What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-13 compared with 2025-02-19 · 169 added, 203 removed, 550 unchanged (40% of the section changed)

7 unchanged sentences

• The Company’s revenues depend on the ability of its tenants under its leases to generate sufficient income from their operations to make rental payments to the Company;

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

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

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

30 unchanged sentences

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;

• 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.

Risks relating to government regulations

• The Company's property taxes could increase due to reassessment or property tax rate changes;

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

• 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 costs of complying with governmental laws and regulations may adversely affect the Company's results of operations;

12 unchanged sentences

The Company seeks to reduce financial and operational risk by owning properties in high-growth markets with a broad tenant mix that includes over 30 physician specialties, as well as surgery, imaging, cancer, and diagnostic centers.

As described in Item 1.

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

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

Accordingly, the information discussed in this section reflects, for periods prior to the closing of the Merger, the financial condition and results of operations of Legacy HR, and for periods from the closing of the Merger, that of the Company.

This section is organized into the following sections:

10 unchanged sentences

These sources of revenue represent the Company's primary source of liquidity to fund its dividends and its operating expenses, including interest incurred on debt, principal payments on debt, general and administrative costs, capital expenditures and other expenses incurred in connection with managing its existing portfolio and investing in additional properties.

To the extent additional investments are not funded by these sources, the

Company will fund its investment activity generally through equity or debt issuances either in the public or private markets, asset sales and joint venture contributions or through proceeds from the Unsecured Credit Facility.

To the extent additional investments are not funded by these sources, the Company will fund its investment activity generally through equity or debt issuances either in the public or private markets, asset sales and joint venture contributions or through proceeds from the Unsecured Credit Facility.

The Company expects to continue to meet its liquidity needs, including capital for additional investments, tenant improvement allowances, operating and finance lease payments, paying dividends, and funding debt service, through cash on hand, cash flows from operations and the cash flow sources addressed above.

15 unchanged sentences

See Note 4 to the Consolidated Financial Statements for more detail on these activities.

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

Investment in Unconsolidated Joint Ventures

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

Capital Funding

1 unchanged sentence

• $136.6 million toward development and redevelopment of properties;

• $52.4 million toward first generation tenant improvements and planned capital expenditures for acquisitions;

• $90.2 million toward first generation tenant improvements;

• $46.9 million toward second generation tenant improvements;

2 unchanged sentences

Real Estate Notes Receivable

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

On July 15, 2024, the senior lender on the construction mortgage loans associated with the underlying project initiated foreclosure proceedings to the borrower.

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

The Company had

previously placed the mezzanine loans on non-accrual status in 2023.

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

The Company no longer has a mezzanine loan position in connection with the project.

In 2024, the Company placed one of its real estate notes receivable with a principal balance of $31.2 million on non-accrual status.

The Company determined that the risk of credit loss was no longer remote and recorded a credit loss reserve of $16.8 million including $0.5 million of accrued interest in 2024.

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

In 2025, the Company had the following activity on its real estate notes receivables:

• In January 2025, the Company received $14.9 million as payment towards the principal balance of its mortgage loan that matured on December 2, 2024.

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

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

As of December 31, 2025, the Company had funded the full $8.5 million under this agreement.

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

• In December 2025, the Company received $5.8 million as payment towards the principal balance of its mortgage loan that matured on December 22, 2024,

• In December 2025, the Company provided seller financing of $6.4 million in connection with the sale of a real estate property in Houston, Texas.

See Note 1 to the Consolidated Financial Statements accompanying this report for more information about real estate notes receivable and allowance for credit losses.

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

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

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

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

The following table details the Company's asset sales for the year ended December 31, 2025:

