ANNUAL
REPORT2019
At the time of the writing of this letter, the outbreak of COVID-19 and the potential
implications for the health and well-being of the broader population is of great concern
for us. It is important to remind you that infection and flu control are a critical part of the
senior living operating model. Welltower has always maintained stringent flu protocols
and, in 2018, elected to further enhance these practices by retaining the University
of California, San Francisco Health System to introduce and update the most current
evidence-based patient and caregiver programs. While it is impossible to predict the path
and broader implications of COVID-19, I can assure you that the safety of our residents,
caregivers and all our employees and stakeholders is, and will always be, our priority.
LETTER FROM
THE CHAIRMAN
AND CEO
Dear Shareholders,
2019 was a pivotal year for Welltower, driven
by strong financial performance across our
portfolio and stable earnings growth. Our strategy
and astute capital allocation have solidified
Welltower’s position as the preeminent owner,
manager and developer of health care real estate.
2019 marked the end of a five-year plan that took
the Company formerly known as Health Care REIT
(NYSE: HCN) through a complete restructuring
of its business strategy, real estate portfolio,
operating partners, investment structures, and
human capital and included a rebranding and
renaming to Welltower (NYSE: WELL). During this
period, we sold over $10 billion in outmoded or
misaligned real estate investments and accretively
redeployed that capital into $18 billion of high-
quality, real estate investments. I am proud to
tell you that over this five-year period we have
delivered a 38.5% total return to our shareholders.
Reimagining and Reinventing the
Built Environment for Health Care
Delivery
Consider that the US spends a whopping
17% of GDP on ‘pills and procedures’ and
significantly less on social determinants
of health such as nutrition, safety, exercise
and social isolation when compared to
other developed nations. This model of
care has led to massive societal challenges
that are simply unsustainable. To make
meaningful change, we need to recalibrate
the definition of health care delivery more
toward these social determinants. As a
purpose driven organization, Welltower
is reimagining and reinventing the built
environment for more effective health care
delivery in order to improve the health and
wellness of an aging population.
A Platform for Health Care and
Wellness Delivery
We see every day how our real estate has a
positive social impact that goes far beyond
collecting rents and paying dividends. We
see the 1701 buildings we own as a platform.
This platform has hundreds of thousands
of at-risk seniors who live with us every
day and tens of millions of clinician –
patient visits that occur every year in our
outpatient facilities. This platform has value
well beyond the ‘brick and mortar’ as it
enables products, services, and technology
to effectively and efficiently reach our
residents and patients at scale. It is within
this last mile of engagement that we can
address some of the massive challenges
faced by the health care sector today. If we
are to improve health outcomes and lower
the cost of delivering care, innovation and
disruption of the status quo is imperative.
This is Welltower’s value proposition.
Innovation through Collaboration
We have big structural issues to solve in
healthcare delivery and Welltower is leading
the way in cross industry solutions. Part of
the problem is that healthcare systems are
too invested in and reliant on outmoded
and inefficient acute care hospital real
estate. At the same time, the 80+ year old
age cohort will grow by nearly 50% in the
next ten years. Why is this a concern? Due
to chronic illnesses associated with this
same population, this cohort will account
for 85% of all US health care spend. This
is not sustainable. Therefore, in 2019,
Welltower joined together with technology
companies, health insurers, health systems
and other companies committed to
addressing these issues.
In September, we announced a
collaboration with CareMore Health, an
Anthem subsidiary and integrated plan
and care delivery system. This innovative
partnership combines the benefits of
managing the complex critical health care
needs of seniors in controlled, lower risk
settings where their social determinants of
health can be monitored and maintained.
The integration of CareMore’s clinical
programs in a residential setting unlocked
key synergies across our platforms and
delivered significant value to our residents
and their families by increasing access to
and coordination of health and wellness
premium residential senior care facilities by
services. The success of this partnership
welcoming five new operators to our family
exemplifies the transformational impact of
of brands. Top senior living operators like
value-based care and affirms the critical role
Atria Senior Living, Balfour Senior Living,
of the right built environment in the delivery
LCB Senior Living, Frontier Management,
of care.
In November, we announced a partnership
with Royal Philips to bring its state-of-the-
art elder technology platform to Sunrise at
E. 56th, our flagship senior living community
in midtown Manhattan. When this property
and Clover Management recognize that
the strategic benefits of partnering with
Welltower extend beyond capital. We invest
in our operators and have built a community
of leaders who raise the bar for each other
and for the entire industry. Together, we
are delivering a next generation model of
opens in mid-2020, we believe it will be the
residential care.
most technologically advanced, purpose-
built, residential care facility for seniors in
Unsuitable, traditional home settings
the world. Philips technology will enable
combined with the lack of professional
resident locating, alerts, mobile-enabled
oversight of nutrition, hydration, hygiene
communications and wellness tracking. This
and daily prescription drug compliance
platform will provide actionable insights and
and management create significant
data into resident activity as well as add an
challenges for seniors, their families and
additional layer of safety and security for
home health care workers. The cost to
those residents who are chronically ill, frail
deliver appropriate care either in the home
and cognitively impaired.
or in institutional settings are considerable.
Expanding our Senior Living
Footprint
The issues involved in caring for a senior
with dementia and/or multiple chronic
conditions are profound. We are proud
of our team of senior housing operating
partners in the US, Canada, and UK who are
the best in the business. These operators
care for hundreds of thousands of at-risk
seniors in residential settings focused on
Medicare does not reimburse the cost of
this care. Welltower’s focus in the premium
end of residential senior care results in costs
that can run as high as $20,000 per month
which is paid privately by our residents or
their families. These costs are considerable,
but our best-in-class operators deliver a
high level of personal care that enables our
residents to receive the assistance needed
with activities of daily living in view of their
health condition.
wellness and providing assistance with
welltowerLIVING…a new model
activities of daily living. During 2019,
Welltower further solidified its position as
the preeminent owner and developer of
As we continue to profitably grow our
premium senior care offering, the fact that
85% of seniors in the US have incomes of
$50,000 or less makes residential senior
existing platform. Our new total of 24
care out of reach for most Medicare seniors.
million square feet of assets positions
If we don’t get out in front of ensuring
Welltower as the largest US public owner
that this growing population of seniors
of this asset class. As health care delivery
maintains their social determinants of
moves from acute care hospitals to more
health, an already strained US health care
ambulatory and accessible sites of care,
system will be further challenged. This
Welltower is well-positioned to lead this
presents a sizable, untapped opportunity.
transition. In November, in partnership with
A new model where younger, independent
Providence St. Joseph Health, we opened
seniors can start to live in supportive,
a state-of-the-art outpatient cancer center
congregate living environments that
adjacent to The Shops at Mission Viejo, a
inspire better behaviors and a more
luxury shopping mall in Mission Viejo, CA.
wellness-oriented lifestyle is needed. This
This building enables cancer patients to
is why we purchased Clover, a portfolio
receive outpatient treatments in a modern,
of 32 purpose-built senior apartment
convenient and technologically advanced
communities that are designed to meet
building designed to inspire wellness.
the needs of an independent, middle
income senior. These communities offer
structural enhancements over traditional
home settings like elevators, wide hallways
with handrails and bathrooms designed to
accommodate mobility issues. These Clover
communities seeded the business line now
branded as welltowerLIVING, a moderately
priced senior living alternative at an
average cost today of $1,100 per month.
Our communities are focused on wellness,
combating social isolation and safety and,
with the benefit of new technology and
aligned partnerships, should accommodate
a long path of aging-in-place at an
affordable price.
The Next Generation of
Ambulatory Care
Delivering Strong Financial
Performance
The consistency of our internal growth
engine, the volume of accretive capital
deployment activity and the discipline of
our asset recycling efforts drove strong
financial performance across all segments
last year, culminating in 23% total return
to shareholders. We reported $4.16*
per diluted share of normalized FFO to
shareholders, representing 3% growth from
2018. Our stabilized portfolio of assets
posted consistent performance through
the year, resulting in 2.8%* same store net
operating income growth. Our balance
sheet strength remains a hallmark of the
Company, allowing us to complete nearly $5
billion of pro rata gross investments during
In 2019, we acquired $2.4 billion of
2019. We capitalized on advantageous
outpatient medical assets contributing 6
market conditions, issuing approximately
million square feet of real estate to our
$3 billion of attractively priced debt
while also generating nearly $1.5 billion of
parity across our workforce and we lead
proceeds through the methodical issuance
by example as women and minorities also
of common equity. As a result, we have
make up 50% of our senior leadership
eliminated all material unsecured debt
team. As a result, I am pleased that in 2019,
maturities through 2022 and lowered our
Welltower was named to the Bloomberg
weighted average borrowing cost to just
Gender-Equality Index.
3.8%. The strength of our balance sheet and
ability to deliver consistent, sector-leading
performance validates our strategic vision
and positions us to continually source high
quality growth opportunities.
ESG - Enhancing Strategy and
Shareholder Value
I believe that a successful public
corporation can do well while doing good
for society. To that end, in 2015, I launched
the Welltower Foundation. Since its
inception, the Welltower Foundation and
Welltower have given nearly $45 million to
well deserving organizations focused on
health care, aging, wellness and education.
Our commitment to the environment,
It is also our belief that our business
diversity and equality, and good corporate
model is positioned to tackle massive
governance is integral to the Welltower
societal issues such as social isolation and
strategy and, during 2019, numerous ESG
loneliness. It is increasingly recognized that
initiatives helped us drive shareholder value.
these issues have a significant negative
Environmental Responsibility
Our sustainability goals and results earned
Welltower numerous accolades, including a
place in the Dow Jones World Sustainability
Index for the second consecutive year, and
designation as ENERGY STAR Partner of
the Year. Our recognized leadership here
directly benefited our shareholders by
impact on the health and wellness of
our senior population. We are optimistic
that welltowerLIVING will help to address
this growing issue as it provides a more
affordable option for seniors to live in
a wellness-oriented, congregate living
community.
Good Governance
enabling us to issue our first Green Bond in
I must admit that I am in awe of the wise
December. This innovative financing vehicle
words penned by Warren Buffett each year
allowed Welltower to achieve its lowest
in his Annual Shareholder Letter. If I may be
coupon ever on a 7-year debt placement as
so bold, I would like to quote a statement
demand was seven times oversubscribed
he made in his most recent letter regarding
by large, global institutional investors with a
Board composition. He spoke to the poor
commitment to the environment.
state of corporate boards noting there are
Social Responsibility and Diversity
Welltower is a company with true gender
too few women and many seats are filled by
directors all too prepared to go along with
every decision made by management. He
wrote, “When seeking directors, CEOs don’t
while achieving industry leading financial
look for pit bulls. It’s the cocker spaniel that
performance and building shareholder
gets taken home.” I am pleased to say that
value. This would not be possible without
this is not the state of the Welltower Board.
the hard-working and talented professionals
Seventy-five percent of our Independent
with whom I have the opportunity to work
Directors are women and minorities and
alongside every day at Welltower, as well as
50% are women which puts Welltower at
the more than 50,000 caregivers who work
the very top of all S&P 500 companies for
tirelessly to ensure the wellness and dignity
Board diversity. Welltower was recognized
of our residents. Thank you for supporting
as a 2019 ‘Corporate Champion’ by the
us as we reimagine and reinvent the built
Women’s Forum of New York for its strong
environment for more effective health
representation of women on our Board.
care delivery.
Diversity, however, also extends to skill
set. Our Board brings vertical expertise in
areas such as health care, real estate, health
insurance and hospitality. This diversity of
skill and perspective challenges me and my
management team every day.
In Conclusion
By delivering a built environment that
improves the social determinants of health
for aging and other at-risk populations,
Welltower is executing a long-term plan
that addresses one of today’s most pressing
societal issues. We’re able to do this
Sincerely,
Thomas J. DeRosa
Chairman and CEO, Welltower Inc.
*Please see Non-GAAP Reconciliations
Non-GAAP
Reconciliations
Non-GAAP Financial Measures
Welltower believes that net income and net income attributable to common shareholders (“NICS”), as defined by
U.S. GAAP, are the most appropriate earnings measurements. However, Welltower considers funds from operations
(“FFO”), net operating income (“NOI”) and same store NOI (“SSNOI”) to be useful supplemental measures of its
operating performance. These supplemental measures are disclosed on a Welltower pro rata ownership basis. Pro rata
amounts are derived by reducing consolidated amounts for minority partners’ noncontrolling ownership interests and
adding Welltower’s minority ownership share of unconsolidated amounts. Welltower does not control unconsolidated
investments. While Welltower considers pro rata disclosures useful, they may not accurately depict the legal and
economic implications of Welltower’s joint venture arrangements and should be used with caution.
Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real
estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate
values have historically risen or fallen with market conditions, many industry investors and analysts have considered
presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In
response, the National Association of Real Estate Investment Trusts (“NAREIT”) created FFO as a supplemental measure
of operating performance for REITs that excludes historical cost depreciation from net income. FFO attributable to
common stockholders, as defined by NAREIT, means net income attributable to common stockholders, computed in
accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairments of depreciable assets,
plus real estate depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling
interests. Normalized FFO attributable to common stockholders represents FFO attributable to common stockholders
adjusted for certain items detailed in the following reconciliations and described in our earnings press releases for
the relevant period ends. Welltower believes that normalized FFO attributable to common stockholders is a useful
supplemental measure of operating performance because investors and equity analysts may use this measure to
compare the operating performance of the company between periods or as compared to other REITs or other
companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable
items.
Welltower defines NOI as total revenues, including tenant reimbursements, less property operating expenses. Property
operating expenses represent costs associated with managing, maintaining and servicing our properties. These
expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to
operators, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and
administrative expenses represent costs unrelated to property operations. These expenses include, but are not limited
to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. SSNOI is
used to evaluate the operating performance of Welltower’s properties using a consistent population which controls for
changes in the composition of our portfolio. As used herein, same store is generally defined as those revenue-generating
properties in the portfolio for the relevant year-over-year reporting periods. Land parcels, loans and sub-leases, as well
as any properties acquired, developed/redeveloped (including major refurbishments where 20% or more of units are
simultaneously taken out of commission for 30 days or more), sold or classified as held for sale during that period are
excluded from the same store amounts. Properties undergoing operator transitions and/or segment transitions (except
Seniors Housing Triple-net to Seniors Housing Operating with the same operator) are also excluded from the same
store amounts. Normalizers include adjustments that in management’s opinion are appropriate in considering SSNOI, a
supplemental, non-GAAP performance measure. None of these adjustments, which may increase or decrease SSNOI, are
reflected in Welltower’s financial statements prepared in accordance with U.S. GAAP. Significant normalizers (defined
as any that individually exceeds 0.50% of SSNOI growth per property type) are separately disclosed and explained
in Welltower’s respective Supplements. Welltower believes NOI and SSNOI provide investors relevant and useful
information because they measure the operating performance of its properties at the property level on an unleveraged
basis. Welltower use NOI and SSNOI to make decisions about resource allocations and to assess the property level
performance of its properties.
Welltower’s supplemental reporting measures and similarly entitled financial measures are widely used by investors,
equity and debt analysts, and rating agencies in the valuation, comparison, rating and investment recommendations of
companies. Welltower’s management uses these financial measures to facilitate internal and external comparisons to its
historical operating results and in making operating decisions. Additionally, these measures are utilized by the Board to
evaluate management. None of Welltower’s supplemental measures represent net income or cash flow provided from
operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures
of profitability or liquidity. Finally, the supplemental measures, as defined by us, may not be comparable to similarly
entitled items reported by other REITs or other companies.
Please see the tables below for reconciliations of supplemental reporting measures referenced in this document.
SSNOI Reconciliations
(1) Represents Welltower’s interests in joint ventures where Welltower is the minority partner.
(2) Represents minority partners’ interests in joint ventures where Welltower is the majority partner.
(3) Includes adjustments to reflect consistent property ownership percentages and foreign currency exchange rates for properties in the U.K. and Canada.
(4) Includes other adjustments as described in the respective Supplements.
FFO Reconciliations
(1) Represents noncontrolling interests’ share of net FFO adjustments
(2) Represents Welltower’s share of net FFO adjustments from unconsolidated entities.
Form 10-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number 1-8923
WELLTOWER INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
4500 Dorr Street, Toledo, Ohio
(Address of principal executive offices)
34-1096634
(I.R.S. Employer
Identification No.)
43615
(Zip Code)
(419) 247-2800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Trading Symbol(s)
Name of Each Exchange on Which Registered
WELL
WELL28
WELL34
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Title of Each Class
Common Stock, $1.00 par value
4.800% Notes due 2028
4.500% Notes due 2034
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes Í
No ‘
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ‘
No Í
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes Í
No ‘
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes Í
No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Í
Accelerated filer ‘
Non-accelerated filer ‘
Smaller reporting company ‘
Emerging growth company ‘
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘
No Í
The aggregate market value of the shares of voting common stock held by non-affiliates of the registrant, computed by reference to the closing
sales price of such shares on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second fiscal
quarter was $32,986,689,000.
As of January 31, 2020, the registrant had 410,331,441 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for the annual stockholders’ meeting to be held April 30, 2020, are incorporated by
reference into Part III.
WELLTOWER INC. AND SUBSIDIARIES
2019 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions and Director Independence . . . . . . . . . . . . . . . . .
Item 14. Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV
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Item 1.
Business
General
PART I
Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the
transformation of health care infrastructure. The company invests with leading seniors housing operators, post-
acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care
delivery models and improve people’s wellness and overall health care experience. Welltower™, a real estate
investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United
States (“U.S.”), Canada and the United Kingdom (“U.K.”), consisting of seniors housing, post-acute
communities and outpatient medical properties. More information is available on the Internet at
www.welltower.com. The information on our website is not incorporated by reference in this Annual Report on
Form 10-K, and our web address is included as an inactive textual reference only.
Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay
consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders
as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest
across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by
property type, relationship and geographic location.
References herein to “we,” “us,” “our” or the “company” refer to Welltower Inc., a Delaware corporation,
and its subsidiaries unless specifically noted otherwise.
Portfolio of Properties
Please see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of
Operation — Executive Summary — Company Overview” for a table that summarizes our portfolio as of
December 31, 2019.
Property Types
We invest in seniors housing and health care real estate and evaluate our business through three reportable
segments: Seniors Housing Operating, Triple-net and Outpatient Medical. For additional information regarding
our segments, please see Note 18 to our consolidated financial statements. The accounting policies of the
segments are the same as those described in the summary of significant accounting policies in Note 2 to our
consolidated financial statements. The following is a summary of our various property types.
Seniors Housing Operating
Our seniors housing operating properties include seniors apartments, independent living and independent
supportive living, continuing care retirement communities, assisted living, Alzheimer’s/dementia care and
include care homes with or without nursing (U.K.), which assist with activities of daily living that preserve a
person’s mobility and social systems to promote cognitive engagement. Our properties include stand-alone
properties that provide one level of service, combination properties that provide multiple levels of service and
communities or campuses that provide a wide range of services. Properties are primarily held in joint venture
entities with operating partners. We utilize the structure authorized by the REIT Investment Diversification and
Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the
Internal Revenue Code authorizing the RIDEA structure were enacted as part of the Housing and Economic
Recovery Act of 2008).
Seniors Apartments Seniors apartments refer to age-restricted multi-unit housing with self-contained
living units for older adults, usually aged 55+ who are able to care for themselves. Seniors apartments generally
do not offer other additional services such as meals or transportation.
Independent Living and Independent Supportive Living (Canada)
Independent living and independent
supportive living refers to age-restricted, multifamily properties with central dining that provide residents access
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to meals and other services such as housekeeping, linen service, transportation and social and recreational
activities.
Continuing Care Retirement Communities Continuing care retirement communities typically include a
combination of detached homes and properties offering independent living, assisted living and/or long-term/post-
acute care services on one campus. These communities appeal to residents because there is no need to relocate
when health and medical needs change. Resident payment plans vary, but can include entrance fees,
condominium fees and rental fees. Many of these communities also charge monthly maintenance fees in
exchange for a living unit, meals and some health services.
Assisted Living Assisted living refers to state-regulated rental properties that provide independent living
services, but also provide supportive care from trained employees to residents who require assistance with
activities of daily living, including, but not limited to, management of medications, bathing, dressing, toileting,
ambulating and eating.
Alzheimer’s/Dementia Care Certain properties offering assisted living may include state-licensed settings
that specialize in caring for those afflicted with Alzheimer’s disease and/or other types of dementia.
Care Homes with or without Nursing (U.K.) Care homes without nursing, regulated by the Care Quality
Commission (“CQC”), are rental properties that provide essentially the same services as U.S. assisted living.
Care homes with nursing, also regulated by the CQC, are licensed daily rate or rental properties where most
individuals require 24-hour nursing and/or medical care. Generally, these properties are licensed for various
national and local reimbursement programs. Unlike the U.S., care homes with nursing in the U.K. generally do
not provide post-acute care.
Our Seniors Housing Operating segment accounted for 67%, 69% and 65% of total revenues for the years
ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, we had relationships with 25
operators to manage our seniors housing operating properties. In each instance, our partner provides management
services to the properties pursuant to an incentive-based management contract. We rely on our partners to
effectively and efficiently manage these properties. For the year ended December 31, 2019, our relationship with
Sunrise Senior Living accounted for approximately 35% of our Seniors Housing Operating segment revenues and
24% of our total revenues.
Triple-net
Our triple-net properties offer services including independent living and independent supportive living
(Canada), assisted living, continuing care retirement communities, Alzheimer’s/dementia care and care homes
with or without nursing (U.K.) described above, as well as long-term/post-acute care. We invest primarily
through acquisitions, development and joint venture partnerships. Our properties are primarily leased to operators
under long-term, triple-net master leases that obligate the tenant to pay all operating costs, utilities, real estate
taxes, insurance, building repairs, maintenance costs and all obligations under certain ground leases. We are not
involved in property management. Our properties include stand-alone properties that provide one level of service,
combination facilities that provide multiple levels of service, and communities or campuses that provide a wide
range of services.
Long-Term/Post-Acute Care Facilities Post-acute care is at the leading edge of reducing health care costs
while improving quality. These high-impact centers help patients recover from illness or surgery with the goals
of getting the patient home and healed faster and reducing hospital readmission rates. Our long-term/post-acute
care properties generally offer skilled nursing/post-acute care, inpatient rehabilitation and long-term acute care
services. Skilled nursing/post-acute care refers to licensed daily rate or rental properties where most individuals
require 24-hour nursing and/or medical care. Generally, these properties are licensed for Medicaid and/or
Medicare reimbursement in the U.S. or provincial reimbursement in Canada. All properties offer some level of
rehabilitation services. Some properties focus on higher acuity patients and offer rehabilitation units specializing
in cardiac, orthopedic, dialysis, neurological or pulmonary rehabilitation. Inpatient rehabilitation properties
provide intensive inpatient services after illness, injury or surgery to patients able to tolerate and benefit from
three hours of rehabilitation hours per day. Long-term acute care properties provide inpatient services for patients
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with complex medical conditions that require more intensive care, monitoring or emergency support than is
available in most skilled nursing/post-acute care properties.
Our Triple-net segment accounted for 19%, 19% and 22% of total revenues for the years ended
December 31, 2019, 2018 and 2017, respectively. For the year ended December 31, 2019, our revenues related to
our relationship with ProMedica Health System (“ProMedica”) accounted for approximately 22% of our
Triple-net segment revenues and 4% of total revenues. As of December 31, 2019, our relationship with
ProMedica was comprised of a master lease for 218 properties owned by a joint venture landlord of which we
own 80%. In addition to rent, the master lease requires ProMedica to pay all operating costs, utilities, real estate
taxes, insurance, building repairs, maintenance costs and all obligations under certain ground leases. All
obligations under the master lease have been guaranteed by ProMedica. For the year ended December 31, 2019,
our revenues related to our relationship with Genesis HealthCare (“Genesis”) accounted for approximately 14%
of our Triple-net segment revenues and 3% of our total revenues. As of December 31, 2019, our relationship with
Genesis was comprised of a master lease for 54 properties owned 100% by us, six loans with a net balance of
$296 million, approximately 9.5 million shares of GEN Series A common stock (representing approximately 9%
of total GEN common stock) and a 25% ownership stake in an unconsolidated joint venture that includes a
master lease for 28 properties operated by Genesis. In addition to rent, the master lease requires Genesis to pay
all operating costs, utilities, real estate taxes, insurance, building repairs, maintenance costs and all obligations
under certain ground leases. All obligations under the master lease have been guaranteed by FC-GEN Operations
Investment, LLC, a subsidiary of Genesis.
Outpatient Medical
Outpatient Medical Buildings Demand for outpatient medical services is growing as more procedures are
performed safely and efficiently outside the hospital setting. State-of-the-art outpatient centers are needed in
accessible, consumer-friendly locations. Our portfolio of outpatient medical buildings is an integral part of
creating health care provider connectivity in local markets and generally include physician offices, ambulatory
surgery centers, diagnostic facilities, outpatient services and/or labs. Approximately 94% of our outpatient
medical building portfolio is affiliated with health systems (buildings directly on hospital campuses or with
tenants that are satellite locations for the health system and its physicians). We typically lease our outpatient
medical buildings to multiple tenants and provide varying levels of property management. Our Outpatient
Medical segment accounted for 13%, 12% and 13% of total revenues for each of the years ended December 31,
2019, 2018 and 2017, respectively. No single tenant exceeds 20% of segment revenues.
Investments
Providing high-quality and affordable health care to an aging global population requires vast investments
and infrastructure development. We invest in seniors housing and health care real estate primarily through
acquisitions, developments and joint venture partnerships. For additional information regarding acquisition and
development activity, please see Note 3 to our consolidated financial statements. Our portfolio creates
opportunities to connect partners across the continuum of care and drive efficiency. We seek to diversify our
investment portfolio by property type, relationship and geographic location. In determining whether to invest in a
property, we focus on the following: (1) the experience of the obligor’s/partner’s management team; (2) the
historical and projected financial and operational performance of the property; (3) the credit of the obligor/
partner; (4) the security for any lease or loan; (5) the real estate attributes of the building and its location; (6) the
capital committed to the property by the obligor/partner; and (7) the operating fundamentals of the applicable
industry.
We monitor our investments through a variety of methods determined by the type of property. Our asset
management process for seniors housing properties generally includes review of monthly financial statements
and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and
review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our
internal property management division manages and monitors the outpatient medical portfolio with a
comprehensive process including review of, among other things, tenant relations, lease expirations, the mix of
health service providers, hospital/health system relationships, property performance, capital improvement needs,
and market conditions.
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Investment Types
Real Property Our properties are primarily comprised of land, buildings, improvements and related
rights. Our triple-net properties are generally leased to operators under long-term operating leases. The leases
generally have a fixed contractual term of 12 to 15 years and contain one or more five to 15-year renewal
options. Certain of our leases also contain purchase options, a portion of which could result in the disposition of
properties for less than full market value if the options were to be exercised. Most of our rents are received under
triple-net leases requiring the operator to pay rent and all additional charges incurred in the operation of the
leased property. The tenants are required to repair, rebuild and maintain the leased properties. Substantially all
these operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are
generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment.
Rental income related to leases with contingent rental escalators is generally recorded based on the contractual
cash rental payments due for the period.
At December 31, 2019, approximately 95% of our triple-net properties were subject to master leases. A
master lease is a lease of multiple properties to one tenant entity under a single lease agreement. From time to
time, we may acquire additional properties that are then leased to the tenant under the master lease. The tenant is
required to make one monthly payment that represents rent on all the properties that are subject to the master
lease. Typically, the master lease tenant can exercise its right to purchase the properties or to renew the master
lease only with respect to all leased properties at the same time. We believe this bundling feature benefits us
because the tenant cannot limit the purchase or renewal to better performing properties and terminate the leasing
arrangement with respect to poorer performing properties. This spreads our risk among the entire group of
properties within the master lease. The bundling feature should provide a similar advantage to us if the master
lease tenant is in bankruptcy. Subject to certain restrictions, a debtor in bankruptcy has the right to assume or
reject its unexpired leases and executory contracts. In the context of integrated master leases such as ours, our
tenants in bankruptcy would be required to assume or reject the master lease as a whole, rather than deciding on a
property by property basis.
Our outpatient medical portfolio is primarily self-managed and consists principally of multi-tenant
properties leased to health care providers. Our leases typically include increasers and some form of operating
expense reimbursement by the tenant. As of December 31, 2019, 77% of our portfolio included leases with full
(modified gross) and 3% with no expense
pass through, 20% with a partial expense reimbursement
reimbursement (gross). Our outpatient medical leases are non-cancellable operating leases that have a weighted-
average remaining term of seven years at December 31, 2019 and are often credit enhanced by security deposits,
guarantees and/or letters of credit.
Construction We provide for the construction of properties for tenants primarily as part of long-term
operating leases. We capitalize certain interest costs associated with funds used for the construction of properties
owned by us. The amount capitalized is based upon the amount advanced during the construction period using
the rate of interest that approximates our company-wide cost of financing. Our interest expense is reduced by the
amount capitalized. The construction period commences upon funding and terminates upon the earlier of the
completion of the applicable property or the end of a specified period. During the construction period, we
advance funds to the tenants in accordance with agreed upon terms and conditions which require, among other
things, periodic site visits by a company representative. During the construction period, we generally require an
additional credit enhancement in the form of payment and performance bonds and/or completion guarantees. At
December 31, 2019, we had outstanding construction investments of $507,931,000 and were committed to
provide additional funds of approximately $446,633,000 to complete construction for investment properties. We
also provide for construction loans which, depending on the terms and conditions, could be treated as loans, real
property or investments in unconsolidated entities.
Loans Our real estate loans are typically structured to provide us with interest
income, principal
amortization and transaction fees. Real estate loans consist of mortgage loans and other real estate loans which
are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment
of the partnership interest in the related properties, corporate guarantees and/or personal guarantees. Non real
estate loans are generally corporate loans with no real estate backing. At December 31, 2019, we had outstanding
5
loans, net of allowances, of $607,236,000 with an interest yield of approximately 8.0% per annum. Our yield on
loans depends upon a number of factors, including the stated interest rate, average principal amount outstanding
during the term of the loan and any interest rate adjustments. The loans outstanding at December 31, 2019 are
generally subject to one to 15-year terms with principal amortization schedules and/or balloon payments of the
outstanding principal balances at the end of the term.
Investments in Unconsolidated Entities
Investments in entities that we do not consolidate but for which we
can exercise significant influence over operating and financial policies are reported under the equity method of
accounting. Our investments in unconsolidated entities generally represent interests ranging from 10% to 50% in
real estate assets. Under the equity method of accounting, our share of the investee’s earnings or losses is
included in our consolidated results of operations. The initial carrying value of investments in unconsolidated
entities is based on the amount paid to purchase the entity interest inclusive of transaction costs. We evaluate our
equity method investments for impairment based upon a comparison of the estimated fair value of the equity
method investment to its carrying value. When we determine a decline in the estimated fair value of such an
investment below its carrying value is other-than-temporary, an impairment is recorded.
In Substance Real Estate Additionally, we provide loans to third parties for the acquisition, development
and construction of real estate. Under these arrangements, it is possible that we will participate in the expected
residual profits of the project through the sale, refinancing or acquisition of the property. We evaluate the
characteristics of each arrangement, including its risks and rewards, to determine whether they are more similar
to those associated with a loan or an investment in real estate. Arrangements with characteristics implying real
estate joint ventures are treated as in substance real estate investments, accounted for using the equity method,
and are presented as investments in unconsolidated entities. We have made loans totaling $165,193,000 related to
seven properties as of December 31, 2019, which are classified as in substance real estate investments.
Principles of Consolidation
The consolidated financial statements are in conformity with U.S general accepted accounting principles
(“U.S. GAAP”) and include the accounts of our wholly-owned subsidiaries and joint venture entities that we
control, through voting rights or other means. All material intercompany transactions and balances have been
eliminated in consolidation.
At inception of joint venture transactions, we identify entities for which control is achieved through means
other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the
primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors
as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to
finance that entity’s activities without additional subordinated financial support. We consolidate investments in
VIEs when we are determined to be the primary beneficiary. Accounting Standards Codification Topic 810,
“Consolidations”, requires enterprises to perform a qualitative approach to determining whether or not a VIE will
need to be consolidated. This evaluation is based on an enterprise’s ability to direct and influence the activities of
a VIE that most significantly impact that entity’s economic performance.
For investments in joint ventures, U.S. GAAP may preclude consolidation by the sole general partner in
certain circumstances based on the type of rights held by the limited partner(s). We assess the limited partners’
rights and their impact on our consolidation conclusions, and we reassess if there is a change to the terms or in
the exercisability of the rights of the limited partners, the sole general partner increases or decreases its
ownership of limited partnership interests, or there is an increase or decrease in the number of outstanding
limited partnership interests. We similarly evaluate the rights of managing members of limited liability
companies.
Borrowing Policies
We utilize a combination of debt and equity to fund investments. Generally, we intend to issue unsecured,
fixed-rate public debt with long-term maturities to approximate the maturities on our triple-net leases and
investment strategy. For short-term purposes, we may borrow on our primary unsecured credit facility or issue
commercial paper. We replace these borrowings with long-term capital such as senior unsecured notes or
6
common stock. When terms are deemed favorable, we may invest in properties subject to existing mortgage
indebtedness. In addition, we may obtain secured financing for unleveraged properties in which we have invested
or may refinance properties acquired on a leveraged basis. In certain agreements with our lenders, we are subject
to restrictions with respect to secured and unsecured indebtedness.
Competition
We compete with other real estate investment trusts, real estate partnerships, private equity and hedge fund
investors, banks, insurance companies, finance/investment companies, government-sponsored agencies, taxable
and tax-exempt bond funds, health care operators, developers and other investors in the acquisition, development,
leasing and financing of health care and seniors housing properties. We compete for investments based on a
number of factors including relationships, certainty of execution, investment structures and underwriting criteria.
Our ability to successfully compete is impacted by economic and demographic trends, availability of acceptable
investment opportunities, our ability to negotiate beneficial investment terms, availability and cost of capital,
construction and renovation costs and applicable laws and regulations.
The operators/tenants of our properties compete with properties that provide comparable services in the
local markets. Operators/tenants compete for patients and residents based on a number of factors including
quality of care, reputation, physical appearance of properties, location, services offered, family preferences,
physicians, staff, and price. We also face competition from other health care facilities for tenants, such as
physicians and other health care providers that provide comparable facilities and services.
For additional information on the risks associated with our business, please see “Item 1A — Risk Factors”
of this Annual Report on Form 10-K.
Environmental, Social and Governance
Environmental, Social and Governance (“ESG”) Approach Our corporate
responsibility and
sustainability strategy is focused on adopting the best ESG practices across our business and we have been
recognized for our leadership in this space, including over the past year:
• Named to Fortune’s World’s Most Admired Companies List;
• Named to top quintile of Newsweek’s inaugural America’s Most Responsible Companies list;
• Named to Corporate Responsibility Magazine’s 20th Annual 100 Best Corporate Citizens ranking;
• Named to Dow Jones Sustainability World Index for the second consecutive year and to the Dow Jones
Sustainability North American Index for the fourth consecutive year;
• Named Energy Star Partner of the Year for the first time;
• Designated as GRESB Green Star for sustainability performance for the fifth consecutive year;
• Named to the Bloomberg Gender-Equality Index;
• Achieved ISS-ESG Prime status; and
• Garnered highest environmental and social quality score ratings by ISS.
Environmental We strive to reduce our environmental impact by increasing energy and water efficiency,
reducing greenhouse gas emissions, investing in projects that reduce energy and water consumption that meet our
rate of return thresholds and focusing on the environmental aspects within our supply chain. We have
comprehensive employee, tenant and vendor engagement programs in place focused on operational strategies to
drive energy and water efficiency. In our medical office building portfolio, we have transitioned to a standard
green lease, which aligns tenant and landlord interests on energy and water efficiency, and as of the end of 2018
have executed over 405,000 square feet of green leases. We seek to increase our consumption of green and
renewable energy where possible and have consumed over 32,000 MWh of renewable electricity, an increase of
over 6,000 MWh versus the previous year. We are actively pursuing LEED or BREEAM certification for over
200,000 square feet of our new developments and have 12 BREEAM, 78 ENERGY STAR, 25 IREM, 12 LEED
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and 63 Welltower Green Arrow property certifications across our portfolio. Additionally, 100% of our control
boundary, comprised of our managed outpatient medical portfolio, is benchmarked in EPA ENERGY STAR
Portfolio Manager and we are constantly working to add to that number.
Year(1)
2018 . . . . . . . . . . . .
2017 . . . . . . . . . . . .
2016 . . . . . . . . . . . .
Year(1)
Total energy
consumption in control
boundary (MWh)(2)
Control boundary energy
use intensity
(kWH/square feet)
Like-for-like change in
energy consumption
within control
boundary(3)
Percent renewable energy
consumed within control
boundary(4)
300,094
302,001
360,342
26.20
26.37
22.82
(1)%
n/a
n/a
10.82%
8.76%
n/a
Control boundary water
consumption (kgal)(2)
Water use intensity
(gallons/square feet)
Like-for-like change in water
consumption within control
boundary(3)
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
293,609
303,616
337,081
25.6
26.5
26.4
(3.40)%
0.38%
n/a
(1) Full 2019 calendar year energy and water data is not available until March 2020. 2018 is the most recent year for which fill energy and
water is available and externally verified.
(2) Our control boundary refers to its managed medical office building portfolio. Energy and water data reported is reflective of control
boundary energy and water consumption.
(3) Like-for-like change in energy consumption within control boundary is not available prior to 2017 due to a change in energy
consumption methodology. 2017 represents the first year where tenant data is included in our sustainability performance metrics.
Like-for-like change in water consumption within control boundary is not available prior to 2017 due to lack of available data.
(4) Renewable energy consumption data within control boundary is not available prior to 2017 due to lack of data. The data represent on-site
and off-site renewable energy generated and consumed by properties within our control boundary.
We understand that as we continue to make our operations and buildings more sustainable, we also have a
responsibility to look towards our supply chain and the effect of our purchasing decisions. Welltower created a
Supplier Code of Conduct that is generally integrated into our standard contract to help ensure our suppliers
abide by Welltower’s ethical standards. We also developed a Supplier Sustainability Survey that was delivered to
our highest spend national accounts. Additionally, we partner with suppliers that offer take back programs for
their products, look for the ENERGY STAR label when purchasing eligible items, seek to purchase office supply
products that contain recycled content and purchase paper products that are either Forest Stewardship Council or
Sustainable forestry initiative certified.
Social We have a number of social initiatives in place that are focused on fostering a more diverse
workforce, giving back to our communities and ensuring the health and wellbeing of our employees, tenants and
residents. Over the past five years, since we began reporting the impact of our charitable contributions through
programs such as the Welltower Foundation, we have donated over $40 million to charitable initiatives related to
aging, health care, education and the arts.
We value and are committed to our employees. In addition to enacting progressive recruitment and
development programs, we have reinforced our already strong commitment to diversity and inclusion with the
creation of a Diversity Council, which together with other employee initiatives, supports our efforts to compete
for and foster talent in a changing workforce.
Governance We announced changes and appointments to our Board of Directors, resulting in 75% of our
independent director positions being held by minorities and women as of December 31, 2019. We continue to
to transparency and published our 7th consecutive Annual Corporate Social
bolster our commitment
Responsibility Report in accordance with Global Reporting Initiative Standards. Additionally, we also improved
our already high Dow Jones Sustainability Index, GRESB, ISS and ISS-ESG scores through enhanced tracking
and reporting.
Employees As of January 31, 2020, we had 443 employees.
Credit Concentrations Please see Note 9 to our consolidated financial statements.
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Geographic Concentrations Please see “Item 2 — Properties” below and Note 18 to our consolidated financial
statements.
Certain Government Regulations
United States
Health Law Matters — Generally
Typically, operators of seniors housing facilities do not receive significant funding from government
programs and are largely subject to state laws, as opposed to federal laws. Operators of long-term/post-acute care
facilities and hospitals do receive significant funding from government programs, and these facilities are subject
to extensive regulation, including federal and state laws covering the type and quality of medical and/or nursing
care provided, ancillary services (e.g., respiratory, occupational, physical and infusion therapies), qualifications
the adequacy of the physical plant and equipment,
of the administrative personnel and nursing staff,
reimbursement and rate setting and operating policies. In addition, as described below, operators of these
facilities are subject to extensive laws and regulations pertaining to health care fraud and abuse, including, but
not limited to, the federal Anti-Kickback Statute (“AKS”), the federal Stark Law (“Stark Law”), and the federal
False Claims Act (“FCA”), as well as comparable state laws. Hospitals, physician group practice clinics, and
other health care providers that operate in our portfolio are subject to extensive federal, state, and local licensure,
registration, certification, and inspection laws, regulations, and industry standards, as well as other conditions of
participation in federal and state government programs such as Medicare and Medicaid. Further, operators of
long-term care facilities are required to have in place compliance and ethics programs that meet the requirements
of federal laws and regulations. Our tenants’ failure to comply with applicable laws and regulations could result
in, among other things:
imposition of fines; suspension,
decertification, or exclusion from federal and state health care programs; loss of license; or closure of the
facility. See risk factors “The requirements of, or changes to, governmental reimbursement programs, such as
Medicare or Medicaid, could have a material adverse effect on our obligors’ liquidity, financial condition and
results of operations, which could adversely affect our obligors’ ability to meet their obligations to us” and “Our
operators’ or tenants’ failure to comply with federal, state, local, and industry-regulated licensure, certification
and inspection laws, regulations, and standards could adversely affect such operators’ or tenants’ operations,
which could adversely affect our operators’ and tenants’ ability to meet their obligations to us” in “Item 1A —
Risk Factors” below. Moreover, in light of certain arrangements that Welltower may pursue with healthcare
entities who are directly subject to laws and regulations pertaining to health care fraud and abuse, and given that
certain of our arrangements are structured under the provisions of the REIT Investment Diversification and
Empowerment Act of 2007 (“RIDEA”), certain health care fraud and abuse laws and data privacy laws could
apply directly to Welltower. See risk factor “We assume operational and legal risks with respect to our properties
managed in RIDEA structures that could have a material adverse effect on our business results of operations, and
financial condition” in “Item 1A — Risk Factors” below.
loss of accreditation; denial of reimbursement;
Licensing and Certification
The primary regulations that affect
long-term and post-acute care facilities are state licensing and
registration laws. For example, certain health care facilities are subject to a variety of licensure and certificate of
need (“CON”) laws and regulations. Where applicable, CON laws generally require, among other requirements,
that a facility demonstrate the need for (1) constructing a new facility, (2) adding beds or expanding an existing
facility, (3) investing in major capital equipment or adding new services, (4) changing the ownership or control
of an existing licensed facility or (5) terminating services that have been previously approved through the CON
process. Certain state CON laws and regulations may restrict the ability of operators to add new properties or
expand an existing facility’s size or services. In addition, CON laws may constrain the ability of an operator to
transfer responsibility for operating a particular facility to a new operator.
With respect to licensure, generally our long-term/post-acute care facilities are required to be licensed and
certified for participation in Medicare, Medicaid and other federal and state health care programs. The failure of
our operators to maintain or renew any required license or regulatory approval as well as the failure of our
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operators to correct serious deficiencies identified in a compliance survey could require those operators to
discontinue operations at a property. In addition, if a property is found to be out of compliance with Medicare,
Medicaid or other federal or state health care program conditions of participation, the property operator may be
excluded from participating in those government health care programs.
Reimbursement
The reimbursement methodologies applied to health care facilities continue to evolve. Federal and state
authorities have considered and implemented and may continue seeking to implement new or modified
reimbursement methodologies, including value-based reimbursement methodologies that may negatively impact
health care property operations. Likewise,
third-party payors may continue imposing greater controls on
operators, including through changes in reimbursement rates and fee structures. The impact of any such changes,
if implemented, may result in a material adverse effect on our portfolio. No assurance can be given that current
revenue sources or levels will be maintained. Accordingly, there can be no assurance that payments under a
government health care program are currently, or will be in the future, sufficient to fully reimburse the property
operators for their operating and capital expenses.
•
•
Seniors Housing Facilities The majority of the revenues received by the operators of U.S. seniors
housing facilities are from private pay sources. The remaining revenue source is primarily Medicaid
provided under state waiver programs for home and community based care. There can be no guarantee
that a state Medicaid program operating pursuant to a waiver will be able to maintain its waiver
status. Rates paid by self-pay residents are set by the facilities and are determined by local market
conditions and operating costs. Generally, facilities receive a higher payment per day for a private pay
resident than for a Medicaid beneficiary who requires a comparable level of care. The level of
Medicaid reimbursement varies from state to state. Thus, the revenues generated by operators of our
assisted living facilities may be adversely affected by payor mix, acuity level, changes in Medicaid
eligibility and reimbursement levels.
Long-Term/Post-Acute Care Facilities The majority of the revenues received by the operators of
these facilities are from the Medicare and Medicaid programs, with the balance representing
reimbursement payments from private payors. Consequently, changes in federal or state reimbursement
policies may adversely affect an operator’s ability to cover its expenses, including our rent or debt
service. Long-term/post-acute care facilities are subject to periodic pre- and post-payment reviews and
other audits by federal and state authorities. A review or audit of a property operator’s claims could
result in recoupments, denials or delay of payments in the future. Due to the significant judgments and
estimates inherent in payor settlement accounting, no assurance can be given as to the adequacy of any
reserves maintained by our property operators to cover potential adjustments to reimbursements or to
cover settlements made to payors.
• Medicare Reimbursement Generally,
long-term/post-acute care facilities are reimbursed by
Medicare under prospective payment systems, which generally provide reimbursement based upon
a predetermined fixed amount per episode of care and are updated by CMS, an agency of the
Department of Health and Human Services (“HHS”) annually. There is a risk under these payment
systems that costs will exceed the fixed payments, or that payments may be set below the costs to
provide certain items and services. In addition, the HHS Office of Inspector General has released
recommendations to address SNF billing practices and Medicare payment rates. If followed, these
recommendations regarding SNF payment reform may impact our tenants and operators.
• Medicaid Reimbursement Many states reimburse SNFs using fixed daily rates, which are applied
prospectively based on patient acuity and the historical costs incurred in providing patient care. In
most states, Medicaid does not fully reimburse the cost of providing services. Certain states are
attempting to slow the rate of Medicaid growth by freezing rates or restricting eligibility and
benefits. In addition, Medicaid reimbursement rates may decline if state revenues in a particular
state are not sufficient to fund budgeted expenditures.
• Medicare Reimbursement
for Physicians, Hospital Outpatient Departments (“HOPDs”), and
Ambulatory Surgical Centers (“ASCs”) Changes in reimbursement to physicians, HOPDs and ASCs
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may further affect our tenants and operators. Generally, Medicare reimburses physicians under the
Physician Fee Schedule, while HOPDs and ASCs are reimbursed under prospective payment
systems. The Physician Fee Schedule and the HOPD and ASC prospective payment systems are
updated annually by CMS. These annual Medicare payment regulations have resulted in lower net pay
the Medicare and
increases than providers of those services have often expected. In addition,
Children’s Health Insurance Program Reauthorization Act of 2015 (“MACRA”) includes payment
reductions for providers who do not meet government quality standards. The implementation of
pay-for-quality models like those required under MACRA is expected to produce funding disparities
that could adversely impact some provider tenants in outpatient medical buildings and other health care
properties. Changes in Medicare Advantage plan payments may also indirectly affect our operators and
tenants that contract with Medicare Advantage plans.
• Health Reform Laws The Patient Protection and Affordable Care Act and the Health Care and
Education Reconciliation Act of 2010 (collectively, the “Health Reform Laws”) dramatically altered
how health care is delivered and reimbursed in the U.S. and contained various provisions, including
Medicaid expansion and the establishment of Health Insurance Exchanges (“HIEs”) providing
subsidized health insurance,
that may directly impact us or the operators and tenants of our
properties. The status of the Health Reform Laws may be subject to change as a result of political,
legislative, regulatory and administrative developments and judicial proceedings. While legislative
attempts to completely repeal the Health Reform Laws have been unsuccessful to date, there have been
multiple attempts to repeal or amend the Health Reform Laws through legislative action and legal
challenges. Since taking office, President Trump and the current U.S. Congress have sought to modify,
repeal or otherwise invalidate all or portions of the Health Reform Laws. For example, in December
2017, the U.S. Congress passed the Tax Cuts and Jobs Act, which included a provision that eliminates
the penalty under the Health Reform Laws’ individual mandate, effective in 2019, and could impact the
future state of the HIEs established by the Health Reform Laws. In December 2018, a federal district
court in Texas ruled the individual mandate was unconstitutional and could not be severed from the
Health Reform Laws. As a result, the court ruled the remaining provisions of the Health Reform Laws
were also invalid, though the court declined to issue a preliminary injunction with respect to the Health
Reform Laws. In December 2019, the Fifth Circuit Court of Appeals agreed that the individual
mandate was unconstitutional, but remanded the case back to the district court to reassess how much of
the Health Reform Laws would be damaged without the individual mandate provision, and if the
individual mandate could indeed be severed. In January 2020, 21 state Attorney Generals urged the
Supreme Court of the United States to decide whether or not the Health Reform Laws should be struck
down as unconstitutional, claiming that the Fifth Circuit erroneously remanded the case to the Texas
district court. The House of Representatives filed a similar petition and motion to expedite. This
litigation is still ongoing, but places great uncertainty upon the longevity and nature of the Health
Reform Laws moving forward. There is still uncertainty with respect to the additional impact President
Trump’s Administration and the U.S. Congress may have, if any, and any changes will likely take time
to unfold, and could have an impact on coverage and reimbursement for health care items and services
covered by plans that were authorized by the Health Reform Laws. We cannot predict whether the
existing Health Reform Laws, or future health care reform legislation or regulatory changes, will have
a material impact on our operators’ or tenants’ property or business.
Fraud & Abuse Enforcement
Long-term/post-acute care facilities (and seniors housing facilities that receive Medicaid payments) are
subject to federal, state, and local laws, regulations, and applicable guidance that govern the operations and
financial and other arrangements that may be entered into by health care providers. Certain of these laws, such as
the AKS and Stark Law, prohibit direct or indirect payments of any kind for the purpose of inducing or
encouraging the referral of patients for medical products or services reimbursable by government health care
programs. Other government health program laws require providers to furnish only medically necessary services
and submit to the government valid and accurate statements for each service. Our operators and tenants that
receive payments from federal health care programs, such as Medicare and Medicaid, are subject to substantial
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financial penalties under the Civil Monetary Penalties Act and the FCA upon a finding of noncompliance with
such laws. In addition, states may also have separate false claims acts, which, among other things, generally
prohibit health care providers from filing false claims or making false statements to receive payments. Federal
and state FCAs contain “whistleblower” provisions that permit private individuals to bring health care fraud
enforcement claims on behalf of the government. Still other laws require providers to comply with a variety of
safety, health and other requirements relating to the condition of the licensed property and the quality of care
provided. Sanctions for violations of these laws, regulations and other applicable guidance may include, but are
not limited to, criminal and/or civil penalties and fines, loss of licensure, immediate termination of government
payments, exclusion from any government health care program, damage assessments and imprisonment. In
certain circumstances, violation of these rules (such as those prohibiting abusive and fraudulent behavior) with
respect to one property may subject other facilities under common control or ownership to sanctions, including
exclusion from participation in the Medicare and Medicaid programs, as well as other government health care
programs. In the ordinary course of its business, a property operator is regularly subjected to inquiries,
investigations and audits by the federal and state agencies that oversee these laws and regulations.
Prosecutions, investigations or whistleblower actions could have a material adverse effect on a property
operator’s liquidity, financial condition, and operations, which could adversely affect the ability of the operator
to meet its financial obligations to us. In addition, government investigations and enforcement actions brought
against the health care industry have increased dramatically over the past several years and are expected to
continue. The costs for an operator of a health care property associated with both defending such enforcement
actions and the undertakings in settling these actions can be substantial and could have a material adverse effect
on the ability of an operator to meet its obligations to us. In addition, Welltower could potentially be directly
subject to these health care fraud and abuse laws, as well as potential investigation or enforcement, as a result of
our RIDEA-structured arrangements, and certain collaboration or other arrangements we may pursue with
stakeholders who are directly subject to these laws.
Federal and State Data Privacy and Security Laws
The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health
Information Technology for Economic and Clinical Health Act, and numerous other state and federal laws
information,
govern the collection, security, dissemination, use, access to and confidentiality of personal
including individually identifiable health information. Violations of these laws may result in substantial civil and/
or criminal fines and penalties. The costs to the business or for an operator of a health care property associated
with developing and maintaining programs and systems to comply with data privacy and security laws, defending
against privacy and security related claims or enforcement actions and paying any assessed fines, can be
substantial. Moreover, such costs could have a material adverse effect on the ability of an operator to meet its
obligations to us. Finally, data privacy and security laws and regulations continue to develop, including with
regard to HIPAA and U.S. state privacy laws such as the California Consumer Privacy Act. These developments
may add potential uncertainty towards compliance obligations, business operations or transactions that depend on
data. These new privacy laws may create restrictions or requirements in our, operators and other business
partner’s use, sharing and securing of data. New privacy and security laws further could require substantial
investment in resources to comply with regulatory changes as privacy and security laws proliferate in divergent
ways or impose additional obligations.
United Kingdom
In the U.K., care home services are principally regulated by the Health and Social Care Act 2008 (as
amended) and other regulations. This legislation subjects service providers to a number of legally binding
“Fundamental Standards” and requires, amongst other things, that all persons carrying out “Regulated Activities”
in the U.K., and the managers of such persons, be registered. Providers of care home services are also subject (as
data controllers) to laws governing their use of personal data (including in relation to their employees, clients and
recipients of their services). These laws currently take the form of the U.K.’s Data Protection Act 2018 and the
European Union’s (“EU”) General Data Protection Regulation (“GDPR”) among other laws. The Data Protection
Act and the GDPR impose a significant number of obligations on controllers with the potential for fines of up to
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4% of annual worldwide turnover or €20 million, whichever is greater. Entities incorporated in or carrying on a
business in the U.K., as well as individuals residing in the U.K., are also subject to the U.K. Bribery Act
2010. The U.K. has national minimum wage legislation with a maximum fine for non-payment of £20,000 per
worker and employers who fail to pay will be banned from being a company director for up to 15 years. The
national minimum wage is set to increase in April 2020.
The U.K. exited from the EU (“Brexit”) on January 31, 2020. U.K. There will be a transition period until the
end of 2020 during which time the U.K. will continue to abide by all EU rules while it seeks to negotiate its
relationship with the EU, which would include inter alia the regulation and import of medicines. Further, the
impact of Brexit on the health and care workforce will depend on future migration policy and the barriers or
incentives to live in the U.K. Until the terms of the withdrawal are finally determined we cannot predict the
impact of Brexit on U.K. regulations.
Canada
Senior living residences in Canada are provincially regulated. Within each province, there are different
categories for senior living residences that are generally based on the level of care sought and/or required by a
resident (e.g. assisted or retirement living, senior living residences, residential care, long-term care). In some of
these categories and depending on the province, residences may be government funded, or the individual
residents may be eligible for a government subsidy, while other residences are exclusively private-pay. The
governing legislation and regulations vary by province, but generally the object of the laws is to set licensing
requirements and minimum standards for senior living residences, and regulate operations. These laws empower
regulators in each province to take a variety of steps to ensure compliance, conduct inspections, issue reports and
generally regulate the industry.
Our operations in Canada are subject to privacy legislation, including, in certain provinces, privacy laws
specifically related to personal health information. Although the obligations of senior living residences in the
various provinces differ, they all include the obligation to protect personal information. Under some of these
laws, notification to the regulator in the event of an actual or suspected privacy breach is mandatory. The powers
of privacy regulators and penalties for violations of privacy law vary according to the applicable law or are left to
the courts. Senior living residences may also be subject to laws pertaining to residential tenancy, provincial and/
or municipal laws applicable to fire safety, food services, zoning, occupational health and safety, public health
and the provision of community health care and funded long-term/post-acute care.
Taxation
The following summary of the taxation of the company and the material U.S. federal
income tax
consequences to the holders of our debt and equity securities is for general information only and is not tax
advice. This summary does not address all aspects of taxation that may be relevant to certain types of holders of
stock or securities (including, but not limited to, insurance companies, tax-exempt entities, financial institutions
or broker-dealers, persons holding shares of common stock as part of a hedging, integrated conversion, or
constructive sale transaction or a straddle, traders in securities that use a mark-to-market method of accounting
for their securities, investors in pass-through entities and foreign corporations and persons who are not citizens or
residents of the United States).
This summary does not discuss all of the aspects of U.S. federal income taxation that may be relevant to you
in light of your particular investment or other circumstances. In addition, this summary does not discuss any state
or local income taxation or foreign income taxation or other foreign tax consequences. This summary is based on
current U.S. federal income tax laws. A discussion of the potential implications to the Company of the Tax Act is
provided at the end of this summary below. Subsequent developments in U.S. federal income tax law, including
changes in law or differing interpretations, which may be applied retroactively, could have a material effect on
the U.S. federal income tax consequences of purchasing, owning and disposing of our securities as set forth in
this summary. Before you purchase our securities, you should consult your own tax advisor regarding the
particular U.S. federal, state, local, foreign and other tax consequences of acquiring, owning and selling our
securities.
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General
We elected to be taxed as a real estate investment trust (a “REIT”) commencing with our first taxable year.
We intend to continue to operate in such a manner as to qualify as a REIT, but there is no guarantee that we will
qualify or remain qualified as a REIT for subsequent years. Qualification and taxation as a REIT depends upon
our ability to meet a variety of qualification tests imposed under U.S. federal income tax law with respect to our
income, assets, distributions and share ownership, as discussed below under “Qualification as a REIT.” There can
be no assurance that we will qualify or remain qualified as a REIT.
In any year in which we qualify as a REIT, in general, we will not be subject to U.S. federal income tax on
that portion of our REIT taxable income or capital gain that is distributed to stockholders. We may, however, be
subject to tax at normal corporate rates on any taxable income or capital gain not distributed. If we elect to retain
and pay income tax on our net capital gain, stockholders would be taxed on their proportionate share of our
undistributed net capital gain and would receive a refundable credit for their share of any taxes paid by us on
such gain.
Despite the REIT election, we may be subject to U.S. federal income and excise tax as follows:
• To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than
100%, of our “REIT taxable income,” as adjusted, we will be subject to tax on the undistributed
amount at regular corporate tax rates;
•
If we have net income from the sale or other disposition of “foreclosure property” that is held primarily
for sale to customers in the ordinary course of business or other non-qualifying income from
foreclosure property, such income will be taxed at the highest corporate rate;
• Any net income from prohibited transactions (which are, in general, sales or other dispositions of
property held primarily for sale to customers in the ordinary course of business, other than dispositions
of foreclosure property) will be subject to a 100% tax;
•
•
If we fail to satisfy either the 75% or 95% gross income tests (as discussed below), but nonetheless
maintain our qualification as a REIT because certain other requirements are met, we will be subject to a
100% tax on an amount equal to (1) the gross income attributable to the greater of (i) 75% of our gross
income over the amount of qualifying gross income for purposes of the 75% gross income test
(discussed below) or (ii) 95% of our gross income over the amount of qualifying gross income for
purposes of the 95% gross income test (discussed below) multiplied by (2) a fraction intended to reflect
our profitability;
If we fail to distribute during each year at least the sum of (1) 85% of our REIT ordinary income for the
year, (2) 95% of our REIT capital gain net income for such year (other than capital gain that we elect to
retain and pay tax on) and (3) any undistributed taxable income from preceding periods, we will be
subject to a 4% excise tax on the excess of such required distribution over amounts actually distributed;
and
• We will be subject to a 100% tax on certain amounts from certain transactions involving our “taxable
REIT subsidiaries” that are not conducted on an arm’s length basis. See “Qualification as a REIT —
Investments in Taxable REIT Subsidiaries.
If we acquire any assets from a corporation, which is or has been a “C” corporation, in a carryover basis
transaction (including where a “C” corporation elects REIT status), we could be liable for specified liabilities that
are inherited from the “C” corporation. A “C” corporation is generally defined as a corporation that is required to
pay full corporate level U.S. federal income tax. If we recognize gain on the disposition of the assets during the
five-year period beginning on the date on which the assets were acquired by us, then, to the extent of the assets’
“built-in gain” (e.g., the excess of the fair market value of the asset over the adjusted tax basis of the asset, in
each case determined as of the beginning of the five-year period), we will be subject to tax on the gain at the
highest regular corporate rate applicable. The results described in this paragraph with respect to the recognition
of built-in gain assume that the “C” corporation did not make and was not treated as making an election to treat
the built-in gain assets as sold to an unrelated party. For those properties that are subject to the built-in gains tax,
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the potential amount of built-in gains tax will be an additional factor when considering a possible sale of the
properties within the five-year period beginning on the date on which the properties were acquired by us. See
Note 19 to our consolidated financial statements for additional information regarding the built-in gains tax.
Qualification as a REIT
A REIT is defined as a corporation, trust or association:
(1) which is managed by one or more trustees or directors;
(2)
the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of
beneficial interest;
(3) which would be taxable as a domestic corporation but for the U.S. federal income tax law relating to
REITs;
(4) which is neither a financial institution nor an insurance company;
(5)
the beneficial ownership of which is held by 100 or more persons in each taxable year of the REIT
except for its first taxable year;
(6) not more than 50% in value of the outstanding stock of which is owned during the last half of each
taxable year, excluding its first taxable year, directly, indirectly or constructively, by or for five or
fewer individuals (which includes certain entities) (the “Five or Fewer Requirement”); and
(7) which meets certain income and asset tests described below.
Conditions (1) to (4), inclusive, must be met during the entire taxable year and condition (5) must be met
during at least 335 days of a taxable year of 12 months or during a proportionate part of a taxable year of less
than 12 months. For purposes of conditions (5) and (6), pension funds and certain other tax-exempt entities are
treated as individuals, subject to a “look-through” exception in the case of condition (6).
Based on publicly available information, we believe we have satisfied the share ownership requirements set
forth in (5) and (6) above. In addition, Article VI of our by-laws provides for restrictions regarding ownership
and transfer of shares. These restrictions are intended to assist us in continuing to satisfy the share ownership
requirements described in (5) and (6) above but may not ensure that we will, in all cases, be able to satisfy such
requirements.
We have complied with, and will continue to comply with, regulatory rules to send annual letters to certain
of our stockholders requesting information regarding the actual ownership of our stock. If, despite sending the
annual letters, we do not know, or after exercising reasonable diligence would not have known, whether we
failed to meet the Five or Fewer Requirement, we will be treated as having met the Five or Fewer Requirement.
If we fail to comply with these regulatory rules, we will be subject to a monetary penalty. If our failure to comply
were due to intentional disregard of the requirement, the penalty would be increased. However, if our failure to
comply were due to reasonable cause and not willful neglect, no penalty would be imposed.
We may own a number of properties through wholly owned subsidiaries. A corporation will qualify as a
“qualified REIT subsidiary” if 100% of its stock is owned by a REIT, and the REIT does not elect to treat the
subsidiary as a taxable REIT subsidiary. A “qualified REIT subsidiary” will not be treated as a separate
corporation for U.S. federal income tax purposes, and all assets, liabilities and items of income, deductions and
credits of a “qualified REIT subsidiary” will be treated as assets, liabilities and items (as the case may be) of the
REIT for U.S. federal income tax purposes. A “qualified REIT subsidiary” is not subject to U.S. federal income
tax, and our ownership of the voting stock of a qualified REIT subsidiary will not violate the restrictions against
ownership of securities of any one issuer which constitute more than 10% of the value or total voting power of
such issuer or more than 5% of the value of our total assets, as described below under “— Asset Tests.”
If we invest in an entity treated as a partnership for U.S. federal income tax purposes, we will be deemed to
own a proportionate share of the entity’s assets. Likewise, we will be treated as receiving our share of the income
and loss of the entity, and the gross income will retain the same character in our hands as it has in the hands of
the entity. These “look-through” rules apply for purposes of the income tests and assets tests described below.
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The deduction of business interest is limited to 30% of adjusted taxable income, which may limit the
deductibility of interest expense by us, our taxable REIT subsidiaries, or our joint venture and partnership
arrangements. A “real property trade or business” may irrevocably elect out of the applicability of the limitation,
but if it does so it must use the less favorable alternative depreciation system to depreciate real property used in
the trade or business. Proposed regulations provide guidance on how to allocate interest deductions among
multiple trades or businesses and contain special rules, including a safe harbor, regarding the allocation of a
REIT’s interest deductions to a “real property trade or business.”
Income Tests There are two separate percentage tests relating to our sources of gross income that we must
satisfy each taxable year:
• At least 75% of our gross income (excluding gross income from certain sales of property held primarily
for sale) generally must be directly or indirectly derived each taxable year from “rents from real
property,” other income from investments relating to real property or mortgages on real property or
certain income from qualified temporary investments.
• At least 95% of our gross income (excluding gross income from certain sales of property held primarily
for sale) generally must be directly or indirectly derived each taxable year from any of the sources
qualifying for the 75% gross income test and from dividends (including dividends from taxable REIT
subsidiaries) and interest.
Income from hedging and foreign currency transactions is excluded from the 95% and 75% gross income
tests if certain requirements are met but otherwise will constitute gross income which does not qualify under the
95% or 75% gross income tests.
Rents received by us will qualify as “rents from real property” for purposes of satisfying the gross income
tests for a REIT only if several conditions are met:
• The amount of rent must not be based in whole or in part on the income or profits of any person,
although rents generally will not be excluded merely because they are based on a fixed percentage or
percentages of receipts or sales.
• Rents received from a tenant will not qualify as rents from real property if the REIT, or an owner of
10% or more of the REIT, also directly or constructively owns 10% or more of the tenant, unless the
tenant is our taxable REIT subsidiary and certain other requirements are met with respect to the real
property being rented.
•
•
If rent attributable to personal property leased in connection with a lease of real property is greater than
15% of the total rent received under the lease, then the portion of rent attributable to such personal
property will not qualify as “rents from real property.”
For rents to qualify as rents from real property, we generally must not furnish or render services to
tenants, other than through a taxable REIT subsidiary or an “independent contractor” from whom we
derive no income, except that we may directly provide services that are usually or customarily rendered
in the geographic area in which the property is located in connection with the rental of real property for
occupancy only or are not otherwise considered rendered to the occupant for his convenience.
• We may lease “qualified health care properties” on an arm’s-length basis to a taxable REIT subsidiary
if the property is operated on behalf of such subsidiary by a person who qualifies as an “independent
contractor” and who is, or is related to a person who is, actively engaged in the trade or business of
operating health care facilities for any person unrelated to us or our taxable REIT subsidiary (such
person, an “eligible independent contractor”). If this is the case, the rent that the REIT receives from
the taxable REIT subsidiary generally will be treated as “rents from real property.” A “qualified health
care property” includes any real property and any personal property that is, or is necessary or incidental
to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified
continuing care facility, or other licensed facility that extends medical or nursing or ancillary services
to patients and is operated by a provider of such services that is eligible for participation in the
Medicare program with respect to such facility.
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A REIT is permitted to render a de minimis amount of impermissible services to tenants and still treat
amounts received with respect to that property as rent from real property. The amount received or accrued by the
REIT during the taxable year for the impermissible services with respect to a property may not exceed 1% of all
amounts received or accrued by the REIT directly or indirectly from the property. The amount received for any
service or management operation for this purpose shall be deemed to be not less than 150% of the direct cost of
the REIT in furnishing or rendering the service or providing the management or operation. Furthermore,
impermissible services may be furnished to tenants by a taxable REIT subsidiary subject to certain conditions,
which would permit us to still treat rents received with respect to the property as rent from real property.
The term “interest” generally does not include any amount if the determination of the amount depends in
whole or in part on the income or profits of any person, although an amount generally will not be excluded from
the term “interest” solely by reason of being based on a fixed percentage of receipts or sales.
If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may
nevertheless qualify as a REIT for such year if we are eligible for certain relief provisions provided by the
Internal Revenue Code. These relief provisions generally will be available if (1) following our identification of
the failure, we file a schedule for such taxable year describing each item of our gross income, and (2) the failure
to meet such tests was due to reasonable cause and not due to willful neglect. It is not now possible to determine
the circumstances under which we may be entitled to the benefit of these relief provisions. If these relief
provisions apply, a 100% tax is imposed on an amount equal to (1) the gross income attributable to (i) 75% of
our gross income over the amount of qualifying gross income for purposes of the 75% income test and (ii) 95%
of our gross income over the amount of qualifying gross income for purposes of the 95% income test, multiplied
by (2) a fraction intended to reflect our profitability. The Secretary of the Treasury is given broad authority to
determine whether particular items of income or gain qualify under the 75% and 95% gross income tests and to
exclude items from the measure of gross income for such purposes.
Asset Tests Within 30 days after the close of each quarter of our taxable year, we must also satisfy several
tests relating to the nature and diversification of our assets determined in accordance with generally accepted
accounting principles. At least 75% of the value of our total assets must be represented by real estate assets
(including interests in real property, interests in mortgages on real property or on interests in real property, shares
in other REITs and debt instruments issued by publicly offered REITs), cash, cash items (including receivables
arising in the ordinary course of our operation), government securities and qualified temporary investments.
Although the remaining 25% of our assets generally may be invested without restriction, we are prohibited from
owning securities representing more than 10% of either the vote (the “10% vote test”) or value (the “10% value
test”) of the outstanding securities of any issuer other than a qualified REIT subsidiary, another REIT or a
taxable REIT subsidiary. Further, no more than 20% of our total assets may be represented by securities of one or
more taxable REIT subsidiaries (the “20% asset test”) and no more than 5% of the value of our total assets may
be represented by securities of any non-governmental issuer other than a qualified REIT subsidiary (the “5%
asset test”), another REIT or a taxable REIT subsidiary. Each of the 10% vote test, the 10% value test and the
20% and 5% asset tests must be satisfied at the end of each quarter. There are special rules which provide relief if
the value-related tests are not satisfied due to changes in the value of the assets of a REIT.
Certain items are excluded from the 10% value test, including: (1) straight debt securities meeting certain
requirements; (2) any loan to an individual or an estate; (3) any rental agreement described in Section 467 of the
Internal Revenue Code, other than with a “related person”; (4) any obligation to pay rents from real property;
(5) certain securities issued by a state or any subdivision thereof, the District of Columbia, a foreign government,
or any political subdivision thereof, or the Commonwealth of Puerto Rico; (6) any security issued by a REIT; and
(7) any other arrangement that, as determined by the Secretary of the Treasury, is excepted from the definition of
security (“excluded securities”). If a REIT, or its taxable REIT subsidiary, holds (1) straight debt securities of a
corporate or partnership issuer and (2) securities of such issuer that are not excluded securities and have an
aggregate value greater than 1% of such issuer’s outstanding securities, the straight debt securities will be
included in the 10% value test.
A REIT’s interest as a partner in a partnership is not treated as a security for purposes of applying the 10%
value test to securities issued by the partnership. Further, any debt instrument issued by a partnership that is not
17
an excluded security will not be a security for purposes of applying the 10% value test (1) to the extent of the
REIT’s interest as a partner in the partnership or (2) if at least 75% of the partnership’s gross income (excluding
gross income from prohibited transactions) would qualify for the 75% gross income test. For purposes of the
10% value test, a REIT’s interest in a partnership’s assets is determined by the REIT’s proportionate interest in
any securities issued by the partnership (other than the excluded securities described in the preceding paragraph).
If a REIT or its “qualified business unit” uses a foreign currency as its functional currency, the term “cash”
includes such foreign currency, but only to the extent such foreign currency is (i) held for use in the normal
course of the activities of the REIT or “qualified business unit” which give rise to items of income or gain that
are included in the 95% and 75% gross income tests or are directly related to acquiring or holding assets
qualifying under the 75% asset test, and (ii) not held in connection with dealing or engaging in substantial and
regular trading in securities.
With respect to corrections of failures as to violations of the 10% vote test, the 10% value test or the 5%
asset test, a REIT may avoid disqualification as a REIT by disposing of sufficient assets to cure a violation due to
the ownership of assets that do not exceed the lesser of 1% of the REIT’s assets at the end of the relevant quarter
or $10,000,000, provided that the disposition occurs within six months following the last day of the quarter in
which the REIT first identified the assets. For violations of any of the REIT asset tests due to reasonable cause
and not willful neglect that exceed the thresholds described in the preceding sentence, a REIT can avoid
disqualification as a REIT after the close of a taxable quarter by taking certain steps, including disposition of
sufficient assets within the six month period described above to meet the applicable asset test, paying a tax equal
to the greater of $50,000 or the highest corporate tax rate multiplied by the net income generated by the
non-qualifying assets during the period of time that the assets were held as non-qualifying assets and filing a
schedule with the Internal Revenue Service that describes the non-qualifying assets.
Investments in Taxable REIT Subsidiaries REITs may own more than 10% of the voting power and value
of securities in taxable REIT subsidiaries. Unlike a qualified REIT subsidiary, other disregarded entity or
partnership, the income and assets of a taxable REIT subsidiary are not attributable to the REIT for purposes of
satisfying the income and asset ownership requirements applicable to REIT qualification. We and any taxable
corporate entity in which we own an interest are allowed to jointly elect to treat such entity as a “taxable REIT
subsidiary.”
Certain of our subsidiaries have elected taxable REIT subsidiary status. Taxable REIT subsidiaries are
subject to full corporate level U.S. federal taxation on their earnings but are permitted to engage in certain types
of activities that cannot be performed directly by REITs without jeopardizing their REIT status. Our taxable
REIT subsidiaries will attempt to minimize the amount of these taxes, but there can be no assurance whether or
the extent to which measures taken to minimize taxes will be successful. To the extent our taxable REIT
subsidiaries are required to pay U.S. federal, state or local taxes, the cash available for distribution as dividends
to us from our taxable REIT subsidiaries will be reduced.
The Internal Revenue Service may redetermine amounts from transactions between a REIT and its taxable
REIT subsidiary where there is a lack of arm’s-length dealing between the parties. Any taxable income allocated
to, or deductible expenses allocated away, from a taxable REIT subsidiary would increase its tax liability.
Further, certain amounts from certain transactions involving a REIT and its taxable REIT subsidiaries could be
subject to a 100% tax if not conducted on an arm’s length basis. Additional taxable REIT subsidiary elections
may be made in the future for additional entities in which we obtain an interest.
