What changed in this filing

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Item 9A. Controls and Procedures

2023-03-17 compared with 2022-03-18 · 615 added, 776 removed, 1807 unchanged (43% of the section changed)

4 unchanged sentences

Our Chief Executive Officer and Chief Financial Officer, carried out an evaluation, together with other members of our management, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K.

Based on such evaluation, our Chief

Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of December 31, 2021 at a reasonable level of assurance.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of December 31, 2022 at a reasonable level of assurance.

Management’s Annual Report on Internal Control over Financial Reporting

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(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

and (iii) provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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The information required by this Item will be set forth in our definitive proxy statement with respect to our 2023 annual meeting of stockholders to be filed not later than 120 days after the end of the 2022 fiscal year, and is incorporated herein by reference.

Principal Accounting Fees and Services.

Principal Accountant Fees and Services.

Exhibits and Financial Statement Schedules.

Exhibit and Financial Statement Schedules.

(a) Financial Statements and Financial Statement Schedules

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Articles Supplementary relating to the designation of shares of 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, dated December 6, 2019

Articles Supplementary designating additional shares of 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, dated September 15, 2020

Articles Supplementary relating to the designation of shares of 7.125% Series B Cumulative Redeemable Perpetual Preferred Stock, dated October 4, 2021

Articles Supplementary designating additional shares of 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, dated May 10, 2021

Amended and Restated Bylaws of Healthcare Trust, Inc.

Amendment to Amended and Restated Bylaws of Healthcare Trust, Inc.

Articles Supplementary designating additional shares of 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock

Articles Supplementary relating to the designation of shares of 7.125% Series B Cumulative Redeemable Perpetual Preferred Stock, dated October 4, 2021

Second Amendment to Amended and Restated Bylaws of Healthcare Trust, Inc.

Agreement of Limited Partnership of Healthcare Trust Operating Partnership, L.P.

(f/k/a American Realty Capital Healthcare Trust II Operating Partnership, L.P.), dated as of February 14, 2013

First Amendment to the Agreement of Limited Partnership of American Realty Capital Healthcare Trust II, L.P., dated as of December 31, 2013

Second Amendment to the Agreement of Limited Partnership of American Realty Capital Healthcare Trust II, L.P., dated as of April 15, 2015

First Amendment, dated December 31, 2013, to the Agreement of Limited Partnership of American Realty Capital Healthcare Trust II, L.P., dated February 14, 2013

Second Amendment, dated April 15, 2015, to the Agreement of Limited Partnership of American Realty Capital Healthcare Trust II, L.P., dated as of February 14, 2013

Third Amendment, dated December 6, 2019, to the Agreement of Limited Partnership of Healthcare Trust Operating Partnership, L.P., dated February 14, 2013

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Sixth Amendment, dated October 4, 2021, to the Agreement of Limited Partnership of Healthcare Trust Operating Partnership, L.P., dated February 14, 2013

Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

Rights Agreement, dated May 18, 2020, between Healthcare Trust, Inc.,and Computershare Trust Company, N.A., as Rights Agent

Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

Second Amended and Restated Advisory Agreement, dated as of February 17, 2017, by and among the Company, Healthcare Trust Operating Partnership, L.P.

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Amended and Restated Senior Secured Revolving Credit Agreement dated as of March 13, 2019 by and among Healthcare Trust Operating Partnership, L.P., KeyBank National Association and the other lender parties thereto

First Amendment, dated March 24, 2020, to Amended and Restated Senior Secured Revolving Credit Agreement dated as of March 13, 2019 by and among Healthcare Trust Operating Partnership, L.P., KeyBank National Association and the other lender parties thereto

First Amendment to Amended and Restated Senior Secured Revolving Credit Agreement entered into as of March 13, 2019 by and among Healthcare Trust Operating Partnership, L.P., KeyBank National Association and the other lender parties thereto

Second Amendment to First Amended and Restated Senior Secured Credit Agreement, entered into as of August 10, 2020, among Healthcare Trust Operating Partnership, L.P., Healthcare Trust, Inc., the other guarantor parties thereto, Keybank National Association and the other lenders party thereto

Third Amendment to First Amended and Restated Senior Secured Credit Agreement, entered into as of November 12, 2021, among Healthcare Trust Operating Partnership, L.P., Healthcare Trust, Inc., the other guarantor parties thereto, Keybank National Association and the other lenders party thereto

Fourth Amendment to First Amended and Restated Senior Credit Agreement, entered into as of August 11, 2022, among Healthcare Trust Operating Partnership, L.P., Healthcare Trust, Inc., the other guarantor parties thereto, Keybank National Association and the other lenders party thereto

List of Subsidiaries of Healthcare Trust, Inc.

22 unchanged sentences

(3) Filed as an exhibit to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on December 6, 2019.

(4) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 20, 2018.

(5) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 19, 2020.

(6) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 15, 2020.

(4) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on March 20, 2018.

(5) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 19, 2020.

(6) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 15, 2020.

(7) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 filed with the Securities and Exchange Commission on May 14, 2013.

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(10) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 6, 2019.

(11) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 19, 2020.

(11) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2019.

(12) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 16, 2018.

(14) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on April 15, 2015.

(13) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on April 15, 2015.

(14) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the Securities and Exchange Commission on August 15, 2016.

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(18) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2018 filed with the Securities and Exchange Commission on August 3, 2018.

(20) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 14, 2019.

(19) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission on March 14, 2019.

(22) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on August 13, 2020.

(23) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2019.

(20) Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 24, 2020.

(21) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 13, 2020.

(22) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2017.

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(27) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 9, 2020.

(28) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2021, and incorporated by reference herein.

(29) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 19, 2022, and incorporated by reference herein.

(30) Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 10, 2021.

(31) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed with the Securities and Exchange Commission on August 12, 2022.

(32) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the Securities and Exchange Commission on November 12, 2021.

Form 10-K Summary.

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Rendell Independent Director March 17, 2023

Elman Independent Director March 18, 2022

Penn Independent Director March 17, 2023

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Purchase Price Allocations for Property Acquisitions

As described in Note 3 to the consolidated financial statements, during the year ended December 31, 2021, the Company completed real estate acquisitions of $161.9 million.

As described in Note 3 to the consolidated financial statements, during the year ended December 31, 2022, the Company completed real estate acquisitions, net of below market lease liabilities assumed, of $25.5 million.

For acquired properties with leases classified as operating leases, management allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values.

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Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below- market fixed rate renewal options for below-market leases.

