What changed in this filing

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Item 1. Financial Statements

2025-05-01 compared with 2024-10-30 · 223 added, 334 removed, 500 unchanged (53% of the section changed)

3 unchanged sentences

Amounts in thousands, except per share data

SEPTEMBER 30, 2024

MARCH 31, 2025

DECEMBER 31, 2024

15 unchanged sentences

Investments in unconsolidated joint ventures 470,418 473,122

Goodwill — 250,530

Other assets, net 522,920 507,496

Total assets $ 10,496,269 $ 10,650,923

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND STOCKHOLDERS' EQUITY

Notes and bonds payable $ 4,732,618 $ 4,662,771

13 unchanged sentences

1,000,000 shares authorized;

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

350,996 and 350,532 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 9,121,269 9,118,229

5 unchanged sentences

Total equity 5,142,215 5,301,096

Total liabilities and equity $ 11,244,585 $ 12,637,131

Total liabilities, redeemable non-controlling interests, and stockholders' equity $ 10,496,269 $ 10,650,923

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, are an integral part of these financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Operations

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

For the Three Months Ended March 31, 2025 and 2024

Amounts in thousands, except per share data

THREE MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

2024 2023 2024 2023

Rental income $ 288,857 $ 318,076

5 unchanged sentences

Transaction costs 1,011 395

Merger-related costs — 7,450 — ( 3,366 )

Depreciation and amortization 150,969 178,119

3 unchanged sentences

Interest expense ( 54,812 ) ( 61,054 )

Gain on extinguishment of debt — 62 — 62

Impairment of real estate properties and credit loss reserves ( 12,081 ) ( 15,937 )

13 unchanged sentences

Condensed Consolidated Statements of Comprehensive Loss

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

For the Three Months Ended March 31, 2025 and 2024

Amounts in thousands

THREE MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

2024 2023 2024 2023

Net loss $ ( 45,389 ) $ ( 315,220 )

10 unchanged sentences

Condensed Consolidated Statements of Equity and Redeemable Non-Controlling Interests

For the Three Months Ended September 30, 2024 and 2023

Amounts in thousands, except per share data

Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Cumulative

Net Income Cumulative

Dividends Total

Stockholders’

Equity Non-controlling Interests Total

Equity Redeemable Non-controlling Interests

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

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

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

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

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

Reclassification adjustments for gains included in net income (interest expense)

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

Losses arising during the period on interest rate swaps

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

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

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

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

Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Cumulative

Net Income Cumulative

Dividends Total

Stockholders’

Equity Non-controlling Interests Total

Equity Redeemable Non-controlling Interests

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

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

Common stock redemptions — 8 — — — 8 — 8 —

Share-based compensation 1 2,555 — — — 2,556 — 2,556 —

Net loss — — — ( 67,844 ) — ( 67,844 ) ( 760 ) ( 68,604 ) —

Reclassification adjustments for gains included in net income (interest expense)

— — ( 4,118 ) — — ( 4,118 ) ( 50 ) ( 4,168 ) —

Gains arising during the period on interest rate swaps

— — 11,869 — — 11,869 147 12,016 —

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

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

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

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

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

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

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Equity and Redeemable Non-Controlling Interests

For the Nine Months Ended September 30, 2024 and 2023

For the Three Months Ended March 31, 2025 and 2024

Amounts in thousands, except per share data

9 unchanged sentences

Balance at December 31, 2024 $ 3,505 $ 9,118,229 $ ( 1,168 ) $ 374,309 $ ( 4,260,014 ) $ 5,234,861 $ 66,235 $ 5,301,096 $ 4,778

Issuance of common stock, net of issuance costs — 104 — — — 104 — 104 —

Common stock redemptions — ( 215 ) — — — ( 215 ) — ( 215 ) —

Conversion of OP Units to common stock 2 3,410 — — — 3,412 ( 3,412 ) — —

Share-based compensation 5 3,023 — — — 3,028 — 3,028 —

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

Redemption of non-controlling interest — — — — — — ( 330 ) ( 330 ) —

2 unchanged sentences

— — ( 928 ) — — ( 928 ) ( 13 ) ( 941 ) —

Gains arising during the period on interest rate swaps

Losses arising during the period on interest rate swaps

— — ( 5,110 ) — — ( 5,110 ) ( 68 ) ( 5,178 ) —

Contributions from redeemable non-controlling interests — — — — — — — — 13

Adjustments to redemption value of redeemable non-controlling interests — 232 — — — 232 — 232 ( 235 )

