CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
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Statement of Financial Position [Abstract] | ||
Buildings and improvements, accumulated depreciation | $ 185,986 | $ 165,784 |
Acquired intangible assets, accumulated amortization | 80,049 | 71,067 |
Credit facility, deferred financing costs | 2,728 | 3,226 |
Acquired intangible liabilities, accumulated amortization | $ 5,177 | $ 4,444 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 510,000,000 | 510,000,000 |
Common stock, shares issued (in shares) | 239,848,129 | 238,226,119 |
Common stock, shares outstanding (in shares) | 225,240,223 | 224,179,939 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Thousands |
6 Months Ended | |
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Jun. 30, 2022 |
Jun. 30, 2021 |
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Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 44 | $ 212 |
Organization and Business Operations |
6 Months Ended |
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Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | Organization and Business Operations Sila Realty Trust, Inc., or the Company, is a Maryland corporation that was formed on January 11, 2013. The Company elected, and currently qualifies, to be taxed as a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, or the Code, for federal income tax purposes commencing with its taxable year ended December 31, 2014. Substantially all of the Company’s business is conducted through Sila Realty Operating Partnership, LP, a Delaware limited partnership, or the Operating Partnership, formed on January 10, 2013. The Company is the sole general partner of the Operating Partnership. The Company was formed to invest primarily in high quality income-producing commercial real estate, with a focus on data centers and healthcare properties, preferably with long-term leases to creditworthy tenants, as well as to make other real estate-related investments in such property types, which may include equity or debt interests in other real estate entities. During the second quarter of 2021, the Company's board of directors, or the Board, made a determination to sell the Company's data center properties. On May 19, 2021, the Company and certain of its wholly-owned subsidiaries entered into a purchase and sale agreement, or the PSA, for the sale of up to 29 data center properties owned by the Company, which constituted the entirety of the Company's data center segment. See Note 4—"Held for Sale and Discontinued Operations" for further discussion. The decision of the Board to sell the data center properties, as well as the execution of the PSA, represented a strategic shift that had a major effect on the Company's results and operations for the periods presented. As of December 31, 2021, the Company had no assets or liabilities related to the data center properties. The operations of the data center properties have been classified as income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2021. On July 22, 2021, the Company completed the sale of all 29 of its data centers, or the Data Center Sale, for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. Concurrently, the Board declared a special cash distribution of $1.75 per share of Class A, Class I, Class T and Class T2 shares of common stock. The special cash distribution was funded with the proceeds from the Data Center Sale. The special cash distribution was paid on July 30, 2021 to stockholders of record at the close of business on July 26, 2021, in the aggregate amount of approximately $392,685,000. During the six months ended June 30, 2022, the Company acquired five healthcare properties and sold one land parcel that formerly contained a healthcare property. See Note 3—"Acquisitions and Dispositions" for more information. As of June 30, 2022, the Company owned 130 real estate healthcare properties and two undeveloped land parcels, in two micropolitan statistical areas, or µSA, and 55 metropolitan statistical areas, or MSAs. The Company raised the equity capital for its real estate investments through two public offerings, or the Offerings, from May 2014 through November 2018, and the Company has offered shares pursuant to its distribution reinvestment plan, or the DRIP, pursuant to two Registration Statements on Form S-3, or each, a DRIP Offering and together the DRIP Offerings, since November 2017. Except as the context otherwise requires, the “Company” refers to Sila Realty Trust, Inc., the Operating Partnership and all wholly-owned subsidiaries.
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes thereto are the responsibility of management. These accounting policies conform to United States generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of a normal and recurring nature considered for a fair presentation, have been included. Operating results for the three and six months ended June 30, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The condensed consolidated balance sheet at December 31, 2021, has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2021, and related notes thereto set forth in the Company’s Annual Report on Form 10-K, filed with the SEC on March 29, 2022. Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the condensed consolidated financial statements and accompanying notes in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. Restricted Cash Restricted cash consists of restricted cash held in escrow, which includes cash held by escrow agents in escrow accounts for tenant and capital improvements in accordance with the respective tenants' lease agreement. Restricted cash attributable to continuing operations is reported in other assets, net, in the accompanying condensed consolidated balance sheets. See Note 8—"Other Assets, Net." The following table presents a reconciliation of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the totals shown in the condensed consolidated statements of cash flows (amounts in thousands):
(1)Of this amount, $13,499,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations. (2)Of this amount, $21,390,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations. Held for Sale and Discontinued Operations The Company classifies a real estate property as held for sale upon satisfaction of all of the following criteria: (i) management commits to a plan to sell a property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such properties; (iii) there is an active program to locate a buyer; (iv) the sale of the property is probable and transfer of the asset is expected to be completed within one year; (v) the property is being actively marketed for sale; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Upon the determination to classify a property as held for sale, the Company ceases depreciation and amortization on the real estate property held for sale, as well as the amortization of acquired in-place leases and right-of-use assets. The real estate property held for sale and associated liabilities are classified separately on the condensed consolidated balance sheets. Such properties are recorded at the lesser of the carrying value or estimated fair value less estimated costs to sell. As of December 31, 2021, the Company classified one land parcel that formerly contained a healthcare property as held for sale, or the 2021 Land Held for Sale. The Company recorded the 2021 Land Held for Sale at its carrying value at December 31, 2021. See Note 4—"Held for Sale and Discontinued Operations" for further discussion. On February 10, 2022, the Company sold the 2021 Land Held for Sale, for an aggregate sale price of $24,000,000, and generated net proceeds of approximately $22,701,000. See Note 3—"Acquisitions and Dispositions" for additional information. The Company classified assets and liabilities of the 29-property data center properties as discontinued operations for all the periods presented because they represented a strategic shift that had a major effect on the Company's results and operations. As of December 31, 2021, the Company had no assets or liabilities related to the data center properties. The operations of the data center properties are classified on the condensed consolidated statements of comprehensive income as income from discontinued operations for the three and six months ended June 30, 2021. On July 22, 2021, the Company completed the Data Center Sale, for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. See Note 3—"Acquisitions and Dispositions" for additional information. Impairment of Long-Lived Assets The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate assets may not be recoverable, the Company assesses the recoverability of the asset group by estimating whether the Company will recover the carrying value of the asset group through its undiscounted future cash flows and their eventual disposition. Based on this analysis, if the Company does not believe that it will be able to recover the carrying value of the asset group, the Company will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the asset group. When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental rates subsequent to the expiration of current lease arrangements, property operating expenses, terminal capitalization and discount rates, probability weighting of the potential re-lease of the property versus sales scenarios, sale prices of comparable properties, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in the future cash flow analysis could result in a different determination of the property’s future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate assets. In addition, the Company estimates the fair value of the assets by applying a market approach using comparable sales for certain properties. The use of alternative assumptions in the market approach analysis could result in a different determination of the property’s estimated fair value and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate assets. Impairment of Real Estate The Company determined that, during the three months ended March 31, 2022, real estate assets related to one healthcare property, or the First Quarter 2022 Impaired Property, were determined to be impaired. A healthcare tenant that occupies 90% of the property, leases its space for administrative use and has historically been using the space as its central business office. As a result of pandemic related events, the tenant permanently modified its business operations to accommodate a reduction in on-site staff, significantly reducing its need for administrative space going forward. The tenant has continued to pay its rent in accordance with the lease agreement, however indicated it would not expect to renew the lease upon expiration. The Company entered into a signed letter of intent with a prospective buyer that is a county-owned, tax-exempt entity, and requires ownership (vs. leasing) of the property to conduct its intended business operations at the property. In addition to the signed letter of intent with the prospective buyer, the Company signed a letter of intent with the tenant for the payment of an early lease termination fee. The early lease termination is effective only upon consummating a sale of the property to the prospective buyer. The inclusion of this potential sale scenario in the Company’s step one impairment analysis resulted in the expected future cash flows from the property falling below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $14,639,000, resulting in an impairment charge of $7,109,000. The Company had no real estate impairment during the three months ended June 30, 2022. During the three months ended March 31, 2021, real estate assets related to one healthcare property, or the First Quarter 2021 Impaired Property, were determined to be impaired. A tenant of the property that was experiencing financial difficulty vacated its space on June 19, 2020. During the fourth quarter of 2020, the Company entered into lease negotiations with a prospective tenant for the property, but the Company did not reach an agreement with the tenant. As such, the Company evaluated other strategic options, including a possible sale, and in April 2021, the Company received a letter of intent from a prospective buyer. The inclusion of a potential sale scenario in the Company’s step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $17,145,000, resulting in an impairment charge of $10,423,000. The property was subsequently sold in the fourth quarter of 2021. During the three months ended June 30, 2021, real estate assets related to one healthcare property, or the Second Quarter 2021 Impaired Property One, were determined to be impaired. The tenant of the property was experiencing financial difficulty and vacated the space in March 2021. Subsequently, during the second quarter, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property falling below its current carrying value. The Company utilized a market approach, using comparable properties, to estimate the fair value of the property. As a result, the carrying value of the property was reduced to its estimated fair value of $5,957,000, resulting in an impairment charge of $2,894,000. Additionally, during the three months ended June 30, 2021, real estate assets related to the 2021 Land Held for Sale, or the Second Quarter 2021 Impaired Property Two, were determined to be impaired. The last of the three tenants that occupied the building terminated its lease agreement and vacated the space on July 12, 2021. Subsequently, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated the fair value of $22,311,000, resulting in an impairment charge of $3,608,000. Impairment charges are recorded as impairment loss on real estate in the condensed consolidated statements of comprehensive income. During the three months ended June 30, 2021, the Company accelerated depreciation of equipment at the Second Quarter 2021 Impaired Property Two based on its anticipated sale. As a result, the Company accelerated the depreciation of the equipment in the amount of $296,000 in depreciation and amortization expense in the condensed consolidated statements of comprehensive income. Impairment of Acquired Intangible Assets and Acquired Intangible Liabilities During the three months ended June 30, 2022 and 2021, the Company did not record impairment of acquired intangible assets. During the six months ended June 30, 2022, the Company recognized an impairment of one in-place lease intangible asset, or the First Quarter 2022 Impaired In-Place Lease, in the amount of approximately $380,000, by accelerating the amortization of the acquired intangible asset related to a tenant of the First Quarter 2022 Impaired Property. During the six months ended June 30, 2021, the Company recognized an impairment of one in-place lease intangible asset, or the First Quarter 2021 Impaired In-Place Lease, in the amount of approximately $1,120,000, by accelerating the amortization of the acquired intangible asset related to one healthcare tenant of the Second Quarter 2021 Impaired Property One that was experiencing financial difficulties and vacated the property in March 2021. On April 5, 2021, the Company terminated its lease agreement and the tenant paid a lease termination fee of $400,000, which was recorded in rental revenue in the condensed consolidated statements of comprehensive income. During the three and six months ended June 30, 2022 and 2021, the Company did not record impairment of acquired intangible liabilities. Impairment of Goodwill Goodwill represents the excess of the amount paid over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and is allocated to an entity's reporting units. Goodwill has an indefinite life and is not amortized. On July 28, 2020, the Company and the Operating Partnership entered into a Membership Interest Purchase Agreement to provide for the internalization of the external management functions previously performed for the Company and the Operating Partnership by its former advisor and its affiliates, or the Internalization Transaction. On September 30, 2020, the Company closed the Internalization Transaction. On September 30, 2020, the Company recorded $39,529,000 of goodwill related to the transaction, of which $15,574,000 was allocated to the data center properties and written off as a result of the Data Center Sale on July 22, 2021. The remaining $23,955,000 of goodwill was allocated to the healthcare segment. The Company evaluates goodwill for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable, and