What changed in this filing

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Item 1. Financial Statements

2024-10-30 compared with 2024-08-02 · 188 added, 141 removed, 646 unchanged (34% of the section changed)

3 unchanged sentences

Amounts in thousands, except per share data

JUNE 30, 2024

SEPTEMBER 30, 2024

DECEMBER 31, 2023

34 unchanged sentences

1,000,000 shares authorized;

364,327 and 380,964 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

355,834 and 380,964 shares issued and outstanding at September 30, 2024, and December 31, 2023, respectively

Additional paid-in capital 9,198,004 9,602,592

Accumulated other comprehensive income (loss) 6,986 ( 10,741 )

Accumulated other comprehensive loss ( 16,963 ) ( 10,741 )

Cumulative net income attributable to common stockholders 481,155 1,028,794

7 unchanged sentences

Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Amounts in thousands, except per share data

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

2024 2023 2024 2023

12 unchanged sentences

Interest expense ( 60,649 ) ( 66,304 ) ( 184,159 ) ( 195,397 )

Gain on extinguishment of debt — 62 — 62

Impairment of real estate properties and credit loss reserves ( 84,394 ) ( 56,873 ) ( 232,450 ) ( 143,510 )

Impairment of goodwill — — ( 250,530 ) —

Equity loss from unconsolidated joint ventures ( 146 ) ( 17 ) ( 568 ) ( 797 )

Equity income (loss) from unconsolidated joint ventures 208 ( 456 ) ( 360 ) ( 1,253 )

Interest and other (expense) income, net ( 132 ) 139 ( 104 ) 1,278

10 unchanged sentences

Condensed Consolidated Statements of Comprehensive Loss

For the Three and Six Months Ended June 30, 2024 and 2023

For the Three and Nine Months Ended September 30, 2024 and 2023

Amounts in thousands

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

2024 2023 2024 2023

Net loss $ ( 94,535 ) $ ( 68,604 ) $ ( 555,692 ) $ ( 240,408 )

Other comprehensive income

Other comprehensive income (loss)

Interest rate derivatives

Reclassification adjustments for gains included in interest expense ( 3,641 ) ( 4,168 ) ( 11,169 ) ( 9,874 )

Gains arising during the period on interest rate swaps 5,891 21,523 25,501 12,981

(Losses) gains arising during the period on interest rate swaps ( 20,662 ) 12,016 4,839 24,999

( 24,303 ) 7,848 ( 6,330 ) 15,125

5 unchanged sentences

Condensed Consolidated Statements of Equity and Redeemable Non-Controlling Interests

For the Three Months Ended June 30, 2024 and 2023

For the Three Months Ended September 30, 2024 and 2023

Amounts in thousands, except per share data

8 unchanged sentences

Equity Redeemable Non-controlling Interests

Balance at March 31, 2024 $ 3,815 $ 9,609,530 $ 4,791 $ 717,958 $ ( 3,920,199 ) $ 6,415,895 $ 87,243 $ 6,503,138 $ 3,880

Common stock redemptions — ( 3 ) — — — ( 3 ) — ( 3 ) —

Balance at June 30, 2024 $ 3,643 $ 9,340,028 $ 6,986 $ 574,178 $ ( 4,037,693 ) $ 5,887,142 $ 83,675 $ 5,970,817 $ 3,875

Share-based compensation — 7,908 — — — 7,908 — 7,908 —

Common stock repurchases ( 85 ) ( 149,932 ) — — — ( 150,017 ) — ( 150,017 ) —

Redemption of non-controlling interest — — — — — — ( 625 ) ( 625 ) —

Net loss — — — ( 93,023 ) — ( 93,023 ) ( 1,512 ) ( 94,535 ) —

1 unchanged sentence

— — ( 3,588 ) — — ( 3,588 ) ( 53 ) ( 3,641 ) —

Gains arising during the period on interest rate swaps

Losses arising during the period on interest rate swaps

— — ( 20,361 ) — — ( 20,361 ) ( 301 ) ( 20,662 ) —

Adjustments to redemption value of redeemable non-controlling interests — — — — — — — — ( 5 )

Dividends to common stockholders and distributions to non-controlling interest holders ($ 0.31 per share)

— — — — ( 112,635 ) ( 112,635 ) ( 1,138 ) ( 113,773 ) —

Balance at June 30, 2024 $ 3,643 $ 9,340,028 $ 6,986 $ 574,178 $ ( 4,037,693 ) $ 5,887,142 $ 83,675 $ 5,970,817 $ 3,875

Balance at September 30, 2024 $ 3,558 $ 9,198,004 $ ( 16,963 ) $ 481,155 $ ( 4,150,328 ) $ 5,515,426 $ 80,046 $ 5,595,472 $ 3,875

Stock Additional

7 unchanged sentences

Equity Redeemable Non-controlling Interests

Balance at March 31, 2023 $ 3,808 $ 9,591,194 $ ( 8,554 ) $ 1,219,930 $ ( 3,447,750 ) $ 7,358,628 $ 106,211 $ 7,464,839 $ 2,000

Balance at June 30, 2023 $ 3,808 $ 9,595,033 $ 9,328 $ 1,137,171 $ ( 3,565,941 ) $ 7,179,399 $ 104,018 $ 7,283,417 $ 2,487

Issuance of common stock, net of issuance costs — 33 — — — 33 — 33 —

7 unchanged sentences

Contributions from redeemable non-controlling interests — — — — — — — — 710

Adjustments to redemption value of redeemable non-controlling interests — — — — — — — — ( 2 )

Dividends to common stockholders and distributions to non-controlling interest holders ($ 0.31 per share)

— — — — ( 118,203 ) ( 118,203 ) ( 1,467 ) ( 119,670 ) —

Balance at June 30, 2023 $ 3,808 $ 9,595,033 $ 9,328 $ 1,137,171 $ ( 3,565,941 ) $ 7,179,399 $ 104,018 $ 7,283,417 $ 2,487

