EDGAR 10-K Filing

Company CIK: 740260
Filing Year: 2021
Filename: 740260_10-K_2021_0000740260-21-000048.json

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ITEM 1. BUSINESS
ITEM 1. Business
BUSINESS
Overview
Ventas, Inc., an S&P 500 company, is a real estate investment trust (“REIT”) operating at the intersection of healthcare and real estate, with a highly diversified portfolio of senior housing; life science, research and innovation; and healthcare properties; which we generally refer to as “healthcare real estate,” located throughout the United States, Canada and the United Kingdom. As of December 31, 2020, we owned or managed through unconsolidated real estate entities approximately 1,200 properties (including properties classified as held for sale), consisting of senior housing communities, medical office buildings (“MOBs”), life science, research and innovation centers, inpatient rehabilitation facilities (“IRFs”) and long-term acute care facilities (“LTACs”), and health systems. Our company was originally founded in 1983 and is headquartered in Chicago, Illinois with an additional office in Louisville, Kentucky.
We primarily invest in a diversified portfolio of healthcare real estate assets through wholly owned subsidiaries and other co-investment entities. We operate through three reportable business segments: triple-net leased properties, senior living operations, which we also refer to as SHOP, and office operations. See our Consolidated Financial Statements and the related notes, including “Note 2 - Accounting Policies” and “Note 19 - Segment Information,” included in Part II, Item 8 of this Annual Report on Form 10-K (the “Annual Report”). Our senior housing properties are either operated under triple-net leases in our triple-net leased properties segment or through independent third-party managers in our senior living operations segment.
As of December 31, 2020, we leased a total of 366 properties (excluding properties within our office operations reportable business segment) to various healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures. Our three largest tenants, Brookdale Senior Living Inc. (together with its subsidiaries, “Brookdale Senior Living”), Ardent Health Partners, LLC (together with its subsidiaries, “Ardent”) and Kindred Healthcare, LLC (together with its subsidiaries, “Kindred”) leased from us 121 properties (excluding eight properties managed by Brookdale Senior Living pursuant to long-term management agreements), 12 properties and 32 properties, respectively, as of December 31, 2020.
As of December 31, 2020, pursuant to long-term management agreements, we engaged independent operators, such as Atria Senior Living, Inc. (“Atria”) and Sunrise Senior Living, LLC (together with its subsidiaries, “Sunrise”), to manage 441 senior housing communities in our senior living operations segment for us.
Through our Lillibridge Healthcare Services, Inc. (“Lillibridge”) subsidiary and our ownership interest in PMB Real Estate Services LLC (“PMBRES”), we also provide MOB management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. In addition, from time to time, we make secured and non-mortgage loans and other investments relating to senior housing and healthcare operators or properties.
During fiscal 2020 and continuing into fiscal 2021, the world has been, and continues to be, impacted by the novel coronavirus (“COVID-19”) pandemic. COVID-19 and actions taken to prevent its spread have negatively affected our businesses in a number of ways and are expected to continue to do so. See “Risk Factors” in Part I, Item 1A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and “Consolidated Financial Statements and the related notes thereto” included in Part II, Item 8, in each case, of this Annual Report.
Business Strategy
We aim to enhance shareholder value by delivering consistent, superior total returns through a strategy of (1) generating reliable and growing cash flows, (2) maintaining a balanced, diversified portfolio of high-quality assets and (3) preserving our financial strength, flexibility and liquidity.
Generating Reliable and Growing Cash Flows
Generating reliable and growing cash flows from our senior housing and healthcare assets enables us to pay regular cash dividends to stockholders and creates opportunities to increase stockholder value through profitable investments. The
combination of steady contractual growth from our long-term triple-net leases, steady, reliable cash flows from our loan investments and stable cash flows from our office buildings with the higher growth potential inherent in our senior housing operating communities drives our ability to generate sustainable, growing cash flows that are resilient to economic downturns.
Maintaining a Balanced, Diversified Portfolio of High-Quality Assets
We believe that maintaining a balanced portfolio of high-quality assets diversified by investment type, geographic location, asset type, tenant or operator, revenue source and operating model diminishes the risk that any single factor or event could materially harm our business. Portfolio diversification also enhances the reliability of our cash flows by reducing our exposure to any particular asset class or market, or individual tenant, borrower or manager and making us less susceptible to certain risks, including risks related to regulatory changes, climate events and economic downturns or global health events.
Preserving Our Financial Strength, Flexibility and Liquidity
A strong, flexible balance sheet and excellent liquidity position us to capitalize on strategic growth opportunities in the senior housing and healthcare industries through acquisitions, investments and development and redevelopment projects. We maintain our financial strength to pursue profitable investment opportunities by actively managing our leverage, improving our cost of capital and preserving our access to multiple sources of capital and liquidity, including unsecured bank debt, mortgage financings and public and private debt and equity markets.
Portfolio Summary
The following table summarizes our consolidated portfolio of properties and other investments, including construction in progress, as of and for the year ended December 31, 2020:
Real Estate Property Investments Revenues
Asset Type # of
Properties (1)
# of Units/
Sq. Ft./ Beds(2)
Real Estate Property Investment, at Cost Percent of
Total Real Estate Property Investments Real Estate
Property
Investment Per Unit/Bed/Sq. Ft. Revenue Percent of Total Revenues
(Dollars in thousands)
Senior housing communities 730 71,629 $18,313,746 64.4 % $ 255.7 $2,589,991 68.4 %
MOBs(3)
343 19,591,131 5,704,700 20.1 0.3 597,229 15.7
Research and innovation centers 31 5,451,703 2,031,666 7.1 0.4 216,624 5.7
IRFs and LTACs
37 3,139 496,259 1.7 158.1 164,239 4.3
Health systems 13 2,064 1,522,287 5.4 737.5 121,179 3.2
SNFs 16 1,732 193,808 0.7 111.9 17,011 0.4
Development properties and other 10 165,234 0.6
Total real estate investments, at cost 1,180 $ 28,427,700 100.0 %
Income from loans and investments
80,505 2.1
Interest and other income 7,609 0.2
Revenues related to assets classified as held for sale
2 970 0.0
Total revenues $ 3,795,357 100.0 %
(1)As of December 31, 2020, we also owned nine senior housing communities, nine research and innovation centers and two MOBs through investments in unconsolidated real estate entities. Our consolidated properties were located in 45 states, the District of Columbia, seven Canadian provinces and the United Kingdom and were operated or managed by 82 unaffiliated healthcare operating companies.
(2)Senior housing communities are generally measured in units; MOBs and research and innovation centers are measured by square footage; and IRFs and LTACs, health systems and skilled nursing facilities (“SNFs”) are generally measured by licensed bed count.
(3)As of December 31, 2020, we leased 66 of our consolidated MOBs pursuant to triple-net leases, Lillibridge or PMBRES managed 268 of our consolidated MOBs and nine of our consolidated MOBs were managed by five unaffiliated managers. Through Lillibridge, we also provided management and leasing services for 73 MOBs owned by third parties as of December 31, 2020.
Senior Housing Communities
Our senior housing communities include independent and assisted living communities, continuing care retirement communities and communities providing care for individuals with Alzheimer’s disease and other forms of dementia or memory loss. These communities offer studio, one- and two-bedroom residential units on a month-to-month basis primarily to elderly individuals requiring various levels of assistance. Basic services for residents of these communities include housekeeping,
meals in a central dining area and group activities organized by the staff with input from the residents. More extensive care and personal supervision, at additional fees, are also available for such needs as eating, bathing, grooming, transportation, limited therapeutic programs and medication administration, which allow residents certain conveniences and enable them to live as independently as possible according to their abilities. These services are often met by home health providers and through close coordination with the resident’s physician and SNFs. Charges for room, board and services are generally paid from private sources.
Medical Office Buildings
Typically, our MOBs are multi-tenant properties leased to several unrelated medical practices, although in many cases they may be associated with a large single specialty or multi-specialty group. Tenants include physicians, dentists, psychologists, therapists and other healthcare providers, who require space devoted to patient examination and treatment, diagnostic imaging, outpatient surgery and other outpatient services. MOBs are similar to commercial office buildings, although they require greater plumbing, electrical and mechanical systems to accommodate physicians’ requirements such as sinks in every room, brighter lights and specialized medical equipment. As of December 31, 2020, we owned or managed through unconsolidated real estate entities for third parties approximately 21 million square feet of MOBs that are predominantly located on or near a health system.
Research and Innovation Centers, Life Science
Our life science, research and innovation centers contain laboratory and office space primarily for universities, academic medical centers, technology, biotechnology, medical device and pharmaceutical companies and other organizations involved in the life science, research and innovation industry. While these properties have characteristics similar to commercial office buildings, they generally contain more advanced electrical, mechanical, and heating, ventilating and air conditioning systems. The facilities generally have specialty equipment including emergency generators, fume hoods, lab bench tops and related amenities. In many instances, research and innovation center tenants make significant investments to improve their leased space, in addition to landlord improvements, to accommodate biology, chemistry or medical device research initiatives. Our research and innovation centers are often located on or contiguous to university and academic medical campuses. As of December 31, 2020, we own or have investments in nearly 9 million square feet spanning 40 operating properties and three in progress ground-up development properties, including a presence in the top two life sciences clusters, South San Francisco, California and Cambridge, Massachusetts.
Inpatient Rehabilitation and Long-Term Acute Care Facilities
We have 29 properties that are operated as LTACs. LTACs have a Medicare average length of stay of greater than 25 days and serve medically complex, chronically ill patients who require a high level of monitoring and specialized care, but whose conditions do not necessitate the continued services of an intensive care unit. The operators of these LTACs have the capability to treat patients who suffer from multiple systemic failures or conditions such as neurological disorders, head injuries, brain stem and spinal cord trauma, cerebral vascular accidents, chemical brain injuries, central nervous system disorders, developmental anomalies and cardiopulmonary disorders. Chronic patients often depend on technology for continued life support, such as mechanical ventilators, total parenteral nutrition, respiration or cardiac monitors and dialysis machines, and, due to their severe medical conditions, generally are not clinically appropriate for admission to a nursing facility or rehabilitation hospital. We do not own any “hospitals within hospitals.” We also own eight IRFs devoted to the rehabilitation of patients with various neurological, musculoskeletal, orthopedic and other medical conditions following stabilization of their acute medical issues.
Health Systems
We have 13 properties that are operated as health systems. Health systems provide medical and surgical services, including inpatient care, intensive care, cardiac care, diagnostic services and emergency services. These health systems also provide outpatient services such as outpatient surgery, laboratory, radiology, respiratory therapy, cardiology and physical therapy. In the United States, these health systems receive payments for patient services from the federal government primarily
under the Medicare program, state governments under their respective Medicaid or similar programs, health maintenance organizations, preferred provider organizations, other private insurers and directly from patients.
Skilled Nursing Facilities
We have 16 properties that are operated as SNFs. SNFs provide rehabilitative, restorative, skilled nursing and medical treatment for patients and residents who do not require the high technology, care-intensive, high-cost setting of an acute care or rehabilitation hospital. Treatment programs include physical, occupational, speech, respiratory and other therapies, including sub-acute clinical protocols such as wound care and intravenous drug treatment. Charges for these services are generally paid from a combination of government reimbursement and private sources.
Geographic Diversification of Properties
Our portfolio of assets is broadly diversified by geographic location throughout the United States, Canada and the United Kingdom, with properties in only one state (California) accounting for more than 10% of our total continuing revenues and net operating income (“NOI,” which is defined as total revenues, excluding interest and other income, less property-level operating expenses and office building services costs) for the year ended December 31, 2020.
Loans and Investments
As of December 31, 2020, we had $0.9 billion of net loans receivable and investments relating to senior housing and healthcare operators or properties. Our loans receivable and investments provide us with interest income, principal amortization and transaction fees and are typically secured by mortgage liens or leasehold mortgages on the underlying properties and corporate or personal guarantees by affiliates of the borrowing entity. In some cases, the loans are secured by a pledge of ownership interests in the entity or entities that own the related properties. From time to time, we also make investments in mezzanine loans, which are subordinated to senior secured loans held by other investors that encumber the same real estate. See “Note 6 - Loans Receivable and Investments” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Development and Redevelopment Projects
We are party to certain agreements that obligate us to develop properties funded through capital that we and, in certain circumstances, our joint venture partners provide. As of December 31, 2020, we had 13 properties under development pursuant to these agreements, including three properties that are owned through unconsolidated real estate entities. In addition, from time to time, we engage in redevelopment projects with respect to our existing properties to maximize the value, increase NOI, maintain a market-competitive position, achieve property stabilization or change the primary use of the property.
Segment Information
We operate through three reportable business segments: triple-net leased properties, senior living operations and office operations. Non-segment assets, classified as “all other,” consist primarily of corporate assets, including cash, restricted cash, loans receivable and investments, and miscellaneous accounts receivable. Our chief operating decision makers evaluate performance of the combined properties in each reportable business segment and determine how to allocate resources to these segments, in significant part, based on segment NOI and related measures. For further information regarding our business segments and a discussion of our definition of segment NOI, see “Note 19 - Segment Information” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Triple-Net Leased Properties
In our triple-net leased properties segment, we invest in and own senior housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and to comply with the terms of the mortgage financing documents, if any, affecting the properties.
Senior Living Operations
In our senior living operations segment, we invest in senior housing communities throughout the United States and Canada and engage independent managers, such as Atria and Sunrise, to manage those communities. The REIT Investment
Diversification and Empowerment Act of 2007 (“RIDEA”) permits us to own or partially own qualified healthcare properties in a structure through which we can participate directly in the cash flow of the properties’ operations (as compared to receiving only contractual rent payments under a triple-net lease) in compliance with REIT requirements. In a RIDEA structure, we are required to rely on a third-party manager to manage and operate the property, including procuring supplies, hiring and training all employees, entering into all third-party contracts for the benefit of the property, including resident/patient agreements, complying with laws, including but not limited to healthcare laws, and providing resident care, in exchange for a management fee. As a result, we must rely on our managers’ personnel, expertise, technical resources and information systems, risk management processes, proprietary information, good faith and judgment to manage our senior living operations efficiently and effectively. We also rely on our managers to set appropriate resident fees, to provide accurate property-level financial results in a timely manner and otherwise operate our senior housing communities in compliance with the terms of our management agreements and all applicable laws and regulations.
Office Operations
In our office operations segment, we primarily acquire, own, develop, lease and manage MOBs and research and innovation centers throughout the United States.
Significant Tenants and Managers
The following table summarizes certain information regarding our tenant and manager concentration as of and for the year ended December 31, 2020 (excluding properties classified as held for sale and properties owned by investments in unconsolidated real estate entities as of December 31, 2020):
Number of
Properties Leased
or Managed Percent of Total Real Estate Investments (1)
Percent of Total Revenues Percent of NOI
Senior Living Operations 432 47.9 % 58.0 % 29.4 %
Brookdale Senior Living (2)
121 8.2 4.4 9.0
Ardent 12 4.9 3.2 6.6
Kindred 32 1.1 3.5 7.1
(1)Based on gross book value.
(2)Excludes eight properties managed by Brookdale Senior Living pursuant to long-term management agreements and included in the senior living operations reportable business segment.
Triple-Net Leased Properties
Each of our leases with Brookdale Senior Living, Ardent and Kindred is a triple-net lease. In addition, each of our Brookdale Senior Living, Ardent and Kindred leases has a corporate guaranty.
The properties we lease to Brookdale Senior Living, Ardent and Kindred accounted for a significant portion of our triple-net leased properties segment revenues and NOI for the year ended December 31, 2020. See “Risk Factors-Our Business Operations and Strategy Risks-A significant portion of our revenues and operating income is dependent on a limited number of tenants and managers, including Brookdale Senior Living, Ardent, Kindred, Atria and Sunrise.” included in Part I, Item 1A of this Annual Report.
Brookdale Senior Living Leases
As of December 31, 2020, we leased 121 consolidated properties (excluding eight properties managed by Brookdale Senior Living pursuant to long-term management agreements and included in the senior living operations reportable business segment) to Brookdale Senior Living.
In July 2020, we entered into a revised master lease agreement (the “Brookdale Lease”) and certain other agreements (together with the Brookdale Lease, the “Agreements”) with Brookdale Senior Living.
In connection with the revised Brookdale Lease, we received up-front consideration approximating $235 million, which will be amortized over the remaining lease term and consisted of: (a) $162 million in cash including $47 million from the transfer to Ventas of deposits under the Brookdale Lease; (b) a $45 million cash pay note (the “Note”), which has an initial interest rate of 9.0%, increasing 50 basis points per annum, and matures on December 31, 2025; (c) warrants for 16.3 million
shares of Brookdale Senior Living common stock, which are exercisable at any time prior to December 31, 2025 and have an exercise price of $3.00 per share.
Base cash rent under the Brookdale Lease is set at $100 million per annum starting in July 2020, with three percent annual escalators commencing on January 1, 2022. The Brookdale Lease is guaranteed by, and the Note is a direct obligation of, Brookdale Senior Living.
The warrants are classified within other assets on our Consolidated Balance Sheets. These warrants are measured at fair value with changes in fair value being recognized within other expense in our Consolidated Statements of Income.
As of December 31, 2020, the aggregate 2021 contractual cash rent due to us from Brookdale Senior Living was approximately $100.3 million, and the current aggregate contractual base rent (computed in accordance with U.S. generally accepted accounting principles (“GAAP”)) was approximately $148.5 million.
Ardent Lease
As of December 31, 2020, we leased 11 properties (excluding one MOB leased to Ardent under a separate lease) to Ardent pursuant to a single, triple-net master lease agreement. Per our master lease agreement, Ardent is obligated to pay base rent, which escalates annually by the lesser of four times the increase in the Consumer Price Index (“CPI”) for the relevant period and 2.5%. The initial term of the master lease expires on August 31, 2035 and Ardent has one ten-year renewal option.
As of December 31, 2020, the aggregate 2021 contractual cash rent due to us from Ardent was approximately $125.9 million, and the current aggregate contractual base rent (computed in accordance with GAAP) was approximately $126.0 million.
We also hold a 9.8% ownership interest in Ardent, which entitles us to customary minority rights and protections, as well as the right to appoint one of 11 members on the Ardent Board of Directors.
Kindred Master Leases
As of December 31, 2020, we leased 29 properties to Kindred pursuant to a master lease agreement. In November 2016, Kindred extended the lease term to 2025 for all of our LTACs operated by Kindred that were scheduled to mature in 2018 and 2020, at the current rent level.
The aggregate annual rent we receive under each Kindred master lease is referred to as “base rent.” Base rent escalates annually at a specified rate over the prior period base rent, contingent, in some cases, upon the satisfaction of specified facility revenue parameters. The annual rent escalator under the Kindred master lease for 25 properties is based on year-over-year changes in CPI, subject to a floor and cap, and is 2.7% for four properties. As of December 31, 2020, the aggregate 2021 contractual cash rent due to us from Kindred was approximately $130.4 million, and the current aggregate contractual base rent (computed in accordance with GAAP) was approximately $132.4 million.
Senior Living Operations
As of December 31, 2020, Atria and Sunrise, collectively, provided comprehensive property management and accounting services with respect to 258 of the senior housing communities in our senior living operations segment. Under these management agreements, the operators receive annual base management fees ranging from 4.5% to 7% of revenues generated by the applicable properties and, in some cases, additional management fees based on the achievement of specified performance targets. Our management agreements with Atria have initial terms expiring between 2024 and 2027, and our management agreements with Sunrise have terms expiring between 2030 and 2038. In some cases, our management agreements include renewal provisions.
Because Atria and Sunrise manage our properties in exchange for the receipt of a management fee from us, we are not directly exposed to the credit risk of our managers in the same manner or to the same extent as our triple-net tenants. See “Risk Factors-Our Business Operations and Strategy Risk-A significant portion of our revenues and operating income is dependent on a limited number of tenants and managers, including Brookdale Senior Living, Ardent, Kindred, Atria and Sunrise.” and included in Part I, Item 1A of this Annual Report.
We hold a 34% ownership interest in Atria, which entitles us to customary minority rights and protections, as well as the right to appoint two of the six members on the Atria Board of Directors.
Competition
We generally compete for investments in healthcare real estate assets with publicly traded, private and non-listed healthcare REITs, real estate partnerships, healthcare providers, healthcare 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. Increased competition challenges our ability to identify and successfully capitalize on opportunities that meet our objectives, which is affected by, among other factors, the availability of suitable acquisition or investment targets, our ability to negotiate acceptable transaction terms and our access to and cost of capital. See “Risk Factors-Our Business Operations and Strategy Risk-Our ongoing strategy depends, in part, upon identifying and consummating future investments and effectively managing our expansion opportunities” included in Part I, Item 1A of this Annual Report and “Note 10 - Senior Notes Payable and Other Debt” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Our tenants and managers also compete on a local and regional basis with other healthcare operating companies that provide comparable services. Senior housing community, SNF and health systems operators compete to attract and retain residents and patients to our properties based on scope and quality of care, reputation and financial condition, price, location and physical appearance of the properties, services offered, qualified personnel, physician referrals and family preferences. With respect to MOBs and research and innovation centers, we and our third-party managers compete to attract and retain tenants based on many of the same factors, in addition to quality of the affiliated health system, physician preferences and proximity to hospital or university campuses or life science centers and quality of lab space. The ability of our tenants, operators and managers to compete successfully could be affected by private, federal and state reimbursement programs and other laws and regulations. See “Risk Factors-Our Legal, Compliance and Regulatory Risks-We and our tenants, borrowers and managers may be adversely affected by regulation and enforcement.” included in Part I, Item 1A of this Annual Report.
Human Capital Management
At Ventas, our experienced team drives our success and creates value. As of December 31, 2020, we had 448 employees, none of which are subject to a collective bargaining agreement.
We provide a unique environment that offers opportunities for our team to use their professional skills, develop their talents and learn from each other as they build successful careers. We are committed to upholding human dignity and equal opportunity under the principles outlined in the United Nations’ Universal Declaration of Human Rights. Our Global Code of Ethics and Business Conduct, Vendor Code of Conduct and Human Rights Policy embed the responsibility to respect human rights in business functions across our operations as well as our supply chain.
The Executive Compensation Committee of our Board of Directors provides oversight on certain human capital matters, including our DE&I efforts, goals and framework. We report on human capital matters at each regularly scheduled meeting of our Board of Directors. The most significant human capital measures and objectives that we focus on include the topics described below.
Talent Attraction and Retention
We strive to foster a culture that attracts and retains individuals who share a passion for integrity, flawless execution, collaborative problem-solving and, above all, excellence. A key component of our ability to attract and retain the top talent in our industry is our investment in our people and their continuous development by providing expansive professional opportunities, best-in-class leadership development and a broad array of workshops and training. Ventas also prides itself in offering an industry-leading compensation and benefits package.
DE&I
Ventas has a long-standing commitment to Diversity, Equity and Inclusion (“DE&I”). We have established a DE&I framework centered around five key pillars of people, culture, investment and financial, changing our society and improving our communities and celebrating our commitments. Development and execution of the DE&I framework is a core component of our 2021 short-term incentive program. Additionally, we incorporated a metric focused on improving the Company’s representation of women employees into our 2020-2022 long-term equity incentive program, to further drive progress and accountability. As of December 31, 2020, our workforce is. As of December 31, 2020, our workforce is 52% male and 48% female, with our Board of Directors being 36% female.
Health & Safety
Ventas is committed to the health and safety of its employees. The responsibility is shared with each Ventas employee, helping to make our workplaces secure and hazard-free to protect against accidents, personal injury/illness and property damage. Our commitment to health and safety is maintained by effective administration, training and education, and we expect our operating and development partners to comply with applicable company or legal requirements, whichever is more stringent. In response to the COVID-19 pandemic, we seamlessly shifted to a remote work environment ahead of mandatory stay-at-home orders.
Sustainability
Ventas recognizes that sustainable practices and resilience are essential to delivering superior long-term results. Our integrated approach to Environment, Social and Governance (“ESG”) principles animates our actions, decisions and processes. In 2018, we conducted an in-depth ESG prioritization (a “materiality assessment”) using the Global Reporting Initiative (GRI) framework, from which we organized the eight topics identified into three strategic pillars: People, Performance, and Planet. This approach integrates ESG principles throughout our business, ensures focus and reporting on key issues and motivates our daily efforts.
Ventas has an established cross-functional ESG Steering Committee, led by our Chairman and CEO and overseen by our Director of Sustainability, which provides oversight and monitoring of our ESG strategy, with reporting to our Board of Directors. Among other things, Ventas has set ambitious goals to reduce our greenhouse gas emissions, energy, water and waste, and to limit high flood risk properties in our portfolio.
For additional information regarding our ESG efforts, please visit our website at www.ventasreit.com
Insurance
We maintain or require in our lease, management and other agreements that our tenants, managers or other counterparties 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 each industry and we frequently review our insurance programs and requirements. The insurance that we maintain or require may take the form of commercial insurance, captive insurance or self-insurance.
We maintain the property insurance for substantially all properties in our office and senior living operations segment. We also maintain liability insurance for certain office properties, as well as the general and professional liability insurance for certain senior housing communities and related operations in our senior living operations segment. However, some senior housing managers maintain the general and professional liability insurance for our senior housing communities and related operations that they manage in accordance with the terms of our management agreements.
Through our office operations, we provide engineering, construction and architectural services in connection with new development projects, and we maintain and cause tenants, contractors, design professionals and other parties involved with such services to maintain property and liability insurance with respect to those activities.
In May 2020, the Company formed a wholly owned captive insurance company, which provides insurance coverage for losses below the deductible and within the self-insured retention of the commercial property, general and professional liability insurance that we maintain for certain of our Office and senior living operations locations. The Company created this captive as part of its overall risk management program and to stabilize insurance costs.
Additional Information
We maintain a website at www.ventasreit.com. The information on our website is not incorporated by reference in this Annual Report, and our web address is included as an inactive textual reference only.
We make available, free of charge, through our website our Annual Report, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. In addition, our Guidelines on Governance, our Global Code of Ethics and Business Conduct (including waivers from and amendments to that
document) and the charters for each of our Audit and Compliance, Nominating and Corporate Governance and Executive Compensation Committees are available on our website, and we will mail copies of the foregoing documents to stockholders, free of charge, upon request to our Corporate Secretary at Ventas, Inc., 353 North Clark Street, Suite 3300, Chicago, Illinois 60654.
GOVERNMENT REGULATION
Governmental Response to the COVID-19 Pandemic
In response to the COVID-19 pandemic, in 2020, Congress enacted a series of economic stimulus and relief measures through the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Paycheck Protection Program and Health Care Enhancement Act (the “PPPHCE Act”) and the Consolidated Appropriations Act, 2021 (“CAA”). In total, the CARES Act, the PPPHCE Act and the CAA authorize approximately $175 billion to be distributed to healthcare providers through the Public Health and Social Services Emergency Fund (“Provider Relief Fund”), which is administered by the U.S. Department of Health & Human Services (“HHS”). These grants are intended to reimburse eligible providers for expenses incurred to prevent, prepare for and respond to COVID-19 and lost revenues attributable to COVID-19. Recipients are not required to repay distributions from the Provider Relief Fund, provided that they attest to and comply with certain terms and conditions, including, not using grants received from the Provider Relief Fund to reimburse expenses or losses that other sources are obligated to reimburse, reporting and record keeping requirements and cooperating with any government audits.
HHS began distributing Provider Relief Fund grants in April 2020 and has made grants available to various provider groups in phases. We applied for and received grants under Phase 2 and Phase 3 of the Provider Relief Fund on behalf of the assisted living communities in our senior living operations segment and may apply for additional grants in the future. Many of our senior housing, hospital, health system, medical office and other tenants also received grants from the Provider Relief Fund. HHS continues to evaluate and provide allocations of, and issue regulations and guidance regarding, grants made under the CARES Act and related legislation. We continue to monitor and evaluate the terms and conditions associated with payments received under the Provider Relief Fund.
The CARES Act and related legislation also make other forms of financial assistance available to healthcare providers, which has benefited our tenants and our senior living operations segment to varying degrees. This assistance includes Medicare and Medicaid payment adjustments and an expansion of the Medicare Accelerated and Advance Payment Program, which made available accelerated payments of Medicare funds in order to increase cash flow to providers. These payments are loans that providers must repay. Effective October 2020, the Centers for Medicare & Medicaid Services (“CMS”) is no longer accepting applications for accelerated or advance payments. The Cares Act and related legislation also suspended Medicare sequestration payment adjustments, which would have otherwise reduced payments to Medicare providers by 2%, from May 1, 2020 through March 31, 2021, but also extended sequestration through 2030. These laws also include provisions intended to expand coverage of COVID-19 testing and preventive services, address healthcare workforce needs and ease other legal and regulatory burdens on healthcare providers. Due to the recent enactment of the CARES Act, the PPPHCE Act, and the CAA, there is a high degree of uncertainty surrounding their implementation, and the public health emergency continues to evolve. See “Risk Factors-COVID-19 Risks-There is a high degree of uncertainty regarding the implementation and impact of the CARES Act and other pandemic-related legislation and any future COVID-19 relief measures. There can be no assurance as to the total amount of financial assistance we or our tenants or borrowers will receive or that we will be able to benefit from provisions intended to increase access to resources and ease regulatory burdens for healthcare providers.” included in Part I, Item 1A of this Annual Report.
Federal, state and local governments and agencies have implemented or announced other programs to provide financial and other support to businesses affected by the COVID-19 pandemic, some of which have benefited our tenants, borrowers, managers and our senior living operations segment, but that impose significant regulatory and compliance obligations.
United States Healthcare Regulation, Licensing and Enforcement
Overview
We, along with our tenants, borrowers, and managers in the United States, are subject to or impacted by extensive and complex federal, state and local healthcare laws and regulations, including laws and regulations relating to quality of care, licensure and certificates of need (“CON”), conduct of operations, government reimbursement, such as Medicare and Medicaid, fraud and abuse, qualifications of personnel, appropriateness and classification of care, adequacy of plant and equipment, and data security and privacy. Although the effects of these laws and regulations on our business are typically indirect, some of these laws and regulations apply directly to us and the senior housing communities in our senior living operations segment,
where we generally hold the applicable healthcare licenses and enroll in applicable reimbursement programs. Healthcare laws and regulations are wide-ranging, and noncompliance may result in the imposition of civil, criminal, and administrative penalties, including: the loss or suspension of accreditation, licenses or CONs; suspension of or non-payment for new admissions; denial of reimbursement; fines; suspension, decertification, or exclusion from federal and state healthcare programs; or facility closure. Changes in laws or regulations, reimbursement policies, enforcement activity and regulatory non-compliance by us or our tenants, borrowers or managers could have a significant effect on our and their operations and financial condition, which in turn may adversely impact us, as detailed below and set forth under “Risk Factors” in Part I, Item 1A of this Annual Report.
Licensure, Certification and CONs
Regulation of senior housing communities consists primarily of state and local laws that may require licenses, certifications and permits, and may vary greatly from one jurisdiction to another. Our senior housing communities that receive Medicaid payments are also subject to extensive federal laws and regulation. Inpatient rehabilitation and long-term acute care facilities, health systems, and skilled nursing facilities, which we do not directly operate, are typically subject to extensive federal and state regulation and must hold various licenses, certifications, and permits. Licensure and certification may be conditioned on requirements related to, among other things, the quality of medical care provided by an operator, qualifications of the operator’s administrative personnel and clinical staff, adequacy of the physical plant and equipment and continuing compliance with applicable laws and regulations. Federal and state government agencies have issued additional requirements in connection with the COVID-19 pandemic. For example, CMS is requiring testing of skilled nursing facility staff and residents for COVID-19 and reporting of COVID-19 data to the Centers for Disease Control and Prevention (“CDC”).
Sanctions for failure to comply with licensure and certification laws and regulations include loss of licensure or certification and ability to participate in or receive payments from the Medicare and Medicaid programs, suspension of or non-payment for new admissions, fines, and potential criminal penalties. Even if we are not the operator of a facility, imposition of such sanctions could adversely affect the healthcare facility operator’s ability to satisfy its obligations to us. Further, if we have to replace a tenant, we may experience difficulties in finding a replacement and effectively and efficiently transitioning the property to a new tenant. See “Risk Factors-Our Business Operations and Strategy Risks-If we need to replace any of our tenants or managers, we may be unable to do so on as favorable terms, or at all, and we could be subject to delays, limitations and expenses, which could adversely affect our business, financial condition and results of operations.” included in Part I, Item 1A of this Annual Report.
In addition, many of our licensed facilities and tenants are subject to state CON laws, which require governmental approval prior to the development or expansion of licensed facilities and services. The approval process in states with CON laws generally requires a facility to demonstrate the need for additional or expanded licensed facilities or services. CONs, where applicable, are also sometimes necessary for changes in ownership or control of licensed facilities, addition of beds, investment in major capital equipment, introduction of new services or termination of services previously approved through the CON process. CON laws and regulations may restrict our or our tenants’ ability to expand and grow in certain circumstances, which could have an adverse effect on our or their revenues.
Fraud and Abuse Enforcement
Participants in the U.S. healthcare industry are subject to complex federal and state civil and criminal laws and regulations governing healthcare provider referrals, relationships and arrangements. These laws include: (i) federal and state false claims acts, which generally prohibit providers from filing false claims or making false statements to receive payment from Medicare, Medicaid or other federal or state healthcare programs; (ii) federal and state anti-kickback and fee-splitting statutes, including the federal Anti-Kickback Statute, which prohibits the payment or receipt of remuneration to induce referrals or generate business involving healthcare items or services payable by Medicare or Medicaid; (iii) federal and state physician self-referral laws, which generally prohibit referrals of certain services by physicians to entities with which the physician or an immediate family member has a financial relationship; and (iv) the federal Civil Monetary Penalties Law, which requires a lower burden of proof than other fraud and abuse laws and prohibits, among other things, the knowing presentation of a false or fraudulent claim for certain healthcare services.
Violating these healthcare fraud and abuse laws and regulations may result in criminal and civil penalties, such as punitive sanctions, damage assessments, monetary penalties, imprisonment, denial of Medicare and Medicaid payments, and exclusion from the Medicare and Medicaid programs. These laws and regulations are enforced by a variety of federal, state and
local governmental agencies, and many can also be enforced by private litigants through federal and state false claims acts and other laws that allow private individuals to bring whistleblower suits known as qui tam actions.
Reimbursement
Sources of revenue for us and some of our tenants include, among others, governmental healthcare programs, such as the federal Medicare programs and state Medicaid programs, and non-governmental third-party payors, such as insurance carriers and health maintenance organizations. Medicare is a federal health insurance program for persons age 65 and over, some disabled persons and persons with end-stage renal disease. Medicaid is a medical assistance program for eligible needy persons that is funded jointly by federal and state governments and administered by the states. Medicaid eligibility requirements and benefits vary by state. The Medicare and Medicaid programs are highly regulated and subject to frequent and substantial changes resulting from legislation, regulations and administrative and judicial interpretations of existing law.
As federal and state governments face significant budgetary pressures, they continue efforts to reduce Medicare and Medicaid spending through methods such as reductions in reimbursement rates and increased enrollment in managed care programs. Private payors are typically for-profit companies and are continuously seeking opportunities to control healthcare costs. In some cases, private payors rely on government reimbursement systems to determine reimbursement rates, such that reductions in Medicare and Medicaid payment rates may negatively impact payments from private payors. These changes may result in reduced or slower growth in reimbursement for certain services provided by some of our tenants and managers. Additionally, the U.S. Congress and certain state legislatures have introduced and passed a large number of proposals and legislation designed to make major changes in the healthcare system, including changes that directly or indirectly affect reimbursement. Several of these laws, including the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”), have promoted shifting from traditional fee-for-service reimbursement models to alternative payment models that tie reimbursement to quality and cost of care, such as accountable care organizations and bundled payments. It is difficult to predict the nature and success of future financial or delivery system reforms, but changes to reimbursement rates and related policies could adversely impact our and our tenants’ results of operations.
For the year ended December 31, 2020, approximately 7.2% of our total revenues and 15.0% of our total NOI were attributable to acute and post-acute healthcare facilities in which our third-party tenants receive reimbursement for their services under governmental healthcare programs, such as Medicare and Medicaid. We are neither a participant in, nor a direct recipient of, any reimbursement under these programs with respect to those leased facilities.
Data Privacy and Security
Privacy and security regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996, as amended ( “HIPAA”), restrict the use and disclosure of individually identifiable health information (“protected health information” or “PHI”), provide for individual rights, and require safeguards for PHI and notification of breaches of unsecure PHI. Entities subject to HIPAA include most healthcare providers, including some of our tenants and borrowers. These covered entities are required to implement administrative, physical and technical practices to protect the security of individually identifiable health information that is electronically maintained or transmitted. Business associates of covered entities who create, receive, maintain or transmit PHI are also subject to certain HIPAA provisions. Violations of HIPAA may result in substantial civil and/or criminal fines and penalties.
There are several other laws and legislative and regulatory initiatives at the federal and state levels addressing privacy and security of personal information. For example, the Federal Trade Commission uses its consumer protection authority to initiate enforcement actions in response to data breaches. In most cases, we depend on our tenants and managers to fulfill any compliance obligations with respect to HIPAA and other privacy and security laws and regulations.
International Healthcare Regulation
We own senior housing communities in Canada and the United Kingdom. Senior living residences in Canada are provincially regulated. Within each province, there are different categories for senior living residences that are generally based on the level of care sought or required by a resident (e.g., assisted or retirement living, senior living residences, residential care, long-term care). In some of these categories and depending on the province, residences may be government funded, or the individual residents may be eligible for a government subsidy, while other residences are exclusively private-pay. The
governing legislation and regulations vary by province, but generally impose licensing requirements and minimum standards of care for senior living residences. These laws empower regulators in each province to take a variety of steps to ensure compliance, conduct inspections, issue reports and generally regulate the industry. Our communities in Canada are also subject to privacy legislation, including, in certain provinces, privacy laws specifically related to personal health information. Although the obligations of senior living residences in the various provinces differ, they all include the obligation to protect personal information. The powers of privacy regulators and penalties for violations of privacy law vary according to the applicable law or are left to the courts. Our senior living residences in Canada are also subject to a variety of other laws and regulations, including minimum wage standards and other employment laws.
In the United Kingdom, our senior housing communities are principally regulated as “care home services” under the Health and Social Care Act 2008. This legislation subjects service providers to standards of care and requires, among other things, that all persons carrying out such activities, and the managers of such persons, be registered. Providers of care home services are also subject (as data controllers) to laws and regulations governing their use of personal data (including in relation to their employees, clients and recipients of their services). These laws take the form of the U.K.’s Data Protection Act 2018. The Data Protection Act imposes a significant number of obligations on controllers with the potential for fines of up to 4% of annual worldwide turnover or €20 million, whichever is greater. Our business operations in the United Kingdom are also subject to a range of other regulations, such as the U.K. Bribery Act 2010, minimum wage standards and other employment laws.
The United Kingdom exited from the EU on January 31, 2020. The impact of Brexit on the healthcare industry will depend on a variety of factors, including the evolution of healthcare regulatory and immigration policy and the broader economic outlook in the United Kingdom.
Regulation Impacting Life Science, Research and Innovation Centers
We lease a number of our assets to tenants in the life science, research and innovation sector. These tenants consist of university-affiliated organizations and other private sector companies. These tenants may be dependent on private investors, the federal government or other sources of funding to support their activities. Creating a new pharmaceutical product or medical device requires substantial investments of time and capital, in part because of the extensive regulation of the healthcare industry; it also entails considerable risk of failure in demonstrating that the product is safe and effective and in gaining regulatory approval and market acceptance. Therefore, our tenants in the life science, research and innovation industry face high levels of regulation, expense and uncertainty. See “Risk Factors-Environmental, Economic and Market Risks-Our life science, R&I tenants face unique levels of regulation, expense and uncertainty.” included in Part I, Item 1A of this Annual Report.
Our tenants with marketable products may be adversely affected by healthcare reform and government reimbursement policies, including changes under the current presidential administration or by private healthcare payors.
Tax Regulation
We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code (the “Code”), commencing with our taxable year ended December 31, 1999. Provided we qualify for taxation as a REIT, we generally will not be required to pay U.S. federal corporate income taxes on our REIT taxable income that is currently distributed to our stockholders. This treatment substantially eliminates the “double taxation” that ordinarily results from investment in a C corporation. We will, however, be required to pay U.S. federal income tax in certain circumstances.
The Code defines a REIT as a corporation, trust or association:
(1) that is managed by one or more trustees or directors;
(2) that issues transferable shares or transferable certificates to evidence its beneficial ownership;
(3) that would be taxable as a domestic corporation, but for Sections 856 through 860 of the Code;
(4) that is not a financial institution or an insurance company within the meaning of certain provisions of the Code;
(5) that is beneficially owned by 100 or more persons;
(6) not more than 50% in value of the outstanding stock of which is owned, actually or constructively, by five or fewer individuals, including certain specified entities, during the last half of each taxable year; and
(7) that meets other tests, regarding the nature of its income and assets and the amount of its distributions.
We believe that we have been organized and have operated in a manner that has allowed us, and will continue to allow us, to satisfy conditions (1) through (7) inclusive, during the relevant time periods, and we intend to continue to be organized and operate in this manner. However, qualification and taxation as a REIT depend upon our ability to meet the various qualification tests imposed under the Code, including through actual operating results, asset composition, distribution levels and diversity of stock ownership. Accordingly, no assurance can be given that we will be organized or will be able to operate in a manner so as to qualify or remain qualified as a REIT.
If we lose our status as a REIT (currently or with respect to any tax years for which the statute of limitations has not expired), we will face serious tax consequences that will substantially reduce the funds available to satisfy our obligations, to implement our business strategy and to make distributions to our stockholders for each of the years involved because:
•We would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to regular U.S. federal corporate income tax;
•We could be subject to increased state and local taxes; and
•Unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified.
In addition, in such event we would no longer be required to pay dividends to maintain REIT status, which could adversely affect the value of our common stock. See “Risk Factors-Our REIT Status Risks”.
Environmental Regulation
A wide variety of federal, state and local environmental and occupational health and safety laws and regulations affect our assets. We are committed to not only meeting these requirements of these laws and regulations, but exceeding them through our Environmental, Social and Governance activities. See “-Sustainability.”
However, these complex federal and state statutes, and their enforcement, involve a myriad of regulations, many of which involve strict liability on the part of the potential offender. Some of these federal and state statutes may directly impact us. Under various federal, state and local environmental laws, ordinances and regulations, an owner of real property or a secured lender, such as us, may be liable for the costs of removal or remediation of hazardous or toxic substances at, under or disposed of in connection with such property, as well as other potential costs relating to hazardous or toxic substances (including government fines and damages for injuries to persons and adjacent property).
With respect to our properties that are operated or managed by third parties, we may be held primarily or jointly and severally liable for costs relating to the investigation and cleanup of any property from which there is or has been an actual or threatened release of a regulated material and any other affected properties, regardless of whether we knew of or caused the release. Such costs typically are not limited by law or regulation and could exceed the property’s value. In addition, we may be liable for certain other costs, such as governmental fines and injuries to persons, property or natural resources, as a result of any such actual or threatened release. See “Risk Factors-Our Business Operations and Strategy Risks-Our operating assets may expose us to various operational risks, liabilities and claims that could adversely affect our ability to generate revenues or increase our costs and could adversely affect our business, financial condition and results of operations.” included in Part I, Item 1A of this Annual Report.
Under the terms of our lease, management and other agreements, we generally have a right to indemnification by the tenants and managers of our properties for any contamination caused by them.
In general, we have also agreed to indemnify our tenants and managers against any environmental claims (including penalties and cleanup costs) resulting from any condition arising in, on or under, or relating to, the leased properties at any time before the applicable lease commencement date. With respect to our senior living operating portfolio, we have agreed to indemnify our managers against any environmental claims (including penalties and cleanup costs) resulting from any condition on those properties, unless the manager caused or contributed to that condition.

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ITEM 1A. RISK FACTORS
ITEM 1A. Risk Factors
This section discusses material 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, or any other risks and uncertainties that are not addressed below or that we have not yet identified, actually occur, we could be materially adversely affected and the value of our securities could decline.
As set forth below, we believe that the risks we face generally fall into the following categories:
•COVID-19 Risks
•Our Business Operations and Strategy Risks
•Environmental, Economic and Market Risks
•Our Capital Structure Risks
•Our Legal, Compliance and Regulatory Risks
•Our REIT Status Risks
COVID-19 Risks
The ongoing COVID-19 pandemic and measures intended to prevent its spread have had and may continue to have a material adverse effect on our business, financial condition and results of operations.
The COVID-19 pandemic and measures to prevent its spread have materially negatively impacted our businesses in a number of ways and is expected to continue to do so. For instance, operating costs at our senior housing communities have increased as a result of the introduction of public health measures and other operational and regulatory changes affecting our properties and our operations, while occupancy and revenue have decreased. Certain of our tenants and managers have incurred significant costs or losses as a result of the pandemic, and may continue to do so, which could adversely affect our results of operations.
Although we continue to undertake extensive efforts to ensure the safety of our properties, employees and residents and to provide operator support in this regard, the impact of the COVID-19 pandemic on our facilities could result in additional operational costs. The effects of shelter-in-place and stay-at-home orders, including remote work arrangements for an extended period of time, could strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business. Further, we have and may continue to implement mitigation and other measures to support and protect our employees, which could result in increased labor costs.
Senior housing facilities have been disproportionately impacted by COVID-19. The ongoing COVID-19 pandemic has, to varying degrees during the course of the pandemic, prevented prospective occupants and their families from visiting our senior housing communities and limited the ability of new occupants to move into our senior housing communities due to heightened move-in criteria and screening. Although the ongoing impact of the pandemic and vaccine deployment on occupancy remain uncertain, occupancy of our senior housing and triple-net properties could further decrease, and the effects of the COVID-19 pandemic could adversely affect demand for senior housing for an extended period. Such a decrease could affect the net operating income of our senior housing properties and the ability of our triple-net tenants to make contractual payments to us, which in turn, could adversely affect our financial condition, including our ability to pay dividend distributions at expected levels or at all.
Additionally, across our property types, the impact of the COVID-19 pandemic creates a heightened risk of tenant, borrower, manager or other obligor bankruptcy or insolvency due to factors such as decreased occupancy, medical practice disruptions resulting from stay-at-home orders, increased health and safety and labor expenses or litigation resulting from developments related to the COVID-19 pandemic. In addition to the risks associated with such events elsewhere in these risk factors, various federal, state and local governments have enacted, and may continue to enact, laws regulations and moratoriums or take other actions that could limit our ability to evict tenants as a result of the COVID-19 pandemic. Although many of these moratoriums are expected to be temporary in nature, they may be in place for a significant period of time until the COVID-19 pandemic subsides. While we generally have arrangements and other agreements that give us the right under specified circumstances to terminate a lease or evict a tenant for nonpayment, such laws, regulations and moratoriums will generally prohibit our ability to begin eviction proceedings even where no rent or only partial rent is being paid for so long as such law, regulation or moratorium remains in effect. We may incur significant costs and it may take a significant amount of time to ultimately evict any tenant who is not meeting its contractual rent obligations. If we cannot transition a leased property to a
new tenant due to the effects of the COVID-19 pandemic or for other reasons, we may take possession of that property, which may expose us to certain successor liabilities.
The COVID-19 pandemic and reactions to it have also adversely affected the U.S. economy and global financial markets and, in the longer term, could result in a global economic downturn and a recession, or inflation, which may, in turn negatively impact our results of operations. The COVID-19 pandemic has increased, and may continue to increase, the magnitude of many of the other risks described herein.
The trajectory and future impact of the COVID-19 pandemic remains highly uncertain. The extent of the pandemic’s continuing and ultimate effect on our operational and financial performance will depend on a variety of factors, including the speed at which available vaccines can be successfully deployed; the rate of acceptance of available vaccines, particularly among the residents and staff in our senior housing communities; the impact of new variants of the virus and the effectiveness of available vaccines against those variants; ongoing clinical experience, which may differ considerably across regions and fluctuate over time; and on other future developments, including the ultimate duration, spread and intensity of the outbreak, the availability of testing, the extent to which governments impose, rollback or re-impose preventative restrictions and the availability of ongoing government financial support to our business, tenants and operators. Due to these uncertainties, we are not able at this time to estimate the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows.
There is a high degree of uncertainty regarding the implementation and impact of the CARES Act and other pandemic-related legislation and any future COVID-19 relief measures. There can be no assurance as to the total amount of financial assistance we or our tenants or borrowers will receive or that we will be able to benefit from provisions intended to increase access to resources and ease regulatory burdens for healthcare providers.
In response to the COVID-19 pandemic, the CARES Act, the PPPHCE Act, and the CAA authorize a total of $178 billion to be distributed to healthcare providers through the Provider Relief Fund, which is administered by HHS. These grants are intended to reimburse eligible providers for healthcare-related expenses or lost revenues attributable to COVID-19. Recipients are not required to repay distributions from the Provider Relief Fund, provided that they attest to and comply with certain terms and conditions, including reporting requirements, limitations on balance billing, and not using grants received from the Provider Relief Fund to reimburse expenses or losses that other sources are obligated to reimburse maintaining records, and cooperating with any government audits.
HHS began distributing Provider Relief Fund grants in April 2020 and has made grants available to various provider groups in phases. We applied for grants under Phase 2 and Phase 3 of the Provider Relief Fund on behalf of the assisted living communities in our senior living operations segment and may apply for additional grants in the future. While we have received all amounts under our Phase 2 applications, and have begun to receive amounts under our Phase 3 applications, there can be no assurance that all our remaining applications will be approved or that additional grants will ultimately be received in full or in part. Any grants that are ultimately received and retained by us are not expected to fully offset the losses incurred in our senior living operating portfolio that are attributable to COVID-19. Further, although we continue to monitor and evaluate the terms and conditions associated with the Provider Relief Fund distributions, we cannot assure you that we will be in compliance with all requirements related to the payments received under the Provider Relief Fund. If we or any of our tenants fail to comply with all of the terms and conditions, we or they may be required to repay some or all of the grants received and may be subject to other enforcement action, which could have a material adverse impact on our business and financial condition.
The CARES Act and related legislation also make other forms of financial assistance available to healthcare providers, including through Medicare and Medicaid payment adjustments and an expansion of the Medicare Accelerated and Advance Payment Program, which makes available accelerated payments of Medicare funds in order to increase cash flow to providers in the form of loans that must be repaid. In addition to financial assistance, the CARES Act and related legislation include provisions intended to increase access to medical supplies and equipment and ease legal and regulatory burdens on healthcare providers. Many of these measures are effective only for the duration of the federal public health emergency that was declared as a result of the COVID-19 pandemic. The current public health emergency determination expires April 21, 2021, and HHS has indicated that it likely will be extended but the duration of the extension is unclear. The HHS Secretary may choose to renew the declaration for successive 90-day periods for as long as the emergency continues to exist and may terminate the declaration whenever he determines that the public health emergency no longer exists.
Due to the recent enactment of the CARES Act, and other enacted legislation, there is still a high degree of uncertainty surrounding their implementation. Further, the federal government is considering additional financial measures, federal agencies continue to issue related regulations and guidance, and the public health emergency continues to evolve. It is difficult to predict the extent to which anticipated ongoing negative effects of the COVID-19 pandemic on us and our tenants and
borrowers will be offset by benefits which we may recognize or receive in the future under existing or future financial measures. Further, there can be no assurance that the terms and conditions of the Provider Relief Fund grants or other programs will not change or be interpreted in ways that affect our ability to comply with such terms and conditions (which could affect our ability to retain any grants that we receive), the amount of total financial grants we may ultimately receive or our eligibility to participate in any future funding. We continue to assess the potential impact of the COVID-19 pandemic and government responses to the pandemic on our business, financial condition and results of operations.
Our Business Operations and Strategy Risks
Market conditions, including, but not limited to, economic and financial market events or conditions and the actual and perceived state of the real estate markets and public capital markets generally could negatively impact our business, financial condition and results of operations.
We are dependent on the capital markets and any disruption to the capital markets or our ability to access such markets could impair our ability to fulfill our dividend requirements, make payments to our security holders or otherwise finance our business operations. The markets in which we operate are affected by a number of factors that are largely beyond our control but may nevertheless have a significant negative impact on us. Adverse developments affecting economies throughout the world, including a general tightening of availability of credit (including the price, terms and conditions under which it can be obtained), the state of the public capital markets, decreased liquidity in certain financial markets, increased interest rates, foreign exchange fluctuations, declining consumer confidence, the actual or perceived state of the real estate market, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases, could impact our business, financial condition and results of operations. For example, unfavorable changes in general economic conditions, including recessions, economic slowdowns, high unemployment and rising prices or the perception by consumers of weak or weakening economic conditions may reduce disposable income and impact consumer spending in healthcare or seniors housing, for example, which could adversely affect our financial results.
In addition, increased inflation may have a pronounced negative impact on the interest expense we pay in connection with our outstanding indebtedness, in our general and administrative expenses, as these costs could increase at a rate higher than our rents, or in the wages that our managers or tenants are obligated to pay. Conversely, deflation may result in a decline in general price levels, often caused by a decrease in the supply of money or credit. The predominant effects of deflation are high unemployment, credit contraction and weakened consumer demand. Restricted lending practices may impact our ability to obtain financing for our properties, which could adversely impact our growth and profitability.
To the extent there is turmoil in the global financial markets, this turmoil has the potential to adversely affect (i) the value of our properties; (ii) the availability or the terms of financing that we have or may be able to obtain; (iii) our ability to make principal and interest payments on, or refinance when due, any outstanding debt; (iv) our ability to pay a dividend and (v) the ability of our tenants to enter into new leasing transactions or satisfy rental payments under existing leases. Disruptions in the capital and credit markets may also adversely affect the market price of our securities.
Third parties must operate our non-Office assets, limiting our control and influence over operations and results.
Although we often have certain general oversight approval rights (e.g., with respect to budgets, material contracts, etc.) and the right to review operational and financial reporting information with respect to a majority of our portfolio, our third-party managers and tenants are ultimately in control of the day-to-day business of the property. As a result, we have limited rights to direct or influence the business or operations of the properties in our portfolio and we depend on third parties to operate these properties in a manner that complies with applicable law, minimizes legal risk and maximizes the value of our investment. The failure by such third parties to operate these properties efficiently and effectively and adequately manage the related risks could adversely affect our business, financial condition and results of operations.
Our operating assets may expose us to various operational risks, liabilities and claims that could adversely affect our ability to generate revenues or increase our costs and could adversely affect our business, financial condition and results of operations.
Despite our limited rights to direct or influence the business or operations of the properties in our senior living operations segment, as the owner and operator of senior housing operating properties, we are ultimately responsible for all operational risks and other liabilities of such properties, other than those arising out of certain actions by our managers, such as gross negligence or willful misconduct. These risks include, and our resulting revenues are impacted by, among other things, fluctuations in occupancy levels, the inability to achieve economic resident fees (including anticipated increases in those fees), increases in the cost of food, materials, energy, labor (as a result of unionization or otherwise) or other services, rent control
regulations, national and regional economic conditions, the imposition of new or increased taxes, capital expenditure requirements, changes in management or equity, accounting misstatements, professional and general liability claims, and the availability and cost of insurance. Any one or a combination of these factors could result in deficiencies in our senior living operations segment, which could adversely affect our business, financial condition and results of operations. Such operational risks could also arise as a result of our ownership of office buildings, and which could also adversely affect our business, financial condition and results of operations.
Further, we generally hold the applicable healthcare license and enroll in applicable government healthcare programs on behalf of the properties in our senior living operations segment. This subjects us to potential liability under various healthcare laws and regulations. Healthcare laws and regulations are wide-ranging, and noncompliance may result in the imposition of civil, criminal, and administrative penalties, including: the loss or suspension of accreditation, licenses or CONs; suspension of or non-payment for new admissions; denial of reimbursement; fines; suspension, decertification, or exclusion from federal and state healthcare programs; or facility closure.
Decreases in our tenants’, borrowers’ or managers’ revenues, or increases in their expenses, could affect their ability to meet their financial and other contractual obligations to us, which could adversely affect our business, financial condition and results of operations.
We have limited control over the success or failure of our tenants’, borrowers’ and managers’ businesses, regardless of whether our relationship is structured as a triple-net lease, a management contract or as a lender to our tenants. While we do not expressly take on liability on the properties in our triple-net leased or office operations segments, our business, financial condition and results of operations could suffer as a result of the risks outlined below. Any of our tenants, borrowers or managers may experience a downturn in their business that materially weakens their financial condition. For example, many of our tenants, borrowers and managers have experienced significant downturns in their businesses due to the COVID-19 pandemic, including as a result of interruptions in their operations, lost revenues, increased costs, financing difficulties and labor shortages. As a result, they may be unable or unwilling to make payments or perform their obligations when due. Although we generally have arrangements and other agreements that give us the right under specified circumstances to terminate a lease, evict a tenant or terminate our management agreements, or demand immediate repayment of outstanding loan amounts or other obligations to us, we may not be able to enforce such rights or we may determine not to do so if we believe that enforcement of our rights would be more detrimental to our business than seeking alternative approaches.
Our senior housing tenants and managers primarily depend on private pay sources consisting of the income or assets of residents or their family members to pay fees. Costs associated with independent and assisted living services generally are not reimbursable under government reimbursement programs, such as Medicare and Medicaid. Accordingly, our tenants and managers of our senior housing business depend on attracting seniors with appropriate levels of income and assets, which may be affected by many factors, including: (i) prevailing economic and market trends, including the ongoing economic downturn and high unemployment rates; (ii) consumer confidence; (iii) demographics; (iv) property condition and safety, including as a result of a severe cold and flu season, an epidemic or any other widespread illness, such as seen throughout the COVID-19 pandemic; (v) public perception about such properties; and (vi) social and environmental factors. Consequently, if our tenants or managers on our behalf fail to effectively conduct their operations, or to maintain and improve our properties, it could adversely affect our business reputation as the owner of the properties, as well as the business reputation of our tenants or managers and their ability to attract and retain patients and residents in our properties, which could have an adverse effect on our and our tenant’s or manager’s business, financial condition and results of operations. Further, if widespread default or nonpayment of outstanding obligations from a large number of tenants or managers occurs at a time when terminating such agreement or replacing such tenants or managers may be extremely difficult or impossible, including as a result of the COVID-19 pandemic, we may elect instead to amend such agreements with such tenants or managers. However, such amendment may be on terms that are less favorable to us than the original agreement and may have a material adverse effect on our results of operations and financial condition.
Our senior housing tenants and managers may also rely on reimbursements from governmental programs for a portion of the revenues from certain properties. Changes in reimbursement policies and other governmental regulation, that may result from actions by Congress or executive orders, may result in reductions in our tenants’ or managers’ revenues, operations and cash flows and affect our tenants’ or managers’ ability to meet their obligations to us. In addition, failure to comply with reimbursement regulations or other laws applicable to healthcare providers could result in penalties, fines, litigation costs, lost revenue or other consequences, which could adversely impact our tenants’ ability to make contractual rent payments to us under a triple-net lease or our cash flows from operations under a management arrangement.
Our tenants and managers have, and may continue to seek to, offset losses by obtaining funds under the recently adopted CARES Act or other similar legislative initiatives at the state and local level. It is indeterminable when or if these
government funds will ultimately be received by our tenants and managers or whether these funds may materially offset the cash flow disruptions experienced by them. If they are unable to obtain these funds within a reasonable time period or at all, or the conditions precedent to receiving these funds are overly burdensome or not feasible, it may substantially affect their ability to make payments or perform their obligations when due to us.
A significant portion of our revenues and operating income is dependent on a limited number of tenants and managers, including Brookdale Senior Living, Ardent, Kindred, Atria and Sunrise.
As of December 31, 2020, Atria and Sunrise, collectively, managed 258 of our consolidated senior housing communities pursuant to long-term management agreements. Additionally, as of December 31, 2020, our three largest tenants, Brookdale Senior Living, Ardent and Kindred leased from us 121 properties, 12 properties and 32 properties respectively. These properties represent a substantial portion of our portfolio, based on their gross book value, and account for a significant portion of our revenues and NOI.
We depend on Brookdale Senior Living, Ardent and Kindred to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and to comply with the terms of the mortgage financing documents, if any, affecting the properties they lease from us. We cannot assure you that they will have sufficient assets, income and access to financing to enable them to satisfy their obligations to us, and any failure, inability or unwillingness by them to do so could adversely affect our business, financial condition and results of operations. In addition, any failure by any one of Brookdale Senior Living, Ardent or Kindred to conduct effectively its operations or to maintain and improve the properties it leases from us could adversely affect its business reputation and its ability to attract and retain patients or residents in such properties, which could in turn adversely affect our business, financial condition and results of operations. These tenants have agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their respective businesses. We cannot assure you that they will have sufficient assets, income, access to financing and insurance coverage to enable them to satisfy those obligations.
We rely on a relatively small number of third-party managers, including Atria and Sunrise, to manage a significant number of the properties in our senior living operations segment and to set appropriate resident fees, provide accurate property-level financial results for our properties in a timely manner and otherwise operate our senior housing communities in compliance with the terms of our management agreements and all applicable laws and regulations. Any adverse developments in such managers’ business and affairs or financial condition could impair their ability to manage our properties efficiently and effectively and could adversely affect the financial performance of our properties and our business, financial condition and results of operations. If any one of our managers experience financial, legal, accounting or regulatory difficulties, such difficulties could result in, among other adverse events, impacts to its financial stability, acceleration of its indebtedness, impairment of its continued access to capital, the enforcement of default remedies by its counterparties, or the commencement of insolvency proceedings by or against it, any one or a combination of which could adversely affect our business, financial condition and results of operations.
In the event that any of our tenants or managers merge with one another, our dependence on a small group of significant third parties would increase, as would our exposure to the risks described above.
If we need to replace any of our tenants or managers, we may be unable to do so on as favorable terms, or at all, and we could be subject to delays, limitations and expenses, which could adversely affect our business, financial condition and results of operations.
Our tenants may not renew their leases with us, and our managers may not renew their management agreements with us, beyond their current terms. Our leases and management agreements also provide us, our tenants and our managers with termination rights in certain circumstances. If our leases or management agreements are not renewed or are otherwise terminated, we would attempt to reposition those properties with another tenant or manager, as applicable. We may not be successful in identifying suitable replacements or entering into leases, management agreements or other arrangements with new tenants or managers on a timely basis or on terms as favorable to us as our current leases or management agreements, if at all, and we may be required to fund certain expenses and obligations (e.g., real estate taxes, debt costs and maintenance expenses) to preserve the value of, and avoid the imposition of liens on, our properties while they are being repositioned.
During transition periods to new tenants or managers, the attention of existing tenants or operators may be diverted from the performance of the properties, which could cause the financial and operational performance at those properties to decline. Our ability to reposition our properties with a suitable replacement tenant or manager could be significantly delayed or limited by state licensing, receivership, certificates of need (“CON”) or other laws, as well as by the Medicare and Medicaid
change-of-ownership rules, and we could incur substantial additional expenses in connection with any licensing, receivership or change-of-ownership proceedings.
In the case of our leased properties, following expiration of a lease term or if we exercise our right to replace a tenant in default, rental payments on the related properties could decline or cease altogether while we reposition the properties with a suitable replacement tenant. This risk could be exacerbated by new laws and regulations enacted during the COVID-19 pandemic that limit our ability to take remedial action against defaulted tenants. Further, our competitors may offer space at rental rates below current market rates or below the rental rates we currently charge, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge to retain tenants when leases expire. Our ability to locate and attract suitable replacement tenants also could be impaired by the specialized healthcare uses or contractual restrictions on use of the properties, and we may be forced to spend substantial amounts to adapt the properties to other uses.
In the event of borrower defaults, we may be unable to foreclose successfully on the collateral securing our loans and other investments, and even if we are successful in our foreclosure efforts, we may be unable to sell successfully any acquired equity interests or reposition any acquired properties, which could adversely affect our ability to recover our investments.
If a borrower defaults under mortgage or other loans for which we are the lender, we may attempt to foreclose on the collateral securing those loans, including by acquiring any pledged equity interests or acquiring title to the subject properties, to protect our investment. In response, the defaulting borrower may contest our enforcement of foreclosure or other available remedies, seek bankruptcy protection against our exercise of enforcement or other available remedies, or bring claims against us for lender liability. Any such delay or limit on our ability to pursue our rights or remedies could adversely affect our business, financial condition and results of operations.
Even if we successfully foreclose on the collateral securing our mortgage loans and other investments, costs related to enforcement of our remedies, high loan-to-value ratios or declines in the value of the collateral could prevent us from realizing the full amount of our loans, and we could be required to record a valuation allowance for such losses. Moreover, the collateral may include equity interests that may have incurred unexpected liabilities or other limiting characteristics that may result in us not having full recourse to assets within that entity’s subsidiary structure. For example, our mezzanine loan investments are subordinate to senior secured loans held by other investors that encumber the same real estate, and, in certain circumstances, affords them the ability to extinguish our rights in the collateral, subject to our rights under market and customary co-lender contractual arrangements. In addition, we may not be able to sell the acquired assets or equity interests due to securities law restrictions or otherwise. We may be unable to reposition the properties with new tenants, borrowers or managers on a timely basis, if at all, or without making improvements or repairs. Any delay or costs incurred in selling or repositioning acquired collateral could adversely affect our ability to recover our investments.
Our success depends, in part, on our ability to attract and retain talented employees, and the loss of any one of our key personnel could adversely impact our business.