at least annually. Unless circumstances otherwise dictate, the annual impairment test is performed as of the last day of each year. The Company evaluates potential triggering events that may affect the estimated fair value of the Company’s reporting units to assess whether any goodwill impairment exists. Deteriorating or adverse market conditions for certain reporting units may have a significant impact on the estimated fair value of these reporting units and could result in future impairments of goodwill. If the carrying value of a reporting unit exceeds its estimated fair value, then an impairment charge is recorded in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company has the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. Under a qualitative assessment, the impairment analysis for goodwill represents an evaluation of whether it is more-likely-than-not the reporting unit's fair value is less than its carrying value, including goodwill. If a qualitative analysis indicates that it is more-likely-than-not that the estimated carrying value of a reporting unit, including goodwill, exceeds its fair value, the Company performs the quantitative analysis as described below. During the three months ended March 31, 2022, the Company recognized $278,000 of goodwill impairment. Impairment loss on the First Quarter 2022 Impaired Property recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered an evaluation of the reporting unit's fair value for goodwill impairment. The Company's reporting unit represents each individual operating real estate property. The carrying value of long-lived assets within the reporting unit with indicators of impairment was first tested for recoverability and resulted in recognition of impairment during such period. As a result, the fair value of the reporting unit was determined to be lower than its carrying value, including goodwill. Therefore, the Company recognized an impairment loss on goodwill in the amount of $278,000 for the amount that the carrying value of the reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to the reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach. As of March 31, 2022, the Company did not have any goodwill associated with the reporting unit. The Company had no goodwill impairment during the three months ended June 30, 2022. During the three months ended March 31, 2021, the Company recognized $240,000 of goodwill impairment. Impairment loss on the First Quarter 2021 Impaired Property recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered an evaluation of the reporting unit's fair value for goodwill impairment. As a result, the fair value of the reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill in the amount of $240,000 for the amount that the carrying value of the reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to the reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach, using comparable sales to estimate the fair value. As of March 31, 2021, the Company did not have any goodwill associated with the reporting unit. During the three months ended June 30, 2021, the Company recognized $431,000 of goodwill impairment. Impairment losses on the Second Quarter 2021 Impaired Property One and Second Quarter 2021 Impaired Property Two recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered evaluation of each reporting unit's fair value for goodwill impairment. As a result, the fair value of each reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill for each of the two reporting units in the amounts of $112,000 and $319,000, respectively, for the amount that the carrying value of each reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to each reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of each reporting unit was determined based on a market approach model. As of June 30, 2021, the Company did not have any goodwill associated with these healthcare reporting units. The following table summarizes the rollforward of goodwill for the six months ended June 30, 2022 (amounts in thousands):
Revenue Recognition, Tenant Receivables and Allowance for Uncollectible Accounts The majority of the Company's revenue is derived from rental revenue, which is accounted for in accordance with ASC 842, Leases, or ASC 842. In accordance with ASC 842, rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). For lease arrangements when it is not probable that the Company will collect all or substantially all of the remaining lease payments under the term of the lease, rental revenue is limited to the lesser of the rental revenue that would be recognized on a straight-line basis or the lease payments that have been collected from the lessee. Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable. Tenant reimbursements, which are comprised of additional amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses, are recognized when the services are provided and the performance obligations are satisfied. The Company recognizes non-rental related revenue in accordance with Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers, or ASC 606. The Company has identified its revenue streams as rental income from leasing arrangements and tenant reimbursements, which are outside the scope of ASC 606. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Non-rental revenue, subject to ASC 606, is immaterial to the Company's condensed consolidated financial statements. On April 22, 2021, the Company entered into a settlement agreement with a data center property tenant that was experiencing financial difficulty due to deteriorating economic conditions driven by the impact of the COVID-19 pandemic and accelerating its modification of work strategy to a remote environment due to the pandemic. The tenant stopped paying rent in October 2020. Pursuant to the settlement agreement, the lease was terminated, effective immediately. The tenant surrendered the space on June 20, 2021. Additionally, in connection with the lease termination, the tenant paid the Company a $7,000,000 termination fee on April 23, 2021, which was recorded in income from discontinued operations in the accompanying condensed consolidated statements of comprehensive income during the second quarter of 2021. Concentration of Credit Risk and Significant Leases As of June 30, 2022, the Company had cash on deposit, including restricted cash, in certain financial institutions that had deposits in excess of current federally insured levels. The Company limits its cash investments to financial institutions with high credit standings; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. To date, the Company has not experienced a loss or lack of access to cash in its accounts. As of June 30, 2022, the Company owned real estate investments in two µSAs and 55 MSAs, one MSA of which accounted for greater than 10.0% of rental revenue from continuing operations for the six months ended June 30, 2022. Real estate investments located in the Houston-The Woodlands-Sugar Land, Texas MSA accounted for 11.1% of rental revenue from continuing operations for the six months ended June 30, 2022. As of June 30, 2022, the Company had one exposure to tenant concentration that accounted for greater than 10.0% of rental revenue from continuing operations for the six months ended June 30, 2022. The leases with tenants at healthcare properties under common control of Post Acute Medical, LLC and its affiliates accounted for 15.3% of rental revenue from continuing operations for the six months ended June 30, 2022. Share Repurchase Program The Company’s Amended and Restated Share Repurchase Program, or SRP, allows for repurchases of shares of the Company’s common stock upon meeting certain criteria. The SRP provides that all repurchases during any calendar year, including those redeemable upon death or a "Qualifying Disability" (as defined in the Company's SRP) of a stockholder, be limited to those that can be funded with equivalent proceeds raised from the DRIP during the prior calendar year and other operating funds, if any, as the Board, in its sole discretion, may reserve for this purpose. Repurchases of shares of the Company’s common stock are at the sole discretion of the Board, provided, however, that the Company limits the number of shares repurchased during any calendar year to 5.0% of the total number of shares of common stock outstanding as of December 31st of the previous calendar year. The SRP is subject to terms and limitations, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation and DRIP funding limitations and any amendments to the plan, as more fully described below. In addition, the Board, in its sole discretion, may suspend (in whole or in part) the SRP at any time, and may amend, reduce, terminate or otherwise change the SRP upon 30 days' prior notice to the Company’s stockholders for any reason it deems appropriate. The Company will currently only repurchase shares due to death and involuntary exigent circumstances in accordance with the SRP, subject in each case to the terms and limitations of the SRP, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation, and DRIP funding limitations. Under the SRP, the Company may waive certain of the terms and requirements of the SRP in the event of the death of a stockholder who is a natural person, including shares held through an Individual Retirement Account or other retirement or profit-sharing plan, and certain trusts meeting the requirements of the SRP. The Company may also waive certain of the terms and requirements of the SRP in the event of an involuntary exigent circumstance, as determined by the Company or any of the executive officers thereof, in its or their sole discretion. See Part II, Item 2. "Unregistered Sales of Equity Securities" for more information on the Company's SRP. During the six months ended June 30, 2022, the Company repurchased 561,725 Class A shares, Class I shares and Class T shares of common stock (476,551 Class A shares, 20,611 Class I shares and 64,563 Class T shares), for an aggregate purchase price of approximately $4,606,000 (an average of $8.20 per share). During the six months ended June 30, 2021, the Company repurchased 469,334 Class A shares, Class I shares and Class T shares of common stock (443,434 Class A shares, 2,504 Class I shares and 23,396 Class T shares), for an aggregate purchase price of approximately $4,078,000 (an average of $8.69 per share). Stock-based Compensation On March 6, 2020, the Board approved the Amended and Restated 2014 Restricted Share Plan, or the A&R Incentive Plan, pursuant to which the Company has the authority and power to grant awards of restricted shares of its Class A common stock to its directors, officers and employees. The Company accounts for its stock awards in accordance with ASC 718-10, Compensation—Stock Compensation. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). For performance-based awards, compensation costs are recognized over the service period if it is probable that the performance condition will be satisfied, with changes of the assessment at each reporting period and recording the effect of the change in the compensation cost as a cumulative catch-up adjustment. The compensation costs for restricted stock are recognized based on the fair value of the restricted stock awards at grant date less forfeitures (if applicable). Forfeitures are accounted for as they occur. On January 3, 2022, the Company granted time-based awards to its executive officers, consisting of 217,988 in restricted shares of Class A common stock, or the Time-Based 2022 Awards. The Time-Based 2022 Awards will vest ratably over four years following the grant date, subject to each executive's employment through the applicable vesting dates, with certain exceptions. In addition, on January 3, 2022, the Company's compensation committee approved performance-based deferred stock unit awards, or Performance DSUs, to be granted for performance-based awards, or the Performance-Based 2022 Awards. The Performance-Based 2022 Awards will be measured based on Company performance over a three-year performance period ending on December 31, 2024. The Performance-Based 2022 Awards vest after the last day of the performance period and are subject to continued employment through the applicable vesting date. The Time-Based 2022 Awards and the Performance-Based 2022 Awards, or collectively, the 2022 Awards, were granted under and are subject to the terms of the A&R Incentive Plan and award agreements. Stock-based compensation expense for the 2022 Awards for the three and six months ended June 30, 2022, was approximately $343,000 and $604,000, respectively, which is reported in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income. The Company recognized accelerated stock-based compensation expense of $326,000 during the three and six months ended June 30, 2022, of which $92,000 related to the 2022 Awards, due to the termination of its former chief accounting officer on May 12, 2022. The Company recognized total stock-based compensation expense of approximately $1,278,000 and $563,000, respectively, for the three months ended June 30, 2022 and 2021, and $2,174,000 and $1,119,000, respectively, for the six months ended June 30, 2022 and 2021, which is reported in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income. Earnings Per Share The Company calculates basic earnings per share by dividing net income attributable to common stockholders for the period by the weighted average shares of its common stock outstanding for that period. Diluted earnings per share is computed based on the weighted average number of shares outstanding and all potentially dilutive securities. Shares of non-vested restricted common stock and Performance DSUs give rise to potentially dilutive shares of common stock. For the three and six months ended June 30, 2022, diluted earnings per share reflected the effect of approximately 1,355,000 and 1,360,000, respectively, of non-vested shares of restricted common stock and Performance DSUs that were outstanding. For the three and six months ended June 30, 2021, diluted earnings per share was computed the same as basic earnings per share, because the Company recorded a loss from continuing operations, which would make potentially dilutive shares of 964,000 and 952,000, respectively, related to non-vested shares of restricted common stock and Performance DSUs, anti-dilutive. Reportable Segments ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an entity’s reportable segments. As of June 30, 2022 and December 31, 2021, 100% of the Company's consolidated revenues from continuing operations were generated from real estate investments in healthcare properties. The Company’s chief operating decision maker evaluates operating performance of healthcare properties on an individual property level, which are aggregated into one reportable segment due to their similar economic characteristics. Derivative Instruments and Hedging Activities As required by ASC 815, Derivatives and Hedging, or ASC 815, the Company records all derivative instruments at fair value as assets and liabilities on its condensed consolidated balance sheets. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. In accordance with the fair value measurement guidance Accounting Standards Update, or ASU, 2011-04, Fair Value Measurement, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. The Company is exposed to variability in expected future cash flows that are attributable to interest rate changes in the normal course of business. The Company’s primary strategy in entering into derivative contracts is to add stability to future cash flows by managing its exposure to interest rate movements. The Company utilizes derivative instruments, including interest rate swaps, to effectively convert some of its variable rate debt to fixed rate debt. The Company does not enter into derivative instruments for speculative purposes. In accordance with ASC 815, the Company designates interest rate swap contracts as cash flow hedges of floating-rate borrowings. For derivative instruments that are designated and qualify as cash flow hedges, the gains or losses on the derivative instruments are reported as a component of other comprehensive income in the condensed consolidated statements of comprehensive income and are reclassified into earnings in the same line item associated with the forecasted transaction in the same period during which the hedged transactions affect earnings. See additional discussion in Note 12—"Derivative Instruments and Hedging Activities."
