National Healthcare Properties, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Exchange Act is recorded, processed, summarized and reported within the required time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls. Our Chief Executive Officer and Chief Financial Officer, carried out an evaluation, together with other members of our management, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of December 31, 2020 at a reasonable level of assurance. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway 82 Table of Contents Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on its assessment, our management concluded that, as of December 31, 2020, our internal control over financial reporting was effective based on those criteria. This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. The effectiveness of our internal control over financial reporting has not been audited by our independent registered public accounting firm because we are a “non-accelerated filer” as defined under SEC rules. Changes in Internal Control Over Financial Reporting During the three months ended December 31, 2020, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. PART III Item 10. Directors, Executive Officers and Corporate Governance. We have adopted a Code of Business Conduct and Ethics that applies to all of our executive officers and directors, including but not limited to, our principal executive officer and principal financial officer. A copy of our code of ethics may be obtained, free of charge, by sending a written request to our executive office: 650 Fifth Avenue - 30 th Floor, New York, NY 10019, Attention: Chief Financial Officer. Our Code of Business Conduct and Ethics is also publicly available on our website at www.healthcaretrustinc.com. If we make any substantive amendments to the code of ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Business Conduct and Ethics to our chief executive officer, chief financial officer, chief accounting officer or controller or persons performing similar functions, we will disclose the nature of the amendment or waiver on that website or in a report on Form 8-K. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2021 annual meeting of stockholders to be filed not later than 120 days after the end of the 2020 fiscal year, and is incorporated herein by reference. Item 11. Executive Compensation. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2021 annual meeting of stockholders to be filed not later than 120 days after the end of the 2020 fiscal year, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Securities Authorized for Issuance Under Equity Compensation Plans Restricted Share Plan We have an employee and director incentive restricted share plan (as amended from time to time, the “RSP”), which provides us with the ability to grant awards of restricted shares to our directors, officers and employees (if we ever have employees), and, among other eligible persons, employees of the Advisor and its affiliates who provide services to us. For additional information, see Note 11 — Equity-Based Compensation to our consolidated financial statements included in this Annual Report on Form 10-K. 83 The following table sets forth information regarding securities authorized for issuance under the RSP as of December 31, 2020: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a) ) (a) (b) (c) Equity Compensation Plans approved by security holders — — 3,027,609 (1) Equity Compensation Plans not approved by security holders — — — Total — — 3,027,609 (1) ________ (1) The total number of shares of common stock that may be subject to awards granted under the RSP may not exceed 5.0% of our outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 3,445,866 shares (as such number may be further adjusted for stock splits, stock dividends, combinations and similar events). As of December 31, 2020, we had 93,775,746 shares of common stock issued and outstanding and 421,135 shares of common stock that were subject to awards granted under the RSP. For additional information on the RSP, please see Note 11 — Equity-Based Compensation to our consolidated financial statements included in this Annual Report on Form 10-K . The other information required by this Item will be set forth in our definitive proxy statement with respect to our 2021 annual meeting of stockholders to be filed not later than 120 days after the end of the 2020 fiscal year, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2021 annual meeting of stockholders to be filed not later than 120 days after the end of the 2020 fiscal year, and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information required by this Item will be set forth in our definitive proxy statement with respect to our 2021 annual meeting of stockholders to be filed not later than 120 days after the end of the 2020 fiscal year, and is incorporated herein by reference. PART IV Item 15. Exhibits and Financial Statement Schedules. (a) Financial Statements and Financial Statement Schedules 1. Financial Statements: See the Index to Consolidated Financial Statements at page F-1 of this Annual Report on Form 10-K. 2. Financial Statement Schedules: The following financial statement schedule is included herein at page F-42 of this Annual Report on Form 10-K: Schedule III — Real Estate and Accumulated Depreciation (b) Exhibits See Exhibit Index below. Table of Contents EXHIBIT INDEX The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended December 31, 2020 (and are numbered in accordance with Item 601 of Regulation S-K): Exhibit No. Description 3.1 (1) Articles of Amendment and Restatement for Healthcare Trust, Inc. 3.2 (2) Articles Supplementary of Healthcare Trust, Inc. relating to election to be subject to Section 3-803 of the Maryland General Corporation Law, dated November 9, 2017. 3.3 (3) Articles Supplementary relating to the designation of shares of 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, dated December 6, 2019. 3.4 (4) Amended and Restated Bylaws of Healthcare Trust, Inc. 3.5 (5) Amendment to Amended and Restated Bylaws of Healthcare Trust, Inc. 3. 6 (6) Articles Supplementary designating additional shares of 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock 4.1 (7) Agreement of Limited Partnership of Healthcare Trust Operating Partnership, L.P. (f/k/a American Realty Capital Healthcare Trust II Operating Partnership, L.P.), dated as of February 14, 2013 4.2 (8) First Amendment to the Agreement of Limited Partnership of American Realty Capital Healthcare Trust II, L.P., dated as of December 31, 2013 4.3 (9) Second Amendment to the Agreement of Limited Partnership of American Realty Capital Healthcare Trust II, L.P., dated as of April 15, 2015 4.4 (10) Third Amendment, dated December 6, 2019, to the Agreement of Limited Partnership of Healthcare Trust Operating Partnership, L.P., dated February 14, 2013 4.5 * Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 4.6 (11) Rights Agreement, dated May 18, 2020, between Healthcare Trust, Inc.,and Computershare Trust Company, N.A., as Rights Agent. 10.1 (9) Second Amended and Restated Advisory Agreement, dated as of February 17, 2017, by and among the Company, Healthcare Trust Operating Partnership, L.P. and Healthcare Trust Advisors, LLC 10.2 (12) Amendment No. 1, dated as of July 25, 2019, to the Second Amended and Restated Advisory Agreement, by and among Healthcare Trust, Inc., Healthcare Trust Operating Partnership, L.P. and Healthcare Trust Advisors, LLC 10.3 (9) Amended and Restated Property Management and Leasing Agreement, dated as of February 17, 2017, by and among the Company, Healthcare Trust Operating Partnership, L.P. and Healthcare Trust Properties, LLC 10.4 (13) First Amendment, dated as of April 9, 2018, to Amended and Restated Property Management and Leasing Agreement, by and among Healthcare Trust, Inc., Healthcare Trust Operating Partnership, L.P., and Healthcare Trust Properties, LLC 10.5 (14) Indemnification Agreement, dated as of December 31, 2014, with Directors, Officers, Advisor and Dealer Manager 10.6 (14) Indemnification Agreement, dated April 14, 2015, with Mr. Randolph C. Read 10.7 (15) Form of Restricted Stock Award Agreement Pursuant to the Employee and Director Incentive Restricted Share Plan of Healthcare Trust, Inc. 10.8 (16) Master Credit Facility Agreement, dated as of October 31, 2016, by and among the borrowers party thereto and KeyBank National Association. 10.9 (4) First Amendment to Master Credit Facility, dated April 26, 2017, by among the borrowers party thereto and KeyBank National Association 10.10 (4) Reaffirmation, Joinder and Second Amendment to Master Credit Facility, dated October 26, 2017, by among the borrowers party thereto and KeyBank National Association 10.11 (16) Master Credit Facility Agreement, dated as of October 31, 2016, by and among the borrowers party thereto and Capital One Multifamily Finance, LLC. 10.12 (4) Reaffirmation, Joinder and First Amendment to Master Credit Facility, dated March 30, 2017, by among the borrowers party thereto and Capital One Multifamily Finance, LLC 10.13 (4) Second Amendment to Master Credit Facility, dated October 26, 2017, by among the borrowers party thereto and Capital One Multifamily Finance, LLC 10.14 (4) Third Amendment to Master Credit Facility, dated March 2, 2018, by among the borrowers party thereto and Capital One Multifamily Finance, LLC 85 Table of Contents Exhibit No. Description 10.15 (17) Amended and Restated Loan Agreement, dated as of December 20, 2019, by and among the borrower entities party thereto, Capital One, National Association and the other lenders party thereto 10.16 (17) Amended and Restated Guaranty of Recourse Obligations, dated as of December 20, 2019, by Healthcare Trust Operating Partnership, L.P. in favor of Capital One, National Association 10.17 (17) Amended and Restated Hazardous Materials Indemnity Agreement, dated as of December 20, 2019, by Healthcare Trust Operating Partnership, L.P. and the borrower entities party thereto, for the benefit of Capital One, National Association 10.18 (2) Amended and Restated Employee and Director Incentive Restricted Share Plan of Healthcare Trust, Inc., effective as of August 31, 2017. 10.19 (2) Form of Restricted Stock Award Agreement Pursuant to the Amended and Restated Employee and Director Incentive Restricted Share Plan of Healthcare Trust, Inc. 10.20 (18) Loan Agreement, dated as of December 28, 2017, among the borrower entities party thereto and Capital One, National Association. 10.21 (18) Guaranty of Recourse Obligation, dated as of December 28, 2017, by Healthcare Trust Operating Partnership, L.P. in favor of Capital One, National Association. 10.22 (18) Hazardous Materials Indemnity Agreement, dated as of December 28, 2017, by Healthcare Trust Operating Partnership, L.P. and the borrower entities party thereto, for the benefit of Capital One, National Association. 10.23 (13) Loan Agreement, dated as of April 10, 2018, by and among the borrowers party thereto, and KeyBank National Association, as lender 10.24 (13) Promissory Note A -1, dated as of April 10, 2018, by the borrowers party thereto in favor of KeyBank National Association, as lender 10.25 (13) Promissory Note A-2, dated as of April 10, 2018, by the borrowers party thereto in favor of KeyBank National Association, as lender 10.26 (13) Guarantee Agreement, dated as of April 10, 2018, by Healthcare Trust Operating Partnership, L.P. in favor of KeyBank National Association, as lender 10.27 (13) Environmental Indemnity Agreement, dated as of April 10, 2018, by the borrowers party thereto and Healthcare Trust Operating Partnership, L.P. in favor of KeyBank National Association, as indemnitee 10.28 (19) Form of Indemnification Agreement 10.29 (20) Amended and Restated Senior Secured Revolving Credit Agreement dated as of March 13, 2019 by and among Healthcare Trust Operating Partnership, L.P., KeyBank National Association and the other lender parties thereto 10.3 0 (21) First Amendment, dated March 24, 2020, to Amended and Restated Senior Secured Revolving Credit Agreement dated as of March 13, 2019 by and among Healthcare Trust Operating Partnership, L.P., KeyBank National Association and the other lender parties thereto 10.3 1 (22) Second Amendment to First Amended and Restated Senior Secured Credit Agreement, entered into as of August 10, 2020, among Healthcare Trust Operating Partnership, L.P., Healthcare Trust, Inc., the other guarantor parties thereto, Keybank National Association and the other lenders party thereto. 16.1 (23) Letter from KPMG LLP to the Securities and Exchange Commission dated March 18, 2019 21.1 * List of Subsidiaries of Healthcare Trust, Inc. 23.1 * Consent of PricewaterhouseCoopers LLP 23.2 * Consent of KPMG LLP 31.1 * Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 * Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 * Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.1 (24) Second Amended and Restated Share Repurchase Program of Healthcare Trust, Inc. 99.2 (25) Amendment to Second Amended and Restated Share Repurchase Program of Healthcare Trust, Inc. 99.3 (26) Second Amendment to Second Amended and Restated Share Repurchase Program 99.4 (27) Third Amendment to Second Amended and Restated Share Repurchase Program 99.5 (28) Fourth Amendment to Second Amended and Restated Share Repurchase Program 99.6 (29) Fifth Amendment to Second Amended and Restated Share Repurchase Program 86 Table of Contents Exhibit No. Description 101.INS * XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH * XBRL Taxonomy Extension Schema Document. 101.CAL * XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF * XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB * XBRL Taxonomy Extension Label Linkbase Document. 101.PRE * XBRL Taxonomy Extension Presentation Linkbase Document. 104 * Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. ________ * Filed herewith (1) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 6, 2016. (2) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed with the Securities and Exchange Commission on November 14, 2017. (3) Filed as an exhibit to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on December 6, 2019. (4) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 20, 2018. (5) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 19, 2020. (6) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 15, 2020. (7) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 filed with the Securities and Exchange Commission on May 13, 2013. (8) Filed as an exhibit to the Company’s Quarterly Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the Securities and Exchange Commission on March 7, 2014. (9) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 17, 2017. (10) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 6, 2019. (11) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 19, 2020. (12) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2019. (13) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 16, 2018. (14) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on April 15, 2015. (15) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the Securities and Exchange Commission on August 15, 2016. (16) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed with the Securities and Exchange Commission on November 10, 2016. (17) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 27, 2019. (18) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 4, 2018. (19) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2018 filed with the Securities and Exchange Commission on August 3, 2018. (20) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 14, 2019. (21) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 24, 2020. (22) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on August 13, 2020. (23) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2019. (24) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2017. (25) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 29, 2019. (26) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 27, 2019. (27) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2019. (28) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 21, 2019. (29) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 9, 2020. Item 16. Form 10-K Summary. Not applicable. 87 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 29th day of March, 2021. HEALTHCARE TRUST, INC. By /s/ Edward M. Weil, Jr. Edward M. Weil, Jr. Chief Executive Officer and President (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Capacity Date /s/ Leslie D. Michelson Non-Executive Chairman of the Board of Directors, Independent Director March 29, 2021 Leslie D. Michelson /s/ Katie P. Kurtz Chief Financial Officer, Treasurer and Secretary March 29, 2021 Katie P. Kurtz (Principal Financial Officer and Principal Accounting Officer) /s/ Edward M. Weil, Jr. Chief Executive Officer, President and Director March 29, 2021 Edward M. Weil, Jr. (Principal Executive Officer) /s/ Elizabeth K. Tuppeny Independent Director March 29, 2021 Elizabeth K. Tuppeny /s/ Edward G. Rendell Independent Director March 29, 2021 Edward G. Rendell /s/ Lee M. Elman Independent Director March 29, 2021 Lee M. Elman /s/ B.J. Penn Independent Director March 29, 2021 B.J. Penn 88 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firms F- 2 Consolidated Balance Sheets as of December 31, 2020 and 2019 F- 5 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2020, 2019 and 2018 F- 6 Consolidated Statements of Changes in Equity for the Years Ended December 31, 2020, 2019 and 2018 F- 7 Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018 F- 8 Notes to Consolidated Financial Statements F- 10 Financial Statement Schedule: Schedule III — Real Estate and Accumulated Depreciation F- 60 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Healthcare Trust, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Healthcare Trust, Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive loss, of changes in equity and of cash flows for the years then ended, including the related notes and financial statement schedule as of December 31, 2020 and for the years ended December 31, 2020 and 2019 listed in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We also have audited the adjustments to the 2018 consolidated financial statements to retrospectively apply the stock dividends as described in Note 1. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2018 consolidated financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2018 consolidated financial statements taken as a whole. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud . The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Purchase Price Allocations for Property Acquisitions As described in Notes 2 and 3 to the consolidated financial statements, during the year ended December 31, 2020, the Company completed real estate acquisitions of $110.7 million. For acquired properties with leases classified as operating leases, management allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. Management utilizes various estimates, processes and information to determine the as-if vacant property value. Management estimates fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, fair market lease rates, discount rates and land values per square foot. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the F-2 Table of Contents Report of Independent Registered Public Accounting Firm leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The principal considerations for our determination that performing procedures relating to purchase price allocations for property acquisitions is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of tangible and intangible assets acquired and liabilities assumed; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to capitalization rates, fair market lease rates, discount rates and land values per square foot; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) reading the purchase agreements and lease documents; (ii) testing the completeness and accuracy of underlying data used by management in the fair value estimates, and (iii) testing management’s process for estimating the fair value of tangible and intangible assets acquired and liabilities assumed, including testing management’s projected cash flows and evaluating the accuracy of valuation outputs. Testing management’s process included evaluating the appropriateness of the valuation methods and reasonableness of the significant assumptions related to capitalization rates, fair market lease rates, discount rates and land values per square foot. Evaluating the reasonableness of the significant assumptions included considering whether these assumptions were consistent with external market data, comparable transactions, and evidence obtained in other areas of the audit. In conjunction with certain purchase price allocations, professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of certain assumptions utilized by management related to capitalization rates, fair market lease rates, discount rates and land values per square foot. /s/ PricewaterhouseCoopers LLP New York, New York March 29, 2021 We have served as the Company's auditor since 2019. F-3 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Healthcare Trust, Inc.: Opinion on the Consolidated Financial Statements We have audited, before the effects of the adjustments to retrospectively apply the effects of the stock dividend described in Note 1, the consolidated statements of operations and comprehensive loss, changes in equity, and cash flows of Healthcare Trust, Inc. and subsidiaries (the Company) for the year ended December 31, 2018, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). The 2018 consolidated financial statements before the effects of the adjustments described in Note 1 are not presented herein. In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the effects of the stock dividend described in Note 1, present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended December 31, 2018, in conformity with U.S. generally accepted accounting principles. We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the effects of the stock dividend described in Note 1 and affecting per share amounts in the consolidated statements of operations and comprehensive loss, changes in equity, Note 2, Note 8 and Note 14, and accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ KPMG LLP We served as the Company’s auditor from 2014 to 2019. Chicago, Illinois March 13, 2019 F-4 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) December 31, 2020 2019 ASSETS Real estate investments, at cost: Land $ 212,651 $ 207,335 Buildings, fixtures and improvements 2,133,057 2,004,116 Acquired intangible assets 276,015 269,616 Total real estate investments, at cost 2,621,723 2,481,067 Less: accumulated depreciation and amortization ( 512,775 ) ( 427,476 ) Total real estate investments, net 2,108,948 2,053,591 Assets held for sale 90 70,839 Cash and cash equivalents 72,357 95,691 Restricted cash 17,989 15,908 Derivative assets, at fair value 13 392 Straight-line rent receivable, net 23,322 21,182 Operating lease right-of-use assets 13,912 14,351 Prepaid expenses and other assets (including $ 1,278 and $ 394 due from related parties as of December 31, 2020 and 2019, respectively) 34,932 39,707 Deferred costs, net 15,332 13,642 Total assets $ 2,286,895 $ 2,325,303 LIABILITIES AND EQUITY Mortgage notes payable, net $ 542,698 $ 528,284 Credit facilities, net 674,551 605,269 Market lease intangible liabilities, net 10,803 12,052 Derivative liabilities, at fair value 38,389 5,305 Accounts payable and accrued expenses (including $ 299 due to related parties as of December 31, 2020) 42,271 43,094 Operating lease liabilities 9,155 9,133 Deferred rent 6,914 8,521 Distributions payable 742 6,901 Total liabilities 1,325,523 1,218,559 Stockholders’ Equity 7.375 % Series A cumulative redeemable perpetual preferred stock, $ 0.01 par value, 2,210,000 and 1,610,000 authorized as of December 31, 2020 and 2019, respectively; 1,610,000 issued and outstanding as of December 31, 2020 and 2019 16 16 Common stock, $ 0.01 par value, 300,000,000 shares authorized, 95,040,783 (including 1,265,037 shares paid as a stock dividend on January 15, 2021) and 92,356,664 shares of common stock issued and outstanding as of December 31, 2020 and 2019, respectively 938 923 Additional paid-in capital 2,104,261 2,078,628 Accumulated other comprehensive loss ( 39,673 ) ( 7,043 ) Distributions in excess of accumulated earnings ( 1,108,557 ) ( 971,190 ) Total stockholders’ equity 956,985 1,101,334 Non-controlling interests 4,387 5,410 Total equity 961,372 1,106,744 Total liabilities and equity $ 2,286,895 $ 2,325,303 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and per share data) Year Ended December 31, 2020 2019 2018 Revenue from tenants $ 381,612 $ 374,914 $ 362,406 Operating expenses: Property operating and maintenance 243,548 234,185 220,997 Impairment charges 36,446 55,969 20,655 Operating fees to related parties 23,922 23,414 23,071 Acquisition and transaction related 173 362 302 General and administrative 21,572 20,530 17,275 Depreciation and amortization 81,053 81,032 83,212 Total expenses 406,714 415,492 365,512 Operating loss before gain (loss) on sale of real estate investments ( 25,102 ) ( 40,578 ) ( 3,106 ) Gain (loss) on sale of real estate investments 5,230 8,790 ( 70 ) Operating loss ( 19,872 ) ( 31,788 ) ( 3,176 ) Other income (expense): Interest expense ( 51,519 ) ( 56,059 ) ( 49,471 ) Interest and other income 44 7 23 Loss on non-designated derivatives ( 102 ) ( 68 ) ( 157 ) Total other expenses ( 51,577 ) ( 56,120 ) ( 49,605 ) Loss before income taxes ( 71,449 ) ( 87,908 ) ( 52,781 ) Income tax expense ( 4,061 ) ( 399 ) ( 197 ) Net loss ( 75,510 ) ( 88,307 ) ( 52,978 ) Net (income) loss attributable to non-controlling interests ( 303 ) 393 216 Allocation for preferred stock ( 2,968 ) ( 173 ) — Net loss attributable to common stockholders ( 78,781 ) ( 88,087 ) ( 52,762 ) Other comprehensive income (loss): Unrealized (loss) gain on designated derivatives ( 32,630 ) ( 11,625 ) 2,109 Comprehensive loss attributable to common stockholders $ ( 111,411 ) $ ( 99,712 ) $ ( 50,653 ) Weighted-average common shares outstanding — Basic and Diluted (1) 94,639,833 94,433,640 93,593,719 Net loss per common share attributable to common stockholders — Basic and Diluted (1) $ ( 0.83 ) $ ( 0.93 ) $ ( 0.56 ) _____ (1) Retroactively adjusted for the effects of the Stock Dividends (see Note 1 ). The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Years Ended December 31, 2020, 2019 and 2018 (In thousands, except share data) Preferred Stock Common Stock Accumulated Other Comprehensive Income Number of Shares Par Value Number of Shares Par Value Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Total Stockholders’ Equity Non-controlling Interests Total Equity Balance, December 31, 2017 — $ — 91,002,766 $ 910 $ 2,009,197 $ 2,473 $ ( 665,026 ) $ 1,347,554 $ 8,505 $ 1,356,059 Common stock issued through distribution reinvestment plan — — 1,720,633 17 35,720 — — 35,737 — 35,737 Common stock repurchases — — ( 759,867 ) ( 8 ) ( 14,194 ) — — ( 14,202 ) — ( 14,202 ) Share-based compensation, net — — — — 1,244 — — 1,244 — 1,244 Distributions declared on common stock, $ 0.92 per share (1) — — — — — — ( 86,543 ) ( 86,543 ) — ( 86,543 ) Distributions to non-controlling interest holders — — — — — — — — ( 492 ) ( 492 ) Unrealized gain on designated derivative — — — — — 2,109 — 2,109 — 2,109 Net loss — — — — — — ( 52,762 ) ( 52,762 ) ( 216 ) ( 52,978 ) Balance, December 31, 2018 — — 91,963,532 919 2,031,967 4,582 ( 804,331 ) 1,233,137 7,797 1,240,934 Impact of adoption of ASC 842 — — — — — — ( 87 ) ( 87 ) — ( 87 ) Issuance of Preferred Stock, net 1,610,000 16 — — 37,601 — — 37,617 — 37,617 Common stock issued through distribution reinvestment plan — — 1,481,395 15 27,195 — — 27,210 — 27,210 Common stock repurchases — — ( 1,103,263 ) ( 11 ) ( 21,102 ) — — ( 21,113 ) — ( 21,113 ) Share-based compensation, net — — 15,000 — 1,319 — — 1,319 — 1,319 Distributions declared on common stock, $ 0.83 per share (1) — — — — — — ( 78,685 ) ( 78,685 ) — ( 78,685 ) Preferred stock dividends declared, $ 0.11 per share — — — — — — ( 173 ) ( 173 ) — ( 173 ) Distributions to non-controlling interest holders — — — — — — — — ( 346 ) ( 346 ) Unrealized loss on designated derivative — — — — — ( 11,625 ) — ( 11,625 ) — ( 11,625 ) Net loss — — — — — — ( 87,914 ) ( 87,914 ) ( 393 ) ( 88,307 ) Rebalancing of ownership percentage — — — — 1,648 — — 1,648 ( 1,648 ) Balance, December 31, 2019 1,610,000 16 92,356,664 923 2,078,628 ( 7,043 ) ( 971,190 ) 1,101,334 5,410 1,106,744 Issuance of Preferred Stock, net — — — — ( 59 ) — — ( 59 ) — ( 59 ) Common stock issued through distribution reinvestment plan — — 875,986 9 14,595 — — 14,604 — 14,604 Common stock repurchases — — ( 705,101 ) ( 7 ) ( 10,539 ) — — ( 10,546 ) — ( 10,546 ) Share-based compensation, net — — — — 1,345 — — 1,345 — 1,345 Distributions declared in common stock, $ 0.21 per share (1) — — 1,248,197 13 19,646 — ( 19,659 ) — — — Distributions declared in cash on common stock, $ 0.42 per share (1) — — — — — — ( 38,839 ) ( 38,839 ) — ( 38,839 ) Preferred stock dividends declared, $ 1.84 per share — — — — — — ( 2,968 ) ( 2,968 ) — ( 2,968 ) Distributions to non-controlling interest holders — — — — — — — — ( 201 ) ( 201 ) Unrealized loss on designated derivative — — — — — ( 32,615 ) — ( 32,615 ) — ( 32,615 ) Buyout of NCI — — — — — ( 88 ) ( 88 ) ( 495 ) ( 583 ) Net loss — — — — — — ( 75,813 ) ( 75,813 ) 303 ( 75,510 ) Rebalancing of ownership percentage — — — — 645 ( 15 ) 630 ( 630 ) — Balance, December 31, 2020 1,610,000 $ 16 93,775,746 $ 938 $ 2,104,261 $ ( 39,673 ) $ ( 1,108,557 ) $ 956,985 $ 4,387 $ 961,372 ______ (1) Per share amounts retroactively adjusted for the effects of the Stock Dividends. The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2020 2019 2018 Cash flows from operating activities: Net loss $ ( 75,510 ) $ ( 88,307 ) $ ( 52,978 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 81,053 81,032 83,212 Amortization (including write-offs) of deferred financing costs 4,059 9,171 8,633 Amortization of terminated swap 846 — — Amortization of mortgage premiums and discounts, net 60 ( 162 ) ( 263 ) (Accretion) amortization of market lease and other intangibles, net ( 80 ) ( 4 ) 255 Bad debt expense 2,708 6,464 14,797 Equity-based compensation 1,345 1,319 1,244 Loss (gain) on non-designated derivative instruments 102 68 157 (Gain) loss on sales of real estate investments, net ( 5,230 ) ( 8,790 ) 70 Impairment