The success of our business depends, in part, on the leadership and performance of our executive management team and key employees. Failure to attract, retain and motivate highly qualified employees, or failure to develop and implement a viable succession plan, could result in inadequate depth of institutional knowledge, an ineffective culture or lack of certain skill sets, significantly impacting our future performance and adversely affecting our business. Competition for talented employees is intense, and we cannot assure you that we will retain our key officers and employees or that we will be able to attract and retain other highly qualified individuals in the future. COVID-19 could also negatively affect the health, availability and productivity of our current personnel and could impact our ability to recruit and attract new employees and retain current employees, particularly as remote work arrangements and their impact on the market for talent remains uncertain. In addition, while we have long-term compensation plans designed to retain our senior executives, if our retention and succession plans are not effective, or if we lose any one or more of our key officers and employees, our business could be adversely affected.
Our investments are concentrated across a variety of assets classes within healthcare real estate, making us more vulnerable to adverse changes in those asset classes and the real estate industry generally.
We invest in a variety of assets classes in healthcare real estate, including senior housing, R&I and healthcare properties. While we endeavor to invest in a diversified portfolio, there can be no assurance that in a particular economic or operational environment that all assets will perform equally well or that our balance sheet will be appropriately balanced. Each of our asset classes are subject to their own dynamics and their own specific operational, financial, compliance, regulatory and market risks.
Additionally, a broad downturn or slowdown in the healthcare real estate sector could have a greater adverse impact on our business than if we had investments in multiple industries and could negatively impact the ability of our tenants, borrowers and managers to meet their obligations to us. A downturn or slowdown in any one of our asset classes could adversely affect the value of our properties in such asset class and our ability to sell such properties at prices or on terms acceptable or favorable to us.
In addition, we are exposed to the risks inherent in concentrating our investments in real estate. Real estate investments are relatively illiquid, and our ability to quickly sell or exchange our properties in response to changes in economic or other conditions is limited. In the event we market any of our properties for sale, the value of those properties and our ability to sell at prices or on terms acceptable to us could be adversely affected by a downturn in the real estate industry. In addition, transfers of healthcare real estate may be subject to regulatory approvals that are not required for transfers of other types of commercial real estate. We cannot assure you that we will recognize the full value of any property that we sell for liquidity or other reasons, and the inability to respond quickly to changes in the performance of our investments could adversely affect our business, financial condition and results of operations.
Our investments in and acquisitions of properties may be unsuccessful or fail to meet our expectations.
We have made and expect to continue to make significant acquisitions and investments as part of our overall business strategy. Investments in and acquisitions of healthcare real estate 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 a tenant, borrower or manager will fail to meet performance expectations. Investments outside the United States raise legal, economic and market risks associated with doing business in foreign countries, such as currency exchange fluctuations, costly regulatory requirements and foreign tax risks. Domestic and international real estate development and redevelopment projects present additional risks, including construction delays or cost overruns that increase expenses, the inability to obtain required zoning, occupancy and other governmental approvals and permits on a timely basis, and the incurrence of significant costs prior to completion of the project. Furthermore, healthcare real estate properties are often highly customized, and the development or redevelopment of such properties may require costly tenant-specific improvements. As a result, we cannot assure you that we will achieve the economic benefit we expect from acquisition, investment, development and redevelopment opportunities. Our significant acquisition and investment activity presents certain risks to our business and operations, including, among other things, that:
•We may be unable to integrate successfully the operations, personnel or systems of acquired companies, maintain consistent standards, controls, policies and procedures, or realize the anticipated benefits of acquisitions and other investments within the anticipated time frame, or at all;
•We may be unable to monitor and manage our expanded portfolio of properties effectively, retain key employees or attract highly qualified new employees;
•Projections of estimated future revenues, costs savings or operating metrics that we develop during the due diligence and integration planning process might be inaccurate;
•Our leverage could increase or our per share financial results could decline if we incur additional debt or issue equity securities to finance acquisitions and investments;
•Acquisitions and other new investments could divert management’s attention from our existing assets; or
•The value of acquired assets or the market price of our common stock may decline.
We cannot assure you that our acquisitions, developments, redevelopments and other investments will be successful or meet our expectations without encountering difficulties or that any such difficulties will not adversely affect our business, financial condition and results of operations.
Our ongoing strategy depends, in part, upon identifying and consummating future investments and effectively managing our expansion opportunities.
An important part of our business strategy is to continue to expand and diversify our portfolio, directly or indirectly with third parties, through accretive acquisition, investment, development and redevelopment activities in domestic and international healthcare real estate. Our execution of this strategy by successfully identifying, securing and consummating beneficial transactions is made more challenging by increased competition and can be affected by many factors, including our
relationships with current and prospective clients and partners, our ability to obtain debt and equity capital at costs comparable to or better than our competitors and lower than the yield we earn on our acquisitions or investments, and our ability to negotiate favorable terms with property owners seeking to sell and other contractual counterparties. We compete for these opportunities with a broad variety of potential investors, including other healthcare REITs, real estate partnerships, healthcare providers, healthcare 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. See “Business-Competition” included in Part I, Item 1 of this Annual Report. If we are unsuccessful at identifying and capitalizing on investment, acquisition, development and redevelopment opportunities and otherwise expanding and diversifying our portfolio, our growth and profitability may be adversely affected.
For example, we recently expanded into R&I and life sciences. When expanding into areas that are new to us, we face numerous risks and uncertainties, including risks associated with (i) the required investment of capital and other resources; (ii) the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk; (iii) the diversion of management’s attention from our other businesses; (iv) the increasing demands on or issues related to operational and management systems and controls; (v) compliance with additional legal or regulatory requirements with which we are not familiar; and (vi) the broadening of our geographic footprint, including the risks associated with conducting operations in non-U.S. jurisdictions. We cannot assure you that any new strategies, markets or businesses that we enter into will be successful or meet our expectations without encountering difficulties or that any such difficulties will not adversely affect our business, financial condition and results of operations.
Our investments in co-investment vehicles, joint ventures and minority interests may subject us to risks and liabilities that we would not otherwise face.
We have and may continue to develop and acquire properties in joint ventures with other persons or entities when circumstances warrant the use of these structures. In 2020, we formed the Ventas Investment Management Platform to consolidate our private capital management capabilities, which includes our Ventas Life Science and Healthcare Real Estate Fund, L.P. (the “Ventas Fund”), our joint venture with GIC and other partnerships with institutional capital vehicles, under a single platform. As of December 31, 2020, we had over $3 billion in assets under management in this platform. In the future, we may enter into additional co-investments, partnerships and joint ventures, either through the Ventas Investment Management Platform or otherwise. We also own minority investments in properties and unconsolidated operating entities which entitle us to rights and protections typical of minority investments, but that inherently involve a lesser degree of control over business operations.
There can be no assurance that we will be able to form new co-investment vehicles or attract third-party investment through additional investments or otherwise. Further, there can be no assurance that we are able to realize value from such investments.
These ventures involve risks not present with respect to our wholly owned properties, including the following:
•We may be unable to take actions that are opposed by our partners under arrangements that require us to share decision-making authority over major decisions;
•For ventures in which we have a noncontrolling interest, our partners may take actions that we oppose;
•If our partners become bankrupt or otherwise fail to fund their share of required capital contributions, we may choose to or be required to contribute such capital;
•We may be subject to transfer restrictions that apply to our interest in the venture;
•Our partners may have business interests or goals that conflict with our business interests and goals, including the timing, terms and strategies for any investments, and what levels of debt to incur or carry;
•Our partners may have competing interests in our markets that could create conflicts of interest;
•We could experience an impasse on certain decisions where we do not have sole decision-making authority, which could require us to expend additional resources on resolving such impasses or potential disputes;
•Disagreements with our partners could result in litigation or arbitration;
•Our partners might become insolvent, fail to fund their share of required capital contributions or fail to fulfill their obligations as a partner, which may require us to infuse our own capital into the venture on behalf of the partner despite other competing uses for such capital; and
•We may suffer other losses as a result of actions taken by our partners with respect to our venture investments.
In some instances, our partners may have the right to 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 will be limited
if we do not have sufficient cash, available borrowing capacity or other capital resources. This would require us to sell our interest in the venture when we would otherwise prefer to retain it.
Additionally, certain ventures require Ventas to assume the role of managing member with increased duties to the partnership. In the event of certain events or conflicts, our partners may have recourse against Ventas, including monetary penalties, the ability to force a sale or exit the venture, as well as other remedies.
Development, redevelopment and construction risks could affect our profitability.
We invest in various development and redevelopment projects. In deciding whether to make an investment in a project, we make certain assumptions regarding the expected future performance of the property. Our assumptions are subject to risks generally associated with development and redevelopment projects, including, among others, that:
•Tenants may not lease space at the quantity or rental rate levels or on the schedule projected, including due to increased competition in the market and other market and economic conditions;
•We may not complete the project on schedule or within budgeted amounts;
•We may not be able to recognize rental revenue in some cases although cash rent is being paid and the lease has commenced;
•We may encounter delays in obtaining or we may fail to obtain all necessary zoning, land use, building, occupancy, environmental and other governmental permits and authorizations, or underestimate the costs necessary to develop or redevelop the property to market standards;
•We may be unable to obtain financing for the project on favorable terms or at all, including at the maturity of an applicable construction loan;
•Construction or other delays may provide tenants or residents the right to terminate preconstruction leases or cause us to incur additional costs, including through rent abatement;
•Volatility in the price of construction materials or labor may increase our project costs;
•In the case of our MOB and R&I developments, hospitals, health systems, or university partners may maintain significant decision-making authority with respect to the development schedule;
•Our builders or development managers may fail to perform or satisfy the expectations of our clients or prospective clients; and
•We may incorrectly forecast risks associated with development in new geographic regions, including new markets where we may not have sufficient depth of market knowledge.
If any of the risks described above occur, our development and redevelopment projects may not yield anticipated returns, which could adversely affect our business, financial condition and results of operations.
We face potential adverse consequences from the bankruptcy, insolvency or financial deterioration of our tenants, borrowers, managers and other obligors.
We lease our properties to unaffiliated tenants or operate them through independent third-party managers. We are also a direct or indirect lender to various tenants and managers. We have limited control over the success or failure of our tenants’, borrowers’ and managers’ businesses, and, at any time, a tenant, borrower or manager may experience a downturn in its business that weakens its financial condition. If that happens, the tenant, borrower or manager may fail to make its payments to us when due. Although our lease, loan and management agreements give us the right to exercise certain remedies in the event of default on the obligations owing to us, we may decide not to exercise those remedies if we believe that enforcement of our rights would be more detrimental to our business than seeking alternative approaches. We may also decide not to enforce other contractual protections, such as annual rent escalators, or the properties may not generate sufficient revenue to achieve the specified rent escalation parameters, which would adversely affect our business, financial condition and results of operations. This risk could be exacerbated by new laws and regulations enacted during the COVID-19 pandemic that limit our ability to enforce contractual escalators against tenants affected by the COVID-19 pandemic.
A downturn in any one of our tenants’, borrowers’ or managers’ businesses could ultimately lead to its bankruptcy if it is unable to timely resolve the underlying causes, which may be largely outside of its control. Bankruptcy and insolvency laws afford certain rights to a party that has filed for bankruptcy or reorganization that may render certain of our rights and remedies unenforceable, or, at the least, delay our ability to pursue such rights and remedies and realize any recoveries in connection therewith. For example, we cannot evict a tenant solely because of its bankruptcy filing. Additionally, a debtor-lessee may reject our lease in a bankruptcy proceeding, and any claim we have for unpaid rent might not be paid in full. We also may be required to fund certain expenses and obligations (e.g., real estate taxes, debt costs and maintenance expenses) to preserve the value of our properties, avoid the imposition of liens on our properties or transition our properties to a new tenant or manager.
Bankruptcy or insolvency proceedings may result in increased costs and significant management distraction. If we are unable to transition affected properties efficiently and effectively, such properties could experience prolonged operational disruption, leading to lower occupancy rates and further depressed revenues. Publicity about a tenant’s, borrowers’ or manager’s financial condition and insolvency proceedings may also negatively impact their and our reputations, which could result in decreased customer demand and revenues. Any or all of these risks could adversely affect our business, financial condition and results of operations. These risks would be magnified where we lease multiple properties to a single third party under a master lease, as a failure or default under a master lease would expose us to these risks across multiple properties.
We own certain properties subject to ground lease, air rights or other restrictive agreements that limit our uses of the properties, restrict our ability to sell or otherwise transfer the properties and expose us to loss of the properties if such agreements are breached by us or terminated.
Our investments in MOBs, R&I buildings and facilities as well as other properties may be made through leasehold interests in the land on which the buildings are located, leases of air rights for the space above the land on which the buildings are located, or other similar restrictive arrangements. Many of these ground lease, air rights and other restrictive agreements impose significant limitations on our uses of the subject properties, restrict our ability to sell or otherwise transfer our interests in the properties or restrict the leasing of the properties. These restrictions may limit our ability to timely sell or exchange the properties, impair the properties’ value or negatively impact our ability to find suitable tenants for the properties. In addition, we could lose our interests in the subject properties if the ground lease, air rights or other restrictive agreements are breached by us or terminated.
Environmental, Economic and Market Risks
Increased construction and development in the markets in which our properties are located could adversely affect our future occupancy rates, operating margins and profitability.
The oversupply of healthcare real estate could adversely affect our business. In many jurisdictions, limited barriers to entry could lead to the development of new properties that outpaces demand across our various asset classes. If existing supply and development collectively outpaces demand for those assets in the markets in which our properties are located, those markets may become saturated and we could experience decreased occupancy, reduced operating margins and lower profitability, which could adversely affect our business, financial condition and results of operations.
General economic conditions and other events or occurrences that affect areas in which our properties are geographically concentrated may impact financial results.
We are exposed to general economic conditions, local, regional, national and international economic conditions and other events and occurrences that affect the markets in which we own properties. Our operating performance is impacted by the economic conditions of the specific markets in which we have concentrations of properties and could be adversely affected if conditions become less favorable in any such markets. For example, a shortage of skilled workers in a particular region, including nurses or other trained personnel, may force our third-party managers to enhance their pay and benefits package to compete effectively for such personnel, but such managers may not be able to offset these added costs by increasing the rates charged to residents, which may result in less revenue to our business.
A substantial portion of our value is derived from properties in California, New York, Texas, Pennsylvania and Illinois, and as a result, we are subject to increased exposure to adverse conditions affecting these regions, including downturns in the local economies or changes in local real estate conditions, changing demographics, increased construction and competition or decreased demand for our properties, regional climate events and changes in state-specific legislation, which could adversely affect our business, financial condition and results of operations.
To the extent that we or our tenants, borrowers and managers are unable to navigate successfully the trends impacting our or their businesses and the industries in which we or they operate, we may be adversely affected.
Our tenants, borrowers and managers include senior housing operators, hospitals, post-acute facilities and other healthcare systems, medical offices and life sciences and technology companies that are subject to a complex set of trends affecting their businesses and the industries in which they operate. If we or they are unable to successfully navigate such trends, our business, financial condition and results of operators could be adversely affected.
There have been, and could be additional, advances or changes in technology, payment models, healthcare delivery models, regulation or consumer behavior or perception that could over time reduce demand for on-site activities provided at our properties. For example, the effects of shelter-in-place and stay-at-home orders, including remote work arrangements for an extended period of time, could broadly impact market demand for real estate and could cause long term structural changes in the marketplace. If our tenants and managers are not able to adapt to long-term changes in demand, their financial condition could be materially impacted, and our business could suffer. In addition, our tenants, borrowers and managers face an increasingly competitive labor market, which has been compounded by the COVID-19 pandemic. An inability to attract and retain trained personnel could negatively impact the ability of our tenants, borrowers and managers to meet their obligations to us. A shortage of care givers or other trained personnel, union activities, minimum wage laws, or general inflationary pressures on wages may force tenants, borrowers and managers to enhance pay and benefits packages to compete effectively for skilled personnel, or to use more expensive contract personnel, but they may be unable to offset these added costs by increasing the rates charged to residents.
Additionally, controls imposed by Medicare, Medicaid and commercial third-party payors designed to reduce admissions and lengths of stay, commonly referred to as “utilization reviews,” have affected and are expected to continue to affect certain of our tenants, specifically acute care hospitals and post-acute facilities. Telehealth and increased use of home healthcare may also reduce demand for activities at our properties. The U.S. Congress and certain state legislatures have introduced and passed a number of proposals and legislation designed to make major changes in the healthcare system, including changes that directly or indirectly affect reimbursement. Several of these laws, including the Affordable Care Act, have promoted shifting from traditional fee-for-service reimbursement models to alternative payment models that tie reimbursement to quality and cost of care, such as accountable care organizations and bundled payments. See “Government Regulation-United States Healthcare Regulation, Licensing and Enforcement” included in Part I, Item 1 of this Annual Report. These and other trends could significantly and adversely affect the profitability of these tenants, which could affect their ability to make rental payments to us or their willingness to renew their leases on terms that are as favorable to us, or at all.
The hospitals on or near the campuses where our MOBs are located and their affiliated health systems could fail to remain competitive or financially viable, which could adversely impact their ability to attract physicians and physician groups to our MOBs and our other properties that serve the healthcare industry.
Our MOBs and other properties that serve the healthcare industry depend on the competitiveness and financial viability of the hospitals on or near the campuses where our properties are located and their ability to attract physicians and other healthcare-related clients to our properties. The viability of these hospitals, in turn, depends on factors such as the quality and mix of healthcare services provided, competition for patients, physicians and physician groups, demographic trends in the surrounding community, market position and growth potential as well as the ability of the affiliated health systems to provide economies of scale and access to capital. If a hospital on or near the campus where one of our properties is located fails or becomes unable to meet its financial obligations, and if an affiliated health system is unable to support that hospital, that hospital may be unable to compete successfully or could be forced to close or relocate, which could adversely impact its ability to attract physicians and other healthcare-related clients. Because we rely on proximity to and affiliations with hospitals to create leasing demand in our properties, a hospital’s inability to remain competitive or financially viable, or to attract physicians and physician groups, could adversely affect our properties and our business, financial condition and results of operations.
Our life science, R&I tenants face unique levels of regulation, expense and uncertainty.
Our life science, R&I tenants develop and sell products and services in an industry that is characterized by rapid and significant changes, evolving industry standards and uncertainty over the implementation of new healthcare reform legislation, which may cause them to lose competitive positions and adversely affect their operation. These tenants, particularly those involved in developing and marketing pharmaceutical products, require significant outlays of funds for the research and development, clinical testing, manufacture and commercialization of their products and technologies, as well as to fund their obligations, including rent payments due to us, and our tenants’ ability to raise capital depends on the viability of their products and technologies, their financial and operating condition and outlook, and the overall financial, banking and economic environment. If private investors, the federal government, universities, public markets or other sources of funding are unavailable to support such development, including as a result of general economic conditions, adverse market conditions or government shutdowns that limit our tenants’ ability to raise capital, such as those resulting from the current COVID-19 pandemic, a tenant may not be able to pay rent on the terms agreed or at all, its business may fail and in certain cases, its lease may automatically terminate without any further obligation to pay us rent.
Additionally, the research and development, clinical testing, manufacture and marketing of some of our tenants’ products require federal, state and foreign regulatory approvals. The approval process is typically long, expensive and uncertain. Even if our tenants have sufficient funds to seek approvals, one or all of their products may fail to obtain the
required regulatory approvals on a timely basis or at all. Furthermore, our tenants may only have a small number of products under development. If one product fails to receive the required approvals at any stage of development, it could significantly adversely affect such tenant’s entire business and its ability to pay rent. Our tenants depend on the commercial success of certain products, and they may be unable to manufacture their products successfully or economically; may be unable to adapt to the rapid technological advances in the industry and to adequately protect their intellectual property under patent, copyright or trade secret laws or may face expiration of patent protection; may be faced with later discovery of safety concerns; may face competition from new products; or may not receive acceptance of their products.
We cannot assure you that any of our life science, R&I tenants will be successful in their businesses. Any tenant that is unable to avoid, or sufficiently mitigate, the risks described above may have difficulty making rental payments or satisfying its other lease obligations to us or may have difficulty maintaining the value of our investment, which could materially adversely affect our business, financial condition and results of operations.
Merger, acquisition and investment activity in our industries resulting in a change of control of, or a competitor’s investment in, one or more of our tenants, borrowers or managers could adversely affect our business, financial condition and results of operations.
The seniors housing and healthcare industries have experienced and may continue to experience consolidation, including among owners of real estate, tenants and care providers. In connection with any change of control of a tenant, borrower or manager, such tenant’s, borrower’s or manager’s strategy, financial condition, management team or real estate needs may change, any of which could adversely affect our relationship with such party and our revenues and results of operations. In addition, a competitor’s investment in one of our tenants, borrowers or managers could enable our competitor to directly or indirectly influence that tenant’s, borrower’s or manager’s business and strategy in a manner that impairs our relationship with the tenant, borrower or manager or is otherwise adverse to our interests. Depending on our contractual agreements and the specific facts and circumstances, we may not have the right to consent to a competitor’s investment in, a change of control of, or other transactions impacting a tenant, borrower or manager.
Damage from catastrophic or extreme weather and other natural events and the physical effects of climate change could result in losses to the Company.
Certain of our properties are in areas particularly susceptible to revenue loss, cost increase or damage caused by catastrophic or extreme weather and other natural events, including fires, snow or ice storms, windstorms or hurricanes, earthquakes, flooding or other severe weather. These adverse weather and natural events could cause substantial damages or losses to our properties which could exceed our or our tenants’, borrowers’ or managers’ property insurance coverage. Operationally, such events could cause a major power outage, leading to a disruption of our systems and operations. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected property, as well as anticipated future revenue from that property. Any such loss could materially and adversely affect our business, financial condition and results of operations. Climate change may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable.
To the extent that significant changes in the climate occur in areas where our properties are located, we may experience extreme weather and changes in precipitation and temperature, all of which may result in physical damage to or a decrease in demand for properties located in these areas or affected by these conditions. Should the impact of climate change be material in nature, including destruction of our properties, or occur for lengthy periods of time, our business, financial condition or results of operations may be adversely affected.
In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties and could also require us to spend more on our new development properties without a corresponding increase in revenue.
Our Capital Structure Risks
We may become more leveraged.
As of December 31, 2020, we had approximately $11.9 billion of outstanding indebtedness. The instruments governing our existing indebtedness permit us to incur substantial additional debt, including secured debt, and we may satisfy our capital and liquidity needs through additional borrowings. A high level of indebtedness would require us to dedicate a substantial portion of our cash flow from operations to the payment of debt service, thereby reducing the funds available to
implement our business strategy and make distributions to stockholders. A high level of indebtedness on an absolute basis or as a ratio to our cash flow could also have the following consequences:
•Potential limits on our ability to adjust rapidly to changing market conditions and vulnerability in the event of a downturn in general economic conditions or in the real estate or healthcare industries;
•Potential impairment of our ability to obtain additional financing to execute on our business strategy; and
•Potential downgrade in the rating of our debt securities by one or more rating agencies, which could have the effect of, among other things, limiting our access to capital and increasing our cost of borrowing.
In addition, from time to time, we mortgage certain of our properties to secure payment of indebtedness. If we are unable to meet our mortgage payments, then the encumbered properties could be foreclosed upon or transferred to the mortgagee with a resulting loss of income and asset value.
We are highly dependent on access to the capital markets. Limitations on our ability to access capital could have an adverse effect on us, including our ability to make required payments on our debt obligations, make distributions to our stockholders or make future investments necessary to implement our business strategy.
We cannot assure you that we will be able to raise the capital necessary to meet our debt service obligations, make distributions to our stockholders or make future investments necessary to implement our business strategy, if our cash flow from operations is insufficient to satisfy these needs, and the failure to do so could adversely affect our business. We cannot assure you that conditions in the capital markets will not deteriorate or that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings and our results of operations and financial condition. If we cannot access capital at an acceptable cost or at all, we may be required to liquidate one or more investments in properties at times that may not permit us to maximize the return on those investments or that could result in adverse tax consequences to us.
As a public company, our access to debt and equity capital depends, in part, on the trading prices of our senior notes and common stock, which, in turn, depend upon market conditions that change from time to time, such as the market’s perception of our financial condition, our growth potential and our current and expected future earnings and cash distributions. Our failure to meet the market’s expectation regarding future earnings and cash distributions or a significant downgrade in the ratings assigned to our long-term debt could impact our ability to access capital or increase our borrowing costs.
The COVID-19 pandemic has also caused, and is likely to continue to cause, severe economic, market and other disruptions worldwide. We cannot assure you that conditions in the bank lending, capital and other financial markets will not continue to deteriorate as a result of the pandemic, or that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. The continuance of decreased revenue and NOI as a result of the COVID-19 pandemic could lead to downgrades of our long-term credit rating. Such future downgrades could increase our borrowing costs, which would make it more difficult or expensive to obtain additional financing or refinance existing obligations and commitments. In addition, the deterioration of global economic conditions as a result of the pandemic has decreased occupancy levels and pricing across our portfolio as senior residents and tenants reduce or defer their spending.
We also rely on the financial institutions that are parties to our revolving credit facilities. If these institutions become capital constrained, tighten their lending standards or become insolvent or if they experience excessive volumes of borrowing requests from other borrowers within a short period of time, they may be unable or unwilling to honor their funding commitments to us, which would adversely affect our ability to draw on our revolving credit facilities and, over time, could negatively impact our ability to consummate acquisitions, repay indebtedness as it matures, fund capital expenditures or make distributions to our stockholders.
We may be adversely affected by fluctuations in currency exchange rates.
Our ownership of properties in Canada and the United Kingdom currently subjects us to fluctuations in the exchange rates between U.S. dollars and Canadian dollars or the British pound, which may, from time to time, impact our financial condition and results of operations. If we continue to expand our international presence through investments in, or acquisitions or development of, senior housing or healthcare assets outside the United States, Canada or the United Kingdom, we may transact business in other foreign currencies. Although we may pursue hedging alternatives, including borrowing in local
currencies, to protect against foreign currency fluctuations, we cannot assure you that such fluctuations will not adversely affect our business, financial condition and results of operations.
We are exposed to increases in interest rates, which could reduce our profitability and adversely impact our ability to refinance existing debt, sell assets or engage in acquisition, investment, development and redevelopment activity, and our decision to hedge against interest rate risk might not be effective.
We receive a significant portion of our revenues by leasing assets under long-term triple-net leases that generally provide for fixed rental rates subject to annual escalations, while certain of our debt obligations are floating rate obligations with interest and related payments that vary with the movement of LIBOR, Bankers’ Acceptance or other indexes. The generally fixed rate nature of a significant portion of our revenues and the variable rate nature of certain of our debt obligations create interest rate risk. Although our operating assets provide a partial hedge against interest rate fluctuations, if interest rates rise, the costs of our existing floating rate debt and any new debt that we incur would increase. These increased costs could reduce our profitability, impair our ability to meet our debt obligations, or increase the cost of financing our acquisition, investment, development and redevelopment activity. An increase in interest rates also could limit our ability to refinance existing debt upon maturity or cause us to pay higher rates upon refinancing, as well as decrease the amount that third parties are willing to pay for our assets, thereby limiting our ability to promptly reposition our portfolio in response to changes in economic or other conditions.
We may seek to manage our exposure to interest rate volatility with hedging arrangements that involve additional risks, including the risks that counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes, that the amount of income we earn from hedging transactions may be limited by federal tax provisions governing REITs, and that these arrangements may cause us to pay higher interest rates on our debt obligations than otherwise would be the case. Moreover, no amount of hedging activity can fully insulate us from the risks associated with changes in interest rates. Failure to hedge effectively against interest rate risk, if we choose to engage in such activities, could adversely affect our business, financial condition and results of operations.
Changes in the method pursuant to which the LIBOR rates are determined and potential phasing out of LIBOR may affect our financial results.
LIBOR and certain other interest “benchmarks” may be subject to regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences. The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced that it intends to stop encouraging or requiring banks to submit rates for the calculation of LIBOR rates after 2021. While there is no consensus on what rate or rates may become accepted alternatives to LIBOR, the Alternative Reference Rates Committee, a steering committee comprised of U.S. financial market participants, selected the Secured Overnight Finance Rate (“SOFR”) as an alternative to LIBOR. SOFR is a broad measure of the cost of borrowing cash in the overnight U.S. treasury repo market, and the Federal Reserve Bank of New York started to publish the SOFR in May 2018. At this time, it is impossible to predict whether the SOFR or another reference rate will become an accepted alternative to LIBOR. The discontinuation, reform or replacement of LIBOR or any other benchmark rates may have an unpredictable impact on contractual mechanics in the credit markets or cause disruption to the broader financial markets, and could have an adverse effect on LIBOR-based interest rates on our current or future debt obligations.
Covenants in the instruments governing our and our subsidiaries’ existing indebtedness limit our operational flexibility, and a covenant breach could materially adversely affect our operations.
The terms of the instruments governing our existing indebtedness require us to comply with certain customary financial and other covenants, such as maintaining debt service coverage, leverage ratios and minimum net worth requirements. Our continued ability to incur additional debt and to conduct business in general is subject to our compliance with these covenants, which limit our operational flexibility. Breaches of these covenants could result in defaults under the applicable debt instruments and could trigger defaults under any of our other indebtedness that is cross-defaulted against such instruments, even if we satisfy our payment obligations. In addition, covenants contained in the instruments governing our subsidiaries’ outstanding mortgage indebtedness may restrict our ability to obtain cash distributions from such subsidiaries for the purpose of meeting our debt service obligations. Financial and other covenants that limit our operational flexibility, as well as defaults resulting from our breach of any of these covenants, could adversely affect our business, financial condition and results of operations.
Our Legal, Compliance and Regulatory Risks
Significant legal or regulatory proceedings could subject us or our tenants or managers to increased operating costs and substantial uninsured liabilities, which could materially adversely affect our or their liquidity, financial condition and results of operations.
From time to time, we or our tenants or managers may be subject to lawsuits, investigations, claims and other legal or regulatory proceedings arising out of our alleged actions or the alleged actions of our tenants and managers. These claims may include, among other things, professional liability and general liability claims, commercial liability claims, unfair business practices claims and employment claims, as well as regulatory proceedings, including proceedings related to our senior living operations, where we are typically the holder of the applicable healthcare license.
In our operating assets, including those in our senior living operations and office segments, we are generally responsible for all liabilities of such properties, including any lawsuits, investigations, claims and other legal or regulatory proceedings, other than those arising out of certain actions by our managers, such as those caused by gross negligence or willful misconduct. As a result, we have exposure to, among other things, professional and general liability claims, employment law claims and the associated litigation and other costs related to defending and resolving such claims. In our senior living operations in particular, if one of our managers fails to comply with applicable law or regulation, we may be deemed responsible, which could subject us to the imposition of civil, criminal and administrative penalties, including: the loss or suspension of accreditation, licenses or CONs; suspension of or non-payment for new admissions; denial of reimbursement; fines; suspension, decertification, or exclusion from federal and state healthcare programs; or facility closure.
In certain circumstances, our tenants or managers may be contractually obligated to indemnify, defend and hold us harmless in whole or in part with respect to certain actions, legal or regulatory proceedings. In addition, third parties from whom we acquired certain of our assets and, in some cases, their affiliates may be required by the terms of the related conveyance documents to indemnify, defend and hold us harmless against certain actions, investigations and claims related to the acquired assets and arising prior to our ownership or related to excluded assets and liabilities. In some cases, a portion of the purchase price consideration is held in escrow for a specified period of time as collateral for these indemnification obligations. We cannot assure you that these third parties will be able to satisfy their defense and indemnification obligations to us or that any purchase price consideration held in escrow will be sufficient to satisfy claims for which we are entitled to indemnification.
An unfavorable resolution of any such lawsuit, investigation, claims or other legal or regulatory proceeding could materially adversely affect our or our tenants’ or managers’ liquidity, financial condition and results of operations, and may not be subject to sufficient insurance coverage. In addition, even with a favorable resolution of any such litigation or proceeding, the effect of litigation and other potential litigation and proceedings may materially increase operating costs incurred by us or our tenants or managers. Negative publicity with respect to any lawsuits, claims or other legal or regulatory proceedings may also negatively impact their or our or the properties’ reputation.
The COVID-19 pandemic may cause our senior housing and healthcare business to face increased exposure to lawsuits or other legal or regulatory proceedings filed at the same time across multiple jurisdictions, such as professional or general liability litigation alleging wrongful death and negligence claims, some of which may result in large damage awards and not be indemnified or subject to sufficient insurance coverage, may require our support as a result of our indemnification agreements or may result in restrictions in the operations of our or our tenants’ or managers’ business.
We and our tenants, borrowers and managers may be adversely affected by regulation and enforcement.
We and our tenants, borrowers and managers are subject to or impacted by extensive and frequently changing federal, state, local and international laws and regulations. For example, the healthcare industry is subject to laws and regulations that relate to, among other things, licensure and CON, conduct of operations, ownership of facilities, construction of new facilities and addition of equipment, governmental reimbursement programs, such as Medicare and Medicaid, allowable costs, services, prices for services, qualified beneficiaries, appropriateness and classification of care, patient rights, resident health and safety, data privacy and security laws, wage and hour laws, fraud and abuse and financial and other arrangements that may be entered into by healthcare providers. We generally hold the applicable healthcare licenses and enroll in applicable government healthcare programs on behalf of the properties in our senior living operations segment, which subjects us to potential liability under certain of such related healthcare laws and regulations. See “Government Regulation-United States Healthcare Regulation, Licensing and Enforcement” included in Part I, Item 1 of this Annual Report. In addition, many of our R&I tenants
are subject to laws and regulations that govern the research, development, clinical testing, manufacture and marketing of drugs, medical devices and similar products.
The laws and regulations that apply to us and our tenants, borrowers and managers are complex and may change rapidly, and efforts to comply and keep up with them require significant resources. Any changes in scope, interpretation or enforcement of the regulatory framework could require us or our tenants, borrowers or managers to invest significant resources responding to such changes. If we or our tenants, borrowers or managers fail to comply with the extensive laws, regulations and other requirements applicable to our or their businesses and the operation of our or their properties, we or they could face a number of remedial actions, including forced closure, loss of accreditation, bans on admissions of new patients or residents, imposition of fines, ineligibility to receive reimbursement from governmental and private third-party payor programs or civil or criminal penalties. In any such event, our and our tenants’, borrowers’ and managers’ respective businesses, results of operations (including results of properties) and financial condition could be adversely affected.
Our investments may expose us to unknown liabilities.
We may acquire or invest in properties or businesses that are subject to liabilities and without any recourse, or with only limited recourse, against the prior owners or other third parties with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle or contest it, which could adversely affect our results of operations and cash flow.
We may assume or incur liabilities, including, in some cases, contingent liabilities, and be exposed to actual or potential claims in connection with our acquisitions that adversely affect us, such as:
•Liabilities relating to the clean-up or remediation of environmental conditions;
•Unasserted claims of vendors or other persons dealing with the sellers;
•Liabilities, claims and litigation, including indemnification obligations, whether incurred in the ordinary course of business, relating to periods prior to or following our acquisition;
•Claims for indemnification by general partners, directors, officers and others indemnified by the sellers; and
•Liabilities for taxes relating to periods prior to our acquisition.
If the liabilities we assume in connection with acquisitions are greater than expected, or if we discover obligations relating to the acquired properties or businesses of which we were not aware at the time of acquisition, our business and results of operations could be materially adversely affected.
We could incur substantial liabilities and costs if any of our properties are found to be contaminated with hazardous substances or we become involved in any environmental disputes.
Under federal and state environmental laws and regulations, a current or former owner of real property may be liable for costs related to the investigation, removal and remediation of hazardous or toxic substances or petroleum that are released from or are present at or under, or that are disposed of in connection with such property. Owners of real property may also face other environmental liabilities, including government fines and penalties imposed by regulatory authorities and damages for injuries to persons, property or natural resources. Environmental laws and regulations often impose liability without regard to whether the owner was aware of, or was responsible for, the presence, release or disposal of hazardous or toxic substances or petroleum. In certain circumstances, environmental liability may result from the activities of a current or former operator of the property. Although we generally have indemnification rights against the current tenants of our properties for contamination caused by them, such indemnification may not adequately cover all environmental costs. See “Government Regulation-Environmental Regulation” included in Part I, Item 1 of this Annual Report.
The occurrence of cyber incidents could disrupt our operations, result in the loss of confidential information or damage our business relationships and reputation.
Cybersecurity incidents and cyber-attacks have been occurring globally at a more frequent and severe level and will likely continue to increase in frequency in the future. As our reliance on technology has increased, our business is subject to greater risk from cyber incidents, including attempts to gain unauthorized access to our or our managers’ or venture partners’ systems to disrupt operations, corrupt data or steal confidential information, and other electronic security breaches. While we,
our managers and our business partners have implemented measures to help mitigate these threats, such measures cannot guarantee that we or they will be successful in preventing a cyber incident. Our information technology networks and related systems are essential to our ability to perform day-to-day operations of our business and the occurrence of a cyber incident could result in a data center outage, disrupting our systems and operations, or the operations of our managers or business partners, compromise the confidential information of our employees, partners or the residents in our senior housing communities, and damage our business relationships and reputation. Although we have implemented various measures to manage risks relating to these types of events, such systems could prove to be inadequate and, if compromised, could become inoperable for extended periods of time, cease to function properly or fail to adequately secure private information. We do not control the cybersecurity plans and systems put in place by third-party providers, and such third-party providers may have limited indemnification obligations to us, which could cause us to be negatively impacted as a result. Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing them from being addressed appropriately. The failure of these systems or of disaster recovery plans for any reason could cause significant interruptions in our operations and result in a failure to maintain the security, confidentiality or privacy of sensitive data, including personal information, material nonpublic information and intellectual property and trade secrets and other sensitive information in our possession. We could be required to make a significant investment to remedy the effects of any such failures, including but not limited to harm to our reputation, legal claims that we and our partners may be subjected to, regulatory or enforcement action arising out of applicable privacy and other laws, adverse publicity, or other events that may affect our business and financial performance.
The amount and scope of insurance coverage provided by our policies and policies maintained by our tenants, managers or other counterparties may not adequately insure against losses.
We maintain or require in our lease, management and other agreements that our tenants, managers or other counterparties 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 each industry. Although we frequently review our insurance programs and requirements, we cannot assure you that we or our tenants, managers or other counterparties, will be able to procure or maintain adequate levels of insurance. As a result of the COVID-19 pandemic, the cost of insurance is expected to increase, and such insurance may not cover certain claims related to COVID-19. We also cannot assure you that we or our tenants, managers or other counterparties will maintain the insurance coverage required under our lease, management and other agreements, that we will continue to require the same levels of insurance under our lease, management and other agreements, that such insurance will be available at a reasonable cost in the future or at all or that the policies maintained will fully cover all losses on our properties upon the occurrence of a catastrophic event. Furthermore, we cannot make any guaranty as to the future financial viability of the insurers that underwrite our policies and the policies maintained by our tenants, managers and other counterparties. If we sustain losses in excess of our insurance coverage, we may be required to pay the difference and we could lose our investment in, or experience reduced profits and cash flows from our operations.
In certain cases, we and our tenants and managers may be subject to professional liability, general liability, employment, premise, privacy, environmental, unfair business practice and contracts claims brought by plaintiffs’ attorneys seeking significant damages and attorneys’ fees, some of which may not be insured or indemnified and some of which may result in significant damage awards. Due to the historically high frequency and severity of professional liability claims against senior housing and healthcare providers, the availability of professional liability insurance has decreased and the premiums on such insurance coverage remain costly. In addition, insurance for other claims such as wage and hour, certain environmental, privacy and unfair business practices may no longer be available, and the premiums on such insurance coverage, to the extent it is available, remain costly. As a result, insurance protection against such claims may not be sufficient to cover all claims against us or our tenants or managers and may not be available at a reasonable cost or otherwise on terms that provide adequate coverage. If we or our tenants and managers are unable to maintain adequate insurance coverage or are required to pay damages, we or they may be exposed to substantial liabilities and the adverse impact on our or our tenants’ and managers’ respective financial condition, results of operations and cash flows could be material, and could adversely affect our tenants’ and managers’ ability to meet their obligations to us.
Additionally, we and those of our tenants and managers who self-insure or who transfer risk of losses to a wholly owned captive insurance company could incur large funded and unfunded property and liability expenses, which could materially adversely affect theirs or our liquidity, financial condition and results of operations.
Failure to maintain effective internal controls could harm our business, results of operations and financial condition.
Pursuant to the Sarbanes-Oxley Act of 2002, we are required to provide a report by management on internal control over financial reporting, including management’s assessment of the effectiveness of such control. Because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud, effective internal controls over financial reporting may not prevent or detect misstatement and can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls over financial reporting and our operating internal controls, including any failure to implement required new or improved controls as a result of changes to our business or otherwise, or if we experience difficulties in their implementation, our business, financial condition and results of operations could be adversely affected and we could fail to meet our reporting obligations.
Our REIT Status Risks
Loss of our status as a REIT would have significant adverse consequences for us and the value of our common stock.
If we lose our status as a REIT (currently or with respect to any tax years for which the statute of limitations has not expired), we will face serious tax consequences that will substantially reduce the funds available to satisfy our obligations, to implement our business strategy and to make distributions to our stockholders for each of the years involved because:
•We would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to regular U.S. federal corporate income tax;
•We could be subject to increased state and local taxes; and
•Unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified.
In addition, in such event we would no longer be required to pay dividends to maintain REIT status, which could adversely affect the value of our common stock.
Qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”) for which there are only limited judicial and administrative interpretations. The determination of factual matters and circumstances not entirely within our control, as well as new legislation, regulations, administrative interpretations or court decisions, may adversely affect our investors or our ability to remain qualified as a REIT for tax purposes. In order to maintain our qualification as a REIT, we must satisfy a number of requirements, generally including requirements regarding the ownership of our stock, requirements regarding the composition of our assets, a requirement that at least 95% of our gross income in any year must be derived from qualifying sources, and we must make distributions to our stockholders aggregating annually at least 90% of our net taxable income, excluding capital gains. Although we believe that we currently qualify as a REIT, we cannot assure you that we will continue to qualify for all future periods.
The 90% 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. Such distributions reduce the funds we have available to finance our investment, acquisition, development and redevelopment activity and may limit our ability to engage in transactions that are otherwise in the best interests of our stockholders.
From time to time, we may not have sufficient cash or other liquid assets to satisfy the REIT distribution requirements. For example, 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, or non-deductible expenses such as principal amortization or repayments or capital expenditures in excess of non-cash deductions may prevent us from having sufficient cash or liquid assets to satisfy the 90% distribution requirement.
In the event that timing differences occur or we decide to retain cash or to distribute such greater amount as may be necessary to avoid income and excise taxation, we may seek to borrow funds, issue additional equity securities, pay taxable stock dividends, distribute other property or securities or engage in a transaction intended to enable us to meet the REIT distribution requirements. Any of these actions may require us to raise additional capital to meet our obligations; however, see “-Our Capital Structure Risks-We are highly dependent on access to the capital markets. Limitations on our ability to access capital could have an adverse effect on us, including our ability to make required payments on our debt obligations, make
distributions to our stockholders or make future investments necessary to implement our business strategy.” The terms of the instruments governing our existing indebtedness restrict our ability to engage in certain of these transactions.
To preserve our qualification as a REIT, our certificate of incorporation contains ownership limits with respect to our capital stock that may delay, defer or prevent a change of control of our company.
To assist us in preserving our qualification as a REIT, our certificate of incorporation provides that if a person acquires beneficial ownership of more than 9.0% of our outstanding common stock or more than 9.9% of our outstanding preferred stock, the shares that are beneficially owned in excess of the applicable limit are considered “excess shares” and are automatically deemed transferred to a trust for the benefit of a charitable institution or other qualifying organization selected by our Board of Directors. The trust is entitled to all dividends with respect to the excess shares and the trustee may exercise all voting power over the excess shares. In addition, we have the right to purchase the excess shares for a price equal to the lesser of (i) the price per share in the transaction that created the excess shares or (ii) the market price on the day we purchase the shares. If we do not purchase the excess shares, the trustee of the trust is required to transfer the shares at the direction of our Board of Directors. These ownership limits could delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders.
Our use of TRSs is limited under the Code.
Under the Code, no more than 20% of the value of the gross assets of a REIT may be represented by securities of one or more TRSs. This limitation may affect our ability to increase the size of our TRSs’ operations and assets, and there can be no assurance that we will be able to comply with the applicable limitation, or that such compliance will not adversely affect our business. Also, our TRSs may not, among other things, operate or manage certain healthcare facilities, which may cause us to forgo investments we might otherwise make. Finally, we may be subject to a 100% excise tax on the income derived from certain transactions with our TRSs that are not on an arm's-length basis. We believe our arrangements with our TRSs are on arm's-length terms and intend to continue to operate in a manner that allows us to avoid incurring the 100% excise tax described above, but there can be no assurance that we will be able to avoid application of that tax.
Complying with REIT requirements may cause us to forego otherwise attractive opportunities (including investing in our tenants) or liquidate otherwise attractive investments.
To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our common stock. In order to meet these tests, we may be required to forego investments we might otherwise make (including investments in our tenants) or to liquidate otherwise attractive investments. This limited investment scope could also lead to financial risks or limit our flexibility during times of operating instability.
The lease of qualified healthcare properties to a TRS is subject to special requirements.
We lease certain healthcare properties to TRSs, which lessees contract with third-party managers to manage the healthcare operations at these properties. The rents we receive from a TRS pursuant to this arrangement are treated as qualifying rents from real property if the healthcare property is a qualified healthcare property (as defined in the Code), the rents are paid pursuant to an arm’s-length lease with a TRS and the manager qualifies as an eligible independent contractor (as defined in the Code). We have structured the applicable leases and related arrangements in a manner intended to meet these requirements, but there can be no assurance that these conditions will be satisfied. If any of these conditions is not satisfied with respect to a particular lease, then the rents we receive with respect to such lease will not be qualifying rents, which could have an adverse effect on our ability to comply with REIT income tests and thus on our ability to qualify as a REIT unless we are able to avail ourselves of certain relief provisions.
The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes.
A REIT’s net income from prohibited transactions is subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business, unless certain safe harbor exceptions apply. Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, such characterization is a factual determination and no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors.
Legislative or other actions affecting REITs could have a negative effect on our stockholders or us.
The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. Changes to the tax laws, with or without retroactive application, could adversely affect our investors or us. New legislation, U.S. Treasury Department regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT, the federal income tax consequences of such qualification, or the federal income tax consequences of an investment in us. Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT.
The Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their stockholders. The 2017 Tax Act is unclear in many respects and could be subject to potential amendments and technical corrections, as well as interpretations and implementing regulations by the U.S. Treasury Department and IRS, any of which could lessen or increase the impact of the 2017 Tax Act. In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation, which often use federal taxable income as a starting point for computing state and local tax liabilities.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. Unresolved Staff Comments
None.

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ITEM 2. PROPERTIES
ITEM 2. Properties
Senior Housing and Healthcare Properties
As of December 31, 2020, we owned or managed through unconsolidated real estate entities approximately 1,200 properties (including properties classified as held for sale), consisting of senior housing communities, medical office buildings (“MOBs”), life science, research and innovation centers, inpatient rehabilitation facilities (“IRFs”) and long-term acute care facilities (“LTACs”), and health systems. We had 13 properties under development, three of which are owned by unconsolidated real estate entities. We believe that maintaining a balanced portfolio of high-quality assets diversified by investment type, geographic location, asset type, tenant/operator, revenue source and operating model makes us less susceptible to single-state regulatory or reimbursement changes, regional climate events and local economic downturns and diminishes the risk that any single factor or event could materially harm our business.
As of December 31, 2020, we had $2.2 billion aggregate principal amount of mortgage loan and secured revolving construction credit facility indebtedness outstanding, secured by 80 of our properties. Excluding the portion of such indebtedness attributable to our joint venture partners, our share of mortgage loan and secured revolving construction credit facility indebtedness outstanding was $2.0 billion.
The following table provides additional information regarding the geographic diversification of our consolidated portfolio of properties as of December 31, 2020 (excluding properties owned through investments in unconsolidated real estate entities and properties classified as held for sale).
Senior Housing
Communities SNFs MOBs Research and Innovation Centers IRFs and LTACs Health Systems
Geographic Location # of
Properties Units # of Properties Licensed Beds # of Properties Square Feet(1)
# of Properties Square Feet(1)
# of Properties Licensed Beds # of Properties Licensed Beds
Alabama 5 324 - - 4 469 - - - - - -
Arkansas 4 302 - - 1 5 - - - - - -
Arizona 26 2,256 - - 15 962 1 227 1 60 - -
California 84 9,494 - - 30 2,491 3 784 6 503 - -
Colorado 15 1,257 1 82 13 896 - - 1 68 - -
Connecticut 13 1,587 - - - - 2 1,032 - - - -
District of Columbia - - - - 2 102 - - - - - -
Florida 46 4,561 - - 11 223 1 252 6 508 - -
Georgia 19 1,695 - - 14 1,187 - - - - - -
Idaho 1 70 - - - - - - - - - -
Illinois 25 2,955 1 82 35 1,424 1 129 4 430 - -
Indiana 5 402 - - 23 1,603 - - 1 59 - -
Kansas 8 515 - - - - - - - - - -
Kentucky 9 805 - - 3 120 - - 1 384 - -
Louisiana 1 58 - - 5 362 - - - - - -
Massachusetts 15 1,838 - - - - 1 78 - - - -
Maryland 5 352 - - 2 83 5 467 - - - -
Maine 6 452 - - - - - - - - - -
Michigan 21 1,345 - - 13 589 - - - - - -
Minnesota 14 856 - - 4 241 - - - - - -
Missouri 2 154 - - 21 1,168 5 818 1 60 - -
Mississippi - - - - 1 51 - - - - - -
Montana 3 222 - - - - - - - - - -
North Carolina 22 1,666 - - 17 831 10 1,712 1 124 - -
North Dakota 2 115 - - 1 114 - - - - - -
Nebraska 1 133 - - - - - - - - - -
New Hampshire 1 126 - - - - - - - - - -
New Jersey 14 1,301 1 153 3 37 - - - - - -
New Mexico 4 451 - - - - - - 2 123 4 544
Nevada 3 326 - - 5 416 - - 1 52 - -
New York 41 4,729 - - 4 244 - - - - - -
Ohio 24 1,664 - - 28 1,226 - - 1 50 - -
Oklahoma 7 439 - - 1 80 - - - - 4 954
Oregon 23 2,109 - - 1 105 - - - - - -
Pennsylvania 31 2,326 4 620 9 713 5 953 1 52 - -
Rhode Island 4 399 - - - - 3 580 - - - -
South Carolina 6 494 - - 20 1,093 - - - - - -
South Dakota 4 182 - - - - - - - - - -
Tennessee 17 1,247 - - 7 278 - - 1 49 - -
Texas 45 3,588 - - 16 837 - - 9 617 2 445
Utah 3 321 - - - - - - - - - -
Virginia 8 655 - - 5 231 3 453 - - - -
Washington 19 1,909 5 469 10 579 - - - - - -
Wisconsin 45 2,218 - - 21 1,105 - - - - - -
West Virginia 2 123 4 326 - - - - - - - -
Wyoming 2 169 - - - - - - - - - -
Total U.S.
655 58,190 16 1,732 345 19,860 40 7,487 37 3,139 10 1,943
Canada 74 13,943 - - - - - - - - - -
United Kingdom
12 776 - - - - - - - - 3 121
Total
741 72,909 16 1,732 345 19,860 40 7,487 37 3,139 13 2,064
(1)Square Feet are in thousands. Totals may not foot due to rounding.
Corporate Offices
Our headquarters are located in Chicago, Illinois and we have an additional corporate office in Louisville, Kentucky. We lease all of our corporate offices.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. Legal Proceedings
The information contained in “Note 14 - Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report is incorporated by reference into this Item 3. Except as set forth therein, we are not a party to, nor is any of our property the subject of, any material pending legal proceedings.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. Mine Safety Disclosures
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock, par value $0.25 per share, is listed and traded on the New York Stock Exchange (the “NYSE”) under the symbol “VTR.” As of February 18, 2021, there were 374.7 million shares of our common stock outstanding, held by approximately 3,802 stockholders of record.
Dividends and Distributions
We pay regular quarterly dividends to holders of our common stock to comply with the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), governing REITs. In order to maintain our qualification as a REIT, we are required under the Code, among other things, to distribute annually at least 90% of our REIT taxable income, determined without regard to any net capital gain. In addition, we will be subject to income tax at the regular corporate rate to the extent we distribute less than 100% of our REIT taxable income, including any net capital gains. We expect to distribute at least 100% of our taxable net income, after the use of any net operating loss carryforwards, to our stockholders for 2021.
In general, our Board of Directors makes decisions regarding the nature, frequency and amount of our dividends on a quarterly basis. Because the Board considers many factors when making these decisions, including our present and future liquidity needs, our current and projected financial condition and results of operations and the performance and credit quality of our tenants, borrowers and managers, we cannot assure you that we will maintain the practice of paying regular quarterly dividends to continue to qualify as a REIT. Please see “Cautionary Statements” and the risk factors included in Part I, Item 1A of this Annual Report for a description of other factors that may affect our distribution policy.
Director and Employee Stock Sales
Certain of our directors, executive officers and other employees have adopted or, from time to time in the future, may adopt non-discretionary, written trading plans that comply with Rule 10b5-1 under the Exchange Act, or otherwise monetize, gift or transfer their equity-based compensation. These transactions typically are conducted for estate, tax and financial planning purposes and are subject to compliance with our Amended and Restated Securities Trading Policy and Procedures (“Securities Trading Policy”), the minimum stock ownership requirements contained in our Guidelines on Governance and all applicable laws and regulations.
Our Securities Trading Policy expressly prohibits our directors, executive officers and employees from buying or selling derivatives with respect to our securities or other financial instruments that are designed to hedge or offset a decrease in the market value of our securities and from engaging in short sales with respect to our securities. In addition, our Securities Trading Policy prohibits our directors and executive officers from holding our securities in margin accounts or pledging our securities to secure loans without the prior approval of our Audit and Compliance Committee. Each of our directors and executive officers has advised us that he or she is in compliance with the Securities Trading Policy and has not pledged any of our equity securities to secure margin or other loans.
Stock Repurchases
The table below summarizes repurchases of our common stock made during the quarter ended December 31, 2020:
Number of Shares
Repurchased (1)
Average Price
Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs
October 1 through October 31 158 $ 42.19 - -
November 1 through November 30 138 46.52 - -
December 1 through December 31 226 48.79 - -
Total 522 $ 46.19 - -
(1)Repurchases represent shares withheld to pay taxes on the vesting of restricted stock granted to employees under our 2006 Incentive Plan or 2012
Incentive Plan or restricted stock units granted to employees under the Nationwide Health Properties, Inc. (“NHP”) 2005 Performance Incentive Plan and assumed by us in connection with our acquisition of NHP. The value of the shares withheld is the closing price of our common stock on the date the vesting or exercise occurred (or, if not a trading day, the immediately preceding trading day) or the fair market value of our common stock at the time of the exercise, as the case may be.
Stock Performance Graph
The following performance graph compares the cumulative total return (including dividends) to the holders of our common stock from December 31, 2015 through December 31, 2020, with the cumulative total returns of the NYSE Composite Index, the FTSE Nareit Composite REIT Index (the “Composite REIT Index”) and the S&P 500 Index over the same period. The comparison assumes $100 was invested on December 31, 2015 in our common stock and in each of the foregoing indexes and assumes reinvestment of dividends, as applicable. We have included the NYSE Composite Index in the performance graph because our common stock is listed on the NYSE, and we have included the S&P 500 Index because we are a member of the S&P 500. We have included the Composite REIT Index because we believe that it is most representative of the industries in which we compete, or otherwise provides a fair basis for comparison with us, and is therefore particularly relevant to an assessment of our performance. The figures in the table below are rounded to the nearest dollar.
12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020
Ventas $ 100 $ 116 $ 117 $ 121 $ 125 $ 113
NYSE Composite Index $ 100 $ 112 $ 133 $ 122 $ 153 $ 164
Composite REIT Index $ 100 $ 109 $ 120 $ 115 $ 147 $ 138
S&P 500 Index $ 100 $ 112 $ 136 $ 130 $ 171 $ 203

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. Selected Financial Data
The selected financial data has been derived from our audited Consolidated Financial Statements included in Part II, Item 8 of this Annual Report and previous Annual Reports. You should read the following selected financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of this Annual Report and our Consolidated Financial Statements and the notes thereto included in Part II, Item 8 of this Annual Report, as acquisitions, dispositions, changes in accounting policies and other items may impact the comparability of the financial data.
As of and For the Years Ended December 31,
2020 2019 2018 2017 2016
(Dollars in thousands, except per share data)
Operating Data
Rental income $ 1,494,892 $ 1,609,876 $ 1,513,807 $ 1,593,598 $ 1,476,176
Resident fees and services 2,197,160 2,151,533 2,069,477 1,843,232 1,847,306
Interest expense 469,541 451,662 442,497 448,196 419,740
Property-level operating expenses 1,937,443 1,808,208 1,689,880 1,483,072 1,434,762
General, administrative and professional fees
130,158 158,726 145,978 135,490 126,875
Income from continuing operations
441,185 439,297 415,991 1,361,222 652,412
Net income attributable to common stockholders
439,149 433,016 409,467 1,356,470 649,231
Per Share Data
Income from continuing operations:
Basic
$ 1.18 $ 1.20 $ 1.17 $ 3.83 $ 1.89
Diluted
$ 1.17 $ 1.19 $ 1.16 $ 3.80 $ 1.87
Net income attributable to common stockholders:
Basic
$ 1.18 $ 1.18 $ 1.15 $ 3.82 $ 1.88
Diluted
$ 1.17 $ 1.17 $ 1.14 $ 3.78 $ 1.86
Cash dividends declared per common share $ 2.143 $ 3.170 $ 3.163 $ 3.115 $ 2.965
Other Data
Net cash provided by operating activities
$ 1,450,176 $ 1,437,783 $ 1,381,467 $ 1,428,752 $ 1,354,702
Net cash provided by (used in) investing activities 154,295 (1,585,299) 324,496 (937,107) (1,214,280)
Net cash (used in) provided by financing activities (1,300,021) 160,674 (1,761,937) (671,327) 96,838
FFO attributable to common stockholders(1)
1,269,255 1,436,049 1,308,149 1,512,885 1,440,544
Normalized FFO attributable to common stockholders (1)
1,249,972 1,423,047 1,462,055 1,491,241 1,438,643
Balance Sheet Data
Real estate property, gross $ 28,427,700 $ 28,826,816 $ 26,476,938 $ 26,260,553 $ 25,380,524
Cash and cash equivalents 413,327 106,363 72,277 81,355 286,707
Total assets 23,929,404 24,692,208 22,584,555 23,954,541 23,166,600
Senior notes payable and other debt 11,895,412 12,158,773 10,733,699 11,276,062 11,127,326
(1)We consider Funds From Operations attributable to common stockholders (“FFO”) and normalized FFO attributable to common stockholders to be appropriate supplemental measures of operating performance of an equity REIT. In particular, we believe that normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by non-recurring items and other non-operational events such as transactions and litigation. In some cases, we provide information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and our management to assess the impact of those items on our financial results.
FFO and normalized FFO presented in this Annual Report, or otherwise disclosed by us, may not be comparable to FFO and normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same definitions. FFO and normalized FFO should not be considered as alternatives to net income attributable to common stockholders (determined in accordance with U.S. generally accepted accounting principles (“GAAP”)) as indicators of our financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of our liquidity, nor are FFO and normalized FFO necessarily indicative of sufficient cash flow to fund all of our needs.
We use the National Association of Real Estate Investment Trusts (“Nareit”) definition of FFO. Nareit defines FFO as net income attributable to common stockholders (computed in accordance with GAAP), excluding gains or losses from sales of real estate property, including gains or losses on remeasurement of equity method investments, and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. We define normalized FFO as FFO excluding the following income and expense items (which may be recurring in nature): (a) merger-related costs and expenses, including amortization of intangibles, transition and integration expenses, and deal costs and expenses, including expenses and recoveries relating to acquisition lawsuits; (b) the impact of any expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of our debt; (c) the non-cash effect of income tax benefits or expenses, the non-cash impact of changes to our executive equity compensation plan, derivative transactions that have non-cash mark-to-market impacts on our Consolidated Statements of Income and non-cash charges related to leases; (d) the financial impact of contingent consideration, severance-related costs and charitable donations made to the Ventas Charitable Foundation; (e) gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; (f) gains and losses on non-real estate dispositions and other unusual items related to unconsolidated entities; (g) expenses related to the reaudit and re-review in 2014 of our historical financial statements and related matters; (h) net expenses or recoveries related to natural disasters; and (i) other incremental items set forth in the normalized FFO reconciliation included herein.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Financial Measures” included in Part II, Item 7 of this Annual Report for a reconciliation of FFO and normalized FFO to our GAAP earnings.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion provides information that management believes is relevant to an understanding and assessment of the consolidated financial condition and results of operations of Ventas, Inc. You should read this discussion in conjunction with our Consolidated Financial Statements and the notes thereto included in Part II, Item 8 of this Annual Report and our Risk Factors included in Part I, Item 1A of this Annual Report.
Business Summary and Overview of 2020
Ventas, Inc., an S&P 500 company, is a real estate investment trust (“REIT”) operating at the intersection of healthcare and real estate, with a highly diversified portfolio of senior housing; life science, research and innovation; and healthcare properties; which we generally refer to as “healthcare real estate,” located throughout the United States, Canada and the United Kingdom. As of December 31, 2020, we owned or managed through unconsolidated real estate entities approximately 1,200 properties (including properties classified as held for sale), consisting of senior housing communities, medical office buildings (“MOBs”), life science, research and innovation centers, inpatient rehabilitation facilities (“IRFs”) and long-term acute care facilities (“LTACs”), and health systems. Our company was originally founded in 1983 and is headquartered in Chicago, Illinois with an additional office in Louisville, Kentucky.
We primarily invest in a diversified portfolio of healthcare real estate assets through wholly owned subsidiaries and other co-investment entities. We operate through three reportable business segments: triple-net leased properties, senior living operations, which we also refer to as SHOP, and office operations. See our Consolidated Financial Statements and the related notes, including “Note 2 - Accounting Policies” and “Note 19 - Segment Information,” included in Part II, Item 8 of this Annual Report. Our senior housing properties are either operated under triple-net leases in our triple-net leased properties segment or through independent third-party managers in our senior living operations segment.
We aim to enhance shareholder value by delivering consistent, superior total returns by (1) generating reliable and growing cash flows, (2) maintaining a balanced, diversified portfolio of high-quality assets and (3) preserving our financial strength, flexibility and liquidity.
Our ability to access capital in a timely and cost-effective manner is critical to the success of our business strategy because it affects our ability to satisfy existing obligations, including the repayment of maturing indebtedness, and to make future investments. Factors such as general market conditions, interest rates, credit ratings on our securities, expectations of our potential future earnings and cash distributions, and the trading price of our common stock impact our access to and cost of external capital. For that reason, we generally attempt to match the long-term duration of our investments in real property with long-term financing through the issuance of shares of our common stock or the incurrence of long-term fixed rate debt.
COVID-19 Update
During fiscal 2020 and continuing into fiscal 2021, the COVID-19 pandemic has negatively affected our businesses in a number of ways and is expected to continue to do so.
Operating Results. Our senior living operations segment, which we also refer to as SHOP, was significantly impacted by the COVID-19 pandemic. Occupancy decreased over the course of 2020, while operating expenses increased as our senior living communities responded to the pandemic, resulting in a significant decline in NOI compared to 2019. Our NNN senior housing tenants’ performance was similarly affected by COVID-19. During the course of 2020, we modified certain NNN senior housing leases to reset rent and provided other modest financial accommodations to certain NNN senior housing tenants who needed it as a result of COVID-19. We also wrote-off previously accrued straight-line rental income related to NNN senior housing tenants due to COVID-19.
However, we benefited from our ongoing strategy of diversification, with our office and NNN healthcare businesses demonstrating resilience in the face of the pandemic. The Company’s NNN healthcare tenants benefited from significant government financial support that was deployed early and has partially offset the direct financial impact of the pandemic. Our office operations segment, which primarily serves MOB and research and innovation tenants that were less impacted by the pandemic, delivered steady performance throughout the year.
Provider Relief Grants. In the third and fourth quarter of 2020, we applied for grants under Phase 2 and Phase 3 of the Provider Relief Fund administered by the U.S. Department of Health & Human Services (“HHS”) on behalf of the assisted living communities in our senior living operations segment to partially mitigate losses attributable to COVID-19. These grants are intended to reimburse eligible providers for expenses incurred to prevent, prepare for and respond to COVID-19 and lost revenues attributable to COVID-19. Recipients are not required to repay distributions from the Provider Relief Fund, provided that they attest to and comply with certain terms and conditions. See “Government Regulation-Governmental Response to the COVID-19 Pandemic” in Part I, Item 1 of this Annual Report.
During the fourth quarter of 2020, we received $34.3 million and $0.8 million in grants in connection with our Phase 2 and Phase 3 applications, respectively, and recognized these grants within property-level operating expenses in our Consolidated Statements of Income. Subsequent to December 31, 2020, we received $13.6 million in grants in connection with our Phase 3 applications, which we expect to recognize in 2021. While we have received all amounts under our Phase 2 applications and have begun to receive amounts under our Phase 3 applications, there can be no assurance that our remaining applications will be approved or that additional funds will ultimately be received. Any grants that are ultimately received and retained by us are not expected to fully offset the losses incurred in our senior living operating portfolio that are attributable to COVID-19. Further, although we continue to monitor and evaluate the terms and conditions associated with the Provider Relief Fund distributions, we cannot assure you that we will be in compliance with all requirements related to the payments received under the Provider Relief Fund.