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Acquisitions and Dispositions |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Dispositions | Acquisitions and Dispositions 2022 Real Estate Property Acquisition During the six months ended June 30, 2022, the Company purchased five real estate properties, or the 2022 Acquisitions, which were determined to be asset acquisitions. Upon the completion of the 2022 Acquisitions, the Company allocated the purchase price to acquired tangible assets, consisting of land, building and improvements and tenant improvements, and acquired intangible assets, consisting of in-place leases and above-market leases, and acquired intangible liabilities, consisting of below-market leases, based on the relative fair value method of allocating all accumulated costs. The following table summarizes the consideration transferred for the 2022 Acquisitions during the six months ended June 30, 2022:
(1) The Prosser Healthcare Facilities consist of three healthcare properties. The following table summarizes the Company's purchase price allocation of the 2022 Acquisitions during the six months ended June 30, 2022 (amounts in thousands):
Acquisition costs associated with transactions determined to be asset acquisitions are capitalized. The Company capitalized acquisition costs of approximately $454,000 related to the 2022 Acquisitions, which are included in the Company's allocation of the real estate acquisitions presented above. The total amount of all acquisition costs is limited to 6.0% of the contract purchase price of a property, unless the Board determines a higher transaction fee to be commercially competitive, fair and reasonable to the Company. The contract purchase price is the amount actually paid or allocated in respect of the purchase, development, construction or improvement of a property exclusive of acquisition costs. During the six months ended June 30, 2022, acquisition costs did not exceed 6.0% of the contract purchase price of the 2022 Acquisitions during such period. 2022 Real Estate Property Disposition The Company sold one land parcel that formerly contained a healthcare property, or the 2022 Disposition, during the six months ended June 30, 2022, for an aggregate sale price of $24,000,000 and generated net proceeds of $22,701,000. For the six months ended June 30, 2022, the Company recognized an aggregate gain on sale of $460,000 in gain on real estate disposition in the condensed consolidated statements of comprehensive income. The following table summarizes the 2022 Disposition:
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Held for Sale and Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Held for Sale and Discontinued Operations | Held for Sale and Discontinued Operations As of December 31, 2021, the Company had no assets or liabilities related to the data center properties. The operations of the data center properties have been classified as income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2021. On August 30, 2021, the Company entered into a purchase and sale agreement for the sale of the 2021 Land Held for Sale. The purchase and sale agreement required that the structures on the healthcare property be demolished prior to the sale. The structures on the property were demolished and the property consisted solely of land as of December 31, 2021. The Company classified the land as held for sale as of December 31, 2021, because the land met the held for sale criteria as outlined in Note 2—"Summary of Significant Accounting Policies -Held for Sale and Discontinued Operations." The Company sold the 2021 Land Held for Sale on February 10, 2022. See Note 3—"Acquisitions and Dispositions" for additional information. The following table presents the major classes of assets and liabilities of the 2021 Land Held for Sale, classified as assets and liabilities held for sale, net, presented separately in the condensed consolidated balance sheet as of December 31, 2021 (amounts in thousands):
The operations reflected in income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2021, were as follows (amounts in thousands):
(1) Interest expense attributable to discontinued operations for the three and six months ended June 30, 2021 was $3,402,000 and $6,771,000, respectively, which related to notes payable on certain data center properties. On July 22, 2021, in connection with the Data Center Sale, the Company paid off all data center and healthcare related notes payable, with an outstanding principal balance of $450,806,000 at the time of repayment. Capital expenditures on a cash basis for the six months ended June 30, 2021, were $2,017,000, related to properties classified within discontinued operations. The Company had no discontinued operations for the six months ended June 30, 2022 and therefore had no significant non-cash operating or investing activities for the properties classified within discontinued operations. There were no significant non-cash operating or investing activities for the properties classified within discontinued operations for the six months ended June 30, 2021.
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Acquired Intangible Assets, Net |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Intangible Assets, Net | Acquired Intangible Assets, Net Acquired intangible assets, net, consisted of the following as of June 30, 2022 and December 31, 2021 (amounts in thousands, except weighted average remaining life amounts):
The aggregate weighted average remaining life of the acquired intangible assets was 9.1 years and 9.5 years as of June 30, 2022 and December 31, 2021, respectively. Amortization of the acquired intangible assets was $5,676,000 and $5,499,000 for the three months ended June 30, 2022 and 2021, respectively, and $11,718,000 and $12,117,000 for the six months ended June 30, 2022 and 2021, respectively. Of the $11,718,000 recorded for the six months ended June 30, 2022, $380,000 was attributable to accelerated amortization due to the First Quarter 2022 Impaired In-Place Lease. Of the $12,117,000 recorded for the six months ended June 30, 2021, $1,120,000 was attributable to accelerated amortization due to the First Quarter 2021 Impaired In-Place Lease. Amortization of the in-place leases is included in depreciation and amortization, and amortization of above-market leases is recorded as an adjustment to rental revenue in the accompanying condensed consolidated statements of comprehensive income.
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Acquired Intangible Liabilities, Net |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||
Intangible Lease Liabilities, Net [Abstract] | |||||||||||||||||||||||||||||||||||||
Acquired Intangible Liabilities, Net | Acquired Intangible Liabilities, Net Acquired intangible liabilities, net, consisted of the following as of June 30, 2022 and December 31, 2021 (amounts in thousands, except weighted average remaining life amounts):
Amortization of the below-market leases was $369,000 and $333,000 for the three months ended June 30, 2022 and 2021, respectively, and $733,000 and $641,000 for the six months ended June 30, 2022 and 2021, respectively. Amortization of below-market leases is recorded as an adjustment to rental revenue in the accompanying condensed consolidated statements of comprehensive income.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Lessor Rental Revenue The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases have provisions to extend the terms of the lease agreements. The Company retains substantially all of the risks and benefits of ownership of the real estate properties leased to tenants. Future rent to be received from the Company's investments in real estate assets under the terms of non-cancellable operating leases in effect as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
Lessee The Company is subject to various non-cancellable operating and finance lease agreements, inclusive of 16 ground operating leases, one corporate-related operating lease, one ground finance lease and one office operating lease related to the Company’s principal executive office in Tampa, Florida, or the Corporate Office Lease. Of the 16 ground operating leases, four do not have corresponding operating lease liabilities, because the Company did not have future payment obligations at the acquisition of these leases. The Company has one non-cancellable lease agreement that is classified as a finance lease, as defined in ASC 842, Leases, related to a ground lease of a healthcare property. Ground lease expenses for finance lease payments are recognized as amortization expense of the right-of-use asset - finance lease and interest expense on the finance lease liability over the lease term. The Company's operating leases and the finance lease do not provide an implicit interest rate. In order to calculate the present value of the remaining operating and finance lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, the Company's credit rating and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying operating or finance leases. On January 22, 2022, the Company's rent obligation for its new principal executive office in Tampa, Florida commenced. Pursuant to the office operating lease agreement, the aggregate present value of future rent payments is $3,440,000, which was recorded in right-of-use assets - operating leases on the condensed consolidated balance sheets. On March 1, 2022, the Company's rent commenced on a ground operating lease agreement for a development property that was placed in service during the three months ended March 31, 2022, for an aggregate present value of future rent payments of $309,000, which was recorded in right-of-use assets - operating leases on the condensed consolidated balance sheets. As of June 30, 2022, the Company's IBRs for its operating leases were between 2.5% and 6.4%, with a weighted average IBR of 5.1%. The weighted average remaining lease term for the Company's operating leases attributable to continuing operations was 33.9 years and 36.1 years as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, the Company's IBR for its finance lease was 5.3%. The remaining lease term for the Company's finance lease was 41.9 years and 42.4 years as of June 30, 2022 and December 31, 2021, respectively. The future rent payments, discounted by the Company's IBRs, under non-cancellable leases in effect as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
The following table provides details of the Company's total lease costs and reimbursements for the three and six months ended June 30, 2022 and 2021 (amounts in thousands):
(1)The Company is reimbursed by tenants who sublease the ground leases. (2)Amounts relate to lease costs and reimbursements attributable to two operating ground leases related to data center properties disposed of in the Data Center Sale on July 22, 2021.
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Leases | Leases Lessor Rental Revenue The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases have provisions to extend the terms of the lease agreements. The Company retains substantially all of the risks and benefits of ownership of the real estate properties leased to tenants. Future rent to be received from the Company's investments in real estate assets under the terms of non-cancellable operating leases in effect as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
Lessee The Company is subject to various non-cancellable operating and finance lease agreements, inclusive of 16 ground operating leases, one corporate-related operating lease, one ground finance lease and one office operating lease related to the Company’s principal executive office in Tampa, Florida, or the Corporate Office Lease. Of the 16 ground operating leases, four do not have corresponding operating lease liabilities, because the Company did not have future payment obligations at the acquisition of these leases. The Company has one non-cancellable lease agreement that is classified as a finance lease, as defined in ASC 842, Leases, related to a ground lease of a healthcare property. Ground lease expenses for finance lease payments are recognized as amortization expense of the right-of-use asset - finance lease and interest expense on the finance lease liability over the lease term. The Company's operating leases and the finance lease do not provide an implicit interest rate. In order to calculate the present value of the remaining operating and finance lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, the Company's credit rating and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying operating or finance leases. On January 22, 2022, the Company's rent obligation for its new principal executive office in Tampa, Florida commenced. Pursuant to the office operating lease agreement, the aggregate present value of future rent payments is $3,440,000, which was recorded in right-of-use assets - operating leases on the condensed consolidated balance sheets. On March 1, 2022, the Company's rent commenced on a ground operating lease agreement for a development property that was placed in service during the three months ended March 31, 2022, for an aggregate present value of future rent payments of $309,000, which was recorded in right-of-use assets - operating leases on the condensed consolidated balance sheets. As of June 30, 2022, the Company's IBRs for its operating leases were between 2.5% and 6.4%, with a weighted average IBR of 5.1%. The weighted average remaining lease term for the Company's operating leases attributable to continuing operations was 33.9 years and 36.1 years as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, the Company's IBR for its finance lease was 5.3%. The remaining lease term for the Company's finance lease was 41.9 years and 42.4 years as of June 30, 2022 and December 31, 2021, respectively. The future rent payments, discounted by the Company's IBRs, under non-cancellable leases in effect as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
The following table provides details of the Company's total lease costs and reimbursements for the three and six months ended June 30, 2022 and 2021 (amounts in thousands):
(1)The Company is reimbursed by tenants who sublease the ground leases. (2)Amounts relate to lease costs and reimbursements attributable to two operating ground leases related to data center properties disposed of in the Data Center Sale on July 22, 2021.
