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PROPERTY ACQUISITION
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12 Months Ended |
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Aug. 31, 2014
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| PROPERTY ACQUISITION | |
| PROPERTY ACQUISITION |
NOTE 3 PROPERTY ACQUISITION
On June 5, 2014, the Company completed the acquisition of a 56-bed long term acute care hospital located at 1870 S 75th Street, Omaha, Nebraska for approximately $21,700,000 (approximately $21.9 million after including legal fees). The Omaha facility is operated by Select Specialty Hospital Omaha, Inc. pursuant to a sublease which expires in 2023, with sub lessee options to renew up to 60 years (the operating lease). Also, the real property where the Omaha facility and other improvements are located are subject to a land lease with Catholic Health Initiatives, a Colorado nonprofit corporation (the land lease). The land lease expires in 2023 with sub lessee options to renew up to 60 years.
When at the date of acquisition an acquired property has an existing tenant the Company accounts for its acquisition of real estate in accordance with FASB ASC 805, Accounting for Business Combinations, Goodwill, and Other Intangible Assets, which requires the purchase price of acquired properties be allocated to the acquired tangible assets and liabilities, consisting of land, building, and identified intangible assets, based in each case on their fair values. The Company identified no intangible assets in connection with its acquisition of the Omaha facility. |