Annual report pursuant to Section 13 and 15(d)

Property Portfolio

v3.20.1
Property Portfolio
12 Months Ended
Dec. 31, 2019
Property Portfolio  
Property Portfolio

Note 3 – Property Portfolio

Summary of Properties Acquired During the Year Ended December 31, 2019

During the year ended December 31, 2019 the Company completed 18 acquisitions. For each acquisition, substantially all of the fair value was concentrated in a single identifiable asset or group of similar identifiable assets and, therefore, each acquisition represents an asset acquisition. Accordingly, transaction costs for these acquisitions were capitalized.

A  rollforward of the gross investment in land, building, improvements, and acquired lease intangible assets as of December 31, 2019 resulting from these acquisitions is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross 

 

    

 

 

    

 

 

    

Site

 

Tenant 

    

Acquired Lease 

    

Investment in 

 

 

Land

 

Building

 

Improvements

 

Improvements

 

Intangible Assets

 

Real Estate

Balances as of December 31, 2018

 

$

63,710

 

$

518,451

 

$

6,880

 

$

15,357

 

$

43,152

 

$

647,550

Facility Acquired – Date Acquired:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Zachary – 2/28/19

 

 

 —

 

 

3,336

 

 

103

 

 

409

 

 

835

 

 

4,683

Gilbert and Chandler – 3/19/19

 

 

4,616

 

 

11,643

 

 

 —

 

 

 —

 

 

 —

 

 

16,259

  Las Vegas – 4/15/19

 

 

2,479

 

 

15,277

 

 

244

 

 

2,205

 

 

2,297

 

 

22,502

  Oklahoma Northwest – 4/15/19

 

 

2,364

 

 

19,501

 

 

143

 

 

3,044

 

 

3,155

 

 

28,207

  Mishawaka – 4/15/19

 

 

1,924

 

 

10,084

 

 

74

 

 

1,798

 

 

2,223

 

 

16,103

  Surprise – 4/15/19

 

 

1,738

 

 

18,737

 

 

228

 

 

4,119

 

 

3,860

 

 

28,682

  San Marcos – 7/12/19

 

 

2,322

 

 

6,934

 

 

126

 

 

404

 

 

2,188

 

 

11,974

  Lansing – 8/1/19

 

 

1,202

 

 

7,681

 

 

185

 

 

667

 

 

1,633

 

 

11,368

  Bannockburn – 8/5/19

 

 

763

 

 

3,566

 

 

132

 

 

1,134

 

 

1,382

 

 

6,977

  Aurora – 8/6/19

 

 

1,521

 

 

7,446

 

 

308

 

 

603

 

 

2,679

 

 

12,557

  Livonia – 8/14/19

 

 

980

 

 

7,629

 

 

201

 

 

442

 

 

1,340

 

 

10,592

  Gilbert – 8/23/19

 

 

2,408

 

 

2,027

 

 

62

 

 

362

 

 

733

 

 

5,592

  Morgantown – 9/26/19

 

 

883

 

 

5,286

 

 

373

 

 

506

 

 

902

 

 

7,950

  Beaumont – 10/1/19

 

 

3,022

 

 

24,836

 

 

399

 

 

1,036

 

 

4,446

 

 

33,739

  Bastrop – 10/25/19

 

 

1,975

 

 

8,436

 

 

64

 

 

276

 

 

1,314

 

 

12,065

  Panama City – 10/31/19

 

 

1,559

 

 

8,682

 

 

220

 

 

1,036

 

 

1,479

 

 

12,976

  Jacksonville – 11/15/19

 

 

1,023

 

 

7,846

 

 

 —

 

 

 —

 

 

 —

 

 

8,869

  Greenwood – 12/17/19

 

 

892

 

 

4,956

 

 

 —

 

 

 —

 

 

 —

 

 

5,848

ASC Topic 842 Reclassification

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(824)

 

 

(824)

Capitalized costs(1)

 

 

 —

 

 

1,179

 

 

170

 

 

511

 

 

 —

 

 

1,860

Total Additions:

 

 

31,671

 

 

175,082

 

 

3,032

 

 

18,552

 

 

29,642

 

 

257,979

Balances as of December 31, 2019

 

$

95,381

 

$

693,533

 

$

9,912

 

$

33,909

 

$

72,794

 

$

905,529


(1)

Represents capital projects that were completed and placed in service during the year ended December 31, 2019 related to the Company’s existing facilities.