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Leases | Leases Lessor Rental Revenue The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases have provisions to extend the terms of the lease agreements. The Company retains substantially all of the risks and benefits of ownership of the real estate properties leased to tenants. Future rent to be received from the Company's investments in real estate assets under the terms of non-cancellable operating leases in effect as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
Lessee The Company is subject to various non-cancellable operating and finance lease agreements, inclusive of 16 ground operating leases, one corporate-related operating lease, one ground finance lease and one office operating lease related to the Company’s principal executive office in Tampa, Florida, or the Corporate Office Lease. Of the 16 ground operating leases, four do not have corresponding operating lease liabilities, because the Company did not have future payment obligations at the acquisition of these leases. The Company has one non-cancellable lease agreement that is classified as a finance lease, as defined in ASC 842, Leases, related to a ground lease of a healthcare property. Ground lease expenses for finance lease payments are recognized as amortization expense of the right-of-use asset - finance lease and interest expense on the finance lease liability over the lease term. The Company's operating leases and the finance lease do not provide an implicit interest rate. In order to calculate the present value of the remaining operating and finance lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, the Company's credit rating and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying operating or finance leases. On January 22, 2022, the Company's rent obligation for its new principal executive office in Tampa, Florida commenced. Pursuant to the office operating lease agreement, the aggregate present value of future rent payments is $3,440,000, which was recorded in right-of-use assets - operating leases on the condensed consolidated balance sheets. On March 1, 2022, the Company's rent commenced on a ground operating lease agreement for a development property that was placed in service during the three months ended March 31, 2022, for an aggregate present value of future rent payments of $309,000, which was recorded in right-of-use assets - operating leases on the condensed consolidated balance sheets. As of June 30, 2022, the Company's IBRs for its operating leases were between 2.5% and 6.4%, with a weighted average IBR of 5.1%. The weighted average remaining lease term for the Company's operating leases attributable to continuing operations was 33.9 years and 36.1 years as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, the Company's IBR for its finance lease was 5.3%. The remaining lease term for the Company's finance lease was 41.9 years and 42.4 years as of June 30, 2022 and December 31, 2021, respectively. The future rent payments, discounted by the Company's IBRs, under non-cancellable leases in effect as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
The following table provides details of the Company's total lease costs and reimbursements for the three and six months ended June 30, 2022 and 2021 (amounts in thousands):
(1)The Company is reimbursed by tenants who sublease the ground leases. (2)Amounts relate to lease costs and reimbursements attributable to two operating ground leases related to data center properties disposed of in the Data Center Sale on July 22, 2021.
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Other Assets, Net |
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Other Assets, Net | Other Assets, Net Other assets, net, consisted of the following as of June 30, 2022 and other assets, net, excluding assets held for sale, net, consisted of the following as of December 31, 2021 (amounts in thousands):
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Accounts Payable and Other Liabilities |
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Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Accounts payable and other liabilities consisted of the following as of June 30, 2022 and accounts payable and other liabilities, excluding liabilities held for sale, net, consisted of the following as of December 31, 2021 (amounts in thousands):
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Credit Facility |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Facility | Credit Facility The Company's outstanding credit facility as of June 30, 2022 and December 31, 2021 consisted of the following (amounts in thousands):
Significant activities regarding the credit facility during the six months ended June 30, 2022, and subsequent, include: •On February 15, 2022, the Company, the Operating Partnership and certain of the Company's subsidiaries, entered into a senior unsecured revolving credit agreement, or the Revolving Credit Agreement, with Truist Bank, as Administrative Agent for the lenders, for aggregate commitments available of up to $500,000,000, which may be increased, subject to lender approval, through incremental term loans and/or revolving loan commitments in an aggregate amount not to exceed $1,000,000,000. The maturity date for the Revolving Credit Agreement is February 15, 2026, which, at the Company's election, may be extended for a period of six-months on no more than two occasions, subject to certain conditions, including the payment of an extension fee. The Revolving Credit Agreement was entered into to replace the Company's prior $500,000,000 revolving line of credit, which had a maturity date of April 27, 2022, with the option to extend for one twelve-month period. The Company did not exercise the option to extend. Upon closing of the Revolving Credit Agreement, the Company extinguished all commitments associated with the prior revolving line of credit. Simultaneously with the Revolving Credit Agreement’s execution, on February 15, 2022, the Company, the Operating Partnership, and certain of the Company's subsidiaries, entered into the senior unsecured term loan agreement, or the 2024 Term Loan Agreement, with Truist Bank, as Administrative Agent for the lenders. The 2024 Term Loan Agreement was fully funded at closing, and is made up of aggregate commitments of $300,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $600,000,000. The 2024 Term Loan Agreement has a maturity date of December 31, 2024, and, at the Company's election, may be extended for a period of six-months on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee. The 2024 Term Loan Agreement was entered into to replace the Company's prior term loan, which was paid off in its entirety upon closing of the Revolving Credit Agreement and the 2024 Term Loan Agreement. •In connection with the repayment of our prior credit facility, the Company recognized a loss on extinguishment of debt of $3,367,000 during the three months ended March 31, 2022, which included loan costs in the amount of $4,000 and accelerated unamortized debt issuance costs of $3,363,000. The loss on extinguishment of debt was recognized in interest and other expense, net, in the accompanying condensed consolidated statements of comprehensive income. •On February 28, 2022, the Company repaid $30,000,000 on its Revolving Credit Agreement primarily with proceeds from the 2022 Disposition. •On March 10, 2022, the Company drew $15,000,000 on its Revolving Credit Agreement related to the 2022 Acquisitions. •On April 8, 2022, the Company entered into five interest rate swap agreements, two of which have an effective date of May 2, 2022 and an aggregate notional amount of $85,000,000, and three of which have an effective date of May 1, 2023 and an aggregate notional amount of $150,000,000. •On May 12, 2022, the Company drew $20,000,000 on its Revolving Credit Agreement related to the 2022 Acquisitions. •On May 17, 2022, the Company, the Operating Partnership and certain of the Company’s subsidiaries, entered into a new senior unsecured term loan agreement, or the 2028 Term Loan Agreement, with Truist Bank, as Administrative Agent for the lenders, for aggregate commitments of up to $275,000,000, of which $205,000,000 was drawn at closing to pay down the Company’s Revolving Credit Agreement in its entirety. The remainder of the commitments were available for three months following the closing date, or the Availability Period, and were available in no more than three subsequent draws with a minimum of $20,000,000 per draw, or the remaining commitments available. After the Availability Period, the undrawn portion was no longer available. If the committed amount was not fully drawn within 60 days of closing, the Company was required to pay a fee to the lenders, calculated as 0.25% per annum on the average daily amount of the undrawn portion, payable quarterly in arrears, until the earlier of (i) the date when the commitments have been funded in full, or (ii) August 17, 2022. The 2028 Term Loan Agreement may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000 and has a maturity date of January 31, 2028. The 2028 Term Loan Agreement is pari passu with the Company’s Revolving Credit Agreement and 2024 Term Loan Agreement. The Company refers to the 2028 Term Loan Agreement, the Revolving Credit Agreement and the 2024 Term Loan Agreement, collectively, as the “Unsecured Credit Facility,” which has aggregate commitments available of $1,075,000,000. At the Company’s election, loans under the Unsecured Credit Facility may be made as Base Rate Loans or Secured Overnight Financing Rate, or SOFR, Loans. The applicable margin for loans that are Base Rate Loans is adjustable based on a total leverage ratio, ranging from 0.25% to 0.90%. The applicable margin for loans that are SOFR Loans is adjustable based on a total leverage ratio, ranging from 1.25% to 1.90%. In addition to interest, the Company is required to pay a fee on the unused portion of the lenders’ commitments under the Revolving Credit Agreement at a rate per annum equal to 0.20% if the average daily amount outstanding under the Revolving Credit Agreement is less than 50% of the aggregate commitments, or 0.15% if the average daily amount outstanding under the Revolving Credit Agreement is equal to or greater than 50% of the aggregate commitments. The unused fee is payable quarterly in arrears. •On July 12, 2022 and July 20, 2022, the Company drew $50,000,000 and $20,000,000, respectively, on the 2028 Term Loan Agreement, to fund two acquisitions in July 2022. See Note 15—"Subsequent Events" for additional information. As of July 20, 2022, the 2028 Term Loan Agreement commitments were fully funded. The principal payments due on the Unsecured Credit Facility as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
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Fair Value |
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Fair Value | Fair Value Credit facility—The estimated fair value of the credit facility (Level 2) was approximately $474,402,000 and $492,360,000 as of June 30, 2022 and December 31, 2021, respectively, as compared to the outstanding principal of $505,000,000 and $500,000,000 as of June 30, 2022 and December 31, 2021, respectively. The fair value of the Company's credit facility is estimated based on the interest rates currently offered to the Company by its financial institutions. Derivative instruments—Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amount the Company could realize, or be liable for, on disposition of the financial instruments. The Company determined that the majority of the inputs used to value its interest rate swaps fall within Level 2 of the fair value hierarchy. The credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the respective counterparty. However, as of June 30, 2022, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy. See Note 12—"Derivative Instruments and Hedging Activities" for further discussion of the Company's derivative instruments. The following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (amounts in thousands):
Derivative assets and liabilities are reported in the condensed consolidated balance sheets as other assets, net, and accounts payable and other liabilities, respectively. Real estate assets—As discussed in Note 2—"Summary of Significant Accounting Policies," during the first quarter of 2022, real estate assets related to the First Quarter 2022 Impaired Property were determined to be impaired. The carrying value of the property was reduced to its estimated fair value of $14,639,000, resulting in an impairment charge of $7,109,000. The fair value of the First Quarter 2022 Impaired Property was determined based on a market approach model using a signed letter of intent to estimate the fair value and classified within Level 2 of the fair value hierarchy. During the first quarter of 2021, real estate assets related to the First Quarter 2021 Impaired Property were determined to be impaired. The carrying value of the property was reduced to its estimated fair value of $17,145,000, resulting in an impairment charge of $10,423,000. The property was subsequently sold in the fourth quarter of 2021. During the second quarter of 2021, real estate assets related to the Second Quarter 2021 Impaired Property One were determined to be impaired. The tenant of the property was experiencing financial difficulty and vacated the space in March 2021. Subsequently, during the second quarter the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property falling below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $5,957,000, resulting in an impairment charge of $2,894,000. Additionally, during the second quarter of 2021, real estate assets related to Second Quarter 2021 Impaired Property Two were determined to be impaired. The last of the three tenants that occupied the building terminated its lease agreement and vacated the space on July 12, 2021. Subsequently, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $22,311,000, resulting in an impairment charge of $3,608,000. The fair value of the First Quarter 2021 Impaired Property, Second Quarter 2021 Impaired Property One and Second Quarter 2021 Impaired Property Two were determined based on a market approach model using comparable properties adjusted for differences in characteristics to estimate the fair value and classified within Level 2 of the fair value hierarchy. Impairment charges are recorded as impairment loss on real estate in the condensed consolidated statements of comprehensive income. The following table shows the fair value of the Company's real estate assets measured at fair value on a non-recurring basis as of March 31, 2022 (amounts in thousands):
Goodwill—As discussed in Note 2—"Summary of Significant Accounting Policies," during the first quarter of 2022, the Company recorded $278,000 of goodwill impairment related to the First Quarter 2022 Impaired Property. Impairment loss on goodwill represented the carrying value of the reporting unit, including goodwill, that exceeded its fair value, limited to the total amount of goodwill allocated to that reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach. The Company determined that its valuation using a market approach model was classified within Level 2 of the fair value hierarchy. As of March 31, 2022, the Company did not have any goodwill associated with this healthcare reporting unit. During the first quarter of 2021, the Company recorded $240,000 of goodwill impairment related to the First Quarter 2021 Impaired Property. Impairment loss on goodwill represented the carrying value of the reporting unit, including goodwill, that exceeded its fair value, limited to the total amount of goodwill allocated to that reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach, using comparable sales. The Company determined that its valuation using a market approach model was classified within Level 2 of the fair value hierarchy. As of March 31, 2021, the Company did not have any goodwill associated with this healthcare reporting unit. During the second quarter of 2021, the Company recorded an aggregate amount of $431,000 of goodwill impairment related to the Second Quarter 2021 Impaired Property One and the Second Quarter 2021 Impaired Property Two. Impairment loss on goodwill represented the carrying value of each reporting unit, including goodwill, that exceeded its fair value, limited to the total amount of goodwill allocated to each reporting unit and is recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of each reporting unit was determined based on a market approach model. The Company determined that its valuation using a market approach model is classified within Level 2 of the fair value hierarchy. As of June 30, 2021, the Company did not have any goodwill associated with these healthcare reporting units.
