What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-19 compared with 2024-02-16 · 28 added, 30 removed, 168 unchanged (26% of the section changed)

The Company is a self-managed and self-administered 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.

Healthcare Realty Trust Incorporated is a self-managed and self-administered 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.

The Company operates so as to qualify as a REIT for federal income tax purposes.

2 unchanged sentences

Risk Factors” for a discussion of risks associated with qualifying as a REIT.

As described in the Explanatory Note above and elsewhere in this report, on July 20, 2022, Legacy HR and Legacy HTA completed a merger between the companies in which Legacy HR merged with and into a wholly-owned subsidiary of Legacy HTA, with Legacy HR continuing as the surviving entity and a wholly-owned subsidiary of Legacy HTA.

Immediately following the Merger, Legacy HTA changed its name to “Healthcare Realty Trust Incorporated.” For accounting purposes, the Merger was treated as a “reverse acquisition” in which Legacy HR was considered the acquirer.

The consolidated company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $0.01 par value per share, trade under the ticker symbol “HR”.

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”).

The combined company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $0.01 par value per share, trade on the New York Stock Exchange under the ticker symbol “HR”.

For purposes of this Annual Report on Form 10-K, references to “Healthcare Realty Trust”, the “Company”, “we”, “us”, and “our” are to Legacy HTA after giving effect to the Merger and, unless the context requires otherwise, to its consolidated subsidiaries, including the OP.

Additionally, any references to the “Company” for periods prior to the Merger are to Legacy HR.

Real Estate Properties

5 unchanged sentences

December 31, 2024

Dollars and square feet in thousands GROSS INVESTMENT SQUARE FEET NUMBER OF PROPERTIES OCCUPANCY 1

Dollars and square feet in thousands INVESTMENT SQUARE FEET NUMBER OF PROPERTIES OCCUPANCY 1

Medical office/outpatient 2

15 unchanged sentences

1 The occupancy column represents the percentage of total rentable square feet leased (including month-to-month and holdover leases).

There was one property excluded from the table above that was classified as held for sale as of December 31, 2023.

2 Includes one real estate property held in a consolidated joint venture.

There were three properties excluded from the table above that were classified as held for sale as of December 31, 2024.

2 Includes two real estate properties held in consolidated joint ventures.

3 Investments in financing receivables, net includes an investment of $116.3 million in a single-tenant net lease property in San Diego, CA related to a sale-leaseback transaction.

1 unchanged sentence

The remaining $7.4 million was accounted for as a financing arrangement and is included in investments in financing receivables, net.

5 Gross investment includes the Company's pro rata share of unconsolidated joint ventures, net of mortgage notes payable.

5 Represents the Company's equity investment in unconsolidated joint ventures.

Square feet have not been adjusted by the Company's ownership percentage.

23 unchanged sentences

The Company believes that its liquidity and sources of capital are adequate to satisfy its cash requirements.

The Company expects to meet its liquidity needs through cash on hand, cash flows from operations, property dispositions, equity and debt issuances in the public or private markets and borrowings under commercial credit facilities.

The Company expects to meet its liquidity needs through cash on hand, cash flows from operations, asset sales and joint venture contributions, equity and debt issuances in the public or private markets and borrowings under commercial credit facilities.

Business Strategy

4 unchanged sentences

2024 Investment Activity

In 2023, the Company acquired two medical office buildings.

The total purchase price of the acquisitions was $43.0 million and the weighted average capitalization rate for these investments was 6.5%.

The Company disposed of 39 properties in 2023 for sales prices totaling $787.0 million, including a regional corporate office and one property contributed into a joint venture in which the Company maintains a non-controlling interest.

These transactions yielded net cash proceeds of $687.6 million, net of $36.9 million of closing costs and related adjustments, $58.7 million in Company financed notes and $3.8 million of retained joint venture interests.

weighted average capitalization rate for these sales was 6.5%.

In 2024, the Company completed no property acquisitions.

In 2024, the Company's investment in unconsolidated joint ventures increased by $172.7 million, as a result of the Company's contribution of medical outpatient properties to two joint ventures in which it holds a 20% interest.

The Company disposed of 67 properties in 2024 for sales prices totaling $1.5 billion, including 30 properties contributed into two unconsolidated joint ventures in which the Company maintains a non-controlling interest.

These transactions yielded net cash proceeds of $1.2 billion, net of $67.3 million of closing costs and related adjustments and $172.7 million of retained joint venture interests.

The weighted average capitalization rate for these sales was 6.6%.

The Company calculates the capitalization rate for dispositions as the in-place cash net operating income divided by the sales price.

In 2024, the Company funded $150.6 million toward development and redevelopment of properties.

See the Company's discussion regarding the 2023 acquisition, joint venture and disposition activity in Note 5 to the Consolidated Financial Statements and development activity in Note 15 to the Consolidated Financial Statements.

See the Company's discussion regarding the 2024 joint venture and disposition activity in Note 5 to the Consolidated Financial Statements and development activity in Note 15 to the Consolidated Financial Statements.

Also, please refer to the Company's discussion in "Trends and Matters Impacting Operating Results" as part of Item 7.

8 unchanged sentences

The facilities owned by the Company are utilized by medical tenants which are required to comply with extensive regulation and legislation at the federal, state and local levels, including, but not limited to, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the "Affordable Care Act"), the Bipartisan Budget Act of 2015, the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), and laws intended to combat fraud, waste and abuse such as the Anti-Kickback Statute, Stark Law and False Claims Act, and laws intended to protect the privacy and security of patient information, such as the Health Insurance Portability and Accountability Act of 1996.

These laws and regulations establish, among other things, requirements for state licensure and criteria for medical tenants to participate in government-sponsored reimbursement programs, including the Medicare and Medicaid programs.

Medical tenants are subject to state and federal laws and regulations that establish, among other things, requirements for participation in government-sponsored reimbursement programs, including the Medicare and Medicaid programs.

The Company's leases generally require the tenant to comply with all applicable laws relating to the tenant's use and occupation of the leased premises.

8 unchanged sentences

However, the Company has not seen a material impact from site-neutral Medicare payment policy, positively or negatively.

The Company cannot predict the amount of benefit from these measures or if other federal health policy will ultimately require cuts to reimbursement rates for services provided in other settings.

The Company cannot predict the amount of benefit or loss from these measures or if other federal health policy will ultimately require cuts to reimbursement rates for services provided in other settings.

The Company cannot predict the degree to which these changes, or changes to federal healthcare programs in general, may affect the economic performance of some or all of the Company's tenants, positively or negatively.

Since 2018, physicians have been required to report patient data on quality and performance measures that began to affect their Medicare payments in 2020.

Implementation of MACRA, and the ongoing debate over the most effective payment system to use to promote value-based reimbursement, along with its budget-neutrality rule that requires

any increases in payments to be offset by decreases, present the industry and its individual participants with uncertainty and financial risk.

Implementation of MACRA, and the ongoing debate over the most effective payment system to use to promote value-based reimbursement, along with its budget-neutrality rule that requires any increases in payments to be offset by decreases, present the industry and its individual participants with uncertainty and financial risk.

The Company cannot predict the degree to which any such changes may affect the economic performance of the Company's tenants or, indirectly, the Company.

7 unchanged sentences

Each year, legislative proposals for health policy are introduced in Congress and state legislatures, and regulatory changes are proposed and enacted by government agencies.

These proposals, individually or in the aggregate, could significantly change the delivery of healthcare services, either nationally or at the state level, if implemented.

These proposals, individually or in the aggregate, could significantly change the delivery of healthcare services and limit the ability of the Company and other REITs to own and lease certain healthcare facilities, either nationally or at the state level, if implemented.

Examples of significant legislation or regulatory action recently proposed, enacted, or in the process of implementation include:

• the expansion of Medicaid benefits and health insurance exchanges established by the Affordable Care Act, whereby individuals and small businesses purchase health insurance with assistance from federal subsidies;

• federal legislative proposals that would prohibit payments from federal healthcare programs to healthcare providers that sell assets to REITs or use assets as collateral for loans from REITs;

• state legislation and legislative proposals that (i) prohibit licensure of certain healthcare facilities leased from REITs, (ii) require additional government oversight and approval of healthcare provider transactions involving a change in control or sales of assets, including real estate, and (iii) impose public reporting requirements on ownership and control of healthcare provider entities;

• the expansion or reduction of, or the decision in some states not to expand, Medicaid benefits and health insurance exchange subsidies established by the Affordable Care Act, whereby individuals and small businesses purchase health insurance with assistance from federal subsidies;

• various state legislature proposals for state-funded single-payer health insurance and a limit on allowable rates of reimbursement to healthcare providers;

5 unchanged sentences

• reforms to the physician self-referral laws, commonly referred to as the Stark Law, as adjusted in 2020 in order to promote the transition toward value-based, coordinated care among providers, although clear intent to boost referrals could still yield provider penalties;

• consideration of broad reforms to Medicare and Medicaid, including a significant expansion of Medicare coverage to the greater U.S.

• consideration of broad reforms to Medicare and Medicaid impacting eligibility and reimbursement;

• more stringent regulatory criteria by which federal antitrust agencies evaluate the potential for anti-competitive practices as a result of mergers and acquisitions of health systems and physicians;

• state and federal regulations requiring increased scrutiny of healthcare-related transactions, particularly those involving REITs and private equity firms;

• regulations requiring the publication of hospital prices for certain services, as well as hospitals’ negotiated rates with insurers for these services;

2 unchanged sentences

The Company cannot predict whether any proposals, rulings, or legislation will be fully implemented, adopted, repealed, or amended, or what effect, whether positive or negative, such developments might have on the Company's business.

Such proposals, rulings, or legislation could have a material adverse effect on the Company's business and results of operations.

Environmental Matters

28 unchanged sentences

To retain talented employees who contribute to the Company’s strategic objectives, we offer an attractive set of employee benefits, including:

• Health benefits and 401(k) starting on the first day of employment;

• Health benefits and 401(k) eligibility starting on the first day of employment;

• Dollar-for-dollar match on 401(k) contributions up to $2,800, encouraging higher employee savings;

1 unchanged sentence

• Tuition reimbursement up to $3,000 annually for any employee pursuing higher education.

In addition, we are committed to supporting the performance and career development of all employees, from encouraging staff accountants to sit for the CPA exam to supporting our maintenance engineers in earning various certifications.

As owners and operators of medical real estate, we recognize the value of health and wellbeing among our own employees.

As we have for many years, Healthcare Realty provides corporate employees with gym membership discounts to encourage fitness.

In addition, we offer monthly wellness challenges and resources that provide our employees with tools to enhance their wellbeing.

Additional information regarding employee and community engagement is available in the 2024 Corporate Responsibility Report, which is posted on the Company's website ( www.healthcarerealty.com ).

11 unchanged sentences

In addition, the Company's incentive program for named executive officers includes ESG performance measures.

The Company's unsecured credit facility (described in more detail herein) contains a sustainability-linked provision that can reduce borrowing costs if the Company meets certain metrics relating to green building certifications.

Company met the metrics in 2023 and, as a result, will save one basis point on the cost of its borrowings under the unsecured credit facility in 2024.

To more effectively track and communicate the Company’s ESG performance, we have adopted various frameworks and methodologies, including participation in the annual GRESB Assessment;

3 unchanged sentences

Available Information

The Company makes available to the public free of charge through its website the Company’s Proxy Statement, Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after the Company electronically files such reports with, or furnishes such reports to, the SEC.

The Company’s website address is www.healthcarerealty.com .

8 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-K

Item 1. Business