(3)</td><td>478,922</td><td>90,861</td><td>144,026</td><td>96,873</td><td>147,162</td></tr><tr><td>Unconsolidated secured debt(3)</td><td>211,077</td><td>30,919</td><td>51,892</td><td>47,904</td><td>80,362</td></tr><tr><td>Capital lease obligations(5)</td><td>84,265</td><td>4,173</td><td>8,346</td><td>71,746</td><td>—</td></tr><tr><td>Operating lease obligations(5)</td><td>1,138,046</td><td>18,242</td><td>35,392</td><td>33,965</td><td>1,050,447</td></tr><tr><td>Purchase obligations(5)</td><td>1,704,293</td><td>1,599,477</td><td>104,816</td><td>—</td><td>—</td></tr><tr><td>Other long-term liabilities(6)</td><td>1,229</td><td>1,229</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total contractual obligations</td><td>21,843,892</td><td>3,368,145</td><td>2,902,343</td><td>5,121,583</td><td>10,451,821</td></tr></table>



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(3) Based on foreign currency exchange rates in effect as of balance sheet date.

(4) Based on variable interest rates in effect as of December 31, 2018.

(5) See Note 12 to our consolidated financial statements for additional information.

(6) Primarily relates to payments to be made under a supplemental executive retirement plan for one former executive officer.

## 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, 2018, 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 in turn 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 February 13, 2019, 8,526,222 shares of common stock remained available for issuance under the DRIP registration statement. On August 3, 2018, we entered into separate amended and restated equity distribution agreements with each of Morgan Stanley & Co. LLC; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Goldman Sachs & Co. LLC; UBS Securities LLC and Wells Fargo Securities, LLC relating to the offer and sale from time to time of up to 784,083,001 aggregate amount of our common stock (“Equity Shelf Program”). The Equity Shelf Program also allows us to enter into forward sale agreements. We expect that, if entered into, we will physically settle each forward sale agreement on one or more dates on or prior to the maturity date of that particular forward sale agreement, in which case we will expect to receive per share cash proceeds at settlement equal to the forward sale price under the relevant forward sale agreement. However, we may elect to cash settle or net share settle a forward sale agreement. As of February 13, 2019, we had 227,958,000 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 primary unsecured credit facility.



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

## Results of Operations

## Summary

Our primary sources of revenue include resident fees/services, rent and interest income. Our primary expenses include interest expense, depreciation and amortization, property operating expenses, other expenses and general and administrative 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 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. The following is a summary of our results of operations for the periods presented (dollars in thousands, except per share amounts):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2">Year Ended</td><td colspan="2">One Year Change</td><td colspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>Amount</td><td>%</td><td>December 31, 2018</td><td>Amount</td><td>%</td><td>Amount</td></tr><tr><td>Net income</td><td>$1,082,070</td><td>$ 540,613</td><td>$ (541,457)</td><td>-50%</td><td>$ 829,750</td><td>$289,137</td><td>53%</td><td>$(252,320)</td><td>-23%</td></tr><tr><td>NICS</td><td>1,012,397</td><td>463,595</td><td>(548,802)</td><td>-54%</td><td>758,250</td><td>294,655</td><td>64%</td><td>(254,147)</td><td>-25%</td></tr><tr><td>FFO</td><td>1,582,940</td><td>1,165,576</td><td>(417,364)</td><td>-26%</td><td>1,392,183</td><td>226,607</td><td>19%</td><td>(190,757)</td><td>-12%</td></tr><tr><td>Adjusted EBITDA</td><td>2,256,864</td><td>2,128,429</td><td>(128,435)</td><td>-6%</td><td>2,153,005</td><td>24,576</td><td>1%</td><td>(103,859)</td><td>-5%</td></tr><tr><td>Consolidated NOI</td><td>2,404,177</td><td>2,232,716</td><td>(171,461)</td><td>-7%</td><td>2,267,482</td><td>34,766</td><td>2%</td><td>(136,695)</td><td>-6%</td></tr><tr><td>Same store NOI</td><td>1,528,340</td><td>1,544,462</td><td>16,122</td><td>1%</td><td>1,551,424</td><td>6,962</td><td>—%</td><td>23,084</td><td>2%</td></tr><tr><td>Per share data (fully diluted):</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income attributable to common stockholders</td><td>$ 2.81</td><td>$ 1.26</td><td>$ (1.55)</td><td>-55%</td><td>$ 2.02</td><td>$ 0.76</td><td>60%</td><td>$ (0.79)</td><td>-28%</td></tr><tr><td>Funds from operations attributable to common stockholders</td><td>4.39</td><td>3.16</td><td>(1.23)</td><td>-28%</td><td>3.71</td><td>0.55</td><td>17%</td><td>(0.68)</td><td>-15%</td></tr><tr><td>Adjusted interest coverage ratio</td><td>4.21x</td><td>4.36x</td><td>0.15x</td><td>4%</td><td>4.11x</td><td>-0.25x</td><td>-6%</td><td>0.15x</td><td>4%</td></tr><tr><td>Adjusted fixed charge coverage ratio</td><td>3.34x</td><td>3.54x</td><td>0.20x</td><td>6%</td><td>3.44x</td><td>-0.10x</td><td>-3%</td><td>0.20x</td><td>6%</td></tr></table>



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following table represents the changes in outstanding common stock for the period from January 1, 2016 to December 31, 2018 (in thousands):

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>December 31, 2018</td><td>Totals</td></tr><tr><td>Beginning balance</td><td>354,778</td><td>362,602</td><td>371,732</td><td>354,778</td></tr><tr><td>Dividend reinvestment plan issuances</td><td>4,145</td><td>5,640</td><td>6,529</td><td>16,314</td></tr><tr><td>Preferred stock conversions</td><td>—</td><td>4</td><td>—</td><td>4</td></tr><tr><td>Redemption of equity membership units</td><td>—</td><td>91</td><td>—</td><td>91</td></tr><tr><td>Option exercises</td><td>141</td><td>253</td><td>57</td><td>451</td></tr><tr><td>Equity Shelf Program issuances</td><td>3,135</td><td>2,987</td><td>5,241</td><td>11,363</td></tr><tr><td>Other, net</td><td>403</td><td>155</td><td>116</td><td>674</td></tr><tr><td>Ending balance</td><td>362,602</td><td>371,732</td><td>383,675</td><td>383,675</td></tr><tr><td>Average number of shares outstanding:</td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>358,275</td><td>367,237</td><td>373,620</td><td></td></tr><tr><td>Diluted</td><td>360,227</td><td>369,001</td><td>375,250</td><td></td></tr></table>

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.

## Seniors Housing Operating

The following is a summary of our NOI and SSNOI for the Seniors Housing Operating segment for the years presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>$</td><td>%</td><td>December 31, 2018</td><td>$</td><td>%</td><td>$</td></tr><tr><td>NOI</td><td>$814,114</td><td>$880,026</td><td>$65,912</td><td>8%</td><td>$985,022</td><td>$104,996</td><td>12%</td><td>$170,908</td><td>21%</td></tr><tr><td>Non-cash NOI attributable to same store properties(1)</td><td>1,990</td><td>1,242</td><td>(748)</td><td>-38%</td><td>836</td><td>(406)</td><td>-33%</td><td>(1,154)</td><td>-58%</td></tr><tr><td>NOI attributable to non same store properties(2)</td><td>(77,334)</td><td>(132,604)</td><td>(55,270)</td><td>71%</td><td>(251,803)</td><td>(119,199)</td><td>90%</td><td>(174,469)</td><td>226%</td></tr><tr><td>SSNOI(1)</td><td>$738,770</td><td>$748,664</td><td>$9,894</td><td>1%</td><td>$734,055</td><td>$(14,609)</td><td>-2%</td><td>$(4,715)</td><td>-1%</td></tr></table>

(1) Relates to 348 same store properties.

(2) Primarily relates to the acquisition of 66 properties subsequent to January 1, 2016 and the transition of 69 properties from Triple-net to Seniors Housing Operating.



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a summary of our results of operations for the Seniors Housing Operating segment for the years presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2" colspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>$</td><td>%</td><td>December 31, 2018</td><td>$</td><td>%</td><td>$</td><td>%</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Resident fees and services</td><td>$2,504,731</td><td>$2,779,423</td><td>$274,692</td><td>11%</td><td>$3,234,852</td><td>$455,429</td><td>16%</td><td>$730,121</td><td>29%</td><td></td></tr><tr><td>Interest income</td><td>4,180</td><td>69</td><td>(4,111)</td><td>-98%</td><td>578</td><td>509</td><td>738%</td><td>(3,602)</td><td>-86%</td><td></td></tr><tr><td>Other income</td><td>17,085</td><td>5,127</td><td>(11,958)</td><td>-70%</td><td>5,024</td><td>(103)</td><td>-2%</td><td>(12,061)</td><td>-71%</td><td></td></tr><tr><td>Total revenues</td><td>2,525,996</td><td>2,784,619</td><td>258,623</td><td>10%</td><td>3,240,454</td><td>455,835</td><td>16%</td><td>714,458</td><td>28%</td><td></td></tr><tr><td>Property operating expenses</td><td>1,711,882</td><td>1,904,593</td><td>192,711</td><td>11%</td><td>2,255,432</td><td>350,839</td><td>18%</td><td>543,550</td><td>32%</td><td></td></tr><tr><td>NOI(1)</td><td>814,114</td><td>880,026</td><td>65,912</td><td>8%</td><td>985,022</td><td>104,996</td><td>12%</td><td>170,908</td><td>21%</td><td></td></tr><tr><td>Other expenses:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Depreciation and amortization</td><td>415,429</td><td>484,796</td><td>69,367</td><td>17%</td><td>529,449</td><td>44,653</td><td>9%</td><td>114,020</td><td>27%</td><td></td></tr><tr><td>Interest expense</td><td>81,853</td><td>63,265</td><td>(18,588)</td><td>-23%</td><td>69,060</td><td>5,795</td><td>9%</td><td>(12,793)</td><td>-16%</td><td></td></tr><tr><td>Transaction costs(2)</td><td>29,207</td><td>—</td><td>(29,207)</td><td>-100%</td><td>—</td><td>—</td><td>n/a</td><td>(29,207)</td><td>-100%</td><td></td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>(88)</td><td>3,785</td><td>3,873</td><td>-4,401%</td><td>110</td><td>(3,675)</td><td>-97%</td><td>198</td><td>-225%</td><td></td></tr><tr><td>Impairment of assets</td><td>12,403</td><td>21,949</td><td>9,546</td><td>77%</td><td>7,599</td><td>(14,350)</td><td>-65%</td><td>(4,804)</td><td>-39%</td><td></td></tr><tr><td>Other expenses(2)</td><td>—</td><td>8,347</td><td>8,347</td><td>n/a</td><td>6,624</td><td>(1,723)</td><td>-21%</td><td>6,624</td><td>n/a</td><td></td></tr><tr><td></td><td>538,804</td><td>582,142</td><td>43,338</td><td>8%</td><td>612,842</td><td>30,700</td><td>5%</td><td>74,038</td><td>14%</td><td></td></tr><tr><td>Income (loss) from continuing operations before income taxes and other items</td><td>275,310</td><td>297,884</td><td>22,574</td><td>8%</td><td>372,180</td><td>74,296</td><td>25%</td><td>96,870</td><td>35%</td><td></td></tr><tr><td>Income tax benefit (expense)</td><td>(3,762)</td><td>(16,430)</td><td>(12,668)</td><td>337%</td><td>1,202</td><td>17,632</td><td>-107%</td><td>4,964</td><td>-132%</td><td></td></tr><tr><td>Income (loss) from unconsolidated entities</td><td>(20,442)</td><td>(105,236)</td><td>(84,794)</td><td>415%</td><td>(28,142)</td><td>77,094</td><td>-73%</td><td>(7,700)</td><td>38%</td><td></td></tr><tr><td>Gain (loss) on real estate dispositions, net</td><td>9,880</td><td>56,295</td><td>46,415</td><td>470%</td><td>(2,245)</td><td>(58,540)</td><td>-104%</td><td>(12,125)</td><td>-123%</td><td></td></tr><tr><td>Income from continuing operations</td><td>260,986</td><td>232,513</td><td>(28,473)</td><td>-11%</td><td>342,995</td><td>110,482</td><td>48%</td><td>82,009</td><td>31%</td><td></td></tr><tr><td>Net income (loss)</td><td>260,986</td><td>232,513</td><td>(28,473)</td><td>-11%</td><td>342,995</td><td>110,482</td><td>48%</td><td>82,009</td><td>31%</td><td></td></tr><tr><td>Less: Net income (loss) attributable to noncontrolling interests</td><td>2,292</td><td>8,472</td><td>6,180</td><td>270%</td><td>(660)</td><td>(9,132)</td><td>-108%</td><td>(2,952)</td><td>-129%</td><td></td></tr><tr><td>Net income (loss) attributable to common stockholders</td><td>$ 258,694</td><td>$ 224,041</td><td>$ (34,653)</td><td>-13%</td><td>$ 343,655</td><td>$119,614</td><td>53%</td><td>$ 84,961</td><td>33%</td><td></td></tr></table>

(1) See Non-GAAP Financial Measures below.

(2) See Note 3 to our consolidated financial statements.

Fluctuations in resident fees/services and property operating expenses are primarily a result of acquisitions, segment transitions and the movement of U.S. and foreign currency exchange rates. The fluctuations in depreciation and amortization are due to acquisitions and variations in amortization of short-lived intangible assets. To the extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly. The decrease in other income for the year ended December 31, 2018 is primarily a result of insurance proceeds received during 2017 relating to a property as well as a bargain purchase gain recognized in conjunction with a single property acquisition.

During the three years presented, we recorded impairment charges on certain held for sale properties as the carrying value exceeded the estimated fair value less costs to sell. The fluctuations in gains (losses) on real estate dispositions are due to the volume of property sales and sales prices. Beginning January 1, 2017, transaction



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

costs related to asset acquisitions are capitalized as a component of purchase price. The increase in other expenses since 2016 are primarily due to noncapitalizable transaction costs from acquisitions.

During the year ended December 31, 2018, we completed two seniors housing operating construction projects representing $86,931,000 or $459,952 per unit and one expansion project totaling $2,672,000. The following is a summary of our Seniors Housing Operating construction projects, excluding expansions, pending as of December 31, 2018 (dollars in thousands):"

<table><tr><td>Location</td><td>Units/Beds</td><td>Commitment</td><td>Balance</td><td>Est. Completion</td></tr><tr><td>Wandsworth, UK</td><td>98</td><td>$ 75,185</td><td>$41,833</td><td>1Q20</td></tr><tr><td>Potomac, MD</td><td>120</td><td>56,623</td><td>7,627</td><td>4Q20</td></tr><tr><td></td><td>218</td><td>$131,808</td><td>49,460</td><td></td></tr><tr><td>Toronto, ON</td><td>Project in planning stage</td><td></td><td>39,898</td><td></td></tr><tr><td></td><td></td><td></td><td>$89,358</td><td></td></tr></table>

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 the volume of extinguishments and terms of the related secured debt. The following is a summary of our Seniors Housing Operating property secured debt principal activity (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31, 2016</td><td colspan="3">Year Ended December 31, 2017</td><td colspan="3">Year Ended December 31, 2018</td></tr><tr><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg.Interest Rate</td><td>Amount</td><td>Weighted Avg.Interest Rate</td><td></td></tr><tr><td>Beginning balance</td><td>$2,290,552</td><td>3.96%</td><td>$2,463,249</td><td>3.94%</td><td>$1,988,700</td><td>3.66%</td><td></td><td></td><td></td></tr><tr><td>Debt transferred in</td><td>—</td><td>—%</td><td>—</td><td>—%</td><td>35,830</td><td>3.84%</td><td></td><td></td><td></td></tr><tr><td>Debt issued</td><td>293,860</td><td>2.90%</td><td>228,772</td><td>2.72%</td><td>45,447</td><td>3.40%</td><td></td><td></td><td></td></tr><tr><td>Debt assumed</td><td>60,898</td><td>4.30%</td><td>—</td><td>—%</td><td>121,612</td><td>5.55%</td><td></td><td></td><td></td></tr><tr><td>Debt extinguished</td><td>(159,498)</td><td>3.66%</td><td>(668,804)</td><td>4.81%</td><td>(240,095)</td><td>4.83%</td><td></td><td></td><td></td></tr><tr><td>Debt deconsolidated</td><td>—</td><td>—%</td><td>(60,000)</td><td>3.80%</td><td>—</td><td>0.00%</td><td></td><td></td><td></td></tr><tr><td>Principal payments</td><td>(49,112)</td><td>3.89%</td><td>(47,153)</td><td>3.60%</td><td>(47,886)</td><td>3.59%</td><td></td><td></td><td></td></tr><tr><td>Foreign currency</td><td>26,549</td><td>3.48%</td><td>72,636</td><td>3.23%</td><td>(93,021)</td><td>3.31%</td><td></td><td></td><td></td></tr><tr><td>Ending balance</td><td>$2,463,249</td><td>3.94%</td><td>$1,988,700</td><td>3.66%</td><td>$1,810,587</td><td>3.87%</td><td></td><td></td><td></td></tr><tr><td>Monthly averages</td><td>$2,391,706</td><td>3.93%</td><td>$2,065,477</td><td>3.66%</td><td>$1,915,663</td><td>3.74%</td><td></td><td></td><td></td></tr></table>

The majority of our seniors housing operating properties are formed through partnership interests. The fluctuations in income (loss) from unconsolidated entities are largely due to the recognition of impairments related to one of our investments in unconsolidated entities during the year ended December 31, 2017. Losses are also attributable to depreciation and amortization of short-lived intangible assets related to certain investments in unconsolidated joint ventures. Net income attributable to noncontrolling interests represents our partners' share of net income (loss) related to joint ventures.



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

## Triple-net

The following is a summary of our NOI and SSNOI for the Triple-net segment for the periods presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2">Year Ended December 31, 2018</td><td colspan="2">One Year Change</td><td colspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>$</td><td>%</td><td>$</td><td>%</td><td>$</td><td>%</td></tr><tr><td>NOI</td><td>$1,208,860</td><td>$ 967,084</td><td>$241,776)</td><td>-20%</td><td>$ 900,049</td><td>$67,035)</td><td>-7%</td><td>$308,811)</td><td>-26%</td></tr><tr><td>Non-cash NOI attributable to same store properties(1)</td><td>(28,538)</td><td>(23,764)</td><td>4,774</td><td>-17%</td><td>(17,093)</td><td>6,671</td><td>-28%</td><td>11,445</td><td>-40%</td></tr><tr><td>NOI attributable to non same store properties(2)</td><td>(709,606)</td><td>(465,820)</td><td>243,786</td><td>-34%</td><td>(401,878)</td><td>63,942</td><td>-14%</td><td>307,728</td><td>-43%</td></tr><tr><td>SSNOI(1)</td><td>$ 470,716</td><td>$ 477,500</td><td>$ 6,784</td><td>1%</td><td>$ 481,078</td><td>$ 3,578</td><td>1%</td><td>$ 10,362</td><td>2%</td></tr></table>

(1) Relates to 364 same store properties.

(2) Primarily relates to the acquisition of 264 properties and 40 properties sold or held for sale at December 31, 2018.



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a summary of our results of operations for the Triple-net segment for the years presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>$</td><td>%</td><td>December 31, 2018</td><td>$</td><td>%</td><td>$</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Rental income</td><td>$1,112,325</td><td>$885,811</td><td>$(26,514)</td><td>-20%</td><td>$828,865</td><td>$ (56,946)</td><td>-6%</td><td>$(283,460)</td><td>-25%</td></tr><tr><td>Interest income</td><td>90,476</td><td>73,742</td><td>(16,734)</td><td>-18%</td><td>54,926</td><td>(18,816)</td><td>-26%</td><td>(35,550)</td><td>-39%</td></tr><tr><td>Other income</td><td>6,059</td><td>7,531</td><td>1,472</td><td>24%</td><td>17,173</td><td>9,642</td><td>128%</td><td>11,114</td><td>183%</td></tr><tr><td>Total revenues</td><td>1,208,860</td><td>967,084</td><td>(241,776)</td><td>-20%</td><td>900,964</td><td>(66,120)</td><td>-7%</td><td>(307,896)</td><td>-25%</td></tr><tr><td>Property operating expenses</td><td>—</td><td>—</td><td>—</td><td>n/a</td><td>915</td><td>915</td><td>n/a</td><td>(915)</td><td>n/a</td></tr><tr><td>NOI(1)</td><td>1,208,860</td><td>967,084</td><td>(241,776)</td><td>-20%</td><td>900,049</td><td>(67,035)</td><td>-7%</td><td>(306,981)</td><td>-25%</td></tr><tr><td>Other expenses:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Depreciation and amortization</td><td>297,197</td><td>243,830</td><td>(53,367)</td><td>-18%</td><td>235,480</td><td>(8,350)</td><td>-3%</td><td>(61,717)</td><td>-21%</td></tr><tr><td>Interest expense</td><td>21,370</td><td>15,194</td><td>(6,176)</td><td>-29%</td><td>14,225</td><td>(969)</td><td>-6%</td><td>(7,145)</td><td>-33%</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>68</td><td>2,284</td><td>2,216</td><td>3,259%</td><td>(4,016)</td><td>(6,300)</td><td>-276%</td><td>(4,084)</td><td>-6,006%</td></tr><tr><td>Transaction costs(2)</td><td>10,016</td><td>—</td><td>(10,016)</td><td>-100%</td><td>—</td><td>—</td><td>n/a</td><td>(10,016)</td><td>-100%</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>863</td><td>29,083</td><td>28,220</td><td>3,270%</td><td>(32)</td><td>(29,115)</td><td>-100%</td><td>(895)</td><td>-104%</td></tr><tr><td>Provision for loan losses</td><td>6,935</td><td>62,966</td><td>56,031</td><td>808%</td><td>—</td><td>(62,966)</td><td>-100%</td><td>(6,935)</td><td>-100%</td></tr><tr><td>Impairment of assets</td><td>20,169</td><td>96,909</td><td>76,740</td><td>380%</td><td>107,980</td><td>11,071</td><td>11%</td><td>87,811</td><td>435%</td></tr><tr><td>Other expenses(2)</td><td>—</td><td>116,689</td><td>116,689</td><td>n/a</td><td>90,975</td><td>(25,714)</td><td>-22%</td><td>90,975</td><td>n/a</td></tr><tr><td></td><td>356,618</td><td>566,955</td><td>210,337</td><td>59%</td><td>444,612</td><td>(122,343)</td><td>-22%</td><td>87,994</td><td>25%</td></tr><tr><td>Income from continuing operations before income taxes and other items</td><td>852,242</td><td>400,129</td><td>(452,113)</td><td>-53%</td><td>455,437</td><td>55,308</td><td>14%</td><td>(396,805)</td><td>-47%</td></tr><tr><td>Income tax benefit (expense)</td><td>(1,087)</td><td>(4,291)</td><td>(3,204)</td><td>295%</td><td>1,611</td><td>5,902</td><td>-138%</td><td>2,698</td><td>-248%</td></tr><tr><td>Income (loss) from unconsolidated entities</td><td>9,767</td><td>19,428</td><td>9,661</td><td>99%</td><td>21,938</td><td>2,510</td><td>13%</td><td>12,171</td><td>125%</td></tr><tr><td>Gain (loss) on real estate dispositions, net</td><td>355,394</td><td>286,325</td><td>(69,069)</td><td>-19%</td><td>196,589</td><td>(89,736)</td><td>-31%</td><td>(158,805)</td><td>-45%</td></tr><tr><td>Income from continuing operations</td><td>1,216,316</td><td>701,591</td><td>(514,725)</td><td>-42%</td><td>675,575</td><td>(26,016)</td><td>-4%</td><td>(540,741)</td><td>-44%</td></tr><tr><td>Net income</td><td>1,216,316</td><td>701,591</td><td>(514,725)</td><td>-42%</td><td>675,575</td><td>(26,016)</td><td>-4%</td><td>(540,741)</td><td>-44%</td></tr><tr><td>Less: Net income attributable to noncontrolling interests</td><td>1,221</td><td>4,603</td><td>3,382</td><td>277%</td><td>19,306</td><td>14,703</td><td>319%</td><td>18,085</td><td>1,481%</td></tr><tr><td>Net income attributable to common stockholders</td><td>$1,215,095</td><td>$696,988</td><td>$(518,107)</td><td>-43%</td><td>$656,269</td><td>$(40,719)</td><td>-6%</td><td>$(558,826)</td><td>-46%</td></tr></table>

(1) See Non-GAAP Financial Measures below.

(2) See Note 3 to our consolidated financial statements.

The 2017 and 2018 decreases in rental income are primarily attributable to the disposition of properties exceeding new acquisitions, segment transitions and the reduction in the Genesis HealthCare (“Genesis”) annual cash rent obligation due to the restructuring of the master lease as of January 1, 2018. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index (“CPI”) 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 CPI do not increase, a portion of our revenues



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

may not continue to increase. Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income. For the three months ended December 31, 2018, we had 17 leases with rental rate increases ranging from 0.18% to 0.76% in our triple-net portfolio. The decrease in interest income is primarily attributable to the volume of loan payoffs during the three years presented. The increase in other income for the year ended December 31, 2018 is primarily due to $10,805,000 of net lease termination fees recognized.

Depreciation and amortization decreased primarily as a result of the disposition of triple-net properties exceeding acquisition and segment transitions. To the extent we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.

The provision for loan losses is related to our critical accounting estimate for the allowance for loan losses and is discussed in “Critical Accounting Policies” below and Note 6 to our consolidated financial statements. During the years ended December 31, 2017 and 2016, we recorded provision for loan losses related to certain first mortgage loans to Genesis of $62,966,000 and $6,935,000, respectively.

During the three years presented, we recorded impairment charges on certain held for sale properties as the carrying value exceeded the estimated fair value less costs to sell. The fluctuations in gains on real estate dispositions are due to the volume of property sales and sales prices. Beginning January 1, 2017, transaction costs related to asset acquisitions are capitalized as a component of purchase price.

Other expenses primarily represent noncapitalizable transaction costs from acquisitions, segment transitions and the termination/restructuring of pre-existing relationships. In addition, during the year ended December 31, 2017, we recognized an other than temporary charge of $18,294,000 in other expenses on the Genesis available-for-sale equity investment.

During the year ended December 31, 2018, we completed two triple-net construction projects totaling $90,055,000 or $283,472 per bed/unit and two expansion projects totaling $17,357,000. The following is a summary of triple-net construction projects, excluding expansions, pending as of December 31, 2018 (dollars in thousands):

<table><tr><td>Location</td><td>Units/Beds</td><td>Commitment</td><td>Balance</td><td>Est. Completion</td></tr><tr><td>Westerville, OH</td><td>90</td><td>$22,800</td><td>$ 8,160</td><td>3Q19</td></tr><tr><td>Union, KY</td><td>162</td><td>34,600</td><td>9,848</td><td>1Q20</td></tr><tr><td>Droitwich, UK</td><td>70</td><td>16,153</td><td>4,573</td><td>4Q20</td></tr><tr><td>Total</td><td>322</td><td>$73,553</td><td>$22,581</td><td></td></tr></table>



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Total 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 fluctuations in loss (gain) on extinguishment of debt is primarily attributable to the volume of extinguishments and terms of the related secured debt. The fluctuation in loss (gain) on derivatives and financial instruments, net is primarily attributable to the mark-to-market adjustment recorded on the Genesis available-for-sale investment in accordance with the adoption of Accounting Standards Update 2016-01 described in Note 2 to our consolidated financial statements. The following is a summary of our Triple-net secured debt principal activity for the periods presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="6">Year Ended December 31, 2016</td></tr><tr><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg.Interest Rate</td></tr><tr><td>Beginning balance</td><td>$ 554,014</td><td>5.49%</td><td>$ 594,199</td><td>4.58%</td><td>$347,474</td><td>3.55%</td></tr><tr><td>Debt issued</td><td>166,155</td><td>2.21%</td><td>13,000</td><td>4.57%</td><td>—</td><td>—%</td></tr><tr><td>Debt extinguished</td><td>(118,500)</td><td>5.56%</td><td>(274,048)</td><td>5.95%</td><td>(4,107)</td><td>4.94%</td></tr><tr><td>Debt transferred out</td><td>—</td><td>—%</td><td>—</td><td>—%</td><td>(35,830)</td><td>3.84%</td></tr><tr><td>Principal payments</td><td>(10,627)</td><td>5.68%</td><td>(5,863)</td><td>5.66%</td><td>(3,982)</td><td>5.38%</td></tr><tr><td>Foreign currency</td><td>3,157</td><td>5.25%</td><td>20,186</td><td>2.91%</td><td>(15,169)</td><td>3.44%</td></tr><tr><td>Ending balance</td><td>$ 594,199</td><td>4.58%</td><td>$ 347,474</td><td>3.55%</td><td>$288,386</td><td>3.63%</td></tr><tr><td>Monthly averages</td><td>$ 497,213</td><td>5.41%</td><td>$ 408,688</td><td>3.91%</td><td>$321,730</td><td>3.51%</td></tr></table>

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. Net income attributable to noncontrolling interests represents our partners' share of net income relating to those partnerships where we are the controlling partner.

## Outpatient Medical

The following is a summary of our NOI and SSNOI for the Outpatient Medical segment for the periods presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>$</td><td>%</td><td>December 31, 2018</td><td>$</td><td>%</td><td>$</td></tr><tr><td>NOI</td><td>$380,264</td><td>$384,068</td><td>$ 3,804</td><td>1%</td><td>$380,136</td><td>$ (3,932)</td><td>-1%</td><td>(128)</td><td>—%</td></tr><tr><td>Non-cash NOI attributable to same store properties(1)</td><td>(8,190)</td><td>(7,694)</td><td>496</td><td>-6%</td><td>(8,226)</td><td>(532)</td><td>7%</td><td>(36)</td><td>—%</td></tr><tr><td>NOI attributable to non same store properties(2)</td><td>(53,220)</td><td>(58,076)</td><td>(4,856)</td><td>9%</td><td>(35,619)</td><td>22,457</td><td>-39%</td><td>17,601</td><td>-33%</td></tr><tr><td>SSNOI(1)</td><td>$318,854</td><td>$318,298</td><td>(556)</td><td>—%</td><td>$336,291</td><td>$17,993</td><td>6%</td><td>$17,437</td><td>5%</td></tr></table>

(1) Relates to 212 same store properties.

(2) Primarily relates to the acquisition of 48 properties and the conversion of 15 construction projects into revenue-generating properties subsequent to January 1, 2016.



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a summary of our results of operations for the Outpatient Medical segment for the periods presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td rowspan="2">One Year Change</td><td rowspan="2">Year Ended December 31, 2018</td><td colspan="2">One Year Change</td><td colspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>%</td><td>%</td><td>%</td><td>%</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Rental income</td><td>$536,490</td><td>$560,060</td><td>$23,570</td><td>4%</td><td>$551,557</td><td>$ (8,503)</td><td>-2%</td><td>$ 15,067</td></tr><tr><td>Interest income</td><td>3,307</td><td>—</td><td>(3,307)</td><td>-100%</td><td>310</td><td>310</td><td>n/a</td><td>(2,997)</td></tr><tr><td>Other income</td><td>5,568</td><td>3,340</td><td>(2,228)</td><td>-40%</td><td>4,939</td><td>1,599</td><td>48%</td><td>(629)</td></tr><tr><td>Total revenues</td><td>545,365</td><td>563,400</td><td>18,035</td><td>3%</td><td>556,806</td><td>(6,594)</td><td>-1%</td><td>11,441</td></tr><tr><td>Property operating expenses</td><td>165,101</td><td>179,332</td><td>14,231</td><td>9%</td><td>176,670</td><td>(2,662)</td><td>-1%</td><td>11,569</td></tr><tr><td>NOI \( ^{(1)} \)</td><td>380,264</td><td>384,068</td><td>3,804</td><td>1%</td><td>380,136</td><td>(3,932)</td><td>-1%</td><td>(128)</td></tr><tr><td>Other expenses:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Depreciation and amortization</td><td>188,616</td><td>193,094</td><td>4,478</td><td>2%</td><td>185,530</td><td>(7,564)</td><td>-4%</td><td>(3,086)</td></tr><tr><td>Interest expense</td><td>19,087</td><td>10,015</td><td>(9,072)</td><td>-48%</td><td>7,051</td><td>(2,964)</td><td>-30%</td><td>(12,036)</td></tr><tr><td>Transaction costs \( ^{(2)} \)</td><td>3,687</td><td>—</td><td>(3,687)</td><td>-100%</td><td>—</td><td>—</td><td>n/a</td><td>(3,687)</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>—</td><td>4,373</td><td>4,373</td><td>n/a</td><td>11,928</td><td>7,555</td><td>173%</td><td>11,928</td></tr><tr><td>Provision for loan losses</td><td>3,280</td><td>—</td><td>(3,280)</td><td>-100%</td><td>—</td><td>—</td><td>n/a</td><td>(3,280)</td></tr><tr><td>Impairment of assets</td><td>4,635</td><td>5,625</td><td>990</td><td>21%</td><td>—</td><td>(5,625)</td><td>-100%</td><td>(4,635)</td></tr><tr><td>Other expenses \( ^{(2)} \)</td><td>—</td><td>1,911</td><td>1,911</td><td>n/a</td><td>7,570</td><td>5,659</td><td>296%</td><td>7,570</td></tr><tr><td></td><td>219,305</td><td>215,018</td><td>(4,287)</td><td>-2%</td><td>212,079</td><td>(2,939)</td><td>-1%</td><td>(7,226)</td></tr><tr><td>Income from continuing operations before income taxes and other item</td><td>160,959</td><td>169,050</td><td>8,091</td><td>5%</td><td>168,057</td><td>(993)</td><td>-1%</td><td>7,098</td></tr><tr><td>Income tax benefit (expense)</td><td>(511)</td><td>(1,477)</td><td>(966)</td><td>189%</td><td>(125)</td><td>1,352</td><td>-92%</td><td>386</td></tr><tr><td>Income (loss) from unconsolidated entities</td><td>318</td><td>2,683</td><td>2,365</td><td>744%</td><td>5,563</td><td>2,880</td><td>107%</td><td>5,245</td></tr><tr><td>Gain (loss) on real estate dispositions, net</td><td>(1,228)</td><td>1,630</td><td>2,858</td><td>n/a</td><td>221,231</td><td>219,601</td><td>13,472%</td><td>222,459</td></tr><tr><td>Income from continuing operations</td><td>159,538</td><td>171,886</td><td>9,490</td><td>6%</td><td>394,726</td><td>3,239</td><td>2%</td><td>12,729</td></tr><tr><td>Net income (loss)</td><td>159,538</td><td>171,886</td><td>12,348</td><td>8%</td><td>394,726</td><td>222,840</td><td>130%</td><td>235,188</td></tr><tr><td>Less: Net income (loss) attributable to noncontrolling interests</td><td>768</td><td>4,765</td><td>3,997</td><td>520%</td><td>6,150</td><td>1,385</td><td>29%</td><td>5,382</td></tr><tr><td>Net income (loss) attributable to common stockholders</td><td>$158,770</td><td>$167,121</td><td>$ 8,351</td><td>5%</td><td>$388,576</td><td>$221,455</td><td>133%</td><td>$229,806</td></tr></table>

(1) See Non-GAAP Financial Measures below.

(2) See Note 3 to our consolidated financial statements.

The fluctuations in rental income are primarily attributable to the acquisitions of new properties and the conversion of newly constructed outpatient medical properties, offset by dispositions. Certain of our leases contain annual rental escalators that are contingent upon changes in the CPI. 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 CPI does not increase, a portion of our revenues may not continue to increase. Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income. For the three months ended December 31, 2018, our consolidated outpatient medical portfolio signed 77,850 square feet of new leases and 184,349 square feet of renewals. The weighted-average term of these leases was seven years, with a rate of $36.23 per square foot and tenant improvement and lease commission costs of $21.90 per



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

square foot. Substantially all of these leases contain an annual fixed or contingent escalation rent structure ranging from 2.0% to 3.9%.

The fluctuation in property operating expenses and depreciation and amortization are primarily attributable to acquisitions and construction conversions of new 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 2016 and 2017, we recognized impairment charges related to certain 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.

During the year ended December 31, 2018, we completed one outpatient medical construction project representing $11,358,000 or $296 per square foot. The following is a summary of outpatient medical construction projects pending as of December 31, 2018 (dollars in thousands):

<table><tr><td>Location</td><td>Square Feet</td><td>Commitment</td><td>Balance</td><td>Est. Completion</td></tr><tr><td>Brooklyn, NY</td><td>140,955</td><td>$105,306</td><td>$58,390</td><td>3Q19</td></tr><tr><td>Houston, TX</td><td>73,500</td><td>23,455</td><td>5,097</td><td>4Q19</td></tr><tr><td>Porter, TX</td><td>55,000</td><td>20,800</td><td>4,198</td><td>4Q19</td></tr><tr><td>Total</td><td>269,455</td><td>$149,561</td><td>$67,685</td><td></td></tr></table>

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 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 Outpatient Medical secured debt principal activity for the periods presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31, 2016</td><td colspan="3">Year Ended December 31, 2017</td><td colspan="3">Year Ended December 31, 2018</td></tr><tr><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg.</td><td>Amount</td><td>Weighted Avg. Interest Rate</td><td></td></tr><tr><td>Beginning balance</td><td>$ 627,689</td><td>5.18%</td><td>$ 404,079</td><td>4.85%</td><td>$279,951</td><td>4.72%</td><td></td><td></td><td></td></tr><tr><td>Debt assumed</td><td>—</td><td>—%</td><td>23,094</td><td>6.67%</td><td>171,275</td><td>3.99%</td><td></td><td></td><td></td></tr><tr><td>Debt extinguished</td><td>(210,115)</td><td>5.97%</td><td>(137,416)</td><td>5.99%</td><td>(61,291)</td><td>7.43%</td><td></td><td></td><td></td></tr><tr><td>Principal payments</td><td>(13,495)</td><td>6.55%</td><td>(9,806)</td><td>6.85%</td><td>(3,197)</td><td>5.91%</td><td></td><td></td><td></td></tr><tr><td>Ending balance</td><td>$ 404,079</td><td>4.85%</td><td>$ 279,951</td><td>4.72%</td><td>$386,738</td><td>4.20%</td><td></td><td></td><td></td></tr><tr><td>Monthly averages</td><td>$ 536,774</td><td>5.11%</td><td>$ 294,694</td><td>4.62%</td><td>$238,214</td><td>4.25%</td><td></td><td></td><td></td></tr></table>

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.



## 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):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>$</td><td>%</td><td>December 31, 2018</td><td>$</td><td>%</td><td>$</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other income</td><td>$ 939</td><td>$ 1,538</td><td>$ 599</td><td>64%</td><td>$ 2,275</td><td>$ 737</td><td>48%</td><td>$ 1,336</td><td>142%</td></tr><tr><td>Expenses:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest expense</td><td>399,035</td><td>396,148</td><td>(2,887)</td><td>-1%</td><td>436,256</td><td>40,108</td><td>10%</td><td>37,221</td><td>9%</td></tr><tr><td>General and administrative expenses</td><td>155,241</td><td>122,008</td><td>(33,233)</td><td>-21%</td><td>126,383</td><td>4,375</td><td>4%</td><td>(28,858)</td><td>-19%</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>(2,516)</td><td>—</td><td>2,516</td><td>-100%</td><td>—</td><td>—</td><td>n/a</td><td>2,516</td><td>-100%</td></tr><tr><td>Loss (gain) on extinguishments of debt, net</td><td>16,439</td><td>—</td><td>(16,439)</td><td>-100%</td><td>4,091</td><td>4,091</td><td>n/a</td><td>(12,348)</td><td>-75%</td></tr><tr><td>Other expenses</td><td>11,998</td><td>50,829</td><td>38,831</td><td>324%</td><td>7,729</td><td>(43,100)</td><td>-85%</td><td>(4,269)</td><td>-36%</td></tr><tr><td>Total expenses</td><td>580,197</td><td>568,985</td><td>(11,212)</td><td>-2%</td><td>574,459</td><td>5,474</td><td>1%</td><td>(5,738)</td><td>-1%</td></tr><tr><td>Loss from continuing operations before income taxes</td><td>(579,258)</td><td>(567,447)</td><td>11,811</td><td>-2%</td><td>(572,184)</td><td>(4,737)</td><td>1%</td><td>7,074</td><td>-1%</td></tr><tr><td>Income tax benefit (expense)</td><td>24,488</td><td>2,070</td><td>(22,418)</td><td>-92%</td><td>(11,362)</td><td>(13,432)</td><td>n/a</td><td>(35,850)</td><td>n/a</td></tr><tr><td>Net loss</td><td>(554,770)</td><td>(565,377)</td><td>(10,607)</td><td>2%</td><td>(583,546)</td><td>(18,169)</td><td>3%</td><td>(28,776)</td><td>5%</td></tr><tr><td>Preferred stock dividends</td><td>65,406</td><td>49,410</td><td>(15,996)</td><td>-24%</td><td>46,704</td><td>(2,706)</td><td>-5%</td><td>(18,702)</td><td>-29%</td></tr><tr><td>Preferred stock redemption charge</td><td>—</td><td>9,769</td><td>9,769</td><td>n/a</td><td>—</td><td>(9,769)</td><td>-100%</td><td>—</td><td>n/a</td></tr><tr><td>Net loss attributable to common stockholders</td><td>$ (620,176)</td><td>$ (624,556)</td><td>$ (4,380)</td><td>1%</td><td>$ (630,250)</td><td>$ (5,694)</td><td>1%</td><td>$ (10,074)</td><td>2%</td></tr></table>

The following is a summary of our non-segment/corporate interest expense for the periods presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td colspan="2">Year Ended</td><td colspan="2">One Year Change</td><td rowspan="2">Two Year Change</td></tr><tr><td>December 31, 2016</td><td>December 31, 2017</td><td>$</td><td>%</td><td>December 31, 2018</td><td>$</td><td>%</td><td>$</td></tr><tr><td>Senior unsecured notes</td><td>$368,775</td><td>$364,773</td><td>$ (4,002)</td><td>-1%</td><td>$387,955</td><td>$23,182</td><td>6%</td><td>$19,180</td><td>5%</td></tr><tr><td>Secured debt</td><td>310</td><td>127</td><td>(183)</td><td>-59%</td><td>115</td><td>(12)</td><td>-9%</td><td>(195)</td><td>-63%</td></tr><tr><td>Primary unsecured credit facility</td><td>16,811</td><td>17,863</td><td>1,052</td><td>6%</td><td>34,626</td><td>16,763</td><td>94%</td><td>17,815</td><td>106%</td></tr><tr><td>Loan expense</td><td>13,139</td><td>13,385</td><td>246</td><td>2%</td><td>13,560</td><td>175</td><td>1%</td><td>421</td><td>3%</td></tr><tr><td>Totals</td><td>$399,035</td><td>$396,148</td><td>$ (2,887)</td><td>-1%</td><td>$436,256</td><td>$ 40,108</td><td>10%</td><td>$37,221</td><td>9%</td></tr></table>

The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments. Please refer to Note 10 to consolidated financial statements for additional information. The change in interest expense on our primary unsecured credit facility is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes. Please refer to Note 9 of our consolidated financial statements for additional information regarding our primary unsecured credit facility. Loan expenses represent the amortization of costs incurred in connection with senior unsecured notes issuances. The loss on extinguishment of debt in 2016 is due to the early extinguishment of the 2017 senior unsecured notes. The loss



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

on extinguishment of debt in 2018 is due to the term loan facility drawn on in July 2018 and paid off in August 2018.

General and administrative expenses as a percentage of consolidated revenues for the years ended December 31, 2018, 2017 and 2016 were 2.69%, 2.83% and 3.63%, respectively. The decrease in general and administrative expenses since 2016 is primarily related to a reduction in professional service fees for tax and legal consulting and compensation costs as a result of execution of our strategic initiatives.

Other expenses for 2017 primarily represents $40,730,000 of costs related to finalization of an agreement with the University of Toledo Foundation to transfer our corporate headquarters as a donation. Other expenses for all years also includes severance-related costs associated with the departure of certain executive officers and key employees.

The fluctuations in income taxes are primarily due to benefits recognized in the year ended December 31, 2016 related to the release of a valuation allowance reserve on a taxable subsidiary and the restructuring of an unconsolidated investment. The decrease in preferred dividends and the preferred stock redemption charge are due to the redemption of our 6.5% Series J preferred stock during the three months ended March 31, 2017.

## 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 seniors housing operating and outpatient medical facility 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. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the reporting period subsequent to January 1, 2016. Land parcels, loans and sub-leases, as well as any properties acquired, developed /redeveloped, transitioned, sold or classified as held for sale during that period are excluded from the same store amounts. 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 stands for earnings (net income) before interest, taxes, depreciation and amortization. We believe that EBITDA, along with net income and cash flow provided from operating activities, is an important



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

supplemental measure because it provides additional information to assess and evaluate the performance of our operations. We primarily utilize EBITDA to measure our interest coverage ratio, which represents EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization, and preferred dividends. Covenants in our senior unsecured notes and primary unsecured credit facility contain financial ratios based on a definition of EBITDA that is specific to those agreements. Failure to satisfy these covenants could result in an event of default that could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. Due to the materiality of these debt agreements and the financial covenants, we have disclosed Adjusted EBITDA, which represents EBITDA as defined above excluding unconsolidated entities and adjusted for items per our covenant. We use Adjusted EBITDA to measure our adjusted fixed charge coverage ratio, which represents Adjusted EBITDA divided by fixed charges on a trailing twelve months basis. Fixed charges include total interest (excluding capitalized interest and non-cash interest expenses), secured debt principal amortization and preferred dividends. Our covenant requires an adjusted fixed charge coverage ratio of at least 1.50 times.

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/loss on real estate dispositions and impairments of assets. Amounts are in thousands except for per share data.

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended December 31,</td></tr><tr><td>2016</td><td>2017</td><td>2018</td><td></td></tr><tr><td>FFO Reconciliation:</td><td></td><td></td><td></td><td></td></tr><tr><td>Net income attributable to common stockholders</td><td>$1,012,397</td><td>$ 463,595</td><td>$ 758,250</td><td></td></tr><tr><td>Depreciation and amortization</td><td>901,242</td><td>921,720</td><td>950,459</td><td></td></tr><tr><td>Impairment of assets</td><td>37,207</td><td>124,483</td><td>115,579</td><td></td></tr><tr><td>Loss (gain) on real estate dispositions, net</td><td>(364,046)</td><td>(344,250)</td><td>(415,575)</td><td></td></tr><tr><td>Noncontrolling interests</td><td>(71,527)</td><td>(60,018)</td><td>(69,193)</td><td></td></tr><tr><td>Unconsolidated entities</td><td>67,667</td><td>60,046</td><td>52,663</td><td></td></tr><tr><td>Funds from operations attributable to common stockholders</td><td>$1,582,940</td><td>$1,165,576</td><td>$1,392,183</td><td></td></tr><tr><td>Average common shares outstanding:</td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>358,275</td><td>367,237</td><td>373,620</td><td></td></tr><tr><td>Diluted</td><td>360,227</td><td>369,001</td><td>375,250</td><td></td></tr><tr><td>Per share data:</td><td></td><td></td><td></td><td></td></tr><tr><td>Net income attributable to common stockholders</td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$ 2.83</td><td>$ 1.26</td><td>$ 2.03</td><td></td></tr><tr><td>Diluted</td><td>2.81</td><td>1.26</td><td>2.02</td><td></td></tr><tr><td>Funds from operations attributable to common stockholders</td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$ 4.42</td><td>$ 3.17</td><td>$ 3.73</td><td></td></tr><tr><td>Diluted</td><td>4.39</td><td>3.16</td><td>3.71</td><td></td></tr></table>



## 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.

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2016</td><td>2017</td><td>2018</td></tr><tr><td>Adjusted EBITDA Reconciliation:</td><td></td><td></td><td></td></tr><tr><td>Net income</td><td>$1,082,070</td><td>$ 540,613</td><td>$ 829,750</td></tr><tr><td>Interest expense</td><td>521,345</td><td>484,622</td><td>526,592</td></tr><tr><td>Income tax expense (benefit)</td><td>(19,128)</td><td>20,128</td><td>8,674</td></tr><tr><td>Depreciation and amortization</td><td>901,242</td><td>921,720</td><td>950,459</td></tr><tr><td>EBITDA</td><td>2,485,529</td><td>1,967,083</td><td>2,315,475</td></tr><tr><td>Loss (income) from unconsolidated entities</td><td>10,357</td><td>83,125</td><td>641</td></tr><tr><td>Transaction costs</td><td>42,910</td><td>—</td><td>—</td></tr><tr><td>Stock-based compensation expense(1)</td><td>28,869</td><td>19,102</td><td>27,646</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>17,214</td><td>37,241</td><td>16,097</td></tr><tr><td>Loss (gain) on real estate dispositions, net</td><td>(364,046)</td><td>(344,250)</td><td>(415,575)</td></tr><tr><td>Impairment of assets</td><td>37,207</td><td>124,483</td><td>115,579</td></tr><tr><td>Provision for loan losses</td><td>10,215</td><td>62,966</td><td>—</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>(2,448)</td><td>2,284</td><td>(4,016)</td></tr><tr><td>Other expenses(1)</td><td>7,721</td><td>176,395</td><td>111,990</td></tr><tr><td>Additional other income</td><td>(16,664)</td><td>—</td><td>(14,832)</td></tr><tr><td>Adjusted EBITDA</td><td>$2,256,864</td><td>$2,128,429</td><td>$2,153,005</td></tr><tr><td>Adjusted Interest Coverage Ratio:</td><td></td><td></td><td></td></tr><tr><td>Interest expense</td><td>$ 521,345</td><td>$ 484,622</td><td>$ 526,592</td></tr><tr><td>Capitalized interest</td><td>16,943</td><td>13,489</td><td>7,905</td></tr><tr><td>Non-cash interest expense</td><td>(1,681)</td><td>(10,359)</td><td>(10,860)</td></tr><tr><td>Total interest</td><td>536,607</td><td>487,752</td><td>523,637</td></tr><tr><td>Adjusted EBITDA</td><td>$2,256,864</td><td>$2,128,429</td><td>$2,153,005</td></tr><tr><td>Adjusted interest coverage ratio</td><td>4.21x</td><td>4.36x</td><td>4.11x</td></tr><tr><td>Adjusted Fixed Charge Coverage Ratio:</td><td></td><td></td><td></td></tr><tr><td>Total interest</td><td>$ 536,607</td><td>$ 487,752</td><td>$ 523,637</td></tr><tr><td>Secured debt principal payments</td><td>74,466</td><td>64,078</td><td>56,288</td></tr><tr><td>Preferred dividends</td><td>65,406</td><td>49,410</td><td>46,704</td></tr><tr><td>Total fixed charges</td><td>676,479</td><td>601,240</td><td>626,629</td></tr><tr><td>Adjusted EBITDA</td><td>$2,256,864</td><td>$2,128,429</td><td>$2,153,005</td></tr><tr><td>Adjusted fixed charge coverage ratio</td><td>3.34x</td><td>3.54x</td><td>3.44x</td></tr></table>

(1) Certain severance-related costs are included in stock-based compensation and excluded from other expenses.

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



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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.

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended December 31,</td></tr><tr><td>2016</td><td>2017</td><td>2018</td><td></td></tr><tr><td>Book capitalization:</td><td></td><td></td><td></td><td></td></tr><tr><td>Borrowings under primary unsecured credit facility</td><td>$ 645,000</td><td>$ 719,000</td><td>$ 1,147,000</td><td></td></tr><tr><td>Long-term debt obligations(1)</td><td>11,713,245</td><td>11,012,936</td><td>12,150,144</td><td></td></tr><tr><td>Cash and cash equivalents(2)</td><td>(557,659)</td><td>(249,620)</td><td>(215,376)</td><td></td></tr><tr><td>Total net debt</td><td>11,800,586</td><td>11,482,316</td><td>13,081,768</td><td></td></tr><tr><td>Total equity and noncontrolling interests(3)</td><td>15,679,905</td><td>15,300,646</td><td>16,010,645</td><td></td></tr><tr><td>Book capitalization</td><td>$27,480,491</td><td>$26,782,962</td><td>$29,092,413</td><td></td></tr><tr><td>Net debt to book capitalization ratio</td><td>42.9%</td><td>42.9%</td><td>45.0%</td><td></td></tr><tr><td>Undepreciated book capitalization:</td><td></td><td></td><td></td><td></td></tr><tr><td>Total net debt</td><td>$11,800,586</td><td>$11,482,316</td><td>$13,081,768</td><td></td></tr><tr><td>Accumulated depreciation and amortization</td><td>4,093,494</td><td>4,838,370</td><td>5,499,958</td><td></td></tr><tr><td>Total equity and noncontrolling interests(3)</td><td>15,679,905</td><td>15,300,646</td><td>16,010,645</td><td></td></tr><tr><td>Undepreciated book capitalization</td><td>$31,573,985</td><td>$31,621,332</td><td>$34,592,371</td><td></td></tr><tr><td>Net debt to undepreciated book capitalization ratio</td><td>37.4%</td><td>36.3%</td><td>37.8%</td><td></td></tr><tr><td>Market capitalization:</td><td></td><td></td><td></td><td></td></tr><tr><td>Common shares outstanding</td><td>362,602</td><td>371,732</td><td>383,675</td><td></td></tr><tr><td>Period end share price</td><td>$ 66.93</td><td>$ 63.77</td><td>$ 69.41</td><td></td></tr><tr><td>Common equity market capitalization</td><td>$24,268,952</td><td>$23,705,350</td><td>$26,630,882</td><td></td></tr><tr><td>Total net debt</td><td>11,800,586</td><td>11,482,316</td><td>13,081,768</td><td></td></tr><tr><td>Noncontrolling interests(3)</td><td>873,512</td><td>877,499</td><td>1,378,311</td><td></td></tr><tr><td>Preferred stock</td><td>1,006,250</td><td>718,503</td><td>718,498</td><td></td></tr><tr><td>Market capitalization:</td><td>$37,949,300</td><td>$36,783,668</td><td>$41,809,459</td><td></td></tr><tr><td>Net debt to market capitalization ratio</td><td>31.1%</td><td>31.2%</td><td>31.3%</td><td></td></tr></table>



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following tables reflect the reconciliation of NOI and SSNOI to net income, the most directly comparable U.S. GAAP measure, for the years presented. Dollar amounts are in thousands.

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2016</td><td>2017</td><td>2018</td></tr><tr><td>NOI Reconciliation:</td><td></td><td></td><td></td></tr><tr><td>Net income</td><td>$1,082,070</td><td>$ 540,613</td><td>$ 829,750</td></tr><tr><td>Loss (gain) on real estate dispositions, net</td><td>(364,046)</td><td>(344,250)</td><td>(415,575)</td></tr><tr><td>Loss (income) from unconsolidated entities</td><td>10,357</td><td>83,125</td><td>641</td></tr><tr><td>Income tax expense (benefit)</td><td>(19,128)</td><td>20,128</td><td>8,674</td></tr><tr><td>Other expenses</td><td>11,998</td><td>177,776</td><td>112,898</td></tr><tr><td>Impairment of assets</td><td>37,207</td><td>124,483</td><td>115,579</td></tr><tr><td>Provision for loan losses</td><td>10,215</td><td>62,966</td><td>—</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>17,214</td><td>37,241</td><td>16,097</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>(2,448)</td><td>2,284</td><td>(4,016)</td></tr><tr><td>Transaction costs</td><td>42,910</td><td>—</td><td>—</td></tr><tr><td>General and administrative expenses</td><td>155,241</td><td>122,008</td><td>126,383</td></tr><tr><td>Depreciation and amortization</td><td>901,242</td><td>921,720</td><td>950,459</td></tr><tr><td>Interest expense</td><td>521,345</td><td>484,622</td><td>526,592</td></tr><tr><td>Consolidated net operating income (NOI)</td><td>$2,404,177</td><td>$2,232,716</td><td>$2,267,482</td></tr><tr><td>NOI by segment:</td><td></td><td></td><td></td></tr><tr><td>Seniors Housing Operating</td><td>$ 814,114</td><td>$ 880,026</td><td>$ 985,022</td></tr><tr><td>Triple-net</td><td>1,208,860</td><td>967,084</td><td>900,049</td></tr><tr><td>Outpatient Medical</td><td>380,264</td><td>384,068</td><td>380,136</td></tr><tr><td>Non-segment/corporate</td><td>939</td><td>1,538</td><td>2,275</td></tr><tr><td>Total NOI</td><td>$2,404,177</td><td>$2,232,716</td><td>$2,267,482</td></tr></table>



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2016</td><td>2017</td><td>2018</td></tr><tr><td>SSNOI Reconciliation:</td><td></td><td></td><td></td></tr><tr><td>NOI:</td><td></td><td></td><td></td></tr><tr><td>Seniors Housing Operating</td><td>$ 814,114</td><td>$ 880,026</td><td>$ 985,022</td></tr><tr><td>Triple-net</td><td>1,208,860</td><td>967,084</td><td>900,049</td></tr><tr><td>Outpatient Medical</td><td>380,264</td><td>384,068</td><td>380,136</td></tr><tr><td>Total</td><td>2,403,238</td><td>2,231,178</td><td>2,265,207</td></tr><tr><td>Adjustments:</td><td></td><td></td><td></td></tr><tr><td>Seniors Housing Operating:</td><td></td><td></td><td></td></tr><tr><td>Non-cash NOI on same store properties</td><td>1,990</td><td>1,242</td><td>836</td></tr><tr><td>NOI attributable to non same store properties</td><td>(77,334)</td><td>(132,604)</td><td>(251,803)</td></tr><tr><td>Subtotal</td><td>(75,344)</td><td>(131,362)</td><td>(250,967)</td></tr><tr><td>Triple-net:</td><td></td><td></td><td></td></tr><tr><td>Non-cash NOI on same store properties</td><td>(28,538)</td><td>(23,764)</td><td>(17,093)</td></tr><tr><td>NOI attributable to non same store properties</td><td>(709,606)</td><td>(465,820)</td><td>(401,878)</td></tr><tr><td>Subtotal</td><td>(738,144)</td><td>(489,584)</td><td>(418,971)</td></tr><tr><td>Outpatient Medical:</td><td></td><td></td><td></td></tr><tr><td>Non-cash NOI on same store properties</td><td>(8,190)</td><td>(7,694)</td><td>(8,226)</td></tr><tr><td>NOI attributable to non same store properties</td><td>(53,220)</td><td>(58,076)</td><td>(35,619)</td></tr><tr><td>Subtotal</td><td>(61,410)</td><td>(65,770)</td><td>(43,845)</td></tr><tr><td>Total</td><td>(874,898)</td><td>(686,716)</td><td>(713,783)</td></tr><tr><td>SSNOI by segment:</td><td></td><td></td><td></td></tr><tr><td>Seniors Housing Operating</td><td>738,770</td><td>748,664</td><td>734,055</td></tr><tr><td>Triple-net</td><td>470,716</td><td>477,500</td><td>481,078</td></tr><tr><td>Outpatient Medical</td><td>318,854</td><td>318,298</td><td>336,291</td></tr><tr><td>Total</td><td>$1,528,340</td><td>$1,544,462</td><td>$1,551,424</td></tr><tr><td>SSNOI Property Reconciliation:</td><td></td><td></td><td></td></tr><tr><td>Total properties</td><td>1,510</td><td></td><td></td></tr><tr><td>Acquisitions</td><td>(378)</td><td></td><td></td></tr><tr><td>Developments</td><td>(32)</td><td></td><td></td></tr><tr><td>Disposals/Held-for-sale</td><td>(55)</td><td></td><td></td></tr><tr><td>Segment transitions</td><td>(113)</td><td></td><td></td></tr><tr><td>Other(1)</td><td>(8)</td><td></td><td></td></tr><tr><td>Same store properties</td><td>924</td><td></td><td></td></tr></table>

(1) Includes seven land parcels and one loan.



## 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 accounting estimates or assumptions 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 and the Audit Committee has reviewed the disclosure presented below relating to them. 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:

## Nature of Critical Accounting Estimate

## 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.

## Assumptions/Approach Used

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.



# Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

## Nature of Critical Accounting Estimate

## Real Estate Acquisitions

On January 1, 2017, we adopted Accounting Standards Update 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”) which narrows the Financial Accounting Standards Board’s (“FASB”) definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. ASU 2017-01 states that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the acquired asset is not a business. If this initial test is not met, an acquired asset cannot be considered a business unless it includes an input and a substantive process that together significantly contribute to the ability to create output. The primary differences between business combinations and asset acquisitions include recording the asset acquisition at relative fair value, capitalizing transaction costs, and the elimination of the measurement period in which to record adjustments to the transaction. We believe that substantially all our real estate acquisitions are considered asset acquisitions. We are applying ASU 2017-01 prospectively for acquisitions after January 1, 2017. Regardless of whether an acquisition is considered an asset acquisition or a business combination, the cost of real property acquired is allocated to net tangible and identifiable intangible assets based on their respective fair values. Tangible assets primarily consist of land, buildings, and improvements. The remaining purchase price is allocated among identifiable intangible assets primarily consisting 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 that respective tenant. Real property developed by us is recorded at cost, including the capitalization of construction period interest.

## Allowance for Loan Losses

The allowance for loan losses is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the allowance is based on a quarterly evaluation of all outstanding loans. If this evaluation indicates that there is a greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required. A loan is impaired 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 original loan agreement or if it has been modified in a troubled debt restructuring. Consistent with this definition, all loans on non-accrual are deemed impaired. To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to income accrual status.

## Assumptions/Approach Used

We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our allocations are typically the allocation of fair value to the buildings as-if-vacant, land, and in-place leases. In the case of the fair value of buildings and the allocation of value to land and other intangibles, our estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in-place leases, we make our best estimates based on our evaluation of the specific characteristics of each tenant's lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions, and costs to execute similar leases. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases.

We compute depreciation and amortization on our properties using the straight-line method based on their estimated useful lives which range from 15 to 40 years for buildings and five to 15 years for improvements. Amortization periods for intangibles are based on the remaining life of the lease or lease-up period.

The determination of the 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 factors, including, but not limited to, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors, and value of the underlying collateral. Any loans with collectability concerns are subjected to a projected payoff valuation. The valuation is based on the expected future cash flows and/or the estimated fair value of the underlying collateral. The valuation is compared to the outstanding balance to determine the reserve needed for each loan. We may base our valuation on a loan’s observable market price, if any, or the fair value of collateral, net of sales costs, if the repayment of the loan is expected to be provided solely by the collateral.



## Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Nature of Critical Accounting Estimate

Assumptions/Approach Used

## Revenue Recognition

Revenue is recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Substantially all of our operating leases contain fixed and/or contingent 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. We recognize resident fees and services, other than move-in fees, monthly as services are provided. Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days' notice.

## Impairment of Long-Lived Assets

An impairment charge must be recognized when the carrying value of a long-lived asset is not recoverable. The carrying value is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that a permanent impairment of a long-lived asset has occurred, the carrying value of the asset is reduced to its fair value and an impairment charge is recognized for the difference between the carrying value and the fair value.
We evaluate the collectability of our revenues and related receivables on an on-going basis. We evaluate collectability based on assumptions and other considerations including, but not limited to, the certainty of payment, payment history, the financial strength of the investment's underlying operations as measured by cash flows and payment coverages, the value of the underlying collateral and guaranties, and current economic conditions.

If our evaluation indicates that collectability is not reasonably assured, we may place an investment on non-accrual or reserve against all or a portion of current income as an offset to revenue.

The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if there are indicators of impairment. These indicators may include anticipated operating losses at the property level, the tenant’s inability 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, then the undiscounted future cash flows from the most likely uses of the property are compared to the current net book value. This analysis requires us to determine if indicators of impairment exist and to estimate the most likely stream of cash flows to be generated from the property during the period the property is expected to be held. Properties that meet the held-for-sale criteria are recorded at the lesser of fair value less costs to sell or carrying value.

## 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 11 and 16 to our consolidated financial statements.

We historically borrow on our primary unsecured credit facility 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 primary unsecured credit facility and new 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):

<table><tr><td rowspan="2"></td><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td></tr><tr><td>Principal balance</td><td>Fair value change</td><td>Principal balance</td><td>Fair value change</td></tr><tr><td>Senior unsecured notes</td><td>$ 9,009,159</td><td>$(548,558)</td><td>$7,710,219</td><td>$(500,951)</td></tr><tr><td>Secured debt</td><td>1,639,983</td><td>(59,522)</td><td>1,749,958</td><td>(63,492)</td></tr><tr><td>Totals</td><td>$10,649,142</td><td>$(608,080)</td><td>$9,460,177</td><td>$(564,443)</td></tr></table>

Our variable rate debt, including our primary unsecured credit facility, is reflected at fair value. At December 31, 2018, we had $2,683,553,000 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 $26,836,000. At December 31, 2017, we had $2,294,678,000 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 $22,947,000.

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, 2018, 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 $10,000,000. 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):

<table><tr><td rowspan="2"></td><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td></tr><tr><td>Carrying value</td><td>Fair value change</td><td>Carrying value</td><td>Fair value change</td></tr><tr><td>Foreign currency exchange contracts</td><td>$ 23,620</td><td>$16,163</td><td>$ 23,238</td><td>$12,929</td></tr><tr><td>Debt designated as hedges</td><td>1,559,159</td><td>15,592</td><td>1,620,273</td><td>16,203</td></tr><tr><td>Totals</td><td>$1,582,779</td><td>$31,755</td><td>$1,643,511</td><td>$29,132</td></tr></table>



## Item 8. Financial Statements and Supplementary Data

## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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, 2018 and 2017, the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2018, 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, 2018 and 2017 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, 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, 2018, 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 25, 2019 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.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1970.

Toledo, Ohio

February 25, 2019



## CONSOLIDATED BALANCE SHEETS
WELLTOWER INC. AND SUBSIDIARIES

<table><tr><td></td><td>December 31, 2018</td><td>December 31, 2017</td></tr><tr><td></td><td colspan="2">(in thousands)</td></tr><tr><td>Assets</td><td></td><td></td></tr><tr><td>Real estate investments:</td><td></td><td></td></tr><tr><td>Real property owned:</td><td></td><td></td></tr><tr><td>Land and land improvements</td><td>$ 3,205,091</td><td>$ 2,734,467</td></tr><tr><td>Buildings and improvements</td><td>28,019,502</td><td>25,373,117</td></tr><tr><td>Acquired lease intangibles</td><td>1,581,159</td><td>1,502,471</td></tr><tr><td>Real property held for sale, net of accumulated depreciation</td><td>590,271</td><td>734,147</td></tr><tr><td>Construction in progress</td><td>194,365</td><td>237,746</td></tr><tr><td>Gross real property owned</td><td>33,590,388</td><td>30,581,948</td></tr><tr><td>Less accumulated depreciation and amortization</td><td>(5,499,958)</td><td>(4,838,370)</td></tr><tr><td>Net real property owned</td><td>28,090,430</td><td>25,743,578</td></tr><tr><td>Real estate loans receivable</td><td>398,711</td><td>495,871</td></tr><tr><td>Less allowance for losses on loans receivable</td><td>(68,372)</td><td>(68,372)</td></tr><tr><td>Net real estate loans receivable</td><td>330,339</td><td>427,499</td></tr><tr><td>Net real estate investments</td><td>28,420,769</td><td>26,171,077</td></tr><tr><td>Other assets:</td><td></td><td></td></tr><tr><td>Investments in unconsolidated entities</td><td>482,914</td><td>445,585</td></tr><tr><td>Goodwill</td><td>68,321</td><td>68,321</td></tr><tr><td>Cash and cash equivalents</td><td>215,376</td><td>243,777</td></tr><tr><td>Restricted cash</td><td>100,753</td><td>65,526</td></tr><tr><td>Straight-line receivable</td><td>367,093</td><td>389,168</td></tr><tr><td>Receivables and other assets</td><td>686,846</td><td>560,991</td></tr><tr><td>Total other assets</td><td>1,921,303</td><td>1,773,368</td></tr><tr><td>Total assets</td><td>$ 30,342,072</td><td>$27,944,445</td></tr><tr><td>Liabilities and equity</td><td></td><td></td></tr><tr><td>Liabilities:</td><td></td><td></td></tr><tr><td>Borrowings under primary unsecured credit facility</td><td>$ 1,147,000</td><td>$ 719,000</td></tr><tr><td>Senior unsecured notes</td><td>9,603,299</td><td>8,331,722</td></tr><tr><td>Secured debt</td><td>2,476,177</td><td>2,608,976</td></tr><tr><td>Capital lease obligations</td><td>70,668</td><td>72,238</td></tr><tr><td>Accrued expenses and other liabilities</td><td>1,034,283</td><td>911,863</td></tr><tr><td>Total liabilities</td><td>14,331,427</td><td>12,643,799</td></tr><tr><td>Redeemable noncontrolling interests</td><td>424,046</td><td>375,194</td></tr><tr><td>Equity:</td><td></td><td></td></tr><tr><td>Preferred stock</td><td>718,498</td><td>718,503</td></tr><tr><td>Common stock</td><td>384,465</td><td>372,449</td></tr><tr><td>Capital in excess of par value</td><td>18,424,368</td><td>17,662,681</td></tr><tr><td>Treasury stock</td><td>(68,499)</td><td>(64,559)</td></tr><tr><td>Cumulative net income</td><td>6,121,534</td><td>5,316,580</td></tr><tr><td>Cumulative dividends</td><td>(10,818,557)</td><td>(9,471,712)</td></tr><tr><td>Accumulated other comprehensive income (loss)</td><td>(129,769)</td><td>(111,465)</td></tr><tr><td>Other equity</td><td>294</td><td>670</td></tr><tr><td>Total Welltower Inc. stockholders&#x27; equity</td><td>14,632,334</td><td>14,423,147</td></tr><tr><td>Noncontrolling interests</td><td>954,265</td><td>502,305</td></tr><tr><td>Total equity</td><td>15,586,599</td><td>14,925,452</td></tr><tr><td>Total liabilities and equity</td><td>$ 30,342,072</td><td>$27,944,445</td></tr></table>

See accompanying notes



## CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
WELLTOWER INC. AND SUBSIDIARIES
(In thousands, except per share data)

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td></tr><tr><td>Resident fees and services</td><td>$3,234,852</td><td>$2,779,423</td><td>$2,504,731</td></tr><tr><td>Rental income</td><td>1,380,422</td><td>1,445,871</td><td>1,648,815</td></tr><tr><td>Interest income</td><td>55,814</td><td>73,811</td><td>97,963</td></tr><tr><td>Other income</td><td>29,411</td><td>17,536</td><td>29,651</td></tr><tr><td>Total revenues</td><td>4,700,499</td><td>4,316,641</td><td>4,281,160</td></tr><tr><td>Expenses:</td><td></td><td></td><td></td></tr><tr><td>Property operating expenses</td><td>2,433,017</td><td>2,083,925</td><td>1,876,983</td></tr><tr><td>Depreciation and amortization</td><td>950,459</td><td>921,720</td><td>901,242</td></tr><tr><td>Interest expense</td><td>526,592</td><td>484,622</td><td>521,345</td></tr><tr><td>General and administrative expenses</td><td>126,383</td><td>122,008</td><td>155,241</td></tr><tr><td>Transaction costs</td><td>—</td><td>—</td><td>42,910</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>(4,016)</td><td>2,284</td><td>(2,448)</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>16,097</td><td>37,241</td><td>17,214</td></tr><tr><td>Provision for loan losses</td><td>—</td><td>62,966</td><td>10,215</td></tr><tr><td>Impairment of assets</td><td>115,579</td><td>124,483</td><td>37,207</td></tr><tr><td>Other expenses</td><td>112,898</td><td>177,776</td><td>11,998</td></tr><tr><td>Total expenses</td><td>4,277,009</td><td>4,017,025</td><td>3,571,907</td></tr><tr><td>Income from continuing operations before income taxes and other items</td><td>423,490</td><td>299,616</td><td>709,253</td></tr><tr><td>Income tax (expense) benefit</td><td>(8,674)</td><td>(20,128)</td><td>19,128</td></tr><tr><td>Income (loss) from unconsolidated entities</td><td>(641)</td><td>(83,125)</td><td>(10,357)</td></tr><tr><td>Gain (loss) on real estate dispositions, net</td><td>415,575</td><td>344,250</td><td>364,046</td></tr><tr><td>Income from continuing operations</td><td>829,750</td><td>540,613</td><td>1,082,070</td></tr><tr><td>Net income</td><td>829,750</td><td>540,613</td><td>1,082,070</td></tr></table>

(1) Includes amounts attributable to redeemable noncontrolling interests

See accompanying notes



## CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Net income</td><td>$829,750</td><td>$540,613</td><td>$1,082,070</td></tr><tr><td>Other comprehensive income (loss):</td><td></td><td></td><td></td></tr><tr><td>Unrecognized gain (loss) on equity investments</td><td>—</td><td>—</td><td>5,120</td></tr><tr><td>Reclassification adjustment for write down of equity investment</td><td>—</td><td>(5,120)</td><td>—</td></tr><tr><td>Unrecognized gain (loss) on cash flow hedges</td><td>—</td><td>2</td><td>1,414</td></tr><tr><td>Unrecognized actuarial gain (loss)</td><td>344</td><td>269</td><td>190</td></tr><tr><td>Foreign currency translation gain (loss)</td><td>(41,632)</td><td>85,263</td><td>(85,557)</td></tr><tr><td>Total other comprehensive income (loss)</td><td>(41,288)</td><td>80,414</td><td>(78,833)</td></tr><tr><td>Total comprehensive income</td><td>788,462</td><td>621,027</td><td>1,003,237</td></tr><tr><td>Less: Total comprehensive income (loss) attributable to noncontrolling interests \( ^{(1)} \)</td><td>1,812</td><td>40,187</td><td>6,722</td></tr><tr><td>Total comprehensive income attributable to stockholders</td><td>$786,650</td><td>$580,840</td><td>$996,515</td></tr></table>

(1) Includes amounts attributable to redeemable noncontrolling interests.



