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, 2021
☐ 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 $35,091,527,000.
As of February 4, 2022, the registrant had 447,279,642 shares of common stock outstanding.
Portions of the registrant’s definitive proxy statement for the annual stockholders’ meeting to be held May 9, 2022, are incorporated by reference into Part III.
DOCUMENTS INCORPORATED BY REFERENCE
WELLTOWER INC. AND SUBSIDIARIES
2021 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
PART II
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
[Reserved]
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
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
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 9C.
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, 2021.
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 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.
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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 68%, 67% and 67% of total revenues for the years ended December 31, 2021, 2020 and 2019, respectively. As of
December 31, 2021, we had relationships with 38 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, 2021, our relationship with Sunrise Senior Living accounted for approximately 33% of our Seniors Housing Operating segment revenues and 22% of our total revenues.
Additionally Revera accounted for approximately 11% of our Seniors Housing Operating segment revenues and 7% 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. 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. 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.
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 19%, 17% and 19% of total revenues for the years ended December 31, 2021, 2020 and 2019, respectively. For the year ended
December 31, 2021, our revenues related to our relationship with ProMedica Health System ("ProMedica") accounted for approximately 26% of our Triple-net segment
revenues and 5% of total revenues. As of December 31, 2021, our relationship with ProMedica was comprised of a master lease for 205 properties owned by a joint venture
landlord of which we own 80%. In addition to rent, the master lease requires ProMedica to pay all operating costs, utilities, real estate taxes, insurance, building repairs,
maintenance costs and all obligations under certain ground leases. All obligations under the master lease have been guaranteed by ProMedica.
For the year ended December 31, 2021, our revenues related to our relationship with Genesis Healthcare ("Genesis") accounted for approximately 6% of our Triple-net
segment revenues and 1% of our total revenues. During 2020, Genesis indicated substantial doubt as to their ability to continue as a going concern. As a result, effective July 1,
2020, we recognized reserves for 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. Additionally, in March 2021, we entered into definitive agreements to substantially exit our operating relationship with Genesis. As of December 31,
2021, we have transitioned nine facilities to an 80/20 joint venture with ProMedica. Additionally, operations have transitioned to new operators for 39 of the remaining 42
properties, with three properties expected to transition at a later date. We have entered into definitive agreements to sell the 42 properties to either a joint venture with Aurora
Health Network, the new operator and us, or to sell outright. As of December 31, 2021, we have closed on the sale of 25 of those properties. An additional ten properties are
classified as held for sale and the remaining seven properties are expected to be sold in 2023. As a result, as of December 31, 2021, our relationship with Genesis was
comprised of three properties owned 100% by us and master leased to Genesis, which are currently classified as held for sale, a loan balance net of allowance for credit losses
of $154,476,000, approximately 9.5 million shares of GEN Series A common stock and a 25% ownership stake in an unconsolidated joint venture that includes two master
leases for 28 properties operated by Genesis.
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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
87% 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 13%, 16% and 13% of total revenues for each of the years ended December 31, 2021, 2020 and 2019,
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, 2021, approximately 94% 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 mainly 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, 2021, 65% of our portfolio included leases with full pass through, 30% with a
partial expense reimbursement (modified gross) and 5% with no expense reimbursement (gross). Our outpatient medical leases are non-cancellable operating leases that have a
weighted-average remaining term of five years at December 31, 2021 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, 2021, we had outstanding
construction investments of $651,389,000 and were committed to provide additional funds of approximately $1,208,913,000 to complete construction for consolidated
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, 2021, we had outstanding loans, net of allowances, of $1,292,308,000 with an interest yield of approximately 11.2% 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, 2021 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. At December 31, 2021, we had investments in unconsolidated entities of $1,039,043,000. 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 related to twelve properties with a carrying value of $317,647,000 as of December 31, 2021, 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.
5
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 continue in 2022 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
Environmental, Social and Governance ("ESG") Approach We are committed to operating in a responsible, transparent and sustainable manner. Our leadership and Board of
Directors (through the Nominating Corporate/Governance Committee), oversee and advance our ESG initiatives. We 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 leading ESG practices
across our business and we were recognized for our leadership in this space over the past year in the following ways:
• Elevated by CDP to the highest available band level of leadership with an improved score of “A-” for taking coordinated action on climate issues;
• Raised MSCI ESG rating from A to AA;
• Named in 2021 to the Dow Jones Sustainability North American Index for the sixth consecutive year;
• Listed in the FTSE4Good Index since 2012;
• Recognized by the U.S. Environmental Protection Agency (EPA) and U.S. Department of Energy as an ENERGY STAR Partner of the Year for the third consecutive
year and elevated to the level of Sustained Excellence, the EPA’s highest recognition within the ENERGY STAR program;
• Maintained Gold Level Green Lease Leader status by the Institute for Market Transformation and the U.S. Department of Energy’s Better Buildings Alliance;
• Named to the Bloomberg Gender-Equality Index for the third consecutive year;
• Named to the Workplace Health Achievement Index by the American Heart Association for the fourth consecutive year, and increased from Bronze to Silver level;
• Maintained Prime status under the ISS-ESG Corporate rating for the third consecutive year;
• Named by S&P Global in collaboration with RobecoSAM for the fourth consecutive year in the 2021 edition of The Sustainability Yearbook;
• Named to the top 20 percent of Newsweek’s America’s Most Responsible Companies list for the third consecutive year;
• Named to Sustainalytics 2021 Top-Rated ESG Companies list;
• Named as one of the top sustainable REITs in Barron’s list of America’s Most Sustainable Companies for the second consecutive year;
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• Honored at the Women’s Forum of New York Breakfast of Champions for the second time for our representation of women on our Board of Directors; and
• Opened Sunrise at East 56th, the recipient of all three LEED Silver, WELL Certification at the Silver level, and WELL Health-Safety Rating Seal certifications.
Environmental We strive to reduce our environmental impact by increasing energy and water efficiency, reducing greenhouse gas emissions, and by investing in projects that
reduce energy and water consumption that meet our rate of return threshold. 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, greenhouse gas ("GHG"), water, and waste) is evolving to become a set of
tools for benchmarking. A portion of our self-managed Outpatient Medical portfolio is benchmarked in EPA ENERGY STAR Portfolio Manager ("ESPM") and we regularly
engage with our operators and tenants on ENERGY STAR, utility bill aggregators, utility companies, and others to add to our number of ESPM benchmarked properties
throughout our portfolio. In 2021, we continued to work towards our goals of a 10% reduction in GHG emissions and energy and water usage by 2025 from our 2018 baseline.
We have employee, tenant, operator/manager and vendor engagement programs in place, focused on operational strategies to drive energy and water efficiency. We have
issued guidance with accompanying training to assist them to successfully benchmark our buildings and to engage them to improve energy and water efficiency, as well as
increase their recycling diversion rates.
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 have been, and continue to be, used to
fund energy efficiency, water conservation and green building projects. As of September 30, 2021, we have utilized $277,732,000 of proceeds from this issuance on such
projects.
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. As such, 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 value and are committed to our employees. We believe that a diverse workplace produces a variety of perspectives, motivates employees and helps us understand
and better serve our stakeholders, and the communities in which we do business. As of December 31, 2021, our U.S. employees self-identified as follows:
Ethnicity
Male
Female
Asian
Black or African American
Hispanic or Latino
Native Hawaiian or Other Pacific Islander
Two or More Races
White
Gender
5 %
5 %
7 %
— %
1 %
82 %
100 %
51 %
7 %
7 %
7 %
1 %
1 %
77 %
100 %
49 %
We have reinforced our already strong commitment to diversity and inclusion through our Diversity Council and support of our eight employee network groups ("ENGs").
Our ENGs include women, families, racial and ethnic minorities, military, young professionals, and those who identify as LGBTQI+ and their allies. Our ENGs provide
support, education, networking opportunities and community belonging for our employees. Our support of diversity and inclusion through our Diversity Council and ENGs,
taken together with other employee initiatives, such as tailored messaging, training and discussions on equality and belonging, support our efforts to compete for and foster
talent and inclusiveness in an ever-changing workforce.
In addition, we have several social initiatives in place that are focused on fostering a more diverse workforce, engaging with our communities and promoting the health and
well-being of our employees, tenants and residents. The Welltower Charitable Foundation (the "Foundation") financially supports charitable initiatives related to aging, health
care, the environment, education and the arts. We encourage our employees to give back to the community by matching their contributions and donating their time to eligible
charitable organizations. Funds are also allocated to each of our ENGs to make charitable contributions in support of their programming efforts. Additionally, the Foundation
facilitates presentations for charities to compete in the Give-WELL campaign. This campaign enables our employees to present and vote for charities that will receive donations
from the Foundation. During 2021, we sponsored our second annual Day of Giving so our employees could collaborate to make an impact with local charitable organizations
through volunteer opportunities. See Human Capital section below for additional information regarding employee initiatives and programs.
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Governance Our commitment to diversity starts at the top with a highly knowledgeable, skilled and diverse Board of Directors. As of December 31, 2021, our 11 Directors
self-identified as follows:
Asian
Black or African American
Hispanic or Latino
White
Board Composition
Ethnicity
Gender
Male
Female
9 %
18 %
18 %
55 %
100 %
64 %
36 %
100 %
Ten of our 11 Directors are independent and the independent Chair of our Board is held by a Black/African American male. Four or 36% of our five Board committees are
chaired by either a Female (2), Hispanic/Latino (1) or Black/African American (1) Director.
Additional information regarding our ESG programs and initiatives is available in our 2020 Environmental, Social and Governance Report (located on our website at
www.welltower.com). Information on our website, including our Environmental, Social and Governance 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, 2021, we had 464 employees (443 located in United States, 13 in the United Kingdom, six in Canada and two 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 Engagement High employee engagement and satisfaction are critical to attracting and retaining top talent. During 2021, we conducted an employee engagement
survey through an independent third party, measuring our progress on important employee issues such as manager relationships, employee empowerment, performance
management and resources and support, and identifying opportunities for growth and improvement. Scores have been shared with all managers and action plans to improve and
prioritize focus areas are being put into place.
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 robust early career programs, formal mentorship and coaching programs, manager development
training, skill development courses and education assistance. During 2021, we launched executive management coaching programs to equip leaders with structured 360
feedback, customized development plans and guidance on company-wide succession planning. For our vice presidents, we partnered with a virtual coaching platform that
scales individual access to expert coaches, training opportunities and enables behavioral change through award-winning artificial intelligence. For our senior vice presidents, we
partnered with an independent advisory firm to provide one-on-one coaching, including an extensive 360 feedback process to focus on maximizing their executive leadership
potential.
Compensation and Benefits In addition to salary, our compensation and benefits programs include annual short term incentive bonuses, long-term incentive stock awards,
retirement plans, 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. With the assistance of
independent third parties, we annually evaluate and benchmark the competitiveness of our compensation and benefits programs focusing on fair pay practices that reward
performance and support the needs of our employees.
Health, Safety and Wellness The success of our business is fundamentally connected to the safety and well-being of our employees, tenants, operators and managers, and their
residents and visitors, as the case may be. We provide our employees and their families with access to numerous innovative, flexible and convenient health and wellness
programs that support physical, mental and financial well-being. As we continued to navigate COVID-19 in 2021, we took a number of actions designed to provide for the
safety and well-being of our employees such as allowing remote and hybrid work, and flexible schedules where feasible, establishing office protocols for employee safety,
conducting training courses on COVID-19 prevention and encouraging COVID-19 vaccinations and boosters across our workforce through paid time off in order to obtain
vaccinations and boosters and manage side effects. Also during 2021, we increased internal communications across the organization through podcasts, town hall meetings, team
events (virtually and in person) and dedicated communication channels for the ENGs, resulting in more connectivity and engagement. We continued to provide access to
personal protective equipment, and enhanced cleaning and sanitation procedures.
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.
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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 seniors housing facilities are state licensing and certification laws. For example, certain health care facilities are subject to a variety of
licensure and certificate of need (“CON”) laws and regulations. Where applicable, CON laws generally require, among other requirements, that a facility demonstrate the need
for (1) constructing a new facility, (2) adding beds or expanding an existing facility, (3) investing in major capital equipment or adding new services, (4) changing the
ownership or control of an existing licensed facility or (5) terminating services that have been previously approved through the CON process. Certain state CON laws and
regulations may restrict the ability of operators to add new properties or expand an existing facility’s size or services. In addition, CON laws may constrain the ability of an
operator to transfer responsibility for operating a particular facility to a new operator.
With respect to licensure, generally our long-term/post-acute care facilities are required to be licensed by the applicable state regulatory authority 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.
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•
•
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, or 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 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 there have
been multiple attempts to repeal or amend the Health Reform Laws through legislative action and legal challenges, legislative attempts to completely repeal the Health
Reform Laws have been unsuccessful to date, and on June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the Health Reform Laws
brought by several states without specifically ruling on the constitutionality of the Health Reform Laws. Nevertheless, the status of the Health Reform Laws may be subject
to change and other health reform measures could be implemented as a result of political, legislative, regulatory and administrative developments and judicial proceedings.
Further, the impact that the Biden Administration or U.S. Congress may have on health reform (including through new legislative, executive order, or regulatory efforts)
remains uncertain, 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.
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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, and revocation of healthcare licenses. 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 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, and other similar laws in Colorado and Virginia 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 and costs 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, and potentially create new privacy related legal risks.
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 £17.5 million, whichever is greater. Further, to the extent that an entity established in the U.K. or any other jurisdiction offers goods or services to
individuals in the European Economic Area, that entity may also be subject to the E.U. General Data Protection Regulation ("E.U. GDPR"). Similarly, the E.U. GDPR imposes
obligations on controllers with the
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potential for fines of up to 4% of annual worldwide turnover or €20 million, whichever is greater. Entities incorporated in or carrying on a business in the U.K., as well as
individuals residing in the U.K., are also subject to the U.K. Bribery Act 2010. The U.K. has national minimum wage legislation with a maximum fine for non-payment of
£20,000 per worker and employers who fail to pay will be banned from being a company director for up to 15 years. 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.
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. In September 2021, the province of Quebec adopted significant amendments to its privacy legislation, including a new enforcement
scheme with significant penalties and fines: up to CAD $10 million or 2% of global turnover (whichever is greater) for administrative monetary penalties and up to CAD $25
million or 4% of global turnover for penal fines. The amendments will go into effect in three stages: (i) a few provisions on September 22, 2022, (ii) most provisions on
September 22, 2023 (including the new enforcement scheme), and (iii) one provision on September 23, 2024. Senior living residences may also be subject to laws pertaining to
residential tenancy, provincial and/or municipal laws applicable to fire safety, food services, zoning, occupational health and safety, public health and the provision of
community health care and funded long-term/post-acute care.
Taxation
The following summary of the taxation of the company and the material U.S. federal income tax consequences to the holders of our debt and equity securities is for general
information only and is not tax advice. This summary does not address all aspects of taxation that may be relevant to certain types of holders of stock or securities (including,
but not limited to, insurance companies, tax-exempt entities, financial institutions or broker-dealers, persons holding shares of common stock as part of a hedging, integrated
conversion, or constructive sale transaction or a straddle, traders in securities that use a mark-to-market method of accounting for their securities, investors in pass-through
entities and foreign corporations and persons who are not citizens or residents of the United States).
This summary does not discuss all of the aspects of U.S. federal income taxation that may be relevant to you in light of your particular investment or other circumstances. In
addition, this summary does not discuss any state or local income taxation or foreign income taxation or other foreign tax consequences. This summary is based on current U.S.
federal income tax laws. A discussion of the potential implications to the Company of the Tax Act is provided at the end of this summary below. Subsequent developments in
U.S. federal income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income
tax consequences of purchasing, owning and disposing of our securities as set forth in this summary. Before you purchase our securities, you should consult your own tax
advisor regarding the particular U.S. federal, state, local, foreign and other tax consequences of acquiring, owning and selling our securities.
General
We elected to be taxed as 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.
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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 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.
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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:
• 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.”
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• 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.
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
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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.
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
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year ended December 31, 2021. Although we intend to make timely distributions sufficient to satisfy these annual distribution requirements for subsequent years, economic,
market, legal, tax or other factors could limit our ability to meet those requirements. See “Item 1A - Risk Factors.”
It is also possible that, from time to time, we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement, or to distribute such greater amount
as may be necessary to avoid income and excise taxation, due to, among other things, (1) timing differences between (i) the actual receipt of income and actual payment of
deductible expenses and (ii) the inclusion of income and deduction of expenses in arriving at our taxable income, or (2) the payment of severance benefits that may not be
deductible to us. In the event that timing differences occur, we may find it necessary to arrange for borrowings or, if possible, pay dividends in the form of taxable stock
dividends in order to meet the distribution requirement.
Under certain circumstances, including in the event of a deficiency determined by the Internal Revenue Service, we may be able to rectify a resulting failure to meet the
distribution requirement for a year by paying “deficiency dividends” to stockholders in a later year, which may be included in our deduction for distributions paid for the earlier
year. Thus, we may be able to avoid being disqualified as a REIT and/or taxed on amounts distributed as deficiency dividends; however, we will be required to pay applicable
penalties and interest based upon the amount of any deduction taken for deficiency dividend distributions.
Failure to Qualify as a REIT
If we fail to qualify for taxation as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates. Distributions to
stockholders in any year in which we fail to qualify as a REIT will not be deductible nor will any particular amount of distributions be required to be made in any year. All
distributions to stockholders will be taxable as dividends to the extent of current and accumulated earnings and profits allocable to these distributions and, subject to certain
limitations, will be eligible for the dividends received deduction for corporate stockholders. Unless entitled to relief under specific statutory provisions, we also will be
disqualified from taxation as a REIT for the four taxable years following the year during which qualification was lost. It is not possible to state whether in all circumstances we
would be entitled to statutory relief. Failure to qualify for even one year could result in our need to incur indebtedness or liquidate investments in order to pay potentially
significant resulting tax liabilities.
In addition to the relief described above under “Income Tests” and “Asset Tests,” relief is available in the event that we violate a provision of the Internal Revenue Code that
would result in our failure to qualify as a REIT if: (1) the violation is due to reasonable cause and not due to willful neglect; (2) we pay a penalty of $50,000 for each failure to
satisfy the provision; and (3) the violation does not include a violation described under “Income Tests” or “Asset Tests” above. It is not now possible to determine the
circumstances under which we may be entitled to the benefit of these relief provisions.
U.S. Federal Income Taxation of Holders of Our Stock
Treatment of Taxable U.S. Stockholders The following summary applies to you only if you are a “U.S. stockholder.” A “U.S. stockholder” is a holder of shares of stock who,
for U.S. federal income tax purposes, is:
• a citizen or resident of the United States;
• an entity classified as a corporation or partnership, created or organized in or under the laws of the United States or of any political subdivision of the United States,
including any state;
• 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
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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 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
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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.
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
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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
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
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equal to the issue price of the notes. The issue price of the notes is the first price at which a substantial amount of the notes is sold other than to bond houses, brokers or similar
persons or organizations acting in the capacity of underwriters, placement agents or wholesalers. In addition, this summary does not consider any foreign, state, local or other
tax laws that may be applicable to us or a purchaser of the notes.
U.S. Holders
The following summary applies to you only if you are a U.S. holder, as defined below.
Definition of a U.S. Holder A “U.S. holder” is a beneficial owner of a note or notes that is for U.S. federal income tax purposes:
• a citizen or resident of the United States;
• a corporation, partnership or other entity classified as a corporation or partnership for these purposes, created or organized in or under the laws of the United States or of
any political subdivision of the United States, including any state;
• an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
• a trust, if, in general, a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons, within the meaning of the Internal
Revenue Code, has the authority to control all of the trust’s substantial decisions.
Payments of Interest Stated interest on the notes generally will be taxed as ordinary interest income from domestic sources at the time it is paid or accrues in accordance with
your method of accounting for tax purposes.
Sale, Exchange or Other Disposition of Notes The adjusted tax basis in your note will generally be your cost. You generally will recognize taxable gain or loss when you sell
or otherwise dispose of your notes equal to the difference, if any, between:
• the amount realized on the sale or other disposition, less any amount attributable to any accrued interest, which will be taxable in the manner described under “Payments
of Interest” above; and
• your adjusted tax basis in the notes.
Your gain or loss generally will be capital gain or loss. This capital gain or loss will be long-term capital gain or loss if at the time of the sale or other disposition you have
held the notes for more than one year. Subject to limited exceptions, your capital losses cannot be used to offset your ordinary income (except in the case of individuals, who
may offset up to $3,000 of ordinary income each year).
Backup Withholding and Information Reporting In general, “backup withholding” may apply to any payments made to you of principal and interest on your note, and to the
payment of the proceeds of a sale or other disposition of your note before maturity, if you are a non-corporate U.S. holder and: (1) fail to provide a correct taxpayer
identification number, which if you are an individual, is ordinarily your social security number; (2) furnish an incorrect taxpayer identification number; (3) are notified by the
Internal Revenue Service that you have failed to properly report payments of interest or dividends; or (4) fail to certify, under penalties of perjury, that you have furnished a
correct taxpayer identification number and that the Internal Revenue Service has not notified you that you are subject to backup withholding.
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:
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• 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.
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.
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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
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
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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;
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;
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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 and tenants 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;
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 to satisfy obligations under their agreements with us;
ownership of property outside the U.S.;
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;
our reliance on data and technology systems and the increasing risks of cybersecurity incidents; and
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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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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
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, including the impact of new variants; the continued
deployment of vaccines and boosters; the effectiveness of vaccines and boosters over time and against new variants; 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 77.7% at December 31, 2021. Although the ongoing impact of the pandemic,
including new variants, and vaccine and booster deployment on occupancy remain uncertain, occupancy of our Seniors Housing Operating and Triple-net properties
could further decrease, including as a result of new variants or decreases in vaccine effectiveness over time. 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,
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although we collected virtually all rent due in the fourth quarter of 2021, 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 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 prolonged 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 Our ability to terminate our lease with a tenant or management agreement with an
operator or manager, and relet the property to another tenant or transition to a new operator or manager 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, operator or manager
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 an 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. Additionally, COVID-19 claims have been excluded from insurance policies
resulting in uninsured claims, and there has been an increase of COVID-19 class action lawsuits filed that may result in unfavorable verdicts. 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 and tenants have incurred increased operational costs as a result of the introduction of
public health measures and other regulations affecting our properties and operations, as well as additional health and safety measures adopted by us and our operators
and tenants related to the COVID-19 pandemic, including increases in labor and property cleaning expenses and expenditures related to efforts to procure PPE and
supplies. 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. In addition, operators and tenants are subject to risks arising from the unique pressures on seniors housing and medical practice employees during the
COVID-19 pandemic including labor shortages resulting from macroeconomic trends. 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 employees and residents and to provide operator and tenant
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 and tenants. 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, many of our employees are currently working remote or hybrid schedules. 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 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 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.
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.
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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.
During the years ended December 31, 2021 and 2020, we received government grants under the CARES Act primarily to cover increased expenses and lost revenue during
the COVID-19 pandemic as well as under similar programs in the U.K. and Canada. For the years ended December 31, 2021 and 2020 we recognized $102,575,000 and
$34,941,000, respectively, of government grant income. We have completed applications for grant income under Phase 4 of the Provider Relief Fund and expect to receive
additional funding during 2022. However, there can be no assurances 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 have experienced delays and disruptions to property redevelopment as a result of supply chain issues and construction material
and labor shortages and may experience additional or more significant such delays in the future. 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 and may lead to impairment of such assets.
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.
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Our investments in joint ventures could be adversely affected by our lack of exclusive control over these investments, our partners’ insolvency or failure to meet their
obligations, and disputes between us and our partners
We have entered into, and may continue in the future to enter into, partnerships or joint ventures with other persons or entities. Joint venture investments involve risks that
may not be present with other methods of ownership, including the possibility that our partner might become insolvent, refuse to make capital contributions when due or
otherwise fail to meet its obligations, which may result in certain liabilities to us for guarantees and other commitments; that our partner might at any time have economic or
other business interests or goals that are or become inconsistent with our interests or goals; that we could become engaged in a dispute with our partner, which could require us
to expend additional resources to resolve such dispute and could have an adverse impact on the operations and profitability of the joint venture; that our partner may be in a
position to take action or withhold consent contrary to our instructions or requests; and that our joint venture partners may be structured differently than us for tax purposes,
which could create conflicts of interest and risks to our REIT status. In some instances, we and/or our partner may have the right to trigger a buy-sell, put right or forced sale
arrangement, which could cause us to sell our interest, acquire our partner’s interest or sell the underlying asset at a time when we otherwise would not have initiated such a
transaction. Our ability to acquire our partner’s interest may be limited if we do not have sufficient cash, available borrowing capacity or other capital resources. In such event,
we may be forced to sell our interest in the joint venture when we would otherwise prefer to retain it. On the other hand, our ability to transfer our interest in a joint venture to a
third party may be restricted and the market for our interest may be limited and/or valued lower than fair market value. Joint ventures may require us to share decision-making
authority with our partners, which could limit our ability to control the properties in the joint ventures. Even when we have a controlling interest, certain major decisions may
require partner approval, such as the sale, acquisition or financing of a property.
We 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 and could eventually lead to impairment of our properties.
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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’ or tenants' revenues or increases in our operators’ or tenants' expenses, including as a result of increased labor costs, could affect their ability
to make payments to us
We have very limited control over the success or failure of our operators' or tenants' businesses and, at any time, an operator or tenant may experience a downturn in their
business that weakens their financial condition. Our operators’ and tenants' revenues are primarily driven by occupancy, private pay rates, and Medicare and Medicaid
reimbursement, if applicable. Expenses are primarily driven by the costs of labor, supplies, 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
and tenants. In particular, our operators' and tenants' businesses are vulnerable to increases in labor costs resulting from shortages of medical and non-medical staff. A number
of factors may adversely affect the labor force available to our operators and tenants or labor costs, including increased industry competition, high employment levels, federal
unemployment subsidies, including unemployment benefits offered in response to the COVID-19 pandemic, increased wages offered by other employers, including in other
economic sectors, vaccine mandates and other government regulations. During the COVID-19 pandemic, in many geographic areas the lack of availability of specialized
medical personnel, experienced senior care professionals and other workers has been a significant operating issue affecting a wide range of healthcare providers and senior care
and housing facilities. Such shortages have and may continue to impact the operations of our operators and tenants, resulting in increased labor and operating costs. Continued
labor shortages or cost inflation may impact our operators' and tenants' abilities to comply with minimum staffing requirements under applicable federal and state regulations.
Failure to comply with these requirements can, among other things, jeopardize a facility's compliance with the conditions of participation under relevant state and federal
healthcare programs. In addition, if a facility is determined to be out of compliance with these requirements, it may be subject to fines and other regulatory penalties, including
the suspension of patient admissions, the termination of Medicaid participation or the suspension or revocation of licenses.
To the extent that any decrease in revenues and/or any increase in operating expenses result in an operator or tenant not generating enough cash to make payments to us, the
credit of our operator or tenant 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 or tenant under a master lease, as a 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. In addition, in light of labor shortages for medical and non-medical workers in many geographic areas, our operators and
tenants increasingly compete to attract qualified and experienced employees. Our operators and managers are expected to encounter increased competition in the future that
could limit their ability to attract residents and employees 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.
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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 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, 2021, Sunrise managed 110 of our Seniors Housing Operating properties. These properties account for a significant portion of our revenues and net
operating income. 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
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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.
We depend on ProMedica Health System ("ProMedica") 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
As of December 31, 2021, we lease 205 properties to ProMedica under triple-net leases, which account for a significant portion of our revenues. We depend on ProMedica to
pay all insurance, taxes, utilities and maintenance and repair expenses in connection with the leased properties. We cannot assure you that ProMedica 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 to do so could have an adverse effect on our business, results of operations and financial condition. ProMedica 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 will have sufficient assets, income, access to financing and insurance coverage to enable them to satisfy their respective indemnification obligations. ProMedica'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.
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 11.7% and 8.9% of total Welltower revenues, respectively. As of December 31, 2021, Revera managed 85 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 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, 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. Additionally, the COVID-19 pandemic may subject our international business and that of our operators and tenants to different or greater risks than those
faced in the U.S. These factors may include the duration and severity of the outbreak in a particular country due to the impact of new variants, the distribution of vaccines and
boosters, or public health measures or other actions taken by governments, businesses and individuals in response to the pandemic.
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.
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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 managers 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 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. Finally, our use, and the usage by some of our tenants, operators and managers of self-insurance and/or
use of a wholly owned captive insurance company, if not adequately funded, could have a material adverse effect on our liquidity and that of our tenants, operators and
managers.
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, change-of-ownership rules,
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 2022,
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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.
While there have been multiple attempts to repeal or amend the Health Reform Laws through legislative action and legal challenges, legislative attempts to completely repeal
the Health Reform Laws have been unsuccessful to date, and on June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the Health Reform Laws
brought by several states without specifically ruling on the constitutionality of the Health Reform Laws. Nevertheless, the status of the Health Reform Laws may be subject to
change and other health reform measures could be implemented as a result of political, legislative, regulatory, and administrative developments and judicial proceedings.
Further impact that the Biden Administration or U.S. Congress may have on health reform (including through new legislative, executive order, or regulatory efforts) remains
uncertain, 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. 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 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, material restrictions on or 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 these laws,
regulations and standards, 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
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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. Employment related class action lawsuits have increased in recent years, including but not limited to class action lawsuits brought against our
operators in certain states regarding employee and government requirements regarding wage and hour claims and fair housing complaints, as well as class action lawsuits
related to COVID-19. 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
We invest in various development and redevelopment projects. 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 construction costs, lease up velocity, 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.
Our development/redevelopment and construction projects are vulnerable to the impact of material shortages and inflation. For example, shortages and fluctuations in the
price of lumber or in other important raw materials could result in delays in the start or completion of, or increase the cost of, developing one or more of our projects. Pricing
for labor and raw materials can be affected by various national, regional, local, economic and political factors, including changes to immigration laws that impact the
availability of labor or tariffs on imported construction materials.
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, or satisfactory tax rates, incentives or abatements. 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 have experienced such delays in obtaining necessary licensing for constructed properties and may experience additional or more significant delays
in the future.
We rely on our development managers, general contractors and subcontractors to oversee and manage day-to-day construction activities. If any such party underperforms, we
may need to exercise contractual remedies against such party, which may include termination of the applicable underlying service contract. In the event such termination occurs
mid-construction, we would likely need to engage a new service provider, which would likely result in additional costs and delays as the transition between providers occurs.
The above-described 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 construction costs, adverse changes in expected rents or expenses, adverse environmental and/or geotechnical
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,
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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.
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
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 and legal liability
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 business
partners' 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 business partners' information technology systems to more sophisticated security threats and may be specifically targeted to our business or
more general industry wide risks. Our information technology networks, and those of our business partners 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
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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 respond, mitigate the risks from and recover from an attack without operational impact, and thus it is impossible for us to entirely mitigate this risk.
We regularly defend against, respond to and mitigate risks from 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. Cybersecurity incidents could disrupt our or our critical business partners’ 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.
Evolving privacy regulations could expose our business to reputational harm and losses
Regulatory authorities around the world have implemented or are considering implementing a number of legislative changes or regulations concerning data protection, which
have required or may require us to incur additional expenses and may expose us to additional risks. We are subject to numerous laws and regulations governing the protection
of personal and confidential information of our clients or employees, including U.S. federal and state laws (including. but not limited to the State of California), and non- U.S.
laws, such as the General Data Protection Regulation and the EU General Data Protection Regulation, which impose a number of obligations on us. These obligations vary
from state to state and country to country, but generally have accountability and transparency including consent, detailed information and data removal and security
requirements. Some jurisdictions impose the same requirements and restrictions on transfers of data from their jurisdictions to jurisdictions that they do not consider adequate.
This may have implications for our cross-border data flows and may result in additional compliance costs.
Many jurisdictions assess fines, the magnitude of which may depend on the annual global revenue of the noncompliant company, the nature, gravity and duration of, and the
violation. Additionally, in some jurisdictions, data subjects may have a right to compensation for financial or non-financial losses. Complying with these laws may cause us to
incur substantial operational and compliance costs or require us to change our business practices. Despite efforts to bring our practices into compliance with these laws, we may
not be successful either due to internal or external factors such as resource allocation limitations or a lack of cooperation among our business partners. Non-compliance could
result in proceedings against us by governmental entities, regulators, our business partners, residents of our communities, data subjects, suppliers, vendors or other parties.
Further, there is a risk that compliance measures we undertake will not be implemented correctly or that individuals within our business or that of our business partners will not
be fully compliant with the new procedures. If there are breaches of these measures, we could face significant administrative and monetary sanctions, as well as reputational
damage, which may have a material adverse effect on our operations, financial condition and prospects.
Our success and the success of our operators and managers depends on key personnel whose continued service is not guaranteed
Our success and the success of our operators and managers depends on the continued availability and service of key personnel, including 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 and that of our operators and managers', 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
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our future capital requirements and operating performance, restrictive covenants in our financial and other contractual arrangements, maintenance of our REIT qualification,
restrictions under Delaware law and other factors as our Board of Directors may deem relevant from time to time. Additionally, our ability to make distributions will be
adversely affected if any of the risks described herein, or other significant adverse events, occur.
We are subject to covenants in our debt agreements that could have a material adverse effect on our business, results of operations and financial condition
Our debt agreements contain various covenants, restrictions and events of default. Among other things, these provisions require us to maintain certain financial ratios and
minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. Breaches of these covenants could result
in defaults under the instruments governing the applicable indebtedness, in addition to any other indebtedness cross-defaulted against such instruments. These defaults could
have a material adverse effect on our business, results of operations and financial condition.
Limitations on our ability to access capital could have an adverse effect on our ability to make future investments or to meet our obligations and commitments
We cannot assure you that we will be able to raise the capital necessary to make future investments or to meet our obligations and commitments as they mature. Our access to
capital depends upon a number of factors over which we have little or no control, including rising interest rates, inflation and other general market conditions; the market’s
perception of our growth potential and our current and potential future earnings and cash distributions; the market price of the shares of our common stock and the credit ratings
of our debt securities; changes in the credit ratings on U.S. government debt securities; uncertainty from the expected discontinuance of LIBOR and the transition to any other
interest rate benchmark; and default or delay in payment by the U.S. of its obligations. We also rely on the financial institutions that are parties to our revolving credit facilities.
If these institutions become capital constrained, tighten their lending standards or become insolvent or if they experience excessive volumes of borrowing requests from other
borrowers within a short period of time, they may be unable or unwilling to honor their funding commitments to us, which would adversely affect our ability to draw on our
revolving credit facilities and, over time, could negatively impact our ability to consummate acquisitions, repay indebtedness as it matures, fund capital expenditures or make
distributions to our stockholders. If our access to capital is limited by these factors or other factors, it could negatively impact our ability to acquire properties, repay or
refinance our indebtedness, fund operations or make distributions to our stockholders.
Changes affecting the availability of the London Interbank Offered Rate (“LIBOR”) may have consequences for us that cannot yet reasonably be predicted
We have outstanding debt, hedge agreements and receivable transactions with variable interest rates based on LIBOR. The LIBOR benchmark has been subject of national,
international, and other regulatory guidance and proposals for reform. In March 2021, ICE Benchmark Administration, the administrator of LIBOR, confirmed that it would
cease 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. As a
result, the United States Federal Reserve has advised banks to stop new USD LIBOR issuances by the end of 2021. 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 ("SOFR") as the recommended alternative rate for LIBOR.
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 SOFR or
other 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.
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Risks Arising from Our Status as a REIT
We might fail to qualify or remain qualified as a REIT
We intend to operate as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and believe we have operated and will continue to operate in such a
manner. If we lose our status as a REIT, we will face serious income tax consequences that will substantially reduce the funds available for satisfying our obligations and for
distribution to our stockholders because:
• we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular
corporate rates;
• 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
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arm's-length terms and intend to continue to operate in a manner that allows us to avoid incurring the 100% excise tax described above, but there can be no assurance that we
will be able to avoid application of that tax.
The lease of qualified health care properties to a taxable REIT subsidiary is subject to special requirements
We lease certain qualified health care properties to taxable REIT subsidiaries (or limited liability companies of which the taxable REIT subsidiaries are members), which
lessees contract with managers (or related parties) to manage the health care operations at these properties. The rents from this taxable REIT subsidiary lessee structure are
treated as qualifying rents from real property if (1) they are paid pursuant to an arm's-length lease of a qualified health care property with a taxable REIT subsidiary and (2) the
manager qualifies as an eligible independent contractor (as defined in the Code). If any of these conditions are not satisfied, then the rents will not be qualifying rents.
If certain sale-leaseback transactions are not characterized by the Internal Revenue Service (“IRS”) as “true leases,” we may be subject to adverse tax consequences
We have purchased certain properties and leased them back to the sellers of such properties, and we may enter into similar transactions in the future. We intend for any such
sale-leaseback transaction to be structured in such a manner that the lease will be characterized as a “true lease,” thereby allowing us to be treated as the owner of the property
for U.S. federal income tax purposes. However, depending on the terms of any specific transaction, the IRS might take the position that the transaction is not a “true lease” but
is more properly treated in some other manner. In the event any sale-leaseback transaction is challenged and successfully re-characterized by the IRS, we would not be entitled
to claim the deductions for depreciation and cost recovery generally available to an owner of property. Furthermore, if a sale-leaseback transaction were so re-characterized, we
might fail to satisfy the REIT asset tests or income tests and, consequently, could lose our REIT status effective with the year of re-characterization. Alternatively, the amount
of our REIT taxable income could be recalculated, which may cause us to fail to meet the REIT annual distribution requirements for a taxable year.
We could be subject to changes in our tax rates, the adoption of new U.S. or international tax legislation, or exposure to additional tax liabilities
We are subject to taxes in the U.S. and foreign jurisdictions. 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.
40
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 and the United Kingdom
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, 2021 (dollars in thousands):
Property Location
Alabama
Arkansas
Arizona
California
Colorado
Connecticut
District Of Columbia
Delaware
Florida
Georgia
Hawaii
Iowa
Idaho
Illinois
Indiana
Kansas
Kentucky
Louisiana
Massachusetts
Maryland
Maine
Michigan
Minnesota
Missouri
Mississippi
Montana
North Carolina
North Dakota
Nebraska
New Hampshire
New Jersey
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
3 $
1
10
93
15
3
2
8
13
16
1
7
3
35
8
3
4
5
16
10
1
13
3
6
2
2
10
1
5
—
28
7
33
29
5
14
18
5
7
70
4
9
30
2
—
34,937 $
38,630
214,624
3,129,715
456,837
68,634
87,481
240,407
713,529
268,543
2,568
90,641
64,462
583,215
223,553
66,494
58,703
70,555
386,988
438,074
23,154
354,570
78,936
126,388
16,778
25,831
283,634
13,721
39,674
—
702,293
128,179
676,220
419,811
98,030
164,576
275,220
94,471
115,744
1,350,583
74,617
376,764
661,076
18,953
—
8,795
10,296
47,406
730,284
98,388
16,543
12,799
38,371
116,379
60,190
18,090
26,804
6,187
142,670
31,609
14,325
18,713
19,726
76,800
76,124
11,489
66,542
12,888
18,897
8,834
8,148
52,225
1,336
13,795
—
192,833
29,585
147,063
76,084
26,279
40,374
72,017
24,313
31,729
289,097
23,932
108,414
146,938
4,985
—
3 $
—
—
24
12
4
—
4
53
3
—
7
—
24
27
27
7
3
10
21
—
25
12
—
1
—
51
—
—
3
29
—
4
40
20
1
59
7
7
26
1
29
7
5
1
33,898 $
—
—
460,884
294,463
75,789
—
104,491
623,783
38,796
—
55,196
—
353,815
411,883
234,044
68,269
82,193
189,021
265,773
—
245,965
229,964
—
10,085
—
415,157
—
—
33,395
597,879
—
63,822
407,072
208,168
2,550
645,435
33,320
98,620
410,668
22,372
383,314
89,181
88,064
6,293
4,233
—
—
69,799
24,997
32,480
—
12,829
89,573
4,614
—
6,156
—
28,432
47,524
43,949
8,872
3,690
7,384
23,042
—
28,273
23,326
—
—
—
57,404
—
—
2,936
64,403
—
10,246
48,538
41,909
864
87,385
4,263
8,380
61,531
2,106
46,121
11,517
10,906
1,005
2 $
1
7
38
1
7
—
—
25
12
—
—
2
7
—
—
—
—
7
11
—
13
7
12
1
—
24
—
1
—
13
8
15
5
2
1
4
2
3
56
—
6
8
5
—
560
97
64
161
13,357,813
2,978,296
2,047,065
2,084,141
4,131,206
405,295
407,824
813,119
557
6
61
67
7,283,622
140,606
1,543,664
1,684,270
918,687
10,840
178,100
188,940
306
—
—
—
33,359 $
22,520
79,905
906,083
10,185
102,045
—
—
234,127
215,537
—
—
50,510
110,944
—
—
—
—
104,531
238,210
—
194,793
145,120
189,326
34,947
—
567,936
—
11,240
—
328,853
127,634
418,384
84,941
13,779
43,191
72,343
9,930
66,216
1,028,184
—
110,626
186,665
88,135
—
5,830,199
—
—
—
2,792
2,920
9,887
91,507
2,175
7,430
—
—
43,779
27,067
—
—
4,368
14,957
—
—
—
—
9,383
24,710
—
10,067
31,083
27,418
2,382
—
47,387
—
2,728
—
46,868
9,542
28,926
11,236
2,449
2,720
6,946
1,522
6,670
104,534
—
13,517
27,367
9,508
—
633,845
—
—
—
721 $
17,489,019 $
3,791,415
624 $
8,967,892 $
1,107,627
306 $
5,830,199 $
633,845
(1)
Represents revenue for the month ended December 31, 2021 annualized.
41
The following table sets forth occupancy and average annualized revenues for certain property types (excluding investments in unconsolidated entities):
Seniors Housing Operating
Triple-net
Outpatient Medical
(4)
(5)
(3)
Occupancy
(1)
2021
76.4%
73.0%
95.4%
2020
75.9%
72.8%
95.4%
Average Annualized Revenues
2020
2021
(2)
$
$
48,300
19,675
37
48,749
17,604
36
per unit
per bed/unit
per sq. ft.
(1)
(2)
(3)
(4)
(5)
We use unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy for properties other than Outpatient Medical buildings and have not independently verified the information.
Represents December annualized revenues divided by total beds, units or square feet in service, as presented in the tables above.
Occupancy represents average occupancy of properties in service 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 or meaningful.
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, 2021 (dollars in thousands):
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Thereafter
Expiration Year
(1)
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
$
$
$
$
57
6,751
1.1 %
6,071
10.1 %
1,793,229
52,877
11.4 %
404
17.4 %
$
$
3
2,482
0.4 %
304
0.5 %
1,720,158
48,606
10.5 %
369
15.9 %
$
$
4
12,110
2.0 %
692
1.1 %
2,080,831
63,809
13.8 %
354
15.3 %
$
$
28
6,147
1.0 %
1,759
2.9 %
1,031,346
29,253
6.3 %
218
9.4 %
$
$
64
67,063
10.9 %
4,878
8.1 %
1,389,353
37,775
8.1 %
255
11.0 %
$
$
18
33,567
5.5 %
2,350
3.9 %
1,153,609
30,380
6.5 %
175
7.6 %
$
$
14
15,549
2.5 %
1,474
2.4 %
921,218
24,719
5.3 %
126
5.4 %
$
$
14
32,248
5.2 %
1,214
2.0 %
751,892
21,395
4.6 %
83
3.6 %
$
$
23
43,027
7.0 %
2,439
4.1 %
1,486,918
38,494
8.3 %
102
4.4 %
$
$
16
18,808
3.1 %
2,008
3.3 %
1,396,014
37,905
8.2 %
80
3.5 %
367
377,212
61.3 %
36,991
61.6 %
3,475,995
78,835
17.0 %
151
6.5 %
(1)
(2)
Excludes investments in unconsolidated entities, developments, land parcels, loans receivable and sub-leases. Investments classified as held for sale are included in 2022.
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.
42
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 3,147 stockholders of record as of February 4, 2022.
Stockholder Return Performance Presentation
PART II
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, 2021, 151 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. 2016 equals $100 and dividends are assumed to be reinvested.
S & P 500
Welltower Inc.
FTSE NAREIT Equity
12/31/2016
12/31/2017
12/31/2018
12/31/2019
12/31/2020
$
100.00 $
100.00
100.00
121.83 $
100.20
105.23
116.49 $
115.53
100.36
153.17 $
142.14
126.45
181.35 $
117.29
116.34
12/31/2021
233.41
160.66
166.64
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.
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, 2021.
43
Period
October 1, 2021 through October 31, 2021
November 1, 2021 through November 30, 2021
December 1, 2021 through December 31, 2021
Totals
Item 6. [Reserved]
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
—
—
—
—
$
$
$
$
—
—
—
—
—
—
—
—
$
$
—
—
—
992,348,000
The selected financial data previously required by Item 301 of Regulation S-K has been omitted in reliance on SEC Release No. 33-10890.
44
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 and Estimates
LIQUIDITY AND CAPITAL RESOURCES
RESULTS OF OPERATIONS
OTHER
45
46
47
48
48
50
50
51
51
52
53
54
57
59
61
61
67
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, 2021 (dollars in thousands):
Type of Property
Seniors Housing Operating
Triple-net
Outpatient Medical
Totals
$
$
NOI
(1)
683,906
841,122
448,350
1,973,378
Percentage of
NOI
Number of
Properties
34.7 %
42.6 %
22.7 %
100.0 %
721
624
306
1,651
Represents consolidated net operating income ("NOI") and excludes our share of investments in unconsolidated entities. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint
(1)
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 of vaccines, the actions taken to contain the pandemic or
mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, the overall pace of recovery, among others.
Our Seniors Housing Operating revenues are dependent on occupancy. Spot occupancy has steadily increased in recent months, with 94% of communities open for new
admissions and nearly all communities allowing visitors, in-person tours and communal dining and activities as of December 31, 2021. Rapid distribution and a high
acceptance rate of COVID-19 vaccinations by residents within assisted living and memory care facilities in the U.S. and U.K. have resulted in a significant decrease in total
resident case counts across the portfolio from peak levels in mid-January 2021, however, resident case counts have increased in December 2021 as a result of highly
transmissible variants.
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 trends related to occupancy 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 and Provider Relief Fund.
During the year ended December 31, 2021, we collected approximately 94% of rent due from operators under Triple-net lease agreements (primarily seniors housing and
post-acute care facilities). No significant rent deferrals or rent concessions have been made during the year ended December 31, 2021. We evaluate leases individually and
recognize rent on a cash basis if collectibility of substantially all contractual rent payments is not probable. To the extent 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.
During the early stages of the pandemic in 2020, our Outpatient Medical tenants 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. In some instances, these factors caused tenants to seek
modifications of contractual
46
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
rent obligations. We evaluated each request on a case-by-case basis to determine if a form of rent relief was warranted following an examination of the tenant's financial health,
rent coverage, current operating situation and other factors. Virtually all deferred rent related to 2020 deferrals has been paid. During the year ended December 31, 2021, we
have continued to collect virtually all rent due from tenants in our Outpatient Medical portfolio, with uncollected amounts primarily attributable to local jurisdictions with
COVID-19 related ordinances providing temporary rent relief to tenants.
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, 2021, resident fees and services and rental income represented 67% and 29%, respectively, of total revenues. Substantially all of our
operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease
period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental
payments due for the period. Our yield on loans receivable depends upon a number of factors, including the stated interest rate, the average principal amount outstanding during
the term of the loan and any interest rate adjustments.
Our primary sources of cash include resident fees and services, rent and interest receipts, borrowings under our unsecured revolving credit facility and commercial paper
program, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include
dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances
and transaction costs), loan advances, property operating expenses, 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. At December
31, 2021, we had $269,265,000 of cash and cash equivalents, $77,490,000 of restricted cash and $3,675,000,000 of available borrowing capacity under our unsecured revolving
credit facility.
47
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Key Transactions
Capital The following summarizes key capital transactions that occurred during the year ended December 31, 2021:
•
•
•
•
•
•
In March 2021, we completed the issuance of $750,000,000 senior unsecured notes bearing interest at 2.80% with a maturity date of June 2031.
In April 2021, we repaid our $339,128,000 of our 3.75% senior unsecured notes due March 2023, $334,624,000 of our 3.95% senior unsecured notes due September
2023, and $15,000,000 of our term loan due April 2022.
In June 2021, we closed on a new $4,700,000,000 unsecured credit facility with improved pricing across our line of credit and terminated the existing unsecured credit
facility. The credit facility includes $4,000,000,000 of revolving credit capacity at a borrowing rate of 77.5 basis points ("bps") over LIBOR, $500,000,000 of USD
term loan capacity at a borrowing rate of 90.0 bps over LIBOR and $250,000,000 CAD term loan capacity at 90.0 bps over CDOR.
In June 2021, we repaid the remaining $845,000,000 of our term loan due April 2022.
In June 2021, we completed the issuance of $500,000,000 senior unsecured notes bearing interest at 2.05% with a maturity date of January 2029.
In July 2021, we entered into an amended and restated ATM Program (as defined below) pursuant to which we may offer and sell up to $2,500,000,000 of common
stock from time to time. During 2021, we sold 34,854,598 shares of common stock under our current and previous ATM Programs via forward sale agreements which
are expected to generate gross proceeds of approximately $2,820,855,000, of which 29,667,348 shares have been settled resulting in $2,385,683,000 of gross proceeds
during the year ended December 31, 2021.
•
In November 2021, we completed the issuance of $500,000,000 senior unsecured notes bearing interest at 2.75% with a maturity date of January 2032.
• We extinguished $132,031,000 of secured debt at a blended average interest rate of 5.86% throughout 2021.
Investments The following summarizes property acquisitions and joint venture investments completed during the year ended December 31, 2021 (dollars in thousands):
Seniors Housing Operating
Triple-net
Outpatient Medical
Totals
Properties
Book Amount
(1)
151
35
19
205
$
$
3,138,988
898,167
403,458
4,440,613
(2)
Capitalization Rates
5.1%
6.1%
5.5%
5.2%
(1)
(2)
Represents amounts recorded in net real estate investments including fair value adjustments pursuant to U.S. GAAP. See Note 3 to our consolidated financial statements for additional information.
Represents annualized contractual or projected NOI to be received in cash divided by investment amounts.
Dispositions The following summarizes property dispositions completed during the year ended December 31, 2021 (dollars in thousands):
Seniors Housing Operating
Triple-net
Outpatient Medical
Totals
Properties
Proceeds
(1)
Book Amount
(2)
12
51
11
74
$
$
118,590
625,478
326,254
1,070,322
$
$
112,837
486,369
229,660
828,866
(3)
Capitalization Rates
4.8%
7.2%
5.3%
6.4%
(1)
(2)
(3)
Represents pro rata proceeds received upon disposition including any seller financing.
Represents carrying value of net real estate assets at time of disposition. See Note 5 to our consolidated financial statements for additional information.
Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.
Dividends Our Board of Directors declared a cash dividend for the quarter ended December 31, 2021 of $0.61 per share. On March 8, 2022, we will pay our 203
rd
consecutive quarterly dividend payment to stockholders of record on March 1, 2022.
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.
48
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Operating Performance We believe that net income and net income attributable to common stockholders (“NICS”) per the Consolidated Statements 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
2021
$
Year Ended December 31,
2020
2019
$
374,479
336,138
1,220,722
1,967,553
$
1,038,852
978,844
1,102,562
2,008,144
1,330,410
1,232,432
1,577,080
2,431,264
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 restricted cash. The coverage ratios indicate our ability to service interest and fixed charges (interest and secured debt principal
amortization). 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
2021
42.2%
34.9%
25.9%
3.89x
3.43x
Year Ended December 31,
2020
40.8%
33.8%
29.6%
3.97x
3.54x
2019
46.3%
39.2%
29.5%
4.14x
3.78x
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:
Property mix:
Seniors Housing Operating
Triple-net
Outpatient Medical
Relationship mix:
(2)
(2)
ProMedica
Sunrise Senior Living
Revera
Avery Healthcare
HC-One Group
Remaining
Geographic mix:
California
United Kingdom
Texas
Canada
New Jersey
Remaining
2021
35%
43%
22%
12%
10%
5%
4%
3%
66%
13%
13%
8%
6%
6%
54%
December 31,
2020
(1)
38%
37%
25%
11%
13%
5%
4%
—%
67%
14%
10%
9%
6%
5%
56%
2019
43%
38%
19%
9%
14%
6%
3%
—%
68%
13%
8%
8%
7%
7%
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.
49
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(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):
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,
2021
December 31,
2020
$
%
Year Ended
December 31,
2019
One Year Change
Two Year Change
$
%
$
%
$
2,021,043
$
385,766
$
1,635,277
424 % $
316,129
$
69,637
22 % $
1,704,914
539 %
1,275,325
(4,516,268)
1,567,664
(1,009)
1,364,756
2,347,928
(2,080,858)
3,451
(89,431)
(6,864,196)
3,648,522
(4,460)
-7 %
n/a
n/a
n/a
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 %
(260,643)
(2,467,477)
990,514
(6,319)
$
346,755
$
2,021,043
$
(1,674,288)
-83 % $
385,766
$
1,635,277
424 % $
(39,011)
-17 %
120 %
172 %
n/a
-10 %
Operating Activities The changes in net cash provided from operating activities are primarily attributable to declines in revenue as a result of decreased occupancy at our
Seniors Housing Operating properties, straight-line receivable reserves related to Triple-net leases during the year ended December 31, 2021 and dispositions. Please see
“Results of Operations” for discussion of net income fluctuations. For the years ended December 31, 2021, 2020 and 2019, cash flows from operations exceeded cash
distributions to stockholders.
Investing Activities The changes in net cash provided from/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):
50
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
New development
Recurring capital expenditures, tenant
improvements and lease commissions
Renovations, redevelopments and other
capital improvements
Total
$
$
Year Ended
One Year Change
December 31,
2021
December 31,
2020
417,963
$
201,336
$
$
216,627
%
108 % $
Year Ended
December 31,
2019
323,488
$
One Year Change
Two Year Change
$
(122,152)
%
-38 % $
$
94,475
%
29 %
99,994
83,146
16,848
20 %
136,535
(53,389)
-39 %
(36,541)
-27 %
182,594
700,551
$
161,843
446,325
$
20,751
254,226
13 %
57 % $
192,289
652,312
$
(30,446)
(205,987)
-16 %
-32 % $
(9,695)
48,239
-5 %
7 %
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.
In March 2021, we completed the issuance of $750,000,000 senior unsecured notes with a maturity date of June 2031. In June 2021, we completed the issuance of
$500,000,000 senior unsecured notes with a maturity date of January 2029. Net proceeds from these debt issuances were used to redeem the remaining $339,128,000 of our
3.75% senior unsecured notes due 2023, $334,624,000 of our 3.95% senior unsecured notes due 2023, and $860,000,000 remaining on our term loan due April 2022. In June
2021, we closed on a new $4,700,000,000 unsecured credit facility. The credit facility includes $4,000,000,000 of revolving credit capacity. In November 2021, we completed
the issuance of $500,000,000 senior unsecured notes with a maturity date of January 2032. As of December 31, 2021, we have total near-term available liquidity of
approximately $4.0 billion.
Off-Balance Sheet Arrangements
At December 31, 2021, 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, 2021, we had 15 outstanding letter of credit obligations. Please see Notes 8, 12 and 13 to our
consolidated financial statements for additional information.
Contractual Obligations
51
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following table summarizes our payment requirements under contractual obligations as of December 31, 2021 (in thousands):
Contractual Obligations
Unsecured credit facility and commercial paper
Senior unsecured notes and term credit facilities:
(1)
(1)
Total
2022
Payments Due by Period
2023-2024
2025-2026
Thereafter
$
325,000 $
325,000 $
— $
— $
—
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)
Consolidated
Unconsolidated
Contractual interest obligations:
(3)
Unsecured credit facility and commercial paper
(2)
(2)
Senior unsecured notes and term loans
Consolidated secured debt
Unconsolidated secured debt
Finance lease liabilities
Operating lease liabilities
Purchase obligations
(5)
(4)
(2)
(4)
Total contractual obligations
$
9,350,000
234,797
1,417,500
510,000
195,664
2,202,312
1,247,746
65
3,815,957
245,383
188,244
210,857
1,383,350
1,378,920
22,705,795 $
—
—
—
—
—
582,884
149,218
65
427,904
61,444
40,244
8,698
45,151
826,122
2,466,730 $
1,350,000
—
—
500,000
195,664
733,426
291,969
—
826,167
78,218
68,709
71,634
91,850
534,849
4,742,486 $
1,950,000
—
—
10,000
—
267,754
546,525
—
648,580
48,135
26,931
3,354
87,301
5,533
3,594,113 $
6,050,000
234,797
1,417,500
—
—
618,248
260,034
—
1,913,306
57,586
52,360
127,171
1,159,048
12,416
11,902,466
(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, 2021.
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, 2021, we were in compliance in all material respects with 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 4, 2021, we filed with the Securities and Exchange Commission (the “SEC”) (1) an open-ended automatic or “universal” shelf registration statement on Form S-3
covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units to replace our existing “universal”
shelf registration statement filed with the SEC on May 17, 2018, 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 to replace our existing DRIP registration statement on Form S-3 filed with the SEC on May 17, 2018. As of
February 4, 2022, 15,000,000 shares of common stock remained available for issuance under the DRIP registration statement. On July 30, 2021, we entered into (i) an amended
and restated equity distribution agreement (the “EDA”) with each of Robert W. Baird & Co. Incorporated, Barclays Capital Inc., BMO Capital Markets Corp., BNP Paribas
Securities Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc., BOK Financial Securities, Inc., Capital One Securities Inc., Citigroup Global Markets Inc.,
Comerica Securities, Inc., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Fifth Third Securities, Inc., Goldman Sachs & Co. LLC, Hancock Whitney
Investment Services, Inc., Jefferies LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Loop
52
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Capital Markets LLC, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., RBC Capital Markets, LLC, Regions Securities LLC, Scotia
Capital (USA) Inc., SMBC Nikko Securities America, Inc., Stifel, Nicolaus & Company, Incorporated, Synovus Securities, Inc., TD Securities (USA) LLC, Truist Securities,
Inc. and Wells Fargo Securities, LLC relating to the offer and sale from time to time of up to $2,500,000,000 aggregate amount of our common stock and (ii) separate master
forward sale confirmations with each of Bank of America, N.A., Bank of Montreal, The Bank of New York Mellon, Barclays Bank PLC, BNP Paribas, Citibank, N.A., Crédit
Agricole Corporate and Investment Bank, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, Jefferies LLC, JPMorgan Chase Bank, National Association,
KeyBanc Capital Markets Inc., Mizuho Markets Americas LLC, Morgan Stanley & Co. LLC, MUFG Securities EMEA plc, Royal Bank of Canada, The Bank of Nova Scotia,
The Toronto-Dominion Bank, Truist Bank, London Branch and Wells Fargo Bank, National Association (together with the EDA, the “ATM Program”), amending and restating
the ATM Program entered into on May 4, 2021 to, among other amendments, increase the total amount of shares of common stock that may be offered and sold under the ATM
Program from $2,000,000,000 to $2,500,000,000, which amount excludes shares the Company has previously sold pursuant to the prior program. The ATM Program also
allows us to enter into forward sale agreements. As of February 4, 2022, we had $1,876,085,000 of remaining capacity under the ATM Program, which excludes forward sales
agreements outstanding for the sale of 10,924,956 shares or approximately $930,610,000 with maturity dates in 2022. We expect to physically settle the forward sales for cash
proceeds. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under
our unsecured revolving credit facility and commercial paper program.