Capital Conservation Actions. In response to the COVID-19 pandemic, we took precautionary steps to increase liquidity and preserve financial flexibility in light of the resulting uncertainty. See “-Liquidity and Capital Resources; Recent Capital Conservation Actions.” As of February 16, 2021, we had approximately $3.0 billion in liquidity, including availability under our revolving credit facility and cash and cash equivalents on hand, with no borrowings outstanding under our commercial paper program and negligible near-term debt maturing.
Continuing Impact. The trajectory and future impact of the COVID-19 pandemic remains highly uncertain. The extent of the pandemic’s continuing and ultimate effect on our operational and financial performance will depend on a variety of factors, including the speed at which available vaccines can be successfully deployed; the rate of acceptance of available vaccines, particularly among the residents and staff in our senior housing communities; the impact of new variants of the virus
and the effectiveness of available vaccines against those variants; ongoing clinical experience, which may differ considerably across regions and fluctuate over time; and on other future developments, including the ultimate duration, spread and intensity of the outbreak, the availability of testing, the extent to which governments impose, roll-back or re-impose preventative restrictions and the availability of ongoing government financial support to our business, tenants and operators. Due to these uncertainties, we are not able at this time to estimate the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows.
See “Note 1 - Description of Business - COVID-19 Update” for a description of charges recognized during the year ended December 31, 2020 as a result of the COVID-19 pandemic.
Select 2020 and Early 2021 Highlights
COVID-19 Response
•Since the start of the COVID-19 pandemic, in addition to actions described under “COVID-19 Update” above, we have consistently prioritized the health and safety of employees, residents, tenants and managers, serving as an important resource for information and best practices and leading our industry in testing, including through an early arrangement with Mayo Clinic Laboratories.
•We executed on a multi-pronged capital conservation strategy to mitigate the impact of COVID-19, including reducing our planned capital expenditures, reducing capital commitments, establishing a quarterly dividend of $0.45 per share beginning in the second quarter and adjusting the Company’s corporate cost structure.
Ventas Investment Management
•We established a third party capital platform, Ventas Investment Management (“VIM”), bringing together our third party capital ventures under one umbrella, including the Ventas Life Science and Healthcare Real Estate Fund, L.P. (the “Ventas Fund”) and our research and innovation (“R&I”) development joint venture with GIC (the “R&I Development JV”) described below. As of December 31, 2020, VIM had over $3 billion in assets under management.
•In March 2020, we formed the Ventas Fund, a perpetual life investment vehicle focused on investments in research and innovation centers, medical office buildings and senior housing communities in North America. We are the sponsor and general partner of the Ventas Fund. To seed the Ventas Fund, we contributed six stabilized research and innovation and medical office properties and received cash consideration of $620 million and a 21% interest in the Ventas Fund. In October 2020, the Ventas Fund acquired a portfolio of three life science properties in the South San Francisco life science cluster for $1.0 billion.
•In October 2020, we formed the R&I Development JV with GIC. To seed the R&I Development JV, we contributed our controlling interest in four in-progress university-based research and innovation development projects whose total expected cost approximates $930 million.
Investments and Dispositions
•During the year ended December 31, 2020, we acquired 10 properties for an aggregate consideration of $249.5 million.
•During the year ended December 31, 2020, we recognized $262.2 million of gains on sale of real estate including 2020, including $225.1 million for the sale of six properties to the Ventas Fund, $13.7 million for the sale of four in-progress development projects to the R&I Development JV and and $23.4 million for the sale of 31 other properties.
•During the year ended December 31, 2020, we received aggregate proceeds of $106.1 million for the full repayment of the principal balances of various loans receivable with a weighted average interest rate of 8.3% that were due to mature between 2020 and 2025, resulting in total gains of $1.4 million.
Liquidity and Capital
•As of December 31, 2020, we had approximately $3.3 billion in liquidity, including availability under our revolving credit facility and cash and cash equivalents on hand, with no borrowings outstanding under our commercial paper program and negligible near-term debt maturing.
•In April 2020, we raised $500.0 million through the issuance of 4.75% senior notes due 2030.
•In October 2020,we reduced near-term debt maturities by retiring $236.3 million aggregate principal amount then outstanding of our 3.25% senior notes due 2022 at 104.14% of par value, plus accrued and unpaid interest to the payment date.
•During 2020, we sold an aggregate of 1.5 million shares of common stock under our “at-the-market” equity offering program for average gross proceeds of $44.88 per share.
•In January 2021, we entered into an amended and restated unsecured credit facility (the “New Credit Facility”) comprised of a $2.75 billion unsecured revolving credit facility initially priced at LIBOR plus 82.5 basis points.
•In February 2021, in order to reduce near-term maturities, we issued a make whole redemption for the entirety of the $400 million outstanding aggregate principal amount of 3.10% senior notes due January 2023. The redemption is expected to settle in March 2021, principally using cash on hand.
Portfolio
•In July 2020, we entered into a revised master lease agreement (the “Brookdale Lease”) and certain other agreements (together with the Brookdale Lease, the “Agreements”) with Brookdale Senior Living.
•In April 2020, we completed a transaction with affiliates of Holiday Retirement (with its affiliates, collectively, “Holiday”), including entry into a new, terminable management agreement for our 26 independent living assets that were previously subject to a triple-net lease (the “Holiday Lease”) with Holiday.
Environmental, Social and Governance
•During 2020, we continued our leadership in ESG, receiving numerous accolades, including the 2020 Nareit Health Care “Leader in the Light” award for a fourth consecutive year, the 2020 Bloomberg Gender-Equality Index for the second consecutive year, the 2020 Dow Jones Sustainability World Index for the second consecutive year and maintaining our industry-leading position in GRESB.
Critical Accounting Policies and Estimates
Our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”). GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements. We periodically reevaluate our estimates and assumptions, and in the event they prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. We believe that the critical accounting policies described below, among others, affect our more significant estimates and judgments used in the preparation of our financial statements. For more information regarding our critical accounting policies, see “Note 2 - Accounting Policies” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Principles of Consolidation
The Consolidated Financial Statements included in Part II, Item 8 of this Annual Report include our accounts and the accounts of our wholly owned subsidiaries and the joint venture entities over which we exercise control. All intercompany transactions and balances have been eliminated in consolidation, and our net earnings are reduced by the portion of net earnings attributable to noncontrolling interests.
GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We consolidate our investment in a VIE when we determine that we are its primary beneficiary. We may change our original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.
We identify the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We perform this analysis on an ongoing basis.
Accounting for Real Estate Acquisitions
When we acquire real estate, we first make reasonable judgments about whether the transaction involves an asset or a business. Our real estate acquisitions are generally accounted for as asset acquisitions as substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. Regardless of whether an acquisition is considered a business combination or an asset acquisition, we record the cost of the businesses or assets acquired as tangible and intangible assets and liabilities based upon their estimated fair values as of the acquisition date.
We estimate the fair value of buildings acquired on an as-if-vacant basis or replacement cost basis and depreciate the building value over the estimated remaining life of the building, generally not to exceed 35 years. We determine the fair value of other fixed assets, such as site improvements and furniture, fixtures and equipment, based upon the replacement cost and depreciate such value over the assets’ estimated remaining useful lives as determined at the applicable acquisition date. We determine the value of land either by considering the sales prices of similar properties in recent transactions or based on internal analyses of recently acquired and existing comparable properties within our portfolio. We generally determine the value of construction in progress based upon the replacement cost. However, for certain acquired properties that are part of a ground-up development, we determine fair value by using the same valuation approach as for all other properties and deducting the estimated cost to complete the development. During the remaining construction period, we capitalize project costs until the development has reached substantial completion. Construction in progress, including capitalized interest, is not depreciated until the development has reached substantial completion.
Intangibles primarily include the value of in-place leases and acquired lease contracts. We include all lease-related intangible assets and liabilities within acquired lease intangibles and accounts payable and other liabilities, respectively, on our Consolidated Balance Sheets.
The fair value of acquired lease-related intangibles, if any, reflects: (i) the estimated value of any above or below market leases, determined by discounting the difference between the estimated market rent and in-place lease rent; and (ii) the estimated value of in-place leases related to the cost to obtain tenants, including leasing commissions, and an estimated value of the absorption period to reflect the value of the rent and recovery costs foregone during a reasonable lease-up period as if the acquired space was vacant. We amortize any acquired lease-related intangibles to revenue or amortization expense over the remaining life of the associated lease plus any assumed bargain renewal periods. If a lease is terminated prior to its stated expiration or not renewed upon expiration, we recognize all unamortized amounts of lease-related intangibles associated with that lease in operations over the shortened lease term.
We estimate the fair value of purchase option intangible assets and liabilities, if any, by discounting the difference between the applicable property’s acquisition date fair value and an estimate of its future option price. We do not amortize the resulting intangible asset or liability over the term of the lease, but rather adjust the recognized value of the asset or liability
upon sale.
In connection with an acquisition, we may assume rights and obligations under certain lease agreements pursuant to which we become the lessee of a given property. We generally assume the lease classification previously determined by the prior lessee absent a modification in the assumed lease agreement. We assess assumed operating leases, including ground leases, to determine whether the lease terms are favorable or unfavorable to us given current market conditions on the acquisition date. To the extent the lease terms are favorable or unfavorable to us relative to market conditions on the acquisition date, we recognize an intangible asset or liability at fair value and amortize that asset or liability to interest or rental expense in our Consolidated Statements of Income over the applicable lease term. Where we are the lessee, we record the acquisition date values of leases, including any above or below market value, within operating lease assets and operating lease liabilities on our Consolidated Balance Sheets.
We estimate the fair value of noncontrolling interests assumed consistent with the manner in which we value all of the underlying assets and liabilities.
We calculate the fair value of long-term assumed debt by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings, which we approximate based on the rate at which we would expect to incur a replacement instrument on the date of acquisition, and recognize any fair value adjustments related to long-term debt as effective yield adjustments over the remaining term of the instrument.
Impairment of Long-Lived and Intangible Assets
We periodically evaluate our long-lived assets, primarily consisting of investments in real estate, for impairment indicators. If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, we consider market conditions and our current intentions with respect to holding or disposing of the asset. We adjust the net book value of real estate properties and other long-lived assets to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than book value. We recognize an impairment loss at the time we make any such determination.
Estimates of fair value used in our evaluation of investments in real estate are based upon discounted future cash flow projections, if necessary, or other acceptable valuation techniques that are based, in turn, upon all available evidence including level three inputs, such as revenue and expense growth rates, estimates of future cash flows, capitalization rates, discount rates, general economic conditions and trends, or other available market data such as replacement cost or comparable transactions. Our ability to accurately predict future operating results and cash flows and to estimate and determine fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.
Revenue Recognition
We recognize rental revenues under our leases on a straight-line basis over the applicable lease term when collectability of substantially all rents is probable. We assess the probability of collecting substantially all rents under our leases based on several factors, including, among other things, payment history, the financial strength of the tenant and any guarantors, the historical operations and operating trends of the property, the historical payment pattern of the tenant, the type of property, the value of the underlying collateral, if any, expected future performance of the property and current economic conditions. If our evaluation of these factors indicates it is not probable that we will be able to collect substantially all rents under the lease, we record a charge to rental income. If we change our conclusions regarding the probability of collecting rent payments required by a lease, we may recognize adjustments to rental income in the period we make such change in our conclusions.
Federal Income Tax
We have elected to be treated as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), for every year beginning with the year ended December 31, 1999. Accordingly, we generally are not subject to federal income tax on net income that we distribute to our stockholders, provided that we continue to qualify as a REIT. However, with respect to certain of our subsidiaries that have elected to be treated as taxable REIT subsidiaries (“TRS” or “TRS entities”), we record income tax expense or benefit, as those entities are subject to federal income tax similar to regular corporations. Certain foreign subsidiaries are subject to foreign income tax, although they did not elect to be treated as TRSs.
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 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 us to change 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 us to change our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur.
We recognize the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. We recognize interest and penalties, if applicable, related to uncertain tax positions as part of income tax benefit or expense.
Recently Issued or Adopted Accounting Standards
We adopted ASC Topic 842, Leases (“ASC 842”) on January 1, 2019, which introduced a lessee model that brings most leases on the balance sheet and, among other changes, eliminates the requirement in current GAAP for an entity to use bright-line tests in determining lease classification.
ASC 842 allows for several practical expedients which permit the following: no reassessment of lease classification or initial direct costs; use of the standard’s effective date as the date of initial application; and no separation of non-lease components from the related lease components and, instead, to account for those components as a single lease component if certain criteria are met. We elected these practical expedients using the effective date as our date of initial application. Therefore, financial information and disclosures under ASC 842 are not provided for periods prior to January 1, 2019.
Upon adoption, we recognized both right of use assets and lease liabilities for leases in which we lease land, real property or other equipment. We now also report revenues and expenses within our triple-net leased properties reportable business segment for real estate taxes and insurance that are escrowed and obligations of the tenants in accordance with their respective leases with us. This reporting had no impact on our net income. Resident leases within our senior living operations reportable business segment and office leases also contain service elements. We elected the practical expedient to account for our resident and office leases as a single lease component. Also, we now expense certain leasing costs, other than leasing commissions, as they are incurred. Prior to the adoption of ASC 842, GAAP provided for the deferral and amortization of such costs over the applicable lease term. We are continuing to amortize any unamortized deferred lease costs as of December 31, 2018 over their respective lease terms.
As of January 1, 2019 we recognized operating lease assets of $361.7 million on our Consolidated Balance Sheets which includes the present value of minimum lease payments as well as certain existing above and/or below market lease intangible values associated with such leases. Also upon adoption, we recognized operating lease liabilities of $216.9 million on our Consolidated Balance Sheets. The present value of minimum lease payments was calculated on each lease using a discount rate that approximates our incremental borrowing rate primarily adjusted for the length of the individual lease terms. As of the January 1, 2019 adoption date, we utilized discount rates ranging from 6.15% to 7.60% for our ground leases.
Upon adoption, we recognized a cumulative effect adjustment to retained earnings of $0.6 million primarily relating to certain costs associated with unexecuted leases that were deferred as of December 31, 2018.
Results of Operations
As of December 31, 2020, we operated through three reportable business segments: triple-net leased properties, senior living operations and office operations. In our triple-net leased properties segment, we invest in and own senior housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. In our senior living operations segment, we invest in senior housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease and manage MOBs and research and innovation centers throughout the United States. Information provided for “all other” includes income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to any of our three reportable business segments. Assets included in “all other” consist primarily of corporate assets, including cash, restricted cash, loans receivable and investments, and miscellaneous accounts receivable.
Our chief operating decision makers evaluate performance of the combined properties in each reportable business segment and determine how to allocate resources to those segments, in significant part, based on segment net operating income (“NOI”) and related measures. In addition to the information presented below, see “Note 19 - Segment Information” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further information regarding our business segments and a discussion of our definition of segment NOI. See “Non-GAAP Financial Measures” included elsewhere in this Annual Report for additional disclosure and reconciliations of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.
Years Ended December 31, 2020 and 2019
The table below shows our results of operations for the years ended December 31, 2020 and 2019 and the effect of changes in those results from period to period on our net income attributable to common stockholders.
For the Years Ended
December 31, (Decrease) Increase to Net Income
2020 2019 $ %
(Dollars in thousands)
Segment NOI:
Triple-net leased properties $ 673,105 $ 754,337 $ (81,232) (10.8 %)
Senior living operations 538,489 630,135 (91,646) (14.5)
Office operations 549,375 574,157 (24,782) (4.3)
All other 87,021 92,610 (5,589) (6.0)
Total segment NOI 1,847,990 2,051,239 (203,249) (9.9)
Interest and other income 7,609 10,984 (3,375) (30.7)
Interest expense (469,541) (451,662) (17,879) (4.0)
Depreciation and amortization (1,109,763) (1,045,620) (64,143) (6.1)
General, administrative and professional fees (130,158) (158,726) 28,568 18.0
Loss on extinguishment of debt, net (10,791) (41,900) 31,109 74.2
Merger-related expenses and deal costs (29,812) (15,235) (14,577) (95.7)
Allowance on loans receivable and investments (24,238) - (24,238) nm
Other (707) 10,339 (11,046) nm
Income before unconsolidated entities, real estate dispositions, income taxes, discontinued operations and noncontrolling interests
80,589 359,419 (278,830) (77.6)
Income (loss) from unconsolidated entities 1,844 (2,454) 4,298 nm
Gain on real estate dispositions 262,218 26,022 236,196 nm
Income tax benefit 96,534 56,310 40,224 71.4
Income from continuing operations 441,185 439,297 1,888 0.4
Discontinued operations - - - nm
Net income 441,185 439,297 1,888 0.4
Net income attributable to noncontrolling interests
2,036 6,281 4,245 67.6
Net income attributable to common stockholders $ 439,149 $ 433,016 6,133 1.4
nm-not meaningful
Segment NOI-Triple-Net Leased Properties
The following table summarizes results of operations in our triple-net leased properties reportable business segment, including assets sold or classified as held for sale as of December 31, 2020, but excluding assets whose operations were classified as discontinued operations:
For the Years Ended
December 31, (Decrease) Increase to Segment NOI
2020 2019 $ %
(Dollars in thousands)
Segment NOI-Triple-Net Leased Properties:
Rental income $ 695,265 $ 780,898 $ (85,633) (11.0 %)
Less: Property-level operating expenses (22,160) (26,561) 4,401 16.6
Segment NOI $ 673,105 $ 754,337 (81,232) (10.8)
nm-not meaningful
In our triple-net leased properties reportable business segment, our revenues generally consist of fixed rental amounts (subject to contractual escalations) received from our tenants in accordance with the applicable lease terms. We report revenues and property-level operating expenses within our triple-net leased properties reportable business segment for real estate tax and insurance expenses that are paid from escrows collected from our tenants.
The Triple-net leased properties segment NOI decrease in 2020 over the prior year is attributable primarily to the transition of 26 independent living assets at the start of the second quarter 2020 operated by Holiday from our triple-net portfolio to our senior housing operating portfolio, lower rental income from the Brookdale lease modification at the start of the third quarter of 2020, and the COVID-19 related write-off of previously accrued straight-line rental income during 2020 of $67.6 million (non-Holiday assets), partially offset by the $50.2 million impact of terminating the Holiday Lease. We will continue to try to collect rent on a contractual basis for the tenants where straight-line rent has been written off, but we have determined that collectability is not probable due to COVID-19.
Occupancy rates may affect the profitability of our tenants’ operations. The following table sets forth average continuing occupancy rates related to the triple-net leased properties we owned at December 31, 2020 and measured over the trailing 12 months ended September 30, 2020 (which is the most recent information available to us from our tenants) and average continuing occupancy rates related to the triple-net leased properties we owned at December 31, 2019 and measured over the 12 months ended September 30, 2019. The table excludes non-stabilized properties, properties owned through investments in unconsolidated real estate entities, certain properties for which we do not receive occupancy information and properties acquired or properties that transitioned operators for which we do not have a full four quarters of occupancy results.
Number of Properties at December 31, 2020 Average Occupancy for the Trailing 12 Months Ended September 30, 2020 Number of Properties at December 31, 2019 Average Occupancy for the Trailing 12 Months Ended September 30, 2019
Senior housing communities 290 82.1 % 326 86.0 %
Skilled nursing facilities (“SNFs”) 16 82.9 16 87.3
IRFs and LTACs 35 55.7 36 53.6
Declines in occupancy are primarily the result of COVID-19 impacts to senior housing and SNF operations.
The following table compares results of operations for our 359 same-store triple-net leased properties. See “Non-GAAP Financial Measures-NOI” included elsewhere in this Annual Report on Form 10-K for additional disclosure regarding same-store NOI for each of our reportable business segments.
For the Years Ended
December 31, (Decrease) Increase to Segment NOI
2020 2019 $ %
(Dollars in thousands)
Same-Store Segment NOI-Triple-Net Leased Properties:
Rental income $ 601,195 $ 669,510 $ (68,315) (10.2 %)
Less: Property-level operating expenses (19,166) (19,198) 32 0.2
Segment NOI $ 582,029 $ 650,312 (68,283) (10.5)
nm-not meaningful
The decrease in our same-store triple-net leased properties rental income in 2020 over the prior year is attributable primarily to the COVID-19 related write-off of previously accrued straight-line rental income of $67.6 million during 2020 and lower rental income from the Brookdale lease modification at the start of the third quarter of 2020, partially offset by rent increases due to contractual escalations pursuant to the terms of our leases. We will continue to try to collect rent on a contractual basis for the tenants where straight-line rent has been written off, but we have determined that collectability is not probable due to COVID-19.
Segment NOI-Senior Living Operations
The following table summarizes results of operations in our senior living operations reportable business segment, including assets sold or classified as held for sale as of December 31, 2020.
For the Years Ended
December 31, Increase (Decrease) to Segment NOI
2020 2019 $ %
(Dollars in thousands)
Segment NOI-Senior Living Operations:
Resident fees and services $ 2,197,160 $ 2,151,533 $ 45,627 2.1 %
Less: Property-level operating expenses (1,658,671) (1,521,398) (137,273) (9.0)
Segment NOI $ 538,489 $ 630,135 (91,646) (14.5)
Number of
Properties at
December 31, Average Unit
Occupancy
for the Years Ended
December 31, Average Monthly Revenue Per Occupied Room for
the Years Ended
December 31,
2020 2019 2020 2019 2020 2019
Total communities 432 401 81.7 % 86.6 % $ 4,766 $ 5,451
Resident fees and services include all amounts earned from residents at our senior housing communities, such as rental fees related to resident leases, extended healthcare fees and other ancillary service income. Property-level operating expenses related to our senior living operations segment include labor, food, utilities, marketing, management and other costs of operating the properties.
The decrease in our senior living operations segment NOI in 2020 over the prior year is primarily attributable to lower occupancy resulting from the COVID-19 pandemic. In addition, NOI has been negatively impacted by increased operating costs as a result of the COVID-19 pandemic, which is partially offset by the receipt of $35.1 million in grants during the fourth quarter 2020 from HHS under the Provider Relief Fund. We also had more properties in this segment because of the transition of 26 independent living assets at the start of the second quarter 2020 operated by Holiday from our triple-net portfolio to our senior housing operating portfolio and the third quarter 2019 acquisition of 34 Canadian senior housing communities via an equity partnership with Le Groupe Maurice, which contributed to NOI.
The following table compares results of operations for our 335 same-store senior living operating communities.
For the Years Ended
December 31, (Decrease) Increase to Segment NOI
2020 2019 $ %
(Dollars in thousands)
Same-Store Segment NOI-Senior Living Operations:
Resident fees and services $ 1,796,135 $ 1,967,402 $ (171,267) (8.7 %)
Less: Property-level operating expenses (1,385,316) (1,376,587) (8,729) (0.6)
Segment NOI $ 410,819 $ 590,815 (179,996) (30.5)
nm-not meaningful
Number of
Properties at
December 31, Average Unit
Occupancy
for the Years Ended
December 31, Average Monthly Revenue Per Occupied Room for
the Years Ended
December 31,
2020 2019 2020 2019 2020 2019
Same-store communities
335 335 79.6 % 86.9 % $ 5,765 $ 5,790
The decrease in our same-store senior living operations segment NOI is primarily attributable to lower occupancy resulting from the COVID-19 pandemic. In addition, NOI has been negatively impacted by increased operating costs as a result of the COVID-19 pandemic, which is partially offset by the receipt of $31.9 million in grants from HHS under the Provider Relief Fund.
Segment NOI-Office Operations
The following table summarizes results of operations in our office operations reportable business segment, including assets sold or classified as held for sale as of December 31, 2020.
For the Years Ended
December 31, (Decrease) Increase to Segment NOI
2020 2019 $ %
(Dollars in thousands)
Segment NOI-Office Operations:
Rental income $ 799,627 $ 828,978 $ (29,351) (3.5 %)
Office building services revenue 8,675 7,747 928 12.0
Total revenues 808,302 836,725 (28,423) (3.4)
Less:
Property-level operating expenses (256,612) (260,249) 3,637 1.4
Office building services costs (2,315) (2,319) 4 0.2
Segment NOI $ 549,375 $ 574,157 (24,782) (4.3)
Number of
Properties at
December 31, Occupancy at
December 31, Annualized Average Rent Per Occupied Square Foot for the Years Ended December 31,
2020 2019 2020 2019 2020 2019
Total office buildings 374 382 89.7 % 90.3 % $ 34 $ 34
The decrease in our office operations segment NOI in 2020 over the prior year is attributable to assets sold to the Ventas Fund in the first quarter of 2020, lease termination fees received in 2019, and COVID-19 impacts including the write-off of previously accrued straight-line rental income during 2020 and reduced parking revenues. These reduction in NOI were partially offset by active leasing at recently developed and redeveloped properties, improved tenant retention, contractual rent escalators, acquisitions and business interruption insurance proceeds.
The following table compares results of operations for our 355 same-store office buildings.
For the Years Ended
December 31, Increase (Decrease) to Segment NOI
2020 2019 $ %
(Dollars in thousands)
Same-Store Segment NOI-Office Operations:
Rental income $ 743,563 $ 733,482 $ 10,081 1.4 %
Less: Property-level operating expenses (235,789) (231,946) (3,843) (1.7)
Segment NOI $ 507,774 $ 501,536 6,238 1.2
Number of
Properties at
December 31, Occupancy at
December 31, Annualized Average Rent Per Occupied Square Foot for the Years Ended December 31,
2020 2019 2020 2019 2020 2019
Same-store office buildings 355 355 91.3 % 92.2 % $ 34 $ 33
The increase in our same-store office operations segment NOI in 2020 over the prior year is attributable primarily to successful leasing, enhanced tenant retention, continued strong collections through the COVID-19 pandemic and contractual rent escalations.
All Other
Information provided for all other segment NOI includes income from loans and investments and other miscellaneous income not directly attributable to any of our three reportable business segments. The $5.6 million decrease in all other segment NOI in 2020 over the prior year is primarily due to reduced interest income from our loans receivable investments from lower LIBOR-based interest rates, repayments of loans outstanding net of new issuances, partially offset by increased management fee revenues from investments in unconsolidated real estate entities. See “Note 6 - Loans Receivable and Investments” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Interest and Other Income
The $3.4 million decrease in interest and other income in 2020 over the prior year is primarily due to 2019 income from the exercise of warrants related to our research and innovation properties, partially offset by a 2020 reduction of a liability related to an acquisition and interest income on short-term investments.
Interest Expense
The $17.9 million increase in total interest expense in 2020 over the prior year is primarily attributable to an increase of $53.0 million due to higher debt balances, partially offset by a decrease of $35.5 million due to a lower effective interest rate. Our weighted average effective interest rate was 3.5% for 2020, compared to 3.8% for 2019. Capitalized interest for 2020 and 2019 was $9.6 million and $9.0 million, respectively.
Depreciation and Amortization
Depreciation and amortization expense increased during 2020 compared to 2019, primarily due to an increase in real estate impairments during 2020 and asset acquisitions, including the 2019 acquisition of senior housing communities operated by LGM. This is partially offset by the impact of dispositions during 2020. See “Note 1 - Description of Business - COVID-19 Update” for information regarding 2020 real estate impairment charges.
General, Administrative and Professional Fees
The $28.6 million decrease in general, administrative and professional fees in 2020 over the prior year is primarily a result of the capital conservation actions taken during 2020, including the June 2020 elimination of approximately 25% of corporate positions and a reduction in executives’ salaries for the second half of 2020. See “2020 Capital Conservation Actions” for information regarding these measures.
Loss on Extinguishment of Debt, Net
The loss on extinguishment of debt, net in 2020 is due primarily to the notice of redemption of $236.3 million of our 3.25% senior notes due 2022. The loss on extinguishment of debt, net in 2019 was due primarily to the redemption and repayment of $600.0 million aggregate principal amounts then outstanding of our 4.25% senior notes due 2022. See “-Liquidity and Capital Resources”.
Merger-Related Expenses and Deal Costs
The $14.6 million increase in merger-related expenses and deal costs in 2020 over the prior year is due primarily to costs incurred as a result of the Brookdale transaction and 2020 expenses related to severance and operator transitions.
Allowance on Loans Receivable and Investments
The allowance on loans receivable and investments in 2020 is due to credit losses on certain of our non-mortgage loans receivable and government-sponsored pooled loan investments, less recoveries received during the year. See “Note 1 - Description of Business - COVID-19 Update” for more information regarding these allowances.
Other
The $11.0 million change in other from income in 2019 to an expense in 2020 is primarily due to insurance recoveries received in 2019 and increased corporate-level insurance costs in 2020, partially offset by the change in fair value of stock warrants received in connection with the Brookdale transaction.
Income (Loss) from Unconsolidated Entities
The $4.3 million increase in income (loss) from unconsolidated entities for 2020 over 2019 is primarily due to our share of financial results from our unconsolidated entities in 2020, offset by an impairment of our investment in an unconsolidated operating entity in 2020. See “Note 1 - Description of Business - COVID-19 Update” for information regarding 2020 impairment charges.
Gain on Real Estate Dispositions
The $236.2 million increase in gain on real estate dispositions for 2020 over 2019 is due primarily to our contribution of six properties to the Ventas Fund in 2020.
Income Tax Benefit
The $40.2 million increase in income tax benefit related to continuing operations for 2020 over 2019 is primarily due to a $152.9 million deferred tax benefit related to the internal restructuring of certain U.S. taxable REIT subsidiaries completed within the first quarter of 2020, partially offset by changes in the valuation allowance against deferred tax assets of certain of our TRS entities. The restructuring benefit resulted from the transfer of assets subject to certain deferred tax liabilities from taxable REIT subsidiaries to the entities other than the TRS entities in this tax-free transaction.
Years Ended December 31, 2019 and 2018
Our Annual Report for the year ended December 31, 2019, filed with the SEC on February 24, 2020, contains information regarding our results of operations for the years ended December 31, 2019 and 2018 and the effect of changes in those results from period to period on our net income attributable to common stockholders.
Non-GAAP Financial Measures
We consider certain non-GAAP financial measures to be useful supplemental measures of our operating performance. A non-GAAP financial measure is a measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are not so excluded from or included in the most directly comparable measure calculated and presented in accordance with GAAP. Described below are the non-GAAP financial measures used by management to evaluate our operating performance and that we consider most useful to investors, together with reconciliations of these measures to the most directly comparable GAAP measures.
The non-GAAP financial measures we present in this Annual Report may not be comparable to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. You should not consider these measures as alternatives to net income attributable to common stockholders (determined in accordance with GAAP) as indicators of our financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of our liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine these measures in conjunction with net income attributable to common stockholders as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Annual Report.
Funds From Operations and Normalized Funds From Operations Attributable to Common Stockholders
Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, we consider Funds From Operations attributable to common stockholders (“FFO”) and normalized FFO to be appropriate supplemental measures of operating performance of an equity REIT. In particular, we believe that normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by non-recurring items and other non-operational events such as transactions and litigation. In some cases, we provide information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and our management to assess the impact of those items on our financial results.
We use the National Association of Real Estate Investment Trusts (“Nareit”) definition of FFO. Nareit defines FFO as net income attributable to common stockholders (computed in accordance with GAAP), excluding gains or losses from sales of real estate property, including gains or losses on remeasurement of equity method investments, and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and entities. Adjustments for unconsolidated partnerships and entities will be calculated to reflect FFO on the same basis. We define normalized FFO as FFO excluding the following income and expense items (which may be recurring in nature): (a) merger-related costs and expenses, including amortization of intangibles, transition and integration expenses, and deal costs and expenses, including expenses and recoveries relating to acquisition lawsuits; (b) the impact of any expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of our debt; (c) the non-cash effect of income tax benefits or expenses, the non-cash impact of changes to our executive equity compensation plan, derivative transactions that have non-cash mark to market impacts on our Consolidated Statements of Income and non-cash charges related to leases; (d) the financial impact of contingent consideration, severance-related costs and charitable donations made to the Ventas Charitable Foundation; (e) gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; (f) gains and losses on non-real estate dispositions and other unusual items related to unconsolidated entities; (g) expenses related to the reaudit and re-review in 2014 of our historical financial statements and related matters; (h) net expenses or recoveries related to natural disasters; and (i) any other incremental items set forth in the normalized FFO reconciliation included herein.
The following table summarizes our FFO and normalized FFO for each of the five years ended December 31, 2020. The decrease in normalized FFO for the year ended December 31, 2020 over the prior year is due to the impact of COVID-19 on our senior housing business and increases in interest expense from incremental borrowings arising as a consequence of the impact of COVID-19, partially offset by the positive impact of our third quarter 2019 acquisition of an interest in 34 Canadian senior housing communities via an equity partnership with Le Groupe Maurice.
For the Years Ended December 31,
2020 2019 2018 2017 2016
(In thousands)
Net income attributable to common stockholders
$ 439,149 $ 433,016 $ 409,467 $ 1,356,470 $ 649,231
Adjustments:
Real estate depreciation and amortization
1,104,114 1,039,550 913,537 881,088 891,985
Real estate depreciation related to noncontrolling interests
(16,767) (9,762) (6,926) (7,565) (7,785)
Real estate depreciation related to unconsolidated entities
4,986 187 1,977 4,231 5,754
Gain on real estate dispositions related to unconsolidated entities - (1,263) (875) (1,057) (439)
Gain on re-measurement of equity interest upon acquisition, net - - - (3,027) -
Impairment on equity method investment
- - 35,708 - -
(Loss) gain on real estate dispositions related to noncontrolling interests (9) 343 1,508 18 -
Gain on real estate dispositions (262,218) (26,022) (46,247) (717,273) (98,203)
Discontinued operations:
Loss on real estate dispositions - - - - 1
FFO attributable to common stockholders 1,269,255 1,436,049 1,308,149 1,512,885 1,440,544
Adjustments:
Change in fair value of financial instruments
(21,928) (78) (18) (41) 62
Non-cash income tax benefit (98,114) (58,918) (18,427) (22,387) (34,227)
Effect of the 2017 Tax Act
- - (24,618) (36,539) -
Loss on extinguishment of debt, net
10,791 41,900 63,073 839 2,779
Gain on non-real estate dispositions related to unconsolidated entities (597) (18) (2) (39) (557)
Merger-related expenses, deal costs and re-audit costs
34,690 18,208 38,145 14,823 28,290
Amortization of other intangibles 472 484 759 1,458 1,752
Other items related to unconsolidated entities
(614) 3,291 5,035 3,188 -
Non-cash impact of changes to equity plan
(452) 7,812 4,830 5,453 -
Non-cash charges related to lease terminations
- - 21,299 - -
Natural disaster expenses (recoveries), net 1,247 (25,683) 63,830 11,601 -
Impact of Holiday lease termination (50,184) - - - -
Write-off of straight-line rental income, net of noncontrolling interests 70,863 - - - -
Allowance on loan investments and impairment of unconsolidated entities, net of noncontrolling interests 34,543 - - - -
Normalized FFO attributable to common stockholders $ 1,249,972 $ 1,423,047 $ 1,462,055 $ 1,491,241 $ 1,438,643
Adjusted EBITDA
We consider Adjusted EBITDA an important supplemental measure because it provides another manner in which to evaluate our operating performance and serves as another indicator of our credit strength and our ability to service our debt obligations. We define Adjusted EBITDA as consolidated earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense, asset impairment and valuation allowances), excluding gains or losses on extinguishment of debt, our partners’ share of EBITDA of consolidated entities, merger-related expenses and deal costs, expenses related to the reaudit and re-review in 2014 of our historical financial statements, net gains or losses on real estate activity, gains or losses on remeasurement of equity interest upon acquisition, changes in the fair value of financial instruments, unrealized foreign currency gains or losses, net expenses or recoveries related to natural disasters and non-cash charges related to leases, and including Ventas’ share of EBITDA from unconsolidated entities and adjustments for other immaterial or identified items. The following table sets forth a reconciliation of net income attributable to common stockholders to Adjusted EBITDA:
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Net income attributable to common stockholders $ 439,149 $ 433,016 $ 409,467
Adjustments:
Interest 469,541 451,662 442,497
Loss on extinguishment of debt, net 10,791 41,900 58,254
Taxes (including amounts in general, administrative and professional fees)
(91,389) (52,677) (37,230)
Depreciation and amortization 1,109,763 1,045,620 919,639
Non-cash stock-based compensation expense 21,487 33,923 29,963
Merger-related expenses, deal costs and re-audit costs 29,811 15,246 33,608
Net income attributable to noncontrolling interests, adjusted for partners’ share of consolidated entity EBITDA (24,381) (16,396) (10,420)
Loss from unconsolidated entities, adjusted for Ventas share of EBITDA from unconsolidated entities 59,631 32,462 86,278
Gain on real estate dispositions (262,218) (26,022) (46,247)
Unrealized foreign currency (gains) losses (439) (1,061) 138
Changes in fair value of financial instruments (21,928) (104) (54)
Non-cash charges related to lease terminations - - 21,299
Natural disaster expenses (recoveries), net 1,203 (25,981) 54,684
Write-off of straight-line rental income from Holiday lease termination 49,611 - -
Write-off of straight-line rental income, net of noncontrolling interests 70,863 - -
Allowance on loan investments and impairment of unconsolidated entities, net of noncontrolling interests 23,879 - - -
Adjusted EBITDA $ 1,885,374 $ 1,931,588 $ 1,961,876
NOI
We also consider NOI an important supplemental measure because it allows investors, analysts and our management to assess our unlevered property-level operating results and to compare our operating results with those of other real estate companies and between periods on a consistent basis. We define NOI as total revenues, less interest and other income,
property-level operating expenses and office building services costs. Cash receipts may differ due to straight-line recognition of certain rental income and the application of other GAAP policies.
The following table sets forth a reconciliation of net income attributable to common stockholders to NOI:
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Net income attributable to common stockholders $ 439,149 $ 433,016 $ 409,467
Adjustments:
Interest and other income (7,609) (10,984) (24,892)
Interest expense 469,541 451,662 442,497
Depreciation and amortization 1,109,763 1,045,620 919,639
General, administrative and professional fees 130,158 158,726 145,978
Loss on extinguishment of debt, net 10,791 41,900 58,254
Merger-related expenses and deal costs 29,812 15,235 30,547
Allowance on loan receivable and investments
24,238 - -
Discontinued operations - - 10
Other 707 (10,339) 72,772
Net income attributable to noncontrolling interests 2,036 6,281 6,514
(Income) loss from unconsolidated entities (1,844) 2,454 55,034
Income tax benefit (96,534) (56,310) (39,953)
Gain on real estate dispositions (262,218) (26,022) (46,247)
NOI $ 1,847,990 $ 2,051,239 $ 2,029,620
See “Results of Operations” for discussions regarding both segment NOI and same-store segment NOI. We define same-store as properties owned, consolidated and operational for the full period in both comparison periods and are not otherwise excluded; provided, however, that we may include selected properties that otherwise meet the same-store criteria if they are included in substantially all of, but not a full, period for one or both of the comparison periods, and in our judgment such inclusion provides a more meaningful presentation of our portfolio performance.
Newly acquired or recently developed or redeveloped properties in our senior living operations segment will be included in same-store once they are stabilized for the full period in both periods presented. These properties are considered stabilized upon the earlier of (a) the achievement of 80% sustained occupancy or (b) 24 months from the date of acquisition or substantial completion of work. Recently developed or redeveloped properties in our office operations and triple-net leased properties segments will be included in same-store once substantial completion of work has occurred for the full period in both periods presented. Our senior living operations and triple-net leased properties that have undergone operator or business model transitions will be included in same-store once operating under consistent operating structures for the full period in both periods presented.
Properties are excluded from same-store if they are: (i) sold, classified as held for sale or properties whose operations were classified as discontinued operations in accordance with GAAP; (ii) impacted by materially disruptive events such as flood or fire; (iii) those properties that are currently undergoing a materially disruptive redevelopment; (iv) for our office operations, those properties for which management has an intention to institute a redevelopment plan because the properties may require major property-level expenditures to maximize value, increase NOI, or maintain a market-competitive position and/or achieve property stabilization; or (v) for the senior living operations and triple-net leased segments, those properties that are scheduled to undergo operator or business model transitions, or have transitioned operators or business models after the start of the prior comparison period.
To eliminate the impact of exchange rate movements, all portfolio performance-based disclosures assume constant exchange rates across comparable periods, using the following methodology: the current period’s results are shown in actual reported USD, while prior comparison period’s results are adjusted and converted to USD based on the average exchange rate for the current period.
Asset/Liability Management
Asset/liability management, a key element of enterprise risk management, is designed to support the achievement of our business strategy, while ensuring that we maintain appropriate and tolerable levels of market risk (primarily interest rate risk and foreign currency exchange risk) and credit risk. Effective management of these risks is a contributing factor to the absolute levels and variability of our FFO and net worth. The following discussion addresses our integrated management of assets and liabilities, including the use of derivative financial instruments.
Market Risk
We are exposed to market risk related to changes in interest rates with respect to borrowings under our unsecured revolving credit facility, our secured construction revolver and our unsecured term loans, certain of our mortgage loans that are floating rate obligations, mortgage loans receivable that bear interest at floating rates and available for sale securities. These market risks result primarily from changes in LIBOR rates or prime rates. To manage these risks, we continuously monitor our level of floating rate debt with respect to total debt and other factors, including our assessment of current and future economic conditions.
The table below sets forth certain information with respect to our debt, excluding premiums and discounts.
As of December 31,
2020 2019 2018
(Dollars in thousands)
Balance:
Fixed rate:
Senior notes $ 8,869,036 $ 8,584,056 $ 7,945,598
Unsecured term loans 200,000 200,000 400,000
Secured revolving construction credit facility - 160,492 -
Mortgage loans and other 1,389,227 1,325,854 698,136
Variable rate:
Senior notes 235,664 231,018 -
Unsecured revolving credit facility 39,395 120,787 765,919
Unsecured term loans 392,773 385,030 500,000
Commercial paper notes - 567,450 -
Secured revolving construction credit facility 154,098 - 90,488
Mortgage loans and other 702,878 671,115 429,561
Total $ 11,983,071 $ 12,245,802 $ 10,829,702
Percent of total debt:
Fixed rate:
Senior notes 73.9 % 70.1 % 73.4 %
Unsecured term loans 1.7 1.6 3.7
Secured revolving construction credit facility - 1.3 -
Mortgage loans and other 11.6 10.8 6.4
Variable rate:
Senior notes 2.0 1.9 -
Unsecured revolving credit facility 0.3 1.0 7.1
Unsecured term loans 3.3 3.1 4.6
Commercial paper notes - 4.7 -
Secured revolving construction credit facility 1.3 - 0.8
Mortgage loans and other 5.9 5.5 4.0
Total 100.0 % 100.0 % 100.0 %
Weighted average interest rate at end of period:
Fixed rate:
Senior notes 3.7 % 3.7 % 3.8 %
Unsecured term loans 3.6 2.0 2.8
Secured revolving construction credit facility - 4.5 -
Mortgage loans and other 3.5 3.7 4.4
Variable rate:
Senior notes 1.0 2.5 -
Unsecured revolving credit facility 1.0 2.4 3.2
Unsecured term loans 1.4 2.9 3.3
Commercial paper notes - 2.0 -
Secured revolving construction credit facility 1.9 - 4.1
Mortgage loans and other 1.9 3.4 3.4
Total 3.4 3.5 3.7
The variable rate debt in the table above reflects, in part, the effect of $146.7 million notional amount of interest rate swaps with maturities ranging from March 2022 to May 2022, in each case that effectively convert fixed rate debt to variable
rate debt. In addition, the fixed rate debt in the table above reflects, in part, the effect of $305.9 million and C$145.7 million notional amount of interest rate swaps with maturities ranging from January 2023 to December 2029, in each case that effectively convert variable rate debt to fixed rate debt. See “Note 10 - Senior Notes Payable and Other Debt” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
The decrease in our outstanding variable rate debt at December 31, 2020 compared to December 31, 2019 is primarily attributable to reduced borrowings on our revolving credit facility and commercial paper program, partially offset by the change in presentation of the secured revolving construction credit facility to variable rate debt. The secured revolving construction credit facility was previously reflected as fixed rate debt due to an interest rate swap which had effectively converted the associated interest expense from variable to fixed until its expiration in August 2020.
Assuming a 100 basis point increase in the weighted average interest rate related to our variable rate debt and assuming no change in our variable rate debt outstanding as of December 31, 2020, interest expense on an annualized basis would increase by approximately $14.7 million, or $0.04 per diluted common share.
As of December 31, 2020 and 2019, our joint venture partners’ aggregate share of total debt was $271.6 million and $228.2 million, respectively, with respect to certain properties we owned through consolidated joint ventures. Total debt does not include our portion of debt related to investments in unconsolidated real estate entities, which was $213.0 million and $60.6 million as of December 31, 2020 and 2019, respectively.
The fair value of our fixed rate debt is based on current market interest rates at which we could obtain similar borrowings. Increases in market interest rates typically result in a decrease in the fair value of fixed rate debt while decreases in market interest rates typically result in an increase in the fair value of fixed rate date. While changes in market interest rates affect the fair value of our fixed rate debt, these changes do not affect the interest expense associated with our fixed rate debt. Therefore, interest rate risk does not have a significant impact on our fixed rate debt obligations until their maturity or earlier prepayment and refinancing. If interest rates have risen at the time we seek to refinance our fixed rate debt, whether at maturity or otherwise, our future earnings and cash flows could be adversely affected by additional borrowing costs. Conversely, lower interest rates at the time of refinancing may reduce our overall borrowing costs.
To highlight the sensitivity of our fixed rate debt to changes in interest rates, the following summary shows the effects of a hypothetical instantaneous change of 100 basis points in interest rates:
As of December 31,
2020 2019
(In thousands)
Gross book value $ 10,458,262 $ 10,270,402
Fair value 11,550,236 10,784,441
Fair value reflecting change in interest rates:
-100 basis points 12,204,507 11,438,507
+100 basis points 10,951,483 10,196,943
The change in fair value of our fixed rate debt from December 31, 2019 to December 31, 2020 was due primarily to 2020 senior note issuances, net of repayments, partially offset by the change in presentation of the secured revolving construction credit facility to variable rate debt. The secured revolving construction credit facility was previously reflected as fixed rate debt due to an interest rate swap which had effectively converted the associated interest expense from variable to fixed until its expiration in August 2020.
As of December 31, 2020 and 2019, the fair value of our secured and non-mortgage loans receivable, based on our estimates of currently prevailing rates for comparable loans, was $565.7 million and $710.5 million, respectively. See “Note 6 - Loans Receivable and Investments” and “Note 11 - Fair Values of Financial Instruments” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
As a result of our Canadian and United Kingdom operations, we are subject to fluctuations in certain foreign currency exchange rates that may, from time to time, affect our financial condition and operating performance. Based solely on our results for the year ended December 31, 2020 (including the impact of existing hedging arrangements), if the value of the U.S. dollar relative to the British pound and Canadian dollar were to increase or decrease by one standard deviation compared to the average exchange rate during the year, our normalized FFO per share for the year ended December 31, 2020 would decrease or
increase, as applicable, by less than $0.01 per share or 1%. We will continue to mitigate these risks through a layered approach to hedging looking out for the next year and continual assessment of our foreign operational capital structure. Nevertheless, we cannot assure you that any such fluctuations will not have an effect on our earnings.
Concentration and Credit Risk
We use concentration ratios to identify, understand and evaluate the potential impact of economic downturns and other adverse events that may affect our asset types, geographic locations, business models, and tenants, operators and managers. We evaluate concentration risk in terms of investment mix and operations mix. Investment mix measures the percentage of our investments that is concentrated in a specific asset type or that is operated or managed by a particular tenant, operator or manager. Operations mix measures the percentage of our operating results that is attributed to a particular tenant, operator or manager, geographic location or business model. The following tables reflect our concentration risk as of the dates and for the periods presented:
As of
December 31,
2020 2019
Investment mix by asset type(1):
Senior housing communities 63.5 % 62.2 %
MOBs 19.7 19.3
Research and innovation centers 7.1 8.7
Health systems 5.2 5.1
IRFs and LTACs 1.7 1.6
SNFs 0.7 0.7
Secured loans receivable and investments, net 2.1 2.4
Investment mix by tenant, operator and manager(1):
Atria 20.8 % 20.4 %
Sunrise 10.4 10.3
Brookdale Senior Living 8.2 7.7
Ardent 4.9 4.7
Kindred 1.1 1.0
All other 54.6 55.9
(1)Ratios are based on the gross book value of consolidated real estate investments (excluding properties classified as held for sale) as of each reporting date.
For the Years Ended December 31,
2020 2019 2018
Operations mix by tenant and operator and business model:
Revenues(1):
Senior living operations 58.0 % 55.8 % 55.3 %
Brookdale Senior Living(2)
4.4 4.7 4.3
Ardent 3.2 3.1 3.1
Kindred 3.5 3.3 3.5
All others 30.9 33.1 33.8
Adjusted EBITDA:
Senior living operations 30.8 % 32.5 % 31.3 %
Brookdale Senior Living(2)
9.5 8.1 6.7
Ardent 7.0 5.4 5.1
Kindred 7.5 5.8 5.6
All others 45.2 48.2 51.3
NOI:
Senior living operations 29.4 % 31.1 % 30.7 %
Brookdale Senior Living(2)
9.0 8.7 7.6
Ardent 6.6 5.8 5.7
Kindred 7.1 6.3 6.4
All others 47.9 48.1 49.6
Operations mix by geographic location(3):
California 15.7 % 15.9 % 15.7 %
New York 8.1 8.8 8.4
Texas 6.1 6.0 6.2
Pennsylvania 4.6 4.7 4.6
Illinois 4.1 4.0 4.4
All others 61.4 60.6 60.7
(1)Total revenues include medical office building and other services revenue, revenue from loans and investments and interest and other income (including amounts related to assets classified as held for sale).
(2)Results exclude eight senior housing communities which are included in the senior living operations reportable business segment. 2018 results include the impact of a net non-cash charge of $21.3 million related to April 2018 lease extensions.
(3)Ratios are based on total revenues (including amounts related to assets classified as held for sale) for each period presented.
See “Non-GAAP Financial Measures” included elsewhere in this Annual Report for additional disclosure and reconciliations of net income attributable to common stockholders, as computed in accordance with GAAP, to Adjusted EBITDA and NOI, respectively.
We derive a significant portion of our revenues by leasing assets under long-term triple-net leases in which the rental rate is generally fixed with escalators, subject to certain limitations. Some of our triple-net lease escalators are contingent upon the satisfaction of specified facility revenue parameters or based on increases in the Consumer Price Index (“CPI”), with caps, floors or collars. We also earn revenues directly from individual residents in our senior housing communities that are managed by independent operators, such as Atria and Sunrise, and tenants in our office buildings. For the year ended December 31, 2020, 61.0% of our Adjusted EBITDA was derived from our senior living operations and office operations, for which rental rates may fluctuate more frequently upon lease rollovers and renewals due to shorter-term leases and changing economic or market conditions.
The concentration of our triple-net leased properties segment revenues and operating income that are attributed to Brookdale Senior Living, Ardent and Kindred creates credit risk. If any of Brookdale Senior Living, Ardent or Kindred becomes unable or unwilling to satisfy its obligations to us or to renew its leases with us upon expiration of the terms thereof, our financial condition and results of operations could decline, and our ability to service our indebtedness and to make
distributions to our stockholders could be impaired. See “Risk Factors-Our Business Operations and Strategy Risks-A significant portion of our revenues and operating income is dependent on a limited number of tenants and managers, including Brookdale Senior Living, Ardent, Kindred, Atria and Sunrise.” included in Part I, Item 1A of this Annual Report and “Note 3 - Concentration of Credit Risk” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
We regularly monitor and assess any changes in the relative credit risk of our significant tenants, and in particular those tenants that have recourse obligations under our triple-net leases. The ratios and metrics we use to evaluate a significant tenant’s liquidity and creditworthiness depend on facts and circumstances specific to that tenant and the industry or industries in which it operates, including without limitation the tenant’s credit history and economic conditions related to the tenant, its operations and the markets in which the tenant operates, that may vary over time. Among other things, we may (i) review and analyze information regarding the real estate, senior housing and healthcare industries generally, publicly available information regarding the significant tenant, and information required to be provided by the tenant under the terms of its lease agreements with us, (ii) examine monthly or quarterly financial statements of the significant tenant to the extent publicly available or otherwise provided under the terms of our lease agreements, and (iii) participate in periodic discussions and in-person meetings with representatives of the significant tenant. Using this information, we calculate multiple financial ratios (which may, but do not necessarily, include leverage, fixed charge coverage and tangible net worth), after making certain adjustments based on our judgment, and assess other metrics we deem relevant to an understanding of the significant tenant’s credit risk.
Because Atria and Sunrise manage our properties in exchange for the receipt of a management fee from us, we are not directly exposed to the credit risk of our managers in the same manner or to the same extent as our triple-net tenants. However, we rely on our managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our senior living operations efficiently and effectively. We also rely on Atria and Sunrise to set appropriate resident fees, to provide accurate property-level financials results in a timely manner and otherwise operate our senior housing communities in compliance with the terms of our management agreements and all applicable laws and regulations. Although we have various rights as the property owner under our management agreements, including various rights to terminate and exercise remedies under the agreements as provided therein, Atria’s or Sunrise’s failure, inability or unwillingness to satisfy its respective obligations under those agreements, to efficiently and effectively manage our properties or to provide timely and accurate accounting information with respect thereto could have a Material Adverse Effect on us. See “Risk Factors-Our Business Operations and Strategy Risks.” included in Part I, Item 1A of this Annual Report.
We hold a 34% ownership interest in Atria, which entitles us to customary minority rights and protections, as well as the right to appoint two of the six members on the Atria Board of Directors.
Triple-Net Lease Performance and Expirations
Any failure, inability or unwillingness by our tenants to satisfy their obligations under our triple-net leases could have a material adverse effect on us. Also, if our tenants are not able or willing to renew our triple-net leases upon expiration, we may be unable to reposition the applicable properties on a timely basis or on the same or better economic terms, if at all. Although our lease expirations are staggered, the non-renewal of some or all of our triple-net leases that expire in any given year could have a material adverse effect on us. During the year ended December 31, 2020, we had no triple-net lease renewals or expirations without renewal that, in the aggregate, had a material impact on our financial condition or results of operations for that period. See “Risk Factors-Our Business Operations and Strategy Risks-If we must replace any of our tenants or managers, we may be unable to do so on as favorable terms, or at all, and we could be subject to delays, limitations and expenses, which could adversely affect our business, financial condition and results of operations.” included in Part I, Item IA of this Annual Report.
The following table summarizes our lease expirations in our triple-net leased properties segment currently scheduled to occur over the next 10 years as of December 31, 2020:
Number of
Properties(1)
2020 Annualized Base Rent (“ABR”)(2)
% of 2020 Total Triple-Net Leased Properties Segment Rental Income
(Dollars in thousands)
2021 9 $ 12,062 1.7 %
2022 8 5,799 0.8
2023(3)
6 31,240 4.5
2024 26 13,970 2.0
2025 179 234,549 33.7
2026 39 53,660 7.7
2027 4 8,784 1.3
2028 27 25,196 3.6
2029 21 22,788 3.3
2030 6 4,748 0.7
(1)Excludes assets sold or classified as held for sale, unconsolidated entities development properties not yet operational, unconsolidated joint ventures and land parcels.
(2)ABR represents the annualized impact of the current period’s cash base rent at 100% share for consolidated entities. ABR does not include common area maintenance charges, the amortization of above/below market lease intangibles or other noncash items. ABR is used only for the purpose of determining lease expirations.
(3)Relates to 6 LTACs leased by Kindred. While the lease term expires in 2023, Kindred may extend the term for 5 years by delivering a renewal notice to the Company 12 to 18 months prior to expiration.
Liquidity and Capital Resources
During 2020, our principal sources of liquidity were cash flows from operations, proceeds from the issuance of debt and equity securities, borrowings under our unsecured revolving credit facility, and proceeds from asset sales.
For the next 12 months, our principal liquidity needs are to: (i) fund operating expenses; (ii) meet our debt service requirements; (iii) repay maturing mortgage and other debt; (iv) fund acquisitions, investments and commitments and any development and redevelopment activities; (v) fund capital expenditures; and (vi) make distributions to our stockholders and unitholders, as required for us to continue to qualify as a REIT. Depending upon the availability of external capital, we believe our liquidity is sufficient to fund these uses of cash. We expect that these liquidity needs generally will be satisfied by a combination of the following: cash flows from operations, cash on hand, debt assumptions and financings (including secured financings), issuances of debt and equity securities, dispositions of assets (in whole or in part through joint venture arrangements with third parties) and borrowings under our revolving credit facilities and commercial paper program. However, an inability to access liquidity through multiple capital sources concurrently could have a material adverse effect on us.
While continuing decreased revenue and net operating income as a result of the COVID-19 pandemic could lead to downgrades of our long-term credit rating and therefore adversely impact our cost of borrowing, we currently believe we will continue to have access to one or more debt markets during the duration of the pandemic and could seek to enter into secured debt financings or issue debt and equity securities to satisfy our liquidity needs, although no assurances can be made in this regard. See “COVID-19 Update.” See “Risk Factors-Our Capital Structure Risks-We are highly dependent on access to the capital markets. Limitations on our ability to access capital could have an adverse effect on us, including our ability to make required payments on our debt obligations, make distributions to our stockholders or make future investments necessary to implement our business strategy.” included in Part I, Item 1A of this Annual Report.
2020 Capital Conservation Actions
In 2020, we executed on a multi-pronged capital conservation strategy to mitigate the impact of COVID-19, which included reducing our planned capital expenditures and capital commitments. We also established a quarterly dividend of $0.45 per share beginning in the second quarter, which was a reduction from the first quarter dividend of $0.7925 per share. This action enabled us to conserve approximately $130 million of cash per quarter compared to the prior dividend level. Also, in June 2020, we eliminated roles representing over 25% of our corporate positions, excluding onsite field personnel. For the
second half of 2020, the base salaries of our CEO and other executive officers were voluntarily reduced by 20% and 10%, respectively. Primarily as a result of these capital conservation actions, our 2020 general and administrative expenses are $29 million lower than 2019.
See “Note 10 - Senior Notes Payable and Other Debt” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further information regarding our significant financing activities.
Credit Facilities, Commercial Paper and Unsecured Term Loans
As of December 31, 2020, our unsecured credit facility was comprised of a $3.0 billion unsecured revolving credit facility priced at LIBOR plus 0.875% based on the Company’s debt rating, which was scheduled to mature in 2021. In January 2021, we entered into an amended and restated unsecured credit facility (the “New Credit Facility”) comprised of a $2.75 billion unsecured revolving credit facility initially priced at LIBOR plus 0.825% based on the Company’s debt rating. The New Credit Facility matures in 2025, but may be extended at our option subject to the satisfaction of certain conditions, for two additional periods of six months each. The New Credit Facility also includes an accordion feature that permits us to increase our aggregate borrowing capacity thereunder to up to $3.75 billion.
As of December 31, 2020, $39.4 million was outstanding under the unsecured revolving credit facility with an additional $24.9 million restricted to support outstanding letters of credit. In addition, we limit our utilization of the unsecured revolving credit facility, to the extent necessary, to support our commercial paper program when commercial paper notes are outstanding. We had $2.9 billion in available liquidity under the unsecured revolving credit facility as of December 31, 2020. In connection with the New Credit Facility, we paid off all amounts outstanding under the existing unsecured revolving credit facility as of January 29, 2021 by drawing down the same amount on the New Credit Facility.
Our wholly owned subsidiary, Ventas Realty, Limited Partnership (“Ventas Realty”), may issue from time to time unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $1.0 billion. The notes are sold under customary terms in the United States commercial paper note market and are ranked pari passu with all of Ventas Realty’s other unsecured senior indebtedness. The notes are fully and unconditionally guaranteed by Ventas, Inc. As of December 31, 2020, we had no borrowings outstanding under our commercial paper program.
As of December 31, 2020, we had a $200.0 million unsecured term loan priced at LIBOR plus 0.90% that matures in 2023. The term loan also includes an accordion feature that effectively permits us to increase our aggregate borrowings thereunder to up to $800.0 million.
As of December 31, 2020, we had a $400.0 million secured revolving construction credit facility with $154.1 million of borrowings outstanding. The secured revolving construction credit facility matures in 2022 and is primarily used to finance the development of research and innovation centers and other construction projects.
As of December 31, 2020, we had a C$500 million unsecured term loan facility priced at Canadian Dollar Offered Rate (“CDOR”) plus 0.90% that matures in 2025.
Senior Notes
In April 2020, Ventas Realty issued and sold $500.0 million aggregate principal amount of 4.75% senior notes due 2030 at an amount equal to 97.86% of par.
In October 2020, we redeemed, pursuant to a cash tender offer, $236.3 million aggregate principal amount then outstanding of our 3.25% senior notes due 2022 at 104.14% of par value, plus accrued and unpaid interest to the payment date. As a result, we recognized a loss on extinguishment of debt of $11.1 million during the year ended December 31, 2020.
As of December 31, 2020, we had outstanding $7.7 billion aggregate principal amount of senior notes issued by Ventas Realty ($263.7 million of which was co-issued by Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation), approximately $75.2 million aggregate principal amount of senior notes issued by Nationwide Health Properties, Inc. (“NHP”) and assumed by our subsidiary, Nationwide Health Properties, LLC (“NHP LLC”), as successor to NHP, in connection with our acquisition of NHP, and C$1.7 billion aggregate principal amount of senior notes issued by our subsidiary, Ventas Canada Finance Limited (“Ventas Canada”). All of the senior notes issued by Ventas Realty and Ventas Canada are unconditionally guaranteed by Ventas, Inc.
In February 2021, in order to reduce near-term maturities, we issued a make-whole redemption for the entirety of the $400 million outstanding aggregate principal amount of 3.10% senior notes due January 2023. The redemption is expected to settle in March 2021 and will be funded primarily with cash on hand.
We may, from time to time, seek to retire or purchase our outstanding senior notes for cash or in exchange for equity securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, prospects for capital and other factors. The amounts involved may be material.
The indentures governing our outstanding senior notes require us to comply with various financial and other restrictive covenants. We were in compliance with all of these covenants at December 31, 2020.
Mortgages
At December 31, 2020 and 2019, our consolidated aggregate principal amount of mortgage debt outstanding was $2.1 billion and $2.0 billion, respectively, of which our share was $1.8 billion for both years.
Under certain circumstances, contractual and legal restrictions, including those contained in the instruments governing our subsidiaries’ outstanding mortgage indebtedness, may restrict our ability to obtain cash from our subsidiaries for the purpose of meeting our debt service obligations, including our payment guarantees with respect to Ventas Realty’s and Ventas Canada Finance Limited’s senior notes.
Derivatives and Hedging
In the normal course of our business, interest rate fluctuations affect future cash flows under our variable rate debt obligations, loans receivable and marketable debt securities, and foreign currency exchange rate fluctuations affect our operating results. We follow established risk management policies and procedures, including the use of derivative instruments, to mitigate the impact of these risks.
Dividends
During 2020, we declared four dividends totaling $2.1425 per share of our common stock, including a fourth quarter dividend of $0.45 per share. In order to continue to qualify as a REIT, we must make annual distributions to our stockholders of at least 90% of our REIT taxable income (excluding net capital gain). In addition, we will be subject to income tax at the regular corporate rate to the extent we distribute less than 100% of our REIT taxable income, including any net capital gains. We intend to pay dividends greater than 100% of our taxable income, after the use of any net operating loss carryforwards, for 2021.
We expect that our cash flows will exceed our REIT taxable income due to depreciation and other non-cash deductions in computing REIT taxable income and that we will be able to satisfy the 90% distribution requirement. However, from time to time, we may not have sufficient cash on hand or other liquid assets to meet this requirement or we may decide to retain cash or distribute such greater amount as may be necessary to avoid income and excise taxation. If we do not have sufficient cash on hand or other liquid assets to enable us to satisfy the 90% distribution requirement, or if we desire to retain cash, we may borrow funds, issue additional equity securities, pay taxable stock dividends, if possible, distribute other property or securities or engage in a transaction intended to enable us to meet the REIT distribution requirements or any combination of the foregoing.
Capital Expenditures
The terms of our triple-net leases generally obligate our tenants to pay all capital expenditures necessary to maintain and improve our triple-net leased properties. However, from time to time, we may fund the capital expenditures for our triple-net leased properties through loans or advances to the tenants, which may increase the amount of rent payable with respect to the properties in certain cases. We may also fund capital expenditures for which we may become responsible upon expiration of our triple-net leases or in the event that our tenants are unable or unwilling to meet their obligations under those leases. We also expect to fund capital expenditures related to our senior living operations and office operations reportable business segments with the cash flows from the properties or through additional borrowings. We expect that these liquidity needs generally will be satisfied by a combination of the following: cash flows from operations, cash on hand, debt assumptions and financings (including secured financings), issuances of debt and equity securities, dispositions of assets (in whole or in part through joint venture arrangements with third parties) and borrowings under our revolving credit facilities.
To the extent that unanticipated capital expenditure needs arise or significant borrowings are required, our liquidity may be affected adversely. Our ability to borrow additional funds may be restricted in certain circumstances by the terms of the instruments governing our outstanding indebtedness.
We are party to certain agreements that obligate us to develop senior housing or healthcare properties funded through capital that we and, in certain circumstances, our joint venture partners provide. As of December 31, 2020, we had 13 properties under development pursuant to these agreements, including three properties that are owned by unconsolidated real estate entities. In addition, from time to time, we engage in redevelopment projects with respect to our existing senior housing communities to maximize the value, increase NOI, maintain a market-competitive position, achieve property stabilization or change the primary use of the property.