## CONSOLIDATED STATEMENTS OF EQUITY
WELLTOWER INC. AND SUBSIDIARIES

<table><tr><td>(in thousands)</td><td>Preferred Stock</td><td>Common Stock</td><td>Capital in Excess of Par Value</td><td>Treasury Stock</td><td>Cumulative Net Income</td><td>Cumulative Dividends</td><td>Accumulated Other Comprehensive Income (Loss)</td><td>Other Equity</td><td>Noncontrolling Interests</td><td>Total</td></tr><tr><td>Balances at December 31, 2015</td><td>$1,006,250</td><td>$354,811</td><td>$16,478,300</td><td>$(44,372)</td><td>$3,725,772</td><td>$ (6,846,056)</td><td>$ (88,243)</td><td>$ 4,098</td><td>$ 585,325</td><td>$15,175,885</td></tr><tr><td>Comprehensive income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income</td><td></td><td></td><td></td><td></td><td>1,077,803</td><td></td><td></td><td>9,277</td><td>1,087,080</td><td></td></tr><tr><td>Other comprehensive income (loss)</td><td></td><td></td><td></td><td></td><td></td><td></td><td>(81,288)</td><td>2,455</td><td>(78,833)</td><td></td></tr><tr><td>Total comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>1,008,247</td><td></td></tr><tr><td>Net change in noncontrolling interests</td><td></td><td></td><td>(51,478)</td><td></td><td></td><td></td><td></td><td>(121,978)</td><td>(173,456)</td><td></td></tr><tr><td>Amounts related to issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures</td><td></td><td>839</td><td>46,938</td><td>(10,369)</td><td></td><td></td><td>(1,305)</td><td></td><td>36,103</td><td></td></tr><tr><td>Net proceeds from issuance of common stock</td><td></td><td>7,421</td><td>525,931</td><td></td><td></td><td></td><td></td><td></td><td>533,352</td><td></td></tr><tr><td>Option compensation expense</td><td></td><td></td><td></td><td></td><td></td><td></td><td>266</td><td></td><td>266</td><td></td></tr><tr><td>Dividends paid:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common stock dividends</td><td></td><td></td><td></td><td></td><td></td><td>(1,233,519)</td><td></td><td></td><td></td><td>(1,233,519)</td></tr><tr><td>Preferred stock dividends</td><td></td><td></td><td></td><td></td><td></td><td>(65,406)</td><td></td><td></td><td></td><td>(65,406)</td></tr><tr><td>Balances at December 31, 2016</td><td>1,006,250</td><td>363,071</td><td>16,999,691</td><td>(54,741)</td><td>4,803,575</td><td>(8,144,981)</td><td>(169,531)</td><td>3,059</td><td>475,079</td><td>15,281,472</td></tr><tr><td>Comprehensive income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income</td><td></td><td></td><td></td><td></td><td>522,774</td><td></td><td></td><td></td><td>20,819</td><td>543,593</td></tr><tr><td>Other comprehensive income (loss)</td><td></td><td></td><td></td><td></td><td></td><td></td><td>58,066</td><td></td><td>22,348</td><td>80,414</td></tr><tr><td>Total comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>624,007</td></tr><tr><td>Net change in noncontrolling interests</td><td></td><td></td><td>13,473</td><td></td><td></td><td></td><td></td><td></td><td>(15,941)</td><td>(2,468)</td></tr><tr><td>Amounts related to issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures</td><td></td><td></td><td>402</td><td>21,494</td><td>(9,807)</td><td></td><td></td><td>(2,399)</td><td></td><td>9,690</td></tr><tr><td>Net proceeds from issuance of common stock</td><td></td><td></td><td>8,881</td><td>612,555</td><td></td><td></td><td></td><td></td><td></td><td>621,436</td></tr><tr><td>Redemption of equity membership units</td><td></td><td>91</td><td>5,465</td><td>(11)</td><td></td><td></td><td></td><td></td><td></td><td>5,545</td></tr><tr><td>Redemption of preferred stock</td><td>(287,500)</td><td></td><td>9,760</td><td></td><td>(9,769)</td><td></td><td></td><td></td><td></td><td>(287,509)</td></tr><tr><td>Conversion of preferred stock</td><td>(247)</td><td>4</td><td>243</td><td></td><td></td><td></td><td></td><td></td><td></td><td>—</td></tr><tr><td>Option compensation expense</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>10</td><td></td><td>10</td></tr><tr><td>Dividends paid:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common stock dividends</td><td></td><td></td><td></td><td></td><td></td><td>(1,277,321)</td><td></td><td></td><td></td><td>(1,277,321)</td></tr><tr><td>Preferred stock dividends</td><td></td><td></td><td></td><td></td><td></td><td>(49,410)</td><td></td><td></td><td></td><td>(49,410)</td></tr><tr><td>Balances at December 31, 2017</td><td>718,503</td><td>372,449</td><td>17,662,681</td><td>(64,559)</td><td>5,316,580</td><td>(9,471,712)</td><td>(111,465)</td><td>670</td><td>502,305</td><td>14,925,452</td></tr><tr><td>Comprehensive income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income</td><td></td><td></td><td></td><td></td><td>804,954</td><td></td><td></td><td></td><td>25,065</td><td>830,019</td></tr><tr><td>Other comprehensive income (loss)</td><td></td><td></td><td></td><td></td><td></td><td></td><td>(18,304)</td><td></td><td>(22,984)</td><td>(41,288)</td></tr><tr><td>Total comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>788,731</td></tr><tr><td>Net change in noncontrolling interests</td><td></td><td></td><td>(43,101)</td><td></td><td></td><td></td><td></td><td></td><td>449,879</td><td>406,778</td></tr><tr><td>Amounts related to issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures</td><td></td><td>188</td><td>28,277</td><td>(3,940)</td><td></td><td></td><td></td><td>(376)</td><td></td><td>24,149</td></tr><tr><td>Net proceeds from issuance of common stock</td><td></td><td>11,828</td><td>776,506</td><td></td><td></td><td></td><td></td><td></td><td></td><td>788,334</td></tr><tr><td>Conversion of preferred stock</td><td>(5)</td><td></td><td>5</td><td></td><td></td><td></td><td></td><td></td><td></td><td>—</td></tr><tr><td>Dividends paid:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common stock dividends</td><td></td><td></td><td></td><td></td><td></td><td>(1,300,141)</td><td></td><td></td><td></td><td>(1,300,141)</td></tr><tr><td>Preferred stock dividends</td><td></td><td></td><td></td><td></td><td></td><td>(46,704)</td><td></td><td></td><td></td><td>(46,704)</td></tr><tr><td>Balances at December 31, 2018</td><td>$ 718,498</td><td>$384,465</td><td>$18,424,368</td><td>$(68,499)</td><td>$6,121,534</td><td>$(10,818,557)</td><td>$ (129,769)</td><td>$ 294</td><td>$ 954,265</td><td>$15,586,599</td></tr></table>



## CONSOLIDATED STATEMENTS OF CASH FLOWS
WELLTOWER INC. AND SUBSIDIARIES

<table><tr><td rowspan="2">(in thousands)</td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Operating activities:</td><td></td><td></td><td></td></tr><tr><td>Net income</td><td>$ 829,750</td><td>$ 540,613</td><td>$ 1,082,070</td></tr><tr><td>Adjustments to reconcile net income to net cash provided from (used in) operating activities:</td><td></td><td></td><td></td></tr><tr><td>Depreciation and amortization</td><td>950,459</td><td>921,720</td><td>901,242</td></tr><tr><td>Other amortization expenses</td><td>17,000</td><td>16,521</td><td>8,822</td></tr><tr><td>Provision for loan losses</td><td>—</td><td>62,966</td><td>10,215</td></tr><tr><td>Impairment of assets</td><td>115,579</td><td>124,483</td><td>37,207</td></tr><tr><td>Stock-based compensation expense</td><td>27,646</td><td>19,102</td><td>28,869</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>(4,016)</td><td>2,284</td><td>(2,448)</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>16,097</td><td>37,241</td><td>17,214</td></tr><tr><td>Loss (income) from unconsolidated entities</td><td>641</td><td>83,125</td><td>10,357</td></tr><tr><td>Rental income in excess of cash received</td><td>(32,857)</td><td>(80,398)</td><td>(83,233)</td></tr><tr><td>Amortization related to above (below) market leases, net</td><td>2,608</td><td>357</td><td>322</td></tr><tr><td>Loss (gain) on real estate dispositions, net</td><td>(415,575)</td><td>(344,250)</td><td>(364,046)</td></tr><tr><td>Other (income) expense, net</td><td>—</td><td>2</td><td>(4,853)</td></tr><tr><td>Distributions by unconsolidated entities</td><td>21</td><td>116</td><td>1,065</td></tr><tr><td>Increase (decrease) in accrued expenses and other liabilities</td><td>70,762</td><td>26,809</td><td>14,298</td></tr><tr><td>Decrease (increase) in receivables and other assets</td><td>5,829</td><td>23,486</td><td>(18,037)</td></tr><tr><td>Net cash provided from (used in) operating activities</td><td>1,583,944</td><td>1,434,177</td><td>1,639,064</td></tr><tr><td>Investing activities:</td><td></td><td></td><td></td></tr><tr><td>Cash disbursed for acquisitions, net of cash acquired</td><td>(3,560,360)</td><td>(805,264)</td><td>(2,145,374)</td></tr><tr><td>Cash disbursed for capital improvements to existing properties</td><td>(266,183)</td><td>(250,276)</td><td>(219,146)</td></tr><tr><td>Cash disbursed for construction in progress</td><td>(160,706)</td><td>(232,715)</td><td>(403,131)</td></tr><tr><td>Capitalized interest</td><td>(7,905)</td><td>(13,489)</td><td>(16,943)</td></tr><tr><td>Investment in real estate loans receivable</td><td>(83,048)</td><td>(83,738)</td><td>(129,884)</td></tr><tr><td>Principal collected on real estate loans receivable</td><td>180,830</td><td>96,023</td><td>249,552</td></tr><tr><td>Other investments, net of payments</td><td>(50,430)</td><td>57,385</td><td>4,760</td></tr><tr><td>Contributions to unconsolidated entities</td><td>(136,854)</td><td>(114,365)</td><td>(101,415)</td></tr><tr><td>Distributions by unconsolidated entities</td><td>90,916</td><td>70,287</td><td>119,723</td></tr><tr><td>Proceeds from (payments on) derivatives</td><td>65,399</td><td>52,719</td><td>108,347</td></tr><tr><td>Proceeds from sales of real property</td><td>1,541,870</td><td>1,378,014</td><td>2,350,068</td></tr><tr><td>Net cash provided from (used in) investing activities</td><td>(2,386,471)</td><td>154,581</td><td>(183,443)</td></tr><tr><td>Financing activities:</td><td></td><td></td><td></td></tr><tr><td>Net increase (decrease) under unsecured credit facilities</td><td>428,000</td><td>74,000</td><td>(190,000)</td></tr><tr><td>Proceeds from issuance of senior unsecured notes</td><td>2,824,176</td><td>7,500</td><td>693,560</td></tr><tr><td>Payments to extinguish senior unsecured notes</td><td>(1,450,000)</td><td>(5,000)</td><td>(865,863)</td></tr><tr><td>Net proceeds from the issuance of secured debt</td><td>45,447</td><td>241,772</td><td>460,015</td></tr><tr><td>Payments on secured debt</td><td>(362,841)</td><td>(1,144,346)</td><td>(563,759)</td></tr><tr><td>Net proceeds from the issuance of common stock</td><td>789,575</td><td>621,987</td><td>534,194</td></tr><tr><td>Redemption of preferred stock</td><td>—</td><td>(287,500)</td><td>—</td></tr><tr><td>Payments for deferred financing costs and prepayment penalties</td><td>(29,691)</td><td>(54,333)</td><td>(22,196)</td></tr><tr><td>Contributions by noncontrolling interests \( ^{(1)} \)</td><td>39,207</td><td>56,560</td><td>148,666</td></tr><tr><td>Distributions to noncontrolling interests \( ^{(1)} \)</td><td>(109,871)</td><td>(87,711)</td><td>(134,578)</td></tr><tr><td>Cash distributions to stockholders</td><td>(1,348,863)</td><td>(1,325,617)</td><td>(1,298,925)</td></tr><tr><td>Other financing activities</td><td>(6,771)</td><td>(10,839)</td><td>(11,931)</td></tr><tr><td>Net cash provided from (used in) financing activities</td><td>818,368</td><td>(1,913,527)</td><td>(1,250,817)</td></tr><tr><td>Effect of foreign currency translation on cash and cash equivalents and restricted cash</td><td>(9,015)</td><td>26,852</td><td>(20,274)</td></tr><tr><td>Increase (decrease) in cash, cash equivalents and restricted cash</td><td>6,826</td><td>(297,917)</td><td>184,530</td></tr><tr><td>Cash, cash equivalents and restricted cash at beginning of period</td><td>309,303</td><td>607,220</td><td>422,690</td></tr><tr><td>Cash, cash equivalents and restricted cash at end of period</td><td>$ 316,129</td><td>$ 309,303</td><td>$ 607,220</td></tr><tr><td>Supplemental cash flow information:</td><td></td><td></td><td></td></tr><tr><td>Interest paid</td><td>$ 501,404</td><td>$ 488,265</td><td>$ 541,545</td></tr><tr><td>Income taxes paid</td><td>2,250</td><td>10,410</td><td>8,011</td></tr></table>

(1) Includes amounts attributable to redeemable noncontrolling interests.



# WELLTOWER INC. AND SUBSIDIARIES
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 \( ^{TM} \) , 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

On January 1, 2018 we adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (ASC 606),” which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. We adopted ASC 606 using the modified retrospective method.

We have evaluated our various revenue streams to identify whether they would be subject to the provisions of ASC 606 and any differences in timing, measurement or presentation of revenue recognition. A significant source of our revenue is generated through leasing arrangements, which are specifically excluded from ASC 606.



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Substantially all of our operating leases 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. 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.

We recognize resident fees and services, other than move-in fees, monthly as services are provided. Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days' notice. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Management contracts are present in some of our joint venture agreements to provide asset and property management, leasing, marketing and other services. Under ASC 606, the pattern and timing of recognition of income from these contracts is consistent with the prior accounting model.

## 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.

## 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

In 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-01 “Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Liabilities,” which requires entities



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to measure their investments at fair value and recognize any changes in fair value in net income rather than through accumulated other comprehensive income. During the year ended December 31, 2018, we recognized a gain of $4,016,000 related to our equity securities in loss (gain) on derivatives and financial instruments, net on the Consolidated Statement of Comprehensive Income. There was no adjustment to accumulated other comprehensive income upon adoption at January 1, 2018 as accumulated losses of $18,294,000 were recognized as other-than-temporary impairment during the year ended December 31, 2017.

## 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 one year. In accordance with ASC 810, the redeemable noncontrolling interests are classified outside of permanent equity, as a mezzanine item, in the balance sheet. At December 31, 2018, the current redemption value of redeemable noncontrolling interests exceeded the carrying value of $424,046,000 by $18,891,000.

During 2014 and 2015, we entered into 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

On January 1, 2017, we adopted ASU 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”) which narrows the FASB’s definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. ASU 2017-01 states that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the acquired asset is not a business. If this initial test is not met, an acquired asset cannot be considered a business unless it includes an input and a substantive process that together significantly contribute to the ability to create output. The primary differences between business combinations and asset acquisitions include recording the asset acquisition at relative fair value, capitalizing transaction costs, and the elimination of the measurement period in which to record adjustments to the transaction. We believe that substantially all our real estate acquisitions are considered asset acquisitions. We are applying ASU 2017-01 prospectively for acquisitions after January 1, 2017. Real property developed by us is recorded at cost, including the capitalization of construction period interest. Expenditures for repairs and maintenance are expensed as incurred.

Regardless of whether an acquisition is considered an asset acquisition or a business combination, the cost of real property acquired, which represents substantially all of the purchase price, is allocated to net tangible and identifiable intangible assets based on their relative fair values. 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. Tangible assets primarily consist of land, buildings and improvements, including those related to capital leases. 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 remaining purchase price is allocated among identifiable intangible assets primarily consisting of the above or below market component of in-place leases and the value associated with the presence of in-place



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 in 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 will be amortized over the remaining life of the lease or the assumed re-leasing period.

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 lessor of fair value less costs to sell or the carrying value.

## Capitalization of Construction Period Interest

We capitalize interest costs associated with funds used for the construction of properties owned directly 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.

## Gain on Real Estate Dispositions

In 2017, the FASB issued ASU 2017-05, “Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The standard clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The standard also defines the term “in substance nonfinancial asset” and clarifies that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control over it. We adopted Subtopic 610-20 using a modified retrospective approach on January 1, 2018 and it did not have a material impact on our consolidated financial statements.

Prior to the adoption of Subtopic 610-20, we recognized sales of real estate assets only upon the closing of the transaction with the purchaser. Payments received from purchasers prior to closing were recorded as deposits



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and classified as other assets on our consolidated balance sheets. Gains on real estate assets sold were recognized using the full accrual method upon closing when (i) the collectability of the sales price was reasonably assured, (ii) we were not obligated to perform significant activities after the sale to earn the profit, (iii) we have received adequate initial investment from the purchaser, and (iv) other profit recognition criteria have been satisfied. Gains may have been deferred in whole or in part until the sales satisfy the requirements of gain recognition on sales of real estate.

## Real Estate Loans Receivable

Real estate loans receivable consist of mortgage loans and other real estate loans. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risks. The loans 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 guaranties and/or personal guarantees.

## Allowance for Losses on Loans Receivable

The allowance for losses on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the allowance is based on a quarterly evaluation of these 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, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors, and value of the underlying collateral. If such factors indicate that there is greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required. A loan is impaired 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 original loan agreement. Consistent with this definition, all loans on non-accrual are deemed impaired. To the extent circumstances improve and the risk of collectability is diminished, we will 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. Any loans with collectability concerns are subjected to a projected payoff valuation. The valuation is based on the expected future cash flows and/or the estimated fair value of the underlying collateral. The valuation is compared to the outstanding balance to determine the reserve needed for each loan. We may base our valuation on a loan’s observable market price, if any, or the fair value of collateral, net of sales costs, if the repayment of the loan is expected to be provided solely by the collateral.

## 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 significant estimates that may change in the future. See Note 11 for additional information.



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## 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 18 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.

## Reclassifications

Certain amounts in prior years have been reclassified to conform to current year presentation.

## New Accounting Standards

During the year ended December 31, 2018, we adopted the following additional accounting standard, which did not have a material impact on our consolidated financial statements:

- In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities,” which expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. It also includes certain targeted improvements to simplify the application of current guidance related to hedge accounting. The early



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

adoption of this standard on April 1, 2018, did not result in a cumulative effect adjustment and all applicable changes for the company were prospectively made. Please refer to Note 11 of the consolidated financial statements for additional detail on this adoption.

The following ASUs have been issued but not yet adopted:

- In 2017, the FASB issued ASU 2016-02, “Leases (codified under ASC 842),” which requires lessees to recognize assets and liabilities on their consolidated balance sheet related to the rights and obligations created by most leases, while continuing to recognize expenses on their consolidated statements of comprehensive income over the lease term. It will also require disclosures designed to give financial statement users information regarding amount, timing, and uncertainty of cash flows arising from leases. While we are currently evaluating the impact of this adoption, we believe it will likely have a material impact to our consolidated financial statements for the recognition of certain operating leases as right-of-use assets and lease liabilities where we are the lessee. Specifically, we believe the impact to our consolidated financial statements will primarily be attributable to the approximately 139 ground leases and various office and equipment leases which are currently accounted for under ASC 840, “Leases,” as operating leases. Future lease payments under these leases total $1,138,046,000.

The FASB also issued ASU 2018-20 “Leases (Topic 842) — Narrow-scope Improvements for Lessors” in December 2018, which provides lessors the ability to make an accounting policy election not to evaluate whether certain sales taxes and other similar taxes imposed by a governmental authority on a specific lease revenue-producing transaction are the primary obligation of the lessor as owner of the underlying leased asset. A lessor that makes this election will exclude these taxes from the measurement of lease revenue and the associated expense. We expect to utilize the practical expedient in ASU 2018-20 as part of our adoption of this guidance.

Upon adoption of ASU 2016-02, lessors are required to separately recognize and measure the lease component of a contract with a customer utilizing the provisions of ASC 842 and the non-lease components utilizing the provisions of ASC 606. To separately account for the components, transaction price is allocated based upon the estimated stand-alone selling prices of the components. Additionally, certain components of a contract which were previously included within the lease element and recognized in accordance with ASC 840 prior to the adoption of ASC 2016-02 (such as common area maintenance services, other basic services and executory costs), are recognized as non-lease components subject to the provisions of ASC 606 subsequent to the adoption of ASC 2016-02. Entities are required to recognize a cumulative effect adjustment to beginning retained earnings as of the initial application of ASU 2016-02 for changes to amounts recognized for these certain components for the transition from ASC 840 to ASC 606.

The FASB issued ASU 2018-11, “Leases (Topic 842) Targeted Improvements” in July 2018, which provides lessors with a practical expedient, allowing them to not separate lease and non-lease components in a contract, and instead to account for as a single lease component, if certain criteria are met. This practical expedient causes an entity to assess whether a contract is predominantly lease or service-based and recognize the entire contract under the relevant accounting guidance (i.e., predominantly lease-based would be accounted for under ASC 842 and predominantly service-based would be accounted for under ASC 606). Entities that elect to utilize this practical expedient upon initial application of ASC 842 are required to apply to all new and existing transactions as of the initial application date with a cumulative effect adjustment to beginning retained earnings for any changes to amounts recognized related to existing transactions. For the year ended December 31, 2018, we recognized revenue for our Seniors Housing Operating segment in accordance with the provisions of ASC 840. Upon adoption of ASU 2016-02, we will elect the lessor practical expedient and will recognize the revenue for our Seniors Housing Operating segment based upon the predominant component, which we have determined to be the non-lease component, and therefore, will account for



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

these contracts under ASC 606. After the adoption of ASU 2016-02, we expect the timing and pattern of revenue recognition will be substantially the same as that prior to the adoption of the standard.

- In 2017, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” This standard requires a new forward-looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted for fiscal years beginning after December 15, 2018. We are currently evaluating the impact that the standard will 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, liabilities and noncontrolling interests based upon their relative fair values in accordance with our accounting policies. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments. Transaction costs primarily represent costs incurred with property acquisitions, including due diligence costs, fees for legal and valuation services, termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees, and other acquisition-related costs. Effective January 1, 2017, with our adoption of ASU 2017-01, transaction costs 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 Statement of Comprehensive Income. Acquisitions that occurred prior to January 1, 2017 were accounted for as business combinations. Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries.

## 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 five-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.

We drew on a $1.0 billion term loan facility to fund a portion of the acquisition cash consideration and other related expenses. The term loan facility matures two years from the closing. In addition to the term loan facility draw, we drew on our unsecured credit facility described in Note 9, in order to fund the acquisition. The aggregate consideration to acquire the QCP shares and repay outstanding QCP debt was approximately $3.5 billion.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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:

<table><tr><td>(In thousands)</td><td></td></tr><tr><td>Land and land improvements</td><td>$ 417,983</td></tr><tr><td>Buildings and improvements</td><td>2,253,451</td></tr><tr><td>Acquired lease intangibles</td><td>12,820</td></tr><tr><td>Real property held for sale</td><td>418,297</td></tr><tr><td>Cash and cash equivalents</td><td>381,913</td></tr><tr><td>Restricted cash</td><td>4,981</td></tr><tr><td>Receivables and other assets</td><td>1,354</td></tr><tr><td>Total assets acquired</td><td>3,490,799</td></tr><tr><td>Accrued expenses and other liabilities</td><td>(13,199)</td></tr><tr><td>Total liabilities assumed</td><td>(13,199)</td></tr><tr><td>Noncontrolling interests</td><td>(512,741)</td></tr><tr><td>Net assets acquired</td><td>$2,964,859</td></tr></table>

Net assets acquired in the QCP acquisition detailed above are included in the respective segment tables below.



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## Seniors Housing Operating Activity

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

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td><td></td></tr><tr><td>Land and land improvements</td><td>$ 51,440</td><td>$ 42,525</td><td>$ 164,653</td><td></td></tr><tr><td>Buildings and improvements</td><td>621,731</td><td>428,777</td><td>1,518,472</td><td></td></tr><tr><td>Acquired lease intangibles</td><td>69,504</td><td>63,912</td><td>115,643</td><td></td></tr><tr><td>Receivables and other assets</td><td>1,492</td><td>3,959</td><td>2,462</td><td></td></tr><tr><td>Total assets acquired(1)</td><td>744,167</td><td>539,173</td><td>1,801,230</td><td></td></tr><tr><td>Secured debt</td><td>(134,752)</td><td>—</td><td>(63,732)</td><td></td></tr><tr><td>Accrued expenses and other liabilities</td><td>(18,463)</td><td>(46,301)</td><td>(23,681)</td><td></td></tr><tr><td>Total liabilities assumed</td><td>(153,215)</td><td>(46,301)</td><td>(87,413)</td><td></td></tr><tr><td>Noncontrolling interests</td><td>(14,390)</td><td>(4,701)</td><td>(6,007)</td><td></td></tr><tr><td>Non-cash acquisition related activity(2)</td><td>—</td><td>(67,633)</td><td>(47,065)</td><td></td></tr><tr><td>Cash disbursed for acquisitions</td><td>576,562</td><td>420,538</td><td>1,660,745</td><td></td></tr><tr><td>Construction in progress additions</td><td>82,621</td><td>84,874</td><td>157,845</td><td></td></tr><tr><td>Capitalized interest</td><td>(3,190)</td><td>(9,106)</td><td>(5,793)</td><td></td></tr><tr><td>Foreign currency translation</td><td>3,934</td><td>(6,830)</td><td>(8,500)</td><td></td></tr><tr><td>Cash disbursed for construction in progress</td><td>83,365</td><td>68,938</td><td>143,552</td><td></td></tr><tr><td>Capital improvements to existing properties</td><td>201,001</td><td>185,473</td><td>138,673</td><td></td></tr><tr><td>Total cash invested in real property, net of cash acquired</td><td>$ 860,928</td><td>$674,949</td><td>$1,942,970</td><td></td></tr></table>

(1) Excludes $5,784,000, $6,273,000 and $351,000 of cash and restricted cash acquired during the years ended December 31, 2018, 2017 and 2016, respectively.

(2) For the year ended December 31, 2017, includes $59,665,000 related to the acquisition of assets previously financed as investments in unconsolidated entities and $6,349,000 related to the acquisition of assets previously financed as real estate loans receivable. For the year ended December 31, 2016, includes $43,372,000 related to the acquisition of assets previously financed as investments in unconsolidated entities.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## Triple-net Activity

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

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td><td></td></tr><tr><td>Land and land improvements</td><td>$ 413,588</td><td>$ 33,416</td><td>$104,754</td><td></td></tr><tr><td>Buildings and improvements</td><td>2,242,884</td><td>248,459</td><td>418,633</td><td></td></tr><tr><td>Acquired lease intangibles</td><td>9,690</td><td>—</td><td>2,876</td><td></td></tr><tr><td>Real property held for sale</td><td>396,265</td><td>—</td><td>—</td><td></td></tr><tr><td>Receivables and other assets</td><td>1,354</td><td>—</td><td>551</td><td></td></tr><tr><td>Total assets acquired(1)</td><td>3,063,781</td><td>281,875</td><td>526,814</td><td></td></tr><tr><td>Accrued expenses and other liabilities</td><td>(13,199)</td><td>(21,236)</td><td>(3,384)</td><td></td></tr><tr><td>Total liabilities assumed</td><td>(13,199)</td><td>(21,236)</td><td>(3, 384)</td><td></td></tr><tr><td>Noncontrolling interests</td><td>(512,741)</td><td>(7,275)</td><td>(26,771)</td><td></td></tr><tr><td>Non-cash acquisition related activity(2)</td><td>—</td><td>(54,901)</td><td>(51,733)</td><td></td></tr><tr><td>Cash disbursed for acquisitions</td><td>2,537,841</td><td>198,463</td><td>444,926</td><td></td></tr><tr><td>Construction in progress additions</td><td>55,558</td><td>120,797</td><td>181,084</td><td></td></tr><tr><td>Capitalized interest</td><td>(2,238)</td><td>(4,713)</td><td>(8,729)</td><td></td></tr><tr><td>Foreign currency translation</td><td>272</td><td>(610)</td><td>(3,665)</td><td></td></tr><tr><td>Cash disbursed for construction in progress</td><td>53,592</td><td>115,474</td><td>168,690</td><td></td></tr><tr><td>Capital improvements to existing properties</td><td>10,046</td><td>19,989</td><td>32,603</td><td></td></tr><tr><td>Total cash invested in real property, net of cash acquired</td><td>$2,601,479</td><td>$333,926</td><td>$646,219</td><td></td></tr></table>

(1) Excludes $386,894,000, $318,000 and $682,000 of cash and restricted cash acquired during the years ended December 31, 2018, 2017 and 2016, respectively.

(2) For the year ended December 31, 2017, $54,901,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the year ended December 31, 2016, primarily relates to $45,044,000 for the acquisition of assets previously financed as real estate loans receivable and $6,630,000 previously financed as equity investments.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## Outpatient Medical Activity

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

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Land and land improvements</td><td>$ 77,239</td><td>$ 40,565</td><td>$ 5,738</td></tr><tr><td>Buildings and improvements</td><td>478,740</td><td>159,643</td><td>46,056</td></tr><tr><td>Acquired lease intangibles</td><td>50,813</td><td>24,014</td><td>4,592</td></tr><tr><td>Real property held for sale</td><td>22,032</td><td>—</td><td>—</td></tr><tr><td>Receivables and other assets</td><td>1,185</td><td>10</td><td>—</td></tr><tr><td>Total assets acquired \( ^{(1)} \)</td><td>630,009</td><td>224,232</td><td>56,386</td></tr><tr><td>Secured debt</td><td>(169,156)</td><td>(25,708)</td><td>—</td></tr><tr><td>Accrued expenses and other liabilities</td><td>(14,896)</td><td>(3,181)</td><td>(1,670)</td></tr><tr><td>Total liabilities assumed</td><td>(184,052)</td><td>(28,889)</td><td>(1,670)</td></tr><tr><td>Noncontrolling interests</td><td>—</td><td>(9,080)</td><td>—</td></tr><tr><td>Non-cash acquisition related activity \( ^{(2)} \)</td><td>—</td><td>—</td><td>(15,013)</td></tr><tr><td>Cash disbursed for acquisitions</td><td>445,957</td><td>186,263</td><td>39,703</td></tr><tr><td>Construction in progress additions</td><td>26,565</td><td>37,094</td><td>113,933</td></tr><tr><td>Capitalized interest</td><td>(2,477)</td><td>(2,406)</td><td>(3,723)</td></tr><tr><td>Accruals \( ^{(3)} \)</td><td>(339)</td><td>13,615</td><td>(19,321)</td></tr><tr><td>Cash disbursed for construction in progress</td><td>23,749</td><td>48,303</td><td>90,889</td></tr><tr><td>Capital improvements to existing properties</td><td>55,136</td><td>44,814</td><td>47,870</td></tr><tr><td>Total cash invested in real property, net of cash acquired</td><td>$ 524,842</td><td>$279,380</td><td>$178,462</td></tr></table>

(1) Excludes $2,719,000 of unrestricted and restricted cash acquired during the year ended December 31, 2018.

(2) Relates to the acquisition of assets previously financed as real estate loans. Please refer to Note 6 for additional information.

(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.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## 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):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended</td></tr><tr><td>December 31, 2018</td><td>December 31, 2017</td><td>December 31, 2016</td></tr><tr><td>Development projects:</td><td></td><td></td><td></td></tr><tr><td>Seniors Housing Operating</td><td>$ 86,931</td><td>$ 3,634</td><td>$ 18,979</td></tr><tr><td>Triple-net</td><td>90,055</td><td>283,472</td><td>46,094</td></tr><tr><td>Outpatient Medical</td><td>11,358</td><td>63,036</td><td>108,001</td></tr><tr><td>Total development projects</td><td>188,344</td><td>350,142</td><td>173,074</td></tr><tr><td>Expansion projects</td><td>20,029</td><td>10,336</td><td>11,363</td></tr><tr><td>Total construction in progress conversions</td><td>$208,373</td><td>$360,478</td><td>$184,437</td></tr></table>

At December 31, 2018, future minimum lease payments receivable under operating leases (excluding properties in our Seniors Housing Operating partnerships and excluding any operating expense reimbursements) are as follows (in thousands):

<table><tr><td>2019</td><td>$ 1,309,186</td></tr><tr><td>2020</td><td>1,275,683</td></tr><tr><td>2021</td><td>1,245,611</td></tr><tr><td>2022</td><td>1,222,519</td></tr><tr><td>2023</td><td>1,171,081</td></tr><tr><td>Thereafter</td><td>9,359,018</td></tr><tr><td>Totals</td><td>$15,583,098</td></tr></table>



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## 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):

<table><tr><td></td><td>December 31, 2018</td><td>December 31, 2017</td></tr><tr><td>Assets:</td><td></td><td></td></tr><tr><td>In place lease intangibles</td><td>$ 1,410,725</td><td>$ 1,352,139</td></tr><tr><td>Above market tenant leases</td><td>63,935</td><td>58,443</td></tr><tr><td>Below market ground leases</td><td>64,513</td><td>58,784</td></tr><tr><td>Lease commissions</td><td>41,986</td><td>33,105</td></tr><tr><td>Gross historical cost</td><td>1,581,159</td><td>1,502,471</td></tr><tr><td>Accumulated amortization</td><td>(1,197,336)</td><td>(1,125,437)</td></tr><tr><td>Net book value</td><td>$ 383,823</td><td>$ 377,034</td></tr><tr><td>Weighted-average amortization period in years</td><td>16.0</td><td>15.1</td></tr><tr><td>Liabilities:</td><td></td><td></td></tr><tr><td>Below market tenant leases</td><td>$ 81,676</td><td>$ 60,430</td></tr><tr><td>Above market ground leases</td><td>8,540</td><td>8,540</td></tr><tr><td>Gross historical cost</td><td>90,216</td><td>68,970</td></tr><tr><td>Accumulated amortization</td><td>(44,266)</td><td>(39,629)</td></tr><tr><td>Net book value</td><td>$ 45,950</td><td>$ 29,341</td></tr><tr><td>Weighted-average amortization period in years</td><td>14.7</td><td>20.1</td></tr></table>

The following is a summary of real estate intangible amortization income (expense) for the periods presented (in thousands):

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td><td></td></tr><tr><td>Rental income related to (above)/below market tenant leases, net</td><td>$ (1,269)</td><td>$ 875</td><td>$ 919</td><td></td></tr><tr><td>Property operating expenses related to above/(below) market ground leases, net</td><td>(1,339)</td><td>(1,231)</td><td>(1,241)</td><td></td></tr><tr><td>Depreciation and amortization related to in place lease intangibles and lease commissions</td><td>(122,515)</td><td>(145,132)</td><td>(132,141)</td><td></td></tr></table>

The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):

<table><tr><td></td><td>Assets</td><td>Liabilities</td></tr><tr><td>2019</td><td>$ 97,199</td><td>$ 7,005</td></tr><tr><td>2020</td><td>62,641</td><td>6,475</td></tr><tr><td>2021</td><td>29,855</td><td>5,838</td></tr><tr><td>2022</td><td>24,270</td><td>5,300</td></tr><tr><td>2023</td><td>20,304</td><td>3,440</td></tr><tr><td>Thereafter</td><td>149,554</td><td>17,892</td></tr><tr><td>Totals</td><td>$383,823</td><td>$45,950</td></tr></table>

## 5. Dispositions and Assets Held for Sale

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



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2018, 13 seniors housing operating, 40 triple-net and two outpatient medical properties with an aggregate net real estate balance of $590,271,000 were classified as held for sale. Impairment of assets, as reflected in our Consolidated Statements of Comprehensive Income, primarily represents the charges necessary to adjust the carrying values of certain properties to estimated fair values less costs to sell. The following is a summary of our real property disposition activity for the periods presented (in thousands):**

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended</td></tr><tr><td>December 31, 2018</td><td>December 31, 2017</td><td>December 31, 2016</td><td></td></tr><tr><td>Real property dispositions:</td><td></td><td></td><td></td><td></td></tr><tr><td>Seniors Housing Operating</td><td>$ 36,627</td><td>$ 74,832</td><td>$ —</td><td></td></tr><tr><td>Triple-net</td><td>835,093</td><td>916,689</td><td>1,773,614</td><td></td></tr><tr><td>Outpatient Medical</td><td>253,397</td><td>19,697</td><td>78,786</td><td></td></tr><tr><td>Total dispositions</td><td>1,125,117</td><td>1,011,218</td><td>1,852,400</td><td></td></tr><tr><td>Gain (loss) on sales of real property, net</td><td>415,575</td><td>344,250</td><td>364,046</td><td></td></tr><tr><td>Net other assets (liabilities) disposed</td><td>1,178</td><td>22,546</td><td>133,622</td><td></td></tr><tr><td>Proceeds from real property sales</td><td>$1,541,870</td><td>$1,378,014</td><td>$2,350,068</td><td></td></tr></table>

During the year ended December 31, 2016, we completed two portfolio dispositions of properties leased to Genesis HealthCare (“Genesis”) for which we received loans in the amount of $74,445,000 for termination fees relating to the properties sold under the master lease. The related termination fee income has been deferred and will be recognized as the principal balance of the loans are repaid. At December 31, 2018, $61,994,000 of principal is outstanding on the loans.

## Dispositions and Assets Held for Sale

Pursuant to our adoption of ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (ASU 2014-08”), operating results attributable to properties sold subsequent to or classified as held for sale after January 1, 2014 and which do not meet the definition of discontinued operations are no longer reclassified on our consolidated statements of comprehensive income. The following represents the activity related to these properties for the periods presented (in thousands):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td></tr><tr><td>Total revenues</td><td>$148,725</td><td>$275,087</td><td>$565,450</td></tr><tr><td>Expenses:</td><td></td><td></td><td></td></tr><tr><td>Interest expense</td><td>294</td><td>6,655</td><td>52,675</td></tr><tr><td>Property operating expenses</td><td>81,698</td><td>81,182</td><td>89,666</td></tr><tr><td>Provision for depreciation</td><td>16,900</td><td>55,294</td><td>122,153</td></tr><tr><td>Total expenses</td><td>98,892</td><td>143,131</td><td>264,494</td></tr><tr><td>Income (loss) from real estate dispositions, net</td><td>$ 49,833</td><td>$131,956</td><td>$300,956</td></tr></table>



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## 6. Real Estate Loans Receivable

The following is a summary of our real estate loans receivable (in thousands):

<table><tr><td rowspan="2"></td><td colspan="2">December 31,</td></tr><tr><td>2018</td><td>2017</td></tr><tr><td>Mortgage loans</td><td>$317,443</td><td>$374,492</td></tr><tr><td>Other real estate loans</td><td>81,268</td><td>121,379</td></tr><tr><td>Totals</td><td>$398,711</td><td>$495,871</td></tr></table>

The following is a summary of our real estate loan activity for the periods presented (in thousands):

<table><tr><td rowspan="2"></td><td colspan="6">Year Ended</td></tr><tr><td colspan="3">December 31, 2018</td><td colspan="3">December 31, 2017</td></tr><tr><td></td><td>Seniors Housing Operating</td><td>Outpatient Medical</td><td>Totals</td><td>Outpatient Medical</td><td>Totals</td><td>Outpatient Medical</td></tr><tr><td>Advances on real estate loans receivable:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Investments in new loans</td><td>$11,806</td><td>$ 13,062</td><td>$23,421</td><td>$ 48,289</td><td>$ 12,091</td><td>$ —</td></tr><tr><td>Draws on existing loans</td><td>—</td><td>34,759</td><td>—</td><td>34,759</td><td>71,647</td><td>—</td></tr><tr><td>Net cash advances on real estate loans</td><td>11,806</td><td>47,822</td><td>23,421</td><td>83,048</td><td>83,738</td><td>—</td></tr><tr><td>Receipts on real estate loans receivable:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loan payoffs</td><td>15,000</td><td>116,161</td><td>—</td><td>131,161</td><td>157,912</td><td>60,500</td></tr><tr><td>Principal payments on loans</td><td>—</td><td>49,669</td><td>—</td><td>49,669</td><td>1,219</td><td>—</td></tr><tr><td>Sub-total</td><td>15,000</td><td>165,830</td><td>—</td><td>180,830</td><td>159,131</td><td>60,500</td></tr><tr><td>Less: Non-cash activity(1)</td><td>—</td><td>—</td><td>—</td><td>—</td><td>(63,108)</td><td>(60,500)</td></tr><tr><td>Net cash receipts on real estate loans</td><td>15,000</td><td>165,830</td><td>—</td><td>180,830</td><td>96,023</td><td>—</td></tr><tr><td>Net cash advances (receipts) on real estate loans</td><td>$ (3,194)</td><td>$ (118,008)</td><td>$23,421</td><td>$ (97,781)</td><td>$ (12,285)</td><td>$ —</td></tr></table>

(1) Triple-net primarily represents acquisitions of assets previously financed as real estate loans. Please see Note 3 for further information. Outpatient Medical represents a deed in lieu of foreclosure on a previously financed first mortgage property for the year ended December 31, 2017 and acquisition of assets previously financed as real estate loans for the year ended December 31, 2016.

In 2016, we restructured two triple-net real estate loans with Genesis. The existing loans, with a combined principal balance of $317,000,000, were scheduled to mature in 2017 and 2018. These loans were restructured into four separate loans effective October 1, 2016, one of which was repaid during 2017. Each loan had a five year term, a 10% interest rate and 25 basis point annual escalator. We recorded a loan loss charge in the amount of $6,935,000 on one of the loans as the present value of expected future cash flows was less than the carrying value of the loan. During 2017, we recorded a provision for loan loss of $62,966,000 relating to three real estate loans receivable from Genesis. During 2018, aggregate principal payments of $85,289,000 were received on the loans. The allowance for losses on loans receivable totals $68,372,000 and is deemed to be sufficient to absorb



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

expected losses relating to the loans. Such allowance was based on an estimation of expected future cash flows discounted at the effective interest rate for each loan. In addition, at December 31, 2018, we had one real estate loan with an outstanding balance of $2,567,000 on non-accrual status. No provision for loan loss has been recorded for this loan given the underlying collateral value.

The following is a summary of the allowance for losses on loans receivable for the periods presented (in thousands):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Balance at beginning of year</td><td>$68,372</td><td>$ 6,563</td><td>$ —</td></tr><tr><td>Provision for loan losses \( ^{(1)} \)</td><td>—</td><td>62,966</td><td>6,935</td></tr><tr><td>Change in present value</td><td>—</td><td>(1,157)</td><td>(372)</td></tr><tr><td>Balance at end of year</td><td>$68,372</td><td>$68,372</td><td>$6,563</td></tr></table>

(1) Excludes direct write down of an impaired loan receivable in 2016.

The following is a summary of our impaired loans (in thousands):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Balance of impaired loans at end of year</td><td>$189,272</td><td>$282,882</td><td>$377,549</td></tr><tr><td>Allowance for loan losses</td><td>68,372</td><td>68,372</td><td>6,563</td></tr><tr><td>Balance of impaired loans not reserved</td><td>$120,900</td><td>$214,510</td><td>$370,986</td></tr><tr><td>Average impaired loans for the year</td><td>$236,077</td><td>$330,216</td><td>$188,775</td></tr><tr><td>Interest recognized on impaired loans \( ^{(1)} \)</td><td>17,241</td><td>27,793</td><td>8,707</td></tr></table>

(1) Represents cash interest recognized in the period since loans were identified as impaired.

## 7. 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):

<table><tr><td></td><td>Percentage Ownership \( ^{(1)} \)</td><td>December 31, 2018</td><td>December 31, 2017</td></tr><tr><td>Seniors Housing Operating</td><td>10% to 50%</td><td>$344,982</td><td>$352,430</td></tr><tr><td>Triple-net</td><td>10% to 49%</td><td>34,284</td><td>22,856</td></tr><tr><td>Outpatient Medical</td><td>43% to 50%</td><td>103,648</td><td>70,299</td></tr><tr><td>Total</td><td></td><td>$482,914</td><td>$445,585</td></tr></table>

(1) Excludes ownership of in substance real estate.

During the year ended December 31, 2017, we increased our ownership in Sunrise Senior Living Management, Inc. (“Sunrise”) from 24% to 34%. Sunrise provides comprehensive property management and accounting services with respect to certain of our seniors housing operating properties that Sunrise operates, for



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

which we pay annual management fees pursuant to long-term management agreements. Our management agreements with Sunrise have initial terms expiring through December 2032 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, 2018, 2017 and 2016, we recognized fees to Sunrise of $36,378,000, $37,573,000, and $37,751,000, respectively, which are reflected within property operating expenses in our Consolidated Statements of Comprehensive Income.

At December 31, 2018, the aggregate unamortized basis difference of our joint venture investments of $105,471,000 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 entity. This difference is being amortized over the remaining useful life of the related assets and included in the reported amount of income from unconsolidated entities.

## 8. Credit Concentration

We use consolidated net operating income (“NOI”) as our credit concentration metric. See Note 17 for additional information and reconciliation. The following table summarizes certain information about our credit concentration for the year ended December 31, 2018, excluding our share of NOI in unconsolidated entities (dollars in thousands):

<table><tr><td></td><td>Number of Properties</td><td>Total NOI</td><td>Percent of NOI \( ^{(2)} \)</td></tr><tr><td>Concentration by relationship: \( ^{(1)} \)</td><td></td><td></td><td></td></tr><tr><td>Sunrise Senior Living \( ^{(3)} \)</td><td>161</td><td>$ 335,456</td><td>15%</td></tr><tr><td>Revera \( ^{(3)} \)</td><td>98</td><td>154,194</td><td>7%</td></tr><tr><td>Brookdale Senior Living</td><td>102</td><td>142,768</td><td>6%</td></tr><tr><td>Genesis HealthCare</td><td>87</td><td>137,054</td><td>6%</td></tr><tr><td>Benchmark Senior Living</td><td>48</td><td>99,439</td><td>4%</td></tr><tr><td>Remaining portfolio</td><td>1,014</td><td>1,398,571</td><td>62%</td></tr><tr><td>Totals</td><td>1,510</td><td>$2,267,482</td><td>100%</td></tr></table>

(1) Genesis is in our Triple-net segment. Sunrise Senior Living and Revera are in our Seniors Housing Operating segment. Brookdale Senior Living and Benchmark Senior Living are in both our Triple-net and Seniors Housing Operating segments.

(2) NOI with our top five relationships comprised 41% of total NOI for the year ending December 31, 2017.

(3) Revera owns a controlling interest in Sunrise Senior Living. For the year ended December 31, 2018, we recognized $1,154,025,000 of revenue from properties managed by Sunrise Senior Living.

## 9. Borrowings Under Credit Facilities and Related Items

At December 31, 2018, we had a primary unsecured credit facility with a consortium of 31 banks that includes a $3,000,000,000 unsecured revolving credit facility, 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, 2018). Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

interest rate (3.33% at December 31, 2018). The applicable margin is based on our debt ratings and was 0.825% at December 31, 2018. 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, 2018. 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.

The following information relates to aggregate borrowings under the primary unsecured revolving credit facility for the periods presented (dollars in thousands):

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td><td></td></tr><tr><td>Balance outstanding at year end</td><td>$1,147,000</td><td>$ 719,000</td><td>$ 645,000</td><td></td></tr><tr><td>Maximum amount outstanding at any month end</td><td>$2,148,000</td><td>$1,010,000</td><td>$1,560,000</td><td></td></tr><tr><td>Average amount outstanding (total of daily principal balances divided by days in period)</td><td>$ 950,581</td><td>$ 597,422</td><td>$ 762,896</td><td></td></tr><tr><td>Weighted-average interest rate (actual interest expense divided by average borrowings outstanding)</td><td>3.07%</td><td>2.02%</td><td>1.39%</td><td></td></tr></table>

## 10. 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 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 (1) 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 (2) 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, 2018, the annual principal payments due on these debt obligations were as follows (in thousands):

<table><tr><td></td><td>Senior Unsecured Notes(1,2)</td><td>Secured Debt (1,3)</td><td>Totals</td></tr><tr><td>2019</td><td>$ 600,000</td><td>$ 508,899</td><td>$ 1,108,899</td></tr><tr><td>2020(4)</td><td>$ 677,489</td><td>138,288</td><td>815,777</td></tr><tr><td>2021</td><td>$ 450,000</td><td>$ 369,124</td><td>$ 819,124</td></tr><tr><td>2022</td><td>$ 600,000</td><td>$ 280,418</td><td>$ 880,418</td></tr><tr><td>2023(5,6)</td><td>$ 1,783,325</td><td>$ 325,371</td><td>$ 2,108,696</td></tr><tr><td>Thereafter(7,8)</td><td>$ 5,589,170</td><td>$ 863,611</td><td>$ 6,452,781</td></tr><tr><td>Totals</td><td>$9,699,984</td><td>$2,485,711</td><td>$12,185,695</td></tr></table>



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5) Includes a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $183,325,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2018). The loan matures on July 19, 2023 and bears interest at the Canadian Dealer Offered Rate plus 0.9% (3.15% at December 31, 2018).

(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% (3.37% at December 31, 2018).

(7) Includes a £550,000,000 4.80% senior unsecured notes due 2028 (approximately $701,470,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on December 31, 2018).

(8) Includes a £500,000,000 4.50% senior unsecured notes due 2034 (approximately $637,700,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on December 31, 2018).

The following is a summary of our senior unsecured note principal activity during the periods presented (dollars in thousands):

<table><tr><td rowspan="3"></td><td colspan="6">Year Ended</td></tr><tr><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td><td colspan="2">December 31, 2016</td></tr><tr><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg.Interest Rate</td></tr><tr><td>Beginning balance</td><td>$ 8,417,447</td><td>4.31%</td><td>$8,260,038</td><td>4.25%</td><td>$8,645,758</td><td>4.24%</td></tr><tr><td>Debt issued</td><td>2,850,000</td><td>4.57%</td><td>7,500</td><td>1.97%</td><td>705,000</td><td>4.23%</td></tr><tr><td>Debt extinguished</td><td>(1,450,000)</td><td>3.46%</td><td>(5,000)</td><td>1.83%</td><td>(850,000)</td><td>4.19%</td></tr><tr><td>Foreign currency</td><td>(117,463)</td><td>4.16%</td><td>154,909</td><td>4.29%</td><td>(240,720)</td><td>4.57%</td></tr><tr><td>Ending balance</td><td>$ 9,699,984</td><td>4.48%</td><td>$8,417,447</td><td>4.31%</td><td>$8,260,038</td><td>4.25%</td></tr></table>

The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):

<table><tr><td rowspan="3"></td><td colspan="6">Year Ended</td></tr><tr><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td><td colspan="2">December 31, 2016</td></tr><tr><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg. Interest Rate</td><td>Amount</td><td>Weighted Avg.Interest Rate</td></tr><tr><td>Beginning balance</td><td>$2,618,408</td><td>3.76%</td><td>$ 3,465,066</td><td>4.09%</td><td>$3,478,207</td><td>4.44%</td></tr><tr><td>Debt issued</td><td>45,447</td><td>3.40%</td><td>241,772</td><td>2.82%</td><td>460,015</td><td>2.65%</td></tr><tr><td>Debt assumed</td><td>292,887</td><td>4.64%</td><td>23,094</td><td>6.67%</td><td>60,898</td><td>4.30%</td></tr><tr><td>Debt extinguished</td><td>(306,553)</td><td>5.36%</td><td>(1,080,268)</td><td>5.25%</td><td>(489,293)</td><td>5.11%</td></tr><tr><td>Debt deconsolidated</td><td>—</td><td>—%</td><td>(60,000)</td><td>3.80%</td><td>—</td><td>—%</td></tr><tr><td>Principal payments</td><td>(56,288)</td><td>3.91%</td><td>(64,078)</td><td>4.34%</td><td>(74,466)</td><td>4.66%</td></tr><tr><td>Foreign currency</td><td>(108,190)</td><td>3.33%</td><td>92,822</td><td>3.16%</td><td>29,705</td><td>3.67%</td></tr><tr><td>Ending balance</td><td>$2,485,711</td><td>3.90%</td><td>$ 2,618,408</td><td>3.76%</td><td>$3,465,066</td><td>4.09%</td></tr></table>

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, 2018, we were in compliance with all of the covenants under our debt agreements.

## 11. 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. Our risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes derivative financial instruments and debt issued in foreign currencies to offset a portion of these risks.



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## Foreign Currency Forward Contracts Designated as Cash Flow Hedges

For instruments that are designated as 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.

## 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.

In the second quarter of 2018, we redesignated these derivative financial instruments that qualify as hedges of net investments in foreign operations using the spot method in order to more closely align the underlying economics of the hedged transactions. The changes in fair values and the excluded components of derivative instruments designated as net investment hedges are recognized as a cumulative translation adjustment component of OCI. The cross currency basis spread is recognized in interest expense on the Consolidated Statement of Comprehensive Income using the swap accrual process. Prior to the adoption of ASU 2017-12, all settlements and changes in the fair values of these instruments were recognized as a cumulative translation adjustment component of OCI and there had been no ineffectiveness on these hedging relationships.

During the years ended December 31, 2018 and 2017, we settled certain net investment hedges generating cash proceeds of $70,897,000 and $52,719,000, respectively. The balance of the cumulative translation adjustment will be reclassified to earnings when 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 changes in the fair value of these instruments are recorded in interest expense on the Consolidated Statement 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 the fair values of these instruments are also recorded in interest expense.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):

<table><tr><td></td><td>December 31, 2018</td><td>December 31, 2017</td></tr><tr><td>Derivatives designated as net investment hedges:</td><td></td><td></td></tr><tr><td>Denominated in Canadian Dollars</td><td>$ 575,000</td><td>$ 575,000</td></tr><tr><td>Denominated in Pounds Sterling</td><td>£ 890,708</td><td>£ 550,000</td></tr><tr><td>Financial instruments designated as net investment hedges:</td><td></td><td></td></tr><tr><td>Denominated in Canadian Dollars</td><td>$ 250,000</td><td>$ 250,000</td></tr><tr><td>Denominated in Pounds Sterling</td><td>£1,050,000</td><td>£1,050,000</td></tr><tr><td>Derivatives designated as cash flow hedges:</td><td></td><td></td></tr><tr><td>Denominated in Canadian Dollars</td><td>$ —</td><td>$ 36,000</td></tr><tr><td>Derivative instruments not designated:</td><td></td><td></td></tr><tr><td>Interest rate caps denominated in U.S. Dollars</td><td>$ 405,819</td><td>$ 408,007</td></tr><tr><td>Forward purchase contracts denominated in Canadian Dollars</td><td>$ (325,000)</td><td>$ —</td></tr><tr><td>Forward sales contracts denominated in Canadian Dollars</td><td>$ 405,000</td><td>$ 80,000</td></tr><tr><td>Forward purchase contracts denominated in Pounds Sterling</td><td>£ (350,000)</td><td>£ —</td></tr><tr><td>Forward sales contracts denominated in Pounds Sterling</td><td>£ 350,000</td><td>£ —</td></tr></table>

The following presents the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the periods presented (in thousands):

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended</td></tr><tr><td>Location</td><td>December 31, 2018</td><td>December 31, 2017</td><td>December 31, 2016</td></tr><tr><td>Gain (loss) on derivative instruments designated as hedges recognized in income</td><td>Interest expense</td><td>$ 12,271</td><td>$ (2,476)</td><td>$ 7,871</td></tr><tr><td>Gain (loss) on derivative instruments not designated as hedges recognized in income</td><td>Interest expense</td><td>$ 5,233</td><td>$ (49)</td><td>$ 673</td></tr><tr><td>Gain on release of cumulative translation adjustment related to ineffectiveness on net investment hedge</td><td>Loss (gain) on derivatives, net</td><td>$ —</td><td>$ —</td><td>$ (2,516)</td></tr><tr><td>Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI</td><td>OCI</td><td>$211,390</td><td>$(252,168)</td><td>$357,021</td></tr></table>

## 12. Commitments and Contingencies

At December 31, 2018, we had 14 outstanding letter of credit obligations totaling $50,805,000 and expiring between 2019 and 2024. At December 31, 2018, we had outstanding construction in process of $194,365,000 for leased properties and were committed to providing additional funds of approximately $436,984,000 to complete construction. Purchase obligations at December 31, 2018, include $1,250,000,000 representing a definitive agreement to acquire outpatient medical facilities in 2019. Purchase obligations also include contingent purchase obligations totaling $17,309,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Rents due from the tenant are increased to reflect the additional investment in the property. During the year ended December 31, 2017, we finalized an agreement with



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the University of Toledo Foundation to transfer our corporate headquarters as a gift and recognized an expense of $40,730,000.

We evaluate our leases for operating versus capital lease treatment in accordance with ASC 840. A lease is classified as a capital lease if it provides for transfer of ownership of the leased asset at the end of the lease term, contains a bargain purchase option, has a lease term greater than 75% of the economic life of the leased asset, or if the net present value of the future minimum lease payments are in excess of 90% of the fair value of the leased asset. Certain leases contain bargain purchase options and have been classified as capital leases. At December 31, 2018, we had operating lease obligations of $1,138,046,000 relating to certain ground leases and company office space. Regarding the ground leases, we have sublease agreements with certain of our operators that require the operators to reimburse us for our monthly operating lease obligations. At December 31, 2018, aggregate future minimum rentals to be received under these noncancelable subleases totaled $72,789,000.

At December 31, 2018, future minimum lease payments due under operating and capital leases are as follows (in thousands):

<table><tr><td></td><td>Operating Leases</td><td>Capital Leases \( ^{(1)} \)</td></tr><tr><td>2019</td><td>$ 18,242</td><td>$ 4,173</td></tr><tr><td>2020</td><td>17,785</td><td>4,173</td></tr><tr><td>2021</td><td>17,607</td><td>4,173</td></tr><tr><td>2022</td><td>16,961</td><td>4,173</td></tr><tr><td>2023</td><td>17,004</td><td>67,573</td></tr><tr><td>Thereafter</td><td>1,050,447</td><td>—</td></tr><tr><td>Totals</td><td>$1,138,046</td><td>$84,265</td></tr></table>

(1) Amounts above represent principal and interest obligations under capital lease arrangements. Related assets with a gross value of $167,324,000 and accumulated depreciation of $33,676,000 are recorded in real property.

## 13. Stockholders' Equity

The following is a summary of our stockholders' equity capital accounts as of the dates indicated:

<table><tr><td></td><td>December 31, 2018</td><td>December 31, 2017</td></tr><tr><td>Preferred Stock, $1.00 par value:</td><td></td><td></td></tr><tr><td>Authorized shares</td><td>50,000,000</td><td>50,000,000</td></tr><tr><td>Issued shares</td><td>14,375,000</td><td>14,375,000</td></tr><tr><td>Outstanding shares</td><td>14,369,965</td><td>14,370,060</td></tr><tr><td>Common Stock, $1.00 par value:</td><td></td><td></td></tr><tr><td>Authorized shares</td><td>700,000,000</td><td>700,000,000</td></tr><tr><td>Issued shares</td><td>384,849,236</td><td>372,852,311</td></tr><tr><td>Outstanding shares</td><td>383,674,603</td><td>371,731,551</td></tr></table>



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Preferred Stock. The following is a summary of our preferred stock activity during the periods presented:

<table><tr><td rowspan="2"></td><td colspan="6">Year Ended</td></tr><tr><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td><td colspan="2">December 31, 2016</td></tr><tr><td></td><td>Shares</td><td>Weighted Avg. Dividend Rate</td><td>Shares</td><td>Weighted Avg. Dividend Rate</td><td>Shares</td><td>Weighted Avg Dividend Rate</td></tr><tr><td>Beginning balance</td><td>14,370,060</td><td>6.50%</td><td>25,875,000</td><td>6.50%</td><td>25,875,000</td><td>6.50%</td></tr><tr><td>Shares redeemed</td><td>—</td><td>—%</td><td>(11,500,000)</td><td>6.50%</td><td>—</td><td>—%</td></tr><tr><td>Shares converted</td><td>(95)</td><td>6.50%</td><td>(4,940)</td><td>6.50%</td><td>—</td><td>—%</td></tr><tr><td>Ending balance</td><td>14,369,965</td><td>6.50%</td><td>14,370,060</td><td>6.50%</td><td>25,875,000</td><td>6.50%</td></tr></table>

During the three months ended March 31, 2011, we issued 14,375,000 of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock (the "Series I Preferred Stock"). These shares have a liquidation value of $50.00 per share. Dividends are payable quarterly in arrears. The Series I Preferred Stock is not redeemable by us and are convertible, at the holder's option, into 0.8460 shares of common stock (equal to an initial conversion price of approximately $59.10). On or after April 30, 2018, we may at our option cause all outstanding shares of the Series I Preferred Stock to be automatically converted into a number of shares of common stock equal to the then-prevailing conversion rate if the daily volume-weighted average prices of our common stock for each day equals or exceeds 130% of the then-prevailing conversion price for at least 20 trading days in a period of 30 consecutive trading days.

During the three months ended March 31, 2012, we issued 11,500,000 of 6.50% Series J Cumulative Redeemable Preferred Stock. During the year ended December 31, 2017, we recognized a charge of $9,769,000 in connection with the redemption of the Series J preferred stock.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common Stock. The following is a summary of our common stock activity during the periods indicated (dollars in thousands, except average price amounts):

<table><tr><td></td><td>Shares Issued</td><td>Average Price</td><td>Gross Proceeds</td><td>Net Proceeds</td></tr><tr><td>2016 Dividend reinvestment plan issuances</td><td>4,145,457</td><td>$70.40</td><td>$291,852</td><td>$291,571</td></tr><tr><td>2016 Option exercises</td><td>141,405</td><td>47.13</td><td>6,664</td><td>6,664</td></tr><tr><td>2016 Equity Shelf Program issuances</td><td>3,134,901</td><td>76.01</td><td>238,286</td><td>235,959</td></tr><tr><td>2016 Stock incentive plans, net of forfeitures</td><td>402,740</td><td></td><td>—</td><td>—</td></tr><tr><td>2016 Totals</td><td>7,824,503</td><td></td><td>$536,802</td><td>$534,194</td></tr><tr><td>2017 Dividend reinvestment plan issuances</td><td>5,640,008</td><td>$70.13</td><td>$395,526</td><td>$394,639</td></tr><tr><td>2017 Option exercises</td><td>252,979</td><td>51.16</td><td>12,942</td><td>12,942</td></tr><tr><td>2017 Equity Shelf Program issuances</td><td>2,986,574</td><td>72.30</td><td>215,917</td><td>214,406</td></tr><tr><td>2017 Preferred stock conversions</td><td>4,300</td><td></td><td>—</td><td>—</td></tr><tr><td>2017 Redemption of equity membership units</td><td>91,180</td><td></td><td>—</td><td>—</td></tr><tr><td>2017 Stock incentive plans, net of forfeitures</td><td>154,337</td><td></td><td>—</td><td>—</td></tr><tr><td>2017 Totals</td><td>9,129,378</td><td></td><td>$624,385</td><td>$621,987</td></tr><tr><td>2018 Dividend reinvestment plan issuances</td><td>6,529,417</td><td>$65.55</td><td>$428,009</td><td>$423,075</td></tr><tr><td>2018 Option exercises</td><td>56,960</td><td>42.66</td><td>2,430</td><td>2,430</td></tr><tr><td>2018 Equity Shelf Program issuances</td><td>5,241,349</td><td>69.95</td><td>366,640</td><td>364,070</td></tr><tr><td>2018 Preferred stock conversions</td><td>83</td><td></td><td>—</td><td>—</td></tr><tr><td>2018 Stock incentive plans, net of forfeitures</td><td>115,243</td><td></td><td>—</td><td>—</td></tr><tr><td>2018 Totals</td><td>11,943,052</td><td></td><td>$797,079</td><td>$789,575</td></tr></table>

Dividends. The increase in dividends is primarily attributable to increases in our common shares outstanding, offset by the redemption of the Series J preferred stock, as described above. Please refer to Note 18 for information related to federal income tax of dividends. The following is a summary of our dividend payments (in thousands, except per share amounts):

<table><tr><td rowspan="3"></td><td colspan="6">Year Ended</td></tr><tr><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td><td colspan="2">December 31, 2016</td></tr><tr><td>Per Share</td><td>Amount</td><td>Per Share</td><td>Amount</td><td>Per Share</td><td>Amount</td></tr><tr><td>Common Stock</td><td>$3.4800</td><td>$1,300,141</td><td>$3.4800</td><td>$1,277,321</td><td>$3.4400</td><td>$1,233,519</td></tr><tr><td>Series I Preferred Stock</td><td>3.2500</td><td>46,704</td><td>3.2500</td><td>46,711</td><td>3.2500</td><td>46,719</td></tr><tr><td>Series J Preferred Stock</td><td>—</td><td>—</td><td>0.2347</td><td>2,699</td><td>1.6251</td><td>18,687</td></tr><tr><td>Totals</td><td>$1,346,845</td><td></td><td>$1,326,731</td><td></td><td>$1,298,925</td><td></td></tr></table>



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accumulated Other Comprehensive Income. The following is a summary of accumulated other comprehensive income/(loss) for the periods presented (in thousands):

<table><tr><td rowspan="2"></td><td colspan="5">Unrecognized gains (losses) related to:</td></tr><tr><td>Foreign Currency Translation</td><td>Available for Sale Securities</td><td>Actuarial losses</td><td>Cash Flow Hedges</td><td>Total</td></tr><tr><td>Balance at December 31, 2017</td><td>$ (110,581)</td><td>$ —</td><td>$ (884)</td><td>$—</td><td>$ (111,465)</td></tr><tr><td>Other comprehensive income (loss)</td><td>(18,648)</td><td>—</td><td>344</td><td>—</td><td>(18,304)</td></tr><tr><td>Net current-period other comprehensive income (loss)</td><td>(18,648)</td><td>—</td><td>344</td><td>—</td><td>(18,304)</td></tr><tr><td>Balance at December 31, 2018</td><td>$ (129,229)</td><td>$ —</td><td>$ (540)</td><td>$—</td><td>$ (129,769)</td></tr><tr><td>Balance at December 31, 2016</td><td>$ (173,496)</td><td>$ 5,120</td><td>$ (1,153)</td><td>$ (2)</td><td>$ (169,531)</td></tr><tr><td>Other comprehensive income (loss) before reclassification adjustments</td><td>62,915</td><td>—</td><td>269</td><td>2</td><td>63,186</td></tr><tr><td>Reclassification adjustment for write down of equity investment</td><td>—</td><td>(5,120)</td><td>—</td><td>—</td><td>(5,120)</td></tr><tr><td>Net current-period other comprehensive income (loss)</td><td>62,915</td><td>(5,120)</td><td>269</td><td>2</td><td>58,066</td></tr><tr><td>Balance at December 31, 2017</td><td>$ (110,581)</td><td>$ —</td><td>$ (884)</td><td>$—</td><td>$ (111,465)</td></tr></table>

## 14. Stock Incentive Plans

In May 2016, our shareholders approved the 2016 Long-Term Incentive Plan (“2016 Plan”), which 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. Awards granted after May 5, 2016 are issued out of the 2016 Plan. The awards granted under the Amended and Restated 2005 Long-Term Incentive Plan continue to vest and options expire ten years from the date of grant. 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, and dividend equivalent rights. Vesting periods for options, deferred stock units, and restricted shares generally range from three to five years.