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Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the agreements without exchange of the underlying notional amount. Changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in accumulated other comprehensive income (loss) in the accompanying condensed consolidated statements of stockholders' equity and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. In connection with the Data Center Sale on July 22, 2021, the Company terminated eight interest rate swap agreements related to mortgage notes fixed through interest rate swaps. Prior to the termination of the eight interest rate swaps, the Company de-designated and then formally re-designated these hedged transactions. During the three and six months ended June 30, 2022, as the hedged forecasted transactions affected earnings, the Company reclassified approximately $357,000 and $995,000, respectively, from accumulated other comprehensive income (loss) to interest and other expense, net, related to the swap terminations, in the accompanying condensed consolidated statements of comprehensive income. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest and other expense, net, as interest payments are made on the Company’s variable rate debt. During the next twelve months, the Company estimates that an additional $6,055,000 will be reclassified from accumulated other comprehensive income (loss) as an increase to earnings. See Note 11—"Fair Value" for further discussion of the fair value of the Company’s derivative instruments. The following table summarizes the notional amount and fair value of the Company’s derivative instruments (amounts in thousands):
(1) Derivative assets and liabilities are reported in the condensed consolidated balance sheets as other assets, net, and accounts payable and other liabilities, respectively. (2) On April 8, 2022, the Company entered into three interest rate swap agreements with an aggregate notional amount of $150,000,000, that have an effective date of May 1, 2023, to replace two interest rate swaps with an aggregate notional amount of $150,000,000 that have a maturity date of April 27, 2023. (3) In May 2022, the Company entered into bilateral agreements with its swap counterparties to transition all of its interest rate swap agreements to SOFR. As of June 30, 2022, all of the Company's interest rate swap agreements were indexed to SOFR. The notional amount under the agreements is an indication of the extent of the Company’s involvement in each instrument at the time, but does not represent exposure to credit, interest rate or market risks. Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company designated the interest rate swaps as cash flow hedges to hedge the variability of the anticipated cash flows on its variable rate credit facility. The change in fair value of the derivative instruments that are designated as hedges are recorded in other comprehensive income in the accompanying condensed consolidated statements of comprehensive income. The table below summarizes the amount of income and losses recognized on the interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2022 and 2021 (amounts in thousands):
Credit Risk-Related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. The Company records credit risk valuation adjustments on its interest rate swaps based on the respective credit quality of the Company and the counterparty. The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties. As of June 30, 2022, the fair value of derivatives in a net liability position was $16,000, inclusive of accrued interest but excluding any adjustment for nonperformance risk related to the agreement. As of June 30, 2022, there were no termination events or events of default related to the interest rate swaps. Tabular Disclosure Offsetting Derivatives The Company has elected not to offset derivative positions in its condensed consolidated financial statements. The following tables present the effect on the Company’s financial position had the Company made the election to offset its derivative positions as of June 30, 2022 and December 31, 2021 (amounts in thousands):
The Company reports derivative assets and liabilities in the condensed consolidated balance sheets as other assets, net, and accounts payable and other liabilities, respectively.
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table presents a rollforward of amounts recognized in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2022 and 2021 (amounts in thousands):
The following table presents reclassifications out of accumulated other comprehensive income (loss) for the six months ended June 30, 2022 and 2021 (amounts in thousands):
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings In the ordinary course of business, the Company may become subject to litigation or claims. As of June 30, 2022, there were, and currently there are, no material pending legal proceedings to which the Company is a party. While the resolution of a lawsuit or proceeding may have an impact to the Company's financial results for the period in which it is resolved, the Company believes that the final resolution of the lawsuits or proceedings in which it is currently involved, either individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations or liquidity. Contingent Consideration During the fourth quarter of 2020, the Company acquired a development property subject to an earnout provision, obligating the Company to pay additional consideration to the developer contingent upon the future leasing and occupancy of vacant space at the property. The developer will have 18 months from completion of the development property to earn the additional consideration. During the 18-month earnout agreement, the developer will be responsible for the pro-rata share of operating expenses associated with the unoccupied space. As of June 30, 2022, the Company recorded a contingent consideration accrual related to the earnout provision in the amount of $1,160,000, which is reported in accounts payable and other liabilities in the accompanying condensed consolidated balance sheets. The Company used a probability-weighted future cash flows approach to estimate contingent consideration. Changes in assumptions could have an impact on the payout of contingent consideration with a maximum payout of $1,701,000 in cash and a minimum payout of $742,000. During the three months ended June 30, 2022, the contingent consideration accrual decreased by $373,000, due to the developer completing the buildout and the tenant taking occupancy of a unit at the property. The amount accrued was capitalized to building and improvements in the accompanying condensed consolidated balance sheets, as the original purchase was accounted for as an asset acquisition.
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Subsequent Events |
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Subsequent Events [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Events | Subsequent Events Distributions Paid to Stockholders The following table summarizes the Company's distributions paid to stockholders on July 8, 2022, for the period from June 1, 2022 through June 30, 2022 (amounts in thousands):
The following table summarizes the Company's distributions paid to stockholders on August 4, 2022, for the period from July 1, 2022 through July 31, 2022 (amounts in thousands):
Distributions Authorized The following tables summarize the daily distributions approved and authorized by the Board subsequent to June 30, 2022:
(1)Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on August 1, 2022 and ending on August 31, 2022. The distributions are calculated based on 365 days in the calendar year. The distributions declared for each record date in August 2022 will be paid in September 2022. The distributions are payable to stockholders from legally available funds therefor. (2)Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on September 1, 2022 and ending on September 30, 2022. The distributions will be calculated based on 365 days in the calendar year. The distributions declared for each record date in September 2022 will be paid in October 2022. The distributions will be payable to stockholders from legally available funds therefor. Subsequent Acquisitions The following table summarizes the property acquired subsequent to June 30, 2022 and through August 9, 2022:
(1)The property is leased to a single tenant. (2)The Company drew $105,000,000 on the Unsecured Credit Facility to fund the acquisitions.
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Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
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Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements and accompanying notes in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates.
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Restricted Cash | Restricted CashRestricted cash consists of restricted cash held in escrow, which includes cash held by escrow agents in escrow accounts for tenant and capital improvements in accordance with the respective tenants' lease agreement. Restricted cash attributable to continuing operations is reported in other assets, net, in the accompanying condensed consolidated balance sheets. See Note 8—"Other Assets, Net." |
Held for Sale and Discontinued Operations | Held for Sale and Discontinued Operations The Company classifies a real estate property as held for sale upon satisfaction of all of the following criteria: (i) management commits to a plan to sell a property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such properties; (iii) there is an active program to locate a buyer; (iv) the sale of the property is probable and transfer of the asset is expected to be completed within one year; (v) the property is being actively marketed for sale; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Upon the determination to classify a property as held for sale, the Company ceases depreciation and amortization on the real estate property held for sale, as well as the amortization of acquired in-place leases and right-of-use assets. The real estate property held for sale and associated liabilities are classified separately on the condensed consolidated balance sheets. Such properties are recorded at the lesser of the carrying value or estimated fair value less estimated costs to sell. As of December 31, 2021, the Company classified one land parcel that formerly contained a healthcare property as held for sale, or the 2021 Land Held for Sale. The Company recorded the 2021 Land Held for Sale at its carrying value at December 31, 2021. See Note 4—"Held for Sale and Discontinued Operations" for further discussion. On February 10, 2022, the Company sold the 2021 Land Held for Sale, for an aggregate sale price of $24,000,000, and generated net proceeds of approximately $22,701,000. See Note 3—"Acquisitions and Dispositions" for additional information. The Company classified assets and liabilities of the 29-property data center properties as discontinued operations for all the periods presented because they represented a strategic shift that had a major effect on the Company's results and operations. As of December 31, 2021, the Company had no assets or liabilities related to the data center properties. The operations of the data center properties are classified on the condensed consolidated statements of comprehensive income as income from discontinued operations for the three and six months ended June 30, 2021. On July 22, 2021, the Company completed the Data Center Sale, for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. See Note 3—"Acquisitions and Dispositions" for additional information.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate assets may not be recoverable, the Company assesses the recoverability of the asset group by estimating whether the Company will recover the carrying value of the asset group through its undiscounted future cash flows and their eventual disposition. Based on this analysis, if the Company does not believe that it will be able to recover the carrying value of the asset group, the Company will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the asset group. When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental rates subsequent to the expiration of current lease arrangements, property operating expenses, terminal capitalization and discount rates, probability weighting of the potential re-lease of the property versus sales scenarios, sale prices of comparable properties, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in the future cash flow analysis could result in a different determination of the property’s future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate assets. In addition, the Company estimates the fair value of the assets by applying a market approach using comparable sales for certain properties. The use of alternative assumptions in the market approach analysis could result in a different determination of the property’s estimated fair value and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate assets. Impairment of Real Estate The Company determined that, during the three months ended March 31, 2022, real estate assets related to one healthcare property, or the First Quarter 2022 Impaired Property, were determined to be impaired. A healthcare tenant that occupies 90% of the property, leases its space for administrative use and has historically been using the space as its central business office. As a result of pandemic related events, the tenant permanently modified its business operations to accommodate a reduction in on-site staff, significantly reducing its need for administrative space going forward. The tenant has continued to pay its rent in accordance with the lease agreement, however indicated it would not expect to renew the lease upon expiration. The Company entered into a signed letter of intent with a prospective buyer that is a county-owned, tax-exempt entity, and requires ownership (vs. leasing) of the property to conduct its intended business operations at the property. In addition to the signed letter of intent with the prospective buyer, the Company signed a letter of intent with the tenant for the payment of an early lease termination fee. The early lease termination is effective only upon consummating a sale of the property to the prospective buyer. The inclusion of this potential sale scenario in the Company’s step one impairment analysis resulted in the expected future cash flows from the property falling below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $14,639,000, resulting in an impairment charge of $7,109,000. The Company had no real estate impairment during the three months ended June 30, 2022. During the three months ended March 31, 2021, real estate assets related to one healthcare property, or the First Quarter 2021 Impaired Property, were determined to be impaired. A tenant of the property that was experiencing financial difficulty vacated its space on June 19, 2020. During the fourth quarter of 2020, the Company entered into lease negotiations with