Balance at September 30, 2023 $ 3,809 $ 9,597,629 $ 17,079 $ 1,069,327 $ ( 3,684,144 ) $ 7,003,700 $ 101,888 $ 7,105,588 $ 3,195

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, are an integral part of these financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Equity and Redeemable Non-Controlling Interests

For the Six Months Ended June 30, 2024 and 2023

For the Nine Months Ended September 30, 2024 and 2023

Amounts in thousands, except per share data

14 unchanged sentences

Common stock repurchases ( 257 ) ( 422,813 ) — — — ( 423,070 ) — ( 423,070 ) —

Redemption of non-controlling interest — — — — — — ( 625 ) ( 625 ) —

Net loss — — — ( 547,639 ) — ( 547,639 ) ( 8,053 ) ( 555,692 ) —

7 unchanged sentences

— — — — ( 348,535 ) ( 348,535 ) ( 4,008 ) ( 352,543 ) —

Balance at June 30, 2024 $ 3,643 $ 9,340,028 $ 6,986 $ 574,178 $ ( 4,037,693 ) $ 5,887,142 $ 83,675 $ 5,970,817 $ 3,875

Balance at September 30, 2024 $ 3,558 $ 9,198,004 $ ( 16,963 ) $ 481,155 $ ( 4,150,328 ) $ 5,515,426 $ 80,046 $ 5,595,472 $ 3,875

Stock Additional

17 unchanged sentences

Contributions from redeemable non-controlling interests — — — — — — — — 1,210

Adjustments to redemption value of redeemable non-controlling interests — — — — — — — — ( 29 )

Dividends to common stockholders and distributions to non-controlling interest holders ( 0.93 per share)

— — — — ( 354,582 ) ( 354,582 ) ( 4,360 ) ( 358,942 ) —

Balance at June 30, 2023 $ 3,808 $ 9,595,033 $ 9,328 $ 1,137,171 $ ( 3,565,941 ) $ 7,179,399 $ 104,018 $ 7,283,417 $ 2,487

Balance at September 30, 2023 $ 3,809 $ 9,597,629 $ 17,079 $ 1,069,327 $ ( 3,684,144 ) $ 7,003,700 $ 101,888 $ 7,105,588 $ 3,195

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2024 and 2023

For the Nine Months Ended September 30, 2024 and 2023

Amounts in thousands

OPERATING ACTIVITIES

SIX MONTHS ENDED

NINE MONTHS ENDED

September 30,

Net loss $ ( 555,692 ) $ ( 240,408 )

6 unchanged sentences

Gain on sales of real estate properties and other assets ( 77,670 ) ( 56,974 )

Gain on extinguishment of debt — ( 62 )

Impairment of real estate properties and credit loss reserves 232,450 143,510

18 unchanged sentences

Proceeds from notes receivable repayments 861 —

Net cash provided by (used in) investing activities 151,388 ( 6,145 )

Net cash provided by investing activities 482,149 112,463

FINANCING ACTIVITIES

7 unchanged sentences

Distributions to non-controlling interest holders ( 3,612 ) ( 3,836 )

Redemption of non-controlling interest ( 625 ) —

Debt issuance and assumption costs ( 563 ) ( 529 )

3 unchanged sentences

Cash and cash equivalents at beginning of period 25,699 60,961

Cash and cash equivalents at end of period, including assets held for sale 26,159 24,668

Cash and cash equivalents held for sale ( 3,358 ) —

Cash and cash equivalents at end of period $ 22,801 $ 24,668

Supplemental Cash Flow Information SIX MONTHS ENDED

Supplemental Cash Flow Information NINE MONTHS ENDED

September 30,

Interest paid $ 177,507 $ 185,402

Mortgage note receivables taken in connection with sale of real estate $ — $ 45,000

Mortgage notes receivable taken in connection with sale of real estate $ — $ 45,000

Invoices accrued for construction, tenant improvements and other capitalized costs $ 49,886 $ 32,590

Mortgage note payable assumed in connection with acquisition of real estate, net $ — $ 5,284

Capitalized interest $ 3,211 $ 2,077

Proceeds from dispositions held in escrow $ 96,008 $ —

Contribution of real estate properties into unconsolidated joint venture $ 110,879 $ —

4 unchanged sentences

Healthcare Realty Trust Incorporated (the "Company") is a real estate investment trust ("REIT") that owns, leases, manages, acquires, finances, develops and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States.

As of June 30, 2024, the Company had gross investments of approximately $ 12.9 billion in 629 con solidated real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property, excluding held for sale assets.

In addition, as of June 30, 2024, the Company had a weighted average ownership interest of approxima tel y 36 % in 44 re al estate properties held in unconsolidated joint ventures.

As of September 30, 2024, the Company had gross investments of approximately $ 12.4 billion in 605 con solidated real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property, excluding held for sale assets.

In addition, as of September 30, 2024, the Company had a weighted average ownership interest of approxima tel y 33 % in 55 re al estate properties held in unconsolidated joint ventures.

See Note 2 below for more details regarding the Company's unconsolidated joint ventures.

The Company's re al estate properties are located in 35 states and total approxima tel y 37.2 million square feet.

The Company provided leasing and property management services to 92 % of its portfolio nationwide as of June 30, 2024.

The Company's consolidated re al estate properties are located in 34 states and total approximately 35.4 million square feet.

The Company provided leasing and property management services to 92 % of its portfolio nationwide as of September 30, 2024.