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 two to three years. Generally awards vest over two to three years after the end of the performance period with a portion vesting immediately at 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 both the performance period and vesting 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



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

The following table summarizes compensation expense (a component of general and administrative expenses and property operating expenses) recognized for the periods presented (in thousands):

<table><tr><td rowspan="2"></td><td colspan="4">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td><td></td></tr><tr><td>Stock options</td><td>$ —</td><td>$ 10</td><td>$ 266</td><td></td></tr><tr><td>Restricted stock</td><td>27,646</td><td>19,092</td><td>28,603</td><td></td></tr><tr><td></td><td>$27,646</td><td>$19,102</td><td>$28,869</td><td></td></tr></table>

## 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, 2018, there was $35,834,000 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, 2018:

<table><tr><td rowspan="2"></td><td colspan="2">Restricted Stock</td></tr><tr><td>Number of Shares (000&#x27;s)</td><td>Weighted-Average Grant Date Fair Value</td></tr><tr><td>Non-vested at December 31, 2017</td><td>698</td><td>$61.00</td></tr><tr><td>Vested</td><td>(166)</td><td>63.88</td></tr><tr><td>Granted</td><td>723</td><td>54.16</td></tr><tr><td>Terminated</td><td>(35)</td><td>60.90</td></tr><tr><td>Non-vested at December 31, 2018</td><td>1,220</td><td>$62.56</td></tr></table>



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## 15. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Numerator for basic and diluted earnings per share — net income attributable to common stockholders</td><td>$758,250</td><td>$463,595</td><td>$1,012,397</td></tr><tr><td>Denominator for basic earnings per share: weighted-average shares</td><td>373,620</td><td>367,237</td><td>358,275</td></tr><tr><td>Effect of dilutive securities:</td><td></td><td></td><td></td></tr><tr><td>Employee stock options</td><td>9</td><td>47</td><td>110</td></tr><tr><td>Non-vested restricted shares</td><td>512</td><td>482</td><td>449</td></tr><tr><td>Redeemable shares</td><td>1,096</td><td>1,235</td><td>1,393</td></tr><tr><td>Employee stock purchase program</td><td>13</td><td>—</td><td>—</td></tr><tr><td>Dilutive potential common shares</td><td>1,630</td><td>1,764</td><td>1,952</td></tr><tr><td>Denominator for diluted earnings per share: adjusted-weighted average shares</td><td>375,250</td><td>369,001</td><td>360,227</td></tr><tr><td>Basic earnings per share</td><td>$2.03</td><td>$1.26</td><td>$2.83</td></tr><tr><td>Diluted earnings per share</td><td>$2.02</td><td>$1.26</td><td>$2.81</td></tr></table>

The Series I Cumulative Convertible Perpetual Preferred Stock were excluded from the calculations as the effect of the conversions were anti-dilutive.

## 16. 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 and Other Real Estate Loans Receivable — The carrying value of mortgage loans and other real estate loans receivable is net of related reserves. The fair value 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.



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 — The carrying amount of the primary unsecured credit facility 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.

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 and Cross Currency Swaps — Foreign currency forward contracts and cross currency swaps are recorded in other assets or other liabilities on the balance sheet at fair market value. Fair market value is determined using Level 2 inputs by estimating the future value of the currency pair based on existing exchange rates, comprised of current spot and traded forward points, and calculating a present value of the net amount using a discount factor based on observable traded interest rates.

Redeemable OP Unitholder Interests — Our redeemable OP unitholder interests are recorded on the balance sheet at fair value using Level 2 inputs. 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):

<table><tr><td rowspan="2"></td><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td></tr><tr><td>Carrying Amount</td><td>Fair Value</td><td>Carrying Amount</td><td>Fair Value</td></tr><tr><td>Financial assets:</td><td></td><td></td><td></td><td></td></tr><tr><td>Mortgage loans receivable</td><td>$ 249,071</td><td>$ 257,337</td><td>$ 306,120</td><td>$ 332,508</td></tr><tr><td>Other real estate loans receivable</td><td>81,268</td><td>82,742</td><td>121,379</td><td>125,480</td></tr><tr><td>Equity securities</td><td>11,286</td><td>11,286</td><td>7,269</td><td>7,269</td></tr><tr><td>Cash and cash equivalents</td><td>215,376</td><td>215,376</td><td>243,777</td><td>243,777</td></tr><tr><td>Restricted cash</td><td>100,753</td><td>100,753</td><td>65,526</td><td>65,526</td></tr><tr><td>Foreign currency forward contracts and cross currency swaps</td><td>94,729</td><td>94,729</td><td>15,604</td><td>15,604</td></tr><tr><td>Financial liabilities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Borrowings under unsecured credit facilities</td><td>$1,147,000</td><td>$ 1,147,000</td><td>$ 719,000</td><td>$ 719,000</td></tr><tr><td>Senior unsecured notes</td><td>9,603,299</td><td>10,043,797</td><td>8,331,722</td><td>9,168,432</td></tr><tr><td>Secured debt</td><td>2,476,177</td><td>2,499,130</td><td>2,608,976</td><td>2,641,997</td></tr><tr><td>Foreign currency forward contracts and cross currency swaps</td><td>71,109</td><td>71,109</td><td>38,654</td><td>38,654</td></tr><tr><td>Redeemable OP unitholder interests</td><td>$ 103,071</td><td>$ 103,071</td><td>$ 97,476</td><td>$ 97,476</td></tr></table>



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## 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):

<table><tr><td rowspan="2"></td><td colspan="4">Fair Value Measurements as of December 31, 2018</td></tr><tr><td>Total</td><td>Level 1</td><td>Level 2</td><td>Level 3</td></tr><tr><td>Equity securities</td><td>$ 11,286</td><td>$11,286</td><td>$ —</td><td>$—</td></tr><tr><td>Foreign currency forward contracts and cross currency swaps, net asset (liability) \( ^{(1)} \)</td><td>23,620</td><td>—</td><td>23,620</td><td>—</td></tr><tr><td>Redeemable OP unitholder interests</td><td>103,071</td><td>—</td><td>103,071</td><td>—</td></tr><tr><td>Totals</td><td>$137,977</td><td>$11,286</td><td>$126,691</td><td>$—</td></tr></table>

(1) Please see Note 11 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 have assets and liabilities 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 impairments (if applicable, see Note 5 for impairments of real property and Note 6 for impairments of real estate 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 using unobservable data such as net operating income, 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 business combinations and asset acquisitions using current interest rates at which similar borrowings could be obtained on the transaction date.

## 17. 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 assisted living, independent living/continuing care retirement communities, independent support living (Canada), care homes with and without nursing (U.K.), and combinations thereof that are owned and/or operated through RIDEA structures (see Note 18). Our triple-net properties include the property types described above as well as long-term/post-acute care. 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



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in the management of the property. Our outpatient medical properties include outpatient medical buildings which are typically leased to multiple tenants and generally require a certain level of property management by us.

We evaluate performance based upon 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 because 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 interest income on certain non-real estate investments and 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.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary information for the reportable segments (which excludes unconsolidated entities) during the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands):

<table><tr><td></td><td>Seniors Housing Operating</td><td>Triple-net</td><td>Outpatient Medical</td><td>Non-segment / Corporate</td><td>Total</td></tr><tr><td>Year Ended December 31, 2018:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Resident fees and services</td><td>$ 3,234,852</td><td>$ —</td><td>$ —</td><td>$ —</td><td>$ 3,234,852</td></tr><tr><td>Rental income</td><td>—</td><td>828,865</td><td>551,557</td><td>—</td><td>1,380,422</td></tr><tr><td>Interest income</td><td>578</td><td>54,926</td><td>310</td><td>—</td><td>55,814</td></tr><tr><td>Other income</td><td>5,024</td><td>17,173</td><td>4,939</td><td>2,275</td><td>29,411</td></tr><tr><td>Total revenues</td><td>3,240,454</td><td>900,964</td><td>556,806</td><td>2,275</td><td>4,700,499</td></tr><tr><td>Property operating expenses</td><td>2,255,432</td><td>915</td><td>176,670</td><td>—</td><td>2,433,017</td></tr><tr><td>Consolidated net operating income</td><td>985,022</td><td>900,049</td><td>380,136</td><td>2,275</td><td>2,267,482</td></tr><tr><td>Depreciation and amortization</td><td>529,449</td><td>235,480</td><td>185,530</td><td>—</td><td>950,459</td></tr><tr><td>Interest expense</td><td>69,060</td><td>14,225</td><td>7,051</td><td>436,256</td><td>526,592</td></tr><tr><td>General and administrative</td><td>—</td><td>—</td><td>—</td><td>126,383</td><td>126,383</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>—</td><td>(4,016)</td><td>—</td><td>—</td><td>(4,016)</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>110</td><td>(32)</td><td>11,928</td><td>4,091</td><td>16,097</td></tr><tr><td>Impairment of assets</td><td>7,599</td><td>107,980</td><td>—</td><td>—</td><td>115,579</td></tr><tr><td>Other expenses</td><td>6,624</td><td>90,975 \( ^{(1)} \)</td><td>7,570</td><td>7,729</td><td>112,898</td></tr><tr><td>Income (loss) from continuing operations before income taxes and other items</td><td>372,180</td><td>455,437</td><td>168,057</td><td>(572,184)</td><td>423,490</td></tr><tr><td>Income tax benefit (expense)</td><td>1,202</td><td>1,611</td><td>(125)</td><td>(11,362)</td><td>(8,674)</td></tr><tr><td>(Loss) income from unconsolidated entities</td><td>(28,142)</td><td>21,938</td><td>5,563</td><td>—</td><td>(641)</td></tr><tr><td>Gain (loss) on real estate dispositions, net</td><td>(2,245)</td><td>196,589</td><td>221,231</td><td>—</td><td>415,575</td></tr><tr><td>Income (loss) from continuing operations</td><td>342,995</td><td>675,575</td><td>394,726</td><td>(583,546)</td><td>829,750</td></tr><tr><td>Net income (loss)</td><td>$ 342,995</td><td>$ 675,575</td><td>$ 394,726</td><td>$(583,546)</td><td>$ 829,750</td></tr><tr><td>Total assets</td><td>$14,607,127</td><td>$10,111,227</td><td>$5,426,810</td><td>$ 196,908</td><td>$30,342,072</td></tr></table>

(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 pre-existing relationships.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<table><tr><td></td><td>Seniors Housing Operating</td><td>Triple-net</td><td>Outpatient Medical</td><td>Non-segment / Corporate</td><td>Total</td></tr><tr><td>Year Ended December 31, 2017:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Resident fees and services</td><td>$ 2,779,423</td><td>$ —</td><td>$ —</td><td>$ —</td><td>$ 2,779,423</td></tr><tr><td>Rental income</td><td>—</td><td>885,811</td><td>560,060</td><td>—</td><td>1,445,871</td></tr><tr><td>Interest income</td><td>69</td><td>73,742</td><td>—</td><td>—</td><td>73,811</td></tr><tr><td>Other income</td><td>5,127</td><td>7,531</td><td>3,340</td><td>1,538</td><td>17,536</td></tr><tr><td>Total revenues</td><td>2,784,619</td><td>967,084</td><td>563,400</td><td>1,538</td><td>4,316,641</td></tr><tr><td>Property operating expenses</td><td>1,904,593</td><td>—</td><td>179,332</td><td>—</td><td>2,083,925</td></tr><tr><td>Consolidated net operating income</td><td>880,026</td><td>967,084</td><td>384,068</td><td>1,538</td><td>2,232,716</td></tr><tr><td>Depreciation and amortization</td><td>484,796</td><td>243,830</td><td>193,094</td><td>—</td><td>921,720</td></tr><tr><td>Interest expense</td><td>63,265</td><td>15,194</td><td>10,015</td><td>396,148</td><td>484,622</td></tr><tr><td>General and administrative</td><td>—</td><td>—</td><td>—</td><td>122,008</td><td>122,008</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>—</td><td>2,284</td><td>—</td><td>—</td><td>2,284</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>3,785</td><td>29,083</td><td>4,373</td><td>—</td><td>37,241</td></tr><tr><td>Provision for loan losses</td><td>—</td><td>62,966</td><td>—</td><td>—</td><td>62,966</td></tr><tr><td>Impairment of assets</td><td>21,949</td><td>96,909</td><td>5,625</td><td>—</td><td>124,483</td></tr><tr><td>Other expenses</td><td>8,347</td><td>116,689(1)</td><td>1,911</td><td>50,829(2)</td><td>177,776</td></tr><tr><td>Income (loss) from continuing operations before income taxes and other items</td><td>297,884</td><td>400,129</td><td>169,050</td><td>(567,447)</td><td>299,616</td></tr><tr><td>Income tax benefit (expense)</td><td>(16,430)</td><td>(4,291)</td><td>(1,477)</td><td>2,070</td><td>(20,128)</td></tr><tr><td>(Loss) income from unconsolidated entities</td><td>(105,236)</td><td>19,428</td><td>2,683</td><td>—</td><td>(83,125)</td></tr><tr><td>Gain (loss) on real estate dispositions, net</td><td>56,295</td><td>286,325</td><td>1,630</td><td>—</td><td>344,250</td></tr><tr><td>Income (loss) from continuing operations</td><td>232,513</td><td>701,591</td><td>171,886</td><td>(565,377)</td><td>540,613</td></tr><tr><td>Net income (loss)</td><td>$ 232,513</td><td>$ 701,591</td><td>$ 171,886</td><td>$ (565,377)</td><td>$ 540,613</td></tr><tr><td>Total assets</td><td>$13,432,001</td><td>$9,325,344</td><td>$5,082,145</td><td>$ 104,955</td><td>$27,944,445</td></tr></table>

(1) Primarily represents non-capitalizable transaction costs, including $88,316,000 due to a joint venture transaction with an existing seniors housing operator which converted a portfolio of properties from Triple-net to Seniors Housing Operating and termination/restructuring of pre-existing relationships. In addition, includes $18,294,000 other-than-temporary impairment charge on the Genesis available-for-sale equity investment.

(2) Primarily related to $40,730,000 recognized for the donation of the corporate headquarters.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<table><tr><td></td><td>Seniors Housing Operating</td><td>Triple-net</td><td>Outpatient Medical</td><td>Non-segment / Corporate</td><td>Total</td></tr><tr><td>Year Ended December 31, 2016:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Resident fees and services</td><td>$2,504,731</td><td>$—</td><td>$—</td><td>$—</td><td>$2,504,731</td></tr><tr><td>Rental income</td><td>—</td><td>1,112,325</td><td>536,490</td><td>—</td><td>1,648,815</td></tr><tr><td>Interest income</td><td>4,180</td><td>90,476</td><td>3,307</td><td>—</td><td>97,963</td></tr><tr><td>Other income</td><td>17,085</td><td>6,059</td><td>5,568</td><td>939</td><td>29,651</td></tr><tr><td>Total revenues</td><td>2,525,996</td><td>1,208,860</td><td>545,365</td><td>939</td><td>4,281,160</td></tr><tr><td>Property operating expenses</td><td>1,711,882</td><td>—</td><td>165,101</td><td>—</td><td>1,876,983</td></tr><tr><td>Consolidated net operating income</td><td>814,114</td><td>1,208,860</td><td>380,264</td><td>939</td><td>2,404,177</td></tr><tr><td>Depreciation and amortization</td><td>415,429</td><td>297,197</td><td>188,616</td><td>—</td><td>901,242</td></tr><tr><td>Interest expense</td><td>81,853</td><td>21,370</td><td>19,087</td><td>399,035</td><td>521,345</td></tr><tr><td>General and administrative</td><td>—</td><td>—</td><td>—</td><td>155,241</td><td>155,241</td></tr><tr><td>Loss (gain) on derivatives and financial instruments, net</td><td>—</td><td>68</td><td>—</td><td>(2,516)</td><td>(2,448)</td></tr><tr><td>Transaction costs</td><td>29,207</td><td>10,016</td><td>3,687</td><td>—</td><td>42,910</td></tr><tr><td>Loss (gain) on extinguishment of debt, net</td><td>(88)</td><td>863</td><td>—</td><td>16,439</td><td>17,214</td></tr><tr><td>Provision for loan losses</td><td>—</td><td>6,935</td><td>3,280</td><td>—</td><td>10,215</td></tr><tr><td>Impairment of assets</td><td>12,403</td><td>20,169</td><td>4,635</td><td>—</td><td>37,207</td></tr><tr><td>Other expenses</td><td>—</td><td>—</td><td>—</td><td>11,998</td><td>11,998</td></tr><tr><td>Income (loss) from continuing operations before income taxes and other items</td><td>275,310</td><td>852,242</td><td>160,959</td><td>(579,258)</td><td>709,253</td></tr><tr><td>Income tax benefit (expense)</td><td>(3,762)</td><td>(1,087)</td><td>(511)</td><td>24,488</td><td>19,128</td></tr><tr><td>(Loss) income from unconsolidated entities</td><td>(20,442)</td><td>9,767</td><td>318</td><td>—</td><td>(10,357)</td></tr><tr><td>Gain (loss) on real estate dispositions, net</td><td>9,880</td><td>355,394</td><td>(1,228)</td><td>—</td><td>364,046</td></tr><tr><td>Income from continuing operations</td><td>260,986</td><td>1,216,316</td><td>159,538</td><td>(554,770)</td><td>1,082,070</td></tr><tr><td>Net income (loss)</td><td>$ 260,986</td><td>$1,216,316</td><td>$159,538</td><td>$(554,770)</td><td>$1,082,070</td></tr></table>

Our portfolio of properties and other investments are located in the U.S., the U.K. 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):

<table><tr><td rowspan="3"></td><td colspan="6">Year Ended</td></tr><tr><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td><td colspan="2">December 31, 2016</td></tr><tr><td>Amount</td><td>%</td><td>Amount</td><td>%</td><td>Amount</td><td>%</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>United States</td><td>$3,777,960</td><td>80.4%</td><td>$3,464,527</td><td>80.3%</td><td>$3,453,485</td><td>80.6%</td></tr><tr><td>United Kingdom</td><td>452,956</td><td>9.6%</td><td>407,351</td><td>9.4%</td><td>388,383</td><td>9.1%</td></tr><tr><td>Canada</td><td>469,583</td><td>10.0%</td><td>444,763</td><td>10.3%</td><td>439,292</td><td>10.3%</td></tr><tr><td>Total</td><td>$4,700,499</td><td>100.0%</td><td>$4,316,641</td><td>100.0%</td><td>$4,281,160</td><td>100.0%</td></tr></table>



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<table><tr><td rowspan="3"></td><td colspan="4">As of</td></tr><tr><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td></tr><tr><td>Amount</td><td>%</td><td>Amount</td><td>%</td></tr><tr><td>Assets:</td><td></td><td></td><td></td><td></td></tr><tr><td>United States</td><td>$24,884,292</td><td>82.0%</td><td>$22,274,443</td><td>79.7%</td></tr><tr><td>United Kingdom</td><td>3,078,994</td><td>10.1%</td><td>3,239,039</td><td>11.6%</td></tr><tr><td>Canada</td><td>2,378,786</td><td>7.9%</td><td>2,430,963</td><td>8.7%</td></tr><tr><td>Total</td><td>$30,342,072</td><td>100.0%</td><td>$27,944,445</td><td>100.0%</td></tr></table>

## 18. 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 net capital gains) must be distributed to stockholders. REITs that do not distribute a certain amount of current year taxable income are also subject to a 4% federal excise tax. The main differences between net income for federal income tax purposes and consolidated 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:

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Per share:</td><td></td><td></td><td></td></tr><tr><td>Ordinary dividend \( ^{(1)} \)</td><td>$2.1988</td><td>$1.8117</td><td>$2.5067</td></tr><tr><td>Long-term capital gain/(loss) \( ^{(2)} \)</td><td>1.1153</td><td>1.5755</td><td>0.8760</td></tr><tr><td>Return of capital</td><td>0.1659</td><td>0.0928</td><td>0.0573</td></tr><tr><td>Totals</td><td>$3.4800</td><td>$3.4800</td><td>$3.4400</td></tr></table>

(1) For the year ended December 31, 2018, includes Section 199A dividends of $2.1988. For the years ended December 31, 2017 and 2016, includes Qualified Dividend of $0.0038 and $0.0047, respectively.

(2) For the years ended December 31, 2018, 2017 and 2016, includes Unrecaptured SEC. 1250 Gains of $0.3822, $0.3557 and $0.4120, respectively.

Our consolidated provision for income tax expense (benefit) is as follows for the periods presented (in thousands):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Current</td><td>$15,850</td><td>$ 7,633</td><td>$ 14,944</td></tr><tr><td>Deferred</td><td>(7,176)</td><td>12,495</td><td>(34,072)</td></tr><tr><td>Totals</td><td>$ 8,674</td><td>$20,128</td><td>$(19,128)</td></tr></table>

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, 2018, as a result of



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2018 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, 2018, 2017 and 2016, the foreign tax provision/(benefit) amount included in the consolidated provision for income taxes was $9,804,000, $4,806,000 and $(3,315,000), respectively.

A reconciliation of income taxes, which is computed by applying the federal corporate tax rate for the years ended December 31, 2018, 2017 and 2016, to the income tax expense/(benefit) is as follows for the periods presented (in thousands):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interests and income taxes</td><td>$ 176,069</td><td>$ 199,588</td><td>$ 372,030</td></tr><tr><td>Increase (decrease) in valuation allowance \( ^{(1)} \)</td><td>28,309</td><td>30,445</td><td>(2,128)</td></tr><tr><td>Tax at statutory rate on earnings not subject to federal income taxes</td><td>(206,937)</td><td>(234,468)</td><td>(399,571)</td></tr><tr><td>Foreign permanent depreciation</td><td>8,110</td><td>10,065</td><td>9,205</td></tr><tr><td>Other differences</td><td>3,123</td><td>14,498</td><td>1,336</td></tr><tr><td>Totals</td><td>$ 8,674</td><td>$ 20,128</td><td>$ (19,128)</td></tr></table>

(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):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Investments and property, primarily differences in investment basis, depreciation and amortization, the basis of land assets and the treatment of interests and certain costs</td><td>$ (2,533)</td><td>$ (11,812)</td><td>$ (7,089)</td></tr><tr><td>Operating loss and interest deduction carryforwards</td><td>98,713</td><td>94,654</td><td>82,469</td></tr><tr><td>Expense accruals and other</td><td>48,804</td><td>25,146</td><td>15,978</td></tr><tr><td>Valuation allowance</td><td>(155,592)</td><td>(127,283)</td><td>(96,838)</td></tr><tr><td>Net deferred tax assets (liabilities)</td><td>$ (10,608)</td><td>$ (19,295)</td><td>$ (5,480)</td></tr></table>

We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. We apply the concepts on an entity-by-entity, jurisdiction-by-jurisdiction basis. With respect to the analysis of certain entities in multiple jurisdictions, a significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2018. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth.

On the basis of the evaluations performed as required by the codification, valuation allowances totaling $155,592,000 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 that not realizable. However, the amount of



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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):

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Beginning balance</td><td>$127,283</td><td>$ 96,838</td><td>$98,966</td></tr><tr><td>Expense (benefit)</td><td>28,309</td><td>30,445</td><td>(2,128)</td></tr><tr><td>Ending balance</td><td>$155,592</td><td>$127,283</td><td>$96,838</td></tr></table>

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 (a) the excess of the fair value of the asset over its adjusted tax basis as of the date it became a REIT asset, or (b) 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.

Under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), the REIT may lease “qualified health care properties” on an arm’s-length basis to a TRS if the property is operated on behalf of such subsidiary by a person who qualifies as an “eligible independent contractor.” Generally, the rent received from the TRS will meet the related party rent exception and will be treated as “rents from real property.” 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. We have entered into various joint ventures that were structured under RIDEA. Resident level rents and related operating expenses for these facilities are reported in the consolidated financial statements and are subject to federal, state and foreign income taxes as the operations of such facilities are included in a TRS. Certain net operating loss carryforwards could be utilized to offset taxable income in future years.

Given the applicable statute of limitations, we generally are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2015 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, 2012. We are also subject to audit by the Canada Revenue Agency and provincial authorities generally for periods subsequent to May 2013 related to entities acquired or formed in connection with acquisitions, and by the U.K.’s HM Revenue & Customs for periods subsequent to August 2013 related to entities acquired or formed in connection with acquisitions.

At December 31, 2018, we had a net operating loss (“NOL”) carryforward related to the REIT of $348,031,000. 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, 2017 will expire through 2037. Beginning with tax years after December 31, 2017, the Tax Cuts and Jobs Act eliminates the carryback period, limits the NOLs to 80% of taxable income and replaces the 20-year carryforward period with an indefinite carryforward period.



## WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At December 31, 2018 and 2017, we had an NOL carryforward related to Canadian entities of $154,029,000, and $134,552,000, respectively. These Canadian losses have a 20-year carryforward period. At December 31, 2018 and 2017, we had an NOL carryforward related to U.K. entities of $242,377,000 and $183,712,000, respectively. These U.K. losses do not have a finite carryforward period.

## 19. Quarterly Results of Operations (Unaudited)

The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2018 and 2017 (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.

<table><tr><td rowspan="2"></td><td colspan="5">Year Ended December 31, 2018</td></tr><tr><td>1st Quarter</td><td>2nd Quarter</td><td>3rd Quarter</td><td>4th Quarter</td><td></td></tr><tr><td>Revenues</td><td>$1,096,965</td><td>$1,125,912</td><td>$1,236,379</td><td>$1,241,243</td><td></td></tr><tr><td>Net income (loss) attributable to common stockholders</td><td>437,671</td><td>154,432</td><td>64,384</td><td>101,763</td><td></td></tr><tr><td>Net income (loss) attributable to common stockholders per share:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$ 1.18</td><td>$ 0.42</td><td>$ 0.17</td><td>$ 0.27</td><td></td></tr><tr><td>Diluted</td><td>$ 1.17</td><td>$ 0.41</td><td>$ 0.17</td><td>$ 0.27</td><td></td></tr><tr><td></td><td colspan="5">Year Ended December 31, 2017</td></tr><tr><td></td><td>1st Quarter</td><td>2nd Quarter</td><td>3rd Quarter</td><td>4th Quarter \( ^{(1)} \)</td><td></td></tr><tr><td>Revenues</td><td>$1,062,298</td><td>$1,058,602</td><td>$1,091,483</td><td>$1,104,257</td><td></td></tr><tr><td>Net income attributable to common stockholders</td><td>312,639</td><td>188,429</td><td>74,043</td><td>(111,523)</td><td></td></tr><tr><td>Net income attributable to common stockholders per share:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$ 0.86</td><td>$ 0.51</td><td>$ 0.20</td><td>$ (0.31)</td><td></td></tr><tr><td>Diluted</td><td>$ 0.86</td><td>$ 0.51</td><td>$ 0.20</td><td>$ (0.31)</td><td></td></tr></table>

(1) The decrease in net income (loss) and amounts per share are primarily attributable to $99,821,100 impairment of assets and $62,966,000 provision for loan losses recognized in the fourth quarter.



# WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## 20. Variable Interest Entities

We have entered into joint ventures to own certain seniors housing and outpatient medical assets which are deemed to be variable interest entities (“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):

<table><tr><td></td><td>December 31, 2018</td><td>December 31, 2017</td></tr><tr><td>Assets:</td><td></td><td></td></tr><tr><td>Net real property owned</td><td>$ 973,813</td><td>$1,002,137</td></tr><tr><td>Cash and cash equivalents</td><td>18,678</td><td>12,308</td></tr><tr><td>Receivables and other assets</td><td>14,600</td><td>16,330</td></tr><tr><td>Total assets \( ^{(1)} \)</td><td>$1,007,091</td><td>$1,030,775</td></tr><tr><td>Liabilities and equity:</td><td></td><td></td></tr><tr><td>Secured debt</td><td>$ 465,433</td><td>$ 471,103</td></tr><tr><td>Accrued expenses and other liabilities</td><td>18,229</td><td>14,832</td></tr><tr><td>Total equity</td><td>523,429</td><td>544,840</td></tr><tr><td>Total liabilities and equity</td><td>$1,007,091</td><td>$1,030,775</td></tr></table>

(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.

## 21. Subsequent Events

## Senior Notes Activity

On February 15, 2019, we completed the issuance of $500 million of 3.625% senior unsecured notes due 2024 and $550 million of 4.125% senior unsecured notes due 2029.

On February 15, 2019, we also announced the redemption of $600 million of 4.125% senior unsecured notes due 2019 and $450 million of 6.125% senior unsecured notes due 2020.

## Preferred Stock Activity

On February 21, 2019, we announced that we elected to effect the conversion of all of the outstanding Series I Preferred Stock. Each share of convertible preferred stock will be converted into 0.8857 shares of common stock on February 28, 2019.



## 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, 2018 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, 2018.

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.



# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Shareholders and 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, 2018, 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, 2018, 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, 2018 and 2017, the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedules listed in the index at Item 15(a) and our report dated February 25, 2019 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 25, 2019



## 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 May 1, 2019.

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 May 1, 2019.

## 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 May 1, 2019.

## 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 May 1, 2019.

## 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 May 1, 2019.



## PART IV

## Item 15. Exhibits and Financial Statement Schedules

(a)1. Our Consolidated Financial Statements are included in Part II, Item 8:

Report of Independent Registered Public Accounting Firm 78

Consolidated Balance Sheets — December 31, 2018 and 2017 79

Consolidated Statements of Comprehensive Income — Years ended December 31, 2018, 2017 and 2016 80

Consolidated Statements of Equity — Years ended December 31, 2018, 2017 and 2016 82

Consolidated Statements of Cash Flows — Years ended December 31, 2018, 2017 and 2016 83

Notes to Consolidated Financial Statements 84

2. The following Financial Statement Schedules are included beginning on page 134:

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.

## (b) 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.

2.1 Agreement and Plan of Merger, dated as of April 25, 2018, by and among the Company, Potomac Acquisition LLC, Quality Care Properties, Inc. and certain subsidiaries of Quality Care Properties, Inc. (filed with the Commission as Exhibit 2.1 to the Company’s Form 8-K filed April 26, 2018 (File No. 001-08923), and incorporated herein by reference thereto).

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(b) 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 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(d) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.9 to the Company’s Form 10-Q filed August 9, 2007 (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(h) 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 6, 2014 (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).

3.2 Sixth Amended and Restated By-laws of the Company (filed with the Commission as Exhibit 3.2 to the Company’s Form 8-K filed December 4, 2018 (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(b) Supplemental Indenture No. 1, 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 4.2 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).

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(h) Supplemental Indenture No. 5, dated as of March 14, 2011, 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 March 14, 2011 (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(k) Supplemental Indenture No. 8, dated as of October 7, 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 October 9, 2013 (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(n) Supplemental Indenture No. 11, dated as of May 26, 2015, 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 May 27, 2015 (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).

4.1(p) Supplemental Indenture No. 12, dated as of March 1, 2016, 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 March 3, 2016 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(q) Supplemental Indenture No. 13, dated as of April 10, 2018, 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 10, 2018 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(r) Supplemental Indenture No. 14, dated as of August 16, 2018, 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 August 16, 2018 (File No. 001-08923), and incorporated herein by reference thereto).

4.1(s) Supplemental Indenture No. 15, dated as of February 15, 2019 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 February 15, 2019 (File No. 001-08923), and incorporated herein by reference thereto).

4.2 Form of Indenture for Senior Subordinated Debt Securities (filed with the Commission as Exhibit 4.2 to the Company’s Form S-3 (File No. 333-2250004) filed May 17, 2018, and incorporated herein by reference thereto).

4.3 Form of Indenture for Junior Subordinated Debt Securities (filed with the Commission as Exhibit 4.3 to the Company’s Form S-3 (File No. 333-2250004) filed May 17, 2018, and incorporated herein by reference thereto).

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).

10.1 Credit Agreement dated as of July 19, 2018 by and among the Company; the lenders listed therein; KeyBank National Association, as administrative agent, L/C issuer and a swingline lender; Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents; Deutsche Bank Securities Inc., as documentation agent; Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and Deutsche Bank Securities Inc., as U.S. joint lead arrangers; Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and RBC Capital Markets, as Canadian joint lead arrangers; and Merrill Lynch, Pierce, Fenner & Smith Incorporated and JPMorgan Chase Bank, N.A., as joint book runners (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed July 24, 2018 (File No. 001-08923), and incorporated herein by reference thereto).

10.2 Equity Purchase Agreement, dated as of February 28, 2011, by and among the Company, FC-GEN Investment, LLC and FC-GEN Operations Investment, LLC (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed February 28, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

10.3(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).*

10.3(b) Form of Stock Option Agreement (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.9 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*

10.3(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).*

10.3(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).*

10.3(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).*

10.4(a) Amended and Restated Employment Agreement, dated January 3, 2017, between the Company and Thomas J. DeRosa (filed with the Commission as Exhibit 10.4(a) to the Company’s Form 10-K filed February 22, 2017 (File No. 001-08923), and incorporated herein by reference thereto).*

10.4(b) Performance-Based Restricted Stock Unit Grant Agreement, dated effective as of July 30, 2014, between the Company and Thomas J. DeRosa (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed November 4, 2014 (File No. 001-08923), and incorporated herein by reference thereto).*

10.5(a) Transfer Letter, dated August 17, 2018, by and between John A. Goodey and the Company (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed October 30, 2018 (File No. 001-08923), and incorporated herein by reference thereto).

10.5(b) Letter Agreement, dated January 30, 2019, by and between John A. Goodey and the Company.*



10.6 Amended and Restated Employment Agreement, dated June 16, 2017, by and between the Company and Mercedes T. Kerr (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed July 28, 2017 (File No. 001-08923), and incorporated herein by reference thereto).*

10.7 Form of Indemnification Agreement between the Company and each director, executive officer and officer of the Company (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed February 18, 2005 (File No. 001-08923), and incorporated herein by reference thereto).*

10.8 Summary of Director Compensation.*

10.9(a) Health Care REIT, Inc. 2015-2017 Long-Term Incentive Program (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

10.9(b) Form of Performance Restricted Stock Unit Award Agreement under the 2015-2017 Long-Term Incentive Program (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*

10.10(a) Welltower Inc. 2016 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed May 10, 2016 (File No. 001-08923), and incorporated herein by reference thereto).*

10.10(b) Form of Restricted Stock Grant Notice for Executive Officers under the 2016 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.14(b) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*

10.10(c) Form of Restricted Stock Grant Notice for Senior Vice Presidents under the 2016 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.14(c) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*

10.10(d) Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the 2016 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.14(d) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*

10.11(a) Welltower Inc. 2016-2018 Long-Term Incentive Program (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed August 2, 2016 (File No. 001-08923), and incorporated herein by reference thereto).*

10.11(b) Form of Performance Restricted Stock Unit Award Agreement under the 2016-2018 Long-Term Incentive Program (filed with the Commission as Exhibit 10.15(b) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*

10.12(a) Welltower Inc. 2017-2019 Long-Term Incentive Program (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed May 5, 2017 (File No. 001-08923), and incorporated herein by reference thereto).*

10.12(b) Form of Award Notice under the 2017-2019 Long-Term Incentive Program (filed with the Commission as Exhibit 10.16(b) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*

10.12(c) Welltower Inc. 2017-2019 Long-Term Incentive Program — Bridge 1 (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed November 7, 2017 (File No. 001-08923), and incorporated herein by reference thereto).*

10.12(d) Form of Award Notice under the 2017-2019 Long Term Incentive Program — Bridge 1 (filed with the Commission as Exhibit 10.16(d) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*

10.12(e) Welltower Inc. 2017-2019 Long-Term Incentive Program — Bridge 2 (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed November 7, 2017 (File No. 001-08923), and incorporated herein by reference thereto).*



10.12(f) Form of Award Notice under the 2017-2019 Long Term Incentive Program — Bridge 2 (filed with the Commission as Exhibit 10.16(f) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto). \( ^{*} $ 

10.13(a) Welltower Inc. 2018-2020 Long-Term Incentive Program (filed with the Commission as Exhibit 10.17(a) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto). \( ^{*} $ 

10.13(b) Form of Restricted Stock Unit Award Agreement under the 2018-2020 Long-Term Incentive Program (filed with the Commission as Exhibit 10.17(b) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto). \( ^{*} $ 

10.14(a) Welltower Inc. 2019-2021 Long-Term Incentive Program. \( ^{*} $ 

10.14(b) Form of Restricted Stock Unit Award Agreement under the 2019-2021 Long-Term Incentive Program.*

21 Subsidiaries of the Company.

23 Consent of Ernst & Young LLP, independent registered public accounting firm.

24 Powers of Attorney.

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1 Certification pursuant to 18 U.S.C. Section 1350 by Chief Executive Officer.

32.2 Certification pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

* Management Contract or Compensatory Plan or Arrangement.

## Item 16. Form 10-K Summary

None.



## 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 25, 2019

## WELLTOWER INC.

By: /s/ Thomas J. DeRosa

Thomas J. DeRosa,
Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 25, 2019 by the following persons on behalf of the Registrant and in the capacities indicated.

/s/ Jeffrey H. Donahue **

/s/ Johnese Spisso**

Jeffrey H. Donahue, Chairman of the Board

Johnese Spisso, Director

/s/ Kenneth J. Bacon **

/s/ R. Scott Trumbull **

Kenneth J. Bacon, Director

R. Scott Trumbull, Director

/s/ Karen DeSalvo**

/s/ Gary Whitelaw **

Karen DeSalvo, Director

Gary Whitelaw, Director

/s/ Geoffrey G. Meyers **

/s/ Thomas J. DeRosa**

Geoffrey G. Meyers, Director

Thomas J. DeRosa, Chief Executive Officer and Director (Principal Executive Officer)

/s/ Timothy J. Naughton**

/s/ John A. Goodey**

Timothy J. Naughton, Director

John A. Goodey, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ Sharon M. Oster **

/s/ Joshua T. Fieweger**

Sharon M. Oster, Director

Joshua T. Fieweger, Vice President and Controller (Principal Accounting Officer)

/s/ Judith C. Pelham **

**By: /s/ Thomas J. DeRosa

Judith C. Pelham, Director

Thomas J. DeRosa, Attorney-in-Fact

/s/ Sergio D. Rivera **

Sergio D. Rivera, Director



## Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2018

(Dollars in thousands)