In connection with the filing of the new “universal” shelf registration statement, the Company also filed with the SEC two prospectus supplements that will continue
offerings that were previously covered by prospectus supplements and the accompanying prospectus to the prior registration statement relating to: (i) the registration and
possible issuance of up to 620,731 shares of the Company’s common stock (the “DownREIT Shares”), that may be issued from time to time if, and to the extent that, certain
holders of Class A units (the “DownREIT Units”) of HCN G&L DownREIT, LLC, a Delaware limited liability company (the “DownREIT”), tender such DownREIT Units for
redemption by the DownREIT, and HCN DownREIT Member, LLC, a majority-owned indirect subsidiary of the Company (including its permitted successors and assigns, the
“Managing Member”), or a designated affiliate of the Managing Member, elects to assume the redemption obligations of the DownREIT and to satisfy all or a portion of the
redemption consideration by issuing DownREIT Shares to the holders instead of or in addition to paying a cash amount; and (ii) the registration and possible issuance of up to
475,327 shares common stock (the “DownREIT II Shares”), that may be issued from time to time if, and to the extent that, certain holders of Class A units (the “DownREIT II
Units,” and collectively with the DownREIT Units, the “Units”) of HCN G&L DownREIT II LLC, a Delaware limited liability company (the “DownREIT II”), tender such
DownREIT II Units for redemption by the DownREIT II, and the Managing Member, or a designated affiliate of the Managing Member, elects to assume the redemption
obligations of the DownREIT II and to satisfy all or a portion of the redemption consideration by issuing DownREIT II Shares to the holders instead of or in addition to paying
a cash amount.
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 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year
comparisons between 2020 and 2019 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, 2020.
The following is a summary of our results of operations for the periods presented (dollars in thousands, except per share amounts):
53
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended
One Year Change
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
December 31,
2021
December 31,
2020
$
$
$
$
$
$
374,479
336,138
1,220,722
1,913,546
1,967,553
0.78
2.86
3.89x
3.43x
$
$
$
1,038,852
978,844
1,102,562
2,048,412
2,008,144
2.33
2.64
3.97x
3.54x
(1) Includes adjustment to the numerator for income (loss) attributable to OP unitholders.
One Year Change
Two Year Change
Amount
(664,373)
(642,706)
118,160
(134,866)
(40,591)
%
-64 % $
-66 %
11 %
-7 %
-2 %
Year Ended
December 31,
2019
1,330,410
1,232,432
1,577,080
2,328,202
2,431,264
(1.55)
-67 % $
0.22
-0.08x
-0.11x
8 % $
-2 %
-3 %
3.05
3.91
4.14x
3.78x
$
$
$
Amount
(291,558)
(253,588)
(474,518)
(279,790)
(423,120)
%
-22 % $
-21 %
-30 %
-12 %
-17 %
Amount
(955,931)
(896,294)
(356,358)
(414,656)
(463,711)
(0.72)
-24 % $
(1.27)
-0.17x
-0.24x
-32 % $
-4 %
-6 %
(2.27)
(1.05)
-0.25x
-0.35x
The following table represents the changes in outstanding common stock for the period from January 1, 2019 to December 31, 2021 (in thousands):
December 31, 2021
Year Ended
December 31, 2020
December 31, 2019
Totals
Beginning balance
Dividend reinvestment plan issuances
Preferred stock conversions
Option exercises
ATM Program issuances
Repurchase of common stock
Other, net
Ending balance
Weighted average number of shares outstanding:
Basic
Diluted
$
$
417,401 $
—
—
338
29,667
—
171
447,239 $
424,976
426,841
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
%
-72 %
-73 %
-23 %
-18 %
-19 %
-74 %
-27 %
-6 %
-9 %
383,675
6,063
12,712
11
44,323
(202)
657
447,239
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.
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
Three Months Ended
December 31, 2021
136,344
$
December 31, 2020
144,197
$
Change
$
%
$
(7,853)
-5.4 % $
December 31, 2021
543,755
December 31, 2020
652,823
$
$
$
(109,068)
%
-16.7 %
YTD Pool
Year Ended
Change
(1)
Relates to 489 properties for the QTD Pool and 477 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):
54
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended
One Year Change
December 31,
2021
December 31,
2020
$
%
Year Ended
December 31,
2019
One Year Change
Two Year Change
$
%
$
%
Revenues:
Resident fees and services
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, net
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
$
$
3,197,223
4,231
11,796
3,213,250
2,529,344
683,906
$
3,074,022
618
7,223
3,081,863
2,326,311
755,552
593,565
39,327
(2,628)
394
22,317
27,132
680,107
3,799
(39,225)
6,146
(29,280)
(29,280)
(2,224)
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
Net income (loss) attributable to common stockholders
$
(27,056)
$
301,944
$
See Non-GAAP Financial Measures below.
(1)
123,201
3,613
4,573
131,387
203,033
(71,646)
49,103
(15,574)
(15,287)
(277)
(78,424)
12,867
(47,592)
(24,054)
(5,368)
(322,103)
(351,525)
(351,525)
(22,525)
(329,000)
4 % $
585 %
63 %
4 %
9 %
-9 %
9 %
-28 %
-121 %
-41 %
-78 %
90 %
-7 %
-86 %
-16 %
-98 %
-109 %
-109 %
-111 %
$
3,448,175
36
8,658
3,456,869
2,417,349
1,039,520
553,189
67,983
1,614
—
2,145
26,348
651,279
388,241
12,388
528,747
929,376
929,376
56,513
-109 % $
872,863
$
(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)
(36,212)
(570,919)
-11 % $
n/a
-17 %
-11 %
-4 %
-27 %
-2 %
-19 %
684 %
n/a
n/a
-46 %
12 %
-93 %
-373 %
-38 %
-65 %
-65 %
-64 %
-65 % $
(250,952)
4,195
3,138
(243,619)
111,995
(355,614)
40,376
(28,656)
(4,242)
394
20,172
784
28,828
(384,442)
(51,613)
(522,601)
(958,656)
(958,656)
(58,737)
(899,919)
-7 %
n/a
36 %
-7 %
5 %
-34 %
n/a
7 %
-42 %
-263 %
n/a
940 %
3 %
4 %
-99 %
-417 %
-99 %
-103 %
-103 %
-104 %
-103 %
Resident fees and services and property operating expenses for the year ended December 31, 2021 increased compared to the prior year primarily due to acquisitions,
including the acquisition of the Holiday Retirement portfolio on July 30, 2021 for a total purchase price of $1.6 billion. The increases were partially offset by decreases in spot
occupancy across the portfolio due to the COVID-19 pandemic and property dispositions. Spot occupancy remains below pre-pandemic levels but has steadily increased in
recent months, with 94% of communities open for new admissions and nearly all communities allowing visitors, in-person tours and communal dining and activities as of
December 31, 2021. Rapid distribution and a high acceptance rate of COVID-19 vaccinations by residents within assisted living and memory care facilities in the U.S. and U.K.
have resulted in a significant decrease in total resident case counts across the portfolio from peak levels in mid-January 2021, however, resident case counts have increased in
December 2021 as a result of highly transmissible variants. As of December 31, 2021, occupancy has increased approximately 510 bps to 77.7% since the pandemic-low of
72.6% on March 12, 2021. Quarterly spot occupancy rates through December 31, 2021 are as follows:
Spot occupancy
Sequential occupancy change
(1)
(2)
74.9 %
72.9 %
(1.9) %
74.8 %
1.9 %
76.9 %
2.1 %
77.7 %
0.7 %
December 31, 2020
March 31, 2021
June 30, 2021
September 30, 2021
December 31, 2021
Spot occupancy represents approximate month end occupancy at our share for 546 properties in operation as of December 31, 2020, including unconsolidated properties but excluding acquisitions, executed
(1)
dispositions, development conversions and one property closed for redevelopment.
(2)
Sequential occupancy changes are based on actual spot occupancy and may not recalculate due to rounding.
During the year ended December 31, 2021, the U.S. and U.K. portfolios reported spot occupancy gains of approximately 490 bps and 80 bps, respectively. Canada reported a
spot occupancy decline of approximately 290 bps.
On March 27, 2020, the federal government enacted CARES Act to provide financial aid to individuals, businesses, and state and local governments. During the years ended
December 31, 2021 and 2020, we received government grants under the CARES Act primarily to cover increased expenses and lost revenue during the COVID-19 pandemic,
as well as under similar programs in the U.K. and Canada. Grant income is recognized when there is reasonable assurance that the grant will be received and the Company will
comply with all conditions attached to the grant. Additionally, grants are recognized over the periods in which the Company recognizes the increased expenses and lost revenue
the grants are intended to defray. For the years ended December 31, 2021 and 2020 we recognized $97,933,000 and $31,927,000, respectively, of government grant income as a
reduction to property operating expenses in our Consolidated Statements of Comprehensive Income. Additionally, for the years ended December 31, 2021 and 2020, we
recognized $4,642,000 and $3,014,000, respectively, of government grant income in other income. The amount of qualifying expenditures and lost revenue exceeded grant
income recognized and the Company believes it has complied and will continue to comply with all grant conditions.
55
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Property-level operating expenses associated with the COVID-19 pandemic relating to our Seniors Housing Operating portfolio totaled $63,681,000 and $110,719,000 for the
years ended December 31, 2021 and 2020, respectively. 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. Specifically in 2021, we
incurred elevated labor expenses resulting from the increased utilization of contract labor due to the rise in occupancy and a challenging labor market.
During the year ended December 31, 2021, we recorded impairment charges of $22,317,000 related to two held for use properties in which the carrying value exceeded the
estimated fair value. 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. Transaction costs related to asset acquisitions are capitalized as a component of the purchase price. The fluctuation in other expenses is primarily due to the
timing of noncapitalizable transaction costs associated with acquisitions and operator transitions. Changes in the gain on sales of properties are related to the volume and timing
of property sales and the sales prices. During the year ended December 31, 2020, we recognized a gain on real estate disposition of $312,249,000 related to an 11 property U.S.
portfolio.
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, 2021, we completed two Seniors Housing Operating construction projects representing $117,386,000 or $553,573 per unit. The
following is a summary of our consolidated Seniors Housing Operating construction projects, excluding expansions, pending as of December 31, 2021 (dollars in thousands):
Location
Hendon, UK
Barnet, UK
Georgetown, TX
New Rochelle, NY
Sachse, TX
Princeton, NJ
Pflugerville, TX
Denton, TX
Berea, OH
Painesville, OH
Beaver, PA
Lake Jackson, TX
White Marsh, MD
Weymouth, MA
Miami Twp, OH
Charlotte, NC
Gaithersburg, MD
Temple, TX
Kyle, TX
(1)
(1)
Boise, ID
Brookhaven, GA
(1)
Brookline, MA
Columbus, OH
(1)
Raleigh, NC
Toronto, ON
Washington, DC
(1)
Wellesley, MA
(1)
(1)
(1)
Units/Beds
Commitment
Balance
102 $
100
188
72
193
80
196
65
120
119
116
130
188
165
122
328
302
245
225
3,056 $
74,925 $
69,930
36,215
42,669
38,054
29,780
39,500
20,194
14,934
14,462
14,184
32,020
78,610
77,545
18,206
96,416
173,548
65,569
62,700
999,461
$
Est. Completion
1Q22
1Q22
2Q22
3Q22
3Q22
3Q22
4Q22
4Q22
4Q22
4Q22
4Q22
2Q23
3Q23
3Q23
4Q23
1Q24
2Q24
4Q24
1Q25
68,823
60,722
14,082
13,186
12,693
25,167
10,543
5,245
10,714
8,912
7,706
3,726
7,620
10,188
2,071
31,520
25,986
5,290
4,457
328,651
33,216
10,439
30,732
13,170
3,508
49,901
31,276
9,132
510,025
(1)
Final units/beds, commitment amount and expected conversion date not yet known.
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):
56
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Beginning balance
Debt issued
Debt assumed
Debt extinguished
Debt transferred out
Principal payments
Foreign currency
Ending balance
Monthly averages
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Year Ended
December 31, 2019
Amount
1,706,189
23,569
—
(77,959)
—
(50,603)
(1,674)
1,599,522
1,649,485
$
$
$
Weighted Avg.
Interest Rate
3.05%
2.83%
—%
6.14%
—%
3.03%
2.67%
2.81%
2.88%
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%
The majority of our Seniors Housing Operating properties are formed through partnership interests. Net income attributable to noncontrolling interests represents our
partners’ share of net income (loss) related to joint ventures. The decrease compared to the year ended December 31, 2020 relates primarily to our partners' share of gains on
real estate dispositions during that year.
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
December 31, 2021
148,507
$
December 31, 2020
144,131
$
$
$
4,376
%
December 31, 2021
569,484
3.0 % $
December 31, 2020
570,796
$
Change
$
%
$
(1,312)
-0.2 %
(1)
Relates to 554 properties for the QTD Pool and 547 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,
2021
December 31,
2020
$
%
Year Ended
December 31,
2019
One Year Change
Two Year Change
$
%
$
%
$
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
Provision for loan losses, net
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
$
761,441
124,540
4,603
890,584
49,462
841,122
220,699
6,376
(7,333)
10,339
26,579
4,189
260,849
580,273
20,687
135,881
736,841
736,841
35,653
$
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
Net income attributable to common stockholders
$
701,188
$
389,403
$
(1)
See Non-GAAP Financial Measures below.
27,665
61,915
(300)
89,280
(3,721)
93,001
(11,905)
(3,101)
(18,382)
(80,224)
(8,288)
(18,734)
(140,634)
233,635
2,225
71,593
307,453
307,453
(4,332)
311,785
57
4 % $
99 %
-6 %
11 %
-7 %
12 %
-5 %
-33 %
-166 %
-89 %
-24 %
-82 %
-35 %
67 %
12 %
111 %
72 %
72 %
-11 %
$
903,798
62,599
6,246
972,643
53,900
918,743
232,626
12,892
(4,399)
18,690
11,926
13,771
285,506
633,237
22,985
218,322
874,544
874,544
36,271
80 % $
838,273
$
(170,022)
26
(1,343)
(171,339)
(717)
(170,622)
(22)
(3,415)
15,448
71,873
22,941
9,152
115,977
(286,599)
(4,523)
(154,034)
(445,156)
(445,156)
3,714
(448,870)
-19 % $
— %
-22 %
-18 %
-1 %
-19 %
— %
-26 %
351 %
385 %
192 %
66 %
41 %
-45 %
-20 %
-71 %
-51 %
-51 %
10 %
-54 % $
(142,357)
61,941
(1,643)
(82,059)
(4,438)
(77,621)
(11,927)
(6,516)
(2,934)
(8,351)
14,653
(9,582)
(24,657)
(52,964)
(2,298)
(82,441)
(137,703)
(137,703)
(618)
(137,085)
-16 %
99 %
-26 %
-8 %
-8 %
-8 %
-5 %
-51 %
-67 %
-45 %
123 %
-70 %
-9 %
-8 %
-10 %
-38 %
-16 %
-16 %
-2 %
-16 %
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Rental income has increased primarily due to the timing of the establishment of reserves for straight-line rent receivable balances relating to leases for which collection of
substantially all contractual lease payments is no longer deemed probable. During the year ended December 31, 2021, we recorded reserves for previously recognized straight-
line rent receivables of $49,241,000. During the year ended December 31, 2020, we recorded $146,508,000, which included $91,025,000 related to Genesis Healthcare
("Genesis") whom noted substantial doubt as to their ability to continue as a going concern.
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 December 31, 2021, we had ten leases with rental rate increasers ranging from 2.00% to 5.94% 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 have generally experienced a higher degree of occupancy declines, which in some cases impacted the ability of our Triple-net
operators to make contractual rent payments to us. However, many of our Triple-net operators received funds under the CARES Act Paycheck Protection Program and Provider
Relief Fund. During the year ended December 31, 2021, we collected approximately 94% of rent due from operators under Triple-net lease agreements (primarily seniors
housing and post-acute care facilities). No significant deferrals or rent concessions have been made. We evaluate leases individually and recognize rent on a cash basis if
collectibility of substantially all contractual rent payments is not probable.
Depreciation and amortization fluctuate as a result of the acquisitions, dispositions 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, 2021, we recognized a provision for loan losses under the current expected credit losses accounting standard, primarily related to the
initial recognition of the £540 million of senior loan financings to affiliates of Safanad as part of the recapitalization of its investment in HC-One Group during the second
quarter. The increase to interest income is primarily driven by interest recognized on this loan funding. Additionally, 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 outstanding
loans.
During the year ended December 31, 2021, we recorded impairment charges of $26,579,000 related to four held for sale or sold properties and two held for use properties.
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. Transaction costs
related to asset acquisitions are capitalized as a component of purchase price. The fluctuation in other expenses is primarily due to noncapitalizable transaction costs from
acquisitions and segment transitions. Changes in the gain on sales of properties are related to the volume and timing of property sales and the sales prices.
During the year ended December 31, 2021, we completed one Triple-net construction project representing $22,990,000 or $280,366 per unit. The following is a summary of
our consolidated Triple-net construction projects, excluding expansions, pending as of December 31, 2021 (dollars in thousands):
Location
Redhill, UK
London, UK
Wombourne, UK
Leicester, UK
Rugby, UK
Raleigh, NC
Total
Units/Beds
Commitment
Balance
76 $
82
66
60
76
191
551 $
21,465
43,559
16,200
15,120
20,673
154,256 48050000
271,273
$
$
Est. Completion
1Q22
2Q22
4Q22
4Q22
4Q22
2Q23
18,347
22,981
10,422
9,047
8,487
48,050
117,334
During the year ended December 31, 2021, loss (gain) on derivatives and financial instruments, net is primarily attributable to the mark-to-market of the equity warrants
received as part of the Safanad/HC-One transaction that closed in the second quarter. In addition, the mark-to-market adjustment on our Genesis available-for-sale investment is
reflected in all periods.
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):
58
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Beginning balance
Debt transferred in
Debt extinguished
Principal payments
Foreign currency
Ending balance
Monthly averages
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Year Ended
December 31, 2019
Amount
123,652
—
(46,402)
(4,679)
(35)
72,536
117,966
$
$
$
Weighted Avg.
Interest Rate
4.91%
—%
5.43%
5.14%
5.43%
4.57%
4.90%
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%
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 increase in income from unconsolidated entities during the year ended December 31, 2021 is primarily related to the
reserves established on straight-line rent receivable balances at unconsolidated Genesis entities in the prior year. Net income attributable to noncontrolling interests represents
our partners’ share of net income relating to those partnerships where we are the controlling partner.
Outpatient Medical
The following is a summary of our SSNOI at Welltower Share for the Outpatient Medical segment (dollars in thousands):
SSNOI
(1)
QTD Pool
YTD Pool
Three Months Ended
Change
Year Ended
Change
December 31, 2021
101,599
$
December 31, 2020
100,185
$
$
$
1,414
%
December 31, 2021
386,411
1.4 % $
December 31, 2020
375,497
$
$
$
10,914
%
2.9 %
(1)
Relates to 350 properties for the QTD Pool and 331 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,
2021
December 31,
2020
$
%
Year Ended
December 31,
2019
One Year Change
Two Year Change
$
%
$
%
$
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, net
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.
$
613,254
8,792
13,243
635,289
186,939
448,350
223,302
17,506
(4)
(3,463)
2,211
2,523
242,075
206,275
(4,395)
93,348
295,228
295,228
4,916
$
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
(96,330)
2,879
8,721
(84,730)
(28,009)
(56,721)
(38,069)
(73)
(1,050)
(6,665)
2,211
(5,695)
(49,341)
(7,380)
(11,707)
(602,570)
(621,657)
(621,657)
(278)
5,194
-14 % $
49 %
193 %
-12 %
-13 %
-11 %
-15 %
— %
-100 %
-208 %
n/a
-69 %
-17 %
-3 %
-160 %
-87 %
-68 %
-68 %
n/a
$
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
5,194
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
(5,472)
715,808
4 % $
395 %
123 %
5 %
-2 %
8 %
8 %
31 %
n/a
n/a
-100 %
360 %
8 %
8 %
4 %
n/a
344 %
344 %
-105 %
355 % $
(71,348)
7,597
11,212
(52,539)
(31,854)
(20,685)
(17,956)
4,095
(4)
(3,463)
(11,851)
735
(28,444)
7,759
(11,456)
92,376
88,679
88,679
(278)
88,957
-10 %
636 %
552 %
-8 %
-15 %
-4 %
-7 %
31 %
n/a
n/a
-84 %
41 %
-11 %
4 %
-162 %
n/a
43 %
43 %
-5 %
44 %
$
290,312
$
917,163
$
(626,851)
-68 % $
201,355
$
59
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Rental income has decreased due primarily to significant dispositions that closed during 2020. 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, 2021, our consolidated Outpatient Medical portfolio signed
143,266 square feet of new leases and 203,285 square feet of renewals. The weighted-average term of these leases was seven years, with a rate of $36.65 per square foot and
tenant improvement and lease commission costs of $51.78 per square foot. Substantially all of these leases contain an annual fixed or contingent escalation rent structure
ranging from 1.0% to 10.0%.
We have collected virtually all rent due through the year ended December 31, 2021, with uncollected amounts primarily attributable to local jurisdictions with COVID-19
related ordinances providing temporary rent relief to tenants. We evaluate leases individually and recognize rent on a cash basis if collectibility of substantially all contractual
rent payments is not probable.
The increase in interest income for the year ended December 31, 2021 is due primarily to a $178,207,000 first mortgage initiated in August 2020, which was subsequently
repaid in full in June of 2021, resulting in the reversal of the previously established allowance for credit losses.
The fluctuation in property operating expenses and depreciation and amortization are primarily attributable to the significant dispositions that occurred in 2020. 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, 2021, we recognized an
impairment charge of $2,211,000 related to one held for sale property. Transaction costs related to asset acquisitions are capitalized as a component of purchase price. The
fluctuation in other expenses is primarily due to noncapitalizable transaction costs. Changes in gains/losses on sales of properties are related to volume of property sales and the
sales prices.
During the year ended December 31, 2021, we completed three Outpatient Medical construction projects representing $125,179,000 or $605 per square foot. The following is
a summary of our consolidated Outpatient Medical construction projects, excluding expansions, pending as of December 31, 2021 (dollars in thousands):
Location
Tyler, TX
Stafford, TX
Total
Square Feet
Commitment
Balance
85,214 $
36,788
122,002 $
35,369 $
18,031
53,400 $
14,534
4,249
18,783
Est. Completion
4Q22
4Q22
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, 2021
Year Ended
December 31, 2020
Year Ended
December 31, 2019
Amount
548,229
—
(7,670)
(10,305)
530,254
540,947
$
$
$
Weighted Avg.
Interest Rate
3.55%
—%
5.64%
4.43%
3.49%
3.52%
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%
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.
60
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 for the periods presented (dollars in thousands):
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
Income tax benefit (expense)
Loss from continuing operations
Net loss attributable to common stockholders
(1)
See Non-GAAP Financial Measures below.
Year Ended
One Year Change
December 31,
2021
December 31,
2020
$
%
Year Ended
December 31,
2019
One Year Change
Two Year Change
$
%
$
%
$
2,992
$
2,781
$
2,992
8,817
(5,825)
426,644
126,727
52,506
7,895
613,772
(619,597)
(8,713)
(628,310)
2,781
3,381
(600)
432,431
128,394
33,344
24,929
619,098
(619,698)
(9,968)
(629,666)
$
(628,310)
$
(629,666)
$
211
211
5,436
(5,225)
(5,787)
(1,667)
19,162
(17,034)
(5,326)
101
1,255
1,356
1,356
8 % $
3,966
$
8 %
161 %
-871 %
-1 %
-1 %
57 %
-68 %
-1 %
— %
13 %
— %
3,966
—
3,966
461,273
126,549
82,541
10,705
681,068
(677,102)
(2,957)
(680,059)
— % $
(680,059)
$
(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 % $
-30 %
n/a
-115 %
-6 %
1 %
-60 %
133 %
-9 %
8 %
-237 %
7 %
7 % $
(974)
(974)
8,817
(9,791)
(34,629)
178
(30,035)
(2,810)
(67,296)
57,505
(5,756)
51,749
51,749
-25 %
-25 %
n/a
-247 %
-8 %
— %
-36 %
-26 %
-10 %
8 %
-195 %
8 %
8 %
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):
Senior unsecured notes
Unsecured credit facility and commercial paper
program
Loan expense
Totals
$
$
Year Ended
One Year Change
December 31,
2021
December 31,
2020
$
%
Year Ended
December 31,
2019
401,247
$
400,014
$
1,233
— % $
402,133
$
6,759
18,638
426,644
$
15,313
17,104
432,431
$
(8,554)
1,534
(5,787)
-56 %
9 %
-1 % $
43,861
15,279
461,273
$
One Year Change
Two Year Change
$
(2,119)
(28,548)
1,825
(28,842)
%
$
%
-1 % $
(886)
-65 %
12 %
-6 % $
(37,102)
3,359
(34,629)
— %
-85 %
22 %
-8 %
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 the consolidated financial statements for additional information. The change in interest expense on our unsecured revolving
credit facility and commercial paper program is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes. Please refer to Note 10 of our
consolidated financial statements for additional information. 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, 2021 is due primarily to the early extinguishment of $339,128,000 of our 3.75% senior unsecured
notes due March 2023 and $334,624,000 of our 3.95% senior unsecured notes due September 2023. 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.
General and administrative expenses as a percentage of consolidated revenues for the years ended December 31, 2021, 2020 and 2019 were 2.67%, 2.79% and 2.47%,
respectively. Other expenses for all years include severance-related costs associated with the departure of certain executive officers and key employees. The provision for
income taxes primarily relates to state taxes, foreign taxes and taxes based on income generated by entities that are structured as TRSs.
Other
Non-GAAP Financial Measures
We believe that net income and net income attributable to common stockholders, 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
61
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
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 expenses, other impairment charges and other adjustments as deemed appropriate. 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 and secured debt principal amortization.
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
restricted cash), 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 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.
62
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The table below reflects the reconciliation of FFO to NICS, the most directly comparable U.S. GAAP measure, for the periods presented. Noncontrolling interest and
unconsolidated entity amounts represent adjustments to reflect our share of depreciation and amortization, gains/loss on real estate dispositions and impairment 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.
2021
Year Ended December 31,
2020
2019
$
$
$
$
336,138
1,037,566
51,107
(235,375)
(54,190)
85,476
1,220,722
426,841
0.78
2.86
$
$
$
$
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
The following tables reflect the reconciliation of consolidated 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)
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, net
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
2021
Year Ended December 31,
2020
2019
374,479
(235,375)
22,933
8,713
41,739
51,107
7,270
49,874
(7,333)
126,727
1,037,566
489,853
1,967,553
683,906
841,122
448,350
(5,825)
1,967,553
$
$
$
$
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
$
$
$
$
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
$
$
$
$
63
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
Consolidated
NOI
Triple-net:
Total revenues
Property
operating expenses
Consolidated
NOI
Outpatient
Medical:
Total revenues
Property
operating expenses
Consolidated
NOI
Corporate:
Total revenues
Property
operating expenses
Consolidated
NOI
March 31,
June 30,
September 30,
December 31,
Three Months Ended
Year Ended
December 31,
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
$
726,402
$
851,128
$
742,549
$
773,650
$
839,519
$
742,065
$
904,780
$
715,020
$
3,213,250
555,968
607,871
582,361
595,513
666,610
567,704
$
170,434
$
243,257
$
160,188
$
178,137
$
172,909
$
174,361
$
168,482
$
207,729
$
238,941
$
233,619
$
239,985
$
120,928
12,841
13,302
12,627
13,563
11,664
12,567
$
$
724,405
180,375
243,176
12,330
$
$
555,223
159,797
239,028
13,751
$
155,641
$
194,427
$
226,314
$
220,056
$
228,321
$
108,361
$
230,846
$
225,277
$
156,223
$
199,329
$
159,072
$
180,831
$
159,503
$
172,704
$
160,491
$
167,155
46,863
60,608
45,495
51,688
48,072
52,728
$
109,360
$
138,721
$
113,577
$
129,143
$
$
955
1,654
(699)
$
$
416
—
416
$
$
430
2,174
(1,744)
$
$
375
—
375
$
$
$
111,431
$
119,976
790
3,054
(2,264)
$
$
1,177
1,718
(541)
46,509
113,982
817
1,935
(1,118)
$
$
$
49,924
117,231
813
1,663
(850)
$
$
$
2,529,344
683,906
890,584
49,462
841,122
635,289
186,939
448,350
2,992
8,817
(5,825)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
3,081,863
2,326,311
755,552
801,304
53,183
748,121
720,019
214,948
505,071
2,781
3,381
(600
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
Land parcels, loans and subleases
Transitions
(4)
Other
(2)
(3)
Same store properties
721
92
813
(183)
(35)
(2)
(2)
(18)
(82)
(2)
489
624
39
663
(48)
(5)
(1)
(14)
(19)
(20)
(2)
554
306
79
385
(23)
(3)
(2)
(1)
(6)
—
—
350
1,651
210
1,861
(254)
(43)
(5)
(17)
(43)
(102)
(4)
1,393
721
92
813
(193)
(35)
(3)
(2)
(18)
(83)
(2)
477
624
39
663
(50)
(5)
(1)
(14)
(19)
(25)
(2)
547
306
79
385
(42)
(3)
(2)
(1)
(6)
—
—
331
1,651
210
1,861
(285
(43
(6
(17
(43
(108
(4
1,355
(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.
Represents properties that are either closed or being closed.
64
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.
QTD Pool
Three Months Ended
YTD Pool
Twelve Months Ended
SSNOI Reconciliations:
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
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
SSNOI at Welltower Share
(1)
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
SSNOI at Welltower Share
(1)
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
SSNOI at Welltower Share
(1)
SSNOI at Welltower Share:
Seniors Housing Operating
Triple-net
Outpatient Medical
Total
$
$
180,375
10,713
(12,125)
(35)
(42,733)
149
136,344
230,846
4,893
(13,600)
(6,854)
(67,192)
414
148,507
113,982
4,682
(4,896)
(2,483)
(9,446)
(240)
101,599
136,344
148,507
101,599
386,450
$
$
159,797
13,182
(9,405)
(381)
(20,058)
1,062
144,197
225,277
4,818
(14,563)
(10,176)
(62,498)
1,273
144,131
117,231
3,609
(4,392)
(3,092)
(7,476)
(5,695)
100,185
144,197
144,131
100,185
388,513
$
$
$
683,906
44,470
(59,602)
11,266
(135,437)
(848)
543,755
841,122
19,559
(48,874)
15,778
(258,800)
699
569,484
448,350
18,998
(17,168)
(8,140)
(54,490)
(1,139)
386,411
543,755
569,484
386,411
1,499,650
$
755,552
53,736
(49,070
(3,390
(109,345
5,340
652,823
748,121
13,796
(58,245
(16,453
(122,851
6,42
570,796
505,071
10,139
(15,070
(12,392
(68,633
(43,618
375,497
652,823
570,796
375,497
1,599,116
(1)
Includes adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.2684 and to translate U.K. properties at a GBP/USD rate of 1.38.
65
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, net
Loss (gain) on derivatives and financial instruments, net
Other expenses
Leasehold interest adjustment
Casualty losses, net of recoveries
Other impairment
(2)
(3)
(4)
(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
Total fixed charges
Adjusted EBITDA
Adjusted fixed charge coverage ratio
2021
Year Ended December 31,
2020
2019
$
$
$
$
$
$
374,479
489,853
8,713
1,037,566
1,910,611
22,933
17,812
49,874
(235,375)
51,107
7,270
(7,333)
40,860
760
5,786
49,241
1,913,546
489,853
19,352
(17,506)
491,699
1,913,546
3.89x
491,699
65,587
557,286
1,913,546
3.43x
$
$
$
$
$
$
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
(1)
(2)
Certain severance-related costs are included in stock-based compensation and excluded from other expenses.
Represents $27,988,000 of revenue and $28,748,000 of property operating expenses associated with a leasehold portfolio interest relating to 26 properties assumed by a wholly-owned affiliate in conjunction with the
Holiday Retirement transaction. Subsequent to the initial transaction, we purchased eight of the leased properties and one of the properties was sold by the landlord and removed from the lease. No rent will be paid in
excess of net cash flow relating to the leasehold properties and therefore, the net impact has been excluded from Adjusted EBITDA.
(3)
Represents casualty losses, net of any insurance recoveries.
Represents reserve for straight-line rent receivables balances relating to leases placed on cash recognition.
(4)
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 restricted cash), 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.
66
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Book capitalization:
Unsecured credit facility and commercial paper
Long-term debt obligations
Cash and cash equivalents and restricted cash
Total net debt
Total equity and noncontrolling interests
Book capitalization
(2)
(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
(2)
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
Market capitalization:
(2)
Net debt to market capitalization ratio
2021
Year Ended December 31,
2020
2019
$
$
$
$
$
$
$
324,935
13,917,702
(346,755)
13,895,882
18,997,873
32,893,755
42.2 %
13,895,882
6,910,114
18,997,873
39,803,869
34.9 %
447,239
85.77
38,359,689
13,895,882
1,361,872
53,617,443
$
$
$
$
$
$
$
—
13,905,822
(2,021,043)
11,884,779
17,225,062
29,109,841
40.8 %
11,884,779
6,104,297
17,225,062
35,214,138
33.8 %
417,401
64.62
26,972,453
11,884,779
1,252,343
40,109,575
$
$
$
$
$
$
$
1,587,597
13,436,365
(385,766)
14,638,196
16,982,504
31,620,700
46.3 %
14,638,196
5,715,459
16,982,504
37,336,159
39.2 %
410,257
81.78
33,550,817
14,638,196
1,442,060
49,631,073
25.9 %
29.6 %
29.5 %
(1)
Amounts include senior unsecured notes, secured debt and lease liabilities related to finance leases, as reflected on our Consolidated Balance Sheets. Operating lease liabilities related to the ASC 842 adoption are
excluded.
(2)
Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests as reflected on our Consolidated Balance Sheets.
Critical Accounting Policies & Estimates
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 and estimates 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.
67
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following table presents information about our critical accounting policies and estimates:
Impairment of Real Property
Nature of Critical
Accounting Estimate
Assessing impairment of real property involves subjectivity in determining if
indicators of impairment are present and in estimating the future undiscounted cash
flows or estimated fair value of an asset. In estimating the undiscounted cash flows or
fair value, key assumptions that would be made are the estimation of future rental
revenues, operating expenses, capitalization rates and the ability and intent to hold the
respective asset, all of which are affected by our expectations of future market or
economic conditions. These estimates can have a significant impact on the
undiscounted cash flows or estimated fair value of an asset.
Assumptions/Approach
Used
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.
At December 31, 2021, our net
real property owned was approximately
$30,695,633,000. During the year ended December 31, 2021, we recorded impairment
charges of $19,567,000 related to four Triple-net properties and one Outpatient Medical
property which were disposed of or classified as held for sale for which the carrying
values exceeded the fair values. Additionally, we recorded $31,540,000 of impairment
charges related to two Seniors Housing Operating properties and two Triple-net
properties that were held for use in which the carrying values exceeded the estimated
fair values.
Real Estate Acquisitions
We believe that substantially all of our real estate acquisitions are considered asset
acquisitions for which we record the related real estate acquired (tangible assets and
identifiable intangible assets and liabilities) at cost on a relative fair value basis.
Liabilities assumed and any associated noncontrolling interests are reflected at fair
value. Tangible assets consist primarily of land, building and improvements.
Identifiable intangible assets and liabilities primarily consist of the above or below
market component of in-place leases and the value of in-place leases. The total
amount of other intangible assets acquired is further allocated to in-place lease values
and customer relationship values based on management's evaluation of the specific
characteristics of each tenant's lease and our overall relationship with respect to that
tenant.
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.
During the year ended December 31, 2021, we completed $4,084,174,000 of real estate
acquisitions. These transactions were accounted for as asset acquisitions and the
purchase price of each was allocated based on the relative fair values of the assets
acquired and liabilities assumed.
68
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Nature of Critical
Accounting Estimate
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.
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
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.
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.
During the year ended December 31, 2021, we recognized provision for loan losses of
$7,270,000 based on our historical loss experience.
69
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, 2021
December 31, 2020
Principal balance
Change in fair value
Principal balance
Change in fair value
$
$
11,002,297 $
1,490,708
12,493,005 $
(1,059,031) $
(44,222)
(1,103,253) $
9,943,501 $
1,702,196
11,645,697 $
(761,581)
(57,756)
(819,337)
Our variable rate debt, including our unsecured revolving credit facility and commercial paper program, is reflected at fair value. At December 31, 2021, we had
$1,742,268,000 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 $17,423,000. At December 31, 2020, we had $2,241,909,000 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 $22,420,000.
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, 2021, 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 $11,000,000. 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 (dollars in thousands):
Foreign currency exchange contracts
Debt designated as hedges
Totals
$
$
32,280 $
1,613,164
1,645,444 $
19,740 $
16,132
35,872 $
61,851 $
1,630,542
1,692,393 $
12,731
16,305
29,036
December 31, 2021
December 31, 2020
Carrying value
Change in fair value
Carrying value
Change in fair value
70
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, 2021 and 2020, the related
consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2021, 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, 2021 and 2020 and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2021, 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, 2021, 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 16, 2022 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, 2021, the Company’s net real property owned was approximately $30.7 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.
71
HowWeAddressed 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 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 the year ended December 31, 2021, the Company completed approximately $4.1 billion of real estate acquisitions. As disclosed in Note 3 of
the consolidated financial statements, the total purchase price for all properties acquired has been allocated to the related real estate acquired
(tangible assets and identifiable intangible assets and liabilities) based upon their relative fair values.
Auditing the fair values allocated by management to the real estate acquired was complex because the fair value estimates were sensitive to
significant assumptions, including comparable land sales, capitalization rates, discount rates, market rental rates and property operating data,
which can be impacted by expectations about future market or economic conditions.
HowWeAddressed 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 16, 2022
/s/ Ernst & Young LLP
72
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
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
December 31, 2021
December 31, 2020
$
3,968,430 $
31,062,203
1,789,628
134,097
651,389
(6,910,114)
30,695,633
522,796
1,068,681
32,287,110
1,039,043
68,321
269,265
77,490
365,643
803,453
2,623,215
34,910,325 $
324,935 $
11,613,758
2,192,261
545,944
1,235,554
15,912,452
401,294
448,605
23,133,641
(107,750)
8,663,736
(14,380,915)
(121,316)
17,636,001
960,578
18,596,579
34,910,325 $
$
$
$
3,440,650
28,024,971
1,500,030
216,613
487,742
(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
See accompanying notes
73
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: Net income (loss) attributable to noncontrolling interests
(1)
Net income (loss) attributable to common stockholders
Weighted 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.
2021
Year Ended December 31,
2020
2019
$
$
$
$
$
$
3,197,223 $
1,374,695
137,563
32,634
4,742,115
2,774,562
1,037,566
489,853
126,727
(7,333)
49,874
7,270
51,107
41,739
4,571,365
170,750
(8,713)
(22,933)
235,375
374,479
374,479
38,341
336,138 $
424,976
426,841
0.88 $
0.79 $
0.88 $
0.78 $
3,074,022 $
1,443,360
69,156
19,429
4,605,967
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
1,038,852
60,008
978,844 $
415,451
417,387
2.50 $
2.36 $
2.49 $
2.33 $
3,448,175
1,588,400
63,830
20,901
5,121,306
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
1,330,410
97,978
1,232,432
401,845
403,808
3.31
3.07
3.29
3.05
See accompanying notes
74
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.
2021
Year Ended December 31,
2020
2019
374,479 $
1,038,852 $
1,330,410
—
(52,826)
79,702
26,876
401,355
38,029
363,326 $
—
103,612
(134,369)
(30,757)
1,008,095
65,598
942,497 $
540
161,915
(131,120)
31,335
1,361,745
111,701
1,250,044
$
$
See accompanying notes
75
CONSOLIDATED STATEMENTS OF EQUITY
WELLTOWER INC. AND SUBSIDIARIES
(in thousands)
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 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 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, 2020
Comprehensive income:
Net income (loss)
Other comprehensive income (loss)
Total comprehensive income
Net change in noncontrolling interests
Amounts related to stock incentive plans, net of forfeitures
Net proceeds from issuance of common stock
Dividends paid:
Common stock dividends
Balances at December 31, 2021
Preferred
Stock
718,498 $
$
Capital in
Excess of Par
Value
Common
Stock
384,465 $ 18,424,662 $
Treasury
Stock
Cumulative
Net Income
Cumulative
Dividends
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interests
Total
(68,499) $
6,121,534 $ (10,818,557) $
(129,769) $
954,265 $
15,586,599
162
13,666
12,712
3,583
25,163
1,030,925
705,786
(10,456)
(718,498)
1,232,432
17,612
67,365
13,440
(68,887)
—
411,005
20,190,119
(78,955)
(1,404,977)
(12,223,534)
7,353,966
(5,212)
(112,157)
966,183
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)
622
7,064
18,158
27,666
587,202
(17,879)
(7,656)
—
418,691
20,823,145
(104,490)
8,327,598
(1,120,187)
(13,343,721)
(148,504)
908,853
336,138
27,188
36,795
(366)
15,296
246
29,668
(23,743)
18,087
2,316,152
(3,260)
$
— $
448,605 $ 23,133,641 $
(107,750) $
8,663,736 $ (14,380,915) $
(121,316) $
960,578 $
(1,037,194)
1,077,754
(30,854)
1,046,900
(143,575)
10,409
594,266
(7,656)
(1,120,187)
16,881,572
372,933
26,822
399,755
(8,447)
15,073
2,345,820
(1,037,194)
18,596,579
See accompanying notes
76
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 (received)
(1) Includes amounts attributable to redeemable noncontrolling interests.
2021
Year Ended December 31,
2020
2019
$
374,479
$
1,038,852
$
1,330,410
1,037,566
19,148
7,270
51,107
17,812
(7,333)
49,874
22,933
(30,820)
(3,536)
(235,375)
16,763
77,554
(122,117)
1,275,325
(4,084,174)
(282,588)
(417,963)
(19,352)
(997,449)
343,260
(26,595)
(396,020)
286,772
7,519
1,070,322
(4,516,268)
324,935
1,703,626
(1,533,752)
23,569
(197,618)
2,348,201
—
(73,735)
156,318
(138,756)
(1,035,906)
(9,218)
1,567,664
(1,009)
(1,674,288)
2,021,043
346,755
492,742
(4,812)
$
$
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
$
$
See accompanying notes.
77
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Business
Welltower Inc., (the "Company") 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 varying terms 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.
Our Seniors Housing Operating segment contains continuing care retirement communities which operate as entrance fee communities. The entrance fee communities offer
different contracts which vary in terms of how much of the entrance fee is considered to be refundable upon move-out, temporarily refundable until a period of time has passed,
or nonrefundable. Refundable entrance fees are recorded as a payable within the accrued expenses and other liabilities line item of our Consolidated Balance Sheets.
Nonrefundable entrance fees are recorded as deferred revenue within the same line item and are recognized into revenue over the estimated remaining stay of the resident. We
use a third party actuarial expert to determine the estimated remaining stay of each resident based on demographic data.
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.
78
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash and Cash Equivalents
Cash and cash equivalents consist of all highly liquid investments with an original maturity of three months or less.
Restricted Cash
Restricted cash primarily consists of amounts held by lenders to provide future payments for real estate taxes, insurance, tenant and capital improvements, amounts held in
escrow relating to transactions we are entitled to receive over a period of time as outlined in the escrow agreement and net proceeds from property sales that were executed as
tax-deferred dispositions under Internal Revenue Code (“IRC”) Section 1031.
Deferred Loan Expenses
Deferred loan expenses are costs incurred by us in connection with the issuance, assumption and amendments of debt arrangements. Deferred loan expenses related to debt
instruments, excluding the primary unsecured credit facility, are recorded as a reduction of the related debt liability. Deferred loan expenses related to the primary unsecured
credit facility are included in other assets. We amortize these costs over the term of the debt using the straight-line method, which approximates the effective interest method.
Investments in Unconsolidated Entities
Investments in entities that we do not consolidate but have the ability to exercise significant influence over operating and financial policies are reported under the equity
method of accounting. Under the equity method, our share of the investee’s earnings or losses is included in our consolidated results of operations. The initial carrying value of
investments in unconsolidated entities is based on the amount paid to purchase the entity interest inclusive of transaction costs. To the extent that our cost basis is different from
the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share
of equity in earnings of the entity. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method
investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment
is recorded.
Equity Securities
Equity securities are measured at fair value with gains and losses recognized in loss (gain) on derivatives and financial instruments, net in the Consolidated Statements of
Comprehensive Income.
Redeemable Noncontrolling Interests
Certain noncontrolling interests are redeemable at fair value. Accordingly, we record the carrying amount of the noncontrolling interests at the greater of (i) the initial
carrying amount, increased or decreased for the 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 the interests are redeemable 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 five 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, 2021, the current redemption value of redeemable noncontrolling interests exceeded the carrying value of $401,294,000
by $40,212,000.
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.
79
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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 or pledge of the membership 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.
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.
80
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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,
2021
2020
$
$
174,799
111,157
238,931
307,316
117,013
286,338
1,235,554
$
$
101,592
112,202
193,631
115,411
99,916
418,842
1,041,594
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.
81
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Foreign Currency
Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. We translate the results of operations of our foreign subsidiaries into
U.S. Dollars using average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the period. We
record resulting currency translation adjustments in accumulated other comprehensive income, a component of stockholders’ equity, on our Consolidated Balance Sheets.
Earnings Per Share
Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding for the period adjusted
for non-vested shares of restricted stock. The computation of diluted earnings per share is similar to basic earnings per share, except that the number of shares is increased to
include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued. 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.
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, the direct
and indirect economic effects of the pandemic and containment measures, the impact of new variants, the effectiveness of vaccines, the overall pace of recovery, 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.
Our Seniors Housing Operating revenues are dependent on occupancy. Spot occupancy has steadily increased in recent months, with 94% (unaudited) of communities open
for new admissions and nearly all communities allowing visitors, in-person tours and communal dining and activities as of December 31, 2021. Rapid distribution and a high
acceptance rate of COVID-19 vaccinations by residents within assisted living and memory care facilities in the U.S. and U.K. have resulted in a significant decrease in total
resident case counts across the portfolio from peak levels in mid-January 2021, however, resident case counts have increased in December 2021 as a result of highly
transmissible variants. As of December 31, 2021, occupancy has increased approximately 510 basis points ("bps") to 77.7% since the pandemic-low of 72.6% on March 12,
2021 (unaudited). Quarterly spot occupancy rates through December 31, 2021 are as follows (unaudited):
Spot occupancy
Sequential occupancy change
(1)
(2)
December 31, 2020
March 31, 2021
June 30, 2021
September 30, 2021
December 31, 2021
74.9 %
72.9 %
(1.9)%
74.8 %
1.9 %
76.9 %
2.1 %
77.7 %
0.7 %
Spot occupancy represents approximate month end occupancy at our share for 546 properties in operation as of December 31, 2020, including unconsolidated properties but excluding acquisitions, executed
(1)
dispositions, development conversions since this date as well as one property closed for redevelopment.
(2)
Sequential occupancy changes are based on actual spot occupancy and may not recalculate due to rounding.
During the year ended December 31, 2021, the U.S. and U.K. portfolios reported spot occupancy gains of approximately 490 bps and 80 bps, respectively. Canada reported a
spot occupancy gain of approximately 290 bps (unaudited).
On March 27, 2020, the federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide financial aid to individuals,
businesses, and state and local governments. During the twelve months ended December 31, 2021 and 2020, we received government grants under the CARES Act primarily to
cover increased expenses and lost revenue during the COVID-19 pandemic, as well as under similar programs in the U.K. and Canada. Grant income is recognized when there
is reasonable assurance that the grant will be received and the Company will comply with all conditions attached to the grant. Additionally, grants are recognized over the
periods in which the Company recognizes the increased expenses and lost revenue the grants are intended to defray. For the years ended December 31, 2021 and 2020 we
recognized $97,933,000 and $31,927,000, respectively, of government grant income as a reduction to property operating expenses in our Consolidated Statements of
Comprehensive Income. Additionally, for the years ended December 31, 2021 and 2020, we recognized $4,642,000 and $3,014,000, respectively, of government grant income
in other income in our Consolidated Statements of Comprehensive Income. The amount of qualifying expenditures and lost revenue exceeded grant income recognized and we
believe we have complied and will continue to comply with all grant conditions.
82
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Property-level operating expenses associated with the COVID-19 pandemic relating to our Seniors Housing Operating portfolio totaled $63,681,000 and $110,719,000 for the
years ended December 31, 2021 and 2020, respectively. 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. Certain new expenses incurred since the start of the
pandemic may continue on an ongoing basis as part of new health and safety protocols.
Our Triple-net operators have experienced similar occupancy declines and operating costs as described above with respect to our Seniors Housing Operating properties.
Additionally, 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 CARES Act Paycheck Protection Program
and Provider Relief Fund.
During the year ended December 31, 2021, we collected approximately 94% of rent due from operators under Triple-net lease agreements (primarily seniors housing and
post-acute care facilities). No significant rent deferrals or rent concessions have been made. We evaluate leases individually and recognize rent on a cash basis if collectibility
of substantially all contractual rent payments is not probable. To the extent 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.
During the year ended December 31, 2021, we have collected virtually all rent due from tenants in our Outpatient Medical portfolio, with uncollected amounts primarily
attributable to local jurisdictions with COVID-19 related ordinances providing temporary rent relief to tenants. We evaluate leases individually and recognize rent on a cash
basis if collectibility of substantially all contractual rent payments is not probable.
New Accounting Standards
•
•
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. The ASU is effective for public business entities beginning after
December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The adoption of this standard will not have a significant impact on
our consolidated financial statements.
In March 2020, the FASB issued an amendment to the reference rate reform standard which provides the option for a limited period of time to ease the potential
burden in accounting for, or recognizing the effects of, reference rate reform on contract modifications and hedge accounting. An example of such reform is the
expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. Entities that make this
optional expedient election would not have to remeasure the contracts at the modification date or reassess the accounting treatment if certain criteria are met and would
continue applying hedge accounting for relationships affected by reference rate reform. The new standard was effective for us upon issuance and elections can be made
through December 31, 2022. We are currently evaluating our options with regards to existing contracts and hedging relationships and the impact of adopting this
update 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.
83
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
Right of use assets, net
Total net real estate assets
Receivables and other assets
Total assets acquired
(1)
Lease liabilities
Accrued expenses and other liabilities
Total liabilities acquired
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
Seniors Housing
Operating
Triple-net
Outpatient Medical
Total
Year Ended December 31, 2021
$
$
449,335 $
2,347,609
264,589
77,455
3,138,988
6,096
3,145,084
(138,126)
(191,454)
(329,580)
(4,942)
2,810,562
322,050
(13,834)
35
308,251
197,829
3,316,642 $
88,839 $
809,328
—
—
898,167
411
898,578
—
(8,703)
(8,703)
(6,449)
883,426
77,412
(3,078)
—
74,334
37,345
995,105 $
64,843 $
313,864
24,751
—
403,458
3,534
406,992
—
(266)
(266)
(16,540)
390,186
42,464
(2,440)
(4,646)
35,378
47,414
472,978 $
603,017
3,470,801
289,340
77,455
4,440,613
10,041
4,450,654
(138,126)
(200,423)
(338,549)
(27,931)
4,084,174
441,926
(19,352)
(4,611)
417,963
282,588
4,784,725
(1)
(2)
(3)
Excludes $4,201,000 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
Total net real estate assets
Receivables and other assets
Total assets acquired
(1)
Accrued expenses and other liabilities
Total liabilities acquired
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
Seniors Housing
Operating
Triple-net
Outpatient Medical
Total
Year Ended December 31, 2020
$
$
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.
84
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Seniors Housing
Operating
Triple-net
Outpatient Medical
Total
Year Ended December 31, 2019
$
$
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
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 acquired
(2)
Noncontrolling interests
Non-cash acquisition related activity
Cash disbursed for acquisitions
(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
(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.
Holiday Retirement Acquisition
On July 30, 2021, we acquired a portfolio of 85 seniors housing properties owned by Holiday Retirement for $1,576,600,000, which are included in our Seniors Housing
Operating segment and in the table above for the year ended December 31, 2021. Atria Senior Living assumed operations of the portfolio following its acquisition of the
Holiday Retirement management company pursuant to an incentive-based management agreement. As part of this transaction, a wholly owned subsidiary assumed the
leasehold interest in a 26 property portfolio and subsequently purchased eight of the leased properties from the landlord. The lease, identified as an operating lease, expires in
2035 and was recognized as a right of use asset, net of above market lease intangibles, and lease liability.
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):
December 31, 2021
Year Ended
December 31, 2020
December 31, 2019
Development projects:
Seniors Housing Operating
Triple-net
Outpatient Medical
Total development projects
Expansion projects
Total construction in progress conversions
117,386 $
22,990
125,179
265,555
5,292
270,847 $
93,188 $
75,149
43,493
211,830
48,600
260,430 $
28,117
—
21,006
49,123
—
49,123
$
$
85
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Real Estate Intangibles
The following is a summary of our real estate intangibles, excluding those related to ground leases or classified as held for sale, as of the dates indicated (dollars in
thousands):
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
$
$
$
$
December 31, 2021
December 31, 2020
1,681,533 $
53,964
54,131
1,789,628
(1,286,259)
503,369 $
5.5
74,909 $
(45,291)
29,618 $
8.2
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
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
2021
$
Year Ended December 31,
2020
1,680 $
(115,579)
1,710 $
(121,004)
2019
508
(135,047)
The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):
2022
2023
2024
2025
2026
Thereafter
Totals
Assets
Liabilities
$
$
168,534 $
113,105
56,699
22,706
23,009
119,316
503,369 $
7,374
5,253
3,118
2,588
2,075
9,210
29,618
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, 2021, two Seniors Housing Operating, 14 Triple-net and one Outpatient Medical properties, with an aggregate net
real estate balance of $134,097,000, were classified as held for sale. In addition to the real property balances held for sale, net other assets and (liabilities) of $9,876,000 were
included in the Consolidated Balance Sheets related to the held for sale properties. Expected gross sales proceeds related to the held for sale properties are approximately
$171,184,000.
During the year ended December 31, 2021, we recorded impairment charges of $19,567,000 related to four Triple-net properties and one Outpatient Medical property, 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, we recorded $31,540,000 of
impairment charges related to two Seniors Housing Operating properties and two Triple-net properties that were held for use in which the carrying value exceed the estimated
fair value. 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 as 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):
86
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 2021
Year Ended
December 31, 2020
December 31, 2019
$
$
112,837 $
486,369
229,660
828,866
235,375
6,081
1,070,322 $
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
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
2021
Year Ended December 31,
2020
2019
$
$
63,114 $
303,791 $
1,479
8,490
8,665
18,634
44,480 $
11,241
163,800
82,330
257,371
46,420 $
827,961
23,186
403,010
162,761
588,957
239,004
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 generally use our incremental borrowing rate available at lease commencement, underlying collateral for the lease and the ability to borrow against that
collateral on a secured basis 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 a long-term/ post-acute care
operator.
The components of lease expense were as follows for the periods presented (in thousands):
Operating lease cost:
(1)
Real estate lease expense
Non-real estate investment lease expense
Finance lease cost:
Amortization of leased assets
Interest on lease liabilities
Sublease income
Total
(1)
Includes short-term leases which are immaterial.
Classification
2021
Year Ended December 31,
2020
2019
Property operating expenses
General and administrative expenses
Property operating expenses
Interest expense
Rental income
$
$
22,642 $
4,596
8,105
6,574
(8,687)
33,230 $
23,472 $
4,745
8,203
6,411
(4,173)
38,658 $
25,166
1,654
7,795
4,748
(4,173)
35,190
87
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Maturities of lease liabilities as of December 31, 2021 are as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total lease payments
Less: Imputed interest
Total present value of lease liabilities
Operating Leases
Finance Leases
$
$
45,151
45,994
45,856
43,612
43,689
1,159,048
1,383,350
(949,089)
434,261
$
$
8,698
69,774
1,860
1,658
1,696
127,171
210,857
(99,174)
111,683
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, 2021
December 31, 2020
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
Finance leases
Total lease liabilities
Weighted average remaining lease term (years):
Operating leases
Finance leases
Weighted average discount rate:
Operating leases
Finance leases
$
$
$
$
367,068
155,728
522,796
9,627
532,423
434,261
111,683
545,944
$
$
$
$
36.6
19.8
9.72 %
5.06 %
310,017
155,849
465,866
9,624
475,490
311,164
107,102
418,266
46.9
17.7
5.02 %
5.16 %
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
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
$
$
9,081
(6,008)
8,336
(3,578)
9,323 $
(3,918)
8,263
(3,568)
6,397
(5,489)
10,732
(3,401)
Classification
2021
Year Ended December 31,
2020
2019
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 years ended December 31, 2021 and 2020, we reserved for previously recognized straight-line rent
receivable balances of $49,241,000 and $146,508,000 through rental income, relating to leases for which collection of substantially all contractual lease payments was no
longer deemed probable. Included in the 2020 amount
88
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
was $91,025,000 related to Genesis Healthcare ("Genesis") whom noted substantial doubt as to their ability to continue as a going concern.
Leases in our Triple-net and Outpatient Medical portfolios typically include some form of operating expense reimbursement by the tenant. Rental income related to operating
leases and the corresponding 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 periods indicated were as follows (in thousands):
Fixed income from operating leases
Variable lease payments
2021
$
Year Ended December 31,
2020
1,193,837
180,858
$
1,240,012
203,348
$
2019
1,387,836
200,564
The following table sets forth the future minimum lease payments receivable for leases in effect at December 31, 2021 (excluding properties in our Seniors Housing
Operating portfolio and excluding any operating expense reimbursements) (in thousands):
2022
2023
2024
2025
2026
Thereafter
Totals
7. Loans Receivable
$
$
1,136,024
1,132,184
1,117,953
1,109,530
1,097,517
6,701,274
12,294,482
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.
Accrued interest receivable was $26,659,000 and $15,615,000 as of December 31, 2021 and December 31, 2020, 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):
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,
2021
2020
$
$
889,556
194,477
(15,352)
1,068,681
375,060
(151,433)
223,627
1,292,308
$
$
299,430
152,739
(8,797)
443,372
455,508
(215,239)
240,269
683,641
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.