Depreciation expense was $19,066,  $13,644, and $7,929,  for the years ended December 31, 2019, 2018, and 2017, respectively.

As of December 31, 2019, the Company had aggregate capital improvement commitments and obligations to improve, expand, and maintain the Company’s existing facilities of approximately $18 million. Many of these amounts are subject to contingencies that make it difficult to predict when they will be utilized, if at all. In accordance with the terms of the Company’s leases, capital improvement obligations in the next twelve months could total up to approximately $11 million.

The following is a summary of the acquisitions completed during the year ended December 31, 2019.

Zachary Facility

On February 28, 2019, the Company assumed the following leasehold interests in the real property located in Zachary, Louisiana for a purchase price of approximately $4.6 million: (i) the interest, as ground lessee, in an existing ground lease of the facility, with approximately 46 years remaining in the initial term with no extension options; and (ii) the interest, as landlord, in an existing lease of the facility with LTAC Hospital of Feliciana, LLC, as tenant, with approximately 16 years remaining in the initial term, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

103

Building and tenant improvements

 

 

3,745

In-place leases

 

 

305

Above-market lease intangibles

 

 

117

Leasing costs

 

 

413

Below-market lease intangibles

 

 

(34)

Total purchase price

 

$

4,649

 

Gilbert and Chandler Facilities

On March 19, 2019, the Company purchased the following facilities located in Gilbert, Arizona and Chandler, Arizona for a total purchase price of approximately $16.3 million: (i) two medical office buildings located in Gilbert, Arizona; (ii) two medical office suites located in Chandler, Arizona; (collectively, the “Gilbert and Chandler Facilities”). Upon the closing of the acquisition, the Company assumed the seller’s interest, as lessor, in two existing leases and entered into three new leases, as lessor, at the Gilbert and Chandler Facilities. The Gilbert and Chandler leases have a weighted average remaining lease term of 10.5 years, exclusive of tenant renewal options. 

IRF Portfolio

On April 15, 2019, the Company purchased four in-patient rehabilitation facilities located in Las Vegas, Nevada; Surprise, Arizona; Oklahoma City, Oklahoma and Mishawaka, Indiana (collectively, the “IRF Portfolio”) for a total purchase price of approximately $94.6 million. Upon the closing of the acquisition, the Company assumed the sellers’ interest, as lessor, in four existing leases at the properties (collectively, the “IRF Portfolio Leases”) with (i) Encompass Health (Las Vegas, Nevada facility); (ii) a joint venture between Cobalt Rehabilitation and Tenet Healthcare (the Surprise, Arizona facility); (iii) a joint venture between Mercy Health and Kindred Healthcare (the Oklahoma City, Oklahoma facility); and (iv) St. Joseph’s Health System (the Mishawaka, Indiana facility).  The IRF Portfolio leases have a weighted average remaining lease term of approximately 8.3 years, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Las Vegas

 

Surprise

 

Oklahoma City

    

Mishawaka

Land and site improvements

 

$

2,723

 

$

1,966

 

$

2,507

 

$

1,998

Building and tenant improvements

 

 

17,482

 

 

22,856

 

 

22,545

 

 

11,882

In-place leases

 

 

1,778

 

 

1,845

 

 

1,890

 

 

1,465

Above-market lease intangibles

 

 

 —

 

 

938

 

 

367

 

 

236

Leasing costs

 

 

519

 

 

1,077

 

 

898

 

 

522

Below-market lease intangibles

 

 

(863)

 

 

 —

 

 

 —

 

 

 —

Total purchase price

 

$

21,639

 

$

28,682

 

$

28,207

 

$

16,103

 

San Marcos Facility

On July 12, 2019, the Company purchased a medical office building located in San Marcos, California (the “San Marcos Facility”), for a purchase price of approximately $12.0 million. Upon closing, the Company assumed the existing lease of the San Marcos Facility with California Cancer Associates for Research and Excellence, Inc., as tenant. The lease has eight years remaining in the initial term, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

2,448

Building and tenant improvements

 

 

7,338

In-place leases

 

 

698

Above-market lease intangibles

 

 