<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="3">Initial Cost to Company</td><td colspan="3">Cost Capitalized Subsequent to Acquisition</td><td colspan="3">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Building &amp; Improvements</td><td>Land</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>(1)</td><td>(1)</td></tr><tr><td>Seniors Housing Operating:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Acton, MA</td><td>$</td><td>—</td><td>$</td><td>31,346</td><td>$</td><td>1,691</td><td>$</td><td>24</td><td>$</td><td>33,013</td><td>$</td><td>6,127</td><td>2013</td></tr><tr><td>Adderbury, UK</td><td>—</td><td>—</td><td>2,144</td><td>12,549</td><td>—</td><td>—</td><td>2,144</td><td>12,549</td><td>—</td><td>621</td><td>2015</td><td>2017</td><td>Bambury Road</td></tr><tr><td>Albuquerque, NM</td><td>—</td><td>—</td><td>1,270</td><td>20,837</td><td>2,139</td><td>1,354</td><td>22,892</td><td>6,475</td><td>2010</td><td>1984</td><td>500</td><td>Paisano St NE</td><td></td></tr><tr><td>Alexandria, VA</td><td>—</td><td>—</td><td>8,280</td><td>50,914</td><td>—</td><td>8,280</td><td>50,914</td><td>1,055</td><td>2016</td><td>2018</td><td>5550</td><td>Cardinal Place</td><td></td></tr><tr><td>Alhambra, CA</td><td>—</td><td>—</td><td>600</td><td>6,305</td><td>9,067</td><td>600</td><td>15,372</td><td>2,124</td><td>2011</td><td>1923</td><td>1118</td><td>N. Stoneman Ave.</td><td></td></tr><tr><td>Altrincham, UK</td><td>—</td><td>—</td><td>4,244</td><td>25,187</td><td>1,700</td><td>4,388</td><td>26,743</td><td>5,790</td><td>2012</td><td>2009</td><td>295</td><td>Hale Road</td><td></td></tr><tr><td>Amberstview, ON</td><td>486</td><td>473</td><td>4,446</td><td>508</td><td>493</td><td>4,934</td><td>799</td><td>2015</td><td>1974</td><td>4567</td><td>Bath Road</td><td></td><td></td></tr><tr><td>Anderson, SC</td><td>—</td><td>—</td><td>710</td><td>6,290</td><td>456</td><td>710</td><td>6,746</td><td>3,524</td><td>2003</td><td>1986</td><td>311</td><td>Simpson Rd.</td><td></td></tr><tr><td>Apple Valley, CA</td><td>—</td><td>—</td><td>480</td><td>16,639</td><td>262</td><td>486</td><td>16,895</td><td>4,633</td><td>2010</td><td>1999</td><td>11825</td><td>Apple Valley Rd.</td><td></td></tr><tr><td>Arlington, VA</td><td>—</td><td>—</td><td>8,385</td><td>31,198</td><td>14,030</td><td>8,385</td><td>45,228</td><td>6,530</td><td>2017</td><td>1992</td><td>900</td><td>N Taylor Street</td><td></td></tr><tr><td>Arlington, VA</td><td>—</td><td>—</td><td>—</td><td>2,338</td><td>—</td><td>—</td><td>2,338</td><td>89</td><td>2018</td><td>1992</td><td>900</td><td>N Taylor Street</td><td></td></tr><tr><td>Arnpior, ON</td><td>147</td><td>788</td><td>6,283</td><td>422</td><td>810</td><td>6,683</td><td>1,505</td><td>2013</td><td>1991</td><td>15</td><td>Arthur Street</td><td></td><td></td></tr><tr><td>Atlanta, GA</td><td>—</td><td>—</td><td>2,100</td><td>20,603</td><td>1,532</td><td>2,197</td><td>22,038</td><td>4,140</td><td>2014</td><td>2000</td><td>1000</td><td>Lenox Park Blvd NE</td><td></td></tr><tr><td>Austin, TX</td><td>—</td><td>—</td><td>1,560</td><td>21,413</td><td>511</td><td>1,560</td><td>21,924</td><td>2,984</td><td>2014</td><td>2013</td><td>11330</td><td>Farrah Lane</td><td></td></tr><tr><td>Austin, TX</td><td>—</td><td>—</td><td>4,200</td><td>74,850</td><td>746</td><td>4,200</td><td>75,596</td><td>8,063</td><td>2015</td><td>2014</td><td>4310</td><td>Bee Caves Road</td><td></td></tr><tr><td>Avon, CT</td><td>—</td><td>—</td><td>1,550</td><td>30,571</td><td>4,211</td><td>1,590</td><td>34,742</td><td>10,488</td><td>2011</td><td>1998</td><td>101</td><td>Bickford Extension</td><td></td></tr><tr><td>Azusa, CA</td><td>—</td><td>—</td><td>570</td><td>3,141</td><td>7,872</td><td>570</td><td>11,013</td><td>3,286</td><td>1998</td><td>1953</td><td>125</td><td>W. Sierra Madre Ave.</td><td></td></tr><tr><td>Bagshot, UK</td><td>—</td><td>—</td><td>4,960</td><td>29,881</td><td>2,920</td><td>5,133</td><td>32,628</td><td>7,189</td><td>2012</td><td>2009</td><td>14</td><td>-</td><td>16</td></tr><tr><td>Banstead, UK</td><td>—</td><td>—</td><td>6,695</td><td>55,113</td><td>4,444</td><td>6,956</td><td>59,296</td><td>12,237</td><td>2012</td><td>2005</td><td>Croydon Lane</td><td></td><td></td></tr><tr><td>Basingstoke, UK</td><td>—</td><td>—</td><td>3,420</td><td>18,853</td><td>1,014</td><td>3,535</td><td>19,752</td><td>2,578</td><td>2014</td><td>2012</td><td>Grove Road</td><td></td><td></td></tr><tr><td>Basking Ridge, NJ</td><td>—</td><td>—</td><td>2,356</td><td>37,710</td><td>1,623</td><td>2,395</td><td>39,294</td><td>8,040</td><td>2013</td><td>2002</td><td>404</td><td>King George Road</td><td></td></tr><tr><td>Bassett, UK</td><td>—</td><td>—</td><td>4,874</td><td>32,304</td><td>4,413</td><td>5,051</td><td>36,540</td><td>8,138</td><td>2013</td><td>2006</td><td>111</td><td>Burgess Road</td><td></td></tr><tr><td>Bath, UK</td><td>—</td><td>—</td><td>2,696</td><td>11,876</td><td>—</td><td>2,696</td><td>11,876</td><td>571</td><td>2015</td><td>2017</td><td>Clarks Way, Rush Hill</td><td></td><td></td></tr><tr><td>Baton Rouge, LA</td><td>8,838</td><td>790</td><td>29,436</td><td>1,139</td><td>842</td><td>30,523</td><td>6,086</td><td>2013</td><td>2009</td><td>9351</td><td>Siegen Lane</td><td></td><td></td></tr><tr><td>Beaconsfield, UK</td><td>—</td><td>—</td><td>5,566</td><td>50,952</td><td>2,287</td><td>5,765</td><td>53,040</td><td>10,591</td><td>2013</td><td>2009</td><td>30-34</td><td>Station Road</td><td></td></tr><tr><td>Beaconsfield, QC</td><td>—</td><td>—</td><td>1,149</td><td>17,484</td><td>641</td><td>1,225</td><td>18,049</td><td>4,937</td><td>2013</td><td>2008</td><td>505</td><td>Elm Avenue</td><td></td></tr><tr><td>Bedford, NH</td><td>—</td><td>—</td><td>2,527</td><td>28,748</td><td>2,299</td><td>2,551</td><td>31,023</td><td>5,760</td><td>2011</td><td>2012</td><td>5</td><td>Corporate Drive</td><td></td></tr><tr><td>Bee Cave, TX</td><td>—</td><td>—</td><td>1,820</td><td>21,084</td><td>819</td><td>1,820</td><td>21,903</td><td>2,369</td><td>2016</td><td>2014</td><td>14058</td><td>A</td><td>Bee Cave Parkway</td></tr><tr><td>Bellevue, WA</td><td>—</td><td>—</td><td>2,800</td><td>19,004</td><td>2,183</td><td>2,816</td><td>21,171</td><td>5,325</td><td>2013</td><td>1998</td><td>15928</td><td>NE 8th Street</td><td></td></tr><tr><td>Belmont, CA</td><td>—</td><td>—</td><td>3,000</td><td>23,526</td><td>2,395</td><td>3,000</td><td>25,921</td><td>6,832</td><td>2011</td><td>1971</td><td>1301</td><td>Ralston Avenue</td><td></td></tr><tr><td>Belmont, CA</td><td>—</td><td>—</td><td>—</td><td>35,300</td><td>2,308</td><td>157</td><td>37,451</td><td>8,026</td><td>2013</td><td>2002</td><td>1010</td><td>Alameda de Las Pulgas</td><td></td></tr><tr><td>Berkeley, CA</td><td>12,195</td><td>3,050</td><td>32,677</td><td>5,086</td><td>3,050</td><td>37,763</td><td>4,759</td><td>2016</td><td>1966</td><td>2235</td><td>Sacramento Street</td><td></td><td></td></tr><tr><td>Bethesda, MD</td><td>—</td><td>—</td><td>45,309</td><td>677</td><td>3</td><td>45,983</td><td>9,551</td><td>2013</td><td>2009</td><td>8300</td><td>Burdett Road</td><td></td><td></td></tr><tr><td>Bethesda, MD</td><td>—</td><td>—</td><td>—</td><td>45</td><td>682</td><td>—</td><td>727</td><td>136</td><td>2013</td><td>2009</td><td>8300</td><td>Burdett Road</td><td></td></tr><tr><td>Bethesda, MD</td><td>—</td><td>—</td><td>—</td><td>212</td><td>907</td><td>—</td><td>1,119</td><td>319</td><td>2013</td><td>2009</td><td>8300</td><td>Burdett Road</td><td></td></tr><tr><td>Billerica, MA</td><td>—</td><td>—</td><td>1,619</td><td>21,381</td><td>867</td><td>1,624</td><td>22,243</td><td>3,170</td><td>2015</td><td>2000</td><td>20</td><td>Charnstaffe Lane</td><td></td></tr><tr><td>Birmingham, UK</td><td>—</td><td>—</td><td>1,480</td><td>13,014</td><td>654</td><td>1,530</td><td>13,618</td><td>776</td><td>2015</td><td>2016</td><td>47</td><td>Bristol Road South</td><td></td></tr><tr><td>Birmingham, UK</td><td>—</td><td>—</td><td>2,807</td><td>11,313</td><td>605</td><td>2,902</td><td>11,823</td><td>645</td><td>2015</td><td>2016</td><td>134</td><td>Jockey Road</td><td></td></tr><tr><td>Blainville, QC</td><td>—</td><td>—</td><td>2,077</td><td>8,902</td><td>429</td><td>2,156</td><td>9,252</td><td>2,925</td><td>2013</td><td>2008</td><td>50</td><td>des Chateaux Boulevard</td><td></td></tr><tr><td>Bloomfield Hills, MI</td><td>—</td><td>—</td><td>2,000</td><td>35,662</td><td>1,067</td><td>2,133</td><td>36,596</td><td>7,455</td><td>2013</td><td>2009</td><td>6790</td><td>Telegraph Road</td><td></td></tr><tr><td>Boca Raton, FL</td><td>—</td><td>—</td><td>6,565</td><td>111,247</td><td>18,834</td><td>6,565</td><td>130,081</td><td>7,491</td><td>2018</td><td>1994</td><td>6343</td><td>Via De Sonrise Del Sur</td><td></td></tr><tr><td>Borehamwood, UK</td><td>—</td><td>—</td><td>5,367</td><td>41,937</td><td>2,246</td><td>5,584</td><td>43,966</td><td>9,285</td><td>2012</td><td>2003</td><td>Edgwarebury Lane</td><td></td><td></td></tr><tr><td>Bothell, WA</td><td>—</td><td>—</td><td>1,350</td><td>13,439</td><td>6,074</td><td>1,798</td><td>19,065</td><td>2,344</td><td>2015</td><td>1988</td><td>10605</td><td>NE 185th Street</td><td></td></tr><tr><td>Boulder, CO</td><td>—</td><td>—</td><td>2,994</td><td>27,458</td><td>2,271</td><td>3,022</td><td>29,701</td><td>7,497</td><td>2013</td><td>2003</td><td>3955</td><td>28th Street</td><td></td></tr><tr><td>Bournemouth, UK</td><td>—</td><td>—</td><td>5,527</td><td>42,547</td><td>2,338</td><td>5,725</td><td>44,687</td><td>9,186</td><td>2013</td><td>2008</td><td>42</td><td>Belle Vue Road</td><td></td></tr><tr><td>Braintree, MA</td><td>—</td><td>—</td><td>—</td><td>41,290</td><td>1,079</td><td>100</td><td>42,269</td><td>8,961</td><td>2013</td><td>2007</td><td>618</td><td>Granite Street</td><td></td></tr><tr><td>Brampton, ON</td><td>40,685</td><td>10,196</td><td>59,989</td><td>—</td><td>—</td><td>10,196</td><td>59,989</td><td>10,075</td><td>2015</td><td>2009</td><td>100</td><td>Ken Whillans Drive</td><td></td></tr><tr><td>Brick, NJ</td><td>—</td><td>—</td><td>1,170</td><td>17,372</td><td>1,530</td><td>1,211</td><td>18,861</td><td>4,186</td><td>2010</td><td>1998</td><td>515</td><td>Jack Martin Blvd</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="3">Initial Cost to Company</td><td colspan="3">Cost Capitalized</td><td colspan="3">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Subsequent to Acquisition</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)(2)</td></tr><tr><td>Brick, NJ</td><td>—</td><td>690</td><td>17,125</td><td>5,610</td><td>695</td><td>22,730</td><td>4,152</td><td>2010</td><td>1999</td><td>1594 Route 88</td><td></td><td></td><td></td></tr><tr><td>Bridgewater, NJ</td><td>—</td><td>1,730</td><td>48,201</td><td>1,562</td><td>1,767</td><td>49,726</td><td>10,329</td><td>2010</td><td>1999</td><td>2005 Route 22 West</td><td></td><td></td><td></td></tr><tr><td>Brighton, MA</td><td>9,686</td><td>2,100</td><td>14,616</td><td>1,712</td><td>2,135</td><td>16,293</td><td>4,736</td><td>2011</td><td>1995</td><td>50 Sutherland Road</td><td></td><td></td><td></td></tr><tr><td>Brockport, NY</td><td>—</td><td>1,500</td><td>23,496</td><td>582</td><td>1,705</td><td>23,873</td><td>3,890</td><td>2015</td><td>1999</td><td>90 West Avenue</td><td></td><td></td><td></td></tr><tr><td>Brockville, ON</td><td>4,288</td><td>484</td><td>7,445</td><td>432</td><td>498</td><td>7,863</td><td>1,170</td><td>2015</td><td>1996</td><td>1026 Bridlewood Drive</td><td></td><td></td><td></td></tr><tr><td>Brookfield, CT</td><td>—</td><td>2,250</td><td>30,180</td><td>3,337</td><td>2,271</td><td>33,496</td><td>9,272</td><td>2011</td><td>1999</td><td>246A Federal Road</td><td></td><td></td><td></td></tr><tr><td>Broomfield, CO</td><td>—</td><td>4,140</td><td>44,547</td><td>11,976</td><td>10,135</td><td>50,528</td><td>16,614</td><td>2013</td><td>2009</td><td>400 Summit Blvd</td><td></td><td></td><td></td></tr><tr><td>Brossard, QC</td><td>10,432</td><td>5,499</td><td>31,854</td><td>285</td><td>5,427</td><td>32,211</td><td>5,560</td><td>2015</td><td>1989</td><td>2455 Boulevard Rome</td><td></td><td></td><td></td></tr><tr><td>Buckingham, UK</td><td>—</td><td>2,979</td><td>13,880</td><td>744</td><td>3,080</td><td>14,523</td><td>1,882</td><td>2014</td><td>1883</td><td>Church Street</td><td></td><td></td><td></td></tr><tr><td>Buffalo Grove, IL</td><td>—</td><td>2,850</td><td>49,129</td><td>3,154</td><td>2,850</td><td>52,283</td><td>10,571</td><td>2012</td><td>2003</td><td>500 McHenry Road</td><td></td><td></td><td></td></tr><tr><td>Burbank, CA</td><td>—</td><td>4,940</td><td>43,466</td><td>2,067</td><td>4,940</td><td>45,533</td><td>10,721</td><td>2012</td><td>2002</td><td>455 E. Angeleno Avenue</td><td></td><td></td><td></td></tr><tr><td>Burbank, CA</td><td>19,237</td><td>3,610</td><td>50,817</td><td>3,983</td><td>3,610</td><td>54,800</td><td>5,663</td><td>2016</td><td>1985</td><td>2721 Willow Street</td><td></td><td></td><td></td></tr><tr><td>Burleson, TX</td><td>—</td><td>3,150</td><td>10,437</td><td>659</td><td>3,150</td><td>11,096</td><td>1,354</td><td>2012</td><td>2014</td><td>621 Old Highway 1187</td><td></td><td></td><td></td></tr><tr><td>Burlingame, CA</td><td>—</td><td>—</td><td>62,786</td><td>85</td><td>—</td><td>62,871</td><td>4,858</td><td>2016</td><td>2015</td><td>1818 Trousdale Avenue</td><td></td><td></td><td></td></tr><tr><td>Burlington, ON</td><td>11,514</td><td>1,309</td><td>19,311</td><td>623</td><td>1,338</td><td>19,905</td><td>4,321</td><td>2013</td><td>1990</td><td>500 Appleby Line</td><td></td><td></td><td></td></tr><tr><td>Burlington, MA</td><td>—</td><td>2,443</td><td>34,354</td><td>1,388</td><td>2,522</td><td>35,663</td><td>8,007</td><td>2013</td><td>2005</td><td>24 Mall Road</td><td></td><td></td><td></td></tr><tr><td>Burlington, MA</td><td>—</td><td>2,750</td><td>57,488</td><td>3,304</td><td>2,750</td><td>60,792</td><td>6,120</td><td>2016</td><td>2011</td><td>50 Greenleaf Way</td><td></td><td></td><td></td></tr><tr><td>Bushey, UK</td><td>—</td><td>12,690</td><td>36,482</td><td>—</td><td>12,690</td><td>36,482</td><td>308</td><td>2015</td><td>2018</td><td>Elton House, Elton Way</td><td></td><td></td><td></td></tr><tr><td>Calgary, AB</td><td>11,323</td><td>2,252</td><td>37,415</td><td>1,286</td><td>2,298</td><td>38,655</td><td>8,580</td><td>2013</td><td>2003</td><td>20 Promenade Way SE</td><td></td><td></td><td></td></tr><tr><td>Calgary, AB</td><td>12,909</td><td>2,793</td><td>41,179</td><td>1,065</td><td>2,843</td><td>42,194</td><td>9,176</td><td>2013</td><td>1998</td><td>80 Edenwold Drive NW</td><td></td><td></td><td></td></tr><tr><td>Calgary, AB</td><td>10,237</td><td>3,122</td><td>38,971</td><td>1,241</td><td>3,184</td><td>40,150</td><td>8,632</td><td>2013</td><td>1998</td><td>150 Scotia Landing NW</td><td></td><td></td><td></td></tr><tr><td>Calgary, AB</td><td>21,247</td><td>3,431</td><td>28,983</td><td>1,676</td><td>3,498</td><td>30,592</td><td>5,754</td><td>2013</td><td>1989</td><td>9229 16th Street SW</td><td></td><td></td><td></td></tr><tr><td>Calgary, AB</td><td>24,199</td><td>2,385</td><td>36,776</td><td>1,152</td><td>2,427</td><td>37,886</td><td>5,774</td><td>2015</td><td>2006</td><td>2220-162nd Avenue SW</td><td></td><td></td><td></td></tr><tr><td>Camberley, UK</td><td>—</td><td>2,654</td><td>5,736</td><td>21,500</td><td>8,150</td><td>21,937</td><td>1,230</td><td>2014</td><td>2016</td><td>Fernhill Road</td><td></td><td></td><td></td></tr><tr><td>Cardiff, UK</td><td>—</td><td>3,191</td><td>12,566</td><td>884</td><td>3,307</td><td>13,334</td><td>3,647</td><td>2013</td><td>2007</td><td>127 Cycnoed Road</td><td></td><td></td><td></td></tr><tr><td>Cardiff by the Sea, CA</td><td>37,025</td><td>5,880</td><td>64,711</td><td>4,243</td><td>5,880</td><td>68,954</td><td>15,985</td><td>2011</td><td>2009</td><td>3535 Manchester Avenue</td><td></td><td></td><td></td></tr><tr><td>Carol Stream, IL</td><td>—</td><td>1,730</td><td>55,048</td><td>2,104</td><td>1,730</td><td>57,152</td><td>12,748</td><td>2012</td><td>2001</td><td>545 Belmont Lane</td><td></td><td></td><td></td></tr><tr><td>Carrollton, TX</td><td>—</td><td>4,280</td><td>31,444</td><td>1,041</td><td>4,280</td><td>32,485</td><td>4,207</td><td>2013</td><td>2010</td><td>2105 North Josey Lane</td><td></td><td></td><td></td></tr><tr><td>Cary, NC</td><td>—</td><td>740</td><td>45,240</td><td>744</td><td>740</td><td>45,984</td><td>8,360</td><td>2013</td><td>2009</td><td>1206 West Chatham Street</td><td></td><td></td><td></td></tr><tr><td>Cary, NC</td><td>—</td><td>6,112</td><td>70,008</td><td>8,355</td><td>6,112</td><td>78,363</td><td>3,652</td><td>2018</td><td>1999</td><td>300 Kildaire Woods Drive</td><td></td><td></td><td></td></tr><tr><td>Cedar Park, TX</td><td>—</td><td>1,750</td><td>15,664</td><td>1,162</td><td>1,750</td><td>16,826</td><td>1,215</td><td>2016</td><td>2015</td><td>800 C-Bar Ranch Trail</td><td></td><td></td><td></td></tr><tr><td>Cerritos, CA</td><td>—</td><td>—</td><td>27,494</td><td>6,570</td><td>—</td><td>34,064</td><td>6,011</td><td>2016</td><td>2002</td><td>11000 New Falcon Way</td><td></td><td></td><td></td></tr><tr><td>Charlottesville, VA</td><td>—</td><td>4,651</td><td>91,468</td><td>11,276</td><td>4,651</td><td>102,744</td><td>6,952</td><td>2018</td><td>1991</td><td>2610 Barracks Road</td><td></td><td></td><td></td></tr><tr><td>Chatham, ON</td><td>895</td><td>1,098</td><td>12,462</td><td>1,809</td><td>1,193</td><td>14,176</td><td>3,167</td><td>2015</td><td>1965</td><td>25 Keil Drive North</td><td></td><td></td><td></td></tr><tr><td>Chelmsford, MA</td><td>—</td><td>1,040</td><td>10,951</td><td>1,525</td><td>1,040</td><td>12,476</td><td>4,625</td><td>2003</td><td>1997</td><td>4 Technology Dr.</td><td></td><td></td><td></td></tr><tr><td>Chelmsford, MA</td><td>—</td><td>1,589</td><td>26,432</td><td>1,301</td><td>1,656</td><td>27,666</td><td>3,882</td><td>2015</td><td>1997</td><td>199 Chelmsford Street</td><td></td><td></td><td></td></tr><tr><td>Chertsey, UK</td><td>—</td><td>9,566</td><td>25,886</td><td>—</td><td>9,566</td><td>25,886</td><td>743</td><td>2015</td><td>2018</td><td>Bittams Lane</td><td></td><td></td><td></td></tr><tr><td>Chesterfield, MO</td><td>—</td><td>1,857</td><td>48,366</td><td>1,462</td><td>1,917</td><td>49,768</td><td>9,624</td><td>2013</td><td>2001</td><td>1880 Clarkson Road</td><td></td><td></td><td></td></tr><tr><td>Chorleywood, UK</td><td>—</td><td>5,636</td><td>43,191</td><td>3,864</td><td>5,833</td><td>46,858</td><td>10,193</td><td>2013</td><td>2007</td><td>High View, Rickmansworth Road</td><td></td><td></td><td></td></tr><tr><td>Chula Vista, CA</td><td>—</td><td>2,072</td><td>22,163</td><td>1,201</td><td>2,162</td><td>23,274</td><td>4,942</td><td>2013</td><td>2003</td><td>3302 Bonita Road</td><td></td><td></td><td></td></tr><tr><td>Church Crookham, UK</td><td>—</td><td>2,591</td><td>14,215</td><td>835</td><td>2,691</td><td>14,950</td><td>2,596</td><td>2014</td><td>2014</td><td>Bourley Road</td><td></td><td></td><td></td></tr><tr><td>Cincinnati, OH</td><td>—</td><td>2,060</td><td>109,388</td><td>13,733</td><td>2,080</td><td>123,101</td><td>26,921</td><td>2007</td><td>2010</td><td>5445 Kenwood Road</td><td></td><td></td><td></td></tr><tr><td>Citrus Heights, CA</td><td>—</td><td>2,300</td><td>31,876</td><td>726</td><td>2,300</td><td>32,602</td><td>8,987</td><td>2010</td><td>1997</td><td>7418 Stock Ranch Rd.</td><td></td><td></td><td></td></tr><tr><td>Claremont, CA</td><td>—</td><td>2,430</td><td>9,928</td><td>1,479</td><td>2,483</td><td>11,354</td><td>2,806</td><td>2013</td><td>2001</td><td>2053 North Towne Avenue</td><td></td><td></td><td></td></tr><tr><td>Chausset, MA</td><td>—</td><td>2,485</td><td>26,147</td><td>1,919</td><td>2,493</td><td>28,058</td><td>6,009</td><td>2013</td><td>1998</td><td>125 King Street (Rt 3A)</td><td></td><td></td><td></td></tr><tr><td>Colleyville, TX</td><td>—</td><td>1,050</td><td>17,082</td><td>47</td><td>1,050</td><td>17,129</td><td>921</td><td>2016</td><td>2013</td><td>8100 Precinct Line Road</td><td></td><td></td><td></td></tr><tr><td>Colorado Springs, CO</td><td>—</td><td>800</td><td>14,756</td><td>1,980</td><td>1,026</td><td>16,510</td><td>3,610</td><td>2013</td><td>2001</td><td>Boulevard</td><td></td><td></td><td></td></tr><tr><td>Colts Neck, NJ</td><td>—</td><td>780</td><td>14,733</td><td>1,759</td><td>1,092</td><td>16,180</td><td>3,628</td><td>2010</td><td>2002</td><td>3 Meridian Circle</td><td></td><td></td><td></td></tr><tr><td>Concord, NH</td><td>—</td><td>720</td><td>21,164</td><td>852</td><td>789</td><td>21,947</td><td>5,450</td><td>2011</td><td>2001</td><td>300 Pleasant Street</td><td></td><td></td><td></td></tr><tr><td>Coquitlam, BC</td><td>9,139</td><td>3,047</td><td>24,567</td><td>775</td><td>3,098</td><td>25,291</td><td>6,583</td><td>2013</td><td>1990</td><td>1142 Dufferin Street</td><td></td><td></td><td></td></tr><tr><td>Costa Mesa, CA</td><td>—</td><td>2,050</td><td>19,969</td><td>1,404</td><td>2,050</td><td>21,373</td><td>5,647</td><td>2011</td><td>1965</td><td>350 West Bay St</td><td></td><td></td><td></td></tr><tr><td>Crystal Lake, IL</td><td>—</td><td>875</td><td>12,461</td><td>1,482</td><td>971</td><td>13,847</td><td>3,480</td><td>2013</td><td>2001</td><td>751 E Terra Cotta Avenue</td><td></td><td></td><td></td></tr><tr><td>Dallas, TX</td><td>—</td><td>6,330</td><td>114,794</td><td>1,613</td><td>6,330</td><td>116,407</td><td>13,498</td><td>2015</td><td>2013</td><td>3535 N Hall Street</td><td></td><td></td><td></td></tr><tr><td>Danvers, MA</td><td>—</td><td>1,120</td><td>14,557</td><td>1,505</td><td>1,145</td><td>16,037</td><td>4,429</td><td>2011</td><td>2000</td><td>1 Veronica Drive</td><td></td><td></td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td></tr><tr><td>Danvers, MA</td><td>—</td><td>2,203</td><td>28,761</td><td>342</td><td>2,257</td><td>29,049</td><td>4,487</td><td>2015</td><td>1997</td><td>9 Summer Street</td><td></td></tr><tr><td>Davenport, IA</td><td>—</td><td>1,403</td><td>35,893</td><td>4,269</td><td>1,480</td><td>40,085</td><td>10,506</td><td>2006</td><td>2009</td><td>4500 Elmore Ave.</td><td></td></tr><tr><td>Decatur, GA</td><td>—</td><td>1,946</td><td>26,575</td><td>2,504</td><td>1,946</td><td>29,079</td><td>6,609</td><td>2013</td><td>1998</td><td>920 Clairemont Avenue</td><td></td></tr><tr><td>Denver, CO</td><td>—</td><td>2,910</td><td>35,838</td><td>1,827</td><td>2,971</td><td>37,604</td><td>9,558</td><td>2012</td><td>2007</td><td>8101 E Mississippi Avenue</td><td></td></tr><tr><td>Dix Hills, NY</td><td>—</td><td>3,808</td><td>39,014</td><td>1,861</td><td>3,947</td><td>40,736</td><td>8,624</td><td>2013</td><td>2003</td><td>337 Deer Park Road</td><td></td></tr><tr><td>Dollard-Des-Ormеaux, QC</td><td>—</td><td>1,957</td><td>14,431</td><td>538</td><td>2,039</td><td>14,887</td><td>4,786</td><td>2013</td><td>2008</td><td>4377 St. Jean Blvd</td><td></td></tr><tr><td>Dresher, PA</td><td>—</td><td>1,900</td><td>10,664</td><td>1,151</td><td>1,914</td><td>11,801</td><td>3,660</td><td>2013</td><td>2006</td><td>1650 Susquehanna Road</td><td></td></tr><tr><td>Dublin, OH</td><td>—</td><td>1,680</td><td>43,423</td><td>6,837</td><td>1,850</td><td>50,090</td><td>14,301</td><td>2010</td><td>1990</td><td>6470 Post Rd</td><td></td></tr><tr><td>Dublin, OH</td><td>—</td><td>1,169</td><td>25,345</td><td>47</td><td>1,169</td><td>25,392</td><td>2,232</td><td>2016</td><td>2015</td><td>4175 Stoneridge Lane</td><td></td></tr><tr><td>East Haven, CT</td><td>—</td><td>2,660</td><td>35,533</td><td>3,458</td><td>2,685</td><td>38,966</td><td>12,649</td><td>2011</td><td>2000</td><td>111 South Shore Drive</td><td></td></tr><tr><td>East Meadow, NY</td><td>—</td><td>69</td><td>45,991</td><td>1,471</td><td>124</td><td>47,407</td><td>9,848</td><td>2013</td><td>2002</td><td>1555 Glen Curtiss Boulevard</td><td></td></tr><tr><td>East Setauket, NY</td><td>—</td><td>4,920</td><td>37,354</td><td>1,647</td><td>4,975</td><td>38,946</td><td>8,143</td><td>2013</td><td>2002</td><td>1 Sunrise Drive</td><td></td></tr><tr><td>Eastbourne, UK</td><td>—</td><td>4,145</td><td>33,744</td><td>1,554</td><td>4,298</td><td>35,145</td><td>7,685</td><td>2013</td><td>2008</td><td>6 Upper Kings Drive</td><td></td></tr><tr><td>Edgbaston, UK</td><td>—</td><td>2,720</td><td>13,969</td><td>722</td><td>2,812</td><td>14,599</td><td>1,490</td><td>2014</td><td>2015</td><td>Pershore Road</td><td></td></tr><tr><td>Edgewater, NJ</td><td>—</td><td>4,561</td><td>25,047</td><td>1,518</td><td>4,564</td><td>26,562</td><td>5,889</td><td>2013</td><td>2000</td><td>351 River Road</td><td></td></tr><tr><td>Edison, NJ</td><td>—</td><td>1,892</td><td>32,314</td><td>2,249</td><td>1,905</td><td>34,550</td><td>9,486</td><td>2013</td><td>1996</td><td>1801 Oak Tree Road</td><td></td></tr><tr><td>Edmonds, WA</td><td>—</td><td>1,650</td><td>24,449</td><td>4,823</td><td>1,672</td><td>29,250</td><td>3,548</td><td>2015</td><td>1976</td><td>21500 72nd Avenue West</td><td></td></tr><tr><td>Edmonton, AB</td><td>8,239</td><td>1,589</td><td>29,819</td><td>1,093</td><td>1,632</td><td>30,869</td><td>6,909</td><td>2013</td><td>1999</td><td>103 Rabbit Hill Court NW</td><td></td></tr><tr><td>Edmonton, AB</td><td>10,728</td><td>2,063</td><td>37,293</td><td>1,514</td><td>2,094</td><td>38,776</td><td>10,602</td><td>2013</td><td>1968</td><td>10015 103rd Avenue NW</td><td></td></tr><tr><td>Encinitas, CA</td><td>—</td><td>1,460</td><td>7,721</td><td>2,662</td><td>1,460</td><td>10,383</td><td>4,496</td><td>2000</td><td>1988</td><td>335 Saxony Rd.</td><td></td></tr><tr><td>Encino, CA</td><td>—</td><td>5,040</td><td>46,255</td><td>2,211</td><td>5,040</td><td>48,466</td><td>11,067</td><td>2012</td><td>2003</td><td>15451 Ventura Boulevard</td><td></td></tr><tr><td>Englishtown, NJ</td><td>—</td><td>690</td><td>12,520</td><td>1,873</td><td>834</td><td>14,249</td><td>3,230</td><td>2010</td><td>1997</td><td>49 Lasatta Ave</td><td></td></tr><tr><td>Escondido, CA</td><td>—</td><td>1,520</td><td>24,024</td><td>1,323</td><td>1,520</td><td>25,347</td><td>6,708</td><td>2011</td><td>1987</td><td>1500 Borden Rd</td><td></td></tr><tr><td>Esher, UK</td><td>—</td><td>5,783</td><td>48,361</td><td>2,365</td><td>5,999</td><td>50,510</td><td>9,941</td><td>2013</td><td>2006</td><td>42 Copse Lane</td><td></td></tr><tr><td>Fairfax, VA</td><td>—</td><td>19</td><td>2,678</td><td>312</td><td>53</td><td>2,956</td><td>941</td><td>2013</td><td>1991</td><td>9207 Arlington Boulevard</td><td></td></tr><tr><td>Fairfield, NJ</td><td>—</td><td>3,120</td><td>43,868</td><td>1,373</td><td>3,175</td><td>45,186</td><td>9,629</td><td>2013</td><td>1998</td><td>47 Greenbrook Road</td><td></td></tr><tr><td>Fairfield, CA</td><td>—</td><td>1,460</td><td>14,040</td><td>1,565</td><td>1,460</td><td>15,605</td><td>6,635</td><td>2002</td><td>1998</td><td>3350 Cherry Hills St.</td><td></td></tr><tr><td>Fareham, UK</td><td>—</td><td>3,408</td><td>17,970</td><td>1,077</td><td>3,536</td><td>18,919</td><td>2,887</td><td>2014</td><td>2012</td><td>Redlands Lane</td><td></td></tr><tr><td>Flossmoor, IL</td><td>—</td><td>1,292</td><td>9,496</td><td>1,835</td><td>1,339</td><td>11,284</td><td>3,068</td><td>2013</td><td>2000</td><td>19715 Governors Highway</td><td></td></tr><tr><td>Folsom, CA</td><td>—</td><td>1,490</td><td>32,754</td><td>84</td><td>1,490</td><td>32,838</td><td>4,420</td><td>2015</td><td>2014</td><td>1574 Creekside Drive</td><td></td></tr><tr><td>Fort Worth, TX</td><td>—</td><td>1,740</td><td>19,799</td><td>1,089</td><td>1,740</td><td>20,888</td><td>2,265</td><td>2016</td><td>2014</td><td>7001 Bryant Irvin Road</td><td></td></tr><tr><td>Franklin, MA</td><td>—</td><td>2,430</td><td>30,597</td><td>2,564</td><td>2,467</td><td>33,124</td><td>6,623</td><td>2013</td><td>1999</td><td>4 Forge Hill Road</td><td></td></tr><tr><td>Fremont, CA</td><td>—</td><td>3,400</td><td>25,300</td><td>3,331</td><td>3,456</td><td>28,575</td><td>10,193</td><td>2005</td><td>1987</td><td>2860 Country Dr.</td><td></td></tr><tr><td>Frome, UK</td><td>—</td><td>2,720</td><td>14,813</td><td>832</td><td>2,812</td><td>15,553</td><td>2,122</td><td>2014</td><td>2012</td><td>Welshmill Lane</td><td></td></tr><tr><td>Fullerton, CA</td><td>—</td><td>1,964</td><td>19,989</td><td>883</td><td>1,998</td><td>20,838</td><td>4,718</td><td>2013</td><td>2008</td><td>2226 North Euclid Street</td><td></td></tr><tr><td>Gahanna, OH</td><td>—</td><td>772</td><td>11,214</td><td>1,609</td><td>787</td><td>12,808</td><td>2,765</td><td>2013</td><td>1998</td><td>775 East Johnston Road</td><td></td></tr><tr><td>Gilbert, AZ</td><td>15,436</td><td>2,160</td><td>28,246</td><td>1,429</td><td>2,176</td><td>29,659</td><td>8,274</td><td>2013</td><td>2008</td><td>580 S. Gilbert Road</td><td></td></tr><tr><td>Gilroy, CA</td><td>—</td><td>760</td><td>13,880</td><td>24,966</td><td>1,588</td><td>38,018</td><td>11,161</td><td>2006</td><td>2007</td><td>7610 Isabella Way</td><td></td></tr><tr><td>Glen Cove, NY</td><td>—</td><td>4,594</td><td>35,236</td><td>1,877</td><td>4,643</td><td>37,064</td><td>9,193</td><td>2013</td><td>1998</td><td>39 Forest Avenue</td><td></td></tr><tr><td>Glenview, IL</td><td>—</td><td>2,090</td><td>69,288</td><td>3,353</td><td>2,090</td><td>72,641</td><td>15,745</td><td>2012</td><td>2001</td><td>2200 Golf Road</td><td></td></tr><tr><td>Golden Valley, MN</td><td>—</td><td>1,520</td><td>33,513</td><td>1,383</td><td>1,602</td><td>34,814</td><td>7,025</td><td>2013</td><td>2005</td><td>4950 Olson Memorial Highway</td><td></td></tr><tr><td>Granbury, TX</td><td>—</td><td>2,040</td><td>30,670</td><td>651</td><td>2,040</td><td>31,321</td><td>6,325</td><td>2011</td><td>2009</td><td>100 Watermark Boulevard</td><td></td></tr><tr><td>Greenville, SC</td><td>—</td><td>310</td><td>4,750</td><td>36</td><td>310</td><td>4,786</td><td>1,927</td><td>2004</td><td>1997</td><td>23 Southpointe Dr.</td><td></td></tr><tr><td>Grimsby, ON</td><td>—</td><td>636</td><td>5,617</td><td>271</td><td>649</td><td>5,875</td><td>990</td><td>2015</td><td>1991</td><td>84 Main Street East</td><td></td></tr><tr><td>Grosse Pointe Woods, MI</td><td>—</td><td>950</td><td>13,662</td><td>611</td><td>950</td><td>14,273</td><td>2,835</td><td>2013</td><td>2006</td><td>1850 Vernier Road</td><td></td></tr><tr><td>Grosse Pointe Woods, MI</td><td>—</td><td>1,430</td><td>31,777</td><td>1,118</td><td>1,435</td><td>32,890</td><td>6,544</td><td>2013</td><td>2005</td><td>21260 Mack Avenue</td><td></td></tr><tr><td>Grove City, OH</td><td>36,420</td><td>3,575</td><td>85,764</td><td>1,420</td><td>3,575</td><td>87,184</td><td>15</td><td>2018</td><td>2017</td><td>3717 Orders Road</td><td></td></tr><tr><td>Guelph, ON</td><td>3,985</td><td>1,190</td><td>7,597</td><td>407</td><td>1,224</td><td>7,970</td><td>1,551</td><td>2015</td><td>1978</td><td>165 Cole Road</td><td></td></tr><tr><td>Guildford, UK</td><td>—</td><td>5,361</td><td>56,494</td><td>2,457</td><td>5,542</td><td>58,770</td><td>11,811</td><td>2013</td><td>2006</td><td>Astatol Way, Peasmarsh</td><td></td></tr><tr><td>Gurnee, IL</td><td>—</td><td>890</td><td>27,931</td><td>2,110</td><td>935</td><td>29,996</td><td>5,768</td><td>2013</td><td>2002</td><td>500 North Hunt Club Road</td><td></td></tr><tr><td>Haddonfield, NJ</td><td>—</td><td>520</td><td>16,363</td><td>22</td><td>527</td><td>16,378</td><td>1,796</td><td>2011</td><td>2015</td><td>132 Warwick Road</td><td></td></tr><tr><td>Hamden, CT</td><td>—</td><td>1,460</td><td>24,093</td><td>1,912</td><td>1,493</td><td>25,972</td><td>7,593</td><td>2011</td><td>1999</td><td>35 Hamden Hills Drive</td><td></td></tr><tr><td>Hampshire, UK</td><td>—</td><td>4,172</td><td>26,035</td><td>1,185</td><td>4,322</td><td>27,070</td><td>5,857</td><td>2013</td><td>2006</td><td>22-26 Church Road</td><td></td></tr><tr><td>Haverford, PA</td><td>—</td><td>1,880</td><td>33,993</td><td>1,305</td><td>1,885</td><td>35,293</td><td>7,263</td><td>2010</td><td>2000</td><td>731 Old Buck Lane</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td></tr><tr><td>Haverhill, MA</td><td>—</td><td>1,720</td><td>50,046</td><td>1,165</td><td>1,729</td><td>51,202</td><td>7,876</td><td>2015</td><td>1997</td><td>254 Amesbury Road</td><td></td></tr><tr><td>Henderson, NV</td><td>—</td><td>880</td><td>29,809</td><td>994</td><td>897</td><td>30,786</td><td>6,451</td><td>2011</td><td>2009</td><td>1935 Paseo Verde Parkway</td><td></td></tr><tr><td>Henderson, NV</td><td>—</td><td>1,190</td><td>11,600</td><td>968</td><td>1,253</td><td>12,505</td><td>3,765</td><td>2013</td><td>2008</td><td>1555 West Horizon Ridge Parkway</td><td></td></tr><tr><td>High Wycombe, UK</td><td>—</td><td>3,567</td><td>13,422</td><td>—</td><td>3,567</td><td>13,422</td><td>622</td><td>2015</td><td>2017</td><td>The Row Lane End</td><td></td></tr><tr><td>Highland Park, IL</td><td>—</td><td>2,250</td><td>25,313</td><td>1,378</td><td>2,265</td><td>26,676</td><td>6,466</td><td>2013</td><td>2005</td><td>1601 Green Bay Road</td><td></td></tr><tr><td>Hingham, MA</td><td>—</td><td>1,440</td><td>32,292</td><td>269</td><td>1,444</td><td>32,557</td><td>4,511</td><td>2015</td><td>2012</td><td>1 Sgt. William B Terry Drive</td><td></td></tr><tr><td>Holbrook, NY</td><td>—</td><td>3,957</td><td>35,337</td><td>1,819</td><td>4,021</td><td>37,092</td><td>7,637</td><td>2013</td><td>2001</td><td>320 Patchogue Holbrook Road</td><td></td></tr><tr><td>Horley, UK</td><td>—</td><td>2,332</td><td>12,144</td><td>776</td><td>2,418</td><td>12,834</td><td>2,253</td><td>2014</td><td>2014</td><td>Court Lodge Road</td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>3,830</td><td>55,674</td><td>6,995</td><td>3,830</td><td>62,669</td><td>15,150</td><td>2012</td><td>1998</td><td>2929 West Holcombe Boulevard</td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>1,750</td><td>15,603</td><td>1,531</td><td>1,750</td><td>17,134</td><td>1,328</td><td>2016</td><td>2014</td><td>10120 Louetta Road</td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>960</td><td>16,151</td><td>—</td><td>960</td><td>16,151</td><td>7,703</td><td>2011</td><td>1995</td><td>10225 Cypresswood Dr</td><td></td></tr><tr><td>Howell, NJ</td><td>8,493</td><td>1,066</td><td>21,577</td><td>936</td><td>1,077</td><td>22,502</td><td>4,782</td><td>2010</td><td>2007</td><td>100 Meridian Place</td><td></td></tr><tr><td>Huntington Beach, CA</td><td>—</td><td>3,808</td><td>31,172</td><td>2,573</td><td>3,886</td><td>33,667</td><td>8,390</td><td>2013</td><td>2004</td><td>7401 Yorktown Avenue</td><td></td></tr><tr><td>Hutchinson, KS</td><td>—</td><td>600</td><td>10,590</td><td>324</td><td>604</td><td>10,910</td><td>3,986</td><td>2004</td><td>1997</td><td>2416 Brentwood</td><td></td></tr><tr><td>Irving, TX</td><td>—</td><td>1,030</td><td>6,823</td><td>1,332</td><td>1,030</td><td>8,155</td><td>2,320</td><td>2007</td><td>1999</td><td>8855 West Valley Ranch Parkway</td><td></td></tr><tr><td>Johns Creek, GA</td><td>—</td><td>1,580</td><td>23,285</td><td>827</td><td>1,588</td><td>24,104</td><td>5,111</td><td>2013</td><td>2009</td><td>11405 Medlock Bridge Road</td><td></td></tr><tr><td>Kanata, ON</td><td>—</td><td>1,689</td><td>28,670</td><td>87</td><td>1,663</td><td>28,783</td><td>6,073</td><td>2012</td><td>2005</td><td>70 Stonehaven Drive</td><td></td></tr><tr><td>Kansas City, MO</td><td>—</td><td>1,820</td><td>34,898</td><td>5,057</td><td>1,856</td><td>39,919</td><td>11,822</td><td>2010</td><td>1980</td><td>12100 Wormal Road</td><td></td></tr><tr><td>Kansas City, MO</td><td>5,265</td><td>1,930</td><td>39,997</td><td>4,923</td><td>1,963</td><td>44,887</td><td>13,359</td><td>2010</td><td>1986</td><td>6500 North Cosby Ave</td><td></td></tr><tr><td>Kansas City, MO</td><td>—</td><td>541</td><td>23,962</td><td>274</td><td>548</td><td>24,229</td><td>3,142</td><td>2015</td><td>2014</td><td>6460 North Cosby Avenue</td><td></td></tr><tr><td>Kelowna, BC</td><td>5,190</td><td>2,688</td><td>13,647</td><td>1,125</td><td>2,739</td><td>14,721</td><td>3,777</td><td>2013</td><td>1999</td><td>863 Leon Avenue</td><td></td></tr><tr><td>Kennebunk, ME</td><td>—</td><td>2,700</td><td>30,204</td><td>5,353</td><td>3,200</td><td>35,057</td><td>12,239</td><td>2013</td><td>2006</td><td>One Huntington Common Drive</td><td></td></tr><tr><td>Kennett Square, PA</td><td>—</td><td>1,050</td><td>22,946</td><td>356</td><td>1,092</td><td>23,260</td><td>4,837</td><td>2010</td><td>2008</td><td>301 Victoria Gardens Dr.</td><td></td></tr><tr><td>Kingston, ON</td><td>4,202</td><td>1,030</td><td>11,416</td><td>844</td><td>1,060</td><td>12,230</td><td>1,768</td><td>2015</td><td>1983</td><td>181 Ontario Street</td><td></td></tr><tr><td>Kingwood, TX</td><td>—</td><td>480</td><td>9,777</td><td>1,096</td><td>480</td><td>10,873</td><td>2,698</td><td>2011</td><td>1999</td><td>22955 Eastex Freeway</td><td></td></tr><tr><td>Kingwood, TX</td><td>—</td><td>1,683</td><td>24,207</td><td>2,465</td><td>1,683</td><td>26,672</td><td>2,493</td><td>2017</td><td>2012</td><td>24025 Kingwood Place</td><td></td></tr><tr><td>Kirkland, WA</td><td>24,600</td><td>3,450</td><td>38,709</td><td>1,204</td><td>3,523</td><td>39,840</td><td>8,936</td><td>2011</td><td>2009</td><td>14 Main Street South</td><td></td></tr><tr><td>Kitchener, ON</td><td>1,327</td><td>708</td><td>2,744</td><td>111</td><td>650</td><td>2,913</td><td>764</td><td>2013</td><td>1979</td><td>164 - 168 Ferfus Avenue</td><td></td></tr><tr><td>Kitchener, ON</td><td>4,293</td><td>1,130</td><td>9,939</td><td>417</td><td>1,163</td><td>10,323</td><td>2,398</td><td>2013</td><td>1988</td><td>20 Fieldgate Street</td><td></td></tr><tr><td>Kitchener, ON</td><td>3,271</td><td>1,093</td><td>7,327</td><td>346</td><td>1,112</td><td>7,654</td><td>2,201</td><td>2013</td><td>1964</td><td>290 Queen Street South</td><td></td></tr><tr><td>Kitchener, ON</td><td>12,164</td><td>1,341</td><td>13,939</td><td>2,763</td><td>1,324</td><td>16,719</td><td>3,178</td><td>2016</td><td>2003</td><td>1250 Weber Street E</td><td></td></tr><tr><td>La Palma, CA</td><td>—</td><td>2,950</td><td>16,591</td><td>1,313</td><td>2,973</td><td>17,881</td><td>3,857</td><td>2013</td><td>2003</td><td>5321 La Palma Avenue</td><td></td></tr><tr><td>Lafayette Hill, PA</td><td>—</td><td>1,750</td><td>11,848</td><td>2,311</td><td>1,867</td><td>14,042</td><td>3,981</td><td>2013</td><td>1998</td><td>429 Ridge Pike</td><td></td></tr><tr><td>Laguna Hills, CA</td><td>—</td><td>12,820</td><td>75,926</td><td>17,135</td><td>12,820</td><td>93,061</td><td>12,877</td><td>2016</td><td>1988</td><td>24903 Moulton Parkway</td><td></td></tr><tr><td>Laguna Woods, CA</td><td>—</td><td>11,280</td><td>76,485</td><td>12,253</td><td>11,280</td><td>88,738</td><td>12,298</td><td>2016</td><td>1987</td><td>24441 Calle Sonora</td><td></td></tr><tr><td>Laguna Woods, CA</td><td>—</td><td>9,150</td><td>57,842</td><td>8,919</td><td>9,150</td><td>66,761</td><td>9,651</td><td>2016</td><td>1986</td><td>24962 Calle Aragon</td><td></td></tr><tr><td>Lake Zurich, IL</td><td>—</td><td>1,470</td><td>9,830</td><td>3,002</td><td>1,470</td><td>12,832</td><td>4,506</td><td>2011</td><td>2007</td><td>550 America Court</td><td></td></tr><tr><td>Lancaster, CA</td><td>—</td><td>700</td><td>15,295</td><td>781</td><td>712</td><td>16,064</td><td>4,731</td><td>2010</td><td>1999</td><td>43051 15th St. West</td><td></td></tr><tr><td>Laval, QC</td><td>21,982</td><td>2,105</td><td>32,161</td><td>3,051</td><td>2,105</td><td>35,212</td><td>721</td><td>2018</td><td>2005</td><td>269, boulevard Ste. Rose</td><td></td></tr><tr><td>Laval, QC</td><td>4,283</td><td>2,383</td><td>5,968</td><td>550</td><td>2,383</td><td>6,518</td><td>136</td><td>2018</td><td>1989</td><td>263, boulevard Ste. Rose</td><td></td></tr><tr><td>Lawrenceville, GA</td><td>—</td><td>1,500</td><td>29,003</td><td>741</td><td>1,529</td><td>29,715</td><td>6,432</td><td>2013</td><td>2008</td><td>1375 Webb Gin House Road</td><td></td></tr><tr><td>Leatherhead, UK</td><td>—</td><td>4,682</td><td>17,835</td><td>—</td><td>4,682</td><td>17,835</td><td>718</td><td>2015</td><td>2017</td><td>Rectory Lane</td><td></td></tr><tr><td>Lecanto, FL</td><td>—</td><td>200</td><td>6,900</td><td>371</td><td>200</td><td>7,271</td><td>2,705</td><td>2004</td><td>1986</td><td>2341 W. Norvell Bryant Hwy.</td><td></td></tr><tr><td>Lenexa, KS</td><td>—</td><td>826</td><td>26,251</td><td>1,285</td><td>922</td><td>27,440</td><td>6,432</td><td>2013</td><td>2006</td><td>15055 West 87th Street Parkway</td><td></td></tr><tr><td>Leominster, MA</td><td>—</td><td>944</td><td>23,164</td><td>688</td><td>995</td><td>23,801</td><td>3,687</td><td>2015</td><td>1999</td><td>1160 Main Street</td><td></td></tr><tr><td>Lincoln, NJ</td><td>—</td><td>9</td><td>19,958</td><td>1,706</td><td>79</td><td>21,594</td><td>4,667</td><td>2013</td><td>2002</td><td>734 Newman Springs Road</td><td></td></tr><tr><td>Linwood, NJ</td><td>—</td><td>800</td><td>21,984</td><td>1,168</td><td>861</td><td>23,091</td><td>5,012</td><td>2010</td><td>1997</td><td>432 Central Ave</td><td></td></tr><tr><td>Litchfield, CT</td><td>—</td><td>1,240</td><td>17,908</td><td>11,060</td><td>1,258</td><td>28,950</td><td>4,862</td><td>2010</td><td>1998</td><td>19 Constitution Way</td><td></td></tr><tr><td>Little Neck, NY</td><td>—</td><td>3,350</td><td>38,461</td><td>1,421</td><td>3,358</td><td>39,874</td><td>8,411</td><td>2010</td><td>2000</td><td>55-15 Little Neck Pkwy.</td><td></td></tr><tr><td>Livingston, NJ</td><td>—</td><td>8,000</td><td>44,424</td><td>160</td><td>8,000</td><td>44,584</td><td>2,119</td><td>2015</td><td>2017</td><td>369 E Mt Pleasant Avenue</td><td></td></tr><tr><td>Lombard, IL</td><td>15,975</td><td>2,130</td><td>59,943</td><td>1,474</td><td>2,147</td><td>61,400</td><td>12,455</td><td>2013</td><td>2009</td><td>2210 Fountain Square Dr</td><td></td></tr><tr><td>London, UK</td><td>—</td><td>3,121</td><td>10,027</td><td>934</td><td>3,231</td><td>10,851</td><td>1,465</td><td>2014</td><td>2012</td><td>71 Hatch Lane</td><td></td></tr><tr><td>London, UK</td><td>—</td><td>7,691</td><td>16,797</td><td>—</td><td>7,691</td><td>16,797</td><td>1,007</td><td>2015</td><td>2016</td><td>6 Victoria Drive</td><td></td></tr><tr><td>London, ON</td><td>34</td><td>987</td><td>8,228</td><td>628</td><td>1,030</td><td>8,813</td><td>1,477</td><td>2015</td><td>1989</td><td>760 Horizon Drive</td><td></td></tr><tr><td>London, ON</td><td>11,009</td><td>1,969</td><td>16,985</td><td>1,214</td><td>1,998</td><td>18,170</td><td>3,022</td><td>2015</td><td>1953</td><td>1486 Richmond Street North</td><td></td></tr><tr><td>London, ON</td><td>—</td><td>1,445</td><td>13,631</td><td>953</td><td>1,579</td><td>14,450</td><td>2,131</td><td>2015</td><td>1950</td><td>81 Grand Avenue</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td></tr><tr><td>Longueuil, QC</td><td>9,064</td><td>3,992</td><td>23,711</td><td>1,778</td><td>4,102</td><td>25,379</td><td>4,144</td><td>2015</td><td>1989</td><td>70 Rue Levis</td><td></td></tr><tr><td>Los Angeles, CA</td><td>—</td><td>—</td><td>11,430</td><td>1,951</td><td>—</td><td>13,381</td><td>3,690</td><td>2008</td><td>1971</td><td>330 North Hayworth Avenue</td><td></td></tr><tr><td>Los Angeles, CA</td><td>60,018</td><td>—</td><td>114,438</td><td>2,355</td><td>—</td><td>116,793</td><td>28,628</td><td>2011</td><td>2009</td><td>10475 Wilshire Boulevard</td><td></td></tr><tr><td>Los Angeles, CA</td><td>—</td><td>3,540</td><td>19,007</td><td>2,583</td><td>3,540</td><td>21,590</td><td>4,919</td><td>2012</td><td>2001</td><td>2051 N. Highland Avenue</td><td></td></tr><tr><td>Los Angeles, CA</td><td>—</td><td>—</td><td>28,050</td><td>3,370</td><td>—</td><td>31,420</td><td>3,286</td><td>2016</td><td>2006</td><td>4061 Grand View Boulevard</td><td></td></tr><tr><td>Louisville, KY</td><td>—</td><td>2,420</td><td>20,816</td><td>1,863</td><td>2,420</td><td>22,679</td><td>5,317</td><td>2012</td><td>1999</td><td>4600 Bowling Boulevard</td><td></td></tr><tr><td>Louisville, KY</td><td>10,562</td><td>1,600</td><td>20,326</td><td>774</td><td>1,600</td><td>21,100</td><td>4,926</td><td>2013</td><td>2010</td><td>6700 Overlook Drive</td><td></td></tr><tr><td>Lynnfield, MA</td><td>—</td><td>3,165</td><td>45,200</td><td>2,580</td><td>3,507</td><td>47,438</td><td>10,225</td><td>2013</td><td>2006</td><td>55 Salem Street</td><td></td></tr><tr><td>Mahwah, NJ</td><td>—</td><td>1,605</td><td>27,249</td><td>17</td><td>1,605</td><td>27,266</td><td>2,539</td><td>2012</td><td>2015</td><td>15 Edison Road</td><td></td></tr><tr><td>Malvern, PA</td><td>—</td><td>1,651</td><td>17,194</td><td>2,128</td><td>1,739</td><td>19,234</td><td>5,499</td><td>2013</td><td>1998</td><td>324 Lancaster Avenue</td><td></td></tr><tr><td>Mansfield, MA</td><td>—</td><td>3,320</td><td>57,011</td><td>8,714</td><td>3,486</td><td>65,559</td><td>17,826</td><td>2011</td><td>1998</td><td>25 Cobb Street</td><td></td></tr><tr><td>Manteca, CA</td><td>—</td><td>1,300</td><td>12,125</td><td>1,648</td><td>1,312</td><td>13,761</td><td>5,447</td><td>2005</td><td>1986</td><td>430 N. Union Rd.</td><td></td></tr><tr><td>Maple Ridge, BC</td><td>8,159</td><td>2,875</td><td>11,922</td><td>321</td><td>2,943</td><td>12,175</td><td>1,489</td><td>2015</td><td>2009</td><td>12241 224th Street</td><td></td></tr><tr><td>Marieville, QC</td><td>6,198</td><td>1,278</td><td>12,113</td><td>117</td><td>1,302</td><td>12,206</td><td>1,691</td><td>2015</td><td>2002</td><td>425 rue Claude de Ramezay</td><td></td></tr><tr><td>Markham, ON</td><td>36,530</td><td>3,727</td><td>48,939</td><td>1,429</td><td>3,825</td><td>50,270</td><td>13,999</td><td>2013</td><td>1981</td><td>7700 Bayview Avenue</td><td></td></tr><tr><td>Marlboro, NJ</td><td>—</td><td>2,222</td><td>14,888</td><td>1,395</td><td>2,250</td><td>16,255</td><td>3,791</td><td>2013</td><td>2002</td><td>3A South Main Street</td><td></td></tr><tr><td>Medicine Hat, AB</td><td>10,262</td><td>1,432</td><td>14,141</td><td>48</td><td>1,460</td><td>14,161</td><td>2,923</td><td>2015</td><td>1999</td><td>223 Park Meadows Drive SE</td><td></td></tr><tr><td>Melbourne, FL</td><td>—</td><td>7,070</td><td>48,257</td><td>31,652</td><td>7,070</td><td>79,909</td><td>19,642</td><td>2007</td><td>2009</td><td>7300 Watersong Lane</td><td></td></tr><tr><td>Melville, NY</td><td>—</td><td>4,280</td><td>73,283</td><td>4,916</td><td>4,313</td><td>78,166</td><td>15,980</td><td>2010</td><td>2001</td><td>70 Pinelawn Rd</td><td></td></tr><tr><td>Memphis, TN</td><td>—</td><td>1,800</td><td>17,744</td><td>1,919</td><td>1,800</td><td>19,663</td><td>5,597</td><td>2012</td><td>1999</td><td>6605 Quail Hollow Road</td><td></td></tr><tr><td>Meriden, CT</td><td>—</td><td>1,500</td><td>14,874</td><td>1,429</td><td>1,542</td><td>16,261</td><td>5,727</td><td>2011</td><td>2001</td><td>511 Kensington Avenue</td><td></td></tr><tr><td>Metairie, LA</td><td>12,521</td><td>725</td><td>27,708</td><td>778</td><td>725</td><td>28,486</td><td>5,596</td><td>2013</td><td>2009</td><td>3732 West Esplanade Ave. S</td><td></td></tr><tr><td>Middletown, CT</td><td>—</td><td>1,430</td><td>24,242</td><td>1,986</td><td>1,460</td><td>26,198</td><td>7,799</td><td>2011</td><td>1999</td><td>645 Saybrook Road</td><td></td></tr><tr><td>Milford, CT</td><td>—</td><td>3,210</td><td>17,364</td><td>2,328</td><td>3,233</td><td>19,669</td><td>6,536</td><td>2011</td><td>1999</td><td>77 Plains Road</td><td></td></tr><tr><td>Mill Creek, WA</td><td>—</td><td>10,150</td><td>60,274</td><td>1,320</td><td>10,179</td><td>61,565</td><td>18,700</td><td>2010</td><td>1998</td><td>14905 Bothell-Everett Hwy</td><td></td></tr><tr><td>Milton, ON</td><td>13,723</td><td>4,542</td><td>25,321</td><td>1,962</td><td>4,627</td><td>27,198</td><td>3,433</td><td>2015</td><td>2012</td><td>611 Farmstead Drive</td><td></td></tr><tr><td>Minnetonka, MN</td><td>—</td><td>2,080</td><td>24,360</td><td>2,571</td><td>2,450</td><td>26,561</td><td>6,303</td><td>2012</td><td>1999</td><td>500 Carlson Parkway</td><td></td></tr><tr><td>Minnetonka, MN</td><td>—</td><td>920</td><td>29,344</td><td>1,161</td><td>964</td><td>30,461</td><td>5,900</td><td>2013</td><td>2006</td><td>18605 Old Excelsior Blvd.