1 unchanged sentence

— — — — ( 108,725 ) ( 108,725 ) ( 1,279 ) ( 110,004 ) —

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

Balance at March 31, 2025 $ 3,510 $ 9,121,269 $ ( 7,206 ) $ 329,436 $ ( 4,368,739 ) $ 5,078,270 $ 63,945 $ 5,142,215 $ 4,627

Stock Additional

10 unchanged sentences

Common stock redemptions — ( 135 ) — — — ( 135 ) — ( 135 ) —

Conversion of OP Units to common stock 2 3,410 — — — 3,412 ( 3,412 ) — —

Share-based compensation 3 3,559 — — — 3,562 — 3,562 —

8 unchanged sentences

— — — — ( 118,406 ) ( 118,406 ) ( 1,427 ) ( 119,833 ) —

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

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

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2024 and 2023

For the Three Months Ended March 31, 2025 and 2024

Amounts in thousands

OPERATING ACTIVITIES

NINE MONTHS ENDED

September 30,

THREE MONTHS ENDED

Net loss $ ( 45,389 ) $ ( 315,220 )

6 unchanged sentences

Gain on sales of real estate properties and other assets ( 2,904 ) ( 22 )

Gain on extinguishment of debt — ( 62 )

Impairment of real estate properties and credit loss reserves 12,081 15,937

Impairment of goodwill — 250,530

Equity loss from unconsolidated joint ventures 360 1,253

Equity (income) loss from unconsolidated joint ventures ( 1 ) 422

Distributions from unconsolidated joint ventures 3,557 1,335

6 unchanged sentences

INVESTING ACTIVITIES

Acquisitions of real estate — ( 48,106 )

Development of real estate ( 3,414 ) ( 8,383 )

6 unchanged sentences

Proceeds from notes receivable repayments 15,211 277

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

Net cash used in investing activities ( 38,833 ) ( 58,561 )

FINANCING ACTIVITIES

Net borrowings (repayments) on unsecured credit facility 206,000 ( 149,000 )

Repayment on term loan ( 250,000 ) —

Net borrowings on unsecured credit facility 94,000 120,000

Repayment on term loans ( 35,000 ) —

Repayments of notes and bonds payable ( 345 ) ( 17,326 )

2 unchanged sentences

Common stock redemptions ( 215 ) ( 318 )

Common stock repurchases ( 423,070 ) —

Distributions to non-controlling interest holders ( 1,315 ) ( 1,199 )

Redemption of non-controlling interest ( 330 ) —

Debt issuance and assumption costs ( 563 ) ( 529 )

Payments made on finance leases ( 135 ) ( 110 )

Net cash used in financing activities ( 52,149 ) ( 17,118 )

Increase (decrease) in cash and cash equivalents 460 ( 36,293 )

(Decrease) increase in cash and cash equivalents ( 43,194 ) 473

Cash and cash equivalents at beginning of period 68,916 25,699

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

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

Cash and cash equivalents at end of period $ 25,722 $ 26,172

Supplemental Cash Flow Information NINE MONTHS ENDED

September 30,

Supplemental Cash Flow Information

Interest paid $ 67,283 $ 73,518

1 unchanged sentence

Invoices accrued for construction, tenant improvements and other capitalized costs $ 26,828 $ 35,777

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

Capitalized interest $ 857 $ 942

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

3 unchanged sentences

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

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

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

As of March 31, 2025, the Company had gross investments of approximately $ 11.8 billion in 587 cons olidated real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property, excluding held for sale assets.

In addition, as of March 31, 2025, the Company had a weighted average ownership interest of approxima tel y 30 % in 63 real estate properties held in unconsolidated joint ventures.

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

The Company's consolidated re al estate properties are located in 33 states and total approximately 34.3 million square feet.

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

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

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

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

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

The Company provided leasing and property management services to 92 % of its portfolio nationwide as of March 31, 2025.

The Company is structured as an umbrella partnership REIT under which substantially all of its business is conducted through the operating partnership, Healthcare Realty Holdings, L.P.