charges 36,446 55,969 20,655 Deferred tax valuation allowance 4,641 — — Changes in assets and liabilities: Straight-line rent receivable ( 2,409 ) ( 3,831 ) ( 7,744 ) Prepaid expenses and other assets ( 63 ) ( 9,667 ) ( 16,888 ) Accounts payable, accrued expenses and other liabilities ( 4,554 ) 2,632 2,191 Deferred rent ( 1,607 ) 1,510 810 Net cash provided by operating activities 41,807 47,404 54,151 Cash flows from investing activities: Property acquisitions and development costs ( 94,984 ) ( 91,998 ) ( 128,056 ) Capital expenditures and other assets acquired ( 21,892 ) ( 16,719 ) ( 12,910 ) Proceeds from sales of real estate investments 34,385 62,468 25,903 Net cash used in investing activities ( 82,491 ) ( 46,249 ) ( 115,063 ) Cash flows from financing activities: Payments on credit facilities ( 26,091 ) ( 368,300 ) ( 80,000 ) Proceeds from credit facilities 95,000 225,618 147,753 Proceeds from term loan — 150,000 — Proceeds from mortgage notes payable — 136,513 118,700 Payments on mortgage notes payable ( 1,048 ) ( 67,797 ) ( 63,263 ) Payments for derivative instruments ( 97 ) ( 2,147 ) ( 131 ) Payments of deferred financing costs ( 2,241 ) ( 19,532 ) ( 3,354 ) Proceeds from issuance of preferred stock, net ( 1,016 ) 37,617 — Common stock repurchases ( 10,539 ) ( 21,113 ) ( 14,202 ) Distributions paid on common stock ( 31,354 ) ( 51,427 ) ( 55,329 ) Dividends paid on preferred stock ( 2,399 ) — — Buyout of non-controlling interest holders ( 583 ) — — Distributions to non-controlling interest holders ( 201 ) ( 346 ) ( 492 ) Net cash, provided by financing activities 19,431 19,086 49,682 Net change in cash, cash equivalents and restricted cash ( 21,253 ) 20,241 ( 11,230 ) Cash, cash equivalents and restricted cash, beginning of year 111,599 91,358 102,588 Cash, cash equivalents and restricted cash, end of year $ 90,346 $ 111,599 $ 91,358 F-8 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2020 2019 2018 Cash, cash equivalents, end of period $ 72,357 $ 95,691 $ 77,264 Restricted cash, end of period 17,989 15,908 14,094 Cash, cash equivalents and restricted cash, end of period $ 90,346 $ 111,599 $ 91,358 Supplemental disclosures of cash flow information: Cash paid for interest $ 47,878 $ 47,621 $ 43,266 Cash paid for income taxes 315 447 407 Non-cash investing and financing activities: Common stock issued through distribution reinvestment plan $ 14,604 $ 27,210 $ 35,737 Common stock issued through stock dividends 19,659 — — Accrued capital expenditures (payable) 1,287 — — Mortgage assumed in acquisition 13,883 — — The accompanying notes are an integral part of these consolidated financial statements. F-9 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Note 1 — Organization The Company is an externally managed real estate investment trust for U.S. federal income tax purposes (“REIT”) that focuses on acquiring and managing a diversified portfolio of healthcare-related real estate, focused on medical office buildings (“MOBs”), healthcare properties leased on a triple-net basis (“NNN properties”) and senior housing operating properties (“SHOPs”). As of December 31, 2020, the Company owned 193 properties located in 31 states and comprised of 9.4 million rentable square feet. Substantially all of the Company’s business is conducted through Healthcare Trust Operating Partnership, L.P. (the “OP”), a Delaware limited partnership, and its wholly owned subsidiaries. The Company’s advisor, Healthcare Trust Advisors, LLC (the “Advisor”) manages our day-to-day business with the assistance of our property manager, Healthcare Trust Properties, LLC (the “Property Manager”). The Company’s Advisor and Property Manager are under common control with AR Global Investments, LLC (“AR Global”), and these related parties receive compensation and fees for providing services to us. The Company also reimburses these entities for certain expenses they incur in providing these services to the Company. Healthcare Trust Special Limited Partnership, LLC (the “Special Limited Partner”), which is also under common control with AR Global, also has an interest in the Company through ownership of interests in the OP. The Company has declared quarterly dividends entirely in shares of its common stock equal to 0.01349 shares of common stock on each share of outstanding common stock (“Stock Dividends”) on October 1, 2020 and January 4, 2021. These Stock Dividends were issued on October 15, 2020 and January 15, 2021 to holders of record of common stock at the close of business on October 8, 2020 and January 11, 2021, respectively. Dividends payable entirely in shares of common stock are treated in a fashion similar to a stock split for accounting purposes specifically related to per-share calculations for the current and prior periods. The aggregate impact of these Stock Dividends on the Company’s weighted-average share amounts used in its per-share calculations was an increase of 0.02716 shares, cumulatively, for every one share of common stock. No additional shares, except for the Stock Dividends, were issued during the three months ended December 31, 2020. References made to weighted-average shares and per-share amounts in the accompanying consolidated statements of operations and comprehensive income have been retroactively adjusted to reflect the increase of 0.02716 shares for every share outstanding due to the Stock Dividends. Additionally, other references to weighted-average shares outstanding and per-share amounts have been retroactively adjusted for the Stock Dividends and are noted as such throughout the accompanying financial statements and footnotes. On April 3, 2020, the Company published a new estimate of per-share net asset value (“Estimated Per-Share NAV”) as of December 31, 2019. The Company’s previous Estimated Per-Share NAV was as of December 31, 2018. Unlike the per share amounts in this Annual Report on Form 10-K, the Estimated Per-Share NAV has not been retroactively adjusted to reflect the payment of dividends in the form of common stock and will not be adjusted for Stock Dividends the Company pays in the future until the Board determines a new Estimated Per-Share NAV. Paying dividends in additional shares of common stock will, all things equal, cause the value of each share to decline because the number of shares outstanding will increase when Stock Dividends are paid; however, because each stockholder will receive the same number of new shares, the total value of our common stockholders’ investment, all things equal, will not change assuming no sales or other transfers. We intend to publish Estimated Per-Share NAV periodically at the discretion of the board of directors (the “Board”), provided that such estimates will be made at least once annually. Note 2 — Summary of Significant Accounting Policies Basis of Accounting The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“GAAP”). Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. F-10 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, impairments, fair value measurements and income taxes, as applicable. Out-of-Period Adjustments During the year ended December 31, 2019, the Company identified certain historical errors in its tax provision and its net deferred taxes asset as well as its statements of operations and comprehensive income (loss), consolidated statements of changes in equity, and statements of cash flows since 2014, which impacted the quarterly financial statements and annual periods previously issued. Specifically, the Company had overstated intercompany rent on certain leases with the taxable REIT subsidiary (“TRS”) and reflected a portion of depreciation on REIT assets in the TRS’s tax provision, thereby overstating previously recorded tax benefits, deferred tax assets and net incom e by $ 0.8 million, $ 0.3 million and $ 0.2 million for the years ended December 31, 2018, 2017 and for Pre-2017 periods, respectively. The intercompany rent and allocation of depreciation only affected the tax provision and did not affect the pre-tax consolidated financial results. The Company concluded that the errors noted above were not material for the period ended December 31, 2019 or any prior periods and has adjusted the amounts on a cumulative basis in 2019. During the year ended December 31, 2019, the Company did no t record quarterly interest expense related to borrowings under the Revolving Credit Facility (as defined below) that were borrowed and repaid during the fourth quarter of 2019. The amount of interest expense and related payable that should have been recorded was $ 0.3 million . In 2020, the Company identified that the cumulative interest payable balance was understated, and as a result a true up entry was recorded to record the payable and related expense, resulting in an out of period adjustment . The Company concluded that the errors noted above were not material for the period ended December 31, 2019 or any prior periods and has adjusted the amounts on a cumulative basis in 2020. Impacts of the COVID-19 Pandemic During the first quarter of 2020, the global COVID-19 pandemic that has spread around the world and to every state in the United States commenced. The pandemic has had and could continue to have an adverse impact on economic and market conditions, including a global economic slowdown and recession that may continue for some time. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions. The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2020, however uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of December 31, 2020 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results may ultimately differ from those estimates. Starting in March 2020, the COVID-19 pandemic and measures to prevent its spread began to affect the Company in a number of ways. In the Company’s SHOP portfolio, occupancy has trended lower since the second half of March as government policies and implementation of infection control best practices have materially limited or closed communities to new resident move-ins which affects the Company’s ability to fill vacancies. The Company has also continued to experience lower inquiry volumes and reduced in-person tours during the pandemic. In addition, starting in mid-March 2020, operating costs began to rise materially, including for services, labor and personal protective equipment and other supplies, as the Company’s operators took appropriate actions to protect residents and caregivers. At the SHOP facilities, the Company bears these cost increases. These trends accelerated during the second, third, and fourth quarters of 2020 and into the beginning of the first quarter of 2021 as the surge of new COVID-19 cases that started in late 2020 crested, and may continue to impact the Company in the future and have a material adverse effect on the Company’s revenues and income in the other quarters thereafter. The financial stability and overall health of the Company’s tenants is critical to its business. The negative effects that the global pandemic has had on the economy includes the closure or reduction in activity of some of the Company’s MOBs and other healthcare-related facilities as well as restrictions on activity and access for many of the Company’s seniors housing properties. The economic impact of the pandemic has impacted the ability of some of the Company’s tenants to pay their monthly rent either temporarily or in the long term. The Company experienced delays in rent collections in the second, third and fourth quarters of 2020 although collections have been approximately 100 %. The Company has taken a proactive approach F-11 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 to achieve mutually agreeable solutions with its tenants and in some cases, during the year ended December 31, 2020, the Company executed lease amendments providing for deferral of rent. For accounting purposes, in accordance with ASC 842: Leases, normally a company would be required to assess a lease modification to determine if the lease modification should be treated as a separate lease and if not, modification accounting would be applied which would require a company to reassess the classification of the lease (including leases for which the prior classification under ASC 840 was retained as part of the election to apply the package of practical expedients allowed upon the adoption of ASC 842, which doesn’t apply to leases subsequently modified). However, in light of the COVID-19 pandemic in which many leases are being modified, the FASB and SEC have provided relief that allows companies to make a policy election as to whether they treat COVID-19 related lease amendments as a provision included in the pre-concession arrangement, and therefore, not a lease modification, or to treat the lease amendment as a modification. In order to be considered COVID-19 related, cash flows must be substantially the same or less than those prior to the concession. For COVID-19 relief qualified changes, there are two methods to potentially account for such rent deferrals or abatements under the relief, (1) as if the changes were originally contemplated in the lease contract or (2) as if the deferred payments are variable lease payments contained in the lease contract. For all other lease changes that did not qualify for FASB relief, the Company is required to apply modification accounting including assessing classification under ASC 842. Some, but not all of the Company’s lease modifications qualify for the FASB relief. In accordance with the relief provisions, instead of treating these qualifying leases as modifications, the Company has elected to treat the modifications as if previously contained in the lease and recast rents receivable prospectively (if necessary). Under that accounting, for modifications that were deferrals only, there would be no impact on overall rental revenue and for any abatement amounts that reduced total rent to be received, the impact would be recognized ratably over the remaining life of the lease. For leases not qualifying for this relief, the Company has applied modification accounting and determined that there were no changes in the current classification of its leases impacted by negotiations with its tenants. The Company has taken precautionary steps to increase liquidity and preserve financial flexibility in light of the uncertainty resulting from the COVID-19 pandemic. These steps include borrowing an additional $ 95.0 million under the Credit Facility (as defined below) in March 2020 to provide more cash on the Company’s balance sheet. A portion of the $ 95.0 million in borrowings was used for general corporate purposes and for acquisitions. The Company has not borrowed additional amounts subsequently. In August 2020, the Company amended the Credit Facility as part of its efforts to continue addressing the adverse impacts of the COVID-19 pandemic. For additional information on the Credit Facility amendment see Note 5 — Credit Facilities. Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, include rent received from tenants in MOBs and triple-net leased healthcare facilities. As of December 31, 2020, these leases had a weighted average remaining lease term of 6.5 years. Rent from tenants in the Company’s MOB and triple-net leased healthcare facilities operating segments (as discussed below) is recorded in accordance with the terms of each lease on a straight-line basis over the initial term of the lease. Because many of the leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable for, and include in revenue from tenants on a straight-line basis, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. For new leases after acquisition, the commencement date is considered to be the date the tenant takes control of the space. For lease modifications, the commencement date is considered to be the date the lease modification is executed. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. Pursuant to certain of the Company’s lease agreements, tenants are required to reimburse the Company for certain property operating expenses, in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties. Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. The Company’s revenues also include resident services and fee income primarily related to rent derived from lease contracts with residents in the Company’s SHOPs held using a structure permitted under the REIT Investment and Diversification and Empowerment Act of 2007 and to fees for ancillary services performed for SHOP residents, which are generally variable in nature. Rental income from residents in the Company’s SHOP segment is recognized as earned. Residents pay monthly rent that covers occupancy of their unit and basic services, including utilities, meals and some housekeeping services. The terms of the rent are short term in nature, primarily month-to-month. Also included in revenue from tenants is fees F-12 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 for ancillary revenue from non-residents of $ 13.3 million, $ 15.4 million and $ 8.1 million for the years ended December 31, 2020, 2019, and 2018, respectively. Fees for ancillary services are recorded in the period in which the services are performed. The Company defers the revenue related to lease payments received from tenants and residents in advance of their due dates. Pursuant to certain of the Company’s lease agreements, tenants are required to reimburse the Company for certain property operating expenses related to non-SHOP assets (recorded in revenue from tenants), in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties. The following table presents future base rent payments on a cash basis due to the Company as of December 31, 2020 over the next five years and thereafter. These amounts exclude tenant reimbursements and contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. These amounts also exclude SHOP leases which are short-term in nature. (In thousands) Future Base Rent Payments 2021 $ 94,144 2022 87,762 2023 75,205 2024 68,210 2025 58,757 Thereafter 165,642 Total $ 549,720 The Company continually reviews receivables related to rent and unbilled rents receivable and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under the leasing standards (see the “Recently Issued Accounting Pronouncements” section below), the Company is required to assess, based on credit risk only, if it is probable that the Company will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. Partial reserves, or the ability to assume partial recovery are no longer permitted. If the Company determines that it is probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e., straight-line). However, if the Company determines it is not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in operating revenue from tenants beginning on January 1, 2019, in accordance with new accounting rules, on the accompanying consolidated statements of operations and comprehensive income (loss) in the period the related costs are incurred, as applicable. Under ASC 842, which was adopted effective on January 1, 2019, uncollectable amounts are reflected as reductions in revenue. Under ASC 840, the Company recorded such amounts as bad debt expense as part of property operating expenses. During the years ended December 31, 2020, 2019 and 2018 such amounts were $ 2.7 million, $ 6.5 million and $ 14.8 million, respectively, which include bad debt expense related to the NuVista and LaSalle Tenants (see Note 3 — Real Estate Investment, Net to the consolidated financial statements included in this Annual Report on Form 10-K for additional information). Investments in Real Estate Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life or improve the productive capacity of the asset. Costs of repairs and maintenance are expensed as incurred. At the time an asset is acquired, the Company evaluates the inputs, processes and outputs of the asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations and comprehensive loss. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets. See the “ Purchase Price Allocation” section in this Note for a discussion of the initial accounting for investments in real estate. F-13 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Disposal of real estate investments that represent a strategic shift in operations that will have a major effect on the Company's operations and financial results are required to be presented as discontinued operations in the consolidated statements of operations. No properties were presented as discontinued operations during the years ended December 31, 2020, 2019 and 2018. Properties that are intended to be sold are to be designated as “held for sale” on the consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year. The Company evaluates probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. There were $ 0.1 million and $ 70.8 million in real estate investments held for sale as of December 31, 2020 and 2019, respectively (see Note 3 — Real Estate Investments, Net to the consolidated financial statements included in this Annual Report on Form 10-K for additional information). As more fully discussed in this Note under Recently Issued Accounting Pronouncements - ASU No. 2016-02 Leases , all of the Company’s leases as lessor prior to adoption were accounted for as operating leases and they continue to be accounted for as operating leases under the transition guidance. The Company evaluates new leases originated after the adoption date (by the Company or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than major part of remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. For the three-year period ended December 31, 2019, the Company has no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules. The Company is also the lessee under certain land leases which were previously classified prior to adoption of lease accounting and will continue to be classified as operating leases under transition elections unless subsequently modified. These leases are reflected on the balance sheet as of December 31, 2020 and 2019, and the rent expense is reflected on a straight-line basis over the lease term in the consolidated statements of operations for the years ended December 31, 2020, 2019, and 2018. The Company generally determines the value of construction in progress based upon the replacement cost. During the construction period, the Company capitalizes interest, insurance and real estate taxes until the development has reached substantial completion. Purchase Price Allocation In both a business combination and an asset acquisition, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an as if vacant basis. Intangible assets may include the value of in-place leases and above- and below-market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. All acquisitions during the years ended December 31, 2020, 2019 and 2018 were accounted for as asset acquisitions. For acquired properties with leases classified as operating leases, the Company allocates the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. The Company estimates fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value F-14 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 estimates are also made using significant assumptions such as capitalization rates, fair market lease rates, discount rates and land values per square foot. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months. The Company also estimates costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The aggregate value of intangible assets related to customer relationship, as applicable, is measured based on the Company’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The Company did not record any intangible asset amounts related to customer relationships during the years ended December 31, 2020 and 2019. Gain on Dispositions of Real Estate Investments Gains on sales of rental real estate after January 1, 2018 are not considered sales to customers and will generally be recognized pursuant to the provisions included in ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). Gain on sales of real estate prior to January 1, 2018 are recognized pursuant to the provisions included in ASC 360-20, Real Estate Sales (“ASC 360-20”). The specific timing of a sale was measured against various criteria in and ASC 360-20 related to the terms of the transaction and any continuing involvement in the form of management or financial assistance associated with the properties. If the sales criteria for the full accrual method are not met, depending on the circumstances, the Company may not record a sale or it may record a sale but may defer some or all of the gain recognition. If the criteria for full accrual are not met, the Company may account for the transaction by applying the finance, leasing, profit sharing, deposit, installment or cost recovery methods, as appropriate, until the sales criteria for the full accrual method are met. Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the property for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If an impairment exists, due to the inability to recover the carrying value of a property, the Company would recognize an impairment loss in the consolidated statement of operations and comprehensive (loss) to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. Reportable Segments The Company has determined that it has three reportable segments, with activities related to investing in MOBs, triple-net leased healthcare facilities, and seniors housing properties. Management evaluates the operating performance of the Company’s investments in real estate and seniors housing properties on an individual property level. Depreciation and Amortization Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, 7 to 10 years for fixtures and improvements, and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. Construction in progress, including capitalized interest, insurance and real estate taxes, is not depreciated until the development has reached substantial completion. The value of certain other intangibles such as certificates of need in certain jurisdictions are amortized over the expected period of benefit (generally the life of the related building). F-15 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases. The value of customer relationship intangibles, if any, is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. Assumed mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective mortgages. Above and Below-Market Lease Amortization Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. Capitalized above-market ground lease values are amortized as a reduction of property operating expense over the remaining terms of the respective leases. Capitalized below-market ground lease values are amortized as an increase to property operating expense over the remaining terms of the respective leases and expected below-market renewal option periods. Derivative Instruments The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the techniques used to hedge exposure to interest rate fluctuations may also be used to protect against declines in the market value of assets that result from general trends in debt markets. The principal objective of such agreements is to minimize the risks and costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply, or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designated and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any change in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the accompanying consolidated statements of operations and comprehensive loss prior to the adoption of ASU 2017-2 on January 1, 2019. If the derivative is designated and qualifies for hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective, with any ineffective portion of a derivative’s change in fair value immediately recognized in earnings. After the adoption of ASU 2017-2, if the derivative qualifies for hedge accounting, all of the change in value is recorded in other comprehensive income (loss). Non-controlling Interests The non-controlling interests represent the portion of the equity in the OP that is not owned by the Company as well as certain investment arrangements with other unaffiliated third parties whereby such investors receive an ownership interest in certain of the Company’s property-owning subsidiaries and are entitled to receive a proportionate share of the net operating cash flow derived from the subsidiaries’ property. Non-controlling interests are presented as a separate component of equity on the consolidated balance sheets and presented as net loss attributable to non-controlling interests on the consolidated statements of operations and comprehensive loss. Non-controlling interests are allocated a share of net loss based on their share of equity ownership. See Note 13 — Non-Controlling Interests for additional information. F-16 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Cash and Cash Equivalents Cash and cash equivalents includes cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less. The Company did no t have any cash invested in money market funds at December 31, 2020 or 2019. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company (“FDIC”) up to an insurance limit. At December 31, 2020 and 2019, the Company had deposits of $ 72.4 million and $ 95.7 million, of which $ 57.0 million and $ 73.2 million, respectively, were in excess of the amount insured by the FDIC. Although the Company bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result. Deferred Financing and Leasing Costs, Net Deferred costs, net, consists of deferred financing costs related to the Credit Facility (as defined in Note 5 — Credit Facilities) Fannie Mae Master Credit Facilities (as defined in Note 5 — Credit Facilities) , and deferred leasing costs. Deferred financing costs relating to the mortgage notes payable (see Note 4 — Mortgage Notes Payable, Net ) are reflected net of the related financing on our balance sheet. Deferred financing costs associated with the Credit Facility and Fannie Mae Master Credit Facilities and mortgage notes payable represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the term of the financing agreement using the effective interest method for the Credit Facility and Fannie Mae Master Credit Facilities and using the effective interest method over the expected term for the mortgage notes payable. Unamortized deferred financing costs are expensed if the associated debt is refinanced or paid down before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. Deferred leasing costs, consisting primarily of lease commissions and professional fees incurred in connection with new leases, are deferred and amortized over the term of the lease. Equity-Based Compensation The Company has a stock-based incentive award program for its directors, which is accounted for under the guidance of share- based payments. The cost of services received in exchange for these stock awards is measured at the grant date fair value of the award and the expense for such awards is included in general and administrative expenses and is recognized over the service period (i.e., vesting) required or when the requirements for exercise of the award have been met (See Note 11 — Equity-Based Compensation ). Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986 (the “Code”), as amended, commencing with the taxable year ended December 31, 2013. If the Company continues to qualify for taxation as a REIT, it generally will not be subject to U.S. federal corporate income tax to the extent it distributes all of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP) to its stockholders. REITs are subject to a number of organizational and operational requirements, including a requirement that the Company distribute annually at least 90% of the Company’s REIT taxable income to the Company’s stockholders. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal, state and income taxes at regular corporate rates beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. The Company distributed to its stockholders 100% of its REIT taxable income for each of the years ended December 31, 2020, 2019 and 2018. Accordingly, no provision for U.S. federal or state income taxes related to such REIT taxable income was recorded in the Company’s financial statements. Even if the Company continues to qualify as a REIT, it may be subject to certain state and local taxes on its income and property, and U.S. federal income and excise taxes on its undistributed income. Certain limitations are imposed on REITs with respect to the ownership and operation of seniors housing properties. Generally, to qualify as a REIT, the Company cannot directly or indirectly operate seniors housing properties. Instead, such facilities may be either leased to a third-party operator or leased to a TRS and operated by a third party on behalf of the TRS. Accordingly, the Company has formed a TRS that is wholly-owned by the OP to lease its SHOPs and the TRS has entered into management contracts with unaffiliated third-party operators to operate the facilities on its behalf. F-17 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 As of December 31, 2020, the Company, owned 59 seniors housing properties which are leased and operated through its TRS. The TRS is a wholly-owned subsidiary of the OP. A TRS is subject to U.S. federal, state and local income taxes. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies (including modifying intercompany leases with the TRS) and recent financial operations. In the event the Company determines that it would not be able to realize the deferred income tax assets in the future in excess of the net recorded amount, the Company establishes a valuation allowance which offsets the previously recognized income tax asset. Deferred income taxes result from temporary differences between the carrying amounts of the TRS’s assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes as well as net operating loss carryforwards. Significant components of the deferred tax assets and liabilities as of December 31, 2020 consisted of deferred rent and net operating loss carryforwards. During the year ended December 31, 2020, the Company modified 25 intercompany leases with the TRS which abated intercompany rent due to the ongoing COVID-19 pandemic. Because of the Company’s TRS's recent operating history of losses and the on-going impacts of the COVID-19 pandemic on the results of operations of the Company’s SHOP assets, the Company is not able to conclude that it is more likely than not it will realize the future benefit of its deferred tax assets; thus the Company has provided a 100% valuation allowance of $ 4.6 million as of December 31, 2020. If and when the Company believes it is more likely than not that it will recover its deferred tax assets, the Company will reverse the valuation allowance as an income tax benefit in its consolidated statements of comprehensive income (loss). As of December 31, 2020, the Company’s consolidated TRS had net operating loss carryforwards for federal income tax purposes of approximately $ 14 million at December 31, 2020 (of which $ 7.6 million were incurred prior to January 1, 2018). For losses incurred prior to January 1, 2018, if unused, these will begin to expire in 2035. For net operating losses incurred subsequent to December 31, 2017, there is no expiration date. During the year ended December 31, 2020 the Company recorded a tax loss of $ 3.1 million. As of December 31, 2020, the Company had a deferred tax asset of $ 4.6 million with a full valuation allowance. As of December 31, 2019, the Company had a deferred tax asset of $ 3.9 million with no valuation allowance. The following table details the composition of the Company’s tax (expense) benefit for the years ended December 31, 2020, 2019 and 2018, which includes U.S. federal and state income taxes incurred by the Company’s TRS. The Company estimated its income tax (expense) benefit relating to its TRS using a combined federal and state rate of approximately ( 105.8 )% and 26.4 % for the years ended December 31, 2020 and 2019, respectively. These income taxes are reflected in income tax (expense) benefit on the accompanying consolidated statements of operations and comprehensive loss. Year Ended December 31, 2020 2019 2018 (In thousands) Current Deferred Current Deferred Current Deferred Federal (expense) benefit $ 726 $ — $ — $ ( 155 ) $ ( 272 ) $ 399 State (expense) benefit ( 196 ) 50 ( 176 ) ( 68 ) ( 353 ) 29 Deferred tax asset valuation allowance — ( 4,641 ) — — — — Total income tax benefit (expense) $ 530 $ ( 4,591 ) $ ( 176 ) $ ( 223 ) $ ( 625 ) $ 428 As of December 31, 2020 and 2019, the Company had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended December 31, 2013 remain open to examination by the major taxing jurisdictions to which the Company is subject. Per Share Data Net income (loss) per basic share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares (retroactively adjusted for the Stock Dividends) of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock considers the effect of potentially dilutive shares of common stock outstanding during the period. CARES Act Grants On March 27, 2020, Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law and it provides funding to Medicare providers in order to provide financial relief during the COVID-19 pandemic. Funds provided under the program were to be used for the preparation, prevention, and medical response to COVID-19, and were designated to F-18 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 reimburse providers for healthcare related expenses and lost revenues attributable to COVID-19. The Company received $ 3.6 million in these funds during the year ended December 31, 2020, related to four of its SHOPs and considered the funds to be a grant contribution from the government. The full amounts received were recognized as a reduction of property operating expenses in the Company’s consolidated statement of operations for the year ended December 31, 2020 to offset the incurred COVID-19 expenses. Subsequent to December 31, 2020, the Company received an additional $ 5.1 million in funding from CARES Act grants. There can be no assurance that the program will be extended or any further amounts received. Recently Issued Accounting Pronouncements Adopted as of January 1, 2018 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606 ), and has since issued several additional amendments thereto (collectively referred to herein as “ASC 606”). ASC 606 establishes a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Under ASC 606, an entity is required to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. A reporting entity may apply the amendments in ASC 606 using either a modified retrospective approach, by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or a full retrospective approach. The Company adopted this guidance effective January 1, 2018 under the modified retrospective approach and it did not have an impact on the Company’s consolidated financial statements. See above for further information on the Company’s Revenue Recognition Accounting Policies under ASC 606. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The revised guidance amends the recognition and measurement of financial instruments. The new guidance significantly revises an entity’s accounting related to equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. Among other things, it also amends the presentation and disclosure requirements associated with the fair value of financial instruments. The Company adopted this guidance effective January 1, 2018, using the modified retrospective transition method, and there was no impact to the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides guidance on how certain transactions should be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments. The Company adopted the new guidance on January 1, 2018 and it did not have an impact on its consolidated statement of cash flows. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”) , which revises the definition of a business. This new guidance is applicable when evaluating whether an acquisition should be treated as either a business acquisition or an asset acquisition. Under the revised guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset or group of similar assets, the assets acquired would not be considered a business. The Company adopted this guidance effective January 1, 2018, and will apply the new rules prospectively. The Company expects, based on historical property acquisitions, that in most cases, a future property acquired after adoption will be treated as an asset acquisition rather than a business acquisition, which will result in the capitalization of related transaction costs. The Company has evaluated the impact of this new guidance beginning in the first quarter of 2018, and determined that it did not have a material impact on the Company’s consolidated financial statements. All acquisition costs incurred during the years ended December 31, 2020 and 2019 were capitalized since our acquisitions during the years were all classified as asset acquisitions. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Assets Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which provides guidance related to partial sales of non-financial assets, eliminates rules specifically addressing the sales of real estate, clarifies the definition of in substance non-financial assets, removes the exception to the financial asset derecognition model and clarifies the accounting for contributions of non-financial assets to joint ventures. The Company adopted this guidance effective January 1, 2018 using the modified transition method and it did not have an impact on its financial statements. The Company expects that any future sales of real estate in which the Company retains a non-controlling interest in the property would result in the full gain amount being recognized at the time of the partial sale. Historically, the Company has not retained any interest in properties it has sold. F-19 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance that clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The update states that modification accounting should be used unless the fair value of the award, the vesting terms of the award, and the classification of the award as either equity or liability, all do not change as a result of the modification. The Company adopted this guidance effective January 1, 2018 using the modified retrospective transition method and it did not have an impact on its consolidated financial statements. The Company expects that any future modifications to the Company’s issued share-based awards will be accounted for using modification accounting, unless the modification meets all of the exception criteria noted above. As a result, the modification would be treated as an exchange of the original award for a new award, with any incremental fair value being treated as additional compensation cost. Adopted as of January 1, 2019 ASU No. 2016-02 - Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) which provides guidance related to the accounting for leases, as well as the related disclosures. For lessors of real estate, leases are accounted for using an approach substantially the same as previous accounting guidance for operating leases and direct financing leases. For lessees, the new standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. Upon adoption, lessors were allowed a practical expedient, which the Company has elected, by class of underlying assets to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under this new guidance, which is consistent with the Company’s existing policies. Also, upon adoption, companies were allowed a practical expedient package, which the Company has elected, that allowed the Company: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019 (including assessing sale-leaseback transactions); and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. As a result, all of the Company’s existing leases will continue to be classified as operating leases under the new standard. Further, any existing leases for which the property is the leased to a tenant in a transaction that at inception was a sale-leaseback transaction will continue to be treated (absent a modification) as operating leases. The Company did not have any leases that would be considered financing leases as of January 1, 2019. The Company assessed the impact of adoption from both a lessor and lessee perspective, which is discussed in more detail below, and adopted the new guidance prospectively on January 1, 2019, using a prospective transition approach under which the Company elected to apply the guidance effective January 1, 2019 and not adjust prior comparative reporting periods (except for the Company’s presentation of lease revenue discussed below). Lessor Accounting As discussed above, the Company was not required to re-assess the classification of its leases, which are considered operating leases under ASU 2016-02. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessor: • Since the Company elected the practical expedient noted above to not separate non-lease component revenue from the associated lease component, the Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line. The prior periods have been conformed to this new presentation. • Changes in the Company’s assessment of receivables that result in bad debt expense is now required to be recorded as an adjustment to revenue, rather than a charge to bad debt expense. This new classification applies for the first quarter of 2019 and reclassification of prior period amounts is not permitted. At transition on January 1, 2019, after assessing its reserve balances at December 31, 2018 under the new guidance, the Company wrote off accounts receivable of $ 0.1 F-20 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 million and straight-line rents receivable of $ 0.1 million as an adjustment to the opening balance of accumulated deficit, and accordingly rent for these tenants is currently recorded on a cash basis. • Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Under prior accounting guidance, the recognition would have been deferred. Lessee Accounting The Company was a lessee under leases for 17 properties including capital leases of land and building as of January 1, 2019 and because the Company has elected the practical expedients described above, it determined that 11 of these leases would continue to be classified as operating leases under the new standard. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessee: • Upon adoption of the new standard, the Company recorded ROU assets and lease liabilities equal to $ 10.2 million for the present value of the lease payments related to its ground leases. These amounts are included in operating lease right-of-use assets and operating lease liabilities on the Company’s consolidated balance sheet as of December 31, 2019. • The Company also reclassified $ 0.5 million related to amounts previously reported as a straight-line rent liability and $ 4.8 million, net related to amounts previously reported as above and below market ground lease intangibles to the ROU assets. For additional information and disclosures related to these operating leases, see Note 16 — Commitments and Contingencies. Other Accounting Pronouncements In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , to better align cash flow and fair value hedge accounting with the corresponding risk management activities. Among other things, the amendments expand which hedging strategies are eligible for hedge accounting, align the timing of recognition of hedge results with the earnings effect of the hedged item and allow companies to include the change in fair value of the derivative in the same income statement line item as the earnings effect of the hedged item. Additionally, for cash flow hedges that are highly effective, the update allows for all changes in fair value of the derivative to be recorded in other comprehensive income. The Company has adopted ASU 2017-12 on January 1, 2019, as required under the guidance, using a modified retrospective transition method and the adoption did not have a material impact on its consolidated financial statements. Adopted as of January 1, 2020: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amended guidance is effective for the Company beginning on January 1, 2020. The Company adopted the new guidance on January 1, 2020 and determined it did not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the amended standard requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. The new guidance is effective for the Company beginning on January 1, 2020. The Company adopted the new guidance on January 1, 2020 and determined it did not have a material impact on its consolidated financial statements. Not yet Adopted as of December 31, 2020 In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Topic 815). The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and amends the guidance for the derivatives scope exception for contracts in an entity's own equity. The standard also amends and makes targeted improvements to the related earnings per share guidance. The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The standard allows for either modified or full retrospective transition F-21 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 methods. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected over the period March 12, 2020 through December 31, 2022 as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to (i) the assertion that our hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of our derivatives, which will be consistent with our past presentation. The Company will continue to evaluate the impact of the guidance and may apply other elections, as applicable, as additional changes in the market occur. Note 3 — Real Estate Investments, Net Property Acquisitions and Development Costs The Company invests in MOBs, seniors housing properties and other healthcare-related facilities primarily to expand and diversify its portfolio and revenue base. The Company owned 193 properties as of December 31, 2020. During the year ended December 31, 2020, the Company, through wholly-owned subsidiaries of the OP, completed its acquisitions of two multi-tenant MOBs, three single tenant MOBs and four SHOPs for an aggregate contract purchase price of $ 110.7 million, which includes other assets acquired as part of the acquisitions of $ 1.8 million and capitalized transaction costs. All acquisitions in 2020, 2019 and 2018 were considered asset acquisitions for accounting purposes. The following table presents the allocation of the assets acquired and liabilities assumed, as well as capitalized construction in progress during the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, (In thousands) 2020 2019 2018 Real estate investments, at cost: Land $ 7,665 $ 6,356 $ 14,417 Buildings, fixtures and improvements 90,699 68,903 98,236 Development costs — 5,721 8,591 Total tangible assets 98,364 80,980 121,244 Acquired intangibles: In-place leases and other intangible assets (1) 10,369 11,777 6,823 Market lease and other intangible assets (1) 496 724 275 Market lease liabilities (1) ( 362 ) ( 1,483 ) ( 286 ) Total intangible assets and liabilities 10,503 11,018 6,812 Mortgage notes payable, net ( 13,883 ) — — Cash paid for real estate investments, including acquisitions $ 94,984 $ 91,998 $ 128,056 Number of properties purchased 9 9 14 _______________ (1) Weighted-average remaining amortization periods for in-place leases, above-market leases and below market leases acquired were 1.7 years, 7.7 years and 7.4 years, respectively, as of December 31, 2020. Weighted-average remaining amortization periods for in-place leases and above-market leases acquired were 8.1 years and 7.0 years, respectively, as of December 31, 2019. There were no below market leases acquired in the year ended December 31, 2019. Development Project In August 2015, the Company entered into an asset purchase agreement and development agreement to acquire land and construction in progress, and subsequently fund the remaining construction, of a development property in Jupiter, Florida for $ 82.0 million. As of December 31, 2019, the Company had funded $ 97.8 million, including $ 10.0 million for the land and $ 87.8 million for construction in progress. The Company had been working for some time to obtain a certificate of occupancy for the facility (“CO”), which was ultimately obtained in December 2019. Historically, all construction costs, including capitalized interest, insurance and real F-22 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 estate taxes were capitalized and classified in construction is progress on the Company’s consolidated balance sheet. In December 2019, when the development reached substantial completion and the Company reclassified the entire amount in construction in progress to its appropriate real estate investment components. During the years ended December 31, 2019, and 2018 the Company incurred an additional $ 5.7 million and $ 8.6 million in capitalized costs, including capitalized interest, related to this development project. No development costs were capitalized during the year ended December 31, 2020 as the property was considered substantially complete. Obtaining the CO was a necessary condition to leasing the property to any tenant other than a tenant associated with the developer of the property, which had been, and remains in, default under its agreements with the Company. The Company entered into a lease for 10% of the rentable square feet at the property (a portion of the non-assisted living component of the property) , but the tenant was not required to pay the Company cash rent until May 2021. As of December 31, 2020 the Company had not yet begun operating the assisted living component of the property. During the fourth quarter of 2019, in connection with the substantial completion of the development property, the Company began to evaluate it for a potential sale. As a result of this potential change in plans, the Company concluded this held for use asset was impaired and recognized an impairment charge to its respective operating real estate components in 2019 (see Assets Held For Use and Related Impairments in this note for additional information). Further, as a result of COVID-19 and it impact on the ability to show the property to potential new tenants/residents, the launch of operations of the assisted living component of the property has been delayed. In August 2020, the Company entered into definitive purchase and sale agreements (“PSA”) to sell the Company's recently completed development property in Jupiter, Florida for $ 65.0 million and the Company’s two skilled nursing facilities in Lutz, Florida and Wellington, Florida for $ 20.0 million and $ 33.0 million, respectively. The buyer paid the Company $ 2.9 million in non-refundable deposits, In November 2020, the Company completed the sale of its skilled nursing facility in Lutz, Florida resulting in a gain on sale of real estate investments of $ 3.8 million, recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. See “Dispositions” below for more information. The sales of the properties in Wellington, Florida and Jupiter, Florida are expected to close later in 2021, but these dispositions are subject to conditions and there can be no assurance that they will be completed on their contemplated terms, or at all. Significant Tenants As of December 31, 2020, 2019 and 2018, the Company did not have any tenants (including for this purpose, all affiliates of such tenants) whose annualized rental income on a straight-line basis represented 10% or greater of total annualized rental income on a straight-line basis for the portfolio. The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of consolidated annualized rental income on a straight-line basis for all properties as of December 31, 2020, 2019 and 2018: December 31, State 2020 2019 2018 Florida (1) 20.6 % 25.2 % 16.6 % Georgia * * 10.1 % Michigan (2) * 10.9 % 13.1 % Pennsylvania 10.4 % * 10.2 % _______________ * State’s annualized rental income on a straight-line basis was not greater than 10% of total annualized rental income for all portfolio properties as of the period specified. (1) During the fourth quarter of 2020, the Company completed the sale of its skilled nursing facility in Lutz, Florida. In addition, in August 2020 the Company entered into an agreement to sell our skilled nursing facility in Wellington, Florida, and our development property in Jupiter, Florida. (2) During the year ended December 31, 2020, the Company sold 11 SHOPs located in Michigan, seven of which were transferred to the buyer during the fourth quarter of 2020 and four of which remained classified as held for sale on the Company’s consolidated balance sheet as of December 31, 2020. The remaining four properties were transferred to the buyer in the first quarter of 2021. F-23 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Intangible Assets and Liabilities Acquired intangible assets and liabilities consisted of the following as of the periods presented: December 31, 2020 December 31, 2019 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: In-place leases $ 241,097 $ 172,648 $ 68,449 $ 229,300 $ 156,428 $ 72,872 Market lease assets 14,116 10,845 3,271 13,616 9,501 4,115 Other intangible assets 20,802 1,171 19,631 26,700 1,144 25,556 Total acquired intangible assets $ 276,015 $ 184,664 $ 91,351 $ 269,616 $ 167,073 $ 102,543 Intangible liabilities: Market lease liabilities $ 22,109 $ 11,306 $ 10,803 $ 21,777 $ 9,725 $ 12,052 The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangible assets, amortization and accretion of above-and below-market lease assets and liabilities, net and the amortization of above-and below-market ground leases, for the periods presented: Year Ended December 31, (In thousands) 2020 2019 2018 Amortization of in-place leases and other intangible assets (1) $ 15,121 $ 15,559 $ 18,851 Accretion of above-and below-market leases, net (2) $ ( 257 ) $ ( 247 ) $ ( 39 ) Amortization of above-and below-market ground leases, net (3) $ 178 $ 86 $ 147 ____________ (1) Reflected within depreciation and amortization expense. (2) Reflected within revenue from tenants. (3) Reflected within property operating and maintenance expense. Upon adoption of ASC 842 effective January 1, 2019, intangible balances related to ground leases were reclassified to be included as part of the Operating lease right-of-use assets presented on the consolidated balance sheet with no change to placement of the amortization expense of such balances. Refer to Note 2 — Summary of Significant Accounting Policies for additional details. The following table provides the projected amortization and adjustments to revenue from tenants for the next five years: (In thousands) 2021 2022 2023 2024 2025 In-place lease assets $ 10,904 $ 8,704 $ 6,830 $ 6,070 $ 4,896 Other intangible assets 613 613 613 613 588 Total to be added to amortization expense $ 11,517 $ 9,317 $ 7,443 $ 6,683 $ 5,484 Above-market lease assets $ ( 1,299 ) $ ( 993 ) $ ( 645 ) $ ( 307 ) $ ( 260 ) Below-market lease liabilities 1,388 1,326 1,213 1,062 955 Total to be added to revenue from tenants $ 89 $ 333 $ 568 $ 755 $ 695 F-24 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Dispositions The following table summarizes the properties sold during the years ended December 31, 2020, 2019, and 2018: (In thousands) Disposition Date Contract Sale Price Gain (Loss) on Sale, of Real Estate Investments 2020 Dispositions: Lutz December, 2020 $ 20,000 $ 3,832 Michigan SHOPs ( 11 properties) (1) November 2, 2020 11,750 ( 908 ) Cape Girardeau March 19, 2020 8,600 2,306 Totals $ 40,350 $ 5,230 2019 Dispositions: New York Six MOBs ( 1 property) August 22, 2019 $ 13,600 $ 2,883 Ocean Park (1) August 1, 2019 3,600 ( 152 ) New York Six MOBs ( 5 properties) February 6, 2019 45,000 6,059 Totals $ 62,200 $ 8,790 2018 Dispositions: Missouri SNF Properties (1) December 5, 2018 $ 27,500 $ ( 70 ) ________ (1) These properties were previously impaired. See “Impairments” section below. Represents contract sales price for all 11 properties. Loss on sale relates to the seven properties that were transferred to the buyer in the fourth quarter of 2020 (see below for additional information). The sales of the properties noted above did not represent a strategic shift that has a major effect on the Company’s operations and financial results. Accordingly, the results of operations of these properties remain classified within continuing operations for all periods presented until the respective sale dates. 