On July 20, 2022, pursuant to that certain Agreement and Plan of Merger dated as of February 28, 2022, by and among Healthcare Realty Trust Incorporated, a Maryland corporation (now known as HRTI, LLC, a Maryland limited liability company) (“Legacy HR”), Healthcare Trust of America, Inc., a Maryland corporation (now known as Healthcare Realty Trust Incorporated) (“Legacy HTA”), Healthcare Trust of America Holdings, LP, a Delaware limited partnership (now known as Healthcare Realty Holdings, L.P.) (the “OP”), and HR Acquisition 2, LLC, a Maryland limited liability company (“Merger Sub”), Merger Sub merged with and into Legacy HR, with Legacy HR continuing as the surviving entity and a wholly-owned subsidiary of Legacy HTA (the “Merger”).

1 unchanged sentence

The Company is structured as an umbrella partnership REIT under which substantially all of its business is conducted through the OP, the day-to-day management of which is exclusively controlled by the Company.

As of June 30, 2024, the Company owned 98.6 % of the issued and outstanding units of the OP, with other investors owning the remaining 1.4 % of the OP's issued and outstanding units.

As of September 30, 2024, the Company owned 98.5 % of the issued and outstanding units of the OP (“OP Units”), with other investors owning the remaining 1.5 % of the OP's issued and outstanding units.

Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to the Company's Condensed Consolidated Financial Statements, are outside the scope of our independent registered public accounting firm’s review.

10 unchanged sentences

Accounting Standards Codification (“ASC”) Topic 810, Consolidation broadly defines a VIE as an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support.

The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics:

(i) the power to direct the

The Company identifies the

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity.

primary beneficiary of a VIE as the enterprise that has both of the following characteristics:

(i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity.

The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary, with any minority interests reflected as non-controlling interests or redeemable non-controlling interests in the accompanying Condensed Consolidated Financial Statements.

5 unchanged sentences

The OP is 98.5 % owned by the Company.

Other holders of operating partnership units (“OP Units”) are considered to be non-controlling interest holders in the OP and their ownership interests are reflected as equity on the accompanying Condensed Consolidated Balance Sheets.

Other holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interests are reflected as equity in the accompanying Condensed Consolidated Balance Sheets.

Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages.

Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity.

As of June 30, 2024, there were approximately 5.3 million OP Units, or 1.4 % of OP Units issued and outstanding, held by non-controlling interest holders.

As of September 30, 2024, there were approximately 5.3 million OP Units, or 1.5 % of OP Units issued and outstanding, held by non-controlling interest holders.

Additionally, the Company is the primary beneficiary of this VIE.

Accordingly, the Company consolidates its interests in the OP.

As of June 30, 2024, the Company had four consolidated VIEs, in addition to the OP, consisting of joint venture investments in which the Company is the primary beneficiary of the VIE based on the combination of operational control and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures.

As of September 30, 2024, the Company had four consolidated VIEs (including one held for sale), in addition to the OP, consisting of joint venture investments in which the Company is the primary beneficiary of the VIE based on the combination of operational control and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures.

Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs, excluding the OP, in the aggregate:

(dollars in thousands) JUNE 30, 2024

(dollars in thousands) September 30, 2024

Total real estate properties, net

1 unchanged sentence

Other assets, net

Assets held for sale, net

Accrued expenses and other liabilities

Liabilities held for sale, net

Total liabilities

Redeemable non-controlling interests

Partners' equity

Cumulative net loss

Total partners' equity

Total liabilities and equity

As of June 30, 2024, the Company had three unconsolidated VIEs consisting of two notes receivables and one joint venture.

The Company does not have the power or economic interests to direct the activities of these VIEs on a

As of September 30, 2024, the Company had three unconsolidated VIEs consisting of two notes receivable and one joint venture.

The Company does not have the power or economic interests to direct the activities of these VIEs on a stand-alone basis, and therefore it was determined that the Company was not the primary beneficiary.

As a result, the Company accounts for the two notes receivable as amortized cost and a joint venture arrangement under the equity method.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

stand-alone basis, and therefore it was determined that the Company was not the primary beneficiary.

As a result, the Company accounts for the two notes receivables as amortized cost and a joint venture arrangement under the equity method.

See below for additional information regarding the Company's unconsolidated VIEs.

1 unchanged sentence

2021 Houston, TX 1

Note receivable $ 20,500 $ 20,500

Notes receivable $ 20,500 $ 20,500

2021 Charlotte, NC 1

Note receivable 7,111 7,211

Notes receivable 7,285 7,332

Joint venture 57,955 57,955

1 Assumed mortgage note receivable in connection with the Merger.

1 Assumed mortgage notes receivable in connection with the Merger.

2 Includes investments in seven properties.

As of June 30, 2024, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company exercised significant influence over but did not control these entities.

As of September 30, 2024, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company exercised significant influence over but did not control these entities.

See Note 2 below for more details regarding the Company's unconsolidated joint ventures.

7 unchanged sentences

Accordingly, the Company records the carrying amount at the greater of the initial carrying amount (increased or decreased for the non-controlling interest’s share of net income or loss and distributions) or the redemption value.

We measure the redemption value and record an adjustment to the carrying value of the equity securities as a component of redeemable non-controlling interest.

As of June 30, 2024, the Company had redeemable non-controlling interests of $ 3.9 million.

The Company measures the redemption value and records an adjustment to the carrying value of the equity securities as a component of redeemable non-controlling interest.

As of September 30, 2024, the Company had redeemable non-controlling interests of $ 3.9 million.

Asset Impairment

5 unchanged sentences

or significant negative economic trends or negative industry trends for the Company or its tenants.

During the three and six months ended June 30, 2024, the Company recognized real estate impairments totaling $ 120.9 million and $ 136.9 million, respectively, as a result of completed and planned disposition activity.

As of June 30, 2024, 16 real estate properties totaling $ 265.6 million were measured at fair value using level 3 fair value hierarchy.