89
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 2021
Year Ended
December 31, 2020
December 31, 2019
$
$
975,018
22,431
997,449
266,822
76,438
343,260
654,189
$
$
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)
During the year ended December 31, 2021, we provided £540 million (approximately $750,330,000 based on the Sterling/ U.S. Dollar exchange rate as of the date of
funding) of senior loan financing and a £30 million delayed facility for working capital and capital expenditures to affiliates of Safanad, a global real estate and private equity
firm, as part of the recapitalization of its investment in HC-One Group. The loan has a five-year term and is fully collateralized by the shares and assets of the HC-One Group,
including its underlying portfolio of owned assets across the U.K. As part of the transaction, we received equity warrants which provide us the right to participate in the capital
appreciation of HC-One Group above a designated price upon liquidation. See Note 12 for additional details.
The following is a summary of our loans by credit loss category (in thousands):
Loan category
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, 2021
2007 - 2018
2007 - 2016
2017
2018
2019
2020
2021
$
$
178,369
205,380
34,397
23,322
22,083
48,712
946,830
1,459,093
$
$
(148,438)
(3,097)
(519)
(351)
(333)
(734)
(13,313)
(166,785)
$
$
29,931
202,283
33,878
22,971
21,750
47,978
933,517
1,292,308
3
17
7
2
4
6
22
61
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 loans. As of December 31, 2021, the total allowance for credit losses balance of
$166,785,000 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):
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)
(2)
Balance at end of year
(1)
Includes $64,075,000 related to the Genesis lease terminations for the twelve months ended December 31, 2021. See Note 9 for further details.
During the year ended December 31, 2020, two loans receivable originated in 2016 to Genesis with an aggregate carrying value of $62,753,000 were transferred to the deteriorated loan pool. In addition, deferred gains of $62,819,000 previously
(2)
recorded in accrued expenses and other liabilities were reclassified to the allowance for credit losses.
2021
Year Ended December 31,
2020
2019
$
$
224,036 $
—
7,270
(64,075)
(446)
—
166,785 $
68,372 $
5,212
94,436
(7,000)
197
62,819
224,036 $
68,372
—
18,690
(18,690)
—
—
68,372
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WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
Interest recognized on deteriorated loans
(2)
2021
Year Ended December 31,
2020
2019
$
$
$
178,369 $
(148,438)
29,931 $
3,185 $
242,319 $
(212,514)
29,805 $
18,937 $
188,018
(68,372)
119,646
16,235
(1)
(2)
Balances include $2,157,000, $3,623,000 and $2,534,000 of loans on non-accrual as of December 31, 2021, 2020 and 2019, respectively.
Represents cash interest recognized in the period.
8. Investments in Unconsolidated Entities
We participate in a number of joint ventures, which generally invest in seniors housing and health care real estate. Our share of the results of operations for these properties
has 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, 2021
December 31, 2020
830,647
44,814
163,582
1,039,043
$
$
653,057
5,629
287,548
946,234
(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. The majority of our
management agreements have initial terms expiring in 2028, plus, if applicable, optional renewal periods ranging from an additional 3 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, 2021, 2020 and 2019, we recognized fees to
Sunrise of $37,052,000, $37,569,000 and $41,200,000, 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, 2021, the aggregate unamortized basis difference of our joint venture investments of $140,187,000 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 related to 12 properties as of December 31, 2021 for the development and construction of certain properties which are classified as in substance real
estate investments and have a carrying value of $317,647,000. We believe that such borrowers typically represent VIEs in accordance with ASC 810. VIEs are required to be
consolidated by their primary beneficiary 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 primary beneficiary of such borrowers, therefore, the loan arrangements were assessed based on among other factors, the amount and timing of expected residual
profits, the estimated fair value of the collateral and the significance of the borrower’s equity in the project. Based on these assessments the arrangements have been classified
as in substance real estate investments. We expect to fund an additional $86,644,000 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, 2021, excluding our share of NOI in unconsolidated entities (dollars in
thousands):
91
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Concentration by relationship:
(1)
(3)
(3)
ProMedica
Sunrise Senior Living
Revera
Avery Healthcare
(4)
HC-One Group
Remaining portfolio
Totals
Number of
Properties
Total
NOI
205 $
110
85
61
1
1,189
1,651 $
228,052
195,148
90,015
84,552
65,942
1,303,844
1,967,553
(2)
Percent of
NOI
12%
10%
5%
4%
3%
66%
100%
(1)
Sunrise and Revera are in our Seniors Housing Operating segment. ProMedica and HC-One Group are in our Triple-net segment. Avery Healthcare is in both the Triple-net and Seniors Housing Operating segments.
(2)
NOI with our top five relationships comprised 36% of total NOI for the year ending December 31, 2020.
(3)
Revera owns a controlling interest in Sunrise. For the year ended December 31, 2021, we recognized $1,051,094,000 of revenue from properties managed by Sunrise.
(4)
In addition to the one property, HC-One Group is the borrower on a £540,000,000 loan. See Note 7 for further detail.
During the quarter ended March 31, 2021, we entered into definitive agreements to substantially exit our operating relationship with Genesis. The status of these transactions
as of December 31, 2021 is as follows:
• We contributed nine Triple-net properties operated by Genesis into an 80/20 joint venture with ProMedica and such properties were added to the existing master lease
with ProMedica.
• Operations have transitioned to regional operators for 39 of the remaining 42 properties, with the three remaining properties expected to be transitioned at a later date.
• We entered into definitive agreements to sell the 42 former Genesis properties to either a joint venture with Aurora Health Network, the new operator and us, or to sell
outright. We have closed on the sale of 25 of these properties. An additional ten properties are classified as held for sale and the remaining seven properties are
expected to close simultaneously with our purchase option exercise in April 2023.
• To effectuate the transition of all 51 properties, we agreed to provide Genesis a lease termination fee of $86 million upon successful transition of all properties, which
will be used to immediately repay indebtedness to us. The debt reduction associated with the lease termination fee was previously reserved as an allowance for credit
losses on loans receivable.
• Additionally, upon achievement of certain restructuring milestones, we will reduce Genesis' indebtedness by an additional $170 million in exchange for an equity
interest in Genesis. Upon conclusion of the aforementioned loan transactions, Genesis will have $167 million of indebtedness to us, exclusive of additional paid in
kind interest, which will carry a maturity date of January 1, 2024. As of December 31, 2021, our total carrying value of Genesis loans receivable, net of allowances for
credit losses, was $154,476,000.
10. Borrowings Under Credit Facilities and Commercial Paper Program
At December 31, 2021, we had a primary unsecured credit facility with a consortium of 34 banks that included a $4,000,000,000 unsecured revolving credit facility, a
$500,000,000 unsecured term credit facility and a $250,000,000 Canadian-denominated unsecured term credit facility. The unsecured revolving credit facility is comprised of a
$1,000,000,000 tranche that matures on June 4, 2023 (none outstanding at December 31, 2021) and a $3,000,000,000 tranche that matures on June 4, 2025 (none outstanding at
December 31, 2021). Both tranches may be extended for two successive terms of six months at our option. The term credit facilities mature on July 19, 2023. 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
$1,250,000,000, 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, 2021). 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 0.775% at December 31,
2021. 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, 2021.
In January 2019, we established an unsecured commercial paper program. Under the terms of the program, we may issue unsecured commercial paper notes with maturities
that vary, but do not exceed 397 days from the date of issue, up to a maximum aggregate face or principal amount outstanding at any time of $1,000,000,000. As of December
31, 2021, there was a balance of $324,935,000 outstanding on the commercial paper program ($325,000,000 in principal outstanding, net of an unamortized discount of
$65,000), which reduces the borrowing capacity of the unsecured revolving credit facility. The notes bear interest at floating rates with a weighted average of 0.41% as of
December 31, 2021 and a weighted average maturity of 18 days as of December 31, 2021.
92
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
2021
Year Ended December 31,
2020
325,000
994,000
384,418
$
$
$
—
2,100,000
497,014
$
$
$
$
$
$
2019
1,588,600
2,880,000
1,376,813
0.33 %
2.09 %
2.84 %
We may repurchase, redeem or refinance senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior
notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to
their terms. The senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of (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, 2021, the annual principal payments due on these debt obligations were as follows (in thousands):
(4,5)
2022
2023
2024
2025
2026
Thereafter
(6,7,8)
Totals
Senior Unsecured Notes
(1,2)
Secured Debt
(1,3)
Totals
$
$
—
695,664
1,350,000
1,260,000
700,000
7,702,297
11,707,961
$
$
582,884
551,716
181,710
160,427
107,327
618,248
2,202,312
$
$
582,884
1,247,380
1,531,710
1,420,427
807,327
8,320,545
13,910,273
(1)
(2)
(3)
(4)
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 Sheets.
Annual interest rates range from 0.80% to 6.50%.
Annual interest rates range from 0.08% to 6.67%. Carrying value of the properties securing the debt totaled $5,062,000,000 at December 31, 2021.
Includes a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $195,664,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2021). The loan matures on July 19,
2023 and bears interest at the Canadian Dealer Offered Rate plus 0.9% (1.34% at December 31, 2021).
(5)
Includes a $500,000,000 unsecured term credit facility. The loan matures on July 19, 2023 and bears interest at LIBOR plus 0.9% (1.00% at December 31, 2021).
Includes a $300,000,000 Canadian-denominated 2.95% senior unsecured notes due 2027 (approximately $234,797,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2021).
Includes a £550,000,000 4.80% senior unsecured notes due 2028 (approximately $742,500,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on December 31, 2021).
Includes a £500,000,000 4.50% senior unsecured notes due 2034 (approximately $675,000,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on December 31, 2021).
(6)
(7)
(8)
The following is a summary of our senior unsecured notes principal activity during the periods presented (dollars in thousands):
December 31, 2021
Year Ended
December 31, 2020
December 31, 2019
Amount
11,509,533
1,750,000
(1,533,752)
(17,820)
11,707,961
$
$
Weighted Avg.
Interest Rate
3.67%
2.57%
2.42%
4.55%
3.67%
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%
Beginning balance
Debt issued
Debt extinguished
Foreign currency
Ending balance
93
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):
December 31, 2021
Year Ended
December 31, 2020
December 31, 2019
Amount
2,378,073
23,569
—
(132,031)
(65,587)
(1,712)
2,202,312
$
$
Weighted Avg.
Interest Rate
3.27%
2.83%
—%
5.86%
3.40%
2.72%
3.03%
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%
Beginning balance
Debt issued
Debt assumed
Debt extinguished
Principal payments
Foreign currency
Ending balance
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, 2021, we were in compliance in all
material respects 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
were used to hedge the variable cash flows associated with variable-rate debt.
Periodically, we enter into and designate interest rate locks to partially hedge the risk of changes in interest 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 $2,562,000 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, 2021, 2020, and 2019 we settled certain net investment hedges generating cash proceeds of $14,505,000, necessitating cash payments
of $1,988,000, and generating cash proceeds of $6,716,000, 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
94
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
Equity Warrants
We received equity warrants through our lending activities further described in Note 7, which were accounted for as loan origination fees. The warrants provide us the right to
participate in the capital appreciation of the underlying company above a designated price upon liquidation and contain net settlement terms qualifying as derivatives under
ASC Topic 815. The warrants are classified within receivables and other assets on our Consolidated Balance Sheets. These warrants are measured at fair value with changes in
fair value being recognized within gain (loss) on derivatives and financial instruments in our Consolidated Statements of Comprehensive Income.
The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):
December 31, 2021
December 31, 2020
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
(1)
At December 31, 2021 the maximum maturity date was November 1, 2023.
$
£
$
£
$
$
$
675,000 $
1,904,708 £
250,000 $
1,050,000 £
25,000 $
26,137 $
80,000 $
625,000
1,340,708
250,000
1,050,000
450,000
26,137
80,000
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 equity warrants recognized in income
Location
Interest expense
Interest expense
Gain (loss) on derivatives and financial
instruments, net
Gain (loss) on derivative and financial instruments designated as hedges
recognized in OCI
OCI
$
$
$
$
December 31, 2021
Year Ended
December 31, 2020
December 31, 2019
23,133
(433)
10,361
79,702
$
$
$
$
22,698
(5,982)
—
(134,369)
$
$
$
$
26,419
(2,310)
—
(131,120)
13. Commitments and Contingencies
At December 31, 2021, we had 15 outstanding letter of credit obligations totaling $34,744,000 and expiring during 2022. At December 31, 2021, we had outstanding
construction in progress of $651,389,000 and were committed to providing additional funds of approximately $1,208,913,000 to complete construction. Additionally, at
December 31, 2021, we had outstanding investments classified as in substance real estate of $317,647,000 and were committed to provide additional funds of $86,644,000 (see
Note 8 for additional information). Purchase obligations include $83,363,000 of contingent purchase obligations to fund capital improvements. Rents due from the tenant 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:
95
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
December 31, 2020
50,000,000
—
—
700,000,000
448,998,438
447,239,477
50,000,000
—
—
700,000,000
419,124,469
417,400,602
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:
Beginning balance
Shares converted
Ending balance
Shares
December 31, 2021
Weighted Avg.
Dividend Rate
—%
—%
—%
—
—
—
Year Ended
December 31, 2020
Shares
Weighted Avg.
Dividend Rate
—%
—%
—%
—
—
—
December 31, 2019
Shares
14,369,965
(14,369,965)
—
Weighted Avg.
Dividend Rate
6.50%
6.50%
—%
During the year ended December 31, 2019, we converted all of the outstanding Series I Preferred Stock. Each share was converted into 0.8857 shares of common stock.
Common Stock
In July 2021, we entered into an amended and restated equity distribution agreement whereby we can offer and sell up to $2,500,000,000 aggregate amount of our common
stock ("ATM Program"). The ATM Program also allows us to enter into forward sale agreements. As of December 31, 2021, we had $1,876,085,000 of remaining capacity
under the ATM Program, which excludes forward sales agreements outstanding for the sale of 5,187,250 shares with maturity dates in 2022 which we expect to physically settle
for cash proceeds of $435,172,000.
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. We did not repurchase any shares of our common stock during the year ended December 31, 2021.
The following is a summary of our common stock issuances during the periods indicated (dollars in thousands, except shares and average price amounts):
96
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Shares Issued
Average Price
Gross Proceeds
Net Proceeds
$
$
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
338 $
29,667,348
171,189
29,838,875
77.18
51.32
78.15
72.33
47.81
86.48
56.21
80.41
$
$
$
$
$
$
447,559
551
613,948
—
—
1,062,058
19,105
12
588,072
—
607,189
19
2,385,683
—
2,385,702
$
$
$
$
$
$
443,929
551
611,645
—
—
1,056,125
19,105
12
576,196
—
595,313
19
2,348,182
—
2,348,201
2019 Dividend reinvestment plan issuances
2019 Option exercises
2019 ATM Program issuances
2019 Preferred stock conversions
2019 Stock incentive plans, net of forfeitures
2019 Totals
2020 Dividend reinvestment plan issuances
2020 Option exercises
2020 ATM Program issuances
2020 Stock incentive plans, net of forfeitures
2020 Totals
2021 Option exercises
2021 ATM Program issuances
2021 Stock incentive plans, net of forfeitures
2021 Totals
Dividends
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):
Common Stock
$
2.44
$
1,037,194
$
2.70
$
1,120,187
$
3.48
$
1,404,977
December 31, 2021
Year Ended
December 31, 2020
December 31, 2019
Per Share
Amount
Per Share
Amount
Per Share
Amount
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 income (loss)
15. Stock Incentive Plans
December 31, 2021
December 31, 2020
$
$
(674,306)
552,990
(121,316)
$
$
(621,792)
473,288
(148,504)
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 five 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.
The following table summarizes compensation expense recognized for the periods presented (in thousands):
97
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2021
Year Ended December 31,
2020
2019
$
$
1,088
16,724
17,812
$
$
—
28,318
28,318
$
$
—
25,047
25,047
Stock options
Restricted stock
Total compensation expense
Stock Options
During the year ended December 31, 2021, we granted 311,306 time-based stock options at a weighted average exercise price of $67.17, all of which were outstanding and
non-vested at December 31, 2021. The grant date fair value of $14.64 was estimated on the date of grant using the Black-Scholes option pricing model. As of December 31,
2021, there was $3,470,000 of total unrecognized compensation expense related to unvested time-based stock options that is expected to be recognized over a weighted-average
period of 3 years. Time-based stock options outstanding at December 31, 2021 have an aggregate intrinsic value of $2,763,000.
During the year ended December 31, 2021, we granted 832,356 performance-based stock options at a weighted average exercise price of $83.44, all of which were
outstanding and non-vested at December 31, 2021. The grant date fair value of $20.31 was estimated on the date of grant using the Black-Scholes option pricing model. These
options have a performance condition based on a Funds From Operations goal measured over the performance period of January 1, 2022 to December 31, 2024. These awards
vest over two years after the end of the performance period, with a portion vesting immediately at the end of the performance period. Compensation expense is measured based
on the probability of achievement of the performance goal and is recognized over both the performance period and vesting period. At December 31, 2021, the performance goal
is not probable of being achieved.
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, 2021, there was $22,055,000 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, 2021:
Non-vested at December 31, 2020
Vested
Granted
Forfeited or expired
Non-vested at December 31, 2021
Defined Contribution Plan
Restricted Stock
Number of Shares (000's)
Weighted-Average
Grant Date Fair Value
405 $
(208)
470
(101)
566 $
69.35
63.21
71.41
79.92
76.28
We sponsor a 401(k) plan which is available to substantially all U.S. employees. We match a percentage of employee contributions up to 5% of an employee's wages and
provide a discretionary profit sharing contribution calculated as a percentage of eligible compensation. We recognized expense of $3,477,000, $3,323,000 and $2,975,000
during the years ended December 31, 2021, 2020 and 2019, respectively, related to this plan.
16. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):
98
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:
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
2021
Year Ended December 31,
2020
2019
336,138 $
(3,020)
333,118 $
424,976
447
1,396
22
1,865
426,841
978,844 $
(6,146)
972,698 $
415,451
519
1,396
21
1,936
417,387
0.79 $
0.78 $
2.36 $
2.33 $
1,232,432
806
1,233,238
401,845
835
1,112
16
1,963
403,808
3.07
3.05
$
$
$
$
As of December 31, 2021, and December 31, 2019, outstanding forward sales agreements for the sale of 5,187,250 shares and 4,935,804 shares, respectively, were not
included in the computation of diluted earnings per share because such forward sales were anti-dilutive for the period. Employee stock options were anti-dilutive for the periods
presented.
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.
Equity Warrants — The fair value of equity warrants is estimated using Level 3 inputs and includes data points such as enterprise value of the underlying HC-One Group real
estate portfolio, marketability discount for private company warrants, dividend yield, volatility and risk-free rate. The enterprise value is driven by projected cash flows,
weighted average cost of capital and a terminal capitalization rate.
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.
99
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on Level 1 publicly available trading prices. The carrying amount of the
variable rate senior unsecured notes approximates fair value because they are interest rate adjustable.
Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 inputs by discounting the estimated future cash flows using the current rates at which
similar loans would be made with similar credit ratings and for the same remaining maturities. The carrying amount of variable rate secured debt approximates fair value
because the borrowings are interest rate adjustable.
Foreign Currency Forward Contracts, Interest Rate Swaps and Cross Currency Swaps — Foreign currency forward contracts, interest rate swaps and cross currency swaps are
recorded in other assets or other liabilities on the balance sheet at fair value that is derived from observable market data, including yield curves and foreign exchange rates.
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 (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
Equity warrants
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, 2021
December 31, 2020
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
877,102 $
191,579
1,608
269,265
77,490
223,627
7,205
41,909
932,552 $
193,999
1,608
269,265
77,490
241,544
7,205
41,909
293,752 $
149,620
4,636
1,545,046
475,997
240,269
4,668
—
324,935 $
324,935 $
— $
11,613,758
2,192,261
39,296
13,139,748
2,252,107
39,296
11,420,790
2,377,930
118,054
153,098 $
153,098 $
116,240 $
297,207
152,211
4,636
1,545,046
475,997
255,724
4,668
—
—
13,093,926
2,451,782
118,054
115,346
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
Equity warrants
Foreign currency forward contracts, interest rate swaps and cross currency swaps,
net asset (liability)
(1)
Totals
(1)
Please see Note 12 for additional information.
Fair Value Measurements as of December 31, 2021
Total
Level 1
Level 2
Level 3
$
$
1,608 $
41,909
(32,091)
11,426 $
1,608 $
—
—
1,608 $
— $
—
(32,091)
(32,091) $
—
41,909
—
41,909
The following table summarizes the change in fair value for equity warrants using unobservable Level 3 inputs for the year ended December 31, 2021 (in thousands):
100
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Beginning balance
Warrants acquired
Mark-to-market adjustment
Foreign currency
Ending balance
Year Ended
December 31, 2021
—
32,419
10,361
(871)
41,909
$
$
The most significant assumptions utilized in the valuation of the equity warrants are the cash flows of the underlying HC-One Group enterprise, as well as the terminal
capitalization rate of 9.5%.
Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, we also have assets and liabilities in 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 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 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 interest income on cash investments recorded in 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. All inter-
segment transactions are eliminated.
Summary information for the reportable segments (which excludes unconsolidated entities) during the years ended December 31, 2021, 2020 and 2019 is as follows (in
thousands):
101
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2021:
Resident fees and services
Rental income
Interest income
Other income
Total revenues
Property operating expenses
Consolidated net operating income (loss)
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, 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
Net income (loss)
Total assets
$
$
$
Seniors Housing
Operating
Triple-net
Outpatient Medical
Non-segment /
Corporate
Total
3,197,223
—
4,231
11,796
3,213,250
2,529,344
683,906
593,565
39,327
—
—
(2,628)
394
22,317
27,132
3,799
—
(39,225)
6,146
(29,280)
(29,280)
18,851,999
$
$
$
—
761,441
124,540
4,603
890,584
49,462
841,122
220,699
6,376
—
(7,333)
—
10,339
26,579
4,189
580,273
—
20,687
135,881
736,841
736,841
9,710,194
$
$
$
102
—
613,254
8,792
13,243
635,289
186,939
448,350
223,302
17,506
—
—
(4)
(3,463)
2,211
2,523
206,275
—
(4,395)
93,348
295,228
295,228
6,204,064
$
$
$
$
—
—
—
2,992
2,992
8,817
(5,825)
—
426,644
126,727
—
52,506
—
—
7,895
(619,597)
(8,713)
—
—
(628,310)
(628,310)
144,068
$
$
3,197,223
1,374,695
137,563
32,634
4,742,115
2,774,562
1,967,553
1,037,566
489,853
126,727
(7,333)
49,874
7,270
51,107
41,739
170,750
(8,713)
(22,933)
235,375
374,479
374,479
34,910,325
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2020:
Resident fees and services
Rental income
Interest income
Other income
Total revenues
Property operating expenses
Consolidated net operating income (loss)
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, 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
Net income (loss)
Total assets
$
$
$
Seniors Housing
Operating
Triple-net
Outpatient Medical
Non-segment /
Corporate
Total
—
733,776
62,625
4,903
801,304
53,183
748,121
232,604
9,477
—
11,049
—
90,563
34,867
22,923
346,638
—
18,462
64,288
429,388
429,388
8,547,482
$
$
$
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
27,853
—
(33,857)
328,249
322,245
322,245
16,044,153
$
$
$
103
—
709,584
5,913
4,522
720,019
214,948
505,071
261,371
17,579
—
—
1,046
3,202
—
8,218
213,655
—
7,312
695,918
916,885
916,885
6,522,880
$
$
$
—
—
—
2,781
2,781
3,381
(600)
—
432,431
128,394
—
33,344
—
—
24,929
(619,698)
(9,968)
—
—
(629,666)
(629,666)
1,369,127
$
$
$
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
32,483,642
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2019:
Resident fees and services
Rental income
Interest income
Other income
Total revenues
Property operating expenses
Consolidated net operating income (loss)
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, 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
Net income (loss)
$
$
Seniors Housing
Operating
Triple-net
Outpatient Medical
Non-segment /
Corporate
Total
3,448,175
—
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
$
$
—
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
$
$
—
684,602
1,195
2,031
687,828
218,793
469,035
241,258
13,411
—
—
—
—
14,062
1,788
198,516
—
7,061
972
206,549
206,549
$
$
—
—
—
3,966
3,966
—
3,966
—
461,273
126,549
—
82,541
—
—
10,705
(677,102)
(2,957)
—
—
(680,059)
(680,059)
$
$
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
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, 2021
(1)
Amount
%
3,766,707
552,650
422,758
4,742,115
79.4 % $
11.7 %
8.9 %
100.0 % $
As of
Year Ended
December 31, 2020
December 31, 2019
Amount
%
Amount
%
3,720,155
451,399
434,413
4,605,967
80.8 % $
9.8 %
9.4 %
100.0 % $
4,205,492
452,698
463,116
5,121,306
82.1 %
8.8 %
9.1 %
100.0 %
December 31, 2021
December 31, 2020
Amount
%
Amount
%
28,595,703
3,938,258
2,376,364
34,910,325
81.9 % $
11.3 %
6.8 %
100.0 % $
26,658,659
3,352,549
2,472,434
32,483,642
82.1 %
10.3 %
7.6 %
100.0 %
(1)
The United States, United Kingdom and Canada represent 75%, 12% and 13%, respectively, of our resident fees and services revenue for the year ended December 31, 2021.
104
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
2021
Year Ended December 31,
2020
2019
$
$
1.4828 $
0.8371
0.1201
2.4400 $
1.6389 $
1.0611
—
2.7000 $
2.6937
0.7863
—
3.4800
(1)
(2)
For the years ended December 31, 2021, 2020 and 2019, includes Section 199A dividends of $1.4828, $1.6389 and $2.6937 respectively.
For the years ended December 31, 2021, 2020 and 2019, includes Unrecaptured Section 1250 Gains of $0.4523, $0.3458 and $0.2835, 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)
2021
Year Ended December 31,
2020
2019
$
$
10,199 $
(1,486)
8,713 $
11,358 $
(1,390)
9,968 $
12,594
(9,637)
2,957
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, 2021, 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, 2021 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, 2021, 2020 and 2019, the foreign tax provision/(benefit) amount included in the consolidated provision for income
taxes was $6,787,000, $5,777,000 and $(3,892,000), respectively.
A reconciliation of income taxes, which is computed by applying the federal corporate tax rate for the years ended December 31, 2021, 2020 and 2019, 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.
2021
Year Ended December 31,
2020
2019
$
$
80,470 $
19,383
(117,931)
1,449
25,342
8,713 $
220,252 $
85,881
(300,196)
1,504
2,527
9,968 $
280,005
3,465
(311,224)
9,260
21,451
2,957
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):
105
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2021
Year Ended December 31,
2020
2019
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)
$
$
(32,616) $
247,015
53,367
(264,321)
3,445 $
(24,085) $
196,634
72,459
(244,938)
70 $
(13,064)
127,525
43,056
(159,057)
(1,540)
On the basis of the evaluations performed as required by the codification, valuation allowances totaling $264,321,000 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
2021
Year Ended December 31,
2020
2019
$
$
244,938 $
19,383
264,321 $
159,057 $
85,881
244,938 $
155,592
3,465
159,057
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, 2018 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, 2017. We are also subject to audit by the Canada Revenue Agency and provincial authorities generally for periods subsequent to
May 2017 related to entities acquired or formed in connection with acquisitions, and by the U.K.’s HM Revenue & Customs for periods subsequent to August 2015 related to
entities acquired or formed in connection with acquisitions.
At December 31, 2021, we had a net operating loss (“NOL”) carryforward related to the REIT of $340,827,000. In addition, we completed the acquisition of Holiday
Retirement, which included NOLs of $382,399,000. 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, 2017 will expire through 2037. 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, 2021 and 2020, we had an NOL carryforward related to Canadian entities of $316,821,000 and $262,345,000 respectively. These Canadian losses have a
20-year carryforward period. At December 31, 2021 and 2020, we had an NOL carryforward related to U.K. entities of $193,998,000 and $207,085,000 respectively. These
U.K. losses do not have a finite carryforward period.
106
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20. Variable Interest Entities
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, 2021
December 31, 2020
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
$
$
$
$
445,776 $
9,964
7,617
463,357 $
163,519 $
1,324
12,394
286,120
463,357 $
454,333
15,547
11,171
481,051
165,671
1,325
14,997
299,058
481,051
(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.
107
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, 2021 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, 2021.
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.
108
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, 2021, 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, 2021, 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, 2021 and 2020, the related consolidated statements of comprehensive income, equity and cash flows for each of the three
years in the period ended December 31, 2021, and the related notes and financial statement schedules listed in the index at Item 15(a) and our report dated February 16, 2022
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 16, 2022
/s/ Ernst & Young LLP
109
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
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, 2022.
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, 2022.
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, 2022.
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, 2022.
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, 2022.
110
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) 1. Our Consolidated Financial Statements are included in Part II, Item 8:
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)
Consolidated Balance Sheets – December 31, 2021 and 2020
Consolidated Statements of Comprehensive Income — Years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Equity — Years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Cash Flows — Years ended December 31, 2021, 2020 and 2019
Notes to Consolidated Financial Statements
2. The following Financial Statement Schedules are included beginning on page 119
III – Real Estate and Accumulated Depreciation
IV – Mortgage Loans on Real Estate
71
73
74
76
77
78
All other schedules have been omitted because they are inapplicable or not required or the information is included elsewhere in the Consolidated Financial Statements
or notes thereto.
3. 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.
111
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).
112
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).
113
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).
4.1(w) Supplemental Indenture No. 19, dated as of March 25, 2021, 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 on March 25, 2021 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(x) Supplemental Indenture No. 20, dated as of June 28, 2021, 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 on June 28, 2021 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(y) Supplemental Indenture No. 21, dated as of November 19, 2021, 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 on November 19, 2021 (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).
10.1(c) Credit Agreement, dated as of June 4, 2021, by and among the Company; the lenders listed therein; KeyBank National Association, as administrative agent and L/C
issuer; BofA Securities, Inc. and JPMorgan Chase Bank, N.A., as joint book runners; BofA Securities, Inc., JPMorgan Chase Bank, N.A., KeyBanc Capital Markets
Inc. and Wells Fargo Securities LLC, as U.S. joint lead arrangers; BofA Securities, Inc., JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and RBC Capital
Markets, as Canadian joint lead arrangers; Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents; Wells Fargo Bank, N.A., MUFG Bank,
Ltd., Barclays Bank PLC, Citibank,
114
N.A., Credit Agricole Corporate and Investment Bank, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Mizuho Bank, Ltd., Morgan Stanley Bank, N.A.,
PNC Bank, National Association and Royal Bank of Canada, as co-documentation agents; BNP Paribas, Capital One, National Association, Citizens Bank, N.A., Fifth
Third Bank, National Association, The Huntington National Bank, Regions Bank, The Bank of Nova Scotia, Sumitomo Mitsui Banking Corporation, TD Bank, NA,
Truist Bank and Bank of Montreal, as co-senior managing agents and Credit Agricole Corporate and Investment Bank, as sustainability structuring agent. (filed with
the Commission as Exhibit 10.1 to the Company’s 8-K filed June 8, 2021 (File No. 001-08923) and incorporated by reference herein).
10.2 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).*
10.3 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).*
10.4 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).*
10.5(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).*
10.5(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).*
10.5(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).*
10.5(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).*
10.6(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).*
10.6(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).*
10.7(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).*
10.7(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).*
10.7(c) Welltower Inc. 2017-2019 Long-Term Incentive Program – Bridge 1 (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed November 7, 2017
(File No. 001-08923), and incorporated herein by reference thereto).*
10.7(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).*
10.7(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).*
10.7(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).*
10.8(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).*
115
10.8(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).*
10.9(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).*
10.9(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).*
10.10 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).*
10.11(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).*
10.11(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).*
10.12 Executive Employment Agreement, dated May 19, 2021, between Welltower Inc. and Shankh Mitra (filed with the Commission as Exhibit 99.1 to the Company's Form
8-K filed May 19, 2021 (File No. 001-08923), and incorporated herein by reference thereto).*
10.13 Employment Offer Letter, dated May 20, 2021, between Welltower Inc. and John F. Burkhart (filed with the Commission as Exhibit 10.3 to the Company's Form 10-Q
filed July 30, 2021 (File No. 001-08923), and incorporated herein by reference thereto).*
10.14 Welltower Inc. Nonqualified Deferred Compensation Plan Amended and Restated Effective January 1, 2022 (filed with the Commission as Exhibit 10.1 to the
Company's Form 10-Q filed November 5, 2021 (File No. 001-08923), and incorporated herein by reference thereto).*
10.15 Equity Distribution Agreement, dated as of May 4, 2021, between Welltower Inc. and the sales agent and forward sellers named therein and the related forward
purchasers (filed with the Commission as Exhibit 1.1 to the Company's Form 8-K filed May 4, 2021 (File No. 001-08923) and incorporated herein by reference
thereto).
10.16 Form of Master Forward Sale Confirmation (filed with the Commission as Exhibit 1.2 to the Company's Form 8-K filed May 4, 2021 (File No. 001-08923) and
incorporated herein by reference thereto).
10.17(a) Welltower Inc. 2021-2023 Long-Term Incentive Program.*
10.17(b) Form of Long-Term Incentive Program Award Agreement under the 2021-2023 Long-Term Incentive Program.*
10.18(a) Welltower Inc. 2022-2024 Long-Term Incentive Program.*
10.18(b) Form of Long-Term Incentive Program Award Agreement under the 2022-2024 Long-Term Incentive Program.*
10.19(a) 2022 Outperformance Program.*
10.19(b) Form of Outperformance Program Award Agreement under the 2022 Outperformance Program.*
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.
116
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, 2021, formatted in Inline XBRL (included in Exhibit 101)
*
Management Contract or Compensatory Plan or Arrangement.
Item 16. Form 10-K Summary
None.
117
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 16, 2022
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 16, 2022 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/ Dennis G. Lopez **
Dennis G. Lopez, Director
/s/ Ade J. Patton **
Ade J. Patton, 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
118
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2021
(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:
Adderbury, UK
Albertville, AL
Alexandria, VA
Alexandria, VA
Altrincham, UK
Amarillo, TX
Amherst, NY
Amherstview, ON
Anderson, SC
Ankeny, IA
Apple Valley, CA
Arlington, TX
Arlington, TX
Arlington, VA
Arlington, VA
Arnprior, ON
Athens, GA
Atlanta, GA
Atlanta, GA
Austin, TX
Austin, TX
Austin, TX
Austin, TX
Bagshot, UK
Bakersfield, CA
Ballston Spa, NY
Banstead, UK
Bartlesville, OK
Basingstoke, UK
Basking Ridge, NJ
Bassett, UK
Bath, UK
Baton Rouge, LA
Baton Rouge, LA
Beaconsfield, UK
Beaconsfield, QC
Beaver, PA
(Dollars in thousands)
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,930
—
—
—
2,020
$
2,144
$
12,549
$
170
8,294
12,225
4,244
719
1,182
473
710
1,129
480
1,660
894
8,385
—
788
—
2,058
2,100
880
1,560
4,200
4,832
4,960
1,127
5,540
6,695
2,339
3,420
2,356
4,874
2,696
790
1,605
5,566
1,149
—
6,203
49,673
11,823
25,187
10,378
11,413
4,446
6,290
10,270
16,639
37,395
12,351
31,198
2,338
6,283
76
14,914
20,603
9,520
21,413
74,850
18,499
29,881
14,334
17,901
55,113
10,608
18,853
37,710
32,304
11,876
29,436
6,356
50,952
17,484
—
1,003
1,246
—
9,485
3,867
1,213
—
799
1,474
322
2,328
4,524
652
16,488
2,529
1,111
—
4,249
2,349
3,188
877
2,231
2,132
8,287
792
173
13,277
1,393
2,581
2,657
10,624
1,160
1,648
361
6,169
2,222
—
$
2,269
$
13,427
$
176
8,294
12,225
4,644
719
1,182
526
712
1,164
486
1,660
894
8,393
77
862
—
2,080
2,206
885
1,574
4,200
4,832
5,446
1,127
5,540
7,380
2,339
3,742
2,395
5,347
2,854
939
1,605
6,102
1,308
—
7,443
49,673
21,308
28,654
11,591
11,413
5,192
7,762
10,557
18,961
41,919
13,003
47,678
4,790
7,320
76
19,141
22,846
12,703
22,276
77,081
20,631
37,682
15,126
18,074
67,705
12,001
21,112
40,328
42,455
12,878
30,935
6,717
56,585
19,547
—
1,874
2,506
5,132
375
8,737
434
1,701
1,362
4,528
1,809
6,306
13,543
488
19,621
987
2,197
4
13,216
6,261
7,012
4,897
14,607
514
11,738
468
794
20,911
486
4,602
11,280
14,635
1,802
8,675
270
15,534
6,705
—
2015
2010
2016
2021
2012
2021
2019
2015
2003
2016
2010
2012
2021
2017
2018
2013
2021
1997
2014
1999
2014
2015
2021
2012
2021
2020
2012
2021
2014
2013
2013
2015
2013
2021
2013
2013
2020
2017
1999
2018
1972
2009
1985
2013
1974
1986
2012
1999
2000
1996
1992
1992
1991
2000
1999
2000
1998
2013
2014
1989
2009
1988
2019
2005
2000
2012
2002
2006
2017
2009
1989
2009
2008
1900
Banbury Road
151 Woodham Dr.
5550 Cardinal Place
5100 Fillmore Avenue
295 Hale Road
4707 Bell Street
1880 Sweet Home Road
4567 Bath Road
311 Simpson Rd.
1275 SW State Street
11825 Apple Valley Rd.
1250 West Pioneer Parkway
2315 Little Road
900 N Taylor Street
900 N Taylor Street
15 Arthur Street
755 Epps Bridge Parkway
1460 S Johnson Ferry Rd.
1000 Lenox Park Blvd NE
12429 Scofield Farms Dr.
11330 Farrah Lane
4310 Bee Caves Road
11279 Taylor Draper Ln
14 - 16 London Road
3201 Columbus
2000 Carlton Hollow Way
Croydon Lane
2633 Mission Drive SE
Grove Road
404 King George Road
111 Burgess Road
Clarks Way, Rush Hill
9351 Siegen Lane
8680 Jefferson Highway
30-34 Station Road
505 Elm Avenue
1225 Western Ave
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:
Beavercreek, OH
Beckenham, UK
Bee Cave, TX
Bellevue, WA
Bellevue, WA
Bellevue, WA
Bellingham, WA
Bellingham, WA
Belmont, CA
Berea, OH
Bethel Park, PA
Bethel Park, PA
Bethesda, MD
Bethesda, MD
Bethesda, MD
Bethesda, MD
Birmingham, UK
Birmingham, UK
Blainville, QC
Bloomfield Hills, MI
Boca Raton, FL
Boise, ID
Boise, ID
Borehamwood, UK
Bothell, WA
Boulder, CO
Bournemouth, UK
Bradenton, FL
Braintree, MA
Brampton, ON
Brandon, MS
Bremerton, WA
Bremerton, WA
Brentwood, UK
Brick, NJ
Brick, NJ
Bridgewater, NJ
Brockport, NY
Brockville, ON
Broken Arrow, OK
Brookfield, WI
Broomfield, CO
Brossard, QC
—
—
—
—
—
—
—
—
—
5,205
—
—
—
—
—
—
—
—
—
—
32,270
—
—
—
—
—
—
—
—
981
21,888
1,820
2,800
6,307
46,352
1,500
1,290
—
—
1,643
3,476
—
—
—
—
151
1,480
2,077
2,000
6,565
1,391
1,625
5,367
1,350
2,994
5,527
4,664
—
46,020
10,196
—
—
—
—
—
—
—
—
4,142
—
—
—
9,674
1,220
2,417
2,145
8,537
1,170
690
1,730
1,500
484
—
1,300
4,140
5,499
11,210
36,713
21,084
19,004
9,036
31,794
19,861
16,292
35,300
—
12,965
11,635
45,309
—
45
212
19,858
13,014
8,902
35,662
111,247
16,067
9,547
41,937
13,439
27,458
42,547
10,136
41,290
59,989
10,241
22,627
6,200
45,869
17,372
17,125
48,201
23,496
7,445
39
12,830
44,547
31,854
—
—
883
3,034
596
10,913
2,351
1,261
2,685
—
—
1,152
1,607
69,731
1,161
926
—
1,739
1,796
1,550
28,777
5,535
921
5,435
7,063
3,010
6,007
1,066
1,614
5,546
2,118
1,825
1,088
6,303
1,957
6,200
3,108
621
1,312
—
361
15,299
3,788
981
21,888
1,832
2,816
6,307
46,352
1,507
1,290
178
—
1,643
3,476
3
3,513
—
—
151
1,620
2,335
2,133
6,991
2,220
1,625
5,912
1,350
3,150
6,070
4,664
100
10,885
1,220
2,417
2,145
9,342
1,218
695
1,774
1,642
532
—
1,300
10,140
5,802
11,210
36,713
21,955
22,022
9,632
42,707
22,205
17,553
37,807
—
12,965
12,787
46,913
66,218
1,206
1,138
19,858
14,613
10,440
37,079
139,598
20,773
10,468
46,827
20,502
30,312
48,011
11,202
42,804
64,846
12,359
24,452
7,288
51,367
19,281
23,320
51,265
23,975
8,709
39
13,191
53,846
35,339
761
202
3,900
7,552
270
418
7,338
1,842
11,319
—
1,294
442
13,229
4,943
472
803
5,322
2,069
3,913
10,468
32,618
3,535
305
13,810
5,500
10,239
13,670
254
12,364
16,071
3,360
2,226
493
7,297
5,996
6,055
14,647
5,765
1,982
2
2,904
23,208
9,920
2019
2019
2016
2013
2021
2021
2010
2020
2013
2020
2019
2021
2013
2016
2013
2013
2013
2015
2013
2013
2018
2019
2021
2012
2015
2013
2013
2021
2013
2015
2010
2020
2021
2016
2010
2010
2010
2015
2015
2021
2012
2013
2015
2020
2021
2014
1998
1905
1986
1996
1999
2002
1900
2019
1998
2009
2018
2009
2009
2006
2016
2008
2009
1994
1999
1905
2003
1988
2003
2008
1987
2007
2009
1999
1999
1985
2013
1998
1999
1999
1999
1996
2002
2013
2009
1989
2475 Lillian Lane
2 Roman Way
14058 A Bee Cave Parkway
15928 NE 8th Street
13350 SE 26th Street
919 109th Avenue North East
4415 Columbine Dr.
848 W Orchard Dr
1010 Alameda de Las Pulgas
45 Sheldon Road
631 McMurray Road
2960 Bethel Church Road
8300 Burdett Road
4925 Battery Lane
8300 Burdett Road
8300 Burdett Road
5 Church Road, Edgbaston
47 Bristol Road South
50 des Chateaux Boulevard
6790 Telegraph Road
6343 Via De Sonrise Del Sur
10250 W Smoke Ranch Drive
7250 Poplar Street
Edgwarebury Lane
10605 NE 185th Street
3955 28th Street
42 Belle Vue Road
1055 301 Blvd E
618 Granite Street
100 Ken Whillans Drive
140 Castlewoods Blvd
966 Oyster Bay Ct
2707 Clare Ave
London Road
515 Jack Martin Blvd
1594 Route 88
2005 Route 22 West
90 West Avenue
1026 Bridlewood Drive
2601 S Elm Place
1105 Davidson Road
400 Summit Blvd
2455 Boulevard Rome
(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:
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
Camberley, UK
Camberley, UK
Camillus, NY
Cardiff, UK
Cardiff by the Sea, CA
Carmel, IN
Carmichael, CA
Carol Stream, IL
Carrollton, TX
Carrollton, GA
Carson City, NV
Cary, NC
Cary, NC
Cedar Falls, IA
Cedar Hill, TX
Cedar Park, TX
Cerritos, CA
Charleston, IL
Charleston, SC
Charlotte, NC
Charlottesville, VA
Chatham, ON
Chattanooga, TN
Chelmsford, MA
Chelmsford, MA
Chertsey, UK
(Dollars in thousands)
—
—
—
18,070
—
—
—
16,974
—
—
—
—
10,339
11,644
9,301
20,268
23,968
—
—
—
—
34,123
—
23,708
—
—
—
—
—
—
—
—
—
—
—
—
—
—
77
—
—
—
—
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
9,974
2,654
1,249
3,191
5,880
2,766
739
1,730
4,280
2,537
1,601
740
6,112
1,259
1,971
1,750
—
552
2,912
5,279
4,651
1,098
3,373
1,040
2,364
9,566
13,880
49,129
43,466
50,817
—
10,437
62,786
19,311
34,354
15,986
8,268
36,482
37,415
41,179
38,971
28,983
36,776
39,168
5,736
7,360
12,566
64,711
50,326
7,698
55,048
31,444
8,183
22,159
45,240
70,008
9,188
24,590
15,664
27,494
740
18,935
17,582
91,468
12,462
14,108
10,951
31,460
25,886
2,361
4,771
5,651
4,423
52,686
723
231
2,801
1,730
—
—
3,196
4,627
4,708
5,127
4,473
5,797
3,242
19,840
5,401
4,153
6,249
3,093
37,589
4,951
1,658
976
1,383
1,168
10,589
742
—
950
7,263
70
882
1,743
21,158
4,327
1,683
6,221
1,683
3,954
3,302
2,850
4,940
3,610
2,616
3,150
—
1,431
2,578
877
768
13,433
2,477
3,044
3,446
3,711
2,590
10,557
5,877
2,082
3,668
5,880
2,766
2,440
1,730
4,280
2,537
1,601
742
6,155
1,259
1,971
1,750
—
552
2,912
5,279
4,831
1,270
3,373
1,131
2,364
10,125
15,918
53,900
49,117
55,240
50,070
11,160
63,017
21,990
35,949
15,986
8,268
38,935
41,817
45,636
43,774
33,176
42,368
41,827
22,353
11,928
16,242
70,960
53,419
43,586
59,999
33,102
9,159
23,542
46,406
80,554
9,930
24,590
16,614
34,757
810
19,817
19,325
112,446
16,617
15,791
17,081
33,143
29,281
3,555
15,467
14,714
9,995
3,810
2,305
10,427
6,253
10,975
2,359
1,391
4,088
12,235
13,164
12,411
8,833
8,723
5,253
3,301
1,830
5,267
22,681
225
4,385
17,754
6,998
548
615
11,968
16,202
344
855
2,534
9,712
120
498
681
21,386
4,259
598
5,975
840
3,624
2014
2012
2012
2016
2016
2012
2016
2013
2013
2019
2019
2015
2013
2013
2013
2013
2015
2016
2014
2019
2013
2011
2021
2019
2012
2013
2021
2021
2013
2018
2021
2020
2016
2016
2021
2021
2021
2018
2015
2021
2003
2021
2015
1883
2003
2002
1985
2018
2014
2015
1990
2005
1999
1996
2018
2003
1998
1998
1989
2006
2017
2016
2016
2007
2009
2017
2014
2001
2010
1996
1986
2009
1999
1997
2020
2015
2002
2001
2005
1987
1991
1965
1998
1997
1995
2018
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
Pembroke Broadway
Fernhill Road
3877 Milton Avenue
127 Cyncoed Road
3535 Manchester Avenue
689 Pro-Med Ln
4717 Engle Road
545 Belmont Lane
2105 North Josey Lane
150 Cottage Landing
2120 E Long
1206 West Chatham Street
300 Kildaire Woods Drive
2603 Orchard Drive
1240 East Pleasant Run
800 C-Bar Ranch Trail
11000 New Falcon Way
300 Lincoln Highway Road
1451 Tobias Gadson Blvd.
5512 Carmel Road
2610 Barracks Road
25 Keil Drive North
7511 Shallowford Road
4 Technology Dr.
20 Summer Street
Bittams Lane
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:
Chesapeake, VA
Chesterfield, MO
Chesterton, IN
Chico, CA
Chorleywood, UK
Chula Vista, CA
Chula Vista, CA
Church Crookham, UK
Cincinnati, OH
Cincinnati, OH
Cincinnati, OH
Citrus Heights, CA
Clackamas, OR
Claremont, CA
Clay, NY
Clearwater, FL
Cleburne, TX
Cohasset, MA
Colleyville, TX
Colorado Springs, CO
Colorado Springs, CO
Colts Neck, NJ
Columbus, IN
Columbus, IN
Columbus, GA
Conroe, TX
Coos Bay, OR
Coos Bay, OR
Coquitlam, BC
Crystal Lake, IL
Crystal Lake, IL
Dallas, TX
Dana Point, CA
Danville, IN
Dardenne Prairie, MO
Decatur, GA
Decatur, GA
Denver, CO
Denver, CO
Denver, CO
Denver, CO
Des Moines, IA
Dix Hills, NY
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,163
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,214
1,857
2,980
1,780
5,636
2,072
4,217
2,591
1,750
1,606
3,345
2,300
1,240
2,430
1,371
1,727
520
2,485
1,050
800
1,142
780
610
1,593
(3)
980
864
1,792
3,047
875
7,678
6,330
5,508
2,236
1,309
1,098
—
1,450
2,910
1,533
1,989
1,196
3,808
20,472
48,366
37,614
13,201
43,191
22,163
29,986
14,215
11,366
2,958
46,717
31,876
3,581
9,928
11,471
4,542
5,369
26,147
17,082
14,756
14,147
14,733
3,190
10,953
36
7,771
7,971
9,852
24,567
12,461
31,875
114,794
51,522
28,738
11,271
13,067
—
19,389
35,838
9,221
21,556
8,847
39,014
2,094
2,023
1,246
1,553
7,738
1,650
1,880
2,307
—
1,036
6,150
3,193
339
2,230
—
361
319
2,421
84
2,269
1,363
3,594
209
1,233
—
408
719
1,004
3,447
2,284
7,996
3,420
2,844
19
236
2,235
31,583
5,386
8,036
108,783
1,039
782
2,592
2,214
1,917
2,980
1,780
6,194
2,186
4,217
2,855
1,750
1,606
3,345
2,300
1,240
2,553
1,371
1,727
520
2,500
1,050
1,034
1,142
1,463
610
1,593
(3)
980
864
1,792
3,337
971
7,678
6,330
5,508
2,236
1,309
1,098
1,946
1,450
2,910
5,402
1,989
1,196
4,092
22,566
50,329
38,860
14,754
50,371
23,699
31,866
16,258
11,366
3,994
52,867
35,069
3,920
12,035
11,471
4,903
5,688
28,553
17,166
16,791
15,510
17,644
3,399
12,186
36
8,179
8,690
10,856
27,724
14,649
39,871
118,214
54,366
28,757
11,507
15,302
29,637
24,775
43,874
114,135
22,595
9,629
41,322
760
13,645
2,603
557
16,297
6,973
1,350
4,334
1,091
579
953
11,820
502
4,104
1,724
230
2,119
8,639
2,313
5,352
521
5,481
1,048
453
2
2,670
1,073
1,346
9,074
4,855
314
23,567
268
73
292
548
9,096
6,526
12,921
15,517
1,782
329
12,177
2021
2013
2020
2021
2013
2013
2021
2014
2019
2021
2021
2010
2021
2013
2019
2021
2006
2013
2016
2013
2021
2010
2010
2021
2021
2009
2020
2020
2013
2013
2021
2015
2021
2021
2021
2021
2013
2012
2012
2019
2020
2021
2013
2004
2001
2019
1984
2007
2003
2018
2014
2019
1998
1986
1997
1999
2001
2014
1985
2007
1998
2013
2001
1985
2002
1998
2000
1998
2010
1996
2006
1990
2001
1988
2013
1994
2021
2010
1987
1998
1997
2007
2014
2017
1990
2003
933 Cedar Road
1880 Clarkson Road
700 Dickinson Rd
2801 Cohasset
High View, Rickmansworth Road
3302 Bonita Road
1290 Santa Rosa Dr
2 Bourley Road
732 Clough Pike Road
4650 East Galbraith Road
8135 Beechmont Ave
7418 Stock Ranch Rd.
14370 SE Oregon Trail Dr
2053 North Towne Avenue
8547 Morgan Road
1100 Ponce de Leon Blvd.
402 S Colonial Drive
125 King Street (Rt 3A)
8100 Precinct Line Road
2105 University Park Boulevard
5820 Flintridge Drive
3 Meridian Circle
2564 Foxpointe Dr.
3660 Central Avenue
6850 River Road
903 Longmire Road
192 Norman Ave.
1855 Ocean Blvd SE
1142 Dufferin Street
751 E Terra Cotta Avenue
965 N. Brighton Circle W
3535 N Hall Street
25411 Sea Bluffs Drive
200 S Arbor Ln
1030 Barathaven Blvd.
341 Winn Way
920 Clairemont Avenue
4901 South Monaco Street
8101 E Mississippi Avenue
1500 Little Raven St
2979 Uinta Street
4610 Douglas Avenue
337 Deer Park 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
Seniors Housing Operating:
Dollard-Des-Ormeaux, QC
Dresher, PA
Dublin, OH
Durham, NC
East Amherst, NY
East Lansing, MI
East Meadow, NY
East Setauket, NY
Eastbourne, UK
Edgbaston, UK
Edgewater, NJ
Edison, NJ
Edmonds, WA
Edmonds, WA
Edmonton, AB
Edmonton, AB
Effingham, IL
Effingham, IL
El Dorado Hills, CA
Encino, CA
Englishtown, NJ
Epsom, UK
Erie, PA
Esher, UK
Evans, GA
Evansville, IN
Everett, WA
Everett, WA
Fairfield, NJ
Fairfield, IL
Fairfield, CA
Fairfield, OH
Fareham, UK
Florence, AL
Flossmoor, IL
Folsom, CA
Folsom, CA
Fort Smith, AR
Fort Wayne, IN
Fort Worth, TX
Fort Worth, TX
Fort Worth, TX
Fort Worth, TX
(Dollars in thousands)
—
8,380
—
—
—
—
—
—
—
—
—
—
—
—
7,373
9,717
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,957
1,900
1,169
3,212
1,638
3,919
69
4,920
4,145
2,720
4,561
1,892
1,650
2,891
1,589
2,063
606
105
—
5,040
690
20,159
1,460
5,783
3,211
1,038
638
1,912
3,120
561
1,460
1,416
3,408
353
1,292
1,490
2,306
—
3,637
4,179
2,538
2,080
1,740
14,431
10,664
25,345
22,108
11,677
17,509
45,991
37,354
33,744
13,969
25,047
32,314
24,449
26,413
29,819
37,293
3,437
336
—
46,255
12,520
34,803
9,162
48,361
17,217
10,570
8,708
14,773
43,868
3,773
14,040
12,933
17,970
13,049
9,496
32,754
10,159
74
42,242
40,328
18,909
27,888
19,799
2,186
1,575
173
1,242
—
1,864
2,184
2,274
4,369
1,959
2,452
4,007
10,016
1,775
4,145
5,066
262
124
57,020
6,801
2,488
6,407
—
9,596
3,286
1,413
697
1,874
2,514
222
7,062
—
2,634
1,628
3,054
185
789
—
729
17,804
—
6,373
857
2,181
1,914
1,169
3,212
1,638
3,919
127
4,986
4,549
2,977
4,564
1,993
1,650
2,891
1,778
2,253
606
105
5,190
5,040
860
22,059
1,460
6,350
3,211
1,038
638
1,912
3,255
561
1,460
1,416
3,755
385
1,362
1,490
2,306
—
3,637
7,131
2,538
2,080
1,740
16,393
12,225
25,518
23,350
11,677
19,373
48,117
39,562
37,709
15,671
27,496
36,220
34,465
28,188
33,775
42,169
3,699
460
51,830
53,056
14,838
39,310
9,162
57,390
20,503
11,983
9,405
16,647
46,247
3,995
21,102
12,933
20,257
14,645
12,480
32,939
10,948
74
42,971
55,180
18,909
34,261
20,656
6,357
4,779
4,560
638
1,871
712
13,856
11,527
11,167
2,248
8,235
12,648
7,191
2,254
10,131
14,233
327
77
3,348
15,509
4,933
5,692
1,596
16,445
783
475
1,025
549
13,407
319
8,669
1,393
4,952
4,839
4,425
7,011
580
2
2,188
6,998
1,157
11,106
3,605
2013
2013
2016
2021
2019
2021
2013
2013
2013
2014
2013
2013
2015
2020
2013
2013
2021
2021
2017
2012
2010
2016
2019
2013
2021
2021
2020
2021
2013
2021
2002
2019
2014
2010
2013
2015
2021
2021
2020
2019
2020
2012
2016
2008
2006
2015
1998
2015
2000
2002
2002
2008
2015
2000
1996
1976
2000
1999
1968
1997
1996
2019
2003
1997
2014
2013
2006
1999
1991
1998
1989
1998
1997
1998
2018
2012
1999
2000
2014
2010
1997
2018
2017
2020
2001
2014
4377 St. Jean Blvd
1650 Susquehanna Road
4175 Stoneridge Lane
205 Emerald Pond Lane
8040 Roll Road
5968 Pakr Lake 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
1101 North Maple Street
505 West Temple Avenue
2020 Town Center West Way
15451 Ventura Boulevard
49 Lasatta Ave
450-458 Reigate Road
4400 East Lake Road
42 Copsem Lane
100 Washington Commons Dr
5050 Lincoln Avenue
524 75th St SE
3915 Colby Avenue N
47 Greenbrook Road
315 Market Street
3350 Cherry Hills St.
520 Patterson Boulevard
Redlands Lane
3275 County Road 47
19715 Governors Highway
1574 Creekside Drive
1801 E. Natoma St.
8420 Phoenix Ave
3715 Union Chapel Rd
3401 Amador Drive
3401 Amador Drive
2151 Green Oaks Road
7001 Bryant Irvin 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:
Franklin, TN
Fremont, CA
Fresno, CA
Fresno, CA
Frome, UK
Fullerton, CA
Fullerton, CA
Gahanna, OH
Gahanna, OH
Gainesville, GA
Garden Grove, CA
Gardnerville, NV
Gig Harbor, WA
Gilbert, AZ
Glen Cove, NY
Glendale, AZ
Glenview, IL
Golden Valley, MN
Granbury, TX
Grand Forks, ND
Grand Prairie, TX
Grand Rapids, MI
Grants Pass, OR
Greenville, SC
Greenville, SC
Gresham, OR
Grimsby, ON
Grosse Pointe Woods, MI
Grosse Pointe Woods, MI
Grove City, OH
Grove City, OH
Guildford, UK
Gurnee, IL
Haddonfield, NJ
Hamburg, NY
Hamilton, OH
Hampshire, UK
Happy Valley, OR
Harrisburg, IL
Haverford, PA
Helena, MT
Hemet, CA
Henderson, NV
—
—
22,982
—
—
—
—
—
—
—
—
—
—
14,200
—
—
—
3,600
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,733
3,400
896
—
2,720
1,964
1,801
772
—
1,908
2,107
1,143
1,560
2,160
4,594
3,114
2,090
1,520
2,040
1,050
1,880
2,179
561
893
—
1,966
636
950
1,430
3,575
1,099
5,361
890
520
971
1,128
4,172
721
858
1,880
1,850
1,877
1,190
13,653
25,300
10,591
25
14,813
19,989
5,878
11,214
26
25,082
3,990
10,831
15,947
28,246
35,236
24,668
69,288
33,513
30,670
12,463
23,827
14,693
8,603
21,242
41
6,255
5,617
13,662
31,777
85,764
4,781
56,494
27,931
16,363
10,909
10,940
26,035
10,369
4,623
33,993
17,091
8,946
11,600
1,784
6,354
25,532
—
2,415
1,696
317
2,117
—
1,954
559
3,137
3,537
2,405
2,634
—
5,809
1,771
784
684
—
1,052
271
1,553
—
311
997
1,010
1,391
1,889
465
6,478
2,750
709
—
1,067
3,420
—
317
2,934
1,954
542
1,311
5,733
3,456
2,459
—
2,977
1,998
1,801
847
—
1,908
2,107
1,164
1,583
2,206
4,688
3,114
2,090
1,634
2,040
1,050
1,880
2,179
561
893
—
1,966
693
950
1,435
3,509
1,099
5,870
945
527
971
1,163
4,577
721
858
1,907
1,850
1,877
1,298
15,437
31,598
34,560
25
16,971
21,651
6,195
13,256
26
27,036
4,549
13,947
19,461
30,605
37,776
24,668
75,097
35,170
31,454
13,147
23,827
15,745
8,874
22,795
41
6,566
6,557
14,672
33,163
87,719
5,246
62,463
30,626
17,065
10,909
11,972
29,050
10,369
4,940
36,900
19,045
9,488
12,803
553
12,971
3,827
1
3,828
6,517
349
4,166
2
797
409
9,630
5,978
10,990
12,588
424
22,200
9,968
8,936
476
371
486
243
659
1
178
1,630
4,137
9,273
8,921
431
17,299
8,578
3,385
1,687
1,446
8,434
1,398
462
10,476
842
335
4,887
2021
2005
2019
2021
2014
2013
2021
2013
2021
2021
2021
1998
2010
2013
2013
2021
2012
2013
2011
2021
2021
2021
2021
2021
2021
2021
2015
2013
2013
2018
2021
2013
2013
2011
2019
2019
2013
2019
2021
2010
2021
2021
2013
1999
1987
2014
1988
2012
2008
1987
1998
2005
2000
1999
1999
1994
2008
1998
2018
2001
2005
2009
2014
2021
2003
1985
1989
1997
1985
1991
2006
2005
2017
1990
2006
2002
2015
2009
2019
2006
1998
2005
2000
1998
1905
2008
314 Cool Springs Blvd.
2860 Country Dr.
5605 North Gates Avenue
6035 N Marks Avenue
Welshmill Lane
2226 North Euclid Street
1510 East Commonwealth Avenue
775 East Johnstown Road
1201 Riva Ridge Ct.
940 South Enota Drive
11848 Valley View Street
1565-A Virginia Ranch Rd.