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

Boston, MA 2/7/2025 $ 4,500 $ (135) $ — $ 4,365 $ 4,325 $ 15 $ 25 30,304

2/14/2025 8,600 (2,144) — 6,456 7,948 113 (1,605) 69,715

Houston, TX 2

3/20/2025 15,000 (4,087) (5,400) 5,513 14,343 347 (3,777) 127,933

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

Boston, MA 4/30/2025 486 (47) — 439 60 2 377 —

Boston, MA 5/23/2025 3,000 (36) — 2,964 2,631 27 306 33,176

Jacksonville, FL 6/26/2025 8,100 (11) — 8,089 23,064 (529) (14,446) 53,169

6/26/2025 31,000 (2,256) — 28,744 8,689 343 19,712 91,561

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

Raleigh, NC 2

Houston, TX 6/27/2025 10,500 (15) — 10,485 10,250 42 193 —

South Bend, IN 7/15/2025 43,100 (283) — 42,817 29,481 (7) 13,343 205,573

Milwaukee, WI 1

7/29/2025 42,000 (913) — 41,087 40,644 270 173 147,406

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

Naples, FL 7/29/2025 19,250 (2,692) — 16,558 15,586 559 413 61,359

New York, NY 7/30/2025 25,000 (1,290) — 23,710 15,531 364 7,815 89,893

Boston, MA 8/25/2025 450 (45) — 405 413 32 (40) 9,010

Lakeland, FL 3

8/27/2025 7,325 (772) — 6,553 6,899 234 (580) 31,158

Salem, OR 8/29/2025 4,000 (427) — 3,573 3,482 159 (68) 21,026

Milwaukee, WI 1

9/29/2025 60,000 (2,203) — 57,797 61,485 (2,884) (804) 220,747

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

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

Houston, TX 4

Tampa, FL 9/30/2025 22,000 (778) — 21,222 6,218 646 14,358 47,962

9/30/2025 58,800 (1,885) — 56,915 26,822 5,379 24,714 448,879

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

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

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

Salt Lake City, UT 5

Chicago, IL 9/30/2025 18,700 (477) — 18,223 18,417 (181) (13) 56,531

Columbus, OH 4

9/30/2025 33,750 (2,470) — 31,280 27,884 410 2,986 117,060

Miami, FL 9/30/2025 62,000 (1,867) — 60,133 45,152 2,580 12,401 152,976

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

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

New Haven, CT 10/16/2025 725 (4) — 721 612 3 106 —

Des Moines, IA 10/29/2025 7,225 (841) — 6,384 9,275 (2,346) (545) 152,655

Jacksonville, FL 1

11/17/2025 18,600 (1,065) — 17,535 17,590 463 (518) 40,333

Richmond, VA 5

11/18/2025 171,000 (8,772) — 162,228 57,224 13,263 91,741 405,945

Boston, MA 12/8/2025 278 (44) — 234 283 1 (49) 10,380

Atlanta, GA 12/19/2025 3,000 (981) — 2,019 3,331 (1,209) (103) —

Los Angeles, CA 7

12/19/2025 348,900 (35,341) — 313,559 287,121 1,413 25,025 1,522,500

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

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

Memphis, TN 12/29/2025 23,021 (79) — 22,942 8,876 (2,070) 16,136 116,473

Phoenix, AZ 12/29/2025 22,275 (756) — 21,519 17,367 1,217 2,935 89,980

Phoenix, AZ 12/29/2025 5,225 (335) — 4,890 4,927 21 (58) 89,983

Houston, TX 7

12/30/2025 12,500 (4,559) (6,400) 1,541 7,631 4,811 (4,501) 49,319

Total Dispositions $ 1,090,310 $ (77,610) $ (11,800) $ 1,000,900 $ 783,561 $ 23,488 $ 205,652 4,493,006

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

two MOBs in Los Angeles;

three MOBs in Houston, TX and Dallas, TX;

and five in Seattle, WA.

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

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

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

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

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

and two MOBs in each of Nashville, TN and Denver, CO.

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.

1 Includes two medical outpatient properties.

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

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

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

6 Includes two properties.

7 Includes three properties.

3 Includes four medical outpatient properties.

4 Includes three medical outpatient properties.

5 Includes six medical outpatient properties.

6 The Company sold six MOBs in El Paso, TX, four MOBs in Indianapolis, IN, two MOBs in each of Chicago, IL, Cincinnati, OH, Des Moines, IA, Fort Wayne, IN, Minneapolis, MN and Pittsburgh, PA;

and one MOB in each of Detroit, MI, Las Vegas, NV and Salt Lake City, UT to a single buyer in a single transaction.

7 The Company provided seller financing of approximately $6.4 million in connection with this sale.

Subsequent Dispositions

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

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

On January 14, 2026, the Company disposed of a 60,039 square foot medical outpatient building in Atlanta, Georgia for $21.9 million.

Financing Activities

Common Stock Repurchases

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

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

During 2025, the Company did not repurchase any shares of its common stock.

As of December 31, 2025, the Company had $500.0 million remaining under its current share repurchase authorization.

Subsequent Repurchase Activity

In January 2026, the Company repurchased 2.9 million shares of its common stock at an average price of $17.27 per share for a total of $50.0 million resulting in $450.0 million of authorized share repurchases remaining.

At-The-Market Equity Offering Program

On December 17, 2025, the Company renewed its ATM equity offering program to sell shares of the Company's common stock from time to time in at-the-market sales transactions.

The Company entered into equity distribution agreements with various sales agents having an aggregate offering price of up to $1.0 billion.

As of December 31, 2025, there has been no activity under the program.