Equity Offerings
From time to time, we may sell up to an aggregate of $1.0 billion of our common stock under an “at-the-market” equity offering program (“ATM program”). As of December 31, 2020, we have $755.5 million remaining under our existing ATM program. During the years ended December 31, 2020 and 2019, we sold 1.5 million and 2.7 million shares of our common stock under our ATM program for gross proceeds of $44.88 and $66.75 per share, respectively. During the year ended December 31, 2018, we sold no shares of common stock under our ATM program.
In June 2019, we sold 12.7 million shares of our common stock under a registered public offering for gross proceeds of $62.75 per share. We used the majority of the net proceeds to fund our LGM Acquisition. See “Note 4 - Acquisitions of Real Estate Property” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for additional information regarding the LGM Acquisition.
Cash Flows
The following table sets forth our sources and uses of cash flows for the years ended December 31, 2020 and 2019:
For the Years Ended
December 31, (Decrease) Increase
to Cash
2020 2019 $ %
(Dollars in thousands)
Cash, cash equivalents and restricted cash at beginning of year
$ 146,102 $ 131,464 $ 14,638 11.1 %
Net cash provided by operating activities 1,450,176 1,437,783 12,393 0.9
Net cash provided by (used in) investing activities 154,295 (1,585,299) 1,739,594 nm
Net cash (used in) provided by financing activities (1,300,021) 160,674 (1,460,695) nm
Effect of foreign currency translation
1,088 1,480 (392) (26.5)
Cash, cash equivalents and restricted cash at end of year $ 451,640 $ 146,102 305,538 nm
nm-not meaningful
Cash Flows from Operating Activities
Cash flows from operating activities increased $12.4 million during the year ended December 31, 2020 over the same period in 2019 primarily due to the up-front consideration received in connection with the Brookdale transaction, partially offset by lower NOI.
Cash Flows from Investing Activities
Cash flows from investing activities increased $1.7 billion during 2020 over 2019 primarily due to decreased acquisition and investment activity together with increased proceeds from real estate dispositions.
Cash Flows from Financing Activities
Cash flows from financing activities decreased $1.5 billion during 2020 over 2019 primarily due to lower issuances of common stock, decreased debt borrowings during 2020, net of repayments, partially offset by lower dividends paid to common stockholders during 2020.
Contractual Obligations
The following table summarizes the effect that minimum debt (which includes principal and interest payments) and other material noncancelable commitments are expected to have on our cash flow in future periods as of December 31, 2020:
Total Less than 1 year(3)
1 - 3 years(4)
3 - 5 years(5)
More than 5
years(6)
(In thousands)
Long-term debt obligations (1) (2)
$ 15,107,176 $ 1,002,409 $ 3,475,813 $ 3,794,808 $ 6,834,146
Operating obligations, including ground lease obligations
726,410 26,968 43,352 36,413 619,677
Total $ 15,833,586 $ 1,029,377 $ 3,519,165 $ 3,831,221 $ 7,453,823
(1)Amounts represent contractual amounts due, including interest.
(2)Interest on variable rate debt based on rates as of December 31, 2020.
(3)Includes $39.4 million of borrowings outstanding on our unsecured revolving credit facility and $235.7 million outstanding principal amount of our floating rate senior notes, Series F due 2021.
(4)Includes $154.1 million of borrowings outstanding on our secured revolving construction credit facility, $263.7 million outstanding principal amount of our 3.25% senior notes due 2022, $196.4 million outstanding principal amount of our 3.30% senior notes, Series C due 2022, $216.0 million outstanding principal amount of our 2.55% senior notes, Series D due 2023, $200.0 million of borrowings outstanding on our unsecured term loan due 2023, $400.0 million outstanding principal amount of our 3.125% senior notes due 2023, and $400.0 million outstanding principal amount of our 3.10% senior notes due 2023.
(5)Includes $400.0 million outstanding principal amount of our 3.50% senior notes due 2024, $400.0 million outstanding principal amount of our 3.75% senior notes due 2024, $471.3 million outstanding principal amount of our 2.80% senior notes, Series E due 2024, $196.4 million outstanding principal amount of our 4.125% senior notes, Series B due 2024, $392.8 million of borrowings outstanding on our unsecured term loan due 2025, $450.0 million outstanding principal amount of our 2.65% senior notes due 2025, and $600.0 million outstanding principal amount of our 3.50% senior notes due 2025.
(6)Includes $4.8 billion aggregate principal amount outstanding of our senior notes maturing between 2025 and 2049. $52.4 million aggregate principal amount outstanding of our 6.90% senior notes due 2037 are subject to repurchase, at the option of the holders, at par, on October 1, 2027, and $22.8 million aggregate principal amount outstanding of our 6.59% senior notes due 2038 are subject to repurchase, at the option of the holders, at par, on July 7 in each of 2023 and 2028.
As of December 31, 2020, we had $6.1 million of unrecognized tax benefits that are excluded from the table above, as we are unable to make a reasonably reliable estimate of the period of cash settlement, if any, with the respective tax authority.
Off-Balance Sheet Arrangements
We own interests in certain unconsolidated entities as described in Note 7 - Investments in Unconsolidated Entities. Except in limited circumstances, our risk of loss is limited to our investment in the joint venture and any outstanding loans receivable. In addition, we have certain properties which serve as collateral for debt that is owed by a previous owner of certain of our facilities, as described under Note 10 - Senior Notes Payable and Other Debt to the Consolidated Financial Statements. Our risk of loss for these certain properties is limited to the outstanding debt balance plus penalties, if any. Further, we use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure. Finally, at December 31, 2020, we had $24.9 million outstanding letter of credit obligations. We have no other material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources except those described above under “Contractual Obligations.”
Guarantor and Issuer Financial Information
Ventas, Inc. has fully and unconditionally guaranteed the obligation to pay principal and interest with respect to the outstanding senior notes issued by our 100%-owned subsidiary, Ventas Realty, including the senior notes that were jointly issued with Ventas Capital Corporation. Ventas Capital Corporation is a direct, 100%-owned subsidiary of Ventas Realty that has no assets or operations, but was formed in 2002 solely to facilitate offerings of senior notes by a limited partnership. None of our other subsidiaries (excluding Ventas Realty and Ventas Capital Corporation) is obligated with respect to Ventas Realty’s outstanding senior notes.
Ventas, Inc. has also fully and unconditionally guaranteed the obligation to pay principal and interest with respect to the outstanding senior notes issued by our 100%-owned subsidiary Ventas Canada Finance Limited (“Ventas Canada”). None of our other subsidiaries is obligated with respect to Ventas Canada’s outstanding senior notes, all of which were issued on a private placement basis in Canada.
In connection with the acquisition of Nationwide Health Properties, Inc. (“NHP”), our 100%-owned subsidiary Nationwide Health Properties, LLC (“NHP LLC”), as successor to NHP, assumed the obligation to pay principal and interest with respect to the outstanding senior notes issued by NHP. Neither we nor any of our subsidiaries (other than NHP LLC) is obligated with respect to any of NHP LLC’s outstanding senior notes.
Under certain circumstances, contractual and legal restrictions, including those contained in the instruments governing our subsidiaries’ outstanding mortgage indebtedness, may restrict our ability to obtain cash from our subsidiaries for the purpose of meeting our debt service obligations, including our payment guarantees with respect to Ventas Realty’s and Ventas Canada’s senior notes.
The following summarizes our guarantor and issuer balance sheet and statement of income information as of December 31, 2020 and December 31, 2019 and for the years ended December 31, 2020, 2019 and 2018.
Balance Sheet Information
As of December 31, 2020
Guarantor Issuer
(In thousands)
Assets
Investment in and advances to affiliates $ 16,576,278 $ 2,727,931
Total assets 16,937,149 2,844,339
Liabilities and equity
Intercompany loans 10,691,626 (4,532,350)
Total liabilities 10,918,320 3,577,009
Redeemable OP unitholder and noncontrolling interests 89,669 -
Total equity (deficit) 5,929,161 (732,670)
Total liabilities and equity 16,937,149 2,844,339
Balance Sheet Information
As of December 31, 2019
Guarantor Issuer
(In thousands)
Assets
Investment in and advances to affiliates $ 15,774,897 $ 2,728,110
Total assets 15,875,910 2,838,270
Liabilities and equity
Intercompany loans 8,789,600 (5,105,070)
Total liabilities 9,133,733 3,363,067
Redeemable OP unitholder and noncontrolling interests
102,657 -
Total equity (deficit) 6,639,520 (524,797)
Total liabilities and equity 15,875,910 2,838,270
Statement of Income Information
For the Year Ended December 31, 2020
Guarantor Issuer
(In thousands)
Equity earnings in affiliates $ 469,311 $ -
Total revenues 474,392 143,259
Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests 440,210 (215,406)
Net income (loss) 439,149 (202,845)
Net income (loss) attributable to common stockholders 439,149 (202,845)
Statement of Income Information
For the Year Ended December 31, 2019
Guarantor Issuer
(In thousands)
Equity earnings in affiliates $ 362,143 $ -
Total revenues 366,243 142,754
Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests 432,020 (246,929)
Net income (loss) 433,016 (246,841)
Net income (loss) attributable to common stockholders 433,016 (246,841)
For the Year Ended December 31, 2018
Guarantor Issuer
(In thousands)
Equity earnings in affiliates $ 308,764 $ -
Total revenues 335,613 139,062
Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests 400,349 (269,557)
Net income (loss) 409,467 (269,557)
Net income (loss) attributable to common stockholders 409,467 (269,557)

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
The information set forth in Part II, Item 7 of this Annual Report under “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Asset/Liability Management” is incorporated by reference into this Item 7A.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. Financial Statements and Supplementary Data
Ventas, Inc.
Index to Consolidated Financial Statements and Financial Statement Schedules
Management Report on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
Consolidated Balance Sheets as of December 31, 2020 and 2019
Consolidated Statements of Income for the Years Ended December 31, 2020, 2019 and 2018
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2020, 2019 and 2018
Consolidated Statements of Equity for the Years Ended December 31, 2020, 2019 and 2018
Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018
Notes to Consolidated Financial Statements
Consolidated Financial Statement Schedules
Schedule III - Real Estate and Accumulated Depreciation
Schedule IV - Mortgage Loans on Real Estate
MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act of 1934, as amended. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.
Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has concluded that our internal control over financial reporting was effective at the reasonable assurance level as of December 31, 2020.
The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report included herein.
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Ventas, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Ventas, Inc. and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes and financial statement schedules III and IV (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 23, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of Financial Accounting Standards Board’s Accounting Standards Codification (ASC) Topic 842, Leases.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Probability of collection of substantially all triple-net rents
As discussed in Note 2 to the consolidated financial statements, the Company assesses the probability of collecting substantially all triple-net rents on a lease-by-lease basis. Whenever the results of that assessment, events, or
changes in circumstances indicate that it is not probable the Company will collect substantially all triple-net rents under the lease, the Company records a charge to rental income.
We identified the evaluation of the probability of collection of substantially all triple-net rents as a critical audit matter. Complex auditor judgment was required to evaluate the various inputs and assumptions to the collectability assessment, including the financial strength of the tenant and any guarantors, and the operating performance of the leased property.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s evaluation of the inputs and assumptions used in the collectability assessment. To assess the Company’s assumptions about the financial strength of certain tenants and guarantors and the operating performance of the related leased properties, we identified and evaluated the relevance, reliability, and sufficiency of the tenant, guarantor and property financial information; tenant guarantees; the existence of outstanding accounts receivable; and the remaining term of the lease. We compared the Company’s historical determinations to actual collections to assess the Company’s ability to accurately estimate probability of collections.
Impairment of real estate investments in the triple-net leased and senior living operations segments
As discussed in Notes 1, 2, and 5 to the consolidated financial statements, the Company periodically evaluates its long-lived assets, primarily consisting of investments in real estate, for impairment indicators. If indicators of impairment are present, the Company evaluates the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, the Company considers market conditions and current intentions with respect to holding or disposing of the asset and adjusts the net book value of real estate properties to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than book value. During the year, impairment indicators arose for certain real estate properties. As a result, recoverability assessments were performed, estimated fair values were determined, and impairment losses were recognized for certain properties.
We identified the evaluation of real estate investments within the triple-net leased and senior living operations segments for impairment as a critical audit matter. Subjective auditor judgment was required in evaluating the Company’s determination of the future undiscounted cash flows and estimated fair values of properties where undiscounted cash flows were less than net book value. In particular, the undiscounted cash flows and fair value estimates were sensitive to significant assumptions, including capitalization rates, projected operating cash flows, and stabilization period. Additionally, subjective auditor judgment and specialized skills and knowledge were needed to evaluate comparable market transactions used by the Company to develop certain fair value estimates due to limited transactional volume.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the impairment process. This included controls related to the Company’s impairment process and the significant assumptions and fair value estimates described above. To test certain of the Company’s undiscounted cash flow estimates, we evaluated the Company’s forecasts of projected operating cash flows by comparing actual results to the Company’s forecasts adjusted for current market trends. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:
● evaluating the Company’s significant assumptions by comparing the significant assumptions to publicly available market data, and
● developing independent estimates of fair value for certain properties using comparable market transactions and discounted cash flows developed using the Company’s historical results and publicly available market data.
/s/ KPMG LLP
We have served as the Company’s auditor since 2014.
Chicago, Illinois
February 23, 2021
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors Ventas, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Ventas, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes and financial statement schedules III and IV (collectively, the consolidated financial statements), and our report dated February 23, 2021 expressed an unqualified opinion on those consolidated financial statements.
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 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 of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included 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/ KPMG LLP
Chicago, Illinois February 23, 2021
VENTAS, INC.
CONSOLIDATED BALANCE SHEETS
As of December 31,
2020 2019
(In thousands, except per
share amounts)
Assets
Real estate investments:
Land and improvements $ 2,261,415 $ 2,285,648
Buildings and improvements 24,323,279 24,386,051
Construction in progress 265,748 461,815
Acquired lease intangibles 1,230,886 1,308,077
Operating lease assets 346,372 385,225
28,427,700 28,826,816
Accumulated depreciation and amortization (7,877,665) (7,092,243)
Net real estate property 20,550,035 21,734,573
Secured loans receivable and investments, net 605,567 704,612
Investments in unconsolidated real estate entities 443,688 45,022
Net real estate investments 21,599,290 22,484,207
Cash and cash equivalents 413,327 106,363
Escrow deposits and restricted cash 38,313 39,739
Goodwill 1,051,650 1,051,161
Assets held for sale 9,608 85,527
Deferred income tax assets, net 9,987 47,495
Other assets 807,229 877,716
Total assets $ 23,929,404 $ 24,692,208
Liabilities and equity
Liabilities:
Senior notes payable and other debt $ 11,895,412 $ 12,158,773
Accrued interest 111,444 111,115
Operating lease liabilities 209,917 251,196
Accounts payable and other liabilities 1,133,066 1,145,939
Liabilities related to assets held for sale 3,246 5,224
Deferred income tax liabilities 62,638 200,831
Total liabilities 13,415,723 13,873,078
Redeemable OP unitholder and noncontrolling interests 235,490 273,678
Commitments and contingencies
Equity:
Ventas stockholders’ equity:
Preferred stock, $1.00 par value; 10,000 shares authorized, unissued
- -
Common stock, $0.25 par value; 600,000 shares authorized, 374,609 and 372,811 shares issued at December 31, 2020 and 2019, respectively 93,635 93,185
Capital in excess of par value 14,171,262 14,056,453
Accumulated other comprehensive loss (54,354) (34,564)
Retained earnings (deficit) (4,030,376) (3,669,050)
Treasury stock, 0 and 2 shares at December 31, 2020 and 2019, respectively - (132)
Total Ventas stockholders’ equity 10,180,167 10,445,892
Noncontrolling interests 98,024 99,560
Total equity 10,278,191 10,545,452
Total liabilities and equity $ 23,929,404 $ 24,692,208
See accompanying notes.
VENTAS, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31,
2020 2019 2018
(In thousands, except per share
amounts)
Revenues
Rental income:
Triple-net leased $ 695,265 $ 780,898 $ 737,796
Office 799,627 828,978 776,011
1,494,892 1,609,876 1,513,807
Resident fees and services 2,197,160 2,151,533 2,069,477
Office building and other services revenue 15,191 11,156 13,416
Income from loans and investments 80,505 89,201 124,218
Interest and other income 7,609 10,984 24,892
Total revenues 3,795,357 3,872,750 3,745,810
Expenses
Interest 469,541 451,662 442,497
Depreciation and amortization 1,109,763 1,045,620 919,639
Property-level operating expenses:
Senior living 1,658,671 1,521,398 1,446,201
Office 256,612 260,249 243,679
Triple-net leased 22,160 26,561 -
1,937,443 1,808,208 1,689,880
Office building services costs 2,315 2,319 1,418
General, administrative and professional fees 130,158 158,726 145,978
Loss on extinguishment of debt, net 10,791 41,900 58,254
Merger-related expenses and deal costs 29,812 15,235 30,547
Allowance on loans receivable and investments 24,238 - -
Other 707 (10,339) 72,772
Total expenses 3,714,768 3,513,331 3,360,985
Income before unconsolidated entities, real estate dispositions, income taxes, discontinued operations and noncontrolling interests
80,589 359,419 384,825
Income (loss) from unconsolidated entities 1,844 (2,454) (55,034)
Gain on real estate dispositions 262,218 26,022 46,247
Income tax benefit 96,534 56,310 39,953
Income from continuing operations 441,185 439,297 415,991
Discontinued operations - - (10)
Net income 441,185 439,297 415,981
Net income attributable to noncontrolling interests
2,036 6,281 6,514
Net income attributable to common stockholders $ 439,149 $ 433,016 $ 409,467
Earnings per common share
Basic:
Income from continuing operations
$ 1.18 $ 1.20 $ 1.17
Net income attributable to common stockholders 1.18 1.18 1.15
Diluted:
Income from continuing operations
$ 1.17 $ 1.19 $ 1.16
Net income attributable to common stockholders 1.17 1.17 1.14
See accompanying notes.
VENTAS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Net income $ 441,185 $ 439,297 $ 415,981
Other comprehensive (loss) income:
Foreign currency translation 3,254 5,729 (9,436)
Unrealized (loss) gain on available for sale securities (3,549) 11,634 14,944
Derivative instruments (17,918) (30,814) 10,030
Total other comprehensive (loss) income (18,213) (13,451) 15,538
Comprehensive income 422,972 425,846 431,519
Comprehensive income attributable to noncontrolling interests 3,613 7,649 6,514
Comprehensive income attributable to common stockholders $ 419,359 $ 418,197 $ 425,005
See accompanying notes.
VENTAS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
For the Years Ended December 31, 2020, 2019 and 2018
Common
Stock Par
Value Capital in
Excess of
Par Value Accumulated Other Comprehensive Loss Retained
Earnings
(Deficit) Treasury
Stock Total Ventas
Stockholders’
Equity Non- controlling
Interests Total Equity
(In thousands, except per share amounts)
Balance at January 1, 2018 $ 89,029 $ 13,053,057 $ (35,120) $ (2,240,698) $ (42) $ 10,866,226 $ 65,959 $ 10,932,185
Net income - - - 409,467 - 409,467 6,514 415,981
Other comprehensive income - - 15,538 - - 15,538 - 15,538
Net change in noncontrolling interests
- (7,470) - - - (7,470) (16,736) (24,206)
Dividends to common stockholders-$3.1625 per share - - - (1,129,626) - (1,129,626) - (1,129,626)
Issuance of common stock for stock plans, restricted stock grants and other 93 34,647 - - (210) 34,530 - 34,530
Adjust redeemable OP unitholder interests to current fair value
- (3,323) - - - (3,323) - (3,323)
Redemption of OP Units 3 (383) - - 252 (128) - (128)
Cumulative effect of change in accounting principles - - - 30,643 - 30,643 - 30,643
Balance at December 31, 2018 89,125 13,076,528 (19,582) (2,930,214) - 10,215,857 55,737 10,271,594
Net income - - - 433,016 - 433,016 6,281 439,297
Other comprehensive (loss) income - - (14,819) - - (14,819) 1,368 (13,451)
Net change in noncontrolling interests - (12,332) - - - (12,332) 36,174 23,842
Dividends to common stockholders-$3.17 per share - - - (1,172,653) - (1,172,653) - (1,172,653)
Issuance of common stock 3,829 938,509 - - - 942,338 - 942,338
Issuance of common stock for stock plans, restricted stock grants and other 230 61,875 - - (132) 61,973 - 61,973
Adjust redeemable OP unitholder interests to current fair value - (7,388) - - - (7,388) - (7,388)
Redemption of OP Units 1 (739) - - - (738) - (738)
Cumulative effect of change in accounting principle - - (163) 801 - 638 - 638
Balance at December 31, 2019 93,185 14,056,453 (34,564) (3,669,050) (132) 10,445,892 99,560 10,545,452
Net income - - - 439,149 - 439,149 2,036 441,185
Other comprehensive (loss) income - - (19,790) - - (19,790) 1,577 (18,213)
Net change in noncontrolling interests
- 8,227 - - - 8,227 (5,149) 3,078
Dividends to common stockholders-$2.1425 per share - - - (800,475) - (800,475) - (800,475)
Issuance of common stock
371 65,640 - - - 66,011 - 66,011
Issuance of common stock for stock plans, restricted stock grants and other 79 22,568 - - 132 22,779 - 22,779
Adjust redeemable OP unitholder interests to current fair value
- 18,638 - - - 18,638 - 18,638
Redemption of OP Units - (264) - - - (264) - (264)
Balance at December 31, 2020 $ 93,635 $ 14,171,262 $ (54,354) $ (4,030,376) $ - $ 10,180,167 $ 98,024 $ 10,278,191
See accompanying notes.
VENTAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Cash flows from operating activities:
Net income $ 441,185 $ 439,297 $ 415,981
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,109,763 1,045,620 919,639
Amortization of deferred revenue and lease intangibles, net (40,856) (7,967) (30,660)
Other non-cash amortization 20,719 22,985 18,886
Allowance on loans receivable and investments 24,238 - -
Stock-based compensation 21,487 33,923 29,963
Straight-lining of rental income 103,082 (30,073) 13,396
Loss on extinguishment of debt, net 10,791 41,900 58,254
Gain on real estate dispositions (262,218) (26,022) (46,247)
Gain on real estate loan investments (167) - (13,202)
Income tax benefit (101,985) (58,918) (43,026)
(Income) loss from unconsolidated entities (1,832) 2,464 55,034
Distributions from unconsolidated entities 4,920 1,600 2,934
Real estate impairments related to natural disasters - - 52,510
Other (779) 13,264 3,720
Changes in operating assets and liabilities:
Increase in other assets (68,233) (76,693) (23,198)
Increase in accrued interest 276 9,737 4,992
Increase (decrease) in accounts payable and other liabilities 189,785 26,666 (37,509)
Net cash provided by operating activities 1,450,176 1,437,783 1,381,467
Cash flows from investing activities:
Net investment in real estate property (78,648) (958,125) (265,907)
Investment in loans receivable (115,163) (1,258,187) (229,534)
Proceeds from real estate disposals 1,044,357 147,855 353,792
Proceeds from loans receivable 119,011 1,017,309 911,540
Development project expenditures (380,413) (403,923) (330,876)
Capital expenditures (148,234) (156,724) (131,858)
Distributions from unconsolidated entities - 172 57,455
Investment in unconsolidated entities (286,822) (3,855) (47,007)
Insurance proceeds for property damage claims 207 30,179 6,891
Net cash provided by (used in) investing activities 154,295 (1,585,299) 324,496
Cash flows from financing activities:
Net change in borrowings under revolving credit facilities (88,868) (569,891) 321,463
Net change in borrowings under commercial paper program (565,524) 565,524 -
Proceeds from debt 733,298 3,013,191 2,549,473
Repayment of debt (479,539) (2,623,916) (3,465,579)
Purchase of noncontrolling interests (8,239) - (4,724)
Payment of deferred financing costs (8,379) (21,403) (20,612)
Issuance of common stock, net 55,362 942,085 -
Cash distribution to common stockholders (928,809) (1,157,720) (1,127,143)
Cash distribution to redeemable OP unitholders (7,283) (9,218) (7,459)
Cash issued for redemption of OP Units (575) (2,203) (1,370)
Contributions from noncontrolling interests 1,314 6,282 1,883
Distributions to noncontrolling interests (12,946) (9,717) (11,574)
Proceeds from stock option exercises 15,103 36,179 8,762
Other (4,936) (8,519) (5,057)
Net cash (used in) provided by financing activities (1,300,021) 160,674 (1,761,937)
Net increase (decrease) in cash, cash equivalents and restricted cash 304,450 13,158 (55,974)
Effect of foreign currency translation 1,088 1,480 (815)
Cash, cash equivalents and restricted cash at beginning of year 146,102 131,464 188,253
Cash, cash equivalents and restricted cash at end of year $ 451,640 $ 146,102 $ 131,464
VENTAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Supplemental disclosure of cash flow information:
Interest paid including payments and receipts for derivative instruments $ 429,636 $ 410,854 $ 406,907
Supplemental schedule of non-cash activities:
Assets acquired and liabilities assumed from acquisitions and other:
Real estate investments $ 170,484 $ 1,057,138 $ 94,280
Other assets 1,224 11,140 5,398
Debt 55,368 907,746 30,508
Other liabilities 2,707 47,121 18,086
Deferred income tax liability 337 95 922
Noncontrolling interests 20,259 113,316 2,591
Equity issued - - 30,487
Equity issued for redemption of OP Units - 127 907
See accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1-DESCRIPTION OF BUSINESS
Ventas, Inc. (together with its subsidiaries, unless otherwise indicated or except where the context otherwise requires, “we,” “us” or “our”), an S&P 500 company, is a real estate investment trust (“REIT”) operating at the intersection of healthcare and real estate, with a highly diversified portfolio of senior housing; life science, research and innovation; and healthcare properties; which we generally refer to as “healthcare real estate,” located throughout the United States, Canada and the United Kingdom. As of December 31, 2020, we owned or managed through unconsolidated real estate entities approximately 1,200 properties and properties classified as held for sale, consisting of senior housing communities, medical office buildings (“MOBs”), life science, research and innovation centers, inpatient rehabilitation facilities (“IRFs”) and long-term acute care facilities (“LTACs”), and health systems. Our company was originally founded in 1983 and is headquartered in Chicago, Illinois with an additional office in Louisville, Kentucky.
We primarily invest in a diversified portfolio of healthcare real estate asset through wholly owned subsidiaries and other co-investment entities. We operate through three reportable business segments: triple-net leased properties, senior living operations, which we also refer to as SHOP, and office operations. See “Note 2 - Accounting Policies” and “Note 19 - Segment Information.” Our senior housing properties are either operated under triple-net leases in our triple-net leased properties segment or through independent third-party managers in our senior living operations segment.
As of December 31, 2020, we leased a total of 366 properties (excluding properties within our office operations reportable business segment) to various healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures. Our three largest tenants, Brookdale Senior Living Inc. (together with its subsidiaries, “Brookdale Senior Living”), Ardent Health Partners, LLC (together with its subsidiaries, “Ardent”) and Kindred Healthcare, LLC (together with its subsidiaries, “Kindred”) leased from us 121 properties (excluding eight properties managed by Brookdale Senior Living pursuant to long-term management agreements), 12 properties and 32 properties, respectively, as of December 31, 2020.
As of December 31, 2020, pursuant to long-term management agreements, we engaged independent managers, such as Atria Senior Living, Inc. (“Atria”) and Sunrise Senior Living, LLC (together with its subsidiaries, “Sunrise”), to manage the 441 senior housing communities in our senior living operations segment for us.
Through our Lillibridge Healthcare Services, Inc. subsidiary and our ownership interest in PMB Real Estate Services LLC, we also provide MOB management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. In addition, from time to time, we make secured and non-mortgage loans and other investments relating to senior housing and healthcare operators or properties.
COVID-19 Update
During fiscal 2020 and continuing into fiscal 2021, the COVID-19 pandemic has negatively affected our businesses in a number of ways and is expected to continue to do so.
Operating Results. Our senior living operations segment was significantly impacted by the COVID-19 pandemic. Occupancy decreased over the course of 2020, while operating expenses increased as our senior living communities responded to the pandemic, resulting in a significant decline in NOI compared to 2019. Our NNN senior housing tenants’ performance was similarly affected by COVID-19. During the course of 2020, we modified certain NNN senior housing leases to reset rent and provided other modest financial accommodations to certain NNN senior housing tenants who needed it as a result of COVID-19. We also wrote-off previously accrued straight-line rental income related to NNN senior housing tenants due to COVID-19.
However, we benefited from our ongoing strategy of diversification, with our office and NNN healthcare businesses demonstrating resilience in the face of the pandemic. The Company’s NNN healthcare tenants benefited from significant government financial support that was deployed early and has partially offset the direct financial impact of the pandemic. Our office operations segment, which primarily serves MOB and research and innovation tenants that were less impacted by the pandemic, delivered steady performance throughout the year.
Provider Relief Grants. In the third and fourth quarter of 2020, we applied for grants under Phase 2 and Phase 3 of the Provider Relief Fund administered by the U.S. Department of Health & Human Services (“HHS”) on behalf of the assisted living communities in our senior living operations segment to partially mitigate losses attributable to COVID-19. These grants
are intended to reimburse eligible providers for expenses incurred to prevent, prepare for and respond to COVID-19 and lost revenues attributable to COVID-19. Recipients are not required to repay distributions from the Provider Relief Fund, provided that they attest to and comply with certain terms and conditions. See “Government Regulation-Governmental Response to the COVID-19 Pandemic” in Part I, Item 1 of this Annual Report.
During the fourth quarter of 2020, we received $34.3 million and $0.8 million in grants in connection with our Phase 2 and Phase 3 applications, respectively, and recognized these grants within property-level operating expenses in our Consolidated Statements of Income. Subsequent to December 31, 2020, we received $13.6 million in grants in connection with our Phase 3 applications, which we expect to recognize in 2021. While we have received all amounts under our Phase 2 applications and have begun to receive amounts under our Phase 3 applications, there can be no assurance that our remaining applications will be approved or that additional funds will ultimately be received. Any grants that are ultimately received and retained by us are not expected to fully offset the losses incurred in our senior living operating portfolio that are attributable to COVID-19. Further, although we continue to monitor and evaluate the terms and conditions associated with the Provider Relief Fund distributions, we cannot assure you that we will be in compliance with all requirements related to the payments received under the Provider Relief Fund.
Capital Conservation Actions. In response to the COVID-19 pandemic, we took precautionary steps to increase liquidity and preserve financial flexibility in light of the resulting uncertainty. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources; Recent Capital Conservation Actions.” As of February 16, 2021, we had approximately $3.0 billion in liquidity, including availability under our revolving credit facility and cash and cash equivalents on hand, with no borrowings outstanding under our commercial paper program and negligible near-term debt maturing.
Continuing Impact. The trajectory and future impact of the COVID-19 pandemic remains highly uncertain. The extent of the pandemic’s continuing and ultimate effect on our operational and financial performance will depend on a variety of factors, including the speed at which available vaccines can be successfully deployed; the rate of acceptance of available vaccines, particularly among the residents and staff in our senior housing communities; the impact of new variants of the virus and the effectiveness of available vaccines against those variants; ongoing clinical experience, which may differ considerably across regions and fluctuate over time; and on other future developments, including the ultimate duration, spread and intensity of the outbreak, the availability of testing, the extent to which governments impose, roll back or re-impose preventative restrictions and the availability of ongoing government financial support to our business, tenants and operators. Due to these uncertainties, we are not able at this time to estimate the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows.
We have not identified the COVID-19 pandemic, on its own, as a “triggering event” for purposes of evaluating impairment of real estate assets, goodwill and other intangibles, investments in unconsolidated entities and financial instruments. However, as of December 31, 2020, we considered the effect of the pandemic on certain of our assets (described below) and our ability to recover the respective carrying values of these assets. We applied our considerations to existing critical accounting policies that require us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities. We based our estimates on our experience and on assumptions we believe to be reasonable under the circumstances. As a result, we have recognized the following charges for the year ended December 31, 2020:
•Adjustment to rental income: As of December 31, 2020, we concluded that it is probable we will not collect substantially all rents from certain tenants, primarily within our triple-net leased properties segment. As a result, we recognized adjustments to rental income of $74.6 million for the year ended December 31, 2020. Rental payments from these tenants will be recognized in rental income when received.
•Impairment of real estate assets: During 2020, we compared our estimate of undiscounted cash flows, including a hypothetical terminal value, for certain real estate assets to the assets’ respective carrying values. During 2020 we recognized $126.5 million of impairments representing the difference between the assets’ carrying value and the then-estimated fair value of $239.9 million. The impaired assets, primarily senior housing communities, represent approximately 1% of our consolidated net real estate property as of December 31, 2020. Impairments are recorded within depreciation and amortization in our Consolidated Statements of Income and are primarily related to our senior living operations reportable business segment.
•Loss on financial instruments and impairment of unconsolidated entities: As of December 31, 2020, we concluded that credit losses exist within certain of our non-mortgage loans receivable and government-sponsored pooled loan investments. As a result, we recognized credit loss charges of $34.7 million for the year ended December 31, 2020 within allowance on loans receivable and investments in our Consolidated Statements of Income. During the fourth
quarter of 2020, we received $10.5 million as a principal payment on previously reserved loans. No allowances are recorded within our portfolios of secured mortgage loans or marketable debt securities. In addition, during 2020 we recognized an impairment of $10.7 million in an equity investment in an unconsolidated entity also recorded within allowance on loans receivable and investments in our Consolidated Statements of Income.
•Deferred tax asset valuation allowance: During 2020, we concluded that it was not more likely than not that deferred tax assets (primarily US federal NOL carryforwards which begin to expire in 2032) would be realized based on our cumulative loss in recent years for certain of our taxable REIT subsidiaries. As a result, we recorded a valuation allowance of $56.4 million against these deferred tax assets on our Consolidated Balance Sheets with a corresponding charge to income tax benefit (expense) in our Consolidated Statements of Income. We maintained our conclusions regarding the realizability of deferred tax assets as of December 31, 2020.
NOTE 2-ACCOUNTING POLICIES
Principles of Consolidation
The accompanying Consolidated Financial Statements include our accounts and the accounts of our wholly owned subsidiaries and the joint venture entities over which we exercise control. All intercompany transactions and balances have been eliminated in consolidation, and our net earnings are reduced by the portion of net earnings attributable to noncontrolling interests.
U.S. generally accepted accounting principles (“GAAP”) require us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We consolidate our investment in a VIE when we determine that we are its primary beneficiary. We may change our original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.
We identify the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We perform this analysis on an ongoing basis.
As it relates to investments in joint ventures, GAAP may preclude consolidation by the sole general partner in certain circumstances based on the type of rights held by the limited partner or partners. We assess 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 (“LP”) interests or there is an increase or decrease in the number of outstanding LP interests. We also apply this guidance to managing member interests in limited liability companies (“LLCs”).
We consolidate several VIEs that share the following common characteristics:
•the VIE is in the legal form of an LP or LLC;
•the VIE was designed to own and manage its underlying real estate investments;
•we are the general partner or managing member of the VIE;
•we own a majority of the voting interests in the VIE;
•a minority of voting interests in the VIE are owned by external third parties, unrelated to us;
•the minority owners do not have substantive kick-out or participating rights in the VIE; and
•we are the primary beneficiary of the VIE.
We have separately identified certain special purpose entities that were established to allow investments in research and innovation projects by tax credit investors (“TCIs”). We have determined that these special purpose entities are VIEs, we are a holder of variable interests and we are the primary beneficiary of the VIEs, and therefore we consolidate these special
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
purpose entities. Our primary beneficiary determination is based upon several factors, including but not limited to the rights we have in directing the activities which most significantly impact the VIEs’ economic performance as well as certain guarantees which protect the TCIs from losses should a tax credit recapture event occur.
In general, the assets of the consolidated VIEs are available only for the settlement of the obligations of the respective entities. Unless otherwise required by the LP or LLC agreement, any mortgage loans of the consolidated VIEs are non-recourse to us. The table below summarizes the total assets and liabilities of our consolidated VIEs as reported on our Consolidated Balance Sheets:
December 31, 2020 December 31, 2019
Total Assets Total Liabilities Total Assets Total Liabilities
(In thousands)
NHP/PMB L.P. $ 649,128 $ 238,168 $ 666,404 $ 244,934
Other identified VIEs 4,095,102 1,653,036 4,075,821 1,459,830
Tax credit VIEs 614,490 204,746 845,229 333,809
Investments in Unconsolidated Entities
We report investments in unconsolidated entities over whose operating and financial policies we have the ability to exercise significant influence under the equity method of accounting. Under this method of accounting, our share of the investee’s earnings or losses is included in our Consolidated Statements of Income.
We base the initial carrying value of investments in unconsolidated entities on the fair value of the assets at the time we acquired the joint venture interest. We estimate fair values for our equity method investments based on discounted cash flow models that include all estimated cash inflows and outflows over a specified holding period and, where applicable, any estimated debt premiums or discounts. The capitalization rates, discount rates and credit spreads we use in these models are based upon assumptions that we believe to be within a reasonable range of current market rates for the respective investments.
We generally amortize any difference between our cost basis and the basis reflected at the joint venture level, if any, over the lives of the related assets and liabilities and include that amortization in our share of income or loss from unconsolidated entities. For earnings of equity method investments with pro rata distribution allocations, net income or loss is allocated between the partners in the joint venture based on their respective stated ownership percentages. In other instances, net income or loss may be allocated between the partners in the joint venture based on the hypothetical liquidation at book value method (the “HLBV method”). Under the HLBV method, net income or loss is allocated between the partners based on the difference between each partner’s claim on the net assets of the joint venture at the end and beginning of the period, after taking into account contributions and distributions. Each partner’s share of the net assets of the joint venture is calculated as the amount that the partner would receive if the joint venture were to liquidate all of its assets at net book value and distribute the resulting cash to creditors and partners in accordance with their respective priorities. Under the HLBV method, in any given period, we could record more or less income than the joint venture has generated, than actual cash distributions we receive or than the amount we may receive in the event of an actual liquidation.
Redeemable OP Unitholder and Noncontrolling Interests
We own a majority interest in NHP/PMB L.P. (“NHP/PMB”), a limited partnership formed in 2008 to acquire properties from entities affiliated with Pacific Medical Buildings LLC (“PMB”). Given our wholly owned subsidiary is the general partner and the primary beneficiary of NHP/PMB, we consolidate it as a VIE. As of December 31, 2020, third-party investors owned 3.3 million Class A limited partnership units in NHP/PMB (“OP Units”), which represented 31% of the total units then outstanding, and we owned 7.3 million Class B limited partnership units in NHP/PMB, representing the remaining 69%. At any time following the first anniversary of the date of their issuance, the OP Units may be redeemed at the election of the holder for cash or, at our option, 0.9051 shares of our common stock per OP Unit, subject to further adjustment in certain circumstances. We are party by assumption to a registration rights agreement with the holders of the OP Units that requires us, subject to the terms and conditions and certain exceptions set forth therein, to file and maintain a registration statement relating to the issuance of shares of our common stock upon redemption of OP Units.
As redemption rights are outside of our control, the redeemable OP Units are classified outside of permanent equity on our Consolidated Balance Sheets. We reflect the redeemable OP Units at the greater of cost or redemption value. As of December 31, 2020 and 2019, the fair value of the redeemable OP Units was $146.0 million and $171.2 million, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We recognize changes in fair value through capital in excess of par value, net of cash distributions paid and purchases by us of any OP Units. Our diluted earnings per share includes the effect of any potential shares outstanding from redemption of the OP Units.
Certain noncontrolling interests of other consolidated joint ventures were also classified as redeemable at December 31, 2020 and 2019. Accordingly, we record the carrying amount of these noncontrolling interests at the greater of their initial carrying amount (increased or decreased for the noncontrolling interests’ share of net income or loss and distributions) or the redemption value. Our joint venture partners have certain redemption rights with respect to their noncontrolling interests in these joint ventures that are outside of our control, and the redeemable noncontrolling interests are classified outside of permanent equity on our Consolidated Balance Sheets. We recognize changes in the carrying value of redeemable noncontrolling interests through capital in excess of par value.
Noncontrolling Interests
Excluding the redeemable noncontrolling interests described above, we present the portion of any equity that we do not own in entities that we control (and thus consolidate) as noncontrolling interests and classify those interests as a component of consolidated equity, separate from total Ventas stockholders’ equity, on our Consolidated Balance Sheets. For consolidated joint ventures with pro rata distribution allocations, net income or loss, and comprehensive income, is allocated between the joint venture partners based on their respective stated ownership percentages. In other cases, net income or loss is allocated between the joint venture partners based on the HLBV method. We account for purchases or sales of equity interests that do not result in a change of control as equity transactions, through capital in excess of par value. We include net income attributable to the noncontrolling interests in net income in our Consolidated Statements of Income and we include the noncontrolling interests share of comprehensive income in our Consolidated Statements of Comprehensive Income.
Accounting for Historic and New Markets Tax Credits
For certain of our research and innovation centers, we are party to certain contractual arrangements with TCIs that were established to enable the TCIs to receive benefits of historic tax credits (“HTCs”), new markets tax credits (“NMTCs”), or both. As of December 31, 2020, we owned eight properties that had syndicated HTCs or NMTCs, or both, to TCIs.
In general, TCIs invest cash into special purpose entities that invest in entities that own the subject property and generate the tax credits. The TCIs receive substantially all of the tax credits and hold only a nominal interest in the economic risk and benefits of the special purpose entities.
HTCs are delivered to the TCIs upon substantial completion of the project. NMTCs are allowed for up to 39% of a qualified investment and are delivered to the TCIs after the investment has been funded and spent on a qualified business. HTCs are subject to 20% recapture per year beginning one year after the completion of the historic rehabilitation of the subject property. NMTCs are subject to 100% recapture until the end of the seventh year following the qualifying investment. We have provided the TCIs with certain guarantees which protect the TCIs from losses should a tax credit recapture event occur. The contractual arrangements with the TCIs include a put/call provision whereby we may be obligated or entitled to repurchase the interest of the TCIs in the special purpose entities at the end of the tax credit recapture period. We anticipate that either the TCIs will exercise their put rights or we will exercise our call rights prior to the applicable tax credit recapture periods.
The portion of the TCI’s investment that is attributed to the put is recorded at fair value at inception in accounts payable and other liabilities on our Consolidated Balance Sheets, and is accreted to the expected put price as interest expense in our Consolidated Statements of Income over the recapture period. The remaining balance of the TCI’s investment is initially recorded in accounts payable and other liabilities on our Consolidated Balance Sheets and will be relieved upon delivery of the tax credit to the TCI, as a reduction in the carrying value of the subject property, net of allocated expenses. Direct and incremental costs incurred in structuring the transaction are deferred and will be recognized as an increase in the cost basis of the subject property upon the recognition of the related tax credit as discussed above.
Accounting Estimates
The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Accounting for Real Estate Acquisitions
When we acquire real estate, we first make reasonable judgments about whether the transaction involves an asset or a business. Our real estate acquisitions are generally accounted for as asset acquisitions as substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. Regardless of whether an acquisition is considered a business combination or an asset acquisition, we record the cost of the businesses or assets acquired as tangible and intangible assets and liabilities based upon their estimated fair values as of the acquisition date.
We estimate the fair value of buildings acquired on an as-if-vacant basis or replacement cost basis and depreciate the building value over the estimated remaining life of the building, generally not to exceed 35 years. We determine the fair value of other fixed assets, such as site improvements and furniture, fixtures and equipment, based upon the replacement cost and depreciate such value over the assets’ estimated remaining useful lives as determined at the applicable acquisition date. We determine the value of land either by considering the sales prices of similar properties in recent transactions or based on internal analyses of recently acquired and existing comparable properties within our portfolio. We generally determine the value of construction in progress based upon the replacement cost. However, for certain acquired properties that are part of a ground-up development, we determine fair value by using the same valuation approach as for all other properties and deducting the estimated cost to complete the development. During the remaining construction period, we capitalize project costs until the development has reached substantial completion. Construction in progress, including capitalized interest, is not depreciated until the development has reached substantial completion.
Intangibles primarily include the value of in-place leases and acquired lease contracts. We include all lease-related intangible assets and liabilities within acquired lease intangibles and accounts payable and other liabilities, respectively, on our Consolidated Balance Sheets.
The fair value of acquired lease-related intangibles, if any, reflects: (i) the estimated value of any above or below market leases, determined by discounting the difference between the estimated market rent and in-place lease rent; and (ii) the estimated value of in-place leases related to the cost to obtain tenants, including leasing commissions, and an estimated value of the absorption period to reflect the value of the rent and recovery costs foregone during a reasonable lease-up period as if the acquired space was vacant. We amortize any acquired lease-related intangibles to revenue or amortization expense over the remaining life of the associated lease plus any assumed bargain renewal periods. If a lease is terminated prior to its stated expiration or not renewed upon expiration, we recognize all unamortized amounts of lease-related intangibles associated with that lease in operations over the shortened lease term.
We estimate the fair value of purchase option intangible assets and liabilities, if any, by discounting the difference between the applicable property’s acquisition date fair value and an estimate of its future option price. We do not amortize the resulting intangible asset or liability over the term of the lease, but rather adjust the recognized value of the asset or liability upon sale.
In connection with an acquisition, we may assume rights and obligations under certain lease agreements pursuant to which we become the lessee of a given property. We generally assume the lease classification previously determined by the prior lessee absent a modification in the assumed lease agreement. We assess assumed operating leases, including ground leases, to determine whether the lease terms are favorable or unfavorable to us given current market conditions on the acquisition date. To the extent the lease terms are favorable or unfavorable to us relative to market conditions on the acquisition date, we recognize an intangible asset or liability at fair value and amortize that asset or liability to interest or rental expense in our Consolidated Statements of Income over the applicable lease term. Where we are the lessee, we record the acquisition date values of leases, including any above or below market value, within operating lease assets and operating lease liabilities on our Consolidated Balance Sheets.
We estimate the fair value of noncontrolling interests assumed consistent with the manner in which we value all of the underlying assets and liabilities.
We calculate the fair value of long-term assumed debt by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings, which we approximate based on the rate at which we would expect to incur a replacement instrument on the date of acquisition, and recognize any fair value adjustments related to long-term debt as effective yield adjustments over the remaining term of the instrument.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Impairment of Long-Lived and Intangible Assets
We periodically evaluate our long-lived assets, primarily consisting of investments in real estate, for impairment indicators. If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, we consider market conditions and our current intentions with respect to holding or disposing of the asset. We adjust the net book value of real estate properties and other long-lived assets to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than book value. We recognize an impairment loss at the time we make any such determination.
If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. We recognize any shortfall from carrying value as an impairment loss in the current period.
We evaluate our investments in unconsolidated entities for impairment at least annually, and whenever events or changes in circumstances indicate that the carrying value of our investment may exceed its fair value. If we determine that a decline in the fair value of our investment in an unconsolidated entity is other-than-temporary, and if such reduced fair value is below the carrying value, we record an impairment.
We test goodwill for impairment at least annually, and more frequently if indicators arise. We first assess qualitative factors, such as current macroeconomic conditions, state of the equity and capital markets and our overall financial and operating performance, to determine the likelihood that the fair value of a reporting unit is less than its carrying amount. If we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we proceed with estimating the fair value of the reporting unit. On January 1, 2020, we adopted ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes the traditional “Step 2” of the goodwill impairment test that required a hypothetical purchase price allocation. A goodwill impairment, if any, will be recognized in the period it is determined and is now measured as the amount by which a reporting unit’s carrying value exceeds its fair value.
Estimates of fair value used in our evaluation of goodwill (if necessary based on our qualitative assessment), investments in real estate, investments in unconsolidated entities and intangible assets are based upon discounted future cash flow projections or other acceptable valuation techniques that are based, in turn, upon all available evidence including level three inputs, such as revenue and expense growth rates, estimates of future cash flows, capitalization rates, discount rates, general economic conditions and trends, or other available market data such as replacement cost or comparable transactions. Our ability to accurately predict future operating results and cash flows and to estimate and determine fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.
Assets Held for Sale and Discontinued Operations
We sell properties from time to time for various reasons, including favorable market conditions or the exercise of purchase options by tenants. We classify certain long-lived assets as held for sale once the criteria, as defined by GAAP, have been met. Long-lived assets to be disposed of are reported at the lower of their carrying amount or fair value minus cost to sell and are no longer depreciated.
If at any time we determine that the criteria for classifying assets as held for sale are no longer met, we reclassify assets within net real estate investments on our Consolidated Balance Sheets for all periods presented. The carrying amount of these assets is adjusted (in the period in which a change in classification is determined) to reflect any depreciation expense that would have been recognized had the asset been continuously classified as net real estate investments.
We report discontinued operations when the following criteria are met: (1) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results; or (2) an acquired business is classified as held for sale on the acquisition date. The results of operations for assets meeting the definition of discontinued operations are reflected in our Consolidated Statements of Income as discontinued operations for all periods presented. We allocate estimated interest expense to discontinued operations based on property values and our weighted average interest rate or the property’s actual mortgage interest.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Loans Receivable
We record loans receivable, other than those acquired in connection with a business combination, on our Consolidated Balance Sheets (either in secured loans receivable and investments, net or other assets, in the case of non-mortgage loans receivable) at the unpaid principal balance, net of any deferred origination fees, purchase discounts or premiums and valuation allowances. We amortize net deferred origination fees, which are comprised of loan fees collected from the borrower net of certain direct costs, and purchase discounts or premiums over the contractual life of the loan using the effective interest method and immediately recognize in income any unamortized balances if the loan is repaid before its contractual maturity.
On January 1, we adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The amendments in ASU 2016-13 require us to evaluate a current estimate of all expected credit losses over the life of a financial instrument, which may result in earlier recognition of credit losses on loans and other financial instruments. Under prior guidance, we generally only considered past events and current conditions in measuring an incurred loss. We will establish a reserve for any estimated credit losses using this model with a corresponding charge to net income. We adopted ASU 2016-13 using the modified retrospective method and we established no reserve upon adoption. Our evaluation of credit losses of loans receivable is based on factors such as corporate and facility-level financial and operational reports, compliance with financial covenants set forth in the applicable loan agreement, the financial strength of the borrower and any guarantor, the payment history of the borrower, current economic conditions and reasonable and supportable forecasts.
Cash Equivalents
Cash equivalents consist of highly liquid investments with a maturity date of three months or less when purchased. These investments are stated at cost, which approximates fair value.
Escrow Deposits and Restricted Cash
Escrow deposits consist of amounts held by us or our lenders to provide for future real estate tax, insurance expenditures and tenant improvements related to our properties and operations. Restricted cash generally represents amounts paid to us for security deposits and other similar purposes.
Deferred Financing Costs
We amortize deferred financing costs, which are reported within senior notes payable and other debt on our Consolidated Balance Sheets, as a component of interest expense over the terms of the related borrowings using a method that approximates a level yield. Amortized costs of approximately $23.0 million, $20.2 million and $18.1 million were included in interest expense for the years ended December 31, 2020, 2019 and 2018, respectively.
Available for Sale Securities
We classify available for sale securities as a component of other assets on our Consolidated Balance Sheets (other than our interests in government-sponsored pooled loan investments, which are classified as secured loans receivable and investments, net on our Consolidated Balance Sheets). We record these securities at fair value and include unrealized gains and losses recorded in stockholders’ equity as a component of accumulated other comprehensive income on our Consolidated Balance Sheets. If we determine that a credit loss exists with respect to individual investments, we will recognize an allowance against the amortized cost basis of the investment with a corresponding charge to net income. We report interest income, including discount or premium amortization, on available for sale securities and gains or losses on securities sold, which are based on the specific identification method, in income from loans and investments in our Consolidated Statements of Income.
Derivative Instruments
We recognize all derivative instruments in other assets or accounts payable and other liabilities on our Consolidated Balance Sheets at fair value as of the reporting date. We recognize changes in the fair value of derivative instruments in other expenses in our Consolidated Statements of Income or accumulated other comprehensive income on our Consolidated Balance Sheets, depending on the intended use of the derivative and our designation of the instrument.
We do not use our derivative financial instruments, including interest rate caps, interest rate swaps and foreign currency forward contracts, for trading or speculative purposes. Our foreign currency forward contracts and certain of our interest rate swaps (including the interest rate swap contracts of consolidated and unconsolidated joint ventures) are designated as effectively hedging the variability of expected cash flows related to their underlying securities and, therefore, also are
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in accumulated other comprehensive income on our Consolidated Balance Sheets. We recognize any noncontrolling interests’ proportionate share of the changes in fair value of swap contracts of our consolidated joint ventures in noncontrolling interests on our Consolidated Balance Sheets. We recognize our proportionate share of the change in fair value of swap contracts of our unconsolidated joint ventures in accumulated other comprehensive income on our Consolidated Balance Sheets. Certain of our other interest rate swaps and rate caps were not designated as having a hedging relationship with the underlying securities and therefore do not meet the criteria for hedge accounting under GAAP. Accordingly, these interest rate swaps are recorded on our Consolidated Balance Sheets at fair value, and we recognize changes in the fair value of these instruments in current earnings (in other expenses) in our Consolidated Statements of Income.
Fair Values of Financial Instruments
Fair value is a market-based measurement, not an entity-specific measurement, and we determine fair value based on the assumptions that we expect market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy).
Level one inputs utilize unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access. Level two inputs are inputs other than quoted prices included in level one that are directly or indirectly observable for the asset or liability. Level two inputs may include quoted prices for similar assets and liabilities in active markets and other inputs for the asset or liability that are observable at commonly quoted intervals, such as interest rates, foreign exchange rates and yield curves. Level three inputs are unobservable inputs for the asset or liability, which typically are based on our own assumptions, because there is little, if any, related market activity. If the determination of the fair value measurement is based on inputs from different levels of the hierarchy, the level within which the entire fair value measurement falls is the lowest-level input that is significant to the fair value measurement in its entirety. If the volume and level of market activity for an asset or liability has decreased significantly relative to the normal market activity for such asset or liability (or similar assets or liabilities), then transactions or quoted prices may not accurately reflect fair value. In addition, if there is evidence that a transaction for an asset or liability is not orderly, little, if any, weight is placed on that transaction price as an indicator of fair value. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
We use the following methods and assumptions in estimating the fair value of our financial instruments whose fair value is determined on a recurring basis.
•Cash and cash equivalents - The carrying amount of unrestricted cash and cash equivalents reported on our Consolidated Balance Sheets approximates fair value due to the short maturity of these instruments.
•Escrow deposits and restricted cash - The carrying amount of escrow deposits and restricted cash reported on our Consolidated Balance Sheets approximates fair value due to the short maturity of these instruments.
•Loans receivable - We estimate the fair value of loans receivable using level two and level three inputs. We discount future cash flows using current interest rates at which similar loans with the same terms and length to maturity would be made to borrowers with similar credit ratings.
•Available for sale securities - We estimate the fair value of marketable debt securities using level two inputs. We observe quoted prices for similar assets or liabilities in active markets that we have the ability to access. We estimate the fair value of certain government-sponsored pooled loan investments using level three inputs. We consider credit spreads, underlying asset performance and credit quality, and default rates.
•Derivative instruments - With the assistance of a third party, we estimate the fair value of derivative instruments, including interest rate caps, interest rate swaps, and foreign currency forward contracts, using level two inputs.
◦Interest rate caps - We observe forward yield curves and other relevant information.
◦Interest rate swaps - We observe alternative financing rates derived from market-based financing rates, forward yield curves and discount rates.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
◦Foreign currency forward contracts - We estimate the future values of the two currency tranches using forward exchange rates that are based on traded forward points and calculate a present value of the net amount using a discount factor based on observable traded interest rates.
•Stock warrants - We estimate the fair value of stock warrants using level two inputs that are obtained from public sources. Inputs include equity spot price, dividend yield, volatility and risk-free rate.
•Senior notes payable and other debt - We estimate the fair value of senior notes payable and other debt using level two inputs. We discount the future cash flows using current interest rates at which we could obtain similar borrowings. For mortgage debt, we may estimate fair value using level three inputs, similar to those used in determining fair value of loans receivable (above).
•Redeemable OP unitholder interests - We estimate the fair value of our redeemable OP unitholder interests using level one inputs. We base fair value on the closing price of our common stock, as OP Units may be redeemed at the election of the holder for cash or, at our option, shares of our common stock, subject to adjustment in certain circumstances.
Revenue Recognition
Triple-Net Leased Properties and Office Operations
Certain of our triple-net leases and most of our MOB and research and innovation centers (collectively, “office operations”) leases provide for periodic and determinable increases in base rent. We recognize base rental revenues under these leases on a straight-line basis over the applicable lease term when collectability of substantially all rents is probable. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our Consolidated Balance Sheets. At December 31, 2020 and 2019, this cumulative excess totaled $169.7 million and $278.8 million, respectively (excluding properties classified as held for sale).
Certain of our leases provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met. We recognize the increased rental revenue under these leases as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term.
We assess the probability of collecting substantially all rents under our leases based on several factors, including, among other things, payment history, the financial strength of the tenant and any guarantors, the historical operations and operating trends of the property, the historical payment pattern of the tenant, the type of property, the value of the underlying collateral, if any, expected future performance of the property and current economic conditions. If our evaluation of these factors indicates it is not probable that we will be able to collect substantially all rents under the lease, we record a charge to rental income. If we change our conclusions regarding the probability of collecting rent payments required by a lease, we may recognize adjustments to rental income in the period we make such change in our conclusions.
Senior Living Operations
Our resident agreements are accounted for as leases and we recognize resident fees and services, other than move-in fees, monthly as services are provided. We recognize move-in fees on a straight-line basis over the average resident stay.
Other
We recognize interest income from loans and investments, including discounts and premiums, using the effective interest method when collectability is reasonably assured. We apply the effective interest method on a loan-by-loan basis and recognize discounts and premiums as yield adjustments over the related loan term. We evaluate collectability of accrued interest receivables separate from the amortized cost basis of our loans. As such, we recognize interest income on an impaired loan to the extent we believe accrued contractual interest payments are collectable. Otherwise, interest income is recognized on a cash basis.
Accounting for Leased Property
We lease real property, primarily land and corporate office space, and equipment, primarily vehicles at our senior housing communities. At lease inception, we establish an operating lease asset and operating lease liability calculated as the
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
present value of future minimum lease payments. As our leases do not provide an implicit rate, we use a discount rate that approximates our incremental borrowing rate available at lease commencement to determine the present value. Our lease expense primarily consists of ground and corporate office leases. Ground lease expense is included in interest expense and corporate office lease expense is included in general, administrative and professional fees in the Company’s Consolidated Statements of Income.
Stock-Based Compensation
We recognize share-based payments to employees and directors, including grants of stock options and restricted stock, included in general, administrative and professional fees in our Consolidated Statements of Income generally on a straight-line basis over the requisite service period based on the grant date fair value of the award.
Gain on Sale of Assets
On January 1, 2018, we adopted the provisions of Accounting Standards Codification (“ASC”) 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). In accordance with ASC 610-20, we recognize any gains when we transfer control of a property and when it is probable that we will collect substantially all of the related consideration. We adopted ASC 610-20 using the modified retrospective method and recognized a cumulative effect adjustment to retained earnings of $31.2 million relating to deferred gains on sales of real estate assets in 2015.
Federal Income Tax
We have elected to be treated as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), for every year beginning with the year ended December 31, 1999. Accordingly, we generally are not subject to federal income tax on net income that we distribute to our stockholders, provided that we continue to qualify as a REIT. However, with respect to certain of our subsidiaries that have elected to be treated as taxable REIT subsidiaries (“TRS” or “TRS entities”), we record income tax expense or benefit, as those entities are subject to federal income tax similar to regular corporations. Certain foreign subsidiaries are subject to foreign income tax, although they did not elect to be treated as TRSs.
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 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 us to change 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 us to change our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur.
We recognize the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. We recognize interest and penalties, if applicable, related to uncertain tax positions as part of income tax benefit or expense.
Foreign Currency
Certain of our subsidiaries’ functional currencies are the local currencies of their respective foreign jurisdictions. 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, and we record foreign currency transaction gains and losses in other expense in our Consolidated Statements of Income. We recognize any noncontrolling interests’ proportionate share of currency translation adjustments of our foreign consolidated joint ventures in noncontrolling interests on our Consolidated Balance Sheets.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Segment Reporting
As of December 31, 2020, 2019 and 2018, we operated through three reportable business segments: triple-net leased properties, senior living operations and office operations. Under our triple-net leased properties segment, we invest in and own senior housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. In our senior living operations segment, we invest in senior housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease and manage MOBs and research and innovation centers throughout the United States. See “Note 19 - Segment Information.”
Recently Issued or Adopted Accounting Standards
We adopted ASC Topic 842, Leases (“ASC 842”) on January 1, 2019, which introduced a lessee model that brings most leases on the balance sheet and, among other changes, eliminates the requirement in current GAAP for an entity to use bright-line tests in determining lease classification. Upon adoption, we recognized both right of use assets and lease liabilities for leases in which we lease land, real property or other equipment. We now also report revenues and expenses within our triple-net leased properties reportable business segment for real estate taxes and insurance that are escrowed and obligations of the tenants in accordance with their respective leases with us. Also, we now expense certain leasing costs, other than leasing commissions, as they are incurred. Prior to the adoption of ASC 842, GAAP provided for the deferral and amortization of such costs over the applicable lease term.
We used January 1, 2019 as the date of initial application. Therefore, financial information and disclosures under ASC 842 are not provided for periods prior to January 1, 2019. Upon adoption, we recognized a cumulative effect adjustment to retained earnings of $0.6 million primarily relating to certain costs associated with unexecuted leases that were deferred as of December 31, 2018.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation. In 2020 and for all periods presented, certain tax and insurance related expenses have been reclassified from general, administrative and professional fees to other expense in our Consolidated Statements of Income.
NOTE 3-CONCENTRATION OF CREDIT RISK
As of December 31, 2020, Atria, Sunrise, Brookdale Senior Living, Ardent and Kindred managed or operated approximately 20.8%, 10.4%, 8.2%, 4.9% and 1.1%, respectively, of our consolidated real estate investments based on gross book value (excluding properties classified as held for sale as of December 31, 2020). Because Atria and Sunrise manage our properties in exchange for the receipt of a management fee from us, we are not directly exposed to the credit risk of our managers in the same manner or to the same extent as our triple-net tenants.
Based on gross book value, approximately 15.6% and 47.9% of our consolidated real estate investments were senior housing communities included in the triple-net leased properties and senior living operations reportable business segments, respectively (excluding properties classified as held for sale as of December 31, 2020). MOBs, research and innovation centers, IRFs and LTACs, health systems, skilled nursing facilities (“SNFs”) and secured loans receivable and investments collectively comprised the remaining 36.5%. Our consolidated properties were located in 45 states, the District of Columbia, seven Canadian provinces and the United Kingdom as of December 31, 2020, with properties in one state (California) accounting for more than 10% of our total continuing revenues and net operating income (“NOI,” which is defined as total revenues, excluding interest and other income, less property-level operating expenses and office building services costs) for each of the years ended December 31, 2020, 2019 and 2018.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Triple-Net Leased Properties
The following table reflects the concentration risk related to our triple-net leased properties for the periods presented:
For the Years Ended December 31,
2020 2019 2018
Revenues(1):
Brookdale Senior Living(2)
4.4 % 4.7 % 4.3 %
Ardent 3.2 3.1 3.1
Kindred 3.5 3.3 3.5
NOI:
Brookdale Senior Living(2)
9.0 % 8.7 % 7.6 %
Ardent 6.6 5.8 5.7
Kindred 7.1 6.3 6.4
(1)Total revenues include office building and other services revenue, income from loans and investments and interest and other income.
(2)2020 results include $21.3 million of amortization of up-front consideration received in 2020 from the Brookdale Lease. 2018 results include the impact of a net non-cash charge of $21.3 million related to April 2018 lease extensions.
Each of our leases with Brookdale Senior Living, Ardent and Kindred is a triple-net lease that obligates the tenant to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and to comply with the terms of the mortgage financing documents, if any, affecting the properties. In addition, each of our Brookdale Senior Living, Ardent and Kindred leases has a corporate guaranty.
The properties we lease to Brookdale Senior Living, Ardent and Kindred accounted for a significant portion of our triple-net leased properties segment revenues and NOI for the years ended December 31, 2020, 2019 and 2018. Refer to Item 1A. Risk Factors.
Brookdale Transactions
In July 2020, we entered into a revised master lease agreement (the “Brookdale Lease”) and certain other agreements (together with the Brookdale Lease, the “Agreements”) with Brookdale Senior Living. The Agreements modify our current arrangements with Brookdale Senior Living as follows:
We received up-front consideration approximating $235 million, which will be amortized over the remaining lease term and consisted of: (a) $162 million in cash including $47 million from the transfer to Ventas of deposits under the Brookdale Lease; (b) a $45 million cash pay note (the “Note”), which has an initial interest rate of 9.0%, increasing 50 basis points per annum, and matures on December 31, 2025; (c) $28 million in warrants exercisable for 16.3 million shares of Brookdale Senior Living common stock, which are exercisable at any time prior to December 31, 2025 and have an exercise price of $3.00 per share.
Base cash rent under the Brookdale Lease is set at $100 million per annum starting in July 2020, with three percent annual escalators commencing on January 1, 2022. The Brookdale Lease is guaranteed by, and the Note is a direct obligation of, Brookdale Senior Living.
The warrants are classified within other assets on our Consolidated Balance Sheets. These warrants are measured at fair value with changes in fair value being recognized within other expense in our Consolidated Statements of Income.
Brookdale Senior Living transferred fee ownership of five senior living communities to us, in full satisfaction and repayment of a $78 million loan to Brookdale Senior Living from us that was secured by the five communities. Brookdale Senior Living will now manage those communities for us under a terminable management agreement.