1,101

Leasing costs

 

 

389

Total purchase price

 

$

11,974

 

Lansing Facilities

On August 1, 2019, the Company purchased the following real property and buildings thereon located in Lansing, Michigan for a total purchase price of approximately $11.1 million: (i) 3390 East Jolly Road; (ii) 3955 Patient Care Drive; and (iii) 3400 East Jolly Road (“collectively, the “Lansing Facilities”). Upon closing, the Company assumed sellers’ interest, as lessor, in four existing leases and entered into two new leases at the Lansing Facilities (the “Lansing Leases”). The Lansing Leases have a weighted-average remaining term of 8.5 years, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

1,387

Building and tenant improvements

 

 

8,348

In-place leases

 

 

953

Above-market lease intangibles

 

 

130

Leasing costs

 

 

550

Below-market lease intangibles

 

 

(248)

Total purchase price

 

$

11,120

 

Bannockburn Facility

On August 5, 2019, the Company purchased an office building located in Bannockburn, Illinois (the “Bannockburn Facility”), for a purchase price of approximately $6.8 million. Upon closing, the Company assumed seller’s interest, as lessor, in 14 existing leases at the Bannockburn Facility (the “Bannockburn Leases”). The Bannockburn Leases have a weighted-average remaining term of 6.3 years, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed. 

 

 

 

 

 

Land and site improvements

    

$

895

Building and tenant improvements

 

 

4,700

In-place leases

 

 

796

Above-market lease intangibles

 

 

250

Leasing costs

 

 

336

Below-market lease intangibles

 

 

(144)

Total purchase price

 

$

6,833

 

Aurora Facility

On August 6, 2019, the Company purchased a medical office building located in Aurora, Illinois (the “Aurora Facility”), for a purchase price of approximately $12.6 million. Upon closing, the Company assumed the existing lease of the Aurora Facility with Dreyer Clinic Inc., as tenant (the “Dreyer Lease”). The Dreyer Lease has approximately six years remaining in the initial term, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

1,829

Building and tenant improvements

 

 

8,049

In-place leases

 

 

1,417

Above-market lease intangibles

 

 

861

Leasing costs

 

 

401

Total purchase price

 

$

12,557

 

Livonia Facility

 

On August 14, 2019, the Company purchased a medical office building located in Livonia, Michigan (the “Livonia Facility”) for a purchase price of approximately $10.4 million. Upon closing, the Company assumed 10 existing leases at the Livonia Facility (the “Livonia Leases”). The Livonia Leases have a weighted-average remaining term of 3.2 years, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

1,181

Building and tenant improvements

 

 

8,071

In-place leases

 

 

1,252

Above-market lease intangibles

 

 

53

Leasing costs

 

 

35

Below-market lease intangibles

 

 

(236)

Total purchase price

 

$

10,356

 

Gilbert Facility

On August 23, 2019, the Company purchased certain condominium units within two medical office buildings located in Gilbert, Arizona (the “Gilbert Facility”) for a total purchase price of approximately $5.6 million. Upon closing, the Company leased the Gilbert Facility to Covenant Surgical Partners, Inc., a Delaware corporation (the “Covenant Lease”). The Covenant Lease has approximately 10 years remaining in the initial term, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

2,470

Building and tenant improvements

 

 

2,389

In-place leases

 

 

121

Above-market lease intangibles

 

 

300

Leasing costs

 

 

312

Total purchase price

 

$

5,592

 

Morgantown Facility

On September 26, 2019, the Company purchased a parcel of land and an office building that is being constructed thereon, located in Morgantown, West Virginia (the ”Morgantown Facility”) for a total purchase price of approximately $8.0 million. Upon closing, the Company assumed the existing lease of the Morgantown Facility with Urgent Care MSO, LLC, as tenant (the “Urgent Care Lease”). The Urgent Care Lease has approximately ten years remaining in the initial term, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

1,256

Building and tenant improvements

 

 

5,792

In-place leases

 

 

457

Leasing costs

 

 

445

Total purchase price

 

$

7,950

 

Beaumont Facility

On October 1, 2019, the Company purchased a medical office building located in Beaumont, Texas (the “Beaumont Facility”) for a total purchase price of approximately $33.7 million. Upon closing, the Company assumed the existing lease of the Beaumont Facility with The Medical Center of Southeast Texas, LP, as tenant (the “Medical Center Lease”). The Medical Center Lease has 10 years remaining in the initial term, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