(the “OP”) , the day-to-day management of which is exclusively controlled by the Company.

As of March 31, 2025, the Company own ed 98.7 % of the issued and outstanding units of the OP (“OP Units”), with other investors owning the remaining 1.3 % of the OP's issued and outstanding units.

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

10 unchanged sentences

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

The Company identifies the

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

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

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

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

The Company may change its original assessment of a VIE upon subsequent events, such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk, the disposition of all or a portion of an interest held by the primary beneficiary, or changes in facts and circumstances that impact the power to direct activities of the VIE that most significantly impacts economic performance.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

that impact the power to direct activities of the VIE that most significantly impacts economic performance.

The Company performs this analysis on an ongoing basis.

1 unchanged sentence

All intercompany balances and transactions are eliminated in consolidation.

For entities in which the Company owns less than 100 % of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements.

For an entity in which the Company owns less than 100 % of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entity's activities based upon the terms of the entity's ownership agreements.

The OP is 98.7 % owned by the Company.

2 unchanged sentences

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

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

As of March 31, 2025, there were approximately 4.7 million OP Units, 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.

Accordingly, the Company consolidates its interests in the OP.

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

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

(dollars in thousands) September 30, 2024

Total real estate properties, net

As of March 31, 2025, 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 March 31, 2025 and December 31, 2024:

(dollars in thousands) March 31, 2025 December 31, 2024

Total real estate investments, net

$ 101,439 $ 103,933

Cash and cash equivalents 417 159

Other assets, net

Assets held for sale, net

Accrued expenses and other liabilities

Liabilities held for sale, net

$ 106,921 $ 108,145

Notes and bonds payable

$ 66,083 $ 60,170

Accounts payable and accrued liabilities 1,574 2,786

Other liabilities 156 45

Total liabilities

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

$ 67,813 $ 63,001

As of March 31, 2025, the Company had four unconsolidated VIEs consisting of three notes receivable and one joint venture.

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

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

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

(dollars in thousands) ORIGINATION DATE LOCATION SOURCE CARRYING AMOUNT MAXIMUM EXPOSURE TO LOSS

2021 Houston, TX 1

Notes receivable $ 20,500 $ 20,500

2021 Charlotte, NC 1

Notes receivable 7,285 7,332

Joint venture 57,955 57,955

1 Assumed mortgage notes receivable in connection with the Merger.

2021 Charlotte, NC Note receivable 7,441 7,441

Equity method 55,199 55,199

Note receivable 9,691 16,729

Note receivable 1 4,500

1 Includes investments in seven properties.

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

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

As of March 31, 2025, the Company's unconsolidated joint venture arrangement was accounted for using the equity method of accounting as the Company exercised significant influence over but did not control this entity.

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

2 unchanged sentences

Actual results may differ from those estimates.

Segment Reporting

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

The Company is managed as one operating segment, rather than multiple operating segments, 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 9 for additional information on segment reporting.

Redeemable Non-Controlling Interests

4 unchanged sentences

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

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

As of March 31, 2025, the Company had redeemable non-controlling interests of $ 4.6 million.

Asset Impairment

5 unchanged sentences

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

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

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

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

Goodwill Impairment

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.

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

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

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 Condensed Consolidated Statements of Operations.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

During the three months ended March 31, 2025, the Company recognized real estate impairments totaling $ 10.2 million as a result of completed and planned disposition activity.

As of March 31, 2025, two real estate properties totaling $ 0.9 million were measured at fair value using level 3 fair value hierarchy.

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

Investments in Leases - Financing Receivables, Net

1 unchanged sentence

Leases, for transactions in which the Company enters into a contract to acquire an asset and leases it back to the seller (i.e., a sale leaseback transaction), control of the asset is not considered to have transferred when the seller-lessee has a purchase option.

As a result, the Company does not recognize the underlying real estate asset but instead recognizes a financial asset in accordance with ASC Topic 310:

As a result, the Company does not recognize the underlying

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

real estate assets but instead recognizes a financial asset in accordance with ASC Topic 310:

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

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

(dollars in thousands) CARRYING VALUE AS OF

ORIGINATION DATE LOCATION INTEREST RATE MARCH 31, 2025 DECEMBER 31, 2024

May 2021 Poway, CA 5.69 % $ 116,438 $ 116,304

November 2021 Columbus, OH 6.48 % 7,375 7,367

$ 123,813 $ 123,671

Real Estate Notes Receivable

1 unchanged sentence

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

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

As of March 31, 2025, real estate notes receivable, net, which are included in Other assets on the Company's Condensed Consolidated Balance Sheets, totaled $ 117.8 million.