In April 2018, we entered into various agreements with Brookdale Senior Living that provide for, among other things: (a) a consolidation of substantially all of our multiple lease agreements with Brookdale Senior Living into one master lease; (b) extension of the term for substantially all of our Brookdale Senior Living leased properties until December 31, 2025, with
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Brookdale Senior Living retaining two successive 10-year renewal options; and (c) the guarantee of all the Brookdale Senior Living obligations to us by Brookdale Senior Living Inc., including covenant protections for us. In connection with these agreements, we recognized a net non-cash expense of $21.3 million for the acceleration of straight-line rent receivables, net unamortized market lease intangibles and deferred revenues, which is included in triple-net leased rental income in our Consolidated Statements of Income. We also received a fee of $2.5 million that is being amortized over the new lease term.
Holiday Transaction
In April 2020, we completed a transaction with affiliates of Holiday Retirement (collectively, “Holiday”), including (a) entry into a new, terminable management agreement with Holiday Management Company for our 26 independent living assets previously subject to a triple-net lease (the “Holiday Lease”) with Holiday; (b) termination of the Holiday Lease; and (c) our receipt from Holiday of $33.8 million in cash from the transfer to us of deposits under the Holiday Lease and $66 million in principal amount of secured notes. As a result of the Holiday Lease termination, we recognized $50.2 million within triple-net leased rental income, composed of $99.8 million of cash and notes received less $49.6 million from the write-off of accumulated straight-line receivable.
2018 Kindred Transaction
In July 2018, Kindred closed transactions (the “Go Private Transactions”) pursuant to which (a) Kindred would be acquired by a consortium of TPG Capital (“TPG”), Welsh, Carson, Anderson & Stowe (“WCAS”) and Humana, Inc., and (b) immediately following the acquisition, (i) Kindred’s home health, hospice and community care businesses would be separated from Kindred and operated as a standalone company owned by Humana, Inc., TPG and WCAS, and (ii) Kindred would be operated as a separate healthcare company owned by TPG and WCAS. In connection with the closing of the transactions, we received a payment from Kindred of $12.3 million, which was recognized in interest and other income in our Consolidated Statements of Income during the third quarter of 2018.
Future Contractual Rents
The following table sets forth the future contracted minimum rentals, excluding contingent rent escalations, but including straight-line rent adjustments where applicable, for all of our consolidated triple-net and office building leases as of December 31, 2020 (excluding properties classified as held for sale as of December 31, 2020):
Brookdale Senior Living Ardent Kindred Other Total
(In thousands)
2021 $ 148,454 $ 127,505 $ 133,824 $ 759,135 $ 1,168,918
2022 148,016 127,505 133,828 680,952 1,090,301
2023 147,555 127,505 112,929 617,589 1,005,578
2024 147,090 127,505 102,479 567,525 944,599
2025 146,612 127,505 35,412 483,069 792,598
Thereafter - 1,219,450 4,228 1,787,143 3,010,821
Total $ 737,727 $ 1,856,975 $ 522,700 $ 4,895,413 $ 8,012,815
Senior Living Operations
As of December 31, 2020, Atria and Sunrise, collectively, provided comprehensive property management and accounting services with respect to 258 of our 432 consolidated senior housing communities, for which we pay annual management fees pursuant to long-term management agreements.
We rely on our managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our senior living operations efficiently and effectively. We also rely on our managers to set appropriate resident fees, provide accurate property-level financial results in a timely manner and otherwise operate our senior housing communities in compliance with the terms of our management agreements and all applicable laws and regulations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 4-ACQUISITIONS OF REAL ESTATE PROPERTY
The following summarizes our acquisition and development activities during 2020, 2019 and 2018. We acquire and invest in senior housing, medical office buildings, research and innovation centers and other healthcare properties primarily to achieve an expected yield on our investment, to grow and diversify our portfolio and revenue base, and to reduce our dependence on any single tenant, operator or manager, geographic location, asset type, business model or revenue source.
2020 Acquisitions
During the year ended December 31, 2020, we acquired two research and innovation centers reported within our office operations reportable business segment, seven senior housing communities reported within our senior living operations reportable business segment and one LTAC reported within our triple-net leased properties reportable business segment for an aggregate consideration of $249.5 million. Each of these acquisitions was accounted for as an asset acquisition.
2019 Acquisitions
In September 2019, we acquired an 87% interest in 34 Canadian senior housing communities (including five in-process developments) valued at $1.8 billion through an equity partnership (the “LGM Acquisition”) with Le Groupe Maurice (“LGM”). The portfolio continues to be managed by LGM. We also have rights to fund and own all additional developments under an exclusive pipeline agreement with LGM.
During the year ended December 31, 2019, we also acquired two properties reported within our office operations reportable business segment (one research and innovation center and one MOB), two senior housing communities reported within our senior living operations reportable business segment and one vacant land parcel for an aggregate purchase price of $237.0 million.
Each of our 2019 acquisitions was accounted for as an asset acquisition.
2018 Acquisitions
During the year ended December 31, 2018, we acquired five properties reported within our office operations reportable business segment (four MOBs and one research and innovation center) and one senior housing community reported within our senior living operations reportable business segment for an aggregate purchase price of $311.3 million. Each of these acquisitions was accounted for as an asset acquisition.
NOTE 5-DISPOSITIONS AND IMPAIRMENTS
2020 Activity
We recognized $262.2 million of gains on sale of real estate in 2020 as described below.
In March 2020, we formed the Ventas Life Science and Healthcare Real Estate Fund, L.P. (the “Ventas Fund”), a perpetual life vehicle that focuses on investments in research and innovation centers, medical office buildings and senior housing communities in North America. To seed the Ventas Fund, we contributed six (two of which are on the same campus) stabilized research and innovation and medical office properties. We received cash consideration of $620 million and a 21% interest in the Ventas Fund. We recognized a gain on the transactions of $225.1 million.
In October 2020, we formed a joint venture (the “R&I Development JV”) with GIC. To seed the R&I Development JV, we contributed our controlling ownership interest in four in-progress university-based research and innovation development projects (the “Initial R&I JV Projects”). At closing, GIC reimbursed Ventas for its share of costs incurred to date and we recognized a gain of $13.7 million. We own an over 50% interest and GIC owns a 45% interest in the Initial R&I JV Projects. The R&I Development JV may be expanded in the future to include other pre-identified R&I development projects.
See “Note 7 - Investments in Unconsolidated Entities” for additional details on the Ventas Fund and the JV.
Also during 2020, we sold four MOBs, four senior housing communities, 22 triple-net leased properties and one land parcel for aggregate consideration of $249.6 million, and we recognized a gain on the sale of these assets of $23.4 million.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2019 Activity
During the year ended December 31, 2019, we sold ten triple-net leased properties, eight MOBs, six senior housing assets and our leasehold interest in one vacant land parcel for aggregate consideration of $147.5 million, and we recognized a gain on the sale of these assets of $26.0 million.
2018 Activity
During the year ended December 31, 2018, we sold seven senior housing communities included in our senior living operations reportable business segment, five triple-net leased properties, 11 MOBs and two vacant land parcels for aggregate consideration of $348.6 million. We recognized a gain on the sale of these assets of $46.2 million for the year ended December 31, 2018.
Assets Held for Sale
The table below summarizes our real estate assets classified as held for sale as of December 31, 2020 and 2019, including the amounts reported within other assets and accounts payable and other liabilities on our Consolidated Balance Sheets:
December 31, 2020 December 31, 2019
Number of Properties Held for Sale Assets Held for Sale Liabilities Held for Sale Number of Properties Held for Sale Assets Held for Sale Liabilities Held for Sale
(Dollars in thousands)
Triple-net leased properties 1 $ 4,960 $ 2,690 8 $ 62,098 $ 1,623
Office operations (1)
- 15 101 1 5,177 499
Senior living operations 1 4,633 455 5 18,252 3,102
Total 2 $ 9,608 $ 3,246 14 $ 85,527 $ 5,224
(1)Balances relate to anticipated post-closing settlements of working capital.
In September 2020, one senior housing community no longer met the criteria as being classified as held for sale. As a result, we adjusted the carrying amount of the asset by recognizing depreciation expense of $0.1 million and classified the asset within net real estate investments on our Consolidated Balance Sheets for all periods presented.
Real Estate Impairment
We recognized impairments of $153.8 million, $133.6 million and $29.5 million for the years ended December 31, 2020, 2019 and 2018, respectively, which are recorded primarily as a component of depreciation and amortization in our Consolidated Statements of Income. A significant portion of our 2020 charges resulted from the impact of COVID-19 and others were primarily the result of a change in our intent to hold the impaired assets (See “Note 1 - Description of Business - COVID-19 Update”). In most cases, we recognized an impairment in the periods in which our change in intent was made.
There were no impairments recorded as a result of natural disasters for the years ended December 31, 2020 and 2019; however, we recognized impairments of $52.5 million for the year ended December 31, 2018 as a result of natural disasters which are recorded as a component of other in our Consolidated Statements of Income.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6-LOANS RECEIVABLE AND INVESTMENTS
As of December 31, 2020 and 2019, we had $0.9 billion and $1.0 billion, respectively, of net loans receivable and investments relating to senior housing and healthcare operators or properties. The following is a summary of our loans receivable and investments, net, including amortized cost, fair value and unrealized gains or losses on available for sale investments:
Amortized Cost Allowance Unrealized Gain Carrying Amount Fair Value
(In thousands)
As of December 31, 2020:
Secured/mortgage loans and other, net $ 555,840 $ - $ - $ 555,840 $ 508,707
Government-sponsored pooled loan investments, net(1)
55,154 (8,846) 3,419 49,727 49,727
Total investments reported as secured loans receivable and investments, net
610,994 (8,846) 3,419 605,567 558,434
Non-mortgage loans receivable, net 74,700 (17,623) - 57,077 57,009
Marketable debt securities (2)
213,334 - 24,219 237,553 237,553
Total loans receivable and investments, net $ 899,028 $ (26,469) $ 27,638 $ 900,197 $ 852,996
As of December 31, 2019:
Secured/mortgage loans and other, net $ 645,546 $ - $ - $ 645,546 $ 646,925
Government-sponsored pooled loan investments, net(1)
52,178 - 6,888 59,066 59,066
Total investments reported as secured loans receivable and investments, net
697,724 - 6,888 704,612 705,991
Non-mortgage loans receivable, net 63,724 - - 63,724 63,538
Marketable debt securities (2)
213,062 - 24,298 237,360 237,360
Total loans receivable and investments, net $ 974,510 $ - $ 31,186 $ 1,005,696 $ 1,006,889
(1)Investments in government-sponsored pool loans have contractual maturity dates in 2021 and 2023.
(2)Investments in marketable debt securities have contractual maturity dates in 2024 and 2026.
2020 Activity
During the year ended December 31, 2020, we recognized $34.7 million in expense in establishing allowances on our loan and investment portfolio. See “Note 1 - Description Of Business - COVID-19 Update.” In December 2020, we received $10.5 million for partial repayment of previously reserved loans which was recorded within allowance on loans receivables and investments in our Consolidated Statements of Income.
During the year ended December 31, 2020, we received aggregate proceeds of $106.1 million for the full repayment of the principal balances of various loans receivable with a weighted average interest rate of 8.3% that were due to mature between 2020 and 2025, which resulted in total gains of $1.4 million.
In April 2020, we received as consideration $66 million of notes secured by equity pledges on real estate assets with an effective interest rate of 9.2% in connection with the termination of the Holiday Lease. See “Note 3 - Concentration of Credit Risk.”
In July 2020, we entered into a $45 million Note from Brookdale Senior Living in connection with certain revised Agreements, which is included above in Non-mortgage loans receivable, net. The Note has an initial interest rate of 9.0%, increasing 50 basis points per annum, and matures on December 31, 2025. In addition, Brookdale transferred fee ownership of five senior living communities to us, in full satisfaction and repayment of a $78 million loan to Brookdale Senior Living from us that was secured by the five communities. See “Note 3 - Concentration of Credit Risk.”
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2019 Activity
In April 2019, we purchased $5.0 million and $10.5 million of senior secured notes issued by a healthcare company which mature in 2024 and 2026, respectively. The 2024 and 2026 notes were purchased at a price of 102% and 98% of par, respectively, and have an effective interest rate of 8.1% and 8.3%, respectively. These marketable debt securities are classified as available for sale and are reflected on our Consolidated Balance Sheets at fair value.
In June 2019, we provided new secured debt financing of $490 million to certain subsidiaries of Colony Capital, Inc. The London Inter-bank Offered Rate (“LIBOR”) based debt financing has a five-year term (inclusive of three one-year extension options). In connection with this transaction, our previous secured loan to certain subsidiaries of Colony Capital, Inc. of $282 million was paid in full and we recognized a gain of $0.5 million in income from loans and investments in our Consolidated Statements of Income.
In July 2019, we closed the first phase of the LGM Acquisition by funding C$947 million (US $723 million) to LGM as a bridge loan to enable LGM to buy out its former partner. The bridge loan and all outstanding interest was fully repaid in September 2019 upon the closing of the LGM Acquisition. See “Note 4 - Acquisitions of Real Estate Property.”
NOTE 7-INVESTMENTS IN UNCONSOLIDATED ENTITIES
We report investments in unconsolidated entities over whose operating and financial policies we have the ability to exercise significant influence under the equity method of accounting. We are not required to consolidate these entities because our joint venture partners have significant participating rights, nor are these entities considered VIEs, as they are controlled by equity holders with sufficient capital. We invest in both real estate entities and operating entities which are described further below.
Investments in Unconsolidated Real Estate Entities
Through our newly formed Ventas Investment Management Platform, we partner with third-party institutional investors to invest in healthcare real estate through various joint ventures and other co-investment vehicles. Below is a summary of our investment in unconsolidated real estate entities as of December 31, 2020 and 2019, respectively:
Carrying Amount
As of December 31,
Ownership(1)
2020 2019
(In thousands)
Investment in unconsolidated real estate entities:
Ventas Life Science & Healthcare Real Estate Fund 22.9% $ 279,983 $ -
Pension Fund Joint Venture 22.8% 34,690 41,739
Research & Innovation Development Joint Venture 50.3% 123,445 -
Ventas Investment Management Platform 438,118 41,739
All other(2)
34.0%-50.0%
5,570 3,283
Total investment unconsolidated real estate entities $ 443,688 $ 45,022
(1) The entities in which we have an ownership interest may have less than a 100% interest in the underlying real estate. The ownership percentages in the table reflect Ventas’ interest in the underlying real estate.
(2) Includes investments in land parcels, parking structures and other de minimis investments in unconsolidated real estate entities.
In March 2020, we formed the Ventas Fund, in which we are the sponsor and general partner. See “Note 5 - Dispositions and Impairments.” In October 2020, the Ventas Fund acquired a portfolio of three life science properties in the South San Francisco life science cluster for $1.0 billion, which increased assets under management to $1.8 billion as of December 31, 2020. The acquisition was financed with a $415 million mortgage loan bearing interest at a fixed rate of 2.6% per annum.
In October 2020, we formed the R&I Development JV. See “Note 5 - Dispositions and Impairments.” We own an over 50% interest and GIC owns a 45% interest in the Initial R&I JV Projects. We act as manager of the R&I Develoment JV, with customary rights and obligations, and will receive customary fees and incentives. Our exclusive development partner, Wexford Science & Technology, remains the developer of, and a minority partner in, all of the projects. The R&I Development JV may be expanded in the future to include other pre-identified R&I development projects.
In March 2018, we recognized an impairment charge of $35.7 million relating to one of our equity investments in an unconsolidated real estate joint venture consisting principally of SNFs, which is recorded in loss from unconsolidated entities in our Consolidated Statements of Income. We completed the sale of our 25% interest to our joint venture partner in July 2018 and received $57.5 million at closing.
We provide various services to our unconsolidated real estate entities in exchange for fees and reimbursements. Total management fees earned in connection with these services were $6.7 million, $3.4 million and $5.8 million for the years ended December 31, 2020, 2019 and 2018, respectively, which is included in office building and other services revenue in our Consolidated Statements of Income.
Investments in Unconsolidated Operating Entities
We own investments in unconsolidated operating entities such as Ardent, Atria and Eclipse Senior Living, Inc. (“ESL”), which are included within other assets on our Consolidated Balance Sheets. Our 34% ownership interest in Atria entitles us to customary minority rights and protections, including the right to appoint two of six members to the Atria Board of Directors. Our 34% ownership interest in ESL entitles us to customary minority rights and protections, including the right to appoint two of six members to the ESL Board of Directors. ESL management owns the 66% controlling interest. Our 9.8% ownership interest in Ardent entitles us to customary minority rights and protections, as well as the right to appoint one of 11 members on the Ardent Board of Directors.
In June 2020, as a result of COVID-19, we recognized an impairment charge of $10.7 million related to our investment in an unconsolidated operating entity. See “Note 1 - Description of Business - COVID-19 Update.”
NOTE 8-INTANGIBLES
The following is a summary of our intangibles:
As of December 31, 2020 As of December 31, 2019
Balance Remaining
Weighted Average
Amortization
Period in Years Balance Remaining
Weighted Average
Amortization
Period in Years
(Dollars in thousands)
Intangible assets:
Above market lease intangibles $ 140,096 6.4 $ 145,891 6.9
In-place and other lease intangibles 1,090,790 10.7 1,162,187 10.6
Goodwill 1,051,650 N/A 1,051,161 N/A
Other intangibles 35,870 10.0 35,837 10.9
Accumulated amortization (941,462) N/A (922,668) N/A
Net intangible assets $ 1,376,944 10.3 $ 1,472,408 10.2
Intangible liabilities:
Below market lease intangibles $ 339,265 14.3 $ 349,357 14.5
Other lease intangibles 13,498 N/A 13,498 N/A
Accumulated amortization (212,655) N/A (203,834) N/A
Purchase option intangibles 3,568 N/A 3,568 N/A
Net intangible liabilities $ 143,676 14.3 $ 162,589 14.5
N/A-Not Applicable
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Above-market lease intangibles and in-place and other lease intangibles are included in acquired lease intangibles within real estate investments on our Consolidated Balance Sheets. Other intangibles (including non-compete agreements, trade names and trademarks) are included in other assets on our Consolidated Balance Sheets. Below market lease intangibles, other lease intangibles and purchase option intangibles are included in accounts payable and other liabilities on our Consolidated Balance Sheets. For the years ended December 31, 2020, 2019 and 2018, our net amortization related to these intangibles was $45.7 million, $59.2 million and $49.2 million, respectively. The following is a summary of the estimated net amortization related to these intangibles for each of the next five years:
Estimated Net Amortization
(In thousands)
2021 $ 50,421
2022 42,787
2023 31,343
2024 16,932
2025 8,977
The table below reflects the carrying amount of goodwill, by segment, as of December 31, 2020:
Goodwill
(In thousands)
Triple-net leased properties $ 322,270
Senior living operations 259,482
Office operations 469,898
Total goodwill $ 1,051,650
NOTE 9-OTHER ASSETS
The following is a summary of our other assets:
As of December 31,
2020 2019
(In thousands)
Straight-line rent receivables $ 169,711 $ 278,833
Non-mortgage loans receivable, net 57,077 63,724
Stock warrants 50,098 -
Marketable debt securities 237,553 237,360
Other intangibles, net 4,659 5,149
Investment in unconsolidated operating entities 63,768 59,301
Other 224,363 233,349
Total other assets $ 807,229 $ 877,716
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 10-SENIOR NOTES PAYABLE AND OTHER DEBT
The following is a summary of our senior notes payable and other debt:
As of December 31,
2020 2019
(In thousands)
Unsecured revolving credit facility (1)
$ 39,395 $ 120,787
Commercial paper notes - 567,450
Secured revolving construction credit facility due 2022 154,098 160,492
Floating Rate Senior Notes, Series F due 2021 (2)
235,664 231,018
3.25% Senior Notes due 2022 263,687 500,000
3.30% Senior Notes, Series C due 2022 (2)
196,386 192,515
Unsecured term loan due 2023 200,000 200,000
3.125% Senior Notes due 2023 400,000 400,000
3.10% Senior Notes due 2023 400,000 400,000
2.55% Senior Notes, Series D due 2023 (2)
216,025 211,767
3.50% Senior Notes due 2024 400,000 400,000
3.75% Senior Notes due 2024 400,000 400,000
4.125% Senior Notes, Series B due 2024 (2)
196,386 192,515
2.80% Senior Notes, Series E due 2024 (2)
471,328 462,036
Unsecured term loan due 2025 (2)
392,773 385,030
3.50% Senior Notes due 2025 600,000 600,000
2.65% Senior Notes due 2025 450,000 450,000
4.125% Senior Notes due 2026 500,000 500,000
3.25% Senior Notes due 2026 450,000 450,000
3.85% Senior Notes due 2027 400,000 400,000
4.00% Senior Notes due 2028 650,000 650,000
4.40% Senior Notes due 2029 750,000 750,000
3.00% Senior Notes due 2030 650,000 650,000
4.75% Senior Notes due 2030 500,000 -
6.90% Senior Notes due 2037 52,400 52,400
6.59% Senior Notes due 2038 22,823 22,823
5.70% Senior Notes due 2043 300,000 300,000
4.375% Senior Notes due 2045 300,000 300,000
4.875% Senior Notes due 2049 300,000 300,000
Mortgage loans and other 2,092,106 1,996,969
Total 11,983,071 12,245,802
Deferred financing costs, net (68,343) (79,939)
Unamortized fair value adjustment 12,618 20,056
Unamortized discounts (31,934) (27,146)
Senior notes payable and other debt $ 11,895,412 $ 12,158,773
(1)As of December 31, 2020 and 2019, respectively, $12.2 million and $26.2 million of aggregate borrowings were denominated in Canadian dollars. Aggregate borrowings of $27.2 million and $27.6 million were denominated in British pounds as of December 31, 2020 and 2019, respectively.
(2)Canadian Dollar debt obligations shown in US Dollars.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Credit Facilities, Commercial Paper and Unsecured Term Loans
As of December 31, 2020, our unsecured credit facility was comprised of a $3.0 billion unsecured revolving credit facility priced at LIBOR plus 0.875% based on the Company’s debt ratings, which was scheduled to mature in 2021. Following December 31, 2020, we entered into an amended and restated unsecured credit facility (the “New Credit Facility”) comprised of a $2.75 billion unsecured revolving credit facility initially priced at LIBOR plus 0.825% based on the Company’s debt ratings. The New Credit Facility matures in 2025, but may be extended at our option subject to the satisfaction of certain conditions, for two additional periods of six months each. The New Credit Facility also includes an accordion feature that permits us to increase our aggregate borrowing capacity thereunder to up to $3.75 billion.
Our unsecured credit facility imposed certain customary restrictions on us, including restrictions pertaining to: (i) liens; (ii) investments; (iii) the incurrence of additional indebtedness; (iv) mergers and dissolutions; (v) certain dividend, distribution and other payments; (vi) permitted businesses; (vii) transactions with affiliates; (viii) agreements limiting certain liens; and (ix) the maintenance of certain consolidated total leverage, secured debt leverage, unsecured debt leverage and fixed charge coverage ratios and minimum consolidated adjusted net worth, and contains customary events of default. The New Credit Facility imposes similar restrictions.
As of December 31, 2020, $39.4 million was outstanding under the unsecured revolving credit facility with an additional $24.9 million restricted to support outstanding letters of credit. In addition, we limit our utilization of the unsecured revolving credit facility, to the extent necessary, to support our commercial paper program when commercial paper notes are outstanding. We had $2.9 billion in available liquidity under the unsecured revolving credit facility as of December 31, 2020. In connection with the New Credit Facility, we paid off all amounts outstanding under the existing unsecured revolving credit facility as of January 29, 2021 by drawing down the same amount under the New Credit Facility.
Our wholly owned subsidiary, Ventas Realty, Limited Partnership (“Ventas Realty”), may issue from time to time unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $1.0 billion. The notes are sold under customary terms in the United States commercial paper note market and are ranked pari passu with all of Ventas Realty’s other unsecured senior indebtedness. The notes are fully and unconditionally guaranteed by Ventas, Inc. As of December 31, 2020, we had no borrowings outstanding under our commercial paper program.
As of December 31, 2020, we had a $200.0 million unsecured term loan priced at LIBOR plus 0.90% that matures in 2023. The term loan also includes an accordion feature that effectively permits us to increase our aggregate borrowings thereunder to up to $800.0 million.
As of December 31, 2020, we had a $400.0 million secured revolving construction credit facility with $154.1 million of borrowings outstanding. The secured revolving construction credit facility matures in 2022 and is primarily used to finance the development of research and innovation centers and other construction projects.
In September 2019, we entered into a new C$500 million unsecured term loan facility priced at Canadian Dollar Offered Rate (“CDOR”) plus 0.90% that matures in 2025.
In June 2019, we repaid $100.0 million of the balance outstanding on the $300.0 million unsecured term loan that matures in 2023 and repaid in full the $600.0 million unsecured term loan that was set to mature in 2024 and, as a result, we recognized a non-cash charge to loss on extinguishment of debt of $3.2 million during the second quarter of 2019.
Senior Notes
As of December 31, 2020, we had outstanding $7.7 billion aggregate principal amount of senior notes issued by Ventas Realty ($263.7 million of which was co-issued by Ventas Realty’s wholly owned subsidiary, Ventas Capital Corporation), approximately $75.2 million aggregate principal amount of senior notes issued by Nationwide Health Properties, Inc. (“NHP”) and assumed by our subsidiary, Nationwide Health Properties, LLC (“NHP LLC”), as successor to NHP, in connection with our acquisition of NHP, and C$1.7 billion aggregate principal amount of senior notes issued by our subsidiary, Ventas Canada Finance Limited (“Ventas Canada”). All of the senior notes issued by Ventas Realty and Ventas Canada are unconditionally guaranteed by Ventas, Inc.
Ventas Realty’s senior notes are part of our and Ventas Realty’s general unsecured obligations, ranking equal in right of payment with all of our and Ventas Realty’s existing and future senior obligations and ranking senior in right of payment to all of our and Ventas Realty’s existing and future subordinated indebtedness. However, Ventas Realty’s senior notes are effectively subordinated to our and Ventas Realty’s secured indebtedness, if any, to the extent of the value of the assets securing
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
that indebtedness. Ventas Realty’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of our subsidiaries (other than Ventas Realty and, with respect to those senior notes co-issued by Ventas Capital Corporation, Ventas Capital Corporation).
Ventas Canada’s senior notes are part of our and Ventas Canada’s general unsecured obligations, ranking equal in right of payment with all of Ventas Canada’s existing and future subordinated indebtedness. However, Ventas Canada’s senior notes are effectively subordinated to our and Ventas Canada’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. Ventas Canada’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of our subsidiaries (other than Ventas Canada).
NHP LLC’s senior notes are part of NHP LLC’s general unsecured obligations, ranking equal in right of payment with all of NHP LLC’s existing and future senior obligations and ranking senior to all of NHP LLC’s existing and future subordinated indebtedness. However, NHP LLC’s senior notes are effectively subordinated to NHP LLC’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. NHP LLC’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of its subsidiaries.
Ventas Realty and Ventas Canada may redeem each series of their respective senior notes in whole at any time or in part from time to time, prior to maturity at the redemption prices set forth in the applicable indenture (which include, in many instances, a make-whole premium), plus, in each case, accrued and unpaid interest thereon to the redemption date.
NHP LLC’s 6.90% senior notes due 2037 are subject to repurchase at the option of the holders, at par, on October 1, 2027, and its 6.59% senior notes due 2038 are subject to repurchase at the option of the holders, at par, on July 7 in each of 2023 and 2028.
2021 Senior Notes Activity
In February 2021, in order to reduce near-term maturities, we issued a make whole redemption for the entirety of the $400 million outstanding aggregate principal amount of 3.10% senior notes due January 2023. The redemption is expected to settle in March 2021 and will be funded primarily with cash on hand.
2020 Senior Notes Activity
In April 2020, Ventas Realty issued and sold $500.0 million aggregate principal amount of 4.75% senior notes due 2030 at an amount equal to 97.86% of par.
In October 2020, we redeemed, pursuant to a cash tender offer, $236.3 million aggregate principal amount then outstanding of our 3.25% senior notes due 2022 at 104.14% of par value, plus accrued and unpaid interest to the payment date. As a result, we recognized a loss on extinguishment of debt of $11.1 million during the year ended December 31, 2020.
2019 Senior Notes Activity
In January 2019, we redeemed $258.8 million aggregate principal amount then outstanding of our 5.45% senior notes due 2043 at a public offering price at par, plus accrued and unpaid interest to the redemption date. Notice of the redemption was given in November 2018 and, as a result, we recognized a non-cash charge to loss on extinguishment of debt of $7.1 million during the year ended December 31, 2018 and $0.4 million during the first quarter of 2019.
In February 2019, Ventas Realty issued and sold $400.0 million aggregate principal amount of 3.50% senior notes due 2024 at a public offering price equal to 99.88% of par and $300.0 million aggregate principal amount of 4.875% senior notes due 2049 at a public offering price equal to 99.77% of par.
In June 2019, Ventas Realty issued $450.0 million aggregate principal amount of 2.65% senior notes due 2025 at a public offering price equal to 99.45% of par. The notes were settled and proceeds were received in July 2019.
In July 2019, in connection with an announced cash tender offer for such notes, we tendered $397.1 million principal amount then outstanding of our 2.70% senior notes due 2020 for a tender offer consideration of 100.37% of par value, plus accrued and unpaid interest to the payment date. In August 2019, we repaid the remaining balance then outstanding of our 2.70% senior notes due 2020 of $102.9 million. As a result of the redemption and repayment, we recognized a total loss on extinguishment of debt of $2.4 million.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In August 2019, Ventas Realty issued and sold $650.0 million aggregate principal amount of 3.00% senior notes due 2030 at a public offering price equal to 99.51% of par.
In August 2019, in connection with an announced cash tender offer for such notes, we tendered $395.7 million principal amount then outstanding of our 4.25% senior notes due 2022 for a tender offer consideration of 105.46% of par value, plus accrued and unpaid interest to the payment date. In September 2019, we repaid the remaining balance then outstanding of our 4.25% senior notes due 2022 of $204.3 million. As a result of the redemption and repayment, we recognized a loss on extinguishment of debt of $35.9 million.
In September 2019, we repaid in full, at par, C$400.0 million principal amount then outstanding of our 3.00% senior notes, Series A due 2019 upon maturity.
In November 2019, Ventas Canada issued and sold C$600 million aggregate principal amount of 2.80% senior notes, Series E due 2024 and C$300 million aggregate principal amount of floating rate senior notes, Series F due 2021, at a public offering price equal to 99.99% and 100.00%, respectively, of par.
Mortgages
At December 31, 2020, we had 89 mortgage loans outstanding in the aggregate principal amount of $2.1 billion which is secured by 78 of our properties. Of these loans, 66 loans in the aggregate principal amount of $1.4 billion bear interest at fixed rates ranging from 1.5% to 13.0% per annum, and 23 loans in the aggregate principal amount of $702.9 million bear interest at variable rates ranging from 0.1% to 2.9% per annum as of December 31, 2020. At December 31, 2020, the weighted average annual rate on our fixed rate mortgage loans was 3.5%, and the weighted average annual rate on our variable rate mortgage loans was 1.9%. Our mortgage loans had a weighted average maturity of 3.9 years as of December 31, 2020.
During the years ended December 31, 2020 and 2019, we repaid in full mortgage loans in the aggregate principal amount of $60.9 million and $97.7 million, respectively.
In September 2019, we assumed C$1.2 billion mortgage debt (included in the $2.1 billion above), including a fair value premium of C$16.6 million, in connection with the LGM Acquisition. See “Note 4 - Acquisitions of Real Estate Property.”
Scheduled Maturities of Borrowing Arrangements and Other Provisions
The following summarizes the maturities of our senior notes payable and other debt as of December 31, 2020:
Principal Amount
Due at Maturity Unsecured Revolving
Credit
Facility and Commercial Paper Notes (1)
Scheduled Periodic
Amortization Total Maturities
(In thousands)
2021 $ 511,971 $ 39,395 $ 44,651 $ 596,017
2022 1,070,861 - 38,602 1,109,463
2023 1,609,373 - 24,821 1,634,194
2024 1,610,581 - 18,587 1,629,168
2025 1,619,872 - 14,894 1,634,766
Thereafter 5,285,913 - 93,550 5,379,463
Total maturities $ 11,708,571 $ 39,395 $ 235,105 $ 11,983,071
(1)At December 31, 2020, we had unrestricted cash and cash equivalents of $413.3 million, which exceeds the borrowings outstanding under our unsecured revolving credit facility and commercial paper program.
The instruments governing our outstanding indebtedness contain covenants that limit our ability and the ability of certain of our subsidiaries to, among other things: (i) incur debt; (ii) make certain dividends, distributions and investments; (iii) enter into certain transactions; and/or (iv) merge, consolidate or sell certain assets. Ventas Realty’s and Ventas Canada’s senior notes also require us and our subsidiaries to maintain total unencumbered assets of at least 150% of our unsecured debt.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Our credit facilities also require us to maintain certain financial covenants pertaining to, among other things, our consolidated total leverage, secured debt, unsecured debt, fixed charge coverage and net worth.
As of December 31, 2020, we were in compliance with all of these covenants.
Derivatives and Hedging
In the normal course of our business, interest rate fluctuations affect future cash flows under our variable rate debt obligations, loans receivable and marketable debt securities, and foreign currency exchange rate fluctuations affect our operating results. We follow established risk management policies and procedures, including the use of derivative instruments, to mitigate the impact of these risks.
We do not use derivative instruments for trading or speculative purposes, and we have a policy of entering into contracts only with major financial institutions based upon their credit ratings and other factors. When considered together with the underlying exposure that the derivative is designed to hedge, we do not expect that the use of derivatives in this manner would have any material adverse effect on our future financial condition or results of operations.
As of December 31, 2020, our variable rate debt obligations of $1.5 billion reflect, in part, the effect of $146.7 million notional amount of interest rate swaps with maturities ranging from March 2022 to May 2022 that effectively convert fixed rate debt to variable rate debt. As of December 31, 2020, our fixed rate debt obligations of $10.5 billion reflect, in part, the effect of $305.9 million and C$145.7 million notional amount of interest rate swaps with maturities ranging from January 2023 to December 2029, in each case that effectively convert variable rate debt to fixed rate debt.
NOTE 11-FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying amounts and fair values of our financial instruments were as follows:
As of December 31, 2020 As of December 31, 2019
Carrying
Amount Fair Value Carrying
Amount Fair Value
(In thousands)
Assets:
Cash and cash equivalents $ 413,327 $ 413,327 $ 106,363 $ 106,363
Escrow deposits and restricted cash 38,313 38,313 39,739 39,739
Stock warrants 50,098 50,098 - -
Secured mortgage loans and other, net 555,840 508,707 645,546 646,925
Non-mortgage loans receivable, net 57,077 57,009 63,724 63,538
Marketable debt securities 237,553 237,553 237,360 237,360
Government-sponsored pooled loan investments, net 49,727 49,727 59,066 59,066
Derivative instruments 2 2 738 738
Liabilities:
Senior notes payable and other debt, gross 11,983,071 13,075,337 12,245,802 12,778,758
Derivative instruments 28,338 28,338 12,987 12,987
Redeemable OP Units 145,983 145,983 171,178 171,178
For a discussion of the assumptions considered, refer to “Note 2 - Accounting Policies.” The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the estimates presented above are not necessarily indicative of the amounts we would realize in a current market exchange.
NOTE 12-STOCK- BASED COMPENSATION
Compensation Plans
We currently have: three plans under which outstanding options to purchase common stock, shares of restricted stock or restricted stock units have been, or may in the future be, granted to our officers, employees and non-employee directors (the
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2006 Incentive Plan, the 2006 Stock Plan for Directors, and the 2012 Incentive Plan); one plan under which executive officers may receive deferred common stock in lieu of compensation (the Executive Deferred Stock Compensation Plan); and one plan under which certain non-employee directors have received or may receive deferred common stock in lieu of director fees (the Nonemployee Directors’ Deferred Stock Compensation Plan). These plans are referred to collectively as the “Plans.”
During the year ended December 31, 2020, we were permitted to issue shares and grant options, restricted stock and restricted stock units only under the Executive Deferred Stock Compensation Plan, the Nonemployee Directors’ Deferred Stock Compensation Plan and the 2012 Incentive Plan. The 2006 Incentive Plan and the 2006 Stock Plan for Directors (collectively, the “2006 Plans”) expired on December 31, 2012, and no additional grants were permitted under those Plans after that date.
The number of shares initially reserved for issuance and the number of shares available for future grants or issuance under these Plans as of December 31, 2020 were as follows:
•Executive Deferred Stock Compensation Plan-0.6 million shares were reserved initially for issuance to our executive officers in lieu of the payment of all or a portion of their salary, at their option, and 0.6 million shares were available for future issuance as of December 31, 2020.
•Nonemployee Directors’ Deferred Stock Compensation Plan-0.6 million shares were reserved initially for issuance to nonemployee directors in lieu of the payment of all or a portion of their retainer and meeting fees, at their option, and 0.4 million shares were available for future issuance as of December 31, 2020.
•2012 Incentive Plan-10.7 million shares (plus the number of shares or options outstanding under the 2006 Plans as of December 31, 2012 that were or are subsequently forfeited or expire unexercised) were reserved initially for grants or issuance to employees and non-employee directors, and 2.7 million shares (plus the number of shares or options outstanding under the 2006 Plans as of December 31, 2020 that were or are subsequently forfeited or expire unexercised) were available for future issuance as of December 31, 2020.
Outstanding options issued under the Plans are exercisable at the market price on the date of grant, expire ten years from the date of grant, and vest or have vested over periods of two or three years. If provided in the applicable Plan or award agreement, the vesting of stock options may accelerate upon a change of control (as defined in the applicable Plan) of Ventas, Inc. and other specified events.
Stock Options
The following is a summary of stock option activity in 2020:
Shares (000’s) Weighted Average
Exercise Price Weighted
Average
Remaining
Contractual
Life (years) Intrinsic
Value
($000’s)
Outstanding as of December 31, 2019 4,077 $ 60.49
Options granted - -
Options exercised (111) 45.75
Options forfeited (9) 60.50
Options expired (3) 60.50
Outstanding as of December 31, 2020 3,954 60.90 4.8 $ 462
Exercisable as of December 31, 2020 3,954 60.90 4.8 $ 462
Compensation costs for all share-based awards are based on the grant date fair value and are recognized on a straight-line basis during the requisite service periods, with charges recorded in general, administrative and professional fees. As of December 31, 2020 there was no unrecognized compensation expense relating to stock options. Compensation costs related to stock options for the years ended December 31, 2019 and 2018 were $0.3 million and $2.6 million, respectively.
Aggregate proceeds received from options exercised under the Plans for the years ended December 31, 2020, 2019 and 2018 were $5.1 million, $36.1 million and $8.8 million, respectively. The total intrinsic value at exercise of options exercised during the years ended December 31, 2020, 2019 and 2018 was $1.3 million, $12.3 million and $3.1 million, respectively. There was no deferred income tax benefit for stock options exercised.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Restricted Stock and Restricted Stock Units
We recognize the fair value of shares of restricted stock and restricted stock units (including time-based and performance-based awards) on the grant date of the award as stock-based compensation expense over the requisite service period, with charges to general, administrative and professional fees of $21.4 million, $33.6 million and $27.3 million in 2020, 2019 and 2018, respectively. Restricted stock and restricted stock units generally vest over periods ranging from two to five years. If provided in the applicable Plan or award agreement, the vesting of restricted stock and restricted stock units may accelerate upon a change of control (as defined in the applicable Plan) of Ventas and other specified events. In addition to customary change in control vesting provisions, awards for executive officers will also generally vest to the executives if at a future termination date, they have attained a combined number of age and years of service of at least 75, with a minimum age of 62.
A summary of the status of our non-vested restricted stock and restricted stock units (including time-based and performance-based awards) as of December 31, 2020, and changes during the year ended December 31, 2020, follows:
Restricted
Stock
(000’s) Weighted
Average
Grant Date
Fair Value Restricted
Stock Units (000’s) Weighted
Average
Grant Date
Fair Value
Nonvested at December 31, 2019 248 $ 58.21 539 $ 56.99
Granted 170 44.36 446 59.81
Vested (136) 56.54 (271) 55.14
Forfeited (49) 54.08 - -
Nonvested at December 31, 2020 233 49.94 714 59.46
As of December 31, 2020, we had $19.8 million of unrecognized compensation cost related to non-vested restricted stock and restricted stock units under the Plans. We expect to recognize that cost over a weighted average period of 1.80 years. The total fair value at the vesting date for restricted stock and restricted stock units that vested during the years ended December 31, 2020, 2019 and 2018 was $19.8 million, $31.6 million and $15.5 million, respectively.
Employee and Director Stock Purchase Plan
We have in effect an Employee and Director Stock Purchase Plan (“ESPP”) under which our employees and directors may purchase shares of our common stock at a discount. Pursuant to the terms of the ESPP, on each purchase date, participants may purchase shares of common stock at a price not less than 90% of the market price on that date (with respect to the employee tax-favored portion of the plan) and not less than 95% of the market price on that date (with respect to the additional employee and director portion of the plan). We initially reserved 3.0 million shares for issuance under the ESPP. As of December 31, 2020, 0.2 million shares had been purchased under the ESPP and 2.8 million shares were available for future issuance.
Employee Benefit Plan
We maintain a 401(k) plan that allows eligible employees to defer compensation subject to certain limitations imposed by the Code. In 2020, we made contributions for each qualifying employee of up to 3.5% of his or her salary, subject to certain limitations. During 2020, 2019 and 2018, our aggregate contributions were approximately $1.6 million, $1.5 million and $1.5 million, respectively.
NOTE 13-INCOME TAXES
We have elected to be taxed as a REIT under the applicable provisions of the Code, as amended, for every year beginning with the year ended December 31, 1999. We have also elected for certain of our subsidiaries to be treated as TRS entities, which are subject to federal, state and foreign income taxes. All entities other than the TRS entities are collectively referred to as the “REIT” within this note. Certain REIT entities are subject to foreign income tax.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Although we intend to continue to operate in a manner that will enable us to qualify as a REIT, such qualification depends upon our ability to meet, on a continuing basis, various distribution, stock ownership and other tests. Our tax treatment of distributions per common share was as follows:
For the Years Ended December 31,
2020 2019 2018
Tax treatment of distributions:
Ordinary income $ - $ - $ -
Qualified ordinary income 0.00696 0.12230 0.00375
199A qualified business income 2.14381 2.22898 2.97465
Long-term capital gain 0.28450 - 0.05916
Unrecaptured Section 1250 gain 0.04973 0.03434 0.12244
Non-dividend distribution - 0.78438 -
Distribution reported for 1099-DIV purposes 2.48500 3.17000 3.16000
Add: Dividend declared in current year and taxable in following year 0.45000 0.79250 0.79250
Less: Dividend declared in prior year and taxable in current year (0.79250) (0.79250) (0.79000)
Distribution declared per common share outstanding $ 2.14250 $ 3.17000 $ 3.16250
We believe we have met the annual REIT distribution requirement by payment of at least 90% of our estimated taxable income for 2020, 2019 and 2018. Our consolidated benefit for income taxes was as follows:
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Current - Federal $ 402 $ (1,840) $ (2,953)
Current - State 2,107 2,118 1,332
Deferred - Federal (56,835) (49,532) (32,492)
Deferred - State (35,447) (3,353) (825)
Current - Foreign 2,929 2,335 1,892
Deferred - Foreign (9,690) (6,038) (6,907)
Total $ (96,534) $ (56,310) $ (39,953)
The 2020 income tax benefit is primarily due to a $95.9 million net deferred tax benefit from an internal restructuring of certain US taxable REIT subsidiaries completed in the first quarter, partially offset by a valuation allowance recorded against certain deferred tax assets in the second quarter. During the second quarter of 2020, we determined that the future tax benefits of certain deferred tax assets (primarily US federal NOL carryforwards which begin to expire in 2031) were not more likely than not to be realized. The 2019 income tax benefit was primarily due to the $57.7 million reversal of valuation allowances recorded against the net deferred tax assets of certain of our TRS entities.
Although the TRS entities and certain other foreign entities have paid minimal cash federal, state and foreign income taxes for the year ended December 31, 2020, their income tax liabilities may increase in future years as we exhaust net operating loss (“NOL”) carryforwards and as our senior living and other operations grow. Such increases could be significant.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A reconciliation of income tax expense and benefit, which is computed by applying the federal corporate tax rate for the years ended December 31, 2020, 2019 and 2018, to the income tax benefit is as follows:
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interest and income taxes
$ 27,132 $ 77,803 $ 80,811
State income taxes, net of federal benefit (1,967) 2,341 (253)
Change in valuation allowance from ordinary operations 86,359 (47,227) (5,451)
Decrease in ASC 740 income tax liability - - (4,347)
Tax at statutory rate on earnings not subject to federal income taxes (53,808) (90,862) (89,947)
Foreign rate differential and foreign taxes 3,342 1,407 1,924
Change in tax status of TRS (150,287) (52) 359
Effect of the 2017 Tax Act - - (23,160)
Other differences (7,305) 280 111
Income tax benefit $ (96,534) $ (56,310) $ (39,953)
Each TRS is a tax-paying component for purposes of classifying deferred tax assets and liabilities. The tax effects of temporary differences and carryforwards included in the net deferred tax liabilities are summarized as follows:
As of December 31,
2020 2019 2018
(In thousands)
Property, primarily differences in depreciation and amortization, the tax basis of land assets and the treatment of interests and certain costs
$ (60,494) $ (257,373) $ (269,758)
Operating loss and interest deduction carryforwards 124,606 136,771 133,243
Expense accruals and other 10,516 7,380 11,910
Valuation allowance (127,279) (40,114) (80,614)
Net deferred tax liabilities $ (52,651) $ (153,336) $ (205,219)
Our net deferred tax liability decreased $100.7 million during 2020 primarily due to a change in the tax status of certain of our TRS entities. This was offset by the recording of valuation allowances against $54.4 million of other deferred tax assets. Our net deferred tax liability decreased $51.9 million during 2019 primarily due to the $57.7 million reversal of valuation allowances recorded against the net deferred tax assets of certain of our TRS entities. Our net deferred tax liability decreased $44.8 million during 2018 primarily due to accounting for IRS guidance issued subsequent to the enactment of the 2017 Tax Act, specifically a $23.2 million benefit for the reversal of a valuation allowance on deferred interest carryforwards, and tax losses of certain TRS entities.
Due to uncertainty regarding the realization of certain deferred tax assets, we have established valuation allowances, primarily in connection with the NOL carryforwards related to certain TRSs. The amounts related to NOLs at the TRS entities for 2020, 2019 and 2018 are $83.2 million, $21.2 million and $55.1 million, respectively.
We are subject to corporate-level taxes (“built-in gains tax”) for any asset dispositions during the five year period immediately after the assets were owned by a C corporation (either prior to our REIT election, through stock acquisition or merger). The amount of income potentially subject to built-in gains tax is generally equal to the lesser of the excess of the fair value of the asset over its adjusted tax basis as of the date it became a REIT asset or the actual amount of gain. Some, but not all, future gains could be offset by available NOL carryforwards.
At December 31, 2020, 2019 and 2018, the REIT had NOL carryforwards of $896.4 million, $858.6 million and $910.7 million, respectively. Additionally, the REIT has $10.8 million of federal income tax credits that were carried over from acquisitions. These amounts can be used to offset future taxable income (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. Certain NOL and credit carryforwards are limited as to their utilization by Section 382 of the Code. The remaining REIT carryforwards begin to expire in 2020.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the years ended December 31, 2020 and 2019, the net difference between tax bases and the reported amount of REIT assets and liabilities for federal income tax purposes was approximately $3.6 billion and $3.5 billion, respectively, less than the book bases of those assets and liabilities for financial reporting purposes.
Generally, we are subject to audit under the statute of limitations by the Internal Revenue Service (“IRS”) for the year ended December 31, 2017 and subsequent years and are subject to audit by state taxing authorities for the year ended December 31, 2016 and subsequent years. We are subject to audit generally under the statutes of limitation by the Canada Revenue Agency and provincial authorities with respect to the Canadian entities for the year ended December 31, 2016 and subsequent years. We are also subject to audit in Canada for periods subsequent to the acquisition, and certain prior periods, with respect to entities acquired in 2014 from Holiday Retirement. We are subject to audit in the United Kingdom generally for the periods ended in and subsequent to 2019.
The following table summarizes the activity related to our unrecognized tax benefits:
2020 2019
(In thousands)
Balance as of January 1 $ 12,127 $ 12,344
Additions to tax positions related to prior years 74 178
Subtractions to tax positions related to prior years (6,144) (395)
Balance as of December 31 $ 6,057 $ 12,127
Included in these unrecognized tax benefits of $6.1 million and $12.1 million at December 31, 2020 and 2019, respectively, were $5.3 million and $10.7 million of tax benefits at December 31, 2020 and 2019, respectively, that, if recognized, would reduce our annual effective tax rate. We accrued no interest or penalties related to the unrecognized tax benefits during 2020. We do not expect our unrecognized tax benefits to increase or decrease materially in 2021.
As a part of the transfer pricing structure in the normal course of business, the REIT enters into transactions with certain TRSs, such as leasing transactions, other capital financing and allocation of general and administrative costs, which transactions are intended to comply with Internal Revenue Service and foreign tax authority transfer pricing rules.
NOTE 14-COMMITMENTS AND CONTINGENCIES
From time to time, we are party to various lawsuits, investigations, claims and other legal and regulatory proceedings arising in connection with our business. In certain circumstances, regardless of whether we are a named party in a lawsuit, investigation, claim or other legal or regulatory proceeding, we may be contractually obligated to indemnify, defend and hold harmless our tenants, operators, managers or other third parties against, or may otherwise be responsible for, such actions, proceedings or claims. These claims may include, among other things, professional liability and general liability claims, commercial liability claims, unfair business practices claims and employment claims, as well as regulatory proceedings, including proceedings related to our senior living operations, where we are typically the holder of the applicable healthcare license. These claims may not be fully insured and some may allege large damage amounts.
It is the opinion of management, that the disposition of any such lawsuits, investigations, claims and other legal and regulatory proceedings that are currently pending will not, individually or in the aggregate, have a material adverse effect on us. However, regardless of the merits of a particular action, investigation or claim, we may be forced to expend significant financial resources to defend and resolve these matters. We are unable to predict the ultimate outcome of these lawsuits, investigations, claims and other legal and regulatory proceedings, and if management’s assessment of our liability with respect thereto is incorrect, such actions, investigations and claims could have a material adverse effect on us.
Operating Leases
We lease land, equipment and corporate office space. At inception, we establish an operating lease asset and operating lease liability represented as the present value of future minimum lease payments. As our leases do not provide an implicit rate, we use a discount rate that approximates our incremental borrowing rate available at lease commencement to determine the present value of lease payments. The incremental borrowing rates were adjusted for the length of the individual lease term. The weighted average discount rate and remaining lease term of our leases are 7.25% and 36.7 years, respectively. Operating lease assets and liabilities are not recognized for leases with an initial term of 12 months or less, as these short-term leases are accounted for similar to previous guidance.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Our lease expense primarily consists of ground and corporate office leases. Ground lease expense is included in interest expense and corporate office lease expense is included in general and administrative expenses in the Company’s Consolidated Statements of Operation. For the years ended December 31, 2020 and 2019, we recognized $32.1 million and $32.6 million of expense relating to our leases. For the years ended December 31, 2020 and 2019, cash paid for leases was $25.4 million and $25.8 million, respectively as reported within operating cash outflows in our Consolidated Statements of Cash Flow.
The following table summarizes future minimum lease obligations under non-cancelable ground and other operating leases as of December 31, 2020 (in thousands):
2021 $ 24,363
2022 20,041
2023 19,725
2024 18,866
2025 16,708
Thereafter 654,060
Total undiscounted minimum lease payments 753,763
Less: imputed interest (543,846)
Operating lease liabilities $ 209,917
NOTE 15-EARNINGS PER SHARE
The following table shows the amounts used in computing our basic and diluted earnings per common share:
For the Years Ended December 31,
2020 2019 2018
(In thousands, except per share amounts)
Numerator for basic and diluted earnings per share:
Income from continuing operations
$ 441,185 $ 439,297 $ 415,991
Discontinued operations - - (10)
Net income 441,185 439,297 415,981
Net income attributable to noncontrolling interests 2,036 6,281 6,514
Net income attributable to common stockholders $ 439,149 $ 433,016 $ 409,467
Denominator:
Denominator for basic earnings per share-weighted average shares
373,368 365,977 356,265
Effect of dilutive securities:
Stock options - 391 174
Restricted stock awards 171 527 331
OP unitholder interests 2,964 2,991 2,531
Denominator for diluted earnings per share-adjusted weighted average shares
376,503 369,886 359,301
Basic earnings per share:
Income from continuing operations
$ 1.18 $ 1.20 $ 1.17
Net income attributable to common stockholders 1.18 1.18 1.15
Diluted earnings per share:
Income from continuing operations
$ 1.17 $ 1.19 $ 1.16
Net income attributable to common stockholders 1.17 1.17 1.14
There were 4.0 million, 1.1 million and 3.5 million anti-dilutive options outstanding for the years ended December 31, 2020, 2019 and 2018, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 16-PERMANENT AND TEMPORARY EQUITY
Capital Stock
From time to time, we may sell up to an aggregate of $1.0 billion of our common stock under an “at-the-market” equity offering program (“ATM program”). As of December 31, 2020, we have $755.5 million remaining under our existing ATM program. During the years ended December 31, 2020 and 2019, we sold 1.5 million and 2.7 million shares of our common stock under our ATM program for gross proceeds of $44.88 and $66.75 per share, respectively. During the year ended December 31, 2018, we sold no shares of common stock under our ATM program.
In June 2019, we sold 12.7 million shares of our common stock under a registered public offering for gross proceeds of $62.75 per share. We used the majority of the net proceeds to fund our LGM Acquisition. See “Note 4 - Acquisitions of Real Estate Property” and “Note 6 - Loans Receivable and Investments” for additional information regarding the LGM Acquisition.
Excess Share Provision
In order to preserve our ability to maintain REIT status, our Amended and Restated Certificate of Incorporation (our “Charter”) provides that if a person acquires beneficial ownership of more than 9% of our outstanding common stock or 9.9% of our outstanding preferred stock, the shares that are beneficially owned in excess of such limit are deemed to be excess shares. These shares are automatically deemed transferred to a trust for the benefit of a charitable institution or other qualifying organization selected by our Board of Directors. The trust is entitled to all dividends with respect to the shares, and the trustee may exercise all voting power over the shares.
We have the right to buy the excess shares for a purchase price equal to the lesser of the price per share in the transaction that created the excess shares or the market price on the date we buy the shares, and we may defer payment of the purchase price for the excess shares for up to five years. If we do not purchase the excess shares, the trustee of the trust is required to transfer the excess shares at the direction of the Board of Directors. The owner of the excess shares is entitled to receive the lesser of the proceeds from the sale or the original purchase price for such excess shares, and any additional amounts are payable to the beneficiary of the trust. As of December 31, 2020, there were no shares in the trust.
Our Board of Directors is empowered to grant waivers from the excess share provisions of our Charter.
Accumulated Other Comprehensive Loss
The following is a summary of our accumulated other comprehensive loss:
As of December 31,
2020 2019
(In thousands)
Foreign currency translation $ (51,947) $ (51,743)
Available for sale securities 25,712 27,380
Derivative instruments (28,119) (10,201)
Total accumulated other comprehensive loss $ (54,354) $ (34,564)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Redeemable OP Unitholder and Noncontrolling Interests
The following is a roll-forward of our redeemable OP unitholder and noncontrolling interests for 2020:
Redeemable OP Unitholder Interests Redeemable Noncontrolling Interests Total Redeemable OP Unitholder and Noncontrolling Interests
(In thousands)
Balance as of December 31, 2019 $ 171,178 $ 102,500 $ 273,678
New issuances - 16,593 16,593
Change in valuation (18,638) (8,068) (26,706)
Dispositions - (14,350) (14,350)
Distributions and other (6,247) 1,071 (5,176)
Redemptions (310) (8,239) (8,549)
Balance as of December 31, 2020 $ 145,983 $ 89,507 $ 235,490
NOTE 17-RELATED PARTY TRANSACTIONS
Atria provides comprehensive property management and accounting services with respect to our senior housing communities that Atria operates, for which we pay annual management fees pursuant to long-term management agreements. For the years ended December 31, 2020, 2019 and 2018, we incurred fees to Atria of $55.2 million, $62.1 million and $60.1 million, respectively, the majority of which are recorded within property-level operating expenses in our Consolidated Statements of Income.
We hold a 34% ownership interest in Atria, which entitles us to customary minority rights and protections, as well as the right to appoint two of the six members on the Atria Board of Directors.
As of December 31, 2020, we leased 11 hospital campuses to Ardent pursuant to a single, triple-net master lease agreement. For the years ended December 31, 2020, 2019 and 2018, we recognized rental income from Ardent of $122.6 million, $118.8 million and $114.8 million, respectively, relating to the Ardent master lease.
In June 2018, we made a $200.0 million investment in senior unsecured notes issued by a subsidiary of Ardent at a price of 98.6% of par value. The notes have an effective interest rate of 10.0% and mature in 2026. These marketable debt securities are classified as available for sale and are reflected on our Consolidated Balance Sheets at fair value.
We hold a 9.8% ownership interest in Ardent, which entitles us to customary minority rights and protections, as well as the right to appoint one of the 11 members on the Ardent Board of Directors.
In January 2018, we transitioned the management of 76 private-pay senior housing communities to ESL. These assets, substantially all of which were previously leased by Elmcroft Senior Living (“Elmcroft”) under triple-net leases, are now operated by ESL under a management contract with us and are included in the senior living operations reportable business segment. Upon termination of our lease with Elmcroft, we derecognized our accumulated straight-line receivable balance and offsetting reserve of $75.2 million. For the years ended December 31, 2020, 2019 and 2018, we incurred $5.2 million, $8.2 million and $23.6 million respectively of transaction and integration costs relating to this transaction, net of property-level net assets assumed for no consideration, primarily included in merger-related expenses and deal costs in our Consolidated Statements of Income.
In January 2018, we acquired a 34% ownership interest in ESL, which entitles us to customary minority rights and protections, as well as the right to appoint two of the six members of the ESL Board of Directors. ESL management owns the 66% controlling interest.
ESL provides comprehensive property management and accounting services with respect to our senior housing communities that ESL operates, for which we pay annual management fees pursuant to a management agreement. For the years ended December 31, 2020, 2019 and 2018, we incurred fees to ESL of $15.1 million, $14.6 million and $12.9 million,
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
respectively, the majority of which are recorded within property-level operating expenses in our Consolidated Statements of Income.
NOTE 18-QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Summarized unaudited consolidated quarterly information is provided below:
For the Year Ended December 31, 2020
First
Quarter Second
Quarter Third
Quarter Fourth
Quarter
(In thousands, except per share amounts)
Revenues $ 1,012,054 $ 943,198 $ 918,940 $ 921,165
Income (loss) from continuing operations $ 474,730 $ (159,235) $ 13,737 $ 111,953
Net income (loss) 474,730 (159,235) 13,737 111,953
Net income (loss) attributable to noncontrolling interests 1,613 (2,065) 986 1,502
Net income (loss) attributable to common stockholders $ 473,117 $ (157,170) $ 12,751 $ 110,451
Basic earnings per share:
Income (loss) from continuing operations $ 1.27 $ (0.43) $ 0.04 $ 0.30
Net income (loss) attributable to common stockholders 1.27 (0.42) 0.03 0.29
Diluted earnings per share(1):
Income (loss) from continuing operations $ 1.26 $ (0.43) $ 0.04 $ 0.30
Net income (loss) attributable to common stockholders 1.26 (0.42) 0.03 0.29
Dividends declared per common share
$ 0.7925 $ 0.4500 $ 0.4500 $ 0.4500
(1) Potential common shares are not included in the computation of diluted earnings per share when a loss from continuing operations exists, as the effect would be an antidilutive per share amount.
For the Year Ended December 31, 2019
First
Quarter Second
Quarter Third
Quarter Fourth
Quarter
(In thousands, except per share amounts)
Revenues $ 942,874 $ 950,717 $ 983,155 $ 996,004
Income from continuing operations
$ 127,588 $ 211,898 $ 86,918 $ 12,893
Net income 127,588 211,898 86,918 12,893
Net income attributable to noncontrolling interests 1,803 1,369 1,659 1,450
Net income attributable to common stockholders $ 125,785 $ 210,529 $ 85,259 $ 11,443
Basic earnings per share:
Income from continuing operations
$ 0.36 $ 0.59 $ 0.23 $ 0.03
Net income attributable to common stockholders 0.35 0.58 0.23 0.03
Diluted earnings per share:
Income from continuing operations
$ 0.35 $ 0.58 $ 0.23 $ 0.03
Net income attributable to common stockholders 0.35 0.58 0.23 0.03
Dividends declared per common share $ 0.7925 $ 0.7925 $ 0.7925 $ 0.7925
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 19-SEGMENT INFORMATION
As of December 31, 2020, we operated through three reportable business segments: triple-net leased properties, senior living operations and office operations. In our triple-net leased properties segment, we invest in and own senior housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. In our senior living operations segment, we invest in senior housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease and manage MOBs and research and innovation centers throughout the United States. Information provided for “all other” includes income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to any of our three reportable business segments. Assets included in “all other” consist primarily of corporate assets, including cash, restricted cash, loans receivable and investments, and miscellaneous accounts receivable.
Our chief operating decision makers evaluate performance of the combined properties in each reportable business segment and determine how to allocate resources to those segments, in significant part, based on segment NOI and related measures. We define segment NOI as total revenues, less interest and other income, property-level operating expenses and office building services costs. We consider segment NOI useful because it allows investors, analysts and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies between periods on a consistent basis. In order to facilitate a clear understanding of our historical consolidated operating results, segment NOI should be examined in conjunction with net income attributable to common stockholders as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Annual Report on Form 10-K.