2020 Dispositions On December 16 2020, the Company completed the sale of its skilled nursing facility in Lutz, Florida for a contract purchase price of $ 20.0 million, resulting in a gain on sale of real estate investments of $ 3.8 million recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. At closing, $ 17.6 million of net proceeds were used to repay amounts outstanding under the Revolving Credit Facility. On November 2, 2020 the initial closing under the PSA pursuant to which the Company had agreed to sell 11 Michigan SHOPs occurred. The contract purchase price for the 11 Michigan SHOPs was $ 11.8 million, resulting in a loss on sale of $ 0.9 million on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. At the initial closing, the Company received payment of the full $ 11.8 million sales price for all 11 of the Michigan SHOPs, less $ 0.8 million held in escrow, and transferred seven of the properties to the buyer. The remaining four properties were transferred to the buyer a second closing separate closings in the first quarter of 2021 when the $ 0.8 million held in escrow was released to the buyer. Of the properties transferred at the initial closing, four had been part of the borrowing base under the Credit Facility, one was part of the collateral pool under the Fannie Mae Master Credit Facility with Capital One and two were unencumbered. Of the properties transferred at the second closing, three were part of the borrowing base under the Credit Facility until the initial closing and one was unencumbered. At the initial closing, $ 4.2 million of the net proceeds was used to repay amounts outstanding under the Fannie Mae Master Credit Facility with Capital One, $ 4.4 million of the net proceeds were used to repay amounts outstanding under the Revolving Credit Facility, with the remainder used for closing costs. For the avoidance of any doubt, all impairments related to the disposal of the 11 Michigan SHOP assets were recognized in the year ended December 31, 2020. On March 19, 2020 the Company disposed of one MOB property for a contract purchase price of $ 8.6 million, resulting in a gain on sale of $ 2.306 million. 2019 Dispositions F-25 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 On February 6, 2019, the Company sold five of the MOB properties within the State of New York (the “New York Six MOBs”) for a contract sales price of $ 45.0 million, resulting in a gain on sale of real estate investments of $ 6.1 million which is included on the Consolidated Statement of Operations for the year ended December 31, 2019. The Company had reconsidered the intended holding period for all six of the New York Six MOBs due to various market conditions and the potential to reinvest in properties generating a higher yield. On July 26, 2018, the Company had originally entered into a PSA for the sale of the New York Six MOBs, for an aggregate contract sale price of approximately $ 68.0 million and subsequently, on September 25, 2018, the Company further amended the PSA to decrease the aggregate contract sale price to $ 58.8 million. The one remaining New York Six MOB was sold for a contract sales price of $ 13.6 million on August 22, 2019, resulting in a gain on sale of real estate investments of $ 2.9 million recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2019. During the first quarter of 2019, the Company reconsidered the intended holding period for one of its SHOPs located in Brookings, OR (“Ocean Park”) due to various market conditions and the potential to reinvest in properties generating a higher yield. On March 21, 2019, the Company entered into a PSA for the sale of Ocean Park, for an aggregate contract sale price of approximately $ 3.6 million. On April 1, 2019, the Company amended the purchase and sale agreement to decrease the aggregate contract sale price to $ 3.5 million. In connection with this amendment, the Company recognized an impairment charge of approximately $ 19,000 on Ocean Park during the second quarter of 2019, which is included on the consolidated statement of operations and comprehensive loss. On August 1, 2019, the Company closed its disposition of Ocean Park resulting in a loss on sale of real estate investments of $ 0.2 million recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2019. 2018 Dispositions On November 6, 2018, the Company entered into the final amendment to its January 2017 agreement (as amended to date, the “Amended Missouri SNF PSA”) to sell eight skilled nursing facility properties in Missouri (the “Missouri SNF Properties”) that were previously classified as held-for-sale, for an aggregate contract purchase price of $ 27.5 million. In connection with the Amended Missouri SNF PSA, the Company recognized an impairment charge of approximately $ 11.9 million on the Missouri SNF Properties in the third quarter of 2018 which is included on the consolidated statement of operations and comprehensive loss. The sale of these properties pursuant to the Amended Missouri SNF PSA, which occurred in the fourth quarter of 2018, resulted in a loss of $ 0.1 million for the year ended December 31, 2018, which is reflected within (loss) gain on sale of real estate investment in the consolidated statements of operations and comprehensive loss. Impairments The following is a summary of impairments taken during the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, (In thousands) 2020 2019 2018 Assets held for sale $ 19,570 $ 22,634 $ 18,255 Assets held for use 16,876 33,335 2,400 Total $ 36,446 $ 55,969 $ 20,655 For additional information on impairments related to assets held for sale and assets held for use, see the “Assets Held for Sale and Related Impairments” and “Assets Held for Use and Related Impairments” sections below. Assets Held For Sale and Related Impairments When assets are identified by management as held for sale, the Company reflects them separately on its balance sheet and stops recognizing depreciation and amortization expense on the identified assets and estimates the sales price, net of costs to sell, of those assets. If the carrying amount of the assets classified as held for sale exceeds the estimated net sales price, the Company records an impairment charge equal to the amount by which the carrying amount of the assets exceeds the Company’s estimate of the net sales price of the assets. For held-for-sale properties, the Company predominately uses the contract sale price as fair market value. F-26 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Balance Sheet Details - Assets Held for Sale The following table details the major classes of assets associated with the properties that have been classified as held for sale as of December 31, 2020 and 2019: December 31, (In thousands) 2020 (1) 2019 (2) Land $ 145 $ 4,051 Buildings, fixtures and improvements ( 55 ) 66,788 Assets held for sale $ 90 $ 70,839 _____ (1) Assets held for sale as of December 31, 2020 relates to four Michigan SHOPs. (2) Assets held for sale as of December 31, 2019 relates to the original 14 Michigan SHOPs under the PSA entered into in January 2020 (see below for additional information). In January 2020, the Company entered into a PSA for the sale of a portfolio of 14 SHOPs located in Michigan (the “Michigan SHOPs”) as a single portfolio for $ 71.8 million. Accordingly, all 14 of these SHOPs were classified as held for sale as of December 31, 2019. During April, 2020, the PSA was amended so that only 11 of the Michigan SHOPs were to be sold pursuant to this PSA for $ 11.8 million. As a result of the amended PSA from April 2020, the three remaining Michigan SHOPs at that time no longer qualified as held for sale and were reclassified to assets held for use at their original carrying values as of March 31, 2020 and an additional $ 0.7 million in catch-up depreciation was recorded in the third quarter of 2020. In addition, the original deposit made by the buyer was reduced from $ 1.0 million to $ 0.3 million. In October 2020, the PSA was amended to provide that the full $ 11.8 million sales price for all 11 Michigan SHOPs would be paid at an initial closing which occurred in November 2020, when seven of the properties were transferred to the buyer with the remaining four properties scheduled to be transferred to the buyer at a second closing, which occurred in the first quarter of 2021 (see Note 18 — Subsequent Events ). This amendment to the PSA also provided that $ 0.8 million of the sales price would be held in escrow and returned to the buyer at the second closing; provided that, if the PSA is terminated before the second closing closings due to a material default by the buyer, the Company will receive the escrowed amount. This amount was returned to the buyer at final closing. As a result, it represented an effective reduction in the sale price and the Company reflected an additional impairment loss to reflect this. The Company determined that the four Michigan SHOPs should be classified as held for sale as of December 31, 2020. As of December 31, 2020, for the four Michigan SHOPs that are classified as held for sale, three Michigan SHOPs were part of the borrowing base of the Credit Facility and one was unencumbered. Held for Sale Impairments - 2020 As a result of the amendment to the PSA in April 2020, in which the number of properties under sale was reduced from 14 to 11 , and in which the total consideration was reduced from $ 71.8 million to $ 11.8 million, the Company recorded an additional impairment charge of $ 19.6 million for the year ended December 31, 2020 related to the Michigan SHOP assets held for sale. Held for Sale Impairments - 2019 During the year ended December 31, 2019 the Company recorded an impairment charge of $ 22.6 million related to assets held for sale, representing the amount by which the carrying amount of the Michigan SHOPs exceeded the Company’s estimate, at that time, of the net sales price of the Michigan SHOPs. Held for Sale Impairments - 2018 During the year ended December 31, 2018, the Company recorded impairment charges of $ 18.3 million related to assets held for sale for the eight Missouri SNF Properties which were sold in 2018 and one of the New York Six MOBs which was sold in 2019. Assets Held for Use and Related Impairments When circumstances indicate the carrying value of a property classified as held for use may not be recoverable, the Company reviews the property for impairment. For the Company, the most common triggering events are (i) concerns regarding the tenant (i.e., credit or expirations) in the Company’s single tenant properties or significant vacancy in the Company’s multi-tenant properties and (ii) changes to the Company’s expected holding period as a result of business decisions or non-recourse debt maturities. If a triggering event is identified, the Company considers the projected cash flows due to various performance indicators, and where appropriate, the Company evaluates the impact on its ability to recover the carrying F-27 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 value of the properties based on the expected cash flows on an undiscounted basis over its intended holding period. The Company makes certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values. Where more than one possible scenario exists, the Company uses a probability weighted approach in estimating cash flows. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses for impairment may be realized in the future. If the undiscounted cash flows over the expected hold period are less than the carrying value, the Company reflects an impairment charge to write the asset down to its fair value. The Company owns held for use properties for which the Company may from time to time reconsider the projected cash flows due to various performance indicators, and where appropriate, the Company evaluates the impact on its ability to recover the carrying value of such properties based on the expected cash flows over its intended holding period. The Company makes certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values. Where more than one possible scenario exists, the Company uses a probability weighted approach. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses for impairment may be realized in the future. As of December 31, 2019, the Company was actively considering plans to sell three assets in Florida including the recently completed development project in Jupiter, Florida and the Company’s two skilled nursing facilities in Lutz, Florida and Wellington, Florida. The Company began marketing the properties in 2020 and, during the three months ended June 30, 2020, the Company received multiple bids and accepted a non-binding letter of intent from a prospective buyer to purchase the completed development project in Jupiter, Florida for $ 65.0 million and the Company’s two skilled nursing facilities in Lutz, Florida and Wellington, Florida for $ 20.0 million and $ 33.0 million, respectively. During August 2020, the Company entered into PSAs with the buyer on the terms generally set forth in the letter of intent. The property in Lutz, Florida was sold in December 2020 (see “Dispositions” above) and the property in Jupiter, Florida and the property in Wellington, Florida are expected to be sold later in 2021 however, there can be no assurance that such transactions will actually close. If closed, the Company is required to use the proceeds of the sales to repay amounts outstanding under its Revolving Credit Facility. Held for Use Impairments — 2020 During the year ended December 31, 2020, as a result of the Company’s marketing efforts during the COVID-19 pandemic which concluded with a PSA in August 2020, the Company recorded an additional impairment charge of $ 16.9 million on its completed development project in Jupiter, Florida and its skilled nursing facility in Wellington, Florida. The impairment charge represents the amount by which the carrying amount of the properties exceeded the Company’s estimate of the net sales price set forth in the PSA described above. Held for Use Impairments — 2019 During the year ended December 31, 2019, the Company began to evaluate the properties in Lutz, Florida, Wellington, Florida and its completed development property in Jupiter, Florida for potential sales. As a result of these potential changes in plans, the Company concluded these held for use assets were impaired and recognized impairment charges in the aggregate of $ 33.3 million to reduce their carrying value to estimated fair value. The Company obtained third-party appraisals of all three properties (Lutz, Wellington, and Jupiter) which estimated fair value primarily applying an income approach using stabilized cash flows and capitalization rates of 9.0 %, 9.0 % and 7.0 %, respectively. Held for Use Impairments — 2018 During the year ended December 31, 2018, as a result of its consideration of impairment, the Company determined that the carrying value of one held for use property exceeded its estimated fair value and recognized an aggregate impairment charge of $ 2.4 million. The LaSalle Tenant On July 1, 2020, the Company transitioned four triple-net leased properties in Texas (collectively, the “LaSalle Properties”) from the triple-net leased healthcare facilities segment to the SHOP segment, and the LaSalle Properties are now leased to the Company’s TRS and operated and managed on the Company’s behalf by a third-party operator. In January 2018, the Company entered into an agreement with the prior tenants at the LaSalle Properties (collectively, the “LaSalle Tenant”) in which the Company agreed to forbear from exercising legal remedies, including staying a lawsuit against the LaSalle Tenant, as long as the LaSalle Tenant paid the amounts due for rent and property taxes on an updated payment schedule pursuant to a forbearance agreement. As of December 31, 2020, the LaSalle Tenant remains in default of the forbearance agreement and owes the F-28 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Company $ 12.7 million of rent, property taxes, late fees, and interest receivable thereunder and $ 7.7 million plus interest of unpaid monetary damages awarded to us by the court on our claims against the tenant. The Company has the entire receivable balance, including any monetary damages, and related income from the LaSalle Tenant fully reserved as of December 31, 2020. The Company incurred $ 0.4 million, $ 3.5 million and $ 5.0 million of bad debt expense, including straight-line rent write-offs, related to the LaSalle Tenant during the years ended December 31, 2020, 2019 and 2018, respectively, which is included in revenue from tenants on the consolidated statement of operations. On February 15, 2019, the Company filed an amended petition in Texas state court seeking the appointment of a receiver to manage the operations at these properties and for recovery of damages for the various breaches by the LaSalle Tenant. Subsequently, the LaSalle Group Inc., a guarantor of certain of the LaSalle Tenant’s lease obligations (the “LaSalle Guarantor”), filed for voluntarily relief under chapter 11 of the United States Bankruptcy Code. The Company severed its claims against the LaSalle Guarantor from the action against the LaSalle Tenant. On August 27, 2019, the court awarded the Company monetary damages on its claims against the LaSalle Tenant in an amount equal to $ 7.7 million plus interest. There can be no assurance the Company will receive any amounts with respect to these claims against the LaSalle Tenant. On October 30, 2019, the court entered into an order appointing a receiver. This receiver was empowered to replace the LaSalle Tenant with a new tenant and operator at the properties, and, on February 15, 2020, the receiver took operational control of the properties. As noted above, the Company worked with the receiver and the Company’s designated third-party operator to transition the LaSalle Properties to its SHOP operating segment on July 1, 2020. The NuVista Tenant The Company had tenants at two of its Florida properties located in Lutz and Wellington Florida (collectively, the “NuVista Tenant”) that were in default under their leases beginning from July 2017. On January 1, 2018 the property was transitioned to the SHOP segment when the Company replaced the NuVista Tenant as tenant at the Lutz, Florida property with a TRS and engaged a third-party operator to operate the property. As a result, the property was transitioned to the SHOP segment as of January 1, 2018. The Company incurred bad debt expense of $ 1.1 million and $ 6.0 million related to the NuVista Tenant during the years ended December 31, 2019 and 2018, respectively which is included in revenue from tenants in the consolidated statement of operations and comprehensive loss. At the property located in Wellington, Florida, the Company and the tenant entered into an operations transfer agreement (the “OTA”) pursuant to which the Company and the tenant agreed to cooperate in transitioning operations at the property to a third party operator selected by the Company. On February 19, 2019, in response to litigation commenced by the Company against the NuVista Tenant to enforce the OTA, the United States District Court for the Southern District of Florida entered into an agreed order (the “Order”) pursuant to which it found that the NuVista Tenant was in default under the lease for the property and that the OTA was valid, binding and in full force and effect, as modified by the Order. Subsequent to the entry into the Order, the Company, its designated third-party operator and the NuVista Tenant transitioned operations at the property to the Company’s designated third-party operator. The Company’s designated third-party operator received its license to operate the facility on April 1, 2019 and is in operational control of the property. On May 20, 2019, the court entered into a final order from the court terminating the existing lease with the NuVista Tenant. Following entry into the order, the property in Wellington, Florida transitioned to the SHOP segment as of April 1, 2019. In connection with this transition, the Company replaced the NuVista Tenant as a tenant with a TRS, and engaged a third-party operator to operate the property. During the year ended December 31, 2019 the company received $ 1.6 million under the OTA for periods prior to the lease termination, which amounts had previously been fully reserved. This payment under the OTA is included in revenue from tenants in consolidated statements of operations and comprehensive loss. In August 2020, the Company entered into a PSA to sell the properties located in Lutz, Florida and Wellington Florida. The Company sold the property in Lutz, Florida in December 2020 (see “Dispositions” section above). The sale of the property in Jupiter, Florida and the sale of the property in Wellington, Florida are expected to be completed later in 2021. F-29 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Note 4 — Mortgage Notes Payable, Net The following table reflects the Company’s mortgage notes payable as of December 31, 2020 and 2019: Portfolio Encumbered Properties (1) Outstanding Loan Amount as of December 31, Effective Interest Rate (2) as of December 31, Interest Rate 2020 2019 2020 2019 Maturity (In thousands) (In thousands) Palm Valley Medical Plaza - Goodyear, AZ 1 $ 2,998 $ 3,112 4.15 % 4.15 % Fixed Jun. 2023 Medical Center V - Peoria, AZ 1 2,786 2,884 4.75 % 4.75 % Fixed Sep. 2023 Fox Ridge Bryant - Bryant, AR 1 7,133 7,283 3.98 % 3.98 % Fixed May 2047 Fox Ridge Chenal - Little Rock, AR 1 16,390 16,695 3.98 % 3.98 % Fixed May 2049 Fox Ridge North Little Rock - North Little Rock, AR 1 10,170 10,359 3.98 % 3.98 % Fixed May 2049 Capital One MOB Loan 41 378,500 378,500 3.71 % 3.71 % Fixed (3) Dec. 2026 Multi-Property CMBS Loan 21 118,700 118,700 4.60 % 4.60 % Fixed May 2028 Shiloh - Illinois (4) 1 13,684 — 4.34 % — % Fixed March 2026 Gross mortgage notes payable 68 550,361 537,533 3.94 % 3.90 % Deferred financing costs, net of accumulated amortization (5) ( 6,191 ) ( 7,718 ) Mortgage premiums and discounts, net ( 1,472 ) ( 1,531 ) Mortgage notes payable, net $ 542,698 $ 528,284 __________ (1) Does not include real estate assets mortgaged to secure advances under the Fannie Mae Master Credit Facilities or eligible unencumbered real estate assets comprising the borrowing base of the Credit Facility (as defined below) . The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the real estate assets comprising the borrowing base have been pledged for the benefit of the lenders thereunder (see Note 5 — Credit Facilities for additional details). (2) Calculated on a weighted average basis for all mortgages outstanding as of December 31, 2020 and December 31, 2019. For the LIBOR based loans, LIBOR in effect at the balance sheet date was utilized. For the Capital One MOB Loan, the effective rate does not include the effect of amortizing the amount paid to terminate the previous pay-fixed swap. See Note 7 — Derivatives and Hedging Activities for additional details. (3) Variable rate loan, based on 30-day LIBOR, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements. In connection with the amendment to this loan in December 2019 (see additional details below), the Company terminated the previous interest rate swap agreements and entered into new interest rate swap agreements (see Note 7 — Derivatives and Hedging Activities for additional details). (4) The Company assumed this fixed rate mortgage when it acquired a property during the year ended December 31, 2020. (5) Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. As of December 31, 2020, the Company had pledged $ 860.0 million in real estate investments, at cost, as collateral for its $ 550.4 million of gross mortgage notes payable. This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable secured by these properties. The Company makes payments of principal and interest, or interest only, depending upon the specific requirements of each mortgage note, on a monthly basis. Some of the Company’s mortgage note agreements require compliance with certain property-level financial covenants including debt service coverage ratios. As of December 31, 2020, the Company was in compliance with these financial covenants. See Note 5 — Credit Facilities for additional details - Future Principal Payment and LIBOR Transition for schedule of principal payment requirements of the Company’s Mortgage Notes and Credit Facilities and discussion of the expected cessation of LIBOR publication. F-30 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Capital One MOB Loan On June 30, 2017, Capital One, National Association (“Capital One”), as administrative agent and lender, and certain other lenders (collectively, the “MOB Lenders”), made a loan in the aggregate amount of $ 250.0 million (the “MOB Loan”) to certain subsidiaries of the OP. On December 20, 2019, the Company, through certain subsidiaries of the OP, entered into an amendment and restatement of the MOB Loan originally dated as of June 30, 2017 among the OP’s subsidiaries and Capital One, as administrative agent and lender, and certain other lenders. As a result, the principal amount outstanding increased from approximately $ 242.0 million to $ 378.5 million the number of properties mortgaged as collateral for the loan increased from 31 properties (all medical office buildings) to 41 properties ( 29 medical office buildings that continued to serve as collateral for the loan as well as an additional ten medical office buildings and two triple net leased hospitals). At the closing of the amendment and restatement of the MOB Loan, after payment of closing costs and swap termination fees, the Company received $ 127.7 million in net refinancing proceeds in excess of the approximately $ 242.0 million principal amount outstanding prior to the closing. Of these excess proceeds, approximately $ 63.5 million were used to repay amounts outstanding under the Revolving Credit Facility (as defined below) in order to obtain a release of 12 of the mortgaged properties from the borrowing base thereunder, and approximately $ 61.5 million of the remaining proceeds were used to repay additional amounts outstanding under the Revolving Credit Facility. Prior to the amendment and restatement of the MOB Loan, the MOB Loan bore interest at a variable rate equal to LIBOR plus 2.5 % per annum. Subsequent to the amendment and restatement of the MOB Loan, the MOB Loan bears interest at a variable rate equal to LIBOR plus 2.0 % per annum. The MOB Loan requires the Company to pay interest on a monthly basis with the principal balance due on the maturity date which was extended from June 30, 2022 to December 20, 2026 after the amendment and restatement of the MOB Loan. In connection with the amendment and restatement of the MOB Loan, the OP terminated two interest rate swaps and executed one interest rate swap on the new amount of the MOB Loan, fixing the interest rate exposure at 3.66 %. See Note 7 — Derivatives and Hedging Activities for additional information on the Company’s outstanding derivatives. The Company may pre-pay the MOB Loan, in whole or in part, at any time, with payment of a prepayment premium equal to (a) 3.0 % for prepayments made prior to December 31, 2020, (b) 2.0 % for prepayments made between January 1, 2021 and December 31, 2021, and (c) 1.0 % for prepayments made between January 1, 2022 and December 31, 2022. Thereafter, no prepayment premium is required. In addition, mortgaged properties may be released or replaced subject to certain conditions and limitations, including prepayment of not more than 110 % of the principal amount allocated to the property together with any applicable prepayment premium and maintenance, giving effect to the release or replacement, of a minimum of either 25 mortgaged properties or $ 283.9 million principal amount outstanding, a minimum debt yield and a minimum debt service coverage ratio. In connection with the amendment to the MOB Loan, the OP entered into an amended and restated guaranty of recourse obligations (the “Guaranty”) and an amended and restated hazardous materials indemnity agreement (the “Environmental Indemnity”) for the benefit of Capital One as administrative agent for the lenders on substantially identical terms to the guaranty and environmental indemnity entered into in connection with the original loan agreement entered into in June 2017. Pursuant to the Guaranty, the OP has guaranteed, among other things, specified losses arising from certain actions of any of the OP’s subsidiaries, including fraud, willful misrepresentation, certain intentional acts, misapplication of funds, physical waste, and failure to pay taxes. The Guaranty requires the Company to maintain a certain minimum of shareholders’ equity on its balance sheet. Pursuant to the Environmental Indemnity, the OP and the Company’s subsidiaries that directly own or lease the mortgaged properties have indemnified the MOB Lenders against losses, costs or liabilities related to certain environmental matters. The amendment and restatement of the MOB Loan was considered an extinguishment of the old loan and a new loan agreement. Accordingly, fees and expense for the new loan have been capitalized and the unamortized fees relating to the old loan of approximately $ 3.0 million were written off as a charge to interest expense in the statement of operations for the year ended December 31, 2019. Multi-Property CMBS Loan On April 10, 2018, the Company, entered into a $ 118.7 million loan agreement (the “Multi-Property CMBS Loan”) with KeyBank National Association (“KeyBank”). The Multi-Property CMBS Loan requires monthly interest-only payments, with the principal balance due on the maturity date. The Multi-Property CMBS Loan permits KeyBank to securitize the entire Multi-Property CMBS Loan or any portion thereof. F-31 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 At the closing of the Multi-Property CMBS Loan, the net proceeds after accrued interest and closing costs were used to (i) repay approximately $ 80.0 million of indebtedness under the Revolving Credit Facility, under which 14 of the properties were included as part of the borrowing base prior to the Multi-Property CMBS Loan, (ii) fund approximately $ 3.8 million in deposits required to be made at closing into reserve accounts required under the loan agreement. The remaining $ 33.0 million net proceeds available to the Company to be used for general corporate purposes, including future acquisitions. Note 5 — Credit Facilities, Net The Company had the following credit facilities outstanding as of December 31, 2020 and 2019: Outstanding Facility Amount as of December 31, Effective Interest Rate as of December 31, (10) Credit Facility Encumbered Properties (1) 2020 2019 2020 2019 Interest Rate Maturity (In thousands) (In thousands) Credit Facility: Revolving Credit Facility $ 173,674 $ 100,618 3.21 % 4.08 % Variable (8) Mar. 2023 (9) Term Loan 150,000 150,000 4.95 % 4.05 % Variable (6) Mar. 2024 Deferred financing costs ( 4,298 ) ( 4,671 ) Term Loan, net 145,702 145,329 Total Credit Facility 89 (2) $ 319,376 $ 245,947 Fannie Mae Master Credit Facilities: Capital One Facility 11 (3) $ 212,467 $ 216,614 2.60 % 4.17 % Variable (7) Nov. 2026 KeyBank Facility 10 (4) 142,708 142,708 2.65 % 4.22 % Variable (7) Nov. 2026 Total Fannie Mae Master Credit Facilities 21 $ 355,175 $ 359,322 Total Credit Facilities 110 $ 674,551 $ 605,269 3.29 % (5) 4.14 % (5) __________ (1) Encumbered properties are as of December 31, 2020. (2) The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Credit Facility (as defined below) have been pledged for the benefit of the lenders thereunder. (3) Secured by first-priority mortgages on 11 of the Company’s seniors housing properties located in Florida, Georgia, Iowa and Michigan as of December 31, 2020 with a carrying value of $ 344.0 million. (4) Secured by first-priority mortgages on ten of the Company’s seniors housing properties located in, Missouri, Kansas, California, Florida, Georgia and Iowa as of December 31, 2020 with carrying value of $ 253.6 million. (5) Calculated on a weighted average basis for all credit facilities outstanding as of December 31, 2020 and 2019, respectively. For the LIBOR based loans that have not been fixed, the LIBOR rate in effect at the balance sheet date was utilized. For LIBOR based loans that have been fixed, the effective rate after consideration of the interest rate swap was utilized. See Note 7 — Derivatives and Hedging Activities for additional details. (6) Variable rate loan, based on LIBOR, all of which was fixed as a result of entering into “pay-fixed” interest rate swap agreements (see Note 7 — Derivatives and Hedging Activities for additional details). (7) Variable rate loan which is capped as a result of entering into interest rate cap agreements (see Note 7 — Derivatives and Hedging Activities for additional details). (8) Variable rate loan with $ 50 million of principal amount fixed at a rate of 4.09 % by an interest rate swap agreement. (9) The company has the option to extend maturity one year to March 2024 subject to certain conditions. (10) Effective interest rate below for variable rate debt gives effect to any “Pay-fixed” swap entered into by the Company. If not hedged, the effective interest rate below represents the variable rate (or contractual floor if appropriate) and the applicable margin in effect as of December 31, 2020. Interest rate caps are not considered unless the cap is currently in effect. As of December 31, 2020, the carrying value of our real estate investments, at cost was $ 2.6 billion, with $ 0.9 billion of this amount pledged as collateral for mortgage notes payable, $ 0.6 billion of this amount pledged to secure advances under the Fannie Mae Master Credit Facilities and $ 0.9 billion of this amount comprising the borrowing base of the Credit Facility. These real estate assets are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, unless, as applicable, the existing indebtedness associated with the property is satisfied or the property is removed from the borrowing base of the Credit Facility, which would impact availability thereunder. F-32 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Unencumbered real estate investments, at cost as of December 31, 2020 was $ 231.5 million, although there can be no assurance as to the amount of liquidity the Company would be able to generate from using these unencumbered assets as collateral for mortgage loans or adding them to the borrowing base of our Credit Facility. Pursuant to the August 10, 2020 amendment to the Credit Facility, any acquired properties must be pledged to the Credit Facility, and any net proceeds from the dispositions of any unencumbered properties must be repaid to the Credit Facility. Credit Facility On March 13, 2019, the Company entered into an amended and restated senior secured credit facility (the “Credit Facility”), which consists of two components, a revolving credit facility (the “Revolving Credit Facility”) and a term loan (the “Term Loan”). In both March and August 2020, the Credit Facility was further amended, and the terms of the Credit Facility giving effect to those amendments are generally described below. The Revolving Credit Facility is interest-only and matures on March 13, 2023, subject to a one-year extension at the Company’s option. The Term Loan is interest-only and matures on March 13, 2024. The total commitments under the Credit Facility are $ 630.0 million, including $ 480.0 million under the Revolving Credit Facility. The Credit Facility includes an uncommitted “accordion feature” that may be used to increase the commitments under either component of the Credit Facility by up to an additional $ 370.0 million to a total of $ 1.0 billion. The amount available for future borrowings under the Credit Facility is based on either the value of the pool of eligible unencumbered real estate assets comprising the borrowing base, or a minimum debt service coverage ratio with respect to the borrowing base. The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility have been pledged for the benefit of the lenders thereunder. As of December 31, 2020, $ 150.0 million was outstanding under the Term Loan, and $ 173.7 million was outstanding under the Revolving Credit Facility. The unused borrowing availability under the Revolving Credit Facility was $ 48.3 million. The Company is required to maintain a combination of cash, cash equivalents and availability for future borrowings under the Revolving Credit Facility totaling at least $ 50.0 million. Pursuant to the amendment in August 2020, certain other restrictions and conditions described below will no longer apply starting in a quarter in which the Company makes an election and, as of the day prior to the commencement of the applicable quarter, the Company has a combination of cash, cash equivalents and availability for future borrowings under the Revolving Credit Facility totaling at least $ 100.0 million, giving effect to the aggregate amount of distributions projected to be paid by the Company during the applicable quarter, and the Company’s ratio of consolidated total indebtedness to consolidated total asset value (expressed as a percentage) is less than 62.5 % (the “Commencement Quarter”). The Commencement Quarter may be no earlier than the fiscal quarter ending June 30, 2021. During the period from August 10, 2020 until the first day of the Commencement Quarter, the Company must use all the net cash proceeds from any capital event (such as an asset sale, financing or equity issuance) to prepay amounts outstanding under the Revolving Credit Facility. The Company may reborrow any amounts so repaid if all relevant conditions are met, including sufficient availability for future borrowings. There can be no assurance these conditions will be met. In addition, commencing on August 10, 2020 and until the Commencement Quarter, the Company has the option to have amounts outstanding under the Revolving Credit Facility bear interest at an annual rate equal to either: (i) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.85 % to 2.60 %; or (ii) the Base Rate (as defined in the Credit Facility), plus an applicable margin that ranges, depending on the Company’s leverage, from 0.60 % to 1.35 %. Commencing on the first day of the Commencement Quarter, the Company will have the option to have amounts outstanding under the Revolving Credit Facility bear interest at an annual rate equal to either: (a) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.60 % to 2.35 %; or (b) the Base Rate, plus an applicable margin that ranges, depending on the Company’s leverage, from 0.35 % to 1.10 %. As of December 31, 2020 the Company had elected to use the LIBOR option for all of our borrowings under the Credit Facility. Further, commencing on August 10, 2020 and until the Commencement Quarter, the Company has the option to have amounts outstanding under the Term Loan bear interest at an annual rate equal to either: (i) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.80 % to 2.55 %; or (ii) the Base Rate, plus an applicable margin that ranges, depending on the Company’s leverage, from 0.55 % to 1.30 %. Commencing on the first day of the Commencement Quarter, the Company will have the option to have amounts outstanding under the Term Loan bear interest at an annual rate equal to either: (a) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.55 % to 2.30 %; F-33 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 or (b) the Base Rate, plus an applicable margin that ranges, depending on the Company’s leverage, from 0.30 % to 1.05 %. Pursuant to the amendment to the Credit Facility in August 2020, the “floor” on LIBOR was increased from 0.00 % to 0.25 %. As of December 31, 2020, the Revolving Credit Facility and the Term Loan had an effective interest rate per annum equal to 3.21 % and 4.95 %, respectively. Until the Commencement Quarter, the Company may not pay distributions to holders of common stock in cash or any other cash distributions (including repurchases of shares of the Company’s common stock), subject to certain exceptions. These exceptions include paying dividends on the 7.375 % Series A Cumulative Redeemable Perpetual Preferred Stock, $ 0.01 par value per share (“Series A Preferred Stock”) or any other preferred stock the Company may issue and paying any cash distributions necessary to maintain its status as a REIT. The Company may not pay any cash distributions (including dividends on Series A Preferred Stock) if a default or event of default exists or would result therefrom. Beginning in the Commencement Quarter, the Company will be able to pay cash distributions to holders of common stock, subject to the restrictions described below. The Company may pay cash distributions beginning in the Commencement Quarter and the aggregate distributions (as defined in the Credit Facility and including dividends on Series A Preferred Stock) for any period of four fiscal quarters do not exceed 95 % of Modified FFO (as defined in the Credit Facility) for the same period based only on fiscal quarters after the Commencement Quarter. In addition, beginning in the Commencement Quarter, the Company will be permitted to repurchase up to $ 50.0 million of shares of its common stock (including amounts previously repurchased during the term of the Revolving Credit Facility) if, after giving effect to the repurchases, the Company maintains cash and cash equivalents of at least $ 30.0 million and the Company’s ratio of consolidated total indebtedness to consolidated total asset value (expressed as a percentage) is less than 55.0 %. The Credit Facility prohibits the Company from exceeding a maximum ratio of consolidated total indebtedness to consolidated total asset value, and requires the Company to maintain a minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges and a minimum consolidated tangible net worth. The maximum ratio of consolidated total indebtedness to consolidated total asset value is 67.5 % for the period from July 1, 2020 through June 30, 2021 and 65 % thereafter unless and until the Commencement Quarter, following which it will be 62.5 %. The minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges is 1.50 to 1.00 for the period from July 1, 2020 through March 31, 2021, 1.55 to 1.00 for the period from April 1, 2021 through June 30, 2021, and 1.60 to 1.00 thereafter. The minimum consolidated tangible net worth is the sum of (i) approximately $ 1.2 million, plus (ii) 75 % of any net offering proceeds (as defined in the Credit Facility) since the Credit Facility closed in March 2019. As of December 31, 2020, the Company was in compliance with the financial covenants under the Credit Facility. Based upon the Company’s current expectations, the Company believes its operating results during the next 12 months will allow it to comply with these covenants. Fannie Mae Master Credit Facilities On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master credit facility agreement relating to a secured credit facility with KeyBank (the “KeyBank Facility”) and a master credit facility agreement with Capital One for a secured credit facility with Capital One Multifamily Finance LLC, an affiliate of Capital One (the “Capital One Credit Facility”; the Capital One Facility and the KeyBank Facility are referred to herein individually a “Fannie Mae Master Credit Facility” and together as the “Fannie Mae Master Credit Facilities”). Advances made under these agreements are assigned by Capital One and KeyBank to Fannie Mae at closing for inclusion in Fannie Mae’s Multifamily MBS program. Effective October 31, 2016, in conjunction with the execution of the Fannie Mae Master Credit Facilities, the OP entered into two interest rate cap agreements with an unrelated third party, which caps LIBOR interest paid (not giving effect to the applicable margin) on amounts outstanding under the Fannie Mae Master Credit Facilities at a maximum of 3.5 %. On October 2019, the Company replaced two maturing interest rate cap agreements, effective November 1, 2019 for a total notional amount of $ 88.7 million. The two interest rate caps agreements extend three existing interest rate caps set to mature on the same date and are not designated as hedges ( see Note 7 — Derivatives and Hedging Activities for additional disclosure regarding the Company’s derivatives). In November 2020, in conjunction with the sale and transfer of four of the Michigan SHOPs, one of which was encumbered under the Fannie Mae Master Credit Facility with Capital One, $ 4.2 million was repaid to Capitol One upon the release of the property. F-34 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The Company may request future advances under the Fannie Mae Master Credit Facilities by borrowing against the value of the initial mortgaged properties, or by adding eligible properties to the collateral pool, subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests. Future Principal Payments The following table summarizes the scheduled aggregate principal payments for the five years subsequent to December 31, 2020 and thereafter, on all of the Company’s outstanding debt (mortgage notes payable and credit facilities): Future Principal Payments (In thousands) Mortgage Notes Payable Credit Facilities Total 2021 $ 1,191 $ 130 $ 1,321 2022 1,242 2,820 4,062 2023 6,383 4,497 10,880 2024 1,095 178,171 179,266 2025 1,142 154,497 155,639 Thereafter 539,308 338,734 878,042 Total $ 550,361 $ 678,849 $ 1,229,210 LIBOR Transition In July 2017, the Financial Conduct Authority (which regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to LIBOR in derivatives and other financial contracts. On March 5, 2021, the Financial Conduct Authority confirmed a partial extension of this deadline announcing that it will cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021. The remaining USD LIBOR settings will continue to be published through June 30, 2023. The Company is not able to predict when there will be sufficient liquidity in the SOFR market. The Company is monitoring and evaluating the risks related to changes in LIBOR availability, which include potential changes in interest paid on debt and amounts received and paid on interest rate swaps. In addition, the value of debt or derivative instruments tied to LIBOR will also be impacted as LIBOR is limited and discontinued and contracts must be transitioned to a new alternative rate. In some instances, transitioning to an alternative rate may require negotiation with lenders and other counterparties and could present challenges. To transition from LIBOR under the Credit Facility, the Company will either utilize the Base Rate (as defined in the Credit Facility) or an alternative benchmark established by the agent in accordance with the terms of the Credit Facility, which will be determined with due consideration to the then current market practices for determining and implementing a rate of interest for newly originated floating rate commercial real estate loans in the United States and loans converted from a LIBOR based rate to a replacement index-based rate. The Company has mortgages, credit facilities and derivative agreements that have terms that are based on LIBOR. Certain of those agreements have alternative rates already contained in the agreements while others do not. The Company anticipates that it will either utilize the alternative rates contained in the agreements or negotiate a replacement reference rates for LIBOR with the lenders and derivative counterparties. Note 6 — Fair Value of Financial Instruments GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: F-35 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 — Unobservable inputs that reflect the entity’s own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. Financial Instruments Measured at Fair Value on a Recurring Basis Derivative Instruments Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of December 31, 2020 and 2019, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments, are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. The following table presents information about the Company’s assets and liabilities measured at fair value as of December 31, 2020 and 2019, aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total December 31, 2020 Derivative assets, at fair value $ — $ 13 $ — $ 13 Derivative liabilities, at fair value — ( 38,389 ) — ( 38,389 ) Total $ — $ ( 38,376 ) $ — $ ( 38,376 ) December 31, 2019 Derivative assets, at fair value $ — $ 392 $ — $ 392 Derivative liabilities, at fair value ( 5,305 ) ( 5,305 ) Total $ — $ ( 4,913 ) $ — $ ( 4,913 ) A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31, 2020. Real Estate Investments Measured at Fair Value on a Non-Recurring Basis F-36 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Real Estate Investments — Held for Use The Company also had impaired real estate investments held for use, which were carried at fair value on a non-recurring basis on the consolidated balance sheet as of December 31, 2020 and 2019. As of December 31, 2020, the Company owned held for use properties for which the Company had reconsidered the projected cash flows due to various performance indicators. As a result, the Company evaluated the impact on its ability to recover the carrying value of such properties based on the expected cash flows over its intended holding period. The Company primarily uses a market approach to estimate the future cash flows expected to be generated. Impaired real estate investments held for use are generally classified in Level 3 of the fair value hierarchy. See Note 3 — Real Estate investments, Net - “Assets Held for Use and Related Impairments” for additional details. Real Estate Investments — Held for Sale The Company has impaired real estate investments held for sale, which are carried at net realizable value on a non-recurring basis on the consolidated balance sheets as of December 31, 2020 and 2019. Impaired real estate investments held for sale are generally classified in Level 3 of the fair value hierarchy. See Note 3 — Real Estate investments, Net - “Assets Held for Sale and Related Impairments” for additional details. Financial Instruments Not Measured at Fair Value The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair values of short-term financial instruments such as cash and cash equivalents, restricted cash, straight-line rent receivable, net, prepaid expenses and other assets, deferred costs, net, accounts payable and accrued expenses, deferred rent and distributions payable approximate their carrying value on the consolidated balance sheets due to their short-term nature. The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below: December 31, 2020 December 31, 2019 (In thousands) Level Carrying Amount Fair Value Carrying Amount Fair Value Gross mortgage notes payable and mortgage premium and discounts, net 3 $ 548,889 $ 549,553 $ 536,002 $ 545,414 Credit Facility 3 $ 323,674 $ 319,558 $ 250,618 $ 250,618 Fannie Mae Master Credit Facilities 3 $ 355,175 $ 354,073 $ 359,322 $ 370,122 The fair value of the mortgage notes payable is estimated using a discounted cash flow analysis, based on the Advisor’s experience with similar types of borrowing arrangements, excluding the value of derivatives. At December 31, 2020, the carrying values of the Credit Facility and Fannie Mae Master Credit Facilities do not approximate their fair values due to the widening of credit spreads during the period. At December 31, 2019, the carrying amounts approximated their fair values. Note 7 — Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company may use derivative financial instruments, including interest rate swaps, caps, collars, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. Additionally, in using interest rate derivatives, the Company aims to add stability to interest expense and to manage its exposure to interest rate movements. The Company does not intend to utilize derivatives for speculative purposes or purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company, and its affiliates, may also have other financial relationships. The Company does not anticipate that any of its counterparties will fail to meet their obligations. F-37 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2020 and 2019: December 31, (In thousands) Balance Sheet Location 2020 2019 Derivatives designated as hedging instruments: Interest rate “pay-fixed” swaps Derivative assets, at fair value $ — $ 377 Interest rate “pay-fixed” swaps Derivative liabilities, at fair value $ 38,389 $ 5,305 Derivatives not designated as hedging instruments: Interest rate caps Derivative assets, at fair value $ 13 $ 15 Cash Flow Hedges of Interest Rate Risk The Company currently has nine interest rate swaps that are designated as cash flow hedges. The interest rate swaps are used as part of the Company’s interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During 2020 and 2019, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive (loss) income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. In connection with the refinancing of the MOB Loan during the fourth quarter of 2019, the Company terminated two interest rate swaps with an aggregate notional amount of $ 250.0 million for a payment of approximately $ 2.2 million. Following these terminations, $ 2.2 million was recorded in AOCI and is being recorded as an adjustment to interest expense over the term of the two terminated swaps and the MOB Loan prior to its refinancing. Of the amount recorded in AOCI following these terminations, $ 0.9 million and $ 0.1 million was recorded as an increase to interest expense for the years ended December 31, 2020 and 2019, respectively, and approximately $ 1.3 million remained in AOCI as of December 31, 2020. Amounts reported in accumulated other comprehensive (loss) income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, from January 1, 2021 through December 31, 2021, the Company estimates that $ 10.7 million will be reclassified from other comprehensive loss as an increase to interest expense. As of December 31, 2020 and 2019, the Company had the following derivatives that were designated as cash flow hedges of interest rate risk: December 31, 2020 December 31, 2019 Interest Rate Derivative Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate “pay-fixed” swaps 9 $ 578,500 9 $ 578,500 F-38 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The table below details the location in the financial statements of the loss recognized on interest rate derivatives designated as cash flow hedges for the periods ended December 31, 2020 and 2019: Year Ended December 31, (In thousands) 2020 2019 2018 Amount of gain (loss) recognized in accumulated other comprehensive (loss) income on interest rate derivatives $ ( 40,614 ) $ ( 10,753 ) $ 2,367 Amount of (loss) gain reclassified from accumulated other comprehensive income into income as interest expense (effective portion) $ ( 7,999 ) $ 872 $ 258 Total amount of interest expense presented in the consolidated statements of operations and comprehensive loss $ 51,519 $ 56,059 $ 49,471 Non-Designated Derivatives These derivatives are used to manage the Company’s exposure to interest rate movements, but do not meet the strict hedge accounting requirements to be classified as hedging instruments. Changes in the fair value of derivatives not designated as hedges under a qualifying hedging relationship are recorded directly to net income (loss) and were a loss of $ 0.1 million, a loss of $ 0.1 million and a loss of $ 0.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company had the following outstanding interest rate derivatives that were not designated as a hedges in qualifying hedging relationships as of as of December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate caps 6 $ 359,322 6 $ 359,322 Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of December 31, 2020 and 2019. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheet. Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount December 31, 2020 $ 13 — — $ 13 — — $ 13 December 31, 2020 $ — ( 38,389 ) — $ ( 38,389 ) — — $ ( 38,389 ) December 31, 2019 $ 392 — — $ 392 — — $ 392 December 31, 2019 $ — ( 5,305 ) — $ ( 5,305 ) — — $ ( 5,305 ) Credit-risk-related Contingent Features The Company has agreements in place with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of December 31, 2020 the fair value of derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was $ 38.4 million. As of December 31, 2020, the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the F-39 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $ 38.4 million at December 31, 2020. Note 8 — Stockholders’ Equity Common Stock As of December 31, 2020 and 2019, the Company had 93,775,746 and 92,356,664 shares of common stock outstanding, respectively, including unvested restricted shares and shares issued pursuant to the Company’s distribution reinvestment plan (“DRIP”), net of share repurchases. On April 3, 2020, the Company published a new estimate of per-share net asset value (“Estimated Per-Share NAV”) as of December 31, 2019, which was approved by the Board on September 30, 2020. The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Board, provided that such estimates will be made at least once annually. Tender Offers On January 9, 2020, the Company announced a tender offer (the “2020 Tender Offer”) to purchase up to 200,000 shares of its common stock for cash at a purchase price equal to $ 8.50 per share with the proration period and withdrawal rights expiring February 7, 2020. The Company made the 2020 Tender Offer in response to an unsolicited offer to stockholders commenced on December 31, 2019. The 2020 Tender Offer expired in accordance with the terms on February 7, 2020. In accordance with the 2020 Tender Offer, the Company accepted for purchase 200,000 shares for a total cost of approximately $ 1.7 million, which was funded with available cash. On March 13, 2018, the Company announced a tender offer (the “2018 Tender Offer”) to purchase up to 2.0 million shares of the Company’s common stock for cash at a purchase price equal to $ 13.15 per share with the proration period and withdrawal rights expiring on April 12, 2018. On April 4, 2018 and April 16, 2018, the 2018 Tender Offer was amended to reduce the number of shares the Company was offering to purchase to 230,000 shares and extend the expiration date to May 1, 2018. The 2018 Tender Offer expired in accordance with its terms on May 1, 2018. During May 2018, in accordance with the terms of the 2018 Tender Offer, the Company accepted for purchase 230,000 shares for a total cost of approximately $ 3.0 million. Share Repurchase Program Under the Company’s share repurchase program (the “SRP”), as amended from time to time, qualifying stockholders are able to sell their shares to the Company in limited circumstances. The SRP permits investors to sell their shares back to the Company after they have held them for at least one year, subject to significant conditions and limitations. Repurchases of shares of the Company’s common stock, when requested, are at the sole discretion of the Board. Under the SRP, subject to certain conditions, only repurchase requests made following the death or qualifying disability of stockholders that purchased shares of the Company’s common stock or received their shares from the Company (directly or indirectly) through one or more non-cash transactions are considered for repurchase. Additionally, pursuant to the SRP, the repurchase price per share equals 100% of the Estimated Per-Share NAV in effect on the last day of the fiscal semester, or the six-month period ending June 30 or December 31. The Company suspended the SRP during the pendency of the 2018 Tender Offer. On June 29, 2018, the Company announced the Board unanimously determined to reactivate the SRP, effective June 30, 2018. In connection with reactivating the SRP, the Board approved all repurchase requests received during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018 (see table below for additional details). On January 29, 2019, the Company announced that the Board approved an amendment to the SRP changing the date on which any repurchases are to be made in respect of requests made during the period commencing March 13, 2018 up to and including December 31, 2018 to no later than March 31, 2019, rather than on or before the 31st day following December 31, 2018. This SRP amendment became effective on January 30, 2019. Additionally, on March 27, 2019, the Company announced that the Board approved an amendment to the SRP further extending the date on which any repurchases are to be made in respect of requests made during the period commencing March 13, 2018 up to and including December 31, 2018 to no later than April 30, 2019. This SRP amendment became effective on March 28, 2019 (see table below for details on cumulative shares repurchased pursuant to the SRP, including shares repurchased during 2019). On July 23, 2019, the Company announced that the Board approved a third amendment to the SRP, effective July 24, 2019, extending the date on which repurchases are able to be made in respect of requests made during the period commencing January 1, 2019 up to and including June 30, 2019 to no later than August 31, 2019, rather than on or before July 31, 2019. F-40 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 On August 20, 2019, the Company announced that the Board approved a fourth amendment to the SRP, effective August 22, 2019 extending the date on which repurchases are able to be made in respect of requests made during the period commencing January 1, 2019 up to and including June 30, 2019 to no later than October 31, 2019, rather than on or before August 31, 2019. The Company completed the repurchases on October 30, 2019 and