During the three and nine months ended September 30, 2024, the Company recognized real estate impairments totaling $ 37.6 million and $ 174.5 million, respectively, as a result of completed and planned disposition activity.

As of September 30, 2024, 11 real estate properties totaling $ 52.6 million were measured at fair value using level 3 fair value hierarchy.

The level 3 fair value techniques included brokerage estimates, letters of intent, and unexecuted purchase and sale agreements, less estimated closing costs.

2 unchanged sentences

As a result, a goodwill evaluation was performed.

The Company's current operations are carried out through a single reporting unit with a carrying value of approximately $ 12.0 billion.

As of the measurement date, the Company's current operations are carried out through a single reporting unit that had a carrying value of approximately $ 12.0 billion.

The Company determined that the carrying value exceeded estimated fair value and therefore an impairment of goodwill was recorded.

6 unchanged sentences

See below for additional information regarding the Company's financing receivables.

(dollars in thousands) ORIGINATION DATE LOCATION INTEREST RATE CARRYING VALUE as of JUNE 30, 2024

(dollars in thousands) ORIGINATION DATE LOCATION INTEREST RATE CARRYING VALUE as of SEPTEMBER 30, 2024

May 2021 Poway, CA 5.71 % $ 115,683

3 unchanged sentences

Real estate notes receivable are intended to be held to maturity and are recorded at amortized cost, net of unamortized loan origination costs and fees and allowance for credit losses.

As of June 30, 2024, real estate notes receivable, net, which are included in Other assets on the Company's Condensed Consolidated Balance Sheets, totaled $ 168.8 million.

As of September 30, 2024, real estate notes receivable, net, which are included in Other assets on the Company's Condensed Consolidated Balance Sheets, totaled $ 121.7 million.

(dollars in thousands) ORIGINATION MATURITY STATED INTEREST RATE MAXIMUM LOAN COMMITMENT OUTSTANDING as of

JUN 30, 2024 INTEREST RECEIVABLE (OTHER ASSETS) ALLOWANCE FOR CREDIT LOSSES FAIR VALUE DISCOUNT AND FEES CARRYING VALUE as of JUNE 30, 2024

SEPTEMBER 30, 2024 INTEREST RECEIVABLE (OTHER ASSETS) ALLOWANCE FOR CREDIT LOSSES FAIR VALUE DISCOUNT AND FEES CARRYING VALUE as of SEPTEMBER 30, 2024

Mezzanine loans

6/24/2021 6/24/2024 8.00 % $ 54,119 $ 54,119 $ 906 $ ( 5,196 ) $ ( 3,067 ) $ 46,762

Texas 6/24/2021 6/24/2024 8.00 % $ 54,119 $ 54,119 $ 906 $ ( 51,958 ) $ ( 3,067 ) $ —

Arizona 12/21/2023 12/20/2026 9.00 % 6,000 6,000 36 — — 6,036

9 unchanged sentences

$ 214,969 $ 184,829 $ 3,181 $ ( 63,159 ) $ ( 3,143 ) $ 121,708

1 As of the date of these financial statements, the outstanding principal and interest on these loans had not been repaid, and on July 15, 2024, the senior lender on the construction loans associated with the underlying projects provided notice of foreclosure proceedings to the borrower.

The borrower is in negotiations with a third party to provide financing that will repay the senior lender.

1 During the second quarter of 2024, the Company determined that an allowance for credit loss of $ 11.2 million was needed on this mortgage loan.

7 unchanged sentences

The Company’s evaluation considers industry and economic conditions, credit enhancements, liquidity, and other factors.

The determination of the credit allowance is based on a quarterly

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments.

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.

The Company evaluates the collectability of loan receivables 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 the Company will be unable to collect all amounts due as scheduled according to the contractual terms of the loan agreement.

A loan is considered to have deteriorated credit quality when, based on current information and events, it is probable that the Company will be

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

unable to collect all amounts due as scheduled according to the contractual terms of the loan agreement.

For those loans identified as having deteriorated credit quality, the amount of credit loss is determined on an individual basis.

3 unchanged sentences

While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance.

During the first quarter of 2023, the Company determined that the risk of credit loss on two of its mezzanine loans were no longer remote and recorded a credit loss reserve of $ 5.2 million.

During the three and six months ended June 30, 2024, the Company determined that the risk of credit loss on one of its mortgage note receivables was no longer remote and recorded a credit loss reserve of $ 11.2 million.

The Company utilized the level 3 fair value hierarchy, which included a brokerage estimate on the underlying collateral of the loan, to determine the amount of credit loss reserve.

During the first quarter of 2023, the Company determined that the risk of credit loss on two of its mezzanine loans was no longer remote and recorded a credit loss reserve of $ 5.2 million.

During the nine months ended September 30, 2024, the Company determined that an additional allowance of $ 46.8 million was needed on these two mezzanine loans.

Additionally, during the nine months ended September 30, 2024 the Company determined the risk of credit loss on one of its mortgage notes receivable was no longer remote and recorded a credit loss reserve of $ 11.2 million, for a total of $ 58.0 million in total credit loss reserves year-to-date.

The Company utilized the level 3 fair value hierarchy, which included a brokerage estimate on the underlying collateral of the mortgage loan, to determine the amount of credit loss reserve.

The following table summarizes the Company's allowance for credit losses on real estate notes receivable:

Dollars in thousands SIX MONTHS ENDED JUNE 30, 2024 TWELVE MONTHS ENDED DECEMBER 31, 2023

Dollars in thousands NINE MONTHS ENDED SEPTEMBER 30, 2024 TWELVE MONTHS ENDED DECEMBER 31, 2023

Allowance for credit losses, beginning of period $ 5,196 $ —

3 unchanged sentences

Income from Lease Financing Receivables

The Company recognized the related income from two financing receivables totaling $ 2.1 million and $ 4.2 million, respectively, for the three and six months ended June 30, 2024, and $ 2.1 million and $ 4.2 million, respectively, for the three and six months ended June 30, 2023, based on an imputed interest rate over the terms of the applicable lease.