3,421

Building and tenant improvements

 

 

25,872

In-place leases

 

 

3,304

Leasing costs

 

 

1,142

Total purchase price

 

$

33,739

 

Bastrop Facility

On October 25, 2019, the Company purchased a medical emergency center located in Bastrop, Texas (the “Bastrop Facility”) for a total purchase price of approximately $12.1 million. Upon closing, the Company assumed the existing lease of the Bastrop Facility with St. David’s Healthcare Partnership, L.P., LLP, as tenant (the “St. David’s Lease”). The St. David’s Lease has approximately five years remaining in the initial term, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

2,039

Building and tenant improvements

 

 

8,712

In-place leases

 

 

990

Leasing costs

 

 

324

Total purchase price

 

$

12,065

 

Panama City Facilities

On October 31, 2019, the Company purchased a medical office building located in Panama City, Florida (the “Panama City Facility”); (ii) a medical office building located in Panama City Beach, Florida (the “PCB Facility”); and (iii) a medical office building located in Chipley, Florida (the “Chipley Facility”) for a total purchase price of approximately $13.0 million. Upon closing, the Company assumed the existing leases with SCP Eye Care Services, LLC, as tenant (the “SCP Leases”), at the Panama City Facility, the PCB Facility and the Chipley Facility. The SCP Leases have approximately 15 years remaining in the initial term, exclusive of tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

1,779

Building and tenant improvements

 

 

9,718

In-place leases

 

 

405

Leasing costs

 

 

1,074

Total purchase price

 

$

12,976

 

Jacksonville Facilities

On November 15, 2019, the Company purchased a condominium unit located in Ponte Vedra, Florida (the “Ponte Vedra Facility”) and a medical office building located in Jacksonville, Florida (the “Riverside Facility”), for a total purchase price of approximately $8.9 million. Upon closing, the Company entered into new leases of the Ponte Vedra Facility and the Riverside Facility to Southeast Orthopedic Specialists, Inc., as tenant, with each lease having an initial term of 15 years, exclusive of tenant renewal options. The following table presents the details of the tangible assets acquired:

 

 

 

 

 

Land and site improvements

    

$

1,023

Building and tenant improvements

 

 

7,846

  Total purchase price

 

$

8,869

 

Greenwood Facility

On December 17, 2019, the Company purchased a medical office building located in Greenwood, Indiana (the “Greenwood Facility”), for a purchase price of approximately $5.8 million. Upon closing, the Company assumed the existing leases of the Greenwood Facility with (i) Indiana Eye Clinic, LLC, as tenant, (ii) Glasshouse Optical, Inc., as tenant, and (iii) The Ambulatory Surgery Center at the Indiana Eye Clinic, LLC, as tenant. Each lease has approximately 13 years remaining in the initial terms, exclusive of tenant renewal options. The following table presents the details of the tangible assets acquired:

 

 

 

 

 

Land and site improvements

    

$

892

Building and tenant improvements

 

 

4,956

  Total purchase price

 

$

5,848

 

Summary of Properties Acquired During the Year Ended December 31, 2018

During the year ended December 31, 2018, the Company completed 14 acquisitions. Substantially all of the fair value of the acquisitions was concentrated in a single identifiable asset or group of similar identifiable assets and, therefore, all of the acquisitions represent asset acquisitions. Accordingly, transaction costs for these acquisitions were capitalized.

A rollforward of the gross investment in land, building, improvements, and acquired lease intangible assets as of December 31, 2018 resulting from these acquisitions is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

 

    

 

 

    

 

 

 

Site 

 

Tenant 

 

Acquired Lease 

    

Investment in 

 

 

Land

 

Building

 

Improvements

 

Improvements

 

Intangibles

 

Real Estate

Balances as of January 1, 2018

 

$

42,701

 

$

384,338

 

$

4,808

 

$

8,010

 

$

31,650

 

$

471,507

Facility Acquired – Date Acquired:

 

 

  

 

 

  

 

 

 

 

 

  

 

 

  

 

 

  

Moline / Silvis – 1/24/18

 

 

 —

 

 

4,895

 

 

249

 

 

967

 