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

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

MARCH 31, 2025 INTEREST RECEIVABLE (OTHER ASSETS) ALLOWANCE FOR CREDIT LOSSES FAIR VALUE DISCOUNT AND FEES CARRYING VALUE as of MARCH 31, 2025

Mezzanine loans

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

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

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

3/20/2025 3/19/2030 13.00 % 8,500 — — — — —

19,000 6,001 38 — — 6,039

Mortgage loans

2 unchanged sentences

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 35,721 179 — ( 29 ) 35,871

5/17/2022 2/27/2026 6.00 % 65,000 37,661 191 — ( 18 ) 37,834

California 3/30/2023 3/29/2026 6.00 % 45,000 45,000 188 — — 45,188

2 unchanged sentences

3/20/2025 3/19/2030 6.80 % 5,400 5,400 — — — 5,400

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

The reserve amount consists of approximately $ 10.7 million of principal and approximately $ 0.5 million of interest.

Additionally, the maturity date on this mortgage loan was extended to December 2, 2024.

176,979 126,166 2,433 ( 16,801 ) ( 18 ) 111,780

$ 195,979 $ 132,167 $ 2,471 $ ( 16,801 ) $ ( 18 ) $ 117,819

1 In March 2025, the Company entered an agreement to finance $ 8.5 million for a property in Green Bay, WI.

As of March 31, 2025, the loan has not been funded.

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.

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 March 31, 2025, and is working with the borrower on satisfaction of the mortgage loan.

4 In April 2025, this loan was repaid in full.

5 In March 2025, the Company provided seller financing of $ 5.4 million in connection with the sale of a real estate property in Houston, TX.

Allowance for Credit Losses

3 unchanged sentences

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

The determination of the credit allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments.

The Company evaluates the collectability of loan receivables based on a combination of credit quality indicators, including, but not limited to, payment status, historical loan charge-offs, financial strength of the borrower and guarantors, and nature, extent, and value of the underlying collateral.

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

The determination of the credit allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

A loan is considered to have deteriorated credit quality when, based on current information and events, it is probable that the Company will be unable to collect all amounts due as scheduled according to the contractual terms of the loan agreement.

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

3 unchanged sentences

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

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

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

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

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

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

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

Dollars in thousands THREE MONTHS ENDED MARCH 31, 2025 TWELVE MONTHS ENDED DECEMBER 31, 2024

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

Credit loss reserves — 59,563

Recoveries — ( 4,000 )

Write-off — ( 43,958 )

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

1 unchanged sentence

Income from Lease Financing Receivables

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

The Company recognized the related income from two financing receivables totaling $ 2.0 million and $ 2.1 million for the three months ended March 31, 2025 and 2024, respectively, based on an imputed interest rate over the terms of the applicable lease.

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

3 unchanged sentences

Income from Real Estate Notes Receivable

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

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

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

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

The Company recognized interest income related to real estate notes receivable of $ 1.8 million and $ 2.4 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the Company has two loans on non-accrual status.

Revenue from Contracts with Customers (ASC Topic 606)

3 unchanged sentences

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

2 unchanged sentences

THREE MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

in thousands 2025 2024

3 unchanged sentences

$ 6,389 $ 4,191

$ 5,020 $ 4,661 $ 13,533 $ 13,508

1 Includes the recovery of certain expenses under the financing receivable as outlined in the management agreement.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The Company’s major types of revenue that are accounted for under Topic 606 that are listed above are all accounted for as the performance obligation is satisfied.

1 unchanged sentence

New Accounting Pronouncements

On November 27, 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting ( Topic 280) .

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;

(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 annual reporting periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expenses, which 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 other than compliance with these new disclosure requirements, which will begin with the Company's Annual Report on Form 10-K for the year ending December 31, 2024.

The Company is evaluating the impact of the adoption of this ASU on its consolidated financial statements and compliance with these new disclosure requirements will begin with the Company's Annual Report on Form 10-K for the year ended December 31, 2027.