Annual Distribution Requirements
In order to avoid being taxed as a regular corporation, we are required
to make distributions (other than capital gain distributions) to our stockholders which qualify for the dividends
paid deduction in an amount at least equal to (1) the sum of (i) 90% of our “REIT taxable income” (computed
without regard to the dividends paid deduction and our net capital gain) and (ii) 90% of the after-tax net income,
if any, from foreclosure property, minus (2) a portion of certain items of non-cash income. These distributions
must be paid in the taxable year to which they relate, or in the following taxable year if declared before we timely
file our tax return for that year and if paid on or before the first regular distribution payment after such
declaration. Prior to 2014, with respect to all REITs the amount distributed could not be preferential. This means
that every stockholder of the class of stock to which a distribution is made must be treated the same as every
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other stockholder of that class, and no class of stock may be treated otherwise than in accordance with its
dividend rights as a class (the “preferential dividend rule”). Beginning in tax years after 2014, the preferential
dividend rule no longer applies to publicly offered REITs, however, the rule is still applicable to other entities
taxed as REITs, which would include several of our subsidiaries. To the extent that we do not distribute all of our
net capital gain or distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will
be subject to tax on the undistributed amount at regular corporate tax rates. As discussed above, we may be
subject to an excise tax if we fail to meet certain other distribution requirements. We believe we have satisfied
the annual distribution requirements for the year of our initial REIT election and each year thereafter through the
year ended December 31, 2019. Although we intend to make timely distributions sufficient to satisfy these
annual distribution requirements for subsequent years, economic, market, legal, tax or other factors could limit
our ability to meet those requirements. See “Item 1A — Risk Factors.”
It is also possible that, from time to time, we may not have sufficient cash or other liquid assets to meet the
90% distribution requirement, or to distribute such greater amount as may be necessary to avoid income and
excise taxation, due to, among other things, (1) timing differences between (i) the actual receipt of income and
actual payment of deductible expenses and (ii) the inclusion of income and deduction of expenses in arriving at
our taxable income, or (2) the payment of severance benefits that may not be deductible to us. In the event that
timing differences occur, we may find it necessary to arrange for borrowings or, if possible, pay dividends in the
form of taxable stock dividends in order to meet the distribution requirement.
Under certain circumstances, including in the event of a deficiency determined by the Internal Revenue
Service, we may be able to rectify a resulting failure to meet the distribution requirement for a year by paying
“deficiency dividends” to stockholders in a later year, which may be included in our deduction for distributions
paid for the earlier year. Thus, we may be able to avoid being disqualified as a REIT and/or taxed on amounts
distributed as deficiency dividends; however, we will be required to pay applicable penalties and interest based
upon the amount of any deduction taken for deficiency dividend distributions.
Failure to Qualify as a REIT
If we fail to qualify for taxation as a REIT in any taxable year, we will be subject to U.S. federal income tax
on our taxable income at regular corporate rates. Distributions to stockholders in any year in which we fail to
qualify as a REIT will not be deductible nor will any particular amount of distributions be required to be made in
any year. All distributions to stockholders will be taxable as dividends to the extent of current and accumulated
earnings and profits allocable to these distributions and, subject to certain limitations, will be eligible for the
dividends received deduction for corporate stockholders. Unless entitled to relief under specific statutory
provisions, we also will be disqualified from taxation as a REIT for the four taxable years following the year
during which qualification was lost. It is not possible to state whether in all circumstances we would be entitled
to statutory relief. Failure to qualify for even one year could result in our need to incur indebtedness or liquidate
investments in order to pay potentially significant resulting tax liabilities.
In addition to the relief described above under “Income Tests” and “Asset Tests,” relief is available in the
event that we violate a provision of the Internal Revenue Code that would result in our failure to qualify as a
REIT if: (1) the violation is due to reasonable cause and not due to willful neglect; (2) we pay a penalty of
$50,000 for each failure to satisfy the provision; and (3) the violation does not include a violation described
under “Income Tests” or “Asset Tests” above. It is not now possible to determine the circumstances under which
we may be entitled to the benefit of these relief provisions.
U.S. Federal Income Taxation of Holders of Our Stock
Treatment of Taxable U.S. Stockholders The following summary applies to you only if you are a
“U.S. stockholder.” A “U.S. stockholder” is a holder of shares of stock who, for U.S. federal income tax
purposes, is:
•
•
a citizen or resident of the United States;
an entity classified as a corporation or partnership, created or organized in or under the laws of the
United States or of any political subdivision of the United States, including any state;
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•
•
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
a trust, if, in general, a U.S. court is able to exercise primary supervision over the trust’s administration
and one or more U.S. persons, within the meaning of the Internal Revenue Code, has the authority to
control all of the trust’s substantial decisions.
So long as we qualify for taxation as a REIT, distributions on shares of our stock made out of the current or
accumulated earnings and profits allocable to these distributions (and not designated as capital gain dividends)
will be taxable as dividends for U.S. federal income tax purposes. None of these distributions will be eligible for
the dividends received deduction for U.S. corporate stockholders.
Generally, the current maximum marginal rate of tax payable by individuals on dividends received from
corporations that are subject to a corporate level of tax is 20%. Except in limited circumstances, this tax rate will
not apply to dividends paid to you by us on our shares, because generally we are not subject to U.S. federal
income tax on the portion of our REIT taxable income or capital gains distributed to our stockholders. The
reduced maximum U.S. federal income tax rate will apply to that portion, if any, of dividends received by you
with respect to our shares that are attributable to: (1) dividends received by us from non-REIT corporations or
other taxable REIT subsidiaries; (2) income from the prior year with respect to which we were required to pay
U.S. federal corporate income tax during the prior year (if, for example, we did not distribute 100% of our REIT
taxable income for the prior year); or (3) the amount of any earnings and profits distributed by us and
accumulated in a non-REIT year.
Although the preferential 20% rate on qualified dividends is generally not applicable to dividends to our
shareholders, the Internal Revenue Code provides for a deduction from income for individuals, trusts and estates
for 20% of taxable REIT dividends not eligible for the preferential rate, excluding capital gain dividends. This
deduction is not taken into account for purposes of determining the 3.8% tax on net investment income
(described below) and, unlike the preferential rate, expires after 2025.
Distributions that are designated as capital gain dividends will be taxed as long-term capital gains (to the
extent they do not exceed our actual net capital gain for the taxable year), without regard to the period for which
you held our stock. However, if you are a corporation, you may be required to treat a portion of some capital gain
dividends as ordinary income.
If we elect to retain and pay income tax on any net capital gain and designate such amount in a timely notice
to you, you would include in income, as long-term capital gain, your proportionate share of this net capital gain.
You would also receive a refundable tax credit for your proportionate share of the tax paid by us on such retained
capital gains, and you would have an increase in the basis of your shares of our stock in an amount equal to your
includable capital gains less your share of the tax deemed paid.
You may not include in your U.S. federal income tax return any of our net operating losses or capital losses.
U.S. federal income tax rules may also require that certain minimum tax adjustments and preferences be
apportioned to you. In addition, any distribution declared by us in October, November or December of any year
on a specified date in any such month shall be treated as both paid by us and received by you on December 31 of
that year, provided that the distribution is actually paid by us no later than January 31 of the following year.
We will be treated as having sufficient earnings and profits to treat as a dividend any distribution up to the
amount required to be distributed in order to avoid imposition of the 4% excise tax discussed under “General”
and “Qualification as a REIT — Annual Distribution Requirements” above. As a result, you may be required to
treat as taxable dividends certain distributions that would otherwise result in a tax-free return of capital.
Moreover, any “deficiency dividend” will be treated as a dividend (an ordinary dividend or a capital gain
dividend, as the case may be), regardless of our earnings and profits. Any other distributions in excess of current
or accumulated earnings and profits will generally not be taxable to you to the extent these distributions do not
exceed the adjusted tax basis of your shares of our stock. You will be required to reduce the tax basis of your
shares of our stock by the amount of these distributions until the basis has been reduced to zero, after which these
distributions will be taxable as capital gain, if the shares of our stock are held as capital assets. The tax basis as so
reduced will be used in computing the capital gain or loss, if any, realized upon the sale of the shares of our
stock. Any loss upon a sale or exchange of shares of our stock which were held for six months or less (after
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application of certain holding period rules) will generally be treated as a long-term capital loss to the extent you
previously received capital gain distributions with respect to these shares of our stock.
Upon the sale or exchange of any shares of our stock to or with a person other than us or a sale or exchange
of all shares of our stock (whether actually or constructively owned) with us, you will generally recognize gain or
loss equal to the difference between the amount realized on the sale or exchange and your adjusted tax basis in
these shares of our stock. This gain or loss will be capital gain or loss if you held these shares of our stock as a
capital asset.
If we redeem any of your shares in us, the treatment can only be determined on the basis of particular facts
at the time of redemption. In general, you will recognize gain or loss (as opposed to dividend income) equal to
the difference between the amount received by you in the redemption and your adjusted tax basis in your shares
redeemed if such redemption: (1) results in a “complete termination” of your interest in all classes of our equity
securities; (2) is a “substantially disproportionate redemption”; or (3) is “not essentially equivalent to a dividend”
with respect to you. In applying these tests, you must take into account your ownership of all classes of our
equity securities (e.g., common stock, preferred stock, depositary shares and warrants). You also must take into
account any equity securities that are considered to be constructively owned by you.
If, as a result of a redemption by us of your shares, you no longer own (either actually or constructively) any
of our equity securities or only own (actually and constructively) an insubstantial percentage of our equity
securities, then it is probable that the redemption of your shares would be considered “not essentially equivalent
to a dividend” and, thus, would result in gain or loss to you. However, whether a distribution is “not essentially
equivalent to a dividend” depends on all of the facts and circumstances, and if you rely on any of these tests at
the time of redemption, you should consult your tax advisor to determine their application to the particular
situation.
Generally, if the redemption does not meet the tests described above, then the proceeds received by you
from the redemption of your shares will be treated as a distribution taxable as a dividend to the extent of the
allocable portion of current or accumulated earnings and profits. If the redemption is taxed as a dividend, your
adjusted tax basis in the redeemed shares will be transferred to any other shareholdings in us that you own. If you
own no other shareholdings in us, under certain circumstances, such basis may be transferred to a related person,
or it may be lost entirely.
Gain from the sale or exchange of our shares held for more than one year is generally taxed at a maximum
long-term capital gain rate of 20% in the case of stockholders who are individuals and 21% in the case of
stockholders that are corporations. Pursuant to Internal Revenue Service guidance, we may classify portions of
our capital gain dividends as eligible for specific treatment provided under the Internal Revenue Code, which,
depending on the nature of the capital gains, may result in taxation of such portions at rates of either 20% or
25%. Capital losses recognized by a stockholder upon the disposition of our shares held for more than one year at
the time of disposition will be considered long-term capital losses. The deduction for capital losses is subject to
limitations.
An additional tax of 3.8% generally will be imposed on the “net investment income” of U.S. stockholders
who meet certain requirements and are individuals, estates or certain trusts. Among other items, “net investment
income” generally includes gross income from dividends and net gain attributable to the disposition of certain
property, such as shares of our common stock or warrants. In the case of individuals, this tax will only apply to
the extent such individual’s modified adjusted gross income exceeds $200,000 ($250,000 for married couples
filing a joint return and surviving spouses, and $125,000 for married individuals filing a separate return). U.S.
stockholders should consult their tax advisors regarding the possible applicability of this additional tax in their
particular circumstances.
Treatment of Tax-Exempt U.S. Stockholders Tax-exempt entities, including qualified employee pension
and profit sharing trusts and individual retirement accounts (“Exempt Organizations”), generally are exempt from
U.S. federal income taxation. However, they are subject to taxation on their unrelated business taxable income
(“UBTI”). The Internal Revenue Service has issued a published revenue ruling that dividend distributions from a
REIT to an exempt employee pension trust do not constitute UBTI, provided that the shares of the REIT are not
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otherwise used in an unrelated trade or business of the exempt employee pension trust. Based on this ruling,
amounts distributed by us to Exempt Organizations generally should not constitute UBTI. However, if an Exempt
Organization finances its acquisition of the shares of our stock with debt, a portion of its income from us will
constitute UBTI pursuant to the “debt financed property” rules. Likewise, a portion of the Exempt Organization’s
income from us would constitute UBTI if we held a residual interest in a real estate mortgage investment conduit.
A tax-exempt U.S. stockholder that is subject to tax on its UBTI will be required to segregate its taxable income
and loss for each unrelated trade or business activity for purposes of determining its UBTI.
Backup Withholding and Information Reporting Under certain circumstances, you may be subject to
backup withholding at applicable rates on payments made with respect to, or cash proceeds of a sale or exchange
of, shares of our stock. Backup withholding will apply only if you: (1) fail to provide a correct taxpayer
identification number, which if you are an individual, is ordinarily your social security number; (2) furnish an
incorrect taxpayer identification number; (3) are notified by the Internal Revenue Service that you have failed to
properly report payments of interest or dividends; or (4) fail to certify, under penalties of perjury, that you have
furnished a correct taxpayer identification number and that the Internal Revenue Service has not notified you that
you are subject to backup withholding.
Backup withholding will not apply with respect to payments made to certain exempt recipients, such as
corporations and tax-exempt organizations. You should consult with a tax advisor regarding qualification for
exemption from backup withholding, and the procedure for obtaining an exemption. Backup withholding is not
an additional tax. Rather, the amount of any backup withholding with respect to a payment to a stockholder will
be allowed as a credit against such stockholder’s U.S. federal income tax liability and may entitle such
stockholder to a refund, provided that the required information is provided to the Internal Revenue Service.
Taxation of Foreign Stockholders The following summary applies to you only if you are a foreign person.
A “foreign person” is a holder of shares of stock who, for U.S. federal income tax purposes, is not a U.S.
stockholder. The U.S. federal taxation of foreign persons is a highly complex matter that may be affected by
many considerations.
Except as discussed below, distributions to you of cash generated by our real estate operations in the form of
ordinary dividends, but not by the sale or exchange of our capital assets, generally will be subject
to
U.S. withholding tax at a rate of 30%, unless an applicable tax treaty reduces that tax and you file with us the
required form evidencing the lower rate.
In general, you will be subject to U.S. federal income tax on a graduated rate basis rather than withholding
with respect to your investment in our stock if such investment is “effectively connected” with your conduct of a
trade or business in the United States. A corporate foreign stockholder that receives income that is, or is treated
as, effectively connected with a United States trade or business may also be subject to the branch profits tax,
which is payable in addition to regular United States corporate income tax. The following discussion will apply
to foreign stockholders whose investment in us is not so effectively connected. We expect to withhold United
States income tax, as described below, on the gross amount of any distributions paid to you unless (1) you file an
Internal Revenue Service Form W-8ECI with us claiming that the distribution is “effectively connected” or
(2) certain other exceptions apply.
Distributions by us that are attributable to gain from the sale or exchange of a United States real property
interest will be taxed to you under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) as if
these distributions were gains “effectively connected” with a United States trade or business. Accordingly, you
will be taxed at the normal capital gain rates applicable to a U.S. stockholder on these amounts, subject to any
applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien
individuals. Distributions subject to FIRPTA may also be subject to a branch profits tax in the hands of a
corporate foreign stockholder that is not entitled to treaty exemption. We will be required to withhold tax at a rate
of 21% from distributions subject to FIRPTA. We will be required to withhold from distributions subject to
FIRPTA, and remit to the Internal Revenue Service, 21% of designated capital gain dividends, or, if greater, 21%
of the amount of any distributions that could be designated as capital gain dividends. In addition, if we designate
prior distributions as capital gain dividends, subsequent distributions, up to the amount of the prior distributions
not withheld against, will be treated as capital gain dividends for purposes of withholding.
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Any capital gain dividend with respect to any class of stock that is “regularly traded” on an established
securities market will be treated as an ordinary dividend if the foreign stockholder did not own more than 10% of
such class of stock at any time during the taxable year. Foreign stockholders generally will not be required to
report distributions received from us on U.S. federal income tax returns and all distributions received by such
income tax purposes (including any such capital gain
stockholders treated as dividends for U.S. federal
dividends) will be subject to a 30% U.S. withholding tax (unless reduced under an applicable income tax treaty)
as discussed above. In addition, the branch profits tax will not apply to such distributions.
Unless our shares constitute a “United States real property interest” within the meaning of FIRPTA or are
effectively connected with a U.S. trade or business, a sale of our shares by you generally will not be subject to
United States taxation. Even if our shares were to constitute a “United States real property interest,” non-U.S.
stockholders that are “qualified foreign pension funds” (or are owned by a qualified foreign pension fund)
meeting certain requirements may be exempt from FIRPTA withholding on the sale or disposition of our shares.
Our shares will not constitute a United States real property interest if we qualify as a “domestically controlled
REIT.” We believe that we qualify as and expect to continue to qualify as a domestically controlled REIT. A
domestically controlled REIT is a REIT in which at all times during a specified testing period less than 50% in
value of its shares is held directly or indirectly by foreign stockholders. Generally, we are permitted to assume
that holders of less than 5% of our shares at all times during a specified testing period are U.S. persons. However,
if you are a nonresident alien individual who is present in the United States for 183 days or more during the
taxable year and certain other conditions apply, you will be subject to a 30% tax on such capital gains. In any
event, a purchaser of our shares from you will not be required under FIRPTA to withhold on the purchase price if
the purchased shares are “regularly traded” on an established securities market or if we are a domestically
controlled REIT. Otherwise, under FIRPTA, the purchaser may be required to withhold 15% of the purchase
price and remit such amount to the Internal Revenue Service.
Backup withholding tax and information reporting will generally not apply to distributions paid to you
outside the United States that are treated as: (1) dividends to which the 30% or lower treaty rate withholding tax
discussed above applies; (2) capital gains dividends; or (3) distributions attributable to gain from the sale or
exchange by us of U.S. real property interests. Payment of the proceeds of a sale of stock within the United States
or conducted through certain U.S. related financial intermediaries is subject to both backup withholding and
information reporting unless the beneficial owner certifies under penalties of perjury that he or she is not a
U.S. person (and the payor does not have actual knowledge that the beneficial owner is a U.S. person) or
otherwise establishes an exemption. You may obtain a refund of any amounts withheld under the backup
withholding rules by filing the appropriate claim for refund with the Internal Revenue Service.
Withholding tax at a rate of 30% will be imposed on certain payments to you or certain foreign financial
institutions (including investment funds) and other non-US persons receiving payments on your behalf, including
distributions in respect of shares of our stock, if you or such institutions fail to comply with certain due diligence,
disclosure and reporting rules, as set forth in Treasury regulations. Accordingly, the entity through which shares
of our stock are held will affect the determination of whether such withholding is required. Stockholders that are
otherwise eligible for an exemption from, or reduction of, U.S. withholding taxes with respect to such dividends
will be required to seek a refund from the Internal Revenue Service to obtain the benefit of such exemption or
reduction. Additional requirements and conditions may be imposed pursuant to an intergovernmental agreement,
if and when entered into, between the United States and such institution’s home jurisdiction. We will not pay any
additional amounts to any stockholders in respect of any amounts withheld. You are encouraged to consult with
your tax advisor regarding U.S. withholding taxes and the application of Treasury regulations in light of your
particular circumstances.
U.S. Federal Income Taxation of Holders of Depositary Shares
Owners of our depositary shares will be treated as if you were owners of the series of preferred stock
represented by the depositary shares. Thus, you will be required to take into account the income and deductions
to which you would be entitled if you were a holder of the underlying series of preferred stock.
Conversion or Exchange of Shares for Preferred Stock No gain or loss will be recognized upon the
withdrawal of preferred stock in exchange for depositary shares and the tax basis of each share of preferred stock
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will, upon exchange, be the same as the aggregate tax basis of the depositary shares exchanged. If you held your
depositary shares as a capital asset at the time of the exchange for shares of preferred stock, the holding period
for your shares of preferred stock will include the period during which you owned the depositary shares.
U.S. Federal Income and Estate Taxation of Holders of Our Debt Securities
The following is a general summary of the U.S. federal income tax consequences and, in the case that you
are a holder that is a non-U.S. holder, as defined below, the U.S. federal estate tax consequences, of purchasing,
owning and disposing of debt securities periodically offered under one or more indentures (the “notes”). This
summary assumes that you hold the notes as capital assets. This summary applies to you only if you are the
initial holder of the notes and you acquire the notes for a price equal to the issue price of the notes. The issue
price of the notes is the first price at which a substantial amount of the notes is sold other than to bond houses,
brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or
wholesalers. In addition, this summary does not consider any foreign, state, local or other tax laws that may be
applicable to us or a purchaser of the notes.
U.S. Holders
The following summary applies to you only if you are a U.S. holder, as defined below.
Definition of a U.S. Holder A “U.S. holder” is a beneficial owner of a note or notes that is for U.S. federal
income tax purposes:
•
•
•
•
a citizen or resident of the United States;
a corporation, partnership or other entity classified as a corporation or partnership for these purposes,
created or organized in or under the laws of the United States or of any political subdivision of the
United States, including any state;
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
a trust, if, in general, a U.S. court is able to exercise primary supervision over the trust’s administration
and one or more U.S. persons, within the meaning of the Internal Revenue Code, has the authority to
control all of the trust’s substantial decisions.
Payments of Interest Stated interest on the notes generally will be taxed as ordinary interest income from
domestic sources at the time it is paid or accrues in accordance with your method of accounting for tax purposes.
Sale, Exchange or Other Disposition of Notes The adjusted tax basis in your note will generally be your
cost. You generally will recognize taxable gain or loss when you sell or otherwise dispose of your notes equal to
the difference, if any, between:
•
•
the amount realized on the sale or other disposition, less any amount attributable to any accrued
interest, which will be taxable in the manner described under “Payments of Interest” above; and
your adjusted tax basis in the notes.
Your gain or loss generally will be capital gain or loss. This capital gain or loss will be long-term capital
gain or loss if at the time of the sale or other disposition you have held the notes for more than one year. Subject
to limited exceptions, your capital losses cannot be used to offset your ordinary income (except in the case of
individuals, who may offset up to $3,000 of ordinary income each year).
Backup Withholding and Information Reporting
In general, “backup withholding” may apply to any
payments made to you of principal and interest on your note, and to the payment of the proceeds of a sale or
other disposition of your note before maturity, if you are a non-corporate U.S. holder and: (1) fail to provide a
correct taxpayer identification number, which if you are an individual, is ordinarily your social security number;
(2) furnish an incorrect taxpayer identification number; (3) are notified by the Internal Revenue Service that you
have failed to properly report payments of interest or dividends; or (4) fail to certify, under penalties of perjury,
that you have furnished a correct taxpayer identification number and that the Internal Revenue Service has not
notified you that you are subject to backup withholding.
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The amount of any reportable payments, including interest, made to you (unless you are an exempt
recipient) and the amount of tax withheld, if any, with respect to such payments will be reported to you and to the
Internal Revenue Service for each calendar year. You should consult your tax advisor regarding your
qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, if
applicable. The backup withholding tax is not an additional tax and will be credited against your U.S. federal
income tax liability, provided that correct information is provided to the Internal Revenue Service.
Non-U.S. Holders
The following summary applies to you if you are a beneficial owner of a note and are not a U.S. holder, as
defined above (a “non-U.S. holder”).
Special rules may apply to certain non-U.S. holders such as “controlled foreign corporations,” “passive
foreign investment companies” and “foreign personal holding companies.” Such entities are encouraged to
consult their tax advisors to determine the U.S. federal, state, local and other tax consequences that may be
relevant to them.
U.S. Federal Withholding Tax Subject to the discussion below, U.S. federal withholding tax will not apply
to payments by us or our paying agent, in its capacity as such, of principal and interest on your notes under the
“portfolio interest” exception of the Internal Revenue Code, provided that:
•
•
•
•
•
you do not, directly or indirectly, actually or constructively, own 10% or more of the total combined
voting power of all classes of our stock entitled to vote;
you are not (1) a controlled foreign corporation for U.S. federal income tax purposes that is related,
directly or indirectly, to us through sufficient stock ownership, as provided in the Internal Revenue
Code, or (2) a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue Code;
such interest is not effectively connected with your conduct of a U.S. trade or business; and
you provide a signed written statement, under penalties of perjury, which can reliably be related to you,
certifying that you are not a U.S. person within the meaning of the Internal Revenue Code and
providing your name and address to us or our paying agent; or
a securities clearing organization, bank or other financial institution that holds customers’ securities in
the ordinary course of its trade or business and holds your notes on your behalf and that certifies to us
or our paying agent under penalties of perjury that it, or the bank or financial institution between it and
you, has received from you your signed, written statement and provides us or our paying agent with a
copy of such statement.
Treasury regulations provide that:
•
•
•
if you are a foreign partnership, the certification requirement will generally apply to your partners, and
you will be required to provide certain information;
if you are a foreign trust, the certification requirement will generally be applied to you or your
beneficial owners depending on whether you are a “foreign complex trust,” “foreign simple trust,” or
“foreign grantor trust” as defined in the Treasury regulations; and
look-through rules will apply for tiered partnerships, foreign simple trusts and foreign grantor trusts.
If you are a foreign partnership or a foreign trust, you should consult your own tax advisor regarding your
status under these Treasury regulations and the certification requirements applicable to you.
If you cannot satisfy the portfolio interest requirements described above, payments of interest will be subject
to the 30% United States withholding tax, unless you provide us with a properly executed (1) Internal Revenue
Service Form W-8BEN claiming an exemption from or reduction in withholding under the benefit of an
applicable treaty or (2) Internal Revenue Service Form W-8ECI stating that interest paid on the note is not
subject to withholding tax because it is effectively connected with your conduct of a trade or business in the
United States. Alternative documentation may be applicable in certain circumstances.
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If you are engaged in a trade or business in the United States and interest on a note is effectively connected
with the conduct of that trade or business, you will be required to pay U.S. federal income tax on that interest on
a net income basis (although you will be exempt from the 30% withholding tax provided the certification
requirement described above is met) in the same manner as if you were a U.S. person, except as otherwise
provided by an applicable tax treaty. If you are a foreign corporation, you may be required to pay a branch profits
tax on the earnings and profits that are effectively connected to the conduct of your trade or business in the
United States.
Withholding tax at a rate of 30% will be imposed on payments of interest (including original issue discount)
to you or certain foreign financial institutions (including investment funds) and other non-US persons receiving
payments on your behalf if you or such institutions fail to comply with certain due diligence, disclosure and
reporting rules, as set forth in Treasury regulations. We will not pay any additional amounts to any holders of our
debt instruments in respect of any amounts withheld. You are encouraged to consult with your tax advisor
regarding U.S. withholding taxes and the application of the relevant Treasury regulations in light of your
particular circumstances.
Sale, Exchange or other Disposition of Notes You generally will not have to pay U.S. federal income tax
on any gain or income realized from the sale, redemption, retirement at maturity or other disposition of your
notes, unless:
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in the case of gain, you are an individual who is present in the United States for 183 days or more
during the taxable year of the sale or other disposition of your notes, and specific other conditions are
met;
you are subject to tax provisions applicable to certain United States expatriates; or
the gain is effectively connected with your conduct of a U.S. trade or business.
If you are engaged in a trade or business in the United States, and gain with respect to your notes is
effectively connected with the conduct of that trade or business, you generally will be subject to U.S. income tax
on a net basis on the gain. In addition, if you are a foreign corporation, you may be subject to a branch profits tax
on your effectively connected earnings and profits for the taxable year, as adjusted for certain items.
U.S. Federal Estate Tax.
If you are an individual and are not a U.S. citizen or a resident of the United
States, as specially defined for U.S. federal estate tax purposes, at the time of your death, your notes will
generally not be subject to the U.S. federal estate tax, unless, at the time of your death (1) you owned actually or
constructively 10% or more of the total combined voting power of all our classes of stock entitled to vote, or
(2) interest on the notes is effectively connected with your conduct of a U.S. trade or business.
Backup Withholding and Information Reporting Backup withholding will not apply to payments of
principal or interest made by us or our paying agent, in its capacity as such, to you if you have provided the
required certification that you are a non-U.S. holder as described in “U.S. Federal Withholding Tax” above, and
provided that neither we nor our paying agent have actual knowledge that you are a U.S. holder, as described in
“U.S. Holders” above. We or our paying agent may, however, report payments of interest on the notes.
The gross proceeds from the disposition of your notes may be subject to information reporting and backup
withholding tax. If you sell your notes outside the United States through a non-U.S. office of a non-U.S. broker
and the sales proceeds are paid to you outside the United States, then the U.S. backup withholding and
information reporting requirements generally will not apply to that payment. However, U.S.
information
reporting, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made
outside the United States, if you sell your notes through a non-U.S. office of a broker that has certain connections
with the United States.
You should consult your own tax advisor regarding application of backup withholding in your particular
circumstance and the availability of and procedure for obtaining an exemption from backup withholding. Any
amounts withheld under the backup withholding rules from a payment to you will be allowed as a refund or
credit against your U.S. federal income tax liability, provided the required information is furnished to the Internal
Revenue Service.
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U.S. Federal Income of Holders of Our Warrants
Exercise of Warrants You will not generally recognize gain or loss upon the exercise of a warrant. Your
basis in the debt securities, preferred stock, depositary shares or common stock, as the case may be, received
upon the exercise of the warrant will be equal to the sum of your adjusted tax basis in the warrant and the
exercise price paid. Your holding period in the debt securities, preferred stock, depositary shares or common
stock, as the case may be, received upon the exercise of the warrant will not include the period during which the
warrant was held by you.
Expiration of Warrants Upon the expiration of a warrant, you will generally recognize a capital loss in an
amount equal to your adjusted tax basis in the warrant.
Sale or Exchange of Warrants Upon the sale or exchange of a warrant to a person other than us, you will
recognize gain or loss in an amount equal to the difference between the amount realized on the sale or exchange
and your adjusted tax basis in the warrant. Such gain or loss will generally be capital gain or loss and will be
long-term capital gain or loss if the warrant was held for more than one year. Upon the sale of the warrant to us,
the Internal Revenue Service may argue that you should recognize ordinary income on the sale. You are advised
to consult your own tax advisors as to the consequences of a sale of a warrant to us.
Potential Legislation or Other Actions Affecting Tax Consequences
Current and prospective securities holders should recognize that the present U.S. federal income tax
treatment of an investment in us may be modified by legislative, judicial or administrative action at any time and
that any such action may affect investments and commitments previously made. The rules dealing with U.S.
federal income taxation are constantly under review by persons involved in the legislative process and by the
Internal Revenue Service and the Department of the Treasury, resulting in revisions of regulations and revised
interpretations of established concepts as well as statutory changes. Revisions in U.S. federal tax laws and
interpretations of these laws could adversely affect the tax consequences of an investment in us.
State, Local and Foreign Taxes
We, and holders of our debt and equity securities, may be subject to state, local or foreign taxation in
various jurisdictions, including those in which we or they transact business, own property or reside. It should be
noted that we own properties located in a number of state, local and foreign jurisdictions, and may be required to
file tax returns in some or all of those jurisdictions. The state, local or foreign tax treatment of us and holders of
our debt and equity securities may not conform to the U.S. federal income tax consequences discussed above.
Consequently, you are urged to consult your advisor regarding the application and effect of state, local and
foreign tax laws with respect to any investment in our securities.
Because the U.S. generally maintains a worldwide corporate tax system, the foreign and U.S. tax systems
are somewhat interdependent. Longstanding international tax norms that determine each country’s jurisdiction to
tax cross-border international trade are evolving and could reduce the ability of our foreign subsidiaries to deduct
for foreign tax purposes the interest they pay on loans from the Company, thereby increasing the foreign tax
liability of the subsidiaries. It is also possible that foreign countries could increase their withholding taxes on
dividends and interest. Given the unpredictability of these possible changes and their potential interdependency,
it is very difficult to assess the overall effect of such potential tax changes on our earnings and cash flow, but
such changes could adversely impact our financial results.
Internet Access to Our SEC Filings
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports, as well as our proxy statements and other materials that are filed with, or furnished
to, the Securities and Exchange Commission (“SEC”) are made available, free of charge, on the Internet at
www.welltower.com/investors, as soon as reasonably practicable after they are filed with, or furnished to, the
SEC. We routinely post important information on our website at www.welltower.com in the “Investors” section,
including corporate and investor presentations and financial information. We intend to use our website as a
27
means of disclosing material, non-public information and for complying with our disclosure obligations under
Regulation FD. Such disclosures will be included on our website under the heading “Investors.” Accordingly,
investors should monitor such portion of our website in addition to following our press releases, public
conference calls, and filings with the SEC. The information on our website is not incorporated by reference in
this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.
Cautionary Statement Regarding Forward-Looking Statements
This Annual Report on Form 10-K and the documents incorporated by reference contain statements that
constitute “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of
1995. When we use words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,”
“estimate” or similar expressions that do not relate solely to historical matters, we are making forward-looking
statements. In particular, these forward-looking statements include, but are not limited to, those relating to our
opportunities to acquire, develop or sell properties; our ability to close our anticipated acquisitions, investments
or dispositions on currently anticipated terms, or within currently anticipated timeframes;
the expected
performance of our operators/tenants and properties; our expected occupancy rates; our ability to declare and to
make distributions to stockholders; our investment and financing opportunities and plans; our continued
qualification as a REIT; and our ability to access capital markets or other sources of funds.
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties
that may cause our actual results to differ materially from our expectations discussed in the forward-looking
statements. This may be a result of various factors, including, but not limited to:
•
•
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•
•
•
•
•
•
•
•
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•
•
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the status of the economy;
the status of capital markets, including availability and cost of capital;
uncertainty from the expected discontinuance of LIBOR and the transition to any other interest rate
benchmark;
issues facing the health care industry, including compliance with, and changes to, regulations and
payment policies, responding to government investigations and punitive settlements and operators’/
tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance;
changes in financing terms;
competition within the health care and seniors housing industries;
negative developments in the operating results or financial condition of operators/tenants, including,
but not limited to, their ability to pay rent and repay loans;
our ability to transition or sell properties with profitable results;
the failure to make new investments or acquisitions as and when anticipated;
natural disasters and other acts of God affecting our properties;
our ability to re-lease space at similar rates as vacancies occur;
our ability to timely reinvest sale proceeds at similar rates to assets sold;
operator/tenant or joint venture partner bankruptcies or insolvencies;
the cooperation of joint venture partners;
government
requirements;
regulations affecting Medicare and Medicaid reimbursement
rates and operational
liability or contract claims by or against operators/tenants;
unanticipated difficulties and/or expenditures relating to future investments or acquisitions;
environmental laws affecting our properties;
28
•
•
•
•
•
changes in rules or practices governing our financial reporting;
the movement of U.S. and foreign currency exchange rates;
our ability to maintain our qualification as a REIT;
key management personnel recruitment and retention; and
the risks described under “Item 1A — Risk Factors.”
We undertake no obligation to update or revise publicly any forward-looking statements, whether because of
new information, future events, or otherwise.
Item 1A. Risk Factors
This section highlights significant factors, events and uncertainties that could create risk with an investment
in our securities. The events and consequences discussed in these risk factors could, in circumstances we may not
be able to accurately predict, recognize or control, have a material adverse effect on our business, growth,
reputation, prospects, financial condition, operating results, cash flows, liquidity, ability to pay dividends and
stock price. These risk factors do not identify all risks that we face: our operations could also be affected by
factors, events or uncertainties that are not presently known to us or that we currently do not consider to present
significant risks to our operations. We group these risk factors into three categories:
• Risks arising from our business;
• Risks arising from our capital structure; and
• Risks arising from our status as a REIT.
Risks Arising from Our Business
Our investments in and acquisitions of health care and seniors housing properties may be unsuccessful or
fail to meet our expectations
We are exposed to the risk that some of our acquisitions may not prove to be successful. We could
encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent
liabilities, and acquired properties might require significant management attention that would otherwise be
devoted to our ongoing business. If we agree to provide construction funding to an operator/tenant and the
project is not completed, we may need to take steps to ensure completion of the project. Such expenditures may
negatively affect our results of operations. Investments in and acquisitions of seniors housing and health care
properties entail risks associated with real estate investments generally, including risks that the investment will
not achieve expected returns, that the cost estimates for necessary property improvements will prove inaccurate
or that the tenant, operator or manager will fail to meet performance expectations. Furthermore, there can be no
assurance that our anticipated acquisitions and investments, the completion of which is subject to various
conditions, will be consummated in accordance with anticipated timing, on anticipated terms, or at all. We may
be unable to obtain or assume financing for acquisitions on favorable terms or at all. Health care properties are
often highly customizable and the development or redevelopment of such properties may require costly tenant-
specific improvements. We also may be unable to quickly and efficiently integrate new acquisitions, particularly
acquisitions of portfolios of properties, into our existing operations, and this could have an adverse effect on our
results of operations and financial condition. Acquired properties may be located in new markets, either within or
outside the United States, where we may face risks associated with a lack of market knowledge or understanding
of the local economy, lack of business relationships in the area, costs associated with opening a new regional
office and unfamiliarity with local governmental and permitting procedures. As a result, we cannot assure you
that we will achieve the economic benefit we expect from acquisitions,
investment, development and
redevelopment opportunities.
Acquired properties may expose us to unknown liability
We may acquire properties or invest in joint ventures that own properties subject to liabilities and without
any recourse, or with only limited recourse, against the prior owners or other third parties with respect to
29
unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties,
we might have to pay substantial sums to settle or contest it, which could adversely affect our results of
operations and cash flow. Unknown liabilities with respect to acquired properties might include: liabilities for
clean up of undisclosed environmental contamination, claims by tenants, vendors or other persons against the
liabilities incurred in the ordinary course of business and claims for
former owners of the properties,
indemnification by general partners, directors and others indemnified by the former owners of the properties.
Competition for acquisitions may result in increased prices for properties
We may face competition for acquisition opportunities from other well-capitalized investors, including
publicly traded and privately held REITs, private real estate funds, domestic and foreign financial institutions,
life insurance companies, sovereign wealth funds, pension trusts, partnerships and individual investors. This
competition may adversely affect us by subjecting us to the following risks: we may be unable to acquire a
desired property because of competition from other well-capitalized real estate investors and, even if we are able
to acquire a desired property, competition from other real estate investors may significantly increase the purchase
price.
Our investments in joint ventures could be adversely affected by our lack of exclusive control over these
investments, our partners’ insolvency or failure to meet their obligations, and disputes between us and our
partners
We have entered into, and may continue in the future to enter into, partnerships or joint ventures with other
persons or entities. Joint venture investments involve risks that may not be present with other methods of
ownership, including the possibility that our partner might become insolvent, refuse to make capital contributions
when due or otherwise fail to meet its obligations, which may result in certain liabilities to us for guarantees and
other commitments; that our partner might at any time have economic or other business interests or goals that are
or become inconsistent with our interests or goals; that we could become engaged in a dispute with our partner,
which could require us to expend additional resources to resolve such dispute and could have an adverse impact
on the operations and profitability of the joint venture; that our partner may be in a position to take action or
withhold consent contrary to our instructions or requests; and that our joint venture partners may be structured
differently than us for tax purposes, which could create conflicts of interest and risks to our REIT status. In some
instances, we and/or our partner may have the right to trigger a buy-sell, put right or forced sale arrangement,
which could cause us to sell our interest, acquire our partner’s interest or sell the underlying asset at a time when
we otherwise would not have initiated such a transaction. Our ability to acquire our partner’s interest may be
limited if we do not have sufficient cash, available borrowing capacity or other capital resources. In such event,
we may be forced to sell our interest in the joint venture when we would otherwise prefer to retain it. On the
other hand, our ability to transfer our interest in a joint venture to a third party may be restricted and the market
for our interest may be limited and/or valued lower than fair market value. Joint ventures may require us to share
decision-making authority with our partners, which could limit our ability to control the properties in the joint
ventures. Even when we have a controlling interest, certain major decisions may require partner approval, such as
the sale, acquisition or financing of a property.
We are exposed to operational risks with respect to our Seniors Housing Operating properties that could
adversely affect our revenue and operations
We are exposed to various operational risks with respect to our Seniors Housing Operating properties that
may increase our costs or adversely affect our ability to generate revenues. These risks include fluctuations in
occupancy, Medicare and Medicaid reimbursement, if applicable, and private pay rates; economic conditions;
competition; federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations,
and standards; the availability and increases in cost of general and professional liability insurance coverage; state
regulation and rights of residents related to entrance fees; and the availability and increases in the cost of labor
(as a result of unionization or otherwise). Any one or a combination of these factors may adversely affect our
revenue and operations.
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We assume operational and legal risks with respect to our properties managed in RIDEA structures that
could have a material adverse effect on our business, results of operations and financial condition
We have entered into various joint ventures that were structured under the provisions of the REIT
Investment Diversification and Empowerment Act of 2007 (“RIDEA”), which permits REITs to own or partially
own “qualified health care properties” in a structure through which we can participate directly in the cash flow of
the properties’ operations (as compared to receiving only contractual rent payments) in compliance with REIT
requirements. A “qualified health care property” includes real property and any personal property that is, or is
necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility,
qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services
to patients.
Under a RIDEA structure, we are required to rely on our operator to manage and operate the property,
including complying with laws and providing resident care. However, as the owner of the property under a
RIDEA structure, we are responsible for operational and legal risks and liabilities of the property, including, but
not limited to, those relating to employment matters of our operators, compliance with health care fraud and
abuse and other laws, governmental reimbursement matters, compliance with federal, state, local and industry-
related licensure, certification and inspection laws, regulations, and standards, and litigation involving our
properties or residents/patients, even though we have limited ability to control or influence our operators’
management of these risks. Further, our taxable REIT subsidiary (“TRS”) is generally required to hold the
applicable health care license and enroll in the applicable government health care programs (e.g., Medicare and
Medicaid), which subjects us to potential liability under various health care regulatory laws. Penalties for failure
to comply with applicable laws may include loss or suspension of licenses and certificates of need, certification
or accreditation, exclusion from government health care programs (e.g., Medicare and Medicaid), administrative
sanctions and civil monetary penalties. Although we have some general oversight approval rights and the right to
review operational and financial reporting information, our operators are ultimately in control of the day-to-day
business of the property, including clinical decision-making, we rely on them to operate the properties in
compliance with a manner that complies with applicable law.
Decreases in our operators’ revenues or increases in our operators’ expenses could affect our operators’
ability to make payments to us
We have very limited control over the success or failure of our operators’ businesses and, at any time, an
operator may experience a downturn in its business that weakens its financial condition. Our operators’ revenues
are primarily driven by occupancy, private pay rates, and Medicare and Medicaid reimbursement, if applicable.
Expenses for these facilities are primarily driven by the costs of labor, food, utilities, taxes, insurance and rent or
debt service. Revenues from government reimbursement have, and may continue to, come under pressure due to
reimbursement cuts and state budget shortfalls. Operating costs continue to increase for our operators. To the
extent that any decrease in revenues and/or any increase in operating expenses result in a property not generating
enough cash to make payments to us, the credit of our operator and the value of other collateral would have to be
relied upon. To the extent the value of such property is reduced, we may need to record an impairment for such
asset. Furthermore, if we determine to dispose of an underperforming property, such sale may result in a loss.
Any such impairment or loss on sale would negatively affect our financial results. These risks are magnified
where we lease multiple properties to a single operator under a master lease, as an operator failure or default
under a master lease would expose us to these risks across multiple properties. Although our lease agreements
give us the right to exercise certain remedies in the event of default on the obligations owing to us, we may
determine not to do so if we believe that enforcement of our rights would be more detrimental to our business
than seeking alternative approaches.
Increased competition and oversupply may affect our operators’ ability to meet their obligations to us
The operators of our properties compete on a local and regional basis with operators of properties and other
health care providers that provide comparable services for residents and patients, including on the basis of the
scope and quality of care and services provided, reputation and financial condition, physical appearance of the
properties, price, and location. Our operators are expected to encounter increased competition in the future that
31
could limit their ability to attract residents or expand their businesses. In addition, we expect that there will
continue to be a more than adequate inventory of seniors housing facilities. We cannot be certain that the
operators of all of our facilities will be able to achieve and maintain occupancy and rate levels that will enable
them to meet all of their obligations to us. If our operators cannot compete effectively or if there is an oversupply
of facilities, their financial performance and ability to meet their obligations to us could have a material adverse
effect on our financial results.
A severe cold and flu season, epidemics or any other widespread illnesses could adversely affect the
occupancy of our Seniors Housing Operating and Triple-net properties
Our revenues and our operators’ revenues are dependent on occupancy. It is impossible to predict the
severity of the cold and flu season or the occurrence of epidemics or any other widespread illnesses. The
occupancy of our Seniors Housing Operating and Triple-net properties could significantly decrease in the event
of a severe cold and flu season, an epidemic or any other widespread illness. Such a decrease could affect the
operating income of our Seniors Housing Operating properties and the ability of our Triple-net operators to make
payments to us. In addition, a flu pandemic could significantly increase the cost burdens faced by our operators,
including if they are required to implement quarantines for residents, and adversely affect their ability to meet
their obligations to us, which would have a material adverse effect on our financial results.
The insolvency or bankruptcy of our tenants, operators, borrowers, managers and other obligors may
adversely affect our business, results of operations and financial condition
We are exposed to the risk that our tenants, operators, borrowers, managers or other obligors may not be
able to meet the rent, principal and interest or other payments due us, which may result in a tenant, operator,
borrower, manager or other obligor bankruptcy or insolvency, or that a tenant, operator, borrower, manager or
other obligor might become subject to bankruptcy or insolvency proceedings for other reasons. Although our
operating lease agreements provide us with the right to evict a tenant, demand immediate payment of rent and
exercise other remedies, and our loans provide us with the right to terminate any funding obligation, demand
immediate repayment of principal and unpaid interest, foreclose on the collateral and exercise other remedies, the
bankruptcy and insolvency laws afford certain rights to a party that has filed for bankruptcy or reorganization. A
tenant, operator, borrower, manager or other obligor in bankruptcy or subject to insolvency proceedings may be
able to limit or delay our ability to collect unpaid rent in the case of a lease or to receive unpaid principal and
interest in the case of a loan, and to exercise other rights and remedies. In addition, if a lease is rejected in a
tenant bankruptcy, our claim against the tenant may be limited by applicable provisions of the bankruptcy
law. We may be required to fund certain expenses (e.g., real estate taxes and maintenance) to preserve the value
of an investment property, avoid the imposition of liens on a property and/or transition a property to a new
tenant. In some instances, we have terminated our lease with a tenant and relet the property to another tenant. In
some of those situations, we have provided working capital loans to and limited indemnification of the new
obligor. If we cannot transition a leased property to a new tenant, we may take possession of that property, which
may expose us to certain successor liabilities. Publicity about the operator’s financial condition and insolvency
proceedings may also negatively impact their and our reputations, decreasing customer demand and revenues.
Should such events occur, our revenue and operating cash flow may be adversely affected.
We may not be able to timely reinvest our sale proceeds on terms acceptable to us
From time to time, we will have cash available from the proceeds of sales of our securities, principal
payments on our loans receivable or the sale of properties, including non-elective dispositions, under the terms of
master leases or similar financial support arrangements. In order to maintain current revenues and continue
generating attractive returns, we expect to reinvest these proceeds in a timely manner. We compete for real estate
including other health care REITs, real estate
investments with a broad variety of potential
investors,
partnerships, health care providers, health care lenders and other investors,
including developers, banks,
insurance companies, pension funds, government-sponsored entities and private equity firms, some of whom may
have greater financial resources and lower costs of capital
than we do. This competition for attractive
investments may negatively affect our ability to make timely investments on terms acceptable to us.
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The properties managed by Sunrise Senior Living, LLC (“Sunrise”) account for a significant portion of our
revenues and net operating income and any adverse developments in its business or financial condition
could adversely affect us
As of December 31, 2019, Sunrise managed 165 of our Seniors Housing Operating properties. These
properties account for a significant portion of our revenues and net operating income. Although we have various
rights as the property owner under our management agreements, we rely on Sunrise’s personnel, expertise,
technical resources and information systems, proprietary information, good faith and judgment to manage our
Seniors Housing Operating properties efficiently and effectively. We also rely on Sunrise to set appropriate
resident fees, to provide accurate property-level financial results for our properties in a timely manner and to
otherwise operate them in compliance with the terms of our management agreements and all applicable laws and
regulations. Any adverse developments in Sunrise’s business or financial condition could impair its ability to
manage our properties efficiently and effectively, which could adversely affect our business, results of
operations, and financial condition. For example, we depend on Sunrise’s ability to attract and retain skilled
management personnel who are responsible for the day-to-day operations of our Seniors Housing Operating
properties. A shortage of nurses or other trained personnel or general inflationary pressures may force Sunrise to
enhance its pay and benefits packages to compete effectively for such personnel, but it may not be able to offset
these added costs by increasing the rates charged to residents. Any increase in labor costs and other property
operating expenses, any failure by Sunrise to attract and retain qualified personnel, or significant changes in
Sunrise’s senior management or equity ownership could adversely affect the income we receive from our Seniors
Housing Operating properties and have a material adverse effect on us. Also, if Sunrise experiences any
significant financial, legal, accounting or regulatory difficulties, such difficulties could result in, among other
things, acceleration of its indebtedness, impairment of its continued access to capital or the commencement of
insolvency proceedings by or against it under the U.S. Bankruptcy Code, which, in turn, could adversely affect
our business, results of operations and financial condition. If we determine to sell or transition additional
properties currently managed by Sunrise, we may experience operational challenges and/or significantly
declining financial performance for those properties. See Note 9 to our consolidated financial statements for
additional information.
We depend on ProMedica Health System (“ProMedica”) and Genesis HealthCare (“Genesis”) for a
significant portion of our revenues and any failure, inability or unwillingness by them to satisfy obligations
under their agreements with us could adversely affect us
The properties we lease to ProMedica and Genesis account for a significant portion of our revenues, and
because these leases are triple-net leases, we also depend on ProMedica and Genesis to pay all insurance, taxes,
utilities and maintenance and repair expenses in connection with the leased properties. We cannot assure you that
ProMedica and Genesis will have sufficient assets, income and access to financing to enable them to make rental
payments to us or to otherwise satisfy their respective obligations under our leases, and any failure, inability or
unwillingness by ProMedica and Genesis to do so could have an adverse effect on our business, results of
operations and financial condition. ProMedica and Genesis have also agreed to indemnify, defend and hold us
harmless from and against various claims, litigation and liabilities arising in connection with their respective
businesses, and we cannot assure you that ProMedica and Genesis will have sufficient assets, income, access to
indemnification
financing
obligations. ProMedica and Genesis’s failure to effectively conduct their operations or to maintain and improve
our properties could adversely affect their business reputations and their ability to attract and retain patients and
residents in our properties, which, in turn, could adversely affect our business, results of operations and financial
condition. Additionally, we have made real estate and other loans to Genesis and their operational or other
failures could adversely impact their ability to repay these loans when due.
respective
them to
insurance
coverage
satisfy
enable
their
and
to
Ownership of property outside the U.S. may subject us to different or greater risks than those associated
with our domestic operations
We have operations in the U.K. and Canada which represent 8.8% and 9.1% of total Welltower revenues,
respectively. As of December 31, 2019, Revera managed 94 of our Seniors Housing Operating properties in
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Canada, representing a significant portion of our revenues, and also owned a controlling interest in Sunrise.
International development, ownership, and operating activities involve risks that are different from those we face
with respect
to our domestic properties and operations. These risks include, but are not limited to, any
international currency gain recognized with respect to changes in exchange rates, which may not qualify under
the 75% gross income test or the 95% gross income test required for us to satisfy annually in order to qualify and
maintain our status as a REIT; challenges with respect to the repatriation of foreign earnings and cash; impact
from international trade disputes and the associated impact on our tenants’ supply chain and consumer spending
levels; changes in foreign political, regulatory, and economic conditions (regionally, nationally and locally)
including, but not limited to, continuing uncertainty surrounding the process of Brexit and the macroeconomic
and regulatory effects of Brexit, including impacts on the U.K. real estate market; challenges in managing
international operations; challenges of complying with a wide variety of foreign laws and regulations, including
those relating to real estate, corporate governance, operations, taxes, employment and other civil and criminal
legal proceedings; foreign ownership restrictions with respect to operations in foreign countries; local businesses
and cultural factors that differ from our usual standards and practices; differences in lending practices and the
willingness of domestic or foreign lenders to provide financing; regional or country-specific business cycles and
political and economic instability; and failure to comply with applicable laws and regulations in the U.S. that
affect foreign operations, including, but not limited to, the U.S. Foreign Corrupt Practices Act. If we are unable
to successfully manage the risks associated with international expansion and operations, our results of operations
and financial condition may be adversely affected.
The business and financial results of our operations located in the U.K. may be negatively impacted as a
result of Brexit
The U.K.’s referendum on withdrawal from the EU in 2016 (commonly referred to as “Brexit”), and
subsequent notification of the U.K.’s intention to withdraw from the EU given in March 2017, have adversely
impacted global markets and foreign currencies. The terms governing the future relationship between the U.K.
and the EU, as well as the legal and economic consequences of those terms, remain unclear, including with
respect to the post-Brexit regulatory environment in the U.K. It is possible that the level of health care and other
economic activity in the U.K. and the rest of Europe will be adversely impacted and that we will face increased
regulatory and legal complexities in these regions which could have an adverse impact on the financial condition
and results of operations of our properties in the U.K.
Moreover, the value of the British Pound Sterling incurred significant fluctuations. If the value of the British
Pound Sterling continues to incur similar fluctuations, unfavorable exchange rate changes may negatively affect
the value of our operations located in the U.K., as translated to our reporting currency, the U.S. Dollar, in
accordance with U.S. GAAP, which may impact the revenue and earnings we report. Continued fluctuations in
the British Pound Sterling may also result in the imposition of price adjustments by E.U.-based suppliers to our
U.K. operations, as those suppliers seek to compensate for the changes in value of the British Pound Sterling as
compared to the European Euro.
If our tenants do not renew their existing leases, or if we are required to sell properties for liquidity reasons,
we may be unable to lease or sell the properties on favorable terms, or at all
We cannot predict whether our tenants will renew existing leases at the end of their lease terms, which
expire at various times. If these leases are not renewed, we would be required to find other tenants to occupy
those properties, or sell them. There can be no assurance that we would be able to identify suitable replacement
tenants or enter into leases with new tenants on terms as favorable to us as the current leases or that we would be
able to lease those properties at all. Our competitors may offer space at rental rates below current market rates or
below the rental rates we currently charge our customers, we may lose potential customers, and we may be
pressured to reduce our rental rates below those we currently charge to retain customers when leases expire. In
addition, our ability to reposition our properties with a suitable replacement tenant or operator could be
significantly delayed or limited by state licensing, receivership, CON or other laws, as well as by the Medicare
and Medicaid change-of-ownership rules, and we could incur substantial additional expenses in connection with
any licensing, receivership or change-of-ownership proceedings. Even if tenants decide to renew or lease new
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space, the terms of renewals or new leases, including the cost of required renovations or concessions to tenants,
may be less favorable to us than current lease terms.
Real estate investments are relatively illiquid and most of the property we own is highly customized for
specific uses. Our ability to quickly sell or exchange any of our properties in response to changes in operator,
economic and other conditions will be limited. No assurances can be given that we will recognize full value for
any property that we are required to sell. Our inability to respond rapidly to changes in the performance of our
investments could adversely affect our financial condition and results of operations. In addition, we are exposed
to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health
care industries. A downturn in the real estate industry could adversely affect the value of our properties and our
ability to sell properties for a price or on terms acceptable to us.
Our tenants, operators and managers may not have the necessary insurance coverage to insure adequately
against losses
We maintain or require our tenants, operators and managers to maintain comprehensive insurance coverage
on our properties and their operations with terms, conditions, limits and deductibles that we believe are
customary for similarly situated companies in our industry and we frequently review our insurance programs and
requirements. Our tenants, operators and manager may not be able to maintain adequate levels of insurance and
required coverages. Also, we may not be able to require the same levels of insurance coverage under our lease,
management and other agreements, which could adversely affect us in the event of a significant uninsured loss.
We cannot make any guarantee as to the future financial viability of the insurers that underwrite our policies and
the policies maintained by our tenants, operators and managers. Insurance may not be available at a reasonable
cost in the future or policies may not be maintained at a level that will fully cover all losses on our properties
upon the occurrence of a catastrophic event. This may be especially the case due to increases in property
insurance costs. In addition, in recent years, long-term/post-acute care and seniors housing operators and
managers have experienced substantial increases in both the number and size of patient care liability claims. As a
result, general and professional liability costs have increased in some markets. General and professional liability
insurance coverage may be restricted or very costly, which may adversely affect the tenants’, operators’ and
managers’ future operations, cash flows and financial conditions, and may have a material adverse effect on the
tenants’, operators’ and managers’ ability to meet their obligations to us.
Our ownership of properties through ground leases exposes us to the loss of such properties upon breach or
termination of the ground leases
We have acquired an interest in certain of our properties by acquiring a leasehold interest in the property on
which the building is located, and we may acquire additional properties in the future through the purchase of
interests in ground leases. Many of these ground leases impose significant limitations on our uses of the subject
properties, restrict our ability to sell or otherwise transfer our interests in the properties or restrict the leasing of
the properties. These restrictions may limit our ability to timely sell or exchange the properties, impair the
properties’ value or negatively impact our ability to find suitable tenants for the properties. As the lessee under a
ground lease, we are exposed to the possibility of losing the property upon termination of the ground lease or an
earlier breach of the ground lease by us.
The requirements of, or changes to, governmental reimbursement programs, such as Medicare, Medicaid or
government funding, could have a material adverse effect on our obligors’ liquidity, financial condition and
results of operations, which could adversely affect our obligors’ ability to meet their obligations to us
Some of our obligors’ businesses are affected by government reimbursement. To the extent that an operator/
tenant receives a significant portion of its revenues from government payors, primarily Medicare and Medicaid,
such revenues may be subject to statutory and regulatory changes, retroactive rate adjustments, recovery of
program overpayments or set-offs, court decisions, administrative rulings, policy interpretations, payment or
other delays by fiscal intermediaries or carriers, government funding restrictions (at a program level or with
respect to specific facilities), any lapse in Congressional funding of the Centers for Medicare and Medicaid
Services and interruption or delays in payments due to any ongoing government investigations and audits at such
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property. In recent years, government payors have frozen or reduced payments to health care providers due to
budgetary pressures. Federal and state authorities may continue seeking to implement new or modified
reimbursement methodologies that may negatively impact health care property operations. See “Item 1 —
Business — Certain Government Regulations — United States — Reimbursement” above for additional
information. Health care reimbursement will likely continue to be of paramount importance to federal and state
authorities. We cannot make any assessment as to the ultimate timing or effect any future legislative reforms may
have on the financial condition of our obligors and properties. There can be no assurance that adequate
reimbursement levels will be available for services provided by any property operator, whether the property
receives reimbursement from Medicare, Medicaid or private payors. Significant limits on the scope of services
reimbursed and on reimbursement rates and fees could have a material adverse effect on an obligor’s liquidity,
financial condition and results of operations, which could adversely affect the ability of an obligor to meet its
obligations to us.
Since January 1, 2014, the Health Reform Laws have provided those states that expand their Medicaid
coverage to otherwise eligible state residents with incomes at or below 138% of the federal poverty level with an
increased federal medical assistance percentage, effective January 1, 2014, when certain conditions are met.
Given that the federal government substantially funds the Medicaid expansion, it is unclear how many states will
ultimately pursue this option, although, as of early January 2020, more than 70% of the states have expanded
Medicaid coverage. The participation by states in the Medicaid expansion could have the dual effect of
increasing our tenants’ revenues, through new patients, but further straining state budgets and their ability to pay
our tenants.
The status of the Health Reform Laws may be subject to change as a result of political, legislative,
regulatory, and administrative developments and judicial proceedings. The current Presidential Administration
and U.S. Congress have sought to and may continue to seek to modify, repeal, or otherwise invalidate all, or
certain provisions of, the Health Reform Laws, including Medicaid expansion. Since taking office, President
Trump has continued to support the repeal of all or portions of the Health Reform Laws. See “Item 1 — Business
— Certain Government Regulations — United States — Reimbursement” above for additional information. If the
operations, cash flows or financial condition of our operators and tenants are materially adversely impacted by
the Health Reform Laws or future legislation, our revenue and operations may be adversely affected as well.
More generally, and because of the dynamic nature of the legislative and regulatory environment for health care
products and services, and in light of existing federal deficit and budgetary concerns, we cannot predict the
impact that broad-based, far-reaching legislative or regulatory changes could have on the U.S. economy, our
business, or that of our operators and tenants.
If controls imposed on certain of our tenants who provide health care services that are reimbursed by
Medicare, Medicaid and other third-party payors to reduce admissions and length of stay affect inpatient
volumes at our health care facilities, the financial condition or results of operations of those tenants could
be adversely affected
Controls imposed by Medicare, Medicaid and commercial third-party payors designed to reduce admissions
and lengths of stay, commonly referred to as “utilization reviews,” have affected and are expected to continue to
affect certain of our health care facilities, specifically our acute care hospitals and post-acute facilities.
Utilization review entails the review of the admission and course of treatment of a patient by managed care plans.
Inpatient utilization, average lengths of stay and occupancy rates continue to be negatively affected by payor-
required preadmission authorization and utilization review and by payor pressures to maximize outpatient and
alternative health care delivery services for less acutely ill patients. Efforts to impose more stringent cost controls
and reductions are expected to continue, which could negatively impact the financial condition of our tenants
who provide health care services in our hospitals and post-acute facilities. If so, this could adversely affect these
tenants’ ability and willingness to comply with the terms of their leases with us and/or renew those leases upon
expiration, which could have a material adverse effect on us.
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Our operators’ or tenants’ failure to comply with federal, state, province, local, and industry-regulated
licensure, certification and inspection laws, regulations, and standards could adversely affect such
operators’ or tenants’ operations, which could adversely affect our operators’ and tenants’ ability to meet
their obligations to us
Our operators and tenants generally are subject to or impacted by varying levels of federal, state, local, and
industry-regulated licensure, certification and inspection laws, regulations, and standards. These laws and
regulations include, among others: laws protecting consumers against deceptive practices; laws relating to the
operation of our properties and how our tenants and operators conduct their business, such as fire, health and
safety, data security and privacy laws; federal and state laws affecting hospitals, clinics and other health care
communities that participate in both Medicare and Medicaid that specify reimbursement rates, pricing,
reimbursement procedures and limitations, quality of services and care, background checks, food service and
physical plants, and similar foreign laws regulating the health care industry; resident rights laws (including abuse
and neglect laws) and fraud laws; anti-kickback and physician referral laws; the ADA and similar state and local
laws; and safety and health standards set by the Occupational Safety and Health Administration or similar foreign
agencies. Our operators’ or tenants’ failure to comply with any of these laws, regulations, or standards could
result in loss of accreditation, denial of reimbursement, imposition of fines, suspension, decertification or
exclusion from federal and state health care programs, civil liability, and in certain limited instances, criminal
penalties, loss of license, closure of the facility and/or the incurrence of considerable costs arising from an
investigation or regulatory action. Such actions may have an effect on our operators’ or tenants’ ability to make
lease payments to us and, therefore, adversely impact us. In addition, we may be directly subject to certain health
care fraud and abuse laws and data privacy laws, as well as potential investigation or enforcement, as a result of
our RIDEA-structured arrangements, and certain other arrangements we may pursue with healthcare entities who
are directly subject to these laws. See “Item 1 — Business — Certain Government Regulations — United States
— Fraud & Abuse Enforcement” and “Item 1 — Business — Certain Government Regulations — United States
— Health Care Matters — Generally” above.
Many of our properties may require a license, registration, and/or CON to operate. Failure to obtain a
license, registration, or CON, or loss of a required license, registration, or CON would prevent a facility from
operating in the manner intended by the operators or tenants. These events could materially adversely affect our
operators’ or tenants’ ability to make rent or other obligatory payments to us. State and local laws also may
regulate the expansion, including the addition of new beds or services or acquisition of medical equipment, and
the construction or renovation of health care facilities, by requiring a CON or other similar approval from a state
agency. See “Item 1 — Business — Certain Government Regulations — United States — Licensing and
Certification” above.
In addition, we cannot assure you that future changes in government regulation will not adversely affect the
health care industry, including our tenants and operators, nor can we be certain that our tenants and operators will
achieve and maintain occupancy and rate levels or labor cost levels that will enable them to satisfy their
obligations to us.
Changes in applicable tax regulations could negatively affect our financial results
We are subject to taxation in the U.S. and numerous foreign jurisdictions. Because the U.S. maintains a
worldwide corporate tax system, the foreign and U.S. tax systems are somewhat interdependent. Longstanding
international norms that determine each country’s jurisdiction to tax cross-border international trade are evolving
and could reduce the ability of our foreign subsidiaries to deduct for foreign tax purposes the interest they pay on
loans from us, thereby increasing the foreign tax liability of the subsidiaries; it is also possible that foreign
countries could increase their withholding taxes on dividends and interest. Given the unpredictability of these
possible changes and their potential interdependency, it is very difficult to assess the overall effect of such
potential tax changes on our earnings and cash flow, but such changes could adversely impact our financial
results.
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Unfavorable resolution of pending and future litigation matters and disputes could have a material adverse
effect on our financial condition
From time to time, we are directly involved in legal proceedings, lawsuits and other claims. We also are
named as defendants in lawsuits allegedly arising out of our actions or the actions of our operators/tenants or
managers in which such operators/tenants or managers have agreed to indemnify, defend and hold us harmless
from and against various claims, litigation and liabilities arising in connection with their respective businesses.
There can be no assurance that we will be able to prevail in, or achieve a favorable settlement of, pending or
future litigation. In addition, pending litigation or future litigation, government proceedings or environmental
matters could lead to increased costs or interruption of our normal business operations. An unfavorable resolution
of pending or future litigation or legal proceedings may have a material adverse effect on our business, results of
operations and financial condition. Regardless of its outcome, litigation may result in substantial costs and
expenses, significantly divert the attention of management, and could damage our reputation and our brand. In
addition, any such resolution could involve our agreement to terms that restrict the operation of our business. We
cannot guarantee losses incurred in connection with any current or future legal or regulatory proceedings or
actions will not exceed any provisions we may have set aside in respect of such proceedings or actions or will not
exceed any available insurance coverage.
Development, redevelopment and construction risks could affect our profitability
In connection with our renovation, redevelopment, development and related construction activities, we may
be unable to obtain, or suffer delays in obtaining, necessary zoning, land-use, building, occupancy and other
in increased costs or our
required governmental permits and authorizations. These factors could result
abandonment of these projects. In addition, we may not be able to obtain financing on favorable terms, which
may render us unable to proceed with our development activities, and we may not be able to complete
construction and lease-up of a property on schedule, which could result in increased debt service expense or
construction costs. Additionally, the time frame required for development, construction and lease-up of these
properties means that we may have to wait years for significant cash returns. Because we are required to make
cash distributions to our stockholders, if the cash flow from operations or refinancing is not sufficient, we may be
forced to borrow additional money to fund such distributions. We may be unable to obtain financing with
favorable terms, or at all, for the proposed development, which may cause us to delay or abandon an opportunity.
Newly developed and acquired properties may not produce the cash flow that we expect, which could adversely
affect our overall financial performance.
In deciding whether to acquire or develop a particular property, we make assumptions regarding the
expected future performance of that property. In particular, we estimate the return on our investment based on
expected occupancy, rental rates and capital costs. If our financial projections with respect to a new property are
inaccurate as a result of increases in capital costs or other factors, the property may fail to perform as we
expected in analyzing our investment. Our estimate of the costs of repositioning or redeveloping an acquired
property may prove to be inaccurate, which may result in our failure to meet our profitability goals. Additionally,
we may acquire new properties that are not fully leased, and the cash flow from existing operations may be
insufficient to pay the operating expenses and debt service associated with that property.
New facilities that we construct often require a CON and license before they can be utilized by the operator
for their intended use. The operator also may need to obtain Medicare and Medicaid certification and enter into
Medicare and Medicaid provider agreements and/or third-party payor contracts. In the event that the operator is
unable to obtain the necessary CON,
licensure, certification, provider agreements or contracts after the
completion of construction, there is a risk that we will not be able to earn any revenues on the facility until either
the initial operator obtains a license or certification to operate the new facility and the necessary provider
agreements or contracts or we find and contract with a new operator that is able to obtain a license to operate the
facility for its intended use and the necessary provider agreements or contracts.
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We may experience losses caused by severe weather conditions, natural disasters or the physical effects of
climate change, which could result in an increase of our or our tenants’ cost of insurance, unanticipated
costs associated with evacuation, a decrease in our anticipated revenues or a significant loss of the capital
we have invested in a property
We maintain or require our tenants to maintain comprehensive insurance coverage on our properties with
terms, conditions, limits and deductibles that we believe are appropriate given the relative risk and costs of such
coverage, and we frequently review our insurance programs and requirements. However, a large number of our
properties are located in areas particularly susceptible to revenue loss, cost increase or damage caused by severe
weather conditions or natural disasters such as hurricanes, earthquakes, tornadoes and floods, as well as the
effects of climate change. We believe, given current
industry practice and analysis prepared by outside
consultants, that our and our tenants’ insurance coverage is appropriate to cover reasonably anticipated losses
that may be caused by hurricanes, earthquakes, tornadoes, floods and other severe weather conditions and natural
disasters, including the effects of climate change. Nevertheless, we are always subject to the risk that such
insurance will not fully cover all losses and, depending on the severity of the event and the impact on our
properties, such insurance may not cover a significant portion of the losses including but not limited to the costs
associated with evacuation. These losses may lead to an increase of our and our tenants’ cost of insurance, a
decrease in our anticipated revenues from an affected property and a loss of all or a portion of the capital we have
invested in an affected property. In addition, we or our tenants may not purchase insurance under certain
circumstances if the cost of insurance exceeds, in our or our tenants’ judgment, the value of the coverage relative
to the risk of loss. Also, changes in federal and state legislation and regulation relating to climate change could
result in increased capital expenditures to improve the energy efficiency and resiliency of our existing properties
and could also necessitate us to spend more on our new development properties without a corresponding increase
in revenue.
To the extent that significant changes in the climate occur in areas where our communities are located, we
may experience extreme weather and changes in precipitation and temperature, all of which may result in
physical damage to or a decrease in demand for properties located in these areas or affected by these conditions.
Should the impact of climate change be material
including significant property damage to or
destruction of our communities, or occur for lengthy periods of time, our financial condition or results of
operations may be adversely affected. In addition, changes in federal, state and local legislation and regulation
based on concerns about climate change could result in increased capital expenditures on our existing properties
and our new development properties without a corresponding increase in revenue, resulting in adverse impacts to
our net income.
in nature,
We may incur costs to remediate environmental contamination at our properties, which could have an
adverse effect on our or our obligors’ business or financial condition
Under various laws, owners or operators of real estate may be required to respond to the presence or release
of hazardous substances on the property and may be held liable for property damage, personal injuries or
penalties that result from environmental contamination or exposure to hazardous substances. These laws often
impose liability without regard to whether the owner or operator knew of the release of the substances or caused
the release. We may become liable to reimburse the government for damages and costs it incurs in connection
with the contamination. Generally, such liability attaches to a person based on the person’s relationship to the
property. Our tenants or borrowers are primarily responsible for the condition of the property. Moreover, we
review environmental site assessments of the properties that we own or encumber prior to taking an interest in
them. Those assessments are designed to meet the “all appropriate inquiry” standard, which we believe qualifies
us for the innocent purchaser defense if environmental liabilities arise. Based upon such assessments, we do not
believe that any of our properties are subject to material environmental contamination. However, environmental
liabilities may be present in our properties and we may incur costs to remediate contamination, which could have
a material adverse effect on our business or financial condition or the business or financial condition of our
obligors.
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Cybersecurity incidents could disrupt our business and result in the loss of confidential information
Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain
unauthorized access to our confidential data through phishing or other malicious activity, attempts to interrupt
our access to or use of IT systems through distributed denial-of-service or ransomware attacks, breaches related
to our increased receipt and use of data from multiple sources, and other electronic security breaches or other
cybersecurity incidents, including those resulting from human error, product defects and technology failures.
Such cyber-attacks can range from individual attempts to gain unauthorized access to our information technology
systems to more sophisticated security threats, and may be specifically targeted to our business or more general
industry wide risks. Our information technology networks and related systems are essential to our ability to
perform day-to-day operations of our business. While we employ a number of measures to prevent, detect and
mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber-attack. Even the
most well-protected information, networks, systems and facilities remain potentially vulnerable because the
techniques used in such attempted cybersecurity breaches evolve and generally are not recognized until launched
against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly,
we may be unable to anticipate these techniques or to implement adequate cybersecurity barriers or other
preventative measures, and thus it is impossible for us to entirely mitigate this risk. In the past, we have
experienced cybersecurity breaches, which to date have not had a material impact on our operations; however,
there is no assurance that such impacts will not be material in the future. We must continuously monitor and
develop our systems to protect our technology infrastructure and data from misappropriation or corruption.
Cybersecurity incidents could disrupt our business, damage our reputation, cause us to incur significant
remediation expense and have a materially adverse effect on our business, financial condition and results of
operations. Cybersecurity breaches that compromise proprietary, personal identifying or confidential information
of our employees, operators, tenants and partners could result in legal claims or proceedings, including under
data privacy regulations.
Our success depends on key personnel whose continued service is not guaranteed
Our success depends on the continued availability and service of key personnel, including our executive
officers and other highly qualified employees, and competition for their talents is intense. There is substantial
competition for qualified personnel. We cannot assure you that we will retain our key personnel or that we will
be able to recruit and retain other highly qualified employees in the future. Losing any key personnel could, at
least temporarily, have a material adverse effect on our business, financial position and results of operations.
Risks Arising from Our Capital Structure
Our certificate of incorporation and by-laws contain anti-takeover provisions
Our certificate of incorporation and by-laws contain anti-takeover provisions (restrictions on share
ownership and transfer and super majority stockholder approval requirements for business combinations) that
could make it more difficult for or even prevent a third party from acquiring us without the approval of our
incumbent Board of Directors. Provisions and agreements that inhibit or discourage takeover attempts could
reduce the market value of our common stock.
We may become more leveraged
Permanent financing for our investments is typically provided through a combination of public offerings of
debt and equity securities and the incurrence or assumption of secured debt. The incurrence or assumption of
indebtedness may cause us to become more leveraged, which could (1) require us to dedicate a greater portion of
our cash flow to the payment of debt service, (2) make us more vulnerable to a downturn in the economy,
(3) limit our ability to obtain additional financing, (4) negatively affect our credit ratings or outlook by one or
more of the rating agencies or (5) make us more vulnerable to increases in interest rates because of the variable
interest rates on some of our borrowings to the extent we have not entirely hedged such variable rate debt.