Interest expense, depreciation and amortization, general, administrative and professional fees, income tax expense and other non-property-specific revenues and expenses are not allocated to individual reportable business segments for purposes of assessing segment performance. There are no intersegment sales or transfers.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Summary information by reportable business segment is as follows:
For the Year Ended December 31, 2020
Triple-Net
Leased
Properties Senior
Living
Operations Office
Operations All
Other Total
(In thousands)
Revenues:
Rental income $ 695,265 $ - $ 799,627 $ - $ 1,494,892
Resident fees and services - 2,197,160 - - 2,197,160
Office building and other services revenue - - 8,675 6,516 15,191
Income from loans and investments - - - 80,505 80,505
Interest and other income - - - 7,609 7,609
Total revenues $ 695,265 $ 2,197,160 $ 808,302 $ 94,630 $ 3,795,357
Total revenues $ 695,265 $ 2,197,160 $ 808,302 $ 94,630 $ 3,795,357
Less:
Interest and other income - - - 7,609 7,609
Property-level operating expenses 22,160 1,658,671 256,612 - 1,937,443
Office building services costs - - 2,315 - 2,315
Segment NOI $ 673,105 $ 538,489 $ 549,375 $ 87,021 1,847,990
Interest and other income 7,609
Interest expense (469,541)
Depreciation and amortization (1,109,763)
General, administrative and professional fees
(130,158)
Loss on extinguishment of debt, net (10,791)
Merger-related expenses and deal costs (29,812)
Allowance on loans receivable and investments (24,238)
Other (707)
Income from unconsolidated entities 1,844
Gain on real estate dispositions 262,218
Income tax benefit 96,534
Income from continuing operations 441,185
Net income 441,185
Net income attributable to noncontrolling interests 2,036
Net income attributable to common stockholders $ 439,149
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2019
Triple-Net
Leased
Properties Senior
Living
Operations Office
Operations All
Other Total
(In thousands)
Revenues:
Rental income $ 780,898 $ - $ 828,978 $ - $ 1,609,876
Resident fees and services
- 2,151,533 - - 2,151,533
Office building and other services revenue - - 7,747 3,409 11,156
Income from loans and investments - - - 89,201 89,201
Interest and other income - - - 10,984 10,984
Total revenues $ 780,898 $ 2,151,533 $ 836,725 $ 103,594 $ 3,872,750
Total revenues $ 780,898 $ 2,151,533 $ 836,725 $ 103,594 $ 3,872,750
Less:
Interest and other income - - - 10,984 10,984
Property-level operating expenses 26,561 1,521,398 260,249 - 1,808,208
Office building services costs - - 2,319 - 2,319
Segment NOI
$ 754,337 $ 630,135 $ 574,157 $ 92,610 2,051,239
Interest and other income 10,984
Interest expense (451,662)
Depreciation and amortization
(1,045,620)
General, administrative and professional fees
(158,726)
Loss on extinguishment of debt, net (41,900)
Merger-related expenses and deal costs (15,235)
Other 10,339
Loss from unconsolidated entities (2,454)
Gain on real estate dispositions 26,022
Income tax benefit 56,310
Income from continuing operations 439,297
Net income 439,297
Net income attributable to noncontrolling interests 6,281
Net income attributable to common stockholders $ 433,016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Year Ended December 31, 2018
Triple-Net
Leased
Properties Senior
Living
Operations Office
Operations All
Other Total
(In thousands)
Revenues:
Rental income $ 737,796 $ - $ 776,011 $ - $ 1,513,807
Resident fees and services - 2,069,477 - - 2,069,477
Office building and other services revenue 2,522 - 7,592 3,302 13,416
Income from loans and investments - - - 124,218 124,218
Interest and other income - - - 24,892 24,892
Total revenues $ 740,318 $ 2,069,477 $ 783,603 $ 152,412 $ 3,745,810
Total revenues $ 740,318 $ 2,069,477 $ 783,603 $ 152,412 $ 3,745,810
Less:
Interest and other income - - - 24,892 24,892
Property-level operating expenses - 1,446,201 243,679 - 1,689,880
Office building services costs - - 1,418 - 1,418
Segment NOI $ 740,318 $ 623,276 $ 538,506 $ 127,520 2,029,620
Interest and other income 24,892
Interest expense (442,497)
Depreciation and amortization (919,639)
General, administrative and professional fees
(145,978)
Loss on extinguishment of debt, net (58,254)
Merger-related expenses and deal costs (30,547)
Other (72,772)
Loss from unconsolidated entities (55,034)
Gain on real estate dispositions 46,247
Income tax benefit 39,953
Income from continuing operations 415,991
Discontinued operations (10)
Net income 415,981
Net income attributable to noncontrolling interests 6,514
Net income attributable to common stockholders $ 409,467
Assets by reportable business segment are as follows:
As of December 31,
2020 2019
(Dollars in thousands)
Assets:
Triple-net leased properties $ 5,147,503 21.6 % $ 6,381,657 25.8 %
Senior living operations 10,653,428 44.5 10,142,023 41.1
Office operations 6,709,602 28.0 7,173,401 29.1
All other assets 1,418,871 5.9 995,127 4.0
Total assets $ 23,929,404 100.0 % $ 24,692,208 100.0 %
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Capital expenditures, including investments in real estate property and development project expenditures, by reportable business segment are as follows:
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Capital expenditures:
Triple-net leased properties $ 42,930 $ 55,429 $ 58,744
Senior living operations 191,891 944,214 337,750
Office operations 372,475 519,129 332,147
Total capital expenditures $ 607,296 $ 1,518,772 $ 728,641
Our portfolio of properties and mortgage loan and other investments are located in the United States, Canada and the United Kingdom. Revenues are attributed to an individual country based on the location of each property. Geographic information regarding our operations is as follows:
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Revenues:
United States $ 3,381,357 $ 3,578,341 $ 3,524,875
Canada 389,205 266,946 192,350
United Kingdom 24,795 27,463 28,585
Total revenues $ 3,795,357 $ 3,872,750 $ 3,745,810
As of December 31,
2020 2019
(In thousands)
Net real estate property:
United States $ 17,303,816 $ 18,636,838
Canada 2,983,924 2,830,850
United Kingdom 262,295 266,885
Total net real estate property $ 20,550,035 $ 21,734,573
VENTAS, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
For the Years Ended December 31,
2020 2019 2018
(In thousands)
Reconciliation of real estate:
Carrying cost:
Balance at beginning of period $ 27,133,514 $ 24,973,983 $ 24,712,478
Additions during period:
Acquisitions 249,290 1,941,018 318,895
Capital expenditures 485,479 575,624 446,490
Deductions during period:
Foreign currency translation 80,302 107,508 (105,192)
Other(1)
(1,098,143) (464,619) (398,688)
Balance at end of period $ 26,850,442 $ 27,133,514 $ 24,973,983
Accumulated depreciation:
Balance at beginning of period $ 6,200,230 $ 5,492,310 $ 4,802,917
Additions during period:
Depreciation expense 809,067 811,936 791,882
Dispositions:
Sales and/or transfers to assets held for sale (82,559) (116,771) (84,819)
Foreign currency translation 40,675 12,755 (17,670)
Balance at end of period $ 6,967,413 $ 6,200,230 $ 5,492,310
(1)Other may include sales, transfers to assets held for sale and impairments.
VENTAS, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2020
(Dollars in thousands)
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
Is Computed
SPECIALTY HOSPITALS
Rehabilitation Hospital of Southern Arizona Tucson AZ $ - $ 770 $ 25,589 $ - $ 770 $ 25,589 $ 26,359 $ 7,121 $ 19,238 1992 2011 35 years
Kindred Hospital - Brea Brea CA - 3,144 2,611 - 3,144 2,611 5,755 1,675 4,080 1990 1995 40 years
Kindred Hospital - Ontario Ontario CA - 523 2,988 - 523 2,988 3,511 3,228 283 1950 1994 25 years
Kindred Hospital - San Diego San Diego CA - 670 11,764 - 670 11,764 12,434 11,957 477 1965 1994 25 years
Kindred Hospital - San Francisco Bay Area San Leandro CA - 2,735 5,870 - 2,735 5,870 8,605 6,205 2,400 1962 1993 25 years
Tustin Rehabilitation Hospital Tustin CA - 2,810 25,248 - 2,810 25,248 28,058 7,162 20,896 1991 2011 35 years
Kindred Hospital - Westminster Westminster CA - 727 7,384 - 727 7,384 8,111 7,562 549 1973 1993 20 years
Kindred Hospital - Denver Denver CO - 896 6,367 - 896 6,367 7,263 6,712 551 1963 1994 20 years
Kindred Hospital - South Florida - Coral Gables Coral Gables FL - 1,071 5,348 (1,000) 71 5,348 5,419 5,290 129 1956 1992 30 years
Kindred Hospital - South Florida Ft. Lauderdale Fort Lauderdale FL - 1,758 14,080 - 1,758 14,080 15,838 14,171 1,667 1969 1989 30 years
Kindred Hospital - North Florida Green Cove Springs FL - 145 4,613 - 145 4,613 4,758 4,683 75 1956 1994 20 years
Kindred Hospital - South Florida - Hollywood Hollywood FL - 605 5,229 - 605 5,229 5,834 5,234 600 1937 1995 20 years
Kindred Hospital - Bay Area St. Petersburg St. Petersburg FL - 1,401 16,706 - 1,401 16,706 18,107 15,181 2,926 1968 1997 40 years
Kindred Hospital - Central Tampa Tampa FL - 2,732 7,676 - 2,732 7,676 10,408 5,824 4,584 1970 1993 40 years
Kindred Hospital - Chicago (North Campus) Chicago IL - 1,583 19,980 - 1,583 19,980 21,563 20,142 1,421 1949 1995 25 years
Kindred - Chicago - Lakeshore Chicago IL - 1,513 9,525 - 1,513 9,525 11,038 9,483 1,555 1995 1976 20 years
Kindred Hospital - Chicago (Northlake Campus) Northlake IL - 850 6,498 - 850 6,498 7,348 6,726 622 1960 1991 30 years
Kindred Hospital - Sycamore Sycamore IL - 77 8,549 - 77 8,549 8,626 8,456 170 1949 1993 20 years
Kindred Hospital - Indianapolis Indianapolis IN - 985 3,801 - 985 3,801 4,786 3,880 906 1955 1993 30 years
Kindred Hospital - Louisville Louisville KY - 3,041 12,279 - 3,041 12,279 15,320 12,600 2,720 1964 1995 20 years
Kindred Hospital - St. Louis St. Louis MO - 1,126 2,087 - 1,126 2,087 3,213 2,057 1,156 1984 1991 40 years
Kindred Hospital - Las Vegas (Sahara) Las Vegas NV - 1,110 2,177 - 1,110 2,177 3,287 1,590 1,697 1980 1994 40 years
Lovelace Rehabilitation Hospital Albuquerque NM - 401 17,796 1,068 401 18,864 19,265 3,306 15,959 1989 2015 36 years
Kindred Hospital - Albuquerque Albuquerque NM - 11 4,253 - 11 4,253 4,264 3,206 1,058 1985 1993 40 years
Kindred Hospital - Greensboro Greensboro NC - 1,010 7,586 - 1,010 7,586 8,596 7,788 808 1964 1994 20 years
University Hospitals Rehabilitation Hospital Beachwood OH - 1,800 16,444 - 1,800 16,444 18,244 3,646 14,598 2013 2013 35 years
Kindred Hospital - Philadelphia Philadelphia PA - 135 5,223 - 135 5,223 5,358 3,953 1,405 1960 1995 35 years
Kindred Hospital - Chattanooga Chattanooga TN - 756 4,415 - 756 4,415 5,171 4,344 827 1975 1993 22 years
Ardent Harrington Cancer Center Amarillo TX - 974 25,304 - 974 25,304 26,278 120 26,158 2020 2020 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
Is Computed
Kindred Hospital - Arlington Arlington TX - 458 12,426 - 458 12,426 12,884 172 12,712 1970 2020 35 years
Rehabilitation Hospital of Dallas Dallas TX - 2,318 38,702 - 2,318 38,702 41,020 7,178 33,842 2009 2015 35 years
Baylor Institute for Rehabilitation - Ft. Worth TX Fort Worth TX - 2,071 16,018 - 2,071 16,018 18,089 3,201 14,888 2008 2015 35 years
Kindred Hospital - Tarrant County (Fort Worth Southwest) Fort Worth TX - 2,342 7,458 - 2,342 7,458 9,800 7,508 2,292 1987 1986 20 years
Rehabilitation Hospital The Vintage Houston TX - 1,838 34,832 - 1,838 34,832 36,670 6,735 29,935 2012 2015 35 years
Kindred Hospital (Houston Northwest) Houston TX - 1,699 6,788 - 1,699 6,788 8,487 6,231 2,256 1986 1985 40 years
Kindred Hospital - Houston Houston TX - 33 7,062 - 33 7,062 7,095 6,756 339 1972 1994 20 years
Select Rehabilitation - San Antonio TX San Antonio TX - 1,859 18,301 - 1,859 18,301 20,160 3,591 16,569 2010 2015 35 years
Kindred Hospital - San Antonio San Antonio TX - 249 11,413 - 249 11,413 11,662 10,579 1,083 1981 1993 30 years
TOTAL FOR SPECIALTY HOSPITALS - 48,226 440,390 68 47,226 441,458 488,684 245,253 243,431
SKILLED NURSING FACILITIES
Englewood Post Acute and Rehabilitation Englewood CO - 241 2,180 194 241 2,374 2,615 2,206 409 1960 1995 30 years
Brookdale Lisle SNF Lisle IL - 730 9,270 735 910 9,825 10,735 3,696 7,039 1990 2009 35 years
Lopatcong Center Phillipsburg NJ - 1,490 12,336 - 1,490 12,336 13,826 7,207 6,619 1982 2004 30 years
The Belvedere Chester PA - 822 7,203 - 822 7,203 8,025 4,200 3,825 1899 2004 30 years
Pennsburg Manor Pennsburg PA - 1,091 7,871 - 1,091 7,871 8,962 4,631 4,331 1982 2004 30 years
Chapel Manor Philadelphia PA - 1,595 13,982 1,358 1,595 15,340 16,935 9,511 7,424 1948 2004 30 years
Wayne Center Strafford PA - 662 6,872 850 662 7,722 8,384 4,836 3,548 1897 2004 30 years
Everett Rehabilitation & Care Everett WA - 2,750 27,337 (7,916) 2,750 19,421 22,171 7,707 14,464 1995 2011 35 years
Beacon Hill Rehabilitation Longview WA - 145 2,563 171 145 2,734 2,879 2,670 209 1955 1992 29 years
Columbia Crest Care & Rehabilitation Center Moses Lake WA - 660 17,439 - 660 17,439 18,099 5,080 13,019 1972 2011 35 years
Lake Ridge Solana Alzheimer's Care Center Moses Lake WA - 660 8,866 - 660 8,866 9,526 2,669 6,857 1988 2011 35 years
Rainier Rehabilitation Puyallup WA - 520 4,780 305 520 5,085 5,605 3,794 1,811 1986 1991 40 years
Logan Center Logan WV - 300 12,959 - 300 12,959 13,259 3,717 9,542 1987 2011 35 years
Ravenswood Healthcare Center Ravenswood WV - 320 12,710 - 320 12,710 13,030 3,661 9,369 1987 2011 35 years
Valley Center South Charleston WV - 750 24,115 - 750 24,115 24,865 7,004 17,861 1987 2011 35 years
White Sulphur White Sulphur Springs WV - 250 13,055 - 250 13,055 13,305 3,781 9,524 1987 2011 35 years
TOTAL FOR SKILLED NURSING FACILITIES - 12,986 183,538 (4,303) 13,166 179,055 192,221 76,370 115,851
GENERAL ACUTE CARE
Lovelace Medical Center Downtown Albuquerque NM - 9,840 154,017 9,763 9,928 163,692 173,620 30,465 143,155 1968 2015 33.5 years
Lovelace Westside Hospital Albuquerque NM - 10,107 13,576 2,133 10,107 15,709 25,816 6,742 19,074 1984 2015 20.5 years
Lovelace Women's Hospital Albuquerque NM - 7,236 175,142 20,075 7,236 195,217 202,453 24,062 178,391 1983 2015 47 years
Roswell Regional Hospital Roswell NM - 2,560 41,125 2,186 2,560 43,311 45,871 5,825 40,046 2007 2015 47 years
Hillcrest Hospital Claremore Claremore OK - 3,623 23,864 638 3,623 24,502 28,125 4,108 24,017 1955 2015 40 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
Is Computed
Bailey Medical Center Owasso OK - 4,964 7,059 155 4,964 7,214 12,178 1,826 10,352 2006 2015 32.5 years
Hillcrest Medical Center Tulsa OK - 28,319 215,959 12,718 28,319 228,677 256,996 40,988 216,008 1928 2015 34 years
Hillcrest Hospital South Tulsa OK - 17,026 112,231 1,016 17,026 113,247 130,273 16,857 113,416 1999 2015 40 years
SouthCreek Medical Plaza Tulsa OK - 2,943 17,860 600 2,943 18,460 21,403 1,451 19,952 2003 2018 35 years
Baptist St. Anthony's Hospital Amarillo TX - 13,779 357,733 26,812 13,015 385,309 398,324 49,670 348,654 1967 2015 44.5 years
Spire Hull and East Riding Hospital Anlaby HUL - 3,194 81,613 (10,348) 2,804 71,655 74,459 9,881 64,578 2010 2014 50 years
Spire Fylde Coast Hospital Blackpool LAN - 2,446 28,896 (3,825) 2,147 25,370 27,517 3,550 23,967 1980 2014 50 years
Spire Clare Park Hospital Farnham SUR - 6,263 26,119 (3,951) 5,499 22,932 28,431 3,336 25,095 2009 2014 50 years
TOTAL FOR GENERAL ACUTE CARE - 112,300 1,255,194 57,972 110,171 1,315,295 1,425,466 198,761 1,226,705
BROOKDALE SENIOR HOUSING COMMUNITIES
Brookdale Chandler Ray Road Chandler AZ - 2,000 6,538 178 2,000 6,716 8,716 2,070 6,646 1998 2011 35 years
Brookdale Springs Mesa Mesa AZ - 2,747 24,918 2,720 2,751 27,634 30,385 13,025 17,360 1986 2005 35 years
Brookdale East Arbor Mesa AZ - 655 6,998 489 711 7,431 8,142 3,582 4,560 1998 2005 35 years
Brookdale Oro Valley Oro Valley AZ - 666 6,169 - 666 6,169 6,835 3,123 3,712 1998 2005 35 years
Brookdale Peoria Peoria AZ - 598 4,872 723 659 5,534 6,193 2,603 3,590 1998 2005 35 years
Brookdale Tempe Tempe AZ - 611 4,066 150 611 4,216 4,827 2,093 2,734 1997 2005 35 years
Brookdale East Tucson Tucson AZ - 506 4,745 50 556 4,745 5,301 2,406 2,895 1998 2005 35 years
Brookdale Anaheim Anaheim CA - 2,464 7,908 95 2,464 8,003 10,467 3,833 6,634 1977 2005 35 years
Brookdale Redwood City Redwood City CA - 7,669 66,691 422 7,719 67,063 74,782 34,159 40,623 1988 2005 35 years
Brookdale San Jose San Jose CA - 6,240 66,329 14,386 6,250 80,705 86,955 36,374 50,581 1987 2005 35 years
Brookdale San Marcos San Marcos CA - 4,288 36,204 235 4,314 36,413 40,727 18,666 22,061 1987 2005 35 years
Brookdale Tracy Tracy CA - 1,110 13,296 521 1,110 13,817 14,927 6,173 8,754 1986 2005 35 years
Brookdale Boulder Creek Boulder CO - 1,290 20,683 782 1,414 21,341 22,755 6,152 16,603 1985 2011 35 years
Brookdale Vista Grande Colorado Springs CO - 715 9,279 - 715 9,279 9,994 4,698 5,296 1997 2005 35 years
Brookdale El Camino Pueblo CO - 840 9,403 76 874 9,445 10,319 4,773 5,546 1997 2005 35 years
Brookdale Farmington Farmington CT - 3,995 36,310 958 4,340 36,923 41,263 18,531 22,732 1984 2005 35 years
Brookdale South Windsor South Windsor CT - 2,187 12,682 88 2,198 12,759 14,957 6,097 8,860 1999 2004 35 years
Brookdale Chatfield West Hartford CT - 2,493 22,833 23,729 2,493 46,562 49,055 15,041 34,014 1989 2005 35 years
Brookdale Bonita Springs Bonita Springs FL - 1,540 10,783 1,275 1,594 12,004 13,598 5,518 8,080 1989 2005 35 years
Brookdale West Boynton Beach Boynton Beach FL - 2,317 16,218 1,353 2,347 17,541 19,888 8,137 11,751 1999 2005 35 years
Brookdale Deer Creek AL/MC Deerfield Beach FL - 1,399 9,791 18 1,399 9,809 11,208 5,091 6,117 1999 2005 35 years
Brookdale Fort Myers The Colony Fort Myers FL - 1,510 7,862 398 1,510 8,260 9,770 2,333 7,437 1996 2011 35 years
Brookdale Avondale Jacksonville FL - 860 16,745 140 860 16,885 17,745 4,762 12,983 1997 2011 35 years
Brookdale Crown Point Jacksonville FL - 1,300 9,659 611 1,300 10,270 11,570 2,888 8,682 1997 2011 35 years
Brookdale Jensen Beach Jensen Beach FL - 1,831 12,820 2,100 1,831 14,920 16,751 6,472 10,279 1999 2005 35 years
Brookdale Ormond Beach West Ormond Beach FL - 1,660 9,738 27 1,660 9,765 11,425 2,820 8,605 1997 2011 35 years
Brookdale Palm Coast Palm Coast FL - 470 9,187 235 470 9,422 9,892 2,669 7,223 1997 2011 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
Is Computed
Brookdale Pensacola Pensacola FL - 633 6,087 11 633 6,098 6,731 3,086 3,645 1998 2005 35 years
Brookdale Rotonda Rotonda West FL - 1,740 4,331 282 1,740 4,613 6,353 1,536 4,817 1997 2011 35 years
Brookdale Centre Pointe Boulevard Tallahassee FL - 667 6,168 - 667 6,168 6,835 3,123 3,712 1998 2005 35 years
Brookdale Tavares Tavares FL - 280 15,980 69 280 16,049 16,329 4,522 11,807 1997 2011 35 years
Brookdale West Melbourne MC West Melbourne FL - 586 5,481 - 586 5,481 6,067 2,775 3,292 2000 2005 35 years
Brookdale West Palm Beach West Palm Beach FL - 3,758 33,072 3,762 3,935 36,657 40,592 17,139 23,453 1990 2005 35 years
Brookdale Winter Haven MC Winter Haven FL - 232 3,006 - 232 3,006 3,238 1,522 1,716 1997 2005 35 years
Brookdale Winter Haven AL Winter Haven FL - 438 5,549 183 438 5,732 6,170 2,831 3,339 1997 2005 35 years
Brookdale Twin Falls Twin Falls ID - 703 6,153 1,099 718 7,237 7,955 3,321 4,634 1997 2005 35 years
Brookdale Lake Shore Drive Chicago IL - 11,057 107,517 7,721 11,089 115,206 126,295 56,926 69,369 1990 2005 35 years
Brookdale Lake View Chicago IL - 3,072 26,668 - 3,072 26,668 29,740 13,650 16,090 1950 2005 35 years
Brookdale Des Plaines Des Plaines IL - 6,871 60,165 (41) 6,805 60,190 66,995 30,777 36,218 1993 2005 35 years
Brookdale Hoffman Estates Hoffman Estates IL - 3,886 44,130 4,702 4,273 48,445 52,718 22,773 29,945 1987 2005 35 years
Brookdale Lisle IL/AL Lisle IL 33,000 7,953 70,400 - 7,953 70,400 78,353 35,944 42,409 1990 2005 35 years
Brookdale Northbrook Northbrook IL - 1,988 39,762 854 2,076 40,528 42,604 19,573 23,031 1999 2004 35 years
Brookdale Hawthorn Lakes IL/AL Vernon Hills IL - 4,439 35,044 814 4,480 35,817 40,297 18,338 21,959 1987 2005 35 years
Brookdale Hawthorn Lakes AL Vernon Hills IL - 1,147 10,041 401 1,175 10,414 11,589 5,163 6,426 1999 2005 35 years
Brookdale Richmond Richmond IN - 495 4,124 359 555 4,423 4,978 2,158 2,820 1998 2005 35 years
Brookdale Derby Derby KS - 440 4,422 - 440 4,422 4,862 1,299 3,563 1994 2011 35 years
Brookdale Leawood State Line Leawood KS - 117 5,127 261 117 5,388 5,505 2,631 2,874 2000 2005 35 years
Brookdale Salina Fairdale Salina KS - 300 5,657 150 353 5,754 6,107 1,681 4,426 1996 2011 35 years
Brookdale Topeka Topeka KS - 370 6,825 - 370 6,825 7,195 3,455 3,740 2000 2005 35 years
Brookdale Cushing Park Framingham MA - 5,819 33,361 3,996 5,872 37,304 43,176 17,179 25,997 1999 2004 35 years
Brookdale Cape Cod Hyannis MA - 1,277 9,063 237 1,277 9,300 10,577 4,193 6,384 1999 2005 35 years
Brookdale Quincy Bay Quincy MA - 6,101 57,862 3,713 6,216 61,460 67,676 29,724 37,952 1986 2005 35 years
Brookdale Delta MC Delta Township MI - 730 11,471 119 730 11,590 12,320 3,298 9,022 1998 2011 35 years
Brookdale Delta AL Delta Township MI - 820 3,313 30 820 3,343 4,163 1,327 2,836 1998 2011 35 years
Brookdale Farmington Hills North Farmington Hills MI - 580 10,497 91 580 10,588 11,168 3,369 7,799 1994 2011 35 years
Brookdale Farmington Hills North II Farmington Hills MI - 700 10,246 - 700 10,246 10,946 3,394 7,552 1994 2011 35 years
Brookdale Meridian AL Haslett MI - 1,340 6,134 288 1,367 6,395 7,762 1,910 5,852 1998 2011 35 years
Brookdale Grand Blanc MC Holly MI - 450 12,373 105 450 12,478 12,928 3,572 9,356 1998 2011 35 years
Brookdale Grand Blanc AL Holly MI - 620 14,627 - 620 14,627 15,247 4,211 11,036 1998 2011 35 years
Brookdale Northville Northville MI - 407 6,068 149 407 6,217 6,624 3,082 3,542 1996 2005 35 years
Brookdale Troy MC Troy MI - 630 17,178 - 630 17,178 17,808 4,900 12,908 1998 2011 35 years
Brookdale Troy AL Troy MI - 950 12,503 270 950 12,773 13,723 3,786 9,937 1998 2011 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Brookdale Utica AL Utica MI - 1,142 11,808 691 1,142 12,499 13,641 6,096 7,545 1996 2005 35 years
Brookdale Utica MC Utica MI - 700 8,657 351 700 9,008 9,708 2,712 6,996 1995 2011 35 years
Brookdale Eden Prairie Eden Prairie MN - 301 6,228 874 332 7,071 7,403 3,299 4,104 1998 2005 35 years
Brookdale Faribault Faribault MN - 530 1,085 - 530 1,085 1,615 378 1,237 1997 2011 35 years
Brookdale Inver Grove Heights Inver Grove Heights MN - 253 2,655 - 253 2,655 2,908 1,344 1,564 1997 2005 35 years
Brookdale Mankato Mankato MN - 490 410 - 490 410 900 262 638 1996 2011 35 years
Brookdale Edina Minneapolis MN 15,040 3,621 33,141 22,975 3,621 56,116 59,737 21,058 38,679 1998 2005 35 years
Brookdale North Oaks North Oaks MN - 1,057 8,296 1,312 1,122 9,543 10,665 4,421 6,244 1998 2005 35 years
Brookdale Plymouth Plymouth MN - 679 8,675 801 823 9,332 10,155 4,487 5,668 1998 2005 35 years
Brookdale Willmar Wilmar MN - 470 4,833 - 470 4,833 5,303 1,396 3,907 1997 2011 35 years
Brookdale Winona Winona MN - 800 1,390 - 800 1,390 2,190 803 1,387 1997 2011 35 years
Brookdale West County Ballwin MO - 3,100 35,074 323 3,113 35,384 38,497 7,232 31,265 2012 2014 35 years
Brookdale Evesham Voorhees Township NJ - 3,158 29,909 343 3,158 30,252 33,410 15,164 18,246 1987 2005 35 years
Brookdale Westampton Westampton NJ - 881 4,741 829 881 5,570 6,451 2,563 3,888 1997 2005 35 years
Brookdale Santa Fe Santa Fe NM - - 28,178 - - 28,178 28,178 14,060 14,118 1986 2005 35 years
Brookdale Kenmore Buffalo NY - 1,487 15,170 1,117 1,487 16,287 17,774 7,774 10,000 1995 2005 35 years
Brookdale Clinton IL Clinton NY - 947 7,528 643 961 8,157 9,118 3,911 5,207 1991 2005 35 years
Brookdale Manlius Manlius NY - 890 28,237 658 190 29,595 29,785 8,172 21,613 1994 2011 35 years
Brookdale Pittsford Pittsford NY - 611 4,066 16 611 4,082 4,693 2,064 2,629 1997 2005 35 years
Brookdale East Niskayuna Schenectady NY - 1,021 8,333 715 1,021 9,048 10,069 4,374 5,695 1997 2005 35 years
Brookdale Niskayuna Schenectady NY - 1,884 16,103 30 1,884 16,133 18,017 8,160 9,857 1996 2005 35 years
Brookdale Summerfield Syracuse NY - 1,132 11,434 278 1,246 11,598 12,844 5,805 7,039 1991 2005 35 years
Brookdale Williamsville Williamsville NY - 839 3,841 60 839 3,901 4,740 1,960 2,780 1997 2005 35 years
Brookdale Cary Cary NC - 724 6,466 - 724 6,466 7,190 3,274 3,916 1997 2005 35 years
Brookdale Falling Creek Hickory NC - 330 10,981 - 330 10,981 11,311 3,146 8,165 1997 2011 35 years
Brookdale Winston-Salem Winston-Salem NC - 368 3,497 250 368 3,747 4,115 1,808 2,307 1997 2005 35 years
Brookdale Alliance Alliance OH - 392 6,283 49 435 6,289 6,724 3,185 3,539 1998 2005 35 years
Brookdale Austintown Austintown OH - 151 3,087 729 181 3,786 3,967 1,694 2,273 1999 2005 35 years
Brookdale Barberton Barberton OH - 440 10,884 - 440 10,884 11,324 3,120 8,204 1997 2011 35 years
Brookdale Beavercreek Beavercreek OH - 587 5,381 - 587 5,381 5,968 2,724 3,244 1998 2005 35 years
Brookdale Centennial Park Clayton OH - 630 6,477 - 630 6,477 7,107 1,924 5,183 1997 2011 35 years
Brookdale Westerville Columbus OH - 267 3,600 - 267 3,600 3,867 1,823 2,044 1999 2005 35 years
Brookdale Greenville AL/MC Greenville OH - 490 4,144 55 545 4,144 4,689 1,376 3,313 1997 2011 35 years
Brookdale Lakeview Crossing Groveport OH - 705 11,103 - 705 11,103 11,808 150 11,658 1998 2020 35 years
Brookdale Camelot Medina (North) Medina OH - 263 6,602 - 263 6,602 6,865 108 6,757 1995 2020 35 years
Brookdale Medina South Medina OH - 802 22,124 - 802 22,124 22,926 293 2000 2020 35 years
Brookdale Mount Vernon Mount Vernon OH - 854 22,882 - 854 22,882 23,736 298 2002 2020 35 years
Brookdale Salem AL (OH) Salem OH - 634 4,659 - 634 4,659 5,293 2,359 2,934 1998 2005 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Brookdale Springdale Springdale OH - 1,140 9,134 656 1,228 9,702 10,930 2,702 8,228 1997 2011 35 years
Brookdale Zanesville Zanesville OH - 833 12,034 - 833 12,034 12,867 166 1996 2020 35 years
Brookdale Bartlesville South Bartlesville OK - 250 10,529 35 285 10,529 10,814 2,995 7,819 1997 2011 35 years
Brookdale Broken Arrow Broken Arrow OK - 940 6,312 6,435 1,898 11,789 13,687 3,851 9,836 1996 2011 35 years
Brookdale Forest Grove Forest Grove OR - 2,320 9,633 (4,180) 2,320 5,453 7,773 2,913 4,860 1994 2011 35 years
Brookdale Mt. Hood Gresham OR - 2,410 9,093 (1,356) 319 9,828 10,147 2,845 7,302 1988 2011 35 years
Brookdale McMinnville Town Center McMinnville OR 119 1,230 7,561 - 1,230 7,561 8,791 2,583 6,208 1989 2011 35 years
Brookdale Denton North Denton TX - 1,750 6,712 43 1,750 6,755 8,505 1,974 6,531 1996 2011 35 years
Brookdale Ennis Ennis TX - 460 3,284 - 460 3,284 3,744 1,026 2,718 1996 2011 35 years
Brookdale Kerrville Kerrville TX - 460 8,548 120 460 8,668 9,128 2,459 6,669 1997 2011 35 years
Brookdale Medical Center Whitby San Antonio TX - 1,400 10,051 (5,953) 1,400 4,098 5,498 2,794 2,704 1997 2011 35 years
Brookdale Western Hills Temple TX - 330 5,081 230 330 5,311 5,641 1,568 4,073 1997 2011 35 years
Brookdale Salem AL (VA) Salem VA - 1,900 16,219 - 1,900 16,219 18,119 8,097 10,022 1998 2011 35 years
Brookdale Alderwood Lynnwood WA - 1,219 9,573 810 1,239 10,363 11,602 4,868 6,734 1999 2005 35 years
Brookdale Puyallup South Puyallup WA - 1,055 8,298 686 1,055 8,984 10,039 4,201 5,838 1998 2005 35 years
Brookdale Richland Richland WA - 960 23,270 370 960 23,640 24,600 6,839 17,761 1990 2011 35 years
Brookdale Park Place Spokane WA - 1,622 12,895 910 1,622 13,805 15,427 6,700 8,727 1915 2005 35 years
Brookdale Allenmore AL Tacoma WA - 620 16,186 971 671 17,106 17,777 4,804 12,973 1997 2011 35 years
Brookdale Allenmore - IL Tacoma WA - 1,710 3,326 (622) 307 4,107 4,414 1,599 2,815 1988 2011 35 years
Brookdale Yakima Yakima WA - 860 15,276 119 891 15,364 16,255 4,499 11,756 1998 2011 35 years
Brookdale Kenosha Kenosha WI - 551 5,431 3,297 608 8,671 9,279 3,836 5,443 2000 2005 35 years
Brookdale LaCrosse MC La Crosse WI - 621 4,056 1,126 621 5,182 5,803 2,452 3,351 2004 2005 35 years
Brookdale LaCrosse AL La Crosse WI - 644 5,831 2,637 644 8,468 9,112 3,886 5,226 1998 2005 35 years
Brookdale Middleton Century Ave Middleton WI - 360 5,041 - 360 5,041 5,401 1,462 3,939 1997 2011 35 years
Brookdale Onalaska Onalaska WI - 250 4,949 - 250 4,949 5,199 1,427 3,772 1995 2011 35 years
Brookdale Sun Prairie Sun Prairie WI - 350 1,131 - 350 1,131 1,481 391 1,090 1994 2011 35 years
TOTAL FOR BROOKDALE SENIOR HOUSING COMMUNITIES 48,159 185,432 1,810,548 120,817 184,852 1,931,945 2,116,797 799,971 1,316,826
SUNRISE SENIOR HOUSING COMMUNITIES
Sunrise of Chandler Chandler AZ - 4,344 14,455 1,386 4,459 15,726 20,185 4,780 15,405 2007 2012 35 years
Sunrise of Scottsdale Scottsdale AZ - 2,229 27,575 1,193 2,255 28,742 30,997 11,634 19,363 2007 2007 35 years
Sunrise at River Road Tucson AZ - 2,971 12,399 970 3,000 13,340 16,340 3,823 12,517 2008 2012 35 years
Sunrise at La Costa Carlsbad CA - 4,890 20,590 1,985 5,030 22,435 27,465 9,658 17,807 1999 2007 35 years
Sunrise of Carmichael Carmichael CA - 1,269 14,598 1,274 1,310 15,831 17,141 4,526 12,615 2009 2012 35 years
Sunrise of Fair Oaks Fair Oaks CA - 1,456 23,679 3,035 2,557 25,613 28,170 10,611 17,559 2001 2007 35 years
Sunrise of Mission Viejo Mission Viejo CA - 3,802 24,560 2,297 4,125 26,534 30,659 11,130 19,529 1998 2007 35 years
Sunrise at Canyon Crest Riverside CA - 5,486 19,658 2,418 5,745 21,817 27,562 9,280 18,282 2006 2007 35 years
Sunrise of Rocklin Rocklin CA - 1,378 23,565 1,786 1,525 25,204 26,729 10,351 16,378 2007 2007 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Sunrise of San Mateo San Mateo CA - 2,682 35,335 3,557 2,742 38,832 41,574 15,571 26,003 1999 2007 35 years
Sunrise of Sunnyvale Sunnyvale CA - 2,933 34,361 2,256 2,999 36,551 39,550 14,743 24,807 2000 2007 35 years
Sunrise at Sterling Canyon Valencia CA - 3,868 29,293 5,211 4,108 34,264 38,372 15,149 23,223 1998 2007 35 years
Sunrise of Westlake Village Westlake Village CA - 4,935 30,722 2,239 5,038 32,858 37,896 13,353 24,543 2004 2007 35 years
Sunrise at Yorba Linda Yorba Linda CA - 1,689 25,240 2,601 1,780 27,750 29,530 11,460 18,070 2002 2007 35 years
Sunrise at Cherry Creek Denver CO - 1,621 28,370 3,697 1,721 31,967 33,688 12,825 20,863 2000 2007 35 years
Sunrise at Pinehurst Denver CO - 1,417 30,885 2,301 1,716 32,887 34,603 13,870 20,733 1998 2007 35 years
Sunrise at Orchard Littleton CO - 1,813 22,183 3,666 1,853 25,809 27,662 10,325 17,337 1997 2007 35 years
Sunrise of Westminster Westminster CO - 2,649 16,243 2,548 2,860 18,580 21,440 7,928 13,512 2000 2007 35 years
Sunrise of Stamford Stamford CT - 4,612 28,533 3,433 5,029 31,549 36,578 13,242 23,336 1999 2007 35 years
Sunrise of Jacksonville Jacksonville FL - 2,390 17,671 652 2,420 18,293 20,713 4,912 15,801 2009 2012 35 years
Sunrise at Ivey Ridge Alpharetta GA - 1,507 18,516 1,622 1,517 20,128 21,645 8,561 13,084 1998 2007 35 years
Sunrise of Huntcliff Summit I Atlanta GA - 4,232 66,161 19,970 4,201 86,162 90,363 40,106 50,257 1987 2007 35 years
Sunrise at Huntcliff Summit II Atlanta GA - 2,154 17,137 3,370 2,160 20,501 22,661 8,588 14,073 1998 2007 35 years
Sunrise at East Cobb Marietta GA - 1,797 23,420 1,524 1,806 24,935 26,741 10,547 16,194 1997 2007 35 years
Sunrise of Barrington Barrington IL - 859 15,085 844 892 15,896 16,788 4,636 12,152 2007 2012 35 years
Sunrise of Bloomingdale Bloomingdale IL - 1,287 38,625 2,280 1,382 40,810 42,192 16,874 25,318 2000 2007 35 years
Sunrise of Buffalo Grove Buffalo Grove IL - 2,154 28,021 1,893 2,339 29,729 32,068 12,351 19,717 1999 2007 35 years
Sunrise of Lincoln Park Chicago IL - 3,485 26,687 4,622 3,510 31,284 34,794 12,107 22,687 2003 2007 35 years
Sunrise of Naperville Naperville IL - 1,946 28,538 2,659 2,624 30,519 33,143 13,133 20,010 1999 2007 35 years
Sunrise of Palos Park Palos Park IL - 2,363 42,205 1,371 2,416 43,523 45,939 17,862 28,077 2001 2007 35 years
Sunrise of Park Ridge Park Ridge IL - 5,533 39,557 3,270 5,707 42,653 48,360 17,703 30,657 1998 2007 35 years
Sunrise of Willowbrook Willowbrook IL - 1,454 60,738 (14,182) 2,080 45,930 48,010 24,031 23,979 2000 2007 35 years
Sunrise on Old Meridian Carmel IN - 8,550 31,746 1,499 8,581 33,214 41,795 9,491 32,304 2009 2012 35 years
Sunrise of Leawood Leawood KS - 651 16,401 1,421 878 17,595 18,473 4,962 13,511 2006 2012 35 years
Sunrise of Overland Park Overland Park KS - 650 11,015 1,054 807 11,912 12,719 3,593 9,126 2007 2012 35 years
Sunrise of Baton Rouge Baton Rouge LA - 1,212 23,547 2,197 1,471 25,485 26,956 10,537 16,419 2000 2007 35 years
Sunrise of Columbia Columbia MD - 1,780 23,083 4,415 1,918 27,360 29,278 11,412 17,866 1996 2007 35 years
Sunrise of Rockville Rockville MD - 1,039 39,216 2,945 1,075 42,125 43,200 17,150 26,050 1997 2007 35 years
Sunrise of Arlington Arlington MA - 86 34,393 1,682 107 36,054 36,161 14,760 21,401 2001 2007 35 years
Sunrise of Norwood Norwood MA - 2,230 30,968 2,383 2,356 33,225 35,581 13,628 21,953 1997 2007 35 years
Sunrise of Bloomfield Bloomfield Hills MI - 3,736 27,657 2,414 3,927 29,880 33,807 12,145 21,662 2006 2007 35 years
Sunrise of Cascade Grand Rapids MI - 1,273 21,782 1,013 1,370 22,698 24,068 6,378 17,690 2007 2012 35 years
Sunrise of Northville Plymouth MI - 1,445 26,090 1,849 1,525 27,859 29,384 11,512 17,872 1999 2007 35 years
Sunrise of Rochester Rochester MI - 2,774 38,666 1,951 2,854 40,537 43,391 16,650 26,741 1998 2007 35 years
Sunrise of Troy Troy MI - 1,758 23,727 2,710 1,860 26,335 28,195 10,368 17,827 2001 2007 35 years
Sunrise of Edina Edina MN - 3,181 24,224 1,362 3,305 25,462 28,767 11,412 17,355 1999 2007 35 years
Sunrise of East Brunswick East Brunswick NJ - 2,784 26,173 2,582 3,040 28,499 31,539 12,190 19,349 1999 2007 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Sunrise of Jackson Jackson NJ - 4,009 15,029 1,015 4,037 16,016 20,053 4,817 15,236 2008 2012 35 years
Sunrise of Morris Plains Morris Plains NJ - 1,492 32,052 3,063 1,601 35,006 36,607 14,384 22,223 1997 2007 35 years
Sunrise of Old Tappan Old Tappan NJ - 2,985 36,795 3,247 3,177 39,850 43,027 16,082 26,945 1997 2007 35 years
Sunrise of Wall Wall Township NJ - 1,053 19,101 2,261 1,088 21,327 22,415 8,954 13,461 1999 2007 35 years
Sunrise of Wayne Wayne NJ - 1,288 24,990 3,544 1,373 28,449 29,822 11,786 18,036 1996 2007 35 years
Sunrise of Westfield Westfield NJ - 5,057 23,803 3,172 5,185 26,847 32,032 11,164 20,868 1996 2007 35 years
Sunrise of Woodcliff Lake Woodcliff Lake NJ - 3,493 30,801 3,110 3,692 33,712 37,404 13,755 23,649 2000 2007 35 years
Sunrise of North Lynbrook Lynbrook NY - 4,622 38,087 3,461 4,700 41,470 46,170 17,189 28,981 1999 2007 35 years
Sunrise at Fleetwood Mount Vernon NY - 4,381 28,434 2,948 4,723 31,040 35,763 13,401 22,362 1999 2007 35 years
Sunrise of New City New City NY - 1,906 27,323 2,871 1,998 30,102 32,100 12,413 19,687 1999 2007 35 years
Sunrise of Smithtown Smithtown NY - 2,853 25,621 3,925 3,040 29,359 32,399 12,669 19,730 1999 2007 35 years
Sunrise of Staten Island Staten Island NY - 7,237 23,910 2,044 7,292 25,899 33,191 13,668 19,523 2006 2007 35 years
Sunrise on Providence Charlotte NC - 1,976 19,472 3,031 2,004 22,475 24,479 9,471 15,008 1999 2007 35 years
Sunrise at North Hills Raleigh NC - 749 37,091 5,690 849 42,681 43,530 18,375 25,155 2000 2007 35 years
Sunrise at Parma Cleveland OH - 695 16,641 1,613 908 18,041 18,949 7,663 11,286 2000 2007 35 years
Sunrise of Cuyahoga Falls Cuyahoga Falls OH - 626 10,239 2,244 862 12,247 13,109 5,331 7,778 2000 2007 35 years
Sunrise of Abington Abington PA - 1,838 53,660 6,462 2,107 59,853 61,960 24,719 37,241 1997 2007 35 years
Sunrise of Blue Bell Blue Bell PA - 1,765 23,920 3,623 1,928 27,380 29,308 11,716 17,592 2006 2007 35 years
Sunrise of Exton Exton PA - 1,123 17,765 2,518 1,222 20,184 21,406 8,570 12,836 2000 2007 35 years
Sunrise of Haverford Haverford PA - 941 25,872 2,660 990 28,483 29,473 11,972 17,501 1997 2007 35 years
Sunrise of Granite Run Media PA - 1,272 31,781 2,770 1,441 34,382 35,823 14,240 21,583 1997 2007 35 years
Sunrise of Lower Makefield Morrisville PA - 3,165 21,337 923 3,174 22,251 25,425 6,507 18,918 2008 2012 35 years
Sunrise of Westtown West Chester PA - 1,547 22,996 2,166 1,625 25,084 26,709 10,882 15,827 1999 2007 35 years
Sunrise of Hillcrest Dallas TX - 2,616 27,680 1,468 2,626 29,138 31,764 11,942 19,822 2006 2007 35 years
Sunrise of Fort Worth Fort Worth TX - 2,024 18,587 1,462 2,178 19,895 22,073 5,826 16,247 2007 2012 35 years
Sunrise of Frisco Frisco TX - 2,523 14,547 987 2,561 15,496 18,057 4,262 13,795 2009 2012 35 years
Sunrise of Cinco Ranch Katy TX - 2,512 21,600 1,702 2,600 23,214 25,814 6,712 19,102 2007 2012 35 years
Sunrise at Holladay Holladay UT - 2,542 44,771 1,516 2,596 46,233 48,829 12,936 35,893 2008 2012 35 years
Sunrise of Sandy Sandy UT - 2,576 22,987 522 2,646 23,439 26,085 9,660 16,425 2007 2007 35 years
Sunrise of Alexandria Alexandria VA - 88 14,811 3,466 244 18,121 18,365 7,660 10,705 1998 2007 35 years
Sunrise of Richmond Richmond VA - 1,120 17,446 1,325 1,224 18,667 19,891 8,079 11,812 1999 2007 35 years
Sunrise at Bon Air Richmond VA - 2,047 22,079 1,270 2,032 23,364 25,396 6,779 18,617 2008 2012 35 years
Sunrise of Springfield Springfield VA - 4,440 18,834 2,888 4,545 21,617 26,162 9,332 16,830 1997 2007 35 years
Sunrise of Lynn Valley Vancouver BC - 11,759 37,424 (8,153) 9,366 31,664 41,030 12,957 28,073 2002 2007 35 years
Sunrise of Vancouver Vancouver BC - 6,649 31,937 1,776 6,662 33,700 40,362 13,759 26,603 2005 2007 35 years
Sunrise of Victoria Victoria BC - 8,332 29,970 (5,550) 6,725 26,027 32,752 10,806 21,946 2001 2007 35 years
Sunrise of Aurora Aurora ON - 1,570 36,113 (6,537) 1,347 29,799 31,146 12,149 18,997 2002 2007 35 years
Sunrise of Burlington Burlington ON - 1,173 24,448 1,535 1,382 25,774 27,156 10,712 16,444 2001 2007 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Sunrise of Unionville Markham ON - 2,322 41,140 (7,103) 2,022 34,337 36,359 14,171 22,188 2000 2007 35 years
Sunrise of Mississauga Mississauga ON - 3,554 33,631 (5,987) 3,031 28,167 31,198 11,767 19,431 2000 2007 35 years
Sunrise of Erin Mills Mississauga ON - 1,957 27,020 (4,821) 1,573 22,583 24,156 9,287 14,869 2007 2007 35 years
Sunrise of Oakville Oakville ON - 2,753 37,489 2,355 2,955 39,642 42,597 16,229 26,368 2002 2007 35 years
Sunrise of Richmond Hill Richmond Hill ON - 2,155 41,254 (7,381) 1,872 34,156 36,028 14,052 21,976 2002 2007 35 years
Sunrise of Thornhill Vaughan ON - 2,563 57,513 (8,900) 1,507 49,669 51,176 18,985 32,191 2003 2007 35 years
Sunrise of Windsor Windsor ON - 1,813 20,882 2,034 2,000 22,729 24,729 9,411 15,318 2001 2007 35 years
TOTAL FOR SUNRISE SENIOR HOUSING COMMUNITIES - 245,515 2,532,176 147,460 250,690 2,674,461 2,925,151 1,079,059 1,846,092
ATRIA SENIOR HOUSING COMMUNITIES
Atria Regency Mobile AL - 950 11,897 1,945 1,025 13,767 14,792 5,356 9,436 1996 2011 35 years
Atria Chandler Villas Chandler AZ - 3,650 8,450 2,668 3,785 10,983 14,768 5,063 9,705 1988 2011 35 years
Atria Park of Sierra Pointe Scottsdale AZ - 10,930 65,372 5,786 11,021 71,067 82,088 16,386 65,702 2000 2014 35 years
Atria Campana del Rio Tucson AZ - 5,861 37,284 3,478 5,992 40,631 46,623 14,693 31,930 1964 2011 35 years
Atria Valley Manor Tucson AZ - 1,709 60 1,115 1,815 1,069 2,884 759 2,125 1963 2011 35 years
Atria Bell Court Gardens Tucson AZ - 3,010 30,969 2,737 3,063 33,653 36,716 11,201 25,515 1964 2011 35 years
Atria Burlingame Burlingame CA - 2,494 12,373 2,019 2,601 14,285 16,886 5,317 11,569 1977 2011 35 years
Atria Las Posas Camarillo CA - 4,500 28,436 1,599 4,541 29,994 34,535 9,849 24,686 1997 2011 35 years
Atria Carmichael Oaks Carmichael CA - 2,118 49,694 4,255 2,356 53,711 56,067 14,727 41,340 1992 2013 35 years
Atria El Camino Gardens Carmichael CA - 6,930 32,318 16,026 7,215 48,059 55,274 19,289 35,985 1984 2011 35 years
Villa Bonita Chula Vista CA - 2,700 7,994 1,449 1,658 10,485 12,143 3,023 9,120 1989 2011 35 years
Atria Covina Covina CA - 170 4,131 1,029 262 5,068 5,330 2,205 3,125 1977 2011 35 years
Atria Daly City Daly City CA - 3,090 13,448 1,369 3,116 14,791 17,907 5,313 12,594 1975 2011 35 years
Atria Covell Gardens Davis CA - 2,163 39,657 13,087 2,388 52,519 54,907 20,532 34,375 1987 2011 35 years
Atria Encinitas Encinitas CA - 5,880 9,212 3,046 5,952 12,186 18,138 4,620 13,518 1984 2011 35 years
Atria North Escondido Escondido CA - 1,196 7,155 852 1,215 7,988 9,203 2,247 6,956 2002 2014 35 years
Atria Grass Valley Grass Valley CA - 1,965 28,414 1,896 2,059 30,216 32,275 8,394 23,881 2000 2013 35 years
Atria Golden Creek Irvine CA - 6,900 23,544 3,307 6,946 26,805 33,751 9,249 24,502 1985 2011 35 years
Atria Park of Lafayette Lafayette CA - 5,679 56,922 2,442 6,463 58,580 65,043 15,427 49,616 2007 2013 35 years
Atria Del Sol Mission Viejo CA - 3,500 12,458 8,907 3,830 21,035 24,865 10,019 14,846 1985 2011 35 years
Atria Newport Plaza Newport Beach CA - 4,534 32,912 1,601 4,569 34,478 39,047 3,658 35,389 1989 2017 35 years
Atria Tamalpais Creek Novato CA - 5,812 24,703 1,350 5,838 26,027 31,865 8,682 23,183 1978 2011 35 years
Atria Park of Pacific Palisades Pacific Palisades CA - 4,458 17,064 1,542 4,489 18,575 23,064 8,177 14,887 2001 2007 35 years
Atria Palm Desert Palm Desert CA - 2,887 9,843 1,760 3,145 11,345 14,490 6,211 8,279 1988 2011 35 years
Atria Hacienda Palm Desert CA - 6,680 85,900 4,324 6,876 90,028 96,904 28,182 68,722 1989 2011 35 years
Atria Del Rey Rancho Cucamonga CA - 3,290 17,427 5,978 3,477 23,218 26,695 10,257 16,438 1987 2011 35 years
Mission Hills Rancho Mirage CA - 1,610 9,169 798 6,800 4,777 11,577 1,717 9,860 1996 2014 35 years
Atria Rocklin Rocklin CA 17,864 4,427 52,064 1,839 4,507 53,823 58,330 11,217 47,113 2001 2015 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Atria La Jolla San Diego CA - 8,210 46,315 (1,070) 8,216 45,239 53,455 4,821 48,634 1984 2017 35 years
Atria Penasquitos San Diego CA - 2,649 24,067 2,325 2,711 26,330 29,041 2,729 26,312 1991 2017 35 years
Atria Collwood San Diego CA - 290 10,650 1,566 348 12,158 12,506 4,660 7,846 1976 2011 35 years
Atria Rancho Park San Dimas CA - 4,066 14,306 2,273 4,625 16,020 20,645 6,545 14,100 1975 2011 35 years
Regency of Evergreen Valley San Jose CA - 6,800 3,637 1,299 2,707 9,029 11,736 3,217 8,519 1998 2011 35 years
Atria Willow Glen San Jose CA - 8,521 43,168 3,896 8,627 46,958 55,585 14,216 41,369 1976 2011 35 years
Atria San Juan San Juan Capistrano CA - 5,110 29,436 9,287 5,353 38,480 43,833 17,013 26,820 1985 2011 35 years
Atria Hillsdale San Mateo CA - 5,240 15,956 29,714 7,042 43,868 50,910 7,720 43,190 1986 2011 35 years
Atria Santa Clarita Santa Clarita CA - 3,880 38,366 1,853 3,890 40,209 44,099 8,612 35,487 2001 2015 35 years
Atria Sunnyvale Sunnyvale CA - 6,120 30,068 5,456 6,247 35,397 41,644 12,938 28,706 1977 2011 35 years
Atria Park of Tarzana Tarzana CA - 960 47,547 6,714 5,861 49,360 55,221 12,761 42,460 2008 2013 35 years
Atria Park of Vintage Hills Temecula CA - 4,674 44,341 3,582 4,892 47,705 52,597 13,486 39,111 2000 2013 35 years
Atria Park of Grand Oaks Thousand Oaks CA - 5,994 50,309 1,691 6,069 51,925 57,994 14,147 43,847 2002 2013 35 years
Atria Hillcrest Thousand Oaks CA - 6,020 25,635 10,655 6,624 35,686 42,310 16,628 25,682 1987 2011 35 years
Atria Walnut Creek Walnut Creek CA - 6,910 15,797 17,635 7,642 32,700 40,342 17,960 22,382 1978 2011 35 years
Atria Valley View Walnut Creek CA - 7,139 53,914 3,287 7,193 57,147 64,340 25,830 38,510 1977 2011 35 years
Atria Longmont Longmont CO - 2,807 24,877 1,528 2,874 26,338 29,212 7,837 21,375 2009 2012 35 years
Atria Darien Darien CT - 653 37,587 12,387 1,202 49,425 50,627 18,589 32,038 1997 2011 35 years
Atria Larson Place Hamden CT - 1,850 16,098 2,741 1,889 18,800 20,689 6,806 13,883 1999 2011 35 years
Atria Greenridge Place Rocky Hill CT - 2,170 32,553 2,898 2,392 35,229 37,621 11,351 26,270 1998 2011 35 years
Atria Stamford Stamford CT - 1,200 62,432 20,362 1,487 82,507 83,994 26,793 57,201 1975 2011 35 years
Atria Crossroads Place Waterford CT - 2,401 36,495 8,089 2,577 44,408 46,985 16,966 30,019 2000 2011 35 years
Atria Hamilton Heights West Hartford CT - 3,120 14,674 4,118 3,163 18,749 21,912 8,054 13,858 1904 2011 35 years
Atria Windsor Woods Hudson FL - 1,610 32,432 3,959 1,744 36,257 38,001 12,508 25,493 1988 2011 35 years
Atria Park of Baypoint Village Hudson FL - 2,083 28,841 10,180 2,369 38,735 41,104 15,605 25,499 1986 2011 35 years
Atria Park of San Pablo Jacksonville FL - 1,620 14,920 1,365 1,660 16,245 17,905 5,499 12,406 1999 2011 35 years
Atria Park of St. Joseph's Jupiter FL - 5,520 30,720 2,309 5,579 32,970 38,549 9,286 29,263 2007 2013 35 years
Atria Lady Lake Lady Lake FL - 3,752 26,265 (14,417) 3,769 11,831 15,600 5,622 9,978 2010 2015 35 years
Atria Park of Lake Forest Sanford FL - 3,589 32,586 5,481 4,104 37,552 41,656 12,604 29,052 2002 2011 35 years
Atria Evergreen Woods Spring Hill FL - 2,370 28,371 6,382 2,574 34,549 37,123 13,071 24,052 1981 2011 35 years
Atria North Point Alpharetta GA 37,704 4,830 78,318 3,689 4,868 81,969 86,837 19,856 66,981 2007 2014 35 years
Atria Buckhead Atlanta GA - 3,660 5,274 1,501 3,688 6,747 10,435 3,021 7,414 1996 2011 35 years
Atria Park of Tucker Tucker GA - 1,103 20,679 870 1,120 21,532 22,652 6,008 16,644 2000 2013 35 years
Atria Park of Glen Ellyn Glen Ellyn IL - 2,455 34,064 270 2,748 34,041 36,789 15,538 21,251 2000 2007 35 years
Atria Newburgh Newburgh IN - 1,150 22,880 1,700 1,155 24,575 25,730 7,703 18,027 1998 2011 35 years
Atria Hearthstone East Topeka KS - 1,150 20,544 1,118 1,241 21,571 22,812 7,570 15,242 1998 2011 35 years
Atria Hearthstone West Topeka KS - 1,230 28,379 2,668 1,267 31,010 32,277 11,155 21,122 1987 2011 35 years
Atria Highland Crossing Covington KY - 1,677 14,393 1,859 1,693 16,236 17,929 6,272 11,657 1988 2011 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Atria Summit Hills Crestview Hills KY - 1,780 15,769 1,369 1,812 17,106 18,918 6,037 12,881 1998 2011 35 years
Atria Elizabethtown Elizabethtown KY - 850 12,510 1,038 884 13,514 14,398 4,589 9,809 1996 2011 35 years
Atria St. Matthews Louisville KY - 939 9,274 1,461 968 10,706 11,674 4,610 7,064 1998 2011 35 years
Atria Stony Brook Louisville KY - 1,860 17,561 1,526 1,953 18,994 20,947 6,627 14,320 1999 2011 35 years
Atria Springdale Louisville KY - 1,410 16,702 1,724 1,451 18,385 19,836 6,372 13,464 1999 2011 35 years
Atria Kennebunk Kennebunk ME - 1,090 23,496 1,745 1,159 25,172 26,331 8,496 17,835 1998 2011 35 years
Atria Manresa Annapolis MD - 4,193 19,000 2,511 4,465 21,239 25,704 7,368 18,336 1920 2011 35 years
Atria Salisbury Salisbury MD - 1,940 24,500 (3,220) 1,979 21,241 23,220 7,991 15,229 1995 2011 35 years
Atria Marland Place Andover MA - 1,831 34,592 19,905 1,996 54,332 56,328 25,066 31,262 1996 2011 35 years
Atria Longmeadow Place Burlington MA - 5,310 58,021 2,305 5,387 60,249 65,636 18,432 47,204 1998 2011 35 years
Atria Fairhaven Fairhaven MA - 1,100 16,093 1,391 1,157 17,427 18,584 5,587 12,997 1999 2011 35 years
Atria Woodbriar Place Falmouth MA - 4,630 27,314 5,936 6,433 31,447 37,880 9,746 28,134 2013 2013 35 years
Atria Woodbriar Park Falmouth MA - 1,970 43,693 21,590 2,711 64,542 67,253 24,349 42,904 1975 2011 35 years
Atria Draper Place Hopedale MA - 1,140 17,794 1,953 1,234 19,653 20,887 6,681 14,206 1998 2011 35 years
Atria Merrimack Place Newburyport MA - 2,774 40,645 24,722 4,319 63,822 68,141 12,969 55,172 2000 2011 35 years
Atria Marina Place Quincy MA - 2,590 33,899 2,202 2,780 35,911 38,691 11,634 27,057 1999 2011 35 years
Atria Park of Ann Arbor Ann Arbor MI - 1,703 15,857 2,124 1,837 17,847 19,684 8,105 11,579 2001 2007 35 years
Atria Kinghaven Riverview MI - 1,440 26,260 3,840 1,614 29,926 31,540 10,094 21,446 1987 2011 35 years
Atria Seville Las Vegas NV - - 796 2,085 26 2,855 2,881 2,097 784 1999 2011 35 years
Atria Summit Ridge Reno NV - 4 407 878 27 1,262 1,289 939 350 1997 2011 35 years
Atria Cranford Cranford NJ - 8,260 61,411 5,980 8,420 67,231 75,651 22,636 53,015 1993 2011 35 years
Atria Tinton Falls Tinton Falls NJ - 6,580 13,258 1,966 6,762 15,042 21,804 6,133 15,671 1999 2011 35 years
Atria Shaker Albany NY - 1,520 29,667 6,180 1,652 35,715 37,367 10,245 27,122 1997 2011 35 years
Atria Crossgate Albany NY - 1,080 20,599 1,280 1,100 21,859 22,959 7,542 15,417 1980 2011 35 years
Atria Woodlands Ardsley NY 43,744 7,660 65,581 3,559 7,718 69,082 76,800 22,346 54,454 2005 2011 35 years
Atria Bay Shore Bay Shore NY 15,275 4,440 31,983 3,128 4,453 35,098 39,551 11,788 27,763 1900 2011 35 years
Atria Briarcliff Manor Briarcliff Manor NY - 6,560 33,885 3,541 6,725 37,261 43,986 12,390 31,596 1997 2011 35 years
Atria Riverdale Bronx NY - 1,020 24,149 16,674 1,084 40,759 41,843 18,224 23,619 1999 2011 35 years
Atria Delmar Place Delmar NY - 1,201 24,850 1,249 1,223 26,077 27,300 6,450 20,850 2004 2013 35 years
Atria East Northport East Northport NY - 9,960 34,467 20,194 10,250 54,371 64,621 19,574 45,047 1996 2011 35 years
Atria Glen Cove Glen Cove NY - 2,035 25,190 1,594 2,066 26,753 28,819 14,990 13,829 1997 2011 35 years
Atria Great Neck Great Neck NY - 3,390 54,051 28,881 3,482 82,840 86,322 25,162 61,160 1998 2011 35 years
Atria Cutter Mill Great Neck NY - 2,750 47,919 3,865 2,761 51,773 54,534 16,113 38,421 1999 2011 35 years
Atria Huntington Huntington Station NY - 8,190 1,169 2,943 8,232 4,070 12,302 3,231 9,071 1987 2011 35 years
Atria Hertlin Place Lake Ronkonkoma NY - 7,886 16,391 2,622 7,889 19,010 26,899 6,071 20,828 2002 2012 35 years
Atria Lynbrook Lynbrook NY - 3,145 5,489 15,273 3,176 20,731 23,907 3,144 20,763 1996 2011 35 years
Atria Tanglewood Lynbrook NY 22,705 4,120 37,348 1,516 4,145 38,839 42,984 12,123 30,861 2005 2011 35 years
Atria West 86 New York NY - 80 73,685 7,786 167 81,384 81,551 27,323 54,228 1998 2011 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Atria on the Hudson Ossining NY - 8,123 63,089 5,583 8,217 68,578 76,795 23,548 53,247 1972 2011 35 years
Atria Plainview Plainview NY - 2,480 16,060 2,445 2,666 18,319 20,985 6,496 14,489 2000 2011 35 years
Atria Rye Brook Port Chester NY - 9,660 74,936 3,632 9,751 78,477 88,228 24,361 63,867 2004 2011 35 years
Atria Kew Gardens Queens NY - 3,051 66,013 9,460 3,081 75,443 78,524 25,005 53,519 1999 2011 35 years
Atria Forest Hills Queens NY - 2,050 16,680 2,312 2,074 18,968 21,042 6,487 14,555 2001 2011 35 years
Atria on Roslyn Harbor Roslyn NY 65,000 12,909 72,720 3,143 12,974 75,798 88,772 23,819 64,953 2006 2011 35 years
Atria Guilderland Slingerlands NY - 1,170 22,414 1,027 1,210 23,401 24,611 7,540 17,071 1950 2011 35 years
Atria South Setauket South Setauket NY - 8,450 14,534 2,347 8,842 16,489 25,331 7,528 17,803 1967 2011 35 years
Atria Southpoint Walk Durham NC - 2,130 25,920 1,673 2,135 27,588 29,723 7,806 21,917 2009 2013 35 years
Atria Oakridge Raleigh NC - 1,482 28,838 1,803 1,519 30,604 32,123 8,750 23,373 2009 2013 35 years
Atria Bethlehem Bethlehem PA - 2,479 22,870 1,466 2,500 24,315 26,815 8,353 18,462 1998 2011 35 years
Atria Center City Philadelphia PA - 3,460 18,291 18,490 3,535 36,706 40,241 13,623 26,618 1964 2011 35 years
Atria South Hills Pittsburgh PA - 880 10,884 1,187 940 12,011 12,951 4,512 8,439 1998 2011 35 years
Atria Bay Spring Village Barrington RI - 2,000 33,400 3,245 2,103 36,542 38,645 13,037 25,608 2000 2011 35 years
Atria Harborhill East Greenwich RI - 2,089 21,702 2,003 2,186 23,608 25,794 8,175 17,619 1835 2011 35 years
Atria Lincoln Place Lincoln RI - 1,440 12,686 1,615 1,475 14,266 15,741 5,461 10,280 2000 2011 35 years
Atria Aquidneck Place Portsmouth RI - 2,810 31,623 1,358 2,814 32,977 35,791 10,251 25,540 1999 2011 35 years
Atria Forest Lake Columbia SC - 670 13,946 1,211 693 15,134 15,827 4,988 10,839 1999 2011 35 years
Atria Weston Place Knoxville TN - 793 7,961 1,655 969 9,440 10,409 3,559 6,850 1993 2011 35 years
Atria at the Arboretum Austin TX - 8,280 61,764 3,715 8,377 65,382 73,759 18,129 55,630 2009 2012 35 years
Atria Carrollton Carrollton TX 5,108 360 20,465 1,882 370 22,337 22,707 7,588 15,119 1998 2011 35 years
Atria Grapevine Grapevine TX - 2,070 23,104 2,109 2,092 25,191 27,283 8,020 19,263 1999 2011 35 years
Atria Westchase Houston TX - 2,318 22,278 1,653 2,347 23,902 26,249 8,030 18,219 1999 2011 35 years
Atria Cinco Ranch Katy TX - 3,171 73,287 2,195 3,201 75,452 78,653 14,713 63,940 2010 2015 35 years
Atria Kingwood Kingwood TX - 1,170 4,518 1,141 1,213 5,616 6,829 2,397 4,432 1998 2011 35 years
Atria at Hometown North Richland Hills TX - 1,932 30,382 3,130 1,963 33,481 35,444 9,642 25,802 2007 2013 35 years
Atria Canyon Creek Plano TX - 3,110 45,999 3,932 3,148 49,893 53,041 14,590 38,451 2009 2013 35 years
Atria Cypresswood Spring TX - 880 9,192 680 984 9,768 10,752 3,938 6,814 1996 2011 35 years
Atria Sugar Land Sugar Land TX - 970 17,542 1,110 980 18,642 19,622 6,211 13,411 1999 2011 35 years
Atria Copeland Tyler TX - 1,879 17,901 2,239 1,913 20,106 22,019 6,642 15,377 1997 2011 35 years
Atria Willow Park Tyler TX - 920 31,271 2,041 986 33,246 34,232 11,078 23,154 1985 2011 35 years
Atria Virginia Beach Virginia Beach VA - 1,749 33,004 1,162 1,815 34,100 35,915 11,130 24,785 1998 2011 35 years
Arbour Lake Calgary AB - 2,512 39,188 (2,110) 2,304 37,286 39,590 8,334 31,256 2003 2014 35 years
Canyon Meadows Calgary AB - 1,617 30,803 (1,473) 1,483 29,464 30,947 6,879 24,068 1995 2014 35 years
Churchill Manor Edmonton AB - 2,865 30,482 (1,423) 2,627 29,297 31,924 6,693 25,231 1999 2014 35 years
The View at Lethbridge Lethbridge AB - 2,503 24,770 (1,135) 2,306 23,832 26,138 5,791 20,347 2007 2014 35 years
Victoria Park Red Deer AB - 1,188 22,554 (268) 1,087 22,387 23,474 5,565 17,909 1999 2014 35 years
Ironwood Estates St. Albert AB - 3,639 22,519 (462) 3,360 22,336 25,696 5,574 20,122 1998 2014 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Longlake Chateau Nanaimo BC - 1,874 22,910 (761) 1,717 22,306 24,023 5,661 18,362 1990 2014 35 years
