What changed in this filing

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Item 1A. Risk Factors

2026-02-13 compared with 2025-02-19 · 37 added, 55 removed, 362 unchanged (20% of the section changed)

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and risks relating to government regulations.

These risks, as well as the risks described in Item 1 under the headings “Competition,” “Government Regulation,” “Legislative Developments,” and “Environmental Matters,” and in Item 7 under the heading “Disclosure Regarding Forward-Looking Statements,” should be carefully considered before making an investment decision regarding the

The risks and uncertainties described in Item 1 and below are not the only ones facing the Company, and there may be additional risks that the Company does not presently know of or that the Company currently considers not likely to have a material impact.

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the Company's ability to timely reinvest proceeds from the sale of assets at similar yields;

government regulations affecting tenants' Medicare and Medicaid reimbursement rates and operational requirements;

government regulations affecting tenants' Medicare and Medicaid reimbursement

rates and operational requirements;

unanticipated difficulties and/or expenditures relating to future acquisitions and developments;

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These conditions could adversely affect the Company’s revenues and could increase allowances for losses and result in impairment charges, which could decrease net income attributable to common stockholders and equity and reduce cash flows from operations.

The Company's results of operations have been and will continue to be impacted negatively by the Steward Health and Prospect Medical bankruptcies .

As previously disclosed, on May 6, 2024, Steward Health announced that it had filed petitions for relief under Chapter 11 of the U.S.

Bankruptcy Code in the U.S.

Bankruptcy Court for the Southern District of Texas.

Prior to the bankruptcy filing, Steward leased approximately 593,000 square feet of space from the Company, accounting for approximately 2.0% of the Company’s rental revenue.

Leases for six buildings in Massachusetts totaling approximately 244,000 square feet were assumed in connection with the sale of Steward’s Massachusetts hospitals on or about September 30, 2024.

In October 2024, the Company received $2.2 million for prior rent owed under these assumed leases.

Leases for approximately 349,000 square feet in buildings in Florida and Massachusetts were rejected by Steward.

The total annual revenue associated with the rejected leases was approximately $13.0 million.

The Company will pursue claims for outstanding rent of approximately $2.3 million against Steward in the bankruptcy court.

However, there can be no assurance that the Company will recover unpaid rent from Steward be able to timely relet space related to rejected leases at similar rental rates, or otherwise offset lost revenue from Steward Health.

On January 11, 2025, Prospect Medical Holdings filed petitions for relief under Chapter 11 of the U.S.

Bankruptcy Code in the U.S.

Bankruptcy Court for the Northern District of Texas.

Prospect leases approximately 80,912 square feet of space from the Company, accounting for approximately $2.9 million of annual rental revenue.

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

There can be no assurance that the Company will recover unpaid rent from Prospect or be able to timely relet space related to any rejected leases.

The Company's results of operations have been and will continue to be impacted negatively by the Prospect Medical bankruptcy .

As previously disclosed, Prospect Medical Holdings (“Prospect”) filed petitions for relief under Chapter 11 of the U.S.

Bankruptcy Code in January of 2025.

Prospect leased approximately 80,912 square feet of space from the Company.

In October 2025, a subsidiary of Hartford HealthCare (“Hartford Health”) was selected as the successful bidder for the Prospect assets associated with the Company’s Prospect leases.

The Company signed direct leases with Hartford Heath totaling 65,477 square feet effective January 1, 2026 and retained certain sublet in additional spaces.

There is no assurance that the Company will be able to timely relet the remaining Prospect leased space that was not assumed by Hartford Health.

Owning real estate and indirect interests in real estate is subject to inherent risks .

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The decision to sell a property also requires the Company to assess the potential for impairment.

The Company incurred impairment charges of $249.9 million in 2024, associated with completed or planned disposition activity.

Additionally, the Company recorded a goodwill impairment of $250.5 million in 2024.

The Company incurred impairment charges of $361.1 million in 2025, related to completed or planned dispositions, changes in holding periods or changes in property use.

The Company may determine in future periods that an impairment has occurred in the value of one or more of its real estate properties or other assets.

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The Company had approximately $55.7 million, or 0.54%, of real estate property investments that were subject to purchase options held by lessees that were exercisable as of December 31, 2025.