The principal considerations for our determination that performing procedures relating to purchase price allocations for property acquisitions is a critical audit matter are (i) the significant judgment by management when developing the fair value

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to capitalization rates, fair market lease

Report of Independent Registered Public Accounting Firm

estimates of tangible and intangible assets acquired and liabilities assumed;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to capitalization rates, fair market lease rates, discount rates and land values per square foot;

rates, discount rates and land values per square foot;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

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1,978,297 2,049,927

Assets held for sale — 90

Cash and cash equivalents 53,654 59,738

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Operating lease right-of-use assets

Prepaid expenses and other assets (including $ 929 and $ 1,278 due from related parties as of December 31, 2021 and 2020, respectively)

Prepaid expenses and other assets (including $ 929 due from related parties as of December 31, 2021)

34,554 32,564

Deferred costs, net 14,581 15,332

Deferred costs 17,223 14,581

$ 2,180,349 $ 2,214,400

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Derivative liabilities, at fair value — 13,903

Accounts payable and accrued expenses (including $ 47 and $ 299 due to related parties as of December 31, 2021 and 2020, respectively)

Accounts payable and accrued expenses (including $ 47 due to related parties as of December 31, 2022 and 2021)

45,247 42,709

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7.375 % Series A cumulative redeemable perpetual preferred stock, $ 0.01 par value, 4,740,000 authorized as of December 31, 2022 and 2021;

3,977,144 and 1,610,000 issued and outstanding as of December 31, 2021 and 2020, respectively

7.125 % Series B cumulative redeemable perpetual preferred stock, $ 0.01 par value, 3,680,000 authorized as of December 31, 2021;

3,630,000 issued and outstanding as of December 31, 2021, none authorized, issued or outstanding as of December 31, 2020

3,977,144 issued and outstanding as of December 31, 2022 and 2021

7.125 % Series B cumulative redeemable perpetual preferred stock, $ 0.01 par value, 3,680,000 authorized;

3,630,000 issued and outstanding as of December 31, 2022 and 2021

Common stock, $ 0.01 par value, 300,000,000 shares authorized, 105,080,531 shares and 99,281,754 shares issued and outstanding as of December 31, 2022 and 2021, respectively

Additional paid-in capital 2,417,059 2,329,839

Accumulated other comprehensive loss ( 14,341 ) ( 39,673 )

Accumulated other comprehensive income (loss) 36,910 ( 14,341 )

Distributions in excess of accumulated earnings ( 1,462,457 ) ( 1,282,871 )

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Operating loss before gain on sale of real estate investments ( 31,416 ) ( 41,083 ) ( 25,102 )

Gain on sale of real estate investments 3,648 5,230 8,790

Gain (loss) on sale of real estate investments ( 125 ) 3,648 5,230

Operating loss

19 unchanged sentences

$ ( 0.88 ) $ ( 0.87 ) $ ( 0.74 )

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

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

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

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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

Impact of adoption of ASC 842 — — — — — — — — ( 87 ) ( 87 ) — ( 87 )

Issuance of Series A Preferred Stock, net — — — — — — ( 59 ) — — ( 59 ) — ( 59 )

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Share-based compensation, net — — — — — — 1,345 — — 1,345 — 1,345

Distributions declared on common stock, $ 0.83 per share

Distributions declared in common stock,

$ 0.21 per share

— — — — 1,248,197 13 19,646 — ( 19,659 ) — — —

Dividends declared on preferred stock, $ 0.11 per share

Distributions declared in cash on common stock, $ 0.42 per share

— — — — — — — — ( 38,839 ) ( 38,839 ) — ( 38,839 )

Dividends declared on Series A Preferred Stock, $ 1.84 per share

— — — — — — — — ( 2,968 ) ( 2,968 ) — ( 2,968 )

Distributions to non-controlling interest holders — — — — — — — — — — ( 201 ) ( 201 )

Unrealized loss on designated derivative — — — — — — — ( 11,625 ) — ( 11,625 ) — ( 11,625 )

Buyout of non-controlling interest — — — — — — — — ( 88 ) ( 88 ) ( 495 ) ( 583 )

Net loss — — — — — — — — ( 75,813 ) ( 75,813 ) 303 ( 75,510 )

Unrealized loss on designated derivative — — — — — — — ( 32,615 ) — ( 32,615 ) — ( 32,615 )

Rebalancing of ownership percentage — — — — — — 645 ( 15 ) — 630 ( 630 ) —

1 unchanged sentence

Issuance of Series A Preferred Stock, net 2,367,144 24 — — — — 56,241 — — 56,265 — 56,265

Common stock issued through distribution reinvestment plan — — — — 875,986 9 14,595 — — 14,604 — 14,604

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

Issuance of Series B Preferred Stock, net — — 3,630,000 36 — — 86,783 — — 86,819 — 86,819

Share-based compensation, net — — — — — — 1,329 — — 1,329 — 1,329

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— — — — 5,506,008 55 81,316 — ( 81,371 ) — — —

Distributions declared in cash on common stock, $ 0.42 per share

Dividends declared on Series A Preferred Stock, $ 1.57 per share

— — — — — — — — ( 6,236 ) ( 6,236 ) — ( 6,236 )

Dividends declared on preferred stock, $ 1.84 per share

Dividends declared on Series B Preferred Stock, $ 0.42 per share

— — — — — — — — ( 1,527 ) ( 1,527 ) — ( 1,527 )

Distributions to non-controlling interest holders — — — — — — — — — — ( 92 ) ( 92 )

Unrealized loss on designated derivative — — — — — — — ( 32,615 ) — ( 32,615 ) — ( 32,615 )

Buyout of NCI — — — — — — — ( 88 ) ( 88 ) ( 495 ) ( 583 )

Issuance of Series A Preferred OP Units — — — — — — — — — — 2,578 2,578

Net loss — — — — — — — — ( 85,180 ) ( 85,180 ) ( 260 ) ( 85,440 )

Unrealized loss on designated derivative — — — — — — — 25,332 — 25,332 — 25,332

Rebalancing of ownership percentage — — — — — — ( 91 ) — — ( 91 ) 91 —

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Distributions to non-controlling interest holders — — — — — — — — — — ( 184 ) ( 184 )

Issuance of Series A Preferred OP Units — — — — — — — — — — 2,578 2,578

Net loss — — — — — — — — ( 79,486 ) ( 79,486 ) ( 135 ) ( 79,621 )

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Equity-based compensation 1,185 1,329 1,345

Loss (gain) on non-designated derivative instruments ( 37 ) 102 68

(Gain) loss on non-designated derivative instruments ( 3,834 ) ( 37 ) 102

Cash received from non-designated derivative instruments 286 — —

(Gain) loss on sales of real estate investments, net 125 ( 3,648 ) ( 5,230 )

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Proceeds from credit facilities 30,000 125,000 95,000

Proceeds from term loan — — 150,000

Proceeds from mortgage notes payable — 42,750 —

Payments on mortgage notes payable ( 6,662 ) ( 1,264 ) ( 1,048 )

Payments for derivative instruments ( 85 ) ( 97 ) ( 2,147 )

Payments for non-designated derivative instruments — ( 85 ) ( 97 )

Payments of deferred financing costs ( 1,672 ) ( 1,490 ) ( 2,241 )

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Distributions paid on common stock — — ( 31,354 )

Dividends paid on preferred stock ( 5,144 ) ( 2,399 ) —

Dividends paid on Series A Preferred stock ( 7,333 ) ( 5,144 ) ( 2,399 )

Dividends paid on Series B Preferred stock ( 6,466 ) — —

Buyout of non-controlling interest holders — — ( 583 )

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Common stock issued through stock dividends 86,301 81,371 19,659

Accrued capital expenditures (payable) — 1,287 —

Accrued capital expenditures — — 1,287

Accrued offering costs on Series B Preferred Stock — 78 —

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federal income tax purposes (“REIT”) that focuses on acquiring and managing a diversified portfolio of healthcare-related real estate, focused on medical office and other healthcare-related buildings (“MOBs”), and senior housing operating properties (“SHOPs”).

Prior to December 31, 2021, the Company reported in three reportable segments, see Note 15 —Segment Reporting for additional information.

As of December 31, 2022, the Company owned 202 properties located in 34 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.

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

The Company’s advisor, Healthcare Trust Advisors, LLC (the “Advisor”) manages our day-to-day business with the assistance of our property manager, Healthcare Trust Properties, LLC (the “Property Manager”).

The Company’s Advisor and Property Manager are under common control with AR Global Investments, LLC (“AR Global”), and these related parties receive compensation and fees for providing services to us.

The Company also reimburses these entities for certain expenses they incur in providing these services to the Company.