The Company recognized the related income from two financing receivables totaling $ 2.1 million and $ 6.3 million, respectively, for the three and nine months ended September 30, 2024, and $ 2.0 million and $ 6.2 million, respectively, for the three and nine months ended September 30, 2023, based on an imputed interest rate over the terms of the applicable lease.

As a result, the interest recognized from the financing receivable in any particular period will not equal the cash payments from the lease agreement in that period.

3 unchanged sentences

Income from Real Estate Notes Receivable

The Company recognized interest income related to real estate notes receivable of $ 1.8 million and $ 4.2 million, respectively, for the three and six months ended June 30, 2024, and $ 2.2 million and $ 4.3 million, respectively, for the three and six months ended June 30, 2023.

The Company recognized interest income related to real estate notes receivable of $ 1.8 million and $ 6.0 million, respectively, for the three and nine months ended September 30, 2024, and $ 2.3 million and $ 6.5 million, respectively, for the three and nine months ended September 30, 2023.

The Company recognizes interest income on an accrual basis unless the Company has determined that collectability of contractual amounts is not reasonably assured, at which point the note is placed on non-accrual status and interest income is recognized on a cash basis.

In 2023, the Company placed two of its real estate notes receivable with principal balances, net of credit loss, of $ 48.9 million on non-accrual status and accordingly did not recognize any interest income for the three and six month periods ended June 30, 2024.

In 2024, the Company placed one of its real estate notes receivable with a principal balance, net of credit loss, of $ 20.5 million on non-accrual status.

In 2023, the Company placed two of its real estate notes receivable on non-accrual status and accordingly did not recognize any interest income for the three and nine month periods ended September 30, 2024.

In the second quarter of 2024, the Company placed one of its real estate notes receivable with a principal balance, net of credit loss, of $ 20.5 million on non-accrual status.

Revenue from Contracts with Customers (ASC Topic 606)

8 unchanged sentences

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

in thousands 2024 2023 2024 2023

17 unchanged sentences

2024 Acquisition Activity

The Company had no real estate acquisition activity for the six months ended June 30, 2024.

The Company had no real estate acquisition activity for the nine months ended September 30, 2024.

Unconsolidated Joint Ventures

The Company's investment in and loss recognized for the three and six months ended June 30, 2024 and 2023 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below:

The Company's investment in and income (losses) recognized for the three and nine months ended September 30, 2024 and 2023 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below:

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

Dollars in thousands 2024 2023 2024 2023

2 unchanged sentences

44,332 — 110,879 3,824

Equity loss recognized during the period ( 146 ) ( 17 ) ( 568 ) ( 797 )

Equity income (loss) recognized during the period 208 ( 456 ) ( 360 ) ( 1,253 )

Owner distributions ( 2,297 ) ( 1,336 ) ( 4,946 ) ( 4,366 )

Investments in unconsolidated joint ventures, end of period $ 417,084 $ 325,453 $ 417,084 $ 325,453

1 In the second quarter of 2024, the Company contributed 11 properties into a new joint venture in which it retained a 20 % ownership interest.

1 In the third quarter of 2024, the Company contributed seven properties into a new joint venture in which it retained a 20 % ownership interest.

The Company also contributed four properties into a joint venture entered into in the second quarter of 2024, for a total of 15 properties, in which it

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

retained a 20 % ownership interest.

See 2024 "Real Estate Asset Dispositions" below for additional information.

In 2023, there was an additional investment in an existing joint venture in which the Company retained a 40 % ownership interest.

The investment consisted of the Company's contribution of a property in Dallas, Texas to the joint venture.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The investment consisted of the Company's contribution of a property in Dallas, TX to the joint venture.

2024 Real Estate Asset Dispositions

The following table details the Company's dispositions and joint venture contributions for the six months ended June 30, 2024.

The following table details the Company's dispositions and joint venture contributions for the nine months ended September 30, 2024.

Dollars in thousands DATE DISPOSED SALE PRICE CLOSING ADJUSTMENTS NET PROCEEDS NET REAL ESTATE INVESTMENT OTHER (INCLUDING RECEIVABLES) GAIN/(IMPAIRMENT) SQUARE FOOTAGE

8 unchanged sentences

6/28/24 99,518 ( 2,835 ) 96,683 86,810 906 8,967 309,424

Albany, NY 8/2/24 6,300 ( 847 ) 5,453 5,528 486 ( 561 ) 180,000

Charlotte, NC 8/6/24 26,670 ( 395 ) 26,275 14,853 613 10,809 90,633

Charleston, SC 8/13/24 14,500 ( 589 ) 13,911 11,488 1 2,422 46,711

8/23/24 118,000 ( 8,615 ) 109,385 113,956 548 ( 5,119 ) 266,782

8/27/24 177,250 ( 7,085 ) 170,165 169,545 5,363 ( 4,743 ) 473,003

Austin, TX 9/13/24 42,281 ( 1,257 ) 41,024 14,561 425 26,038 76,246

Raleigh, NC 9/26/24 1,813 ( 27 ) 1,786 1,694 50 42 5,934

Total dispositions $ 851,680 $ ( 38,464 ) $ 813,216 $ 725,795 $ 34,523 $ 52,898 2,298,727

1 The Company contributed the following medical outpatient properties to a joint venture in which the Company retained 20 % ownership:

one in each of Raleigh, NC, New York, NY, Philadelphia, PA, Atlanta, GA and Austin, TX;

two medical outpatient properties in Los Angeles and four in Seattle, WA.

one in each of Raleigh, NC, New York, NY, Philadelphia, PA, Atlanta, GA, Austin, TX, Houston, TX, Miami, FL, and Denver, CO;

two medical outpatient properties in Los Angeles, CA and five in Seattle, WA.