repurchased 446,830 shares of common stock for approximately $ 7.8 million, at an average price per share of $ 17.50 pursuant to the SRP. The repurchases reflect all repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing January 1, 2019 up to and including June 30, 2019. On January 9, 2020, the Company announced that the Board approved a fifth amendment to the SRP, effective January 10, 2020 extending the date on which repurchases are able to be made in respect of requests made during the period commencing July 1, 2019 up to and including December 31, 2019 to on or before March 16, 2020, rather than on or before January 31, 2020. On January 9, 2020, the Company also announced that the Board had suspended the SRP, and that it would not accept any repurchase requests or make any repurchases under the SRP during the pendency of the 2020 Tender Offer or for 10 business days thereafter. On February 26, 2020, the Company repurchased 505,101 shares of common stock for approximately $ 8.8 million, at an average price per share of $ 17.50 pursuant to the SRP. The repurchases reflect all repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing July 1, 2019 up to and including December 31, 2019. Pursuant to the SRP, repurchases were to be ma de in respect of requests made during the periods when the SRP was active during the active periods under the SRP during the six months ending June 30, 2020 - the period from January 1, 2020 to January 8, 2020 and the period from February 26, 2020 up to and including June 30, 2020 - no later than July 31, 2020. On August 13, 2020, in order to strategically maintain the Company’s liquidity in light of the continued impact of COVID-19 pandemic and to comply with an amendment to the Credit Facility described in Note 5, which restricts the Company from repurchasing shares until no earlier than the quarter ending June 30, 2021, on August 6, 2020, the Board determined that, effective on August 12, 2020, repurchases under the SRP would be suspended. The Board has also rejected all repurchase requests made during the period from January 1, 2020 until the effectiveness of the suspension of the SRP. No further repurchase requests under the SRP may be made unless and until the SRP is reactivated. No assurances can be made as to when or if the SRP will be reactivated. When a stockholder requests redemption and redemption is approved by the Board, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP have the status of authorized but unissued shares. The table below reflects the number of shares repurchased and the average price per share (retroactively adjusted for the Stock Dividends), under the SRP and does not include any repurchases under tender offers (see above), cumulatively through December 31, 2020: Number of Shares Repurchased (2) Average Price per Share (2)2 Cumulative repurchases as of December 31, 2019 4,391,519 $ 20.95 Year ended December 31, 2020 (1) 505,101 17.50 Cumulative repurchases as of December 31, 2020 4,896,620 20.60 _________ (1) Includes 505,101 shares of common stock repurchased on February 26, 2020 with respect to requests received during the period commencing July 1, 2019 up to and including December 31, 2019 for $ 8.8 million at an average price per share of $ 17.50 . F-41 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Distribution Reinvestment Plan Pursuant to the DRIP, stockholders may elect to reinvest distributions paid in cash by the Company into shares of common stock. No dealer manager fees or selling commissions are paid with respect to shares purchased under the DRIP. The shares purchased pursuant to the DRIP have the same rights and are treated in the same manner as all of the other shares of outstanding common stock. The Board may designate that certain cash or other distributions be excluded from reinvestment pursuant to the DRIP. The Company has the right to amend the DRIP or terminate the DRIP with ten days ’ notice to participants. Shares issued under the DRIP are recorded as equity in the accompanying consolidated balance sheet in the period distributions are declared. During the years ended December 31, 2020, 2019 and 2018, the Company issued 0.9 million, 1.5 million and 1.7 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $ 14.6 million, $ 27.2 million and $ 35.7 million, respectively. Because shares of common stock are only offered and sold pursuant to the DRIP in connection with the reinvestment of distributions paid in cash, participants in the DRIP will not be able to reinvest in shares thereunder for so long as the Company pays distributions in stock instead of cash. Stockholder Rights Plan In May 2020, the Company announced that the Board had approved a stockholder rights plan. In December 2020, the Company issued a dividend of one common share purchase right for each share of its common stock outstanding as authorized by its board of directors in its discretion. Preferred Stock The Company is authorized to issue up to 50,000,000 shares of preferred stock. In connection with an underwritten offering in December 2019 (see details below), the Company classified and designated 1,610,000 shares of its authorized preferred stock as authorized shares of its Series A Preferred Stock as of December 31, 2020. In September 2020, the Board authorized the classification of 600,000 additional shares of the Company’s preferred stock as Series A Preferred Stock in connection with the Preferred Stock Equity Line (as defined below). The Company had 1,610,000 shares of Series A Preferred Stock issued and outstanding, as of December 31, 2020 and 2019. In December 2019, the Company issued and sold 1,610,000 shares of the Series A Preferred Stock in an underwritten public offering at a public offering price equal to the liquidation preference of $ 25.00 per share. The gross proceeds from this offering were $ 40.3 million and net proceeds were $ 37.6 million after deducting the underwriting discount of $ 1.3 million and additional offering expenses of $ 1.4 million. On September 15, 2020, the Company entered into a preferred stock purchase agreement and registration rights agreement with B. Riley Principal Capital, LLC (“B. Riley”), pursuant to which the Company has the right from time to time to sell up to an aggregate of $ 15 million of shares of its Series A Preferred Stock to B. Riley until December 31, 2023, on the terms and subject to the conditions set forth in the purchase agreement. This arrangement is also referred to as the “Preferred Stock Equity Line.” The Company controls the timing and amount of any sales to B. Riley under the Preferred Stock Equity Line, and B. Riley is obligated to make purchases of up to 3,500 shares of Series A Preferred Stock each time (as may be increased by mutual agreement by the parties) in accordance with the purchase agreement, upon certain terms and conditions being met. The Company did no t sell any shares under the Preferred Stock Equity Line during the year ended December 31, 2020. Series A Preferred Stock — Terms Holders of Series A Preferred Stock are entitled to cumulative dividends in the amount of $ 1.84375 per share each year, which is equivalent to the rate of 7.375 % of the $ 25.00 liquidation preference per share per annum. The Series A Preferred Stock has no stated maturity and will remain outstanding indefinitely unless redeemed, converted or otherwise repurchased. On and after December 11, 2024, at any time and from time to time, the Series A Preferred Stock will be redeemable in whole or in part, at the Company’s option, at a cash redemption price of $ 25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. In addition, upon the occurrence of a Delisting Event or a Change of Control (each as defined in the articles supplementary governing the terms of the Series A Preferred Stock (the “Articles Supplementary”)), the Company may, subject to certain conditions, at its option, redeem the Series A Preferred Stock, in whole or in part, after the first date on which the Delisting Event occurred or within 120 days after the first date on which the Change of Control occurred, as applicable, by paying the liquidation preference of $ 25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. Upon the occurrence of a Change of Control during a continuing Delisting Event, unless the Company has elected to exercise its redemption right, holders of the Series A Preferred Stock will have certain rights to convert Series A Preferred Stock into shares of Company’s common stock. In addition, upon the occurrence of a Delisting Event, the dividend rate will be increased on the day after the occurrence of the Delisting Event by 2.00 % per annum to the rate F-42 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 of 9.375 % of the $ 25.00 liquidation preference per share per annum (equivalent to $ 2.34375 per share each year) from and after the date of the Delisting Event. Following the cure of such Delisting Event, the dividend rate will revert to the rate of 7.375 % of the $ 25.00 liquidation preference per share per annum. The necessary conditions to convert the Series A Preferred Stock into Common Stock have not been met as of December 31, 2020. Therefore, Series A Preferred Stock did not impact Company’s earnings per share calculations for the year ended December 31, 2019. The Series A Preferred Stock ranks senior to common stock, with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up. Voting rights for holders of Series A Preferred Stock exist primarily with respect to the ability to elect two additional directors to the board of directors if six or more quarterly dividends (whether or not authorized or declared or consecutive) payable on the Series A Preferred Stock are in arrears, and with respect to voting on amendments to the Company’s charter (which includes the Articles Supplementary) that materially and adversely affect the rights of the Series A Preferred Stock or create additional classes or series of shares of the Company’s capital stock that are senior to the Series A Preferred Stock. Other than the limited circumstances described above and in the Articles Supplementary, holders of Series A Preferred Stock do not have any voting rights. Distributions and Dividends Common Stock In April 2013, the Board authorized, and the Company began paying distributions on a monthly basis at a rate equivalent to $ 1.70 per annum, per share of common stock, which began in May 2013. In March 2017, the Board authorized a decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of April 1, 2017, to a rate equivalent to $ 1.45 per annum per share of common stock. On February 20, 2018, the Board authorized a further decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of March 1, 2018, to a rate equivalent to $ 0.85 per annum per share of common stock. From March 1, 2018 until June 30, 2020, the Company paid monthly distributions to stockholders at a rate equivalent to $ 0.85 per annum per share of common stock. Distributions were payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. On August 13, 2020, the Board changed the Company’s common stock distribution policy in order to preserve the Company’s liquidity and maintain additional financial flexibility in light of the continued COVID-19 pandemic and to comply with an amendment to the Credit Facility described in Note 5 which restricts the Company from paying distributions on common stock until no earlier than the quarter ending June 30, 2021. Under the new policy, distributions authorized by the Board on the Company’s shares of common stock, if and when declared, are now paid on a quarterly basis in arrears in shares of the Company’s common stock valued at the Company’s estimated per share net asset value of common stock in effect on the applicable date, based on a single record date to be specified at the beginning of each quarter. The Company declared the Stock Dividends of 0.01349 shares of the Company’s common stock on each share of the Company’s outstanding common stock on October 1, 2020 and January 4, 2021. This amount was based on the Company’s prior cash distribution rate of $ 0.85 per share per annum. The Board may further change the Company’s common stock distribution policy at any time, further reduce the amount of distributions paid or suspend distribution payments at any time, and therefore distribution payments are not assured. The following table details from a tax perspective the portion of distributions classified as a return of capital, capital gain dividend income and ordinary dividend income, per share per annum, for the years ended December 31, 2020, 2019 and 2018, retroactively adjusted for the effect of the Stock Dividends: Year Ended December 31, 2020 2019 2018 Return of capital (1) 100.0 % $ 0.42 100 % $ 0.83 100 % $ 0.92 Capital gain dividend income — % — — % — — % — Ordinary dividend income — % — — % — — % — Total 100.0 % $ 0.42 100.0 % $ 0.83 100.0 % $ 0.92 ________ (1) Amount for December 31, 2020 represents actual cash distributions paid to common shareholders during the year ended 2020, but excludes the stock dividends which do not represent taxable dividends to the Company’s shareholders for U.S. federal income tax purposes. F-43 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Series A Preferred Stock Dividends on our Series A Preferred Stock accrue in an amount equal to $ 1.84375 per share each year ($ 0.460938 per share per quarter) to Series A Preferred Stock holders, which is equivalent to 7.375 % per annum on the $ 25.00 liquidation preference per share of Series A Preferred Stock. Dividends on the Series A Preferred Stock are cumulative and payable quarterly in arrears on the 15th day of January, April, July and October of each year or, if not a business day, the next succeeding business day to holders of record on the close of business on the record date set by our board of directors and declared by us. The first quarterly dividend for the Series A Preferred Stock sold in this offering was paid on January 15, 2020 and represented an accrual for less than a full quarter, covering the period from December 11, 2019 to December 31, 2019. Any accrued and unpaid dividends payable with respect to the Series A Preferred Stock become part of the liquidation preference thereof. Note 9 — Related Party Transactions and Arrangements As of December 31, 2020 and 2019, the Special Limited Partner owned 9,008 and 8,888 shares, respectively, of the Company’s outstanding common stock. The Advisor and its affiliates may incur and pay costs and fees on behalf of the Company. As of December 31, 2020 and 2019, the Advisor held 90 partnership units in the OP designated as “OP Units” (“OP Units”). The limited partnership agreement of the OP (as amended from time to time, the “LPA”) allows for the special allocation, solely for tax purposes, of excess depreciation deductions of up to $ 10.0 million to the Advisor, a limited partner of the OP. In connection with this special allocation, the Advisor has agreed to restore a deficit balance in its capital account in the event of a liquidation of the OP and has agreed to provide a guaranty or indemnity of indebtedness of the OP. Fees Incurred in Connection with the Operations of the Company On February 17, 2017, the members of a special committee of the Board unanimously approved certain amendments to and a restatement of the then effective advisory agreement, by and among the Company, the OP and the Advisor (the “Second A&R Advisory Agreement”). The Second A&R Advisory Agreement, which superseded, amended and restated the previously effective advisory agreement (the “Original A&R Advisory Agreement”), took effect on February 17, 2017. The initial term of the Second A&R Advisory Agreement expires on February 17, 2027, and is automatically renewable for another ten-year term upon each ten-year anniversary unless the Second A&R Advisory Agreement is terminated (i) with notice of an election not to renew at least 365 days prior to the applicable tenth anniversary, (ii) in accordance with a change of control (as defined in the Second A&R Advisory Agreement) or a transition to self-management, (iii) by 67 % of the independent directors of the Board for cause, without penalty, with 45 days’ notice or (iv) with 60 days prior written notice by the Advisor for (a) a failure to obtain a satisfactory agreement for any successor to the Company to assume and agree to perform obligations under the Second A&R Advisory Agreement or (b) any material breach of the Second A&R Advisory Agreement of any nature whatsoever by the Company. On July 25, 2019, the Company entered into Amendment No. 1 to the Second Amended and Restated Advisory Agreement (the “Advisory Agreement Amendment”) among the Company, the OP, and the Advisor. The Advisory Agreement Amendment was unanimously approved by the Company’s independent directors. Additional information on the Advisory Agreement Amendment is included later in this footnote under “—Professional Fees and Other Reimbursements.” Acquisition Expense Reimbursements The Advisor may be reimbursed for services provided for which it incurs investment-related expenses, or insourced expenses. The amount reimbursed for insourced expenses may not exceed 0.5 % of the contract purchase price of each acquired property or 0.5 % of the amount advanced for a loan or other investment. Additionally, the Company reimburses the Advisor for third party acquisition expenses. Under the Second A&R Advisory Agreement, total acquisition expenses may not exceed 4.5 % of the contract purchase price of the Company’s portfolio or 4.5 % of the amount advanced for all loans or other investments. This threshold has not been exceeded through December 31, 2020. Asset Management Fees and Variable Management/Incentive Fees Under the LPA and the advisory agreement that was superseded by the Original A&R Advisory Agreement and until March 31, 2015, for its asset management services, the Company issued the Advisor an asset management subordinated participation by causing the OP to issue (subject to periodic approval by the Board) to the Advisor partnership units of the OP designated as “Class B Units” (“Class B Units”). The Class B Units were intended to be profit interests and vest, and no longer are subject to forfeiture, at such time as: (x) the value of the OP’s assets plus all distributions made equals or exceeds the total amount of capital contributed by investors plus a 6.0 % cumulative, pre-tax, non-compounded annual return thereon (the F-44 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 “Economic Hurdle”); (y) any one of the following occurs: (1) a listing; (2) another liquidity event or (3) the termination of the advisory agreement by an affirmative vote of a majority of the Company’s independent directors without cause; and (z) the Advisor is still providing advisory services to the Company (the “Performance Condition”). Unvested Class B Units will be forfeited immediately if: (a) the advisory agreement is terminated for any reason other than a termination without cause; or (b) the advisory agreement is terminated by an affirmative vote of a majority of the Company’s independent directors without cause before the Economic Hurdle has been met. Subject to approval by the Board, the Class B Units were issued to the Advisor quarterly in arrears pursuant to the terms of the LPA. The number of Class B Units issued in any quarter was equal to: (i) the excess of (A) the product of (y) the cost of assets multiplied by (z) 0.1875 % over (B) any amounts payable as an oversight fee (as described below) for such calendar quarter; divided by (ii) the value of one share of common stock as of the last day of such calendar quarter, which was initially equal to $ 22.50 (the price in the Company’s initial public offering of common stock minus the selling commissions and dealer manager fees). The value of issued Class B Units will be determined and expensed when the Company deems the achievement of the Performance Condition to be probable. As of December 31, 2020, the Company cannot determine the probability of achieving the Performance Condition. The Advisor receives cash distributions on each issued Class B Unit equivalent to the cash distribution paid, if any on the Company’s common stock in an amount retroactively adjusted to reflect the Stock Dividends, other stock dividends and other similar events. These distributions on Class B Units are included in general and administrative expenses in the consolidated statement of operations and comprehensive loss until the Performance Condition is considered probable to occur. The Board has previously approved the issuance of 359,250 Class B Units to the Advisor in connection with this arrangement. The Board determined in February 2018 that Economic Hurdle had been satisfied, however none of the events have occurred, including a listing of the Company’s common stock on a national securities exchange, which would have satisfied the other vesting requirement of the Class B Units. Therefore, no expense has ever been recognized in connection with the Class B Units. On May 12, 2015, the Company, the OP and the Advisor entered into an amendment to the then-current advisory agreement, which, among other things, provided that the Company would cease causing the OP to issue Class B Units to the Advisor with respect to any period ending after March 31, 2015. Effective February 17, 2017, the Second A&R Advisory Agreement requires the Company to pay the Advisor a base management fee, which is payable on the first business day of each month. The fixed portion of the base management fee is equal to $ 1.625 million per month, while the variable portion of the base management fee is equal to one-twelfth of 1.25 % of the cumulative net proceeds of any equity (including convertible equity and certain convertible debt but excluding proceeds from the DRIP) issued by the Company and its subsidiaries subsequent to February 17, 2017 per month. The base management fee is payable to the Advisor or its assignees in cash, OP Units or shares, or a combination thereof, the form of payment to be determined at the discretion of the Advisor and the value of any OP Unit or share to be determined by the Advisor acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. In addition, the Second A&R Advisory Agreement requires the Company to pay the Advisor a variable management/incentive fee quarterly in arrears equal to (1) the product of fully diluted number of shares of common stock outstanding multiplied by (2) (x) 15.0 % of the applicable prior quarter’s Core Earnings (as defined below) per share in excess of $ 0.375 per share plus (y) 10.0 % of the applicable prior quarter’s Core Earnings per share in excess of $ 0.47 per share. Core Earnings is defined as, for the applicable period, net income or loss, computed in accordance with GAAP, excluding non-cash equity compensation expense, the variable management/incentive fee, acquisition and transaction related fees and expenses, financing related fees and expenses, depreciation and amortization, realized gains and losses on the sale of assets, any unrealized gains or losses or other non-cash items recorded in net income or loss for the applicable period, regardless of whether such items are included in other comprehensive income or loss, or in net income, one-time events pursuant to changes in GAAP and certain non-cash charges, impairment losses on real estate related investments and other than temporary impairments of securities, amortization of deferred financing costs, amortization of tenant inducements, amortization of straight-line rent and any associated bad debt reserves, amortization of market lease intangibles, provision for loss loans, and other non-recurring revenue and expenses (in each case after discussions between the Advisor and the independent directors and approved by a majority of the independent directors). The variable management/incentive fee is payable to the Advisor or its assignees in cash or shares, or a combination of both, the form of payment to be determined in the sole discretion of the Advisor and the value of any share to be determined by the Advisor acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. No variable management incentive fee was incurred for the years ended December 31, 2020, 2019 and 2018. F-45 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Property Management Fees Unless the Company contracts with a third party, the Company pays the Property Manager a property management fee on a monthly basis, equal to 1.5 % of gross revenues from the Company’s stand-alone single-tenant net leased properties managed and 2.5 % of gross revenues from all other types of properties managed, plus market-based leasing commissions applicable to the geographic location of the property. The Company also reimburses the Property Manager for property level expenses incurred by the Property Manager. The Property Manager may charge a separate fee for the one-time initial rent-up or leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties, and the Property Manager is allowed to receive a higher property management fee in certain cases if approved by our Board of Directors (including a majority of the independent directors). If the Company contracts directly with third parties for such services, the Company will pay the third party customary market fees and will pay the Property Manager an oversight fee of 1.0 % of the gross revenues of the property managed by the third party. In no event will the Company pay the Property Manager or any affiliate of the Property Manager both a property management fee and an oversight fee with respect to any particular property. If the Property Manager provides services other than those specified in the Property Management Agreement, the Company will pay the Property Manager a monthly fee equal to no more than that which the Company would pay to a third party that is not an affiliate of the Company or the Property Manager to provide the services. On February 17, 2017, the Company entered into the Amended and Restated Property Management and Leasing Agreement (the “A&R Property Management Agreement”) with the OP and the Property Manager. The A&R Property Management Agreement automatically renews for successive one-year terms unless any party provides written notice of its intention to terminate the A&R Property Management Agreement at least 90 days prior to the end of the term. Neither party provided notice of intent to terminate. The current term of the A&R Property Management Agreement expires February 17, 2021.The Property Manager may assign the A&R Property Management Agreement to any party with expertise in commercial real estate which has, together with its affiliates, over $ 100.0 million in assets under management. On April 10, 2018, in connection with the Multi-Property CMBS Loan, the Company and the OP entered into a further amendment to the A&R Property Management Agreement confirming, consistent with the intent of the parties, that the borrowers under the Multi-Property CMBS Loan and other subsidiaries of the OP that own or lease the Company’s properties are the direct obligors under the arrangements pursuant to which the Company’s properties are managed by either the Property Manager or a third party overseen by the Property Manager pursuant to the A&R Property Management Agreement. Professional Fees and Other Reimbursements The Company reimburses the Advisor’s costs of providing administrative services including personnel costs, except for costs to the extent that the employees perform services for which the Advisor receives a separate fee. This reimbursement includes reasonable overhead expenses for employees of the Advisor or its affiliates directly involved in the performance of services on behalf of the Company, including the reimbursement of rent expense at certain properties that are both occupied by employees of the Advisor or its affiliates and owned by affiliates of the Advisor. During the year ended December 31, 2020, 2019 and 2018, the Company incurred $ 10.8 million, $ 10.6 million and $ 8.9 million, respectively, of reimbursement expenses from the Advisor for providing administrative services. These reimbursement expenses are included in general and administrative expense on the consolidated statements of operations and comprehensive income (loss). On July 25, 2019, the Company entered into the Advisory Agreement Amendment. Under the Second A&R Advisory Agreement, including prior to the Advisory Agreement Amendment, the Company has been required to reimburse the Advisor for, among other things, reasonable salaries and wages, benefits and overhead of all employees of the Advisor or its affiliates, except for costs of employees to the extent that the employees perform services for which the Advisor receives a separate fee. The Advisory Agreement Amendment clarifies that, with respect to executive officers of the Advisor, the Company is required to reimburse the Advisor or its affiliates for the reasonable salaries and wages, benefits and overhead of the Company’s executive officers, other than for any executive officer that is also a partner, member or equity owner of AR Global, an affiliate of the Advisor. Further, under the Advisory Agreement Amendment, the aggregate amount of expenses relating to salaries, wages and benefits, including for executive officers and all other employees of the Advisor or its affiliates (the “Capped Reimbursement Amount”), for each fiscal year is subject to a limit that is equal to the greater of: (a) a fixed component (the “Fixed Component”) and (b) a variable component (the “Variable Component”). F-46 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Both the Fixed Component and the Variable Component increase by an annual cost of living adjustment equal to the greater of (x) 3.0 % and (y) the CPI, as defined in the amendment for the prior year ended December 31st. Initially, for the year ended December 31, 2019; (a) the Fixed Component was equal to $ 6.8 million and (b) the Variable Component was equal to (i) the sum of the total real estate investments, at cost as recorded on the balance sheet dated as of the last day of each fiscal quarter (the “Real Estate Cost”) in the year divided by four , which amount is then (ii) multiplied by 0.29 %. If the Company sells real estate investments aggregating an amount equal to or more than 25.0 % of Real Estate Cost, in one or a series of related dispositions in which the proceeds of the disposition(s) are not reinvested in Investments (as defined in the Advisory Agreement Amendment), then within 12 months following the disposition(s), the advisory agreement requires