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Cash available for distributions to stockholders may be insufficient to make dividend contributions at
expected levels and are made at the discretion of the Board of Directors
If cash available for distribution generated by our assets decreases due to dispositions or otherwise, we may
be unable to make dividend distributions at expected levels. Our inability to make expected distributions would
likely result in a decrease in the market price of our common stock. All distributions are made at the discretion of
our Board of Directors in accordance with Delaware law and depend on our earnings, our financial condition,
debt and equity capital available to us, our expectation of our future capital requirements and operating
performance, restrictive covenants in our financial and other contractual arrangements, maintenance of our REIT
qualification, restrictions under Delaware law and other factors as our Board of Directors may deem relevant
from time to time. Additionally, our ability to make distributions will be adversely affected if any of the risks
described herein, or other significant adverse events, occur.
We are subject to covenants in our debt agreements that could have a material adverse effect on our
business, results of operations and financial condition
Our debt agreements contain various covenants, restrictions and events of default. Among other things,
these provisions require us to maintain certain financial ratios and minimum net worth and impose certain limits
on our ability to incur indebtedness, create liens and make investments or acquisitions. Breaches of these
covenants could result in defaults under the instruments governing the applicable indebtedness, in addition to any
other indebtedness cross-defaulted against such instruments. These defaults could have a material adverse effect
on our business, results of operations and financial condition.
Limitations on our ability to access capital could have an adverse effect on our ability to make future
investments or to meet our obligations and commitments
We cannot assure you that we will be able to raise the capital necessary to make future investments or to
meet our obligations and commitments as they mature. Our access to capital depends upon a number of factors
over which we have little or no control, including rising interest rates, inflation and other general market
conditions; the market’s perception of our growth potential and our current and potential future earnings and cash
distributions; the market price of the shares of our common stock and the credit ratings of our debt securities;
changes in the credit ratings on U.S. government debt securities; uncertainty from the expected discontinuance of
LIBOR and the transition to any other interest rate benchmark; and default or delay in payment by the U.S. of its
obligations. We also rely on the financial institutions that are parties to our revolving credit facilities. If these
institutions become capital constrained, tighten their lending standards or become insolvent or if they experience
excessive volumes of borrowing requests from other borrowers within a short period of time, they may be unable
or unwilling to honor their funding commitments to us, which would adversely affect our ability to draw on our
revolving credit facilities and, over time, could negatively impact our ability to consummate acquisitions, repay
indebtedness as it matures, fund capital expenditures or make distributions to our stockholders. If our access to
capital is limited by these factors or other factors, it could negatively impact our ability to acquire properties,
repay or refinance our indebtedness, fund operations or make distributions to our stockholders.
Changes affecting the availability of the London Interbank Offered Rate (“LIBOR”) may have
consequences for us that cannot yet reasonably be predicted
We have outstanding debt, hedge agreements and receivable transactions with variable interest rates based
on LIBOR. The LIBOR benchmark has been subject of national, international, and other regulatory guidance and
proposals for reform. In July 2017, the U.K. Financial Conduct Authority, which regulates LIBOR, announced
that it intends to phase out LIBOR by the end of 2021. These reforms may cause LIBOR to perform differently
than in the past and LIBOR may ultimately cease to exist after 2021. While it is not currently possible to
determine precisely whether, or to what extent, the withdrawal and replacement of LIBOR would affect us, the
implementation of alternative benchmark rates to LIBOR may have an adverse effect on our business, results of
operations or financial condition. Any new benchmark rate will likely not replicate LIBOR exactly, which could
impact contracts that terminate after 2021. There is uncertainty about how applicable law, the courts or we will
address the replacement of LIBOR with alternative rates on agreements that do not include alternative rate
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fallback provisions. In addition, any changes to benchmark rates may have an uncertain impact on our cost of
funds and our access to the capital markets, which could impact our results of operations and cash flows.
Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our
securities. Additional financing, therefore, may be unavailable, more expensive or restricted by the terms of our
outstanding indebtedness.
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital
We plan to manage the company to maintain a capital structure consistent with our current profile, but there
can be no assurance that we will be able to maintain our current credit ratings. Any downgrades in terms of
ratings or outlook by any or all of the rating agencies could have a material adverse effect on our cost and
availability of capital, which could in turn have a material adverse effect on our results of operations, liquidity,
cash flows, the trading/redemption price of our securities and our ability to satisfy our debt service obligations
and to pay dividends and distributions to our equity holders.
Increases in interest rates could have a material adverse effect on our cost of capital
An increase in interest rates may increase interest cost on new and existing variable rate debt. Such
increases in the cost of capital could adversely impact our ability to finance operations, acquire and develop
properties, and refinance existing debt. Additionally, increased interest rates may also result in less liquid
property markets, limiting our ability to sell existing assets.
Fluctuations in the value of foreign currencies could adversely affect our results of operations and
financial position
Currency exchange rate fluctuations could affect our results of operations and financial position, including
exchange rate fluctuations resulting from Brexit. We generate a portion of our revenue and expenses in such
foreign currencies as the Canadian dollar and the British pound sterling. Although we may enter into foreign
exchange agreements with financial institutions and/or obtain local currency mortgage debt in order to reduce our
exposure to fluctuations in the value of foreign currencies, we cannot assure you that foreign currency
fluctuations will not have a material adverse effect on us.
Our entry into hedge agreements may not effectively reduce our exposure to changes in interest rates or
foreign currency exchange rates
We enter into hedge agreements from time to time to manage some of our exposure to interest rate and
foreign currency exchange rate volatility. These agreements involve risks, such as the risk that counterparties
may fail to honor their obligations under these arrangements, that the amount of income we earn from hedging
transactions may be limited by federal tax provisions governing REITs, and that these arrangements may cause
us to pay higher interest rates on our debt obligations than otherwise would be the case. In addition, these
arrangements may not be effective in reducing our exposure to changes in interest rates or foreign currency
exchange rates. When we use forward-starting interest rate swaps, there is a risk that we will not complete the
long-term borrowing against which the swap is intended to hedge. If such events occur, our results of operations
may be adversely affected.
Risks Arising from Our Status as a REIT
We might fail to qualify or remain qualified as a REIT
We intend to operate as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and
believe we have operated and will continue to operate in such a manner. If we lose our status as a REIT, we will
face serious income tax consequences that will substantially reduce the funds available for satisfying our
obligations and for distribution to our stockholders because:
• we would not be allowed a deduction for distributions to stockholders in computing our taxable income
and would be subject to U.S. federal income tax at regular corporate rates;
42
• we would be subject to increased state and local taxes; and
•
unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a
REIT for four taxable years following the year during which we were disqualified.
Since REIT qualification requires us to meet a number of complex requirements, it is possible that we may
fail to fulfill them, and if we do, our earnings will be reduced by the amount of U.S. federal and other income
taxes owed. A reduction in our earnings would affect the amount we could distribute to our stockholders. If we
do not qualify as a REIT, we will not be required to make distributions to stockholders, since a non-REIT is not
required to pay dividends to stockholders in order to maintain REIT status or avoid an excise tax. In addition, if
we fail to qualify as a REIT, all distributions to stockholders will continue to be treated as dividends to the extent
of our current and accumulated earnings and profits, although corporate stockholders may be eligible for the
dividends received deduction, and individual stockholders may be eligible for taxation at the rates generally
applicable to long-term capital gains with respect to distributions.
As a result of all these factors, our failure to qualify as a REIT also could impair our ability to implement
our business strategy and would adversely affect the value of our common stock. Qualification as a REIT
involves the application of highly technical and complex Code provisions for which there are only limited
judicial and administrative interpretations. The determination of various factual matters and circumstances not
entirely within our control may affect our ability to remain qualified as a REIT. Although we believe that we
qualify as a REIT, we cannot assure you that we will remain qualified as a REIT for U.S. federal income tax
purposes.
Certain subsidiaries might fail to qualify or remain qualified as a REIT
We own interests in a number of entities which have elected to be taxed as REITs for U.S. federal income
tax purposes, some of which we consolidate for financial reporting purposes but each of which is treated as a
separate REIT for federal income tax purposes (each a “Subsidiary REIT”). To qualify as a REIT, each
Subsidiary REIT must independently satisfy all of the REIT qualification requirements under the Code, together
with all other rules applicable to REITs. Provided that each Subsidiary REIT qualifies as a REIT, our interests in
the Subsidiary REITs will be treated as qualifying real estate assets for purposes of the REIT asset tests. If a
Subsidiary REIT fails to qualify as a REIT in any taxable year, such Subsidiary REIT will be subject to federal
and state income taxes and may not be able to qualify as a REIT for the four subsequent taxable years. Any such
failure could have an adverse effect on our ability to comply with the REIT income and asset tests, and thus our
ability to qualify as a REIT, unless we are able to avail ourselves of certain relief provisions.
The 90% annual distribution requirement will decrease our liquidity and may limit our ability to engage in
otherwise beneficial transactions
To comply with the 90% distribution requirement applicable to REITs and to avoid the nondeductible excise
tax, we must make distributions to our stockholders. Although we anticipate that we generally will have
sufficient cash or liquid assets to enable us to satisfy the REIT distribution requirement, it is possible that, from
time to time, we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement.
This may be due to timing differences between the actual receipt of income and actual payment of deductible
expenses, on the one hand, and the inclusion of that income and deduction of those expenses in arriving at our
taxable income, on the other hand. In addition, non-deductible expenses such as principal amortization or
repayments or capital expenditures in excess of non-cash deductions may cause us to fail to have sufficient cash
or liquid assets to enable us to satisfy the 90% distribution requirement. In the event that timing differences
occur, or we deem it appropriate to retain cash, we may borrow funds, even if the then-prevailing market
conditions are not favorable for these borrowings, issue additional equity securities (although we cannot assure
you that we will be able to do so), pay taxable stock dividends, if possible, distribute other property or securities
or engage in other transactions intended to enable us to meet the REIT distribution requirements. This may
require us to raise additional capital to meet our obligations.
43
Our use of TRSs is limited under the Code
Under the Code, no more than 20% of the value of the gross assets of a REIT may be represented by
securities of one or more TRSs. This limitation may affect our ability to increase the size of our TRSs’ operations
and assets, and there can be no assurance that we will be able to comply with the applicable limitation, or that
such compliance will not adversely affect our business. Also, our TRSs may not, among other things, operate or
manage certain health care facilities, which may cause us to forgo investments we might otherwise make.
Finally, we may be subject to a 100% excise tax on the income derived from certain transactions with our TRSs
that are not on an arm’s-length basis. We believe our arrangements with our TRSs are on arm’s-length terms and
intend to continue to operate in a manner that allows us to avoid incurring the 100% excise tax described above,
but there can be no assurance that we will be able to avoid application of that tax.
The lease of qualified health care properties to a taxable REIT subsidiary is subject to special requirements
We lease certain qualified health care properties to taxable REIT subsidiaries (or limited liability companies
of which the taxable REIT subsidiaries are members), which lessees contract with managers (or related parties)
to manage the health care operations at these properties. The rents from this taxable REIT subsidiary lessee
structure are treated as qualifying rents from real property if (1) they are paid pursuant to an arm’s-length lease of
a qualified health care property with a taxable REIT subsidiary and (2) the manager qualifies as an eligible
independent contractor (as defined in the Code). If any of these conditions are not satisfied, then the rents will
not be qualifying rents.
If certain sale-leaseback transactions are not characterized by the Internal Revenue Service (“IRS”) as
“true leases,” we may be subject to adverse tax consequences
We have purchased certain properties and leased them back to the sellers of such properties, and we may
enter into similar transactions in the future. We intend for any such sale-leaseback transaction to be structured in
such a manner that the lease will be characterized as a “true lease,” thereby allowing us to be treated as the owner
of the property for U.S. federal income tax purposes. However, depending on the terms of any specific
transaction, the IRS might take the position that the transaction is not a “true lease” but is more properly treated
in some other manner. In the event any sale-leaseback transaction is challenged and successfully re-characterized
by the IRS, we would not be entitled to claim the deductions for depreciation and cost recovery generally
available to an owner of property. Furthermore, if a sale-leaseback transaction were so re-characterized, we
might fail to satisfy the REIT asset tests or income tests and, consequently, could lose our REIT status effective
with the year of re-characterization. Alternatively, the amount of our REIT taxable income could be recalculated,
which may cause us to fail to meet the REIT annual distribution requirements for a taxable year.
We could be subject to changes in our tax rates, the adoption of new U.S. or international tax legislation, or
exposure to additional tax liabilities
We are subject to taxes in the U.S. and foreign jurisdictions. Our effective tax rates could be affected by
changes in the mix of earnings in countries with differing statutory tax rates or changes in tax laws or their
interpretation. We are also subject to the examination of our tax returns and other tax matters by the IRS and
other tax authorities and governmental bodies. We regularly assess the likelihood of an adverse outcome
resulting from these examinations to determine the adequacy of our provision for taxes. There can be no
assurance as to the outcome of these examinations. If we were subject to review or examination by the IRS or
applicable foreign jurisdiction as the result of any new tax law changes, the ultimate determination of which may
change our taxes owed for an amount in excess of amounts previously accrued or recorded, our financial
condition, operating results, and cash flows could be adversely affected.
The present federal income tax treatment of REITs may be modified, possibly with retroactive effect, by
legislative, judicial or administrative action at any time, which could affect the federal income tax treatment of an
investment in us. The federal income tax rules dealing with U.S. federal income taxation and REITs are
constantly under review by persons involved in the legislative process,
the IRS and the U.S. Treasury
Department, which results in statutory changes as well as frequent revisions to regulations and interpretations.
44
We cannot predict how changes in the tax laws might affect our investors or us. Revisions in federal tax laws and
interpretations thereof could significantly and negatively affect our ability to qualify as a REIT, as well as the tax
considerations relevant to an investment in us, or could cause us to change our investments and commitments.
Item 1B. Unresolved Staff Comments
None.
45
Item 2. Properties
We lease our corporate headquarters located at 4500 Dorr Street, Toledo, Ohio 43615. We also lease
corporate offices throughout the U.S., Canada, the United Kingdom and Luxembourg and have ground leases
relating to certain of our properties. The following table sets forth certain information regarding the properties
that comprise our consolidated real property and real estate loan investments as of December 31, 2019 (dollars in
thousands):
Property Location
Number of
Properties
Total
Investment
Annualized
Revenues(1)
Number of
Properties
Total
Investment
Annualized
Revenues(1)
Number of
Properties
Total
Investment
Annualized
Revenues(1)
Seniors Housing Operating
Triple-net
Outpatient Medical
— $
— — $
Alaska . . . . . . . . . . . . . . . — $
Alabama . . . . . . . . . . . . . .
2
Arkansas . . . . . . . . . . . . . . —
6
Arizona . . . . . . . . . . . . . . .
82
California . . . . . . . . . . . . .
11
Colorado . . . . . . . . . . . . . .
3
Connecticut
. . . . . . . . . . .
2
District Of Columbia . . . .
3
Delaware . . . . . . . . . . . . .
14
Florida . . . . . . . . . . . . . . .
9
Georgia . . . . . . . . . . . . . . .
4
Iowa . . . . . . . . . . . . . . . . .
1
Idaho . . . . . . . . . . . . . . . .
Illinois . . . . . . . . . . . . . . .
16
Indiana . . . . . . . . . . . . . . . —
3
Kansas . . . . . . . . . . . . . . .
2
Kentucky . . . . . . . . . . . . .
3
Louisiana . . . . . . . . . . . . .
19
Massachusetts . . . . . . . . .
8
Maryland . . . . . . . . . . . . .
1
Maine . . . . . . . . . . . . . . . .
6
Michigan . . . . . . . . . . . . .
3
Minnesota . . . . . . . . . . . . .
6
Missouri . . . . . . . . . . . . . .
2
Mississippi . . . . . . . . . . . .
Montana . . . . . . . . . . . . . .
1
2
North Carolina . . . . . . . . .
Nebraska . . . . . . . . . . . . . —
New Hampshire . . . . . . . . —
26
New Jersey . . . . . . . . . . . .
1
New Mexico . . . . . . . . . . .
4
Nevada . . . . . . . . . . . . . . .
27
New York . . . . . . . . . . . . .
17
Ohio . . . . . . . . . . . . . . . . .
2
Oklahoma . . . . . . . . . . . . .
1
Oregon . . . . . . . . . . . . . . .
14
Pennsylvania . . . . . . . . . .
1
South Carolina . . . . . . . . .
2
Tennessee . . . . . . . . . . . . .
33
Texas . . . . . . . . . . . . . . . .
2
Utah . . . . . . . . . . . . . . . . .
5
Virginia . . . . . . . . . . . . . .
24
Washington . . . . . . . . . . .
Wisconsin . . . . . . . . . . . . .
2
West Virginia . . . . . . . . . . —
370
Total domestic . . . . . . . . .
106
Canada . . . . . . . . . . . . . . .
57
United Kingdom . . . . . . .
163
. . . . . .
Total international
6,083
119,759
15,133
—
86,883
3,052,393
427,566
66,838
78,356
69,290
898,178
127,018
75,655
22,405
454,088
—
67,263
37,074
50,062
565,730
393,479
25,151
165,217
83,838
153,312
14,870
5,635
113,352
—
—
688,084
17,505
47,210
596,987
422,614
37,620
10,339
222,217
4,086
48,041
1,088,682
20,355
282,587
625,662
19,850
—
2
— —
32,517 —
23
688,631
12
87,463
17,820
8
14,540 —
7
25,484
51
144,974
3
38,612
28,926
7
5,433 —
25
— 28
27
15,133
6
14,461
1
15,957
9
113,921
90,687
24
11,995 —
18
32,231
11
15,771
1
25,085
1
8,354
1
4,484
50
19,680
4
—
4
—
41
210,140
1,548 —
1
23,816
4
141,993
34
66,041
20
3,650
1
2,678
71
67,864
8
7,121
4
16,259
37
234,874
1
7,875
27
77,302
7
137,873
4
8,493
3
—
586
11,180,625 2,585,528
6
452,734
2,150,044
66
352,658
1,634,009
72
805,392
3,784,053
— $
—
2,569
—
—
64,633
32,854
15,211
19,705
—
—
456,935
302,374
117,918
—
114,126
583,500
40,852
57,537
67
356,243
358,904
242,844
50,485
8,076
110,005
298,974
—
207,961
233,938
12,089
10,820
6,131
372,570
29,852
47,720
771,913
—
18,780
41,850
288,499
219,772
2,793
2
8
2
8
45
2
1
— —
9,544 —
42
56,682
13
3,570
1
5,884
2
—
7
31,919
10
45,696
5
27,460
1
4,187
840 —
7
16,484
12
18,155
1
—
3
20,225
9
21,552
11
854
1
—
767 —
26
54,641
2
4,418
1
7,341
15
84,672
3
—
8
3,767
18
7,271
9
35,030
2
25,505
2
818
1
837,818 116,500
3
3,069
37,460
9
4,791
37,879
53,592
393,201
71
2,103 —
23,614
6
29,811
281,446
9
10,254
93,483
8,640
67,702
5
5,107 —
45,336
383
10,341 —
4
4
146,737
7,201,172 836,416
1,228,409 106,336
1,375,146 116,677
$
33,628
41,421
—
46,998
529,060
236,915
7,734
55,317
108,941
164,034
62,249
6,792
—
110,662
283,567
18,601
70,250
182,594
201,245
37,866
—
479,061
32,943
12,038
407,653
29,424
100,851
434,793
125,346
22,736
55,131
34,315
33,762
177,859
29,810 $ (2,240 )
10,565
94,244
3,529
42,529
11,077
87,655
1,092,865 105,239
5,074
5,499
—
1,402
74,346
32,572
1,648
1,399
14,426
22,324
8,665
762
—
4,556
28,576
2,693
7,706
30,679
23,578
1,020
—
39,975
4,885
1,721
51,813
3,594
10,794
17,454
13,712
4,361
4,059
2,312
3,684
18,778
1,386,701 135,489
—
14,492
26,987
6,123
—
7,310,265 755,328
—
25,587
25,587
—
119,944
218,008
94,723
—
—
268,010
268,010
Grand total . . . . . . . . . . . .
533
$14,964,678 $3,390,920
658
$8,576,318 $953,093
387
$7,578,275 $780,915
(1) Represents revenue for the month ended December 31, 2019 annualized.
46
The following table sets forth occupancy and average annualized revenues for certain property types (excluding
investments in unconsolidated entities):
Occupancy(1)
Average Annualized Revenues(2)
2019
2018
2019
2018
Seniors Housing Operating(3) . . . . . . . . . . . . . . . . . . . .
Triple-net(4)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical(5) . . . . . . . . . . . . . . . . . . . . . . . . . .
86.9% 87.5% $56,329
84.3% 84.9% 14,578
34
94.1% 93.1%
$
60,635 per unit
12,831 per bed/unit
34 per sq. ft.
(1) We use unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy for properties other than
Outpatient Medical buildings and have not independently verified the information.
(2) Represents December annualized revenues divided by total beds, units or square feet as presented in the tables above.
(3) Occupancy represents average occupancy for the three months ended December 31.
(4) Occupancy represents average quarterly operating occupancy based on the quarters ended September 30 and excludes properties that are
unstabilized, closed or for which data is not available or meaningful.
(5) Occupancy represents the percentage of total rentable square feet leased and occupied (including month-to-month and holdover leases and
excluding terminations) as of December 31.
The following table sets forth information regarding lease expirations for certain portions of our portfolio as of
December 31, 2019 (dollars in thousands):
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Thereafter
Expiration Year(1)
Triple-net:
Properties . . . . . . . .
Base rent(2) . . . . . . . . $
% of base rent . . . . .
Units . . . . . . . . . . . .
% of units . . . . . . . .
Outpatient Medical:
11
3,782 $
0.5%
1,101
1.7%
7
12,292 $
1.6%
1,394
2.2%
10
8,889 $
1.1%
1,264
2.0%
1
840 $
0.1%
70
0.1%
4
11,262 $
1.5%
692
1.1%
48
76
53,216 $ 103,179 $
13.3%
6,085
3,033
6.9%
4.7%
9.5%
18
35,381 $
4.6%
2,350
3.7%
15
22,036 $
2.8%
1,633
2.6%
15
431
33,619 $ 492,113
4.3%
1,429
2.2%
63.3%
44,811
70.2%
. . . . . . . 1,748,858
2,053,686
2,165,074
2,158,927
2,230,230
1,305,946
1,670,290
1,025,948
1,052,671
48,233 $
8.2%
471
14.9%
57,464 $
9.8%
422
13.3%
58,846 $
10.0%
433
13.7%
58,295 $
9.9%
442
14.0%
65,687 $
11.2%
355
11.2%
34,681 $
5.9%
213
6.7%
42,112 $
7.2%
208
6.6%
25,805 $
4.4%
137
4.3%
27,501 $
4.7%
118
3.7%
1,148,176
6,183,564
29,829 $ 139,889
5.1%
152
4.8%
23.6%
214
6.8%
Square feet
Base rent(2) . . . . . . . . $
% of base rent . . . . .
Leases . . . . . . . . . . .
% of leases . . . . . . .
(1) Excludes investments in unconsolidated entities, developments, land parcels, loans receivable and sub-leases. Investments classified as held
for sale are included in 2020.
(2) The most recent monthly cash base rent annualized. Base rent does not include tenant recoveries or amortization of above and below market
lease intangibles or other non cash income.
Item 3.
Legal Proceedings
From time to time, there are various legal proceedings pending against us that arise in the ordinary course of our
business. Management does not believe that the resolution of any of these legal proceedings either individually or in
the aggregate will have a material adverse effect on our business, results of operations or financial condition. Further,
from time to time, we are party to certain legal proceedings for which third parties, such as tenants, operators and/or
managers are contractually obligated to indemnify, defend and hold us harmless. In some of these matters, the
indemnitors have insurance for the potential damages. In other matters, we are being defended by tenants and other
obligated third parties and these indemnitors may not have sufficient insurance, assets, income or resources to satisfy
their defense and indemnification obligations to us. The unfavorable resolution of such legal proceedings could,
individually or in the aggregate, materially adversely affect the indemnitors’ ability to satisfy their respective
obligations to us, which, in turn, could have a material adverse effect on our business, results of operations or financial
condition. It is management’s opinion that there are currently no such legal proceedings pending that will, individually
or in the aggregate, have such a material adverse effect. Despite management’s view of the ultimate resolution of these
legal expenses and costs associated with the defense of such
legal proceedings, we may have significant
matters. Further, management cannot predict the outcome of these legal proceedings and if management’s expectation
regarding such matters is not correct, such proceedings could have a material adverse effect on our business, results of
operations or financial condition.
Item 4. Mine Safety Disclosures
None.
47
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Our common stock trades on the New York Stock Exchange (NYSE:WELL). There were 3,564
PART II
stockholders of record as of January 31, 2020.
Stockholder Return Performance Presentation
Set forth below is a line graph comparing the yearly percentage change and the cumulative total stockholder
return on our shares of common stock against the cumulative total return of the S & P Composite-500 Stock
Index and the FTSE NAREIT Equity Index. As of December 31, 2019, 155 companies comprised the FTSE
NAREIT Equity Index, which consists of REITs identified by NAREIT as equity (those REITs which have at
least 75% of their investments in real property). The data are based on the closing prices as of December 31 for
each of the five years. 2014 equals $100 and dividends are assumed to be reinvested.
S&P 500
Welltower Inc.
FTSE NAREIT Equity
s
r
a
l
l
o
D
175
155
135
115
95
75
2014
2015
2016
2017
2018
2019
S & P 500
Welltower Inc.
FTSE NAREIT Equity
12/31/2014
12/31/2015
12/31/2016
12/31/2017
12/31/2018
12/31/2019
$100.00
$101.38
$113.51
$138.29
$132.23
$173.86
100.00
100.00
94.28
103.20
97.45
111.99
97.65
117.84
112.59
112.39
138.52
141.61
48
Except
to the extent
that we specifically incorporate this information by reference,
the foregoing
Stockholder Return Performance Presentation shall not be deemed incorporated by reference by any general
statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of
1933, as amended, or under the Securities Exchange Act of 1934, as amended. This information shall not
otherwise be deemed filed under such Acts.
Period
Issuer Purchases of Equity Securities
Total Number
of Shares
Purchased(1)
Average Price Paid
Per Share
Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs(2)
Maximum Number
of Shares that May Yet
Be Purchased Under
the Plans or
Programs
October 1, 2019 through October 31,
2019 . . . . . . . . . . . . . . . . . . . . . . . . .
4,546
$91.04
November 1, 2019 through
November 30, 2019 . . . . . . . . . . . . .
December 1, 2019 through
December 31, 2019 . . . . . . . . . . . . .
728
891
Totals . . . . . . . . . . . . . . . . . . . . . . . . . .
6,165
86.12
78.67
$89.43
(1) During the three months ended December 31, 2019, the company acquired shares of common stock held by employees who tendered
owned shares to satisfy tax withholding obligations.
(2) No shares were purchased as part of publicly announced plans or programs.
49
Item 6.
Selected Financial Data
The following selected financial data for the five years ended December 31, 2019 are derived from our
audited consolidated financial statements (in thousands, except per share data):
Year Ended December 31,
2015
2016
2017
2018
2019
$3,859,826
3,223,709
$4,281,160
3,571,907
$4,316,641
4,017,025
$4,700,499
4,277,009
$5,121,306
4,578,414
Operating Data
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations before income taxes
and other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax (expense) benefit
. . . . . . . . . . . . . . . . . . . . .
Income (loss) from unconsolidated entities . . . . . . . . . . .
. . . . . . . . . . .
Gain (loss) on real estate dispositions, net
636,117
(6,451)
(21,504)
280,387
709,253
19,128
(10,357)
364,046
Income from continuing operations . . . . . . . . . . . . . . . .
888,549
1,082,070
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock redemption charge . . . . . . . . . . . . . . . . .
Net income (loss) attributable to noncontrolling
888,549
65,406
—
1,082,070
65,406
—
299,616
(20,128)
(83,125)
344,250
540,613
540,613
49,410
9,769
423,490
(8,674)
(641)
415,575
542,892
(2,957)
42,434
748,041
829,750
1,330,410
829,750
46,704
—
1,330,410
—
—
interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,799
4,267
17,839
24,796
97,978
Net income attributable to common stockholders . . . . . .
$ 818,344
$1,012,397
$ 463,595
$ 758,250
$1,232,432
Other Data
Average number of common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
348,240
349,424
358,275
360,227
367,237
369,001
373,620
375,250
401,845
403,808
Per Share Data
Basic:
Income from continuing operations . . . . . . . . . . . . . .
Net income attributable to common stockholders . . . .
Diluted:
Income from continuing operations . . . . . . . . . . . . . .
Net income attributable to common stockholders . . . .
Cash distributions per common share . . . . . . . . . . . . . . .
$
$
$
$
$
2.55
2.35
2.54
2.34
3.30
$
$
$
$
$
3.02
2.83
3.00
2.81
3.44
$
$
$
$
$
1.47
1.26
1.47
1.26
3.48
$
$
$
$
$
2.22
2.03
2.21
2.02
3.48
$
$
$
$
$
3.31
3.07
3.29
3.05
3.48
2015
2016
2017
2018
2019
December 31,
Balance Sheet Data
Net real estate investments(1) . . . . . . . . . . . $26,888,685 $26,563,629 $26,171,077 $28,420,769 $31,119,271
33,380,751
Total assets . . . . . . . . . . . . . . . . . . . . . . . .
15,388,765
Total debt and lease obligations(1) . . . . . . .
16,398,247
Total liabilities . . . . . . . . . . . . . . . . . . . . .
—
Total preferred stock . . . . . . . . . . . . . . . . .
16,506,627
Total equity . . . . . . . . . . . . . . . . . . . . . . . .
28,865,184
12,358,245
13,185,279
1,006,250
15,281,472
27,944,445
11,731,936
12,643,799
718,503
14,925,452
30,342,072
13,297,144
14,331,427
718,498
15,586,599
29,023,845
12,967,686
13,664,877
1,006,250
15,175,885
(1) Effective January 1, 2019, we adopted new guidance on leases using the prospective method. See Note 2 to the consolidated financial
statements for further details.
50
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
EXECUTIVE SUMMARY
Company Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Key Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Key Performance Indicators, Trends and Uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Off-Balance Sheet Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RESULTS OF OPERATIONS
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Seniors Housing Operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Segment/Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52
52
53
55
57
57
58
59
59
60
62
64
67
70
OTHER
Non-GAAP Financial Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Critical Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
77
51
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis is based primarily on the consolidated financial statements of
Welltower Inc. presented in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for
the periods presented and should be read together with the notes thereto contained in this Annual Report on
Form 10-K. Other important factors are identified in “Item 1 — Business” and “Item 1A — Risk Factors” above.
Executive Summary
Company Overview
Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the
transformation of health care infrastructure. The company invests with leading seniors housing operators, post-
acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care
delivery models and improve people’s wellness and overall health care experience. Welltower™, a real estate
investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United
States (“U.S.”), Canada and the United Kingdom (“U.K.”), consisting of seniors housing and post-acute
communities and outpatient medical properties. Our capital programs, when combined with comprehensive
planning, development and property management services, make us a single-source solution for acquiring,
planning, developing, managing, repositioning and monetizing real estate assets.
The following table summarizes our consolidated portfolio for the year ended December 31, 2019 (dollars in
thousands):
Type of Property
NOI(1)
Percentage of
NOI
Number of
Properties
Seniors Housing Operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical
$1,039,520
918,743
469,035
42.8%
37.9%
19.3%
533
658
387
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,427,298
100.0%
1,578
(1) Represents consolidated net operating income (“NOI”) and excludes our share of investments in unconsolidated entities. Entities in
which we have a joint venture with a minority partner are shown at 100% of the joint venture amount. See Non-GAAP Financial
Measures for additional information and reconciliation.
Business Strategy
Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay
consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders
as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest
across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by
property type, relationship and geographic location.
Substantially all of our revenues are derived from operating lease rentals, resident fees/services and interest
earned on outstanding loans receivable. These items represent our primary sources of liquidity to fund
distributions and depend upon the continued ability of our obligors to make contractual rent and interest
payments to us and the profitability of our operating properties. To the extent that our obligors/partners
experience operating difficulties and become unable to generate sufficient cash to make payments or operating
distributions to us, there could be a material adverse impact on our consolidated results of operations, liquidity
and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods
determined by the type of property. Our asset management process for seniors housing properties generally
includes review of monthly financial statements and other operating data for each property, review of obligor/
partner creditworthiness, property inspections and review of covenant compliance relating to licensure, real
estate taxes, letters of credit and other collateral. Our internal property management division manages and
monitors the outpatient medical portfolio with a comprehensive process including review of tenant relations,
lease expirations, the mix of health service providers, hospital/health system relationships, property performance,
52
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
capital improvement needs and market conditions among other things. We evaluate the operating environment in
each property’s market to determine the likely trend in operating performance of the facility. When we identify
unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we generally aim
to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of
revenue and the value of our investment.
In addition to our asset management and research efforts, we also aim to structure our relevant investments
to mitigate payment risk. Operating leases and loans are normally credit enhanced by guarantees and/or letters of
credit. In addition, operating leases are typically structured as master leases and loans are generally cross-
defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the
obligor and its affiliates.
For the year ended December 31, 2019, resident fees/services and rental income represented 67% and 31%,
respectively, of total revenues. Substantially all of our operating leases are designed with escalating rent
structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the
initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental
escalators is generally recorded based on the contractual cash rental payments due for the period. Our yield on
loans receivable depends upon a number of factors, including the stated interest rate, the average principal
amount outstanding during the term of the loan and any interest rate adjustments.
Our primary sources of cash include resident fees and services, rent and interest receipts, borrowings under
our unsecured revolving credit facility and commercial paper program, public issuances of debt and equity
securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses
of cash include dividend distributions, debt service payments (including principal and interest), real property
investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan
advances, property operating expenses and general and administrative expenses. Depending upon the availability
and cost of external capital, we believe our liquidity is sufficient to fund these uses of cash.
We also continuously evaluate opportunities to finance future investments. New investments are generally
funded from temporary borrowings under our unsecured revolving credit facility and commercial paper program,
internally generated cash and the proceeds from investment dispositions. Our investments generate cash from
NOI and principal payments on loans receivable. Permanent financing for future investments, which replaces
funds drawn under our unsecured revolving credit facility and commercial paper program, has historically been
provided through a combination of the issuance of public debt and equity securities and the incurrence or
assumption of secured debt.
Depending upon market conditions, we believe that new investments will be available in the future with
spreads over our cost of capital that will generate appropriate returns to our stockholders. It is also likely that
investment dispositions exceed new
investment dispositions may occur in the future. To the extent
investments, our revenues and cash flows from operations could be adversely affected. We expect to reinvest the
proceeds from any investment dispositions in new investments. To the extent that new investment requirements
exceed our available cash on-hand, we expect to borrow under our unsecured revolving credit facility and
commercial paper program. At December 31, 2019, we had $284,917,000 of cash and cash equivalents,
$100,849,000 of restricted cash and $1,411,400,000 of available borrowing capacity under our unsecured
revolving credit facility.
that
Key Transactions
Capital
The following summarizes key capital transactions that occurred and supported new investments
made during the year ended December 31, 2019:
•
In January 2019, we established an unsecured commercial paper program. Under the terms of the
program, we may issue, from time to time, unsecured commercial paper with maturities that vary, but
do not exceed 397 days from the date of issue, up to a maximum aggregate principal amount
outstanding at any time of $1,000,000,000.
53
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
•
•
•
•
•
•
•
•
In February 2019, we elected to effect the mandatory conversion of all of the outstanding 6.50% Series
I Cumulative Convertible Preferred Stock. Each share of convertible stock was converted into 0.8857
shares of common stock.
In February 2019, we entered into an amended and restated Equity Shelf Program (as defined below)
pursuant to which we may offer and sell up to $1,500,000,000 of common stock from time to time. We
sold 18,591,000 shares of common stock under our current and previous Equity Shelf Programs and
DRIP (as defined below), via both cash settle and forward sale agreements, generating expected gross
proceeds of approximately $1,498,731,000.
In February 2019, we completed the issuance of $500,000,000 of 3.625% senior unsecured notes due
2024 and $550,000,000 of 4.125% senior unsecured notes due 2029 for net proceeds of approximately
$1,036,964,000.
In March 2019 we repaid our $600,000,000 of 4.125% senior unsecured notes due 2019 and
$450,000,000 of 6.125% senior unsecured notes due 2020.
In August 2019, we completed the issuance of $750,000,000 of 3.10% senior unsecured notes due 2030
and a follow-on issuance of $450,000,000 of 3.625% senior unsecured notes due 2024 priced to yield
2.494%, for net proceeds of approximately $1,209,328,000.
In September 2019, we repaid our $450,000,000 of 4.95% senior unsecured notes due 2021 and
$600,000,000 of 5.25% senior unsecured notes due 2022.
In December 2019, we completed the issuance of $500,000,000 of 2.70% senior unsecured notes due
2027. The net proceeds of approximately $495,066,000 will be used to fund renewable energy, water
conservation, energy efficiency and green building projects. Additionally, we completed the issuance
of $300,000,000 of 2.95% Canadian-denominated senior unsecured notes due 2027 generating net
proceeds of approximately CAD $297,668,000.
In December 2019, we redeemed all of the outstanding $300,000,000 Canadian-denominated 3.35%
senior unsecured notes due 2020.
• We extinguished $230,108,000 of secured debt at a blended average interest rate of 4.35% throughout
2019.
Investments The following summarizes property acquisitions and joint venture investments made during
the year ended December 31, 2019 (dollars in thousands):
Properties
Investment
Amount(1)
Capitalization
Rates(2)
Book
Amount(3)
Seniors Housing Operating . . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
Outpatient Medical
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62
10
105
177
$1,459,254
217,658
2,396,642
$4,073,554
5.1%
6.5%
5.6%
5.4%
$1,802,836
227,379
2,491,159
$4,521,374
(1) Represents stated pro rata purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S.
GAAP.
(2) Represents annualized contractual or projected NOI to be received in cash divided by investment amounts.
(3) Represents amounts recorded in real property including fair value adjustments pursuant to U.S. GAAP. See Note 3 to our consolidated
financial statements for additional information.
54
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Dispositions The following summarizes property dispositions made during the year ended December 31,
2019 (dollars in thousands):
Properties
Proceeds(1)
Capitalization
Rates(2)
Book
Amount(3)
Seniors Housing Operating(4) . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical(5) . . . . . . . . . . . . . . . . . . .
55
57
1
$1,803,413
902,731
8,500
5.4%
7.9%
10.5%
$1,232,816
667,632
482
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
113
$2,714,644
6.3%
$1,900,930
(1) Represents pro rata proceeds received upon disposition.
(2) Represents annualized contractual net operating income that was being received in cash at date of disposition divided by disposition
proceeds.
(3) Represents carrying value of assets at time of disposition. See Note 5 to our consolidated financial statements for additional information.
(4)
Includes the disposition of an unconsolidated real estate investment.
(5) Reflects the disposition of an excess land parcel.
Dividends Our Board of Directors announced the 2020 annual cash dividend of $3.48 per common share
($0.87 per share quarterly), consistent with 2019, beginning in February 2020. The dividend declared for the
quarter ended December 31, 2019 represents the 195th consecutive quarterly dividend payment.
Key Performance Indicators, Trends and Uncertainties
We utilize several key performance indicators to evaluate the various aspects of our business. These
indicators are discussed below and relate to operating performance, credit strength and concentration risk.
Management uses these key performance indicators to facilitate internal and external comparisons to our
historical operating results, in making operating decisions, and for budget planning purposes.
Operating Performance We believe that net income and net income attributable to common stockholders
(“NICS”) per the Statement of Comprehensive Income are the most appropriate earnings measures. Other useful
supplemental measures of our operating performance include funds from operations attributable to common
stockholders (“FFO”) and consolidated net operating income (“NOI”); however, these supplemental measures are
not defined by U.S. GAAP. Please refer to the section entitled “Non-GAAP Financial Measures” for further
discussion and reconciliations. These earnings measures are widely used by investors and analysts in the
valuation, comparison and investment recommendations of companies. The following table reflects the recent
historical trends of our operating performance measures for the periods presented (in thousands):
Year Ended December 31,
2019
2018
2017
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,330,410 $ 829,750 $ 540,613
463,595
Net income attributable to common stockholders . . . . . . . . . . . .
1,165,576
Funds from operations attributable to common stockholders . . .
2,232,716
Consolidated net operating income . . . . . . . . . . . . . . . . . . . . . . .
1,232,432
1,577,080
2,431,264
758,250
1,392,183
2,267,482
Credit Strength We measure our credit strength both in terms of leverage ratios and coverage ratios. The
leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt, net of cash and
Internal Revenue Code (“IRC”) section 1031 deposits. The coverage ratios indicate our ability to service interest
and fixed charges (interest, secured debt principal amortization and preferred dividends). We expect to maintain
capitalization ratios and coverage ratios sufficient to maintain a capital structure consistent with our current
profile. The coverage ratios are based on adjusted earnings before interest, taxes, depreciation and amortization
55
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(“Adjusted EBITDA”). Please refer to the section entitled “Non-GAAP Financial Measures” for further
discussion and reconciliation of these measures. Leverage ratios and coverage ratios are widely used by
investors, analysts and rating agencies in the valuation, comparison, investment recommendations and rating of
companies. The following table reflects the recent historical trends for our credit strength measures for the
periods presented:
Year Ended
December 31,
2019
2018
2017
Net debt to book capitalization ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net debt to undepreciated book capitalization ratio . . . . . . . . . . . . . . . . . . . . .
Net debt to market capitalization ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted interest coverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.14x
Adjusted fixed charge coverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.78x
46.5% 45.0% 42.9%
39.4% 37.8% 36.3%
29.6% 31.3% 31.2%
4.11x
3.44x
4.36x
3.54x
Concentration Risk We evaluate our concentration risk in terms of NOI by property mix, relationship mix
and geographic mix. Concentration risk is a valuable measure in understanding what portion of our NOI could be
at risk if certain sectors were to experience downturns. Property mix measures the portion of our NOI that relates
to our various property types. Relationship mix measures the portion of our NOI that relates to our current top
five relationships. Geographic mix measures the portion of our NOI that relates to our current top five states (or
international equivalents). The following table reflects our recent historical trends of concentration risk by NOI
for the years indicated below:
December 31,(1)
2019
2018
2017
Property mix:
Seniors Housing Operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43% 43% 40%
38% 40% 43%
19% 17% 17%
Relationship mix:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sunrise Senior Living(2)
ProMedica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revera(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Genesis HealthCare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Belmont Village . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14% 15% 14%
4% —%
9%
7%
7%
6%
9%
6%
5%
3%
3%
3%
63% 65% 67%
Geographic mix:
California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13% 14% 13%
9%
9%
8%
7%
8%
8%
8%
8%
7%
8%
7%
7%
57% 54% 55%
(1) Excludes our share of investments in unconsolidated entities and non-segment/corporate NOI. Entities in which we have a joint venture
with a minority partner are shown at 100% of the joint venture amount.
(2) Revera owns a controlling interest in Sunrise Senior Living.
56
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
We evaluate our key performance indicators in conjunction with current expectations to determine if
historical trends are indicative of future results. Our expected results may not be achieved and actual results may
differ materially from our expectations. Factors that may cause actual results to differ from expected results are
described in more detail
in “Item 1 — Business — Cautionary Statement Regarding Forward-Looking
Statements” and “Item 1A — Risk Factors” and other sections of this Annual Report on Form 10-K.
Management regularly monitors economic and other factors to develop strategic and tactical plans designed to
improve performance and maximize our competitive position. Our ability to achieve our financial objectives is
dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic
and company-specific trends. Please refer to “Item 1 — Business,” “Item 1A — Risk Factors” in this Annual
Report on Form 10-K for further discussion of these risk factors.
Corporate Governance
Maintaining investor confidence and trust is important in today’s business environment. Our Board of
Directors and management are strongly committed to policies and procedures that reflect the highest level of
ethical business practices. Our corporate governance guidelines provide the framework for our business
operations and emphasize our commitment to increase stockholder value while meeting all applicable legal
requirements. These guidelines meet the listing standards adopted by the New York Stock Exchange and are
available on the Internet at www.welltower.com/investors/governance. The information on our website is not
incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive
textual reference only.
Liquidity and Capital Resources
Sources and Uses of Cash
Our primary sources of cash include resident fees and services, rent and interest receipts, borrowings under
our unsecured revolving credit facility and commercial paper program, public issuances of debt and equity
securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses
of cash include dividend distributions, debt service payments (including principal and interest), real property
investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan
advances, property operating expenses and general and administrative expenses. These sources and uses of cash
are reflected in our Consolidated Statements of Cash Flows and are discussed in further detail below. The
following is a summary of our sources and uses of cash flows for the periods presented (dollars in thousands):
Two Year
Change
$
Year Ended
December 31,
2017
One Year
Change
$
One Year
Change
$
December 31,
2018
December 31,
2019
Year Ended
%
%
%
Cash, cash equivalents and
restricted cash at beginning
of period . . . . . . . . . . . . . . . . $
Net cash provided from
(used in):
Operating activities . . . . . . .
Investing activities . . . . . . . .
Financing activities . . . . . . .
Effect of foreign currency
316,129 $
309,303 $
6,826
2% $
607,220 $ (297,917) -49% $ (291,091) -48%
1,535,968
(2,048,791)
577,150
1,583,944
(2,386,471) 337,680 -14%
(47,976)
154,581 (2,541,052) n/a
818,368 (241,218) -29% (1,913,527) 2,731,895 n/a
-3% 1,434,177
149,767
10%
7%
101,791
(2,203,372) n/a
2,490,677 n/a
translation . . . . . . . . . . . . . .
5,310
(9,015)
14,325 n/a
26,852
(35,867) n/a
(21,542) -80%
Cash, cash equivalents and
restricted cash at end of
period . . . . . . . . . . . . . . . . . . $
385,766 $
316,129 $ 69,637 22% $
309,303 $
6,826
2% $
76,463 25%
Operating Activities The change in net cash provided from operating activities is attributable to changes in
NOI, which is primarily due to acquisitions and annual rent increasers, partially offset by dispositions. Please see
“Results of Operations” below for further discussion. For the years ended December 31, 2019, 2018 and 2017,
cash flows from operations exceeded cash distributions to stockholders.
57
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Investing Activities The changes in net cash used in investing activities are primarily attributable to net
changes in real property investments, loans receivable and investments in unconsolidated entities which are
summarized above in “Key Transactions.” Please refer to Notes 3, 7, and 8 of our consolidated financial
statements for additional information. The following is a summary of cash used in non-acquisition capital
improvement activities for the periods presented (dollars in thousands):
. . . . . . . . . . .
New development
Recurring capital expenditures,
tenant improvements and
lease commissions . . . . . . . . .
Renovations, redevelopments
and other capital
improvements . . . . . . . . . . . . .
Year Ended
December 31,
2019
December 31,
2018
One Year
Change
$
%
Year Ended
December 31,
2017
One Year
Change
Two Year
Change
$
%
$
%
$323,488
$160,706
$162,782 101% $232,715
$(72,009) -31% $ 90,773
39%
136,535
90,190
46,345
51%
67,797
22,393
33% 68,738 101%
192,289
175,993
16,296
9% 182,479
(6,486)
-4%
9,810
5%
Total . . . . . . . . . . . . . . . . . . . . . .
$652,312
$426,889
$225,423
53% $482,991
$(56,102) -12% $169,321
35%
The change in new development is primarily due to the number and size of construction projects on-going
during the relevant periods. Renovations, redevelopments and other capital improvements include expenditures
to maximize property value, increase net operating income, maintain a market-competitive position and/or
achieve property stabilization.
Financing Activities The changes in net cash provided from financing activities are primarily attributable
to changes related to our long-term debt arrangements, the issuance/redemptions of common and preferred stock
and dividend payments which are summarized above in “Key Transactions.” Please refer to Notes 10, 11 and 14
of our consolidated financial statements for additional information.
Off-Balance Sheet Arrangements
At December 31, 2019, we had investments in unconsolidated entities with our ownership generally ranging
from 10% to 50%. We use financial derivative instruments to hedge interest rate and foreign currency exchange
rate exposure. At December 31, 2019, we had thirteen outstanding letter of credit obligations. Please see Notes 8,
12 and 13 to our consolidated financial statements for additional information.
58
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Contractual Obligations
The following table summarizes our payment
requirements under contractual obligations as of
December 31, 2019 (in thousands):
Contractual Obligations
Total
2020
2021-2022
2023-2024
Thereafter
Unsecured revolving credit facility and
commercial paper(1,2) . . . . . . . . . . . . . . . . . . . . . $ 1,588,600 $ 643,600 $
— $ 945,000 $
—
Payments Due by Period
Senior unsecured notes and term credit
facilities:(2)
U.S. Dollar senior unsecured notes . . . . . . . . . .
Canadian Dollar senior unsecured notes(3)
. . . .
Pounds Sterling senior unsecured notes(3) . . . . .
U.S. Dollar term credit facility . . . . . . . . . . . . .
Canadian Dollar term credit facility(3) . . . . . . . .
Secured debt:(2,3)
8,100,000
231,446
1,393,245
510,000
192,871
—
—
—
—
—
5,650,000
— 2,450,000
—
—
231,446
— 1,393,245
—
—
10,000
—
500,000
— 192,871
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unconsolidated . . . . . . . . . . . . . . . . . . . . . . . . .
2,993,342
826,396
354,329
57,728
861,052
52,172
771,911
95,783
1,006,050
620,713
Contractual interest obligations:(4)
Unsecured revolving credit facility and
Senior unsecured notes and term loans(3)
Consolidated secured debt(3)
Unconsolidated secured debt(3)
commercial paper . . . . . . . . . . . . . . . . . . . . .
. . . . .
. . . . . . . . . . . . . . .
. . . . . . . . . . . . .
Financing lease liabilities(5) . . . . . . . . . . . . . . . . . .
Operating lease obligations(5)
. . . . . . . . . . . . . . . .
Purchase obligations(6) . . . . . . . . . . . . . . . . . . . . . .
86,065
4,144,774
510,973
179,382
186,335
1,185,632
727,558
25,302
410,322
101,577
28,056
9,121
23,356
536,105
48,610
838,436
163,885
52,130
16,935
45,469
150,656
12,153
735,197
100,441
39,623
70,601
43,411
27,787
—
2,160,819
145,070
59,573
89,678
1,073,396
13,010
Total contractual obligations . . . . . . . . . . . . . . . . . $22,856,619 $2,189,496 $2,239,345 $5,984,778 $12,443,000
(1) Relates to our unsecured revolving credit facility and commercial paper with an aggregate commitment of $3,000,000,000. See Note 10
to our consolidated financial statements.
(2) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected
on the balance sheet.
(3) Based on foreign currency exchange rates in effect as of balance sheet date.
(4) Based on variable interest rates in effect as of December 31, 2019.
(5) See Note 6 to our consolidated financial statements for additional information.
(6) See Note 13 to our consolidated financial statements for additional information.
Capital Structure
Please refer to “Credit Strength” above for a discussion of our leverage and coverage ratio trends. Our debt
agreements contain various covenants, restrictions and events of default. Certain agreements require us to
maintain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness,
create liens and make investments or acquisitions. As of December 31, 2019, we were in compliance with all of
the covenants under our debt agreements. None of our debt agreements contain provisions for acceleration which
could be triggered by our debt ratings. However, under our primary unsecured credit facility, the ratings on our
senior unsecured notes are used to determine the fees and interest charged. We plan to manage the company to
maintain compliance with our debt covenants and with a capital structure consistent with our current profile. Any
59
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse
impact on our cost and availability of capital, which could in turn have a material adverse impact on our
consolidated results of operations, liquidity and/or financial condition.
On May 17, 2018, we filed with the Securities and Exchange Commission (1) an open-ended automatic or
“universal” shelf registration statement covering an indeterminate amount of future offerings of debt securities,
common stock, preferred stock, depositary shares, warrants and units and (2) a registration statement
in
connection with our enhanced dividend reinvestment plan (“DRIP”) under which we may issue up to 15,000,000
shares of common stock. As of January 31, 2020, 2,728,696 shares of common stock remained available for
issuance under the DRIP registration statement. On February 25, 2019, we entered into separate amended and
restated equity distribution agreements with each of Barclays Capital Inc., Citigroup Global Markets Inc., Credit
Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan
Securities LLC, KeyBanc Capital Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, UBS Securities LLC and
Wells Fargo Securities, LLC relating to the offer and sale from time to time of up to $1,500,000,000 aggregate
amount of our common stock (“Equity Shelf Program”), which replaced our existing equity shelf program
entered into on August 3, 2018. The Equity Shelf Program also allows us to enter into forward sale
agreements. As of January 31, 2020, we had $1,075,537,000 of remaining capacity under the Equity Shelf
Program, which excludes forward sales agreements outstanding for the sale of 6,799,978 shares with maturity
dates in 2020 and 2021. We expect to physically settle the forward sales for cash proceeds. Depending upon
market conditions, we anticipate issuing securities under our registration statements to invest in additional
properties and to repay borrowings under our unsecured revolving credit facility and commercial paper program.
Results of Operations
Summary
Our primary sources of revenue include resident fees and services, rent and interest income. Our primary
expenses include interest expense, depreciation and amortization, property operating expenses, other expenses
and general and administrative expenses. We evaluate our business and make resource allocations on our three
business segments: Seniors Housing Operating, Triple-net and Outpatient Medical. The primary performance
measures for our properties are NOI and SSNOI and other supplemental measures include FFO and Adjusted
EBITDA, which are further discussed below. Please see “Non-GAAP Financial Measures” for additional
information and reconciliations related to these supplemental measures.
This section of this Form 10-K generally discusses 2019 and 2018 items and year-to-year comparisons
between 2019 and 2018. Discussions of 2017 items and year-to-year comparisons between 2018 and 2017 that
are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2018.
60
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a summary of our results of operations for the periods presented (dollars in thousands,
except per share amounts):
Year Ended
December 31,
2019
December 31,
2018
One Year
Change
Amount %
Year Ended
December 31,
2017
One Year
Change
Two Year
Change
Amount % Amount %
Net income . . . . . . . . . . . . . . . . . $1,330,410
$ 829,750 $500,660 60% $ 540,613 $289,137 53% $789,797 146%
NICS . . . . . . . . . . . . . . . . . . . . .
1,232,432
758,250
474,182 63%
463,595
294,655 64% 768,837 166%
FFO . . . . . . . . . . . . . . . . . . . . . .
1,577,080
1,392,183
184,897 13% 1,165,576
226,607 19% 411,504
35%
Adjusted EBITDA . . . . . . . . . . .
2,328,202
2,153,005
175,197
8% 2,128,429
24,576 1% 199,773
Consolidated NOI . . . . . . . . . . .
2,431,264
2,267,482
163,782
7% 2,232,716
34,766 2% 198,548
9%
9%
Per share data (fully diluted):
Net income attributable to
common stockholders . . . . $
3.05
$
2.02 $
1.03 51% $
1.26 $
0.76 60% $
1.79 142%
Funds from operations
attributable to common
stockholders . . . . . . . . . . . . $
Adjusted interest coverage
3.91
$
3.71 $
0.20
5% $
3.16 $
0.55 17% $
0.75
24%
ratio . . . . . . . . . . . . . . . . . . . .
4.14x
4.11x
0.03x
1%
4.36x
-0.25x -6%
-0.22x
-5%
Adjusted fixed charge coverage
ratio . . . . . . . . . . . . . . . . . . . .
3.78x
3.44x
0.34x 10%
3.54x
-0.10x -3%
0.24x
7%
The following table represents the changes in outstanding common stock for the period from January 1,
2017 to December 31, 2019 (in thousands):
December 31,
2019
Year Ended
December 31,
2018
December 31,
2017
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend reinvestment plan issuances . . . . . . . . . . . . . .
Preferred stock conversions . . . . . . . . . . . . . . . . . . . . . .
Redemption of equity membership units . . . . . . . . . . . .
Option exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity Shelf Program issuances . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net
383,675
5,799
12,712
—
11
7,856
204
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
410,257
371,732
6,529
—
—
57
5,241
116
383,675
362,602
5,640
4
91
253
2,987
155
Totals
362,602
17,968
12,716
91
321
16,084
475
371,732
410,257
Average number of shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
401,845
403,808
373,620
375,250
367,237
369,001
During the past three years, inflation has not significantly affected our earnings because of the moderate
inflation rate. Additionally, a portion of our earnings are derived primarily from long-term investments with
predictable rates of return. These investments are mainly financed with a combination of equity, senior unsecured
notes, secured debt and borrowings under our primary unsecured credit facility. During inflationary periods,
which generally are accompanied by rising interest rates, our ability to grow may be adversely affected because
the yield on new investments may increase at a slower rate than new borrowing costs. Presuming the current
inflation rate remains moderate and long-term interest rates do not increase significantly, we believe that
inflation will not impact the availability of equity and debt financing for us.
61
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Seniors Housing Operating
The following is a summary of our same store NOI (“SSNOI”) for the Seniors Housing Operating segment
for the years presented (dollars in thousands):
2018 and 2019 Same
Store Pool
One Year Change
2017 and 2018 Same
Store Pool
One Year Change
2019
2018
$
%
2018
2017
$
%
SSNOI(1)
. . . . . . . . . . . .
$699,867
$701,493
$(1,626)
-0.2% $816,416
$824,415
$(7,999)
-1.0%
(1) Relates to 341 properties for the 2018 and 2019 Same Store Pool and 390 properties for the 2017 and 2018 Same Store Pool.
The following is a summary of our results of operations for the Seniors Housing Operating segment for the
years presented (dollars in thousands):
Year Ended
December 31,
2019
December 31,
2018
One Year
Change
$
%
Year Ended
December 31,
2017
One Year
Change
Two Year
Change
$
%
$
%
Revenues:
Resident fees and services . . . . . . . . . .
$3,448,175
$3,234,852
$213,323
7% $2,779,423
$455,429
16% $668,752
24%
Interest income . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . .
36
8,658
578
5,024
(542)
3,634
-94%
72%
69
5,127
509 738%
(33) -48%
(103)
-2%
3,531
69%
Total revenues . . . . . . . . . . . . . . . . . . .
3,456,869
3,240,454
216,415
7% 2,784,619
455,835
16% 672,250
Property operating expenses . . . . . . . . . .
2,417,349
2,255,432
161,917
7% 1,904,593
350,839
18% 512,756
24%
27%
NOI(1)
. . . . . . . . . . . . . . . . . . . . . . . . . .
1,039,520
985,022
54,498
6%
880,026
104,996
12% 159,494
18%
Other expenses:
Depreciation and amortization . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . .
Loss (gain) on extinguishment of debt,
net . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . .
553,189
67,983
1,614
2,145
26,348
529,449
23,740
69,060
(1,077)
4%
-2%
484,796
63,265
44,653
5,795
9% 68,393
14%
9%
4,718
7%
110
7,599
6,624
1,504
1,367%
3,785
(3,675)
-97% (2,171) -57%
(5,454)
19,724
-72%
298%
21,949
(14,350)
-65% (19,804) -90%
8,347
(1,723)
-21% 18,001 216%
651,279
612,842
38,437
6%
582,142
30,700
5% 69,137
12%
Income (loss) from continuing operations
before income taxes and other items . .
Income tax benefit (expense) . . . . . . . . . .
Income (loss) from unconsolidated
388,241
6,246
372,180
16,061
4%
297,884
74,296
25% 90,357
30%
1,202
5,044
420%
(16,430)
17,632 107% 22,676 138%
entities . . . . . . . . . . . . . . . . . . . . . . . . .
12,388
(28,142)
40,530
144% (105,236)
77,094
73% 117,624 112%
Gain (loss) on real estate dispositions,
net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
528,747
(2,245)
530,992 23,652%
56,295
(58,540) -104% 472,452 839%
Income from continuing operations . . . . .
935,622
342,995
592,627
173%
232,513
110,482
48% 703,109 302%
Net income (loss) . . . . . . . . . . . . . . . . . . .
935,622
342,995
592,627
173%
232,513
110,482
48% 703,109 302%
Less: Net income (loss) attributable to
noncontrolling interests . . . . . . . . . . . .
56,513
(660)
57,173
8,663%
8,472
(9,132) -108% 48,041 567%
Net income (loss) attributable to common
stockholders . . . . . . . . . . . . . . . . . . . . .
$ 879,109
$ 343,655
$535,454
156% $ 224,041
$119,614
53% $655,068 292%
(1) See Non-GAAP Financial Measures below.
Fluctuations in resident fees and services and property operating expenses are primarily a result of
acquisitions, segment
transitions and the movement of U.S. and foreign currency exchange rates. The
fluctuations in depreciation and amortization are due to acquisitions and variations in amortization of short-lived
intangible assets. To the extent that we acquire or dispose of additional properties in the future, these amounts
will change accordingly.
62
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
During the three years presented, we recorded impairment charges on certain held for sale and held for use
properties as the carrying value exceeded the estimated fair values. The fluctuations in gains (losses) on real
estate dispositions are due to the volume of property sales and sales prices. The significant gain on real estate
dispositions recognized during the year ended December 31, 2019 is related to the sale of the Benchmark Senior
Living portfolio. Transaction costs related to asset acquisitions are capitalized as a component of the purchase
price. The increase in other expenses during the year ended December 31, 2019 is primarily due to additional
noncapitalizable transaction costs associated with acquisitions and operator transitions.
During the year ended December 31, 2019, we completed two Seniors Housing Operating construction
projects representing $28,117,000 or $109,405 per unit. The following is a summary of our Seniors Housing
Operating construction projects, excluding expansions, pending as of December 31, 2019 (dollars in thousands):
Location
Units/Beds
Commitment
Balance
Wandsworth, UK . . . . . . . . . . . . . . . . . . . . . . . .
Taylor, PA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beavercreek, OH . . . . . . . . . . . . . . . . . . . . . . . .
Potomac, MD . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beckenham, UK . . . . . . . . . . . . . . . . . . . . . . . . .
Hendon, UK . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Barnet, UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97
113
100
120
100
102
100
732
$ 78,221
14,272
12,032
56,720
62,497
74,041
68,335
$ 69,877
12,405
11,561
23,145
27,423
33,698
28,499
$366,118
206,608
Toronto, ON . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Washington, DC . . . . . . . . . . . . . . . . . . . . . . . . .
Brookline, MA . . . . . . . . . . . . . . . . . . . . . . . . . .
Project in planning stage
Project in planning stage
Project in planning stage
43,854
18,394
17,382
$268,873
Est.
Completion
1Q20
1Q20
1Q20
4Q20
3Q21
4Q21
4Q21
Interest expense represents secured debt interest expense which fluctuates based on the net effect and timing
of assumptions, segment
transitions, fluctuations in foreign currency rates, extinguishments and principal
amortizations. The fluctuations in loss (gain) on extinguishment of debt is primarily attributable to the volume of
extinguishments and terms of the related secured debt. The following is a summary of our Seniors Housing
Operating property secured debt principal activity (dollars in thousands):
Year Ended December 31, 2019 Year Ended December 31, 2018 Year Ended December 31, 2017
Amount
Weighted Avg.
Interest Rate
Amount
Weighted Avg.
Interest Rate
Amount
Weighted Avg.
Interest Rate
Beginning balance . . . . . .
Debt transferred in . . . . . .
Debt issued . . . . . . . . . . .
Debt assumed . . . . . . . . .
Debt extinguished . . . . . .
Debt transferred out . . . . .
Debt deconsolidated . . . .
Principal payments . . . . .
Foreign currency . . . . . . .
$1,810,587
—
343,696
183,061
(219,864)
(12,072)
—
(43,997)
53,626
3.87%
—%
3.11%
4.58%
4.28%
3.89%
—%
3.45%
3.33%
$1,988,700
35,830
45,447
121,612
(240,095)
—
—
(47,886)
(93,021)
3.66%
3.84%
3.40%
5.55%
4.83%
—%
—%
3.59%
3.31%
$2,463,249
—
228,772
—
(668,804)
—
(60,000)
(47,153)
72,636
Ending balance . . . . . . . .
$2,115,037
3.54%
$1,810,587
3.87%
$1,988,700
Monthly averages . . . . . .
$1,966,892
3.70%
$1,915,663
3.74%
$2,065,477
3.94%
—%
2.72%
—%
4.81%
—%
3.80%
3.60%
3.23%
3.66%
3.66%
63
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The majority of our Seniors Housing Operating properties are formed through partnership interests. The
increase in income (loss) from unconsolidated entities are largely due to a gain on the disposition of an
unconsolidated entity during the year ended December 31, 2019. Net income attributable to noncontrolling
interests represents our partners’ share of net income (loss) related to joint ventures. The increase during the year
ended December 31, 2019 relates primarily to our partner’s share of the gain recognized on the sale of the
Benchmark Senior Living portfolio.
Triple-net
The following is a summary of our SSNOI for the Triple-net segment for the periods presented (dollars in
thousands):
2018 and 2019 Same
Store Pool
One Year
Change
2017 and 2018 Same
Store Pool
One Year
Change
2019
2018
$
%
2018
2017
$
%
SSNOI(1)
. . . . . . . . . . . . .
$516,340
$508,897
$7,443
1.5% $516,008
$508,257
$7,751
1.5%
(1) Relates to 368 properties for the 2018 and 2019 Same Store Pool and 366 properties for the 2017 and 2018 Same Store Pool.
64
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a summary of our results of operations for the Triple-net segment for the years presented
(dollars in thousands):
Year Ended
December 31,
2019
December 31,
2018
One Year
Change
$
%
Year Ended
December 31,
2017
One Year
Change
Two Year
Change
$
%
$
%
Revenues:
Rental income . . . . . . . . . . . . .
$903,798
$828,865
$ 74,933
9% $885,811
$ (56,946)
-6% $ 17,987
Interest income . . . . . . . . . . . .
Other income . . . . . . . . . . . . . .
Total revenues . . . . . . . . . . . . . . .
Property operating expenses . . . .
62,599
6,246
972,643
53,900
54,926
17,173
7,673
14%
(10,927)
-64%
73,742
7,531
(18,816)
-26% (11,143)
9,642
128%
(1,285)
900,964
71,679
8%
967,084
(66,120)
-7%
5,559
1%
915
52,985 5,791%
—
915
n/a
53,900
n/a
2%
-15%
-17%
NOI(1)
. . . . . . . . . . . . . . . . . . .
918,743
900,049
18,694
2%
967,084
(67,035)
-7% (48,341)
-5%
Other expenses:
Depreciation and
amortization . . . . . . . . . . . .
Interest expense . . . . . . . . . . . .
Loss (gain) on derivatives and
. .
financial instruments, net
Loss (gain) on extinguishment
. . . . . . . . . . . . .
of debt, net
Provision for loan losses . . . . .
Impairment of assets . . . . . . . .
Other expenses(2) . . . . . . . . . . .
Income from continuing
operations before income taxes
and other items . . . . . . . . . . . .
Income tax benefit (expense) . . .
Income (loss) from
232,626
12,892
235,480
14,225
(2,854)
(1,333)
-1%
-9%
243,830
15,194
(8,350)
-3% (11,204)
-5%
(969)
-6%
(2,302)
-15%
(4,399)
(4,016)
(383)
-10%
2,284
(6,300) -276%
(6,683)
-293%
—
18,690
11,926
13,771
(32)
—
107,980
90,975
32
100%
18,690
n/a
(96,054)
(77,204)
-89%
-85%
29,083
62,966
96,909
116,689
(29,115) -100% (29,083)
-100%
(62,966) -100% (44,276)
11,071
(25,714)
11% (84,983)
-22% (102,918)
-70%
-88%
-88%
285,506
444,612
(159,106)
-36%
566,955
(122,343)
-22% (281,449)
-50%
633,237
(4,209)
455,437
177,800
39%
400,129
55,308
14% 233,108
1,611
(5,820)
-361%
(4,291)
5,902
138%
82
58%
2%
unconsolidated entities . . . . . .
22,985
21,938
1,047
5%
19,428
2,510
13%
3,557
18%
Gain (loss) on real estate
dispositions, net
. . . . . . . . . . .
218,322
196,589
21,733
11%
286,325
(89,736)
-31% (68,003)
-24%
Income from continuing
operations . . . . . . . . . . . . . . . .
870,335
675,575
194,760
29%
701,591
(26,016)
-4% 168,744
Net income . . . . . . . . . . . . . . . . .
870,335
675,575
194,760
29%
701,591
(26,016)
-4% 168,744
24%
24%
Less: Net income attributable to
noncontrolling interests . . . . . .
36,271
19,306
16,965
88%
4,603
14,703
319%
31,668
688%
Net income attributable to
common stockholders . . . . . . .
$834,064
$656,269
$ 177,795
27% $696,988
$ (40,719)
-6% $ 137,076
20%
(1) See Non-GAAP Financial Measures below.
(2) See Note 18 to our consolidated financial statements.
The increase to rental income for the year ended December 31, 2019 is primarily attributable to acquisitions
including Quality Care Properties (“QCP”) in July 2018. In addition, we have recorded certain real estate
property taxes on a gross basis, with the offset to property operating expenses, as a result of our ASC 842
adoption on January 1, 2019. These increases are partially offset by the disposition or segment transition of
various properties. Certain of our leases contain annual rental escalators that are contingent upon changes in the
Consumer Price Index (“CPI”) and/or changes in the gross operating revenues of the tenant’s properties. These
escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the
65
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
contractual cash rental payments due for the period. If gross operating revenues at our facilities and/or the CPI do
not increase, a portion of our revenues may not continue to increase. Our leases could renew above or below
current rent rates, resulting in an increase or decrease in rental income. For the three months ended December 31,
2019, we had 20 leases with rental rate increasers ranging from 0.12% to 0.76% in our Triple-net portfolio. The
increase in other income for the year ended December 31, 2018 is primarily due to $10,805,000 of net lease
termination fees recognized.
Depreciation and amortization decreased primarily as a result of the disposition of triple-net properties
exceeding acquisition and segment transitions. To the extent we acquire or dispose of additional properties in the
future, our provision for depreciation and amortization will change accordingly.
During the year ended December 31, 2019, we recognized a provision for loan loss of $18,690,000 to fully
reserve for and eventually wrote off certain real estate loans receivable that are no longer deemed collectible.
During the years presented, we recorded impairment charges on certain held for sale and held for use
properties as the carrying value exceeded the estimated fair values. The fluctuations in gains on real estate
dispositions are due to the volume of property sales and sales prices. Transaction costs related to asset
acquisitions are capitalized as a component of purchase price. The fluctuations in other expenses is primarily due
noncapitalizable transaction costs from acquisitions, segment transitions and the termination/restructuring of
preexisting relationships. During the year ended December 31, 2018, we recognized $79,576,000 related to a
joint venture transaction, including the conversion of properties from Triple-net to Seniors Housing Operating
and termination/restructuring of preexisting relationships.
During the year ended December 31, 2019, there were no construction projects completed. The following is
a summary of Triple-net construction projects, excluding expansions, pending as of December 31, 2019 (dollars
in thousands):
Location
Units/Beds
Commitment
Balance
Est. Completion
Union, KY . . . . . . . . . . . . . . . . . . . . . . . . . .
Westerville, OH . . . . . . . . . . . . . . . . . . . . . .
Droitwich, UK . . . . . . . . . . . . . . . . . . . . . . .
Thousand Oaks, CA . . . . . . . . . . . . . . . . . . .
Redhill, UK . . . . . . . . . . . . . . . . . . . . . . . . .
Leicester, UK . . . . . . . . . . . . . . . . . . . . . . . .
Wombourne, UK . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
162
102
70
82
76
60
66
618
$ 34,600
22,800
16,805
24,763
21,098
14,861
15,923
$25,649
19,922
11,730
9,971
6,287
3,505
3,515
$150,850
$80,579
1Q20
1Q20
2Q20
4Q20
1Q21
1Q21
2Q21
66
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Total interest expense represents secured debt interest expense and related fees. The change in secured debt
interest expense is due to the net effect and timing of assumptions, segment transitions, fluctuations in foreign
currency rates, extinguishments and principal amortizations. The fluctuations in loss (gain) on extinguishment of
debt is primarily attributable to the volume of extinguishments and terms of the related secured debt. The
fluctuation in loss (gain) on derivatives and financial
is primarily attributable to the
mark-to-market adjustment recorded on our Genesis HealthCare available-for-sale investment. The following is a
summary of our Triple-net secured debt principal activity for the periods presented (dollars in thousands):
instruments, net
Year Ended December 31, 2019 Year Ended December 31, 2018 Year Ended December 31, 2017
Beginning balance . . . . .
Debt transferred in . . . . .
Debt issued . . . . . . . . . . .
Debt extinguished . . . . .
Debt transferred out . . . .
Principal payments . . . . .
Foreign currency . . . . . .
Amount
$288,386
12,072
—
—
—
(4,017)
9,597
Ending balance . . . . . . . .
$306,038
Weighted Avg.
Interest Rate
3.63%
3.89%
—%
—%
—%
5.21%
2.99%
3.60%
Amount
$347,474
—
—
(4,107)
(35,830)
(3,982)
(15,169)
$288,386
Weighted Avg.
Interest Rate
3.55%
—%
—%
4.94%
3.84%
5.38%
3.44%
3.63%
Amount
$ 594,199
—
13,000
(274,048)
—
(5,863)
20,186
$ 347,474
Monthly averages . . . . . .
$294,080
3.63%
$321,730
3.51%
$ 408,688
Weighted Avg.
Interest Rate
4.58%
—%
4.57%
5.95%
—%
5.66%
2.91%
3.55%
3.91%
A portion of our triple-net properties were formed through partnerships. Income or loss from unconsolidated
entities represents our share of net income or losses from partnerships where we are the noncontrolling
partner. Net income attributable to noncontrolling interests represents our partners’ share of net income relating
to those partnerships where we are the controlling partner.
Outpatient Medical
The following is a summary of our SSNOI for the Outpatient Medical segment for the periods presented
(dollars in thousands):
2018 and 2019 Same
Store Pool
One Year
Change
2017 and 2018 Same
Store Pool
One Year
Change
2019
2018
$
%
2018
2017
$
%
SSNOI(1)
. . . . . . . . . . . . .
$311,612
$308,139
$3,473
1.1% $343,059
$336,990
$6,069
1.8%
(1) Relates to 197 properties for the 2018 and 2019 Same Store Pool and 224 properties for the 2017 and 2018 Same Store Pool.
67
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a summary of our results of operations for the Outpatient Medical segment for the periods
presented (dollars in thousands):
Year Ended
December 31,
2019
December 31,
2018
One Year
Change
$
%
Year Ended
December 31,
2017
One Year
Change
Two Year
Change
$
%
$
%
Revenues:
Rental income . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . .
Total revenues . . . . . . . . . . . . .
Property operating expenses . . . .
$684,602
1,195
2,031
687,828
218,793
$551,557
310
4,939
556,806
176,670
$ 133,045
885
(2,908)
24% $560,060
—
285%
3,340
-59%
$ (8,503)
310
1,599
-2% $124,542
n/a
1,195
48% (1,309)
131,022
42,123
24%
24%
563,400
179,332
(6,594)
(2,662)
-1% 124,428
-1% 39,461
22%
n/a
-39%
22%
22%
NOI(1) . . . . . . . . . . . . . . . . . . . .
