What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-31 compared with 2025-08-01 · 128 added, 115 removed, 354 unchanged (41% of the section changed)

41 unchanged sentences

• The Company's swap agreements may not effectively reduce its exposure to changes in interest rates;

• The Company has entered into joint venture agreements that limit its flexibility with respect to jointly owned properties and expects to enter into additional such agreements in the future;

• The Company has entered into joint venture agreements that limit its flexibility with respect to jointly owned properties and may enter into additional such agreements in the future;

federal income tax treatment of the cash that the Company might receive from cash settlement of a forward equity agreement is unclear and could jeopardize the Company's ability to meet the REIT qualification requirements;

16 unchanged sentences

The Company’s primary sources of cash include rent receipts from its real estate portfolio based on contractual arrangements with its tenants, proceeds from the sales of real estate properties, joint ventures, and proceeds from public or private debt or equity offerings.

As of June 30, 2025, the Company had $1.2 billion available to be drawn on its unsecured credit facility ("Unsecured Credit Facility") and available cash.

On July 25, 2025, the Company entered into the Fifth Amended and Restated Credit Facility which extended the maturity of its revolver to July 2029.

On July 25, 2025, the Company entered into the Unsecured Credit Facility, which, among other things, replaced the Prior Credit Facility and extended the maturity of its revolver to July 2029.

As of September 30, 2025, the Company had $1.4 billion available to be drawn on the Unsecured Credit Facility and available cash.

The Company expects to continue to meet its liquidity needs, including funding additional investments, paying dividends, and funding debt service, through cash flows from operations and liquidity sources, including the Unsecured Credit Facility.

1 unchanged sentence

The Company cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to the Company in sufficient amounts to meet its liquidity needs.

Dividends paid by the Company for the six months ended June 30, 2025 were funded from cash flows from operations and the Unsecured Credit Facility, as cash flows from operations were not adequate to fully fund dividends, primarily as a result of the timing of interest payments.

The Company expects that cash flows from operations will generate sufficient cash flows during 2025 such that dividends for the full year 2025 can be funded by cash flows from operations or other sources of liquidity described above.

Investing Activities

Cash flows used in investing activities for the six months ended June 30, 2025, were approximately $41.9 million.

Cash flows used in investing activities for the nine months ended September 30, 2025, were approximately $184.3 million.

Below is a summary of the investing activities.

The Company disposed of eight medical outpatient properties and two land parcels during the six months ended June 30, 2025 for a total sales price of $81.2 million, generating net proceeds of $66.8 million after seller financing and closing credits.

The following table details these dispositions for the six months ended June 30, 2025:

The Company disposed of 31 medical outpatient properties and two land parcels during the nine months ended September 30, 2025 for a total sales price of $477.6 million, generating net proceeds of $447.3 million after seller financing and closing credits.

The following table details these dispositions for the nine months ended September 30, 2025:

Dollars in thousands Date Disposed Sale Price Square Footage

8 unchanged sentences

Houston, TX 6/27/25 10,500 —

Total $ 81,186 405,858

1 Includes two medical outpatient properties.

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

Subsequent to June 30, 2025, the Company disposed of the following properties:

Dollars in thousands Date Disposed Sale Price Square Footage

South Bend, IN 7/15/25 43,100 205,573

Milwaukee, WI 7/29/25 42,000 147,406

7/29/25 42,000 147,406

Naples, FL 7/29/25 19,250 61,359

New York, NY 7/30/25 25,000 89,893

Boston, MA 8/25/25 450 9,010

Lakeland, FL 8/27/25 7,325 31,158

Salem, OR 8/29/25 4,000 21,026

Milwaukee, WI 1

9/29/25 60,000 220,747

Tampa, FL 9/30/25 22,000 47,962

Dallas, TX 2 5

9/30/25 58,800 448,879

Chicago, IL 9/30/25 18,700 56,531

Columbus, OH 4

9/30/25 33,750 117,060

Miami, FL 9/30/25 62,000 152,976

Total $ 477,561 2,015,438

1 Includes two medical outpatient properties.

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

3 Includes four medical outpatient properties.

4 Includes three medical outpatient properties.

5 Proceeds held in a cash escrow account and recorded in other assets.

Cash was received by the Company on October 1, 2025.