the Advisor and the Company to negotiate in good faith to reset the Fixed Component; provided that if the proceeds of the disposition(s) are paid to shareholders of the Company as a special distribution or used to repay loans with no intent of subsequently re-financing and re-investing the proceeds thereof in Investments, the advisory agreement requires these negotiations within 90 days thereof, in each case taking into account reasonable projections of reimbursable costs in light of the Company’s reduced assets. As part of this reimbursement, for the year ended December 31, 2020, the Company paid approximately $ 2.5 million in 2019 to the Advisor or its affiliates as reimbursement for bonuses of employees of the Advisor or its affiliates who provided administrative services during such calendar year, prorated for the time spent working on matters relating to the Company. The Company does not reimburse the Advisor or its affiliates for any bonus amounts relating to time dedicated to the Company by Edward M. Weil, Jr., the Company’s Chief Executive Officer. The Advisor formally awarded 2019 bonuses to employees of the Advisor or its affiliates in September 2020 (the “2019 Bonus Awards”). The original $ 2.5 million estimate for bonuses recorded and paid to the Advisor in 2019 exceeded the cash portion of the 2019 Bonus Awards to be paid to employees of the Advisor or its affiliates and to be reimbursed by the Company by $ 1.2 million. As a result, during the three months ended September 30, 2020, the Company recorded a receivable from the Advisor of $ 1.2 million in prepaid expenses and other assets on the consolidated balance sheet and a corresponding reduction in general and administrative expenses. Pursuant to authorization by the independent members of the Company’s board of directors, the $ 1.2 million receivable is payable to the Company over a 10-month period from January 2021 through October 2021. Reimbursements for the cash portion of 2020 bonuses to employees of the Advisor or its affiliates continue to be expensed and reimbursed on a monthly basis during 2020 in accordance with estimates provided by the Advisor. Generally, prior to the 2019 Bonus Awards, employee bonuses have been formally awarded to employees of the Advisor or its affiliates in March as an all - cash award and paid out by the Advisor in the year subsequent to the year in which services were rendered to the Company. In December 2020, after mediation on October 27, 2020, the Advisor agreed to a settlement with the Company’s former chief executive officer for severance claims related to his termination in 2018. Pursuant to the settlement, among other parties, the Advisor advised the Company that the Company and its directors and officers were released from any and all actions or claims the former chief executive officer now has or may ever have against them. Prior to the agreement, the Advisor did not believe any settlement was probable. In consideration of the release, among other things, and upon the recommendation of its nominating and corporate governance committee, which determined that the reimbursement was advisable and fair to, and in the best interest of, the Company, the Company’s board of directors approved the reimbursement by the Company to the Advisor of severance payments and legal costs relating to this settlement and determined that the reimbursement for those payments and costs would not be subject to (and therefore would not be aggregated with other reimbursements that are subject to) the Capped Reimbursement Amount. The Company recorded approximately $ 2.2 million of expenses for the reimbursement which is included in general and administrative expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. F-47 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Summary of fees, expenses and related payables The following table details amounts incurred, forgiven and payable in connection with the Company’s operations-related services described above as of and for the periods presented: Year Ended December 31, Payable (Receivable) as of 2020 2019 2018 December 31, (In thousands) Incurred Incurred Incurred 2020 2019 One-time fees and reimbursements: Acquisition cost reimbursements $ 81 $ 39 $ 176 $ 11 $ — Ongoing fees and reimbursements: Asset management fees 19,987 19,526 19,500 — 27 Property management fees (6) 4,197 3,888 3,571 288 ( 44 ) Professional fees and other reimbursements (1) (4) 12,102 10,073 8,883 ( 61 ) ( 377 ) (5) Professional fees credit due from Advisor ( 1,217 ) — — ( 1,217 ) (3) — Distributions on Class B Units (2) 178 305 340 — — Total related party operation fees and reimbursements $ 35,328 $ 33,831 $ 32,470 $ ( 979 ) $ ( 394 ) _________ (1) Included in general and administrative expenses in the consolidated statements of operations. Includes $ 5.6 million and $ 7.2 million subject to the Capped Reimbursement Amount for the years ended December 31, 2020 and 2019, respectively. (2) Prior to April 1, 2015, the Company caused the OP to issue (subject to periodic approval by the Board) to the Advisor restricted performance-based Class B Units for asset management services. As of December 31, 2020, the Board had approved the issuance of, and the OP had issued, 359,250 Class B Units to the Advisor in connection with this arrangement. Effective April 1, 2015, the Company began paying an asset management fee to the Advisor or its assignees in cash, in shares, or a combination of both and no longer issues any Class B Units. (3) Balance includes a receivable of $ 1.2 million from the Advisor related to the overpayment of 2019 Bonus Awards as of December 31, 2020 which, pursuant to authorization by the independent members of the Company’s board of directors, is payable over a ten month period from January 2021 to October 2021. (4) During the year ended December 31, 2019, the Company recorded a reduction of general and administrative expenses in the amount of $ 0.5 million related to the reversal of a payable balance due to RCS Capital Corporation. During the year ended December 31, 2020 the Company recorded approximately $ 2.2 million of expense reimbursements to the Advisor for severance payments and related legal costs relating to the termination of its former Chief Executive Officer. (5) Balance includes a receivable of $ 0.5 million from the Advisor as of December 31, 2019, previously recorded in the fourth quarter of 2018, which, pursuant to authorization by the independent members of the Company’s board of directors, was fully paid during 2020. (6) Inclusive of $ 0.3 million of leasing commissions which are included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2020. Fees and Participations Incurred in Connection with a Listing or the Liquidation of the Company’s Real Estate Assets Fees Incurred in Connection with a Listing If the common stock of the Company is listed on a national exchange, the Special Limited Partner will be entitled to receive a promissory note as evidence of its right to receive a subordinated incentive listing distribution from the OP equal to 15.0 % of the amount by which the market value of all issued and outstanding shares of common stock plus distributions exceeds the aggregate capital contributed plus an amount equal to a 6.0 % cumulative, pre-tax non-compounded annual return to investors in the Company’s initial public offering of common stock. No such distribution was incurred during the years ended December 31, 2020, 2019 and 2018. If the Special Limited Partner or any of its affiliates receives the subordinated incentive listing distribution the Special Limited Partner and its affiliates will no longer be entitled to receive the subordinated participation in net sales proceeds or the subordinated incentive termination distribution described below. Subordinated Participation in Net Sales Proceeds Upon a liquidation or sale of all or substantially all of the Company’s assets, including through a merger or sale of stock, the Special Limited Partner will be entitled to receive a subordinated participation in the net sales proceeds of the sale of real estate assets from the OP equal to 15.0 % of remaining net sale proceeds after return of capital contributions to investors in the Company’s initial public offering of common stock plus payment to investors of a 6.0 % cumulative, pre-tax non-compounded annual return on the capital contributed by investors. No such participation in net sales proceeds became due and payable during the years ended December 31, 2020, 2019 and 2018. Any amount of net sales proceeds paid to the Special Limited Partner or any of its affiliates prior to the Company’s listing or termination or non-renewal of the advisory agreement with the F-48 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Advisor, as applicable, will reduce dollar for dollar the amount of the subordinated incentive listing distribution described above and subordinated incentive termination distribution described below. Termination Fees Under the operating partnership agreement of the OP, upon termination or non-renewal of the advisory agreement with the Advisor, wi th or without cause, the Special Limited Partner will be entitled to receive a promissory note as evidence of its right to receive subordinated termination dist ributions from the OP equal to 15.0 % of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed plus an amount equal to an annual 6.0 % cumulative, pre-tax, non-compounded annual return to investors in the Company’s initial public offering of common stock. The Special Limited Partner is able to elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs. If the Special Limited Partner or any of its affiliates receives the subordinated incentive termination distribution, the Special Limited Partner and its affiliates will no longer be entitled to receive the subordinated participation in net sales proceeds or the subordinated incentive listing distribution described above. Under the Second A&R Advisory Agreement, upon the termination or non-renewal of the agreement, the Advisor will be entitled to receive from the Company all amounts due to the Advisor, including any change of control fee and transition fee (both described below), as well as the then-present fair market value of the Advisor’s interest in the Company. All fees will be due within 30 days after the effective date of the termination of the Second A&R Advisory Agreement. Upon a termination by either party in connection with a change of control (as defined in the Second A&R Advisory Agreement), the Company would pay the Advisor a change of control fee equal to the product of four (4) and the “Subject Fees.” Upon a termination by the Company in connection with a transition to self-management, the Company would pay the Advisor a transition fee equal to (i) $ 15.0 million plus (ii) the product of four multiplied by the Subject Fees, provided that the transition fee shall not exceed an amount equal to 4.5 multiplied by the Subject Fees. The Subject Fees are equal to (i) the product of four multiplied by the actual base management fee plus (ii) the product of four multiplied by the actual variable management/incentive fee, in each of clauses (i) and (ii), payable for the fiscal quarter immediately prior to the fiscal quarter in which the change of control occurs or the transition to self-management, as applicable, is consummated, plus (iii) without duplication, the annual increase in the base management fee resulting from the cumulative net proceeds of any equity raised (but excluding proceeds from the DRIP) in respect to the fiscal quarter immediately prior to the fiscal quarter in which the change of control occurs or the transition to self-management, as applicable, is consummated. The right to termination of the Second A&R Advisory Agreement in connection with a change of control or transition to self-management is subject to a lockout period that requires the notice of any termination in connection with a change of control or transition to self-management to be delivered after February 14, 2019. Note 10 — Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company and asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that the Advisor and its affiliates are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. F-49 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Note 11 — Equity-Based Compensation Restricted Share Plan The Company has adopted an employee and director incentive restricted share plan (as amended from time to time, the “RSP”), which provides the Company with the ability to grant awards of restricted shares of common stock (“restricted shares”) to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of shares of common stock that may be subject to awards granted under the RSP may not exceed 5.0 % of the Company’s outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 3.5 million shares (as such number may be further adjusted for stock splits, stock dividends, combinations and similar events). Prior to August 2017, the RSP provided for an automatic grant of 1,333 restricted shares to each of the independent directors, without any further approval by the Board or the stockholders, on the date of his or her initial election to the Board and thereafter on the date of each annual stockholder meeting. The restricted shares granted as annual automatic awards prior to August 2017 were subject to vesting over a five-year period following the date of grant. In August 2017, the Board amended the RSP to provide that the number of restricted shares comprising the automatic annual award to each of the independent directors would be equal to the quotient of $ 30,000 divided by the then-current Estimated Per-Share NAV and subsequently amended and restated the RSP to eliminate the automatic annual awards and to make other revisions related to the implementation of a new independent director equity compensation program. As part of this independent director equity compensation program, the Board approved a one-time grant of restricted share awards to the independent directors as follows: (i) 300,000 restricted shares to the chairman, with one-seventh of the shares vesting annually in equal increments over a seven-year period with initial vesting on August 4, 2018; and (ii) 25,000 restricted shares to each of the three other independent directors, with one-fifth of the shares vesting annually in equal increments over a five-year period with initial vesting on August 4, 2018. In connection with these one-time grants, the restricted shares granted as automatic annual awards in connection with the Company’s 2017 annual meeting of stockholders on July 21, 2017 were forfeited. On July 29, 2019, the Board elected B.J. Penn as a member of the Board to serve as a director effective immediately. Mr. Penn, like the Company’s other independent directors, participates in the Company’s independent director compensation program. During the year ended December 31, 2019, the Company paid to Mr. Penn an annual cash retainer effective as of July 29, 2019 pro-rated for the remaining portion of the current annual period, and he was awarded 15,000 restricted shares vesting annually in equal increments over a three-year period with initial vesting on August 4, 2020. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock are subject to the same restrictions as the underlying restricted shares. F-50 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The following table reflects the amount of shares outstanding as of December 31, 2020 and activity for the period presented: Number of Common Shares Weighted-Average Issue Price Unvested, December 31, 2017 382,510 $ 21.47 Granted — — Vested ( 60,268 ) 21.78 Forfeitures — — Unvested, December 31, 2018 322,242 21.41 Granted 15,000 17.50 Vested ( 60,001 ) 21.48 Forfeitures — — Unvested, December 31, 2019 277,241 21.18 Stock dividend 2,878 15.75 Granted — — Vested ( 64,735 ) 21.18 Forfeitures — — Unvested, December 31, 2020 215,384 21.11 As of December 31, 2020, the Company had $ 4.0 million of unrecognized compensation cost related to unvested restricted share awards granted under the RSP. That cost is expected to be recognized over a weighted-average period of 3.2 years. Compensation expense related to restricted shares was $ 1.3 million, $ 1.3 million and approximately $ 1.2 million during the years ended December 31, 2020, 2019 and 2018, respectively. Other Share-Based Compensation The Company may issue common stock in lieu of cash to pay fees earned by the Company’s directors at the respective director’s election. There are no restrictions on shares issued in lieu of cash compensation since these payments in lieu of cash relate to fees earned for services performed. No such shares were issued during the years ended December 31, 2020, 2019 and 2018. F-51 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Note 12 — Accumulated Other Comprehensive (Loss) Income The following table illustrates the changes in accumulated other comprehensive (loss) income as of and for the periods presented: (In thousands) Unrealized Gains (Losses) on Designated Derivative Balance, December 31, 2017 2,473 Other comprehensive income, before reclassifications 2,367 Amounts reclassified from accumulated other comprehensive (loss) income ( 258 ) Balance, December 31, 2018 4,582 Other comprehensive loss, before reclassifications ( 10,753 ) Amounts reclassified from accumulated other comprehensive (loss) income ( 872 ) Balance, December 31, 2019 ( 7,043 ) Other comprehensive loss, before reclassifications ( 40,614 ) Amounts reclassified from accumulated other comprehensive (loss) income 7,999 Rebalancing of ownership percentage ( 15 ) Balance, December 31, 2020 $ ( 39,673 ) Accumulated other comprehensive (loss) income predominately relates to the unrealized gains (losses) on designated derivatives, however, as previously discussed in Note 7 — Derivatives and Hedging , a previously designated hedge was terminated and the termination costs are being amortized over the term of the hedged item. The unamortized portion of the terminated swap still remaining in accumulated other comprehensive (loss) income is $ 1.3 million as of December 31, 2020. F-52 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Note 13 — Non-Controlling Interests Non-Controlling Interests in the Operating Partnership The Company is the sole general partner and holds substantially all of the OP Units. As of December 31, 2020 and 2019, the Advisor held 90 OP Units, which represents a nominal percentage of the aggregate ownership in the OP. In November 2014, the Company partially funded the purchase of an MOB from an unaffiliated third party by causing the OP to issue 405,908 OP Units, with a value of $ 10.1 million, or $ 25.00 per unit, to the unaffiliated third party. A holder of OP Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s common stock in an amount retroactively adjusted to reflect the Stock Dividends, other stock dividends and other similar events. After holding the OP Units for a period of one year, a holder of OP Units has the right to redeem OP Units for, at the option of the OP, the corresponding number of shares of the Company’s common stock as retroactively adjusted for the Stock Dividends, other stock dividends and other similar events, or the cash equivalent. The remaining rights of the limited partners in the OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets. During the years ended December 31, 2020, 2019 and 2018, OP Unit non-controlling interest holders were paid distributions of $ 0.2 million, $ 0.3 million, and $ 0.5 million respectively. Non-Controlling Interests in Property Owning Subsidiaries The Company also has investment arrangements with other unaffiliated third parties whereby such investors receive an ownership interest in certain of the Company’s property-owning subsidiaries and are entitled to receive a proportionate share of the net operating cash flow derived from the subsidiaries’ property. Upon disposition of a property subject to non-controlling interest, the investor will receive a proportionate share of the net proceeds from the sale of the property. The investor has no recourse to any other assets of the Company. Due to the nature of the Company’s involvement with these arrangements and the significance of its investment in relation to the investment of the third party, the Company has determined that it controls each entity in these arrangements and therefore the entities related to these arrangements are consolidated within the Company’s financial statements. A non-controlling interest is recorded for the investor’s ownership interest in the properties. On November 4, 2020, the Company purchased all of the outstanding the membership interests in the joint venture that owns the UnityPoint Clinics in Muscatine, Iowa and Moline, Illinois for approximately $ 0.6 million, funded with cash on hand. Following this transaction, the properties were wholly owned by the Company and added to the borrowing base under the Credit Facility. The following table summarizes the activity related to investment arrangements with unaffiliated third parties. Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement Distributions As of December 31, As of December 31, As of December 31, Year Ended December 31, Property Name (Dollar amounts in thousands) Investment Date 2020 2020 2020 2019 2020 2019 2018 Plaza Del Rio Medical Office Campus Portfolio (1) May 2015 $ 371 2.2 % $ 12,790 $ 14,220 $ — $ — $ 87 UnityPoint Clinic Portfolio (2) December 2017 $ — — % $ — $ 8,842 $ — $ — $ — _____________ (1) One property within the Plaza Del Rio Medical Office Campus Portfolio was mortgaged as part of the Multi-Property CMBS Loan. See Note 4 - Mortgage Notes Payable for additional information. (2) On November 4, 2020, the Company purchased all of the outstanding membership interests in the joint venture that owns the UnityPoint portfolio. See details above for additional information. F-53 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Note 14 — Net Loss Per Share The following is a summary of the basic and diluted net loss per share computation for the years ended December 31, 2020, 2019 and 2018 and has been retroactively adjusted to reflect the Stock Dividend (see Note 1 — Organization for additional details): Year Ended December 31, 2020 2019 2018 Net loss attributable to stockholders (in thousands) $ ( 78,781 ) $ ( 88,087 ) $ ( 52,762 ) Basic and diluted weighted-average shares outstanding (1) 94,639,833 94,433,640 93,593,719 Basic and diluted net loss per share (1) $ ( 0.83 ) $ ( 0.93 ) $ ( 0.56 ) (1) Retroactively adjusted for the effects of the Stock Dividends (see Note 1 — Organization for additional details)). Diluted net loss per share assumes the conversion of all common stock equivalents into an equivalent number of shares of common stock, unless the effect is antidilutive. The Company considers unvested restricted shares, OP Units and Class B Units to be common share equivalents. The Company had the following common stock equivalents on a weighted-average basis that were excluded from the calculation of diluted net loss per share attributable to stockholders as their effect would have been antidilutive. The amounts in the table below have been retroactively adjusted to reflect the Stock Dividend (see Note 1 — Organization for additional details): December 31, 2020 2019 2018 Unvested restricted shares (1) 257,704 313,711 367,796 OP Units (2) 417,025 417,025 417,025 Class B Units (3) 369,007 369,007 369,007 Total weighted average antidilutive common share equivalents 1,043,736 1,099,743 1,153,828 ________ (1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented. There were 215,373 , 277,241 and 322,242 unvested restricted shares outstanding as of December 31, 2020, 2019 and 2018, respectively. (2) Weighted average number of antidilutive OP Units presented as shares outstanding for the periods presented, at the current conversion rate as adjusted for the effect of the Stock Dividends. There were 405,998 OP Units outstanding as of December 31, 2020, 2019 and 2018. (3) Weighted average number of antidilutive Class B Units presented as shares outstanding for the periods presented, at the current conversion rate as adjusted for the effect of the Stock Dividends. There were 359,250 Class B Units outstanding as of December 31, 2020, 2019 and 2018. Note 15 — Segment Reporting During the years ended December 31, 2020, 2019 and 2018, the Company operated in three reportable business segments for management and internal financial reporting purposes: MOBs, triple-net leased healthcare facilities, and SHOPs. The Company evaluates performance and makes resource allocations based on its three business segments. The medical office building segment primarily consists of MOBs leased to healthcare-related tenants under long-term leases, which may require such tenants to pay a pro rata share of property-related expenses. The triple-net leased healthcare facilities segment primarily consists of investments in seniors housing properties, hospitals, inpatient rehabilitation facilities and skilled nursing facilities under long-term leases, under which tenants are generally responsible to directly pay property-related expenses. The SHOP segment consists of direct investments in seniors housing properties, primarily providing assisted living, independent living and memory care services, which are operated through engaging independent third-party operators. F-54 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Some of the Company’s properties move between its operating segments, for example if they are converted from being triple-net leased to third parties in the triple-net leased healthcare facilities segment to being leased to the TRS and operated and managed on the Company’s behalf by a third-party operator in the SHOP segment. When transfers between segments occur, the Company reclassifies the operating results of the transferred properties to their current segment for both the current and all historical periods in order to present a consistent group of property results. See Note 3 — Real Estate Investments, Net - “Impairments” and “Held for Use Assets” to our consolidated financial statements included in this Annual Report on Form 10-K for additional information. Over the last three years, the Company has had properties transfer between operating segments. Upon such transfers the Company retroactively restates the historical operating results for the segment for all periods presented in that filing and, thereafter, the Company will restate other later prior periods when they are subsequently reported in later filings for comparative purposes. As a result, the Company provides transition disclosure adjustments only for properties that have transitioned since the prior numbers were previously reported. In 2018, the Company had also transitioned (i.e. this asset was operating as a SHOP asset and was not leased to a third party) a property located in Lutz, Florida from its triple-net leased healthcare facilities segment to its SHOP segment. The results of this property had previously been reclassified in the Same Store operating results in 2018 and 2019, and following its disposal in December 2020, it has been again reclassified from Same Store results to Disposals. As described in more detail below, the Company transitioned one property located in Wellington, Florida and the four LaSalle Properties on April 1, 2019 and July 1, 2020, respectively, from its triple-net leased healthcare facilities segment to its SHOP segment (collectively, the “Transition Properties”). See Note 3 — Real Estate Investments for further information about this property and the transition. The results of operations from the Transition Properties are presented within the SHOP segment for the years ended December 31, 2020, 2019 and 2018, respectively. The previously reported same store results had already been retroactively adjusted to reflect the movement of the results Transition Property located in Wellington, Florida and the property located in Lutz, Florida and require no further adjustments thereto. On July 1, 2020, the Company transitioned the LaSalle Properties from the triple-net leased healthcare facilities segment to the SHOP segment, and the LaSalle Properties are now leased to the Company’s TRS and operated and managed on the Company’s behalf by a third-party operator. This segment has been applied retrospectively to historical periods starting with the quarter ended September 30, 2020. Net Operating Income The Company evaluates the performance of the combined properties in each segment based on net operating income (“NOI”). NOI is defined as total revenues from tenants, less property operating and maintenance expense. NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss). The Company uses NOI to assess and compare property level performance and to make decisions concerning the operation of the properties. The Company believes that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss). NOI excludes certain components from net income (loss) in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. The Company believes that in order to facilitate a clear understanding of the Company’s operating results, NOI should be examined in conjunction with net income (loss) as presented in the Company’s consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of the Company’s performance or to cash flows as a measure of the Company’s liquidity or ability to pay distributions. F-55 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The following tables reconcile the segment activity, adjusted for the Transition Properties, to consolidated net loss for the years ended December 31, 2020 2019 and 2018: Year Ended December 31, 2020 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Revenue from tenants $ 104,213 $ 15,611 $ 261,788 $ 381,612 Property operating and maintenance 30,851 1,961 210,736 243,548 NOI $ 73,362 $ 13,650 $ 51,052 138,064 Impairment charges ( 36,446 ) Operating fees to related parties ( 23,922 ) Acquisition and transaction related ( 173 ) General and administrative ( 21,572 ) Depreciation and amortization ( 81,053 ) Gain on sale of real estate investments 5,230 Interest expense ( 51,519 ) Interest and other income 44 Loss on non designated derivatives ( 102 ) Income tax expense ( 4,061 ) Net income attributable to non-controlling interests ( 303 ) Allocation for preferred stock ( 2,968 ) Net loss attributable to common stockholders $ ( 78,781 ) Year Ended December 31, 2019 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Revenue from tenants $ 100,379 $ 14,564 $ 259,971 $ 374,914 Property