469,035
380,136
88,899
23%
384,068
(3,932)
-1% 84,967
22%
Other expenses:
Depreciation and
amortization . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . .
Loss (gain) on extinguishment
of debt, net . . . . . . . . . . . . . .
Impairment of assets . . . . . . . .
Other expenses . . . . . . . . . . . . .
241,258
13,411
—
14,062
1,788
185,530
7,051
11,928
—
7,570
55,728
6,360
30%
90%
193,094
10,015
(7,564)
(2,964)
-4% 48,164
3,396
-30%
25%
34%
(11,928)
14,062
(5,782)
-100%
n/a
-76%
4,373
5,625
1,911
7,555
(5,625)
5,659
173% (4,373) -100%
150%
8,437
-100%
-6%
(123)
296%
270,519
212,079
58,440
28%
215,018
(2,939)
-1% 55,501
26%
Income from continuing
operations before income taxes
and other item . . . . . . . . . . . . . .
Income tax benefit (expense) . . . .
Income (loss) from
unconsolidated entities . . . . . . .
Gain (loss) on real estate
198,516
(2,710)
168,057
(125)
18%
30,459
(2,585) -2,068%
169,050
(1,477)
(993)
1,352
-1% 29,466
92% (1,233)
17%
-83%
7,061
5,563
1,498
27%
2,683
2,880
107%
4,378
163%
dispositions, net . . . . . . . . . . . .
972
221,231
(220,259)
-100%
1,630
219,601 13,472%
(658)
-40%
Income from continuing
operations . . . . . . . . . . . . . . . . .
203,839
394,726
(190,887)
-48%
171,886
222,840
130% 31,953
19%
Net income (loss) . . . . . . . . . . . . .
Less: Net income (loss)
attributable to noncontrolling
interests . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to
203,839
394,726
(190,887)
-48%
171,886
222,840
130% 31,953
19%
5,194
6,150
(956)
-16%
4,765
1,385
29%
429
9%
common stockholders . . . . . . .
$198,645
$388,576
$(189,931)
-49% $167,121
$221,455
133% $ 31,524
19%
(1) See Non-GAAP Financial Measures below.
The fluctuations in rental income are primarily attributable to the acquisitions of new properties and the
conversion of newly constructed outpatient medical properties, particularly the $1.25 billion CNL Healthcare
Properties portfolio acquisition that closed in May 2019, partially offset by dispositions. Certain of our leases
contain annual rental escalators that are contingent upon changes in the CPI. These escalators are not fixed, so no
straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments
due for the period. If the CPI does not increase, a portion of our revenues may not continue to increase. Our
leases could renew above or below current rent rates, resulting in an increase or decrease in rental income. For
the three months ended December 31, 2019, our consolidated outpatient medical portfolio signed 193,173 square
feet of new leases and 424,579 square feet of renewals. The weighted-average term of these leases was six years,
with a rate of $31.95 per square foot and tenant improvement and lease commission costs of $23.59 per square
foot. Substantially all of these leases contain an annual fixed or contingent escalation rent structure ranging from
2.0% to 3.5%.
68
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The fluctuation in property operating expenses and depreciation and amortization are primarily attributable
to acquisitions and construction conversions of new outpatient medical facilities, offset by dispositions. To the
extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly.
We recognized impairment charges related to certain held for sale properties as the carrying values exceeded the
estimated fair values less costs to sell. Changes in gains/losses on sales of properties are related to volume of
property sales and the sales prices.
During the year ended December 31, 2019, we completed one Outpatient Medical construction project
representing $21,006,000 or $286 per square foot. The following is a summary of Outpatient Medical
construction projects pending as of December 31, 2019 (dollars in thousands):
Location
Square Feet
Commitment
Balance
Est. Completion
Porter, TX . . . . . . . . . . . . . . . . . . . . . . . . . .
Lowell, MA . . . . . . . . . . . . . . . . . . . . . . . . .
Katy, TX . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brooklyn, NY . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55,000
50,668
36,500
140,955
283,123
$ 20,800
11,900
12,028
105,306
$150,034
$ 16,124
10,288
3,251
80,799
$110,462
1Q20
1Q20
2Q20
3Q20
Total interest expense represents secured debt interest expense. The change in secured debt interest expense
is primarily due to the net effect and timing of assumptions, extinguishments and principal amortizations. The
fluctuations in loss (gain) on extinguishment of debt is primarily attributable the volume of extinguishments and
terms of the related secured debt. The following is a summary of our Outpatient Medical secured debt principal
activity for the periods presented (dollars in thousands):
Year Ended December 31, 2019 Year Ended December 31, 2018 Year Ended December 31, 2017
Beginning balance . . . . .
Debt assumed . . . . . . . .
Debt extinguished . . . . .
Principal payments . . . .
Amount
$386,738
202,084
(10,244)
(6,311)
Ending balance . . . . . . .
$572,267
Monthly averages . . . . .
$397,756
Weighted Avg.
Interest Rate
4.20%
4.12%
5.75%
4.97%
3.97%
4.15%
Amount
$279,951
171,275
(61,291)
(3,197)
$386,738
Weighted Avg.
Interest Rate
4.72%
3.99%
7.43%
5.91%
4.20%
Amount
$ 404,079
23,094
(137,416)
(9,806)
$ 279,951
$238,214
4.25%
$ 294,694
Weighted Avg.
Interest Rate
4.85%
6.67%
5.99%
6.85%
4.72%
4.62%
A portion of our Outpatient Medical properties were formed through partnerships. Income or loss from
unconsolidated entities represents our share of net income or losses from partnerships where we are the
noncontrolling partner. Net income attributable to noncontrolling interests represents our partners’ share of net
income or loss relating to those partnerships where we are the controlling partner.
69
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Non-Segment/Corporate
The following is a summary of our results of operations for the non-segment/corporate activities (dollars in
thousands):
Revenues:
Year Ended
December 31,
2019
December 31,
2018
One Year
Change
$
%
Year Ended
December 31,
2017
One Year
Change
Two Year
Change
$
%
$
%
Other income . . . . . . . . . . . . $
3,966
$
2,275 $
1,691
74% $
1,538 $
737
48% $
2,428 158%
Expenses:
Interest expense . . . . . . . . . .
General and administrative
461,273
436,256
25,017
6% 396,148
40,108
10% 65,125
16%
expenses . . . . . . . . . . . . . .
126,549
126,383
166
0% 122,008
4,375
4%
4,541
4%
Loss (gain) on
extinguishments of debt,
net
. . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . .
82,541
10,705
4,091
7,729
78,450 1,918%
39%
2,976
—
50,829
4,091
(43,100)
82,541
n/a
-85% (40,124) -79%
n/a
Total expenses . . . . . . . . . . .
681,068
574,459
106,609
19% 568,985
5,474
1% 112,083
20%
Loss from continuing
operations before income
taxes . . . . . . . . . . . . . . . . . . .
Income tax benefit
(677,102)
(572,184)
(104,918)
-18% (567,447)
(4,737)
-1% (109,655) -19%
(expense) . . . . . . . . . . . . . . .
(2,284)
(11,362)
9,078
80%
2,070
(13,432) -649%
(4,354) -210%
Loss from continuing
operations . . . . . . . . . . . . . . .
Preferred stock dividends . . . .
Preferred stock redemption
charge . . . . . . . . . . . . . . . . . .
Net loss attributable to
(679,386)
—
(583,546)
46,704
(95,840)
(46,704) -100%
-16% (565,377)
49,410
(18,169)
(2,706)
-3% (114,009) -20%
-5% (49,410) -100%
—
—
— n/a
9,769
(9,769) -100%
(9,769) -100%
common stockholders . . . . . $(679,386)
$(630,250) $ (49,136)
-8% $(624,556) $ (5,694)
-1% $ (54,830)
-9%
The following is a summary of our Non-Segment/Corporate interest expense for the periods presented
(dollars in thousands):
Year Ended
December 31,
2019
December 31,
2018
One Year
Change
$
%
Year Ended
December 31,
2017
One Year
Change
Two Year
Change
$
%
$
%
Senior unsecured notes . . . $402,133
Secured debt . . . . . . . . . . . .
—
Unsecured revolving credit
facility and commercial
paper program . . . . . . . .
Loan expense . . . . . . . . . . .
43,861
15,279
$387,955 $14,178
115
(115) -100%
4% $364,773
127
$23,182
10%
6% $37,360
(12) -9% (127) -100%
34,626
13,560
9,235
1,719
27% 17,863
13% 13,385
16,763 94% 25,998 146%
14%
1% 1,894
175
Totals . . . . . . . . . . . . . . . . . $461,273
$436,256 $25,017
6% $396,148 $ 40,108 10% $65,125
16%
The change in interest expense on senior unsecured notes is due to the net effect of issuances and
extinguishments, as well as the movement in foreign exchange rates and related hedge activity. Please refer to
Note 11 to consolidated financial statements for additional information. The change in interest expense on our
unsecured revolving credit facility and commercial paper program is due primarily to the net effect and timing of
draws, paydowns and variable interest rate changes. Please refer to Note 10 of our consolidated financial
70
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
statements for additional information regarding our unsecured revolving credit facility and commercial paper
program. Loan expenses represent the amortization of costs incurred in connection with senior unsecured notes
issuances. The loss on extinguishment recognized in 2019 is due primarily to the early extinguishment of the
$600,000,000 of 4.125% senior unsecured notes due 2019 and the $450,000,000 of 6.125% senior unsecured
notes due 2020 in March 2019, the early extinguishment of the $450,000,000 of 4.95% senior unsecured notes
due 2021 and the $600,000,000 of 5.25% senior unsecured notes due 2022 in September 2019 and the early
redemption of the $300 million Canadian-denominated 3.35% senior unsecured notes due 2020 in December
2019. The loss on extinguishment of debt in 2018 is due to the term loan facility drawn on in July 2018 and paid
off in August 2018.
General and administrative expenses as a percentage of consolidated revenues for the years ended
December 31, 2019, 2018 and 2017 were 2.47%, 2.69% and 2.83%, respectively.
Other expenses for all years include severance-related costs associated with the departure of certain
executive officers and key employees.
The decrease in preferred dividends is due to the conversion of all outstanding Series I Cumulative
Convertible Perpetual Preferred Stock during the year ended December 31, 2019.
Other
Non-GAAP Financial Measures
We believe that net income and net income attributable to common stockholders (“NICS”), as defined by
U.S. GAAP, are the most appropriate earnings measurements. However, we consider FFO, NOI, SSNOI,
EBITDA and Adjusted EBITDA to be useful supplemental measures of our operating performance. Historical
cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real
estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real
estate values have historically risen or fallen with market conditions, many industry investors and analysts have
considered presentations of operating results for real estate companies that use historical cost accounting to be
insufficient. In response, the National Association of Real Estate Investment Trusts (“NAREIT”) created funds
from operations attributable to common stockholders (“FFO”) as a supplemental measure of operating
performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT,
means NICS, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and
impairment of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated
entities and noncontrolling interests.
Consolidated net operating income (“NOI”) is used to evaluate the operating performance of our properties.
We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property
operating expenses represent costs associated with managing, maintaining and servicing tenants for our
properties. These expenses include, but are not limited to, property-related payroll and benefits, property
management fees paid to operators, marketing, housekeeping, food service, maintenance, utilities, property taxes
and insurance. General and administrative expenses represent costs unrelated to property operations. These
expenses include, but are not limited to, payroll and benefits, professional services, office expenses and
depreciation of corporate fixed assets. Same store NOI (“SSNOI”) is used to evaluate the operating performance
of our properties using a consistent population which controls for changes in the composition of our portfolio. As
used herein, same store is generally defined as those revenue-generating properties in the portfolio for the eight
quarters ended December 31, 2019 (“2018 and 2019 Same Store Pool”) and December 31, 2018 (“2017 and 2018
Same Store Pool”). Land parcels, loans and sub-leases, as well as any properties acquired, under development,
transitioned to a different segment, sold or classified as held for sale during that period are excluded from the
same store amounts. Additionally, unconsolidated properties are excluded from the same store amounts. We
believe NOI and SSNOI provide investors relevant and useful information because they measure the operating
performance of our properties at the property level on an unleveraged basis. We use NOI and SSNOI to make
decisions about resource allocations and to assess the property level performance of our properties.
71
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
EBITDA stands for earnings (net income) before interest, taxes, depreciation and amortization. We believe
that EBITDA, along with net income and cash flow provided from operating activities,
is an important
supplemental measure because it provides additional information to assess and evaluate the performance of our
operations. We primarily utilize EBITDA to measure our interest coverage ratio, which represents EBITDA
divided by total interest, and our fixed charge coverage ratio, which represents EBITDA divided by fixed
charges. Fixed charges include total interest, secured debt principal amortization, and preferred dividends.
Covenants in our senior unsecured notes and primary unsecured credit facility contain financial ratios based on a
definition of EBITDA that is specific to those agreements. Failure to satisfy these covenants could result in an
event of default that could have a material adverse impact on our cost and availability of capital, which could in
turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.
Due to the materiality of these debt agreements and the financial covenants, we have disclosed Adjusted
EBITDA, which represents EBITDA as defined above excluding unconsolidated entities and adjusted for items
per our covenant. We use Adjusted EBITDA to measure our adjusted fixed charge coverage ratio, which
represents Adjusted EBITDA divided by fixed charges on a trailing twelve months basis. Fixed charges include
total interest (excluding capitalized interest and non-cash interest expenses), secured debt principal amortization
and preferred dividends. Our covenant requires an adjusted fixed charge coverage ratio of at least 1.50 times.
Our supplemental reporting measures and similarly entitled financial measures are widely used by investors,
equity and debt analysts and rating agencies
rating and investment
recommendations of companies. Management uses these financial measures to facilitate internal and external
comparisons to our historical operating results and in making operating decisions. Additionally, these measures
are utilized by the Board of Directors to evaluate management. None of our supplemental measures represent net
income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should
not be considered as alternative measures of profitability or liquidity. Finally, the supplemental measures, as
defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or
other companies.
in the valuation, comparison,
The table below reflects the reconciliation of FFO to NICS, the most directly comparable U.S. GAAP
measure, for the periods presented. Noncontrolling interest and unconsolidated entity amounts represent
adjustments to reflect our share of depreciation and amortization, gains/loss on real estate dispositions and
impairments of assets. Amounts are in thousands except for per share data.
FFO Reconciliation:
Net income attributable to common stockholders . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on real estate dispositions, net . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funds from operations attributable to common stockholders . . . . . . . . . .
Average diluted shares outstanding: . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Per diluted share data:
Year Ended December 31,
2019
2018
2017
$1,232,432
1,027,073
28,133
(748,041)
(20,197)
57,680
$ 758,250
950,459
115,579
(415,575)
(69,193)
52,663
$ 463,595
921,720
124,483
(344,250)
(60,018)
60,046
$1,577,080
403,808
$1,392,183
375,250
$1,165,576
369,001
Net income attributable to common stockholders . . . . . . . . . . . . . . . . .
Funds from operations attributable to common stockholders . . . . . . . .
$
$
3.05
3.91
$
$
2.02
3.71
$
$
1.26
3.16
72
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The table below reflects the reconciliation of EBITDA and Adjusted EBITDA to net income, the most
directly comparable U.S. GAAP measure, for the periods presented. Dollars are in thousands.
Year Ended December 31,
2019
2018
2017
Adjusted EBITDA Reconciliation:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,330,410
555,559
2,957
1,027,073
$ 829,750
526,592
8,674
950,459
$ 540,613
484,622
20,128
921,720
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (income) from unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on extinguishment of debt, net . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on real estate dispositions, net . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on derivatives and financial instruments, net . . . . . . . . . . . . .
Other expenses(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,915,999
(42,434)
25,047
84,155
(748,041)
28,133
18,690
(4,399)
51,052
—
2,315,475
641
27,646
16,097
(415,575)
115,579
—
(4,016)
111,990
(14,832)
1,967,083
83,125
19,102
37,241
(344,250)
124,483
62,966
2,284
176,395
—
Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,328,202
$2,153,005
$2,128,429
Adjusted Interest Coverage Ratio:
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized interest
Non-cash interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 555,559
15,272
(8,645)
$ 526,592
7,905
(10,860)
$ 484,622
13,489
(10,359)
Total interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
562,186
$2,328,202
523,637
$2,153,005
487,752
$2,128,429
Adjusted interest coverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.14x
4.11x
4.36x
Adjusted Fixed Charge Coverage Ratio:
Total interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured debt principal payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 562,186
54,325
—
$ 523,637
56,288
46,704
$ 487,752
64,078
49,410
Total fixed charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
616,511
$2,328,202
626,629
$2,153,005
601,240
$2,128,429
Adjusted fixed charge coverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . .
3.78x
3.44x
3.54x
(1) Certain severance-related costs are included in stock-based compensation and excluded from other expenses.
Our leverage ratios include book capitalization, undepreciated book capitalization and market capitalization.
Book capitalization represents the sum of net debt (defined as total long-term debt less cash and cash equivalents
and any IRC section 1031 deposits), total equity and redeemable noncontrolling interests. Undepreciated book
capitalization represents book capitalization adjusted for accumulated depreciation and amortization. Market
capitalization represents book capitalization adjusted for the fair market value of our common stock. Our
leverage ratios are defined as the proportion of net debt to total capitalization. The table below reflects the
73
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
reconciliation of our leverage ratios to our balance sheets for the periods presented. Amounts are in thousands,
except share price.
Year Ended December 31,
2019
2018
2017
Book capitalization:
Unsecured credit facility and commercial paper . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt obligations(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents(2)
$ 1,587,597
13,436,365
(284,917)
$ 1,147,000
12,150,144
(215,376)
$
719,000
11,012,936
(249,620)
Total net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity and noncontrolling interests(3) . . . . . . . . . . . . . . . . . . . . .
14,739,045
16,982,504
13,081,768
16,010,645
11,482,316
15,300,646
Book capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$31,721,549
$29,092,413
$26,782,962
Net debt to book capitalization ratio . . . . . . . . . . . . . . . . . . . . . . . .
46.5%
45.0%
42.9%
Undepreciated book capitalization:
Total net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . .
Total equity and noncontrolling interests(3) . . . . . . . . . . . . . . . . . . . . .
$14,739,045
5,715,459
16,982,504
$13,081,768
5,499,958
16,010,645
$11,482,316
4,838,370
15,300,646
Undepreciated book capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . .
$37,437,008
$34,592,371
$31,621,332
Net debt to undepreciated book capitalization ratio . . . . . . . . . . . .
39.4%
37.8%
36.3%
Market capitalization:
Common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Period end share price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
410,257
81.78
$
383,675
69.41
$
371,732
63.77
$
Common equity market capitalization . . . . . . . . . . . . . . . . . . . . . . . .
Total net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$33,550,817
14,739,045
1,442,060
—
$26,630,882
13,081,768
1,378,311
718,498
$23,705,350
11,482,316
877,499
718,503
Market capitalization: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$49,731,922
$41,809,459
$36,783,668
Net debt to market capitalization ratio . . . . . . . . . . . . . . . . . . . . . .
29.6%
31.3%
31.2%
(1) Amounts include senior unsecured notes, secured debt and lease liabilities related to financing leases, as reflected on our Consolidated
(2)
(3)
Balance Sheet.
Inclusive of IRC section 1031 deposits, if any.
Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests as reflected on our Consolidated
Balance Sheet.
74
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following tables reflect the reconciliation of NOI to net income, the most directly comparable U.S.
GAAP measure, for the years presented. Dollar amounts are in thousands.
Year Ended December 31,
2019
2018
2017
NOI Reconciliation:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on real estate dispositions, net . . . . . . . . . . . . . . . . . . . . . . . .
Loss (income) from unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on extinguishment of debt, net . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on derivatives and financial instruments, net . . . . . . . . . . . . .
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,330,410
(748,041)
(42,434)
2,957
52,612
28,133
18,690
84,155
(4,399)
126,549
1,027,073
555,559
$ 829,750
(415,575)
641
8,674
112,898
115,579
—
16,097
(4,016)
126,383
950,459
526,592
$ 540,613
(344,250)
83,125
20,128
177,776
124,483
62,966
37,241
2,284
122,008
921,720
484,622
Consolidated net operating income (NOI) . . . . . . . . . . . . . . . . . . . .
$2,431,264
$2,267,482
$2,232,716
NOI by segment:
Seniors Housing Operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-segment/corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,039,520
918,743
469,035
3,966
$ 985,022
900,049
380,136
2,275
$ 880,026
967,084
384,068
1,538
Total NOI
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,431,264
$2,267,482
$2,232,716
75
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a reconciliation of our consolidated NOI to same store NOI for the periods presented for
the respective pools. Dollar amounts are in thousands.
2018 and 2019 Same Store Pool
2017 and 2018 Same Store Pool
2019
2018
2018
2017
SSNOI Reconciliations:
NOI:
Seniors Housing Operating . . . . . . . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical
$1,039,520
918,743
469,035
$ 985,022
900,049
380,136
$ 985,022
900,049
380,136
$ 880,026
967,084
384,068
Total
Adjustments:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,427,298
2,265,207
2,265,207
2,231,178
Seniors Housing Operating:
Non-cash SSNOI on same store properties . . . . .
NOI attributable to non same store properties . .
(1,720)
(337,933)
(1,344)
(282,185)
(1,176)
(167,430)
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(339,653)
(283,529)
(168,606)
(1,542)
(54,069)
(55,611)
Triple-net:
Non-cash SSNOI on same store properties . . . . .
NOI attributable to non same store properties . .
28,033
(430,436)
25,981
(417,133)
17,057
(401,098)
23,970
(482,797)
(402,403)
(391,152)
(384,041)
(458,827)
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical: . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash SSNOI on same store properties . . . . .
NOI attributable to non same store properties . .
7,067
(164,490)
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(157,423)
SSNOI:
Seniors Housing Operating . . . . . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical
699,867
516,340
311,612
7,224
(79,221)
(71,997)
701,493
508,897
308,139
9,551
(46,628)
(37,077)
816,416
516,008
343,059
9,576
(56,654)
(47,078)
824,415
508,257
336,990
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,527,819
$1,518,529
$1,675,483
$1,669,662
SSNOI Property Reconciliations:
Total properties . . . . . . . . . . . . . . . . . .
Recent acquisitions/development
conversions . . . . . . . . . . . . . . . . . . .
Developments . . . . . . . . . . . . . . . . . . .
Held for sale . . . . . . . . . . . . . . . . . . . . .
Segment transitions . . . . . . . . . . . . . . .
Loans, land parcels and subleases(1)
. .
Same store properties . . . . . . . . . . . . . .
341
2018 and 2019 Same Store Pool
2017 and 2018 Same Store Pool
Seniors
Housing
Operating Triple-net
Outpatient
Medical
Total
Seniors
Housing
Operating Triple-net
Outpatient
Medical
Total
533
658
387
1,578
501
726
281
1,508
(77)
(11)
(18)
(86)
—
(237)
(7)
(11)
(18)
(17)
368
(452)
(138)
(22)
(4)
(42)
(71)
— (104)
(6)
(26)
(4)
(13)
(68)
(23) —
197
906
390
(246)
(9)
(40)
(44)
(21)
366
(44)
(4)
(2)
—
(7)
224
(316)
(17)
(55)
(112)
(28)
980
(1)
Includes eight land parcels, eight subleases and seven loans for the 2018 and 2019 Same Store Pool and nine land parcels, eight subleases
and 11 loans for the 2017 and 2018 Same Store Pool.
76
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to
make estimates and assumptions. Management considers accounting estimates or assumptions critical if:
•
•
the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment
necessary to account for highly uncertain matters or the susceptibility of such matters to change; and
the impact of the estimates and assumptions on financial condition or operating performance is
material.
Management has discussed the development and selection of its critical accounting policies with the Audit
Committee of the Board of Directors and the Audit Committee has reviewed the disclosure presented below
relating to them. Management believes the current assumptions and other considerations used to estimate
amounts reflected in our consolidated financial statements are appropriate and are not reasonably likely to change
in the future. However, since these estimates require assumptions to be made that were uncertain at the time the
estimate was made, they bear the risk of change. If actual experience differs from the assumptions and other
considerations used in estimating amounts reflected in our consolidated financial statements, the resulting
changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial
condition. Please refer to Note 2 to our consolidated financial statements for further information on significant
accounting policies that impact us and for the impact of new accounting standards, including accounting
pronouncements that were issued but not yet adopted by us.
The following table presents information about our critical accounting policies, as well as the material
assumptions used to develop each estimate:
Nature of Critical
Accounting Estimate
Assumptions/
Approach Used
Impairment of Real Property
Assessing impairment of
real property involves subjectivity in
determining if indicators of impairment are present and in estimating
the future undiscounted cash flows or estimated fair value of an asset.
In estimating the undiscounted cash flows or
fair value, key
assumptions that would be made are the estimation of future rental
revenues, operating expenses, capitalization rates and the ability and
intent to hold the respective asset, all of which are affected by our
expectations of future market or economic conditions. These estimates
can have a significant impact on the undiscounted cash flows or
estimated fair value of an asset.
Real Estate Acquisitions
We believe that substantially all of our real estate acquisitions are
considered asset acquisitions for which we record the related real
estate acquired (tangible assets and identifiable intangible assets and
liabilities) at cost on a relative fair value basis. Liabilities assumed and
any associated noncontrolling interests are reflected at fair value.
Tangible assets consist primarily of land, building and improvements.
Identifiable intangible assets and liabilities primarily consist of the
above or below market component of in-place leases and the value of
in-place leases. The total amount of other intangible assets acquired is
further allocated to in-place lease values and customer relationship
values
specific
characteristics of each tenant’s lease and our overall relationship with
respect to that tenant.
on management’s
evaluation
based
the
of
Quarterly, we evaluate our real estate investments on a property by
property basis to determine if there are indicators of impairment.
These indicators may include expected operational performance,
the tenant’s ability to make rent payments, a decision to dispose of
an asset before the end of its estimated useful life and changes in
the market that may permanently reduce the value of the property.
If indicators of impairment exist, an undiscounted cash flow
analysis will be prepared and the results of such analysis will be
compared to the current net book value to determine if an
impairment charge is necessary. This analysis requires us to use
judgment in determining whether indicators of impairment exist
and to estimate the expected future undiscounted cash flows or
estimated fair values of the property. Properties that meet the held
for sale criteria are recorded at the lesser of the fair value less costs
to sell or carrying value.
The allocation of the purchase price to the related real estate
acquired (tangible assets and intangible assets and liabilities)
involves subjectivity as such allocations are based on a relative fair
value analysis. In determining the fair values that drive such
analysis, we estimate the fair value of each component of the real
estate acquired which generally includes land, buildings and
improvements, the above or below market component of in-place
leases and the value of in-place leases. Significant assumptions
used to determine such fair values include comparable land sales,
capitalization rates, discount rates, market rental rates and property
operating data, all of which can be impacted by expectations about
future market or economic conditions. Our estimates of the values
the amount of depreciation and
of
amortization we record over the estimated useful
life of the
property or the term of the lease.
these components affect
77
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Nature of Critical
Accounting Estimate
Principles of Consolidation
the
The consolidated financial statements include our accounts,
accounts of our wholly-owned subsidiaries, and the accounts of joint
venture entities in which we own a majority voting interest with the
ability to control operations and where no substantive participating
rights or substantive kick out
rights have been granted to the
noncontrolling interests. In addition, we consolidate those entities
deemed to be variable interest entities (“VIEs”) in which we are
determined to be the primary beneficiary. All material intercompany
transactions and balances have been eliminated in consolidation.
Allowance for Loan Losses
The allowance for loan losses is maintained at a level believed
adequate to absorb potential
losses in our loans receivable. The
determination of the allowance is based on a quarterly evaluation of all
outstanding loans. If this evaluation indicates that there is a greater risk
of loan charge-offs, additional allowances or placement on non-accrual
status may be required. A loan is impaired when, based on current
information and events, it is probable that we will be unable to collect
all amounts due as scheduled according to the contractual terms of the
original loan agreement or if it has been modified in a troubled debt
restructuring. Consistent with this definition, all loans on non-accrual
are deemed impaired. To the extent circumstances improve and the
risk of collectability is diminished, we will return these loans to
income accrual status.
Assumptions/
Approach Used
(ii)
interest, or
We make judgments about which entities are VIEs based on an
assessment of whether (i) the equity investors as a group, if any, do
not have a controlling financial
the equity
investment at risk is insufficient to finance that entity’s activities
without additional subordinated financial support. We make
judgments with respect to our level of influence or control of an
entity and whether we are (or are not) the primary beneficiary of a
VIE. Consideration of various factors includes, but is not limited
to, our ability to direct the activities that most significantly impact
the entity’s economic performance, our form of ownership interest,
our representation on the entity’s governing body, the size and
seniority of our investment, our ability and the rights of other
investors to participate in policy making decisions, replace the
manager and/or liquidate the entity, if applicable. Our ability to
correctly assess our influence or control over an entity at inception
of our involvement or on a continuous basis when determining the
primary beneficiary of a VIE affects the presentation of these
entities in our consolidated financial statements. If we perform a
primary beneficiary analysis at a date other than at inception of the
VIE, our assumptions may be different and may result in the
identification of a different primary beneficiary.
loan charge-offs,
The determination of the allowance is based on a quarterly
evaluation of all outstanding loans, including general economic
conditions and estimated collectability of loan payments. We
evaluate the collectability of our loans receivable based on a
combination of factors, including, but not limited to, delinquency
status, historical
the
borrower and guarantors, and value of the underlying collateral.
Any loans with collectability concerns are subjected to a projected
payoff valuation. The valuation is based on the expected future
cash flows and/or the estimated fair value of the underlying
collateral. The valuation is compared to the outstanding balance to
determine the reserve needed for each loan. We may base our
valuation on the fair value of collateral, net of sales costs, if the
repayment of the loan is expected to be provided solely by the
collateral.
financial strength of
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risks, including the potential loss arising from adverse changes in interest
rates and foreign currency exchange rates. We seek to mitigate the underlying foreign currency exposures with
gains and losses on derivative contracts hedging these exposures. We seek to mitigate the effects of fluctuations
in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent
possible. We may or may not elect to use financial derivative instruments to hedge interest rate exposure. These
decisions are principally based on our policy to match our variable rate investments with comparable borrowings,
but are also based on the general trend in interest rates at the applicable dates and our perception of the future
volatility of interest rates. This section is presented to provide a discussion of the risks associated with potential
fluctuations in interest rates and foreign currency exchange rates. For more information, see Notes 12 and 17 to
our consolidated financial statements.
We historically borrow on our unsecured revolving credit facility and commercial paper program to acquire,
construct or make loans relating to health care and seniors housing properties. Then, as market conditions dictate,
we will issue equity or long-term fixed rate debt to repay the borrowings under our unsecured revolving credit
facility and commercial paper program. We are subject to risks associated with debt financing, including the risk
that existing indebtedness may not be refinanced or that the terms of refinancing may not be as favorable as the
terms of current indebtedness. The majority of our borrowings were completed under indentures or contractual
78
agreements that limit the amount of indebtedness we may incur. Accordingly, in the event that we are unable to
raise additional equity or borrow money because of these limitations, our ability to acquire additional properties
may be limited.
A change in interest rates will not affect the interest expense associated with our fixed rate debt. Interest rate
changes, however, will affect the fair value of our fixed rate debt. Changes in the interest rate environment upon
maturity of this fixed rate debt could have an effect on our future cash flows and earnings, depending on whether
the debt is replaced with other fixed rate debt, variable rate debt or equity or repaid by the sale of assets. To
illustrate the impact of changes in the interest rate markets, we performed a sensitivity analysis on our fixed rate
debt instruments whereby we modeled the change in net present values arising from a hypothetical 1% increase
in interest rates to determine the instruments’ change in fair value. The following table summarizes the analysis
performed as of the dates indicated (in thousands):
December 31, 2019
December 31, 2018
Principal balance Change in fair value
Principal balance Change in fair value
Senior unsecured notes . . . . . . . . . . . .
Secured debt . . . . . . . . . . . . . . . . . . . . .
$ 9,724,691
1,814,229
$(751,848)
(69,756)
$ 9,009,159
1,639,983
$(548,558)
(59,522)
Totals . . . . . . . . . . . . . . . . . . . . . . . . . .
$11,538,920
$(821,604)
$10,649,142
$(608,080)
Our variable rate debt, including our unsecured revolving credit facility and commercial paper program, is
reflected at fair value. At December 31, 2019, we had $3,470,584,000 outstanding related to our variable rate
debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would result in increased
annual interest expense of $34,706,000. At December 31, 2018, we had $2,683,553,000 outstanding under our
variable rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would have
resulted in increased annual interest expense of $26,836,000.
We are subject to currency fluctuations that may, from time to time, affect our financial condition and
results of operations. Increases or decreases in the value of the Canadian Dollar or British Pounds Sterling
relative to the U.S. Dollar impact the amount of net income we earn from our investments in Canada and the
United Kingdom. Based solely on our results for the year ended December 31, 2019, including the impact of
existing hedging arrangements, if these exchange rates were to increase or decrease by 10%, our net income from
these investments would increase or decrease, as applicable, by less than $13,000,000. We will continue to
mitigate these underlying foreign currency exposures with non-U.S. denominated borrowings and gains and
losses on derivative contracts. If we increase our international presence through investments in, or acquisitions or
development of, seniors housing and health care properties outside the U.S., we may also decide to transact
additional business or borrow funds in currencies other than U.S. Dollars, Canadian Dollars or British Pounds
Sterling. To illustrate the impact of changes in foreign currency markets, we performed a sensitivity analysis on
our derivative portfolio whereby we modeled the change in net present values arising from a hypothetical 1%
increase in foreign currency exchange rates to determine the instruments’ change in fair value. The following
table summarizes the results of the analysis performed, excluding cross currency hedge activity (dollars in
thousands):
December 31, 2019
December 31, 2018
Carrying value Change in fair value Carrying value Change in fair value
Foreign currency exchange contracts . . . . .
Debt designated as hedges . . . . . . . . . . . . .
$
26,767
1,586,116
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,612,883
$12,136
15,861
$27,997
$
23,620
1,559,159
$1,582,779
$16,163
15,592
$31,755
79
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Welltower Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Welltower Inc. and subsidiaries (the
Company) as of December 31, 2019 and 2018, the related consolidated statements of comprehensive income,
equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes
and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated
financial statements”). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 2019 and 2018 and the results of its operations
and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S.
generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019,
based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) and our report dated February 14, 2020 expressed
an unqualified opinion thereon.
Adoption of New Accounting Standard
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of
accounting for leases effective January 1, 2019.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the
risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audits provide a reasonable basis for our opinion.
80
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the
financial statements that were communicated or required to be communicated to the audit committee and that:
(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any
way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating
the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or
disclosures to which they relate.
Description of the Matter
How We Addressed the
Matter in Our Audit
Impairment of Real Property
At December 31, 2019,
real property owned was
the Company’s net
approximately $30.3 billion. As discussed in Note 2 to the consolidated
financial statements, the Company reviews its real property quarterly on a
property-by-property basis to determine if facts and circumstances suggest that
the real property may be impaired. If the undiscounted cash flows indicate that
the real property will not be recoverable, the carrying value of the real property
is reduced to its estimated fair value and an impairment charge is recognized for
the difference between the carrying value and the fair value.
Auditing the Company’s process to evaluate real property owned for impairment
was complex due to the high degree of subjectivity in determining whether
indicators of impairment were present for certain properties, and in determining
the future undiscounted cash flows and estimated fair values, if necessary, of
properties where indicators of impairment were determined to be present. In
particular, the undiscounted cash flows and fair value estimates were sensitive to
significant assumptions,
revenues and operating
including future rental
expenses, capitalization rates, and anticipated hold period, which are affected by
expectations about future market or economic conditions.
We obtained an understanding, evaluated the design, and tested the operating
effectiveness of controls over the Company’s process to evaluate real property
owned for impairment. This included testing controls over the Company’s
review of impairment indicators by property and management’s review and
approval of the significant assumptions described above.
To test the Company’s evaluation of real property for impairment, we performed
audit procedures that included, among others, assessing the methodologies used
by management, evaluating the significant assumptions discussed above and
testing the completeness and accuracy of the underlying data used by the
Company in its analyses. We compared the significant assumptions used by
management to current industry and economic trends and evaluated whether
changes to the Company’s business and other relevant factors would affect the
significant assumptions. In addition, we assessed the historical accuracy of the
Company’s estimates and performed sensitivity analyses of the significant
assumptions to evaluate the changes in the undiscounted future cash flows and
estimated fair values of the property that would result from changes in the
significant assumptions.
81
Description of the Matter
How We Addressed the
Matter in Our Audit
Real Estate Acquisitions
During 2019, the Company completed approximately $4.0 billion of real estate
acquisitions. As disclosed in Note 3 of the consolidated financial statements, the
total purchase price for all properties acquired has been allocated to the related
real estate acquired (tangible assets and identifiable intangible assets and
liabilities) based upon their relative fair values.
Auditing the fair values allocated by management to the real estate acquired was
complex because the fair value estimates were sensitive to significant
assumptions,
including comparable land sales, capitalization rates, discount
rates, market rental rates and property operating data, which can be impacted by
expectations about future market or economic conditions.
We obtained an understanding, evaluated the design, and tested the operating
effectiveness of controls over the Company’s process to account for real estate
acquisitions, including controls over the Company’s review of the significant
assumptions discussed above.
To test the fair values allocated to the real estate acquired, we performed audit
procedures that included, among others, assessing the methodologies used by
management and evaluating the significant assumptions used by the Company
discussed above. We compared certain of management’s assumptions to
external market data for similar properties and tested the clerical accuracy of the
valuation models. We involved our valuation specialist in our evaluation of the
significant assumptions used by the Company and the review of the valuation
models.
We have served as the Company’s auditor since 1970.
Toledo, Ohio
February 14, 2020
/s/ Ernst & Young LLP
82
CONSOLIDATED BALANCE SHEETS
WELLTOWER INC. AND SUBSIDIARIES
(in thousands)
December 31,
2019
December 31,
2018
Assets
Real estate investments:
Real property owned:
Land and land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquired lease intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real property held for sale, net of accumulated depreciation . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,486,620
29,163,305
1,617,051
1,253,008
507,931
$ 3,205,091
28,019,502
1,581,159
590,271
194,365
Gross real property owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . .
36,027,915
(5,715,459)
33,590,388
(5,499,958)
Net real property owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right of use assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate loans receivable, net of allowance . . . . . . . . . . . . . . . . . . . . . . . . .
Net real estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,312,456
536,433
270,382
31,119,271
28,090,430
—
330,339
28,420,769
Other assets:
Investments in unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Straight-line receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
583,423
68,321
284,917
100,849
466,222
757,748
482,914
68,321
215,376
100,753
367,093
686,846
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,261,480
1,921,303
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 33,380,751
$ 30,342,072
Liabilities and equity
Liabilities:
Unsecured credit facility and commercial paper . . . . . . . . . . . . . . . . . . . . . . .
Senior unsecured notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,587,597
10,336,513
2,990,962
473,693
1,009,482
$ 1,147,000
9,603,299
2,476,177
70,668
1,034,283
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redeemable noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity:
Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital in excess of par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . .
Other equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Welltower Inc. stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,398,247
475,877
14,331,427
424,046
—
411,005
20,190,107
(78,955)
7,353,966
(12,223,534)
(112,157)
12
15,540,444
966,183
16,506,627
718,498
384,465
18,424,368
(68,499)
6,121,534
(10,818,557)
(129,769)
294
14,632,334
954,265
15,586,599
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 33,380,751
$ 30,342,072
See accompanying notes
83
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
WELLTOWER INC. AND SUBSIDIARIES
(In thousands, except per share data)
Year Ended December 31,
2019
2018
2017
Revenues:
Resident fees and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,448,175
1,588,400
63,830
20,901
$3,234,852
1,380,422
55,814
29,411
$2,779,423
1,445,871
73,811
17,536
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,121,306
4,700,499
4,316,641
Expenses:
Property operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on derivatives and financial instruments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on extinguishment of debt, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,690,042
1,027,073
555,559
126,549
(4,399)
84,155
18,690
28,133
52,612
2,433,017
950,459
526,592
126,383
(4,016)
16,097
—
115,579
112,898
2,083,925
921,720
484,622
122,008
2,284
37,241
62,966
124,483
177,776
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,578,414
4,277,009
4,017,025
Income from continuing operations before income taxes and other items . . . . . . . . . . . . . . . . . . . . .
Income tax (expense) benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) on real estate dispositions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
542,892
(2,957)
42,434
748,041
423,490
(8,674)
(641)
415,575
299,616
(20,128)
(83,125)
344,250
Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,330,410
829,750
540,613
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Preferred stock redemption charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income (loss) attributable to noncontrolling interests(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,330,410
—
—
97,978
829,750
46,704
—
24,796
540,613
49,410
9,769
17,839
Net income (loss) attributable to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,232,432
$ 758,250
$ 463,595
Average number of common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
401,845
403,808
373,620
375,250
367,237
369,001
Earnings per share:
Basic:
Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted:
Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
3.31
3.07
3.29
3.05
$
$
$
$
2.22
2.03
2.21
2.02
$
$
$
$
1.47
1.26
1.47
1.26
(1)
Includes amounts attributable to redeemable noncontrolling interests
See accompanying notes
84
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss):
Reclassification adjustment for write down of equity investment . . . . . .
Unrecognized actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative and financial instruments designated as hedges gain
Year Ended December 31,
2019
2018
2017
$1,330,410
$ 829,750
$ 540,613
—
540
161,915
—
344
(253,022)
(5,120)
269
337,433
(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(131,120)
211,390
(252,168)
Total other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . .
31,335
(41,288)
80,414
Total comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Total comprehensive income (loss) attributable to noncontrolling
1,361,745
788,462
621,027
interests(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
111,701
1,812
40,187
Total comprehensive income (loss) attributable to common
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,250,044
$ 786,650
$ 580,840
(1)
Includes amounts attributable to redeemable noncontrolling interests.
See accompanying notes
85
CONSOLIDATED STATEMENTS OF EQUITY
WELLTOWER INC. AND SUBSIDIARIES
(in thousands)
Preferred
Stock
Common
Stock
Capital in
Excess of
Par Value
Treasury
Stock
Cumulative
Net Income
Cumulative
Dividends
Accumulated
Other
Comprehensive
Income (Loss)
Other
Equity
Noncontrolling
Interests
Total
Balances at December 31, 2016 . . . . . . . . . . . . $1,006,250 $363,071 $16,999,691
$(54,741) $4,803,575
$ (8,144,981)
$(169,531)
$ 3,059
$475,079
$15,281,472
Comprehensive income:
Net income (loss) . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . .
Total comprehensive income . . . . . . . . . . . . . .
Net change in noncontrolling interests . . . . . . .
Amounts related to issuance of common stock
from dividend reinvestment and stock
incentive plans, net of forfeitures . . . . . . . . .
Net proceeds from issuance of common
stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redemption of equity membership units . . . . .
Redemption of preferred stock . . . . . . . . . . . . .
(287,500)
Conversion of preferred stock . . . . . . . . . . . . .
(247)
Option compensation expense . . . . . . . . . . . . .
Dividends paid:
Common stock dividends . . . . . . . . . . . . . . .
Preferred stock dividends . . . . . . . . . . . . . . .
522,774
58,066
13,473
402
21,494
(9,807)
(2,399)
8,881
612,555
91
4
5,465
9,760
243
(11)
(9,769)
10
(1,277,321)
(49,410)
20,819
22,348
543,593
80,414
624,007
(15,941)
(2,468)
9,690
621,436
5,545
(287,509)
—
10
(1,277,321)
(49,410)
Balances at December 31, 2017 . . . . . . . . . . . .
718,503
372,449
17,662,681
(64,559)
5,316,580
(9,471,712)
(111,465)
670
502,305
14,925,452
Comprehensive income:
Net income (loss) . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . .
Total comprehensive income . . . . . . . . . . . . . .
Net change in noncontrolling interests . . . . . . .
Amounts related to issuance of common stock
from dividend reinvestment and stock
incentive plans, net of forfeitures . . . . . . . . .
Net proceeds from issuance of common
stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
804,954
(18,304)
(43,101)
188
28,277
(3,940)
(376)
11,828
776,506
Conversion of preferred stock . . . . . . . . . . . . .
(5)
5
Dividends paid:
Common stock dividends . . . . . . . . . . . . . . .
Preferred stock dividends . . . . . . . . . . . . . . .
(1,300,141)
(46,704)
25,065
(22,984)
830,019
(41,288)
788,731
449,879
406,778
24,149
788,334
—
(1,300,141)
(46,704)
Balances at December 31, 2018 . . . . . . . . . . . .
718,498
384,465
18,424,368
(68,499)
6,121,534
(10,818,557)
(129,769)
294
954,265
15,586,599
Comprehensive income:
Net income (loss) . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . .
Total comprehensive income . . . . . . . . . . . . . .
Net change in noncontrolling interests . . . . . . .
Amounts related to issuance of common stock
from dividend reinvestment and stock
incentive plans, net of forfeitures . . . . . . . . .
Net proceeds from issuance of common
stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,232,432
17,612
3,583
162
25,445
(10,456)
(282)
13,666
1,030,925
Conversion of preferred stock . . . . . . . . . . . . .
(718,498)
12,712
705,786
Dividends paid:
Common stock dividends . . . . . . . . . . . . . . .
(1,404,977)
67,365
13,440
1,299,797
31,052
1,330,849
(68,887)
(65,304)
14,869
1,044,591
—
(1,404,977)
Balances at December 31, 2019 . . . . . . . . . . . . $
— $411,005 $20,190,107
$(78,955) $7,353,966
$(12,223,534)
$(112,157)
$
12
$966,183
$16,506,627
See accompanying notes
86
CONSOLIDATED STATEMENTS OF CASH FLOWS
WELLTOWER INC. AND SUBSIDIARIES
(in thousands)
Operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided from (used in) operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other amortization expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on derivatives and financial instruments, net . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on extinguishment of debt, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (income) from unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rental income in excess of cash received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization related to above (below) market leases, net
. . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on real estate dispositions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions by unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided from (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities:
Cash disbursed for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash disbursed for capital improvements to existing properties . . . . . . . . . . . . . . . . . . .
Cash disbursed for construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in loans receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Principal collected on loans receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investments, net of payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contributions to unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions by unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from (payments on) derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of real property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided from (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities:
Net increase (decrease) under unsecured credit facility and commercial paper . . . . . . .
Proceeds from issuance of senior unsecured notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to extinguish senior unsecured notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net proceeds from the issuance of secured debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments on secured debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net proceeds from the issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redemption of preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for deferred financing costs and prepayment penalties . . . . . . . . . . . . . . . . .
Contributions by noncontrolling interests(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to noncontrolling interests(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash distributions to stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided from (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of foreign currency translation on cash and cash equivalents and restricted
cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . .
Cash, cash equivalents and restricted cash at beginning of period . . . . . . . . . . . . . . . . . . .
Cash, cash equivalents and restricted cash at end of period . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental cash flow information:
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1)
Includes amounts attributable to redeemable noncontrolling interests.
See accompanying notes.
87
Year Ended December 31,
2019
2018
2017
$ 1,330,410
$
829,750
$
540,613
1,027,073
16,827
18,690
28,133
25,047
(4,399)
84,155
(42,434)
(106,331)
(676)
(748,041)
—
(29,068)
(63,418)
950,459
17,000
—
115,579
27,646
(4,016)
16,097
641
(32,857)
2,608
(415,575)
21
70,762
5,829
921,720
16,521
62,966
124,483
19,102
2,284
37,241
83,125
(80,398)
357
(344,250)
116
26,811
23,486
1,535,968
1,583,944
1,434,177
(3,959,683)
(328,824)
(323,488)
(15,272)
(119,699)
127,706
(8,282)
(279,631)
216,231
(8,499)
2,650,650
(3,560,360)
(266,183)
(160,706)
(7,905)
(112,048)
203,935
(44,535)
(136,854)
90,916
65,399
1,541,870
(805,264)
(250,276)
(232,715)
(13,489)
(101,216)
214,980
(44,094)
(114,365)
70,287
52,719
1,378,014
(2,048,791)
(2,386,471)
154,581
440,597
3,974,559
(3,335,290)
343,696
(284,433)
1,056,125
—
(84,142)
55,365
(172,940)
(1,400,712)
(15,675)
428,000
2,824,176
(1,450,000)
45,447
(362,841)
789,575
—
(29,691)
39,207
(109,871)
(1,348,863)
(6,771)
74,000
7,500
(5,000)
241,772
(1,144,346)
621,987
(287,500)
(54,333)
56,560
(87,711)
(1,325,617)
(10,839)
577,150
818,368
(1,913,527)
5,310
69,637
316,129
385,766
574,536
14,338
$
$
(9,015)
26,852
6,826
309,303
316,129
501,404
2,250
(297,917)
607,220
309,303
488,265
10,410
$
$
$
$
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Business
Welltower Inc., an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health
care infrastructure. The company invests with leading seniors housing operators, post-acute providers and health
systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve
people’s wellness and overall health care experience. Welltower™, a real estate investment trust (“REIT”), owns
interests in properties concentrated in major, high-growth markets in the United States (“U.S.”), Canada and the
United Kingdom (“U.K.”), consisting of seniors housing, post-acute communities and outpatient medical
properties.
2. Accounting Policies and Related Matters
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. generally accepted
accounting principles (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Actual results could differ from those
estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of our wholly-owned subsidiaries and joint
venture (“JV”) entities that we control, through voting rights or other means. All material intercompany
transactions and balances have been eliminated in consolidation. At inception of JV transactions, we identify
entities for which control is achieved through means other than voting rights (“variable interest entities” or
“VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly
defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial
interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional
subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary
beneficiary. Accounting Standards Codification Topic 810, Consolidations (“ASC 810”), requires enterprises to
perform a qualitative approach to determining whether or not a VIE will need to be consolidated. This evaluation
is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact
that entity’s economic performance. For investments in JVs, U.S. GAAP may preclude consolidation by the sole
general partner in certain circumstances based on the type of rights held by the limited partner(s). We assess the
limited partners’ rights and their impact on our consolidation conclusions, and we reassess if there is a change to
the terms or in the exercisability of the rights of the limited partners, the sole general partner increases or
decreases its ownership of limited partnership interests, or there is an increase or decrease in the number of
outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited
liability companies.
Revenue Recognition
For our Triple-net and Outpatient Medical segments, a significant source of our revenue is generated
through leasing arrangements. Leases with fixed annual rental escalators are generally recognized on a straight-
line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with
contingent rental escalators is generally recorded based on the contractual cash rental payments due for the
period. Leases in our Outpatient Medical portfolio typically include some form of operating expense
reimbursement by the tenant. Certain payments made to operators are treated as lease incentives and amortized as
a reduction of revenue over the lease term.
For our Seniors Housing Operating segment, revenue from resident fees and services is predominantly
service-based, and generally are recognized monthly as services are provided. Agreements with residents
88
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
generally have a term of one year and are cancelable by the resident with 30 days’ notice. Management contracts
are present in some of our joint venture agreements to provide asset and property management, leasing,
marketing and other services.
Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an
evaluation of collectability risk.
We recognize gains on the disposition of real estate when the recognition criteria have been met, generally
at the time the risks and rewards and title have transferred and we no longer have substantial continuing
involvement with the real estate sold. We recognize losses from disposition of real estate when known.
Cash and Cash Equivalents
Cash and cash equivalents consist of all highly liquid investments with an original maturity of three months
or less.
Restricted Cash
Restricted cash primarily consists of amounts held by lenders to provide future payments for real estate
taxes, insurance, tenant and capital improvements, amounts held in escrow relating to transactions we are entitled
to receive over a period of time as outlined in the escrow agreement and net proceeds from property sales that
were executed as tax-deferred dispositions under Internal Revenue Code (“IRC”) section 1031.
Deferred Loan Expenses
Deferred loan expenses are costs incurred by us in connection with the issuance, assumption and
amendments of debt arrangements. Deferred loan expenses related to debt instruments, excluding the primary
unsecured credit facility, are recorded as a reduction of the related debt liability. Deferred loan expenses related
to the primary unsecured credit facility are included in other assets. We amortize these costs over the term of the
debt using the straight-line method, which approximates the effective interest method.
Investments in Unconsolidated Entities
Investments in entities that we do not consolidate but have the ability to exercise significant influence over
operating and financial policies are reported under the equity method of accounting. Under the equity method,
our share of the investee’s earnings or losses is included in our consolidated results of operations. The initial
carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity
interest inclusive of transaction costs. To the extent that our cost basis is different from the basis reflected at the
entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such
amortization is included in our share of equity in earnings of the entity. We evaluate our equity method
investments for impairment based upon a comparison of the estimated fair value of the equity method investment
to its carrying value. When we determine a decline in the estimated fair value of such an investment below its
carrying value is other-than-temporary, an impairment is recorded.
Equity Securities
Equity securities are measured at fair value with gains and losses recognized in loss (gain) on derivatives
and financial instruments, net in the Consolidated Statements of Comprehensive Income.
Redeemable Noncontrolling Interests
Certain noncontrolling interests are redeemable at fair value. Accordingly, we record the carrying amount of
the noncontrolling interests at the greater of (i) the initial carrying amount, increased or decreased for the
89
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
noncontrolling interest’s share of net income or loss and its share of other comprehensive income or loss, and
dividends or (ii) the redemption value. If it is probable that the interests will be redeemed in the future, we
accrete the carrying value to the redemption value over the period until expected redemption, currently a
weighted-average period of approximately one year. In accordance with ASC 810, the redeemable noncontrolling
interests are classified outside of permanent equity, as a mezzanine item, in the balance sheet. At December 31,
2019, the current redemption value of redeemable noncontrolling interests exceeded the carrying value of
$475,877,000 by $14,953,000.
We entered into certain DownREIT partnerships which give a real estate seller the ability to exchange its
property on a tax deferred basis for equity membership interests (“OP units”). The OP units may be redeemed
any time following the first anniversary of the date of issuance at the election of the holders for one share of our
common stock per unit or, at our option, cash.
Real Property Owned
Real estate acquisitions are generally classified as asset acquisitions for which we record tangible assets and
identifiable intangible assets and liabilities at cost on a relative fair value basis. Liabilities assumed and any
associated noncontrolling interests are reflected at fair value. Tangible assets primarily consist of land, buildings
and improvements.
Identifiable intangible assets and liabilities consist primarily of the above or below market component of
in-place leases and the value associated with the presence of in-place leases. The value allocable to the above or
below market component of the acquired in-place lease is determined based upon the present value (using a
discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the
contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of
the amounts that would be paid using fair market rates over the remaining term of the lease. The amounts
allocated to above market leases are included in acquired lease intangibles and below market leases are included
in other liabilities in the balance sheet and are amortized to rental income over the remaining terms of the
respective leases or lease-up period.
relationship values for
in-place tenants based on management’s evaluation of
The total amount of other intangible assets acquired is further allocated to in-place lease values and
the specific
customer
characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics
considered by management in allocating these values include the nature and extent of our existing business
relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit
quality and expectations of lease renewals, among other factors. The total amount of other intangible assets
acquired is further allocated to in-place lease values for in-place residents with such value representing (i) value
associated with lost revenue related to tenant reimbursable operating costs that would be incurred in an assumed
re-leasing period, and (ii) value associated with lost rental revenue from existing leases during an assumed
re-leasing period. This intangible asset is amortized over the remaining life of the lease or the assumed re-leasing
period.
Real property developed by us is recorded at cost, including the capitalization of construction period
interest. These properties are depreciated on a straight-line basis over their estimated useful lives which range
from 15 to 40 years for buildings and 5 to 15 years for improvements. We consider costs incurred in conjunction
with re-leasing properties, including tenant improvements and lease commissions, to represent the acquisition of
productive assets and, accordingly, such costs are reflected as investment activities in our Consolidated
Statement of Cash Flows.
The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if
facts and circumstances suggest that the assets may be impaired or that the depreciable life may need to be
changed. We consider external factors relating to each asset and the existence of a master lease which may link
90
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the cash flows of an individual asset to a larger portfolio of assets leased to the same tenant. If these factors and
the projected undiscounted cash flows of the assets over the remaining depreciation period indicate that the assets
will not be recoverable, the carrying value is reduced to the estimated fair market value. In addition, we are
exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and
health care industries. A downturn in the real estate industry could adversely affect the value of our properties
and our ability to sell properties for a price or on terms acceptable to us. Additionally, properties that meet the
held for sale criteria are recorded at the lessor of fair value less costs to sell or the carrying value.
Expenditures for repairs and maintenance are expensed as incurred.
Capitalization of Construction Period Interest
We capitalize interest costs associated with funds used for the construction of properties owned by us. The
amount capitalized is based upon the balance outstanding during the construction period using the rate of interest
which approximates our company-wide cost of financing. Our interest expense reflected in the Consolidated
Statements of Comprehensive Income has been reduced by the amounts capitalized.
Loans Receivable
Loans receivable are recorded on our Consolidated Balance Sheets in real estate loans receivable, net of
allowance, or for non real estate loans receivable, in receivables and other assets. Real estate loans receivable
consists of mortgage loans and other real estate loans which are primarily collateralized by a first, second or third
mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in, the related properties,
corporate guarantees and/or personal guarantees. Non real estate loans are generally corporate loans with no real
estate backing. Interest income on loans is recognized as earned based upon the principal amount outstanding
subject to an evaluation of collectability risks.
In Substance Real Estate Investments
We provide loans to third parties for the acquisition, development and construction of real estate. Under
these arrangements, it is possible that we will participate in the expected residual profits of the project through
the sale, refinancing or acquisition of the property. We evaluate the characteristics of each arrangement,
including its risks and rewards, to determine whether they are more similar to those associated with a loan or an
investment in real estate. Arrangements with characteristics implying loan classification are presented as real
estate loans receivable and result in the recognition of interest income. Arrangements with characteristics
implying real estate joint ventures are treated as in substance real estate investments and presented as investments
in unconsolidated entities and are accounted for using the equity method. The classification of each arrangement
as either a real estate loan receivable or investment in unconsolidated entity involves judgment and relies on
various factors,
including market conditions, amount and timing of expected residual profits, credit
enhancements in the form of guarantees, estimated fair value of the collateral, and significance of borrower
equity in the project, among others. The classification of such arrangements is performed at inception, and
periodically reassessed when significant changes occur in the circumstances or conditions described above.
Allowance for Losses on Loans Receivable
The allowance for losses on loans receivable is maintained at a level believed adequate to absorb potential
losses in our loans receivable. The determination of the allowance is based on a quarterly evaluation of these
loans, including general economic conditions and estimated collectability of loan payments. We evaluate the
collectability of our loans receivable based on a combination of factors, including, but not limited to, delinquency
status, historical loan charge-offs, financial strength of the borrower and guarantors, and value of the underlying
91
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
collateral. If such factors indicate that there is greater risk of loan charge-offs, additional allowances or
placement on non-accrual status may be required. A loan is impaired when, based on current information and
events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual
terms of the original loan agreement. Consistent with this definition, all loans on non-accrual are deemed
impaired. To the extent circumstances improve and the risk of collectability is diminished, we will return these
loans to income accrual status. While a loan is on non-accrual status, any cash receipts are applied against the
outstanding principal balance. Any loans with collectability concerns are subjected to a projected payoff
valuation. The valuation is based on the expected future cash flows and/or the estimated fair value of the
underlying collateral. The valuation is compared to the outstanding balance to determine the reserve needed for
each loan. We may base our valuation on a loan’s observable market price, if any, or the fair value of collateral,
net of sales costs, if the repayment of the loan is expected to be provided solely by the collateral.
Goodwill
Goodwill is tested annually for impairment and is tested for impairment more frequently if events and
circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the
carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of
goodwill is less than the carrying amount of that goodwill. We have not had any goodwill impairments.
Fair Value of Derivative Instruments
Derivatives are recorded at fair value on the balance sheet as assets or liabilities. The valuation of derivative
instruments requires us to make estimates and judgments that affect the fair value of the instruments. Fair values
of our derivatives are estimated by pricing models that consider the forward yield curves and discount rates. The
fair value of our forward exchange contracts are estimated by pricing models that consider foreign currency spot
rates, forward trade rates and discount rates. Such amounts and the recognition of such amounts are subject to
significant estimates that may change in the future. See Note 12 for additional information.
Federal Income Tax
We have elected to be treated as a REIT under the applicable provisions of the IRC, commencing with our
first taxable year, and made no provision for U.S. federal income tax purposes prior to our acquisition of our
taxable REIT subsidiaries (“TRSs”). As a result of these as well as subsequent acquisitions, we now record
income tax expense or benefit with respect to certain of our entities that are taxed as TRSs under provisions
similar to those applicable to regular corporations and not under the REIT provisions. We account for deferred
income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in our consolidated financial statements or tax returns.
Under this method, we determine deferred tax assets and liabilities based on the differences between the financial
reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Any increase or decrease in the deferred tax liability that results from a
change in circumstances, and that causes a change in our judgment about expected future tax consequences of
events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact
of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely
than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the
valuation allowance that results from a change in circumstances, and that causes a change in our judgment about
the realizability of the related deferred tax asset, is included in the tax provision when such changes occur. See
Note 19 for additional information.
92
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Foreign Currency
Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. We
translate the results of operations of our foreign subsidiaries into U.S. Dollars using average rates of exchange in
effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the
period. We record resulting currency translation adjustments in accumulated other comprehensive income, a
component of stockholders’ equity, on our Consolidated Balance Sheets.
Earnings Per Share
Basic earnings per share is computed by dividing net income available to common stockholders by the
weighted-average number of shares outstanding for the period adjusted for non-vested shares of restricted stock.
The computation of diluted earnings per share is similar to basic earnings per share, except that the number of
shares is increased to include the number of additional common shares that would have been outstanding if the
potentially dilutive common shares had been issued.
Reclassifications
Certain amounts in prior years have been reclassified to conform to current year presentation.
New Accounting Standards
We adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASC 842”) which
requires lessees to recognize assets and liabilities on their Consolidated Balance Sheet related to the rights and
obligations created by most leases, while continuing to recognize expenses on their Consolidated Statement of
Comprehensive Income over the lease term. We adopted ASC 842 as of January 1, 2019, using the modified
retrospective approach and have elected the package of practical expedients permitted under the transition
guidance within the new standard, which among other things, permits us to carry forward our prior conclusions
for lease classification and initial direct costs on existing leases. We also made an accounting policy election to
keep short-term leases less than twelve months off the balance sheet for all classes of underlying assets.
In July 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-11 “Leases (Topic
842): Targeted Improvements” that (1) simplifies transition requirements for both lessees and lessors by adding
an option that permits entities to apply the transition provisions of the new standard at its adoption date instead of
at the earliest comparative period presented in its financial statements and (2) allows lessors to elect, as a
practical expedient, to not separate lease and non-lease components in a contract, and instead to account for as a
single lease component, if certain criteria are met. This practical expedient causes an entity to assess whether a
contract is predominantly lease or service-based and recognize the entire contract under the relevant accounting
guidance (e.g. predominantly lease-based would be accounted for under ASC 842 and predominantly service-
based would be accounted for under ASU 2014-09, “Revenue from Contracts with Customers (ASC 606)”). For
the year ended December 31, 2018, we recognized revenue for our Seniors Housing Operating resident
agreements in accordance with the provisions of the prior lease guidance, ASC 840, “Leases”. Upon adoption of
ASC 842, we elected the lessor practical expedient described above and recognized our revenue for our Seniors
Housing Operating segment based upon the predominant component, generally the non-lease service component.
Therefore, beginning on January 1, 2019, we accounted for the majority of such resident agreements under ASC
606. The timing and pattern of revenue recognition is substantially the same as that prior to adoption.
The FASB also issued ASU 2018-20 “Leases (Topic 842): Narrow Improvements for Lessors”, which
provides lessors the ability to make an accounting policy election not to evaluate whether certain sales taxes and
other similar taxes imposed by a governmental authority on a specific lease revenue-producing transaction are
the primary obligation of the lessor as owner of the underlying leased asset. A lessor that makes this election will
93
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
exclude these taxes from the measurement of lease revenue and the associated expense. Upon adoption of ASC
842, we utilized this practical expedient in instances in which real estate taxes are paid directly by our tenants to
taxing authorities. For triple-net leasing arrangements in which the tenant remits payment for real estate taxes to
us and we pay the taxing authority, we have included the associated revenue and expense in rental income and
property operating expenses on the Consolidated Statements of Comprehensive Income. This reporting had no
impact on our net income.
For leases in which the Company is the lessee, primarily consisting of ground leases and various office and
equipment leases, we recognized upon adoption a right of use asset of $509,386,000 which included the present
value of minimum leases payments, existing above and/or below market lease intangible values and existing
liabilities associated with such leases. We also recognized operating lease liabilities of
straight-line rent
$357,070,000. The standard did not materially impact our Consolidated Statements of Comprehensive Income or
our Consolidated Statement of Cash Flows. See Note 6 for additional details.
In 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” This
standard requires a new forward-looking “expected loss” model to be used for receivables, held-to-maturity debt,
loans receivable, and other instruments. In November 2018, the FASB issued an amendment excluding operating
lease receivables accounted for under the new leases standard from the scope of the new credit loss standard.
ASU 2016-13 is effective for the Company on January 1, 2020.
We have continued our
including data collection and processing, model
development and validation, and establishment of the governance and control processes. We currently do not
believe that the adoption of this new guidance will have a material impact on our consolidated financial
statements.
implementation efforts,
3. Real Property Acquisitions and Development
The total purchase price for all properties acquired has been allocated to the tangible and identifiable
intangible assets and liabilities at cost on a relative fair value basis. Liabilities assumed and any associated
noncontrolling interests are reflected at fair value. The results of operations for these acquisitions have been
included in our consolidated results of operations since the date of acquisition and are a component of the
appropriate segments. Transaction costs primarily represent costs incurred with acquisitions, including due
diligence costs, fees for legal and valuation services, termination of pre-existing relationships computed based on
the fair value of the assets acquired, lease termination fees and other acquisition-related costs. Transaction costs
related to asset acquisitions are capitalized as a component of the purchase price and all other non-capitalizable
costs are reflected in other expenses on our Consolidated Statement of Comprehensive Income.
94
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following tables summarize our real property investment activity by segment for the years ended
December 31, 2019, 2018 and 2017 (in thousands):
Year Ended December 31, 2019
Seniors Housing
Operating
Land and land improvements . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . .
Acquired lease intangibles . . . . . . . . . . . . . . . . . . . . . . . . .
Real property held for sale . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . .
Right of use assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . .
$ 154,470
1,518,748
76,009
17,435
36,174
—
15,634
Total assets acquired(1) . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . .
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . .
Noncontrolling interests(2)
Non-cash acquisition related activity(3)
Cash disbursed for acquisitions . . . . . . . . . . . . . . . . . . .
Construction in progress additions . . . . . . . . . . . . . . . . . . .
Capitalized interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accruals(4)
Cash disbursed for construction in progress . . . . . . . . . . .
Capital improvements to existing properties . . . . . . . . . . .
Total cash invested in real property, net of cash
1,818,470
(194,408)
—
(12,024)
(206,432)
(67,987)
(11,889)
1,532,162
227,018
(8,889)
(8,643)
—
209,486
260,413
Triple-net
$ 24,097
203,282
—
—
—
—
—
Outpatient
Medical
$ 293,933
1,954,928
183,921
—
—
58,377
1,586
Total
$ 472,500
3,676,958
259,930
17,435
36,174
58,377
17,220
227,379
2,492,745
— (206,754)
(47,740)
—
(32,893)
—
— (287,387)
(1,201)
—
(4,015)
—
2,204,157
60,884
(3,998)
—
(1,035)
223,364
61,414
(2,385)
(878)
—
58,151
17,426
4,538,594
(401,162)
(47,740)
(44,917)
(493,819)
(73,203)
(11,889)
3,959,683
349,316
(15,272)
(9,521)
(1,035)
55,851
50,985
323,488
328,824
acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,002,061
$298,941
$2,310,993
$4,611,995
(1) Excludes $2,090,000 of unrestricted and restricted cash acquired.
(2)
Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) Relates to the acquisition of assets previously recognized as investments in unconsolidated entities.
(4) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current
period.
95
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2018
Seniors Housing
Operating
Land and land improvements . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . .
Acquired lease intangibles . . . . . . . . . . . . . . . . . . . . . . . .
Real property held for sale . . . . . . . . . . . . . . . . . . . . . . . .
Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . .
$ 51,440
621,731
69,504
—
1,492
Total assets acquired(1)
. . . . . . . . . . . . . . . . . . . . . . . . .
Secured debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . .
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests(2)
Cash disbursed for acquisitions . . . . . . . . . . . . . . . . . .
Construction in progress additions . . . . . . . . . . . . . . . . . .
Capitalized interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . .
Accruals(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash disbursed for construction in progress . . . . . . . . . . .
Capital improvements to existing properties . . . . . . . . . .
Total cash invested in real property, net of cash
744,167
(134,752)
(18,463)
(153,215)
(14,390)
576,562
82,621
(3,190)
3,934
—
83,365
201,001
Triple-net
$ 413,588
2,242,884
9,690
396,265
1,354
Outpatient
Medical
$ 77,239
478,740
50,813
22,032
1,185
3,063,781
630,009
— (169,156)
(14,896)
(13,199)
Total
$ 542,267
3,343,355
130,007
418,297
4,031
4,437,957
(303,908)
(46,558)
(13,199)
(512,741)
(184,052)
(350,466)
— (527,131)
2,537,841
55,558
(2,238)
272
—
53,592
10,046
445,957
26,565
(2,477)
—
(339)
23,749
55,136
3,560,360
164,744
(7,905)
4,206
(339)
160,706
266,183
acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 860,928
$2,601,479
$ 524,842
$3,987,249
(1) Excludes $395,397,000 of unrestricted and restricted cash acquired.
(2)
Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current
period.
96
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2017
Seniors Housing
Operating
Land and land improvements . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . .
Acquired lease intangibles . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . .
$ 42,525
428,777
63,912
3,959
Total assets acquired(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured debt
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . .
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests(2) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash acquisition related activity(3) . . . . . . . . . . . . . . . . .
Cash disbursed for acquisitions . . . . . . . . . . . . . . . . . . . .
Construction in progress additions . . . . . . . . . . . . . . . . . . . .
Capitalized interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . .
Accruals(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash disbursed for construction in progress . . . . . . . . . . . . .
Capital improvements to existing properties . . . . . . . . . . . .
Total cash invested in real property, net of cash
539,173
—
(46,301)
(46,301)
(4,701)
(67,633)
420,538
84,874
(9,106)
(6,830)
—
68,938
185,473
Triple-net
$ 33,416
248,459
—
—
Outpatient
Medical
$ 40,565
159,643
24,014
10
281,875
224,232
— (25,708)
(3,181)
(21,236)
Total
$ 116,506
836,879
87,926
3,969
1,045,280
(25,708)
(70,718)
(21,236)
(7,275)
(54,901)
198,463
120,797
(4,713)
(610)
—
115,474
19,989
(28,889)
(9,080)
(96,426)
(21,056)
— (122,534)
186,263
37,094
(2,406)
—
13,615
48,303
44,814
805,264
242,765
(16,225)
(7,440)
13,615
232,715
250,276
acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$674,949
$333,926
$279,380
$1,288,255
(1) Excludes $6,591,000 of unrestricted and restricted cash acquired.
(2)
Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
(3) For the Seniors Housing Operating segment, includes $59,665,000 related to the acquisition of assets previously financed as investments
in unconsolidated entities and $7,968,000 related to the acquisition of assets previously financed as loans receivable. For the Triple-net
segment, amount is related to the acquisition of assets previously financed as loans receivable.
(4) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, off-set by amounts paid in the current
period.
Acquisition of Quality Care Properties
On July 26, 2018, we completed the acquisition of Quality Care Properties Inc. (“QCP”), with QCP
shareholders receiving $20.75 of cash for each share of QCP common stock and all existing QCP debt was repaid
upon closing. Prior to the acquisition, ProMedica Health System (“ProMedica”) completed the acquisition of
HCR ManorCare. Immediately following the acquisition of QCP, we formed an 80/20 joint venture with
ProMedica to own the real estate associated with the 218 seniors housing properties leased to ProMedica under a
lease agreement with the following key terms: (i) 15-year absolute triple-net master lease with three five-year
renewal options; (ii) initial annual cash rent of $179 million with a year one escalator of 1.375% and 2.75%
annual escalators thereafter; and (iii) full corporate guarantee of ProMedica. Additionally, we acquired 59 seniors
housing properties classified as held for sale and leased to ProMedica under a non-yielding lease, 12 seniors
housing properties and one surgery center classified as held for sale and leased to operators under existing
triple-net leases, 14 seniors housing properties leased to operators under existing triple-net leases and one multi-
tenant medical office building leased to various tenants. The aggregate consideration to acquire the QCP shares
and repay outstanding QCP debt was approximately $3.5 billion.
97
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We concluded that the QCP acquisition met the definition of an asset acquisition under ASU 2017-01,
“Clarifying the Definition of a Business”. The following table presents the purchase price calculation and the
allocation to assets acquired and liabilities assumed based upon their relative fair value:
(In thousands)
Land and land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquired lease intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real property held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 417,983
2,253,451
12,820
418,297
381,913
4,981
1,354
3,490,799
(13,199)
(13,199)
(512,741)
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,964,859
Construction Activity
The following is a summary of the construction projects that were placed into service and began generating
revenues during the periods presented (in thousands):
Year Ended
December 31,
2019
December 31,
2018
December 31,
2017
Development projects:
Seniors Housing Operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical
Total development projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expansion projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$28,117
—
21,006
49,123
—
$ 86,931
90,055
11,358
188,344
20,029
3,634
$
283,472
63,036
350,142
10,336
Total construction in progress conversions . . . . . . . . . . . . . . . . . . . . . . .
$49,123
$208,373
$360,478
98
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Real Estate Intangibles
The following is a summary of our real estate intangibles, excluding those classified as held for sale, as of
the dates indicated (dollars in thousands):
December 31,
2019
December 31,
2018
Assets:
In place lease intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Above market tenant leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Below market ground leases(1)
Lease commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross historical cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,513,836
59,540
—
43,675
1,617,051
(1,181,158)
435,893
$
$ 1,410,725
63,935
64,513
41,986
1,581,159
(1,197,336)
383,823
$
Weighted-average amortization period in years . . . . . . . . . . . . . . . . . .