 

989

 

 

7,100

Freemont – 2/9/18

 

 

162

 

 

8,335

 

 

 —

 

 

 —

 

 

 —

 

 

8,497

Gainesville – 2/23/18

 

 

625

 

 

9,885

 

 

 —

 

 

 —

 

 

 —

 

 

10,510

Dallas – 3/1/18

 

 

6,272

 

 

17,012

 

 

 —

 

 

 —

 

 

 —

 

 

23,284

Orlando – 3/22/18

 

 

2,543

 

 

11,720

 

 

532

 

 

224

 

 

1,395

 

 

16,414

Belpre – 4/19/18

 

 

3,025

 

 

50,526

 

 

972

 

 

2,994

 

 

7,166

 

 

64,683

McAllen – 7/3/18

 

 

1,099

 

 

4,296

 

 

 —

 

 

 —

 

 

 —

 

 

5,395

Derby – 8/3/18

 

 

412

 

 

2,496

 

 

154

 

 

89

 

 

453

 

 

3,604

Bountiful – 10/12/18

 

 

720

 

 

4,185

 

 

 —

 

 

 —

 

 

 —

 

 

4,905

Cincinnati – 10/30/18

 

 

1,745

 

 

1,336

 

 

79

 

 

474

 

 

492

 

 

4,126

Melbourne – 11/16/18

 

 

645

 

 

5,950

 

 

86

 

 

31

 

 

1,007

 

 

7,719

Southern IL – 11/30/18

 

 

1,830

 

 

12,660

 

 

 —

 

 

 —

 

 

 —

 

 

14,490

Vernon – 12/19/18

 

 

1,166

 

 

9,929

 

 

 —

 

 

 —

 

 

 —

 

 

11,095

Corona – 12/31/18

 

 

1,601

 

 

14,689

 

 

 —

 

 

 —

 

 

 —

 

 

16,290

Tenant improvements(1)

 

 

 —

 

 

 —

 

 

 —

 

 

2,568

 

 

 —

 

 

2,568

Total Additions:

 

 

21,845

 

 

157,914

 

 

2,072

 

 

7,347

 

 

11,502

 

 

200,680

Great Bend Disposition – 12/20/18

 

 

(836)

 

 

(23,801)

 

 

 —

 

 

 —

 

 

 —

 

 

(24,637)

Balances as of December 31, 2018

 

$

63,710

 

$

518,451

 

$

6,880

 

$

15,357

 

$

43,152

 

$

647,550


(1)  Represents tenant improvements that were completed and placed in service during the year ended December 31, 2018 related to the Company’s existing facilities.

As of December 31, 2018, the Company had aggregate capital improvement commitments to improve or expand existing tenant space of $17 million. Many of these allowances are subject to contingencies that make it difficult to predict when such allowances will be utilized, if at all. In accordance with the terms of a number of the Company’s leases, tenant improvement obligations in 2019 could total approximately $9 million.

The following is a summary of the 14 acquisitions completed during the year ended December 31, 2018.

Moline / Silvis Facilities

Moline Facility On January 24, 2018, the Company purchased a medical office building located in Moline, Illinois, which included the seller’s interest, as ground lessee, in an existing ground lease. The ground lease has approximately 10 years remaining in the initial term, with 12 consecutive five-year renewal options. Upon the closing of this acquisition, the Company assumed two subleases: one sublease with Fresenius Medical Care Quad Cities, LLC (“Fresenius”) with approximately 13 years remaining in the initial term, with three consecutive five-year renewal options; and one sublease with Quad Cities Nephrology Associates, P.L.C. with approximately 15 years remaining in the initial term, with three consecutive five-year renewal options.

Silvis Facility - On January 24, 2018, the Company purchased a medical office building located in Silvis, Illinois from the same seller as the Moline facility, which included the seller’s interest, as ground lessee, in an existing ground lease. The ground lease has approximately 67 years remaining in the initial term, with no renewal options. Upon the closing of this acquisition, the Company assumed one sublease with Fresenius with approximately 13 years remaining in the initial term, with three consecutive five-year renewal options.