</td><td></td></tr><tr><td>Mission Viejo, CA</td><td>13,850</td><td>6,600</td><td>52,118</td><td>7,758</td><td>6,600</td><td>59,876</td><td>7,475</td><td>2016</td><td>1998</td><td>27783 Center Drive</td><td></td></tr><tr><td>Mississauga, ON</td><td>8,358</td><td>1,602</td><td>17,996</td><td>621</td><td>1,626</td><td>18,593</td><td>4,140</td><td>2013</td><td>1984</td><td>1130 Bough Beeches Boulevard</td><td></td></tr><tr><td>Mississauga, ON</td><td>2,816</td><td>873</td><td>4,655</td><td>232</td><td>887</td><td>4,873</td><td>1,147</td><td>2013</td><td>1978</td><td>3051 Constitution Boulevard</td><td></td></tr><tr><td>Mississauga, ON</td><td>26,718</td><td>3,649</td><td>35,137</td><td>1,441</td><td>3,723</td><td>36,504</td><td>8,161</td><td>2015</td><td>1988</td><td>1490 Rathburn Road East</td><td></td></tr><tr><td>Mississauga, ON</td><td>5,916</td><td>2,548</td><td>15,158</td><td>1,751</td><td>2,589</td><td>16,868</td><td>3,177</td><td>2015</td><td>1989</td><td>85 King Street East</td><td></td></tr><tr><td>Missoula, MT</td><td>—</td><td>550</td><td>7,490</td><td>437</td><td>550</td><td>7,927</td><td>2,767</td><td>2005</td><td>1998</td><td>3620 American Way</td><td></td></tr><tr><td>Mobberley, UK</td><td>—</td><td>5,146</td><td>26,665</td><td>1,834</td><td>5,340</td><td>28,305</td><td>7,514</td><td>2013</td><td>2007</td><td>Barclay Park, Hall Lane</td><td></td></tr><tr><td>Monterey, CA</td><td>—</td><td>6,440</td><td>29,101</td><td>1,549</td><td>6,440</td><td>30,650</td><td>6,486</td><td>2013</td><td>2009</td><td>1110 Cass St.</td><td></td></tr><tr><td>Montgomery, MD</td><td>—</td><td>6,482</td><td>83,642</td><td>10,924</td><td>6,482</td><td>94,566</td><td>3,480</td><td>2018</td><td>1992</td><td>3701 International Dr</td><td></td></tr><tr><td>Montgomery Village, MD</td><td>—</td><td>3,530</td><td>18,246</td><td>6,745</td><td>4,279</td><td>24,242</td><td>9,021</td><td>2013</td><td>1993</td><td>19310 Club House Road</td><td></td></tr><tr><td>Monteal, Noid, QC</td><td>11,740</td><td>4,407</td><td>23,719</td><td>2,992</td><td>4,407</td><td>26,711</td><td>511</td><td>2018</td><td>1988</td><td>6700, boulevard Gouin Est</td><td></td></tr><tr><td>Moorstown, NJ</td><td>—</td><td>2,060</td><td>51,628</td><td>1,982</td><td>2,083</td><td>53,587</td><td>11,069</td><td>2010</td><td>2000</td><td>1205 N. Church St</td><td></td></tr><tr><td>Moose Jaw, SK</td><td>2,076</td><td>582</td><td>12,973</td><td>906</td><td>590</td><td>13,871</td><td>3,039</td><td>2013</td><td>2001</td><td>425 4th Avenue NW</td><td></td></tr><tr><td>Murphy, TX</td><td>—</td><td>1,950</td><td>19,182</td><td>805</td><td>1,950</td><td>19,987</td><td>1,781</td><td>2015</td><td>2012</td><td>304 West FM 544</td><td></td></tr><tr><td>Naperville, IL</td><td>—</td><td>1,550</td><td>12,237</td><td>2,433</td><td>1,550</td><td>14,670</td><td>3,760</td><td>2012</td><td>2013</td><td>1936 Brookdale Road</td><td></td></tr><tr><td>Naperville, IL</td><td>—</td><td>1,540</td><td>28,204</td><td>1,392</td><td>1,573</td><td>29,563</td><td>6,517</td><td>2013</td><td>2002</td><td>535 West Ogden Avenue</td><td></td></tr><tr><td>Naples, FL</td><td>56,105</td><td>8,989</td><td>119,398</td><td>5,055</td><td>9,088</td><td>124,354</td><td>22,444</td><td>2015</td><td>2000</td><td>4800 Aston Gardens Way</td><td></td></tr><tr><td>Nashua, NH</td><td>—</td><td>1,264</td><td>43,026</td><td>1,373</td><td>1,264</td><td>44,399</td><td>5,491</td><td>2015</td><td>1999</td><td>674 West Hollis Street</td><td></td></tr><tr><td>Nashville, TN</td><td>—</td><td>3,900</td><td>35,788</td><td>2,848</td><td>3,900</td><td>38,636</td><td>10,313</td><td>2012</td><td>1999</td><td>4206 Stammer Place</td><td></td></tr><tr><td>Needham, MA</td><td>—</td><td>1,240</td><td>32,992</td><td>1,322</td><td>1,240</td><td>34,314</td><td>2,853</td><td>2016</td><td>2011</td><td>880 Greendale Avenue</td><td></td></tr><tr><td>Nepean, ON</td><td>5,387</td><td>1,575</td><td>5,770</td><td>528</td><td>1,613</td><td>6,260</td><td>1,447</td><td>2015</td><td>1988</td><td>1 Mill Hill Road</td><td></td></tr><tr><td>New Braunfels, TX</td><td>—</td><td>1,200</td><td>19,800</td><td>10,352</td><td>2,729</td><td>28,623</td><td>4,906</td><td>2011</td><td>2009</td><td>2294 East Common Street</td><td></td></tr><tr><td>Newark, DE</td><td>—</td><td>560</td><td>21,220</td><td>1,569</td><td>560</td><td>22,789</td><td>8,065</td><td>2004</td><td>1998</td><td>200 E. Village Rd.</td><td></td></tr><tr><td>Newbury, UK</td><td>—</td><td>2,850</td><td>12,796</td><td>672</td><td>2,946</td><td>13,372</td><td>810</td><td>2015</td><td>2016</td><td>370 London Road</td><td></td></tr><tr><td>Newburyport, MA</td><td>—</td><td>1,750</td><td>29,187</td><td>1,194</td><td>1,750</td><td>30,381</td><td>2,656</td><td>2016</td><td>2015</td><td>4 Wallace Bashaw Junior Way</td><td></td></tr><tr><td>Newmarket, UK</td><td>—</td><td>4,071</td><td>11,902</td><td>1,190</td><td>4,228</td><td>12,935</td><td>2,005</td><td>2014</td><td>2011</td><td>Jeddah Way</td><td></td></tr><tr><td>Newton, MA</td><td>—</td><td>2,250</td><td>43,614</td><td>1,253</td><td>2,263</td><td>44,854</td><td>11,966</td><td>2011</td><td>1996</td><td>2300 Washington Street</td><td></td></tr><tr><td>Newton, MA</td><td>14,881</td><td>2,500</td><td>30,681</td><td>3,183</td><td>2,574</td><td>33,790</td><td>9,409</td><td>2011</td><td>1996</td><td>280 Newtonville Avenue</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation (1)</td><td></td></tr><tr><td>Newton, MA</td><td>—</td><td>3,360</td><td>25,099</td><td>1,820</td><td>3,385</td><td>26,894</td><td>8,053</td><td>2011</td><td>1994</td><td>430 Centre Street</td><td></td></tr><tr><td>Newtown Square, PA</td><td>—</td><td>1,930</td><td>14,420</td><td>1,161</td><td>1,946</td><td>15,565</td><td>4,577</td><td>2013</td><td>2004</td><td>333 S. Newtown Street Rd.</td><td></td></tr><tr><td>Niagara Falls, ON</td><td>6,335</td><td>1,225</td><td>7,963</td><td>466</td><td>1,242</td><td>8,412</td><td>1,457</td><td>2015</td><td>1991</td><td>7860 Lundy&#x27;s Lane</td><td></td></tr><tr><td>North Andover, MA</td><td>—</td><td>1,960</td><td>34,976</td><td>2,116</td><td>2,111</td><td>36,941</td><td>10,087</td><td>2011</td><td>1995</td><td>700 Chickering Road</td><td></td></tr><tr><td>North Chelmsford, MA</td><td>—</td><td>880</td><td>18,478</td><td>999</td><td>951</td><td>19,406</td><td>5,126</td><td>2011</td><td>1998</td><td>2 Technology Drive</td><td></td></tr><tr><td>North Dartmouth, MA</td><td>—</td><td>1,700</td><td>35,337</td><td>1,723</td><td>1,700</td><td>37,060</td><td>3,374</td><td>2016</td><td>1997</td><td>239 Cross Road</td><td></td></tr><tr><td>North Tustin, CA</td><td>—</td><td>2,880</td><td>18,059</td><td>891</td><td>2,975</td><td>18,855</td><td>3,564</td><td>2013</td><td>2000</td><td>12291 Newport Avenue</td><td></td></tr><tr><td>Oak Park, IL</td><td>—</td><td>1,250</td><td>40,383</td><td>1,749</td><td>1,250</td><td>42,132</td><td>9,526</td><td>2012</td><td>2004</td><td>1035 Madison Street</td><td></td></tr><tr><td>Oakland, CA</td><td>—</td><td>3,877</td><td>47,508</td><td>3,252</td><td>4,036</td><td>50,601</td><td>10,954</td><td>2013</td><td>1999</td><td>11889 Skyline Boulevard</td><td></td></tr><tr><td>Oakton, VA</td><td>—</td><td>2,250</td><td>37,576</td><td>2,218</td><td>2,378</td><td>39,666</td><td>8,352</td><td>2013</td><td>1997</td><td>2863 Hunter Mill Road</td><td></td></tr><tr><td>Oakville, ON</td><td>5,499</td><td>1,252</td><td>7,382</td><td>373</td><td>1,278</td><td>7,729</td><td>1,795</td><td>2013</td><td>1982</td><td>289 and 299 Randall Street</td><td></td></tr><tr><td>Oakville, ON</td><td>9,164</td><td>2,134</td><td>29,963</td><td>1,107</td><td>2,165</td><td>31,039</td><td>7,349</td><td>2013</td><td>1994</td><td>25 Lakeshore Road West</td><td></td></tr><tr><td>Oakville, ON</td><td>4,797</td><td>1,271</td><td>13,754</td><td>606</td><td>1,289</td><td>14,342</td><td>2,929</td><td>2013</td><td>1988</td><td>345 Church Street</td><td></td></tr><tr><td>Oceanside, CA</td><td>—</td><td>2,160</td><td>18,352</td><td>4,094</td><td>2,243</td><td>22,363</td><td>6,097</td><td>2011</td><td>2005</td><td>3500 Lake Boulevard</td><td></td></tr><tr><td>Ogden, UT</td><td>—</td><td>360</td><td>6,700</td><td>731</td><td>360</td><td>7,431</td><td>2,689</td><td>2004</td><td>1998</td><td>1340 N. Washington Blv.</td><td></td></tr><tr><td>Okotoks, AB</td><td>17,892</td><td>714</td><td>20,943</td><td>557</td><td>728</td><td>21,486</td><td>3,640</td><td>2015</td><td>2010</td><td>51 Riverside Gate</td><td></td></tr><tr><td>Oshawa, ON</td><td>6,547</td><td>841</td><td>7,570</td><td>458</td><td>884</td><td>7,985</td><td>1,834</td><td>2013</td><td>1991</td><td>649 King Street East</td><td></td></tr><tr><td>Ottawa, ON</td><td>9,469</td><td>1,341</td><td>15,425</td><td>1,439</td><td>1,396</td><td>16,809</td><td>2,176</td><td>2015</td><td>2001</td><td>110 Berrigan Drive</td><td></td></tr><tr><td>Ottawa, ON</td><td>17,808</td><td>3,454</td><td>23,309</td><td>1,351</td><td>3,559</td><td>24,555</td><td>6,617</td><td>2015</td><td>1966</td><td>2370 Carling Avenue</td><td></td></tr><tr><td>Ottawa, ON</td><td>20,414</td><td>4,256</td><td>39,141</td><td>—</td><td>4,256</td><td>39,141</td><td>5,917</td><td>2015</td><td>2005</td><td>751 Peter Morand Crescent</td><td></td></tr><tr><td>Ottawa, ON</td><td>7,070</td><td>2,103</td><td>18,421</td><td>3,150</td><td>2,180</td><td>21,494</td><td>3,096</td><td>2015</td><td>1989</td><td>1 Eaton Street</td><td></td></tr><tr><td>Ottawa, ON</td><td>13,444</td><td>2,963</td><td>26,424</td><td>1,880</td><td>3,041</td><td>28,226</td><td>3,647</td><td>2015</td><td>2008</td><td>691 Valin Street</td><td></td></tr><tr><td>Ottawa, ON</td><td>10,161</td><td>1,561</td><td>18,170</td><td>1,336</td><td>1,647</td><td>19,420</td><td>2,412</td><td>2015</td><td>2006</td><td>22 Barnstone Drive</td><td></td></tr><tr><td>Ottawa, ON</td><td>13,568</td><td>3,403</td><td>31,090</td><td>1,941</td><td>3,467</td><td>32,967</td><td>4,134</td><td>2015</td><td>2009</td><td>990 Hunt Club Road</td><td></td></tr><tr><td>Ottawa, ON</td><td>17,204</td><td>3,411</td><td>28,335</td><td>4,152</td><td>3,502</td><td>32,396</td><td>5,257</td><td>2015</td><td>2009</td><td>2 Valley Stream Drive</td><td></td></tr><tr><td>Ottawa, ON</td><td>2,765</td><td>724</td><td>4,710</td><td>231</td><td>735</td><td>4,930</td><td>1,171</td><td>2013</td><td>1995</td><td>1345 Ogilvie Road</td><td></td></tr><tr><td>Ottawa, ON</td><td>2,012</td><td>818</td><td>2,165</td><td>1,192</td><td>691</td><td>3,484</td><td>888</td><td>2013</td><td>1993</td><td>370 Kennedy Lane</td><td></td></tr><tr><td>Ottawa, ON</td><td>9,559</td><td>2,809</td><td>27,299</td><td>1,253</td><td>2,880</td><td>28,481</td><td>7,177</td><td>2013</td><td>1998</td><td>43 Aylmer Avenue</td><td></td></tr><tr><td>Ottawa, ON</td><td>4,441</td><td>1,156</td><td>9,758</td><td>481</td><td>1,227</td><td>10,168</td><td>2,151</td><td>2013</td><td>1998</td><td>1351 Hunt Club Road</td><td></td></tr><tr><td>Ottawa, ON</td><td>5,778</td><td>746</td><td>7,800</td><td>541</td><td>763</td><td>8,324</td><td>1,805</td><td>2013</td><td>1999</td><td>140 Darlington Private</td><td></td></tr><tr><td>Ottawa, ON</td><td>8,729</td><td>1,176</td><td>12,764</td><td>778</td><td>1,231</td><td>13,487</td><td>1,876</td><td>2015</td><td>1987</td><td>10 Vaughan Street</td><td></td></tr><tr><td>Outremont, QC</td><td>17,544</td><td>6,746</td><td>45,981</td><td>5,133</td><td>6,746</td><td>51,114</td><td>1,007</td><td>2018</td><td>1976</td><td>1000, avenue Rockland</td><td></td></tr><tr><td>Palo Alto, CA</td><td>—</td><td>—</td><td>39,639</td><td>3,055</td><td>24</td><td>42,670</td><td>8,872</td><td>2013</td><td>2007</td><td>2701 El Camino Real</td><td></td></tr><tr><td>Paramus, NJ</td><td>—</td><td>2,840</td><td>35,728</td><td>1,729</td><td>2,947</td><td>37,350</td><td>7,659</td><td>2013</td><td>1998</td><td>567 Paramus Road</td><td></td></tr><tr><td>Parkland, FL</td><td>55,694</td><td>4,880</td><td>111,481</td><td>4,087</td><td>4,904</td><td>115,544</td><td>20,538</td><td>2015</td><td>2000</td><td>5999 University Drive</td><td></td></tr><tr><td>Paso Robles, CA</td><td>—</td><td>1,770</td><td>8,630</td><td>707</td><td>1,770</td><td>9,337</td><td>4,032</td><td>2002</td><td>1998</td><td>1919 Creston Rd.</td><td></td></tr><tr><td>Peabody, MA</td><td>6,012</td><td>2,250</td><td>16,071</td><td>1,099</td><td>2,324</td><td>17,096</td><td>2,858</td><td>2013</td><td>1994</td><td>73 Margin Street</td><td></td></tr><tr><td>Pembroke, ON</td><td>—</td><td>1,931</td><td>9,427</td><td>433</td><td>1,901</td><td>9,890</td><td>2,011</td><td>2012</td><td>1999</td><td>1111 Pembroke Street West</td><td></td></tr><tr><td>Pennington, NJ</td><td>—</td><td>1,380</td><td>27,620</td><td>1,115</td><td>1,491</td><td>28,624</td><td>5,562</td><td>2011</td><td>2000</td><td>143 West Franklin Avenue</td><td></td></tr><tr><td>Peoria, AZ</td><td>—</td><td>766</td><td>21,796</td><td>1,635</td><td>766</td><td>23,431</td><td>1,482</td><td>2018</td><td>2014</td><td>13391 N 94th Drive</td><td></td></tr><tr><td>Pittsburgh, PA</td><td>—</td><td>1,580</td><td>18,017</td><td>925</td><td>1,587</td><td>18,935</td><td>4,437</td><td>2013</td><td>2009</td><td>900 Lincoln Club Dr.</td><td></td></tr><tr><td>Placentia, CA</td><td>—</td><td>8,480</td><td>17,076</td><td>5,087</td><td>8,480</td><td>22,163</td><td>3,576</td><td>2016</td><td>1987</td><td>1180 N Bradford Avenue</td><td></td></tr><tr><td>Plainview, NY</td><td>—</td><td>3,066</td><td>19,901</td><td>1,018</td><td>3,182</td><td>20,803</td><td>4,124</td><td>2013</td><td>2001</td><td>1231 Old Country Road</td><td></td></tr><tr><td>Plano, TX</td><td>—</td><td>3,120</td><td>59,950</td><td>3,124</td><td>3,173</td><td>63,021</td><td>16,579</td><td>2013</td><td>2006</td><td>4800 West Parker Road</td><td></td></tr><tr><td>Plano, TX</td><td>—</td><td>1,750</td><td>15,390</td><td>1,954</td><td>1,750</td><td>17,344</td><td>1,626</td><td>2016</td><td>2014</td><td>3690 Mapleshade Lane</td><td></td></tr><tr><td>Playa Vista, CA</td><td>—</td><td>1,580</td><td>40,531</td><td>1,636</td><td>1,605</td><td>42,142</td><td>8,978</td><td>2013</td><td>2006</td><td>5555 Playa Vista Drive</td><td></td></tr><tr><td>Plymouth, MA</td><td>—</td><td>1,444</td><td>34,951</td><td>1,122</td><td>1,453</td><td>36,064</td><td>5,093</td><td>2015</td><td>1998</td><td>157 South Street</td><td></td></tr><tr><td>Plymouth, MA</td><td>13,169</td><td>2,550</td><td>35,055</td><td>2,256</td><td>2,550</td><td>37,311</td><td>3,895</td><td>2016</td><td>1970</td><td>60 Stafford Hill</td><td></td></tr><tr><td>Port Perry, ON</td><td>11,989</td><td>3,685</td><td>26,788</td><td>2,365</td><td>3,747</td><td>29,091</td><td>3,509</td><td>2015</td><td>2009</td><td>15987 Simcoe Street</td><td></td></tr><tr><td>Port St. Lucie, FL</td><td>—</td><td>8,700</td><td>47,230</td><td>20,478</td><td>8,700</td><td>67,708</td><td>15,304</td><td>2008</td><td>2010</td><td>10685 SW Stony Creek Way</td><td></td></tr><tr><td>Princeton, NJ</td><td>—</td><td>1,730</td><td>30,888</td><td>1,839</td><td>1,810</td><td>32,647</td><td>6,494</td><td>2011</td><td>2001</td><td>155 Raymond Road</td><td></td></tr><tr><td>Purley, UK</td><td>—</td><td>7,365</td><td>35,161</td><td>2,104</td><td>7,625</td><td>37,005</td><td>8,905</td><td>2012</td><td>2005</td><td>21 Russell Hill Road</td><td></td></tr><tr><td>Quebec City, QC</td><td>8,495</td><td>2,420</td><td>21,977</td><td>1,767</td><td>2,420</td><td>23,744</td><td>466</td><td>2018</td><td>2000</td><td>795, rue Alain</td><td></td></tr><tr><td>Quebec City, QC</td><td>12,067</td><td>3,300</td><td>28,325</td><td>2,207</td><td>3,300</td><td>30,532</td><td>605</td><td>2018</td><td>1987</td><td>650 and 700, avenue Murray</td><td></td></tr><tr><td>Queensbury, NY</td><td>—</td><td>1,260</td><td>21,744</td><td>1,014</td><td>1,264</td><td>22,754</td><td>3,140</td><td>2015</td><td>1999</td><td>27 Woodvale Road</td><td></td></tr><tr><td>Quincy, MA</td><td>—</td><td>1,350</td><td>12,584</td><td>981</td><td>1,428</td><td>13,487</td><td>4,083</td><td>2011</td><td>1998</td><td>2003 Falls Boulevard</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td></tr><tr><td>Rancho Cucamonga, CA</td><td>—</td><td>1,480</td><td>10,055</td><td>1,848</td><td>2,073</td><td>11,310</td><td>2,978</td><td>2013</td><td>2001</td><td>9519 Baseline Road</td><td></td></tr><tr><td>Rancho Palos Verdes, CA</td><td>—</td><td>5,450</td><td>60,034</td><td>2,453</td><td>5,450</td><td>62,487</td><td>14,179</td><td>2012</td><td>2004</td><td>5701 Crestridge Road</td><td></td></tr><tr><td>Randolph, NJ</td><td>—</td><td>1,540</td><td>46,934</td><td>1,379</td><td>1,619</td><td>48,234</td><td>9,841</td><td>2013</td><td>2006</td><td>648 Route 10 West</td><td></td></tr><tr><td>Red Deer, AB</td><td>12,026</td><td>1,247</td><td>19,283</td><td>592</td><td>1,273</td><td>19,849</td><td>3,093</td><td>2015</td><td>2004</td><td>3100 - 22 Street</td><td></td></tr><tr><td>Red Deer, AB</td><td>14,153</td><td>1,199</td><td>22,339</td><td>632</td><td>1,219</td><td>22,951</td><td>3,655</td><td>2015</td><td>2004</td><td>10 Inglewood Drive</td><td></td></tr><tr><td>Redondo Beach, CA</td><td>—</td><td>—</td><td>9,557</td><td>913</td><td>—</td><td>10,470</td><td>6,436</td><td>2011</td><td>1957</td><td>514 North Prospect Ave</td><td></td></tr><tr><td>Regina, SK</td><td>6,224</td><td>1,485</td><td>21,148</td><td>638</td><td>1,525</td><td>21,746</td><td>5,280</td><td>2013</td><td>1999</td><td>3651 Albert Street</td><td></td></tr><tr><td>Regina, SK</td><td>6,158</td><td>1,244</td><td>21,036</td><td>716</td><td>1,267</td><td>21,729</td><td>4,579</td><td>2013</td><td>2004</td><td>3105 Hillsdale Street</td><td></td></tr><tr><td>Regina, SK</td><td>15,076</td><td>1,539</td><td>24,053</td><td>2,617</td><td>1,579</td><td>26,630</td><td>3,750</td><td>2015</td><td>1992</td><td>1801 McIntyre Street</td><td></td></tr><tr><td>Rehoboth Beach, DE</td><td>—</td><td>960</td><td>24,248</td><td>8,847</td><td>993</td><td>33,062</td><td>6,077</td><td>2010</td><td>1999</td><td>36101 Seaside Blvd</td><td></td></tr><tr><td>Renton, WA</td><td>20,790</td><td>3,080</td><td>51,824</td><td>1,999</td><td>3,124</td><td>53,779</td><td>11,898</td><td>2011</td><td>2007</td><td>104 Burnett Avenue South</td><td></td></tr><tr><td>Ridgefield, CT</td><td>—</td><td>3,100</td><td>80,614</td><td>5,250</td><td>3,152</td><td>85,812</td><td>13,614</td><td>2015</td><td>1998</td><td>640 Danbury Road</td><td></td></tr><tr><td>Riviere-du-Loup, QC</td><td>2,892</td><td>592</td><td>7,601</td><td>761</td><td>590</td><td>8,364</td><td>1,150</td><td>2015</td><td>1956</td><td>35 des Cedres</td><td></td></tr><tr><td>Riviere-du-Loup, QC</td><td>11,905</td><td>1,454</td><td>16,848</td><td>3,500</td><td>1,563</td><td>20,239</td><td>3,453</td><td>2015</td><td>1993</td><td>230-235 rue Des Chenes</td><td></td></tr><tr><td>Rocky Hill, CT</td><td>—</td><td>1,090</td><td>6,710</td><td>1,534</td><td>1,090</td><td>8,244</td><td>3,089</td><td>2003</td><td>1996</td><td>60 Cold Spring Rd.</td><td></td></tr><tr><td>Rocky Hill, CT</td><td>—</td><td>810</td><td>16,351</td><td>833</td><td>926</td><td>17,068</td><td>4,679</td><td>2011</td><td>2000</td><td>1160 Elm Street</td><td></td></tr><tr><td>Rohnert Park, CA</td><td>—</td><td>6,500</td><td>18,700</td><td>2,205</td><td>6,556</td><td>20,849</td><td>7,644</td><td>2005</td><td>1986</td><td>4855 Snyder Lane</td><td></td></tr><tr><td>Romeoville, IL</td><td>—</td><td>854</td><td>12,646</td><td>61,135</td><td>6,197</td><td>68,438</td><td>16,480</td><td>2006</td><td>2010</td><td>605 S Edward Dr.</td><td></td></tr><tr><td>Roseville, MN</td><td>—</td><td>1,540</td><td>35,877</td><td>1,053</td><td>1,607</td><td>36,863</td><td>7,263</td><td>2013</td><td>2002</td><td>2555 Snelling Avenue, North</td><td></td></tr><tr><td>Roseville, CA</td><td>—</td><td>3,300</td><td>41,652</td><td>6,273</td><td>3,300</td><td>47,925</td><td>6,003</td><td>2016</td><td>2000</td><td>5161 Foothills Boulevard</td><td></td></tr><tr><td>Sacramento, CA</td><td>—</td><td>940</td><td>14,781</td><td>314</td><td>952</td><td>15,083</td><td>4,097</td><td>2010</td><td>1978</td><td>6350 Riverside Blvd</td><td></td></tr><tr><td>Sacramento, CA</td><td>—</td><td>1,300</td><td>23,394</td><td>1,402</td><td>1,369</td><td>24,727</td><td>5,105</td><td>2013</td><td>2004</td><td>345 Munroe Street</td><td></td></tr><tr><td>Saint-Lambert, QC</td><td>33,431</td><td>10,259</td><td>61,903</td><td>366</td><td>10,499</td><td>62,029</td><td>12,901</td><td>2015</td><td>1989</td><td>1705 Avenue Victoria</td><td></td></tr><tr><td>Salem, NH</td><td>—</td><td>980</td><td>32,721</td><td>4,326</td><td>1,054</td><td>36,973</td><td>8,805</td><td>2011</td><td>2000</td><td>242 Main Street</td><td></td></tr><tr><td>Salinas, CA</td><td>—</td><td>5,110</td><td>41,424</td><td>7,694</td><td>5,110</td><td>49,118</td><td>7,379</td><td>2016</td><td>1990</td><td>1320 Padre Drive</td><td></td></tr><tr><td>Salisbury, UK</td><td>—</td><td>2,720</td><td>15,269</td><td>719</td><td>2,812</td><td>15,896</td><td>2,011</td><td>2014</td><td>2013</td><td>Shapland Close</td><td></td></tr><tr><td>Salt Lake City, UT</td><td>—</td><td>1,360</td><td>19,691</td><td>1,601</td><td>1,360</td><td>21,292</td><td>6,988</td><td>2011</td><td>1986</td><td>1430 E. 4500 S.</td><td></td></tr><tr><td>San Angelo, TX</td><td>—</td><td>260</td><td>8,800</td><td>459</td><td>266</td><td>9,253</td><td>3,349</td><td>2004</td><td>1997</td><td>2695 Valleyview Blvd.</td><td></td></tr><tr><td>San Antonio, TX</td><td>—</td><td>6,120</td><td>28,169</td><td>2,590</td><td>6,120</td><td>30,759</td><td>6,071</td><td>2010</td><td>2011</td><td>2702 Cembalo Blvd</td><td></td></tr><tr><td>San Antonio, TX</td><td>—</td><td>5,045</td><td>58,048</td><td>3,228</td><td>5,045</td><td>61,276</td><td>3,306</td><td>2017</td><td>2015</td><td>11300 Wild Pine</td><td></td></tr><tr><td>San Diego, CA</td><td>—</td><td>4,200</td><td>30,707</td><td>731</td><td>4,243</td><td>31,395</td><td>5,825</td><td>2011</td><td>2011</td><td>2567 Second Avenue</td><td></td></tr><tr><td>San Diego, CA</td><td>—</td><td>5,810</td><td>63,078</td><td>2,808</td><td>5,810</td><td>65,886</td><td>17,092</td><td>2012</td><td>2001</td><td>13075 Evening Creek Drive S</td><td></td></tr><tr><td>San Diego, CA</td><td>—</td><td>3,000</td><td>27,164</td><td>881</td><td>3,016</td><td>28,029</td><td>5,495</td><td>2013</td><td>2003</td><td>810 Turquoise Street</td><td></td></tr><tr><td>San Francisco, CA</td><td>—</td><td>5,920</td><td>91,639</td><td>12,609</td><td>5,920</td><td>104,248</td><td>13,874</td><td>2016</td><td>1998</td><td>1550 Sutter Street</td><td></td></tr><tr><td>San Francisco, CA</td><td>—</td><td>11,800</td><td>77,214</td><td>9,969</td><td>11,800</td><td>87,183</td><td>11,932</td><td>2016</td><td>1923</td><td>1601 19th Avenue</td><td></td></tr><tr><td>San Gabriel, CA</td><td>—</td><td>3,120</td><td>15,566</td><td>948</td><td>3,138</td><td>16,496</td><td>3,797</td><td>2013</td><td>2005</td><td>8332 Huntington Drive</td><td></td></tr><tr><td>San Jose, CA</td><td>—</td><td>2,850</td><td>35,098</td><td>811</td><td>2,858</td><td>35,901</td><td>8,000</td><td>2011</td><td>2009</td><td>1420 Curvi Drive</td><td></td></tr><tr><td>San Jose, CA</td><td>—</td><td>3,280</td><td>46,823</td><td>3,149</td><td>3,280</td><td>49,972</td><td>11,218</td><td>2012</td><td>2002</td><td>500 S Winchester Boulevard</td><td></td></tr><tr><td>San Jose, CA</td><td>—</td><td>11,900</td><td>27,647</td><td>4,820</td><td>11,900</td><td>32,467</td><td>4,801</td><td>2016</td><td>2002</td><td>4853 Sea Feline Road</td><td></td></tr><tr><td>San Juan Capistrano, CA</td><td>—</td><td>1,390</td><td>6,942</td><td>1,450</td><td>1,390</td><td>8,392</td><td>3,797</td><td>2000</td><td>2001</td><td>30311 Camino Capistrano</td><td></td></tr><tr><td>San Rafael, CA</td><td>—</td><td>1,620</td><td>27,392</td><td>2,858</td><td>1,832</td><td>30,038</td><td>3,412</td><td>2016</td><td>2001</td><td>111 Merrydale Road</td><td></td></tr><tr><td>San Ramon, CA</td><td>—</td><td>8,700</td><td>72,223</td><td>9,628</td><td>8,700</td><td>81,851</td><td>11,263</td><td>2016</td><td>1992</td><td>9199 Firstcl Lane</td><td></td></tr><tr><td>Sandy Springs, GA</td><td>—</td><td>2,214</td><td>8,360</td><td>1,307</td><td>2,220</td><td>9,661</td><td>2,733</td><td>2012</td><td>1997</td><td>5455 Glenridge Drive NE</td><td></td></tr><tr><td>Santa Maria, CA</td><td>—</td><td>6,050</td><td>50,658</td><td>3,231</td><td>6,089</td><td>53,850</td><td>14,846</td><td>2011</td><td>2001</td><td>1220 Suey Road</td><td></td></tr><tr><td>Santa Monica, CA</td><td>18,727</td><td>5,250</td><td>28,340</td><td>950</td><td>5,263</td><td>29,277</td><td>6,184</td><td>2013</td><td>2004</td><td>1312 15th Street</td><td></td></tr><tr><td>Santa Rosa, CA</td><td>—</td><td>2,250</td><td>26,273</td><td>3,303</td><td>2,250</td><td>29,576</td><td>3,623</td><td>2016</td><td>2001</td><td>4225 Wayvern Drive</td><td></td></tr><tr><td>Saskatoon, SK</td><td>3,840</td><td>981</td><td>13,905</td><td>501</td><td>995</td><td>14,392</td><td>2,916</td><td>2013</td><td>1999</td><td>220 24th Street East</td><td></td></tr><tr><td>Saskatoon, SK</td><td>13,125</td><td>1,382</td><td>17,609</td><td>766</td><td>1,403</td><td>18,354</td><td>3,632</td><td>2013</td><td>2004</td><td>1622 Acadia Drive</td><td></td></tr><tr><td>Schaumburg, IL</td><td>—</td><td>2,460</td><td>22,863</td><td>1,175</td><td>2,497</td><td>24,001</td><td>5,884</td><td>2013</td><td>2001</td><td>790 North Plum Grove Road</td><td></td></tr><tr><td>Scottsdale, AZ</td><td>—</td><td>2,500</td><td>3,890</td><td>1,664</td><td>2,500</td><td>5,554</td><td>1,614</td><td>2008</td><td>1998</td><td>9410 East Thunderbird Road</td><td></td></tr><tr><td>Seal Beach, CA</td><td>—</td><td>6,204</td><td>72,954</td><td>2,078</td><td>6,271</td><td>74,965</td><td>19,259</td><td>2013</td><td>2004</td><td>3850 Lampson Avenue</td><td></td></tr><tr><td>Seattle, WA</td><td>—</td><td>5,190</td><td>9,350</td><td>748</td><td>5,199</td><td>10,089</td><td>3,616</td><td>2010</td><td>1962</td><td>11501 15th Ave NE</td><td></td></tr><tr><td>Seattle, WA</td><td>27,180</td><td>10,670</td><td>37,291</td><td>1,094</td><td>10,700</td><td>38,355</td><td>12,353</td><td>2010</td><td>2005</td><td>805 4th Ave N</td><td></td></tr><tr><td>Seattle, WA</td><td>48,540</td><td>6,790</td><td>85,369</td><td>3,258</td><td>6,825</td><td>88,592</td><td>20,335</td><td>2011</td><td>2009</td><td>5300 24th Avenue NE</td><td></td></tr><tr><td>Seattle, WA</td><td>—</td><td>1,150</td><td>19,887</td><td>1,284</td><td>1,153</td><td>21,168</td><td>2,724</td><td>2015</td><td>1995</td><td>11039 17th Avenue</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td colspan="2">Cost Capitalized</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Subsequent to Acquisition</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td><td></td></tr><tr><td>Selbyville, DE</td><td>—</td><td>750</td><td>25,912</td><td>508</td><td>769</td><td>26,401</td><td>5,564</td><td>2010</td><td>2008</td><td>21111</td><td>Arrington Dr</td></tr><tr><td>Sevenoaks, UK</td><td>—</td><td>6,181</td><td>40,240</td><td>4,176</td><td>6,390</td><td>44,207</td><td>10,318</td><td>2012</td><td>2009</td><td>64 - 70</td><td>Westerham Road</td></tr><tr><td>Severna Park, MD</td><td>—</td><td>—</td><td>67,623</td><td>5,574</td><td>24</td><td>73,173</td><td>8,947</td><td>2016</td><td>1997</td><td>43</td><td>W McKinsey Road</td></tr><tr><td>Shelburne, VT</td><td>—</td><td>720</td><td>31,041</td><td>1,966</td><td>777</td><td>32,950</td><td>8,191</td><td>2011</td><td>1988</td><td>687</td><td>Harbor Road</td></tr><tr><td>Shelby Township, MI</td><td>—</td><td>1,040</td><td>26,344</td><td>1,439</td><td>1,105</td><td>27,718</td><td>5,566</td><td>2013</td><td>2006</td><td>46471</td><td>Hayes Road</td></tr><tr><td>Shelton, CT</td><td>—</td><td>2,246</td><td>33,967</td><td>42</td><td>2,246</td><td>34,009</td><td>3,424</td><td>2013</td><td>2014</td><td>708A</td><td>Bridgeport Avenue</td></tr><tr><td>Shrewsbury, NJ</td><td>—</td><td>2,120</td><td>38,116</td><td>1,244</td><td>2,138</td><td>39,342</td><td>8,247</td><td>2010</td><td>2000</td><td>5</td><td>Meridian Way</td></tr><tr><td>Shrewsbury, MA</td><td>—</td><td>950</td><td>26,824</td><td>1,397</td><td>956</td><td>28,215</td><td>4,209</td><td>2015</td><td>1997</td><td>3111</td><td>Main Street</td></tr><tr><td>Sidcup, UK</td><td>—</td><td>7,446</td><td>56,570</td><td>3,312</td><td>7,714</td><td>59,614</td><td>15,051</td><td>2012</td><td>2000</td><td>Frognal Avenue</td><td></td></tr><tr><td>Simi Valley, CA</td><td>—</td><td>3,200</td><td>16,664</td><td>1,092</td><td>3,298</td><td>17,658</td><td>4,909</td><td>2013</td><td>2009</td><td>190</td><td>Tierra Rejada Road</td></tr><tr><td>Simi Valley, CA</td><td>—</td><td>5,510</td><td>51,406</td><td>8,073</td><td>5,510</td><td>59,479</td><td>8,314</td><td>2016</td><td>2003</td><td>5300</td><td>E Los Angeles Avenue</td></tr><tr><td>Solihull, UK</td><td>—</td><td>5,070</td><td>43,297</td><td>4,211</td><td>5,241</td><td>47,337</td><td>10,579</td><td>2012</td><td>2009</td><td>1270</td><td>Warwick Road</td></tr><tr><td>Solihull, UK</td><td>—</td><td>3,571</td><td>26,053</td><td>1,429</td><td>3,692</td><td>27,361</td><td>6,320</td><td>2013</td><td>2007</td><td>1</td><td>Worcester Way</td></tr><tr><td>Solihull, UK</td><td>—</td><td>1,851</td><td>10,585</td><td>499</td><td>1,913</td><td>11,022</td><td>770</td><td>2015</td><td>2016</td><td>Warwick Road</td><td></td></tr><tr><td>Somning, UK</td><td>—</td><td>5,644</td><td>42,155</td><td>2,660</td><td>3,853</td><td>44,606</td><td>9,317</td><td>2013</td><td>2009</td><td>Old Bath Rd.</td><td></td></tr><tr><td>Sonoma, CA</td><td>—</td><td>1,100</td><td>18,400</td><td>1,773</td><td>1,109</td><td>20,164</td><td>7,332</td><td>2005</td><td>1988</td><td>800</td><td>Oregon St.</td></tr><tr><td>Sonoma, CA</td><td>—</td><td>2,820</td><td>21,890</td><td>2,683</td><td>2,820</td><td>24,573</td><td>3,043</td><td>2016</td><td>2005</td><td>91</td><td>Napa Road</td></tr><tr><td>St. Albert, AB</td><td>7,432</td><td>1,145</td><td>17,863</td><td>1,854</td><td>1,185</td><td>19,677</td><td>5,098</td><td>2014</td><td>2005</td><td>78C</td><td>McKenney Avenue</td></tr><tr><td>St. John&#x27;s, NL</td><td>5,444</td><td>706</td><td>11,765</td><td>73</td><td>711</td><td>11,833</td><td>1,575</td><td>2015</td><td>2005</td><td>64</td><td>Portugal Cove Road</td></tr><tr><td>Stittsville, ON</td><td>4,237</td><td>1,175</td><td>17,397</td><td>753</td><td>1,192</td><td>18,133</td><td>3,630</td><td>2013</td><td>1996</td><td>1340 - 1354</td><td>Main Street</td></tr><tr><td>Stockport, UK</td><td>—</td><td>4,369</td><td>25,018</td><td>1,329</td><td>4,521</td><td>26,195</td><td>6,471</td><td>2013</td><td>2008</td><td>1</td><td>Dairyground Road</td></tr><tr><td>Stockton, CA</td><td>—</td><td>2,280</td><td>5,983</td><td>513</td><td>2,372</td><td>6,404</td><td>2,006</td><td>2010</td><td>1988</td><td>6725</td><td>Inglewood</td></tr><tr><td>Studio City, CA</td><td>—</td><td>4,006</td><td>25,307</td><td>1,151</td><td>4,109</td><td>26,355</td><td>6,453</td><td>2013</td><td>2004</td><td>4610</td><td>Coldwater Canyon Avenue</td></tr><tr><td>Sugar Land, TX</td><td>—</td><td>960</td><td>31,423</td><td>1,339</td><td>960</td><td>32,762</td><td>8,143</td><td>2011</td><td>1996</td><td>1221</td><td>Seventh St</td></tr><tr><td>Sugar Land, TX</td><td>—</td><td>4,272</td><td>60,493</td><td>6,530</td><td>4,272</td><td>67,023</td><td>4,864</td><td>2017</td><td>2015</td><td>744</td><td>Brooks Street</td></tr><tr><td>Sun City, FL</td><td>20,951</td><td>6,521</td><td>48,476</td><td>5,134</td><td>6,648</td><td>53,483</td><td>11,537</td><td>2015</td><td>1995</td><td>231</td><td>Courtyards</td></tr><tr><td>Sun City, FL</td><td>23,606</td><td>5,040</td><td>50,923</td><td>4,577</td><td>5,369</td><td>55,171</td><td>10,639</td><td>2015</td><td>1999</td><td>1311</td><td>Aston Gardens Court</td></tr><tr><td>Sunnyvale, CA</td><td>—</td><td>5,420</td><td>41,682</td><td>2,155</td><td>5,420</td><td>43,837</td><td>10,239</td><td>2012</td><td>2002</td><td>1039</td><td>East El Camino Real</td></tr><tr><td>Surrey, BC</td><td>6,323</td><td>3,605</td><td>18,818</td><td>1,018</td><td>3,658</td><td>19,783</td><td>5,725</td><td>2013</td><td>2000</td><td>16028</td><td>83rd Avenue</td></tr><tr><td>Surrey, BC</td><td>15,142</td><td>4,552</td><td>22,338</td><td>1,332</td><td>4,631</td><td>23,591</td><td>7,190</td><td>2013</td><td>1987</td><td>15501</td><td>16th Avenue</td></tr><tr><td>Sutton, UK</td><td>—</td><td>4,096</td><td>14,532</td><td>730</td><td>4,234</td><td>15,124</td><td>851</td><td>2015</td><td>2016</td><td>123</td><td>Westmead Road</td></tr><tr><td>Suwanee, GA</td><td>—</td><td>1,560</td><td>11,538</td><td>1,665</td><td>1,560</td><td>13,203</td><td>3,281</td><td>2012</td><td>2000</td><td>4315</td><td>Johns Creek Parkway</td></tr><tr><td>Sway, UK</td><td>—</td><td>4,145</td><td>15,508</td><td>1,113</td><td>4,334</td><td>16,432</td><td>3,004</td><td>2014</td><td>2008</td><td>Sway Place</td><td></td></tr><tr><td>Swift Current, SK</td><td>1,871</td><td>492</td><td>10,119</td><td>455</td><td>505</td><td>10,561</td><td>2,324</td><td>2013</td><td>2001</td><td>301</td><td>Macoun Drive</td></tr><tr><td>Tacoma, WA</td><td>17,640</td><td>2,400</td><td>35,053</td><td>1,276</td><td>2,493</td><td>36,236</td><td>8,057</td><td>2011</td><td>2008</td><td>7290</td><td>Rosemount Circle</td></tr><tr><td>Tacoma, WA</td><td>—</td><td>1,535</td><td>6,068</td><td>67</td><td>1,537</td><td>6,133</td><td>1,095</td><td>2015</td><td>2012</td><td>7290</td><td>Rosemount Circle</td></tr><tr><td>Tacoma, WA</td><td>—</td><td>4,170</td><td>73,377</td><td>12,917</td><td>4,170</td><td>86,294</td><td>11,797</td><td>2016</td><td>1987</td><td>8201</td><td>6th Avenue</td></tr><tr><td>Tampa, FL</td><td>69,330</td><td>4,910</td><td>114,148</td><td>5,229</td><td>4,996</td><td>119,291</td><td>20,181</td><td>2015</td><td>2001</td><td>12951</td><td>W Linebaugh Avenue</td></tr><tr><td>Tewksbury, MA</td><td>—</td><td>2,350</td><td>24,118</td><td>2,172</td><td>2,350</td><td>26,290</td><td>3,205</td><td>2016</td><td>2006</td><td>2000</td><td>Eneral Court</td></tr><tr><td>The Woodlands, TX</td><td>—</td><td>480</td><td>12,379</td><td>679</td><td>480</td><td>13,058</td><td>3,238</td><td>2011</td><td>1999</td><td>7950</td><td>Bay Branch Dr</td></tr><tr><td>Toledo, OH</td><td>—</td><td>2,040</td><td>47,129</td><td>3,722</td><td>2,144</td><td>50,747</td><td>15,040</td><td>2010</td><td>1985</td><td>3501</td><td>Executive Parkway</td></tr><tr><td>Toms River, NJ</td><td>—</td><td>1,610</td><td>34,627</td><td>1,077</td><td>1,681</td><td>35,633</td><td>7,529</td><td>2010</td><td>2005</td><td>1587</td><td>Old Freehold Rd</td></tr><tr><td>Toronto, ON</td><td>17,086</td><td>2,927</td><td>20,713</td><td>1,635</td><td>2,997</td><td>22,278</td><td>3,323</td><td>2015</td><td>1900</td><td>54</td><td>Foxbar Road</td></tr><tr><td>Toronto, ON</td><td>8,268</td><td>5,082</td><td>25,493</td><td>1,375</td><td>5,178</td><td>26,772</td><td>5,294</td><td>2015</td><td>1988</td><td>645</td><td>Castlefield Avenue</td></tr><tr><td>Toronto, ON</td><td>12,478</td><td>2,008</td><td>19,620</td><td>—</td><td>2,008</td><td>19,620</td><td>3,033</td><td>2015</td><td>1999</td><td>4251</td><td>Dundas Street West</td></tr><tr><td>Toronto, ON</td><td>36,296</td><td>5,132</td><td>41,657</td><td>2,931</td><td>5,209</td><td>44,511</td><td>10,383</td><td>2015</td><td>1964</td><td>10</td><td>William Morgan Drive</td></tr><tr><td>Toronto, ON</td><td>4,268</td><td>2,480</td><td>7,571</td><td>492</td><td>2,527</td><td>8,016</td><td>1,724</td><td>2015</td><td>1971</td><td>123</td><td>Spadina Road</td></tr><tr><td>Toronto, ON</td><td>1,217</td><td>1,079</td><td>5,364</td><td>269</td><td>1,095</td><td>5,617</td><td>1,246</td><td>2013</td><td>1982</td><td>25</td><td>Centennial Park Road</td></tr><tr><td>Toronto, ON</td><td>7,531</td><td>2,513</td><td>19,695</td><td>969</td><td>2,583</td><td>20,594</td><td>3,845</td><td>2013</td><td>2002</td><td>305</td><td>Balliol Street</td></tr><tr><td>Toronto, ON</td><td>17,407</td><td>3,400</td><td>32,757</td><td>1,488</td><td>3,456</td><td>34,189</td><td>7,774</td><td>2013</td><td>1973</td><td>1055</td><td>and 1057 Don Mills Road</td></tr><tr><td>Toronto, ON</td><td>751</td><td>1,361</td><td>2,915</td><td>303</td><td>1,414</td><td>3,165</td><td>1,155</td><td>2013</td><td>1985</td><td>3705</td><td>Bathurst Street</td></tr><tr><td>Toronto, ON</td><td>5,685</td><td>1,447</td><td>3,918</td><td>358</td><td>1,494</td><td>4,229</td><td>1,147</td><td>2013</td><td>1987</td><td>1340</td><td>York Mills Road</td></tr><tr><td>Toronto, ON</td><td>30,679</td><td>5,304</td><td>53,488</td><td>2,130</td><td>5,387</td><td>55,535</td><td>15,694</td><td>2013</td><td>1988</td><td>8</td><td>The Donway East</td></tr><tr><td>Torrance, CA</td><td>—</td><td>3,497</td><td>73,138</td><td>16</td><td>3,497</td><td>73,154</td><td>4,639</td><td>2016</td><td>2016</td><td>25525</td><td>Hawthorne Boulevard</td></tr><tr><td>Tulsa, OK</td><td>—</td><td>1,330</td><td>21,285</td><td>4,417</td><td>1,362</td><td>25,670</td><td>7,149</td><td>2010</td><td>1986</td><td>8887</td><td>South Lewis Ave</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td colspan="2">Cost Capitalized</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Subsequent to Acquisition</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td><td></td></tr><tr><td>Tulsa, OK</td><td>—</td><td>1,500</td><td>20,861</td><td>3,934</td><td>1,581</td><td>24,714</td><td>7,228</td><td>2010</td><td>1984</td><td>9524 East 71st St</td><td></td><td></td></tr><tr><td>Tustin, CA</td><td>—</td><td>840</td><td>15,299</td><td>744</td><td>840</td><td>16,043</td><td>3,784</td><td>2011</td><td>1965</td><td>240 East 3rd St</td><td></td><td></td></tr><tr><td>Upland, CA</td><td>—</td><td>3,160</td><td>42,596</td><td>55</td><td>3,160</td><td>42,651</td><td>5,414</td><td>2015</td><td>2014</td><td>2419 North Euclid Avenue</td><td></td><td></td></tr><tr><td>Upper Providence, PA</td><td>—</td><td>1,900</td><td>28,195</td><td>37</td><td>1,900</td><td>28,232</td><td>2,719</td><td>2013</td><td>2015</td><td>1133 Black Rock Road</td><td></td><td></td></tr><tr><td>Upper St Claire, PA</td><td>—</td><td>1,102</td><td>13,455</td><td>1,396</td><td>1,125</td><td>14,828</td><td>3,714</td><td>2013</td><td>2005</td><td>500 Village Drive</td><td></td><td></td></tr><tr><td>Vacaville, CA</td><td>—</td><td>900</td><td>17,100</td><td>1,756</td><td>907</td><td>18,849</td><td>7,022</td><td>2005</td><td>1987</td><td>799 Yellowstone Dr.</td><td></td><td></td></tr><tr><td>Vallejo, CA</td><td>—</td><td>4,000</td><td>18,000</td><td>2,476</td><td>4,030</td><td>20,446</td><td>7,573</td><td>2005</td><td>1989</td><td>350 Locust Dr.</td><td></td><td></td></tr><tr><td>Vallejo, CA</td><td>—</td><td>2,330</td><td>15,407</td><td>390</td><td>2,330</td><td>15,797</td><td>4,505</td><td>2010</td><td>1990</td><td>2261 Tuolumne</td><td></td><td></td></tr><tr><td>Vancouver, WA</td><td>—</td><td>1,820</td><td>19,042</td><td>438</td><td>1,821</td><td>19,479</td><td>5,299</td><td>2010</td><td>2006</td><td>10011 NE 118th Ave</td><td></td><td></td></tr><tr><td>Vancouver, BC</td><td>—</td><td>7,282</td><td>6,572</td><td>—</td><td>7,282</td><td>6,572</td><td>5,332</td><td>2015</td><td>1974</td><td>2803 West 41st Avenue</td><td></td><td></td></tr><tr><td>Vankleek Hill, ON</td><td>750</td><td>389</td><td>2,960</td><td>293</td><td>400</td><td>3,242</td><td>820</td><td>2013</td><td>1987</td><td>48 Wall Street</td><td></td><td></td></tr><tr><td>Vaudreuil, QC</td><td>7,822</td><td>1,852</td><td>14,214</td><td>546</td><td>1,829</td><td>14,783</td><td>2,234</td><td>2015</td><td>1975</td><td>333 rue Querbes</td><td></td><td></td></tr><tr><td>Venice, FL</td><td>64,425</td><td>6,820</td><td>100,501</td><td>4,362</td><td>6,892</td><td>104,791</td><td>19,357</td><td>2015</td><td>2002</td><td>1000 Aston Gardens Drive</td><td></td><td></td></tr><tr><td>Vero Beach, FL</td><td>—</td><td>2,930</td><td>40,070</td><td>25,658</td><td>2,930</td><td>65,728</td><td>19,456</td><td>2007</td><td>2003</td><td>7955 16th Manor</td><td></td><td></td></tr><tr><td>Victoria, BC</td><td>6,833</td><td>2,856</td><td>18,038</td><td>565</td><td>2,898</td><td>18,561</td><td>4,657</td><td>2013</td><td>1974</td><td>3000 Shelbourne Street</td><td></td><td></td></tr><tr><td>Victoria, BC</td><td>6,299</td><td>3,681</td><td>15,774</td><td>555</td><td>3,736</td><td>16,274</td><td>4,244</td><td>2013</td><td>1988</td><td>3051 Shelbourne Street</td><td></td><td></td></tr><tr><td>Victoria, BC</td><td>7,064</td><td>2,476</td><td>15,379</td><td>1,020</td><td>2,516</td><td>16,359</td><td>2,115</td><td>2015</td><td>1990</td><td>3965 Shelbourne Street</td><td></td><td></td></tr><tr><td>Virginia Water, UK</td><td>—</td><td>7,106</td><td>29,937</td><td>5,937</td><td>5,629</td><td>37,351</td><td>8,494</td><td>2012</td><td>2002</td><td>Christ Church Road</td><td></td><td></td></tr><tr><td>Voorhees, NJ</td><td>—</td><td>3,700</td><td>24,312</td><td>1,821</td><td>3,854</td><td>25,979</td><td>4,025</td><td>2012</td><td>2013</td><td>311 Route 73</td><td></td><td></td></tr><tr><td>Wall, NJ</td><td>—</td><td>1,650</td><td>25,350</td><td>2,679</td><td>1,692</td><td>27,987</td><td>5,356</td><td>2011</td><td>2003</td><td>2021 Highway 35</td><td></td><td></td></tr><tr><td>Walnut Creek, CA</td><td>—</td><td>3,700</td><td>12,467</td><td>2,280</td><td>3,808</td><td>14,639</td><td>4,072</td><td>2013</td><td>1998</td><td>2175 Ygnacio Valley Road</td><td></td><td></td></tr><tr><td>Walnut Creek, CA</td><td>—</td><td>10,320</td><td>100,890</td><td>15,190</td><td>10,320</td><td>116,080</td><td>15,633</td><td>2016</td><td>1988</td><td>1580 Geary Road</td><td></td><td></td></tr><tr><td>Waltham, MA</td><td>—</td><td>2,462</td><td>40,062</td><td>1,457</td><td>2,551</td><td>41,430</td><td>6,700</td><td>2015</td><td>2000</td><td>126 Smith Street</td><td></td><td></td></tr><tr><td>Washington, DC</td><td>30,162</td><td>4,000</td><td>69,154</td><td>3,157</td><td>4,004</td><td>72,307</td><td>14,549</td><td>2013</td><td>2004</td><td>5111 Connecticut Avenue NW</td><td></td><td></td></tr><tr><td>Watchung, NJ</td><td>—</td><td>1,920</td><td>24,880</td><td>1,348</td><td>2,048</td><td>26,100</td><td>5,131</td><td>2011</td><td>2000</td><td>680 Mountain Boulevard</td><td></td><td></td></tr><tr><td>Wayland, MA</td><td>—</td><td>1,207</td><td>27,462</td><td>2,157</td><td>1,334</td><td>29,492</td><td>6,527</td><td>2013</td><td>1997</td><td>285 Commonwealth Road</td><td></td><td></td></tr><tr><td>Webster Groves, MO</td><td>—</td><td>1,790</td><td>15,425</td><td>2,391</td><td>1,793</td><td>17,813</td><td>4,543</td><td>2011</td><td>2012</td><td>45 E Lockwood Avenue</td><td></td><td></td></tr><tr><td>Welland, ON</td><td>6,041</td><td>983</td><td>7,530</td><td>94</td><td>969</td><td>7,638</td><td>1,060</td><td>2015</td><td>2006</td><td>110 First Street</td><td></td><td></td></tr><tr><td>Wellesley, MA</td><td>—</td><td>4,690</td><td>77,462</td><td>219</td><td>4,690</td><td>77,681</td><td>11,776</td><td>2015</td><td>2012</td><td>23 &amp; 27 Washington Street</td><td></td><td></td></tr><tr><td>West Babylon, NY</td><td>—</td><td>3,960</td><td>47,085</td><td>2,224</td><td>3,960</td><td>49,309</td><td>9,640</td><td>2013</td><td>2003</td><td>580 Montauk Highway</td><td></td><td></td></tr><tr><td>West Bloomfield, MI</td><td>—</td><td>1,040</td><td>12,300</td><td>835</td><td>1,094</td><td>13,081</td><td>2,977</td><td>2013</td><td>2000</td><td>7005 Pontiac Trail</td><td></td><td></td></tr><tr><td>West Hills, CA</td><td>—</td><td>2,600</td><td>7,521</td><td>1,545</td><td>2,636</td><td>9,030</td><td>2,681</td><td>2013</td><td>2002</td><td>9012 Topanga Canyon Road</td><td></td><td></td></tr><tr><td>West Vancouver, BC</td><td>17,668</td><td>7,059</td><td>28,155</td><td>1,997</td><td>7,168</td><td>30,043</td><td>7,104</td><td>2013</td><td>1987</td><td>2095 Marine Drive</td><td></td><td></td></tr><tr><td>Westbourne, UK</td><td>—</td><td>5,441</td><td>41,420</td><td>3,300</td><td>5,627</td><td>44,534</td><td>9,612</td><td>2013</td><td>2006</td><td>16-18 Poole Road</td><td></td><td></td></tr><tr><td>Westford, MA</td><td>—</td><td>1,440</td><td>32,607</td><td>319</td><td>1,468</td><td>32,898</td><td>4,202</td><td>2015</td><td>2013</td><td>108 Littleton Road</td><td></td><td></td></tr><tr><td>Weston, MA</td><td>—</td><td>1,160</td><td>6,200</td><td>1,274</td><td>1,160</td><td>7,474</td><td>1,583</td><td>2013</td><td>1998</td><td>135 North Avenue</td><td></td><td></td></tr><tr><td>Westworth Village, TX</td><td>—</td><td>2,060</td><td>31,296</td><td>60</td><td>2,060</td><td>31,356</td><td>3,346</td><td>2014</td><td>2014</td><td>25 Leonard Trail</td><td></td><td></td></tr><tr><td>Weybridge, UK</td><td>—</td><td>7,899</td><td>48,240</td><td>2,386</td><td>8,166</td><td>50,359</td><td>12,363</td><td>2013</td><td>2008</td><td>Ellesmere Road</td><td></td><td></td></tr><tr><td>Weymouth, UK</td><td>—</td><td>2,591</td><td>16,551</td><td>880</td><td>2,714</td><td>17,308</td><td>2,114</td><td>2014</td><td>2013</td><td>Cross Road</td><td></td><td></td></tr><tr><td>White Oak, MD</td><td>—</td><td>2,304</td><td>24,768</td><td>1,936</td><td>2,316</td><td>26,692</td><td>5,465</td><td>2013</td><td>2002</td><td>11621 New Hampshire Avenue</td><td></td><td></td></tr><tr><td>Wilmington, DE</td><td>—</td><td>1,040</td><td>23,338</td><td>1,771</td><td>1,129</td><td>25,020</td><td>5,281</td><td>2013</td><td>2004</td><td>2215 Shipley Street</td><td></td><td></td></tr><tr><td>Winchester, UK</td><td>—</td><td>6,009</td><td>29,405</td><td>1,472</td><td>6,220</td><td>30,666</td><td>7,194</td><td>2012</td><td>2010</td><td>Stockbridge Road</td><td></td><td></td></tr><tr><td>Winnipeg, MB</td><td>11,756</td><td>1,960</td><td>38,612</td><td>2,244</td><td>2,058</td><td>40,758</td><td>12,275</td><td>2013</td><td>1999</td><td>857 Wilkes Avenue</td><td></td><td></td></tr><tr><td>Winnipeg, MB</td><td>14,961</td><td>1,276</td><td>21,732</td><td>1,083</td><td>1,419</td><td>22,672</td><td>4,820</td><td>2013</td><td>1988</td><td>3161 Grant Avenue</td><td></td><td></td></tr><tr><td>Winnipeg, MB</td><td>12,124</td><td>1,317</td><td>15,609</td><td>1,864</td><td>1,346</td><td>17,444</td><td>3,116</td><td>2015</td><td>1999</td><td>125 Portsmouth Boulevard</td><td></td><td></td></tr><tr><td>Woking, UK</td><td>—</td><td>2,990</td><td>12,523</td><td>—</td><td>2,990</td><td>12,523</td><td>363</td><td>2016</td><td>2017</td><td>12 Streets Heath, West End</td><td></td><td></td></tr><tr><td>Wolverhampton, UK</td><td>—</td><td>2,941</td><td>8,922</td><td>724</td><td>3,047</td><td>9,540</td><td>3,114</td><td>2013</td><td>2008</td><td>73 Wergs Road</td><td></td><td></td></tr><tr><td>Woodbridge, CT</td><td>—</td><td>1,370</td><td>14,219</td><td>1,594</td><td>1,426</td><td>15,757</td><td>5,754</td><td>2011</td><td>1998</td><td>21 Bradley Road</td><td></td><td></td></tr><tr><td>Woodland Hills, CA</td><td>—</td><td>3,400</td><td>20,478</td><td>1,079</td><td>3,447</td><td>21,510</td><td>5,278</td><td>2013</td><td>2005</td><td>20461 Ventura Boulevard</td><td></td><td></td></tr><tr><td>Worcester, MA</td><td>—</td><td>1,140</td><td>21,664</td><td>1,382</td><td>1,166</td><td>23,020</td><td>6,192</td><td>2011</td><td>1999</td><td>340 May Street</td><td></td><td></td></tr><tr><td>Yarmouth, ME</td><td>—</td><td>450</td><td>27,711</td><td>1,410</td><td>484</td><td>29,087</td><td>7,458</td><td>2011</td><td>1999</td><td>27 Forest Falls Drive</td><td></td><td></td></tr><tr><td>Yonkers, NY</td><td>—</td><td>3,962</td><td>50,107</td><td>2,111</td><td>3,967</td><td>52,213</td><td>10,824</td><td>2013</td><td>2005</td><td>65 Crisfield Street</td><td></td><td></td></tr><tr><td>Yorkton, SK</td><td>3,085</td><td>463</td><td>8,760</td><td>340</td><td>473</td><td>9,090</td><td>2,004</td><td>2013</td><td>2001</td><td>94 Russell Drive</td><td></td><td></td></tr><tr><td>Seniors Housing</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating Total</td><td>$1,810,587</td><td>$1,331,171</td><td>$14,047,033</td><td>$1,206,757</td><td>$1,373,258</td><td>$15,211,900</td><td>$2,962,334</td><td></td><td></td><td></td><td></td><td></td></tr></table>