Real Estate Investments

2025 Acquisition Activity

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

The Company had no real estate acquisition activity for the three months ended March 31, 2025.

Unconsolidated Joint Ventures

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

The Company's investment in and income (losses) recognized for the three months ended March 31, 2025 and 2024 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below:

THREE MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

Dollars in thousands 2025 2024

1 unchanged sentence

New investment during the period 852 —

44,332 — 110,879 3,824

Equity income (loss) recognized during the period 1 ( 422 )

1 unchanged sentence

Investments in unconsolidated joint ventures, end of period $ 470,418 $ 309,754

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

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

retained a 20 % ownership interest.

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

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

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

2025 Real Estate Asset Dispositions

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

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

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

Greensboro/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

The following table details the Company's dispositions for the three months ended March 31, 2025.

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

Boston, MA 2/7/25 $ 4,500 $ ( 135 ) $ — $ 4,365 $ 4,325 $ 15 $ 25 30,304

2/14/25 8,600 ( 2,144 ) — 6,456 7,948 113 ( 1,605 ) 69,715

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

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

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

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

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

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

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

The net proceeds to the Company related to these dispositions totaled $ 343.1 million.

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

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

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

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

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

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

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

Dollars in thousands Date Disposed Sale Price Square Footage

Houston, TX 2

3/20/25 15,000 ( 4,087 ) ( 5,400 ) 5,513 14,343 347 ( 3,777 ) 127,933

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

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

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

Salt Lake City, UT 2

10/24/24 30,712 112,192

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

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

Total $ 151,032 $ 626,686

Total dispositions $ 28,100 $ ( 6,366 ) $ ( 5,400 ) $ 16,334 $ 26,616 $ 475 $ ( 5,357 ) 227,952

1 Includes two medical outpatient properties.

2 The Company provided seller financing of approximately $ 5.4 million in connection with this sale.

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Assets Held for Sale

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

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

Dollars in thousands September 30, 2024 December 31, 2023

The Company had two properties classified as assets held for sale as of March 31, 2025, and three properties classified as assets held for sale as of December 31, 2024.

The table below reflects the assets and liabilities classified as held for sale as of March 31, 2025 and December 31, 2024:

Dollars in thousands March 31, 2025 December 31, 2024

Balance Sheet data:

2 unchanged sentences

Lease intangibles 2,056 3,286

Personal property 65 —

Land held for development 5,000 —

177,491 9,646

Accumulated depreciation ( 3,390 ) ( 5,275 )

Real estate assets held for sale, net 1

143,494 8,733

Cash and cash equivalents 3,358 —

Operating lease right-of-use assets 3,160 —

Other assets, net 236 617

1 unchanged sentence

Accounts payable and accrued liabilities $ 259 $ 694

Operating lease liabilities 2,741 —

Other liabilities 163 589

Liabilities of assets held for sale $ 422 $ 1,283

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

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

1 Net real estate assets held for sale include the impact of $ 2.5 million of impairment charges for the three months ended March 31, 2025.

Lessor Accounting

8 unchanged sentences

Variable payments are recognized in the period earned.

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

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

Lease income for the Company's operating leases, recognized for the three months ended March 31, 2025 and 2024, was $ 288.9 million and $ 318.1 million, respectively.

Future lease payments under the non-cancelable operating leases, excluding any reimbursements and one sales-type lease, as of March 31, 2025, were as follows:

Dollars in thousands OPERATING

1 unchanged sentence

2030 and thereafter 1,592,445

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Lessee Accounting

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

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

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

As of March 31, 2025, the Company had 215 ground leases associated with properties covering 16.1 million square feet.

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

1 unchanged sentence

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

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

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

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

The Company had 73 prepaid ground leases as of March 31, 2025.

The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $ 0.3 million of the Company's rental expense for each of the three months ended March 31, 2025 and 2024.

The Company’s future lease payments (primarily for its 142 non-prepaid ground leases) as of March 31, 2025, were as follows:

Dollars in thousands OPERATING FINANCING

8 unchanged sentences

Lease liabilities $ 224,117 $ 72,585

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

The following table provides details of the Company's total lease expense for the three months ended March 31, 2025 and 2024:

THREE MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

Dollars in thousands 2025 2024

10 unchanged sentences

Financing cash flows outflows related to financing leases $ 134 $ 110

Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,294 $ — $ 3,855 $ —

Weighted-average years remaining lease term (excluding renewal options) - operating leases 44.0 45.8

2 unchanged sentences

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Notes and Bonds Payable

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

The table below details the Company’s notes and bonds payable as of March 31, 2025 and December 31, 2024.