Debt Activity

2 unchanged sentences

Mortgage Activity

The following table details the mortgage note repayment activity for the year ended December 31, 2024:

(dollars in millions) TRANSACTION DATE PRINCIPAL BORROWING (REPAYMENT) ENCUMBERED SQUARE FEET CONTRACTUAL INTEREST RATE

Mortgages repaid at maturity:

West Hills, CA 1/6/2024 $ (11.3) 63,012 4.77 %

Atlanta, GA 2/1/2024 (5.6) 40,324 4.12 %

Minnesota 9/1/2024 (7.0) 64,143 4.15 %

Total repayments $ (23.9) 167,479 4.44 %

During 2024, the Company repaid its $350 million Unsecured Term Loan, due 2025 and recognized approximately $0.2 million of accelerated amortization expense included in the loss on extinguishment of debt.

Subsequent Activity

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

On January 14, 2025 the Company made a partial repayment of $10 million on its $300 million Unsecured Term Loan due 2025 .

During the year ended December 31, 2025, the Company repaid in full a mortgage note payable bearing interest at a rate of 4.25% that encumbered a 45,157 square foot property in California.

During the year ended December 31, 2025 , the Company repaid its Senior Notes due 2025 at maturity including $250 million of principal and $4.8 million of accrued interest.

During the year ended December 31, 2025, the Company repaid the $300 million Unsecured Term Loan due January 2026, the $200 million Unsecured Term Loan due January 2026, and the $150 million Unsecured Term Loan due June 2026 and recorded approximately $0.5 million of accelerated amortization expense included in the loss on extinguishment of debt.

Interest Rate Swaps

As of December 31, 2024, the Company had outstanding interest rate derivatives totaling approximately $1.1 billion to hedge one-month Secured Overnight Financing Rate (“SOFR”).

As of December 31, 2025, the Company had seven outstanding interest rate derivatives totaling $500 million to hedge one-month Secured Overnight Financing Rate (“SOFR”).

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

EXPIRATION AMOUNT WEIGHTED

EXPIRATION DATE NOTIONAL AMOUNT WEIGHTED

May 2026 $ 100,000 2.15 %

June 2026 150,000 3.83 %

December 2026 150,000 3.84 %

7 unchanged sentences

Senior Notes due 2026

Senior Notes due 2026 3

$ 600,000 $ 595,026 0.6 3.50 % 4.94 %

3 unchanged sentences

Senior Notes due 2030 650,000 597,188 4.1 3.10 % 5.30 %

650,000 586,028 5.1 3.10 % 5.30 %

Senior Notes due 2030

3 unchanged sentences

Senior Notes due 2031 800,000 685,874 5.2 2.00 % 5.13 %

800,000 667,233 6.2 2.00 % 5.13 %

Total Senior Notes Outstanding 3,449,285 3,263,909 2.90 % 4.47 %

$1.5 billion unsecured credit facility 4

— — 2.8 SOFR + 0.94% 5.30 %

$200 million unsecured term loan 200,000 199,896 1.4 SOFR + 1.04% 5.59 %

$1.5 billion unsecured credit facility 120,000 120,000 4.5 SOFR + 0.84% 4.61 %

$200 million unsecured term loan 200,000 199,635 3.5 SOFR + 0.94% 4.81 %

$300 million unsecured term loan 3

300,000 299,981 1.8 SOFR + 1.04% 5.59 %

$200 million unsecured term loan 3

200,000 199,641 2.5 SOFR + 1.04% 5.59 %

$300 million unsecured term loan 300,000 299,055 3.0 SOFR + 0.94% 4.81 %

3 unchanged sentences

2 Includes extension options.

3 Debt instruments assumed as part of the Merger with Legacy HTA on July 20, 2022.

The amounts shown represent fair value adjustments.

4 As of December 31, 2024, the Company had no outstanding borrowings under the Unsecured Credit Facility with a remaining borrowing capacity of $1.5 billion.

Subsequent Debt Activity

In February 2026, the Company entered into a commercial paper dealer agreement to issue short-term commercial paper notes up to $600.0 million, with maturities up to 364 days.

The program is back-stopped by the Unsecured Credit Facility.

The notes will be issued at par less a discount representing an interest factor, or if interest bearing, at par.

Debt Covenant Information

10 unchanged sentences

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.

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.

Trends and Matters Impacting Operating Results

7 unchanged sentences

Acquisitions and Dispositions

In 2024, the Company completed no property acquisitions.

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

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

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

The Company had no real estate acquisition activity for the year ended December 31, 2025.

The Company disposed of 70 properties in 2025 for sales prices totaling approximately $1.1 billion.