The aggregate purchase price for the Moline/Silvis facilities was $6.9 million. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed for this acquisition:

 

 

 

 

 

Site improvements

    

$

249

Building and tenant improvements

 

 

5,862

In-place leases

 

 

343

Above market ground lease intangibles

 

 

219

Leasing costs

 

 

427

Below market lease intangibles

 

 

(229)

Total purchase price

 

$

6,871

 

Fremont Facility - On February 9, 2018, the Company purchased a medical office building located in Fremont, Ohio for a purchase price of approximately $8.5 million. Upon the closing of this acquisition, the Company entered into a new 12-year lease with Northern Ohio Medical Specialists, LLC (NOMS) with four consecutive five-year renewal options.

Gainesville Facility - On February 23, 2018, the Company purchased a medical office building and ambulatory surgery center located in Gainesville, Georgia for a purchase price of approximately $10.5 million. Upon the closing of this acquisition, the Company entered into a new 12-year lease with SCP Eye Care Services, LLC with four consecutive five-year renewal options.

Dallas Facility - On March 1, 2018, the Company purchased a hospital, a three-story parking garage, and land all located in Dallas, Texas for an aggregate purchase price of approximately $23.3 million. In addition to the hospital and the parking garage, the land underlays two medical office buildings that are not owned by the Company, each of which is ground leased to the hospital. Upon the closing of this acquisition, the Company entered into two leases with Pipeline East Dallas, LLC, with one lease relating to the hospital and the other lease relating to the underlying land and parking garage.

Orlando Facilities – On March 22, 2018, the Company purchased five medical office buildings located in Orlando, Florida from five affiliated sellers for an aggregate purchase price of approximately $16.4 million. Upon the closing of this acquisition, the Company assumed five existing leases with Orlando Health, Inc. One lease has approximately one year remaining in its initial term, with one 10-year renewal option; one lease has approximately six years remaining in its initial term, with three consecutive five-year renewal options; one lease has approximately six years remaining in its initial term, with four consecutive five-year renewal options; one lease has approximately six years remaining in its initial term, with three consecutive five-year renewal options; and one lease was amended at closing to extend the remaining term to five years with four consecutive five-year renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

3,075

Building and tenant improvements

 

 

11,944

In-place leases

 

 

808

Above market lease intangibles

 

 

229

Leasing costs

 

 

358

Below market lease intangibles

 

 

(10)

Total purchase price

 

$

16,404

 

Belpre Portfolio - On April 19, 2018, the Company purchased a portfolio of four medical office buildings and a right of first refusal to purchase a fifth, yet to be built, medical office building on the same campus, for an aggregate purchase price of approximately $64.1 million. Upon the closing of the acquisition the Company assumed the existing leases with Marietta Memorial Hospital, a subsidiary of Memorial Health System and such leases had a weighted average remaining lease term of approximately 11.35 years, each with three consecutive five-year tenant renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

3,997

Building and tenant improvements

 

 

53,520

In-place leases

 

 

2,660

Above market lease intangibles

 

 

2,527

Leasing costs

 

 

1,979

Below market lease intangibles

 

 

(632)

Total purchase price

 

$

64,051

 

McAllen Facility - On July 3, 2018, the Company purchased a medical office building (and adjacent condominium) located in McAllen, Texas for a purchase price of approximately $5.4 million. Upon the closing of this acquisition, the Company entered into a new 11-year lease with Valley Ear, Nose, and Throat Specialists, PA, with two consecutive 10-year renewal options.

Derby Facility - On August 3, 2018, the Company purchased a medical office building located in Derby, Kansas for a purchase price of approximately $3.6 million. Upon the closing of this acquisition, the Company assumed the existing lease with Rock Surgery Center, LLC. The lease has approximately nine years remaining in its initial term, with one five-year tenant renewal option. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

566

Building and tenant improvements

 

 

2,585

In-place leases

 

 

299

Leasing costs

 

 

154

Below market lease intangibles

 

 

(23)

Total purchase price

 

$

3,581

 

Bountiful Facility - On October 12, 2018, the Company purchased a medical office building located in Bountiful, Utah for a purchase price of approximately $4.9 million. Upon the closing of this acquisition, the Company entered into a lease with Ryan K. Anderson, D.P.M., P.C., a professional corporation doing business as Foot and Ankle Specialists of Utah. The lease has an initial term of 15 years, with two consecutive 15 year extension options.