MATURITY DATE BALANCE 1 AS OF

14 unchanged sentences

1/28 298,812 298,708 5.37 %

$ 300 million Unsecured Term Loan

1/28 298,603 298,288 6.24 %

Senior Notes due 2025 5/25 249,967 249,868 4.12 %

11 unchanged sentences

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

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

3 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.

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

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

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

Changes in Debt Structure

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 balance of $ 11.3 million.

The mortgage note encumbered a 63,012 square foot property in California .

On February 1, 2024, the Company repaid in full at maturity a mortgage note payable bearing interest at a rate of 4.12 % per annum with an outstanding principal balance of $ 5.6 million.

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

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

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

2 As of March 31, 2025, the Company had $ 1.4 billion available to be drawn on its $ 1.5 billion Unsecured Credit Facility.

3 In January 2025, the Company repaid $ 25 million of the $ 200 million Unsecured term Loan.

4 In January 2025, the Company repaid $ 10 million of the $ 300 million Unsecured term Loan.

Subsequent Debt Activity

In April 2025, the Company exercised its second of two options to extend the maturity date of the $ 200 million Unsecured Term Loan due May 2025 to January 2026 for a fee of approximately $ 0.1 million.

The loan also was amended to include a four-month extension option, resulting in a latest final maturity in May 2026.

On May 1, 2025, the Company repaid its Senior Notes due 2025 at maturity including $ 250 million of principal and $ 4.8 million of accrued interest.

Derivative Financial Instruments

7 unchanged sentences

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements.

To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.

To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.

Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

Such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

For derivatives designated, and that qualify, as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings.

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

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

As of March 31, 2025, the Company had 15 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

AMOUNT WEIGHTED

5 unchanged sentences

$ 1,075,000 3.92 %

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

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

BALANCE AT SEPTEMBER 30, 2024

In thousands BALANCE SHEET LOCATION FAIR VALUE

Derivatives designated as hedging instruments

Interest rate swaps Other liabilities $ ( 16,847 )

Interest rate swaps Other assets $ 2,094

The table below presents the fair value of the Company's derivative financial instruments and their classification on the Condensed Consolidated Balance Sheet as of March 31, 2025 and December 31, 2024.

AS OF MARCH 31, 2025 AS OF DECEMBER 31, 2024

In thousands BALANCE SHEET LOCATION FAIR VALUE BALANCE SHEET LOCATION FAIR VALUE

Interest rate swaps 2019 Other Assets $ 1,848 Other Assets $ 2,493

Interest rate swaps 2022 Other Assets 188 Other Assets 2,250

Interest rate swaps 2022 Other Liabilities ( 3,144 ) Other Liabilities ( 853 )

Interest rate swaps 2023 Other Assets 201 Other Assets 521

Interest rate swaps 2023 Other Liabilities ( 4,261 ) Other Liabilities ( 3,310 )

Total derivatives designated as hedging instruments $ ( 5,168 ) $ 1,101

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

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

(GAIN)/LOSS RECOGNIZED IN

AOCI ON DERIVATIVE

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

AOCI INTO INCOME

three months ended September 30,

In thousands 2024 2023 2024 2023

Interest rate swaps $ 20,662 $ ( 12,016 ) Interest expense $ ( 3,790 ) $ ( 4,317 )

Settled treasury hedges — — Interest expense 107 107

Settled interest rate swaps — — Interest expense 42 42

$ 20,662 $ ( 12,016 ) Total interest expense $ ( 3,641 ) $ ( 4,168 )

The table below presents the effect of cash flow hedge accounting on AOCI during the three months ended March 31, 2025 and 2024 related to the Company's outstanding interest rate swaps.

(GAIN)/LOSS RECOGNIZED IN

AOCI ON DERIVATIVE

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

three months ended March 31, (GAIN)/LOSS RECLASSIFIED FROM

AOCI INTO INCOME

nine months ended September 30,

three months ended March 31,

In thousands 2025 2024 2025 2024

3 unchanged sentences

$ 5,178 $ ( 19,611 ) Total interest expense $ ( 941 ) $ ( 3,865 )

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

The Company estimates that an additional $ 0.2 million will be reclassified from accumulated other comprehensive loss as a net decrease to interest expense over the next 12 months.

