What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-13 compared with 2021-05-14 · 828 added, 489 removed, 1651 unchanged (44% of the section changed)

20 unchanged sentences

Operating lease right-of-use assets 13,815 13,912

Prepaid expenses and other assets (including $ 852 and $ 1,278 due from related parties as of March 31, 2021 and December 31, 2020, respectively)

Prepaid expenses and other assets (including $ 1,519 and $ 1,278 due from related parties as of June 30, 2021 and December 31, 2020, respectively)

28,262 34,932

6 unchanged sentences

Derivative liabilities, at fair value 24,759 38,389

Accounts payable and accrued expenses (including $ 166 and $ 299 due to related parties as of March 31, 2021 and December 31, 2020)

Accounts payable and accrued expenses (including $ 74 and $ 299 due to related parties as of June 30, 2021 and December 31, 2020)

38,867 42,271

4 unchanged sentences

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 March 31, 2021 and December 31, 2020, respectively;

1,610,000 issued and outstanding as of March 31, 2021 and December 31, 2020

Common stock, $ 0.01 par value, 300,000,000 shares authorized, 96,434,078 shares (including 1,393,295 shares paid as a stock dividend on April 15, 2021) and 95,040,783 shares (including 1,265,037 shares paid as a stock dividend on January 15, 2021) issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

7.375 % Series A cumulative redeemable perpetual preferred stock, $ 0.01 par value, 4,740,000 and 2,210,000 authorized as of June 30, 2021 and December 31, 2020, respectively;

3,962,144 issued and outstanding as of June 30, 2021 and 1,610,000 issued and outstanding as of December 31, 2020

Common stock, $ 0.01 par value, 300,000,000 shares authorized, 97,847,312 shares (including 1,413,232 shares paid as a stock dividend on July 15, 2021) and 95,040,783 shares (including 1,265,037 shares paid as a stock dividend on January 15, 2021) issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital 2,201,383 2,104,261

10 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Revenue from tenants $ 81,160 $ 94,664 $ 164,596 $ 194,899

9 unchanged sentences

Operating income (loss) before gain on sale of real estate investments ( 4,572 ) ( 9,944 ) ( 3,538 ) ( 22,771 )

(Loss) gain on sale of real estate investments ( 172 ) 2,306

Gains on sale of real estate investments 2,456 — 2,284 2,306

Operating income (loss) ( 2,116 ) ( 9,944 ) ( 1,254 ) ( 20,465 )

2 unchanged sentences

Interest and other income

Gain on non-designated derivatives 14 16

(Loss) gain on non-designated derivatives ( 13 ) 8 1 24

Total other expenses

13 unchanged sentences

$ ( 0.16 ) $ ( 0.23 ) $ ( 0.29 ) $ ( 0.49 )

(1) Retroactively adjusted for the effects of the Stock Dividend (see Note 1 ).

(1) Retroactively adjusted for the effects of the Stock Dividends (see Note 1 ).

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3 unchanged sentences

(In thousands, except share data)

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Preferred Stock Common Stock Accumulated Other Comprehensive Income

3 unchanged sentences

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

Issuance of Preferred Stock, net

2,352,144 24 — — 56,220 — — 56,244 — 56,244

Share-based compensation, net

8 unchanged sentences

— — — — 138 — — 138 ( 138 ) —

Balance, June 30, 2021 3,962,144 $ 40 96,434,080 $ 964 $ 2,201,383 $ ( 25,621 ) $ ( 1,176,900 ) $ 999,866 $ 4,351 $ 1,004,217

Three Months Ended June 30, 2021

Preferred Stock Common Stock Accumulated Other Comprehensive Income

Par Value Number of

Shares Par Value Additional

Capital Distributions in excess of accumulated earnings Total Stockholders Equity Non-controlling Interests Total Equity

Balance, March 31, 2021 1,610,000 16 95,040,782 $ 950 $ 2,124,510 $ ( 23,827 ) $ ( 1,140,713 ) $ 960,936 $ 4,428 $ 965,364

Three Months Ended March 31, 2020

Issuance of Preferred Stock, net

2,352,144 24 — — 56,220 — — 56,244 — 56,244

Share-based compensation, net

— — — — 330 — — 330 — 330

Distributions declared in common stock, $ 0.21 per share (1)

— — 1,393,298 14 20,188 — ( 20,202 ) — — —

Distributions declared on preferred stock, $ 0.46 per share

— — — — — — ( 1,826 ) ( 1,826 ) — ( 1,826 )

Unrealized gain on designated derivative — — — — — ( 1,792 ) — ( 1,792 ) — ( 1,792 )

— — — — — — ( 14,159 ) ( 14,159 ) 56 ( 14,103 )

Rebalancing of ownership percentage

— — — — 135 ( 2 ) — 133 ( 133 ) —

Balance, June 30, 2021 3,962,144 $ 40 96,434,080 $ 964 $ 2,201,383 $ ( 25,621 ) $ ( 1,176,900 ) $ 999,866 $ 4,351 $ 1,004,217

(1) Retroactively adjusted for the effects of the Stock Dividends (see Note 1 ).

The accompanying notes are an integral part of these unaudited consolidated financial statements.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except share data)

Six Months Ended June 30, 2020

Preferred Stock Common Stock Accumulated Other Comprehensive Income

3 unchanged sentences

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 — — — — ( 366 ) — — ( 366 ) — ( 366 )

Common stock issued through distribution reinvestment plan — — 746,627 8 12,581 — — 12,589 — 12,589

— — 361,053 4 6,318 — — 6,322 — 6,322

Common stock repurchases — — ( 705,101 ) ( 7 ) ( 10,539 ) — — ( 10,546 ) — ( 10,546 )

Share-based compensation, net — — — — 676 — — 676 — 676

Distributions declared on common stock, $ 0.42 per share (1)

— — — — — — ( 39,269 ) ( 39,269 ) — ( 39,269 )

Distributions declared on preferred stock, $ 0.92 per share

— — — — — — ( 1,492 ) ( 1,492 ) — ( 1,492 )

Distributions to non-controlling interest holders — — — — — — — — ( 173 ) ( 173 )

Unrealized loss on designated derivatives — — — — — ( 39,620 ) — ( 39,620 ) — ( 39,620 )

Net loss — — — — — — ( 46,063 ) ( 46,063 ) ( 174 ) ( 46,237 )

Rebalancing of ownership percentage — — — — 94 174 — 268 ( 268 ) —

Balance, June 30, 2020 1,610,000 $ 16 92,398,190 $ 924 $ 2,081,074 $ ( 46,489 ) $ ( 1,058,014 ) $ 977,511 $ 4,795 $ 982,306

Three Months Ended June 30, 2020

Preferred Stock Common Stock Accumulated Other Comprehensive Income

Shares Par Value Number of

Shares Par Value Additional

Capital Distributions in Excess of Accumulated Earnings Total Stockholders Equity Non-controlling Interests Total Equity

Balance, March 31, 2020 1,610,000 $ 16 92,012,616 $ 920 $ 2,074,745 $ ( 44,308 ) $ ( 1,015,438 ) $ 1,015,935 $ 5,237 $ 1,021,172

Issuance of Preferred Stock, net — — — — ( 366 ) — — ( 366 ) — ( 366 )

Common stock issued through distribution reinvestment plan

— — 385,574 4 6,263 — — 6,267 — 6,267

Share-based compensation, net

— — — — 338 — — 338 — 338

Distributions declared in cash on common stock, $ 0.21 per share (1)

Distributions declared on common stock, $ 0.21 per share (1)

— — — — — — ( 19,765 ) ( 19,765 ) — ( 19,765 )

5 unchanged sentences

Net loss — — — — — — ( 22,061 ) ( 22,061 ) ( 87 ) ( 22,148 )

Balance, March 31, 2020 1,610,000 $ 16 92,012,616 $ 920 $ 2,074,745 $ ( 44,308 ) $ ( 1,015,438 ) $ 1,015,935 $ 5,237 $ 1,021,172

(1) Retroactively adjusted for the effects of the Stock Dividend (see Note 1 ).

Rebalancing of ownership percentage — — — — 94 174 — 268 ( 268 ) —

Balance, June 30, 2020 1,610,000 $ 16 92,398,190 $ 924 $ 2,081,074 $ ( 46,489 ) $ ( 1,058,014 ) $ 977,511 $ 4,795 $ 982,306

(1) Retroactively adjusted for the effects of the Stock Dividends (see Note 1 ).

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

6 unchanged sentences

Amortization (accretion) amortization of market lease and other intangibles, net

( 39 ) ( 120 )

Bad debt expense 233 1,384

14 unchanged sentences

Proceeds from sales of real estate investments 94,461 8,294

Net cash used in investing activities ( 10,869 ) ( 93,788 )

Net cash (used in) provided by investing activities 43,057 ( 97,454 )

Cash flows from financing activities:

Payments on credit facilities ( 173,674 ) —

Proceeds from credit facilities 40,000 95,000

2 unchanged sentences

Payments of deferred financing costs ( 50 ) ( 1,160 )

Proceeds from sale of preferred stock, net 56,244 —

Preferred stock issuance costs ( 176 ) ( 366 )

11 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash, cash equivalents, end of period $ 46,726 $ 83,525

12 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Note 1 — Organization

3 unchanged sentences

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 March 31, 2021, the Company owned 190 properties located in 31 states and comprised of 9.3 million rentable square feet.

As of June 30, 2021, the Company owned 195 properties located in 33 states and comprised of 9.1 million rentable square feet.

Substantially all of the Company’s business is conducted through the OP and its wholly owned subsidiaries.

3 unchanged sentences

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.

As of March 31, 2021, the Company owned 55 seniors housing properties under the REIT Investment Diversification and Empowerment Act (“RIDEA”) structure in its SHOP segment.

As of June 30, 2021, the Company owned 54 seniors housing properties under the REIT Investment Diversification and Empowerment Act (“RIDEA”) structure in its SHOP segment.

Under RIDEA, a REIT may lease qualified healthcare properties on an arm’s length basis to a taxable REIT subsidiary (“TRS”) if the property is operated on behalf of such subsidiary by a person who qualifies as an eligible independent contractor.

The Company declared and paid quarterly dividends entirely in shares of its common stock (the “Stock Dividends”).

Since October 2020, the Company declared and paid quarterly dividends solely in shares of its common stock during the periods described in more detail below (the “Stock Dividends”).

Stock Dividends paid in October 2020 and January 2021 were equal to 0.01349 shares of common stock on each share of outstanding common stock.

The Stock Dividend paid in April 2021 was equal to 0.014655 shares of common stock on each share of outstanding common stock.

The Stock Dividends paid in April 2021 and July 2021 were equal to 0.014655 shares of common stock on each share of outstanding common stock.

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 all three Stock Dividends on was an increase of 1,392,822 shares.

No additional shares, except for the Stock Dividends, were issued during the three months ended March 31, 2021.

The aggregate impact of all four Stock Dividends was an increase of 5,319,763 shares.

No additional shares were issued during the three and six months ended June 30, 2021.

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 0.05749 shares for every share outstanding due to the Stock Dividends, and are noted as such throughout the accompanying financial statements and notes.

1 unchanged sentence

The Company’s previous Estimated Per-Share NAV was as of December 31, 2019.

The Estimated Per-Share NAV published on April 1, 2021 reflects the October 2020 Stock Dividend the Company paid and took into consideration the January 2021 Stock Dividend the Company paid but has not been adjusted to reflect the April 2021 Stock Dividends the Company paid and will not be adjusted for any Stock Dividends the Company pays in the future until the board of directors (the “Board”) determines a new Estimated Per-Share NAV.

The Estimated Per-Share NAV published on April 1, 2021 reflects the October 2020 Stock Dividend the Company paid and took into consideration the January 2021 Stock Dividend the Company paid but has not been adjusted to reflect the April 2021 and July 2021 Stock Dividends the Company paid and will not be adjusted for any Stock Dividends the Company pays in the future until the board of directors (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;

5 unchanged sentences

The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results for the entire year or any subsequent interim period.

The results of operations for the three months ended June 30, 2021 are not necessarily indicative of the results for the entire year or any subsequent interim period.

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2020, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2021.

Except for those required by new accounting pronouncements discussed below, there have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2021.

Principles of Consolidation and Basis of Presentation

12 unchanged sentences

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 March 31, 2021, 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 March 31, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19.

The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2021, 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 June 30, 2021 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 materially limited or closed communities to new resident move-ins which affects the Company’s ability to fill vacancies.

In the Company’s SHOP portfolio, occupancy has trended lower since the second half of March and the declines have only recently begun to level off.

Government policies and implementation of infection control best practices materially limited or closed communities to new resident move-ins which has affected the Company’s ability to fill vacancies.

The Company has also experienced lower inquiry volumes and reduced in-person tours during the pandemic.

1 unchanged sentence

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 have continued through the end of the first quarter of 2021 and into the second quarter of 2021 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.

These trends accelerated during the second, third, and fourth quarters of 2020, and continued into the beginning of 2021 as the surge of new COVID-19 cases that started in late 2020 crested before leveling off during the second quarter of 2021.

There can be no assurance, however, that future developments in the course of the pandemic will not cause further adverse impacts to the Company’s occupancy and cost levels, and these trends may continue to impact the Company and have a material adverse effect on the Company’s revenues and income in the other quarters.

The financial stability and overall health of the Company’s tenants is critical to its business.

1 unchanged sentence

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 and the first quarter of 2021 although collections have been approximately 100 % of original cash rent.

The Company experienced delays in rent collections in the second, third and fourth quarters of 2020 and the six months ended June 30, 2021, although collections have been approximately 100 % of original cash rent for the MOB and NNN segments.

The Company has taken a proactive approach 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

During the six months ended June 30, 2021, the Company did not enter into any rent

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

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).

June 30, 2021

deferral agreements with any of its tenants, and all amounts previously deferred under prior rent deferral agreements have been collected.

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.

6 unchanged sentences

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.

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, 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 March 31, 2021, these leases had a weighted average remaining lease term of 5.2 years.

As of June 30, 2021, these leases had a weighted average remaining lease term of 4.9 years.

Rent from tenants in the Company’s MOB and triple-net leased healthcare facilities operating segments is recorded in accordance with the terms of each lease on a straight-line basis over the initial term of the lease.

10 unchanged sentences

The terms of the rent are short term in nature, primarily month-to-month.

Also included in revenue from tenants is fees for ancillary revenue from non-residents of $ 1.8 million and $ 3.8 million, for the three months ended March 31, 2021 and 2020, respectively.

Also included in revenue from tenants is fees for ancillary revenue from non-residents of $ 2.6 million and $ 6.3 million, for the six months ended June 30, 2021 and 2020, respectively.

Included in these amounts during the six months ended June 30, 2021 and 2020 are $ 1.6 million and $ 5.7 million, respectively, which derived from fees for ancillary services from the Company’s properties in Lutz, Florida, and Wellington, Florida that were sold in December 2020 and May 2021, respectively.

Fees for ancillary services are recorded in the period in which the services are performed.

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties.

2 unchanged sentences

These amounts also exclude SHOP leases which are short term in nature.

As of March 31, 2021:

As of June 30, 2021:

(In thousands) Future

9 unchanged sentences

Cost recoveries from tenants are included in operating revenue from tenants 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.

During the three months ended March 31, 2021 the Company recorded a reduction of revenue of $ 0.2 million for uncollectible amounts.

During the three months ended March 31, 2020, the Company recorded a reduction of revenue of $ 0.8 million for uncollectible amounts.

The Company did no t record a material reduction of revenue for uncollectable amounts of bad debt for the three months ended June 30, 2021.

During the six months ended June 30, 2021 the Company recorded a reduction of revenue of $ 0.2 million for uncollectable amounts.

During the three and six months ended June 30, 2020, the Company recorded a reduction of revenue of $ 0.6 million and $ 1.4 million for uncollectible amounts, respectively.

Investments in Real Estate

7 unchanged sentences

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 quarters ended March 31, 2021 and 2020.

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

No properties were presented as discontinued operations during the quarters ended June 30, 2021 and 2020.

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits.

June 30, 2021

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 no real estate investments held for sale as of March 31, 2021.

There were no real estate investments held for sale as of June 30, 2021.

There were $ 0.1 million real estate investments held for sale as of December 31, 2020.

4 unchanged sentences

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 months ended March 31, 2021 and the three-year period ended December 31, 2020, the Company has no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules.

For the six months ended June 30, 2021 and the three-year period ended December 31, 2020, 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 will continue to be classified as operating leases under transition elections unless subsequently modified.

These leases are reflected on the balance sheet as of March 31, 2021 and December 31, 2020, and the rent expense is reflected on a straight-line basis over the lease term in the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021 and 2020.

These leases are reflected on the balance sheet as of June 30, 2021 and December 31, 2020, and the rent expense is reflected on a straight-line basis over the lease term in the consolidated statements of operations and comprehensive loss for the six months ended June 30, 2021 and 2020.

The Company generally determines the value of construction in progress based upon the replacement cost.

8 unchanged sentences

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 three months ended March 31, 2021 and 2020 were asset acquisitions.

All acquisitions during the six months ended June 30, 2021 and 2020 were 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.

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months.

3 unchanged sentences

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 quarters ended March 31, 2021 or 2020.

The Company did not record any intangible asset amounts related to customer relationships during the six months ended June 30, 2021 or 2020.

Impairment of Long-Lived Assets

26 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

REIT, it may be subject to certain state and local taxes on its income and property, and U.S.

4 unchanged sentences

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.

As of March 31, 2021, the Company, owned 55 seniors housing properties which are leased and operated through its TRS.

As of June 30, 2021, the Company, owned 54 seniors housing properties which are leased and operated through its TRS.

The TRS is a wholly-owned subsidiary of the OP.

6 unchanged sentences

Because of the 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 $ 4.3 million as of March 31, 2021.

thus the Company has provided a 100% valuation allowance of $ 3.6 million as of June 30, 2021.

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).

15 unchanged sentences

Funds provided under the program were to be used for the preparation, prevention, and medical response to COVID-19, and were designated to reimburse providers for healthcare related expenses and lost revenues attributable to COVID-19.

During the three months ended March 31, 2021, the Company received an additional $ 5.1 million in funding from CARES Act grants.

Previously, the Company received $ 3.6 million in grants during the year ended December 31, 2020.

The CARES Act grants are considered 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 to offset the

The Company did no t receive any funding from the CARES Act during the three months ended June 30, 2021.

During the six months ended June 30, 2021, the Company received $ 5.1 million in funding from CARES Act grants.

Previously, the Company received $ 3.6 million in grants during the year ended December 31, 2020, $ 3.1 million of which was received in the three and six months ended June 30, 2020.

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

negative impacts of COVID-19.

June 30, 2021

The CARES Act grants are considered 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 to offset the negative impacts of COVID-19.

There can be no assurance that the program will be extended or if any additional amounts will be received.

15 unchanged sentences

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 March 31, 2021

Not yet Adopted as of June 30, 2021

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).