## Welltower Inc.
Schedule III

## Real Estate and Accumulated Depreciation
December 31, 2018

(Dollars in thousands)

<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>(1)</td></tr><tr><td>Triple-net:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Abilene, TX</td><td>—</td><td>—</td><td>950</td><td>20,987</td><td>$ 11,660</td><td>$ 950</td><td>$ 32,647</td><td>$ 2,632</td><td>2014</td><td>1998</td><td>6565 Central Park Boulevard</td></tr><tr><td>Abilene, TX</td><td>—</td><td>—</td><td>990</td><td>8,187</td><td>1,089</td><td>990</td><td>9,276</td><td>1,000</td><td>2014</td><td>1985</td><td>1250 East N 10th Street</td></tr><tr><td>Aboite Twp, IN</td><td>—</td><td>—</td><td>1,770</td><td>19,930</td><td>1,601</td><td>1,770</td><td>21,531</td><td>4,613</td><td>2010</td><td>2008</td><td>611 W County Line Rd South</td></tr><tr><td>Adelphi, MD</td><td>—</td><td>—</td><td>1,429</td><td>4,312</td><td>—</td><td>1,429</td><td>4,312</td><td>56</td><td>2018</td><td>1967</td><td>1801 Metzertrot Road</td></tr><tr><td>Agawam, MA</td><td>—</td><td>—</td><td>880</td><td>16,112</td><td>2,134</td><td>880</td><td>18,246</td><td>8,048</td><td>2002</td><td>1993</td><td>1200 Suffield St.</td></tr><tr><td>Akron, OH</td><td>—</td><td>—</td><td>633</td><td>3,003</td><td>—</td><td>633</td><td>3,003</td><td>37</td><td>2018</td><td>1999</td><td>171 North Cleveland Massillon Road</td></tr><tr><td>Albertville, AL</td><td>—</td><td>—</td><td>170</td><td>6,203</td><td>353</td><td>176</td><td>6,550</td><td>1,796</td><td>2010</td><td>1999</td><td>151 Woodham Dr.</td></tr><tr><td>Alexandria, VA</td><td>—</td><td>—</td><td>2,452</td><td>6,829</td><td>—</td><td>2,452</td><td>6,829</td><td>81</td><td>2018</td><td>1964</td><td>1510 Collingwood Road</td></tr><tr><td>Allen Park, MI</td><td>—</td><td>—</td><td>1,767</td><td>5,027</td><td>—</td><td>1,767</td><td>5,027</td><td>60</td><td>2018</td><td>1960</td><td>9150 Allen Road</td></tr><tr><td>Allentown, PA</td><td>—</td><td>—</td><td>494</td><td>11,849</td><td>—</td><td>494</td><td>11,849</td><td>138</td><td>2018</td><td>1995</td><td>5151 Hamilton Boulevard</td></tr><tr><td>Allentown, PA</td><td>—</td><td>—</td><td>1,491</td><td>4,823</td><td>—</td><td>1,491</td><td>4,823</td><td>59</td><td>2018</td><td>1988</td><td>1265 Cedar Crest Boulevard</td></tr><tr><td>Ames, IA</td><td>—</td><td>—</td><td>330</td><td>8,870</td><td>—</td><td>330</td><td>8,870</td><td>2,075</td><td>2010</td><td>1999</td><td>1325 Coconino Rd.</td></tr><tr><td>Ankeny, IA</td><td>—</td><td>—</td><td>1,129</td><td>10,270</td><td>—</td><td>1,129</td><td>10,270</td><td>813</td><td>2016</td><td>2012</td><td>1275 SW State Street</td></tr><tr><td>Ann Arbor, MI</td><td>—</td><td>—</td><td>2,172</td><td>11,127</td><td>—</td><td>2,172</td><td>11,127</td><td>140</td><td>2018</td><td>1997</td><td>4701 East Huron River Drive</td></tr><tr><td>Annandale, VA</td><td>—</td><td>—</td><td>1,687</td><td>18,980</td><td>—</td><td>1,687</td><td>18,980</td><td>216</td><td>2018</td><td>2002</td><td>7104 Braddock Road</td></tr><tr><td>Arlington, TX</td><td>—</td><td>—</td><td>1,660</td><td>37,395</td><td>1,825</td><td>1,660</td><td>39,220</td><td>9,668</td><td>2012</td><td>2000</td><td>1250 West Pioneer Parkway</td></tr><tr><td>Arlington, VA</td><td>—</td><td>—</td><td>4,016</td><td>8,805</td><td>—</td><td>4,016</td><td>8,805</td><td>102</td><td>2018</td><td>1976</td><td>550 South Carlin Southprints Road</td></tr><tr><td>Asheboro, NC</td><td>—</td><td>—</td><td>290</td><td>5,032</td><td>165</td><td>290</td><td>5,197</td><td>2,142</td><td>2003</td><td>1998</td><td>514 Vision Dr.</td></tr><tr><td>Asheville, NC</td><td>—</td><td>—</td><td>204</td><td>3,489</td><td>—</td><td>204</td><td>3,489</td><td>1,858</td><td>1999</td><td>1999</td><td>4 Walden Ridge Dr.</td></tr><tr><td>Asheville, NC</td><td>—</td><td>—</td><td>280</td><td>1,955</td><td>351</td><td>280</td><td>2,306</td><td>1,034</td><td>2003</td><td>1992</td><td>308 Overlook Rd.</td></tr><tr><td>Atchison, KS</td><td>—</td><td>—</td><td>140</td><td>5,610</td><td>23</td><td>140</td><td>5,633</td><td>475</td><td>2015</td><td>2001</td><td>1301 N 4th St.</td></tr><tr><td>Atlanta, GA</td><td>—</td><td>—</td><td>2,058</td><td>14,914</td><td>1,214</td><td>2,080</td><td>16,106</td><td>11,826</td><td>1997</td><td>1999</td><td>1460 S Johnson Ferry Rd.</td></tr><tr><td>Aurora, OH</td><td>—</td><td>—</td><td>1,760</td><td>14,148</td><td>106</td><td>1,760</td><td>14,254</td><td>3,369</td><td>2011</td><td>2002</td><td>505 S. Chillicothe Rd</td></tr><tr><td>Aurora, CO</td><td>—</td><td>—</td><td>2,440</td><td>28,172</td><td>—</td><td>2,440</td><td>28,172</td><td>11,394</td><td>2006</td><td>2007</td><td>14211 E. Evans Ave.</td></tr><tr><td>Austin, TX</td><td>—</td><td>—</td><td>880</td><td>9,520</td><td>1,299</td><td>885</td><td>10,814</td><td>5,784</td><td>1999</td><td>1998</td><td>12429 Scofield Farms Dr.</td></tr><tr><td>Austin, TX</td><td>—</td><td>—</td><td>1,691</td><td>5,006</td><td>—</td><td>1,691</td><td>5,006</td><td>78</td><td>2018</td><td>2000</td><td>11630 Four Iron Drive</td></tr><tr><td>Avon, IN</td><td>—</td><td>—</td><td>1,830</td><td>14,470</td><td>—</td><td>1,830</td><td>14,470</td><td>3,534</td><td>2010</td><td>2004</td><td>182 S Country RD. 550E</td></tr><tr><td>Avon, IN</td><td>—</td><td>—</td><td>900</td><td>19,444</td><td>—</td><td>900</td><td>19,444</td><td>2,329</td><td>2014</td><td>2013</td><td>10307 E. CR 100 N</td></tr><tr><td>Avon, CT</td><td>—</td><td>—</td><td>2,132</td><td>7,627</td><td>—</td><td>2,132</td><td>7,627</td><td>109</td><td>2018</td><td>2000</td><td>100 Fisher Drive</td></tr><tr><td>Avon Lake, OH</td><td>—</td><td>—</td><td>790</td><td>10,421</td><td>5,822</td><td>790</td><td>16,243</td><td>3,136</td><td>2011</td><td>2001</td><td>345 Lear Rd.</td></tr><tr><td>Baldwin City, KS</td><td>—</td><td>—</td><td>190</td><td>4,810</td><td>55</td><td>190</td><td>4,865</td><td>420</td><td>2015</td><td>2000</td><td>321 Crimson Ave</td></tr><tr><td>Baltimore, MD</td><td>—</td><td>—</td><td>4,306</td><td>4,305</td><td>—</td><td>4,306</td><td>4,305</td><td>55</td><td>2018</td><td>1978</td><td>6600 Ridge Road</td></tr><tr><td>Baltimore, MD</td><td>—</td><td>—</td><td>3,069</td><td>3,150</td><td>—</td><td>3,069</td><td>3,150</td><td>43</td><td>2018</td><td>1996</td><td>4669 Falls Road</td></tr><tr><td>Barberton, OH</td><td>—</td><td>—</td><td>1,307</td><td>9,313</td><td>—</td><td>1,307</td><td>9,313</td><td>108</td><td>2018</td><td>1979</td><td>85 Third Street</td></tr><tr><td>Bartlesville, OK</td><td>—</td><td>—</td><td>100</td><td>1,380</td><td>—</td><td>100</td><td>1,380</td><td>828</td><td>1996</td><td>1995</td><td>5420 S.E. Adams Blvd.</td></tr><tr><td>Battle Creek, MI</td><td>—</td><td>—</td><td>857</td><td>1,822</td><td>—</td><td>857</td><td>1,822</td><td>30</td><td>2018</td><td>1965</td><td>200 Roosevelt Avenue East</td></tr><tr><td>Bay City, MI</td><td>—</td><td>—</td><td>633</td><td>2,620</td><td>—</td><td>633</td><td>2,620</td><td>35</td><td>2018</td><td>1968</td><td>800 Mulholland Street</td></tr><tr><td>Bedford, PA</td><td>—</td><td>—</td><td>637</td><td>4,434</td><td>—</td><td>637</td><td>4,434</td><td>61</td><td>2018</td><td>1965</td><td>136 Donahoe Manor Road</td></tr><tr><td>Bellingham, WA</td><td>—</td><td>—</td><td>1,500</td><td>19,861</td><td>396</td><td>1,507</td><td>20,250</td><td>5,450</td><td>2010</td><td>1996</td><td>4415 Columbine Dr.</td></tr><tr><td>Benbrook, TX</td><td>—</td><td>—</td><td>1,550</td><td>13,553</td><td>2,657</td><td>1,550</td><td>16,210</td><td>3,016</td><td>2011</td><td>1984</td><td>4242 Bryant Irvin Road</td></tr><tr><td>Bethel Park, PA</td><td>—</td><td>—</td><td>1,700</td><td>16,007</td><td>—</td><td>1,700</td><td>16,007</td><td>4,274</td><td>2007</td><td>2009</td><td>5785 Baptist Road</td></tr><tr><td>Bethel Park, PA</td><td>—</td><td>—</td><td>1,008</td><td>6,742</td><td>—</td><td>1,008</td><td>6,742</td><td>83</td><td>2018</td><td>1986</td><td>60 Highland Road</td></tr><tr><td>Bethesda, MD</td><td>—</td><td>—</td><td>2,218</td><td>6,871</td><td>—</td><td>2,218</td><td>6,871</td><td>78</td><td>2018</td><td>1974</td><td>6530 Democracy Boulevard</td></tr><tr><td>Bethlehem, PA</td><td>—</td><td>—</td><td>1,191</td><td>16,892</td><td>—</td><td>1,191</td><td>16,892</td><td>187</td><td>2018</td><td>1979</td><td>2021 Westgate Drive</td></tr><tr><td>Bethlehem, PA</td><td>—</td><td>—</td><td>1,143</td><td>13,592</td><td>—</td><td>1,143</td><td>13,592</td><td>152</td><td>2018</td><td>1982</td><td>2029 Westgate Drive</td></tr><tr><td>Beverly Hills, CA</td><td>—</td><td>—</td><td>6,000</td><td>13,385</td><td>—</td><td>6,000</td><td>13,385</td><td>1,420</td><td>2014</td><td>2000</td><td>220 N Clark Drive</td></tr><tr><td>Bexleyheath, UK</td><td>—</td><td>—</td><td>3,750</td><td>10,807</td><td>493</td><td>3,877</td><td>11,173</td><td>1,210</td><td>2014</td><td>1996</td><td>35 West Street</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="5">Gross Amount at Which Carried at Close of Period</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Year Acquired</td><td>Year Built</td></tr><tr><td>Bingham Farms, MI . . .</td><td>—</td><td>781</td><td>15,676</td><td>—</td><td>781</td><td>15,676</td><td>180</td><td>2018</td><td>1999 24005 West 13 Mile Road</td></tr><tr><td>Birmingham, UK . . . .</td><td>—</td><td>1,647</td><td>14,853</td><td>558</td><td>1,703</td><td>15,355</td><td>1,491</td><td>2015</td><td>2010 Clinton Street, Winson Green</td></tr><tr><td>Birmingham, UK . . . .</td><td>—</td><td>1,591</td><td>19,092</td><td>700</td><td>1,645</td><td>19,738</td><td>1,888</td><td>2015</td><td>2010 Braymoor Road, Tile Cross</td></tr><tr><td>Birmingham, UK . . . .</td><td>—</td><td>1,462</td><td>9,056</td><td>355</td><td>1,511</td><td>9,362</td><td>923</td><td>2015</td><td>2010 Clinton Street, Winson Green</td></tr><tr><td>Birmingham, UK . . . .</td><td>—</td><td>1,184</td><td>10,085</td><td>381</td><td>1,224</td><td>10,426</td><td>1,005</td><td>2015</td><td>1997 122 Tile Cross Road, Garretts Green</td></tr><tr><td>Bloomington, IN . . . .</td><td>—</td><td>670</td><td>17,423</td><td>—</td><td>670</td><td>17,423</td><td>1,651</td><td>2015</td><td>2015 363 S. Fieldstone Boulevard</td></tr><tr><td>Boardman, OH . . . . . .</td><td>—</td><td>1,200</td><td>12,800</td><td>—</td><td>1,200</td><td>12,800</td><td>4,308</td><td>2008</td><td>2008 8049 South Ave.</td></tr><tr><td>Boca Raton, FL . . . . .</td><td>—</td><td>2,200</td><td>4,976</td><td>—</td><td>2,200</td><td>4,976</td><td>74</td><td>2018</td><td>1994 7225 Boca Del Mar Drive</td></tr><tr><td>Boca Raton, FL . . . . .</td><td>—</td><td>2,826</td><td>4,063</td><td>—</td><td>2,826</td><td>4,063</td><td>54</td><td>2018</td><td>1984 375 Northwest 51st Street</td></tr><tr><td>Boulder, CO . . . . . . .</td><td>—</td><td>3,601</td><td>21,371</td><td>—</td><td>3,601</td><td>21,371</td><td>263</td><td>2018</td><td>1990 2800 Palo Parkway</td></tr><tr><td>Bowling Green, KY . . . .</td><td>—</td><td>3,800</td><td>26,700</td><td>149</td><td>3,800</td><td>26,849</td><td>7,094</td><td>2008</td><td>1992 1300 Campbell Lane</td></tr><tr><td>Boynton Beach, FL . . .</td><td>—</td><td>2,138</td><td>10,204</td><td>—</td><td>2,138</td><td>10,204</td><td>128</td><td>2018</td><td>1991 3600 Old Boynton Road</td></tr><tr><td>Boynton Beach, FL . . .</td><td>—</td><td>2,804</td><td>14,226</td><td>—</td><td>2,804</td><td>14,226</td><td>163</td><td>2018</td><td>1984 3001 South Congress Avenue</td></tr><tr><td>Bracknell, UK . . . . . .</td><td>—</td><td>4,081</td><td>11,470</td><td>—</td><td>4,081</td><td>11,470</td><td>405</td><td>2014</td><td>2017 Bagshot Road</td></tr><tr><td>Bradenton, FL . . . . . .</td><td>—</td><td>252</td><td>3,298</td><td>—</td><td>252</td><td>3,298</td><td>1,991</td><td>1996</td><td>1995 6101 Pointe W. Blyd.</td></tr><tr><td>Bradenton, FL . . . . . .</td><td>—</td><td>480</td><td>9,953</td><td>—</td><td>480</td><td>9,953</td><td>1,714</td><td>2012</td><td>2000 2800 60th Avenue West</td></tr><tr><td>Braintree, MA . . . . . .</td><td>—</td><td>170</td><td>7,157</td><td>1,290</td><td>170</td><td>8,447</td><td>8,433</td><td>1997</td><td>1968 1102 Washington St.</td></tr><tr><td>Braintree, UK . . . . . . .</td><td>—</td><td>—</td><td>13,296</td><td>450</td><td>—</td><td>13,746</td><td>1,570</td><td>2014</td><td>2009 Meadow Park Tortoiseshell Way</td></tr><tr><td>Brandon, MS . . . . . . .</td><td>—</td><td>1,220</td><td>10,241</td><td>8</td><td>1,220</td><td>10,249</td><td>2,291</td><td>2010</td><td>1999 140 Castlewoods Blvd</td></tr><tr><td>Brecksville, OH . . . . . .</td><td>—</td><td>990</td><td>19,353</td><td>—</td><td>990</td><td>19,353</td><td>2,309</td><td>2014</td><td>2011 8757 Brecksville Road</td></tr><tr><td>Brentwood, UK . . . . . .</td><td>36,589</td><td>8,537</td><td>45,869</td><td>1,998</td><td>8,826</td><td>47,578</td><td>2,534</td><td>2016</td><td>2013 London Road</td></tr><tr><td>Brick, NJ . . . . . . . . .</td><td>—</td><td>1,290</td><td>25,247</td><td>996</td><td>1,290</td><td>26,243</td><td>5,086</td><td>2011</td><td>2000 458 Jack Martin Blvd.</td></tr><tr><td>Bridgewater, NJ . . . . . .</td><td>—</td><td>1,800</td><td>31,810</td><td>1,397</td><td>1,800</td><td>33,207</td><td>6,365</td><td>2011</td><td>2001 680 US-202/206 North</td></tr><tr><td>Brookfield, WI . . . . . . .</td><td>—</td><td>1,300</td><td>12,830</td><td>—</td><td>1,300</td><td>12,830</td><td>1,779</td><td>2012</td><td>2013 1105 Davidson Road</td></tr><tr><td>Brooks, AB . . . . . . . .</td><td>1,757</td><td>376</td><td>4,951</td><td>80</td><td>381</td><td>5,026</td><td>586</td><td>2014</td><td>2000 951 Cassils Road West</td></tr><tr><td>Bucyrus, OH . . . . . . . .</td><td>—</td><td>1,119</td><td>2,612</td><td>—</td><td>1,119</td><td>2,612</td><td>37</td><td>2018</td><td>1976 1170 West Mansfield Street</td></tr><tr><td>Burleson, TX . . . . . . .</td><td>—</td><td>670</td><td>13,985</td><td>2,105</td><td>670</td><td>16,090</td><td>3,142</td><td>2011</td><td>1988 300 Huguley Boulevard</td></tr><tr><td>Burlington, NC . . . . . . .</td><td>—</td><td>280</td><td>4,297</td><td>707</td><td>280</td><td>5,004</td><td>2,037</td><td>2003</td><td>2000 3619 S. Mebane St.</td></tr><tr><td>Burlington, NC . . . . . . .</td><td>—</td><td>460</td><td>5,467</td><td>—</td><td>460</td><td>5,467</td><td>2,271</td><td>2003</td><td>1997 3615 S. Mebane St.</td></tr><tr><td>Burlington, NJ . . . . . . .</td><td>—</td><td>1,700</td><td>12,554</td><td>501</td><td>1,700</td><td>13,055</td><td>3,231</td><td>2011</td><td>1965 115 Sunset Road</td></tr><tr><td>Burlington, NJ . . . . . . .</td><td>—</td><td>1,170</td><td>19,205</td><td>172</td><td>1,170</td><td>19,377</td><td>4,109</td><td>2011</td><td>1994 2305 Rancocas Road</td></tr><tr><td>Burnaby, BC . . . . . . . .</td><td>7,326</td><td>7,623</td><td>13,844</td><td>320</td><td>7,736</td><td>14,051</td><td>1,664</td><td>2014</td><td>2006 7195 Canada Way</td></tr><tr><td>Calgary, AB . . . . . . . .</td><td>14,921</td><td>2,341</td><td>42,768</td><td>726</td><td>2,376</td><td>43,459</td><td>4,882</td><td>2014</td><td>1971 1729-90th Avenue SW</td></tr><tr><td>Calgary, AB . . . . . . . .</td><td>24,745</td><td>4,569</td><td>70,199</td><td>1,109</td><td>4,636</td><td>71,241</td><td>7,933</td><td>2014</td><td>2001 500 Midpark Way SE</td></tr><tr><td>Camberley, UK . . . . . . . .</td><td>—</td><td>9,974</td><td>39,168</td><td>—</td><td>9,974</td><td>39,168</td><td>1,574</td><td>2016</td><td>2017 Pembroke Broadway</td></tr><tr><td>Camp Hill, PA . . . . . . . .</td><td>—</td><td>517</td><td>3,597</td><td>—</td><td>517</td><td>3,597</td><td>43</td><td>2018</td><td>1970 1700 Market Street</td></tr><tr><td>Canonsburg, PA . . . . . . . .</td><td>—</td><td>911</td><td>4,830</td><td>—</td><td>911</td><td>4,830</td><td>63</td><td>2018</td><td>1986 113 West McMurray Road</td></tr><tr><td>Canton, OH . . . . . . . . .</td><td>—</td><td>300</td><td>2,098</td><td>—</td><td>300</td><td>2,098</td><td>1,115</td><td>1998</td><td>1998 1119 Perry Dr., N.W.</td></tr><tr><td>Canton, MI . . . . . . . . .</td><td>—</td><td>1,399</td><td>16,971</td><td>—</td><td>1,399</td><td>16,971</td><td>195</td><td>2018</td><td>2005 7025 Lilley Road</td></tr><tr><td>Cape Coral, FL . . . . . . . .</td><td>—</td><td>530</td><td>3,281</td><td>—</td><td>530</td><td>3,281</td><td>1,473</td><td>2002</td><td>2000 911 Santa Barbara Blvd.</td></tr><tr><td>Cape Coral, FL . . . . . . . .</td><td>8,337</td><td>760</td><td>18,868</td><td>—</td><td>760</td><td>18,868</td><td>3,282</td><td>2012</td><td>2009 831 Santa Barbara Boulevard</td></tr><tr><td>Cape May Court House, NJ . . . . . . . . . .</td><td>—</td><td>1,440</td><td>17,002</td><td>1,775</td><td>1,440</td><td>18,777</td><td>2,265</td><td>2014</td><td>1990 144 Magnolia Drive</td></tr><tr><td>Carlisle, PA . . . . . . . . .</td><td>—</td><td>978</td><td>8,207</td><td>—</td><td>978</td><td>8,207</td><td>100</td><td>2018</td><td>1987 940 Walnut Bottom Road</td></tr><tr><td>Carmel, IN . . . . . . . . .</td><td>—</td><td>1,700</td><td>19,491</td><td>1</td><td>1,700</td><td>19,492</td><td>1,971</td><td>2015</td><td>2015 12315 Pennsylvania Street</td></tr><tr><td>Carmel, IN . . . . . . . . .</td><td>—</td><td>1,583</td><td>6,071</td><td>—</td><td>1,583</td><td>6,071</td><td>80</td><td>2018</td><td>1985 12999 North Pennsylvania Street</td></tr><tr><td>Carmel, IN . . . . . . . . .</td><td>—</td><td>—</td><td>2,296</td><td>—</td><td>—</td><td>2,296</td><td>25</td><td>2018</td><td>1985 12999 North Pennsylvania Street</td></tr><tr><td>Carrollton, TX . . . . . . . . .</td><td>—</td><td>2,010</td><td>19,549</td><td>—</td><td>2,010</td><td>19,549</td><td>1,194</td><td>2014</td><td>2016 2645 East Trinity Mills Road</td></tr><tr><td>Cary, NC . . . . . . . . . .</td><td>—</td><td>1,500</td><td>4,350</td><td>986</td><td>1,500</td><td>5,336</td><td>2,698</td><td>1998</td><td>1996 111 MacArthur</td></tr><tr><td>Castleton, IN . . . . . . . . .</td><td>—</td><td>920</td><td>15,137</td><td>—</td><td>920</td><td>15,137</td><td>1,885</td><td>2014</td><td>2013 8405 Clearvista Lake</td></tr><tr><td>Cedar Grove, NJ . . . . . . . .</td><td>—</td><td>2,850</td><td>27,737</td><td>20</td><td>2,850</td><td>27,757</td><td>5,981</td><td>2011</td><td>1970 536 Ridge Road</td></tr><tr><td>Cedar Rapids, IA . . . . . . . .</td><td>—</td><td>596</td><td>9,354</td><td>—</td><td>596</td><td>9,354</td><td>105</td><td>2018</td><td>1965 1940 1st Avenue Northeast</td></tr><tr><td>Centerville, OH . . . . . . . . .</td><td>—</td><td>920</td><td>3,960</td><td>—</td><td>920</td><td>3,960</td><td>69</td><td>2018</td><td>1997 1001 E. Alex Bell Road</td></tr><tr><td>Centreville, MD . . . . . . . . .</td><td>—</td><td>600</td><td>14,602</td><td>241</td><td>600</td><td>14,843</td><td>3,242</td><td>2011</td><td>1978 205 Armstrong Avenue</td></tr><tr><td>Chagrin Falls, OH . . . . . . . . .</td><td>—</td><td>832</td><td>10,841</td><td>—</td><td>832</td><td>10,841</td><td>130</td><td>2018</td><td>1999 8100 East Washington Street</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td colspan="2">Cost Capitalized</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Subsequent to Acquisition</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td><td></td></tr><tr><td>Chambersburg, PA . . .</td><td>—</td><td>1,373</td><td>8,864</td><td>—</td><td>1,373</td><td>8,864</td><td>112</td><td>2018</td><td>1976</td><td>1070 Stouffer Avenue</td><td></td><td></td></tr><tr><td>Chapel Hill, NC . . . . .</td><td>—</td><td>354</td><td>2,646</td><td>783</td><td>354</td><td>3,429</td><td>1,508</td><td>2002</td><td>1997</td><td>100 Lanark Rd.</td><td></td><td></td></tr><tr><td>Charleston, SC . . . . . .</td><td>—</td><td>1,333</td><td>5,556</td><td>—</td><td>1,333</td><td>5,556</td><td>67</td><td>2018</td><td>1982</td><td>1137 Sam Rittenberg Boulevard</td><td></td><td></td></tr><tr><td>Charleston, WV . . . . . .</td><td>—</td><td>440</td><td>17,575</td><td>306</td><td>440</td><td>17,881</td><td>3,680</td><td>2011</td><td>1998</td><td>1000 Association Drive, North Gate Business Park</td><td></td><td></td></tr><tr><td>Chatham, VA . . . . . . .</td><td>—</td><td>320</td><td>14,039</td><td>—</td><td>320</td><td>14,039</td><td>1,814</td><td>2014</td><td>2009</td><td>100 Rorer Street</td><td></td><td></td></tr><tr><td>Cherry Hill, NJ . . . . . .</td><td>—</td><td>1,416</td><td>9,874</td><td>—</td><td>1,416</td><td>9,874</td><td>123</td><td>2018</td><td>1997</td><td>2700 Chapel Avenue West</td><td></td><td></td></tr><tr><td>Chester, VA . . . . . . .</td><td>—</td><td>1,320</td><td>18,127</td><td>—</td><td>1,320</td><td>18,127</td><td>2,292</td><td>2014</td><td>2009</td><td>12001 Iron Bridge Road</td><td></td><td></td></tr><tr><td>Chevy Chase, MD . . . . . .</td><td>—</td><td>4,515</td><td>8,688</td><td>—</td><td>4,515</td><td>8,688</td><td>102</td><td>2018</td><td>1964</td><td>8700 Jones Mill Road</td><td></td><td></td></tr><tr><td>Chickasha, OK . . . . . . .</td><td>—</td><td>85</td><td>1,395</td><td>—</td><td>85</td><td>1,395</td><td>831</td><td>1996</td><td>1996</td><td>801 Country Club Rd.</td><td></td><td></td></tr><tr><td>Chillicothe, OH . . . . . .</td><td>—</td><td>1,145</td><td>8,997</td><td>—</td><td>1,145</td><td>8,997</td><td>105</td><td>2018</td><td>1977</td><td>1058 Columbus Street</td><td></td><td></td></tr><tr><td>Cincinnati, OH . . . . . . .</td><td>—</td><td>912</td><td>14,014</td><td>—</td><td>912</td><td>14,014</td><td>166</td><td>2018</td><td>2000</td><td>6870 Clough Pike</td><td></td><td></td></tr><tr><td>Citrus Heights, CA . . . . . .</td><td>—</td><td>5,207</td><td>31,725</td><td>—</td><td>5,207</td><td>31,725</td><td>354</td><td>2018</td><td>1988</td><td>7807 Upland Way</td><td></td><td></td></tr><tr><td>Claremore, OK . . . . . . .</td><td>—</td><td>155</td><td>1,427</td><td>6,130</td><td>155</td><td>7,557</td><td>1,597</td><td>1996</td><td>1996</td><td>1605 N. Hwy. 88</td><td></td><td></td></tr><tr><td>Clarksville, TN . . . . . . .</td><td>—</td><td>330</td><td>2,292</td><td>—</td><td>330</td><td>2,292</td><td>1,213</td><td>1998</td><td>1998</td><td>2183 Memorial Dr.</td><td></td><td></td></tr><tr><td>Clayton, NC . . . . . . . .</td><td>—</td><td>520</td><td>15,733</td><td>—</td><td>520</td><td>15,733</td><td>1,771</td><td>2014</td><td>2013</td><td>84 Johnson Estate Road</td><td></td><td></td></tr><tr><td>Cleburne, TX . . . . . . .</td><td>—</td><td>520</td><td>5,369</td><td>—</td><td>520</td><td>5,369</td><td>1,669</td><td>2006</td><td>2007</td><td>402 S Colonial Drive</td><td></td><td></td></tr><tr><td>Clevedon, UK . . . . . . .</td><td>—</td><td>2,838</td><td>16,927</td><td>667</td><td>2,933</td><td>17,499</td><td>1,998</td><td>2014</td><td>1994</td><td>18/19 Elton Road</td><td></td><td></td></tr><tr><td>Cobham, UK . . . . . . .</td><td>—</td><td>9,808</td><td>24,991</td><td>1,176</td><td>10,139</td><td>25,836</td><td>3,657</td><td>2013</td><td>2013</td><td>Redhill Road</td><td></td><td></td></tr><tr><td>Colchester, CT . . . . . . .</td><td>—</td><td>980</td><td>4,860</td><td>544</td><td>980</td><td>5,404</td><td>1,444</td><td>2011</td><td>1986</td><td>59 Harrington Court</td><td></td><td></td></tr><tr><td>Colorado Springs, CO . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>4,280</td><td>62,168</td><td>—</td><td>4,280</td><td>62,168</td><td>5,328</td><td>2015</td><td>2008</td><td>1605 Elm Creek View</td><td></td><td></td></tr><tr><td>Colorado Springs, CO . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,730</td><td>25,493</td><td>693</td><td>1,730</td><td>26,186</td><td>1,972</td><td>2016</td><td>2016</td><td>2818 Grand Vista Circle</td><td></td><td></td></tr><tr><td>Columbia, TN . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>341</td><td>2,295</td><td>—</td><td>341</td><td>2,295</td><td>1,218</td><td>1999</td><td>1999</td><td>5011 Trotwood Ave.</td><td></td><td></td></tr><tr><td>Columbia, SC . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,699</td><td>2,320</td><td>—</td><td>1,699</td><td>2,320</td><td>30</td><td>2018</td><td>1968</td><td>2601 Forest Drive</td><td></td><td></td></tr><tr><td>Columbia Heights, MN . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>825</td><td>14,175</td><td>163</td><td>825</td><td>14,338</td><td>2,738</td><td>2011</td><td>2009</td><td>3807 Hart Boulevard</td><td></td><td></td></tr><tr><td>Columbus, IN . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>610</td><td>3,190</td><td>—</td><td>610</td><td>3,190</td><td>764</td><td>2010</td><td>1998</td><td>2564 Foxpinte Dr.</td><td></td><td></td></tr><tr><td>Concord, NC . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>550</td><td>3,921</td><td>55</td><td>550</td><td>3,976</td><td>1,782</td><td>2003</td><td>1997</td><td>2452 Rock Hill Church Rd.</td><td></td><td></td></tr><tr><td>Concord, NH . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,760</td><td>43,179</td><td>634</td><td>1,760</td><td>43,813</td><td>9,027</td><td>2011</td><td>1994</td><td>239 Pleasant Street</td><td></td><td></td></tr><tr><td>Congleton, UK . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>2,036</td><td>5,120</td><td>241</td><td>2,104</td><td>5,293</td><td>575</td><td>2014</td><td>1994</td><td>Road Hill</td><td></td><td></td></tr><tr><td>Conroe, TX . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>980</td><td>7,771</td><td>—</td><td>980</td><td>7,771</td><td>1,965</td><td>2009</td><td>2010</td><td>903 Longmire Road</td><td></td><td></td></tr><tr><td>Coppell, TX . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,550</td><td>8,386</td><td>100</td><td>1,550</td><td>8,486</td><td>1,347</td><td>2012</td><td>2013</td><td>1530 East Sandy Lake Road</td><td></td><td></td></tr><tr><td>Corby, UK . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,228</td><td>5,144</td><td>398</td><td>1,157</td><td>5,613</td><td>248</td><td>2017</td><td>1997</td><td>25 Rockingham Road</td><td></td><td></td></tr><tr><td>Coventry, UK . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,962</td><td>13,830</td><td>533</td><td>2,028</td><td>14,297</td><td>1,430</td><td>2015</td><td>2014</td><td>Banner Lane, Tile Hill</td><td></td><td></td></tr><tr><td>Crawfordsville, IN . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>720</td><td>17,239</td><td>1,426</td><td>720</td><td>18,665</td><td>2,245</td><td>2014</td><td>2013</td><td>517 Concord Road</td><td></td><td></td></tr><tr><td>Dallasstown, PA . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,377</td><td>16,802</td><td>—</td><td>1,377</td><td>16,802</td><td>200</td><td>2018</td><td>1979</td><td>100 West Queen Street</td><td></td><td></td></tr><tr><td>Danville, VA . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>410</td><td>3,954</td><td>722</td><td>410</td><td>4,676</td><td>1,963</td><td>2003</td><td>1998</td><td>149 Executive Ct.</td><td></td><td></td></tr><tr><td>Danville, VA . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>240</td><td>8,436</td><td>—</td><td>240</td><td>8,436</td><td>1,087</td><td>2014</td><td>1996</td><td>508 Rison Street</td><td></td><td></td></tr><tr><td>Daphne, AL . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>2,880</td><td>8,670</td><td>384</td><td>2,880</td><td>9,054</td><td>1,625</td><td>2012</td><td>2001</td><td>27440 County Road 13</td><td></td><td></td></tr><tr><td>Davenport, IA . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>566</td><td>2,017</td><td>—</td><td>566</td><td>2,017</td><td>25</td><td>2018</td><td>1966</td><td>815 East Locust Street</td><td></td><td></td></tr><tr><td>Davenport, IA . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>910</td><td>20,043</td><td>—</td><td>910</td><td>20,043</td><td>231</td><td>2018</td><td>2008</td><td>3800 Commerce Blvd.</td><td></td><td></td></tr><tr><td>Dayton, OH . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,188</td><td>5,414</td><td>—</td><td>1,188</td><td>5,414</td><td>69</td><td>2018</td><td>1977</td><td>1974 North Fairfield Road</td><td></td><td></td></tr><tr><td>Dearborn Heights, MI . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,197</td><td>3,396</td><td>—</td><td>1,197</td><td>3,396</td><td>47</td><td>2018</td><td>1964</td><td>26001 Ford Road</td><td></td><td></td></tr><tr><td>Decatur, GA . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,413</td><td>13,800</td><td>—</td><td>1,413</td><td>13,800</td><td>152</td><td>2018</td><td>1977</td><td>2722 North Decatur Road</td><td></td><td></td></tr><tr><td>Delray Beach, FL . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,158</td><td>13,576</td><td>—</td><td>1,158</td><td>13,576</td><td>162</td><td>2018</td><td>1998</td><td>16150 Jog Road</td><td></td><td></td></tr><tr><td>Delray Beach, FL . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>2,125</td><td>11,844</td><td>—</td><td>2,125</td><td>11,844</td><td>146</td><td>2018</td><td>1998</td><td>16200 Jog Road</td><td></td><td></td></tr><tr><td>Denton, TX . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,760</td><td>8,305</td><td>100</td><td>1,760</td><td>8,405</td><td>1,799</td><td>2010</td><td>2011</td><td>2125 Brinker Rd</td><td></td><td></td></tr><tr><td>Denver, CO . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,450</td><td>19,389</td><td>3,133</td><td>1,450</td><td>22,522</td><td>4,292</td><td>2012</td><td>1997</td><td>4901 South Monaco Street</td><td></td><td></td></tr><tr><td>Denver, CO . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>3,222</td><td>24,811</td><td>—</td><td>3,222</td><td>24,811</td><td>275</td><td>2018</td><td>1988</td><td>290 South Monaco Parkway</td><td></td><td></td></tr><tr><td>Derby, UK . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>2,359</td><td>8,539</td><td>—</td><td>2,359</td><td>8,539</td><td>712</td><td>2014</td><td>2015</td><td>Rykneld Road</td><td></td><td></td></tr><tr><td>Dover, DE . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>600</td><td>22,266</td><td>141</td><td>600</td><td>22,407</td><td>4,718</td><td>2011</td><td>1984</td><td>1080 Silver Lake Blvd.</td><td></td><td></td></tr><tr><td>Dublin, OH . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,393</td><td>2,912</td><td>—</td><td>1,393</td><td>2,912</td><td>42</td><td>2018</td><td>2014</td><td>4075 W. Dublin-Granville Road</td><td></td><td></td></tr><tr><td>Dubuque, IA . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>568</td><td>8,904</td><td>—</td><td>568</td><td>8,904</td><td>100</td><td>2018</td><td>1971</td><td>901 West Third Street</td><td></td><td></td></tr><tr><td>Dundalk, MD . . . . . . . . . . . . . . . . . . . .</td><td>—</td><td>1,770</td><td>32,047</td><td>784</td><td>1,770</td><td>32,831</td><td>6,877</td><td>2011</td><td>1978</td><td>7232 German Hill Road</td><td></td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="5">Gross Amount at Which Carried at Close of Period</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Year Acquired</td><td>Year Built</td></tr><tr><td>Dunedin, FL</td><td>—</td><td>1,883</td><td>13,329</td><td>—</td><td>1,883</td><td>13,329</td><td>151</td><td>2018</td><td>1983 870 Patricia Avenue</td></tr><tr><td>Durham, NC</td><td>—</td><td>1,476</td><td>10,659</td><td>2,196</td><td>1,476</td><td>12,855</td><td>11,898</td><td>1997</td><td>1999 4434 Ben Franklin Blvd.</td></tr><tr><td>Eagan, MN</td><td>16,470</td><td>2,260</td><td>31,643</td><td>300</td><td>2,260</td><td>31,943</td><td>2,737</td><td>2015</td><td>2004 3810 Alder Avenue</td></tr><tr><td>East Brunswick, NJ</td><td>—</td><td>1,380</td><td>34,229</td><td>849</td><td>1,380</td><td>35,078</td><td>6,708</td><td>2011</td><td>1998 606 Cranbury Rd.</td></tr><tr><td>Eastbourne, UK</td><td>—</td><td>4,071</td><td>24,438</td><td>964</td><td>4,209</td><td>25,264</td><td>2,847</td><td>2014</td><td>1999 Carew Road</td></tr><tr><td>Easton, PA</td><td>—</td><td>1,109</td><td>7,502</td><td>—</td><td>1,109</td><td>7,502</td><td>116</td><td>2018</td><td>2015 4100 Freemansburg Avenue</td></tr><tr><td>Easton, PA</td><td>—</td><td>1,430</td><td>13,400</td><td>—</td><td>1,430</td><td>13,400</td><td>160</td><td>2018</td><td>1981 2600 Northampton Street</td></tr><tr><td>Easton, PA</td><td>—</td><td>1,620</td><td>10,052</td><td>—</td><td>1,620</td><td>10,052</td><td>142</td><td>2018</td><td>2000 4100 Freemansburg Avenue</td></tr><tr><td>Eden, NC</td><td>—</td><td>390</td><td>4,877</td><td>—</td><td>390</td><td>4,877</td><td>2,046</td><td>2003</td><td>1998 314 W. Kings Hwy.</td></tr><tr><td>Edmond, OK</td><td>—</td><td>410</td><td>8,388</td><td>—</td><td>410</td><td>8,388</td><td>1,543</td><td>2012</td><td>2001 15401 North Pennsylvania Avenue</td></tr><tr><td>Edmond, OK</td><td>—</td><td>1,810</td><td>14,849</td><td>2,630</td><td>1,810</td><td>17,479</td><td>2,118</td><td>2014</td><td>1985 1225 Lakeshore Drive</td></tr><tr><td>Edmond, OK</td><td>—</td><td>1,650</td><td>25,167</td><td>—</td><td>1,650</td><td>25,167</td><td>1,300</td><td>2014</td><td>2017 2709 East Danforth Road</td></tr><tr><td>Elizabeth City, NC</td><td>—</td><td>200</td><td>2,760</td><td>2,011</td><td>200</td><td>4,771</td><td>2,264</td><td>1998</td><td>1999 400 Hastings Lane</td></tr><tr><td>Elk Grove Village, IL</td><td>—</td><td>1,344</td><td>7,076</td><td>—</td><td>1,344</td><td>7,076</td><td>88</td><td>2018</td><td>1995 1940 Nerge Road Elk</td></tr><tr><td>Elk Grove Village, IL</td><td>—</td><td>3,733</td><td>18,751</td><td>—</td><td>3,733</td><td>18,751</td><td>207</td><td>2018</td><td>1988 1920 Nerge Road</td></tr><tr><td>Emeryville, CA</td><td>—</td><td>2,560</td><td>57,491</td><td>641</td><td>2,560</td><td>58,132</td><td>6,734</td><td>2014</td><td>2010 1440 40th Street</td></tr><tr><td>Englewood, NJ</td><td>—</td><td>930</td><td>4,514</td><td>26</td><td>930</td><td>4,540</td><td>1,075</td><td>2011</td><td>1966 333 Grand Avenue</td></tr><tr><td>Epsom, UK</td><td>36,932</td><td>20,159</td><td>34,803</td><td>2,053</td><td>20,840</td><td>36,175</td><td>1,933</td><td>2016</td><td>2014 450-458 Reigate Road</td></tr><tr><td>Eureka, KS</td><td>—</td><td>50</td><td>3,950</td><td>71</td><td>50</td><td>4,021</td><td>339</td><td>2015</td><td>1994 1820 E River St</td></tr><tr><td>Everett, WA</td><td>—</td><td>1,400</td><td>5,476</td><td>—</td><td>1,400</td><td>5,476</td><td>2,819</td><td>1999</td><td>1999 2015 Lake Heights Dr.</td></tr><tr><td>Exton, PA</td><td>—</td><td>3,600</td><td>27,267</td><td>—</td><td>3,600</td><td>27,267</td><td>299</td><td>2017</td><td>2018 501 Thomas Jones Way</td></tr><tr><td>Fairfax, VA</td><td>—</td><td>1,827</td><td>17,309</td><td>—</td><td>1,827</td><td>17,309</td><td>208</td><td>2018</td><td>1997 12469 Lee Jackson Mem Highway</td></tr><tr><td>Fairfax, VA</td><td>—</td><td>4,099</td><td>17,620</td><td>—</td><td>4,099</td><td>17,620</td><td>208</td><td>2018</td><td>1990 12475 Lee Jackson Memorial Highway</td></tr><tr><td>Fairhope, AL</td><td>—</td><td>570</td><td>9,119</td><td>112</td><td>570</td><td>9,231</td><td>1,656</td><td>2012</td><td>1987 50 Spring Run Road</td></tr><tr><td>Fall River, MA</td><td>—</td><td>620</td><td>5,829</td><td>4,856</td><td>620</td><td>10,685</td><td>5,463</td><td>1996</td><td>1973 1748 Highland Ave.</td></tr><tr><td>Fanwood, NJ</td><td>—</td><td>2,850</td><td>55,175</td><td>1,123</td><td>2,850</td><td>56,298</td><td>10,633</td><td>2011</td><td>1982 295 South Ave.</td></tr><tr><td>Faribault, MN</td><td>—</td><td>780</td><td>11,539</td><td>300</td><td>780</td><td>11,839</td><td>964</td><td>2015</td><td>2003 828 1st Street NE</td></tr><tr><td>Farmington, CT</td><td>—</td><td>1,693</td><td>10,459</td><td>—</td><td>1,693</td><td>10,459</td><td>128</td><td>2018</td><td>1997 45 South Road</td></tr><tr><td>Farnborough, UK</td><td>—</td><td>2,036</td><td>5,737</td><td>262</td><td>2,104</td><td>5,931</td><td>626</td><td>2014</td><td>1980 Bruntile Close, Reading Road</td></tr><tr><td>Fayetteville, PA</td><td>—</td><td>2,150</td><td>32,951</td><td>2,013</td><td>2,150</td><td>34,964</td><td>3,114</td><td>2015</td><td>1991 6375 Chambersburg Road</td></tr><tr><td>Fayetteville, NY</td><td>—</td><td>410</td><td>3,962</td><td>500</td><td>410</td><td>4,462</td><td>1,973</td><td>2001</td><td>1997 5125 Highbridge St.</td></tr><tr><td>Findlay, OH</td><td>—</td><td>200</td><td>1,800</td><td>—</td><td>200</td><td>1,800</td><td>1,019</td><td>1997</td><td>1997 725 Fox Run Rd.</td></tr><tr><td>Fishers, IN</td><td>—</td><td>1,500</td><td>14,500</td><td>—</td><td>1,500</td><td>14,500</td><td>3,540</td><td>2010</td><td>2000 9745 Olympia Dr.</td></tr><tr><td>Fishersville, VA</td><td>—</td><td>788</td><td>2,101</td><td>—</td><td>788</td><td>2,101</td><td>437</td><td>2018</td><td>1998 83 Cross Rd Ln</td></tr><tr><td>Flint, MI</td><td>—</td><td>1,271</td><td>18,056</td><td>—</td><td>1,271</td><td>18,056</td><td>202</td><td>2018</td><td>1969 3011 North Center Road</td></tr><tr><td>Florence, NJ</td><td>—</td><td>300</td><td>2,978</td><td>—</td><td>300</td><td>2,978</td><td>1,332</td><td>2002</td><td>1999 901 Broad St.</td></tr><tr><td>Florence, AL</td><td>—</td><td>353</td><td>13,049</td><td>223</td><td>385</td><td>13,240</td><td>3,575</td><td>2010</td><td>1999 3275 County Road 47</td></tr><tr><td>Flourtown, PA</td><td>—</td><td>1,800</td><td>14,830</td><td>266</td><td>1,800</td><td>15,096</td><td>3,297</td><td>2011</td><td>1908 350 Haws Lane</td></tr><tr><td>Flower Mound, TX</td><td>—</td><td>1,800</td><td>8,414</td><td>100</td><td>1,800</td><td>8,514</td><td>1,539</td><td>2011</td><td>2012 4141 Long Prairie Road</td></tr><tr><td>Floyd, VA</td><td>—</td><td>680</td><td>3,618</td><td>—</td><td>680</td><td>3,618</td><td>247</td><td>2018</td><td>1979 237 Franklin Pike Rd SE</td></tr><tr><td>Flushing, MI</td><td>—</td><td>690</td><td>1,702</td><td>—</td><td>690</td><td>1,702</td><td>32</td><td>2018</td><td>1999 640 Sunnyside Drive</td></tr><tr><td>Flushing, MI</td><td>—</td><td>1,415</td><td>8,536</td><td>—</td><td>1,415</td><td>8,536</td><td>105</td><td>2018</td><td>1967 540 Sunnyside Drive</td></tr><tr><td>Folsom, CA</td><td>—</td><td>—</td><td>33,600</td><td>—</td><td>1,582</td><td>32,018</td><td>5,004</td><td>2013</td><td>2009 330 Montrose Drive</td></tr><tr><td>Forest City, NC</td><td>—</td><td>320</td><td>4,497</td><td>—</td><td>320</td><td>4,497</td><td>1,902</td><td>2003</td><td>1999 493 Piney Ridge Rd.</td></tr><tr><td>Fort Ashby, WV</td><td>—</td><td>330</td><td>19,566</td><td>356</td><td>330</td><td>19,922</td><td>4,054</td><td>2011</td><td>1980 Diane Drive, Box 686</td></tr><tr><td>Fort Collins, CO</td><td>—</td><td>3,680</td><td>58,608</td><td>—</td><td>3,680</td><td>58,608</td><td>5,006</td><td>2015</td><td>2007 4750 Pleasant Oak Drive</td></tr><tr><td>Fort Collins, CO</td><td>—</td><td>890</td><td>4,532</td><td>—</td><td>890</td><td>4,532</td><td>89</td><td>2018</td><td>1965 1005 East Elizabeth</td></tr><tr><td>Fort Wayne, IN</td><td>—</td><td>170</td><td>8,232</td><td>—</td><td>170</td><td>8,232</td><td>2,649</td><td>2006</td><td>2006 2626 Fairfield Ave.</td></tr><tr><td>Fort Worth, TX</td><td>—</td><td>450</td><td>13,615</td><td>5,086</td><td>450</td><td>18,701</td><td>4,213</td><td>2010</td><td>2011 425 Alabama Ave.</td></tr><tr><td>Fort Worth, TX</td><td>—</td><td>2,080</td><td>27,888</td><td>2,401</td><td>2,080</td><td>30,289</td><td>7,355</td><td>2012</td><td>2001 2151 Green Oaks Road</td></tr><tr><td>Fountain Valley, CA</td><td>—</td><td>5,259</td><td>9,379</td><td>—</td><td>5,259</td><td>9,379</td><td>110</td><td>2018</td><td>1988 11680 Warner Avenue</td></tr><tr><td>Franconia, NH</td><td>—</td><td>360</td><td>11,320</td><td>70</td><td>360</td><td>11,390</td><td>2,433</td><td>2011</td><td>1971 93 Main Street</td></tr><tr><td>Fredericksburg, VA</td><td>—</td><td>1,000</td><td>20,000</td><td>1,200</td><td>1,000</td><td>21,200</td><td>7,399</td><td>2005</td><td>1999 3500 Meekins Dr.</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="5">Gross Amount at Which Carried at Close of Period</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Year Acquired</td><td>Year Built</td></tr><tr><td>Fredericksburg, VA</td><td>—</td><td>1,130</td><td>23,202</td><td>—</td><td>1,130</td><td>23,202</td><td>2,704</td><td>2014</td><td>2010 140 Brimley Drive</td></tr><tr><td>Fresno, CA</td><td>—</td><td>2,500</td><td>35,800</td><td>118</td><td>2,500</td><td>35,918</td><td>9,497</td><td>2008</td><td>1991 7173 North Sharon Avenue</td></tr><tr><td>Ft. Myers, FL</td><td>—</td><td>1,110</td><td>10,562</td><td>—</td><td>1,110</td><td>10,562</td><td>128</td><td>2018</td><td>1999 15950 McGregor Boulevard</td></tr><tr><td>Ft. Myers, FL</td><td>—</td><td>2,139</td><td>18,240</td><td>—</td><td>2,139</td><td>18,240</td><td>215</td><td>2018</td><td>1990 1600 Matthew Drive</td></tr><tr><td>Ft. Myers, FL</td><td>—</td><td>2,502</td><td>9,744</td><td>—</td><td>2,502</td><td>9,744</td><td>139</td><td>2018</td><td>2000 13881 Eagle Ridge Drive</td></tr><tr><td>Galesburg, IL</td><td>—</td><td>1,708</td><td>3,841</td><td>—</td><td>1,708</td><td>3,841</td><td>46</td><td>2018</td><td>1964 280 East Losey Street</td></tr><tr><td>Gardner, KS</td><td>—</td><td>200</td><td>2,800</td><td>93</td><td>200</td><td>2,893</td><td>259</td><td>2015</td><td>2000 869 Juniper Terrace</td></tr><tr><td>Gardnerville, NV</td><td>—</td><td>1,143</td><td>10,831</td><td>1,118</td><td>1,164</td><td>11,928</td><td>8,904</td><td>1998</td><td>1999 1565-A Virginia Ranch Rd.</td></tr><tr><td>Gastonia, NC</td><td>—</td><td>470</td><td>6,129</td><td>—</td><td>470</td><td>6,129</td><td>2,535</td><td>2003</td><td>1998 1680 S. New Hope Rd.</td></tr><tr><td>Gastonia, NC</td><td>—</td><td>310</td><td>3,096</td><td>22</td><td>310</td><td>3,118</td><td>1,355</td><td>2003</td><td>1994 1717 Union Rd.</td></tr><tr><td>Gastonia, NC</td><td>—</td><td>400</td><td>5,029</td><td>120</td><td>400</td><td>5,149</td><td>2,143</td><td>2003</td><td>1996 1750 Robinwood Rd.</td></tr><tr><td>Geneva, IL</td><td>—</td><td>1,502</td><td>16,198</td><td>—</td><td>1,502</td><td>16,198</td><td>191</td><td>2018</td><td>2000 2388 Bricher Road</td></tr><tr><td>Georgetown, TX</td><td>—</td><td>200</td><td>2,100</td><td>—</td><td>200</td><td>2,100</td><td>1,177</td><td>1997</td><td>1997 2600 University Dr., E.</td></tr><tr><td>Gig Harbor, WA</td><td>—</td><td>1,560</td><td>15,947</td><td>275</td><td>1,583</td><td>16,199</td><td>4,269</td><td>2010</td><td>1994 3213 45th St. Court NW</td></tr><tr><td>Gig Harbor, WA</td><td>—</td><td>3,000</td><td>4,463</td><td>—</td><td>3,000</td><td>4,463</td><td>64</td><td>2018</td><td>1990 3309 45th Street Court Northwest</td></tr><tr><td>Glen Ellyn, IL</td><td>—</td><td>1,496</td><td>6,636</td><td>—</td><td>1,496</td><td>6,636</td><td>87</td><td>2018</td><td>2001 25706 Park Boulevard</td></tr><tr><td>Granbury, TX</td><td>—</td><td>2,550</td><td>2,940</td><td>777</td><td>2,550</td><td>3,717</td><td>737</td><td>2012</td><td>1996 916 East Highway 377</td></tr><tr><td>Grand Ledge, MI</td><td>—</td><td>1,150</td><td>16,286</td><td>5,119</td><td>1,150</td><td>21,405</td><td>4,313</td><td>2010</td><td>1999 4775 Village Dr</td></tr><tr><td>Granger, IN</td><td>—</td><td>1,670</td><td>21,280</td><td>2,401</td><td>1,670</td><td>23,681</td><td>5,011</td><td>2010</td><td>2009 6330 North Fir Rd</td></tr><tr><td>Grapevine, TX</td><td>—</td><td>2,220</td><td>17,648</td><td>—</td><td>2,220</td><td>17,648</td><td>1,554</td><td>2013</td><td>2014 4545 Merlot Drive</td></tr><tr><td>Great Falls, MT</td><td>—</td><td>630</td><td>6,007</td><td>—</td><td>630</td><td>6,007</td><td>357</td><td>2018</td><td>2001 1801 9th Street South</td></tr><tr><td>Greeley, CO</td><td>—</td><td>1,077</td><td>18,051</td><td>—</td><td>1,077</td><td>18,051</td><td>806</td><td>2017</td><td>2009 5300 West 29th Street</td></tr><tr><td>Greenfield, WI</td><td>—</td><td>—</td><td>15,204</td><td>—</td><td>890</td><td>14,314</td><td>2,085</td><td>2013</td><td>1983 5017 South 110th Street</td></tr><tr><td>Greensboro, NC</td><td>—</td><td>330</td><td>2,970</td><td>554</td><td>330</td><td>3,524</td><td>1,506</td><td>2003</td><td>1996 5809 Old Oak Ridge Rd.</td></tr><tr><td>Greensboro, NC</td><td>—</td><td>560</td><td>5,507</td><td>1,013</td><td>560</td><td>6,520</td><td>2,770</td><td>2003</td><td>1997 4400 Lawndale Dr.</td></tr><tr><td>Greenville, SC</td><td>—</td><td>1,751</td><td>8,774</td><td>—</td><td>1,751</td><td>8,774</td><td>106</td><td>2018</td><td>1966 600 Sulphur Springs Road</td></tr><tr><td>Greenville, SC</td><td>—</td><td>947</td><td>1,445</td><td>—</td><td>947</td><td>1,445</td><td>29</td><td>2018</td><td>1976 601 Sulphur Springs Road</td></tr><tr><td>Greenville, NC</td><td>—</td><td>290</td><td>4,393</td><td>168</td><td>290</td><td>4,561</td><td>1,882</td><td>2003</td><td>1998 2715 Dickinson Ave.</td></tr><tr><td>Greenwood, IN</td><td>—</td><td>1,550</td><td>22,770</td><td>81</td><td>1,550</td><td>22,851</td><td>4,932</td><td>2010</td><td>2007 2339 South SR 135</td></tr><tr><td>Grosse Pointe, MI</td><td>—</td><td>867</td><td>2,386</td><td>—</td><td>867</td><td>2,386</td><td>30</td><td>2018</td><td>1964 21401 Mack Avenue</td></tr><tr><td>Grotto, CT</td><td>—</td><td>2,430</td><td>19,941</td><td>968</td><td>2,430</td><td>20,909</td><td>4,784</td><td>2011</td><td>1975 11405 Poquonnock Road</td></tr><tr><td>Hamilton, NJ</td><td>—</td><td>440</td><td>4,469</td><td>—</td><td>440</td><td>4,469</td><td>1,990</td><td>2001</td><td>1998 1645 Whitehorse-Mercerville Rd.</td></tr><tr><td>Hanahan, SC</td><td>—</td><td>1,944</td><td>3,988</td><td>—</td><td>1,944</td><td>3,988</td><td>57</td><td>2018</td><td>1989 1800 Eagle Landing Boulevard</td></tr><tr><td>Hanford, UK</td><td>—</td><td>1,382</td><td>9,829</td><td>378</td><td>1,428</td><td>10,161</td><td>1,453</td><td>2013</td><td>2012 Bankhouse Road</td></tr><tr><td>Harrisburg, PA</td><td>—</td><td>569</td><td>12,826</td><td>—</td><td>569</td><td>12,826</td><td>150</td><td>2018</td><td>2000 2625 Allianthus Lane</td></tr><tr><td>Harrow, UK</td><td>—</td><td>7,402</td><td>8,266</td><td>529</td><td>7,652</td><td>8,545</td><td>964</td><td>2014</td><td>2001 177 Preston Hill</td></tr><tr><td>Hatboro, PA</td><td>—</td><td>—</td><td>28,112</td><td>1,771</td><td>—</td><td>29,883</td><td>6,096</td><td>2011</td><td>1996 3485 Davisville Road</td></tr><tr><td>Hatboro, PA</td><td>—</td><td>1,192</td><td>7,611</td><td>—</td><td>1,192</td><td>7,611</td><td>122</td><td>2018</td><td>2000 779 West County Line Road</td></tr><tr><td>Hatfield, UK</td><td>—</td><td>2,924</td><td>7,527</td><td>353</td><td>3,023</td><td>7,781</td><td>1,121</td><td>2013</td><td>2012 St Albans Road East</td></tr><tr><td>Hattiesburg, MS</td><td>—</td><td>450</td><td>13,469</td><td>—</td><td>450</td><td>13,469</td><td>2,732</td><td>2010</td><td>2009 217 Methodist Hospital Blvd</td></tr><tr><td>Hemet, CA</td><td>—</td><td>6,224</td><td>8,414</td><td>—</td><td>6,224</td><td>8,414</td><td>102</td><td>2018</td><td>1989 1717 West Stetson Avenue</td></tr><tr><td>Henry, IL</td><td>—</td><td>1,860</td><td>3,689</td><td>—</td><td>1,860</td><td>3,689</td><td>43</td><td>2018</td><td>1987 1650 Old Indian Town Road</td></tr><tr><td>Hermitage, TN</td><td>—</td><td>1,500</td><td>9,943</td><td>188</td><td>1,500</td><td>10,131</td><td>1,953</td><td>2011</td><td>2006 4131 Andrew Jackson Parkway</td></tr><tr><td>Herne Bay, UK</td><td>—</td><td>1,900</td><td>24,353</td><td>1,602</td><td>1,964</td><td>25,891</td><td>3,934</td><td>2013</td><td>2011 165 Reculver Road</td></tr><tr><td>Hiawatha, KS</td><td>—</td><td>40</td><td>4,210</td><td>29</td><td>40</td><td>4,239</td><td>371</td><td>2015</td><td>1996 400 Kansas Ave</td></tr><tr><td>Hickory, NC</td><td>—</td><td>290</td><td>987</td><td>232</td><td>290</td><td>1,219</td><td>650</td><td>2003</td><td>1994 2530 16th St. N.E.</td></tr><tr><td>High Point, NC</td><td>—</td><td>560</td><td>4,443</td><td>793</td><td>560</td><td>5,236</td><td>2,205</td><td>2003</td><td>2000 1568 Sleet Club Rd.</td></tr><tr><td>High Point, NC</td><td>—</td><td>370</td><td>2,185</td><td>410</td><td>370</td><td>2,595</td><td>1,149</td><td>2003</td><td>1999 1564 Sleet Club Rd.</td></tr><tr><td>High Point, NC</td><td>—</td><td>330</td><td>3,395</td><td>28</td><td>330</td><td>3,423</td><td>1,450</td><td>2003</td><td>1994 201 W. Hartley Dr.</td></tr><tr><td>High Point, NC</td><td>—</td><td>430</td><td>4,143</td><td>—</td><td>430</td><td>4,143</td><td>1,743</td><td>2003</td><td>1998 1560 Sleet Club Rd.</td></tr><tr><td>Highland Park, IL</td><td>—</td><td>2,820</td><td>15,832</td><td>189</td><td>2,820</td><td>16,021</td><td>2,557</td><td>2011</td><td>2012 1651 Richfield Avenue</td></tr><tr><td>Highlands Ranch, CO</td><td>—</td><td>940</td><td>3,721</td><td>4,983</td><td>940</td><td>8,704</td><td>2,303</td><td>2002</td><td>1999 9160 S. University Blvd.</td></tr><tr><td>Hillsboro, OH</td><td>—</td><td>1,792</td><td>6,341</td><td>—</td><td>1,792</td><td>6,341</td><td>105</td><td>2018</td><td>1983 1141 Northview Drive</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td></tr><tr><td>Hinckley, UK</td><td>—</td><td>2,159</td><td>4,194</td><td>215</td><td>2,232</td><td>4,336</td><td>684</td><td>2013</td><td>2013 Tudor Road</td><td></td><td></td></tr><tr><td>Hindhead, UK</td><td>44,662</td><td>17,852</td><td>48,645</td><td>2,466</td><td>18,455</td><td>50,508</td><td>2,649</td><td>2016</td><td>2012 Portsmouth Road</td><td></td><td></td></tr><tr><td>Hinsdale, IL</td><td>—</td><td>4,033</td><td>24,287</td><td>—</td><td>4,033</td><td>24,287</td><td>270</td><td>2018</td><td>1971 600 W Ogden Avenue</td><td></td><td></td></tr><tr><td>Hockessin, DE</td><td>—</td><td>1,120</td><td>6,308</td><td>1,247</td><td>1,120</td><td>7,555</td><td>941</td><td>2014</td><td>1992 100 Saint Claire Drive</td><td></td><td></td></tr><tr><td>Holton, KS</td><td>—</td><td>40</td><td>7,460</td><td>13</td><td>40</td><td>7,473</td><td>611</td><td>2015</td><td>1996 410 Juniper Dr</td><td></td><td></td></tr><tr><td>Homewood, IL</td><td>—</td><td>2,395</td><td>7,652</td><td>—</td><td>2,395</td><td>7,652</td><td>87</td><td>2018</td><td>1989 940 Maple Avenue</td><td></td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>1,040</td><td>31,965</td><td>4,969</td><td>1,040</td><td>36,934</td><td>7,493</td><td>2012</td><td>1999 505 Bering Drive</td><td></td><td></td></tr><tr><td>Howard, WI</td><td>—</td><td>579</td><td>32,122</td><td>10</td><td>579</td><td>32,132</td><td>1,099</td><td>2017</td><td>2016 2790 Elm Tree Hill</td><td></td><td></td></tr><tr><td>Huntingdon Valley, PA</td><td>—</td><td>1,150</td><td>3,730</td><td>—</td><td>1,150</td><td>3,730</td><td>63</td><td>2018</td><td>1993 3430 Huntingdon Pike</td><td></td><td></td></tr><tr><td>Hyattsville, MD</td><td>—</td><td>4,017</td><td>2,298</td><td>—</td><td>4,017</td><td>2,298</td><td>33</td><td>2018</td><td>1964 6500 Riggs Road</td><td></td><td></td></tr><tr><td>Independence, VA</td><td>—</td><td>1,082</td><td>6,767</td><td>—</td><td>1,082</td><td>6,767</td><td>438</td><td>2018</td><td>1998 400 S Independence Ave</td><td></td><td></td></tr><tr><td>Indianapolis, IN</td><td>—</td><td>870</td><td>14,688</td><td>—</td><td>870</td><td>14,688</td><td>1,837</td><td>2014</td><td>2014 1635 N Arlington Avenue</td><td></td><td></td></tr><tr><td>Indianapolis, IN</td><td>—</td><td>1,105</td><td>6,645</td><td>—</td><td>1,105</td><td>6,645</td><td>76</td><td>2018</td><td>1979 8549 South Madison Avenue</td><td></td><td></td></tr><tr><td>Jackson, NJ</td><td>—</td><td>6,500</td><td>26,405</td><td>3,107</td><td>6,500</td><td>29,512</td><td>4,577</td><td>2012</td><td>2001 2 Kathleen Drive</td><td></td><td></td></tr><tr><td>Jacksonville, FL</td><td>—</td><td>750</td><td>25,231</td><td>—</td><td>750</td><td>25,231</td><td>1,645</td><td>2013</td><td>2014 5939 Roosevelt Boulevard</td><td></td><td></td></tr><tr><td>Jacksonville, FL</td><td>—</td><td>—</td><td>26,381</td><td>1,691</td><td>1,691</td><td>26,381</td><td>1,716</td><td>2013</td><td>2014 4000 San Pablo Parkway</td><td></td><td></td></tr><tr><td>Jacksonville, FL</td><td>—</td><td>1,752</td><td>2,553</td><td>—</td><td>1,752</td><td>2,553</td><td>31</td><td>2018</td><td>1989 8495 Normandy Boulevard Jacksonville</td><td></td><td></td></tr><tr><td>Jacksonville, FL</td><td>—</td><td>2,182</td><td>9,491</td><td>—</td><td>2,182</td><td>9,491</td><td>123</td><td>2018</td><td>1980 3648 University Boulevard South</td><td></td><td></td></tr><tr><td>Jefferson Hills, PA</td><td>—</td><td>2,265</td><td>13,618</td><td>—</td><td>2,265</td><td>13,618</td><td>233</td><td>2018</td><td>1997 380 Wray Large Road</td><td></td><td></td></tr><tr><td>Jersey Shore, PA</td><td>—</td><td>600</td><td>8,107</td><td>—</td><td>600</td><td>8,107</td><td>89</td><td>2018</td><td>1973 1008 Thompson Street</td><td></td><td></td></tr><tr><td>Kansas City, KS</td><td>—</td><td>700</td><td>20,115</td><td>—</td><td>700</td><td>20,115</td><td>1,646</td><td>2015</td><td>2015 8900 Parallel Parkway</td><td></td><td></td></tr><tr><td>Katy, TX</td><td>—</td><td>1,778</td><td>22,622</td><td>—</td><td>1,778</td><td>22,622</td><td>1,047</td><td>2017</td><td>2015 24802 Kingsland Boulevard</td><td></td><td></td></tr><tr><td>Kenner, LA</td><td>—</td><td>1,100</td><td>10,036</td><td>349</td><td>1,100</td><td>10,385</td><td>9,529</td><td>1998</td><td>2000 1600 Joe Yenni Blvd</td><td></td><td></td></tr><tr><td>Kensington, MD</td><td>—</td><td>1,753</td><td>18,626</td><td>—</td><td>1,753</td><td>18,626</td><td>211</td><td>2018</td><td>2002 4301 Knowles Avenue</td><td></td><td></td></tr><tr><td>Kenwood, OH</td><td>—</td><td>821</td><td>11,043</td><td>—</td><td>821</td><td>11,043</td><td>129</td><td>2018</td><td>2000 4580 East Galbraith Road</td><td></td><td></td></tr><tr><td>Kettering, OH</td><td>—</td><td>1,229</td><td>4,703</td><td>—</td><td>1,229</td><td>4,703</td><td>63</td><td>2018</td><td>1977 3313 Wilmington Pike</td><td></td><td></td></tr><tr><td>King of Prussia, PA</td><td>—</td><td>720</td><td>14,780</td><td>—</td><td>720</td><td>14,780</td><td>180</td><td>2018</td><td>1995 620 West Valley Forge Road</td><td></td><td></td></tr><tr><td>King of Prussia, PA</td><td>—</td><td>1,205</td><td>4,727</td><td>—</td><td>1,205</td><td>4,727</td><td>68</td><td>2018</td><td>1990 600 West Valley Forge Road</td><td></td><td></td></tr><tr><td>Kingsford, MI</td><td>—</td><td>1,362</td><td>10,598</td><td>—</td><td>1,362</td><td>10,598</td><td>129</td><td>2018</td><td>1968 1225 Woodward Avenue</td><td></td><td></td></tr><tr><td>Kingston, PA</td><td>—</td><td>986</td><td>5,711</td><td>—</td><td>986</td><td>5,711</td><td>68</td><td>2018</td><td>1974 200 Second Avenue</td><td></td><td></td></tr><tr><td>Kingston upon Thames, UK</td><td>53,595</td><td>33,063</td><td>46,696</td><td>2,926</td><td>34,181</td><td>48,504</td><td>2,573</td><td>2016</td><td>2014 Coombe Lane West</td><td></td><td></td></tr><tr><td>Kirkland, WA</td><td>—</td><td>1,880</td><td>4,315</td><td>683</td><td>1,880</td><td>4,998</td><td>1,911</td><td>2003</td><td>1996 6505 Lakeview Dr.</td><td></td><td></td></tr><tr><td>Kirkstall, UK</td><td>—</td><td>2,437</td><td>9,414</td><td>401</td><td>2,519</td><td>9,733</td><td>1,396</td><td>2013</td><td>2009 29 Broad Lane</td><td></td><td></td></tr><tr><td>Kokomo, IN</td><td>—</td><td>710</td><td>16,044</td><td>—</td><td>710</td><td>16,044</td><td>2,001</td><td>2014</td><td>2014 2200 S. Dixon Rd</td><td></td><td></td></tr><tr><td>Lacey, WA</td><td>—</td><td>2,582</td><td>18,180</td><td>—</td><td>2,582</td><td>18,180</td><td>209</td><td>2018</td><td>2012 4524 Intelco Loop SE</td><td></td><td></td></tr><tr><td>Lafayette, LA</td><td>—</td><td>1,928</td><td>10,483</td><td>26</td><td>1,928</td><td>10,509</td><td>4,581</td><td>2006</td><td>1993 204 Energy Parkway</td><td></td><td></td></tr><tr><td>Lafayette, CO</td><td>—</td><td>1,420</td><td>20,192</td><td>—</td><td>1,420</td><td>20,192</td><td>2,001</td><td>2015</td><td>2015 329 Exempla Circle</td><td></td><td></td></tr><tr><td>Lafayette, IN</td><td>—</td><td>670</td><td>16,833</td><td>1</td><td>670</td><td>16,834</td><td>1,870</td><td>2015</td><td>2014 2402 South Street</td><td></td><td></td></tr><tr><td>Lakeway, TX</td><td>—</td><td>5,142</td><td>23,203</td><td>—</td><td>5,142</td><td>23,203</td><td>3,272</td><td>2007</td><td>2011 2000 Medical Dr</td><td></td><td></td></tr><tr><td>Lakewood, CO</td><td>—</td><td>2,160</td><td>28,091</td><td>62</td><td>2,160</td><td>28,153</td><td>3,561</td><td>2014</td><td>2010 7395 West Eastman Place</td><td></td><td></td></tr><tr><td>Lakewood Ranch, FL</td><td>—</td><td>650</td><td>6,714</td><td>1,988</td><td>650</td><td>8,702</td><td>1,484</td><td>2011</td><td>2012 8230 Nature&#x27;s Way</td><td></td><td></td></tr><tr><td>Lakewood Ranch, FL</td><td>—</td><td>1,000</td><td>22,388</td><td>—</td><td>1,000</td><td>22,388</td><td>3,822</td><td>2012</td><td>2005 8220 Natures Way</td><td></td><td></td></tr><tr><td>Lancaster, PA</td><td>—</td><td>1,680</td><td>14,039</td><td>—</td><td>1,680</td><td>14,039</td><td>761</td><td>2015</td><td>2017 31 Millersville Road</td><td></td><td></td></tr><tr><td>Lancaster, PA</td><td>—</td><td>1,011</td><td>7,504</td><td>—</td><td>1,011</td><td>7,504</td><td>89</td><td>2018</td><td>1966 100 Abbeyville Road</td><td></td><td></td></tr><tr><td>LaPlata, MD</td><td>—</td><td>700</td><td>19,068</td><td>466</td><td>700</td><td>19,534</td><td>4,198</td><td>2011</td><td>1984 One Magnolia Drive</td><td></td><td></td></tr><tr><td>Largo, MD</td><td>—</td><td>3,361</td><td>3,623</td><td>—</td><td>3,361</td><td>3,623</td><td>50</td><td>2018</td><td>1978 600 Largo Road</td><td></td><td></td></tr><tr><td>Largo, FL</td><td>—</td><td>1,166</td><td>3,427</td><td>—</td><td>1,166</td><td>3,427</td><td>53</td><td>2018</td><td>1997 300 Highland Avenue Northeast</td><td></td><td></td></tr><tr><td>Las Vegas, NV</td><td>—</td><td>580</td><td>23,420</td><td>—</td><td>580</td><td>23,420</td><td>4,594</td><td>2011</td><td>2002 2500 North Tenaya Way</td><td></td><td></td></tr><tr><td>Laureldale, PA</td><td>—</td><td>1,171</td><td>14,424</td><td>—</td><td>1,171</td><td>14,424</td><td>166</td><td>2018</td><td>1980 2125 Elizabeth Avenue</td><td></td><td></td></tr><tr><td>Lawrence, KS</td><td>—</td><td>250</td><td>8,716</td><td>—</td><td>250</td><td>8,716</td><td>1,471</td><td>2012</td><td>1996 3220 Peterson Road</td><td></td><td></td></tr><tr><td>Leawood, KS</td><td>—</td><td>2,490</td><td>32,493</td><td>2,209</td><td>5,610</td><td>31,582</td><td>7,303</td><td>2012</td><td>1999 4400 West 115th Street</td><td></td><td></td></tr><tr><td>Lebanon, PA</td><td>—</td><td>728</td><td>10,370</td><td>—</td><td>728</td><td>10,370</td><td>130</td><td>2018</td><td>1998 100 Tuck Court</td><td></td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="5">Gross Amount at Which Carried at Close of Period</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Year Acquired</td><td>Year Built</td></tr><tr><td>Lebanon, PA</td><td>—</td><td>1,214</td><td>5,962</td><td>—</td><td>1,214</td><td>5,962</td><td>84</td><td>2018</td><td>1980 900 Tuck Street</td></tr><tr><td>Lee, MA</td><td>—</td><td>290</td><td>18,135</td><td>926</td><td>290</td><td>19,061</td><td>8,404</td><td>2002</td><td>1998 600 &amp; 620 Laurel St.</td></tr><tr><td>Leeds, UK</td><td>—</td><td>1,974</td><td>13,239</td><td>515</td><td>2,041</td><td>13,687</td><td>1,305</td><td>2015</td><td>2013 100 Grove Lane</td></tr><tr><td>Leicester, UK</td><td>—</td><td>3,060</td><td>24,410</td><td>928</td><td>3,163</td><td>25,235</td><td>3,953</td><td>2012</td><td>2010 307 London Road</td></tr><tr><td>Lenoir, NC</td><td>—</td><td>190</td><td>3,748</td><td>641</td><td>190</td><td>4,389</td><td>1,842</td><td>2003</td><td>1998 1145 Powell Rd., N.E.</td></tr><tr><td>Lethbridge, AB</td><td>1,312</td><td>1,214</td><td>2,750</td><td>61</td><td>1,232</td><td>2,793</td><td>422</td><td>2014</td><td>2003 785 Columbia Boulevard West</td></tr><tr><td>Lexana, KS</td><td>—</td><td>480</td><td>1,770</td><td>152</td><td>480</td><td>1,922</td><td>184</td><td>2015</td><td>1994 8710 Caenen Lake Rd</td></tr><tr><td>Lexington, NC</td><td>—</td><td>200</td><td>3,900</td><td>1,015</td><td>200</td><td>4,915</td><td>2,127</td><td>2002</td><td>1997 161 Young Dr.