10.3
16.0
Liabilities:
Below market tenant leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Above market ground leases(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Gross historical cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
99,035
—
99,035
(49,390)
81,676
8,540
90,216
(44,266)
Net book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
49,645
$
45,950
Weighted-average amortization period in years . . . . . . . . . . . . . . . . . .
8.6
14.7
(1) Effective on January 1, 2019 with the adoption of ASC 842, above and below market ground lease intangibles are reported within the
right of use assets, net line on the Consolidated Balance Sheet.
The following is a summary of real estate intangible amortization income (expense) for the periods
presented (in thousands):
Rental income related to (above)/below market tenant leases,
net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization related to in place lease
Year Ended December 31,
2019
2018
2017
$
508
$
(1,269)
$
875
intangibles and lease commissions . . . . . . . . . . . . . . . . . . . .
(135,047)
(122,515)
(145,132)
The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods
presented (in thousands):
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$119,973
59,824
40,802
34,803
27,415
153,076
$ 9,498
8,529
7,758
5,483
3,362
15,015
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$435,893
$49,645
Assets
Liabilities
99
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Dispositions and Real Property Held for Sale
We periodically sell properties for various reasons, including favorable market conditions, the exercise of
tenant purchase options or reduction of concentrations (e.g. property type, relationship or geography). During the
year ended December 31, 2019, we disposed of our Benchmark Senior Living portfolio for a gross sale price of
$1.8 billion and a gain on sale of $520 million.
At December 31, 2019, 18 Seniors Housing Operating, 11 Triple-net and 42 Outpatient Medical properties
with an aggregate net real estate balance of $1,253,008,000 were classified as held for sale for which we expect
gross sales proceeds of approximately $1,960,685,000. In addition to the real property balances held for sale,
secured debt of $112,589,000 and net other assets and liabilities of $25,194,000 are included in the Consolidated
Balance Sheet related to held for sale properties. During the year ended December 31, 2019, we recorded net
impairment charges of $13,130,000 related to certain held for sale properties for which the carrying value
exceeded the fair values, less estimated costs to sell, and $15,003,000 related to five held for use properties for
which the carrying value exceeded the sum of the future undiscounted cash flows. The following is a summary of
our real property disposition activity for the periods presented (in thousands):
December 31,
2019
Year Ended
December 31,
2018
December 31,
2017
Real property dispositions:
Seniors Housing Operating . . . . . . . . . . . . . . . . . . . . . .
Triple-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical
Total dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) on sales of real property, net . . . . . . . . . . . . . .
Net other assets (liabilities) disposed . . . . . . . . . . . . . . . .
$1,232,816
667,632
482
1,900,930
748,041
1,679
$
36,627
835,093
253,397
1,125,117
415,575
1,178
$
74,832
916,689
19,697
1,011,218
344,250
22,546
Proceeds from real property sales . . . . . . . . . . . . . . . . . . .
$2,650,650
$1,541,870
$1,378,014
100
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Dispositions and Assets Held for Sale
Pursuant to our adoption of ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property,
Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of
Components of an Entity” (ASU 2014-08”), operating results attributable to properties sold subsequent to or
classified as held for sale after January 1, 2014 and which do not meet the definition of discontinued operations
are no longer reclassified on our Consolidated Statements of Comprehensive Income. The following represents
the activity related to these properties for the periods presented (in thousands):
Year Ended December 31,
2019
2018
2017
Revenues:
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$449,080
$665,384
$769,835
Expenses:
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,924
257,510
65,698
6,617
383,907
109,674
12,458
374,370
153,009
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
328,132
500,198
539,837
Income (loss) from real estate dispositions, net . . . . . . . . . . . . . .
$120,948
$165,186
$229,998
6. Leases
We lease land, buildings, office space and certain equipment. Many of our leases include a renewal option
to extend the term from one to 25 years or more. Renewal options that we are reasonably certain to exercise are
recognized in our right-of-use assets and lease liabilities. As most of our leases do not provide a rate implicit in
the lease agreement, we use our incremental borrowing rate available at lease commencement to determine the
present value of lease payments. The incremental borrowing rates were determined using our longer term
borrowing rates (actual pricing through 30 years, as well as other longer-term market rates). For leases that
commenced prior to January 1, 2019, we used the incremental borrowing rate on December 31, 2018.
We sublease certain real estate to a third party. Our sublease portfolio consists of a finance lease with
Genesis HealthCare for seven buildings.
The components of lease expense were as follows for the period presented (in thousands):
Classification
Year Ended
December 31, 2019
Operating lease cost:(1)
Real estate lease expense . . . . . . . . . . . . . . . . Property operating expenses
Non-real estate investment lease expense . . . General and administrative expenses
$25,166
1,654
Finance lease cost:
Amortization of leased assets . . . . . . . . . . . . Property operating expenses
Interest on lease liabilities . . . . . . . . . . . . . . . Interest expense
Sublease income . . . . . . . . . . . . . . . . . . . . . . . . Rental income
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,795
4,748
(4,173)
$35,190
(1)
Includes short-term leases which are immaterial.
101
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Maturities of lease liabilities as of December 31, 2019 are as follows (in thousands):
Operating
Leases
Finance
Leases
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
23,356
23,322
22,147
22,117
21,294
1,073,396
$
9,121
8,786
8,149
69,182
1,419
89,678
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Imputed interest
1,185,632
(820,829)
186,335
(77,445)
Total present value of lease liabilities . . . . . . . . . . . . . . . . . . . . . .
$ 364,803
$108,890
Supplemental balance sheet information related to leases was as follows as of December 31, 2019 (in
thousands, except lease terms and discount rate):
Classification
December 31, 2019
Right of use assets:
Operating leases — real estate . . . . . . .
Finance leases — real estate . . . . . . . .
Right of use assets, net
Right of use assets, net
Real estate right of use assets, net
Operating leases — non-real estate
. .
investments . . . . . . . . . . . . . . . . . . . .
Receivables and other assets
Total right of use assets, net . . . . . . . . . . .
Lease liabilities:
Operating leases . . . . . . . . . . . . . . . . . .
Financing leases . . . . . . . . . . . . . . . . . .
Total lease liabilities . . . . . . . . . . . . . . . .
Weighted average remaining lease term
(years):
Operating leases . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . .
Weighted average discount rate:
Operating leases . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . .
$374,217
162,216
536,433
12,474
$548,907
$364,803
108,890
$473,693
46.0
15.9
5.00%
5.18%
102
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Supplemental cash flow information related to leases was as follows for the date indicated (in thousands):
Classification
Year Ended
December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases . . . . . Decrease (increase) in receivables
and other assets
Operating cash flows from operating leases . . . . . Increase (decrease) in accrued
expenses and other liabilities
Operating cash flows from finance leases . . . . . . . Decrease (increase) in receivables
and other assets
Financing cash flows from finance leases . . . . . . . Other financing activities
$ 6,397
(5,489)
10,732
(3,401)
Substantially all of our operating leases in which we are the lessor contain escalating rent structures. Leases
with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period,
subject to a collectability assessment. Rental income related to leases with contingent rental escalators is
generally recorded based on the contractual cash rental payments due for the period. Leases in our Outpatient
Medical portfolio typically include some form of operating expense reimbursement by the tenant. We recognized
$1,588,400,000 of rental and other revenues related to operating leases, of which $200,564,000 was for variable
lease payments, for the year ended December 31, 2019, which primarily represents the reimbursement of
operating costs such as common area maintenance expenses, utilities, insurance and real estate taxes. The
following table sets forth the future minimum lease payments receivable for leases in effect at December 31,
2019 (excluding properties in our Seniors Housing Operating portfolio and excluding any operating expense
reimbursements) (in thousands):
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter
$ 1,430,978
1,384,721
1,346,917
1,302,601
1,265,988
9,026,163
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$15,757,368
103
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Loans Receivable
The following is a summary of our loans receivable (in thousands):
Year Ended December 31,
2019
2018
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other real estate loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for losses on real estate loans receivable . . . . . . . . . . . . . . . . . . . .
$188,062
124,696
(42,376)
$317,443
81,268
(68,372)
Real estate loans receivable, net of allowance . . . . . . . . . . . . . . . . . . . . . . . . .
Non real estate loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for losses on non real estate loans receivable . . . . . . . . . . . . . . . . .
270,382
362,850
(25,996)
330,339
282,443
—
Non real estate loans receivable, net of allowance(1)
. . . . . . . . . . . . . . . . . . . .
336,854
282,443
Total loans receivable, net of allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$607,236
$612,782
(1)
Included in receivables and other assets on the Consolidated Balance Sheets
The following is a summary of our loan activity for the periods presented (in thousands):
December 31, 2019
December 31, 2018
December 31, 2017
Year Ended
Advances on loans receivable:
Investments in new loans . . . . . . . . . . . . .
Draws on existing loans . . . . . . . . . . . . . .
$ 46,824
72,875
Net cash advances on loans receivable . .
119,699
Receipts on loans receivable:
Loan payoffs . . . . . . . . . . . . . . . . . . . . . .
Principal payments on loans . . . . . . . . . .
Net cash receipts on loans . . . . . . . . . . . .
118,703
9,003
127,706
$ 77,289
34,759
112,048
144,700
59,235
203,935
$ 61,122
40,094
101,216
181,549
33,431
214,980
Net cash advances (receipts) on loans . . . . .
$ (8,007)
$ (91,887)
$(113,764)
104
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In 2016, we restructured real estate loans with Genesis Healthcare and recorded a loan loss charge in the
amount of $6,935,000 on one of the loans as the present value of expected future cash flows was less than the
carrying value of the loan. During 2017, we recorded an additional loan loss charge of $62,966,000 relating to
real estate loans receivable from Genesis HealthCare based on an estimation of future cash flows discounted at
the effective interest rate of the loans. In 2019, we recognized a provision for loan losses of $18,690,000 to fully
reserve for and eventually wrote off certain Triple-net real estate loans receivable that were no longer deemed
collectible. In the fourth quarter of 2019 one of the Genesis Healthcare real estate loans transitioned to a non real
estate loan due to the sale of the underlying properties that served as collateral for the loan. As of December 31,
2019, the total allowance for loan loss balance of $68,372,000 is deemed to be sufficient to absorb expected
losses. In addition, at December 31, 2019, we had one real estate loan with an outstanding balance of $2,534,000
on non-accrual status. No provision for loan loss has been recorded for this loan given the underlying collateral
value. The following is a summary of the allowance for losses on loans receivable for the periods presented (in
thousands):
Year Ended December 31,
2019
2018
2017
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in present value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 68,372
18,690
(18,690)
—
$68,372
—
—
—
$ 6,563
62,966
—
(1,157)
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 68,372
$68,372
$68,372
The following is a summary of our impaired loans (in thousands):
Year Ended December 31,
2019
2018
2017
Balance of impaired loans at end of year . . . . . . . . . . . . . . . . . . .
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$188,018
(68,372)
$189,272
(68,372)
$282,882
(68,372)
Balance of impaired loans not reserved . . . . . . . . . . . . . . . . . . . .
$119,646
$120,900
$214,510
Average impaired loans for the year . . . . . . . . . . . . . . . . . . . . . .
Interest recognized on impaired loans(1) . . . . . . . . . . . . . . . . . . . .
$192,728
16,235
$236,077
17,241
$330,216
27,793
(1) Represents cash interest recognized in the period since loans were identified as impaired.
8.
Investments in Unconsolidated Entities
We participate in a number of joint ventures, which generally invest in seniors housing and health care real
estate. The results of operations for these properties have been included in our consolidated results of operations
from the date of acquisition by the joint ventures and are reflected in our Consolidated Statements of
Comprehensive Income as income or loss from unconsolidated entities. The following is a summary of our
investments in unconsolidated entities (dollars in thousands):
Percentage
Ownership(1)
December 31,
2019
December 31,
2018
Seniors Housing Operating . . . . . . . . . . . . . . . . . . . . . . .
Triple-net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outpatient Medical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10% to 50%
10% to 34%
43% to 50%
$463,741
7,740
111,942
$344,982
34,284
103,648
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$583,423
$482,914
(1) Excludes ownership of in-substance real estate.
105
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We own 34% of Sunrise Senior Living Management, Inc. (“Sunrise”), who provides comprehensive
to certain of our Seniors Housing Operating
property management and accounting services with respect
properties that Sunrise operates. We pay Sunrise annual management fees pursuant to long-term management
agreements. Our management agreements have initial terms expiring through December 2034 plus, if applicable,
optional renewal periods ranging from an additional 5 to 15 years depending on the property. The management
fees payable to Sunrise under the management agreements include a fee based on a percentage of revenues
generated by the applicable properties plus, if applicable, positive or negative adjustments based on specified
performance targets. For the years ended December 31, 2019, 2018 and 2017, we recognized fees to Sunrise of
$41,200,000, $36,378,000 and $37,573,000, respectively, which are reflected within property operating expenses
in our Consolidated Statements of Comprehensive Income.
During the year ended December 31, 2019, we sold our interest in a Seniors Housing Operating joint
venture and recognized a gain of $38,681,000 in income (loss) from unconsolidated entities in our Consolidated
Statements of Comprehensive Income.
At December 31, 2019, the aggregate unamortized basis difference of our joint venture investments of
$101,275,000 is primarily attributable to the difference between the amount for which we purchased our interest
in the entity, including transaction costs, and the historical carrying value of the net assets of the entity. This
difference is being amortized over the remaining useful life of the related properties and included in the reported
amount of income from unconsolidated entities.
We have made loans totaling $165,193,000 related to seven properties as of December 31, 2019 for the
development and construction of certain properties which are classified as in substance real estate investments.
We believe that such borrowers typically represent variable interest entities (“VIE” or VIE’s”) in accordance
with ASC 810 Consolidation. VIE’s are required to be consolidated by their Primary Beneficiary (“PB”) which is
the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impacts the
entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE
that could be significant to the entity. We have concluded that we are not the PB of such borrowers, therefore, the
loan arrangements were assessed based on among other factors, the amount and timing of expected residual
profits, the estimated fair value of the collateral and the significance of the borrower’s equity in the project.
Based on these assessments the arrangements have been classified as in substance real estate investments. We
expect to fund an additional $139,472,000 related to these investments.
106
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Credit Concentration
We use consolidated net operating income (“NOI”) as our credit concentration metric. See Note 18 for
additional information and reconciliation. The following table summarizes certain information about our credit
concentration for the year ended December 31, 2019, excluding our share of NOI in unconsolidated entities
(dollars in thousands):
Number of
Properties
Total
NOI
Percent of
NOI(2)
Concentration by relationship:(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sunrise Senior Living(3)
ProMedica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revera(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Genesis HealthCare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Belmont Village . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remaining portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
165
218
94
54
21
1,026
1,578
$ 342,595
215,083
146,451
119,928
76,354
1,530,853
14%
9%
6%
5%
3%
63%
$2,431,264
100%
(1) Genesis HealthCare and ProMedica are in our Triple-net segment. Sunrise Senior Living, Revera and Belmont Village are in our Seniors
Housing Operating segment.
(2) NOI with our top five relationships comprised 38% of total NOI for the year ending December 31, 2018.
(3) Revera owns a controlling interest in Sunrise Senior Living. For the year ended December 31, 2019, we recognized $1,219,253,000 of
revenue from properties managed by Sunrise Senior Living.
10. Borrowings Under Credit Facilities and Commercial Paper Program
At December 31, 2019, we had a primary unsecured credit facility with a consortium of 31 banks that
includes a $3,000,000,000 unsecured revolving credit facility ($945,000,000 outstanding at December 31, 2019),
a $500,000,000 unsecured term credit facility and a $250,000,000 Canadian-denominated unsecured term credit
facility. We have an option, through an accordion feature, to upsize the unsecured revolving credit facility and
the $500,000,000 unsecured term credit facility by up to an additional $1,000,000,000, in the aggregate, and the
$250,000,000 Canadian-denominated unsecured term credit facility by up to an additional $250,000,000. The
primary unsecured credit facility also allows us to borrow up to $1,000,000,000 in alternate currencies (none
outstanding at December 31, 2019). Borrowings under the unsecured revolving credit facility are subject to
interest payable at the applicable margin over LIBOR interest rate (2.59% at December 31, 2019). The applicable
margin is based on our debt ratings and was 0.825% at December 31, 2019. In addition, we pay a facility fee
quarterly to each bank based on the bank’s commitment amount. The facility fee depends on our debt ratings and
was 0.15% at December 31, 2019. The term credit facilities mature on July 19, 2023. The revolving credit facility
is scheduled to mature on July 19, 2022 and can be extended for two successive terms of six months each at our
option.
In January 2019, we established an unsecured commercial paper program. Under the terms of the program,
we may issue unsecured commercial paper notes with maturities that vary, but do not exceed 397 days from the
date of issue, up to a maximum aggregate face or principal amount outstanding at any time of $1,000,000,000. As
of December 31, 2019, there was a balance of $642,597,000 outstanding on the commercial paper program
($643,600,000 in principal outstanding net of an unamortized discount of $1,003,000), which reduces the
borrowing capacity on the unsecured revolving credit facility. The notes bear interest at various floating rates
with a weighted average of 2.16% as of December 31, 2019 and a weighted average maturity of 26 days as of
December 31, 2019.
107
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following information relates to aggregate borrowings under the primary unsecured revolving credit
facility and commercial paper program for the periods presented (dollars in thousands):
Balance outstanding at year end . . . . . . . . . . . . . . . . . . . . .
Maximum amount outstanding at any month end . . . . . . . .
Average amount outstanding (total of daily principal
balances divided by days in period) . . . . . . . . . . . . . . . .
Weighted-average interest rate (actual interest expense
divided by average borrowings outstanding)
. . . . . . . . .
11. Senior Unsecured Notes and Secured Debt
Year Ended December 31,
2019
2018
2017
$1,588,600
$2,880,000
$1,147,000
$2,148,000
$ 719,000
$1,010,000
$1,376,813
$ 950,581
$ 597,422
2.84%
3.07%
2.02%
We may repurchase, redeem or refinance senior unsecured notes from time to time, taking advantage of
favorable market conditions when available. We may purchase senior notes for cash through open market
purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of
such securities pursuant to their terms. The senior unsecured notes are redeemable at our option, at any time in
whole or from time to time in part, at a redemption price equal to the sum of (1) the principal amount of the notes
(or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and
(2)
in connection with early
redemptions. Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our
liquidity requirements, contractual restrictions, and other factors. At December 31, 2019, the annual principal
payments due on these debt obligations were as follows (in thousands):
amount due under
any “make-whole”
the notes
terms of
the
Senior
Unsecured
Notes(1,2)
Secured
Debt(1,3)
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023(4,5)
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter(6,7,8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
— $ 354,329
439,176
—
421,876
10,000
467,378
1,792,871
304,533
1,350,000
1,006,050
7,274,691
$
Totals
354,329
439,176
431,876
2,260,249
1,654,533
8,280,741
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,427,562
$2,993,342
$13,420,904
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value
adjustments as reflected on the Consolidated Balance Sheet.
(2) Annual interest rates range from 2.40% to 6.50%.
(3) Annual interest rates range from 1.25% to 12.00%. Carrying value of the properties securing the debt totaled $6,550,033,000 at
December 31, 2019.
(4)
(5)
(6)
(7)
(8)
Includes a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $192,871,000 based on the Canadian/U.S.
Dollar exchange rate on December 31, 2019). The loan matures on July 19, 2023 and bears interest at the Canadian Dealer Offered Rate
plus 0.9% (2.93% at December 31, 2019).
Includes a $500,000,000 unsecured term credit facility. The loan matures on July 19, 2023 and bears interest at LIBOR plus 0.9% (2.66%
at December 31, 2019).
Includes a $300,000,000 Canadian-denominated 2.95% senior unsecured notes due 2027 (approximately $231,446,000 based on the
Canadian/U.S. Dollar exchange rate on December 31, 2019).
Includes a £550,000,000 4.80% senior unsecured notes due 2028 (approximately $729,795,000 based on the Pounds Sterling/U.S. Dollar
exchange rate in effect on December 31, 2019).
Includes a £500,000,000 4.50% senior unsecured notes due 2034 (approximately $663,450,000 based on the Pounds Sterling/U.S. Dollar
exchange rate in effect on December 31, 2019).
108
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of our senior unsecured note principal activity during the periods presented
(dollars in thousands):
December 31, 2019
December 31, 2018
December 31, 2017
Amount
Weighted Avg.
Interest Rate
Amount
Weighted Avg.
Interest Rate
Amount
Weighted Avg.
Interest Rate
Year Ended
Beginning balance . . . . .
Debt issued . . . . . . . . . .
Debt extinguished . . . . .
Foreign currency . . . . . .
$ 9,699,984
3,987,790
(3,335,290)
75,078
4.48%
3.34%
4.39%
4.22%
$ 8,417,447
2,850,000
(1,450,000)
(117,463)
4.31%
4.57%
3.46%
4.16%
$8,260,038
7,500
(5,000)
154,909
Ending balance . . . . . . .
$10,427,562
4.03%
$ 9,699,984
4.48%
$8,417,447
4.25%
1.97%
1.83%
4.29%
4.31%
The following is a summary of our secured debt principal activity for the periods presented (dollars in
thousands):
December 31, 2019
December 31, 2018
December 31, 2017
Amount
Weighted Avg.
Interest Rate
Amount
Weighted Avg.
Interest Rate
Amount
Weighted Avg.
Interest Rate
Year Ended
Beginning balance . . . . . .
Debt issued . . . . . . . . . . .
Debt assumed . . . . . . . . .
Debt extinguished . . . . . .
Debt deconsolidated . . . .
Principal payments . . . . .
Foreign currency . . . . . . .
$2,485,711
343,696
385,145
(230,108)
—
(54,325)
63,223
3.90%
3.11%
4.34%
4.35%
—%
3.75%
3.28%
$2,618,408
45,447
292,887
(306,553)
—
(56,288)
(108,190)
3.76%
3.40%
4.64%
5.36%
—%
3.91%
3.33%
$ 3,465,066
241,772
23,094
(1,080,268)
(60,000)
(64,078)
92,822
Ending balance . . . . . . . .
$2,993,342
3.63%
$2,485,711
3.90%
$ 2,618,408
4.09%
2.82%
6.67%
5.25%
3.80%
4.34%
3.16%
3.76%
Our debt agreements contain various covenants, restrictions and events of default. Certain agreements
require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to
incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2019, we were in
compliance with all of the covenants under our debt agreements.
12. Derivative Instruments
We are exposed to, among other risks, the impact of changes in foreign currency exchange rates as a result
of our non-U.S. investments and interest rate risk related to our capital structure. Our risk management program
is designed to manage the exposure and volatility arising from these risks, and utilizes foreign currency forward
contracts, cross currency swap contracts, interest rate swaps, interest rate locks and debt issued in foreign
currencies to offset a portion of these risks.
Foreign Currency Forward Contracts Designated as Cash Flow Hedges
For instruments that are designated as and qualify as a cash flow hedge, the effective portion of the gain or
loss on the derivative is deferred as a component of other comprehensive income (“OCI”), and reclassified into
earnings in the same period, or periods, during which the hedged transaction affects earnings. Gains and losses
on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of
effectiveness are recognized in earnings.
109
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash Flow Hedges of Interest Rate Risk
We enter into interest rate swaps in order to maintain a capital structure containing targeted amounts of
fixed and floating-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges
involve the receipt of variable amounts from a counterparty in exchange for our fixed-rate payments. These
interest rate swap agreements were used to hedge the variable cash flows associated with variable-rate debt.
Periodically, we enter into and designate interest rate locks to partially hedge the risk of changes in interest
rate payments attributable to increases in the benchmark interest rate during the period leading up to the probable
issuance of fixed-rate debt. We designate our interest rate locks as cash flow hedges. Gains and losses when we
settle our interest rate locks are amortized into income over the life of the related debt, except where a material
amount is deemed to be ineffective, which would be immediately reclassified to the Consolidated Statements of
Comprehensive Income.
Foreign Currency Forward Contracts and Cross Currency Swap Contracts Designated as Net Investment
Hedges
We use foreign currency forward and cross currency forward swap contracts to hedge a portion of the net
investment in foreign subsidiaries against fluctuations in foreign exchange rates. For instruments that are
designated and qualify as net investment hedges, the variability in the foreign currency to U.S. Dollar of the
instrument is recorded as a cumulative translation adjustment component of OCI.
During the years ended December 31, 2019, 2018, and 2017 we settled certain net investment hedges
generating cash proceeds of $6,716,000, $70,897,000, and $52,719,000, respectively. The balance of the
cumulative translation adjustment will be reclassified to earnings when the hedged investment is sold or
substantially liquidated.
Derivative Contracts Undesignated
We use foreign currency exchange contracts to manage existing exposures to foreign currency exchange
risk. Gains and losses resulting from changes in the fair value of these instruments are recorded in interest
expense on the Consolidated Statement of Comprehensive Income, and are substantially offset by net revaluation
impacts on foreign currency denominated balance sheet exposures. In addition, we have several interest rate cap
contracts related to variable rate secured debt agreements. Gains and losses resulting from the changes in the fair
values of these instruments are also recorded in interest expense.
110
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following presents the notional amount of derivatives and other financial instruments as of the dates
indicated (in thousands):
December 31,
2019
December 31,
2018
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Denominated in Pounds Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 725,000
£1,340,708
$ 575,000
£ 890,708
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Denominated in Pounds Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 250,000
£1,050,000
$ 250,000
£1,050,000
Interest rate swaps designated as cash flow hedges:
Denominated in U.S. Dollars(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,188,250
$
—
Derivative instruments not designated:
Interest rate caps denominated in U.S. Dollars . . . . . . . . . . . . . . . . . . . . .
Forward purchase contracts denominated in Canadian Dollars . . . . . . . . .
Forward sales contracts denominated in Canadian Dollars . . . . . . . . . . . .
Forward purchase contracts denominated in Pounds Sterling . . . . . . . . . .
Forward sales contracts denominated in Pounds Sterling . . . . . . . . . . . . .
$ 405,819
$ 405,819
— $ (325,000)
$
— $ 405,000
$
£ (125,000) £ (350,000)
£ 350,000
£ 125,000
(1) At December 31, 2019 the maximum maturity date was July 15, 2021.
The following presents the impact of derivative instruments on the Consolidated Statements of
Comprehensive Income for the periods presented (in thousands):
Location
December 31,
2019
December 31,
2018
December 31,
2017
Year Ended
Gain (loss) on derivative instruments designated
as hedges recognized in income . . . . . . . . . . . Interest expense $ 26,419
$ 12,271
$
(2,476)
Gain (loss) on derivative instruments not
designated as hedges recognized in
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest expense $
(2,310) $
5,233
$
(49)
Gain (loss) on derivative and financial
instruments designated as hedges recognized
in OCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OCI
$(131,120) $211,390
$(252,168)
13. Commitments and Contingencies
At December 31, 2019, we had 13 outstanding letter of credit obligations totaling $47,180,000 and expiring
between 2020 and 2024. At December 31, 2019, we had outstanding construction in process of $507,931,000 and
were committed to providing additional funds of approximately $446,633,000 to complete construction. Purchase
obligations at December 31, 2019,
to acquire
outpatient medical facilities in 2020. Purchase obligations also include $19,925,000 of contingent obligations to
fund capital improvements. Rents due from the tenant are increased to reflect the additional investment in the
property. During the year ended December 31, 2017, we finalized an agreement with the University of Toledo
Foundation to transfer our corporate headquarters as a gift and recognized an expense of $40,730,000.
include $261,000,000 representing a definitive agreement
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WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14. Stockholders’ Equity
The following is a summary of our stockholders’ equity capital accounts as of the dates indicated:
December 31, 2019
December 31, 2018
Preferred Stock, $1.00 par value:
Authorized shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issued shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,000,000
—
—
Common Stock, $1.00 par value:
Authorized shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issued shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
700,000,000
411,550,857
410,256,615
50,000,000
14,375,000
14,369,965
700,000,000
384,849,236
383,674,603
Preferred Stock
The following is a summary of our preferred stock activity during the periods presented:
December 31, 2019
December 31, 2018
December 31, 2017
Shares
Weighted Avg.
Dividend Rate
Shares
Weighted Avg.
Dividend Rate
Shares
Weighted Avg.
Dividend Rate
Year Ended
Beginning balance . . . . .
Shares redeemed . . . . . .
Shares converted . . . . . .
14,369,965
—
(14,369,965)
6.50%
—%
6.50%
14,370,060
—
(95)
Ending balance . . . . . . . .
—
—%
14,369,965
6.50%
—%
6.50%
6.50%
25,875,000
(11,500,000)
(4,940)
14,370,060
6.50%
6.50%
6.50%
6.50%
During the year ended December 31, 2019, we converted all of the outstanding Series I Preferred Stock.
Each share was converted into 0.8857 shares of common stock. In addition, during the year ended December 31,
2017, we recognized a charge of $9,769,000 in connection with the redemption of the Series J preferred stock.
112
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Common Stock
In February 2019, we entered into separate amended and restated equity distribution agreements whereby
we can offer and sell up to $1,500,000,000 aggregate amount of our common stock (“Equity Shelf Program”).
The Equity Shelf Program also allows us to enter into forward sale agreements. As of December 31, 2019, we
had $1,075,537,000 of remaining capacity under the Equity Shelf Program, which excludes forward sales
agreements outstanding for the sale of 4,935,804 shares with maturity dates in 2020 and 2021. We expect to
physically settle the forward sales for cash proceeds. The following is a summary of our common stock activity
during the periods indicated (dollars in thousands, except average price amounts):
Shares Issued Average Price Gross Proceeds Net Proceeds
2017 Dividend reinvestment plan issuances . . . . . . . . .
2017 Option exercises . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 Equity Shelf Program issuances . . . . . . . . . . . . . .
2017 Preferred stock conversions . . . . . . . . . . . . . . . . .
2017 Redemption of equity membership units . . . . . . .
2017 Stock incentive plans, net of forfeitures . . . . . . . .
5,640,008
252,979
2,986,574
4,300
91,180
154,337
$70.13
51.16
72.30
$ 395,526
12,942
215,917
—
—
—
$ 394,639
12,942
214,406
—
—
—
2017 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,129,378
$ 624,385
$ 621,987
2018 Dividend reinvestment plan issuances . . . . . . . . .
2018 Option exercises . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 Equity Shelf Program issuances . . . . . . . . . . . . . .
2018 Preferred stock conversions . . . . . . . . . . . . . . . . .
2018 Stock incentive plans, net of forfeitures . . . . . . . .
6,529,417
56,960
5,241,349
83
115,243
$65.55
42.66
69.95
$ 428,009
2,430
366,640
—
—
$ 423,075
2,430
364,070
—
—
2018 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,943,052
$ 797,079
$ 789,575
2019 Dividend reinvestment plan issuances . . . . . . . . .
2019 Option exercises . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 Equity Shelf Program issuances . . . . . . . . . . . . . .
2019 Preferred stock conversions . . . . . . . . . . . . . . . . .
2019 Stock incentive plans, net of forfeitures . . . . . . . .
5,798,979
10,736
7,855,956
12,712,452
203,889
$77.18
51.32
78.15
$ 447,559
551
613,948
—
—
$ 443,929
551
611,645
—
—
2019 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,582,012
$1,062,058
$1,056,125
Dividends
The increase in dividends is primarily attributable to increases in our common shares outstanding, offset by
the conversion and redemption of the Series I and Series J preferred stock, as described above. Please refer to
Note 19 for information related to federal income tax of dividends. The following is a summary of our dividend
payments (in thousands, except per share amounts):
Year Ended
December 31, 2019
December 31, 2018
December 31, 2017
Per
Share
Amount
Per
Share
Amount
Per
Share
Amount
Common Stock . . . . . . . . . . . . . . . . . . . .
Series I Preferred Stock . . . . . . . . . . . . .
Series J Preferred Stock . . . . . . . . . . . . .
$3.4800
—
—
$1,404,977
$3.4800
— 3.2500
—
—
$1,300,141
46,704
$3.4800
3.2500
— 0.2347
$1,277,321
46,711
2,699
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,404,977
$1,346,845
$1,326,731
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WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accumulated Other Comprehensive Income
The following is a summary of accumulated other comprehensive income/(loss) for the periods presented (in
thousands):
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative and financial instruments designated as hedges . . . . . . . . . . . .
Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(719,814)
607,657
—
$(868,006)
738,777
(540)
Total accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . .
$(112,157)
$(129,769)
December 31,
2019
December 31,
2018
15. Stock Incentive Plans
In May 2016, our shareholders approved the 2016 Long-Term Incentive Plan (“2016 Plan”), which
authorized up to 10,000,000 shares of common stock to be issued at the discretion of the Compensation
Committee of the Board of Directors. Awards granted after May 5, 2016 are issued out of the 2016 Plan. The
awards granted under the Amended and Restated 2005 Long-Term Incentive Plan continue to vest and options
expire ten years from the date of grant. Our non-employee directors, officers and key employees are eligible to
participate in the 2016 Plan. The 2016 Plan allows for the issuance of, among other things, stock options, stock
appreciation rights, restricted stock, deferred stock units and dividend equivalent rights. Vesting periods for
options, deferred stock units and restricted shares generally range from three to five years.
Under our long-term incentive plan, certain restricted stock awards are market, performance and time-based.
For market and performance based awards, we will grant a target number of restricted stock units, with the
ultimate award determined by the total shareholder return and operating performance metrics, measured in each
case over a measurement period of two to three years. Generally awards vest over two to three years after the end
of the performance period with a portion vesting immediately at the end of the performance periods. The
expected term represents the period from the grant date to the end of the performance period. Compensation
expense for these performance grants is measured based on the probability of achievement of certain
performance goals and is recognized over both the performance period and vesting period. For the portion of the
grant for which the award is determined by the operating performance metrics, the compensation cost is based on
the grant date closing price and management’s estimate of corporate achievement of the financial metrics. If the
estimated number of performance based restricted stock to be earned changes, an adjustment will be recorded to
recognize the accumulated difference between the revised and previous estimates. For the portion of the grant
determined by the total shareholder return, management used a Monte Carlo model to assess the fair value and
compensation cost. Forfeitures are accounted for as they occur.
The following table summarizes compensation expense (a component of general and administrative
expenses and property operating expenses) recognized for the periods presented (in thousands):
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ — $ — $
25,047
27,646
10
19,092
$25,047
$27,646
$19,102
Year Ended December 31,
2019
2018
2017
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WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Restricted Stock
The fair value of the restricted stock is equal to the market price of the company’s common stock on the
date of grant and is amortized over the vesting periods. As of December 31, 2019, there was $30,755,000 of total
unrecognized compensation expense related to unvested restricted stock that is expected to be recognized over a
weighted-average period of two years. The following table summarizes information about non-vested restricted
stock incentive awards as of and for the year ended December 31, 2019:
Restricted Stock
Number of
Shares (000’s)
Weighted-Average
Grant Date
Fair Value
Non-vested at December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terminated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-vested at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,220
(364)
367
(117)
1,106
$62.56
52.15
85.80
66.25
$70.26
16. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except
per share data):
Year Ended December 31,
2019
2018
2017
Numerator for basic and diluted earnings per share — net
income attributable to common stockholders . . . . . . . . . . . .
$1,232,432
$758,250
$463,595
Denominator for basic earnings per share — weighted average
shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
401,845
373,620
367,237
Effect of dilutive securities:
Employee stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-vested restricted shares . . . . . . . . . . . . . . . . . . . . . . . . .
Redeemable shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee stock purchase program . . . . . . . . . . . . . . . . . . . .
Dilutive potential common shares . . . . . . . . . . . . . . . . . . . . . . .
Denominator for diluted earnings per share — adjusted
—
835
1,112
16
1,963
9
512
1,096
13
1,630
47
482
1,235
—
1,764
weighted average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
403,808
375,250
369,001
Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
3.07
3.05
$
$
2.03
2.02
$
$
1.26
1.26
As of December 31, 2018 and December 31, 2017, the Series I Cumulative Convertible Perpetual Preferred
Stock were excluded from the calculations as the effect of the conversions were anti-dilutive. As of
December 31, 2019, forward sales agreements outstanding for the sale of 4,935,804 shares of common stock
were not included in the computation of diluted earnings per share because such forward sales were anti-dilutive
for the period.
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WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. Disclosure about Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date. A three-level valuation hierarchy exists for disclosures of
fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the
measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the
lowest level of input that is significant to the fair value measurement. The three levels are defined below:
• Level 1 — Quoted prices in active markets for identical assets or liabilities.
• Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or
liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities.
• Level 3 — Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities.
The following methods and assumptions were used to estimate the fair value of each class of financial
instruments for which it is practicable to estimate that value:
Mortgage Loans, Other Real Estate Loans and Non Real Estate Loans Receivable — The fair value of
mortgage loans, other real estate loans and non real estate loans receivable is generally estimated by using
Level 2 and Level 3 inputs such as discounting the estimated future cash flows using the current rates at which
similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
Cash and Cash Equivalents and Restricted Cash — The carrying amount approximates fair value.
Equity Securities — Equity securities are recorded at their fair value based on Level 1 publicly available
trading prices.
Borrowings Under Primary Unsecured Credit Facility and Commercial Paper Program — The carrying
amount of the primary unsecured credit facility and commercial paper program approximates fair value because
the borrowings are interest rate adjustable.
Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on
Level 1 publicly available trading prices. The carrying amount of the variable rate senior unsecured notes
approximates fair value because they are interest rate adjustable.
Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 inputs by discounting
the estimated future cash flows using the current rates at which similar loans would be made with similar credit
ratings and for the same remaining maturities. The carrying amount of variable rate secured debt approximates
fair value because the borrowings are interest rate adjustable.
Foreign Currency Forward Contracts, Interest Rate Swaps and Cross Currency Swaps — Foreign currency
forward contracts, interest rate swaps and cross currency swaps are recorded in other assets or other liabilities on
the balance sheet at fair value that is derived from observable market data, including yield curves and foreign
exchange rates (all of our derivative instruments are Level 2).
Redeemable OP Unitholder Interests — Our redeemable OP unitholder interests are recorded on the balance
sheet at fair value using Level 2 inputs. The fair value is measured using the closing price of our common stock,
as units may be redeemed at the election of the holder for cash or, at our option, one share of our common stock
per unit, subject to adjustment in certain circumstances.
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WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The carrying amounts and estimated fair values of our financial instruments are as follows as of the dates
presented (in thousands):
Financial assets:
Mortgage loans receivable . . . . . . . . . . . . . . . .
Other real estate loans receivable . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . .
Non real estate loans receivable . . . . . . . . . . . .
Foreign currency forward contracts, interest
rate swaps and cross currency swaps . . . . . .
Financial liabilities:
Borrowings under unsecured credit facility and
commercial paper . . . . . . . . . . . . . . . . . . . . .
Senior unsecured notes . . . . . . . . . . . . . . . . . . .
Secured debt
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency forward contracts, interest
rate swaps and cross currency swaps . . . . . .
Redeemable OP unitholder interests . . . . . . . . .
December 31, 2019
December 31, 2018
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
$
145,686
124,696
15,685
284,917
100,849
336,854
$
150,217
128,512
15,685
284,917
100,849
379,239
$ 249,071
81,268
11,286
215,376
100,753
282,443
$
257,337
82,742
11,286
215,376
100,753
384,150
18,554
18,554
94,729
94,729
$ 1,587,597
10,336,513
2,990,962
$ 1,587,597
11,400,571
3,041,893
$1,147,000
9,603,299
2,476,177
$ 1,147,000
10,043,797
2,499,130
53,601
121,440
53,601
121,440
71,109
$ 103,071
$
$
71,109
103,071
$
Items Measured at Fair Value on a Recurring Basis
The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair
value on a recurring basis. The market approach uses prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities. The following summarizes items measured at
fair value on a recurring basis (in thousands):
Fair Value Measurements as of December 31, 2019
Total
Level 1
Level 2
Level 3
$ 15,685
$15,685
$
—
$—
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency forward contracts, interest rate
swaps and cross currency swaps, net asset
(liability)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redeemable OP unitholder interests . . . . . . . . . . .
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$102,078
$15,685
$ 86,393
(35,047)
121,440
—
—
(35,047)
121,440
—
—
$—
(1) Please see Note 12 for additional information.
Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, we have assets and liabilities that
are measured at fair value on a nonrecurring basis that are not included in the tables above. Assets, liabilities and
noncontrolling interests that are measured at fair value on a nonrecurring basis include those acquired or
assumed. Asset impairments (if applicable, see Note 5 for impairments of real property and Note 7 for
117
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
impairments of real estate loans receivable) are also measured at fair value on a nonrecurring basis. We have
determined that the fair value measurements included in each of these assets and liabilities rely primarily on
company-specific inputs and our assumptions about the use of the assets and settlement of liabilities, as
observable inputs are not available. As such, we have determined that each of these fair value measurements
generally resides within Level 3 of the fair value hierarchy. We estimate the fair value of real estate and related
intangibles using the income approach using unobservable data such as net operating income, estimated
capitalization and discount rates. We also consider local and national industry market data including comparable
sales, and commonly engage an external real estate appraiser to assist us in our estimation of fair value. We
estimate the fair value of assets held for sale based on current sales price expectations or, in the absence of such
price expectations, Level 3 inputs described above. We estimate the fair value of loans receivable using projected
payoff valuations based on the expected future cash flows and/or the estimated fair value of collateral, net of
sales costs, if the repayment of the loan is expected to be provided solely by the collateral. We estimate the fair
value of secured debt assumed in asset acquisitions using current interest rates at which similar borrowings could
be obtained on the transaction date.
18. Segment Reporting
We invest in seniors housing and health care real estate. We evaluate our business and make resource
allocations on our three operating segments: Seniors Housing Operating, Triple-net and Outpatient Medical. Our
Seniors Housing Operating properties include seniors apartments, assisted living, independent living/continuing
care retirement communities, independent support living (Canada), care homes with and without nursing (U.K.)
and combinations thereof that are owned and/or operated through RIDEA structures (see Note 19). Our
Triple-net properties include the property types described above as well as long-term/post-acute care
facilities. Under the Triple-net segment, we invest in seniors housing and health care real estate through
acquisition and financing of primarily single tenant properties. Properties acquired are primarily leased under
triple-net leases and we are not involved in the management of the property. Our Outpatient Medical properties
include outpatient medical buildings which are typically leased to multiple tenants and generally require a certain
level of property management by us.
We evaluate performance based upon NOI of each segment. We define NOI as total revenues, including
tenant reimbursements, less property operating expenses. We believe NOI provides investors relevant and useful
information because it measures the operating performance of our properties at the property level on an
unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level
performance of our properties.
Non-segment revenue consists mainly of interest income on certain non-real estate investments and other
income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate
offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual
segments in determining NOI.
The accounting policies of the segments are the same as those described in the summary of significant
accounting policies (see Note 2). The results of operations for all acquisitions described in Note 3 are included in
our consolidated results of operations from the acquisition dates and are components of the appropriate
segments. There are no intersegment sales or transfers.
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WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Summary information for the reportable segments (which excludes unconsolidated entities) during the years
ended December 31, 2019, 2018 and 2017 is as follows (in thousands):
Seniors
Housing
Operating
$ 3,448,175
—
36
8,658
3,456,869
2,417,349
1,039,520
553,189
67,983
—
Triple-net
Outpatient
Medical
Non-segment /
Corporate
Total
$
— $
— $
903,798
62,599
6,246
972,643
53,900
918,743
232,626
12,892
—
684,602
1,195
2,031
687,828
218,793
469,035
241,258
13,411
—
— $ 3,448,175
1,588,400
—
63,830
—
20,901
3,966
3,966
—
3,966
—
461,273
126,549
5,121,306
2,690,042
2,431,264
1,027,073
555,559
126,549
—
(4,399)
—
—
(4,399)
1,614
—
2,145
26,348
—
18,690
11,926
13,771
—
—
14,062
1,788
82,541
—
—
10,705
84,155
18,690
28,133
52,612
388,241
6,246
633,237
(4,209)
198,516
(2,710)
(677,102)
(2,284)
542,892
(2,957)
Year Ended December 31, 2019:
Resident fees and services . . . . . . . . . . . .
Rental income . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . .
Total revenues . . . . . . . . . . . . . . . . . . .
Property operating expenses . . . . . . . . . . .
Consolidated net operating income . . . . .
Depreciation and amortization . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . .
Loss (gain) on derivatives and financial
instruments, net . . . . . . . . . . . . . . . . . . .
Loss (gain) on extinguishment of debt,
net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for loan losses . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . .
Income (loss) from continuing operations
before income taxes and other items . .
Income tax (expense) benefit . . . . . . . . . .
(Loss) income from unconsolidated
entities . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) on real estate dispositions,
12,388
22,985
7,061
—
—
42,434
748,041
net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
528,747
218,322
972
Income (loss) from continuing
operations . . . . . . . . . . . . . . . . . . . . . . .
935,622
870,335
203,839
(679,386)
1,330,410
Net income (loss) . . . . . . . . . . . . . . . . . . .
$
935,622
$ 870,335
$ 203,839
$(679,386) $ 1,330,410
Total assets . . . . . . . . . . . . . . . . . . . . . . . .
$15,784,898
$9,434,817
$7,991,521
$ 169,515
$33,380,751
119
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Seniors
Housing
Operating
Triple-net
Outpatient
Medical
Non-segment /
Corporate
Total
Year Ended December 31, 2018:
Resident fees and services . . . . . . . . . . .
Rental income . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . .
$ 3,234,852
—
578
5,024
Total revenues . . . . . . . . . . . . . . . . . .
Property operating expenses . . . . . . . . . .
3,240,454
2,255,432
Consolidated net operating income . . . .
Depreciation and amortization . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . .
Loss (gain) on derivatives and financial
instruments, net . . . . . . . . . . . . . . . . . .
Loss (gain) on extinguishment of debt,
net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . .
Income (loss) from continuing
operations before income taxes and
other items . . . . . . . . . . . . . . . . . . . . .
Income tax (expense) benefit . . . . . . . . .
(Loss) income from unconsolidated
entities . . . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) on real estate dispositions,
$
— $
— $
828,865
54,926
17,173
900,964
915
900,049
235,480
14,225
—
551,557
310
4,939
556,806
176,670
380,136
185,530
7,051
—
— $ 3,234,852
1,380,422
—
55,814
—
29,411
2,275
2,275
—
2,275
—
436,256
126,383
4,700,499
2,433,017
2,267,482
950,459
526,592
126,383
985,022
529,449
69,060
—
—
(4,016)
—
—
(4,016)
110
7,599
6,624
(32)
107,980
90,975(1)
11,928
—
7,570
4,091
—
7,729
16,097
115,579
112,898
372,180
1,202
455,437
1,611
168,057
(125)
(572,184)
(11,362)
423,490
(8,674)
(28,142)
21,938
5,563
—
—
(641)
415,575
net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,245)
196,589
221,231
Income (loss) from continuing
operations . . . . . . . . . . . . . . . . . . . . . .
342,995
675,575
394,726
(583,546)
829,750
Net income (loss) . . . . . . . . . . . . . . . . . .
$
342,995
$
675,575
$ 394,726
$(583,546) $
829,750
Total assets . . . . . . . . . . . . . . . . . . . . . . .
$14,607,127
$10,111,227
$5,426,810
$ 196,908
$30,342,072
(1) Represents non-capitalizable transaction costs of $81,116,000 primarily related to a joint venture transaction with an existing seniors
housing operator including the conversion of properties from Triple-net to Seniors Housing Operating and termination/restructuring of
preexisting relationships.
120
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Seniors
Housing
Operating
Triple-net
Outpatient
Medical
Non-segment /
Corporate
Total
Year Ended December 31, 2017:
Resident fees and services . . . . . . . . . . . . . . . . .
Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,779,423
$
— $
— $
— 885,811
73,742
69
7,531
5,127
560,060
—
3,340
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . .
Property operating expenses . . . . . . . . . . . . . . . .
2,784,619
1,904,593
967,084
563,400
— 179,332
— $2,779,423
— 1,445,871
73,811
—
17,536
1,538
1,538
4,316,641
— 2,083,925
Consolidated net operating income . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . .
Loss (gain) on derivatives and financial
instruments, net . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on extinguishment of debt, net
. . . .
Provision for loan losses . . . . . . . . . . . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from continuing operations
before income taxes and other items . . . . . . .
Income tax (expense) benefit . . . . . . . . . . . . . . .
(Loss) income from unconsolidated entities . . .
Gain (loss) on real estate dispositions, net . . . . .
880,026
484,796
63,265
—
967,084
243,830
15,194
—
384,068
193,094
10,015
—
1,538
—
396,148
122,008
2,232,716
921,720
484,622
122,008
—
3,785
—
21,949
8,347
2,284
29,083
62,966
96,909
116,689(1)
—
4,373
—
5,625
1,911
—
—
—
—
50,829(2)
297,884
(16,430)
(105,236)
56,295
400,129
(4,291)
19,428
286,325
169,050
(1,477)
2,683
1,630
(567,447)
2,070
—
—
2,284
37,241
62,966
124,483
177,776
299,616
(20,128)
(83,125)
344,250
Income (loss) from continuing operations . . . . .
232,513
701,591
171,886
(565,377)
540,613
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . .
$ 232,513
$701,591
$171,886
$(565,377) $ 540,613
(1) Primarily represents non-capitalizable transaction costs, including $88,316,000 due to a joint venture transaction with an existing seniors
housing operator which converted a portfolio of properties from Triple-net to Seniors Housing Operating and termination/restructuring of
preexisting relationships. Also includes $18,294,000 other-than-temporary impairment charge on the Genesis available-for-sale equity
investment.
(2) Primarily related to $40,730,000 expense recognized for the donation of the corporate headquarters.
121
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Our portfolio of properties and other investments are located in the U.S., the U.K. and Canada. Revenues
and assets are attributed to the country in which the property is physically located. The following is a summary of
geographic information for the periods presented (dollars in thousands):
Year Ended
December 31, 2019
December 31, 2018
December 31, 2017
Amount(1)
%
Amount
%
Amount
%
Revenues:
United States . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,205,492
452,698
463,116
82.1% $3,777,960
8.8% 452,956
9.1% 469,583
80.4% $3,464,527
9.6% 407,351
10.0% 444,763
80.3%
9.4%
10.3%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,121,306
100.0% $4,700,499
100.0% $4,316,641
100.0%
As of
December 31, 2019
December 31, 2018
Amount
%
Amount
%
Assets:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$27,513,911
3,405,388
2,461,452
82.4% $24,884,292
10.2% 3,078,994
7.4% 2,378,786
82.0%
10.1%
7.9%
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$33,380,751
100.0% $30,342,072
100.0%
(1) The United States, United Kingdom and Canada represent 77%, 10% and 13%, respectively, of our resident fees and services revenue
stream for the year ended December 31, 2019.
19. Income Taxes and Distributions
We elected to be taxed as a REIT commencing with our first taxable year. To qualify as a REIT for federal
income tax purposes, at least 90% of taxable income (excluding net capital gains) must be distributed to
stockholders. REITs that do not distribute a certain amount of current year taxable income are also subject to a
4% federal excise tax. The main differences between net
income tax purposes and
consolidated financial statement purposes are the recognition of straight-line rent for reporting purposes, basis
differences in acquisitions, recording of impairments, differing useful lives and depreciation and amortization
methods for real property and the provision for loan losses for reporting purposes versus bad debt expense for tax
purposes.
income for federal
Cash distributions paid to common stockholders, for federal income tax purposes, are as follows for the
periods presented:
Per share:
Year Ended December 31,
2019
2018
2017
Ordinary dividend(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term capital gain/(loss)(2)
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2.6937
0.7863
—
$2.1988
1.1153
0.1659
$1.8117
1.5755
0.0928
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3.4800
$3.4800
$3.4800
122
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) For the years ended December 31, 2019 and 2018, includes Section 199A dividends of $2.6937 and $2.1988, respectively. For the
year ended December 31, 2017, includes Qualified Dividend of $0.0038.
(2) For the years ended December 31, 2019, 2018 and 2017, includes Unrecaptured SEC. 1250 Gains of $0.2835, $0.3822 and
$0.3557, respectively.
Our consolidated provision for income tax expense (benefit) is as follows for the periods presented (in
thousands):
Year Ended December 31,
2019
2018
2017
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$12,594
(9,637)
$15,850
(7,176)
$ 7,633
12,495
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 2,957
$ 8,674
$20,128
REITs generally are not subject to U.S. federal income taxes on that portion of REIT taxable income or
capital gain that is distributed to stockholders. For the tax year ended December 31, 2019, as a result of
ownership of investments in Canada and the U.K., we were subject to foreign income taxes under the respective
tax laws of these jurisdictions.
The provision for income taxes for the year ended December 31, 2019 primarily relates to state taxes,
foreign taxes, and taxes based on income generated by entities that are structured as TRSs. For the tax years
ended December 31, 2019, 2018 and 2017,
included in the
consolidated provision for income taxes was $(3,892,000), $9,804,000 and $4,806,000, respectively.
the foreign tax provision/(benefit) amount
A reconciliation of income taxes, which is computed by applying the federal corporate tax rate for the years
ended December 31, 2019, 2018 and 2017, to the income tax expense/(benefit) is as follows for the periods
presented (in thousands):
Year Ended December 31,
2019
2018
2017
Tax at statutory rate on earnings from continuing operations
before unconsolidated entities, noncontrolling interests and
income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in valuation allowance(1) . . . . . . . . . . . . . .
Tax at statutory rate on earnings not subject to federal income
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign permanent depreciation . . . . . . . . . . . . . . . . . . . . . . . .
Other differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 280,005
3,465
$ 176,069
28,309
$ 199,588
30,445
(311,224)
9,260
21,451
(206,937)
8,110
3,123
(234,468)
10,065
14,498
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2,957
$
8,674
$ 20,128
(1) Excluding purchase price accounting.
123
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Each TRS and foreign entity subject to income taxes is a tax paying component for purposes of classifying
deferred tax assets and liabilities. The tax effects of taxable and deductible temporary differences, as well as tax
asset/(liability) attributes, are summarized as follows for the periods presented (in thousands):
Year Ended December 31,
2019
2018
2017
Investments and property, primarily differences in investment
basis, depreciation and amortization, the basis of land
assets and the treatment of interests and certain costs . . . . .
Operating loss and interest deduction carryforwards . . . . . . . .
Expense accruals and other
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (13,064)
127,525
43,056
(159,057)
$
(2,533)
98,713
48,804
(155,592)
$ (11,812)
94,654
25,146
(127,283)
Net deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . . .
$
(1,540)
$ (10,608)
$ (19,295)
On the basis of the evaluations performed as required by the codification, valuation allowances totaling
$159,057,000 were recorded on U.S. taxable REIT subsidiaries as well as entities in other jurisdictions to limit
the deferred tax assets to the amount that we believe is more likely that not realizable. However, the amount of
the deferred tax asset considered realizable could be adjusted if (i) estimates of future taxable income during the
carryforward period are reduced or increased or (ii) objective negative evidence in the form of cumulative losses
is no longer present (and additional weight may be given to subjective evidence such as our projections for
growth). The valuation allowance rollforward is summarized as follows for the periods presented (in thousands):
Year Ended December 31,
2019
2018
2017
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$155,592
3,465
$127,283
28,309
$ 96,838
30,445
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$159,057
$155,592
$127,283
As a result of certain acquisitions, we are subject to corporate level taxes for any related asset dispositions
that may occur during the five-year period immediately after such assets were owned by a C corporation
(“built-in gains tax”). The amount of income potentially subject to this special corporate level tax is generally
equal to the lesser of (i) the excess of the fair value of the asset over its adjusted tax basis as of the date it became
a REIT asset, or (ii) the actual amount of gain. Some but not all gains recognized during this period of time could
be offset by available net operating losses and capital loss carryforwards. During the year ended December 31,
2017, we acquired certain additional assets with built-in gains as of the date of acquisition that could be subject
to the built-in gains tax if disposed of prior to the expiration of the applicable five-year period. We have not
recorded a deferred tax liability as a result of the potential built-in gains tax based on our intentions with respect
to such properties and available tax planning strategies.
Given the applicable statute of limitations, we generally are subject to audit by the Internal Revenue Service
(“IRS”) for the year ended December 31, 2016 and subsequent years. The statute of limitations may vary in the
states in which we own properties or conduct business. We do not expect to be subject to audit by state taxing
authorities for any year prior to the year ended December 31, 2015. We are also subject to audit by the Canada
Revenue Agency and provincial authorities generally for periods subsequent to May 2013 related to entities
acquired or formed in connection with acquisitions, and by the U.K.’s HM Revenue & Customs for periods
subsequent to August 2013 related to entities acquired or formed in connection with acquisitions.
At December 31, 2019, we had a net operating loss (“NOL”) carryforward related to the REIT of
$337,287,000. Due to our uncertainty regarding the realization of certain deferred tax assets, we have not
124
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
recorded a deferred tax asset related to NOLs generated by the REIT. These amounts can be used to offset future
taxable income (and/or taxable income for prior years if an audit determines that tax is owed), if any. The REIT
will be entitled to utilize NOLs and tax credit carryforwards only to the extent that REIT taxable income exceeds
our deduction for dividends paid. The NOL carryforwards generated through December 31, 2017 will expire
through 2037. Beginning with tax years after December 31, 2017, the Tax Cuts and Jobs Act eliminates the
carryback period, limits the NOLs to 80% of taxable income and replaces the 20-year carryforward period with
an indefinite carryforward period.
At December 31, 2019 and 2018, we had an NOL carryforward related to Canadian entities of
$195,791,000, and $154,029,000, respectively. These Canadian losses have a 20-year carryforward period. At
December 31, 2019 and 2018, we had an NOL carryforward related to U.K. entities of $209,776,000 and
$242,377,000, respectively. These U.K. losses do not have a finite carryforward period.
20. Quarterly Results of Operations (Unaudited)
The following is a summary of our unaudited quarterly results of operations for the years ended
December 31, 2019 and 2018 (in thousands, except per share data). The sum of individual quarterly amounts may
not agree to the annual amounts included in the Consolidated Statements of Comprehensive Income due to
rounding.
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to common
Year Ended December 31, 2019
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
$1,272,245
$1,320,106
$1,266,133
$1,262,822
stockholders . . . . . . . . . . . . . . . . . . . . . . .
280,470
137,762
589,876
224,324
Net income (loss) attributable to common
stockholders per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to common
$
$
0.72
0.71
$
$
0.34
0.34
$
$
1.46
1.45
$
$
0.55
0.55
Year Ended December 31, 2018
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
$1,096,965
$1,125,912
$1,236,379
$1,241,243
stockholders . . . . . . . . . . . . . . . . . . . . . . .
437,671
154,432
64,384
101,763
Net income attributable to common
stockholders per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
1.18
1.17
$
$
0.42
0.41
$
$
0.17
0.17
$
$
0.27
0.27
125
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
21. Variable Interest Entities
We have entered into joint ventures to own certain seniors housing and outpatient medical assets which are
deemed to be variable interest entities (“VIEs”). We have concluded that we are the primary beneficiary of these
VIEs based on a combination of operational control of the joint venture and the rights to receive residual returns
or the obligation to absorb losses arising from the joint ventures. Except for capital contributions associated with
the initial joint venture formations, the joint ventures have been and are expected to be funded from the ongoing
operations of the underlying properties. Accordingly, such joint ventures have been consolidated, and the table
below summarizes the balance sheets of consolidated VIEs in the aggregate (in thousands):
December 31,
2019
December 31,
2018
Assets:
Net real estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 960,093
27,522
14,586
$ 973,813
18,678
14,600
Total assets(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,002,201
$1,007,091
Liabilities and equity:
Secured debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 460,117
1,326
22,215
518,543
$ 465,433
—
18,229
523,429
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,002,201
$1,007,091
(1) Note that assets of the consolidated VIEs can only be used to settle obligations relating to such VIEs. Liabilities of the consolidated VIEs
represent claims against the specific assets of the VIEs.
126
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls
and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of the end
of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered
by this report.
Management’s Report on Internal Control over Financial Reporting
Management
is responsible for establishing and maintaining adequate internal control over financial
reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended). The Company’s
internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect
the transactions and dispositions of the assets of the Company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the
Company are being made only in accordance with authorizations of management and directors of the Company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the Company’s assets that could have a material effect on the financial statements. Because of
its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Management has assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2019 based on the criteria established by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) in a report entitled Internal Control — Integrated Framework.
Based on this assessment, using the criteria above, management concluded that the Company’s system of
internal control over financial reporting was effective as of December 31, 2019.
The independent registered public accounting firm of Ernst & Young LLP, as auditors of the Company’s
consolidated financial statements, has issued an attestation report on the Company’s internal control over
financial reporting.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities
Exchange Act of 1934, as amended) occurred during the fourth quarter of the one-year period covered by this
report that materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
127
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Welltower Inc.
Opinion on Internal Control over Financial Reporting
We have audited Welltower
reporting as of
December 31, 2019, based on criteria established in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In
our opinion, Welltower Inc. and subsidiaries (the Company) maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2019, based on the COSO criteria.
internal control over financial
Inc. and subsidiaries’
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of Welltower Inc. and subsidiaries as of December 31,
2019 and 2018, the related consolidated statements of comprehensive income, equity and cash flows for each of
the three years in the period ended December 31, 2019, and the related notes and financial statement schedules
listed in the index at Item 15(a) and our report dated February 14, 2020 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management
is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting based on our audit. We are a
public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Toledo, Ohio
February 14, 2020
/s/ Ernst & Young LLP
128
Item 9B. Other Information
None.
Item 10. Directors, Executive Officers and Corporate Governance
PART III
The information required by this Item is incorporated herein by reference to the information under the
headings “Election of Directors,” “Corporate Governance,” “Executive Officers,” and “Security Ownership of
Directors and Management and Certain Beneficial Owners — Section 16(a) Beneficial Ownership Reporting
Compliance” in our definitive proxy statement, which will be filed with the Securities and Exchange
Commission (the “Commission”) prior to May 1, 2020.
We have adopted a Code of Business Conduct and Ethics that applies to our directors, officers and
employees. The code is posted on the Internet at www.welltower.com/investors/governance. Any amendment to,
or waivers from, the code that relate to any officer or director of the company will be promptly disclosed on the
Internet at www.welltower.com.
In addition,
the Board has adopted charters for the Audit, Compensation and Nominating/Corporate
Governance Committees. These charters are posted on the Internet at www.welltower.com/investors/
governance. Please refer to “Item 7 — Management’s Discussion and Analysis of Financial Condition and
Results of Operations — Executive Summary — Corporate Governance” in the Annual Report on Form 10-K for
further discussion of corporate governance.
The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and
our web address is included as an inactive textual reference only.
Item 11. Executive Compensation
The information required by this Item is incorporated herein by reference to the information under the
headings “Executive Compensation” and “Director Compensation” in our definitive proxy statement, which will
be filed with the Commission prior to May 1, 2020.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information required by this Item is incorporated herein by reference to the information under the
headings “Security Ownership of Directors and Management and Certain Beneficial Owners” and “Equity
Compensation Plan Information” in our definitive proxy statement, which will be filed with the Commission
prior to May 1, 2020.
Item 13. Certain Relationships and Related Transactions and Director Independence
The information required by this Item is incorporated herein by reference to the information under the
headings “Corporate Governance — Independence and Meetings” and “Security Ownership of Directors and
Management and Certain Beneficial Owners — Certain Relationships and Related Transactions” in our definitive
proxy statement, which will be filed with the Commission prior to May 1, 2020.
Item 14. Principal Accounting Fees and Services
The information required by this Item is incorporated herein by reference to the information under the
heading “Ratification of the Appointment of the Independent Registered Public Accounting Firm” in our
definitive proxy statement, which will be filed with the Commission prior to May 1, 2020.
129
Item 15. Exhibits and Financial Statement Schedules
1. (i) Our Consolidated Financial Statements are included in Part II, Item 8:
PART IV
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets – December 31, 2019 and 2018 . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income — Years ended December 31,
2019, 2018 and 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Equity — Years ended December 31, 2019, 2018
and 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows — Years ended December 31, 2019, 2018
and 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80
83
84
86
87
88
(ii) The following Financial Statement Schedules are included beginning on page 138
III — Real Estate and Accumulated Depreciation
IV — Mortgage Loans on Real Estate
The financial statement schedule required by Item 15(a) (Schedule II, Valuation and Qualifying Accounts)
is included in Item 8 of this Annual Report on Form 10-K.
2. Exhibits:
The exhibits listed below are either filed with this Form 10-K or incorporated by reference in accordance
with Rule 12b-32 of the Securities Exchange Act of 1934.
2.1
3.1(a)
3.1(b)
3.1(c)
3.1(d)
3.1(e)
3.1(f)
3.1(g)
Agreement and Plan of Merger, dated as of April 25, 2018, by and among the Company, Potomac
Acquisition LLC, Quality Care Properties, Inc. and certain subsidiaries of Quality Care Properties,
Inc. (filed with the Commission as Exhibit 2.1 to the Company’s Form 8-K filed April 26, 2018
(File No. 001-08923), and incorporated herein by reference thereto).
Second Restated Certificate of Incorporation of the Company (filed with the Commission as
Exhibit 3.1 to the Company’s Form 10-K filed March 20, 2000 (File No. 001-08923), and
incorporated herein by reference thereto).
Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed
with the Commission as Exhibit 3.1 to the Company’s Form 10-K filed March 20, 2000
(File No. 001-08923), and incorporated herein by reference thereto).
Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed
with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed June 13, 2003
(File No. 001-08923), and incorporated herein by reference thereto).
Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed
with the Commission as Exhibit 3.9 to the Company’s Form 10-Q filed August 9, 2007
(File No. 001-08923), and incorporated herein by reference thereto).
Certificate of Change of Location of Registered Office and of Registered Agent of the Company
(filed with the Commission as Exhibit 3.1 to the Company’s Form 10-Q filed August 6, 2010
(File No. 001-08923), and incorporated herein by reference thereto).
Certificate of Designation of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock of
the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed March
7, 2011 (File No. 001-08923), and incorporated herein by reference thereto).
Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed
with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed May 10, 2011
(File No. 001-08923), and incorporated herein by reference thereto).
130
3.1(h)
3.1(i)
3.2
4.1(a)
4.1(b)
4.1(c)
4.1(d)
4.1(e)
4.1(f)
4.1(g)
4.1(h)
4.1(i)
4.1(j)
Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed
with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed May 6, 2014
(File No. 001-08923), and incorporated herein by reference thereto).
Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed
with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed September 30, 2015
(File No. 001-08923), and incorporated herein by reference thereto).
Seventh Amended and Restated By-laws of the Company (filed with the Commission as Exhibit
3.1 to the Company’s Form 8-K filed May 6, 2019 (File No. 001-08923), and incorporated herein
by reference thereto).
Indenture, dated as of March 15, 2010, between the Company and The Bank of New York Mellon
Trust Company, N.A. (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed
March 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
Supplemental Indenture No. 1, dated as of March 15, 2010, between the Company and The Bank
of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed March 15, 2010 (File No. 001-08923), and incorporated herein by
reference thereto).
Amendment No. 1 to Supplemental Indenture No. 1, dated as of June 18, 2010, between the
Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as
Exhibit 4.3 to the Company’s Form 8-K filed June 18, 2010 (File No. 001-08923), and
incorporated herein by reference thereto).
Supplemental Indenture No. 2, dated as of April 7, 2010, between the Company and The Bank of
New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed April 7, 2010 (File No. 001-08923), and incorporated herein by
reference thereto).
Amendment No. 1 to Supplemental Indenture No. 2, dated as of June 8, 2010, between the
Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as
Exhibit 4.3 to the Company’s Form 8-K filed June 8, 2010 (File No. 001-08923), and incorporated
herein by reference thereto).
Supplemental Indenture No. 3, dated as of September 10, 2010, between the Company and The
Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed September 13, 2010 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 4, dated as of November 16, 2010, between the Company and The
Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed November 16, 2010 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 5, dated as of March 14, 2011, between the Company and The Bank
of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed March 14, 2011 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 6, dated as of April 3, 2012, between the Company and The Bank of
New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed April 4, 2012 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 7, dated as of December 6, 2012, between the Company and The Bank
of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed December 11, 2012 (File No. 001-08923), and incorporated herein by
reference thereto).
131
4.1(k)
4.1(l)
4.1(m)
4.1(n)
4.1(o)
4.1(p)
4.1(q)
4.1(r)
4.1(s)
4.1(t)
4.1(u)
4.2
Supplemental Indenture No. 8, dated as of October 7, 2013, between the Company and The Bank
of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed October 9, 2013 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 9, dated as of November 20, 2013, between the Company and The
Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed November 20, 2013 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 10, dated as of November 25, 2014, between the Company and The
Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed November 25, 2014 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 11, dated as of May 26, 2015, between the Company and The Bank of
New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed May 27, 2015 (File No. 001-08923), and incorporated herein by
reference thereto).
Amendment No. 1 to Supplemental Indenture No. 11, dated as of October 19, 2015, between the
Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as
Exhibit 4.3 to the Company’s Form 8-K filed October 20, 2015 (File No. 001-08923), and
incorporated herein by reference thereto).
Supplemental Indenture No. 12, dated as of March 1, 2016, between the Company and The Bank
of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed March 3, 2016 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 13, dated as of April 10, 2018, between the Company and The Bank
of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company’s Form 8-K filed April 10, 2018 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 14, dated as of August 16, 2018, between the Company and The Bank
of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the
Company’s Form 8-K filed August 16, 2018 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 15, dated as of February 15, 2019 between the Company and The
Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company's Form 8-K filed February 15, 2019 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 16, dated as of August 19, 2019, between the Company and The Bank
of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the
Company's Form 8-K filed August 19, 2019 (File No. 001-08923), and incorporated herein by
reference thereto).
Supplemental Indenture No. 17, dated as of December 16, 2019, between the Company and The
Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the
Company's Form 8-K filed December 16, 2019 (File No. 001-08923), and incorporated herein by
reference thereto).
Form of Indenture for Senior Subordinated Debt Securities (filed with the Commission as
Exhibit 4.2 to the Company’s Form S-3 (File No. 333-2250004) filed May 17, 2018, and
incorporated herein by reference thereto).
132
4.3
4.4(a)
4.4(b)
Form of Indenture for Junior Subordinated Debt Securities (filed with the Commission as
Exhibit 4.3 to the Company’s Form S-3 (File No. 333-2250004) filed May 17, 2018, and
incorporated herein by reference thereto).
Indenture, dated as of November 25, 2015, by and among HCN Canadian Holdings-1 LP, the
Company and BNY Trust Company of Canada (filed with the Commission as Exhibit 4.5(a) to the
Company’s Form 10-K filed February 18, 2016 (File No. 001-08923), and incorporated herein by
reference thereto).
First Supplemental Indenture, dated as of November 25, 2015, by and among HCN Canadian
Holdings-1 LP, the Company and BNY Trust Company of Canada (filed with the Commission as
Exhibit 4.5(b) to the Company’s Form 10-K filed February 18, 2016 (File No. 001-08923), and
incorporated herein by reference thereto).
4.4(c)
Second Supplemental Indenture, dated as of December 20, 2019, by and among HCN Canadian
Holdings-1 LP, the Company and BNY Trust Company of Canada.
4.5
Description of Securities of the Registrant.
10.1(a)
10.1(b)
10.2(a)
10.2(b)
10.2(c)
Credit Agreement dated as of July 19, 2018 by and among the Company; the lenders listed therein;
KeyBank National Association, as administrative agent, L/C issuer and a swingline lender; Bank
of America, N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents; Deutsche Bank
Securities Inc., as documentation agent; Merrill Lynch, Pierce, Fenner & Smith Incorporated,
JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and Deutsche Bank Securities Inc., as
U.S. joint lead arrangers; Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan Chase
Bank, N.A., KeyBanc Capital Markets Inc. and RBC Capital Markets, as Canadian joint lead
arrangers; and Merrill Lynch, Pierce, Fenner & Smith Incorporated and JPMorgan Chase Bank,
N.A., as joint book runners (filed with the Commission as Exhibit 10.1 to the Company’s
Form 8-K filed July 24, 2018 (File No. 001-08923), and incorporated herein by reference thereto).
First Amendment, dated April 26, 2019, to the Credit Agreement, dated as of July 19, 2018, by and
among the Company; the lenders listed therein; KeyBank National Association, as administrative
agent, L/C issuer and a swingline lender; Bank of America, N.A. and JPMorgan Chase Bank, N.A.,
as co-syndication agents; Deutsche Bank Securities Inc., as documentation agent; Merrill Lynch,
Pierce, Fenner & Smith Incorporated, JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc.
and Deutsche Bank Securities Inc., as U.S. joint lead arrangers; Merrill Lynch, Pierce, Fenner &
Smith Incorporated, JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and RBC Capital
Markets, as Canadian joint lead arrangers; and Merrill Lynch, Pierce, Fenner & Smith Incorporated
and JPMorgan Chase Bank, N.A., as joint book runners (filed with the Commission as Exhibit 10.1
to the Company’s Form 10-Q filed April 30, 2019 (File No. 001-08923), and incorporated herein
by reference thereto).
Amended and Restated Health Care REIT, Inc. 2005 Long-Term Incentive Plan (filed with the
Commission as Appendix A to the Company’s Proxy Statement for the 2009 Annual Meeting of
Stockholders, filed March 25, 2009 (File No. 001-08923), and incorporated herein by reference
thereto).*
Form of Stock Option Agreement (with Dividend Equivalent Rights) for Executive Officers under
the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.9 to the Company’s
Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference
thereto).*
Form of Stock Option Agreement (without Dividend Equivalent Rights) for Executive Officers
under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as
Exhibit 10.2 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and
incorporated herein by reference thereto).*
133
10.2(d)
10.2(e)
10.3(a)
10.3(b)
10.4
10.5
10.6
10.7
10.8(a)
10.8(b)
10.8(c)
10.8(d)
10.9(a)
10.9(b)
Form of Restricted Stock Agreement for the Chief Executive Officer under the Amended and
Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.3 to the
Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by
reference thereto).*
Form of Restricted Stock Agreement for Executive Officers under the Amended and Restated 2005
Long-Term Incentive Plan (filed with the Commission as Exhibit 10.4 to the Company’s
Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference
thereto).*
Amended and Restated Employment Agreement, dated January 3, 2017, between the Company and
Thomas J. DeRosa (filed with the Commission as Exhibit 10.4(a) to the Company’s Form 10-K
filed February 22, 2017 (File No. 001-08923), and incorporated herein by reference thereto).*
Performance-Based Restricted Stock Unit Grant Agreement, dated effective as of July 30, 2014,
between the Company and Thomas J. DeRosa (filed with the Commission as Exhibit 10.2 to the
Company’s Form 10-Q filed November 4, 2014 (File No. 001-08923), and incorporated herein by
reference thereto).*
Settlement Agreement, dated September 4, 2019, by and between John A. Goodey and the
Company (filed with the Commission as Exhibit 10.1 to the Company's Form 10-Q filed
October 30, 2019 (File No. 001-08923), and incorporated herein by reference thereto).*
Resignation Agreement, dated July 1, 2019, by and between Mercedes T. Kerr and the Company
(filed with the Commission as Exhibit 10.1 to the Company's Form 10-Q filed August 1, 2019
(File No. 001-08923), and incorporated herein by reference thereto).*
Form of Indemnification Agreement between the Company and each director, executive officer
and officer of the Company (filed with the Commission as Exhibit 10.1 to the Company’s
Form 8-K filed February 18, 2005 (File No. 001-08923), and incorporated herein by reference
thereto).*
Summary of Director Compensation (filed with the Commission as Exhibit 10.2 to the Company's
Form 10-Q filed August 1, 2019 (File No. 001-08923), and incorporated by reference thereto).*
Welltower Inc. 2016 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.1 to the
Company’s Form 8-K filed May 10, 2016 (File No. 001-08923), and incorporated herein by
reference thereto).*
Form of Restricted Stock Grant Notice for Executive Officers under the 2016 Long-Term
Incentive Plan (filed with the Commission as Exhibit 10.14(b) to the Company’s Form 10-K filed
February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*
Form of Restricted Stock Grant Notice for Senior Vice Presidents under the 2016 Long-Term
Incentive Plan (filed with the Commission as Exhibit 10.14(c) to the Company’s Form 10-K filed
February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*
Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the 2016 Long-
Term Incentive Plan (filed with the Commission as Exhibit 10.14(d) to the Company’s Form 10-K
filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*
Welltower Inc. 2016-2018 Long-Term Incentive Program (filed with the Commission as Exhibit
10.3 to the Company’s Form 10-Q filed August 2, 2016 (File No. 001-08923), and incorporated
herein by reference thereto).*
Form of Performance Restricted Stock Unit Award Agreement under the 2016-2018 Long-Term
Incentive Program (filed with the Commission as Exhibit 10.15(b) to the Company’s Form 10-K
filed February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*
10.10(a) Welltower
Inc. 2017-2019 Long-Term Incentive Program (filed with the Commission as
Exhibit 10.4 to the Company’s Form 10-Q filed May 5, 2017 (File No. 001-08923), and
incorporated herein by reference thereto).*
134
10.10(b)
Form of Award Notice under the 2017-2019 Long-Term Incentive Program (filed with the
Commission as Exhibit 10.16(b)
to the Company’s Form 10-K filed February 28, 2018
(File No. 001-08923), and incorporated herein by reference thereto).*
10.10(c) Welltower Inc. 2017-2019 Long-Term Incentive Program — Bridge 1 (filed with the Commission
as Exhibit 10.2 to the Company’s Form 10-Q filed November 7, 2017 (File No. 001-08923), and
incorporated herein by reference thereto).*
10.10(d)
Form of Award Notice under the 2017-2019 Long Term Incentive Program — Bridge 1 (filed with
the Commission as Exhibit 10.16(d) to the Company’s Form 10-K filed February 28, 2018
(File No. 001-08923), and incorporated herein by reference thereto).*
10.10(e) Welltower Inc. 2017-2019 Long-Term Incentive Program — Bridge 2 (filed with the Commission
as Exhibit 10.3 to the Company’s Form 10-Q filed November 7, 2017 (File No. 001-08923), and
incorporated herein by reference thereto).*
10.10(f)
Form of Award Notice under the 2017-2019 Long Term Incentive Program — Bridge 2 (filed with
the Commission as Exhibit 10.16(f) to the Company’s Form 10-K filed February 28, 2018
(File No. 001-08923), and incorporated herein by reference thereto).*
10.11(a) Welltower
Inc. 2018-2020 Long-Term Incentive Program (filed with the Commission as
Exhibit 10.17(a) to the Company’s Form 10-K filed February 28, 2018 (File No. 001-08923), and
incorporated herein by reference thereto).*
10.11(b)
Form of Restricted Stock Unit Award Agreement under the 2018-2020 Long-Term Incentive
Program (filed with the Commission as Exhibit 10.17(b) to the Company’s Form 10-K filed
February 28, 2018 (File No. 001-08923), and incorporated herein by reference thereto).*
10.12(a) Welltower
Inc. 2019-2021 Long-Term Incentive Program (filed with the Commission as
Exhibit 10.14(a) to the Company's Form 10-K filed February 25, 2019 (File No. 001-08923), and
incorporated herein by reference thereto).*
10.12(b)
10.13
Form of Restricted Stock Unit Award Agreement under the 2019-2021 Long-Term Incentive
Program (filed with the Commission as Exhibit 10.14(b) to the Company's Form 10-K filed
February 25, 2019 (File No. 001-08923), and incorporated herein by reference thereto).*
2019 Non-Qualified Deferred Compensation Plan (filed with the Commission as Exhibit 10.2 to
the Company's Form 10-Q filed October 30, 2019 (File No. 001-08923), and incorporated herein
by reference thereto).*
10.14(a) Welltower Inc. 2020-2022 Long-Term Incentive Program.*
10.14(b)
Form of Restricted Stock Unit Award Agreement under the 2020-2022 Long-Term Incentive
Program.*
21
23
24
31.1
31.2
32.1
32.2
Subsidiaries of the Company.
Consent of Ernst & Young LLP, independent registered public accounting firm.
Powers of Attorney.
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
Certification pursuant to 18 U.S.C. Section 1350 by Chief Executive Officer.
Certification pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer.
101.INS
Inline XBRL Instance Document. The instance document does not appear in the Interactive Data
File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
135
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
104
The cover page from the Company's Annual Report on Form 10-K for the year ended
December 31, 2019, formatted in Inline XBRL (included in Exhibit 101)
* Management Contract or Compensatory Plan or Arrangement.
Item 16. Form 10-K Summary
None.
136
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 14, 2020
WELLTOWER INC.
By:
/s/ Thomas J. DeRosa
Thomas J. DeRosa,
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on
February 14, 2020 by the following persons on behalf of the Registrant and in the capacities indicated.
/s/
Jeffrey H. Donahue **
Jeffrey H. Donahue, Lead Director
/s/ Kenneth J. Bacon **
Kenneth J. Bacon, Director
/s/ Karen B. DeSalvo **
Karen B. DeSalvo, Director
/s/ Sharon M. Oster **
Sharon M. Oster, Director
/s/ Sergio D. Rivera **
Sergio D. Rivera, Director
/s/ Kathryn M. Sullivan **
Kathryn M. Sullivan, Director
/s/ R. Scott Trumbull **
R. Scott Trumbull, Director
/s/ Thomas J. DeRosa **
Thomas J. DeRosa, Chairman and
Chief Executive Officer
(Principal Executive Officer)
/s/ Timothy G. McHugh **
Timothy G. McHugh, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/
Joshua T. Fieweger **
Joshua T. Fieweger, Senior Vice President and
Controller (Principal Accounting Officer)
/s/
Johnese M. Spisso **
**By:
/s/ Thomas J. DeRosa
Johnese M. Spisso, Director
Thomas J. DeRosa, Attorney-in-Fact
137
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2019
(Dollars in thousands)
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Seniors Housing Operating:
Adderbury, UK . . . . . . .
$
— $
2,144
$
12,549
$
$
2,230
$
13,120
$
6,203
20,837
50,914
25,187
10,520
4,446
6,290
10,239
16,639
37,395
31,198
2,338
6,283
14,914
20,603
9,520
21,413
74,850
29,881
55,113
18,853
37,710
32,304
11,876
29,436
50,952
17,484
21,084
19,004
19,861
35,300
12,989
45,309
45
212
—
18,956
13,014
11,313
8,902
35,662
Albertville, AL . . . . . . .
Albuquerque, NM . . . . .
Alexandria, VA . . . . . .
Altrincham, UK . . . . . .
Amherst, NY . . . . . . . .
Amherstview, ON . . . . .
Anderson, SC . . . . . . . .
Ankeny, IA . . . . . . . . . .
Apple Valley, CA . . . . .
Arlington, TX . . . . . . . .
Arlington, VA . . . . . . . .
Arlington, VA . . . . . . . .
Arnprior, ON . . . . . . . .
Atlanta, GA . . . . . . . . .
Atlanta, GA . . . . . . . . .
Austin, TX . . . . . . . . . .
Austin, TX . . . . . . . . . .
Austin, TX . . . . . . . . . .
Bagshot, UK . . . . . . . . .
Banstead, UK . . . . . . . .
Basingstoke, UK . . . . . .
Basking Ridge, NJ . . . .
Bassett, UK . . . . . . . . . .
Bath, UK . . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Baton Rouge, LA . . . . .
12,930
Beaconsfield, UK . . . . .
Beaconsfield, QC . . . . .
Bee Cave, TX . . . . . . . .
Bellevue, WA . . . . . . . .
Bellingham, WA . . . . . .
Belmont, CA . . . . . . . . .
Bethel Park, PA . . . . . .
Bethesda, MD . . . . . . . .
Bethesda, MD . . . . . . . .
Bethesda, MD . . . . . . . .
Bethesda, MD . . . . . . . .
Birmingham, UK . . . . .
Birmingham, UK . . . . .
Birmingham, UK . . . . .
Blainville, QC . . . . . . . .
Bloomfield Hills, MI . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Boca Raton, FL . . . . . . .
32,270
Boise, ID . . . . . . . . . . . .
Borehamwood, UK . . . .
Bothell, WA . . . . . . . . .
Boulder, CO . . . . . . . . .
Bournemouth, UK . . . .
—
—
—
—
—
170
1,270
8,280
4,244
1,131
473
710
1,129
480
1,660
8,385
—
788
2,058
2,100
880
1,560
4,200
4,960
6,695
3,420
2,356
4,874
2,696
790
5,566
1,149
1,820
2,800
1,500
—
1,609
—
—
—
—
148
1,480
2,807
2,077
2,000
6,565
2,220
5,367
1,350
2,994
5,527
657
489
2,653
296
3,274
806
691
878
—
856
3,019
15,162
1,657
880
2,148
1,824
1,902
750
1,287
6,822
9,912
1,958
1,738
8,919
783
1,242
4,746
1,808
632
2,392
822
2,426
—
1,263
886
926
69,690
—
1,302
1,598
1,388
1,413
176
1,354
8,280
4,565
1,131
519
710
1,129
486
1,660
8,386
5
851
2,080
2,197
885
1,560
4,200
5,340
7,246
3,678
2,395
5,255
2,805
886
5,998
1,289
1,820
2,816
1,507
178
1,609
3
—
—
3,513
148
1,592
3,019
2,301
2,133
6,565
2,220
5,810
1,798
3,064
5,966
6,686
23,406
51,210
28,140
11,326
5,091
7,168
10,239
17,489
40,414
46,359
3,990
7,100
17,040
22,330
11,417
22,163
76,137
36,323
64,474
20,553
39,409
40,842
12,550
30,582
55,266
19,152
21,716
21,380
20,676
37,548
12,989
46,569
931
1,138
66,252
18,956
14,204
12,699
10,066
36,942
135,060
20,533
45,864
19,918
29,822
46,617
1,032
1,998
7,255
2,459
6,892
623
1,019
3,811
970
5,084
10,850
13,165
259
1,783
12,165
4,829
6,144
3,533
10,166
8,360
14,801
3,155
9,083
10,030
979
6,912
12,416
5,644
2,694
6,062
5,982
9,080
259
10,744
229
480
1,421
4,844
1,211
1,038
3,242
8,446
17,762
349
10,954
3,354
8,429
10,820
2015
2010
2010
2016
2012
2019
2015
2003
2016
2010
2012
2017
2018
2013
1997
2014
1999
2014
2015
2012
2012
2014
2013
2013
2015
2013
2013
2013
2016
2013
2010
2013
2019
2013
2013
2013
2016
2013
2015
2015
2013
2013
2018
2019
2012
2015
2013
2013
2017 Banbury Road
1999 151 Woodham Dr.
1984 500 Paisano St NE
2018 5550 Cardinal Place
2009 295 Hale Road
2013 1880 Sweet Home Road
1974 4567 Bath Road
1986 311 Simpson Rd.
2012 1275 SW State Street
1999 11825 Apple Valley Rd.
2000 1250 West Pioneer Parkway
1992 900 N Taylor Street
1992 900 N Taylor Street
1991 15 Arthur Street
1999 1460 S Johnson Ferry Rd.
2000 1000 Lenox Park Blvd NE
1998 12429 Scofield Farms Dr.
2013 11330 Farrah Lane
2014 4310 Bee Caves Road
2009 14 - 16 London Road
2005 Croydon Lane
2012 Grove Road
2002 404 King George Road
2006 111 Burgess Road
2017 Clarks Way, Rush Hill
2009 9351 Siegen Lane
2009 30-34 Station Road
2008 505 Elm Avenue
2014 14058 A Bee Cave Parkway
1998 15928 NE 8th Street
1996 4415 Columbine Dr.
2002 1010 Alameda de Las Pulgas
2019 631 McMurray Road
2009 8300 Burdett Road
2009 8300 Burdett Road
2009 8300 Burdett Road
2018 4925 Battery Lane
2006 5 Church Road, Edgbaston
2016 47 Bristol Road South
2016 134 Jockey Road
2008 50 des Chateaux Boulevard
2009 6790 Telegraph Road
1994 6343 Via De Sonrise Del Sur
1999 10250 W Smoke Ranch Drive
2003 Edgwarebury Lane
1988 10605 NE 185th Street
2003 3955 28th Street
2008 42 Belle Vue Road
111,247
23,813
18,703
41,937
13,439
27,458
42,547
1,830
4,370
6,927
2,434
4,509
138
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Braintree, MA . . . . . . . .
—
—
Brampton, ON . . . . . . .
41,370
10,196
Brandon, MS . . . . . . . .
Brick, NJ . . . . . . . . . . . .
Brick, NJ . . . . . . . . . . . .
Bridgewater, NJ . . . . . .
Brockport, NY . . . . . . .
—
—
—
—
—
Brockville, ON . . . . . . .
4,375
Brookfield, WI . . . . . . .
Broomfield, CO . . . . . .
—
—
Brossard, QC . . . . . . . .
10,516
Buckingham, UK . . . . .
Buffalo Grove, IL . . . . .
Burbank, CA . . . . . . . . .
—
—
—
Burbank, CA . . . . . . . . .
18,865
Burke, VA . . . . . . . . . .
Burleson, TX . . . . . . . .
Burlingame, CA . . . . . .
—
—
—
Burlington, ON . . . . . . .
11,513
Burlington, MA . . . . . .
Burlington, WA . . . . . .
Burlington, WA . . . . . .
Bushey, UK . . . . . . . . .
Calgary, AB . . . . . . . . .
Calgary, AB . . . . . . . . .
Calgary, AB . . . . . . . . .
Calgary, AB . . . . . . . . .
Calgary, AB . . . . . . . . .
Camberley, UK . . . . . . .
Camillus, NY . . . . . . . .
Cardiff, UK . . . . . . . . . .
Cardiff by the Sea,
CA . . . . . . . . . . . . . .
Carmichael, CA . . . . . .
Carol Stream, IL . . . . . .
Carrollton, TX . . . . . . .
Cary, NC . . . . . . . . . . . .
Cary, NC . . . . . . . . . . . .
Cedar Park, TX . . . . . . .
Cerritos, CA . . . . . . . . .
Charlottesville, VA . . . .
—
—
—
—
11,355
12,899
10,250
21,583
25,255
—
—
—
36,097
24,548
—
—
—
—
—
—
—
Chatham, ON . . . . . . . .
642
Chelmsford, MA . . . . . .
Chertsey, UK . . . . . . . .
Chesterfield, MO . . . . .
Chorleywood, UK . . . .
Chula Vista, CA . . . . . .
Church Crookham,
UK . . . . . . . . . . . . . .
Cincinnati, OH . . . . . . .
Cincinnati, OH . . . . . . .
Citrus Heights, CA . . . .
Claremont, CA . . . . . . .
Clay, NY . . . . . . . . . . . .
Cohasset, MA . . . . . . . .
Colleyville, TX . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
41,290
59,989
10,241
17,372
17,125
48,201
23,496
7,445
12,830
44,547
31,854
13,880
49,129
43,466
50,817
—
10,437
62,786
19,311
34,354
14,938
7,619
36,482
37,415
41,179
38,971
28,983
36,776
5,736
11,132
12,566
64,711
41,988
55,048
31,444
45,240
70,008
15,664
27,494
91,468
12,462
10,951
25,886
48,366
43,191
1,220
1,170
690
1,730
1,500
484
1,300
4,140
5,499
2,979
2,850
4,940
3,610
—
3,150
—
1,309
2,443
877
768
12,690
2,252
2,793
3,122
3,431
2,385
2,654
2,064
3,191
5,880
2,440
1,730
4,280
740
6,112
1,750
—
4,651
1,098
1,040
9,566
1,857
5,636
1,251
3,806
277
1,752
5,803
2,785
639
916
147
100
10,736
1,220
1,213
695
1,774
1,705
524
1,300
12,797
10,140
42,441
63,255
10,518
19,081
22,923
50,942
23,930
8,321
12,977
51,344
34,624
15,429
53,061
47,567
55,036
50,252
11,118
62,879
21,036
35,864
15,853
8,187
37,974
40,755
44,606
42,327
32,307
40,203
23,034
11,898
14,506
69,549
43,923
58,187
32,921
46,158
79,035
16,406
34,327
105,097
15,595
12,889
27,451
49,818
49,105
10,092
12,158
2,594
4,778
4,778
11,700
4,631
1,480
2,137
18,769
7,003
2,436
12,104
12,013
7,089
1,194
1,669
7,356
5,071
8,967
1,085
695
1,554
10,035
10,754
10,117
6,936
7,071
1,967
748
4,212
18,178
—
14,359
5,127
9,522
9,215
1,351
7,207
15,730
3,709
4,935
1,660
10,924
12,352
2013
2015
2010
2010
2010
2010
2015
2015
2012
2013
2015
2014
2012
2012
2016
2016
2012
2016
2013
2013
2019
2019
2015
2013
2013
2013
2013
2015
2014
2019
2013
2011
2019
2012
2013
2013
2018
2016
2016
2018
2015
2003
2015
2013
2013
2007 618 Granite Street
2009 100 Ken Whillans Drive
1999 140 Castlewoods Blvd
1998 515 Jack Martin Blvd
1999 1594 Route 88
1999 2005 Route 22 West
1999 90 West Avenue
1996 1026 Bridlewood Drive
2013 1105 Davidson Road
2009 400 Summit Blvd
1989 2455 Boulevard Rome
1883 Church Street
2003 500 McHenry Road
2002 455 E. Angeleno Avenue
1985 2721 Willow Street
2018 9617 Burke Lake Road
2014 621 Old Highway 1187
2015 1818 Trousdale Avenue
1990 500 Appleby Line
2005 24 Mall Road
1999 410 S Norris St
1996 210 / 212 N Skagit St
2018 Elton House, Elton Way
2003 20 Promenade Way SE
1998 80 Edenwold Drive NW
1998 150 Scotia Landing NW
1989 9229 16th Street SW
2006 2220-162nd Avenue SW
2016 Fernhill Road
2016 3877 Milton Avenue
2007 127 Cyncoed Road
2009 3535 Manchester Avenue
2014 4717 Engle Road
2001 545 Belmont Lane
2010 2105 North Josey Lane
2009 1206 West Chatham Street
1999 300 Kildaire Woods Drive
2015 800 C-Bar Ranch Trail
2002 11000 New Falcon Way
1991 2610 Barracks Road
1965 25 Keil Drive North
1997 4 Technology Dr.
2018 Bittams Lane
2001 1880 Clarkson Road
2007 High View, Rickmansworth
Road
5,720
3,231
2,850
4,940
3,610
2,575
3,150
—
1,413
2,578
877
768
13,203
2,424
2,991
3,358
3,680
2,553
6,091
2,064
3,457
5,880
2,440
1,730
4,280
740
6,155
1,750
—
4,651
1,255
1,120
9,952
1,917
6,076
2,072
22,163
2,591
1,750
2,060
2,300
2,430
1,296
2,485
1,050
14,215
11,279
109,388
31,876
9,928
10,695
26,147
17,082
2,162
23,557
5,574
2013
2003 3302 Bonita Road
2,806
1,750
2,106
2,300
2,515
1,296
2,500
1,050
15,882
11,358
123,307
33,534
11,608
11,429
28,172
17,135
3,197
355
30,961
9,837
3,183
702
6,861
1,385
2014
2019
2007
2010
2013
2019
2013
2016
2014 Bourley Road
2019 732 Clough Pike Road
2010 5445 Kenwood Road
1997 7418 Stock Ranch Rd.
2001 2053 North Towne Avenue
2014 8547 Morgan Road
1998 125 King Street (Rt 3A)
2013 8100 Precinct Line Road
139
2,991
1,801
3,932
4,101
4,219
52,827
681
93
1,829
1,645
915
568
2,005
3,512
3,625
3,592
3,573
3,595
20,735
766
2,206
4,838
1,935
3,139
1,477
918
9,070
742
6,833
13,629
3,290
2,018
1,951
1,512
6,354
1,484
1,882
79
13,965
1,658
1,765
734
2,040
53
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Colorado Springs,
CO . . . . . . . . . . . . . .
Colts Neck, NJ . . . . . . .
—
—
Coquitlam, BC . . . . . . .
9,102
Crystal Lake, IL . . . . . .
Dallas, TX . . . . . . . . . .
Davenport, IA . . . . . . . .
Decatur, GA . . . . . . . . .
Denver, CO . . . . . . . . . .
Denver, CO . . . . . . . . . .
Denver, CO . . . . . . . . . .
Dix Hills, NY . . . . . . . .
Dollard-Des-Ormeaux,
QC . . . . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
Dresher, PA . . . . . . . . .
8,380
Dublin, OH . . . . . . . . . .
Dublin, OH . . . . . . . . . .
East Amherst, NY . . . . .
East Meadow, NY . . . .
East Setauket, NY . . . . .
Eastbourne, UK . . . . . .
Edgbaston, UK . . . . . . .
Edgewater, NJ . . . . . . .
Edison, NJ . . . . . . . . . .
Edmonds, WA . . . . . . .
Edmonton, AB . . . . . . .
Edmonton, AB . . . . . . .
El Dorado Hills, CA . . .
Encino, CA . . . . . . . . . .
Englishtown, NJ . . . . . .
Erie, PA . . . . . . . . . . . .
Esher, UK . . . . . . . . . . .
Fairfield, NJ . . . . . . . . .
Fairfield, CA . . . . . . . . .
Fairfield, OH . . . . . . . .
Fareham, UK . . . . . . . .
Florence, AL . . . . . . . . .
Flossmoor, IL . . . . . . . .
Folsom, CA . . . . . . . . .
Fort Worth, TX . . . . . . .
Fort Worth, TX . . . . . . .
Fort Worth, TX . . . . . . .
Fremont, CA . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
8,211
10,735
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Fresno, CA . . . . . . . . . .
23,720
Frome, UK . . . . . . . . . .
Fullerton, CA . . . . . . . .
Gahanna, OH . . . . . . . .
Gardnerville, NV . . . . .
Gig Harbor, WA . . . . . .
—
—
—
—
—
Gilbert, AZ . . . . . . . . . .
14,200
Glen Cove, NY . . . . . . .
Glenview, IL . . . . . . . . .
—
—
Golden Valley, MN . . .
3,600
Granbury, TX . . . . . . . .
Grimsby, ON . . . . . . . .
Grosse Pointe Woods,
MI . . . . . . . . . . . . . . .
—
—
—
800
780
3,047
875
6,330
1,403
—
1,450
2,910
5,411
3,808
1,957
1,900
1,680
1,169
1,626
69
4,920
4,145
2,720
4,561
1,892
1,650
1,589
2,063
5,190
5,040
690
1,422
5,783
3,120
1,460
1,416
3,408
353
1,292
1,490
7,118
2,080
1,740
3,400
2,459
2,720
1,964
772
1,143
1,560
2,160
4,594
2,090
1,520
2,040
636
14,756
14,733
24,567
12,461
114,794
35,893
—
19,389
35,838
104,641
39,014
14,431
10,664
43,423
25,345
10,721
45,991
37,354
33,744
13,969
25,047
32,314
24,449
29,819
37,293
52,171
46,255
12,520
8,198
48,361
43,868
14,040
12,566
17,970
13,049
9,496
32,754
52,772
27,888
19,799
25,300
33,048
14,813
19,989
11,214
10,831
15,947
28,246
35,236
69,288
33,513
30,670
5,617
950
13,662
2,026
2,599
2,439
1,556
2,288
4,830
31,177
3,671
2,010
8,008
2,045
1,585
1,211
7,075
112
863
1,837
1,982
3,384
1,524
1,767
3,498
8,055
3,016
3,913
156
5,021
2,267
792
7,998
2,277
2,711
294
2,088
729
2,090
93
1,744
4,371
732
5,295
1,755
1,884
1,168
1,884
1,364
1,155
2,025
2,276
4,276
1,578
710
732
891
1,026
1,131
3,264
971
6,330
1,614
1,946
1,450
2,910
5,411
3,959
2,145
1,914
1,850
1,169
1,626
124
4,986
4,472
2,926
4,564
1,911
1,686
1,753
2,209
5,190
5,040
860
1,422
6,242
3,180
1,460
1,416
3,681
385
1,339
1,490
7,118
2,080
1,740
3,456
2,459
2,926
1,998
787
1,164
1,583
2,180
4,643
2,090
1,634
2,040
683
16,556
16,981
26,789
13,921
117,082
40,512
29,231
23,060
37,848
112,649
40,908
15,828
11,861
50,328
25,457
11,584
47,773
39,270
36,801
15,287
26,811
35,793
32,468
32,671
41,060
52,327
51,276
14,617
8,990
55,900
46,085
16,751
12,860
19,785
13,746
11,539
32,847
54,516
32,259
20,531
30,539
34,803
16,491
21,123
13,083
12,174
17,079
30,251
37,463
73,564
34,977
31,380
6,302
4,211
4,194
7,628
3,869
16,762
11,931
7,458
4,957
9,701
3,672
9,751
5,414
4,008
16,148
3,252
704
11,123
9,211
8,971
2,003
6,634
10,447
4,664
8,106
12,124
—
12,449
3,781
586
11,709
10,815
7,033
517
3,622
3,938
3,515
5,416
1,910
8,525
2,435
11,041
—
2,706
5,300
3,180
9,112
4,706
9,137
10,265
17,854
8,005
7,189
1,224
2013
2010
2013
2013
2015
2006
2013
2012
2012
2019
2013
2013
2013
2010
2016
2019
2013
2013
2013
2014
2013
2013
2015
2013
2013
2017
2012
2010
2019
2013
2013
2002
2019
2014
2010
2013
2015
2019
2012
2016
2005
2019
2014
2013
2013
1998
2010
2013
2013
2012
2013
2011
2015
2001 2105 University Park Boulevard
2002 3 Meridian Circle
1990 1142 Dufferin Street
2001 751 E Terra Cotta Avenue
2013 3535 N Hall Street
2009 4500 Elmore Ave.
1998 920 Clairemont Avenue
1997 4901 South Monaco Street
2007 8101 E Mississippi Avenue
2014 1500 Little Raven St
2003 337 Deer Park Road
2008 4377 St. Jean Blvd
2006 1650 Susquehanna Road
1990 6470 Post Rd
2015 4175 Stoneridge Lane
2015 8040 Roll Road
2002 1555 Glen Curtiss Boulevard
2002 1 Sunrise Drive
2008 6 Upper Kings Drive
2015 Pershore Road
2000 351 River Road
1996 1801 Oak Tree Road
1976 21500 72nd Avenue West
1999 103 Rabbit Hill Court NW
1968 10015 103rd Avenue NW
2019 2020 Town Center West Way
2003 15451 Ventura Boulevard
1997 49 Lasatta Ave
2013 4400 East Lake Road
2006 42 Copsem Lane
1998 47 Greenbrook Road
1998 3350 Cherry Hills St.
2018 520 Patterson Boulevard
2012 Redlands Lane
1999 3275 County Road 47
2000 19715 Governors Highway
2014 1574 Creekside Drive
2017 3401 Amador Drive
2001 2151 Green Oaks Road
2014 7001 Bryant Irvin Road
1987 2860 Country Dr.
2014 5605 North Gates Avenue
2012 Welshmill Lane
2008 2226 North Euclid Street
1998 775 East Johnstown Road
1999 1565-A Virginia Ranch Rd.
1994 3213 45th St. Court NW
2008 580 S. Gilbert Road
1998 39 Forest Avenue
2001 2200 Golf Road
2005 4950 Olson Memorial
Highway
2009 100 Watermark Boulevard
1991 84 Main Street East
950
14,553
3,255
2013
2006 1850 Vernier Road
140
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Grosse Pointe Woods,
MI . . . . . . . . . . . . . . .
—
Grove City, OH . . . . . .
36,420
Guildford, UK . . . . . . .
Gurnee, IL . . . . . . . . . .
Haddonfield, NJ . . . . . .
Hamburg, NY . . . . . . . .
Hamilton, OH . . . . . . . .
Hampshire, UK . . . . . . .
Happy Valley, OR . . . .
Haverford, PA . . . . . . .
Henderson, NV . . . . . . .
High Wycombe, UK . . .
Highland Park, IL . . . . .
Highland Park, IL . . . . .
Hingham, MA . . . . . . . .
Holbrook, NY . . . . . . . .
Horley, UK . . . . . . . . . .
Houston, TX . . . . . . . . .
Houston, TX . . . . . . . . .
Houston, TX . . . . . . . . .
Houston, TX . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Howell, NJ . . . . . . . . . .
8,096
Huntington Beach,
CA . . . . . . . . . . . . . .
Independence, MO . . . .
Irving, TX . . . . . . . . . . .
Jacksonville, FL . . . . . .
Johns Creek, GA . . . . . .
Johnson City, NY . . . . .
Kanata, ON . . . . . . . . . .
Kansas City, MO . . . . .
Kansas City, MO . . . . .
Kansas City, MO . . . . .
Kelowna, BC . . . . . . . .
Kennebunk, ME . . . . . .
Kenner, LA . . . . . . . . . .
Kennett Square, PA . . .
—
—
—
—
—
—
—
—
4,880
—
5,176
—
—
—
Kingston, ON . . . . . . . .
4,229
Kingwood, TX . . . . . . .
Kingwood, TX . . . . . . .
Kirkland, WA . . . . . . . .
Kitchener, ON . . . . . . .
Kitchener, ON . . . . . . .
Kitchener, ON . . . . . . .
La Palma, CA . . . . . . . .
Lackawanna, NY . . . . .
Lafayette Hill, PA . . . .
Laguna Hills, CA . . . . .
Laguna Woods, CA . . .
Laguna Woods, CA . . .
Lake Zurich, IL . . . . . .
Lancaster, CA . . . . . . . .
Lancaster, NY . . . . . . . .
—
—
—
1,329
3,323
12,374
—
—
—
—
—
—
—
—
—
1,430
3,575
5,361
890
520
967
1,163
4,172
709
1,880
1,190
3,567
2,820
2,250
1,440
3,957
2,332
3,830
1,040
1,750
960
1,066
3,808
1,550
1,030
6,550
1,580
1,392
1,689
1,820
1,930
541
2,688
2,700
1,100
1,050
1,030
480
1,683
1,880
708
1,093
1,341
2,950
1,011
1,750
12,820
11,280
9,150
1,470
700
1,252
31,777
85,764
56,494
27,931
16,363
10,006
11,960
26,035
9,889
33,993
11,600
13,422
15,832
25,313
32,292
35,337
12,144
55,674
31,965
15,603
15,275
21,577
31,172
14,463
6,823
29,316
23,285
11,828
28,670
34,898
39,997
23,962
13,647
30,204
10,036
22,946
11,416
9,777
24,207
4,315
2,744
7,327
13,939
16,591
5,254
11,848
75,926
76,485
57,842
9,830
15,295
11,084
33,054
86,713
61,211
30,364
16,946
10,827
11,960
28,292
10,335
36,617
12,648
14,418
16,628
26,848
32,606
37,500
13,811
63,367
37,431
17,198
15,275
22,842
33,695
14,463
7,705
29,316
24,347
12,704
30,581
40,106
45,428
24,275
15,563
35,268
11,428
23,726
12,928
10,631
26,678
5,546
3,064
8,127
18,164
17,837
5,732
14,103
94,927
89,480
69,389
12,537
16,647
12,060
1,282
865
5,122
2,478
590
821
—
2,581
446
2,648
1,111
1,140
796
1,556
318
2,351
1,851
7,693
5,466
1,595
—
1,348
2,646
—
882
—
1,070
876
1,972
5,277
5,488
320
2,123
5,587
1,392
833
1,597
854
2,471
1,231
296
889
4,284
1,269
478
2,372
1,435
3,491
5,766
935
527
967
1,163
4,496
709
1,904
1,253
3,711
2,820
2,271
1,444
4,145
2,516
3,830
1,040
1,750
960
1,149
3,931
1,550
1,030
6,550
1,588
1,392
1,750
1,889
1,987
548
2,895
3,223
1,100
1,103
1,115
480
1,683
1,880
684
1,182
1,400
2,973
1,011
1,867
19,001
12,995
11,547
2,707
1,364
976
12,820
11,280
9,150
1,470
712
1,252
141
7,444
3,901
13,881
6,640
2,315
622
364
6,835
706
8,274
4,139
1,087
3,013
7,216
5,373
8,607
2,788
16,958
8,478
1,485
7,461
5,460
9,396
396
2,246
100
5,794
727
7,368
13,314
14,964
3,884
4,386
13,375
10,059
5,474
2,200
2,704
3,931
2,073
901
2,513
3,702
4,369
453
4,471
18,601
15,798
12,299
4,401
5,201
689
2013
2018
2013
2013
2011
2019
2019
2013
2019
2010
2013
2015
2011
2013
2015
2013
2014
2012
2012
2016
2011
2010
2013
2019
2007
2019
2013
2019
2012
2010
2010
2015
2013
2013
1998
2010
2015
2011
2017
2003
2013
2013
2016
2013
2019
2013
2016
2016
2016
2011
2010
2019
2005 21260 Mack Avenue
2017 3717 Orders Road
2006 Astolat Way, Peasmarsh
2002 500 North Hunt Club Road
2015 132 Warwick Road
2009 4600 Southwestern Blvd
2019 1740 Eden Park Drive
2006 22-26 Church Road
1998 8915 S.E. Monterey
2000 731 Old Buck Lane
2008 1555 West Horizon Ridge
Parkway
2017 The Row Lane End
2012 1651 Richfield Avenue
2005 1601 Green Bay Road
2012 1 Sgt. William B Terry Drive
2001 320 Patchogue Holbrook Road
2014 Court Lodge Road
1998 2929 West Holcombe
Boulevard
1999 505 Bering Drive
2014 10120 Louetta Road
1995 10225 Cypresswood Dr
2007 100 Meridian Place
2004 7401 Yorktown Avenue
2019 19301 East Eastland Ctr Ct
1999 8855 West Valley Ranch
Parkway
2019 10520 Validus Drive
2009 11405 Medlock Bridge Road
2013 1035 Anna Maria Drive
2005 70 Stonehaven Drive
1980 12100 Wornall Road
1986 6500 North Cosby Ave
2014 6460 North Cosby Avenue
1999 863 Leon Avenue
2006 One Huntington Common
Drive
2000 1600 Joe Yenni Blvd
2008 301 Victoria Gardens Dr.
1983 181 Ontario Street
1999 22955 Eastex Freeway
2012 24025 Kingwood Place
1996 6505 Lakeview Dr.
1979 164 - 168 Ferfus Avenue
1964 290 Queen Street South
2003 1250 Weber Street E
2003 5321 La Palma Avenue
2002 133 Orchard Place
1998 429 Ridge Pike
1988 24903 Moulton Parkway
1987 24441 Calle Sonora
1986 24962 Calle Aragon
2007 550 America Court
1999 43051 15th St. West
2011 18 Pavement Road
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Laval, QC . . . . . . . . . . .
Laval, QC . . . . . . . . . . .
Lawrenceville, GA . . . .
Leatherhead, UK . . . . .
Leawood, KS . . . . . . . .
Lecanto, FL . . . . . . . . .
22,375
4,306
—
—
—
—
Lenexa, KS . . . . . . . . . .
9,700
Lincroft, NJ . . . . . . . . .
Linwood, NJ . . . . . . . . .
Litchfield, CT . . . . . . . .
Little Neck, NY . . . . . .
Livingston, NJ . . . . . . .
—
—
—
—
—
Lombard, IL . . . . . . . . .
17,010
London, UK . . . . . . . . .
London, UK . . . . . . . . .
London, ON . . . . . . . . .
—
—
—
London, ON . . . . . . . . .
11,200
London, ON . . . . . . . . .
Longueuil, QC . . . . . . .
Lorain, OH . . . . . . . . . .
32
9,155
—
Los Angeles, CA . . . . .
58,514
Los Angeles, CA . . . . .
Los Angeles, CA . . . . .
Louisville, KY . . . . . . .
—
—
—
Louisville, KY . . . . . . .
13,650
Louisville, CO . . . . . . .
Louisville, CO . . . . . . .
Louisville, CO . . . . . . .
Louisville, CO . . . . . . .
Louisville, CO . . . . . . .
Lynnfield, MA . . . . . . .
Mahwah, NJ . . . . . . . . .
Malvern, PA . . . . . . . . .
Manteca, CA . . . . . . . . .
Maple Ridge, BC . . . . .
Marieville, QC . . . . . . .
Markham, ON . . . . . . . .
Marlboro, NJ . . . . . . . .
Marysville, WA . . . . . .
—
—
—
—
—
—
—
—
—
8,331
6,335
50,918
—
—
Medicine Hat, AB . . . . .
10,438
Medina, OH . . . . . . . . .
Melbourne, FL . . . . . . .
Melville, NY . . . . . . . . .
Memphis, TN . . . . . . . .
Menomonee Falls,
WI . . . . . . . . . . . . . . .
Mesa, AZ . . . . . . . . . . .
—
—
—
—
—
—
Metairie, LA . . . . . . . . .
14,200
2,105
2,383
1,500
4,682
2,490
200
826
9
800
1,240
3,350
8,000
2,130
3,121
7,691
987
1,969
1,445
3,992
1,394
—
3,540
—
2,420
1,600
2,023
1,158
2,672
1,480
2,567
3,165
1,605
1,651
1,300
2,875
1,278
3,727
2,222
620
1,432
1,683
7,070
4,280
1,800
1,020
950
725
Mill Creek, WA . . . . . .
—
10,150
Milton, ON . . . . . . . . . .
19,890
Minnetonka, MN . . . . .
Mission Viejo, CA . . . .
Mississauga, ON . . . . . .
Mississauga, ON . . . . . .
Mississauga, ON . . . . . .
—
13,570
8,491
2,861
27,219
4,542
920
6,600
1,602
873
3,649
32,161
5,968
29,003
17,835
32,493
6,900
26,251
19,958
21,984
17,908
38,461
44,424
59,943
10,027
16,797
8,228
16,985
13,631
23,711
12,956
114,438
19,007
28,050
20,816
20,326
31,562
26,656
50,972
15,546
42,712
45,200
27,249
17,194
12,125
11,922
12,113
48,939
14,888
4,780
14,141
12,036
48,257
73,283
17,744
6,984
9,087
27,708
60,274
25,321
29,344
52,118
17,996
4,655
35,137
37,420
7,263
29,768
19,373
33,122
7,313
27,487
21,742
23,412
29,516
41,469
45,326
61,610
11,766
17,781
9,335
19,386
15,622
27,947
12,979
4,851
894
7,241
1,338
8,386
2,884
7,167
5,324
5,695
5,671
9,556
3,595
14,083
1,952
1,592
1,829
3,680
2,672
5,201
340
120,590
31,800
22,376
33,858
23,286
21,370
33,331
26,656
57,283
16,228
45,393
47,336
28,161
19,466
15,060
17,674
13,094
53,106
16,402
6,432
15,030
12,493
80,021
80,449
20,480
9,240
11,968
28,656
63,693
28,649
30,557
60,565
19,690
5,163
38,635
5,696
4,310
6,078
5,524
1,416
447
2,492
881
1,811
11,558
3,280
6,072
5,908
1,858
2,154
15,995
4,281
2,434
3,491
545
25,011
18,189
6,270
2,550
5,472
6,367
20,215
4,305
6,768
9,097
4,855
1,359
9,565
2018
2018
2013
2015
2012
2004
2013
2013
2010
2010
2010
2015
2013
2014
2015
2015
2015
2015
2015
2019
2011
2012
2016
2012
2013
2019
2019
2019
2019
2019
2013
2012
2013
2005
2015
2015
2013
2013
2003
2015
2019
2007
2010
2012
2006
1999
2013
2010
2015
2013
2016
2013
2013
2015
2005 269, boulevard Ste. Rose
1989 263, boulevard Ste. Rose
2008 1375 Webb Gin House Road
2017 Rectory Lane
1999 4400 West 115th Street
1986 2341 W. Norvell Bryant Hwy.
2006 15055 West 87th Street
Parkway
2002 734 Newman Springs Road
1997 432 Central Ave
1998 19 Constitution Way
2000 5515 Little Neck Pkwy.
2017 369 E Mt Pleasant Avenue
2009 2210 Fountain Square Dr
2012 71 Hatch Lane
2016 6 Victoria Drive
1989 760 Horizon Drive
1953 1486 Richmond Street North
1950 81 Grand Avenue
1989 70 Rue Levis
2018 5401 North Pointe Pkwy
2009 10475 Wilshire Boulevard
2001 2051 N. Highland Avenue
2006 4061 Grand View Boulevard
1999 4600 Bowling Boulevard
2010 6700 Overlook Drive
2008 1336 E Hecla Drive
2019 1800 Plaza Drive
1999 1331 E Hecla Drive
1999 282 McCaslin Blvd
2004 1331 E Hecla Drive
2006 55 Salem Street
2015 15 Edison Road
1998 324 Lancaster Avenue
1986 430 N. Union Rd.
2009 12241 224th Street
2002 425 rue Claude de Ramezay
1981 7700 Bayview Avenue
2002 3A South Main Street
1998 9802 48th Dr. N.E.
1999 223 Park Meadows Drive SE
2017 699 North Huntington St
2009 7300 Watersong Lane
2001 70 Pinelawn Rd
1999 6605 Quail Hollow Road
2007 W128 N6900 Northfield Drive
2000 7231 E. Broadway
2009 3732 West Esplanade Ave. S
1998 14905 Bothell-Everett Hwy
2012 611 Farmstead Drive
2006 18605 Old Excelsior Blvd.
1998 27783 Center Drive
1984 1130 Bough Beeches
Boulevard
1978 3051 Constitution Boulevard
1988 1490 Rathburn Road East
5,368
1,419
794
1,727
3,749
421
1,332
1,906
1,489
11,640
3,016
919
1,755
1,988
1,369
1,204
2,534
2,213
4,584
23
6,152
3,369
5,879
2,470
1,044
1,769
—
6,311
682
2,681
2,707
913
2,421
2,947
5,974
1,088
4,472
1,542
1,652
998
457
31,764
7,212
2,736
2,256
2,881
948
3,448
3,668
1,257
8,447
1,803
569
3,795
2,214
2,507
1,529
4,871
5,610
208
922
131
861
1,272
3,358
8,017
2,218
3,370
8,001
1,084
2,102
1,667
4,340
1,394
—
3,540
71
2,420
1,600
2,023
1,158
2,672
1,480
2,567
3,736
1,606
1,800
1,312
3,097
1,385
4,032
2,250
620
1,541
1,683
7,070
4,326
1,800
1,020
950
725
10,179
4,882
964
6,600
1,711
934
3,946
142
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Mississauga, ON . . . . . .
6,066
Missoula, MT . . . . . . . .
Mobberley, UK . . . . . . .
Monterey, CA . . . . . . . .
Montgomery, MD . . . . .
Montgomery Village,
MD . . . . . . . . . . . . . .
Montreal-Nord, QC . . .
Moorestown, NJ . . . . . .
Moose Jaw, SK . . . . . . .
Morton Grove, IL . . . . .
Murphy, TX . . . . . . . . .
Naperville, IL . . . . . . . .
Naperville, IL . . . . . . . .
Naples, FL . . . . . . . . . .
Nashville, TN . . . . . . . .
Nepean, ON . . . . . . . . .
New Braunfels, TX . . . .
Newbury, UK . . . . . . . .
Newmarket, UK . . . . . .
Newtown Square,
PA . . . . . . . . . . . . . . .
North Tonawanda,
NY . . . . . . . . . . . . . .
North Tustin, CA . . . . .
Oak Harbor, WA . . . . .
Oak Park, IL . . . . . . . . .
Oakdale, PA . . . . . . . . .
Oakland, CA . . . . . . . . .
Oakton, VA . . . . . . . . .
Oakville, ON . . . . . . . .
Oakville, ON . . . . . . . .
Oakville, ON . . . . . . . .
Ogden, UT . . . . . . . . . .
Okotoks, AB . . . . . . . . .
Orange, CA . . . . . . . . . .
Oshawa, ON . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
Ottawa, ON . . . . . . . . . .
—
—
—
—
—
11,903
—
1,973
—
—
—
—
55,188
—
5,491
—
—
—
—
—
—
—
—
—
—
—
5,618
9,189
4,812
—
18,824
36,000
6,698
9,668
18,152
20,738
7,212
13,711
10,377
13,702
17,456
2,809
2,044
9,559
4,517
5,876
8,898
Outremont, QC . . . . . . .
17,866
Overland Park, KS . . . .
—
Palo Alto, CA . . . . . . . .
25,050
Paramus, NJ . . . . . . . . .
—
Parkland, FL . . . . . . . . .
54,784
Parma, OH . . . . . . . . . .
—
2,548
550
5,146
6,440
6,482
3,530
4,407
2,060
582
1,900
1,950
1,550
1,540
8,989
3,900
1,575
1,200
2,850
4,071
15,158
7,490
26,665
29,101
83,642
18,246
23,719
51,628
12,973
19,374
19,182
12,237
28,204
119,398
35,788
5,770
19,800
12,796
11,902
2,904
563
3,279
2,549
12,311
7,214
7,965
5,205
1,885
864
811
2,195
1,435
7,188
3,911
1,110
10,408
1,498
2,441
2,724
553
5,563
6,443
6,482
4,291
4,637
2,095
621
1,900
1,950
1,550
1,593
9,088
3,900
1,697
2,729
3,065
4,398
17,886
8,050
29,527
31,647
95,953
24,699
31,454
56,798
14,819
20,238
19,993
14,432
29,586
126,487
39,699
6,758
28,679
14,079
14,016
3,821
2,968
8,637
7,438
9,510
10,011
3,715
12,519
3,548
4,284
2,350
3,841
7,300
25,666
11,568
1,716
5,682
1,239
2,596
2015
2005
2013
2013
2018
2013
2018
2010
2013
2010
2015
2012
2013
2015
2012
2015
2011
2015
2014
1989 85 King Street East
1998 3620 American Way
2007 Barclay Park, Hall Lane
2009 1110 Cass St.
1992 3701 International Dr
1993 19310 Club House Road
1988 6700, boulevard Gouin Est
2000 1205 N. Church St
2001 425 4th Avenue NW
2011 5520 N. Lincoln Ave.
2012 304 West FM 544
2013 1936 Brookdale Road
2002 535 West Ogden Avenue
2000 4800 Aston Gardens Way
1999 4206 Stammer Place
1988 1 Mill Hill Road
2009 2294 East Common Street
2016 370 London Road
2011 Jeddah Way
1,930
14,420
1,149
1,953
15,546
4,989
2013
2004 333 S. Newtown Street Rd.
1,172
2,880
739
1,250
1,865
3,877
2,250
1,252
2,134
1,271
360
714
8,021
841
1,341
3,454
4,256
2,103
2,963
1,561
3,663
3,411
724
818
2,809
1,156
746
1,176
6,746
1,540
—
2,840
4,880
1,533
7,297
18,059
7,667
40,383
11,925
47,508
37,576
7,382
29,963
13,754
6,700
20,943
65,234
7,570
15,425
23,309
39,141
18,421
26,424
18,170
30,633
28,335
4,710
2,165
27,299
9,758
7,800
12,764
45,981
16,269
39,639
35,728
111,481
9,185
600
933
448
2,640
880
3,465
2,851
922
3,314
1,646
936
1,908
3,238
985
2,720
3,181
2,962
4,969
3,754
2,828
—
6,228
623
1,484
3,021
1,129
1,142
1,663
11,155
1,663
3,072
1,855
5,181
701
1,172
3,044
739
1,250
1,865
4,114
2,393
1,346
2,280
1,361
360
780
8,021
957
1,469
3,760
4,477
2,294
3,196
1,751
3,663
3,684
774
727
3,020
1,290
803
1,298
7,098
1,670
24
2,986
4,904
1,533
7,897
18,828
8,115
43,023
12,805
50,736
40,284
8,210
33,131
15,310
7,636
22,785
68,472
8,439
18,017
26,184
41,882
23,199
29,945
20,808
30,633
34,290
5,283
3,740
30,109
10,753
8,885
14,305
56,784
17,802
42,687
37,437
116,638
9,886
143
517
4,067
669
10,749
724
12,439
9,511
2,113
8,518
3,474
2,880
4,375
—
2,167
2,719
7,627
7,129
3,852
4,611
3,069
5,208
6,357
1,375
1,040
8,289
2,564
2,129
2,340
6,385
3,918
10,156
8,755
23,531
631
2019
2013
2019
2012
2019
2013
2013
2013
2013
2013
2004
2015
2019
2013
2015
2015
2015
2015
2015
2015
2015
2015
2013
2013
2013
2013
2013
2015
2018
2012
2013
2013
2015
2019
2005 705 Sandra Lane
2000 12291 Newport Avenue
1998 171 SW 6th Ave
2004 1035 Madison Street
2017 7420 Steubenville Pike
1999 11889 Skyline Boulevard
1997 2863 Hunter Mill Road
1982 289 and 299 Randall Street
1994 25 Lakeshore Road West
1988 345 Church Street
1998 1340 N. Washington Blv.
2010 51 Riverside Gate
2018 630 The City Drive South
1991 649 King Street East
2001 110 Berrigan Drive
1966 2370 Carling Avenue
2005 751 Peter Morand Crescent
1989 1 Eaton Street
2008 691 Valin Street
2006 22 Barnstone Drive
2009 990 Hunt Club Road
2009 2 Valley Stream Drive
1995 1345 Ogilvie Road
1993 370 Kennedy Lane
1998 43 Aylmer Avenue
1998 1351 Hunt Club Road
1999 140 Darlington Private
1987 10 Vaughan Street
1976 1000, avenue Rockland
1998 9201 Foster
2007 2701 El Camino Real
1998 567 Paramus Road
2000 5999 University Drive
2016 11500 Huffman Road
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Paso Robles, CA . . . . . .
Peabody, MA . . . . . . . .
Pella, IA . . . . . . . . . . . .
Pembroke, ON . . . . . . .
Pennington, NJ . . . . . . .
Peoria, AZ . . . . . . . . . .
Pittsburgh, PA . . . . . . .
Placentia, CA . . . . . . . .
Plainview, NY . . . . . . .
—
5,892
—
—
—
—
—
—
—
Plano, TX . . . . . . . . . . .
28,960
Plano, TX . . . . . . . . . . .
Playa Vista, CA . . . . . .
Pleasanton, CA . . . . . . .
—
—
—
Port Perry, ON . . . . . . .
12,123
Port St. Lucie, FL . . . . .
—
Portage, MI . . . . . . . . . .
42,000
Princeton, NJ . . . . . . . .
Purley, UK . . . . . . . . . .
Puyallup, WA . . . . . . . .
Quebec City, QC . . . . .
Quebec City, QC . . . . .
Queensbury, NY . . . . . .
Rancho Cucamonga,
CA . . . . . . . . . . . . . .
Rancho Palos Verdes,
CA . . . . . . . . . . . . . .
Randolph, NJ . . . . . . . .
Red Deer, AB . . . . . . . .
Red Deer, AB . . . . . . . .
Redding, CA . . . . . . . . .
Regina, SK . . . . . . . . . .
Regina, SK . . . . . . . . . .
Regina, SK . . . . . . . . . .
Rehoboth Beach, DE . .
Reno, NV . . . . . . . . . . .
Ridgeland, MS . . . . . . .
Riviere-du-Loup,
—
—
—
8,325
12,294
—
—
—
29,300
12,551
14,770
26,887
6,218
6,204
15,477
—
—
—
1,770
2,250
870
1,931
1,380
766
1,580
8,480
3,066
3,120
1,750
1,580
—
3,685
8,700
2,857
1,730
7,365
1,150
2,420
3,300
1,260
8,630
16,071
6,716
9,427
27,620
21,796
18,017
17,076
19,901
59,950
15,390
40,531
—
26,788
47,230
59,848
30,888
35,161
20,776
21,977
28,325
21,744
1,480
10,055
5,450
1,540
1,247
1,199
4,474
1,485
1,244
1,539
960
1,060
520
60,034
46,934
19,283
22,339
36,857
21,148
21,036
24,053
24,248
11,440
7,675
QC . . . . . . . . . . . . . .
2,854
592
7,601
Riviere-du-Loup,
QC . . . . . . . . . . . . . .
12,164
Rocky Hill, CT . . . . . . .
Rohnert Park, CA . . . . .
Romeoville, IL . . . . . . .
Roseville, MN . . . . . . .
Roseville, CA . . . . . . . .
Roswell, GA . . . . . . . . .
Roswell, GA . . . . . . . . .
Sabre Springs, CA . . . .
Sacramento, CA . . . . . .
Sacramento, CA . . . . . .
—
—
—
—
—
—
—
—
—
—
Saint-Lambert, QC . . . .
34,002
Salinas, CA . . . . . . . . . .
Salisbury, UK . . . . . . . .
Salt Lake City, UT . . . .
San Antonio, TX . . . . .
San Antonio, TX . . . . .
San Antonio, TX . . . . .
San Diego, CA . . . . . . .
—
—
—
—
—
—
—
1,454
1,090
6,500
854
1,540
3,300
1,107
2,080
—
940
1,300
10,259
5,110
2,720
1,360
6,120
5,045
11,683
5,810
16,848
6,710
18,700
12,646
35,877
41,652
9,627
6,486
—
14,781
23,394
61,903
41,424
15,269
19,691
28,169
58,048
69,623
63,078
1,379
1,250
63
1,082
1,418
1,468
1,143
5,896
1,211
3,806
1,505
3,084
52,166
4,160
20,937
2,569
2,236
4,079
1,494
3,662
5,172
577
2,144
3,646
2,370
2,099
2,201
2,161
2,096
1,989
4,685
9,200
930
901
1,820
5,339
1,752
3,756
61,722
1,252
6,832
1,876
1,686
47,090
612
1,556
3,868
9,387
1,676
779
2,630
3,253
3,634
3,968
1,770
2,380
870
2,000
1,507
766
1,587
8,513
3,182
3,227
1,750
1,605
3,676
3,932
8,700
2,857
1,814
7,982
1,156
2,546
3,472
1,273
10,009
17,191
6,779
10,440
28,911
23,264
19,153
22,939
20,996
63,649
16,895
43,590
48,490
30,701
68,167
62,417
33,040
38,623
22,264
25,513
33,325
22,308
4,288
3,328
1,218
2,485
6,386
2,628
5,010
4,445
4,693
18,286
1,660
10,040
1,289
4,569
19,243
3,653
7,486
10,333
6,346
2,956
3,740
3,213
2002
2013
2012
2012
2011
2018
2013
2016
2013
2013
2016
2013
2016
2015
2008
2019
2011
2012
2010
2018
2018
2015
1998 1919 Creston Rd.
1994 73 Margin Street
2002 2602 Fifield Road
1999 1111 Pembroke Street West
2000 143 West Franklin Avenue
2014 13391 N 94th Drive
2009 900 Lincoln Club Dr.
1987 1180 N Bradford Avenue
2001 1231 Old Country Road
2006 4800 West Parker Road
2014 3690 Mapleshade Lane
2006 5555 Playa Vista Drive
2017 5700 Pleasant Hill Road
2009 15987 Simcoe Street
2010 10685 SW Stony Creek Way
2017 3951 W. Milham Ave.
2001 155 Raymond Road
2005 21 Russell Hill Road
1985 123 Fourth Ave. NW
2000 795, rue Alain
1987 650 and 700, avenue Murray
1999 27 Woodvale Road
2,084
11,595
3,388
2013
2001 9519 Baseline Road
5,450
1,718
1,339
1,282
4,474
1,678
1,333
1,663
993
1,060
520
63,680
49,126
21,290
24,457
39,018
23,051
22,936
28,614
33,415
12,370
8,576
16,003
11,141
3,727
4,460
—
6,144
5,411
4,673
6,994
4,762
3,384
2012
2013
2015
2015
2019
2013
2013
2015
2010
2004
2003
2004 5701 Crestridge Road
2006 648 Route 10 West
2004 3100 - 22 Street
2004 10 Inglewood Drive
2017 2150 Bechelli Lane
1999 3651 Albert Street
2004 3105 Hillsdale Street
1992 1801 McIntyre Street
1999 36101 Seaside Blvd
1998 5165 Summit Ridge Court
1997 410 Orchard Park
665
9,348
1,574
2015
1956 35 des Cedres
21,829
8,462
22,410
69,025
37,041
48,484
11,496
7,872
43,364
15,381
24,881
64,976
50,771
16,739
20,470
30,799
61,301
73,257
67,046
4,316
3,291
8,277
18,583
8,190
7,624
8,369
1,913
1,047
4,492
5,802
15,584
8,906
2,579
6,592
6,947
5,962
2,722
18,976
2015
2003
2005
2006
2013
2016
1997
2012
2016
2010
2013
2015
2016
2014
2011
2010
2017
2019
2012
1993 230-235 rue Des Chenes
1996 60 Cold Spring Rd.
1986 4855 Snyder Lane
2010 605 S Edward Dr.
2002 2555 Snelling Avenue, North
2000 5161 Foothills Boulevard
1999 655 Mansell Rd.
1997 75 Magnolia Street
2017 12515 Springhurst Drive
1978 6350 Riverside Blvd
2004 345 Munroe Street
1989 1705 Avenue Victoria
1990 1320 Padre Drive
2013 Shapland Close
1986 1430 E. 4500 S.
2011 2702 Cembalo Blvd
2015 11300 Wild Pine
2016 6870 Heuermann Road
2001 13075 Evening Creek Drive S
1,812
1,090
6,546
6,197
1,628
3,300
1,114
2,380
3,726
952
1,369
11,054
5,150
2,926
1,360
6,120
5,045
11,683
5,810
144
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
San Diego, CA . . . . . . .
—
San Diego, CA . . . . . . .
29,843
San Francisco, CA . . . .
San Francisco, CA . . . .
San Gabriel, CA . . . . . .
San Jose, CA . . . . . . . . .
San Jose, CA . . . . . . . . .
San Rafael, CA . . . . . . .
San Ramon, CA . . . . . .
Sandy Springs, GA . . . .
—
—
—
—
—
—
—
—
Santa Monica, CA . . . .
15,820
Santa Rosa, CA . . . . . . .
Saskatoon, SK . . . . . . .
Saskatoon, SK . . . . . . .
Schaumburg, IL . . . . . .
Scottsdale, AZ . . . . . . .
Scranton, PA . . . . . . . . .
Seal Beach, CA . . . . . . .
Seattle, WA . . . . . . . . .
—
3,836
13,372
—
—
—
—
—
3,000
4,179
5,920
11,800
3,120
3,280
11,900
1,620
8,700
2,214
5,250
2,250
981
1,382
2,460
2,500
875
6,204
5,190
Seattle, WA . . . . . . . . .
27,180
10,670
Seattle, WA . . . . . . . . .
Selbyville, DE . . . . . . .
Sevenoaks, UK . . . . . . .
Severna Park, MD . . . .
Shelby Township,
—
—
—
—
MI . . . . . . . . . . . . . . .
13,180
Shrewsbury, NJ . . . . . .
Sidcup, UK . . . . . . . . . .
Silver Spring, MD . . . .
Simi Valley, CA . . . . . .
Simi Valley, CA . . . . . .
Solihull, UK . . . . . . . . .
Solihull, UK . . . . . . . . .
Solihull, UK . . . . . . . . .
Sonning, UK . . . . . . . . .
Sonoma, CA . . . . . . . . .
Sonoma, CA . . . . . . . . .
Southlake, TX . . . . . . . .
Spokane, WA . . . . . . . .
Spokane, WA . . . . . . . .
St. Albert, AB . . . . . . . .
St. John’s, NL . . . . . . . .
Stittsville, ON . . . . . . . .
Stockport, UK . . . . . . . .
Stockton, CA . . . . . . . .
Strongsville, OH . . . . . .
Stuart, FL . . . . . . . . . . .
Studio City, CA . . . . . .
Suffield, CT . . . . . . . . .
Sugar Land, TX . . . . . .
Sugar Land, TX . . . . . .
Sun City, FL . . . . . . . . .
Sun City, FL . . . . . . . . .
Sun City West, AZ . . . .
Sunnyvale, CA . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9,894
5,449
4,227
—
—
—
—
—
—
—
—
20,609
23,220
—
—
Surrey, BC . . . . . . . . . .
6,316
1,150
750
6,181
—
1,040
2,120
7,446
—
3,200
5,510
5,070
3,571
1,851
5,644
1,100
2,820
6,207
3,200
2,580
1,145
706
1,175
4,369
2,280
1,113
5,276
4,006
4,409
960
4,272
6,521
5,040
1,250
5,420
3,605
27,164
40,639
91,639
77,214
15,566
46,823
27,647
27,392
72,223
8,360
28,340
26,273
13,905
17,609
22,863
3,890
10,504
72,954
9,350
37,291
19,887
25,912
40,240
67,623
26,344
38,116
56,570
—
16,664
51,406
43,297
26,053
10,585
42,155
18,400
21,890
56,675
25,064
25,342
17,863
11,765
17,397
25,018
5,983
10,882
23,796
25,307
27,694
31,423
60,493
48,476
50,923
21,778
41,682
18,818
28,669
42,559
105,203
87,615
16,656
50,748
32,779
31,122
82,161
9,808
29,415
29,756
15,246
19,278
24,103
5,366
11,199
75,763
11,067
38,879
22,621
26,760
46,113
73,529
27,712
40,421
62,316
61,104
18,455
59,832
49,574
28,699
11,867
46,527
22,155
25,041
64,299
26,083
25,724
20,953
12,552
19,193
27,531
7,105
11,538
24,526
26,558
30,086
32,422
67,033
54,788
56,357
22,940
44,397
21,040
1,521
1,920
13,564
10,401
1,135
3,925
5,198
3,964
9,954
1,454
1,091
3,525
1,407
1,763
1,277
1,476
695
2,876
1,726
1,618
2,737
867
6,340
5,944
1,438
2,333
6,330
64,540
1,889
8,426
6,660
2,969
1,421
4,828
3,764
3,158
7,624
1,019
382
3,192
829
1,884
2,864
1,214
656
730
1,360
2,392
999
6,540
6,439
5,782
1,162
2,715
2,466
3,016
4,179
5,920
11,800
3,165
3,280
11,966
1,854
8,716
2,220
5,266
2,292
1,047
1,476
2,497
2,500
875
6,271
5,199
10,700
1,153
769
6,648
38
1,110
2,148
8,030
3,436
3,298
5,510
5,453
3,894
1,990
6,100
1,109
2,827
6,207
3,200
2,580
1,247
748
1,263
4,720
2,372
1,113
5,276
4,115
4,409
960
4,272
6,648
5,388
1,250
5,420
3,849
145
6,231
—
17,446
14,542
4,208
12,727
5,773
4,342
13,500
3,133
6,912
4,508
3,431
4,307
6,501
1,458
666
21,133
3,888
13,281
3,336
6,298
12,282
10,854
6,384
9,371
17,441
1,466
5,390
10,275
12,641
7,375
1,153
11,020
7,932
3,787
3,184
7,538
6,597
5,779
2,009
4,306
7,480
2,223
651
223
7,094
826
8,673
8,760
13,348
12,170
5,012
11,522
6,563
2013
2019
2016
2016
2013
2012
2016
2016
2016
2012
2013
2016
2013
2013
2013
2008
2019
2013
2010
2010
2015
2010
2012
2016
2013
2010
2012
2016
2013
2016
2012
2013
2015
2013
2005
2016
2019
2013
2013
2014
2015
2013
2013
2010
2019
2019
2013
2019
2011
2017
2015
2015
2012
2012
2013
2003 810 Turquoise Street
2017 955 Grand Ave
1998 1550 Sutter Street
1923 1601 19th Avenue
2005 8332 Huntington Drive
2002 500 S Winchester Boulevard
2002 4855 San Felipe Road
2001 111 Merrydale Road
1992 9199 Fircrest Lane
1997 5455 Glenridge Drive NE
2004 1312 15th Street
2001 4225 Wayvern Drive
1999 220 24th Street East
2004 1622 Acadia Drive
2001 790 North Plum Grove Road
1998 9410 East Thunderbird Road
2014 1651 Dickson Avenue
2004 3850 Lampson Avenue
1962 11501 15th Ave NE
2005 805 4th Ave N
1995 11039 17th Avenue
2008 21111 Arrington Dr
2009 64 - 70 Westerham Road
1997 43 W McKinsey Road
2006 46471 Hayes Road
2000 5 Meridian Way
2000 Frognal Avenue
2018 2201 Colston Drive
2009 190 Tierra Rejada Road
2003 5300 E Los Angeles Avenue
2009 1270 Warwick Road
2007 1 Worcester Way
2016 Warwick Road
2009 Old Bath Rd.
1988 800 Oregon St.
2005 91 Napa Road
2008 101 Watermere Drive
2001 3117 E. Chaser Lane
1999 1110 E. Westview Ct.
2005 78C McKenney Avenue
2005 64 Portugal Cove Road
1996 1340 - 1354 Main Street
2008 1 Dairyground Road
1988 6725 Inglewood
2017 15100 Howe Road
2019 2625 SE Cove Road
2004 4610 Coldwater Canyon
Avenue
1998 7 Canal Road
1996 1221 Seventh St
2015 744 Brooks Street
1995 231 Courtyards
1999 1311 Aston Gardens Court
1998 13810 West Sandridge Drive
2002 1039 East El Camino Real
2000 16028 83rd Avenue
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Surrey, BC . . . . . . . . . .
15,386
Sutton, UK . . . . . . . . . .
Suwanee, GA . . . . . . . .
Sway, UK . . . . . . . . . . .
—
—
—
Swift Current, SK . . . . .
1,790
Sylvania, OH . . . . . . . .
Syracuse, NY . . . . . . . .
Tacoma, WA . . . . . . . .
—
—
—
Tampa, FL . . . . . . . . . .
69,330
Tampa, FL . . . . . . . . . .
The Woodlands, TX . . .
Toledo, OH . . . . . . . . . .
Toms River, NJ . . . . . . .
Tonawanda, NY . . . . . .
Tonawanda, NY . . . . . .
Toronto, ON . . . . . . . . .
Toronto, ON . . . . . . . . .
Toronto, ON . . . . . . . . .
Toronto, ON . . . . . . . . .
Toronto, ON . . . . . . . . .
Toronto, ON . . . . . . . . .
Toronto, ON . . . . . . . . .
Toronto, ON . . . . . . . . .
Toronto, ON . . . . . . . . .
Toronto, ON . . . . . . . . .
Torrance, CA . . . . . . . .
Tucson, AZ . . . . . . . . . .
Tulsa, OK . . . . . . . . . . .
Tulsa, OK . . . . . . . . . . .
Turlock, CA . . . . . . . . .
Twinsburg, OH . . . . . . .
Upland, CA . . . . . . . . . .
Upper Providence,
PA . . . . . . . . . . . . . . .
Upper St Claire, PA . . .
Vacaville, CA . . . . . . . .
Vallejo, CA . . . . . . . . . .
Vallejo, CA . . . . . . . . . .
Vancouver, WA . . . . . .
Vancouver, BC . . . . . . .
Vankleek Hill, ON . . . .
Vaudreuil, QC . . . . . . .
Venice, FL . . . . . . . . . .
Vero Beach, FL . . . . . .
Victoria, BC . . . . . . . . .
Victoria, BC . . . . . . . . .
Victoria, BC . . . . . . . . .
Virginia Water, UK . . .
Voorhees, NJ . . . . . . . .
Wall, NJ . . . . . . . . . . . .
Walnut Creek, CA . . . .
Walnut Creek, CA . . . .
Washington, DC . . . . . .
Watchung, NJ . . . . . . . .
Waukee, IA . . . . . . . . . .
Wayland, MA . . . . . . . .
Webster Groves, MO . .
—
—
—
—
—
—
17,976
8,049
12,756
36,974
7,665
4,701
7,545
17,746
5,807
31,276
—
—
—
—
—
—
—
—
—
—
—
—
—
—
665
8,012
64,425
—
6,877
6,340
7,109
—
—
—
—
—
—
—
—
—
—
4,552
4,096
1,560
4,145
492
1,205
1,385
4,170
4,910
3,451
480
2,040
1,610
1,534
2,425
2,927
5,082
2,008
5,132
2,480
1,079
2,513
3,400
1,447
5,304
3,497
830
1,330
1,500
2,266
1,035
3,160
1,900
1,102
900
4,000
2,330
1,820
7,282
389
1,852
6,820
2,930
2,856
3,681
2,476
7,106
3,700
1,650
3,700
22,338
14,532
11,538
15,508
10,119
12,024
11,555
73,377
114,148
25,775
12,379
47,129
34,627
13,264
12,433
20,713
25,493
19,620
41,657
7,571
5,364
19,695
32,757
3,918
53,488
73,138
6,179
21,285
20,861
12,737
8,302
42,596
28,195
13,455
17,100
18,000
15,407
19,042
6,572
2,960
14,214
100,501
40,070
18,038
15,774
15,379
29,937
24,312
25,350
12,467
2,939
2,444
1,531
2,261
1,185
—
863
17,171
7,556
—
557
4,107
1,428
1,252
1,428
4,001
3,119
1,286
5,581
1,099
731
2,250
3,552
673
8,935
186
4,055
4,679
4,285
1,122
543
68
404
1,623
3,051
4,463
1,224
1,052
1,440
541
1,686
5,560
25,748
1,833
1,700
2,265
7,580
2,503
2,985
2,931
4,905
4,408
1,560
4,509
531
1,205
1,385
4,170
5,073
3,451
480
2,144
1,695
1,534
2,425
3,157
5,448
2,113
5,484
2,662
1,152
2,718
3,635
1,572
5,675
3,497
830
1,362
1,614
2,266
1,035
3,160
1,906
1,153
900
4,030
2,330
1,821
7,661
421
1,924
6,958
2,930
3,049
3,931
2,647
5,856
3,854
1,694
3,808
24,924
16,664
13,069
17,405
11,265
12,024
12,418
90,548
121,541
25,775
12,936
51,132
35,970
14,516
13,861
24,484
28,246
20,801
46,886
8,488
6,022
21,740
36,074
4,466
62,052
73,324
10,234
25,932
25,032
13,859
8,845
42,664
28,593
15,027
20,151
22,433
16,631
20,093
7,633
3,469
15,828
105,923
65,818
19,678
17,224
17,473
38,767
26,661
28,291
15,290
10,320
100,890
18,143
10,320
119,033
4,000
1,920
1,870
1,207
1,790
69,154
24,880
31,878
27,462
15,425
3,222
1,979
790
2,349
2,637
4,004
2,055
1,870
1,340
1,801
72,372
26,724
32,668
29,678
18,051
146
8,226
1,396
3,743
3,692
2,713
270
743
17,187
23,400
65
3,351
16,567
8,532
820
852
4,292
6,299
3,744
12,124
2,084
1,488
4,677
9,152
1,361
17,963
6,464
2,031
8,192
8,129
263
569
6,592
3,475
4,186
7,599
8,210
4,928
5,810
5,714
960
2,837
22,077
24,423
5,414
4,936
2,713
10,904
4,867
6,175
4,571
20,636
16,427
5,918
5,905
7,435
5,039
2013
2015
2012
2014
2013
2019
2019
2016
2015
2019
2011
2010
2010
2019
2019
2015
2015
2015
2015
2015
2013
2013
2013
2013
2013
2016
2012
2010
2010
2019
2019
2015
2013
2013
2005
2005
2010
2010
2015
2013
2015
2015
2007
2013
2013
2015
2012
2012
2011
2013
2016
2013
2011
2012
2013
2011
1987 15501 16th Avenue
2016 123 Westmead Road
2000 4315 Johns Creek Parkway
2008 Sway Place
2001 301 Macoun Drive
2019 4120 King Road
2011 6715 Buckley Road
1987 8201 6th Avenue
2001 12951 W Linebaugh Avenue
2019 11330 Countryway Blvd
1999 7950 Bay Branch Dr
1985 3501 Executive Parkway
2005 1587 Old Freehold Rd
2011 300 Fries Road
2009 285 Crestmount Avenue
1900 54 Foxbar Road
1988 645 Castlefield Avenue
1999 4251 Dundas Street West
1964 10 William Morgan Drive
1971 123 Spadina Road
1982 25 Centennial Park Road
2002 305 Balliol Street
1973 1055 and 1057 Don Mills Road
1987 1340 York Mills Road
1988 8 The Donway East
2016 25535 Hawthorne Boulevard
1997 5660 N. Kolb Road
1986 8887 South Lewis Ave
1984 9524 East 71st St
2001 3791 Crowell Road
2016 3092 Kendal Lane
2014 2419 North Euclid Avenue
2015 1133 Black Rock Road
2005 500 Village Drive
1987 799 Yellowstone Dr.
1989 350 Locust Dr.
1990 2261 Tuolumne
2006 10011 NE 118th Ave
1974 2803 West 41st Avenue
1987 48 Wall Street
1975 333 rue Querbes
2002 1000 Aston Gardens Drive
2003 7955 16th Manor
1974 3000 Shelbourne Street
1988 3051 Shelbourne Street
1990 3965 Shelbourne Street
2002 Christ Church Road
2013 311 Route 73
2003 2021 Highway 35
1998 2175 Ygnacio Valley Road
1988 1580 Geary Road
2004 5111 Connecticut Avenue NW
2000 680 Mountain Boulevard
2007 1650 SE Holiday Crest Circle
1997 285 Commonwealth Road
2012 45 E Lockwood Avenue
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Welland, ON . . . . . . . . .
6,027
Wellesley, MA . . . . . . .
West Babylon, NY . . . .
West Bloomfield, MI . .
West Hills, CA . . . . . . .
West Seneca, NY . . . . .
West Seneca, NY . . . . .
—
—
—
—
—
—
West Vancouver, BC . .
17,934
Westbourne, UK . . . . . .
Westford, MA . . . . . . . .
Weston, MA . . . . . . . . .
Westworth Village,
TX . . . . . . . . . . . . . . .
Weybridge, UK . . . . . .
Weymouth, UK . . . . . .
White Oak, MD . . . . . .
Whitesboro, NY . . . . . .
Willoughby, OH . . . . . .
Wilmington, DE . . . . . .
Winchester, UK . . . . . .
Winnipeg, MB . . . . . . .
Winnipeg, MB . . . . . . .
Winnipeg, MB . . . . . . .
Woking, UK . . . . . . . . .
Wolverhampton, UK . .
Woodland Hills, CA . . .
Yonkers, NY . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
11,736
25,459
12,328
—
—
—
—
Yorkton, SK . . . . . . . . .
3,108
Seniors Housing
983
4,690
3,960
1,040
2,600
1,232
1,035
7,059
5,441
1,440
1,160
2,060
7,899
2,591
2,304
1,575
1,298
1,040
6,009
1,960
1,276
1,317
2,990
2,941
3,400
3,962
463
7,530
77,462
47,085
12,300
7,521
6,600
7,438
28,155
41,420
32,607
6,200
31,296
48,240
16,551
24,768
11,873
10,514
23,338
29,405
38,612
21,732
15,609
12,523
8,922
20,478
50,107
8,760
793
347
2,440
905
1,714
634
604
4,380
8,236
400
1,555
64
4,888
1,841
2,991
789
662
2,208
3,178
4,839
2,563
2,937
1,032
1,393
1,383
2,314
886
1,019
4,690
3,960
1,100
2,658
1,232
1,035
7,545
5,854
1,468
1,160
2,060
8,496
2,824
2,358
1,575
1,298
1,176
6,471
2,206
1,493
1,420
3,118
3,170
3,447
3,956
496
8,287
77,809
49,525
13,145
9,177
7,234
8,042
32,049
49,243
32,979
7,755
31,360
52,531
18,159
27,705
12,662
11,176
25,410
32,121
43,205
24,078
18,443
13,427
10,086
21,814
52,427
9,613
1,338
13,734
11,042
3,320
2,957
546
546
8,354
11,299
5,100
1,879
4,169
14,169
2,702
6,232
737
688
5,951
8,270
13,892
5,682
3,740
786
3,591
5,855
12,283
2,348
2015
2015
2013
2013
2013
2019
2019
2013
2013
2015
2013
2014
2013
2014
2013
2019
2019
2013
2012
2013
2013
2015
2016
2013
2013
2013
2013
2006 110 First Street
2012 23 & 27 Washington Street
2003 580 Montauk Highway
2000 7005 Pontiac Trail
2002 9012 Topanga Canyon Road
2000 1187 Orchard Park Drive
2007 2341 Union Road
1987 2095 Marine Drive
2006 16-18 Poole Road
2013 108 Littleton Road
1998 135 North Avenue
2014 25 Leonard Trail
2008 Ellesmere Road
2013 Cross Road
2002 11621 New Hampshire Avenue
2015 4770 Clinton Road
2016 35100 Chardon Road
2004 2215 Shipley Street
2010 Stockbridge Road
1999 857 Wilkes Avenue
1988 3161 Grant Avenue
1999 125 Portsmouth Boulevard
2017 12 Streets Heath, West End
2008 73 Wergs Road
2005 20461 Ventura Boulevard
2005 65 Crisfield Street
2001 94 Russell Drive
Operating Total
. . .
$1,990,607
$1,383,927
$13,886,675
$1,879,176
$1,469,078
$15,680,700
$3,194,057
147
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2019
(Dollars in thousands)
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Triple-net:
Abilene, TX . . . . . . . . .
$
— $
Abilene, TX . . . . . . . . .
Aboite Twp, IN . . . . . .
Agawam, MA . . . . . . . .
Akron, OH . . . . . . . . . .
Alexandria, VA . . . . . .
Alhambra, CA . . . . . . .
Allen Park, MI . . . . . . .
Allentown, PA . . . . . . .
Allentown, PA . . . . . . .
Ames, IA . . . . . . . . . . .
Ann Arbor, MI . . . . . . .
Annandale, VA . . . . . .
Arlington, VA . . . . . . .
Asheboro, NC . . . . . . .
Asheville, NC . . . . . . . .
Asheville, NC . . . . . . . .
Atchison, KS . . . . . . . .
Aurora, CO . . . . . . . . .
Austin, TX . . . . . . . . . .
Avon, IN . . . . . . . . . . .
Avon, IN . . . . . . . . . . .
Avon, CT . . . . . . . . . . .
Azusa, CA . . . . . . . . . .
Baldwin City, KS . . . . .
Baltimore, MD . . . . . . .
Baltimore, MD . . . . . . .
Barberton, OH . . . . . . .
Bartlesville, OK . . . . . .
Battle Creek, MI
. . . . .
Bay City, MI . . . . . . . .
Bedford, PA . . . . . . . . .
Belmont, CA . . . . . . . .
Belvidere, NJ . . . . . . . .
Benbrook, TX . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Berkeley, CA . . . . . . . .
11,947
Bethel Park, PA . . . . . .
Bethel Park, PA . . . . . .
Bethesda, MD . . . . . . .
Bethlehem, PA . . . . . . .
Bethlehem, PA . . . . . . .
Beverly Hills, CA . . . .
Bexleyheath, UK . . . . .
Bingham Farms, MI . . .
Birmingham, UK . . . . .
Birmingham, UK . . . . .
Birmingham, UK . . . . .
—
—
—
—
—
—
—
—
—
—
—
950
990
1,770
880
633
2,452
600
1,767
494
1,491
330
2,172
1,687
4,016
290
204
280
140
2,440
1,691
1,830
900
2,132
570
190
4,306
3,069
1,307
100
857
633
637
3,000
2,001
1,550
3,050
1,700
1,008
2,218
1,191
1,143
6,000
3,750
781
1,647
1,591
1,462
$
20,987
$ 11,660
$
8,187
19,930
16,112
3,003
6,829
6,305
5,027
11,849
4,823
8,870
11,127
18,980
8,805
5,032
3,489
1,955
5,610
28,172
5,006
14,470
19,444
7,627
3,141
4,810
4,305
3,150
9,313
1,380
1,822
2,620
4,434
23,526
26,191
13,553
32,677
16,007
6,742
6,871
16,892
13,592
13,385
10,807
15,676
14,853
19,092
9,056
1,089
1,601
2,134
—
—
8,847
—
—
—
—
—
—
—
261
—
518
23
—
—
—
—
—
7,429
55
—
—
—
—
—
—
—
1,653
—
2,747
4,982
—
—
—
—
—
—
1,101
—
1,246
1,564
794
148
950
990
1,770
880
633
2,452
600
1,767
494
1,491
330
2,172
1,687
4,016
290
204
280
140
2,440
1,691
1,830
900
2,132
570
190
4,306
3,069
1,307
100
857
633
637
3,000
2,001
1,550
3,050
1,700
1,008
2,218
1,191
1,143
6,000
4,034
781
1,771
1,712
1,572
$
32,647
$
9,276
21,531
18,246
3,003
6,829
15,152
5,027
11,849
4,823
8,870
11,127
18,980
8,805
5,293
3,489
2,473
5,633
28,172
5,006
14,470
19,444
7,627
10,570
4,865
4,305
3,150
9,313
1,380
1,822
2,620
4,434
25,179
26,191
16,300
37,659
16,007
6,742
6,871
16,892
13,592
13,385
11,624
15,676
15,975
20,535
9,740
3,442
1,262
5,178
8,476
121
267
2,322
199
457
195
2,314
463
716
339
2,265
1,938
1,086
634
12,556
257
3,942
2,896
359
3,172
560
181
141
356
860
99
115
201
6,778
771
3,242
5,614
4,712
276
259
620
502
1,761
1,567
597
1,964
2,488
1,216
2014
2014
2010
2002
2018
2018
2011
2018
2018
2018
2010
2018
2018
2018
2003
1999
2003
2015
2006
2018
2010
2014
2018
1998
2015
2018
2018
2018
1996
2018
2018
2018
2011
2019
2011
2016
2007
2018
2018
2018
2018
2014
2014
2018
2015
2015
2015
1998 6565 Central Park Boulevard
1985 1250 East N 10th Street
2008 611 W County Line Rd South
1993 1200 Suffield St.
1999 171 North Cleveland
Massillon Road
1964 1510 Collingwood Road
1923 1118 N. Stoneman Ave.
1960 9150 Allen Road
1995 5151 Hamilton Boulevard
1988 1265 Cedar Crest Boulevard
1999 1325 Coconino Rd.
1997 4701 East Huron River Drive
2002 7104 Braddock Road
1976 550 South Carlin Southprings
Road
1998 514 Vision Dr.
1999 4 Walden Ridge Dr.
1992 308 Overlook Rd.
2001 1301 N 4th St.
2007 14211 E. Evans Ave.
2000 11630 Four Iron Drive
2004 182 S Country RD. 550E
2013 10307 E. CR 100 N
2000 100 Fisher Drive
1953 125 W. Sierra Madre Ave.
2000 321 Crimson Ave
1978 6600 Ridge Road
1996 4669 Falls Road
1979 85 Third Street
1995 5420 S.E. Adams Blvd.
1965 200 Roosevelt Avenue East
1968 800 Mulholland Street
1965 136 Donahoe Manor Road
1971 1301 Ralston Avenue
2009 1 Brookfield Ct
1984 4242 Bryant Irvin Road
1966 2235 Sacramento Street
2009 5785 Baptist Road
1986 60 Highland Road
1974 6530 Democracy Boulevard
1979 2021 Westgate Drive
1982 2029 Westgate Drive
2000 220 N Clark Drive
1996 35 West Street
1999 24005 West 13 Mile Road
2010 Clinton Street, Winson Green
2010 Braymoor Road, Tile Cross
2010 Clinton Street, Winson Green
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Birmingham, UK . . . . .
Bloomington, IN . . . . .
Boca Raton, FL . . . . . .
Boca Raton, FL . . . . . .
Boulder, CO . . . . . . . . .
Bournemouth, UK . . . .
Boynton Beach, FL . . .
Boynton Beach, FL . . .
Bracknell, UK . . . . . . .
Bradenton, FL . . . . . . .
Bradenton, FL . . . . . . .
Braintree, MA . . . . . . .
Braintree, UK . . . . . . . .
Brecksville, OH . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Brentwood, UK . . . . . .
34,515
Brick, NJ . . . . . . . . . . .
Bridgewater, NJ . . . . . .
Bristol, UK . . . . . . . . . .
Bristol, UK . . . . . . . . . .
—
—
—
—
Brooks, AB . . . . . . . . .
1,747
Bucyrus, OH . . . . . . . .
Burleson, TX . . . . . . . .
Burlington, NC . . . . . .
Burlington, NC . . . . . .
Burlington, NJ . . . . . . .
Burlington, NJ . . . . . . .
Burnaby, BC . . . . . . . .
Calgary, AB . . . . . . . . .
Calgary, AB . . . . . . . . .
Camberley, UK . . . . . .
Camp Hill, PA . . . . . . .
Canonsburg, PA . . . . . .
Canton, OH . . . . . . . . .
Canton, MI . . . . . . . . . .
Cape Coral, FL . . . . . . .
—
—
—
—
—
—
7,292
14,841
24,614
—
—
—
—
—
—
Cape Coral, FL . . . . . . .
8,135
Cape May Court House,
NJ . . . . . . . . . . . . . . .
Carlisle, PA . . . . . . . . .
Carmel, IN . . . . . . . . . .
Carmel, IN . . . . . . . . . .
Carmel, IN . . . . . . . . . .
Carrollton, TX . . . . . . .
Cary, NC . . . . . . . . . . .
Castleton, IN . . . . . . . .
Cedar Grove, NJ . . . . .
Cedar Rapids, IA . . . . .
Centerville, OH . . . . . .
Chagrin Falls, OH . . . .
Chambersburg, PA . . . .
Chapel Hill, NC . . . . . .
Charleston, SC . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,184
10,085
852
1,274
10,847
1,324
2015
1997 122 Tile Cross Road, Garretts
670
2,200
2,826
3,601
2,589
2,138
2,804
4,081
252
480
170
—
990
8,537
1,290
1,800
4,256
2,270
376
1,119
670
280
460
1,700
1,170
7,623
2,341
4,569
9,974
517
911
300
1,399
530
760
1,440
978
1,700
1,583
17,423
4,976
4,063
21,371
15,984
10,204
14,226
11,470
3,298
9,953
7,157
13,296
19,353
45,869
25,247
31,810
17,962
13,030
4,951
2,612
13,985
4,297
5,467
12,554
19,205
13,844
42,768
70,199
39,168
3,597
4,830
2,098
16,971
3,281
18,868
17,002
8,207
19,491
6,071
—
2,296
2,010
1,500
920
2,850
596
920
832
1,373
354
1,333
19,549
4,350
15,137
27,737
9,354
3,960
10,841
8,864
2,646
5,556
—
—
—
—
—
—
—
217
—
110
1,290
1,005
—
4,443
1,330
1,678
—
—
370
—
2,457
835
53
501
172
1,463
3,122
5,069
1,984
—
—
—
—
—
106
1,775
—
1
—
—
—
1,051
—
20
—
—
—
—
1,034
—
670
2,200
2,826
3,601
2,589
2,138
2,804
4,246
252
480
170
—
990
9,182
1,290
1,800
4,256
2,270
401
1,119
670
280
460
1,700
1,170
8,139
2,500
4,878
10,376
517
911
300
1,399
530
760
1,440
978
1,700
1,583
17,423
4,976
4,063
21,371
15,984
10,204
14,226
11,522
3,298
10,063
8,447
14,301
19,353
49,667
26,577
33,488
17,962
13,030
5,296
2,612
16,442
5,132
5,520
13,055
19,377
14,791
45,731
74,959
40,750
3,597
4,830
2,098
16,971
3,281
18,974
18,777
8,207
19,492
6,071
2,146
247
180
870
44
425
541
713
2,068
1,978
8,444
2,010
2,872
3,992
5,851
7,340
411
183
768
122
3,430
2,157
2,400
3,652
4,657
2,177
6,386
10,375
2,725
142
207
1,165
644
1,551
3,788
2,784
331
2,521
263
2015
2018
2018
2018
2019
2018
2018
2014
1996
2012
1997
2014
2014
2016
2011
2011
2015
2017
2014
2018
2011
2003
2003
2011
2011
2014
2014
2014
2016
2018
2018
1998
2018
2002
2012
2014
2018
2015
2018
Green
2015 363 S. Fieldstone Boulevard
1994 7225 Boca Del Mar Drive
1984 375 Northwest 51st Street
1990 2800 Palo Parkway
2017 Poole Lane
1991 3600 Old Boynton Road
1984 3001 South Congress Avenue
2017 Bagshot Road
1995 6101 Pointe W. Blvd.
2000 2800 60th Avenue West
1968 1102 Washington St.
2009 Meadow Park Tortoiseshell
Way
2011 8757 Brecksville Road
2013 London Road
2000 458 Jack Martin Blvd.
2001 680 US-202/206 North
2017 339 Badminton Road
2019 Avon Valley Care Home,
Tenniscourt Road
2000 951 Cassils Road West
1976 1170 West Mansfield Street
1988 300 Huguley Boulevard
2000 3619 S. Mebane St.
1997 3615 S. Mebane St.
1965 115 Sunset Road
1994 2305 Rancocas Road
2006 7195 Canada Way
1971 1729-90th Avenue SW
2001 500 Midpark Way SE
2017 Pembroke Broadway
1970 1700 Market Street
1986 113 West McMurray Road
1998 1119 Perry Dr., N.W.
2005 7025 Lilley Road
2000 911 Santa Barbara Blvd.
2009 831 Santa Barbara Boulevard
1990 144 Magnolia Drive
1987 940 Walnut Bottom Road
2015 12315 Pennsylvania Street
1985 12999 North Pennsylvania
Street
—
2,296
82
2018
1985 12999 North Pennsylvania
2,010
1,500
920
2,850
596
920
832
1,373
354
1,333
19,549
5,401
15,137
27,757
9,354
3,960
10,841
8,864
3,680
5,556
1,724
2,827
2,343
6,753
348
228
431
370
1,587
220
2014
1998
2014
2011
2018
2018
2018
2018
2002
2018
Street
2016 2645 East Trinity Mills Road
1996 111 MacArthur
2013 8405 Clearvista Lake
1970 536 Ridge Road
1965 1940 1st Avenue Northeast
1997 1001 E. Alex Bell Road
1999 8100 East Washington Street
1976 1070 Stouffer Avenue
1997 100 Lanark Rd.
1982 1137 Sam Rittenberg
Boulevard
149
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Charleston, WV . . . . . .
Chatham, VA . . . . . . . .
Cherry Hill, NJ . . . . . . .
Chester, VA . . . . . . . . .
Chevy Chase, MD . . . .
Chickasha, OK . . . . . . .
Chillicothe, OH . . . . . .
Cincinnati, OH . . . . . . .
Citrus Heights, CA . . . .
Claremore, OK . . . . . . .
Clarksville, TN . . . . . .
Clayton, NC . . . . . . . . .
Cleburne, TX . . . . . . . .
Clevedon, UK . . . . . . .
Cloquet, MN . . . . . . . .
Cobham, UK . . . . . . . .
Colchester, CT . . . . . . .
Colorado Springs,
CO . . . . . . . . . . . . . .
Colorado Springs,
CO . . . . . . . . . . . . . .
Columbia, TN . . . . . . .
Columbia, SC . . . . . . . .
Columbia Heights,
MN . . . . . . . . . . . . . .
Columbus, IN . . . . . . . .
Concord, NC . . . . . . . .
Concord, NH . . . . . . . .
Congleton, UK . . . . . . .
Conroe, TX . . . . . . . . .
Coppell, TX . . . . . . . . .
Corby, UK . . . . . . . . . .
Costa Mesa, CA . . . . . .
Coventry, UK . . . . . . . .
Crawfordsville, IN . . . .
Dallastown, PA . . . . . .
Danville, VA . . . . . . . .
Danville, VA . . . . . . . .
Daphne, AL . . . . . . . . .
Davenport, IA . . . . . . .
Davenport, IA . . . . . . .
Dayton, OH . . . . . . . . .
Dearborn Heights,
MI
. . . . . . . . . . . . . .
Decatur, GA . . . . . . . . .
Delray Beach, FL . . . . .
Delray Beach, FL . . . . .
Denton, TX . . . . . . . . .
Denver, CO . . . . . . . . .
Derby, UK . . . . . . . . . .
Dover, DE . . . . . . . . . .
Dublin, OH . . . . . . . . .
Dubuque, IA . . . . . . . .
Dunedin, FL . . . . . . . . .
Durham, NC . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Eagan, MN . . . . . . . . . .
16,186
440
17,575
306
440
17,881
4,158
2011
1998 1000 Association Drive,
320
1,416
1,320
4,515
85
1,145
912
5,207
155
330
520
520
2,838
340
9,808
980
14,039
9,874
18,127
8,688
1,395
8,997
14,014
31,725
1,427
2,292
15,733
5,369
16,927
4,660
24,991
4,860
4,280
62,168
1,730
341
1,699
825
610
550
1,760
2,036
980
1,550
1,228
2,050
1,962
720
1,377
410
240
2,880
566
910
1,188
1,197
1,413
1,158
2,125
1,760
3,222
2,359
600
1,393
568
1,883
1,476
2,260
25,493
2,295
2,320
14,175
3,190
3,921
43,179
5,120
7,771
8,386
5,144
19,969
13,830
17,239
16,802
3,954
8,436
8,670
2,017
20,043
5,414
3,396
13,800
13,576
11,844
8,305
24,811
8,539
22,266
2,912
8,904
13,329
10,659
31,643
—
—
—
—
—
—
—
—
6,130
—
—
—
1,493
120
2,629
544
—
693
—
—
163
—
270
634
540
—
169
672
969
1,193
1,426
—
829
—
384
—
—
—
—
—
—
—
175
—
441
141
—
—
—
2,587
300
320
1,416
1,320
4,515
85
1,145
912
5,207
155
330
520
520
3,052
340
10,549
980
14,039
9,874
18,127
8,688
1,395
8,997
14,014
31,725
7,557
2,292
15,733
5,369
18,206
4,780
26,879
5,404
2,222
408
2,844
338
863
348
550
1,172
1,783
1,267
2,204
1,814
2,558
1,104
4,507
1,636
North Gate Business Park
2009 100 Rorer Street
1997 2700 Chapel Avenue West
2009 12001 Iron Bridge Road
1964 8700 Jones Mill Road
1996 801 Country Club Rd.
1977 1058 Columbus Street
2000 6870 Clough Pike
1988 7807 Upland Way
1996 1605 N. Hwy. 88
1998 2183 Memorial Dr.
2013 84 Johnson Estate Road
2007 402 S Colonial Drive
1994 18/19 Elton Road
2006 705 Horizon Circle
2013 Redhill Road
1986 59 Harrington Court
2014
2018
2014
2018
1996
2018
2018
2018
1996
1998
2014
2006
2014
2011
2013
2011
4,280
62,168
6,926
2015
2008 1605 Elm Creek View
26,186
2,295
2,320
14,338
3,190
4,191
43,813
5,507
7,771
8,555
5,840
20,938
14,875
18,665
16,802
4,783
8,436
9,054
2,017
20,043
5,414
3,396
13,800
13,576
11,844
8,480
24,811
8,884
22,407
2,912
8,904
13,329
13,246
31,943
1,730
341
1,699
825
610
550
1,760
2,189
980
1,550
1,204
2,050
2,110
720
1,377
410
240
2,880
566
910
1,188
1,197
1,413
1,158
2,125
1,760
3,222
2,455
600
1,393
568
1,883
1,476
2,260
150
2,760
1,271
100
3,117
852
1,871
10,199
744
2,193
1,609
418
5,806
1,885
2,794
661
2,072
1,352
1,884
81
766
227
157
505
537
482
2,060
912
963
5,331
139
332
500
12,451
3,572
2016
1999
2018
2011
2010
2003
2011
2014
2009
2012
2017
2011
2015
2014
2018
2003
2014
2012
2018
2018
2018
2018
2018
2018
2018
2010
2018
2014
2011
2018
2018
2018
1997
2015
2016 2818 Grand Vista Circle
1999 5011 Trotwood Ave.
1968 2601 Forest Drive
2009 3807 Hart Boulevard
1998 2564 Foxpointe Dr.
1997 2452 Rock Hill Church Rd.
1994 239 Pleasant Street
1994 Rood Hill
2010 903 Longmire Road
2013 1530 East Sandy Lake Road
1997 25 Rockingham Road
1965 350 West Bay St
2014 Banner Lane, Tile Hill
2013 517 Concord Road
1979 100 West Queen Street
1998 149 Executive Ct.
1996 508 Rison Street
2001 27440 County Road 13
1966 815 East Locust Street
2008 3800 Commerce Blvd.
1977 1974 North Fairfield Road
1964 26001 Ford Road
1977 2722 North Decatur Road
1998 16150 Jog Road
1998 16200 Jog Road
2011 2125 Brinker Rd
1988 290 South Monaco Parkway
2015 Rykneld Road
1984 1080 Silver Lake Blvd.
2014 4075 W. Dublin-Granville
Road
1971 901 West Third Street
1983 870 Patricia Avenue
1999 4434 Ben Franklin Blvd.
2004 3810 Alder Avenue
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
East Brunswick, NJ . . .
Eastbourne, UK . . . . . .
Easton, PA . . . . . . . . . .
Easton, PA . . . . . . . . . .
Easton, PA . . . . . . . . . .
Eden, NC . . . . . . . . . . .
Edmond, OK . . . . . . . .
Edmond, OK . . . . . . . .
Edmond, OK . . . . . . . .
Elizabeth City, NC . . . .
Elk Grove Village,
IL . . . . . . . . . . . . . . .
Elk Grove Village,
IL . . . . . . . . . . . . . . .
Encinitas, CA . . . . . . . .
Englewood, NJ . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Epsom, UK . . . . . . . . .
33,969
Escondido, CA . . . . . . .
Eureka, KS . . . . . . . . . .
Everett, WA . . . . . . . . .
Exton, PA . . . . . . . . . . .
Fairfax, VA . . . . . . . . .
Fairfax, VA . . . . . . . . .
Fairhope, AL . . . . . . . .
Fall River, MA . . . . . . .
Fanwood, NJ . . . . . . . .
Faribault, MN . . . . . . .
Farmington, CT . . . . . .
Farnborough, UK . . . . .
Fayetteville, PA . . . . . .
Fayetteville, NY . . . . . .
Findlay, OH . . . . . . . . .
Fishers, IN . . . . . . . . . .
Fishersville, VA . . . . . .
Flint, MI . . . . . . . . . . . .
Florence, NJ . . . . . . . . .
Flourtown, PA . . . . . . .
Flower Mound, TX . . .
Floyd, VA . . . . . . . . . .
Flushing, MI
. . . . . . . .
Flushing, MI
. . . . . . . .
Forest City, NC . . . . . .
Fort Ashby, WV . . . . . .
Fort Collins, CO . . . . . .
Fort Collins, CO . . . . . .
Fort Worth, TX . . . . . .
Fountain Valley, CA . .
Franconia, NH . . . . . . .
Fredericksburg, VA . . .
Fredericksburg, VA . . .
Ft. Myers, FL . . . . . . . .
Ft. Myers, FL . . . . . . . .
Ft. Myers, FL . . . . . . . .
Gainesville, FL . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,380
4,071
1,109
1,430
1,620
390
410
1,810
1,650
200
1,344
3,733
1,460
930
20,159
1,520
50
1,400
3,600
1,827
34,229
24,438
7,502
13,400
10,052
4,877
8,388
14,849
25,167
2,760
7,076
18,751
7,721
4,514
34,803
24,024
3,950
5,476
27,267
17,309
4,099
17,620
570
620
2,850
780
1,693
2,036
2,150
410
200
1,500
788
1,271
300
1,800
1,800
680
690
1,415
320
330
3,680
890
450
5,259
360
1,000
1,130
1,110
2,139
2,502
2,374
9,119
5,829
55,175
11,539
10,459
5,737
32,951
3,962
1,800
14,500
2,101
18,056
2,978
14,830
8,414
3,618
1,702
8,536
4,497
19,566
58,608
4,532
13,615
9,379
11,320
20,000
23,202
10,562
18,240
9,744
29,088
1,093
2,154
—
—
—
20
—
3,260
1,700
2,165
—
—
1,987
26
4,554
785
71
—
—
—
—
112
4,856
1,467
300
—
586
2,468
500
—
—
—
—
—
266
174
—
—
—
38
356
—
—
5,086
—
70
2,070
—
—
—
—
—
1,380
4,379
1,109
1,430
1,620
390
410
1,810
1,650
200
1,344
3,733
1,460
930
21,682
1,520
50
1,400
3,600
1,827
35,322
26,284
7,502
13,400
10,052
4,897
8,388
18,109
26,867
4,925
7,076
18,751
9,708
4,540
37,834
24,809
4,021
5,476
27,267
17,309
7,664
3,646
384
529
469
2,162
1,766
2,425
2,103
2,376
2011
2014
2018
2018
2018
2003
2012
2014
2014
1998
1998 606 Cranbury Rd.
1999 Carew Road
2015 4100 Freemansburg Avenue
1981 2600 Northampton Street
2000 4100 Freemansburg Avenue
1998 314 W. Kings Hwy.
2001 15401 North Pennsylvania
Avenue
1985 1225 Lakeshore Drive
2017 2709 East Danforth Road
1999 400 Hastings Lane
292
2018
1995 1940 Nerge Road Elk
685
4,196
1,215
3,062
6,863
453
2,950
1,193
690
2018
2000
2011
2016
2011
2015
1999
2017
2018
1988 1920 Nerge Road
1988 335 Saxony Rd.
1966 333 Grand Avenue
2014 450-458 Reigate Road
1987 1500 Borden Rd
1994 1820 E River St
1999 2015 Lake Heights Dr.
2018 501 Thomas Jones Way
1997 12469 Lee Jackson Mem
Highway
4,099
17,620
687
2018
1990 12475 Lee Jackson Memorial
1,910
5,715
12,133
1,269
425
810
4,037
2,080
1,061
3,949
672
668
1,403
3,728
1,803
463
105
347
2,007
4,597
6,508
376
4,812
365
2,748
7,918
3,363
422
713
461
75
Highway
1987 50 Spring Run Road
1973 1748 Highland Ave.
1982 295 South Ave.
2003 828 1st Street NE
1997 45 South Road
1980 Bruntile Close, Reading
Road
1991 6375 Chambersburg Road
1997 5125 Highbridge St.
1997 725 Fox Run Rd.
2000 9745 Olympia Dr.
1998 83 Crossroad Lane
1969 3011 North Center Road
1999 901 Broad St.
1908 350 Haws Lane
2012 4141 Long Prairie Road
1979 237 Franklin Pike Rd SE
1999 640 Sunnyside Drive
1967 540 Sunnyside Drive
1999 493 Piney Ridge Rd.
1980 Diane Drive, Box 686
2007 4750 Pleasant Oak Drive
1965 1005 East Elizabeth
2011 425 Alabama Ave.
1988 11680 Warner Avenue
1971 93 Main Street
1999 3500 Meekins Dr.
2010 140 Brimley Drive
1999 15950 McGregor Boulevard
1990 1600 Matthew Drive
2000 13881 Eagle Ridge Drive
2018 3605 NW 83rd Street
2012
1996
2011
2015
2018
2014
2015
2001
1997
2010
2018
2018
2002
2011
2011
2018
2018
2018
2003
2011
2015
2018
2010
2018
2011
2005
2014
2018
2018
2018
2016
9,231
10,685
56,642
11,839
10,459
6,170
35,419
4,462
1,800
14,500
2,101
18,056
2,978
15,096
8,588
3,618
1,702
8,536
4,535
19,922
58,608
4,532
18,701
9,379
11,390
22,070
23,202
10,562
18,240
9,744
29,088
570
620
2,850
780
1,693
2,189
2,150
410
200
1,500
788
1,271
300
1,800
1,800
680
690
1,415
320
330
3,680
890
450
5,259
360
1,000
1,130
1,110
2,139
2,502
2,374
151
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Galesburg, IL . . . . . . . .
Gardner, KS . . . . . . . . .
Gastonia, NC . . . . . . . .
Gastonia, NC . . . . . . . .
Gastonia, NC . . . . . . . .
Geneva, IL . . . . . . . . . .
Georgetown, TX . . . . .
Gig Harbor, WA . . . . .
Glen Ellyn, IL . . . . . . .
Granbury, TX . . . . . . . .
Granger, IN . . . . . . . . .
Grapevine, TX . . . . . . .
Greeley, CO . . . . . . . . .
Greensboro, NC . . . . . .
Greensboro, NC . . . . . .
Greenville, SC . . . . . . .
Greenville, SC . . . . . . .
Greenville, SC . . . . . . .
Greenville, NC . . . . . . .
Greenwood, IN . . . . . .
Grosse Pointe, MI . . . .
Groton, CT . . . . . . . . . .
Hamilton, NJ . . . . . . . .
Hanahan, SC . . . . . . . .
Hanford, UK . . . . . . . .
Harrisburg, PA . . . . . . .
Harrow, UK . . . . . . . . .
Hatboro, PA . . . . . . . . .
Hatboro, PA . . . . . . . . .
Hatfield, UK . . . . . . . .
Hattiesburg, MS . . . . . .
Hemet, CA . . . . . . . . . .
Henry, IL . . . . . . . . . . .
Hermitage, TN . . . . . . .
Herne Bay, UK . . . . . .
Hiawatha, KS . . . . . . . .
Hickory, NC . . . . . . . . .
High Point, NC . . . . . .
High Point, NC . . . . . .
High Point, NC . . . . . .
High Point, NC . . . . . .
Highlands Ranch,
CO . . . . . . . . . . . . . .
Hillsboro, OH . . . . . . .
Hinckley, UK . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Hindhead, UK . . . . . . .
39,141
Hinsdale, IL . . . . . . . . .
Hockessin, DE . . . . . . .
Holton, KS . . . . . . . . . .
Homewood, IL . . . . . . .
Howard, WI . . . . . . . . .
Huntingdon Valley,
PA . . . . . . . . . . . . . .
Hutchinson, KS . . . . . .
—
—
—
—
—
—
—
1,708
200
470
310
400
1,502
200
3,000
1,496
2,550
1,670
2,220
1,077
330
560
310
1,751
947
290
1,550
867
2,430
440
1,934
1,382
569
7,402
—
1,192
2,924
450
6,224
1,860
1,500
3,841
2,800
6,129
3,096
5,029
16,198
2,100
4,463
6,636
2,940
21,280
17,648
18,051
2,970
5,507
4,750
8,774
1,445
4,393
22,770
2,386
19,941
4,469
3,988
9,829
12,826
8,266
28,112
7,611
7,527
13,469
8,414
3,689
9,943
—
93
17
36
202
—
—
—
—
777
2,401
69
—
594
1,332
—
—
—
236
81
—
968
—
—
846
—
1,183
1,771
—
789
—
—
—
540
1,708
200
470
310
400
1,502
200
3,000
1,496
2,550
1,670
2,220
1,077
330
560
310
1,751
947
290
1,550
867
2,430
440
1,934
1,486
569
7,961
—
1,192
3,145
450
6,224
1,860
1,500
3,841
2,893
6,146
3,132
5,231
16,198
2,100
4,463
6,636
3,717
23,681
17,717
18,051
3,564
6,839
4,750
8,774
1,445
4,629
22,851
2,386
20,909
4,469
3,988
10,571
12,826
8,890
29,883
7,611
8,095
13,469
8,414
3,689
10,483
1,900
24,353
2,726
2,043
26,936
40
290
560
370
330
430
940
1,792
2,159
17,852
4,033
1,120
40
2,395
579
1,150
600
4,210
987
4,443
2,185
3,395
4,143
3,721
6,341
4,194
48,645
24,287
6,308
7,460
7,652
32,122
3,730
10,590
4,239
1,299
5,291
2,636
3,503
4,179
8,704
6,341
4,511
52,702
24,287
7,555
7,473
7,652
32,132
3,730
10,784
29
312
848
451
108
36
4,983
—
480
5,405
—
1,247
13
—
10
—
194
40
290
560
370
330
430
940
1,792
2,322
19,200
4,033
1,120
40
2,395
579
1,150
600
152
152
346
2,680
1,426
2,264
631
1,227
213
288
876
5,629
2,003
1,341
1,587
2,921
2,034
351
97
1,989
5,530
100
5,411
2,098
2018
2015
2003
2003
2003
2018
1997
2018
2018
2012
2010
2013
2017
2003
2003
2004
2018
2018
2003
2010
2018
2011
2001
1964 280 East Losey Street
2000 869 Juniper Terrace
1998 1680 S. New Hope Rd.
1994 1717 Union Rd.
1996 1750 Robinwood Rd.
2000 2388 Bricher Road
1997 2600 University Dr., E.
1990 3309 45th Street Court
Northwest
2001 2S706 Park Boulevard
1996 916 East Highway 377
2009 6330 North Fir Rd
2014 4545 Merlot Drive
2009 5300 West 29th Street
1996 5809 Old Oak Ridge Rd.
1997 4400 Lawndale Dr.
1997 23 Southpointe Dr.
1966 600 Sulphur Springs Road
1976 601 Sulphur Springs Road
1998 2715 Dickinson Ave.
2007 2339 South SR 135
1964 21401 Mack Avenue
1975 1145 Poquonnock Road
1998 1645 Whitehorse-Mercerville
Rd.
190
2018
1989 1800 Eagle Landing
1,791
497
1,248
6,894
402
1,382
3,099
339
141
2,212
4,843
495
673
2,327
1,207
1,530
1,840
2,516
347
843
4,171
894
1,163
814
288
2,040
209
4,242
Boulevard
2012 Bankhouse Road
2000 2625 Ailanthus Lane
2001 177 Preston Hill
1996 3485 Davisville Road
2000 779 West County Line Road
2012 St Albans Road East
2009 217 Methodist Hospital Blvd
1989 1717 West Stetson Avenue
1987 1650 Old Indian Town Road
2006 4131 Andrew Jackson
Parkway
2011 165 Reculver Road
1996 400 Kansas Ave
1994 2530 16th St. N.E.
2000 1568 Skeet Club Rd.
1999 1564 Skeet Club Rd.
1994 201 W. Hartley Dr.
1998 1560 Skeet Club Rd.
1999 9160 S. University Blvd.
1983 1141 Northview Drive
2013 Tudor Road
2012 Portsmouth Road
1971 600 W Ogden Avenue
1992 100 Saint Claire Drive
1996 410 Juniper Dr
1989 940 Maple Avenue
2016 2790 Elm Tree Hill
1993 3430 Huntingdon Pike
1997 2416 Brentwood
2013
2018
2014
2011
2018
2013
2010
2018
2018
2011
2013
2015
2003
2003
2003
2003
2003
2002
2018
2013
2016
2018
2014
2015
2018
2017
2018
2004
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Independence, VA . . . .
Indianapolis, IN . . . . . .
Indianapolis, IN . . . . . .
Jackson, NJ . . . . . . . . .
Jacksonville, FL . . . . . .
Jacksonville, FL . . . . . .
Jacksonville, FL . . . . . .
Jacksonville, FL . . . . . .
Jefferson Hills, PA . . . .
Jersey Shore, PA . . . . .
Kansas City, KS . . . . . .
Katy, TX . . . . . . . . . . .
Kensington, MD . . . . . .
Kenwood, OH . . . . . . .
Kettering, OH . . . . . . .
King of Prussia, PA . . .
King of Prussia, PA . . .
Kingsford, MI
. . . . . . .
Kingston, PA . . . . . . . .
Kingston upon Thames,
UK . . . . . . . . . . . . . .
Kirkstall, UK . . . . . . . .
Kokomo, IN . . . . . . . . .
Lacey, WA . . . . . . . . . .
Lafayette, CO . . . . . . . .
Lafayette, IN . . . . . . . .
Lakeway, TX . . . . . . . .
Lakewood, CO . . . . . . .
Lakewood Ranch,
FL . . . . . . . . . . . . . . .
Lakewood Ranch,
FL . . . . . . . . . . . . . . .
Lancaster, PA . . . . . . . .
Lancaster, PA . . . . . . . .
Largo, FL . . . . . . . . . . .
Las Vegas, NV . . . . . . .
Laureldale, PA . . . . . . .
Lawrence, KS . . . . . . .
Lebanon, PA . . . . . . . .
Lebanon, PA . . . . . . . .
Lee, MA . . . . . . . . . . . .
Leeds, UK . . . . . . . . . .
Leicester, UK . . . . . . . .
Lenoir, NC . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
71,089
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Lethbridge, AB . . . . . .
1,305
Lexana, KS . . . . . . . . .
Lexington, NC . . . . . . .
Libertyville, IL . . . . . . .
Libertyville, IL . . . . . . .
Lichfield, UK . . . . . . . .
Lillington, NC . . . . . . .
Lillington, NC . . . . . . .
Lincoln, NE . . . . . . . . .
Lititz, PA . . . . . . . . . . .
Livermore, CA . . . . . . .
Livonia, MI . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
1,082
870
1,105
6,500
750
—
1,752
2,182
2,265
600
700
1,778
1,753
821
1,229
720
1,205
1,362
986
33,063
2,437
710
2,582
1,420
670
5,142
2,160
6,767
14,688
6,645
26,405
25,231
26,381
2,553
9,491
13,618
8,107
20,115
22,622
18,626
11,043
4,703
14,780
4,727
10,598
5,711
46,696
9,414
16,044
18,180
20,192
16,833
23,203
28,091
—
—
—
3,107
111
1,801
—
—
—
—
—
—
—
—
—
—
—
—
—
6,439
896
—
—
—
1
—
62
1,082
870
1,105
6,500
750
1,691
1,752
2,182
2,265
600
700
1,778
1,753
821
1,229
720
1,205
1,362
986
35,561
2,621
710
2,582
1,420
670
5,142
2,160
6,767
14,688
6,645
29,512
25,342
26,491
2,553
9,491
13,618
8,107
20,115
22,622
18,626
11,043
4,703
14,780
4,727
10,598
5,711
50,637
10,126
16,044
18,180
20,192
16,834
23,203
28,153
829
2,283
252
5,334
2,303
2,403
102
406
771
294
2,322
1,707
699
428
207
594
225
428
225
4,056
1,720
2,488
692
2,572
2,368
3,995
4,299
2018
2014
2018
2012
2013
2013
2018
2018
2018
2018
2015
2017
2018
2018
2018
2018
2018
2018
2018
2016
2013
2014
2018
2015
2015
2007
2014
1998 400 S Independence Ave
2014 1635 N Arlington Avenue
1979 8549 South Madison Avenue
2001 2 Kathleen Drive
2014 5939 Roosevelt Boulevard
2014 4000 San Pablo Parkway
1989 3648 University Blvd South
1980 8495 Normandy Blvd
1997 380 Wray Large Road
1973 1008 Thompson Street
2015 8900 Parallel Parkway
2015 24802 Kingsland Boulevard
2002 4301 Knowles Avenue
2000 4580 East Galbraith Road
1977 3313 Wilmington Pike
1995 620 West Valley Forge Road
1990 600 West Valley Forge Road
1968 1225 Woodward Avenue
1974 200 Second Avenue
2014 Coombe Lane West
2009 29 Broad Lane
2014 2200 S. Dixon Rd
2012 4524 Intelco Loop SE
2015 329 Exempla Circle
2014 2402 South Street
2011 2000 Medical Dr
2010 7395 West Eastman Place
650
6,714
1,988
650
8,702
1,726
2011
2012 8230 Nature’s Way
1,000
1,680
1,011
1,166
580
1,171
250
728
1,214
290
1,974
3,060
190
1,214
480
200
6,500
2,993
1,382
470
500
390
1,200
4,100
985
22,388
14,039
7,504
3,427
23,420
14,424
8,716
10,370
5,962
18,135
13,239
24,410
3,748
2,750
1,770
3,900
40,024
11,550
30,324
17,579
16,451
13,807
13,836
24,996
13,558
22,474
14,039
7,504
3,427
23,420
14,424
8,716
10,370
5,962
19,061
14,239
26,254
4,466
2,947
1,922
4,990
40,024
11,550
32,615
17,579
16,451
13,902
13,836
24,996
13,558
86
—
—
—
—
—
—
—
—
926
1,149
2,075
718
279
152
1,090
—
—
2,395
—
—
95
—
—
—
1,000
1,680
1,011
1,166
580
1,171
250
728
1,214
290
2,123
3,291
190
1,296
480
200
6,500
2,993
1,486
470
500
390
1,200
4,100
985
153
4,410
1,159
296
175
5,220
549
1,697
432
278
8,860
1,728
4,798
1,945
554
247
2,243
9,587
431
3,979
2,626
2,307
3,519
1,144
3,276
544
2012
2015
2018
2018
2011
2018
2012
2018
2018
2002
2015
2012
2003
2014
2015
2002
2011
2018
2015
2014
2014
2010
2015
2014
2018
2005 8220 Natures Way
2017 31 Millersville Road
1966 100 Abbeyville Road
1997 300 Highland Avenue
Northeast
2002 2500 North Tenaya Way
1980 2125 Elizabeth Avenue
1996 3220 Peterson Road
1998 100 Tuck Court
1980 900 Tuck Street
1998 600 & 620 Laurel St.
2013 100 Grove Lane
2010 307 London Road
1998 1145 Powell Rd., N.E.
2003 785 Columbia Boulevard
West
1994 8710 Caenen Lake Rd
1997 161 Young Dr.
2001 901 Florsheim Dr
1988 1500 South Milwaukee
2012 Wissage Road
2013 54 Red Mulberry Way
1999 2041 NC-210 N
2000 7208 Van Dorn St.
2016 80 West Millport Road
1974 35 Fenton Street
1999 32500 Seven Mile Road
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Livonia, MI . . . . . . . . .
Longview, TX . . . . . . .
Longwood, FL . . . . . . .
Los Angeles, CA . . . . .
Louisburg, KS . . . . . . .
Louisville, KY . . . . . . .
Loxley, UK . . . . . . . . .
Lutherville, MD . . . . . .
Lynchburg, VA . . . . . .
Lynchburg, VA . . . . . .
Lynnwood, WA . . . . . .
Macomb, IL . . . . . . . . .
Macungie, PA . . . . . . .
Manalapan, NJ . . . . . . .
Manassas, VA . . . . . . .
Mankato, MN . . . . . . . .
Mansfield, TX . . . . . . .
Marietta, OH . . . . . . . .
Marietta, GA . . . . . . . .
Marietta, PA . . . . . . . . .
Marion, IN . . . . . . . . . .
Marion, IN . . . . . . . . . .
Marion, OH . . . . . . . . .
Marlborough, UK . . . .
Marlow, UK . . . . . . . . .
Martinsville, VA . . . . .
Matawan, NJ . . . . . . . .
Matthews, NC . . . . . . .
McHenry, IL . . . . . . . .
McKinney, TX . . . . . . .
McMurray, PA . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Medicine Hat, AB . . . .
2,144
Mentor, OH . . . . . . . . .
Mercerville, NJ . . . . . .
Meriden, CT . . . . . . . . .
Miamisburg, OH . . . . .
Middleburg Heights,
OH . . . . . . . . . . . . . .
Middleton, WI . . . . . . .
Milton Keynes, UK . . .
Minnetonka, MN . . . . .
Mishawaka, IN . . . . . . .
Moline, IL . . . . . . . . . .
Monmouth Junction,
NJ . . . . . . . . . . . . . . .
Monroe, NC . . . . . . . . .
Monroe, NC . . . . . . . . .
Monroe, NC . . . . . . . . .
Monroe Township,
NJ . . . . . . . . . . . . . . .
Monroeville, PA . . . . .
Monroeville, PA . . . . .
Montgomeryville,
PA . . . . . . . . . . . . . .
Montville, NJ . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,836
610
1,260
—
280
490
1,369
1,100
340
2,904
2,302
1,586
960
900
750
1,460
660
1,149
2,406
1,050
720
990
2,768
2,677
9,068
349
1,830
560
1,576
1,570
1,440
932
1,827
860
1,300
786
960
420
1,826
2,080
740
2,946
720
470
310
450
3,250
1,216
1,237
1,176
3,500
2,278
5,520
6,445
11,430
4,320
10,010
15,668
19,786
16,114
3,697
5,634
4,059
29,033
22,624
7,446
32,104
5,251
9,376
12,233
13,633
12,750
9,190
17,420
6,822
39,720
—
20,618
4,738
—
7,389
15,805
5,566
9,941
9,929
1,472
3,233
7,780
4,006
18,654
24,360
16,113
18,677
6,209
3,681
4,799
4,021
27,771
12,753
3,642
9,827
31,002
—
—
—
1,050
44
2,768
1,288
1,744
—
—
—
—
84
760
1,069
300
—
—
—
463
1,136
824
—
718
1,970
—
166
39
—
—
3,894
450
—
173
233
—
427
600
1,547
1,554
—
—
86
788
883
154
765
—
—
—
1,699
1,836
610
1,260
—
280
490
1,473
1,100
340
2,904
2,302
1,586
960
900
750
1,460
660
1,149
2,406
1,050
720
990
2,768
2,879
9,434
349
1,830
560
1,576
1,570
1,440
995
1,827
860
1,300
786
960
420
1,964
2,080
740
2,946
720
470
310
450
3,250
1,216
1,237
1,176
3,500
154
2,278
5,520
6,445
12,480
4,364
12,778
16,852
21,530
16,114
3,697
5,634
4,059
29,117
23,384
8,515
32,404
5,251
9,376
12,233
14,096
13,886
10,014
17,420
7,338
41,324
—
20,784
4,777
—
7,389
19,699
5,953
9,941
10,102
1,705
3,233
8,207
4,606
20,063
25,914
16,113
18,677
6,295
4,469
5,682
4,175
28,536
12,753
3,642
9,827
32,701
109
1,873
1,552
3,242
481
5,144
3,003
5,068
2,444
144
222
153
6,833
5,094
3,285
3,451
1,802
362
462
1,585
2,086
1,782
856
1,006
4,037
—
4,764
2,141
—
2,096
4,190
889
389
2,619
848
178
3,134
2,028
2,520
6,078
2,565
682
1,721
1,950
2,450
1,860
2,966
593
225
404
7,173
2018
2006
2011
2008
2015
2005
2013
2011
2014
2018
2018
2018
2011
2011
2003
2015
2006
2018
2018
2015
2014
2014
2018
2014
2013
2003
2011
2003
2006
2009
2010
2014
2018
2011
2011
2018
2004
2001
2015
2012
2014
2018
2011
2003
2003
2003
2015
2018
2018
2018
2011
1960 28550 Five Mile Road
2007 311 E Hawkins Pkwy
2011 425 South Ronald Reagan
Boulevard
1971 330 North Hayworth Avenue
1996 202 Rogers St
1978 4604 Lowe Rd
2008 Loxley Road
1988 515 Brightfield Road
2013 189 Monica Blvd
1978 2200 Landover Place
1987 3701 188th Street
1966 8 Doctors Lane
1994 1718 Spring Creek Road
2001 445 Route 9 South
1996 8341 Barrett Dr.
2006 100 Dublin Road
2007 2281 Country Club Dr
1977 5001 State Route 60
1980 4360 Johnson Ferry Place
1999 2760 Maytown Road
2012 614 W. 14th Street
1976 505 N. Bradner Avenue
2004 400 Barks Road West
1999 The Common
2014 210 Little Marlow Road
1900 Rolling Hills Rd. & US Hwy.
58
1965 625 State Highway 34
1998 2404 Plantation Center Dr.
1900 5200 Block of Bull Valley
Road
2010 2701 Alma Rd.
2011 240 Cedar Hill Dr
1999 65 Valleyview Drive SW
1985 8200 Mentor Hills Drive
1967 2240 White Horse-
Merceville Road
1968 845 Paddock Ave
1983 450 Oak Ridge Boulevard
1998 15435 Bagley Rd.
1991 6701 Stonefield Rd.
2007 Tunbridge Grove, Kents Hill
1999 500 Carlson Parkway
2013 60257 Bodnar Blvd
1964 833 Sixteenth Avenue
1996 2 Deer Park Drive
2001 918 Fitzgerald St.
2000 919 Fitzgerald St.
1997 1316 Patterson Ave.
1996 319 Forsgate Drive
1997 120 Wyngate Drive
1996 885 MacBeth Drive
1989 640 Bethlehem Pike
1988 165 Changebridge Rd.
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Moorestown, NJ . . . . . .
Morehead City, NC . . .
Morrison, CO . . . . . . . .
Moulton, UK . . . . . . . .
Mountainside, NJ . . . . .
Nacogdoches, TX . . . . .
Naperville, IL . . . . . . . .
Naples, FL . . . . . . . . . .
Naples, FL . . . . . . . . . .
Naples, FL . . . . . . . . . .
Nashville, TN . . . . . . . .
Naugatuck, CT . . . . . . .
Needham, MA . . . . . . .
New Lenox, IL . . . . . . .
New Moston, UK . . . . .
Newark, DE . . . . . . . . .
Newcastle Under
Lyme, UK . . . . . . . .
Newcastle-under-Lyme,
UK . . . . . . . . . . . . . .
Newport News, VA . . .
Norman, OK . . . . . . . .
Norman, OK . . . . . . . .
North Augusta, SC . . . .
Northampton, UK . . . .
Northampton, UK . . . .
Northbrook, IL . . . . . . .
Nuneaton, UK . . . . . . .
Nuthall, UK . . . . . . . . .
Nuthall, UK . . . . . . . . .
Oak Lawn, IL . . . . . . . .
Oak Lawn, IL . . . . . . . .
Oakland, CA . . . . . . . .
Ocala, FL . . . . . . . . . . .
Oklahoma City, OK . . .
Oklahoma City, OK . . .
Oklahoma City, OK . . .
Olathe, KS . . . . . . . . . .
Omaha, NE . . . . . . . . .
Omaha, NE . . . . . . . . .
Ona, WV . . . . . . . . . . .
Oneonta, NY . . . . . . . .
Orange Park, FL . . . . . .
Orem, UT . . . . . . . . . . .
Osage City, KS . . . . . .
Osawatomie, KS . . . . .
Ottawa, KS . . . . . . . . . .
Overland Park, KS . . . .
Overland Park, KS . . . .
Overland Park, KS . . . .
Owasso, OK . . . . . . . . .
Owensboro, KY . . . . . .
Owenton, KY . . . . . . . .
Palestine, TX . . . . . . . .
Palm Beach Gardens,
FL . . . . . . . . . . . . . . .
Palm Coast, FL . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4,143
200
2,720
1,695
3,097
390
3,470
1,222
1,672
1,854
4,910
1,200
1,610
1,225
1,480
560
1,110
1,125
839
55
1,480
332
5,182
2,013
1,298
3,325
1,628
2,498
2,418
3,876
4,760
1,340
590
760
1,590
1,930
370
380
950
80
2,201
2,150
50
130
160
4,500
410
1,300
215
225
100
180
2,082
870
23,902
3,104
16,261
12,510
7,810
5,754
29,547
10,642
23,126
12,402
29,590
15,826
12,667
21,575
4,378
21,220
5,655
5,537
6,077
1,484
33,330
2,558
17,348
6,257
13,341
8,983
6,263
10,436
5,428
7,988
16,143
10,564
7,513
7,017
16,272
19,765
10,230
8,769
15,998
5,020
4,018
24,107
1,700
2,970
6,590
29,105
2,840
25,311
1,380
13,275
2,400
4,320
6,624
10,957
—
1,701
—
1,611
—
—
—
—
—
—
—
199
—
—
443
2,422
512
503
—
—
—
—
1,702
626
—
929
597
977
—
—
109
102
—
—
—
553
—
—
390
—
—
—
142
136
44
38,441
92
677
—
—
—
1,300
—
98
4,143
200
2,720
1,662
3,097
390
3,470
1,222
1,672
1,854
4,910
1,200
1,610
1,225
1,592
560
1,194
1,210
839
55
1,480
332
5,573
2,166
1,298
3,576
1,752
2,687
2,418
3,876
4,760
1,340
590
760
1,590
1,930
370
380
950
80
2,201
2,150
50
130
160
8,230
410
1,300
215
225
100
180
2,082
870
155
23,902
4,805
16,261
14,154
7,810
5,754
29,547
10,642
23,126
12,402
29,590
16,025
12,667
21,575
4,709
23,642
3,947
2,371
1,359
960
309
1,948
7,214
441
1,068
463
9,113
3,931
5,644
429
833
8,621
2012
1999
2018
2017
2018
2006
2011
2018
2018
2018
2008
2011
2002
2019
2013
2004
2014 250 Marter Avenue
1999 107 Bryan St.
1974 150 Spring Street
1995 Northampton Lane North
1988 1180 Route 22
2007 5902 North St
2001 504 North River Road
1998 6125 Rattlesnake Hammock
Road
1993 1000 Lely Palms Drive
1987 3601 Lakewood Boulevard
2007 15 Burton Hills Boulevard
1980 4 Hazel Avenue
1994 100 West St.
2007 1023 South Cedar Rd
2010 90a Broadway
1998 200 E. Village Rd.
6,083
1,028
2013
2010 Hempstalls Lane
5,955
6,077
1,484
33,330
2,558
18,659
6,730
13,341
9,661
6,736
11,224
5,428
7,988
16,252
10,666
7,513
7,017
16,272
20,318
10,230
8,769
16,388
5,020
4,018
24,107
1,842
3,106
6,634
63,816
2,932
25,988
1,380
13,275
2,400
5,620
6,624
11,055
817
739
969
6,428
1,407
3,277
869
510
1,634
856
1,917
206
315
2,372
3,067
2,382
2,197
44
2,378
2,643
2,392
1,820
1,570
212
2,642
247
380
742
17,220
374
2,995
834
5,428
1,157
1,949
289
3,040
2014
2018
1995
2012
1999
2013
2014
2018
2013
2014
2013
2018
2018
2014
2008
2007
2007
2014
2016
2010
2010
2015
2007
2018
2015
2015
2015
2015
2010
2015
2016
1996
2005
2005
2006
2018
2008
1999 Silverdale Road
1998 12997 Nettles Dr
1995 1701 Alameda Dr.
1985 800 Canadian Trails Drive
1998 105 North Hills Dr.
2011 Cliftonville Road
2014 Cliftonville Road
1999 3240 Milwaukee Avenue
2011 132 Coventry Road
2014 172A Nottingham Road
2011 172 Nottingham Road
1977 9401 South Kostner Avenue
1960 6300 W 95th Street
2002 468 Perkins Street
2009 2650 SE 18TH Avenue
2008 13200 S. May Ave
2009 11320 N. Council Road
2016 2800 SW 131st Street
2015 21250 W 151 Street
1998 11909 Miracle Hills Dr.
1999 5728 South 108th St.
2007 100 Weatherholt Drive
1996 1846 County Highway 48
1990 570 Wells Road
2014 250 East Center Street
1996 1403 Laing St
2003 1520 Parker Ave
2007 2250 S Elm St
1988 6101 W 119th St
2004 14430 Metcalf Ave
2015 7600 Antioch Road
1996 12807 E. 86th Place N.
1964 1205 Leitchfield Rd.
1979 905 Hwy. 127 N.
2005 1625 W. Spring St.
1991 11375 Prosperity Farms Road
2010 50 Town Ct.
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Palm Desert, CA . . . . .
Palm Harbor, FL . . . . .
Palm Harbor, FL . . . . .
Palos Heights, IL . . . . .
Palos Heights, IL . . . . .
Palos Heights, IL . . . . .
Panama City Beach,
FL . . . . . . . . . . . . . . .
Paola, KS . . . . . . . . . . .
Paris, TX . . . . . . . . . . .
Parma, OH . . . . . . . . . .
Parma, OH . . . . . . . . . .
Paulsboro, NJ . . . . . . . .
Perrysburg, OH . . . . . .
Perrysburg, OH . . . . . .
Philadelphia, PA . . . . .
Phillipsburg, NJ . . . . . .
Phillipsburg, NJ . . . . . .
Pikesville, MD . . . . . . .
Pikesville, MD . . . . . . .
Pinehurst, NC . . . . . . . .
Piqua, OH . . . . . . . . . .
Piscataway, NJ . . . . . . .
Pittsburgh, PA . . . . . . .
Pittsburgh, PA . . . . . . .
Pittsburgh, PA . . . . . . .
Pittsburgh, PA . . . . . . .
Pittsburgh, PA . . . . . . .
Pittsburgh, PA . . . . . . .
Pittsburgh, PA . . . . . . .
Pittsburgh, PA . . . . . . .
Plainview, NY . . . . . . .
Plano, TX . . . . . . . . . . .
Plattsmouth, NE . . . . . .
Poole, UK . . . . . . . . . .
Potomac, MD . . . . . . . .
Potomac, MD . . . . . . . .
Pottstown, PA . . . . . . .
Pottsville, PA . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Prior Lake, MN . . . . . .
13,567
Raleigh, NC . . . . . . . . .
Raleigh, NC . . . . . . . . .
Raleigh, NC . . . . . . . . .
Reading, PA . . . . . . . . .
Red Bank, NJ . . . . . . . .
Redondo Beach, CA . .
Reidsville, NC . . . . . . .
Richardson, TX . . . . . .
Richmond, IN . . . . . . .
Richmond, VA . . . . . . .
Richmond, VA . . . . . . .
Roanoke, VA . . . . . . . .
Rockville Centre,
NY . . . . . . . . . . . . . .
Rockwall, TX . . . . . . . .
Romeoville, IL . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,195
1,306
3,281
1,225
3,431
2,590
900
190
490
960
1,833
3,264
1,456
1,213
2,930
800
300
—
4,247
290
204
3,100
603
1,005
1,140
994
761
1,480
1,139
1,750
3,990
1,840
250
3,416
1,448
4,119
984
171
1,870
7,598
3,530
2,580
980
1,050
—
170
1,468
700
3,261
1,046
748
4,290
2,220
1,895
8,922
13,811
22,457
12,457
28,812
7,647
6,402
5,610
5,452
12,722
10,318
8,026
5,433
7,110
10,433
21,175
8,114
2,488
8,383
2,690
1,885
33,501
11,357
15,164
3,166
3,790
4,214
9,715
5,846
8,572
11,969
20,152
5,650
17,171
14,626
14,921
4,565
3,560
29,849
88,870
59,589
16,837
19,906
21,275
9,557
3,830
12,979
14,222
17,980
8,235
4,483
20,310
17,650
—
8,922
13,811
22,457
12,457
28,812
7,647
7,136
5,669
5,452
12,722
10,318
8,026
5,433
7,110
13,969
21,413
8,215
2,488
8,383
3,207
1,885
33,501
11,357
15,164
3,166
3,790
4,214
9,715
5,846
14,892
13,682
20,712
5,650
17,171
14,626
14,921
4,565
3,560
30,149
89,363
59,589
16,837
20,046
22,433
10,210
4,737
12,979
14,615
17,980
8,235
4,483
21,689
17,719
—
—
—
—
—
—
—
734
59
—
—
—
—
—
—
3,536
238
101
—
—
517
—
—
—
—
—
—
—
—
—
6,320
1,713
560
—
—
—
—
—
—
300
493
—
—
140
1,158
653
907
—
393
—
—
—
1,379
69
—
6,195
1,306
3,281
1,225
3,431
2,590
900
190
490
960
1,833
3,264
1,456
1,213
2,930
800
300
—
4,247
290
204
3,100
603
1,005
1,140
994
761
1,480
1,139
1,750
3,990
1,840
250
3,416
1,448
4,119
984
171
1,870
7,598
3,530
2,580
980
1,050
—
170
1,468
700
3,261
1,046
748
4,290
2,220
1,895
156
353
567
904
468
1,046
288
1,340
646
4,784
512
468
327
224
271
3,647
5,254
2,015
89
357
1,463
1,069
2,369
455
584
123
210
157
423
249
3,701
3,235
2,190
1,535
50
553
583
191
140
3,208
6,542
11,396
3,433
4,850
4,785
6,913
2,155
511
1,699
672
330
715
4,889
2,049
—
2018
2018
2018
2018
2018
2018
2011
2015
2005
2018
2018
2018
2018
2018
2011
2011
2011
2018
2018
2003
1997
2013
2018
2018
2018
2018
2018
2018
2018
2005
2011
2016
2010
2019
2018
2018
2018
2018
2015
2008
2012
2012
2011
2011
2011
2002
2018
2016
2018
2018
2018
2011
2012
2006
1989 74350 Country Club Drive
1997 2895 Tampa Road
1990 2851 Tampa Road
1999 7880 West College Drive
1987 7850 West College Drive
1996 11860 Southwest Hwy
2005 6012 Magnolia Beach Road
2000 601 N. East Street
2006 750 N Collegiate Dr
1998 9205 Sprague Road
2006 9055 West Sprague Road
1987 550 Jessup Road
1973 10540 Fremont Pike
1978 10542 Fremont Pike
1952 1526 Lombard Street
1992 290 Red School Lane
1905 843 Wilbur Avenue
1998 8911 Reisterstown Road
1996 8909 Reisterstown Road
1998 17 Regional Dr.
1997 1744 W. High St.
2017 10 Sterling Drive
1998 1125 Perry Highway
1997 505 Weyman Road
1962 550 South Negley Avenue
1986 2170 Rhine Street
1965 5609 Fifth Avenue
1986 1105 Perry Highway
1986 1848 Greentree Road
1998 100 Knoedler Rd.
1963 150 Sunnyside Blvd
2016 3325 W Plano Parkway
1999 1913 E. Highway 34
2019 Kingsmill Road
1994 10718 Potomac Tennis Lane
1988 10714 Potomac Tennis Lane
1907 724 North Charlotte Street
1976 420 Pulaski Drive
2003 4685 Park Nicollet Avenue
2017 4030 Cardinal at North Hills
St
2002 5301 Creedmoor Road
1988 7900 Creedmoor Road
1994 5501 Perkiomen Ave
1997 One Hartford Dr.
1957 514 North Prospect Ave
1998 2931 Vance St.
1999 410 Buckingham Road
2015 400 Industries Road
1990 1719 Bellevue Avenue
1966 2125 Hilliard Road
1997 4355 Pheasant Ridge Rd
2002 260 Maple Ave
2014 720 E Ralph Hall Parkway
1900 Grand Haven Circle
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Roseville, MN . . . . . . .
Rugeley, UK . . . . . . . .
Ruston, LA . . . . . . . . . .
S Holland, IL . . . . . . . .
Salem, OR . . . . . . . . . .
Salisbury, NC . . . . . . . .
San Angelo, TX . . . . . .
San Angelo, TX . . . . . .
San Antonio, TX . . . . .
San Antonio, TX . . . . .
San Diego, CA . . . . . . .
San Juan Capistrano,
CA . . . . . . . . . . . . . .
Sand Springs, OK . . . .
Sarasota, FL . . . . . . . . .
Sarasota, FL . . . . . . . . .
Sarasota, FL . . . . . . . . .
Sarasota, FL . . . . . . . . .
Sarasota, FL . . . . . . . . .
Sarasota, FL . . . . . . . . .
Scranton, PA . . . . . . . .
Scranton, PA . . . . . . . .
Seminole, FL . . . . . . . .
Seven Fields, PA . . . . .
Sewell, NJ . . . . . . . . . .
Shawnee, OK . . . . . . . .
Shelbyville, KY . . . . . .
Sherman, TX . . . . . . . .
Silver Spring, MD . . . .
Silver Spring, MD . . . .
Silvis, IL . . . . . . . . . . .
Sinking Spring, PA . . .
Sittingbourne, UK . . . .
Smithfield, NC . . . . . . .
Smithfield, NC . . . . . . .
South Bend, IN . . . . . .
South Point, OH . . . . . .
Southampton, UK . . . .
Southbury, CT . . . . . . .
Spokane, WA . . . . . . . .
Springfield, IL . . . . . . .
St. Louis, MO . . . . . . .
St. Paul, MN . . . . . . . .
Stafford, UK . . . . . . . .
Stamford, UK . . . . . . . .
Statesville, NC . . . . . . .
Statesville, NC . . . . . . .
Statesville, NC . . . . . . .
Staunton, VA . . . . . . . .
Sterling Heights, MI
. .
Sterling Heights, MI
. .
Stillwater, OK . . . . . . .
Stratford-upon-Avon,
UK . . . . . . . . . . . . . .
Stroudsburg, PA . . . . . .
Summit, NJ . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,140
1,900
710
1,423
449
370
260
1,050
1,499
—
—
1,390
910
475
4,101
1,370
2,792
3,360
443
440
320
1,165
484
3,127
80
630
700
1,469
4,678
880
1,393
1,357
290
360
670
1,135
1,519
1,860
2,649
990
1,890
2,100
2,009
1,820
150
310
140
899
790
1,583
80
790
340
3,080
24,679
10,262
9,790
8,910
5,171
5,697
8,800
24,689
12,662
17,303
22,003
6,942
19,654
3,175
11,208
4,084
11,177
19,140
8,895
17,609
12,144
8,977
4,663
14,095
1,400
3,870
5,221
10,395
11,683
16,420
19,848
6,539
5,680
8,216
17,770
9,390
16,041
23,613
11,703
13,378
12,390
33,019
8,238
3,238
1,447
6,183
3,627
6,391
10,787
15,639
1,400
14,508
16,313
14,152
100
918
—
—
1
196
425
1,221
—
—
1,845
1,434
—
—
—
—
—
—
—
—
1
—
59
—
—
630
—
—
—
139
—
597
455
—
—
—
710
958
—
1,085
837
100
414
382
338
61
9
—
—
—
—
1,155
—
—
2,140
2,043
710
1,423
449
370
260
1,050
1,499
—
—
1,390
910
475
4,101
1,370
2,792
3,360
443
440
320
1,165
484
3,127
80
630
700
1,469
4,678
880
1,393
1,460
290
360
670
1,135
1,581
1,860
2,649
990
1,890
2,100
2,090
1,957
150
310
140
899
790
1,583
80
849
340
3,080
157
24,779
11,037
9,790
8,910
5,172
5,893
9,225
25,910
12,662
17,303
23,848
8,376
19,654
3,175
11,208
4,084
11,177
19,140
8,895
17,609
12,145
8,977
4,722
14,095
1,400
4,500
5,221
10,395
11,683
16,559
19,848
7,033
6,135
8,216
17,770
9,390
16,689
24,571
11,703
14,463
13,227
33,119
8,571
3,483
1,785
6,244
3,636
6,391
10,787
15,639
1,400
15,604
16,313
14,152
2,677
1,976
2,424
359
2,828
2,561
3,572
3,682
493
8,455
6,664
3,500
3,861
1,991
701
164
434
4,182
382
2,530
1,741
373
2,585
624
870
1,684
1,838
405
485
4,135
764
926
2,497
1,177
2,652
362
1,013
5,579
456
2,121
3,028
3,546
750
489
788
2,662
1,589
792
423
622
872
1,901
2,619
3,422
2015
2013
2011
2018
1999
2003
2004
2014
2018
2007
2008
2000
2012
1996
2018
2018
2018
2011
2018
2014
2014
2018
1999
2018
1996
2005
2005
2018
2018
2010
2018
2014
2003
2014
2014
2018
2017
2011
2018
2014
2010
2015
2014
2014
2003
2003
2003
2018
2018
2018
1995
2015
2014
2011
1989 2750 North Victoria Street
2010 Horse Fair
1988 1401 Ezelle St
1997 2045 East 170th Street
1998 1355 Boone Rd. S.E.
1997 2201 Statesville Blvd.
1997 2695 Valleyview Blvd.
1999 6101 Grand Court Road
2000 15290 Huebner Road
2007 8902 Floyd Curl Dr.
1992 555 Washington St.
2001 30311 Camino Capistrano
2002 4402 South 129th Avenue
West
1995 8450 McIntosh Rd.
1993 5401 Sawyer Road
1968 3250 12th Street
1993 5511 Swift Road
2006 6150 Edgelake Drive
1998 5509 Swift Road
2005 2741 Blvd. Ave
2013 2751 Boulevard Ave
1998 9300 Antilles Drive
1999 500 Seven Fields Blvd.
2010 378 Fries Mill Road
1995 3947 Kickapoo
1965 1871 Midland Trail
2006 1011 E. Pecan Grove Rd.
1995 2505 Musgrove Road
1990 2501 Musgrove Road
2005 1900 10th St.
1982 3000 Windmill Road
1997 200 London Road
1998 830 Berkshire Rd.
1999 250 Highway 210 West
2014 52565 State Road 933
1984 7743 County Road 1
2013 Botley Road, Park Gate
2001 655 Main St
1985 6025 North Assembly Street
2013 3089 Old Jacksonville Road
1963 6543 Chippewa St
1996 750 Mississippi River
2016 Stone Road
1998 Priory Road
1990 2441 E. Broad St.
1996 2806 Peachtree Place
1999 2814 Peachtree Rd.
1999 1410 N Augusta St
1996 11095 East Fourteen Mile
Road
2013 38200 Schoenherr Road
1995 1616 McElroy Rd.
2012 Scholars Lane
2011 370 Whitestone Corner Road
2001 41 Springfield Avenue
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Sunbury, PA . . . . . . . . .
Sunninghill, UK . . . . . .
Sunnyvale, CA . . . . . . .
Superior, WI
. . . . . . . .
Tacoma, WA . . . . . . . .
Tampa, FL . . . . . . . . . .
Terre Haute, IN . . . . . .
Texarkana, TX . . . . . . .
The Villages, FL . . . . .
Thomasville, GA . . . . .
Three Rivers, MI . . . . .
Tomball, TX . . . . . . . .
Toms River, NJ . . . . . .
Tonganoxie, KS . . . . . .
Topeka, KS . . . . . . . . .
Towson, MD . . . . . . . .
Towson, MD . . . . . . . .
Towson, MD . . . . . . . .
Troy, MI . . . . . . . . . . . .
Troy, OH . . . . . . . . . . .
Trumbull, CT . . . . . . . .
Tulsa, OK . . . . . . . . . . .
Tulsa, OK . . . . . . . . . . .
Tulsa, OK . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Tulsa, OK . . . . . . . . . . .
13,000
Tulsa, OK . . . . . . . . . . .
Tustin, CA . . . . . . . . . .
Twinsburg, OH . . . . . .
Tyler, TX . . . . . . . . . . .
Union, SC . . . . . . . . . .
Valparaiso, IN . . . . . . .
Valparaiso, IN . . . . . . .
Vancouver, WA . . . . . .
Venice, FL . . . . . . . . . .
Venice, FL . . . . . . . . . .
Vero Beach, FL . . . . . .
Vero Beach, FL . . . . . .
Virginia Beach, VA . . .
Voorhees, NJ . . . . . . . .
Voorhees, NJ . . . . . . . .
Voorhees, NJ . . . . . . . .
W Palm Beach, FL . . . .
W Palm Beach, FL . . . .
Wabash, IN . . . . . . . . .
Waconia, MN . . . . . . . .
Wake Forest, NC . . . . .
Wallingford, PA . . . . . .
Walnut Creek, CA . . . .
Walnut Creek, CA . . . .
Walsall, UK . . . . . . . . .
Wamego, KS . . . . . . . .
Wareham, MA . . . . . . .
Warren, NJ . . . . . . . . . .
Waterloo, IA . . . . . . . .
Waxahachie, TX . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
695
11,632
4,946
1,020
2,522
1,315
1,370
192
1,035
530
1,255
1,050
3,466
310
260
1,715
3,100
4,527
1,381
200
4,440
1,390
1,320
1,100
1,752
890
840
1,446
650
1,932
112
108
2,503
1,150
2,246
263
297
1,540
1,800
3,100
2,193
1,175
1,921
670
890
200
1,356
4,358
5,394
1,184
40
875
2,000
605
650
7,246
42,233
22,131
13,735
8,576
6,913
18,016
1,403
7,446
12,520
2,761
13,300
23,311
3,690
12,712
13,115
6,468
3,128
24,452
2,000
43,384
7,110
10,087
27,007
28,421
9,410
15,299
5,921
5,268
2,374
2,558
2,962
28,401
10,674
10,097
3,187
3,263
22,593
37,299
25,950
6,992
8,297
5,733
14,588
14,726
3,003
6,489
18,413
39,096
8,562
2,510
10,313
30,810
3,031
5,763
7,246
43,938
22,131
19,894
8,576
6,913
18,016
1,403
7,446
13,867
2,761
14,140
23,311
3,766
12,712
13,115
6,468
3,128
24,452
6,254
43,384
8,212
10,087
29,240
28,421
9,410
15,836
5,921
5,268
2,374
2,558
2,962
28,401
10,782
10,097
3,187
3,263
22,593
37,970
25,976
6,992
8,297
5,733
14,589
19,221
5,042
6,489
18,413
39,096
9,209
2,567
12,014
32,147
3,031
5,763
—
2,174
—
6,159
—
—
—
—
—
1,347
—
840
—
76
—
—
—
—
—
4,254
—
1,102
—
2,233
—
—
537
—
—
—
—
—
—
108
—
—
—
—
671
26
—
—
—
1
4,495
2,039
—
—
—
737
57
1,701
1,337
—
—
695
12,101
4,946
1,020
2,522
1,315
1,370
192
1,035
530
1,255
1,050
3,466
310
260
1,715
3,100
4,527
1,381
200
4,440
1,390
1,320
1,100
1,752
890
840
1,446
650
1,932
112
108
2,503
1,150
2,246
263
297
1,540
1,800
3,100
2,193
1,175
1,921
670
890
200
1,356
4,358
5,394
1,274
40
875
2,000
605
650
158
273
2,925
829
3,457
328
313
2,463
847
1,327
2,429
142
3,171
832
473
2,579
510
240
147
909
2,345
10,012
2,264
2,121
2,334
2,023
572
3,986
255
1,794
142
1,266
1,449
1,047
3,019
418
1,550
1,596
3,282
9,153
5,244
301
350
234
2,269
4,086
2,420
285
708
1,429
1,189
298
5,798
6,904
129
1,838
2018
2014
2018
2009
2018
2018
2015
1996
2013
2011
2018
2011
2019
2015
2012
2018
2018
2018
2018
1997
2011
2010
2011
2015
2017
2017
2011
2018
2006
2018
2001
2001
2018
2008
2018
2001
2001
2014
2011
2011
2018
2018
2018
2014
2011
1998
2018
2018
2018
2015
2015
2002
2011
2018
2007
1981 800 Court Street Circle
2017 Bagshot Road
1990 1150 Tilton Drive
2010 1915 North 34th Street
1984 5601 South Orchard
Southtreet
1999 14950 Casey Road
2015 395 8th Avenue
1996 4204 Moores Lane
2014 2450 Parr Drive
2006 423 Covington Avenue
1976 517 South Erie Southtreet
2001 1221 Graham Dr
2006 1657 Silverton Rd
2009 120 W 8th St
2011 1931 Southwest Arvonia
Place
2000 8101 Bellona Avenue
1960 509 East Joppa Road
1970 7001 North Charles Street
2006 925 West South Boulevard
1997 81 S. Stanfield Rd.
2001 6949 Main Street
1998 7220 S. Yale Ave.
2012 7902 South Mingo Road East
2017 18001 East 51st Street
2014 701 W 71st Street South
2009 7210 South Yale Avenue
1965 240 East 3rd St
2014 8551 Darrow Road
2007 5550 Old Jacksonville Hwy.
1981 709 Rice Avenue
1998 2601 Valparaiso St.
1999 2501 Valparaiso St.
2011 2811 N.E. 139th Street
2009 1600 Center Rd.
1997 1450 East Venice Avenue
1999 420 4th Ct.
1996 410 4th Ct.
1993 5520 Indian River Rd
1965 2601 Evesham Road
2013 113 South Route 73
2006 1086 Dumont Circle
1996 2330 Village Boulevard
1996 2300 Village Boulevard
2013 20 John Kissinger Drive
2005 500 Cherry Street
1999 611 S. Brooks St.
1930 115 South Providence Road
1997 1975 Tice Valley Boulevard
1990 1226 Rossmoor Parkway
2015 Little Aston Road
1996 1607 4th St
1989 50 Indian Neck Rd.
1999 274 King George Rd
1964 201 West Ridgeway Avenue
2008 1329 Brown St.
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Wayne, NJ . . . . . . . . . .
Weatherford, TX . . . . .
Wellingborough,
UK . . . . . . . . . . . . . .
West Bend, WI . . . . . . .
West Des Moines,
IA . . . . . . . . . . . . . . .
West Milford, NJ . . . . .
West Orange, NJ . . . . .
West Reading, PA . . . .
Westerville, OH . . . . . .
Westerville, OH . . . . . .
Westerville, OH . . . . . .
Westfield, IN . . . . . . . .
Westlake, OH . . . . . . . .
Weston Super Mare,
UK . . . . . . . . . . . . . .
Wheaton, MD . . . . . . . .
Whippany, NJ . . . . . . .
Wichita, KS . . . . . . . . .
Wichita, KS . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Wichita, KS . . . . . . . . .
12,545
Wichita, KS . . . . . . . . .
Wichita, KS . . . . . . . . .
Wilkes-Barre, PA . . . . .
Williamsburg, VA . . . .
Williamsport, PA . . . . .
Williamsport, PA . . . . .
Williamstown, KY . . . .
Willoughby, OH . . . . .
Wilmington, DE . . . . . .
Wilmington, DE . . . . . .
Wilmington, DE . . . . . .
Wilmington, DE . . . . . .
Wilmington, NC . . . . .
Wilmington, NC . . . . .
Windsor, VA . . . . . . . .
Winston-Salem, NC . . .
Winter Garden, FL . . . .
Winter Springs, FL . . .
Witherwack, UK . . . . .
Wolverhampton, UK . .
Woodbury, MN . . . . . .
Woodstock, VA . . . . . .
Worcester, MA . . . . . . .
Worcester, MA . . . . . . .
Yardley, PA . . . . . . . . .
Yardley, PA . . . . . . . . .
Yeadon, PA . . . . . . . . .
York, PA . . . . . . . . . . .
York, PA . . . . . . . . . . .
York, PA . . . . . . . . . . .
York, UK . . . . . . . . . . .
Youngsville, NC . . . . .
Zephyrhills, FL . . . . . .
Zionsville, IN . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,427
660
1,480
620
828
1,960
1,347
890
740
1,420
1,582
890
855
2,517
3,864
1,571
1,400
860
630
260
900
753
1,187
919
780
70
1,774
800
1,376
2,843
2,266
210
400
1,148
360
1,110
1,152
944
1,573
1,317
594
3,500
2,300
773
1,561
1,075
976
1,050
1,121
2,961
380
2,131
1,610
15,679
5,261
5,724
17,790
5,104
24,614
19,395
12,122
8,287
5,373
10,282
15,964
11,966
7,054
3,790
14,982
11,000
8,873
19,747
2,240
10,134
3,457
5,728
6,926
1,899
6,430
8,655
9,494
13,454
36,959
9,503
2,991
15,355
6,514
2,514
7,937
14,826
6,915
6,678
20,935
5,108
54,099
9,060
14,918
9,442
10,694
9,357
4,212
7,586
8,266
10,686
6,671
22,400
—
—
544
38
—
—
—
—
4,076
—
—
1
—
723
—
—
—
—
—
129
—
—
—
—
—
—
—
114
—
—
—
—
—
—
488
—
—
593
624
298
—
—
6,000
—
—
—
—
—
—
848
—
—
1,683
1,427
660
1,592
620
828
1,960
1,347
890
740
1,420
1,582
890
855
2,707
3,864
1,571
1,400
860
630
260
900
753
1,187
919
780
70
1,774
800
1,376
2,843
2,266
210
400
1,148
360
1,110
1,152
1,015
1,692
1,317
594
3,500
2,300
773
1,561
1,075
976
1,050
1,121
3,185
380
2,131
1,609
15,679
5,261
6,156
17,828
5,104
24,614
19,395
12,122
12,363
5,373
10,282
15,965
11,966
7,587
3,790
14,982
11,000
8,873
19,747
2,369
10,134
3,457
5,728
6,926
1,899
6,430
8,655
9,608
13,454
36,959
9,503
2,991
15,355
6,514
3,002
7,937
14,826
7,437
7,183
21,233
5,108
54,099
15,060
14,918
9,442
10,694
9,357
4,212
7,586
8,890
10,686
6,671
24,084
766
1,805
890
3,783
219
672
888
441
10,273
218
424
2,462
474
1,290
159
597
5,288
2,058
3,840
277
2,218
160
722
276
100
2,649
349
2,481
525
1,388
381
1,630
2,307
828
1,337
1,618
573
1,265
1,232
1,665
594
14,483
4,863
609
459
401
372
198
322
1,225
1,563
297
5,782
2018
2006
2015
2010
2018
2019
2018
2018
1998
2018
2018
2014
2018
2013
2018
2018
2006
2011
2012
2015
2011
2018
2018
2018
2018
2005
2018
2011
2018
2018
2018
1999
2014
2018
2003
2012
2018
2013
2013
2017
2018
2007
2008
2018
2018
2018
2018
2018
2018
2014
2014
2018
2010
1998 800 Hamburg Turnpike
2007 1818 Martin Drive
2015 159 Northampton
2011 2130 Continental Dr
2006 5010 Grand Ridge Drive
2000 197 Cahill Cross Road
1998 510 Prospect Avenue
1975 425 Buttonwood Street
2001 690 Cooper Rd.
1982 1060 Eastwind Drive
1980 215 Huber Village Boulevard
2013 937 E. 186th Street
1997 28400 Center Ridge Road
2011 141b Milton Road
1961 11901 Georgia Avenue
2000 18 Eden Lane
1997 505 North Maize Road
2012 10604 E 13th Street North
2009 2050 North Webb Road
1992 900 N Bayshore Dr
2012 10600 E 13th Street North
1970 1548 Sans Souci Parkway
2000 1811 Jamestown Rd
1976 300 Leader Drive
1972 101 Leader Drive
1987 201 Kimberly Lane
1974 37603 Euclid Avenue
1970 810 S Broom Street
1998 700 1/2 Foulk Road
1988 5651 Limestone Road
1984 700 Foulk Road
1999 3501 Converse Dr.
2012 3828 Independence Blvd
1999 23352 Courthouse Hwy
1996 2980 Reynolda Rd.
2013 720 Roper Road
1999 1057 Willa Springs Drive
2009 Whitchurch Road
2011 378 Prestonwood Road
2015 2195 Century Avenue South
2001 803 S Main St
2009 101 Barry Road
1993 378 Plantation St.
1995 493 Stony Hill Road
1990 1480 Oxford Valley Road
1963 14 Lincoln Avenue
1972 200 Pauline Drive
1983 2400 Kingston Court
1979 1770 Barley Road
2006 Rosetta Way, Boroughbridge
Road
2013 100 Sunset Drive
1987 38220 Henry Drive
2009 11755 N Michigan Rd
Triple-net Total
. . . . .
$306,038
$1,036,151
$7,894,992
$351,136
$1,057,708
$8,224,571
$1,272,903
159
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2019
(Dollars in thousands)
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Land
Address
Outpatient Medical:
Addison, IL . . . . . . . . . . . .
$ 5,762
$
102
$18,842
$ —
$
102
$18,842
$
575
Agawam, MA . . . . . . . . . .
Allen, TX . . . . . . . . . . . . .
Alpharetta, GA . . . . . . . . .
Alpharetta, GA . . . . . . . . .
Alpharetta, GA . . . . . . . . .
Alpharetta, GA . . . . . . . . .
Alpharetta, GA . . . . . . . . .
Anderson, IN . . . . . . . . . . .
Appleton, WI
. . . . . . . . . .
Appleton, WI
. . . . . . . . . .
Arcadia, CA . . . . . . . . . . .
Arlington, TX . . . . . . . . . .
Atlanta, GA . . . . . . . . . . . .
Atlanta, GA . . . . . . . . . . . .
Atlanta, GA . . . . . . . . . . . .
Austin, TX . . . . . . . . . . . .
Austin, TX . . . . . . . . . . . .
Baltimore, MD . . . . . . . . .
Bardstown, KY . . . . . . . . .
Bartlett, TN . . . . . . . . . . . .
Bel Air, MD . . . . . . . . . . .
Bellaire, TX . . . . . . . . . . .
Bellaire, TX . . . . . . . . . . .
Bellevue, NE . . . . . . . . . . .
Bend, OR . . . . . . . . . . . . .
Berkeley Heights, NJ . . . .
Bettendorf, IA . . . . . . . . . .
Beverly Hills, CA . . . . . . .
Beverly Hills, CA . . . . . . .
—
—
—
—
—
—
—
—
7,045
12,343
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Beverly Hills, CA . . . . . . .
33,729
Beverly Hills, CA . . . . . . .
—
Beverly Hills, CA . . . . . . .
78,271
Birmingham, AL . . . . . . . .
Birmingham, AL . . . . . . . .
Boca Raton, FL . . . . . . . . .
Boca Raton, FL . . . . . . . . .
Boerne, TX . . . . . . . . . . . .
Boynton Beach, FL . . . . . .
Boynton Beach, FL . . . . . .
Boynton Beach, FL . . . . . .
Boynton Beach, FL . . . . . .
Bradenton, FL . . . . . . . . . .
Bradenton, FL . . . . . . . . . .
Brandon, FL . . . . . . . . . . .
—
8,477
—
—
—
—
—
—
—
—
—
—
1,072
726
476
1,862
548
773
1,769
584
1,881
3,782
5,408
82
4,931
—
1,947
1,066
1,688
4,490
274
187
—
5,482
5,572
5,164
14,196
14,694
—
17,103
18,902
36,152
21,077
8,866
20,440
23,219
18,243
18,720
43,425
24,248
10,112
6,784
31,222
7,537
15,015
24,769
32,478
72,478
—
16,680
16,516
30,338
49,555
—
20,766
19,863
32,603
18,863
52,772
3,940
896
31
109
50
13,324
214
2,048
2,048
1,184
1,035
1,437
92,806
7,110
40,730
31,690
28,639
1,192
87,366
12,315
13,755
12,312
34,002
12,951
40,369
5,611
7,692
7,403
9,799
4,298
7,006
—
1,302
—
—
611
115
762
—
—
—
4,825
413
7,281
2,062
2,258
—
—
—
—
2,346
56
—
—
2
—
—
73
3,591
1,683
1,149
420
897
—
6
444
4,125
915
3,178
7,597
1,233
1,705
417
17
—
1,072
726
476
1,862
548
773
1,769
584
1,881
3,782
5,618
82
5,387
—
2,172
1,066
1,688
4,490
274
187
—
5,482
5,572
5,164
15,498
14,694
—
17,714
19,017
36,914
21,077
8,866
20,440
27,834
18,656
25,545
45,487
26,281
10,112
6,784
31,222
7,537
17,361
24,825
32,478
72,478
—
5,329
5,694
—
6,751
7,097
14,961
2,042
—
—
11,877
4,290
12,588
14,031
8,775
926
279
—
1,765
7,436
2,385
790
1,172
2018
2019
2012
2011
2011
2011
2011
2011
2017
2019
2019
2006
2012
2006
2012
2012
2017
2019
2019
2010
2007
2014
2019
2019
2012 303 West Lake Street
2005 230-232 Main Street
2006 1105 N Central Expressway
2003 11975 Morris Road
1900 940 North Point Parkway
2007 3300 Old Milton Parkway
1993 3400-A Old Milton Parkway
1999 3400-C Old Milton Parkway
2016 3125 S. Scatterfield Rd.
2004 5320 W Michael Drive
2005 2323 N Casaloma Drive
1984 301 W. Huntington Drive
2012 902 W. Randol Mill Road
1991 755 Mt. Vernon Hwy.
2006 5670 Peachtree-Dunwoody
Road
1984 975 Johnson Ferry Road
2017 5301-B Davis Lane
2015 5301-A Davis Lane
2014 1420 Key Highway
2006 4359 New Shepherdsville Rd
2004 2996 Kate Bond Rd.
2016 12 Medstar Boulevard
2007 5420 WEST LOOP SOUTH
2007 5410-5420 WEST LOOP
SOUTH
—
16,682
5,909
2010
2010 2510 Bellevue Medical Center
Drive
16,516
30,338
830
2019
2001 1501 Northeast Medical
1,117
928
7,885
5,461
6,111
793
13,738
286
480
4,018
15,196
4,004
13,758
5,995
4,106
4,266
2,337
1,085
425
Center Drive
1978 1 Diamond Hill Road
2014 2140 53rd Avenue
1946 9675 Brighton Way
1946 416 North Bedford
1950 435 North Bedford
1955 415 North Bedford
1989 436 North Bedford
2015 4600 Highway 280
1985 3485 Independence Drive
1993 9960 S. Central Park
Boulevard
1995 9970 S. Central Park Blvd.
2007 134 Menger Springs Road
1995 10301 Hagen Ranch Road
1996 10075 Jog Rd.
1995 8188 Jog Rd.
1997 8200 Jog Road
1975 315 75th Street West
2006 7005 Cortez Road West
2016 2020 Town Center Boulevard
2019
2013
2015
2015
2015
2015
2015
2019
2018
2012
2006
2011
2013
2007
2006
2006
2014
2014
2018
49,555
—
20,766
19,863
32,603
18,885
52,772
3,940
896
251
214
86
14,049
320
2,185
2,185
1,184
1,035
1,437
92,806
7,183
44,321
33,373
29,788
1,590
88,263
12,315
13,761
12,536
38,022
13,830
42,822
13,102
8,788
8,971
10,216
4,315
7,006
160
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Bridgeton, MO . . . . . . . . .
Bridgeton, MO . . . . . . . . .
Buckhurst Hill, UK . . . . . .
Burleson, TX . . . . . . . . . . .
Burnsville, MN . . . . . . . . .
Cary, NC . . . . . . . . . . . . . .
Castle Rock, CO . . . . . . . .
Castle Rock, CO . . . . . . . .
Cedar Park, TX . . . . . . . . .
Chapel Hill, NC . . . . . . . .
Chapel Hill, NC . . . . . . . .
Chapel Hill, NC . . . . . . . .
—
—
—
—
—
—
—
—
—
—
5,161
5,161
Chapel Hill, NC . . . . . . . .
14,669
Charleston, SC . . . . . . . . .
Charlotte, NC . . . . . . . . . .
Charlotte, NC . . . . . . . . . .
Charlotte, NC . . . . . . . . . .
Charlotte, NC . . . . . . . . . .
Charlotte, NC . . . . . . . . . .
Chicopee, MA . . . . . . . . . .
Chula Vista, CA . . . . . . . .
Chula Vista, CA . . . . . . . .
Chula Vista, CA . . . . . . . .
Chula Vista, CA . . . . . . . .
Cincinnati, OH . . . . . . . . .
Cincinnati, OH . . . . . . . . .
Claremont, CA . . . . . . . . .
Clarkson Valley, MO . . . .
Clear Lake, TX . . . . . . . . .
Clyde, NC . . . . . . . . . . . . .
Columbia, MD . . . . . . . . .
Columbia, MO . . . . . . . . .
Columbia, MO . . . . . . . . .
Columbia, MO . . . . . . . . .
Columbia, MD . . . . . . . . .
Columbia, MD . . . . . . . . .
Coon Rapids, MN . . . . . . .
Coral Springs, FL . . . . . . .
Coral Springs, FL . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,701
450
11,989
10
—
2,816
80
—
132
488
1,970
1,970
5,681
2,815
10
30
40
1,746
1,158
6,078
1,045
826
1,114
1,075
—
537
3,950
—
—
1,433
23
438
488
199
12,159
2,333
—
2,109
1,313
Costa Mesa, CA . . . . . . . .
21,243
22,033
Cypress, TX . . . . . . . . . . .
Dade City, FL . . . . . . . . . .
Dallas, TX . . . . . . . . . . . . .
Dallas, TX . . . . . . . . . . . . .
Dallas, TX . . . . . . . . . . . . .
Deerfield Beach, FL . . . . .
Delray Beach, FL . . . . . . .
Dunkirk, MD . . . . . . . . . . .
Durham, NC . . . . . . . . . . .
Durham, NC . . . . . . . . . . .
Durham, NC . . . . . . . . . . .
Edina, MN . . . . . . . . . . . . .
El Paso, TX . . . . . . . . . . . .
Elmhurst, IL . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,287
1,211
122
6,086
462
2,408
1,882
259
1,212
1,403
1,751
310
677
41
6,228
21,221
50,907
12,611
31,596
11,146
13,004
11,795
23,753
2,390
8,874
8,925
25,035
25,648
24,796
61,799
40,606
8,645
8,802
15,842
22,252
5,557
15,459
7,165
17,880
10,122
20,168
35,592
13,882
22,062
33,885
12,949
16,033
23,403
72,636
19,232
26,679
12,189
13,118
24,332
—
5,511
15,418
18,007
52,488
7,809
34,767
2,458
22,858
25,163
44,425
13,105
17,075
39,562
245
1,248
2,540
701
2,182
—
536
195
4,448
—
50
5
15
—
—
—
—
—
—
—
—
—
—
—
288
—
—
—
20
—
3,041
—
—
—
320
1,920
1,143
—
—
135
—
—
25
1,437
1,984
793
816
—
2
—
—
—
1,628
63
Gross Amount at Which
Carried at Close of Period
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
6,673
22,469
52,963
13,312
33,778
11,146
13,541
11,990
28,201
2,390
8,924
8,930
25,050
25,648
24,796
61,799
40,606
8,645
8,802
15,842
22,252
5,557
15,459
7,165
18,166
10,122
20,168
35,592
11,583
22,062
27,596
12,949
16,033
23,403
72,956
21,152
27,822
12,189
13,118
24,467
—
5,511
15,443
18,994
54,472
8,470
35,014
2,458
22,860
25,163
44,425
13,105
18,703
39,625
1,009
7,743
6,406
4,701
9,564
460
3,543
747
3,471
61
406
462
1,193
5,380
1,003
2,329
1,482
564
509
—
1,075
280
357
167
4,254
548
448
14,085
1,544
402
8,367
716
629
823
3,187
5,855
6,473
516
415
4,889
—
1,675
2,311
1,362
12,770
3,608
18,094
128
4,750
552
801
4,988
8,779
1,622
2017
2010
2015
2011
2013
2019
2014
2016
2017
2019
2018
2018
2018
2014
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2012
2019
2019
2009
2013
2019
2015
2019
2019
2019
2018
2012
2013
2019
2019
2017
2016
2011
2013
2018
2012
2011
2006
2019
2013
2019
2019
2010
2006
2018
2008 3440 De Paul Ln.
2006 12266 DePaul Dr
2013 High Road
2007 12001 South Freeway
2014 14101 Fairview Dr
2007 540 Waverly Place
2013 2352 Meadows Boulevard
2017 Meadows Boulevard
2014 1401 Medical Parkway,
Building 2
2010 100 Perkins Drive
2007 6011 Farrington Road
2007 6013 Farrington Road
2006 2226 North Carolina Highway
54
2009 325 Folly Road
1971 1900 Randolph Road
1994 1918 Randolph Road
1989 1718 East Fourth Street
1998 309 South Sharon Amity Road
1998 5039 Airport Center Parkway
2005 444 Montgomery Street
1973 480 4th Avenue
1985 450 4th Avenue
2008 971 Lane Ave
2006 959 Lane Ave
2013 3301 Mercy Health Boulevard
2001 4850 Red Bank Expressway
2008 1601 Monte Vista Avenue
2010 15945 Clayton Rd
2014 1010 South Ponds Drive
2012 581 Leroy George Drive
1982 5450 & 5500 Knoll N Dr.
1994 1601 E. Broadway
1999 1605 E. Broadway
2007 1705 E. Broadway
2009 10710 Charter Drive
2002 10700 Charter Drive
2014 11850 Blackfoot Street NW
2005 2901 Coral Hills Drive
2008 3001 Coral Hills Drive
2007 1640 Newport Boulevard
1900 14940 Mueschke Road
1998 13413 US Hwy 301
2014 8196 Walnut Hill Lane
2010 10740 North Central
Expressway
2004 7115 Greenville Avenue
2001 1192 East Newport Center
Drive
1985 5130-5150 Linton Blvd.
1997 10845 Town Center Blvd
2012 1823 Hillandale Road
2000 120 William Penn Plaza
2004 3916 Ben Fanklin Boulevard
2003 8100 W 78th St
1997 2400 Trawood Dr.
2011 133 E Brush Hill Road
Land
1,501
450
12,473
10
—
2,816
79
—
132
488
1,970
1,970
5,681
2,815
10
30
40
1,746
1,158
6,078
1,045
826
1,114
1,075
2
537
3,950
—
2,319
1,433
9,353
438
488
199
12,159
2,333
—
2,109
1,313
22,033
1,287
1,211
122
6,536
462
2,540
2,451
259
1,212
1,403
1,751
310
677
41
161
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Land
Address
Elyria, OH . . . . . . . . . . . . . .
Escondido, CA . . . . . . . . . .
Everett, WA . . . . . . . . . . . .
Fenton, MO . . . . . . . . . . . . .
Fenton, MO . . . . . . . . . . . . .
Fish Kill, NY . . . . . . . . . . .
Florham Park, NJ . . . . . . . .
Flower Mound, TX . . . . . . .
Flower Mound, TX . . . . . . .
Flower Mound, TX . . . . . . .
Fort Worth, TX . . . . . . . . . .
Fort Worth, TX . . . . . . . . . .
Franklin, TN . . . . . . . . . . . .
Frederick, MD . . . . . . . . . . .
Frederick, MD . . . . . . . . . . .
Fresno, CA . . . . . . . . . . . . .
Frisco, TX . . . . . . . . . . . . . .
Frisco, TX . . . . . . . . . . . . . .
Gallatin, TN . . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Gardendale, AL . . . . . . . . . .
4,246
Garland, TX . . . . . . . . . . . .
Gastonia, NC . . . . . . . . . . . .
Gig Harbor, WA . . . . . . . . .
Glendale, CA . . . . . . . . . . .
Glendale, CA . . . . . . . . . . .
Gloucester, VA . . . . . . . . . .
Grand Prairie, TX . . . . . . . .
Grapevine, TX . . . . . . . . . .
Grapevine, TX . . . . . . . . . .
Greenville, SC . . . . . . . . . . .
Greenwood, IN . . . . . . . . . .
Greenwood, IN . . . . . . . . . .
Harrisburg, NC . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
Hattiesburg, MS . . . . . . . . .
17,986
Haymarket, VA . . . . . . . . . .
Henderson, NV . . . . . . . . . .
Henderson, NV . . . . . . . . . .
Henderson, NV . . . . . . . . . .
Highland, IL . . . . . . . . . . . .
Hopewell Junction, NY . . . .
Hopewell Junction, NY . . . .
Houston, TX . . . . . . . . . . . .
Houston, TX . . . . . . . . . . . .
Houston, TX . . . . . . . . . . . .
Houston, TX . . . . . . . . . . . .
Houston, TX . . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
Houston, TX . . . . . . . . . . . .
3,775
Howell, MI . . . . . . . . . . . . .
Humble, TX . . . . . . . . . . . .
Huntersville, NC . . . . . . . . .
Jackson, MI . . . . . . . . . . . . .
Jacksonville, FL . . . . . . . . .
—
—
—
—
—
3,263
2,278
4,842
958
369
2,144
8,578
737
4,164
4,620
462
401
2,338
1,065
1,930
1,497
—
—
20
1,150
4,952
569
80
70
37
2,128
981
—
3,365
1,567
2,098
1,262
1,347
3,155
1,250
2,587
7,372
5,492
—
2,164
2,316
10,403
28,176
20,967
26,010
27,461
13,911
36,880
61,779
9,276
27,027
—
26,020
5,266
12,138
7,430
18,748
12,669
18,635
15,309
21,801
8,162
32,718
1,092
30,810
44,354
18,398
9,169
6,086
5,943
15,669
5,167
21,538
7,045
3,059
34,710
29,254
5,654
24,027
18,718
8,834
5,333
5,332
—
—
—
62
—
198
—
—
232
1,171
—
373
—
3,060
—
—
—
219
2,357
1,763
211
—
—
1,302
—
310
5
—
4,778
2,248
—
638
8
—
—
—
—
—
—
31
—
—
—
3,263
2,278
4,842
958
369
2,144
8,578
737
4,164
4,620
462
401
2,338
1,065
1,930
1,497
—
—
44
1,150
4,952
569
80
70
37
2,128
981
2,081
3,365
1,567
2,098
1,262
1,347
3,155
1,250
2,587
7,372
5,492
—
2,164
2,316
10,403
28,176
20,967
26,072
27,461
14,109
36,880
61,779
9,508
28,198
—
26,393
5,266
15,198
7,430
18,748
12,669
18,854
17,666
23,540
8,373
32,718
1,092
32,112
44,354
18,708
9,174
6,086
8,640
17,917
5,167
22,176
7,053
3,059
34,710
29,254
5,654
24,027
18,718
8,865
5,333
5,332
—
655
536
8,671
8,411
3,371
—
3,905
1,916
6,161
—
6,226
1,508
6,716
266
905
—
7,798
7,383
9,124
465
883
128
5,032
1,011
7,136
473
2,399
2,004
4,449
504
4,393
1,953
170
—
595
141
730
504
1,897
—
—
8
2019
2019
2010
2013
2013
2019
2017
2015
2014
2014
2012
2014
2007
2019
2019
2019
2007
2007
2010
2018
2019
2019
2010
2019
2007
2018
2012
2014
2014
2019
2014
2014
2019
2019
2019
2019
2019
2019
2012
2019
2019
2011
2008 303 Chestnut Commons Drive
1994 225 East 2nd Avenue
2011 13020 Meridian Ave. S.
2009 1011 Bowles Avenue
2009 1055 Bowles Avenue
2008 2507 South Road
2017 150 Park Avenue
2014 2560 Central Park Avenue
2012 4370 Medical Arts Drive
1900 Medical Arts Drive
2012 10840 Texas Health Trail
2007 7200 Oakmont Boulevard
1988 100 Covey Drive
1979 194 Thomas Johnson Drive
2006 45 Thomas Johnson Drive
2004 1105 E Spruce Ave
2004 4401 Coit Road
2004 4461 Coit Road
1997 300 Steam Plant Rd
2005 2217 Decatur Highway
2018 7217 Telecome Parkway
2000 934 Cox Road
2009 11511 Canterwood Blvd. NW
2008 1500 E Chevy Chase Drive
2002 222 W. Eulalia St.
2008 5659 Parkway Drive
2009 2740 N State Hwy 360
2002 2040 W State Hwy 114
2002 2020 W State Hwy 114
1987 10 Enterprise Boulevard
2013 3000 S State Road 135
2010 333 E County Line Road
2012 9550 Rocky River Road
2012 3688 Veterans Memorial
Drive
2008 15195 Heathcote Blvd
2002 2825 Siena Heights Drive
2005 2845 Siena Heights Drive
2005 2865 Siena Heights Drive
2013 12860 Troxler Avenue
1999 10 Cranberry Drive
2015 1955 NY-52
1900 F.M. 1960 & Northgate Forest
Dr.
5,837
33,109
1,028
5,837
34,137
12,856
2012
2005 15655 Cypress Woods
2,988
3,688
1,099
377
2,000
—
—
668
3,562
18,018
13,313
1,604
13,660
13,928
9,941
42,143
17,294
27,249
—
132
2,988
3,688
81,406
12,815
—
794
—
—
—
—
377
2,000
1,702
—
668
3,562
18,018
13,445
71,294
13,660
14,722
8,239
42,143
17,294
27,249
—
3,990
16,843
741
747
1,064
1,357
5,075
799
2016
2012
2012
2018
2016
2013
2019
2013
2019
Medical Dr.
2019 13105 Wortham Center Drive
2007 10701 Vintage Preserve
Parkway
1998 2727 W Holcombe Boulevard
2011 20207 Chasewood Park Drive
2017 1225 South Latson Road
2014 8233 N. Sam Houston
Parkway E.
2004 10030 Gilead Road
2009 1201 E Michigan Avenue
2006 10475 Centurion Parkway
North
162
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Land
Address
Jefferson City, TN . . . . . . .
Jonesboro, GA . . . . . . . . . .
Jonesboro, GA . . . . . . . . . .
Jupiter, FL . . . . . . . . . . . . . .
Jupiter, FL . . . . . . . . . . . . . .
Killeen, TX . . . . . . . . . . . . .
Killeen, TX . . . . . . . . . . . . .
Killeen, TX . . . . . . . . . . . . .
Knoxville, TN . . . . . . . . . . .
La Jolla, CA . . . . . . . . . . . .
La Jolla, CA . . . . . . . . . . . .
La Quinta, CA . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
Lacey, WA . . . . . . . . . . . . .
6,589
Lake St Louis, MO . . . . . . .
Lakeway, TX . . . . . . . . . . .
Lakewood, CA . . . . . . . . . .
Lakewood, WA . . . . . . . . . .
Land O Lakes, FL . . . . . . . .
Land O Lakes, FL . . . . . . . .
Las Vegas, NV . . . . . . . . . .
Las Vegas, NV . . . . . . . . . .
Lincoln, NE . . . . . . . . . . . . .
Little Rock, AR . . . . . . . . . .
London, UK . . . . . . . . . . . .
London, UK . . . . . . . . . . . .
London, UK . . . . . . . . . . . .
Los Alamitos, CA . . . . . . . .
Los Gatos, CA . . . . . . . . . . .
Los Gatos, CA . . . . . . . . . . .
Loxahatchee, FL . . . . . . . . .
Loxahatchee, FL . . . . . . . . .
Loxahatchee, FL . . . . . . . . .
Lubbock, TX . . . . . . . . . . . .
Lynbrook, NY . . . . . . . . . . .
Madison, WI . . . . . . . . . . . .
Margate, FL . . . . . . . . . . . .
Marietta, GA . . . . . . . . . . . .
Matthews, NC . . . . . . . . . . .
Menasha, WI . . . . . . . . . . . .
Merced, CA . . . . . . . . . . . . .
Meridian, ID . . . . . . . . . . . .
Mesquite, TX . . . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
42,982
27,196
—
—
—
—
—
—
—
—
Mission Hills, CA . . . . . . . .
23,325
Missouri City, TX . . . . . . . .
—
Mobile, AL . . . . . . . . . . . . .
15,755
Moline, IL . . . . . . . . . . . . . .
Monticello, MN . . . . . . . . .
Moorestown, NJ . . . . . . . . .
Mount Juliet, TN . . . . . . . . .
Mount Kisco, NY . . . . . . . .
Mount Vernon, IL . . . . . . . .
Murrieta, CA . . . . . . . . . . . .
Murrieta, CA . . . . . . . . . . . .
—
6,367
—
—
—
—
—
—
109
567
627
2,825
2,252
—
1,907
760
199
12,855
9,425
3,266
1,751
240
2,801
146
72
3,025
1,376
433
2,319
1,420
3,021
5,229
17,983
4,081
39
488
16,896
1,340
1,553
1,637
2,286
10,028
3,670
219
2,682
10
1,374
—
3,206
496
—
1,360
2,759
—
61
6
1,566
12,632
—
—
3,800
16,453
16,329
16,554
5,858
11,415
3,756
3,575
22,878
45,961
32,658
26,525
22,066
10,345
14,249
—
14,885
16,017
26,249
6,750
4,928
4,612
29,723
16,058
11,551
157,802
28,107
18,340
21,961
—
6,509
4,694
5,048
72,893
37,319
28,329
9,293
20,053
32,741
13,861
13,772
27,107
3,834
42,276
7,143
25,180
8,783
18,489
50,896
11,697
51,220
24,892
47,190
—
—
—
—
1,298
3,889
2,235
—
143
—
1,496
392
668
—
337
—
1,956
707
—
—
—
1,486
711
—
678
7,098
1,300
—
—
—
1,490
1,680
1,280
—
658
—
—
1,516
—
2,963
815
—
—
6,889
—
13
69
139
867
1,779
—
109
110
—
109
567
627
3,036
2,639
—
1,907
795
199
12,855
9,425
3,279
1,751
240
2,801
146
72
3,025
1,376
433
2,319
1,420
3,021
5,440
18,709
4,246
39
488
16,896
1,440
1,650
1,719
2,286
10,028
3,670
219
2,703
10
1,345
—
3,206
496
4,791
1,360
2,759
—
61
362
1,601
12,632
—
—
3,800
16,453
16,329
16,554
6,945
14,917
5,991
3,575
22,986
45,961
34,154
26,917
22,721
10,345
14,586
—
16,841
16,724
26,249
6,750
4,928
6,098
30,434
16,058
12,018
164,174
29,242
18,340
21,961
—
7,899
6,277
6,246
72,893
37,977
28,329
9,293
21,548
32,741
16,853
14,587
27,107
3,834
44,374
7,143
25,193
8,852
18,628
51,407
13,441
51,220
25,001
47,300
—
163
559
482
452
3,289
6,242
387
655
8,746
1,003
7,206
4,894
5,515
530
5,462
—
6,771
4,648
2,035
581
2,088
2,962
11,316
124
1,454
19,858
3,537
7,081
9,127
—
3,475
2,948
2,942
—
1,635
620
410
3,465
983
2,827
5,593
—
1,203
10,268
595
990
1,416
4,661
14,676
6,077
—
7,330
20,411
—
2019
2019
2001 120 Hospital Drive
2009 7813 Spivey Station
Boulevard
2019
2007 7823 Spivey Station
Boulevard
2004 600 Heritage Dr.
2001 550 Heritage Dr.
1990 2301 S. Clear Creek
2012 5702 E Central Texas
Expressway
2010 2405 Clear Creek Rd
2012 1926 Alcoa Highway
1989 4150 Regents Park Row
1988 4120 & 4130 La Jolla Village
Drive
2006 47647 Caleo Bay Drive
1971 2555 Marvin Road Northeast
2008 400 Medical Dr
1900 Lohmans Crossing Road
1993 5750 Downey Ave.
2005 11307 Bridgeport Way SW
2009 2100 Via Bella
2011 2150 Via Bella
1997 1776 E. Warm Springs Rd.
1991 2870 S. Maryland Pkwy.
2003 575 South 70th St
2014 6119 Midtown Avenue
2007 17-19 View Road
2010 53 Parkside
2003 49 Parkside
2003 3771 Katella Ave.
1993 555 Knowles Dr.
1900 555 Knowles Dr.
1993 12989 Southern Blvd.
1994 12983 Southern Blvd.
1997 12977 Southern Blvd.
2006 4515 Marsha Sharp Freeway
1962 444 Merrick Road
2012 1102 South Park Street
2004 2960 N. State Rd 7
2016 4800 Olde Towne Parkway
1994 1450 Matthews Township
Parkway
1994 1550 Midway Place
2010 315 Mercy Ave.
2009 3277 E Louise Drive
2012 1575 I-30
1986 11550 Indian Hills Road
2016 7010 Highway 6
2003 6144 Airport Boulevard
2013 3900 28th Avenue Drive
2008 1001 Hart Boulevard
2012 401 Young Avenue
2005 5002 Crossings Circle
1996 90-110 South Bedford Road
2012 2 Good Samaritan Way
2011 28078 Baxter Rd.
1900 28078 Baxter Rd.
2007
2006
2018
2011
2010
2019
2015
2015
2014
2018
2010
2007
2006
2012
2017
2017
2007
2006
2010
2019
2015
2015
2015
2007
2006
2019
2006
2006
2006
2019
2018
2019
2019
2016
2019
2016
2009
2019
2012
2014
2015
2018
2012
2012
2011
2007
2019
2011
2010
2014
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Myrtle Beach, SC . . . . . .
—
Nampa, ID . . . . . . . . . . . .
15,675
Nashville, TN . . . . . . . . .
New Albany, IN . . . . . . .
Newburgh, NY . . . . . . . .
Newburyport, MA . . . . . .
Niagara Falls, NY . . . . . .
Niagara Falls, NY . . . . . .
Norfolk, VA . . . . . . . . . .
—
—
—
—
—
—
—
North Canton, OH . . . . . .
13,202
North Easton, MA . . . . . .
North Easton, MA . . . . . .
Norwood, OH . . . . . . . . .
Novi, MI . . . . . . . . . . . . .
Oklahoma City, OK . . . .
Oro Valley, AZ . . . . . . . .
Oxford, NC . . . . . . . . . . .
Palmer, AK . . . . . . . . . . .
Palmer, AK . . . . . . . . . . .
Pasadena, TX . . . . . . . . .
Pearland, TX . . . . . . . . . .
Pearland, TX . . . . . . . . . .
Pendleton, OR . . . . . . . . .
Phoenix, AZ . . . . . . . . . .
Phoenix, AZ . . . . . . . . . .
Phoenix, AZ . . . . . . . . . .
Phoenix, AZ . . . . . . . . . .
Pineville, NC . . . . . . . . . .
Plano, TX . . . . . . . . . . . .
Plano, TX . . . . . . . . . . . .
Plantation, FL . . . . . . . . .
Plantation, FL . . . . . . . . .
Port Orchard, WA . . . . . .
Poughkeepsie, NY . . . . .
Poughkeepsie, NY . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9,973
—
—
Poughkeepsie, NY . . . . .
19,065
Powell, TN . . . . . . . . . . .
Powell, TN . . . . . . . . . . .
Prince Frederick, MD . . .
Prince Frederick, MD . . .
Rancho Mirage, CA . . . .
Redmond, WA . . . . . . . .
Reno, NV . . . . . . . . . . . .
Richmond, TX . . . . . . . .
Richmond, VA . . . . . . . .
Rockwall, TX . . . . . . . . .
Rogers, AR . . . . . . . . . . .
Rolla, MO . . . . . . . . . . . .
Rome, GA . . . . . . . . . . . .
Roseville, MN . . . . . . . . .
Roxboro, NC . . . . . . . . . .
Salem, NH . . . . . . . . . . . .
San Antonio, TX . . . . . . .
San Antonio, TX . . . . . . .
San Antonio, TX . . . . . . .
San Antonio, TX . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,357
3,439
1,806
2,411
9,213
3,104
1,433
454
1,138
2,518
2,336
2,882
1,017
895
216
89
478
283
217
1,700
1,500
9,594
—
199
109
229
1,149
961
793
5,423
8,563
8,848
2,810
4,035
6,513
5,128
179
179
229
179
7,292
5,015
1,117
2,000
2,969
132
1,062
1,931
99
2,963
368
1,655
1,057
1,038
2,915
3,050
3,658
21,566
7,165
16,494
32,354
19,370
10,891
8,362
26,989
24,452
19,876
15,999
6,638
36,944
18,762
18,339
4,971
8,335
29,705
8,009
11,253
32,753
10,312
3,853
2,207
5,867
48,018
6,974
83,209
20,698
10,666
9,262
22,716
30,459
27,863
20,769
27,417
34,903
26,889
12,801
15,141
26,697
21,972
9,118
26,697
17,197
28,680
47,639
29,597
20,169
2,477
14,050
10,101
9,173
11,141
12,073
3,658
21,566
10,917
16,643
32,354
19,370
11,122
8,672
26,989
24,452
19,876
15,999
6,638
36,944
18,762
19,440
4,971
8,600
31,191
8,167
11,259
32,731
10,692
3,853
2,207
5,867
59,427
9,436
88,568
22,576
15,426
11,238
22,755
30,459
27,863
20,769
27,417
34,903
26,889
12,801
15,141
27,777
24,211
9,122
28,026
17,590
31,091
47,640
29,597
20,169
2,477
14,070
10,224
10,963
11,141
12,104
—
—
3,888
152
—
—
519
310
—
—
—
—
—
—
—
1,101
—
265
1,486
158
6
191
380
—
—
—
11,409
2,582
5,359
1,878
4,772
2,036
39
—
—
—
—
—
—
—
—
1,080
2,239
4
1,450
393
2,411
1
—
—
—
46
123
1,848
—
31
1,357
3,439
1,942
2,414
9,213
3,104
1,721
454
1,138
2,518
2,336
2,882
1,017
895
216
89
478
283
217
1,700
1,500
9,807
—
199
109
229
1,149
1,081
793
5,423
8,575
8,908
2,810
4,035
6,513
5,128
179
179
229
179
7,292
5,015
1,117
2,000
3,090
132
1,062
1,931
99
2,963
368
1,681
1,057
1,096
2,915
3,050
164
565
—
5,061
3,643
—
684
6,187
3,620
1,006
—
—
—
50
1,013
5,419
7,305
125
549
11,825
1,328
1,739
6,265
1,672
132
138
241
27,378
5,009
23,750
13,141
8,343
7,026
1,037
—
—
—
907
699
792
389
—
9,474
10,179
856
9,730
4,751
10,619
14,809
1,510
—
63
3,713
5,375
5,795
462
600
2019
2019
2006
2014
2019
2019
2007
2007
2019
2019
2019
2019
2019
2019
2013
2007
2019
2017
2007
2012
2012
2014
2012
2019
2019
2019
2006
2006
2012
2008
2006
2006
2018
2019
2019
2019
2019
2019
2019
2019
2019
2010
2006
2015
2012
2012
2011
2011
2019
2019
2019
2014
2006
2006
2019
2016
1996 8170 Rourk Street
2017 1512 12th Avenue
1986 310 25th Ave. N.
2001 2210 Green Valley Road
2015 1200 NY-300
2008 One Wallace Bashaw Jr. Way
1995 6932-6934 Williams Rd
2004 6930 Williams Rd
2014 155 Kingsley Lane
2014 7442 Frank Avenue
2007 15 Roche Brothers Way
2008 31 Roche Brothers Way
2006 4685 Forest Avenue
2008 26750 Providence Parkway
2008 535 NW 9th Street
2004 1521 East Tangerine Rd.
2011 107 East McClanahan Street
2018 2480 S Woodworth Loop
2006 2490 South Woodworth Loop
2013 5001 E Sam Houston
Parkway S
2013 2515 Business Center Drive
2013 11511 Shadow Creek Parkway
2013 3001 St. Anthony Way
1980 9225 N 3rd Street
1986 9327 North 3rd Street
1994 9100 N 2nd Street
1998 2222 E. Highland Ave.
1988 10512 Park Rd.
2005 6020 West Parker Road
2007 6957 Plano Parkway
1997 851-865 SW 78th Ave.
1996 600 Pine Island Rd.
1995 450 South Kitsap Boulevard
2010 30 Columbia Street
2006 600 Westage Drive
2012 1910 South Road
2005 7557 A Dannaher Drive
2008 7557 B Dannaher Drive
2009 130 Hospital Road
1991 110 Hospital Road
2005 72780 Country Club Drive
2011 18100 NE Union Hill Rd.
1991 343 Elm St.
2016 22121 FM 1093 Road
2008 7001 Forest Avenue
2008 3142 Horizon Road
2008 2708 Rife Medical Lane
2009 1605 Martin Spring Drive
2005 330 Turner McCall Boulevard
2015 1835 W County Road C
2000 799 Doctors Court
2013 31 Stiles Road
1999 19016 Stone Oak Pkwy.
1999 540 Stone Oak Centre Drive
2006 150 E Sonterra Blvd
2017 5206 Research Drive
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
San Antonio, TX . . . . . . .
Santa Clarita, CA . . . . . .
Santa Clarita, CA . . . . . .
Santa Clarita, CA . . . . . .
—
—
—
—
Santa Clarita, CA . . . . . .
25,000
Santa Clarita, CA . . . . . .
Seattle, WA . . . . . . . . . . .
Sewell, NJ . . . . . . . . . . . .
Sewell, NJ . . . . . . . . . . . .
Shakopee, MN . . . . . . . .
Shakopee, MN . . . . . . . .
Shenandoah, TX . . . . . . .
Sherman Oaks, CA . . . . .
—
—
—
—
5,393
9,093
—
—
Silverdale, WA . . . . . . . .
13,117
Somerville, NJ . . . . . . . .
Southlake, TX . . . . . . . . .
Southlake, TX . . . . . . . . .
Southlake, TX . . . . . . . . .
Southlake, TX . . . . . . . . .
Springfield, IL . . . . . . . . .
Springfield, IL . . . . . . . . .
Springfield, MA . . . . . . .
St Paul, MN . . . . . . . . . .
St. Louis, MO . . . . . . . . .
St. Paul, MN . . . . . . . . . .
Stamford, CT . . . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
Stockton, CA . . . . . . . . . .
11,639
Suffern, NY . . . . . . . . . . .
Suffolk, VA . . . . . . . . . . .
Sugar Land, TX . . . . . . .
Tacoma, WA . . . . . . . . . .
Tallahassee, FL . . . . . . . .
Tampa, FL . . . . . . . . . . . .
Tampa, FL . . . . . . . . . . . .
Temple, TX . . . . . . . . . . .
Timonium, MD . . . . . . . .
Tucson, AZ . . . . . . . . . . .
Tustin, CA . . . . . . . . . . . .
Tustin, CA . . . . . . . . . . . .
Tyler, TX . . . . . . . . . . . .
Van Nuys, CA . . . . . . . . .
Voorhees, NJ . . . . . . . . . .
Voorhees, NJ . . . . . . . . . .
Waco, TX . . . . . . . . . . . .
Waco, TX . . . . . . . . . . . .
Waco, TX . . . . . . . . . . . .
Waco, TX . . . . . . . . . . . .
Washington, PA . . . . . . .
. . . . . . . . . .
Wausau, WI
Waxahachie, TX . . . . . . .
Wellington, FL . . . . . . . .
Wellington, FL . . . . . . . .
Westlake Village, CA . . .
Westlake Village, CA . . .
—
—
—
—
—
—
—
—
—
—
—
—
61,899
—
—
—
—
—
—
14,496
19,273
—
—
—
—
6,360
7,999
938
—
—
278
295
—
4,410
1,242
164
509
707
—
—
3,451
3,400
3,000
2,875
592
16,437
2,338
28,384
185
39,284
20,618
38,428
11,616
53,859
11,350
18,089
21,135
32,186
21,176
22,244
—
15,471
18,123
698
30,549
1,569
177
2,721
49
336
2,706
—
4,966
696
1,566
3,543
—
—
4,319
1,462
2,900
8,829
1,302
3,345
3,361
2,903
—
6
6,404
125
35
441
2,250
3,981
2,050
303
580
107
2,487
2,553
10,350
3,519
6,615
37,695
17,247
39,507
41,153
16,844
37,211
11,511
15,532
64,307
17,449
12,234
7,270
9,954
12,568
4,925
541
12,039
114,853
36,187
96,075
24,251
164
113
2,537
28,632
31,706
12,175
18,069
11,047
16,933
9,776
15,851
—
20,669
2,550
11,594
—
1,076
409
6
—
—
156
62
3,412
12
2
—
—
—
48
—
31
—
400
2,397
386
2,636
—
—
229
—
—
—
—
—
26
161
1,113
223
1,913
—
—
757
1,817
—
—
—
106
17
—
—
—
2,229
6
95
938
5,304
5,277
11,872
295
4,407
4,410
1,242
164
509
773
4,574
3,121
3,451
3,400
3,000
2,875
592
16,437
17,703
25,657
185
39,284
17,287
38,837
11,622
53,859
11,350
18,179
16,623
32,477
21,188
22,246
—
15,471
18,123
4,571
3,884
5,165
178
6,311
3,670
17,817
641
21,033
4,472
5,640
2,083
7,246
919
6,349
—
350
5,863
2014
2014
2014
2014
2014
2014
2010
2018
2007
2010
2010
2013
2014
2018
2008
2014
2019
2012
2007 3903 Wiseman Boulevard
1976 23861 McBean Parkway
1998 23929 McBean Parkway
1996 23871 McBean Parkway
2013 23803 McBean Parkway
1989 24355 Lyons Avenue
2010 5350 Tallman Ave
2007 556 Egg Harbor Road
2009 239 Hurffville-Cross Keys
Road
1996 1515 St Francis Ave
2007 1601 St Francis Ave
2014 106 Vision Park Boulevard
1969 4955 Van Nuys Boulevard
2004 2200 NW Myhre Road
2007 30 Rehill Avenue
1900 Central Avenue
2017 925 E. Southlake Boulevard
2004 1545 East Southlake
Boulevard
698
30,597
8,090
2012
2004 1545 East Southlake
1,637
580
—
6,317
8,096
13,580
3,620
—
13,568
5,119
6,172
20,433
6,615
3,181
614
1,880
1,323
3,095
310
3,436
—
10,936
29,171
10,633
4
3
195
1,240
1,389
1,223
2,578
5,030
7,693
684
1,044
Boulevard
2011 1100 East Lincolnshire Blvd
2011 2801 Mathers Rd.
2012 305 Bicentennial Highway
2006 225 Smith Avenue N.
2001 2325 Dougherty Rd.
2007 435 Phalen Boulevard
2016 29 Hospital Plaza
2009 2488 N California Street
2007 257 Lafayette Avenue
2007 5838 Harbour View Blvd.
2005 11555 University Boulevard
2013 1608 South J Street
2011 One Healing Place
2003 14547 Bruce B Downs Blvd
1996 12500 N Dale Mabry
2012 2601 Thornton Lane
2017 2118 Greenspring Drive
1995 2055 W. Hospital Dr.
1976 14591 Newport Ave
1985 14642 Newport Ave
2013 1814 Roseland Boulevard
1991 6815 Noble Ave.
2012 200 Bowman Drive
1997 900 Centennial Blvd.
1962 6612 Fish Pond Road
1961 6620 Fish Pond Rd
2000 6600 Fish Pond Rd
1981 601 Highway 6 West
2010 100 Trich Drive
2017 1901 Westwood Center
Boulevard
2014 2460 N I-35 East
2003 1395 State Rd. 7
2000 10115 Forest Hill Blvd.
1989 1220 La Venta Drive
1975 1250 La Venta Drive
2010
2010
2019
2014
2007
2011
2015
2019
2011
2010
2012
2011
2010
2011
2017
2011
2015
2008
2015
2015
2019
2009
2010
2006
2018
2018
2018
2018
2018
2015
2016
2007
2006
2018
2018
1,568
177
2,721
49
336
2,701
—
4,966
696
1,620
3,543
—
—
4,319
1,462
2,900
8,850
1,325
3,345
3,361
2,903
—
99
6,477
125
35
441
2,250
3,981
2,050
303
580
326
2,487
2,553
10,351
3,550
6,615
38,095
19,644
39,898
43,789
16,844
37,211
11,686
15,532
64,307
17,449
12,234
7,270
9,980
12,708
6,015
764
13,952
114,853
36,187
96,739
25,995
164
113
2,537
28,738
31,723
12,175
18,069
11,047
18,943
9,782
15,946
165
Description
Encumbrances
Land
Building &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Building &
Improvements
Accumulated
Depreciation(1)
Year
Acquired
Year
Built
Address
Westville, IN . . . . . . . . . .
Winston-Salem, NC . . . .
Woodbridge, VA . . . . . . .
Yuma, AZ . . . . . . . . . . . .
Zephyrhills, FL . . . . . . . .
Zephyrhills, FL . . . . . . . .
Outpatient Medical
—
—
—
—
—
—
1,293
2,006
346
1,592
3,875
5,444
13,227
7,497
16,534
10,185
27,270
29,088
—
—
—
—
—
—
1,293
2,006
346
1,592
3,875
5,444
13,227
7,497
16,534
10,185
27,270
29,088
279
526
617
496
7,779
1,725
2019
2019
2018
2019
2011
2018
2010 1668 South US 421
1998 2025 Frontis Plaza
2012 12825 Minnieville Road
2004 2270 South Ridgeview Drive
1974 38135 Market Square Dr
2016 2352 Bruce B Downs
Boulevard
Total . . . . . . . . . . . . . .
$572,266
$885,789
$6,626,075
$323,055
$959,834
$6,875,085
$1,248,499
166
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2019
(Dollars in thousands)
Description
Encumbrances
Land
Buildings &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Buildings &
Improvements
Accumulated
Depreciation
Year
Acquired
Year
Built
Address
Assets Held For Sale:
Adelphi, MD . . . . . . . . . .
$
— $
1,429
$
Akron, OH . . . . . . . . . . .
Ayer, MA . . . . . . . . . . . .
Birmingham, AL . . . . . . .
Birmingham, AL . . . . . . .
Birmingham, AL . . . . . . .
Boardman, OH . . . . . . . .
Brookline, MA . . . . . . . .
Burlington, MA . . . . . . . .
Carmel, IN . . . . . . . . . . .
Carmel, IN . . . . . . . . . . .
Claremore, OK . . . . . . . .
Concord, NH . . . . . . . . . .
Dallas, TX . . . . . . . . . . . .
Dayton, OH . . . . . . . . . . .
Fort Wayne, IN . . . . . . . .
Fullerton, CA . . . . . . . . .
Gilroy, CA . . . . . . . . . . .
Great Falls, MT . . . . . . . .
Greenwood, IN . . . . . . . .
Guelph, ON . . . . . . . . . . .
Henderson, NV . . . . . . . .
High Point, NC . . . . . . . .
Houston, TX . . . . . . . . . .
Houston, TX . . . . . . . . . .
Hudson, OH . . . . . . . . . .
Hyattsville, MD . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Kirkland, WA . . . . . . . . .
24,600
Kitchener, ON . . . . . . . . .
Kyle, TX . . . . . . . . . . . . .
Largo, MD . . . . . . . . . . .
Las Vegas, NV . . . . . . . .
Las Vegas, NV . . . . . . . .
Lenexa, KS . . . . . . . . . . .
Lenexa, KS . . . . . . . . . . .
Mechanicsburg, PA . . . . .
Melbourne, FL . . . . . . . .
Merriam, KS . . . . . . . . . .
Merriam, KS . . . . . . . . . .
Merriam, KS . . . . . . . . . .
Merrillville, IN . . . . . . . .
Mesa, AZ . . . . . . . . . . . .
Morrow, GA . . . . . . . . . .
Nassau Bay, TX . . . . . . .
Nassau Bay, TX . . . . . . .
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
821
—
52
124
476
80
—
2,750
2,280
4,312
12,105
22,074
10,201
11,733
18,726
12,161
17,435
57,488
19,238
2,026
21,559
132
720
137
730
1,105
5,477
760
630
8,316
1,190
880
2,659
3,102
5,090
2,587
4,017
3,450
1,130
2,569
3,361
74
—
540
100
1,350
3,439
176
—
1,257
—
1,558
818
378
91
11,173
3,041
28,690
6,919
22,836
53,890
13,880
6,007
26,384
7,597
29,809
29,069
32,323
9,471
13,720
2,298
38,709
9,939
14,384
3,623
15,287
2,945
17,926
13,766
16,650
50,461
8,005
10,222
24,911
22,134
9,561
8,064
29,947
10,613
$
— $
— $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
13,331
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
167
$
5,554
9,544
8,735
5,508
7,995
12,234
7,403
17,435
56,762
14,226
14,292
7,529
3,344
18,703
4,586
17,809
54,244
27,971
6,131
26,763
—
24,506
24,246
31,476
7,840
11,865
6,206
33,598
—
13,928
6,819
9,765
2,945
12,460
11,718
1,964
43,431
5,235
8,218
18,927
15,000
7,244
4,673
14,655
5,303
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2018
2012
2011
2006
2006
2006
2010
2019
2016
2011
1967 1801 Metzerott Road
2010 701 White Pond Drive
1988 400 Groton Road
1971 801 Princeton Avenue SW
1985 817 Princeton Avenue SW
1989 833 Princeton Avenue SW
2007 8423 Market St
1900 110 Fisher Avenue
2011 50 Greenleaf Way
2005 12188-A North Meridian
Street
2011
2007 12188-B North Meridian
Street
2007
2011
2006
2011
2012
2014
2006
2018
2012
2015
2011
2012
2014
2007
2012
2018
2011
2013
2014
2018
2006
2007
2010
2013
2011
2014
2011
2011
2013
2008
2008
2007
2012
2012
2005 1501 N. Florence Ave.
1926 227 Pleasant Street
1995 9330 Poppy Dr.
1988 1530 Needmore Road
2004 7916 Jefferson Boulevard
2007 1950 Sunny Crest Drive
2007 7610 Isabella Way
2001 1801 9th Street South
2010 1260 Innovation Parkway
1978 165 Cole Road
2009 1935 Paseo Verde Parkway
2010 4515 Premier Drive
2014 1900 N Loop W Freeway
2009 15015 Cypress Woods
Medical Drive
2006 5655 Hudson Drive
1964 6500 Riggs Road
2009 14 Main Street South
1988 20 Fieldgate Street
2011 135 Bunton Creek Road
1978 600 Largo Road
2000 1815 E. Lake Mead Blvd.
1900 SW corner of Deer Springs
Way and Riley Street
2008 23401 Prairie Star Pkwy
2013 23351 Prairie Star Parkway
1971 4950 Wilson Lane
2009 2222 South Harbor City Boulevard
1972 8800 West 75th Street
1977 8901 West 74th Street
2009 9301 West 74th Street
2006 101 E. 87th Ave.
1989 6424 East Broadway Road
1990 6635 Lake Drive
1981 18100 St John Drive
1986 2060 Space Park Drive
Description
Encumbrances
Land
Buildings &
Improvements
Initial Cost to Company
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which
Carried at Close of Period
Land
Buildings &
Improvements
Accumulated
Depreciation
Year
Acquired
Year
Built
Address
Needham, MA . . . . . . . . .
Newburyport, MA . . . . . .
Niagara Falls, ON . . . . . .
North Cape May, NJ . . . .
North Dartmouth, MA . .
Oceanside, CA . . . . . . . .
Ogden, UT . . . . . . . . . . .
Palm Springs, FL . . . . . .
Palm Springs, FL . . . . . .
—
—
—
—
—
—
—
—
—
Plymouth, MA . . . . . . . .
12,860
Portland, ME . . . . . . . . . .
—
Renton, WA . . . . . . . . . .
20,790
Rexburg, ID . . . . . . . . . .
Roswell, NM . . . . . . . . . .
Roswell, NM . . . . . . . . . .
Roswell, NM . . . . . . . . . .
Sacramento, CA . . . . . . .
San Antonio, TX . . . . . . .
San Diego, CA . . . . . . . .
San Diego, CA . . . . . . . .
San Jose, CA . . . . . . . . . .
Santa Maria, CA . . . . . . .
Sarasota, FL . . . . . . . . . .
Seattle, WA . . . . . . . . . . .
Tacoma, WA . . . . . . . . . .
Tacoma, WA . . . . . . . . . .
Tewksbury, MA . . . . . . .
Toronto, ON . . . . . . . . . .
West Seneca, NY . . . . . .
Wilkes-Barre, PA . . . . . .
Assets Held For Sale
—
—
—
—
—
—
—
—
—
—
—
48,540
17,640
—
—
—
—
—
1,240
1,750
1,225
77
1,700
2,160
384
739
1,182
2,550
655
3,080
1,267
183
883
762
866
4,518
—
4,200
2,850
6,050
62
6,790
2,400
1,535
2,350
1,361
917
570
32,992
29,187
7,963
151
35,337
18,352
2,228
4,066
7,765
35,055
25,529
51,824
3,213
5,850
15,984
17,171
12,756
31,041
22,003
30,707
35,098
50,658
47,325
85,369
35,053
6,068
24,118
2,915
22,435
2,301
—
—
—
4,203
—
—
—
—
—
—
—
12,281
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
32,308
29,118
—
4,431
35,298
18,111
—
2,061
3,790
35,551
17,783
67,185
67
3,909
11,896
13,361
7,714
28,015
—
29,218
30,088
44,355
36,149
73,052
30,014
6,479
25,200
—
16,218
2,847
Total . . . . . . . . . . . . . .
$ 124,430
$ 122,167
$ 1,511,800
$
29,815
$
— $ 1,253,008
$
2016
2016
2015
2015
2016
2011
2018
2006
2006
2016
2011
2011
2018
2011
2011
2011
2006
2012
2008
2011
2011
2011
2012
2011
2011
2015
2016
2013
2007
2011
2011 880 Greendale Avenue
2015 4 Wallace Bashaw Junior Way
1991 7860 Lundy’s Lane
1988 610 Town Bank Road
1997 239 Cross Road
2005 3500 Lake Boulevard
1987 400 East 5350 South
1993 1640 S. Congress Ave.
1997 1630 S. Congress Ave.
1970 60 Stafford Hill
2008 195 Fore River Parkway
2007 104 Burnett Avenue South
1988 660 South 2nd West
2004 601 West Country Club Road
2006 350 West Country Club Road
2009 300 West Country Club Road
1990 8120 Timberlake Way
1986 5282 Medical Drive
1992 555 Washington St.
2011 2567 Second Avenue
2009 1420 Curvi Drive
2001 1220 Suey Road
1990 1921 Waldemere Street
2009 5300 24th Avenue NE
2008 7290 Rosemount Circle
2012 7290 Rosemount Circle
2006 2000 Emerald Court
1985 3705 Bathurst Street
1990 550 Orchard Park Rd
1992 300 Courtright Street
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Summary:
Seniors Housing
Operating . . . . . . . . . .
$1,990,607
$1,383,927
$13,886,675
$1,879,176
$1,469,078
$15,680,700
$3,194,057
Triple-net
. . . . . . . . . . . .
Outpatient Medical . . . . .
306,038
572,266
1,036,151
885,789
7,894,992
6,626,075
351,136
323,055
1,057,708
959,834
8,224,571
6,875,085
1,272,903
1,248,499
Construction in
progress . . . . . . . . . . . .
—
—
507,931
—
—
507,931
—
Total continuing
operating
properties . . . . . . . . . .
Assets held for sale . . . . .
Total investments in
real property
owned . . . . . . . . . . . . .
2,868,911
3,305,867
28,915,673
2,553,367
3,486,620
31,288,287
5,715,459
124,430
122,167
1,511,800
29,815
—
1,253,008
—
$2,993,341
$3,428,034
$30,427,473
$2,583,182
$3,486,620
$32,541,295
$5,715,459
(1) Please see Note 2 to our consolidated financial statements for information regarding lives used for depreciation and amortization.
168
Year Ended December 31,
2019
2018
2017
(in thousands)
Investment in real estate:
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions and development
. . . . . . . . . . . . . . . . . . . . . . . . . .
Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deconsolidation of previously consolidated venture . . . . . . . . .
Impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$33,590,388
4,807,418
328,824
—
(28,074)
(2,673,203)
187,853
(185,291)
$30,581,948
4,598,670
266,183
—
(71,336)
(1,330,679)
(454,398)
—
$30,041,058
1,276,636
250,276
(144,897)
(101,527)
(1,203,247)
415,879
47,770
Ending balance(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$36,027,915
$33,590,388
$30,581,948
Accumulated depreciation:
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization expenses . . . . . . . . . . . . . . . . . . .
Amortization of above market leases . . . . . . . . . . . . . . . . . . . . .
Disposition and other
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,499,958
1,027,073
5,752
(772,273)
(45,051)
$ 4,838,370
950,459
6,375
(205,562)
(89,684)
$ 4,093,494
921,720
7,303
(192,029)
7,882
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,715,459
$ 5,499,958
$ 4,838,370
(1) 2019 change primarily relates to the adoption of ASC 842 and the 2017 change primarily relates to the acquisition of an asset through
foreclosure.
(2) The unaudited aggregate cost for tax purposes for real property equals $30,691,276,000 at December 31, 2019.
169
Welltower Inc.
Schedule IV—Mortgage Loans on Real Estate
December 31, 2019
(in thousands)
Location
Segment
Interest Rate
Final
Maturity
Date
Monthly
Payment
Terms
Prior
Liens
Face Amount
of Mortgages
First mortgages relating to 1 property located in:
California . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . .
United Kingdom . . . . . . . . . . .
Pennsylvania . . . . . . . . . . . . . .
North Carolina . . . . . . . . . . . . .
Texas . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . .
Triple-net
Triple-net
Triple-net
Triple-net
Triple-net
Outpatient Medical
Triple-net
Totals . . . . . . . . . . . . . . . . . . . .
7.95%
7.25%
8.53%
8.72%
7.83%
7.86%
8.50%
1/1/2022
3/15/2022
7/7/2021
3/1/2022
12/18/2023
1/19/2025
2/1/2024
$696
139
140
108
92
24
92
$—
—
—
—
—
—
—
$—
$131,100
27,828
19,904
15,530
30,883
3,740
19,876
Carrying
Amount of
Mortgages
$ 53,071
23,788
19,904
15,108
16,259
3,733
13,823
$—
—
—
—
—
—
—
$—
Principal Amount
of Loans Subject
to Delinquent
Principal or
Interest
$248,861
$145,686
Year Ended December 31,
2019
2018
2017
(in thousands)
Reconciliation of mortgage loans:
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 249,071
$ 306,120
$ 485,735
Additions:
New mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Draws on existing loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
45,961
45,961
25,290
36,458
61,748
6,706
58,224
64,930
Deductions:
Collections of principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(87,249)
(116,905)
(180,135)
Loan balance transferred to non real estate loans receivable . . . . . . . . . . . . . . . .
(64,040)
Change in allowance for loan losses and charge-offs . . . . . . . . . . . . . . . . . . . . . .
—
—
—
—
(71,535)
Total deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(151,289)
(116,905)
(251,670)
Change in balance due to foreign currency translation . . . . . . . . . . . . . . . . . . . . .
1,944
(1,892)
7,125
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 145,686
$ 249,071
$ 306,120
170
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Thomas J. DeRosa, certify that:
1. I have reviewed this annual report on Form 10-K of Welltower Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: February 14, 2020
/s/ THOMAS J. DEROSA
Thomas J. DeRosa,
Chairman and Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Timothy G. McHugh, certify that:
1. I have reviewed this annual report on Form 10-K of Welltower Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: February 14, 2020
/s/ TIMOTHY G. MCHUGH
Timothy G. McHugh,
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
I, Thomas J. DeRosa, the Chief Executive Officer of Welltower Inc. (the “Company”), certify, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that (i) the Annual Report on
Form 10-K for the Company for the year ended December 31, 2019 (the “Report”), fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained
in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
/s/
THOMAS J. DEROSA
Thomas J. DeRosa,
Chairman and Chief Executive Officer
Date: February 14, 2020
A signed original of this written statement required by Section 906 has been provided to the Company and will
be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
I, Timothy G. McHugh, the Chief Financial Officer of Welltower Inc. (the “Company”), certify, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that (i) the Annual Report on
Form 10-K for the Company for the year ended December 31, 2019 (the “Report”), fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained
in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
/s/
TIMOTHY G. MCHUGH
Timothy G. McHugh,
Chief Financial Officer
Date: February 14, 2020
A signed original of this written statement required by Section 906 has been provided to the Company and will
be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
[THIS PAGE INTENTIONALLY LEFT BLANK]
EXECUTIVE OFFICERS
Thomas J. DeRosa
Chairman and Chief Executive Officer
Shankh Mitra
Executive Vice President – Chief Investment
Officer
Timothy G. McHugh
Senior Vice President – Chief Financial Officer &
Treasurer
Matthew G. McQueen
Senior Vice President – General Counsel &
Corporate Secretary
Ayesha Menon
Senior Vice President – Strategic Investments
CORPORATE OFFICES
Welltower Inc.
4500 Dorr Street
Toledo, Ohio 43615-4040
(877) 670-0070
(419) 247-2800
(419) 247-2826 Fax
www.welltower.com
443 employees as of 1/31/20
3,564 registered shareholders as of 1/31/20
BOARD OF DIRECTORS
Kenneth J. Bacon
Age 65
Co-Founder and Managing Partner
RailField Realty Partners
Bethesda, Maryland
Thomas J. DeRosa
Age 62
Chairman of the Board and Chief Executive
Officer
Welltower Inc.
Toledo, Ohio
Karen B. DeSalvo
Age 54
Chief Health Officer
Google Health
Austin, Texas
Jeffrey H. Donahue
Age 73
Lead Independent Director
Former President & Chief Executive Officer
Enterprise Community Investment, Inc.
Columbia, Maryland
Sharon M. Oster
Age 71
Frederic D. Wolfe Professor Emeritus of
Management & Entrepreneurship, Professor of
Economics
Yale University School of Management
New Haven, Connecticut
Sergio D. Rivera
Age 57
Chief Executive Officer
SeaWorld Entertainment, Inc.
Orlando, Florida
Johnese M. Spisso
Age 59
President of UCLA Health, Chief Executive Officer
of UCLA Hospital System and Associate Vice
Chancellor of UCLA Health Sciences
Los Angeles, California
Kathryn M. Sullivan
Age 64
Former Chief Executive Officer
United Healthcare Employer and Individual,
Local Markets UnitedHealth Group
Minnetonka, Minnesota
R. Scott Trumbull
Age 71
Retired CEO and Chairman of the Board
Franklin Electric Co., Inc.
Fort Wayne, Indiana
COMMITTEES OF THE BOARD
Audit Committee
Rivera (Chair), Sullivan, Trumbull
Compensation Committee
Bacon (Chair), DeSalvo, Donahue, Oster, Spisso
Nominating/Corporate Governance Committee
DeSalvo, Donahue, Oster (Chair), Spisso
Executive Committee
Bacon, DeRosa (Chair), Donahue, Oster, Rivera
TRANSFER AGENT, REGISTRAR,
DIVIDEND DISBURSING AGENT AND
PLAN ADMINISTRATOR
Computershare
P.O. Box 505000
Louisville, KY 40233
(888) 216-7206
www.computershare.com/investor
SHAREHOLDER SERVICES
Computershare provides shareholder services
to registered shareholders via telephone and
online. Computershare representatives can
assist you in change of name or address,
consolidation of accounts, duplicate mailings,
dividend reinvestment enrollment, lost share
certificates, transfer of shares to another person
and additional administrative services. For more
information, go to www.computershare.com/
investor or call toll-free (888) 216-7206.
INVESTOR INFORMATION
Current and prospective investors can access
the Annual Report, Proxy Statement, SEC
filings, earnings announcements and other press
releases on our website at www.welltower.com,
or by email request to info@welltower.com.
EXCHANGE LISTING
New York Stock Exchange
Trading Symbol: WELL
MEMBER
National Association of Real Estate
Investment Trusts
INDUSTRY PARTNER
World Economic Forum
FORWARD-LOOKING STATEMENTS
This Annual Report and the Letter to
Shareholders contain “forward-looking
statements” as that term is defined in the
Private Securities Litigation Reform Act of
1995. For example, when we use words such
as “may,” “will,” “intend,” “should,” “believe,”
“expect,” “anticipate,” “project,” “estimate,” or
similar expressions that do not relate solely
to historical matters, we are making forward-
looking statements. Forward-looking statements
are not guarantees of future performance
and involve risks and uncertainties that may
cause the company’s actual results to differ
from the company’s expectations discussed
in the forward-looking statements. Important
factors that could cause our actual results to be
materially different from the forward-looking
statements are discussed in our Form 10-K
under the heading “Risk Factors.” We assume
no obligation to update or revise any forward-
looking statements, whether because of new
information, future events or otherwise, or to
update the reasons why actual results could
differ from those projected in any forward-
looking statements.
INDEPENDENT AUDITORS
Ernst & Young LLP
Toledo, Ohio
WELLTOWER ONLINE
Our website: www.welltower.com
www.twitter.com/welltower
www.linkedin.com/company/welltower
To view the Welltower 2019 Annual Report, visit
www.welltower.com.
www.welltower.com
4500 Dorr Street
Toledo, Ohio 43615-4040
877.670.0070
419.247.2800
© COPYRIGHT 2020 WELLTOWER INC.