14 unchanged sentences

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 190 properties as of March 31, 2021.

During the three months ended March 31, 2021, the Company, through wholly owned subsidiaries of the OP, completed the acquisition of one multi-tenant MOB for an aggregate contract purchase price of $ 6.6 million.

All acquisitions in the three months ended March 31, 2021 and 2020 were considered asset acquisitions for accounting purposes.

The following table presents the allocation of real estate assets acquired and liabilities assumed, as well as capitalized construction in progress, during the three months ended March 31, 2021 and 2020:

The Company owned 195 properties as of June 30, 2021.

During the six months ended June 30, 2021, the Company, through wholly owned subsidiaries of the OP, completed the acquisition of three multi-tenant MOBs and five single-tenant MOBs for an aggregate contract purchase price of $ 43.5 million.

All acquisitions in the six months ended June 30, 2021 and 2020 were considered asset acquisitions for accounting purposes.

The following table presents the allocation of real estate assets acquired and liabilities assumed during the six months ended June 30, 2021 and 2020:

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Three Months Ended March 31,

June 30, 2021

Six Months Ended June 30,

(In thousands) 2021 2020

13 unchanged sentences

Number of properties purchased 8 8

(1) Weighted-average remaining amortization periods for in-place leases, above-market leases and below-market leases acquired during the three months ended March 31, 2021 were 3.0 years, 2.6 years and 4.0 years, respectively, as of each property’s acquisition date.

(1) Weighted-average remaining amortization periods for in-place leases, above-market leases and below-market leases acquired during the six months ended June 30, 2021 were 5.1 years, 5.4 years and 4.3 years, respectively, as of each property’s acquisition date.

Significant Tenants

As of March 31, 2021 and 2020, 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 for the portfolio on a straight-line basis.

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 March 31, 2021 and 2020:

As of June 30, 2021 and 2020, 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 for the portfolio on a straight-line basis.

State 2021 2020

3 unchanged sentences

* 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 date specified.

(1) 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.

The property in Jupiter, Florida and the property in Wellington, Florida are expected to be sold in the second quarter of 2021, however, there can be no assurance that these dispositions will be completed on their contemplated terms, or at all.

(1) In May 2021, the Company’s skilled nursing facility in Wellington, Florida, and the Company’s development property in Jupiter, Florida were sold.

In December 2020, the Company’s skilled nursing facility in Lutz, Florida was sold.

(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 the remaining four of which were transferred to the buyer during the first quarter of 2021.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Intangible Assets and Liabilities

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 and accretion of above-and below-market ground leases, for the periods presented:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2021 2020 2021 2020

4 unchanged sentences

Amortization of above-and below-market ground leases, net (3)

$ 53 $ 40 $ 108 $ 79

(1) Reflected within depreciation and amortization expense.

10 unchanged sentences

$ 166 $ 563 $ 804 $ 727 $ 650

On November 2, 2020 the initial closing under the PSA pursuant to which the Company had agreed to sell 11 SHOP assets located in Michigan (the “Michigan SHOPs”) occurred.

The contract purchase price for the 11 Michigan SHOPs was $ 11.8 million.

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 at a second closing in the first quarter of 2021 when the $ 0.8 million held in escrow was released to the buyer.

As a result, the Company recorded a loss on sale of $ 0.2 million during the three months ended March 31, 2021.

During the three months ended March 31, 2020 the Company sold one MOB property which resulted in a gain on sale of $ 2.3 million.

During the three months ended June 30, 2021, the Company sold its skilled nursing facility in Wellington, Florida and its development property in Jupiter, Florida, which resulted in gains on sale of $ 0.1 million and $ 2.4 million, respectively.

These gains are included in the consolidated statement of operations for the three and six months ended June 30, 2021.

During the first quarter of 2021, the Company transferred four properties from the sale of 11 SHOPs in Michigan to the buyer at a second closing, and $ 0.8 million held in escrow was released to the buyer.

This amount had been placed in escrow at the first closing of the transaction during the year ended December 31, 2020 when the purchase price for all 11 properties subject to the transaction was actually received from the buyer.

The Company recorded a loss on sale of $ 0.2 million related to this transaction in the six months ended June 30, 2021.

During the first quarter of 2020 the Comp any sold one MOB p roperty which resulted i n a gain on sale of $ 2.3 million.

This property sold for a contract price of $ 8.6 million.

This gain is included on the Consolidated Statement of Operations for the three months ended March 31, 2020.

The following table presents impairments recorded during the three months ended March 31, 2021 and 2020.

Three Months Ended March 31,

This gain is included on the Consolidated Statement of Operations for the six months ended June 30, 2020 .

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

The following table presents impairments recorded during the three months ended June 30, 2021 and 2020.

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2021 2020 2021 2020

2 unchanged sentences

Total $ 6,081 $ 13,793 $ 6,959 $ 31,831

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

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.

5 unchanged sentences

The following table details the major classes of assets associated with the properties that are classified as held for sale as of December 31, 2020:

There were no assets classified as held for sale as of March 31, 2021.

(In thousands) December 31, 2020

1 unchanged sentence

Assets held for sale $ 90

There were no assets held for sale as of June 30, 2021.

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 the remaining four of which were transferred to the buyer in the first quarter of 2021.

These four properties were included in assets held for sale as of December 31, 2020.

Held for Sale Impairments - 2020

The impairment related to assets held for sale in the three months ended March 31, 2020 related to an amendment to the purchase and sale agreement for the Company’s properties in Michigan which changed the properties being sold and the sales price.

The impairment related to assets held for sale in the six months ended June 30, 2020 related to an amendment to the purchase and sale agreement for the Company’s properties in Michigan which changed the properties being sold and the sales price.

Assets Held for Use and Related Impairments

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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.

If the undiscounted

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

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.

2 unchanged sentences

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

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Wellington, Florida.

The Company began marketing the properties in 2020, and in August 2020, the Company entered into definitive purchase and sale agreements (“PSAs”) to sell 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.

1 unchanged sentence

On April 30, 2021, the Company amended the PSA which reduced the sales price of the skilled nursing facility in Wellington, Florida to $ 30.7 million.

In connection with this amendment to the PSA, the Company determined that the fair value had declined as of March 31, 2021 and the Company recognized an impairment charge of $ 0.9 million during the first quarter of 2021, which is included on the consolidated statement of operations and comprehensive loss.

On May 14, 2021, the Company completed the sale of the completed development project in Jupiter, Florida and the skilled nursing facility in Wellington, Florida.

In connection with these sales, the Company recognized a gain on these sales of $ 2.4 million and $ 0.1 million , respectively, in the three months ended June 30, 2021 .

During the three months ended June 30, 2021, the Company actively considered plans to sell a NNN property located in Sun City, Arizona.

As a result of changes to the Company’s expected holding period, the Company determined that projected cash flows did not recover the carrying value of the properties on an undiscounted basis over its intended holding period.

During July 2021, the Company entered into a non-binding letter of intent to sell the property and as a result, the Company determined that the fair market value of the property had declined and recorded an impairment charge of $ 6.1 million during the three months ended June 30, 2021, which is included on the consolidated statement of operations and comprehensive loss.

The LaSalle Properties

1 unchanged sentence

During 2019, The LaSalle Group Inc., a guarantor of certain of the lease obligations of prior tenants (collectively, the “LaSalle Tenant”), filed for voluntarily relief under chapter 11 of the United States Bankruptcy Code.

The Company has filed proofs of claims related to amounts previously awarded to it from the bankruptcy proceeding, however, the Company has no amounts due from the LaSalle Tenant in its consolidated balance sheets as of March 31, 2021 and December 2020 as the Company does not believe recovery is likely against the LaSalle Tenant.

The Company has filed proofs of claims related to amounts previously awarded to it from the bankruptcy proceeding, however, the Company has no amounts due from the LaSalle Tenant in its consolidated balance sheets as of June 30, 2021 and December 2020 as the Company does not believe recovery is likely against the LaSalle Tenant.

Subsequent to June 30, 2021, the Company began evaluating selling the LaSalle Properties.

While the Company has begun marketing the properties for a potential sale, there can be no assurance these properties will be sold on favorable terms, or at all.

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Note 4 — Mortgage Notes Payable, Net

The following table reflects the Company’s mortgage notes payable as of March 31, 2021 and December 31, 2020:

The following table reflects the Company’s mortgage notes payable as of June 30, 2021 and December 31, 2020:

Outstanding Loan Amount as of Effective Interest Rate as of

Portfolio Encumbered Properties (1)

2021 December 31, 2020 March 31,

2021 December 31, 2020 June 30,

2021 December 31, 2020 Interest Rate Maturity

17 unchanged sentences

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 March 31, 2021 and December 31, 2020.

(2) Calculated on a weighted average basis for all mortgages outstanding as of June 30, 2021 and December 31, 2020.

For the LIBOR based loans, LIBOR in effect at the balance sheet date was utilized.

1 unchanged sentence

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.

(3) Variable rate loan, based on 30-day LIBOR, which is economically fixed as a result of entering into “pay-fixed” interest rate swap agreements (the Company designates its “pay-fixed” interest rate swaps against all 30-day LIBOR debt, see Note 7 — Derivatives and Hedging Activities for additional details).

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).

3 unchanged sentences

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 March 31, 2021, the Company had pledged $ 0.9 billion in total real estate investments, at cost, as collateral for its $ 0.6 billion of gross mortgage notes payable.

As of June 30, 2021, the Company had pledged $ 0.9 billion in total real estate investments, at cost, as collateral for its $ 0.5 billion 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.

1 unchanged sentence

Some of the Company’s mortgage note agreements require compliance with certain property-level financial covenants, including debt service coverage ratios.

As of March 31, 2021, the Company was in compliance with these financial covenants.

As of June 30, 2021, the Company was in compliance with these financial covenants.

See Note 5 — Credit Facilities - 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.

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Note 5 — Credit Facilities

The Company had the following credit facilities outstanding as of March 31, 2021 and December 31, 2020:

The Company had the following credit facilities outstanding as of June 30, 2021 and December 31, 2020:

Outstanding Facility

1 unchanged sentence

Credit Facility Encumbered Properties (1)

2021 December 31, 2020 March 31,

2021 December 31, 2020 June 30,

2021 December 31, 2020 Interest Rate Maturity

17 unchanged sentences

_______________

(1) Encumbered properties are as of March 31, 2021.

(1) Encumbered properties are as of June 30, 2021.

(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 March 31, 2021 with a carrying value of $ 347 million.

(4) Secured by first-priority mortgages on ten of the Company’s seniors housing properties located in Michigan, Missouri, Kansas, California, Florida, Georgia and Iowa as of March 31, 2021 with a carrying value of $ 253 million.

(5) Calculated on a weighted average basis for all credit facilities outstanding as of March 31, 2021 and December 31, 2020.

(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).

(3) Secured by first-priority mortgages on 11 of the Company’s seniors housing properties located in Florida, Georgia, Iowa and Michigan as of June 30, 2021 with a carrying value of $ 345 million.

(4) Secured by first-priority mortgages on ten of the Company’s seniors housing properties located in Michigan, Missouri, Kansas, California, Florida, Georgia and Iowa as of June 30, 2021 with a carrying value of $ 254 million.

(5) Calculated on a weighted average basis for all credit facilities outstanding as of June 30, 2021 and December 31, 2020.

(6) Variable rate loan, based on LIBOR, all of which was economically fixed as a result of entering into “pay-fixed” interest rate swap agreements (the Company designates its “pay-fixed” interest rate swaps against all 30-day LIBOR debt, 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.

(8) Variable rate loan, based on LIBOR, with $ 40 million and $ 50 million of principal amount economically fixed as of June 30, 2021 and December 31, 2020, respectively, as a result of entering into “pay-fixed” interest rate swap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details).

(9) The company has the option to extend maturity one year to March 2024 subject to certain conditions.

2 unchanged sentences

Interest rate caps are not considered unless the cap is currently in effect.

As of March 31, 2021, the carrying value of our real estate investments, at cost was $ 2.6 billion, with $ 0.9 billion of this asset value pledged as collateral for mortgage notes payable, $ 0.6 billion of this asset value pledged to secure advances under the Fannie Mae Master Credit Facilities and $ 0.9 billion of this asset value comprising the borrowing base of the Credit Facility.

As of June 30, 2021, the carrying value of our real estate investments, at cost was $ 2.6 billion, with $ 0.9 billion of this asset value pledged as collateral for mortgage notes payable, $ 0.6 billion of this asset value pledged to secure advances under the Fannie Mae Master Credit Facilities and $ 0.9 billion of this asset value 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

Unencumbered real estate investments, at cost as of March 31, 2021 was $ 0.2 billion, 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 the Company’s Credit Facility.

Unencumbered real estate investments, at cost as of June 30, 2021 was $ 0.2 billion, 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 the Company’s 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

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

“Term Loan”).

June 30, 2021

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.

5 unchanged sentences

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 March 31, 2021, $ 150.0 million was outstanding under the Term Loan, and $ 173.7 million was outstanding under the Revolving Credit Facility.

As of June 30, 2021, $ 150.0 million was outstanding under the Term Loan, and $ 40.0 million was outstanding under the Revolving Credit Facility.

The unused borrowing availability under the Revolving Credit Facility was $ 202.0 million.

1 unchanged sentence

Pursuant to the terms of the Company’s amended Credit Facility 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.

The Company did not, however, satisfy the conditions to make the quarter ending June 30, 2021 the Commencement Quarter.

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 fiscal quarter ended June 30, 2021 was the first quarter that could be the Commencement Quarter.

The Company satisfied the conditions to elect to make the quarter ending September 30, 2021 the Commencement Quarter but did not, however, make the election to do so.

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 repay 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.

14 unchanged sentences

Pursuant to the terms of the Company’s Credit Facility, the “floor” on LIBOR was increased from 0.00 % to 0.25 %.

As of March 31, 2021, 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

As of June 30, 2021, the Revolving Credit Facility and the Term Loan had an effective interest rate per annum equal to 3.58 % and 5.01 %, respectively.

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

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.

June 30, 2021

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.

6 unchanged sentences

The minimum consolidated tangible net worth is the sum of (i) $ 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 March 31, 2021, the Company was in compliance with the financial covenants under the Credit Facility.

As of June 30, 2021, 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 continue to comply with these covenants.

6 unchanged sentences

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 Capital One upon the release of the property.

In November 2020, in conjunction with the sale and transfer of four SHOPs in Michigan, one of which was encumbered under the Fannie Mae Master Credit Facility with Capital One, $ 4.2 million was repaid to Capital One upon the release of the property.

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.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Future Principal Payments

The following table summarizes the scheduled aggregate principal payments for the five years subsequent to March 31, 2021 and thereafter, on all of the Company’s outstanding debt (mortgage notes payable and credit facilities):

The following table summarizes the scheduled aggregate principal payments for the five years subsequent to June 30, 2021 and thereafter, on all of the Company’s outstanding debt (mortgage notes payable and credit facilities):

Future Principal

28 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

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.

8 unchanged sentences

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 March 31, 2021, 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.

However, as of June 30, 2021, 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.

2 unchanged sentences

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 March 31, 2021 and December 31, 2020, aggregated by the level in the fair value hierarchy within which those instruments fall.

The following table presents information about the Company’s assets and liabilities measured at fair value as of June 30, 2021 and December 31, 2020, aggregated by the level in the fair value hierarchy within which those instruments fall.

(In thousands) Quoted Prices in Active Markets

3 unchanged sentences

Level 3 Total

March 31, 2021

June 30, 2021

Derivative assets, at fair value $ — $ 99 $ — $ 99

7 unchanged sentences

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 three months ended March 31, 2021.

There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the six months ended June 30, 2021.

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Real Estate Investments Measured at Fair Value on a Non-Recurring Basis

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 March 31, 2021.

As of March 31, 2021, the Company owned one held for use property in Wellington, Florida for which the Company had reconsidered the projected sales proceeds due to the April 30, 2021 amendment to the PSA.

As a result, the Company evaluated the impact on its ability to recover the carrying value of the property based on the new sales terms of the PSA.

The Company used a sales approach to estimate the future cash flows expected to be generated from the sale.

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 June 30, 2021.

As of June 30, 2021, the Company owned one held for use property in Sun City, Arizona, for which the Company had reconsidered its expected holding period.

As a result, the Company evaluated the impact on its ability to recover the carrying value of the property.

The Company used a sales approach to estimate the future cash flows expected to be generated from the sale based on a non-binding letter of intent executed in July 2021.

Impaired real estate investments held for use are generally classified in Level 3 of the fair value hierarchy.

1 unchanged sentence

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 March 31, 2021 and December 31, 2020.

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 June 30, 2021 and December 31, 2020.

Impaired real estate investments held for sale are generally classified in Level 3 of the fair value hierarchy.

3 unchanged sentences

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:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In thousands) Level Carrying Amount Fair Value Carrying Amount Fair Value

6 unchanged sentences

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 March 31, 2021 and December 31, 2020, the carrying values of the Credit Facility and Fannie Mae Master Credit Facilities did not approximate their fair values due to the widening of credit spreads during the periods.

At June 30, 2021 and December 31, 2020, the carrying values of the Credit Facility and Fannie Mae Master Credit Facilities did not approximate their fair values due to the widening of credit spreads during the periods.

Note 7 — Derivatives and Hedging Activities

7 unchanged sentences

The Company does not anticipate that any of its counterparties will fail to meet their obligations.

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 March 31, 2021 and 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 June 30, 2021 and December 31, 2020:

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(In thousands) Balance Sheet Location March 31,

June 30, 2021

(In thousands) Balance Sheet Location June 30,

2021 December 31, 2020

11 unchanged sentences

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, $ 0.2 million was recorded as an increase to interest expense for the three months ended March 31, 2021 and approximately $ 1.1 million remained in AOCI as of March 31, 2021.

Of the amount recorded in AOCI following these terminations, $ 0.2 million and $ 0.4 million was recorded as an increase to interest expense for the three and six months ended June 30, 2021 and approximately $ 0.9 million remained in AOCI as of June 30, 2021.

Amounts reported in accumulated other comprehensive loss 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 April 1, 2021 through March 31, 2022, the Company estimates that $ 10.7 million will be reclassified from other comprehensive loss as an increase to interest expense.

As of March 31, 2021 and December 31, 2020, the Company had the following derivatives that were designated as cash flow hedges of interest rate risk:

March 31, 2021 December 31, 2020

During the next 12 months, from July 1, 2021 through June 30, 2022, the Company estimates that $ 10.8 million will be reclassified from other comprehensive loss as an increase to interest expense.

As of June 30, 2021 and December 31, 2020, the Company had the following derivatives that were designated as cash flow hedges of interest rate risk:

June 30, 2021 December 31, 2020

Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

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 presented:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2021 2020 2021 2020

6 unchanged sentences

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 loss and were a gain of $ 14,000 for the three months ended March 31, 2021 and a gain of $ 16,000 for the three months ended March 31, 2020.