Subsequent to September 30, 2025, the Company disposed of the following land parcel and a property which was classified as held for sale as of September 30, 2025:

Dollars in thousands Date Disposed Sale Price Square Footage

New Haven, CT 10/16/25 $ 725 —

Des Moines, IA 10/29/25 7,225 152,655

Total $ 7,950 152,655

Capital Expenditures

During the six months ended June 30, 2025, the Company incurred capital costs totaling $158.4 million for the following:

During the nine months ended September 30, 2025, the Company incurred capital costs totaling $230.1 million for the following:

• $108.9 million toward development and redevelopment of properties;

5 unchanged sentences

In March 2025, the Company executed a mezzanine loan receivable agreement with a maximum loan commitment of $8.5 million.

As of June 30, 2025, the Company had funded $2.8 million under this agreement.

As of September 30, 2025, the Company had funded $6.2 million under this agreement.

In April 2025, a mortgage loan receivable of $37.7 million maturing in February 2026 was repaid in full.

1 unchanged sentence

Financing Activities

Cash flows used in financing activities for the six months ended June 30, 2025 were approximately $212.3 million.

Cash flows used in financing activities for the nine months ended September 30, 2025 were approximately $534.5 million.

See Notes 4 and 7 to the Condensed Consolidated Financial Statements in this report for more information about capital markets and financing activities.

Debt Activity

As of June 30, 2025, the Company had outstanding interest rate swaps totaling $1.1 billion to hedge the one-month term Secured Overnight Financing Rate ("SOFR").

As of September 30, 2025, the Company had 15 outstanding interest rate swaps totaling $1.0 billion to hedge the one-month term Secured Overnight Financing Rate ("SOFR").

As of September 30, 2025, seven of these swaps totaling $500 million were designated as cash flow hedges.

The following table details the amount and rate of each swap (dollars in thousands):

EXPIRATION DATE AMOUNT WEIGHTED

EXPIRATION DATE TOTAL OUTSTANDING AMOUNT WEIGHTED

May 2026 $ 241,608 3.63 %

6 unchanged sentences

During the first quarter of 2025, the Company repaid $25.0 million of the $200 million Unsecured Term Loan due May 2025 and $10.0 million of the $300 million Unsecured Term Loan due October 2025.

On April 8, 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.

On April 8, 2025, the Company exercised its final option 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 existing $200 million term loan facility was also amended to include a four-month extension option, which would extend the final maturity to May 2026.

On October 7, 2025, the Company fully repaid its $200 million Unsecured Term Loan due January 2026, which had a remaining principal balance of $151.3 million.

On September 26, 2025, the Company exercised an option to extend the maturity date of the $300 million Term Loan to January 2026 for a fee of approximately $0.1 million.

The Company has three additional options to extend the maturity date of this term loan.

As of September 30, 2025, the principal balance was $268.7 million.

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.

On July 25, 2025, the Company entered into the Fifth Amended and Restated Revolving Credit and Term Loan Agreement (the “ New Credit Facility ”) with Wells Fargo Bank, National Association, as Administrative Agent;

Wells Fargo Securities, LLC and JPMorgan Chase Bank, N.A.

as Joint Book Runners;

Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., PNC Capital Markets LLC, U.S.

Bank National Association, The Bank of Nova Scotia, and BofA Securities, Inc., as Joint Lead Arrangers;

and the other lenders named therein.

The New Credit Facility provides for (i) a $1.5 billion unsecured revolving credit facility (the “Revolver”) and (ii) five individual unsecured term loan tranches totaling $1.115 billion.

The OP is the borrower under the New Credit Facility (in such capacity, the “ Borrower ”).

A summary of the principal terms of the New Credit Facility and the New Credit Facility's effect on the Company's existing revolving credit term loan facilities is as follows:

• The New Credit Facility replaces the Unsecured Credit Facility.

All outstanding obligations due under the Unsecured Credit Facility were reallocated to the lenders under the New Credit Facility.

• The Company’s $1.5 billion Revolver was continued with a maturity extension from October 31, 2025 to July 25, 2029, with two six-month extension options.

The Revolver includes a sublimit of $120 million for letters of credit.

• The previously funded $175 million term loan was continued with a maturity date of January 31, 2026 and three extension options totaling 16 months.

• The previously funded $150 million term loan was continued with a maturity date of June 1, 2026, with two extension options of six months each.

• The previously funded $290 million term loan was continued with a maturity date of October 31, 2025, with four extension options totaling 24 months.