Sale price and square footage reflect the total sale price paid by the joint venture and total square footage of the property.

1 unchanged sentence

2 The Company sold seven medical outpatient properties in Greensboro, NC and two medical outpatient properties in Raleigh, NC to a single buyer in a single transaction.

3 The amount in the net proceeds column for this portfolio disposition includes the receivable for the cash held in escrow that closed on June 28, 2024 and was received by the Company on July 1, 2024.

These proceeds were recorded as a receivable in other assets, net as of June 30, 2024.

3 The Company contributed the following medical outpatient properties to a joint venture in which the Company retained 20 % ownership:

two in each of Nashville, TN and Denver, CO;

one in each of Dallas, TX, San Antonio, TX and Atlanta, GA.

Sale price and square footage reflect the total sale price paid by the joint venture and total square footage of the property.

The net proceeds to the Company related to these dispositions totaled $ 148.9 million.

Subsequent to September 30, 2024, the Company disposed of the following properties, which were classified as held for sale as of September 30, 2024:

Dollars in thousands Date Disposed Sale Price Square Footage

Houston, TX 1

10/3/24 $ 12,000 140,012

Greensboro, NC 10/9/24 12,514 35,373

Des Moines, IA 10/15/24 31,750 95,486

Albany, NY 10/15/24 9,500 80,676

Salt Lake City, UT 2

10/24/24 30,712 112,192

Miami, FL 10/25/24 36,789 102,186

Miami, FL 10/25/24 17,767 60,761

Total $ 151,032 $ 626,686

The Company provided seller financing of approximately $ 9.6 million in connection with this sale.

The Company sold a medical outpatient property that was included in a consolidated joint venture in which the Company held a 63 % ownership interest.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Assets Held for Sale

The Company had three properties classified as assets held for sale as of June 30, 2024 and one property classified as assets held for sale as of December 31, 2023.

The table below reflects the assets and liabilities classified as held for sale as of June 30, 2024 and December 31, 2023:

Dollars in thousands June 30, 2024 December 31, 2023

The Company had 10 properties classified as assets held for sale as of September 30, 2024, and one property classified as assets held for sale as of December 31, 2023.

The table below reflects the assets and liabilities classified as held for sale as of September 30, 2024, and December 31, 2023:

Dollars in thousands September 30, 2024 December 31, 2023

Balance Sheet data:

2 unchanged sentences

Lease intangibles 16,716 1,017

Personal property 65 —

Land held for development 5,000 —

177,491 9,646

Accumulated depreciation ( 33,997 ) ( 913 )

Real estate assets held for sale, net 1

143,494 8,733

Cash and cash equivalents 3,358 —

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Liabilities of assets held for sale $ 7,919 $ 295

Non-controlling interest held for sale $ 11,147 $ —

1 Net real estate assets held for sale include the impact of $ 34.6 million of impairment charges for the nine months ended September 30, 2024.

Lessor Accounting

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Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property.

The Company’s single-tenant net leases generally require the lessee to pay

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.

The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.

The Company's leases typically have escalators that are either based on a stated percentage or an index such as the Consumer Price Index ("CPI").

In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment.

The Company adopted an accounting policy to combine lease and nonlease components.

In addition, most of the Company's leases include non-lease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment.

The Company adopted an accounting policy to combine lease and non-lease components.

Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments.

Variable payments are recognized in the period earned.

Lease income for the Company's operating leases recognized for the three and six months ended June 30, 2024 was $ 308.1 million and $ 626.2 million, respectively.

Lease income for the Company's operating leases recognized for the three and six months ended June 30, 2023 was $ 329.7 million and $ 653.8 million, respectively.

Future lease payments under the non-cancelable operating leases, excluding any reimbursements and one sale-type lease, as of June 30, 2024 were as follows:

Lease income for the Company's operating leases, recognized for the three and nine months ended September 30, 2024 was $ 306.5 million and $ 932.7 million, respectively.

Lease income for the Company's operating leases, recognized for the three and nine months ended September 30, 2023 was $ 333.3 million and $ 987.1 million, respectively.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Future lease payments under the non-cancelable operating leases, excluding any reimbursements and one sales-type lease, as of September 30, 2024, were as follows:

Dollars in thousands OPERATING

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Lessee Accounting

As of June 30, 2024, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases.

As of June 30, 2024, the Company had 221 properties totaling 16.5 million square feet that were held under ground leases.

The Company is obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases.

As of September 30, 2024, the Company had 217 properties totaling 16.3 million square feet that were held under ground leases.

Some of the Company's ground lease renewal terms are based on fixed rent renewal terms, and others have market rent renewal terms.

1 unchanged sentence

Any rental increases related to the Company’s ground leases are generally stated in the lease or based on CPI.

The Company had 73 prepaid ground leases as of June 30, 2024.

The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $ 0.5 million and $ 0.3 million of the Company's rental expense for the three months ended June 30, 2024 and 2023, respectively, and $ 0.9 million and $ 0.7 million for the six months ended June 30, 2024 and 2023, respectively.

The Company’s future lease payments (primarily for its 148 non-prepaid ground leases) as of June 30, 2024 were as follows:

The Company had 73 prepaid ground leases as of September 30, 2024.

The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $ 0.3 million and $ 0.3 million of the Company's rental expense for the three months ended September 30, 2024 and 2023, respectively, and $ 1.0 million and $ 1.0 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s future lease payments (primarily for its 144 non-prepaid ground leases) as of September 30, 2024, were as follows:

Dollars in thousands OPERATING FINANCING

9 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2024 and 2023:

The following table provides details of the Company's total lease expense for the three and nine months ended September 30, 2024 and 2023:

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

Dollars in thousands 2024 2023 2024 2023

16 unchanged sentences

Notes and Bonds Payable

The table below details the Company’s notes and bonds payable as of June 30, 2024 and December 31, 2023.