The Company paid $ 85,000 to enter into an interest rate cap contract during the three months ended March 31, 2021 with an effective date of April 1, 2021 and notional value of $ 60.0 million to replace an expiring interest rate cap contract with a similar notional value.

The Company had the following outstanding interest rate derivatives that were not designated as hedges in qualified hedging relationships as of March 31, 2021 and December 31, 2020:

March 31, 2021 December 31, 2020

Changes in the fair value of derivatives not designated as hedges under a qualifying hedging relationship are recorded directly to net loss and were a loss of $ 13,000 for the three months ended June 30, 2021 and a gain of $ 8,000 for the three months ended June 30, 2020.

The Company paid $ 85,000 to enter into an interest rate cap contract during the six months ended June 30, 2021 with an effective date of April 1, 2021 and notional value of $ 60.0 million to replace an expiring interest rate cap contract with a similar notional value.

The Company had the following outstanding interest rate derivatives that were not designated as hedges in qualified hedging relationships as of June 30, 2021 and December 31, 2020:

June 30, 2021 December 31, 2020

Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount

2 unchanged sentences

Offsetting Derivatives

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2021 and December 31, 2020.

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of June 30, 2021 and December 31, 2020.

The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.

2 unchanged sentences

(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

March 31, 2021 $ 111 $ — $ — $ 111 $ — $ — $ 111

March 31, 2021 $ — $ ( 22,754 ) $ — $ ( 22,754 ) $ — $ — $ ( 22,754 )

June 30, 2021 $ 99 $ — $ — $ 99 $ — $ — $ 99

June 30, 2021 $ — $ ( 24,759 ) $ — $ ( 24,759 ) $ — $ — $ ( 24,759 )

December 31, 2020 $ 13 $ — $ — $ 13 $ — $ — $ 13

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

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 March 31, 2021, 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 $ 22.8 million.

As of March 31, 2021, the Company is not required to post any collateral related to these agreements and was not in breach of any agreement provisions.

If the 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 $ 22.8 million at March 31, 2021.

As of June 30, 2021, 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 $ 22.8 million.

As of June 30, 2021, the Company is not required to post any collateral related to these agreements and was not in breach of any agreement provisions.

Note 8 — Stockholders’ Equity

As of March 31, 2021 and December 31, 2020, the Company had 95,040,782 and 93,775,746 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.

As of June 30, 2021 and December 31, 2020, the Company had 96,434,080 and 93,775,746 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 1, 2021, the Company published a new estimate of per-share net asset value (“Estimated Per-Share NAV”) as of December 31, 2020, which was approved by the Board on March 31, 2021.

13 unchanged sentences

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.

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 Commencement Quarter, 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.

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

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, under the SRP and does not include any repurchases under tender offers (see above), cumulatively through March 31, 2021.

Number of Shares Repurchased Average Price per Share

Cumulative repurchases as of December 31, 2020 4,896,620 $ 20.60

Three month ended March 31, 2021 — —

Cumulative repurchases as of March 31, 2021 4,896,620 20.60

Six months ended June 30, 2021 — —

Cumulative repurchases as of June 30, 2021 4,896,620 20.60

Distribution Reinvestment Plan

5 unchanged sentences

Shares issued under the DRIP are recorded as equity in the accompanying consolidated balance sheet in the period distributions are declared.

During the three months ended March 31, 2021, the Company did no t issue any shares of common stock pursuant to the DRIP and during the three months ended March 31, 2020, the Company issued 0.4 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $ 6.3 million.

During the six months ended June 30, 2021, the Company did no t issue any shares of common stock pursuant to the DRIP and during the six months ended June 30, 2020, the Company issued 0.7 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $ 12.6 million.

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.

5 unchanged sentences

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.

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) and in May 2021, the the Board authorized the classification of 2,530,000 additional shares of the Company’s preferred stock as Series A Preferred Stock in connection with an offering in May 2021 (see below and Note 17 — Subsequent Events) .

The Company had 1,610,000 shares of Series A Preferred Stock issued and outstanding as of March 31, 2021 and 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) and in May 2021, the Board authorized the classification of 2,530,000 additional shares of the Company’s preferred stock as Series A Preferred Stock in connection with the offering in May 2021 (described below).

The Company had 3,962,144 and 1,610,000 shares of Series A Preferred Stock issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.

On September 15, 2020, the Company entered into a preferred stock purchase agreement and registration rights agreement with B.

5 unchanged sentences

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 three months ended March 31, 2021 or the year ended December 31, 2020.

On May 11, 2021, the Company completed an underwritten public offering of its Series A Preferred Stock (see Note 17 — Subsequent Events ).

The Company did no t sell any shares under the Preferred Stock Equity Line during the six months ended June 30, 2021 or the year ended December 31, 2020.

On May 11, 2021, the Company completed an underwritten public offering of 2,352,144 shares (which includes 152,144 shares issued and sold pursuant to the underwriters’ exercise of their option to purchase additional shares) of its Series A Preferred Stock for net proceeds of $ 56.2 million after deducting the underwriters’ discount, structuring fee and other offering costs aggregating to $ 2.5 million.

Pursuant to the terms of the Credit Facility, all proceeds were used to repay amounts outstanding under the Credit Facility.

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Distributions and Dividends

4 unchanged sentences

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 and paid Stock Dividends of 0.01349 shares of the Company’s common stock on each share of the Company’s outstanding common stock in each of October 2020 and January 2021 and 0.014655 shares of the Company’s common stock on each share of the Company’s outstanding common stock in April 2021.

These amounts were based on the Company’s prior cash distribution rate of $ 0.85 per share per annum and the then-current Estimated Per-Share NAV.

1 unchanged sentence

Note 9 — Related Party Transactions and Arrangements

As of March 31, 2021 and December 31, 2020, the Special Limited Partner owned 9,130 and 9,008 shares, respectively, of the Company’s outstanding common stock.

As of June 30, 2021 and December 31, 2020, the Special Limited Partner owned 9,264 and 9,008 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 March 31, 2021 and December 31, 2020, the Advisor held 90 partnership units in the OP designated as “OP Units” (“OP Units”).

As of June 30, 2021 and December 31, 2020, 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.

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Acquisition Expense Reimbursements

3 unchanged sentences

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 March 31, 2021.

This threshold has not been exceeded through June 30, 2021.

Asset Management Fees and Variable Management/Incentive Fees

14 unchanged sentences

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 March 31, 2021, the Company cannot determine the probability of achieving the Performance Condition.

As of June 30, 2021, 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.

12 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

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 three months ended March 31, 2021 or 2020.

No variable management incentive fee was incurred for the three or six months ended June 30, 2021 or 2020.

Property Management Fees

14 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Professional Fees and Other Reimbursements

1 unchanged sentence

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 three months ended March 31, 2021 the Company incurred $ 2.2 million of reimbursement expenses from the Advisor for providing administrative services.

During the three months ended March 31, 2020, the Company incurred $ 2.2 million of reimbursement expenses from the Advisor for providing administrative services.

During the three and six months ended June 30, 2021 the Company incurred $ 1.9 million and $ 4.1 million of reimbursement expenses from the Advisor for providing administrative services, respectively.

During the three and six months ended June 30, 2020, the Company incurred $ 2.3 million and $ 4.7 million of reimbursement expenses from the Advisor for providing administrative services, respectively.

These reimbursement expenses are included in general and administrative expense on the consolidated statements of operations and comprehensive income (loss).

9 unchanged sentences

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 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 the calendar year 2019, 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.

4 unchanged sentences

Pursuant to authorization by the independent members of the Company’s board of directors, the $ 1.2 million receivable is being paid back to the Company over a 10-month period from January 2021 through October 2021.

As of June 30, 2021, $ 0.7 million of this amount has been received from the Advisor.

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

During the three months ended June 30, 2021, the Advisor finalized the amounts and form of the 2020 bonuses previously estimated (the “2020 Bonus Awards”) to be paid to the 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 2020 Bonus Awards are paid over a ten-month period from June 2021 to April 2022.

The final amounts exceeded the amounts previously paid by the Company to the Advisor for estimated 2020 bonuses by approximately $ 1.0 million for the following reasons (i) forfeitures of bonuses related to employees of the Advisor or its affiliates who were terminated or resigned prior to payment (including the Company’s former chief financial officer) and (ii) a general reduction in final bonuses for remaining personnel due to on-going negative impacts of the COVID-19 pandemic.

As a result, during the three months ended June 30, 2021, the Company recorded a receivable from the Advisor of $ 1.0 million, which is recorded in prepaid expenses and other assets on the consolidated balance sheet and a corresponding reduction in general administrative expenses.Pursuant to authorization by the independent members of the Company’s board of directors, the $ 1.0 million receivable is being paid back to the Company over a six-month period from November 2021 through April 2022.

Reimbursements for the cash portion of 2020 bonuses to employees of the Advisor or its affiliates were expensed and reimbursed on a monthly basis during 2020, and 2021 bonuses continue to be expensed and reimbursed on a monthly basis during 2021 in accordance with estimates provided by the Advisor.

2 unchanged sentences

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:

Three Months Ended March 31, Payable (Receivable) as of

(In thousands) Incurred Incurred March 31,

Three Months Ended June 30, Six Months Ended June 30, Payable (Receivable) as of

2021 2020 2021 2020

(In thousands) Incurred Incurred Incurred

Incurred June 30,

2021 December 31, 2020

10 unchanged sentences

Distributions on Class B Units (2)

— 76 — 152 — —

Total related party operation fees and reimbursements

1 unchanged sentence

(1) Included in general and administrative expenses in the consolidated statements of operations.

Includes $ 1.7 million and $ 1.6 million subject to the Capped Reimbursement Amount for the three months ended March 31, 2021 and March 31, 2020, respectively.

Includes $ 1.5 million and $ 3.2 million for the three and six months ended June 30, 2021, respectively, and $ 1.8 million and $ 3.7 million for the three and six months ended June 30, 2020, respectively, subject to the Capped Reimbursement Amount.

(2) Prior to April 1, 2015, the Company caused the OP to issue to the Advisor restricted performance based Class B Units for asset management services.

As of March 31, 2021, 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.

As of June 30, 2021, 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 $ 0.9 million and $ 1.2 million as of March 31, 2021 and December 31, 2020, respectively, from the Advisor related to the overpayment of 2019 Bonus Awards which, pursuant to authorization by the independent members of the Company’s board of directors, is being paid back to the Company over a ten month period from January 2021 through October 2021.

(3) Balance includes a receivable of $ 0.5 million and $ 1.2 million as of June 30, 2021 and December 31, 2020, respectively, from the Advisor related to the overpayment of 2019 Bonus Awards, which, pursuant to authorization by the independent members of the Company’s board of directors, is being paid back to the Company over a ten month period from January 2021 through October 2021.

Also includes a receivable of $ 1.0 million as of June 30, 2021from the Advisor related to the overpayment of 2020 Bonus Awards, which, pursuant to authorization by the independent members of the Company’s board of directors, is being paid back to the Company over a six-month period from November 2021 through April 2022.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

Fees and Participations Incurred in Connection with a Listing or the Liquidation of the Company’s Real Estate Assets

1 unchanged sentence

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 three months ended March 31, 2021 or 2020.

No such distribution was incurred during the six months ended June 30, 2021 or 2020.

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.

1 unchanged sentence

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 three months ended March 31, 2021 or 2020.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

as applicable, will reduce dollar for dollar the amount of the subordinated incentive listing distribution described above and subordinated incentive termination distribution described below.

No such participation in net sales proceeds became due and payable during the six months ended June 30, 2021 or 2020.

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 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

7 unchanged sentences

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.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

Note 10 — Economic Dependency

2 unchanged sentences

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.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Note 11 — Equity-Based Compensation

5 unchanged sentences

Any distributions payable in shares of common stock are subject to the same restrictions as the underlying restricted shares.

The following table reflects the amount of restricted shares outstanding as of March 31, 2021 and activity for the period presented:

The following table reflects the amount of restricted shares outstanding as of June 30, 2021 and activity for the period presented:

Number of Shares of Common Stock Weighted Average Issue Price

2 unchanged sentences

Forfeitures — —

Unvested, March 31, 2021 218,290 21.04

As of March 31, 2021, the Company had $ 3.6 million of unrecognized compensation cost related to unvested restricted share awards granted under the RSP.

Unvested, June 30, 2021 221,490 $ 20.94

As of June 30, 2021, the Company had $ 3.4 million of unrecognized compensation cost related to unvested restricted share awards granted under the RSP.

This cost will be recognized over a weighted-average period of 2.7 years.

Compensation expense related to restricted shares was approximately $ 0.3 million and $ 0.3 million for the three months ended March 31, 2021 and 2020, respectively.

Compensation expense related to restricted shares was approximately $ 0.3 million and $ 0.3 million for the three months ended June 30, 2021 and 2020, respectively.

Other Share-Based Compensation

1 unchanged sentence

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 three months ended March 31, 2021 or 2020.

No such shares were issued during the six months ended June 30, 2021 or 2020.

HEALTHCARE TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Note 12 — Accumulated Other Comprehensive Loss

5 unchanged sentences

Rebalancing of ownership percentage —

Balance, March 31, 2020 $ ( 23,827 )

Balance, June 30, 2021 $ ( 25,621 )

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 Activities , 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 $ 1.1 million as of March 31, 2021.

The unamortized portion of the terminated swap still remaining in accumulated other comprehensive (loss) income is $ 0.9 million as of June 30, 2021.

Note 13 — Non-controlling Interests

1 unchanged sentence

The Company is the sole general partner and holds substantially all of the OP Units.

As of March 31, 2021 and December 31, 2020, the Advisor held 90 OP Units, which represents a nominal percentage of the aggregate ownership in the OP.

As of June 30, 2021 and December 31, 2020, 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 a 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.

2 unchanged sentences

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.

Dur ing the three months ended March 31, 2020, OP Unit non-controlling interest holders were paid distribu tions of $ 0.1 million.

No distributions were paid to non-controlling interest holders during the three months ended March 31, 2021.

Dur ing the six months ended June 30, 2020, OP Unit non-controlling interest holders were paid distribu tions of $ 0.2 million.

No distributions were paid to non-controlling interest holders during the six months ended June 30, 2021.

The 405,998 OP Units outstanding as of June 30, 2021 would be redeemable for 429,343 shares of common stock, giving effect to adjustments for the impact of the Stock Dividends through July 2021.

Non-Controlling Interests in Property Owning Subsidiaries

9 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

The following table summarizes the activity related to investment arrangements with the unaffiliated third parties:

Distributions

Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement Three Months Ended March 31,

Distributions Distributions

Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement Three Months Ended June 30, Six Months Ended June 30,

Property Name

(Dollar amounts in thousands)

Investment Date March 31, 2021 March 31, 2021 March 31, 2021 As of December 31, 2020 2021 2020

Investment Date June 30, 2021 June 30, 2021 June 30, 2021 As of December 31, 2020 2021 2020 2021 2020

Plaza Del Rio Medical Office Campus Portfolio (1)

4 unchanged sentences

The following is a summary of the basic and diluted net loss per share computation for the periods presented and has been retroactively adjusted to reflect the Stock Dividends (see Note 1 — Organization for additional details):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net loss attributable to common stockholders (in thousands)

9 unchanged sentences

The amounts in the table below have been retroactively adjusted to reflect the Stock Dividends (see Note 1 — Organization for additional details):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Unvested restricted shares (1)

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(1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented.

Th ere were 218,290 and 277,241 unvested restricted shares outstanding as of March 31, 2021 and 2020, respectively.

Th ere were 221,490 and 276,974 unvested restricted shares outstanding as of June 30, 2021 and 2020, respectively.

(2) Weighted average number of antidilutive OP Units presented as shares outstanding for the periods presented, at the current redemption rate reflecting adjustments for the effect of the Stock Dividends.

There were 405,998 OP Units outstanding as of March 31, 2021 and 2020.

There were 405,998 OP Units outstanding as of June 30, 2021 and 2020.

(3) Weighted average number of antidilutive Class B Units presented as shares outstanding for the periods presented, at the current redemption rate reflecting adjustments for the effect of the Stock Dividends.

There were 359,250 Class B Units outstanding as of March 31, 2021 and 2020.

These Class B Units are unvested as of March 31, 2021 and 2020 (see Note 9 — Related Party Transactions for additional information).

There were 359,250 Class B Units outstanding as of June 30, 2021 and 2020.

These Class B Units are unvested as of June 30, 2021 and 2020 (see Note 9 — Related Party Transactions for additional information).

HEALTHCARE TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Note 15 — Segment Reporting

During the three months ended March 31, 2021 and 2020, the Company operated in three reportable business segments for management and internal financial reporting purposes:

During the six months ended June 30, 2021 and 2020, the Company operated in three reportable business segments for management and internal financial reporting purposes:

MOBs, triple-net leased healthcare facilities, and SHOPs.

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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 three months ended March 31, 2021 and 2020.

The results of operations from the Transition Properties are presented within the SHOP segment for the six months ended June 30, 2021 and 2020.

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.

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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.

The following tables reconcile the segment activity, retroactively adjusted for the Transition Properties to consolidated net loss for the periods presented:

HEALTHCARE TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

The following tables reconcile the segment activity, retroactively adjusted for the Transition Properties to consolidated net loss for the periods presented:

Three Months Ended March 31,

(In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated

June 30, 2021

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities (1)

Seniors Housing — Operating Properties (1)

Revenue from tenants

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Impairment charges

( 6,081 ) ( 6,959 )

Operating fees to related parties

( 5,923 ) ( 11,806 )

Acquisition and transaction related

( 123 ) ( 255 )

General and administrative

( 2,543 ) ( 8,595 )

Depreciation and amortization

( 19,502 ) ( 39,604 )

Interest expense

( 11,919 ) ( 24,241 )

Interest and other income

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Net loss attributable to stockholders

Three Months Ended March 31,

$ ( 15,985 ) $ ( 28,215 )

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1)

Seniors Housing — Operating Properties (1)

Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities (1)

Seniors Housing — Operating Properties (1)

Revenue from tenants

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Impairment charges

( 13,793 ) ( 31,831 )

Operating fees to related parties

( 5,936 ) ( 11,985 )

Acquisition and transaction related

( 178 ) ( 505 )

General and administrative

( 4,730 ) ( 11,460 )

Depreciation and amortization

( 20,183 ) ( 40,378 )

Interest expense

( 12,580 ) ( 25,837 )

Interest and other income

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$ ( 22,811 ) $ ( 47,555 )

(1) The results of operations from the Transition Properties are presented within the SHOP segment for the three months ended March 31, 2020.

_______________

(1) The results of operations from the Transition Properties are presented within the SHOP segment for the three and six months ended June 30, 2020.

HEALTHCARE TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

The following table reconciles the segment activity to consolidated total assets as of the periods presented:

(In thousands) March 31, 2021 December 31, 2020

(In thousands) June 30, 2021 December 31, 2020

Investments in real estate, net:

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Triple-net leased healthcare facilities 171,367 238,427

Construction in progress 479 —

Seniors housing — operating properties (1)

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_____________

(1) The Transition Properties are presented within the SHOP segment as of March 31, 2021 and December 31, 2020.