• The previously funded $200 million term loan was continued with a maturity date of July 20, 2027, with two extension options of 12 months each.

• The previously funded $300 million term loan was continued with a maturity date of January 20, 2028, with one extension option of 12 months.

Revolving loans outstanding under the New Credit Facility bear interest at a floating rate equal to the daily simple Secured Overnight Financing Rate ("SOFR"), term SOFR or base rates, as applicable, plus an applicable margin.

The applicable margin is determined based on the Borrower’s credit ratings and ranges from 0.725% per annum to 1.40% per annum (currently 0.85% per annum).

Term loans outstanding under the New Credit Facility bear interest at a rate equal to Term SOFR rates plus an applicable margin.

The applicable margin is determined based on the Borrower’s credit ratings and ranges from 0.80% per annum to 1.60% per annum (currently 0.95% per annum).

In addition, the Borrower pays a facility fee on the Revolver commitments at a rate per annum determined based on the Borrower’s credit ratings and ranging from 0.125% per annum to 0.30% per annum (currently 0.20% per annum).

Except as set forth above, the principal terms of the New Credit Facility are substantially consistent with the terms of the Unsecured Credit Facility.

Specifically, the New Credit Facility contains representations and warranties and affirmative and negative covenants that are customary for facilities of this size and type.

These covenants include, among others:

limitations on the incurrence of additional indebtedness;

limitations on mergers, investments and acquisitions;

limitations on dividends and redemptions of capital stock;

limitations on transactions with affiliates;

and requirements to comply with certain financial covenants, including a maximum consolidated leverage ratio, a maximum consolidated secured leverage ratio, a maximum consolidated unencumbered leverage ratio, a minimum fixed charge coverage ratio and a minimum unsecured coverage ratio.

On July 25, 2025, the Company entered into the Unsecured Credit Facility, which replaced the Prior Credit Facility.

See Note 4 to the Condensed Consolidated Financial Statements in this report for more information about the Unsecured Credit Facility and the Prior Credit Facility.

Supplemental Guarantor Information

1 unchanged sentence

All unsecured notes are fully and unconditionally guaranteed by the Company, and the OP is 98.6% owned by the Company.

Effective January 4, 2021, the Securities and Exchange Commission (the “SEC”) adopted amendments to the financial disclosure requirements which permit subsidiary issuers of obligations guaranteed by the parent to omit separate financial statements if the consolidated financial statements of the parent company have been filed, the subsidiary obligor is a consolidated subsidiary of the parent company, the guaranteed security is debt or debt-like, and the security is guaranteed fully and unconditionally by the parent.

Effective January 4, 2021, the Securities and Exchange Commission (the “SEC”) adopted amendments to the financial disclosure requirements which permit subsidiary issuers of

obligations guaranteed by the parent to omit separate financial statements if the consolidated financial statements of the parent company have been filed, the subsidiary obligor is a consolidated subsidiary of the parent company, the guaranteed security is debt or debt-like, and the security is guaranteed fully and unconditionally by the parent.

Accordingly, as permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, the Company has excluded the summarized financial information for the OP because the assets, liabilities, and results of operations of the OP are not materially different than the corresponding amounts in the Company's consolidated financial statements and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.

Operating Activities

Cash flows provided by operating activities decreased from $244.3 million for the six months ended June 30, 2024 to $211.0 million for the six months ended June 30, 2025.

Cash flows provided by operating activities decreased from $363.6 million for the nine months ended September 30, 2024 to $324.8 million for the nine months ended September 30, 2025.

Items impacting cash flows from operations include, but are not limited to, cash generated from property operations, interest payments and the timing of the payment of invoices and other expenses.

6 unchanged sentences

Rising interest rates and increased volatility in the capital markets have increased the Company’s cost and availability of debt and equity capital.

Limited availability and increases in the cost of capital could adversely impact the Company’s ability to finance operations and acquire and develop properties.

Limited availability and increases in the cost of capital could adversely impact the Company’s ability to finance operations and acquire, develop, and redevelop properties.

To the extent the Company’s tenants experience increased costs or financing difficulties due to the economic and market conditions, they may be unable or unwilling to make payments or perform their obligations when due.

4 unchanged sentences

Approximately 70% of the leases expiring during the remainder of 2025 are for space in buildings located on or adjacent to hospital campuses, are distributed throughout the portfolio, and are not concentrated with any one tenant, health system or market area.

The Company typically expects to retain 75% to 90% of tenants upon expiration, and the retention ratio for the first six months of the year was within this range.

The Company typically expects to retain 75% to 90% of tenants upon expiration, and the retention ratio for the first nine months of the year was within this range.

Prospect Medical

4 unchanged sentences

The Company moved to cash basis accounting for these leases and recorded a reserve of $0.7 million in the fourth quarter of 2024.

While it is early in the bankruptcy proceedings and the Company is in discussions with Prospect regarding its leases with the Company, there can be no assurance that the Company will recover unpaid rent from Prospect.

During the six months ended June 30, 2025, the Company received rent payments of approximately $1.6 million.

On October 16, 2025, Prospect designated ECHN Holdings, Inc., a subsidiary of Hartford HealthCare (“Hartford Health”) as the successful bidder for the Prospect assets most closely associated with the Company’s Prospect leases.

While the Company owns approximately 220,000 square feet of space currently leased by Hartford Health, there can be no assurances that Hartford Health will assume Prospect’s leases with the Company.

During the nine months ended September 30, 2025, the Company received rent payments due from Prospect totaling approximately $2.4 million.

Operating Expenses

3 unchanged sentences

The effects of these operating expense increases are mitigated in leases that have provisions for operating expense reimbursement.

As of June 30, 2025, leases for approximately 92% of the Company's total leased square footage allow for some recovery of operating expenses, with approximately 29% having modified gross lease structures and approximately 63% having net lease structures.

As of September 30, 2025, leases for approximately 92% of the Company's total leased square footage allow for some recovery of operating expenses, with approximately 30% having modified gross lease structures and approximately 62% having net lease structures.

Purchase Options

1 unchanged sentence

YEAR EXERCISABLE NUMBER OF PROPERTIES GROSS REAL ESTATE INVESTMENT AS OF

JUNE 30, 2025 1

SEPTEMBER 30, 2025 1

2026 5 143,015

21 unchanged sentences

Normalized FFO is presented by adding to FFO acquisition-related costs, acceleration of debt issuance costs, debt extinguishment costs and other Company-defined normalizing items to evaluate operating performance.

FAD is presented by adding to Normalized FFO non-real estate depreciation and amortization, non-cash financing receivable amortization, loan origination cost

amortization, deferred financing fees amortization, stock-based compensation expense and rent reserves, net;

FAD is presented by adding to Normalized FFO non-real estate depreciation and amortization, non-cash financing receivable amortization, loan origination cost amortization, deferred financing fees amortization, stock-based compensation expense and rent reserves, net;

and subtracting maintenance capital expenditures, including second generation tenant improvements and leasing commissions paid and straight-line rent income, net of expense.

10 unchanged sentences

Further, these measures should not be considered as an alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flow from operating activities as a measure of liquidity.

The table below reconciles net income to FFO, Normalized FFO and FAD for the three and six months ended June 30, 2025, and 2024:

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

The table below reconciles net income to FFO, Normalized FFO and FAD for the three and nine months ended September 30, 2025 and 2024:

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

Amounts in thousands, except per share data 2025 2024 2025 2024

15 unchanged sentences

Non-routine legal costs 9 306 564 771

Debt financing costs 2

3,493 — 3,493 —

Restructuring and severance-related charges 12,046 6,861 22,849 6,861

26 unchanged sentences

1 Potential common shares are not included in diluted earnings per share when a loss exists as the effect would be antidilutive.

2 For the six months ended June 30, 2025, represents a $1.5 million credit loss reserve on a mortgage note receivable and a $1.9 million loss on other assets included in "Impairment of real estate properties and credit loss reserves" on the Statement of Operations.

For the three and six months ended June 30, 2024, includes a $4.9 million gain on sale of corporate assets included in "Gains on sales of real estate and other assets" on the Statement of Operations, a $2.2 million straight line rent reversed included in "Rental income" on the Statement of Operations, and a $11.2 million credit loss reserve on a note receivable included in "Impairment of real estate properties and credit loss reserves" on the Statement of Operations.

2 Includes loss on debt extinguishment, loss on derivatives, and legal fees related to the amended credit facility.

3 For the nine months ended September 30, 2025, represents a $1.5 million credit loss reserve on a mortgage note receivable and a $1.9 million loss on other assets included in "Impairment of real estate properties and credit loss reserves" on the Statement of Operations.

For the nine months ended September 30, 2024, includes a $5.1 million gain on sale of corporate assets included in "Gains on sales of real estate and other assets" on the Statement of Operations, a $2.2 million straight line rent reversed included in "Rental income" on the Statement of Operations, and a $58.0 million credit loss reserve on three notes receivable included in "Impairment of real estate properties and credit loss reserves" on the Statement of Operations.

4 Includes the Company's proportionate share of lease intangible amortization related to unconsolidated joint ventures.

1 unchanged sentence

6 Includes the Company's proportionate share of straight-line rent, net related to unconsolidated joint ventures.

6 The Company utilizes the treasury stock method which includes the dilutive effect of nonvested share-based awards outstand ing of 287,797 and 420,687, respectively, for the three months ended June 30, 2025 and 2024, and the dilutive impact of 4,161,628 and 3,914,997 OP Units outstanding for the three and six months ended June 30, 2025, respectively.

7 The Company utilizes the treasury stock method which includes the dilutive effect of nonvested share-based awards outstanding of 472,119 and

760,552, respectively, for the three months ended September 30, 2025 and 2024, and the dilutive impact of 4,253,989 and 4,213,402 OP Units outstanding for the three and nine months ended September 30, 2025, respectively.

Cash Net Operating Income ("NOI") and Same Store Cash NOI

11 unchanged sentences

Newly developed or redeveloped properties will be included in the same store pool five full quarters after substantial completion.

The following table reflects the Company's Same Store Cash NOI for the six months ended June 30, 2025 and 2024:

The following table reflects the Company's Same Store Cash NOI for the nine months ended September 30, 2025 and 2024:

NUMBER OF PROPERTIES GROSS INVESTMENT

as of June 30, 2025 SAME STORE CASH NOI for the six months ended June 30,

as of September 30, 2025 SAME STORE CASH NOI for the nine months ended September 30,

Dollars in thousands 2025 2024

1 unchanged sentence

Joint venture same store properties 30 $ 331,800 $ 13,157 $ 13,549

The following tables reconcile net loss to Same Store NOI and the same store property metrics to the total owned real estate portfolio for the six months ended June 30, 2025 and 2024:

The following tables reconcile net loss to Same Store NOI and the same store property metrics to the total owned real estate portfolio for the nine months ended September 30, 2025 and 2024:

Reconciliation of Same Store Cash NOI

SAME STORE RECONCILIATION

SIX MONTHS ENDED JUNE 30,

NINE MONTHS ENDED SEPTEMBER 30,

Dollars in thousands 2025 2024

4 unchanged sentences

Other expenses 1

22,676 16,388

Straight-line rent, net (19,788) (17,971)

10 unchanged sentences

Reconciliation of Same Store Properties

AS OF JUNE 30, 2025

AS OF SEPTEMBER 30, 2025

Dollars and square feet in thousands PROPERTY COUNT GROSS INVESTMENT 1

4 unchanged sentences

Wholly owned and joint venture acquisitions 30 183,552 2,193 95.1 %

Developments 2 82,875 224 34.3 %

Development completions 2 52,400 107 82.1 %

Redevelopments 18 652,294 1,869 66.9 %

Redevelopment completions 5 76,684 352 70.3 %

Total 579 $ 10,771,630 33,576 89.4 %

3 unchanged sentences

Results of Operations

Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024

The Company’s results of operations for the three months ended June 30, 2025, compared to the same period in 2024 were impacted by developments, dispositions, gains on sale, and capital markets transactions.

Rental income decreased $21.1 million, or 6.8%, for the three months ended June 30, 2025, compared to the prior year period.

Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024

The Company’s results of operations for the three months ended September 30, 2025, compared to the same period in 2024 were impacted by developments, dispositions, gains on sale, and capital markets transactions.

Rental income decreased $19.1 million, or 6.2%, for the three months ended September 30, 2025, compared to the prior year period.

This decrease is primarily comprised of the following:

2 unchanged sentences

• Developments completed in 2024 resulted in an increase of $2.0 million.

Other operating income increased $2.7 million, or 61.6%, for the three months ended June 30, 2025, compared to the prior year period primarily as a result of income from management fees related to unconsolidated joint ventures.

Property operating expenses decreased $7.8 million, or 6.6%, for the three months ended June 30, 2025, compared to the prior year period primarily as a result of the following activity:

Interest income decreased $0.4 million, or 10.9% for the three months ended September 30, 2025, compared to the prior year period primarily as a result of the repayment and maturity of note receivables, partially offset by the addition of new mortgages receivables.

Other operating income increased $1.9 million, or 37.2%, for the three months ended September 30, 2025, compared to the prior year period primarily as a result of income from management fees related to unconsolidated joint ventures.

Property operating expenses decreased $6.8 million, or 5.6%, for the three months ended September 30, 2025, compared to the prior year period primarily as a result of the following activity:

• Dispositions in 2024 and 2025 resulted in a decrease of $10.0 million.

• Decreases in portfolio operating expenses as follows:

◦ Property tax expense of $0.5 million;

◦ Insurance expense of $0.2 million.

• Developments completed in 2024 resulted in an increase of $0.5 million.

• Increases in portfolio operating expenses as follows:

◦ Utilities expense of $1.4 million;

◦ Leasing commissions and other administrative and legal expenses of $1.1 million;

◦ Utilities expense of $0.9 million;

◦ Compensation expense of $0.9 million;

◦ Janitorial expense of $0.3 million;

• Developments completed in 2024 resulted in an increase of $0.4 million.

General and administrative expenses increased approximately $9.5 million, or 67.7%, for the three months ended June 30, 2025, compared to the prior year period primarily as a result of the following activity:

◦ Maintenance and repair expense of $0.2 million.

General and administrative expenses increased approximately $1.6 million, or 8.2%, for the three months ended September 30, 2025, compared to the prior year period primarily as a result of the following activity:

• Decreases in the following expenses:

◦ Cash compensation expense of $2.3 million;

◦ Travel expenses of $0.3 million;

◦ Other decreases include legal and other administrative costs of $1.6 million.

• Increases in the following expenses:

◦ Restructuring and severance-related charges of $10.3 million;

◦ Cash incentive compensation expense of $1.1 million;

◦ Non-cash incentive compensation expense of $0.7 million;

Depreciation and amortization expense decreased $25.7 million, or 14.8%, for the three months ended June 30, 2025, compared to the prior year period primarily as a result of the following activity:

◦ Other decreases include legal and other administrative costs of $0.6 million.

• Increase in restructuring and severance-related charges of $5.2 million.

Depreciation and amortization expense decreased $25.4 million, or 15.6%, for the three months ended September 30, 2025, compared to the prior year period primarily as a result of the following activity:

• Dispositions in 2024 and 2025 resulted in a decrease of $17.1 million.

4 unchanged sentences

Gains on sale of real estate properties and other assets

In the three months ended June 30, 2025 , the Company recognized gains on sale of real estate properties and other assets of approximately $20.0 million.

In the three months ended June 30, 2024, the Company recognized gains on sale of real estate properties and other assets of approximately $38.3 million.

In the three months ended September 30, 2025 , the Company recognized gains on sale of real estate properties and other assets of approximately $76.8 million.

In the three months ended September 30, 2024, the Company recognized gains on sale of real estate properties and other assets of approximately $39.3 million.

Interest expense

Interest expense decreased $9.1 million, or 14.6%, for the three months ended June 30, 2025, compared to the prior year period.

Interest expense decreased $8.0 million, or 13.2%, for the three months ended September 30, 2025, compared to the prior year period.

The components of interest expense are as follows:

THREE MONTHS ENDED JUNE 30, CHANGE

THREE MONTHS ENDED SEPTEMBER 30, CHANGE

Dollars in thousands 2025 2024 $ %

7 unchanged sentences

Total interest expense $ 52,642 $ 60,649 $ (8,007) (13.2) %

Contractual interest expense decreased $6.7 million, or 13.1%, for the three months ended June 30, 2025, compared to the prior year period primarily as a result of the following activity:

• The unsecured term loans accounted for a decrease of approximately $8.8 million due to a decreased aggregate balance.

Contractual interest expense decreased $5.8 million, or 11.8%, for the three months ended September 30, 2025, compared to the prior year period primarily as a result of the following activity:

• The unsecured term loans accounted for a decrease of approximately $7.8 million as a result of a decreased aggregate balance.

• The unsecured credit facility accounted for an increase of approximately $1.8 million as a result of an increased weighted average balance outstanding.

• The redemption of the Senior Notes due 2025 accounted for a decrease of $1.6 million.

• The repayment of the Senior Notes due 2025 accounted for a decrease of $2.4 million.

• Active interest rate swaps accounted for an increase of $2.7 million.

• Mortgage note repayments, net of assumptions, accounted for a decrease of approximately $0.1 million.

Debt extinguishment costs

In the third quarter of 2025, the Company recorded approximately $0.3 million in debt extinguishment costs related to the replacement of the Prior Credit Facility with the Unsecured Credit Facility.

Interest and other income (expense)

In the third quarter of 2025, the Company reclassified approximately $2.8 million from AOCI to other expense related to ineffectiveness on eight interest rate swaps.

See Note 5 to the Condensed Consolidated Financial Statements in this report for more details regarding the Company's derivative accounting.

Impairment of real estate properties and credit loss reserves

In the second quarter of 2025, the Company recognized impairments totaling $15.0 million on two properties sold and $125.9 million on thirteen properties with changes in the expected holding periods.

In addition, the Company recorded a $1.5 million credit loss reserve related to one of its mortgage notes receivables.

In the second quarter of 2024, the Company recognized impairments totaling $10.2 million on 15 properties sold and $110.7 million on 17 properties with changes in the expected holding periods.

In addition, the Company recorded a $11.2 million credit loss reserve to one of its mortgage note receivables.

In the third quarter of 2025, the Company recognized impairments totaling $1.6 million on five properties sold and $102.8 million on eight properties with changes in the expected holding periods.

In the third quarter of 2024, the Company recognized impairments totaling $10.8 million on 13 properties sold and $26.8 million on 12 properties with changes in the expected holding periods.

In addition, the Company recorded $46.8 million in credit loss reserves relating to notes receivable.

Equity loss from unconsolidated joint ventures

The Company recognized its proportionate share of income or losses from its unconsolidated joint ventures.

Losses are primarily attributable to non-cash depreciation expense.

Losses are primarily attributable to non-cash depreciation expens e.

See Note 2 to the Condensed Consolidated Financial Statements in this report for more details regarding the Company's unconsolidated joint ventures.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The Company’s results of operations for the six months ended June 30, 2025 compared to the same period in 2024 were impacted by developments, dispositions, gains on sale, and capital markets transactions.

Rental income decreased $50.3 million, or 8.0%, for the six months ended June 30, 2025 compared to the prior year period.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The Company’s results of operations for the nine months ended September 30, 2025 compared to the same period in 2024 were impacted by developments, dispositions, gains on sale, and capital markets transactions.

Rental income decreased $69.4 million, or 7.4%, for the nine months ended September 30, 2025 compared to the prior year period.

This decrease is primarily comprised of the following:

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• Developments completed in 2024 resulted in an increase of $5.6 million.

Other operating income increased $4.9 million, or 57.1%, for the six months ended June 30, 2025, compared to the prior year period primarily as a result of income from management fees related to unconsolidated joint ventures.

Property operating expenses decreased $13.9 million, or 5.8%, for the six months ended June 30, 2025 compared to the prior year period primarily as a result of the following activity:

Interest income decreased $1.6 million, or 13.4%, for the nine months ended September 30, 2025, compared to the prior year period primarily as a result of the repayment and maturity of note receivables, partially offset by the addition of new mortgages receivables.

Other operating income increased $6.7 million, or 49.7%, for the nine months ended September 30, 2025, compared to the prior year period primarily as a result of income from management fees related to unconsolidated joint ventures.

Property operating expenses decreased $20.7 million, or 5.8%, for the nine months ended September 30, 2025 compared to the prior year period primarily as a result of the following activity:

• Dispositions in 2024 and 2025 resulted in a decrease of $35.6 million.

• Decreases in portfolio operating expenses including insurance expense of $0.5 million.

• Developments completed in 2024 resulted in an increase of $1.4 million.

• Increases in portfolio operating expenses as follows:

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◦ Maintenance and repair expense of $1.8 million;

◦ Property tax expense of $1.5 million;

◦ Janitorial expense of $1.2 million;

◦ Developments completed in 2024 resulted in an increase of $0.9 million.

General and administrative expenses increased approximately $8.2 million, or 28.6%, for the six months ended June 30, 2025 compared to the prior year period primarily as a result of the following activity:

◦ Property tax expense of $0.6 million;

◦ Security expense of $0.2 million.