a prospective tenant for the property, but the Company did not reach an agreement with the tenant. As such, the Company evaluated other strategic options, including a possible sale, and in April 2021, the Company received a letter of intent from a prospective buyer. The inclusion of a potential sale scenario in the Company’s step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $17,145,000, resulting in an impairment charge of $10,423,000. The property was subsequently sold in the fourth quarter of 2021. During the three months ended June 30, 2021, real estate assets related to one healthcare property, or the Second Quarter 2021 Impaired Property One, were determined to be impaired. The tenant of the property was experiencing financial difficulty and vacated the space in March 2021. Subsequently, during the second quarter, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property falling below its current carrying value. The Company utilized a market approach, using comparable properties, to estimate the fair value of the property. As a result, the carrying value of the property was reduced to its estimated fair value of $5,957,000, resulting in an impairment charge of $2,894,000. Additionally, during the three months ended June 30, 2021, real estate assets related to the 2021 Land Held for Sale, or the Second Quarter 2021 Impaired Property Two, were determined to be impaired. The last of the three tenants that occupied the building terminated its lease agreement and vacated the space on July 12, 2021. Subsequently, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated the fair value of $22,311,000, resulting in an impairment charge of $3,608,000. Impairment charges are recorded as impairment loss on real estate in the condensed consolidated statements of comprehensive income. During the three months ended June 30, 2021, the Company accelerated depreciation of equipment at the Second Quarter 2021 Impaired Property Two based on its anticipated sale. As a result, the Company accelerated the depreciation of the equipment in the amount of $296,000 in depreciation and amortization expense in the condensed consolidated statements of comprehensive income. Impairment of Acquired Intangible Assets and Acquired Intangible Liabilities During the three months ended June 30, 2022 and 2021, the Company did not record impairment of acquired intangible assets. During the six months ended June 30, 2022, the Company recognized an impairment of one in-place lease intangible asset, or the First Quarter 2022 Impaired In-Place Lease, in the amount of approximately $380,000, by accelerating the amortization of the acquired intangible asset related to a tenant of the First Quarter 2022 Impaired Property. During the six months ended June 30, 2021, the Company recognized an impairment of one in-place lease intangible asset, or the First Quarter 2021 Impaired In-Place Lease, in the amount of approximately $1,120,000, by accelerating the amortization of the acquired intangible asset related to one healthcare tenant of the Second Quarter 2021 Impaired Property One that was experiencing financial difficulties and vacated the property in March 2021. On April 5, 2021, the Company terminated its lease agreement and the tenant paid a lease termination fee of $400,000, which was recorded in rental revenue in the condensed consolidated statements of comprehensive income. During the three and six months ended June 30, 2022 and 2021, the Company did not record impairment of acquired intangible liabilities. Impairment of Goodwill Goodwill represents the excess of the amount paid over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and is allocated to an entity's reporting units. Goodwill has an indefinite life and is not amortized. On July 28, 2020, the Company and the Operating Partnership entered into a Membership Interest Purchase Agreement to provide for the internalization of the external management functions previously performed for the Company and the Operating Partnership by its former advisor and its affiliates, or the Internalization Transaction. On September 30, 2020, the Company closed the Internalization Transaction. On September 30, 2020, the Company recorded $39,529,000 of goodwill related to the transaction, of which $15,574,000 was allocated to the data center properties and written off as a result of the Data Center Sale on July 22, 2021. The remaining $23,955,000 of goodwill was allocated to the healthcare segment. The Company evaluates goodwill for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable, and at least annually. Unless circumstances otherwise dictate, the annual impairment test is performed as of the last day of each year. The Company evaluates potential triggering events that may affect the estimated fair value of the Company’s reporting units to assess whether any goodwill impairment exists. Deteriorating or adverse market conditions for certain reporting units may have a significant impact on the estimated fair value of these reporting units and could result in future impairments of goodwill. If the carrying value of a reporting unit exceeds its estimated fair value, then an impairment charge is recorded in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company has the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. Under a qualitative assessment, the impairment analysis for goodwill represents an evaluation of whether it is more-likely-than-not the reporting unit's fair value is less than its carrying value, including goodwill. If a qualitative analysis indicates that it is more-likely-than-not that the estimated carrying value of a reporting unit, including goodwill, exceeds its fair value, the Company performs the quantitative analysis as described below. During the three months ended March 31, 2022, the Company recognized $278,000 of goodwill impairment. Impairment loss on the First Quarter 2022 Impaired Property recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered an evaluation of the reporting unit's fair value for goodwill impairment. The Company's reporting unit represents each individual operating real estate property. The carrying value of long-lived assets within the reporting unit with indicators of impairment was first tested for recoverability and resulted in recognition of impairment during such period. As a result, the fair value of the reporting unit was determined to be lower than its carrying value, including goodwill. Therefore, the Company recognized an impairment loss on goodwill in the amount of $278,000 for the amount that the carrying value of the reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to the reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach. As of March 31, 2022, the Company did not have any goodwill associated with the reporting unit. The Company had no goodwill impairment during the three months ended June 30, 2022. During the three months ended March 31, 2021, the Company recognized $240,000 of goodwill impairment. Impairment loss on the First Quarter 2021 Impaired Property recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered an evaluation of the reporting unit's fair value for goodwill impairment. As a result, the fair value of the reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill in the amount of $240,000 for the amount that the carrying value of the reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to the reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach, using comparable sales to estimate the fair value. As of March 31, 2021, the Company did not have any goodwill associated with the reporting unit. During the three months ended June 30, 2021, the Company recognized $431,000 of goodwill impairment. Impairment losses on the Second Quarter 2021 Impaired Property One and Second Quarter 2021 Impaired Property Two recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered evaluation of each reporting unit's fair value for goodwill impairment. As a result, the fair value of each reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill for each of the two reporting units in the amounts of $112,000 and $319,000, respectively, for the amount that the carrying value of each reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to each reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of each reporting unit was determined based on a market approach model. As of June 30, 2021, the Company did not have any goodwill associated with these healthcare reporting units.
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Revenue Recognition, Tenant Receivables and Allowance for Uncollectible Accounts | Revenue Recognition, Tenant Receivables and Allowance for Uncollectible Accounts The majority of the Company's revenue is derived from rental revenue, which is accounted for in accordance with ASC 842, Leases, or ASC 842. In accordance with ASC 842, rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). For lease arrangements when it is not probable that the Company will collect all or substantially all of the remaining lease payments under the term of the lease, rental revenue is limited to the lesser of the rental revenue that would be recognized on a straight-line basis or the lease payments that have been collected from the lessee. Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable. Tenant reimbursements, which are comprised of additional amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses, are recognized when the services are provided and the performance obligations are satisfied. The Company recognizes non-rental related revenue in accordance with Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers, or ASC 606. The Company has identified its revenue streams as rental income from leasing arrangements and tenant reimbursements, which are outside the scope of ASC 606. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Non-rental revenue, subject to ASC 606, is immaterial to the Company's condensed consolidated financial statements. On April 22, 2021, the Company entered into a settlement agreement with a data center property tenant that was experiencing financial difficulty due to deteriorating economic conditions driven by the impact of the COVID-19 pandemic and accelerating its modification of work strategy to a remote environment due to the pandemic. The tenant stopped paying rent in October 2020. Pursuant to the settlement agreement, the lease was terminated, effective immediately. The tenant surrendered the space on June 20, 2021. Additionally, in connection with the lease termination, the tenant paid the Company a $7,000,000 termination fee on April 23, 2021, which was recorded in income from discontinued operations in the accompanying condensed consolidated statements of comprehensive income during the second quarter of 2021.
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Concentration of Credit Risk and Significant Leases | Concentration of Credit Risk and Significant Leases As of June 30, 2022, the Company had cash on deposit, including restricted cash, in certain financial institutions that had deposits in excess of current federally insured levels. The Company limits its cash investments to financial institutions with high credit standings; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. To date, the Company has not experienced a loss or lack of access to cash in its accounts. As of June 30, 2022, the Company owned real estate investments in two µSAs and 55 MSAs, one MSA of which accounted for greater than 10.0% of rental revenue from continuing operations for the six months ended June 30, 2022. Real estate investments located in the Houston-The Woodlands-Sugar Land, Texas MSA accounted for 11.1% of rental revenue from continuing operations for the six months ended June 30, 2022. As of June 30, 2022, the Company had one exposure to tenant concentration that accounted for greater than 10.0% of rental revenue from continuing operations for the six months ended June 30, 2022. The leases with tenants at healthcare properties under common control of Post Acute Medical, LLC and its affiliates accounted for 15.3% of rental revenue from continuing operations for the six months ended June 30, 2022.
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Share Repurchase Program | Share Repurchase Program The Company’s Amended and Restated Share Repurchase Program, or SRP, allows for repurchases of shares of the Company’s common stock upon meeting certain criteria. The SRP provides that all repurchases during any calendar year, including those redeemable upon death or a "Qualifying Disability" (as defined in the Company's SRP) of a stockholder, be limited to those that can be funded with equivalent proceeds raised from the DRIP during the prior calendar year and other operating funds, if any, as the Board, in its sole discretion, may reserve for this purpose. Repurchases of shares of the Company’s common stock are at the sole discretion of the Board, provided, however, that the Company limits the number of shares repurchased during any calendar year to 5.0% of the total number of shares of common stock outstanding as of December 31st of the previous calendar year. The SRP is subject to terms and limitations, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation and DRIP funding limitations and any amendments to the plan, as more fully described below. In addition, the Board, in its sole discretion, may suspend (in whole or in part) the SRP at any time, and may amend, reduce, terminate or otherwise change the SRP upon 30 days' prior notice to the Company’s stockholders for any reason it deems appropriate. The Company will currently only repurchase shares due to death and involuntary exigent circumstances in accordance with the SRP, subject in each case to the terms and limitations of the SRP, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation, and DRIP funding limitations. Under the SRP, the Company may waive certain of the terms and requirements of the SRP in the event of the death of a stockholder who is a natural person, including shares held through an Individual Retirement Account or other retirement or profit-sharing plan, and certain trusts meeting the requirements of the SRP. The Company may also waive certain of the terms and requirements of the SRP in the event of an involuntary exigent circumstance, as determined by the Company or any of the executive officers thereof, in its or their sole discretion. See Part II, Item 2. "Unregistered Sales of Equity Securities" for more information on the Company's SRP. During the six months ended June 30, 2022, the Company repurchased 561,725 Class A shares, Class I shares and Class T shares of common stock (476,551 Class A shares, 20,611 Class I shares and 64,563 Class T shares), for an aggregate purchase price of approximately $4,606,000 (an average of $8.20 per share). During the six months ended June 30, 2021, the Company repurchased 469,334 Class A shares, Class I shares and Class T shares of common stock (443,434 Class A shares, 2,504 Class I shares and 23,396 Class T shares), for an aggregate purchase price of approximately $4,078,000 (an average of $8.69 per share).