Credit-risk-related Contingent Features

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

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

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

The Company has agreements with each of its derivative counterparties that contain a provision that provides if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

As of March 31, 2025, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $ 5.2 million .

As of March 31, 2025, the Company had not posted any collateral related to these agreements and was not in breach of any agreement provisions.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Commitments and Contingencies

2 unchanged sentences

The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Development and Redevelopment Activity

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

Stockholders' Equity

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

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

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the three months ended March 31, 2025, and the twelve months ended December 31, 2024:

THREE MONTHS ENDED MARCH 31, 2025 TWELVE MONTHS ENDED DECEMBER 31, 2024

Balance, beginning of period 350,532,006 380,964,433

5 unchanged sentences

Common Stock Dividends

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

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

During the three months ended March 31, 2025, the Company declared and paid common stock dividends totaling $ 0.31 per share.

On May 1, 2025, the Company declared a quarterly common stock dividend in the amount of $ 0.31 per share payable on May 23, 2025 to stockholders of record on May 12, 2025.

Common Stock Repurchases

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.

In April 2024, the Company repurch ased 2,966,764 shares of its common stock at a weighted average price of $ 14.07 for a total of $ 41.7 million under this authorization.

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

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

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

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

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

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

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

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

As of December 31, 2024, the Company had repurchased 3,679,162 shares for $ 63.0 million under this authorization.

The Company has not repurchased shares in 2025.

As of March 31, 2025, the Company had $ 237.0 million remaining under this authorization.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

2 unchanged sentences

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

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

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

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2025 and 2024.

THREE MONTHS ENDED MARCH 31,

Dollars in thousands, except per share data 2025 2024

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Adjustment to loss attributable to non-controlling interest for legally outstanding restricted units ( 17 ) ( 1,341 )

Net loss applicable to common stockholders - basic $ ( 94,132 ) $ ( 68,509 ) $ ( 552,651 ) $ ( 239,718 )

Net loss applicable to common stockholders - basic and diluted $ ( 45,502 ) $ ( 312,870 )

Basic earnings per common share - net loss $ ( 0.13 ) $ ( 0.82 )

Diluted earnings per common share - net loss $ ( 0.13 ) $ ( 0.82 )

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

The effect of OP Units redeemable for 3,665,625 shares of common stock for the three months ended March 31, 2025 were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during those periods.

Stock Incentive Plan

The Company's stock incentive plan ("Incentive Plan") permits the grant of incentive awards to its employees and directors in any of the following forms:

The Company's stock incentive plan (the "Incentive Plan") permits the grant of incentive awards to its employees and directors in any of the following forms:

options, stock appreciation rights, restricted stock, restricted or deferred stock units, performance awards, dividend equivalents, or other stock-based awards, including units in the OP.

Equity Incentive Plans

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

• Restricted Stock

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

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

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

• Restricted Stock Units ("RSUs")

• 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 and a five-year vesting period.

During the three months ended March 31, 2025, the Company made the following equity awards under the Incentive Plan:

• During the first quarter of 2025, 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 $ 7.9 million, which consisted of an aggregate of 477,226 non-vested shares of common stock with vesting periods ranging from three to eight years .

• On February 11, 2025, the Company granted an aggregate of 275,735 restricted stock units ("RSUs") to members of senior management, subject to a three-year performance period, with an aggregate grant date fair value of $ 5.4 million.

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 $ 19.47 for the February 2025 grant using the following assumptions:

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

• 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 and a five-year vesting period.

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 2024 grant using the following assumptions:

Volatility 28.0 %

3 unchanged sentences

Stock price (per share) $ 16.17

The remaining 64 % of the RSUs vest based upon certain operating performance conditions.

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.

• LTIP Series C Units

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 three-year forward-looking performance targets, a five-year vesting period and an aggregate grant date fair value of $ 7.5 million.

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:

The Company records amortization expense based on the Monte Carlo simulation throughout the performance period.