Other properties have purchase options that will become exercisable after 2024.

Properties with purchase options exercisable in 2024 produced aggregate net operating income of approximately $10.6 million in 2024.

Other properties have purchase

options that will become exercisable after 2025.

Properties with purchase options exercisable in 2025 produced aggregate net operating income of approximatel y $7.2 million in 2025.

The exercise of these purchase options exposes the Company to reinvestment risk and a reduction in investment return.

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The Company is exposed to risks associated with geographic concentration .

As of December 31, 2024, the Company had investment concentrations of greater than 5% of its total investments in the Dallas, TX (8.5%), Houston, TX (5.4%), and Seattle, WA (5.2%) markets.

As of December 31, 2025, the Company had investment concentrations of greater than 5% of its total investments in the Dallas, TX (9.5%), Seattle, WA (6.1%), Houston, TX (6.0%), and Charlotte, NC (5.4%) markets.

These concentrations increase the exposure to adverse conditions that might affect these markets, including natural disasters, local economic conditions, local real estate market conditions, increased competition, state and local regulation (including property taxes) and other localized events or conditions.

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Revenue concentrations relating to these leases expose the Company to risks related to the financial condition of the associated health systems .

Most of the Company’s properties on or adjacent to hospital campuses are largely dependent on the viability of the health system’s campus where they are located, whether or not the hospital or health system is a tenant in such properties.

The viability of these health systems depends on factors such as the quality and mix of healthcare services provided, competition, payor mix, demographic trends in the surrounding community, market position and growth potential.

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In the event that climate change causes such catastrophic weather or other natural events to increase broadly or in localized areas, such costs and damages could increase above historic expectations.

In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve energy efficiency of our existing properties and could require the Company to spend more on development and redevelopment properties without a corresponding increase in revenue.

In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve energy efficiency of our

existing properties and could require the Company to spend more on development and redevelopment properties without a corresponding increase in revenue.

The Company faces risks associated with security breaches through cyber attacks, cyber intrusions, or otherwise, as well as other significant disruptions of its information technology networks and related systems .

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For instance, the OP's limited partnership agreement provides that any holder of units may exchange limited partnership units on a one-for-one basis for shares of common stock or, at the Company's option, cash equal to the value of an equivalent number of shares of the Company's common stock.

The Company may, however, enter into additional contractual arrangements with contributors of property under which it would agree to repurchase a contributor’s units for shares of the Company's common stock or cash, at the option of the contributor, at set times.

If the contributor required the Company to repurchase units for cash pursuant to such a provision, it would limit the Company's liquidity and, thus,

its ability to use cash to make other investments, satisfy other obligations or make distributions to stockholders.

The Company may, however, enter into additional contractual

arrangements with contributors of property under which it would agree to repurchase a contributor’s units for shares of the Company's common stock or cash, at the option of the contributor, at set times.

If the contributor required the Company to repurchase units for cash pursuant to such a provision, it would limit the Company's liquidity and, thus, its ability to use cash to make other investments, satisfy other obligations or make distributions to stockholders.

Moreover, if the Company were required to repurchase units for cash at a time when it did not have sufficient cash to fund the repurchase, the Company might be required to sell one or more of its properties to raise funds to satisfy this obligation.

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There can be no assurance that a similar situation in the future would not affect the Company's access to capital and other sources of funding, which could adversely affect the availability and terms of future borrowings, renewals or refinancings.

In addition, the deterioration of economic conditions, including supply chain constraints, that could result from another

pandemic may ultimately decrease occupancy levels and average rent per square foot across the Company's portfolio as tenants reduce or defer their spending.

In addition, the deterioration of economic conditions, including supply chain constraints, that could result from another pandemic may ultimately decrease occupancy levels and average rent per square foot across the Company's portfolio as tenants reduce or defer their spending.

The effect of any new variants of existing viruses or of another pandemic in the future on the Company's operational and financial performance will depend on future developments, including the duration, spread and intensity of the outbreak, the availability and effectiveness of vaccines, and the effect of government requirements or recommendations, all of which are uncertain and difficult to predict.

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Rising labor costs, increased competition for talent, and a tight labor market may make it difficult for the Company to hire skilled and unskilled employees to meet staffing needs.

The Company's former Chief Executive Officer departed the Company in the second half of 2024.

The Company's board of directors is currently conducting a search for a chief executive officer.

While the board is actively engaged in the process and is utilizing a reputable national search firm, there can be no assurances as to the timing of the appointment of a CEO.

Uncertainty concerning the appointment of a CEO could affect the Company's stock performance and its ability to attract, retain, and motivate key personnel needed to execute operational priorities.

Risks relating to our capital structure and financings

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As of December 31, 2025, the Company had approximately $4.1 billion of outstanding indebtedness excluding discounts, premiums and debt issuance costs.

Covenants under the Fourth Amended and Restated Revolving Credit and Term Loan Agreement dated as of July 20, 2022, among Healthcare Realty Trust, the OP, and Wells Fargo Bank, National Association, as Administrative Agent, and the other lenders that are party thereto, as amended ("Unsecured Credit Facility"), and the indentures governing the OP's senior notes permit the Company to incur substantial, additional debt, and the Company may borrow additional funds, which may include secured borrowings or additional instances of notes by the OP that are fully guaranteed by Healthcare Realty Trust.

Covenants under the Fifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of July 25, 2025, among Healthcare Realty Trust, the OP, and Wells Fargo Bank, National Association, as Administrative Agent, and the other lenders that are party thereto, as amended ("Unsecured Credit Facility"), and the indentures governing the OP's senior notes permit the Company to incur substantial, additional debt, and the Company may borrow additional funds, which may include secured borrowings or additional instances of notes by the OP that are fully guaranteed by Healthcare Realty Trust.

The Company has approximately $1.3 billion of combined debt maturities in 2026 and 2027.

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If any refinancing is done at higher interest rates, the increased interest expense could adversely affect the Company's financial condition and results of operations.

Any such refinancing could also impose tighter financial

ratios and other covenants that restrict the Company's ability to take actions that could otherwise be in its best interest, such as funding new development activity, making opportunistic acquisitions, or paying dividends.

Any such refinancing could also impose tighter financial ratios and other covenants that restrict the Company's ability to take actions that could otherwise be in its best interest, such as funding new development activity, making opportunistic acquisitions, or paying dividends.

Covenants in the Company’s debt instruments limit its operational flexibility, and a breach of these covenants could materially affect the Company’s consolidated financial condition and results of operations.

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The Company's credit ratings could be downgraded.

If the Company's credit ratings are downgraded or other negative action is taken, the Company could be required, among other things, to pay additional interest and fees on borrowings under the Unsecured Credit Facility.

the Company's credit ratings are downgraded or other negative action is taken, the Company could be required, among other things, to pay additional interest and fees on borrowings under the Unsecured Credit Facility.

Increases in interest rates could have a material adverse effect on the Company's cost of capital.

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Any increases in interest rates will increase interest costs on any new debt and existing variable rate debt.

Such increases in the cost of capital could adversely impact our ability to

finance operations, acquire and develop properties, and refinance existing debt.

Such increases in the cost of capital could adversely impact our ability to finance operations, acquire and develop properties, and refinance existing debt.

Additionally, increased interest rates may also result in less liquid property markets, limiting our ability to sell existing assets.

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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.

As of December 31, 2024, the Company had investments of $473.1 million in unconsolidated joint ventures with unrelated third parties comprised of 63 properties and seven parking garages.

In addition, the Company had investments of $97.6 million in two consolidated joint ventures with developments that were completed in the fourth quarter of 2024.

As of December 31, 2025, the Company had investments of $453.6 million in unconsolidated joint ventures with unrelated third parties comprised of 61 properties, excluding held for sale properties, and seven parking garages.

The Company may acquire, develop, or redevelop additional properties in joint ventures with unrelated third parties.

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I n the event that we enter into forward equity agreements in the future and elect to settle any such forward equity agreement for cash and the settlement price is below the applicable forward equity price, we would be entitled to receive a cash payment from the relevant forward purchaser.

Under Section 1032 of the Internal Revenue Code, generally, no gains and losses are recognized by a corporation in dealing in its own shares, including pursuant to a "securities futures contract" (as defined in the Internal Revenue Code, by reference to the Exchange Act).

Although we believe that any amount received by us in exchange for our stock would qualify for the exemption under Section 1032 of the Internal Revenue Code, because it is not entirely clear whether a forward equity agreement qualifies as a "securities futures contract," the U.S.

Under Section 1032 of the Internal Revenue Code, generally, no gains and losses are recognized by a corporation in dealing with its own shares, including pursuant to a "securities futures contract" (as defined in the Internal Revenue Code, by reference to the Exchange Act).

Although we believe that any amount received by us in exchange for our stock would qualify for the exemption under Section 1032 of the Internal

Revenue Code, because it is not entirely clear whether a forward equity agreement qualifies as a "securities futures contract," the U.S.

federal income tax treatment of any cash settlement payment we receive is uncertain.

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In the event that these relief provisions were not available, we could lose our REIT status under the Internal Revenue Code.

In case of our bankruptcy or insolvency, any forward equity agreements will automatically terminate, and the Company would not receive the expected proceeds from any forward sale of shares of its common stock.

In the event of our bankruptcy or insolvency, any forward equity agreements will automatically terminate, and the Company would not receive the expected proceeds from any forward sale of shares of its common stock.

If we file for or consent to a proceeding seeking a judgment in bankruptcy or insolvency or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or we or a regulatory authority with jurisdiction over us presents a petition for our winding-up or liquidation, and we consent to such a petition, any forward equity agreements that are then in effect will automatically terminate.

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Real property taxes on the Company's properties may increase as its properties are reassessed by taxing authorities or as property tax rates change.

In addition, the Company could incur significant costs associated with an appeal of any of these assessments.

For example, a current California law commonly referred to as Proposition 13 generally limits annual real estate tax increases on California properties to 2% of assessed value at the date of acquisition.

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From time to time, proposals have been made to reduce the beneficial impact of Proposition 13 , particularly with respect to commercial property, which would include medical office buildings.

Most recently, an initiative qualified for California’s November 2020 statewide ballot that would generally limit Proposition 13’s protections to residential real estate.

If this initiative had passed, it would have ended the beneficial effect of Proposition 13 for the Company's properties, and property tax expense could have increase substantially, adversely affecting the Company's cash flow from operations and net income.

While this initiative did not pass, the Company cannot predict whether other changes to Proposition 13 may be proposed or adopted in the future.

Trends in the healthcare service industry may negatively affect the demand for the Company’s properties, lease revenues and the values of its investments.

If such an initiative passed, it could end or reduce the beneficial effect of Proposition 13 for the Company's properties, and property tax expense could have increase substantially, adversely affecting the Company's cash flow from operations and net income.

Trends in the healthcare service industry, including the impact of the One Big Beautiful Bill Act passed during 2025 that is subject of ongoing analysis, may negatively affect the demand for the Company’s properties, lease revenues and the values of its investments.

The healthcare service industry may be affected by the following:

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Even a technical or inadvertent violation could jeopardize the Company’s REIT qualification.

The Company’s continued qualification as a REIT will depend on the Company’s satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other

requirements on a continuing basis.

The Company’s continued qualification as a REIT will depend on the Company’s satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis.

In addition, the Company’s ability to satisfy the requirements to qualify as a REIT depends in part on the actions of third parties over which the Company has no control or only limited influence, including in cases where the Company owns an equity interest in an entity that is classified as a partnership for U.S.

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The Company may be subject to the prohibited transaction tax equal to 100% of net gain upon the disposition of real property.

Although a safe harbor to the characterization of the sale of real property by a REIT as a prohibited transaction is available, there can be no assurance that the Company can comply in all cases with the safe harbor or that it will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business.

Consequently, the Company may choose not to engage in certain sales of its properties or may conduct such sales through a taxable REIT subsidiary, which would be subject to federal and state income taxation.

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The federal income tax rules that affect REITs are constantly under review by persons involved in the legislative process, the IRS and the U.S.

Treasury Department, which results in statutory changes as well as frequent

revisions to regulations and interpretations.

Treasury Department, which results in statutory changes as well as frequent revisions to regulations and interpretations.

Revisions in federal tax laws and interpretations thereof could cause the Company to change its investments and commitments and affect the tax considerations of an investment in the Company.

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

What changed 10-K

Item 1A. Risk Factors