These transactions yielded net cash proceeds of approximately $1.0 billion, net of approximately $77.6 million of closing costs and related adjustments, and $11.8 million in Company financed notes.

The weighted average capitalization rate for these sales was 6.7%.

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

8 unchanged sentences

Raleigh, NC 1 $ 5,500 $ 48,474 $ 9,526 $ 58,000 122,991

Phoenix, AZ 1 33,609 54,950 3,050 58,000 101,086

Fort Worth, TX 1 15,028 44,360 3,840 48,200 101,279

1 unchanged sentence

Redevelopment Activity

Washington, DC 3 $ 5,075 $ 15,853 $ 1,704 $ 17,557 259,290

Charlotte, NC 2 $ 13,849 $ 30,934 $ 4,116 $ 35,050 169,135

Houston, TX 2 14,598 $ 27,265 2,735 30,000 314,861

White Plains, NY 1 19,105 $ 23,534 1,366 24,900 65,851

Charlotte, NC 1 188 $ 188 19,012 19,200 122,388

Washington, DC 1 5,105 $ 14,185 1,015 15,200 57,323

White Plains, NY 1 4,601 4,601 14,799 19,400 65,851

Seattle, WA 1 58 $ 58 13,542 13,600 78,288

Raleigh, NC 1 4,479 $ 5,028 5,772 10,800 40,400

Houston, TX 1 — $ — 10,400 10,400 40,214

Denver, CO 2 11 $ 11 10,189 10,200 78,691

Lucie, FL 1 156 $ 458 8,942 9,400 31,466

Dallas, TX 1 469 $ 469 8,131 8,600 126,121

Denver, CO 1 675 $ 675 6,625 7,300 55,978

Other 8 18,660 $ 19,251 77,549 96,800 849,087

Total 23 $ 77,353 $ 122,056 $ 169,394 $ 291,450 2,029,803

For previously completed development and redevelopment projects, during 2025, the Company funded an additional $38.7 million related to ongoing tenant improvements.

The Company maintains discussions with health systems and developers regarding long-term future new development opportunities.

The Company regularly consults with health systems and developers regarding long-term future new development opportunities.

In addition, the Company continually evaluates its portfolio for accretive redevelopment opportunities.

17 unchanged sentences

Absolute net leases, in which tenants pay substantially all of the building's operating and capital expenses, comprise 4%.

Steward Health

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.

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 made significant progress re-leasing space previously occupied by Steward Health, with leases representing over 80% of the rejected Steward Health square feet.

Prospect Medical

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 revenue.

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

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.

As previously disclosed, 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 of 2025, a subsidiary of 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.

Capital Expenditures

12 unchanged sentences

As of December 31, 2025, the Company had commitments of approximately $161.8 million that are expected to be spent on tenant improvements throughout the portfolio, excluding development properties currently under construction.

First Generation Tenant Improvements & Planned Capital Expenditures for Acquisitions

First generation tenant improvements and planned capital expenditures for acquisition spending totaled $52.4 million and $38.7 million for the years ended December 31, 2024 and 2023, respectively.

First Generation Tenant Improvements

First generation tenant improvements totaled $90.2 million and $52.4 million for the years ended December 31, 2025 and 2024, respectively.

First generation tenant improvements include build out costs related to suite space in shell condition.

Planned capital expenditures for acquisitions include expected near-term fundings that were contemplated as part of the acquisition.

Second Generation Tenant Improvements

28 unchanged sentences

As of December 31, 2025, the Company had a total of 102 single-tenant buildings, with a weighted average lease term of 11.6 years and a weighted average remaining lease term of 5.7 years.

Twenty-two single-tenant buildings have leases that expire in 2025.

Five of these leases have been renewed.

The Company is in negotiations with tenants in fifteen of these buildings and expects the leases to be renewed or the building to be backfilled.

The Company expects the tenants of two of these single-tenant buildings to vacate the buildings upon lease expiration.

The annual base rent for leases that are not expected to renew or be backfilled in 2025 is $4.1 million.

Ten single-tenant buildings have leases that expire in 2026.

Four of the buildings have been renewed.

The Company is in negotiations with tenants in six of these buildings and expects the leases to be renewed or the building to be backfilled.

Operating Leases

1 unchanged sentence

As of December 31, 2025, the Company had 168 properties totaling 12.4 million square feet that were held under ground leases with a remaining weighted average term of 60.6 years, including renewal options.

These ground leases typically have initial terms of 50 to 75 years with one or more renewal options extending the terms to 75 to 100 years, with expiration dates through 2119.

These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119.

Purchase Options

The Company had approximately $55.7 million in real estate properties as of December 31, 2025, that were subject to exercisable purchase options.