Cincinnati Facility - On October 30, 2018, the Company purchased a medical office building located in Cincinnati, Ohio, for a purchase price of approximately $4.0 million. Upon the closing of the acquisition, the Company assumed the existing leases with TriHealth, Inc., as tenant as follows: (i) the lease of Unit A with seven years remaining in the initial term and three consecutive five year renewal options; (ii) the lease of Unit B with eight years remaining in the initial term and three consecutive five year renewal options; and (iii) the lease of Unit C with seven years remaining in the initial term and three consecutive five year renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

1,824

Building and tenant improvements

 

 

1,810

In-place leases

 

 

236

Above market lease intangibles

 

 

131

Leasing costs

 

 

125

Below market lease intangibles

 

 

(52)

Total purchase price

 

$

4,074

 

Melbourne Facility – On November 16, 2018, the Company purchased a medical office building located in Melbourne, Florida for a purchase price of approximately $7.7 million. Upon the closing of the acquisition, the Company assumed the existing lease with Brevard Radiation Oncology, LLC, as tenant. The lease has five years remaining in the initial term, with two consecutive five year renewal options. The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:

 

 

 

 

 

Land and site improvements

    

$

731

Building and tenant improvements

 

 

5,981

In-place leases

 

 

346

Above market lease intangibles

 

 

504

Leasing costs

 

 

157

Total purchase price

 

$

7,719

 

Southern IL Facilities - On November 30, 2018, the Company purchased six buildings at four locations in Southern Illinois, for an aggregate purchase price of approximately $14.5 million. Details regarding the six buildings and the Company’s tenants and lease terms are as follows:

Two of the six buildings are medical office buildings located in Shiloh, Illinois. Upon the closing of the acquisition, the Company assumed two leases at one of the buildings located in Shiloh as follows: (i) a lease of Suite 1 with SSM Health Care St. Louis with approximately seven years remaining in the initial term and two consecutive five year renewal options; and (ii) a lease of Suite 2 with Metro East Dermatology and Skin Cancer Center, LLC with approximately one year remaining in the initial term and consecutive one year renewal options unless the Company or the tenant terminates the lease in writing prior to the expiration of the term. Upon the closing of the acquisition of the second building located in Shiloh, the Company assumed a lease of Suite 2 with Quest Diagnostics Clinical Laboratories, Inc. with approximately nine months remaining in the initial term and two consecutive five year renewal options. The Company entered into a new lease of Suite 1 with Heartland Women’s Healthcare IL, P.C. having an initial term of 12 years and two consecutive five year renewal options. The tenant’s obligations under this lease are guaranteed by USA OBGYN Management, LLC.

One of the six buildings is a mixed-use, commercial building located in Carbondale, Illinois. At the time of the closing of the acquisition, portions of the building were leased to six different tenants for medical, general office and restaurant uses. Simultaneously with the closing, the Company entered into a lease with Seller’s affiliate, Heartland Women’s Healthcare, Ltd. (the “Master Tenant”) having an initial term of 12 years and two consecutive five year renewal options. For the first five years of the initial term, the Master Tenant master leases the entire building (with the leases existing at the time of closing being converted to subleases between the Master Tenant and such tenants). For the last seven years of the initial term and any renewal terms, the premises is reduced to 6,592 rentable square feet, and any other leases then in effect are assigned to the Company and become direct leases between the Company and the tenants under those leases. The Master Tenant’s obligations under this lease are guaranteed by USA OBGYN Management, LLC.

One of the six buildings is a medical office building located in Marion, Illinois. Upon the closing of the acquisition, the Company entered into a lease with Heartland Women’s Healthcare, Ltd. for the entire building, having an initial term of 12 years and two consecutive five year renewal options. The tenant’s obligations under this lease are guaranteed by USA OBGYN Management, LLC.

Two of the six buildings are medical office buildings located in Mount Vernon, Illinois. Upon the closing of the acquisition, the Company entered into a lease with Heartland Women’s Healthcare, Ltd. for both buildings, having an initial term of 12 years and two consecutive five year renewal options. The tenant’s obligations under this lease are guaranteed by USA OBGYN Management, LLC.