The table below details the Company’s notes and bonds payable as of September 30, 2024, and December 31, 2023.

MATURITY DATE BALANCE 1 AS OF

29 unchanged sentences

1 Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable.

2 As of June 30, 2024, the Company had $ 1.3 billion available to be drawn on its $ 1.5 billion Unsecured Credit Facility.

2 As of September 30, 2024, the Company had $ 1.3 billion available to be drawn on its $ 1.5 billion Unsecured Credit Facility.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

1 unchanged sentence

4 In June 2024, the Company repaid $ 100 million of the initial $ 350 million Unsecured Term Loan and exercised its second option to extend the maturity date for one year to July 2025 for a fee of approximately $ 0.3 million.

5 In September 2024, the Company repaid an additional $ 150 million of the $ 350 million Unsecured Term Loan.

In October 2024, the Company repaid the remaining $ 100 million outstanding on this loan.

Changes in Debt Structure

3 unchanged sentences

T he mortgage note encumbered a 40,324 squ are foot property in Georgia .

On September 1, 2024, the Company repaid in full at maturity a mortgage note payable bearing interest at a rate of 4.15 % per annum with an outstanding principal balance of $ 6.9 million.

T he mortgage note encumbered a 64,143 squ are foot property in Minnesota .

Derivative Financial Instruments

12 unchanged sentences

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

As of June 30, 2024, the Company had 15 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

As of September 30, 2024, the Company had 15 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

AMOUNT WEIGHTED

7 unchanged sentences

Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company's derivative financial instruments and their classification on the Condensed Consolidated Balance Sheet as of June 30, 2024.

BALANCE AT JUNE 30, 2024

The table below presents the fair value of the Company's derivative financial instruments and their classification on the Condensed Consolidated Balance Sheet as of September 30, 2024.

BALANCE AT SEPTEMBER 30, 2024

In thousands BALANCE SHEET LOCATION FAIR VALUE

4 unchanged sentences

Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss)

The table below presents the effect of cash flow hedge accounting on AOCI during the three and six months ended June 30, 2024 and 2023 related to the Company's outstanding interest rate swaps.

The table below presents the effect of cash flow hedge accounting on AOCI during the three and nine months ended September 30, 2024 and 2023 related to the Company's outstanding interest rate swaps.

(GAIN)/LOSS RECOGNIZED IN

AOCI ON DERIVATIVE

three months ended June 30, (GAIN)/LOSS RECLASSIFIED FROM

three months ended September 30, (GAIN)/LOSS RECLASSIFIED FROM

AOCI INTO INCOME

three months ended June 30,

three months ended September 30,

In thousands 2024 2023 2024 2023

5 unchanged sentences

AOCI ON DERIVATIVE

six months ended June 30, (GAIN)/LOSS RECLASSIFIED FROM

nine months ended September 30, (GAIN)/LOSS RECLASSIFIED FROM

AOCI INTO INCOME

six months ended June 30,

nine months ended September 30,

In thousands 2024 2023 2024 2023

3 unchanged sentences

$ ( 4,839 ) $ ( 24,999 ) Total interest expense $ ( 11,169 ) $ ( 9,874 )

The Company estimates that an additional $ 10.5 million related to active interest rate swaps will be reclassified from AOCI as a decrease to interest expense over the next 12 months, and that an additional $ 0.6 million related to settled interest rate swaps will be amortized from AOCI as an increase to interest expense over the next 12 months.

The Company estimates that an additional $ 1.5 million related to active interest rate swaps will be reclassified from AOCI as an increase to interest expense over the next 12 months, and that an additional $ 0.5 million related to settled interest rate swaps will be amortized from AOCI as an increase to interest expense over the next 12 months.

Credit-risk-related Contingent Features

The Company's agreements with each of its derivative counterparties contain a cross-default provision under which the Company could be declared in default of its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender should the Company default on the indebtedness.

As of June 30, 2024, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $ 0.3 million.

As of June 30, 2024, the Company had not posted any collateral related to these agreements and was not in breach of any agreement.

As of September 30, 2024, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $ 3.3 million.

As of September 30, 2024, the Company had not posted any collateral related to these agreements and was not in breach of any agreement.

Commitments and Contingencies

4 unchanged sentences

Development and Redevelopment Activity

For the six months ended June 30, 2024, the Company invested $ 35.6 million and $ 8.5 million toward active development and redevelopment of properties, respectively, and $ 22.3 million toward recently completed development and redevelopment projects.

For the nine months ended September 30, 2024, the Company invested $ 58.7 million and $ 17.7 million toward active development and redevelopment of properties, respectively, and $ 34.6 million toward recently completed development and redevelopment projects.

Stockholders' Equity

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the six months ended June 30, 2024 and the twelve months ended December 31, 2023:

SIX MONTHS ENDED JUNE 30, 2024 TWELVE MONTHS ENDED DECEMBER 31, 2023

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the nine months ended September 30, 2024 and the twelve months ended December 31, 2023:

NINE MONTHS ENDED SEPTEMBER 30, 2024 TWELVE MONTHS ENDED DECEMBER 31, 2023

Balance, beginning of period 380,964,433 380,589,894

5 unchanged sentences

Common Stock Dividends

During the six months ended June 30, 2024, the Company declared and paid common stock dividends totaling $ 0.62 per share.

On Jul y 30, 2024, the Company declared a quarterly common stock dividend in the amount of $ 0.31 per share payable on August 28, 2024 to stockholders of record on August 12, 2024.

During the nine months ended September 30, 2024, the Company declared and paid common stock dividends totaling $ 0.93 per share.

