|3 Months Ended|
Mar. 31, 2019
|Property, Plant and Equipment [Abstract]|
|Property, Plant and Equipment Disclosure [Text Block]||
Note 3 – Property Portfolio
Summary of Properties Acquired During the Three Months Ended March 31, 2019
During the three months ended March 31, 2019 the Company completed two acquisitions. For both acquisitions, substantially all of the fair value was concentrated in a single identifiable asset or group of similar identifiable assets and, therefore, represent asset acquisitions. Accordingly, transaction costs for these acquisitions were capitalized.
A rollforward of the gross investment in land, building and improvements as of March 31, 2019 resulting from these acquisitions as well as other tenant improvements is as follows:
Depreciation expense was $3,867 and $2,906 for the three months ended March 31, 2019 and 2018, respectively.
As of March 31, 2019, the Company had aggregate capital improvement commitments and obligations to improve, expand, and maintain the Company’s facilities of $20,825. 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, capital improvement obligations in 2019 could total up to approximately $12,790.
The following is a summary of the acquisitions completed during the three months ended March 31, 2019.
On February 28, 2019, the Company assumed the following leasehold interests in the real property located in Zachary, Louisiana for a purchase price of $4.6 million:
(i) the interest, as ground lessee, in an existing ground lease of the facility with the fee owner as ground lessor, with approximately 46 years remaining in the initial term with no extension options; (ii) the interest arising under the ground lease in and to the long-term acute-care hospital located at the facility; and (iii) 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 with three consecutive 10-year extension options.The following table presents the details of the tangible and intangible assets acquired and liabilities assumed:
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 $
16.1million: (i) a medical office building located in Gilbert, Arizona (the “Val Vista Facility”); (ii) a medical office building located in Gilbert, Arizona (the “Dobson Facility”); (iii) a medical office suite located in Chandler, Arizona (the “Pecos I Facility”); and (iv) a medical office suite located in Chandler, Arizona (the “Pecos II Facility”). Upon the closing of the acquisition, the Company assumed the seller’s interest, as lessor, in the existing leases of: (v)
the Pecos I Facility to Chandler Endoscopy Center LLC with approximately seven years remaining in its initial term with two consecutive five-year extension options; and (vi) the Pecos II Facility to Valley Heart Associates, P.C, with approximately four years remaining on its initial term with one three-year extension option, and Valley Anesthesiology Consultants Inc. with approximately four years remaining on its initial term with two consecutive five-year extension options.Also upon the closing of the acquisition, the Company (i) leased the Dobson Facility to East Valley Gastroenterology & Hepatology Associates, P.C., (“EVGHA”); (ii) leased a portion of the Val Vista Facility to EVGHA; and (iii) leased another portion of the Val Vista Facility to Premier Endoscopy Center, LLC.
The Dobson Facility lease and the Val Vista Facility leases each have an initial term of 15 years with two consecutive five-year extension options.
Intangible Assets and Liabilities
The following is a summary of the carrying amount of intangible assets and liabilities as of the dates presented:
The following is a summary of the acquired lease intangible amortization:
As of March 31, 2019, scheduled future aggregate net amortization of the acquired lease intangible assets and liabilities for each fiscal year ended December 31 is listed below:
As of March 31, 2019 the weighted average amortization periods for asset lease intangibles and liability lease intangibles were 6.96 years and 8.53 years, respectively.
The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef