UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
☐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:
Title of Each Class
Common Stock, $1.00 par value
4.800% Notes due 2028
4.500% Notes due 2034
Trading Symbol(s)
WELL
WELL28
WELL34
Name of Each Exchange on Which Registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ 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 ☑
Securities registered pursuant to Section 12(g) of the Act: None
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 ☑ 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 ☑ 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 ☑
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 ☑
Indicate by check mark whether the registrant has filed a report on and attestation of the effectiveness of its internal control over financial reporting under Section 404(b) of Sarbanes-Oxley Act
(15 U.S.C. 7262(b)) by registered public accounting firm that prepared or issued its audit report ☑
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 $21,561,545,000.
As of January 29, 2021, the registrant had 417,383,039 shares of common stock outstanding.
Portions of the registrant’s definitive proxy statement for the annual stockholders’ meeting to be held May 6, 2021, are incorporated by reference into Part III.
DOCUMENTS INCORPORATED BY REFERENCE
WELLTOWER INC. AND SUBSIDIARIES
2020 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
PART I
PART II
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions and Director Independence
Principal Accounting Fees and Services
PART IV
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.
Exhibits and Financial Statement Schedules
Form 10-K Summary
Signature
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PART I
Item 1. Business
General
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, 2020.
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 generally 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.
Independent Living and Independent Supportive Living (Canada) Independent living and independent supportive living generally refers to age-
restricted, multifamily properties with central dining that provide residents access 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 Alzheimer's/Dementia Care refers to state-regulated rental properties that generally provide assisted living and independent
living services, but also provide supportive care to residents with memory loss, Alzheimer's
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disease and/or other types of dementia. Amenities vary, but may include enhanced security, specialized design features and memory-enhancing therapies
that promote relaxation and help slow cognitive decline.
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%, 67% and 69% of total revenues for the years ended December 31, 2020, 2019 and 2018,
respectively. As of December 31, 2020, we had relationships with 27 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, 2020, our relationship with Sunrise Senior Living accounted for approximately 37%
of our Seniors Housing Operating segment revenues and 25% of our total revenues. Additionally Revera accounted for approximately 12% of our Seniors
Housing Operating segment revenues and 8% of our total revenues. Revera owns a controlling interest in Sunrise Senior Living.
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 per day. Long-term acute care properties provide inpatient services for patients 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 17%, 19% and 19% of total revenues for the years ended December 31, 2020, 2019 and 2018, respectively. For the
year ended December 31, 2020, our revenues related to our relationship with ProMedica Health System ("ProMedica") accounted for approximately 27%
of our Triple-net segment revenues and 5% of total revenues. As of December 31, 2020, our relationship with ProMedica was comprised of a master lease
for 215 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.
During 2020, Genesis Healthcare ("Genesis") indicated substantial doubt as to their ability to continue as a going concern. As a result, effective July 1,
2020, we have written off all existing straight-line rent receivable balances of $91,025,000 as a reduction to rental income and now recognize rental income
from Genesis on a cash basis. For the year ended December 31, 2020, our revenues related to our relationship with Genesis accounted for approximately
4% of our Triple-net segment revenues and 1% of our total revenues. As of December 31, 2020, our relationship with Genesis was comprised of two master
leases for 52 properties owned 100% by us, six loans with a balance net of allowance for credit losses of $136,162,000, 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 two master leases for 28 properties operated by Genesis. In addition to rent, the master leases require 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 and Genesis is current on all obligations to Welltower
through December 31, 2020.
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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 92% of our outpatient medical building portfolio is affiliated with health systems (buildings
directly on or adjacent to 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 16%,
13% and 12% of total revenues for each of the years ended December 31, 2020, 2019 and 2018, 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.
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, 2020, 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, 2020, 77% of our portfolio included
leases with full pass through, 20% with a partial expense reimbursement (modified gross) and 3% with no expense reimbursement (gross). Our outpatient
medical leases are non-cancellable operating leases that have a weighted-average remaining term of six years at December 31, 2020 and are often credit
enhanced by security deposits, guarantees and/or letters of credit.
4
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, 2020, we had outstanding construction investments of
$487,742,000 and were committed to provide additional funds of approximately $622,108,000 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, 2020, we had outstanding loans, net of allowances, of $683,641,000 with an interest yield of
approximately 7.7% 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, 2020 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 65% 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 $333,934,000 related to
eight properties as of December 31, 2020, 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.
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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 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 (including a preference for home health services instead of residing in one of our communities), physicians, staff and price. Throughout
the COVID-19 pandemic, seniors housing operators have experienced broad-based occupancy declines and as a result, we expect competition to increase in
2021 and beyond as operators attempt to fill unoccupied units. 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 ("ESG")
We are committed to operating in a responsible, transparent and sustainable manner. Our leadership and Board of Directors (through the Nominating and
Governance Committee), oversee and advance our ESG initiatives. They recognize that focusing on ESG engagement, integration and impact benefit our
stakeholders and are fundamental to our business. Our corporate responsibility and sustainability strategy is focused on adopting the best ESG practices
across our business and we were recognized for our leadership in this space over the past year in the following ways:
• Named by S&P Global in collaboration with RobecoSAM for the third consecutive year in the 2020 edition of The Sustainability Yearbook;
• Named to top 20 percent of Newsweek’s America’s Most Responsible Companies list for the second consecutive year;
• Named to Corporate Responsibility Magazine’s 21st annual 100 Best Corporate Citizens list for the second consecutive year;
• Named to 2020 Dow Jones Sustainability World Index for the third consecutive year and the North American Index for the fifth consecutive year;
• Recognized on Management band level with a “B” score by CDP for taking coordinated action on climate issues;
• Recognized as Energy Star Partner of the Year for the second time;
• Listed on the FTSE4Good Index since 2012;
• Achieved Gold Level 2020 Green Lease Leader status by the Institute for Market Transformation and the U.S. Department of Energy’s Better
Buildings Alliance, after several prior years of repeated recognition;
• Named to the Bloomberg Gender-Equality Index for the second consecutive year; and
• Named to the Workplace Health Achievement Index by the American Heart Association for the third consecutive year.
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. After several years of portfolio and program evolution, along with our increased ability to collect data in partnership with our operators and tenants,
our property-level sustainability dataset (energy, GHG, water, and waste) is evolving to become a set of tools for benchmarking. Our self-managed
Outpatient Medical portfolio is benchmarked in EPA ENERGY STAR Portfolio Manager (ESPM) and we regularly engage with our operators on
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Energy Star, utility bill aggregators, utilities, and others to add to our number of ESPM benchmarked properties throughout our portfolio. As a result, in
2019 we reset and launched new environmental goals that provide a broader and more inclusive representation of our portfolio. We are targeting a 10%
reduction in greenhouse gas emissions and energy and water usage by 2025 from our 2018 baseline. As of the end of 2019, we reduced greenhouse gas
emissions by 8.5%, energy consumption by 2.1% and water consumption by 5%.
We have comprehensive employee, tenant and vendor engagement programs in place focused on operational strategies to drive energy and water
efficiency. In 2019 and 2020, we issued guidance with accompanying training to assist our managers and operators to successfully benchmark their
buildings and to engage our tenants to improve energy and water efficiency as well as increase their recycling diversion rates. We continue to not only
monitor adherence and compliance with this guidance in connection with our sustainability reporting, but also work to expand its utilization throughout our
portfolio.
In December 2019, we issued our inaugural green bond of $500,000,000 of 2.700% notes due 2027. The net proceeds from the offering will be used to
fund renewable energy, water conservation, energy efficiency and green building projects. We are the first healthcare REIT to successfully complete a
green bond issuance.
We understand that as we continue to make our operations and buildings more sustainable, we also have a responsibility to effectuate the same in our
supply chain and our purchasing decisions. We developed a Supplier ESG Survey that was delivered to our highest spend national accounts, which we
analyzed and leveraged for compliance and opportunity engagement with suppliers. 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 well-being of our employees, tenants and residents. Over the past six years, since we began reporting the impact of our charitable
contributions through programs such as the Welltower Charitable 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 enhancing progressive talent attraction, development programs and mandatory training for
all employees, we have reinforced our already strong commitment to diversity and inclusion through our Diversity Council and the launch of seven new
associated ENGs in 2020. These, taken together with other employee initiatives, such as tailored messaging, training and discussions on equality and
understanding, support our efforts to compete for and foster talent and inclusiveness in an ever changing workforce.
Governance We have adopted corporate governance practices that meet the dynamic needs of the corporate governance environment. In 2020, we
announced changes and appointments to our Board of Directors, resulting in (1) 80% of our Director positions being held by racially and ethnically diverse
minorities and women, (2) 50% of our Director positions being held by women, (3) 40% of our Board committees being led by women and (4) the
separation of the roles of CEO and Board Chair resulting in the appointment of an independent and racially diverse Chair of the Board. We annually review
our policies and procedures and strive to lead through advancement and adherence to impactful areas, such as with our 2020 revision to our human rights
policy which included approval by the Board of Directors, no tolerance for modern slavery, and commitment to fair and equal compensation for its
employees. Additionally, we improved our already high CDP, Dow Jones Sustainability Index (DJSI), ISS, ISS-ESG, Sustainalytics and Vigeo Eiris scores
through enhanced tracking and reporting.
Additional information regarding our ESG programs and initiatives is available in our 2019 Corporate Social Responsibility Report (located on our
website at www.welltower.com). Information on our website, including our Corporate Social Responsibility Report or sections thereof, is not incorporated
by reference into this Annual Report.
Human Capital
Our employees are our greatest asset. As of December 31, 2020, we had 423 employees (406 located in United States, ten in the United Kingdom, five in
Canada and 2 in Luxembourg). We are committed to the success of our people and the unique combination of skills and experiences they bring to achieving
our mission.
Employee Development Programs and Performance Management Development through the talent pipeline, recognizing and rewarding performance and
providing opportunities for continued growth are the cornerstones of our Human Capital strategy. We offer employees resources, trainings and tools
designed to develop future leaders, advance careers and attract and retain talent including but not limited to our rotational associate program, formal
mentorship program, manager development training, skill development courses and education assistance. We sustain a high-performance culture by
measuring performance, recognizing employee achievements and identifying areas of development and professional growth.
Compensation and Benefits In addition to salary, our compensation and benefits programs include annual short term incentive bonuses, long-term
incentive stock plans, a 401(k) plan, an employee stock purchase plan, healthcare and insurance benefits, health savings and flexible spending accounts,
paid time off, maternity and caregiver leave, senior wellness leave, employee assistance programs, tuition assistance and health and wellness
reimbursement programs, among many others. We annually
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evaluate and benchmark the consistency and competitiveness of our compensation and benefits programs to ensure fair pay practices that reward
performance and support the needs of our employees. We also regularly review our compensation practices, both in terms of our overall workforce and by
individual employee, to ensure our compensation and benefits programs are fair and equitable.
Health, Safety and Wellness The success of our business is fundamentally connected to the safety and well-being of our employees, tenants and visitors.
We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs that support
physical, mental and financial well-being. During most of 2020, a large majority of our workforce worked remotely and will continue to do so for the
foreseeable future. We have increased leadership updates and other communication, utilizing many forms of technology, to keep employees engaged and
informed while out of the office. Additionally, we instituted safety protocols and procedures for essential employees who continued to work in our offices
or on-site to manage our properties. We provided access to personal protective equipment, enhanced cleaning and sanitation procedures and required
temperature and symptom monitoring. We measure success through monitoring the number of employees that received safety training, measuring progress
towards our goal of zero lost time for incidents, and aligning with goals of our signature wellness program ("WELL+Being").
Credit Concentrations Please see Note 9 to our consolidated financial statements.
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 of the administrative personnel and nursing staff, the
adequacy of the physical plant and equipment, 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: loss
of accreditation; denial of reimbursement; 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.
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.
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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 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 and patients. 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. Further, there is risk that Medicare Skilled Nursing
Facility ("SNF") payment reforms may impact our tenants and operators. 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 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 increases
than providers of those services have often expected. In addition, the Medicare and 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 has the potential 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
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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. During the Trump Administration, the former president and U.S. Congress 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. The Fifth Circuit's decision was appealed to the Supreme Court of the United States, which granted certiorari on these issues
and conducted an oral argument in November 2020. This litigation is still ongoing, but places great uncertainty upon the longevity and nature of the
Health Reform Laws moving forward. There is also uncertainty with respect to the impact the Biden Administration and the new U.S. Congress may
have on health reform including through new legislative, executive order, or regulatory efforts 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, executive order, 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 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 govern the collection, security, dissemination, use, access to and confidentiality of personal
information, including individually identifiable health
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information. Violations of these laws may result in substantial civil and/or criminal fines and penalties. The costs to a business such as ours or to 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 and the new California Privacy Rights
Act that will go into effect in 2023. As we use data to better inform our investments and the efficacy of care in our communities, 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, our operators' and other business partners' use, sharing and securing of data. New privacy and security laws 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 U.K. General Data Protection Regulation (collectively “U.K. DP Laws”). U.K. DP Laws impose a
significant number of obligations on controllers with the potential for fines of up to 4% of annual worldwide turnover or €17.50 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. In addition, there is a bill currently going through the U.K. Parliament which will require a
care home provider, where entering into a contract for the provision of healthcare or social care services with a local public authority, to enter into
mandatory contractual terms to provide the local public authority with evidence that it pays the national minimum wage to all of its employees engaged in
the provision of services for which the provider has contracted for (e.g., a national minimum wage record). Further, the Working Time and Holiday Pay Bill
2019-2021 is currently going through the U.K. Parliament, which makes provision for the expiration of the Working Time Regulations 1998, provides for
additional regulations governing working time and makes provisions for holiday pay for employees.
The U.K. exited from the EU (“Brexit”) on January 31, 2020. Prior to the end of the Brexit Transition Period on December 31, 2020, the EU and U.K.
agreed to a Trade and Cooperation on December 24, 2020, which has been approved by the U.K. Parliament to enter into force, which is currently pending.
The impact of Brexit on the U.K. health and care workforce will depend on future migration policy and the barriers or incentives to live in the U.K.
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
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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.
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, the potential
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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.
The deduction of business interest is limited to 30% (50% in the case of taxable years beginning in 2019 or 2020) 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. 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:
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• 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.
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.
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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 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.
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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 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, 2020. 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;
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• 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;
• 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 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
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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 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.
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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.
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 stockholders treated as
dividends for U.S. federal income tax purposes (including any such capital gain 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
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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 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
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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.
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.
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.
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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:
• 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.
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
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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 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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the impact of the COVID-19 pandemic;
uncertainty regarding the implementation and impact of the CARES Act and future stimulus or other COVID-19 relief legislation;
status of the economy;
the status of capital markets, including availability and cost of capital;
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;
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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 regulations affecting Medicare and Medicaid reimbursement rates and operational requirements;
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;
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
Risk Factor Summary
The following summarizes the principal factors that make an investment in our company speculative or risky, all of which are more fully described in the
Risk Factors section below. This summary should be read in conjunction with the Risk Factors section and should not be relied upon as an exhaustive
summary of the material risks facing our business. The order of presentation is not necessarily indicative of the level of risk that each factor poses to us.
Risks Arising from Our Business:
Our business model and the operations of our business involve risks, including those related to:
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the effects of the COVID-19 pandemic;
uncertainty regarding the implementation and impact of the CARES Act and future stimulus or other COVID-19 relief legislation;
investments in and acquisitions of health care and seniors housing properties;
unknown liability exposure related to acquired properties;
competition for acquisitions may result in increased prices;
our joint venture partners;
Seniors Housing Operating properties operational risks;
our ability to terminate our management agreements with Seniors Housing Operating managers;
operational and legal risks with respect to our properties managed in RIDEA structures;
the ability of operators to make payments to us;
the impacts of severe cold and flu seasons or other widespread illnesses on occupancy;
the insolvency or bankruptcy of our tenants, operators, borrowers, managers and other obligors;
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our ability to timely reinvest our sale proceeds on terms acceptable to us;
any adverse developments in the business or financial condition of Sunrise Senior Living, LLC;
any failure, inability or unwillingness by ProMedica Health System and Genesis Healthcare to satisfy obligations under their agreements with us;
ownership of property outside the U.S.;
the impact of Brexit on our operations located in the U.K.;
our ability to lease or sell properties on favorable terms;
tenant, operator and manager insurance coverage;
loss of properties owned through ground leases upon breach or termination of the ground leases;
requirements of, or changes to governmental reimbursement programs, such as Medicare, Medicaid or government funding;
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;
our operators’ or tenants’ failure to comply with federal, state, province, local, and industry-regulated licensure, certification and inspection laws,
regulations, and standards;
development, redevelopment and construction;
losses caused by severe weather conditions, natural disasters or the physical effects of climate change;
costs incurred to remediate environmental contamination at our properties;
cybersecurity incidents; and
our dependence on key personnel.
Risks Arising from Our Capital Structure
Our capital structure involves exposure to risks, including those related to:
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our future leverage;
the availability of cash for distributions to stockholders;
covenants in our debt agreements;
limitations on our ability to access capital;
changes affecting the availability of LIBOR;
any downgrades in our credit ratings; and
increases in interest rates.
Risks Arising from Our Status as a REIT
As a result of our status as a REIT, we are exposed to risks, including those related to:
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our ability to remain qualified as a REIT;
the ability of our subsidiaries to qualify as a REIT;
the impact of the 90% annual distribution requirement on our liquidity and ability to engage in otherwise beneficial transactions;
our limited use of TRSs under the Code;
special requirements applicable to the lease of qualified health care properties to a taxable REIT subsidiary;
tax consequences if certain sale-leaseback transactions are not characterized by the IRS as “true leases; and
changes in our tax rate or exposure to additional tax liabilities.
Risks Factors
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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:
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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
The ongoing COVID-19 pandemic may continue to adversely affect our business, results of operations and financial condition.
We are unable to accurately predict the full impact that the COVID-19 pandemic will have on our results of operations, financial condition, liquidity and
cash flows due to numerous factors that are not within our control. These factors include the duration and severity of the outbreak; availability and timely
delivery and effectiveness of vaccines; public health measures, such as business closures and stay-at-home orders, and other actions taken by governments,
businesses and individuals in response to the pandemic; the availability of federal, state, local or non-U.S. funding programs; general economic disruption
and uncertainty in key markets and financial market volatility; and the impact of the COVID-19 pandemic on general macroeconomic conditions and the
pace of recovery when the pandemic subsides.
The COVID-19 pandemic has subjected our business, operations and financial condition to a number of risks, including but not limited to those
discussed below:
• Risks Related to Revenue: Our revenues and our operators' revenues are dependent on occupancy. Our Seniors Housing Operating portfolio has
experienced a decline in spot occupancy from 85.8% at February 29, 2020 to 76.2% at December 31, 2020 and 74.4% at February 5, 2021. In
addition to the impact of increases in mortality rates on occupancy of our Seniors Housing Operating facilities, the ongoing COVID-19 pandemic
has, to varying degrees during the course of the pandemic, prevented prospective occupants and their families from visiting our facilities and
limited the ability of new occupants to move into our facilities due to heightened move-in criteria and screening. Although the ongoing impact of
the pandemic and vaccine deployment on occupancy remain uncertain, occupancy of our Seniors Housing Operating and Triple-net properties
could further decrease. Such a decrease could affect the net operating income of our Seniors Housing Operating properties and the ability of our
Triple-net operators to make contractual payments to us. In addition, although we collected over 98% of rent due in the fourth quarter of 2020,
rental income in our Outpatient Medical segment may decrease if our tenants do not renew leases or do not make timely or full lease payments as
a result of temporary medical practice closures or decreases in revenue due to government imposed restrictions on elective medical procedures or
decisions by patients to delay treatments. As a result of the financial impact of the COVID-19 pandemic on our operators and tenants, we may
offer certain tenants concessions such as rent deferrals or rent abatements across our Triple-net and Outpatient Medical segments.
• Risks Related to Operator and Tenant Financial Condition: In addition to decreased revenue from tenant and operator payments, the impact of the
COVID-19 pandemic creates a heightened risk of tenant, operator, borrower, manager or other obligor bankruptcy or insolvency due to factors
such as decreased occupancy, medical practice disruptions resulting from stay-at-home orders, increased health and safety and labor expenses or
litigation resulting from developments related to the COVID-19 pandemic. See" - The insolvency or bankruptcy of our tenants, operators,
borrowers, managers and other obligors may adversely affect our business, results of operations and financial condition" for more information
regarding operator and tenant bankruptcy risks. Our ability to terminate our lease with a tenant and relet the property to another tenant may be
severely limited under current conditions due to the industry and macroeconomic effects of the COVID-19 pandemic and local ordinances. If we
cannot transition a leased property to a new tenant due to the effects of the COVID-19 pandemic or for other reasons, 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,
particularly in light of ongoing publicity related to the COVID-19 pandemic, 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.
• Risks Related to Operations: Across all of our properties, we and our operators have incurred increased operational costs as a result of the
introduction of public health measures and other regulations affecting our properties and our operations, as well as additional health and safety
measures adopted by us and our operators related to the COVID-19 pandemic, including increases in labor and property cleaning expenses and
expenditures related to our efforts to procure PPE and supplies on behalf of our operators. Such operational costs may increase in the future based
on the duration and severity of the pandemic or the introduction of additional public health regulations. Operators and tenants are also subject to
risks arising from the unique pressures on seniors housing and medical practice employees during
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the COVID-19 pandemic. As a result of difficult conditions and stresses related to the COVID-19 pandemic, employee morale and productivity
may suffer and additional pay, such as hazard pay, may not be sufficient to retain key operator and tenant employees. In addition, our operations or
those of our operators or tenants may be adversely impacted if a significant number of our employees or those of our operators or tenants contract
COVID-19. Although we continue to undertake extensive efforts to ensure the safety of our properties, employees and residents and to provide
operator support in this regard, the impact of the COVID-19 pandemic on our facilities could result in additional operational costs and reputational
and litigation risk to us and our operators. As a result of the COVID-19 pandemic, operator and tenant cost of insurance is expected to increase
and such insurance may not cover certain claims related to COVID-19. Our exposure to COVID-19 related litigation risk may be increased if the
operators or tenants of the relevant facilities are subject to bankruptcy or insolvency. In addition, to varying degrees during the course of the
pandemic we have experienced increased operational challenges and costs resulting from logistical challenges such as supply chain interruptions,
business closures and restrictions on the movement of people. In response to stay-at-home orders and to support the health and well-being of our
employees, the large majority of our employees are currently working remotely. The effects of such work arrangements for an extended period of
time could impact employee productivity and morale and introduce additional operational risk, including but not limited to cybersecurity risks.
• Risks Related to Property Acquisitions and Dispositions: As a result of uncertainty regarding the length and severity of the COVID-19 pandemic
and the impact of the pandemic on our business and related industries, our investments in and acquisitions of seniors housing and health care
properties, as well as our ability to transition or sell properties with profitable results, may be limited. Such disruptions to acquisition, disposition
and development activity may negatively impact our long-term competitive position.
• Risks Related to Liquidity: If our access to capital is restricted or our borrowing costs increase as a result of developments in financial markets
relating to the pandemic, our operations and financial condition could be adversely impacted. In addition, a prolonged period of decreased revenue
and limited acquisition and disposition activity may adversely affect our financial condition and long-term growth prospects and there can also be
no assurance that we will not face credit rating downgrades. Future downgrades could adversely affect our cost of capital, liquidity, competitive
position and access to capital markets.
• Risks Related to Dividends: The impacts of the COVID-19 pandemic on our results of operations, liquidity and financial condition could adversely
affect our ability to pay dividend distributions at expected levels or at all. 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 agreements, maintenance of our
REIT qualification, restrictions under Delaware law and other factors as our Board of Directors may deem relevant from time to time. Our Board
of Directors will continue to assess our dividend rate on an ongoing basis, as the COVID-19 pandemic and related market conditions and our
financial position continue to evolve. Our Board of Directors declared a cash dividend for the quarter ended December 31, 2020 of $0.61 per
share, consistent with the cash dividends for the quarters ended September 30, June 30 and March 31, 2020, representing a 30% decrease from the
$0.87 per share dividend for the quarter ended December 31, 2019.
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. As the COVID-19 pandemic continues to adversely affect our operating and financial results, it may also have the effect of heightening
many of the other risks described in the risk factors in this Annual Report on Form 10-K.
There remains uncertainty regarding the implementation and impact of the CARES Act and any future stimulus or other COVID-19 relief legislation.
There can be no assurance as to the amount of financial assistance we and our operators will receive or that we will be able to comply with the terms
and conditions to keep such assistance.
In response to the COVID-19 pandemic, the Coronavirus Aid Relief, and Economic Security Act ("CARES Act") and the Paycheck Protection Program
and Health Care Enhancement Act ("PPPHCE Act"), signed into law on March 20, 2020, and April 24, 2020, respectively, authorized $175 billion in
funding to be distributed to healthcare providers, including assisted living facilities. These funds, distributed through the Provider Relief Fund and
administered by the Department of Health and Human Services, are required to be used to prevent, prepare for and respond to COVID-19 and reimburse
expenses or lost revenues attributable the COVID-19 pandemic. Although these distributions are not subject to repayment, attestation and compliance with
certain terms and conditions including detailed reporting and auditing are required. Any funds that are ultimately received and retained by us are not
expected to fully offset the losses incurred in our senior living portfolio that are attributable to the COVID-19 pandemic.
In 2020 applications were made for amounts under Phase 2 and Phase 3 of the Provider Relief Fund following the announcement from the Department of
Health and Human Services that it expanded the eligibility of the CARES Act to include assisted living facilities. During the fourth quarter, we received
Provider Relief Funds of approximately $9 million which was recognized as a reduction to property operating expenses. To date in 2021, we have received
approximately $34 million of
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Provider Relief Funds. While we have received some funds to date, there can be no assurance that all of our applications will be approved or that additional
funds will ultimately be received in full or in part.
Our investments in and acquisitions of health care and seniors housing properties may be unsuccessful or fail to meet our expectations
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 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 former owners of the properties, liabilities incurred in the ordinary course of business and claims for
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.
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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, and we rely on them to operate the properties in a manner that complies with
applicable law.
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. In addition to operational challenges related to the COVID-19 pandemic, these risks include fluctuations in occupancy
experienced during the normal course of business, 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; increases in property taxes; state regulation and rights of residents related to
entrance fees; federal and state housing laws and regulations, including rent and eviction restrictions related to the COVID-19 pandemic; 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.
We have rights to terminate our management agreements with operators, in whole or with respect to specific properties under certain circumstances,
and we may be unable to replace if our management agreements are terminated or not renewed
We are parties to long-term management agreements with our Seniors Housing Operating managers pursuant to which they provide comprehensive
property management, accounting and other services with respect to our Seniors Housing Operating properties. We have the ability to terminate any of our
management agreements upon the occurrence of certain events such as insolvency relating to such manager, and in some cases, the failure to meet specific
NOI targets without curing, as well as the occurrence of other events or certain conditions.
We regularly monitor and review our rights and remedies under our management agreements. When determining if we will take significant action under
those agreements, including terminating a manager, we consider numerous legal, contractual, regulatory, business and other relevant factors. In exercising
our rights to terminate or not renew a management agreement, we would work with our existing seniors housing operators or potentially new operators to
manage the properties; however, there is no assurance that we would be able to timely source a replacement or that any replacement manager would be
effective. Any transition to a new manager would most likely require regulatory approval and potentially the approval of the holders of any liens on the
property. The failure to replace on a timely basis, as well as the failure to receive these approvals, either at all or in a timely manner, could have an adverse
effect on the properties and our revenue.
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
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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’ and managers' ability to meet their obligations to us
The operators and managers of our properties compete on a local and regional basis with operators and managers 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 and managers are expected to encounter
increased competition in the future that 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 meet our expected yields and fulfill their obligations to us, including but not limited to the results of the COVID-19
pandemic. If our operators and managers cannot compete effectively or if there is an oversupply of facilities, their financial performance 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
In addition to the impact of the COVID-19 pandemic, our business and operations are exposed to risks from severe cold and flu seasons or the
occurrence of epidemics or any other widespread illnesses. Our revenues and our operators' revenues are dependent on occupancy and 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. As experienced during the COVID-19 pandemic, a future flu or other 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 investments with a
broad variety of potential investors, including
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other health care REITs, real estate 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. In
addition, our ability to execute on our real estate investment strategies may be temporarily disrupted during periods of financial market volatility or real
estate and health care industry market uncertainty, including as a result of the COVID-19 pandemic.
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, 2020, 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
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 financing and insurance coverage to enable them to satisfy their respective
indemnification 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 loans to Genesis and their operational or other failures could
adversely impact their ability to repay these loans when due. During 2020, Genesis indicated substantial doubt as to their ability to continue as a going
concern. Effective July 1, 2020, we revised our method of revenue recognition to a cash-basis accounting method from a straight-line accounting method
and wrote off existing straight-line rent receivable balances of $91,025,000. In addition, during 2020 we recognized $80,873,000 of provision for loan
losses with respect to our Genesis loan portfolio. As of December 31, 2020, Genesis is current on all obligations to us.
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 9.8% and 9.4% of total Welltower revenues, respectively. As of December 31, 2020, Revera
managed 94 of our Seniors Housing Operating properties in 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 or loss 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
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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, 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 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. will be
adversely impacted by the U.K.'s withdrawal from the EU in 2020 (commonly referred to as "Brexit") and that we will face increased regulatory and legal
complexities 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 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. Due to the uncertainty of the long term effects of the COVID-19 pandemic, general and professional liability
insurance coverage may be restricted or very costly, which may adversely affect the tenants’, operators’ and managers’ future
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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
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 2021, more than 75% 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. For example, the U.S. Supreme Court heard oral argument in a case seeking to invalidate the Affordable Care Act on November 10,
2020, with a decision expected to be issued in 2021. Additionally, while the Trump Administration and prior U.S. Congresses have sought to modify,
repeal, or otherwise invalidate all, or certain provisions of, the Health Reform Laws, including Medicaid expansion, there is uncertainty with respect to the
impact the Biden Administration and the new U.S. Congress may have upon the Health Reform Laws. 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 pre-admission authorization and utilization review and by
payor pressures to maximize outpatient and alternative health care delivery services for less acutely ill patients. Efforts to
33
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.
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. The likelihood of these actions may increase due to the uncertainty of the long term effects of the COVID-19
pandemic. 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.
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 or named as a party in in legal proceedings, lawsuits and other claims that involve class actions, disputes
regarding property damage, care matters and other issues. 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 required governmental permits and authorizations. These factors could result in
increased costs or our abandonment of these projects. In addition, we may abandon opportunities we have begun to investigate, for a range of reasons,
including changes in expected financing or
34
construction costs, adverse changes in expected rents or expenses, adverse environmental findings, or conditions to zoning approval, which would result in
additional expenses beyond those originally expected. In addition, we may not be able to obtain financing on favorable terms, or at all, which may render
us unable to proceed with our development activities. We may not be able to complete construction and lease-up of a property on budget and 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.
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, operating expenses, capital costs and future competition. If
our financial projections with respect to a new property are inaccurate, 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.
Operators of new facilities we construct 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 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.
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. 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,
wildfires 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.
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
35
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.
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 information technology 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 within our environment or our third party vendors' environments, 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 or our vendors' 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, suppliers 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 or detecting a cyber-
attack. Even the most well-protected information, networks, systems and facilities remain 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, implement adequate cybersecurity barriers or other preventative
measures, or recover from an attack without operational impact, 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 or result in operational disruptions could
result in legal claims or proceedings, including enforcement actions by regulators under data privacy regulations, such as the U.K. General Data Protection
Regulation which imposes administrative fines for serious breaches up to the greater of 4% of annual worldwide turnover or £17.5 million.
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
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.
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.
36
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 November 2020, ICE Benchmark Administration, the
administrator of LIBOR, with support of the United States Federal Reserve and the United Kingdom's Financial Conduct Authority, announced plans to
consult on ceasing publication of USD LIBOR on December 31, 2021 for the one week and two month USD LIBOR tenors, and on June 30, 2023 for all
other USD LIBOR tenors. While this announcement extends the transition period, the United States Federal Reserve concurrently issued a statement
advising banks to stop new USD LIBOR issuances by the end of 2021. At this time, no consensus exists as to which reference rate or rates or benchmarks
may become acceptable alternatives to LIBOR. The Alternative Reference Rates Committee, which was convened by the Federal Reserve Board and the
New York Fed, has identified the Second Oversight Financing Rate as the recommended alternative rate for LIBOR. 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 2023. 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 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.
Risks Arising from Our Status as a REIT
37
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;
• 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.
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.
38
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. 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.
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.
We cannot predict how changes in the tax laws in the U.S. or foreign jurisdictions might affect our investors or us. Revisions in 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, could cause us to change our investments and commitments, and adversely affect our earnings and cash flow.
Item 1B. Unresolved Staff Comments
None.
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, 2020 (dollars in thousands):
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Property Location
Alabama
Arkansas
Arizona
California
Colorado
Connecticut
District Of Columbia
Delaware
Florida
Georgia
Iowa
Idaho
Illinois
Indiana
Kansas
Kentucky
Louisiana
Massachusetts
Maryland
Maine
Michigan
Minnesota
Missouri
Mississippi
Montana
North Carolina
Nebraska
New Hampshire
New Jersey
New Mexico
Nevada
New York
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
Tennessee
Texas
Utah
Virginia
Washington
Wisconsin
West Virginia
Total domestic
Canada
United Kingdom
Total international
Grand total
Seniors Housing Operating
Triple-net
Outpatient Medical
Number of
Properties
Total Investment
Annualized
(1)
Revenues
Number of
Properties
Total Investment
Annualized
(1)
Revenues
Number of
Properties
Total Investment
Annualized
(1)
Revenues
2 $
—
7
78
12
3
2
3
7
9
3
1
16
3
3
2
3
13
8
1
6
3
3
2
1
3
—
—
28
1
6
29
20
2
8
15
1
2
47
3
5
23
2
—
386
106
64
170
15,547 $
—
88,797
2,828,278
440,994
69,392
81,008
67,202
351,736
127,428
47,758
20,512
441,293
90,732
67,391
36,324
49,884
346,901
404,791
23,988
179,491
81,102
68,961
15,910
5,749
111,536
—
—
709,757
13,230
105,538
598,244
391,987
28,900
88,469
223,050
4,029
46,751
1,169,494
68,458
274,569
498,147
19,298
—
10,302,626
2,137,818
2,107,965
4,245,783
5,955
—
27,276
578,066
82,385
14,888
9,534
21,516
58,586
33,200
17,434
3,631
94,750
8,086
13,979
11,374
13,295
62,062
79,794
11,866
27,958
11,252
11,294
8,694
4,451
18,502
—
—
177,237
774
24,727
114,782
47,786
1,781
15,034
59,129
4,697
13,832
231,006
15,628
72,707
101,953
4,816
—
2,115,717
426,383
342,293
768,676
2 $
—
—
23
11
8
—
7
51
3
7
—
25
27
27
6
1
8
21
—
29
11
1
1
—
51
4
4
40
—
1
4
34
20
1
70
8
4
24
1
26
7
4
3
575
6
60
66
19,186 $
—
—
455,370
276,364
114,188
—
111,356
567,485
39,834
55,982
—
347,417
334,689
240,888
57,010
7,785
96,521
273,062
—
267,661
227,346
11,752
10,453
—
384,336
28,806
45,892
734,164
—
18,154
40,469
310,810
213,073
2,671
743,994
36,765
36,721
323,695
22,993
272,615
91,264
68,135
35,159
6,924,065
144,937
831,038
975,975
556 $
14,548,409 $
2,884,393
641 $
7,900,040 $
2,562
—
—
64,088
29,041
15,169
—
12,184
57,614
2,715
6,184
—
32,780
50,198
30,101
7,042
840
16,031
14,989
—
27,330
27,666
69
—
—
56,361
4,728
6,803
58,934
—
3,327
3,525
44,716
25,723
818
112,934
3,181
3,985
48,740
2,103
34,368
10,254
8,905
4,648
830,656
10,192
110,363
120,555
951,211
2 $
1
7
39
3
—
—
—
24
12
—
2
7
—
—
—
—
7
11
—
5
7
12
1
—
24
2
—
13
—
9
15
5
1
1
4
2
5
55
—
6
9
5
—
296
—
—
—
34,636 $
23,932
81,371
943,263
32,331
—
—
51,372
228,424
222,174
—
52,930
115,858
—
—
—
—
108,729
246,339
—
79,400
150,504
197,889
36,417
—
410,779
31,536
—
340,111
—
144,490
431,649
88,341
14,354
44,609
75,136
10,364
130,646
1,112,114
—
114,942
207,224
91,270
—
5,853,134
—
173,364
173,364
4,626
3,619
8,904
73,657
5,464
—
—
1,548
42,292
27,456
—
3,433
14,600
—
—
—
—
12,847
27,273
—
7,568
29,941
23,962
2,265
—
32,576
4,406
—
48,302
—
10,057
26,950
8,944
2,085
2,730
6,966
1,570
13,381
113,178
—
13,617
28,552
9,367
—
612,136
—
11,667
11,667
296 $
6,026,498 $
623,803
(1)
Represents revenue for the month ended December 31, 2020 annualized.
The following table sets forth occupancy and average annualized revenues for certain property types (excluding investments in unconsolidated entities):
40
Seniors Housing Operating
Triple-net
Outpatient Medical
(5)
(4)
(3)
Occupancy
(1)
Average Annualized Revenues
(2)
2020
77.4%
72.7%
94.9%
2019
86.9%
84.3%
94.1%
2020
2019
$
$
52,280
15,291
36
56,329
14,578
34
per unit
per bed/unit
per sq. ft.
We use unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy for properties other than Outpatient Medical buildings and have not
(3)
Represents December annualized revenues divided by total beds, units or square feet as presented in the tables above.
Occupancy represents average occupancy for the three months ended December 31.
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
(1)
independently verified the information.
(2)
(4)
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, 2020 (dollars in
thousands):
Triple-net:
Properties
(2)
Base rent
% of base rent
Units
% of units
Outpatient Medical:
Square feet
(2)
Base rent
% of base rent
Leases
% of leases
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Thereafter
Expiration Year
(1)
6
9,020
$
9
6,503
$
$
1.3 %
877
1.4 %
0.9 %
942
1.5 %
2
840
0.1 %
222
0.4 %
4
11,431
$
$
1.6 %
692
1.1 %
$
28
5,968
0.8 %
1,759
2.8 %
67
85,929
12.2 %
5,089
8.2 %
1,507,450
44,135
$
1,571,222
47,043
$
1,750,045
48,626
$
1,892,217
57,471
$
1,024,825
28,244
$
1,046,414
28,049
$
10.1 %
375
16.6 %
10.8 %
326
14.4 %
11.1 %
360
15.9 %
13.2 %
293
13.0 %
6.5 %
211
9.3 %
6.4 %
166
7.4 %
$
$
$
$
18
36,129
5.1 %
2,350
3.8 %
994,202
25,384
5.8 %
129
5.7 %
$
$
15
22,587
3.2 %
1,633
2.6 %
870,878
22,168
5.1 %
113
5.0 %
$
15
31,309
4.5 %
1,429
2.3 %
23
44,598
6.3 %
2,439
3.9 %
714,632
20,494
1,394,936
34,637
$
4.7 %
71
3.1 %
7.9 %
89
3.9 %
$
$
433
448,545
64.0 %
44,576
72.0 %
3,668,425
79,937
18.4 %
125
5.7 %
(1)
(2)
Excludes investments in unconsolidated entities, developments, land parcels, loans receivable and sub-leases. Investments classified as held for sale are included in 2021.
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 proceedings, we may have significant legal expenses and costs associated with the defense of such 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.
41
PART II
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 3,335 stockholders of record as of January 29, 2021.
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, 2020, 153 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. 2015 equals $100 and dividends are
assumed to be reinvested.
12/31/2015
12/31/2016
12/31/2017
12/31/2018
12/31/2019
S & P 500
Welltower Inc.
FTSE NAREIT Equity
$
100.00 $
100.00
100.00
113.51 $
97.45
111.99
138.29 $
97.65
117.84
132.23 $
112.59
112.39
173.86 $
138.52
141.61
12/31/2020
202.96
121.24
126.25
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.
During the three months ended December 31, 2020, we acquired shares of our common stock held by employees who tendered shares to satisfy tax
withholding obligations upon the vesting of previously issued restricted stock awards. Specifically, the number of shares of common stock acquired from
employees and the average prices paid per share for each month in the fourth quarter ended December 31, 2020 are as shown in the table below.
On May 1, 2020, our Board of Directors authorized a share repurchase program whereby we may repurchase up to $1 billion of common stock through
December 31, 2021 (the "Repurchase Program"). Under this authorization, we are not required to purchase shares but may choose to do so in the open
market or through private transactions at times and amounts based on our evaluation of market conditions and other factors. We expect to finance any share
repurchases under the Repurchase Program using available cash and may use proceeds from borrowings or debt offerings. We did not repurchase any
shares of our common stock during the three months ended December 31, 2020.
42
Issuer Purchases of Equity Securities
Total Number of Shares
Purchased
Average Price Paid Per
Share
Total Number of Shares
Purchased as Part of Publicly
Announced Repurchase Program
Maximum Dollar Value of Shares
that May Yet Be Purchased Under the
Repurchase Program
— $
44
166,969
167,013 $
—
58.13
65.72
65.72
— $
—
—
— $
—
—
—
992,348,000
Period
October 1, 2020 through October 31, 2020
November 1, 2020 through November 30, 2020
December 1, 2020 through December 31, 2020
Totals
Item 6. Selected Financial Data
The following selected financial data for the five years ended December 31, 2020 are derived from our audited consolidated financial statements (in
thousands, except per share data):
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
Income from continuing operations
Net income
Preferred stock dividends
Preferred stock redemption charge
Net income (loss) attributable to noncontrolling interests
Net income attributable to common stockholders
Other Data
Average number of common shares outstanding:
Basic
Diluted
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
(1)
Cash distributions per common share
Balance Sheet Data
(2)
Net real estate investments
Total assets
Total debt and lease obligations
Total liabilities
Total preferred stock
Total equity
(2)
$
$
$
$
$
$
$
$
2016
2017
Year Ended December 31,
2018
2019
2020
4,281,160
3,571,907
$
4,316,641
4,017,025
$
4,700,499
4,277,009
$
5,121,306
4,578,414
$
709,253
19,128
(10,357)
364,046
1,082,070
1,082,070
65,406
—
4,267
1,012,397
358,275
360,227
3.02
2.83
3.00
2.81
3.44
2016
26,563,629
28,865,184
12,358,245
13,185,279
1,006,250
15,281,472
$
$
$
$
$
$
$
299,616
(20,128)
(83,125)
344,250
540,613
540,613
49,410
9,769
17,839
463,595
367,237
369,001
1.47
1.26
1.47
1.26
3.48
2017
26,171,077
27,944,445
11,731,936
12,643,799
718,503
14,925,452
$
$
$
$
$
$
$
423,490
(8,674)
(641)
415,575
829,750
829,750
46,704
—
24,796
758,250
373,620
375,250
2.22
2.03
2.21
2.02
3.48
December 31,
2018
28,420,769
30,342,072
13,297,144
14,331,427
718,498
15,586,599
$
$
$
$
$
$
$
542,892
(2,957)
42,434
748,041
1,330,410
1,330,410
—
—
97,978
1,232,432
401,845
403,808
3.31
3.07
3.29
3.05
3.48
2019
31,119,271
33,380,751
15,388,765
16,398,247
—
16,506,627
$
$
$
$
$
$
$
4,605,967
4,637,519
(31,552)
(9,968)
(8,083)
1,088,455
1,038,852
1,038,852
—
—
60,008
978,844
415,451
417,387
2.50
2.36
2.49
2.33
2.70
2020
28,474,947
32,483,642
14,216,986
15,258,580
—
16,881,572
(1)
(2)
Includes adjustment to the numerator for income (loss) attributable to OP unitholders.
Effective January 1, 2019, we adopted new guidance on leases using the prospective method.
43
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
Sources and Uses of Cash
Off-Balance Sheet Arrangements
Contractual Obligations
Capital Structure
Summary
Seniors Housing Operating
Triple-net
Outpatient Medical
Non-Segment/Corporate
Non-GAAP Financial Measures
Critical Accounting Policies
LIQUIDITY AND CAPITAL RESOURCES
RESULTS OF OPERATIONS
OTHER
44
45
46
47
48
49
49
50
51
51
52
53
55
57
59
60
65
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.
The following table summarizes our consolidated portfolio for the year ended December 31, 2020 (dollars in thousands):
Type of Property
Seniors Housing Operating
Triple-net
Outpatient Medical
Totals
NOI
(1)
755,552
748,121
505,071
2,008,744
$
$
Percentage of
NOI
Number of
Properties
37.6 %
37.2 %
25.2 %
100.0 %
556
641
296
1,493
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
(1)
shown at 100% of the joint venture amount. See Non-GAAP Financial Measures for additional information and reconciliation.
The COVID-19 pandemic has had and may continue to have material and adverse effects on our financial condition, results of operations and cash flows
in the future. The extent to which the COVID-19 pandemic impacts our operations and those of our operators and tenants will depend on future
developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the
effectiveness and availability of vaccines and the success of ongoing vaccination deployment efforts in our facilities and the geographic areas in which we
operate, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment
measures, among others.
Our Seniors Housing Operating revenues are dependent on occupancy. While admission bans were lifted across our portfolio during the second and third
quarter, with the ramp up of COVID-19 cases in the general community in the fourth quarter, admissions bans, both government-imposed and voluntary
bans adopted by operators, have been reinstated in many locations which have significantly affected occupancy rates. Occupancy has consistently declined
since the beginning of the pandemic to 76.2% as of December 31, 2020. Through February 5, 2021, total occupancy declined an additional 180 basis points
to 74.4%. Occupancy metrics represents approximate spot occupancy as reported by our operators for properties in operation as of February 29, 2020,
including unconsolidated properties but excluding acquisitions, executed dispositions and development conversions since such date.
We have incurred increased operational costs as a result of the introduction of public health measures and other regulations affecting our properties, as
well as additional health and safety measures adopted by us and our operators related to the COVID-19 pandemic, including increases in labor, personal
protective equipment and sanitation. We expect total Seniors Housing Operating expenses to remain elevated during the pandemic and potentially beyond
as these additional health and safety measures become standard practice.
Our Triple-net operators are experiencing similar occupancy declines and operating costs as described above with respect to our Seniors Housing
Operating properties. However, long-term/post-acute care facilities are generally experiencing a higher degree of occupancy declines. These factors may
continue to impact the ability of our Triple-net operators to make contractual rent payments to us in the future. Many of our Triple-net operators received
funds under the Coronavirus Aid Relief, and Economic Security Act (“CARES Act”) Paycheck Protection Program. In addition, operators of long-
term/post-acute care facilities have generally received funds from Phase 1 of the Provider Relief Fund and operators of assisted living facilities have or are
expected to receive funds from Phase 2 of the Provider Relief Fund. Accordingly, collection of Triple-net rent due during the COVID-19 pandemic to date
(from March to December) has generally been consistent with historical collection rates and no significant rent concessions or deferrals have been made.
45
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our Outpatient Medical tenants have experienced temporary medical practice closures or decreases in revenue due to government-imposed restrictions
on elective medical procedures, stay at home orders or decisions by patients to delay treatments which may continue to adversely affect their ability to
make contractual rent payments. These factors have and may continue to cause operators or tenants to seek modifications of such obligations, resulting in
reductions in revenue and increases in uncollectible receivables. We will continue to evaluate each request on a case-by-case basis and determine if a form
of rent relief is warranted following an examination of the tenant’s financial health, rent coverage, current operating situation and other factors.
Outpatient Medical rent collections through March were generally consistent with pre COVID-19 levels. During the second quarter we executed short
term rent deferrals with certain Outpatient Medical tenants which in most cases were required to be repaid by year end. Since then we have collected
approximately 99% of Outpatient Medical rent due in the second half of the year, with uncollected amounts primarily attributable to local jurisdictions with
COVID-19 related ordinances providing temporary rent relief to tenants. Furthermore, collections of deferred rent due under executed deferrals was over
99%. To the extent that deferred rent is not repaid as expected, or the prolonged impact of the COVID-19 pandemic causes operators or tenants to seek
further modifications of their lease agreements, we may recognize reductions in revenue and increases in uncollectible receivables.
As a result of uncertainty regarding the length and severity of the COVID-19 pandemic and the impact of the pandemic on our business and related
industries, our investments in and acquisitions of seniors housing and health care properties, as well as our ability to transition or sell properties with
profitable results in the future, may be limited. In response to the COVID-19 pandemic, acquisitions during the year ended December 31, 2020 declined
compared to recent years. Additionally, we undertook certain opportunistic disposals to enhance near-term liquidity. We have a significant development
portfolio as of December 31, 2020. To date we have only experienced minor construction and licensing delays with respect to our development portfolio,
but may experience more significant delays in the future. Such disruptions to acquisition, disposition and development activity may negatively impact our
long-term competitive position.
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 NOI 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 and 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, 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, 2020, resident fees and 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,
46
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and
transaction costs), loan advances, property operating expenses, general and administrative expenses and other 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 may occur in the future. To the extent that investment dispositions
exceed new 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. During 2020, in response to the COVID-19 pandemic, we were strategic and
opportunistic in disposing of certain real estate which provided significant near term liquidity. At December 31, 2020, we had $1,545,046,000 of cash and
cash equivalents, $475,997,000 of restricted cash and $3,000,000,000 of available borrowing capacity under our unsecured revolving credit facility.
Key Transactions
Capital The following summarizes key capital transactions that occurred during the year ended December 31, 2020:
•
•
In April 2020, we closed on a $1.0 billion two-year unsecured term loan. The term loan bears interest at a rate of 1-month LIBOR + 1.20%, based
on our credit rating.
In June 2020, we completed the issuance of $600,000,000 senior unsecured notes bearing interest at 2.75% with a maturity date of January 2031.
Net proceeds were used to fund tender offers for $426,248,000 of our 3.75% senior unsecured notes due 2023 and our 3.95% senior unsecured
notes due 2023 which settled on July 1, 2020. The remaining proceeds were used to reduce borrowings under our term loan by $140,000,000.
• We sold 2,128,000 shares of common stock under our ATM and DRIP programs, primarily in the first quarter, via both cash settle and forward sale
agreements, generating gross proceeds of approximately $175,484,000. The sale of these shares and settlement of previously outstanding forward
sales resulted in gross proceeds of approximately $607,177,000 which were used to reduce borrowings under our unsecured revolving credit
facility.
• We extinguished $632,288,000 of secured debt at a blended average interest rate of 2.21% throughout 2020.
Investments The following summarizes property acquisitions and joint venture investments completed during the year ended December 31, 2020 (dollars
in thousands):
Seniors Housing Operating
Triple-net
Outpatient Medical
Totals
Properties
Investment Amount
(1)
26 $
11
17
54 $
574,793
88,908
246,516
910,217
(2)
Capitalization Rates
3.5%
6.5%
6.1%
4.5%
$
$
Book Amount
(3)
610,857
90,731
249,312
950,900
(1)
(2)
(3)
Represents stated pro rata purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S. GAAP.
Represents annualized contractual or projected NOI to be received in cash divided by investment amounts.
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.
Dispositions The following summarizes property dispositions completed during the year ended December 31, 2020 (dollars in thousands):
Seniors Housing Operating
Triple-net
Outpatient Medical
Totals
Properties
Proceeds
(1)
31 $
8
108
147 $
1,282,439
109,439
2,324,062
3,715,940
(2)
Capitalization Rates
4.8%
7.9%
5.6%
5.4%
$
$
Book Amount
(3)
1,289,769
51,666
1,755,864
3,097,299
(1)
(2)
(3)
Represents pro rata proceeds received upon disposition including any seller financing.
Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.
Represents carrying value of net real estate assets at time of disposition. See Note 5 to our consolidated financial statements for additional information.
47
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Dividends On February 9, 2021, the Board of Directors declared a cash dividend for the quarter ended December 31, 2020 of $0.61 per share, consistent
with the cash dividends for the quarters ended September 30, June 30 and March 31, 2020, representing a 30% decrease from the $0.87 per share dividend
for the quarter ended December 31, 2019. The dividend declaration represents the 199 consecutive quarterly dividend payment.
th
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):
Net income
Net income attributable to common stockholders
Funds from operations attributable to common stockholders
Consolidated net operating income
2020
Year Ended December 31,
2019
2018
$
1,038,852 $
978,844
1,102,562
2,008,144
1,330,410 $
1,232,432
1,577,080
2,431,264
829,750
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 (“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:
Net debt to book capitalization ratio
Net debt to undepreciated book capitalization ratio
Net debt to market capitalization ratio
Adjusted interest coverage ratio
Adjusted fixed charge coverage ratio
Year Ended December 31,
2020
40.9%
33.8%
29.7%
3.97x
3.54x
2019
46.5%
39.4%
29.6%
4.14x
3.78x
2018
45.0%
37.8%
31.3%
4.11x
3.44x
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:
48
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Property mix:
Seniors Housing Operating
Triple-net
Outpatient Medical
Relationship mix:
(2)
(2)
Sunrise Senior Living
ProMedica
Revera
Avery Healthcare
Sagora Senior Living
Remaining
Geographic mix:
California
United Kingdom
Texas
Canada
Pennsylvania
Remaining
2020
38%
37%
25%
13%
11%
5%
4%
3%
64%
14%
10%
9%
6%
6%
55%
December 31,
2019
(1)
43%
38%
19%
14%
9%
6%
3%
3%
65%
13%
8%
8%
7%
6%
58%
2018
43%
40%
17%
15%
4%
7%
3%
3%
68%
14%
9%
8%
7%
5%
57%
(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.
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, general and
administrative expenses and other 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):
49
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 translation
Cash, cash equivalents and restricted
cash at end of period
Year Ended
One Year Change
December 31,
2020
December 31,
2019
$
%
Year Ended
December 31,
2018
One Year Change
Two Year Change
$
%
$
%
$
385,766
$
316,129
$
69,637
22 % $
309,303
$
6,826
2 % $
76,463
25 %
1,364,756
2,347,928
(2,080,858)
3,451
1,535,968
(2,048,791)
577,150
5,310
(171,212)
4,396,719
(2,658,008)
(1,859)
-11 %
n/a
n/a
-35 %
1,583,944
(2,386,471)
818,368
(9,015)
(47,976)
337,680
(241,218)
14,325
-3 %
-14 %
-29 %
n/a
(219,188)
4,734,399
(2,899,226)
12,466
-14 %
n/a
n/a
n/a
$
2,021,043
$
385,766
$
1,635,277
424 % $
316,129
$
69,637
22 % $
1,704,914
539 %
Operating Activities The changes in net cash provided from operating activities are primarily attributable to declines in revenue and increases in property
operating expenses, as well as the impact of short-term deferrals granted as a result of the COVID-19 pandemic in 2020. Please see “Results of Operations”
for discussion of net income fluctuations. For the years ended December 31, 2020, 2019 and 2018, cash flows from operations exceeded cash distributions
to stockholders.
Investing Activities The changes in net cash used in investing activities are primarily attributable to net changes in real property investments and
dispositions, loans receivable and investments in unconsolidated entities which are summarized above in “Key Transactions.” Please refer to Notes 3 and 5
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
Total
$
$
Year Ended
One Year Change
December 31,
2020
December 31,
2019
$
201,336
$
323,488
$
(122,152)
%
-38 % $
Year Ended
December 31,
2018
160,706
$
One Year Change
Two Year Change
$
162,782
%
101 % $
$
40,630
%
25 %
83,146
136,535
(53,389)
-39 %
90,190
46,345
51 %
(7,044)
161,843
446,325
$
192,289
652,312
$
(30,446)
(205,987)
-16 %
-32 % $
175,993
426,889
$
16,296
225,423
9 %
53 % $
(14,150)
19,436
-8 %
-8 %
5 %
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/used in financing activities are primarily attributable to changes related to our long-term debt
arrangements, the issuances of common 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.
On April 1, 2020, in response to uncertain financial market conditions arising from the COVID-19 pandemic, we undertook steps to strengthen our
balance sheet and to enhance our liquidity by entering into a $1.0 billion two-year unsecured term loan. Additionally, on June 30, 2020, we completed the
issuance of $600,000,000 senior unsecured notes with a maturity date of January 2031. Net proceeds were used to fund tender offers for $426,248,000 of
our 3.75% senior unsecured notes due 2023 and our 3.95% senior unsecured notes due 2023, which settled on July 1, 2020. The remaining proceeds were
used to reduce borrowings under the term loan by $140,000,000. As of December 31, 2020, we have total near-term available liquidity of approximately
$4.5 billion. However, we are unable to accurately predict the full impact that the pandemic will have on our results from operations, financial condition,
liquidity and cash flows due to numerous factors discussed in Part I Item 1A. Risk Factors.
Off-Balance Sheet Arrangements
At December 31, 2020, we had investments in unconsolidated entities with our ownership generally ranging from 10% to 65%. We use financial
derivative instruments to hedge interest rate and foreign currency exchange rate exposure. At December 31, 2020, we had nine outstanding letter of credit
obligations. Please see Notes 8, 12 and 13 to our consolidated financial statements for additional information.
50
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, 2020 (in thousands):
Contractual Obligations
Senior unsecured notes and term credit facilities:
(1)
U.S. Dollar senior unsecured notes
Canadian Dollar senior unsecured notes
(2)
Pounds Sterling senior unsecured notes
(2)
U.S. Dollar term credit facility
Canadian Dollar term credit facility
Secured debt:
(1,2)
(2)
(3)
Consolidated
Unconsolidated
Contractual interest obligations:
Senior unsecured notes and term loans
Consolidated secured debt
Unconsolidated secured debt
Financing lease liabilities
Operating lease obligations
Purchase obligations
(2)
(2)
(4)
(4)
(5)
(2)
Total contractual obligations
Total
2021
Payments Due by Period
2022-2023
2024-2025
Thereafter
$
$
8,273,752 $
235,239
1,434,510
1,370,000
196,032
— $
—
—
—
—
673,752 $
—
—
1,370,000
196,032
2,600,000 $
—
—
—
—
2,378,073
1,064,949
451,038
54,073
833,433
206,924
397,785
557,508
3,872,398
309,885
200,426
197,427
1,002,538
784,797
21,320,026 $
423,475
72,990
35,099
8,777
20,316
399,771
1,465,539 $
816,492
101,412
65,011
78,026
38,133
309,660
4,688,875 $
651,101
58,755
42,031
2,950
33,955
65,920
4,410,005 $
5,000,000
235,239
1,434,510
—
—
695,817
246,444
1,981,330
76,728
58,285
107,674
910,134
9,446
10,755,607
(1)
(2)
(3)
(4)
(5)
Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the Consolidated Balance Sheets.
Based on foreign currency exchange rates in effect as of balance sheet date.
Based on variable interest rates in effect as of December 31, 2020.
See Note 6 to our consolidated financial statements for additional information.
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, 2020, 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 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 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 29, 2021, 2,541,750 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”). The Equity Shelf Program also allows us to enter into forward sale agreements. As of January 29,
2021, we had $499,341,000 of remaining capacity under the Equity Shelf Program and there were no outstanding forward sales agreements. 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.
On May 1, 2020, our Board of Directors authorized a share repurchase program whereby we may repurchase up to $1 billion of common stock through
December 31, 2021 (the "Repurchase Program"). Under this authorization, we are not required to purchase shares but may choose to do so in the open
market or through private transactions at times and amounts based on our
51
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
evaluation of market conditions and other factors. We expect to finance any share repurchases under the Repurchase Program using available cash and may
use proceeds from borrowings or debt offerings.
Results of Operations
Summary
Our primary sources of revenue include resident fees and services, rent and interest income. Our primary expenses include property operating expenses,
depreciation and amortization, interest expense, general and administrative expenses, and other 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 same store NOI ("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 2020 and 2019 items and year-to-year comparisons between 2020 and 2019. Discussions
of 2018 items and year-to-year comparisons between 2019 and 2018 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, 2019.
The following is a summary of our results of operations for the periods presented (dollars in thousands, except per share amounts):
Net income
NICS
FFO
Adjusted EBITDA
Consolidated NOI
Per share data (fully diluted):
(1)
Net income attributable to common
stockholders
Funds from operations attributable to
common stockholders
Adjusted interest coverage ratio
Adjusted fixed charge coverage ratio
Year Ended
One Year Change
December 31,
2020
December 31,
2019
Amount
%
$
$
$
$
$
$
1,038,852
978,844
1,102,562
2,048,412
2,008,144
2.33
2.64
3.97x
3.54x
$
$
$
1,330,410
1,232,432
1,577,080
2,328,202
2,431,264
3.05
3.91
4.14x
3.78x
(291,558)
(253,588)
(474,518)
(279,790)
(423,120)
(0.72)
(1.27)
-0.17x
-0.24x
-22 % $
-21 %
-30 %
-12 %
-17 %
-24 % $
-32 % $
-4 %
-6 %
Year Ended
December 31,
2018
829,750
758,250
1,392,183
2,153,005
2,267,482
2.02
3.71
4.11x
3.44x
One Year Change
Two Year Change
Amount
%
Amount
%
$
$
$
500,660
474,182
184,897
175,197
163,782
1.03
0.20
0.03x
0.34x
60 % $
63 %
13 %
8 %
7 %
51 % $
5 % $
1 %
10 %
209,102
220,594
(289,621)
(104,593)
(259,338)
0.31
(1.07)
-0.14x
0.10x
25 %
29 %
-21 %
-5 %
-11 %
15 %
-29 %
-3 %
3 %
(1)
Includes adjustment to the numerator for income (loss) attributable to OP unitholders.
The following table represents the changes in outstanding common stock for the period from January 1, 2018 to December 31, 2020 (in thousands):
December 31, 2020
Year Ended
December 31, 2019
December 31, 2018
Totals
Beginning balance
Dividend reinvestment plan issuances
Preferred stock conversions
Option exercises
Equity Shelf Program issuances
Repurchase of common stock
Other, net
Ending balance
Average number of shares outstanding:
Basic
Diluted
410,257
264
—
—
6,800
(202)
282
417,401
415,451
417,387
383,675
5,799
12,712
11
7,856
—
204
410,257
401,845
403,808
371,732
6,529
—
57
5,241
—
116
383,675
373,620
375,250
371,732
12,592
12,712
68
19,897
(202)
602
417,401
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.
52
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Seniors Housing Operating
The following is a summary of our SSNOI at Welltower's Share for the Seniors Housing Operating segment (dollars in thousands):
SSNOI
(1)
QTD Pool
YTD Pool
Three Months Ended
Change
Year Ended
Change
December 31,
2020
December 31,
2019
$
154,373
$
216,166
$
$
(61,793)
%
-28.6 % $
December 31,
2020
December 31,
2019
$
591,133
$
764,328
$
(173,195)
%
-22.7 %
(1)
Relates to 514 properties for the QTD Pool and 399 properties for the YTD Pool. Please see "Non-GAAP Financial Measures for additional information and reconciliations.
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
One Year Change
December 31,
2020
December 31,
2019
$
%
Year Ended
December 31,
2018
One Year Change
Two Year Change
$
%
$
%
Revenues:
Resident fees and services
Interest income
Other income
Total revenues
Property operating expenses
NOI
(1)
Other expenses:
Depreciation and amortization
Interest expense
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 (loss) from unconsolidated entities
Gain (loss) on real estate dispositions, net
Income from continuing operations
Net income (loss)
Less: Net income (loss) attributable to noncontrolling
interests
Net income (loss) attributable to common
stockholders
(1)
See Non-GAAP Financial Measures below.
$
$
3,074,022
618
7,223
3,081,863
2,326,311
755,552
$
3,448,175
36
8,658
3,456,869
2,417,349
1,039,520
544,462
54,901
12,659
671
100,741
14,265
727,699
27,853
(33,857)
328,249
322,245
322,245
20,301
553,189
67,983
1,614
—
2,145
26,348
651,279
388,241
12,388
528,747
929,376
929,376
(374,153)
582
(1,435)
(375,006)
(91,038)
(283,968)
(8,727)
(13,082)
11,045
671
98,596
(12,083)
76,420
(360,388)
(46,245)
(200,498)
(607,131)
(607,131)
-11 % $
n/a
-17 %
-11 %
-4 %
-27 %
-2 %
-19 %
684 %
n/a
n/a
-46 %
12 %
-93 %
-373 %
-38 %
-65 %
-65 %
$
3,234,852
578
5,024
3,240,454
2,255,432
985,022
529,449
69,060
110
—
7,599
6,624
612,842
372,180
(28,142)
(2,245)
341,793
341,793
213,323
(542)
3,634
216,415
161,917
54,498
23,740
(1,077)
1,504
—
(5,454)
19,724
38,437
16,061
40,530
530,992
587,583
587,583
7 % $
-94 %
72 %
7 %
7 %
6 %
4 %
-2 %
n/a
n/a
-72 %
298 %
6 %
4 %
144 %
n/a
172 %
172 %
(160,830)
40
2,199
(158,591)
70,879
(229,470)
15,013
(14,159)
12,549
671
93,142
7,641
114,857
(344,327)
(5,715)
330,494
(19,548)
(19,548)
-5 %
7 %
44 %
-5 %
3 %
-23 %
3 %
-21 %
n/a
n/a
1,226 %
115 %
19 %
-93 %
-20 %
n/a
-6 %
-6 %
n/a
$
301,944
$
872,863
$
(570,919)
-65 % $
342,453
$
530,410
155 % $
(40,509)
-12 %
56,513
(36,212)
-64 %
(660)
57,173
n/a
20,961
Decreases in resident fees and services and property operating expenses are primarily a result of property dispositions and decreases in occupancy across
the portfolio due to the COVID-19 pandemic. Occupancy within our Seniors Housing Operating portfolio has declined as follows:
(1)
Spot occupancy
Sequential
occupancy change
Feb.
85.6 %
Mar.
84.9 %
Apr.
82.6 %
May
80.9 %
Jun.
79.9 %
Jul.
79.3 %
Aug.
78.7 %
Sep.
78.4 %
Oct.
78.0 %
Nov.
77.3 %
Dec.
76.2 %
(0.7)%
(2.3)%
(1.7)%
(1.0)%
(0.6)%
(0.6)%
(0.3)%
(0.4)%
(0.7)%
(1.1)%
Spot occupancy represents approximate month end occupancy for properties in operation as of February 29, 2020, including unconsolidated properties but excluding acquisitions, dispositions
(1)
and development conversions since this date.
In addition, we have experienced increased operational costs, net of reimbursements, of $78,792,000 during the year ended December 31, 2020, included
in property operating expenses relating to our consolidated properties. These expenses were incurred as a result of the introduction of public health
measures and other regulations affecting our properties, as well as additional health and safety measures adopted by us and our operators related to the
COVID-19 pandemic, including increases in labor and property cleaning expenses and expenditures related to our efforts to procure PPE and supplies, net
of reimbursements. We expect total portfolio expenses to be elevated during the pandemic and potentially beyond as these additional health and safety
measures become standard practice.
53
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
In 2020 applications were made for amounts under Phase 2 and Phase 3 of the Provider Relief Fund following the announcement from the Department of
Health and Human Services that it expanded the eligibility of the CARES Act Provider Relief Fund to include assisted living facilities. During the fourth
quarter, we received Provider Relief Funds of approximately $9 million which was recognized as a reduction to property operating expenses. To date in
2021, we have received approximately $34 million of Provider Relief Funds.
During the year ended December 31, 2020, we recorded impairment charges of $100,741,000 related to 15 held for sale or sold properties and six held
for use properties. During the year ended December 31, 2019, we recorded impairment charges of $2,145,000 related to four held for use properties.
Transaction costs related to asset acquisitions are capitalized as a component of the purchase price. Changes in the gain on sale of properties are due to the
volume of property sales and sales prices. During the year ended December 31, 2020, we recognized a gain on real estate disposition of $313 million
related to an 11 property U.S. portfolio. During the year ended December 31, 2019, we recognized a gain on real estate disposition of $520 million related
to the Benchmark Senior Living portfolio. The fluctuation in other expenses is primarily due to the timing of noncapitalizable transaction costs associated
with acquisitions and operator transitions.
Depreciation and amortization fluctuates as a result of acquisitions, disposition and 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, 2020, we completed three Seniors Housing Operating construction projects representing $93,188,000 or $300,606
per unit. The following is a summary of our consolidated Seniors Housing Operating construction projects, excluding expansions, pending as of December
31, 2020 (dollars in thousands):
Location
Potomac, MD
Beckenham, UK
Barnet, UK
Hendon, UK
Princeton, NJ
Berea, OH
Painesville, OH
Beaver, PA
Toronto, ON
Brookline, MA
Washington, DC
Columbus, OH
Raleigh, NC
Units/Beds
Commitment
Balance
120 $
100
100
102
80
120
119
116
857 $
Project in planning stage
Project in planning stage
Project in planning stage
Project in planning stage
Project in planning stage
56,720 $
64,348
70,769
75,824
29,780
14,934
14,462
14,184
341,021
$
48,783
45,722
41,215
50,817
19,209
1,538
1,508
1,152
209,944
46,856
23,679
22,951
11,492
3,107
318,029
Est. Completion
2Q21
3Q21
4Q21
1Q22
3Q22
4Q22
4Q22
4Q22
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 segment
property secured debt principal activity (dollars in thousands):
Year Ended
December 31, 2020
Year Ended
December 31, 2019
Year Ended
December 31, 2018
Beginning balance
Debt transferred in
Debt issued
Debt assumed
Debt extinguished
Debt transferred out
Principal payments
Foreign currency
Ending balance
Monthly averages
Amount
2,115,037
—
62,055
—
(441,208)
—
(48,498)
18,803
1,706,189
1,875,910
$
$
$
Weighted Avg.
Interest Rate
3.54%
—%
2.55%
—%
2.18%
—%
3.30%
2.93%
3.05%
3.19%
Amount
1,810,587
—
343,696
183,061
(219,864)
(12,072)
(43,997)
53,626
2,115,037
1,966,892
Weighted Avg.
Interest Rate
3.87%
—%
3.11%
4.58%
4.28%
3.89%
3.45%
3.33%
3.54%
3.70%
Amount
1,988,700
35,830
45,447
121,612
(240,095)
—
(47,886)
(93,021)
1,810,587
1,915,663
$
$
$
Weighted Avg.
Interest Rate
3.66%
3.84%
3.40%
5.55%
4.83%
—%
3.59%
3.31%
3.87%
3.74%
$
$
$
54
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. Losses from unconsolidated entities during the year
ended December 31, 2020 are largely attributable to depreciation and amortization of short-lived intangible assets related to certain investments in
unconsolidated joint ventures. The gains from unconsolidated entities during the year ended December 31, 2019 are largely due to a gain on the disposition
of an unconsolidated entity. Net income attributable to noncontrolling interests represents our partners’ share of net income (loss) related to joint ventures.
The increase during the years ended December 31, 2020 and 2019 relates primarily to our partner's share of the gains recognized on the sale of the 11
property U.S. portfolio and the Benchmark Senior Living portfolio, respectively.
Triple-net
The following is a summary of our SSNOI at Welltower's Share for the Triple-net segment (dollars in thousands):
SSNOI
(1)
QTD Pool
YTD Pool
Three Months Ended
Change
Year Ended
Change
December 31,
2020
December 31,
2019
$
168,697
$
170,052
$
$
(1,355)
%
-0.8 % $
December 31,
2020
December 31,
2019
$
%
628,972
$
624,877
$
4,095
0.7 %
(1)
Relates to 632 properties for the QTD Pool and 608 properties for the YTD Pool. Please see Non-GAAP Financial Measures for additional information and reconciliations.
The following is a summary of our results of operations for the Triple-net segment for the years presented (dollars in thousands):
Year Ended
One Year Change
December 31,
2020
December 31,
2019
$
%
Year Ended
December 31,
2018
One Year Change
Two Year Change
$
%
$
%
$
$
733,776
62,625
4,903
801,304
53,183
748,121
232,604
9,477
11,049
—
90,563
34,867
22,923
401,483
346,638
18,462
64,288
429,388
429,388
39,985
903,798
62,599
6,246
972,643
53,900
918,743
232,626
12,892
(4,399)
—
18,690
11,926
13,771
$
(170,022)
26
(1,343)
(171,339)
(717)
(170,622)
(22)
(3,415)
15,448
—
71,873
22,941
9,152
285,506
115,977
633,237
22,985
218,322
874,544
874,544
(286,599)
(4,523)
(154,034)
(445,156)
(445,156)
36,271
3,714
-19 % $
— %
-22 %
-18 %
-1 %
-19 %
— %
-26 %
351 %
n/a
385
192 %
66 %
41 %
-45 %
-20 %
-71 %
-51 %
-51 %
10 %
$
828,865
54,926
17,173
900,964
915
900,049
235,480
14,225
(4,016)
(32)
—
107,980
90,975
444,612
455,437
21,938
196,589
673,964
673,964
74,933
7,673
(10,927)
71,679
52,985
18,694
(2,854)
(1,333)
(383)
32
18,690
(96,054)
(77,204)
(159,106)
177,800
1,047
21,733
200,580
200,580
19,306
16,965
9 % $
14 %
-64 %
8 %
5,791
(95,089)
7,699
(12,270)
(99,660)
52,268
2 %
(151,928)
-1 %
-9 %
-10 %
100 %
n/a
-89 %
-85 %
-36 %
39 %
5 %
11 %
30 %
30 %
88 %
(2,876)
(4,748)
15,065
32
90,563
(73,113)
(68,052)
(43,129)
(108,799)
(3,476)
(132,301)
(244,576)
(244,576)
20,679
$
389,403
$
838,273
$
(448,870)
-54 % $
654,658
$
183,615
28 % $
(265,255)
-11 %
14 %
-71 %
-11 %
5,712
-17 %
-1 %
-33 %
375 %
100 %
n/a
-68 %
-75 %
-10 %
-24 %
-16 %
-67 %
-36 %
-36 %
107 %
-41 %
Revenues:
Rental income
Interest income
Other income
Total revenues
Property operating expenses
(1)
NOI
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
Income from continuing operations before income
taxes and other items
Income (loss) from unconsolidated entities
Gain (loss) on real estate dispositions, net
Income from continuing operations
Net income
Less: Net income attributable to noncontrolling
interests
Net income attributable to common stockholders
(1)
See Non-GAAP Financial Measures below.
The decrease in rental income is primarily attributable to the write-off of straight-line rent receivable balances of $146,508,000 during the year ended
December 31, 2020, relating to leases for which collection of substantially all contractual lease payments was no longer deemed probable. Included in such
amounts was $91,025,000 relating to Genesis Healthcare whom noted substantial doubt as to their ability to continue as a going concern in August. Certain
of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index 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 contractual
cash rental payments due for the period. If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our
revenues may not continue to increase. For the three months ended
55
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
December 31, 2020, we had 18 leases with rental rate increasers ranging from 0.07% to 0.34% in our Triple-net portfolio. Our Triple-net operators are
experiencing similar impacts on occupancy and operating costs due to the COVID-19 pandemic as described above with respect to our Seniors Housing
Operating properties. However, long-term/post-acute facilities are generally experiencing a higher degree of occupancy declines which may impact the
ability of our Triple-net operators to make contractual rent payments to us in the future. Many of our Triple-net operators received funds under the CARES
Act Paycheck Protection Program. In addition, operators of long-term/post-acute facilities have generally received funds from Phase 1 of the Provider
Relief Fund and operators of assisted living facilities have or are expected to receive funds from Phase 2 of the Provider Relief Fund. Accordingly,
collection of rent due during the COVID-19 pandemic to date (March through December) has generally been consistent with historical collection rates and
no significant rent concessions or deferrals have been made.
Depreciation and amortization fluctuates as a result of acquisitions, disposition and transitions of triple-net properties. 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, 2020, we recognized a provision for loan losses of $90,563,000, of which $80,873,000 represents additional
reserves as a result of the current collateral estimate related to the Genesis Healthcare outstanding loans. During the year ended December 31, 2019, we
recognized a provision for loan losses of $18,690,000 to fully reserve for certain real estate loans receivable that were no longer deemed collectible. During
the year ended December 31, 2020, we recorded impairment charges of $34,867,000 related to one held for sale and four held for use properties. During the
year ended December 31, 2019, we recorded impairment charges of $11,374,000 related to two properties. Changes in the gain on sales of properties are
related to the volume and timing of property sales and the sales prices. The fluctuation in other expense is primarily due to noncapitalizable transaction
costs from acquisitions and segment transitions.
During the year ended December 31, 2020, we completed three Triple-net construction projects representing $75,149,000 or $224,997 per unit. The
following is a summary of our consolidated Triple-net construction projects, excluding expansions, pending as of December 31, 2020 (dollars in
thousands):
Location
Thousand Oaks, CA
Redhill, UK
Leicester, UK
Wombourne, UK
Raleigh, NC
Total
Units/Beds
Commitment
Balance
82 $
76
60
66
191
475 $
25,391 $
21,723
15,301
16,394
154,256
233,065 $
Est. Completion
1Q21
2Q21
1Q22
2Q22
2Q23
21,408
11,869
5,566
5,537
14,339
58,719
Loss (gain) on derivatives and financial instruments, net is primarily attributable to the mark-to-market adjustments recorded on our Genesis Healthcare
available-for-sale investment. 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
following is a summary of our Triple-net secured debt principal activity for the periods presented (dollars in thousands):
Beginning balance
Debt transferred in
Debt extinguished
Debt transferred out
Principal payments
Foreign currency
Ending balance
Monthly averages
Year Ended
December 31, 2020
Year Ended
December 31, 2019
Year Ended
December 31, 2018
Amount
306,038
—
(176,875)
—
(4,376)
(1,135)
123,652
215,796
$
$
$
Weighted Avg.
Interest Rate
3.60%
—%
2.03%
—%
5.16%
2.97%
4.91%
3.85%
Amount
288,386
12,072
—
—
(4,017)
9,597
306,038
294,080
$
$
$
Weighted Avg.
Interest Rate
3.63%
3.89%
—%
—%
5.21%
2.99%
3.60%
3.63%
Amount
347,474
—
(4,107)
(35,830)
(3,982)
(15,169)
288,386
321,730
$
$
$
Weighted Avg.
Interest Rate
3.55%
—%
4.94%
3.84%
5.38%
3.44%
3.63%
3.51%
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. The decrease in income from unconsolidated entities during the year ended December
31, 2020 is primarily related to the write-off of Genesis Healthcare straight-line rent receivable balances at unconsolidated entities. Net income attributable
to noncontrolling interests represents our partners’ share of net income relating to those partnerships where we are the controlling partner.
56
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Outpatient Medical
The following is a summary of our SSNOI at Welltower Share for the Outpatient Medical segment (dollars in thousands):
SSNOI
(1)
$
84,985
$
84,144
$
841
1.0 % $
252,512
$
246,789
$
December 31,
2020
December 31,
2019
$
%
December 31,
2020
December 31,
2019
$
5,723
%
2.3 %
Three Months Ended
Change
Year Ended
Change
QTD Pool
YTD Pool
(1)
Relates to 303 properties for the QTD Pool and 231 properties for the YTD Pool. Please see Non-GAAP Financial Measures for additional information and reconciliations.
The following is a summary of our results of operations for the Outpatient Medical segment for the periods presented (dollars in thousands):
Year Ended
One Year Change
December 31,
2020
December 31,
2019
$
%
Year Ended
December 31,
2018
One Year Change
Two Year Change
$
%
$
%
$
$
709,584
5,913
4,522
720,019
214,948
505,071
261,371
17,579
1,046
3,202
—
8,218
291,416
213,655
7,312
695,918
916,885
916,885
(278)
$
684,602
1,195
2,031
687,828
218,793
469,035
241,258
13,411
—
—
14,062
1,788
270,519
198,516
7,061
972
206,549
206,549
24,982
4,718
2,491
32,191
(3,845)
36,036
20,113
4,168
1,046
3,202
(14,062)
6,430
20,897
15,139
251
694,946
710,336
710,336
4 % $
395 %
123 %
5 %
-2 %
8 %
8 %
31 %
n/a
n/a
-100 %
360 %
8 %
8 %
4 %
n/a
344 %
344 %
$
551,557
310
4,939
556,806
176,670
380,136
185,530
7,051
11,928
—
—
7,570
212,079
168,057
5,563
221,231
394,851
394,851
133,045
885
(2,908)
131,022
42,123
88,899
55,728
6,360
(11,928)
—
14,062
(5,782)
58,440
30,459
1,498
(220,259)
(188,302)
(188,302)
24 % $
285 %
-59 %
24 %
24 %
23 %
30 %
90 %
-100 %
n/a
n/a
-76 %
28 %
18 %
27 %
-100 %
-48 %
-48 %
158,027
5,603
(417)
163,213
38,278
124,935
75,841
10,528
(10,882)
3,202
—
648
79,337
45,598
1,749
474,687
522,034
522,034
5,194
(5,472)
-105 %
6,150
(956)
-16 %
(6,428)
$
917,163
$
201,355
$
715,808
355 % $
388,701
$
(187,346)
-48 % $
528,462
29 %
n/a
-8 %
29 %
22 %
33 %
41 %
149 %
-91 %
n/a
n/a
9 %
37 %
27 %
31 %
215 %
132 %
132 %
-105 %
136 %
Revenues:
Rental income
Interest income
Other income
Total revenues
Property operating expenses
(1)
NOI
Other expenses:
Depreciation and amortization
Interest expense
Loss (gain) on extinguishment of debt, net
.
Provision for loan losses
Impairment of assets
Other expenses
Income from continuing operations before income
taxes and other item
Income (loss) from unconsolidated entities
Gain (loss) on real estate dispositions, net
Income from continuing operations
Net income (loss)
Less: Net income (loss) attributable to
noncontrolling interests
Net income (loss) attributable to common
stockholders
(1)
See Non-GAAP Financial Measures below.
Increases 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 2020 dispositions.
Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index. 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 Consumer Price
Index does not increase, a portion of our revenues may not continue to increase. Our leases could renew above or below current rental rates, resulting in an
increase or decrease in rental income. For the three months ended December 31, 2020, our consolidated outpatient medical portfolio signed 133,859 square
feet of new leases and 282,719 square feet of renewals. The weighted-average term of these leases was six years, with a rate of $26.55 per square foot and
tenant improvement and lease commission costs of $15.23 per square foot. Substantially all of these leases contain an annual fixed or contingent escalation
rent structure ranging from 2.0% to 3.5%.
In addition, our Outpatient Medical tenants are experiencing temporary medical practice closures or decreases in revenue due to government imposed
restrictions on elective medical procedures or decisions by patients to delay treatments which may adversely affect their ability to make contractual rent
payments. Outpatient Medical rent collections through March were generally consistent with pre COVID-19 levels. During the second quarter we executed
short term rent deferrals with certain Outpatient Medical tenants which in most cases were required to be repaid by year end. Since then we have collected
approximately 99% of Outpatient Medical rent due in the second half of the year, with uncollected amounts primarily attributable to local jurisdictions with
COVID-19 related ordinances providing temporary rent relief to tenants. Furthermore,
57
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
collections of deferred rent due under executed deferrals was over 99%. To the extent that deferred rent is not repaid as expected, or the prolonged impact
of the COVID-19 pandemic causes operators or tenants to seek further modifications of their lease agreements, we may recognize reductions in revenue
and increases in uncollectible receivables.
The fluctuation in property operating expenses and depreciation and amortization are primarily attributable to acquisitions and construction conversions
of 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. During the year ended December 31, 2019, we recognized impairment charges of $14,062,000 related to three 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. The increase in other expense during the year ended December 31, 2020 is primarily due to noncapitalizable transaction costs
from acquisitions no longer expected to be consummated.
During the year ended December 31, 2020, we completed three Outpatient Medical construction projects representing $43,493,000 or $306 per square
foot. The following is a summary of our consolidated Outpatient Medical construction projects pending as of December 31, 2020 (dollars in thousands):
Location
Brooklyn, NY
Kalamazoo, MI
Total
Square Feet
Commitment
Balance
140,955 $
40,607
181,562 $
105,306 $
14,267
119,573 $
104,148
2,654
106,802
Est. Completion
2Q21
3Q21
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 following is a summary of our Outpatient Medical secured debt principal activity for the
periods presented (dollars in thousands):
Beginning balance
Debt assumed
Debt extinguished
Principal payments
Ending balance
Monthly averages
Year Ended
December 31, 2020
Year Ended
December 31, 2019
Year Ended
December 31, 2018
Amount
572,267
—
(14,205)
(9,833)
548,229
562,017
$
$
$
Weighted Avg.
Interest Rate
3.97%
—%
5.34%
4.60%
3.55%
3.72%
Amount
386,738
202,084
(10,244)
(6,311)
572,267
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
238,214
$
$
$
Weighted Avg.
Interest Rate
4.72%
3.99%
7.43%
5.91%
4.20%
4.25%
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.
58
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) for the periods presented:
Year Ended
One Year Change
December 31,
2020
December 31,
2019
$
%
Year Ended
December 31,
2018
One Year Change
Two Year Change
$
%
$
%
Revenues:
Other income
Total revenues
Property operating expenses
(1)
NOI
Other expenses:
Interest expense
General and administrative expenses
Loss (gain) on extinguishments of debt, net
Other expenses
Total expenses
Loss from continuing operations before income taxes
and other items
Gain (loss) on real estate dispositions, net
Income tax benefit (expense)
Loss from continuing operations
Preferred stock dividends
$
2,781
$
3,966
$
2,781
3,381
(600)
432,431
128,394
33,344
24,929
619,098
(619,698)
—
(9,968)
(629,666)
—
3,966
—
3,966
461,273
126,549
82,541
10,705
681,068
(677,102)
—
(2,957)
(680,059)
—
Net loss attributable to common stockholders
$
(629,666)
$
(680,059)
$
(1)
See Non-GAAP Financial Measures below.
(1,185)
(1,185)
3,381
(4,566)
(28,842)
1,845
(49,197)
14,224
(61,970)
57,404
—
(7,011)
50,393
—
50,393
-30 % $
2,275
$
-30 %
n/a
-115 %
-6 %
1 %
-60 %
133 %
-9 %
8 %
n/a
-237 %
7 %
n/a
2,275
—
2,275
436,256
126,383
4,091
7,729
574,459
(572,184)
—
(8,674)
(580,858)
46,704
1,691
1,691
—
1,691
25,017
166
78,450
2,976
106,609
(104,918)
—
5,717
(99,201)
(46,704)
74 % $
74 %
n/a
74 %
6 %
0 %
1,918 %
39 %
19 %
-18 %
n/a
66 %
-17 %
-100 %
506
506
3,381
(2,875)
(3,825)
2,011
29,253
17,200
44,639
(47,514)
—
(1,294)
(48,808)
(46,704)
7 % $
(627,562)
$
(52,497)
-8 % $
(2,104)
22 %
22 %
n/a
-126 %
-1 %
2 %
715 %
223 %
8 %
-8 %
n/a
-15 %
-8 %
-100 %
0 %
Property operating expenses represent insurance costs related to our captive insurance company formed as of July 1, 2020, which acts as a direct insurer
of property level insurance coverage for our portfolio.
The following is a summary of our Non-Segment/Corporate interest expense for the periods presented (dollars in thousands):
Year Ended
One Year Change
December 31,
2020
December 31,
2019
Senior unsecured notes
Secured debt
Unsecured credit facility and commercial
paper program
Loan expense
Totals
$
$
400,014
—
15,313
17,104
432,431
$
$
402,133
—
43,861
15,279
461,273
$
$
$
(2,119)
—
(28,548)
1,825
(28,842)
%
-1 % $
n/a
-65 %
12 %
-6 % $
Year Ended
December 31,
2018
387,955
115
34,626
13,560
436,256
$
$
One Year Change
Two Year Change
$
14,178
(115)
9,235
1,719
25,017
%
4 % $
-100 %
$
12,059
(115)
27 %
13 %
6 % $
(19,313)
3,544
(3,825)
%
3 %
-100 %
-56 %
26 %
-1 %
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 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 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 during the year ended December 31, 2020 is due primarily to the early extinguishment of $160,872,000 of our
3.75% senior unsecured notes due March 2023 and $265,376,000 of our 3.95% senior unsecured notes due September 2023. 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.
General and administrative expenses as a percentage of consolidated revenues for the years ended December 31, 2020, 2019 and 2018 were 2.79%,
2.47% and 2.69%, respectively. Other expenses for all years include severance-related costs associated with the departure of certain executive officers and
key employees.
Income tax expense primarily relates to state taxes, foreign taxes and taxes based on income generated by entities that are structured as TRSs.
59
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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. We believe the drivers of property level NOI for both consolidated properties and unconsolidated
properties are generally the same and therefore, we evaluate SSNOI based on our ownership interest in each property ("Welltower Share"). To arrive at
Welltower's Share, NOI is adjusted by adding our minority ownership share related to unconsolidated properties and by subtracting the minority partners'
noncontrolling ownership interests for consolidated properties. We do not control investments in unconsolidated properties and while we consider
disclosures at Welltower Share to be useful, they may not accurately depict the legal and economic implications of our joint venture arrangements and
should be used with caution. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-
over-year reporting periods. Acquisitions and development conversions are included in SSNOI five full quarters or eight full quarters after acquisition or
being placed into service for the QTD Pool and the YTD Pool, respectively. Land parcels, loans and sub-leases, as well as any properties sold or classified
as held for sale during the respective periods are excluded from SSNOI. Redeveloped properties (including major refurbishments of a Seniors Housing
Operating property where 20% or more of units are simultaneously taken out of commission for 30 days or more or Outpatient Medical properties
undergoing a change in intended use) are excluded from SSNOI until five full quarters or eight full quarters post completion of the redevelopment for the
QTD Pool and YTD Pool, respectively. Properties undergoing operator transitions and/or segment transitions are also excluded from SSNOI until five full
quarters or eight full quarters post completion of the transition for the QTD Pool and YTD Pool, respectively. In addition, properties significantly impacted
by force majeure, acts of God, or other extraordinary adverse events are excluded from SSNOI until five full quarters or eight full quarters after the
properties are placed back into service for the QTD Pool and YTD Pool, respectively. SSNOI excludes non-cash NOI and includes adjustments to present
consistent ownership percentages and to translate Canadian properties and U.K. properties using a consistent exchange rate. 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.
EBITDA is defined as earnings (net income) before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding
unconsolidated entities and including adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt,
gains/loss/impairments on properties, gains/losses on derivatives and financial instruments, other expense, additional other income and other impairment
charges. We believe that EBITDA and Adjusted EBITDA, along with net income, are important supplemental measures because they provide additional
information to assess and evaluate the performance of our operations. We primarily use these measures to determine our interest coverage ratio, which
represents EBITDA and Adjusted EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA and Adjusted
EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization, and preferred dividends. Covenants in our
unsecured senior notes and primary credit facility contain financial ratios based on a definition of EBITDA and Adjusted EBITDA that is specific to those
agreements. Our leverage ratios are defined as the proportion of net debt to total capitalization and include book capitalization, undepreciated book
capitalization and market capitalization. Book capitalization represents the sum of net debt (defined as total long-term debt, excluding operating lease
liabilities, 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
60
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
depreciation and amortization. Market capitalization represents book capitalization adjusted for the fair market value of our common stock.
Our 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. 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.
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/losses 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:
Net income attributable to common stockholders
Funds from operations attributable to common stockholders
(1)
(1)
Includes adjustment to the numerator for income (loss) attributable to OP unitholders.
2020
Year Ended December 31,
2019
2018
$
$
$
$
978,844 $
1,038,437
135,608
(1,088,455)
(23,968)
62,096
1,102,562 $
417,387
2.33 $
2.64 $
1,232,432 $
1,027,073
28,133
(748,041)
(20,197)
57,680
1,577,080 $
403,808
3.05 $
3.91 $
758,250
950,459
115,579
(415,575)
(69,193)
52,663
1,392,183
375,250
2.02
3.71
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.
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
Consolidated net operating income (NOI)
NOI by segment:
Seniors Housing Operating
Triple-net
Outpatient Medical
Non-segment/corporate
Total NOI
2020
Year Ended December 31,
2019
2018
1,038,852 $
(1,088,455)
8,083
9,968
70,335
135,608
94,436
47,049
11,049
128,394
1,038,437
514,388
2,008,144 $
755,552 $
748,121
505,071
(600)
2,008,144 $
$
$
$
$
61
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
2,431,264 $
1,039,520 $
918,743
469,035
3,966
2,431,264 $
829,750
(415,575)
641
8,674
112,898
115,579
—
16,097
(4,016)
126,383
950,459
526,592
2,267,482
985,022
900,049
380,136
2,275
2,267,482
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quarterly NOI by Segment:
(in thousands)
Seniors Housing Operating:
Total revenues
Property operating expenses
NOI
Triple-net:
Total revenues
Property operating expenses
NOI
Outpatient Medical:
Total revenues
Property operating expenses
NOI
Corporate:
Total revenues
Property operating expenses
NOI
March 31,
June 30,
September 30,
December 31,
Three Months Ended
Year Ended
December 31,
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
$
$
$
$
$
$
$
$
851,128
607,871
243,257
207,729
13,302
194,427
199,329
60,608
138,721
416
—
416
$
$
$
$
$
$
$
$
872,386
607,686
264,700
248,241
14,955
233,286
149,461
48,166
101,295
2,157
—
2,157
$
$
$
$
$
$
$
$
773,650
595,513
178,137
233,619
13,563
220,056
180,831
51,688
129,143
375
—
375
$
$
$
$
$
$
$
$
915,529
637,317
278,212
240,758
12,823
227,935
163,365
50,987
112,378
454
—
454
$
$
$
$
$
$
$
$
742,065
567,704
174,361
120,928
12,567
108,361
172,704
52,728
119,976
1,177
1,718
(541)
$
$
$
$
$
$
$
$
835,496
581,341
254,155
244,607
13,922
230,685
185,189
60,325
124,864
841
—
841
$
$
$
$
$
$
$
$
715,020
555,223
159,797
239,028
13,751
225,277
167,155
49,924
117,231
813
1,663
(850)
$
$
$
$
$
$
$
$
833,458 $
591,005
242,453 $
3,081,863 $
2,326,311
755,552 $
3,456,869
2,417,349
1,039,520
239,037 $
12,200
226,837 $
801,304 $
53,183
748,121 $
972,643
53,900
918,743
189,813 $
59,315
130,498 $
720,019 $
214,948
505,071 $
687,828
218,793
469,035
514 $
—
514 $
2,781 $
3,381
(600) $
3,966
—
3,966
The following is a reconciliation of the properties included in our QTD Pool and YTD Pool for SSNOI:
SSNOI Property Reconciliations:
Seniors Housing
Operating
Triple-net
Outpatient
Medical
Total
Seniors Housing
Operating
Triple-net
Outpatient
Medical
Total
QTD Pool
YTD Pool
Consolidated properties
Unconsolidated properties
Total properties
Recent acquisitions/development
(1)
conversions
Under development
Under redevelopment
Current held for sale
Loans, land parcels and subleases
Transitions
(4)
Other
(2)
(3)
Same store properties
556
90
646
(46)
(27)
(10)
(10)
(11)
(27)
(1)
514
641
39
680
(18)
(4)
(1)
(1)
(18)
(6)
—
632
296
72
368
(51)
(2)
(2)
(2)
(8)
—
—
303
1,493
201
1,694
(115)
(33)
(13)
(13)
(37)
(33)
(1)
1,449
556
90
646
(93)
(27)
(11)
(10)
(11)
(93)
(2)
399
641
39
680
(24)
(4)
(1)
(1)
(18)
(24)
—
608
296
72
368
(123)
(2)
(2)
(2)
(8)
—
—
231
1,493
201
1,694
(240)
(33)
(14)
(13)
(37)
(117)
(2)
1,238
(1)
(2)
(3)
(4)
Acquisitions and development conversions will enter the QTD Pool and YTD Pool five full quarters and eight full quarters after acquisition or certificate of occupancy, respectively.
Redevelopment properties will enter the QTD Pool and YTD Pool after five full quarters and eight full quarters of operations post redevelopment completion, respectively.
Transitioned properties will enter the QTD Pool and YTD Pool after five full quarters and eight full quarters of operations with the new operator in place or under the new structure, respectively.
Includes one closed property in the QTD pool and one closed property and one flooded property in the YTD pool.
62
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.
SSNOI Reconciliations:
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
QTD Pool
Three Months Ended
YTD Pool
Twelve Months Ended
Seniors Housing Operating:
Consolidated NOI
NOI attributable to unconsolidated investments
NOI attributable to noncontrolling interests
Non-cash NOI attributable to same store properties
NOI attributable to non-same store properties
Currency and ownership adjustments
(1)
SSNOI at Welltower Share
Triple-net:
Consolidated NOI
NOI attributable to unconsolidated investments
NOI attributable to noncontrolling interests
Non-cash NOI attributable to same store properties
NOI attributable to non-same store properties
Currency and ownership adjustments
(1)
SSNOI at Welltower Share
Outpatient Medical:
Consolidated NOI
NOI attributable to unconsolidated investments
NOI attributable to noncontrolling interests
Non-cash NOI attributable to same store properties
NOI attributable to non-same store properties
Currency and ownership adjustments
(1)
SSNOI at Welltower Share
SSNOI at Welltower Share:
Seniors Housing Operating
Triple-net
Outpatient Medical
Total
$
$
$
159,797
13,182
(9,405)
(349)
(8,291)
(561)
154,373
225,277
4,818
(14,563)
(12,313)
(34,236)
(286)
168,697
117,231
3,481
(4,264)
(1,542)
(24,050)
(5,871)
84,985
$
$
242,453
16,491
(19,436)
(842)
(23,254)
754
216,166
226,837
5,133
(14,751)
(15,224)
(32,080)
137
170,052
130,498
541
(6,853)
(2,915)
(19,674)
(17,453)
84,144
$
$
755,552
53,736
(51,334)
(3,239)
(166,567)
2,985
591,133
748,121
13,797
(58,288)
80,630
(155,566)
278
628,972
505,071
9,629
(16,565)
(1,094)
(204,525)
(40,004)
252,512
154,373
168,697
84,985
408,055
$
216,166
170,052
84,144
470,362
$
591,133
628,972
252,512
1,472,617
$
1,039,520
65,387
(81,426)
(4,295)
(261,002)
6,144
764,328
918,743
20,532
(58,462)
(58,846)
(197,487)
397
624,877
469,035
1,930
(27,637)
(2,807)
(129,723)
(64,009)
246,789
764,328
624,877
246,789
1,635,994
63
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.
Adjusted EBITDA Reconciliation:
Net income (loss)
Interest expense
Income tax expense (benefit)
Depreciation and amortization
EBITDA
(1)
Loss (income) from unconsolidated entities
Stock-based compensation expense
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
Other impairment
Additional other income
(1)
Adjusted EBITDA
Adjusted Interest Coverage Ratio:
Interest expense
Capitalized interest
Non-cash interest expense
Total interest
Adjusted EBITDA
Adjusted interest coverage ratio
Adjusted Fixed Charge Coverage Ratio:
Total interest
Secured debt principal payments
Preferred dividends
Total fixed charges
Adjusted EBITDA
Adjusted fixed charge coverage ratio
2020
Year Ended December 31,
2019
2018
$
$
$
$
$
$
1,038,852 $
514,388
9,968
1,038,437
2,601,645
8,083
28,318
47,049
(1,088,455)
135,608
94,436
11,049
64,171
146,508
—
2,048,412 $
514,388 $
17,472
(15,751)
516,109
2,048,412 $
3.97x
516,109 $
62,707
—
578,816
2,048,412 $
3.54x
1,330,410 $
555,559
2,957
1,027,073
2,915,999
(42,434)
25,047
84,155
(748,041)
28,133
18,690
(4,399)
51,052
—
—
2,328,202 $
555,559 $
15,272
(8,645)
562,186
2,328,202 $
4.14x
562,186 $
54,325
—
616,511
2,328,202 $
3.78x
829,750
526,592
8,674
950,459
2,315,475
641
27,646
16,097
(415,575)
115,579
—
(4,016)
111,990
—
(14,832)
2,153,005
526,592
7,905
(10,860)
523,637
2,153,005
4.11x
523,637
56,288
46,704
626,629
2,153,005
3.44x
(1)
Certain severance-related costs are included in stock-based compensation and excluded from other expenses.
64
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 reconciliation of our leverage ratios to our balance sheets for the periods presented. Amounts are in thousands,
except share price.
Book capitalization:
Unsecured credit facility and commercial paper
Long-term debt obligations
(2)
Cash and cash equivalents
Total net debt
Total equity and noncontrolling interests
Book capitalization
(3)
(1)
Net debt to book capitalization ratio
Undepreciated book capitalization:
Total net debt
Accumulated depreciation and amortization
Total equity and noncontrolling interests
Undepreciated book capitalization
(3)
Net debt to undepreciated book capitalization ratio
Market capitalization:
Common shares outstanding
Period end share price
Common equity market capitalization
Total net debt
Noncontrolling interests
Preferred stock
Market capitalization:
(3)
Net debt to market capitalization ratio
2020
Year Ended December 31,
2019
2018
$
$
$
$
$
$
$
—
13,905,822
(1,968,765)
11,937,057
17,225,062
29,162,119
40.9 %
11,937,057
6,104,297
17,225,062
35,266,416
33.8 %
417,401
64.62
26,972,453
11,937,057
1,252,343
—
40,161,853
$
$
$
$
$
$
$
1,587,597
13,436,365
(284,917)
14,739,045
16,982,504
31,721,549
46.5 %
14,739,045
5,715,459
16,982,504
37,437,008
39.4 %
410,257
81.78
33,550,817
14,739,045
1,442,060
—
49,731,922
$
$
$
$
$
$
$
1,147,000
12,150,144
(215,376)
13,081,768
16,010,645
29,092,413
45.0 %
13,081,768
5,499,958
16,010,645
34,592,371
37.8 %
383,675
69.41
26,630,882
13,081,768
1,378,311
718,498
41,809,459
29.7 %
29.6 %
31.3 %
(1)
Amounts include senior unsecured notes, secured debt and lease liabilities related to financing leases, as reflected on our Consolidated Balance Sheets. Operating lease liabilities related to the
ASC 842 adoption are excluded.
(2)
Inclusive of IRC Section 1031 deposits, if any.
(3)
Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests as reflected on our Consolidated Balance Sheets.
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 an accounting estimate or assumption 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.
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:
65
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Nature of Critical
Accounting Estimate
Impairment of Real Property
Assumptions/Approach
Used
impairment of
involves subjectivity
Assessing
in
real property
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.
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.
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
relationship values based on
management's evaluation of the specific characteristics of each tenant's
lease and our overall relationship with respect to that tenant.
lease values and customer
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 of these components affect the amount of depreciation and amortization
we record over the estimated useful life of the property or the term of the lease.
Principles of Consolidation
The consolidated financial statements include our accounts, the 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.
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 interest, or (ii) 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.
66
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Nature of Critical
Accounting Estimate
Allowance for Credit Losses on Loans Receivable
The allowance for credit losses is maintained at a level believed adequate
to absorb potential losses in our loans receivable. The determination of the
credit allowance is based on a quarterly evaluation of all outstanding
loans, including general economic conditions and estimated collectability
of loan payments.
Assumptions/Approach
Used
The determination of the allowance for credit losses 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, payment status, historical loan charge-offs, financial strength of the
borrower and guarantors, and nature, extent and value of the underlying
collateral. A loan is considered to have deteriorated credit quality 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
loan agreement. For those loans we identified as having deteriorated credit
quality, we determine the amount of credit loss on an individual basis.
Placement on non-accrual status may be required. Consistent with this
definition, all loans on non-accrual are deemed to have deteriorated credit
quality. To the extent circumstances improve and the risk of collectability is
diminished, we may 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. For the remaining loans, we assess credit loss on a collective
pool basis and use our historical loss experience for similar loans to determine
the reserve for credit losses.
67
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 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):
Senior unsecured notes
Secured debt
Totals
December 31, 2020
December 31, 2019
Principal balance
Change in fair value
Principal balance
Change in fair value
$
$
9,943,501 $
1,702,196
11,645,697 $
(761,581) $
(57,756)
(819,337) $
9,724,691 $
1,814,229
11,538,920 $
(751,848)
(69,756)
(821,604)
Our variable rate debt, including our unsecured revolving credit facility and commercial paper program, is reflected at fair value. At December 31, 2020,
we had $2,241,909,000 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 $22,420,000. At December 31, 2019, we had $3,470,584,000 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 $34,706,000.
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, 2020, 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 $3,000,000. 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):
Foreign currency exchange contracts
Debt designated as hedges
Totals
$
$
61,851 $
1,630,542
1,692,393 $
12,731 $
16,305
29,036 $
26,767 $
1,586,116
1,612,883 $
12,136
15,861
27,997
December 31, 2020
December 31, 2019
Carrying value
Change in fair value
Carrying value
Change in fair value
68
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, 2020 and 2019,
the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2020, 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, 2020 and
2019 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, 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, 2020, 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 10, 2021 expressed an unqualified
opinion thereon.
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.
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.
Impairment of Real Property
Description of the Matter At December 31, 2020, the Company’s net real property owned was approximately $27.6 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, including future rental revenues and operating expenses, capitalization rates, and anticipated hold period,
which are affected by expectations about future market or economic conditions.
How We Addressed the
Matter in Our Audit
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
69
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.
Real Estate Acquisitions
Description of the Matter During 2020, the Company completed approximately $904 million 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.
How We Addressed the
Matter in Our Audit
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 10, 2021
/s/ Ernst & Young LLP
70
CONSOLIDATED BALANCE SHEETS
WELLTOWER INC. AND SUBSIDIARIES
(in thousands)
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
Gross real property owned
Less accumulated depreciation and amortization
Net real property owned
Right of use assets, net
Real estate loans receivable, net of credit allowance
Net real estate investments
Other assets:
Investments in unconsolidated entities
Goodwill
Cash and cash equivalents
Restricted cash
Straight-line rent receivable
Receivables and other assets
Total other assets
Total assets
Liabilities and equity
Liabilities:
Unsecured credit facility and commercial paper
Senior unsecured notes
Secured debt
Lease liabilities
Accrued expenses and other liabilities
Total liabilities
Redeemable noncontrolling interests
Equity:
Common stock
Capital in excess of par value
Treasury stock
Cumulative net income
Cumulative dividends
Accumulated other comprehensive income (loss)
Total Welltower Inc. stockholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
See accompanying notes
71
December 31, 2020
December 31, 2019
$
$
$
$
3,440,650 $
28,024,971
1,500,030
216,613
487,742
33,670,006
(6,104,297)
27,565,709
465,866
443,372
28,474,947
946,234
68,321
1,545,046
475,997
344,066
629,031
4,008,695
32,483,642 $
— $
11,420,790
2,377,930
418,266
1,041,594
15,258,580
343,490
418,691
20,823,145
(104,490)
8,327,598
(13,343,721)
(148,504)
15,972,719
908,853
16,881,572
32,483,642 $
3,486,620
29,163,305
1,617,051
1,253,008
507,931
36,027,915
(5,715,459)
30,312,456
536,433
270,382
31,119,271
583,423
68,321
284,917
100,849
466,222
757,748
2,261,480
33,380,751
1,587,597
10,336,513
2,990,962
473,693
1,009,482
16,398,247
475,877
411,005
20,190,119
(78,955)
7,353,966
(12,223,534)
(112,157)
15,540,444
966,183
16,506,627
33,380,751
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
WELLTOWER INC. AND SUBSIDIARIES
(In thousands, except per share data)
Revenues:
Resident fees and services
Rental income
Interest income
Other income
Total revenues
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
Total expenses
Income (loss) 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
Income (loss) from continuing operations
Net income
Less: Preferred stock dividends
Less: Net income (loss) attributable to noncontrolling interests
(1)
Net income (loss) attributable to common stockholders
Average number of common shares outstanding:
Basic
Diluted
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
(2)
(1)
Includes amounts attributable to redeemable noncontrolling interests
(2)
Includes adjustment to the numerator for income (loss) attributable to OP unitholders.
2020
Year Ended December 31,
2019
2018
$
$
$
$
$
$
3,074,022 $
1,443,360
69,156
19,429
4,605,967
3,448,175 $
1,588,400
63,830
20,901
5,121,306
2,597,823
1,038,437
514,388
128,394
11,049
47,049
94,436
135,608
70,335
4,637,519
(31,552)
(9,968)
(8,083)
1,088,455
1,038,852
2,690,042
1,027,073
555,559
126,549
(4,399)
84,155
18,690
28,133
52,612
4,578,414
542,892
(2,957)
42,434
748,041
1,330,410
1,038,852
—
60,008
978,844 $
1,330,410
—
97,978
1,232,432 $
415,451
417,387
401,845
403,808
2.50 $
2.36 $
2.49 $
2.33 $
3.31 $
3.07 $
3.29 $
3.05 $
3,234,852
1,380,422
55,814
29,411
4,700,499
2,433,017
950,459
526,592
126,383
(4,016)
16,097
—
115,579
112,898
4,277,009
423,490
(8,674)
(641)
415,575
829,750
829,750
46,704
24,796
758,250
373,620
375,250
2.22
2.03
2.21
2.02
See accompanying notes
72
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
Net income
Other comprehensive income (loss):
Unrecognized actuarial gain (loss)
Foreign currency translation gain (loss)
Derivative and financial instruments designated as hedges gain (loss)
Total other comprehensive income (loss)
Total comprehensive income (loss)
Less: Total comprehensive income (loss) attributable to
noncontrolling interests
(1)
Total comprehensive income (loss) attributable to common stockholders
(1)
Includes amounts attributable to redeemable noncontrolling interests.
2020
Year Ended December 31,
2019
2018
$
1,038,852 $
1,330,410 $
829,750
—
103,612
(134,369)
(30,757)
1,008,095
540
161,915
(131,120)
31,335
1,361,745
$
65,598
942,497 $
111,701
1,250,044 $
344
(253,022)
211,390
(41,288)
788,462
1,812
786,650
See accompanying notes
73
CONSOLIDATED STATEMENTS OF EQUITY
WELLTOWER INC. AND SUBSIDIARIES
(in thousands)
Balances at December 31, 2017
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
Conversion of preferred stock
Dividends paid:
Common stock dividends
Preferred stock dividends
Balances at December 31, 2018
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
Conversion of preferred stock
Dividends paid:
Common stock dividends
Balances at December 31, 2019
Cumulative change in accounting principle (Note
2)
Balances at January 1, 2020 (as adjusted for
change in accounting principle)
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
Repurchase of common stock
Dividends paid:
Common stock dividends
Balances at December 31, 2020
Preferred
Stock
Common
Stock
Capital in
Excess of Par
Value
$ 718,503 $ 372,449 $ 17,663,351 $
Treasury
Stock
(64,559) $ 5,316,580 $ (9,471,712) $
Cumulative
Net Income
Cumulative
Dividends
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interests
Total
(111,465) $
502,305 $ 14,925,452
804,954
(18,304)
25,065
(22,984)
449,879
188
11,828
(5)
(43,101)
27,901
776,506
5
(3,940)
718,498
384,465
18,424,662
(68,499)
6,121,534
1,232,432
3,583
162
13,666
12,712
25,163
1,030,925
705,786
(10,456)
(718,498)
(1,300,141)
(46,704)
(10,818,557)
(129,769)
954,265
17,612
67,365
13,440
(68,887)
—
411,005
20,190,119
(78,955)
7,353,966
(1,404,977)
(12,223,534)
(112,157)
966,183
(5,212)
830,019
(41,288)
788,731
406,778
24,149
788,334
—
(1,300,141)
(46,704)
15,586,599
1,299,797
31,052
1,330,849
(65,304)
14,869
1,044,591
—
(1,404,977)
16,506,627
(5,212)
—
411,005
20,190,119
(78,955)
7,348,754
(12,223,534)
(112,157)
966,183
16,501,415
978,844
(36,347)
98,910
5,493
(161,733)
1,077,754
(30,854)
1,046,900
(143,575)
18,158
622
7,064
27,666
587,202
(17,879)
(7,656)
10,409
594,266
(7,656)
(1,120,187)
908,853 $ 16,881,572
$
— $ 418,691 $ 20,823,145 $ (104,490) $ 8,327,598 $ (13,343,721) $
(148,504) $
(1,120,187)
See accompanying notes
74
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 less than ( 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
Repurchase of common stock
Payments for deferred financing costs and prepayment penalties
Contributions by noncontrolling interests
(1)
Distributions to noncontrolling interests
Cash distributions to stockholders
Other financing activities
(1)
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.
2020
Year Ended December 31,
2019
2018
$
1,038,852
$
1,330,410
$
829,750
1,038,437
13,213
94,436
135,608
28,318
11,049
47,049
8,083
60,254
(1,870)
(1,088,455)
11,601
22,764
(54,583)
1,364,756
(903,756)
(244,989)
(201,336)
(17,472)
(247,543)
31,548
7,726
(411,154)
48,195
(13,319)
4,300,028
2,347,928
(1,587,597)
1,588,549
(566,248)
62,055
(694,995)
595,313
(7,656)
(39,087)
44,023
(333,489)
(1,119,232)
(22,494)
(2,080,858)
3,451
1,635,277
385,766
2,021,043
508,454
13,671
$
$
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)
1,535,968
(3,959,683)
(328,824)
(323,488)
(15,272)
(119,699)
127,706
(8,282)
(279,631)
216,231
(8,499)
2,650,650
(2,048,791)
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)
577,150
5,310
69,637
316,129
385,766
574,536
14,338
$
$
950,459
17,000
—
115,579
27,646
(4,016)
16,097
641
(32,857)
2,608
(415,575)
21
70,762
5,829
1,583,944
(3,560,360)
(266,183)
(160,706)
(7,905)
(112,048)
203,935
(44,535)
(136,854)
90,916
65,399
1,541,870
(2,386,471)
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)
818,368
(9,015)
6,826
309,303
316,129
501,404
2,250
$
$
See accompanying notes.
75
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 and 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 is recognized
monthly as services are provided. Agreements with residents generally have a term of one year and are cancellable 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.
76
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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 two years. In accordance with ASC
810, the redeemable noncontrolling interests are classified outside of permanent equity, as a mezzanine item, on the balance sheet. At December 31, 2020,
the current redemption value of redeemable noncontrolling interests exceeded the carrying value of $343,490,000 by $15,696,000.
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 on the balance sheet and are amortized to rental income over the remaining terms of the respective leases or lease-up period.
The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values for in-place tenants
based on management’s evaluation of the specific 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.
77
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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 lesser 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 credit 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 Credit Losses on Loans Receivable
The allowance for credit losses on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable. The
determination of the credit 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 credit quality indicators, including, but not
limited to, payment status, historical loan charge-offs, financial strength of the borrower and guarantors, and nature, extent, and value of the underlying
collateral. A loan is considered to have deteriorated credit quality 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 loan agreement. For those loans we identified as having deteriorated credit
quality we determine the amount of credit loss on an individual basis. Placement on non-accrual status may be required. Consistent with this definition, all
loans on non-accrual status are deemed to have deteriorated credit quality. To the extent circumstances improve and the risk of collectability is diminished,
we may 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. For the remaining loans we assess credit loss on a collective pool basis and use our historical loss experience for similar loans to determine the
reserve for credit losses.
78
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 estimates that may change in the future. See Note
12 for additional information.
Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following (in thousands):
Accounts payable
Accrued interest
Other accrued expenses
Unearned revenues
Taxes payable
Other liabilities
Total
Federal Income Tax
Year Ended December 31,
2020
2019
$
$
101,592 $
112,202
41,471
115,411
99,916
571,002
1,041,594 $
58,646
104,548
71,860
183,011
97,094
494,323
1,009,482
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.
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. Additionally, net income (loss) allocated to OP units (discussed above) has been included in the numerator and
redeemable common stock related to the OP units have been included in the denominator for the purpose of computing diluted earnings per share.
79
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reclassifications
Certain amounts in prior years have been reclassified to conform to current year presentation.
Impact of COVID-19 Pandemic
The extent to which the COVID-19 pandemic impacts our operations and those of our operators and tenants will depend on future developments, which
are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the
pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. The COVID-19
pandemic could have material and adverse effects on our financial condition, results of operations and cash flows in the future, including but not limited to,
the following:
• Our Seniors Housing Operating revenues are dependent on occupancy. Declines in occupancy are expected due to heightened move-in criteria and
screening, as well as increased mortality rates among seniors. Occupancy within our total Seniors Housing Operating portfolio has declined as
follows (unaudited):
(1)
Spot occupancy
Sequential
occupancy change
Feb.
85.6 %
Mar.
84.9 %
Apr.
82.6 %
May
80.9 %
Jun.
79.9 %
Jul.
79.3 %
Aug.
78.7 %
Sep.
78.4 %
Oct.
78.0 %
Nov.
77.3 %
Dec.
76.2 %
(0.7)%
(2.3)%
(1.7)%
(1.0)%
(0.6)%
(0.6)%
(0.3)%
(0.4)%
(0.7)%
(1.1)%
Spot occupancy represents approximate month end occupancy for properties in operation as of February 29, 2020, including unconsolidated properties but excluding acquisitions,
(1)
dispositions and development conversions since this date.
•
•
Increased Seniors Housing Operating expenses are expected to continue until the pandemic subsides. We experienced incremental operational
costs, net of reimbursements, of $78,792,000 related to consolidated properties for the year ended December 31, 2020, included in property
operating expenses. These expenses were incurred as a result of the introduction of public health measures and other regulations affecting our
properties, as well as additional health and safety measures adopted by us and our operators related to the COVID-19 pandemic, including
increases in labor and property cleaning expenses and expenditures related to our efforts to procure personal protective equipment ("PPE") and
supplies, net of reimbursements. Certain new expenses incurred since the start of the pandemic may continue on an ongoing basis as part of new
health and safety protocols.
In 2020 applications were made for amounts under Phase 2 and Phase 3 of the Provider Relief Fund related to our Seniors Housing Operating
portfolio following the announcement from the Department of Health and Human Services that it expanded the eligibility of the Coronavirus Aid
Relief, and Economic Security Act (“CARES Act”) Provider Relief Fund to include assisted living facilities. During the fourth quarter, we
received Provider Relief Funds of approximately $9 million which was recognized as a reduction to property operating expenses. To date in 2021,
we have received approximately $34 million of Provider Relief Funds.
• Our Triple-net operators are experiencing similar occupancy declines and expense increases, however, long-term/post-acute care facilities are
generally experiencing a higher degree of occupancy declines. These factors may impact our Triple-net operators' ability to pay rent and
contractual obligations. Many of our Triple-net operators have received funds under the CARES Act Paycheck Protection Program. In addition,
operators of long-term/post-acute care facilities have generally received funds from Phase 1 of the Provider Relief Fund and operators of assisted
living facilities are receiving funds from Phase 2 of the Provider Relief Fund. Accordingly, collection of Triple-net rent due during the COVID-19
pandemic to date (from March to December) has generally been consistent with historical collection rates and no significant rent concessions or
deferrals have been made.
• Outpatient Medical rent collections through March were generally consistent with pre COVID-19 levels. During the second quarter we executed
short term rent deferrals with certain Outpatient Medical tenants which in most cases were required to be repaid by year end. Since then we have
collected approximately 99% of Outpatient Medical rent due in the second half of the year, with uncollected amounts primarily attributable to
local jurisdictions with COVID-19 related ordinances providing temporary rent relief to tenants. Furthermore, collections of deferred rent due
under executed deferrals was over 99%. To the extent that deferred rent is not repaid as expected, or the prolonged impact of the COVID-19
pandemic causes operators or tenants to seek further modifications of their lease agreements, we may recognize reductions in revenue and
increases in uncollectible receivables.
• Assessing properties for potential impairment involves subjectivity in determining if impairment indicators are present and in estimating the future
undiscounted cash flows or estimated fair value of the asset. Key assumptions are made in these assessments including the estimation of future
rental revenues, occupancy, operating expenses, capitalization rates and the ability and intent to hold the respective asset. All of these assumptions
are significantly affected by our expectations of future market or economic conditions and can be highly impacted by the uncertainty of the
COVID-19 pandemic. We will continue to evaluate the assumptions used in these analyses, changes to which may result in impairments in future
periods.
80
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
•
The determination of the allowance for credit losses is based on our evaluation of collectability of our loans receivable and includes review of
factors such as delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and the value of the underlying
collateral. Reduced economic activity severely impacts our borrowers' businesses, financial conditions and liquidity and may hinder their ability to
make contractual payments to us, leading to an increase in loans deemed to have deteriorated credit which could result in an increase in the
provision for loan losses.
New Accounting Standards
• On January 1, 2020, we adopted ASU 2016-13, “Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). This standard
requires a new forward-looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, 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 losses standard. ASU 2016-13 primarily impacts our measurement for credit losses related to our real estate and non-real
estate loans receivable. In conjunction with our adoption of ASU 2016-13, we recorded a $5,212,000 increase to our allowance for credit losses on
loans receivable (both real estate and non-real estate) with a corresponding adjustment to cumulative net income related to the change in
accounting principle. See Note 7 for further details.
• At the FASB's April 8, 2020 Board meeting, the staff acknowledged that the economics of lease concessions that result from a global pandemic
may not be aligned with the underlying premise of the modification framework in ASC 842, under which the concession would be recognized
over the remainder of the lease term. In a Q&A document, the FASB provided entities with COVID-19 related lease concessions an option to
either (1) apply the modification framework for these concessions in accordance with ASC 842 as applicable or (2) account for concessions as if
they were made under the enforceable rights included in the original agreement as long as total cash flows resulting from the modified contract are
substantially the same or less than cash flows in the original contract. Due to the continuing adverse economic conditions caused by the COVID-
19 pandemic, certain tenants and operators have requested rent relief, most often in the form of a short-term rent deferral. Not all requests result in
modification of agreements, nor do we intend to forgo our contractual rights under our lease agreements. We evaluate each rent relief request on
an individual basis. To date, the majority of rent deferral agreements resulted in two months of full or partial rent relief to be repaid by the end of
the year unless local ordinances mandate otherwise. We have elected to apply the accounting relief provided by the FASB to such short-term rent
deferrals, and will account for such deferrals as if no change had been made to the original lease contract.
•
In August 2020, the FASB issued ASU 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-
Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”. This ASU
simplifies accounting for convertible instruments and removes certain settlement conditions that are required for equity contracts to qualify for the
derivative scope exception. This ASU also simplifies the diluted earnings per share calculation in certain areas and provides updated disclosure
requirements. We are currently evaluating the guidance and the impact it may have on our consolidated financial statements.
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 purchase price and all other non-capitalizable costs are reflected in other expenses on our Consolidated
Statements of Comprehensive Income.
81
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of our real property investment activity by segment for the periods presented (in thousands):
Land and land improvements
Buildings and improvements
Acquired lease intangibles
Total net real estate assets
Receivables and other assets
Total assets acquired
(1)
Accrued expenses and other liabilities
Total liabilities assumed
Noncontrolling interests
(2)
Cash disbursed for acquisitions
Construction in progress additions
Less: Capitalized interest
Accruals
(3)
Cash disbursed for construction in progress
Capital improvements to existing properties
Total cash invested in real property, net of cash acquired
Year Ended December 31, 2020
Seniors Housing
Operating
Triple-net
Outpatient Medical
Total
$
$
55,000 $
527,189
28,668
610,857
746
611,603
(1,650)
(1,650)
(45,546)
564,407
134,945
(10,389)
(1,226)
123,330
107,379
795,116 $
16,876 $
73,855
—
90,731
—
90,731
—
—
—
90,731
45,256
(3,209)
—
42,047
76,625
209,403 $
45,590 $
179,004
24,718
249,312
268
249,580
(962)
(962)
—
248,618
39,833
(3,874)
—
35,959
60,985
345,562 $
117,466
780,048
53,386
950,900
1,014
951,914
(2,612)
(2,612)
(45,546)
903,756
220,034
(17,472)
(1,226)
201,336
244,989
1,350,081
(1)
(2)
(3)
Excludes $580,000 of unrestricted and restricted cash acquired.
Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
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.
$
Land and land improvements
Buildings and improvements
Acquired lease intangibles
Real property held for sale
Construction in progress
Right of use assets, net
Total net real estate assets
Receivables and other assets
Total assets acquired
(1)
Secured debt
Lease liabilities
Accrued expenses and other liabilities
Total liabilities assumed
Noncontrolling interests
Non-cash acquisition related activity
Cash disbursed for acquisitions
(2)
(3)
Construction in progress additions
Less: Capitalized interest
Accruals
(4)
Cash disbursed for construction in progress
Capital improvements to existing properties
Total cash invested in real property, net of cash acquired
$
Year Ended December 31, 2019
Seniors Housing
Operating
Triple-net
Outpatient Medical
Total
154,470 $
1,518,748
76,009
17,435
36,174
—
1,802,836
15,634
1,818,470
(194,408)
—
(12,024)
(206,432)
(67,987)
(11,889)
1,532,162
227,018
(8,889)
—
218,129
260,413
2,010,704 $
24,097 $
203,282
—
—
—
—
227,379
—
227,379
—
—
—
—
(4,015)
—
223,364
61,414
(2,385)
—
59,029
17,426
299,819 $
293,933 $
1,954,928
183,921
—
—
58,377
2,491,159
1,586
2,492,745
(206,754)
(47,740)
(32,893)
(287,387)
(1,201)
—
2,204,157
60,884
(3,998)
(1,035)
55,851
50,985
2,310,993 $
472,500
3,676,958
259,930
17,435
36,174
58,377
4,521,374
17,220
4,538,594
(401,162)
(47,740)
(44,917)
(493,819)
(73,203)
(11,889)
3,959,683
349,316
(15,272)
(1,035)
333,009
328,824
4,621,516
(1)
(2)
(3)
(4)
Excludes $2,090,000 of unrestricted and restricted cash acquired.
Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
Relates to the acquisition of assets previously recognized as investments in unconsolidated entities.
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.
82
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Land and land improvements
Buildings and improvements
Acquired lease intangibles
Real property held for sale
Total net real estate assets
Receivables and other assets
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
Less: Capitalized interest
Accruals
(3)
Cash disbursed for construction in progress
Capital improvements to existing properties
Total cash invested in real property, net of cash acquired
Year Ended December 31, 2018
Seniors Housing
Operating
Triple-net
Outpatient Medical
Total
$
$
51,440 $
621,731
69,504
—
742,675
1,492
744,167
(134,752)
(18,463)
(153,215)
(14,390)
576,562
82,621
(3,190)
—
79,431
201,001
856,994 $
413,588 $
2,242,884
9,690
396,265
3,062,427
1,354
3,063,781
—
(13,199)
(13,199)
(512,741)
2,537,841
55,558
(2,238)
—
53,320
10,046
2,601,207 $
77,239 $
478,740
50,813
22,032
628,824
1,185
630,009
(169,156)
(14,896)
(184,052)
—
445,957
26,565
(2,477)
(339)
23,749
55,136
524,842 $
542,267
3,343,355
130,007
418,297
4,433,926
4,031
4,437,957
(303,908)
(46,558)
(350,466)
(527,131)
3,560,360
164,744
(7,905)
(339)
156,500
266,183
3,983,043
(1)
(2)
(3)
Excludes $395,397,000 of unrestricted and restricted cash acquired.
Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests.
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 5-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.
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
Net assets acquired
417,983
2,253,451
12,820
418,297
381,913
4,981
1,354
3,490,799
(13,199)
(13,199)
(512,741)
2,964,859
$
$
83
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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):
Development projects:
Seniors Housing Operating
Triple-net
Outpatient Medical
Total development projects
Expansion projects
Total construction in progress conversions
4. Real Estate Intangibles
December 31, 2020
Year Ended
December 31, 2019
December 31, 2018
$
$
93,188 $
75,149
43,493
211,830
48,600
260,430 $
28,117 $
—
21,006
49,123
—
49,123 $
86,931
90,055
11,358
188,344
20,029
208,373
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, 2020
December 31, 2019
Assets:
In place lease intangibles
Above market tenant leases
Lease commissions
Gross historical cost
Accumulated amortization
Net book value
Weighted-average amortization period in years
Liabilities:
Below market tenant leases
Accumulated amortization
Net book value
Weighted-average amortization period in years
$
$
$
$
1,406,705 $
52,621
40,704
1,500,030
(1,177,513)
322,517 $
10.5
77,851 $
(40,871)
36,980 $
8.3
1,513,836
59,540
43,675
1,617,051
(1,181,158)
435,893
10.3
99,035
(49,390)
49,645
8.6
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
Amortization related to in place lease intangibles and lease commissions
2020
Year Ended December 31,
2019
$
1,710 $
(121,004)
508 $
(135,047)
2018
(1,269)
(122,515)
The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):
2021
2022
2023
2024
2025
Thereafter
Totals
Assets
Liabilities
$
$
78,160 $
43,726
34,071
26,524
21,324
118,712
322,517 $
7,993
7,320
5,158
3,049
2,482
10,978
36,980
84
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Dispositions, Real Property Held for Sale and Impairment
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). At December 31, 2020, four Seniors Housing Operating, one Triple-net and ten Outpatient
Medical properties with an aggregate net real estate balance of $216,613,000 were classified as held for sale for which we expect gross sales proceeds of
approximately $276,363,000. In addition to the real property balances held for sale, net other assets and (liabilities) of $35,811,000 are included in the
Consolidated Balance Sheets related to held for sale properties.
During the year ended December 31, 2020, we recorded impairment charges of $87,873,000 related to 15 Seniors Housing Operating and one Triple-net
properties which were disposed of or classified as held for sale for which the carrying value exceeded the fair values, less estimated costs to sell.
Additionally, during the year ended December 31, 2020, we recorded $47,735,000 of impairment charges related to six Seniors Housing Operating and four
Triple-net properties that were held for use in which the carrying value exceed the fair value. The following is a summary of our real property disposition
activity for the periods presented (in thousands):
Real estate dispositions:
Seniors Housing Operating
Triple-net
Outpatient Medical
Total dispositions
Gain (loss) on real estate dispositions, net
Net other assets (liabilities) disposed
Proceeds from real estate dispositions
December 31, 2020
Year Ended
December 31, 2019
December 31, 2018
$
$
1,289,769 $
51,666
1,755,864
3,097,299
1,088,455
114,274
4,300,028 $
1,232,816 $
667,632
482
1,900,930
748,041
1,679
2,650,650 $
36,627
835,093
253,397
1,125,117
415,575
1,178
1,541,870
Operating results attributable to properties sold or classified as held for sale which do not meet the definition of discontinued operations, are not
reclassified on our Consolidated Statements of Comprehensive Income. The following represents the activity related to these properties for the periods
presented (in thousands):
Revenues:
Total revenues
Expenses:
Interest expense
Property operating expenses
Provision for depreciation
Total expenses
Income (loss) from real estate dispositions, net
6. Leases
2020
Year Ended December 31,
2019
2018
$
$
257,089 $
712,529 $
916,896
6,665
134,119
55,114
195,898
61,191 $
18,506
375,327
138,041
531,874
180,655 $
18,801
495,770
189,909
704,480
212,416
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).
We sublease certain real estate to a third party. Our sublease portfolio consists of a finance lease for seven buildings which are subleased to Genesis
Healthcare.
85
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The components of lease expense were as follows for the periods presented (in thousands):
Classification
December 31, 2020
December 31, 2019
Year Ended
Operating lease cost:
(1)
Real estate lease expense
Non-real estate investment lease expense
Property operating expenses
General and administrative expenses
Finance lease cost:
Amortization of leased assets
Interest on lease liabilities
Sublease income
Total
(1)
Includes short-term leases which are immaterial.
Property operating expenses
Interest expense
Rental income
Maturities of lease liabilities as of December 31, 2020 are as follows (in thousands):
$
$
23,472 $
4,745
8,203
6,411
(4,173)
38,658 $
25,166
1,654
7,795
4,748
(4,173)
35,190
2021
2022
2023
2024
2025
Thereafter
Total lease payments
Less: Imputed interest
Total present value of lease liabilities
Operating Leases
Finance Leases
$
$
20,316 $
19,051
19,082
18,380
15,575
910,134
1,002,538
(691,374)
311,164 $
8,777
8,587
69,439
1,491
1,459
107,674
197,427
(90,325)
107,102
Supplemental balance sheet information related to leases was as follows for the periods presented (in thousands, except lease terms and discount rate):
Classification
December 31, 2020
December 31, 2019
Right of use assets:
Operating leases - real estate
Finance leases - real estate
Real estate right of use assets, net
Right of use assets, net
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
$
$
$
$
310,017
155,849
465,866
9,624
475,490
311,164
107,102
418,266
$
$
$
$
46.9
17.7
5.02 %
5.16 %
374,217
162,216
536,433
12,474
548,907
364,803
108,890
473,693
46.0
15.9
5.00 %
5.18 %
86
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Supplemental cash flow information related to leases was as follows for the periods indicated (in thousands):
Cash Paid for Amounts Included in the
Measurement of Lease Liabilities
Operating cash flows from operating leases
Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases
Classification
Year Ended
December 31,
2020
December 31,
2019
Decrease (increase) in receivables and other assets
Increase (decrease) in accrued expenses and other liabilities
Decrease (increase) in receivables and other assets
Other financing activities
$
$
9,323
(3,918)
8,263
(3,568)
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. During the year ended December 31,
2020, we wrote off straight-line recent receivable balances of $146,508,000 relating to leases for which collection of substantially all contractual lease
payments was no longer deemed probable. Included in such amounts was $91,025,000 relating to Genesis Healthcare whom noted substantial doubt as to
their ability to continue as a going concern in August.
Leases in our Triple-net and Outpatient Medical portfolios typically include some form of operating expense reimbursement by the tenant. For the year
ended December 31, 2020, we recognized $1,443,360,000 of rental income related to operating leases, of which $203,348,000 was for variable lease
payments, which primarily represents the reimbursement of operating costs such as common area maintenance expenses, utilities, insurance and real estate
taxes. For the year ended December 31, 2019, we recognized $1,588,400,000 of rental income related to operating leases, of which $200,564,000 was for
variable lease payments.
The following table sets forth the future minimum lease payments receivable for leases in effect at December 31, 2020 (excluding properties in our
Seniors Housing Operating portfolio and excluding any operating expense reimbursements) (in thousands):
2021
2022
2023
2024
2025
Thereafter
Totals
7. Loans Receivable
$
$
1,405,428
1,390,915
1,332,520
1,306,595
1,236,338
7,957,714
14,629,510
Loans receivable are recorded on our Consolidated Balance Sheets in real estate loans receivable, net of allowance for credit losses, or for non-real estate
loans receivable, in receivables and other assets, net of allowance for credit losses. 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 the risk of credit loss.
Accrued interest receivable was $15,615,000 and $6,897,000 as of December 31, 2020 and December 31, 2019, respectively, and is included in receivables
and other assets on the Consolidated Balance Sheets. The following is a summary of our loans receivable (in thousands):
87
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Mortgage loans
Other real estate loans
Allowance for credit losses on real estate loans receivable
Real estate loans receivable, net of credit allowance
Non-real estate loans
Allowance for credit losses on non-real estate loans receivable
Non-real estate loans receivable, net of credit allowance
(1)
Total loans receivable, net of credit allowance
(1)
Included in receivables and other assets on the Consolidated Balance Sheets.
Year Ended December 31,
2020
2019
$
$
299,430 $
152,739
(8,797)
443,372
455,508
(215,239)
240,269
683,641 $
188,062
124,696
(42,376)
270,382
362,850
(25,996)
336,854
607,236
During the year ended December 31, 2020, the real estate collateral associated with one loan was released, therefore, the principal balance of
$86,411,000 and related allowance for credit losses of $42,376,000 was reclassified to non-real estate loans.
The following is a summary of our loan activity for the periods presented (in thousands):
Advances on loans receivable:
Investments in new loans
Draws on existing loans
Net cash advances on loans receivable
Receipts on loans receivable:
Loan payoffs
Principal payments on loans
Net cash receipts on loans receivable
Net cash advances (receipts) on loans receivable
$
$
December 31, 2020
Year Ended
December 31, 2019
December 31, 2018
224,078 $
23,465
247,543
15,677
15,871
31,548
215,995 $
46,824 $
72,875
119,699
118,703
9,003
127,706
(8,007) $
77,289
34,759
112,048
144,700
59,235
203,935
(91,887)
The following is a summary of our loans by credit loss category (in thousands):
Loan category
(1)
Deteriorated loans
Collective loan pool
Collective loan pool
Collective loan pool
Collective loan pool
Collective loan pool
Collective loan pool
Total loans
Years of Origination
Loan Carrying Value
Allowance for Credit Loss
Net Loan Balance
No. of Loans
December 31, 2020
2007 - 2018
2007 - 2015
2016
2017
2018
2019
2020
$
$
242,319 $
130,436
126,465
126,792
19,923
48,819
212,923
907,677 $
(212,514) $
(2,452)
(2,381)
(1,429)
(374)
(886)
(4,000)
(224,036) $
29,805
127,984
124,084
125,363
19,549
47,933
208,923
683,641
6
14
4
7
1
7
9
48
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. During the year ended December 31, 2020, we recognized additional provision for loan losses of
$88,201,000 as a result of the current collateral estimates for loans with deteriorated credit, primarily relating to our outstanding Genesis Healthcare loans.
As of December 31, 2020, the total allowance for credit losses balance of $224,036,000 is deemed to be sufficient to absorb expected losses relating to our
loan portfolio. The following is a summary of the allowance for credit losses on loans receivable for the periods presented (in thousands):
88
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Balance at beginning of year
Adoption of ASU 2016-13
Provision for loan losses
Loan write-offs
Foreign currency translation
Reclassification of deferred gain as credit loss
(1)
2020
$
Year Ended December 31,
2019
2018
68,372 $
5,212
94,436
(7,000)
197
62,819
224,036 $
68,372 $
—
18,690
(18,690)
—
—
68,372 $
68,372
—
—
—
—
—
68,372
Balance at end of year
(1)
loan pool. In addition, deferred gains of $62,819,000 previously recorded in accrued expenses and other liabilities were reclassified to the allowance for credit losses.
During the year ended December 31, 2020, two loans receivable originated in 2016 to Genesis Healthcare with an aggregate carrying value of $62,753,000 were transferred to the deteriorated
$
The following is a summary of our deteriorated loans (in thousands):
Balance of deteriorated loans at end of year
Allowance for credit losses
(1)
Balance of deteriorated loans not reserved
2020
Year Ended December 31,
2019
2018
$
$
242,319 $
(212,514)
29,805 $
18,937
188,018 $
(68,372)
119,646 $
16,235
189,272
(68,372)
120,900
17,241
Interest recognized on deteriorated loans
(1)
(2)
Balances include $3,623,000, $2,534,000 and 2567000 of loans on non-accrual as of December 31, 2020, 2019 and 2018, respectively.
Represents cash interest recognized in the period.
(2)
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):
Seniors Housing Operating
Triple-net
Outpatient Medical
Total
(1)
Percentage Ownership
10% to 65%
10% to 25%
15% to 50%
$
$
December 31, 2020
December 31, 2019
653,057 $
5,629
287,548
946,234 $
463,741
7,740
111,942
583,423
(1)
Includes ownership of investments classified as liabilities and excludes ownership of in-substance real estate.
We own 34% of Sunrise Senior Living Management, Inc. ("Sunrise"), who provides comprehensive property management and accounting services with
respect to certain of our Seniors Housing Operating 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 2035 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, 2020, 2019 and 2018, we recognized fees to Sunrise of $40,088,000, $41,200,000 and $36,378,000,
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, 2020, the aggregate unamortized basis difference of our joint venture investments of $116,504,000 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 joint venture. 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 $333,934,000 related to eight properties as of December 31, 2020 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
89
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 $120,004,000 related to these investments.
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, 2020, excluding our share of NOI in
unconsolidated entities (dollars in thousands):
Concentration by relationship:
(3)
(1)
(3)
Sunrise Senior Living
ProMedica
Revera
Avery Healthcare
Sagora Senior Living
Remaining portfolio
Totals
Number of
Properties
Total
NOI
165 $
215
94
60
31
928
1,493 $
257,558
212,593
100,344
75,863
67,399
1,294,387
2,008,144
(2)
Percent of
NOI
13%
11%
5%
4%
3%
64%
100%
Sunrise Senior Living and Revera are in our Seniors Housing Operating segment. ProMedica is in our Triple-net segment. Avery Healthcare and Sagora Senior Living are in both the Triple-net
(1)
and Seniors Housing Operating segments.
(2)
NOI with our top five relationships comprised 37% of total NOI for the year ending December 31, 2019.
(3)
Revera owns a controlling interest in Sunrise. For the year ended December 31, 2020, we recognized $1,147,146,000 of revenue from properties managed by Sunrise Senior Living.
10. Borrowings Under Credit Facilities and Commercial Paper Program
At December 31, 2020, we had a primary unsecured credit facility with a consortium of 31 banks that includes a $3,000,000,000 unsecured revolving
credit facility ($0 outstanding at December 31, 2020), 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, 2020). Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR
interest rate. The applicable margin is based on our debt ratings and was 0.825% at December 31, 2020. 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, 2020. 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 (none outstanding at December 31, 2020.
The following information relates to aggregate borrowings under the 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
$
$
$
2020
—
2,100,000
497,014
$
$
$
Year Ended December 31,
2019
1,588,600
2,880,000
1,376,813
$
$
$
2018
1,147,000
2,148,000
950,581
2.09 %
2.84 %
3.07 %
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
90
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 (i) 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 (ii) any “make-
whole” amount due under the terms of the notes 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, 2020, the annual principal payments
due on these debt obligations were as follows (in thousands):
(4)
(5,6)
2021
2022
2023
2024
2025
Thereafter
(7,8,9)
Totals
Senior Unsecured Notes
(1,2)
Secured Debt
(1,3)
Totals
$
$
— $
870,000
1,369,784
1,350,000
1,250,000
6,669,749
11,509,533 $
451,038 $
460,892
372,541
183,345
214,440
695,817
2,378,073 $
451,038
1,330,892
1,742,325
1,533,345
1,464,440
7,365,566
13,887,606
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
(3)
(4)
Annual interest rates range from 0.85% to 6.50%.
Annual interest rates range from 0.09% to 12.00%. Carrying value of the properties securing the debt totaled $5,388,000,000 at December 31, 2020.
Includes a $860,000,000 unsecured term credit facility. The loan matures on April 1, 2022 and bears interest at LIBOR plus 1.20% (1.35% at December 31, 2020).
Includes a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $196,032,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2020). The loan
(5)
matures on July 19, 2023 and bears interest at the Canadian Dealer Offered Rate plus 0.9% (1.37% at December 31, 2020).
(6)
Includes a $500,000,000 unsecured term credit facility. The loan matures on July 19, 2023 and bears interest at LIBOR plus 0.9% (1.05% at December 31, 2020).
Includes a $300,000,000 Canadian-denominated 2.95% senior unsecured notes due 2027 (approximately $235,239,000 based on the Canadian/U.S. Dollar exchange rate on December 31,
Includes a £550,000,000 4.80% senior unsecured notes due 2028 (approximately $751,410,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on December 31, 2020).
Includes a £500,000,000 4.50% senior unsecured notes due 2034 (approximately $683,100,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on December 31, 2020).
(9)
(1)
Sheets.
(2)
(7)
2020).
(8)
The following is a summary of our senior unsecured note principal activity during the periods presented (dollars in thousands):
December 31, 2020
Year Ended
December 31, 2019
December 31, 2018
Amount
10,427,562
1,600,000
(566,248)
48,219
11,509,533
$
$
Weighted Avg.
Interest Rate
4.03%
1.89%
3.26%
4.35%
3.67%
Amount
9,699,984
3,987,790
(3,335,290)
75,078
10,427,562
$
$
Weighted Avg.
Interest Rate
4.48%
3.34%
4.39%
4.22%
4.03%
Amount
8,417,447
2,850,000
(1,450,000)
(117,463)
9,699,984
$
$
Weighted Avg.
Interest Rate
4.31%
4.57%
3.46%
4.16%
4.48%
Beginning balance
Debt issued
Debt extinguished
Foreign currency
Ending balance
The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):
December 31, 2020
Year Ended
December 31, 2019
December 31, 2018
Amount
2,993,342
62,055
—
(632,288)
(62,707)
17,671
2,378,073
$
$
Weighted Avg.
Interest Rate
3.63%
2.55%
—%
2.21%
3.63%
2.93%
3.27%
Amount
2,485,711
343,696
385,145
(230,108)
(54,325)
63,223
2,993,342
$
$
Weighted Avg.
Interest Rate
3.90%
3.11%
4.34%
4.35%
3.75%
3.28%
3.63%
Amount
2,618,408
45,447
292,887
(306,553)
(56,288)
(108,190)
2,485,711
$
$
Weighted Avg.
Interest Rate
3.76%
3.40%
4.64%
5.36%
3.91%
3.33%
3.90%
Beginning balance
Debt issued
Debt assumed
Debt extinguished
Principal payments
Foreign currency
Ending balance
91
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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,
2020, 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 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.
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 are 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 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. Approximately $2,686,000
of losses, which are included in OCI, are expected to be reclassified into earnings in the next 12 months.
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, 2020, 2019, and 2018 we settled certain net investment hedges necessitating cash payments of $1,988,000 and
generating cash proceeds of $6,716,000, and $70,897,000, respectively. The balance of the cumulative translation adjustment will be reclassified to
earnings if 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 the changes
in fair value of these instruments are recorded in interest expense on the Consolidated Statements 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 fair values of these instruments are also recorded in interest expense.
The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):
92
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars
Denominated in Pound Sterling
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars
Denominated in Pound Sterling
Interest rate swaps designated as cash flow hedges:
Denominated in U.S. Dollars
(1)
Derivative instruments not designated:
Interest rate caps denominated in U.S. Dollars
Forward sales contracts denominated in Canadian Dollars
Forward purchase contracts denominated in Pound Sterling
Forward sales contracts denominated in Pound Sterling
(1)
At December 31, 2020 the maximum maturity date was January 15, 2021.
December 31, 2020
December 31, 2019
$
£
$
£
$
$
$
£
£
625,000 $
1,340,708 £
250,000 $
1,050,000 £
450,000 $
26,137 $
80,000 $
— £
— £
725,000
1,340,708
250,000
1,050,000
1,188,250
405,819
—
(125,000)
125,000
The following presents the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the periods presented (in
thousands):
Description
Gain (loss) on derivative instruments designated as hedges
recognized in income
Gain (loss) on derivative instruments not designated as hedges
recognized in income
Gain (loss) on derivative and financial instruments designated as
hedges recognized in OCI
Location
Interest expense
Interest expense
OCI
13. Commitments and Contingencies
December 31, 2020
Year Ended
December 31, 2019
December 31, 2018
$
$
$
22,698
(5,982)
(134,369)
$
$
$
26,419
(2,310)
(131,120)
$
$
$
12,271
5,233
211,390
At December 31, 2020, we had 9 outstanding letter of credit obligations totaling $19,476,000 and expiring between 2021 and 2024. At December 31,
2020, we had outstanding construction in progress of $487,742,000 and were committed to providing additional funds of approximately $622,108,000 to
complete construction. Additionally, at December 31, 2020, we had outstanding investments classified as in substance real estate of $333,934,000 and were
committed to provide additional funds of $120,004,000 (see Note 8 for additional information). Purchase obligations include $42,685,000 of contingent
obligations to fund capital improvements. Rents due from the operator are increased to reflect the additional investment in the property.
14. Stockholders’ Equity
The following is a summary of our stockholders’ equity capital accounts as of the dates indicated:
Preferred Stock, $1.00 par value:
Authorized shares
Issued shares
Outstanding shares
Common Stock, $1.00 par value:
Authorized shares
Issued shares
Outstanding shares
Preferred Stock
The following is a summary of our preferred stock activity during the periods presented:
93
December 31, 2020
December 31, 2019
50,000,000
—
—
700,000,000
419,124,469
417,400,602
50,000,000
—
—
700,000,000
411,550,857
410,256,615
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Shares
Weighted Avg.
Dividend Rate
—%
—%
—%
—
—
—
Year Ended
December 31, 2019
Shares
14,369,965
(14,369,965)
—
Weighted Avg.
Dividend Rate
6.50%
6.50%
—%
December 31, 2018
Shares
14,370,060
(95)
14,369,965
Weighted Avg.
Dividend Rate
6.50%
6.50%
6.50%
Beginning balance
Shares converted
Ending balance
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.
Common Stock
In February 2019, we entered into an amended and restated equity distribution agreement 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. During the year
ended December 31, 2020, we physically settled all of our outstanding forward sale agreements for cash proceeds of $576,196,000. As of December 31,
2020, we had $499,341,000 of remaining capacity under the Equity Shelf Program.
On May 1, 2020, our Board of Directors authorized a share repurchase program whereby we may repurchase up to $1 billion of common stock through
December 31, 2021 (the "Repurchase Program"). Under this authorization, we are not required to purchase shares but may choose to do so in the open
market or through private transactions at times and amounts based on our evaluation of market conditions and other factors. We expect to finance any share
repurchases under the Repurchase Program using available cash and may use proceeds from borrowings or debt offerings. During the year ended December
31, 2020, we repurchased 201,947 shares at an average price of $37.89 per share.
The following is a summary of our common stock activity during the periods indicated (dollars in thousands, except average price amounts):
2018 Dividend reinvestment plan issuances
2018 Option exercises
2018 Equity Shelf Program issuances
2018 Preferred stock conversions
2018 Stock incentive plans, net of forfeitures
2018 Totals
2019 Dividend reinvestment plan issuances
2019 Option exercises
2019 Equity Shelf Program issuances
2019 Preferred stock conversions
2019 Stock incentive plans, net of forfeitures
2019 Totals
2020 Dividend reinvestment plan issuances
2020 Option exercises
2020 Equity Shelf Program issuances
2020 Stock incentive plans, net of forfeitures
2020 Totals
Dividends
Shares Issued
Average Price
Gross Proceeds
Net Proceeds
6,529,417 $
56,960
5,241,349
83
115,243
11,943,052
5,798,979 $
10,736
7,855,956
12,712,452
203,889
26,582,012
264,153 $
251
6,799,978
281,552
7,345,934
65.55 $
42.66
69.95
$
77.18 $
51.32
78.15
428,009 $
2,430
366,640
—
—
797,079 $
447,559 $
551
613,948
—
—
$
1,062,058 $
72.33 $
47.81
86.48
$
19,105 $
12
588,072
—
607,189 $
423,075
2,430
364,070
—
—
789,575
443,929
551
611,645
—
—
1,056,125
19,105
12
576,196
—
595,313
During the year ended December 31, 2020, we declared a reduced cash dividend beginning with the quarter ended March 31, 2020. 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):
94
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Common Stock
Series I Preferred Stock
Totals
December 31, 2020
Year Ended
December 31, 2019
December 31, 2018
Per Share
Amount
Per Share
Amount
Per Share
Amount
$
2.7000 $
—
$
1,120,187 $
—
1,120,187
3.4800 $
—
$
1,404,977 $
—
1,404,977
3.4800 $
3.2500
$
1,300,141
46,704
1,346,845
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
Total accumulated other comprehensive loss
15. Stock Incentive Plans
December 31, 2020
December 31, 2019
$
$
(621,792) $
473,288
(148,504) $
(719,814)
607,657
(112,157)
Our 2016 Long-Term Incentive Plan (“2016 Plan”) authorizes up to 10,000,000 shares of common stock to be issued at the discretion of the
Compensation Committee of the Board of Directors. 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, performance
units, and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted shares generally range from three to four years.
Options expire ten years from the date of grant.
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 three years. These awards vest after 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 the performance 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.
For the years ended December 31, 2020, 2019 and 2018, we recognized stock compensation expense (a component of general and administrative
expenses, property operating expenses, and other expenses) of $28,318,000, $25,047,000, and $27,646,000, respectively.
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, 2020, there was $20,900,000 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, 2020:
Non-vested at December 31, 2019
Vested
Granted
Forfeited or Expired
Non-vested at December 31, 2020
16. Earnings Per Share
Restricted Stock
Number of Shares (000's)
Weighted-Average
Grant Date Fair Value
1,106 $
(580)
274
(395)
405 $
70.26
71.36
88.24
83.01
69.35
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):
95
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Numerator for basic earnings per share - net income attributable
to common stockholders
Adjustment for net income (loss) attributable to OP units
Numerator for diluted earnings per share
Denominator for basic earnings per share - weighted average shares
Effect of dilutive securities:
Employee stock options
Non-vested restricted shares
Redeemable OP units
Employee stock purchase program
Dilutive potential common shares
Denominator for diluted earnings per share - adjusted weighted average shares
Basic earnings per share
Diluted earnings per share
2020
Year Ended December 31,
2019
2018
978,844 $
(6,146)
972,698 $
1,232,432 $
806
1,233,238 $
415,451
—
519
1,396
21
1,936
417,387
401,845
—
835
1,112
16
1,963
403,808
2.36 $
2.33 $
3.07 $
3.05 $
758,250
173
758,423
373,620
9
512
1,096
13
1,630
375,250
2.03
2.02
$
$
$
$
As of December 31, 2018, 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.
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.
96
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 derivatives 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 unless
the fair value is below the initial amount in which case the redeemable OP unitholder interests are recorded at the initial amount adjusted for distributions
to the unitholders and income or loss attributable to the unitholders. 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.
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
program
Senior unsecured notes
Secured debt
Foreign currency forward contracts, interest rate swaps and cross
currency swaps
Redeemable OP unitholder interests
Items Measured at Fair Value on a Recurring Basis
$
$
$
December 31, 2020
December 31, 2019
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
293,752 $
149,620
4,636
1,545,046
475,997
240,269
297,207 $
152,211
4,636
1,545,046
475,997
255,724
145,686 $
124,696
15,685
284,917
100,849
336,854
4,668
4,668
18,554
— $
— $
11,420,790
2,377,930
13,093,926
2,451,782
1,587,597 $
10,336,513
2,990,962
118,054
118,054
53,601
116,240 $
115,346 $
121,440 $
150,217
128,512
15,685
284,917
100,849
379,239
18,554
1,587,597
11,400,571
3,041,893
53,601
121,440
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):
Equity securities
Foreign currency forward contracts, interest rate swaps and cross
currency swaps, net asset (liability)
(1)
Totals
(1)
Please see Note 12 for additional information.
Items Measured at Fair Value on a Nonrecurring Basis
Fair Value Measurements as of December 31, 2020
Total
Level 1
Level 2
Level 3
$
$
4,636 $
(113,386)
(108,750) $
4,636 $
—
4,636 $
— $
(113,386)
(113,386) $
—
—
—
In addition to items that are measured at fair value on a recurring basis, we also have assets and liabilities on our balance sheet 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
97
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
impairments (if applicable, see Note 5 for impairments of real property and Note 7 for impairments of 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 and unobservable data such as net operating income, and 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 supportive living communities (Canada), care homes with and without nursing
(U.K.) and combinations thereof that are generally 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 are typically leased to multiple tenants and generally require a
certain level of property management by us.
We evaluate performance based upon consolidated 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 as 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 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.
Summary information for the reportable segments (which excludes unconsolidated entities) during the years ended December 31, 2020, 2019 and 2018 is
as follows (in thousands):
98
Year Ended December 31, 2020:
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
Income (loss) from unconsolidated entities
Gain (loss) on real estate dispositions, net
Income (loss) from continuing operations
Net income (loss)
Total assets
$
$
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Seniors Housing
Operating
Triple-net
Outpatient Medical
Non-segment /
Corporate
Total
$
3,074,022 $
— $
— $
—
618
7,223
3,081,863
2,326,311
755,552
544,462
54,901
—
—
12,659
671
100,741
14,265
733,776
62,625
4,903
801,304
53,183
748,121
232,604
9,477
—
11,049
—
90,563
34,867
22,923
709,584
5,913
4,522
720,019
214,948
505,071
261,371
17,579
—
—
1,046
3,202
—
8,218
— $
—
—
2,781
2,781
3,381
(600)
—
432,431
128,394
—
33,344
—
—
24,929
3,074,022
1,443,360
69,156
19,429
4,605,967
2,597,823
2,008,144
1,038,437
514,388
128,394
11,049
47,049
94,436
135,608
70,335
(31,552)
(9,968)
(8,083)
1,088,455
1,038,852
1,038,852
27,853
—
(33,857)
328,249
322,245
322,245 $
346,638
—
18,462
64,288
429,388
429,388 $
213,655
—
7,312
695,918
916,885
916,885 $
(619,698)
(9,968)
—
—
(629,666)
(629,666) $
16,044,153 $
8,547,482 $
6,522,880 $
1,369,127 $
32,483,642
99
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Seniors Housing
Operating
$
3,448,175 $
Non-segment /
Corporate
Total
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
Income (loss) from unconsolidated entities
Gain (loss) on real estate dispositions, net
Income (loss) from continuing operations
Net income (loss)
Total assets
$
$
Triple-net
—
903,798
62,599
6,246
972,643
53,900
918,743
232,626
12,892
—
(4,399)
—
18,690
11,926
13,771
633,237
—
22,985
218,322
874,544
874,544
—
36
8,658
3,456,869
2,417,349
1,039,520
553,189
67,983
—
—
1,614
—
2,145
26,348
388,241
—
12,388
528,747
929,376
929,376 $
$
$
15,784,898 $
9,434,817
100
Outpatient Medical
$
— $
684,602
1,195
2,031
687,828
218,793
469,035
241,258
13,411
—
—
—
—
14,062
1,788
— $
—
—
3,966
3,966
—
3,966
—
461,273
126,549
—
82,541
—
—
10,705
198,516
—
7,061
972
206,549
206,549 $
(677,102)
(2,957)
—
—
(680,059)
(680,059) $
7,991,521 $
169,515 $
33,380,751
3,448,175
1,588,400
63,830
20,901
5,121,306
2,690,042
2,431,264
1,027,073
555,559
126,549
(4,399)
84,155
18,690
28,133
52,612
542,892
(2,957)
42,434
748,041
1,330,410
1,330,410
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Seniors Housing
Operating
$
3,234,852 $
Outpatient Medical
$
— $
Year Ended December 31, 2018:
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
Impairment of assets
Other expenses
Income (loss) 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
Income (loss) from continuing operations
(1)
Net income (loss)
$
Triple-net
—
828,865
54,926
17,173
900,964
915
900,049
235,480
14,225
—
(4,016)
(32)
107,980
90,975 (1)
455,437
—
21,938
196,589
673,964
673,964
$
—
578
5,024
3,240,454
2,255,432
985,022
529,449
69,060
—
—
110
7,599
6,624
372,180
—
(28,142)
(2,245)
341,793
341,793 $
Non-segment /
Corporate
Total
— $
—
—
2,275
2,275
—
2,275
—
436,256
126,383
—
4,091
—
7,729
(572,184)
(8,674)
—
—
(580,858)
(580,858) $
3,234,852
1,380,422
55,814
29,411
4,700,499
2,433,017
2,267,482
950,459
526,592
126,383
(4,016)
16,097
115,579
112,898
423,490
(8,674)
(641)
415,575
829,750
829,750
551,557
310
4,939
556,806
176,670
380,136
185,530
7,051
—
—
11,928
—
7,570
168,057
—
5,563
221,231
394,851
394,851 $
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
(1)
from Triple-net to Seniors Housing Operating and termination/restructuring of preexisting relationships.
Our portfolio of properties and other investments are located in the United States, the United Kingdom 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):
Revenues:
United States
United Kingdom
Canada
Total
Assets:
United States
United Kingdom
Canada
Total
$
$
$
$
December 31, 2020
Year Ended
December 31, 2019
December 31, 2018
Amount
(1)
%
Amount
%
Amount
%
3,720,155
451,399
434,413
4,605,967
80.8 % $
9.8 %
9.4 %
100.0 % $
As of
4,205,492
452,698
463,116
5,121,306
82.1 % $
8.8 %
9.1 %
100.0 % $
3,777,960
452,956
469,583
4,700,499
80.4 %
9.6 %
10.0 %
100.0 %
December 31, 2020
December 31, 2019
Amount
%
Amount
%
26,658,659
3,352,549
2,472,434
32,483,642
82.1 % $
10.3 %
7.6 %
100.0 % $
27,513,911
3,405,388
2,461,452
33,380,751
82.4 %
10.2 %
7.4 %
100.0 %
(1)
The United States, United Kingdom and Canada represent 76%, 10% and 14%, respectively, of our resident fees and services revenue for the year ended December 31, 2020.
101
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 100% of net capital gains) must be distributed to stockholders. REITs that do not distribute a certain amount of taxable income in the
current year are also subject to a 4% federal excise tax. The main differences between undistributed net income for federal income tax purposes and
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.
Cash distributions paid to common stockholders, for federal income tax purposes, are as follows for the periods presented:
Per share:
(1)
Ordinary dividend
Long-term capital gain/(loss)
Return of capital
(2)
Totals
2020
Year Ended December 31,
2019
2018
$
$
1.6389 $
1.0611
—
2.7000 $
2.6937 $
0.7863
—
3.4800 $
2.1988
1.1153
0.1659
3.4800
(1)
(2)
For the years ended December 31, 2020, 2019 and 2018, includes Section 199A dividends of $1.6389, $2.6937 and $2.1988 respectively.
For the years ended December 31, 2020, 2019 and 2018, includes Unrecaptured SEC. 1250 Gains of $0.3458, $0.2835 and $0.3822, respectively.
Our consolidated provision for income tax expense (benefit) is as follows for the periods presented (in thousands):
Current tax expense
Deferred tax benefit
Income tax expense (benefit)
2020
Year Ended December 31,
2019
2018
$
$
11,358 $
(1,390)
9,968 $
12,594 $
(9,637)
2,957 $
15,850
(7,176)
8,674
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, 2020, 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, 2020 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, 2020, 2019 and 2018, the foreign tax provision/(benefit) amount included in
the consolidated provision for income taxes was $5,777,000, ($3,892,000) and $9,804,000, respectively.
A reconciliation of income taxes, which is computed by applying the federal corporate tax rate for the years ended December 31, 2020, 2019 and 2018,
to the income tax expense/(benefit) is as follows for the periods presented (in thousands):
Tax at statutory rate on earnings from continuing operations before unconsolidated entities,
noncontrolling interests and income taxes
Increase (decrease) in valuation allowance
Tax at statutory rate on earnings not subject to federal income taxes
Foreign permanent depreciation
Other differences
(1)
Totals
(1)
Excluding purchase price accounting.
2020
Year Ended December 31,
2019
2018
$
$
220,252 $
85,881
(300,196)
1,504
2,527
9,968 $
280,005 $
3,465
(311,224)
9,260
21,451
2,957 $
176,069
28,309
(206,937)
8,110
3,123
8,674
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):
102
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 allowances
Net deferred tax assets (liabilities)
2020
Year Ended December 31,
2019
2018
$
$
(24,085) $
196,634
72,459
(244,938)
70 $
(13,064) $
127,525
43,056
(159,057)
(1,540) $
(2,533)
98,713
48,804
(155,592)
(10,608)
On the basis of the evaluations performed as required by the codification, valuation allowances totaling $244,938,000 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 than 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):
Beginning balance
Expense (benefit)
Ending balance
2020
Year Ended December 31,
2019
2018
$
$
159,057 $
85,881
244,938 $
155,592 $
3,465
159,057 $
127,283
28,309
155,592
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,
2017 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, 2016. We are also subject to audit by the Canada Revenue
Agency and provincial authorities generally for periods subsequent to May 2016 related to entities acquired or formed in connection with acquisitions, and
by the U.K.’s HM Revenue & Customs for periods subsequent to August 2014 related to entities acquired or formed in connection with acquisitions.
At December 31, 2020, we had a net operating loss (“NOL”) carryforward related to the REIT of $351,254,000. Due to our uncertainty regarding the
realization of certain deferred tax assets, we have not 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, 2018 will expire through 2038. Beginning with the tax years after December 31, 2017, the law eliminates the NOL
carryback period for REITs, replaces the 20-year NOL carryforward period with an indefinite carryforward period and, with respect to tax years beginning
after 2020, limits the use of NOLs to 80% of taxable income.
At December 31, 2020 and 2019, we had an NOL carryforward related to Canadian entities of $262,345,000 and $195,791,000 respectively. These
Canadian losses have a 20-year carryforward period. At December 31, 2020 and 2019, we had an NOL carryforward related to U.K. entities of
$207,085,000 and $209,776,000 respectively. These U.K. losses do not have a finite carryforward period.
The CARES Act, among its economic stimulus provisions, includes a number of tax provisions relating to refundable payroll tax credits, deferment of
employer side social security payments, net operating loss carrybacks, alternative minimum tax credit refunds, modifications to the net interest deduction
limitations and technical corrections to tax depreciation methods for qualified improvement property. Certain of these provisions may impact the provision
for taxes in our consolidated financial statements, including in particular the provision allowing for the carryback of net operating losses which would be
applicable to our TRSs. We have made a reasonable estimate of the tax impact to us of the CARES Act in our consolidated financial
103
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
statements, and while we do not believe that there will be further material impacts to the consolidated financial statements related to the CARES Act tax
provisions, we will continue to evaluate the impact of the CARES Act and any guidance provided by the U.S. Treasury and the IRS on our consolidated
financial statements. It is possible our estimates could differ materially from the actual tax impact to us of the CARES Act.
20. Quarterly Results of Operations (Unaudited)
The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2020 and 2019 (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 stockholders
Net income (loss) attributable to common stockholders per share:
Basic
Diluted
(1)
Revenues
Net income (loss) attributable to common stockholders
Net income (loss) attributable to common stockholders per share:
Basic
Diluted
(1)
(1)
Includes adjustment to the numerator for income (loss) attributable to OP unitholders.
21. Variable Interest Entities
1st Quarter
Year Ended December 31, 2020
3rd Quarter
2nd Quarter
4th Quarter
1,258,602 $
310,284 $
1,188,475 $
179,246 $
1,036,874 $
325,585 $
1,122,016
163,729
0.76 $
0.75 $
0.43 $
0.42 $
0.78 $
0.77 $
0.39
0.39
1st Quarter
Year Ended December 31, 2019
3rd Quarter
2nd Quarter
4th Quarter
1,272,245 $
280,470 $
1,320,106 $
137,762 $
1,266,133 $
589,876 $
1,262,822
224,324
0.72 $
0.71 $
0.34 $
0.34 $
1.46 $
1.45 $
0.55
0.55
$
$
$
$
$
$
$
$
We have entered into joint ventures to own certain seniors housing and outpatient medical assets which are deemed to be 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, 2020
December 31, 2019
Assets:
Net real estate investments
Cash and cash equivalents
Receivables and other assets
(1)
Total assets
Liabilities and equity:
Secured debt
Lease liabilities
Accrued expenses and other liabilities
Total equity
Total liabilities and equity
$
$
$
$
454,333 $
15,547
11,171
481,051 $
165,671 $
1,325
14,997
299,058
481,051 $
960,093
27,522
14,586
1,002,201
460,117
1,326
22,215
518,543
1,002,201
(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.
104
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, 2020 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, 2020.
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.
105
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 Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2020, 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, 2020, based on the COSO criteria.
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, 2020 and 2019, the related consolidated statements of comprehensive income, equity
and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedules listed in the
index at Item 15(a) and our report dated February 10, 2021 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 10, 2021
/s/ Ernst & Young LLP
106
Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
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 April 30, 2021.
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 April 30, 2021.
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 April 30, 2021.
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 April 30, 2021.
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 April 30, 2021.
107
PART IV
Item 15. Exhibits and Financial Statement Schedules
1. (i) Our Consolidated Financial Statements are included in Part II, Item 8:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets – December 31, 2020 and 2019
Consolidated Statements of Comprehensive Income — Years ended December 31, 2020, 2019 and 2018
Consolidated Statements of Equity — Years ended December 31, 2020, 2019 and 2018
Consolidated Statements of Cash Flows — Years ended December 31, 2020, 2019 and 2018
Notes to Consolidated Financial Statements
69
71
72
74
75
76
(ii) The following Financial Statement Schedules are included beginning on page 116
III – Real Estate and Accumulated Depreciation
IV – Mortgage Loans on Real Estate
The financial statement schedule required by Item15(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.
108
2.1 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).
3.1(a) 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).
3.1(b) 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).
3.1(c) 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).
3.1(d) 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).
3.1(e) 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).
3.1(f) 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).
3.1(g) 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).
3.1(h) 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).
3.1(i) 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).
3.2 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).
4.1(a) 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).
4.1(b) 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).
4.1(c) 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).
4.1(d) 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).
4.1(e) 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).
109
4.1(f) 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).
4.1(g) 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).
4.1(h) 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).
4.1(i) 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).
4.1(j) 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).
4.1(k) 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).
4.1(l) 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).
4.1(m) 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).
4.1(n) 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).
4.1(o) 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).
4.1(p) 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).
4.1(q) 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).
4.1(r) 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).
4.1(s) 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).
4.1(t) 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).
4.1(u) 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).
110
4.1(v) Supplemental Indenture No. 18, dated as of June 30, 2020, 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 June 30, 2020 (File No. 001-08923), and incorporated herein by reference
thereto).
4.2 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).
4.3 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).
4.4(a) 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).
4.4(b) 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 (filed with the Commission as Exhibit 4.4(c) to the Company's Form 10-K filed February 14, 2020 (File No. 001-08923), and
incorporated herein by reference thereto).
4.5 Description of Securities of the Registrant (filed with the Commission as Exhibit 4.5 to the Company's Form 10-K filed February 14, 2020 (File No.
001-08923), and incorporated herein by reference thereto).
10.1(a) 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).
10.1(b) 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).
10.2(a) 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).*
10.2(b) 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).*
10.2(c) 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).*
10.2(d) 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).*
111
10.2(e) 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).*
10.3(a) 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).*
10.3(b) 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).*
10.3(c) Settlement Agreement by and between Thomas J. DeRosa and Welltower Inc. (filed with the Commission as Exhibit 10.1 to the Company’s Form
10-Q filed October 29, 2020 (File No. 001-08923), and incorporated herein by reference thereto).*
10.4 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).*
10.5 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).*
10.6 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).*
10.7 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).*
10.8(a) 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).*
10.8(b) 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).*
10.8(c) 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).*
10.8(d) 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).*
10.9(a) 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).*
10.9(b) 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).*
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).*
112
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) 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).*
10.13 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 (filed with the Commission as Exhibit 10.14(a) to the Company's Form 10-K filed
February 14, 2020 (File No. 001-08923), and incorporated herein by reference thereto).*
10.14(b) Form of Restricted Stock Unit Award Agreement under the 2020-2022 Long-Term Incentive Program (filed with the Commission as Exhibit
10.14(b) to the Company's Form 10-K filed February 14, 2020 (File No. 001-08923), and incorporated herein by reference thereto).*
21 Subsidiaries of the Company.
23 Consent of Ernst & Young LLP, independent registered public accounting firm.
24 Powers of Attorney.
31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1 Certification pursuant to 18 U.S.C. Section 1350 by Chief Executive Officer.
32.2 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
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, 2020, formatted in Inline XBRL (included in
Exhibit 101)
113
*
Management Contract or Compensatory Plan or Arrangement.
Item 16. Form 10-K Summary
None.
114
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 10, 2021
WELLTOWER INC.
By: /s/ Shankh Mitra
Shankh Mitra,
Chief Executive Officer, Chief Investment Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 10, 2021 by the following persons
on behalf of the Registrant and in the capacities indicated.
/s/ Kenneth J. Bacon **
Kenneth J. Bacon, Chairman and Director
/s/ Karen B. DeSalvo **
Karen B. DeSalvo, Director
/s/ Jeffrey H. Donahue **
Jeffrey H. Donahue, Director
/s/ Philip L. Hawkins **
Philip L. Hawkins, Director
/s/ Sharon M. Oster **
Sharon M. Oster, Director
/s/ Diana W. Reid **
Diana W. Reid, Director
/s/ Sergio D. Rivera **
Sergio D. Rivera, Director
/s/ Johnese M. Spisso **
Johnese M. Spisso, Director
/s/ Kathryn M. Sullivan **
Kathryn M. Sullivan, Director
/s/ Shankh Mitra **
Shankh Mitra, Chief Executive Officer, Chief Investment Officer and
Director
(Principal Executive Officer)
/s/ Timothy G. McHugh **
Timothy G. McHugh, Executive Vice President - Chief
Financial Officer (Principal Financial Officer)
/s/ Joshua T. Fieweger**
Joshua T. Fieweger, Chief Accounting Officer
(Principal Accounting Officer)
**By: /s/ Shankh Mitra
Shankh Mitra, Attorney-in-Fact
115
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2020
(Dollars in thousands)
Description
Encumbrances
Seniors Housing Operating:
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Adderbury, UK
Albertville, AL
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
Ballston Spa, NY
Banstead, UK
Basingstoke, UK
Basking Ridge, NJ
Bassett, UK
Bath, UK
Baton Rouge, LA
Beaconsfield, UK
Beaconsfield, QC
Beavercreek, OH
Bee Cave, TX
Bellevue, WA
Bellingham, WA
Bellingham, WA
Belmont, CA
Bethel Park, PA
Bethesda, MD
Bethesda, MD
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,930
—
—
—
—
—
—
—
—
—
—
—
$
2,144
170
8,280
4,244
1,136
473
710
1,129
480
1,660
8,385
—
788
2,058
2,100
880
1,560
4,200
4,960
5,532
6,695
3,420
2,356
4,874
2,696
790
5,566
1,149
981
1,820
2,800
1,500
—
—
1,626
—
—
$
12,549
6,203
50,914
25,187
10,522
4,446
6,290
10,270
16,639
37,395
31,198
2,338
6,283
14,914
20,603
9,520
21,413
74,850
29,881
17,823
55,113
18,853
37,710
32,304
11,876
29,436
50,952
17,484
11,187
21,084
19,004
19,861
—
35,300
12,947
45,309
—
$
1,178
1,079
411
4,252
806
804
1,159
116
1,893
3,860
15,809
1,742
1,098
3,825
1,872
2,717
853
1,744
8,525
173
13,868
2,820
1,776
10,899
1,321
1,366
6,670
2,113
—
727
2,734
1,920
18,529
2,576
—
1,395
69,551
$
2,296
176
8,280
4,700
1,136
527
710
1,146
486
1,660
8,393
76
863
2,080
2,206
885
1,574
4,200
5,499
5,532
7,468
3,787
2,395
5,411
2,888
886
6,175
1,310
981
1,832
2,816
1,507
1,290
178
1,626
3
3,513
$
13,575
7,276
51,325
28,983
11,328
5,196
7,449
10,369
18,526
41,255
46,999
4,004
7,306
18,717
22,369
12,232
22,252
76,594
37,867
17,996
68,208
21,306
39,447
42,666
13,005
30,706
57,013
19,436
11,187
21,799
21,722
21,774
17,239
37,698
12,947
46,701
66,038
1,478
2,233
3,881
7,942
1,371
1,213
4,147
1,241
5,658
12,160
18,499
550
2,015
12,682
5,546
6,580
4,204
12,324
10,118
62
17,976
3,945
10,183
12,448
1,413
7,788
14,248
6,210
345
3,286
6,821
6,629
6
10,196
775
11,970
3,225
2015
2010
2016
2012
2019
2015
2003
2016
2010
2012
2017
2018
2013
1997
2014
1999
2014
2015
2012
2020
2012
2014
2013
2013
2015
2013
2013
2013
2019
2016
2013
2010
2020
2013
2019
2013
2016
2017
1999
2018
2009
2013
1974
1986
2012
1999
2000
1992
1992
1991
1999
2000
1998
2013
2014
2009
2019
2005
2012
2002
2006
2017
2009
2009
2008
2020
2014
1998
1996
1999
2002
2019
2009
2018
Address
Banbury Road
151 Woodham Dr.
5550 Cardinal Place
295 Hale Road
1880 Sweet Home Road
4567 Bath Road
311 Simpson Rd.
1275 SW State Street
11825 Apple Valley Rd.
1250 West Pioneer Parkway
900 N Taylor Street
900 N Taylor Street
15 Arthur Street
1460 S Johnson Ferry Rd.
1000 Lenox Park Blvd NE
12429 Scofield Farms Dr.
11330 Farrah Lane
4310 Bee Caves Road
14 - 16 London Road
2000 Carlton Hollow Way
Croydon Lane
Grove Road
404 King George Road
111 Burgess Road
Clarks Way, Rush Hill
9351 Siegen Lane
30-34 Station Road
505 Elm Avenue
2475 Lillian Lane
14058 A Bee Cave Parkway
15928 NE 8th Street
4415 Columbine Dr.
848 W Orchard Dr
1010 Alameda de Las Pulgas
631 McMurray Road
8300 Burdett Road
4925 Battery Lane
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing Operating:
Bethesda, MD
Bethesda, MD
Birmingham, UK
Birmingham, UK
Birmingham, UK
Blainville, QC
Bloomfield Hills, MI
Boca Raton, FL
Boise, ID
Borehamwood, UK
Bothell, WA
Boulder, CO
Bournemouth, UK
Braintree, MA
Brampton, ON
Brandon, MS
Bremerton, WA
Brentwood, UK
Brick, NJ
Brick, NJ
Bridgewater, NJ
Brockport, NY
Brockville, ON
Brookfield, WI
Broomfield, CO
Brossard, QC
Buckingham, UK
Buffalo Grove, IL
Burbank, CA
Burbank, CA
Burke, VA
Burleson, TX
Burlingame, CA
Burlington, ON
Burlington, MA
Burlington, WA
Burlington, WA
Bushey, UK
Calgary, AB
Calgary, AB
Calgary, AB
Calgary, AB
Calgary, AB
(Dollars in thousands)
—
—
—
—
—
—
—
32,270
—
—
—
—
—
—
40,728
—
—
—
—
—
—
—
4,301
—
—
10,233
—
—
—
18,476
—
—
—
17,594
—
—
—
—
10,958
12,398
9,876
21,132
24,841
—
—
4
1,480
2,807
2,077
2,000
6,565
2,220
5,367
1,350
2,994
5,527
—
10,196
1,220
—
8,537
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
45
212
19,646
13,014
11,313
8,902
35,662
111,247
18,881
41,937
13,439
27,458
42,547
41,290
59,989
10,241
—
45,869
17,372
17,125
48,201
23,355
7,445
12,830
44,547
31,854
13,880
49,129
43,466
50,817
—
10,437
62,786
19,311
34,354
15,030
7,622
36,482
37,415
41,179
38,971
28,983
36,776
893
926
148
1,799
2,156
1,648
1,437
26,328
1,830
6,100
6,986
2,490
6,334
1,282
5,359
867
26,732
6,786
1,797
5,933
2,992
142
1,110
227
14,643
3,463
2,521
4,325
4,846
4,315
52,550
702
141
2,676
1,671
915
568
3,763
4,441
4,674
4,837
4,317
5,754
—
—
152
1,639
3,108
2,340
2,133
6,991
2,220
5,983
1,827
3,064
6,143
100
10,906
1,220
2,417
9,454
1,213
695
1,774
1,642
533
1,300
10,140
5,813
3,327
2,850
4,940
3,610
2,575
3,150
—
1,433
2,578
877
768
13,594
2,481
3,049
3,452
3,718
2,595
938
1,138
19,646
14,654
13,168
10,287
36,966
137,149
20,711
47,421
19,948
29,878
48,265
42,472
64,638
11,108
24,315
51,738
19,126
23,053
51,149
23,355
8,506
13,057
53,190
35,003
16,053
53,454
48,312
55,132
49,975
11,139
62,927
21,863
35,890
15,945
8,190
39,341
41,627
45,597
43,478
33,013
42,320
351
642
5,292
1,668
1,466
3,589
9,457
28,424
2,419
12,648
4,434
9,331
12,456
11,224
14,535
2,945
7
5,881
5,383
5,412
13,166
4,552
1,754
2,511
20,993
8,694
3,035
13,701
13,352
8,536
2,496
1,986
8,886
5,769
9,969
1,833
1,090
2,890
11,250
12,073
11,351
7,963
8,175
2013
2013
2013
2015
2015
2013
2013
2018
2019
2012
2015
2013
2013
2013
2015
2010
2020
2016
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
2009
2009
2006
2016
2016
2008
2009
1994
1999
2003
1988
2003
2008
2007
2009
1999
1999
2013
1998
1999
1999
1999
1996
2013
2009
1989
1883
2003
2002
1985
2018
2014
2015
1990
2005
1999
1996
2018
2003
1998
1998
1989
2006
8300 Burdett Road
8300 Burdett Road
5 Church Road, Edgbaston
47 Bristol Road South
134 Jockey Road
50 des Chateaux Boulevard
6790 Telegraph Road
6343 Via De Sonrise Del Sur
10250 W Smoke Ranch Drive
Edgwarebury Lane
10605 NE 185th Street
3955 28th Street
42 Belle Vue Road
618 Granite Street
100 Ken Whillans Drive
140 Castlewoods Blvd
966 Oyster Bay Ct
London Road
515 Jack Martin Blvd
1594 Route 88
2005 Route 22 West
90 West Avenue
1026 Bridlewood Drive
1105 Davidson Road
400 Summit Blvd
2455 Boulevard Rome
Church Street
500 McHenry Road
455 E. Angeleno Avenue
2721 Willow Street
9617 Burke Lake Road
621 Old Highway 1187
1818 Trousdale Avenue
500 Appleby Line
24 Mall Road
410 S Norris St
112 / 210 North Skagit Street
Elton House, Elton Way
20 Promenade Way SE
80 Edenwold Drive NW
150 Scotia Landing NW
9229 16th Street SW
2220-162nd Avenue SW
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing Operating:
Camberley, UK
Camberley, UK
Camillus, NY
Cardiff, UK
Cardiff by the Sea, CA
Carmichael, CA
Carol Stream, IL
Carrollton, TX
Cary, NC
Cary, NC
Cedar Hill, TX
Cedar Park, TX
Cerritos, CA
Charlottesville, VA
Chatham, ON
Chelmsford, MA
Chertsey, UK
Chesterfield, MO
Chesterton, IN
Chorleywood, UK
Chula Vista, CA
Church Crookham, UK
Cincinnati, OH
Citrus Heights, CA
Claremont, CA
Clay, NY
Cleburne, TX
Cohasset, MA
Colleyville, TX
Colorado Springs, CO
Colts Neck, NJ
Columbus, IN
Conroe, TX
Coos Bay, OR
Coos Bay, OR
Coquitlam, BC
Crystal Lake, IL
Dallas, TX
Decatur, GA
Denver, CO
Denver, CO
Denver, CO
Denver, CO
—
—
—
—
35,133
24,155
—
—
—
—
—
—
—
—
382
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,721
—
—
—
—
—
—
—
2,654
9,974
2,071
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
2,980
5,636
2,072
2,591
1,750
2,300
2,430
1,316
520
2,485
1,050
800
780
610
980
—
—
3,047
875
6,330
—
1,450
2,910
5,402
—
5,736
39,168
11,149
12,566
64,711
41,959
55,048
31,444
45,240
70,008
—
15,664
27,494
91,468
12,462
10,951
25,886
48,366
37,496
43,191
22,163
14,215
11,287
31,876
9,928
10,734
5,369
26,147
17,082
14,756
14,733
3,190
7,771
—
—
24,567
12,461
114,794
—
19,389
35,838
105,307
—
20,037
3,791
766
3,576
5,313
1,935
4,076
1,513
986
10,053
26,503
775
7,051
17,155
4,231
4,744
3,241
1,684
1,246
8,343
1,506
2,512
79
2,353
2,019
734
7
2,174
53
2,060
3,216
—
27
9,416
12,151
3,352
1,678
2,606
31,336
4,606
6,259
8,008
24,301
5,947
10,684
2,071
3,559
5,880
2,440
1,730
4,280
742
6,155
1,958
1,750
—
4,651
1,272
1,123
10,247
1,917
2,980
6,268
2,186
2,890
1,750
2,300
2,515
1,316
520
2,500
1,050
1,034
1,269
610
980
864
1,792
3,344
971
6,330
1,946
1,450
2,910
5,402
1,989
22,480
42,249
11,915
15,774
70,024
43,894
59,124
32,957
46,224
80,018
24,545
16,439
34,545
108,623
16,519
15,612
28,446
49,990
38,742
50,902
23,555
16,428
11,366
34,229
11,862
11,468
5,376
28,306
17,135
16,582
17,460
3,190
7,798
8,552
10,359
27,622
14,043
117,400
29,390
23,995
42,097
113,315
22,312
2,847
4,098
1,442
4,779
20,409
2,893
16,036
6,058
10,734
13,977
127
1,929
8,444
18,492
4,229
5,392
2,645
12,277
216
14,586
6,264
3,855
723
10,753
3,635
1,357
1,960
7,753
1,848
4,791
4,808
940
2,423
5
6
8,403
4,359
20,125
8,285
5,701
11,184
10,003
153
2014
2016
2019
2013
2011
2019
2012
2013
2013
2018
2020
2016
2016
2018
2015
2003
2015
2013
2020
2013
2013
2014
2019
2010
2013
2019
2006
2013
2016
2013
2010
2010
2009
2020
2020
2013
2013
2015
2013
2012
2012
2019
2020
2016
2017
2016
2007
2009
2014
2001
2010
2009
1999
2020
2015
2002
1991
1965
1997
2018
2001
2019
2007
2003
2014
2019
1997
2001
2014
2007
1998
2013
2001
2002
1998
2010
1996
2006
1990
2001
2013
1998
1997
2007
2014
2017
Fernhill Road
Pembroke Broadway
3877 Milton Avenue
127 Cyncoed Road
3535 Manchester Avenue
4717 Engle Road
545 Belmont Lane
2105 North Josey Lane
1206 West Chatham Street
300 Kildaire Woods Drive
1240 East Pleasant Run
800 C-Bar Ranch Trail
11000 New Falcon Way
2610 Barracks Road
25 Keil Drive North
4 Technology Dr.
Bittams Lane
1880 Clarkson Road
700 Dickinson Rd
High View, Rickmansworth Road
3302 Bonita Road
2 Bourley Road
732 Clough Pike Road
7418 Stock Ranch Rd.
2053 North Towne Avenue
8547 Morgan Road
402 S Colonial Drive
125 King Street (Rt 3A)
8100 Precinct Line Road
2105 University Park Boulevard
3 Meridian Circle
2564 Foxpointe Dr.
903 Longmire Road
192 Norman Ave.
1855 Ocean Blvd SE
1142 Dufferin Street
751 E Terra Cotta Avenue
3535 N Hall Street
920 Clairemont Avenue
4901 South Monaco Street
8101 E Mississippi Avenue
1500 Little Raven St
2979 Uinta Street
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing
Operating:
Dix Hills, NY
Dollard-Des-Ormeaux, QC
Dresher, PA
Dublin, OH
East Amherst, NY
East Meadow, NY
East Setauket, NY
Eastbourne, UK
Edgbaston, UK
Edgewater, NJ
Edison, NJ
Edmonds, WA
Edmonds, WA
Edmonton, AB
Edmonton, AB
El Dorado Hills, CA
Encino, CA
Englishtown, NJ
Epsom, UK
Erie, PA
Esher, UK
Everett, WA
Fairfield, NJ
Fairfield, CA
Fairfield, OH
Fareham, UK
Florence, AL
Flossmoor, IL
Folsom, CA
Fort Wayne, IN
Fort Worth, TX
Fort Worth, TX
Fort Worth, TX
Fort Worth, TX
Fremont, CA
Fresno, CA
Frome, UK
Fullerton, CA
Gahanna, OH
Gardnerville, NV
Gig Harbor, WA
Gilbert, AZ
Glen Cove, NY
(Dollars in thousands)
—
—
8,380
—
—
—
—
—
—
—
—
—
—
7,871
10,332
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
23,376
—
—
—
—
—
14,200
—
3,808
1,957
1,900
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
20,159
1,455
5,783
—
3,120
1,460
1,416
3,408
353
1,292
1,490
—
7,131
—
2,080
1,740
3,400
2,459
2,720
1,964
772
1,143
1,560
2,160
4,594
39,014
14,431
10,664
25,345
10,765
45,991
37,354
33,744
13,969
25,047
32,314
24,449
—
29,819
37,293
52,112
46,255
12,520
34,803
8,324
48,361
—
43,868
14,040
12,627
17,970
13,049
9,496
32,754
—
52,680
—
27,888
19,799
25,300
33,023
14,813
19,989
11,214
10,831
15,947
28,246
35,236
2,279
1,878
1,361
157
863
2,003
2,102
4,798
2,142
1,896
3,634
9,428
30,883
4,079
4,931
156
5,986
2,335
6,798
792
10,235
9,923
2,447
5,375
294
2,900
1,243
2,112
101
46,548
2,365
21,446
5,314
766
6,190
1,755
2,569
1,277
1,920
2,203
2,347
2,255
2,432
3,959
2,185
1,914
1,169
1,626
127
4,986
4,604
3,012
4,564
1,943
1,765
2,891
1,782
2,257
5,190
5,040
860
22,324
1,455
6,427
638
3,255
1,460
1,416
3,800
385
1,339
1,490
3,637
7,131
2,538
2,080
1,740
3,456
2,459
3,012
1,998
787
1,164
1,583
2,206
4,643
41,142
16,081
12,011
25,502
11,628
47,936
39,390
38,083
15,819
26,940
35,897
33,762
27,992
33,705
42,030
52,268
52,241
14,685
39,436
9,116
57,952
9,285
46,180
19,415
12,921
20,478
14,260
11,561
32,855
42,911
55,045
18,908
33,202
20,565
31,434
34,778
17,090
21,232
13,119
13,013
18,271
30,455
37,619
10,964
5,908
4,397
3,903
1,501
12,498
10,360
10,244
1,792
7,439
11,562
5,802
6
9,321
13,320
1,762
13,879
4,353
4,528
1,292
14,454
4
12,090
7,797
991
4,373
4,370
3,959
6,212
183
5,260
529
9,741
3,011
11,995
2,543
3,321
5,885
3,672
9,346
5,298
10,058
11,444
2013
2013
2013
2016
2019
2013
2013
2013
2014
2013
2013
2015
2020
2013
2013
2017
2012
2010
2016
2019
2013
2020
2013
2002
2019
2014
2010
2013
2015
2020
2019
2020
2012
2016
2005
2019
2014
2013
2013
1998
2010
2013
2013
2003
2008
2006
2015
2015
2002
2002
2008
2015
2000
1996
1976
2000
1999
1968
2019
2003
1997
2014
2013
2006
1998
1998
1998
2018
2012
1999
2000
2014
2018
2017
2020
2001
2014
1987
2014
2012
2008
1998
1999
1994
2008
1998
337 Deer Park Road
4377 St. Jean Blvd
1650 Susquehanna Road
4175 Stoneridge Lane
8040 Roll Road
1555 Glen Curtiss Boulevard
1 Sunrise Drive
6 Upper Kings Drive
Speedwell Road
351 River Road
1801 Oak Tree Road
21500 72nd Avenue West
180 2nd Ave S
103 Rabbit Hill Court NW
10015 103rd Avenue NW
2020 Town Center West Way
15451 Ventura Boulevard
49 Lasatta Ave
450-458 Reigate Road
4400 East Lake Road
42 Copsem Lane
524 75th St SE
47 Greenbrook Road
3350 Cherry Hills St.
520 Patterson Boulevard
Redlands Lane
3275 County Road 47
19715 Governors Highway
1574 Creekside Drive
3715 Union Chapel Rd
3401 Amador Drive
3401 Amador Drive
2151 Green Oaks Road
7001 Bryant Irvin Road
2860 Country Dr.
5605 North Gates Avenue
Welshmill Lane
2226 North Euclid Street
775 East Johnstown Road
1565-A Virginia Ranch Rd.
3213 45th St. Court NW
580 S. Gilbert Road
39 Forest Avenue
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing Operating:
Glenview, IL
Golden Valley, MN
Granbury, TX
Grimsby, ON
Grosse Pointe Woods, MI
Grosse Pointe Woods, MI
Grove City, OH
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
Hindhead, UK
Hingham, MA
Holbrook, NY
Horley, UK
Houston, TX
Houston, TX
Houston, TX
Houston, TX
Howell, NJ
Huntington Beach, CA
Independence, MO
Jacksonville, FL
Johns Creek, GA
Johnson City, NY
Kanata, ON
Kelowna, BC
Kennebunk, ME
Kenner, LA
Kennett Square, PA
Kingston, ON
Kingston upon Thames, UK
Kingwood, TX
Kingwood, TX
Kirkland, WA
—
3,600
—
—
—
—
36,420
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7,666
—
—
—
—
—
—
4,965
—
—
—
12,018
—
—
—
—
2,090
1,520
2,040
636
950
1,430
3,575
5,361
890
520
967
1,163
4,172
721
1,880
1,190
3,567
2,820
2,250
17,852
1,440
3,957
2,332
3,830
1,040
1,750
960
1,066
3,808
1,550
6,550
1,580
1,407
1,689
2,688
2,700
1,100
1,050
1,030
33,063
480
1,683
1,880
69,288
33,513
30,670
5,617
13,662
31,777
85,764
56,494
27,931
16,363
10,014
11,968
26,035
9,920
33,993
11,600
13,422
15,832
25,313
48,645
32,292
35,337
12,144
55,674
31,965
15,603
15,420
21,577
31,172
14,441
29,454
23,285
11,862
28,670
13,647
30,204
10,036
22,946
11,416
46,696
9,777
24,207
4,315
4,924
1,609
746
947
913
1,284
966
7,236
2,610
641
821
—
3,658
446
2,745
1,144
1,771
890
1,626
8,307
408
2,406
2,413
8,871
6,602
1,672
—
1,481
2,780
—
—
1,332
876
2,552
2,552
5,668
3,132
918
1,968
9,565
999
2,495
2,248
2,090
1,634
2,040
694
950
1,435
3,498
5,940
935
527
967
1,163
4,632
721
1,904
1,253
3,821
2,820
2,271
19,769
1,444
4,219
2,591
3,830
1,040
1,750
960
1,154
3,931
1,550
6,550
1,588
1,407
1,778
2,935
3,304
1,100
1,104
1,165
36,610
480
1,683
1,880
74,212
35,008
31,416
6,506
14,575
33,056
86,807
63,151
30,496
16,997
10,835
11,968
29,233
10,366
36,714
12,681
14,939
16,722
26,918
55,035
32,696
37,481
14,298
64,545
38,567
17,275
15,420
22,970
33,829
14,441
29,454
24,609
12,738
31,133
15,952
35,268
13,168
23,810
13,249
52,714
10,776
26,702
6,563
20,009
8,973
8,060
1,441
3,693
8,353
6,373
15,926
7,606
2,848
1,368
957
7,764
1,051
9,369
4,488
1,582
3,511
7,965
6,302
6,220
9,723
3,379
18,811
9,597
2,155
8,350
6,161
10,425
1,026
1,395
6,496
1,556
8,426
4,895
14,599
10,562
6,138
2,524
5,883
3,084
4,596
2,334
2012
2013
2011
2015
2013
2013
2018
2013
2013
2011
2019
2019
2013
2019
2010
2013
2015
2011
2013
2016
2015
2013
2014
2012
2012
2016
2011
2010
2013
2019
2019
2013
2019
2012
2013
2013
1998
2010
2015
2016
2011
2017
2003
2001
2005
2009
1991
2006
2005
2017
2006
2002
2015
2009
2019
2006
1998
2000
2008
2017
2012
2005
2012
2012
2001
2014
1998
1999
2014
1995
2007
2004
2019
2019
2009
2013
2005
1999
2006
2000
2008
1983
2014
1999
2012
1996
2200 Golf Road
4950 Olson Memorial Highway
100 Watermark Boulevard
84 Main Street East
1850 Vernier Road
21260 Mack Avenue
3717 Orders Road
Astolat Way, Peasmarsh
500 North Hunt Club Road
132 Warwick Road
4600 Southwestern Blvd
1740 Eden Park Drive
22-26 Church Road
8915 S.E. Monterey
731 Old Buck Lane
1555 West Horizon Ridge Parkway
The Row Lane End
1651 Richfield Avenue
1601 Green Bay Road
Portsmouth Road
1 Sgt. William B Terry Drive
320 Patchogue Holbrook Road
Court Lodge Road
2929 West Holcombe Boulevard
505 Bering Drive
10120 Louetta Road
10225 Cypresswood Dr
100 Meridian Place
7401 Yorktown Avenue
19301 East Eastland Ctr Ct
10520 Validus Drive
11405 Medlock Bridge Road
1035 Anna Maria Drive
70 Stonehaven Drive
863 Leon Avenue
One Huntington Common Drive
1600 Joe Yenni Blvd
301 Victoria Gardens Dr.
181 Ontario Street
Coombe Lane West
22955 Eastex Freeway
24025 Kingwood Place
6505 Lakeview Dr.
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing Operating:
Kitchener, ON
Kitchener, ON
Kitchener, ON
Klamath Falls, OR
La Palma, CA
Lackawanna, NY
Lafayette Hill, PA
Laguna Hills, CA
Laguna Woods, CA
Laguna Woods, CA
Lake Havasu City, AZ
Lake Zurich, IL
Lancaster, CA
Lancaster, NY
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Laval, QC
Laval, QC
Lawrenceville, GA
Leatherhead, UK
Leawood, KS
Lecanto, FL
Lenexa, KS
Lincroft, NJ
Linwood, NJ
Litchfield, CT
Little Neck, NY
Livingston, NJ
Lombard, IL
London, UK
London, UK
London, UK
London, ON
London, ON
London, ON
Longueuil, QC
Longview, TX
Lorain, OH
Los Angeles, CA
Los Angeles, CA
Los Angeles, CA
Louisville, KY
(Dollars in thousands)
1,281
3,253
12,138
—
—
—
—
—
—
—
—
—
—
—
—
—
—
21,939
4,167
—
—
—
—
9,700
—
—
—
—
—
17,010
—
—
—
—
10,985
—
8,891
—
—
56,950
—
—
—
708
1,093
1,341
—
2,950
1,015
1,750
12,820
11,280
9,150
—
1,470
700
1,262
—
—
—
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
610
1,394
—
3,540
—
2,420
2,744
4,454
13,939
—
16,591
5,280
11,848
75,926
76,485
57,842
—
9,830
15,295
11,154
—
—
—
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
5,520
12,960
114,438
19,007
28,050
20,816
285
1,248
5,013
12,961
1,312
478
2,427
19,497
13,280
12,329
2,126
2,867
2,173
976
46,049
15,509
25,440
6,328
1,760
833
2,557
5,960
481
1,511
1,933
2,050
11,751
3,204
1,494
1,884
2,450
2,029
77,904
1,414
3,077
2,339
4,942
6
23
8,201
3,979
6,009
3,043
695
1,186
1,498
1,335
2,996
1,015
1,867
12,820
11,280
9,150
364
1,470
712
1,262
5,144
1,263
2,201
2,250
2,548
1,529
5,016
5,610
218
927
131
861
1,292
3,358
8,017
2,218
3,471
8,238
24,836
1,105
2,139
1,697
4,411
610
1,394
—
3,540
71
2,420
3,042
5,609
18,795
11,626
17,857
5,758
14,158
95,423
89,765
70,171
1,762
12,697
17,456
12,130
40,905
14,246
23,239
38,344
7,563
29,807
20,058
35,333
7,363
27,661
21,769
23,973
29,607
41,657
45,901
61,739
12,127
18,279
53,068
9,524
19,892
15,718
28,234
5,526
12,983
122,639
22,986
33,988
23,859
992
2,804
4,293
9
4,940
826
5,021
21,737
18,637
14,664
3
4,766
5,756
1,611
2,514
806
1,352
5,879
1,105
8,040
1,982
9,682
3,089
7,971
5,983
6,397
6,509
10,809
5,148
15,787
2,483
2,248
1,047
2,117
4,256
3,060
6,240
2,022
763
34,914
6,560
5,570
6,878
2013
2013
2016
2020
2013
2019
2013
2016
2016
2016
2020
2011
2010
2019
2020
2020
2020
2018
2018
2013
2015
2012
2004
2013
2013
2010
2010
2010
2015
2013
2014
2015
2017
2015
2015
2015
2015
2006
2019
2011
2012
2016
2012
1979
1964
2003
2000
2003
2002
1998
1988
1987
1986
2009
2007
1999
2011
1999
2001
1997
2005
1989
2008
2017
1999
1986
2006
2002
1997
1998
2000
2017
2009
2012
2016
2020
1989
1953
1950
1989
2007
2018
2009
2001
2006
1999
164 - 168 Ferfus Avenue
290 Queen Street South
1250 Weber Street E
615 Washburn Way
5321 La Palma Avenue
133 Orchard Place
429 Ridge Pike
24903 Moulton Parkway
24441 Calle Sonora
24962 Calle Aragon
320 Lake Havasu Ave. N,
550 America Court
43051 15th St. West
18 Pavement Road
1600 S Valley View Road
3300 Winterhaven Street
3210 S Sandhill Road
269, boulevard Ste. Rose
263, boulevard Ste. Rose
1375 Webb Gin House Road
Rectory Lane
4400 West 115th Street
2341 W. Norvell Bryant Hwy.
15055 West 87th Street Parkway
734 Newman Springs Road
432 Central Ave
19 Constitution Way
5515 Little Neck Pkwy.
369 E Mt Pleasant Avenue
2210 Fountain Square Dr
71 Hatch Lane
6 Victoria Drive
39-41 East Hill, Wandsworth
760 Horizon Drive
1486 Richmond Street North
81 Grand Avenue
70 Rue Levis
311 E Hawkins Pkwy
5401 North Pointe Pkwy
10475 Wilshire Boulevard
2051 N. Highland Avenue
4061 Grand View Boulevard
4600 Bowling Boulevard
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing
Operating:
Louisville, KY
Louisville, CO
Louisville, CO
Louisville, CO
Louisville, CO
Louisville, CO
Lynnfield, MA
Mahwah, NJ
Malvern, PA
Mansfield, TX
Manteca, CA
Maple Ridge, BC
Marieville, QC
Markham, ON
Marlboro, NJ
Marlow, UK
Marysville, WA
McKinney, TX
Medicine Hat, AB
Medina, OH
Melbourne, FL
Melville, NY
Memphis, TN
Menomonee Falls, WI
Mesa, AZ
Metairie, LA
Mill Creek, WA
Milton, ON
Minnetonka, MN
Mission Viejo, CA
Mississauga, ON
Mississauga, ON
Mississauga, ON
Mississauga, ON
Missoula, MT
Mobberley, UK
Molalla, OR
Monterey, CA
Montgomery, MD
Montgomery Village, MD
Montreal-Nord, QC
Moorestown, NJ
Moose Jaw, SK
13,650
—
—
—
—
—
—
—
—
—
—
8,171
6,097
50,027
—
—
—
—
10,235
—
—
—
—
—
—
14,200
—
19,529
—
13,280
8,313
2,802
26,739
5,998
—
—
—
—
—
—
11,450
—
1,785
1,600
1,939
1,156
2,584
1,391
2,332
3,165
1,605
1,651
660
1,300
2,875
1,278
3,727
2,222
9,068
620
1,570
1,432
1,708
7,070
4,280
1,800
1,020
950
725
10,150
4,542
920
6,600
1,602
873
3,649
2,548
550
5,146
—
6,440
6,482
3,530
4,407
2,060
582
20,326
32,639
27,170
52,320
15,783
44,245
45,200
27,249
17,194
5,251
12,125
11,922
12,113
48,939
14,888
39,720
4,780
7,389
14,141
12,049
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
15,158
7,490
26,665
—
29,101
83,642
18,246
23,719
51,628
12,973
1,150
1,769
—
6,311
682
2,681
2,821
1,035
2,407
22
4,040
2,060
1,360
5,609
1,619
3,958
2,520
10
1,245
457
44,815
7,588
2,960
2,307
3,872
1,073
4,074
4,439
1,269
8,559
2,245
703
4,763
3,882
919
4,409
5,468
2,865
13,251
7,178
10,196
7,445
2,051
1,600
1,939
1,156
2,584
1,391
2,332
3,757
1,608
1,800
660
1,312
3,244
1,414
4,002
2,268
9,714
620
1,570
1,562
1,708
7,070
4,332
1,800
1,020
950
740
10,179
4,966
964
6,600
1,742
949
4,004
2,767
553
5,728
1,210
6,443
6,563
4,291
4,713
2,095
631
21,476
34,408
27,170
58,631
16,465
46,926
47,429
28,281
19,452
5,273
16,153
13,613
13,337
54,273
16,461
43,032
7,300
7,399
15,256
12,506
93,072
80,819
20,704
9,291
12,959
28,766
64,319
29,336
30,569
60,677
20,101
5,282
39,545
18,821
8,406
30,492
4,258
31,963
96,812
24,663
33,609
59,038
14,975
6,154
3,259
1,228
6,825
1,458
4,656
12,922
4,051
6,692
1,945
6,471
2,194
2,607
17,577
4,821
5,502
2,747
2,312
4,002
1,164
28,795
20,582
7,011
2,859
6,010
7,145
21,876
4,996
7,644
10,757
5,431
1,540
10,655
4,409
3,210
9,758
4
8,485
15,680
11,086
5,405
14,024
3,967
2013
2019
2019
2019
2019
2019
2013
2012
2013
2006
2005
2015
2015
2013
2013
2013
2003
2009
2015
2019
2007
2010
2012
2006
1999
2013
2010
2015
2013
2016
2013
2013
2015
2015
2005
2013
2020
2013
2018
2013
2018
2010
2013
2010
2008
2019
1999
1999
2004
2006
2015
1998
2007
1986
2009
2002
1981
2002
2014
1998
2010
1999
2017
2009
2001
1999
2007
2000
2009
1998
2012
2006
1998
1984
1978
1988
1989
1998
2007
1998
2009
1992
1993
1988
2000
2001
6700 Overlook Drive
1336 E Hecla Drive
1800 Plaza Drive
1855 Plaza Drive
282 McCaslin Blvd
1331 E Hecla Drive
55 Salem Street
15 Edison Road
324 Lancaster Avenue
2281 Country Club Dr
430 N. Union Rd.
12241 224th Street
425 rue Claude de Ramezay
7700 Bayview Avenue
3A South Main Street
210 Little Marlow Road
9802 48th Dr. N.E.
2701 Alma Rd.
223 Park Meadows Drive SE
699 North Huntington St
7300 Watersong Lane
70 Pinelawn Rd
6605 Quail Hollow Road
W128 N6900 Northfield Drive
7231 E. Broadway
3732 West Esplanade Ave. S
14905 Bothell-Everett Hwy
611 Farmstead Drive
18605 Old Excelsior Blvd.
27783 Center Drive
1130 Bough Beeches Boulevard
3051 Constitution Boulevard
1490 Rathburn Road East
85 King Street East
3620 American Way
Barclay Park, Hall Lane
835 E Main St
1110 Cass St.
3701 International Dr
19310 Club House Road
6700, boulevard Gouin Est
1205 N. Church St
425 4th Avenue NW
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing Operating:
Morton Grove, IL
Murphy, TX
Nacogdoches, TX
Naperville, IL
Naperville, IL
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
Outremont, QC
Overland Park, KS
Palestine, TX
Palo Alto, CA
(Dollars in thousands)
—
—
—
—
—
—
5,395
—
—
—
—
—
—
—
—
—
—
—
5,533
8,867
4,647
—
19,133
35,726
6,609
9,476
17,834
20,373
7,076
13,466
10,169
13,374
17,052
2,750
2,001
9,193
4,427
5,761
8,742
17,538
—
—
25,050
1,900
1,950
390
1,550
1,540
3,900
1,575
1,200
2,850
4,071
1,930
1,203
2,880
739
1,250
1,882
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
3,403
3,411
724
818
2,809
1,156
746
1,176
6,746
1,540
180
—
19,374
19,182
5,754
12,237
28,204
35,788
5,770
19,800
12,796
11,902
14,420
7,338
18,059
7,670
40,383
11,941
47,508
37,576
7,382
29,963
13,754
6,700
20,943
65,189
7,570
15,425
23,309
39,141
18,421
26,424
18,170
31,090
28,335
4,710
2,165
27,299
9,758
7,800
12,764
45,981
16,269
4,320
39,639
923
816
24
2,282
1,531
4,426
1,240
10,442
2,074
3,108
1,686
600
1,037
448
3,088
880
3,619
3,081
1,157
4,327
2,153
1,231
2,436
3,238
1,302
3,391
3,872
3,116
5,833
4,433
3,517
4,858
7,114
721
1,338
3,787
1,386
1,471
1,814
12,666
2,197
1,328
3,214
1,900
1,950
390
1,550
1,593
3,900
1,735
2,729
3,156
4,529
1,953
1,203
3,044
739
1,250
1,882
4,117
2,393
1,415
2,324
1,391
360
792
8,021
946
1,472
3,806
4,551
2,331
3,263
1,769
3,730
3,757
786
740
3,030
1,283
848
1,316
7,214
1,670
180
24
20,297
19,998
5,778
14,519
29,682
40,214
6,850
28,713
14,564
14,552
16,083
7,938
18,932
8,118
43,471
12,821
50,887
40,514
8,376
34,100
15,787
7,931
23,301
68,427
8,767
18,685
26,829
41,962
24,026
30,557
21,479
35,621
35,103
5,369
3,581
30,865
11,017
9,169
14,438
58,179
18,336
5,648
42,829
4,871
2,919
2,104
4,204
8,163
12,856
2,404
6,464
1,717
3,297
5,468
1,030
4,630
955
12,055
1,599
13,960
10,712
2,411
9,491
3,939
3,102
5,018
4,046
2,445
3,179
9,183
7,496
4,164
5,313
3,608
5,964
7,156
1,564
1,183
9,859
2,928
2,411
2,769
9,960
4,577
2,083
11,441
2010
2015
2006
2012
2013
2012
2015
2011
2015
2014
2013
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
2006
2013
2011
2012
2007
2013
2002
1999
1988
2009
2016
2011
2004
2005
2000
1998
2004
2017
1999
1997
1982
1994
1988
1998
2010
2018
1991
2001
1966
2005
1989
2008
2006
2009
2009
1995
1993
1998
1998
1999
1987
1976
1998
2005
2007
5520 N. Lincoln Ave.
304 West FM 544
5902 North St
1936 Brookdale Road
535 West Ogden Avenue
4206 Stammer Place
1 Mill Hill Road
2294 East Common Street
370 London Road
Jeddah Way
333 S. Newtown Street Rd.
705 Sandra Lane
12291 Newport Avenue
171 SW 6th Ave
1035 Madison Street
7420 Steubenville Pike
11889 Skyline Boulevard
2863 Hunter Mill Road
289 and 299 Randall Street
25 Lakeshore Road West
345 Church Street
1340 N. Washington Blv.
51 Riverside Gate
630 The City Drive South
649 King Street East
110 Berrigan Drive
2370 Carling Avenue
751 Peter Morand Crescent
1 Eaton Street
691 Valin Street
22 Barnstone Drive
990 Hunt Club Road
2 Valley Stream Drive
1345 Ogilvie Road
370 Kennedy Lane
43 Aylmer Avenue
1351 Hunt Club Road
140 Darlington Private
10 Vaughan Street
1000, avenue Rockland
9201 Foster
1625 W. Spring St.
2701 El Camino Real
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing
Operating:
Paramus, NJ
Paris, TX
Parma, OH
Paso Robles, CA
Peabody, MA
Pella, IA
Pembroke, ON
Pennington, NJ
Peoria, AZ
Pittsburgh, PA
Placentia, CA
Plainview, NY
Plano, TX
Plano, TX
Playa Vista, CA
Pleasanton, CA
Port Perry, ON
Port St. Lucie, FL
Portage, MI
Princeton, NJ
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, QC
Riviere-du-Loup, QC
Rocky Hill, CT
Rohnert Park, CA
Romeoville, IL
—
—
—
—
5,767
—
—
—
—
—
—
—
28,960
—
—
—
11,811
—
42,000
—
—
—
—
7,816
12,074
—
—
—
29,300
12,346
14,526
26,446
5,975
5,983
15,178
—
—
—
2,733
12,015
—
—
—
2,840
490
1,533
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
2,880
1,730
—
7,365
1,150
2,420
3,300
1,260
1,480
5,450
1,540
1,247
1,199
4,474
1,485
1,244
1,539
960
1,060
520
592
1,454
1,090
6,500
854
35,728
5,452
9,203
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
59,955
30,888
—
35,161
20,776
21,977
28,325
21,744
10,055
60,034
46,934
19,283
22,339
36,828
21,148
21,036
24,053
24,248
11,440
7,675
7,601
16,848
6,710
18,700
12,646
2,006
22
701
2,748
1,363
218
1,341
1,557
1,552
11,751
6,087
1,261
4,143
1,545
3,340
52,006
4,729
21,304
2,569
2,325
189
5,941
2,348
4,060
6,353
1,451
2,295
6,368
2,416
3,064
3,883
2,161
2,613
2,612
5,214
9,327
1,529
2,051
1,592
5,728
4,381
4,467
61,940
2,986
490
1,533
1,770
2,380
886
2,032
1,507
766
1,587
8,513
3,182
3,231
1,750
1,677
3,676
4,001
8,700
2,880
1,814
—
8,218
1,156
2,588
3,529
1,273
2,084
5,450
1,718
1,368
1,296
4,474
1,705
1,357
1,678
993
1,060
520
694
1,847
1,132
6,546
6,197
37,588
5,474
9,904
11,378
17,304
6,918
10,667
29,050
23,348
29,761
23,130
21,046
63,982
16,935
43,774
48,330
31,201
68,534
62,524
33,129
189
40,249
23,118
25,869
34,449
23,182
11,746
66,402
49,172
22,226
26,125
38,989
23,541
23,535
29,128
33,542
12,969
9,726
9,091
22,183
11,049
23,121
69,243
9,852
5,148
1,254
4,685
3,859
1,408
2,922
7,227
3,314
5,750
5,396
5,342
20,101
2,292
11,332
2,838
5,078
21,013
5,885
8,500
—
11,730
7,047
3,705
4,722
3,907
3,834
17,880
12,543
4,375
5,200
2,943
6,840
6,124
5,238
7,929
5,138
3,732
1,704
5,068
3,613
9,016
20,699
2013
2005
2019
2002
2013
2012
2012
2011
2018
2013
2016
2013
2013
2016
2013
2016
2015
2008
2019
2011
2020
2012
2010
2018
2018
2015
2013
2012
2013
2015
2015
2019
2013
2013
2015
2010
2004
2003
2015
2015
2003
2005
2006
1998
2006
2016
1998
1994
2002
1999
2000
2014
2009
1987
2001
2006
2014
2006
2017
2009
2010
2017
2001
2001
2005
1985
2000
1987
1999
2001
2004
2006
2004
2004
2017
1999
2004
1992
1999
1998
1997
1956
1993
1996
1986
2010
567 Paramus Road
750 N Collegiate Dr
11500 Huffman Road
1919 Creston Rd.
73 Margin Street
2602 Fifield Road
1111 Pembroke Street West
143 West Franklin Avenue
13391 N 94th Drive
900 Lincoln Club Dr.
1180 N Bradford Avenue
1231 Old Country Road
4800 West Parker Road
3690 Mapleshade Lane
5555 Playa Vista Drive
5700 Pleasant Hill Road
15987 Simcoe Street
10685 SW Stony Creek Way
3951 W. Milham Ave.
155 Raymond Road
775 Mt Lucas Road
21 Russell Hill Road
123 Fourth Ave. NW
795, rue Alain
650 and 700, avenue Murray
27 Woodvale Road
9519 Baseline Road
5701 Crestridge Road
648 Route 10 West
3100 - 22 Street
10 Inglewood Drive
2150 Bechelli Lane
3651 Albert Street
3105 Hillsdale Street
1801 McIntyre Street
36101 Seaside Blvd
5165 Summit Ridge Court
410 Orchard Park
35 des Cedres
230-235 rue Des Chenes
60 Cold Spring Rd.
4855 Snyder Lane
605 S Edward Dr.
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing
Operating:
Roseville, MN
Roseville, CA
Roswell, GA
Roswell, GA
Rowlett, TX
Sabre Springs, CA
Sacramento, CA
Sacramento, CA
Saint-Lambert, QC
Salem, OR
Salem, OR
Salinas, CA
Salisbury, UK
Salt Lake City, UT
San Antonio, TX
San Antonio, TX
San Antonio, TX
San Diego, CA
San Diego, CA
San Diego, CA
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
Santa Rosa, CA
Saskatoon, SK
Saskatoon, SK
Schaumburg, IL
Scottsdale, AZ
Scranton, PA
Seal Beach, CA
Seattle, WA
Seattle, WA
Seattle, WA
Selbyville, DE
Sevenoaks, UK
Severna Park, MD
Shelby Township, MI
(Dollars in thousands)
—
—
—
—
—
—
—
—
33,489
—
—
—
—
—
—
—
—
—
—
29,359
—
—
—
—
—
—
—
—
15,820
—
3,686
13,136
—
—
—
—
—
27,180
—
—
—
—
13,180
1,540
3,300
1,107
2,080
1,610
—
940
1,300
10,259
—
—
5,110
2,720
1,360
6,120
5,045
11,686
5,810
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
10,670
1,150
750
6,181
—
1,040
35,877
41,652
9,627
6,486
21,254
—
14,781
23,394
61,903
—
—
41,424
15,269
19,691
28,169
58,048
69,620
63,078
27,164
40,607
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
10,562
72,954
9,350
37,291
19,887
25,912
40,240
67,623
26,344
1,318
6,978
3,277
3,577
223
46,910
1,759
1,761
9,649
11,341
10,531
11,019
2,299
946
2,656
3,275
3,634
4,276
1,576
1,920
13,785
10,544
1,204
4,443
5,369
4,109
10,149
1,541
1,166
3,761
1,961
2,564
1,454
1,505
695
3,165
2,031
2,007
2,790
964
8,029
6,130
1,477
1,648
3,300
1,114
2,380
1,610
3,726
952
1,369
11,208
916
1,227
5,150
3,012
1,360
6,120
5,045
11,686
5,810
3,016
4,179
5,920
11,800
3,165
3,280
11,966
1,860
8,768
2,220
5,266
2,292
1,064
1,568
2,497
2,500
875
6,271
5,199
10,700
1,153
769
6,844
44
1,110
37,087
48,630
12,897
9,763
21,477
43,184
16,528
25,086
70,603
10,425
9,304
52,403
17,276
20,637
30,825
61,323
73,254
67,354
28,724
42,527
105,424
87,758
16,725
51,266
32,950
31,261
82,304
9,895
29,490
29,992
15,783
19,987
24,280
5,395
11,257
76,052
11,372
39,268
22,674
26,857
47,606
73,709
27,751
9,191
9,235
8,730
2,377
176
2,326
4,994
6,572
18,472
5
5
10,619
3,176
7,187
7,825
8,159
6,766
20,890
7,069
2,939
20,404
16,961
4,715
14,267
6,795
5,333
15,770
3,551
7,717
5,429
3,927
4,858
7,172
1,692
1,288
23,111
4,231
14,211
4,109
7,050
14,328
12,815
7,250
2013
2016
1997
2012
2020
2016
2010
2013
2015
2020
2020
2016
2014
2011
2010
2017
2019
2012
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
2002
2000
1999
1997
2019
2017
1978
2004
1989
1999
1997
1990
2013
1986
2011
2015
2016
2001
2003
2017
1998
1923
2005
2002
2002
2001
1992
1997
2004
2001
1999
2004
2001
1998
2014
2004
1962
2005
1995
2008
2009
1997
2006
2555 Snelling Avenue, North
5161 Foothills Boulevard
655 Mansell Rd.
75 Magnolia Street
4205-4209 Dalrock Rd
12515 Springhurst Drive
6350 Riverside Blvd
345 Munroe Street
1705 Avenue Victoria
4452 Lancaster Dr NE
4050 12th Street Cutoff SE
1320 Padre Drive
Shapland Close
1430 E. 4500 S.
2702 Cembalo Blvd
11300 Wild Pine
6870 Heuermann Road
13075 Evening Creek Drive S
810 Turquoise Street
955 Grand Ave
1550 Sutter Street
1601 19th Avenue
8332 Huntington Drive
500 S Winchester Boulevard
4855 San Felipe Road
111 Merrydale Road
9199 Fircrest Lane
5455 Glenridge Drive NE
1312 15th Street
4225 Wayvern Drive
220 24th Street East
1622 Acadia Drive
790 North Plum Grove Road
9410 East Thunderbird Road
1651 Dickson Avenue
3850 Lampson Avenue
11501 15th Ave NE
805 4th Ave N
11039 17th Avenue
21111 Arrington Dr
64 - 70 Westerham Road
43 W McKinsey Road
46471 Hayes Road
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing
Operating:
Sherman, TX
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
South Jordan, UT
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
Summit, NJ
Sun City West, AZ
Sunninghill, UK
Sunnyvale, CA
Surrey, BC
Surrey, BC
Sutton, UK
Suwanee, GA
Sway, UK
Swift Current, SK
Sylvania, OH
Syracuse, NY
Tacoma, WA
Taylor, PA
The Woodlands, TX
Toms River, NJ
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9,268
5,219
4,057
—
—
—
—
—
—
—
—
—
—
—
—
6,069
15,070
—
—
—
1,624
—
—
—
—
—
—
700
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
4,416
960
4,272
3,080
1,250
11,632
5,420
3,605
4,552
4,096
1,560
4,145
492
1,205
1,418
4,170
1,910
480
1,610
5,221
38,116
56,570
—
16,664
51,406
43,297
26,053
10,585
42,155
18,400
21,890
—
56,655
25,064
25,342
17,863
11,765
17,397
25,018
5,983
10,904
23,980
25,307
31,176
31,423
60,493
14,152
21,778
42,233
41,682
18,818
22,338
14,532
11,538
15,508
10,119
11,988
11,617
73,377
11,996
12,379
34,627
7
2,750
8,847
64,377
1,938
8,517
9,048
3,942
2,023
6,442
4,807
3,292
51,165
7,624
2,502
2,298
2,257
900
2,258
3,888
1,718
656
730
1,401
2,392
1,184
6,546
506
1,973
4,116
3,191
3,107
3,865
3,309
1,672
3,024
1,412
—
863
17,896
—
663
1,518
700
2,151
8,272
3,436
3,298
5,510
5,615
4,009
2,049
6,280
1,109
2,827
4,639
6,207
3,200
2,580
1,285
760
1,346
4,860
2,372
1,113
5,276
4,115
4,416
960
4,272
3,080
1,250
12,460
5,420
3,907
4,952
4,538
1,560
4,643
540
1,205
1,418
4,170
1,910
480
1,695
5,228
40,835
64,591
60,941
18,504
59,923
51,800
29,557
12,410
47,961
23,198
25,175
46,526
64,279
27,566
27,640
19,980
12,611
19,484
28,415
7,609
11,560
24,710
26,599
33,568
32,607
67,039
14,658
23,751
45,521
44,873
21,623
25,803
17,399
13,210
18,034
11,483
11,988
12,480
91,273
11,996
13,042
36,060
1,979
10,565
19,813
3,256
5,955
12,238
14,877
8,354
1,547
12,724
8,685
4,594
2,705
7,920
8,323
7,353
6,301
2,110
4,876
8,513
2,527
1,451
1,762
7,825
3,369
9,638
11,697
3,817
5,755
4,347
12,824
7,209
9,069
1,941
4,220
4,402
3,057
730
1,544
20,323
434
3,755
9,559
2005
2010
2012
2016
2013
2016
2012
2013
2015
2013
2005
2016
2020
2019
2013
2013
2014
2015
2013
2013
2010
2019
2019
2013
2019
2011
2017
2011
2012
2014
2012
2013
2013
2015
2012
2014
2013
2019
2019
2016
2019
2011
2010
2006
2000
2000
2018
2009
2003
2009
2007
2016
2009
1988
2005
2015
2008
2001
1999
2005
2005
1996
2008
1988
2017
2019
2004
1998
1996
2015
2001
1998
2017
2002
2000
1987
2016
2000
2008
2001
2019
2011
1987
2020
1999
2005
1011 E. Pecan Grove Rd.
5 Meridian Way
Frognal Avenue
2201 Colston Drive
190 Tierra Rejada Road
5300 E Los Angeles Avenue
1270 Warwick Road
1 Worcester Way
Warwick Road
Old Bath Rd.
800 Oregon St.
91 Napa Road
11289 Oakmond Rd
101 Watermere Drive
3117 E. Chaser Lane
1110 E. Westview Ct.
78C McKenney Avenue
64 Portugal Cove Road
1340 - 1354 Main Street
1 Dairyground Road
6725 Inglewood
15100 Howe Road
2625 SE Cove Road
4610 Coldwater Canyon Avenue
7 Canal Road
1221 Seventh St
744 Brooks Street
41 Springfield Avenue
13810 West Sandridge Drive
Bagshot Road
1039 East El Camino Real
16028 83rd Avenue
15501 16th Avenue
123 Westmead Road
4315 Johns Creek Parkway
Sway Place
301 Macoun Drive
4120 King Road
6715 Buckley Road
8201 6th Avenue
512 Oak St
7950 Bay Branch Dr
1587 Old Freehold Rd
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing Operating:
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
Tyler, TX
Upland, CA
Upper Providence, PA
Upper St Claire, PA
Vacaville, CA
Vallejo, CA
Vallejo, CA
Vancouver, WA
Vancouver, BC
Vancouver, WA
Vankleek Hill, ON
Vaudreuil, QC
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
Waterville, OH
Waukee, IA
(Dollars in thousands)
—
—
18,270
7,502
12,566
36,318
7,586
4,640
7,273
17,430
5,719
30,720
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
542
7,888
—
6,629
18,976
17,634
—
—
—
—
—
—
—
—
—
1,542
2,436
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
1,042
650
3,160
1,900
1,102
900
4,000
2,330
1,820
7,282
—
389
1,852
2,930
2,856
3,681
2,476
7,106
3,700
1,650
3,700
10,320
4,000
1,920
—
1,870
13,280
12,507
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
20,728
12,869
8,343
5,268
42,596
28,195
13,455
17,100
18,000
15,407
19,042
6,572
—
2,960
14,214
40,070
18,038
15,774
15,379
29,937
24,312
25,350
12,467
100,890
69,154
24,880
—
31,878
1,252
1,428
4,407
4,045
1,826
7,211
1,381
877
2,668
4,542
871
5,453
297
5,317
2,094
114
1,122
543
24
98
489
1,668
3,978
5,193
1,667
1,271
2,428
16,606
628
2,062
26,571
2,320
2,184
2,695
9,185
2,565
3,045
3,583
18,335
3,369
2,084
48,130
1,042
1,542
2,436
3,209
5,531
2,123
5,591
2,693
1,135
2,763
3,797
1,598
5,791
3,504
830
1,362
1,614
2,266
1,042
650
3,160
1,906
1,153
900
4,030
2,330
1,821
7,787
1,406
426
1,956
2,930
3,121
3,997
2,718
6,029
3,854
1,694
3,808
10,320
4,021
2,058
2,566
1,900
14,532
13,935
24,838
29,089
21,331
48,409
8,739
6,185
22,113
36,902
4,638
58,454
73,428
11,496
23,347
20,728
13,991
8,886
5,292
42,694
28,678
15,072
21,078
23,163
17,074
20,312
8,495
15,200
3,551
16,172
66,641
20,093
17,642
17,832
40,199
26,723
28,351
15,942
119,225
72,502
26,826
45,564
32,890
1,927
1,991
4,394
7,178
4,384
13,447
2,385
1,702
5,163
10,244
1,556
19,389
8,315
2,496
9,163
8,988
1,748
1,162
1,937
7,628
4,254
4,718
8,261
8,965
5,368
6,357
5,968
6
1,072
3,404
28,297
6,029
5,490
3,245
13,356
5,739
7,011
5,189
24,385
18,471
6,743
217
6,744
2019
2019
2015
2015
2015
2015
2015
2013
2013
2013
2013
2013
2016
2012
2010
2010
2019
2019
2006
2015
2013
2013
2005
2005
2010
2010
2015
2020
2013
2015
2007
2013
2013
2015
2012
2012
2011
2013
2016
2013
2011
2020
2012
2011
2009
1900
1988
1999
1964
1971
1982
2002
1973
1987
1988
2016
1997
1986
1984
2001
2016
2007
2014
2015
2005
1987
1989
1990
2006
1974
2001
1987
1975
2003
1974
1988
1990
2002
2013
2003
1998
1988
2004
2000
2018
2007
300 Fries Road
285 Crestmount Avenue
54 Foxbar Road
645 Castlefield Avenue
4251 Dundas Street West
10 William Morgan Drive
123 Spadina Road
25 Centennial Park Road
305 Balliol Street
1055 and 1057 Don Mills Road
1340 York Mills Road
8 The Donway East
25535 Hawthorne Boulevard
5660 N. Kolb Road
8887 South Lewis Ave
9524 East 71st St
3791 Crowell Road
3092 Kendal Lane
5550 Old Jacksonville Hwy.
2419 North Euclid Avenue
1133 Black Rock Road
500 Village Drive
799 Yellowstone Dr.
350 Locust Dr.
2261 Tuolumne
10011 NE 118th Ave
2803 West 41st Avenue
201 NW 78th St
48 Wall Street
333 rue Querbes
7955 16th Manor
3000 Shelbourne Street
3051 Shelbourne Street
3965 Shelbourne Street
Christ Church Road
311 Route 73
2021 Highway 35
2175 Ygnacio Valley Road
1580 Geary Road
5111 Connecticut Avenue NW
680 Mountain Boulevard
1470 Pray Blvd
1650 SE Holiday Crest Circle
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Seniors Housing Operating:
Waxahachie, TX
Wayland, MA
Weatherford, TX
Webster Groves, MO
Welland, ON
Wellesley, MA
West Babylon, NY
West Bloomfield, MI
West Chester Township, OH
West Hills, CA
West Seneca, NY
West Seneca, NY
West Vancouver, BC
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
Yorkton, SK
Seniors Housing Operating
Total
—
—
—
—
5,769
—
—
—
—
—
—
—
17,543
—
—
—
—
—
—
—
—
—
—
—
11,271
25,011
12,084
—
—
—
—
2,996
650
1,207
660
1,790
983
4,690
3,960
1,040
2,281
2,600
1,413
1,042
7,059
5,441
1,440
1,160
2,060
7,899
2,591
2,304
1,587
1,309
1,040
6,009
1,960
1,276
1,317
2,990
2,941
3,400
3,962
463
5,763
27,462
5,261
15,425
7,530
77,462
47,085
12,300
47,848
7,521
6,626
7,475
28,155
41,420
32,607
2,750
31,296
48,240
16,551
24,768
11,946
10,536
23,338
29,405
38,612
21,732
15,609
12,523
8,922
20,478
50,107
8,760
10
2,437
7
2,711
1,086
571
2,671
945
1,288
1,760
634
604
5,580
10,347
463
268
86
6,767
2,540
3,092
789
662
2,395
4,451
7,129
3,371
3,641
1,598
1,846
1,441
2,471
1,100
650
1,364
660
1,812
1,060
4,690
4,062
1,100
2,281
2,658
1,413
1,042
7,717
6,027
1,468
1,160
2,060
8,784
2,908
2,437
1,587
1,309
1,176
6,671
2,217
1,664
1,450
3,210
3,264
3,456
4,047
504
5,773
29,742
5,268
18,114
8,539
78,033
49,654
13,185
49,136
9,223
7,260
8,079
33,077
51,181
33,042
3,018
31,382
54,122
18,774
27,727
12,735
11,198
25,597
33,194
45,484
24,715
19,117
13,901
10,445
21,863
52,493
9,819
1,997
8,380
1,949
5,560
1,525
15,666
12,541
3,728
317
3,344
1,080
1,036
9,434
12,905
5,977
1,347
4,994
15,969
3,380
7,122
1,487
1,279
6,754
9,383
15,196
6,421
4,278
1,234
4,030
6,494
13,792
2,663
2007
2013
2006
2011
2015
2015
2013
2013
2020
2013
2019
2019
2013
2013
2015
2013
2014
2013
2014
2013
2019
2019
2013
2012
2013
2013
2015
2016
2013
2013
2013
2013
2008
1997
2007
2012
2006
2012
2003
2000
2019
2002
2000
2007
1987
2006
2013
1998
2014
1329 Brown St.
285 Commonwealth Road
1818 Martin Drive
45 E Lockwood Avenue
110 First Street
23 & 27 Washington Street
580 Montauk Highway
7005 Pontiac Trail
7129 Gilmore Rd
9012 Topanga Canyon Road
1187 Orchard Park Drive
2341 Union Road
2095 Marine Drive
16-18 Poole Road
108 Littleton Road
135 North Avenue
25 Leonard Trail
2008 Ellesmere Road
2013 Cross Road
2002
11621 New Hampshire Avenue
2015
2016
2004
4770 Clinton Road
35100 Chardon Road
2215 Shipley Street
2010 Stockbridge Road
1999
1988
857 Wilkes Avenue
3161 Grant Avenue
1999
2017
2008
2005
2005
2001
125 Portsmouth Boulevard
12 Streets Heath, West End
73 Wergs Road
20461 Ventura Boulevard
65 Crisfield Street
94 Russell Drive
$
1,706,192
$
1,466,472
$
13,489,025
$
2,648,613
$
1,642,393
$
15,961,717
$
3,554,697
116
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2020
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
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
Alma, MI
Ames, IA
Ann Arbor, MI
Annandale, VA
Arlington, VA
Asheboro, NC
Asheville, NC
Asheville, NC
Atchison, KS
Austin, TX
Avon, IN
Avon, IN
Avon, CT
Azusa, CA
Bad Axe, MI
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
Bethel Park, PA
Bethel Park, PA
Bethesda, MD
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11,689
—
—
—
$
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
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
20,987
8,187
19,930
16,112
3,002
6,826
6,305
5,025
11,845
4,822
—
8,870
11,123
18,974
8,801
5,032
3,489
1,955
5,610
5,005
14,470
19,444
7,624
3,141
—
4,810
4,303
3,148
9,310
1,380
1,821
2,619
4,432
23,526
26,191
13,553
32,677
16,007
6,740
6,869
$
$
11,660
1,089
1,601
2,134
—
—
8,847
—
—
—
7,810
7
—
—
—
312
—
532
23
—
34
—
—
7,430
7,289
55
—
—
—
—
—
—
—
1,728
—
2,747
5,008
—
—
—
$
950
990
1,770
880
633
2,452
600
1,767
494
1,491
1,267
330
2,172
1,687
4,016
290
204
280
140
1,691
1,830
900
2,132
570
1,317
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
$
32,647
9,276
21,531
18,246
3,002
6,826
15,152
5,025
11,845
4,822
6,543
8,877
11,123
18,974
8,801
5,344
3,489
2,487
5,633
5,005
14,504
19,444
7,624
10,571
5,972
4,865
4,303
3,148
9,310
1,380
1,821
2,619
4,432
25,254
26,191
16,300
37,685
16,007
6,740
6,869
4,299
1,523
5,743
8,903
206
453
2,752
337
775
331
47
2,553
786
1,215
575
2,388
2,019
1,137
792
436
4,349
3,464
610
3,607
48
701
308
240
605
892
168
194
341
7,611
1,614
3,667
6,816
5,149
469
440
2014
2014
2010
2002
2018
2018
2011
2018
2018
2018
2020
2010
2018
2018
2018
2003
1999
2003
2015
2018
2010
2014
2018
1998
2020
2015
2018
2018
2018
1996
2018
2018
2018
2011
2019
2011
2016
2007
2018
2018
1998
1985
2008
1993
1999
1964
1923
1960
1995
1988
2009
1999
1997
2002
1976
1998
1999
1992
2001
2000
2004
2013
2000
1953
2010
2000
1978
1996
1979
1995
1965
1968
1965
1971
2009
1984
1966
2009
1986
1974
6565 Central Park Boulevard
1250 East N 10th Street
611 W County Line Rd South
1200 Suffield St.
171 North Cleveland Massillon Road
1510 Collingwood Road
1118 N. Stoneman Ave.
9150 Allen Road
5151 Hamilton Boulevard
1265 Cedar Crest Boulevard
1320 Pine Ave
1325 Coconino Rd.
4701 East Huron River Drive
7104 Braddock Road
550 South Carlin Southprings Road
514 Vision Dr.
4 Walden Ridge Dr.
308 Overlook Rd.
1301 N 4th St.
11630 Four Iron Drive
182 S Country RD. 550E
10307 E. CR 100 N
100 Fisher Drive
125 W. Sierra Madre Ave.
150 Meadow Lane
321 Crimson Ave
6600 Ridge Road
4669 Falls Road
85 Third Street
5420 S.E. Adams Blvd.
200 Roosevelt Avenue East
800 Mulholland Street
136 Donahoe Manor Road
1301 Ralston Avenue
1 Brookfield Ct
4242 Bryant Irvin Road
2235 Sacramento Street
5785 Baptist Road
60 Highland Road
6530 Democracy Boulevard
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
Bethlehem, PA
Bethlehem, PA
Beverly Hills, CA
Bexleyheath, UK
Bingham Farms, MI
Birmingham, UK
Birmingham, UK
Birmingham, UK
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
Brick, NJ
Bridgewater, NJ
Bristol, UK
Bristol, UK
Brooks, AB
Bucyrus, OH
Burleson, TX
Burlington, NC
Burlington, NC
Burlington, NJ
Burlington, NJ
Burnaby, BC
Calgary, AB
Calgary, AB
Camp Hill, PA
Canonsburg, PA
Canton, OH
Canton, MI
Cape Coral, FL
Cape Coral, FL
Cape May Court House, NJ
Carlisle, PA
Carmel, IN
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,662
—
—
—
—
—
—
7,069
14,118
23,452
—
—
—
—
—
7,925
—
—
—
1,191
1,143
6,000
3,750
781
1,647
1,591
1,462
1,184
670
2,200
2,826
3,601
2,668
2,138
2,804
4,081
252
480
170
—
990
1,290
1,800
—
2,337
376
1,119
670
280
460
1,700
1,170
7,623
2,341
4,569
517
911
300
1,399
530
760
1,440
978
1,700
16,887
13,588
13,385
10,807
15,671
14,853
19,092
9,056
10,085
17,423
4,974
4,061
21,364
16,470
10,201
14,222
11,470
3,298
9,953
7,157
13,296
19,353
25,247
31,810
—
13,416
4,951
2,611
13,985
4,297
5,467
12,554
19,205
13,844
42,768
70,199
3,596
4,828
2,098
16,966
3,281
18,868
17,002
8,204
19,491
—
—
203
1,564
—
1,772
2,222
1,129
1,211
—
—
—
—
—
—
—
684
—
113
1,290
1,428
—
1,330
1,678
22,876
—
464
—
2,457
849
110
501
172
1,839
3,912
6,378
—
—
—
—
—
110
1,775
—
1
1,191
1,143
6,000
4,153
781
1,824
1,762
1,619
1,312
670
2,200
2,826
3,601
2,668
2,138
2,804
4,372
252
480
170
—
990
1,290
1,800
4,382
2,337
408
1,119
670
280
460
1,700
1,170
8,273
2,541
4,958
517
911
300
1,399
530
760
1,440
978
1,700
16,887
13,588
13,588
11,968
15,671
16,448
21,143
10,028
11,168
17,423
4,974
4,061
21,364
16,470
10,201
14,222
11,863
3,298
10,066
8,447
14,724
19,353
26,577
33,488
18,494
13,416
5,383
2,611
16,442
5,146
5,577
13,055
19,377
15,033
46,480
76,188
3,596
4,828
2,098
16,966
3,281
18,978
18,777
8,204
19,492
1,053
852
2,101
1,931
1,013
2,447
3,100
1,515
1,650
2,641
419
306
1,477
576
721
918
1,048
2,145
2,244
8,447
2,458
3,434
6,627
8,322
1,433
639
934
207
3,898
2,277
2,530
4,074
5,206
2,646
7,760
12,605
240
352
1,214
1,093
1,629
4,296
3,303
562
3,070
2018
2018
2014
2014
2018
2015
2015
2015
2015
2015
2018
2018
2018
2019
2018
2018
2014
1996
2012
1997
2014
2014
2011
2011
2015
2017
2014
2018
2011
2003
2003
2011
2011
2014
2014
2014
2018
2018
1998
2018
2002
2012
2014
2018
2015
1979
1982
2000
1996
1999
2010
2010
2010
1997
2015
1994
1984
1990
2017
1991
1984
2017
1995
2000
1968
2009
2011
2000
2001
2017
2019
2000
1976
1988
2000
1997
1965
1994
2006
1971
2001
1970
1986
1998
2005
2000
2009
1990
1987
2015
2021 Westgate Drive
2029 Westgate Drive
220 N Clark Drive
35 West Street
24005 West 13 Mile Road
Clinton Street, Winson Green
Braymoor Road, Tile Cross
Clinton Street, Winson Green
122 Tile Cross Road, Garretts Green
363 S. Fieldstone Boulevard
7225 Boca Del Mar Drive
375 Northwest 51st Street
2800 Palo Parkway
Poole Lane
3600 Old Boynton Road
3001 South Congress Avenue
Crowthorne Road North
6101 Pointe W. Blvd.
2800 60th Avenue West
1102 Washington St.
Meadow Park Tortoiseshell Way
8757 Brecksville Road
458 Jack Martin Blvd.
680 US-202/206 North
339 Badminton Road
Avon Valley Care Home, Tenniscourt Road
951 Cassils Road West
1170 West Mansfield Street
300 Huguley Boulevard
3619 S. Mebane St.
3615 S. Mebane St.
115 Sunset Road
2305 Rancocas Road
7195 Canada Way
1729-90th Avenue SW
500 Midpark Way SE
1700 Market Street
113 West McMurray Road
1119 Perry Dr., N.W.
7025 Lilley Road
911 Santa Barbara Blvd.
831 Santa Barbara Boulevard
144 Magnolia Drive
940 Walnut Bottom Road
12315 Pennsylvania Street
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
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
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
Clevedon, UK
Cloquet, MN
Cobham, UK
Colchester, CT
Colorado Springs, CO
Colorado Springs, CO
Columbia, TN
Columbia, SC
Columbia Heights, MN
Concord, NC
Concord, NH
Concord, NH
Congleton, UK
Coppell, TX
Corby, UK
Costa Mesa, CA
Coventry, UK
Crawfordsville, IN
Dallastown, PA
Danville, VA
Danville, VA
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,583
—
2,010
1,500
920
2,850
596
920
832
1,373
354
1,333
440
320
1,416
1,320
4,515
85
1,145
912
5,207
155
330
520
2,838
340
9,808
980
4,280
1,730
341
1,699
825
550
1,760
720
2,036
1,550
1,228
2,050
1,962
720
1,377
410
240
6,069
2,296
19,549
4,350
15,137
27,737
9,352
3,958
10,837
8,862
2,646
5,554
17,575
14,039
9,871
18,127
8,685
1,395
8,994
14,010
31,715
1,427
2,292
15,733
16,927
4,660
24,991
4,860
62,168
25,493
2,295
2,319
14,175
3,921
43,179
3,041
5,120
8,386
5,144
19,969
13,830
17,239
16,797
3,954
8,436
—
—
—
1,366
—
20
—
—
—
—
1,201
—
306
—
—
—
—
—
—
—
—
6,130
—
—
2,122
120
3,737
544
—
693
—
—
163
416
634
340
768
228
881
969
1,695
1,426
—
1,032
—
1,583
—
2,010
1,500
920
2,850
596
920
832
1,373
354
1,333
440
320
1,416
1,320
4,515
85
1,145
912
5,207
155
330
520
3,142
340
10,861
980
4,280
1,730
341
1,699
825
550
1,760
720
2,254
1,550
1,240
2,050
2,172
720
1,377
410
240
6,069
2,296
19,549
5,716
15,137
27,757
9,352
3,958
10,837
8,862
3,847
5,554
17,881
14,039
9,871
18,127
8,685
1,395
8,994
14,010
31,715
7,557
2,292
15,733
18,745
4,780
27,675
5,404
62,168
26,186
2,295
2,319
14,338
4,337
43,813
3,381
5,670
8,614
6,013
20,938
15,315
18,665
16,797
4,986
8,436
447
140
2,254
2,956
2,801
7,524
592
388
731
629
1,667
374
4,635
2,595
693
3,318
574
896
590
934
1,989
1,970
1,322
2,636
3,128
1,239
5,364
1,828
8,523
3,548
1,324
170
3,496
1,959
11,371
1,099
917
1,872
595
6,446
2,349
3,344
1,121
2,182
1,577
2018
2018
2014
1998
2014
2011
2018
2018
2018
2018
2002
2018
2011
2014
2018
2014
2018
1996
2018
2018
2018
1996
1998
2014
2014
2011
2013
2011
2015
2016
1999
2018
2011
2003
2011
2011
2014
2012
2017
2011
2015
2014
2018
2003
2014
1985
1985
2016
1996
2013
1970
1965
1997
1999
1976
1997
1982
1998
2009
1997
2009
1964
1996
1977
2000
1988
1996
1998
2013
1994
2006
2013
1986
2008
2016
1999
1968
2009
1997
1994
1926
1994
2013
1997
1965
2014
2013
1979
1998
1996
12999 North Pennsylvania Street
12999 North Pennsylvania Street
2645 East Trinity Mills Road
111 MacArthur
8405 Clearvista Lake
536 Ridge Road
1940 1st Avenue Northeast
1001 E. Alex Bell Road
8100 East Washington Street
1070 Stouffer Avenue
100 Lanark Rd.
1137 Sam Rittenberg Boulevard
1000 Association Drive, North Gate Business
Park
100 Rorer Street
2700 Chapel Avenue West
12001 Iron Bridge Road
8700 Jones Mill Road
801 Country Club Rd.
1058 Columbus Street
6870 Clough Pike
7807 Upland Way
1605 N. Hwy. 88
2183 Memorial Dr.
84 Johnson Estate Road
18/19 Elton Road
705 Horizon Circle
Redhill Road
59 Harrington Court
1605 Elm Creek View
2818 Grand Vista Circle
5011 Trotwood Ave.
2601 Forest Drive
3807 Hart Boulevard
2452 Rock Hill Church Rd.
239 Pleasant Street
227 Pleasant Street
Rood Hill
1530 East Sandy Lake Road
25 Rockingham Road
350 West Bay St
1 Glendale Way
517 Concord Road
100 West Queen Street
149 Executive Ct.
508 Rison Street
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
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
Dowagiac, MI
Droitwich, UK
Dublin, OH
Dubuque, IA
Dunedin, FL
Durham, NC
Eagan, MN
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
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
15,890
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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
1,380
4,071
1,109
1,430
1,620
390
410
1,810
1,650
200
1,344
3,733
1,460
930
1,520
50
1,400
3,600
1,827
4,099
570
620
2,850
780
1,693
2,036
8,670
2,017
20,038
5,412
3,394
13,796
13,572
11,840
8,305
24,804
8,539
22,266
—
—
2,911
8,902
13,325
10,659
31,643
34,229
24,438
7,500
13,396
10,049
4,877
8,388
14,849
25,167
2,760
7,073
18,745
7,721
4,514
24,024
3,950
5,476
27,267
17,304
17,614
9,119
5,829
55,175
11,539
10,455
5,737
384
—
—
—
—
—
—
—
216
—
776
141
2,603
16,380
—
—
—
3,085
300
1,093
3,062
—
—
—
86
—
3,260
1,700
2,197
—
—
1,987
26
785
71
—
—
—
—
112
4,856
1,467
300
—
834
2,880
566
910
1,188
1,197
1,413
1,158
2,125
1,760
3,222
2,527
600
825
3,895
1,393
568
1,883
1,476
2,260
1,380
4,508
1,109
1,430
1,620
390
410
1,810
1,650
200
1,344
3,733
1,460
930
1,520
50
1,400
3,600
1,827
4,099
570
620
2,850
780
1,693
2,254
9,054
2,017
20,038
5,412
3,394
13,796
13,572
11,840
8,521
24,804
9,147
22,407
1,778
12,485
2,911
8,902
13,325
13,744
31,943
35,322
27,063
7,500
13,396
10,049
4,963
8,388
18,109
26,867
4,957
7,073
18,745
9,708
4,540
24,809
4,021
5,476
27,267
17,304
17,614
9,231
10,685
56,642
11,839
10,455
6,353
2,143
138
1,300
385
266
857
912
818
2,320
1,547
1,220
5,944
21
—
237
564
849
12,561
4,397
8,636
4,457
651
898
796
2,277
1,988
2,931
2,824
2,487
496
1,163
4,656
1,354
7,574
568
3,080
2,086
1,171
1,166
2,164
5,967
13,649
1,578
722
998
2012
2018
2018
2018
2018
2018
2018
2018
2010
2018
2014
2011
2020
2018
2018
2018
2018
1997
2015
2011
2014
2018
2018
2018
2003
2012
2014
2014
1998
2018
2018
2000
2011
2011
2015
1999
2017
2018
2018
2012
1996
2011
2015
2018
2014
2001
1966
2008
1977
1964
1977
1998
1998
2011
1988
2015
1984
2006
2020
2014
1971
1983
1999
2004
1998
1999
2015
1981
2000
1998
2001
1985
2017
1999
1995
1988
1988
1966
1987
1994
1999
2018
1997
1990
1987
1973
1982
2003
1997
1980
27440 County Road 13
815 East Locust Street
3800 Commerce Blvd.
1974 North Fairfield Road
26001 Ford Road
2722 North Decatur Road
16150 Jog Road
16200 Jog Road
2125 Brinker Rd
290 South Monaco Parkway
Rykneld Road
1080 Silver Lake Blvd.
29601 Amerihost Dr
Mulberry Tree Hill
4075 W. Dublin-Granville Road
901 West Third Street
870 Patricia Avenue
4434 Ben Franklin Blvd.
3810 Alder Avenue
606 Cranbury Rd.
Carew Road
4100 Freemansburg Avenue
2600 Northampton Street
4100 Freemansburg Avenue
314 W. Kings Hwy.
15401 North Pennsylvania Avenue
1225 Lakeshore Drive
2709 East Danforth Road
400 Hastings Lane
1940 Nerge Road Elk
1920 Nerge Road
335 Saxony Rd.
333 Grand Avenue
1500 Borden Rd
1820 E River St
2015 Lake Heights Dr.
501 Thomas Jones Way
12469 Lee Jackson Mem Highway
12475 Lee Jackson Memorial Highway
50 Spring Run Road
1748 Highland Ave.
295 South Ave.
828 1st Street NE
45 South Road
Bruntile Close, Reading Road
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
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
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, MI
Greenville, SC
Greenville, SC
Greenville, SC
Greenville, NC
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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
—
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
20,173
3,962
1,800
14,500
2,101
18,050
2,978
14,830
8,414
3,618
1,701
8,533
4,497
19,566
58,608
4,532
13,615
9,375
11,320
20,000
23,202
10,559
18,235
9,741
—
3,839
2,800
6,129
3,096
5,029
16,193
2,100
4,461
6,634
2,940
21,280
17,648
18,051
2,970
5,507
—
4,750
8,771
1,445
4,393
—
500
—
21
3
—
—
266
253
4
—
—
208
356
—
4
5,086
—
70
2,161
—
—
—
—
31,462
—
93
55
85
624
—
—
—
—
777
2,401
112
—
643
1,390
5,831
252
—
—
328
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
1,708
200
470
310
400
1,502
200
3,000
1,496
2,550
1,670
2,220
1,077
330
560
1,490
310
1,751
947
290
20,173
4,462
1,800
14,521
2,104
18,050
2,978
15,096
8,667
3,622
1,701
8,533
4,705
19,922
58,608
4,536
18,701
9,375
11,390
22,161
23,202
10,559
18,235
9,741
29,088
3,839
2,893
6,184
3,181
5,653
16,193
2,100
4,461
6,634
3,717
23,681
17,760
18,051
3,613
6,897
4,341
5,002
8,771
1,445
4,721
4,633
2,187
1,104
4,357
908
1,135
1,474
4,159
2,066
679
178
588
2,113
5,139
8,009
561
5,411
619
3,062
8,448
4,022
717
1,210
782
964
258
433
2,826
1,497
2,385
1,071
1,278
362
488
1,015
6,248
2,451
1,877
1,669
3,072
41
2,143
596
164
2,097
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
2018
2015
2003
2003
2003
2018
1997
2018
2018
2012
2010
2013
2017
2003
2003
2020
2004
2018
2018
2003
1991
1997
1997
2000
1998
1969
1999
1908
2012
1979
1999
1967
1999
1980
2007
1965
2011
1988
1971
1999
2010
1999
1990
2000
2018
1964
2000
1998
1994
1996
2000
1997
1990
2001
1996
2009
2014
2009
1996
1997
2016
1997
1966
1976
1998
6375 Chambersburg Road
5125 Highbridge St.
725 Fox Run Rd.
9745 Olympia Dr.
83 Crossroad Lane
3011 North Center Road
901 Broad St.
350 Haws Lane
4141 Long Prairie Road
237 Franklin Pike Rd SE
640 Sunnyside Drive
540 Sunnyside Drive
493 Piney Ridge Rd.
Diane Drive, Box 686
4750 Pleasant Oak Drive
1005 East Elizabeth
425 Alabama Ave.
11680 Warner Avenue
93 Main Street
3500 Meekins Dr.
140 Brimley Drive
15950 McGregor Boulevard
1600 Matthew Drive
13881 Eagle Ridge Drive
3605 NW 83rd Street
280 East Losey Street
869 Juniper Terrace
1680 S. New Hope Rd.
1717 Union Rd.
1750 Robinwood Rd.
2388 Bricher Road
2600 University Dr., E.
3309 45th Street Court Northwest
2S706 Park Boulevard
916 East Highway 377
6330 North Fir Rd
4545 Merlot Drive
5300 West 29th Street
5809 Old Oak Ridge Rd.
4400 Lawndale Dr.
1515 Meijer Dr
23 Southpointe Dr.
600 Sulphur Springs Road
601 Sulphur Springs Road
2715 Dickinson Ave.
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
Greenwood, IN
Grosse Pointe, MI
Groton, CT
Hamilton, NJ
Hanahan, SC
Hanford, UK
Harrisburg, PA
Harrow, UK
Hastings, MI
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
Hinsdale, IL
Hockessin, DE
Holton, KS
Homewood, IL
Howard, WI
Huntingdon Valley, PA
Hutchinson, KS
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,550
867
2,430
440
1,934
1,382
569
7,402
—
—
1,192
2,924
450
6,224
1,860
1,500
1,900
40
290
560
370
330
430
940
1,792
2,159
4,033
1,120
40
2,395
579
1,150
600
1,082
870
1,105
6,500
750
—
1,752
2,182
2,265
600
700
1,778
22,770
2,385
19,941
4,469
3,986
9,829
12,822
8,266
—
28,112
7,608
7,527
13,469
8,410
3,688
9,943
24,353
4,210
987
4,443
2,185
3,395
4,143
3,721
6,339
4,194
24,280
6,308
7,460
7,649
32,122
3,728
10,590
6,767
14,688
6,642
26,405
25,231
26,381
2,552
9,488
13,614
8,104
20,115
22,622
81
—
968
—
—
1,204
—
1,683
8,122
1,771
—
1,122
—
—
—
540
3,585
29
374
894
464
126
186
4,983
—
682
—
1,247
13
—
3,072
—
397
7
—
—
3,107
115
1,805
—
—
—
—
—
—
1,550
867
2,430
440
1,934
1,530
569
8,197
1,603
—
1,192
3,238
450
6,224
1,860
1,500
2,104
40
290
560
370
330
430
940
1,792
2,391
4,033
1,120
40
2,395
633
1,150
600
1,082
870
1,105
6,500
750
1,691
1,752
2,182
2,265
600
700
1,778
22,851
2,385
20,909
4,469
3,986
10,885
12,822
9,154
6,519
29,883
7,608
8,335
13,469
8,410
3,688
10,483
27,734
4,239
1,361
5,337
2,649
3,521
4,329
8,704
6,339
4,644
24,280
7,555
7,473
7,649
35,140
3,728
10,987
6,774
14,688
6,642
29,512
25,346
26,495
2,552
9,488
13,614
8,104
20,115
22,622
6,128
170
6,038
2,206
322
2,131
844
1,538
51
7,692
683
1,644
3,467
575
239
2,470
5,757
619
696
2,450
1,265
1,609
1,937
2,728
589
1,003
1,517
1,385
1,018
489
3,268
355
4,525
1,221
2,729
428
6,091
2,963
3,092
173
689
1,309
499
2,890
2,366
2010
2018
2011
2001
2018
2013
2018
2014
2020
2011
2018
2013
2010
2018
2018
2011
2013
2015
2003
2003
2003
2003
2003
2002
2018
2013
2018
2014
2015
2018
2017
2018
2004
2018
2014
2018
2012
2013
2013
2018
2018
2018
2018
2015
2017
2007
1964
1975
1998
1989
2012
2000
2001
2002
1996
2000
2012
2009
1989
1987
2006
2011
1996
1994
2000
1999
1994
1998
1999
1983
2013
1971
1992
1996
1989
2016
1993
1997
1998
2014
1979
2001
2014
2014
1989
1980
1997
1973
2015
2015
2339 South SR 135
21401 Mack Avenue
1145 Poquonnock Road
1645 Whitehorse-Mercerville Rd.
1800 Eagle Landing Boulevard
Bankhouse Road
2625 Ailanthus Lane
177 Preston Hill
1821 N. East St
3485 Davisville Road
779 West County Line Road
St Albans Road East
217 Methodist Hospital Blvd
1717 West Stetson Avenue
1650 Old Indian Town Road
4131 Andrew Jackson Parkway
165 Reculver Road
400 Kansas Ave
2530 16th St. N.E.
1568 Skeet Club Rd.
1564 Skeet Club Rd.
201 W. Hartley Dr.
1560 Skeet Club Rd.
9160 S. University Blvd.
1141 Northview Drive
Tudor Road
600 W Ogden Avenue
100 Saint Claire Drive
410 Juniper Dr
940 Maple Avenue
2790 Elm Tree Hill
3430 Huntingdon Pike
2416 Brentwood
400 S Independence Ave
1635 N Arlington Avenue
8549 South Madison Avenue
2 Kathleen Drive
5939 Roosevelt Boulevard
4000 San Pablo Parkway
3648 University Blvd South
8495 Normandy Blvd
380 Wray Large Road
1008 Thompson Street
8900 Parallel Parkway
24802 Kingsland Boulevard
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
Kensington, MD
Kenwood, OH
Kettering, OH
King of Prussia, PA
King of Prussia, PA
Kingsford, MI
Kingston, PA
Kirkstall, UK
Kokomo, IN
Lacey, WA
Lafayette, CO
Lafayette, IN
Lakeway, TX
Lakewood, CO
Lakewood Ranch, FL
Lakewood Ranch, FL
Lancaster, PA
Lancaster, PA
Lapeer, MI
Largo, FL
Las Vegas, NV
Laureldale, PA
Lawrence, KS
Lebanon, PA
Lebanon, PA
Lee, MA
Leeds, UK
Leicester, UK
Lenoir, NC
Lethbridge, AB
Lexana, KS
Lexington, NC
Libertyville, IL
Libertyville, IL
Lichfield, UK
Lillington, NC
Lillington, NC
Lincoln, NE
Lititz, PA
Livermore, CA
Livonia, MI
Livonia, MI
Longwood, FL
Los Angeles, CA
Louisburg, KS
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,245
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,753
821
1,229
720
1,205
1,362
986
2,437
710
2,582
1,420
670
5,142
2,160
650
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
1,836
1,260
—
280
18,621
11,040
4,701
14,776
4,725
10,594
5,710
9,414
16,044
18,175
20,192
16,833
23,203
28,091
6,714
22,388
14,039
7,502
—
3,426
23,420
14,420
8,716
10,367
5,960
18,135
13,239
24,410
3,748
2,750
1,770
3,900
40,024
11,546
30,324
17,579
16,451
13,807
13,836
24,996
13,555
2,277
6,445
11,430
4,320
—
—
—
—
—
—
—
1,272
—
—
—
1
—
62
1,988
89
—
—
10,621
—
—
—
—
—
—
926
1,634
2,950
920
347
152
1,123
75
—
3,405
—
—
95
—
79
—
—
—
1,058
44
1,753
821
1,229
720
1,205
1,362
986
2,698
710
2,582
1,420
670
5,142
2,160
650
1,000
1,680
1,011
1,827
1,166
580
1,171
250
728
1,214
290
2,186
3,388
190
1,317
480
200
6,500
2,993
1,530
470
500
390
1,200
4,100
985
1,836
1,260
—
280
18,621
11,040
4,701
14,776
4,725
10,594
5,710
10,425
16,044
18,175
20,192
16,834
23,203
28,153
8,702
22,477
14,039
7,502
8,794
3,426
23,420
14,420
8,716
10,367
5,960
19,061
14,661
27,032
4,668
2,994
1,922
5,023
40,099
11,546
33,581
17,579
16,451
13,902
13,836
25,075
13,555
2,277
6,445
12,488
4,364
1,186
727
352
1,009
381
727
382
2,047
2,974
1,175
3,143
2,866
4,717
5,037
1,939
5,000
1,557
502
65
296
5,846
931
1,923
733
473
9,316
2,160
5,645
2,047
674
311
2,359
10,693
732
4,959
3,140
2,759
3,884
1,537
3,910
924
185
1,742
3,719
601
2018
2018
2018
2018
2018
2018
2018
2013
2014
2018
2015
2015
2007
2014
2011
2012
2015
2018
2020
2018
2011
2018
2012
2018
2018
2002
2015
2012
2003
2014
2015
2002
2011
2018
2015
2014
2014
2010
2015
2014
2018
2018
2011
2008
2015
2002
2000
1977
1995
1990
1968
1974
2009
2014
2012
2015
2014
2011
2010
2012
2005
2017
1966
2004
1997
2002
1980
1996
1998
1980
1998
2013
2010
1998
2003
1994
1997
2001
1988
2012
2013
1999
2000
2016
1974
1999
1960
2011
1971
1996
4301 Knowles Avenue
4580 East Galbraith Road
3313 Wilmington Pike
620 West Valley Forge Road
600 West Valley Forge Road
1225 Woodward Avenue
200 Second Avenue
29 Broad Lane
2200 S. Dixon Rd
4524 Intelco Loop SE
329 Exempla Circle
2402 South Street
2000 Medical Dr
7395 West Eastman Place
8230 Nature's Way
8220 Natures Way
31 Millersville Road
100 Abbeyville Road
101 Devonshire Dr
300 Highland Avenue Northeast
2500 North Tenaya Way
2125 Elizabeth Avenue
3220 Peterson Road
100 Tuck Court
900 Tuck Street
600 & 620 Laurel St.
100 Grove Lane
307 London Road
1145 Powell Rd., N.E.
785 Columbia Boulevard West
8710 Caenen Lake Rd
161 Young Dr.
901 Florsheim Dr
1500 South Milwaukee
Wissage Road
54 Red Mulberry Way
2041 NC-210 N
7208 Van Dorn St.
80 West Millport Road
35 Fenton Street
32500 Seven Mile Road
28550 Five Mile Road
425 South Ronald Reagan Boulevard
330 North Hayworth Avenue
202 Rogers St
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
Louisville, KY
Loxley, UK
Lutherville, MD
Lynchburg, VA
Lynchburg, VA
Lynnwood, WA
Macomb, IL
Macungie, PA
Manalapan, NJ
Manassas, VA
Mankato, MN
Marietta, OH
Marietta, GA
Marietta, PA
Marion, IN
Marion, IN
Marion, OH
Marlborough, UK
Martinsville, VA
Matawan, NJ
Matthews, NC
McHenry, IL
McMurray, PA
Medicine Hat, AB
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
Moorestown, NJ
Morehead City, NC
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,046
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
490
1,369
1,100
340
2,904
2,302
1,586
960
900
750
1,460
1,149
2,406
1,050
720
990
2,768
2,677
349
1,830
560
1,576
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
4,143
200
10,010
15,668
19,786
16,114
3,696
5,632
4,058
29,033
22,624
7,446
32,104
9,373
12,229
13,633
9,604
9,190
17,415
6,822
—
20,618
4,738
—
15,805
5,566
9,938
9,929
1,472
3,232
7,780
4,006
18,654
24,360
10,698
18,672
6,209
3,681
4,799
4,021
27,771
12,749
3,641
9,824
31,002
23,902
3,104
2,768
2,636
1,744
—
—
—
—
84
760
1,103
300
—
—
537
—
824
—
1,021
—
166
137
—
3,894
564
—
173
233
—
472
600
2,199
1,806
—
—
86
839
922
386
765
—
—
—
1,699
—
1,787
490
1,516
1,100
340
2,904
2,302
1,586
960
900
750
1,460
1,149
2,406
1,050
720
990
2,768
2,965
349
1,830
560
1,576
1,440
1,012
1,827
860
1,300
786
960
420
2,022
2,080
740
2,946
720
470
310
450
3,250
1,216
1,237
1,176
3,500
4,143
200
12,778
18,157
21,530
16,114
3,696
5,632
4,058
29,117
23,384
8,549
32,404
9,373
12,229
14,170
9,604
10,014
17,415
7,555
—
20,784
4,875
—
19,699
6,050
9,938
10,102
1,705
3,232
8,252
4,606
20,657
26,166
10,698
18,672
6,295
4,520
5,721
4,407
28,536
12,749
3,641
9,824
32,701
23,902
4,891
5,419
3,551
5,663
2,923
244
378
260
7,618
5,745
3,484
4,285
614
784
1,944
2,465
2,322
1,453
1,240
—
5,370
2,252
—
4,738
1,082
660
2,922
961
303
3,326
2,141
3,141
6,883
3,023
1,158
1,919
2,050
2,585
1,955
3,767
1,006
383
686
8,126
4,655
2,483
2005
2013
2011
2014
2018
2018
2018
2011
2011
2003
2015
2018
2018
2015
2014
2014
2018
2014
2003
2011
2003
2006
2010
2014
2018
2011
2011
2018
2004
2001
2015
2012
2014
2018
2011
2003
2003
2003
2015
2018
2018
2018
2011
2012
1999
1978
2008
1988
2013
1978
1987
1966
1994
2001
1996
2006
1977
1980
1999
2012
1976
2004
1999
1900
1965
1998
1900
2011
1999
1985
1967
1968
1983
1998
1991
2007
1999
2013
1964
1996
2001
2000
1997
1996
1997
1996
1989
1988
2014
1999
4604 Lowe Rd
Loxley Road
515 Brightfield Road
189 Monica Blvd
2200 Landover Place
3701 188th Street
8 Doctors Lane
1718 Spring Creek Road
445 Route 9 South
8341 Barrett Dr.
100 Dublin Road
5001 State Route 60
4360 Johnson Ferry Place
2760 Maytown Road
614 W. 14th Street
505 N. Bradner Avenue
400 Barks Road West
The Common
Rolling Hills Rd. & US Hwy. 58
625 State Highway 34
2404 Plantation Center Dr.
5200 Block of Bull Valley Road
240 Cedar Hill Dr
65 Valleyview Drive SW
8200 Mentor Hills Drive
2240 White Horse- Merceville Road
845 Paddock Ave
450 Oak Ridge Boulevard
15435 Bagley Rd.
6701 Stonefield Rd.
Tunbridge Grove, Kents Hill
500 Carlson Parkway
60257 Bodnar Blvd
833 Sixteenth Avenue
2 Deer Park Drive
918 Fitzgerald St.
919 Fitzgerald St.
1316 Patterson Ave.
319 Forsgate Drive
120 Wyngate Drive
885 MacBeth Drive
640 Bethlehem Pike
165 Changebridge Rd.
250 Marter Avenue
107 Bryan St.
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
Morrison, CO
Moulton, UK
Mountainside, NJ
Mt. Pleasant, MI
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
North Cape May, NJ
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,720
1,695
3,097
—
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
77
5,182
2,013
1,298
3,325
1,628
2,498
2,418
3,876
4,760
1,340
590
760
—
1,930
370
380
950
80
2,201
2,150
50
130
160
4,500
16,261
12,510
7,807
—
29,547
10,639
23,119
12,398
29,590
15,826
12,667
21,575
4,378
21,220
5,655
5,537
6,077
1,484
33,330
2,558
151
17,348
6,257
13,337
8,983
6,263
10,436
5,426
7,985
16,143
10,564
7,513
7,017
—
19,765
10,230
8,769
7,460
5,020
4,016
24,107
1,700
2,970
6,590
29,105
17
2,079
—
8,330
62
—
—
—
—
199
—
—
630
2,442
728
716
6
—
—
—
4,294
2,420
889
—
1,321
848
1,390
—
—
282
105
—
—
17,862
553
—
—
—
—
—
—
142
136
44
38,441
2,720
1,711
3,097
1,863
3,470
1,222
1,672
1,854
4,910
1,200
1,610
1,225
1,639
560
1,230
1,246
839
55
1,480
332
77
5,738
2,230
1,298
3,682
1,803
2,767
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
16,278
14,573
7,807
6,467
29,609
10,639
23,119
12,398
29,590
16,025
12,667
21,575
4,849
23,662
6,263
6,132
6,083
1,484
33,330
2,558
4,445
19,212
6,929
13,337
9,947
6,936
11,557
5,426
7,985
16,425
10,669
7,513
7,017
16,272
20,318
10,230
8,769
7,460
5,020
4,016
24,107
1,842
3,106
6,634
63,816
1,983
1,368
525
57
8,046
749
1,813
786
9,905
4,382
5,960
1,067
991
9,189
1,223
1,006
1,071
1,000
7,285
1,467
328
3,900
1,068
866
1,944
1,055
2,282
350
534
2,808
3,369
2,589
2,401
563
2,998
2,916
2,641
2,049
1,697
361
3,264
311
477
928
19,060
2018
2017
2018
2020
2011
2018
2018
2018
2008
2011
2002
2019
2013
2004
2013
2014
2018
1995
2012
1999
2015
2013
2014
2018
2013
2014
2013
2018
2018
2014
2008
2007
2007
2014
2016
2010
2010
2015
2007
2018
2015
2015
2015
2015
2010
1974
1995
1988
2013
2001
1998
1993
1987
2007
1980
1994
2007
2010
1998
2010
1999
1998
1995
1985
1998
1988
2011
2014
1999
2011
2014
2011
1977
1960
2002
2009
2008
2009
2016
2015
1998
1999
2007
1996
1990
2014
1996
2003
2007
1988
150 Spring Street
Northampton Lane North
1180 Route 22
2378 S. Lincoln Rd
504 North River Road
6125 Rattlesnake Hammock Road
1000 Lely Palms Drive
3601 Lakewood Boulevard
15 Burton Hills Boulevard
4 Hazel Avenue
100 West St.
1023 South Cedar Rd
90a Broadway
200 E. Village Rd.
Hempstalls Lane
Silverdale Road
12997 Nettles Dr
1701 Alameda Dr.
800 Canadian Trails Drive
105 North Hills Dr.
610 Town Bank Road
Cliftonville Road
Cliftonville Road
3240 Milwaukee Avenue
132 Coventry Road
172A Nottingham Road
172 Nottingham Road
9401 South Kostner Avenue
6300 W 95th Street
468 Perkins Street
2650 SE 18TH Avenue
13200 S. May Ave
11320 N. Council Road
2800 SW 131st Street
21250 W 151 Street
11909 Miracle Hills Dr.
5728 South 108th St.
100 Weatherholt Drive
1846 County Highway 48
570 Wells Road
250 East Center Street
1403 Laing St
1520 Parker Ave
2250 S Elm St
6101 W 119th St
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
Overland Park, KS
Overland Park, KS
Owasso, OK
Owensboro, KY
Owenton, KY
Palm Beach Gardens, FL
Palm Coast, FL
Palm Desert, CA
Palm Harbor, FL
Palm Harbor, FL
Palos Heights, IL
Palos Heights, IL
Palos Heights, IL
Panama City Beach, FL
Paola, KS
Parma, OH
Parma, OH
Paulsboro, NJ
Paw Paw, MI
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
410
1,300
215
225
100
2,082
870
6,195
1,306
3,281
1,225
3,431
2,590
900
190
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
3,520
1,448
4,119
984
171
2,840
25,311
1,380
13,275
2,400
6,622
10,957
8,918
13,807
22,450
12,453
28,803
7,644
6,402
5,610
12,718
10,314
8,023
—
5,431
7,108
10,433
21,175
8,114
2,487
8,379
2,690
1,885
33,501
11,354
15,160
3,164
3,789
4,213
9,712
5,844
8,572
11,969
20,152
5,650
17,691
14,622
14,916
4,563
3,559
92
677
—
—
—
—
102
—
—
—
—
—
—
734
59
—
—
—
7,289
—
—
3,536
238
101
—
—
521
—
—
—
—
—
—
—
—
—
6,320
1,713
560
—
—
—
—
—
—
410
1,300
215
225
100
2,082
870
6,195
1,306
3,281
1,225
3,431
2,590
900
190
960
1,833
3,264
1,687
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
3,520
1,448
4,119
984
171
2,932
25,988
1,380
13,275
2,400
6,622
11,059
8,918
13,807
22,450
12,453
28,803
7,644
7,136
5,669
12,718
10,314
8,023
5,602
5,431
7,108
13,969
21,413
8,215
2,487
8,379
3,211
1,885
33,501
11,354
15,160
3,164
3,789
4,213
9,712
5,844
14,892
13,682
20,712
5,650
17,691
14,622
14,916
4,563
3,559
469
3,760
866
5,736
1,206
490
3,352
599
962
1,535
795
1,776
490
1,520
809
870
794
555
51
379
460
4,088
5,858
2,249
151
605
1,535
1,114
3,315
772
992
209
356
267
718
423
4,061
3,719
2,802
1,694
652
939
989
325
237
2015
2016
1996
2005
2005
2018
2008
2018
2018
2018
2018
2018
2018
2011
2015
2018
2018
2018
2020
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
2004
2015
1996
1964
1979
1991
2010
1989
1997
1990
1999
1987
1996
2005
2000
1998
2006
1987
2012
1973
1978
1952
1992
1905
1998
1996
1998
1997
2017
1998
1997
1962
1986
1965
1986
1986
1998
1963
2016
1999
2019
1994
1988
1907
1976
14430 Metcalf Ave
7600 Antioch Road
12807 E. 86th Place N.
1205 Leitchfield Rd.
905 Hwy. 127 N.
11375 Prosperity Farms Road
50 Town Ct.
74350 Country Club Drive
2895 Tampa Road
2851 Tampa Road
7880 West College Drive
7850 West College Drive
11860 Southwest Hwy
6012 Magnolia Beach Road
601 N. East Street
9205 Sprague Road
9055 West Sprague Road
550 Jessup Road
677 Hazen
10540 Fremont Pike
10542 Fremont Pike
1526 Lombard Street
290 Red School Lane
843 Wilbur Avenue
8911 Reisterstown Road
8909 Reisterstown Road
17 Regional Dr.
1744 W. High St.
10 Sterling Drive
1125 Perry Highway
505 Weyman Road
550 South Negley Avenue
2170 Rhine Street
5609 Fifth Avenue
1105 Perry Highway
1848 Greentree Road
100 Knoedler Rd.
150 Sunnyside Blvd
3325 W Plano Parkway
1913 E. Highway 34
Kingsmill Road
10718 Potomac Tennis Lane
10714 Potomac Tennis Lane
724 North Charlotte Street
420 Pulaski Drive
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
Prior Lake, MN
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
Rockford, MI
Rockville Centre, NY
Rockwall, TX
Romeoville, IL
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
Sandusky, MI
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
Silver Spring, MD
13,320
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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
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
1,469
29,849
88,870
59,589
16,837
19,906
21,275
9,557
3,830
12,975
14,222
17,974
8,233
4,483
—
20,310
17,650
—
24,679
10,262
9,790
8,907
5,171
5,697
8,800
24,689
12,658
17,303
22,003
6,942
19,654
—
3,175
11,204
4,082
11,173
19,140
8,892
17,609
12,144
8,975
4,663
14,090
1,400
3,870
10,392
300
904
—
—
140
1,158
711
1,383
—
393
—
—
5
15,932
1,379
112
—
100
1,306
—
—
1
390
425
1,361
—
—
1,845
1,506
—
7,706
—
—
—
—
—
—
—
1
—
59
—
—
630
—
1,870
7,598
3,530
2,580
980
1,050
—
170
1,468
700
3,261
1,046
748
2,386
4,290
2,220
1,895
2,140
2,104
710
1,423
449
370
260
1,050
1,499
—
—
1,390
910
967
475
4,101
1,370
2,792
3,360
443
440
320
1,165
484
3,127
80
630
1,469
30,149
89,774
59,589
16,837
20,046
22,433
10,268
5,213
12,975
14,615
17,974
8,233
4,488
13,546
21,689
17,762
—
24,779
11,364
9,790
8,907
5,172
6,087
9,225
26,050
12,658
17,303
23,848
8,448
19,654
6,739
3,175
11,204
4,082
11,173
19,140
8,892
17,609
12,145
8,975
4,722
14,090
1,400
4,500
10,392
3,983
8,796
12,968
3,901
5,407
5,431
7,787
2,265
867
2,142
1,141
559
996
85
5,552
2,508
—
3,318
2,351
2,715
609
2,949
2,700
3,797
4,374
836
9,129
7,260
3,880
4,376
45
2,064
1,190
278
737
4,684
649
3,029
2,082
634
2,695
1,059
903
1,789
687
2015
2008
2012
2012
2011
2011
2011
2002
2018
2016
2018
2018
2018
2020
2011
2012
2006
2015
2013
2011
2018
1999
2003
2004
2014
2018
2007
2008
2000
2012
2020
1996
2018
2018
2018
2011
2018
2014
2014
2018
1999
2018
1996
2005
2018
2003
2017
2002
1988
1994
1997
1957
1998
1999
2015
1990
1966
1997
2014
2002
2014
1900
1989
2010
1988
1997
1998
1997
1997
1999
2000
2007
1992
2001
2002
2008
1995
1993
1968
1993
2006
1998
2005
2013
1998
1999
2010
1995
1965
1995
4685 Park Nicollet Avenue
4030 Cardinal at North Hills St
5301 Creedmoor Road
7900 Creedmoor Road
5501 Perkiomen Ave
One Hartford Dr.
514 North Prospect Ave
2931 Vance St.
410 Buckingham Road
400 Industries Road
1719 Bellevue Avenue
2125 Hilliard Road
4355 Pheasant Ridge Rd
6070 Northland Dr
260 Maple Ave
720 E Ralph Hall Parkway
Grand Haven Circle
2750 North Victoria Street
Horse Fair
1401 Ezelle St
2045 East 170th Street
1355 Boone Rd. S.E.
2201 Statesville Blvd.
2695 Valleyview Blvd.
6101 Grand Court Road
15290 Huebner Road
8902 Floyd Curl Dr.
555 Washington St.
30311 Camino Capistrano
4402 South 129th Avenue West
70 W. Argyle Ave
8450 McIntosh Rd.
5401 Sawyer Road
3250 12th Street
5511 Swift Road
6150 Edgelake Drive
5509 Swift Road
2741 Blvd. Ave
2751 Boulevard Ave
9300 Antilles Drive
500 Seven Fields Blvd.
378 Fries Mill Road
3947 Kickapoo
1871 Midland Trail
2505 Musgrove Road
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
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
Sunbury, PA
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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
695
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
11,679
16,420
19,842
6,539
5,680
8,216
17,770
9,387
16,041
23,613
11,699
13,378
12,390
33,019
8,238
3,238
1,447
6,183
3,627
6,391
10,784
15,634
1,400
14,508
16,313
7,244
22,123
13,735
8,573
6,911
18,016
1,403
7,446
12,520
2,760
13,300
23,311
3,690
12,712
13,111
6,465
3,126
24,445
2,000
43,384
—
139
—
848
508
—
—
—
1,250
958
—
1,085
837
100
730
543
377
164
53
6
—
—
—
1,643
—
—
—
6,159
—
—
—
—
—
1,347
—
840
—
76
—
—
—
—
—
4,254
—
4,678
880
1,393
1,503
290
360
670
1,135
1,627
1,860
2,649
990
1,890
2,100
2,152
2,015
150
310
140
899
790
1,583
80
874
340
695
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
11,679
16,559
19,842
7,241
6,188
8,216
17,770
9,387
17,183
24,571
11,699
14,463
13,227
33,119
8,825
3,586
1,824
6,347
3,680
6,397
10,784
15,634
1,400
16,067
16,313
7,244
22,123
19,894
8,573
6,911
18,016
1,403
7,446
13,867
2,760
14,140
23,311
3,766
12,712
13,111
6,465
3,126
24,445
6,254
43,384
823
4,580
1,296
1,142
2,632
1,408
3,176
614
1,506
6,218
774
2,536
3,365
4,396
1,009
603
827
2,811
1,676
1,153
718
1,057
905
2,370
3,143
463
1,408
4,005
558
531
2,990
880
1,551
2,766
241
3,538
1,742
593
2,923
865
408
249
1,543
2,513
11,166
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
2018
2018
2009
2018
2018
2015
1996
2013
2011
2018
2011
2019
2015
2012
2018
2018
2018
2018
1997
2011
1990
2005
1982
1997
1998
1999
2014
1984
2013
2001
1985
2013
1963
1996
2016
1998
1990
1996
1999
1999
1996
2013
1995
2012
2011
1981
1990
2010
1984
1999
2015
1996
2014
2006
1976
2001
2006
2009
2011
2000
1960
1970
2006
1997
2001
2501 Musgrove Road
1900 10th St.
3000 Windmill Road
200 London Road
830 Berkshire Rd.
250 Highway 210 West
52565 State Road 933
7743 County Road 1
Botley Road, Park Gate
655 Main St
6025 North Assembly Street
3089 Old Jacksonville Road
6543 Chippewa St
750 Mississippi River
Stone Road
Priory Road
2441 E. Broad St.
2806 Peachtree Place
2814 Peachtree Rd.
1410 N Augusta St
11095 East Fourteen Mile Road
38200 Schoenherr Road
1616 McElroy Rd.
Scholars Lane
370 Whitestone Corner Road
800 Court Street Circle
1150 Tilton Drive
1915 North 34th Street
5601 South Orchard Southtreet
14950 Casey Road
395 8th Avenue
4204 Moores Lane
2450 Parr Drive
423 Covington Avenue
517 South Erie Southtreet
1221 Graham Dr
1657 Silverton Rd
120 W 8th St
1931 Southwest Arvonia Place
8101 Bellona Avenue
509 East Joppa Road
7001 North Charles Street
925 West South Boulevard
81 S. Stanfield Rd.
6949 Main Street
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
Depreciation
(1)
Year
Acquired
Year Built
Address
Triple-net:
Tulsa, OK
Tulsa, OK
Tulsa, OK
Tulsa, OK
Tulsa, OK
Tustin, CA
Twinsburg, OH
Union, KY
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
Wayne, NJ
Wellingborough, UK
West Bend, WI
West Des Moines, IA
West Milford, NJ
West Orange, NJ
West Reading, PA
Westerville, OH
Westerville, OH
Westerville, OH
Westerville, OH
Westfield, IN
—
—
—
12,935
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,390
1,320
1,100
1,752
890
840
1,446
—
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
1,427
1,480
620
828
1,960
1,347
890
740
—
1,420
1,582
890
7,110
10,087
27,007
28,421
9,410
15,299
5,919
—
2,372
2,558
2,962
28,393
10,674
10,094
3,187
3,263
22,593
37,299
25,950
6,990
8,294
5,731
14,588
14,726
3,003
6,487
18,407
39,084
8,562
2,510
10,313
30,810
3,030
15,674
5,724
17,790
5,103
24,614
19,389
12,118
8,287
—
5,371
10,279
15,964
1,102
—
2,233
—
—
537
—
33,617
—
—
—
—
111
—
—
—
—
671
26
—
—
—
1
4,495
2,084
—
—
—
1,047
57
1,701
1,337
—
—
774
38
—
—
—
—
4,146
25,574
—
—
1
1,390
1,320
1,100
1,752
890
840
1,446
2,242
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
1,312
40
875
2,000
605
1,427
1,639
620
828
1,960
1,347
890
740
2,566
1,420
1,582
890
8,212
10,087
29,240
28,421
9,410
15,836
5,919
31,375
2,372
2,558
2,962
28,393
10,785
10,094
3,187
3,263
22,593
37,970
25,976
6,990
8,294
5,731
14,589
19,221
5,087
6,487
18,407
39,084
9,481
2,567
12,014
32,147
3,030
15,674
6,339
17,828
5,103
24,614
19,389
12,118
12,433
23,008
5,371
10,279
15,965
2,542
2,417
3,182
2,830
836
4,448
432
558
242
1,326
1,519
1,777
3,324
710
1,626
1,673
3,925
10,209
6,004
511
595
397
2,713
4,592
2,531
483
1,202
2,426
1,481
372
6,070
7,798
218
1,301
1,102
4,256
372
1,406
1,507
749
10,835
194
369
719
2,943
2010
2011
2015
2017
2017
2011
2018
2018
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
2018
2015
2010
2018
2019
2018
2018
1998
2017
2018
2018
2014
1998
2012
2017
2014
2009
1965
2014
2020
1981
1998
1999
2011
2009
1997
1999
1996
1993
1965
2013
2006
1996
1996
2013
2005
1999
1930
1997
1990
2015
1996
1989
1999
1964
1998
2015
2011
2006
2000
1998
1975
2001
2020
1982
1980
2013
7220 S. Yale Ave.
7902 South Mingo Road East
18001 East 51st Street
701 W 71st Street South
7210 South Yale Avenue
240 East 3rd St
8551 Darrow Road
9255 US-42
709 Rice Avenue
2601 Valparaiso St.
2501 Valparaiso St.
2811 N.E. 139th Street
1600 Center Rd.
1450 East Venice Avenue
420 4th Ct.
410 4th Ct.
5520 Indian River Rd
2601 Evesham Road
113 South Route 73
1086 Dumont Circle
2330 Village Boulevard
2300 Village Boulevard
20 John Kissinger Drive
500 Cherry Street
611 S. Brooks St.
115 South Providence Road
1975 Tice Valley Boulevard
1226 Rossmoor Parkway
Little Aston Road
1607 4th St
50 Indian Neck Rd.
274 King George Rd
201 West Ridgeway Avenue
800 Hamburg Turnpike
159 Northampton
2130 Continental Dr
5010 Grand Ridge Drive
197 Cahill Cross Road
510 Prospect Avenue
425 Buttonwood Street
690 Cooper Rd.
702 Polaris Parkway
1060 Eastwind Drive
215 Huber Village Boulevard
937 E. 186th Street
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Triple-net:
Westlake, OH
Weston Super Mare, UK
Wheaton, MD
Whippany, NJ
Whitehall, MI
Wichita, KS
Wichita, KS
Wichita, KS
Wichita, KS
Wichita, KS
Wilkes-Barre, PA
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
Triple-net Total
—
—
—
—
—
—
—
12,300
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
855
2,517
3,864
1,571
—
1,400
860
630
260
900
570
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
11,963
7,054
3,788
14,977
—
11,000
8,873
19,747
2,240
10,134
2,301
3,456
5,728
6,924
1,898
6,430
8,653
9,494
13,450
36,948
9,500
2,991
15,355
6,514
2,514
7,937
14,822
6,915
6,678
20,935
5,108
54,099
9,060
14,914
9,439
10,690
9,354
4,210
7,584
8,266
10,689
6,669
22,400
—
1,028
—
—
8,434
—
—
—
129
—
686
—
6
—
—
—
—
114
—
—
—
—
—
7
509
—
—
844
886
298
5
—
6,000
—
—
—
—
—
—
1,206
—
—
1,691
855
2,787
3,864
1,571
1,645
1,400
860
630
260
900
570
753
1,187
919
780
70
1,774
800
1,376
2,843
2,266
210
400
1,148
360
1,110
1,152
1,045
1,742
1,317
594
3,500
2,300
773
1,561
1,075
976
1,050
1,121
3,279
380
2,131
1,610
11,963
7,812
3,788
14,977
6,789
11,000
8,873
19,747
2,369
10,134
2,987
3,456
5,734
6,924
1,898
6,430
8,653
9,608
13,450
36,948
9,500
2,991
15,355
6,521
3,023
7,937
14,822
7,658
7,395
21,233
5,113
54,099
15,060
14,914
9,439
10,690
9,354
4,210
7,584
9,154
10,689
6,669
24,091
805
1,535
270
1,014
54
5,732
2,323
4,352
346
2,504
1,035
272
1,069
468
170
2,797
592
2,769
892
2,356
647
1,701
2,759
1,213
1,406
1,855
972
1,506
1,467
2,275
850
15,931
5,708
1,035
779
681
631
336
546
1,509
1,870
505
6,410
2018
2013
2018
2018
2020
2006
2011
2012
2015
2011
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
1997
2011
1961
2000
2012
1997
2012
2009
1992
2012
1992
1970
2000
1976
1972
1987
1974
1970
1998
1988
1984
1999
2012
1999
1996
2013
1999
2009
2011
2015
2001
2009
1993
1995
1990
1963
1972
1983
1979
2006
2013
1987
2009
28400 Center Ridge Road
141b Milton Road
11901 Georgia Avenue
18 Eden Lane
6827 Whitehall Rd
505 North Maize Road
10604 E 13th Street North
2050 North Webb Road
900 N Bayshore Dr
10600 E 13th Street North
300 Courtright Street
1548 Sans Souci Parkway
1811 Jamestown Rd
300 Leader Drive
101 Leader Drive
201 Kimberly Lane
37603 Euclid Avenue
810 S Broom Street
700 1/2 Foulk Road
5651 Limestone Road
700 Foulk Road
3501 Converse Dr.
3828 Independence Blvd
23352 Courthouse Hwy
2980 Reynolda Rd.
720 Roper Road
1057 Willa Springs Drive
Whitchurch Road
378 Prestonwood Road
2195 Century Avenue South
803 S Main St
101 Barry Road
378 Plantation St.
493 Stony Hill Road
1480 Oxford Valley Road
14 Lincoln Avenue
200 Pauline Drive
2400 Kingston Court
1770 Barley Road
Rosetta Way, Boroughbridge Road
100 Sunset Drive
38220 Henry Drive
11755 N Michigan Rd
$
123,652
$
905,073
$
7,397,004
$
596,731
$
957,163
$
7,941,645
$
1,432,228
117
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2020
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Outpatient Medical:
Addison, IL
Agawam, MA
Allen, TX
Alpharetta, GA
Alpharetta, GA
Alpharetta, GA
Alpharetta, GA
Alpharetta, GA
Appleton, WI
Appleton, WI
Arcadia, CA
Arlington, TX
Arlington Heights, IL
Atlanta, GA
Atlanta, GA
Atlanta, GA
Austin, TX
Austin, TX
Baltimore, MD
Bellaire, TX
Bellevue, NE
Bend, OR
Berkeley Heights, NJ
Beverly Hills, CA
Beverly Hills, CA
Beverly Hills, CA
Beverly Hills, CA
Beverly Hills, CA
Boca Raton, FL
Boca Raton, FL
Bridgeton, MO
Bridgeton, MO
Burleson, TX
Burnsville, MN
Cary, NC
Cedar Park, TX
Chapel Hill, NC
$
5,455
$
102
$
18,842
$
137
$
102
$
18,979
$
—
—
—
—
—
—
—
6,897
12,112
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
33,729
78,272
—
—
—
—
—
—
—
—
—
1,072
726
1,862
773
1,769
476
548
1,881
3,782
5,408
82
1,233
1,947
—
4,931
1,066
1,688
4,490
5,572
—
16,516
49,555
20,766
18,863
19,863
32,603
52,772
109
31
450
1,701
10
—
2,816
132
488
5,164
14,196
—
18,902
36,152
14,694
17,103
8,866
20,440
23,219
18,243
2,826
24,248
43,425
18,720
10,112
6,784
31,222
72,478
16,680
30,338
92,806
40,730
1,192
31,690
28,639
87,366
34,002
12,312
21,221
6,228
12,611
31,596
11,146
23,753
2,390
4
1,402
—
642
460
323
826
7
15
5,506
572
623
2,465
1,841
7,261
—
—
22
6
10
3
—
3,508
481
1,996
1,182
2,111
4,320
497
1,917
254
933
2,272
349
6,338
1
1,072
726
1,862
773
1,769
476
548
1,881
3,782
5,618
82
1,233
2,172
—
5,387
1,066
1,688
4,490
5,572
—
16,516
49,555
20,766
18,885
19,863
32,603
52,764
214
251
450
1,501
10
—
2,816
132
488
5,168
15,598
—
19,544
36,612
15,017
17,929
8,873
20,455
28,515
18,815
3,449
26,488
45,266
25,525
10,112
6,784
31,244
72,484
16,690
30,341
92,806
44,238
1,651
33,686
29,821
89,485
38,217
12,589
23,138
6,682
13,544
33,868
11,495
30,091
2,391
1,151
296
5,901
—
7,940
16,249
6,282
7,230
399
888
12,940
5,040
243
9,774
15,310
13,575
1,354
613
1,169
3,576
6,415
2,248
4,457
9,079
860
6,519
7,056
16,264
16,237
4,486
8,603
1,370
5,196
10,455
1,268
5,076
165
2018
2019
2012
2011
2011
2011
2011
2011
2019
2019
2006
2012
2020
2012
2012
2006
2017
2019
2019
2019
2010
2019
2019
2015
2015
2015
2015
2015
2006
2012
2010
2017
2011
2013
2019
2017
2019
2012
2005
2006
1900
1993
1999
2003
2007
2004
2005
1984
2012
1997
1984
2006
1991
2017
2015
2014
2007
2010
2001
1978
1946
1955
1946
1950
1989
1995
1993
2006
2008
2007
2014
2007
2014
2010
303 West Lake Street
230-232 Main Street
1105 N Central Expressway
940 North Point Parkway
3400-A Old Milton Parkway
3400-C Old Milton Parkway
11975 Morris Road
3300 Old Milton Parkway
5320 W Michael Drive
2323 N Casaloma Drive
301 W. Huntington Drive
902 W. Randol Mill Road
1632 W. Central Road
975 Johnson Ferry Road
5670 Peachtree-Dunwoody Road
755 Mt. Vernon Hwy.
5301-B Davis Lane
5301-A Davis Lane
1420 Key Highway
5410 - 5420 WEST LOOP SOUTH
2510 Bellevue Medical Center Drive
1501 Northeast Medical Center Drive
1 Diamond Hill Road
9675 Brighton Way
415 North Bedford
416 North Bedford
435 North Bedford
436 North Bedford
9970 S. Central Park Blvd.
9960 S. Central Park Boulevard
12266 DePaul Dr
3440 De Paul Ln.
12001 South Freeway
14101 Fairview Dr
540 Waverly Place
1401 Medical Parkway, Building 2
100 Perkins Drive
(Dollars in thousands)
Description
Encumbrances
Land
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Outpatient Medical:
Chapel Hill, NC
Chapel Hill, NC
Chapel Hill, 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
Clarkson Valley, MO
Clear Lake, TX
Clyde, NC
Columbia, MO
Columbia, MO
Columbia, MO
Columbia, MD
Columbia, MD
Columbia, MD
Coon Rapids, MN
Costa Mesa, CA
Dade City, FL
Dallas, TX
Dallas, TX
Deerfield Beach, FL
Delray Beach, FL
Dunkirk, MD
Durham, NC
Durham, NC
El Paso, TX
Elgin, IL
Elmhurst, IL
Elyria, OH
Escondido, CA
Everett, WA
Fenton, MO
Fenton, MO
Florham Park, NJ
Flower Mound, TX
(Dollars in thousands)
5,050
5,050
14,356
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
20,411
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,970
1,970
5,681
10
30
40
1,746
6,078
1,045
826
1,114
1,075
537
—
—
—
1,433
438
488
199
23
2,333
12,159
—
22,033
1,211
122
6,086
2,408
1,882
259
1,403
1,751
677
1,634
41
3,263
2,278
4,842
958
369
8,578
4,620
8,874
8,925
25,035
24,796
61,799
40,606
8,645
15,842
22,252
5,557
15,459
7,165
10,122
17,880
35,592
13,882
22,062
12,949
16,033
23,403
33,885
19,232
72,636
26,679
24,332
5,511
15,418
18,007
7,809
34,767
2,458
25,163
44,425
17,075
9,443
39,562
28,176
20,967
26,010
27,461
13,911
61,779
—
84
5
15
86
3,036
1,259
609
102
372
368
1
1
187
287
—
20
2
58
524
14
3,227
1,884
595
1,320
1,087
—
10
3,581
793
1,889
33
2
3
1,633
1,355
259
3
2
64
132
198
—
—
1,970
1,970
5,681
10
30
40
1,746
6,078
1,045
826
1,114
1,075
537
2
—
2,319
1,433
438
488
199
9,353
2,333
12,159
—
22,033
1,211
122
6,542
2,540
2,449
259
1,403
1,751
677
1,634
41
3,263
2,278
4,842
958
369
8,578
4,620
8,958
8,930
25,050
24,882
64,835
41,865
9,254
15,944
22,624
5,925
15,460
7,166
10,309
18,165
35,592
11,583
22,064
13,007
16,557
23,417
27,782
21,116
73,231
27,999
25,419
5,511
15,428
21,132
8,470
36,089
2,491
25,165
44,428
18,708
10,798
39,821
28,179
20,969
26,074
27,593
14,109
61,779
—
819
924
2,386
2,652
6,134
3,884
1,197
973
2,201
590
965
452
1,039
4,948
15,581
1,835
1,087
1,536
1,702
2,095
10,012
6,749
6,135
7,677
5,963
1,873
2,914
2,397
3,859
19,241
321
1,493
2,166
9,338
558
3,245
1,772
1,449
9,697
9,230
3,931
5,858
—
2018
2018
2018
2019
2019
2019
2019
2019
2019
2019
2019
2019
2019
2012
2009
2013
2019
2019
2019
2019
2015
2012
2018
2013
2017
2011
2013
2018
2011
2006
2019
2019
2019
2006
2020
2018
2019
2019
2010
2013
2013
2017
2014
2007
2007
2006
1971
1994
1989
1998
2005
1973
1985
2008
2006
2001
2013
2010
2014
2012
1994
1999
2007
1982
2002
2009
2014
2007
1998
2014
2010
2001
1985
1997
2000
2004
1997
2004
2011
2008
1994
2011
2009
2009
2017
1900
6011 Farrington Road
6013 Farrington Road
2226 North Carolina Highway 54
1900 Randolph Road
1918 Randolph Road
1718 East Fourth Street
309 South Sharon Amity Road
444 Montgomery Street
480 4th Avenue
450 4th Avenue
971 Lane Ave
959 Lane Ave
4850 Red Bank Expressway
3301 Mercy Health Boulevard
15945 Clayton Rd
1010 South Ponds Drive
581 Leroy George Drive
1601 E. Broadway
1605 E. Broadway
1705 E. Broadway
5450 & 5500 Knoll N Dr.
10700 Charter Drive
10710 Charter Drive
11850 Blackfoot Street NW
1640 Newport Boulevard
13413 US Hwy 301
8196 Walnut Hill Lane
10740 North Central Expressway
1192 East Newport Center Drive
5130-5150 Linton Blvd.
10845 Town Center Blvd
120 William Penn Plaza
3916 Ben Fanklin Boulevard
2400 Trawood Dr.
745 Fletcher Drive
133 E Brush Hill Road
303 Chestnut Commons Drive
225 East 2nd Avenue
13020 Meridian Ave. S.
1011 Bowles Avenue
1055 Bowles Avenue
150 Park Avenue
Medical Arts Drive
Description
Encumbrances
Land
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Outpatient Medical:
Flower Mound, TX
Flower Mound, TX
Fort Washington, PA
Fort Worth, TX
Fort Worth, TX
Frederick, MD
Frederick, MD
Fresno, CA
Frisco, TX
Frisco, TX
Gardendale, AL
Garland, TX
Gastonia, NC
Gig Harbor, WA
Glendale, CA
Gloucester, VA
Grand Prairie, TX
Grapevine, TX
Grapevine, TX
Greenville, SC
Harrisburg, NC
Hattiesburg, MS
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
Houston, TX
Howell, MI
Humble, TX
Huntersville, NC
Independence, MO
Jackson, MI
Jacksonville, FL
Jacksonville, FL
—
—
—
—
—
—
—
—
—
—
4,184
—
—
—
—
—
—
—
—
—
—
17,633
—
—
—
—
—
—
—
—
—
—
—
—
3,644
—
—
—
—
—
—
—
—
737
4,164
2,015
401
462
1,065
1,930
1,497
—
—
1,150
4,952
569
80
70
2,128
981
—
3,365
1,567
1,347
3,155
1,250
2,587
7,372
5,492
—
2,164
2,316
9,943
2,988
5,837
3,688
1,099
377
—
2,000
—
—
762
668
3,562
1,113
9,276
27,027
16,104
5,266
26,020
7,430
18,748
12,669
18,635
15,309
8,162
32,718
1,092
30,810
44,354
9,169
6,086
5,943
15,669
5,167
3,059
34,710
29,254
5,654
24,027
18,718
8,834
5,333
5,332
—
18,018
33,109
13,313
1,604
13,660
—
13,928
9,941
42,143
3,480
17,294
27,249
10,970
429
1,414
2,040
2,752
205
—
195
8
235
2,588
231
—
615
1,332
163
40
—
4,778
3,089
585
—
23
57
1
42
214
51
9
5
—
365
1,370
132
81,406
583
10,607
805
—
60
333
—
56
1,082
737
4,164
2,015
2,805
462
1,065
1,930
1,497
—
—
1,150
4,952
569
80
70
2,128
981
2,081
3,365
1,790
1,347
3,155
1,250
2,587
7,372
5,492
—
2,164
2,316
9,943
2,988
5,837
3,688
12,815
377
2,338
2,000
1,702
—
762
668
3,562
1,113
9,705
28,441
18,144
5,614
26,225
7,430
18,943
12,677
18,870
17,897
8,393
32,718
1,707
32,142
44,517
9,209
6,086
8,640
18,758
5,529
3,059
34,733
29,311
5,655
24,069
18,932
8,885
5,342
5,337
—
18,383
34,479
13,445
71,294
14,243
8,269
14,733
8,239
42,203
3,813
17,294
27,305
12,052
2,336
7,366
731
1,800
7,049
721
1,822
601
7,881
7,619
880
2,392
70
6,057
2,749
947
2,702
2,405
5,311
1,192
395
1,472
1,962
381
1,953
1,303
2,197
230
209
9
499
14,193
4,530
19,648
1,494
—
2,146
1,270
3,328
158
5,519
2,171
539
2015
2014
2020
2014
2012
2019
2019
2019
2007
2007
2018
2019
2019
2010
2019
2018
2012
2014
2014
2019
2019
2019
2019
2019
2019
2019
2012
2019
2019
2011
2016
2012
2012
2012
2018
2020
2016
2013
2019
2020
2013
2019
2020
2014
2012
1980
2007
2012
1979
2006
2004
2004
2004
2005
2018
2000
2009
2008
2008
2009
2002
2002
1987
2012
2012
2008
2002
2005
2005
2013
1999
2015
1900
2019
2005
2007
1998
2011
2013
2017
2014
2004
2007
2009
2006
2000
2560 Central Park Avenue
4370 Medical Arts Drive
467 Pennsylvania Avenue
7200 Oakmont Boulevard
10840 Texas Health Trail
194 Thomas Johnson Drive
45 Thomas Johnson Drive
1105 E Spruce Ave
4401 Coit Road
4461 Coit Road
2217 Decatur Highway
7217 Telecome Parkway
934 Cox Road
11511 Canterwood Blvd. NW
1500 E Chevy Chase Drive
5659 Parkway Drive
2740 N State Hwy 360
2040 W State Hwy 114
2020 W State Hwy 114
10 Enterprise Boulevard
9550 Rocky River Road
3688 Veterans Memorial Drive
15195 Heathcote Blvd
2825 Siena Heights Drive
2845 Siena Heights Drive
2865 Siena Heights Drive
12860 Troxler Avenue
10 Cranberry Drive
1955 NY-52
F.M. 1960 & Northgate Forest Dr.
13105 Wortham Center Drive
15655 Cypress Woods Medical Dr.
10701 Vintage Preserve Parkway
2727 W Holcombe Boulevard
20207 Chasewood Park Drive
11476 Space Center Blvd
1225 South Latson Road
8233 N. Sam Houston Parkway E.
10030 Gilead Road
19401 East 37th Terrace Court South
1201 E Michigan Avenue
10475 Centurion Parkway North
5742 Booth Road
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Outpatient Medical:
Jefferson City, TN
Jonesboro, GA
Jonesboro, GA
Jupiter, FL
Jupiter, FL
Katy, TX
Katy, TX
Katy, TX
Knoxville, TN
La Jolla, CA
La Jolla, CA
Lacey, WA
Lake St Louis, MO
Lakeway, TX
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Little Rock, AR
Los Alamitos, CA
Lowell, MA
Loxahatchee, FL
Loxahatchee, FL
Loxahatchee, FL
Lubbock, TX
Lynbrook, NY
Madison, WI
Margate, FL
Marietta, GA
Mars, PA
Matthews, NC
Menasha, WI
Merced, CA
Meridian, ID
Mesa, AZ
Mesa, AZ
Mission Hills, CA
Missouri City, TX
Mobile, AL
Monroeville, PA
Moorestown, NJ
Mount Juliet, TN
Mount Kisco, NY
(Dollars in thousands)
—
—
—
—
—
—
—
—
—
—
—
6,402
—
—
—
—
—
—
—
—
—
—
—
—
42,233
26,580
—
—
—
—
—
—
—
—
—
—
22,797
—
15,447
—
—
—
—
109
567
627
2,252
2,825
—
2,025
3,699
199
12,855
9,425
1,751
240
2,801
433
2,319
4,180
5,864
3,021
39
3,016
1,637
1,340
1,553
2,286
10,028
3,670
219
2,682
1,925
10
1,374
—
3,206
3,158
3,889
—
1,360
2,759
1,544
6
1,566
12,632
16,453
16,329
16,554
11,415
5,858
11,530
7,557
12,701
45,961
32,658
26,525
10,345
14,249
—
4,928
4,612
20,064
22,502
16,058
18,340
9,663
5,048
6,509
4,694
72,893
37,319
28,329
9,293
20,053
8,307
32,741
13,861
13,772
27,107
5,588
5,816
42,276
7,143
25,180
10,012
50,896
11,697
51,220
3
1
70
4,992
1,367
—
1,255
1,668
3
1,932
627
—
337
—
—
1,602
2,913
3,070
5,944
24
—
1,324
1,526
1,938
46
1,069
55
3
1,516
1,132
571
2,967
1,164
18
1,122
1,257
6,914
—
13
1,075
918
1,878
38
109
567
627
2,639
3,036
—
2,025
3,699
199
12,869
9,440
1,751
240
2,801
433
2,319
4,180
5,864
3,021
39
3,016
1,719
1,440
1,650
2,286
10,028
3,670
219
2,703
1,925
10
1,345
—
3,206
3,158
3,889
4,791
1,360
2,759
1,544
362
1,601
12,632
16,456
16,330
16,624
16,020
7,014
11,530
8,812
14,369
45,964
34,576
27,137
10,345
14,586
—
4,928
6,214
22,977
25,572
22,002
18,364
9,663
6,290
7,935
6,535
72,939
38,388
28,384
9,296
21,548
9,439
33,312
16,857
14,936
27,125
6,710
7,073
44,399
7,143
25,193
11,087
51,458
13,540
51,258
1,366
1,304
1,224
6,960
3,555
145
325
961
2,713
8,509
5,951
1,061
5,879
—
2,222
3,160
823
858
1,091
7,584
303
3,141
3,801
3,171
2,457
3,297
1,679
992
4,727
492
2,528
3,578
6,008
1,588
218
247
12,014
774
1,980
721
16,887
6,467
1,877
2019
2019
2019
2006
2007
2019
2020
2020
2019
2015
2015
2018
2010
2007
2007
2006
2020
2020
2019
2007
2011
2006
2006
2006
2019
2018
2019
2019
2016
2020
2019
2016
2009
2019
2020
2020
2014
2015
2018
2020
2011
2007
2019
2001
2009
2007
2001
2004
2020
2016
2006
2012
1989
1988
1971
2008
1900
1997
1991
2017
2017
2014
2003
2020
1997
1993
1994
2006
1962
2012
2004
2016
2006
1994
1994
2010
2009
2016
2016
1986
2016
2003
1979
2012
2005
1996
120 Hospital Drive
7813 Spivey Station Boulevard
7823 Spivey Station Boulevard
550 Heritage Dr.
600 Heritage Dr.
0 Grand Parkway & Morton Ranch Road
21502 Merchants Way
1331 West Grand Parkway North
1926 Alcoa Highway
4150 Regents Park Row
4120 & 4130 La Jolla Village Drive
2555 Marvin Road Northeast
400 Medical Dr
Lohmans Crossing Road
1776 E. Warm Springs Rd.
2870 S. Maryland Pkwy.
9880 West Flamingo Road
4980 West Sahara Ave
6119 Midtown Avenue
3771 Katella Ave.
839 Merrimack Street
12977 Southern Blvd.
12989 Southern Blvd.
12983 Southern Blvd.
4515 Marsha Sharp Freeway
444 Merrick Road
1102 South Park Street
2960 N. State Rd 7
4800 Olde Towne Parkway
6998 Crider Road
1450 Matthews Township Parkway
1550 Midway Place
315 Mercy Ave.
3277 E Louise Drive
1910 S. Gilbert Road
1833 N. Power Road
11550 Indian Hills Road
7010 Highway 6
6144 Airport Boulevard
2550 Mosside Blvd
401 Young Avenue
5002 Crossings Circle
90 - 110 South Bedford Road
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Outpatient Medical:
Mount Vernon, IL
Murrieta, CA
Murrieta, CA
Myrtle Beach, SC
Nampa, ID
Newburgh, NY
Newburyport, MA
Niagara Falls, NY
Niagara Falls, NY
Norfolk, VA
North Canton, OH
North Easton, MA
North Easton, MA
Norwood, OH
Novi, MI
Oklahoma City, OK
Oxford, NC
Pasadena, TX
Pearland, TX
Pearland, TX
Phoenix, AZ
Phoenix, AZ
Phoenix, AZ
Phoenix, AZ
Plano, TX
Plantation, FL
Port Orchard, WA
Porter, TX
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Prince Frederick, MD
Prince Frederick, MD
Rancho Mirage, CA
Redmond, WA
Richmond, TX
Richmond, VA
Rockwall, TX
Rolla, MO
Rome, GA
Roseville, MN
Roxboro, NC
—
—
—
—
15,675
—
—
—
—
—
12,967
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9,767
—
—
—
—
18,770
—
—
—
—
—
—
—
—
—
—
—
—
3,800
—
1,357
3,439
9,213
3,104
1,433
454
1,138
2,518
2,336
2,882
1,017
895
216
478
1,700
1,500
9,594
199
109
229
1,149
793
8,563
2,810
3,746
2,144
4,035
6,513
5,128
229
179
7,292
5,015
2,000
2,969
132
1,931
99
2,963
368
24,892
—
47,190
3,658
21,566
32,354
19,370
10,891
8,362
26,989
24,452
19,876
15,999
6,638
36,944
18,762
4,971
8,009
11,253
32,753
3,853
2,207
5,867
48,018
83,209
10,666
22,716
15,119
36,880
30,459
27,863
20,769
26,889
12,801
15,141
26,697
9,118
26,697
17,197
47,639
29,597
20,169
2,477
144
—
301
72
15
25
74
545
310
—
17
13
12
29
16
187
—
158
6
191
131
65
21
12,830
5,220
6,012
102
—
252
21
21
15
34
259
14
1,080
4
1,482
448
1
725
59
—
—
3,800
—
1,357
3,439
9,213
3,104
1,721
454
1,138
2,518
2,336
2,882
1,017
895
216
478
1,700
1,500
9,807
199
109
229
1,149
793
8,575
2,810
3,746
2,144
4,035
6,513
5,128
229
179
7,292
5,015
2,000
3,090
132
1,931
99
2,963
368
25,036
—
47,491
3,730
21,581
32,379
19,444
11,148
8,672
26,989
24,469
19,889
16,011
6,667
36,960
18,949
4,971
8,167
11,259
32,731
3,984
2,272
5,888
60,848
88,429
16,666
22,818
15,119
37,132
30,480
27,884
20,784
26,923
13,060
15,155
27,777
9,122
28,058
17,645
47,640
30,322
20,228
2,477
8,362
—
22,793
850
832
1,041
1,502
6,612
3,934
2,342
869
966
752
513
2,681
5,982
339
1,532
2,021
7,497
349
219
653
29,815
26,476
9,013
1,958
346
1,178
872
901
686
1,798
1,031
828
10,609
1,084
10,687
5,281
16,641
3,235
1,064
171
2011
2014
2010
2019
2019
2019
2019
2007
2007
2019
2019
2019
2019
2019
2019
2013
2019
2012
2012
2014
2019
2019
2019
2006
2012
2006
2018
2018
2019
2019
2019
2019
2019
2019
2019
2010
2015
2012
2012
2011
2019
2019
2019
2012
1900
2011
1996
2017
2015
2008
1995
2004
2014
2014
2007
2008
2006
2008
2008
2011
2013
2013
2013
1980
1986
1994
1998
2005
1997
1995
2019
2008
2010
2006
2012
2009
1991
2005
2011
2016
2008
2008
2009
2005
1994
2000
2 Good Samaritan Way
28078 Baxter Rd.
28078 Baxter Rd.
8170 Rourk Street
1510 12th Avenue
1200 NY-300
One Wallace Bashaw Jr. Way
6932 - 6934 Williams Rd
6930 Williams Rd
155 Kingsley Lane
7442 Frank Avenue
15 Roche Brothers Way
31 Roche Brothers Way
4685 Forest Avenue
26750 Providence Parkway
535 NW 9th Street
107 East McClanahan Street
5001 E Sam Houston Parkway S
2515 Business Center Drive
11511 Shadow Creek Parkway
9225 N 3rd Street
9327 North 3rd Street
9100 N 2nd Street
2222 E. Highland Ave.
6020 West Parker Road
851-865 SW 78th Ave.
450 South Kitsap Boulevard
25553 US Highway 59
2507 South Road
30 Columbia Street
600 Westage Drive
1910 South Road
130 Hospital Road
110 Hospital Road
72780 Country Club Drive
18100 NE Union Hill Rd.
22121 FM 1093 Road
7001 Forest Avenue
3142 Horizon Road
1605 Martin Spring Drive
330 Turner McCall Boulevard
1835 W County Road C
799 Doctors Court
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
—
—
—
—
—
25,000
—
—
—
5,115
8,617
—
—
12,846
—
—
—
—
—
—
—
11,436
—
—
—
—
—
—
—
—
—
—
60,479
—
—
—
—
—
14,046
—
18,899
—
—
3,050
2,915
—
—
278
295
—
4,410
1,242
509
707
—
—
3,451
3,000
2,875
592
698
2,721
49
2,706
4,966
696
1,566
3,543
1,113
—
4,319
6,115
8,829
3,345
3,361
2,903
—
6,404
6
125
35
2,250
441
3,981
2,050
303
12,073
11,141
2,338
28,384
185
39,284
20,618
38,428
11,616
11,350
18,089
21,135
32,186
21,176
—
15,471
18,036
30,549
6,615
37,695
39,507
16,844
37,211
11,511
15,532
12,910
64,307
12,234
15,510
12,568
541
12,039
114,853
36,187
24,251
96,075
164
113
28,632
2,537
31,706
12,175
18,069
55
1,746
20,605
2,703
11,594
—
1,276
449
6
15
195
62
3,591
12
—
—
—
48
6
396
392
13
46
293
—
2,473
—
—
1,868
247
223
3,530
72
—
1,832
907
—
—
346
852
17
—
6
3,050
2,915
5,304
5,277
11,872
295
4,407
4,410
1,242
509
773
4,574
3,121
3,451
3,000
2,875
592
698
2,721
49
2,701
4,966
696
1,620
3,543
1,113
—
4,319
6,115
8,850
3,345
3,361
2,903
—
6,477
99
125
35
2,250
441
3,981
2,050
303
12,128
12,887
17,639
25,810
185
39,284
17,487
38,877
11,622
11,365
18,218
16,623
32,656
21,188
—
15,471
18,036
30,597
6,621
38,091
39,904
16,857
37,257
11,750
15,532
15,383
64,307
12,234
17,378
12,794
764
15,569
114,925
36,187
26,010
96,889
164
113
28,978
3,389
31,723
12,175
18,075
1,153
1,157
4,488
6,014
206
7,523
4,184
19,658
1,282
4,895
6,179
2,504
8,361
1,838
—
1,185
6,515
9,556
428
7,590
15,060
797
15,306
5,486
7,054
535
23,421
3,558
1,085
1,869
384
3,981
3,795
12,029
11,369
33,093
8
6
2,479
471
2,778
1,658
3,403
2016
2019
2014
2014
2014
2014
2014
2010
2018
2010
2010
2013
2014
2018
2014
2019
2012
2012
2019
2014
2011
2019
2011
2010
2012
2020
2011
2011
2020
2015
2015
2015
2019
2009
2006
2010
2018
2018
2018
2018
2018
2015
2016
2017
2006
1976
1998
1996
2013
1989
2010
2007
1996
2007
2014
1969
2004
1900
2017
2004
2004
2012
2006
2007
2009
2007
2007
2005
2002
2013
2003
1986
2017
1976
1985
2013
1991
1997
2012
1962
1961
1981
2000
2010
2017
2014
5206 Research Drive
150 E Sonterra Blvd
23861 McBean Parkway
23929 McBean Parkway
23871 McBean Parkway
23803 McBean Parkway
24355 Lyons Avenue
5350 Tallman Ave
556 Egg Harbor Road
1515 St Francis Ave
1601 St Francis Ave
106 Vision Park Boulevard
4955 Van Nuys Boulevard
2200 NW Myhre Road
Central Avenue
925 E. Southlake Boulevard
1545 East Southlake Boulevard
1545 East Southlake Boulevard
305 Bicentennial Highway
225 Smith Avenue N.
435 Phalen Boulevard
2388 - 2488 N California Street
257 Lafayette Avenue
5838 Harbour View Blvd.
11555 University Boulevard
1630 Gateway Drive
1608 South J Street
14547 Bruce B Downs Blvd
5620 Wilbur Ave
2118 Greenspring Drive
14591 Newport Ave
14642 Newport Ave
1814 Roseland Boulevard
6815 Noble Ave.
900 Centennial Blvd.
200 Bowman Drive
6612 Fish Pond Road
6620 Fish Pond Rd
601 Highway 6 West
6600 Fish Pond Rd
100 Trich Drive
1901 Westwood Center Boulevard
2460 N I-35 East
Outpatient Medical:
San Antonio, TX
San Antonio, TX
Santa Clarita, CA
Santa Clarita, CA
Santa Clarita, CA
Santa Clarita, CA
Santa Clarita, CA
Seattle, WA
Sewell, NJ
Shakopee, MN
Shakopee, MN
Shenandoah, TX
Sherman Oaks, CA
Silverdale, WA
Southlake, TX
Southlake, TX
Southlake, TX
Southlake, TX
Springfield, MA
St Paul, MN
St. Paul, MN
Stockton, CA
Suffern, NY
Suffolk, VA
Sugar Land, TX
Sycamore, IL
Tacoma, WA
Tampa, FL
Tarzana, CA
Timonium, MD
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
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Outpatient Medical:
Wellington, FL
Wellington, FL
Westlake Village, CA
Westlake Village, CA
Winston-Salem, NC
Woodbridge, VA
Wyandotte, MI
Yuma, AZ
Zephyrhills, FL
—
—
8,000
6,360
—
—
—
—
—
107
580
2,553
2,487
2,006
346
581
1,592
3,875
16,933
11,047
15,851
9,776
7,497
16,534
8,023
10,185
27,270
2,490
11
157
114
260
21
773
4
—
326
580
2,553
2,487
2,006
346
581
1,592
3,875
19,204
11,058
16,008
9,890
7,757
16,555
8,796
10,189
27,270
8,355
5,315
1,904
1,149
1,184
1,236
312
1,116
8,708
2006
2007
2018
2018
2019
2018
2020
2019
2011
2000
2003
1975
1989
1998
2012
2002
2004
1974
10115 Forest Hill Blvd.
1395 State Rd. 7
1250 La Venta Drive
1220 La Venta Drive
2025 Frontis Plaza
12825 Minnieville Road
1700 Biddle Ave
2270 South Ridgeview Drive
38135 Market Square Dr
Outpatient Medical Total
$
548,229
$
765,282
$
5,363,198
$
334,253
$
841,094
$
5,621,639
$
1,117,372
118
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2020
(Dollars in thousands)
Description
Encumbrances
Land & Land
Improvements
Buildings &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Buildings &
Improvements
Accumulated
Depreciation
Year
Acquired
Year Built
Address
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
$
Assets Held For Sale:
Albuquerque, NM
Brookline, MA
Castle Rock, CO
Castle Rock, CO
Glendale, CA
Irving, TX
Lakewood, WA
Las Vegas, NV
Lincoln, NE
Powell, TN
Powell, TN
Reno, NV
Rexburg, ID
St. Louis, MO
Toledo, OH
Assets Held For Sale Total
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$
$
1,270
—
80
—
—
1,030
—
—
—
—
—
—
1,267
336
2,040
20,837
17,435
9,667
—
—
2,450
—
—
—
25,692
34,994
—
3,213
17,247
47,129
$
$
—
—
—
10,480
11,228
—
11,639
2,945
19,641
—
—
14,413
—
—
—
$
6,023
$
178,664
$
70,346
$
2010
2019
2014
2016
2007
2007
2012
2007
2010
2019
2019
2006
2018
2007
2010
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1984
1900
2013
2017
2002
1999
2005
1900
2003
2005
2008
1991
1988
2001
1985
500 Paisano St NE
110 Fisher Avenue
2352 Meadows Boulevard
Meadows Boulevard
222 W. Eulalia St.
8855 West Valley Ranch Parkway
11307 Bridgeport Way SW
SW corner of Deer Springs Way and Riley
Street
575 South 70th St
7557 A Dannaher Drive
7557 B Dannaher Drive
343 Elm St.
660 South 2nd West
2325 Dougherty Ferry Rd.
3501 Executive Parkway
$
$
13,230
17,435
9,667
10,480
11,228
2,450
11,639
2,945
19,641
25,692
34,994
14,413
67
11,772
30,960
$
216,613
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
119
Summary:
Seniors Housing Operating
Triple-net
Outpatient Medical
Construction in progress
Total continuing operating properties
Assets held for sale
Total investments in real property owned
Encumbrances
Land & Land
Improvements
Buildings &
Improvements
Cost Capitalized
Subsequent to
Acquisition
Land & Land
Improvements
Buildings &
Improvements
Accumulated
Depreciation
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
$
$
$
1,706,192
123,652
548,229
—
2,378,073
—
$
1,466,472
905,073
765,282
—
3,136,827
6,023
$
13,489,025
7,397,004
5,363,198
487,742
26,736,969
178,664
$
2,648,613
596,731
334,253
—
3,579,597
70,346
$
1,642,393
957,163
841,094
—
3,440,650
—
$
15,961,717
7,941,645
5,621,639
487,742
30,012,743
216,613
3,554,697
1,432,228
1,117,372
—
6,104,297
—
2,378,073
$
3,142,850
$
26,915,633
$
3,649,943
$
3,440,650
$
30,229,356
$
6,104,297
(1)
Please see Note 2 to our consolidated financial statements for information regarding lives used for depreciation and amortization.
Investment in real estate:
Beginning balance
Acquisitions and development
Improvements
Impairment of assets
Dispositions
Foreign currency translation
Other
(2)
(1)
Ending balance
(3)
Accumulated depreciation:
Beginning balance
Depreciation and amortization expenses
Amortization of above market leases
Disposition and other
Foreign currency translation
(1)
Ending balance
2020
Year Ended December 31,
2019
(in thousands)
2018
$
$
$
$
36,027,915
1,174,148
242,147
(135,608)
(3,782,120)
143,524
—
33,670,006
5,715,459
1,038,437
5,217
(684,395)
29,579
6,104,297
$
$
$
$
33,590,388
4,807,418
328,824
(28,074)
(2,673,203)
187,853
(185,291)
36,027,915
5,499,958
1,027,073
5,752
(772,273)
(45,051)
5,715,459
$
$
$
$
30,581,948
4,598,670
266,183
(71,336)
(1,330,679)
(454,398)
—
33,590,388
4,838,370
950,459
6,375
(205,562)
(89,684)
5,499,958
(1)
(2)
(3)
Includes property dispositions and dispositions of leasehold improvements which are generally fully depreciated.
Primarily relates to the adoption of ASC 842.
The unaudited aggregate cost for tax purposes for real property equals $30,050,020,000 at December 31, 2020.
120
Welltower Inc.
Schedule IV - Mortgage Loans on Real Estate
December 31, 2020
(in thousands)
Interest Rate
Final Maturity Date
Monthly
Payment Terms
Prior Liens
Face Amount
of Mortgages
Carrying
Amount of
Mortgages
Principal Amount
of Loans Subject to
Delinquent
Principal or
Interest
Segment
Location
First mortgages relating to 1 property located in:
United Kingdom
United Kingdom
Pennsylvania
North Carolina
Texas
United Kingdom
Triple-net
Triple-net
Triple-net
Triple-net
Outpatient Medical
Triple-net
7.25%
8.53%
8.72%
7.83%
7.86%
8.50%
3/15/2022 $
7/7/2021
3/1/2022
12/18/2023
1/19/2025
2/1/2024
143
144
108
92
24
95
First mortgages relating to multiple properties located in:
United Kingdom
Outpatient Medical
7.10%
8/20/2021
972
Second mortgages relating to 1 property located in:
Florida
Florida
Triple-net
Seniors Housing Operating
10.27%
10.14%
10/21/2025
8/15/2025
54
23
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
$
$
28,652
20,493
15,530
32,783
3,740
20,464
121,662
181,022
181,022
6,250
12,500
18,750
321,434
$
$
23,104
20,107
14,795
31,993
1,701
19,549
111,249
173,361
173,361
6,098
3,044
9,142
293,752
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
Totals
Reconciliation of mortgage loans:
Balance at beginning of year
Additions:
New mortgage loans
Draws on existing loans
Total additions
Deductions:
Collections of principal
Loan balance transferred to non-real estate loans receivable
Change in allowance for credit losses and charge-offs
Other
Total deductions
Change in balance due to foreign currency translation
Balance at end of year
2020
Year Ended December 31,
2019
(in thousands)
2018
$
145,686
$
249,071
$
306,120
193,505
20,844
214,349
(17,019)
(53,071)
(5,645)
(329)
(76,064)
9,781
293,752
$
—
45,961
45,961
(87,249)
(64,040)
—
—
(151,289)
1,944
145,686
$
25,290
36,458
61,748
(116,905)
—
—
—
(116,905)
(1,892)
249,071
$
121
Subsidiary Name
0722548 B.C. Ltd.
100 Covey Dr LLC
100 Knoedler Road, LLC
100 Trich Drive LLC
1000 Aston Gardens Drive, LLC
1001 Hart Blvd LLC
10075 Jog Rd LLC
101 E 87th Ave LLC
101052983 Saskatchewan Ltd.
10475 Wilshire Boulevard Borrower, LLC
10475 Wilshire Boulevard, LLC
10512 Park Road LLC
10600 East 13th Street North, LLC
10700 Charter Drive LLC
10710 Charter Drive LLC
10800 Potomac Tennis Lane Holdco LLC
10800 Potomac Tennis Lane LLC
11307 Bridgeport Way SW LLC
11320 North Council Road, LLC
1133 Black Rock Road, LLC
1137915 B.C. Ltd.
12188A North Meridian St LLC
12188B North Meridian St LLC
1220 La Venta Drive Westlake Medical LLC
1231356 Ontario Limited
1250 La Venta Drive Community Medical LLC
12500 N Dale Mabry LLC
12951 W. Linebaugh Avenue, LLC
1301489 Ontario Limited
13075 Evening Creek Drive South, LLC
1311 Aston Gardens Court, LLC
1312417 Ontario Limited
13200 South May Avenue, LLC
135 Bunton Creek Rd LLC
139 East 56th Street Investor LLC
139 East 56th Street Landlord LLC
139 East 56th Street Landlord Mezz LLC
1405 Limekiln Pike, LLC
1501 N Florence Ave LLC
1512 12th Avenue LLC
1528670 Ontario Limited
1530 Needmore Rd LLC
15401 North Pennsylvania Avenue, LLC
1574 Creekside Drive Folsom, LLC
1600 Center Road, LLC
1640 Newport Blvd. LP
1814 Roseland Boulevard LLC
1815 E Lake Mead Blvd LLC
1900 N Loop W Fwy LLC
19016 Stone Oak Pkwy LLC
1921 Waldemere St LLC
1931 Southwest Arvonia Place, LLC
EXHIBIT 21
Jurisdiction of Organization
British Columbia
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Saskatchewan
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
California
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
195 Fore River Pkwy LLC
1950 Sunny Crest Dr LLC
2000 Emerald Court LLC
2020 Town Center Blvd LLC
20207 Chasewood Park Drive LLC
2035244 Ontario Inc.
2050 North Webb Road, LLC
2100 Via Bella LLC
2101 New Hope Street, LLC
220 North Clark Drive, LLC
2200 NW Myhre Road LLC
2210 Green Valley Rd LLC
2217 Decatur Highway LLC
222 W. Eulalia St LP
2222 S Harbor City Blvd 1070 Prospect Ave LLC
2301 S. Clear Creek LLC
231 Courtyard Boulevard, LLC
2323 N Casaloma Drive LLC
2325 Dougherty Rd LLC
23351 Prairie Star Pkwy LLC
2340829 Ontario Inc.
2340830 Ontario Inc.
2352 Bruce B Downs Blvd LLC
2352 Meadows Blvd LLC
2356 Meadows Blvd LLC
239 Cross Road LLC
239 Hurffville-Cross Keys Rd LLC
2405 Clear Creek Rd LLC
2419 North Euclid Avenue Upland, LLC
2488 N California Street LLC
2601 Thornton Ln LLC
2721 Willow Street LP
27783 Center Drive LP
2800 60th Avenue West, LLC
2901 Coral Hills Dr LLC
2929 West Holcombe Boulevard, LLC
2996 Kate Bond Rd LLC
300 St. Albans Drive, LP
300 Steam Plant Rd LLC
300 W Country Club Rd LLC
303 West Lake Street LLC
31 Stiles Rd LLC
320 St. Albans Drive, LP
3220 Peterson Road, LLC
325 Folly Rd LLC
343 Elm St LLC
3485 Independence Drive LLC
35 Fenton Street, LLC
350 W Country Club Rd LLC
3535 Manchester Avenue Borrower, LLC
3535 Manchester Avenue, LLC
3535 N. Hall Street, LLC
3650 Southeast 18th Avenue, LLC
3688 Veterans Memorial Drive LLC
3903 Wiseman Blvd LLC
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
California
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
4 Forge Hill Road Franklin LLC
4 Wallace Bashaw Junior Way LLC
4000 San Pablo Parkway, LLC
405 Bedford LP
415 Bedford LP
416 Bedford LP
4206 Stammer Place, LLC
4310 Bee Cave Road, LLC
4315 Johns Creek Parkway, LLC
435 Bedford LLC
4402 South 129th Avenue West, LLC
444 Merrick Road LLC
450 South Kitsap Boulevard LLC
4500 Dorr Street Holdings, LLC
4515 Marsha Sharp Freeway LLC
4515 Premier Dr LLC
47647 Caleo Bay Dr LLC
4800 Aston Gardens Way, LLC
4865 MacArthur Landlord LLC
50 Greenleaf Way LLC
50 Town Court, LLC
500 Seven Fields Boulevard, LLC
5039 Airport Center Parkway LLC
504 North River Road, LLC
505 North Maize Road, LLC
5282 Medical Dr LLC
5300 West 29th Street, LLC
5301 Creedmoor Road, LP
5330 W Michael Drive LLC
5455 Glenridge Drive, NE, LLC
550 Orchard Park Rd LLC
5521 Village Creek Drive, LLC
555 Knowles Dr LLC
557140 B.C. Ltd.
5655 Hudson Dr LLC
5702 E Central Texas Expy LLC
575 South 70th St LLC
5750 Downey Ave LP
5939 Roosevelt Boulevard, LLC
5999 N. University Drive, LLC
60 Stafford Street LLC
600 Pine Island Rd LLC
601 W Country Club Rd LLC
601 West Highway 6 LLC
6011 Farrington Road LLC
6144 Airport Boulevard LLC
6424 E Broadway Rd LLC
6605 Quail Hollow Road, LLC
6635 Lake Dr LLC
6957 Plano Pkwy LLC
700 Smith Street Providence LLC
7001 Forest Avenue, LLC
701 W. 71st Street South, LLC
701 White Pond Dr LLC
731 Old Buck Lane, LLC
Delaware
Delaware
Kansas
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Delaware
Delaware
Delaware
Kansas
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
7442 Frank Avenue LLC
75 Minnesota Avenue Warwick LLC
7557 A Dannaher Dr LLC
7557 B Dannaher Dr LLC
7900 Creedmoor Road, LP
7902 South Mingo Road East, LLC
7916 Jefferson Blvd LLC
800 Canadian Trails Drive, LLC
800 Oregon Street LLC
8100 W 78th St LLC
8120 Timberlake Way LLC
8188 Jog Rd LLC
8200 Jog Rd LLC
8220 Natures Way, LLC
831 Santa Barbara Boulevard, LLC
880 Greendale Avenue LLC
8800 W 75th St LLC
8901 W 74th St LLC
90 Avenue S.W. Property Inc.
90 West Avenue, LLC
9108-9458 Quebec Inc.
9110-9470 Quebec Inc.
9128-6757 Quebec Inc.
9131-6844 Quebec Inc.
9168-0215 Quebec Inc.
9188-4502 Quebec Inc.
9189-2042 Quebec Inc.
9198-9541 Quebec Inc.
9208-0837 Quebec Inc.
9301 W 74th St LLC
9307-0985 Quebec Inc.
9307-1306 Quebec Inc.
9307-1348 Quebec Inc.
9314-3410 Quebec Inc.
9330 Poppy Dr LLC
Affordable Senior Housing Opportunities of New York, Inc.
AL Santa Monica Senior Housing, LP
Alberta Acres Facility Inc.
Amherst View (Bath Road) Facility Inc.
Arnprior Villa Facility Inc.
Aspen Tower Investments Ltd
Aspen Tower Partner 1 Inc.
Aspen Tower Partner 10 Inc.
Aspen Tower Partner 11 Inc.
Aspen Tower Partner 2 Inc.
Aspen Tower Partner 3 Inc.
Aspen Tower Partner 4 Inc.
Aspen Tower Partner 5 Inc.
Aspen Tower Partner 6 Inc.
Aspen Tower Partner 7 Inc.
Aspen Tower Partner 8 Inc.
Aspen Tower Partner 9 Inc.
Aspen Tower Propco 1 Ltd
Aspen Tower Propco 2 Limited
Aspen Tower Propco 4 Ltd
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Delaware
Quebec
Quebec
Quebec
Quebec
Delaware
New York
Delaware
Ontario
Ontario
Ontario
Jersey
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
United Kingdom
United Kingdom
United Kingdom
Aurora Guardian Holdco I, LLC
Aurora Guardian Holdco II, LLC
Aurora Guardian Holdco III, LLC
Aurora Guardian Holdco IV, LLC
Avery Healthcare Group Limited
BAL Holdings II, LLC
BAL Holdings VII, LLC
BAL Howell LLC
BAL Longwood LLC
Ballard Healthcare Investors, LLC
Bayfield Court Operations Limited
Bel Air Healthcare Investors, LLC
Belmont Village Buckhead Tenant, LLC
Belmont Village Buffalo Grove Tenant, LLC
Belmont Village Buffalo Grove, L.L.C.
Belmont Village Burbank Tenant, LLC
Belmont Village Burbank, LLC
Belmont Village Cardiff Tenant, LLC
Belmont Village Carol Stream, L.L.C.
Belmont Village Encino Tenant, LLC
Belmont Village Encino, LLC
Belmont Village Geneva Road Tenant, LLC
Belmont Village Glenview Tenant, LLC
Belmont Village Glenview, L.L.C.
Belmont Village Green Hills Tenant, LLC
Belmont Village Hollywood Tenant, LLC
Belmont Village Hollywood, LLC
Belmont Village Johns Creek Tenant, LLC
Belmont Village Landlord 3, LLC
Belmont Village Landlord 4, LP
Belmont Village Landlord, LLC
Belmont Village Memphis Tenant, LLC
Belmont Village Oak Park Tenant, LLC
Belmont Village Oak Park, L.L.C.
Belmont Village Rancho Palos Verdes Tenant, LLC
Belmont Village RPV, LLC
Belmont Village Sabre Springs Tenant, LLC
Belmont Village San Jose Tenant, LLC
Belmont Village San Jose, LLC
Belmont Village St. Matthews Tenant, LLC
Belmont Village St. Matthews, L.L.C.
Belmont Village Sunnyvale Tenant, LLC
Belmont Village Sunnyvale, LLC
Belmont Village Tenant 2, LLC
Belmont Village Tenant 3, LLC
Belmont Village Tenant, LLC
Belmont Village Turtle Creek Tenant, LLC
Belmont Village West Lake Hills Tenant, LLC
Belmont Village West University Tenant, LLC
Belmont Village Westwood Tenant, LLC
Benchmark Investments X LP
Benchmark Investments XI LP
Benchmark Investments XII LP
Benchmark Investments XIV LLC
Berkshire Center Realty, LLC
Delaware
Delaware
Delaware
Delaware
United Kingdom
Delaware
Delaware
Delaware
Pennsylvania
Delaware
United Kingdom
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Berkshire Subtenant LP
BKD-HCN Landlord, LLC
BKD-HCN Tenant, LLC
Brackenville Center Realty, LLC
Brakeley Park Realty, LLC
Broadway 85th Investor LLC
Broadway 85th Landlord Mezz LLC
Broadway 85th LLC
Broadway 85th Tenant LLC
Broadway 85th Tenant Mezz LLC
Brockport Tenant, LLC
Brockville Facility Inc.
Brooklyn Healthcare Investors, LLC
Broomfield CO Senior Living Owner, LLC
BSL Sparti TRS LLC
Burbank Subtenant LP
Burlington Woods Realty II, LLC
Burlington Woods Realty, LLC
Bushey Property Holdings Limited
B-X Operations Holding Company LLC
B-X Shelburne LLC
B-XI Operations Holding Company LLC
B-XII Operations Holding Company LLC
B-XIV Operations Holding Company LLC
Cassils Road West Property Inc.
Castle Rock Healthcare Investors, LLC
Cerritos Subtenant LP
Chapel Hill II JV Sub, LLC
Chapel Hill II JV, LLC
Churchill Facility Inc.
Cincinnati Physicians, LLC
Claremont Facility Inc.
Clover Communities Beavercreek LLC
Clover Communities Berea LLC
Clover Communities Bethel Park LLC
Clover Communities Brighton LLC
Clover Communities Camillus LLC
Clover Communities Fries, LLC
Clover Communities Hamilton LLC
Clover Communities Harborcreek, L.P.
Clover Communities Independence LLC
Clover Communities Johnson City, LLC
Clover Communities Lancaster, LLC
Clover Communities Lorain LLC
Clover Communities New Hartford, LLC
Clover Communities North Fayette, LLC
Clover Communities Painesville LLC
Clover Communities Scranton, LLC
Clover Communities Southwestern LLC
Clover Communities Sweethome, LLC
Clover Communities Sylvania LLC
Clover Communities Taylor LLC
Collierville Care, LLC
Columbia Boulevard West Property Inc.
Coon Rapids Healthcare Investors, LLC
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Jersey
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Ontario
Ohio
Delaware
Delaware
Delaware
New York
New York
Ohio
Pennsylvania
Delaware
New York
New York
Ohio
New York
Delaware
Delaware
Delaware
New York
New York
Ohio
Delaware
Michigan
British Columbia
Delaware
Courthouse Convalescent Realty, LLC
Coventry Subtenant LP
CPF Landlord, LLC
Crystal JV, LLC
Crystal REIT Investors, LLC
CSH-HCN (Alexander) Inc.
CSH-HCN (Avondale) Inc.
CSH-HCN (Belcourt) Inc.
CSH-HCN (Christopher) Inc.
CSH-HCN (Fountains) Inc.
CSH-HCN (Gordon) Inc.
CSH-HCN (Heritage) Inc.
CSH-HCN (Kingsville) Inc.
CSH-HCN (Lansing) Inc.
CSH-HCN (Leamington) Inc.
CSH-HCN (Livingston) Inc.
CSH-HCN (Marquis) Inc.
CSH-HCN (McConnell) Inc.
CSH-HCN (Pines) Inc.
CSH-HCN (Regent Park) Inc.
CSH-HCN (Rideau) Inc.
CSH-HCN (Royalcliffe) Inc.
CSH-HCN (Scarlett) Inc.
CSH-HCN (Tranquility) Inc.
CSH-HCN Lessee (Alexander) GP Inc.
CSH-HCN Lessee (Alexander) LP
CSH-HCN Lessee (Archer) GP Inc.
CSH-HCN Lessee (Archer) LP
CSH-HCN Lessee (Avondale) GP Inc.
CSH-HCN Lessee (Avondale) LP
CSH-HCN Lessee (Belcourt) GP Inc.
CSH-HCN Lessee (Belcourt) LP
CSH-HCN Lessee (Boulogne) GP Inc.
CSH-HCN Lessee (Boulogne) LP
CSH-HCN Lessee (Chicoutimi) GP Inc.
CSH-HCN Lessee (Chicoutimi) LP
CSH-HCN Lessee (Christopher) GP Inc.
CSH-HCN Lessee (Christopher) LP
CSH-HCN Lessee (Ecores) GP Inc.
CSH-HCN Lessee (Ecores) LP
CSH-HCN Lessee (Fountains) GP Inc.
CSH-HCN Lessee (Fountains) LP
CSH-HCN Lessee (Giffard) GP Inc.
CSH-HCN Lessee (Giffard) LP
CSH-HCN Lessee (Gordon) GP Inc.
CSH-HCN Lessee (Gordon) LP
CSH-HCN Lessee (Harmonie) GP Inc.
CSH-HCN Lessee (Harmonie) LP
CSH-HCN Lessee (Heritage) GP Inc.
CSH-HCN Lessee (Heritage) LP
CSH-HCN Lessee (Imperial) GP Inc.
CSH-HCN Lessee (Imperial) LP
CSH-HCN Lessee (Jonquiere) GP Inc.
CSH-HCN Lessee (Jonquiere) LP
CSH-HCN Lessee (Kingsville) GP Inc.
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Canada
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
CSH-HCN Lessee (Kingsville) LP
CSH-HCN Lessee (Lachine) GP Inc.
CSH-HCN Lessee (Lachine) LP
CSH-HCN Lessee (Lansing) GP Inc.
CSH-HCN Lessee (Lansing) LP
CSH-HCN Lessee (l'Atrium) GP Inc.
CSH-HCN Lessee (l'Atrium) LP
CSH-HCN Lessee (Laviolette) GP Inc.
CSH-HCN Lessee (Laviolette) LP
CSH-HCN Lessee (Leamington) GP Inc.
CSH-HCN Lessee (Leamington) LP
CSH-HCN Lessee (L'Ermitage) GP Inc.
CSH-HCN Lessee (l'Ermitage) LP
CSH-HCN Lessee (L'Estrie) GP Inc.
CSH-HCN Lessee (L'Estrie) LP
CSH-HCN Lessee (Livingston) GP Inc.
CSH-HCN Lessee (Livingston) LP
CSH-HCN Lessee (Marquis) GP Inc.
CSH-HCN Lessee (Marquis) LP
CSH-HCN Lessee (McConnell) GP Inc.
CSH-HCN Lessee (McConnell) LP
CSH-HCN Lessee (Notre-Dame) GP Inc.
CSH-HCN Lessee (Notre-Dame) LP
CSH-HCN Lessee (Pines) GP Inc.
CSH-HCN Lessee (Pines) LP
CSH-HCN Lessee (Pointe-Aux-Trembles) GP Inc.
CSH-HCN Lessee (Pointe-Aux-Trembles) LP
CSH-HCN Lessee (Renaissance) GP Inc.
CSH-HCN Lessee (Renaissance) LP
CSH-HCN Lessee (Rideau) GP Inc.
CSH-HCN Lessee (Rideau) LP
CSH-HCN Lessee (Rive-Sud) GP Inc.
CSH-HCN Lessee (Rive-Sud) LP
CSH-HCN Lessee (Royalcliffe) GP Inc.
CSH-HCN Lessee (Royalcliffe) LP
CSH-HCN Lessee (Saguenay) GP Inc.
CSH-HCN Lessee (Saguenay) LP
CSH-HCN Lessee (Saint-Jerome) GP Inc.
CSH-HCN Lessee (Saint-Jerome) LP
CSH-HCN Lessee (Scarlett) GP Inc.
CSH-HCN Lessee (Scarlett) LP
CSH-HCN Lessee (Tranquility) GP Inc.
CSH-HCN Lessee (Tranquility) LP
CSH-HCN Lessee (Trembles) GP Inc.
CSH-HCN Lessee (Trembles) LP
CSH-HCN Lessee (Wellesley) GP Inc.
CSH-HCN Lessee (Wellesley) LP
CW Property Inc.
Dawn Opco Limited
Dawnview Center Realty, LLC
DELM Nursing, Inc.
Denver Tenant, LLC
DRF Durango LLC
DRF Fenton LLC
DRF Gig Harbor LLC
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
British Columbia
United Kingdom
Delaware
Pennsylvania
Delaware
Minnesota
Minnesota
Minnesota
DRF Monticello Medical Building LLC
DRF South Valley LLC
DRF Westminster LLC
DSG-2010 Loans I, Inc.
DSL Landlord II, LLC
DSL Landlord, LLC
DSL Tenant II, LLC
DSL Tenant, LLC
Dublin Senior Community WPP, LLC
East 56th Street Investor LLC
East 56th Street Tenant LLC
Edgemont Facility Inc.
Element Acquisition Sub. 3, LLC
EPC Hammes LLC
EPC IRA LLC
EPC Landlord Group LLC
EPC Sparti LLC
EPOCH at Hingham Subtenant, LLC
EPOCH at Wellesley Subtenant, LLC
EPOCH at Westford Subtenant, LLC
EPOCH Landlord, LLC
EPOCH Tenant, LLC
Evergreen Place at Brockport Inc.
Faribault Assisted Living, LLC
FCA Finance B Secured Party, LLC
FC-GEN Acquisition Holding, LLC
FC-GEN Acquisition, Inc.
FC-GEN Real Estate, LLC
FHC Mount Vernon LLC
Fieldgate Facility Inc.
Finco TRS Limited
First Tower Holdco, LLC
First Tower Insurance, LLC
First Tower Partners LLC
FLA-PALM COURT Limited Partnership
Fleetwood Villa Facility Inc.
G & L Tustin III, LP
G&L 4150 Regents LP
G&L 436 Bedford LLC
Gemini Las Colinas, L.L.C.
Genesis Eldercare Corp.
Genesis Eldercare National Centers, Inc.
Genesis Health Ventures of Bloomfield, Inc.
Genesis Health Ventures of Wilkes-Barre, Inc.
Genesis HealthCare Corporation
Genesis Healthcare Holding Company I, Inc.
Genesis Meridian 7 Leasing Properties Limited Partnership, L.L.P.
Genesis Meridian 7 Partnership Holding Company L.L.C.
Genoa Healthcare Investors, LLC
Geriatric and Medical Services, Inc.
GHC Sub LLC
GHC TRS Inc.
Gig Harbor Physicians, LLC
Glendale Center Realty, LLC
Golden Gate Subtenant LP
Minnesota
Minnesota
Minnesota
Delaware
Delaware
Delaware
Delaware
Delaware
Oklahoma
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Virginia
Minnesota
Delaware
Delaware
Delaware
Delaware
Minnesota
Ontario
United Kingdom
Delaware
Tennessee
Vermont
Florida
Ontario
Delaware
Delaware
Delaware
Oklahoma
Delaware
Florida
Pennsylvania
Pennsylvania
Pennsylvania
Delaware
Virginia
Delaware
Delaware
New Jersey
Delaware
Delaware
Delaware
Delaware
Delaware
Grace Lodge Care Limited
Grace Lodge Care Operating S.a.r.l.
Gracewell (Newmarket) Limited
Gracewell Healthcare 1 Limited
Gracewell Healthcare 2 Limited
Gracewell Healthcare 3 Limited
Gracewell Healthcare 4 Limited
Gracewell Holdco Limited
Gracewell Investments No. 2 Limited
Gracewell Investments No. 3 Limited
Gracewell Investments No. 4 Limited
Gracewell Operations Holding Limited
Gracewell Properties (Abercorn) Limited
Gracewell Properties (Adderbury) Limited
Gracewell Properties (Bath) Limited
Gracewell Properties (Birmingham) Limited
Gracewell Properties (Bournville) Limited
Gracewell Properties (Church Crookham) Limited
Gracewell Properties (Fareham) Limited
Gracewell Properties (Frome) Limited
Gracewell Properties (Hamilton) Limited
Gracewell Properties (Horley) Limited
Gracewell Properties (Kentford) Limited
Gracewell Properties (Lane End) Limited
Gracewell Properties (Little Bookham) Limited
Gracewell Properties (Newbury) Limited
Gracewell Properties (Salisbury) Limited
Gracewell Properties (Shelbourne) Limited
Gracewell Properties (Solihull) Limited
Gracewell Properties (Sutton) Limited
Gracewell Properties (Weymouth) Limited
Gracewell Properties (Woking) Limited
Gracewell Properties Holdings Limited
Gracwell Properties (Sutton Coldfield) Limited
Groton Regency Realty, LLC
Grove City Care 2015, LLC
GWC-Broadway 85th Inc.
GWC-Crestwood, Inc.
GWC-Dix Hills, Inc.
GWC-East 56th Street Inc.
GWC-East Meadow, Inc.
GWC-East Setauket, Inc.
GWC-Glen Cove, Inc.
GWC-Holbrook, Inc.
GWC-Huntington Terrace Inc.
GWC-New Dorp Inc.
GWC-Plainview, Inc.
GWC-Savoy Inc.
GWC-West Babylon, Inc.
Habitation Domaine Des Trembles Inc.
Habitation Faubourg Giffard Inc.
Hammonds Lane Meridian Limited Partnership
Harnett Health Investors, LP
Harrington Court Realty, LLC
Harston Hall Realty, LLC
Jersey
Luxembourg
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Jersey
Jersey
Jersey
Jersey
United Kingdom
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Delaware
Michigan
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Quebec
Quebec
Maryland
Virginia
Delaware
Delaware
HCN (Pembroke) Property Inc.
HCN (ROSEHILL) PROPERTY INC.
HCN (Stonehaven) Property Inc.
HCN Canadian Holdings GP-1 Ltd.
HCN Canadian Holdings LP-1 Ltd.
HCN Canadian Holdings-1 LP
HCN Canadian Holdings-1 Subco Ltd.
HCN Canadian Investment (Newman) LP
HCN Canadian Investment (Regent Park) LP
HCN Canadian Investment-1 LP
HCN Canadian Investment-4 LP
HCN Canadian Investment-5 LP
HCN Canadian Investment-5 ULC
HCN Canadian Leasing (British Columbia) Ltd.
HCN Canadian Leasing Ltd.
HCN Canadian Leasing-4 Ltd.
HCN Canadian Management Services Ltd.
HCN Development Services Group, Inc.
HCN DownREIT Member GP, LLC
HCN DownREIT Member JV, LP
HCN DownREIT Member, LLC
HCN DSL Member GP, LLC
HCN DSL Member JV, LP
HCN DSL Member TRS, LLC
HCN Emerald Holdings, LLC
HCN Finco TRS Limited
HCN G&L DownREIT II GP, LLC
HCN G&L DownREIT II, LLC
HCN G&L DownREIT LLC
HCN G&L Holy Cross Sub, LLC
HCN G&L Roxbury Sub, LLC
HCN G&L Santa Clarita Sub, LLC
HCN G&L Valencia Sub, LLC
HCN Interra Lake Travis LTACH, LLC
HCN Investment (Newman) GP Ltd.
HCN Investment (Regent Park) GP Ltd.
HCN Investment GP-1 Ltd.
HCN Investment GP-4 Ltd.
HCN Investment GP-5 Ltd.
HCN Kensington Victoria Leasing Ltd.
HCN Lake Travis Holdings, LLC
HCN Lake Travis Property Two, LLC
HCN Lessee (Pembroke) GP Inc.
HCN Lessee (Pembroke) LP
HCN Lessee (Stonehaven) GP Inc.
HCN Lessee (Stonehaven) LP
HCN Ross Leasing Ltd.
HCN Share Holdings JV GP, LLC
HCN Share Holdings JV, LP
HCN Sunwood Leasing Ltd.
HCN UK Holdco Limited
HCN UK Investments Limited
HCN UK Management Services Limited
HCN-Cogir Lessee GP Inc.
HCN-Cogir Lessee LP
British Columbia
Ontario
British Columbia
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
British Columbia
British Columbia
Ontario
British Columbia
Ontario
Indiana
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
United Kingdom
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Ontario
Ontario
Ontario
Ontario
British Columbia
Delaware
Delaware
British Columbia
Ontario
British Columbia
Ontario
Ontario
Delaware
Delaware
British Columbia
Jersey
Jersey
United Kingdom
Ontario
Ontario
HCN-Revera (Annex) Inc.
HCN-Revera (Appleby Place) Inc.
HCN-Revera (Aspen Ridge) Inc.
HCN-Revera (Beechwood) Inc.
HCN-Revera (Bough Beeches Place) Inc.
HCN-Revera (Centennial Park Place) Inc.
HCN-Revera (Churchill Place) Inc.
HCN-Revera (Colonel By) Inc.
HCN-Revera (Constitution Place) Inc.
HCN-Revera (Don Mills/Donway Place) Inc.
HCN-Revera (Edinburgh) Inc.
HCN-Revera (Evergreen) Inc.
HCN-Revera (Fergus Place) Inc.
HCN-Revera (Forest Hill Place) Inc.
HCN-Revera (Glynnwood) Inc.
HCN-Revera (Hollyburn House) Inc.
HCN-Revera (Inglewood) Inc.
HCN-Revera (Kensington Victoria) Inc.
HCN-Revera (Kensington) Inc.
HCN-Revera (Leaside) Inc.
HCN-Revera (Parkwood Court) Inc.
HCN-Revera (Parkwood Manor) Inc.
HCN-Revera (Parkwood Place) Inc.
HCN-Revera (Rayoak Place) Inc.
HCN-Revera (Regal) Limited Partnership
HCN-Revera (River Ridge) Inc.
HCN-Revera (Stone Lodge) Inc.
HCN-Revera (Valley Stream) Inc.
HCN-Revera (Victoria Place) Inc.
HCN-Revera (Weber) Inc.
HCN-Revera (Wellington) Inc.
HCN-Revera (Westwood) Inc.
HCN-Revera (Whitecliff) Inc.
HCN-Revera (Windermere on the Mount) Inc.
HCN-Revera Joint Venture GP Inc.
HCN-Revera Joint Venture Limited Partnership
HCN-Revera Joint Venture ULC
HCN-Revera Lessee (Alta Vista) GP Inc.
HCN-Revera Lessee (Alta Vista) LP
HCN-Revera Lessee (Annex) GP Inc.
HCN-Revera Lessee (Annex) LP
HCN-Revera Lessee (Appleby Place) GP Inc.
HCN-Revera Lessee (Appleby Place) LP
HCN-Revera Lessee (Arnprior Villa) GP Inc.
HCN-Revera Lessee (Arnprior Villa) LP
HCN-Revera Lessee (Aspen Ridge) GP Inc.
HCN-Revera Lessee (Aspen Ridge) LP
HCN-Revera Lessee (Barrhaven) GP Inc.
HCN-Revera Lessee (Barrhaven) LP
HCN-Revera Lessee (Beechwood) GP Inc.
HCN-Revera Lessee (Beechwood) LP
HCN-Revera Lessee (Bentley Moose Jaw) GP Inc.
HCN-Revera Lessee (Bentley Moose Jaw) LP
HCN-Revera Lessee (Bentley Regina) GP Inc.
HCN-Revera Lessee (Bentley Regina) LP
Ontario
Ontario
Ontario
Ontario
Ontario
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Ontario
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Ontario
Ontario
British Columbia
Ontario
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Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
HCN-Revera Lessee (Bentley Saskatoon) GP Inc.
HCN-Revera Lessee (Bentley Saskatoon) LP
HCN-Revera Lessee (Bentley Swift Current) GP Inc.
HCN-Revera Lessee (Bentley Swift Current) LP
HCN-Revera Lessee (Bentley Yorkton) GP Inc.
HCN-Revera Lessee (Bentley Yorkton) LP
HCN-Revera Lessee (Birkdale) GP Inc.
HCN-Revera Lessee (Birkdale) LP
HCN-Revera Lessee (Bough Beeches Place) GP Inc.
HCN-Revera Lessee (Bough Beeches Place) LP
HCN-Revera Lessee (Bradgate Arms) GP Inc.
HCN-Revera Lessee (Bradgate Arms) LP
HCN-Revera Lessee (Briargate) GP Inc.
HCN-Revera Lessee (Briargate) LP
HCN-Revera Lessee (Bridlewood Manor) GP Inc.
HCN-Revera Lessee (Bridlewood Manor) LP
HCN-Revera Lessee (Cambridge) GP Inc.
HCN-Revera Lessee (Cambridge) LP
HCN-Revera Lessee (Cedarcroft Place) GP Inc.
HCN-Revera Lessee (Cedarcroft Place) LP
HCN-Revera Lessee (Centennial Park Place) GP Inc.
HCN-Revera Lessee (Centennial Park Place) LP
HCN-Revera Lessee (Chateau Renoir) GP Inc.
HCN-Revera Lessee (Chateau Renoir) LP
HCN-Revera Lessee (Chatham) GP Inc.
HCN-Revera Lessee (Chatham) LP
HCN-Revera Lessee (Churchill Place) GP Inc.
HCN-Revera Lessee (Churchill Place) LP
HCN-Revera Lessee (Clair Matin) GP Inc.
HCN-Revera Lessee (Clair Matin) LP
HCN-Revera Lessee (Claremont) GP Inc.
HCN-Revera Lessee (Claremont) LP
HCN-Revera Lessee (Colonel By) GP Inc.
HCN-Revera Lessee (Colonel By) LP
HCN-Revera Lessee (Constitution Place) GP Inc.
HCN-Revera Lessee (Constitution Place) LP
HCN-Revera Lessee (Crofton Manor) GP Inc.
HCN-Revera Lessee (Crofton Manor) LP
HCN-Revera Lessee (Don Mills) GP Inc.
HCN-Revera Lessee (Don Mills) LP
HCN-Revera Lessee (Donway Place) GP Inc.
HCN-Revera Lessee (Donway Place) LP
HCN-Revera Lessee (Dorchester) GP Inc.
HCN-Revera Lessee (Dorchester) LP
HCN-Revera Lessee (Edgemont) GP Inc.
HCN-Revera Lessee (Edgemont) LP
HCN-Revera Lessee (Edinburgh) GP Inc.
HCN-Revera Lessee (Edinburgh) LP
HCN-Revera Lessee (Emerite de Brossard) GP Inc.
HCN-Revera Lessee (Emerite de Brossard) LP
HCN-Revera Lessee (Evergreen) GP Inc.
HCN-Revera Lessee (Evergreen) LP
HCN-Revera Lessee (Fergus Place) GP Inc.
HCN-Revera Lessee (Fergus Place) LP
HCN-Revera Lessee (Fleetwood Villa) GP Inc.
Ontario
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Ontario
HCN-Revera Lessee (Fleetwood Villa) LP
HCN-Revera Lessee (Forest Hill Place) GP Inc.
HCN-Revera Lessee (Forest Hill Place) LP
HCN-Revera Lessee (Franklin) GP Inc.
HCN-Revera Lessee (Franklin) LP
HCN-Revera Lessee (Glynnwood) GP Inc.
HCN-Revera Lessee (Glynnwood) LP
HCN-Revera Lessee (Grand Wood) GP Inc.
HCN-Revera Lessee (Grand Wood) LP
HCN-Revera Lessee (Greenway) GP Inc.
HCN-Revera Lessee (Greenway) LP
HCN-Revera Lessee (Heartland) GP Inc.
HCN-Revera Lessee (Heartland) LP
HCN-Revera Lessee (Heritage Lodge) GP Inc.
HCN-Revera Lessee (Heritage Lodge) LP
HCN-Revera Lessee (Highland Place) GP Inc.
HCN-Revera Lessee (Highland Place) LP
HCN-Revera Lessee (Hollyburn House) GP Inc.
HCN-Revera Lessee (Hollyburn House) LP
HCN-Revera Lessee (Horizon Place) GP Inc.
HCN-Revera Lessee (Horizon Place) LP
HCN-Revera Lessee (Hunt Club Manor) GP Inc.
HCN-Revera Lessee (Hunt Club Manor) LP
HCN-Revera Lessee (Inglewood) GP Inc.
HCN-Revera Lessee (Inglewood) LP
HCN-Revera Lessee (Jardins du Couvent) GP Inc.
HCN-Revera Lessee (Jardins du Couvent) LP
HCN-Revera Lessee (Jardins Interieurs) GP Inc.
HCN-Revera Lessee (Jardins Interieurs) LP
HCN-Revera Lessee (Jardins Vaudreuil) GP Inc.
HCN-Revera Lessee (Jardins Vaudreuil) LP
HCN-Revera Lessee (Kensington Victoria) GP Inc.
HCN-Revera Lessee (Kensington Victoria) LP
HCN-Revera Lessee (Kensington) GP Inc.
HCN-Revera Lessee (Kensington) LP
HCN-Revera Lessee (King Gardens) GP Inc.
HCN-Revera Lessee (King Gardens) LP
HCN-Revera Lessee (Kingsway) GP Inc.
HCN-Revera Lessee (Kingsway) LP
HCN-Revera Lessee (Landmark Court) GP Inc.
HCN-Revera Lessee (Landmark Court) LP
HCN-Revera Lessee (Leaside) GP Inc.
HCN-Revera Lessee (Leaside) LP
HCN-Revera Lessee (Lundy Manor) GP Inc.
HCN-Revera Lessee (Lundy Manor) LP
HCN-Revera Lessee (Lynwood) GP Inc.
HCN-Revera Lessee (Lynwood) LP
HCN-Revera Lessee (Manoir Lafontaine) GP Inc.
HCN-Revera Lessee (Manoir Lafontaine) LP
HCN-Revera Lessee (Maplecrest) GP Inc.
HCN-Revera Lessee (Maplecrest) LP
HCN-Revera Lessee (Marian Chateau) GP Inc.
HCN-Revera Lessee (Marian Chateau) LP
HCN-Revera Lessee (McKenzie Towne) GP Inc.
HCN-Revera Lessee (McKenzie Towne) LP
Ontario
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Ontario
HCN-Revera Lessee (Meadowlands) GP Inc.
HCN-Revera Lessee (Meadowlands) LP
HCN-Revera Lessee (Ogilvie Villa) GP Inc.
HCN-Revera Lessee (Ogilvie Villa) LP
HCN-Revera Lessee (Parkwood Court) GP Inc.
HCN-Revera Lessee (Parkwood Court) LP
HCN-Revera Lessee (Parkwood Manor) GP Inc.
HCN-Revera Lessee (Parkwood Manor) LP
HCN-Revera Lessee (Parkwood Place) GP Inc.
HCN-Revera Lessee (Parkwood Place) LP
HCN-Revera Lessee (Pavillon des Cedres) GP Inc.
HCN-Revera Lessee (Pavillon des Cedres) LP
HCN-Revera Lessee (Plymouth) GP Inc.
HCN-Revera Lessee (Plymouth) LP
HCN-Revera Lessee (Port Perry) GP Inc.
HCN-Revera Lessee (Port Perry) LP
HCN-Revera Lessee (Portobello) GP Inc.
HCN-Revera Lessee (Portobello) LP
HCN-Revera Lessee (Portsmouth) GP Inc.
HCN-Revera Lessee (Portsmouth) LP
HCN-Revera Lessee (Prince of Wales) GP Inc.
HCN-Revera Lessee (Prince of Wales) LP
HCN-Revera Lessee (Queenswood Villa) GP Inc.
HCN-Revera Lessee (Queenswood Villa) LP
HCN-Revera Lessee (Rayoak Place) GP Inc.
HCN-Revera Lessee (Rayoak Place) LP
HCN-Revera Lessee (Renaissance) GP Inc.
HCN-Revera Lessee (Renaissance) LP
HCN-Revera Lessee (River Ridge) GP Inc.
HCN-Revera Lessee (River Ridge) LP
HCN-Revera Lessee (Riverbend) GP Inc.
HCN-Revera Lessee (Riverbend) LP
HCN-Revera Lessee (Robertson House) GP Inc.
HCN-Revera Lessee (Robertson House) LP
HCN-Revera Lessee (Scenic Acres) GP Inc.
HCN-Revera Lessee (Scenic Acres) LP
HCN-Revera Lessee (St. Lawrence Place) GP Inc.
HCN-Revera Lessee (St. Lawrence Place) LP
HCN-Revera Lessee (Stittsville Villa) GP Inc.
HCN-Revera Lessee (Stittsville Villa) LP
HCN-Revera Lessee (Stone Lodge) GP Inc.
HCN-Revera Lessee (Stone Lodge) LP
HCN-Revera Lessee (Sunwood) GP Inc.
HCN-Revera Lessee (Sunwood) LP
HCN-Revera Lessee (Terrace Gardens) GP Inc.
HCN-Revera Lessee (Terrace Gardens) LP
HCN-Revera Lessee (The Churchill) GP Inc.
HCN-Revera Lessee (The Churchill) LP
HCN-Revera Lessee (Trafalgar Lodge) GP Inc.
HCN-Revera Lessee (Trafalgar Lodge) LP
HCN-Revera Lessee (Valley Stream) GP Inc.
HCN-Revera Lessee (Valley Stream) LP
HCN-Revera Lessee (Victoria Place) GP Inc.
HCN-Revera Lessee (Victoria Place) LP
HCN-Revera Lessee (Waverley/Rosewood) GP Inc.
Ontario
Ontario
Ontario
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HCN-Revera Lessee (Waverley/Rosewood) LP
HCN-Revera Lessee (Weber) GP Inc.
HCN-Revera Lessee (Weber) LP
HCN-Revera Lessee (Wellington) GP Inc.
HCN-Revera Lessee (Wellington) LP
HCN-Revera Lessee (Westwood) GP Inc.
HCN-Revera Lessee (Westwood) LP
HCN-Revera Lessee (Whitecliff) GP Inc.
HCN-Revera Lessee (Whitecliff) LP
HCN-Revera Lessee (Windermere on the Mount) GP Inc.
HCN-Revera Lessee (Windermere on the Mount) LP
HCN-Revera Lessee (Windsor) GP Inc.
HCN-Revera Lessee (Windsor) LP
HCP Maryland Properties, LLC
HCRI 10301 Hagen Ranch Properties, LLC
HCRI 1950 Sunny Crest Drive, LLC
HCRI Allen Medical Facility, LLC
HCRI Ancillary TRS, Inc.
HCRI Connecticut Avenue Subtenant, LLC
HCRI Draper Place Properties Trust
HCRI Emerald Holdings III, LLC
HCRI Emerald Holdings, LLC
HCRI Fairmont Properties, LLC
HCRI Financial Services, LLC
HCRI Fore River Medical Facility, LLC
HCRI Holdings Trust
HCRI Illinois Properties, LLC
HCRI Indiana Properties, Inc.
HCRI Indiana Properties, LLC
HCRI Investments, Inc.
HCRI Kansas Properties, LLC
HCRI Kentucky Properties, LLC
HCRI Logistics, Inc.
HCRI Louisiana Properties, L.P.
HCRI Marina Place Properties Trust
HCRI Massachusetts Properties Trust
HCRI Massachusetts Properties Trust II
HCRI Massachusetts Properties, Inc.
HCRI North Carolina Properties I, Inc.
HCRI North Carolina Properties II, Inc.
HCRI North Carolina Properties III, Limited Partnership
HCRI North Carolina Properties, LLC
HCRI NY-NJ Properties, LLC
HCRI of Folsom Tenant, LLC
HCRI of Upland Tenant, LLC
HCRI Pennsylvania Properties Holding Company
HCRI Pennsylvania Properties, Inc.
HCRI Plano Medical Facility, LLC
HCRI Purchasing, LLC
HCRI Red Fox ManCo, LLC
HCRI Roswell I Medical Facility, LLC
HCRI Southern Investments I, Inc.
HCRI Sun III Minnetonka Senior Living, LLC
HCRI Sun III Tenant GP, LLC
HCRI Sun III Tenant, LP
Ontario
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Ontario
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Ontario
Ontario
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Massachusetts
Delaware
Delaware
Delaware
Delaware
Delaware
Massachusetts
Delaware
Delaware
Indiana
Delaware
Delaware
Kentucky
Delaware
Delaware
Massachusetts
Massachusetts
Massachusetts
Delaware
North Carolina
North Carolina
North Carolina
Delaware
Delaware
California
California
Delaware
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
HCRI Sun Three Lombard IL Senior Living, LLC
HCRI Sun Two Baton Rouge LA Senior Living, LLC
HCRI Sun Two Gilbert AZ Senior Living, LLC
HCRI Sun Two Metairie LA Senior Living, LLC
HCRI Tennessee Properties, LLC
HCRI Texas Properties, Inc.
HCRI Texas Properties, Ltd.
HCRI TRS Acquirer II, LLC
HCRI TRS Acquirer, LLC
HCRI TRS Trident Investment, LLC
HCRI Tucson Properties, Inc.
HCRI Wilburn Gardens Properties, LLC
HCRI Wisconsin Properties, LLC
Health Care REIT, LLC
Healthcare Property Consultants LLC
Healthcare Property Managers Of America, LLC
HealthLease U.S., Inc.
Heat OP TRS, Inc.
Highland Healthcare Investors, LLC
Hillside Center Realty, LLC
Hilltop Health Care Center, Inc.
Hingham Terry Drive I LLC
HL GP, LLC
Hunt Club Manor Facility Inc.
I.L.S. Care Communities Inc.
Imperial Place Residence Inc. / Residence Place Imperiale Inc.
Inglemoor Center Realty, LLC
Jupiter Landlord, LLC
Kaiser Gemini Burgundy, LLC
Kaiser Gemini Woodland, LLC
Karrington of Findlay Ltd.
Kensington Subtenant LP
Keystone Communities of Eagan, LLC
Keystone Communities of Highland Park, LLC
Keystone Communities of Mankato, LLC
Keystone Communities of Prior Lake, LLC
Keystone Communities of Roseville, LLC
King Street Facility Inc.
Kingston Facility Inc.
Kresson View Realty, LLC
KSL Landlord, LLC
Lafayette Center Realty, LLC
Laguna Hills Subtenant LP
Landmark Facility Inc.
Las Palmas Subtenant LP
Le Wellesley Inc.
Lehigh Manor Realty, LLC
Lenexa Investors II, LLC
Lenexa Investors, LLC
Leon Dorchester Facility Inc.
Les Belvederes De Lachine Inc.
Les Jardins Laviolette Inc.
Les Residences-Hotellerie Harmonie Inc.
Lillington AL Health Investors, LP
Lundy Manor Facility Inc.
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Texas
Delaware
Delaware
Delaware
Delaware
Delaware
Wisconsin
Delaware
Delaware
Florida
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Indiana
Ontario
Manitoba
Quebec
Delaware
Delaware
Oklahoma
Oklahoma
Ohio
Delaware
Minnesota
Delaware
Minnesota
Minnesota
Delaware
Ontario
Ontario
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Quebec
Delaware
Delaware
Delaware
Ontario
Canada
Quebec
Quebec
Virginia
Ontario
Madison Center Realty, LLC
Maids Moreton Operations Limited
Manoir Archer Inc.
Manoir Bois De Boulogne Inc.
Manoir et Cours de l'Atrium Inc.
Manoir Pointe-Aux-Trembles Inc.
Manoir St-Jerome Inc.
Marcella Center Realty, LLC
Marietta Physicians LLC
Markglen, Inc.
McKenzie Towne Facility Inc.
McKerley Health Facilities
Meadowcroft London Facility Inc.
Meadowlands Facility Inc.
Medical Real Estate Property Managers Of America, LLC
Meerkat TRS LLC
Merceville Center Realty, LLC
Meridian Healthcare, Inc.
Meridien Center Realty, LLC
MG Landlord II, LLC
MG Landlord, LLC
MG Tenant, LLC
MGP 42, LLC
MGP 44, LLC
MGP 45, LLC
MGP 46, LLC
MGP 47, LLC
MGP 50, LLC
MGP 51, LLC
MGP 52, LLC
MGP X, LLC
Middletown (RI) Associates of Rhode Island, L.P.
Midpark Way S.E. Property Inc.
Mill Creek Real Estate Partners, LLC
Mill Hill Retirement Facility Inc.
Mission Viejo Subtenant LP
ML Marion, L.P.
Montgomery Nursing Homes, Inc.
Monticello Healthcare Properties, LLC
Moorestown Physicians, LLC
Mount Vernon Physicians, LLC
Mountain View Tenant, LLC
MPG Crawfordsville, L.P.
MPG Healthcare L.P.
MS Arlington, L.P.
MS Avon, L.P.
MS Bradner, L.P.
MS Brecksville, L.P.
MS Castleton, L.P.
MS Chatham, L.P.
MS Chesterfield, L.P.
MS Danville, L.P.
MS Kokomo, L.P.
MS Mishawaka, L.P.
MS Springfield, L.P.
Delaware
United Kingdom
Quebec
Quebec
Quebec
Quebec
Quebec
Delaware
Delaware
West Virginia
Ontario
New Hampshire
Ontario
Ontario
Florida
Delaware
Delaware
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Ontario
Delaware
Indiana
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
MS Stafford, L.P.
MS Wabash, L.P.
MS Westfield, L.P.
Murrieta Healthcare Investors, LLC
Murrieta Healthcare Properties, LLC
Narrows Glen Subtenant LP
NC Sparti LLC
Northbridge Burlington Subtenant LLC
Northbridge Dartmouth Subtenant LLC
Northbridge Needham Subtenant LLC
Northbridge Newburyport Subtenant LLC
Northbridge Plymouth Subtenant LLC
Northbridge Tewksbury Subtenant LLC
Oak Ridge Realty, LLC
Ogilvie Facility Inc.
Oshawa Facility Inc.
Ottershaw Property Holdings Limited
Overland Park Tenant, LLC
Palmer Healthcare Investors LLC
Paramount Real Estate Services, Inc.
Park Place Realty, LLC
Parkland Commons Subtenant, LLC
Pelican Marsh Subtenant, LLC
Pelican Point Subtenant, LLC
Phillipsburg Center Realty, LLC
Pleasant View I Realty, LLC
Pleasant View II Realty, LLC
Pleasant View Retirement Limited Liability Company
Portage Care 2015, LLC
Portsmouth Facility Inc.
Potomac Acquisition LLC
Poughkeepsie Hopewell Junction LLC
PSL Associates, LLC
PVL Landlord - BC, LLC
PVL Landlord - STL Hills, LLC
PVL Tenant - BC, LLC
PVL Tenant - Hermitage, LLC
PVL Tenant - Panama City, LLC
PVL Tenant - STL Hills, LLC
PVL Tenant - Thomasville, LLC
Queensbury Tenant, LLC
Queenswood Facility Inc.
RC 101 E 87th Ave LLC
RC 12188A North Meridian St LLC
RC 12188B North Meridian St LLC
RC 135 Bunton Creek Rd LLC
RC 1501 N Florence Ave LLC
RC 1530 Needmore Rd LLC
RC 1815 E Lake Mead Blvd LLC
RC 1900 N Loop W Fwy LLC
RC 1921 Waldemere St LLC
RC 195 Fore River Pkwy LLC
RC 1950 Sunny Crest Dr LLC
RC 2222 S Harbor City Blvd 1070 Prospect Ave LLC
RC 23351 Prairie Star Pkwy LLC
Indiana
Indiana
Indiana
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Ontario
Jersey
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Michigan
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
RC 300 W Country Club Rd LLC
RC 350 W Country Club Rd LLC
RC 4515 Premier Dr LLC
RC 5282 Medical Dr LLC
RC 550 Orchard Park Rd LLC
RC 5655 Hudson Dr LLC
RC 601 W Country Club Rd LLC
RC 6424 E Broadway Rd LLC
RC 6635 Lake Dr LLC
RC 701 White Pond Dr LLC
RC 7916 Jefferson Blvd LLC
RC 8120 Timberlake Way LLC
RC 8800 W 75th St LLC
RC 8901 W 74th St LLC
RC 9301 W 74th St LLC
RC 9330 Poppy Dr LLC
RC Princeton Ave SW LLC
Redmond Partners, LLC
Redwood Tower Investments GP Limited
Redwood Tower Investments Limited
Redwood Tower Investments Limited Partnership
Redwood Tower Propco 1 Limited
Redwood Tower Propco 2 Limited
Redwood Tower Propco 3 Limited
Redwood Tower Propco 4 Limited
Regal Lifestyle (Birkdale) Inc.
Regal Lifestyle (Chatham) Inc.
Regal Lifestyle (Grand Wood) Inc.
Regal Lifestyle (Lynwood) Inc.
Regal Lifestyle (Port Perry) Inc.
Regency Subtenant LP
Renoir Facility Inc.
Residence Notre-Dame (Victoriaville) Inc.
Restful Homes (Milton Keynes) Ltd.
Restful Homes I Holding Company Ltd
Riverbend Facility Inc.
Riverview Ridge Realty, LLC
Rocket JV, LLC
Rocket Mezzanine Borrower LLC
RRR SAS Facilities Inc.
RSF REIT V GP, L.L.C.
RSF REIT V SP GP, L.L.C.
RSF REIT V SP, L.L.C.
RSF REIT V, LLC
RSF SP Franklin V L.P.
RSF SP Harnett V, L.P.
RSF SP Liberty Ridge V L.P.
RSF SP Lillington AL V, L.P.
RSF SP Meadowview V L.P.
RSF SP Oakwood V, L.P.
RSF SP Scranton AL V, L.P.
RSF SP Scranton V, L.P.
RSF SP Smithfield V L.P.
RSF SP Stroudsburg V, L.P.
RSF SP Wrightsville V L.P.
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Jersey
Jersey
Jersey
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Ontario
Ontario
Ontario
Ontario
Ontario
Delaware
Ontario
Quebec
United Kingdom
Jersey
Ontario
Delaware
Delaware
Delaware
Ontario
Texas
Texas
Delaware
Maryland
Texas
Texas
Texas
Texas
Texas
Texas
Texas
Texas
Texas
Texas
Texas
Saints Investments Limited
Santa Monica GP, LLC
Scranton AL Investors, LLC
Scranton Health Investors, LLC
Senior Living Ankeny, LLC
Senior Living Fairfield, LLC
Senior Living Grove City, LLC
Senior Living Pella, LLC
Senior Living Portage, LLC
Senior Living Waterville, LLC
Senior Living Waukee, LLC
Senior Star Investments Weber, LLC
Senior Star Kenwood Holdco, LLC
Senior Star Tenant Weber, LLC
Seniors Housing Investment III REIT Inc.
Shelbourne Senior Living Limited
Sierra Pointe Subtenant LP
Signature Devco 2 Property Holdings Limited
Signature Devco 3 Property Holdings Limited
Signature Devco 4 Property Holdings Limited
Signature Devco 5 Property Holdings Limited
Signature Devco 6 Property Holdings Limited
Signature Holdco 1 Ltd.
Signature Holdco 2 Ltd
Signature Holdco Limited
Signature of Brentwood (Operations) Limited
Signature of Camberley (Operations) Limited
Signature of Coombe (Operations) Limited
Signature of Epsom (Operations) Limited
Signature of Hindhead (Operations) Limited
Signature of Marlow (Operations) Limited
Signature of Sunninghill (Operations) Limited
Signature Senior Landlord, LLC
Silver Lake Realty DE, LLC
Silverado Senior Living Calabasas, Inc.
Silverado Senior Living Salt Lake City, Inc.
Silverado Senior Living, Inc.
Simi Hills Subtenant LP
SIPL Finco S.a.r.l
SIPL Finco TRS S.a.r.l.
SIPL Holdco Ltd
SIPL Investments S.a.r.l
SIPL Partner 1 S.a.r.l
SIPL Partner 10 S.a.r.l
SIPL Partner 11 S.a.r.l
SIPL Partner 2 S.a.r.l
SIPL Partner 3 S.a.r.l
SIPL Partner 4 S.a.r.l
SIPL Partner 5 S.a.r.l
SIPL Partner 6 S.a.r.l
SIPL Partner 7 S.a.r.l
SIPL Partner 8 S.a.r.l
SIPL Partner 9 S.a.r.l
SIPL Propco NV Ltd
SIPL Quantum Propco Ltd
United Kingdom
Delaware
Virginia
Virginia
Delaware
Michigan
Michigan
Delaware
Michigan
Michigan
Delaware
Delaware
Delaware
Delaware
Maryland
United Kingdom
Delaware
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Delaware
Delaware
California
Delaware
California
Delaware
Luxembourg
Luxembourg
Jersey
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Jersey
Jersey
SIPL Saints Bristol Propco Limited
SIPL Saints Leicester Propco Limited
SIPL Saints Propco Ltd
SIPL Sunrise Propco Ltd
South Valley Medical Building L.L.C.
South Valley Venture, LLC
SP Green Ridge, LLC
SP Harnett, LLC
SP Lillington, LLC
SP Virginia Beach, LLC
SP Whitestone, LLC
SSL Tenant, LLC
St. Anthony Physicians, LLC
St. Clare Physicians, LLC
Stamford Physicians, LLC
Sterling Finco LP
Sterling Investment Partners Ltd
Sterling Midco Limited
Stittsville Facility Inc.
Stroudsburg Health Investors, LLC
Subtenant 10120 Louetta Road, LLC
Subtenant 10225 Cypresswood Drive, LLC
Subtenant 1118 N. Stoneman Avenue, LLC
Subtenant 11330 Farrah Lane, LLC
Subtenant 1221 Seventh Street, LLC
Subtenant 125 W. Sierra Madre Avenue, LLC
Subtenant 1301 Ralston Avenue, LLC
Subtenant 14058 A Bee Cave Parkway, LLC
Subtenant 1430 East 4500 South, LLC
Subtenant 1500 Borden Road, LLC
Subtenant 1936 Brookdale Road, LLC
Subtenant 22955 Eastex Freeway, LLC
Subtenant 240 E. Third Street, LLC
Subtenant 25100 Calabasas Road, LLC
Subtenant 30311 Camino Capistrano, LLC
Subtenant 330 North Hayworth Avenue, LLC
Subtenant 335 Saxony Road, LLC
Subtenant 350 W. Bay Street, LLC
Subtenant 3611 Dickason Avenue, LLC
Subtenant 3690 Mapleshade Lane, LLC
Subtenant 514 N. Prospect Avenue, LLC
Subtenant 550 America Court, LLC
Subtenant 5521 Village Creek Drive, LLC
Subtenant 7001 Bryant Irvin Road, LLC
Subtenant 7950 Baybranch Drive, LLC
Subtenant 800 C-Bar Ranch Trail, LLC
Subtenant 8855 West Valley Ranch Parkway, LLC
Subtenant 9410 E. Thunderbird, LLC
Sun City Center Subtenant, LLC
Sunrise at Gardner Park Limited Partnership
Sunrise Beach Cities Assisted Living, L.P.
Sunrise Connecticut Avenue Assisted Living Owner, L.L.C.
Sunrise Gardner Park GP, Inc.
Sunrise Home Help Services Limited
Sunrise Louisville KY Senior Living, LLC
United Kingdom
United Kingdom
Jersey
Jersey
Minnesota
Minnesota
Virginia
Virginia
Virginia
Virginia
Virginia
Delaware
Delaware
Delaware
Delaware
United Kingdom
Jersey
United Kingdom
Ontario
Virginia
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
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Delaware
Delaware
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Delaware
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Delaware
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Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Massachusetts
California
Virginia
Massachusetts
United Kingdom
Kentucky
Sunrise of Beaconsfield G.P. Inc.
Sunrise of Beaconsfield, LP
Sunrise of Blainville G.P. Inc.
Sunrise of Blainville, LP
Sunrise of Dollard des Ormeaux G.P. Inc.
Sunrise of Dollard des Ormeaux, LP
Sunrise of Vienna OpCo, LLC
Sunrise of Vienna Propco, LLC
Sunrise Operations Bramhall II Limited
Sunrise Operations Cardiff Limited
Sunrise Operations Esher Limited
Sunrise Operations Weybridge Limited
Sunrise UK Operations Limited
Sunrise/Inova McLean Assisted Living, L.L.C.
SZR Beaconsfield Inc.
SZR Blainville Inc.
SZR Dollard des Ormeaux, Inc.
Tampa Bay Subtenant, LLC
Terrace Gardens Retirement Facility Inc.
The Courtyards Subtenant, LLC
The Landing at Queensbury Inc.
The Renaissance Resort Retirement Living Inc. / Complexe De Residence Renaissance Inc.
Thousand Oaks Property Owner LLC
Trafalgar Facility Inc.
Urban Senior Living Holdco LLC
Urban Senior Living JV LLC
Urban Senior Living REIT LLC
Valleyview Drive S.W. Property Inc.
Vankleek Facility Inc.
Ventana Canyon Tenant, LLC
Victoria Commons Realty, LLC
Vida 7115 Greenville Ave LLC
Vida JV MOB Portfolio GP LLC
Villa Chicoutimi Inc.
Villa de L'Estrie Inc.
Villa du Saguenay Inc.
Villa Jonquiere Inc.
Villa Rive-Sud Inc.
Virginia Beach Health Investors, LLC
Voorhees Healthcare Properties, LLC
Voorhees Physicians, LLC
W TCG Burleson AL, LLC
Warwick Associates Of Rhode Island, L.P.
Waterview Center Realty, LLC
WELL 1031 Holdco 1 LLC
WELL 1031 TRS LLC
WELL 2010 LLC
WELL 2010 REIT LLC
WELL 4865 MacArthur Blvd LLC
WELL Acquisition Holdco LLC
WELL AMP TRS LLC
WELL Balfour Brookline Landlord LLC
WELL Balfour Brookline Tenant LLC
WELL Balfour Landlord LLC
WELL Balfour Stapleton Landlord LLC
New Brunswick
Ontario
New Brunswick
Ontario
New Brunswick
Ontario
Delaware
Delaware
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Virginia
New Brunswick
New Brunswick
New Brunswick
Delaware
Ontario
Delaware
Virginia
Canada
Delaware
Ontario
Delaware
Delaware
Delaware
British Columbia
Ontario
Delaware
Delaware
Delaware
Delaware
Quebec
Quebec
Quebec
Quebec
Quebec
Virginia
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
WELL Balfour Tenant LLC
WELL BL OpCo LLC
WELL BL Portfolio 1 Opco LLC
WELL BL Portfolio 1 Propco LLC
WELL BL Potomac Operator LLC
WELL Brandywine Howell LLC
WELL Columbus JV Member LLC
WELL Frontier Landlord LLC
WELL Frontier Tenant LLC
WELL I-A Properties LLC
WELL Ibis Portfolio Member LLC
WELL LCB Landlord LLC
WELL LCB Portfolio 1 Landlord LLC
WELL LCB Portfolio 1 Tenant LLC
WELL LCB Tenant LLC
WELL Los Gatos LLC
WELL M&O Haymarket JV LLC
WELL Mezzanine Lender LLC
WELL OSL Carmichael LLC
WELL OSL DownREIT Holdco LLC
WELL OSL DownREIT JV Landlord LLC
WELL OSL DownREIT Member LLC
WELL OSL EL Dorado LLC
WELL OSL North Fresno LLC
WELL OSL Orange LLC
WELL OSL Pacific Beach LLC
WELL OSL Redding LLC
WELL Pappas Berkeley Owner LLC
WELL Pappas Corporate Parcel Owner LLC
WELL PM Properties LLC
WELL Properties Intermediate Holdco LLC
WELL Purchasing Group, LLC
WELL SP Grove City Landlord LLC
WELL SP Landlord LLC
WELL SP Lender LLC
WELL SP Tenant LLC
WELL Sparrow Project Group 1 LLC
WELL TBC Columbus JV Holdco LLC
WELL TBC Columbus JV LLC
WELL TP Crabtree Owner LP
WellClover Holdings LLC
WellClover TRS II LLC
WellClover TRS LLC
WellClover Venture II LLC
WellClover Venture LLC
Wellesley Washington Street Housing I LLC
wellFLEX LLC
Welltower 1915 North 34th Street, LLC
Welltower 1950 Sunny Crest Drive GP, LLC
Welltower 1950 Sunny Crest Drive, LP
Welltower 2130 Continental Drive, LLC
Welltower 5017 South 110th Street, LLC
Welltower Arlington TRS LLC
Welltower Ballard LLC
Welltower BV Westwood PropCo GP LLC
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
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Delaware
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Delaware
Delaware
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Delaware
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Delaware
Delaware
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Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
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Delaware
Delaware
Delaware
Delaware
Delaware
Wisconsin
Delaware
Delaware
Wisconsin
Wisconsin
Delaware
Minnesota
Delaware
Welltower Canadian Services TRS GP LTD.
Welltower Canadian Services TRS LP
Welltower Carmichael Tenant LLC
Welltower CCRC OpCo LLC
Welltower Charitable Foundation
Welltower Cogir Landlord, LP
Welltower Cogir Tenant, LLC
Welltower Colorado Properties LLC
Welltower Eclipse Issaquah PropCo LLC
Welltower Eclipse Issaquah TRS LLC
Welltower HealthCare Properties II LLC
Welltower HealthCare Properties LLC
Welltower HealthCare Venture Properties LLC
Welltower Iowa Holdco LLC
Welltower Kisco RIDEA Holdco GP LLC
Welltower Kisco RIDEA Holdco LP
Welltower Kisco RIDEA Landlord, LLC
Welltower Kisco RIDEA Tenant, LLC
Welltower KSL Owner LLC
Welltower Landlord Group LLC
Welltower Management Company Holdco LLC
Welltower Mission Viejo Medical Center JV, LLC
Welltower NNN Group LLC
Welltower North Fresno Tenant LLC
Welltower Northbridge Tenant LLC
Welltower OM Group LLC
Welltower OM Member JV GP LLC
Welltower OM Member JV LP
Welltower OM Member REIT LLC
Welltower OM PropCo GP LLC
Welltower OpCo Group LLC
Welltower Orange Tenant LLC
Welltower Pacific Beach Tenant LLC
Welltower Pegasus Landlord, LLC
Welltower Pegasus Tenant, LLC
Welltower Pegasus TRS LLC
Welltower Portfolio Tenant LLC
Welltower PropCo Group Borrower LLC
Welltower PropCo Group LLC
Welltower Redding Tenant LLC
Welltower REIT Holdings LLC
Welltower TCG NNN Landlord, LLC
Welltower TCG RIDEA Landlord, LLC
Welltower TCG RIDEA Tenant, LLC
Welltower Tenant Group LLC
Welltower TRS Holdco LLC
Welltower Victory II GP LLC
Welltower Victory II JV LP
Welltower Victory II Landlord LP
Welltower Victory II OpCo LLC
Welltower Victory II PropCo LLC
Welltower Victory II REIT LLC
Welltower Victory II Tenant LP
Welltower Victory II TRS LLC
Welltower Victory III Landlord LLC
Ontario
Ontario
Delaware
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Delaware
Delaware
Delaware
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Welltower Victory III OpCo LLC
Welltower Victory III Tenant LP
Welltower Victory III TRS LLC
Westford Littleton Road I LLC
Westminster Junction Venture, LLC
White Plains Associates Lessee LLC
White Plains Associates LLC
White Plains Garage Developer LLC
White Plains Senior Housing Lessee LLC
White Plains Senior Housing Owner LLC
Wimbledon Opco Limited
Windrose 310 Properties, L.L.C.
Windrose Congress I Properties, L.P.
Windrose Congress II Properties, L.P.
Windrose Mount Vernon Properties, L.L.C.
Windrose Palm Court Properties, L.L.C.
Windrose Princeton Properties, L.L.C.
Windrose SPE Mount Vernon Properties, Inc.
Windrose St. Louis I Properties, LLC
Windrose Tulsa Properties, L.L.C.
Windrose West Boca Properties, Ltd.
Windrose West Seneca Properties, LLC
WMP West Seneca Management, LLC
WMPT Congress I Management, L.L.C.
WMPT Congress II Management, L.L.C.
WMPT Princeton Management, L.L.C.
WMPT Sacramento Properties, L.L.C.
WMPT Sacramento, L.P.
WMPT St. Louis I Management, LLC
WMPT Stone Oak Properties, L.L.C.
WMPT Stone Oak, L.P.
WMPT Tulsa Management, L.L.C.
WMPT West Boca Management, L.L.C.
WR Brentwood Propco Limited
WR Coombe Propco Limited
WR Epsom Propco Limited
WR GP Limited
WR Hindhead Propco Limited
WR Holdco 2 Limited
WR Holdco Limited
WR Investment Partners Limited
WR Limited Partnership
WR Midco Limited
WR Signature DP2 Limited
WR Signature Operations Limited
WT UK OpCo 1 Limited
WT UK OpCo 2 Limited
WT UK OpCo 3 Limited
Delaware
Delaware
Delaware
Delaware
Minnesota
Delaware
Delaware
Delaware
Delaware
Delaware
United Kingdom
Tennessee
Delaware
Delaware
Virginia
Virginia
Delaware
Georgia
Delaware
Delaware
Florida
Delaware
Delaware
Delaware
Delaware
Delaware
Virginia
Virginia
Delaware
Virginia
Virginia
Delaware
Delaware
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
United Kingdom
Jersey
United Kingdom
United Kingdom
United Kingdom
United Kingdom
EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the following registration statements:
• Registration Statement (Form S-8 No. 333-126195) dated June 28, 2005 pertaining to the Health Care REIT, Inc. 2005 Long-Term Incentive Plan;
• Registration Statement (Form S-8 No. 333-161131) dated August 6, 2009 pertaining to the Health Care REIT, Inc. Amended and Restated 2005
Long-Term Incentive Plan;
• Registration Statement (Form S-8 No. 333-211832) dated June 3, 2016 pertaining to the Welltower Inc. 2016 Long-Term Incentive Plan;
• Registration Statement (Form S-3 No. 333-225004) dated May 17, 2018 pertaining to an indeterminate amount of debt securities, common stock,
preferred stock, depositary shares, warrants and units of Welltower Inc.;
• Registration Statement (Form S-3 No. 333-225005) dated May 17, 2018 pertaining to the Welltower Inc. Sixth Amended and Restated Dividend
Reinvestment and Stock Purchase Plan; and
• Registration Statement (Form S-8 No. 333-225006) dated May 17, 2018 pertaining to the Welltower Inc. Employee Stock Purchase Plan
of our reports dated February 10, 2021, with respect to the consolidated financial statements and schedules of Welltower Inc. and subsidiaries and the
effectiveness of internal control over financial reporting of Welltower Inc. and subsidiaries included in this Annual Report (Form 10-K) of Welltower Inc.,
for the year ended December 31, 2020.
/s/ ERNST & YOUNG LLP
Toledo, Ohio
February 10, 2021
POWER OF ATTORNEY
EXHIBIT 24
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, a director or officer of Welltower Inc. (the “Company”), a Delaware
corporation, hereby constitutes and appoints Shankh Mitra and Timothy G. McHugh, and each of them, his or her true and lawful attorneys-in-fact and
agents, for him or her and in his or her name, place and stead, in any and all capacities, to sign the Annual Report on Form 10-K for the year ended
December 31, 2020 to be filed by the Company with the Securities and Exchange Commission under the provisions of the Securities Exchange Act of
1934, as amended, and any and all amendments to such Form 10-K, and to file such Form 10-K and each such amendment so signed, with all exhibits
thereto, and any and all other documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of this 10th day of February 2021.
/s/ Kenneth J. Bacon
Kenneth J. Bacon, Chairman and Director
/s/ Karen B. DeSalvo
Karen B. DeSalvo, Director
/s/ Jeffrey H. Donahue
Jeffrey H. Donahue, Director
/s/ Philip L. Hawkins
Philip L. Hawkins, Director
/s/ Sharon M. Oster
Sharon M. Oster, Director
/s/ Diana W. Reid
Diana W. Reid, Director
/s/ Sergio D. Rivera
Sergio D. Rivera, Director
/s/ Johnese M. Spisso
Johnese M. Spisso, Director
/s/ Kathryn M. Sullivan
Kathryn M. Sullivan, Director
/s/ Shankh Mitra
Shankh Mitra, Chief Executive Officer, Chief Investment Officer and
Director
(Principal Executive Officer)
/s/ Timothy G. McHugh
Timothy G. McHugh, Executive Vice President -
Chief Financial Officer (Principal Financial Officer)
/s/ Joshua T. Fieweger
Joshua T. Fieweger, Chief Accounting Officer
(Principal Accounting Officer)
EXHIBIT 31.1
I, Shankh Mitra, certify that:
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
1.
2.
3.
4.
5.
I have reviewed this annual report on Form 10-K of Welltower Inc.;
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;
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;
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)
(b)
(c)
(d)
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;
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;
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
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
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 10, 2021
/s/ SHANKH MITRA
Shankh Mitra,
Chief Executive Officer, Chief Investment Officer and
Director
I, Timothy G. McHugh, certify that:
CERTIFICATION OF CHIEF FINANCIAL OFFICER
EXHIBIT 31.2
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of Welltower Inc.;
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;
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;
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)
(b)
(c)
(d)
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;
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;
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
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 10, 2021
/s/ TIMOTHY G. MCHUGH
Timothy G. McHugh,
Executive Vice President - Chief Financial Officer
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
I, Shankh Mitra, 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, 2020 (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.
EXHIBIT 32.1
/s/ SHANKH MITRA
Shankh Mitra
Chief Executive Officer, Chief Investment Officer and Director
Date: February 10, 2021
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.
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, 2020 (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.
EXHIBIT 32.2
/s/ TIMOTHY G. MCHUGH
Timothy G. McHugh,
Executive Vice President - Chief Financial Officer
Date: February 10, 2021
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.