3213 45th St. Court NW
580 S. Gilbert Road
39 Forest Avenue
8847 W. Glendale Ave
2200 Golf Road
4950 Olson Memorial Highway
100 Watermark Boulevard
3783 S 16th St #112
3013 Doryn Drive
3121 Lake Michigan Dr NW
1001 NE A Street
1180 Haywood Road
11 East August Place
2895 SE Powell Valley Rd.
84 Main Street East
1850 Vernier Road
21260 Mack Avenue
3717 Orders Road
2320 Sonora Drive
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
165 Ron Morse Drive
731 Old Buck Lane
2801 Colonial Drive
800 W Oakland Ave
1555 West Horizon Ridge Parkway
(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:
Hermitage, PA
Hickory, NC
High Point, NC
High Wycombe, UK
Highland Park, IL
Highland Park, IL
Hindhead, UK
Hingham, MA
Holbrook, NY
Honolulu, HI
Hoover, AL
Horley, UK
Houston, TX
Houston, TX
Houston, TX
Houston, TX
Howell, NJ
Huntington Beach, CA
Independence, MO
Independence, MO
Iowa City, IA
Jackson, TN
Jacksonville, FL
Johns Creek, GA
Johnson City, NY
Kalamazoo, MI
Kanata, ON
Kelowna, BC
Kennebunk, ME
Kenner, LA
Kenner, LA
Kennett Square, PA
Kingston, ON
Kingston upon Thames, UK
Kingwood, TX
Kingwood, TX
Kirkland, WA
Kitchener, ON
Klamath Falls, OR
La Palma, CA
Lackawanna, NY
Lafayette Hill, PA
Laguna Hills, CA
(Dollars in thousands)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4,654
—
—
—
—
11,587
—
—
—
—
9,360
—
—
—
—
—
1,084
1,600
1,355
3,567
2,820
2,250
17,852
1,440
3,957
22,918
2,165
2,332
3,830
1,040
1,750
960
1,066
3,808
1,562
3,230
891
1,370
1,205
1,580
1,440
7,531
1,689
2,688
2,700
1,100
809
1,050
1,030
33,063
480
1,683
1,880
1,341
1,335
2,950
1,029
1,750
12,820
14,196
26,405
19,751
13,422
15,832
25,313
48,645
32,292
35,337
49,662
16,059
12,144
55,674
31,965
15,603
15,550
21,577
31,172
14,452
20,425
5,680
11,317
11,991
23,285
11,675
37,252
28,670
13,647
30,204
10,036
11,820
22,946
11,416
46,696
9,777
24,207
4,315
13,939
10,174
16,591
5,815
11,848
75,926
1,253
2,014
1,984
1,566
1,149
1,677
7,655
506
2,843
6,384
1,984
2,243
10,039
6,984
1,707
—
1,685
3,194
—
4,157
331
1,173
22,939
1,624
1,124
8,794
2,574
2,781
6,063
3,889
524
981
2,424
8,683
1,086
2,500
2,404
5,281
1,500
1,422
—
2,542
20,060
1,084
1,600
1,355
3,776
2,820
2,271
19,535
1,444
4,219
22,918
2,165
2,560
3,830
1,040
1,750
960
1,154
3,931
1,562
3,230
891
1,370
6,550
1,588
1,421
7,531
1,775
2,939
3,394
1,100
809
1,104
1,445
36,180
480
1,683
1,880
1,495
1,335
2,996
1,029
1,867
12,820
15,449
28,419
21,735
14,779
16,981
26,969
54,617
32,794
37,918
56,046
18,043
14,159
65,713
38,949
17,310
15,550
23,174
34,243
14,452
24,582
6,011
12,490
29,585
24,901
12,818
46,046
31,158
16,177
35,573
13,925
12,344
23,873
13,425
52,262
10,863
26,707
6,719
19,066
11,674
17,967
5,815
14,273
95,986
497
842
736
2,024
4,093
8,746
7,751
7,071
10,892
1,602
605
3,820
20,771
10,763
2,851
9,286
6,879
11,450
1,558
184
197
401
2,704
7,211
1,959
412
9,271
5,285
15,813
10,932
298
6,811
2,877
7,315
3,485
5,262
2,656
4,706
1,530
5,494
1,033
5,548
24,934
2021
2021
2021
2015
2011
2013
2016
2015
2013
2021
2021
2014
2012
2012
2016
2011
2010
2013
2019
2021
2021
2021
2019
2013
2019
2021
2012
2013
2013
1998
2021
2010
2015
2016
2011
2017
2003
2016
2020
2013
2019
2013
2016
2001
2002
2002
2017
2012
2005
2012
2012
2001
1998
2004
2014
1998
1999
2014
1995
2007
2004
2019
1990
1991
1996
2019
2009
2013
1989
2005
1999
2006
2000
1905
2008
1983
2014
1999
2012
1996
2003
2000
2003
2002
1998
1988
260 S. Buhl Farm Dr.
915 29th Avenue NE
1573 Skeet Club Rd.
The Row Lane End
1651 Richfield Avenue
1601 Green Bay Road
Portsmouth Road
1 Sgt. William B Terry Drive
320 Patchogue Holbrook Road
428 Kawaihae St
3517 Lorna 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
2100 Swope Drive
2423 Walden Road
25 Max Lane Drive
10520 Validus Drive
11405 Medlock Bridge Road
1035 Anna Maria Drive
1700 Bronson Way
70 Stonehaven Drive
863 Leon Avenue
One Huntington Common Drive
1600 Joe Yenni Blvd
1101 Sunset Boulevard
301 Victoria Gardens Dr.
181 Ontario Street
Coombe Lane West
22955 Eastex Freeway
24025 Kingwood Place
6505 Lakeview Dr.
1250 Weber Street E
615 Washburn Way
5321 La Palma Avenue
133 Orchard Place
429 Ridge Pike
24903 Moulton Parkway
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:
Laguna Woods, CA
Laguna Woods, CA
Lake Havasu City, AZ
Lake Zurich, IL
Lakeland, FL
Lancaster, CA
Lancaster, OH
Lancaster, OH
Lancaster, NY
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Laval, QC
Laval, QC
Lawrenceville, GA
Lawrenceville, GA
Leatherhead, UK
Leawood, KS
Lenexa, KS
Lexington, SC
Lincoln, NE
Lincoln, NE
Lincroft, NJ
Linwood, NJ
Litchfield, CT
Little Neck, NY
Livingston, NJ
Lombard, IL
London, UK
London, UK
London, UK
London, ON
London, ON
Longmont, CO
Longueuil, QC
Longview, TX
Lorain, OH
Los Angeles, CA
Los Angeles, CA
Los Angeles, CA
Louisville, KY
Louisville, KY
Louisville, KY
—
—
—
—
—
—
—
—
—
—
—
—
21,048
3,943
—
—
—
—
9,700
—
—
—
—
—
—
—
—
17,010
—
—
—
10,558
—
—
8,405
—
—
55,314
—
—
—
—
—
11,280
9,150
364
1,470
2,416
700
289
1,029
1,262
5,908
1,274
2,412
2,105
2,383
1,500
3,513
4,682
2,490
826
1,843
390
884
9
800
1,240
3,350
8,000
2,130
3,121
7,691
—
1,969
1,445
1,756
3,992
610
1,397
—
3,540
—
1,588
2,274
2,420
76,485
57,842
1,599
9,830
18,028
15,295
1,975
7,069
12,181
36,955
13,748
22,045
32,161
5,968
29,003
23,081
17,835
32,493
26,251
14,519
13,807
9,915
19,958
21,984
17,908
38,461
44,424
59,943
10,027
16,797
—
16,985
13,631
10,572
23,711
5,520
13,005
114,438
19,007
28,050
8,552
9,766
20,816
13,614
12,772
225
3,045
1,763
2,532
102
630
—
4,213
540
1,424
6,585
1,932
1,031
1,092
2,292
7,318
1,652
782
393
722
1,976
2,382
12,051
3,921
1,776
2,055
2,367
2,106
77,131
3,292
2,391
1,253
5,233
446
—
9,535
4,337
6,125
702
1,002
3,432
11,280
9,150
364
1,470
2,416
712
289
1,029
1,262
5,908
1,274
2,412
2,246
2,544
1,529
3,513
4,956
5,610
927
1,843
390
884
148
870
1,308
3,358
8,040
2,218
3,430
8,141
24,542
2,137
1,694
1,756
4,403
610
1,397
—
3,540
71
1,588
2,274
2,420
90,099
70,614
1,824
12,875
19,791
17,815
2,077
7,699
12,181
41,168
14,288
23,469
38,605
7,739
30,005
24,173
19,853
36,691
27,802
15,301
14,200
10,637
21,795
24,296
29,891
42,374
46,160
61,910
12,085
18,453
52,589
20,109
15,773
11,825
28,533
5,966
13,005
123,973
23,344
34,104
9,254
10,768
24,248
21,498
17,105
355
5,205
667
6,340
140
507
1,999
5,193
1,357
2,750
6,850
1,306
8,828
596
2,579
11,196
8,758
428
4,263
329
6,656
7,152
7,354
12,068
6,676
17,480
2,940
2,850
2,600
4,742
3,529
465
7,153
2,187
1,190
38,324
7,657
6,837
271
322
7,719
2016
2016
2020
2011
2021
2010
2021
2021
2019
2020
2020
2020
2018
2018
2013
2021
2015
2012
2013
2021
2010
2021
2013
2010
2010
2010
2015
2013
2014
2015
2017
2015
2015
2021
2015
2006
2019
2011
2012
2016
2021
2021
2012
1987
1986
2009
2007
1999
1999
1996
1981
2011
1999
2001
1997
2005
1989
2008
2007
2017
1999
2006
2001
2000
1990
2002
1997
1998
2000
2017
2009
2012
2016
2020
1953
1950
1986
1989
2007
2018
2009
2001
2006
2000
1998
1999
24441 Calle Sonora
24962 Calle Aragon
320 Lake Havasu Ave. N,
550 America Court
1325 Grasslands Boulevard
43051 15th St. West
800 Becks Knob Road
2750 West Fair Avenue
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
2899 Five Forks Trickum Road
Rectory Lane
4400 West 115th Street
15055 West 87th Street Parkway
203 Old Chapin Rd.
7208 Van Dorn St.
1111 S 70th
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
1486 Richmond Street North
81 Grand Avenue
2210 Main Street
70 Rue Levis
311 E Hawkins Pkwy
5401 North Pointe Pkwy
10475 Wilshire Boulevard
2051 N. Highland Avenue
4061 Grand View Boulevard
620 Valley Coillege Drive
8021 Christian Court
4600 Bowling Boulevard
(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:
Louisville, KY
Louisville, CO
Louisville, CO
Louisville, CO
Louisville, CO
Louisville, CO
Lynnfield, MA
Madison, TN
Mahwah, NJ
Malvern, PA
Manassas, VA
Mansfield, TX
Manteca, CA
Maple Ridge, BC
Marieville, QC
Markham, ON
Marlboro, NJ
Marlow, UK
Marysville, WA
Marysville, OH
Mattoon, IL
Mattoon, IL
McKinney, TX
Medicine Hat, AB
Medina, OH
Melbourne, FL
Melville, NY
Memphis, TN
Memphis, TX
Memphis, TN
Menomonee Falls, WI
Merced, CA
Mesa, AZ
Metairie, LA
Mill Creek, WA
Millbrook, NY
Milton, ON
Milwaukie, OR
Minnetonka, MN
Mission Viejo, CA
Mississauga, ON
Mississauga, ON
Mississauga, ON
(Dollars in thousands)
13,650
—
—
—
—
—
—
—
—
—
—
—
—
9,431
5,805
48,212
—
—
—
—
—
—
—
9,834
—
—
—
—
—
—
—
—
—
14,200
—
—
18,806
—
—
12,977
7,971
25,740
5,814
1,600
2,266
1,042
1,432
1,323
1,630
3,165
2,093
1,605
1,651
2,946
660
1,300
2,875
1,278
3,727
2,222
9,068
620
408
791
505
1,570
1,432
1,309
7,070
4,280
1,800
2,794
1,578
1,020
2,806
950
725
10,150
12,708
4,542
2,391
920
6,600
1,602
3,649
2,548
20,326
13,002
8,396
6,684
7,547
12,001
45,200
7,764
27,249
17,194
15,196
5,251
12,125
11,922
12,113
48,939
14,888
39,720
4,780
764
1,702
2,054
7,389
14,141
10,540
48,257
73,283
17,744
3,093
9,368
6,984
12,444
9,087
27,708
60,274
7,671
25,321
17,777
29,344
52,118
17,996
35,137
15,158
1,331
21,470
18,912
53,555
9,270
36,522
2,944
542
1,187
2,975
1,413
362
5,149
3,241
1,470
5,741
1,778
3,511
2,873
94
203
204
281
1,228
2,413
45,093
8,032
3,383
881
565
2,579
848
4,647
1,873
4,529
4,777
7,974
2,485
1,533
8,717
2,278
5,020
4,452
1,600
1,939
1,156
2,584
1,391
2,332
3,774
2,093
1,608
1,804
2,946
660
1,312
3,325
1,412
4,003
2,268
9,599
620
408
791
505
1,570
1,559
1,731
7,070
4,332
1,800
2,794
1,578
1,020
2,806
950
759
10,179
12,708
4,957
2,391
964
6,600
1,739
3,997
2,762
21,657
34,799
27,194
59,087
16,749
47,821
47,535
8,306
28,433
20,016
16,609
5,613
17,262
14,713
13,449
54,404
16,620
42,700
7,653
858
1,905
2,258
7,670
15,242
12,531
93,350
81,263
21,127
3,974
9,933
9,563
13,292
13,734
29,547
64,774
12,448
32,880
20,262
30,833
60,835
20,137
39,809
19,396
6,796
4,254
2,011
10,262
1,969
5,970
14,223
266
4,835
7,370
542
2,105
7,092
2,479
3,022
18,826
5,362
6,664
3,085
136
246
237
2,546
4,367
1,580
31,049
23,012
7,718
419
436
3,217
347
6,613
7,955
23,660
251
5,599
654
8,530
12,471
5,918
11,575
4,893
2013
2019
2019
2019
2019
2019
2013
2021
2012
2013
2021
2006
2005
2015
2015
2013
2013
2013
2003
2021
2021
2021
2009
2015
2019
2007
2010
2012
2021
2021
2006
2021
1999
2013
2010
2021
2015
2021
2013
2016
2013
2015
2015
2010
2008
2019
1999
1999
2004
2006
1986
2015
1998
1994
2007
1986
2009
2002
1981
2002
2014
1998
1990
1999
2001
2010
1999
2017
2009
2001
1999
1981
2018
2007
1905
2000
2009
1998
1985
2012
1996
2006
1998
1984
1988
1989
6700 Overlook Drive
1336 E Hecla Drive
1800 Plaza Drive
1855 Plaza Drive
282 McCaslin Blvd
1331 E Hecla Drive
55 Salem Street
200 East Webster
15 Edison Road
324 Lancaster Avenue
9852 Fairmont 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.
715 South Walnut Street
2008 South 9th Street
1920 Brookstone Lane
2701 Alma Rd.
223 Park Meadows Drive SE
699 North Huntington St
7300 Watersong Lane
70 Pinelawn Rd
6605 Quail Hollow Road
1645 Massey Road
8722 Winchester Rd
W128 N6900 Northfield Drive
3460 R Street
7231 E. Broadway
3732 West Esplanade Ave. S
14905 Bothell-Everett Hwy
79 Flint Road
611 Farmstead Drive
4017 SE Vineyard Road
18605 Old Excelsior Blvd.
27783 Center Drive
1130 Bough Beeches Boulevard
1490 Rathburn Road East
85 King Street East
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:
Missoula, MT
Mobberley, UK
Mobile, AL
Modesto, CA
Molalla, OR
Monterey, CA
Montgomery, AL
Montgomery, MD
Montgomery Village, MD
Montreal-Nord, QC
Moorestown, NJ
Moose Jaw, SK
Morton Grove, IL
Murphy, TX
Myrtle Beach, SC
Nacogdoches, TX
Naperville, IL
Naperville, IL
Nashville, TN
New Braunfels, TX
New Palestine, IN
Newberg, OR
Newbury, UK
Newmarket, UK
Newtown Square, PA
North Tonawanda, NY
North Tustin, CA
North Wales, PA
Oak Harbor, WA
Oak Park, IL
Oakdale, PA
Oakland, CA
Oakton, VA
Oakville, ON
Oakville, ON
Oakville, ON
Odessa, TX
Ogden, UT
Oklahoma City, OK
Okotoks, AB
Olney, IL
Olney, IL
Omaha, NE
—
—
—
—
—
—
—
—
—
10,733
—
1,556
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,339
8,365
4,388
—
—
—
19,097
—
—
—
550
5,146
737
—
1,210
6,440
524
6,482
3,530
4,407
2,060
582
1,900
1,950
—
390
1,550
1,540
3,900
1,200
2,259
2,806
2,850
4,071
1,930
1,249
2,880
1,968
739
1,250
1,917
3,877
2,250
1,252
2,134
1,271
346
360
5,962
714
897
534
370
7,490
26,665
9,072
293
3,903
29,101
9,760
83,642
18,246
23,719
51,628
12,973
15,724
19,182
69
5,754
12,237
28,204
35,788
19,800
20,626
14,781
12,796
11,902
14,420
7,360
18,059
17,439
7,698
40,383
11,954
47,508
37,576
7,382
29,963
13,754
3,406
6,700
22,911
20,943
4,543
2,053
10,230
1,267
4,043
1,133
—
436
3,319
1,163
14,743
7,432
10,585
7,644
2,229
—
818
—
291
2,388
1,975
4,850
10,508
1,384
479
1,963
2,966
1,933
600
1,195
917
448
3,812
880
3,897
3,951
1,239
4,805
2,433
100
1,376
6,708
2,522
262
181
139
553
5,660
737
—
1,210
6,443
524
6,709
4,291
4,704
2,095
630
1,900
1,950
—
390
1,550
1,593
3,900
2,729
2,259
2,806
3,119
4,476
1,962
1,249
3,044
1,968
739
1,250
1,917
4,117
2,393
1,412
2,320
1,388
346
360
5,962
791
897
534
379
8,754
30,194
10,205
293
4,339
32,417
10,923
98,158
24,917
34,007
59,237
15,154
15,724
20,000
69
6,045
14,625
30,126
40,638
28,779
22,010
15,260
14,490
14,463
16,321
7,960
19,090
18,356
8,146
44,195
12,834
51,165
41,384
8,461
34,582
16,070
3,506
8,076
29,619
23,388
4,805
2,234
10,360
3,529
10,516
400
8
674
9,580
422
19,891
12,188
6,448
15,647
4,257
5,374
3,490
3
2,279
4,625
9,007
14,081
7,250
124
404
2,135
3,871
5,984
1,286
5,188
1,004
1,242
13,444
2,017
15,459
11,982
2,640
10,270
4,306
126
3,392
379
5,575
400
266
3,198
2005
2013
2021
2021
2020
2013
2021
2018
2013
2018
2010
2013
2010
2015
2021
2006
2012
2013
2012
2011
2021
2021
2015
2014
2013
2019
2013
2021
2019
2012
2019
2013
2013
2013
2013
2013
2021
2004
2021
2015
2021
2021
2010
1998
2007
1995
1987
1998
2009
1991
1992
1993
1988
2000
2001
2011
2012
2005
2007
2013
2002
1999
2009
2017
1905
2016
2011
2004
2005
2000
2013
1998
2004
2017
1999
1997
1982
1994
1988
1954
1998
1984
2010
1999
1998
1998
3620 American Way
Barclay Park, Hall Lane
650 University Boulevard South
3420 Shawnee Drive
835 E Main St
1110 Cass St.
5801 EastdaleDrive
3701 International Dr
19310 Club House Road
6700, boulevard Gouin Est
1205 N. Church St
425 4th Avenue NW
5520 N. Lincoln Ave.
304 West FM 544
3736 Robert M. Grissom Pkwy
5902 North St
1936 Brookdale Road
535 West Ogden Avenue
4206 Stammer Place
2294 East Common Street
4400 Terrace Drive
3801 Hayes St.
370 London Road
Jeddah Way
333 S. Newtown Street Rd.
705 Sandra Lane
12291 Newport Avenue
1419 Horsham Rd
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
311 W 4th St
1340 N. Washington Blv.
1404 North West 122nd Street
51 Riverside Gate
1110 North East Street
1301 North East Street
11909 Miracle Hills 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:
Omaha, NE
Orange, CA
Orem, UT
Ormond Beach, FL
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
Oviedo, FL
Painesville, OH
Palestine, TX
Palm Desert, CA
Palo Alto, CA
Paramus, NJ
Paris, IL
Paris, TX
Parma, OH
Paso Robles, CA
Peabody, MA
Pella, IA
Pembroke, ON
Pennington, NJ
Peoria, AZ
Peoria, AZ
Pinole, CA
Pittsburgh, PA
Placentia, CA
Plainview, NY
Plano, TX
Plano, TX
Plattsmouth, NE
Playa Vista, CA
Pleasanton, CA
—
35,157
—
—
13,109
17,163
19,571
6,812
12,969
9,789
12,754
16,129
8,637
4,248
5,534
8,413
16,862
—
—
3,314
—
—
25,050
—
—
—
—
—
5,634
—
—
—
—
—
—
—
—
—
28,960
—
—
—
—
380
8,021
1,395
3,428
1,341
3,454
4,256
2,327
2,963
1,561
3,403
3,411
2,809
1,156
746
1,176
6,746
1,540
3,350
—
180
13,674
—
2,840
688
490
1,533
1,770
2,250
870
1,931
1,380
766
2,006
—
1,580
8,480
3,066
3,120
1,750
250
1,580
—
8,769
64,689
7,983
15,702
15,425
23,309
39,141
7,817
26,424
18,170
31,090
28,335
27,299
9,758
7,800
12,764
45,981
16,269
28,252
—
4,320
52,153
39,639
35,728
5,948
5,452
9,221
8,630
16,071
6,716
9,427
27,620
21,796
10,959
62
18,017
17,076
19,901
59,950
15,390
5,650
40,531
—
236
3,238
792
1,239
4,399
4,423
3,518
—
4,585
3,959
5,033
7,446
4,570
1,383
1,629
1,827
13,725
2,834
2,895
—
1,723
6,490
3,719
2,061
255
360
701
4,096
1,408
417
1,445
2,061
1,572
1,132
—
11,193
6,245
1,595
4,846
1,649
91
3,871
52,086
384
8,021
1,395
3,428
1,484
3,799
4,552
2,327
3,257
1,766
3,723
3,760
3,024
1,281
847
1,313
7,200
1,670
3,350
—
180
13,674
24
2,986
688
490
1,533
1,770
2,380
938
2,029
1,507
766
2,006
—
1,610
8,519
3,182
3,231
1,750
250
1,708
3,676
9,001
67,927
8,775
16,941
19,681
27,387
42,363
7,817
30,715
21,924
35,803
35,432
31,654
11,016
9,328
14,454
59,252
18,973
31,147
—
6,043
58,643
43,334
37,643
6,203
5,812
9,922
12,726
17,349
7,065
10,774
29,554
23,368
12,091
62
29,180
23,282
21,380
64,685
17,039
5,741
44,274
48,410
2,902
6,994
326
354
3,562
10,015
8,147
4,123
5,891
4,142
6,510
7,849
10,593
3,220
2,645
2,827
12,055
5,275
1,042
—
2,239
495
12,722
10,951
386
5,468
1,575
5,206
4,386
1,695
3,274
8,087
4,013
452
1
6,638
6,365
5,988
21,960
2,942
1,860
12,709
4,093
2010
2019
2021
2021
2015
2015
2015
2015
2015
2015
2015
2015
2013
2013
2013
2015
2018
2012
2021
2020
2006
2021
2013
2013
2021
2005
2019
2002
2013
2012
2012
2011
2018
2021
2021
2013
2016
2013
2013
2016
2010
2013
2016
1999
2018
1987
1984
2001
1966
2005
1989
2008
2006
2009
2009
1998
1998
1999
1987
1976
1998
2002
1900
2005
1985
2007
1998
2001
2006
2016
1998
1994
2002
1999
2000
2014
1997
1989
2009
1987
2001
2006
2014
1999
2006
2017
5728 South 108th St.
630 The City Drive South
325 W Center
101 Clyde Morris Blvd
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
43 Aylmer Avenue
1351 Hunt Club Road
140 Darlington Private
10 Vaughan Street
1000, avenue Rockland
9201 Foster
7015 Red Bug Lake Rd.
1504 Jackson Street
1625 W. Spring St.
41-505 Carlotta Drive
2701 El Camino Real
567 Paramus Road
146 Brookstone Lane
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
13619 N 94th Drive
2621 Appian Way
900 Lincoln Club Dr.
1180 N Bradford Avenue
1231 Old Country Road
4800 West Parker Road
3690 Mapleshade Lane
1913 E. Highway 34
5555 Playa Vista Drive
5700 Pleasant Hill Road
(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
Address
Port Perry, ON
Port St. Lucie, FL
Portage, MI
Porterville, CA
Potomac, MD
Princeton, NJ
Purley, UK
Puyallup, WA
Quebec City, QC
Quebec City, QC
Queensbury, NY
Quincy, IL
Rancho Cucamonga, CA
Rancho Palos Verdes, CA
Randolph, NJ
Rantoul, IL
Red Deer, AB
Red Deer, AB
Redding, CA
Redding, CA
Redlands, CA
Regina, SK
Regina, SK
Regina, SK
Rehoboth Beach, DE
Reno, NV
Richmond, VA
Ridgeland, MS
Riviere-du-Loup, QC
Riviere-du-Loup, QC
Robinson, IL
Rockford, IL
Rocky Hill, CT
Rogers, AR
Rohnert Park, CA
Romeoville, IL
Roseburg, OR
Roseville, MN
Roseville, CA
Roseville, CA
Roswell, GA
Roswell, GA
Round Rock, TX
11,261
—
41,415
—
—
—
—
—
7,084
11,614
—
—
—
—
29,300
—
11,913
14,013
25,984
—
—
5,611
5,608
14,657
—
—
—
—
2,540
11,618
—
—
—
—
—
—
—
—
—
—
—
—
—
3,685
8,700
2,880
1,739
6,500
1,730
7,365
1,150
2,420
3,300
1,260
2,328
1,480
5,450
1,540
579
1,247
1,199
4,474
2,639
1,966
1,485
1,244
1,539
960
1,060
6,501
520
592
1,454
660
1,006
1,090
—
6,500
854
979
1,540
16
3,300
1,107
2,080
2,358
26,788
47,230
59,764
14,248
53,379
30,888
35,161
20,776
21,977
28,325
21,744
15,242
10,055
60,034
46,934
4,310
19,283
22,339
36,557
9,188
38,192
21,148
21,036
24,053
24,248
11,440
21,623
7,675
7,601
16,848
3,385
4,728
6,710
39
18,700
12,646
12,388
35,877
23
41,652
9,627
6,486
14,856
4,753
21,390
2,569
942
—
2,424
5,554
4,277
4,902
6,797
1,842
1,012
2,413
7,220
2,635
266
3,188
3,981
2,161
1,102
2,233
2,851
2,652
5,468
9,441
2,796
2,074
2,496
1,780
6,096
282
391
5,638
—
5,057
62,306
2,065
1,628
—
7,069
3,764
3,773
621
4,008
8,700
2,880
1,739
6,500
1,814
8,121
1,156
2,583
3,522
1,273
2,328
2,084
5,450
1,718
579
1,366
1,278
4,474
2,639
1,966
1,728
1,362
1,697
993
1,060
6,501
520
693
1,857
660
1,006
42
—
6,546
6,197
979
1,648
16
3,300
1,114
2,380
2,358
31,218
68,620
62,333
15,190
53,379
33,228
39,959
25,047
26,716
34,900
23,573
16,254
11,864
67,254
49,391
4,576
22,352
26,241
38,718
10,290
40,425
23,756
23,570
29,363
33,656
14,236
23,697
10,171
9,280
22,541
3,667
5,119
13,396
39
23,711
69,609
14,453
37,397
23
48,721
13,384
9,959
15,477
5,743
22,796
7,718
543
1,174
9,526
12,742
7,826
4,468
5,771
4,658
479
4,330
19,773
13,945
331
4,861
5,875
4,583
394
849
7,399
6,713
5,893
8,874
5,589
801
4,139
2,146
5,829
342
382
4,093
2
9,769
22,775
499
10,212
2
10,866
9,130
2,921
528
2015
2008
2019
2021
2018
2011
2012
2010
2018
2018
2015
2021
2013
2012
2013
2021
2015
2015
2019
2021
2021
2013
2013
2015
2010
2004
2021
2003
2015
2015
2021
2021
2003
2021
2005
2006
2021
2013
2021
2016
1997
2012
2021
2009
2010
2017
1999
2021
2001
2005
1985
2000
1987
1999
2005
2001
2004
2006
2002
2004
2004
2017
1985
1988
1999
2004
1992
1999
1998
2007
1997
1956
1993
1999
2003
1996
2012
1986
2010
1984
2002
2003
2000
1999
1997
2007
15987 Simcoe Street
10685 SW Stony Creek Way
3951 W. Milham Ave.
2500 W Henderson Avenue
10800 Potomac Tennis Lane
155 Raymond Road
21 Russell Hill Road
123 Fourth Ave. NW
795, rue Alain
650 and 700, avenue Murray
27 Woodvale Road
823 S 36th St.
9519 Baseline Road
5701 Crestridge Road
648 Route 10 West
300 Twin Lakes Drive
3100 - 22 Street
10 Inglewood Drive
2150 Bechelli Lane
451 Hilltop Drive
10 Terracina Blvd
3651 Albert Street
3105 Hillsdale Street
1801 McIntyre Street
36101 Seaside Blvd
5165 Summit Ridge Court
10300 Three Chopt Rd.
410 Orchard Park
35 des Cedres
230-235 rue Des Chenes
1101 North Monroe Street
3495 McFarland Road
60 Cold Spring Rd.
2501 N 22nd St.
4855 Snyder Lane
605 S Edward Dr.
1800 Hughwood
2555 Snelling Avenue, North
1275 Pleasant Grove Blvd.
5161 Foothills Boulevard
655 Mansell Rd.
75 Magnolia Street
310 Chisholm Trail
(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
Address
Rowlett, TX
Sabre Springs, CA
Sacramento, CA
Sacramento, CA
Saginaw, MI
Saint-Lambert, QC
Salem, OR
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 Ana, CA
Santa Monica, CA
Santa Rosa, CA
Sarasota, FL
Saskatoon, SK
Saskatoon, SK
Savannah, GA
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
Sherman, TX
Sherman, TX
(Dollars in thousands)
—
—
—
—
—
32,254
—
—
—
—
—
—
—
—
—
—
—
28,852
—
—
—
—
—
—
—
—
—
15,820
—
—
3,462
12,645
—
—
—
—
—
—
1,612
—
940
1,300
1,483
10,259
918
1,227
2,876
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
2,077
5,250
2,250
19,660
981
1,382
1,733
2,460
2,500
896
6,204
5,190
27,180
10,670
—
—
—
—
13,180
—
—
1,150
750
6,181
—
1,040
700
1,712
21,319
—
14,781
23,394
16,182
61,903
9,659
8,632
18,100
41,424
15,269
19,691
28,169
58,048
69,930
63,078
27,164
40,328
91,639
77,214
15,566
46,823
27,647
27,392
72,223
8,360
2,690
28,340
26,273
93,373
13,905
17,609
15,089
22,863
3,890
10,591
72,954
9,350
37,291
19,887
25,912
40,240
67,623
26,344
5,221
20,304
223
46,970
2,273
2,395
1,733
11,500
878
800
1,724
11,316
2,228
1,145
2,694
3,286
3,634
7,420
2,213
1,920
13,980
10,905
1,519
5,656
5,559
4,284
10,336
1,595
455
1,412
3,930
3,416
2,049
2,690
1,129
1,628
1,591
695
3,417
2,410
2,043
2,855
1,118
7,500
6,273
1,520
293
2,263
1,612
3,726
952
1,369
1,483
11,308
918
1,227
2,876
5,150
2,977
1,396
6,120
5,045
11,686
5,810
3,016
4,179
5,920
11,800
3,170
3,280
11,966
1,620
8,779
2,220
2,077
5,266
2,292
19,660
1,062
1,636
1,733
2,497
2,500
896
6,271
5,199
10,700
1,150
769
6,763
44
1,110
700
1,712
21,542
43,244
17,042
25,720
17,915
72,354
10,537
9,432
19,824
52,700
17,240
20,800
30,863
61,334
73,564
70,498
29,361
42,248
105,619
88,119
17,035
52,479
33,140
31,676
82,480
9,949
3,145
29,736
30,161
96,789
15,873
20,045
16,218
24,454
5,481
11,286
76,304
11,751
39,304
22,742
27,011
47,158
73,852
27,794
5,514
22,567
941
3,455
5,562
7,335
643
21,029
1,140
1,033
690
12,470
3,676
7,855
8,709
9,718
10,157
22,850
7,917
4,241
23,392
19,413
5,232
15,796
7,834
6,424
18,062
3,969
315
8,523
6,371
520
3,993
5,376
419
7,817
1,961
1,642
25,077
4,659
15,468
4,902
7,811
15,831
14,781
8,080
2,130
376
2020
2016
2010
2013
2021
2015
2020
2020
2021
2016
2014
2011
2010
2017
2019
2012
2013
2019
2016
2016
2013
2012
2016
2016
2016
2012
2021
2013
2016
2021
2013
2013
2021
2013
2008
2019
2013
2010
2010
2015
2010
2012
2016
2013
2005
2021
2019
2017
1978
2004
1997
1989
1999
1997
1980
1990
2013
1986
2011
2015
2016
2001
2003
2017
1998
1923
2005
2002
2002
2001
1992
1997
1992
2004
2001
1985
1999
2004
1905
2001
1998
2014
2004
1962
2005
1995
2008
2009
1997
2006
2006
1986
4205-4209 Dalrock Rd
12515 Springhurst Drive
6350 Riverside Blvd
345 Munroe Street
4141 McCarty Road
1705 Avenue Victoria
4452 Lancaster Dr NE
4050 12th Street Cutoff SE
707 Madrona Avenue 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
3730 South Greenville Street
1312 15th Street
4225 Wayvern Drive
3260 Lake Pointe Boulevard
220 24th Street East
1622 Acadia Drive
6206 Waters Avenue
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
1011 E. Pecan Grove Rd.
3701 N Loy Lake Rd
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:
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
Spokane, WA
Springdale, AR
Springfield, IL
Springfield, MO
St. Albert, AB
St. John's, NL
St. Petersburg, FL
Stephenville, TX
Stittsville, ON
Stockport, UK
Stockton, CA
Strongsville, OH
Strongsville, OH
Stuart, FL
Studio City, CA
Suffield, CT
Sugar Land, TX
Sugar Land, TX
Summerville, SC
Summit, NJ
Sun City West, AZ
Sunninghill, UK
Sunnyvale, CA
Surrey, BC
Surrey, BC
Sutton, UK
Sutton Coldfield, UK
Suwanee, GA
Sway, UK
Swift Current, SK
Sycamore, IL
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,248
4,893
—
—
3,814
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,700
14,459
—
—
—
—
—
—
2,120
7,446
—
3,200
5,510
5,070
3,571
1,851
5,644
1,100
2,820
4,646
6,207
3,200
2,580
1,334
2,950
1,166
1,667
1,145
706
9,261
1,072
1,175
4,369
2,280
1,128
2,577
5,276
4,006
4,439
960
4,272
2,175
3,080
1,250
11,632
5,420
3,605
4,552
4,096
2,807
1,560
4,145
492
1,033
38,116
56,570
—
16,664
51,406
43,297
26,053
10,585
42,155
18,400
21,890
42,705
56,805
25,064
25,342
11,155
24,851
17,675
17,030
17,863
11,765
25,205
3,234
17,397
25,018
5,983
10,940
12,180
24,182
25,307
31,660
31,423
60,493
17,273
14,152
21,778
42,233
41,682
18,818
22,338
14,532
11,313
11,538
15,508
10,119
10,666
3,292
10,866
64,547
2,481
8,663
8,755
3,738
1,885
5,849
5,509
3,808
4,011
7,624
3,156
3,701
842
3,386
1,092
942
2,361
909
14,862
230
2,295
3,677
2,442
656
1,283
730
1,800
2,392
1,298
6,575
744
182
2,999
3,532
3,652
3,255
4,431
3,016
2,057
1,754
3,148
1,444
735
2,160
8,181
3,436
3,340
5,510
5,549
3,962
2,025
6,206
1,109
2,819
4,646
6,207
3,200
2,580
1,334
2,950
1,166
1,667
1,282
759
9,261
1,072
1,344
4,802
2,372
1,128
2,577
5,276
4,124
4,439
960
4,272
2,175
3,080
1,250
12,312
5,420
3,899
4,943
4,485
3,071
1,560
4,595
539
1,033
41,368
66,701
61,111
19,005
60,069
51,573
29,400
12,296
47,442
23,900
25,699
46,716
64,429
28,220
29,043
11,997
28,237
18,767
17,972
20,087
12,621
40,067
3,464
19,523
28,262
8,333
11,596
13,463
24,912
26,989
34,052
32,721
67,068
18,017
14,334
24,777
45,085
45,334
21,779
26,378
17,159
13,106
13,292
18,206
11,516
11,401
11,780
21,397
4,841
6,573
14,220
16,606
9,045
1,900
13,924
9,583
5,465
5,973
12,416
9,240
8,273
374
861
513
477
6,723
2,437
534
251
5,366
9,195
2,868
1,914
497
2,746
8,577
4,866
10,642
13,303
228
4,232
6,565
5,582
14,120
7,749
9,715
2,435
1,858
4,702
5,004
3,495
599
2010
2012
2016
2013
2016
2012
2013
2015
2013
2005
2016
2020
2019
2013
2013
2021
2021
2021
2021
2014
2015
2021
2021
2013
2013
2010
2019
2021
2019
2013
2019
2011
2017
2021
2011
2012
2014
2012
2013
2013
2015
2015
2012
2014
2013
2021
2000
2000
2018
2009
2003
2009
2007
2016
2009
1988
2005
2015
2008
2001
1999
1985
1996
1990
1987
2005
2005
1973
1990
1996
2008
1988
2017
2002
2019
2004
1998
1996
2015
2017
2001
1998
2017
2002
2000
1987
2016
2016
2000
2008
2001
2003
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.
1616 E 30th Avenue
5000 Arkanshire Circle
2601 Montvale Drive
2900 S Jefferson
78C McKenney Avenue
64 Portugal Cove Road
1255 Pasadena Ave South
2305 Lingleville Highway
1340 - 1354 Main Street
1 Dairyground Road
6725 Inglewood
15100 Howe Road
19205 Pearl Rd.
2625 SE Cove Road
4610 Coldwater Canyon Avenue
7 Canal Road
1221 Seventh St
744 Brooks Street
4015 2nd Ave
41 Springfield Avenue
13810 West Sandridge Drive
Bagshot Road
1039 East El Camino Real
16028 83rd Avenue
15501 16th Avenue
123 Westmead Road
134 Jockey Road
4315 Johns Creek Parkway
Sway Place
301 Macoun Drive
1440 Somonauk Street
(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
Address
—
—
—
—
—
—
—
—
—
—
18,236
6,790
12,122
34,959
7,360
4,489
6,853
16,761
5,521
29,541
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,205
1,440
4,170
1,651
1,942
1,403
480
1,610
1,554
2,460
2,927
5,082
2,008
5,132
2,480
1,079
2,513
3,400
1,447
5,304
3,497
1,042
1,787
9,341
830
7,010
1,330
1,500
3,161
2,266
477
1,042
650
1,306
3,160
1,900
1,102
1,758
900
4,000
2,330
1,820
1,406
7,282
—
—
11,991
11,675
73,377
3,151
12,011
7,111
12,379
34,627
13,332
12,564
20,713
25,493
19,620
41,657
7,571
5,364
19,695
32,757
3,918
53,488
73,138
24,393
13,682
28,084
6,179
61,480
21,285
20,861
12,886
13,002
5,305
8,396
5,268
9,934
42,596
28,195
13,455
4,764
17,100
18,000
15,407
19,042
14,328
6,572
98
48
—
863
18,249
8,024
—
401
956
1,636
1,252
1,428
5,064
4,239
4,312
7,465
2,553
955
2,687
4,532
950
6,699
373
1,934
441
2,994
6,685
17,814
2,261
14
1,333
1,122
277
543
328
581
217
584
1,828
750
4,956
5,875
2,362
1,474
991
2,501
—
—
1,205
1,440
4,170
1,651
1,942
1,403
480
1,695
1,554
2,460
3,203
5,562
2,119
5,581
2,688
1,133
2,757
3,820
1,595
5,785
3,504
1,042
1,787
9,341
830
7,010
1,408
1,614
3,161
2,266
477
1,042
650
1,306
3,160
1,908
1,153
1,758
900
4,030
2,330
1,821
1,406
7,772
—
—
11,991
12,538
91,626
11,175
12,011
7,512
13,335
36,178
14,584
13,992
25,501
29,252
23,821
48,673
9,916
6,265
22,138
36,869
4,720
59,706
73,504
26,327
14,123
31,078
12,864
79,294
23,468
20,761
14,219
14,124
5,582
8,939
5,596
10,515
42,813
28,771
15,232
5,514
22,056
23,845
17,769
20,515
15,319
8,583
98
48
1,189
1,947
23,675
284
910
256
4,182
10,593
2,416
2,520
5,045
7,893
4,935
14,584
2,598
1,887
5,712
11,157
1,701
20,655
10,171
785
362
201
3,083
681
10,094
9,723
507
2,302
357
1,536
2,097
436
8,631
5,040
5,232
448
8,984
9,773
5,907
6,956
1,401
6,074
4
3
2019
2019
2016
2021
2019
2021
2011
2010
2019
2019
2015
2015
2015
2015
2015
2013
2013
2013
2013
2013
2016
2021
2021
2021
2012
2021
2010
2010
2021
2019
2021
2019
2006
2021
2015
2013
2013
2021
2005
2005
2010
2010
2020
2015
2021
2021
2019
2011
1987
1983
2020
1999
1999
2005
2011
2009
1900
1988
1999
1964
1971
1982
2002
1973
1987
1988
2016
2001
1997
1999
1997
1987
1986
1984
2005
2001
2004
2016
2007
1998
2014
2015
2005
2012
1987
1989
1990
2006
2001
1974
1997
1968
4120 King Road
6715 Buckley Road
8201 6th Avenue
200 Trade Street
512 Oak St
5415 Cowhorn Creek Road
7950 Bay Branch Dr
1587 Old Freehold Rd
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
3950 Sumac Dr.
59 Harris Road
1 Rivervue Place
5660 N. Kolb Road
2001 West Rudasill Road
8887 South Lewis Ave
9524 East 71st St
7401 Riverside Drive
3791 Crowell Road
1106 East Northline Road
3092 Kendal Lane
5550 Old Jacksonville Hwy.
506 Rice Road
2419 North Euclid Avenue
1133 Black Rock Road
500 Village Drive
8525 Urbandale Ave
799 Yellowstone Dr.
350 Locust Dr.
2261 Tuolumne
10011 NE 118th Ave
201 NW 78th St
2803 West 41st Avenue
13303 SE McGillvray Blvd.
1000 NE 82nd Ave.
Sylvania, OH
Syracuse, NY
Tacoma, WA
Tarboro, NC
Taylor, PA
Texarkana, TX
The Woodlands, TX
Toms River, NJ
Tonawanda, NY
Tonawanda, NY
Toronto, ON
Toronto, ON
Toronto, ON
Toronto, ON
Toronto, ON
Toronto, ON
Toronto, ON
Toronto, ON
Toronto, ON
Toronto, ON
Torrance, CA
Traverse City, MI
Troy, NY
Tuckahoe, NY
Tucson, AZ
Tucson, AZ
Tulsa, OK
Tulsa, OK
Tulsa, OK
Turlock, CA
Tuscola, IL
Twinsburg, OH
Tyler, TX
Tyler, TX
Upland, CA
Upper Providence, PA
Upper St Claire, PA
Urbandale, IA
Vacaville, CA
Vallejo, CA
Vallejo, CA
Vancouver, WA
Vancouver, WA
Vancouver, BC
Vancouver, WA
Vancouver, WA
(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
Address
Vandalia, IL
Vankleek Hill, ON
Vaudreuil, QC
Venice, FL
Vero Beach, FL
Vero Beach, FL
Victoria, BC
Victoria, BC
Victoria, BC
Virginia Water, UK
Visalia, CA
Voorhees, NJ
Voorhees, NJ
Waco, TX
Wall, NJ
Walla Walla, WA
Walnut Creek, CA
Walnut Creek, CA
Washington, DC
Washington Court House, OH
Watchung, NJ
Waterford, MI
Waterville, OH
Waukee, IA
Waxahachie, TX
Wayland, MA
Weatherford, TX
Webster Groves, MO
Wellesley, MA
West Babylon, NY
West Bloomfield, MI
West Chester Township, OH
West Covina, CA
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
Wilmington, NC
Winchester, UK
—
—
7,614
—
—
—
6,210
18,295
17,001
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
16,805
—
—
—
—
—
—
—
—
—
—
—
—
800
389
1,852
13,646
2,930
—
2,856
3,681
2,476
7,106
868
3,700
6
1,383
1,650
1,414
3,700
10,320
4,000
228
1,920
988
2,574
1,870
650
1,207
660
1,790
4,690
3,960
1,040
2,319
111
2,600
1,432
1,323
7,059
5,441
1,440
1,160
2,060
7,899
2,591
2,304
1,630
1,309
1,040
1,538
6,009
4,959
2,960
14,214
96,673
40,070
722
18,038
15,774
15,379
29,937
15,643
24,312
69
10,519
25,350
2,309
12,467
100,890
69,154
2,301
24,880
12,384
44,647
31,878
5,763
27,462
5,261
15,425
77,462
47,085
12,300
47,857
277
7,521
6,684
7,547
28,155
41,420
32,607
3,018
31,296
48,240
16,551
24,768
12,001
10,540
23,338
26,208
29,405
375
691
2,529
5,553
26,757
—
2,324
2,194
2,715
8,715
1,212
2,902
—
501
3,804
90
3,785
18,671
3,549
107
2,394
822
1,050
1,323
356
2,549
402
2,894
916
2,822
1,035
1,288
—
1,990
634
604
7,637
10,339
562
—
103
6,189
2,357
3,224
789
662
2,540
1,994
4,135
800
425
1,952
13,646
2,930
—
3,115
3,990
2,713
5,958
868
3,862
6
1,383
1,694
1,414
3,826
10,320
4,021
228
2,080
988
2,574
1,900
650
1,364
660
1,812
4,690
4,062
1,100
2,319
111
2,658
1,432
1,323
7,703
5,956
1,468
1,160
2,060
8,680
2,873
2,463
1,630
1,309
1,244
1,538
6,595
5,334
3,615
16,643
102,226
66,827
722
20,103
17,659
17,857
39,800
16,855
27,052
69
11,020
29,110
2,399
16,126
119,561
72,682
2,408
27,114
13,206
45,697
33,171
6,119
29,854
5,663
18,297
78,378
49,805
13,275
49,145
277
9,453
7,318
8,151
35,148
51,244
33,141
3,018
31,399
53,648
18,626
27,833
12,790
11,202
25,674
28,202
32,954
417
1,201
3,973
1,765
29,929
15
6,547
5,961
3,714
15,258
521
6,621
5
410
7,859
105
5,818
28,158
20,498
152
7,583
385
2,619
7,878
2,168
9,351
2,110
6,092
17,602
14,009
4,119
2,954
3
3,732
1,348
1,297
10,353
14,279
6,852
1,398
5,821
17,135
3,954
8,036
1,905
1,637
7,606
831
10,155
2021
2013
2015
2021
2007
2021
2013
2013
2015
2012
2021
2012
2021
2021
2011
2021
2013
2016
2013
2021
2011
2021
2020
2012
2007
2013
2006
2011
2015
2013
2013
2020
2021
2013
2019
2019
2013
2013
2015
2013
2014
2013
2014
2013
2019
2019
2013
2021
2012
2003
1987
1975
2019
2003
1989
1974
1988
1990
2002
1987
2013
1905
1997
2003
1987
1998
1988
2004
1995
2000
1999
2018
2007
2008
1997
2007
2012
2012
2003
2000
2019
1985
2002
2000
2007
1987
2006
2013
1998
2014
2008
2013
2002
2015
2016
2004
1991
2010
1607 West Fillmore Street
48 Wall Street
333 rue Querbes
19600 Floridian Club Drive
7955 16th Manor
1700 Waterford Drive
3000 Shelbourne Street
3051 Shelbourne Street
3965 Shelbourne Street
Christ Church Road
4119 W Walnut Avenue
311 Route 73
209 Laurel Rd.
3209 Village Green Driver
2021 Highway 35
1400 Dalles Military Road
2175 Ygnacio Valley Road
1580 Geary Road
5111 Connecticut Avenue NW
500 Glenn Avenue
680 Mountain Boulevard
900 N. Cass Lake Road
1470 Pray Blvd
1650 SE Holiday Crest Circle
1329 Brown St.
285 Commonwealth Road
1818 Martin Drive
45 E Lockwood Avenue
23 & 27 Washington Street
580 Montauk Highway
7005 Pontiac Trail
7129 Gilmore Rd
3601 Holt Avenue
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
Ellesmere Road
Cross Road
11621 New Hampshire Avenue
4770 Clinton Road
35100 Chardon Road
2215 Shipley Street
1402 Hospital Plaza Drive
Stockbridge Road
(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
Depreciation(1)
Year
Acquired
Year Built
Address
Winnipeg, MB
Winnipeg, MB
Winnipeg, MB
Woking, UK
Wolverhampton, UK
Woodland Hills, CA
Wyoming, MI
Yakima, WA
Yonkers, NY
Yorkton, SK
10,577
24,100
11,605
—
—
—
—
—
—
2,808
1,960
1,276
1,317
2,990
2,941
3,400
3,373
1,104
3,962
463
38,612
21,732
15,609
12,523
8,922
20,478
23,195
10,030
50,107
8,760
7,230
3,534
3,955
1,444
1,709
1,551
2,124
677
2,705
1,096
2,242
1,661
1,448
3,172
3,225
3,456
3,373
1,104
4,074
503
45,560
24,881
19,433
13,785
10,347
21,973
25,319
10,707
52,700
9,816
16,190
7,039
4,752
1,646
4,322
7,130
859
334
15,297
2,912
2013
2013
2015
2016
2013
2013
2021
2021
2013
2013
1999
1988
1999
2017
2008
2005
1999
1905
2005
2001
857 Wilkes Avenue
3161 Grant Avenue
125 Portsmouth Boulevard
12 Streets Heath, West End
73 Wergs Road
20461 Ventura Boulevard
2380 Aurora Pond Dr. SW
620 North 34th Avenue
65 Crisfield Street
94 Russell Drive
Seniors Housing Operating Total
$
1,599,522
$
1,958,208
$
15,959,072
$
2,969,135
$
2,110,813
$
18,775,602
$
4,123,782
119
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2021
Description
Encumbrances
Land & Land
Improvements
Building &
Improvements
Triple-net:
Abilene, TX
Abilene, TX
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
Bay City, MI
Bedford, PA
Belmont, CA
Belvidere, NJ
Benbrook, TX
Berkeley, CA
Bethel Park, PA
Bethel Park, PA
Bethesda, MD
Bethlehem, PA
Bethlehem, PA
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11,421
—
—
—
—
—
950
990
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
633
637
3,000
2,001
1,550
3,050
1,700
1,008
2,218
1,191
1,143
$
20,987
$
8,187
13,130
3,002
6,826
6,305
5,025
11,845
4,822
6,543
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
5,972
4,810
4,303
3,148
9,310
1,380
2,619
4,432
23,526
26,191
13,553
32,677
16,007
6,740
6,869
16,887
13,588
Cost Capitalized
Subsequent to
Acquisition
11,660
$
1,089
—
—
—
8,847
—
—
—
—
758
—
—
—
312
—
671
23
—
1,201
—
—
7,430
—
55
—
—
—
—
—
—
1,728
—
2,747
5,008
—
—
—
—
—
Land & Land
Improvements
Building &
Improvements
Accumulated
(1)
Depreciation
Year
Acquired
Year Built
Address
950
990
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
633
637
3,000
2,001
1,550
3,050
1,700
1,008
2,218
1,191
1,143
$
32,647
$
9,276
13,130
3,002
6,826
15,152
5,025
11,845
4,822
6,543
9,628
11,123
18,974
8,801
5,344
3,489
2,626
5,633
5,005
15,671
19,444
7,624
10,571
5,972
4,865
4,303
3,148
9,310
1,380
2,619
4,432
25,254
26,191
16,300
37,685
16,007
6,740
6,869
16,887
13,588
5,156
1,784
9,152
291
639
3,181
476
1,094
467
326
2,799
1,109
1,714
811
2,511
2,099
1,188
951
616
4,763
4,031
861
4,041
333
842
434
338
853
924
274
481
8,439
2,457
4,093
8,017
5,546
662
621
1,485
1,202
2014
2014
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
2011
2019
2011
2016
2007
2018
2018
2018
2018
1998
1985
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
1968
1965
1971
2009
1984
1966
2009
1986
1974
1979
1982
6565 Central Park Boulevard
1250 East N 10th Street
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.