</td></tr><tr><td>Libertyville, IL</td><td>—</td><td>6,500</td><td>40,024</td><td>—</td><td>6,500</td><td>40,024</td><td>8,481</td><td>2011</td><td>2001 901 Florsheim Dr</td></tr><tr><td>Libertyville, IL</td><td>—</td><td>2,993</td><td>11,550</td><td>—</td><td>2,993</td><td>11,550</td><td>130</td><td>2018</td><td>1988 1500 South Milwaukee</td></tr><tr><td>Lichfield, UK</td><td>—</td><td>1,382</td><td>30,324</td><td>1,071</td><td>1,428</td><td>31,349</td><td>3,020</td><td>2015</td><td>2012 Wissage Road</td></tr><tr><td>Lillington, NC</td><td>—</td><td>470</td><td>17,579</td><td>—</td><td>470</td><td>17,579</td><td>2,112</td><td>2014</td><td>2013 54 Red Mulberry Way</td></tr><tr><td>Lillington, NC</td><td>—</td><td>500</td><td>16,451</td><td>—</td><td>500</td><td>16,451</td><td>1,855</td><td>2014</td><td>1999 2041 NC-210 N</td></tr><tr><td>Lincoln, NE</td><td>—</td><td>390</td><td>13,807</td><td>95</td><td>390</td><td>13,902</td><td>3,154</td><td>2010</td><td>2000 7208 Van Dorn St.</td></tr><tr><td>Lititz, PA</td><td>—</td><td>1,200</td><td>13,836</td><td>—</td><td>1,200</td><td>13,836</td><td>752</td><td>2015</td><td>2016 80 West Millport Road</td></tr><tr><td>Livermore, CA</td><td>—</td><td>4,100</td><td>24,996</td><td>—</td><td>4,100</td><td>24,996</td><td>2,642</td><td>2014</td><td>1974 35 Fenton Street</td></tr><tr><td>Livonia, MI</td><td>—</td><td>985</td><td>13,558</td><td>—</td><td>985</td><td>13,558</td><td>164</td><td>2018</td><td>1999 32500 Seven Mile Road</td></tr><tr><td>Livonia, MI</td><td>—</td><td>1,836</td><td>2,278</td><td>—</td><td>1,836</td><td>2,278</td><td>33</td><td>2018</td><td>1960 28550 Five Mile Road</td></tr><tr><td>Longview, TX</td><td>—</td><td>610</td><td>5,520</td><td>—</td><td>610</td><td>5,520</td><td>1,725</td><td>2006</td><td>2007 311 E Hawkins Pkwy</td></tr><tr><td>Longwood, FL</td><td>—</td><td>1,260</td><td>6,445</td><td>—</td><td>1,260</td><td>6,445</td><td>1,362</td><td>2011</td><td>2011 425 South Ronald Reagan Boulevard</td></tr><tr><td>Louisburg, KS</td><td>—</td><td>280</td><td>4,320</td><td>44</td><td>280</td><td>4,364</td><td>360</td><td>2015</td><td>1996 202 Rogers St</td></tr><tr><td>Louisville, KY</td><td>—</td><td>490</td><td>10,010</td><td>2,768</td><td>490</td><td>12,778</td><td>4,869</td><td>2005</td><td>1978 4604 Lowe Rd</td></tr><tr><td>Loxley, UK</td><td>—</td><td>1,369</td><td>15,668</td><td>577</td><td>1,416</td><td>16,198</td><td>2,474</td><td>2013</td><td>2008 Loxley Road</td></tr><tr><td>Lutherville, MD</td><td>—</td><td>1,100</td><td>19,786</td><td>1,744</td><td>1,100</td><td>21,530</td><td>4,472</td><td>2011</td><td>1988 515 Brightfield Road</td></tr><tr><td>Lynchburg, VA</td><td>—</td><td>340</td><td>16,114</td><td>—</td><td>340</td><td>16,114</td><td>1,964</td><td>2014</td><td>2013 189 Monica Blvd</td></tr><tr><td>Lynchburg, VA</td><td>—</td><td>2,904</td><td>3,697</td><td>—</td><td>2,904</td><td>3,697</td><td>43</td><td>2018</td><td>1978 2200 Landover Place</td></tr><tr><td>Lynnwood, WA</td><td>—</td><td>2,308</td><td>5,634</td><td>—</td><td>2,308</td><td>5,634</td><td>67</td><td>2018</td><td>1987 3701 188th Street</td></tr><tr><td>Macomb, IL</td><td>—</td><td>1,586</td><td>4,059</td><td>—</td><td>1,586</td><td>4,059</td><td>46</td><td>2018</td><td>1966 8 Doctors Lane</td></tr><tr><td>Macungie, PA</td><td>—</td><td>960</td><td>29,033</td><td>84</td><td>960</td><td>29,117</td><td>6,047</td><td>2011</td><td>1994 1718 Spring Creek Road</td></tr><tr><td>Manalapan, NJ</td><td>—</td><td>900</td><td>22,624</td><td>622</td><td>900</td><td>23,246</td><td>4,447</td><td>2011</td><td>2001 445 Route 9 South</td></tr><tr><td>Manassas, VA</td><td>—</td><td>750</td><td>7,446</td><td>530</td><td>750</td><td>7,976</td><td>3,092</td><td>2003</td><td>1996 8341 Barrett Dr.</td></tr><tr><td>Mankato, MN</td><td>—</td><td>1,460</td><td>32,104</td><td>300</td><td>1,460</td><td>32,404</td><td>2,620</td><td>2015</td><td>2006 100 Dublin Road</td></tr><tr><td>Mansfield, TX</td><td>—</td><td>660</td><td>5,251</td><td>—</td><td>660</td><td>5,251</td><td>1,659</td><td>2006</td><td>2007 2281 Country Club Dr</td></tr><tr><td>Marietta, OH</td><td>—</td><td>1,149</td><td>9,376</td><td>—</td><td>1,149</td><td>9,376</td><td>109</td><td>2018</td><td>1977 5001 State Route 60</td></tr><tr><td>Marietta, GA</td><td>—</td><td>2,406</td><td>12,233</td><td>—</td><td>2,406</td><td>12,233</td><td>140</td><td>2018</td><td>1980 4360 Johnson Ferry Place</td></tr><tr><td>Marietta, PA</td><td>—</td><td>1,050</td><td>13,633</td><td>270</td><td>1,050</td><td>13,903</td><td>1,226</td><td>2015</td><td>1999 2760 Maytown Road</td></tr><tr><td>Marion, IN</td><td>—</td><td>720</td><td>12,750</td><td>1,136</td><td>720</td><td>13,886</td><td>1,675</td><td>2014</td><td>2012 614 W. 14th Street</td></tr><tr><td>Marion, IN</td><td>—</td><td>990</td><td>9,190</td><td>824</td><td>990</td><td>10,014</td><td>1,432</td><td>2014</td><td>1976 505 N. Bradner Avenue</td></tr><tr><td>Marion, OH</td><td>—</td><td>2,768</td><td>17,420</td><td>—</td><td>2,768</td><td>17,420</td><td>259</td><td>2018</td><td>2004 400 Barks Road West</td></tr><tr><td>Marlborough, UK</td><td>—</td><td>2,677</td><td>6,822</td><td>322</td><td>2,768</td><td>7,033</td><td>777</td><td>2014</td><td>1999 The Common</td></tr><tr><td>Marlow, UK</td><td>—</td><td>9,068</td><td>39,720</td><td>—</td><td>9,068</td><td>39,720</td><td>2,869</td><td>2013</td><td>2014 210 Little Marlow Road</td></tr><tr><td>Martinsville, VA</td><td>—</td><td>349</td><td>—</td><td>—</td><td>349</td><td>—</td><td>—</td><td>2003</td><td>1990 Rolling Hills Rd. &amp; US Hwy. 58</td></tr><tr><td>Marysville, WA</td><td>—</td><td>620</td><td>4,780</td><td>969</td><td>620</td><td>5,749</td><td>2,233</td><td>2003</td><td>1998 9802 48th Dr. N.E.</td></tr><tr><td>Matawan, NJ</td><td>—</td><td>1,830</td><td>20,618</td><td>166</td><td>1,830</td><td>20,784</td><td>4,158</td><td>2011</td><td>1965 625 State Highway 34</td></tr><tr><td>Matthews, NC</td><td>—</td><td>560</td><td>4,738</td><td>—</td><td>560</td><td>4,738</td><td>2,031</td><td>2003</td><td>1998 2404 Plantation Center Dr.</td></tr><tr><td>McHenry, IL</td><td>—</td><td>1,576</td><td>—</td><td>—</td><td>1,576</td><td>—</td><td>—</td><td>2006</td><td>1990 5200 Block of Bull Valley Road</td></tr><tr><td>McKinney, TX</td><td>—</td><td>1,570</td><td>7,389</td><td>—</td><td>1,570</td><td>7,389</td><td>1,881</td><td>2009</td><td>2010 2701 Alma Rd.</td></tr><tr><td>McMurray, PA</td><td>—</td><td>1,440</td><td>15,805</td><td>3,894</td><td>1,440</td><td>19,699</td><td>3,641</td><td>2010</td><td>2011 240 Cedar Hill Dr</td></tr><tr><td>Mechanicsburg, PA</td><td>—</td><td>1,350</td><td>16,650</td><td>—</td><td>1,350</td><td>16,650</td><td>3,344</td><td>2011</td><td>1971 4950 Wilson Lane</td></tr><tr><td>Medicine Hat, AB</td><td>2,156</td><td>932</td><td>5,566</td><td>98</td><td>946</td><td>5,650</td><td>679</td><td>2014</td><td>1999 65 Valleyview Drive SW</td></tr><tr><td>Menomonee Falls, WI</td><td>—</td><td>1,020</td><td>6,984</td><td>1,652</td><td>1,020</td><td>8,636</td><td>2,285</td><td>2006</td><td>2007 W128 N6900 Northfield Drive</td></tr><tr><td>Mentor, OH</td><td>—</td><td>1,827</td><td>9,941</td><td>—</td><td>1,827</td><td>9,941</td><td>117</td><td>2018</td><td>1985 8200 Mentor Hills Drive</td></tr><tr><td>Mercerville, NJ</td><td>—</td><td>860</td><td>9,929</td><td>173</td><td>860</td><td>10,102</td><td>2,315</td><td>2011</td><td>1967 2240 White Horse- Merceville Road</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="5">Gross Amount at Which Carried at Close of Period</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Year Acquired</td><td>Year Built</td></tr><tr><td>Meriden, CT</td><td>—</td><td>1,300</td><td>1,472</td><td>233</td><td>1,300</td><td>1,705</td><td>736</td><td>2011</td><td>1968 845 Paddock Ave</td></tr><tr><td>Merrillville, IN</td><td>—</td><td>700</td><td>11,699</td><td>154</td><td>700</td><td>11,853</td><td>3,430</td><td>2007</td><td>2008 9509 Georgia St.</td></tr><tr><td>Mesa, AZ</td><td>—</td><td>950</td><td>9,087</td><td>1,971</td><td>950</td><td>11,058</td><td>5,022</td><td>1999</td><td>2000 7231 E. Broadway</td></tr><tr><td>Miamisburg, OH</td><td>—</td><td>786</td><td>3,233</td><td>—</td><td>786</td><td>3,233</td><td>54</td><td>2018</td><td>1983 450 Oak Ridge Boulevard</td></tr><tr><td>Middleburg Heights, OH</td><td>—</td><td>960</td><td>7,780</td><td>—</td><td>960</td><td>7,780</td><td>2,946</td><td>2004</td><td>1998 15435 Bagley Rd.</td></tr><tr><td>Middleton, WI</td><td>—</td><td>420</td><td>4,006</td><td>600</td><td>420</td><td>4,606</td><td>1,915</td><td>2001</td><td>1991 6701 Stonefield Rd.</td></tr><tr><td>Midland, MI</td><td>—</td><td>200</td><td>11,025</td><td>5,522</td><td>200</td><td>16,547</td><td>2,992</td><td>2010</td><td>1994 2325 Rockwell Dr</td></tr><tr><td>Milton Keynes, UK</td><td>—</td><td>1,826</td><td>18,654</td><td>692</td><td>1,888</td><td>19,284</td><td>1,913</td><td>2015</td><td>2007 Tunbridge Grove, Kents Hill</td></tr><tr><td>Mishawaka, IN</td><td>—</td><td>740</td><td>16,113</td><td>—</td><td>740</td><td>16,113</td><td>2,067</td><td>2014</td><td>2013 60257 Bodnar Blvd</td></tr><tr><td>Moline, IL</td><td>—</td><td>2,946</td><td>18,677</td><td>—</td><td>2,946</td><td>18,677</td><td>206</td><td>2018</td><td>1964 833 Sixteenth Avenue</td></tr><tr><td>Monmouth Junction, NJ</td><td>—</td><td>720</td><td>6,209</td><td>86</td><td>720</td><td>6,295</td><td>1,522</td><td>2011</td><td>1996 2 Deer Park Drive</td></tr><tr><td>Monroe, NC</td><td>—</td><td>470</td><td>3,681</td><td>648</td><td>470</td><td>4,329</td><td>1,850</td><td>2003</td><td>2001 918 Fitzgerald St.</td></tr><tr><td>Monroe, NC</td><td>—</td><td>310</td><td>4,799</td><td>857</td><td>310</td><td>5,656</td><td>2,316</td><td>2003</td><td>2000 919 Fitzgerald St.</td></tr><tr><td>Monroe, NC</td><td>—</td><td>450</td><td>4,021</td><td>114</td><td>450</td><td>4,135</td><td>1,764</td><td>2003</td><td>1997 1316 Patterson Ave.</td></tr><tr><td>Monroe Township, NJ</td><td>—</td><td>3,250</td><td>27,771</td><td>270</td><td>3,250</td><td>28,041</td><td>2,200</td><td>2015</td><td>1996 319 Forsgate Drive</td></tr><tr><td>Monroeville, PA</td><td>—</td><td>1,216</td><td>12,753</td><td>—</td><td>1,216</td><td>12,753</td><td>179</td><td>2018</td><td>1997 120 Wyngate Drive</td></tr><tr><td>Monroeville, PA</td><td>—</td><td>1,237</td><td>3,642</td><td>—</td><td>1,237</td><td>3,642</td><td>68</td><td>2018</td><td>1996 885 MacBeth Drive</td></tr><tr><td>Montgomeryville, PA</td><td>—</td><td>1,176</td><td>9,827</td><td>—</td><td>1,176</td><td>9,827</td><td>122</td><td>2018</td><td>1989 640 Bethlehem Pike</td></tr><tr><td>Montville, NJ</td><td>—</td><td>3,500</td><td>31,002</td><td>1,171</td><td>3,500</td><td>32,173</td><td>6,238</td><td>2011</td><td>1988 165 Changebridge Rd.</td></tr><tr><td>Moorestown, NJ</td><td>—</td><td>6,400</td><td>23,875</td><td>27</td><td>6,400</td><td>23,902</td><td>3,239</td><td>2012</td><td>2014 250 Marter Avenue</td></tr><tr><td>Morehead City, NC</td><td>—</td><td>200</td><td>3,104</td><td>1,648</td><td>200</td><td>4,752</td><td>2,260</td><td>1999</td><td>1999 107 Bryan St.</td></tr><tr><td>Morrison, CO</td><td>—</td><td>2,720</td><td>16,261</td><td>—</td><td>2,720</td><td>16,261</td><td>311</td><td>2018</td><td>1974 150 Spring Street</td></tr><tr><td>Morton Grove, IL</td><td>—</td><td>1,900</td><td>19,374</td><td>159</td><td>1,900</td><td>19,533</td><td>3,728</td><td>2010</td><td>2011 5520 N. Lincoln Ave.</td></tr><tr><td>Moulton, UK</td><td>—</td><td>1,695</td><td>12,510</td><td>997</td><td>1,597</td><td>13,605</td><td>568</td><td>2017</td><td>1995 Northampton Lane North</td></tr><tr><td>Mount Pleasant, SC</td><td>—</td><td>—</td><td>17,200</td><td>1</td><td>4,052</td><td>13,149</td><td>3,228</td><td>2013</td><td>1985 1200 Hospital Drive</td></tr><tr><td>Mountainside, NJ</td><td>—</td><td>3,097</td><td>7,810</td><td>—</td><td>3,097</td><td>7,810</td><td>93</td><td>2018</td><td>1988 1180 Route 22</td></tr><tr><td>Nacogdoches, TX</td><td>—</td><td>390</td><td>5,754</td><td>—</td><td>390</td><td>5,754</td><td>1,792</td><td>2006</td><td>2007 5902 North St</td></tr><tr><td>Naperville, IL</td><td>—</td><td>3,470</td><td>29,547</td><td>—</td><td>3,470</td><td>29,547</td><td>6,382</td><td>2011</td><td>2001 504 North River Road</td></tr><tr><td>Naples, FL</td><td>—</td><td>1,222</td><td>10,642</td><td>—</td><td>1,222</td><td>10,642</td><td>133</td><td>2018</td><td>1998 6125 Rattlesnake Hammock Road</td></tr><tr><td>Naples, FL</td><td>—</td><td>1,672</td><td>26,170</td><td>—</td><td>1,672</td><td>26,170</td><td>344</td><td>2018</td><td>1993 1000 Lely Palms Drive</td></tr><tr><td>Naples, FL</td><td>—</td><td>1,854</td><td>12,402</td><td>—</td><td>1,854</td><td>12,402</td><td>140</td><td>2018</td><td>1987 3601 Lakewood Boulevard</td></tr><tr><td>Nashville, TN</td><td>—</td><td>4,910</td><td>29,590</td><td>—</td><td>4,910</td><td>29,590</td><td>8,321</td><td>2008</td><td>2007 15 Burton Hills Boulevard</td></tr><tr><td>Naugatuck, CT</td><td>—</td><td>1,200</td><td>15,826</td><td>199</td><td>1,200</td><td>16,025</td><td>3,479</td><td>2011</td><td>1980 4 Hazel Avenue</td></tr><tr><td>Needham, MA</td><td>—</td><td>1,610</td><td>12,667</td><td>—</td><td>1,610</td><td>12,667</td><td>5,327</td><td>2002</td><td>1994 100 West St.</td></tr><tr><td>New Moston, UK</td><td>—</td><td>1,480</td><td>4,378</td><td>198</td><td>1,530</td><td>4,526</td><td>676</td><td>2013</td><td>2010 90a Broadway</td></tr><tr><td>Newcastle Under Lyme, UK</td><td>—</td><td>1,110</td><td>5,655</td><td>229</td><td>1,148</td><td>5,846</td><td>834</td><td>2013</td><td>2010 Hempstalls Lane</td></tr><tr><td>Newcastle-under-Lyme, UK</td><td>—</td><td>1,125</td><td>5,537</td><td>225</td><td>1,163</td><td>5,724</td><td>631</td><td>2014</td><td>1999 Silverdale Road</td></tr><tr><td>Newport News, VA</td><td>—</td><td>839</td><td>6,077</td><td>—</td><td>839</td><td>6,077</td><td>407</td><td>2018</td><td>1998 12997 Nettles Dr</td></tr><tr><td>Norman, OK</td><td>—</td><td>55</td><td>1,484</td><td>—</td><td>55</td><td>1,484</td><td>938</td><td>1995</td><td>1995 1701 Alameda Dr.</td></tr><tr><td>Norman, OK</td><td>—</td><td>1,480</td><td>33,330</td><td>—</td><td>1,480</td><td>33,330</td><td>5,571</td><td>2012</td><td>1985 800 Canadian Trails Drive</td></tr><tr><td>North Augusta, SC</td><td>—</td><td>332</td><td>2,558</td><td>—</td><td>332</td><td>2,558</td><td>1,348</td><td>1999</td><td>1998 105 North Hills Dr.</td></tr><tr><td>Northampton, UK</td><td>—</td><td>5,182</td><td>17,348</td><td>762</td><td>5,357</td><td>17,935</td><td>2,659</td><td>2013</td><td>2011 Cliftonville Road</td></tr><tr><td>Northampton, UK</td><td>—</td><td>2,013</td><td>6,257</td><td>280</td><td>2,081</td><td>6,469</td><td>674</td><td>2014</td><td>2014 Cliftonville Road</td></tr><tr><td>Northbrook, IL</td><td>—</td><td>1,298</td><td>13,341</td><td>—</td><td>1,298</td><td>13,341</td><td>154</td><td>2018</td><td>1999 3240 Milwaukee Avenue</td></tr><tr><td>Nuneaton, UK</td><td>—</td><td>3,325</td><td>8,983</td><td>415</td><td>3,437</td><td>9,286</td><td>1,326</td><td>2013</td><td>2011 132 Coventry Road</td></tr><tr><td>Nuthall, UK</td><td>—</td><td>1,628</td><td>6,263</td><td>268</td><td>1,684</td><td>6,475</td><td>661</td><td>2014</td><td>2014 172A Nottingham Road</td></tr><tr><td>Nuthall, UK</td><td>—</td><td>2,498</td><td>10,436</td><td>438</td><td>2,583</td><td>10,789</td><td>1,556</td><td>2013</td><td>2011 172 Nottingham Road</td></tr><tr><td>Oak Lawn, IL</td><td>—</td><td>2,418</td><td>5,428</td><td>—</td><td>2,418</td><td>5,428</td><td>62</td><td>2018</td><td>1977 9401 South Kostner Avenue</td></tr><tr><td>Oak Lawn, IL</td><td>—</td><td>3,876</td><td>7,988</td><td>—</td><td>3,876</td><td>7,988</td><td>95</td><td>2018</td><td>1960 6300 W 95th Street</td></tr><tr><td>Oakland, CA</td><td>—</td><td>4,760</td><td>16,143</td><td>109</td><td>4,760</td><td>16,252</td><td>1,936</td><td>2014</td><td>2002 468 Perkins Street</td></tr><tr><td>Ocala, FL</td><td>—</td><td>1,340</td><td>10,564</td><td>—</td><td>1,340</td><td>10,564</td><td>2,767</td><td>2008</td><td>2009 2650 SE 18TH Avenue</td></tr><tr><td>Ogden, UT</td><td>—</td><td>384</td><td>2,228</td><td>—</td><td>384</td><td>2,228</td><td>310</td><td>2018</td><td>1987 400 East 5350 South</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="5">Gross Amount at Which Carried at Close of Period</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Year Acquired</td><td>Year Built</td></tr><tr><td>Oklahoma City, OK</td><td>—</td><td>590</td><td>7,513</td><td>—</td><td>590</td><td>7,513</td><td>2,175</td><td>2007</td><td>2008 13200 S. May Ave</td></tr><tr><td>Oklahoma City, OK</td><td>—</td><td>760</td><td>7,017</td><td>—</td><td>760</td><td>7,017</td><td>1,993</td><td>2007</td><td>2009 11320 N. Council Road</td></tr><tr><td>Olathe, KS</td><td>—</td><td>1,930</td><td>19,765</td><td>553</td><td>1,930</td><td>20,318</td><td>1,758</td><td>2016</td><td>2015 21250 W 151 Street</td></tr><tr><td>Omaha, NE</td><td>—</td><td>370</td><td>10,230</td><td>—</td><td>370</td><td>10,230</td><td>2,369</td><td>2010</td><td>1998 11909 Miracle Hills Dr.</td></tr><tr><td>Omaha, NE</td><td>—</td><td>380</td><td>8,769</td><td>—</td><td>380</td><td>8,769</td><td>2,144</td><td>2010</td><td>1999 5728 South 108th St.</td></tr><tr><td>Ona, WV</td><td>—</td><td>950</td><td>15,998</td><td>222</td><td>950</td><td>16,220</td><td>1,400</td><td>2015</td><td>2007 100 Weatherholt Drive</td></tr><tr><td>Oneonta, NY</td><td>—</td><td>80</td><td>5,020</td><td>—</td><td>80</td><td>5,020</td><td>1,442</td><td>2007</td><td>1996 1846 County Highway 48</td></tr><tr><td>Orange Park, FL</td><td>—</td><td>2,201</td><td>4,018</td><td>—</td><td>2,201</td><td>4,018</td><td>64</td><td>2018</td><td>1990 570 Wells Road</td></tr><tr><td>Orem, UT</td><td>—</td><td>2,150</td><td>24,107</td><td>—</td><td>2,150</td><td>24,107</td><td>2,021</td><td>2015</td><td>2014 250 East Center Street</td></tr><tr><td>Osage City, KS</td><td>—</td><td>50</td><td>1,700</td><td>142</td><td>50</td><td>1,842</td><td>183</td><td>2015</td><td>1996 1403 Laing St</td></tr><tr><td>Oswatomie, KS</td><td>—</td><td>130</td><td>2,970</td><td>136</td><td>130</td><td>3,106</td><td>283</td><td>2015</td><td>2003 1520 Parker Ave</td></tr><tr><td>Ottawa, KS</td><td>—</td><td>160</td><td>6,590</td><td>44</td><td>160</td><td>6,634</td><td>556</td><td>2015</td><td>2007 2250 S Elm St</td></tr><tr><td>Overland Park, KS</td><td>—</td><td>4,500</td><td>29,105</td><td>38,441</td><td>8,230</td><td>63,816</td><td>15,377</td><td>2010</td><td>1988 6101 W 119th St</td></tr><tr><td>Overland Park, KS</td><td>—</td><td>1,540</td><td>16,269</td><td>943</td><td>1,670</td><td>17,082</td><td>3,342</td><td>2012</td><td>1998 9201 Foster</td></tr><tr><td>Overland Park, KS</td><td>—</td><td>410</td><td>2,840</td><td>92</td><td>410</td><td>2,932</td><td>279</td><td>2015</td><td>2004 14430 Metcalf Ave</td></tr><tr><td>Overland Park, KS</td><td>—</td><td>1,300</td><td>25,311</td><td>677</td><td>1,300</td><td>25,988</td><td>2,229</td><td>2016</td><td>2015 7600 Antioch Road</td></tr><tr><td>Owasso, OK</td><td>—</td><td>215</td><td>1,380</td><td>—</td><td>215</td><td>1,380</td><td>801</td><td>1996</td><td>1996 12807 E. 86th Place N.</td></tr><tr><td>Owensboro, KY</td><td>—</td><td>225</td><td>13,275</td><td>—</td><td>225</td><td>13,275</td><td>5,120</td><td>2005</td><td>1964 1205 Leitchfield Rd.</td></tr><tr><td>Owenton, KY</td><td>—</td><td>100</td><td>2,400</td><td>—</td><td>100</td><td>2,400</td><td>1,108</td><td>2005</td><td>1979 905 Hwy. 127 N.</td></tr><tr><td>Oxford, MI</td><td>—</td><td>1,430</td><td>15,791</td><td>—</td><td>1,430</td><td>15,791</td><td>3,625</td><td>2010</td><td>2001 701 Market St</td></tr><tr><td>Palestine, TX</td><td>—</td><td>180</td><td>4,320</td><td>1,300</td><td>180</td><td>5,620</td><td>1,814</td><td>2006</td><td>2005 1625 W. Spring St.</td></tr><tr><td>Palm Beach Gardens, FL</td><td>—</td><td>2,082</td><td>6,624</td><td>—</td><td>2,082</td><td>6,624</td><td>87</td><td>2018</td><td>1991 11375 Prosperity Farms Road</td></tr><tr><td>Palm Coast, FL</td><td>—</td><td>870</td><td>10,957</td><td>—</td><td>870</td><td>10,957</td><td>2,730</td><td>2008</td><td>2010 50 Town Ct.</td></tr><tr><td>Palm Desert, CA</td><td>—</td><td>6,195</td><td>8,922</td><td>—</td><td>6,195</td><td>8,922</td><td>107</td><td>2018</td><td>1989 74350 Country Club Drive</td></tr><tr><td>Palm Harbor, FL</td><td>—</td><td>1,306</td><td>13,811</td><td>—</td><td>1,306</td><td>13,811</td><td>171</td><td>2018</td><td>1997 2895 Tampa Road</td></tr><tr><td>Palm Harbor, FL</td><td>—</td><td>3,281</td><td>22,457</td><td>—</td><td>3,281</td><td>22,457</td><td>273</td><td>2018</td><td>1990 2851 Tampa Road</td></tr><tr><td>Palos Heights, IL</td><td>—</td><td>1,225</td><td>12,457</td><td>—</td><td>1,225</td><td>12,457</td><td>141</td><td>2018</td><td>1999 7880 West College Drive</td></tr><tr><td>Palos Heights, IL</td><td>—</td><td>3,431</td><td>28,812</td><td>—</td><td>3,431</td><td>28,812</td><td>316</td><td>2018</td><td>1987 7850 West College Drive</td></tr><tr><td>Palos Heights, IL</td><td>—</td><td>2,590</td><td>7,647</td><td>—</td><td>2,590</td><td>7,647</td><td>87</td><td>2018</td><td>1996 11860 Southwest Hwy</td></tr><tr><td>Panama City Beach, FL</td><td>—</td><td>900</td><td>6,402</td><td>620</td><td>900</td><td>7,022</td><td>1,161</td><td>2011</td><td>2005 6012 Magnolia Beach Road</td></tr><tr><td>Paola, KS</td><td>—</td><td>190</td><td>5,610</td><td>59</td><td>190</td><td>5,669</td><td>483</td><td>2015</td><td>2000 601 N. East Street</td></tr><tr><td>Paris, TX</td><td>—</td><td>490</td><td>5,452</td><td>—</td><td>490</td><td>5,452</td><td>4,421</td><td>2005</td><td>2006 750 N Collegiate Dr</td></tr><tr><td>Parma, OH</td><td>—</td><td>960</td><td>12,722</td><td>—</td><td>960</td><td>12,722</td><td>155</td><td>2018</td><td>1998 9205 Sprague Road</td></tr><tr><td>Parma, OH</td><td>—</td><td>1,833</td><td>10,318</td><td>—</td><td>1,833</td><td>10,318</td><td>141</td><td>2018</td><td>2006 9055 West Sprague Road</td></tr><tr><td>Paultsboro, NJ</td><td>—</td><td>3,264</td><td>8,026</td><td>—</td><td>3,264</td><td>8,026</td><td>99</td><td>2018</td><td>1987 550 Jessup Road</td></tr><tr><td>Pella, IA</td><td>—</td><td>870</td><td>6,716</td><td>89</td><td>870</td><td>6,805</td><td>1,135</td><td>2012</td><td>2002 2602 Fifield Road</td></tr><tr><td>Perrysburg, OH</td><td>—</td><td>1,456</td><td>5,433</td><td>—</td><td>1,456</td><td>5,433</td><td>68</td><td>2018</td><td>1973 10540 Fremont Pike</td></tr><tr><td>Perrysburg, OH</td><td>—</td><td>1,213</td><td>7,110</td><td>—</td><td>1,213</td><td>7,110</td><td>82</td><td>2018</td><td>1978 10542 Fremont Pike</td></tr><tr><td>Petoskey, MI</td><td>—</td><td>860</td><td>14,452</td><td>—</td><td>860</td><td>14,452</td><td>3,152</td><td>2011</td><td>1997 965 Hager Dr.</td></tr><tr><td>Philadelphia, PA</td><td>—</td><td>2,930</td><td>10,433</td><td>3,536</td><td>2,930</td><td>13,969</td><td>3,206</td><td>2011</td><td>1952 1526 Lombard Street</td></tr><tr><td>Phillipsburg, NJ</td><td>—</td><td>800</td><td>21,175</td><td>238</td><td>800</td><td>21,413</td><td>4,650</td><td>2011</td><td>1992 290 Red School Lane</td></tr><tr><td>Phillipsburg, NJ</td><td>—</td><td>300</td><td>8,114</td><td>101</td><td>300</td><td>8,215</td><td>1,780</td><td>2011</td><td>1905 843 Wilbur Avenue</td></tr><tr><td>Pikesville, MD</td><td>—</td><td>—</td><td>2,488</td><td>—</td><td>—</td><td>2,488</td><td>27</td><td>2018</td><td>1998 8911 Reisterstown Road</td></tr><tr><td>Pikesville, MD</td><td>—</td><td>4,247</td><td>8,383</td><td>—</td><td>4,247</td><td>8,383</td><td>108</td><td>2018</td><td>1996 8909 Reisterstown Road</td></tr><tr><td>Pinehurst, NC</td><td>—</td><td>290</td><td>2,690</td><td>484</td><td>290</td><td>3,174</td><td>1,392</td><td>2003</td><td>1998 17 Regional Dr.</td></tr><tr><td>Piqua, OH</td><td>—</td><td>204</td><td>1,885</td><td>—</td><td>204</td><td>1,885</td><td>1,024</td><td>1997</td><td>1997 1744 W. High St.</td></tr><tr><td>Piscataway, NJ</td><td>—</td><td>3,100</td><td>33,501</td><td>—</td><td>3,100</td><td>33,501</td><td>1,423</td><td>2013</td><td>2017 10 Sterling Drive</td></tr><tr><td>Pittsburgh, PA</td><td>—</td><td>603</td><td>11,357</td><td>—</td><td>603</td><td>11,357</td><td>137</td><td>2018</td><td>1998 1125 Perry Highway</td></tr><tr><td>Pittsburgh, PA</td><td>—</td><td>1,005</td><td>15,164</td><td>—</td><td>1,005</td><td>15,164</td><td>177</td><td>2018</td><td>1997 505 Weyman Road</td></tr><tr><td>Pittsburgh, PA</td><td>—</td><td>1,140</td><td>3,166</td><td>—</td><td>1,140</td><td>3,166</td><td>37</td><td>2018</td><td>1962 550 South Negley Avenue</td></tr><tr><td>Pittsburgh, PA</td><td>—</td><td>994</td><td>3,790</td><td>—</td><td>994</td><td>3,790</td><td>63</td><td>2018</td><td>1986 2170 Rhine Street</td></tr><tr><td>Pittsburgh, PA</td><td>—</td><td>761</td><td>4,214</td><td>—</td><td>761</td><td>4,214</td><td>47</td><td>2018</td><td>1965 5609 Fifth Avenue</td></tr><tr><td>Pittsburgh, PA</td><td>—</td><td>1,480</td><td>9,715</td><td>—</td><td>1,480</td><td>9,715</td><td>128</td><td>2018</td><td>1986 1105 Perry Highway</td></tr><tr><td>Pittsburgh, PA</td><td>—</td><td>1,139</td><td>5,846</td><td>—</td><td>1,139</td><td>5,846</td><td>75</td><td>2018</td><td>1986 1848 Greentree Road</td></tr><tr><td>Pittsburgh, PA</td><td>—</td><td>1,750</td><td>8,572</td><td>6,322</td><td>1,750</td><td>14,894</td><td>3,340</td><td>2005</td><td>1998 100 Knoedler Rd.</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="5">Gross Amount at Which Carried at Close of Period</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Year Acquired</td><td>Year Built</td></tr><tr><td>Plainview, NY</td><td>—</td><td>3,990</td><td>11,969</td><td>1,186</td><td>3,990</td><td>13,155</td><td>2,774</td><td>2011</td><td>1963 150 Sunnyside Blvd</td></tr><tr><td>Plano, TX</td><td>—</td><td>1,840</td><td>20,152</td><td>560</td><td>1,840</td><td>20,712</td><td>1,579</td><td>2016</td><td>2016 3325 W Plano Parkway</td></tr><tr><td>Plattsmouth, NE</td><td>—</td><td>250</td><td>5,650</td><td>—</td><td>250</td><td>5,650</td><td>1,377</td><td>2010</td><td>1999 1913 E. Highway 34</td></tr><tr><td>Plymouth, MI</td><td>—</td><td>1,490</td><td>19,990</td><td>330</td><td>1,490</td><td>20,320</td><td>4,431</td><td>2010</td><td>1972 14707 Northville Rd</td></tr><tr><td>Potomac, MD</td><td>—</td><td>1,448</td><td>14,626</td><td>—</td><td>1,448</td><td>14,626</td><td>167</td><td>2018</td><td>1994 10718 Potomac Tennis Lane</td></tr><tr><td>Potomac, MD</td><td>—</td><td>4,119</td><td>14,921</td><td>—</td><td>4,119</td><td>14,921</td><td>176</td><td>2018</td><td>1988 10714 Potomac Tennis Lane</td></tr><tr><td>Pottstown, PA</td><td>—</td><td>984</td><td>4,565</td><td>—</td><td>984</td><td>4,565</td><td>58</td><td>2018</td><td>1907 724 North Charlotte Street</td></tr><tr><td>Pottsville, PA</td><td>—</td><td>171</td><td>3,560</td><td>—</td><td>171</td><td>3,560</td><td>42</td><td>2018</td><td>1976 420 Pulaski Drive</td></tr><tr><td>Prior Lake, MN</td><td>13,806</td><td>1,870</td><td>29,849</td><td>300</td><td>1,870</td><td>30,149</td><td>2,435</td><td>2015</td><td>2003 4685 Park Nicollet Avenue</td></tr><tr><td>Puyallup, WA</td><td>—</td><td>1,150</td><td>20,776</td><td>505</td><td>1,156</td><td>21,275</td><td>5,775</td><td>2010</td><td>1985 123 Fourth Ave. NW</td></tr><tr><td>Raleigh, NC</td><td>—</td><td>7,598</td><td>88,870</td><td>—</td><td>7,598</td><td>88,870</td><td>4,212</td><td>2008</td><td>2017 4030 Cardinal at North Hills St</td></tr><tr><td>Raleigh, NC</td><td>—</td><td>3,530</td><td>59,589</td><td>—</td><td>3,530</td><td>59,589</td><td>9,825</td><td>2012</td><td>2002 5301 Creedmoor Road</td></tr><tr><td>Raleigh, NC</td><td>—</td><td>2,580</td><td>16,837</td><td>—</td><td>2,580</td><td>16,837</td><td>2,965</td><td>2012</td><td>1988 7900 Creedmoor Road</td></tr><tr><td>Reading, PA</td><td>—</td><td>980</td><td>19,906</td><td>140</td><td>980</td><td>20,046</td><td>4,293</td><td>2011</td><td>1994 5501 Perkiomen Ave</td></tr><tr><td>Red Bank, NJ</td><td>—</td><td>1,050</td><td>21,275</td><td>586</td><td>1,050</td><td>21,861</td><td>4,176</td><td>2011</td><td>1997 One Hartford Dr.</td></tr><tr><td>Reidsville, NC</td><td>—</td><td>170</td><td>3,830</td><td>857</td><td>170</td><td>4,687</td><td>2,045</td><td>2002</td><td>1998 2931 Vance St.</td></tr><tr><td>Reno, NV</td><td>—</td><td>1,060</td><td>11,440</td><td>659</td><td>1,060</td><td>12,099</td><td>4,440</td><td>2004</td><td>1998 5165 Summit Ridge Road</td></tr><tr><td>Rexburg, ID</td><td>—</td><td>1,267</td><td>3,213</td><td>—</td><td>1,267</td><td>3,213</td><td>383</td><td>2018</td><td>1988 660 South 2nd West</td></tr><tr><td>Richardson, TX</td><td>—</td><td>1,468</td><td>12,979</td><td>—</td><td>1,468</td><td>12,979</td><td>154</td><td>2018</td><td>1999 410 Buckingham Road</td></tr><tr><td>Richmond, IN</td><td>—</td><td>700</td><td>14,222</td><td>393</td><td>700</td><td>14,615</td><td>1,256</td><td>2016</td><td>2015 400 Industries Road</td></tr><tr><td>Richmond, VA</td><td>—</td><td>—</td><td>12,000</td><td>—</td><td>250</td><td>11,750</td><td>2,018</td><td>2013</td><td>1989 2220 Edward Holland Drive</td></tr><tr><td>Richmond, VA</td><td>—</td><td>3,261</td><td>17,980</td><td>—</td><td>3,261</td><td>17,980</td><td>203</td><td>2018</td><td>1990 1719 Bellevue Avenue</td></tr><tr><td>Richmond, VA</td><td>—</td><td>1,046</td><td>8,235</td><td>—</td><td>1,046</td><td>8,235</td><td>100</td><td>2018</td><td>1966 2125 Hilliard Road</td></tr><tr><td>Ridgeland, MS</td><td>—</td><td>520</td><td>7,675</td><td>437</td><td>520</td><td>8,112</td><td>3,162</td><td>2003</td><td>1997 410 Orchard Park</td></tr><tr><td>Roanoke, VA</td><td>—</td><td>748</td><td>4,483</td><td>—</td><td>748</td><td>4,483</td><td>435</td><td>2018</td><td>1997 4355 Pheasant Ridge Rd</td></tr><tr><td>Rochdale, MA</td><td>—</td><td>—</td><td>7,100</td><td>—</td><td>690</td><td>6,410</td><td>1,039</td><td>2013</td><td>1994 111 Huntoon Memorial Highway</td></tr><tr><td>Rockville Centre, NY</td><td>—</td><td>4,290</td><td>20,310</td><td>932</td><td>4,290</td><td>21,242</td><td>4,259</td><td>2011</td><td>2002 260 Maple Ave</td></tr><tr><td>Rockwall, TX</td><td>—</td><td>2,220</td><td>17,650</td><td>—</td><td>2,220</td><td>17,650</td><td>1,590</td><td>2012</td><td>2014 720 E Ralph Hall Parkway</td></tr><tr><td>Romeoville, IL</td><td>—</td><td>1,895</td><td>—</td><td>—</td><td>1,895</td><td>—</td><td>—</td><td>2006</td><td>1990 Grand Haven Circle</td></tr><tr><td>Roseville, MN</td><td>—</td><td>2,140</td><td>24,679</td><td>100</td><td>2,140</td><td>24,779</td><td>2,037</td><td>2015</td><td>1989 2750 North Victoria Street</td></tr><tr><td>Roswell, GA</td><td>—</td><td>1,107</td><td>9,627</td><td>1,127</td><td>1,114</td><td>10,747</td><td>8,139</td><td>1997</td><td>1999 655 Mansell Rd.</td></tr><tr><td>Roswell, GA</td><td>—</td><td>2,080</td><td>6,486</td><td>1,130</td><td>2,380</td><td>7,316</td><td>1,645</td><td>2012</td><td>1997 75 Magnolia Street</td></tr><tr><td>Rugeley, UK</td><td>—</td><td>1,900</td><td>10,262</td><td>411</td><td>1,964</td><td>10,609</td><td>1,603</td><td>2013</td><td>2010 Horse Fair</td></tr><tr><td>Ruston, LA</td><td>—</td><td>710</td><td>9,790</td><td>—</td><td>710</td><td>9,790</td><td>2,133</td><td>2011</td><td>1988 1401 Ezelle St</td></tr><tr><td>S Holland, IL</td><td>—</td><td>1,423</td><td>8,910</td><td>—</td><td>1,423</td><td>8,910</td><td>108</td><td>2018</td><td>1997 2045 East 170th Street</td></tr><tr><td>Salem, OR</td><td>—</td><td>449</td><td>5,171</td><td>1</td><td>449</td><td>5,172</td><td>2,706</td><td>1999</td><td>1998 1355 Boone Rd. S.E.</td></tr><tr><td>Salisbury, NC</td><td>—</td><td>370</td><td>5,697</td><td>168</td><td>370</td><td>5,865</td><td>2,422</td><td>2003</td><td>1997 2201 Statesville Blvd.</td></tr><tr><td>San Angelo, TX</td><td>—</td><td>1,050</td><td>24,689</td><td>1,221</td><td>1,050</td><td>25,910</td><td>3,073</td><td>2014</td><td>1999 6101 Grand Court Road</td></tr><tr><td>San Antonio, TX</td><td>—</td><td>1,499</td><td>12,662</td><td>—</td><td>1,499</td><td>12,662</td><td>149</td><td>2018</td><td>2000 15290 Huebner Road</td></tr><tr><td>San Antonio, TX</td><td>—</td><td>—</td><td>17,303</td><td>—</td><td>—</td><td>17,303</td><td>7,781</td><td>2007</td><td>2007 8902 Floyd Curl Dr.</td></tr><tr><td>San Bernardino, CA</td><td>—</td><td>3,700</td><td>14,300</td><td>687</td><td>3,700</td><td>14,987</td><td>3,865</td><td>2008</td><td>1993 1760 W. 16th St.</td></tr><tr><td>San Diego, CA</td><td>—</td><td>—</td><td>22,003</td><td>1,845</td><td>—</td><td>23,848</td><td>6,068</td><td>2008</td><td>1992 555 Washington St.</td></tr><tr><td>Sand Springs, OK</td><td>—</td><td>910</td><td>19,654</td><td>—</td><td>910</td><td>19,654</td><td>3,346</td><td>2012</td><td>2002 4402 South 129th Avenue West</td></tr><tr><td>Sarasota, FL</td><td>—</td><td>475</td><td>3,175</td><td>—</td><td>475</td><td>3,175</td><td>1,917</td><td>1996</td><td>1995 8450 McIntosh Rd.</td></tr><tr><td>Sarasota, FL</td><td>—</td><td>4,101</td><td>11,208</td><td>—</td><td>4,101</td><td>11,208</td><td>212</td><td>2018</td><td>1993 5401 Sawyer Road</td></tr><tr><td>Sarasota, FL</td><td>—</td><td>1,370</td><td>4,084</td><td>—</td><td>1,370</td><td>4,084</td><td>49</td><td>2018</td><td>1968 3250 12th Street</td></tr><tr><td>Sarasota, FL</td><td>—</td><td>2,792</td><td>11,177</td><td>—</td><td>2,792</td><td>11,177</td><td>131</td><td>2018</td><td>1993 5511 Swift Road</td></tr><tr><td>Sarasota, FL</td><td>—</td><td>3,360</td><td>19,140</td><td>—</td><td>3,360</td><td>19,140</td><td>3,681</td><td>2011</td><td>2006 6150 Edgelake Drive</td></tr><tr><td>Sarasota, FL</td><td>—</td><td>443</td><td>9,699</td><td>—</td><td>443</td><td>9,699</td><td>120</td><td>2018</td><td>1998 5509 Swift Road</td></tr><tr><td>Scranton, PA</td><td>—</td><td>440</td><td>17,609</td><td>—</td><td>440</td><td>17,609</td><td>2,032</td><td>2014</td><td>2005 2741 Blvd. Ave</td></tr><tr><td>Scranton, PA</td><td>—</td><td>320</td><td>12,144</td><td>1</td><td>320</td><td>12,145</td><td>1,400</td><td>2014</td><td>2013 2751 Boulevard Ave</td></tr><tr><td>Seminole, FL</td><td>—</td><td>1,165</td><td>8,977</td><td>—</td><td>1,165</td><td>8,977</td><td>113</td><td>2018</td><td>1998 9300 Antilles Drive</td></tr><tr><td>Seven Fields, PA</td><td>—</td><td>484</td><td>4,663</td><td>59</td><td>484</td><td>4,722</td><td>2,475</td><td>1999</td><td>1999 500 Seven Fields Blvd.</td></tr><tr><td>Severna Park, MD</td><td>—</td><td>2,120</td><td>31,273</td><td>808</td><td>2,120</td><td>32,081</td><td>6,616</td><td>2011</td><td>1981 24 Truckhouse Road</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="5">Gross Amount at Which Carried at Close of Period</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Year Acquired</td><td>Year Built</td></tr><tr><td>Sewell, NJ</td><td>—</td><td>3,127</td><td>14,095</td><td>—</td><td>3,127</td><td>14,095</td><td>188</td><td>2018</td><td>2010 378 Fries Mill Road</td></tr><tr><td>Shawnee, OK</td><td>—</td><td>80</td><td>1,400</td><td>—</td><td>80</td><td>1,400</td><td>837</td><td>1996</td><td>1995 3947 Kickapoo</td></tr><tr><td>Shelbyville, KY</td><td>—</td><td>630</td><td>3,870</td><td>630</td><td>630</td><td>4,500</td><td>1,579</td><td>2005</td><td>1965 1871 Midland Trail</td></tr><tr><td>Sherman, TX</td><td>—</td><td>700</td><td>5,221</td><td>—</td><td>700</td><td>5,221</td><td>1,696</td><td>2005</td><td>2006 1011 E. Pecan Grove Rd.</td></tr><tr><td>Silver Spring, MD</td><td>—</td><td>1,469</td><td>10,395</td><td>—</td><td>1,469</td><td>10,395</td><td>122</td><td>2018</td><td>1995 2505 Musgrove Road</td></tr><tr><td>Silver Spring, MD</td><td>—</td><td>4,678</td><td>11,683</td><td>—</td><td>4,678</td><td>11,683</td><td>146</td><td>2018</td><td>1990 2501 Musgrove Road</td></tr><tr><td>Silvis, IL</td><td>—</td><td>880</td><td>16,420</td><td>139</td><td>880</td><td>16,559</td><td>3,691</td><td>2010</td><td>2005 1900 10th St.</td></tr><tr><td>Sinking Spring, PA</td><td>—</td><td>1,393</td><td>19,848</td><td>—</td><td>1,393</td><td>19,848</td><td>231</td><td>2018</td><td>1982 3000 Windmill Road</td></tr><tr><td>Sittingbourne, UK</td><td>—</td><td>1,357</td><td>6,539</td><td>267</td><td>1,403</td><td>6,760</td><td>715</td><td>2014</td><td>1997 200 London Road</td></tr><tr><td>Smithfield, NC</td><td>—</td><td>290</td><td>5,680</td><td>—</td><td>290</td><td>5,680</td><td>2,363</td><td>2003</td><td>1998 830 Berkshire Rd.</td></tr><tr><td>Smithfield, NC</td><td>—</td><td>360</td><td>8,216</td><td>—</td><td>360</td><td>8,216</td><td>946</td><td>2014</td><td>1999 250 Highway 210 West</td></tr><tr><td>South Bend, IN</td><td>—</td><td>670</td><td>17,770</td><td>—</td><td>670</td><td>17,770</td><td>2,128</td><td>2014</td><td>2014 52565 State Road 933</td></tr><tr><td>South Point, OH</td><td>—</td><td>1,135</td><td>9,390</td><td>—</td><td>1,135</td><td>9,390</td><td>109</td><td>2018</td><td>1984 7743 County Road 1</td></tr><tr><td>Southampton, UK</td><td>—</td><td>1,519</td><td>16,041</td><td>—</td><td>1,519</td><td>16,041</td><td>541</td><td>2017</td><td>2013 Botley Road, Park Gate</td></tr><tr><td>Southbury, CT</td><td>—</td><td>1,860</td><td>23,613</td><td>958</td><td>1,860</td><td>24,571</td><td>4,939</td><td>2011</td><td>2001 655 Main St</td></tr><tr><td>Spokane, WA</td><td>—</td><td>3,200</td><td>25,064</td><td>284</td><td>3,200</td><td>25,348</td><td>6,895</td><td>2013</td><td>2001 3117 E. Chaser Lane</td></tr><tr><td>Spokane, WA</td><td>—</td><td>2,580</td><td>25,342</td><td>195</td><td>2,580</td><td>25,537</td><td>5,958</td><td>2013</td><td>1999 1110 E. Westview Ct.</td></tr><tr><td>Spokane, WA</td><td>—</td><td>2,649</td><td>11,703</td><td>—</td><td>2,649</td><td>11,703</td><td>138</td><td>2018</td><td>1985 6025 North Assembly Street</td></tr><tr><td>Springfield, IL</td><td>—</td><td>—</td><td>10,100</td><td>—</td><td>768</td><td>9,332</td><td>2,107</td><td>2013</td><td>2010 701 North Walnut Street</td></tr><tr><td>Springfield, IL</td><td>—</td><td>990</td><td>13,378</td><td>1,085</td><td>990</td><td>14,463</td><td>1,707</td><td>2014</td><td>2013 3089 Old Jacksonville Road</td></tr><tr><td>St. Louis, MO</td><td>—</td><td>1,890</td><td>12,390</td><td>787</td><td>1,890</td><td>13,177</td><td>2,691</td><td>2010</td><td>1963 6543 Chippewa St</td></tr><tr><td>St. Paul, MN</td><td>—</td><td>2,100</td><td>33,019</td><td>100</td><td>2,100</td><td>33,119</td><td>2,698</td><td>2015</td><td>1996 750 Mississippi River</td></tr><tr><td>Stafford, UK</td><td>—</td><td>2,009</td><td>8,238</td><td>—</td><td>2,009</td><td>8,238</td><td>499</td><td>2014</td><td>2016 Stone Road</td></tr><tr><td>Stamford, UK</td><td>—</td><td>1,820</td><td>3,238</td><td>171</td><td>1,881</td><td>3,348</td><td>378</td><td>2014</td><td>1998 Priory Road</td></tr><tr><td>Statesville, NC</td><td>—</td><td>150</td><td>1,447</td><td>266</td><td>150</td><td>1,713</td><td>749</td><td>2003</td><td>1990 2441 E. Broad St.</td></tr><tr><td>Statesville, NC</td><td>—</td><td>310</td><td>6,183</td><td>8</td><td>310</td><td>6,191</td><td>2,514</td><td>2003</td><td>1996 2806 Peachtree Place</td></tr><tr><td>Statesville, NC</td><td>—</td><td>140</td><td>3,627</td><td>—</td><td>140</td><td>3,627</td><td>1,503</td><td>2003</td><td>1999 2814 Peachtree Rd.</td></tr><tr><td>Staunton, VA</td><td>—</td><td>899</td><td>6,391</td><td>—</td><td>899</td><td>6,391</td><td>432</td><td>2018</td><td>1999 1410 N Augusta St</td></tr><tr><td>Sterling Heights, MI</td><td>—</td><td>790</td><td>10,787</td><td>—</td><td>790</td><td>10,787</td><td>128</td><td>2018</td><td>1996 11095 East Fourteen Mile Road</td></tr><tr><td>Sterling Heights, MI</td><td>—</td><td>1,583</td><td>15,639</td><td>—</td><td>1,583</td><td>15,639</td><td>188</td><td>2018</td><td>2013 38200 Schoenherr Road</td></tr><tr><td>Stillwater, OK</td><td>—</td><td>80</td><td>1,400</td><td>—</td><td>80</td><td>1,400</td><td>839</td><td>1995</td><td>1995 1616 McElroy Rd.</td></tr><tr><td>Stratford-upon-Avon, UK</td><td>—</td><td>790</td><td>14,508</td><td>517</td><td>816</td><td>14,999</td><td>1,443</td><td>2015</td><td>2012 Scholars Lane</td></tr><tr><td>Stroudsburg, PA</td><td>—</td><td>340</td><td>16,313</td><td>—</td><td>340</td><td>16,313</td><td>2,096</td><td>2014</td><td>2011 370 Whitestone Corner Road</td></tr><tr><td>Summit, NJ</td><td>—</td><td>3,080</td><td>14,152</td><td>—</td><td>3,080</td><td>14,152</td><td>3,027</td><td>2011</td><td>2001 41 Springfield Avenue</td></tr><tr><td>Sun City West, AZ</td><td>—</td><td>1,250</td><td>21,778</td><td>600</td><td>1,250</td><td>22,378</td><td>4,357</td><td>2012</td><td>1998 13810 West Sandridge Drive</td></tr><tr><td>Sunbury, PA</td><td>—</td><td>695</td><td>7,246</td><td>—</td><td>695</td><td>7,246</td><td>82</td><td>2018</td><td>1981 800 Court Street Circle</td></tr><tr><td>Sunninghill, UK</td><td>—</td><td>11,632</td><td>42,233</td><td>—</td><td>11,632</td><td>42,233</td><td>1,689</td><td>2014</td><td>2017 Bagshot Road</td></tr><tr><td>Sunnyvale, CA</td><td>—</td><td>4,946</td><td>22,131</td><td>—</td><td>4,946</td><td>22,131</td><td>251</td><td>2018</td><td>1990 1150 Tilton Drive</td></tr><tr><td>Superior, WI</td><td>—</td><td>1,020</td><td>13,735</td><td>6,159</td><td>1,020</td><td>19,894</td><td>2,909</td><td>2009</td><td>2010 1915 North 34th Street</td></tr><tr><td>Tacoma, WA</td><td>—</td><td>2,522</td><td>8,576</td><td>—</td><td>2,522</td><td>8,576</td><td>99</td><td>2018</td><td>1984 5601 South Orchard Southstreet</td></tr><tr><td>Tampa, FL</td><td>—</td><td>1,315</td><td>6,913</td><td>—</td><td>1,315</td><td>6,913</td><td>94</td><td>2018</td><td>1999 14950 Casey Road</td></tr><tr><td>Terre Haute, IN</td><td>—</td><td>1,370</td><td>18,016</td><td>—</td><td>1,370</td><td>18,016</td><td>1,936</td><td>2015</td><td>2015 395 8th Avenue</td></tr><tr><td>Texarkana, TX</td><td>—</td><td>192</td><td>1,403</td><td>—</td><td>192</td><td>1,403</td><td>814</td><td>1996</td><td>1996 4204 Moores Lane</td></tr><tr><td>The Villages, FL</td><td>—</td><td>1,035</td><td>7,446</td><td>—</td><td>1,035</td><td>7,446</td><td>1,103</td><td>2013</td><td>2014 2450 Parr Drive</td></tr><tr><td>Thomasville, GA</td><td>—</td><td>530</td><td>12,520</td><td>540</td><td>530</td><td>13,060</td><td>2,093</td><td>2011</td><td>2006 423 Covington Avenue</td></tr><tr><td>Three Rivers, MI</td><td>—</td><td>1,258</td><td>2,761</td><td>—</td><td>1,258</td><td>2,761</td><td>43</td><td>2018</td><td>1976 517 South Erie Southwest</td></tr><tr><td>Tomball, TX</td><td>—</td><td>1,050</td><td>13,300</td><td>840</td><td>1,050</td><td>14,140</td><td>2,805</td><td>2011</td><td>2001 1221 Graham Dr</td></tr><tr><td>Tonganoxie, KS</td><td>—</td><td>310</td><td>3,690</td><td>76</td><td>310</td><td>3,766</td><td>353</td><td>2015</td><td>2009 120 W 8th St</td></tr><tr><td>Topeka, KS</td><td>—</td><td>260</td><td>12,712</td><td>—</td><td>260</td><td>12,712</td><td>2,236</td><td>2012</td><td>2011 1931 Southwest Arvonia Place</td></tr><tr><td>Towson, MD</td><td>—</td><td>1,180</td><td>13,280</td><td>195</td><td>1,180</td><td>13,475</td><td>2,974</td><td>2011</td><td>1973 7700 York Road</td></tr><tr><td>Towson, MD</td><td>—</td><td>1,715</td><td>13,115</td><td>—</td><td>1,715</td><td>13,115</td><td>154</td><td>2018</td><td>2000 8101 Bellona Avenue</td></tr><tr><td>Towson, MD</td><td>—</td><td>3,100</td><td>6,468</td><td>—</td><td>3,100</td><td>6,468</td><td>73</td><td>2018</td><td>1960 509 East Joppa Road</td></tr><tr><td>Towson, MD</td><td>—</td><td>4,527</td><td>3,128</td><td>—</td><td>4,527</td><td>3,128</td><td>44</td><td>2018</td><td>1970 7001 North Charles Street</td></tr><tr><td>Troy, MI</td><td>—</td><td>1,381</td><td>24,452</td><td>—</td><td>1,381</td><td>24,452</td><td>275</td><td>2018</td><td>2006 925 West South Boulevard</td></tr><tr><td>Troy, OH</td><td>—</td><td>200</td><td>2,000</td><td>4,254</td><td>200</td><td>6,254</td><td>2,177</td><td>1997</td><td>1997 81 S. Stanfield Rd.</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="5">Gross Amount at Which Carried at Close of Period</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td>Year Acquired</td><td>Year Built</td></tr><tr><td>Trumbull, CT</td><td>—</td><td>4,440</td><td>43,384</td><td>—</td><td>4,440</td><td>43,384</td><td>8,857</td><td>2011</td><td>2001 6949 Main Street</td></tr><tr><td>Tucson, AZ</td><td>—</td><td>830</td><td>6,179</td><td>3,370</td><td>830</td><td>9,549</td><td>1,678</td><td>2012</td><td>1997 5660 N. Kolb Road</td></tr><tr><td>Tulsa, OK</td><td>—</td><td>3,003</td><td>6,025</td><td>20</td><td>3,003</td><td>6,045</td><td>3,553</td><td>2006</td><td>1992 3219 S. 79th E. Ave.</td></tr><tr><td>Tulsa, OK</td><td>—</td><td>1,390</td><td>7,110</td><td>1,102</td><td>1,390</td><td>8,212</td><td>1,986</td><td>2010</td><td>1998 7220 S. Yale Ave.</td></tr><tr><td>Tulsa, OK</td><td>—</td><td>1,320</td><td>10,087</td><td>—</td><td>1,320</td><td>10,087</td><td>1,825</td><td>2011</td><td>2012 7902 South Mingo Road East</td></tr><tr><td>Tulsa, OK</td><td>—</td><td>1,100</td><td>27,007</td><td>—</td><td>1,100</td><td>27,007</td><td>1,388</td><td>2015</td><td>2017 18001 East 51st Street</td></tr><tr><td>Tulsa, OK</td><td>13,000</td><td>1,752</td><td>28,421</td><td>—</td><td>1,752</td><td>28,421</td><td>1,215</td><td>2017</td><td>2014 701 W 71st Street South</td></tr><tr><td>Tulsa, OK</td><td>—</td><td>890</td><td>9,410</td><td>—</td><td>890</td><td>9,410</td><td>308</td><td>2017</td><td>2009 7210 South Yale Avenue</td></tr><tr><td>Twinsburg, OH</td><td>—</td><td>1,446</td><td>5,921</td><td>—</td><td>1,446</td><td>5,921</td><td>77</td><td>2018</td><td>2014 8551 Darrow Road</td></tr><tr><td>Tyler, TX</td><td>—</td><td>650</td><td>5,268</td><td>—</td><td>650</td><td>5,268</td><td>1,651</td><td>2006</td><td>2007 5550 Old Jacksonville Hwy.</td></tr><tr><td>Union, SC</td><td>—</td><td>1,932</td><td>2,374</td><td>—</td><td>1,932</td><td>2,374</td><td>43</td><td>2018</td><td>1981 709 Rice Avenue</td></tr><tr><td>Valparaiso, IN</td><td>—</td><td>112</td><td>2,558</td><td>—</td><td>112</td><td>2,558</td><td>1,206</td><td>2001</td><td>1998 2601 Valparaiso St.</td></tr><tr><td>Valparaiso, IN</td><td>—</td><td>108</td><td>2,962</td><td>—</td><td>108</td><td>2,962</td><td>1,379</td><td>2001</td><td>1999 2501 Valparaiso St.</td></tr><tr><td>Vancouver, WA</td><td>—</td><td>2,503</td><td>28,401</td><td>—</td><td>2,503</td><td>28,401</td><td>316</td><td>2018</td><td>2011 2811 N.E. 139th Street</td></tr><tr><td>Venice, FL</td><td>—</td><td>1,150</td><td>10,674</td><td>—</td><td>1,150</td><td>10,674</td><td>2,717</td><td>2008</td><td>2009 1600 Center Rd.</td></tr><tr><td>Venice, FL</td><td>—</td><td>2,246</td><td>10,097</td><td>—</td><td>2,246</td><td>10,097</td><td>126</td><td>2018</td><td>1997 1450 East Venice Avenue</td></tr><tr><td>Vero Beach, FL</td><td>—</td><td>263</td><td>3,187</td><td>—</td><td>263</td><td>3,187</td><td>1,474</td><td>2001</td><td>1999 420 4th Ct.</td></tr><tr><td>Vero Beach, FL</td><td>—</td><td>297</td><td>3,263</td><td>—</td><td>297</td><td>3,263</td><td>1,518</td><td>2001</td><td>1996 410 4th Ct.</td></tr><tr><td>Virginia Beach, VA</td><td>—</td><td>1,540</td><td>22,593</td><td>—</td><td>1,540</td><td>22,593</td><td>2,639</td><td>2014</td><td>1993 5520 Indian River Rd</td></tr><tr><td>Voorhees, NJ</td><td>—</td><td>1,800</td><td>37,299</td><td>671</td><td>1,800</td><td>37,970</td><td>8,097</td><td>2011</td><td>1965 2601 Evesham Road</td></tr><tr><td>Voorhees, NJ</td><td>—</td><td>1,900</td><td>26,040</td><td>894</td><td>1,900</td><td>26,934</td><td>5,768</td><td>2011</td><td>1985 3001 Evesham Road</td></tr><tr><td>Voorhees, NJ</td><td>—</td><td>3,100</td><td>25,950</td><td>26</td><td>3,100</td><td>25,976</td><td>4,484</td><td>2011</td><td>2013 113 South Route 73</td></tr><tr><td>Voorhees, NJ</td><td>—</td><td>2,193</td><td>6,992</td><td>—</td><td>2,193</td><td>6,992</td><td>91</td><td>2018</td><td>2006 1086 Dumont Circle</td></tr><tr><td>W Palm Beach, FL</td><td>—</td><td>1,175</td><td>8,297</td><td>—</td><td>1,175</td><td>8,297</td><td>106</td><td>2018</td><td>1996 2330 Village Boulevard</td></tr><tr><td>W Palm Beach, FL</td><td>—</td><td>1,921</td><td>5,733</td><td>—</td><td>1,921</td><td>5,733</td><td>71</td><td>2018</td><td>1996 2300 Village Boulevard</td></tr><tr><td>Wabash, IN</td><td>—</td><td>670</td><td>14,588</td><td>1</td><td>670</td><td>14,589</td><td>1,825</td><td>2014</td><td>2013 20 John Kissinger Drive</td></tr><tr><td>Waconia, MN</td><td>—</td><td>890</td><td>14,726</td><td>4,495</td><td>890</td><td>19,221</td><td>3,580</td><td>2011</td><td>2005 500 Cherry Street</td></tr><tr><td>Wake Forest, NC</td><td>—</td><td>200</td><td>3,003</td><td>1,742</td><td>200</td><td>4,745</td><td>2,308</td><td>1998</td><td>1999 611 S. Brooks St.</td></tr><tr><td>Wallingford, PA</td><td>—</td><td>1,356</td><td>6,489</td><td>—</td><td>1,356</td><td>6,489</td><td>86</td><td>2018</td><td>1930 115 South Providence Road</td></tr><tr><td>Walnut Creek, CA</td><td>—</td><td>4,358</td><td>18,413</td><td>—</td><td>4,358</td><td>18,413</td><td>214</td><td>2018</td><td>1997 1975 Tice Valley Boulevard</td></tr><tr><td>Walnut Creek, CA</td><td>—</td><td>5,394</td><td>39,096</td><td>—</td><td>5,394</td><td>39,096</td><td>432</td><td>2018</td><td>1990 1226 Rossmoor Parkway</td></tr><tr><td>Walsall, UK</td><td>—</td><td>1,184</td><td>8,562</td><td>329</td><td>1,224</td><td>8,851</td><td>902</td><td>2015</td><td>2015 Little Aston Road</td></tr><tr><td>Wamego, KS</td><td>—</td><td>40</td><td>2,510</td><td>57</td><td>40</td><td>2,567</td><td>223</td><td>2015</td><td>1996 1607 4th St</td></tr><tr><td>Wareham, MA</td><td>—</td><td>875</td><td>10,313</td><td>1,701</td><td>875</td><td>12,014</td><td>5,527</td><td>2002</td><td>1989 50 Indian Neck Rd.</td></tr><tr><td>Warren, NJ</td><td>—</td><td>2,000</td><td>30,810</td><td>1,073</td><td>2,000</td><td>31,883</td><td>6,023</td><td>2011</td><td>1999 274 King George Rd</td></tr><tr><td>Waterloo, IA</td><td>—</td><td>605</td><td>3,031</td><td>—</td><td>605</td><td>3,031</td><td>39</td><td>2018</td><td>1964 201 West Ridgeway Avenue</td></tr><tr><td>Waukee, IA</td><td>—</td><td>1,870</td><td>31,878</td><td>1,075</td><td>1,870</td><td>32,953</td><td>5,402</td><td>2012</td><td>2007 1650 SE Holiday Crest Circle</td></tr><tr><td>Waxahachie, TX</td><td>—</td><td>650</td><td>5,763</td><td>—</td><td>650</td><td>5,763</td><td>1,680</td><td>2007</td><td>2008 1329 Brown St.</td></tr><tr><td>Wayne, NJ</td><td>—</td><td>1,427</td><td>16,751</td><td>—</td><td>1,427</td><td>16,751</td><td>237</td><td>2018</td><td>1998 800 Hamburg Turnpike</td></tr><tr><td>Weatherford, TX</td><td>—</td><td>660</td><td>5,261</td><td>—</td><td>660</td><td>5,261</td><td>1,662</td><td>2006</td><td>2007 1818 Martin Drive</td></tr><tr><td>Wellingborough, UK</td><td>—</td><td>1,480</td><td>5,724</td><td>243</td><td>1,530</td><td>5,917</td><td>681</td><td>2015</td><td>2015 159 Northampton</td></tr><tr><td>West Bend, WI</td><td>—</td><td>620</td><td>17,790</td><td>38</td><td>620</td><td>17,828</td><td>3,310</td><td>2010</td><td>2011 2130 Continental Dr</td></tr><tr><td>West Des Moines, IA</td><td>—</td><td>828</td><td>5,104</td><td>—</td><td>828</td><td>5,104</td><td>66</td><td>2018</td><td>2006 5010 Grand Ridge Drive</td></tr><tr><td>West Orange, NJ</td><td>—</td><td>1,347</td><td>20,467</td><td>—</td><td>1,347</td><td>20,467</td><td>274</td><td>2018</td><td>1998 510 Prospect Avenue</td></tr><tr><td>West Reading, PA</td><td>—</td><td>890</td><td>12,122</td><td>—</td><td>890</td><td>12,122</td><td>133</td><td>2018</td><td>1975 425 Buttonwood Street</td></tr><tr><td>Westerville, OH</td><td>—</td><td>740</td><td>8,287</td><td>3,105</td><td>740</td><td>11,392</td><td>9,722</td><td>1998</td><td>2001 690 Cooper Rd.</td></tr><tr><td>Westerville, OH</td><td>—</td><td>1,420</td><td>5,373</td><td>—</td><td>1,420</td><td>5,373</td><td>66</td><td>2018</td><td>1982 1060 Eastwind Drive</td></tr><tr><td>Westerville, OH</td><td>—</td><td>1,582</td><td>10,282</td><td>—</td><td>1,582</td><td>10,282</td><td>128</td><td>2018</td><td>1980 215 Huber Village Boulevard</td></tr><tr><td>Westfield, IN</td><td>—</td><td>890</td><td>15,964</td><td>1</td><td>890</td><td>15,965</td><td>1,981</td><td>2014</td><td>2013 937 E. 186th Street</td></tr><tr><td>Westfield, NJ</td><td>—</td><td>2,270</td><td>16,589</td><td>497</td><td>2,270</td><td>17,086</td><td>4,001</td><td>2011</td><td>1970 1515 Lamberts Mill Road</td></tr><tr><td>Westlake, OH</td><td>—</td><td>855</td><td>11,966</td><td>—</td><td>855</td><td>11,966</td><td>143</td><td>2018</td><td>1997 28400 Center Ridge Road</td></tr><tr><td>Weston Super Mare, UK</td><td>—</td><td>2,517</td><td>7,054</td><td>324</td><td>2,602</td><td>7,293</td><td>1,047</td><td>2013</td><td>2011 141b Milton Road</td></tr><tr><td>Wheaton, MD</td><td>—</td><td>3,864</td><td>3,790</td><td>—</td><td>3,864</td><td>3,790</td><td>48</td><td>2018</td><td>1961 11901 Georgia Avenue</td></tr><tr><td>Whippany, NJ</td><td>—</td><td>1,571</td><td>14,982</td><td>—</td><td>1,571</td><td>14,982</td><td>180</td><td>2018</td><td>2000 18 Eden Lane</td></tr><tr><td>White Lake, MI</td><td>—</td><td>2,920</td><td>20,179</td><td>92</td><td>2,920</td><td>20,271</td><td>4,516</td><td>2010</td><td>2000 935 Union Lake Rd</td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td></tr><tr><td>Wichita, KS</td><td>—</td><td>1,400</td><td>11,000</td><td>—</td><td>1,400</td><td>11,000</td><td>4,844</td><td>2006</td><td>1997</td><td>505 North Maize Road</td><td></td></tr><tr><td>Wichita, KS</td><td>—</td><td>860</td><td>8,873</td><td>—</td><td>860</td><td>8,873</td><td>1,792</td><td>2011</td><td>2012</td><td>10604 E 13th Street North</td><td></td></tr><tr><td>Wichita, KS</td><td>12,779</td><td>630</td><td>19,747</td><td>—</td><td>630</td><td>19,747</td><td>3,328</td><td>2012</td><td>2009</td><td>2050 North Webb Road</td><td></td></tr><tr><td>Wichita, KS</td><td>—</td><td>260</td><td>2,240</td><td>129</td><td>260</td><td>2,369</td><td>207</td><td>2015</td><td>1992</td><td>900 N Bayshore Dr</td><td></td></tr><tr><td>Wichita, KS</td><td>—</td><td>900</td><td>10,134</td><td>—</td><td>900</td><td>10,134</td><td>1,932</td><td>2011</td><td>2012</td><td>10600 E 13th Street North</td><td></td></tr><tr><td>Wilkes-Barre, PA</td><td>—</td><td>753</td><td>3,457</td><td>—</td><td>753</td><td>3,457</td><td>48</td><td>2018</td><td>1970</td><td>1548 Sans Souci Parkway</td><td></td></tr><tr><td>Williamsburg, VA</td><td>—</td><td>1,187</td><td>5,728</td><td>—</td><td>1,187</td><td>5,728</td><td>375</td><td>2018</td><td>2000</td><td>1811 Jamestown Rd</td><td></td></tr><tr><td>Williamsport, PA</td><td>—</td><td>919</td><td>6,926</td><td>—</td><td>919</td><td>6,926</td><td>83</td><td>2018</td><td>1976</td><td>300 Leader Drive</td><td></td></tr><tr><td>Williamsport, PA</td><td>—</td><td>780</td><td>1,899</td><td>—</td><td>780</td><td>1,899</td><td>30</td><td>2018</td><td>1972</td><td>101 Leader Drive</td><td></td></tr><tr><td>Williamstown, KY</td><td>—</td><td>70</td><td>6,430</td><td>—</td><td>70</td><td>6,430</td><td>2,501</td><td>2005</td><td>1987</td><td>201 Kimberly Lane</td><td></td></tr><tr><td>Willoughby, OH</td><td>—</td><td>1,774</td><td>8,655</td><td>—</td><td>1,774</td><td>8,655</td><td>105</td><td>2018</td><td>1974</td><td>37603 Euclid Avenue</td><td></td></tr><tr><td>Wilmington, DE</td><td>—</td><td>800</td><td>9,494</td><td>114</td><td>800</td><td>9,608</td><td>2,193</td><td>2011</td><td>1970</td><td>810 S Broom Street</td><td></td></tr><tr><td>Wilmington, DE</td><td>—</td><td>1,376</td><td>13,454</td><td>—</td><td>1,376</td><td>13,454</td><td>159</td><td>2018</td><td>1998</td><td>700 1/2 Foulk Road</td><td></td></tr><tr><td>Wilmington, DE</td><td>—</td><td>2,843</td><td>36,959</td><td>—</td><td>2,843</td><td>36,959</td><td>419</td><td>2018</td><td>1988</td><td>5651 Limestone Road</td><td></td></tr><tr><td>Wilmington, DE</td><td>—</td><td>2,266</td><td>9,503</td><td>—</td><td>2,266</td><td>9,503</td><td>115</td><td>2018</td><td>1984</td><td>700 Foulk Road</td><td></td></tr><tr><td>Wilmington, NC</td><td>—</td><td>210</td><td>2,991</td><td>—</td><td>210</td><td>2,991</td><td>1,560</td><td>1999</td><td>1999</td><td>3501 Converse Dr.</td><td></td></tr><tr><td>Wilmington, NC</td><td>—</td><td>400</td><td>15,355</td><td>—</td><td>400</td><td>15,355</td><td>1,854</td><td>2014</td><td>2012</td><td>3828 Independence Blvd</td><td></td></tr><tr><td>Windsor, VA</td><td>—</td><td>1,148</td><td>6,514</td><td>—</td><td>1,148</td><td>6,514</td><td>443</td><td>2018</td><td>1999</td><td>23352 Courthouse Hwy</td><td></td></tr><tr><td>Winston-Salem, NC</td><td>—</td><td>360</td><td>2,514</td><td>459</td><td>360</td><td>2,973</td><td>1,268</td><td>2003</td><td>1996</td><td>2980 Reynolds Rd.</td><td></td></tr><tr><td>Winter Garden, FL</td><td>—</td><td>1,110</td><td>7,937</td><td>—</td><td>1,110</td><td>7,937</td><td>1,382</td><td>2012</td><td>2013</td><td>720 Roper Road</td><td></td></tr><tr><td>Winter Springs, FL</td><td>—</td><td>1,152</td><td>14,826</td><td>—</td><td>1,152</td><td>14,826</td><td>173</td><td>2018</td><td>1999</td><td>1057 Willa Springs Drive</td><td></td></tr><tr><td>Witherwack, UK</td><td>—</td><td>944</td><td>6,915</td><td>266</td><td>976</td><td>7,149</td><td>1,027</td><td>2013</td><td>2009</td><td>Whitchurch Road</td><td></td></tr><tr><td>Wolverhampton, UK</td><td>—</td><td>1,573</td><td>6,678</td><td>279</td><td>1,626</td><td>6,904</td><td>1,000</td><td>2013</td><td>2011</td><td>378 Prestonwood Road</td><td></td></tr><tr><td>Woodbury, MN</td><td>—</td><td>1,317</td><td>20,935</td><td>298</td><td>1,317</td><td>21,233</td><td>1,057</td><td>2017</td><td>2015</td><td>2195 Century Avenue South</td><td></td></tr><tr><td>Woodstock, VA</td><td>—</td><td>594</td><td>5,108</td><td>—</td><td>594</td><td>5,108</td><td>338</td><td>2018</td><td>2001</td><td>803 S Main St</td><td></td></tr><tr><td>Worcester, MA</td><td>—</td><td>3,500</td><td>54,099</td><td>—</td><td>3,500</td><td>54,099</td><td>13,035</td><td>2007</td><td>2009</td><td>101 Barry Road</td><td></td></tr><tr><td>Worcester, MA</td><td>—</td><td>2,300</td><td>9,060</td><td>6,000</td><td>2,300</td><td>15,060</td><td>4,007</td><td>2008</td><td>1993</td><td>378 Plantation St.</td><td></td></tr><tr><td>Yardley, PA</td><td>—</td><td>773</td><td>14,918</td><td>—</td><td>773</td><td>14,918</td><td>184</td><td>2018</td><td>1995</td><td>493 Stony Hill Road</td><td></td></tr><tr><td>Yardley, PA</td><td>—</td><td>1,561</td><td>9,442</td><td>—</td><td>1,561</td><td>9,442</td><td>139</td><td>2018</td><td>1990</td><td>1480 Oxford Valley Road</td><td></td></tr><tr><td>Yeadon, PA</td><td>—</td><td>1,075</td><td>10,694</td><td>—</td><td>1,075</td><td>10,694</td><td>121</td><td>2018</td><td>1963</td><td>14 Lincoln Avenue</td><td></td></tr><tr><td>York, PA</td><td>—</td><td>976</td><td>9,357</td><td>—</td><td>976</td><td>9,357</td><td>112</td><td>2018</td><td>1972</td><td>200 Pauine Drive</td><td></td></tr><tr><td>York, PA</td><td>—</td><td>1,050</td><td>4,212</td><td>—</td><td>1,050</td><td>4,212</td><td>60</td><td>2018</td><td>1983</td><td>2400 Kingston Court</td><td></td></tr><tr><td>York, PA</td><td>—</td><td>1,121</td><td>7,586</td><td>—</td><td>1,121</td><td>7,586</td><td>97</td><td>2018</td><td>1979</td><td>1770 Barley Road</td><td></td></tr><tr><td>York, UK</td><td>—</td><td>2,961</td><td>8,266</td><td>379</td><td>3,061</td><td>8,545</td><td>946</td><td>2014</td><td>2006</td><td>Rosetta Way, Boroughbridge Road</td><td></td></tr><tr><td>Youngsville, NC</td><td>—</td><td>380</td><td>10,689</td><td>—</td><td>380</td><td>10,689</td><td>1,256</td><td>2014</td><td>2013</td><td>100 Sunset Drive</td><td></td></tr><tr><td>Zephyrhills, FL</td><td>—</td><td>2,131</td><td>6,671</td><td>—</td><td>2,131</td><td>6,671</td><td>90</td><td>2018</td><td>1987</td><td>38220 Henry Drive</td><td></td></tr><tr><td>Zionsville, IN</td><td>—</td><td>1,610</td><td>22,400</td><td>1,686</td><td>1,610</td><td>24,086</td><td>5,158</td><td>2010</td><td>2009</td><td>11755 N Michigan Rd</td><td></td></tr><tr><td>Triple-net Total</td><td>$288,387</td><td>$1,096,169</td><td>$8,585,481</td><td>$301,960</td><td>$1,119,576</td><td>$8,864,034</td><td>$1,261,486</td><td></td><td></td><td></td><td></td></tr></table>