(1) The Transition Properties are presented within the SHOP segment as of June 30, 2021 and December 31, 2020.

The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2021 2020 2021 2020

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Seniors housing — operating properties (1)

1,994 2,148 5,472 7,260

Total capital expenditures $ 3,126 $ 2,666 $ 7,155 $ 13,764

______________________

(1) The results of operations from the Transition Properties are presented within the SHOP segment for the three months ended March 31, 2020.

(1) The results of operations from the Transition Properties are presented within the SHOP segment for the three and six months ended June 30, 2021.

HEALTHCARE TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

June 30, 2021

Note 16 — Commitments and Contingencies

As of March 31, 2021, 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 11.5 years to 86.5 years.

The Company did not enter into any additional ground leases during the quarter ended March 31, 2021.

As of March 31, 2021, the Company’s balance sheet includes ROU assets and 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.

As of June 30, 2021, the Company had eight operating and six direct financing lease agreements.

The eight operating leases have durations, including assumed renewals, ranging from 21.4 years to 86.2 years, excluding an adjacent parking lot lease with a term of 3.3 years.

The Company did not enter into any additional ground leases during the quarter ended June 30, 2021.

As of June 30, 2021, the Company’s balance sheet included ROU assets and liabilities of $ 13.8 million and $ 9.1 million, respectively, which are included in operating lease right-of-use assets and operating lease liabilities, respectively.

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 41.0 years and a weighted-average discount rate of 7.35 % as of March 31, 2021.

For the three months ended March 31, 2021, the Company paid cash of $ 0.2 million, for amounts included in the measurement of lease liabilities and recorded expense of $ 0.2 million, on a straight-line basis in accordance with the standard.

The Company paid cash of $ 0.2 million for amounts included in the measurement of lease liabilities and recorded expense of $ 0.2 million for the three months ended March 31, 2020.

Because 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 40.9 years and a weighted-average discount rate of 7.37 % as of June 30, 2021.

For the three and six months ended June 30, 2021, the Company paid cash of $ 0.2 million and $ 0.4 million, respectively, and for amounts included in the measurement of lease liabilities and recorded expense of $ 0.2 million and $ 0.4 million, respectively, on a straight-line basis in accordance with the current accounting guidance.

The Company paid cash of $ 0.2 million and $ 0.4 million, respectively, for amounts included in the measurement of lease liabilities and recorded expense of $ 0.2 million and $ 0.5 million, respectively, for the three and six months ended June 30, 2020.

The lease expense is recorded in property operating expenses in the consolidated statements of operations and comprehensive loss.

The following table reflects the base cash rental payments due from the Company as of March 31, 2021:

The following table reflects the base cash rental payments due from the Company as of June 30, 2021:

Future Base Rent Payments

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Total present value of minimum lease payments $ 9,061 $ 4,766

(1) The Direct Finance Lease liability is included in Accounts Payable and accrued expenses on the balance sheet as of March 31, 2021.

(1) The Direct Finance Lease liability is included in Accounts Payable and accrued expenses on the balance sheet as of June 30, 2021.

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.

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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 March 31, 2021, 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.

As of June 30, 2021, 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 — Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following:

HEALTHCARE TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

Note 17 — Subsequent Events

June 30, 2021

Acquisitions Subsequent to June 30, 2021

Subsequent to June 30, 2021, the Company acquired two MOBs for an aggregate contract purchase price of approximately $ 10.7 million, which was funded with cash on hand and borrowings from the Revolving Credit Facility.

Dividend Declaration

On April 2, 2021, the Company announced the declaration of the Stock Dividend of 0.014655 shares of the Company’s common stock, on each share of the Company’s outstanding Common Stock.

The Stock Dividend was paid on April 15, 2021 to holders of record of the Company’s common stock at the close of business on April 12, 2021.

Preferred Stock Series A Add-On

On May 11, 2021, the Company completed an underwritten public offering of 2,352,144 shares (which includes 152,144 shares issued and sold pursuant to the underwriters’ exercise of their option to purchase additional shares) of its Series A Preferred Stock for net proceeds of $ 56.7 million after deducting the underwriters’ discount and a structuring fee aggregating to $ 2.1 million.

Pursuant to the terms of the Credit Facility amendment, all proceeds were used to repay amounts outstanding under the Credit Facility.

On July 1, 2021, the Company announced the declaration of the Stock Dividend of 0.014655 shares of the Company’s common stock, on each share of the Company’s outstanding common stock.

The Stock Dividend was paid on July 15, 2021 to holders of record of the Company’s common stock at the close of business on July 12, 2021.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

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Some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements are set forth in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2020.

We are an externally managed REIT that focuses on acquiring and managing a diversified portfolio of healthcare-related real estate focused on MOBs, NNN properties, and SHOPs.

As of March 31, 2021, we owned 190 properties located in 31 states and comprised of 9.3 million rentable square feet.

We are an externally managed 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 June 30, 2021, we owned 195 properties located in 33 states and comprised of 9.1 million rentable square feet.

Substantially all of our business is conducted through the OP, a Delaware limited partnership, and its wholly owned subsidiaries.

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Healthcare Trust Special Limited Partnership, LLC (the “Special Limited Partner”), which is also under common control with AR Global, also has an interest in us through ownership of interests in our OP.

As of March 31, 2021, we owned 55 seniors housing properties under the REIT Investment Diversification and Empowerment Act (“RIDEA”) structure in our SHOP segment.

As of June 30, 2021, we owned 54 seniors housing properties using the REIT Investment Diversification and Empowerment Act (“RIDEA”) structure in our SHOP segment.

We have declared and paid quarterly dividends entirely in shares of our common stock.

Stock dividends paid in October 2020 and January 2021 were equal to 0.01349 shares of common stock on each share of our outstanding common stock The stock dividend paid in April 2021 was equal to 0.014655 shares of our common stock on each share of our outstanding common stock.

Since October 2020, we have declared and paid quarterly dividends solely in shares of our common stock.

Stock dividends paid in October 2020 and January 2021 were equal to 0.01349 shares of common stock on each share of our outstanding common stock The stock dividends paid in April and July 2021 were equal to 0.014655 shares of our common stock on each share of our outstanding common stock.

The aggregate impact of all three Stock Dividends was an increase of 1,392,822 shares.

Dividends payable entirely in shares of common stock are treated in 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 all three stock dividends was an increase of 1,392,822 shares.

No additional shares, except for the stock dividends, were issued during the three months ended March 31, 2021.

The aggregate impact of all four stock dividends was an increase of 5,319,763 shares.

No additional shares were issued during the three and six months ended June 30, 2021.

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Our previous Estimated Per-Share NAV was equal to $15.75 as of December 31, 2019.

The Estimated Per-Share NAV reflects the October 2020 stock dividend we paid and took into consideration the January 2021 stock dividend we paid but has not been adjusted to reflect the April 2021 stock dividend we paid and will not be adjusted for stock dividends we pay in the future until the board of directors (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;

The Estimated Per-Share NAV reflects the October 2020 stock dividend we paid and took into consideration the January 2021 stock dividend we paid but has not been adjusted to reflect the April 2021 and July 2021 stock dividends we paid and will not be adjusted for stock dividends we pay in the future until the board of directors (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.

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The extent to which the ongoing global COVID-19 pandemic, including the outbreaks that have occurred and may occur in markets where we own properties, impacts our operations and those of our tenants and third-party operators, will continue to depend on future developments, including the scope, severity and duration of the pandemic, and the actions taken to contain the COVID-19 or treat its impact, among others, which are highly uncertain and cannot be predicted with confidence, but could be material.

As of March 31, 2021, our MOB segment had an occupancy of 91.7% with a weighted-average remaining lease term of 4.8 years, (based on annualized straight-line rent as of March 31, 2021), our triple-net leased healthcare facilities segment had an occupancy of 94.5% with a weighted average remaining lease term of 6.2 years (based on annualized straight-line rent as of March 31, 2021) and our SHOP segment had an occupancy of 72.7%.

During the three months ended March 31, 2021, we experienced a decline in occupancy and an increase in costs at our SHOP portfolio, however, we received grants under the CARES Act of $5.1 million during the first quarter of 2021 which helped offset the COVID-19 related operating costs.

As of June 30, 2021, our MOB segment had an occupancy of 90.9% with a weighted-average remaining lease term of 4.7 years, (based on annualized straight-line rent as of June 30, 2021), our triple-net leased healthcare facilities segment had an occupancy of 94.5% with a weighted average remaining lease term of 6.0 years (based on annualized straight-line rent as of June 30, 2021) and our SHOP segment had an occupancy of 73.2%.

During the three months ended June 30, 2021, we experienced relative stability with respect to occupancy and operating costs in our SHOP portfolio, although there can be no assurance that future developments in the course of the pandemic will not cause further adverse impacts on our occupancy and cost levels.

The negative impact of the pandemic on our results of operations and cash flows has impacted and could continue to impact our ability to comply with covenants in our senior secured credit facility (the “Credit Facility”), which is comprised of our revolving credit facility (the “Revolving Credit Facility”) and a term loan (the “Term Loan”), and the amount available for future borrowings thereunder.

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Based on this approach and the overall financial strength and creditworthiness of our tenants, we believe that we have had positive results in our cash rent collections during this pandemic.

We have collected nearly 100% of the original cash rent due for the first quarter of 2021 in our MOB segment and 100% in our triple-net leased healthcare facilities segment.

During the six months ended June 30, 2021, we did not enter into any rent deferral agreements with any of our tenants and all amounts previously deferred under prior rent deferral agreements have been collected.

We have collected nearly 100% of the original cash rent due for the first and second quarters of 2021 in our MOB segment and 100% in our triple-net leased healthcare facilities segment.

Cash rental payments for our 54 SHOPs is primarily paid for by the residents through private payer insurance or directly, and to a lesser extent, by government reimbursement programs such as Medicaid and Medicare.

These cash rental payments are subject to timing differences, therefore we have not provided the amount of first quarter 2021 cash rent collected for our SHOP segment.

These cash rental payments are subject to timing differences, therefore we have not provided the amount of first and second quarter 2021 cash rent collected for our SHOP segment.

“Original cash rent” refers to contractual rents on a cash basis due from tenants as stipulated in their original executed lease agreement at inception or as amended, prior to any rent deferral agreement.

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Total rent collected during the period includes both original cash rent due and payments made by tenants pursuant to rent deferral agreements.

Eliminating the impact of deferred rent paid, we collected nearly 100% of original cash rent due for the first quarter of 2021.

Eliminating the impact of deferred rent paid, we collected nearly 100% of original cash rent due for the second quarter of 2021.

A deferral agreement is an executed or approved amendment to an existing lease to defer a certain portion of cash rent due to a future period.

During the year ended December 31, 2020, we granted rent deferrals for an aggregate of $0.4 million or less than 1% of original cash rent due for the year.

No additional rent was deferred during the three months ended March 31, 2021.

Rent collections in April 2021 were materially consistent with the first quarter of 2021, and we expect this trend to continue.

No additional rent was deferred during the three and six months ended June 30, 2021.

We have also granted rent concessions which serve to reduce revenue in our SHOP segment.

The impact of the COVID-19 pandemic on our tenants and operators thus our ability to collect rents in future periods cannot be determined at present.

Seniors Housing Properties

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We have also continued to experience lower inquiry volumes and reduced in-person tours during the pandemic.

SHOP occupancy has continued to decline from 84.1% as of March 31, 2020, to 79.5% as of June 30, 2020, to 77.9% as of September 30,2020, to 75.1% as of December 31, 2020 and to 72.7% as of March 31, 2021.

The declines in revenue we experienced during the first quarter of 2021 were primarily attributable to this decline in occupancy.

SHOP occupancy has continued to decline from 84.1% as of March 31, 2020, to 79.5% as of June 30, 2020, to 77.9% as of September 30, 2020, to 75.1% as of December 31, 2020, to 72.7% as of March 31, 2021, and to 73.2% as of June 30, 2021.

The declines in revenue we experienced during the first six months of 2021 as compared to the six months ended June 30, 2020 were primarily attributable to this decline in occupancy.

In addition, starting in mid-March of 2020, operating costs began to rise materially, including for services, labor and personal protective equipment and other supplies, as our operators took appropriate actions to protect residents and caregivers.

At our SHOP facilities, we bear 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 have continued through the end of the first quarter of 2021 and into the second quarter of 2021 and may continue to impact us in the and have a material adverse effect on our revenues and income in the other quarters thereafter.

We believe that, as infections decline and more vaccinations are administered during 2021, our occupancy will stop declining, and may start to increase, but there can be no assurance as to when or if we will be able to approach pre-pandemic levels of occupancy.

The pandemic raises the risk of an elevated level of resident exposure to illness and restrictions on move-ins at our SHOPs, which has and could also continue to adversely impact occupancy and revenues as well as increase costs.

These trends accelerated during the second, third and fourth quarters of 2020 and continued into the beginning of 2021 as the surge of new COVID-19 cases that started in late 2020 crested before leveling off during the second quarter of 2021.

There can be no assurance, however, that future developments in the course of the pandemic will not cause further adverse impacts to our occupancy and cost levels, and these trends may continue to impact us and have a material adverse effect on our revenues and income in the other quarters.

We believe that, as infections decline and more vaccinations are administered during 2021, our occupancy may start to increase.

However, there can be no assurance as to when or if we will be able to approach pre-pandemic levels of occupancy due to, among other factors, the ongoing vaccine hesitancy and resistance in certain segments of the population and the recent spread of more transmissible COVID-19 variants.

We believe that the actions we have taken help reduce the incidences of COVID-19 at our properties, but there can be no assurance in this regard.

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On March 27, 2020, Coronav irus 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.

On March 27, 2020, the 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.

During the first quarter of 2021, we received an additional $5.1 million in CARES Act funding.

We consider the funds to be a grant contribution from the government and the full amount was recognized a s a reduction of property operating expenses in our consolidated statement of operations during the first quarter of 2021.

During the six months ended June 30, 2021, we received $5.1 million in funding from CARES Act grants.

Previously, we received $3.6 million in grants during the year ended December 31, 2020, $3.1 million of which was received in the three and six months ended June 30, 2020.

There can be no assurance that the program will be extended or any further amounts received under currently effective or potential future government programs.

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As discussed in Note 2 — Summary of Significant Accounting Policies - CARES Act Grants, we adopted a new policy with respect to accounting for such grants received.

The following table presents certain additional information about the properties we owned as of March 31, 2021:

The following table presents certain additional information about the properties we owned as of June 30, 2021:

Portfolio Number

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Total Triple-Net Leased Healthcare Facilities 14 868,978 94.5% 6.0 211,251

Seniors Housing — Operating Properties (6)

55 4,265,466 72.7% (4) N/A 1,229,434

Jupiter Property — Recently Developed 1 235,445 10.0% (5) 9.7 58,005

Seniors Housing — Operating Properties 54 4,133,166 73.2% (4) N/A 1,200,949

Land 2 N/A N/A N/A 3,665

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_______________

(1) Inclusive of leases signed but not yet commenced as of March 31, 2021.

(2) Weighted-average remaining lease term in years is calculated based on square feet as of March 31, 2021.

(3) Gross asset value represents total real estate investments, at cost ($2.6 billion total as of March 31, 2021) net of gross market lease intangible liabilities ($22.2 million total as of March 31, 2021).

(1) Inclusive of leases signed but not yet commenced as of June 30, 2021.

(2) Weighted-average remaining lease term in years is calculated based on square feet as of June 30, 2021.

(3) Gross asset value represents total real estate investments, at cost ($2.6 billion total as of June 30, 2021) net of gross market lease intangible liabilities ($22.3 million total as of June 30, 2021).

Impairment charges are already reflected within gross asset value.

(4) Weighted by unit count as of March 31, 2021.

(5) Our development property in Jupiter, Florida was substantially completed in the fourth quarter of 2019.

Although a portion of the property has been leased as of March 31, 2021, the property is separately shown and excluded from combined occupancy numbers.

Occupancy in the triple-net leased healthcare facilities segment would have been 76.5% had the development property been included.

This property is currently under a PSA to be sold.

Although the disposition is expected to be completed in the second quarter of 2021, and there can be no assurance that the disposition will be completed on its contemplated terms, or at all.

(6) One SHOP in Wellington, Florida is under a PSA to be sold.

Although the disposition is expected to be completed in the second quarter of 2021, there can be no assurance that the disposition will be completed on its contemplated terms, or at all.

During the three months ended March 31, 2021, four MI SHOPs located in Michigan were transferred to their buyer pursuant to their sale in November 2020.

(4) Weighted by unit count as of June 30, 2021.

SHOP units were 73.2% occupied.

N/A Not applicable.

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In our MOB operating segment, we own, manage and lease single and multi-tenant MOBs where tenants are required to pay their pro rata share of property operating expenses, which may be subject to expense exclusions and floors, in addition to base rent.

In our triple-net leased healthcare facilities operating segment, we own, manage and lease seniors housing properties, hospitals, post-acute care and skilled nursing facilities throughout the United States under long-term triple-net leases, and tenants are generally directly responsible for all operating costs of the respective properties.Our Property Manager or third party managers manage our MOBs and our triple-net leased healthcare facilities.

Our Property Manager or third party managers manage our MOBs and our triple-net leased healthcare facilities.

In our SHOP segment, we invest in seniors housing properties using the RIDEA structure.

As of March 31, 2021, we had six eligible independent contractors operating 55 SHOPs (not including two land parcels).

As of June 30, 2021, we had six eligible independent contractors operating 54 SHOPs (not including two land parcels).

All of our properties across all three business segments are located throughout the United States.

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Information based on Same Store, Acquisitions and Dispositions (as each are defined below) allows us to evaluate the performance of our portfolio based on a consistent population of properties owned for the entire period of time covered.

As of March 31, 2021, we owned 190 properties.

There were 180 properties (our “Same Store” properties) owned for the entire year ended December 31, 2020 and the three months ended March 31, 2021.

Our Same Store properties include two vacant land parcels and one development property that was substantially completed in the fourth quarter of 2019.

Since January 1, 2020, we acquired ten properties (our “Acquisitions”) and disposed of 13 properties (our “Dispositions”).

As described in more detail under “Results of Operations — Comparison of the Three Months Ended March 31, 2021 — Transition Properties” below, our Same Store properties include four Transition Properties that were transitioned from Senior Housing - Triple Net Leased to our SHOP segment effective July 1, 2020.

As of June 30, 2021, we owned 195 properties.

There were 178 properties owned for the entire year ended December 31, 2020 and the six months ended June 30, 2021 (our “Same Store” properties).

Our Same Store properties include two vacant land parcels.

Since January 1, 2020, we acquired 17 properties (our “Acquisitions”) and disposed of 15 properties (our “Dispositions”).

As described in more detail under “Results of Operations — Comparison of the Three Months Ended June 30, 2021 — Transition Properties” below, our Same Store properties include four Transition Properties that were transitioned from Senior Housing - Triple Net Leased to our SHOP segment effective July 1, 2020.

These four Transition Properties were owned for the entire same store period and merely moved between segments.

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See Note 3 — Real Estate Investments, Net for further information about the Transition Properties and the transition.

The following table presents a roll-forward of our properties owned from January 1, 2019 to March 31, 2021:

The following table presents a roll-forward of our properties owned from January 1, 2020 to June 30, 2021:

Number of Properties

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Number of properties, December 31, 2020 193

Acquisition activity during the three months ended March 31, 2021 1

Disposition activity during the three months ended March 31, 2021 (4)

Number of properties, March 31, 2021 190

Acquisition activity during the six months ended June 30, 2021 8

Disposition activity during the six months ended June 30, 2021 (6)

Number of properties, June 30, 2021 195

Number of Same Store Properties (1)

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In addition to the comparative period-over-period discussions below, please see the “Overview — Management Update on the Impacts of the COVID-19 Pandemic” section above for additional information on the risks and uncertainties associated with the COVID-19 pandemic and management’s responses.

Comparison of the Three Months Ended March 31, 2021 and 2020

Net loss attributable to common stockholders was $12.2 million and $24.7 million for the three months ended March 31, 2021 and 2020, respectively.

The following table shows our results of operations for the three months ended March 31, 2021 and 2020 and the period to period change by line item of the consolidated statements of operations:

Three Months Ended March 31, Increase (Decrease)

Comparison of the Three Months Ended June 30, 2021 and 2020

Net loss attributable to common stockholders was $16.0 million and $22.8 million for the three months ended June 30, 2021 and 2020, respectively.

The following table shows our results of operations for the three months ended June 30, 2021 and 2020 and the period to period change by line item of the consolidated statements of operations:

Three Months Ended June 30, Increase (Decrease)

(Dollars in thousands) 2021 2020 $

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Interest and other income 4 36 (32)

Loss on non-designated derivatives 14 16 (2)

(Loss) gain on non-designated derivatives (13) 8 (21)

Total other expenses

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As described in more detail below, our Same Store includes the four Transition Properties, which transitioned from our triple-net leased healthcare facilities segment to our SHOP segment during the third quarter of 2020.

During the three months ended March 31, 2021, as shown in more detail in the table below, the Transition Properties contributed approximately $(0.2) million of net operating income (“NOI”).

During the three months ended June 30, 2021, as shown in more detail in the table below, the Transition Properties contributed approximately $(0.3) million of net operating income (loss) (“NOI”).

The results of operations of the Transition Properties are included in Segment Same Store with respect to the SHOP segment.

The bad debt expense relating to the Transition Properties is included as a reduction to revenue from tenants on the consolidated statement of operations.

For purposes of the discussion and analysis of the segment results of operations during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020, the results of operations for the Transition Properties are included as part of our SHOP segment and excluded from our triple-net leased healthcare facilities segment.

For purposes of the discussion and analysis of the segment results of operations during the three months ended June 30, 2021 as compared to the three months ended June 30, 2020, the results of operations for the Transition Properties are included as part of our SHOP segment and excluded from our triple-net leased healthcare facilities segment.

The following table presents by segment Same Store properties’ NOI before and after adjusting for the Transition Properties as described above, to arrive at “Segment Same Store” results.

Our MOB segment was not affected by the Transition Properties.

Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Increase (Decrease)

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Increase (Decrease)

(Dollar amounts in thousands) Same Store Properties Transition Properties Segment Same Store Same Store Properties Transition Properties Segment Same Store Same Store Properties Transition Properties Segment Same Store

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Segment Results — Medical Office Buildings

The following table presents the components of NOI and the period to period change within our MOB segment for the three months ended March 31, 2021 and 2020:

The following table presents the components of NOI and the period to period change within our MOB segment for the three months ended June 30, 2021 and 2020:

Same Store (1)

2 unchanged sentences

Segment Total (4)

Three Months Ended March 31, Increase (Decrease) Three Months Ended March 31, Increase (Decrease) Three Months Ended March 31, Increase (Decrease) Three Months Ended March 31, Increase (Decrease)

Three Months Ended June 30, Increase (Decrease) Three Months Ended June 30, Increase (Decrease) Three Months Ended June 30, Increase (Decrease) Three Months Ended June 30, Increase (Decrease)

(Dollars in thousands) 2021 2020 $ 2021 2020 $ 2021 2020 $ 2021 2020 $

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(1) Our MOB segment included 112 Same Store properties.

(2) Our MOB segment included six Acquisition properties.

(2) Our MOB segment included 13 Acquisition properties.

(3) Our MOB segment included one Disposition property.

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Property operating and maintenance relates to the costs associated with our properties, including real estate taxes, utilities, repairs, maintenance, and unaffiliated third-party property management fees.

During the three months ended March 31, 2021, the MOB segment contributed a $0.2 million decrease in NOI as compared to the three months ended March 31, 2020.

Of our ten Acquisitions during the period from January 1, 2020 through March 31, 2021, six were MOBs which contributed a $0.5 million increase in NOI and our Disposition properties contributed a $49,000 increase in NOI due to non-recurring property operating expenses, while NOI from our Same Store properties decreased by $0.7 million during the three months ended March 31, 2021 as compared to March 31, 2020.

During the three months ended June 30, 2021, the MOB segment contributed a $0.3 million increase in NOI as compared to the three months ended June 30, 2020 primarily as a result of our 13 MOB acquisitions during the period from January 1, 2020 through June 30, 2021.

Segment Results — Triple-Net Leased Healthcare Facilities

The following table presents the components of NOI and the period to period change within our triple-net leased healthcare facilities segment for the three months ended March 31, 2021 and 2020:

The following table presents the components of NOI and the period to period change within our triple-net leased healthcare facilities segment for the three months ended June 30, 2021 and 2020:

Same Store (1)

2 unchanged sentences

Segment Total (4)

Three Months Ended March 31, Increase (Decrease) Three Months Ended March 31, Increase (Decrease) Three Months Ended March 31, Increase (Decrease) Three Months Ended March 31, Increase (Decrease)

Three Months Ended June 30, Increase (Decrease) Three Months Ended June 30, Increase (Decrease) Three Months Ended June 30, Increase (Decrease) Three Months Ended June 30, Increase (Decrease)

(Dollars in thousands) 2021 2020 $ 2021 2020 $ 2021 2020 $ 2021 2020 $

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(2) Our triple-net leased healthcare facilities segment included zero Acquisition properties.

(3) Our triple-net leased healthcare facilities segment included zero Disposition properties.

(3) Our triple-net leased healthcare facilities segment included one Disposition properties.

(4) Our triple-net leased healthcare facilities segment included 14 properties.

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however, they may be paid by us and reimbursed by the tenants.

During the three months ended March 31, 2021, revenue from tenants in our triple-net leased healthcare facilities segment increased $0.1 million compared to the three months ended March 31, 2020, driven by our Same Store Properties.

Property operating and maintenance expenses of $1.0 million and $0.5 million during the three months ended March 31, 2021 and 2020, respectively, primarily relates to property taxes and operating expenses.

During the three months ended June 30, 2021, revenue from tenants in our triple-net leased healthcare facilities segment decreased $0.4 million compared to the three months ended June 30, 2020, driven by our Disposition Properties.

Property operating and maintenance expenses of $0.5 million and $0.5 million during the three months ended June 30, 2021 and 2020, respectively, primarily relates to property taxes and operating expenses.

Segment Results — Seniors Housing - Operating Properties

The following table presents the components of NOI and the period to period change within our SHOP segment for the three months ended March 31, 2021 and 2020:

The following table presents the components of NOI and the period to period change within our SHOP segment for the three months ended June 30, 2021 and 2020:

Same Store (1)

2 unchanged sentences

Segment Total (4)

Three Months Ended March 31, Increase (Decrease) Three Months Ended March 31, Increase (Decrease) Three Months Ended March 31, Increase (Decrease) Three Months Ended March 31, Increase (Decrease)

Three Months Ended June 30, Increase (Decrease) Three Months Ended June 30, Increase (Decrease) Three Months Ended June 30, Increase (Decrease) Three Months Ended June 30, Increase (Decrease)

(Dollars in thousands) 2021 2020 $ 2021 2020 $ 2021 2020 $ 2021 2020 $

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Property operating and maintenance expenses relates to the costs associated with staffing to provide care for the residents in our SHOPs, as well as food, marketing, real estate taxes, management fees paid to our third party operators, and costs associated with maintaining the physical site.

During the three months ended March 31, 2021, revenues from tenants decreased by $16.7 million in our SHOP segment as compared to the three months ended March 31, 2020 which was primarily driven by a decrease in revenue of $9.9 million due to our Same Store properties, which includes our Transition Properties, as well as a decrease in revenue of $8.6 million due to our Disposition properties.

During the three months ended June 30, 2021, revenues from tenants decreased by $13.8 million in our SHOP segment as compared to the three months ended June 30, 2020 which was primarily driven by a decrease in revenue of $4.7 million due to our Same Store properties, which includes our Transition Properties, as well as a decrease in revenue of $9.2 million due to our Disposition properties.

These revenue decreases were partially offset by an increase of $0.1 million due to our Acquisition properties.

These revenue decreases were also offset by $0.5 million in COVID-19 surcharges during the quarter related to billing residents for Personal Protective Equipment (“PPE”).

These revenue decreases were also offset by $0.3 million in COVID-19 surcharges during the three months ended June 30, 2021 related to billing residents for Personal Protective Equipment (“PPE”), which we began billing residents for in the third quarter of 2020.

Revenues declined in our Same Store SHOPs primarily due to a decrease in occupancy as a result of the impact of COVID-19 as discussed above.

SHOP occupancy has declined from 84.1% as of March 31, 2020 to 72.7% as of March 31, 2021.

SHOP occupancy has declined from 84.1% as of March 31, 2020, to 79.5% as of June 30, 2020, to 77.9% as of September 30, 2020, to 75.1% as of December 31, 2020, to 72.7% as of March 31, 2021, and to 73.2% as of June 30, 2021.

Regulatory and government-imposed restrictions and infectious disease protocols have hindered, and continue to hinder, our ability to accommodate and conduct in-person tours, process and attract new move-ins at our SHOPs and these and other impacts of the COVID-19 pandemic have affected, and could continue to affect, our ability to fill vacancies.

In addition, we also generated a portion of our SHOP revenue from skilled nursing facilities (which include ancillary revenue from non-residents) at three of our Same Store SHOPs.

This revenue declined $0.8 million from $2.6 million during the three months ended March 31, 2020 to $1.8 million during the quarter ended March 31, 2021 as a result of us limiting the services we offer at our skilled nursing facilities, during the COVID-19 pandemic, to protect our residents and on-site staff.

We also offered COVID-related rent concessions of $0.1 million for the quarter ended March 31, 2021.

During the three months ended March 31, 2021, property operating and maintenance expenses decreased $13.1 million in our SHOP segment as compared to the three months ended March 31, 2020, primarily due to a decrease of $6.6 million due to our Same Store properties, which include our Transition properties, and a decrease of $7.9 million from our Disposition properties, partially offset by an increase of $1.5 million in our Acquisition properties.

The total decrease in Same Store operating costs mainly related to funds received through the CARES Act of $5.1 million which offset costs incurred from the ongoing COVID-19 pandemic which totaled $0.7 million for the quarter ended March 31, 2021.

The full amount of the CARES Act funds was recognized as a reduction to our Same Store property operating expenses in the table above for the quarter ended March 31, 2021.

The remaining decrease in property operating expenses at our Same Store properties are explained by lower operating expenses incurred due to lower levels of occupancy.

We also offered COVID-related rent concessions of $0.1 million for the three months ended June 30, 2021.

In addition, we generated a portion of our SHOP revenue from skilled nursing facilities (which include ancillary revenue from non-residents) at one of our Same Store SHOPs.

This revenue increased $0.1 million from $0.3 million during the three months ended June 30, 2020 to $0.4 million during the quarter ended June 30, 2021 as a result of limited services offered at our skilled nursing facilities during the COVID-19 pandemic to protect our residents and on-site staff.

Our two largest skilled nursing facilities in Lutz, Florida and Wellington, Florida were sold in December 2020 and May 2021, respectively.

These properties generated ancillary revenue during the three months ended June 30, 2021 and 2020 of $0.6 million and $2.2 million, respectively, which is included in our Disposition Properties.

As a result of these dispositions, we expect ancillary revenue to continue to decline in future quarters.

During the three months ended June 30, 2021, property operating and maintenance expenses decreased $8.7 million in our SHOP segment as compared to the three months ended June 30, 2020, primarily due to a decrease of $1.9 million from our Same Store properties, which include our Transition Properties, and a decrease of $6.7 million from our Disposition properties.

We received funds from the CARES Act in the three months ended June 30, 2020 totaling $3.1 million, which did not recur in the three months ended June 30, 2021.

The funds received in 2020 were primarily due to our Lutz, Florida and Wellington, Florida properties which were sold in December 2020 and May 2021, respectively, and the impact of the receipt of these funds is reflected as part of our Disposition Properties in the table above.

The decrease in property operating expenses at our Same Store properties is explained by lower operating expenses incurred due to lower levels of occupancy as well as lower COVID-related costs as compared to the same period in 2020.

As a result we experienced a decrease in Same Store operating costs of $1.9 million year over year.

There can be no assurance that the program will be extended or any further amounts received.

There can be no assurance that the CARES Act program will be extended or any further amounts received.

See the “Overview - Management Update on the Impacts of the COVID-19 Pandemic” section above for additional information on the risks and uncertainties associated with the COVID-19 pandemic and management’s actions taken in response.

The LaSalle Properties

On July 1, 2020, we 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 our TRS and operated and managed on our behalf by a third-party operator.

We have filed proofs of claims related to amounts previously awarded to it from the bankruptcy proceeding, however, we have no amounts due from the LaSalle Tenant in its consolidated balance sheets as of March 31, 2021 and December 2020 as we do not believe recovery is likely against the LaSalle Tenant.

Other Results of Operations

Impairment Charges

We incurred $0.9 million of impairment charges for the three months ended March 31, 2021 due to an amended purchase and sale agreement (“PSA”) which reduced the sales price of the skilled nursing facility in Wellington, Florida to $30.7 million.

We incurred $18.0 million of impairment charges for the three months ended March 31, 2020 related to an amendment to a purchase and sale agreement (“PSA”) related to the sale of SHOP assets located in Michigan (the “Michigan SHOPs”) to reduce

the number of properties to be sold from 14 to 11 and to reduce the sale price from $71.8 million to $11.8 million.

See Note 3 — Real Estate Investments to our consolidated financial statements in this Quarterly Report on Form 10-Q for additional information on the impairment charges for the three months ended March 31, 2021 and 2020.

We incurred $6.1 million of impairment charges for the three months ended June 30, 2021.

We had actively been considering plans to sell a NNN property located in Sun City, Arizona.

As a result of changes to our expected holding period, we determined that projected cash flows did not recover the carrying value of the properties on an undiscounted basis over its intended holding period.

Subsequently, during July 2021, we entered into a non-binding letter of intent and as a result, we determined that the fair market value of the property had declined and recorded an impairment charge of $6.1 million, which is included on the consolidated statement of operations and comprehensive loss.

We incurred an additional $13.8 million of impairment charges for the three months ended June 30, 2020 on our recently completed development project in Jupiter, Florida representing the amount by which the carrying amount of the property exceeds our estimate of the net sales price, based on the definitive purchase and sale agreement (“PSA”) entered into in August

2020 based on terms negotiated during the second quarter of 2020 to sell the property.

The sale of this property was completed during the three months ended June 30, 2021.

Operating Fees to Related Parties

Operating fees to related parties were $5.9 million for the three months ended March 31, 2021 and $6.0 million for March 31, 2020 respectively.

Operating fees to related parties were $5.9 million for the three months ended June 30, 2021 and $5.9 million for June 30, 2020 respectively.

Our Advisor and Property Manager are paid for asset management and property management services for managing our properties on a day-to-day basis.

We pay a base management fee equal to $1.6 million per month, while the variable portion of the base management fee is equal, per month, to one twelfth per month of 1.25% of the cumulative net proceeds of any equity raised subsequent to February 17, 2017.

Asset management fees were $5.0 million in the three months ended March 31, 2021 and 2020, as we had raised any equity in the fourth quarter of 2019.

In May 2021, we raised net proceeds of $56.7 million in equity pursuant to an underwritten offering of our Series A Preferred Stock (see N ote 17 — Subsequent Events).

Property management fees were $1.0 million for the three months ended March 31, 2021 and $1.1 million for the three months ended March 31, 2020.

Property management fees increase or decrease in direct correlation with gross revenues of the properties managed.

Asset management fees were $5.1 million and $5.0 million in the three months ended June 30, 2021 and 2020, respectively.

While we had not previously raised any equity since the fourth quarter of 2019, in May 2021, we raised net proceeds of $56.2 million in equity pursuant to an underwritten offering of our Series A Preferred Stock, however, we only incurred one month of variable base management fees with respect to this new equity in the three months ended June 30, 2021.

Property management fees were $0.9 million for the three months ended June 30, 2021 and $0.9 million for the three months ended June 30, 2020.

Property management fees increase or decrease in direct correlation with gross revenues of the properties managed and depending on the mix of properties managed, as the fee payable for different types of properties varies.

See Note 9 — Related Party Transactions and Arrangements to our consolidated financial statements in this Quarterly Report on Form 10-Q which provides detail on our fees and expense reimbursements.

Acquisition and Transaction Related Expenses

Acquisition and transaction related expenses were $0.1 million for the three months ended March 31, 2021, compared to approximately $0.3 million for the three months ended March 31, 2020.

Acquisition and transaction related expenses were $0.1 million for the three months ended June 30, 2021, compared to approximately $0.2 million for the three months ended June 30, 2020.

The expenses in both periods relate to indirect costs related to acquisitions.

General and Administrative Expenses

General and administrative expenses decreased to $6.1 million for the three months ended March 31, 2021 compared to $6.7 million for the three months ended March 31, 2020, which includes $2.6 million and $2.6 million for the three months ended March 31, 2021 and March 31, 2020, respectively, incurred in expense reimbursements and distributions on partnership units of the OP designated as “Class B Units” (“Class B Units”) to related parties.

General and administrative expenses decreased to $2.5 million for the three months ended June 30, 2021 compared to $4.7 million for the three months ended June 30, 2020, which includes $2.7 million for the three months ended June 30, 2021 and June 30, 2020, incurred in expense reimbursements and distributions on partnership units of the OP designated as “Class B Units” (“Class B Units”) to related parties.

Class B Units will not receive distributions, and no expense will be incurred, for so long as we pay distributions to our common stockholders in stock instead of cash.

This decrease was also due to a change in estimate reflected as a reduction in previously recorded expenses related to 2020 bonus awards made by the Advisor to employees of the Advisor or its affiliates of $1.0 million (see Note 9 —Related Party Transactions and Arrangements in our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information), as well as lower auditing expenses of $0.5 million, lower printing expenses of $0.5 million, lower transfer agent expenses of $0.3 million, and lower miscellaneous costs of $0.2 million in the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.

Depreciation and Amortization Expenses

Depreciation and amortization expense decreased $0.1 million to $20.1 million for the three months ended March 31, 2021 from $20.2 million for the three months ended March 31, 2020.

Depreciation and amortization expense decreased $0.7 million to $19.5 million for the three months ended June 30, 2021 from $20.2 million for the three months ended June 30, 2020.

The decrease was primarily due to reduced depreciation and amortization as a result of our dispositions partially offset by additional depreciation from our recent acquisitions.

Gain on Sale of Real Estate Investments

During the three months ended March 31, 2021, we transferred the remaining four Michigan SHOPs to the buyer at a second closing in the first quarter of 2021 and as a result, we recorded a loss on sale of $0.2 million during the three months ended March 31, 2021.

During the three months ended March 31, 2020 we sold one MOB property which resulted in a gain on sale of $2.3 million.

This property sold for a contract purchase price of $8.6 million.

We sold our skilled nursing facility in Wellington, Florida and our development property in Jupiter, Florida in the three months ended June 30, 2021, which resulted in gains on sale of $0.1 million and $2.4 million, respectively.

These gains are included in the consolidated statement of operations for the three months ended June 30, 2021.

We did not dispose of any properties during the three months ended June 30, 2020.

Interest Expense

Interest expense decreased by $0.9 million to $12.3 million for the three months ended March 31, 2021 from $13.3 million for the three months ended March 31, 2020.

The decrease in interest expense resulted from lower interest rates.

As of March 31, 2021 our outstanding debt obligations were $1.2 billion at a weighted average interest rate of 3.55% per year.

As of March 31, 2020, we had total borrowings of $1.3 billion, at a weighted average interest rate of 3.79% per year.

Interest expense decreased by $0.7 million to $11.9 million for the three months ended June 30, 2021 from $12.6 million for the three months ended June 30, 2020.

The decrease in interest expense resulted from lower average balances due to the repayment of amounts outstanding under our Revolving Credit Facility of $133.7 million, net of amounts drawn to fund acquisitions, during the three months ended June 30, 2021.

As of June 30, 2021 our outstanding debt obligations were $1.1 billion at a weighted average interest rate of 3.59% per year.

As of June 30, 2020, we had total borrowings of $1.3 billion, at a weighted average interest rate of 3.79% per year.

Our interest expense in future periods will vary based on our level of future borrowings, the cost of borrowings among other factors.

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Interest and other income includes income from our investment securities and interest income earned on cash and cash equivalents held during the period.

Interest and other income was approximately $52,000 and a $5,000 income for the three months ended March 31, 2021 and 2020, respectively.

Gain (Loss) on Non-Designated Derivatives

The gain (loss) on non-designated derivative instruments for the three months ended March 31, 2021 and 2020 related to interest rate caps that are designed to protect us from adverse interest rate changes in connection with our Fannie Mae Master Credit Facilities, which have floating interest rates.

Interest and other income was approximately $4,000 and a $36,000 income for the three months ended June 30, 2021 and 2020, respectively.

(Loss) Gain on Non-Designated Derivatives

The (loss) in the three months ended June 30, 2021 and the gain the three months ended June 30, 2020 on non-designated derivative instruments related to interest rate caps that are designed to protect us from adverse interest rate changes in connection with our Fannie Mae Master Credit Facilities, which have floating interest rates.

Income Tax Expense

We recorded an income tax expense of $48,000 and $0.3 million for the three months ended March 31, 2021 and 2020, respectively, primarily related to deferred tax assets generated by temporary differences and current period net operating income associated with our TRS.

These deferred tax assets are partially offset by other income tax benefits incurred during the same period.

Income taxes generally relate to our SHOPs, which are leased by our TRS.

Because of our TRS’s recent operating history of losses and the on-going impacts of the COVID-19 pandemic on the results of operations of our SHOP assets, we are not able to conclude that it is more likely than not we will realize the future benefit of our deferred tax assets;

thus we have retained a 100% valuation allowance as of March 31, 2021 of $4.3 million.

We recorded an income tax expense of $59,000 and $0.3 million for the three months ended June 30, 2021 and 2020, respectively.

Because of our TRS’s recent operating history of losses and the on-going impacts of the COVID-19 pandemic on the results of operations of our SHOP assets, in the third quarter of 2020, we were not able to conclude that it is more likely than not we will realize the future benefit of our deferred tax assets and recorded a full valuation allowance.

Since that time, our TRS’s operating performance has not significantly improved and thus we have retained a 100% valuation allowance as of June 30, 2021.

If and when we believe it is more likely than not that we will recover our deferred tax assets, we will reverse the valuation allowance as an income tax benefit in our consolidated statements of comprehensive income (loss).

Net Loss Attributable to Non-Controlling Interests

Net loss attributable to non-controlling interests was approximately $0.0 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively.

Net (Income)/Loss Attributable to Non-Controlling Interests

Net (income)/loss attributable to non-controlling interests was approximately $0.1 million and $0.1 million for the three months ended June 30, 2021 and 2020, respectively.

These amounts represent the portion of our net loss that is related to the OP Units and non-controlling interest holders in our subsidiaries that own certain properties.

Comparison of the Six Months Ended June 30, 2021 and 2020

Information based on Same Store, Acquisitions and Dispositions allows us to evaluate the performance of our portfolio based on a consistent population of properties.

Net loss attributable to common stockholders was $28.2 million and $47.6 million for the six months ended June 30, 2021 and 2020, respectively.

The following table shows our results of operations for the six months ended June 30, 2021 and 2020 and the period to period change by line item of the consolidated statements of operations:

Six Months Ended June 30, Increase (Decrease)

(Dollars in thousands) 2021 2020 $

Revenue from tenants $ 164,596 $ 194,899 $ (30,303)

Operating expenses:

Property operating and maintenance 100,915 121,511 (20,596)

Impairment charges 6,959 31,831 (24,872)

Operating fees to related parties 11,806 11,985 (179)

Acquisition and transaction related 255 505 (250)

General and administrative 8,595 11,460 (2,865)

Depreciation and amortization 39,604 40,378 (774)

Total expenses

168,134 217,670 (49,536)

Operating loss before gain on sale of real estate investments (3,538) (22,771) 19,233

Gain on sale of real estate investments 2,284 2,306 (22)

Operating (loss) income

(1,254) (20,465) 19,211

Other income (expense):

Interest expense (24,241) (25,837) 1,596

Interest and other income

Loss on non-designated derivatives 1 24 (23)

Total other expenses

(24,184) (25,772) 1,588

Loss before income taxes (25,438) (46,237) 20,799

Income tax expense (107) — (107)

Net loss (25,545) (46,237) 20,692

Net (income) loss attributable to non-controlling interests (102) 174 (276)

Preferred stock dividends (2,568) (1,492) (1,076)

Net loss attributable to common stockholders $ (28,215) $ (47,555) $ 19,340

Transition Properties

Some of our properties move between our operating segments, for example if they are converted from being triple-net leased to third parties in our triple-net leased healthcare facilities segment to being leased to one of our TRSs and operated and managed on our behalf by a third-party operator in our SHOP segment.

When transfers between segments occur, we reclassify 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” and Note 15 — Segment Reporting to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

Over the last three years, we have had properties transfer between operating segments.

Upon such transfers we retroactively restate the historical operating results for the segment for all periods presented in that filing and, thereafter, we will restate other later prior periods when they are subsequently reported in later filings for comparative purposes.

As a result, we provide transition disclosure adjustments only for properties that have transitioned since the prior numbers were previously reported.

We transitioned the LaSalle Properties effective July 1, 2020.

As discussed in more detail below, our Same Store includes the four Transition Properties, which transitioned from our triple-net leased healthcare facilities segment to our SHOP segment during the third quarter of 2020.

During the six months ended June 30, 2021, as shown in more detail in the table below, the Transition Properties contributed approximately $(0.5) million of NOI.

The results of operations of the Transition Properties are included in Segment Same Store with respect to the SHOP segment.

The bad debt expense relating to the Transition Properties is included as a reduction to revenue from tenants on the consolidated statement of operations.

For purposes of the discussion and analysis of the segment results of operations during the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, the results of operations for the Transition Properties are included as part of our SHOP segment and excluded from our triple-net leased healthcare facilities segment.

The following table presents by segment Same Store properties NOI before and after adjusting for the Transition Properties as described above, to arrive at ‘Segment Same Store’ results.

Our MOB segment was not affected by the Transition Properties.

Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Increase (Decrease)

Revenue from tenants $ 10,004 $ (2,671) $ 7,333 $ 9,807 $ (2,299) $ 7,508 $ 197 $ (372) $ (175)

Property operating and maintenance 3,882 (3,128) 754 3,680 (3,040) 640 202 (88) 114

NOI $ 6,122 $ 457 $ 6,579 $ 6,127 $ 741 $ 6,868 $ (5) $ (284) $ (289)

Revenue from tenants $ 90,214 $ 2,671 $ 92,885 $ 102,552 $ 2,299 $ 104,851 $ (12,338) $ 372 $ (11,966)

Property operating and maintenance 69,868 3,128 72,996 77,143 3,040 80,183 (7,275) 88 (7,187)

NOI $ 20,346 $ (457) $ 19,889 $ 25,409 $ (741) $ 24,668 $ (5,063) $ 284 $ (4,779)

Net Operating Income

NOI is a non-GAAP financial measure used by us to evaluate the operating performance of our real estate portfolio.

NOI is equal to revenue from tenants less property operating and maintenance expenses.

NOI excludes all other financial statement amounts included in net income (loss) attributable to common stockholders.

We believe NOI provides useful and relevant information because it reflects only those income and expense items that are incurred at the property level and presents such items on an unlevered basis.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measure s included elsewhere in this Quarterly Report for additional disclosure and a reconciliation to our net income (loss) attributable to common stockholders.

Segment Results — Medical Office Buildings

The following table presents the components of NOI and the period to period change within our MOB segment for the six months ended June 30, 2021 and 2020:

Same Store (1)

Acquisitions (2)

Dispositions (3)

Segment Total

Six Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)

(Dollars in thousands) 2021 2020 $ 2021 2020 $ 2021 2020 $ 2021 2020 $

Revenue from tenants

$ 50,917 $ 51,059 $ (142) $ 1,886 $ 874 $ 1,012 $ — $ 227 $ (227) $ 52,803 $ 52,160 $ 643

Property operating and maintenance 15,177 14,858 319 445 146 299 — 36 (36) 15,622 15,040 582

NOI $ 35,740 $ 36,201 $ (461) $ 1,441 $ 728 $ 713 $ — $ 191 $ (191) $ 37,181 $ 37,120 $ 61

_______________

(1) Our MOB segment included 112 Same Store properties.

(2) Our MOB segment included 13 Acquisition properties.

(3) Our MOB segment included one Disposition properties.

(4) Our MOB segment included 125 properties.

Revenue from tenants is primarily derived from contractual rent received from tenants in our MOBs.

It also includes operating expense reimbursements which increase in proportion with the increase in property operating and maintenance expenses in our MOB segment.

Pursuant to many of our lease agreements in our MOBs, tenants are required to pay their pro rata share of property operating and maintenance expenses, which may be subject to expense exclusions and floors, in addition to base rent.

During the six months ended June 30, 2021, the MOB segment contributed a $0.1 million increase in NOI as compared to the six months ended June 30, 2020.

Of our 17 Acquisitions during the period from January 1, 2020 through June 30, 2021, 13 were MOBs which contributed a $0.7 million increase in NOI.

These increases were partially offset by our Same Store properties which contributed a $0.5 million decrease in NOI, and our one MOB Disposition property contributed a $0.2 million decrease in NOI.

Segment Results — Triple-Net Leased Healthcare Facilities

The following table presents the components of NOI and the period to period change within our triple-net leased healthcare facilities segment for the six months ended June 30, 2021 and 2020:

Same Store (1)

Acquisitions (2)

Dispositions (3)

Segment Total

Six Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)

(Dollars in thousands) 2021 2020 $ 2021 2020 $ 2021 2020 $ 2021 2020 $

Revenue from tenants

$ 7,333 $ 7,508 $ (175) $ — $ — $ — $ (197) $ 121 $ (318) $ 7,136 $ 7,629 $ (493)

Property operating and maintenance 754 640 114 — — — 795 367 428 1,549 1,007 542

$ 6,579 $ 6,868 $ (289) $ — $ — $ — $ (992) $ (246) $ (746) $ 5,587 $ 6,622 $ (1,035)

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(1) Our triple-net leased healthcare facilities segment included 14 Same Store properties.

(2) Our triple-net leased healthcare facilities segment included zero Acquisition properties.

(3) Our triple-net leased healthcare facilities segment included one Disposition properties.

(4) Our triple-net leased healthcare facilities segment included 14 properties.

Revenue from tenants for our triple-net leased healthcare facilities generally consist of fixed rental amounts (which may be subject to annual contractual escalations) received from our tenants in accordance with the applicable lease terms.

These revenues are contractual rent received from tenants that does not vary based on the underlying operating performance of the properties.

In addition, revenue from tenants also includes operating expense reimbursements in our triple-net leased healthcare facilities segment, which generally include reimbursement for property operating expenses that we pay on behalf of tenants in this segment.

However, pursuant to many of our lease agreements in this segment, tenants are generally directly responsible for all operating costs of the respective properties in addition to base rent.

Property operating and maintenance expenses should typically include minimal activity in our triple-net leased healthcare facilities segment except for real estate taxes and insurance.

Real estate taxes are typically paid directly by the tenants;

however, they may be paid by us and reimbursed by the tenants.

During the six months ended June 30, 2021, revenue from tenants in our triple-net leased healthcare facilities segment decreased $0.5 million compared to the six months ended June 30, 2020 due to our Disposition property.

Property operating and maintenance expenses of $1.5 million during the six months ended June 30, 2021 primarily relates to property taxes and operating expenses.

Segment Results — Seniors Housing - Operating Properties

The following table presents the components of NOI and the period to period change within our SHOP segment for the six months ended June 30, 2021 and 2020:

Same Store (1)

Acquisitions (2)

Dispositions (3)

Segment Total

Six Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)

(Dollars in thousands) 2021 2020 $ 2021 2020 $ 2021 2020 $ 2021 2020 $

Revenue from tenants

$ 92,885 $ 104,851 $ (11,966) $ 7,190 $ 5,257 $ 1,933 $ 4,582 $ 25,002 $ (20,420) $ 104,657 $ 135,110 $ (30,453)

Property operating and maintenance 72,996 80,183 (7,187) 5,663 4,230 1,433 5,085 21,051 (15,966) 83,744 105,464 (21,720)

$ 19,889 $ 24,668 $ (4,779) $ 1,527 $ 1,027 $ 500 $ (503) $ 3,951 $ (4,454) $ 20,913 $ 29,646 $ (8,733)

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(1) Our SHOP segment included 52 Same Store properties, including two land parcels.

(2) Our SHOP segment included four Acquisition properties.

(3) Our SHOP segment included 13 Disposition property.

(4) Our SHOP segment included 56 properties, including two land parcels.

Revenues from tenants within our SHOP segment are generated in connection with rent and services offered to residents in our SHOPs depending on the level of care required, as well as fees associated with other ancillary services.

Property operating

and maintenance expenses relates to the costs associated with staffing to provide care for the residents in our SHOPs, as well as food, marketing, real estate taxes, management fees paid to our third party operators, and costs associated with maintaining the physical site.

During the six months ended June 30, 2021, revenues from tenants decreased by $30.5 million in our SHOP segment as compared to the six months ended June 30, 2020, primarily driven by a $20.4 million decrease from our Disposition properties, and a decrease of $12.0 million from our Same Store properties, which includes our Transition Properties.

These decreases were partially offset by $1.9 million of additional revenue through our Acquisition properties.

For the six months ended June 30, 2021, an additional $0.8 million was generated through COVID-19 surcharges which we began billing residents for PPE during the third quarter of 2020.

We also offered $0.1 million of rent concessions related to COVID-19.

Revenues declined in our Same Store SHOPs primarily due to a decrease in occupancy as a result of COVID-19.

Regulatory and government-imposed restrictions and infectious disease protocols have hindered and continue to hinder our ability to accommodate and conduct in-person tours and process and attract new move-ins at our SHOPs which has affected and could continue to affect our ability to fill vacancies.

In addition, we also generate a portion of our SHOP revenue from skilled nursing facilities (including ancillary revenue from non-residents) at one of our same store SHOPs.

This revenue improved $0.5 million from $0.5 million during the six months ended June 30, 2020 to $1.0 million during the six months ended June 30, 2021 as a result of limited services we offered at our facilities during the COVID-19 pandemic to protect our residents and on-site staff.

Our two largest skilled nursing facilities in Lutz, Florida and Wellington, Florida were sold in December 2020 and May 2021, respectively.

These properties generated ancillary revenue during the six months ended June 30, 2021 and 2020 of $1.6 million and $5.7 million, respectively, which is included in our Disposition Properties.

As a result of these dispositions, we expect ancillary revenue to continue to decline in future quarters.

During the six months ended June 30, 2021, property operating and maintenance expenses decreased $21.7 million in our SHOP segment as compared to the six months ended June 30, 2020, primarily due to a decrease of $16.0 million from our Disposition properties and a decrease of $7.2 million from our Same Store properties, which includes our Transition Properties.

These decreases were partially offset by an increase of $1.4 million due to our Acquisition properties.

Our property operating and maintenance expenses for our Same Store properties decreased due to $5.1 million in CARES Act funds received which predominately related to our Same Store properties in 2021.

In addition, we had lower operating costs as a result of lower occupancy levels as well as some lessening of COVID-related costs as compared to 2020.

The $3.1 million of CARES Act funds received in 2020 were primarily due to our Lutz, Florida and Wellington, Florida properties which were sold in December 2020 and May 2021, respectively, and the impact of the receipt of these funds is reflected as part of our Disposition Properties in the table above.

There can be no assurance that the program will be extended or any further amounts received.

See the “ Overview - Management Update on the Impacts of the COVID-19 Pandemic ” section above for additional information on the risks and uncertainties associated with the COVID-19 pandemic and management’s actions taken in response.

Other Results of Operations

Impairment Charges

We recorded $7.0 million and $31.8 million of impairment charges for the six months ended June 30, 2021 and 2020, respectively.

See Note 3 — Real Estate Investments to our consolidated financial statements in this Quarterly Report on Form 10-Q for additional information on the impairment charges for the six months ended June 30, 2021.

The impairment charges for the six months ended June 30, 2021 relate to a $0.9 million impairment on our Wellington property, which was recorded to adjust the carrying value to its fair value as determined by its PSA, and a $6.1 million impairment related to a NNN property located in Sun City, Arizona.

During the second quarter of 2021, we identified the Sun City, Arizona property for potential disposal.

As a result of changes to our expected holding period, we determined that projected cash flows did not recover the carrying value of the properties on an undiscounted basis over their intended holding periods.

During July 2021, we entered into a non-binding letter of intent to sell the property and as a result, we determined that the fair market value of the property had declined and recorded an impairment charge of $6.1 million during the six months ended June 30, 2021,

The impairment charges for the six months ended June 30, 2020 primarily related to assets held for sale during that period which had carrying values in excess of their fair values.

Operating Fees to Related Parties

Operating fees to related parties decreased $0.2 million to $11.8 million for the six months ended June 30, 2021 from $12.0 million for the six months ended June 30, 2020.

Our Advisor and Property Manager are paid for asset management and property management services for managing our properties on a day-to-day basis (see — Results of Operations — Comparison of the Three Months Ended June 30, 2021 and 2020 for additional information).

Asset management fees were $10.1 million and $10.0 million for the six months ended June 30, 2021 and 2019, respectively.

Property management fees decreased $0.2 million to $1.8 million during the six months ended June 30, 2021 from $2.0 million for the six months ended June 30, 2020.

See Note 9 — Related Party Transactions and Arrangements to our consolidated financial statements in this Quarterly Report on Form 10-Q which provides detail on our fees and expense reimbursements.

Acquisition and Transaction Related Expenses

Acquisition and transaction related expenses were $0.3 million for the six months ended June 30, 2021 and $0.5 million for the six months ended June 30, 2020.

The expenses in both periods relate to indirect costs related to acquisitions.

General and Administrative Expenses

General and administrative expenses decreased $2.9 million to $8.6 million for the six months ended June 30, 2021 compared to $11.5 million for the six months ended June 30, 2020.

Both periods include $5.3 million for the six months ended June 30, 2021 and 2020, incurred in expense reimbursements and distributions on partnership units of the OP designated as Class B Units to related parties.

Class B Units will not receive cash distributions, and no further expense will be incurred, for so long as we pay distributions to our common stockholders in stock instead of cash.

The decrease was primarily due to the reduction of expense related to 2020 bonus awards made by the Advisor to employees of the Advisor or its affiliates of $1.0 million as well as the decrease in distributions on Class B Units of $0.1 million, lower auditing expenses of $0.5 million, lower printing expenses of $0.5 million, lower transfer agent expenses of $0.3 million, and lower miscellaneous costs of $0.5 million in the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

For additional details on the 2020 bonus awards, see Note 9 — Related Party Transactions and Agreements to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

Depreciation and Amortization Expenses

Depreciation and amortization expense decreased $0.8 million to $39.6 million for the six months ended June 30, 2021 from $40.4 million for the six months ended June 30, 2020.

The decrease was due to a decrease in Same Store depreciation and amortization of $0.7 million primarily due to several intangible assets becoming fully amortized and a decrease due to dispositions of $1.0 million, partially offset by an increase due to our acquisitions of approximately $0.9 million.

Gain on Sale of Real Estate Investments

During the six months ended June 30, 2021, we transferred the remaining four SHOPs in Michigan to the buyer at a second closing in the first quarter of 2021 and as a result, we recorded a loss on sale of $0.2 million.

The first closing of the transaction occurred during the year ended December 31, 2020 when the purchase price for all 11 properties subject to the transaction was actually received from the buyer.

We also sold our skilled nursing facility in Wellington, Florida and our development property in Jupiter, Florida, which resulted in gains on sale of $0.1 million and $2.4 million, respectively.

These gains are included in the consolidated statement of operations for the six months ended June 30, 2021.

During the six months ended June 30, 2020, we sold one MOB property which resulted in a gain on sale of $2.3 million.

The property sold for a contract price of $8.6 million.

Interest Expense

Interest expense decreased $1.6 million to $24.2 million for the six months ended June 30, 2021 from $25.8 million for the six months ended June 30, 2020.

As of June 30, 2021, we had total borrowings of $1.1 billion, at a weighted average interest rate of 3.59% per year.

As of June 30, 2020 we had total borrowings of $1.3 billion, at a weighted average interest rate of 3.79% per year.

Our interest expense in future periods will vary based on our level of future borrowings and the cost of borrowings, among other factors.

Interest and Other Income

Interest and other income includes income from our investment securities and interest income earned on cash and cash equivalents held during the period.

Interest and other income was approximately $56,000 for the six months ended June 30, 2021 and $41,000 for the six months ended June 30, 2020.

Gain (Loss) on Non-Designated Derivatives

Gain (loss) on non-designated derivative instruments for the six months ended June 30, 2021 and 2020 related to interest rate caps that are designed to protect us from adverse interest rate changes in connection with the Fannie Mae Master Credit Facilities, which have floating interest rates.

Income Tax Benefit (expense)

Income taxes generally relate to our SHOPs, which are leased by our TRS.

We recorded an income tax expense of $0.1 million for the six months ended June 30, 2021.

We did not have a material income tax expense or benefit during the six months ended June 30, 2020.

Since that time, our TRS’s operating performance has not significantly improved and thus we have retained a 100% valuation allowance as of June 30, 2021.

Net (Income)/Loss Attributable to Non-Controlling Interests

Net (income)/loss attributable to non-controlling interests was approximately $(0.1) million and approximately $0.2 million for the six months ended June 30, 2021 and 2020, which represents the portion of our net income that is related to the OP Units and other non-controlling interest holders in our subsidiaries that own certain properties.

Cash Flows from Operating Activities

During the three months ended March 31, 2021, net cash provided by operating activities was $14.0 million.

During the six months ended June 30, 2021, net cash provided by operating activities was $17.6 million.

The level of cash flows used in or provided by operating activities is affected by, among other things, the number of properties owned, the performance of those properties, the timing of interest payments and the amount of borrowings outstanding during the period, as well as the receipt of scheduled rent payments and the level of operating expenses.

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These cash inflows were partially offset a decrease in accounts payable and accrued expenses of $5.4 million related to timing of payments for real estate taxes, property operating expenses and professional and legal fees and a net increase in unbilled receivables recorded in accordance with straight-line basis accounting of $0.5 million.

During the three months ended March 31, 2020, net cash provided by operating activities was $19.0 million.

During the six months ended June 30, 2020, net cash provided by operating activities was $31.2 million.

Cash inflows include non-cash items of $14.3 million (net loss of $24.1 million adjusted for non-cash items including depreciation and amortization of tangible and identifiable intangible real estate assets, deferred financing costs and mortgage premiums and discounts, bad debt expense, equity-based compensation, gain on non-designated derivatives and impairment charges), an increase in accounts payable and accrued expenses of $4.3 million related to higher accrued real estate taxes, property operating expenses and professional and legal fees and a decrease in prepaid expenses and other assets of $1.3 million.

Cash inflows include non-cash items of $28.6 million (net loss of $46.2 million adjusted for non-cash items including depreciation and amortization of tangible and identifiable intangible real estate assets, deferred financing costs and mortgage premiums and discounts, bad debt expense, equity-based compensation, gain on non-designated derivatives and impairment charges), an increase in accounts payable and accrued expenses of $1.7 million related to higher accrued real estate taxes, property operating expenses and professional and

legal fees and a decrease in prepaid expenses and other assets of $3.8 million.

These cash inflows were partially offset by a net increase in unbilled receivables recorded in accordance with straight-line basis accounting of $1.7 million.

Cash Flows from Investing Activities

Net cash used in investing activities during the three months ended March 31, 2021 was $10.9 million.

Net cash used in investing activities during the six months ended June 30, 2021 was $43.1 million.

The cash used in investing activities included $44.2 million for the acquisition of one property and $7.2 million in capital expenditures.

Net cash used in investing activities during the three months ended March 31, 2020 was $93.8 million.

Net cash used in investing activities during the six months ended June 30, 2020 was $97.5 million.

The cash used in investing activities included $91.0 million for the acquisition of eight properties and $13.8 million in capital expenditures.

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Cash Flows from Financing Activities

Net cash used in financing activities of $1.3 million during the three months ended March 31, 2021 related to cash outflows of payments of deferred financing costs of $0.0 million and dividends paid to preferred stockholders of $0.7 million, payments for derivative instruments of $0.1 million and principal payments on mortgages of $0.3 million.

Net cash used in financing activities of $69.8 million during the three months ended March 31, 2020 related to proceeds of $95.0 million from our Revolving Credit Facility.

Net cash used in financing activities of $79.8 million during the six months ended June 30, 2021 related to cash outflows of payments of deferred financing costs of $0.1 million and dividends paid to preferred stockholders of $1.5 million, payments for derivative instruments of $0.1 million and principal payments on mortgages of $0.6 million.

Net cash used in financing activities of $54.4 million during the six months ended June 30, 2020 related proceeds of $95.0 million from our Revolving Credit Facility and $0.0 million from our Term Loan.

These cash inflows were partially offset by distributions to stockholders of $27.0 million, common stock repurchases of $10.5 million, payments of deferred financing costs of $1.2 million and dividends paid to preferred stockholders of $0.9 million.

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In addition to the discussion below, please see the “Overview — Management Update on the Impacts of the COVID-19 Pandemic” section above for additional information on the risks and uncertainties associated with the COVID-19 pandemic and management’s actions taken in response.

As of March 31, 2021, we had $74.1 million of cash and cash equivalents.

As of June 30, 2021, we had $46.7 million of cash and cash equivalents.

Our ability to use this cash on hand is restricted.

Under our amended Credit Facility, we are required to maintain a combination of cash, cash equivalents and availability for future borrowings under our revolving credit facility under our Credit Facility (our “Revolving Credit Facility”) totaling at least $50.0 million.

As of March 31, 2021, $42.8 million was available for future borrowings under our Revolving Credit Facility.

Certain other restrictions and conditions described below will no longer apply starting in the “Commencement Quarter” which is a quarter in which we make an election and, as of the day prior to the commencement of the applicable quarter we have 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 us during the applicable quarter, and our ratio of consolidated total indebtedness to consolidated total asset value (expressed as a percentage) is less than 62.5%.

As of March 31, 2021, our ratio of consolidated total indebtedness to consolidated total asset value for these purposes was 63.0%.

The Commencement Quarter may be no earlier than the fiscal quarter ending June 30, 2021.

We did not, however, satisfy the conditions to make the quarter ending June 30, 2021 the Commencement Quarter.

There can be no assurance as to if, or when, we will be able to satisfy these conditions.

Under our Credit Facility, we are required to maintain a combination of cash, cash equivalents and availability for future borrowings under our Revolving Credit Facility totaling at least $50.0 million.

As of June 30, 2021, $202.0 million was available for future borrowings under our Revolving Credit Facility.

Certain other restrictions and conditions described below will apply until the “Commencement Quarter” which is a quarter in which we make an election and, as of the day prior to the commencement of the applicable quarter we have 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 us during the applicable quarter, and our ratio of consolidated total indebtedness to consolidated total asset value (expressed as a percentage) is less than 62.5%.

The fiscal quarter ended June 30, 2021 was the first quarter that could be the Commencement Quarter.

We satisfied the conditions to elect to make the quarter ending September 30, 2021 the Commencement Quarter but did not, however, make the election to do so.

There can be no assurance as to if, or when, we will elect to do so, including to the extent we may be unable to satisfy these conditions in future periods.

We may not pay distributions to holders of common stock in cash or any other cash distributions (including repurchases of shares of our common stock) on our common stock until the Commencement Quarter.

Moreover, beginning in the Commencement Quarter, we may only pay cash distributions provided that 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.

Our amended Credit Facility also restricts our sources of liquidity.

Until the first day of the Commencement Quarter, we must use all of 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.

Our Credit Facility also restricts our sources of liquidity.

Until the first day of the Commencement Quarter, we must use all of the net cash proceeds from any capital event (such as an asset sale, financing or equity issuance) to repay amounts outstanding under the Revolving Credit Facility.

We may reborrow any amounts so repaid if all relevant conditions are met, including sufficient availability for future borrowings.

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The availability for future borrowings under the Credit Facility is calculated using the adjusted net operating income of the real estate assets comprising the borrowing base, and availability has been, and may continue to be, adversely affected by the decreases in cash rent collected from our tenants and income from our operators that have resulted from the effects of the COVID-19 pandemic and may persist for some time.

See “Item 1A.

Risk Factors to our Annual Report on Form 10-K for the year ended December 31, 2020.

Our Credit Facility restricts our ability to use cash that would otherwise be available to us, and there can be no assurance our available liquidity will be sufficient to meet our capital needs.”

We expect to fund our future short-term operating liquidity requirements, including dividends to holders of Series A Preferred Stock, through a combination of current cash on hand, net cash provided by our property operations and proceeds from the Revolving Credit Facility, which may include amounts reborrowed following the repayments we were required to make with the net proceeds from our dispositions and Series A Preferred Stock offering completed in May 2021.

Our principal demands for cash are for acquisitions, capital expenditures, the payment of our operating and administrative expenses, debt service obligations (including principal repayment), and dividends to holders of our Series A Preferred Stock.

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Riley under the Preferred Stock Equity Line, and B.

We did not sell any shares under the Preferred Stock Equity Line during the quarter ended March 31, 2021 or year ended December 31, 2020.

Riley is obligated to make purchases from time to time 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.

We did not sell any shares under the Preferred Stock Equity Line during the six months ended June 30, 2021 or year ended December 31, 2020.

Series A Preferred Stock Add-On Offering

On May 11, 2021, we completed an underwritten public offering of 2,352,144 shares (which includes 152,144 shares issued and sold pursuant to the underwriters’ exercise of their option to purchase additional shares) of its Series A Preferred Stock for net proceeds of $56.7 million after deducting the underwriters’ discount and a structuring fee aggregating to $2.1 million.

Pursuant to the terms under the Credit Facility amendment all proceeds were used to prepay amounts outstanding under the Credit Facility.

As of March 31, 2021, our total debt leverage ratio (total debt divided by total gross asset value) was approximately 44.3%.

On May 11, 2021, we completed an underwritten public offering of 2,352,144 shares (which includes 152,144 shares issued and sold pursuant to the underwriters’ exercise of their option to purchase additional shares) of our Series A Preferred Stock for net proceeds of $56.2 million after deducting the underwriters’ discount and a structuring fee aggregating to $2.5 million.

Pursuant to the terms of the Credit Facility, all proceeds were used to repay amounts outstanding under the Credit Facility.

Subject to the terms and conditions set forth in the Credit Facility, we may then draw on the Credit Facility to borrow any amounts so repaid.

As of June 30, 2021, our total debt leverage ratio (total debt divided by total gross asset value) was approximately 41.1%.

Net debt totaled $1.0 billion, which represents gross debt ($1.1 billion) less cash and cash equivalents ($46.7 million).

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Impairment charges are already reflected within gross asset value.

As of March 31, 2021, we had total gross borrowings of $1.2 billion, at a weighted average interest rate of 3.5%.

As of June 30, 2021, we had total gross borrowings of $1.1 billion, at a weighted average interest rate of 3.6%.

As of December 31, 2020, we had total gross borrowings of $1.2 billion at a weighted average interest rate of 3.6%.

As of March 31, 2021, the carrying value of our real estate investments, at cost was $2.6 billion, with $0.9 billion of this asset value pledged as collateral for mortgage notes payable, $0.6 billion of this asset value pledged to secure advances under the Fannie Mae Master Credit Facilities and $0.9 billion of this asset value comprising the borrowing base of the Credit Facility.

As of June 30, 2021, the carrying value of our real estate investments, at cost was $2.6 billion, with $0.9 billion of this asset value pledged as collateral for mortgage notes payable, $0.6 billion of this asset value pledged to secure advances under the Fannie Mae Master Credit Facilities and $0.9 billion of this asset value 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, as applicable unless 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.

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These actions may require us to add some or all of our unencumbered properties to the borrowing base under our Credit Facility.

Unencumbered real estate investments, at cost as of March 31, 2021 was $200.0 million.

Unencumbered real estate investments, at cost as of June 30, 2021 was $201.7 million.

There can be no assurance as to the amount of liquidity we would be able to generate from adding any of the unencumbered assets we own to the borrowing base of our Credit Facility.

Mortgage Notes Payable

As of March 31, 2021, we had $550.1 million in mortgage notes payable outstanding.

As of June 30, 2021, we had $549.7 million in mortgage notes payable outstanding.

Future scheduled principal payments on our mortgage notes payable for the remainder of 2021 are $0.6 million.

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In March 2020, we borrowed an additional $95.0 million under the Revolving Credit Facility a portion of which was used for general corporate purposes.

Subsequently, we have not borrowed additional amount under the Revolving Credit Facility.

We repaid $173.7 million of amounts outstanding under our revolving credit facility during the three months ended June 30, 2021, derived from all $88.0 million of net proceeds of our dispositions of the Wellington, Florida and Jupiter, Florida properties, all $56.7 million of proceeds from our May 2021 Series A Preferred Stock offering.

remainder of the repayment was funded with cash on hand.

After these repayments, we borrowed $40.0 million, all of which was used to fund subsequent acquisitions.

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.

As of March 31, 2021, $323.7 million was outstanding under the Credit Facility and the unused borrowing availability under the Credit Facility was $42.8 million.

As of June 30, 2021, $190.0 million was outstanding under the Credit Facility and the unused borrowing availability under the Credit Facility was $202.0 million.

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.

Both of these amounts are calculated using the adjusted net operating income of the real estate assets comprising the borrowing base, and, therefore, availability under our Credit Facility has been adversely affected by the decreases in cash rent collected from our tenants and income from our operators due to the effects of the COVID-19 pandemic, and may continue to be adversely affected.

As of March 31, 2021, $150.0 million was outstanding under our Term Loan, and $173.7 million was outstanding under the Revolving Credit Facility.

See also the discussion above regarding the need to maintain certain levels of liquidity until the Commencement Quarter.

As of June 30, 2021, $150.0 million was outstanding under our Term Loan, and $40.0 million was outstanding under the Revolving Credit Facility.

The equity interests and related rights in our wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility are pledged for the benefit of the lenders thereunder.

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The applicable margin used to determine the interest rate under both the Term Loan and Revolving Credit Facility components of the Credit Facility varies based on our leverage.

As of March 31, 2021, the Revolving Credit Facility and the Term Loan had an effective interest rate per annum equal to 3.21% and 4.95%, respectively.

The Credit Facility prohibits us from exceeding a maximum ratio of consolidated total indebtedness to consolidated total asset value, and requires us to maintain a minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges on a quarterly basis and a minimum consolidated tangible net

As of March 31, 2021, we were in compliance with the financial covenants under the Credit Facility.

As of June 30, 2021, the Revolving Credit Facility and the Term Loan had an effective interest rate per annum equal to 3.58% and 5.01%, respectively.

As of June 30, 2021, we were in compliance with the financial covenants under the Credit Facility.

Based upon our current expectations, we believe our operating results during the next 12 months will allow us to comply with these covenants.

Fannie Mae Master Credit Facilities

As of March 31, 2021, $355.2 million was outstanding under the Fannie Mae Master Credit Facilities.

As of June 30, 2021, $355.2 million was outstanding under the Fannie Mae Master Credit Facilities.

We may request future advances under the Fannie Mae Master Credit Facilities by adding eligible properties to the collateral pool or by borrowing-up against the increased value of the collateral pool, subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests.

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Capital Expenditures

During the first three months of 2021, our capital expenditures were $4.0 million, of which $0.5 million related our MOB segment and $3.5 million related to our SHOP segment.

During the six months ended June 30, 2021, our capital expenditures were $7.2 million, of which $1.6 million related our MOB segment, $0.1 million related to our NNN segment, and $5.5 million related to our SHOP segment.

All other capital expenditures were typical in nature for the other properties in our portfolio.

We anticipate this rate of capital expenditures for the MOB and SHOP segments throughout 2021, however, given the recent economic uncertainty created by the COVID-19 global pandemic will continue to impact our decisions on the amount and timing of future capital expenditures.

Acquisitions — Three Months Ended March 31, 2021

During the three months ended March 31, 2021, we completed the acquisitions of one multi-tenant MOB for a contract purchase price of $6.6 million.

This acquisition was funded with proceeds from cash on hand.

Acquisitions — Subsequent to March 31, 2021

We did not complete any acquisitions subsequent to March 31, 2021.

We have signed two definitive purchase and sale agreements PSAs to acquire a total of two MOBs for an aggregate contract purchase price of approximately $10.1 million and we have signed one non-binding letter of intent (“LOI”) for a portfolio of MOBs for an aggregate contract purchase price of approximately $19.7 million.

We anticipate using cash on hand to fund the consideration required to complete these acquisitions.

The PSAs are subject to conditions and the LOI is non-binding.

Acquisitions — Six Months Ended June 30, 2021

During the six months ended June 30, 2021, we completed the acquisition of three multi-tenant MOBs and five single-tenant MOBs for an aggregate contract purchase price of $43.5 million.

This includes one multi-tenant MOB for a contract purchase price of $6.6 million that was acquired in the first quarter of 2021.

These acquisitions were funded with cash on hand and borrowings from our Revolving Credit Facility.

Acquisitions — Subsequent to June 30, 2021

Subsequent to June 30, 2021, we acquired two MOBs for an aggregate contract purchase price of approximately $10.7 million, which was funded with cash on hand and borrowings from our Revolving Credit Facility.

We have signed three definitive purchase and sale agreements (“PSAs”) to acquire a total of three MOBs for an aggregate contract purchase price of $87.6 million, and we have signed three non-binding LOIs to acquire two single-tenant and one multi-tenant MOB properties for an aggregate purchase price of $26.0 million.

We anticipate using cash on hand and borrowings from our Revolving Credit Facility to fund the consideration required to complete these acquisitions.

The PSAs are subject to conditions and the LOIs are non-binding.

There can be no assurance we will complete any of these acquisitions, or any future acquisitions or other investments, on a timely basis or on acceptable terms and conditions, if at all.

Disposition — Three Months Ended March 31, 2021

During the three months ended March 31, 2021, four Michigan SHOPs were transferred to their buyer pursuant to their sale in November, 2020, which resulted in a loss on sale of $0.2 million.

There were no assets classified as held for sale as of March 31, 2021.

Dispositions — Six Months Ended June 30, 2021

During the three months ended March 31, 2021, four SHOPs in Michigan were transferred to their buyer, which resulted in a loss on sale of $0.2 million.

Additionally, we sold our skilled nursing facility in Wellington, Florida and our development property in Jupiter, Florida in the three months ended June 30, 2021, which resulted in gains on sale of $0.1 million and $2.4 million, respectively.

The $88.0 million of net proceeds from these dispositions were used to repay amounts outstanding under the Revolving Credit Facility.

At the closing of the sale of the Jupiter, Florida property, $0.9 million of the sale price was placed into escrow pending resolution of a lien related to the property.

With respect to the sale of the Michigan SHOPs, in November 2020, we 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.

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Following the sale of the SHOP in Lutz, Florida, all $17.6 million of the net proceeds were used to repay amounts outstanding under the Credit Facility.

Dispositions — Subsequent to March 31, 2021

We had previously entered into a definitive PSA to sell the property in Jupiter Florida for $65.0 million and a skilled nursing facility in Wellington, Florida for $33.0 million.

On April 30, 2021, we amended the PSA which reduced the sales price of the skilled nursing facility in Wellington, Florida to $30.7 million.

The sales of these assets are subject to conditions, and, due to the persistence of the COVID-19 pandemic and other factors beyond our control, there can be no assurance that we will be able to meet these conditions and that these dispositions will be completed on their contemplated terms, or at all.

With respect to the skilled nursing facility in Wellington, Florida, closing may not occur unless, among other conditions, certain occupancy and revenue levels have been maintained at the property for a period of time.

The property in Jupiter, Florida is not currently encumbered by any mortgage debt or part of the borrowing base under our Credit Facility.

The skilled nursing facility in Wellington Florida is part of the borrowing base under our Credit Facility.

Pursuant to the terms of our amended Credit Facility,

the net cash proceeds from any completed dispositions must be used to prepay amounts outstanding under the Revolving Credit Facility and will therefore not be available to us for any other purpose.

Dispositions — Subsequent to June 30, 2021

Subsequent to June 30, 2021 we did not dispose of any properties.

We have entered into one letter of intent (“LOI”) to dispose of one NNN property in Sun City, Arizona for $9.5 million which is not part of the borrowing base under the Credit Facility or encumbered by a mortgage.

The LOI is non-binding and there can be no assurance this, or any, disposition will be completed on the contemplated terms, or at all.

Pursuant to the terms of our amended Credit Facility, the net cash proceeds from any completed dispositions must be used to prepay amounts outstanding under the Revolving Credit Facility and will therefore not be available to us for any other purpose.

We may reborrow any amounts so repaid if all relevant conditions are met, including sufficient availability for future borrowings.

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Share Repurchase Program

Our Board has adopted the SRP, which enables our common stockholders to sell their shares of common stock to us under limited circumstances.

At the time a common stockholder requests a repurchase, we may, subject to certain conditions, repurchase the shares presented for repurchase for cash.

There are limits on the number of shares we may repurchase under this program during any calendar year.

We are only authorized to repurchase shares using the proceeds secured from our DRIP in any given period, although the Board has the power, in its sole discretion, to determine the number of shares repurchased during any period as well as the amount of funds to be used for that purpose.

Under the currently effective amended and restated SRP, subject to certain conditions, only repurchase requests made following the death or qualifying disability of stockholders that purchased shares of our common stock or received their shares from us (directly or indirectly) through one or more non-cash transactions would be 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 amended Credit Facility restricts the Company from repurchasing shares until no earlier than the quarter ending June 30, 2021.

In light of this provision, the Board suspended repurchases under the SRP effective August 14, 2020.

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.

The Credit Facility we entered into in the third quarter of 2020 restricts us from repurchasing shares until the end of the Commencement Quarter.

In light of this provision, the Board suspended repurchases to us under the SRP effective August 14, 2020 which, when active, enables our common stockholders to sell their shares under limited circumstances.

The Board 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.

There can be no assurance, however, as to whether our SRP will be reactivated or on what terms.

Beginning in the Commencement Quarter, we will be permitted to repurchase up to $50.0 million of shares of our common stock (including amounts previously repurchased during the term of the Revolving Credit Facility) if, after giving effect to the repurchases, we maintain cash and cash equivalents of at least $30.0 million and our ratio of consolidated total indebtedness to consolidated total asset value (expressed as a percentage) is less than 55.0%.

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While NOI is a property-level measure, MFFO is based on our total performance as a company and therefore reflects the impact of other items not specifically associated with NOI such as, interest expense, general and administrative expenses and operating fees to related parties.

Additionally, NOI as defined here, includes straight-line rent which is excluded from MFFO.

Additionally, in calculating NOI, adjustments for straight-line rent are not eliminated as they are in MFFO.

A description of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measure, which is net income, are provided below:

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We also exclude other non-operating items in calculating MFFO, such as transaction-related fees and expenses and capitalized interest.

We believe that, because MFFO excludes costs that we consider more reflective of acquisition activities and other non-operating items, MFFO can provide, on a going-forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance once our portfolio is stabilized.

Our Modified FFO (as defined in our Credit Facility) is similar but not identical to MFFO as discussed in this Quarterly Report on Form 10-Q.

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In calculating our FFO and MFFO, we exclude the impact of amounts attributable to our non-controlling interests.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2021 2020 2021 2020

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Gain on sale of real estate investment

(2,456) — (2,284) (2,306)

Adjustments for non-controlling interests (2)

(105) (157) (201) (323)

FFO (as defined by NAREIT) attributable to stockholders

6,573 10,640 14,985 21,324

Acquisition and transaction related 123 178 255 505

(Accretion) amortization of market lease and other intangibles, net

(5) (138) (39) (120)

Straight-line rent adjustments

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Straight-line rent (rent deferral agreements) (2)

— 368 (234) 368

Amortization of mortgage premiums and discounts, net

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Deferred tax asset allowance (4)

(686) — (1,026) —

Adjustments for non-controlling interests (3)

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(1) Net of non-real estate depreciation and amortization.

(2) Represents the amount of deferred rent pursuant to lease negotiations which qualify for FASB relief for which rent was deferred but not reduced.

These amounts are included in the straight-line rent receivable on our consolidated balance sheet but are considered to be earned revenue attributed to the current period for purposes of MFFO as they are expected to be collected.

(2) Represents amounts related to deferred rent pursuant to lease negotiations which qualify for FASB relief for which rent was deferred but not reduced.

These amounts are included in the straight-line rent receivable on our balance sheet but are considered to be earned revenue attributed to the current period for rent that was deferred, for purposes of MFFO, as they are expected to be collected.

Accordingly, when the deferred amounts are collected, the amounts reduce MFFO.

(3) Represents the portion of the adjustments allocable to non-controlling interest.

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NOI is a non-GAAP financial measure used by us to evaluate the operating performance of our real estate portfolio.

NOI is equal to revenue from tenants less property operating and maintenance.

NOI is equal to revenue from tenants less property operating and maintenance expenses.

NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss).

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NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to pay distributions.

The following table reflects the items deducted from or added to net loss attributable to stockholders in our calculation of NOI for the three months ended March 31, 2021:

The following table reflects the items deducted from or added to net loss attributable to stockholders in our calculation of NOI for the three months ended June 30, 2021:

(In thousands) Same Store Acquisitions Dispositions Non-Property Specific Total

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(2) — — (2) (4)

Loss on sale of real estate investments — — 172 — 172

Gains on sale of real estate investments — — (2,456) — (2,456)

Gain on non-designated derivative instruments

— — — (14) (14)

Income tax (benefit) expense

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NOI $ 28,571 $ 1,480 $ (451) $ — $ 29,600

The following table reflects the items deducted from or added to net income (loss) attributable to stockholders in our calculation of Same Store, Acquisitions and Dispositions NOI for the three months ended March 31, 2020:

(In thousands) Same Store Acquisitions Dispositions Non-Property Specific Total

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(5) — — (31) (36)

Gain on sale of real estate investments

— — (2,306) — (2,306)

Loss on non-designated derivative instruments

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NOI $ 31,843 $ 1,086 $ 1,947 $ — $ 34,876

The following table reflects the items deducted from or added to net income (loss) attributable to stockholders in our calculation of Same Store and Dispositions NOI for the six months ended June 30, 2021:

(In thousands) Same Store Acquisitions Dispositions Non-Property Specific Total

Net income (loss) attributable to common stockholders (in accordance with GAAP)

$ 19,030 $ 785 $ (1,335) $ (46,695) $ (28,215)

Impairment charges

6,081 — 878 — 6,959

Operating fees to related parties

— — — 11,806 11,806

Acquisition and transaction related

3 — — 252 255

General and administrative

55 — — 8,540 8,595

Depreciation and amortization

36,175 2,183 1,246 — 39,604

Interest expense

880 — — 23,361 24,241

Interest and other income

(16) — — (40) (56)

Gains on sale of real estate investments — — (2,284) — (2,284)

Loss on non-designated derivative instruments

— — — (1) (1)

Income tax (benefit) expense

Net income (loss) attributable to non-controlling interests

— — — 102 102

Preferred Stock dividends

— — — 2,568 2,568

NOI $ 62,208 $ 2,968 $ (1,495) $ — $ 63,681

(In thousands) Same Store Acquisition Dispositions Non-Property Specific Total

Net income (loss) attributable to common stockholders (in accordance with GAAP)

$ 39,766 $ 505 $ (38,019) $ (49,807) $ (47,555)

Impairment charges

(10,137) — 41,968 — 31,831

Operating fees to related parties

— — — 11,985 11,985

Acquisition and transaction related

— — — 505 505

General and administrative

53 — — 11,407 11,460

Depreciation and amortization

36,875 1,250 2,253 — 40,378

Interest expense 1,183 — — 24,654 25,837

Interest and other income (3) — — (38) (41)

Gain on sale of real estate investment — — (2,306) — (2,306)

Loss on non-designated derivative instruments

— — — (24) (24)

Income tax (benefit) expense

Net income (loss) attributable to non-controlling interests

— — — (174) (174)

Preferred Stock dividends

— — — 1,492 1,492

NOI $ 67,737 $ 1,755 $ 3,896 $ — $ 73,388

Distributions and Dividends

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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 June 29, 2020, the Board approved a change in our common stock distribution policy whereby we would no longer declare distributions based on daily record dates.

Instead, any future distributions authorized by the Board on shares of our common stock were to be paid on a monthly basis in arrears based on a single record date during the applicable month.

As noted herein under our amended Credit Facility we 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.

On June 29, 2020, the Board approved a change in our common stock distribution policy changing from daily record dates to a single record date during the applicable month.

Under our Credit Facility we 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 cash dividends on the Series A Preferred Stock or any other preferred stock we may issue and paying any cash distributions necessary to maintain our status as a REIT.

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Until four full fiscal quarters have elapsed after the commencement of Commencement Quarter, the aggregate amount of permitted distributions and Modified FFO will be determined by using only the fiscal quarters that have elapsed from and after the Commencement Quarter and annualizing those amounts.

On August 13, 2020, the Board changed our common stock distribution policy in order to preserve our liquidity and maintain additional financial flexibility in light of the continued COVID-19 pandemic and to comply with the amended Credit Facility described above.

Under the new policy, distributions authorized by the Board on shares of our common stock, if and when declared, are now paid on a quarterly basis in arrears in shares of our common stock valued at the Estimated Per-Share NAV in effect on the applicable date, based on a single record date to be specified at the beginning of each quarter.

In each of October 2020 and January 2021, we declared and paid stock dividends equal to 0.01349 shares of common stock on each share of outstanding common stock , and, in April 2021, we declared and paid a stock dividend equal to 0.01466 shares of common stock on each share of outstanding common stock.

In each of October 2020 and January 2021, we declared and paid stock dividends equal to 0.01349 shares of common stock on each share of outstanding common stock , and, in April 2021 and July 2021, we declared and paid a stock dividend equal to 0.01466 shares of common stock on each share of outstanding common stock.

The amounts of these stock dividends were based on our prior cash distribution rate of $0.85 per share per annum and the then applicable Estimated Per-Share NAV.

We did not pay any cash dividends on our common stock during the first quarter of 2021.

We did not pay any cash dividends on our common stock during the six months ended June 30, 2021.

See “— Overview” for additional information on the impact of the stock dividends.

Subject to the restrictions in our amended Credit Facility, the amount of dividends and other distributions payable to our stockholders is determined by the Board and is dependent on a number of factors, including funds available for distribution, our financial condition, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986 (the “Code”).

Subject to the restrictions in our Credit Facility, the amount of dividends and other distributions payable to our stockholders is determined by the Board and is dependent on a number of factors, including funds available for distribution, our financial condition, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986 (the “Code”).

Distribution payments are dependent on the availability of funds.

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The following table shows the sources for the payment of distributions to preferred stockholders, including distributions on unvested restricted shares and OP Units, but excluding distributions related to Class B Units as these distributions are recorded as an expense in our consolidated statement of operations and comprehensive loss, for the periods indicated:

March 31, 2021

(In thousands) Percentage of Distributions

Three Months Ended Year-To-Date

March 31, 2021 June 30, 2021 June 30, 2021

(In thousands) Percentage of Distributions Percentage of Distributions Percentage of Distributions

Distributions:

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Dividends to preferred stockholders

742 742 1,484

Distributions on OP Units

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Cash flows provided by operations (in accordance with GAAP)

$ 13,959 $ 3,644 $ 17,603

Net loss attributable to stockholders (in accordance with GAAP)

$ (12,230) $ (3,755) $ (15,985)

(1) Assumes the use of available cash flow from operations before any other sources.

For the three months ended March 31, 2021, cash flows provided by operations were $14.0 million.

For the six months ended June 30, 2021, cash flows provided by operations were $17.6 million.

We had not historically generated sufficient cash flow from operations to fund the payment of dividends and other distributions at the current rate prior to switching from paying cash dividends to stock dividends on our common stock.

As shown in the table above, we funded distributions with cash flows provided by operations, proceeds received from common stock issued under our DRIP and available cash on hand, comprised of proceeds from financings and dispositions.

As shown in the table above, we funded dividends to holders of Series A Preferred Stock with cash flows provided by operations.

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We may still pay any cash distributions necessary to maintain our status as a REIT and 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 under the Credit Facility.

The amendment provided that the covenants restricting payment of distributions to a threshold based on Modified FFO and requiring maintenance of a minimum ratio of consolidated total indebtedness to consolidated total asset value and a minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges did not apply for the fiscal quarter ended June 30, 2020.

In addition, the lenders waived any defaults or event of defaults under those covenants that may have occurred during the fiscal quarter ended June 30, 2020 as well as any additional default or event of default resulting therefrom prior to August 10, 2020.

There can be no assurance our lenders will consent to any amendments or waivers that may become necessary to comply with our Credit Facility in the future.

Loan Obligations

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Our loan agreements require us to comply with specific reporting covenants.

As of March 31, 2021, we were in compliance with the financial and reporting covenants under our loan agreements.

Under our amended Credit Facility, until the first day of the Commencement Quarter, we 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.

As of June 30, 2021, we were in compliance with the financial and reporting covenants under our loan agreements.

Under our Credit Facility, until the first day of the Commencement Quarter, we must use all the net cash proceeds from any capital event (such as an asset sale, financing or equity issuance) to repay amounts outstanding under the Revolving Credit Facility.

We may reborrow any amounts so repaid if all relevant conditions are met, including sufficient availability for future borrowings.

1 unchanged sentence

Contractual Obligations

There were no material changes in our contractual obligations as of March 31, 2021, as compared to those reported in our Annual Report on Form 10-K for the year ended December 31, 2020.

There were no material changes in our contractual obligations as of June 30, 2021, as compared to those reported in our Annual Report on Form 10-K for the year ended December 31, 2020.

Election as a REIT

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

What changed 10-Q

Item 1. Financial Statements