On October 29, 2024, the Company declared a quarterly common stock dividend in the amount of $ 0.31 per share payable on November 27, 2024, to stockholders of record on November 12, 2024.

Common Stock Repurchases

2 unchanged sentences

On April 30, 2024, the Company's Board of Directors authorized the repurchase of up to $ 500.0 million of outstanding shares of the Company's common stock, superseding the previous stock repurchase authorization.

The stock repurchase authorization expires on April 29, 2025, and the Company may suspend or terminate repurchases at any time without prior notice.

Under the Maryland General Corporation Law, outstanding shares of common stock acquired by a corporation become authorized but unissued shares, which may be re-issued.

In May and June 2024, the Company repurchased an aggregate of 14,275,473 shares of its common stock at a weighted average price of $ 16.18 for a total of $ 231.0 million under this authorization.

As of June 30, 2024, the Company was authorized to repurchase an additional $ 269.0 million of the Company's common stock.

Subsequent to June 30, 2024, the Company repurchased 1,296,985 shares of its common stock for a total of $ 21.8 million.

During the third quarter of 2024, the Company repurchased an aggregate of 8,492,851 shares of its common stock at a weighted average price of $ 17.64 for a total of $ 149.8 million under this authorization.

As of September 30, 2024, the Company was authorized to repurchase an additional $ 119.2 million of the Company's common stock.

Subsequent to September 30, 2024, the Company repurchased 1,380,000 shares of its common stock for a total of $ 24.2 million.

On October 29, 2024 , the Company's Board of Directors authorized the repurchase of up to $ 300.0 million of outstanding shares of the Company's common stock, superseding the previous stock repurchase authorization.

The stock repurchase authorization expires on October 28, 2025, and the Company may suspend or terminate repurchases at any time without prior notice.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Earnings Per Common Share

The Company uses the two-class method of computing net earnings per common shares.

The Company uses the two-class method of computing net earnings per common share.

The Company's non-vested share-based awards are considered participating securities pursuant to the two-class method.

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2024 and 2023.

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2024, and 2023.

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

Dollars in thousands, except per share data 2024 2023 2024 2023

13 unchanged sentences

Diluted earnings per common share - net loss $ ( 0.26 ) $ ( 0.18 ) $ ( 1.49 ) $ ( 0.63 )

The effect of OP Units redeemable for 3,657,682 shares and 3,669,454 shares for the three and six months ended June 30, 2024, respectively, were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during those periods.

The effect of OP Units redeemable for 3,649,637 shares and 3,662,800 shares for the three and nine months ended September 30, 2024, respectively, were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during those periods.

Stock Incentive Plan

2 unchanged sentences

Equity Incentive Plans

During the six months ended June 30, 2024, the Company made the following equity awards:

During the nine months ended September 30, 2024, the Company made the following equity awards:

• Restricted Stock

• During the first quarter of 2024, the Company granted non-vested stock awards to its named executive officers and other members of senior management with an aggregate grant date fair value of $ 5.6 million, which consisted of an aggregate of 361,712 non-vested shares with vesting periods ranging from three to eight years .

• During the second quarter of 2024, the Company granted to independent directors an aggregate of 58,910 shares of non-vested stock awards with a grant date fair value of $ 0.9 million, and an aggregate of 45,982 LTIP Series D units with a grant date fair value of $ 0.7 million.

The Company also granted non-vested stock awards to other members of senior management with an aggregate grant date fair value of $ 0.1 million, which consisted of an aggregate of 9,350 non-vested shares.

• During the second quarter of 2024, the Company granted to independent directors an aggregate of 58,910 shares of non-vested stock with a grant date fair value of $ 0.9 million, and an aggregate of 45,982 LTIP Series D units with a grant date fair value of $ 0.7 million.

The Company also granted non-vested stock to other members of senior management with an aggregate grant date fair value of $ 0.1 million, which consisted of an aggregate of 9,350 non-vested shares.

• Restricted Stock Units ("RSUs")

23 unchanged sentences

The Company records amortization expense based on the probability of achieving certain operating performance conditions, which is evaluated throughout the performance period.

The following table represents the summary of non-vested share-based awards under the Incentive Plan for the three and six months ended June 30, 2024 and 2023:

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

The following table represents the summary of non-vested share-based awards under the Incentive Plan for the three and nine months ended September 30, 2024 and 2023:

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

2024 2023 2024 2023

7 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The following table represents expected amortization of the Company's non-vested awards issued as of June 30, 2024:

The following table represents expected amortization of the Company's non-vested awards issued as of September 30, 2024:

Dollars in millions FUTURE AMORTIZATION

4 unchanged sentences

• Cash and cash equivalents - The carrying amount approximates fair value (level 1 inputs) due to the short-term maturity of these investments.

• Real estate notes receivabl e - Real estate notes receivable are recorded in other assets on the Company's Condensed Consolidated Balance Sheets.

• Real estate notes receivabl e - Real estate notes receivable is recorded in other assets on the Company's Condensed Consolidated Balance Sheets.

Fair value is estimated using cash flow analyses, based on current interest rates for similar types of arrangements using level 2 inputs in the hierarchy.

However, the fair value of one note receivable was determined utilizing the fair value of the receivables' collateral, as the receivables are collateral-dependent, and were classified as level 3 inputs in the hierarchy.

However, the fair value of three notes receivable were determined utilizing the fair value of the receivables' collateral, as the receivables are collateral-dependent, and were classified as level 3 inputs in the hierarchy.

• Borrowings under the Unsecured Credit Facility and the Term Loans Due 2024 and 2026 - The carrying amount approximates fair value because the borrowings are based on variable market interest rates.

3 unchanged sentences

See Note 5 for additional information.

The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable at June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable at September 30, 2024, and December 31, 2023:

September 30, 2024 December 31, 2023

Dollars in millions CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements