What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-19 compared with 2024-02-16 · 407 added, 417 removed, 1143 unchanged (42% of the section changed)

19 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter 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 matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Asset Impairment - Identification of Triggering Events for Real Estate Properties

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated 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 consolidated 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.

Asset Impairment – Plans to Sell a Real Estate Property Before its Useful Life Has Ended

The Company recorded total real estate investments, net, of approximately $9.3 billion as of December 31, 2024.

As described in Note 1 to the Company's consolidated financial statements, the Company assesses the potential for impairment of long-lived assets, including real estate properties, whenever events occur, or a change in circumstances indicates, that the carrying value might not be fully recoverable ("triggering events").

We identified management’s assessment of qualitative indicators of potential impairment for real estate properties as a critical audit matter.

Qualitative indicators of potential impairment may include significant changes in the Company’s use of properties or the strategy for its overall business, plans to sell a property before its depreciable life has ended, or negative economic or

industry trends for the Company or its tenants.

Auditing these elements involved especially challenging auditor judgment due to the nature and extent of audit effort required to address these matters.

Indicators of impairment may include, among others, plans to sell an asset before its useful life has ended.

We identified management’s assessment of plans to sell an asset before its useful life has ended as an indicator of potential impairment for real estate properties as a critical audit matter.

Assessing the likelihood of the sale of an asset before its useful life has ended requires a high degree of judgment.

Auditing management's judgment around these elements was especially challenging due to the nature and extent of audit effort required to address this matter.

The primary procedures we performed to address this critical audit matter included:

• Testing the design and operating effectiveness of controls over management’s identification of changes in circumstances that could indicate the carrying amounts of real estate properties may not be fully recoverable.

• Assessing the reasonableness of management’s key assumptions with respect to qualitative factors, including potential sales of properties based on offers received and changes in the use of the Company’s properties, used to determine whether triggering events had occurred.

• Examining internal documentation to assess whether additional triggering events were present.

• Testing the design and operating effectiveness of controls over management’s assessment of the likelihood of plans to sell an asset before its useful life has ended.

• Assessing the likelihood of plans to sell an asset before its useful life has ended using a combination of retrospective review, inquiry with management outside of the accounting department, and obtaining third party evidence.

Impairment of Goodwill

As described in Note 1 to the Company’s consolidated financial statements, the Company recorded a $250.5 million impairment of its goodwill in the Consolidated Statement of Operations for the year ended December 31, 2024.

The Company evaluates goodwill for impairment annually as of December 31 or whenever events or changes in circumstances indicate that an impairment may exist.

During 2024, the Company experienced a sustained decline in the price per share of its common stock, which was identified as an indicator of goodwill impairment.

As a result, the Company performed a quantitative assessment, and the fair value of the Company’s single reporting unit was estimated using a combination of discounted cash flow models and earnings multiples techniques.

The determination of fair value using the discounted cash flow model technique requires the use of estimates and assumptions, including revenue and expense growth rates, capitalization rate and discount rate.

The determination of fair value using the earnings multiples technique requires assumptions to be made in relation to maintainable earnings and market multiples.

We identified the evaluation of goodwill for impairment as a critical audit matter.

Significant judgments are required to be made by management to determine the fair value for the single reporting unit, especially the assumptions of the discount rate used in the discounted cash flow model and the market multiples used in the earnings multiples technique.

Auditing management’s assumptions used in the impairment assessment of goodwill involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address this matter and the extent of specialized skill or knowledge needed.

The primary procedures we performed to address this critical audit matter included:

• Testing the design and operating effectiveness of controls over management’s determination of the fair value of the single reporting unit, including controls over the discount rate and market multiples used in the goodwill impairment assessment.

• Utilizing professionals with specialized skills and knowledge to assist in assessing the reasonableness of the discount rate and market multiples used in the goodwill impairment assessment.

/s/ BDO USA, P.C.

42 unchanged sentences

Additional paid-in capital 9,118,229 9,602,592

Accumulated other comprehensive (loss) income ( 10,741 ) 2,140

Accumulated other comprehensive loss ( 1,168 ) ( 10,741 )

Cumulative net income attributable to common stockholders 374,309 1,028,794

16 unchanged sentences

General and administrative 83,121 58,405 52,734

Acquisition and pursuit costs 2,026 3,229 3,930

Transaction costs 3,122 2,026 3,229

Merger-related costs — ( 1,952 ) 103,380

2 unchanged sentences

Other income (expense)

Gain on sales of real estate properties 77,546 270,271 55,940

Gain on sales of real estate properties and other assets 109,753 77,546 270,271

Interest expense ( 242,425 ) ( 258,584 ) ( 146,691 )

Gain (loss) on extinguishment of debt 62 ( 2,401 ) —

(Loss) gain on extinguishment of debt ( 237 ) 62 ( 2,401 )

Impairment of real estate properties and credit loss reserves ( 313,547 ) ( 154,912 ) ( 54,427 )

Impairment of goodwill ( 250,530 ) — —

Equity loss from unconsolidated joint ventures ( 135 ) ( 1,682 ) ( 687 )

Interest and other income (expense), net 1,343 ( 1,546 ) ( 9 )

Interest and other (expense) income, net ( 260 ) 1,343 ( 1,546 )

( 697,381 ) ( 336,227 ) 64,519

20 unchanged sentences

Comprehensive loss attributable to non-controlling interests

9,337 3,966 168

Comprehensive (loss) income attributable to common stockholders $ ( 644,895 ) $ ( 291,142 ) $ 53,018

14 unchanged sentences

Issuance of stock, net of costs 6 22,901 — — — 22,907 — 22,907 —

Merger consideration transferred 2,289 5,574,174 — — — 5,576,463 110,702 5,687,165 —

Common stock redemption ( 1 ) ( 2,791 ) — — — ( 2,792 ) — ( 2,792 ) —

Share-based compensation 7 20,339 — — — 20,346 — 20,346 —

Net income — — — — 66,659 — 66,659 — 66,659 —

Loss on interest rate swaps and treasury locks — — — 7,851 — — 7,851 — 7,851 —

Redemption of non-controlling interest — 97 — — — 97 ( 97 ) — —

Net income (loss) — — — 40,897 — 40,897 ( 204 ) 40,693 —

Reclassification adjustments for losses included in net income (interest expense) — — 1,531 — — 1,531 ( 4 ) 1,527 —

Gain on interest rate swaps and treasury locks — — 10,590 — — 10,590 40 10,630 —

Contributions from redeemable non-controlling interests — — — — — — — — 2,014

Dividends to common stockholders

3 unchanged sentences

Issuance of stock, net of costs — 130 — — — 130 — 130 —

Merger consideration transferred — 2,289 5,574,174 — — — 5,576,463 110,702 5,687,165 —

Common stock redemption ( 1 ) ( 2,234 ) — — — ( 2,235 ) — ( 2,235 ) —

Conversion of OP Units to common stock 2 2,774 — — — 2,776 ( 2,776 ) — —

Share-based compensation 3 14,285 — — — 14,288 — 14,288 —

Redemption of non-controlling interest — — 97 — — — 97 ( 97 ) — —

Net income — — — — 40,897 — 40,897 ( 204 ) 40,693 —

Reclassification adjustments for losses included in net income (interest expense) — — — 1,531 — — 1,531 ( 4 ) 1,527 —

Net loss — — — ( 278,261 ) — ( 278,261 ) ( 3,822 ) ( 282,083 ) —

Reclassification adjustments for gains included in net income (interest expense) — — ( 14,315 ) — — ( 14,315 ) ( 173 ) ( 14,488 ) —

Gain on interest rate swaps and treasury locks — — 1,434 — — 1,434 29 1,463 —

Contributions from redeemable non-controlling interests — — — — — — — — 1,889

Adjustments to redemption value of redeemable non-controlling interests — — — — — — — — ( 35 )

Dividends to common stockholders

6 unchanged sentences

Share-based compensation 5 31,819 — — — 31,824 — 31,824 —

Net loss — — — — ( 278,261 ) — ( 278,261 ) ( 3,822 ) ( 282,083 ) —

Common stock repurchases ( 308 ) ( 510,115 ) — — — ( 510,423 ) — ( 510,423 ) —

Redemption of non-controlling interest — — — — — — ( 11,930 ) ( 11,930 ) —

Net (loss) gain — — — ( 654,485 ) — ( 654,485 ) ( 9,436 ) ( 663,921 ) 17

Reclassification adjustments for gains included in net income (interest expense) — — ( 12,954 ) — — ( 12,954 ) ( 183 ) ( 13,137 ) —

19 unchanged sentences

Amortization of straight-line rent on operating leases (lessee) 3,880 6,084 3,374

Gain on sales of real estate properties ( 77,546 ) ( 270,271 ) ( 55,940 )

(Gain) loss on extinguishment of debt ( 62 ) 2,401 —

Gain on sales of real estate properties and other assets ( 109,753 ) ( 77,546 ) ( 270,271 )

Loss (gain) on extinguishment of debt 237 ( 62 ) 2,401

Impairment of real estate properties and credit loss reserves 313,547 154,912 54,427

Impairment of goodwill 250,530 — —

Equity loss from unconsolidated joint ventures 135 1,682 687

17 unchanged sentences

Cash assumed in Merger, including restricted cash for special dividend payment — — 1,159,837

Net cash provided by (used in) investing activities 349,140 1,634,364 ( 562,473 )

Net cash provided by investing activities 900,923 349,140 1,634,364

FINANCING ACTIVITIES

Net (repayments) borrowing on unsecured credit facility ( 385,000 ) 40,000 210,000

Net borrowings (repayments) on unsecured credit facility — ( 385,000 ) 40,000

Borrowings on term loans — — 666,500

6 unchanged sentences

Common stock redemptions ( 8,881 ) ( 2,298 ) ( 3,192 )

Distributions to non-controlling interest of limited partners ( 5,123 ) ( 1,695 ) —

Common stock repurchases ( 510,423 ) — —

Distributions to non-controlling interest holders ( 5,473 ) ( 5,123 ) ( 1,695 )

Redemption of non-controlling interest ( 744 ) — —

Debt issuance and assumption costs ( 563 ) ( 529 ) ( 12,753 )

Payments made on finance leases ( 17 ) ( 17 ) —

Net cash (used in) provided by financing activities ( 884,222 ) ( 1,859,325 ) 327,716

(Decrease) increase in cash and cash equivalents ( 35,262 ) 47,786 ( 2,128 )

Net cash used in financing activities ( 1,359,323 ) ( 884,222 ) ( 1,859,325 )

Increase (decrease) in cash and cash equivalents 43,217 ( 35,262 ) 47,786

Cash and cash equivalents cash at beginning of period 25,699 60,961 13,175

10 unchanged sentences

Capitalized interest $ 4,295 $ 2,961 $ 1,410

Mortgage note receivables taken in connection with sale of real estate $ 51,000 $ — $ —

Mortgage notes receivable taken in connection with sale of real estate $ 9,630 $ 51,000 $ —

Non-controlling interest in sale of real estate $ 11,185 $ — $ —

Contribution of real estate properties into unconsolidated joint venture $ 172,666 $ — $ —

Real estate notes receivable assumed in Merger (adjusted to fair value) $ — $ — $ 74,819

9 unchanged sentences

(formerly known as Healthcare Trust of America Holdings, LP) (the "OP"), after giving effect to the Merger discussed in more detail in Note 2 below.

As of December 31, 2023, the Company had gross investments of approximately $ 13.4 billion in 655 consolidated real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development, corporate property and excluding held for sale assets.

As of December 31, 2024, the Company had gross real estate investments of approximately $ 11.8 billion in 589 consolidated 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.

The Company’s real estate properties are located in 33 states and total approximately 34.2 million square feet.

In addition, the Company had a weighted average ownership interest of approximately 43 % in 33 real estate properties held in unconsolidated joint ventures.

In addition, as of December 31, 2024, the Company had a weighted average ownership interest of approximately 31 % in 63 real estate properties held in unconsolidated joint ventures.

See Note 5 below for more details regarding the Company's joint ventures.

17 unchanged sentences

As of December 31, 2024, there were approximately 4.6 million, or 1.3 %, of OP Units issued and outstanding held by non-controlling interest holders.

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

Additionally, the Company i s the primary beneficiary of this VIE.

Accordingly, the Company consolidates its interests in the OP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

As of December 31, 2023, 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.

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) DECEMBER 31, 2023

Net real estate investments $ 85,752

As of December 31, 2024, the Company had three 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.

Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs, excluding the OP, in the aggregate as of December 31, 2024 and 2023:

(dollars in thousands) 2024 2023

Total real estate investments, net

$ 103,933 $ 85,752

Cash and cash equivalents 159 2,144

Receivables and other assets

Accrued expenses and other liabilities

Total liabilities and equity

As of December 31, 2023, the Company had three unconsolidated VIEs consisting of two notes receivables and one joint venture.

It was determined that the Company was not the primary beneficiary of the unconsolidated VIEs because the Company does not have the power or economics to direct the activities of the VIEs on a stand-alone basis.

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

Other assets, net

$ 108,145 $ 90,600

Notes and bonds payable

Accounts payable and accrued liabilities 2,786 17,835

Other liabilities 45 —

Total liabilities

$ 63,001 $ 17,835

As of December 31, 2024, the Company had five unconsolidated VIEs consisting of four 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 stand-alone basis, and therefore it was determined that the Company was not the primary beneficiary.

As a result , the Company accounts for the four 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:

5 unchanged sentences

Equity method 56,586 56,586

Note receivable 9,689 16,729

Note receivable 1 4,500

1 Assumed mortgage note receivable in connection with the Merger.

2 Includes investments in seven properties.

3 Company provided seller financing and entered into a mortgage loan and a mezzanine loan in connection with a property disposition.

As of December 31, 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.

4 unchanged sentences

Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, impairments, collectability of tenant receivables, and fair value measurements, as applicable.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Segment Reporting

The Company owns, leases, acquires, manages, finances, develops and redevelops outpatient and other healthcare-related properties.

The Company is managed as one reporting unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making.

Therefore, the Company discloses its operating results in a single reportable segment.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The Company is managed as one reporting unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making and discloses its operating results in a single reportable segment.

The Company's chief operating decision makers (“CODM”), represented by the Company's Chief Executive Officer, the Chief Financial Officer and the Chief Operating Officer, review financial information and assess the consolidated operations of the Company in order to make strategic decisions such as allocation of capital expenditures and other significant expenses.

See Note 18 for additional information on segment reporting.

Real Estate Properties

3 unchanged sentences

During 2024 approximately $ 3.0 million of fully depreciated tenant and capital improvements that were no longer in service were eliminated against accumulated depreciation.

There were no such transactions during 2023.

Depreciation expense of real estate properties for the three years ended December 31, 2024, 2023 and 2022 was $ 507.1 million, $ 518.6 million and $ 320.8 million, respectively.

11 unchanged sentences

significant changes in the Company’s use of assets or the strategy for its overall business;

plans to sell an asset before its depreciable life has ended;

plans to sell an asset before its useful life has ended;

the expiration of a significant portion of leases in a property;

2 unchanged sentences

A property value is considered impaired only if management's estimate of current and projected (undiscounted and unleveraged) operating cash flows of the property is less than the net carrying value of the property.

These estimates of future cash flows include only those that are directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the property based on its estimated remaining useful life.

These estimates of future cash flows include only those that are directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the property.

These estimates, including the useful life determination which can be affected by any potential sale of the property, are based on management's assumptions about its use of the property.

Therefore, significant judgment is involved in estimating the current and projected cash flows.

If management determines that the carrying value of the Company’s assets may not be fully recoverable based on the existence of any of the factors above, or others, management would measure and record an impairment charge based on the estimated fair value of the property or the estimated fair value less costs to sell the property.

If management determines that the carrying value of the Company’s assets may not be fully recoverable

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

based on the existence of any of the factors above, or others, management would measure and record an impairment charge based on the estimated fair value of the property or the estimated fair value less costs to sell the property.

See Note 7 for additional information on impairment.

Acquisitions of Real Estate Properties with In-Place Leases

3 unchanged sentences

Land fair value is estimated by using an assessment of comparable transactions and other relevant data.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The Company considers whether any of the in-place lease rental rates are above- or below-market.

8 unchanged sentences

The building and tenant improvement components of the purchase price are depreciated over the estimated useful life of the building or the weighted average remaining term of the in-place leases.

The at-market, in-place lease intangibles are amortized to depreciation and amortization expense over the weighted average remaining term of the leases, and customer relationship assets are amortized to depreciation amortization expense over terms applicable to each acquisition.

The at-market, in-place lease intangibles are amortized to depreciation and amortization expense over the weighted average remaining term of the leases, and customer relationship assets are amortized to depreciation and amortization expense over terms applicable to each acquisition.

Any goodwill recorded through a business combination would be reviewed for impairment at least annually and is not amortized.

9 unchanged sentences

• Level 2 – quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets;

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

• Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Executed purchase and sale agreements, which are binding agreements, are categorized as level one inputs.

Brokerage estimates, letters of intent, or unexecuted purchase and sale agreements are considered to be level three as they are nonbinding in nature.

Fair Value of Derivative Financial Instruments

2 unchanged sentences

Fair values of derivatives are estimated by pricing models that consider the forward yield curves and discount rates.

The fair value of the Company's forward starting interest

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

rate swap contracts are estimated by pricing models that consider foreign trade rates and discount rates.

The fair value of the Company's forward starting interest rate swap contracts are estimated by pricing models that consider foreign trade rates and discount rates.

Such amounts and the recognition of such amounts are subject to significant estimates that may change in the future.

1 unchanged sentence

Gains and losses are reclassified from accumulated other comprehensive income (loss) into earnings once the underlying hedged transaction is recognized in earnings.

As of December 31, 2023 and 2022, the Company had $ 10.7 million recorded in accumulated other comprehensive loss and $ 2.1 million recorded in accumulated other comprehensive (loss) income, respectively, related to forward starting interest rate swaps entered into and settled during 2015 and 2020 and a hedge of the Company's variable rate debt.

As of December 31, 2024 and 2023, the Company had $ 1.2 million and $ 10.7 million recorded in accumulated other comprehensive loss, respectively, related to forward starting interest rate swaps entered into and settled during 2015 and 2020 and a hedge of the Company's variable rate debt.

See Note 11 for additional information.

12 unchanged sentences

Debt issuance costs are amortized over the term of the debt instrument on the effective interest method or the straight-line method when the effective interest method is not applicable.

Goodwill is not amortized but is evaluated annually as of December 31 for impairment.

The Company's goodwill asset increased $ 27.3 million to $ 250.5 million in 2023 compared to $ 223.2 million in 2022, as a result of the final purchase price allocation adjustments related to the Merger.

The 2023 impairment evaluation indicated that no impairment had occurred with respect to the Company's goodwill asset.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Goodwill is not amortized but is typically evaluated for impairment annually as of December 31 or whenever events or changes in circumstances indicate that an impairment may exist.

However, during the first quarter of 2024, the Company experienced a sustained decline in the price per share of its common stock, which was identified as an indicator of goodwill impairment.

As a result, a goodwill evaluation was performed.

The Company performed a quantitative assessment, and the fair value of the Company’s single reporting unit was estimated using a combination of discounted cash flow models and earnings multiples techniques.

The determination of fair value using the discounted cash flow model technique requires the use of estimates and assumptions related to revenue and expense growth rates, capitalization rates, discount rates, capital expenditures and working capital levels.

The determination of fair value using the earnings multiples technique requires assumptions to be made in relation to maintainable earnings and market multiples.

These forecasts and assumptions are highly subjective, and while we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.

The Company determined that the carrying value exceeded estimated fair value, and therefore the Company recorded a $ 250.5 million full impairment of its goodwill, which is recorded as a non-cash charge in “Impairment of goodwill” in the Consolidated Statements of Operations.

See Note 9 for more detail on the Company’s intangible assets.

10 unchanged sentences

These awards include non-vested common stock or other stock-based awards, including units in the OP, pursuant to the Company's Amended and Restated 2006 Incentive Plan, dated April 29, 2021 ( the "Incentive Plan").

The Company recognizes share-based payments to employees and directors in the Consolidated Statements of Operations on a straight-line basis over the

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

requisite service period based on the fair value of the award on the measurement date.

The Company recognizes share-based payments to employees and directors in the Consolidated Statements of Operations on a straight-line basis over the requisite service period based on the fair value of the award on the measurement date.

The Company recognizes the impact of forfeitures as they occur.

9 unchanged sentences

To achieve the core principle, the Company applies the five-step model specified in the guidance.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Revenue that is accounted for under Topic 606 is segregated on the Company’s Consolidated Statements of Operations in the Other operating line item.

12 unchanged sentences

In most cases, the revenue is due and payable on a monthly basis.

The Company had a receivable balance of $ 1.9 million and $ 1.5 million, and $ 1.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company had a receivable balance of $ 1.9 million, $ 1.9 million and $ 1.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Management fee income includes property management services provided to third parties and certain of the properties in the Company's unconsolidated joint ventures and is generally calculated, accrued and billed monthly based on a percentage of cash collections of tenant receivables for the month or a stated amount per square foot.

1 unchanged sentence

Internal management fee income, where the Company manages its owned properties, is eliminated in consolidation.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Rental Income

20 unchanged sentences

See Note 16 for further discussion.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

If the Company fails to qualify as a REIT in any taxable year, it will be subject to U.S.

9 unchanged sentences

Federal tax returns for the years 2021, 2022, 2023 and 2024 are currently subject to examination by taxing authorities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

State Income Taxes

20 unchanged sentences

See Note 14 for the calculations of earnings per share.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Redeemable Non-Controlling Interests

5 unchanged sentences

As of December 31, 2024, the Company had redeemable non-controlling interests of $ 4.8 million.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Investments in Leases - Financing Receivables, Net

3 unchanged sentences

See below for additional information regarding the Company's financing receivables as of December 31, 2024.

(dollars in thousands) ORIGINATION DATE LOCATION INTEREST RATE CARRYING VALUE as of DECEMBER 31, 2023

(dollars in thousands) ORIGINATION DATE LOCATION INTEREST RATE CARRYING VALUE as of DECEMBER 31, 2024 CARRYING VALUE as of DECEMBER 31, 2023

May 2021 Poway, CA 5.71 % $ 116,304 $ 115,239

November 2021 Columbus, OH 6.48 % 7,367 7,363

$ 123,671 $ 122,602

Real Estate Notes Receivable

3 unchanged sentences

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

DEC 31, 2023 ALLOWANCE FOR CREDIT LOSSES FAIR VALUE DISCOUNT AND FEES CARRYING VALUE as of DEC 31, 2023

DECEMBER 31, 2024 INTEREST RECEIVABLE (OTHER ASSETS) ALLOWANCE FOR CREDIT LOSSES FAIR VALUE DISCOUNT AND FEES CARRYING VALUE as of DECEMBER 31, 2024

Mezzanine loans

Texas 6/24/2021 6/24/2024 8.00 % $ 54,119 $ 54,119 $ ( 5,196 ) $ ( 3,067 ) $ 45,856

Arizona 12/21/2023 12/20/2026 9.00 % $ 6,000 $ 6,000 $ 38 $ — $ — $ 6,038

10/03/2024 10/02/2029 11.00 % 4,500 1 — — — 1

10,500 6,001 38 — — 6,039

Mortgage loans

Texas 6/30/2021 7/01/2024 7.00 % 31,150 31,150 — — 31,150

6/30/2021 12/02/2024 7.00 % 31,150 31,150 551 ( 16,801 ) — 14,900

North Carolina 3

12/22/2021 12/22/2024 8.00 % 6,000 6,000 1,441 — — 7,441

Florida 5/17/2022 2/27/2026 6.00 % 65,000 37,661 195 — ( 24 ) 37,832

3 unchanged sentences

171,579 135,978 2,432 ( 16,801 ) ( 24 ) 121,585

$ 182,079 $ 141,979 $ 2,470 $ ( 16,801 ) $ ( 24 ) $ 127,624

1 In 2024, the Company provided seller financing of $ 9.6 million in connection with the sale of a real estate property in Houston, TX.

The Company has also committed mezzanine loan funding of up to $ 4.5 million in connection with this sale.

2 In 2024, the Company determined that an allowance for credit loss of $ 16.8 million was needed on this mortgage loan, which included approximately $ 16.3 million of principal and approximately $ 0.5 million of interest.

In January 2025, the underlying collateral for this loan was sold and the Company received $ 14.9 million towards the principal balance of this loan.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

3 Outstanding principal and interest due upon maturity.

As of the date of these financial statements, the outstanding principal and interest on this loan has not been repaid.

The Company has evaluated the collectibility of the amount outstanding and has determined that the underlying collateral has a value that exceeds the carrying value of as of December 31, 2024, and is working with borrower on satisfaction of the mortgage loan.

Allowance for Credit Losses

7 unchanged sentences

Placement on non-accrual status may be required.

Consistent with this definition, all loans on non-accrual status are

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

deemed to have deteriorated credit quality.

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, the loan may return to income accrual status.

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

As of December 31, 2023, the Company's carrying value of its outstanding loans was $ 173.6 million.

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

In 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.

In 2024, the Company determined that an additional allowance of $ 46.8 million was needed on these two mezzanine loans to cover the entire carrying amount for these loans.

In fourth quarter of 2024, the underlying project was sold and the Company received $ 4.0 million as consideration for its mezzanine loan interests.

Additionally, in 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 $ 16.8 million, including $ 0.5 million of accrued interest.

The Company utilized the level 1 fair value hierarchy, which included an executed purchase and sale agreement 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:

3 unchanged sentences

Allowance for credit losses, end of period $ 16,801 $ 5,196

On June 24, 2024, the Company's two mezzanine loans in Texas with a total principal balance of $ 54.1 million matured.

On July 15, 2024, the senior lender on the construction loan associated with the underlying project provided notice of foreclosure proceedings to the borrower.

In 2024, the Company recorded an allowance for credit loss of $ 46.8 million to cover the entire carrying amount for these loans.

In the fourth quarter of 2024, the capital for the underlying project was restructured and the Company received $ 4.0 million as consideration for its interest.

As of December 31, 2024, the Company no longer has a mezzanine position in connection with these projects.

Interest Income

Income from Lease Finance Receivables

The Company recognized the related income from two financing receivables totaling $ 8.3 million and $ 8.1 million, respectively, for the years ended December 31, 2023 and 2022, based on an imputed interest rate over the terms of the applicable lease.

The Company recognized the related income from two financing receivables totaling $ 8.4 million, $ 8.3 million and $ 8.1 million, respectively, for the years ended December 31, 2024, 2023 and 2022, 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Acquisition costs incurred in connection with entering into the financing receivable are treated as loan origination fees.

2 unchanged sentences

Income from Real Estate Notes Receivable

For the years ended December 31, 2023 and 2022, the Company recognized interest income of $ 8.8 million and $ 3.4 million, respectively, related to real estate notes receivable.

For 2021, the Company had no real estate notes receivable.

For the years ended December 31, 2024, 2023 and 2022, the Company recognized interest income of $ 8.0 million, $ 8.8 million and $ 3.4 million, respectively, related to real estate notes receivable.

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.

As of January 1, 2023, the Company placed real estate notes receivable with principal balances of $ 48.9 million on non-accrual status and accordingly did not recognize any interest income for the year ended December 31, 2023.

In 2023, the Company placed two of its real estate notes receivable on non-accrual status.

In 2024, the Company placed one of its real estate notes receivable with a principal balance, net of credit loss, of $ 14.9 million on non-accrual status.

Accordingly, the Company did not recognize any interest income for these loans subsequent to the transition to non-accrual status.

New Accounting Pronouncements

1 unchanged sentence

Some of the main provisions of this update to segment reporting include;

(i) a requirement to disclose significant segment expenses, on an annual and interim basis, that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss;

(i) a requirement to disclose significant segment expenses, on an annual and interim basis, that are regularly provided to the CODM and included within each reported measure of segment profit or loss;

(ii) a requirement to disclose the title and position of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources, and (iii) a requirement that an entity that has a single reportable segment provide all the disclosures required by the amendments in this update.

The update is effective for reporting periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

The Company adopted this ASU, effective for the year ended December 31, 2024.

The adoption has no impact on the Company’s financial position, results of operations or cash flows, but has resulted in new footnote disclosure.

See Note 18 for details on Segment Reporting.

On November 4, 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, that will require entities to provide more detailed information in the notes to the financial statements related to certain expense captions on the face of the income statement.

The ASU aims to increase transparency and provide investors with more detailed information about the nature of expenses reported on the face of the income statement.

The new standard does not change the requirements for the presentation of expenses on the face of the income statement.

Under this ASU, entities are required to disaggregate, in a tabular format, expense captions presented on the face of the income statement — excluding earnings or losses from equity method investments — if they include any of the following expense categories:

purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation or depletion.

For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those expenses.

The new ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

At this time, the Company does not expect that the adoption of this ASU will have a material impact on its consolidated financial statements and compliance of these new disclosure requirements will begin with the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The Company does not expect that the adoption of this ASU will have a material impact on its consolidated financial statements and compliance of these new disclosure requirements will begin with the Company's Annual Report on Form 10-K for the year ended December 31, 2027.

Merger with HTA

2 unchanged sentences

On the Closing Date, each outstanding share of Legacy HR common stock, $ 0.01 par value per share (the “Legacy HR Common Stock”), was cancelled and converted into the right to receive one share of Legacy HTA class A common stock at a fixed ratio of 1.00 to 1.00.

Per the terms of the Merger Agreement, Legacy HTA declared a special dividend of $ 4.82 (the “Special Dividend”) for each outstanding share of Legacy HTA class A common stock, $ 0.01 par value per share ( the “Legacy HTA Common Stock”), and the OP declared a corresponding distribution to the holders of its partnership units, payable to Legacy HTA stockholders and OP unitholders of record on July 19, 2022.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

share ( the “Legacy HTA Common Stock”), and the OP declared a corresponding distribution to the holders of its partnership units, payable to Legacy HTA stockholders and OP unitholders of record on July 19, 2022.

Immediately following the Merger, Legacy HR converted to a Maryland limited liability company and changed its name to HRTI, LLC and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”.

52 unchanged sentences

(b) Includes $ 15.9 million of contractual accounts receivable, which approximates fair value.

(c) Includes $ 78.7 million of gross contractual real estate notes receivable, the fair value of which was $ 74.8 million, and the Company preliminarily expects to collect substantially all of the real estate notes receivable proceeds as of the Closing Date.

(c) Includes $ 78.7 million of gross contractual real estate notes receivable, the fair value of which was $ 74.8 million, and the Company expected to collect substantially all of the real estate notes receivable proceeds as of the Closing Date.

The cumulative measurement period adjustments recorded through June 30, 2023 are final and primarily resulted from updated valuations related to the Company’s real estate assets and liabilities and additional information obtained by the Company related to the properties acquired in the Merger and their respective tenants, and resulted in an increase to goodwill of $ 101.6 million.

Based on the final purchase price allocation of fair value, approximately $ 247.0 million has been allocated to goodwill.

Based on the final purchase price allocation of fair value, approximately $ 247.0 million was allocated to goodwill.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed.

The recognized goodwill is attributable to expected synergies and benefits arising from the Merger, including anticipated general and administrative cost savings and potential economies of scale benefits in both tenant and vendor relationships following the closing of the Merger.

None of the goodwill recognized is expected to be deductible for tax purposes.

The recognized goodwill was attributable to expected synergies and benefits arising from the Merger, including anticipated general and administrative cost savings and potential economies of scale benefits in both tenant and vendor relationships following the closing of the Merger.

None of the goodwill recognized was deductible for tax purposes.

During 2024, the Company experienced a sustained decline in the price per share of its common stock, which was identified as an indicator of goodwill impairment.

As a result, a goodwill evaluation was performed and the Company recorded a full impairment of its goodwill, which was recorded as a non-cash charge in “Impairment of goodwill” in the Consolidated Statements of Operations.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

2 unchanged sentences

The Merger-related costs primarily consisted of legal, consulting, severance, and banking services and for the year ended December 31, 2023, including a refund of $ 17.8 million for transfer taxes paid during the year ended December 31, 2023.

No Merger-related costs were incurred for the year ended December 31, 2024.

Property Investments

4 unchanged sentences

Dallas, TX 39 $ 73,030 $ 864,625 $ 40,948 $ 547 $ 979,150 $ ( 245,493 )

Houston, TX 31 76,959 614,531 60,651 57 752,198 ( 97,793 )

Seattle, WA 24 45,272 547,743 5,178 679 598,872 ( 184,304 )

Denver, CO 33 76,698 501,994 43,268 610 622,570 ( 94,906 )

Charlotte, NC 31 32,980 462,173 25,947 133 521,233 ( 134,075 )

Phoenix, AZ 35 20,262 437,804 36,384 425 494,875 ( 59,449 )

Houston, TX 26 61,201 510,255 46,286 46 617,788 ( 106,416 )

Denver, CO 26 55,309 390,453 32,602 605 478,969 ( 106,457 )

Atlanta, GA 24 39,895 365,592 20,769 102 426,358 ( 86,861 )

Boston, MA 16 120,818 279,881 39,509 14 440,222 ( 60,469 )

Los Angeles, CA 15 49,770 265,617 3,486 401 319,274 ( 131,477 )

Phoenix, AZ 35 29,177 492,016 31,915 427 553,535 ( 84,116 )

Raleigh, NC 25 57,906 366,150 29,224 13 453,293 ( 55,468 )

Nashville, TN 11 38,057 339,417 9,840 4,422 391,736 ( 128,686 )

Los Angeles, CA 20 72,086 360,330 16,481 453 449,350 ( 145,875 )

Miami, FL 14 22,890 265,974 17,785 176 306,825 ( 75,640 )

1 unchanged sentence

Indianapolis, IN 39 50,874 274,524 23,329 13 348,740 ( 50,188 )

Austin, TX 13 27,063 274,229 18,568 142 320,002 ( 55,891 )

New York, NY 14 63,377 163,038 25,963 — 252,378 ( 26,533 )

Austin, TX 11 21,601 217,862 18,568 37 258,068 ( 46,372 )

Washington, DC 9 5,265 220,493 3,799 48 229,605 ( 59,598 )

Chicago, IL 6 13,804 217,359 7,626 81 238,870 ( 45,205 )

Memphis, TN 11 13,901 189,941 4,211 322 208,375 ( 71,813 )

Honolulu, HI 6 9,527 188,772 6,319 169 204,787 ( 61,575 )

Hartford, CT 30 29,381 138,713 21,848 — 189,942 ( 15,883 )

San Francisco, CA 6 49,181 181,860 9,915 52 241,008 ( 59,302 )

Orlando, FL 7 9,793 170,755 16,815 1 197,364 ( 29,866 )

Other (45 markets) 190 272,682 2,797,898 229,254 2,079 3,301,913 ( 713,184 )

8 unchanged sentences

Some leases provide tenants with fixed rent renewal terms while others have market rent renewal terms.

Some leases provide the lessee, during the term of the lease, with an option or right of first

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 CONSOLIDATED FINANCIAL STATEMENTS, cont.

refusal to purchase 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.

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 CPI.

3 unchanged sentences

Variable payments are recognized in the period earned.

Lease income for the Company's operating leases recognized for the years ended December 31, 2023 and 2022 was $ 1.3 billion and $ 907.5 million, respectively.

Lease income for the Company's operating leases recognized for the years ended December 31, 2024, 2023 and 2022 was $ 1.2 billion, $ 1.3 billion and $ 907.5 million, respectively.

Future minimum lease payments under the non-cancelable operating leases, excluding any reimbursements, as of December 31, 2024 were as follows:

8 unchanged sentences

The Company expects that the purchase price from its purchase options will be greater than its net investment in the properties at the time of potential exercise by the lessee.

The Company had investments of approximately $ 111.1 million in six real estate properties as of December 31, 2023 that were subject to purchase options that were exercisable.

The Company had gross investments of approximately $ 111.1 million in six real estate properties as of December 31, 2024 that were subject to purchase options that were exercisable.

Lessee Accounting Under ASC 842

21 unchanged sentences

The following table provides details of the Company's total lease expense for the years ended December 31, 2024 and 2023:

In thousands YEAR ENDED

31, 2023 YEAR ENDED

YEAR ENDED DECEMBER 31

In thousands 2024 2023

Operating lease cost

9 unchanged sentences

Financing cash flows outflows related to financing leases $ 17 $ 17

Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 53,765

Right-of-use assets obtained in exchange for new operating lease liabilities $ 3,855 $ 1,758

3 unchanged sentences

Weighted-average discount rate - finance leases 5.0 % 5.0 %

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Acquisitions, Dispositions and Mortgage Repayments

2024 Acquisition Activity

The following table details the Company's real estate acquisition activity for the year ended December 31, 2023:

Dollars in thousands DATE ACQUIRED PURCHASE PRICE MORTGAGE NOTES PAYABLE, NET CASH

CONSIDERATION 1

ESTATE OTHER 2

SQUARE FOOTAGE

Tampa, FL 3/10/23 $ 31,500 $ — $ 30,499 $ 30,596 $ ( 97 ) 115,867

Colorado Springs, CO 7/28/23 11,450 ( 5,284 ) 6,024 11,416 ( 108 ) 42,770

Total real estate acquisitions $ 42,950 $ ( 5,284 ) $ 36,523 $ 42,012 $ ( 205 ) 158,637

Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.

Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition.

In the second quarter of 2023, the Company entered into a joint venture agreement for the development of a medical office building in Scottsdale, Arizona.

The Company holds a 90 % interest in the joint venture and determined the arrangement meets the criteria to be consolidated.

The joint venture acquired an $ 8.8 million land parcel to be developed with the Company contributing cash of $ 8.3 million.

In the third quarter of 2023, the Company acquired the fee interest in a parcel of land previously held under a ground lease for $ 0.8 million and an additional interest in an operating property for $ 0.6 million.

The following table summarizes the estimated relative fair values of the assets acquired and liabilities assumed in the real estate acquisitions for 2023 as of the acquisition date:

in millions ESTIMATED

Building $ 27.5 17.0 - 30.0

Tenant Improvements 3.4 5.1 - 5.9

Land Improvements 1.1 6.0 - 10.0

At-market lease intangibles 4.5 5.1 - 5.9

Above-market lease intangibles (lessor) 0.2 1.8 - 4.9

Below-market lease intangibles (lessor) ( 0.2 ) 6.4 - 13.9

Mortgage notes payable assumed, including fair value adjustments ( 5.3 )

Other assets acquired 0.1

Accounts payable, accrued liabilities and other liabilities assumed ( 0.3 )

Total cash paid $ 36.5

The Company had no real estate acquisition activity for the year ended December 31, 2024.

Unconsolidated Joint Ventures

4 unchanged sentences

The Company's investment in and loss recognized for the years ended December 31, 2024 and 2023 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below:

Dollars in millions 2023 2022

Dollars in thousands 2024 2023

Investments in unconsolidated joint ventures, beginning of period $ 311,511 $ 327,248

3 unchanged sentences

Investments in unconsolidated joint ventures, end of period $ 473,122 $ 311,511

2022 Acquisitions

The following table details the Company's acquisitions, exclusive of the Merger, for the year ended December 31, 2022:

Dollars in thousands TYPE 1

DATE ACQUIRED PURCHASE PRICE CASH

2023 Acquisition Activity

The following table details the Company's real estate acquisition activity for the year ended December 31, 2023:

Dollars in thousands DATE ACQUIRED PURCHASE PRICE MORTGAGE NOTES PAYABLE, NET CASH

CONSIDERATION 1

1 unchanged sentence

SQUARE FOOTAGE

MOB 2/11/22 $ 8,175 $ 8,185 $ 8,202 $ ( 17 ) 18,000

San Francisco, CA 5

MOB 3/7/22 114,000 112,986 108,687 4,299 166,396

Atlanta, GA MOB 4/7/22 6,912 7,054 7,178 ( 124 ) 21,535

Denver, CO MOB 4/13/22 6,320 5,254 5,269 ( 15 ) 12,207

Tampa, FL 3/10/23 $ 31,500 $ — $ 30,499 $ 30,596 $ ( 97 ) 115,867

Colorado Springs, CO 7/28/23 11,450 ( 5,284 ) 6,024 11,416 ( 108 ) 42,770

MOB 4/13/22 13,680 13,686 13,701 ( 15 ) 25,800

Seattle, WA MOB 4/28/22 8,350 8,334 8,370 ( 36 ) 13,256

Houston, TX MOB 4/28/22 36,250 36,299 36,816 ( 517 ) 76,781

Los Angeles, CA MOB 4/29/22 35,000 35,242 25,400 9,842 34,282

Oklahoma City, OK MOB 4/29/22 11,100 11,259 11,334 ( 75 ) 34,944

Raleigh, NC 5

MOB 5/31/22 27,500 26,710 27,127 ( 417 ) 85,113

MOB 6/9/22 18,650 18,619 18,212 407 55,788

Seattle, WA MOB 8/1/22 4,850 4,806 4,882 ( 76 ) 10,593

Raleigh, NC MOB 8/9/22 3,783 3,878 3,932 ( 54 ) 11,345

Jacksonville, FL MOB 8/9/22 18,195 18,508 18,583 ( 75 ) 34,133

Atlanta, GA MOB 8/10/22 11,800 11,525 12,038 ( 513 ) 43,496

Denver, CO MOB 8/11/22 14,800 13,902 13,918 ( 16 ) 34,785

Raleigh, NC MOB 8/18/22 11,375 10,670 10,547 123 31,318

Nashville, TN MOB 9/15/22 21,000 20,764 20,572 192 61,932

Austin, TX MOB 9/29/22 5,450 5,449 5,572 ( 123 ) 15,000

Jacksonville, FL 4

MOB 10/12/22 3,600 3,530 3,609 ( 79 ) 6,200

Houston, TX MOB 11/21/22 5,500 5,469 5,513 ( 44 ) 28,369

MOB 12/28/22 888 890 889 1 2,219

Denver, CO MOB 12/28/22 16,400 16,170 16,467 ( 297 ) 39,692

$ 403,578 $ 399,189 $ 386,818 $ 12,371 863,184

1 MOB = medical outpatient building.

Total real estate acquisitions $ 42,950 $ ( 5,284 ) $ 36,523 $ 42,012 $ ( 205 ) 158,637

Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.

Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition.

4 Represents a single-tenant property.

5 Includes three properties.

6 Includes two properties.

7 The Company acquired additional ownership interests in an existing building bringing the Company's ownership to 71.4 %.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The following table summarizes the estimated relative fair values of the assets acquired and liabilities assumed in the real estate acquisitions for 2023 as of the acquisition date:

6 unchanged sentences

Below-market lease intangibles (lessor) ( 0.2 ) 6.4 - 13.9

Below-market lease intangibles (lessee) 1.2 13.1

Mortgage notes payable assumed, including fair value adjustments ( 5.3 )

Other assets acquired 0.1

1 unchanged sentence

Total cash paid $ 36.5

Unconsolidated Joint Ventures

The following table details the joint venture acquisitions for the year ended December 31, 2022:

Dollars in thousands TYPE 1

DATE ACQUIRED PURCHASE PRICE CASH

CONSIDERATION 2

ESTATE OTHER 3

SQUARE FOOTAGE

San Francisco, CA 4

MOB 3/7/22 $ 67,175 $ 66,789 $ 65,179 $ 1,610 110,865

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

2024 Real Estate Asset Dispositions

The following table details the Company's dispositions and joint venture dispositions for the year ended December 31, 2024:

Dollars in thousands DATE DISPOSED SALE PRICE CLOSING COSTS & CREDITS COMPANY-FINANCED MORTGAGE NOTES NET CONSIDERATION NET REAL ESTATE INVESTMENT OTHER GAIN/(IMPAIR-MENT) SQUARE FOOTAGE

Albany, NY 4/1/24 $ 725 $ ( 60 ) $ — $ 665 $ 765 $ ( 82 ) $ ( 18 ) 14,800

San Angelo, TX 4/12/24 5,085 ( 128 ) — 4,957 4,917 66 ( 26 ) 24,580

Houston, TX 5/20/24 250 ( 9 ) — 241 713 ( 520 ) 48 37,040

5/23/24 284,348 ( 14,270 ) — 270,078 254,176 25,836 ( 9,934 ) 556,274

Denver, CO 5/30/24 19,000 ( 628 ) — 18,372 18,522 165 ( 315 ) 37,130

6/6/24 54,858 ( 1,575 ) — 53,283 27,964 623 24,696 129,879

Minneapolis, MN 6/21/24 1,082 ( 144 ) — 938 303 43 592 50,291

Raleigh, NC 2

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

Houston, TX 4

10/3/24 12,000 ( 1,001 ) ( 9,630 ) 1,369 11,266 295 ( 563 ) 140,012

Greensboro, NC 10/9/24 12,514 ( 21 ) — 12,493 10,152 296 2,045 35,373

Des Moines, IA 10/15/24 31,750 ( 1,320 ) — 30,430 13,869 1,662 14,899 95,486

Albany, NY 10/15/24 9,500 ( 521 ) — 8,979 7,823 1,193 ( 37 ) 80,676

Salt Lake City, UT 5

10/24/24 30,712 ( 8,962 ) — 21,750 26,899 ( 9,406 ) 4,257 112,192

Miami, FL 10/25/24 36,789 ( 706 ) — 36,083 35,925 ( 209 ) 367 102,186

10/25/24 17,767 ( 718 ) — 17,049 14,650 ( 210 ) 2,609 60,761

Cleveland, OH 12/10/24 1,000 ( 157 ) — 843 1,454 57 ( 668 ) 31,152

12/12/24 18,350 ( 2,003 ) — 16,347 17,562 345 ( 1,560 ) 83,078

12/18/24 310,250 ( 6,767 ) — 303,483 321,437 6,616 ( 24,570 ) 766,622

Atlanta, GA 12/20/24 15,900 ( 1,318 ) — 14,582 13,344 635 603 42,921

Los Angeles, CA 7

MOB 3/7/22 33,800 32,384 32,390 ( 6 ) 103,259

12/20/24 64,000 ( 4,805 ) — 59,195 47,322 1,676 10,197 162,554

1 MOB = medical outpatient building.

2 Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.

3 Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition.

4 Includes three properties.

Tampa, FL 12/27/24 37,500 ( 402 ) — 37,098 41,556 ( 1,962 ) ( 2,496 ) 95,896

Wichita Falls, TX 12/27/24 600 ( 130 ) — 470 2,530 14 ( 2,074 ) 25,133

Total dispositions $ 1,450,312 $ ( 67,295 ) $ ( 9,630 ) $ 1,373,387 $ 1,291,584 $ 35,525 $ 55,907 4,132,769

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, Austin, TX, Miami, FL, Denver, CO, Memphis, TN, Indianapolis, IN, and Honolulu, HI;

two MOBs in Los Angeles;

three MOBs in Houston, TX and Dallas, TX;

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.

The net proceeds to the Company related to these dispositions totaled $ 584.9 million.

The Company sold seven MOBs in Greensboro, NC and two non-clustered single-tenant MOBs in Raleigh, NC to a single buyer in a single transaction.

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.

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

The Company sold an MOB that was included in a consolidated joint venture in which the Company held a 63 % ownership interest.

Proceeds include the Company's pro-rata share of the purchase price as well as amounts due to the Company by the joint venture.

Includes two properties.

Includes three properties.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

2 unchanged sentences

Dollars in thousands Type 1

DATE DISPOSED SALE PRICE CLOSING ADJ COMPANY-FINANCED NOTES NET PROCEEDS NET REAL ESTATE OTHER (INCLUDING RECEIVABLES) 2

DATE DISPOSED SALE PRICE CLOSING COSTS & CREDITS COMPANY-FINANCED NOTES NET CONSIDERATION NET REAL ESTATE INVESTMENT OTHER 2

GAIN/(IMPAIR-MENT) SQUARE FOOTAGE

26 unchanged sentences

Boston, MA MOB 12/28/23 117,197 ( 2,079 ) — 115,118 107,803 9,828 ( 2,513 ) 161,254

Jacksonville/Orlando/Miami, FL 11

SNF 12/29/23 77,000 ( 8,678 ) ( 7,700 ) 60,622 65,839 ( 294 ) 2,777 354,500

14 unchanged sentences

The Company entered into a separate note receivable for $ 7.7 million related to this sale.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

2022 Real Estate Asset Dispositions

The following table details the Company's dispositions for the year ended December 31, 2022:

Dollars in thousands TYPE 1

DATE DISPOSED SALES PRICE CLOSING ADJUSTMENTS NET PROCEEDS NET REAL ESTATE INVESTMENT OTHER

receivables 2

(IMPAIRMENT) SQUARE FOOTAGE

Loveland, CO 3, 4

MOB 2/24/22 $ 84,950 $ ( 45 ) $ 84,905 $ 40,095 $ 4 $ 44,806 150,291

San Antonio, TX 3

MOB 4/15/22 25,500 ( 2,272 ) 23,228 14,381 284 8,563 201,523

GA, FL, PA 5, 11

MOB 7/29/22 133,100 ( 8,109 ) 124,991 124,991 — — 316,739

GA, FL, TX 7, 11

MOB 8/4/22 160,917 ( 5,893 ) 155,024 151,819 3,205 — 343,545

Los Angeles, CA 5, 9, 11

MOB 8/5/22 134,845 ( 3,102 ) 131,743 131,332 411 — 283,780

Dallas, TX 7, 10, 11

MOB 8/30/22 114,290 ( 682 ) 113,608 113,608 — — 189,385

Indianapolis, IN 6, 12

MOB 8/31/22 238,845 ( 5,846 ) 232,999 84,767 4,324 143,908 506,406

MOB 10/4/22 104,025 ( 5,883 ) 98,142 38,872 6,436 52,834 291,328

Houston, TX MOB 10/21/22 32,000 ( 280 ) 31,720 10,762 744 20,214 134,910

College Station, TX MOB 11/10/22 49,177 ( 3,755 ) 45,422 44,918 475 28 122,942

El Paso, TX MOB 12/22/22 55,326 ( 4,002 ) 51,324 56,427 ( 1,897 ) ( 3,205 ) 110,465

Atlanta, GA 8

MOB 12/22/22 91,243 ( 4,326 ) 86,917 109,051 235 ( 22,369 ) 348,416

Louis, MO MOB 12/28/22 18,000 ( 1,471 ) 16,529 18,340 4 ( 1,815 ) 69,394

$ 1,242,218 $ ( 45,666 ) $ 1,196,552 $ 939,363 $ 14,225 $ 242,964 3,069,124

1 MOB = medical outpatient building

2 Includes straight-line rent receivables, leasing commissions and lease inducements.

3 Includes two properties.

4 The Company deferred the tax gain through a 1031 exchange and reinvested the proceeds.

5 Includes four properties.

6 Includes five properties.

7 Includes six properties.

8 Includes nine properties.

9 Values and square feet are represented at 100 %.

The Company retained a 20 % ownership interest in the joint venture with an unrelated third party that purchased these properties.

10 Values and square feet are represented at 100 %.

The Company retained a 40 % ownership interest in the joint venture with an unrelated third party that purchased these properties.

11 These properties were acquired as part of the Merger and were included as assets held for sale in the purchase price allocation.

12 Two of the five properties included in this portfolio were acquired in the Merger and were included as assets held for sale in the purchase price allocation.

Held for Sale

The Company had one property classified as assets held for sale as of December 31, 2023.

The Company had three properties classified as assets held for sale as of December 31, 2024.

The net real estate assets held for sale includes the impact of $ 24.1 million of impairment charges for the year ended December 31, 2024.

The Company had one property classified as assets held for sale as of December 31, 2022, which was sold in the first quarter of 2023.

The Company had one property classified as assets held for sale as of December 31, 2023.

The net real estate assets held for sale included the impact of $ 5.9 million of impairment charges for the year ended December 31, 2023.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

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Liabilities of properties held for sale $ 1,283 $ 295

Impairment Charges

Subsequent Dispositions

On February 7, 2025, the Company disposed of a 30,304 square foot medical office building in Boston, Massachusetts for $ 4.5 million.

On February 14, 2025, the Company disposed of two medical office buildings in Denver, Colorado, with a combined total of 69,715 square feet for an aggregate purchase price of $ 8.6 million.

These properties were classified as held for sale as of December 31, 2024.

Impairment Charges - Long-Lived Assets

An asset is impaired when undiscounted cash flows expected to be generated by the asset are less than the carrying value of the asset.

The Company must assess the potential for impairment of its long-lived assets, including real estate properties, whenever events occur or there is a change in circumstances, such as the sale of a property or the decision to sell a property, which indicate that the recorded value might not be fully recoverable.

The Company recorded impairment charges totaling $ 249.9 million on 51 properties sold and 13 additional properties as a result of completed and planned disposition activity for the year ended December 31, 2024.

The Company recorded impairment charges on 31 properties sold and six additional properties associated with planned disposition activity for the year ended December 31, 2023, totaling $ 149.7 million.

The Company recorded impairment charges on 12 properties sold and three additional properties associated with planned disposition activity for the year ended December 31, 2022, totaling $ 54.4 million.

Both level 1 and level 3 fair value techniques were used to derive these impairment charges.

As of December 31, 2023, six properties totaling $ 53.6 million were measured at fair value using level 3 fair value hierarchy.

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

Other assets consist primarily of intangible assets, prepaid assets, real estate notes receivable, straight-line rent receivables, accounts receivable, additional long-lived assets and interest rate swaps.

As of December 31, 2024, nine real estate properties totaling $ 61.2 million were measured at fair value using level three 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, and are nonbinding in nature.

Other assets consist primarily of real estate notes receivable, straight-line rent receivables, prepaid assets, intangible assets, accounts receivable and additional long-lived assets.

Items included in "Other assets, net" on the Company’s Consolidated Balance Sheets as of December 31, 2024 and 2023 are detailed in the table below:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Dollars in thousands December 31, 2024 December 31, 2023

Prepaid assets $ 154,957 $ 116,455

Real estate notes receivable, net 127,624 173,614

Straight-line rent receivables 124,970 116,866

Prepaid assets 116,455 81,900

Above-market intangible assets, net 66,695 80,720

Accounts receivable, net 1

36,495 63,203

Additional long-lived assets, net 20,717 21,446

Above-market intangible assets, net 32,230 66,695

Interest rate swap assets 5,263 4,634

Investment in securities 2

Debt issuance costs, net 3,867 5,977

Project costs 4,903 6,187

Additional long-lived assets, net 4,197 20,717

Net investment in lease 2,168 2,112

Investment in securities 2

Debt issuance costs, net 1,758 3,867

Customer relationship intangible assets, net 1,011 1,066

1 unchanged sentence

$ 507,496 $ 592,368

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

1 The amounts for December 31, 2024 and 2023 are net of allowance for doubtful accounts of $ 9.5 million and $ 8.4 million, respectively.

The amount for December 31, 2022 includes $ 7,169 of other receivables, net.

2 This amount represents the value of the Company's preferred stock investment in a data analytics platform.

In 2024, a fair value measurement impairment of $ 4.1 million was recorded on this investment and is included in "Impairment of real estate properties and credit loss reserves" on the Statement of Operations.

Intangible Assets and Liabilities

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$ 653.7 $ 1,082.3 $ 349.4 $ 301.5 5.8

For the years ended December 31, 2023 and 2022, the Company recognized approximately $ 214.8 million and $ 133.6 million of intangible amortization, respectively.

For the years ended December 31, 2024, 2023 and 2022, the Company recognized approximately $ 167.7 million, $ 214.8 million, and $ 133.6 million of intangible amortization, respectively.

The following table represents expected amortization over the next five years of the Company’s intangible assets and liabilities in place as of December 31, 2024:

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Notes and Bonds Payable

DECEMBER 31, MATURITY DATES

DECEMBER 31, 1

MATURITY DATES

CONTRACTUAL INTEREST RATES EFFECTIVE INTEREST RATES PRINCIPAL PAYMENTS INTEREST PAYMENTS

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5.59 % At maturity Monthly

Senior Notes due 2025 1

249,484 249,115 5/25 3.88 % 4.12 % At maturity Semi-annual

Senior Notes due 2026 1

579,017 571,587 8/26 3.50 % 4.94 % At maturity Semi-annual

Senior Notes due 2027 1

483,727 479,553 7/27 3.75 % 4.76 % At maturity Semi-annual

Senior Notes due 2028 1

297,429 296,852 1/28 3.63 % 3.85 % At maturity Semi-annual

Senior Notes due 2030 1

575,443 565,402 2/30 3.10 % 5.30 % At maturity Semi-annual

Senior Notes due 2025 249,868 249,484 5/25 3.88 % 4.12 % At maturity Semi-annual

Senior Notes due 2026 586,824 579,017 8/26 3.50 % 4.94 % At maturity Semi-annual

Senior Notes due 2027

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298,029 297,429 1/28 3.63 % 3.85 % At maturity Semi-annual

Senior Notes due 2030 586,028 575,443 2/30 3.10 % 5.30 % At maturity Semi-annual

Senior Notes due 2030

297,190 296,780 3/30 2.40 % 2.72 % At maturity Semi-annual

Senior Notes due 2031 296,343 295,832 3/31 2.05 % 2.25 % At maturity Semi-annual

Senior Notes due 2031 667,233 649,521 3/31 2.00 % 5.13 % At maturity Semi-annual

Mortgage notes payable 45,136 70,534 12/25-12/26 3.60 %- 4.77 %

3.57 %- 6.88 %

Monthly Monthly

$ 4,662,771 $ 4,994,859

1 Balances are shown net of discounts and unamortized issuance costs.

2 Balances are shown net of discounts and unamortized issuance costs and include premiums.

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

2 As of December 31, 2024, the Company had $ 1.5 billion available to be drawn on its $ 1.5 billion Unsecured Credit Facility.

3 In 2024, the Company repaid the $ 350 million Unsecured Term Loan and recognized approximately $ 0.2 million of accelerated amortization expense included in the loss on extinguishment of debt.

4 In April 2024, the Company exercised its option to extend the maturity date for one year to May 2025 for a fee of approximately $ 0.3 million.

On January 7, 2025 the company made a partial repayment of $ 25 million on the initial $ 200 million Unsecured Term Loan.

5 On January 14, 2025, the company made a partial repayment of $ 10 million on the initial $ 300 million Unsecured Term Loan.

The Company’s various debt agreements contain certain representations, warranties, and financial and other covenants customary in such loan agreements.

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As of December 31, 2024, the Company was in compliance with its financial covenant provisions under its various debt instruments.

The following table reconciles the Company’s aggregate Senior notes principal balance with the Company’s Consolidated Balance Sheets as of December 31, 2023 and 2022.

The following table summarizes the Company’s aggregate Senior notes principal balance as of December 31, 2024 and 2023.

Dollars in thousands 2024 2023

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Senior notes carrying amount $ 3,469,619 $ 3,427,233

The following table reconciles the Company’s aggregate term loan principal balance with the Company’s Consolidated Balance Sheets as of December 31, 2023 and 2022.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The following table summarizes the Company’s aggregate term loan principal balances as of December 31, 2024 and 2023.

Dollars in thousands 2024 2023

Term loan principal balances 1

$ 1,150,000 $ 1,500,000

Debt issuance costs ( 1,984 ) ( 2,908 )

Term Loans carrying amount $ 1,148,016 $ 1,497,092

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

In 2024, the Company repaid the $ 350 million Unsecured Term Loan and recorded approximately $ 0.2 million of accelerated amortization expense included in the loss of extinguishment of debt.

Mortgage Notes Payable

The following table reconciles the Company’s aggregate mortgage notes principal balance with the Company’s Consolidated Balance Sheets as of December 31, 2023 and 2022.

The following table summarizes the Company’s aggregate mortgage notes principal balance as of December 31, 2024 and 2023.

Dollars in thousands 2024 2023

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Mortgage Activity

On July 28, 2023, the Company assumed a mortgage note payable of $ 5.6 million in connection with the acquisition of a 42,770 square foot property in Colorado Springs, Colorado.

The note bears interest at a rate of 4.5 % per annum and matures on April 1, 2026.

On August 1, 2023, the Company repaid in full at maturity a mortgage note payable bearing interest at a rate of 3.31 % per annum with an outstanding principal of $ 9.8 million.

The mortgage note encumbered a 66,984 square foot property in Marietta, Georgia.

On December 1, 2023, the Company repaid in full at maturity a mortgage note payable bearing interest at a rate of 4.51 % per annum with an outstanding principal of $ 6.6 million.

The mortgage note encumbered a 93,992 square foot property in Lakewood, Colorado.

Subsequent Changes in Debt Structure

On January 6, 2024, the Company repaid in full at maturity a mortgage note payable bearing interest at a rate of 4.77 % per annum with an outstanding principal of $ 11.3 million.

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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 $ 7.0 million.

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

The following table details the Company’s mortgage notes payable, with related collateral.

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Life Insurance Co.

9.0 4.84 % 12/23 MOB,OFC Monthly/ 10 -yr amort.

Life Insurance Co.

6.8 3.96 % 2/24 MOB Monthly/ 7 -yr amort.

24.4 11.3 11.7

Life Insurance Co.

6.8 3.96 % 2/24 MOB Monthly/ 7 -yr amort.

Financial Services 3

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$ 139.8 $ 45.1 $ 70.5

1 The Company repaid this loan in August 2023.

The Company's unencumbered gross investment was $ 26.0 million at December 31, 2023.

2 The Company repaid this loan in December 2023.

The Company's unencumbered gross investment was $ 24.5 million at December 31, 2023.

1 The unamortized portion of the $ 0.8 million premium recorded on this note upon acquisition is included in the balance above.

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3 The unamortized portion of the $ 0.1 million premium recorded on this note upon acquisition is included in the balance above.

6 The unamortized portion of the $ 0.7 million premium recorded on this note upon acquisition is included in the balance above.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

4 The unamortized portion of the $ 0.7 million premium recorded on this note upon acquisition is included in the balance above.

5 The unaccreted portion of the $ 0.3 million discount recorded on this note upon acquisition is included in the balance above.

6 The contractual interest rates for the four outstanding mortgage notes ranged from 3.6 % to 4.5 % as of December 31, 2024.

7 MOB-Medical outpatient building;

8 Payable in monthly installments of principal and interest with the final payment due at maturity (unless otherwise noted).

9 The contractual interest rates for the seven outstanding mortgage notes ranged from 3.6 % to 4.8 % as of December 31, 2023.

10 MOB-Medical office building;

Other Long-Term Debt Information

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$ 4,894,565 $ ( 224,753 ) $ ( 7,041 ) $ 4,662,771 100.0 %

1 Includes discount accretion and premium amortization related to the Company’s Senior Notes and four mortgage notes payable.

1 Includes discount accretion and premium amortization related to the Company’s Senior Notes and two mortgage notes payable.

2 Excludes approximate ly $ 1.8 million in debt issuance costs related to the Company's Unsecured Credit Facility included in other assets, net

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

On February 16, 2023, the Company entered into a swap transaction with a notional amount of $ 50.0 million and a fixed rate of 4.16 %.

The swap agreement has an effective date of March 1, 2023 and a termination date of June 1, 2026.

On March 28, 2023, the Company entered into a swap transaction with a notional amount of $ 100.0 million and a fixed rate of 3.67 %.

The swap agreement has an effective date of April 3, 2023 and a termination date of June 1, 2026.

On October 19, 2023, the Company entered into two swap transactions totaling $ 100.0 million.

The notional amounts were $ 50.0 million each with fixed rates of 4.71 % and 4.67 %.

The swap agreements have effective dates of November 1, 2023 and termination dates of June 1, 2027 and December 1, 2027, respectively.

On October 23, 2023, the Company entered into two swap transactions totaling $ 100.0 million with an aggregate fixed rate of 4.73 %.

The swap agreements have effective dates of November 1, 2023 and termination dates of May 31, 2026.

On November 9, 2023, the Company entered into a swap transaction totaling $ 75.0 million with a fixed rate of 4.54 %.

The swap agreement has an effective date of December 1, 2023 and a termination date of May 31, 2026.

As of December 31, 2024, the Company had interest rate derivatives that were designated as cash flow hedges of interest rate risk.

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EXPIRATION DECEMBER 31, 2024 EXPIRATION DECEMBER 31, 2023

January 2024 $ 200,000 1.21 % January 2023 $ 300,000 1.42 %

May 2026 275,000 3.74 % January 2024 200,000 1.21 %

June 2026 150,000 3.83 % May 2026 100,000 2.15 %

January 2024 $ 200,000 1.21 %

May 2026 $ 275,000 3.74 % May 2026 275,000 3.74 %

June 2026 150,000 3.83 % June 2026 150,000 3.83 %

December 2026 150,000 3.84 % December 2026 150,000 3.84 %

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Interest rate swaps 2022 Other Liabilities ( 853 ) Other Liabilities ( 5,067 )

Interest rate swaps 2023 Other Assets 411

Interest rate swaps 2023 Other Liabilities ( 7,357 )

Interest rate swaps 2023 Other Assets 521 Other Assets 411

Interest rate swaps 2023 Other Liabilities ( 3,310 ) Other Liabilities ( 7,357 )

Total derivatives designated as hedging instruments $ 1,101 $ ( 7,799 )

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Tabular Disclosure of the Effect of Fair Value and Cash Flow Hedge Accounting on Accumulated Other Comprehensive

Income (Loss)

The table below presents the effect of cash flow hedge accounting on Accumulated other comprehensive income (loss) as of December 31, 2023 and 2022 related to the Company's outstanding interest rate swaps.

The table below presents the effect of cash flow hedge accounting on Accumulated other comprehensive income (loss) ("AOCI") as of December 31, 2024 and 2023 related to the Company's outstanding interest rate swaps.

AMOUNT OF GAIN/(LOSS) RECOGNIZED

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Interest rate swaps 2023 7,572 ( 5,115 ) Interest expense ( 3,416 ) ( 1,829 )

Interest rate swaps 2022 4,583 ( 3,252 ) Interest expense ( 6,289 ) ( 109 )

Interest rate swaps 2023 ( 5,115 ) — Interest expense ( 1,829 ) —

Settled treasury hedges — — Interest expense 428 426

Settled interest rate swaps — — Interest expense 168 168

$ 1,463 $ 10,630 Total interest expense $ ( 14,488 ) $ 1,527

Total $ 22,809 $ 1,463 Total $ ( 13,137 ) $ ( 14,488 )

The Company estimates that an additional $ 1.4 million will be reclassified from accumulated other comprehensive loss as a net decrease to interest expense over the next 12 months.

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The tabular disclosure of fair value provides the location that derivative liabilities are presented on the Company's Consolidated Balance Sheets .

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Offsetting of Derivative Assets

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As of December 31, 2024, the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Stockholders’ Equity

The Company had no preferred shares outstanding and had common shares outstanding for the three years ended December 31, 2023, 2022, and 2021 as follows:

The Company had no preferred shares outstanding and had common shares outstanding for the years ended December 31, 2024, 2023, and 2022 as follows:

YEAR ENDED DECEMBER 31,

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Conversion of OP units to common stock 194,767 190,544 —

Shares repurchased ( 30,794,250 ) — —

Non-vested share-based awards, net of withheld shares and forfeitures 158,433 175,368 514,157

Balance, end of year 350,532,006 380,964,433 380,589,894

At-The-Market Equity Offering Program

The Company has in place an ATM equity offering program to sell shares of the Company’s common stock from time to time in at-the-market sales transactions.

The Company has equity distribution agreements with various sales agents with respect to the ATM offering program of common stock with an aggregate sales amount of up to $ 750.0 million.

As of December 31, 2023, $ 750.0 million remained available for issuance under the current ATM offering program.

Dividends Declared

During 2024, the Company declared and paid common stock dividends aggregating $ 1.24 per share ($ 0.31 per share per quarter).

On February 13, 2024, the Company declared a quarterly common stock dividend in the amount of $ 0.31 per share payable on March 14, 2024, to stockholders of record on February 26 , 2024.

On February 18, 2025, the Company declared a quarterly common stock dividend in the amount of $ 0.31 per share payable on March 19, 2025, to stockholders of record on March 3, 2025.

Authorization to Repurchase Common Stock

On May 31, 2023, the Company’s Board of Directors authorized the repurchase of up to $ 500.0 million of outstanding shares of the Company’s common stock either in the open market or through privately negotiated transactions, subject to market conditions, regulatory constraints, and other customary conditions.

The Company is not obligated under this authorization to repurchase any specific number of shares.

This authorization supersedes all previous stock repurchase authorizations.

As of the date of these Consolidated Financial Statements, the Company has not repurchased any shares of its common stock under this authorization.

During 2024, the Company repurchased 30.8 million shares of its common stock at an average price of $ 16.56 per share for a total of $ 509.8 million.