Vernon Facilities - On December 19, 2018, the Company purchased two medical office buildings located in Vernon, Connecticut for a total purchase price of approximately $10.9 million. Upon the closing of the acquisition, the Company leased the facilities to Prospect ECHN, Inc. One lease has an initial term of 15 years with two consecutive 10-year extension option, and the other lease has an initial term of 12 years with two consecutive 10-year extension options.

Corona Facility - On December 31, 2018, the Company purchased a medical office building located in Corona, California for a purchase price of approximately $17.2 million. Upon the closing of the acquisition, the Company entered into a lease with Citrus Valley Medical Associates, Inc. The lease has an initial term of 12 years with no renewal option.

Disposition

On December 20, 2018, the Company disposed of the Great Bend Regional Hospital receiving gross proceeds of $32.5 million, resulting in a gain of approximately $7.7 million. After commissions and expenses paid, net proceeds received were $31.6 million.

Intangible Assets and Liabilities

The following is a summary of the carrying amount of intangible assets and liabilities as of December 31, 2019 and 2018:

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2019

 

    

 

 

    

Accumulated 

    

 

 

 

 

Cost

 

Amortization

 

Net

Assets

 

 

  

 

 

  

 

 

  

In-place leases

 

$

39,429

 

$

(7,851)

 

$

31,578

Above market leases

 

 

12,246

 

 

(2,366)

 

 

9,880

Leasing costs

 

 

21,119

 

 

(3,458)

 

 

17,661

 

 

$

72,794

 

$

(13,675)

 

$

59,119

Liability

 

 

 

 

 

 

 

 

 

Below market leases

 

$

3,861

 

$

(697)

 

$

3,164

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2018

 

 

 

 

 

Accumulated

 

 

 

 

    

Cost

    

Amortization

    

Net

Assets

 

 

  

 

 

  

 

 

  

In-place leases

 

$

21,753

 

$

(4,037)

 

$

17,716

Above market ground lease

 

 

707

 

 

(28)

 

 

679

Above market leases

 

 

8,009

 

 

(1,096)

 

 

6,913

Leasing costs

 

 

12,683

 

 

(1,703)

 

 

10,980

 

 

$

43,152

 

$

(6,864)

 

$

36,288

Liability

 

 

  

 

 

  

 

 

  

Below market leases

 

$

2,336

 

$

(308)

 

$

2,028

 

The following is a summary of the acquired lease intangible amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2019

 

2018

 

2017

Amortization expense related to in-place leases

    

$

3,814

    

$

2,460

    

$

1,542

Amortization expense related to leasing costs

 

$

1,755

 

$

1,165

 

$

530

Decrease in rental revenue related to above market ground lease

 

$

 —

 

$

22

 

$

 6

Decrease in rental revenue related to above market leases

 

$

1,270

 

$

876

 

$

220

Increase in rental revenue related to below market leases

 

$

(389)

 

$

(210)

 

$

(97)

 

Future aggregate net amortization of the acquired lease intangible assets and liabilities as of December 31, 2019, is as follows:

 

 

 

 

 

 

 

 

 

    

Net Decrease

    

Increase

 

 

in Revenue

 

in Expense

2020

 

$

(986)

 

$

7,332

2021

 

 

(988)

 

 

6,717

2022

 

 

(997)

 

 

6,350

2023

 

 

(1,024)

 

 

5,728

2024

 

 

(634)

 

 

5,314

Thereafter

 

 

(2,087)

 

 

17,798

Total

 

$

(6,716)

 

$

49,239

 

For the year ended December 31, 2019, the weighted average amortization period for asset lease intangibles and liability lease intangibles are 6.70 years and 6.16 years, respectively.

Unaudited Pro Forma Financial Information

No acquisitions that occurred during 2019 and 2018 qualified for treatment as a business combination and therefore pro forma information is not provided for acquisitions that occurred during those years. The businesses acquired in 2017 that were accounted for as business combinations were included in our results of operations from the dates of acquisition. The following table provides summary unaudited pro forma information as if the Company’s acquisitions during the year ended December 31, 2017 that were accounted for as if business combinations had occurred as of January 1, 2017:

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2017

 

 

(unaudited)

 

 

 

 

Revenue

    

$

38,140

Net income

 

$

1,828

Net income attributable to common stockholders

 

$

41

Income attributable to common stockholders per share – basic and diluted

 

$

 —

Weighted average shares outstanding – basic and diluted

 

$

19,617