The Company has approximately $1.1 billion in real estate properties that are subject to purchase options that will become exercisable after 2024.

The Company has approximate ly $1.0 billion in real estate properties that are subject to purchase options that will become exercisable after 2025.

Additional information about the amount and basis for determination of the purchase price is detailed in the table below (dollars in thousands):

9 unchanged sentences

Total 37 $ 1,078,146

1 Purchase option prices are based on fair market value components that are determined by an appraisal process, except for three properties totaling $45.4 million wi th stated prices or prices based on fixed capitalization rates.

1 Purchase option prices are based on fair market value components that are determined by an appraisal process, except for two properties totaling $ 62.9 million w i th stated prices or prices based on fixed capitalization rates.

2 These purchase options have been exercisable for an average of 21.5 years.

3 Includes two medical outpatient properties tha t are recorded in the line item Investment in financing receivable, net on the Company's Consolidated Balance Sheet.

3 Includes two medical outpatient properties that are recorded in the line item Investment in financing receivable, net on the Company's Consolidated Balance Sheet.

Debt Management

The Company maintains a flexible capital structure that allows it to fund new investments and operate its existing portfolio.

The Company has approximately $45.3 million of mortgage notes payable, maturing in 2025 and 2026 , most of which were assumed when the Company acquired properties.

The Company has approximately $28.9 million of mortgage notes payable, maturing in 2026, most of which were assumed when the Company acquired properties.

The Company will repay mortgages with cash on hand or borrowings under the Unsecured Credit Facility.

11 unchanged sentences

The Company continues to evaluate the impact of the new standards that have not yet been adopted.

Other Items Impacting Operations

General and administrative expenses will fluctuate quarter-to-quarter.

In the first quarter of each year, general and administrative expense include increases for certain expenses such as payroll taxes and healthcare savings account fundings.

The Company expects these customary expenses to increase by approximately $0.9 million in the first quarter of 2025.

Approximately $0.8 million is not expected to recur in subsequent quarters in 2025.

Results of Operations

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

The Company’s consolidated results of operations for 2024 compared to 2023 were impacted by acquisitions, developments, dispositions, gain on sales and impairment charges recorded on real estate properties, and capital markets transactions.

The Company’s consolidated results of operations for 2025 compared to 2024 were impacted by developments, dispositions, gain on sales and impairment charges recorded on real estate properties, and capital markets transactions.

Rental income decreased $94.7 million, or 7.7%, as a result of the following:

• Dispositions in 2024 and 2025 resulted in a decrease of $130.8 million.

• Acquisitions and developments in 2023 and 2024 contributed $2.3 million.

• Leasing activity, including contractual rent increases contributed $24.5 million.

• Reversed revenue related to the Steward bankruptcy resulted in a decrease of $6.2 million, including straight-line rent of $2.7 million.

• Reversed revenue related to the Prospect Medical bankruptcy resulted in a decrease of $0.7 million.

Other operating income increased $1.7 million, or 9.8%, from the prior year primarily as a result of income from management fees.

• Leasing activity, including contractual rent increases, resulted in an increase of $28.3 million.

• Developments completed in 2024 and 2025 resulted in an increase of $7.8 million.

Interest income decreased $2.1 million, or 12.9%, for the year ended December 31, 2025, compared to the prior year 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 $9.1 million, or 47.3%, for the year ended December 31, 2025, compared to the prior year primarily as a result of income from management fees related to unconsolidated joint ventures and managed properties.

Property operating expenses decreased $24.4 million, or 5.1%, from the prior year primarily as a result of the following activity:

• Dispositions in 2024 and 2025 resulted in a decrease of $45.5 million.

• Acquisitions and developments in 2023 and 2024 resulted in an increase of $0.8 million.

• Developments completed in 2024 and 2025 resulted in an increase of $2.0 million.

• Increases in portfolio operating expenses as follows:

◦ Administrative, primarily leasing commissions, of $5.1 million;

◦ Utilities of $2.7 million;

◦ Property taxes of $1.9 million;

◦ Security expense of $0.3 million;

◦ Administrative, leasing commissions, and other legal expenses of $7.3 million;

◦ Compensation expense of $4.8 million;

◦ Utilities expense of $3.6 million;

◦ Maintenance and repair expense of $2.1 million;

◦ Janitorial expense of $1.3 million.

• Decreases in portfolio operating expenses were due to maintenance and repair expenses of $1.3 million and compensation expense of $0.8 million.

General and administrative expenses increased approximately $24.7 million, or 42.3%, from the prior year primarily as a result of the following activity:

• Increase in restructuring and severance-related charges of $28.3 million

General and administrative expenses decreased approximately $10.6 million, or 12.7%, from the prior year primarily as a result of the following activity:

• Decrease in payroll and payroll related expenses of approximately $4.1 million.