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Stock-based Compensation | Stock-based Compensation On March 6, 2020, the Board approved the Amended and Restated 2014 Restricted Share Plan, or the A&R Incentive Plan, pursuant to which the Company has the authority and power to grant awards of restricted shares of its Class A common stock to its directors, officers and employees. The Company accounts for its stock awards in accordance with ASC 718-10, Compensation—Stock Compensation. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). For performance-based awards, compensation costs are recognized over the service period if it is probable that the performance condition will be satisfied, with changes of the assessment at each reporting period and recording the effect of the change in the compensation cost as a cumulative catch-up adjustment. The compensation costs for restricted stock are recognized based on the fair value of the restricted stock awards at grant date less forfeitures (if applicable). Forfeitures are accounted for as they occur. On January 3, 2022, the Company granted time-based awards to its executive officers, consisting of 217,988 in restricted shares of Class A common stock, or the Time-Based 2022 Awards. The Time-Based 2022 Awards will vest ratably over four years following the grant date, subject to each executive's employment through the applicable vesting dates, with certain exceptions. In addition, on January 3, 2022, the Company's compensation committee approved performance-based deferred stock unit awards, or Performance DSUs, to be granted for performance-based awards, or the Performance-Based 2022 Awards. The Performance-Based 2022 Awards will be measured based on Company performance over a three-year performance period ending on December 31, 2024. The Performance-Based 2022 Awards vest after the last day of the performance period and are subject to continued employment through the applicable vesting date. The Time-Based 2022 Awards and the Performance-Based 2022 Awards, or collectively, the 2022 Awards, were granted under and are subject to the terms of the A&R Incentive Plan and award agreements. Stock-based compensation expense for the 2022 Awards for the three and six months ended June 30, 2022, was approximately $343,000 and $604,000, respectively, which is reported in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income. The Company recognized accelerated stock-based compensation expense of $326,000 during the three and six months ended June 30, 2022, of which $92,000 related to the 2022 Awards, due to the termination of its former chief accounting officer on May 12, 2022. The Company recognized total stock-based compensation expense of approximately $1,278,000 and $563,000, respectively, for the three months ended June 30, 2022 and 2021, and $2,174,000 and $1,119,000, respectively, for the six months ended June 30, 2022 and 2021, which is reported in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income.
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Earnings Per Share | Earnings Per Share The Company calculates basic earnings per share by dividing net income attributable to common stockholders for the period by the weighted average shares of its common stock outstanding for that period. Diluted earnings per share is computed based on the weighted average number of shares outstanding and all potentially dilutive securities. Shares of non-vested restricted common stock and Performance DSUs give rise to potentially dilutive shares of common stock. For the three and six months ended June 30, 2022, diluted earnings per share reflected the effect of approximately 1,355,000 and 1,360,000, respectively, of non-vested shares of restricted common stock and Performance DSUs that were outstanding. For the three and six months ended June 30, 2021, diluted earnings per share was computed the same as basic earnings per share, because the Company recorded a loss from continuing operations, which would make potentially dilutive shares of 964,000 and 952,000, respectively, related to non-vested shares of restricted common stock and Performance DSUs, anti-dilutive.
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Reportable Segments | Reportable SegmentsASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an entity’s reportable segments. As of June 30, 2022 and December 31, 2021, 100% of the Company's consolidated revenues from continuing operations were generated from real estate investments in healthcare properties. The Company’s chief operating decision maker evaluates operating performance of healthcare properties on an individual property level, which are aggregated into one reportable segment due to their similar economic characteristics. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As required by ASC 815, Derivatives and Hedging, or ASC 815, the Company records all derivative instruments at fair value as assets and liabilities on its condensed consolidated balance sheets. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. In accordance with the fair value measurement guidance Accounting Standards Update, or ASU, 2011-04, Fair Value Measurement, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. The Company is exposed to variability in expected future cash flows that are attributable to interest rate changes in the normal course of business. The Company’s primary strategy in entering into derivative contracts is to add stability to future cash flows by managing its exposure to interest rate movements. The Company utilizes derivative instruments, including interest rate swaps, to effectively convert some of its variable rate debt to fixed rate debt. The Company does not enter into derivative instruments for speculative purposes. In accordance with ASC 815, the Company designates interest rate swap contracts as cash flow hedges of floating-rate borrowings. For derivative instruments that are designated and qualify as cash flow hedges, the gains or losses on the derivative instruments are reported as a component of other comprehensive income in the condensed consolidated statements of comprehensive income and are reclassified into earnings in the same line item associated with the forecasted transaction in the same period during which the hedged transactions affect earnings. See additional discussion in Note 12—"Derivative Instruments and Hedging Activities."
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table presents a reconciliation of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the totals shown in the condensed consolidated statements of cash flows (amounts in thousands):
(1)Of this amount, $13,499,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations. (2)Of this amount, $21,390,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations.
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Schedule of Goodwill | The following table summarizes the rollforward of goodwill for the six months ended June 30, 2022 (amounts in thousands):
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Acquisitions and Dispositions (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Consideration Transferred for Properties Acquired | The following table summarizes the consideration transferred for the 2022 Acquisitions during the six months ended June 30, 2022:
(1) The Prosser Healthcare Facilities consist of three healthcare properties. The following table summarizes the property acquired subsequent to June 30, 2022 and through August 9, 2022:
(1)The property is leased to a single tenant. (2)The Company drew $105,000,000 on the Unsecured Credit Facility to fund the acquisitions.
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Schedule of Allocation of Acquisitions | The following table summarizes the Company's purchase price allocation of the 2022 Acquisitions during the six months ended June 30, 2022 (amounts in thousands):
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Schedule of Disposition | The following table summarizes the 2022 Disposition:
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Held for Sale and Discontinued Operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Major Classes of Assets and Liabilities Classified as Held for Sale and Operations Reflected in Discontinued Operations | The following table presents the major classes of assets and liabilities of the 2021 Land Held for Sale, classified as assets and liabilities held for sale, net, presented separately in the condensed consolidated balance sheet as of December 31, 2021 (amounts in thousands):
The operations reflected in income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2021, were as follows (amounts in thousands):
(1) Interest expense attributable to discontinued operations for the three and six months ended June 30, 2021 was $3,402,000 and $6,771,000, respectively, which related to notes payable on certain data center properties. On July 22, 2021, in connection with the Data Center Sale, the Company paid off all data center and healthcare related notes payable, with an outstanding principal balance of $450,806,000 at the time of repayment.
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Acquired Intangible Assets, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Intangible Assets, Net | Acquired intangible assets, net, consisted of the following as of June 30, 2022 and December 31, 2021 (amounts in thousands, except weighted average remaining life amounts):
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Acquired Intangible Liabilities, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||
Intangible Lease Liabilities, Net [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Acquired Intangible Liabilities, Net | Acquired intangible liabilities, net, consisted of the following as of June 30, 2022 and December 31, 2021 (amounts in thousands, except weighted average remaining life amounts):
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rent to Lessor from Operating Leases | Future rent to be received from the Company's investments in real estate assets under the terms of non-cancellable operating leases in effect as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
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Schedule of Future Minimum Rent from Lessee for Operating Leases | The future rent payments, discounted by the Company's IBRs, under non-cancellable leases in effect as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
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Schedule of Future Minimum Rent from Lessee for Finance Lease | The future rent payments, discounted by the Company's IBRs, under non-cancellable leases in effect as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
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Schedule of Lease Cost | The following table provides details of the Company's total lease costs and reimbursements for the three and six months ended June 30, 2022 and 2021 (amounts in thousands):
(1)The Company is reimbursed by tenants who sublease the ground leases. (2)Amounts relate to lease costs and reimbursements attributable to two operating ground leases related to data center properties disposed of in the Data Center Sale on July 22, 2021.
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Other Assets, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets, Net | Other assets, net, consisted of the following as of June 30, 2022 and other assets, net, excluding assets held for sale, net, consisted of the following as of December 31, 2021 (amounts in thousands):
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Accounts Payable and Other Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Other Liabilities | Accounts payable and other liabilities consisted of the following as of June 30, 2022 and accounts payable and other liabilities, excluding liabilities held for sale, net, consisted of the following as of December 31, 2021 (amounts in thousands):
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Credit Facility (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Credit Facility | The Company's outstanding credit facility as of June 30, 2022 and December 31, 2021 consisted of the following (amounts in thousands):
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Schedule of Future Principal Payments Due on Debt | The principal payments due on the Unsecured Credit Facility as of June 30, 2022, for the six months ending December 31, 2022, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
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Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (amounts in thousands):
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Schedule of Fair Value, Real Estate Assets Measured on Non-Recurring Basis | The following table shows the fair value of the Company's real estate assets measured at fair value on a non-recurring basis as of March 31, 2022 (amounts in thousands):
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Derivative Instruments and Hedging Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Notional Amount and Fair Value of Derivative Instruments | The following table summarizes the notional amount and fair value of the Company’s derivative instruments (amounts in thousands):
(1) Derivative assets and liabilities are reported in the condensed consolidated balance sheets as other assets, net, and accounts payable and other liabilities, respectively. (2) On April 8, 2022, the Company entered into three interest rate swap agreements with an aggregate notional amount of $150,000,000, that have an effective date of May 1, 2023, to replace two interest rate swaps with an aggregate notional amount of $150,000,000 that have a maturity date of April 27, 2023. (3) In May 2022, the Company entered into bilateral agreements with its swap counterparties to transition all of its interest rate swap agreements to SOFR. As of June 30, 2022, all of the Company's interest rate swap agreements were indexed to SOFR.
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Schedule of Income and Losses Recognized on Derivative Instruments | The table below summarizes the amount of income and losses recognized on the interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2022 and 2021 (amounts in thousands):
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Schedule of Offsetting of Derivative Assets | The following tables present the effect on the Company’s financial position had the Company made the election to offset its derivative positions as of June 30, 2022 and December 31, 2021 (amounts in thousands):
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Schedule of Offsetting of Derivative Liabilities |
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Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amounts Recognized in Accumulated Other Comprehensive Income (Loss) | The following table presents a rollforward of amounts recognized in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2022 and 2021 (amounts in thousands):
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Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | The following table presents reclassifications out of accumulated other comprehensive income (loss) for the six months ended June 30, 2022 and 2021 (amounts in thousands):
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Subsequent Events (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Events [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Subsequent Events | The following table summarizes the Company's distributions paid to stockholders on July 8, 2022, for the period from June 1, 2022 through June 30, 2022 (amounts in thousands):
The following table summarizes the Company's distributions paid to stockholders on August 4, 2022, for the period from July 1, 2022 through July 31, 2022 (amounts in thousands):
Distributions Authorized The following tables summarize the daily distributions approved and authorized by the Board subsequent to June 30, 2022:
(1)Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on August 1, 2022 and ending on August 31, 2022. The distributions are calculated based on 365 days in the calendar year. The distributions declared for each record date in August 2022 will be paid in September 2022. The distributions are payable to stockholders from legally available funds therefor. (2)Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on September 1, 2022 and ending on September 30, 2022. The distributions will be calculated based on 365 days in the calendar year. The distributions declared for each record date in September 2022 will be paid in October 2022. The distributions will be payable to stockholders from legally available funds therefor.