Prince George Chateau Prince George BC - 2,066 22,761 (786) 1,891 22,150 24,041 5,493 18,548 2005 2014 35 years
The Victorian Victoria BC - 3,419 16,351 (132) 3,162 16,476 19,638 4,406 15,232 1988 2014 35 years
The Victorian at McKenzie Victoria BC - 4,801 25,712 (709) 4,394 25,410 29,804 6,251 23,553 2003 2014 35 years
Riverheights Terrace Brandon MB - 799 27,708 (750) 735 27,022 27,757 6,492 21,265 2001 2014 35 years
Amber Meadow Winnipeg MB - 3,047 17,821 (22) 2,789 18,057 20,846 5,118 15,728 2000 2014 35 years
The Westhaven Winnipeg MB - 871 23,162 (222) 829 22,982 23,811 5,611 18,200 1988 2014 35 years
Ste. Anne's Court Fredericton NB - 1,221 29,626 (1,216) 1,129 28,502 29,631 6,787 22,844 2002 2014 35 years
Chateau de Champlain St. John NB - 796 24,577 (324) 746 24,303 25,049 6,121 18,928 2002 2014 35 years
The Court at Brooklin Brooklin ON - 2,515 35,602 (1,118) 2,539 34,460 36,999 7,905 29,094 2004 2014 35 years
Burlington Gardens Burlington ON - 7,560 50,744 (3,211) 6,925 48,168 55,093 10,423 44,670 2008 2014 35 years
The Court at Rushdale Hamilton ON - 1,799 34,633 (1,486) 1,643 33,303 34,946 7,735 27,211 2004 2014 35 years
Kingsdale Chateau Kingston ON - 2,221 36,272 (1,440) 2,097 34,956 37,053 8,044 29,009 2000 2014 35 years
The Court at Barrhaven Nepean ON - 1,778 33,922 (1,241) 1,685 32,774 34,459 7,818 26,641 2004 2014 35 years
Crystal View Lodge Nepean ON - 1,587 37,243 (799) 1,669 36,362 38,031 8,277 29,754 2000 2014 35 years
Stamford Estates Niagara Falls ON - 1,414 29,439 (1,145) 1,291 28,417 29,708 6,498 23,210 2005 2014 35 years
Sherbrooke Heights Peterborough ON - 2,485 33,747 (1,250) 2,277 32,705 34,982 7,745 27,237 2001 2014 35 years
Anchor Pointe St. Catharines ON - 8,214 24,056 (349) 7,544 24,377 31,921 6,128 25,793 2000 2014 35 years
The Court at Pringle Creek Whitby ON - 2,965 39,206 (2,347) 2,780 37,044 39,824 8,495 31,329 2002 2014 35 years
La Residence Steger Saint-Laurent QC - 1,995 10,926 1,542 1,926 12,537 14,463 3,906 10,557 1999 2014 35 years
Mulberry Estates Moose Jaw SK - 2,173 31,791 (1,371) 2,094 30,499 32,593 7,219 25,374 2003 2014 35 years
Queen Victoria Estates Regina SK - 3,018 34,109 (1,523) 2,770 32,834 35,604 7,644 27,960 2000 2014 35 years
Primrose Chateau Saskatoon SK - 2,611 32,729 (899) 2,459 31,982 34,441 7,458 26,983 1996 2014 35 years
Amberwood Port Richey Florida - 1,320 - - 1,320 - 1,320 - 1,320 N/A 2011 N/A
Atria Development & Construction Fees - - 163 - - 163 163 - 163 CIP CIP CIP
TOTAL FOR ATRIA SENIOR HOUSING COMMUNITIES 207,400 535,915 4,731,839 568,954 556,362 5,280,346 5,836,708 1,657,519 4,179,189
OTHER SENIOR HOUSING COMMUNITIES
Elmcroft of Grayson Valley Birmingham AL - 1,040 19,145 (4,072) 1,046 15,067 16,113 6,102 10,011 2000 2011 35 years
Elmcroft of Byrd Springs Hunstville AL - 1,720 11,270 1,443 1,729 12,704 14,433 4,253 10,180 1999 2011 35 years
Elmcroft of Heritage Woods Mobile AL - 1,020 10,241 1,217 1,027 11,451 12,478 3,814 8,664 2000 2011 35 years
Rosewood Manor Scottsboro AL - 680 4,038 - 680 4,038 4,718 1,202 3,516 1998 2011 35 years
Chandler Memory Care Community Chandler AZ - 2,910 8,882 184 3,094 8,882 11,976 2,681 9,295 2012 2012 35 years
Silver Creek Inn Memory Care Community Gilbert AZ - 890 5,918 - 890 5,918 6,808 1,664 5,144 2012 2012 35 years
Prestige Assisted Living at Green Valley Green Valley AZ - 1,227 13,977 - 1,227 13,977 15,204 2,779 12,425 1998 2014 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Prestige Assisted Living at Lake Havasu City Lake Havasu AZ - 594 14,792 - 594 14,792 15,386 2,925 12,461 1999 2014 35 years
Arbor Rose Mesa AZ - 1,100 11,880 2,434 1,100 14,314 15,414 5,874 9,540 1999 2011 35 years
The Stratford Phoenix AZ - 1,931 33,576 1,221 1,931 34,797 36,728 6,765 29,963 2001 2014 35 years
Amber Creek Inn Memory Care Scottsdale AZ - 2,310 6,322 677 2,185 7,124 9,309 1,236 8,073 1986 2011 35 years
Prestige Assisted Living at Sierra Vista Sierra Vista AZ - 295 13,224 - 295 13,224 13,519 2,610 10,909 1999 2014 35 years
Rock Creek Memory Care Community Surprise AZ 9,687 826 16,353 3 826 16,356 17,182 1,666 15,516 2017 2017 35 years
Elmcroft of Tempe Tempe AZ - 1,090 12,942 1,846 1,098 14,780 15,878 4,861 11,017 1999 2011 35 years
Elmcroft of River Centre Tucson AZ - 1,940 5,195 1,374 1,940 6,569 8,509 2,549 5,960 1999 2011 35 years
West Shores Hot Springs AR - 1,326 10,904 2,091 1,326 12,995 14,321 5,572 8,749 1988 2005 35 years
Elmcroft of Maumelle Maumelle AR - 1,252 7,601 682 1,359 8,176 9,535 3,346 6,189 1997 2006 35 years
Elmcroft of Mountain Home Mountain Home AR - 204 8,971 521 204 9,492 9,696 3,889 5,807 1997 2006 35 years
Elmcroft of Sherwood Sherwood AR - 1,320 5,693 623 1,323 6,313 7,636 2,603 5,033 1997 2006 35 years
Sierra Ridge Memory Care Auburn CA - 681 6,071 - 681 6,071 6,752 1,211 5,541 2011 2014 35 years
Careage Banning Banning CA - 2,970 16,037 - 2,970 16,037 19,007 5,038 13,969 2004 2011 35 years
Las Villas Del Carlsbad Carlsbad CA - 1,760 30,469 5,561 1,890 35,900 37,790 13,124 24,666 1987 2006 35 years
Prestige Assisted Living at Chico Chico CA - 1,069 14,929 - 1,069 14,929 15,998 2,962 13,036 1998 2014 35 years
The Meadows Senior Living Elk Grove CA - 1,308 19,667 - 1,308 19,667 20,975 3,868 17,107 2003 2014 35 years
Alder Bay Assisted Living Eureka CA - 1,170 5,228 (70) 1,170 5,158 6,328 1,729 4,599 1997 2011 35 years
Cedarbrook Fresno CA - 1,652 12,613 - 1,652 12,613 14,265 1,625 12,640 2014 2017 35 years
Elmcroft of La Mesa La Mesa CA - 2,431 6,101 (1,369) 2,431 4,732 7,163 2,536 4,627 1997 2006 35 years
Grossmont Gardens La Mesa CA - 9,104 59,349 3,631 9,115 62,969 72,084 25,444 46,640 1964 2006 35 years
Palms, The La Mirada CA - 2,700 43,919 (260) 2,700 43,659 46,359 9,321 37,038 1990 2013 35 years
Prestige Assisted Living at Lancaster Lancaster CA - 718 10,459 - 718 10,459 11,177 2,075 9,102 1999 2014 35 years
Prestige Assisted Living at Marysville Marysville CA - 741 7,467 - 741 7,467 8,208 1,487 6,721 1999 2014 35 years
Mountview Retirement Residence Montrose CA - 1,089 15,449 3,208 1,089 18,657 19,746 6,603 13,143 1974 2006 35 years
Redwood Retirement Napa CA - 2,798 12,639 133 2,798 12,772 15,570 2,711 12,859 1986 2013 35 years
Prestige Assisted Living at Oroville Oroville CA - 638 8,079 - 638 8,079 8,717 1,605 7,112 1999 2014 35 years
Valencia Commons Rancho Cucamonga CA - 1,439 36,363 (418) 1,439 35,945 37,384 7,687 29,697 2002 2013 35 years
Shasta Estates Redding CA - 1,180 23,463 (58) 1,180 23,405 24,585 4,983 19,602 2009 2013 35 years
The Vistas Redding CA - 1,290 22,033 - 1,290 22,033 23,323 6,561 16,762 2007 2011 35 years
Elmcroft of Point Loma San Diego CA - 2,117 6,865 (1,416) 16 7,550 7,566 2,935 4,631 1999 2006 35 years
Villa Santa Barbara Santa Barbara CA - 1,219 12,426 5,357 1,219 17,783 19,002 6,522 12,480 1977 2005 35 years
Oak Terrace Memory Care Soulsbyville CA - 1,146 5,275 - 1,146 5,275 6,421 1,067 5,354 1999 2014 35 years
Skyline Place Senior Living Sonora CA - 1,815 28,472 - 1,815 28,472 30,287 5,620 24,667 1996 2014 35 years
Eagle Lake Village Susanville CA - 1,165 6,719 - 1,165 6,719 7,884 1,778 6,106 2006 2012 35 years
Bonaventure, The Ventura CA - 5,294 32,747 (496) 5,294 32,251 37,545 6,936 30,609 2005 2013 35 years
Sterling Inn Victorville CA 12,558 733 18,564 6,925 733 25,489 26,222 2,514 23,708 1992 2017 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Sterling Commons Victorville CA 5,850 768 13,124 - 768 13,124 13,892 1,632 12,260 1994 2017 35 years
Prestige Assisted Living at Visalia Visalia CA - 1,300 8,378 - 1,300 8,378 9,678 1,679 7,999 1998 2014 35 years
Highland Trail Broomfield CO - 2,511 26,431 (370) 2,511 26,061 28,572 5,596 22,976 2009 2013 35 years
Caley Ridge Englewood CO - 1,157 13,133 - 1,157 13,133 14,290 3,476 10,814 1999 2012 35 years
Garden Square at Westlake Greeley CO - 630 8,211 - 630 8,211 8,841 2,530 6,311 1998 2011 35 years
Garden Square of Greeley Greeley CO - 330 2,735 - 330 2,735 3,065 848 2,217 1995 2011 35 years
Lakewood Estates Lakewood CO - 1,306 21,137 (2) 1,306 21,135 22,441 4,508 17,933 1988 2013 35 years
Sugar Valley Estates Loveland CO - 1,255 21,837 (240) 1,255 21,597 22,852 4,627 18,225 2009 2013 35 years
Devonshire Acres Sterling CO - 950 10,092 555 965 10,632 11,597 3,481 8,116 1979 2011 35 years
The Hearth at Gardenside Branford CT - 7,000 31,518 - 7,000 31,518 38,518 9,377 29,141 1999 2011 35 years
The Hearth at Tuxis Pond Madison CT - 1,610 44,322 - 1,610 44,322 45,932 12,695 33,237 2002 2011 35 years
White Oaks Manchester CT - 2,584 34,507 (474) 2,584 34,033 36,617 7,302 29,315 2007 2013 35 years
Hampton Manor Belleview Belleview FL - 390 8,337 100 390 8,437 8,827 2,539 6,288 1988 2011 35 years
Sabal House Cantonment FL - 430 5,902 - 430 5,902 6,332 1,760 4,572 1999 2011 35 years
Bristol Park of Coral Springs Coral Springs FL - 3,280 11,877 2,372 3,280 14,249 17,529 4,077 13,452 1999 2011 35 years
Stanley House Defuniak Springs FL - 410 5,659 - 410 5,659 6,069 1,685 4,384 1999 2011 35 years
Barrington Terrace of Ft. Myers Fort Myers FL - 2,105 18,190 1,659 2,110 19,844 21,954 4,860 17,094 2001 2015 35 years
The Peninsula Hollywood FL - 3,660 9,122 1,416 3,660 10,538 14,198 3,499 10,699 1972 2011 35 years
Elmcroft of Timberlin Parc Jacksonville FL - 455 5,905 641 455 6,546 7,001 2,714 4,287 1998 2006 35 years
Forsyth House Milton FL - 610 6,503 - 610 6,503 7,113 1,923 5,190 1999 2011 35 years
Barrington Terrace of Naples Naples FL - 2,596 18,716 1,750 2,610 20,452 23,062 4,535 18,527 2004 2015 35 years
The Carlisle Naples Naples FL - 8,406 78,091 - 8,406 78,091 86,497 22,458 64,039 1998 2011 35 years
Naples ALZ Development Naples FL - 2,983 - - 2,983 - 2,983 - 2,983 CIP CIP CIP
Hampton Manor at 24th Road Ocala FL - 690 8,767 121 690 8,888 9,578 2,613 6,965 1996 2011 35 years
Hampton Manor at Deerwood Ocala FL - 790 5,605 3,818 983 9,230 10,213 2,550 7,663 2005 2011 35 years
Las Palmas Palm Coast FL - 984 30,009 (219) 984 29,790 30,774 6,358 24,416 2009 2013 35 years
Elmcroft of Pensacola Pensacola FL - 2,230 2,362 997 2,240 3,349 5,589 1,143 4,446 1999 2011 35 years
Magnolia House Quincy FL - 400 5,190 - 400 5,190 5,590 1,567 4,023 1999 2011 35 years
Elmcroft of Tallahassee Tallahassee FL - 2,430 17,745 435 2,448 18,162 20,610 5,465 15,145 1999 2011 35 years
Tallahassee Memory Care Tallahassee FL - 640 8,013 (5,473) 653 2,527 3,180 2,153 1,027 1999 2011 35 years
Bristol Park of Tamarac Tamarac FL - 3,920 14,130 2,207 3,920 16,337 20,257 4,720 15,537 2000 2011 35 years
Elmcroft of Carrolwood Tampa FL - 5,410 20,944 (7,544) 5,417 13,393 18,810 6,992 11,818 2001 2011 35 years
Arbor Terrace of Athens Athens GA - 1,767 16,442 683 1,777 17,115 18,892 3,775 15,117 1998 2015 35 years
Arbor Terrace at Cascade Atlanta GA - 3,052 9,040 956 3,057 9,991 13,048 3,089 9,959 1999 2015 35 years
Augusta Gardens Augusta GA - 530 10,262 308 543 10,557 11,100 3,286 7,814 1997 2011 35 years
Benton House of Covington Covington GA - 1,297 11,397 441 1,298 11,837 13,135 2,676 10,459 2009 2015 35 years
Arbor Terrace of Decatur Decatur GA - 3,102 19,599 (403) 1,298 21,000 22,298 4,459 17,839 1990 2015 35 years
Benton House of Douglasville Douglasville GA - 1,697 15,542 224 1,697 15,766 17,463 3,394 14,069 2010 2015 35 years
Elmcroft of Martinez Martinez GA - 408 6,764 1,054 408 7,818 8,226 2,885 5,341 1997 2007 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Benton House of Newnan Newnan GA - 1,474 17,487 319 1,487 17,793 19,280 3,766 15,514 2010 2015 35 years
Elmcroft of Roswell Roswell GA - 1,867 15,835 806 1,880 16,628 18,508 3,357 15,151 1997 2014 35 years
Benton Village of Stockbridge Stockbridge GA - 2,221 21,989 868 2,232 22,846 25,078 5,041 20,037 2008 2015 35 years
Benton House of Sugar Hill Sugar Hill GA - 2,173 14,937 265 2,183 15,192 17,375 3,446 13,929 2010 2015 35 years
Villas of St. James - Breese, IL Breese IL - 671 6,849 - 671 6,849 7,520 1,657 5,863 2009 2015 35 years
Villas of Holly Brook - Chatham, IL Chatham IL - 1,185 8,910 - 1,185 8,910 10,095 2,240 7,855 2012 2015 35 years
Villas of Holly Brook - Effingham, IL Effingham IL - 508 6,624 - 508 6,624 7,132 1,565 5,567 2011 2015 35 years
Villas of Holly Brook - Herrin, IL Herrin IL - 2,175 9,605 - 2,175 9,605 11,780 2,798 8,982 2012 2015 35 years
Villas of Holly Brook - Marshall, IL Marshall IL - 1,461 4,881 - 1,461 4,881 6,342 1,630 4,712 2012 2015 35 years
Villas of Holly Brook - Newton, IL Newton IL - 458 4,590 - 458 4,590 5,048 1,197 3,851 2011 2015 35 years
Rochester Senior Living at Wyndcrest Rochester IL - 570 6,536 249 570 6,785 7,355 1,642 5,713 2005 2015 35 years
Villas of Holly Brook, Shelbyville, IL Shelbyville IL - 2,292 3,351 - 2,292 3,351 5,643 1,810 3,833 2011 2015 35 years
Elmcroft of Muncie Muncie IN - 244 11,218 1,121 324 12,259 12,583 4,664 7,919 1998 2007 35 years
Wood Ridge South Bend IN - 590 4,850 (35) 590 4,815 5,405 1,469 3,936 1990 2011 35 years
Elmcroft of Florence (KY) Florence KY - 1,535 21,826 1,067 1,581 22,847 24,428 4,637 19,791 2010 2014 35 years
Hartland Hills Lexington KY - 1,468 23,929 (368) 1,468 23,561 25,029 5,054 19,975 2001 2013 35 years
Elmcroft of Mount Washington Mount Washington KY - 758 12,048 840 758 12,888 13,646 2,755 10,891 2005 2014 35 years
Clover Healthcare Auburn ME - 1,400 26,895 876 1,400 27,771 29,171 8,731 20,440 1982 2011 35 years
Gorham House Gorham ME - 1,360 33,147 1,472 1,527 34,452 35,979 9,873 26,106 1990 2011 35 years
Kittery Estates Kittery ME - 1,531 30,811 (321) 1,557 30,464 32,021 6,525 25,496 2009 2013 35 years
Woods at Canco Portland ME - 1,441 45,578 (676) 1,474 44,869 46,343 9,616 36,727 2000 2013 35 years
Sentry Inn at York Harbor York Harbor ME - 3,490 19,869 - 3,490 19,869 23,359 5,806 17,553 2000 2011 35 years
Elmcroft of Hagerstown Hagerstown MD - 2,010 1,293 561 1,996 1,868 3,864 734 3,130 1999 2011 35 years
Heritage Woods Agawam MA - 1,249 4,625 - 1,249 4,625 5,874 2,818 3,056 1997 2004 30 years
Devonshire Estates Lenox MA - 1,832 31,124 (332) 1,832 30,792 32,624 6,590 26,034 1998 2013 35 years
Elmcroft of Downriver Brownstown Charter Township MI - 320 32,652 1,360 371 33,961 34,332 9,983 24,349 2000 2011 35 years
Independence Village of East Lansing East Lansing MI - 1,956 18,122 423 1,956 18,545 20,501 4,880 15,621 1989 2012 35 years
Primrose Austin Austin MN - 2,540 11,707 443 2,540 12,150 14,690 3,540 11,150 2002 2011 35 years
Primrose Duluth Duluth MN - 6,190 8,296 257 6,245 8,498 14,743 2,774 11,969 2003 2011 35 years
Primrose Mankato Mankato MN - 1,860 8,920 352 1,860 9,272 11,132 2,985 8,147 1999 2011 35 years
Lodge at White Bear White Bear Lake MN - 732 24,999 (129) 737 24,865 25,602 5,304 20,298 2002 2013 35 years
Assisted Living at the Meadowlands - O'Fallon, MO O'Fallon MO - 2,326 14,158 - 2,326 14,158 16,484 3,499 12,985 1999 2015 35 years
Canyon Creek Inn Memory Care Billings MT - 420 11,217 7 420 11,224 11,644 3,193 8,451 2011 2011 35 years
Spring Creek Inn Alzheimer's Community Bozeman MT - 1,345 16,877 - 1,345 16,877 18,222 2,162 16,060 2010 2017 35 years
The Springs at Missoula Missoula MT 15,616 1,975 34,390 2,076 1,975 36,466 38,441 9,733 28,708 2004 2012 35 years
Crown Pointe Omaha NE - 1,316 11,950 3,118 1,316 15,068 16,384 6,042 10,342 1985 2005 35 years
Prestige Assisted Living at Mira Loma Henderson NV - 1,279 12,558 - 1,279 12,558 13,837 2,006 11,831 1998 2016 35 years
Birch Heights Derry NH - 1,413 30,267 (304) 1,413 29,963 31,376 6,414 24,962 2009 2013 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Bear Canyon Estates Albuquerque NM - 1,879 36,223 (368) 1,879 35,855 37,734 7,664 30,070 1997 2013 35 years
The Woodmark at Uptown Albuquerque NM - 2,439 33,276 2,081 2,471 35,325 37,796 7,231 30,565 2000 2015 35 years
Elmcroft of Quintessence Albuquerque NM - 1,150 26,527 1,195 1,184 27,688 28,872 8,271 20,601 1998 2011 35 years
The Amberleigh Buffalo NY - 3,498 19,097 7,269 3,512 26,352 29,864 9,858 20,006 1988 2005 35 years
Brookdale Battery Park City New York NY 116,100 2,903 186,978 1,490 2,913 188,458 191,371 14,043 177,328 2000 2018 35 years
The Hearth at Castle Gardens Vestal NY - 1,830 20,312 2,230 1,885 22,487 24,372 8,251 16,121 1994 2011 35 years
Elmcroft of Asheboro Asheboro NC - 680 15,370 522 694 15,878 16,572 4,329 12,243 1998 2011 35 years
Arbor Terrace of Asheville Asheville NC - 1,365 15,679 924 1,365 16,603 17,968 3,754 14,214 1998 2015 35 years
Elmcroft of Little Avenue Charlotte NC - 250 5,077 510 250 5,587 5,837 2,305 3,532 1997 2006 35 years
Elmcroft of Cramer Mountain Cramerton NC - 530 18,225 225 553 18,427 18,980 5,049 13,931 1999 2011 35 years
Elmcroft of Harrisburg Harrisburg NC - 1,660 15,130 711 1,685 15,816 17,501 4,310 13,191 1997 2011 35 years
Elmcroft of Hendersonville (NC) Hendersonville NC - 2,210 7,372 336 2,236 7,682 9,918 2,187 7,731 2005 2011 35 years
Elmcroft of Hillsborough Hillsborough NC - 1,450 19,754 383 1,470 20,117 21,587 5,533 16,054 2005 2011 35 years
Willow Grove Matthews NC - 763 27,544 (274) 763 27,270 28,033 5,834 22,199 2009 2013 35 years
Elmcroft of Newton Newton NC - 540 14,935 418 544 15,349 15,893 4,188 11,705 2000 2011 35 years
Independence Village of Olde Raleigh Raleigh NC - 1,989 18,648 7 1,989 18,655 20,644 4,843 15,801 1991 2012 35 years
Elmcroft of Northridge Raleigh NC - 184 3,592 2,357 207 5,926 6,133 2,113 4,020 1984 2006 35 years
Elmcroft of Salisbury Salisbury NC - 1,580 25,026 394 1,580 25,420 27,000 6,939 20,061 1999 2011 35 years
Elmcroft of Shelby Shelby NC - 660 15,471 488 675 15,944 16,619 4,334 12,285 2000 2011 35 years
Elmcroft of Southern Pines Southern Pines NC - 1,196 10,766 966 1,210 11,718 12,928 3,674 9,254 1998 2010 35 years
Elmcroft of Southport Southport NC - 1,330 10,356 253 1,349 10,590 11,939 2,984 8,955 2005 2011 35 years
Primrose Bismarck Bismarck ND - 1,210 9,768 255 1,210 10,023 11,233 3,042 8,191 1994 2011 35 years
Wellington ALF - Minot ND Minot ND - 3,241 9,509 - 3,241 9,509 12,750 2,745 10,005 2005 2015 35 years
Elmcroft of Lima Lima OH - 490 3,368 553 495 3,916 4,411 1,623 2,788 1998 2006 35 years
Elmcroft of Ontario Mansfield OH - 523 7,968 599 524 8,566 9,090 3,482 5,608 1998 2006 35 years
Elmcroft of Medina Medina OH - 661 9,788 706 661 10,494 11,155 4,322 6,833 1999 2006 35 years
Elmcroft of Washington Township Miamisburg OH - 1,235 12,611 743 1,236 13,353 14,589 5,479 9,110 1998 2006 35 years
Elmcroft of Sagamore Hills Sagamore Hills OH - 980 12,604 995 998 13,581 14,579 5,569 9,010 2000 2006 35 years
Elmcroft of Lorain Vermilion OH - 500 15,461 1,359 578 16,742 17,320 5,410 11,910 2000 2011 35 years
Gardens at Westlake Senior Living Westlake OH - 2,401 20,640 690 2,413 21,318 23,731 4,874 18,857 1987 2015 35 years
Elmcroft of Xenia Xenia OH - 653 2,801 1,052 678 3,828 4,506 1,550 2,956 1999 2006 35 years
Arbor House of Mustang Mustang OK - 372 3,587 - 372 3,587 3,959 913 3,046 1999 2012 35 years
Arbor House of Norman Norman OK - 444 7,525 - 444 7,525 7,969 1,907 6,062 2000 2012 35 years
Arbor House Reminisce Center Norman OK - 438 3,028 - 438 3,028 3,466 773 2,693 2004 2012 35 years
Arbor House of Midwest City Oklahoma City OK - 544 9,133 - 544 9,133 9,677 2,314 7,363 2004 2012 35 years
Mansion at Waterford Oklahoma City OK - 2,077 14,184 - 2,077 14,184 16,261 3,754 12,507 1999 2012 35 years
Meadowbrook Place Baker City OR - 1,430 5,311 - 1,430 5,311 6,741 1,066 5,675 1965 2014 35 years
Edgewood Downs Beaverton OR - 2,356 15,476 328 2,356 15,804 18,160 3,352 14,808 1978 2013 35 years
Avamere at Hillsboro Hillsboro OR - 4,400 8,353 1,413 4,400 9,766 14,166 3,296 10,870 2000 2011 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
The Springs at Tanasbourne Hillsboro OR 30,947 4,689 55,035 - 4,689 55,035 59,724 15,653 44,071 2009 2013 35 years
The Arbor at Avamere Court Keizer OR - 922 6,460 110 1,135 6,357 7,492 1,549 5,943 2012 2014 35 years
The Stafford Lake Oswego OR - 1,800 16,122 884 1,806 17,000 18,806 5,272 13,534 2008 2011 35 years
The Springs at Clackamas Woods Milwaukie OR 13,965 1,264 22,429 5,244 1,381 27,556 28,937 6,579 22,358 1999 2012 35 years
Clackamas Woods Assisted Living Milwaukie OR 7,519 681 12,077 - 681 12,077 12,758 3,181 9,577 1999 2012 35 years
Avamere at Newberg Newberg OR - 1,320 4,664 641 1,342 5,283 6,625 2,007 4,618 1999 2011 35 years
Avamere Living at Berry Park Oregon City OR - 1,910 4,249 2,316 1,910 6,565 8,475 2,493 5,982 1972 2011 35 years
McLoughlin Place Senior Living Oregon City OR - 2,418 26,819 - 2,418 26,819 29,237 5,321 23,916 1997 2014 35 years
Avamere at Bethany Portland OR - 3,150 16,740 257 3,150 16,997 20,147 5,236 14,911 2002 2011 35 years
Avamere at Sandy Sandy OR - 1,000 7,309 345 1,000 7,654 8,654 2,580 6,074 1999 2011 35 years
Suzanne Elise ALF Seaside OR - 1,940 4,027 631 1,945 4,653 6,598 1,695 4,903 1998 2011 35 years
Necanicum Village Seaside OR - 2,212 7,311 273 2,212 7,584 9,796 1,668 8,128 2001 2015 35 years
Avamere at Sherwood Sherwood OR - 1,010 7,051 1,454 1,010 8,505 9,515 2,518 6,997 2000 2011 35 years
Chateau Gardens Springfield OR - 1,550 4,197 - 1,550 4,197 5,747 1,247 4,500 1991 2011 35 years
Avamere at St Helens St. Helens OR - 1,410 10,496 502 1,410 10,998 12,408 3,580 8,828 2000 2011 35 years
Flagstone Senior Living The Dalles OR - 1,631 17,786 - 1,631 17,786 19,417 3,523 15,894 1991 2014 35 years
Elmcroft of Allison Park Allison Park PA - 1,171 5,686 565 1,171 6,251 7,422 2,509 4,913 1986 2006 35 years
Elmcroft of Chippewa Beaver Falls PA - 1,394 8,586 658 1,452 9,186 10,638 3,713 6,925 1998 2006 35 years
Elmcroft of Berwick Berwick PA - 111 6,741 481 111 7,222 7,333 2,913 4,420 1998 2006 35 years
Elmcroft of Bridgeville Bridgeville PA - 1,660 12,624 1,157 1,660 13,781 15,441 3,888 11,553 1999 2011 35 years
Elmcroft of Dillsburg Dillsburg PA - 432 7,797 1,152 432 8,949 9,381 3,445 5,936 1998 2006 35 years
Elmcroft of Altoona Duncansville PA - 331 4,729 614 331 5,343 5,674 2,169 3,505 1997 2006 35 years
Elmcroft of Lebanon Lebanon PA - 240 7,336 555 249 7,882 8,131 3,246 4,885 1999 2006 35 years
Elmcroft of Lewisburg Lewisburg PA - 232 5,666 578 238 6,238 6,476 2,544 3,932 1999 2006 35 years
Lehigh Commons Macungie PA - 420 4,406 450 420 4,856 5,276 3,034 2,242 1997 2004 30 years
Elmcroft of Loyalsock Montoursville PA - 413 3,412 564 429 3,960 4,389 1,639 2,750 1999 2006 35 years
Highgate at Paoli Pointe Paoli PA - 1,151 9,079 - 1,151 9,079 10,230 5,227 5,003 1997 2004 30 years
Elmcroft of Mid Valley Peckville PA - 619 11,662 320 619 11,982 12,601 2,412 10,189 1998 2014 35 years
Sanatoga Court Pottstown PA - 360 3,233 - 360 3,233 3,593 1,908 1,685 1997 2004 30 years
Berkshire Commons Reading PA - 470 4,301 - 470 4,301 4,771 2,536 2,235 1997 2004 30 years
Mifflin Court Reading PA - 689 4,265 351 689 4,616 5,305 2,485 2,820 1997 2004 35 years
Elmcroft of Reading Reading PA - 638 4,942 573 659 5,494 6,153 2,216 3,937 1998 2006 35 years
Elmcroft of Reedsville Reedsville PA - 189 5,170 513 189 5,683 5,872 2,324 3,548 1998 2006 35 years
Elmcroft of Shippensburg Shippensburg PA - 203 7,634 696 217 8,316 8,533 3,343 5,190 1999 2006 35 years
Elmcroft of State College State College PA - 320 7,407 470 325 7,872 8,197 3,211 4,986 1997 2006 35 years
Elmcroft of York York PA - 1,260 6,923 460 1,298 7,345 8,643 2,115 6,528 1999 2011 35 years
The Garden House Anderson SC - 969 15,613 326 974 15,934 16,908 3,493 13,415 2000 2015 35 years
Forest Pines Columbia SC - 1,058 27,471 (392) 1,058 27,079 28,137 5,797 22,340 1998 2013 35 years
Elmcroft of Florence SC Florence SC - 108 7,620 1,295 122 8,901 9,023 3,756 5,267 1998 2006 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Carolina Gardens at Garden City Murrells Inlet SC - 1,095 8,618 91 1,095 8,709 9,804 328 9,476 1999 2019 35 years
Carolina Gardens at Rock Hill Rock Hill SC - 790 9,568 109 790 9,677 10,467 359 10,108 2008 2019 35 years
Primrose Aberdeen Aberdeen SD - 850 659 235 850 894 1,744 538 1,206 1991 2011 35 years
Primrose Place Aberdeen SD - 310 3,242 53 310 3,295 3,605 1,017 2,588 2000 2011 35 years
Primrose Rapid City Rapid City SD - 860 8,722 88 860 8,810 9,670 2,729 6,941 1997 2011 35 years
Primrose Sioux Falls Sioux Falls SD - 2,180 12,936 315 2,180 13,251 15,431 4,172 11,259 2002 2011 35 years
Elmcroft of Bristol Bristol TN - 470 16,006 753 480 16,749 17,229 4,634 12,595 1999 2011 35 years
Elmcroft of Hamilton Place Chattanooga TN - 87 4,248 640 87 4,888 4,975 2,008 2,967 1998 2006 35 years
Elmcroft of Shallowford Chattanooga TN - 580 7,568 1,554 636 9,066 9,702 3,203 6,499 1999 2011 35 years
Elmcroft of Hendersonville Hendersonville TN - 600 5,304 900 600 6,204 6,804 1,335 5,469 1999 2014 35 years
Regency House Hixson TN - 140 6,611 - 140 6,611 6,751 1,956 4,795 2000 2011 35 years
Elmcroft of Jackson Jackson TN - 768 16,840 186 797 16,997 17,794 3,696 14,098 1998 2014 35 years
Elmcroft of Johnson City Johnson City TN - 590 10,043 472 610 10,495 11,105 2,960 8,145 1999 2011 35 years
Elmcroft of Kingsport Kingsport TN - 22 7,815 845 22 8,660 8,682 3,477 5,205 2000 2006 35 years
Arbor Terrace of Knoxville Knoxville TN - 590 15,862 1,163 590 17,025 17,615 3,925 13,690 1997 2015 35 years
Elmcroft of West Knoxville Knoxville TN - 439 10,697 1,077 464 11,749 12,213 4,832 7,381 2000 2006 35 years
Elmcroft of Halls Knoxville TN - 387 4,948 665 387 5,613 6,000 1,207 4,793 1998 2014 35 years
Elmcroft of Lebanon Lebanon TN - 180 7,086 1,371 200 8,437 8,637 3,530 5,107 2000 2006 35 years
Elmcroft of Bartlett Memphis TN - 570 25,552 (8,580) 594 16,948 17,542 7,783 9,759 1999 2011 35 years
The Glenmary Memphis TN - 510 5,860 3,124 510 8,984 9,494 3,373 6,121 1964 2011 35 years
Elmcroft of Murfreesboro Murfreesboro TN - 940 8,030 481 940 8,511 9,451 2,398 7,053 1999 2011 35 years
Elmcroft of Brentwood Nashville TN - 960 22,020 2,102 977 24,105 25,082 7,312 17,770 1998 2011 35 years
Elmcroft of Arlington Arlington TX - 2,650 14,060 1,425 2,660 15,475 18,135 5,004 13,131 1998 2011 35 years
Meadowbrook ALZ Arlington TX - 755 4,677 940 755 5,617 6,372 1,414 4,958 2012 2012 35 years
Elmcroft of Austin Austin TX - 2,770 25,820 1,482 2,776 27,296 30,072 8,270 21,802 2000 2011 35 years
Elmcroft of Bedford Bedford TX - 770 19,691 1,736 776 21,421 22,197 6,689 15,508 1999 2011 35 years
Highland Estates Cedar Park TX - 1,679 28,943 (270) 1,679 28,673 30,352 6,137 24,215 2009 2013 35 years
Elmcroft of Rivershire Conroe TX - 860 32,671 1,409 860 34,080 34,940 10,197 24,743 1997 2011 35 years
Flower Mound Flower Mound TX - 900 5,512 - 900 5,512 6,412 1,664 4,748 1995 2011 35 years
Bridgewater Memory Care Granbury TX - 390 8,186 - 390 8,186 8,576 2,072 6,504 2007 2012 35 years
Copperfield Estates Houston TX - 1,216 21,135 (135) 1,216 21,000 22,216 4,480 17,736 2009 2013 35 years
Elmcroft of Braeswood Houston TX - 3,970 15,919 (4,816) 3,974 11,099 15,073 5,492 9,581 1999 2011 35 years
Elmcroft of Cy-Fair Houston TX - 1,580 21,801 1,449 1,593 23,237 24,830 7,054 17,776 1998 2011 35 years
Whitley Place Keller TX - - 5,100 773 - 5,873 5,873 2,127 3,746 1998 2008 35 years
Elmcroft of Lake Jackson Lake Jackson TX - 710 14,765 1,346 712 16,109 16,821 5,089 11,732 1998 2011 35 years
Polo Park Estates Midland TX - 765 29,447 (292) 765 29,155 29,920 6,238 23,682 1996 2013 35 years
Arbor Hills Memory Care Community Plano TX - 1,014 5,719 - 1,014 5,719 6,733 1,373 5,360 2013 2013 35 years
Lakeshore Assisted Living and Memory Care Rockwall TX - 1,537 12,883 - 1,537 12,883 14,420 3,282 11,138 2009 2012 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Elmcroft of Windcrest San Antonio TX - 920 13,011 (164) 932 12,835 13,767 4,673 9,094 1999 2011 35 years
Paradise Springs Spring TX - 1,488 24,556 (60) 1,490 24,494 25,984 5,204 20,780 2008 2013 35 years
Canyon Creek Memory Care Temple TX - 473 6,750 - 473 6,750 7,223 1,712 5,511 2008 2012 35 years
Elmcroft of Cottonwood Temple TX - 630 17,515 1,210 630 18,725 19,355 5,792 13,563 1997 2011 35 years
Elmcroft of Mainland Texas City TX - 520 14,849 1,466 574 16,261 16,835 5,186 11,649 1996 2011 35 years
Elmcroft of Victoria Victoria TX - 440 13,040 1,378 448 14,410 14,858 4,556 10,302 1997 2011 35 years
Windsor Court Senior Living Weatherford TX - 233 3,347 - 233 3,347 3,580 849 2,731 1994 2012 35 years
Elmcroft of Wharton Wharton TX - 320 13,799 1,252 352 15,019 15,371 4,890 10,481 1996 2011 35 years
Mountain Ridge South Ogden UT - 1,243 24,659 99 1,243 24,758 26,001 4,857 21,144 2001 2014 35 years
Elmcroft of Chesterfield Richmond VA - 829 6,534 837 836 7,364 8,200 2,958 5,242 1999 2006 35 years
Pheasant Ridge Roanoke VA - 1,813 9,027 - 1,813 9,027 10,840 2,390 8,450 1999 2012 35 years
Cascade Valley Senior Living Arlington WA - 1,413 6,294 - 1,413 6,294 7,707 1,243 6,464 1995 2014 35 years
Madison House Kirkland WA - 4,291 26,787 1,391 4,414 28,055 32,469 3,680 28,789 1978 2017 35 years
Delaware Plaza Longview WA 3,932 620 5,116 136 815 5,057 5,872 815 5,057 1972 2017 35 years
Canterbury Gardens Longview WA 5,351 444 13,715 157 444 13,872 14,316 1,791 12,525 1998 2017 35 years
Canterbury Inn Longview WA 14,568 1,462 34,664 837 1,462 35,501 36,963 4,568 32,395 1989 2017 35 years
Canterbury Park Longview WA - 969 30,109 - 969 30,109 31,078 3,837 27,241 2000 2017 35 years
Bishop Place Senior Living Pullman WA - 1,780 33,608 - 1,780 33,608 35,388 6,539 28,849 1998 2014 35 years
Willow Gardens Puyallup WA - 1,959 35,492 (285) 1,980 35,186 37,166 7,519 29,647 1996 2013 35 years
Cascade Inn Vancouver WA 12,378 3,201 19,024 2,321 3,527 21,019 24,546 3,329 21,217 1979 2017 35 years
The Hampton & Ashley Inn Vancouver WA - 1,855 21,047 - 1,855 21,047 22,902 2,670 20,232 1992 2017 35 years
The Hampton at Salmon Creek Vancouver WA 11,450 1,256 21,686 - 1,256 21,686 22,942 2,569 20,373 2013 2017 35 years
Elmcroft of Teays Valley Hurricane WV - 1,950 14,489 736 2,041 15,134 17,175 4,219 12,956 1999 2011 35 years
Elmcroft of Martinsburg Martinsburg WV - 248 8,320 911 253 9,226 9,479 3,686 5,793 1999 2006 35 years
Matthews of Appleton I Appleton WI - 130 1,834 (1,035) 130 799 929 567 362 1996 2011 35 years
Matthews of Appleton II Appleton WI - 140 2,016 (1,085) 140 931 1,071 709 362 1997 2011 35 years
Hunters Ridge Beaver Dam WI - 260 2,380 - 260 2,380 2,640 739 1,901 1998 2011 35 years
Azura Memory Care of Beloit Beloit WI - 150 4,356 427 191 4,742 4,933 1,344 3,589 1990 2011 35 years
Azura Memory Care of Clinton Clinton WI - 290 4,390 - 290 4,390 4,680 1,276 3,404 1991 2011 35 years
Creekside Cudahy WI - 760 1,693 - 760 1,693 2,453 563 1,890 2001 2011 35 years
Azura Memory Care of Eau Claire Eau Claire WI - 210 6,259 - 210 6,259 6,469 1,792 4,677 1996 2011 35 years
Azura Memory Care of Eau Claire II Eau Claire WI - 1,188 6,654 68 1,188 6,722 7,910 542 7,368 2019 2019 35 years
Chapel Valley Fitchburg WI - 450 2,372 - 450 2,372 2,822 747 2,075 1998 2011 35 years
Matthews of Milwaukee II Fox Point WI - 1,810 943 (1,444) 942 367 1,309 440 869 1999 2011 35 years
Laurel Oaks Glendale WI - 2,390 43,587 5,130 2,510 48,597 51,107 14,787 36,320 1988 2011 35 years
Layton Terrace Greenfield WI - 3,490 39,201 566 3,480 39,777 43,257 11,809 31,448 1999 2011 35 years
Matthews of Hartland Hartland WI - 640 1,663 (768) 652 883 1,535 665 870 1985 2011 35 years
Matthews of Horicon Horicon WI - 340 3,327 (1,235) 345 2,087 2,432 1,127 1,305 2002 2011 35 years
Jefferson Jefferson WI - 330 2,384 - 330 2,384 2,714 741 1,973 1997 2011 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Azura Memory Care of Kenosha Kenosha WI - 710 3,254 3,765 1,165 6,564 7,729 1,951 5,778 1996 2011 35 years
Azura Memory Care of Manitowoc Manitowoc WI - 140 1,520 - 140 1,520 1,660 465 1,195 1997 2011 35 years
The Arboretum Menomonee Falls WI - 5,640 49,083 2,158 5,640 51,241 56,881 15,956 40,925 1989 2011 35 years
Matthews of Milwaukee I Milwaukee WI - 1,800 935 (1,407) 927 401 1,328 458 870 1999 2011 35 years
Hart Park Square Milwaukee WI - 1,900 21,628 69 1,900 21,697 23,597 6,395 17,202 2005 2011 35 years
Azura Memory Care of Monroe Monroe WI - 490 4,964 - 490 4,964 5,454 1,455 3,999 1990 2011 35 years
Matthews of Neenah I Neenah WI - 710 1,157 (597) 713 557 1,270 487 783 2006 2011 35 years
Matthews of Neenah II Neenah WI - 720 2,339 (1,457) 720 882 1,602 820 782 2007 2011 35 years
Matthews of Irish Road Neenah WI - 320 1,036 (74) 320 962 1,282 456 826 2001 2011 35 years
Matthews of Oak Creek Oak Creek WI - 800 2,167 (1,373) 812 782 1,594 724 870 1997 2011 35 years
Azura Memory Care of Oak Creek Oak Creek WI - 733 6,248 11 733 6,259 6,992 1,350 5,642 2017 2017 35 years
Azura Memory Care of Oconomowoc Oconomowoc WI - 400 1,596 4,674 709 5,961 6,670 1,515 5,155 2016 2015 35 years
Wilkinson Woods of Oconomowoc Oconomowoc WI - 1,100 12,436 157 1,100 12,593 13,693 3,734 9,959 1992 2011 35 years
Azura Memory Care of Oshkosh Oshkosh WI - 190 949 - 190 949 1,139 351 788 1993 2011 35 years
Matthews of Pewaukee Pewaukee WI - 1,180 4,124 (1,804) 1,197 2,303 3,500 1,499 2,001 2001 2011 35 years
Azura Memory Care of Sheboygan Sheboygan WI - 1,060 6,208 1,905 1,094 8,079 9,173 1,978 7,195 1995 2011 35 years
Matthews of St. Francis I St. Francis WI - 1,370 1,428 (1,428) 937 433 1,370 501 869 2000 2011 35 years
Matthews of St. Francis II St. Francis WI - 1,370 1,666 (1,558) 931 547 1,478 608 870 2000 2011 35 years
Howard Village of St. Francis St. Francis WI - 2,320 17,232 - 2,320 17,232 19,552 5,159 14,393 2001 2011 35 years
Azura Memory Care of Stoughton Stoughton WI - 450 3,191 - 450 3,191 3,641 993 2,648 1992 2011 35 years
Oak Hill Terrace Waukesha WI - 2,040 40,298 - 2,040 40,298 42,338 11,929 30,409 1985 2011 35 years
Azura Memory Care of Wausau Wausau WI - 350 3,413 - 350 3,413 3,763 1,010 2,753 1997 2011 35 years
Library Square West Allis WI - 1,160 23,714 - 1,160 23,714 24,874 6,925 17,949 1996 2011 35 years
Matthews of Wrightstown Wrightstown WI - 140 376 12 140 388 528 199 329 1999 2011 35 years
Garden Square Assisted Living of Casper Casper WY - 355 3,197 - 355 3,197 3,552 907 2,645 1996 2011 35 years
Whispering Chase Cheyenne WY - 1,800 20,354 (202) 1,800 20,152 21,952 4,319 17,633 2008 2013 35 years
Ashridge Court Bexhill-on-Sea SXE - 2,274 4,791 (510) 2,110 4,445 6,555 994 5,561 2010 2015 40 years
Inglewood Nursing Home Eastbourne SXE - 1,908 3,021 (355) 1,771 2,803 4,574 717 3,857 2010 2015 40 years
Pentlow Nursing Home Eastbourne SXE - 1,964 2,462 (320) 1,822 2,284 4,106 622 3,484 2007 2015 40 years
Willows Care Home Romford ESX - 4,695 6,983 (843) 4,356 6,479 10,835 1,375 9,460 1986 2015 40 years
Cedars Care Home Southend-on-Sea ESX - 2,649 4,925 (546) 2,458 4,570 7,028 997 6,031 2014 2015 40 years
Mayflower Care Home Northfleet GSD - 4,330 7,519 (854) 4,018 6,977 10,995 1,508 9,487 2012 2015 40 years
Maples Care Home Bexleyheath KNT - 5,042 7,525 (906) 4,679 6,982 11,661 1,495 10,166 2007 2015 40 years
Barty House Nursing Home Maidstone KNT - 3,769 3,089 (494) 3,497 2,867 6,364 797 5,567 2013 2015 40 years
Tunbridge Wells Care Centre Tunbridge Wells KNT - 4,323 5,869 (734) 4,012 5,446 9,458 1,164 8,294 2010 2015 40 years
Heathlands Care Home Chingford LON - 5,398 7,967 (963) 5,009 7,393 12,402 1,613 10,789 1980 2015 40 years
Hampton Care Hampton MDX - 4,119 29,021 (1,205) 3,970 27,965 31,935 3,012 28,923 2007 2017 40 years
Parkfield House Nursing Home Uxbridge MDX - 1,974 1,009 (108) 1,903 972 2,875 133 2,742 2000 2017 40 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Princeton Village of Largo Largo FL - 1,718 10,438 (4,205) 1,718 6,233 7,951 2,551 5,400 2007 2015 35 years
Boréa Blainville QC 35,658 2,678 56,643 1,430 2,861 57,890 60,751 1,838 58,913 2016 2019 57 years
Caléo Boucherville QC 54,225 6,009 71,056 1,664 6,151 72,578 78,729 2,154 76,575 2018 2019 59 years
L'Avantage Brossard QC 20,086 8,771 44,920 1,465 8,950 46,206 55,156 1,627 53,529 2011 2019 52 years
Sevä Candiac QC 47,758 4,030 64,251 1,570 4,129 65,722 69,851 2,126 67,725 2018 2019 59 years
L'Initial Gatineau QC 49,215 6,720 62,928 1,561 6,861 64,348 71,209 1,963 69,246 2019 2019 60 years
La Croisée de l'Est Granby QC 15,335 1,136 40,998 1,143 1,159 42,118 43,277 1,553 41,724 2009 2019 50 years
Ambiance Ile-des-Soeurs,Verdun QC 20,512 5,007 51,624 1,571 5,108 53,094 58,202 1,978 56,224 2005 2019 46 years
Le Savignon Lachine QC 25,968 5,271 46,919 1,335 5,377 48,148 53,525 1,607 51,918 2013 2019 54 years
Le Cavalier Lasalle QC 14,908 5,892 38,926 1,350 6,010 40,158 46,168 1,662 44,506 2004 2019 45 years
Quartier Sud Lévis QC 29,712 1,933 47,731 650 1,931 48,383 50,314 1,536 48,778 2015 2019 56 years
Margo Lévis QC 40,060 2,034 63,523 1,285 2,078 64,764 66,842 1,977 64,865 2017 2019 60 years
Les Promenades du Parc Longueuil QC 21,495 5,832 47,101 1,662 5,950 48,645 54,595 1,986 52,609 2006 2019 47 years
Elogia Montréal QC 27,069 2,808 55,175 26,181 2,929 81,235 84,164 1,974 82,190 2007 2019 48 years
Les Jardins Millen Montréal QC 28,169 4,325 82,121 1,972 4,412 84,006 88,418 2,593 85,825 2012 2019 53 years
Le 22 Montréal QC 38,776 6,728 70,601 1,671 6,863 72,137 79,000 2,213 76,787 2016 2019 57 years
Station Est Montréal QC 44,471 4,660 59,110 1,351 4,760 60,361 65,121 1,919 63,202 2017 2019 58 years
Ora Montréal QC 56,763 10,282 82,095 3,171 10,564 84,984 95,548 2,370 93,178 2019 2019 60 years
Elogia II Montréal QC 34,044 2,627 29,299 - 2,627 29,299 31,926 - 31,926 CIP CIP CIP
Le Quartier Mont-St-Hilaire Mont-Saint-Hilaire QC 14,140 1,020 32,554 1,055 1,041 33,588 34,629 1,316 33,313 2008 2019 49 years
L'Image d'Outremont Outremont QC 15,832 4,565 32,030 1,251 4,656 33,190 37,846 1,196 36,650 2008 2019 49 years
Le Gibraltar Québec QC 20,759 1,191 42,766 1,071 1,214 43,814 45,028 1,446 43,582 2013 2019 54 years
Ékla Québec QC 52,680 2,256 87,772 1,948 2,324 89,652 91,976 2,671 89,305 2017 2019 57 years
Le Notre-Dame Repentigny QC 13,751 3,290 41,474 1,516 3,357 42,923 46,280 1,846 44,434 2002 2019 43 years
Vent de l'Ouest Sainte-Geneviève QC 12,553 4,713 32,526 1,241 4,808 33,672 38,480 1,475 37,005 2007 2019 48 years
Les Verrières du Golf Saint-Laurent QC 24,201 5,183 44,363 1,746 5,312 45,980 51,292 1,821 49,471 2003 2019 44 years
Les Jardins du Campanile Shawinigan QC 11,621 578 16,580 905 590 17,473 18,063 903 17,160 2007 2019 48 years
VÜ Sherbrooke QC 35,443 706 58,073 1,298 720 59,357 60,077 1,843 58,234 2015 2019 56 years
La Cité des Tours St-Jean-sur-Richelieu QC 21,934 1,744 44,357 1,101 1,788 45,414 47,202 1,624 45,578 2012 2019 53 years
IVVI St-Laurent QC 53,183 6,307 64,131 - 6,307 64,131 70,438 374 70,064 2020 2020 60 years
VAST St-Laurent QC 41,809 4,648 62,521 - 4,648 62,521 67,169 84 67,085 2020 2020 60 years
Cornelius St-Laurent QC 9,853 7,813 25,026 - 7,813 25,026 32,839 - 32,839 CIP CIP CIP
Liz St-Laurent QC 11,534 11,937 22,567 - 11,937 22,567 34,504 - 34,504 CIP CIP CIP
Floréa Terrebonne QC 41,640 3,275 63,246 1,421 3,341 64,601 67,942 2,057 65,885 2016 2019 57 years
Les Résidences du Marché Ste-Thérèse QC 22,243 2,124 25,371 - 2,124 25,371 27,495 713 26,782 2000 2020 40 Years
Lilo Ile-Perrot QC 40,635 5,324 45,948 - 5,324 45,948 51,272 868 50,404 2017 2020 57 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Le Félix Vaudreuil-Dorion Vaudreuil-Dorion QC 25,803 7,531 34,624 1,432 7,682 35,905 43,587 1,424 42,163 2010 2019 51 years
TOTAL FOR OTHER SENIOR HOUSING COMMUNITIES 1,333,759 617,774 6,179,476 188,514 615,447 6,370,317 6,985,764 1,242,978 5,742,786
TOTAL FOR SENIOR HOUSING COMMUNITIES 1,589,318 1,584,636 15,254,039 1,025,745 1,607,351 16,257,069 17,864,420 4,779,527 13,084,893
MEDICAL OFFICE BUILDINGS
St. Vincent's Medical Center East #46 Birmingham AL - - 25,298 5,155 - 30,453 30,453 12,512 17,941 2005 2010 35 years
St. Vincent's Medical Center East #48 Birmingham AL - - 12,698 1,308 - 14,006 14,006 5,020 8,986 1989 2010 35 years
St. Vincent's Medical Center East #52 Birmingham AL - - 7,608 2,262 - 9,870 9,870 4,268 5,602 1985 2010 35 years
Crestwood Medical Pavilion Huntsville AL 1,667 625 16,178 732 625 16,910 17,535 5,431 12,104 1994 2011 35 years
West Valley Medical Center Buckeye1 AZ - 3,348 5,233 - 3,348 5,233 8,581 1,571 7,010 2011 2015 31 years
Canyon Springs Medical Plaza Gilbert AZ - - 27,497 1,106 - 28,603 28,603 8,491 20,112 2007 2012 35 years
Mercy Gilbert Medical Plaza 1 Gilbert AZ - 720 11,277 1,786 772 13,011 13,783 5,024 8,759 2007 2011 35 years
Mercy Gilbert Medical Plaza II Gilbert AZ 16,520 - 18,610 1,034 - 19,644 19,644 1,232 18,412 2019 2019 35 years
Thunderbird Paseo Medical Plaza Glendale AZ - - 12,904 1,352 20 14,236 14,256 4,451 9,805 1997 2011 35 years
Thunderbird Paseo Medical Plaza II Glendale AZ - - 8,100 999 20 9,079 9,099 2,872 6,227 2001 2011 35 years
Arrowhead Physicians Plaza Glendale AZ 9,967 308 19,671 548 308 20,219 20,527 1,454 19,073 2004 2018 35 years
1432 S Dobson Mesa AZ - - 32,768 1,658 - 34,426 34,426 8,240 26,186 2003 2013 35 years
1450 S Dobson Mesa AZ - - 11,923 2,063 4 13,982 13,986 3,990 9,996 1977 2011 35 years
1500 S Dobson Mesa AZ - - 7,395 2,412 4 9,803 9,807 2,886 6,921 1980 2011 35 years
1520 S Dobson Mesa AZ - - 13,665 4,285 - 17,950 17,950 5,080 12,870 1986 2011 35 years
Deer Valley Medical Office Building II Phoenix AZ - - 22,663 1,857 14 24,506 24,520 7,185 17,335 2002 2011 35 years
Deer Valley Medical Office Building III Phoenix AZ - - 19,521 1,467 12 20,976 20,988 6,222 14,766 2009 2011 35 years
Papago Medical Park Phoenix AZ - - 12,172 2,392 - 14,564 14,564 4,797 9,767 1989 2011 35 years
North Valley Orthopedic Surgery Center Phoenix AZ - 2,800 10,150 - 2,800 10,150 12,950 2,284 10,666 2006 2015 35 years
Davita Dialysis - Marked Tree Marked Tree AR - 179 1,580 - 179 1,580 1,759 386 1,373 2009 2015 35 years
Burbank Medical Plaza I Burbank CA - 1,241 23,322 2,501 1,268 25,796 27,064 9,090 17,974 2004 2011 35 years
Burbank Medical Plaza II Burbank CA 31,583 491 45,641 1,256 497 46,891 47,388 14,074 33,314 2008 2011 35 years
Eden Medical Plaza Castro Valley CA - 258 2,455 460 328 2,845 3,173 1,649 1,524 1998 2011 25 years
Sutter Medical Center Castro Valley CA - - 25,088 1,471 - 26,559 26,559 6,095 20,464 2012 2012 35 years
United Healthcare - Cypress Cypress CA - 12,883 38,309 1,502 12,883 39,811 52,694 10,982 41,712 1985 2015 29 years
NorthBay Corporate Headquarters Fairfield CA - - 19,187 - - 19,187 19,187 4,898 14,289 2008 2012 35 years
Gateway Medical Plaza Fairfield CA - - 12,872 797 - 13,669 13,669 3,331 10,338 1986 2012 35 years
Solano NorthBay Health Plaza Fairfield CA - - 8,880 39 - 8,919 8,919 2,257 6,662 1990 2012 35 years
NorthBay Healthcare MOB Fairfield CA - - 8,507 2,280 - 10,787 10,787 3,686 7,101 2014 2013 35 years
UC Davis Medical Group Folsom CA - 1,873 10,156 260 1,873 10,416 12,289 2,515 9,774 1995 2015 35 years
Verdugo Hills Medical Bulding I Glendale CA - 6,683 9,589 2,738 6,768 12,242 19,010 5,711 13,299 1972 2012 23 years
Verdugo Hills Medical Bulding II Glendale CA - 4,464 3,731 3,042 4,514 6,723 11,237 4,062 7,175 1987 2012 19 years
Grossmont Medical Terrace La Mesa CA - 88 14,192 376 88 14,568 14,656 2,418 12,238 2008 2016 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Los Alamitos Medical & Wellness Pavilion Los Alamitos CA 11,586 488 31,720 61 488 31,781 32,269 2,282 29,987 2013 2018 35 years
St. Francis Lynwood Medical Lynwood CA - 688 8,385 1,965 697 10,341 11,038 4,968 6,070 1993 2011 32 years
Facey Mission Hills Mission Hills CA - 15,468 30,116 4,729 15,468 34,845 50,313 8,073 42,240 2012 2012 35 years
Mission Medical Plaza Mission Viejo CA 52,783 1,916 77,022 2,723 1,916 79,745 81,661 25,025 56,636 2007 2011 35 years
St Joseph Medical Tower Orange CA 42,170 1,752 61,647 4,216 1,761 65,854 67,615 20,686 46,929 2008 2011 35 years
Huntington Pavilion Pasadena CA - 3,138 83,412 11,894 3,138 95,306 98,444 35,881 62,563 2009 2011 35 years
Western University of Health Sciences Medical Pavilion Pomona CA - 91 31,523 - 91 31,523 31,614 9,374 22,240 2009 2011 35 years
Pomerado Outpatient Pavilion Poway CA - 3,233 71,435 3,298 3,233 74,733 77,966 25,646 52,320 2007 2011 35 years
San Bernardino Medical Plaza I San Bernadino CA - 789 11,133 2,349 797 13,474 14,271 11,962 2,309 1971 2011 27 years
San Bernardino Medical Plaza II San Bernadino CA - 416 5,625 1,204 421 6,824 7,245 4,050 3,195 1988 2011 26 years
Sutter Van Ness San Francisco CA 104,794 - 157,404 918 - 158,322 158,322 9,298 149,024 2019 2019 35 years
San Gabriel Valley Medical Plaza San Gabriel CA - 914 5,510 1,314 963 6,775 7,738 3,330 4,408 2004 2011 35 years
Santa Clarita Valley Medical Plaza Santa Clarita CA 20,909 9,708 20,020 2,032 9,782 21,978 31,760 7,609 24,151 2005 2011 35 years
Kenneth E Watts Medical Plaza Torrance CA - 262 6,945 3,924 494 10,637 11,131 5,507 5,624 1989 2011 23 years
Vaca Valley Health Plaza Vacaville CA - - 9,634 979 - 10,613 10,613 2,504 8,109 1988 2012 35 years
NorthBay Center For Primary Care - Vacaville Vacaville CA - 777 5,632 300 777 5,932 6,709 695 6,014 1998 2017 35 years
Potomac Medical Plaza Aurora CO - 2,401 9,118 4,890 2,865 13,544 16,409 7,203 9,206 1986 2007 35 years
Briargate Medical Campus Colorado Springs CO - 1,238 12,301 1,760 1,310 13,989 15,299 5,908 9,391 2002 2007 35 years
Printers Park Medical Plaza Colorado Springs CO - 2,641 47,507 4,034 3,642 50,540 54,182 22,474 31,708 1999 2007 35 years
Green Valley Ranch MOB Denver CO - - 12,139 1,564 259 13,444 13,703 3,180 10,523 2007 2012 35 years
Community Physicians Pavilion Lafayette CO - - 10,436 2,018 - 12,454 12,454 4,979 7,475 2004 2010 35 years
Exempla Good Samaritan Medical Center Lafayette CO - - 4,393 (57) - 4,336 4,336 874 3,462 2013 2013 35 years
Dakota Ridge Littleton CO - 2,540 12,901 2,221 2,562 15,100 17,662 3,124 14,538 2007 2015 35 years
Avista Two Medical Plaza Louisville CO - - 17,330 2,232 - 19,562 19,562 7,907 11,655 2003 2009 35 years
The Sierra Medical Building Parker CO - 1,444 14,059 3,509 1,516 17,496 19,012 8,609 10,403 2009 2009 35 years
Crown Point Healthcare Plaza Parker CO - 852 5,210 715 946 5,831 6,777 1,470 5,307 2008 2013 35 years
Lutheran Medical Office Building II Wheat Ridge CO - - 2,655 1,330 - 3,985 3,985 2,065 1,920 1976 2010 35 years
Lutheran Medical Office Building IV Wheat Ridge CO - - 7,266 2,462 - 9,728 9,728 3,900 5,828 1991 2010 35 years
Lutheran Medical Office Building III Wheat Ridge CO - - 11,947 2,324 - 14,271 14,271 4,947 9,324 2004 2010 35 years
DePaul Professional Office Building Washington DC - - 6,424 3,064 - 9,488 9,488 4,754 4,734 1987 2010 35 years
Providence Medical Office Building Washington DC - - 2,473 1,344 - 3,817 3,817 2,074 1,743 1975 2010 35 years
RTS Cape Coral Cape Coral FL - 368 5,448 - 368 5,448 5,816 1,761 4,055 1984 2011 34 years
RTS Ft. Myers Fort Myers FL - 1,153 4,127 - 1,153 4,127 5,280 1,604 3,676 1989 2011 31 years
RTS Key West Key West FL - 486 4,380 - 486 4,380 4,866 1,273 3,593 1987 2011 35 years
JFK Medical Plaza Lake Worth FL - 453 1,711 (147) - 2,017 2,017 982 1,035 1999 2004 35 years
East Pointe Medical Plaza Lehigh Acres FL - 327 11,816 - 327 11,816 12,143 2,454 9,689 1994 2015 35 years
Palms West Building 6 Loxahatchee FL - 965 2,678 (622) - 3,021 3,021 1,383 1,638 2000 2004 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Bay Medical Plaza Lynn Haven FL - 4,215 15,041 (13,601) 3,644 2,011 5,655 2,374 3,281 2003 2015 35 years
RTS Naples Naples FL - 1,152 3,726 - 1,152 3,726 4,878 1,221 3,657 1999 2011 35 years
Bay Medical Center Panama City FL - 82 17,400 3,507 25 20,964 20,989 2,669 18,320 1987 2015 35 years
RTS Pt. Charlotte Pt Charlotte FL - 966 4,581 - 966 4,581 5,547 1,569 3,978 1985 2011 34 years
RTS Sarasota Sarasota FL - 1,914 3,889 - 1,914 3,889 5,803 1,405 4,398 1996 2011 35 years
Capital Regional MOB I Tallahassee FL - 590 8,773 (324) 193 8,846 9,039 1,667 7,372 1998 2015 35 years
Athens Medical Complex Athens GA - 2,826 18,339 109 2,826 18,448 21,274 3,942 17,332 2011 2015 35 years
Doctors Center at St. Joseph's Hospital Atlanta GA - 545 80,152 24,683 545 104,835 105,380 26,230 79,150 1978 2015 20 years
Augusta POB I Augusta GA - 233 7,894 2,512 233 10,406 10,639 6,961 3,678 1978 2012 14 years
Augusta POB II Augusta GA - 735 13,717 6,831 735 20,548 21,283 7,882 13,401 1987 2012 23 years
Augusta POB III Augusta GA - 535 3,857 960 535 4,817 5,352 2,679 2,673 1994 2012 22 years
Augusta POB IV Augusta GA - 675 2,182 2,296 691 4,462 5,153 2,726 2,427 1995 2012 23 years
Cobb Physicians Center Austell GA - 1,145 16,805 1,948 1,145 18,753 19,898 7,398 12,500 1992 2011 35 years
Summit Professional Plaza I Brunswick GA - 1,821 2,974 376 1,824 3,347 5,171 3,601 1,570 2004 2012 31 years
Summit Professional Plaza II Brunswick GA - 981 13,818 406 981 14,224 15,205 4,913 10,292 1998 2012 35 years
Fayette MOB Fayetteville GA - 895 20,669 1,405 895 22,074 22,969 4,736 18,233 2004 2015 35 years
Woodlawn Commons 1121/1163 Marietta GA - 5,495 16,028 2,306 5,586 18,243 23,829 3,984 19,845 1991 2015 35 years
PAPP Clinic Newnan GA - 2,167 5,477 68 2,167 5,545 7,712 1,736 5,976 1994 2015 30 years
Parkway Physicians Center Ringgold GA - 476 10,017 1,381 476 11,398 11,874 4,383 7,491 2004 2011 35 years
Riverdale MOB Riverdale GA - 1,025 9,783 355 1,025 10,138 11,163 2,429 8,734 2005 2015 35 years
Rush Copley POB I Aurora IL - 120 27,882 1,369 120 29,251 29,371 6,175 23,196 1996 2015 34 years
Rush Copley POB II Aurora IL - 49 27,217 522 49 27,739 27,788 5,557 22,231 2009 2015 35 years
Good Shepherd Physician Office Building I Barrington IL - 152 3,224 835 152 4,059 4,211 1,028 3,183 1979 2013 35 years
Good Shepherd Physician Office Building II Barrington IL - 512 12,977 1,235 512 14,212 14,724 3,731 10,993 1996 2013 35 years
Trinity Hospital Physician Office Building Chicago IL - 139 3,329 1,587 139 4,916 5,055 1,631 3,424 1971 2013 35 years
Advocate Beverly Center Chicago IL - 2,227 10,140 412 2,231 10,548 12,779 3,271 9,508 1986 2015 25 years
Crystal Lakes Medical Arts Crystal Lake IL - 2,490 19,504 437 2,535 19,896 22,431 4,438 17,993 2007 2015 35 years
Advocate Good Shepherd Crystal Lake IL - 2,444 10,953 949 2,444 11,902 14,346 3,017 11,329 2008 2015 33 years
Physicians Plaza East Decatur IL - - 791 2,558 5 3,344 3,349 1,453 1,896 1976 2010 35 years
Physicians Plaza West Decatur IL - - 1,943 1,207 - 3,150 3,150 1,474 1,676 1987 2010 35 years
SIU Family Practice Decatur IL - - 3,900 3,782 - 7,682 7,682 3,567 4,115 1996 2010 35 years
304 W Hay Building Decatur IL - - 8,702 2,447 29 11,120 11,149 4,233 6,916 2002 2010 35 years
302 W Hay Building Decatur IL - - 3,467 859 - 4,326 4,326 1,997 2,329 1993 2010 35 years
ENTA Decatur IL - - 1,150 16 - 1,166 1,166 511 655 1996 2010 35 years
301 W Hay Building Decatur IL - - 640 22 - 662 662 369 293 1980 2010 35 years
South Shore Medical Building Decatur IL - 902 129 56 958 129 1,087 223 864 1991 2010 35 years
Kenwood Medical Center Decatur IL - - 1,689 1,520 - 3,209 3,209 1,376 1,833 1997 2010 35 years
DMH OCC Health & Wellness Partners Decatur IL - 934 1,386 168 943 1,545 2,488 748 1,740 1996 2010 35 years
Rock Springs Medical Decatur IL - 399 495 109 399 604 1,003 309 694 1990 2010 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
575 W Hay Building Decatur IL - 111 739 24 111 763 874 358 516 1984 2010 35 years
Good Samaritan Physician Office Building I Downers Grove IL - 407 10,337 1,397 407 11,734 12,141 3,211 8,930 1976 2013 35 years
Good Samaritan Physician Office Building II Downers Grove IL - 1,013 25,370 1,101 1,013 26,471 27,484 6,780 20,704 1995 2013 35 years
Eberle Medical Office Building ("Eberle MOB") Elk Grove Village IL - - 16,315 1,017 - 17,332 17,332 7,872 9,460 2005 2009 35 years
1425 Hunt Club Road MOB Gurnee IL - 249 1,452 976 352 2,325 2,677 1,086 1,591 2005 2011 34 years
1445 Hunt Club Drive Gurnee IL - 216 1,405 609 325 1,905 2,230 1,039 1,191 2002 2011 31 years
Gurnee Imaging Center Gurnee IL - 82 2,731 - 82 2,731 2,813 926 1,887 2002 2011 35 years
Gurnee Center Club Gurnee IL - 627 17,851 - 627 17,851 18,478 6,169 12,309 2001 2011 35 years
South Suburban Hospital Physician Office Building Hazel Crest IL - 191 4,370 997 191 5,367 5,558 1,608 3,950 1989 2013 35 years
755 Milwaukee MOB Libertyville IL - 421 3,716 3,386 630 6,893 7,523 3,942 3,581 1990 2011 18 years
890 Professional MOB Libertyville IL - 214 2,630 977 214 3,607 3,821 1,548 2,273 1980 2011 26 years
Libertyville Center Club Libertyville IL - 1,020 17,176 - 1,020 17,176 18,196 6,301 11,895 1988 2011 35 years
Christ Medical Center Physician Office Building Oak Lawn IL - 658 16,421 3,663 658 20,084 20,742 4,626 16,116 1986 2013 35 years
Methodist North MOB Peoria IL - 1,025 29,493 31 1,025 29,524 30,549 6,238 24,311 2010 2015 35 years
Davita Dialysis - Rockford Rockford IL - 256 2,543 - 256 2,543 2,799 634 2,165 2009 2015 35 years
Vernon Hills Acute Care Center Vernon Hills IL - 3,376 694 (2,101) 1,195 774 1,969 921 1,048 1986 2011 15 years
Wilbur S. Roby Building Anderson IN - - 2,653 1,340 - 3,993 3,993 2,072 1,921 1992 2010 35 years
Ambulatory Services Building Anderson IN - - 4,266 2,129 - 6,395 6,395 3,297 3,098 1995 2010 35 years
St. John's Medical Arts Building Anderson IN - - 2,281 2,114 - 4,395 4,395 2,121 2,274 1973 2010 35 years
Carmel I Carmel IN - 466 5,954 833 466 6,787 7,253 2,809 4,444 1985 2012 30 years
Carmel II Carmel IN - 455 5,976 1,321 455 7,297 7,752 2,686 5,066 1989 2012 33 years
Carmel III Carmel IN - 422 6,194 1,039 422 7,233 7,655 2,594 5,061 2001 2012 35 years
Elkhart Elkhart IN - 1,256 1,973 - 1,256 1,973 3,229 1,595 1,634 1994 2011 32 years
Lutheran Medical Arts Fort Wayne IN - 702 13,576 169 714 13,733 14,447 2,886 11,561 2000 2015 35 years
Dupont Road MOB Fort Wayne IN - 633 13,479 507 672 13,947 14,619 3,164 11,455 2001 2015 35 years
Harcourt Professional Office Building Indianapolis IN - 519 28,951 6,023 519 34,974 35,493 12,290 23,203 1973 2012 28 years
Cardiac Professional Office Building Indianapolis IN - 498 27,430 3,048 498 30,478 30,976 8,997 21,979 1995 2012 35 years