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
2021 Westgate Drive
2029 Westgate 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:
Beverly, MA
Beverly Hills, CA
Bexleyheath, UK
Bingham Farms, MI
Birmingham, UK
Birmingham, UK
Birmingham, UK
Birmingham, UK
Bloomington, IN
Boca Raton, FL
Boca Raton, FL
Bossier City, LA
Boulder, CO
Bournemouth, UK
Boynton Beach, FL
Boynton Beach, FL
Bracknell, UK
Bradenton, FL
Bradenton, FL
Braintree, UK
Braintree, MA
Brecksville, OH
Brick, NJ
Bridgewater, NJ
Bristol, UK
Bristol, UK
Brooks, AB
Broomfield, CO
Bucyrus, OH
Burleson, TX
Burlington, NC
Burlington, NC
Burnaby, BC
Calgary, AB
Calgary, AB
Camp Hill, PA
Canonsburg, PA
Canton, OH
Canton, MI
Cape Coral, FL
Cape Coral, FL
Carlisle, PA
Carmel, IN
Carmel, IN
Carrollton, TX
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7,706
—
—
—
—
5,879
6,000
3,750
781
1,647
1,591
1,462
1,184
670
2,200
2,826
2,009
3,601
2,636
2,138
2,804
4,081
252
480
—
170
990
1,290
1,800
—
—
376
—
1,119
670
280
460
7,623
2,341
4,569
517
911
300
1,399
530
760
978
2,222
1,700
2,010
10,378
13,385
10,807
15,671
14,853
19,092
9,056
10,085
17,423
4,974
4,061
31,198
21,364
18,273
10,201
14,222
11,470
3,298
9,953
13,296
7,157
19,353
25,247
31,810
—
—
4,951
—
2,611
13,985
4,297
5,467
13,844
42,768
70,199
3,596
4,828
2,098
16,966
3,281
18,868
8,204
31,004
19,491
19,549
—
203
1,373
—
1,555
1,951
992
1,063
—
—
—
—
—
—
—
—
491
—
157
1,254
1,290
451
1,330
1,678
22,605
15,566
453
28,980
—
2,457
849
110
1,796
3,820
6,224
—
—
—
—
—
400
—
—
1
—
5,879
6,000
4,104
781
1,802
1,742
1,600
1,296
670
2,200
2,826
2,009
3,601
2,636
2,138
2,804
4,320
252
480
—
170
990
1,290
1,800
4,330
2,309
407
2,566
1,119
670
280
460
8,257
2,536
4,948
517
911
300
1,399
530
760
978
2,222
1,700
2,010
10,378
13,588
11,826
15,671
16,253
20,892
9,910
11,036
17,423
4,974
4,061
31,198
21,364
18,273
10,201
14,222
11,722
3,298
10,110
14,550
8,447
19,804
26,577
33,488
18,275
13,257
5,373
26,414
2,611
16,442
5,146
5,577
15,006
46,393
76,044
3,596
4,828
2,098
16,966
3,281
19,268
8,204
31,004
19,492
19,549
—
2,442
2,222
1,429
2,839
3,596
1,757
1,914
3,136
591
431
—
2,084
1,198
1,018
1,296
1,347
2,221
2,511
2,812
8,447
3,977
7,402
9,305
2,414
1,077
1,079
—
293
4,365
2,397
2,659
3,054
8,976
14,586
339
497
1,264
1,542
1,707
4,808
793
647
3,620
2,784
2021
2014
2014
2018
2015
2015
2015
2015
2015
2018
2018
2021
2018
2019
2018
2018
2014
1996
2012
2014
1997
2014
2011
2011
2015
2017
2014
2016
2018
2011
2003
2003
2014
2014
2014
2018
2018
1998
2018
2002
2012
2018
2021
2015
2014
1874
2000
1996
1999
2010
2010
2010
1997
2015
1994
1984
2018
1990
2017
1991
1984
2017
1995
2000
2009
1968
2011
2000
2001
2017
2019
2000
2018
1976
1988
2000
1997
2006
1971
2001
1970
1986
1998
2005
2000
2009
1987
2018
2015
2016
3 Essex Street
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
2000 Blake Blvd
2800 Palo Parkway
Poole Lane
3600 Old Boynton Road
3001 South Congress Avenue
Crowthorne Road North
6101 Pointe W. Blvd.
2800 60th Avenue West
Meadow Park Tortoiseshell Way
1102 Washington St.
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
12600 Lowell Boulevard
1170 West Mansfield Street
300 Huguley Boulevard
3619 S. Mebane St.
3615 S. Mebane St.
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
940 Walnut Bottom Road
13390 N. Illinois St
12315 Pennsylvania Street
2645 East Trinity Mills 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:
Cary, NC
Castleton, IN
Cedar Rapids, IA
Centerville, OH
Chagrin Falls, OH
Chambersburg, PA
Chapel Hill, NC
Charlottesville, VA
Chatham, VA
Chattanooga, TN
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
Clifton, NJ
Cloquet, MN
Cobham, UK
Colorado Springs, CO
Colorado Springs, CO
Columbia, TN
Columbia, SC
Columbia Heights, MN
Concord, NC
Congleton, UK
Coppell, TX
Corby, UK
Costa Mesa, CA
Coventry, UK
Crawfordsville, IN
Dallastown, PA
Danville, VA
Danville, VA
Daphne, AL
Davenport, IA
Davenport, IA
Dayton, OH
Dearborn Heights, MI
Decatur, GA
(Dollars in thousands)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,500
920
596
920
832
1,373
354
2,542
320
2,085
1,416
1,320
4,515
85
1,145
912
5,207
155
330
520
2,838
3,881
340
9,808
4,280
1,730
341
1,699
825
550
2,036
1,550
1,228
2,050
1,962
720
1,377
410
240
2,880
566
910
1,188
1,197
1,413
4,350
15,137
9,354
3,958
10,837
8,862
2,646
40,746
14,039
11,837
9,871
18,127
8,685
1,395
8,994
14,010
31,715
1,427
2,292
15,733
16,927
34,941
4,660
24,991
62,168
25,493
2,295
2,319
14,175
3,921
5,120
8,386
5,144
19,969
13,830
17,239
16,797
3,954
8,436
8,670
2,017
20,038
5,412
3,394
13,796
1,366
—
16
—
—
—
1,617
—
69
—
—
147
—
—
—
—
—
6,130
—
72
1,863
—
120
3,275
—
693
—
—
163
683
675
376
794
969
1,489
1,426
—
1,073
653
384
—
—
—
—
—
1,500
920
614
920
832
1,373
354
2,542
320
2,085
1,416
1,320
4,515
85
1,145
912
5,207
155
330
520
3,105
3,881
340
10,727
4,280
1,730
341
1,699
825
550
2,228
1,550
1,225
2,050
2,147
720
1,377
410
240
2,880
566
910
1,188
1,197
1,413
5,716
15,137
9,352
3,958
10,837
8,862
4,263
40,746
14,108
11,837
9,871
18,274
8,685
1,395
8,994
14,010
31,715
7,557
2,292
15,805
18,523
34,941
4,780
27,347
62,168
26,186
2,295
2,319
14,338
4,604
5,603
8,762
5,941
20,938
15,134
18,665
16,797
5,027
9,089
9,054
2,017
20,038
5,412
3,394
13,796
3,084
3,259
835
547
1,032
887
1,747
—
2,968
554
978
3,792
810
929
833
1,318
2,807
2,157
1,376
3,069
3,578
935
1,374
6,015
10,121
4,336
1,377
240
3,875
2,048
1,055
2,137
751
7,087
2,724
3,894
1,582
2,291
1,801
2,402
195
1,835
544
375
1,209
1998
2014
2018
2018
2018
2018
2002
2021
2014
2021
2018
2014
2018
1996
2018
2018
2018
1996
1998
2014
2014
2021
2011
2013
2015
2016
1999
2018
2011
2003
2014
2012
2017
2011
2015
2014
2018
2003
2014
2012
2018
2018
2018
2018
2018
1996
2013
1965
1997
1999
1976
1997
2019
2009
1999
1997
2009
1964
1996
1977
2000
1988
1996
1998
2013
1994
2021
2006
2013
2008
2016
1999
1968
2009
1997
1994
2013
1997
1965
2014
2013
1979
1998
1996
2001
1966
2008
1977
1964
1977
111 MacArthur
8405 Clearvista Lake
1940 1st Avenue Northeast
1001 E. Alex Bell Road
8100 East Washington Street
1070 Stouffer Avenue
100 Lanark Rd.
250 Nichols Ct.
100 Rorer Street
1148 Mountain Creek Road
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
782 Valley Road
705 Horizon Circle
Redhill Road
1605 Elm Creek View
2818 Grand Vista Circle
5011 Trotwood Ave.
2601 Forest Drive
3807 Hart Boulevard
2452 Rock Hill Church Rd.
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
27440 County Road 13
815 East Locust Street
3800 Commerce Blvd.
1974 North Fairfield Road
26001 Ford Road
2722 North Decatur Road
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:
Delray Beach, FL
Delray Beach, FL
Denton, TX
Denver, CO
Derby, UK
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
Escondido, CA
Eureka, KS
Everett, WA
Exton, PA
Fairfax, VA
Fairfax, VA
Fairhope, AL
Fall River, MA
Fanwood, NJ
Faribault, MN
Farmington, CT
Farnborough, UK
Fayetteville, NY
Fayetteville, PA
Findlay, OH
Fishers, IN
Fishers, IN
Fishersville, VA
Flint, MI
Florence, NJ
—
—
—
—
—
—
—
—
—
—
—
15,580
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,158
2,125
1,760
3,222
2,359
825
—
1,393
568
1,883
1,476
2,260
1,380
4,071
1,109
1,430
1,620
390
1,810
1,650
410
200
1,344
3,733
1,460
1,520
50
1,400
3,600
1,827
4,099
570
620
2,850
780
1,693
2,036
410
2,150
200
1,500
2,314
788
1,271
300
13,572
11,840
8,305
24,804
8,539
1,778
—
2,911
8,902
13,325
10,659
31,643
34,229
24,438
7,500
13,396
10,049
4,877
14,849
25,167
8,388
2,760
7,073
18,745
7,721
24,024
3,950
5,476
27,267
17,304
17,614
9,119
5,829
55,175
11,539
10,455
5,737
3,962
20,221
1,800
14,500
33,731
2,101
18,050
2,978
—
—
412
—
638
—
16,185
—
—
—
3,168
300
1,093
2,688
—
—
—
141
3,260
1,700
226
2,837
—
—
1,987
785
71
—
342
—
—
112
4,856
1,467
300
—
733
500
—
—
1,001
—
3
—
—
1,158
2,125
1,760
3,222
2,498
825
3,848
1,393
568
1,883
1,476
2,260
1,380
4,455
1,109
1,430
1,620
390
1,810
1,650
410
200
1,344
3,733
1,460
1,520
50
1,400
3,600
1,827
4,099
570
620
2,850
780
1,693
2,228
410
2,150
200
1,500
2,314
788
1,271
300
13,572
11,840
8,717
24,804
9,038
1,778
12,337
2,911
8,902
13,325
13,827
31,943
35,322
26,742
7,500
13,396
10,049
5,018
18,109
26,867
8,614
5,597
7,073
18,745
9,708
24,809
4,021
5,476
27,609
17,304
17,614
9,231
10,685
56,642
11,839
10,455
6,278
4,462
20,221
1,800
15,501
33,731
2,104
18,050
2,978
1,286
1,154
2,584
2,183
1,431
149
372
334
796
1,199
12,675
5,222
9,607
5,100
919
1,268
1,123
2,392
3,437
3,545
2,214
2,599
700
1,642
5,117
8,286
682
3,210
3,009
1,652
1,645
2,418
6,218
15,165
1,887
1,018
1,149
2,293
5,122
1,147
4,766
705
1,143
1,601
1,545
2018
2018
2010
2018
2014
2020
2018
2018
2018
2018
1997
2015
2011
2014
2018
2018
2018
2003
2014
2014
2012
1998
2018
2018
2000
2011
2015
1999
2017
2018
2018
2012
1996
2011
2015
2018
2014
2001
2015
1997
2010
2021
2018
2018
2002
1998
1998
2011
1988
2015
2006
2020
2014
1971
1983
1999
2004
1998
1999
2015
1981
2000
1998
1985
2017
2001
1999
1995
1988
1988
1987
1994
1999
2018
1997
1990
1987
1973
1982
2003
1997
1980
1997
1991
1997
2000
2018
1998
1969
1999
16150 Jog Road
16200 Jog Road
2125 Brinker Rd
290 South Monaco Parkway
Rykneld Road
29601 Amerihost Dr
Former Spring Meadows PH, 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.
1225 Lakeshore Drive
2709 East Danforth Road
15401 North Pennsylvania Avenue
400 Hastings Lane
1940 Nerge Road Elk
1920 Nerge Road
335 Saxony Rd.
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
5125 Highbridge St.
6375 Chambersburg Road
725 Fox Run Rd.
9745 Olympia Dr.
12950 Tablick St
83 Crossroad Lane
3011 North Center Road
901 Broad 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:
Flower Mound, TX
Floyd, VA
Forest City, NC
Fort Collins, CO
Fort Wayne, IN
Fort Worth, TX
Fort Worth, TX
Fredericksburg, VA
Fredericksburg, VA
Ft. Myers, FL
Ft. Myers, FL
Ft. Myers, FL
Gahanna, OH
Gainesville, FL
Gainesville, FL
Galesburg, IL
Gardner, KS
Gastonia, NC
Gastonia, NC
Gastonia, NC
Geneva, IL
Georgetown, TX
Glen Ellyn, IL
Granbury, TX
Granger, IN
Grapevine, TX
Greeley, CO
Greensboro, NC
Greensboro, NC
Greenville, NC
Greenville, SC
Greenville, MI
Greenville, SC
Greenville, SC
Greenwood, IN
Grosse Pointe, MI
Hamilton, NJ
Hanford, UK
Harahan, LA
Harrisburg, PA
Harrow, UK
Hastings, MI
Hatboro, PA
Hatboro, PA
Hatfield, UK
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,800
680
320
3,680
1,770
450
2,781
1,000
1,130
1,110
2,139
2,502
2,432
972
—
1,708
200
470
310
400
1,502
200
1,496
2,550
1,670
2,220
1,077
330
560
290
310
1,490
1,751
947
1,550
867
440
1,382
2,628
569
7,402
1,603
—
1,192
2,924
8,414
3,618
4,497
58,608
19,930
13,615
23,053
20,000
23,202
10,559
18,235
9,741
34,645
8,809
—
3,839
2,800
6,129
3,096
5,029
16,193
2,100
6,634
2,940
21,280
17,648
18,051
2,970
5,507
4,393
4,750
4,341
8,771
1,445
22,770
2,385
4,469
9,829
38,864
12,822
8,266
6,519
28,112
7,608
7,527
375
4
226
—
1,652
5,086
—
2,161
182
—
—
—
—
—
31,503
—
93
77
113
807
—
—
—
777
2,455
261
310
662
1,813
353
394
—
—
—
166
—
—
1,056
—
—
1,477
—
1,771
—
985
1,800
680
320
3,680
1,770
450
2,781
1,000
1,130
1,110
2,139
2,502
2,432
972
2,374
1,708
200
470
310
400
1,502
200
1,496
2,550
1,670
2,220
1,077
330
560
290
310
1,490
1,751
947
1,550
867
440
1,512
2,628
569
8,100
1,603
—
1,192
3,200
8,789
3,622
4,723
58,608
21,582
18,701
23,053
22,161
23,384
10,559
18,235
9,741
34,645
8,809
29,129
3,839
2,893
6,206
3,209
5,836
16,193
2,100
6,634
3,717
23,735
17,909
18,361
3,632
7,320
4,746
5,144
4,341
8,771
1,445
22,936
2,385
4,469
10,755
38,864
12,822
9,045
6,519
29,883
7,608
8,236
2,331
894
2,218
9,511
6,308
6,010
—
8,991
4,681
1,011
1,708
1,104
375
299
1,853
364
520
2,971
1,568
2,506
1,511
1,328
689
1,155
6,867
2,902
2,413
1,750
3,224
2,205
2,253
285
840
232
6,726
240
2,313
2,390
—
1,191
1,769
358
8,489
964
1,844
2011
2018
2003
2015
2010
2010
2021
2005
2014
2018
2018
2018
2021
2021
2016
2018
2015
2003
2003
2003
2018
1997
2018
2012
2010
2013
2017
2003
2003
2003
2004
2020
2018
2018
2010
2018
2001
2013
2021
2018
2014
2020
2011
2018
2013
2012
1979
1999
2007
2008
2011
2015
1999
2010
1999
1990
2000
2017
2000
2018
1964
2000
1998
1994
1996
2000
1997
2001
1996
2009
2014
2009
1996
1997
1998
1997
2016
1966
1976
2007
1964
1998
2012
2020
2000
2001
2002
1996
2000
2012
4141 Long Prairie Road
237 Franklin Pike Rd SE
493 Piney Ridge Rd.
4750 Pleasant Oak Drive
611 W County Line Rd South
425 Alabama Ave.
8600 N Riverside Dr
3500 Meekins Dr.
140 Brimley Drive
15950 McGregor Boulevard
1600 Matthew Drive
13881 Eagle Ridge Drive
5435 Morse Road
1415 Fort Clarke Blvd
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.
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.
2715 Dickinson Ave.
23 Southpointe Dr.
1515 Meijer Dr
600 Sulphur Springs Road
601 Sulphur Springs Road
2339 South SR 135
21401 Mack Avenue
1645 Whitehorse-Mercerville Rd.
Bankhouse Road
7904 Jefferson Hwy
2625 Ailanthus Lane
177 Preston Hill
1821 N. East St
3485 Davisville Road
779 West County Line Road
St Albans Road East
(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:
Hattiesburg, MS
Haverhill, MA
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
Holton, KS
Homewood, IL
Howard, WI
Huntingdon Valley, PA
Huntsville, AL
Hutchinson, KS
Independence, VA
Indianapolis, IN
Jackson, NJ
Jacksonville, FL
Jacksonville, FL
Jacksonville, FL
Jefferson Hills, PA
Jersey Shore, PA
Kansas City, KS
Katy, TX
Kensington, MD
Kenwood, OH
Kettering, OH
King of Prussia, PA
King of Prussia, PA
Kingsford, MI
Kingsport, TN
Kirkstall, UK
Knoxville, TN
Kokomo, IN
Lacey, WA
Lafayette, IN
Lafayette, CO
Lakeway, TX
Lakewood, CO
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
450
5,519
1,500
1,900
40
290
560
370
330
430
940
1,792
2,159
4,033
40
2,395
579
1,150
1,382
600
1,082
870
6,500
2,932
750
—
2,265
600
700
1,778
1,753
821
1,229
720
1,205
1,362
2,123
2,437
2,207
710
2,582
670
1,420
5,142
2,160
13,469
19,554
9,943
24,353
4,210
987
4,443
2,185
3,395
4,143
3,721
6,339
4,194
24,280
7,460
7,649
32,122
3,728
14,286
10,590
6,767
14,688
26,405
14,269
25,231
26,381
13,614
8,104
20,115
22,622
18,621
11,040
4,701
14,776
4,725
10,594
33,130
9,414
12,849
16,044
18,175
16,833
20,192
23,203
28,091
—
—
540
3,231
29
392
1,406
994
142
1,001
4,983
—
599
—
13
—
5,943
—
—
774
7
—
4,240
—
163
1,911
—
—
—
—
—
—
—
—
—
—
—
1,117
—
—
—
1
—
—
62
450
5,519
1,500
2,079
40
290
560
370
330
430
940
1,792
2,363
4,033
40
2,395
684
1,150
1,382
600
1,082
870
6,500
2,932
750
1,691
2,265
600
700
1,778
1,753
821
1,229
720
1,205
1,362
2,123
2,666
2,207
710
2,582
670
1,420
5,142
2,160
13,469
19,554
10,483
27,405
4,239
1,379
5,849
3,179
3,537
5,144
8,704
6,339
4,589
24,280
7,473
7,649
37,960
3,728
14,286
11,364
6,774
14,688
30,645
14,269
25,394
26,601
13,614
8,104
20,115
22,622
18,621
11,040
4,701
14,776
4,725
10,594
33,130
10,302
12,849
16,044
18,175
16,834
20,192
23,203
28,153
3,834
—
2,742
6,451
743
719
2,572
1,324
1,689
2,034
2,941
830
1,125
2,141
1,222
690
4,653
501
437
4,843
1,612
3,175
6,848
465
3,623
3,782
1,847
704
3,458
3,026
1,674
1,026
497
1,423
538
1,025
—
2,295
606
3,461
1,657
3,364
3,714
5,439
5,775
2010
2021
2011
2013
2015
2003
2003
2003
2003
2003
2002
2018
2013
2018
2015
2018
2017
2018
2021
2004
2018
2014
2012
2021
2013
2013
2018
2018
2015
2017
2018
2018
2018
2018
2018
2018
2021
2013
2021
2014
2018
2015
2015
2007
2014
2009
2018
2006
2011
1996
1994
2000
1999
1994
1998
1999
1983
2013
1971
1996
1989
2016
1993
2001
1997
1998
2014
2001
1999
2014
2014
1997
1973
2015
2015
2002
2000
1977
1995
1990
1968
2019
2009
2001
2014
2012
2014
2015
2011
2010
217 Methodist Hospital Blvd
10 Residences Way
4131 Andrew Jackson Parkway
165 Reculver Road
400 Kansas Ave
2530 16th St. N.E.
1568 Skeet Club Rd.
1564 Skeet Club Rd.
201 Hartley Dr.
1560 Skeet Club Rd.
9160 S. University Blvd.
1141 Northview Drive
Tudor Road
600 W Ogden Avenue
410 Juniper Dr
940 Maple Avenue
2790 Elm Tree Hill
3430 Huntingdon Pike
4801 Whitesport Cir SW
2416 Brentwood
400 S Independence Ave
1635 N Arlington Avenue
2 Kathleen Drive
3455 San Pablo Rd S
5939 Roosevelt Boulevard
4000 San Pablo Parkway
380 Wray Large Road
1008 Thompson Street
8900 Parallel Parkway
24802 Kingsland Boulevard
4301 Knowles Avenue
4580 East Galbraith Road
3313 Wilmington Pike
620 West Valley Forge Road
600 West Valley Forge Road
1225 Woodward Avenue
915 Holston Hills Dr.
29 Broad Lane
8501 S. Northshore Drive
2200 S. Dixon Rd
4524 Intelco Loop SE
2402 South Street
329 Exempla Circle
2000 Medical Dr
7395 West Eastman Place
(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:
Lakewood Ranch, FL
Lakewood Ranch, FL
Lancaster, PA
Lancaster, PA
Lapeer, MI
Largo, FL
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
Lititz, PA
Livermore, CA
Livonia, MI
Longwood, FL
Los Angeles, CA
Louisburg, KS
Loxley, UK
Lutherville, MD
Lynchburg, VA
Lynchburg, VA
Lynnwood, WA
Macungie, PA
Manalapan, NJ
Manassas, VA
Mankato, MN
Mansfield, TX
Marietta, PA
Marietta, OH
Marietta, GA
Marion, IN
Marion, IN
Marion, OH
Marlborough, UK
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
650
1,000
1,680
1,011
1,827
1,166
1,171
250
728
1,214
290
1,974
3,060
190
1,214
480
200
6,500
2,993
1,382
500
470
1,200
4,100
985
1,260
—
280
1,369
1,100
340
2,904
2,302
—
900
750
1,460
—
1,050
1,149
2,406
720
990
2,768
2,677
6,714
22,388
14,039
7,502
8,794
3,426
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
16,451
17,579
13,836
24,996
13,555
6,445
11,430
4,320
15,668
19,786
16,114
3,696
5,632
—
22,624
7,446
32,104
—
13,633
9,373
12,229
9,604
9,190
17,415
6,822
2,010
314
—
—
—
—
—
64
—
—
926
1,434
2,589
920
340
152
1,153
2,612
—
2,989
184
600
—
79
—
—
1,058
44
2,404
1,744
66
—
—
27,041
760
1,103
300
21,163
562
—
—
—
824
—
897
650
1,000
1,680
1,011
1,827
1,166
1,171
250
728
1,214
290
2,160
3,348
190
1,315
480
200
6,500
2,993
1,512
500
470
1,200
4,100
985
1,260
—
280
1,499
1,100
340
2,904
2,302
2,558
900
750
1,460
2,807
1,050
1,149
2,406
720
990
2,768
2,930
8,724
22,702
14,039
7,502
8,794
3,426
14,420
8,780
10,367
5,960
19,061
14,487
26,711
4,668
2,989
1,922
5,053
42,636
11,546
33,183
16,635
18,179
13,836
25,075
13,555
6,445
12,488
4,364
17,942
21,530
16,180
3,696
5,632
24,483
23,384
8,549
32,404
18,356
14,195
9,373
12,229
9,604
10,014
17,415
7,466
2,153
5,594
1,954
708
453
418
1,314
2,150
1,035
667
9,773
2,511
6,276
2,150
771
375
2,475
11,807
1,033
5,751
3,211
3,654
1,929
4,544
1,304
1,932
4,196
721
3,965
6,259
3,403
345
533
—
6,395
3,691
5,119
—
2,302
867
1,106
2,750
3,048
2,050
1,426
2011
2012
2015
2018
2020
2018
2018
2012
2018
2018
2002
2015
2012
2003
2014
2015
2002
2011
2018
2015
2014
2014
2015
2014
2018
2011
2008
2015
2013
2011
2014
2018
2018
2017
2011
2003
2015
2017
2015
2018
2018
2014
2014
2018
2014
2012
2005
2017
1966
2004
1997
1980
1996
1998
1980
1998
2013
2010
1998
2003
1994
1997
2001
1988
2012
1999
2013
2016
1974
1999
2011
1971
1996
2008
1988
2013
1978
1987
2018
2001
1996
2006
2019
1999
1977
1980
2012
1976
2004
1999
8230 Nature's Way
8220 Natures Way
31 Millersville Road
100 Abbeyville Road
101 Devonshire Dr
300 Highland Avenue Northeast
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
2041 NC-210 N
54 Red Mulberry Way
80 West Millport Road
35 Fenton Street
32500 Seven Mile Road
425 South Ronald Reagan Boulevard
330 North Hayworth Avenue
202 Rogers St
Loxley Road
515 Brightfield Road
189 Monica Blvd
2200 Landover Place
3701 188th Street
6043 Lower Macungie Road
445 Route 9 South
8341 Barrett Dr.
100 Dublin Road
2500 N. Walnut Creek
2760 Maytown Road
5001 State Route 60
4360 Johnson Ferry Place
614 W. 14th Street
505 N. Bradner Avenue
400 Barks Road West
The Common
(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:
Martinsville, VA
Matthews, NC
McHenry, IL
McKinney, TX
McMurray, PA
Medicine Hat, AB
Mentor, OH
Mequon, WI
Miamisburg, OH
Middleburg Heights, OH
Middleton, WI
Midlothian, VA
Milton Keynes, UK
Minnetonka, MN
Mishawaka, IN
Moline, IL
Monroe, NC
Monroe, NC
Monroe, NC
Monroe Township, NJ
Monroeville, PA
Monroeville, PA
Montgomeryville, PA
Montville, NJ
Moorestown, NJ
Morehead City, NC
Moulton, UK
Mountainside, NJ
Mt. Pleasant, MI
Naperville, IL
Naples, FL
Naples, FL
Naples, FL
Nashville, TN
Needham, MA
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
349
560
1,576
4,314
1,440
932
1,827
2,238
786
960
420
2,015
1,826
2,080
740
2,946
470
310
450
3,250
1,216
1,237
1,176
3,500
4,143
200
1,695
3,097
1,863
3,470
1,222
1,672
1,854
4,910
1,610
3,957
1,225
1,480
560
1,110
1,125
839
55
1,480
332
—
4,738
—
23,777
15,805
5,566
9,938
17,761
3,232
7,780
4,006
8,602
18,654
24,360
10,698
18,672
3,681
4,799
4,021
27,771
12,749
3,641
9,824
31,002
23,902
3,104
12,510
7,807
6,467
29,547
10,639
23,119
12,398
29,590
12,667
71,163
21,575
4,378
21,220
5,655
5,537
6,077
1,484
33,330
2,558
—
152
—
—
3,894
551
—
—
—
472
600
—
1,930
2,935
—
—
839
922
417
765
—
—
—
1,699
—
2,039
1,886
—
—
3,457
—
—
—
—
—
—
—
553
2,442
638
628
6
—
604
—
349
560
1,576
4,314
1,440
1,010
1,827
2,238
786
960
420
2,015
1,998
2,080
740
2,946
470
310
450
3,250
1,216
1,237
1,176
3,500
4,143
200
1,691
3,097
1,863
3,470
1,222
1,672
1,854
4,910
1,610
3,957
1,225
1,620
560
1,215
1,231
839
55
1,480
332
—
4,890
—
23,777
19,699
6,039
9,938
17,761
3,232
8,252
4,606
8,602
20,412
27,295
10,698
18,672
4,520
5,721
4,438
28,536
12,749
3,641
9,824
32,701
23,902
5,143
14,400
7,807
6,467
33,004
10,639
23,119
12,398
29,590
12,667
71,163
21,575
4,791
23,662
6,188
6,059
6,083
1,484
33,934
2,558
—
2,362
—
—
5,287
1,246
931
159
427
3,526
2,254
268
3,643
7,688
3,337
1,634
2,150
2,720
2,050
4,568
1,420
540
967
9,078
5,363
2,594
1,726
741
399
8,883
1,057
2,558
1,109
10,698
6,277
—
1,706
1,111
9,771
1,371
1,158
1,402
1,031
8,152
1,527
2003
2003
2006
2021
2010
2014
2018
2021
2018
2004
2001
2021
2015
2012
2014
2018
2003
2003
2003
2015
2018
2018
2018
2011
2012
1999
2017
2018
2020
2011
2018
2018
2018
2008
2002
2021
2019
2013
2004
2013
2014
2018
1995
2012
1999
1900
1998
1900
2018
2011
1999
1985
2015
1983
1998
1991
2015
2007
1999
2013
1964
2001
2000
1997
1996
1997
1996
1989
1988
2014
1999
1995
1988
2013
2001
1998
1993
1987
2007
1994
2013
2007
2010
1998
2010
1999
1998
1995
1985
1998
Rolling Hills Rd. & US Hwy. 58
2404 Plantation Center Dr.
5200 Block of Bull Valley Road
220 S Crutcher Crossing
240 Cedar Hill Dr
65 Valleyview Drive SW
8200 Mentor Hills Drive
6751 West Mequon Road
450 Oak Ridge Boulevard
15435 Bagley Rd.
6701 Stonefield Rd.
13800 Bon Secours Drive
Tunbridge Grove, Kents Hill
500 Carlson Parkway
60257 Bodnar Blvd
833 Sixteenth Avenue
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.
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
100 West St.
235 Gould 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.
(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:
Northampton, UK
Northampton, UK
Northbrook, IL
Nottingham, UK
Nuneaton, UK
Nuthall, UK
Oak Lawn, IL
Oak Lawn, IL
Oakland, CA
Ocala, FL
Oklahoma City, OK
Oklahoma City, OK
Oklahoma City, OK
Olathe, KS
Ona, WV
Oneonta, NY
Orem, UT
Osage City, KS
Osawatomie, KS
Ottawa, KS
Overland Park, KS
Overland Park, KS
Overland Park, KS
Overland Park, KS
Owasso, OK
Palm Beach Gardens, FL
Palm Coast, FL
Palm Harbor, FL
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
Pickerington, OH
Pikesville, MD
Pikesville, MD
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,182
2,013
1,298
1,628
3,325
2,498
2,418
3,876
4,760
1,340
590
760
—
1,930
950
80
2,150
50
130
160
—
4,500
410
1,300
215
2,082
870
2,490
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
2,072
—
4,247
17,348
6,257
13,337
6,263
8,983
10,436
5,426
7,985
16,143
10,564
7,513
7,017
—
19,765
7,558
5,020
24,107
1,700
2,970
6,590
—
29,105
2,840
25,311
1,380
6,622
10,957
23,901
13,807
22,450
12,453
28,803
7,644
6,402
5,610
12,718
10,314
8,023
5,602
5,431
7,108
10,433
27,651
2,487
8,379
2,124
780
—
744
1,159
1,220
—
—
282
206
39
98
18,198
553
—
—
—
142
136
44
31,146
7,295
92
677
—
—
233
—
—
—
—
—
—
734
59
—
—
—
—
—
—
3,536
—
—
—
5,670
2,203
1,298
1,782
3,638
2,734
2,418
3,876
4,760
1,340
590
760
1,590
1,930
950
80
2,150
50
130
160
3,730
4,500
410
1,300
215
2,082
870
2,490
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
2,072
—
4,247
18,984
6,847
13,337
6,853
9,829
11,420
5,426
7,985
16,425
10,770
7,552
7,115
16,608
20,318
7,558
5,020
24,107
1,842
3,106
6,634
27,416
36,400
2,932
25,988
1,380
6,622
11,190
23,901
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
27,651
2,487
8,379
4,373
1,227
1,222
1,214
2,180
2,559
494
754
3,244
3,659
2,796
2,575
1,090
3,619
2,215
1,824
3,885
375
574
1,114
9,289
11,615
564
4,526
898
692
3,663
692
1,357
2,166
1,121
2,506
691
1,715
972
1,227
1,120
784
360
535
649
4,529
296
213
854
2013
2014
2018
2014
2013
2013
2018
2018
2014
2008
2007
2007
2014
2016
2015
2007
2015
2015
2015
2015
2008
2010
2015
2016
1996
2018
2008
2021
2018
2018
2018
2018
2018
2011
2015
2018
2018
2018
2020
2018
2018
2011
2021
2018
2018
2011
2014
1999
2014
2011
2011
1977
1960
2002
2009
2008
2009
2016
2015
2007
1996
2014
1996
2003
2007
2009
1988
2004
2015
1996
1991
2010
1996
1997
1990
1999
1987
1996
2005
2000
1998
2006
1987
2012
1973
1978
1952
2017
1998
1996
Cliftonville Road
Cliftonville Road
3240 Milwaukee Avenue
172A Nottingham Road
132 Coventry 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
100 Weatherholt Drive
1846 County Highway 48
250 East Center Street
1403 Laing St
1520 Parker Ave
2250 S Elm St
12000 Lamar Avenue
6101 W 119th St
14430 Metcalf Ave
7600 Antioch Road
12807 E. 86th Place N.
11375 Prosperity Farms Road
50 Town Ct.
2960 Tampa Rd
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
611 Windmiller Drive
8911 Reisterstown Road
8909 Reisterstown 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:
Pinehurst, NC
Piqua, OH
Piscataway, NJ
Pittsburgh, PA
Pittsburgh, PA
Pittsburgh, PA
Pittsburgh, PA
Pittsburgh, PA
Pittsburgh, PA
Pittsburgh, PA
Plainview, NY
Plano, TX
Poole, UK
Potomac, MD
Potomac, MD
Pottstown, PA
Powell, OH
Powell, OH
Prior Lake, MN
Prospect, KY
Raleigh, NC
Raleigh, NC
Raleigh, NC
Red Bank, NJ
Redondo Beach, CA
Reidsville, NC
Richardson, TX
Richmond, IN
Richmond, VA
Richmond, VA
Roanoke, VA
Rock Hill, SC
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
13,058
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
290
204
3,100
1,750
603
1,005
1,140
761
1,480
1,139
3,990
1,840
3,478
1,448
4,119
984
1,910
2,300
1,870
2,533
7,598
3,530
2,580
1,050
—
170
1,468
700
3,261
1,046
748
1,825
2,386
4,290
2,220
1,895
2,140
1,900
710
1,423
449
370
260
1,050
1,499
2,690
1,885
33,351
8,572
11,354
15,160
3,164
4,213
9,712
5,844
11,969
20,152
17,481
14,622
14,916
4,563
18,008
26,198
29,849
9,963
88,870
59,589
16,837
21,275
9,557
3,830
12,975
14,222
17,974
8,233
4,483
7,676
13,546
20,310
17,650
—
24,679
10,262
9,790
8,907
5,171
5,697
8,800
24,689
12,658
718
—
—
6,320
—
—
—
—
—
—
1,713
560
—
—
—
—
—
—
300
—
900
—
—
1,158
709
1,473
—
393
—
—
5
—
—
1,379
230
—
100
1,146
—
—
1
390
425
1,361
—
290
204
3,100
1,750
603
1,005
1,140
761
1,480
1,139
3,990
1,840
3,478
1,448
4,119
984
1,910
2,300
1,870
2,533
7,598
3,530
2,580
1,050
—
170
1,468
700
3,261
1,046
748
1,825
2,386
4,290
2,220
1,895
2,140
2,079
710
1,423
449
370
260
1,050
1,499
3,408
1,885
33,351
14,892
11,354
15,160
3,164
4,213
9,712
5,844
13,682
20,712
17,481
14,622
14,916
4,563
18,008
26,198
30,149
9,963
89,770
59,589
16,837
22,433
10,266
5,303
12,975
14,615
17,974
8,233
4,488
7,676
13,546
21,689
17,880
—
24,779
11,229
9,790
8,907
5,172
6,087
9,225
26,050
12,658
1,607
1,158
4,257
4,421
1,089
1,400
295
376
1,013
597
4,203
3,413
1,238
1,325
1,396
458
224
281
4,759
359
11,050
14,540
4,370
6,077
8,658
2,375
1,223
2,585
1,610
789
1,277
327
594
6,215
2,969
—
3,960
2,636
3,006
859
3,071
2,838
4,022
5,066
1,180
2003
1997
2013
2005
2018
2018
2018
2018
2018
2018
2011
2016
2019
2018
2018
2018
2021
2021
2015
2021
2008
2012
2012
2011
2011
2002
2018
2016
2018
2018
2018
2021
2020
2011
2012
2006
2015
2013
2011
2018
1999
2003
2004
2014
2018
1998
1997
2017
1998
1998
1997
1962
1965
1986
1986
1963
2016
2019
1994
1988
1907
2018
2017
2003
2017
2017
2002
1988
1997
1957
1998
1999
2015
1990
1966
1997
1995
2014
2002
2014
1900
1989
2010
1988
1997
1998
1997
1997
1999
2000
17 Regional Dr.
1744 W. High St.
10 Sterling Drive
100 Knoedler Rd.
1125 Perry Highway
505 Weyman Road
550 South Negley Avenue
5609 Fifth Avenue
1105 Perry Highway
1848 Greentree Road
150 Sunnyside Blvd
3325 W Plano Parkway
Kingsmill Road
10718 Potomac Tennis Lane
10714 Potomac Tennis Lane
724 North Charlotte Street
3872 Attucks Drive
10351 Sawmill Parkway
4685 Park Nicollet Avenue
6901 Carslaw Ct.
4030 Cardinal at North Hills St
5301 Creedmoor Road
7900 Creedmoor Road
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
1611 Constitution Blvd
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
(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:
San Diego, CA
San Juan Capistrano, CA
Sand Springs, OK
Sandusky, MI
Sarasota, FL
Sarasota, FL
Sarasota, FL
Sarasota, FL
Sarasota, FL
Scranton, PA
Scranton, PA
Seminole, FL
Seven Fields, PA
Sewell, NJ
Shawnee, OK
Silver Spring, MD
Silver Spring, MD
Silvis, IL
Sinking Spring, PA
Sittingbourne, UK
Smithfield, NC
Smithfield, NC
South Bend, IN
South Point, OH
Southampton, UK
Southbury, CT
Spokane, WA
Springfield, IL
St. 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
Tallahassee, FL
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,390
910
967
475
4,101
1,370
2,792
443
320
440
1,165
484
3,127
80
1,469
4,678
880
1,393
1,357
290
360
670
1,135
1,519
1,860
2,649
990
2,100
2,009
1,820
150
310
140
899
790
1,583
80
790
340
695
4,946
1,020
2,522
1,264
22,003
6,942
19,654
6,738
3,175
11,204
4,082
11,173
8,892
12,144
17,609
8,975
4,663
14,090
1,400
10,392
11,679
16,420
19,842
6,539
5,680
8,216
17,770
9,387
16,041
23,613
11,699
13,378
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
9,652
1,845
1,506
238
—
—
—
—
—
—
3
375
—
59
—
—
—
—
139
—
744
844
179
—
—
1,027
1,088
—
1,085
100
599
477
377
693
53
6
—
—
—
1,442
56
—
—
6,159
—
—
—
1,390
910
967
475
4,101
1,370
2,792
443
320
440
1,165
484
3,127
80
1,469
4,678
880
1,393
1,485
290
360
670
1,135
1,608
1,860
2,649
990
2,100
2,126
1,991
150
310
140
899
790
1,583
80
864
340
695
4,946
1,020
2,522
1,264
23,848
8,448
19,892
6,738
3,175
11,204
4,082
11,173
8,892
12,147
17,984
8,975
4,722
14,090
1,400
10,392
11,679
16,559
19,842
7,155
6,524
8,395
17,770
9,387
16,979
24,701
11,699
14,463
33,119
8,720
3,544
1,824
6,876
3,680
6,397
10,784
15,634
1,400
15,876
16,369
7,244
22,123
19,894
8,573
9,652
7,856
4,256
4,895
314
2,138
1,679
392
1,040
915
2,422
3,527
894
2,805
1,494
936
969
1,161
5,024
1,829
1,313
2,767
1,640
3,700
867
1,946
6,859
1,092
2,951
5,245
1,232
694
866
2,960
1,763
1,513
1,013
1,491
937
2,749
3,666
653
1,986
4,553
787
337
2008
2000
2012
2020
1996
2018
2018
2018
2018
2014
2014
2018
1999
2018
1996
2018
2018
2010
2018
2014
2003
2014
2014
2018
2017
2011
2018
2014
2015
2014
2014
2003
2003
2003
2018
2018
2018
1995
2015
2014
2018
2018
2009
2018
2021
1992
2001
2002
2008
1995
1993
1968
1993
1998
2013
2005
1998
1999
2010
1995
1995
1990
2005
1982
1997
1998
1999
2014
1984
2013
2001
1985
2013
1996
2016
1998
1990
1996
1999
1999
1996
2013
1995
2012
2011
1981
1990
2010
1984
1999
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
5509 Swift Road
2751 Boulevard Ave
2741 Blvd. Ave
9300 Antilles Drive
500 Seven Fields Blvd.
378 Fries Mill Road
3947 Kickapoo
2505 Musgrove Road
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
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
100 John Knox Rd
(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:
Tampa, FL
Telford, UK
Terre Haute, IN
Texarkana, TX
The Villages, FL
Thomasville, GA
Thousand Oaks, CA
Three Rivers, MI
Tomball, TX
Toms River, NJ
Tonganoxie, KS
Topeka, KS
Towson, MD
Towson, MD
Towson, MD
Troy, OH
Troy, MI
Trumbull, CT
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
Vero Beach, FL
Vero Beach, FL
Virginia Beach, VA
Virginia Beach, VA
Voorhees, NJ
Voorhees, NJ
W Palm Beach, FL
W Palm Beach, FL
Wabash, IN
Waconia, MN
Wake Forest, NC
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,733
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,315
1,048
1,370
192
1,035
530
3,425
1,255
1,050
3,466
310
260
1,715
3,100
4,527
200
1,381
4,440
1,100
890
1,390
1,320
1,752
840
1,446
—
1,932
112
108
2,503
1,150
2,246
263
297
3,580
1,256
1,540
2,004
3,100
2,193
1,175
1,921
670
890
200
6,911
11,250
18,016
1,403
7,446
12,520
19,573
2,760
13,300
23,311
3,690
12,712
13,111
6,465
3,126
2,000
24,445
43,384
27,007
9,410
7,110
10,087
28,421
15,299
5,919
—
2,372
2,558
2,962
28,393
10,674
10,094
3,187
3,263
31,735
11,204
22,593
19,634
25,950
6,990
8,294
5,731
14,588
14,726
3,003
—
—
—
—
—
1,347
—
—
840
—
76
101
—
—
—
4,254
—
570
2,233
—
1,102
70
94
537
—
33,927
—
—
—
—
215
—
—
—
—
—
204
—
26
—
—
—
1
4,495
2,621
1,315
1,048
1,370
192
1,035
530
3,425
1,255
1,050
3,466
310
260
1,715
3,100
4,527
200
1,381
4,440
1,100
890
1,390
1,320
1,752
840
1,446
2,242
1,932
112
108
2,503
1,150
2,246
263
297
3,580
1,256
1,540
2,004
3,100
2,193
1,175
1,921
670
890
200
6,911
11,250
18,016
1,403
7,446
13,867
19,573
2,760
14,140
23,311
3,766
12,813
13,111
6,465
3,126
6,254
24,445
43,954
29,240
9,410
8,212
10,157
28,515
15,836
5,919
31,685
2,372
2,558
2,962
28,393
10,889
10,094
3,187
3,263
31,735
11,204
22,797
19,634
25,976
6,990
8,294
5,731
14,589
19,221
5,624
749
61
3,517
912
1,776
3,129
643
340
3,904
2,651
712
3,267
1,221
576
352
2,681
2,178
12,332
4,029
1,101
2,819
2,713
3,639
4,910
610
1,524
341
1,386
1,589
2,507
3,629
1,001
1,702
1,750
956
384
4,568
263
6,764
722
839
560
3,157
5,098
2,642
2018
2021
2015
1996
2013
2011
2019
2018
2011
2019
2015
2012
2018
2018
2018
1997
2018
2011
2015
2017
2010
2011
2017
2011
2018
2018
2018
2001
2001
2018
2008
2018
2001
2001
2021
2021
2014
2021
2011
2018
2018
2018
2014
2011
1998
1999
2021
2015
1996
2014
2006
2021
1976
2001
2006
2009
2011
2000
1960
1970
1997
2006
2001
2017
2009
1998
2012
2014
1965
2014
2020
1981
1998
1999
2011
2009
1997
1999
1996
2005
2007
1993
2008
2013
2006
1996
1996
2013
2005
1999
14950 Casey Road
Shifnal Road
395 8th Avenue
4204 Moores Lane
2450 Parr Drive
423 Covington Avenue
980 Warwick 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
81 S. Stanfield Rd.
925 West South Boulevard
6949 Main Street
18001 East 51st Street
7210 South Yale Avenue
7220 S. Yale Ave.
7902 South Mingo Road East
701 W 71st Street South
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.
910 Regency Square
4150 Indian River Blvd
5520 Indian River Rd
1853 Old Donation Parkway
113 South Route 73
1086 Dumont Circle
2330 Village Boulevard
2300 Village Boulevard
20 John Kissinger Drive
500 Cherry Street
611 S. Brooks 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:
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
Westlake, OH
Weston Super Mare, UK
Wheaton, MD
Whippany, NJ
Whitehall, MI
Wichita, KS
Wichita, KS
Wichita, KS
Wichita, KS
Wichita, KS
Williamsburg, VA
Willoughby, OH
Wilmington, NC
Wilmington, NC
Wilmington, DE
Wilmington, DE
Wilmington, DE
Windsor, VA
Winston-Salem, NC
Winter Garden, FL
Winter Springs, FL
Witherwack, UK
Wolverhampton, UK
Woodbury, MN
Woodstock, VA
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,038
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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
855
2,517
3,864
1,571
1,645
260
1,400
630
900
860
1,187
1,774
210
400
1,376
2,843
2,266
1,148
360
1,110
1,152
944
1,573
1,317
594
6,487
18,407
39,084
8,562
2,510
7,906
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
11,963
7,054
3,788
14,977
6,789
2,240
11,000
19,747
10,134
8,873
5,728
8,653
2,991
15,355
13,450
36,948
9,500
6,514
2,514
7,937
14,822
6,915
6,678
20,935
5,108
—
—
—
919
57
—
1,337
—
—
679
38
—
—
—
—
4,146
26,086
—
—
1
—
902
—
—
—
129
456
315
123
—
6
—
—
207
—
—
—
7
595
—
—
741
778
298
5
1,356
4,358
5,394
1,296
40
875
2,000
605
1,427
1,620
620
828
1,960
1,347
890
740
2,566
1,420
1,582
890
855
2,754
3,864
1,571
1,645
260
1,400
630
900
860
1,187
1,774
210
400
1,376
2,843
2,266
1,148
360
1,110
1,152
1,033
1,721
1,317
594
6,487
18,407
39,084
9,369
2,567
7,906
32,147
3,030
15,674
6,263
17,828
5,103
24,614
19,389
12,118
12,433
23,520
5,371
10,279
15,965
11,963
7,719
3,788
14,977
6,789
2,369
11,456
20,062
10,257
8,873
5,734
8,653
2,991
15,562
13,450
36,948
9,500
6,521
3,109
7,937
14,822
7,567
7,308
21,233
5,113
682
1,696
3,423
1,718
447
6,281
8,691
308
1,835
1,273
4,729
525
2,140
2,126
1,057
11,082
980
521
1,014
3,424
1,136
1,721
382
1,430
375
416
6,185
4,867
2,791
2,589
1,416
835
1,771
3,212
1,259
3,324
913
1,599
1,475
2,091
1,372
1,688
1,645
2,886
1,105
2018
2018
2018
2015
2015
2002
2011
2018
2018
2015
2010
2018
2019
2018
2018
1998
2017
2018
2018
2014
2018
2013
2018
2018
2020
2015
2006
2012
2011
2011
2018
2018
1999
2014
2018
2018
2018
2018
2003
2012
2018
2013
2013
2017
2018
1930
1997
1990
2015
1996
1989
1999
1964
1998
2015
2011
2006
2000
1998
1975
2001
2020
1982
1980
2013
1997
2011
1961
2000
2012
1992
1997
2009
2012
2012
2000
1974
1999
2012
1998
1988
1984
1999
1996
2013
1999
2009
2011
2015
2001
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
28400 Center Ridge Road
141b Milton Road
11901 Georgia Avenue
18 Eden Lane
6827 Whitehall Rd
900 N Bayshore Dr
505 North Maize Road
2050 North Webb Road
10600 E 13th Street North
10604 E 13th Street North
1811 Jamestown Rd
37603 Euclid Avenue
3501 Converse Dr.
3828 Independence Blvd
700 1/2 Foulk Road
5651 Limestone Road
700 Foulk Road
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
(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:
Worcester, MA
Yardley, PA
Yardley, PA
York, UK
York, PA
York, PA
York, PA
Youngsville, NC
Zephyrhills, FL
Zionsville, IN
Zionsville, IN
Triple-net Total
—
—
—
—
—
—
—
—
—
—
—
3,500
773
1,561
2,961
976
1,050
1,121
380
2,131
1,610
2,162
54,099
14,914
9,439
8,266
9,354
4,210
7,584
10,689
6,669
22,400
33,238
4
—
—
1,058
—
—
—
115
—
1,790
—
3,500
773
1,561
3,240
976
1,050
1,121
380
2,131
1,610
2,162
54,103
14,914
9,439
9,045
9,354
4,210
7,584
10,804
6,669
24,190
33,238
17,379
1,460
1,099
1,736
890
474
771
2,177
712
7,039
721
2007
2018
2018
2014
2018
2018
2018
2014
2018
2010
2021
2009
1995
1990
2006
1972
1983
1979
2013
1987
2009
2018
101 Barry Road
493 Stony Hill Road
1480 Oxford Valley Road
Rosetta Way, Boroughbridge Road
200 Pauline Drive
2400 Kingston Court
1770 Barley Road
100 Sunset Drive
38220 Henry Drive
11755 N Michigan Rd
6800 Central Blvd
$
72,536
$
911,678
$
7,485,316
$
592,881
$
955,620
$
8,034,255
$
1,459,518
120
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2021
(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
Ann Arbor, MI
Ann Arbor, MI
Appleton, WI
Appleton, WI
Arcadia, CA
Arlington, TX
Arlington Heights, IL
Atlanta, GA
Atlanta, GA
Atlanta, GA
Austin, TX
Austin, TX
Baltimore, MD
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
Brooklyn, NY
Burleson, TX
Burnsville, MN
Canton, MI
(Dollars in thousands)
$
5,130
$
102
$
19,060
$
—
$
102
$
19,060
$
—
—
—
—
—
—
—
—
—
6,728
11,848
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
33,729
78,271
—
—
—
—
—
—
—
—
1,072
726
—
—
476
548
1,862
4,234
4,044
1,881
3,782
—
82
1,233
—
—
4,931
1,066
1,688
4,490
—
16,516
49,555
20,766
18,863
19,863
32,603
52,772
109
31
—
1,701
—
—
—
1,168
4,544
14,196
—
—
13,378
17,103
—
27,623
14,610
7,540
18,003
—
18,243
2,826
—
—
18,720
10,112
5,865
28,667
—
28,429
79,091
40,730
1,192
31,690
28,639
87,366
34,002
12,312
—
6,228
101,887
—
—
13,399
624
1,661
20,406
38,575
—
1,112
—
2,462
1,305
1,333
2,452
34,254
743
623
28,778
45,361
7,972
—
919
2,577
16,691
1,912
13,760
3,712
492
2,338
1,617
2,567
4,754
703
22,840
302
—
14,078
33,992
1,162
1,072
726
773
1,769
476
548
1,862
4,234
4,044
1,881
3,782
5,618
82
1,233
2,172
—
5,387
1,066
1,688
4,490
—
16,516
49,555
20,766
18,885
19,863
32,603
52,772
214
251
450
1,501
—
10
—
1,168
5,168
15,857
19,633
36,806
13,378
18,215
—
30,085
15,915
8,873
20,455
28,636
18,986
3,449
26,606
45,361
26,236
10,112
6,784
31,244
16,691
30,341
92,851
44,442
1,662
34,028
30,256
89,933
38,651
12,795
22,390
6,730
101,887
14,068
33,992
14,561
1,749
591
6,466
8,562
17,816
4,593
7,735
—
—
—
797
1,777
13,948
5,827
508
10,728
16,567
14,420
1,781
946
2,338
6,861
3,666
7,797
10,489
922
7,624
7,967
18,817
17,356
4,907
9,415
1,736
1,664
5,581
11,387
—
2018
2019
2012
2011
2011
2011
2011
2011
2021
2021
2019
2019
2006
2012
2020
2012
2012
2006
2017
2019
2019
2010
2019
2019
2015
2015
2015
2015
2015
2006
2012
2010
2017
2015
2011
2013
2021
2012
2005
2006
1993
1999
2003
2007
1900
2016
2014
2004
2005
1984
2012
1997
1984
2006
1991
2017
2015
2014
2010
2001
1978
1946
1955
1946
1950
1989
1995
1993
2006
2008
2021
2007
2014
2004
303 West Lake Street
230-232 Main Street
1105 N Central Expressway
3400-A Old Milton Parkway
3400-C Old Milton Parkway
11975 Morris Road
3300 Old Milton Parkway
940 North Point Parkway
4350 Jackson Road
4200 Whitehall Dr.
5330 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
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.
NE Corner of 9th & 49th Street
12001 South Freeway
14101 Fairview Dr
49650 Cherry Hill Road
Description
Encumbrances
Land
Outpatient Medical:
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
Cape Coral, FL
Cary, NC
Cedar Park, TX
Chapel Hill, NC
Chapel Hill, NC
Chapel Hill, NC
Chapel Hill, NC
Charlotte, NC
Charlotte, NC
Charlotte, NC
Charlotte, NC
Charlotte, NC
Charlotte, NC
Charlotte, NC
Chicopee, MA
Chula Vista, CA
Chula Vista, CA
Chula Vista, CA
Chula Vista, CA
Cincinnati, OH
Cincinnati, OH
Clarkson Valley, MO
Clear Lake, TX
Clinton, MI
Clyde, NC
College Station, TX
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
Danbury, CT
Danbury, CT
Danbury, CT
Deerfield Beach, FL
Delray Beach, FL
Dunkirk, MD
—
—
—
—
4,936
4,936
14,030
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
19,523
—
—
—
—
—
—
—
—
—
2,273
2,816
—
488
1,970
1,970
5,681
10
30
40
1,746
15,678
—
11,783
6,078
1,045
826
1,114
1,075
537
—
—
—
1,138
1,433
1,111
438
488
199
23
2,333
12,159
—
22,033
1,211
122
6,086
2,382
914
4,209
—
1,882
259
10,727
10,645
—
2,242
8,874
8,925
25,035
23,265
59,039
40,533
8,378
74,500
22,949
44,717
13,793
21,387
6,106
14,902
6,828
9,719
17,880
—
13,882
616
21,099
7,456
12,426
15,702
22,289
33,885
19,232
72,636
26,679
24,332
5,511
15,418
18,007
23,204
9,612
20,102
—
34,767
2,263
1,442
1,239
29,938
149
84
5
17
1,939
6,321
3,297
1,278
3,334
—
1,523
2,151
1,798
709
558
338
590
287
35,592
20
208
967
—
733
1,218
1,366
4,142
1,878
782
1,853
1,367
—
10
4,480
2,199
1,232
2,638
11,097
2,757
291
2,273
2,816
132
488
1,970
1,970
5,681
10
30
40
1,746
15,678
—
11,783
6,078
1,045
826
1,114
1,075
537
2
—
2,319
1,138
1,433
1,111
438
488
199
9,353
2,333
12,159
—
22,033
1,211
122
6,542
2,382
914
4,209
2,540
2,449
259
12,169
11,884
29,806
2,391
8,958
8,930
25,052
25,204
65,360
43,830
9,656
77,834
22,949
46,240
15,944
23,185
6,815
15,460
7,166
10,309
18,165
35,592
11,583
824
22,066
7,456
13,159
16,920
23,655
28,697
21,110
73,418
28,532
25,699
5,511
15,428
22,031
25,403
10,844
22,740
8,557
36,957
2,554
636
2,095
6,827
268
1,233
1,385
3,579
4,156
9,591
6,315
1,742
2,158
385
1,134
1,949
3,151
903
1,573
737
1,387
5,646
17,076
2,126
—
1,772
31
1,961
2,455
2,971
11,740
7,589
9,125
8,923
6,919
2,047
3,529
3,690
355
155
417
4,102
20,488
488
2021
2019
2017
2019
2018
2018
2018
2019
2019
2019
2019
2018
2021
2018
2019
2019
2019
2019
2019
2019
2012
2009
2013
2021
2019
2021
2019
2019
2019
2015
2012
2018
2013
2017
2011
2013
2018
2021
2021
2021
2011
2006
2019
1995
2007
2014
2010
2007
2007
2006
1971
1994
1989
1998
2021
2021
2021
2005
1973
1985
2008
2006
2001
2013
2010
2014
1987
2012
2021
1994
1999
2007
1982
2002
2009
2014
2007
1998
2014
2010
2019
2010
2017
2001
1985
1997
2721 Del Prado Blvd
540 Waverly Place
1401 Medical Parkway, Building 2
100 Perkins Drive
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
1237 Harding Place
830 Kenilworth Avenue
1225 Harding Place
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
11775 Tecumseh-Clinton Hwy.
581 Leroy George Drive
1204 Copperfield Pkwy
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
40 Old Ridgebury Rd
226 White St
2 Riverview Dr
1192 East Newport Center Drive
5130-5150 Linton Blvd.
10845 Town Center Blvd
(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:
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
Flower Mound, TX
Flower Mound, TX
Fort Washington, PA
Fort Worth, TX
Fort Worth, TX
Fort Worth, TX
Frederick, MD
Frederick, MD
Fresno, CA
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
(Dollars in thousands)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
17,231
—
1
—
—
—
—
—
—
—
—
1,403
1,751
—
1,634
41
3,263
2,278
—
958
—
8,578
737
4,164
4,620
2,015
401
462
1,790
1,065
1,930
1,497
1,150
4,952
569
80
70
2,128
981
—
—
1,790
1,347
3,155
1,250
2,587
7,372
5,492
—
2,164
2,316
—
5,837
—
23,788
42,391
—
9,443
39,562
27,163
19,724
—
27,485
—
61,779
9,276
27,027
—
16,104
6,099
26,020
4,522
6,817
18,311
11,896
8,162
30,151
1,638
30,810
41,837
9,169
6,086
—
—
4,421
2,652
31,155
26,621
5,376
22,172
18,448
8,834
4,659
4,525
—
33,128
—
1,377
2,037
19,435
1,423
374
1,056
1,245
31,004
387
14,478
—
552
1,988
—
2,435
2,278
702
560
613
1,400
902
335
2,567
55
1,314
2,683
62
318
10,721
22,877
1,446
511
3,581
2,772
279
1,908
1,131
50
692
812
21,373
1,518
17,133
1,403
1,751
677
1,634
41
3,263
2,278
4,842
958
369
8,578
737
4,164
4,620
2,015
2,805
462
1,790
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
2,988
5,837
3,688
25,165
44,428
18,758
10,866
39,936
28,219
20,969
26,162
27,872
14,109
61,779
9,828
29,015
—
18,539
5,973
26,722
5,082
7,430
19,711
12,798
8,497
32,718
1,693
32,124
44,520
9,231
6,404
8,640
19,512
5,867
3,163
34,736
29,393
5,655
24,080
19,579
8,884
5,351
5,337
18,385
34,646
13,445
2,434
3,532
9,854
1,174
4,878
2,889
2,362
10,724
10,027
4,444
7,811
2,715
8,581
—
1,579
2,092
8,127
—
1,175
2,532
1,201
1,271
3,902
203
7,162
4,473
1,425
2,968
2,806
6,156
1,800
628
2,944
3,170
621
3,101
2,088
2,500
461
418
958
15,141
5,071
2019
2019
2006
2020
2018
2019
2019
2010
2013
2013
2017
2015
2014
2014
2020
2014
2012
2021
2019
2019
2019
2018
2019
2019
2010
2019
2018
2012
2014
2014
2019
2019
2019
2019
2019
2019
2019
2012
2019
2019
2016
2012
2012
2000
2004
1997
2004
2011
2008
1994
2011
2009
2009
2017
2014
2012
1900
1980
2007
2012
1983
1979
2006
2004
2005
2018
2000
2009
2008
2008
2009
2002
2002
1987
2012
2012
2008
2002
2005
2005
2013
1999
2015
2019
2005
2007
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
2560 Central Park Avenue
4370 Medical Arts Drive
Medical Arts Drive
467 Pennsylvania Avenue
7200 Oakmont Boulevard
10840 Texas Health Trail
2001 West Rosedale Street
194 Thomas Johnson Drive
45 Thomas Johnson Drive
1105 E Spruce Ave
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
13105 Wortham Center Drive
15655 Cypress Woods Medical Dr.
10701 Vintage Preserve Parkway
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:
Houston, TX
Houston, TX
Houston, TX
Houston, TX
Howell, MI
Howell, MI
Humble, TX
Huntersville, NC
Independence, MO
Jackson, MI
Jacksonville, FL
Jacksonville, FL
Jefferson City, TN
Jonesboro, GA
Jonesboro, GA
Jupiter, FL
Jupiter, FL
Kalamazoo, MI
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,207
—
—
—
—
—
—
—
—
—
—
—
—
41,449
25,936
—
—
—
—
—
377
2,351
9,943
2,000
579
—
—
762
—
3,562
1,113
109
567
627
—
—
—
—
2,025
3,699
199
12,855
9,425
1,751
—
—
—
—
4,180
5,864
3,021
—
3,016
—
—
—
2,286
10,028
3,670
219
2,682
1,925
—
13,726
7,980
—
13,928
4,109
9,941
41,055
3,480
—
24,379
10,970
16,035
15,146
15,844
—
—
14,746
11,219
7,557
12,701
43,771
32,658
26,525
10,345
—
—
—
—
20,064
22,502
20,095
—
9,663
—
—
—
66,022
37,319
24,615
8,743
20,053
8,307
84,300
12,815
680
900
—
588
319
—
2,916
380
17,990
3,141
1,051
851
1,267
805
18,721
10,050
—
—
1,255
2,305
2,221
2,022
1,027
—
14,826
2,801
5,547
9,643
2,913
3,070
1,907
19,276
510
7,964
9,437
8,284
6,917
1,657
3,816
555
1,738
1,412
377
2,351
9,943
2,000
579
1,702
—
762
668
3,562
1,113
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
71,485
14,406
8,880
—
14,516
4,428
8,239
43,971
3,860
17,322
27,520
12,021
16,886
16,413
16,649
16,082
7,014
14,746
11,219
8,812
15,006
45,992
34,666
27,537
10,345
14,586
—
5,114
7,324
22,977
25,572
22,002
19,237
10,173
6,245
7,997
6,634
72,939
38,976
28,431
9,298
21,770
9,719
22,476
2,106
510
11
2,653
—
1,476
4,817
330
5,964
3,559
1,130
1,975
2,133
2,006
7,778
3,836
190
421
680
1,880
4,423
9,804
7,044
1,591
6,243
—
2,360
3,372
1,722
1,796
2,503
8,072
991
3,271
4,097
3,401
4,914
4,827
2,745
1,365
6,001
998
2012
2018
2020
2011
2016
2021
2013
2019
2020
2013
2019
2020
2019
2019
2019
2006
2007
2020
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
1998
2011
2013
1900
2017
2019
2014
2004
2007
2009
2006
2000
2001
2009
2007
2001
2004
2021
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
2727 W Holcombe Boulevard
20207 Chasewood Park Drive
11476 Space Center Blvd
F.M. 1960 & Northgate Forest Dr.