## Welltower Inc.

## Schedule III
Real Estate and Accumulated Depreciation
December 31, 2018

(Dollars in thousands)

<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td></tr><tr><td>Outpatient Medical:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Addison, IL</td><td>$ 6,052</td><td>$ 102</td><td>$19,089</td><td>$ —</td><td>$ 102</td><td>$19,089</td><td>$ —</td><td>2018</td><td>2012</td><td>303 West Lake Street</td><td></td></tr><tr><td>Akron, OH</td><td>—</td><td>821</td><td>12,105</td><td>1</td><td>821</td><td>12,106</td><td>2,993</td><td>2012</td><td>2010</td><td>701 White Pond Drive</td><td></td></tr><tr><td>Allen, TX</td><td>—</td><td>726</td><td>14,196</td><td>1,221</td><td>726</td><td>15,417</td><td>4,722</td><td>2012</td><td>2006</td><td>1105 N Central Expressway</td><td></td></tr><tr><td>Alpharetta, GA</td><td>—</td><td>476</td><td>14,757</td><td>448</td><td>476</td><td>15,205</td><td>5,141</td><td>2011</td><td>2003</td><td>11975 Morris Road</td><td></td></tr><tr><td>Alpharetta, GA</td><td>—</td><td>1,862</td><td>—</td><td>—</td><td>1,862</td><td>—</td><td>—</td><td>2011</td><td>1900</td><td>940 North Point Parkway</td><td></td></tr><tr><td>Alpharetta, GA</td><td>—</td><td>548</td><td>17,103</td><td>548</td><td>548</td><td>17,651</td><td>6,275</td><td>2011</td><td>2007</td><td>3300 Old Milton Parkway</td><td></td></tr><tr><td>Alpharetta, GA</td><td>—</td><td>773</td><td>18,902</td><td>1,640</td><td>773</td><td>20,542</td><td>6,627</td><td>2011</td><td>1993</td><td>3400-A Old Milton Parkway</td><td></td></tr><tr><td>Alpharetta, GA</td><td>—</td><td>1,769</td><td>36,152</td><td>1,805</td><td>1,769</td><td>37,957</td><td>13,445</td><td>2011</td><td>1999</td><td>3400-C Old Milton Parkway</td><td></td></tr><tr><td>Anderson, IN</td><td>—</td><td>584</td><td>21,077</td><td>—</td><td>584</td><td>21,077</td><td>1,300</td><td>2017</td><td>2016</td><td>3125 S. Scatterfield Rd.</td><td></td></tr><tr><td>Arcadia, CA</td><td>—</td><td>5,408</td><td>23,219</td><td>4,567</td><td>5,618</td><td>27,576</td><td>10,909</td><td>2006</td><td>1984</td><td>301 W. Huntington Drive</td><td></td></tr><tr><td>Arlington, TX</td><td>—</td><td>82</td><td>18,243</td><td>402</td><td>82</td><td>18,645</td><td>3,550</td><td>2012</td><td>2012</td><td>902 W. Randol Mill Road</td><td></td></tr><tr><td>Atlanta, GA</td><td>—</td><td>4,931</td><td>18,720</td><td>7,068</td><td>5,387</td><td>25,332</td><td>11,504</td><td>2006</td><td>1991</td><td>755 Mt. Vernon Hwy.</td><td></td></tr><tr><td>Atlanta, GA</td><td>—</td><td>1,947</td><td>24,248</td><td>1,973</td><td>2,184</td><td>25,984</td><td>7,822</td><td>2012</td><td>1984</td><td>975 Johnson Ferry Road</td><td></td></tr><tr><td>Atlanta, GA</td><td>—</td><td>—</td><td>43,425</td><td>1,972</td><td>—</td><td>45,397</td><td>12,796</td><td>2012</td><td>2006</td><td>5670 Peachtree-Dunwoody Road</td><td></td></tr><tr><td>Austin, TX</td><td>—</td><td>1,066</td><td>10,112</td><td>—</td><td>1,066</td><td>10,112</td><td>499</td><td>2017</td><td>2017</td><td>5301-B Davis Lane</td><td></td></tr><tr><td>Bardstown, KY</td><td>—</td><td>273</td><td>7,966</td><td>42</td><td>274</td><td>8,007</td><td>1,409</td><td>2010</td><td>2006</td><td>4359 New Shepherdsville Rd</td><td></td></tr><tr><td>Bartlett, TN</td><td>—</td><td>187</td><td>15,015</td><td>2,225</td><td>187</td><td>17,240</td><td>6,860</td><td>2007</td><td>2004</td><td>2996 Kate Bond Rd.</td><td></td></tr><tr><td>Bel Air, MD</td><td>—</td><td>—</td><td>24,769</td><td>49</td><td>—</td><td>24,818</td><td>1,724</td><td>2014</td><td>2016</td><td>12 Medstar Boulevard</td><td></td></tr><tr><td>Bellevue, NE</td><td>—</td><td>—</td><td>16,680</td><td>2</td><td>—</td><td>16,682</td><td>5,283</td><td>2010</td><td>2010</td><td>2510 Bellevue Medical Center Drive</td><td></td></tr><tr><td>Bettendorf, IA</td><td>—</td><td>—</td><td>7,110</td><td>73</td><td>—</td><td>7,183</td><td>748</td><td>2013</td><td>2014</td><td>2140 53rd Avenue</td><td></td></tr><tr><td>Beverly Hills, CA</td><td>—</td><td>20,766</td><td>40,730</td><td>3,400</td><td>20,766</td><td>44,130</td><td>6,159</td><td>2015</td><td>1946</td><td>9675 Brighton Way</td><td></td></tr><tr><td>Beverly Hills, CA</td><td>—</td><td>18,863</td><td>1,192</td><td>208</td><td>18,885</td><td>1,378</td><td>684</td><td>2015</td><td>1955</td><td>415 North Bedford</td><td></td></tr><tr><td>Beverly Hills, CA</td><td>—</td><td>19,863</td><td>31,690</td><td>1,058</td><td>19,863</td><td>32,748</td><td>4,403</td><td>2015</td><td>1946</td><td>416 North Bedford</td><td></td></tr><tr><td>Beverly Hills, CA</td><td>33,729</td><td>32,603</td><td>28,639</td><td>812</td><td>32,603</td><td>29,451</td><td>5,043</td><td>2015</td><td>1950</td><td>435 North Bedford</td><td></td></tr><tr><td>Beverly Hills, CA</td><td>78,271</td><td>52,772</td><td>87,366</td><td>510</td><td>52,772</td><td>87,876</td><td>11,291</td><td>2015</td><td>1989</td><td>436 North Bedford</td><td></td></tr><tr><td>Birmingham, AL</td><td>—</td><td>52</td><td>10,201</td><td>639</td><td>52</td><td>10,840</td><td>4,243</td><td>2006</td><td>1971</td><td>801 Princeton Avenue SW</td><td></td></tr><tr><td>Birmingham, AL</td><td>—</td><td>124</td><td>11,733</td><td>2,047</td><td>124</td><td>13,780</td><td>4,905</td><td>2006</td><td>1985</td><td>817 Princeton Avenue SW</td><td></td></tr><tr><td>Birmingham, AL</td><td>—</td><td>476</td><td>18,726</td><td>2,196</td><td>476</td><td>20,922</td><td>7,981</td><td>2006</td><td>1989</td><td>833 Princeton Avenue SW</td><td></td></tr><tr><td>Birmingham, AL</td><td>8,626</td><td>896</td><td>13,755</td><td>—</td><td>896</td><td>13,755</td><td>—</td><td>2018</td><td>1985</td><td>3485 Independence Drive</td><td></td></tr><tr><td>Boardman, OH</td><td>—</td><td>80</td><td>12,161</td><td>40</td><td>80</td><td>12,201</td><td>4,585</td><td>2010</td><td>2007</td><td>8423 Market St</td><td></td></tr><tr><td>Boca Raton, FL</td><td>—</td><td>31</td><td>12,312</td><td>896</td><td>251</td><td>12,988</td><td>3,622</td><td>2012</td><td>1993</td><td>9960 S. Central Park Boulevard</td><td></td></tr><tr><td>Boca Raton, FL</td><td>—</td><td>109</td><td>34,002</td><td>3,823</td><td>214</td><td>37,720</td><td>14,246</td><td>2006</td><td>1995</td><td>9970 S. Central Park Blvd.</td><td></td></tr><tr><td>Boerne, TX</td><td>—</td><td>50</td><td>12,951</td><td>454</td><td>86</td><td>13,369</td><td>3,535</td><td>2011</td><td>2007</td><td>134 Menger Springs Road</td><td></td></tr><tr><td>Boynton Beach, FL</td><td>—</td><td>2,048</td><td>7,692</td><td>1,374</td><td>2,185</td><td>8,929</td><td>3,798</td><td>2006</td><td>1995</td><td>8188 Jog Rd.</td><td></td></tr><tr><td>Boynton Beach, FL</td><td>—</td><td>2,048</td><td>7,403</td><td>1,631</td><td>2,185</td><td>8,897</td><td>3,902</td><td>2006</td><td>1997</td><td>8200 Jog Road</td><td></td></tr><tr><td>Boynton Beach, FL</td><td>—</td><td>214</td><td>5,611</td><td>8,423</td><td>320</td><td>13,928</td><td>5,714</td><td>2007</td><td>1996</td><td>10075 Jog Rd.</td><td></td></tr><tr><td>Boynton Beach, FL</td><td>—</td><td>13,324</td><td>40,369</td><td>2,925</td><td>14,049</td><td>42,569</td><td>11,591</td><td>2013</td><td>1995</td><td>10301 Hagen Ranch Road</td><td></td></tr><tr><td>Bradenton, FL</td><td>—</td><td>1,184</td><td>9,799</td><td>417</td><td>1,184</td><td>10,216</td><td>1,896</td><td>2014</td><td>1975</td><td>315 75th Street West</td><td></td></tr><tr><td>Bradenton, FL</td><td>—</td><td>1,035</td><td>4,298</td><td>17</td><td>1,035</td><td>4,315</td><td>889</td><td>2014</td><td>2006</td><td>7005 Cortez Road West</td><td></td></tr><tr><td>Brandon, FL</td><td>—</td><td>1,437</td><td>7,006</td><td>—</td><td>1,437</td><td>7,006</td><td>182</td><td>2018</td><td>2016</td><td>2020 Town Center Boulevard</td><td></td></tr><tr><td>Bridgeton, MO</td><td>—</td><td>1,701</td><td>6,228</td><td>193</td><td>1,501</td><td>6,621</td><td>649</td><td>2017</td><td>2008</td><td>3440 De Paul Ln.</td><td></td></tr><tr><td>Bridgeton, MO</td><td>—</td><td>450</td><td>21,221</td><td>265</td><td>450</td><td>21,486</td><td>6,906</td><td>2010</td><td>2006</td><td>12266 DePaul Dr</td><td></td></tr><tr><td>Buckhurst Hill, UK</td><td>—</td><td>11,989</td><td>50,907</td><td>—</td><td>11,989</td><td>50,907</td><td>4,885</td><td>2015</td><td>2013</td><td>High Road</td><td></td></tr><tr><td>Burleson, TX</td><td>—</td><td>10</td><td>12,611</td><td>731</td><td>10</td><td>13,342</td><td>4,177</td><td>2011</td><td>2007</td><td>12001 South Freeway</td><td></td></tr><tr><td>Burnswille, MN</td><td>—</td><td>—</td><td>31,596</td><td>1,463</td><td>—</td><td>33,059</td><td>8,685</td><td>2013</td><td>2014</td><td>14101 Fairview Dr</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation (1)</td><td></td></tr><tr><td>Carmel, IN</td><td>—</td><td>2,280</td><td>19,238</td><td>944</td><td>2,475</td><td>19,987</td><td>7,581</td><td>2011</td><td>2005</td><td>12188-A North Meridian Street</td><td></td></tr><tr><td>Carmel, IN</td><td>—</td><td>2,026</td><td>21,559</td><td>186</td><td>2,186</td><td>21,585</td><td>8,691</td><td>2011</td><td>2007</td><td>12188-B North Meridian Street</td><td></td></tr><tr><td>Castle Rock, CO</td><td>—</td><td>80</td><td>13,004</td><td>586</td><td>79</td><td>13,591</td><td>3,008</td><td>2014</td><td>2013</td><td>2352 Meadows Boulevard</td><td></td></tr><tr><td>Castle Rock, CO</td><td>—</td><td>—</td><td>11,795</td><td>165</td><td>—</td><td>11,960</td><td>483</td><td>2016</td><td>2017</td><td>Meadows Boulevard</td><td></td></tr><tr><td>Cedar Park, TX</td><td>—</td><td>132</td><td>23,753</td><td>—</td><td>132</td><td>23,753</td><td>1,819</td><td>2017</td><td>2014</td><td>1401 Medical Parkway, Building 2</td><td></td></tr><tr><td>Chapel Hill, NC</td><td>5,259</td><td>1,970</td><td>8,874</td><td>—</td><td>1,970</td><td>8,874</td><td>—</td><td>2018</td><td>2007</td><td>6011 Farrington Road</td><td></td></tr><tr><td>Chapel Hill, NC</td><td>5,259</td><td>1,970</td><td>8,925</td><td>—</td><td>1,970</td><td>8,925</td><td>—</td><td>2018</td><td>2007</td><td>6013 Farrington Road</td><td></td></tr><tr><td>Chapel Hill, NC</td><td>14,949</td><td>5,681</td><td>25,035</td><td>—</td><td>5,681</td><td>25,035</td><td>—</td><td>2018</td><td>2006</td><td>2226 North Carolina Highway 54</td><td></td></tr><tr><td>Charleston, SC</td><td>—</td><td>2,773</td><td>25,928</td><td>124</td><td>2,815</td><td>26,010</td><td>4,988</td><td>2014</td><td>2009</td><td>325 Folly Road</td><td></td></tr><tr><td>Cincinnati, OH</td><td>—</td><td>—</td><td>17,880</td><td>250</td><td>2</td><td>18,128</td><td>3,561</td><td>2012</td><td>2013</td><td>3301 Mercy Health Boulevard</td><td></td></tr><tr><td>Claremore, OK</td><td>—</td><td>132</td><td>11,173</td><td>76</td><td>132</td><td>11,249</td><td>3,318</td><td>2007</td><td>2005</td><td>1501 N. Florence Ave.</td><td></td></tr><tr><td>Clarkson Valley, MO</td><td>—</td><td>—</td><td>35,592</td><td>—</td><td>—</td><td>35,592</td><td>12,590</td><td>2009</td><td>2010</td><td>15945 Clayton Rd</td><td></td></tr><tr><td>Clear Lake, TX</td><td>—</td><td>—</td><td>13,882</td><td>20</td><td>—</td><td>13,902</td><td>1,504</td><td>2013</td><td>2014</td><td>1010 South Ponds Drive</td><td></td></tr><tr><td>Columbia, MD</td><td>—</td><td>—</td><td>23</td><td>33,885</td><td>1,766</td><td>9,353</td><td>26,321</td><td>6,522</td><td>2015</td><td>1982 5450 &amp; 5500 Knoll N Dr.</td><td></td></tr><tr><td>Columbia, MD</td><td>—</td><td>12,159</td><td>72,636</td><td>—</td><td>12,159</td><td>72,636</td><td>249</td><td>2018</td><td>2009</td><td>10710 Charter Drive</td><td></td></tr><tr><td>Columbia, MD</td><td>—</td><td>2,333</td><td>19,232</td><td>1,567</td><td>2,333</td><td>20,799</td><td>4,971</td><td>2012</td><td>2002</td><td>10700 Charter Drive</td><td></td></tr><tr><td>Coon Rapids, MN</td><td>—</td><td>—</td><td>26,679</td><td>1,123</td><td>—</td><td>27,802</td><td>5,356</td><td>2013</td><td>2014</td><td>11850 Blackfoot Street NW</td><td></td></tr><tr><td>Costa Mesa, CA</td><td>22,020</td><td>22,033</td><td>24,332</td><td>179</td><td>22,033</td><td>24,511</td><td>3,664</td><td>2017</td><td>2007</td><td>1640 Newport Boulevard</td><td></td></tr><tr><td>Cypress, TX</td><td>—</td><td>1,287</td><td>—</td><td>—</td><td>1,287</td><td>—</td><td>—</td><td>2016</td><td>1900</td><td>14940 Mueschke Road</td><td></td></tr><tr><td>Dade City, FL</td><td>—</td><td>1,211</td><td>5,511</td><td>—</td><td>1,211</td><td>5,511</td><td>1,476</td><td>2011</td><td>1998</td><td>13413 US Hwy 301</td><td></td></tr><tr><td>Dallas, TX</td><td>—</td><td>122</td><td>15,418</td><td>—</td><td>122</td><td>15,418</td><td>1,681</td><td>2013</td><td>2014</td><td>8196 Walnut Hill Lane</td><td></td></tr><tr><td>Dallas, TX</td><td>—</td><td>137</td><td>28,690</td><td>3,836</td><td>137</td><td>32,526</td><td>13,032</td><td>2006</td><td>1995</td><td>9330 Poppy Dr.</td><td></td></tr><tr><td>Dallas, TX</td><td>—</td><td>462</td><td>52,488</td><td>2,070</td><td>462</td><td>54,558</td><td>11,436</td><td>2012</td><td>2004</td><td>7115 Greenville Avenue</td><td></td></tr><tr><td>Dallas, TX</td><td>—</td><td>6,086</td><td>18,007</td><td>—</td><td>6,086</td><td>18,007</td><td>373</td><td>2018</td><td>2010</td><td>10740 North Central Expressway</td><td></td></tr><tr><td>Dayton, OH</td><td>—</td><td>730</td><td>6,919</td><td>362</td><td>730</td><td>7,281</td><td>3,039</td><td>2011</td><td>1988</td><td>1530 Needmore Road</td><td></td></tr><tr><td>Deerfield Beach, FL</td><td>—</td><td>2,408</td><td>7,809</td><td>793</td><td>2,540</td><td>8,470</td><td>3,356</td><td>2011</td><td>2001</td><td>1192 East Newport Center Drive</td><td></td></tr><tr><td>Delray Beach, FL</td><td>—</td><td>1,882</td><td>34,767</td><td>7,280</td><td>2,449</td><td>41,480</td><td>18,890</td><td>2006</td><td>1985</td><td>5130-5150 Linton Blvd.</td><td></td></tr><tr><td>Durham, NC</td><td>—</td><td>1,212</td><td>22,858</td><td>2</td><td>1,212</td><td>22,860</td><td>3,958</td><td>2013</td><td>2012</td><td>1823 Hillandale Road</td><td></td></tr><tr><td>Edina, MN</td><td>—</td><td>310</td><td>15,132</td><td>989</td><td>310</td><td>16,121</td><td>4,820</td><td>2010</td><td>2003</td><td>8100 W 78th St</td><td></td></tr><tr><td>El Paso, TX</td><td>—</td><td>677</td><td>17,075</td><td>2,457</td><td>677</td><td>19,532</td><td>8,868</td><td>2006</td><td>1997</td><td>2400 Trawood Dr.</td><td></td></tr><tr><td>Elmhurst, IL</td><td>—</td><td>41</td><td>39,562</td><td>—</td><td>41</td><td>39,562</td><td>—</td><td>2018</td><td>2011</td><td>133 E Brush Hill Road</td><td></td></tr><tr><td>Everett, WA</td><td>—</td><td>4,842</td><td>26,010</td><td>1</td><td>4,842</td><td>26,011</td><td>7,650</td><td>2010</td><td>2011</td><td>13020 Meridian Ave. S.</td><td></td></tr><tr><td>Fenton, MO</td><td>10,559</td><td>958</td><td>27,485</td><td>439</td><td>958</td><td>27,924</td><td>7,480</td><td>2013</td><td>2009</td><td>1011 Bowles Avenue</td><td></td></tr><tr><td>Fenton, MO</td><td>—</td><td>369</td><td>13,911</td><td>357</td><td>369</td><td>14,268</td><td>2,793</td><td>2013</td><td>2009</td><td>1055 Bowles Avenue</td><td></td></tr><tr><td>Florham Park, NJ</td><td>—</td><td>8,578</td><td>61,779</td><td>—</td><td>8,578</td><td>61,779</td><td>1,953</td><td>2017</td><td>2017</td><td>150 Park Avenue</td><td></td></tr><tr><td>Flower Mound, TX</td><td>—</td><td>737</td><td>9,276</td><td>—</td><td>737</td><td>9,276</td><td>1,475</td><td>2015</td><td>2014</td><td>2560 Central Park Avenue</td><td></td></tr><tr><td>Flower Mound, TX</td><td>—</td><td>4,164</td><td>27,027</td><td>962</td><td>4,164</td><td>27,989</td><td>4,930</td><td>2014</td><td>2012</td><td>4370 Medical Arts Drive</td><td></td></tr><tr><td>Flower Mound, TX</td><td>—</td><td>4,620</td><td>—</td><td>—</td><td>4,620</td><td>—</td><td>—</td><td>2014</td><td>1900 Medical Arts Drive</td><td></td></tr><tr><td>Fort Wayne, IN</td><td>—</td><td>1,105</td><td>22,836</td><td>—</td><td>1,105</td><td>22,836</td><td>5,324</td><td>2012</td><td>2004</td><td>7916 Jefferson Boulevard</td><td></td></tr><tr><td>Fort Worth, TX</td><td>—</td><td>462</td><td>26,020</td><td>373</td><td>462</td><td>26,393</td><td>5,128</td><td>2012</td><td>2012</td><td>10840 Texas Health Trail</td><td></td></tr><tr><td>Fort Worth, TX</td><td>—</td><td>401</td><td>6,099</td><td>1</td><td>401</td><td>6,100</td><td>1,227</td><td>2014</td><td>2007</td><td>7200 Oakmont Boulevard</td><td></td></tr><tr><td>Franklin, TN</td><td>—</td><td>2,338</td><td>12,138</td><td>2,821</td><td>2,338</td><td>14,959</td><td>6,092</td><td>2007</td><td>1988</td><td>100 Covey Drive</td><td></td></tr><tr><td>Frisco, TX</td><td>—</td><td>—</td><td>18,635</td><td>1,534</td><td>—</td><td>20,169</td><td>7,805</td><td>2007</td><td>2004</td><td>4401 Coit Road</td><td></td></tr><tr><td>Frisco, TX</td><td>—</td><td>—</td><td>15,309</td><td>2,549</td><td>—</td><td>17,858</td><td>7,344</td><td>2007</td><td>2004</td><td>4461 Coit Road</td><td></td></tr><tr><td>Fullerton, CA</td><td>—</td><td>5,477</td><td>53,890</td><td>433</td><td>5,477</td><td>54,323</td><td>3,694</td><td>2014</td><td>2007</td><td>1950 Sunny Crest Drive</td><td></td></tr><tr><td>Gallatin, TN</td><td>—</td><td>20</td><td>21,801</td><td>1,868</td><td>44</td><td>23,645</td><td>8,066</td><td>2010</td><td>1997</td><td>300 Steam Plant Rd</td><td></td></tr><tr><td>Gardendale, AL</td><td>4,300</td><td>1,150</td><td>8,162</td><td>—</td><td>1,150</td><td>8,162</td><td>—</td><td>2018</td><td>2005</td><td>2217 Decatur Highway</td><td></td></tr><tr><td>Gig Harbor, WA</td><td>—</td><td>80</td><td>30,810</td><td>982</td><td>80</td><td>31,792</td><td>3,944</td><td>2010</td><td>2009</td><td>11511 Canterwood Blvd. NW</td><td></td></tr><tr><td>Glendale, CA</td><td>—</td><td>37</td><td>18,398</td><td>1,651</td><td>37</td><td>20,049</td><td>6,951</td><td>2007</td><td>2002</td><td>222 W. Eulalia St.</td><td></td></tr><tr><td>Gloucester, VA</td><td>—</td><td>2,128</td><td>9,169</td><td>—</td><td>2,128</td><td>9,169</td><td>—</td><td>2018</td><td>2008</td><td>5659 Parkway Drive</td><td></td></tr><tr><td>Grand Prairie, TX</td><td>—</td><td>981</td><td>6,086</td><td>—</td><td>981</td><td>6,086</td><td>2,096</td><td>2012</td><td>2009</td><td>2740 N State Hwy 360</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td colspan="2">Cost Capitalized</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Subsequent to Acquisition</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td><td></td></tr><tr><td>Grapevine, TX</td><td>—</td><td>—</td><td>5,943</td><td>4,778</td><td>2,081</td><td>8,640</td><td>1,603</td><td>2014</td><td>2002</td><td>2040</td><td>W State Hwy 114</td><td></td></tr><tr><td>Grapevine, TX</td><td>—</td><td>3,365</td><td>15,669</td><td>1,661</td><td>3,365</td><td>17,330</td><td>3,778</td><td>2014</td><td>2002</td><td>2020</td><td>W State Hwy 114</td><td></td></tr><tr><td>Greeneville, TN</td><td>—</td><td>970</td><td>10,104</td><td>74</td><td>970</td><td>10,178</td><td>3,880</td><td>2010</td><td>2005</td><td>438</td><td>East Vann Rd</td><td></td></tr><tr><td>Greenwood, IN</td><td>—</td><td>8,316</td><td>26,384</td><td>—</td><td>8,316</td><td>26,384</td><td>6,879</td><td>2012</td><td>2010</td><td>1260</td><td>Innovation Parkway</td><td></td></tr><tr><td>Greenwood, IN</td><td>—</td><td>2,098</td><td>21,538</td><td>638</td><td>2,098</td><td>22,176</td><td>3,486</td><td>2014</td><td>2013</td><td>3000</td><td>S State Road 135</td><td></td></tr><tr><td>Greenwood, IN</td><td>—</td><td>1,262</td><td>7,045</td><td>8</td><td>1,262</td><td>7,053</td><td>1,589</td><td>2014</td><td>2010</td><td>333</td><td>E County Line Road</td><td></td></tr><tr><td>High Point, NC</td><td>—</td><td>2,659</td><td>29,069</td><td>165</td><td>2,659</td><td>29,234</td><td>6,581</td><td>2012</td><td>2010</td><td>4515</td><td>Premier Drive</td><td></td></tr><tr><td>Highland, IL</td><td>—</td><td>—</td><td>8,834</td><td>—</td><td>—</td><td>8,834</td><td>1,598</td><td>2012</td><td>2013</td><td>12860</td><td>Troxler Avenue</td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>10,403</td><td>—</td><td>—</td><td>10,403</td><td>—</td><td>6</td><td>2011</td><td>1900</td><td>F.M. 1960 &amp; Northgate Forest Dr.</td><td></td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>5,837</td><td>33,128</td><td>150</td><td>5,837</td><td>33,278</td><td>11,293</td><td>2012</td><td>2005</td><td>15655</td><td>Cypress Woods Medical Dr.</td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>3,102</td><td>32,323</td><td>4,489</td><td>3,242</td><td>36,672</td><td>7,580</td><td>2014</td><td>2014</td><td>1900</td><td>N Loop W Freeway</td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>3,688</td><td>13,313</td><td>132</td><td>3,688</td><td>13,445</td><td>3,449</td><td>2012</td><td>2007</td><td>10701</td><td>Vintage Preserve Parkway</td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>1,099</td><td>1,604</td><td>80,605</td><td>12,815</td><td>70,493</td><td>14,163</td><td>2012</td><td>1998</td><td>2727</td><td>W Holcombe Boulevard</td><td></td></tr><tr><td>Houston, TX</td><td>3,899</td><td>377</td><td>13,726</td><td>—</td><td>377</td><td>13,726</td><td>—</td><td>2018</td><td>2011</td><td>20207</td><td>Chasewood Park Drive</td><td></td></tr><tr><td>Howell, MI</td><td>—</td><td>2,000</td><td>13,928</td><td>803</td><td>2,000</td><td>14,731</td><td>459</td><td>2016</td><td>2017</td><td>1225</td><td>South Latson Road</td><td></td></tr><tr><td>Hudson, OH</td><td>—</td><td>2,587</td><td>13,720</td><td>688</td><td>2,868</td><td>14,127</td><td>4,921</td><td>2012</td><td>2006</td><td>5655</td><td>Hudson Drive</td><td></td></tr><tr><td>Humble, TX</td><td>—</td><td>—</td><td>9,941</td><td>—</td><td>—</td><td>9,941</td><td>1,036</td><td>2013</td><td>2014</td><td>8233</td><td>N. Sam Houston Parkway E.</td><td></td></tr><tr><td>Jackson, MI</td><td>—</td><td>607</td><td>17,367</td><td>130</td><td>668</td><td>17,436</td><td>4,502</td><td>2013</td><td>2009</td><td>1201</td><td>E Michigan Avenue</td><td></td></tr><tr><td>Jupiter, FL</td><td>—</td><td>2,252</td><td>11,415</td><td>3,422</td><td>2,636</td><td>14,453</td><td>5,598</td><td>2006</td><td>2001</td><td>550</td><td>Heritage Dr.</td><td></td></tr><tr><td>Jupiter, FL</td><td>—</td><td>2,825</td><td>5,858</td><td>1,082</td><td>3,036</td><td>6,729</td><td>3,037</td><td>2007</td><td>2004</td><td>600</td><td>Heritage Dr.</td><td></td></tr><tr><td>Killeen, TX</td><td>—</td><td>—</td><td>3,756</td><td>—</td><td>—</td><td>3,756</td><td>325</td><td>2018</td><td>1990</td><td>2301</td><td>S. Clear Creek</td><td></td></tr><tr><td>Killeen, TX</td><td>—</td><td>760</td><td>22,878</td><td>305</td><td>795</td><td>23,148</td><td>7,882</td><td>2010</td><td>2010</td><td>2405</td><td>Clear Creek Rd</td><td></td></tr><tr><td>Killeen, TX</td><td>—</td><td>1,907</td><td>3,575</td><td>—</td><td>1,907</td><td>3,575</td><td>566</td><td>2011</td><td>2012</td><td>5702</td><td>E Central Texas Expressway</td><td></td></tr><tr><td>Kyle, TX</td><td>—</td><td>2,569</td><td>14,384</td><td>538</td><td>2,569</td><td>14,922</td><td>2,962</td><td>2014</td><td>2011</td><td>135</td><td>Bunton Creek Road</td><td></td></tr><tr><td>La Jolla, CA</td><td>—</td><td>12,855</td><td>32,658</td><td>705</td><td>12,855</td><td>33,363</td><td>5,946</td><td>2015</td><td>1989</td><td>4150</td><td>Regents Park Row</td><td></td></tr><tr><td>La Jolla, CA</td><td>—</td><td>9,425</td><td>26,525</td><td>542</td><td>9,425</td><td>27,067</td><td>3,912</td><td>2015</td><td>1988</td><td>4120</td><td>&amp; 4130 La Jolla Village Drive</td><td></td></tr><tr><td>La Quinta, CA</td><td>—</td><td>3,266</td><td>22,066</td><td>197</td><td>3,279</td><td>22,250</td><td>4,719</td><td>2014</td><td>2006</td><td>47647</td><td>Caleo Bay Drive</td><td></td></tr><tr><td>Lacey, WA</td><td>6,768</td><td>1,751</td><td>10,383</td><td>—</td><td>1,751</td><td>10,383</td><td>—</td><td>2018</td><td>1971</td><td>2555</td><td>Marvin Road Northeast</td><td></td></tr><tr><td>Lake St Louis, MO</td><td>—</td><td>240</td><td>14,249</td><td>204</td><td>240</td><td>14,453</td><td>5,048</td><td>2010</td><td>2008</td><td>400</td><td>Medical Dr</td><td></td></tr><tr><td>Lakeway, TX</td><td>—</td><td>2,801</td><td>—</td><td>—</td><td>2,801</td><td>—</td><td>—</td><td>2007</td><td>1900</td><td>Lohmans</td><td>Crossing Road</td><td></td></tr><tr><td>Lakewood, CA</td><td>—</td><td>146</td><td>14,885</td><td>2,294</td><td>146</td><td>17,179</td><td>6,528</td><td>2006</td><td>1993</td><td>5750</td><td>Downey Ave.</td><td></td></tr><tr><td>Lakewood, WA</td><td>—</td><td>72</td><td>16,017</td><td>676</td><td>72</td><td>16,693</td><td>3,952</td><td>2012</td><td>2005</td><td>11307</td><td>Bridgetport Way SW</td><td></td></tr><tr><td>Land O Lakes, FL</td><td>—</td><td>3,025</td><td>26,249</td><td>—</td><td>3,025</td><td>26,249</td><td>1,096</td><td>2017</td><td>2009</td><td>2100</td><td>Via Bella</td><td></td></tr><tr><td>Land O Lakes, FL</td><td>—</td><td>1,376</td><td>6,750</td><td>—</td><td>1,376</td><td>6,750</td><td>313</td><td>2017</td><td>2011</td><td>2150</td><td>Via Bella</td><td></td></tr><tr><td>Las Vegas, NV</td><td>—</td><td>6,127</td><td>—</td><td>—</td><td>6,127</td><td>—</td><td>—</td><td>2007</td><td>1900</td><td>SW corner of Deer Springs Way and Riley Street</td><td></td><td></td></tr><tr><td>Las Vegas, NV</td><td>—</td><td>2,319</td><td>4,612</td><td>1,214</td><td>2,319</td><td>5,826</td><td>2,708</td><td>2006</td><td>1991</td><td>2870</td><td>S. Maryland Pkwy.</td><td></td></tr><tr><td>Las Vegas, NV</td><td>—</td><td>74</td><td>15,287</td><td>1,484</td><td>74</td><td>16,771</td><td>6,416</td><td>2006</td><td>2000</td><td>1815</td><td>E. Lake Mead Blvd.</td><td></td></tr><tr><td>Las Vegas, NV</td><td>—</td><td>433</td><td>6,921</td><td>214</td><td>433</td><td>7,135</td><td>3,196</td><td>2007</td><td>1997</td><td>1776</td><td>E. Warm Springs Rd.</td><td></td></tr><tr><td>Lenexa, KS</td><td>—</td><td>540</td><td>17,926</td><td>290</td><td>540</td><td>18,216</td><td>5,492</td><td>2010</td><td>2008</td><td>23401</td><td>Prairie Star Pkwy</td><td></td></tr><tr><td>Lenexa, KS</td><td>—</td><td>100</td><td>13,766</td><td>—</td><td>100</td><td>13,766</td><td>1,751</td><td>2013</td><td>2013</td><td>23351</td><td>Prairie Star Parkway</td><td></td></tr><tr><td>Lincoln, NE</td><td>—</td><td>1,420</td><td>29,723</td><td>1,052</td><td>1,420</td><td>30,775</td><td>10,875</td><td>2010</td><td>2003</td><td>575</td><td>South 70th St</td><td></td></tr><tr><td>London, UK</td><td>—</td><td>5,229</td><td>11,551</td><td>—</td><td>5,229</td><td>11,551</td><td>1,108</td><td>2015</td><td>2007</td><td>17-19</td><td>View Road</td><td></td></tr><tr><td>London, UK</td><td>—</td><td>17,983</td><td>157,802</td><td>—</td><td>17,983</td><td>157,802</td><td>15,142</td><td>2015</td><td>2010</td><td>53</td><td>Parkside</td><td></td></tr><tr><td>London, UK</td><td>—</td><td>4,081</td><td>28,107</td><td>—</td><td>4,081</td><td>28,107</td><td>2,697</td><td>2015</td><td>2003</td><td>49</td><td>Parkside</td><td></td></tr><tr><td>Los Alamitos, CA</td><td>—</td><td>39</td><td>18,635</td><td>1,114</td><td>39</td><td>19,749</td><td>7,389</td><td>2007</td><td>2003</td><td>3771</td><td>Katella Ave.</td><td></td></tr><tr><td>Los Gatos, CA</td><td>—</td><td>488</td><td>22,386</td><td>2,410</td><td>488</td><td>24,796</td><td>11,137</td><td>2006</td><td>1993</td><td>555</td><td>Knowles Dr.</td><td></td></tr><tr><td>Loxahatchee, FL</td><td>—</td><td>1,637</td><td>5,048</td><td>1,280</td><td>1,719</td><td>6,246</td><td>2,713</td><td>2006</td><td>1997</td><td>12977</td><td>Southern Blvd.</td><td></td></tr><tr><td>Loxahatchee, FL</td><td>—</td><td>1,340</td><td>6,509</td><td>1,464</td><td>1,440</td><td>7,873</td><td>3,144</td><td>2006</td><td>1993</td><td>12989</td><td>Southern Blvd.</td><td></td></tr><tr><td>Loxahatchee, FL</td><td>—</td><td>1,553</td><td>4,694</td><td>1,544</td><td>1,650</td><td>6,141</td><td>2,655</td><td>2006</td><td>1994</td><td>12983</td><td>Southern Blvd.</td><td></td></tr><tr><td>Lynbrook, NY</td><td>27,745</td><td>10,028</td><td>37,319</td><td>—</td><td>10,028</td><td>37,319</td><td>—</td><td>2018</td><td>1962</td><td>444</td><td>Merrick Road</td><td></td></tr><tr><td>Marietta, GA</td><td>—</td><td>2,682</td><td>20,053</td><td>1,409</td><td>2,703</td><td>21,441</td><td>2,224</td><td>2016</td><td>2016</td><td>4800</td><td>Olde Towne Parkway</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td></tr><tr><td>Melbourne, FL</td><td>—</td><td>3,439</td><td>50,461</td><td>802</td><td>3,538</td><td>51,164</td><td>9,227</td><td>2014</td><td>2009</td><td>2222 South Harbor City Boulevard</td><td></td></tr><tr><td>Menasha, WI</td><td>—</td><td>1,374</td><td>13,861</td><td>2,940</td><td>1,345</td><td>16,830</td><td>2,099</td><td>2016</td><td>1994</td><td>1550 Midway Place</td><td></td></tr><tr><td>Merced, CA</td><td>—</td><td>—</td><td>13,772</td><td>815</td><td>—</td><td>14,587</td><td>5,015</td><td>2009</td><td>2010</td><td>315 Mercy Ave.</td><td></td></tr><tr><td>Merriam, KS</td><td>—</td><td>176</td><td>8,005</td><td>1,088</td><td>176</td><td>9,093</td><td>3,256</td><td>2011</td><td>1972</td><td>8800 West 75th Street</td><td></td></tr><tr><td>Merriam, KS</td><td>—</td><td>—</td><td>10,222</td><td>4,517</td><td>444</td><td>14,295</td><td>5,210</td><td>2011</td><td>1977</td><td>8901 West 74th Street</td><td></td></tr><tr><td>Merriam, KS</td><td>—</td><td>1,257</td><td>24,911</td><td>64</td><td>1,257</td><td>24,975</td><td>6,116</td><td>2013</td><td>2009</td><td>9301 West 74th Street</td><td></td></tr><tr><td>Merrillville, IN</td><td>—</td><td>—</td><td>22,134</td><td>915</td><td>—</td><td>23,049</td><td>7,183</td><td>2008</td><td>2006</td><td>101 E. 87th Ave.</td><td></td></tr><tr><td>Mesa, AZ</td><td>—</td><td>1,558</td><td>9,561</td><td>1,347</td><td>1,558</td><td>10,908</td><td>4,756</td><td>2008</td><td>1989</td><td>6424 East Broadway Road</td><td></td></tr><tr><td>Mesquite, TX</td><td>—</td><td>496</td><td>3,834</td><td>—</td><td>496</td><td>3,834</td><td>1,035</td><td>2012</td><td>2012</td><td>1575 I-30</td><td></td></tr><tr><td>Mission Hills, CA</td><td>23,835</td><td>—</td><td>42,276</td><td>6,672</td><td>4,791</td><td>44,157</td><td>8,540</td><td>2014</td><td>1986</td><td>11550 Indian Hills Road</td><td></td></tr><tr><td>Missouri City, TX</td><td>—</td><td>1,360</td><td>7,146</td><td>62</td><td>1,360</td><td>7,208</td><td>420</td><td>2015</td><td>2016</td><td>7010 Highway 6</td><td></td></tr><tr><td>Mobile, AL</td><td>16,028</td><td>2,759</td><td>25,180</td><td>—</td><td>2,759</td><td>25,180</td><td>—</td><td>2018</td><td>2003</td><td>6144 Airport Boulevard</td><td></td></tr><tr><td>Moline, IL</td><td>—</td><td>—</td><td>8,783</td><td>69</td><td>—</td><td>8,852</td><td>1,179</td><td>2012</td><td>2013</td><td>3900 28th Avenue Drive</td><td></td></tr><tr><td>Monticello, MN</td><td>6,976</td><td>61</td><td>18,489</td><td>131</td><td>61</td><td>18,620</td><td>3,986</td><td>2012</td><td>2008</td><td>1001 Hart Boulevard</td><td></td></tr><tr><td>Moorestown, NJ</td><td>—</td><td>6</td><td>50,896</td><td>694</td><td>362</td><td>51,234</td><td>12,506</td><td>2011</td><td>2012</td><td>401 Young Avenue</td><td></td></tr><tr><td>Morrow, GA</td><td>—</td><td>818</td><td>8,064</td><td>272</td><td>845</td><td>8,309</td><td>4,320</td><td>2007</td><td>1990</td><td>6635 Lake Drive</td><td></td></tr><tr><td>Mount Juliet, TN</td><td>—</td><td>1,566</td><td>11,697</td><td>1,734</td><td>1,601</td><td>13,396</td><td>5,609</td><td>2007</td><td>2005</td><td>5002 Crossings Circle</td><td></td></tr><tr><td>Mount Vernon, IL</td><td>—</td><td>—</td><td>24,892</td><td>25</td><td>—</td><td>24,917</td><td>6,306</td><td>2011</td><td>2012</td><td>2 Good Samaritan Way</td><td></td></tr><tr><td>Murrieta, CA</td><td>—</td><td>—</td><td>47,190</td><td>63</td><td>—</td><td>47,253</td><td>18,061</td><td>2010</td><td>2011</td><td>28078 Baxter Rd.</td><td></td></tr><tr><td>Murrieta, CA</td><td>—</td><td>3,800</td><td>—</td><td>—</td><td>3,800</td><td>—</td><td>—</td><td>2014</td><td>1990</td><td>28078 Baxter Rd.</td><td></td></tr><tr><td>Nashville, TN</td><td>—</td><td>1,806</td><td>7,165</td><td>3,728</td><td>1,942</td><td>10,757</td><td>4,509</td><td>2006</td><td>1986</td><td>310 25th Ave. N.</td><td></td></tr><tr><td>Nassau Bay, TX</td><td>—</td><td>378</td><td>29,947</td><td>—</td><td>378</td><td>29,947</td><td>7,296</td><td>2012</td><td>1981</td><td>18100 St John Drive</td><td></td></tr><tr><td>Nassau Bay, TX</td><td>—</td><td>91</td><td>10,613</td><td>1,386</td><td>91</td><td>11,999</td><td>3,829</td><td>2012</td><td>1986</td><td>2060 Space Park Drive</td><td></td></tr><tr><td>New Albany, IN</td><td>—</td><td>2,411</td><td>16,494</td><td>30</td><td>2,411</td><td>16,524</td><td>2,981</td><td>2014</td><td>2001</td><td>2210 Green Valley Road</td><td></td></tr><tr><td>Niagara Falls, NY</td><td>—</td><td>1,433</td><td>10,891</td><td>441</td><td>1,721</td><td>11,044</td><td>5,761</td><td>2007</td><td>1995</td><td>6932 - 6934 Williams Rd</td><td></td></tr><tr><td>Niagara Falls, NY</td><td>—</td><td>454</td><td>8,362</td><td>310</td><td>454</td><td>8,672</td><td>3,298</td><td>2007</td><td>2004</td><td>6930 Williams Rd</td><td></td></tr><tr><td>Oklahoma City, OK</td><td>—</td><td>216</td><td>19,135</td><td>398</td><td>216</td><td>19,533</td><td>5,116</td><td>2013</td><td>2008</td><td>535 NW 9th Street</td><td></td></tr><tr><td>Oro Valley, AZ</td><td>—</td><td>89</td><td>18,339</td><td>1,052</td><td>89</td><td>19,391</td><td>6,798</td><td>2007</td><td>2004</td><td>1521 East Tangerine Rd.</td><td></td></tr><tr><td>Palmer, AK</td><td>—</td><td>283</td><td>8,335</td><td>—</td><td>283</td><td>8,335</td><td>171</td><td>2017</td><td>2018</td><td>2480 S Woodworth Loop</td><td></td></tr><tr><td>Palmer, AK</td><td>—</td><td>217</td><td>29,705</td><td>1,442</td><td>217</td><td>31,147</td><td>10,991</td><td>2007</td><td>2006</td><td>2490 South Woodworth Loop</td><td></td></tr><tr><td>Pasadena, TX</td><td>—</td><td>1,700</td><td>8,009</td><td>—</td><td>1,700</td><td>8,009</td><td>1,102</td><td>2012</td><td>2013</td><td>5001 E Sam Houston Parkway S</td><td></td></tr><tr><td>Pearland, TX</td><td>—</td><td>1,500</td><td>11,253</td><td>11</td><td>1,500</td><td>11,264</td><td>1,457</td><td>2012</td><td>2013</td><td>2515 Business Center Drive</td><td></td></tr><tr><td>Pearland, TX</td><td>—</td><td>9,594</td><td>32,753</td><td>191</td><td>9,807</td><td>32,731</td><td>5,033</td><td>2014</td><td>2013</td><td>11511 Shadow Creek Parkway</td><td></td></tr><tr><td>Pendleton, OR</td><td>—</td><td>—</td><td>10,312</td><td>380</td><td>—</td><td>10,692</td><td>1,362</td><td>2012</td><td>2013</td><td>3001 St. Anthony Way</td><td></td></tr><tr><td>Phoenix, AZ</td><td>—</td><td>1,149</td><td>48,018</td><td>13,128</td><td>1,149</td><td>61,146</td><td>25,399</td><td>2006</td><td>1998</td><td>2222 E. Highland Ave.</td><td></td></tr><tr><td>Pineville, NC</td><td>—</td><td>961</td><td>6,974</td><td>2,507</td><td>1,077</td><td>9,365</td><td>4,615</td><td>2006</td><td>1988</td><td>10512 Park Rd.</td><td></td></tr><tr><td>Plano, TX</td><td>—</td><td>5,423</td><td>20,698</td><td>554</td><td>5,423</td><td>21,252</td><td>12,431</td><td>2008</td><td>2007</td><td>6957 Plano Parkway</td><td></td></tr><tr><td>Plano, TX</td><td>—</td><td>793</td><td>83,209</td><td>2,668</td><td>793</td><td>85,877</td><td>20,969</td><td>2012</td><td>2005</td><td>6020 West Parker Road</td><td></td></tr><tr><td>Plantation, FL</td><td>—</td><td>8,563</td><td>10,666</td><td>4,461</td><td>8,575</td><td>15,115</td><td>7,703</td><td>2006</td><td>1997</td><td>851-865 SW 78th Ave.</td><td></td></tr><tr><td>Plantation, FL</td><td>—</td><td>8,848</td><td>9,262</td><td>1,442</td><td>8,908</td><td>10,644</td><td>6,782</td><td>2006</td><td>1996</td><td>600 Pine Island Rd.</td><td></td></tr><tr><td>Port Orchard, WA</td><td>10,172</td><td>2,810</td><td>22,716</td><td>—</td><td>2,810</td><td>22,716</td><td>—</td><td>2018</td><td>1995</td><td>450 South Kitsap Boulevard</td><td></td></tr><tr><td>Portland, ME</td><td>—</td><td>655</td><td>25,529</td><td>—</td><td>655</td><td>25,529</td><td>7,892</td><td>2011</td><td>2008</td><td>195 Fore River Parkway</td><td></td></tr><tr><td>Redmond, WA</td><td>—</td><td>5,015</td><td>26,697</td><td>1,080</td><td>5,015</td><td>27,777</td><td>8,340</td><td>2010</td><td>2011</td><td>18000 NE Union Hill Rd.</td><td></td></tr><tr><td>Reno, NV</td><td>—</td><td>1,117</td><td>21,972</td><td>2,068</td><td>1,117</td><td>24,040</td><td>9,409</td><td>2006</td><td>1991</td><td>343 Elm St.</td><td></td></tr><tr><td>Richmond, TX</td><td>—</td><td>2,000</td><td>9,118</td><td>7</td><td>2,000</td><td>9,125</td><td>627</td><td>2015</td><td>2016</td><td>22121 FM 1093 Road</td><td></td></tr><tr><td>Richmond, VA</td><td>—</td><td>2,969</td><td>26,697</td><td>882</td><td>3,059</td><td>27,489</td><td>8,796</td><td>2012</td><td>2008</td><td>7001 Forest Avenue</td><td></td></tr><tr><td>Rockwall, TX</td><td>—</td><td>132</td><td>17,197</td><td>143</td><td>132</td><td>17,340</td><td>4,240</td><td>2012</td><td>2008</td><td>3142 Horizon Road</td><td></td></tr><tr><td>Rogers, AR</td><td>—</td><td>1,062</td><td>28,680</td><td>3,206</td><td>1,062</td><td>31,886</td><td>9,999</td><td>2011</td><td>2008</td><td>2708 Rife Medical Lane</td><td></td></tr><tr><td>Rolla, MO</td><td>—</td><td>1,931</td><td>47,639</td><td>1</td><td>1,931</td><td>47,640</td><td>12,977</td><td>2011</td><td>2009</td><td>1605 Martin Spring Drive</td><td></td></tr><tr><td>Roswell, NM</td><td>—</td><td>183</td><td>5,850</td><td>—</td><td>183</td><td>5,850</td><td>1,870</td><td>2011</td><td>2004</td><td>601 West Country Club Road</td><td></td></tr><tr><td>Roswell, NM</td><td>—</td><td>883</td><td>15,984</td><td>41</td><td>883</td><td>16,025</td><td>4,578</td><td>2011</td><td>2006</td><td>350 West Country Club Road</td><td></td></tr><tr><td>Roswell, NM</td><td>—</td><td>762</td><td>17,171</td><td>—</td><td>762</td><td>17,171</td><td>4,082</td><td>2011</td><td>2009</td><td>300 West Country Club Road</td><td></td></tr><tr><td>Sacramento, CA</td><td>—</td><td>866</td><td>12,756</td><td>2,023</td><td>869</td><td>14,776</td><td>5,835</td><td>2006</td><td>1990</td><td>8120 Timberlake Way</td><td></td></tr><tr><td>Salem, NH</td><td>—</td><td>1,655</td><td>14,050</td><td>46</td><td>1,681</td><td>14,070</td><td>3,046</td><td>2014</td><td>2013</td><td>31 Stiles Road</td><td></td></tr><tr><td>San Antonio, TX</td><td>—</td><td>1,057</td><td>10,101</td><td>—</td><td>1,057</td><td>10,101</td><td>4,943</td><td>2006</td><td>1999</td><td>19016 Stone Oak Pkwy.</td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td colspan="2">Cost Capitalized</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Subsequent to Acquisition</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation(1)</td><td></td><td></td></tr><tr><td>San Antonio, TX</td><td>—</td><td>1,038</td><td>9,173</td><td>1,758</td><td>1,096</td><td>10,873</td><td>5,389</td><td>2006</td><td>1999</td><td>540 Stone Oak Centre Drive</td><td></td><td></td></tr><tr><td>San Antonio, TX</td><td>—</td><td>4,518</td><td>31,041</td><td>4,087</td><td>4,593</td><td>35,053</td><td>10,558</td><td>2012</td><td>1986</td><td>5282 Medical Drive</td><td></td><td></td></tr><tr><td>San Antonio, TX</td><td>—</td><td>900</td><td>17,288</td><td>798</td><td>938</td><td>18,048</td><td>4,489</td><td>2014</td><td>2007</td><td>3903 Wiseman Boulevard</td><td></td><td></td></tr><tr><td>San Antonio, TX</td><td>—</td><td>3,050</td><td>12,073</td><td>—</td><td>3,050</td><td>12,073</td><td>47</td><td>2016</td><td>2017</td><td>5206 Research Drive</td><td></td><td></td></tr><tr><td>Santa Clarita, CA</td><td>—</td><td>—</td><td>2,338</td><td>20,485</td><td>5,304</td><td>17,519</td><td>3,177</td><td>2014</td><td>1976</td><td>23861 McBean Parkway</td><td></td><td></td></tr><tr><td>Santa Clarita, CA</td><td>—</td><td>—</td><td>28,384</td><td>1,866</td><td>5,277</td><td>24,973</td><td>4,346</td><td>2014</td><td>1998</td><td>23929 McBean Parkway</td><td></td><td></td></tr><tr><td>Santa Clarita, CA</td><td>—</td><td>278</td><td>185</td><td>11,594</td><td>11,872</td><td>185</td><td>151</td><td>2014</td><td>1996</td><td>23871 McBean Parkway</td><td></td><td></td></tr><tr><td>Santa Clarita, CA</td><td>25,000</td><td>295</td><td>40,257</td><td>60</td><td>295</td><td>40,317</td><td>5,184</td><td>2014</td><td>2013</td><td>23803 McBean Parkway</td><td></td><td></td></tr><tr><td>Santa Clarita, CA</td><td>—</td><td>—</td><td>20,618</td><td>919</td><td>4,407</td><td>17,130</td><td>3,150</td><td>2014</td><td>1989</td><td>24355 Lyons Avenue</td><td></td><td></td></tr><tr><td>Sarasota, FL</td><td>—</td><td>62</td><td>47,325</td><td>4,118</td><td>62</td><td>51,443</td><td>13,413</td><td>2012</td><td>1990</td><td>1921 Waldemere Street</td><td></td><td></td></tr><tr><td>Seattle, WA</td><td>—</td><td>4,410</td><td>38,428</td><td>392</td><td>4,410</td><td>38,820</td><td>15,744</td><td>2010</td><td>2010</td><td>5350 Tallman Ave</td><td></td><td></td></tr><tr><td>Sewell, NJ</td><td>—</td><td>60</td><td>57,929</td><td>846</td><td>164</td><td>58,671</td><td>23,914</td><td>2007</td><td>2009</td><td>239 Hurffville-Cross Keys Road</td><td></td><td></td></tr><tr><td>Sewell, NJ</td><td>—</td><td>1,242</td><td>11,616</td><td>—</td><td>1,242</td><td>11,616</td><td>—</td><td>2018</td><td>2007</td><td>556 Egg Harbor Road</td><td></td><td></td></tr><tr><td>Shakopee, MN</td><td>5,654</td><td>508</td><td>11,412</td><td>851</td><td>509</td><td>12,262</td><td>4,159</td><td>2010</td><td>1996</td><td>1515 St Francis Ave</td><td></td><td></td></tr><tr><td>Shakopee, MN</td><td>9,541</td><td>707</td><td>18,089</td><td>95</td><td>773</td><td>18,118</td><td>5,061</td><td>2010</td><td>2007</td><td>1601 St Francis Ave</td><td></td><td></td></tr><tr><td>Shenandoah, TX</td><td>—</td><td>—</td><td>21,135</td><td>62</td><td>24</td><td>21,173</td><td>2,117</td><td>2013</td><td>2014</td><td>106 Vision Park Boulevard</td><td></td><td></td></tr><tr><td>Sherman Oaks, CA</td><td>—</td><td>—</td><td>32,186</td><td>3,228</td><td>3,121</td><td>32,293</td><td>6,038</td><td>2014</td><td>1969</td><td>4955 Van Nuys Boulevard</td><td></td><td></td></tr><tr><td>Silverdale, WA</td><td>13,378</td><td>3,451</td><td>21,176</td><td>—</td><td>3,451</td><td>21,176</td><td>—</td><td>2018</td><td>2004</td><td>2200 NW Myhre Road</td><td></td><td></td></tr><tr><td>Somerville, NJ</td><td>—</td><td>3,400</td><td>22,244</td><td>2</td><td>3,400</td><td>22,246</td><td>5,793</td><td>2008</td><td>2007</td><td>30 Rehill Avenue</td><td></td><td></td></tr><tr><td>Southlake, TX</td><td>—</td><td>3,000</td><td>—</td><td>—</td><td>3,000</td><td>—</td><td>—</td><td>2014</td><td>1900</td><td>Central Avenue</td><td></td><td></td></tr><tr><td>Southlake, TX</td><td>—</td><td>592</td><td>18,243</td><td>1,821</td><td>592</td><td>20,064</td><td>5,076</td><td>2012</td><td>2004</td><td>1545 East Southlake Boulevard</td><td></td><td></td></tr><tr><td>Southlake, TX</td><td>—</td><td>698</td><td>30,549</td><td>3,915</td><td>698</td><td>34,464</td><td>7,578</td><td>2012</td><td>2004</td><td>1545 East Southlake Boulevard</td><td></td><td></td></tr><tr><td>Springfield, IL</td><td>—</td><td>1,569</td><td>10,350</td><td>—</td><td>1,568</td><td>10,351</td><td>1,244</td><td>2010</td><td>2011</td><td>1100 East Lincolnshire Blvd</td><td></td><td></td></tr><tr><td>Springfield, IL</td><td>—</td><td>177</td><td>3,519</td><td>31</td><td>177</td><td>3,550</td><td>440</td><td>2010</td><td>2011</td><td>2801 Mathers Rd.</td><td></td><td></td></tr><tr><td>St Paul, MN</td><td>—</td><td>49</td><td>37,695</td><td>348</td><td>49</td><td>38,043</td><td>5,050</td><td>2014</td><td>2006</td><td>225 Smith Avenue N.</td><td></td><td></td></tr><tr><td>St. Louis, MO</td><td>—</td><td>336</td><td>17,247</td><td>2,068</td><td>336</td><td>19,315</td><td>7,425</td><td>2007</td><td>2001</td><td>2325 Dougherty Rd.</td><td></td><td></td></tr><tr><td>St. Paul, MN</td><td>—</td><td>2,706</td><td>39,507</td><td>309</td><td>2,701</td><td>39,821</td><td>12,101</td><td>2011</td><td>2007</td><td>435 Phalen Boulevard</td><td></td><td></td></tr><tr><td>Stamford, CT</td><td>—</td><td>—</td><td>41,153</td><td>3,071</td><td>—</td><td>44,224</td><td>2,403</td><td>2015</td><td>2016</td><td>29 Hospital Plaza</td><td></td><td></td></tr><tr><td>Suffern, NY</td><td>—</td><td>653</td><td>37,255</td><td>283</td><td>698</td><td>37,493</td><td>11,886</td><td>2011</td><td>2007</td><td>257 Lafayette Avenue</td><td></td><td></td></tr><tr><td>Suffolk, VA</td><td>—</td><td>1,566</td><td>11,511</td><td>68</td><td>1,620</td><td>11,525</td><td>4,693</td><td>2010</td><td>2007</td><td>5838 Harbour View Blvd.</td><td></td><td></td></tr><tr><td>Sugar Land, TX</td><td>—</td><td>3,543</td><td>15,532</td><td>—</td><td>3,543</td><td>15,532</td><td>5,290</td><td>2012</td><td>2005</td><td>11555 University Boulevard</td><td></td><td></td></tr><tr><td>Tacoma, WA</td><td>—</td><td>—</td><td>64,307</td><td>—</td><td>—</td><td>64,307</td><td>17,445</td><td>2011</td><td>2013</td><td>1608 South J Street</td><td></td><td></td></tr><tr><td>Tallahassee, FL</td><td>—</td><td>—</td><td>17,449</td><td>—</td><td>—</td><td>17,449</td><td>5,855</td><td>2010</td><td>2011</td><td>One Healing Place</td><td></td><td></td></tr><tr><td>Tampa, FL</td><td>—</td><td>4,319</td><td>12,234</td><td>—</td><td>4,319</td><td>12,234</td><td>2,803</td><td>2011</td><td>2003</td><td>14547 Bruce B Downs Blvd</td><td></td><td></td></tr><tr><td>Tampa, FL</td><td>—</td><td>1,462</td><td>7,270</td><td>—</td><td>1,462</td><td>7,270</td><td>331</td><td>2017</td><td>1996</td><td>12500 N Dale Mabry</td><td></td><td></td></tr><tr><td>Temple, TX</td><td>—</td><td>2,900</td><td>9,954</td><td>26</td><td>2,900</td><td>9,980</td><td>1,628</td><td>2011</td><td>2012</td><td>2601 Thornton Lane</td><td></td><td></td></tr><tr><td>Timonium, MD</td><td>—</td><td>8,829</td><td>12,568</td><td>30</td><td>8,850</td><td>12,577</td><td>794</td><td>2015</td><td>2017</td><td>2118 Greenspring Drive</td><td></td><td></td></tr><tr><td>Tucson, AZ</td><td>—</td><td>1,302</td><td>4,925</td><td>990</td><td>1,325</td><td>5,892</td><td>2,886</td><td>2008</td><td>1995</td><td>2055 W. Hospital Dr.</td><td></td><td></td></tr><tr><td>Tustin, CA</td><td>—</td><td>3,345</td><td>541</td><td>325</td><td>3,345</td><td>866</td><td>290</td><td>2015</td><td>1976</td><td>14591 Newport Ave</td><td></td><td></td></tr><tr><td>Tustin, CA</td><td>—</td><td>3,361</td><td>12,039</td><td>1,880</td><td>3,361</td><td>13,919</td><td>2,891</td><td>2015</td><td>1985</td><td>14642 Newport Ave</td><td></td><td></td></tr><tr><td>Van Nuys, CA</td><td>—</td><td>—</td><td>36,187</td><td>—</td><td>—</td><td>36,187</td><td>9,842</td><td>2009</td><td>1991</td><td>6815 Noble Ave.</td><td></td><td></td></tr><tr><td>Voorhees, NJ</td><td>—</td><td>6,404</td><td>24,251</td><td>1,816</td><td>6,477</td><td>25,994</td><td>9,866</td><td>2006</td><td>1997</td><td>900 Centennial Blvd.</td><td></td><td></td></tr><tr><td>Voorhees, NJ</td><td>—</td><td>6</td><td>96,075</td><td>447</td><td>99</td><td>96,429</td><td>25,331</td><td>2010</td><td>2012</td><td>2000 Bowman Drive</td><td></td><td></td></tr><tr><td>Waco, TX</td><td>—</td><td>601</td><td>2,594</td><td>—</td><td>601</td><td>2,594</td><td>—</td><td>2018</td><td>2000</td><td>6600 Fish Pond Rd</td><td></td><td></td></tr><tr><td>Waco, TX</td><td>14,930</td><td>2,250</td><td>28,632</td><td>—</td><td>2,250</td><td>28,632</td><td>—</td><td>2018</td><td>1981</td><td>601 Highway 6 West</td><td></td><td></td></tr><tr><td>Washington, PA</td><td>19,425</td><td>3,981</td><td>31,706</td><td>—</td><td>3,981</td><td>31,706</td><td>—</td><td>2018</td><td>2010</td><td>100 Trich Drive</td><td></td><td></td></tr><tr><td>Wausau, WI</td><td>—</td><td>2,050</td><td>12,175</td><td>—</td><td>2,050</td><td>12,175</td><td>788</td><td>2015</td><td>2017</td><td>1901 Westwood Center Boulevard</td><td></td><td></td></tr><tr><td>Waxahachie, TX</td><td>—</td><td>—</td><td>18,784</td><td>230</td><td>303</td><td>18,711</td><td>1,749</td><td>2016</td><td>2014</td><td>2460 N I-35 East</td><td></td><td></td></tr><tr><td>Wellington, FL</td><td>—</td><td>107</td><td>16,933</td><td>2,705</td><td>326</td><td>19,419</td><td>7,051</td><td>2006</td><td>2000</td><td>10115 Forest Hill Blvd.</td><td></td><td></td></tr><tr><td>Wellington, FL</td><td>—</td><td>388</td><td>13,697</td><td>1,756</td><td>580</td><td>15,261</td><td>5,163</td><td>2007</td><td>2003</td><td>1395 State Rd. 7</td><td></td><td></td></tr><tr><td>West Seneca, NY</td><td>—</td><td>917</td><td>22,435</td><td>4,230</td><td>1,665</td><td>25,917</td><td>10,390</td><td>2007</td><td>1990</td><td>550 Orchard Park Rd</td><td></td><td></td></tr><tr><td>Westlake Village, CA</td><td>6,360</td><td>2,487</td><td>9,776</td><td>—</td><td>2,487</td><td>9,776</td><td>154</td><td>2018</td><td>1989</td><td>1220 La Venta Drive</td><td></td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encumbrances</td><td colspan="2">Initial Cost to Company</td><td rowspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Building &amp; Improvements</td><td>Land</td><td>Building &amp; Improvements</td><td>Accumulated Depreciation (1)</td></tr><tr><td>Westlake Village, CA</td><td>8,002</td><td>2,553</td><td>15,851</td><td>—</td><td>2,553</td><td>15,851</td><td>214</td><td>2018</td><td>1975</td><td>1250 La Venta Drive</td><td></td></tr><tr><td>Woodbridge, VA</td><td>—</td><td>346</td><td>16,629</td><td>—</td><td>346</td><td>16,629</td><td>—</td><td>2018</td><td>2012</td><td>12825 Minnieville Road</td><td></td></tr><tr><td>Zephyrhills, FL</td><td>—</td><td>3,875</td><td>27,270</td><td>—</td><td>3,875</td><td>27,270</td><td>6,850</td><td>2011</td><td>1974</td><td>38135 Market Square Dr</td><td></td></tr><tr><td>Zephyrhills, FL</td><td>—</td><td>5,927</td><td>29,082</td><td>—</td><td>5,927</td><td>29,082</td><td>742</td><td>2018</td><td>2016</td><td>2352 Bruce B Downs Boulevard</td><td></td></tr><tr><td>Outpatient Medical Total</td><td>$386,737</td><td>$645,891</td><td>$5,233,682</td><td>$357,411</td><td>$712,257</td><td>$5,524,727</td><td>$1,276,138</td><td></td><td></td><td></td><td></td></tr></table>



## Welltower Inc.

## Schedule III
Real Estate and Accumulated Depreciation
December 31, 2018

(Dollars in thousands)

<table><tr><td rowspan="2">Description</td><td rowspan="2">Encum brances</td><td colspan="2">Initial Cost to Company</td><td colspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Buildings &amp; Improvements</td><td>Land</td><td>Buildings &amp; Improvements</td><td>Accumulated Depreciation</td><td>Land</td><td>Buildings &amp; Improvements</td><td>Accumulated Depreciation</td></tr><tr><td>Assets Held For Sale:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Agawam, MA</td><td>$ —</td><td>$ 880</td><td>$10,044</td><td>$ —</td><td>$ —</td><td>$ 8,696</td><td>$ —</td><td>2011</td><td>1996</td><td>153 Cardinal Drive</td><td></td><td></td></tr><tr><td>Agawam, MA</td><td>—</td><td>1,230</td><td>13,618</td><td>—</td><td>—</td><td>6,074</td><td>—</td><td>2011</td><td>1975</td><td>61 Cooper Street</td><td></td><td></td></tr><tr><td>Agawam, MA</td><td>—</td><td>930</td><td>15,304</td><td>—</td><td>—</td><td>6,511</td><td>—</td><td>2011</td><td>1970</td><td>55 Cooper Street</td><td></td><td></td></tr><tr><td>Agawam, MA</td><td>—</td><td>920</td><td>10,661</td><td>—</td><td>—</td><td>4,592</td><td>—</td><td>2011</td><td>1985</td><td>464 Main Street</td><td></td><td></td></tr><tr><td>Agawam, MA</td><td>—</td><td>920</td><td>10,562</td><td>—</td><td>—</td><td>4,537</td><td>—</td><td>2011</td><td>1967</td><td>65 Cooper Street</td><td></td><td></td></tr><tr><td>Ayer, MA</td><td>—</td><td>—</td><td>22,074</td><td>—</td><td>—</td><td>8,691</td><td>—</td><td>2011</td><td>1988</td><td>400 Groton Road</td><td></td><td></td></tr><tr><td>Beachwood, OH</td><td>—</td><td>1,260</td><td>23,478</td><td>—</td><td>—</td><td>10,503</td><td>—</td><td>2001</td><td>1990</td><td>3800 Park East Drive</td><td></td><td></td></tr><tr><td>Birmingham, UKG</td><td>—</td><td>4</td><td>21,321</td><td>—</td><td>—</td><td>13,200</td><td>—</td><td>2013</td><td>2006</td><td>5 Church Road, Edgbaston</td><td></td><td></td></tr><tr><td>Bridgewater, NJ</td><td>—</td><td>1,850</td><td>3,050</td><td>—</td><td>—</td><td>3,342</td><td>—</td><td>2004</td><td>1970</td><td>875 Route 202/206 North</td><td></td><td></td></tr><tr><td>Broadview Heights, OH</td><td>—</td><td>920</td><td>12,400</td><td>—</td><td>—</td><td>9,590</td><td>—</td><td>2001</td><td>1984</td><td>2801 E. Royatlon Rd.</td><td></td><td></td></tr><tr><td>Canton, MA</td><td>—</td><td>820</td><td>8,201</td><td>—</td><td>—</td><td>2,626</td><td>—</td><td>2002</td><td>1993</td><td>One Meadowbrook Way</td><td></td><td></td></tr><tr><td>Centerville, MA</td><td>—</td><td>1,300</td><td>27,357</td><td>—</td><td>—</td><td>23,139</td><td>—</td><td>2011</td><td>1998</td><td>22 Richardson Road</td><td></td><td></td></tr><tr><td>Charles Town, WV</td><td>—</td><td>230</td><td>22,834</td><td>—</td><td>—</td><td>18,509</td><td>—</td><td>2011</td><td>1997</td><td>219 Prospect Ave</td><td></td><td></td></tr><tr><td>Cinnaminson, NJ</td><td>—</td><td>860</td><td>6,663</td><td>—</td><td>—</td><td>6,014</td><td>—</td><td>2011</td><td>1965</td><td>1700 Wynwood Drive</td><td></td><td></td></tr><tr><td>Cloquet, MN</td><td>—</td><td>340</td><td>4,660</td><td>—</td><td>—</td><td>4,285</td><td>—</td><td>2011</td><td>2006</td><td>705 Horizon Circle</td><td></td><td></td></tr><tr><td>Concord, NH</td><td>—</td><td>720</td><td>3,041</td><td>—</td><td>—</td><td>3,344</td><td>—</td><td>2011</td><td>1926</td><td>227 Pleasant Street</td><td></td><td></td></tr><tr><td>Dallas, TX</td><td>—</td><td>1,080</td><td>9,655</td><td>—</td><td>—</td><td>4,412</td><td>—</td><td>2011</td><td>1997</td><td>3611 Dickason Avenue</td><td></td><td></td></tr><tr><td>Gettysburg, PA</td><td>—</td><td>590</td><td>8,913</td><td>—</td><td>—</td><td>7,501</td><td>—</td><td>2011</td><td>1987</td><td>867 York Road</td><td></td><td></td></tr><tr><td>Glastonbury, CT</td><td>—</td><td>1,950</td><td>9,532</td><td>—</td><td>—</td><td>5,500</td><td>—</td><td>2011</td><td>1966</td><td>72 Salmon Brook Drive</td><td></td><td></td></tr><tr><td>Hamburg, PA</td><td>—</td><td>840</td><td>10,543</td><td>—</td><td>—</td><td>8,994</td><td>—</td><td>2011</td><td>1966</td><td>125 Holly Road</td><td></td><td></td></tr><tr><td>Houston, TX</td><td>—</td><td>5,090</td><td>9,471</td><td>—</td><td>—</td><td>7,840</td><td>—</td><td>2007</td><td>2009</td><td>15015 Cypress Woods Medical Drive</td><td></td><td></td></tr><tr><td>Lancaster, NH</td><td>—</td><td>160</td><td>434</td><td>—</td><td>—</td><td>493</td><td>—</td><td>2011</td><td>1905</td><td>63 Country Village Road</td><td></td><td></td></tr><tr><td>Langhorne, PA</td><td>—</td><td>1,350</td><td>24,881</td><td>—</td><td>—</td><td>3,551</td><td>—</td><td>2011</td><td>1979</td><td>262 Toll Gate Road</td><td></td><td></td></tr><tr><td>Lowell, MA</td><td>—</td><td>1,070</td><td>13,481</td><td>—</td><td>—</td><td>1,960</td><td>—</td><td>2011</td><td>1975</td><td>841 Merrimack Street</td><td></td><td></td></tr><tr><td>Lowell, MA</td><td>—</td><td>680</td><td>3,378</td><td>—</td><td>—</td><td>3,155</td><td>—</td><td>2011</td><td>1969</td><td>30 Princeton Blvd</td><td></td><td></td></tr><tr><td>Mendham, NJ</td><td>—</td><td>1,240</td><td>27,169</td><td>—</td><td>—</td><td>23,295</td><td>—</td><td>2011</td><td>1968</td><td>84 Cold Hill Road</td><td></td><td></td></tr><tr><td>Merriam, KS</td><td>—</td><td>—</td><td>1,996</td><td>—</td><td>—</td><td>—</td><td>—</td><td>2011</td><td>1980</td><td>7301 Frontage Street</td><td></td><td></td></tr><tr><td>Merriam, KS</td><td>—</td><td>—</td><td>5,862</td><td>—</td><td>—</td><td>—</td><td>—</td><td>2011</td><td>1985</td><td>9119 West 74th Street</td><td></td><td></td></tr><tr><td>Middletown, RI</td><td>—</td><td>2,480</td><td>24,628</td><td>—</td><td>—</td><td>21,727</td><td>—</td><td>2011</td><td>1998</td><td>303 Valley Road</td><td></td><td></td></tr><tr><td>Millville, NJ</td><td>—</td><td>840</td><td>29,944</td><td>—</td><td>—</td><td>24,559</td><td>—</td><td>2011</td><td>1986</td><td>54 Sharp Street</td><td></td><td></td></tr><tr><td>Monroe Twp, NJ</td><td>—</td><td>1,160</td><td>13,193</td><td>—</td><td>—</td><td>11,403</td><td>—</td><td>2011</td><td>1996</td><td>292 Applegarth Road</td><td></td><td></td></tr><tr><td>Mystic, CT</td><td>—</td><td>1,400</td><td>18,274</td><td>—</td><td>—</td><td>15,316</td><td>—</td><td>2011</td><td>2001</td><td>20 Academy Lane Mystic</td><td></td><td></td></tr><tr><td>Niantic, CT</td><td>—</td><td>1,320</td><td>25,986</td><td>—</td><td>—</td><td>25,167</td><td>—</td><td>2011</td><td>2001</td><td>417 Main Street</td><td></td><td></td></tr><tr><td>North Cape May, NJ</td><td>—</td><td>77</td><td>151</td><td>48</td><td>—</td><td>276</td><td>—</td><td>2015</td><td>1988</td><td>610 Town Bank Road</td><td></td><td></td></tr><tr><td>North Cape May, NJ</td><td>—</td><td>600</td><td>22,266</td><td>—</td><td>—</td><td>18,270</td><td>—</td><td>2011</td><td>1995</td><td>700 Townbank Road</td><td></td><td></td></tr><tr><td>Palm Springs, FL</td><td>—</td><td>739</td><td>4,066</td><td>—</td><td>—</td><td>2,061</td><td>—</td><td>2006</td><td>1993</td><td>1640 S. Congress Ave.</td><td></td><td></td></tr><tr><td>Palm Springs, FL</td><td>—</td><td>1,182</td><td>7,765</td><td>—</td><td>—</td><td>3,477</td><td>—</td><td>2006</td><td>1997</td><td>1630 S. Congress Ave.</td><td></td><td></td></tr><tr><td>Pennsauken, NJ</td><td>—</td><td>900</td><td>10,780</td><td>—</td><td>—</td><td>9,172</td><td>—</td><td>2011</td><td>1985</td><td>5101 North Park Drive</td><td></td><td></td></tr><tr><td>Providence, RI</td><td>—</td><td>2,655</td><td>21,910</td><td>—</td><td>—</td><td>16,021</td><td>—</td><td>2011</td><td>1998</td><td>700 Smith Street</td><td></td><td></td></tr><tr><td>Rockville, CT</td><td>—</td><td>1,500</td><td>4,835</td><td>—</td><td>—</td><td>5,073</td><td>—</td><td>2011</td><td>1960</td><td>1253 Hartford Turnpike</td><td></td><td></td></tr><tr><td>Sanatoga, PA</td><td>—</td><td>980</td><td>30,695</td><td>—</td><td>—</td><td>14,166</td><td>—</td><td>2011</td><td>1993</td><td>225 Evergreen Road</td><td></td><td></td></tr><tr><td>South Boston, MA</td><td>—</td><td>385</td><td>2,002</td><td>1,525</td><td>—</td><td>3,912</td><td>—</td><td>1995</td><td>1961</td><td>804 E. Seventh St.</td><td></td><td></td></tr><tr><td>South Windsor, CT</td><td>—</td><td>3,000</td><td>29,295</td><td>—</td><td>—</td><td>26,338</td><td>—</td><td>2011</td><td>1999</td><td>432 Buckland Road</td><td></td><td></td></tr><tr><td>Swanton, OH</td><td>—</td><td>330</td><td>6,370</td><td>—</td><td>—</td><td>4,160</td><td>—</td><td>2004</td><td>1950</td><td>401 W. Airport Hwy.</td><td></td><td></td></tr><tr><td>Troy, OH</td><td>—</td><td>470</td><td>16,730</td><td>—</td><td>—</td><td>10,730</td><td>—</td><td>2004</td><td>1971</td><td>512 Crescent Drive</td><td></td><td></td></tr></table>



<table><tr><td rowspan="2">Description</td><td rowspan="2">Encum brances</td><td colspan="2">Initial Cost to Company</td><td colspan="2">Cost Capitalized Subsequent to Acquisition</td><td colspan="4">Gross Amount at Which Carried at Close of Period</td><td rowspan="2">Year Acquired</td><td rowspan="2">Year Built</td><td rowspan="2">Address</td></tr><tr><td>Land</td><td>Buildings &amp; Improvements</td><td>Land</td><td>Buildings &amp; Improvements</td><td>Accumulated Depreciation</td><td>Land</td><td>Buildings &amp; Improvements</td><td>Accumulated Depreciation</td></tr><tr><td>Trumbull, CT</td><td>—</td><td>2,850</td><td>37,685</td><td>—</td><td>—</td><td>32,020</td><td>—</td><td>2011</td><td>1998</td><td>2750 Reservoir Avenue</td><td></td></tr><tr><td>Wallingford, CT</td><td>—</td><td>490</td><td>1,210</td><td>—</td><td>—</td><td>727</td><td>—</td><td>2011</td><td>1962</td><td>35 Marc Drive</td><td></td></tr><tr><td>Warwick, RI</td><td>—</td><td>2,400</td><td>24,635</td><td>—</td><td>—</td><td>21,633</td><td>—</td><td>2011</td><td>1998</td><td>75 Minnesota Avenue</td><td></td></tr><tr><td>Waterbury, CT</td><td>—</td><td>2,460</td><td>39,547</td><td>—</td><td>—</td><td>30,909</td><td>—</td><td>2011</td><td>1998</td><td>180 Scott Road</td><td></td></tr><tr><td>West Chester, PA</td><td>—</td><td>1,350</td><td>29,237</td><td>—</td><td>—</td><td>24,564</td><td>—</td><td>2011</td><td>1974</td><td>800 West Miner Street</td><td></td></tr><tr><td>West Orange, NJ</td><td>—</td><td>2,280</td><td>10,687</td><td>—</td><td>—</td><td>10,571</td><td>—</td><td>2011</td><td>1963</td><td>20 Summit Street</td><td></td></tr><tr><td>Westlake, OH</td><td>—</td><td>1,330</td><td>17,926</td><td>—</td><td>—</td><td>8,673</td><td>—</td><td>2001</td><td>1985</td><td>27601 Westchester Pkwy.</td><td></td></tr><tr><td>Wilbraham, MA</td><td>—</td><td>660</td><td>17,639</td><td>—</td><td>—</td><td>14,484</td><td>—</td><td>2011</td><td>2000</td><td>2387 Boston Road</td><td></td></tr><tr><td>Wilkes-Barre, PA</td><td>—</td><td>570</td><td>2,301</td><td>—</td><td>—</td><td>1,176</td><td>—</td><td>2011</td><td>1992</td><td>300 Courtright Street</td><td></td></tr><tr><td>Windsor, CT</td><td>—</td><td>2,250</td><td>8,539</td><td>—</td><td>—</td><td>10,218</td><td>—</td><td>2011</td><td>1969</td><td>One Emerson Drive</td><td></td></tr><tr><td>Windsor, CT</td><td>—</td><td>1,800</td><td>600</td><td>424</td><td>—</td><td>2,824</td><td>—</td><td>2011</td><td>1974</td><td>One Emerson Drive</td><td></td></tr><tr><td>Wyncote, PA</td><td>—</td><td>2,700</td><td>22,244</td><td>—</td><td>—</td><td>20,290</td><td>—</td><td>2011</td><td>1960</td><td>1245 Church Road</td><td></td></tr><tr><td>Assets Held For Sale</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total</td><td>$ —</td><td>$ 68,392</td><td>$ 821,723</td><td>$ 1,997</td><td>$ —</td><td>$ 590,271</td><td>$ —</td><td></td><td></td><td></td><td></td></tr><tr><td>Summary:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Seniors Housing</td><td>$1,810,587</td><td>$1,331,171</td><td>$14,047,033</td><td>$1,206,757</td><td>$1,373,258</td><td>$15,211,900</td><td>$2,962,334</td><td></td><td></td><td></td><td></td></tr><tr><td>Operating</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Triple-net</td><td>288,387</td><td>1,096,169</td><td>8,585,481</td><td>301,960</td><td>1,119,576</td><td>8,864,034</td><td>1,261,486</td><td></td><td></td><td></td><td></td></tr><tr><td>Outpatient Medical</td><td>386,737</td><td>645,891</td><td>5,233,682</td><td>357,411</td><td>712,257</td><td>5,524,727</td><td>1,276,138</td><td></td><td></td><td></td><td></td></tr><tr><td>Construction in progress</td><td>—</td><td>—</td><td>194,365</td><td>—</td><td>—</td><td>194,365</td><td>—</td><td></td><td></td><td></td><td></td></tr><tr><td>Total continuing operating properties</td><td>2,485,711</td><td>3,073,231</td><td>28,060,561</td><td>1,866,128</td><td>3,205,091</td><td>29,795,026</td><td>5,499,958</td><td></td><td></td><td></td><td></td></tr><tr><td>Assets held for sale</td><td>—</td><td>68,392</td><td>821,723</td><td>1,997</td><td>—</td><td>590,271</td><td>—</td><td></td><td></td><td></td><td></td></tr><tr><td>Total investments in real property owned</td><td>$2,485,711</td><td>$3,141,623</td><td>$28,882,284</td><td>$1,868,125</td><td>$3,205,091</td><td>$30,385,297</td><td>$5,499,958</td><td></td><td></td><td></td><td></td></tr></table>

(1) Please see Note 2 to our consolidated financial statements for information regarding lives used for depreciation and amortization.

(2) Represents real property asset associated with a capital lease.



<table><tr><td rowspan="3"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2018</td><td>2017</td><td>2016</td></tr><tr><td colspan="3">(in thousands)</td></tr><tr><td>Investment in real estate:</td><td></td><td></td><td></td></tr><tr><td>Beginning balance</td><td>$30,581,948</td><td>$30,041,058</td><td>$29,865,490</td></tr><tr><td>Acquisitions and development</td><td>4,598,670</td><td>1,276,636</td><td>2,834,279</td></tr><tr><td>Improvements</td><td>266,183</td><td>250,276</td><td>219,146</td></tr><tr><td>Deconsolidation of previously consolidated venture</td><td>—</td><td>(144,897)</td><td>—</td></tr><tr><td>Impairment of assets</td><td>(71,336)</td><td>(101,527)</td><td>(37,207)</td></tr><tr><td>Dispositions</td><td>(1,330,679)</td><td>(1,203,247)</td><td>(2,411,219)</td></tr><tr><td>Foreign currency translation</td><td>(454,398)</td><td>415,879</td><td>(429,431)</td></tr><tr><td>Other(1)</td><td>—</td><td>47,770</td><td>—</td></tr><tr><td>Ending balance(2)</td><td>$33,590,388</td><td>$30,581,948</td><td>$30,041,058</td></tr><tr><td>Accumulated depreciation:</td><td></td><td></td><td></td></tr><tr><td>Beginning balance</td><td>$4,838,370</td><td>$4,093,494</td><td>$3,796,297</td></tr><tr><td>Depreciation and amortization expenses</td><td>950,459</td><td>921,720</td><td>901,242</td></tr><tr><td>Amortization of above market leases</td><td>6,375</td><td>7,303</td><td>7,909</td></tr><tr><td>Disposition and other</td><td>(205,562)</td><td>(192,029)</td><td>(514,651)</td></tr><tr><td>Foreign currency translation</td><td>(89,684)</td><td>7,882</td><td>(97,303)</td></tr><tr><td>Ending balance</td><td>$5,499,958</td><td>$4,838,370</td><td>$4,093,494</td></tr></table>

(1) Primarily relates to the acquisition of an asset through foreclosure.

(2) The unaudited aggregate cost for tax purposes for real property equals $25,618,090,000 at December 31, 2018.



## Welltower Inc.

## Schedule IV— Mortgage Loans on Real Estate
December 31, 2018

<table><tr><td rowspan="2">Location</td><td rowspan="2">Segment</td><td rowspan="2">Interest Rate</td><td rowspan="2">Final Maturity Date</td><td rowspan="2">Monthly Payment Terms</td><td rowspan="2">Prior Liens</td><td rowspan="2">Face Amount of Mortgages</td><td rowspan="2">Carrying Amount of Mortgages</td><td rowspan="2">Principal Amount of Loans Subject to Delinquent Principal or Interest</td></tr><tr></tr><tr><td>First mortgages relating to 1 property located in:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>California</td><td>Triple-net</td><td>8.11%</td><td>12/15/2020</td><td>$—</td><td>$—</td><td>$ 28,000</td><td>$ 9,247</td><td>$—</td><td></td></tr><tr><td>California</td><td>Triple-net</td><td>7.95%</td><td>1/1/2022</td><td>1</td><td>—</td><td>131,100</td><td>53,172</td><td>—</td><td></td></tr><tr><td>United Kingdom</td><td>Triple-net</td><td>8.54%</td><td>12/14/2018</td><td>—</td><td>—</td><td>2,678</td><td>1,284</td><td>—</td><td></td></tr><tr><td>United Kingdom</td><td>Triple-net</td><td>8.00%</td><td>8/24/2022</td><td>—</td><td>—</td><td>11,041</td><td>6,638</td><td>—</td><td></td></tr><tr><td>United Kingdom</td><td>Triple-net</td><td>8.55%</td><td>7/1/2019</td><td>—</td><td>—</td><td>14,600</td><td>14,599</td><td>—</td><td></td></tr><tr><td>United Kingdom</td><td>Triple-net</td><td>7.00%</td><td>3/15/2022</td><td>—</td><td>—</td><td>26,748</td><td>20,283</td><td>—</td><td></td></tr><tr><td>United Kingdom</td><td>Triple-net</td><td>8.28%</td><td>7/6/2019</td><td>—</td><td>—</td><td>19,131</td><td>19,131</td><td>—</td><td></td></tr><tr><td>Oklahoma</td><td>Triple-net</td><td>9.32%</td><td>11/1/2019</td><td>—</td><td>—</td><td>11,610</td><td>11,595</td><td>—</td><td></td></tr><tr><td>Pennsylvania</td><td>Triple-net</td><td>8.47%</td><td>3/1/2022</td><td>—</td><td>—</td><td>15,530</td><td>14,237</td><td>—</td><td></td></tr><tr><td>Florida</td><td>Triple-net</td><td>10.20%</td><td>6/23/2021</td><td>—</td><td>—</td><td>17,100</td><td>17,385</td><td>—</td><td></td></tr><tr><td>North Carolina</td><td>Triple-net</td><td>7.60%</td><td>12/18/2023</td><td>—</td><td>—</td><td>30,883</td><td>3,000</td><td>—</td><td></td></tr><tr><td>Texas</td><td>Outpatient medical</td><td>7.60%</td><td>1/19/2025</td><td>—</td><td>—</td><td>3,740</td><td>3,733</td><td>—</td><td></td></tr><tr><td>United Kingdom</td><td>Triple-net</td><td>8.50%</td><td>12/31/2021</td><td>—</td><td>—</td><td>19,104</td><td>6,505</td><td>—</td><td></td></tr><tr><td>First mortgages relating to multiple properties:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>4 properties in Texas</td><td>Triple-net</td><td>7.95%</td><td>1/1/2022</td><td>1</td><td>—</td><td>106,218</td><td>65,162</td><td></td><td></td></tr><tr><td>Second mortgages relating to 1 property located in:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Texas</td><td>Triple-net</td><td>12.17%</td><td>5/1/2019</td><td>—</td><td>11,367</td><td>3,100</td><td>3,100</td><td></td><td></td></tr><tr><td>Totals</td><td></td><td></td><td></td><td></td><td>$11,367</td><td>$440,583</td><td>$249,071</td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3">Year Ended December 31,</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td>2018</td><td>2017</td><td>2016</td><td></td></tr><tr><td>Reconciliation of mortgage loans:</td><td></td><td></td><td></td><td></td><td></td><td colspan="3">(in thousands)</td></tr><tr><td>Balance at beginning of year</td><td></td><td></td><td></td><td></td><td></td><td>$ 306,120</td><td>$ 485,735</td><td>$ 635,492</td></tr><tr><td>Additions:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>New mortgage loans</td><td></td><td></td><td></td><td></td><td></td><td>25,290</td><td>6,706</td><td>8,223</td></tr><tr><td>Draws on existing loans</td><td></td><td></td><td></td><td></td><td></td><td>36,458</td><td>58,224</td><td>92,815</td></tr><tr><td>Total Additions</td><td></td><td></td><td></td><td></td><td></td><td>61,748</td><td>64,930</td><td>101,038</td></tr><tr><td>Deductions:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Collections of principal</td><td></td><td></td><td></td><td></td><td></td><td>(116,905)</td><td>(180,135)</td><td>(191,134)</td></tr><tr><td>Conversions to real property</td><td></td><td></td><td></td><td></td><td></td><td>—</td><td>—</td><td>(45,044)</td></tr><tr><td>Change in allowance for loan losses and charge-offs</td><td></td><td></td><td></td><td></td><td></td><td>—</td><td>(71,535)</td><td>(3,053)</td></tr><tr><td>Total deductions</td><td></td><td></td><td></td><td></td><td></td><td>(116,905)</td><td>(251,670)</td><td>(239,231)</td></tr><tr><td>Change in balance due to foreign currency translation</td><td></td><td></td><td></td><td></td><td></td><td>(1,892)</td><td>7,125</td><td>(11,564)</td></tr><tr><td>Balance at end of year</td><td></td><td></td><td></td><td></td><td></td><td>$ 249,071</td><td>$ 306,120</td><td>$ 485,735</td></tr></table>



# CERTIFICATION OF CHIEF EXECUTIVE OFFICER

## I. Thomas J. DeRosa, certify that:

1. I have reviewed this annual report on Form 10-K of Welltower Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2019



# CERTIFICATION OF CHIEF FINANCIAL OFFICER

## I, John A. Goodey, certify that:

1. I have reviewed this annual report on Form 10-K of Welltower Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2019

/s/ JOHN A. GOODEY

John A. Goodey,

Chief Financial Officer



## CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

I, Thomas J. DeRosa, the Chief Executive Officer of Welltower Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that (i) the Annual Report on Form 10-K for the Company for the year ended December 31, 2018 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ THOMAS J. DEROSA

Thomas J. DeRosa,

Chief Executive Officer

Date: February 25, 2019

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.



## CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

I, John A. Goodey, the Chief Financial Officer of Welltower Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that (i) the Annual Report on Form 10-K for the Company for the year ended December 31, 2018 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JOHN A. GOODEY

John A. Goodey,

Chief Financial Officer

Date: February 25, 2019

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.



BOARD OF DIRECTORS
Kenneth J. Bacon
Age 64
Co-Founder and Managing Partner
RailField Realty Partners
Bethesda, Maryland

Thomas J. DeRosa
Age 61
Chief Executive Officer
Welltower Inc.
Toledo, Ohio

Karen B. DeSalvo
Age 53
Physician and Professor of Medicine and
Population Health
University of Texas at Austin Dell Medical School
Austin, Texas

Jeffrey H. Donahue
Age 72
Chairman
Former President & Chief Executive Officer
Enterprise Community Investment, Inc.
Columbia, Maryland

Geoffrey G. Meyers
Age 74
Retired Chief Financial Officer,
Executive Vice President and Treasurer
HCR ManorCare, Inc.
Toledo, Ohio

Timothy J. Naughton
Age 57
Chairman, Chief Executive Officer and President
AvalonBay Communities, Inc.
Arlington, Virginia

Sharon M. Oster
Age 70
Frederic D. Wolfe Professor Emeritus of
Management & Entrepreneurship, Professor of
Economics
Yale University School of Management
New Haven, Connecticut

Judith C. Pelham
Age 73
President Emeritus
Trinity Health
Livonia, Michigan

Sergio D. Rivera
Age 56
President
Ocean Reef Club
Key Largo, Florida

Johnese M. Spisso
Age 58
President of UCLA Health, Chief Executive Officer of UCLA Hospital System and Associate Vice Chancellor of UCLA Health Sciences
Los Angeles, California

Kathryn M. Sullivan
Age 63
Former Chief Executive Officer
United Healthcare Employer and Individual,
Local Markets UnitedHealth Group
Minnetonka, Minnesota

R. Scott Trumbull
Age 70
Retired CEO and Chairman of the Board
Franklin Electric Co., Inc.
Fort Wayne, Indiana

Gary Whitelaw
Age 63
Chief Executive Officer
Bentall Kennedy
Toronto, Canada

## COMMITTEES OF THE BOARD
Audit Committee
Meyers, Rivera, Trumbull (Chair)

Compensation Committee
Bacon, Naughton, Oster (Chair), Pelham

Investment Committee
Bacon, Naughton (Chair), Rivera, Whitelaw

Nominating/Corporate Governance Committee
Donahue (Chair), Meyers, Oster, Pelham,
Whitelaw

Executive Committee
DeRosa, Donahue (Chair), Naughton, Oster,
Trumbull

## EXECUTIVE OFFICERS
Thomas J. DeRosa
Chief Executive Officer

John Goodey
Executive Vice President - Chief Financial Officer

Mercedes T. Kerr
Executive Vice President - Business &
Relationship Management

Shankh Mitra
Executive Vice President - Chief Investment
Officer

Matthew G. McQueen
Senior Vice President – General Counsel &
Corporate Secretary

## CORPORATE OFFICES
Welltower Inc.

4500 Dorr Street
Toledo, Ohio 43615-4040
(877) 670-0070
(419) 247-2800
(419) 247-2826 Fax
www.welltower.com

384 employees as of 1/31/19
3,668 registered shareholders as of 1/31/19



## TRANSFER AGENT, REGISTRAR,
DIVIDEND DISBURSING AGENT AND
PLAN ADMINISTRATOR
Computershare

Computershare
P.O. Box 505000
Louisville, KY 40233
(888) 216-7206
www.computershare.com/investor

## SHAREHOLDER SERVICES

Computershare provides shareholder services to registered shareholders via telephone and online. Computershare representatives can assist you in change of name or address, consolidation of accounts, duplicate mailings, dividend reinvestment enrollment, lost share certificates, transfer of shares to another person and additional administrative services. For more information, go to www.computershare.com/investor or call toll-free (888) 216-7206.

## INVESTOR INFORMATION

Current and prospective investors can access the Annual Report, Proxy Statement, SEC filings, earnings announcements and other press releases on our website at www.welltower.com, or by email request to info@welltower.com.

## EXCHANGE LISTING

New York Stock Exchange
Trading Symbol: WELL

## MEMBER

National Association of Real Estate Investment Trusts

## INDUSTRY PARTNER
World Economic Forum

## FORWARD-LOOKING STATEMENTS

This Annual Report and the Letter to Shareholders contain “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. For example, 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. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the company’s actual results to differ from the company’s expectations discussed in the forward-looking statements. Important factors that could cause our actual results to be materially different from the forward-looking statements are discussed in our Form 10-K under the heading “Risk Factors.” We assume no obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.

## INDEPENDENT AUDITORS
Ernst & Young LLP
Toledo, Ohio

## WELLTOWER ONLINE
Our website: www.welltower.com

www.twitter.com/welltower
www.linkedin.com/company/welltower

To view the Welltower 2018 Annual Report, visit www.welltower.com.



## welltower \( ^{®} \) 

www.welltower.com

4500 Dorr Street
Toledo, Ohio 43615-4040
877.670.0070
419.247.2800