As of December 31, 2024, the Company had $ 237.0 million of authorized share repurchases remaining.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Accumulated Other Comprehensive (Loss) Income

The following table represents the changes in accumulated other comprehensive income (loss) during the years ended December 31, 2023 and 2022:

The following table represents the changes in accumulated other comprehensive (loss) income during the years ended December 31, 2024 and 2023:

INTEREST RATE SWAPS

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Amounts reclassified from accumulated other comprehensive (loss) income ( 12,954 ) ( 14,315 )

Net current-period other comprehensive (loss) income ( 12,881 ) 12,121

Net current-period other comprehensive income (loss) 9,573 ( 12,881 )

Ending balance $ ( 1,168 ) $ ( 10,741 )

The following table represents the details regarding the reclassifications from accumulated other comprehensive income (loss) during the year ended December 31, 2023 (dollars in thousands):

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The following table represents the details regarding the reclassifications from accumulated other comprehensive (loss) income during the year ended December 31, 2024 (dollars in thousands):

DETAILS ABOUT ACCUMULATED OTHER COMPREHENSIVE

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Compensation expense, included in general and administrative expense, recognized during the years ended December 31, 2024, 2023 and 2022 from the amortization of the value of shares over the vesting period issued to employees and directors was $ 31.8 million, $ 14.6 million and $ 13.9 million, respectively.

In 2024, the Company accelerated the amortization of certain outstanding awards, including in connection with the termination without cause of its CEO and CFO, totaling $ 17.8 million.

The following table represents expected amortization of the Company's non-vested shares issued as of December 31, 2024:

2 unchanged sentences

2029 and thereafter 0.4

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Executive Incentive Plan

2 unchanged sentences

For 2024, 2023 and 2022, compensation expense, included in general and administrative expense, resulting from the amortization of the Executive Incentive Plan non-vested share, RSU, and OP Unit grants to officers was approximately $ 16.8 million, $ 9.0 million, and $ 9.8 million, respectively.

In 2024, the Company accelerated the amortization of certain outstanding non-vested stock and RSU awards, including in connection with the termination without cause of its CEO and CFO, totaling $ 8.5 million.

Details of equity awards that have been issued under this plan are as follows:

• On January 4, 2023, the Company granted non-vested stock awards to its named executive officers, senior vice presidents, and first vice presidents with a grant date fair value of $ 4.1 million , which consisted of an aggregate of 205,264 shares with a ratable five-year vesting period, which will result in an annual compensation expense of $ 0.8 million for 2024, 2025, 2026 and 2027.

• On January 4, 2023, the Company granted 165,174 RSUs to certain of its non-executive senior officers.

These award are subject to a three-year performance period and if the performance criteria is met, the awards are then

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

subject to two additional years with ratable vesting of 50 % in year four and 50 % in year five.

• 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 $ 4.3 million, which consisted of an aggregate of 283,320 non-vested shares with a vesting period of five years .

• During the second quarter of 2024, the Company 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 with a vesting period of five years .

• On February 13, 2024, the Company granted an aggregate of 208,055 RSUs to members of senior management, with an aggregate grant date fair value of $ 3.5 million.

These awards are subject to a three-year performance period and if the performance criteria is met, the awards are then subject to employment for two additional years with ratable vesting of 50 % in year four and 50 % in year five.

The expense will be recognized on the straight-line basis over the five-year vesting period.

◦ Approximately 43 % of the RSU awards are subject to two market performance conditions:

relative and absolute total shareholder return ("TSR").

These components were valued using independent specialists utilizing a Monte Carlo simulation to calculate the weighted average grant date fair values of $ 24.23 for the absolute TSR component and $ 27.84 for the relative TSR component for the January 2023 grant using the following assumptions:

◦ Approximately 36 % of the RSUs vest based on relative total shareholder return ("TSR") and were valued using independent specialists.

The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $ 19.10 for the relative TSR component for the February grants using the following assumptions:

Volatility 28.0 %

Dividend assumption Accrued

Expected term in years 3 years

Expected term 3 years

Risk-free rate 4.44 %

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▪ The remaining 64 % of the RSU awards are subject to certain operating performance conditions.

With respect to the operating performance conditions of these awards, the grant date fair value was $ 20.21 based on the Company's share price on the date of grant.

With respect to the operating performance conditions of the February 2024 grants, the grant date fair value was $ 15.22 based on the Company's share price on the date of grant.

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

◦ The combined weighted average grant date fair value of the January 2023 RSUs was $ 22.55 per share.

▪ The combined weighted average grant date fair value of the February 2024 RSUs was $ 16.61 per share.

◦ On April 30, 2024, the Company granted an aggregate of 21,816 RSUs to members of senior management, with an aggregate grant date fair value of $ 0.3 million.

The expense will be recognized on the straight-line basis over the five-year vesting period.

• Approximately 36 % of the RSUs vest based on relative TSR and were valued using independent specialists.

The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $ 14.94 for the relative TSR component for the April grants using the following assumptions:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Volatility 29.0 %

Dividend assumption Accrued

Expected term 3 years

Risk-free rate 4.85 %

Stock price (per share) $ 14.23

◦ The remaining 64 % of the RSU awards are subject to certain operating performance conditions.

With respect to the operating performance conditions of the April 2024 grants, the grant date fair value was $ 14.23 based on the Company's share price on the date of grant.

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

◦ The combined weighted average grant date fair value of the April 2024 RSUs was $ 14.48 per share.

LTIP Series C Units

In January 2023, the Company modified its incentive compensation structure to award LTIP Series C units ("LTIP-C units) in the OP to named executive officers in lieu of RSUs.

The LTIP-C units were granted with three-year forward-looking performance targets, with a grant date fair value of $ 7.1 million, which consisted of an aggregate 627,547 LTIP-C units with a five-year vesting period.

On February 13, 2024, the Company granted an aggregate of 906,044 LTIP Series C units ("LTIP-C units) in the OP to its named executive officers with an aggregate grant date fair value of $ 7.5 million.

LTIP-C units are granted notionally at the maximum value of the award.

• Approximately 43 % of the LTIP-C units vest based on two market performance conditions.

Relative and absolute TSR awards containing these market performance conditions were valued using independent specialists.

The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $ 12.24 for the absolute TSR component and $ 13.98 for the relative TSR component for the January 2023 grant using the following assumption:

These awards are subject to a three-year performance period and if the performance criteria is met, the awards are then subject to two additional years of employment with ratable vesting of 50 % in year four and 50 % in year five.

The expense will be recognized on the straight-line basis over the five-year vesting period.

• Approximately 36 % of the LTIP-C units vest based on relative TSR and were valued using independent specialists.

The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $ 9.62 for the relative TSR component for the February 2024 grant using the following assumptions:

Volatility 28.0 %

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• The remaining 64 % of the LTIP-C units vest based upon certain operating performance conditions.

With respect to the operating performance conditions of the January 4, 2023 grant, the grant date fair value was $ 20.21 based on the Company's share price on the date of grant.

With respect to the operating performance conditions of the February 13, 2024 grant, the grant date fair value was $ 15.22 based on the Company's share price on the date of grant.

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

• The combined weighted average grant date fair value of the January LTIP-C units was $ 15.85 per share.

• The combined weighted average grant date fair value of the February 2024 LTIP-C units was $ 13.22 per share.

For 2024, compensation expense resulting from the amortization of LTIP-C units awarded to officers was approximately $ 8.8 million.

The Company accelerated the amortization of certain outstanding LTIP-C awards, including in connection with the termination without cause of its CEO and CFO, totaling $ 7.2 million.

Officer Incentive Program

In the first quarter of 2023 the Company granted a performance-based award to certain non-executive officers totaling approximately $ 0.7 million, which was granted in the form of 33,438 non-vested shares.

In 2024 the Company granted a performance-based award to certain non-executive officers totaling approximately $ 0.7 million, which was granted in the form of 48,490 non-vested shares.

The shares have vesting periods ranging from three to eight years with a weighted average vesting period of approximately five years .

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

For 2024, 2023 and 2022, compensation expense resulting from the amortization of these non-vested share grants awarded to officers was approximately $ 0.5 million, $ 0.6 million, and $ 0.9 million, respectively.

The Company accelerated the amortization of certain outstanding awards, including in connection with the termination without cause of its CEO and CFO, totaling $ 0.1 million.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Salary Deferral Plan

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During 2024, 2023 and 2022, the Company issued 29,902 shares, 31,792 shares and 17,381 shares, respectively, to its officers through the salary deferral plan.

For 2023, 2022 and 2021, compensation expense resulting from the amortization of non-vested share grants to officers was approximately $ 0.9 million for each year , respectively.

For 2024, 2023 and 2022, compensation expense resulting from the amortization of non-vested share grants to officers was approximately $ 1.1 million, $ 0.9 million, and $ 0.9 million, respectively.

Non-employee Directors Incentive Plan

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For each of the years 2024, 2023 and 2022, compensation expense resulting from the amortization of non-vested share-based grants to directors was approximately $ 2.4 million, $ 2.1 million, and $ 1.5 million, respectively.

• On June 5, 2023, the Company granted a non-vested stock award to six of its directors, with a grant date fair value of $ 0.7 million, which consisted of an aggregate of 42,768 non-vested shares, with a one-year vesting period.

• On June 5, 2023, the Company also granted LTIP-D units in the OP to six of its directors, with a grant fair value of $ 1.1 million, which consisted of an aggregate of 57,868 non-vested units, with a one-year vesting period.

The following table represents the summary of non-vested share-based awards (including restricted stock, RSUs, LTIP-C units and LTIP-D units) under the Incentive Plans and related information for the three years ended December 31, 2023:

• During the second quarter of 2024, the Company granted non-vested stock awards to certain of its independent directors, with a grant date fair value of $ 0.9 million, which consisted of an aggregate of 58,910 non-vested shares, with a one-year vesting period.

• During the second quarter of 2024, the Company also granted LTIP-D units in the OP to certain of its independent directors, with a grant fair value of $ 0.8 million, which consisted of an aggregate of 45,982 non-vested units, with a one-year vesting period.

The Company granted an aggregate of 51,884 non-vested shares to other members of senior management, with an aggregate grant date fair value of $ 0.9 million and a three-year vesting period.

In 2024, the Company granted 69,022 non-vested shares to its interim Chief Executive Officer with a grant date fair value of $ 1.2 million with vesting the earlier of the appointment of a permanent CEO or one-year .

The Company issued one-time non-vested share grants related to executive management transition in 2016.

For 2024, 2023, and 2022, compensation expense resulting from the amortization of these non-vested share grants to officers was approximately $ 2.2 million, $ 0.8 million, and $ 0.8 million.

The Company accelerated the amortization of these outstanding awards, including in connection with the termination without cause of its CEO and CFO, totaling $ 1.6 million.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

YEAR ENDED DECEMBER 31,

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In addition, the Company lowered the probability of achieving the operating performance goals related to the RSUs issued in 2023.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The vesting periods for the non-vested shares granted during 2024 ranged from one to eight years with a weighted-average amortization period remaining as of December 31, 2024 of approximately 3.9 years.

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The Company provides a matching contribution up to $ 2,800 per employee, subject to certain limitations.

The Company’s matching contributions were approximately $ 1.5 million for the year ended December 31, 2023, $ 1.2 million for 2022 and $ 0.7 million for 2021.

Employee Stock Purchase Plan

The outstanding options relate only to the Legacy HR Employee Stock Purchase Plan, which was terminated in November 2022.

No new options will be issued under the Legacy HR Employee Stock Purchase Plan and existing options will expire in March 2024.

During the years ended December 31, 2022 and 2021, the Company recognized in general and administrative expenses approximately $ 0.4 million, and $ 0.4 million, respectively, of compensation expense related to the annual grant of options to its employees to purchase shares under the Legacy HR Employee Stock Purchase Plan.

Cash received from employees upon exercising options under the Legacy HR Employee Stock Purchase Plan was approximately $ 0.2 million for the year ended December 31, 2023, $ 0.4 million for the year ended December 31, 2022, and $ 0.8 million for the year ended December 31, 2021.

A summary of the Legacy HR Employee Stock Purchase Plan activity and related information for the three years ended December 31, 2023 is as follows:

YEAR ENDED DECEMBER 31,

Dollars in thousands, except per share data 2023 2022 2021

Options outstanding, beginning of year 340,976 348,514 341,647

Granted — 255,960 253,200

Exercised ( 8,627 ) ( 20,246 ) ( 30,281 )

Forfeited ( 43,737 ) ( 102,619 ) ( 71,630 )

Expired ( 132,999 ) ( 140,633 ) ( 144,422 )

Options outstanding and exercisable, end of year 155,613 340,976 348,514

Weighted-average exercise price of

Options outstanding, beginning of year $ 16.38 $ 25.38 $ 24.70

Options granted during the year $ — $ 26.89 $ 25.16

Options exercised during the year $ 15.07 $ 20.97 $ 25.03

Options forfeited during the year $ 15.50 $ 21.88 $ 25.45

Options expired during the year $ 16.43 $ 23.36 $ 24.17

Options outstanding, end of year $ 12.98 $ 16.38 $ 25.38

Weighted-average fair value of options granted during the year (calculated as of the grant date) $ — $ 9.91 $ 9.05

Intrinsic value of options exercised during the year $ 23 $ 75 $ 165

Intrinsic value of options outstanding and exercisable

(calculated as of December 31)

$ 401 $ 985 $ 1,997

Exercise prices of options outstanding

(calculated as of December 31)

$ 14.65 $ 16.38 $ 25.91

Weighted-average contractual life of outstanding options (calculated as of December 31, in years) 0.3 0.8 0.8

The fair values for these options were estimated at the date of grant using a Black-Scholes options pricing model with the weighted-average assumptions for the options granted during the period noted in the following table.

The Company’s matching contributions were approximately $ 1.4 million for 2024, $ 1.5 million for 2023 and $ 1.2 million for 2022.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

free interest rate was based on the U.S.

Treasury constant maturity-nominal two-year rate whose maturity is nearest to the date of the expiration of the latest option outstanding and exercisable;

the expected dividend yield was based on the expected dividends of the current year as a percentage of the average stock price of the prior year;

the expected life of each option was estimated using the historical exercise behavior of employees;

expected volatility was based on historical volatility of the Company’s common stock;

and expected forfeitures were based on historical forfeiture rates within the look-back period.

2023 2022 2021

Risk-free interest rates — % 0.73 % 0.13 %

Expected dividend yields — % 3.97 % 4.11 %

Expected life (in years) 0 1.44 1.43

Expected volatility — % 49.0 % 48.2 %

Expected forfeiture rates — % 85 % 85 %

Earnings Per 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 Company used the treasury method to determine the dilution from the forward equity agreements during the period of time prior to settlement.

The number of weighted-average shares outstanding used in the computation of earnings per common share for the year ended December 31, 2021 included the effect from the assumed issuance of 0.7 million shares of common stock pursuant to the settlement of the forward equity agreements at the contractual price, less the assumed repurchase of the common stock at the average market price using the proceeds of approximately $ 23.1 million, adjusted for costs to borrow.

For the year ended December 31, 2021, 1,682 weighted-average incremental shares of common stock were excluded from the computation of weighted-average common shares outstanding - diluted, as the impact was anti-dilutive.

As of and for the year ended December 31, 2022, these forward equity agreements settled and consequently, the Company did not have any remaining shares subject to unsettled forward sale agreements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The table below sets forth the computation of basic and diluted earnings per common share for the three years ended December 31, 2023.

The table below sets forth the computation of basic and diluted earnings per common share for the years ended December 31, 2024, 2023, and 2022.

YEAR ENDED DECEMBER 31,

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Weighted average common shares outstanding - basic 365,553,056 378,927,871 252,356,203

Dilutive effect of forward equity shares — — —

Dilutive effect of OP Units — — 1,451,599

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Net (loss) income $ ( 663,904 ) $ ( 282,083 ) $ 40,693

Net loss attributable to non-controlling interest 3,822 204 —

Net (loss) income attributable to common stockholders $ ( 278,261 ) $ 40,897 $ 66,659

Income allocated to participating securities ( 3,122 ) ( 2,504 ) ( 2,437 )

Net loss attributable to non-controlling interest 9,419 3,822 204

Adjustment to loss attributable to non-controlling interest for legally outstanding restricted units ( 2,798 ) ( 851 ) —

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Diluted earnings per common share - net income $ ( 1.81 ) $ ( 0.74 ) $ 0.15

The effect of OP units convertible into shares totaling 4,023,679 shares and options to purchase 31,997 shares under the Company's Employee Stock Purchase Plan for the year ended December 31, 2023 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 the year.

The effect of OP units convertible into 3,652,553 shares and options to purchase 4,751 sha res under the Company's Employee Stock Purchase Plan for the year ended December 31, 2024 were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive as a result of the loss from continuing operations incurred during the year.

Commitments and Contingencies

Re/development Activity

During the year ended December 31, 2023, the Company invested $ 69.1 million and $ 20.5 million toward active development and redevelopment of properties, respectively, and $ 22.6 million toward recently completed development and redevelopment projects.

Tenant Improvements

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The Company’s investments in land held for development totaled approximately $ 52.4 million as of December 31, 2024 and $ 59.9 million as of December 31, 2023.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The current land held for development is located adjacent to certain of the Company's existing medical office buildings in Colorado, Connecticut, Florida, Georgia, Massachusetts, New York, Tennessee, Texas, and Washington.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

Security Deposits and Letters of Credit

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While Legacy HR was considered the accounting acquirer in the Merger for GAAP purposes, Legacy HR’s separate tax existence ceased with the Merger and Legacy HTA continues as the tax successor.

On a tax basis, the Company’s gross real estate assets totaled approximately $ 12.6 billion and $ 13.0 billion as of December 31, 2023 and 2022, respectively.

As of December 31, 2021, gross real estate assets on a tax basis were $ 5.0 billion for Legacy HR and $ 8.2 billion for Legacy HTA, respectively.

On a tax basis, the Company’s gross real estate assets totaled approximately $ 11.1 billion, $ 12.6 billion and $ 13.0 billion as of December 31, 2024, 2023 and 2022, respectively.

Characterization of Distributions (unaudited)

Distributions in excess of earnings and profits generally constitute a return of capital.

The following table gives the characterization of the distributions of the Company’s common stock for the three years ended December 31, 2023.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

For the three years ended December 31, 2023, there were no preferred shares outstanding.

The table below gives the characterization of the distributions of the Company’s common stock for the years ended December 31, 2024, 2023 and 2022.

For the years ended December 31, 2024, 2023 and 2022, there were no preferred shares outstanding.

As such, no dividends were distributed related to preferred shares for those periods.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

YEAR ENDED DECEMBER 31,

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The State of Texas gross margins tax on gross receipts from operations is disclosed in the table below as an income tax.

State income tax expense and state income tax payments for the three years ended December 31, 2023 are detailed in the table below:

State income tax expense and state income tax payments for the years ended December 31, 2024, 2023 and 2022 are detailed in the table below:

YEAR ENDED DECEMBER 31,

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The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practical to estimate that value.

• Cash, cash equivalents and restricted cash - The carrying amount approximates fair value.

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

• Senior unsecured notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements.

• Mortgage notes payable - The fair value is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements.

• Cash, cash equivalents and restricted cash - 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 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 receivable's collateral, which was determined based on an executed purchase and sale agreement of the underlying collateral, and therefore was classified as level 1 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.

• Senior Notes and Mortgage notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

• Interest rate swap agreements - Interest rate swap agreements are recorded in other assets on the Company's Consolidated Balance Sheets at fair value.

Fair value, using level 2 inputs, is estimated by utilizing pricing models that consider forward yield curves and discount rates.

• Interest rate swap agreements - Interest rate swap agreements are recorded in other assets/liabilities on the Company's Consolidated Balance Sheets at fair value.

Fair value is estimated by utilizing pricing models, level 2 inputs, which consider forward yield curves and discount rates.

See Note 11 for additional information.

The table below details the fair value and carrying values for our other financial instruments as of December 31, 2024 and 2023.

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Real estate notes receivable $ 127.2 $ 122.4 $ 173.6 $ 172.5

$ 173.6 $ 172.5 $ 99.6 $ 99.6

1 Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.

2 Fair value for senior notes includes accrued interest as of December 31, 2024.

Segment Reporting

The Company’s current business strategy with a single reportable segment related to its medical outpatient properties.

Within this portfolio, the Company owns, leases, acquires, invests in joint ventures, manages, finances, develops and redevelops its properties and reports the operating results in the accompanying Consolidated Financial Statements.

The CODM assess performance and allocate resources based on consolidated net income (loss) as reported on the Company's Statements of Operations.

The Company uses net income to monitor expected versus actual results to assess the segment's performance.

The measure of the Company's reportable segment assets is reported on the Company's Consolidated Balance Sheets as total assets.

Pursuant to ASU 2023-07, Segment Reporting (Topic 280), public entities are required to disclose more detailed information about significant reportable segment expenses that are regularly provided to the CODM.

The table below details the significant expenses for the years ended December 31, 2024, 2023 and 2022.

YEAR ENDED DECEMBER 31,

Dollars in thousands 2024 2023 2022

Significant Segment Expenses:

Property taxes $ 126,692 $ 137,634 $ 98,101

Personnel 92,935 94,775 79,222

Utilities 97,889 101,840 65,999

Maintenance 110,962 117,969 80,527

Totals $ 428,478 $ 452,218 $ 323,849

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, cont.

The following schedule reconciles net income to segment expenses.

YEAR ENDED DECEMBER 31,

Dollars in thousands 2024 2023 2022

Revenue $ 1,268,316 $ 1,343,769 $ 932,637

Property taxes ( 126,692 ) ( 137,634 ) ( 98,101 )

Personnel ( 92,935 ) ( 94,775 ) ( 79,222 )

Utilities ( 97,889 ) ( 101,840 ) ( 65,999 )

Maintenance ( 110,962 ) ( 117,969 ) ( 80,527 )

Other segment expenses ( 128,087 ) ( 106,624 ) ( 72,923 )

Transaction costs ( 3,122 ) ( 2,026 ) ( 3,229 )

Merger-related costs — 1,952 ( 103,380 )

Depreciation and amortization ( 675,152 ) ( 730,709 ) ( 453,082 )

Gain on sales of real estate properties and other assets 109,753 77,546 270,271

Interest expense ( 242,425 ) ( 258,584 ) ( 146,691 )

(Loss) gain on extinguishment of debt ( 237 ) 62 ( 2,401 )

Impairment of real estate properties and credit loss reserves ( 313,547 ) ( 154,912 ) ( 54,427 )

Impairment of goodwill ( 250,530 ) — —

Equity loss from unconsolidated joint ventures ( 135 ) ( 1,682 ) ( 687 )

Interest and other (expense) income, net ( 260 ) 1,343 ( 1,546 )

Net (loss) income $ ( 663,904 ) $ ( 282,083 ) $ 40,693

Other segment expenses are primarily related to administrative costs, travel, legal, technology, and insurance.

Related-Party Transactions

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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 8. Financial Statements and Supplementary Data