1225 South Latson Road
202 W. Highland Rd.
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
120 Hospital Drive
7813 Spivey Station Boulevard
7823 Spivey Station Boulevard
550 Heritage Dr.
600 Heritage Dr.
2520 Robert Jones Way
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
(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:
Matthews, NC
Menasha, WI
Merced, CA
Meridian, ID
Mesa, AZ
Mesa, AZ
Milan, MI
Mission Hills, CA
Missouri City, TX
Mobile, AL
Monroeville, PA
Moorestown, NJ
Mount Juliet, TN
Mount Kisco, NY
Mount Vernon, IL
Murrieta, CA
Murrieta, CA
Myrtle Beach, SC
Nampa, ID
New Milford, CT
New Milford, CT
Newburgh, NY
Newburyport, MA
Newtown, CT
Newtown, CT
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
Pinckney, MI
(Dollars in thousands)
—
—
—
—
—
—
—
22,245
—
15,123
—
—
—
—
—
—
—
—
15,500
—
—
—
—
—
—
—
—
—
12,699
—
—
—
—
—
—
—
—
—
—
—
—
—
—
10
—
—
3,206
3,158
3,889
1,216
—
1,360
2,759
1,544
6
—
12,632
—
—
3,800
1,357
3,439
1,006
2,033
9,213
3,104
2,176
3,039
—
—
1,138
2,518
2,336
2,882
1,017
895
216
478
1,700
—
—
199
109
229
—
1,708
32,108
—
—
23,619
5,588
5,816
6,082
42,276
7,143
25,180
10,012
50,896
—
46,294
24,892
47,190
—
3,131
18,648
3,031
5,924
28,300
18,492
7,355
7,375
—
—
23,416
21,523
17,936
14,463
5,642
34,573
18,949
4,724
8,009
—
—
3,967
2,134
5,442
—
3,397
1,611
18,500
14,904
3,506
1,122
1,257
405
7,119
—
14
1,087
1,030
15,131
5,124
144
1,164
—
612
2,933
510
895
4,079
999
1,785
1,989
12,805
8,959
3,667
2,946
2,035
1,573
1,025
2,367
—
247
5,862
12,759
42,538
257
133
451
63,386
419
10
1,345
—
3,206
3,158
3,889
1,216
4,791
1,360
2,759
1,544
362
1,601
12,627
—
—
3,800
1,357
3,439
1,006
2,033
9,213
3,104
2,176
3,039
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
1,708
33,719
17,155
14,904
27,125
6,710
7,073
6,487
44,604
7,143
25,194
11,099
51,570
13,530
51,423
25,036
48,354
—
3,743
21,581
3,541
6,819
32,379
19,491
9,140
9,364
11,084
8,505
27,083
24,469
19,971
16,036
6,667
36,940
18,949
4,971
13,871
11,259
32,731
4,224
2,267
5,893
62,237
3,816
3,918
4,355
6,326
3,175
457
518
—
13,679
953
2,971
1,457
19,095
6,846
3,756
9,398
24,004
—
1,027
1,665
82
162
2,082
2,312
174
219
6,921
4,072
3,678
1,739
1,880
1,503
897
4,288
6,537
552
1,736
2,303
8,729
521
290
1,026
31,376
—
2019
2016
2009
2019
2020
2020
2021
2014
2015
2018
2020
2011
2007
2019
2011
2010
2014
2019
2019
2021
2021
2019
2019
2021
2021
2007
2007
2019
2019
2019
2019
2019
2019
2013
2019
2012
2012
2014
2019
2019
2019
2006
2021
1994
1994
2010
2009
2016
2016
2008
1986
2016
2003
1979
2012
2005
1996
2012
2011
1900
1996
2017
1995
1995
2015
2008
2015
2016
1995
2004
2014
2014
2007
2008
2006
2008
2008
2011
2013
2013
2013
1980
1986
1994
1998
2020
1450 Matthews Township Parkway
1550 Midway Place
315 Mercy Ave.
3277 E Louise Drive
1910 S. Gilbert Road
1833 N. Power Road
870 E. Arkona Rd
11550 Indian Hills Road
7010 Highway 6
6144 Airport Boulevard
2550 Mosside Blvd
401 Young Avenue
5002 Crossings Circle
90 - 110 South Bedford Road
2 Good Samaritan Way
28078 Baxter Rd.
28078 Baxter Rd.
8170 Rourk Street
1510 12th Avenue
131 Kent Rd
131 Kent Rd
1200 NY-300
One Wallace Bashaw Jr. Way
164 Mount Pleasant
170 Mt Pleasant Rd
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.
10200 Dexter-Pinckney Rd.
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:
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
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. Louis, MO
St. Paul, MN
Stockton, CA
Suffern, NY
—
—
9,553
—
—
—
—
18,433
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
25,000
—
—
—
4,821
8,113
—
—
12,564
—
—
—
—
—
—
—
—
11,205
—
793
—
2,810
3,746
2,144
4,035
6,513
5,128
229
179
7,292
—
2,000
2,969
132
1,931
99
2,963
368
3,050
2,915
—
—
278
295
—
4,410
1,242
508
707
—
—
3,451
2,875
—
—
3,000
2,721
—
336
2,706
4,966
653
83,209
—
22,716
15,119
32,820
26,001
23,787
18,080
25,905
12,243
13,214
—
9,118
26,697
17,197
47,639
29,846
18,785
2,327
12,073
11,473
2,338
28,384
185
39,359
20,618
38,428
11,616
11,398
18,089
21,135
32,186
21,176
14,126
—
—
—
5,698
—
17,247
39,507
14,412
37,255
5,657
25,483
483
—
4,312
4,479
4,097
2,704
1,212
834
1,941
32,841
4
1,973
392
1
2,107
2,234
150
97
1,313
20,619
2,924
11,594
—
1,413
869
6
1
125
62
4,143
12
1,345
18,641
31,295
—
923
38,177
3,186
489
2,445
211
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
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
2,875
592
698
3,000
2,721
49
336
2,701
4,966
696
88,866
16,908
23,199
15,119
37,132
30,480
27,884
20,784
27,117
13,077
15,155
27,826
9,122
28,549
17,589
47,640
31,953
21,019
2,477
12,170
12,786
17,653
26,031
185
39,359
17,624
39,297
11,622
11,398
18,148
16,623
33,208
21,188
15,471
18,049
30,597
—
6,621
38,128
20,433
40,001
16,857
37,423
29,367
9,728
2,864
724
2,362
1,745
1,802
1,373
2,789
1,691
1,656
11,744
1,312
11,648
5,869
18,457
4,226
2,143
279
1,706
1,696
5,158
6,867
235
8,738
4,730
20,452
1,921
5,321
6,646
2,925
9,490
2,757
2,020
7,188
10,682
—
857
8,866
9,422
16,504
1,594
16,351
2012
2006
2018
2018
2019
2019
2019
2019
2019
2019
2019
2010
2015
2012
2012
2011
2019
2019
2019
2016
2019
2014
2014
2014
2014
2014
2010
2018
2010
2010
2013
2014
2018
2019
2012
2012
2014
2019
2014
2007
2011
2019
2011
2005
1997
1995
2019
2008
2010
2006
2012
2009
1991
2005
2011
2016
2008
2008
2009
2005
1994
2000
2017
2006
1976
1998
1996
2013
1989
2010
2007
1996
2007
2014
1969
2004
2017
2004
2004
1900
2012
2006
2001
2007
2009
2007
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
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
925 E. Southlake Boulevard
1545 East Southlake Boulevard
1545 East Southlake Boulevard
Central Avenue
305 Bicentennial Highway
225 Smith Avenue N.
2325 Dougherty Ferry Rd.
435 Phalen Boulevard
2388 - 2488 N California Street
257 Lafayette Avenue
(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:
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
Wellington, FL
Wellington, FL
Westlake Village, CA
Westlake Village, CA
Winston-Salem, NC
Woodbridge, VA
Wyandotte, MI
Ypsilanti, MI
Yuma, AZ
Zephyrhills, FL
—
—
—
—
—
—
—
—
—
58,863
—
—
—
—
—
13,577
—
18,243
—
—
—
—
8,000
6,360
—
—
—
—
—
—
1,566
—
1,113
—
4,319
6,115
—
3,345
3,361
2,903
—
—
6
—
—
2,250
601
3,981
—
—
—
—
2,553
2,487
2,006
346
581
3,615
1,592
3,875
11,511
—
12,910
—
12,234
15,510
—
541
12,039
104,300
—
—
96,075
—
—
28,632
2,594
31,706
—
18,068
—
—
15,851
9,776
6,542
16,629
8,023
12,117
9,589
27,269
173
19,075
2,473
64,307
—
2,065
21,644
297
3,633
10,625
36,187
32,517
2,347
289
148
352
1,125
17
14,225
303
19,718
11,661
246
169
1,226
15
773
579
837
—
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
468
3,981
2,050
303
326
580
2,553
2,487
2,006
346
581
3,615
1,592
3,875
11,630
15,532
15,383
64,307
12,234
17,575
12,794
838
15,672
114,925
36,187
26,040
98,329
164
113
28,984
3,852
31,723
12,175
18,068
19,392
11,081
16,097
9,945
7,768
16,644
8,796
12,696
10,426
27,269
5,771
7,391
1,119
26,409
3,906
2,195
2,416
445
4,531
7,590
13,123
12,099
37,017
12
9
3,685
797
4,166
2,009
4,205
8,973
5,681
2,762
1,540
1,620
1,856
652
—
1,647
9,588
2010
2012
2020
2011
2011
2020
2015
2015
2015
2019
2009
2006
2010
2018
2018
2018
2018
2018
2015
2016
2006
2007
2018
2018
2019
2018
2020
2021
2019
2011
2007
2005
2002
2013
2003
1986
2017
1976
1985
2013
1991
1997
2012
1962
1961
1981
2000
2010
2017
2014
2000
2003
1975
1989
1998
2012
2002
1989
2004
1974
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
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
4918, 4936, 4940, 4972, and 4990 W. Clark Road
2270 South Ridgeview Drive
38135 Market Square Dr
Outpatient Medical Total
$
530,254
$
728,837
$
4,612,615
$
1,602,519
$
901,997
$
6,041,974
$
1,326,814
121
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2021
(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:
Brookline, MA
Concord, NH
Concord, NH
Fort Collins, CO
Fountain Valley, CA
Franconia, NH
Gig Harbor, WA
Hemet, CA
Irving, TX
Las Vegas, NV
Louisville, KY
Morrison, CO
Owensboro, KY
Owenton, KY
Palm Desert, CA
Rexburg, ID
Shelbyville, KY
Williamstown, KY
Assets Held For Sale Total
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$
—
$
720
1,760
890
5,259
360
3,000
6,224
1,030
—
490
2,720
225
100
6,195
1,267
630
70
$
3,799
3,041
43,179
4,532
9,379
8,609
4,463
8,414
6,823
—
10,010
16,261
13,275
2,400
8,922
3,213
3,870
6,430
$
—
—
—
—
—
—
—
—
—
2,945
—
—
—
—
—
—
—
—
$
30,940
$
156,620
$
2,945
$
$
$
3,799
2,974
21,811
4,478
13,952
8,609
7,062
14,001
2,785
2,945
7,780
13,433
7,687
1,282
14,451
67
3,315
3,666
$
134,097
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
122
2019
2011
2011
2018
2018
2011
2018
2018
2007
2007
2005
2018
2005
2005
2018
2018
2005
2005
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1900
1926
1994
1965
1988
1971
1990
1989
1999
1900
1978
1974
1964
1979
1989
1988
1965
1987
125 Holland Road
227 Pleasant Street
239 Pleasant Street
1005 East Elizabeth
11680 Warner Avenue
93 Main Street
3309 45th Street Court Northwest
1717 West Stetson Avenue
8855 West Valley Ranch Parkway
SW corner of Deer Springs Way and Riley Street
4604 Lowe Rd
150 Spring Street
1205 Leitchfield Rd.
905 Hwy. 127 N.
74350 Country Club Drive
660 South 2nd West
1871 Midland Trail
201 Kimberly Lane
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
$
$
1,599,522
$
1,958,208
$
15,959,072
$
2,969,135
$
2,110,813
$
18,775,602
$
72,536
530,254
—
2,202,312
—
911,678
728,837
—
3,598,723
30,940
7,485,316
4,612,615
651,389
28,708,392
156,620
592,881
1,602,519
—
5,164,535
2,945
955,620
901,997
—
3,968,430
—
8,034,255
6,041,974
651,389
33,503,220
134,097
4,123,782
1,459,518
1,326,814
—
6,910,114
—
2,202,312
$
3,629,663
$
28,865,012
$
5,167,480
$
3,968,430
$
33,637,317
$
6,910,114
(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
(1)
(2)
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
(1) Includes property dispositions and dispositions of leasehold improvements which are generally fully depreciated.
(2) Primarily relates to the adoption of ASC 842.
(3) The unaudited aggregate cost for tax purposes for real property equals $31,381,486,000 at December 31, 2021.
123
2021
Year Ended December 31,
2020
(in thousands)
2019
$
$
$
$
33,670,006
4,805,086
282,834
(51,107)
(1,063,990)
(37,082)
—
37,605,747
6,104,297
1,037,566
4,036
(234,397)
(1,388)
6,910,114
$
$
$
$
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
Welltower Inc.
Schedule IV - Mortgage Loans on Real Estate
December 31, 2021
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
(in thousands)
Location
First mortgages relating to 1 property located in:
North Carolina
Triple-net
Segment
8.00%
12/18/2023 $
220
$
First mortgages relating to multiple properties located in:
United Kingdom
Triple-net
12.00%
4/20/2026
3,848
First mortgages less than three percent of total:
United Kingdom - 2
United States - 10
Triple-net
Various
Totals
9.00%
4% - 8%
2022 - 2024
2020 - 2026
N/A
N/A
$
2021
—
—
—
—
N/A
N/A
—
—
$
$
$
32,783
32,783
$
32,171
32,171
769,500
769,500
N/A
N/A
—
802,283
$
708,242
708,242
39,862
96,827
136,689
877,102
$
—
—
—
—
—
19,865
19,865
19,865
Year Ended December 31,
2020
(in thousands)
2019
Reconciliation of mortgage loans:
Balance at beginning of year
Additions:
New mortgage loans
Draws on existing loans
Interest added
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
$
293,752
$
145,686
$
249,071
842,912
337
11,815
855,064
(214,132)
(9,142)
(6,984)
(29,619)
(259,877)
(11,837)
877,102
$
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
$
124
WELLTOWER INC.
2021-2023 LONG-TERM INCENTIVE PROGRAM
Exhibit 10.17(a)
1.
Purpose. This 2021-2023 Long-Term Incentive Program (the “Program”) is adopted pursuant to the Welltower Inc. 2016 Long-Term Incentive Plan (the
“Equity Plan”) and any successor equity plan and is intended to provide an incentive for superior work and to motivate executives and employees of Welltower Inc. (the
“Company”) toward even higher achievement and business results, to tie their goals and interests to those of the Company and its stockholders and to enable the Company to
attract and retain highly qualified executives and employees. The Program is for the benefit of Participants (as defined below).
2.
Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Equity Plan. In addition, as used herein:
“Adjusted Annualized EBITDA” means the Company’s earnings before interest, taxes, depreciation and amortization, excluding unconsolidated entities and including
adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/losses/impairments on properties, gains/losses on
derivatives and financial instruments, other expenses, and additional other income for the three month period beginning on October 1, 2023 and ending on December 31, 2023,
and then expressed on an annualized basis.
“All REIT Index” means the MSCI US REIT Index.
“Annualized TSR Percentage” means (1 + TSR)^(1/3) - 1.
“Award” means a grant to a Participant hereunder. The Company intends that while Awards may be granted under the Program in any form of grant permitted under
the Equity Plan not in conflict with the terms of the Program, the two types of Awards that are intended to be granted are (1) Performance Awards and (2) Time-Based Awards
in the form of options and/or restricted stock units with vesting based on the completion of specified periods of continuous service with the Company and its subsidiaries.
“Award Notice” means the restricted stock unit award agreement with a Participant that sets forth the terms, conditions and limitations of the Participant’s participation
in this Program, including, without limitation and as may be applicable, the Participant’s Target Award, the Participant’s threshold, target, and high payout multiples and the
Time Restriction.
“Cause” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the
Company immediately prior to such termination, and “Cause” is defined therein, then “Cause” shall have the meaning set forth in such employment agreement, or (b) if the
Participant is not party to an employment agreement with the Company immediately prior to such termination or the Participant’s employment agreement does not define
“Cause,” then “Cause” shall mean: (i) negligence or willful misconduct by the Participant in connection with the performance of his or her material duties as an employee of
the Company or any Subsidiary; (ii) a breach by the Participant of any of his or her material duties as an employee of the Company or any Subsidiary, including but not limited
to the provisions of Section 4 herein; (iii) conduct by the Participant against the best interests of the Company or any Subsidiary, including but not limited to a material act of
embezzlement or misappropriation of corporate assets, or a material act of statutory or common law fraud against the Company, any Subsidiary or the employees of either the
Company or any Subsidiary; (iv) conviction of, or plea of nolo contendere to, any crime that is a felony, involves moral turpitude, or was committed in connection with the
performance of Participant’s job responsibilities for the Company; (v) indictment of the Participant of a felony or a misdemeanor involving moral turpitude and such indictment
has a material adverse effect on the interests or reputation of the Company or any Subsidiary; (vi) the intentional and willful failure by Participant to substantially perform his
or her job responsibilities to the Company (other than any such failure resulting from Participant’s incapacity due to physical or mental disability) after a demand for substantial
performance is made by the Company; (vii) the failure by Participant to satisfactorily perform his or her job responsibilities to the Company (other than any such failure
resulting from Participant’s incapacity due to physical or mental disability); or (viii) a breach by Participant of any of the Company’s policies and procedures, including but not
limited to the Company’s Code of Business Conduct & Ethics.
1
“Change in Corporate Control” shall have the same meaning as set forth in Section 10.1(a) of the Equity Plan and Section 10.1(c) of the Equity Plan. In addition, in
order to qualify as a “Change in Corporate Control”, an event must also meet the requirements for a “change in the ownership or effective control of a corporation, or a change
in the ownership of a substantial portion of the assets of a corporation” with the meaning of Treas. Reg. §1.409A-3(i)(5).
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Stock” or “Shares” means the Company’s common stock, par value $1.00 per share, either currently existing or authorized hereafter.
“Common Stock Price” means, as of a particular date, the average of the Fair Market Value of one share of Common Stock over the 20 consecutive trading days
ending on, and including such date (or if such date is not a trading day, the most recent trading day immediately preceding such date); provided that, if such date is the date
upon which a Change in Corporate Control occurs, the Common Stock Price as of such date shall be equal to the fair value, as determined by the Compensation Committee, of
the total consideration paid or payable in the transaction resulting in the Change in Corporate Control for one share of Common Stock.
“Compensation Committee” means the Compensation Committee of the Board of Directors of the Company.
“Disability” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the
Company immediately prior to such termination, and “Disability” is defined therein, then “Disability” shall have the meaning set forth in such employment agreement, or (b) if
the Participant is not party to an employment agreement with the Company that defines “Disability,” then “Disability” shall have the same meaning as defined in the Equity
Plan.
“Dividend Value” means the aggregate amount of dividends and other distributions paid on one Share for which the record date occurred on or after the first day of the
Restrictive Determination Period and prior to the final settlement date at which shares of Common Stock are issued to a Participant (excluding dividends and distributions paid
in the form of additional Shares).
“Earned Award” means, with respect to a Participant’s Performance Award, the actual number of shares of Common Stock that were earned by such Participant
pursuant to this Program at the end of the Performance Period based on the achievement of the performance goals set forth in Section 5.
“Equity Plan” means the Welltower Inc. 2016 Long-Term Incentive Plan, as amended from time to time.
“Fair Market Value” means, as of any given date, the fair market value of a security which shall be the closing sale price reported for such security on the principal
national securities exchange on which the security is publicly traded or, if not applicable, any other national securities exchange on which the security is traded or admitted to
trading on such date on which a sale was reported. If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such
date for which there are market quotations.
“Good Reason” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the
Company immediately prior to such termination, and “good reason” is defined therein, then “Good Reason” shall have the meaning set forth in such employment agreement, or
(b) if the Participant is not party to an employment agreement with the Company immediately prior to such termination and/or the Participant’s employment agreement does not
define “Good Reason”: (i) a substantial adverse change, not consented to by the Participant, in the nature or scope of the Participant’s responsibilities, authorities, powers,
functions, or duties; or (ii) a breach by the Company of any of its material obligations under the Program. Unless otherwise provided in an employment agreement to which the
Participant is a party immediately prior to such termination, to constitute “good reason termination,” the Participant must: (1) provide written notice to the Company within 90
days of the initial existence of the event constituting “Good Reason;” (2) may not terminate his or her employment unless the Company fails to substantially remedy the event
constituting “Good Reason” within 30 days after such notice has been given; and (3) the Participant must terminate employment with the Company no later than 30 days after
the end of the 30-day period in which the Company fails to substantially remedy the event constituting “Good Reason.”
104416625v2
2
“Health Care Facilities” means any senior housing facilities or facilities used or intended primarily for the delivery of health care services, including, without
limitation, any active adult communities, independent living facilities, assisted living facilities, skilled nursing facilities, inpatient rehabilitation facilities, ambulatory surgery
centers, outpatient medical treatment facilities, medical office buildings, hospitals not excluded below, or any similar types of facilities or enterprises, but in any event
excluding acute care hospitals or integrated health care delivery systems that include acute care hospitals.
“Health Care REIT Index” means the FTSE NAREIT Health Care REIT Index (or a successor index including a comparable universe of publicly traded U.S. real
estate investment trusts), in each case adjusted and reweighted to exclude the Company from the index. As of the beginning of the Performance Period, the FTSE NAREIT
Health Care REIT Index (excluding the Company) was comprised of (1) Ventas, Inc, (2) Healthpeak Properties, Inc., (3) Omega Healthcare Investors, (4) Healthcare Trust of
America, Inc., (5) Healthcare Realty Trust, (6) National Health Investors, (7) Medical Properties Trust, (8) Community Healthcare Trust, Inc., (9) Sabra Health Care REIT, (10)
LTC Properties, (11) New Senior Investment Group, (12) Physicians Realty Trust, (13) Universal Health Realty Income Trust, (14) Care Trust REIT, (15) Diversified
Healthcare Trust, and (16) Global Medical REIT. Any health care REIT organization that is not in existence for the entire Performance Period shall be omitted from this index.
“Index Return” means, with respect to the Performance Period, the return of either the Health Care REIT Index, or the All REIT Index, as applicable, over the
Performance Period expressed as a percentage. For the avoidance of doubt, the intent of the Compensation Committee is that Index Return over the Performance Period be
calculated in a manner designed to produce a fair comparison between the Company’s TSR and the Index Return for the purpose of determining Relative Performance. In the
case of the Health Care REIT Index, the Index Return shall be computed as the sum of each component company’s weighted TSR with each component company’s weight as
the average of its relative market capitalization at the beginning of the Performance Period.
“Net Debt + Preferred” means the sum of (a) the Company’s long-term debt, less cash and cash equivalents, and (b) the total amount of the Company’s preferred stock
as of the end of the Performance Period (or other applicable designated period).
“Participant” means an executive or employee of the Company or any Subsidiary selected by the Compensation Committee to participate in the Program.
“Performance Award” means an award, expressed as a number of restricted stock units reflecting achievement of the Target Award. Such number of restricted stock
units shall be equal to the sum arrived at by (1) applying the weighting of each applicable performance goal set forth on Exhibit A to the aggregate target value of the award
(expressed in dollars) established by the Compensation Committee at the time of grant, (2) dividing the weighted target value for each performance goal by the applicable
probability-adjusted fair value per share of Common Stock (as described in further detail in Exhibit A), and (3) rounding to the nearest whole share of Common Stock, that
vests upon the achievement of performance goals at the end of a Performance Period.
“Performance Period” means the period commencing on January 1, 2021 and concluding on the earlier of (i) December 31, 2023, or (ii) a Change in Corporate
Control.
“Program” means this Welltower Inc. 2021-2023 Long-Term Incentive Program, as amended from time to time.
“Qualified Termination” means termination of a Participant’s employment for Good Reason, by reason of the Participant’s death, Disability, by the Company without
Cause, Retirement and in the case of a Participant who is party to a fixed-term employment agreement with the Company, a non-renewal by the Company of the term of such
agreement.
“Relative Performance” means the Company’s TSR relative to the applicable Index Return, as expressed as an Annualized TSR Percentage.
“Restricted Period” means a period of one year for a Participant holding the title of Senior Vice President or above at the time of termination of employment and a
period of six (6) months for a Participant holding the title of Vice President at the time of termination of employment. For any Participant holding a title below the level of Vice
President (including but not limited to Assistant Vice President, Director or Manager), there shall be no post-employment Restricted Period.
104416625v2
3
“Restrictive Determination Period” means (a) the Performance Period in the case of a Performance Award and (b) the period of time during which the applicable Time
Restriction has not yet fully lapsed in the case of a Time-Based Award.
“Retirement” means the voluntary termination of employment by a Participant after attaining age 55 and completing ten consecutive full years of service; provided,
however, that the sum of the Participant’s age and consecutive full years of service to the Company shall be equal to 70 or more; and provided further that the Participant (a)
delivers to the Company, so that the Company receives or is deemed to have received in accordance with Section 12(i) at least six months prior to the date of his or her
retirement, written notice specifying such retirement date, (b) remains in the continuous service of the Company from the date the written notice is received until his or her
retirement date, and (c) enters into a retirement agreement with the Company in such form as shall be determined by the Company from time to time that includes both (i) a
customary release of claims covering the Company and its affiliates, and (ii) an affirmation of continued compliance with the non-competition, non-solicitation, non-
disparagement and non-disclosure covenants in favor of the Company and related persons as set forth in Section 4.
“Target Award” means a Participant’s target award, expressed as a number of restricted stock units, for the Performance Period, as set forth in the Participant’s Award
Notice.
“Time-Based Award” means an award, expressed as a number of options and/or restricted stock units, that vests upon the lapse of the Time Restriction. (A Time-Based
Award is a type of “Other Stock Unit Award” as classified under the Equity Plan.)
“Time Restriction” means the period of time set forth in the Award Notice during which a Time-Based Award (or portion thereof) is unvested and forfeitable based on
the completion of periods of continued employment with the Company or as otherwise expressly set forth in this Program.
“Total Shareholder Return” or “TSR” means for the common stock of the applicable company, the total shareholder return (share price appreciation/depreciation
during the applicable Performance Period plus the value attributable to reinvested dividends paid on the shares during the applicable Performance Period). The TSR shall be
expressed as a percentage. The calculation of TSR will be based on the average closing price of the shares for the twenty trading days immediately preceding the first day of the
Performance Period and the average closing price of the shares for the twenty trading days immediately preceding the last day of the applicable Performance Period. The TSR
will be calculated assuming that cash dividends (including extraordinary cash dividends) paid on the shares are reinvested in additional shares on the ex-dividend date and that
any securities distributed to shareholders in a spinoff transaction are sold and the proceeds reinvested in additional shares on the ex-dividend date.
“Vested Unit Award” means a Time-Based Award (or portion thereof) that is fully vested and nonforfeitable due to the lapse of the applicable Time Restriction.
3.
Administration
(a)
The Program shall be administered by the Compensation Committee in accordance with the Equity Plan. The Compensation Committee shall have
the discretionary authority to make all determinations (including, without limitation, the interpretation and construction of the Program and the determination of relevant facts)
regarding the entitlement to any Award hereunder and the amount of any Award to be paid under the Program (including the number of shares of Common Stock issuable to any
Participant), provided such determinations are not made in bad faith and are not inconsistent with the terms, purpose and intent of the Program. The Compensation Committee
may delegate to one or more officers or employees of the Company some or all of its authority to administer the Program as described in this Section 3, and in the event of such
delegation, references to the Compensation Committee in this Section 3 shall apply in the same manner to such delegate or delegates to the extent of such delegated authority.
In particular, but without limitation and subject to the foregoing, the Compensation Committee shall have the authority:
(i)
to select Participants under the Program in its sole discretion;
for each Participant and such individual’s Performance Award and to determine the Earned Award;
(ii)
with respect to Performance Awards, to determine the Target Award and any formula or criteria for the determination of the Target Award
(iii)
with respect to Time-Based Awards, to determine the applicable Time Restriction;
104416625v2
4
instruments evidencing an Award hereunder, including the waiver or modification of any such conditions;
(iv)
to determine the terms and conditions, consistent with the terms of this Program, which shall govern Award Notices and all other written
advisable; and
(v)
to adopt, alter and repeal such administrative rules, guidelines and practices governing the Program as it shall from time to time deem
relating thereto) and to otherwise supervise the administration of the Program.
(vi)
to interpret the terms and provisions of the Program and any Award granted under the Program (and any Award Notices or other agreements
(b)
Subject to the terms hereof, all decisions made by the Compensation Committee (or any officer or employee of the Company to whom it has
delegated some or all of its authority to administer the Program) not made in bad faith pursuant to the Program shall be final, conclusive and binding on all persons, including
the Company and the Participants. No member of the Compensation Committee, and no officer or employee of the Company acting on behalf of the Compensation Committee,
shall be personally liable for any action, determination, or interpretation taken or made not in bad faith with respect to this Program, and all members of the Compensation
Committee and each and every officer or employee of the Company acting on their behalf shall, to the fullest extent not prohibited by law, be fully indemnified and protected
by the Company in respect of any such action, determination or interpretation.
4.
Conditions of Participation
As a condition of entitlement to participate in the Program, whether or not the Participant receives any payment or other benefit under the Program, each Participant
shall comply with the following restrictive covenants.
(a) Protection of Confidential Information. Participant, both during employment with the Company and thereafter, shall not, directly or indirectly, disclose or make
available to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, any Confidential Information (as defined below) except as may be
required for Participant to perform in good faith his or her job responsibilities to the Company while employed by the Company. Upon Participant’s termination of employment,
Participant shall return to the Company all Confidential Information and shall not retain any Confidential Information in Participant’s possession that is in written or other
tangible form and shall not furnish any such Confidential Information to any third party, except as provided herein. Notwithstanding the foregoing, this Section 4(a) shall not
apply to Confidential Information that (i) was publicly known at the time of disclosure to Participant, (ii) becomes publicly known or available thereafter other than by any
means in violation of this Section 4 or any other duty owed to the Company by Participant, (iii) is lawfully disclosed to Participant by a third party, or (iv) is required to be
disclosed by law or by any court, arbitrator or administrative or legislative body with actual or apparent jurisdiction to order Participant to disclose or make accessible any
information or is voluntarily disclosed by Participant to law enforcement or other governmental authorities. Furthermore, in accordance with the Defend Trade Secrets Act of
2016, Participant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a
federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law;
or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. As used in this Program, Confidential Information
means, without limitation, any non-public confidential or proprietary information disclosed to Participant or known by Participant as a consequence of or through Participant’s
relationship with the Company, in any form, including electronic media. Confidential Information also includes, but is not limited to the Company’s business plans and
financial information, marketing plans, and business opportunities. Nothing herein shall limit in any way any obligation Participant may have relating to Confidential
Information under any other agreement, promise or duty to the Company.
(b) Non-Competition. In the course of the performance of Participant’s job responsibilities for the Company, Participant has obtained and will continue to obtain
extensive and valuable knowledge and information concerning the Company’s business (including confidential information relating to the Company and its operations,
intellectual property, assets, contracts, customers, personnel, plans, marketing plans, research and development plans and prospects). Accordingly, during employment with the
Company and for the applicable Restricted Period following Participant’s termination of employment, Participant will not engage in any business activities on behalf of any
enterprise which competes with the Company or any of its affiliates in the business of (i) ownership or operation of Health Care Facilities; (ii) investment in or lending to
Health Care Facilities (including to an owner or developer of Health Care Facilities); (iii) management of Health Care Facilities; or (iv) provision of any consulting, advisory,
research or planning or development services to Health Care Facilities.
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Participant will be deemed to be engaged in such competitive business activities if Participant participates in such a business enterprise as an employee, officer,
director, consultant, agent, partner, proprietor, or other participant; provided that the ownership of no more than two percent (2%) of the stock of a publicly traded corporation
engaged in a competitive business shall not be deemed to be engaging in competitive business activities. If Participant provides services to an enterprise that has some activities
that compete with the Company or any of its affiliates in any area described above and other activities that do not compete with the Company or any of its affiliates in any of
the areas described above, then so long as Participant provides services exclusively to the portion of such enterprise that does not compete with the Company and its affiliates,
Participant will not be deemed to be engaged in a competitive business activity as described in this Section 4(b).
(c) Non-Solicitation. During employment with the Company and for one year following the end of Participant’s employment with the Company, Participant, to the
fullest extent not prohibited by applicable law, directly or indirectly, individually or on behalf of any other person or entity, including Participant, will not encourage, induce,
attempt to induce, recruit, attempt to recruit, solicit or attempt to solicit or participate in any way in hiring or retaining for employment, contractor or consulting opportunities
anyone who is employed or providing full-time services as a consultant at that time by the Company or any subsidiary or affiliate of the Company.
(d) Non-Disparagement. At all times during and following Participant’s employment with the Company, Participant will not make or direct anyone else to make on
Participant’s behalf any disparaging or untruthful remarks or statements, whether oral or written, about the Company, its operations or its products, services, affiliates, officers,
directors, employees, or agents, or issue any communication that reflects adversely on or encourages any adverse action against the Company. Participant will not make any
direct or indirect written or oral statements to the press, television, radio, on social media or to, on or through other media or other external persons or entities concerning any
matters pertaining to the business and affairs of the Company, its affiliates or any of its officers or directors. The restrictions described in this paragraph shall not apply to any
truthful statements made in response to a subpoena or other compulsory legal process or to law enforcement or other governmental authorities.
(e) Remedies. For the avoidance of doubt, any breach of any of the provisions in this Section 4 shall constitute a material breach by Participant. Among the
remedies that the Company may pursue in the event that such breach occurs prior to the occurrence of a Change in Corporate Control, an Award (including an Earned Award
and Vested Unit Award) granted under this Program and shares of Common Stock issued under this Program to a Participant shall be subject to forfeiture in the event that a
Participant breaches any provision of Section 4 herein. Notwithstanding any other provision of this Program, by becoming entitled to receive any payments or other benefits
under this Program, Participant is deemed to have agreed that damages would be an inadequate remedy for the Company in the event of a breach or threatened breach by
Participant of any of Sections 4(a) through 4(d), inclusive. In the event of any such breach or threatened breach, and without relinquishing any other rights or remedies that the
Company may have, including but not limited to the forfeiture or repayment by Participant of any payments or benefits otherwise payable or paid to Participant under this
Program, the Company may, either with or without pursuing any potential damage remedies and without being required to post a bond, obtain from a court of competent
jurisdiction, and enforce, an injunction prohibiting Participant from violating this Section 4 and requiring Participant to comply with its provisions. The Company may present
this Section 4 to any third party with which Participant may have accepted employment, or otherwise entered into a business relationship, that the Company contends violates
this Section 4, if the Company has reason to believe Participant has or may have breached a provision of this Section 4.
5.
Determination of Awards
threshold, target, and high payout multiples or Time Restriction.
(a)
Each Participant’s Award Notice shall specify, as applicable, such Participant’s Target Award (expressed as a number of restricted stock units) and
(b)
With regard to a Performance Award, the percentage of a Participant’s Target Award that may be earned for the Performance Period shall be
determined as follows: 37.5 percent of the Target Award shall be earned based on the Company’s Relative Performance to the Health Care REIT Index; 37.5 percent of the
Target Award shall be earned based on the Company’s Relative Performance to the All REIT Index; and 25 percent of the Target Award shall be earned based on the Company’s
(Net Debt + Preferred) / Adjusted Annualized EBITDA ratio; all as further set forth on Exhibit A.
(c)
Depending on the score for each of the performance goals of a Performance Award as determined pursuant to Exhibit A, the Earned Award for the
Performance Period shall be determined based on the Participant’s individual threshold, target and high payout multiples described in the Participant’s Award Notice. For
performance between two different tiers, the percentage payable shall be calculated using linear interpolation between tiers. The level of achievement for each listed
performance goal shall be determined independently.
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Grant; provided, that such an Award Notice may permit pro rata vesting over such time.
(d)
With regard to a Time-Based Award, the Time Restriction included in the Award Notice shall generally not be less than three years from the Date of
(e)
requirements as set forth in Section 8.
Except as otherwise provided herein, the Earned Award and Vested Unit Award shall be settled in shares of Common Stock upon satisfaction of the
6.
Change in Corporate Control. In the event that prior to December 31, 2023, a Change in Corporate Control occurs, then the following provisions shall
apply:
(a)
In the case of a Performance Award, each such outstanding Award will be deemed earned as of the date of such Change in Corporate Control in
accordance with the computation described in Section 5(b) as if the Performance Period ended on the day prior to the consummation of the Change in Corporate Control, except
that corporate metrics not tied to TSR shall be calculated based on the results through the most recent completed fiscal quarter, but each Award shall further be multiplied by a
fraction, the numerator of which shall be the number of full and partial months from the beginning of the Performance Period through the Change in Corporate Control and the
denominator of which shall be 36. Notwithstanding Sections 4 and 8(b), any shares of Common Stock issued to satisfy such outstanding Earned Awards shall be fully vested
and nonforfeitable.
In the case of a Time-Based Award, the Time Restriction applicable to such Time-Based Award shall lapse in its entirety and such award shall
become a Vested Unit Award if either (i) the successor company (or a subsidiary thereof) does not assume, convert, continue or otherwise replace such other awards on
proportionate and equitable terms or (ii) the Participant is terminated without Cause upon or within 12 months following the Change in Corporate Control.
(b)
7.
Termination of Participant’s Employment.
If a Participant’s employment with the Company terminates, the provisions of this Section 7 shall govern the treatment of the Participant’s Award
exclusively, regardless of the provisions of any employment, change in control or other agreement or arrangement to which the Participant is a party, or any termination or
severance policies of the Company then in effect, which shall be superseded by this Program.
(a)
Determination Period, then the following provisions shall apply:
(b)
In the event of termination of a Participant’s employment by reason of a Qualified Termination prior to the end of the applicable Restrictive
(i)
In the case of a Performance Award, the Compensation Committee shall determine the Participant’s Earned Award in accordance with the
computation described in Section 5(b) as if the Performance Period ended on the calendar quarter end immediately preceding the date of the Participant’s Qualified
Termination; provided, however, that the Earned Award of such terminated Participant for the Performance Period shall be multiplied by a fraction, the numerator of which
shall be the number of complete months during which the Participant was an employee of the Company during the Performance Period and the denominator of which shall be
the total number of months in the Performance Period. The pro-rated Earned Award shall be paid out in shares of Common Stock that are fully vested.
In the case of a Time-Based Award, the Participant shall retain the portion of the Time-Based Award that is a Vested Unit Award. Unless
otherwise determined by the Compensation Committee, the unvested portion of the Time-Based Award shall, without payment of any consideration by the Company,
automatically and without notice terminate, be forfeited and be and become null and void and neither the Participant nor any of his or her successors, heirs, assigns, or personal
representatives will thereafter have any further rights or interests in such unvested portion of the Time-Based Award.
(ii)
In the event of termination of a Participant’s employment by reason of a Qualified Termination after the end of the applicable Restrictive
Determination Period, any portion of the Participant’s Earned Award or Time-Based Award that has not yet been settled shall become fully vested and shall be paid out in
shares of Common Stock.
(c)
As a condition of receiving any payments or benefits under this Program on account of Participant’s Qualified Termination, the Company may, in its
sole discretion, require Participant to deliver an irrevocable, effective release of claims in the form determined by the Company and/or an affirmation of continued compliance
with the non-competition, non-solicitation, non-disparagement and non-disclosure covenants in favor of the Company and related persons as set forth in Section 4.
(d)
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(e)
In the event of a termination of a Participant’s employment for any reason other than a Qualified Termination prior to the end of the applicable
Restrictive Determination Period, except as otherwise set forth in the Participant’s Award Notice or as otherwise determined by the Compensation Committee, the Award held
by the Participant during the Performance Period or portion of the Award for which the Time Restriction has not lapsed shall, without payment of any consideration by the
Company, automatically and without notice terminate, be forfeited and be and become null and void, and neither the Participant nor any of his or her successors, heirs, assigns,
or personal representatives will thereafter have any further rights or interests in such Award. In the event of a termination of a Participant’s employment for any reason other
than a Qualified Termination after the end of the applicable Restrictive Determination Period, any portion of the Earned Award or Time-Based Award that has not yet been
settled in shares of Common Stock shall be forfeited.
8.
Payment of Awards.
(a)
As soon as practicable following the end of the applicable Restrictive Determination Period:
(i)
The portion of a Time-Based Award for which the Time Restriction has lapsed shall be settled in shares of Common Stock; and
with respect to the Performance Period.
(ii)
In the case of a Performance Award, the Compensation Committee shall determine the amount of each Participant’s Earned Award, if any,
The date on which such settlement of the Awards occurs shall be referred to herein as the “Issuance Date”. In no event shall the Issuance Date with respect to the end of the
Restrictive Determination Period for an Award be later than 74 days after the end of the applicable Restrictive Determination Period or on such later date as provided by the
Compensation Committee (or in the case of a Performance Award, as set forth under Section 8(b) below); provided that (i) in the case of the Performance Period (in the case of
a Performance Award) or Time Restriction (in the case of a Time-Based Award) that ends upon a Change in Corporate Control, the Issuance Date shall be no later than
immediately prior to the consummation of the Change in Corporate Control, and (ii) in the case of a determination required by Section 7(b), the Issuance Date shall generally be
no later than 74 days after the date of the Participant’s Qualified Termination or on such later date as provided by the Compensation Committee.
(b)
Except as otherwise provided in Sections 6 and 7, on the vesting date described below, the Company shall issue to each Participant (or such
Participant’s estate or beneficiary, if applicable) with regard to a Performance Award a number of shares of Common Stock equal to the vested portion of the Earned Award.
Subject to a Participant’s continued employment with the Company or a subsidiary and continued compliance with the restrictive covenants set forth in Section 4 through such
date, the Shares subject to a Participant’s Earned Award shall be vested as of the date that the Compensation Committee shall determine the amount of each Participant’s Earned
Award, if any, with respect to the Performance Period. In addition, on the vesting date (or on the Issuance Date with regard to an Earned Award settled in accordance with
Section 6 or 7), the Company shall pay in cash to each Participant (or such Participant’s estate or beneficiary, if applicable) an amount equal to the Dividend Value multiplied
by the number of Shares issued pursuant to Section 6, Section 7 or this Section 8(b) on such date.
(c)
Except as otherwise provided in Sections 6 and 7, the Company shall issue to each Participant (or such Participant’s estate or beneficiary, if
applicable) with regard to a Time-Based Award a number of shares of Common Stock equal to the vested portion of the Time-Based Award on the Issuance Date. In addition,
on the Issuance Date, the Company shall pay in cash to each Participant (or such Participant’s estate or beneficiary, if applicable) an amount equal to the Dividend Value
multiplied by the number of Shares issued pursuant to Section 6, Section 7 or this Section 8(c) on such date.
9.
Adjustments. Without duplication with the provisions of Sections 3 and 11 of the Equity Plan, if (i) the Company shall at any time be involved in a merger,
consolidation, dissolution, liquidation, reorganization, exchange of Shares, sale of all or substantially all of the assets or Shares of the Company or a transaction similar thereto,
(ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization, or other similar change in the capital structure of the Company, or
any distribution to holders of Shares other than ordinary cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Compensation Committee
necessitates action by way of adjusting the terms of the Program, then and in that event, the Compensation Committee shall take such action as shall be necessary to maintain
the Participants’ rights hereunder so that they are substantially the same rights existing under this Program prior to such event.
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8
10.
Restrictions and Conditions; Non-Transferability of Awards. Subject to the provisions of the Equity Plan and this Program, except as may otherwise be
permitted by the Compensation Committee, a Participant shall not be permitted voluntarily or involuntarily to sell, assign, transfer, or otherwise encumber or dispose of the
options, restricted stock units or an Award; provided that the foregoing restriction shall not apply to Shares actually issued to a Participant.
11.
Withholding of Tax. Unless otherwise agreed to between the Company and a Participant, the Company will cause the required minimum tax withholding
obligation (or such other rate that will not cause an adverse accounting consequence or cost) to be satisfied by withholding a number of Shares to be issued to a Participant with
an aggregate Fair Market Value that would satisfy the withholding amount due. The Company’s obligation to deliver stock certificates (or evidence of book entry) to any
Participant is subject to and conditioned on tax withholding obligations being satisfied by such Participant or through the Company’s exercise of its authority. The
Compensation Committee expressly provides that the required minimum tax withholding obligation (or such other rate that will not cause an adverse accounting consequence
or cost) of an Award granted to a Participant who is an officer within the meaning of Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended, shall
be satisfied by withholding a number of whole Shares to be issued to the Participant with an aggregate Fair Market Value that fully satisfies the withholding amount due.
12.
Miscellaneous.
any Participant, but no such amendment shall adversely affect the rights of the Participants with regard to outstanding Awards in any material respect.
(a)
Amendment and Termination. The Company reserves the right to amend or terminate the Program at any time in its discretion without the consent of
No Contract for Continuing Services. This Program shall not be construed as creating any contract for continued services between the Company or
any of its Subsidiaries and any Participant, and nothing herein contained shall give any Participant the right to be retained as an employee or consultant of the Company or any
of its Subsidiaries or to receive any future awards or benefits under the Equity Plan.
(b)
Governing Law. The Program and each Award Notice awarded under the Program shall be construed in accordance with and governed the laws of
the State of Ohio, without regard to principles of conflict of laws of such state; provided, however, that matters of corporate law, including the issuance of shares of Common
Stock, shall be governed by the General Corporation Law of the State of Delaware.
(c)
(d)
Arbitration. Subject to Section 4(e) hereof, all claims, disputes, questions, or controversies arising out of or relating to this Program, will be
resolved exclusively in final and binding arbitration held under the auspices of Judicial Arbitration & Mediation Services, Inc. (“JAMS”) in accordance with JAMS then current
Employment Arbitration Rules and Procedures, or successor rules then in effect. The arbitration will be held in New York, New York, and will be conducted and administered
by JAMS or, in the event JAMS does not then conduct arbitration proceedings, a similarly reputable arbitration administrator. Participant and the Company will select a
mutually acceptable, neutral arbitrator from among the JAMS panel of arbitrators. Except as provided by this Program, the Federal Arbitration Act will govern the
administration of the arbitration proceedings. The arbitrator will apply the substantive law (and the law of remedies, if applicable) of the State of Ohio, or federal law, if Ohio
law is preempted, and the arbitrator is without jurisdiction to apply any different substantive law. Participant and the Company will each be allowed to engage in adequate
discovery, the scope of which will be determined by the arbitrator consistent with the nature of the claim(s) in dispute. The arbitrator will have the authority to entertain a
motion to dismiss and/or a motion for summary judgment by any party and will apply the standards governing such motions under the Federal Rules of Civil Procedure. The
arbitrator will render a written award and supporting opinion that will set forth the arbitrator’s findings of fact and conclusions of law. Judgment upon the award may be entered
in any court of competent jurisdiction. The Company will pay the arbitrator’s fees, as well as all administrative fees, associated with the arbitration. Each party will be
responsible for paying its own attorneys’ fees and costs (including expert witness fees and costs, if any), provided, however, that the arbitrator may award attorney’s fees and
costs to the prevailing party, except as prohibited by law. If the Company is the prevailing party, the arbitration may award some or all of the costs for the arbitrator’s fees
and/or other administrative fees to the fullest extent not prohibited by law. The existence and subject matter of all arbitration proceedings, including, any settlements or awards
thereunder, shall remain confidential.
singular form of words shall be extended to include the plural; and the plural shall be restricted to mean the singular.
(e)
Construction. Wherever appropriate, the use of the masculine gender shall be extended to include the feminine and/or neuter or vice versa; and the
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9
numbers and the text of this Program, the text shall control.
(f)
Headings. The Section headings and Section numbers are included solely for ease of reference. If there is any conflict between such headings or
plans, programs or policies.
(g)
Effect on Other Plans. Nothing in this Program shall be construed to limit the rights of Participants under the Company’s or its Subsidiaries’ benefit
(h)
Clawback Policy. All Awards granted under this Program shall be subject to forfeiture (as determined by the Compensation Committee) in
accordance with the terms of the Company’s clawback or recoupment policy (as in effect from time to time). Furthermore, prior to the occurrence of a Change in Corporate
Control, an Award (including an Earned Award and Vested Unit Award) granted under this Program and shares of Common Stock issued under this Program to a Participant
shall be subject to forfeiture in the event that a Participant breaches any provision of Section 4 herein.
or registered mail (return receipt requested), postage prepaid, addressed as follows (or to such other address as such party may designate in writing from time to time):
(i)
Notices. Any notice provided for under this Program shall be in writing and may be delivered in person or sent by overnight courier, certified mail,
If to the Company: Welltower Inc., 4500 Dorr Street, Toledo, OH 43615 Attention: Legal Department
If to a Participant, at the address on file with the Company’s Human Resources Department.
The actual date of mailing, as shown by a mailing receipt therefor, shall determine the time at which notice was given. Any Participant may change the address at which notice
shall be given by notifying the Company in the manner set forth in this Section 12(i). The Company may change the address at which notice shall be given by notifying each
Participant in the manner set forth in this Section 12(i).
(j) Section 409A.
(1) This Program is intended to comply with Section 409A of the Code (“Code Section 409A”) and will be interpreted in a manner intended to comply with
Code Section 409A. Any provision that would cause this Program or any payment hereunder to fail to satisfy Code Section 409A of the Code shall have no force or effect until
amended to the minimum extent required to comply with Code Section 409A, which amendment may be retroactive to the extent permitted by Code Section 409A. A
termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits that may be
considered “deferred compensation” under Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A) upon
or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such
provision of this Program, references to a “retirement,” “termination,” “termination of employment” or like terms shall mean such a “separation from service”.
(2) Any payment scheduled to be made under this Program that may be considered made under a “nonqualified deferred compensation plan” subject to
Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A), that are otherwise due on or within the six-
month period following termination of employment will accrue during such six-month period and will instead become payable in a lump sum payment on the first business day
period following such six-month period. Furthermore, notwithstanding any contrary provision herein, if any other payments of money or other benefits due to a Participant
under this Agreement could cause the application of an accelerated or additional tax under Code Section 409A, such payments or other benefits shall be deferred if deferral will
make such payment or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner,
determined by the Company, that does not cause such an accelerated or additional tax.
treated as a “separate payment” within the meaning of Code Section 409A.
(3) Notwithstanding any contrary provision herein, a Participant’s right to any payment (including each installment payment) under this Program shall be
END OF PROGRAM DOCUMENT
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Exhibit A
2021-2023 LTI – Forward Looking
Weighting
4
Threshold
Target
5
High
1
Relative Performance to Health Care REIT Index
2
Relative Performance to All REIT Index (MSCI)
3
(Net Debt + Preferred) / Adjusted Annualized EBITDA
37.5%
37.5%
25%
-400 bps
-400 bps
6.9x
0 bps
0 bps
6.4x
+ 400 bps
+ 400 bps
5.9x
1. Matching the index performance is achievement at the “Target” level. Exceeding index performance by 400 basis points results in payout at the “High” level, which is the
maximum payout level. Trailing index performance by 400 basis points results in a payout at the “Threshold” level.
2. Same as #1 above.
3. The “Target” payout level is set at the (Net Debt + Preferred)/Adjusted Annualized EBITDA ratio of 6.4x. “Threshold” will be met at a ratio at 6.9x. The “High” payout
level will be met at a ratio at or below 5.9x.
4. “Threshold” payout is 50% of the “Target” level for all participants.
5. “High” payout is 150% of the “Target” level for all Participants.
The Monte Carlo fair value of the Common Stock (in other words, the probability-adjusted fair value) as of the grant date will be used to determine the number of restricted
stock units granted (assuming “Target” level performance) with respect to each of the relative TSR related measures. The closing stock price on the grant date will be used to
determine the number of restricted stock units granted (assuming “Target” level performance) for the (Net Debt + Preferred)/ Adjusted Annualized EBITDA measure.
In the event the Company’s performance shall fall between two levels in the above chart, linear interpolation shall be used to determine the percentage of the Target Award
earned.
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Exhibit 10.17(b)
THIS LONG-TERM INCENTIVE PROGRAM AWARD AGREEMENT (the “Agreement”), made this [____________], 2021, between Welltower Inc., a
Delaware corporation (the “Corporation”), and [________________] (the “Participant”).
LONG-TERM INCENTIVE PROGRAM AWARD AGREEMENT
WHEREAS, the Participant is an employee of the Corporation; and
WHEREAS, the Corporation adopted the Welltower Inc. 2016 Long-Term Incentive Plan (the “Plan”) and the 2021-2023 Long-Term Incentive Program (the “LTIP”)
in order to provide select executives and key employees with incentives to achieve long-term corporate objectives; and
WHEREAS, the Compensation Committee of the Corporation’s Board of Directors has determined that the Participant should be granted a restricted stock unit award
subject to performance-based vesting conditions and/or time-based vesting conditions on the terms set forth in the LTIP and herein;
WHEREAS, the restricted stock unit award granted to the Participant shall be payable in shares of the Corporation’s common stock, $1.00 par value per share
(“Common Stock”), upon the satisfaction of the conditions set forth below and in accordance with the terms of the LTIP.
WHEREAS, any options granted to the Participant hereunder shall be exercised for shares of Common Stock upon the satisfaction of the conditions set forth below
and in accordance with the terms of the LTIP.
NOW, THEREFORE, in consideration of the past and future services provided to the Corporation by the Participant and the various covenants and agreements herein
contained, and intending to be legally bound hereby, the parties hereto agree as follows:
1.
GRANT OF AWARD.
The Corporation hereby grants to the Participant one or both of the following:
• A Performance Award of [____] performance-based restricted stock units (the “Target Award”) on February 16, 2021 (the “Date of Grant”), payable in
shares of Restricted Stock, subject to satisfaction of the restrictions, vesting conditions and other terms set forth in this Agreement.
• An Other Stock Unit Award (the “Time-Based Award”) of [____] time-based restricted stock units and/or [_____] time-based options on the Date of
Grant, which shall vest subject to the Participant’s continued employment, in accordance with the following schedule: one-fourth of such shares will
become fully vested and nonforfeitable on January 15, 2022, one-fourth of such shares will become fully vested and nonforfeitable on January 15, 2023,
one-fourth of such shares will become fully vested and nonforfeitable on January 15, 2024, and one-fourth of such shares will become fully vested and
nonforfeitable on January 15, 2025 (each such date, the “Vesting Date”). Upon vesting, the restricted stock units shall become issuable in shares of
Common Stock and the options shall become exercisable for shares of Common Stock. The exercise price of any time-based options shall be $________.
Such options shall not have any common stock dividends or dividend equivalents paid and shall have a maximum term of ten years.
The Target Award and the Time-Based Award shall be referred to herein as the “Award”. The Participant shall not be required to provide the Corporation with any
payment (other than his or her past and future services to the Corporation or payment of the exercise price upon exercise of any exercisable options) in exchange for the Award
or in exchange for the issuance of shares of Common Stock (upon (1) the determination of the Earned Award and satisfaction of the applicable periods of continued service
with the Corporation in the case of a Performance Award or (2) the lapse of the applicable Time Restriction in the case of a Time-Based Award and the payment of the exercise
price in the case of exercisable options).
1
2.
DELIVERY OF SHARES.
(a) The Participant shall not be entitled to the issuance of shares of Common Stock or to receive any distributions with respect to the Performance Award or Time-
Based Award until the determination of the Earned Award (in the case of the Performance Award) as provided in the LTIP and in Section 3 or 6 below or lapse of the applicable
Time Restriction, and in the case of options, the payment of the exercise price (in the case of the Time-Based Award). Further, the Participant shall not have any of the rights
and privileges of a stockholder of the Corporation (including voting rights and the right to receive dividends) until the shares of Common Stock are issued to the Participant.
(b) The Participant’s Performance Award and Time-Based Award may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of by the
Participant, and the underlying shares of Common Stock potentially issuable to the Participant under this Agreement may not be sold, transferred, assigned, pledged or
otherwise encumbered by the Participant until such shares are so issued and cease to be subject to a risk of forfeiture. Any attempt to dispose of the Participant’s Award or
shares issued thereunder in a manner contrary to the restrictions set forth in this Agreement shall be ineffective, null and void.
3.
ISSUANCE OF SHARES.
The Corporation shall issue shares of Common Stock to the Participant in accordance with the provisions of Section 8 of the LTIP. Any shares of Common Stock
subject to options shall not be issued until exercised in accordance with Section 4.1 of the Plan.
4.
TAX WITHHOLDING.
The Corporation shall satisfy its tax withholding obligations in accordance with Section 11 of the LTIP.
5.
TERMINATION OF EMPLOYMENT.
In the event of the end of the Participant’s employment with the Corporation prior to the time that all vested shares of Common Stock, if any, are issued under the
LTIP, the Award shall be administered in accordance with Section 7 of the LTIP. Any options that are part of a Vested Unit Award shall remain exercisable after the end of the
Participant’s employment with the Corporation for the following periods (but in no event longer than the ten year maximum term of the options): (1) eighteen (18) months in
the event of the Participant’s death, (2) twelve (12) months in the event of the Participant’s Qualified Termination other than death, (3) three (3) months in the event of the
Participant’s termination of employment that is neither a Qualifying Termination nor for Cause, and (4) no period of time following the Participant’s termination of employment
in the event of a termination for Cause.
6.
DEFINITIONS.
Capitalized terms used herein without definitions shall have the meanings given to those terms in the LTIP.
7.
SECURITIES LAWS.
The Corporation may from time to time impose such conditions on the vesting of the Award, and/or the issuance of shares of Common Stock upon vesting (and in the
case of options, exercise) of the Award, as it deems reasonably necessary to ensure that any grant of the Award and issuance of shares of Common Stock under this Agreement
will satisfy the applicable requirements of federal and state securities laws. Such conditions may include, without limitation, the partial or complete suspension of the right to
receive shares of Common Stock until the Common Stock has been registered under the Securities Act of 1933, as amended. In all events, if the issuance of any shares of
Common Stock is delayed by application of this Section 7, such issuance shall occur on the earliest date on which it would not violate applicable law.
8.
GRANT NOT TO AFFECT EMPLOYMENT.
Neither this Agreement nor the Award granted hereunder shall confer upon the Participant any right to continued employment with the Corporation. This Agreement
shall not in any way modify or restrict any rights the Corporation may have to terminate such employment.
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9.
ADJUSTMENTS TO AWARD.
In the event of any change or changes in the outstanding Common Stock by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-
up, combination or any similar transaction, the Award granted to the Participant under this Agreement shall be adjusted by the Compensation Committee pursuant to Section
11.2 of the Plan in such manner as the Compensation Committee deems appropriate to prevent substantial dilution or enlargement of the rights granted to the Participant.
10.
MISCELLANEOUS.
(a)
(b)
This Agreement may be executed in one or more counterparts, all of which taken together will constitute one and the same instrument.
The terms of this Agreement may only be amended, modified or waived by a written agreement executed by both of the parties hereto.
Agreement and those of the Plan or the LTIP, the provisions of the Plan and the LTIP shall control.
(c)
The provisions of the Plan and LTIP are hereby made a part of this Agreement. In the event of any conflict between the provisions of this
(d)
The Award granted under this Agreement is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), under the exemption for “short-term deferrals” under Treasury Regulation Section 1.409A-1(b)(4), and shall be interpreted in a manner consistent
with the requirements for such exemption. To the extent that changes are necessary to ensure that the Award and any related dividend equivalent rights comply with any
additional requirements for such exemption imposed by future IRS guidance on the application of Section 409A of the Code, the Participant and the Corporation agree to
cooperate and work together in good faith to timely amend this Agreement so that the Award and any dividend equivalent rights will not be treated as deferred compensation
subject to the requirements of Section 409A of the Code.
The validity, performance, construction and effect of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to
principles of conflicts of law; provided, however, that matters of corporate law, including the issuance of shares of Common Stock, shall be governed by the General
Corporation Law of the State of Delaware.
(e)
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
PARTICIPANT WELLTOWER INC.
________________________________ By: __________________________
[Signature] [Signature]
Name: __________________________ Name: ___________________________
Title: ____________________________
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WELLTOWER INC.
2022-2024 LONG-TERM INCENTIVE PROGRAM
Exhibit 10.18(a)
1.
Purpose. This 2022-2024 Long-Term Incentive Program (the “Program”) is adopted pursuant to the Welltower Inc. 2016 Long-Term Incentive Plan (the
“Equity Plan”) and any successor equity plan and is intended to provide an incentive for superior work and to motivate executives and employees of Welltower Inc. (the
“Company”) toward even higher achievement and business results, to tie their goals and interests to those of the Company and its stockholders and to enable the Company to
attract and retain highly qualified executives and employees. The Program is for the benefit of Participants (as defined below).
2.
Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Equity Plan. In addition, as used herein:
“Adjusted Annualized EBITDA” means the Company’s earnings before interest, taxes, depreciation and amortization, excluding unconsolidated entities and including
adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/losses/impairments on properties, gains/losses on
derivatives and financial instruments, other expenses, and additional other income for the three month period beginning on October 1, 2024 and ending on December 31, 2024,
and then expressed on an annualized basis.
“All REIT Index” means the MSCI US REIT Index.
“Annualized TSR Percentage” means (1 + TSR)^(1/3) - 1.
“Award” means a grant to a Participant hereunder. The Company intends that while Awards may be granted under the Program in any form of grant permitted under
the Equity Plan not in conflict with the terms of the Program, the two types of Awards that are intended to be granted are (1) Performance Awards and (2) Time-Based Awards
in the form of Options and/or restricted stock units with vesting based on the completion of specified periods of continuous service with the Company and its subsidiaries.
“Award Notice” means the restricted stock unit or Option award agreement with a Participant that sets forth the terms, conditions and limitations of the Participant’s
participation in this Program, including, without limitation and as may be applicable, the Participant’s Target Award, the Participant’s threshold, target, and high payout
multiples and the Time Restriction.
“Cause” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the
Company immediately prior to such termination, and “Cause” is defined therein, then “Cause” shall have the meaning set forth in such employment agreement, or (b) if the
Participant is not party to an employment agreement with the Company immediately prior to such termination or the Participant’s employment agreement does not define
“Cause,” then “Cause” shall mean: (i) negligence or willful misconduct by the Participant in connection with the performance of his or her material duties as an employee of
the Company or any Subsidiary; (ii) a breach by the Participant of any of his or her material duties as an employee of the Company or any Subsidiary, including but not limited
to the provisions of Section 4 herein; (iii) conduct by the Participant against the best interests of the Company or any Subsidiary, including but not limited to a material act of
embezzlement or misappropriation of corporate assets, or a material act of statutory or common law fraud against the Company, any Subsidiary or the employees of either the
Company or any Subsidiary; (iv) conviction of, or plea of nolo contendere to, any crime that is a felony, involves moral turpitude, or was committed in connection with the
performance of Participant’s job responsibilities for the Company; (v) indictment of the Participant of a felony or a misdemeanor involving moral turpitude and such indictment
has a material adverse effect on the interests or reputation of the Company or any Subsidiary; (vi) the intentional and willful failure by Participant to substantially perform his
or her job responsibilities to the Company (other than any such failure resulting from Participant’s incapacity due to physical or mental disability) after a demand for substantial
performance is made by the Company; (vii) the failure by Participant to satisfactorily perform his or her job responsibilities to the Company (other than any such failure
resulting from Participant’s incapacity due to physical or mental disability); or (viii) a breach by Participant of any of the Company’s policies and procedures, including but not
limited to the Company’s Code of Business Conduct & Ethics.
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“Change in Corporate Control” shall have the same meaning as set forth in Section 10.1(a) of the Equity Plan and Section 10.1(c) of the Equity Plan. In addition, in
order to qualify as a “Change in Corporate Control”, an event must also meet the requirements for a “change in the ownership or effective control of a corporation, or a change
in the ownership of a substantial portion of the assets of a corporation” with the meaning of Treas. Reg. §1.409A-3(i)(5).
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Stock” or “Shares” means the Company’s common stock, par value $1.00 per share, either currently existing or authorized hereafter.
“Common Stock Price” means, as of a particular date, the average of the Fair Market Value of one share of Common Stock over the 20 consecutive trading days
ending on, and including such date (or if such date is not a trading day, the most recent trading day immediately preceding such date); provided that, if such date is the date
upon which a Change in Corporate Control occurs, the Common Stock Price as of such date shall be equal to the fair value, as determined by the Compensation Committee, of
the total consideration paid or payable in the transaction resulting in the Change in Corporate Control for one share of Common Stock.
“Compensation Committee” means the Compensation Committee of the Board of Directors of the Company.
“Disability” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the
Company immediately prior to such termination, and “Disability” is defined therein, then “Disability” shall have the meaning set forth in such employment agreement, or (b) if
the Participant is not party to an employment agreement with the Company that defines “Disability,” then “Disability” shall have the same meaning as defined in the Equity
Plan.
“Dividend Value” means the aggregate amount of dividends and other distributions paid on one Share for which the record date occurred on or after the first day of the
Restrictive Determination Period and prior to the final settlement date on which shares of Common Stock are issued to a Participant (excluding dividends and distributions paid
in the form of additional Shares). No dividends or other distributions shall be paid or accrued with respect to Shares subject to an Option.
“Earned Award” means, with respect to a Participant’s Performance Award, the actual number of shares of Common Stock that were earned by such Participant
pursuant to this Program at the end of the Performance Period based on the achievement of the performance goals set forth in Section 5.
“Equity Plan” means the Welltower Inc. 2016 Long-Term Incentive Plan, as amended from time to time.
“Fair Market Value” means, as of any given date, the fair market value of a security which shall be the closing sale price reported for such security on the principal
national securities exchange on which the security is publicly traded or, if not applicable, any other national securities exchange on which the security is traded or admitted to
trading on such date on which a sale was reported. If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such
date for which there are market quotations.
“Good Reason” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the
Company immediately prior to such termination, and “good reason” is defined therein, then “Good Reason” shall have the meaning set forth in such employment agreement, or
(b) if the Participant is not party to an employment agreement with the Company immediately prior to such termination and/or the Participant’s employment agreement does not
define “Good Reason”: (i) a substantial adverse change, not consented to by the Participant, in the nature or scope of the Participant’s responsibilities, authorities, powers,
functions, or duties; or (ii) a breach by the Company of any of its material obligations under the Program. Unless otherwise provided in an employment agreement to which the
Participant is a party immediately prior to such termination, to constitute “good reason termination,” the Participant must: (1) provide written notice to the Company within 90
days of the initial existence of the event constituting “Good Reason;” (2) may not terminate his or her employment unless the Company fails to substantially remedy the event
constituting “Good Reason” within 30 days after such notice has been given; and (3) the Participant must terminate employment with the Company no later than 30 days after
the end of the 30-day period in which the Company fails to substantially remedy the event constituting “Good Reason.”
“Health Care Facilities” means any senior housing facilities or facilities used or intended primarily for the delivery of health care services, including, without
limitation, any active adult communities, independent living
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facilities, assisted living facilities, skilled nursing facilities, inpatient rehabilitation facilities, ambulatory surgery centers, outpatient medical treatment facilities, medical office
buildings, hospitals not excluded below, or any similar types of facilities or enterprises, but in any event excluding acute care hospitals or integrated health care delivery
systems that include acute care hospitals.
“Health Care REIT Index” means the FTSE NAREIT Health Care REIT Index on the Grant Date (or a successor index including a comparable universe of publicly
traded U.S. real estate investment trusts), in each case adjusted and reweighted to exclude the Company from the index. Any health care REIT organization that is not in
existence for the entire Performance Period shall be omitted from this index.
“Index Return” means, with respect to the Performance Period, the return of either the Health Care REIT Index, or the All REIT Index, as applicable, over the
Performance Period expressed as a percentage. For the avoidance of doubt, the intent of the Compensation Committee is that Index Return over the Performance Period be
calculated in a manner designed to produce a fair comparison between the Company’s TSR and the Index Return for the purpose of determining Relative Performance. In the
case of the Health Care REIT Index, the Index Return shall be computed as the sum of each component company’s weighted TSR with each component company’s weight as
the average of its relative market capitalization at the beginning of the Performance Period.
“Net Debt + Preferred” means the sum of (a) the Company’s long-term debt, less cash and cash equivalents, and (b) the total amount of the Company’s preferred stock
as of the end of the Performance Period (or other applicable designated period).
“Options” means the rights to purchase shares of Common Stock granted pursuant to Article IV of the Equity Plan, including both ISOs and Nonstatutory Options.
“Participant” means an executive or employee of the Company or any Subsidiary selected by the Compensation Committee to participate in the Program.
“Performance Award” means an award, expressed as a number of restricted stock units reflecting achievement of the Target Award. Such number of restricted stock
units shall be equal to the sum arrived at by (1) applying the weighting of each applicable performance goal set forth on Exhibit A to the aggregate target value of the award
(expressed in dollars) established by the Compensation Committee at the time of grant, (2) dividing the weighted target value for each performance goal by the applicable
probability-adjusted fair value per share of Common Stock (as described in further detail in Exhibit A), and (3) rounding to the nearest whole share of Common Stock, that
vests upon the achievement of performance goals at the end of a Performance Period.
“Performance Period” means the period commencing on January 1, 2022 and concluding on the earlier of (i) December 31, 2024, or (ii) a Change in Corporate
Control.
“Program” means this Welltower Inc. 2022-2024 Long-Term Incentive Program, as amended from time to time.
“Qualified Termination” means termination of a Participant’s employment for Good Reason, by reason of the Participant’s death, Disability, by the Company without
Cause, Retirement and in the case of a Participant who is party to a fixed-term employment agreement with the Company, a non-renewal by the Company of the term of such
agreement.
“Relative Performance” means the Company’s TSR relative to the applicable Index Return, as expressed as an Annualized TSR Percentage.
“Restricted Period” means a period of one year for a Participant holding the title of Senior Vice President or above at the time of termination of employment and a
period of six (6) months for a Participant holding the title of Vice President at the time of termination of employment. For any Participant holding a title below the level of Vice
President (including but not limited to Assistant Vice President, Director or Manager), there shall be no post-employment Restricted Period.
“Restrictive Determination Period” means (a) the Performance Period in the case of a Performance Award and (b) the period of time during which the applicable Time
Restriction has not yet fully lapsed in the case of a Time-Based Award.
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“Retirement” means the voluntary termination of employment by a Participant after attaining age 55 and completing ten consecutive full years of service; provided,
however, that the sum of the Participant’s age and consecutive full years of service to the Company shall be equal to 70 or more; and provided further that the Participant (a)
delivers to the Company, so that the Company receives or is deemed to have received in accordance with Section 12(i) at least six months prior to the date of his or her
retirement, written notice specifying such retirement date, (b) remains in the continuous service of the Company from the date the written notice is received until his or her
retirement date, and (c) enters into a retirement agreement with the Company in such form as shall be determined by the Company from time to time that includes both (i) a
customary release of claims covering the Company and its affiliates, and (ii) an affirmation of continued compliance with the non-competition, non-solicitation, non-
disparagement and non-disclosure covenants in favor of the Company and related persons as set forth in Section 4.
“Target Award” means a Participant’s target award, expressed as a number of restricted stock units, for the Performance Period, as set forth in the Participant’s Award
Notice.
“Time-Based Award” means an award, expressed as a number of Options and/or restricted stock units, that vests upon the lapse of the Time Restriction. (A Time-
Based Award in the form of restricted stock units is a type of “Other Stock Unit Award” as classified under the Equity Plan.)
“Time Restriction” means the period of time set forth in the Award Notice during which a Time-Based Award (or portion thereof) is unvested and forfeitable based on
the completion of periods of continued employment with the Company or as otherwise expressly set forth in this Program.
“Total Shareholder Return” or “TSR” means for the common stock of the applicable company, the total shareholder return (share price appreciation/depreciation
during the applicable Performance Period plus the value attributable to reinvested dividends paid on the shares during the applicable Performance Period). The TSR shall be
expressed as a percentage. The calculation of TSR will be based on the average closing price of the shares for the twenty trading days immediately preceding the first day of the
Performance Period and the average closing price of the shares for the twenty trading days immediately preceding the last day of the applicable Performance Period. The TSR
will be calculated assuming that cash dividends (including extraordinary cash dividends) paid on the shares are reinvested in additional shares on the ex-dividend date and that
any securities distributed to shareholders in a spinoff transaction are sold and the proceeds reinvested in additional shares on the ex-dividend date.
“Vested Award” means a Time-Based Award (or portion thereof) that is fully vested and nonforfeitable due to the lapse of the applicable Time Restriction.
3.
Administration
(a)
The Program shall be administered by the Compensation Committee in accordance with the Equity Plan. The Compensation Committee shall have
the discretionary authority to make all determinations (including, without limitation, the interpretation and construction of the Program and the determination of relevant facts)
regarding the entitlement to any Award hereunder and the amount of any Award to be paid under the Program (including the number of shares of Common Stock issuable to any
Participant), provided such determinations are not made in bad faith and are not inconsistent with the terms, purpose and intent of the Program. The Compensation Committee
may delegate to one or more officers or employees of the Company some or all of its authority to administer the Program as described in this Section 3, and in the event of such
delegation, references to the Compensation Committee in this Section 3 shall apply in the same manner to such delegate or delegates to the extent of such delegated authority.
In particular, but without limitation and subject to the foregoing, the Compensation Committee shall have the authority:
(i)
to select Participants under the Program in its sole discretion;
for each Participant and such individual’s Performance Award and to determine the Earned Award;
(ii)
with respect to Performance Awards, to determine the Target Award and any formula or criteria for the determination of the Target Award
(iii)
with respect to Time-Based Awards, to determine the applicable Time Restriction;
instruments evidencing an Award hereunder, including the waiver or modification of any such conditions;
(iv)
to determine the terms and conditions, consistent with the terms of this Program, which shall govern Award Notices and all other written
4
advisable; and
(v)
to adopt, alter and repeal such administrative rules, guidelines and practices governing the Program as it shall from time to time deem
relating thereto) and to otherwise supervise the administration of the Program.
(vi)
to interpret the terms and provisions of the Program and any Award granted under the Program (and any Award Notices or other agreements
(b)
Subject to the terms hereof, all decisions made by the Compensation Committee (or any officer or employee of the Company to whom it has
delegated some or all of its authority to administer the Program) not made in bad faith pursuant to the Program shall be final, conclusive and binding on all persons, including
the Company and the Participants. No member of the Compensation Committee, and no officer or employee of the Company acting on behalf of the Compensation Committee,
shall be personally liable for any action, determination, or interpretation taken or made not in bad faith with respect to this Program, and all members of the Compensation
Committee and each and every officer or employee of the Company acting on their behalf shall, to the fullest extent not prohibited by law, be fully indemnified and protected
by the Company in respect of any such action, determination or interpretation.
4.
Conditions of Participation
As a condition of entitlement to participate in the Program, whether or not the Participant receives any payment or other benefit under the Program, each Participant
shall comply with the following restrictive covenants.
(a) Protection of Confidential Information. Participant, both during employment with the Company and thereafter, shall not, directly or indirectly, disclose or make
available to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, any Confidential Information (as defined below) except as may be
required for Participant to perform in good faith his or her job responsibilities to the Company while employed by the Company. Upon Participant’s termination of employment,
Participant shall return to the Company all Confidential Information and shall not retain any Confidential Information in Participant’s possession that is in written or other
tangible form and shall not furnish any such Confidential Information to any third party, except as provided herein. Notwithstanding the foregoing, this Section 4(a) shall not
apply to Confidential Information that (i) was publicly known at the time of disclosure to Participant, (ii) becomes publicly known or available thereafter other than by any
means in violation of this Section 4 or any other duty owed to the Company by Participant, (iii) is lawfully disclosed to Participant by a third party, or (iv) is required to be
disclosed by law or by any court, arbitrator or administrative or legislative body with actual or apparent jurisdiction to order Participant to disclose or make accessible any
information or is voluntarily disclosed by Participant to law enforcement or other governmental authorities. Furthermore, in accordance with the Defend Trade Secrets Act of
2016, Participant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a
federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law;
or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. As used in this Program, Confidential Information
means, without limitation, any non-public confidential or proprietary information disclosed to Participant or known by Participant as a consequence of or through Participant’s
relationship with the Company, in any form, including electronic media. Confidential Information also includes, but is not limited to the Company’s business plans and
financial information, marketing plans, and business opportunities. Nothing herein shall limit in any way any obligation Participant may have relating to Confidential
Information under any other agreement, promise or duty to the Company.
(b) Non-Competition. In the course of the performance of Participant’s job responsibilities for the Company, Participant has obtained and will continue to obtain
extensive and valuable knowledge and information concerning the Company’s business (including confidential information relating to the Company and its operations,
intellectual property, assets, contracts, customers, personnel, plans, marketing plans, research and development plans and prospects). Accordingly, during employment with the
Company and for the applicable Restricted Period following Participant’s termination of employment, Participant will not engage in any business activities on behalf of any
enterprise which competes with the Company or any of its affiliates in the business of (i) ownership or operation of Health Care Facilities; (ii) investment in or lending to
Health Care Facilities (including to an owner or developer of Health Care Facilities); (iii) management of Health Care Facilities; or (iv) provision of any consulting, advisory,
research or planning or development services to Health Care Facilities.
Participant will be deemed to be engaged in such competitive business activities if Participant participates in such a business enterprise as an employee, officer,
director, consultant, agent, partner, proprietor, or other participant; provided that the ownership of no more than two percent (2%) of the stock of a publicly traded corporation
engaged in a competitive business shall not be deemed to be engaging in competitive business activities. If Participant provides services to an enterprise that has some activities
that compete with the Company or any of its
5
affiliates in any area described above and other activities that do not compete with the Company or any of its affiliates in any of the areas described above, then so long as
Participant provides services exclusively to the portion of such enterprise that does not compete with the Company and its affiliates, Participant will not be deemed to be
engaged in a competitive business activity as described in this Section 4(b).
(c) Non-Solicitation. During employment with the Company and for one year following the end of Participant’s employment with the Company, Participant, to the
fullest extent not prohibited by applicable law, directly or indirectly, individually or on behalf of any other person or entity, including Participant, will not encourage, induce,
attempt to induce, recruit, attempt to recruit, solicit or attempt to solicit or participate in any way in hiring or retaining for employment, contractor or consulting opportunities
anyone who is employed or providing full-time services as a consultant at that time by the Company or any subsidiary or affiliate of the Company.
(d) Non-Disparagement. At all times during and following Participant’s employment with the Company, Participant will not make or direct anyone else to make on
Participant’s behalf any disparaging or untruthful remarks or statements, whether oral or written, about the Company, its operations or its products, services, affiliates, officers,
directors, employees, or agents, or issue any communication that reflects adversely on or encourages any adverse action against the Company. Participant will not make any
direct or indirect written or oral statements to the press, television, radio, on social media or to, on or through other media or other external persons or entities concerning any
matters pertaining to the business and affairs of the Company, its affiliates or any of its officers or directors. The restrictions described in this paragraph shall not apply to any
truthful statements made in response to a subpoena or other compulsory legal process or to law enforcement or other governmental authorities.
(e) Remedies. For the avoidance of doubt, any breach of any of the provisions in this Section 4 shall constitute a material breach by Participant. Among the
remedies that the Company may pursue in the event that such breach occurs prior to the occurrence of a Change in Corporate Control, an Award (including an Earned Award
and Vested Award) granted under this Program and shares of Common Stock issued under this Program to a Participant shall be subject to forfeiture in the event that a
Participant breaches any provision of Section 4 herein. Notwithstanding any other provision of this Program, by becoming entitled to receive any payments or other benefits
under this Program, Participant is deemed to have agreed that damages would be an inadequate remedy for the Company in the event of a breach or threatened breach by
Participant of any of Sections 4(a) through 4(d), inclusive. In the event of any such breach or threatened breach, and without relinquishing any other rights or remedies that the
Company may have, including but not limited to the forfeiture or repayment by Participant of any payments or benefits otherwise payable or paid to Participant under this
Program, the Company may, either with or without pursuing any potential damage remedies and without being required to post a bond, obtain from a court of competent
jurisdiction, and enforce, an injunction prohibiting Participant from violating this Section 4 and requiring Participant to comply with its provisions. The Company may present
this Section 4 to any third party with which Participant may have accepted employment, or otherwise entered into a business relationship, that the Company contends violates
this Section 4, if the Company has reason to believe Participant has or may have breached a provision of this Section 4.
5.
Determination of Awards
threshold, target, and high payout multiples or Time Restriction.
(a)
Each Participant’s Award Notice shall specify, as applicable, such Participant’s Target Award (expressed as a number of restricted stock units) and
(b)
With regard to a Performance Award, the percentage of a Participant’s Target Award that may be earned for the Performance Period shall be
determined as follows: 37.5 percent of the Target Award shall be earned based on the Company’s Relative Performance to the Health Care REIT Index; 37.5 percent of the
Target Award shall be earned based on the Company’s Relative Performance to the All REIT Index; and 25 percent of the Target Award shall be earned based on the Company’s
(Net Debt + Preferred) / Adjusted Annualized EBITDA ratio; all as further set forth on Exhibit A.
(c)
Depending on the score for each of the performance goals of a Performance Award as determined pursuant to Exhibit A, the Earned Award for the
Performance Period shall be determined based on the Participant’s individual threshold, target and high payout multiples described in the Participant’s Award Notice. For
performance between two different tiers, the percentage payable shall be calculated using linear interpolation between tiers. The level of achievement for each listed
performance goal shall be determined independently.
Grant; provided, that such an Award Notice may permit pro rata vesting over such time.
(d)
With regard to a Time-Based Award, the Time Restriction included in the Award Notice shall generally not be less than three years from the Date of
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(e)
requirements as set forth in Section 8.
Except as otherwise provided herein, the Earned Award and Vested Award shall be paid in shares of Common Stock upon satisfaction of the
6.
Change in Corporate Control. In the event that prior to December 31, 2024, a Change in Corporate Control occurs, then the following provisions shall
apply:
(a)
In the case of a Performance Award, each such outstanding Award will be deemed earned as of the date of such Change in Corporate Control in
accordance with the computation described in Section 5(b) as if the Performance Period ended on the day prior to the consummation of the Change in Corporate Control, except
that corporate metrics not tied to TSR shall be calculated based on the results through the most recent completed fiscal quarter, but each Award shall further be multiplied by a
fraction, the numerator of which shall be the number of full and partial months from the beginning of the Performance Period through the Change in Corporate Control and the
denominator of which shall be 36. Notwithstanding Sections 4 and 8(b), any shares of Common Stock issued to satisfy such outstanding Earned Awards shall be fully vested
and nonforfeitable.
In the case of a Time-Based Award, the Time Restriction applicable to such Time-Based Award shall lapse in its entirety and such award shall
become a Vested Award if either (i) the successor company (or a subsidiary thereof) does not assume, convert, continue or otherwise replace such other awards on proportionate
and equitable terms or (ii) the Participant is terminated without Cause upon or within 12 months following the Change in Corporate Control.
(b)
7.
Termination of Participant’s Employment.
If a Participant’s employment with the Company terminates, the provisions of this Section 7 shall govern the treatment of the Participant’s Award
exclusively, regardless of the provisions of any employment, change in control or other agreement or arrangement to which the Participant is a party, or any termination or
severance policies of the Company then in effect, which shall be superseded by this Program.
(a)
Determination Period, then the following provisions shall apply:
(b)
In the event of termination of a Participant’s employment by reason of a Qualified Termination prior to the end of the applicable Restrictive
(i)
In the case of a Performance Award, the Compensation Committee shall determine the Participant’s Earned Award in accordance with the
computation described in Section 5(b) as if the Performance Period ended on the calendar quarter end immediately preceding the date of the Participant’s Qualified
Termination; provided, however, that the Earned Award of such terminated Participant for the Performance Period shall be multiplied by a fraction, the numerator of which
shall be the number of complete months during which the Participant was an employee of the Company during the Performance Period and the denominator of which shall be
the total number of months in the Performance Period. The pro-rated Earned Award shall be paid out in shares of Common Stock that are fully vested.
(ii)
In the case of a Time-Based Award, the Participant shall retain the portion of the Time-Based Award that is a Vested Award with any Time-
Based Award in the form of Options that has not yet been exercised remaining exercisable as set forth in the Award Notice. Unless otherwise determined by the Compensation
Committee, the unvested portion of the Time-Based Award shall, without payment of any consideration by the Company, automatically and without notice terminate, be
forfeited and be and become null and void and neither the Participant nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further
rights or interests in such unvested portion of the Time-Based Award.
Determination Period, then the following provisions shall apply:
(c)
In the event of termination of a Participant’s employment by reason of a Qualified Termination after the end of the applicable Restrictive
become fully vested and shall be paid out in shares of Common Stock; and
(i)
Any portion of the Participant’s Earned Award or Time-Based Award in the form of restricted stock units that has not yet been settled shall
forth in the Award Notice.
(ii)
Any portion of the Participant’s Time-Based Award in the form of Options that has not yet been exercised shall remain exercisable as set
7
As a condition of receiving any payments or benefits under this Program on account of Participant’s Qualified Termination, the Company may, in its
sole discretion, require Participant to deliver an irrevocable, effective release of claims in the form determined by the Company and/or an affirmation of continued compliance
with the non-competition, non-solicitation, non-disparagement and non-disclosure covenants in favor of the Company and related persons as set forth in Section 4.
(d)
(e)
In the event of a termination of a Participant’s employment for any reason other than a Qualified Termination prior to the end of the applicable
Restrictive Determination Period, except as otherwise set forth in the Participant’s Award Notice or as otherwise determined by the Compensation Committee, the Award held
by the Participant during the Performance Period or portion of the Award for which the Time Restriction has not lapsed shall, without payment of any consideration by the
Company, automatically and without notice terminate, be forfeited and be and become null and void, and neither the Participant nor any of his or her successors, heirs, assigns,
or personal representatives will thereafter have any further rights or interests in such Award. In the event of a termination of a Participant’s employment for any reason other
than a Qualified Termination after the end of the applicable Restrictive Determination Period, any portion of the Earned Award or Time-Based Award that has not yet been
settled in shares of Common Stock shall be forfeited.
8.
Payment of Awards.
(a)
As soon as practicable following the end of the applicable Restrictive Determination Period:
of Common Stock; and
(i)
The portion of a Time-Based Award in the form of restricted stock units for which the Time Restriction has lapsed shall be settled in shares
with respect to the Performance Period.
(ii)
In the case of a Performance Award, the Compensation Committee shall determine the amount of each Participant’s Earned Award, if any,
The date on which such settlement of the Awards occurs shall be referred to herein as the “Issuance Date”. In no event shall the Issuance Date with respect to the end of the
Restrictive Determination Period for an Award be later than 74 days after the end of the applicable Restrictive Determination Period or on such later date as provided by the
Compensation Committee (or in the case of a Performance Award, as set forth under Section 8(b) below); provided that (i) in the case of the Performance Period (in the case of
a Performance Award) or Time Restriction (in the case of a Time-Based Award) that ends upon a Change in Corporate Control, the Issuance Date shall be no later than
immediately prior to the consummation of the Change in Corporate Control, and (ii) in the case of a determination required by Section 7(b), the Issuance Date shall generally be
no later than 74 days after the date of the Participant’s Qualified Termination or on such later date as provided by the Compensation Committee.
The portion of a Time-Based Award in the form of Options for which the Time Restriction has lapsed shall be paid in shares of Common Stock following the exercise of such
Time-Based Award in accordance with the terms set forth in the Award Notice.
(b)
Except as otherwise provided in Sections 6 and 7, on the vesting date described below, the Company shall issue to each Participant (or such
Participant’s estate or beneficiary, if applicable) with regard to a Performance Award a number of shares of Common Stock equal to the vested portion of the Earned Award.
Subject to a Participant’s continued employment with the Company or a subsidiary and continued compliance with the restrictive covenants set forth in Section 4 through such
date, the Shares subject to a Participant’s Earned Award shall be vested as of the date that the Compensation Committee shall determine the amount of each Participant’s Earned
Award, if any, with respect to the Performance Period. In addition, on the vesting date (or on the Issuance Date with regard to an Earned Award settled in accordance with
Section 6 or 7), the Company shall pay in cash to each Participant (or such Participant’s estate or beneficiary, if applicable) an amount equal to the Dividend Value multiplied
by the number of Shares issued pursuant to Section 6, Section 7 or this Section 8(b) on such date.
(c)
Except as otherwise provided in Sections 6 and 7, the Company shall issue to each Participant (or such Participant’s estate or beneficiary, if
applicable) with regard to a Time-Based Award a number of shares of Common Stock equal to the vested portion of the Time-Based Award on the Issuance Date or, if
applicable, the exercise date. In addition, on the Issuance Date, the Company shall pay in cash to each Participant (or such Participant’s estate or beneficiary, if applicable) an
amount equal to the Dividend Value multiplied by the number of Shares issued pursuant to Section 6, Section 7 or this Section 8(c) on such date.
8
9.
Adjustments. Without duplication with the provisions of Sections 3 and 11 of the Equity Plan, if (i) the Company shall at any time be involved in a merger,
consolidation, dissolution, liquidation, reorganization, exchange of Shares, sale of all or substantially all of the assets or Shares of the Company or a transaction similar thereto,
(ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization, or other similar change in the capital structure of the Company, or
any distribution to holders of Shares other than ordinary cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Compensation Committee
necessitates action by way of adjusting the terms of the Program, then and in that event, the Compensation Committee shall take such action as shall be necessary to maintain
the Participants’ rights hereunder so that they are substantially the same rights existing under this Program prior to such event.
10.
Restrictions and Conditions; Non-Transferability of Awards. Subject to the provisions of the Equity Plan and this Program, except as may otherwise be
permitted by the Compensation Committee, a Participant shall not be permitted voluntarily or involuntarily to sell, assign, transfer, or otherwise encumber or dispose of the
options, restricted stock units or an Award; provided that the foregoing restriction shall not apply to Shares actually issued to a Participant.
11.
Withholding of Tax. Unless otherwise agreed to between the Company and a Participant, the Company will cause the required minimum tax withholding
obligation (or such other rate that will not cause an adverse accounting consequence or cost) to be satisfied by withholding a number of Shares to be issued to a Participant with
an aggregate Fair Market Value that would satisfy the withholding amount due. The Company’s obligation to deliver stock certificates (or evidence of book entry) to any
Participant is subject to and conditioned on tax withholding obligations being satisfied by such Participant or through the Company’s exercise of its authority. The
Compensation Committee expressly provides that the required minimum tax withholding obligation (or such other rate that will not cause an adverse accounting consequence
or cost) of an Award granted to a Participant who is an officer within the meaning of Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended, shall
be satisfied by withholding a number of whole Shares to be issued to the Participant with an aggregate Fair Market Value that fully satisfies the withholding amount due.
12.
Miscellaneous.
any Participant, but no such amendment shall adversely affect the rights of the Participants with regard to outstanding Awards in any material respect.
(a)
Amendment and Termination. The Company reserves the right to amend or terminate the Program at any time in its discretion without the consent of
No Contract for Continuing Services. This Program shall not be construed as creating any contract for continued services between the Company or
any of its Subsidiaries and any Participant, and nothing herein contained shall give any Participant the right to be retained as an employee or consultant of the Company or any
of its Subsidiaries or to receive any future awards or benefits under the Equity Plan.
(b)
Governing Law. The Program and each Award Notice awarded under the Program shall be construed in accordance with and governed the laws of
the State of Ohio, without regard to principles of conflict of laws of such state; provided, however, that matters of corporate law, including the issuance of shares of Common
Stock, shall be governed by the General Corporation Law of the State of Delaware.
(c)
(d)
Arbitration. Subject to Section 4(e) hereof, all claims, disputes, questions, or controversies arising out of or relating to this Program, will be
resolved exclusively in final and binding arbitration held under the auspices of Judicial Arbitration & Mediation Services, Inc. (“JAMS”) in accordance with JAMS then current
Employment Arbitration Rules and Procedures, or successor rules then in effect. The arbitration will be held in New York, New York, and will be conducted and administered
by JAMS or, in the event JAMS does not then conduct arbitration proceedings, a similarly reputable arbitration administrator. Participant and the Company will select a
mutually acceptable, neutral arbitrator from among the JAMS panel of arbitrators. Except as provided by this Program, the Federal Arbitration Act will govern the
administration of the arbitration proceedings. The arbitrator will apply the substantive law (and the law of remedies, if applicable) of the State of Ohio, or federal law, if Ohio
law is preempted, and the arbitrator is without jurisdiction to apply any different substantive law. Participant and the Company will each be allowed to engage in adequate
discovery, the scope of which will be determined by the arbitrator consistent with the nature of the claim(s) in dispute. The arbitrator will have the authority to entertain a
motion to dismiss and/or a motion for summary judgment by any party and will apply the standards governing such motions under the Federal Rules of Civil Procedure. The
arbitrator will render a written award and supporting opinion that will set forth the arbitrator’s findings of fact and conclusions of law. Judgment upon the award may be entered
in any court of competent jurisdiction. The Company will pay the arbitrator’s fees, as well as all administrative fees, associated with the arbitration. Each party will be
responsible for paying its own attorneys’ fees and costs (including expert witness fees and costs, if any), provided, however, that the arbitrator may award attorney’s fees and
costs to the prevailing party, except as prohibited by law. If the Company is the prevailing party,
9
the arbitration may award some or all of the costs for the arbitrator’s fees and/or other administrative fees to the fullest extent not prohibited by law. The existence and subject
matter of all arbitration proceedings, including, any settlements or awards thereunder, shall remain confidential.
singular form of words shall be extended to include the plural; and the plural shall be restricted to mean the singular.
(e)
Construction. Wherever appropriate, the use of the masculine gender shall be extended to include the feminine and/or neuter or vice versa; and the
numbers and the text of this Program, the text shall control.
(f)
Headings. The Section headings and Section numbers are included solely for ease of reference. If there is any conflict between such headings or
plans, programs or policies.
(g)
Effect on Other Plans. Nothing in this Program shall be construed to limit the rights of Participants under the Company’s or its Subsidiaries’ benefit
(h)
Clawback Policy. All Awards granted under this Program shall be subject to forfeiture (as determined by the Compensation Committee) in
accordance with the terms of the Company’s clawback or recoupment policy (as in effect from time to time). Furthermore, prior to the occurrence of a Change in Corporate
Control, an Award (including an Earned Award and Vested Award) granted under this Program and shares of Common Stock issued under this Program to a Participant shall be
subject to forfeiture in the event that a Participant breaches any provision of Section 4 herein.
or registered mail (return receipt requested), postage prepaid, addressed as follows (or to such other address as such party may designate in writing from time to time):
(i)
Notices. Any notice provided for under this Program shall be in writing and may be delivered in person or sent by overnight courier, certified mail,
If to the Company: Welltower Inc., 4500 Dorr Street, Toledo, OH 43615 Attention: Legal Department
If to a Participant, at the address on file with the Company’s Human Resources Department.
The actual date of mailing, as shown by a mailing receipt therefor, shall determine the time at which notice was given. Any Participant may change the address at which notice
shall be given by notifying the Company in the manner set forth in this Section 12(i). The Company may change the address at which notice shall be given by notifying each
Participant in the manner set forth in this Section 12(i).
(j) Section 409A.
(1) This Program is intended to either be exempt from or comply with Section 409A of the Code (“Code Section 409A”) and will be interpreted in a manner
consistent with such intent. Any provision that would cause this Program or any payment hereunder to fail to satisfy Code Section 409A of the Code shall have no force or
effect until amended to the minimum extent required to comply with Code Section 409A, which amendment may be retroactive to the extent permitted by Code Section 409A.
A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits that may
be considered “deferred compensation” under Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A)
upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any
such provision of this Program, references to a “retirement,” “termination,” “termination of employment” or like terms shall mean such a “separation from service”.
(2) Any payment scheduled to be made under this Program that may be considered made under a “nonqualified deferred compensation plan” subject to
Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A), that are otherwise due on or within the six-
month period following termination of employment will accrue during such six-month period and will instead become payable in a lump sum payment on the first business day
period following such six-month period. Furthermore, notwithstanding any contrary provision herein, if any other payments of money or other benefits due to a Participant
under this Agreement could cause the application of an accelerated or additional tax under Code Section 409A, such payments or other benefits shall be deferred if deferral will
make such payment or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner,
determined by the Company, that does not cause such an accelerated or additional tax.
10
treated as a “separate payment” within the meaning of Code Section 409A.
(3) Notwithstanding any contrary provision herein, a Participant’s right to any payment (including each installment payment) under this Program shall be
END OF PROGRAM DOCUMENT
2022-2024 LTI – Forward Looking
Weighting
4
Threshold
Target
5
High
Exhibit A
Payout for Relative TSR Performance Measures
1
Relative Performance to Health Care REIT Index
2
Relative Performance to All REIT Index (MSCI)
Payout for Financial Performance Measure
3
(Net Debt + Preferred) / Adjusted Annualized EBITDA
40%
40%
20%
25%
-600 bps
-600 bps
50%
7.5x
100%
0 bps
0 bps
100%
7.0x
300%
+ 600 bps
+ 600 bps
200%
6.5x
1. Matching the index performance is achievement at the “Target” level. Exceeding index performance by 600 basis points results in payout at the “High” level, which is the
maximum payout level. Trailing index performance by 600 basis points results in a payout at the “Threshold” level.
2. Same as #1 above.
3. The “Target” payout level is set at the (Net Debt + Preferred)/Adjusted Annualized EBITDA ratio of 7.0x. “Threshold” will be met at a ratio at 7.5x. The “High” payout
level will be met at a ratio at or below 6.5x.
4.
5.
“Threshold” payout is 25% of the “Target” level for all Participants for the relative TSR performance measures and 50% for the (Net Debt + Preferred) / Adjusted
Annualized EBITDA performance measure.
“High” payout is 300% of the “Target” level for all Participants for the relative TSR performance measures and 200% for the (Net Debt + Preferred) / Adjusted Annualized
EBITDA performance measure.
The program also has a stock price cap of $150. In addition, after vesting, the named executive officers have a 2-year holding period requirement while all other participants
have a 1-year holding period requirement.
The 20-trading day weighted average of the Common Stock ending with the closing price on the grant date will be used to determine the number of restricted stock units
granted (assuming “Target” level performance) with respect to each of the performance measures.
In the event the Company’s performance shall fall between two levels in the above chart, linear interpolation shall be used to determine the percentage of the Target Award
earned.
11
Exhibit 10.18(b)
THIS LONG-TERM INCENTIVE PROGRAM AWARD AGREEMENT (the “Agreement”), made this [____________], 2022, between Welltower Inc., a
Delaware corporation (the “Corporation”), and [________________] (the “Participant”).
LONG-TERM INCENTIVE PROGRAM AWARD AGREEMENT
WHEREAS, the Participant is an employee of the Corporation; and
WHEREAS, the Corporation adopted the Welltower Inc. 2016 Long-Term Incentive Plan (the “Plan”) and the 2022-2024 Long-Term Incentive Program (the “LTIP”)
in order to provide select executives and key employees with incentives to achieve long-term corporate objectives; and
WHEREAS, the Compensation Committee of the Corporation’s Board of Directors has determined that the Participant should be granted a restricted stock unit award
subject to performance-based vesting conditions and/or time-based vesting conditions on the terms set forth in the LTIP and herein;
WHEREAS, the restricted stock unit award granted to the Participant shall be payable in shares of the Corporation’s common stock, $1.00 par value per share
(“Common Stock”), upon the satisfaction of the conditions set forth below and in accordance with the terms of the LTIP.
WHEREAS, any Options granted to the Participant hereunder shall be exercised for shares of Common Stock upon the satisfaction of the conditions set forth below
and in accordance with the terms of the LTIP.
NOW, THEREFORE, in consideration of the past and future services provided to the Corporation by the Participant and the various covenants and agreements herein
contained, and intending to be legally bound hereby, the parties hereto agree as follows:
1.
GRANT OF AWARD.
The Corporation hereby grants to the Participant one or both of the following:
• A Performance Award of [____] performance-based restricted stock units (the “Target Award”) on January 14, 2022 (the “Date of Grant”), payable in
shares of Restricted Stock, subject to satisfaction of the restrictions, vesting conditions and other terms set forth in this Agreement.
• An Other Stock Unit Award (the “Time-Based Award”) of [____] time-based restricted stock units and/or [_____] time-based Options on the Date of
Grant, which shall vest subject to the Participant’s continued employment, in accordance with the following schedule: one-fourth of such shares will
become fully vested and nonforfeitable (or, for Options, exercisable) on January 15, 2023, one-fourth of such shares will become fully vested and
nonforfeitable (or, for Options, exercisable) on January 15, 2024, one-fourth of such shares will become fully vested and nonforfeitable (or, for Options,
exercisable) on January 15, 2025, and one-fourth of such shares will become fully vested and nonforfeitable (or, for Options, exercisable) on January 15,
2026 (each such date, the “Vesting Date”). Upon vesting, the restricted stock units shall become issuable in shares of Common Stock and the Options
shall become exercisable for shares of Common Stock. The exercise price of any time-based Options shall be $________. Such Options shall not have
any common stock dividends or dividend equivalents paid and shall have a maximum term of ten years.
The Target Award and the Time-Based Award shall be referred to herein as the “Award”. The Participant shall not be required to provide the Corporation with any
payment (other than his or her past and future services to the Corporation or payment of the exercise price upon exercise of any exercisable Options) in exchange for the Award
or in exchange for the issuance of shares of Common Stock (upon (1) the determination of the Earned Award and satisfaction of the applicable periods of continued service
with the Corporation in the case of a Performance Award or (2) the lapse of the applicable Time Restriction in the case of a Time-Based Award and the payment of the exercise
price in the case of exercisable Options).
1
2.
DELIVERY OF SHARES.
(a) The Participant shall not be entitled to the issuance of shares of Common Stock or to receive any distributions with respect to the Performance Award or Time-
Based Award until the determination of the Earned Award (in the case of the Performance Award) as provided in the LTIP and in Section 3 or 5 below or lapse of the applicable
Time Restriction, and in the case of Options, the payment of the exercise price (in the case of the Time-Based Award). Further, the Participant shall not have any of the rights
and privileges of a stockholder of the Corporation (including voting rights and the right to receive dividends) until the shares of Common Stock are issued to the Participant.
(b) The Participant’s Performance Award and Time-Based Award may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of by the
Participant, and the underlying shares of Common Stock potentially issuable to the Participant under this Agreement may not be sold, transferred, assigned, pledged or
otherwise encumbered by the Participant until such shares are so issued and cease to be subject to a risk of forfeiture. Any attempt to dispose of the Participant’s Award or
shares issued thereunder in a manner contrary to the restrictions set forth in this Agreement shall be ineffective, null and void.
3.
ISSUANCE OF SHARES.
The Corporation shall issue shares of Common Stock to the Participant in accordance with the provisions of Section 8 of the LTIP. Any shares of Common Stock
subject to Options shall not be issued until exercised in accordance with Section 4.1 of the Plan.
4.
TAX WITHHOLDING.
The Corporation shall satisfy its tax withholding obligations in accordance with Section 11 of the LTIP.
5.
TERMINATION OF EMPLOYMENT.
In the event of the end of the Participant’s employment with the Corporation prior to the time that all vested shares of Common Stock, if any, are issued under the
LTIP, the Award shall be administered in accordance with Section 7 of the LTIP. Any Options that are part of a Vested Award shall remain exercisable after the end of the
Participant’s employment with the Corporation for the following periods (but in no event longer than the ten year maximum term of the Options): (1) eighteen (18) months in
the event of the Participant’s death, (2) twelve (12) months in the event of the Participant’s Qualified Termination other than death, (3) three (3) months in the event of the
Participant’s termination of employment that is neither a Qualifying Termination nor for Cause, and (4) no period of time following the Participant’s termination of employment
in the event of a termination for Cause.
6.
DEFINITIONS.
Capitalized terms used herein without definitions shall have the meanings given to those terms in the LTIP.
7.
SECURITIES LAWS.
The Corporation may from time to time impose such conditions on the vesting of the Award, and/or the issuance of shares of Common Stock upon vesting (and in the
case of Options, exercise) of the Award, as it deems reasonably necessary to ensure that any grant of the Award and issuance of shares of Common Stock under this Agreement
will satisfy the applicable requirements of federal and state securities laws. Such conditions may include, without limitation, the partial or complete suspension of the right to
receive shares of Common Stock until the Common Stock has been registered under the Securities Act of 1933, as amended. In all events, if the issuance of any shares of
Common Stock is delayed by application of this Section 7, such issuance shall occur on the earliest date on which it would not violate applicable law.
8.
GRANT NOT TO AFFECT EMPLOYMENT.
Neither this Agreement nor the Award granted hereunder shall confer upon the Participant any right to continued employment with the Corporation. This Agreement
shall not in any way modify or restrict any rights the Corporation may have to terminate such employment.
104416622v2
2
9.
ADJUSTMENTS TO AWARD.
In the event of any change or changes in the outstanding Common Stock by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-
up, combination or any similar transaction, the Award granted to the Participant under this Agreement shall be adjusted by the Compensation Committee pursuant to Section
11.2 of the Plan in such manner as the Compensation Committee deems appropriate to prevent substantial dilution or enlargement of the rights granted to the Participant.
10.
MISCELLANEOUS.
(a)
(b)
This Agreement may be executed in one or more counterparts, all of which taken together will constitute one and the same instrument.
The terms of this Agreement may only be amended, modified or waived by a written agreement executed by both of the parties hereto.
Agreement and those of the Plan or the LTIP, the provisions of the Plan and the LTIP shall control.
(c)
The provisions of the Plan and LTIP are hereby made a part of this Agreement. In the event of any conflict between the provisions of this
(d)
The Award granted under this Agreement is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), under the exemption for “short-term deferrals” under Treasury Regulation Section 1.409A-1(b)(4) or options to purchase “service recipient stock”
under Treasury Regulation Section 1.409A-1(b)(5), and shall be interpreted in a manner consistent with the requirements for such exemptions. To the extent that changes are
necessary to ensure that the Award and any related dividend equivalent rights comply with any additional requirements for such exemptions imposed by future IRS guidance
on the application of Section 409A of the Code, the Participant and the Corporation agree to cooperate and work together in good faith to timely amend this Agreement so
that the Award and any dividend equivalent rights will not be treated as deferred compensation subject to the requirements of Section 409A of the Code.
The validity, performance, construction and effect of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to
principles of conflicts of law; provided, however, that matters of corporate law, including the issuance of shares of Common Stock, shall be governed by the General
Corporation Law of the State of Delaware.
(e)
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
PARTICIPANT WELLTOWER INC.
________________________________ By: ______________________________
[Signature] [Signature]
Name: __________________________ Name: ___________________________
Title: ____________________________
104416622v2
3
WELLTOWER INC.
2022 OUTPERFORMANCE PROGRAM
Exhibit 10.19(a)
1.
Purpose. This 2022 Outperformance Program (the “Program”) is adopted under the terms of the Welltower Inc. 2016 Long-Term Incentive Plan (the “Equity
Plan”) and is intended to provide an incentive for the achievement of the strategic transformation of Welltower Inc. (the “Company”) and to tie the goals and interests of the
Company’s senior executives to those of the Company and its stockholders. The Program is for the benefit of Participants (as defined below).
2.
Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Equity Plan. In addition, as used herein:
“Absolute TSR Override Goal” means achievement by the Company of Total Shareholder Return for the Performance Period calculated on an annual compounded
basis, which for the entire four-year Performance Period is equal to a compounded annual growth rate of at least 10%.
“Absolute TSR Threshold Goal” means achievement by the Company of Total Shareholder Return for the Performance Period calculated on an annual compounded
basis, which for the entire four-year Performance Period is equal to a compounded annual growth rate of at least 5%.
“All REIT Index” means the MSCI US REIT Index.
“Annualized TSR Percentage” means (1 + TSR)^(1/4) - 1.
“Award” means a grant to a Participant of restricted stock units with vesting contingent upon the achievement of the Threshold Goals and then based on the level of
achievement of performance goals at the end of the Performance Period as set forth in Exhibit A, subject to the Participant’s continuous employment with the Company
throughout the entire Performance Period.
“Award Notice” means the award agreement with a Participant that sets forth the terms, conditions and limitations of the Participant’s participation in the Program,
including, without limitation and as may be applicable, the payout levels for a Participant’s Award.
“Cause” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the
Company immediately prior to such termination, and “Cause” is defined therein, then “Cause” shall have the meaning set forth in such employment agreement, or (b) if the
Participant is not party to an employment agreement with the Company immediately prior to such termination or the Participant’s employment agreement does not define
“Cause,” then “Cause” shall mean: (i) negligence or willful misconduct by the Participant in connection with the performance of his or her material duties as an employee of
the Company or any Subsidiary; (ii) a breach by the Participant of any of his or her material duties as an employee of the Company or any Subsidiary, including but not limited
to the provisions of Section 4 herein; (iii) conduct by the Participant against the best interests of the Company or any Subsidiary, including but not limited to a material act of
embezzlement or misappropriation of corporate assets, or a material act of statutory or common law fraud against the Company, any Subsidiary or the employees of either the
Company or any Subsidiary; (iv) conviction of, or plea of nolo contendere to, any crime that is a felony, involves moral turpitude, or was committed in connection with the
performance of Participant’s job responsibilities for the Company; (v) indictment of the Participant of a felony or a misdemeanor involving moral turpitude and such indictment
has a material adverse effect on the interests or reputation of the Company or any Subsidiary; (vi) the intentional and willful failure by Participant to substantially perform his
or her job responsibilities to the Company (other than any such failure resulting from Participant’s incapacity due to physical or mental disability) after a demand for substantial
performance is made by the Company; (vii) the failure by Participant to satisfactorily perform his or her job responsibilities to the Company (other than any such failure
resulting from Participant’s incapacity due to physical or mental disability); or (viii) a breach by Participant of any of the Company’s policies and procedures, including but not
limited to the Company’s Code of Business Conduct & Ethics.
1
“Change in Corporate Control” shall have the same meaning as set forth in Section 10.1(a) of the Equity Plan and Section 10.1(c) of the Equity Plan.
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Stock” means the Company’s common stock, par value $1.00 per share, either currently existing or authorized hereafter.
“Common Stock Price” means, as of a particular date, the volume weighted average of the Fair Market Value of one share of Common Stock over the 20 consecutive
trading days ending on, and including such date (or if such date is not a trading day, the most recent trading day immediately preceding such date); provided that, if such date is
the date upon which a Change in Corporate Control occurs, the Common Stock Price as of such date shall be equal to the fair value, as determined by the Compensation
Committee, of the total consideration paid or payable in the transaction resulting in the Change in Corporate Control for one share of Common Stock.
“Disability” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the
Company immediately prior to such termination, and “Disability” is defined therein, then “Disability” shall have the meaning set forth in such employment agreement, or (b) if
the Participant is not party to an employment agreement with the Company that defines “Disability,” then “Disability” shall have the same meaning as defined in the Equity
Plan.
“Dividend Value” means the aggregate amount of dividends and other distributions paid on one Share for which the record date occurred on or after the first day of the
Performance Period and prior to the Issuance Date (excluding dividends and distributions paid in the form of additional Shares).
“Earned Award” means, with respect to a Participant and such individual’s Award, the actual number of Shares that are earned by such Participant pursuant to the
Program at the end of the Performance Period based on the achievement of the Threshold Goals and the performance goals set forth in Exhibit A.
“Equity Plan” means the Welltower Inc. 2016 Long-Term Incentive Plan, as amended from time to time.
“Fair Market Value” means, as of any given date, the fair market value of a security which shall be the closing sale price reported for such security on the principal
stock exchange or, if applicable, any other national exchange on which the security is traded or admitted to trading on such date on which a sale was reported. If there are no
market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations.
“FFO Goal” means an increase of the Company’s funds from operations calculated on an annual compounded basis, which for the entire four-year Performance Period
is equal to a compounded annual growth rate of at least 9% when compared to the Company’s funds from operations for the Company’s 2021 fiscal year, as adjusted as
specifically set forth in the Company’s quarterly earnings releases but excluding any funding received from the US Department of Health and Human Services. The term “funds
from operations” means the Company’s net income attributable to common stockholders, computed in accordance with U.S. Generally Accepted Accounting Principles,
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.
“Good Reason” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the
Company immediately prior to such termination, and “good reason” is defined therein, then “Good Reason” shall have the meaning set forth in such employment agreement, or
(b) if the Participant is not party to an employment agreement with the Company immediately prior to such termination and/or the Participant’s employment agreement does not
define “Good Reason”: (i) a substantial adverse change, not consented to by the Participant, in the nature or scope of the Participant’s responsibilities, authorities, powers,
functions, or duties; or (ii) a breach by the Company of any of its material obligations under the Program. Unless otherwise provided in an employment agreement to which the
Participant is a party immediately prior to such termination, to constitute “good reason termination,” the Participant must: (1) provide written notice to the Company within 90
days of the initial existence of the event constituting “Good Reason;” (2) may not terminate his or her employment unless the Company fails to substantially remedy the event
constituting “Good Reason” within 30 days after such notice has been given; and (3) the Participant must terminate employment with the Company no later than 30 days after
the end of the 30-day period in which the Company fails to substantially remedy the event constituting “Good Reason.”
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“Health Care REIT Index” means the FTSE NAREIT Health Care REIT Index as of January 1, 2022 (or a successor index including a comparable universe of publicly
traded U.S. real estate investment trusts), in each case adjusted and reweighted to exclude the Company from the index. Any health care REIT organization that is not in
existence for the entire Performance Period shall be omitted from this index.
“Index Return” means, with respect to the Performance Period, the return of either the Health Care REIT Index or the All REIT Index, as applicable, over the
Performance Period expressed as a percentage. For the avoidance of doubt, the intent of the Compensation Committee is that Index Return over the Performance Period be
calculated in a manner designed to produce a fair comparison between the Company’s TSR and the Index Return for the purpose of determining Relative Performance. In the
case of the Health Care REIT Index, the Index Return shall be computed as the sum of each component company’s weighted TSR with each component company’s weight as
the average of its relative market capitalization at the beginning of the Performance Period.
“Issuance Date” means the date on which the settlement of the Awards in shares of Common Stock occurs.
“Override Goal” means achievement of (i) the Absolute TSR Override Goal and (ii) Relative Performance of at least 150% against each of the All REIT Index and the
Health Care REIT Index.
“Participant” means an executive or employee of the Company or any Subsidiary selected by the Compensation Committee to participate in the Program.
“Performance Period” means the period commencing on January 1, 2022 and concluding on December 31, 2025, or such shorter period as may occur in connection
with a Change in Corporate Control as described in Section 6.
“Performance Pool” means the number of Shares payable with respect to all Awards under the Program as determined in accordance with Exhibit A.
“Program” means this Welltower Inc. 2022 Outperformance Program, as amended from time to time.
“Qualified Termination” means termination of a Participant’s employment for Good Reason, by reason of the Participant’s death, Disability, by the Company without
Cause, Retirement and in the case of a Participant who is party to a fixed-term employment agreement with the Company, a non-renewal by the Company of the term of such
agreement.
“Relative Performance” means the Company’s TSR relative to the applicable Index Return, as expressed as an Annualized TSR Percentage.
“Restricted Period” means a period of one year for a Participant holding the title of Senior Vice President or above at the time of termination of employment and a
period of six (6) months for a Participant holding the title of Vice President at the time of termination of employment. For any Participant holding a title below the level of Vice
President (including but not limited to Assistant Vice President, Director or Manager), there shall be no post-employment Restricted Period.
“Retirement” means the voluntary termination of employment by a Participant after attaining age 55 and completing ten consecutive full years of service; provided,
however, that the sum of the Participant’s age and consecutive full years of service to the Company shall be equal to 70 or more; and provided further that the Participant (a)
delivers to the Company, so that the Company receives or is deemed to have received in accordance with Section 12(i) at least six months prior to the date of his or her
retirement, written notice specifying such retirement date, (b) remains in the continuous service of the Company from the date the written notice is received until his or her
retirement date, and (c) enters into a retirement agreement with the Company in such form as shall be determined by the Company from time to time that includes both (i) a
customary release of claims covering the Company and its affiliates, and (ii) an affirmation of continued compliance with the non-competition, non-solicitation, non-
disparagement and non-disclosure covenants in favor of the Company and related persons as set forth in Section 4.
“Shares” means shares of Common Stock.
“Threshold Goals” means the Absolute TSR Threshold Goal and the FFO Goal.
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“Total Shareholder Return” or “TSR” means for the Common Stock, the total shareholder return (share price appreciation/depreciation during the Performance Period
plus the value attributable to reinvested dividends paid on the Shares during the applicable Performance Period). TSR shall be expressed as a percentage. The calculation of
TSR will be based on the Common Stock Price as of the first day of the Performance Period and the Common Stock Price as of the last day of the applicable Performance
Period. The TSR will be calculated assuming that cash dividends (including extraordinary cash dividends) paid on the Shares are reinvested in additional Shares on the ex-
dividend date and that any securities distributed to shareholders in a spinoff transaction are sold and the proceeds reinvested in additional Shares on the ex-dividend date.
3.
Administration
(a)
The Program shall be administered by the Compensation Committee in accordance with the Equity Plan. The Compensation Committee shall have
the discretionary authority to make all determinations (including, without limitation, the interpretation and construction of the Program and the determination of relevant facts)
regarding the entitlement to any Award hereunder and the amount of any Award to be paid under the Program (including the number of Shares issuable to any Participant),
provided such determinations are not made in bad faith and are not inconsistent with the terms, purpose and intent of the Program. The Compensation Committee may delegate
to one or more officers or employees of the Company some or all of its authority to administer the Program as described in this Section 3, and in the event of such delegation,
references to the Compensation Committee in this Section 3 shall apply in the same manner to such delegate or delegates to the extent of such delegated authority. In particular,
but without limitation and subject to the foregoing, the Compensation Committee shall have the authority:
(i)
(ii)
to select Participants under the Program in its sole discretion;
to determine any formula or criteria for the determination of each Participant’s Award and to determine the Earned Award;
instruments evidencing an Award hereunder, including the waiver or modification of any such conditions;
(iii)
to determine the terms and conditions, consistent with the terms of the Program, which shall govern Award Notices and all other written
advisable; and
(iv)
to adopt, alter and repeal such administrative rules, guidelines and practices governing the Program as it shall from time to time deem
relating thereto) and to otherwise supervise the administration of the Program.
(v)
to interpret the terms and provisions of the Program and any Award granted under the Program (and any Award Notices or other agreements
(b)
Subject to the terms hereof, all decisions made by the Compensation Committee (or any officer or employee of the Company to whom it has
delegated some or all of its authority to administer the Program) not made in bad faith pursuant to the Program shall be final, conclusive and binding on all persons, including
the Company and the Participants. No member of the Compensation Committee, and no officer or employee of the Company acting on behalf of the Compensation Committee,
shall be personally liable for any action, determination, or interpretation taken or made not in bad faith with respect to the Program, and all members of the Compensation
Committee and each and every officer or employee of the Company acting on their behalf shall, to the fullest extent not prohibited by law, be fully indemnified and protected
by the Company in respect of any such action, determination or interpretation.
4.
Conditions of Participation
As a condition of entitlement to participate in the Program, whether or not the Participant receives any payment or other benefit under the Program, each Participant
shall comply with the following restrictive covenants.
(a) Protection of Confidential Information. Participant, both during employment with the Company and thereafter, shall not, directly or indirectly, disclose or make
available to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, any Confidential Information (as defined below) except as may be
required for Participant to perform in good faith his or her job responsibilities to the Company while employed by the Company. Upon Participant’s termination of employment,
Participant shall return to the Company all Confidential Information and shall not retain any Confidential Information in Participant’s possession that is in written or other
tangible form and shall not furnish any such Confidential Information to any third party, except as provided herein. Notwithstanding the foregoing, this Section 4(a) shall not
apply to Confidential
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Information that (i) was publicly known at the time of disclosure to Participant, (ii) becomes publicly known or available thereafter other than by any means in violation of this
Section 4 or any other duty owed to the Company by Participant, (iii) is lawfully disclosed to Participant by a third party, or (iv) is required to be disclosed by law or by any
court, arbitrator or administrative or legislative body with actual or apparent jurisdiction to order Participant to disclose or make accessible any information or is voluntarily
disclosed by Participant to law enforcement or other governmental authorities. Furthermore, in accordance with the Defend Trade Secrets Act of 2016, Participant will not be
held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local
government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a
complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. As used in this Program, Confidential Information means, without
limitation, any non-public confidential or proprietary information disclosed to Participant or known by Participant as a consequence of or through Participant’s relationship with
the Company, in any form, including electronic media. Confidential Information also includes, but is not limited to the Company’s business plans and financial information,
marketing plans, and business opportunities. Nothing herein shall limit in any way any obligation Participant may have relating to Confidential Information under any other
agreement, promise or duty to the Company.
(b) Non-Competition. In the course of the performance of Participant’s job responsibilities for the Company, Participant has obtained and will continue to obtain
extensive and valuable knowledge and information concerning the Company’s business (including confidential information relating to the Company and its operations,
intellectual property, assets, contracts, customers, personnel, plans, marketing plans, research and development plans and prospects). Accordingly, during employment with the
Company and for the applicable Restricted Period following Participant’s termination of employment, Participant will not engage in any business activities on behalf of any
enterprise which competes with the Company or any of its affiliates in the business of (i) ownership or operation of Health Care Facilities; (ii) investment in or lending to
Health Care Facilities (including to an owner or developer of Health Care Facilities); (iii) management of Health Care Facilities; or (iv) provision of any consulting, advisory,
research or planning or development services to Health Care Facilities.
Participant will be deemed to be engaged in such competitive business activities if Participant participates in such a business enterprise as an employee, officer,
director, consultant, agent, partner, proprietor, or other participant; provided that the ownership of no more than two percent (2%) of the stock of a publicly traded corporation
engaged in a competitive business shall not be deemed to be engaging in competitive business activities. If Participant provides services to an enterprise that has some activities
that compete with the Company or any of its affiliates in any area described above and other activities that do not compete with the Company or any of its affiliates in any of
the areas described above, then so long as Participant provides services exclusively to the portion of such enterprise that does not compete with the Company and its affiliates,
Participant will not be deemed to be engaged in a competitive business activity as described in this Section 4(b).
(c) Non-Solicitation. During employment with the Company and for one year following the end of Participant’s employment with the Company, Participant, to the
fullest extent not prohibited by applicable law, directly or indirectly, individually or on behalf of any other person or entity, including Participant, will not encourage, induce,
attempt to induce, recruit, attempt to recruit, solicit or attempt to solicit or participate in any way in hiring or retaining for employment, contractor or consulting opportunities
anyone who is employed or providing full-time services as a consultant at that time by the Company or any subsidiary or affiliate of the Company.
(d) Non-Disparagement. At all times during and following Participant’s employment with the Company, Participant will not make or direct anyone else to make on
Participant’s behalf any disparaging or untruthful remarks or statements, whether oral or written, about the Company, its operations or its products, services, affiliates, officers,
directors, employees, or agents, or issue any communication that reflects adversely on or encourages any adverse action against the Company. Participant will not make any
direct or indirect written or oral statements to the press, television, radio, on social media or to, on or through other media or other external persons or entities concerning any
matters pertaining to the business and affairs of the Company, its affiliates or any of its officers or directors. The restrictions described in this paragraph shall not apply to any
truthful statements made in response to a subpoena or other compulsory legal process or to law enforcement or other governmental authorities.
(e) Remedies. For the avoidance of doubt, any breach of any of the provisions in this Section 4 shall constitute a material breach by Participant. Among the
remedies that the Company may pursue in the event that such breach occurs prior to the occurrence of a Change in Corporate Control, an Award (including an Earned Award)
granted under this Program and shares of Common Stock issued under this Program to a Participant shall be subject to forfeiture in the event that a Participant breaches any
provision of Section 4 herein. Notwithstanding any other provision of this Program, by becoming entitled to receive any payments or other benefits under this Program,
Participant is deemed to have agreed that damages would be an inadequate remedy for the Company in the event of a breach or threatened breach by Participant of any of
Sections 4(a) through 4(d), inclusive. In the event of any such
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5
breach or threatened breach, and without relinquishing any other rights or remedies that the Company may have, including but not limited to the forfeiture or repayment by
Participant of any payments or benefits otherwise payable or paid to Participant under this Program, the Company may, either with or without pursuing any potential damage
remedies and without being required to post a bond, obtain from a court of competent jurisdiction, and enforce, an injunction prohibiting Participant from violating this Section
4 and requiring Participant to comply with its provisions. The Company may present this Section 4 to any third party with which Participant may have accepted employment, or
otherwise entered into a business relationship, that the Company contends violates this Section 4, if the Company has reason to believe Participant has or may have breached a
provision of this Section 4.
5.
Determination of Awards. Each Participant’s Award Notice shall specify the size of such Participant’s Award, which shall be expressed as the maximum
number of Shares issuable to the Participant as an Earned Award. The formula or criteria to determine the portion of an Award that becomes issuable, if any, as an Earned
Award is set forth in on Exhibit A. For performance between two different tiers, the portion of an Award that becomes issuable, if any, as an Earned Award shall be calculated
using linear interpolation between tiers. Except as otherwise provided herein, Awards shall be settled in Shares upon satisfaction of the requirements as set forth in Section 8.
6.
Change in Corporate Control. In the event that on or prior to December 31, 2025, a Change in Corporate Control occurs, then each outstanding Award held
by each Participant remaining employed by the Company through the time of the Change in Corporate Control will be deemed earned as of the date of such Change in
Corporate Control in accordance with the computation described in Exhibit A as if the Performance Period ended on the day prior to the consummation of the Change in
Corporate Control, except that corporate metrics not tied to TSR (e.g., the FFO Goal) shall be calculated based on the results through the most recent completed fiscal quarter.
Notwithstanding any other provision of the Program to the contrary, any Shares issued to satisfy such outstanding Earned Awards as provided in this Section 6 shall be fully
vested and nonforfeitable.
7.
Termination of Participant’s Employment.
Except as otherwise determined by the Compensation Committee or as provided in Section 6 in the event of the occurrence of a Change in Corporate Control, all
Awards held by a Participant shall, without payment of any consideration by the Company, automatically and without notice terminate, be forfeited and be and become null and
void in the event such Participant’s employment with the Company and its Subsidiaries terminates for any reason other than a Qualified Termination prior to the end of the
Performance Period, and neither the Participant nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in
such Awards. Upon a Qualified Termination, a prorated portion of the Award of such terminated Participant shall be eligible to vest following the end of the Performance Period
and become an Earned Award. Such prorated portion shall be determined by multiplying (i) the number of Shares issuable as an Earned Award following the end of the
Performance Period determined in accordance with Section 8 by (ii) a fraction, the numerator of which shall be the number of complete months during which the Participant
was an employee of the Company during the Performance Period and the denominator of which shall be 48. A Participant whose employment has terminated on account of a
Qualified Termination must continue to comply with all of the restrictive covenants set forth in Section 4 through and including the Issuance Date as a condition precedent for
any portion of such Participant’s Award to become an Earned Award, regardless of any time limitations on one or more of such restrictive covenants set forth in Section 4 and
notwithstanding the level of achievement of the performance goals set forth in Exhibit A.
8.
Payment of Awards.
(a)
As soon as practicable following the end of the Performance Period, the Compensation Committee shall determine the amount of each Participant’s
Earned Award, if any, with respect to the Performance Period. Subject to (1) a Participant’s continued employment with the Company or a Subsidiary through and including the
end of the Performance Period and (2) compliance with all of the restrictive covenants set forth in Section 4 through and including the Issuance Date, the Shares payable with
respect to the Earned Award shall be paid out and settled in Shares on the Issuance Date. In no event shall the Issuance Date with respect to the end of the Performance Period
be later than March 15, 2026; provided, that in the case of the Performance Period that ends upon a Change in Corporate Control, the Issuance Date shall be no later than
immediately prior to the consummation of the Change in Corporate Control.
The Company shall issue to each Participant with regard to a Performance Award a number of Shares as determined in accordance with the other
provisions of the Program, including Exhibit A. In addition, on the Issuance Date, the Company shall pay to each Participant (or such Participant’s estate or beneficiary, if
applicable) an amount equal to the Dividend Value multiplied by the number of Shares issued at such
(b)
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6
time. Such amount equal to the Dividend Value shall be paid in cash, Shares, other property or a combination of foregoing as may be determined by the Company in its sole
discretion.
9.
Adjustments. Without duplication with the provisions of Sections 3 and 11 of the Equity Plan, if (i) the Company shall at any time be involved in a merger,
consolidation, dissolution, liquidation, reorganization, exchange of Shares, sale of all or substantially all of the assets or Shares of the Company or a transaction similar thereto,
(ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization, or other similar change in the capital structure of the Company, or
any distribution to holders of Shares other than ordinary cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Compensation Committee
necessitates action by way of adjusting the terms of the Program, then and in that event, the Compensation Committee shall take such action as shall be necessary to maintain
the Participants’ rights hereunder so that they are substantially the same rights existing under the Program prior to such event.
10.
Restrictions and Conditions; Non-Transferability of Awards. Subject to the provisions of the Equity Plan and the Program, except as may otherwise be
permitted by the Compensation Committee, a Participant shall not be permitted voluntarily or involuntarily to sell, assign, transfer, or otherwise encumber or dispose of all or
any portion of an Award; provided that the foregoing restriction shall not apply to Shares actually issued to a Participant.
11.
Withholding of Tax. Unless otherwise agreed to between the Company and a Participant, the Company will cause the required minimum tax withholding
obligation (or such other rate that will not cause an adverse accounting consequence or cost) to be satisfied by withholding a number of Shares to be issued to a Participant with
an aggregate Fair Market Value that would satisfy the withholding amount due. The Company’s obligation to deliver stock certificates (or evidence of book entry) to any
Participant is subject to and conditioned on tax withholding obligations being satisfied by such Participant or through the Company’s exercise of its authority. The
Compensation Committee expressly provides that the required minimum tax withholding obligation (or such other rate that will not cause an adverse accounting consequence
or cost) of an Award granted to a Participant who is an officer within the meaning of Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended, shall
be satisfied by withholding a number of Shares to be issued to the Participant with an aggregate Fair Market Value that satisfies the withholding amount due.
12.
Miscellaneous.
any Participant, but no such amendment shall adversely affect the rights of the Participants with regard to outstanding Awards in any material respect.
(a)
Amendment and Termination. The Company reserves the right to amend or terminate the Program at any time in its discretion without the consent of
No Contract for Continuing Services. The Program shall not be construed as creating any contract for continued services between the Company or
any of its Subsidiaries and any Participant, and nothing herein contained shall give any Participant the right to be retained as an employee or consultant of the Company or any
of its Subsidiaries or to receive any future awards or benefits under the Equity Plan.
(b)
Governing Law. The Program and each Award Notice awarded under the Program shall be construed in accordance with and governed the laws of
the State of Ohio, without regard to principles of conflict of laws of such state; provided, however, that matters of corporate law, including the issuance of Shares, shall be
governed by the General Corporation Law of the State of Delaware.
(c)
(d)
Arbitration. All claims, disputes, questions, or controversies arising out of or relating to the Program, will be resolved exclusively in final and
binding arbitration held under the auspices of Judicial Arbitration & Mediation Services, Inc. (“JAMS”) in accordance with JAMS then current Employment Arbitration Rules
and Procedures, or successor rules then in effect. The arbitration will be held in New York, New York, and will be conducted and administered by JAMS or, in the event JAMS
does not then conduct arbitration proceedings, a similarly reputable arbitration administrator. Participant and the Company will select a mutually acceptable, neutral arbitrator
from among the JAMS panel of arbitrators. Except as provided by the Program, the Federal Arbitration Act will govern the administration of the arbitration proceedings. The
arbitrator will apply the substantive law (and the law of remedies, if applicable) of the State of Ohio, or federal law, if Ohio law is preempted, and the arbitrator is without
jurisdiction to apply any different substantive law. Participant and the Company will each be allowed to engage in adequate discovery, the scope of which will be determined by
the arbitrator consistent with the nature of the claim(s) in dispute. The arbitrator will have the authority to entertain a motion to dismiss and/or a motion for summary judgment
by any party and will apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator will render a written award and supporting opinion
that will set forth the arbitrator’s findings of fact and conclusions of law. Judgment upon the award may be
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7
entered in any court of competent jurisdiction. The Company will pay the arbitrator’s fees, as well as all administrative fees, associated with the arbitration. Each party will be
responsible for paying its own attorneys’ fees and costs (including expert witness fees and costs, if any), provided, however, that the arbitrator may award attorney’s fees and
costs to the prevailing party, except as prohibited by law. If the Company is the prevailing party, the arbitration may award some or all of the costs for the arbitrator’s fees
and/or other administrative fees to the fullest extent not prohibited by law. The existence and subject matter of all arbitration proceedings, including, any settlements or awards
thereunder, shall remain confidential.
singular form of words shall be extended to include the plural; and the plural shall be restricted to mean the singular.
(e)
Construction. Wherever appropriate, the use of the masculine gender shall be extended to include the feminine and/or neuter or vice versa; and the
numbers and the text of the Program, the text shall control.
(f)
Headings. The Section headings and Section numbers are included solely for ease of reference. If there is any conflict between such headings or
plans, programs or policies.
(g)
Effect on Other Plans. Nothing in the Program shall be construed to limit the rights of Participants under the Company’s or its Subsidiaries’ benefit
accordance with the terms of the Company’s clawback or recoupment policy (as in effect from time to time).
(h)
Clawback Policy. All Awards granted under the Program shall be subject to forfeiture (as determined by the Compensation Committee) in
registered mail (return receipt requested), postage prepaid, addressed as follows (or to such other address as such party may designate in writing from time to time):
(i)
Notices. Any notice provided for under the Program shall be in writing and may be delivered in person or sent by overnight courier, certified mail, or
If to the Company: Welltower Inc., 4500 Dorr Street, Toledo, OH 43615 Attention: General Counsel
If to a Participant, at the address on file with the Company’s Human Resources Department.
The actual date of mailing, as shown by a mailing receipt therefor, shall determine the time at which notice was given. Any Participant may change the address at which notice
shall be given by notifying the Company in the manner set forth in this Section 12(i). The Company may change the address at which notice shall be given by notifying each
Participant in the manner set forth in this Section 12(i).
(j) Section 409A.
(1) The Program is intended to comply with Section 409A of the Code (“Code Section 409A”) and will be interpreted in a manner intended to comply with
Code Section 409A. Any provision that would cause the Program or any payment hereunder to fail to satisfy Code Section 409A of the Code shall have no force or effect until
amended to the minimum extent required to comply with Code Section 409A, which amendment may be retroactive to the extent permitted by Code Section 409A. A
termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits that may be
considered to be subject to Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A) upon or following a
termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of the
Program, references to a “retirement,” “termination,” “termination of employment” or like terms shall mean such a “separation from service”.
(2) Any payment scheduled to be made under the Program that may be considered made under a “nonqualified deferred compensation plan” subject to Code
Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A), that are otherwise due on or within the six-month
period following termination of employment will accrue during such six-month period and will instead become payable in a lump sum payment on the first business day period
following such six-month period. Furthermore, notwithstanding any contrary provision herein, if any other payments of money or other benefits due to a Participant under this
Agreement could cause the application of an accelerated or additional tax under Code Section 409A, such payments or other benefits shall be deferred if deferral will make
such payment or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner,
determined by the Company, that does not cause such an accelerated or additional tax.
103181563v10
8
treated as a “separate payment” within the meaning of Code Section 409A.
(3) Notwithstanding any contrary provision herein, a Participant’s right to any payment (including each installment payment) under the Program shall be
END OF PROGRAM DOCUMENT
Exhibit A
The size of the Performance Pool shall be equal to that number of Shares with an aggregate Common Stock Price equal to $80 million on January 17, 2022, rounded to the next
higher even number of whole Shares, which resulted in a total Performance Pool in the amount of 938,088 Shares. Of that total, 50% ($40 million) shall be allocated to a sub-
pool for Relative Performance to the Health Care REIT Index and 50% ($40 million) shall be allocated to a sub-pool for Relative Performance to the All REIT Index. The
number of Shares placed subject to an individual Award shall be determined by dividing the maximum dollar value of such Award by the Common Stock Price on the date of
grant of such Award and rounding to the closest whole Share and 50/50 allocation to each index shall be applied to each Award.
In order for any portion of an Award to become an Earned Award under the Program, both of the Threshold Goals must be achieved or exceeded for the Performance Period.
In the event that both of the Threshold Goals are achieved or exceeded for the Performance Period, then the number of shares of Common Stock subject to Awards issuable as
Earned Awards shall be determined based on the achievement of Relative Performance in accordance with the table immediately below. Upon the certification by the
Compensation Committee of the levels of Relative Performance against the Health Care REIT Index and the All REIT Index, such relative levels shall be applied to each then
outstanding Award in the same proportions.
Relative Performance to Health Care REIT Index
Performance Pool Funding
Number of Shares Payable as Earned Awards
Relative Performance to All REIT Index
Performance Pool Funding
Number of Shares Payable as Earned Awards
Threshold Performance
Relative Performance
of 100%
Midlevel Performance
Relative Performance
of 150%
Maximum Performance
Relative Performance
of 200%
$0
0
$0
0
$20,000,000
234,522
$20,000,000
234,522
$40,000,000
469,044
$40,000,000
469,044
1. For performance between two different tiers, the amount of the “Performance Pool Funding” and “Number of Shares payable as Earned Awards” shall be calculated using
linear interpolation between tiers.
2. The Performance Pool Funding dollar amounts are determined as of the time of the inception of the Program and then converted into shares of Common Stock based on the
Common Stock Price on January 17, 2022.
3. Notwithstanding the foregoing, achievement of the Override Goal shall result in the “Number of Shares Payable as Earned Awards” being determined assuming the
maximum size for both sub-pools of the Performance Pool for purposes of “Performance Pool Funding” and a Relative Performance of 200%.
4. Other conditions for an Award to become an Earned Award are set forth in the Program.
103181563v10
9
Exhibit 10.19(b)
THIS 2022 OUTPERFORMANCE PROGRAM AWARD AGREEMENT (the “Agreement”), made this [______] day of January, 2022, between Welltower Inc., a
Delaware corporation (the “Corporation”), and [________________] (the “Participant”).
2022 OUTPERFORMANCE PROGRAM AWARD AGREEMENT
WHEREAS, the Participant is an employee of the Corporation; and
WHEREAS, the Corporation adopted the Welltower Inc. 2016 Long-Term Incentive Plan (the “Plan”) and the 2022 Outperformance Program (the “OPP”) in order to
provide select executives and key employees with incentives to achieve long-term corporate objectives; and
WHEREAS, the Compensation Committee of the Corporation’s Board of Directors has determined that the Participant should be granted a restricted stock unit award
subject to performance-based vesting conditions on the terms set forth in the OPP and herein;
WHEREAS, the restricted stock unit award granted to the Participant shall be payable in shares of the Corporation’s common stock, $1.00 par value per share
(“Common Stock”), upon the satisfaction of the conditions set forth below and in accordance with the terms of the OPP.
NOW, THEREFORE, in consideration of the past and future services provided to the Corporation by the Participant and the various covenants and agreements herein
contained, and intending to be legally bound hereby, the parties hereto agree as follows:
1.
GRANT OF AWARD.
(a)
The Corporation hereby grants to the Participant an award of [____] restricted stock units (the “Award”) on January [_____], 2022 (the “Date of Grant”),
payable in shares of Common Stock. Such number of restricted stock units represents the maximum number of shares of Common Stock that may be issued to the Participant as
an Earned Award. The Participant further acknowledges and agrees that the number of shares of Common Stock ultimately issued to the Participant under this Agreement as an
Earned Award may be less than such maximum number.
(b)
The Participant shall not be required to provide the Corporation with any payment (other than his or her past and future services to the Corporation) in
exchange for the Award or in exchange for the issuance of shares of Common Stock (upon the determination of the Earned Award and satisfaction of the applicable periods of
continued service with the Corporation).
2.
DELIVERY OF SHARES.
(a) The Participant shall not be entitled to the issuance of shares of Common Stock or to receive any distributions with respect to the Award until the determination
of the Earned Award as provided in the OPP and in Section 3 or 5 below. Further, the Participant shall not have any of the rights and privileges of a stockholder of the
Corporation (including voting rights and the right to receive dividends) until the shares of Common Stock are issued to the Participant. However, dividend equivalents shall
accrue on the restricted stock units subject to an award during the period beginning on the Date of Grant of the Award and ending on the Issuance Date, which dividend
equivalents will be paid with respect to the Participant’s Earned Award at the same time that shares of Common Stock are paid in accordance with the terms of the OPP. For
avoidance of doubt, any dividend equivalents accrued with respect to any portion of an Award that is not the Earned Award shall not be paid and shall be forfeited.
(b) The Participant’s Award, including any rights thereunder, may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of by the
Participant, and the underlying shares of Common Stock potentially issuable to the Participant under this Agreement may not be sold, transferred, assigned, pledged or
otherwise encumbered by the Participant until such shares are so issued and cease to be subject to a risk of forfeiture. Any attempt to dispose of the Participant’s Award or
shares issued thereunder in a manner contrary to the restrictions set forth in this Agreement shall be ineffective, null and void.
1
3.
ISSUANCE OF SHARES.
The Corporation shall issue shares of Common Stock to the Participant in accordance with the provisions of Section 8 of the OPP.
4.
TAX WITHHOLDING.
The Corporation shall satisfy its tax withholding obligations in accordance with Section 11 of the OPP.
5.
TERMINATION OF EMPLOYMENT.
In the event of the end of the Participant’s employment with the Corporation prior to the time that all vested shares of Common Stock, if any, are issued under the OPP,
the Award shall be administered in accordance with Section 7 of the OPP.
6.
DEFINITIONS.
Capitalized terms used herein without definitions shall have the meanings given to those terms in the OPP.
7.
SECURITIES LAWS.
The Corporation may from time to time impose such conditions on the vesting of the Award, and/or the issuance of shares of Common Stock upon vesting of the
Award, as it deems reasonably necessary to ensure that any grant of the Award and issuance of shares of Common Stock under this Agreement will satisfy the applicable
requirements of federal and state securities laws. Such conditions may include, without limitation, the partial or complete suspension of the right to receive shares of Common
Stock until the Common Stock has been registered under the Securities Act of 1933, as amended. In all events, if the issuance of any shares of Common Stock is delayed by
application of this Section 7, such issuance shall occur on the earliest date on which it would not violate applicable law.
8.
GRANT NOT TO AFFECT EMPLOYMENT.
Neither this Agreement nor the Award granted hereunder shall confer upon the Participant any right to continued employment with the Corporation. This Agreement
shall not in any way modify or restrict any rights the Corporation may have to terminate such employment.
9.
ADJUSTMENTS TO AWARD.
In the event of any change or changes in the outstanding Common Stock by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-
up, combination or any similar transaction, the Award granted to the Participant under this Agreement shall be adjusted by the Compensation Committee pursuant to Section
11.2 of the Plan in such manner as the Compensation Committee deems appropriate to prevent substantial dilution or enlargement of the rights granted to the Participant.
10.
MISCELLANEOUS.
(a)
(b)
This Agreement may be executed in one or more counterparts, all of which taken together will constitute one and the same instrument.
The terms of this Agreement may only be amended, modified or waived by a written agreement executed by both of the parties hereto.
and those of the Plan or the OPP, the provisions of the Plan and the OPP shall control.
(c)
The provisions of the Plan and OPP are hereby made a part of this Agreement. In the event of any conflict between the provisions of this Agreement
The Award granted under this Agreement is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), under the exemption for “short-term deferrals” under Treasury Regulation Section 1.409A-1(b)(4), and shall be interpreted in a manner consistent
with the requirements for such exemption. To the extent that changes are
(d)
2
necessary to ensure that the Award and any related dividend equivalent rights comply with any additional requirements for such exemption imposed by future IRS guidance
on the application of Section 409A of the Code, the Participant and the Corporation agree to cooperate and work together in good faith to timely amend this Agreement so
that the Award and any dividend equivalent rights will not be treated as deferred compensation subject to the requirements of Section 409A of the Code.
The validity, performance, construction and effect of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to
principles of conflicts of law; provided, however, that matters of corporate law, including the issuance of shares of Common Stock, shall be governed by the General
Corporation Law of the State of Delaware.
(e)
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
PARTICIPANT WELLTOWER INC.
________________________________ By: ______________________________
[Signature] [Signature]
Name: __________________________ Name: ___________________________
Title: ____________________________
3
Subsidiary Name
0722548 B.C. Ltd.
100 Knoedler Road, LLC
100 Trich Drive LLC
1000 Aston Gardens Drive, LLC
101 E 87th Ave LLC
101052983 Saskatchewan Ltd.
10475 Wilshire Boulevard Borrower, LLC
10475 Wilshire Boulevard, 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
11320 North Council Road, LLC
1133 Black Rock Road, LLC
1137915 B.C. Ltd.
1220 La Venta Drive Westlake Medical LLC
1231356 Ontario Limited
1250 La Venta Drive Community Medical 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
139 East 56th Street Landlord LLC
1405 Limekiln Pike, LLC
1512 12th Avenue LLC
1528670 Ontario Limited
15401 North Pennsylvania Avenue, LLC
1574 Creekside Drive Folsom, LLC
1600 Center Road, LLC
1640 Newport Blvd. LP
1814 Roseland Boulevard LLC
1931 Southwest Arvonia Place, LLC
200 Pond Road LLC
2000 Emerald Court LLC
20207 Chasewood Park Drive LLC
2035244 Ontario Inc.
2050 North Webb Road, LLC
2101 New Hope Street, LLC
220 North Clark Drive, LLC
2200 NW Myhre Road LLC
2217 Decatur Highway LLC
231 Courtyard Boulevard, LLC
2323 N Casaloma Drive LLC
2325 Dougherty Rd LLC
2340829 Ontario Inc.
2340830 Ontario Inc.
2356 Meadows Blvd LLC
239 Cross Road LLC
2419 North Euclid Avenue Upland, LLC
EXHIBIT 21
Jurisdiction of Organization
British Columbia
Delaware
Delaware
Delaware
Delaware
Saskatchewan
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Ontario
Delaware
Delaware
Ontario
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
California
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Ontario
Delaware
Delaware
California
2488 N California Street LLC
2721 Willow Street LP
27783 Center Drive LP
2800 60th Avenue West, LLC
2929 West Holcombe Boulevard, LLC
300 St. Albans Drive, LP
303 West Lake Street LLC
320 St. Albans Drive, LP
3220 Peterson Road, LLC
3485 Independence Drive LLC
35 Fenton Street, 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
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
4800 Aston Gardens Way, LLC
4865 MacArthur Landlord LLC
50 Greenleaf Way LLC
50 Town Court, LLC
500 Seven Fields Boulevard, LLC
504 North River Road, LLC
505 North Maize Road, LLC
5300 West 29th Street, LLC
5301 Creedmoor Road, LP
5330 W Michael Drive LLC
5455 Glenridge Drive, NE, LLC
5521 Village Creek Drive, LLC
557140 B.C. Ltd.
5939 Roosevelt Boulevard, LLC
5999 N. University Drive, LLC
60 Stafford Street LLC
601 West Highway 6 LLC
6011 Farrington Road LLC
6144 Airport Boulevard LLC
6605 Quail Hollow Road, LLC
700 Smith Street Providence LLC
7001 Forest Avenue, LLC
701 W. 71st Street South, LLC
731 Old Buck Lane, LLC
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
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
British Columbia
Kansas
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
7442 Frank Avenue LLC
75 Minnesota Avenue Warwick LLC
7900 Creedmoor Road, LP
7902 South Mingo Road East, LLC
800 Canadian Trails Drive, LLC
800 Oregon Street LLC
8220 Natures Way, LLC
831 Santa Barbara Boulevard, LLC
880 Greendale Avenue LLC
90 Avenue S.W. Property Inc.
90 West Avenue, LLC
9108-9458 Quebec Inc.
9128-6757 Quebec Inc.
9168-0215 Quebec Inc.
9188-4502 Quebec Inc.
9189-2042 Quebec Inc.
9198-9541 Quebec Inc.
9208-0837 Quebec Inc.
9307-0985 Quebec Inc.
9307-1306 Quebec Inc.
9307-1348 Quebec Inc.
9314-3410 Quebec Inc.
AH-WT Holdings LLC
AL Santa Monica Senior Housing, LP
Alberta Acres Facility Inc.
Allentown PCH, LLC
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
Aspen Tower Propco 5 Ltd
Aspen Tower Propco 7 Limited
Aspen Tower Propco 8 Limited
Aspen Tower Properties (Adderbury) Ltd
Aspen Tower Properties (Bath) Ltd
Aspen Tower Properties (Bournville) Ltd
Aspen Tower Properties (Lane End) Ltd
Aspen Tower Properties (Little Bookham) Ltd
Aspen Tower Properties (Newbury) Ltd
Aspen Tower Properties (Solihull) Ltd
Aspen Tower Properties (Sutton Coldfield) Ltd
Aspen Tower Properties (Sutton) Ltd
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Quebec
Delaware
Delaware
Ontario
Pennsylvania
Ontario
Ontario
Jersey
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Aspen Tower Properties (Woking) Ltd
Aspen Tower Properties Holdco Ltd
Aurora Guardian Holdco I, LLC
Aurora Guardian Holdco IV, LLC
Aurora Guardian Holdco V, LLC
BAL Holdings II, LLC
BAL Holdings VII, LLC
BAL Howell LLC
BAL Longwood LLC
Ballard Healthcare Investors, LLC
Bayfield Court Operations Limited
Bear Creek CTR Realty LLC
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
Jersey
Jersey
Delaware
Delaware
Delaware
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
Broadway 85th Tenant LLC
Brockport Tenant, LLC
Brockville Facility Inc.
Brooklyn Healthcare Investors, LLC
Broomfield CO Senior Living Owner, LLC
BSL Sparti TRS LLC
Burbank Subtenant LP
Bushey Property Holdings Limited
B-X Middletown RI LLC
B-X Operations Holding Company LLC
B-X Providence LLC
B-X Shelburne LLC
B-X Warwick LLC
B-XI Operations Holding Company LLC
B-XII Operations Holding Company LLC
B-XIV Operations Holding Company LLC
Canvas Fulshear Owner, LLC
Canvas McKinney I Owner, LLC
Canvas Midlothian I Owner, LLC
Canvas PC Owner, 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 Belleair Towers LLC
Churchill Eastdale Estates LLC
Churchill Facility Inc.
Churchill Hawaii Kai Owner LLC
Churchill NEC Owner LLC
Churchill Park Plaza LLC
Churchill Portfolio Holdings Inc.
Churchill Property Member LLC
Churchill Property Portfolio Holdco LP
Churchill Property Portfolio Owner LP
Churchill REIT Holdco LLC
Churchill REIT LLC
Churchill RIDelawareA Holdco LLC
Churchill University Oaks LLC
Churchill Windlands East LLC
Cincinnati Physicians, LLC
Claremont Facility Inc.
Clover Communities Beavercreek 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
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Delaware
Jersey
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Ohio
Delaware
Delaware
New York
New York
Ohio
Pennsylvania
Delaware
New York
New York
Clover Communities Lorain LLC
Clover Communities Miami 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
Columbia Boulevard West Property Inc.
Coon Rapids Healthcare Investors, LLC
Coopers Corner Inc.
Coopers Corner Tenant LLC
Coppell ALF, LLC
Coventry Subtenant LP
CPF Landlord, LLC
CSH-HCN Lessee (Alexander) LP
CSH-HCN Lessee (Archer) LP
CSH-HCN Lessee (Avondale) LP
CSH-HCN Lessee (Belcourt) LP
CSH-HCN Lessee (Boulogne) LP
CSH-HCN Lessee (Chicoutimi) LP
CSH-HCN Lessee (Christopher) LP
CSH-HCN Lessee (Ecores) LP
CSH-HCN Lessee (Fountains) LP
CSH-HCN Lessee (Giffard) LP
CSH-HCN Lessee (Gordon) LP
CSH-HCN Lessee (Harmonie) LP
CSH-HCN Lessee (Heritage) LP
CSH-HCN Lessee (Imperial) LP
CSH-HCN Lessee (Jonquiere) LP
CSH-HCN Lessee (Kingsville) LP
CSH-HCN Lessee (Lachine) LP
CSH-HCN Lessee (Lansing) LP
CSH-HCN Lessee (l'Atrium) LP
CSH-HCN Lessee (Laviolette) LP
CSH-HCN Lessee (Leamington) LP
CSH-HCN Lessee (l'Ermitage) LP
CSH-HCN Lessee (L'Estrie) LP
CSH-HCN Lessee (Livingston) LP
CSH-HCN Lessee (Marquis) LP
CSH-HCN Lessee (McConnell) LP
CSH-HCN Lessee (Notre-Dame) LP
CSH-HCN Lessee (Pines) LP
CSH-HCN Lessee (Pointe-Aux-Trembles) LP
CSH-HCN Lessee (Renaissance) LP
CSH-HCN Lessee (Rideau) LP
CSH-HCN Lessee (Rive-Sud) LP
CSH-HCN Lessee (Royalcliffe) LP
CSH-HCN Lessee (Saguenay) LP
CSH-HCN Lessee (Saint-Jerome) LP
CSH-HCN Lessee (Scarlett) LP
CSH-HCN Lessee (Tranquility) LP
CSH-HCN Lessee (Trembles) LP
Ohio
Delaware
New York
Delaware
Delaware
Delaware
New York
New York
Ohio
Delaware
British Columbia
Delaware
Virginia
Delaware
Kansas
Delaware
Delaware
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
CSH-HCN Lessee (Wellesley) LP
CW Property Inc.
Dawn Opco Limited
DelawareLM Nursing, LLC
Denton ALF, LLC
Denver Tenant, LLC
Dresden Village Owner LLC
Dresden Village Tag Member LLC
DRF Durango LLC
DRF Fenton LLC
DRF Gig Harbor LLC
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
Edgemont Facility Inc.
Element Acquisition Sub. 3, LLC
EPC Hammes LLC
EPC IRA Holdco 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
Erwin NNN Landlord Group LLC
Evergreen Place at Brockport Inc.
Faribault Assisted Living, LLC
FC Trident Investment, LLC
FCalifornia Finance B Secured Party, LLC
FC-GEN Acquisition, Inc.
FC-GEN Real Estate, LLC
FHC Mount Vernon LLC
Finco TRS Limited
First Tower Holdco, LLC
First Tower Insurance, LLC
First Tower Partners LLC
FloridaA-PennsylvaniaLM COURT Limited Partnership
Fleetwood Villa Facility Inc.
Flower Mound ALF, LLC
Frontier Exchange Landlord Group LLC
G & L Tustin III, LP
G&L 4150 Regents LP
G&L 436 Bedford LLC
Gemini Las Colinas, L.L.C.
Gen Three Lakeshore Place Corporation
Genesis Eldercare LLC
Genesis Eldercare National Centers, LLC
Genesis HC LLC
Genesis Healthcare Holding Company I, LLC
Ontario
British Columbia
United Kingdom
Pennsylvania
Kansas
Delaware
Delaware
Delaware
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Delaware
Delaware
Delaware
Delaware
Delaware
Oklahoma
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Virginia
Minnesota
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Delaware
Delaware
Delaware
Minnesota
United Kingdom
Delaware
Tennessee
Vermont
Florida
Ontario
Kansas
Delaware
Delaware
Delaware
Delaware
Oklahoma
British Columbia
Delaware
Florida
Pennsylvania
Delaware
Genesis Meridian 7 Leasing Properties Limited Partnership, L.L.P.
Genesis Meridian 7 Partnership Holding Company L.L.C.
Genoa Healthcare Investors, LLC
Georgetown Mays Street Owner LLC
Geriatric and Medical Services, Inc.
GHC Sub LLC
GHC Sub New Jersey LLC
GHC TRS LLC
Gig Harbor Physicians, LLC
Golden Gate Subtenant LP
Golden Peaks CTR Realty LLC
Grace Lodge Care Limited
Grace Lodge Care Operating S.a.r.l.
Gracewell Healthcare 1 Limited
Gracewell Healthcare 4 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 (Birmingham) 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 (Salisbury) Limited
Gracewell Properties (Shelbourne) Limited
Gracewell Properties (Weymouth) Limited
Gracewell Properties Holdings Limited
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.
Hammonds Lane Meridian Limited Partnership
Harnett Health Investors, LP
HCN (Pembroke) Property Inc.
HCN (ROSEHILL) PROPERTY IndianaC.
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
Virginia
Delaware
Delaware
Delaware
New Jersey
Delaware
New Jersey
Delaware
Delaware
Delaware
Delaware
Jersey
Luxembourg
United Kingdom
United Kingdom
Jersey
Jersey
Jersey
United Kingdom
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Michigan
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Virginia
Maryland
Virginia
British Columbia
Ontario
British Columbia
Ontario
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Ontario
HCN Canadian Investment (Regency) LP
HCN Canadian Investment (Regent Park) LP
HCN Canadian Investment (Teasdale) LP
HCN Canadian Investment-4 LP
HCN Canadian Investment-5 LP
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 (Regency) GP Ltd.
HCN Investment (Regent Park) GP Ltd.
HCN Investment (Teasdale) 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 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
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.
Ontario
Ontario
Ontario
Ontario
Ontario
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
Ontario
Ontario
British Columbia
Delaware
Delaware
British Columbia
Ontario
British Columbia
Ontario
Ontario
Delaware
British Columbia
Jersey
Jersey
United Kingdom
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
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 (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
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
Ontario
Ontario
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British Columbia
Ontario
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Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
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.
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.
Ontario
Ontario
Ontario
Ontario
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Ontario
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
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
Ontario
Ontario
Ontario
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Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
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.
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.
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
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Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
Ontario
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 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 New York-New Jersey 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
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
Ontario
Ontario
Ontario
Ontario
Ontario
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
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Delaware
California
California
Delaware
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Texas
Delaware
Delaware
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
Hilltop Health Care Center, LLC
Hingham Terry Drive I LLC
HL GP, LLC
Hunt Club Manor Facility Inc.
HUT ALF, LLC
I.L.S. Care Communities Inc.
Jupiter Landlord, LLC
Kaiser Gemini Burgundy, LLC
Kaiser Gemini Woodland, LLC
KB HC Real Estate Fund LLC
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.
KansasL Landlord, LLC
Lafayette Center Realty, LLC
Laguna Hills Subtenant LP
Lakewood Manor Owner LLC
Lancaster PCH, LLC
Landmark Facility Inc.
Las Palmas Subtenant LP
Lenexa Investors II, LLC
Lenexa Investors, LLC
Lenox Hill Owner LLC
Leon Dorchester Facility Inc.
Lillington AL Health Investors, LP
Lititz PCH, LLC
LW Broomfield PropCo LLC
LW Fort Worth PropCo LLC
LW Jupiter PropCo LLC
LW Mansfield PropCo LLC
LW McKinney PropCo LLC
Maids Moreton Operations Limited
Marietta Physicians LLC
Markglen, LLC
Maverick Tenant, LLC
McKenzie Towne Facility Inc.
Meadowcroft London Facility Inc.
Meadowlands Facility Inc.
Meadowood ALF, LLC
Medical Real Estate Property Managers Of America, LLC
Delaware
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Wisconsin
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Delaware
Florida
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Delaware
Delaware
Delaware
Delaware
Indiana
Ontario
Kansas
Manitoba
Delaware
Oklahoma
Oklahoma
Delaware
Delaware
Minnesota
Delaware
Minnesota
Minnesota
Delaware
Ontario
Ontario
Delaware
Delaware
Delaware
Delaware
Pennsylvania
Ontario
Delaware
Delaware
Delaware
Delaware
Ontario
Virginia
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Delaware
United Kingdom
Delaware
West Virginia
Kansas
Ontario
Ontario
Ontario
Kansas
Florida
Meerkat TRS LLC
Meridian Healthcare, 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
Missionwood Holdings Ltd.
ML Marion, L.P.
Monarch Coopers Corner PropCo LLC
Montgomery Nursing Homes, LLC
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.
MS Stafford, L.P.
MS Wabash, L.P.
MS Westfield, L.P.
Murrieta Healthcare Investors, LLC
Murrieta Healthcare Properties, LLC
Narrows Glen Subtenant LP
North Carolina 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
Northwood Retirement Resort Holding Corporation
Ogilvie Facility Inc.
Delaware
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Ontario
Delaware
British Columbia
Indiana
Delaware
Pennsylvania
Delaware
Delaware
Delaware
Delaware
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Indiana
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Ontario
Oshawa Facility Inc.
Otay Landlord LLC
Otay Tenant LLC
Ottershaw Property Holdings Limited
Overland Park Tenant, LLC
Owensboro Kentucky Propco LLC
Owenton Kentucky Propco LLC
Palmer Healthcare Investors LLC
Paramount Real Estate Services, Inc.
Parkland Commons Subtenant, LLC
Parkwood Retirement Resort Holding Corporation
Pelican Marsh Subtenant, LLC
Pelican Point Subtenant, LLC
Pflugerville Loop Owner LLC
Pleasant View I Realty, LLC
Pleasant View II Realty, LLC
Portage Care 2015, LLC
Portsmouth Facility Inc.
Potomac Acquisition LLC
Poughkeepsie Hopewell Junction LLC
PVL Landlord - BC, LLC
PVL Landlord - STL Hills, LLC
Queensbury Tenant, LLC
Queenswood Facility Inc.
RC 101 E 87th Ave 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
Regal Lifestyle (Birkdale) Inc.
Regal Lifestyle (Chatham) Inc.
Regal Lifestyle (Grand Wood) Inc.
Regal Lifestyle (Lynwood) Inc.
Regal Lifestyle (Port Perry) Inc.
Regency Retirement Resorts Ltd.
Regency Subtenant LP
Renoir Facility Inc.
Riverbend Facility Inc.
Rockwall ALF, 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.
Ontario
Delaware
Delaware
Jersey
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Delaware
Delaware
Delaware
Delaware
Michigan
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Ontario
Delaware
Delaware
Jersey
Jersey
Jersey
United Kingdom
United Kingdom
United Kingdom
Ontario
Ontario
Ontario
Ontario
Ontario
British Columbia
Delaware
Ontario
Ontario
Kansas
Ontario
Texas
Texas
Delaware
Maryland
Texas
Texas
Texas
Texas
Texas
Texas
Texas
Texas
RSF SP Smithfield V L.P.
RSF SP Stroudsburg V, L.P.
RSF SP Wrightsville V L.P.
Sachse Station Boulevard Owner LLC
Sandalwood Yates Land Corporation
Santa Monica GP, LLC
Sarasota Floridian TRS LLC
Sarasota Floridian, LLC
Scranton AL Investors, LLC
Scranton Health Investors, LLC
Senior Living Ankeny, LLC
Senior Living Chesterton 2 LLC
Senior Living Fairfield, LLC
Senior Living Fort Wayne 2 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 Tenant Weber, LLC
Seniors Housing Investment III REIT Inc.
Shelbourne Senior Living Limited
Shelbyville Kentucky Propco LLC
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 Midco Limited
Signature Senior Landlord, LLC
Silverado Senior Living Calabasas, Inc.
Simi Hills Subtenant LP
SIPL Finco S.a.r.l
SIPL Finco TRS S.a.r.l.
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
SIPL Saints Bristol Propco Limited
SIPL Saints Leicester Propco Limited
Texas
Texas
Texas
Delaware
British Columbia
Delaware
Delaware
Florida
Virginia
Virginia
Delaware
Delaware
Michigan
Delaware
Michigan
Delaware
Michigan
Michigan
Delaware
Delaware
Delaware
Maryland
United Kingdom
Delaware
Delaware
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Delaware
California
Delaware
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Jersey
Jersey
United Kingdom
United Kingdom
SIPL Saints Propco Ltd
Sixers Pennsylvania, LLC
Sixers Pennsylvania, LLC
South Valley Medical Building L.L.C.
Southwood Property Corporation
SP Green Ridge, LLC
SP Harnett, LLC
SP Lillington, LLC
SP Virginia Beach, LLC
SP Whitestone, LLC
SSL Tenant, LLC
SSP TP Tag LLC
St. Anthony Physicians, LLC
St. Clare Physicians, LLC
Stamford Physicians, LLC
Sterling Investment Partners Ltd
Sterling Midco Limited
Stittsville Facility Inc.
Stroudsburg Health Investors, LLC
Subtenant 1118 N. Stoneman Avenue, LLC
Subtenant 1301 Ralston Avenue, LLC
Subtenant 1936 Brookdale Road, LLC
Subtenant 25100 Calabasas Road, LLC
Subtenant 330 North Hayworth Avenue, LLC
Subtenant 350 W. Bay Street, LLC
Subtenant 5521 Village Creek Drive, LLC
Subtenant 7001 Bryant Irvin Road, LLC
Subtenant 8855 West Valley Ranch Parkway, LLC
Summerwood Retirement Resort Holding Corporation
Sun City Center Subtenant, LLC
Sunrise at Gardner Park Limited Partnership
Sunrise Connecticut Avenue Assisted Living Owner, L.L.C.
Sunrise Gardner Park GP, Inc.
Sunrise Louisville Kentucky Senior Living, LLC
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 Propco, LLC
Sunrise Operations Bramhall II Limited
Sunrise Operations Esher Limited
Sunrise Operations Weybridge Limited
Sutton Place Owner LLC
SZR Beaconsfield Inc.
SZR Blainville Inc.
SZR Dollard des Ormeaux, Inc.
Tampa Bay Subtenant, LLC
The Blake at Bossier City Landlord LLC
The Blake at Charlottesville Landlord LLC
The Blake at Colonial Club Landlord LLC
The Blake at Kingsport Landlord LLC
The Courtyards Subtenant, LLC
The Landing at Queensbury Inc.
Jersey
Delaware
Delaware
Minnesota
British Columbia
Virginia
Virginia
Virginia
Virginia
Virginia
Delaware
Georgia
Delaware
Delaware
Delaware
Jersey
United Kingdom
Ontario
Virginia
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
British Columbia
Delaware
Massachusetts
Virginia
Massachusetts
Kentucky
New Brunswick
Ontario
New Brunswick
Ontario
New Brunswick
Ontario
Delaware
United Kingdom
United Kingdom
United Kingdom
Delaware
New Brunswick
New Brunswick
New Brunswick
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Virginia
Thousand Oaks Property Owner LLC
Trafalgar Facility Inc.
Urban Senior Living Holdco LLC
Urban Senior Living JV LLC
Valleyview Drive S.W. Property Inc.
Vankleek Facility Inc.
Ventana Canyon Tenant, LLC
Virginia Beach Health Investors, LLC
Voorhees Healthcare Properties, LLC
Voorhees Physicians, LLC
W TCG Burleson AL, LLC
Warwick Associates Of Rhode Island, L.P.
Waterleaf 20 Medical Office Condominiums, Inc.
WBWT Rayzor Ranch 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
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 BT Portfolio Member LLC
WELL BT Project Group 1 LLC
WELL California Landlord LLC
WELL California WA Landlord LLC
WELL California WA Tenant LLC
WELL Cardiff Opco Limited
WELL Churchill Leasehold Owner LLC
WELL Churchill Tenant LLC
WELL Churchill TRS LLC
WELL Columbus JV Member LLC
WELL Cottonwood Beaumont MOB LLC
WELL Cottonwood Tyler MOB LLC
WELL Frontier Landlord LLC
WELL Frontier Tenant LLC
WELL I-A Properties LLC
WELL Ibis Portfolio Member LLC
WELL Ivy 6 Tenant LLC
WELL KISCO DelawareV RIDelawareA MassachusettsSTER LANDLORD, LLC
WELL KISCO DelawareV RIDelawareA MassachusettsSTER TENANT, LLC
WELL KISCO THE CaliforniaRNEGIE LANDLORD, LLC
WELL KISCO THE CaliforniaRNEGIE TENANT, LLC
WELL LC Portfolio LLC
WELL LCB Landlord LLC
WELL LCB Needham Landlord LLC
Delaware
Ontario
Delaware
Delaware
British Columbia
Ontario
Delaware
Virginia
Delaware
Delaware
Delaware
Delaware
Texas
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
United Kingdom
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
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 MF & AA Portfolio Holdco LLC
WELL Monarch Landlord LLC
WELL Monarch Tenant JV Member LLC
WELL Monarch Tenant LLC
WELL NPSL Landlord, LLC
WELL NPSL Tenant, 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 Path Landlord LLC
WELL Path Tenant LLC
WELL PM Properties II LLC
WELL PM Properties LLC
WELL PM Virginia Beach Owner LLC
WELL Properties Intermediate Holdco LLC
WELL SCP Portfolio Member LLC
WELL Sea Bluffs Condos LLC
WELL Silver Waters Owner LLC
WELL SP Grove City Landlord LLC
WELL SP Landlord 2 LLC
WELL SP Landlord LLC
WELL SP Lender LLC
WELL SP Tenant 2 LLC
WELL SP Tenant LLC
WELL Sparrow Project Group 1 LLC
WELL TBC Columbus JV Holdco LLC
WELL TBC Columbus JV LLC
WELL TC Portfolio Member LLC
WELL TP Crabtree Owner LP
WELL TP Dresden Member LLC
WELL TP Dresden Village JV LLC
WELL Trevi Albemarle SNF LLC
WELL Trevi Bronson SNF LLC
WELL Trevi Carlotta SNF LLC
WELL Trevi CCRC Tenant, LLC
WELL Trevi Tenant, LLC
WELL Trevi WH SNF LLC
WELL UK Investments Ltd
WELL Unitranche Member LLC
WELL US SubREIT LLC
WELL WB Portfolio Member LLC
WELL WM Portfolio Member LLC
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
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Jersey
Delaware
Delaware
Delaware
Delaware
WellClover Holdings LLC
WellClover TRS II LLC
WellClover TRS LLC
WellClover Venture II LLC
WellClover Venture LLC
Wellesley Washington Street Housing I LLC
wellFloridaEX 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
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 GP LLC
Welltower HealthCare Properties II LLC
Welltower HealthCare Properties LLC
Welltower HealthCare Venture Properties LLC
Welltower Iowa Holdco LLC
Welltower Kisco RIDelawareA Holdco GP LLC
Welltower Kisco RIDelawareA Holdco LP
Welltower Kisco RIDelawareA Landlord, LLC
Welltower Kisco RIDelawareA Tenant, LLC
Welltower KansasL Owner LLC
Welltower Landlord Group LLC
Welltower Limited Partnership
Welltower Management Company Holdco 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 Pappas MOB 1, LLC
Welltower Pappas MOB 2, LLC
Welltower Pegasus Landlord, LLC
Welltower Pegasus Tenant, LLC
Welltower Pegasus TRS LLC
Welltower Portfolio Tenant LLC
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Wisconsin
Delaware
Delaware
Wisconsin
Wisconsin
Delaware
Minnesota
Delaware
Ontario
Ontario
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
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Welltower PropCo Group Borrower LLC
Welltower PropCo Group LLC
Welltower Redding Tenant LLC
Welltower REIT Holdings LLC
Welltower TCG NNN Landlord, LLC
Welltower TCG RIDelawareA Landlord, LLC
Welltower TCG RIDelawareA 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
Welltower Victory III OpCo LLC
Welltower Victory III Tenant LP
Welltower Victory III TRS LLC
Westford Littleton Road I LLC
White Plains Associates LLC
Williamstown Kentucky Propco LLC
Willow Tower Investments GP Limited
Willow Tower Investments GP LLP
Willow Tower Investments LP
Willow Tower Nominee 1 Limited
Willow Tower Nominee 2 Limited
Willow Tower Opco 1 Limited
Wimbledon Opco Limited
Windrose 310 Properties, L.L.C.
Windrose Congress I Properties, L.P.
Windrose Mount Vernon Properties, L.L.C.
Windrose Palm Court 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.
Woodmere Park Owner LLC
WR Brentwood Propco Limited
WR Coombe Propco Limited
WR Epsom Propco Limited
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
United Kingdom
Jersey
Jersey
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Tennessee
Delaware
Virginia
Virginia
Georgia
Delaware
Delaware
Florida
Delaware
Delaware
Delaware
Delaware
Delaware
Virginia
Virginia
Delaware
Virginia
Virginia
Delaware
Delaware
Delaware
Jersey
Jersey
Jersey
WR GP Limited
WR Hindhead Propco Limited
WR Holdco Limited
WR Investment Partners Limited
WR Limited Partnership
WR Midco Limited
WR Operations 1 Limited
WR Operations 2 Limited
WR Operations 3 Limited
WR Operations 4 Limited
WR Operations 5 Limited
WR Operations 6 Limited
WR Operations 7 Limited
WR Signature DP2 Limited
WR Signature Operations Limited
WT 9 Pack Property Owner LLC
WT Hampshire Property Owner LLC
WT Lessee LLC
WT Lessor LLC
WT Propco Member Holdco, Inc.
WT Stony Hill Tenant LLC
WT Tenant Opco LLC
WT UK OpCo 1 Limited
WT UK OpCo 2 Limited
WT UK OpCo 3 Limited
WT UK Opco 4 Limited
Jersey
Jersey
Jersey
Jersey
Jersey
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Jersey
United Kingdom
Delaware
Delaware
Delaware
Delaware
California
Delaware
Delaware
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-8 No. 333-225006) dated May 17, 2018 pertaining to the Welltower Inc. Employee Stock Purchase Plan
• Registration Statement (Form S-3 No. 333-225004) dated May 4, 2021 pertaining to an indeterminate amount of debt securities, common stock, preferred stock,
depositary shares, warrants and units of Welltower Inc.; and
• Registration Statement (Form S-3 No. 333-225005) dated May 4, 2021 pertaining to the Welltower Inc. Sixth Amended and Restated Dividend Reinvestment and Stock
Purchase Plan.
of our reports dated February 16, 2022, 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, 2021.
/s/ ERNST & YOUNG LLP
Toledo, Ohio
February 16, 2022
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, 2021 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 16th day of February 2022.
/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/ Dennis G. Lopez
Dennis G. Lopez, Director
/s/ Ade J. Patton
Ade J. Patton, 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.
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 16, 2022
/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 16, 2022
/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, 2021 (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 16, 2022
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, 2021 (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 16, 2022
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.