• Increase in cash compensation expense of $1.4 million.

• Increase in non-cash compensation incentive expense of $0.9 million.

• Other decreases including travel, legal and other administrative costs of $3.5 million.

There were no merger-related costs for the year ended December 31, 2024.

Merger-related costs for the year ended December 31, 2023, included legal and consulting fees, which were offset by a refund related to state transfer taxes.

• Decrease in restructuring and severance-related charges of $3.5 million.

• Decrease in Director fees and non-cash incentive compensation of $1.3 million.

• Other decreases include legal and other administrative costs of $3.0 million.

• Increase in cash incentive compensation expense of $0.9 million.

• Increase in non-cash incentive compensation of $0.4 million.

Depreciation and amortization expense decreased $111.2 million, or 16.5%, from the prior year primarily as a result of the following activity:

• Dispositions in 2024 and 2025 resulted in a decrease of $81.1 million.

• Acquisitions and developments in 2023 and 2024 resulted in an increase of $0.9 million.

• Various building and tenant improvement expenditures resulted in an increase of $39.0 million.

• Assets that became fully depreciated resulted in a decrease of $60.1 million.

• Developments completed in 2024 and 2025 resulted in an increase of $2.2 million.

• Various building and tenant improvement expenditures resulted in an increase of $27.8 million.

Other Income (Expense)

Other income (expense), as an expense increased $361.2 million, or 107.4%, from the prior year mainly due to the following activity:

Other income (expense), as an expense decreased $355.0 million, or 50.9%, from the prior year mainly due to the following activity:

Gain on Sales of Real Estate Properties

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Interest expense decreased $33.4 million for the year ended December 31, 2025 compared to the prior year.

The components of interest expense are as fol lows:

The components of interest expense are as follows:

Dollars in thousands 2025 2024 $ %

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Contractual interest decreased $27.4 million, or 13.9%, primarily as a result of the following activity:

• The Unsecured Term Loans accounted for an decrease of approximately $4.8 million, primarily due to the repayment of the $350 million Unsecured Term Loan, due 2025.

• The Unsecured Credit Facility accounted for a decrease of approximately $11.4 million .

• Active interest rate derivatives account ed for a decrease of $2.5 million, while expired interest rate derivatives accounted for an increase of $8.2 million.

• The unsecured term loans accounted for a decrease of approximately $18.5 million.

• The unsecured term loan repayments accounted for a decrease of approximately $15.1 million.

• The Unsecured Credit Facility accounted for an increase of approximately $3.0 million as a result of an increased weighted average balance outstanding.

• Active interest rate swaps accounted for an increase of $9.7 million, while expired interest rate swaps accounted for an increase of $0.3 million.

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

• The repayment of the Senior Note due 2025 accounted for a decrease of $6.5 million.

Debt extinguishment costs

During the year ended December 31, 2025, the Company recorded approximately $0.5 million in debt extinguishment costs related to the Unsecured Credit Facility, which replaced the Company's prior credit facility.

Impairment of Real Estate Assets and Credit Loss Reserves

Impairment of real estate assets in 2024 totaling approximately $249.9 million is associated with completed or planned disposition activity.

During the year ended December 31, 2025, the Company recognized impairments totaling $361.1 million related to completed or planned dispositions, changes in holding periods or changes in property use.

In addition, the Company recorded $1.6 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.

Impairment of real estate assets in 2024 totaling approximately $249.9 million related to completed or planned dispositions, changes in holding periods or changes in property use.

Additionally, the Company recorded $59.5 million of credit loss reserves on its mortgage note receivables and a $4.1 million fair value adjustment for an equity investment in other assets.

Impairment of real estate assets in 2023 totaling approximately $149.7 million is associated with completed or planned disposition activity.

Additionally, the Company recorded $5.2 million of credit loss reserves on its mortgage notes receivable.

Impairment of Goodwill

During the first quarter of 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 accompanying this report for more details.

There was no goodwill impairment in 2025.

statements of operations.

See Note 1 to the Consolidated Financial Statements accompanying this report for more details.

Equity income (loss) from unconsolidated joint ventures

The Company recognizes its proportionate share of losses from its unconsolidated joint ventures.

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

The losses are primarily attributable to non-cash depreciation expense.

See Note 4 for more details regarding the Company's unconsolidated joint ventures.

Interest and other income (expense)

During 2025, the Company recorded approximately $4.3 million from Accumulated other comprehensive income ("AOCI") to other expense related to ineffectiveness and subsequent termination of eight interest rate swaps.

See Note 10 to the Consolidated Financial Statements in this report for more details regarding the Company's derivative accounting.

In addition, the Company recognized income of approximately $0.8 million primarily due to a Federal ERC program (Employee Retention Credit) providing cash payment for employee retention during the COVID-19 pandemic totaling $4.4 million, net of a charge for a merger-related transfer tax charge that was finalized during the fourth quarter of 2025 totaling $3.6 million.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

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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, deferred financing fees amortization, share-based compensation expense

and provision for bad debts, net;

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

FAD is presented by adding to Normalized FFO non-real estate depreciation and amortization, deferred financing fees amortization, share-based compensation expense and provision for bad debts, net;

and subtracting straight-line rent income, net of expense, and maintenance capital

expenditures, including second generation tenant improvements, capital expenditures and leasing commissions paid.

The Company's definition of these terms may not be comparable to that of other real estate companies as they may have different methodologies for computing these amounts.

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Amounts in thousands, except per share data 2025 2024 2023

Net (loss) income attributable to common stockholders $ (654,485) $ (278,261) $ 40,897

Net (loss) income attributable to common stockholders per diluted share 1

Net loss attributable to common stockholders $ (246,071) $ (654,485) $ (278,261)

Net loss attributable to common stockholders per diluted share 1

$ (0.71) $ (1.81) $ (0.74)

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Non-controlling loss from operating partnership units (3,497) (9,149) (3,426)

Unconsolidated JV depreciation and amortization 20,678 18,116 12,722

Unconsolidated JV depreciation, amortization and impairment 27,769 20,678 18,116

FFO adjustments $ 736,119 $ 847,742 $ 825,387

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Merger-related costs — — (1,952)

— (1,952) 103,380

Lease intangible amortization (1,350) (2,054) 860

Non-routine legal costs/forfeited earnest money received 1,077 175 771

Non-routine tax and legal matters (118) 1,077 175

Debt financing costs 2

5,107 237 (62)

Restructuring and severance-related charges 26,318 29,852 1,445

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Normalized FFO attributable to common stockholders per common share - diluted $ 1.61 $ 1.56 $ 1.57

Non-real estate depreciation and amortization 1,478 2,566 2,217

Non-real estate depreciation and other amortization, net 6,114 1,478 2,566

Non-cash interest amortization, net 5

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

2 Includes costs incurred related to the Merger.

For the year ended December 31, 2023, Merger-related costs are net of a refund of $17.8 million for transfer taxes paid during the year ended December 31, 2022.

2 For the year ended December 31, 2025, includes loss on debt extinguishment, loss on derivatives, and legal fees related to the Unsecured Credit Facility, which replaced the Company's prior credit facility.

3 For the year ended December 31, 2025, includes $1.6 million credit loss reserves on two mortgage note receivables 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 year ended December 31, 2024, includes $59.6 million in credit loss reserves, net of recoveries on four notes receivable included in "Impairment of real estate properties and credit loss reserves" on the Statement of Operations, $5.1 million gain on sale of other assets included in "Gains on sales of real estate and other assets" on the Statement of Operations, $4.1 million loss on other asset included in "Impairment of real estate properties and credit loss reserves" on the Statement of Operations, and a $1.1 million straight line rent reversal included in "Rental income" on the Statement of Operations.

For the year ended December 31, 2023, includes a $5.2 million credit allowance for a mezzanine loan included in "Impairment of real estate properties and credit loss reserves" on the Statement of Operations and $3.4 million reserve included in “Rental Income” on the Statement of Operations for previously deferred rent and straight line rent for three skilled nursing facilities.

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

4 Includes the Company's proportionate share of normalizing items related to unconsolidated joint ventures such as lease intangibles and transaction costs.

5 Includes the amortization of deferred financing costs, discounts and premiums, and non-cash financing receivable amortization.

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Reconciliation of Same Store Cash NOI

SAME STORE RECONCILIATION

YEAR ENDED DECEMBER 31,

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Same store cash NOI (excluding JVs) $ 601,925 $ 573,072

Includes transaction costs, Merger-related costs, rent reserves, above and below market ground lease intangible amortization, leasing commission amortization and ground lease straight-line rent expense.

Includes management fee income, interest, above and below market lease intangible amortization, lease inducement amortization, lease terminations and tenant improvement overage amortization.

Includes transaction costs, rent reserves, above and below market ground lease intangible amortization, leasing commission amortization, non-cash adjustments for financing receivables, and ground lease straight-line rent.

Includes management fee income, interest, above and below market lease intangible amortization, lease inducement amortization, lease termination fees, deferred financing cost amortization and principal related to investment in financing receivable, and tenant improvement overage amortization.