Oncology Medical Office Building Indianapolis IN - 470 5,703 2,598 470 8,301 8,771 2,328 6,443 2003 2012 35 years
CorVasc Medical Office Building Indianapolis IN - 514 9,617 549 871 9,809 10,680 1,714 8,966 2004 2016 36 years
St. Francis South Medical Office Building Indianapolis IN - - 20,649 2,225 7 22,867 22,874 5,957 16,917 1995 2013 35 years
Methodist Professional Center I Indianapolis IN - 61 37,411 7,415 61 44,826 44,887 16,914 27,973 1985 2012 25 years
Indiana Orthopedic Center of Excellence Indianapolis IN - 967 83,746 3,106 967 86,852 87,819 15,254 72,565 1997 2015 35 years
United Healthcare - Indy Indianapolis IN - 5,737 32,116 848 5,737 32,964 38,701 7,300 31,401 1988 2015 35 years
LaPorte La Porte IN - 553 1,309 - 553 1,309 1,862 683 1,179 1997 2011 34 years
Mishawaka Mishawaka IN - 3,787 5,543 - 3,787 5,543 9,330 4,657 4,673 1993 2011 35 years
Cancer Care Partners Mishawaka IN - 3,162 28,633 220 3,162 28,853 32,015 5,901 26,114 2010 2015 35 years
Michiana Oncology Mishawaka IN - 4,577 20,939 15 4,581 20,950 25,531 4,527 21,004 2010 2015 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
DaVita Dialysis - Paoli Paoli IN - 396 2,056 - 396 2,056 2,452 524 1,928 2011 2015 35 years
South Bend South Bend IN - 792 2,530 - 792 2,530 3,322 1,085 2,237 1996 2011 34 years
OLBH Same Day Surgery Center MOB Ashland KY - 101 19,066 3,569 101 22,635 22,736 7,320 15,416 1997 2012 26 years
St. Elizabeth Covington Covington KY - 345 12,790 166 345 12,956 13,301 4,413 8,888 2009 2012 35 years
Jefferson Clinic Louisville KY - - 673 2,018 - 2,691 2,691 493 2,198 2013 2013 35 years
East Jefferson Medical Plaza Metairie LA - 168 17,264 3,162 168 20,426 20,594 8,520 12,074 1996 2012 32 years
East Jefferson MOB Metairie LA - 107 15,137 4,016 107 19,153 19,260 7,311 11,949 1985 2012 28 years
East Jefferson MRI Metairie LA - - - - - - - - - CIP CIP CIP
Lakeside POB I Metairie LA - 3,334 4,974 803 342 8,769 9,111 5,296 3,815 1986 2011 22 years
Lakeside POB II Metairie LA - 1,046 802 (156) 53 1,639 1,692 1,316 376 1980 2011 7 years
Fresenius Medical Metairie LA - 1,195 3,797 84 1,269 3,807 5,076 874 4,202 2012 2015 35 years
RTS Berlin Berlin MD - - 2,216 - - 2,216 2,216 783 1,433 1994 2011 29 years
Charles O. Fisher Medical Building Westminster MD 10,205 - 13,795 1,888 - 15,683 15,683 8,018 7,665 2009 2009 35 years
Medical Specialties Building Kalamazoo MI - - 19,242 1,689 - 20,931 20,931 7,640 13,291 1989 2010 35 years
North Professional Building Kalamazoo MI - - 7,228 1,969 - 9,197 9,197 4,013 5,184 1983 2010 35 years
Borgess Navigation Center Kalamazoo MI - - 2,391 302 - 2,693 2,693 884 1,809 1976 2010 35 years
Borgess Health & Fitness Center Kalamazoo MI - - 11,959 655 - 12,614 12,614 4,667 7,947 1984 2010 35 years
Heart Center Building Kalamazoo MI - - 8,420 940 176 9,184 9,360 3,680 5,680 1980 2010 35 years
Medical Commons Building Kalamazoo Township MI - - 661 671 - 1,332 1,332 816 516 1979 2010 35 years
RTS Madison Heights Madison Heights MI - 401 2,946 - 401 2,946 3,347 999 2,348 2002 2011 35 years
Bronson Lakeview OPC Paw Paw MI - 3,835 31,564 - 3,835 31,564 35,399 7,361 28,038 2006 2015 35 years
Pro Med Center Plainwell Plainwell MI - - 697 28 - 725 725 282 443 1991 2010 35 years
Pro Med Center Richland Richland MI - 233 2,267 334 325 2,509 2,834 880 1,954 1996 2010 35 years
Henry Ford Dialysis Center Southfield MI - 589 3,350 - 589 3,350 3,939 773 3,166 2002 2015 35 years
Metro Health Wyoming MI - 1,325 5,479 - 1,325 5,479 6,804 1,338 5,466 2008 2015 35 years
Spectrum Health Wyoming MI - 2,463 14,353 - 2,463 14,353 16,816 3,504 13,312 2006 2015 35 years
Cogdell Duluth MOB Duluth MN - - 33,406 (19) - 33,387 33,387 8,024 25,363 2012 2012 35 years
Allina Health Elk River MN - 1,442 7,742 122 1,455 7,851 9,306 2,363 6,943 2002 2015 35 years
Unitron Hearing Plymouth MN - 2,646 8,962 5 2,646 8,967 11,613 3,065 8,548 2011 2015 29 years
HealthPartners Medical & Dental Clinics Sartell MN - 2,492 15,694 413 2,503 16,096 18,599 5,658 12,941 2010 2012 35 years
University Physicians - Grants Ferry Flowood MS - 2,796 12,125 (12) 2,796 12,113 14,909 4,388 10,521 2010 2012 35 years
Arnold Urgent Care Arnold MO - 1,058 556 413 1,097 930 2,027 663 1,364 1999 2011 35 years
DePaul Health Center North Bridgeton MO - 996 10,045 3,681 996 13,726 14,722 7,113 7,609 1976 2012 21 years
DePaul Health Center South Bridgeton MO - 910 12,169 2,838 910 15,007 15,917 5,977 9,940 1992 2012 30 years
St. Mary's Health Center MOB D Clayton MO - 103 2,780 1,622 106 4,399 4,505 2,268 2,237 1984 2012 22 years
Fenton Urgent Care Center Fenton MO - 183 2,714 404 189 3,112 3,301 1,456 1,845 2003 2011 35 years
Broadway Medical Office Building Kansas City MO - 1,300 12,602 11,591 1,385 24,108 25,493 9,296 16,197 1976 2007 35 years
St. Joseph Medical Building Kansas City MO - 305 7,445 2,750 305 10,195 10,500 3,178 7,322 1988 2012 32 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
St. Joseph Medical Mall Kansas City MO - 530 9,115 773 530 9,888 10,418 3,549 6,869 1995 2012 33 years
Carondelet Medical Building Kansas City MO - 745 12,437 3,967 745 16,404 17,149 6,521 10,628 1979 2012 29 years
St. Joseph Hospital West Medical Office Building II Lake Saint Louis MO - 524 3,229 1,036 524 4,265 4,789 1,781 3,008 2005 2012 35 years
St. Joseph O'Fallon Medical Office Building O'Fallon MO - 940 5,556 493 1,060 5,929 6,989 2,054 4,935 1992 2012 35 years
Sisters of Mercy Building Springfield MO - 3,427 8,697 - 3,427 8,697 12,124 2,259 9,865 2008 2015 35 years
St. Joseph Health Center Medical Building 1 St. Charles MO - 503 4,336 1,865 503 6,201 6,704 3,336 3,368 1987 2012 20 years
St. Joseph Health Center Medical Building 2 St. Charles MO - 369 2,963 1,665 369 4,628 4,997 2,149 2,848 1999 2012 32 years
Physicians Office Center St. Louis MO - 1,445 13,825 1,117 1,445 14,942 16,387 7,011 9,376 2003 2011 35 years
12700 Southford Road Medical Plaza St. Louis MO - 595 12,584 3,039 595 15,623 16,218 6,734 9,484 1993 2011 32 years
Mercy South MOB A St. Louis MO - 409 4,687 2,129 409 6,816 7,225 3,717 3,508 1975 2011 20 years
Mercy South MOB B St. Louis MO - 350 3,942 1,502 350 5,444 5,794 3,147 2,647 1980 2011 21 years
Lemay Urgent Care Center St. Louis MO - 2,317 3,120 (607) 2,355 2,475 4,830 2,418 2,412 1983 2011 22 years
St. Mary's Health Center MOB B St. Louis MO - 119 4,161 12,660 119 16,821 16,940 4,312 12,628 1979 2012 23 years
St. Mary's Health Center MOB C St. Louis MO - 136 6,018 4,390 256 10,288 10,544 3,700 6,844 1969 2012 20 years
Carson Tahoe Specialty Medical Center Carson City NV - 2,748 27,010 4,297 2,898 31,157 34,055 7,100 26,955 1981 2015 35 years
Carson Tahoe MOB West Carson City NV - 802 11,855 229 703 12,183 12,886 2,739 10,147 2007 2015 29 years
Del E Webb Medical Plaza Henderson NV - 1,028 16,993 2,878 1,028 19,871 20,899 7,784 13,115 1999 2011 35 years
Durango Medical Plaza Las Vegas NV - 3,787 27,738 (1,709) 3,683 26,133 29,816 5,644 24,172 2008 2015 35 years
The Terrace at South Meadows Reno NV 6,270 504 9,966 874 517 10,827 11,344 4,276 7,068 2004 2011 35 years
Cooper Health MOB I Willingboro NJ - 1,389 2,742 134 1,398 2,867 4,265 828 3,437 2010 2015 35 years
Cooper Health MOB II Willingboro NJ - 594 5,638 65 594 5,703 6,297 1,246 5,051 2012 2015 35 years
Salem Medical Woodstown NJ - 275 4,132 23 275 4,155 4,430 894 3,536 2010 2015 35 years
Albany Medical Center MOB Albany NY - 321 18,389 35 356 18,389 18,745 3,406 15,339 2010 2015 35 years
St. Peter's Recovery Center Guilderland NY - 1,059 9,156 - 1,059 9,156 10,215 2,287 7,928 1990 2015 35 years
Central NY Medical Center Syracuse NY - 1,786 26,101 5,075 1,792 31,170 32,962 10,709 22,253 1997 2012 33 years
Northcountry MOB Watertown NY - 1,320 10,799 444 1,364 11,199 12,563 2,686 9,877 2001 2015 35 years
Randolph Charlotte NC - 6,370 2,929 2,694 6,442 5,551 11,993 4,711 7,282 1973 2012 4 years
Mallard Crossing I Charlotte NC - 3,229 2,072 944 3,269 2,976 6,245 2,313 3,932 1997 2012 25 years
Medical Arts Building Concord NC - 701 11,734 1,977 701 13,711 14,412 5,602 8,810 1997 2012 31 years
Gateway Medical Office Building Concord NC - 1,100 9,904 724 1,100 10,628 11,728 4,508 7,220 2005 2012 35 years
Copperfield Medical Mall Concord NC - 1,980 2,846 664 2,139 3,351 5,490 2,116 3,374 1989 2012 25 years
Weddington Internal & Pediatric Medicine Concord NC - 574 688 37 574 725 1,299 438 861 2000 2012 27 years
Rex Wellness Center Garner NC - 1,348 5,330 444 1,354 5,768 7,122 1,670 5,452 2003 2015 34 years
Gaston Professional Center Gastonia NC - 833 24,885 3,249 863 28,104 28,967 9,264 19,703 1997 2012 35 years
Harrisburg Family Physicians Harrisburg NC - 679 1,646 73 679 1,719 2,398 710 1,688 1996 2012 35 years
Harrisburg Medical Mall Harrisburg NC - 1,339 2,292 342 1,339 2,634 3,973 1,462 2,511 1997 2012 27 years
Northcross Huntersville NC - 623 278 231 623 509 1,132 348 784 1993 2012 22 years
REX Knightdale MOB & Wellness Center Knightdale NC - - 22,823 1,003 50 23,776 23,826 6,077 17,749 2009 2012 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Midland Medical Park Midland NC - 1,221 847 132 1,233 967 2,200 703 1,497 1998 2012 25 years
East Rocky Mount Kidney Center Rocky Mount NC - 803 998 34 805 1,030 1,835 521 1,314 2000 2012 33 years
Rocky Mount Kidney Center Rocky Mount NC - 479 1,297 60 479 1,357 1,836 711 1,125 1990 2012 25 years
Rocky Mount Medical Park Rocky Mount NC - 2,552 7,779 2,774 2,652 10,453 13,105 4,587 8,518 1991 2012 30 years
Trinity Health Medical Arts Clinic Minot ND - 935 15,482 715 951 16,181 17,132 4,707 12,425 1995 2015 26 years
Anderson Medical Arts Building I Cincinnati OH - - 9,632 2,366 146 11,852 11,998 5,811 6,187 1984 2007 35 years
Anderson Medical Arts Building II Cincinnati OH - - 15,123 3,930 - 19,053 19,053 8,521 10,532 2007 2007 35 years
Riverside North Medical Office Building Columbus OH - 785 8,519 2,050 785 10,569 11,354 5,224 6,130 1962 2012 25 years
Riverside South Medical Office Building Columbus OH - 586 7,298 997 610 8,271 8,881 3,880 5,001 1985 2012 27 years
340 East Town Medical Office Building Columbus OH - 10 9,443 1,353 10 10,796 10,806 4,118 6,688 1984 2012 29 years
393 East Town Medical Office Building Columbus OH - 61 4,760 780 61 5,540 5,601 2,637 2,964 1970 2012 20 years
141 South Sixth Medical Office Building Columbus OH - 80 1,113 2,923 80 4,036 4,116 1,175 2,941 1971 2012 14 years
Doctors West Medical Office Building Columbus OH - 414 5,362 884 414 6,246 6,660 2,475 4,185 1998 2012 35 years
Eastside Health Center Columbus OH - 956 3,472 (2) 956 3,470 4,426 2,435 1,991 1977 2012 15 years
East Main Medical Office Building Columbus OH - 440 4,771 72 440 4,843 5,283 1,859 3,424 2006 2012 35 years
Heart Center Medical Office Building Columbus OH - 1,063 12,140 923 1,063 13,063 14,126 4,988 9,138 2004 2012 35 years
Wilkins Medical Office Building Columbus OH - 123 18,062 2,302 123 20,364 20,487 5,639 14,848 2002 2012 35 years
Grady Medical Office Building Delaware OH - 239 2,263 724 239 2,987 3,226 1,388 1,838 1991 2012 25 years
Dublin Northwest Medical Office Building Dublin OH - 342 3,278 376 354 3,642 3,996 1,610 2,386 2001 2012 34 years
Preserve III Medical Office Building Dublin OH - 2,449 7,025 1,211 2,449 8,236 10,685 3,581 7,104 2006 2012 35 years
Zanesville Surgery Center Zanesville OH - 172 9,403 69 241 9,403 9,644 2,981 6,663 2000 2011 35 years
Dialysis Center Zanesville OH - 534 855 138 534 993 1,527 706 821 1960 2011 21 years
Genesis Children's Center Zanesville OH - 538 3,781 - 538 3,781 4,319 1,606 2,713 2006 2011 30 years
Medical Arts Building I Zanesville OH - 429 2,405 674 444 3,064 3,508 1,774 1,734 1970 2011 20 years
Medical Arts Building II Zanesville OH - 485 6,013 1,715 545 7,668 8,213 3,931 4,282 1995 2011 25 years
Medical Arts Building III Zanesville OH - 94 1,248 - 94 1,248 1,342 659 683 1970 2011 25 years
Primecare Building Zanesville OH - 130 1,344 648 130 1,992 2,122 1,197 925 1978 2011 20 years
Outpatient Rehabilitation Building Zanesville OH - 82 1,541 - 82 1,541 1,623 704 919 1985 2011 28 years
Radiation Oncology Building Zanesville OH - 105 1,201 952 114 2,144 2,258 661 1,597 1988 2011 25 years
Healthplex Zanesville OH - 2,488 15,849 1,199 2,649 16,887 19,536 7,407 12,129 1990 2011 32 years
Physicians Pavilion Zanesville OH - 422 6,297 1,722 422 8,019 8,441 4,022 4,419 1990 2011 25 years
Zanesville Northside Pharmacy Zanesville OH - 42 635 - 42 635 677 299 378 1985 2011 28 years
Bethesda Campus MOB III Zanesville OH - 188 1,137 308 222 1,411 1,633 700 933 1978 2011 25 years
Tuality 7th Avenue Medical Plaza Hillsboro OR 17,194 1,516 24,638 1,516 1,546 26,124 27,670 9,752 17,918 2003 2011 35 years
Professional Office Building I Chester PA - - 6,283 3,906 - 10,189 10,189 5,512 4,677 1978 2004 30 years
DCMH Medical Office Building Drexel Hill PA - - 10,424 3,268 - 13,692 13,692 7,630 6,062 1984 2004 30 years
Pinnacle Health Harrisburg PA - 2,574 16,767 1,479 2,901 17,919 20,820 4,369 16,451 2002 2015 35 years
Lancaster Rehabilitation Hospital Lancaster PA - 959 16,610 (16) 959 16,594 17,553 5,693 11,860 2007 2012 35 years
Lancaster ASC MOB Lancaster PA - 593 17,117 526 609 17,627 18,236 6,638 11,598 2007 2012 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
St. Joseph Medical Office Building Reading PA - - 10,823 811 - 11,634 11,634 4,639 6,995 2006 2010 35 years
Crozer - Keystone MOB I Springfield PA - 9,130 47,078 - 9,130 47,078 56,208 12,697 43,511 1996 2015 35 years
Crozer-Keystone MOB II Springfield PA - 5,178 6,523 - 5,178 6,523 11,701 1,871 9,830 1998 2015 25 years
Doylestown Health & Wellness Center Warrington PA - 4,452 17,383 1,310 4,497 18,648 23,145 6,971 16,174 2001 2012 34 years
Roper Medical Office Building Charleston SC - 127 14,737 4,522 138 19,248 19,386 8,148 11,238 1990 2012 28 years
St. Francis Medical Plaza (Charleston) Charleston SC - 447 3,946 870 447 4,816 5,263 2,162 3,101 2003 2012 35 years
Providence MOB I Columbia SC - 225 4,274 1,308 225 5,582 5,807 3,135 2,672 1979 2012 18 years
Providence MOB II Columbia SC - 122 1,834 1,212 150 3,018 3,168 1,310 1,858 1985 2012 18 years
Providence MOB III Columbia SC - 766 4,406 1,632 766 6,038 6,804 2,467 4,337 1990 2012 23 years
One Medical Park Columbia SC - 210 7,939 3,637 228 11,558 11,786 5,280 6,506 1984 2012 19 years
Three Medical Park Columbia SC - 40 10,650 2,142 40 12,792 12,832 5,938 6,894 1988 2012 25 years
St. Francis Millennium Medical Office Building Greenville SC 17,326 - 13,062 10,807 30 23,839 23,869 12,878 10,991 2009 2009 35 years
200 Andrews Greenville SC - 789 2,014 1,600 810 3,593 4,403 2,273 2,130 1994 2012 29 years
St. Francis CMOB Greenville SC - 501 7,661 1,478 501 9,139 9,640 3,243 6,397 2001 2012 35 years
St. Francis Outpatient Surgery Center Greenville SC - 1,007 16,538 1,083 1,007 17,621 18,628 6,991 11,637 2001 2012 35 years
St. Francis Professional Medical Center Greenville SC - 342 6,337 2,447 395 8,731 9,126 3,880 5,246 1984 2012 24 years
St. Francis Women's Greenville SC - 322 4,877 1,632 322 6,509 6,831 3,257 3,574 1991 2012 24 years
St. Francis Medical Plaza (Greenville) Greenville SC - 88 5,876 2,409 98 8,275 8,373 3,356 5,017 1998 2012 24 years
River Hills Medical Plaza Little River SC - 1,406 1,813 230 1,417 2,032 3,449 1,134 2,315 1999 2012 27 years
Mount Pleasant Medical Office Longpoint Mount Pleasant SC - 670 4,455 1,392 632 5,885 6,517 2,757 3,760 2001 2012 34 years
Medical Arts Center of Orangeburg Orangeburg SC - 823 3,299 588 836 3,874 4,710 1,648 3,062 1984 2012 28 years
Mary Black Westside Medical Office Bldg Spartanburg SC - 291 5,057 626 300 5,674 5,974 2,426 3,548 1991 2012 31 years
Spartanburg ASC Spartanburg SC - 1,333 15,756 - 1,333 15,756 17,089 3,085 14,004 2002 2015 35 years
Spartanburg Regional MOB Spartanburg SC - 207 17,963 889 290 18,769 19,059 4,020 15,039 1986 2015 35 years
Wellmont Blue Ridge MOB Bristol TN - 999 5,027 110 1,032 5,104 6,136 1,288 4,848 2001 2015 35 years
Health Park Medical Office Building Chattanooga TN - 2,305 8,949 799 2,385 9,668 12,053 3,548 8,505 2004 2012 35 years
Peerless Crossing Medical Center Cleveland TN - 1,217 6,464 77 1,217 6,541 7,758 2,350 5,408 2006 2012 35 years
St. Mary's Clinton Professional Office Building Clinton TN - 298 618 121 298 739 1,037 321 716 1988 2015 39 years
St. Mary's Farragut MOB Farragut TN - 221 2,719 257 221 2,976 3,197 881 2,316 1997 2015 39 years
Medical Center Physicians Tower Jackson TN 12,346 549 27,074 107 598 27,132 27,730 9,930 17,800 2010 2012 35 years
St. Mary's Ambulatory Surgery Center Knoxville TN - 129 1,012 - 129 1,012 1,141 527 614 1999 2015 24 years
Texas Clinic at Arlington Arlington TX - 2,781 24,515 909 2,879 25,326 28,205 5,291 22,914 2010 2015 35 years
Seton Medical Park Tower Austin TX - 805 41,527 10,885 1,329 51,888 53,217 14,354 38,863 1968 2012 35 years
Seton Northwest Health Plaza Austin TX - 444 22,632 3,980 444 26,612 27,056 8,464 18,592 1988 2012 35 years
Seton Southwest Health Plaza Austin TX - 294 5,311 637 294 5,948 6,242 1,809 4,433 2004 2012 35 years
Seton Southwest Health Plaza II Austin TX - 447 10,154 84 447 10,238 10,685 3,201 7,484 2009 2012 35 years
BioLife Sciences Building Denton TX - 1,036 6,576 - 1,036 6,576 7,612 1,658 5,954 2010 2015 35 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
East Houston MOB, LLC Houston TX - 356 2,877 1,242 328 4,147 4,475 3,245 1,230 1982 2011 15 years
East Houston Medical Plaza Houston TX - 671 426 10 237 870 1,107 1,023 84 1982 2011 11 years
Memorial Hermann Houston TX - 822 14,307 - 822 14,307 15,129 2,943 12,186 2012 2015 35 years
Scott & White Healthcare Kingsland TX - 534 5,104 - 534 5,104 5,638 1,203 4,435 2012 2015 35 years
Lakeway Medical Plaza Lakeway TX 8,969 270 20,169 2,625 270 22,794 23,064 1,569 21,495 2011 2018 35 years
Odessa Regional MOB Odessa TX - 121 8,935 - 121 8,935 9,056 1,911 7,145 2008 2015 35 years
Legacy Heart Center Plano TX - 3,081 8,890 183 3,081 9,073 12,154 2,364 9,790 2005 2015 35 years
Seton Williamson Medical Plaza Round Rock TX - - 15,074 870 - 15,944 15,944 6,218 9,726 2008 2010 35 years
Sunnyvale Medical Plaza Sunnyvale TX - 1,186 15,397 448 1,243 15,788 17,031 3,613 13,418 2009 2015 35 years
Texarkana ASC Texarkana TX - 814 5,903 166 814 6,069 6,883 1,665 5,218 1994 2015 30 years
Spring Creek Medical Plaza Tomball TX - 2,165 8,212 355 2,165 8,567 10,732 1,780 8,952 2006 2015 35 years
MRMC MOB I Mechanicsville VA - 1,669 7,024 711 1,669 7,735 9,404 3,824 5,580 1993 2012 31 years
Henrico MOB Richmond VA - 968 6,189 1,534 359 8,332 8,691 4,041 4,650 1976 2011 25 years
St. Mary's MOB North (Floors 6 & 7) Richmond VA - 227 2,961 1,105 227 4,066 4,293 1,950 2,343 1968 2012 22 years
Stony Point Medical Center Richmond VA - 3,822 16,127 807 3,822 16,934 20,756 3,537 17,219 2004 2015 35 years
St. Francis Cancer Center Richmond VA - 654 18,331 2,385 657 20,713 21,370 4,327 17,043 2006 2015 35 years
Bonney Lake Medical Office Building Bonney Lake WA 10,159 5,176 14,375 321 5,176 14,696 19,872 5,659 14,213 2011 2012 35 years
Good Samaritan Medical Office Building Puyallup WA 11,872 781 30,368 3,233 893 33,489 34,382 10,513 23,869 2011 2012 35 years
Holy Family Hospital Central MOB Spokane WA - - 19,085 475 - 19,560 19,560 5,010 14,550 2007 2012 35 years
Physician's Pavilion Vancouver WA - 1,411 32,939 1,388 1,450 34,288 35,738 12,059 23,679 2001 2011 35 years
Administration Building Vancouver WA - 296 7,856 59 317 7,894 8,211 2,743 5,468 1972 2011 35 years
Medical Center Physician's Building Vancouver WA - 1,225 31,246 4,257 1,488 35,240 36,728 12,541 24,187 1980 2011 35 years
Memorial MOB Vancouver WA - 663 12,626 1,621 690 14,220 14,910 5,054 9,856 1999 2011 35 years
Salmon Creek MOB Vancouver WA - 1,325 9,238 607 1,325 9,845 11,170 3,441 7,729 1994 2011 35 years
Fisher's Landing MOB Vancouver WA - 1,590 5,420 457 1,613 5,854 7,467 2,415 5,052 1995 2011 34 years
Columbia Medical Plaza Vancouver WA - 281 5,266 544 331 5,760 6,091 2,141 3,950 1991 2011 35 years
Appleton Heart Institute Appleton WI - - 7,775 46 - 7,821 7,821 2,691 5,130 2003 2010 39 years
Appleton Medical Offices West Appleton WI - - 5,756 1,146 - 6,902 6,902 2,283 4,619 1989 2010 39 years
Appleton Medical Offices South Appleton WI - - 9,058 537 - 9,595 9,595 3,416 6,179 1983 2010 39 years
Brookfield Clinic Brookfield WI - 2,638 4,093 (2,198) 440 4,093 4,533 1,810 2,723 1999 2011 35 years
Lakeshore Medical Clinic - Franklin Franklin WI - 1,973 7,579 149 2,029 7,672 9,701 1,947 7,754 2008 2015 34 years
Lakeshore Medical Clinic - Greenfield Greenfield WI - 1,223 13,387 126 1,223 13,513 14,736 2,795 11,941 2010 2015 35 years
Aurora Health Care - Hartford Hartford WI - 3,706 22,019 - 3,706 22,019 25,725 5,165 20,560 2006 2015 35 years
Hartland Clinic Hartland WI - 321 5,050 - 321 5,050 5,371 1,919 3,452 1994 2011 35 years
Aurora Healthcare - Kenosha Kenosha WI - 7,546 19,155 - 7,546 19,155 26,701 4,590 22,111 2014 2015 35 years
Univ of Wisconsin Health Monona WI - 678 8,017 202 678 8,219 8,897 2,050 6,847 2011 2015 35 years
Theda Clark Medical Center Office Pavilion Neenah WI - - 7,080 1,216 - 8,296 8,296 2,861 5,435 1993 2010 39 years
Aylward Medical Building Condo Floors 3 & 4 Neenah WI - - 4,462 250 - 4,712 4,712 1,762 2,950 2006 2010 39 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
Aurora Health Care - Neenah Neenah WI - 2,033 9,072 - 2,033 9,072 11,105 2,284 8,821 2006 2015 35 years
New Berlin Clinic New Berlin WI - 678 7,121 - 678 7,121 7,799 2,913 4,886 1999 2011 35 years
United Healthcare - Onalaska Onalaska WI - 4,623 5,527 38 4,623 5,565 10,188 1,807 8,381 1995 2015 35 years
WestWood Health & Fitness Pewaukee WI - 823 11,649 - 823 11,649 12,472 4,763 7,709 1997 2011 35 years
Aurora Health Care - Two Rivers Two Rivers WI - 5,638 25,308 - 5,638 25,308 30,946 5,983 24,963 2006 2015 35 years
Watertown Clinic Watertown WI - 166 3,234 - 166 3,234 3,400 1,184 2,216 2003 2011 35 years
Southside Clinic Waukesha WI - 218 5,273 - 218 5,273 5,491 1,950 3,541 1997 2011 35 years
Rehabilitation Hospital Waukesha WI - 372 15,636 - 372 15,636 16,008 5,114 10,894 2008 2011 35 years
United Healthcare - Wauwatosa Wawatosa WI - 8,012 15,992 76 8,012 16,068 24,080 4,634 19,446 1995 2015 35 years
TOTAL FOR MEDICAL OFFICE BUILDINGS 386,320 376,960 4,168,796 461,561 372,864 4,634,453 5,007,317 1,477,051 3,530,266
LIFE SCIENCES OFFICE BUILDINGS
300 George Street New Haven CT - 2,262 122,144 7,780 2,582 129,604 132,186 12,486 119,700 2014 2016 50 years
Univ. of Miami Life Science and Technology Park Miami FL - 2,249 87,019 6,325 2,253 93,340 95,593 11,326 84,267 2014 2016 53 years
IIT Chicago IL - 30 55,620 1,061 30 56,681 56,711 5,923 50,788 2006 2016 46 years
University of Maryland BioPark I Unit 1 Baltimore MD - 113 25,199 819 113 26,018 26,131 2,607 23,524 2005 2016 50 years
University of Maryland BioPark II Baltimore MD - 61 91,764 5,363 61 97,127 97,188 10,331 86,857 2007 2016 50 years
University of Maryland BioPark Garage Baltimore MD - 77 4,677 443 77 5,120 5,197 897 4,300 2007 2016 29 years
Tributary Street Baltimore MD - 4,015 15,905 597 4,015 16,502 20,517 2,378 18,139 1998 2016 45 years
Beckley Street Baltimore MD - 2,813 13,481 832 2,813 14,313 17,126 2,104 15,022 1999 2016 45 years
University of Maryland BioPark III Baltimore MD - 1,067 857 - 1,067 857 1,924 6 1,918 CIP CIP CIP
Heritage at 4240 Saint Louis MO - 403 47,125 1,258 452 48,334 48,786 6,511 42,275 2013 2016 45 years
Cortex 1 Saint Louis MO - 631 26,543 1,172 631 27,715 28,346 3,758 24,588 2005 2016 50 years
BRDG Park Saint Louis MO - 606 37,083 2,246 606 39,329 39,935 4,480 35,455 2009 2016 52 years
4220 Duncan Avenue St Louis MO - 1,871 35,044 9,974 1,871 45,018 46,889 7,105 39,784 2018 2018 35 years
311 South Sarah Street St. Louis MO - 5,154 - - 5,154 - 5,154 314 4,840 CIP CIP CIP
4300 Duncan St. Louis MO - 2,818 46,749 18 2,818 46,767 49,585 4,830 44,755 2008 2017 35 years
Weston Parkway Cary NC - 1,372 6,535 1,743 1,372 8,278 9,650 1,489 8,161 1990 2016 50 years
Patriot Drive Durham NC - 1,960 10,749 378 1,960 11,127 13,087 1,364 11,723 2010 2016 50 years
Chesterfield Durham NC - 3,594 57,781 5,558 3,619 63,314 66,933 14,396 52,537 2017 2017 60 years
Paramount Parkway Morrisville NC - 1,016 19,794 617 1,016 20,411 21,427 2,824 18,603 1999 2016 45 years
Center for Technology & Innovation Raleigh NC - 786 50,674 - 786 50,674 51,460 1,400 50,060 2016 2020 35 years
Keystone Science Center Raleigh NC - 408 25,841 - 408 25,841 26,249 715 25,534 2010 2020 35 years
Wake 90 Winston-Salem NC - 2,752 79,949 1,757 2,752 81,706 84,458 10,584 73,874 2013 2016 40 years
Wake 60 Winston-Salem NC 15,000 1,243 83,414 1,370 1,243 84,784 86,027 12,079 73,948 2016 2016 35 years
Bailey Power Plant Winston-Salem NC - 1,930 34,122 249 846 35,455 36,301 4,359 31,942 2017 2017 35 years
Hershey Center Unit 1 Hummelstown PA - 813 23,699 965 819 24,658 25,477 2,882 22,595 2007 2016 50 years
Location Initial Cost to Company Gross Amount Carried at Close of Period
Property Name City State /
Province Encumbrances Land and
Improvements Buildings and
Improvements Costs
Capitalized
Subsequent
to Acquisition1
Land and
Improvements Buildings and
Improvements Total Accumulated
Depreciation NBV Year of
Construction Year
Acquired Life on
Which
Depreciation
in Income
Statement
is Computed
3737 Market Street Philadelphia PA 66,108 40 141,981 6,298 40 148,279 148,319 12,988 135,331 2014 2016 54 years
3711 Market Street Philadelphia PA - 12,320 69,278 7,168 12,320 76,446 88,766 8,524 80,242 2008 2016 48 years
3675 Market Street Philadelphia PA 116,166 11,370 109,846 43,802 11,370 153,648 165,018 15,679 149,339 2018 2018 35 years
3701 Filbert Street Philadelphia PA - 3,627 - - 3,627 - 3,627 251 3,376 CIP CIP CIP
115 North 38th Street Philadelphia PA - 2,163 - - 2,163 - 2,163 149 2,014 CIP CIP CIP
225 North 38th Street Philadelphia PA - 9,965 5,387 - 9,965 5,387 15,352 683 14,669 CIP CIP CIP
3401 Market Street Philadelphia PA - 4,500 22,157 307 4,533 22,431 26,964 1,574 25,390 1923 2018 35 years
75 N. 38th Street (6799) Philadelphia PA - 9,432 - - 9,432 - 9,432 - 9,432 N/A 2019 N/A
South Street Landing Providence RI - 6,358 111,797 (1,053) 6,358 110,744 117,102 6,067 111,035 2017 2017 45 years
2/3 Davol Square Providence RI - 4,537 6,886 9,259 4,656 16,026 20,682 2,796 17,886 2005 2017 15 years
One Ship Street Providence RI - 1,943 1,734 (29) 1,943 1,705 3,648 268 3,380 1980 2017 25 years
Brown Academic/R&D Building Providence RI 47,294 - 68,335 (8,713) - 59,622 59,622 2,611 57,011 2019 2019 35 years
Providence Phase 2 Providence RI - 2,251 - - 2,251 - 2,251 - 2,251 CIP CIP CIP
Wexford Biotech 8 Richmond VA - 2,615 85,514 5,564 2,615 91,078 93,693 11,713 81,980 2012 2017 35 years
VTR Pre Development Expense - - 23,358 - - 23,358 23,358 - 23,358 CIP CIP CIP
TOTAL FOR LIFE SCIENCES OFFICE BUILDINGS 244,568 111,165 1,648,041 113,128 110,637 1,761,697 1,872,334 190,451 1,681,883
TOTAL FOR OFFICE 630,888 488,125 5,816,837 574,689 483,501 6,396,150 6,879,651 1,667,502 5,212,149
TOTAL FOR ALL PROPERTIES $ 2,220,206 $ 2,246,273 $ 22,949,998 $ 1,654,171 $ 2,261,415 $ 24,589,027 $ 26,850,442 $ 6,967,413 $ 19,883,029
1 Adjustments to basis included provisions for asset impairments, partial dispositions, costs capitalized subsequent to acquisitions and foreign currency translation adjustments.
VENTAS, INC.
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
December 31, 2020
Location Number of RE Assets Interest Rate Fixed / Variable Maturity Date Monthly Debt Service Face Value Net Book Value Prior Liens
(In thousands)
First Mortgages
Multiple 7 9.24% V 3/31/2025 388,310 66,000 66,000 174,020
Mezzanine Loans
Multiple 156 6.58% V 6/9/2021 2,889,690 487,648 486,797 1,020,080
Total $ 3,278,000 $ 553,648 $ 552,797 $ 1,194,100
Mortgage Loan Reconciliation
2020 2019 2018
(In thousands)
Beginning Balance $ 642,218 $ 427,117 $ 565,875
Additions:
New loans 66,000 1,234,244 9,900
Construction draws - - -
Total additions 66,000 1,234,244 9,900
Deductions:
Principal repayments (155,170) (1,011,353) (148,658)
Total deductions (155,170) (1,011,353) (148,658)
Effect of foreign currency translation (251) (7,790) -
Ending Balance $ 552,797 $ 642,218 $ 427,117

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2020. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of December 31, 2020, at the reasonable assurance level.
Internal Control over Financial Reporting
The information set forth under “Management Report on Internal Control over Financial Reporting” and “Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting” included in Part II, Item 8 of this Annual Report is incorporated by reference into this Item 9A.
Internal Control Changes
During the fourth quarter of 2020, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. Other Information
Not applicable.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. Directors, Executive Officers and Corporate Governance
The information required by this Item 10 is incorporated by reference to the material under the headings “Elections of Directors,” “Our Executive Officers,” “Securities Ownership,” and “Corporate Governance and Board Matters” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, which we will file with the SEC not later than April 30, 2021.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. Executive Compensation
The information required by this Item 11 is incorporated by reference to the material under the headings “Executive Compensation,” “Non-Employee Director Compensation” and “Corporate Governance and Board Matters” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, which we will file with the SEC not later than April 30, 2021.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 is incorporated by reference to the material under the headings “Equity Compensation Plan Information” and “Securities Ownership” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, which we will file with the SEC not later than April 30, 2021.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 is incorporated by reference to the material under the heading “Corporate Governance and Board Matters,” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, which we will file with the SEC not later than April 30, 2021.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. Principal Accountant Fees and Services
The information required by this Item 14 is incorporated by reference to the material under the heading “Audit Matters” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, which we will file with the SEC not later than April 30, 2021.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. Exhibits and Financial Statement Schedules
Financial Statements and Financial Statement Schedules
The following documents have been included in Part II, Item 8 of this Annual Report on Form 10-K:
Page
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2020 and 2019
Consolidated Statements of Income for the Years Ended December 31, 2020, 2019 and 2018
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2020, 2019 and 2018
Consolidated Statements of Equity for the Years Ended December 31, 2020, 2019 and 2018
Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018
Notes to Consolidated Financial Statements
Consolidated Financial Statement Schedules
Schedule III - Real Estate and Accumulated Depreciation
Schedule IV - Mortgage Loans on Real Estate
All other schedules have been omitted because they are inapplicable or not required or the information is included elsewhere in the Consolidated Financial Statements or notes thereto.
EXHIBITS
Exhibit
Number Description of Document Location of Document
3.1
Amended and Restated Certificate of Incorporation, as amended, of Ventas, Inc. Incorporated by reference herein. Previously filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed on August 5, 2011, File No. 001-10989.
3.2
Fifth Amended and Restated Bylaws, as amended, of Ventas, Inc. Incorporated by reference herein. Previously filed as Exhibit 3.2 to our Current Report on Form 8-K, filed on January 11, 2017, File No. 001-10989.
4.1
Specimen common stock certificate. Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed on February 12, 2016, File No. 001-10989.
4.2
Indenture dated as of September 19, 2006 by and among Ventas, Inc., Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuer(s), the Guarantors named therein, as Guarantors, and U.S. Bank National Association, as Trustee.
Incorporated by reference herein. Previously filed as Exhibit 4.9 to our Registration Statement on Form S-3, filed on April 7, 2006, File No. 333-133115.
4.3
Seventh Supplemental Indenture dated as of August 3, 2012 by and among Ventas Realty, Limited Partnership and Ventas Capital Corporation, as Issuers, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.250% Senior Notes due 2022. Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed on October 26, 2012, File No. 001-10989.
4.4
Indenture dated as of September 26, 2013 by and among Ventas, Inc., Ventas Realty, Limited Partnership, as Issuer, the Guarantors named therein, as Guarantors, and U.S. Bank National Association, as Trustee.
Incorporated by reference herein. Previously filed as Exhibit 4.10 to our Annual Report on Form 10-K for the year ended December 31, 2016, filed on February 14, 2017, File No. 001-10989.
4.5
Second Supplemental Indenture dated as of September 26, 2013 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 5.700% Senior Notes due 2043.
Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Current Report on Form 8-K, filed on September 26, 2013, File No. 001-10989.
4.6
Fourth Supplemental Indenture dated as of April 17, 2014 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.750% Senior Notes due 2024. Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Current Report on Form 8-K, filed on April 17, 2014, File No. 001-10989.
4.7
Fifth Supplemental Indenture dated as of January 14, 2015 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.500% Senior Notes due 2025. Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on January 14, 2015, File No. 001-10989.
4.8
Sixth Supplemental Indenture dated as of January 14, 2015 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.375% Senior Notes due 2045. Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Current Report on Form 8-K, filed on January 14, 2015, File No. 001-10989.
4.9
Indenture dated as of August 19, 1997 by and between Nationwide Health Properties, Inc. and The Bank of New York, as Trustee, relating to the 6.90% Series C Medium-Term Notes due 2037 and the 6.59% Series C Medium-Term Notes due 2038. Incorporated by reference herein. Previously filed as Exhibit 1.2 to the Nationwide Health Properties, Inc. Current Report on Form 8-K, filed on August 19, 1997, File No. 001-09028 (see Exhibit 1.2 of complete submission text file).
Exhibit
Number Description of Document Location of Document
4.10
Supplemental Indenture dated July 1, 2011 among Nationwide Health Properties, Inc., Needles Acquisition LLC, and The Bank of New York Mellon Trust Company, N.A., as successor Trustee, relating to the 6.90% Series C Medium-Term Notes due 2037 and the 6.59% Series C Medium-Term Notes due 2038. Incorporated by reference herein. Previously filed as Exhibit 4.17 to our Annual Report on Form 10-K for the year ended December 31, 2016, filed on February 14, 2017, File No. 001-10989.
4.11
Indenture dated as September 24, 2014 by and among Ventas, Inc., Ventas Canadian Finance Limited, the Guarantors parties thereto from time to time and Computershare Trust Company of Canada, as Trustee.
Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on October 24, 2014, File No. 001-10989.
4.12
Second Supplemental Indenture dated as of September 24, 2014 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 4.125% Senior Notes, Series B due 2024. Incorporated by reference herein. Previously filed as Exhibit 4.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on October 24, 2014, File No. 001-10989.
4.13
Third Supplemental Indenture dated as of January 13, 2015 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 3.30% Senior Notes, Series C due 2022. Incorporated by reference herein. Previously filed as Exhibit 4.24 to our Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 13, 2015, File No. 001-10989.
4.14
Fourth Supplemental Indenture dated as of June 1, 2017 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 2.55% Senior Notes, Series D due 2023. Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on July 28, 2017, File No. 001-10989.
4.15
Fifth Supplemental Indenture dated as of November 12, 2019 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the 2.80% Senior Notes, Series E due 2024. Incorporated by reference herein. Previously filed as Exhibit 4.15 to our Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 24, 2020, File No. 001-10989.
4.16
Sixth Supplemental Indenture dated as of November 12, 2019 by and among Ventas Canada Finance Limited, as Issuer, Ventas, Inc., as Guarantor, and Computershare Trust Company of Canada, as Trustee, relating to the Floating Rate Senior Notes, Series F due 2021. Incorporated by reference herein. Previously filed as Exhibit 4.16 to our Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 24, 2020, File No. 001-10989.
4.17
Indenture dated as of July 16, 2015 by and among Ventas, Inc., Ventas Realty, Limited Partnership, as Issuer, the Guarantors named therein as Guarantors, and U.S. Bank National Association, as Trustee. Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Current Report on Form 8-K, filed on July 16, 2015, File No. 001-10989.
4.18
First Supplemental Indenture dated as of July 16, 2015 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 4.125% Senior Notes due 2026. Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on July 16, 2015, File No. 001-10989.
4.19
Second Supplemental Indenture dated as of June 2, 2016 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.125% Senior Notes due 2023. Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on June 2, 2016, File No. 001-10989.
Exhibit
Number Description of Document Location of Document
4.20
Third Supplemental Indenture dated as of September 21, 2016 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.250% Senior Notes due 2026. Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on September 21, 2016, File No. 001-10989.
4.21
Fourth Supplemental Indenture dated as of March 29, 2017 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor, and U.S. Bank National Association, as Trustee, relating to the 3.100% Senior Notes due 2023 and the 3.850% Senior Notes due 2027. Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on March 29, 2017, File No. 001-10989.
4.22
Indenture dated February 23, 2018 among Ventas, Inc., Ventas Realty, Limited Partnership, the Guarantors named therein, and U.S. Bank National Association, as Trustee
Incorporated by reference herein. Previously filed as Exhibit 4.1 to our Current Report on Form 8-K, filed on February 23, 2018, File No. 001-10989.
4.23
First Supplemental Indenture dated as of February 23, 2018 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor and U.S. Bank National Association, as Trustee relating to the 4.000% Senior Notes due 2028
Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on February 23, 2018, File No. 001-10989.
4.24
Second Supplemental Indenture dated as of August 15, 2018 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor and U.S. Bank National Association, as Trustee relating to the 4.400% Senior Notes due 2029
Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on August 15, 2018, File No. 001-10989.
4.25
Third Supplemental Indenture dated as of February 26, 2019 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor and U.S. Bank National Association, as Trustee relating to the 3.500% Senior Notes due 2024 and 4.875% Senior Notes due 2049 Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on February 26, 2019, File No. 001-10989.
4.26
Fourth Supplemental Indenture dated as of July 3, 2019 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor and U.S. Bank National Association, as Trustee relating to the 2.650% Senior Notes due 2025 Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on July 3, 2019, File No. 001-10989.
4.27
Fifth Supplemental Indenture dated as of August 21, 2019 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor and U.S. Bank National Association, as Trustee relating to the 3.000% Senior Notes due 2030 Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on August 21, 2019, File No. 001-10989.
4.28
Sixth Supplemental Indenture dated as of April 1, 2020 by and among Ventas Realty, Limited Partnership, as Issuer, Ventas, Inc., as Guarantor and U.S. Bank National Association, as Trustee relating to the 4.750% Senior Notes due 2030.
Incorporated by reference herein. Previously filed as Exhibit 4.2 to our Current Report on Form 8-K, filed on April 1, 2020, File No. 001-10989.
4.29
Description of the Registrant’s Securities. Filed herewith.
10.1
First Amended and Restated Agreement of Limited Partnership of Ventas Realty, Limited Partnership. Incorporated by reference herein. Previously filed as Exhibit 3.5 to our Registration Statement on Form S-4, as amended, filed on May 29, 2002, File No. 333-89312.
10.2
Credit and Guaranty Agreement dated July 26, 2018 among Ventas Realty, Limited Partnership, as Borrower, Ventas, Inc., as Guarantor, The Lenders party thereto from time to time, and Bank of America, N.A., as Administrative Agent. Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, filed on October 26, 2018, File No. 001-10989.
Exhibit
Number Description of Document Location of Document
10.3
First Amendment to the Credit and Guaranty Agreement, dated as of January 29, 2021, among Ventas Realty, Limited Partnership, as Borrower, Ventas, Inc., as Guarantor, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent. Filed herewith.
10.4
Second Amended and Restated Credit and Guaranty Agreement, dated as of April 25, 2017, among Ventas Realty, Limited Partnership, Ventas SSL Ontario II, Inc., Ventas SSL Ontario III, Inc., Ventas Canada Finance Limited, Ventas UK Finance, Inc., and Ventas Euro Finance, LLC, as Borrowers, Ventas, Inc., as Guarantor, the Lenders identified therein, and Bank of America, N.A., as Administrative Agent, and Alternative Currency Fronting Lender, Bank of America, N.A. and JP Morgan Chase Bank, N.A., as Swing Line Lenders and L/C Issuers. Incorporated by reference herein. Previously filed as Exhibit 10.3.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on April 28, 2017, File No. 001-10989.
10.5
Third Amended and Restated Credit and Guaranty Agreement, dated as of January 29, 2021, among Ventas Realty, Limited Partnership, Ventas SSL Ontario II, Inc., Ventas SSL Ontario III, Inc., Ventas Canada Finance Limited, Ventas UK Finance, Inc., and Ventas Euro Finance, LLC, as Borrowers, Ventas, Inc., as Guarantor, the Lenders identified therein, Bank of America, N.A., as Administrative Agent, and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as L/C Issuers.
Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on February 2, 2021, File No. 001-10989.
10.6*
Ventas, Inc. 2004 Stock Plan for Directors, as amended. Incorporated by reference herein. Previously filed as Exhibit 10.16.1 to our Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 1, 2005, File No. 33-107942.
10.7.1*
Ventas, Inc. 2006 Incentive Plan, as amended. Incorporated by reference herein. Previously filed as Exhibit 10.10.1 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.
10.7.2*
Form of Stock Option Agreement-2006 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.15.2 to our Annual Report on Form 10-K for the year ended December 31, 2006, filed on February 22, 2007, File No. 001-10989.
10.7.3*
Form of Restricted Stock Agreement-2006 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.15.3 to our Annual Report on Form 10-K for the year ended December 31, 2006, filed on February 22, 2007, File No. 001-10989.
10.8.1*
Ventas, Inc. 2006 Stock Plan for Directors, as amended. Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on April 27, 2012, File No. 001-10989.
10.8.2*
Form of Stock Option Agreement-2006 Stock Plan for Directors. Incorporated by reference herein. Previously filed as Exhibit 10.11.2 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.
10.8.3*
Form of Amendment to Stock Option Agreement-2006 Stock Plan for Directors. Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on April 27, 2012, File No. 001-10989.
Exhibit
Number Description of Document Location of Document
10.8.4*
Form of Restricted Stock Unit Agreement-2006 Stock Plan for Directors. Incorporated by reference herein. Previously filed as Exhibit 10.11.4 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.
10.9.1*
Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on May 23, 2012, File No. 001-10989.
10.9.2*
First Amendment to the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.10.7 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on April 28, 2017, File No. 001-10989.
10.9.3*
Form of Stock Option Agreement (Employees) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.6.2 to our Annual Report on Form 10-K for the year ended December 31, 2014, filed February 13, 2015, File No. 001-10989.
10.9.4*
Form of Restricted Stock Agreement (Employees) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.6.3 to our Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 13, 2015, File No. 001-10989.
10.9.5*
Form of Stock Option Agreement (Directors) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.4 to our Registration Form on S-8, filed on August 7, 2012, File No. 333-183121.
10.9.6*
Form of Restricted Stock Agreement (Directors) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.5 to our Registration Form on S-8, filed on August 7, 2012, File No. 333-183121.
10.9.7*
Form of Restricted Stock Unit Agreement (Directors) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.6 to our Registration Form on S-8, filed on August 7, 2012, File No. 333-183121.
10.9.8*
Form of Performance-Based Restricted Stock Unit Agreement (CEO) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.10.8 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on April 28, 2017, File No. 001-10989.
10.9.9*
Form of Restricted Stock Unit Agreement (CEO) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.10.9 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on April 28, 2017, File No. 001-10989.
10.9.10*
Form of Transition Restricted Stock Unit Agreement (CEO) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.10.10 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on April 28, 2017, File No. 001-10989.
10.9.11*
Form of Performance-Based Restricted Stock Unit Agreement (Non-CEO) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.10.11 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on April 28, 2017, File No. 001-10989.
10.9.12*
Form of Restricted Stock Unit Agreement (Non-CEO) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.10.12 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on April 28, 2017, File No. 001-10989.
10.9.13*
Form of Transition Restricted Stock Unit Agreement (Non-CEO) under the Ventas, Inc. 2012 Incentive Plan. Incorporated by reference herein. Previously filed as Exhibit 10.10.13 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on April 28, 2017, File No. 001-10989.
10.10.1*
Ventas Executive Deferred Stock Compensation Plan, as amended and restated on December 7, 2017. Incorporated by reference herein. Previously filed as Exhibit 10.9.1 to our Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 9, 2018, File No. 001-10989.
Exhibit
Number Description of Document Location of Document
10.10.2*
Deferral Election Form under the Ventas Executive Deferred Stock Compensation Plan, as amended and restated on December 7, 2017. Incorporated by reference herein. Previously filed as Exhibit 10.9.2 to our Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 9, 2018, File No. 001-10989.
.
10.11.1*
Ventas Nonemployee Directors’ Deferred Stock Compensation Plan, as amended. Incorporated by reference herein. Previously filed as Exhibit 10.13.1 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.
10.11.2*
Deferral Election Form under the Ventas Nonemployee Directors’ Deferred Stock Compensation Plan. Incorporated by reference herein. Previously filed as Exhibit 10.13.2 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.
10.12.1*
Nationwide Health Properties, Inc. Retirement Plan for Directors, as amended and restated on April 20, 2006. Incorporated by reference herein. Previously filed as Exhibit 10.1 to the Nationwide Health Properties, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, filed on May 4, 2006, File No. 001-09028.
10.12.2*
Amendment dated October 28, 2008 to the Nationwide Health Properties, Inc. Retirement Plan for Directors, as amended and restated on April 20, 2006. Incorporated by reference herein. Previously filed as Exhibit 10.9 to the Nationwide Health Properties, Inc. Current Report on Form 8-K, filed on November 3, 2008, File No. 001-09028.
10.13*
Second Amended and Restated Employment Agreement dated as of March 22, 2011 between Ventas, Inc. and Debra A. Cafaro. Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on March 24, 2011, File No. 001-10989.
10.14.1*
Employee Protection and Noncompetition Agreement dated as of October 21, 2013 between Ventas, Inc. and John D. Cobb. Incorporated by reference herein. Previously filed as Exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 18, 2014, File No. 001-10989.
10.14.2*
Amendment dated December 8, 2017 to Employee Protection and Noncompetition Agreement dated as of October 21, 2013 between Ventas, Inc. and John D. Cobb. Incorporated by reference herein. Previously filed as Exhibit 10.16.2 to our Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 9, 2018, File No. 001-10989.
10.15.1*
Offer Letter dated September 16, 2014 from Ventas, Inc. to Robert F. Probst. Incorporated by reference herein. Previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on September 29, 2014, File No. 001-10989.
10.15.2*
Employee Protection and Noncompetition Agreement dated September 16, 2014 between Ventas, Inc. and Robert F. Probst. Incorporated by reference herein. Previously filed as Exhibit 10.2 to our Current Report on Form 8-K, filed on September 29, 2014, File No. 001-10989.
10.15.3*
Amendment dated December 8, 2017 to Employee Protection and Noncompetition Agreement dated as of September 16, 2014 between Ventas, Inc. and Robert F. Probst. Incorporated by reference herein. Previously filed as Exhibit 10.17.3 to our Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 9, 2018, File No. 001-10989.
10.16.1*
Offer of Employment Term Sheet dated March 20, 2018 from Ventas, Inc. to Peter J. Bulgarelli. Incorporated by reference herein. Previously filed as Exhibit 10.1.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed on April 27, 2018, File No. 001-10989.
10.16.2*
Employee Protection and Noncompetition Agreement dated March 20, 2018 between Ventas, Inc. and Peter J. Bulgarelli.
Incorporated by reference herein. Previously filed as Exhibit 10.1.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed on April 27, 2018, File No. 001-10989.
10.17*
Ventas Employee and Director Stock Purchase Plan, as amended. Incorporated by reference herein. Previously filed as Exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2008, filed on February 27, 2009, File No. 001-10989.
Exhibit
Number Description of Document Location of Document
10.18.1*
Employee Protection and Restrictive Covenants Agreement dated January 21, 2020 between Ventas, Inc. and Carey Shea Roberts.
Incorporated by reference herein. Previously filed as Exhibit 10.2.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 8, 2020, File No. 001-10989.
10.18.2*
Employment Bonus Agreement dated March 4, 2020 between Ventas, Inc. and Carey Shea Roberts.
Incorporated by reference herein. Previously filed as Exhibit 10.2.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 8, 2020, File No. 001-10989.
10.18.3*
Offer Letter dated December 22, 2019 from Ventas, Inc. to Carey Shea Roberts.
Filed herewith.
10.19.1*
Employee Protection and Restrictive Covenants Agreement dated February 7, 2020 between Ventas, Inc. and J. Justin Hutchens.
Incorporated by reference herein. Previously filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 8, 2020, File No. 001-10989.
10.19.2*
Offer Letter dated January 30, 2020 from Ventas, Inc. to J. Justin Hutchens. Filed herewith.
Subsidiaries of Ventas, Inc. Filed herewith.
List of Guarantors and Issuers of Guaranteed Securities. Filed herewith.
Consent of KPMG LLP. Filed herewith.
31.1
Certification of Debra A. Cafaro, Chairman and Chief Executive Officer, pursuant to Rule 13a-14(a) under the Exchange Act. Filed herewith.
31.2
Certification of Robert F. Probst, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a) under the Exchange Act. Filed herewith.
32.1
Certification of Debra A. Cafaro, Chairman and Chief Executive Officer, pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. 1350. Filed herewith.
32.2
Certification of Robert F. Probst, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. 1350. Filed herewith.
101 The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Equity, (v) the Consolidated Statements of Cash Flows, (vi) Notes to the Consolidated Financial Statements and (vii) Schedule III and IV. Filed herewith.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document). Filed herewith.
* Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.