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Schedule of Consideration Transferred for Properties Acquired | The following table summarizes the consideration transferred for the 2022 Acquisitions during the six months ended June 30, 2022:
(1) The Prosser Healthcare Facilities consist of three healthcare properties. The following table summarizes the property acquired subsequent to June 30, 2022 and through August 9, 2022:
(1)The property is leased to a single tenant. (2)The Company drew $105,000,000 on the Unsecured Credit Facility to fund the acquisitions.
|
Summary of Significant Accounting Policies (Reconciliation of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash and cash equivalents | $ 23,077 | $ 32,359 | $ 47,921 | $ 53,174 |
Restricted cash | 167 | 521 | 22,626 | 14,735 |
Cash, cash equivalents and restricted cash | $ 23,244 | $ 32,880 | 70,547 | 67,909 |
Continuing Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restricted cash | 21,390 | 13,499 | ||
Discontinued Operations, Disposed of by Sale | Data Centers | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restricted cash | $ 1,236 | $ 1,236 |
Summary of Significant Accounting Policies (Schedule of Goodwill) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Goodwill [Roll Forward] | ||||||
Beginning balance | $ 23,284,000 | $ 23,284,000 | ||||
Impairment loss on goodwill | $ 0 | $ (278,000) | $ (431,000) | $ (240,000) | (278,000) | $ (671,000) |
Ending balance | $ 23,006,000 | $ 23,006,000 |
Acquisitions and Dispositions (Schedule of Consideration Transferred for Properties Acquired) (Details) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
May 20, 2022
USD ($)
property
|
May 12, 2022
USD ($)
|
Mar. 10, 2022
USD ($)
|
Jun. 30, 2022
USD ($)
|
|
Business Acquisition [Line Items] | ||||
Purchase Price | $ 42,450 | |||
Yukon Healthcare Facility | ||||
Business Acquisition [Line Items] | ||||
Ownership Percentage | 100.00% | |||
Purchase Price | $ 19,554 | |||
Pleasant Hills Healthcare Facility | ||||
Business Acquisition [Line Items] | ||||
Ownership Percentage | 100.00% | |||
Purchase Price | $ 14,303 | |||
Prosser Healthcare Facilities | ||||
Business Acquisition [Line Items] | ||||
Ownership Percentage | 100.00% | |||
Purchase Price | $ 8,593 | |||
Number of healthcare properties | property | 3 |
Acquisitions and Dispositions (Schedule of Allocation of Acquisitions) (Details) - 2022 Acquisitions $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
| |
Business Acquisition [Line Items] | |
Above-market leases | $ 454 |
Total assets acquired | 42,913 |
Below-market leases | (463) |
Total liabilities acquired | (463) |
Net assets acquired | 42,450 |
In-place leases | |
Business Acquisition [Line Items] | |
In-place leases | 2,752 |
Land | |
Business Acquisition [Line Items] | |
Property, plant and equipment acquired | 2,646 |
Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant and equipment acquired | 35,021 |
Tenant Improvements | |
Business Acquisition [Line Items] | |
Property, plant and equipment acquired | $ 2,040 |
Acquisitions and Dispositions (Schedule of Dispositions) (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Feb. 10, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Real Estate [Line Items] | |||
Net Proceeds | $ 22,822 | $ 0 | |
2022 Disposition | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Real Estate [Line Items] | |||
Sale Price | 24,000 | ||
Net Proceeds | $ 22,701 | ||
Houston Healthcare Facility II | 2022 Disposition | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Real Estate [Line Items] | |||
Sale Price | $ 24,000 | ||
Net Proceeds | $ 22,701 |
Held for Sale and Discontinued Operations (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Capital expenditures | $ 6,477 | $ 14,743 |
Held-for-sale or Disposed of by Sale | Data Centers | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Capital expenditures | $ 2,017 |
Acquired Intangible Assets, Net (Narrative) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining useful life of intangible assets | 9 years 1 month 6 days | 9 years 6 months | |||
Amortization of acquired intangible assets | $ 5,676,000 | $ 5,499,000 | $ 11,718,000 | $ 12,117,000 | |
Impairment of acquired intangible assets | $ 0 | $ 0 | |||
In-place and above-market leases | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of acquired intangible assets | $ 380,000 | $ 1,120,000 |
Acquired Intangible Liabilities, Net (Schedule of Acquired Intangible Liabilities, Net) (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Intangible Lease Liabilities, Net [Line Items] | ||
Accumulated amortization of below-market leases | $ 5,177 | $ 4,444 |
Weighted average remaining life of below-market leases | 8 years 10 months 24 days | 9 years 3 months 18 days |
Below-market leases, net of accumulated amortization | $ 12,692 | $ 12,962 |
Acquired Intangible Liabilities, Net (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Intangible Lease Liabilities, Net [Abstract] | ||||
Amortization of below-market leases | $ 369 | $ 333 | $ 733 | $ 641 |
Leases (Schedule of Future Minimum Rent to Lessor from Operating Leases) (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Leases [Abstract] | |
Six months ending December 31, 2022 | $ 81,419 |
2023 | 166,498 |
2024 | 167,743 |
2025 | 163,655 |
2026 | 156,685 |
Thereafter | 1,016,890 |
Total | $ 1,752,890 |
Leases (Schedule of Rent Payments from Lessee) (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating | ||
Six months ending December 31, 2022 | $ 923 | |
2023 | 1,863 | |
2024 | 1,930 | |
2025 | 1,950 | |
2026 | 1,897 | |
Thereafter | 68,842 | |
Total undiscounted rental payments | 77,405 | |
Less imputed interest | (49,936) | |
Total lease liabilities | 27,469 | $ 23,758 |
Finance | ||
Six months ending December 31, 2022 | 68 | |
2023 | 136 | |
2024 | 141 | |
2025 | 143 | |
2026 | 143 | |
Thereafter | 6,441 | |
Total undiscounted rental payments | 7,072 | |
Less imputed interest | (4,434) | |
Total lease liabilities | $ 2,638 | $ 2,636 |
Other Assets, Net (Schedule of Other Assets, Net) (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Assets [Abstract] | ||
Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $381 and $8,332, respectively | $ 3,686 | $ 482 |
Leasing commissions, net of accumulated amortization of $135 and $121, respectively | 808 | 780 |
Restricted cash | 167 | 521 |
Tenant receivables | 1,290 | 1,851 |
Straight-line rent receivable | 60,666 | 55,725 |
Real estate deposits | 1,134 | 0 |
Prepaid and other assets | 3,809 | 4,835 |
Derivative assets | 13,674 | 2,171 |
Total other assets, net | 85,234 | 66,365 |
Deferred financing costs, related to the revolver portion of the credit facility, accumulated amortization | 381 | 8,332 |
Leasing commissions, accumulated amortization | $ 135 | $ 121 |
Accounts Payable and Other Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 4,620 | $ 8,431 |
Accrued interest expense | 1,233 | 1,626 |
Accrued property taxes | 2,515 | 2,913 |
Accrued personnel costs | 2,471 | 4,198 |
Distribution and servicing fees | 0 | 182 |
Distributions payable to stockholders | 7,435 | 7,355 |
Performance DSUs distributions payable | 447 | 394 |
Tenant deposits | 875 | 802 |
Deferred rental income | 7,095 | 7,100 |
Contingent consideration | 1,160 | 978 |
Derivative liabilities | 3 | 5,618 |
Total accounts payable and other liabilities | $ 27,854 | $ 39,597 |
Credit Facility (Schedule of Credit Facility) (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Total credit facility, principal amount outstanding | $ 505,000 | $ 500,000 |
Unamortized deferred financing costs related to the term loan credit facility | (2,728) | (3,226) |
Total credit facility, net of deferred financing costs | 502,272 | 496,774 |
Term Loan | Variable rate term loans fixed through interest rate swaps | ||
Line of Credit Facility [Line Items] | ||
Total credit facility, principal amount outstanding | 485,000 | 400,000 |
Term Loan | Variable rate term loans | ||
Line of Credit Facility [Line Items] | ||
Total credit facility, principal amount outstanding | $ 20,000 | $ 100,000 |
Credit Facility (Schedule of Principal Payments Due on Credit Facility) (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Six months ending December 31, 2022 | $ 0 |
2023 | 0 |
2024 | 300,000 |
2025 | 0 |
2026 | 0 |
Thereafter | 205,000 |
Total | $ 505,000 |
Derivative Instruments and Hedging Activities (Narrative) (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2022
USD ($)
|
Apr. 08, 2022
agreement
|
Jul. 22, 2021
interestRateSwapInstrument
|
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Additional gain expected to be reclassified from AOCI into earnings during next twelve months | $ 6,055 | $ 6,055 | ||
Derivatives in a net liability position | 16 | 16 | ||
Discontinued Operations, Disposed of by Sale | Data Centers | Continuing Operations | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amounts reclassified from AOCI to earnings | $ 357 | $ 995 | ||
Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Number of derivative instruments | agreement | 5 | |||
Interest rate swaps | Discontinued Operations, Disposed of by Sale | Data Centers | Continuing Operations | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Number of derivative instruments | interestRateSwapInstrument | 8 |
Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Assets) (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 13,674 | $ 2,171 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet | 13,674 | 2,171 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral | 0 | (1,023) |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | 0 | 0 |
Net Amount | $ 13,674 | $ 1,148 |
Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Liabilities) (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Liabilities | $ 3 | $ 5,618 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheet | 3 | 5,618 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral | 0 | (1,023) |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | 0 | 0 |
Net Amount | $ 3 | $ 4,595 |
Accumulated Other Comprehensive Income (Loss) (Amounts Recognized in AOCI) (Details) - Unrealized Income (Loss) on Derivative Instruments - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning | $ (4,847) | $ (20,444) |
Other comprehensive income (loss) before reclassification | 14,821 | 2,771 |
Amount of loss reclassified from accumulated other comprehensive income (loss) to net income | 3,291 | 4,796 |
Other comprehensive income (loss) | 18,112 | 7,567 |
Balance, ending | $ 13,265 | $ (12,877) |
Accumulated Other Comprehensive Income (Loss) (Reclassifications Out of AOCI) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other expense, net | $ 4,329 | $ 9,534 | $ 12,444 | $ 18,298 |
Income from discontinued operations | 0 | (16,305) | 0 | (24,253) |
Net income (loss) attributable to common stockholders | $ (12,021) | $ (16,056) | (13,392) | (18,938) |
Interest rate swaps | Loss Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other expense, net | 3,291 | 3,691 | ||
Income from discontinued operations | 0 | 1,105 | ||
Net income (loss) attributable to common stockholders | $ 3,291 | $ 4,796 |
Commitments and Contingencies (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022
USD ($)
legalProceeding
|
Jun. 30, 2022
USD ($)
legalProceeding
|
Jun. 30, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Loss Contingencies [Line Items] | ||||
Number of pending legal proceedings to which the company is a party | legalProceeding | 0 | 0 | ||
Contingent consideration | $ 1,160 | $ 1,160 | $ 978 | |
Decrease in contingent consideration | (182) | $ 0 | ||
Contingent consideration | ||||
Loss Contingencies [Line Items] | ||||
Contingent consideration | 1,160 | 1,160 | ||
Decrease in contingent consideration | 373 | |||
Maximum | Contingent consideration | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency, Estimate of Possible Loss | 1,701 | 1,701 | ||
Minimum | Contingent consideration | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency, Estimate of Possible Loss | $ 742 | $ 742 |
Subsequent Events (Asset Acquisition) (Details) - USD ($) $ in Thousands |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jul. 22, 2022 |
Jul. 21, 2022 |
Jul. 20, 2022 |
May 12, 2022 |
Mar. 10, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Subsequent Event [Line Items] | |||||||
Purchase price | $ 42,450 | ||||||
Proceeds from credit facility | $ 20,000 | $ 15,000 | $ 740,000 | $ 15,000 | |||
Subsequent Event | Term Loan | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from credit facility | $ 105,000 | ||||||
Escondido Healthcare Facility | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Purchase price | $ 63,400 | ||||||
Ownership Percentage | 100.00% | ||||||
Tampa Healthcare Facility II | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Purchase price | $ 51,181 | ||||||
Ownership Percentage | 100.00% |