Reconciliation of Same Store Properties

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Wholly owned and joint venture acquisitions 30 183,779 2,193 95.3 %

Wholly owned and joint venture development completions 5 191,113 553 57.7 %

Wholly owned and joint venture redevelopments 25 545,331 1,874 63.0 %

Planned Dispositions 3 50,245 144 58.3 %

Wholly owned and joint venture re/development completions 4 139,279 332 60.8 %

Wholly owned and joint venture re/developments 27 796,431 2,371 70.0 %

Total 562 $ 10,605,342 32,731 90.4 %

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Management has reviewed the Company’s critical accounting policies with the Audit Committee of the Board of Directors.

Management believes the following paragraphs in this section describe the application of critical accounting policies and estimates by management to arrive at the critical accounting estimates reflected in the Consolidated Financial

The Company’s accounting policies are more fully discussed in Note 1 to the Consolidated Financial Statements.

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The rules and regulations on capitalizing costs and the subsequent depreciation or amortization of those costs versus expensing them in the period incurred vary depending on the type of costs and the reason for capitalizing the costs.

Direct costs of a development project generally include construction costs, professional services such as architectural and legal costs, travel expenses, and land acquisition costs as well as other types of fees and expenses.

Direct costs of development and redevelopment projects generally include construction costs, professional services such as architectural and legal costs, travel expenses, and land acquisition costs as well as other types of fees and expenses.

These costs are capitalized as part of the basis of an asset to which such costs relate.

Indirect costs include capitalized interest and overhead costs.

Indirect costs are capitalized during construction and on the unoccupied space in a property for up to one year after the property is ready for its intended use.

Indirect costs are capitalized during construction and on the unoccupied space in a property for up to one year after the space is ready for its intended use.

Capitalized interest is calculated using the weighted average interest rate of the Company's unsecured debt or the interest rate on project specific debt, if applicable.

The Company’s overhead costs are based on overhead load factors that are charged to a project based on direct time incurred.

The Company computes the overhead load factors annually for its acquisition and development departments, which have employees who are involved in the projects.

The Company computes the overhead load factors annually for its employees who are involved in the projects.

The overhead load factors are computed to absorb that portion of indirect employee costs (payroll and benefits, training, and similar costs) that are attributable to the productive time the employee incurs working directly on projects.

The employees in the Company’s development departments who work on these projects maintain and report their hours, by project.

The employees who work on these projects maintain and report their hours, by project.

Employee costs that are administrative, such as vacation time, sick time, or general and administrative time, are expensed in the period incurred.

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The Company expensed costs related to the pursuit of acquisitions and dispositions totaling $1.0 million, $1.7 million and $0.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

In addition, the Company expensed costs related to the

pursuit of developments totaling $1.1 million, $0.8 million, and $2.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

In addition, the Company expensed costs related to the pursuit of developments totaling $1.0 million, $1.1 million, and $0.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Valuation of Long-Lived Assets Held and Used, Unconsolidated Joint Ventures, Intangible Assets and Goodwill

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The Company's reviews are typically performed as of December 31 of each year.

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

result, a goodwill evaluation was performed.

In 2025, a review was not necessary as the Company's goodwill asset had a zero balance.

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 Consolidated Statements of Operations.

In 2023, a review indicated that no impairment had occurred with respect to the Company's goodwill asset of $250.5 million.

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 Consolidated Statement of Operations for the year ended December 31, 2024.

Long-Lived Assets to be Disposed of by Planned Sale

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The effect of any required adjustment is reflected in income from continuing operations at the date of the decision not to sell.

The Company recorded impairment charges totaling $249.9 million for the year ended December 31, 2024 related to real estate properties and other long-lived assets.

The impairment charges related to 51 properties sold and 13 additional properties associated with planned disposition activity in 2025.

The Company recorded impairment charges of $149.7 million in 2023.

The Company recorded impairment charges totaling $361.1 million and $249.9 million, respectively, for the years ended December 31, 2025 and December 31, 2024, related to real estate properties sold and properties with changes in the expected holding periods.

Valuation of Asset Acquisitions

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With regard to the elements of estimating the “as if vacant” values of the property and the intangible assets, including the absorption period, occupancy increases during the absorption period, tenant improvement amounts, and leasing commission percentages, the Company uses the same absorption period and occupancy assumptions for similar property types.

Any remaining excess purchase price is then allocated

to the tangible and intangible assets based on their relative fair values.

Any remaining excess purchase price is then allocated to the tangible and intangible assets based on their relative fair values.

The identifiable tangible and intangible assets are then subject to depreciation and amortization.

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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 7. Management’s Discussion and Analysis