operating and maintenance 31,813 2,310 200,062 234,185 NOI 68,566 12,254 59,909 140,729 Impairment charges ( 55,969 ) Operating fees to related parties ( 23,414 ) Acquisition and transaction related ( 362 ) General and administrative ( 20,530 ) Depreciation and amortization ( 81,032 ) Interest expense ( 56,059 ) Interest and other income 7 Gain on sale of real estate investments 8,790 Loss on sale of non-designated derivatives ( 68 ) Income tax expense ( 399 ) Net loss attributable to non-controlling interests 393 Allocation for preferred stock ( 173 ) Net loss attributable to stockholders $ ( 88,087 ) ______________ (1) The results of operations from the Transition Properties are presented within the SHOP segment for the years ended December 31, 2020 and 2019, respectively. F-56 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Year Ended December 31, 2018 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Revenue from tenants $ 99,103 $ 14,970 $ 248,333 $ 362,406 Property operating and maintenance 30,295 1,424 189,278 220,997 NOI 68,808 13,546 59,055 141,409 Impairment charges ( 20,655 ) Operating fees to related parties ( 23,071 ) Acquisition and transaction related ( 302 ) General and administrative ( 17,275 ) Depreciation and amortization ( 83,212 ) Gain on sale of real estate investment ( 70 ) Interest expense ( 49,471 ) Interest and other income 23 Loss on non-designated derivatives ( 157 ) Income tax expense ( 197 ) Net loss attributable to non-controlling interests 216 Net loss attributable to common stockholders $ ( 52,762 ) ______________ (1) The results of operations from the Transition Properties are presented within the SHOP segment for the year ended December 31, 2018. The following table reconciles the segment activity to consolidated total assets as of the periods presented: December 31, (In thousands) 2020 2019 ASSETS Investments in real estate, net: Medical office buildings $ 883,471 $ 891,477 Triple-net leased healthcare facilities (1) 238,427 256,661 Seniors housing — operating properties (1) 987,050 905,453 Total investments in real estate, net 2,108,948 2,053,591 Cash and cash equivalents 72,357 95,691 Restricted cash 17,989 15,908 Assets held for sale 90 70,839 Derivative assets, at fair value 13 392 Straight-line rent receivable, net 23,322 21,182 Operating lease right-of-use asset 13,912 14,351 Prepaid expenses and other assets 34,932 39,707 Deferred costs, net 15,332 13,642 Total assets $ 2,286,895 $ 2,325,303 __________________ (1) The Transition Properties are presented within the SHOP segment as of December 31, 2020 and 2019. F-57 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 The following table reconciles capital expenditures by reportable business segments, excluding corporate non-real estate expenditures, for the periods presented: Year Ended December 31, (In thousands) 2020 2019 2018 Medical office buildings $ 4,585 $ 5,309 $ 7,582 Triple-net leased healthcare facilities (1) 3,976 396 1,152 Seniors housing — operating properties (1) 12,833 11,014 4,176 Total capital expenditures $ 21,394 $ 16,719 $ 12,910 ___________ (1) The Transition Properties are presented within the SHOP segment as of December 31, 2020, 2019 and 2018. Note 16 — Commitments and Contingencies As of December 31, 2020, the Company has eight operating and six direct financing lease agreements related to certain acquisitions under leasehold interests arrangements. The eight operating leases have durations, including assumed renewals, ranging from 11.8 to 86.7 years as of December 31, 2020. On January 1, 2019, the Company adopted ASU 2016- 02 and recorded ROU assets and lease liabilities related to these ground operating leases (see Note 2 — Summary of Significant Accounting Policies for additional information). The Company did not enter into any additional ground leases during the year ended December 31, 2020. As of December 31, 2020, the Company’s balance sheet includes ROU assets and operating lease liabilities of $ 13.9 million and $ 9.2 million, respectively, which are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the Company’s consolidated balance sheet. In determining operating ROU assets and lease liabilities for the Company’s existing operating leases upon the adoption of the new lease guidance as well as for new operating leases in the current period, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. Since the terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Company’s estimate of this rate required significant judgment. The Company’s ground operating leases have a weighted-average remaining lease term, including assumed renewals, of 41.3 years and a weighted-average discount rate of 7.35 % as of December 31, 2020. For the years ended December 31, 2020 and 2019, the Company paid cash of $ 0.8 million and $ 0.8 million for amounts included in the measurement of lease liabilities and recorded total rental expense from operating leases of $ 0.9 million, $ 1.0 million and $ 0.9 million, on a straight-line basis in accordance with the standard, during the years ended December 31, 2020, 2019 and 2018, respectively. The lease expense is recorded in property operating expenses in the consolidated statements of operations and comprehensive loss. Future Base Rent Payments (In thousands) Operating Leases Direct Financing Leases (1) 2021 $ 663 $ 84 2022 682 86 2023 684 88 2024 686 90 2025 691 93 Thereafter 28,690 7,407 Total minimum lease payments 32,096 7,848 Less: amounts representing interest ( 22,941 ) ( 3,011 ) Total present value of minimum lease payments $ 9,155 $ 4,837 _______ (1) The Direct Finance Lease liability is included in Accounts Payable and accrued expenses on the balance sheet as of December 31, 2020. The Direct Financing lease asset is included as part of building and improvements as the land component was not required to be bifurcated under ASU 840. F-58 Table of Contents HEALTHCARE TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2020 Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of December 31, 2020, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. Note 17 — Quarterly Results (Unaudited) Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2020 and 2019 which has been retroactively adjusted to reflect the Stock Dividends (see Note 1 — Organization for additional details): Quarter Ended (In thousands, except for share and per share data) March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 Total revenues $ 100,235 $ 94,664 $ 95,835 $ 90,878 Net loss attributable to stockholders $ ( 24,744 ) $ ( 22,811 ) $ ( 10,500 ) $ ( 20,726 ) Basic and diluted weighted average shares outstanding (1) 94,458,620 94,479,156 94,796,190 94,821,653 Basic and diluted net loss per share (1) $ ( 0.26 ) $ ( 0.24 ) $ ( 0.11 ) $ ( 0.22 ) Quarter Ended (In thousands, except for share and per share data) March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 (2) Total revenues $ 88,718 $ 96,287 $ 95,440 $ 94,469 Net loss attributable to stockholders $ ( 5,111 ) $ ( 6,054 ) $ ( 28,789 ) $ ( 48,133 ) Basic and diluted weighted average shares outstanding (1) 95,417,626 94,276,398 94,419,591 94,592,579 Basic and diluted net loss per share (1) $ ( 0.05 ) $ ( 0.06 ) $ ( 0.30 ) $ ( 0.51 ) __________ (1) Retroactively adjusted for the effects of the Stock Dividends (see Note 1 — Organization ). (2) During the quarter ended December 31, 2020 and 2019, the Company recorded $ 3.6 million and $ 33.3 million in impairment charges on real estate investments held for use. See Note 3 — Real Estate investments, Net - Impairments for additional details. Note 18 — Subsequent Events The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except the following disclosures: Stock Dividend On January 4, 2021, the Company declared a quarterly stock dividend of 0.01349 shares of the Company’s common stock on each share of the Company’s outstanding common stock. The stock dividend was payable on January 15, 2021 to holders of record of the Company’s common stock at the close of business on January 11, 2021. Michigan SHOP Transfer During the first quarter of 2021, the Company completed the transfer of four properties to the buyer of its 11 Michigan properties sold in the fourth quarter of 2020. See Note 3 — Real Estate Investments, Net for additional information. CARES Act Grants On March 8, 2021, the Company received $ 5.1 million in grants from the CARES Act. Consistent with the Company’s policy on the accounting treatment of funds received through the CARES Act, these funds will be recorded as a reduction of property operating expenses to offset incurred COVID-19 costs. There can be no assurance that the program will be extended or any further amounts received. F-59 Table of Contents Healthcare Trust, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2020 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances at December 31, 2020 Land Building and Improvements Land Building and Improvements Gross Amount at December 31,2020 (1) (2) Accumulated Depreciation (3) (4) Fresenius Medical Care - Winfield, AL (5) AL 5/10/2013 $ — $ 152 $ 1,568 $ — $ — $ 1,720 $ 353 Adena Health Center - Jackson, OH (5) OH 6/28/2013 — 242 4,494 — — 4,736 873 Ouachita Community Hospital - West Monroe, LA (5) LA 7/12/2013 — 633 5,304 — — 5,937 1,049 CareMeridian - Littleton, CO (5) CO 8/8/2013 — 976 8,900 — 111 9,987 2,560 Oak Lawn Medical Center - Oak Lawn, IL IL 8/21/2013 5,343 835 7,217 — — 8,052 1,620 Surgery Center of Temple - Temple, TX (5) TX 8/30/2013 — 225 5,208 — 432 5,865 992 Greenville Health System - Greenville, SC (5), (9) SC 10/10/2013 — 720 3,045 — — 3,765 569 Stockbridge Family Medical - Stockbridge, GA GA 2/21/2014 1,781 823 1,799 — 131 2,753 379 Arrowhead Medical Plaza II - Glendale, AZ AZ 2/21/2014 7,540 — 9,758 — 1,867 11,625 2,458 Village Center Parkway - Stockbridge, GA GA 2/21/2014 2,434 1,135 2,299 — 156 3,590 633 Creekside MOB - Douglasville, GA GA 4/30/2014 8,814 2,709 5,320 — 637 8,666 1,472 Bowie Gateway Medical Center - Bowie, MD MD 5/7/2014 9,153 983 10,321 — 81 11,385 1,878 Campus at Crooks & Auburn Building D - Rochester Mills, MI MI 5/19/2014 3,627 640 4,166 — 118 4,924 831 Berwyn Medical Center - Berwyn, IL (5) IL 5/29/2014 — 1,305 7,559 — — 8,864 1,298 Countryside Medical Arts - Safety Harbor, FL FL 5/30/2014 6,983 915 7,663 — 60 8,638 1,428 St. Andrews Medical Park - Venice, FL FL 5/30/2014 11,119 1,666 10,005 2 933 12,606 2,193 Campus at Crooks & Auburn Building C - Rochester Mills, MI MI 6/3/2014 3,831 609 3,893 — 130 4,632 810 Laguna Professional Center - Elk Grove, CA CA 7/15/2014 8,887 1,811 14,598 — 311 16,720 2,748 UC Davis MOB - Elk Grove, CA CA 7/15/2014 8,136 1,138 7,242 — 282 8,662 1,455 Estate at Hyde Park - Tampa, FL (7) FL 7/31/2014 20,116 1,777 20,308 — 660 22,745 3,950 Autumn Ridge of Clarkston - Clarkston, MI (7) MI 8/12/2014 19,245 655 19,967 — 38 20,660 3,809 Sunnybrook of Burlington - Burlington, IA (6) IA 8/26/2014 12,783 518 16,739 — 240 17,497 3,414 Sunnybrook of Carroll - Carroll, IA (6) IA 8/26/2014 6,144 473 11,263 — 36 11,772 2,086 Prairie Hills at Cedar Rapids - Cedar Rapids, IA (7) IA 8/26/2014 8,014 195 8,595 — 116 8,906 1,623 Prairie Hills at Clinton - Clinton, IA (6) IA 8/26/2014 10,759 890 18,882 — 47 19,819 3,653 Prairie Hills at Des Moines - Des Moines, IA (6) IA 8/26/2014 5,418 647 13,745 — 41 14,433 2,827 Sunnybrook of Fairfield - Fairfield, IA (5) IA 8/26/2014 — 340 14,115 — 233 14,688 2,871 Sunnybrook of Ft. Madison - Ft. Madison, IA (5) IA 8/26/2014 — 263 3,931 — 203 4,397 452 Prairie Hills at Independence - Independence, IA (5) IA 8/26/2014 — 473 10,600 — 176 11,249 1,949 Sunnybrook of Mt. Pleasant - Mt. Pleasant, IA (5) IA 8/26/2014 — 205 10,935 — 125 11,265 1,947 Sunnybrook of Muscatine - Muscatine, IA (6) IA 8/26/2014 11,989 302 13,840 — 145 14,287 2,614 Prairie Hills at Ottumwa - Ottumwa, IA (5) IA 8/26/2014 — 538 9,186 — 78 9,802 1,838 Prairie Hills at Tipton - Tipton, IA (5) IA 8/26/2014 — 306 10,409 — 33 10,748 1,812 F-60 Table of Contents Healthcare Trust, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2020 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances at December 31, 2020 Land Building and Improvements Land Building and Improvements Gross Amount at December 31,2020 (1) (2) Accumulated Depreciation (3) (4) Liberty Court - Dixon, IL (5) IL 8/29/2014 — 119 1,998 — 37 2,154 423 Lakeside Vista - Holland, MI (6) MI 8/29/2014 6,128 378 12,196 — 420 12,994 2,324 The Atrium - Rockford, IL (5) IL 8/29/2014 — 164 1,746 — 237 2,147 213 Arrowhead Medical Plaza I - Glendale, AZ AZ 9/10/2014 4,571 — 6,447 — 1,311 7,758 1,341 Sunnybrook of Burlington - Land - Burlington, IA MO 9/23/2014 — 620 — — — 620 — Community Health MOB - Harrisburg, PA (10) PA 9/26/2014 5,424 — 6,170 — — 6,170 996 Brady MOB - Harrisburg, PA (10) PA 9/26/2014 19,661 — 22,485 — — 22,485 3,545 Landis Memorial - Harrisburg, PA (5), (10) PA 9/26/2014 — — 32,484 — — 32,484 5,138 FOC II - Mechanicsburg, PA (10) PA 9/26/2014 16,136 — 16,473 — 132 16,605 2,982 FOC Clinical - Mechanicsburg, PA (10) PA 9/26/2014 17,695 — 19,634 — — 19,634 3,497 FOC I - Mechanicsburg, PA (10) PA 9/26/2014 8,204 — 8,923 — 155 9,078 1,713 Copper Springs Senior Living - Meridian, ID (5) ID 9/29/2014 — 498 7,130 — 101 7,729 1,771 Addington Place of Brunswick - Brunswick, GA (5) GA 9/30/2014 — 1,509 14,402 — 36 15,947 2,917 Addington Place of Dublin - Dublin, GA (5) GA 9/30/2014 — 403 9,281 — 115 9,799 2,036 Allegro at Elizabethtown - Elizabethtown, KY (5) KY 9/30/2014 — 317 7,290 — 232 7,839 1,719 Addington Place of Johns Creek - Johns Creek, GA (7) GA 9/30/2014 10,139 997 11,943 — 456 13,396 2,492 Allegro at Jupiter - Jupiter, FL (6) FL 9/30/2014 34,370 3,741 49,534 — 276 53,551 9,424 Addington Place of Lee's Summit - Lee's Summit, MO (7) MO 9/30/2014 17,187 2,734 25,008 — 309 28,051 4,772 Addington Place at Mills - Roswell, GA (5) GA 9/30/2014 — 1,000 8,611 — 2,205 11,816 2,139 Addington Place of College Harbour - St Petersburg, FL (5) FL 9/30/2014 — 3,791 8,684 — 1,392 13,867 2,657 Allegro at Stuart - Stuart, FL (6) FL 9/30/2014 49,069 5,018 60,575 — 625 66,218 11,807 Allegro at Tarpon - Tarpon Springs, FL (7) FL 9/30/2014 7,350 2,360 13,728 — 415 16,503 3,363 Addington Place of Titusville - Titusville, FL (6) FL 9/30/2014 12,423 1,379 13,976 — 414 15,769 3,112 Allegro at St. Petersburg - Land - St. Petersburg, FL FL 9/30/2014 — 3,045 — — — 3,045 — Gateway MOB - Clarksville, TN (9) TN 10/3/2014 17,560 — 16,367 — 1,010 17,377 2,993 Addington at Wellington Green - Wellington, FL (5) (11) FL 10/17/2014 — 3,182 25,364 — ( 2,131 ) 26,415 1,002 Dyer Building - Dyer, IN (5) IN 10/17/2014 — 601 8,992 — 64 9,657 1,474 757 Building - Munster, IN (5) IN 10/17/2014 — 645 7,885 — — 8,530 1,272 761 Building - Munster, IN IN 10/17/2014 6,797 1,436 8,616 — 59 10,111 1,491 759 Building - Munster, IN IN 10/17/2014 8,271 1,101 8,899 — — 10,000 1,476 Schererville Building - Schererville, IN IN 10/17/2014 — 1,260 935 — 29 2,224 278 Meadowbrook Senior Living - Agoura Hills, CA (7) CA 11/25/2014 19,167 8,821 48,682 — 1,840 59,343 8,703 F-61 Table of Contents Healthcare Trust, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2020 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances at December 31, 2020 Land Building and Improvements Land Building and Improvements Gross Amount at December 31,2020 (1) (2) Accumulated Depreciation (3) (4) Mount Vernon Medical Office Building - Mount Vernon, WA (9) WA 11/25/2014 15,797 — 18,519 — 3 18,522 3,059 Wellington at Hershey's Mill - West Chester, PA (5) PA 12/3/2014 — 8,531 80,734 — 1,771 91,036 14,109 Careplex West Medical Office Building - Hampton, VA VA 12/3/2014 7,187 2,628 16,098 — 187 18,913 2,621 Hampton River Medical Arts Building - Hampton, VA (9) PA 12/3/2014 — — 18,083 — 146 18,229 3,170 Eye Specialty Group Medical Building - Memphis, TN TN 12/5/2014 8,475 775 7,223 — — 7,998 1,154 Addington Place of Alpharetta - Alpharetta, GA GA 12/10/2014 — 1,604 26,069 — 500 28,173 4,858 Addington Place of Prairie Village - Prairie Village, KS (7) KS 12/10/2014 14,812 1,782 21,869 — 356 24,007 4,240 Bloom MOB - Harrisburg, PA (10) PA 12/15/2014 15,322 — 15,928 — 175 16,103 2,605 Medical Sciences Pavilion - Harrisburg, PA (10) PA 12/15/2014 18,272 — 22,309 — — 22,309 3,438 Wood Glen Nursing and Rehab Center - West Chicago, IL (5) IL 12/16/2014 — 1,896 16,107 — — 18,003 3,647 Pinnacle Center - Southaven, MS MS 12/16/2014 7,085 1,378 6,547 — 573 8,498 1,344 Paradise Valley Medical Plaza - Phoenix, AZ AZ 12/29/2014 13,085 — 25,194 — 1,178 26,372 4,404 Victory Medical Center at Craig Ranch - McKinney, TX TX 12/30/2014 — 1,596 40,475 — 1,340 43,411 6,488 Rivershores Healthcare & Rehab Centre - Marseilles, IL (5) IL 12/31/2014 — 1,276 6,868 — — 8,144 1,653 Morton Terrace Healthcare & Rehab Centre - Morton, IL (5) IL 12/31/2014 — 709 5,649 — — 6,358 1,610 Morton Villa Healthcare & Rehab Centre - Morton, IL (5) IL 12/31/2014 — 645 3,687 — 87 4,419 1,000 The Heights Healthcare & Rehab Centre - Peoria Heights, IL (5) IL 12/31/2014 — 214 7,952 — — 8,166 2,007 Colonial Healthcare & Rehab Centre - Princeton, IL (5) IL 12/31/2014 — 173 5,871 — — 6,044 1,656 Capitol Healthcare & Rehab Centre - Springfield, IL (5) IL 12/31/2014 — 603 21,699 — 26 22,328 4,792 Acuity Specialty Hospital - Mesa, AZ (5) AZ 1/14/2015 — 1,977 16,203 — 543 18,723 2,713 Acuity Specialty Hospital - Sun City, AZ AZ 1/14/2015 — 2,329 15,795 — 279 18,403 2,602 Addington Place of Shoal Creek - Kansas City, MO (7) MO 2/2/2015 13,391 3,723 22,259 — 383 26,365 4,175 Aurora Healthcare Center - Green Bay, WI (5) WI 3/18/2015 — 1,130 1,678 — — 2,808 311 Aurora Healthcare Center - Greenville, WI (5) WI 3/18/2015 — 259 958 — — 1,217 188 Aurora Healthcare Center - Kiel, WI (5) WI 3/18/2015 — 676 2,214 — — 2,890 367 Aurora Healthcare Center - Plymouth, WI WI 3/18/2015 17,038 2,891 24,224 — — 27,115 4,029 Aurora Healthcare Center - Waterford, WI (5) WI 3/18/2015 — 590 6,452 — — 7,042 1,035 Aurora Healthcare Center - Wautoma, WI (5) WI 3/18/2015 — 1,955 4,361 — — 6,316 729 Arbor View Assisted Living and Memory Care - Burlington, WI (5) WI 3/31/2015 — 367 7,815 — 44 8,226 1,651 Advanced Orthopedic Medical Center - Richmond, VA VA 4/7/2015 15,390 1,523 19,229 — — 20,752 2,934 Palm Valley Medical Plaza - Goodyear, AZ AZ 4/7/2015 2,998 1,890 4,940 — 228 7,058 907 Physicians Plaza of Roane County - Harriman, TN TN 4/27/2015 6,293 1,746 7,842 — 32 9,620 1,276 Adventist Health Lacey Medical Plaza - Hanford, CA CA 4/29/2015 11,526 328 13,302 — 44 13,674 1,925 F-62 Table of Contents Healthcare Trust, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2020 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances at December 31, 2020 Land Building and Improvements Land Building and Improvements Gross Amount at December 31,2020 (1) (2) Accumulated Depreciation (3) (4) Medical Center I - Peoria, AZ AZ 5/15/2015 3,085 807 1,115 — 513 2,435 741 Medical Center II - Peoria, AZ AZ 5/15/2015 — 945 1,330 — 5,023 7,298 1,125 Commercial Center - Peoria, AZ AZ 5/15/2015 3,254 959 1,110 — 635 2,704 375 Medical Center III - Peoria, AZ AZ 5/15/2015 2,137 673 1,651 — 811 3,135 659 Morrow Medical Center - Morrow, GA GA 6/24/2015 4,334 1,155 5,674 — 270 7,099 909 Belmar Medical Building -Lakewood, CO CO 6/29/2015 3,770 819 4,287 — 289 5,395 703 Addington Place - Northville, MI (7) MI 6/30/2015 13,287 440 14,975 — 303 15,718 2,569 Conroe Medical Arts and Surgery Center - Conroe, TX TX 7/10/2015 13,221 1,965 12,198 — 573 14,736 2,071 Medical Center V - Peoria, AZ AZ 7/10/2015 2,786 1,089 3,200 — 370 4,659 562 Legacy Medical Village - Plano, TX TX 7/10/2015 23,662 3,755 31,097 — 639 35,491 4,788 Scripps Cedar Medical Center - Vista, CA CA 8/6/2015 14,983 1,213 14,596 — 48 15,857 2,052 Nuvista Institute for Healthy Living - Jupiter, FL (11) FL 8/7/2015 — 8,586 54,051 ( 1,511 ) ( 7,939 ) 53,187 1,284 Ramsey Woods Memory Care - Cudahy, WI (5) WI 10/2/2015 — 930 4,990 — 29 5,949 925 East Coast Square West - Cedar Point, NC NC 10/15/2015 5,254 1,535 4,803 — 6 6,344 696 East Coast Square North - Morehead City, NC NC 10/15/2015 3,933 899 4,761 — 6 5,666 679 Eastside Cancer Institute - Greenville, SC (5) SC 10/22/2015 — 1,498 6,637 — 32 8,167 960 Sassafras Medical Building - Erie, PA PA 10/22/2015 2,315 928 4,629 — 3 5,560 611 Sky Lakes Klamath Medical Clinic - Klamath Falls, OR (5) OR 10/22/2015 — 433 2,623 — — 3,056 366 Courtyard Fountains - Gresham, OR (5) OR 12/1/2015 — 2,476 50,601 — 881 53,958 8,037 Presence Healing Arts Pavilion - New Lenox, IL (9) IL 12/4/2015 5,966 — 6,768 — 76 6,844 991 Mainland Medical Arts Pavilion - Texas City, TX TX 12/4/2015 6,174 320 7,923 — 305 8,548 1,266 Renaissance on Peachtree - Atlanta, GA (6) GA 12/15/2015 50,821 4,535 68,895 — 1,751 75,181 10,102 Fox Ridge Senior Living at Bryant - Bryant, AR AR 12/29/2015 7,133 1,687 12,936 — 544 15,167 2,811 Fox Ridge Senior Living at Chenal - Little Rock, AR AR 12/29/2015 16,390 6,896 20,579 — 163 27,638 3,732 Fox Ridge North Little Rock - North Little Rock, AR (9) AR 12/29/2015 10,170 — 19,265 — 261 19,526 3,199 Autumn Leaves of Cy-Fair - Houston, TX TX 12/31/2015 — 1,225 11,335 — 59 12,619 1,880 Autumn Leaves of Meyerland - Houston, TX TX 12/31/2015 — 2,033 13,411 — 21 15,465 2,123 Autumn Leaves of Clear Lake, Houston, TX TX 12/31/2015 — 1,599 13,194 — 18 14,811 2,181 Autumn Leaves of The Woodlands - The Woodlands, TX TX 12/31/2015 — 2,413 9,141 — 20 11,574 1,619 High Desert Medical Group Medical Office Building - Lancaster, CA CA 4/7/2017 7,480 1,459 9,300 — — 10,759 1,141 Northside Hospital - Canton, GA GA 7/13/2017 8,014 3,408 8,191 — 40 11,639 784 West Michigan Surgery Center - Big Rapids, MI (5) MI 8/18/2017 — 258 5,677 — — 5,935 502 F-63 Table of Contents Healthcare Trust, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2020 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances at December 31, 2020 Land Building and Improvements Land Building and Improvements Gross Amount at December 31,2020 (1) (2) Accumulated Depreciation (3) (4) Camellia Walk Assisted Living and Memory Care - Evans, GA (6) GA 9/28/2017 12,563 1,854 17,372 — 822 20,048 2,001 Cedarhurst of Collinsville - Collinsville, IL (5), (8) IL 12/22/2017 — 1,228 8,652 — 113 9,993 819 Arcadian Cove Assisted Living - Richmond, KY (5), (8) KY 12/22/2017 — 481 3,923 — 63 4,467 420 Beaumont Medical Center - Warren, MI (5), (8) MI 12/22/2017 — 1,078 9,525 — 19 10,622 796 DaVita Dialysis - Hudson, FL (5), (8) FL 12/22/2017 — 226 1,979 — — 2,205 160 DaVita Bay Breeze Dialysis Center - Largo, FL (5), (8) FL 12/22/2017 — 399 896 — — 1,295 87 Greenfield Medical Plaza - Gilbert, AZ (5), (8) AZ 12/22/2017 — 1,476 4,144 — 48 5,668 357 RAI Care Center - Clearwater, FL (5), (8) FL 12/22/2017 — 624 3,156 — — 3,780 252 Illinois CancerCare - Galesburg, IL (5), (8) IL 12/22/2017 — 290 2,457 — — 2,747 221 UnityPoint Clinic - Muscatine, IA (5), (8) IA 12/22/2017 — 570 4,541 — 2 5,113 389 Lee Memorial Health System Outpatient Center - Ft. Myers (5), (8) FL 12/22/2017 — 439 4,374 — 363 5,176 369 Decatur Medical Office Building - Decatur, GA (5), (8), (9) GA 12/22/2017 — 695 3,273 — — 3,968 295 Madison Medical Plaza - Joliet, IL (5), (8), (9) IL 12/22/2017 — — 16,855 — 37 16,892 1,267 Woodlake Office Center - Woodbury, MN (8) MN 12/22/2017 8,638 1,017 10,688 — 1,297 13,002 873 Rockwall Medical Plaza - Rockwall, TX (5), (8) MN 12/22/2017 — 1,097 4,582 — 182 5,861 403 MetroHealth Buckeye Health Center - Cleveland, OH (5), (8) OH 12/22/2017 — 389 4,367 — 5 4,761 347 UnityPoint Clinic - Moline, IL (5), (8) IL 12/22/2017 — 396 2,880 — 1 3,277 246 VA Outpatient Clinic - Galesberg, IL (5), (8) IL 12/22/2017 — 359 1,852 — — 2,211 181 Philip Professional Center - Lawrenceville, GA (8) GA 12/22/2017 5,780 1,285 6,714 — 169 8,168 577 Texas Children’s Hospital - Houston, TX (5) TX 3/5/2018 — 1,368 4,428 — 116 5,912 484 Florida Medical Heartcare - Tampa, FL (5) FL 3/29/2018 — 586 1,902 — — 2,488 215 Florida Medical Somerset - Tampa, FL (5) FL 3/29/2018 — 61 1,366 — — 1,427 134 Florida Medical Tampa Palms - Tampa, FL (5) FL 3/29/2018 — 141 1,402 — — 1,543 143 Florida Medical Wesley Chapel - Tampa, FL (5) FL 3/29/2018 — 485 1,987 — — 2,472 228 Aurora Health Center - Milwaukee, WI (5) WI 4/17/2018 — 1,014 4,041 — — 5,055 528 Vascular Surgery Associates - Tallahassee, FL (5) FL 5/11/2018 — 902 5,383 — — 6,285 554 Glendale MOB - Farmington Hills, MI (5) MI 8/28/2018 — 504 12,332 — — 12,836 904 Crittenton Washington MOB - Washington Township, MI (5) MI 9/12/2018 — 640 4,090 — 43 4,773 351 Crittenton Sterling Heights MOB - Sterling Heights, MI (5) MI 9/12/2018 — 1,398 2,695 — 181 4,274 280 Advocate Aurora MOB - Elkhorn, WI (5) WI 9/24/2018 — 181 9,452 — — 9,633 762 Pulmonary & Critical Care Med - Lemoyne, PA PA 11/13/2018 4,271 621 3,805 — — 4,426 442 Dignity Emerus Blue Diamond - Las Vegas, NV NV 11/15/2018 13,966 2,182 16,594 — — 18,776 969 F-64 Table of Contents Healthcare Trust, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2020 (In thousands) Initial Costs Subsequent to Acquisition Property State Acquisition Date Encumbrances at December 31, 2020 Land Building and Improvements Land Building and Improvements Gross Amount at December 31,2020 (1) (2) Accumulated Depreciation (3) (4) Dignity Emerus Craig Rd - North Las Vegas, NV NV 11/15/2018 18,780 3,807 22,803 — — 26,610 1,344 Greenfield MOB - Greenfield, WI WI 1/17/2019 7,526 1,552 8,333 — 225 10,110 757 Milwaukee MOB - South Milwaukee, WI WI 1/17/2019 4,136 410 5,041 — — 5,451 278 St. Francis WI MOB - St. Francis, WI WI 1/17/2019 9,085 865 11,355 — 159 12,379 733 Lancaster Medical Arts MOB - Lancaster, PA (5) PA 6/20/2019 — 85 4,417 — — 4,502 346 Women’s Healthcare Group MOB - York, PA (5) PA 6/21/2019 — 624 2,161 — — 2,785 281 Pioneer Spine Sports - Northampton, MA (5) MA 7/22/2019 — 435 1,858 — — 2,293 75 Pioneer Spine Sport - Springfield, MA (5) MA 7/22/2019 — 333 2,530 — — 2,863 107 Pioneer Spine Sports - West Springfield, MA (5) MA 7/22/2019 — 374 4,295 — — 4,669 176 Felicita Vida - Escondido, CA (5) CA 9/3/2019 — 1,677 28,953 — 17 30,647 1,098 Cedarhurst of Edwardsville - Edwardsville, IL IL 1/10/2020 — 321 9,032 — — 9,353 262 UMPC Sir Thomas Court - Harrisburg, PA (5) PA 1/17/2020 — 745 6,272 — — 7,017 157 UMPC Fisher Road - Mechanicsburg, PA (5) PA 1/17/2020 — 747 3,844 — — 4,591 105 Swedish American MOB - Roscoe, IL (5) IL 1/22/2020 — 599 5,862 — — 6,461 185 Cedarhurst of Sparta - Sparta, IL (5) IL 1/31/2020 — 381 13,807 — 22 14,210 405 UMPC Chambers Hill - Harrisburg, PA (5) PA 2/3/2020 — 498 4,238 — — 4,736 103 Cedarhurst of Shiloh - Shiloh, IL IL 3/13/2020 13,684 376 28,299 — 14 28,689 612 Bayshore Naples Memory Care - Naples, FL (5) FL 3/20/2020 — 3,231 17,112 — — 20,343 356 Circleville MOB - Circleville, OH (5) OH 12/7/2020 — 765 4,011 — — 4,776 9 Total $ 905,536 $ 214,160 $ 2,098,361 $ ( 1,509 ) $ 34,696 $ 2,345,708 $ 328,095 ______________ Note - The above schedule excludes properties that are reflected as part of Assets Held for Sale at December 31, 2020. F-65 Table of Contents Healthcare Trust, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2020 (In thousands) (1) Acquired intangible lease assets allocated to individual properties in the amount of $ 276.0 million are not reflected in the table above. (2) The tax basis of aggregate land, buildings and improvements as of December 31, 2020 is $ 2.3 billion. (3) The accumulated depreciation column excludes $ 184.7 million of accumulated amortization associated with acquired intangible lease assets. (4) Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements and 5 years for fixtures. (5) These unencumbered properties were part of the borrowing base of the Credit Facility, which had $ 323.7 million of outstanding borrowings as of December 31, 2020. The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the real estate assets comprising the borrowing base have been pledged for the benefit of the lenders thereunder (see Note 5 — Credit Facilities, Net for additional details). (6) These properties collateralize the Capital One Facility, which had $ 212.5 million of outstanding borrowings as of December 31, 2020. (7) These properties collateralize the KeyBank Facility, which had $ 142.7 million of outstanding borrowings as of December 31, 2020. (8) These properties were acquired from American Realty Capital Healthcare Trust III, Inc. in 2017. See Note 9 — Related Party Transactions and Arrangements for additional information. (9) Some or all of the land underlying this property is subject to an operating land lease. The related right-of-use assets are separately recorded. See Note 16 — Commitments and Contingencies for additional information. (10) The building amount represents combined direct financing lease for the total asset as the land element was not required to be bifurcated under ASU 840. See Note 16 — Commitments and Contingencies for additional information. (11) The property has been impaired as of December 31, 2020. See Note 3 — Real Estate Investments, Net “Assets Held for Use and Related Impairments” for additional information. F-66 Table of Contents Healthcare Trust, Inc. and Subsidiaries Real Estate and Accumulated Depreciation Schedule III December 31, 2020 (In thousands) A summary of activity for real estate and accumulated depreciation for the years ended December 31, 2020, 2019 and 2018: December 31, (In thousands) 2020 2019 2018 Real estate investments, at cost (1) : Balance at beginning of year $ 2,211,451 $ 2,296,627 $ 2,229,374 Additions-Acquisitions 98,364 80,980 121,244 Disposals, impairments and reclasses (2) 35,893 ( 166,156 ) ( 53,991 ) Balance at end of the year $ 2,345,708 $ 2,211,451 $ 2,296,627 Accumulated depreciation (1) : Balance at beginning of year $ 260,399 $ 226,167 $ 170,271 Depreciation expense 63,393 64,731 62,595 Disposals, impairments and reclasses (2) 4,303 ( 30,499 ) ( 6,699 ) Balance at end of the year $ 328,095 $ 260,399 $ 226,167 __________ (1) Acquired intangible lease assets and related accumulated depreciation are not reflected in the table above. (2) Includes amounts relating to dispositions and impairment charges on assets held for sale for the years ended December 31, 2020, 2019 and 2018. Amounts for the year ended December 31, 2020 include the reclassification of approximately $ 49.4 million and $ 8.7 million of assets and accumulated depreciation, respectively, that were previously classified as held-for-sale as of December 31, 2019 to real estate investments, at cost and accumulated depreciation during the year ended December 31, 2020. For additional information on this reclassification during the year ended December 31, 2020, see Note 3 — Real Estate Investments . See accompanying report of independent registered public accounting firm. F-67