• On February 11, 2025, the Company granted an aggregate of 166,976 LTIP Series C units ("LTIP-C units") in the OP to its named executive officers with three-year forward-looking performance targets, a three-year vesting period and an aggregate grant date fair value of $ 1.6 million.

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 $ 9.88 for the February 2025 grant using the following assumptions:

Volatility 28.0 %

3 unchanged sentences

Stock price (per share) $ 16.17

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

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

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

2024 2023 2024 2023

The Company records amortization expense based on the Monte Carlo simulation throughout the performance period.

The following table represents the summary of non-vested share-based awards under the Incentive Plan for the three months ended March 31, 2025, and 2024:

THREE MONTHS ENDED MARCH 31,

Share-based awards, beginning of period 1,799,737 2,615,562

4 unchanged sentences

Share-based awards, end of period 2,619,942 4,043,154

1 LTIP-C units are issued at the maximum possible value of the award and are reflected as such in this table until the performance conditions have been satisfied and the exact number of awards are determinable.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

1 LTIP-C units are issued at the maximum number of units of the award and are reflected as such in this table until the performance conditions have been satisfied, and the exact number of awards are determinable.

During the three months ended March 31, 2025 and 2024, the Company withheld 13,063 and 8,228 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested.

The following table represents expected amortization of the Company's non-vested awards issued as of March 31, 2025:

Dollars in millions FUTURE AMORTIZATION

1 unchanged sentence

2029 and thereafter 0.6

Subsequent Activity

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

On April 15, 2025, the Company granted the following awards to it's CEO:

• Non-vested stock awards with a grant date fair value of $ 5.7 million, which consisted of 366,242 non-vested shares of common stock with a vesting period of four years .

• Non-vested stock awards with a grant date fair value of $ 1.2 million, which consisted of 74,522 non-vested shares of common stock with a vesting period of three years .

• LTIP Series C units in the OP with three-year forward-looking performance targets and a three-year vesting period, which consisted of 347,770 units with an approximate grant date fair value of $ 3.9 million.

Fair Value of Financial Instruments

1 unchanged sentence

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

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

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

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.

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

• Interest rate swap agreements - Interest rate swap agreements are recorded in other assets/liabilities on the Company's Condensed 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 5 for additional information.

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

September 30, 2024 December 31, 2023

The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable as of March 31, 2025, and December 31, 2024:

March 31, 2025 December 31, 2024

Dollars in millions CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE

3 unchanged sentences

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 March 31, 2025.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Segment Reporting

The Company is a REIT that owns, leases, acquires, invests in joint ventures, manages, finances, develops and redevelops its medical outpatient properties and reports the operating results in the accompanying Condensed Consolidated Financial Statements as one reportable segment.

The CODM assesses performance and allocates resources based on consolidated net income (loss) as reported on the Company's Condensed Consolidated Statements of Operations.

The Company uses net income (loss) 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 Condensed 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 three months ended March 31, 2025, and 2024.

THREE MONTHS ENDED MARCH 31,

Dollars in thousands 2025 2024

Significant Segment Expenses:

Property taxes $ 28,810 $ 32,929

Personnel 24,379 24,619

Utilities 21,951 24,082

Maintenance 28,747 29,639

Totals $ 103,887 $ 111,269

The following schedule reconciles net loss to segment expenses.

THREE MONTHS ENDED MARCH 31,

Dollars in thousands 2025 2024

Revenue $ 298,977 $ 326,805

Property taxes ( 28,810 ) ( 32,929 )

Personnel ( 24,379 ) ( 24,619 )

Utilities ( 21,951 ) ( 24,082 )

Maintenance ( 28,747 ) ( 29,639 )

Other segment expenses 1

( 24,606 ) ( 24,596 )

Transaction costs ( 1,011 ) ( 395 )

Depreciation and amortization ( 150,969 ) ( 178,119 )

Gain on sales of real estate properties and other assets 2,904 22

Interest expense ( 54,812 ) ( 61,054 )

Impairment of real estate properties and credit loss reserves ( 12,081 ) ( 15,937 )

Impairment of goodwill — ( 250,530 )

Equity income (loss) from unconsolidated joint ventures 1 ( 422 )

Interest and other (expense) income, net 95 275

Net loss $ ( 45,389 ) $ ( 315,220 )

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

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

What changed 10-Q

Item 1. Financial Statements