• General and administrative expenses increased approximately $9.9 million, or 20.2%, for the nine months ended September 30, 2025 compared to the prior year period primarily as a result of the following activity:

• Increase in restructuring and severance-related charges of $16.0 million.

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• Decrease in travel-related expenses of $1.0 million.

• Decrease in non-cash incentive compensation of $0.7 million.

• Other decreases include legal and other administrative costs of $3.2 million.

Depreciation and amortization expense decreased $52.9 million, or 15.0%, for the six months ended June 30, 2025 compared to the prior year period primarily as a result of the following activity:

Depreciation and amortization expense decreased $78.3 million, or 15.2%, for the nine months ended September 30, 2025 compared to the prior year period primarily as a result of the following activity:

• Dispositions in 2024 and 2025 resulted in a decrease of $55.6 million.

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Gains on sale of real estate properties and other assets

Gains on the sale of real estate properties and other assets for the six months ended June 30, 2025 and 2024, totaled $22.9 million and $38.4 million, respectively.

Gains on the sale of real estate properties and other assets for the nine months ended September 30, 2025 and 2024, totaled $99.7 million and $77.7 million, respectively.

Interest expense

Interest expense decreased $15.4 million, or 12.4%, for the six months ended June 30, 2025 compared to the prior year period.

Interest expense decreased $23.4 million, or 12.7%, for the nine months ended September 30, 2025 compared to the prior year period.

The components of interest expense are as follows:

SIX MONTHS ENDED JUNE 30, CHANGE

NINE MONTHS ENDED SEPTEMBER 30, CHANGE

Dollars in thousands 2025 2024 $ %

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Total interest expense $ 160,800 $ 184,159 $ (23,359) (12.7) %

Contractual interest expense decreased $13.3 million, or 13.2%, for the six months ended June 30, 2025 compared to the prior year period primarily as a result of the following activity:

Contractual interest expense decreased $19.1 million, or 12.7%, for the nine months ended September 30, 2025 compared to the prior year period primarily as a result of the following activity:

• The unsecured term loans accounted for a decrease of approximately $11.1 million.

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• Mortgage note repayments, net of assumptions, accounted for a decrease of approximately $0.3 million.

• The redemption of the Senior Note due 2025 accounted for a decrease of $1.6 million.

• The repayment of the Senior Note due 2025 accounted for a decrease of $4.0 million.

Debt extinguishment costs

During the nine months ended September 30, 2025, the Company recorded approximately $0.3 million in debt extinguishment costs related to the replacement of the Prior Credit Facility with the Unsecured Credit Facility.

Interest and other income (expense)

During the nine months ended September 30, 2025, the Company reclassified approximately $2.8 million from AOCI to other expense related to ineffectiveness on eight interest rate swaps.

See Note 5 to the Condensed Consolidated Financial Statements in this report for more details regarding the Company's derivative accounting.

Impairment of real estate properties and credit loss reserves

During the six months ended June 30, 2025 , the Company recognized impairments totaling $151.0 million on six properties sold and 17 properties with changes in the expected holding periods.

During the nine months ended September 30, 2025 , the Company recognized impairments totaling $255.4 million on 12 properties sold and 25 properties with changes in the expected holding periods.

In addition, the Company recorded $1.5 million in credit loss reserves relating to a mortgage notes receivable and a $1.9 million fair value adjustment for an equity investment in other assets.

During the six months ended June 30, 2024, the Company recognized impairments totaling $136.9 million on 15 properties sold and 18 properties with changes in the expected holding periods, including one property reclassified to held for sale.

In addition, the Company recorded $11.2 million in credit loss reserves related to one of its mortgage notes receivable.

During the nine months ended September 30, 2024, the Company recognized impairments totaling $174.5 million on 28 properties sold and 30 properties with changes in the expected holding periods, including one property reclassified to held for sale.

In addition, the Company recorded $58.0 million in credit loss reserves related to three of its notes receivable.

Impairment of Goodwill

During the three months ended March 31, 2024, the Company determined that the carrying value of its single reporting unit exceeded estimated fair value and therefore 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.

During the nine months ended September 30, 2024, the Company determined that the carrying value of its single reporting unit exceeded estimated fair value and therefore 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 1 to the Condensed Consolidated Financial Statements in this report for more details.

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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-Q

Item 2. Management’s Discussion and Analysis