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

As of December 31, 2021, the Company owned 54 seniors housing properties under the REIT Investment Diversification and Empowerment Act (“RIDEA”) structure in its SHOP segment.

As of December 31, 2022, the Company owned 52 seniors housing properties under the REIT Investment Diversification and Empowerment Act of 2007 (“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.

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In its SHOP segment, the Company invests in seniors housing properties using the RIDEA structure.

As of December 31, 2021, the Company had six eligible independent contractors operating 54 SHOPs (not including two land parcels).

As of December 31, 2022, the Company had four eligible independent contractors operating 52 SHOPs (including two land parcels).

All of the Company’s properties across both business segments are located throughout the United States.

Since October 2020, the Company has 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 issued in October 2020 and January 2021 were equal to 0.01349 shares of common stock on each share of outstanding common stock.

The Stock Dividends issued in April 2021, July 2021, October 2021 and January 2022 were equal to 0.014655 shares of common stock on each share of outstanding common stock.

The Company has declared quarterly dividends entirely in shares of its common stock since October 2020 in order to preserve its liquidity in response to the COVID-19 pandemic.

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 Company has issued an aggregate of 6,754,203 shares in respect to the Stock Dividends.

No other additional shares of common stock were issued during the year ended December 31, 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 0.08871 shares for every share outstanding resulting from the Stock Dividends, and are noted as such throughout the accompanying financial statements and notes.

On March 31, 2021, the Company published a new estimate of per-share net asset value (“Estimated Per-Share NAV”) as of December 31, 2020.

Since October 2020, the Company has issued an aggregate of approximately 12.6 million shares in respect to the Stock Dividends.

No other additional shares of common stock were issued during the years ended December 31, 2022 or 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 cumulative increase in shares outstanding resulting from the Stock Dividends since October 2020 and through January 2023, and are noted as such throughout the accompanying financial statements and notes.

Any future issuances of stock dividends will also result in retroactive adjustments.

Please see No te 8 — Stockholder’s Equity for additional information on the stock dividends.

On April 1, 2022, the Company published a new estimate of per-share net asset value (“Estimated Per-Share NAV”) as of December 31, 2021.

The Company’s previous Estimated Per-Share NAV was as of December 31, 2020.

The Estimated Per-Share NAV published on March 31, 2021 has not been adjusted since publication and will not be adjusted until the board of directors (the “Board”) determines a new Estimated Per-Share NAV which is expected in early April 2022.

The Estimated Per-Share NAV published on April 1, 2022 has not been adjusted since publication and will not be adjusted until the board of directors (the “Board”) determines a new Estimated Per-Share NAV.

Issuing 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 increases when shares of common stock are issued in respect of a Stock Dividend;

however, because each stockholder will receive the same number of new shares, the total value of a common stockholder’s investment, all things equal, will not change assuming no sales or other transfers.

The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Board, provided that such estimates will be made at least once annually.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Board, provided that such estimates will be made at least once annually unless the Company lists its common stock.

Note 2 — Summary of Significant Accounting Policies

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Principles of Consolidation and Basis of Presentation

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries.

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Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, impairments, fair value measurements and income taxes, as applicable.

Out-of-Period Adjustments

During the year ended December 31, 2019, the Company identified certain historical errors in its tax provision and its net deferred taxes asset as well as its statements of operations and comprehensive income (loss), consolidated statements of changes in equity, and statements of cash flows since 2014, which impacted the quarterly financial statements and annual periods previously issued.

Specifically, the Company had overstated intercompany rent on certain leases with the taxable REIT subsidiary (“TRS”) and reflected a portion of depreciation on REIT assets in the TRS’s tax provision, thereby overstating previously recorded tax benefits, deferred tax assets and net incom e by $ 0.8 million, $ 0.3 million and $ 0.2 million for the years ended December 31, 2018, 2017 and for Pre-2017 periods, respectively.

The intercompany rent and allocation of depreciation only affected the tax provision and did not affect the pre-tax consolidated financial results.

The Company concluded that the errors noted above were not material for the period ended December 31, 2019 or any prior periods and has adjusted the amounts on a cumulative basis in 2019.

Out-of-Period Adjustment

During the year ended December 31, 2019, the Company did no t record quarterly interest expense related to borrowings under the Revolving Credit Facility (as defined below) that were borrowed and repaid during the fourth quarter of 2019.

1 unchanged sentence

In 2020, the Company identified that the cumulative interest payable balance was understated, and as a result a true up entry was recorded to record the payable and related expense, resulting in an out of period adjustment.

The Company concluded that the errors noted above were not material for the period ended December 31, 2019 or any prior periods and has adjusted the amounts on a cumulative basis in 2020.

The Company concluded that the errors noted above were not material for the period ended December 31, 2019 or any prior periods and adjusted the amounts on a cumulative basis in 2020.

Impacts of the COVID-19 Pandemic

During the first quarter of 2020, the global COVID-19 pandemic that has spread around the world and to every state in the United States commenced.

The pandemic has had and could continue to have an adverse impact on economic and market conditions, including a global economic slowdown and recession that may continue for some time.

The COVID-19 pandemic has had, and could continue to have, an adverse impact on economic conditions, including a global economic slowdown and recession that may continue for some time.

The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions.

The COVID-19 pandemic has had, and another pandemic in the future could have, impacts across many sectors and areas of the global economy and financial markets, leading to significant adverse impacts on economic activity including volatility in financial markets.

The impact of the COVID-19 pandemic has evolved rapidly.

In many states and cities where our properties are located, measures including “shelter-in-place” or “stay-at-home” orders issued by local, state and federal authorities for much of 2020 and early part of 2021 and social distancing measures have resulted in closure and limitations on the operations of many businesses and organizations.

While strict “shelter-in-place” and similar orders have generally been lifted, continued limitations on indoor occupancy or other restrictions applicable to in-person operations have been and may in future be re-instituted in some jurisdictions as rates of infection increase in those locations, including in light of the current spread of the Delta and Omicron variants and other potentially more contagious variants of the SARS-CoV-2 virus.

The COVID-19 pandemic had, and another pandemic in the future could have, impacts across many sectors and areas of the global economy and financial markets, leading to significant adverse impacts on economic activity including volatility in financial markets.

The Company’s MOB tenants and SHOP properties operate businesses that require in-person interactions with their patients and residents, and concern regarding the transmission of COVID-19 impacted the willingness of persons to, among other things, live in or use facilities at the Company’s properties, and impact the revenues generated by the Company’s tenants.

The Company’s ability to lease space and negotiate and maintain favorable rents and the results of operations at its SHOPs could also continue to be negatively impacted by a prolonged recession in the U.S.

Moreover, the demand for leasing space at the Company’s MOB properties could decline, which could negatively impacting occupancy percentage, revenue and net income.

Additionally, downturns or stagnation the U.S.

housing market as a result of an economic downturn could adversely affect the ability, or perceived ability, of seniors to afford the resident fees and services at the Company’s SHOPs.

Further, recent and continuing increases in inflation brought about by the labor shortages, supply chain disruptions and increases in interest rates have adversely impacted, and may continue to impact, the Company’s results of operations.

Moreover, these increases in the rate of inflation, the ongoing war in Ukraine and related sanctions, supply chain disruptions and increases in interest rates may also impact the ability of the Company’s tenants and residents to pay rent and hence the Company’s results of operations and liquidity.

Starting in March 2020, the COVID-19 pandemic and measures to prevent its spread began to affect the Company in a number of ways that vary by operating segment:

COVID-19 Impact — MOB Segment

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

The Company took a proactive approach to achieve mutually agreeable solutions with its MOB tenants and in some cases, during the year ended December 31, 2020, the Company executed lease amendments providing for deferral of rent.

Since the year ended December 31, 2020, the Company has not entered into any rent deferral agreements with any of its MOB tenants, and all amounts previously deferred under prior rent deferral agreements have been collected.

HEALTHCARE TRUST, INC.

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December 31, 2022

COVID-19 pandemic continues, it is highly uncertain to what extent and when any such continuing restrictions will be lifted in various jurisdictions and could depend on numerous factors, including vaccination rates among the population, the effectiveness of COVID-19 vaccines against these variants and the response by governmental bodies and regulators.

Our tenants and SHOP properties operate businesses that require in-person interactions with their patients and residents.

Even for businesses that have not closed or have closed and reopened, concern regarding the transmission of COVID-19 has impacted, and will likely continue to impact, the willingness of persons to, among other things, live in or use facilities at our properties, and impact the revenues generated by our tenants which may further impact the ability of our tenants to pay their rent obligations to us when due.

The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of December 31, 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 December 31, 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.

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.

A portion of the $ 95.0 million in borrowings was used for general corporate purposes and for acquisitions.

In August 2020 and November 2021, the Company amended the Credit Facility as part of its efforts to continue addressing the adverse impacts of the COVID-19 pandemic.

For additional information on the Credit Facility amendment see Note 5 — Credit Facilities.

The COVID-19 pandemic has impacted global economic activity.

Our ability to lease space and negotiate and maintain favorable rents and the results of operations at our SHOPs could also continue to be negatively impacted by a prolonged recession in the U.S.

economy as could the rates charged to residents at our SHOPs.

Moreover, the demand for leasing space at our MOB properties could decline further negatively impacting occupancy percentage, revenue and net income.

Additionally, downturns or stagnation the U.S.

housing market as a result of an economic downturn could adversely affect the ability, or perceived ability, of seniors to afford the resident fees and services at our seniors housing properties.

Starting in March 2020, the COVID-19 pandemic and measures to prevent its spread began to affect us in a number of ways that vary by operating segment.

COVID-19 Impact — MOB Segment

The financial stability and overall health of our tenants is critical to our business.

The negative effects that the global pandemic has had on the economy includes the closure or reduction in occupancy activity at some of our MOBs.

The economic impact of the pandemic has impacted the ability of some of our tenants to pay their monthly rent either temporarily or in the long term.

We experienced delays in rent collections in the second, third and fourth quarters of 2020, although collections have been approximately 100 % of original cash rent for the MOB segment throughout the year ended December 31, 2021.

We have taken a proactive approach to achieve mutually agreeable solutions with its tenants and in some cases, during the year ended December 31, 2020, we executed lease amendments providing for deferral of rent.

During the year ended December 31, 2021, the Company did not enter into any rent 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:

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In accordance with the relief provisions, instead of treating these qualifying leases as modifications, the Company has elected to treat the modifications as if previously contained in the lease and recast rents receivable prospectively (if necessary).

Under that accounting, for modifications that were deferrals only, there would be no impact on overall rental revenue and for

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December 31, 2021

any abatement amounts that reduced total rent to be received, the impact would be recognized ratably over the remaining life of the lease.

Under that accounting, for modifications that were deferrals only, there would be no impact on overall rental revenue and for any abatement amounts that reduced total rent to be received, the impact would be recognized ratably over the remaining life of the lease.

For leases not qualifying for this relief, the Company has applied modification accounting and determined that there were no changes in the current classification of its leases impacted by negotiations with its tenants.

COVID-19 Impact — SHOP Segment

In the Company’s SHOP portfolio, occupancy had trended lower since March 2020 and the declines only recently began to level off in June 2021.

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

In the Company’s SHOP segment, occupancy trended downward from March 2020 until June 2021 and has since stabilized, however, SHOP occupancy remains substantially below pre-pandemic levels.

Further, the Company has continued to experience lower inquiry volumes and reduced in-person tours since the onset of the pandemic.

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

At the SHOP facilities, the Company generally bears these cost increases, which were partially offset by funds received under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and to a lesser extent, cost recoveries for personal protective equipment from residents.

At the SHOPs, the Company generally bears these cost increases, which were partially offset by funds received under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and to a lesser extent, cost recoveries for personal protective equipment from residents.

See below for additional information on the CARES Act.

These trends accelerated beginning in the second quarter of 2020, continued into early 2021 until stabilizing in the third quarter, and are expected to improve in 2022.

Future developments in the course of the pandemic may 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 its revenues and income in the other quarters.

While the development of COVID vaccines may limit that effect, the effectiveness of vaccines and the willingness to receive vaccines are highly uncertain and cannot be predicted with confidence.

These cost increases became more prominent throughout the year ended December 31, 2022 from a combination of factors:

firstly, the Company was impacted by rising inflation which generally increased the costs of services and supplies, secondly, the Company relied more on the use of temporary contract labor and agencies due to a shortage of qualified personnel and lastly, the amounts the Company paid to third party providers for wages, including overtime wages, and bonuses increased.

Future developments in the course of the pandemic, increases to inflation, labor shortages and supply chain disruptions may cause further adverse impacts to the Company’s occupancy and cost levels, and these trends may continue to impact the Company and have material adverse effects on its revenues, operating costs and net income in future periods.

The financial impact of the COVID-19 pandemic on the Company has been partially offset by funds received under the CARES Act.

The Company received $ 5.1 million and $ 3.6 million in these funds during the years ended December 31, 2021 and 2020, respectively.

The Company considers these funds to be a grant contribution from the government.

The full amounts received were recognized as a reduction of property operating expenses in our consolidated statement of operations for the years ended December 31, 2021 and 2020, respectively, to partially offset the incurred COVID-19 expenses.

In addition, the Company has applied for additional funds, however, those applications have not yet been approved.

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

The Company received $ 4.5 million, $ 5.1 million and $ 3.6 million in these funds during the years ended December 31, 2022, 2021 and 2020, respectively.

The Company considers these funds to be grant contributions from the government.

The full amounts received were recognized as reductions of property operating expenses in the Company’s consolidated statement of operations for the years ended December 31, 2022, 2021 and 2020, respectively, to partially offset incurred COVID-19 expenses.

The Company does not anticipate that any further funds under the CARES Act will be received, and there can be no assurance that the CARES Act program will be extended or any further amounts received under currently effective or potential future government programs.

Revenue Recognition

The Company’s revenues, which are derived primarily from lease contracts, include rent received from tenants in its MOBs.

The Company’s revenues, which are derived primarily from lease contracts, include rent received from tenants in its MOB segment.

As of December 31, 2022, these leases had a weighted average remaining lease term of 4.9 years.

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When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation.

For new leases after acquisition, the commencement date is considered to be the date the tenant takes control of the space.

For new leases after acquisition, the commencement date is

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December 31, 2022

considered to be the date the tenant takes control of the space.

For lease modifications, the commencement date is considered to be the date the lease modification is executed.

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Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “ Revenue from tenants .” For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis.

The Company’s revenues also include resident services and fee income primarily related to rent derived from lease contracts with residents in the Company’s SHOPs held using a structure permitted under the REIT Investment and Diversification and Empowerment Act of 2007 and to fees for ancillary services performed for SHOP residents, which are generally variable in nature.

Rental income from residents in the Company’s SHOP segment is recognized as earned.

The Company’s revenues also include resident services and fee income primarily related to rent derived from lease contracts with residents in the Company’s SHOP segment, held using a structure permitted under RIDEA, and to a lesser extent, fees for ancillary services performed for SHOP residents, which are generally variable in nature.

Rental income from residents in the Company’s SHOP segment is recognized as earned when services are provided.

Residents pay monthly rent that covers occupancy of their unit and basic services, including utilities, meals and some housekeeping services.

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

Also included in revenue from tenants is fees for ancillary revenue from non-residents of $ 3.5 million $ 13.3 million, and $ 15.4 million for the years ended December 31, 2021, 2020, and 2019, respectively.

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

The Company did no t record material amounts of ancillary revenue from non-residents during the year ended December 31, 2022.

The Company recorded ancillary revenue from non-residents of $ 3.5 million and $ 13.3 million for the years ended December 31, 2021 and 2020, respectively.

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

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December 31, 2021

The decline in ancillary revenue since the year ended December 31, 2020 is primarily due to the Company’s dispositions of its SNF properties in Lutz and Wellington, Florida, which were sold in November 2020 and May 2021, respectively.

The Company defers the revenue related to lease payments received from tenants and residents in advance of their due dates.

Pursuant to certain of the Company’s lease agreements, tenants are required to reimburse the Company for certain property operating expenses related to non-SHOP assets (recorded in revenue from tenants), in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties.

Pursuant to certain of the Company’s lease agreements, tenants are required to reimburse the Company for certain property operating and maintenance expenses related to non-SHOP assets (recorded in revenue from tenants), in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating and maintenance costs of the respective properties.

The following table presents future base rent payments on a cash basis due to the Company as of December 31, 2022 over the next five years and thereafter.

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The Company continually reviews receivables related to rent and unbilled rents receivable and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located.

Under the leasing standards (see the “Recently Issued Accounting Pronouncements” section below), the Company is required to assess, based on credit risk only, if it is probable that the Company will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant.

Under the leasing standards, the Company is required to assess, based on credit risk only, if it is probable that the Company will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant.

Partial reserves, or the ability to assume partial recovery are no longer permitted.

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However, if the Company determines it is not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable.

Cost recoveries from tenants are included in operating revenue from tenants beginning on January 1, 2019, in accordance with new accounting rules, on the accompanying consolidated statements of operations and comprehensive income (loss) in the period the related costs are incurred, as applicable.

Under ASC 842, which was adopted effective on January 1, 2019, uncollectable amounts are reflected as reductions in revenue.

Under ASC 840, the Company recorded such amounts as bad debt expense as part of property operating expenses.

During the years ended December 31, 2021, 2020 and 2019 such amounts were $ 1.1 million, $ 2.7 million and $ 6.5 million, respectively, which include bad debt expense related to the NuVista and LaSalle Tenants (see Note 3 — Real Estate Investment, Net to the consolidated financial statements included in this Annual Report on Form 10-K for additional information).

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

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December 31, 2022

with 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 years ended December 31, 2022, 2021 and 2020, the Company recorded reductions in revenue of $ 3.2 million, $ 1.1 million and $ 2.7 million, respectively.

Approximately $ 1.3 million and $ 1.0 million of bad debt expense recorded in the years ended December 31, 2022 and 2020, respectively, related to previously disposed properties.

There were no significant write-off’s related to previously disposed properties during the year ended December 31, 2021.

Investments in Real Estate

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See the “ Purchase Price Allocation” section in this Note for a discussion of the initial accounting for investments in real estate.

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December 31, 2021

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.

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Properties are no longer depreciated when they are classified as held for sale.

There were no real estate investments held for sale as of December 31, 2021 and there were $ 0.1 million in real estate investments held for sale as of December 31, 2020 (see Note 3 — Real Estate Investments, Net to the consolidated financial statements included in this Annual Report on Form 10-K for additional information).

As more fully discussed in this Note under Recently Issued Accounting Pronouncements - ASU No.

2016-02 Leases , all of the Company’s leases as lessor prior to adoption were accounted for as operating leases and they continue to be accounted for as operating leases under the transition guidance.

The Company evaluates new leases originated after the adoption date (by the Company or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant.

This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than major part of remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term.

Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor.

For the three-year period ended December 31, 2019, the Company has no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules.

The Company is also the lessee under certain land leases which were previously classified prior to adoption of lease accounting and will continue to be classified as operating leases under transition elections unless subsequently modified.

These leases are reflected on the balance sheet as of December 31, 2021 and 2020, and the rent expense is reflected on a straight-line basis over the lease term in the consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019.

There were no real estate investments held for sale as of December 31, 2022 or December 31, 2021.

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

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In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates.

In allocating the fair value to any assumed or issued non-controlling interests, amounts are recorded at their fair value at the close of business on the acquisition date.

In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain.

In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets.

All acquisitions during the years ended December 31, 2021, 2020 and 2019 were accounted for as asset acquisitions.

For acquired properties with leases classified as operating leases, the Company allocates the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values.

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The Company utilizes various estimates, processes and information to determine the as-if vacant property value.

The Company estimates fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods.

The Company estimates the fair value using data from appraisals, comparable sales, discounted cash flow analysis and other methods.

Fair value estimates are also made using significant assumptions such as capitalization rates, fair market lease rates, discount rates and land values per square foot.

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December 31, 2022

estimates are also made using significant assumptions such as capitalization rates, fair market lease rates, discount rates and land values per square foot.

Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases.

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The Company did not record any intangible asset amounts related to customer relationships during the years ended December 31, 2022, 2021 and 2020.

Accounting for Leases

Lessor Accounting

In accordance with the lease accounting standard, all of the Company’s leases as lessor prior to adoption were accounted for as operating leases.

This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than a major part of the remaining economic useful life of the asset (e.g., equal to or greater than 75%), the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or the asset is so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term.

Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor.

As of December 31, 2022 and 2021, the Company had no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules.

As a lessor of real estate, the Company has elected, by class of underlying assets, to account for lease and non-lease components (such as tenant reimbursements of property operating and maintenance expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component;

and (b) the lease component, if accounted for separately, would be classified as an operating lease.

Additionally, only incremental direct leasing costs may be capitalized under the accounting guidance.

Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed.

Lessee Accounting

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 consolidated balance sheets as of December 31, 2022 and 2021, 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 years ended December 31, 2022, 2021 and 2020.

For lessees, the accounting standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.

Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease.

Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification.

Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction.

For additional information and disclosures related to the Company’s operating leases, see Note 16 — Commitments and Contingencies .

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December 31, 2022

Gain on Dispositions of Real Estate Investments

Gains on sales of rental real estate after January 1, 2018 are not considered sales to customers and will generally be recognized pursuant to the provisions included in ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”).

Gain on sales of real estate prior to January 1, 2018 are recognized pursuant to the provisions included in ASC 360-20, Real Estate Sales (“ASC 360-20”).

The specific timing of a sale was measured against various criteria in and ASC 360-20 related to the terms of the transaction and any continuing involvement in the form of management or financial assistance associated with the properties.

If the sales criteria for the full accrual method are not met, depending on the circumstances, the Company may not record a sale or it may record a sale but may defer some or all of the gain recognition.

If the criteria for full accrual are not met, the Company may account for the transaction by applying the finance, leasing, profit sharing, deposit, installment or cost recovery methods, as appropriate, until the sales criteria for the full accrual method are met.

Gains on sales of rental real estate are not considered sales to customers and will generally be recognized pursuant to the provisions included in ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”).

Impairment of Long-Lived Assets

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Reportable Segments

As of December 31, 2021, the Company has determined that it has two reportable segments, with activities related to investing in MOBs and SHOPs.

The Company has determined that it has two reportable segments, with activities related to investing in MOBs and SHOPs.

Management evaluates the operating performance of the Company’s investments in real estate and seniors housing properties on an individual property level.

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The value of certain other intangibles such as certificates of need in certain jurisdictions are amortized over the expected period of benefit (generally the life of the related building).

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December 31, 2021

The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases.

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The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.

Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.

Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an

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December 31, 2022

asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.

Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

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See Note 13 — Non-Controlling Interests for additional information.

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December 31, 2021

Cash and Cash Equivalents

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Although the Company bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result.

Deferred Financing and Leasing Costs, Net

Deferred Costs

Deferred costs, net, consists of deferred financing costs related to the Credit Facility (as defined in Note 5 — Credit Facilities) Fannie Mae Master Credit Facilities (as defined in Note 5 — Credit Facilities) , and deferred leasing costs.

Deferred financing costs relating to the mortgage notes payable (see Note 4 — Mortgage Notes Payable, Net ) are reflected net of the related financing on our balance sheet.

Deferred financing costs relating to mortgage notes payable (see Note 4 — Mortgage Notes Payable, Net ) are reflected net of the related financing in the mortgage notes payable, net line item of the Company’s consolidated balance sheet.

Deferred financing costs associated with the Credit Facility and Fannie Mae Master Credit Facilities and mortgage notes payable represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing.

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Deferred leasing costs, consisting primarily of lease commissions and professional fees incurred in connection with new leases, are deferred and amortized over the term of the lease.

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December 31, 2022

Equity-Based Compensation

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If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S.

federal, state and income taxes at regular corporate rates beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years.

federal, state and local income taxes at regular corporate rates beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years.

The Company distributed to its stockholders 100% of its REIT taxable income for each of the years ended December 31, 2022, 2021 and 2020.

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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.

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December 31, 2021

As of December 31, 2021, the Company, owned 54 seniors housing properties which are leased and operated through its TRS.

As of December 31, 2022, the Company owned 52 seniors housing properties (including two land parcels) which are leased and operated through its TRS.

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

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During the year ended December 31, 2020, the Company modified 25 intercompany leases with the TRS which abated intercompany rent due to the ongoing COVID-19 pandemic.

Because of the Company’s TRS's recent operating history of taxable 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 $ 4.2 million as of December 31, 2021.

These abatements were extended through December 31, 2022 and may continue to be extended for future periods.

Because of the Company’s TRS's recent operating history of taxable losses and the 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 $ 6.9 million and $ 4.2 million as of December 31, 2022 and 2021, respectively.

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).

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As of December 31, 2021, the Company had a deferred tax asset of $ 4.2 million with a full valuation allowance.

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December 31, 2022

The following table details the composition of the Company’s tax (expense) benefit for the years ended December 31, 2022, 2021 and 2020, which includes U.S.

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CARES Act Grants

On March 27, 2020, Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law and it provides funding to Medicare providers in order to provide financial relief during the COVID-19 pandemic.

On March 27, 2020, the CARES Ac) was signed into law and it provides funding to Medicare providers in order to provide financial relief during the COVID-19 pandemic.

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

The Company received

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December 31, 2021

$ 3.6 million in these funds during the year ended December 31, 2020, related to four of its SHOPs.

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

The Company considered the funds to be a grant contribution from the government and the full amounts received were recognized as a reduction of property operating expenses in the Company’s consolidated statement of operations for the year ended December 31, 2020.

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

During the years ended December 31, 2022, 2021 and 2020 the Company received $ 4.5 million, $ 5.1 million and $ 3.6 million in funding from CARES Act grants, respectively.

For accounting purposes, the CARES Act funds are treated as a grant contribution from the government.

The funding the Company received was recognized as a reduction of property operating and maintenance expenses in the Company’s consolidated statements of operations to offset the negative impacts of COVID-19.

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

Recently Issued Accounting Pronouncements

Adopted as of January 1, 2020:

2016-02 - Leases

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) (“ASU 2016-02”) which provides guidance related to the accounting for leases, as well as the related disclosures.

For lessors of real estate, leases are accounted for using an approach substantially the same as previous accounting guidance for operating leases and direct financing leases.

For lessees, the new standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.

Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification.

Upon adoption, lessors were allowed a practical expedient, which the Company has elected, by class of underlying assets to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component;

and (b) the lease component, if accounted for separately, would be classified as an operating lease.

Additionally, only incremental direct leasing costs may be capitalized under this new guidance, which is consistent with the Company’s existing policies.

Also, upon adoption, companies were allowed a practical expedient package, which the Company has elected, that allowed the Company:

(a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases;

(b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019 (including assessing sale-leaseback transactions);

and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019.

As a result, all of the Company’s existing leases will continue to be classified as operating leases under the new standard.

Further, any existing leases for which the property is the leased to a tenant in a transaction that at inception was a sale-leaseback transaction will continue to be treated (absent a modification) as operating leases.

The Company did not have any leases that would be considered financing leases as of January 1, 2019.

The Company assessed the impact of adoption from both a lessor and lessee perspective, which is discussed in more detail below, and adopted the new guidance prospectively on January 1, 2019, using a prospective transition approach under which the Company elected to apply the guidance effective January 1, 2019 and not adjust prior comparative reporting periods (except for the Company’s presentation of lease revenue discussed below).

Lessor Accounting

As discussed above, the Company was not required to re-assess the classification of its leases, which are considered operating leases under ASU 2016-02.

The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessor:

• Since the Company elected the practical expedient noted above to not separate non-lease component revenue from the associated lease component, the Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line.

The prior periods have been conformed to this new presentation.

• Changes in the Company’s assessment of receivables that result in bad debt expense is now required to be recorded as an adjustment to revenue, rather than a charge to bad debt expense.

This new classification applies for the first quarter of 2019 and reclassification of prior period amounts is not permitted.

At transition on January 1, 2019, after assessing its reserve balances at December 31, 2018 under the new guidance, the Company wrote off accounts receivable of $ 0.1 million and straight-line rents receivable of $ 0.1 million as an adjustment to the opening balance of accumulated deficit, and accordingly rent for these tenants is currently recorded on a cash basis.

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December 31, 2021

• Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed.

Under prior accounting guidance, the recognition would have been deferred.

Lessee Accounting

The Company was a lessee under leases for 17 properties including capital leases of land and building as of January 1, 2019 and because the Company has elected the practical expedients described above, it determined that 11 of these leases would continue to be classified as operating leases under the new standard.

The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessee:

• Upon adoption of the new standard, the Company recorded ROU assets and lease liabilities equal to $ 10.2 million for the present value of the lease payments related to its ground leases.

These amounts are included in operating lease right-of-use assets and operating lease liabilities on the Company’s consolidated balance sheet as of December 31, 2019.

• The Company also reclassified $ 0.5 million related to amounts previously reported as a straight-line rent liability and $ 4.8 million, net related to amounts previously reported as above and below market ground lease intangibles to the ROU assets.

For additional information and disclosures related to these operating leases, see Note 16 — Commitments and Contingencies.

Other Accounting Pronouncements

In August 2018, the FASB issued ASU No.

2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities , to better align cash flow and fair value hedge accounting with the corresponding risk management activities.

Among other things, the amendments expand which hedging strategies are eligible for hedge accounting, align the timing of recognition of hedge results with the earnings effect of the hedged item and allow companies to include the change in fair value of the derivative in the same income statement line item as the earnings effect of the hedged item.

Additionally, for cash flow hedges that are highly effective, the update allows for all changes in fair value of the derivative to be recorded in other comprehensive income.

The Company has adopted ASU 2017-12 on January 1, 2019, as required under the guidance, using a modified retrospective transition method and the adoption did not have a material impact on its consolidated financial statements.

Adopted as of January 1, 2020:

In August 2018, the FASB issued ASU No.

2018-13, Fair Value Measurement (Topic 820):

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Adopted as of January 1, 2021:

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December 31, 2022

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).

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The Company adopted the new guidance on January 1, 2021 and determined it did not have a material impact on its consolidated financial statements.

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December 31, 2021

Not yet Adopted as of December 31, 2021

Adopted as of January 1, 2022:

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Topic 815).

The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and amends the guidance for the derivatives scope exception for contracts in an entity's own equity.

The standard also amends and makes targeted improvements to the related earnings per share guidance.

The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption was permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

The standard allows for either modified or full retrospective transition methods.

The Company adopted the new guidance on January 1, 2022 and determined it did not have a material impact on its consolidated financial statements.

Not yet Fully Adopted as of December 31, 2022

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848).

Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in Topic 848 is optional and may be elected over the period March 12, 2020 through December 31, 2022 as reference rate reform activities occur.

During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to (i) the assertion that our hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of our derivatives, which will be consistent with our past presentation.

The guidance in Topic 848 is optional and may be elected over the period from March 12, 2020 through June 30, 2023 as reference rate reform activities occur.

During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to (i) the assertion that the Company’s hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of the Company’s derivatives, which will be consistent with the Company’s past presentation.

The Company will continue to evaluate the impact of the guidance and may apply other elections, as applicable, as additional changes in the market occur.

Note 3 — Real Estate Investments, Net

Property Acquisitions and Development Costs

Property Acquisitions

The Company invests in healthcare-related facilities, primarily MOBs and seniors housing properties which expand and diversify its portfolio and revenue base.

The Company owned 202 properties as of December 31, 2022.

During the year ended December 31, 2021, the Company, through wholly-owned subsidiaries of the OP, completed its acquisitions of five multi-tenant MOBs and 12 single tenant MOBs for an aggregate contract purchase price of $ 160.2 million.

During the year ended December 31, 2022, the Company, through wholly-owned subsidiaries of the OP, completed its acquisitions of one multi-tenant MOBs and three single tenant MOBs for an aggregate contract purchase price of $ 25.3 million.

All acquisitions in 2022, 2021 and 2020 were considered asset acquisitions for accounting purposes.

The following table presents the allocation of the assets acquired and liabilities assumed, as well as development costs during the years ended December 31, 2021, 2020 and 2019:

The following table presents the allocation of the assets acquired and liabilities assumed during the years ended December 31, 2022, 2021 and 2020:

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December 31, 2022

Year Ended December 31,

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Buildings, fixtures and improvements 16,606 121,376 90,699

Development costs — — 5,721

Total tangible assets 21,539 134,224 98,364

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3,999 27,654 10,503

Mortgage notes payable, net — ( 13,883 ) —

Issuance of Series A Preferred OP Units ( 2,578 ) — —

Mortgage notes payable assumed, net — — ( 13,883 )

Issuance of Preferred OP Units (2)

— ( 2,578 ) —

Cash paid for real estate investments, including acquisitions $ 25,538 $ 159,300 $ 94,984

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_______________

(1) Weighted-average remaining amortization periods for in-place leases, above-market leases and below market leases acquired were 11.2 , 10.2 years and 8.5 years, respectively, as of December 31, 2021.

(1) Weighted-average remaining amortization periods for in-place leases, above-market leases and below market leases acquired were 8.9 years, 9.3 years and 12.1 years, respectively, as of December 31, 2022.

Weighted-average remaining amortization periods for in-place leases and above-market leases acquired were 11.2 years, 10.2 years and 8.5 years, respectively, as of December 31, 2021.

Weighted-average remaining amortization periods for in-place leases, above-market leases and below market leases acquired were 1.7 years, 7.7 years and 7.4 years, respectively, as of December 31, 2020.

(2) See Note 8 — Stockholders’ Equity for additional information.

Significant Tenants

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The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of consolidated annualized rental income on a straight-line basis for all properties as of December 31, 2022, 2021 and 2020:

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December 31, 2021

State 2022 2021 2020

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

Intangible Assets and Liabilities

Acquired intangible assets and liabilities consisted of the following as of the periods presented:

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December 31, 2022

December 31, 2022 December 31, 2021

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(3) Reflected within property operating and maintenance expense.

Upon adoption of ASC 842 effective January 1, 2019, intangible balances related to ground leases were reclassified to be included as part of the Operating lease right-of-use assets presented on the consolidated balance sheet with no change to placement of the amortization expense of such balances.

Refer to Note 2 — Summary of Significant Accounting Policies for additional details.

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December 31, 2021

The following table provides the projected amortization and adjustments to revenue from tenants for the next five years:

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Total to be added to revenue from tenants $ 1,017 $ 878 $ 740 $ 612 $ 383

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December 31, 2022

The following table summarizes the properties sold during the years ended December 31, 2022, 2021 and 2020:

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2022 Dispositions:

LaSalle properties ( four properties) (1)

March 2, 2022 $ 12,400 $ ( 303 )

Lien settlement on formerly disposed properties N/A N/A 178

Totals $ 12,400 $ ( 125 )

2021 Dispositions:

Hampton River Portfolio ( two properties)

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Totals $ 40,350 $ 5,230

2019 Dispositions:

New York Six MOBs ( one property)

August 22, 2019 $ 13,600 $ 2,883

Ocean Park (5)

August 1, 2019 3,600 ( 152 )

New York Six MOBs ( five properties)

February 6, 2019 45,000 6,059

Totals $ 62,200 $ 8,790

(1) Impairment charges of $ 34.0 million were recorded during the year ended December 31, 2021.

(2) Impairment charges of $ 14.6 million and $ 19.8 million were recorded during the years ended December 31, 2020 and 2019, respectively.

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(5) Impairment charges of $ 3.6 million were recorded during the year ended December 31, 2019.

(5) Impairment charges of $ 19,000 were recorded during the year ended December 31, 2019.

The sales of the properties noted above did not represent a strategic shift that has a major effect on the Company’s operations and financial results.

Accordingly, the results of operations of these properties remain classified within continuing operations for all periods presented until the respective sale dates.

2021 Dispositions

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

During the fourth quarter of 2021, the Company sold two MOBs in Virginia for an aggregate contract purchase price of $ 37.8 million, which resulted in gains on sale of $ 1.3 million.

These gains are included in the consolidated statement of operations for the year ended December 31, 2021.

No impairments were previously recorded on these properties.

During the second quarter of 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 year ended December 31, 2021.

The Company had previously recorded impairments on these properties (see dispositions table above).

During the first quarter of 2021, the Company transferred four SHOP properties located 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 sold in the transaction was received from the buyer.

The Company recorded a loss on sale of $ 0.2 million related to this transaction in the year ended December 31, 2021.

The Company had previously recorded impairments on these properties (see dispositions table above).

2020 Dispositions

On December 16 2020, the Company completed the sale of its skilled nursing facility in Lutz, Florida for a contract purchase price of $ 20.0 million, resulting in a gain on sale of real estate investments of $ 3.8 million recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.

At closing, $ 17.6 million of net proceeds were used to repay amounts outstanding under the Revolving Credit Facility.

The Company had previously recorded impairments on these properties (see dispositions table above).

On November 2, 2020 the initial closing under the PSA pursuant to which the Company had agreed to sell 11 Michigan SHOPs occurred.

The contract purchase price for the 11 Michigan SHOPs was $ 11.8 million, resulting in a loss on sale of $ 0.9 million on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.

At the initial closing, the Company received payment of the full $ 11.8 million sales price for all 11 of the Michigan SHOPs, less $ 0.8 million held in escrow, and transferred seven of the properties to the buyer.

The remaining four properties were transferred to the buyer a second closing separate closings in the first quarter of 2021 when the $ 0.8 million held in escrow was released to the buyer.

Of the properties transferred at the initial closing, four had been part of the borrowing base under the Credit Facility, one was part of the collateral pool under the Fannie Mae Master Credit Facility with Capital One and two were unencumbered.

Of the properties transferred at the second closing, three were part of the borrowing base under the Credit Facility until the initial closing and one was unencumbered.

At the initial closing, $ 4.2 million of the net proceeds was used to repay amounts outstanding under the Fannie Mae Master Credit Facility with Capital One, $ 4.4 million of the net proceeds were used to repay amounts outstanding under the Revolving Credit Facility, with the remainder used for closing costs.

For the avoidance of any doubt, all impairments related to the disposal of the 11 Michigan SHOP assets were recognized in the year ended December 31, 2020.

The Company had previously recorded impairments on these properties (see dispositions table above).

On March 19, 2020 the Company disposed of one MOB property for a contract purchase price of $ 8.6 million, resulting in a gain on sale of $ 2.3 million.

2019 Dispositions

On February 6, 2019, the Company sold five of the MOB properties within the State of New York (the “New York Six MOBs”) for a contract sales price of $ 45.0 million, resulting in a gain on sale of real estate investments of $ 6.1 million which is included on the Consolidated Statement of Operations for the year ended December 31, 2019.

The Company had reconsidered the intended holding period for all six of the New York Six MOBs due to various market conditions and the potential to reinvest in properties generating a higher yield.

On July 26, 2018, the Company had originally entered into a PSA for the sale of the New York Six MOBs, for an aggregate contract sale price of approximately $ 68.0 million and subsequently, on September 25, 2018, the Company further amended the PSA to decrease the aggregate contract sale price to $ 58.8 million.

The one remaining New York Six MOB was sold for a contract sales price of $ 13.6 million on August 22, 2019, resulting in a gain on sale of real estate investments of $ 2.9 million recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2019.

No impairments were previously recorded on these properties.

During the first quarter of 2019, the Company reconsidered the intended holding period for one of its SHOPs located in Brookings, OR (“Ocean Park”) due to various market conditions and the potential to reinvest in properties generating a higher yield.

On March 21, 2019, the Company entered into a PSA for the sale of Ocean Park, for an aggregate contract sale price of approximately $ 3.6 million.

On April 1, 2019, the Company amended the purchase and sale agreement to decrease the aggregate contract sale price to $ 3.5 million.

In connection with this amendment, the Company recognized an impairment

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December 31, 2021

charge of approximately $ 19,000 on Ocean Park during the second quarter of 2019, which is included on the consolidated statement of operations and comprehensive loss.

On August 1, 2019, the Company closed its disposition of Ocean Park resulting in a loss on sale of real estate investments of $ 0.2 million recorded in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2019.

The following is a summary of impairments taken during the years ended December 31, 2021, 2020 and 2019:

Year Ended December 31,

(In thousands) 2021 2020 2019

Assets Held for Sale

Assets held for use 40,951 16,876 33,335

Total $ 40,951 $ 36,446 $ 55,969

For additional information on impairments related to assets held for sale and assets held for use, see the “Assets Held for Sale and Related Impairments” and “Assets Held for Use and Related Impairments” sections below.

Assets Held For Sale and Related Impairments

When assets are identified by management as held for sale, the Company reflects them separately on its balance sheet and stops recognizing depreciation and amortization expense on the identified assets and estimates the sales price, net of costs to sell, of those assets.

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For held-for-sale properties, the Company predominately uses the contract sale price as fair market value.

Balance Sheet Details - Assets Held for Sale

There were no properties classified as held for sale as of December 31, 2021.

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

(In thousands) 2020 (1)

Buildings, fixtures and improvements ( 55 )

Assets held for sale $ 90

(1) Assets held for sale as of December 31, 2020 relates to four Michigan SHOPs.

In January 2020, the Company entered into a PSA for the sale of a portfolio of 14 SHOPs located in Michigan (the “Michigan SHOPs”) as a single portfolio for $ 71.8 million.

Accordingly, all 14 of these SHOPs were classified as held for sale as of December 31, 2019.

During April, 2020, the PSA was amended so that only 11 of the Michigan SHOPs were to be sold pursuant to this PSA for $ 11.8 million.

As a result of the amended PSA from April 2020, the three remaining Michigan SHOPs at that time no longer qualified as held for sale and were reclassified to assets held for use at their original carrying values as of March 31, 2020 and an additional $ 0.7 million in catch-up depreciation was recorded in the third quarter of 2020.

In addition, the original deposit made by the buyer was reduced from $ 1.0 million to $ 0.3 million.

In October 2020, the PSA was amended to provide that the full $ 11.8 million sales price for all 11 Michigan SHOPs would be paid at an initial closing which occurred in November 2020, when seven of the properties were transferred to the buyer with the remaining four properties scheduled to be transferred to the buyer at a second closing, which occurred in the first quarter of 2021.

This amendment to the PSA also provided that $ 0.8 million of the sales price would be held in escrow and returned to the buyer at the second closing;

provided that, if the PSA is terminated before the second closing closings due to a material default by the buyer, the Company will receive the escrowed amount.

This amount was returned to the buyer at final closing.

As a result, it represented an effective reduction in the sale price and the Company reflected an additional impairment loss to reflect this.

The Company determined that the four Michigan SHOPs should be classified as held for sale as of December 31, 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

of December 31, 2020, of the four Michigan SHOPs that were classified as held for sale, three Michigan SHOPs were part of the borrowing base of the Credit Facility and one was unencumbered.

Held for Sale Impairments - 2020

As a result of the amendment to the PSA in April 2020, in which the number of properties under sale was reduced from 14 to 11 , and in which the total consideration was reduced from $ 71.8 million to $ 11.8 million, the Company recorded an additional impairment charge of $ 19.6 million for the year ended December 31, 2020 related to the Michigan SHOP assets held for sale.

Held for Sale Impairments - 2019

During the year ended December 31, 2019 the Company recorded an impairment charge of $ 22.6 million related to assets held for sale, representing the amount by which the carrying amount of the Michigan SHOPs exceeded the Company’s estimate, at that time, of the net sales price of the Michigan SHOPs.

Assets Held for Use and Related Impairments

There were no assets held for sale as of December 31, 2022 or December 31, 2021.

Assets Held for Use

When circumstances indicate the carrying value of a property classified as held for use may not be recoverable, the Company reviews the property for impairment.

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Where more than one possible scenario exists, the Company uses a probability weighted approach in estimating cash flows.

As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses for impairment may be realized in the future.

If the undiscounted cash flows over the expected hold period are less than the carrying value, the Company reflects an impairment charge to write the asset down to its fair value.

The Company owns held for use properties for which the Company may from time to time reconsider the projected cash flows due to various performance indicators, and where appropriate, the Company evaluates the impact on its ability to recover the carrying value of such properties based on the expected cash flows over its intended holding period.

The Company makes certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values.

Where more than one possible scenario exists, the Company uses a probability weighted approach.

As of December 31, 2019, the Company was actively considering plans to sell three assets in Florida including the recently completed development project in Jupiter, Florida and the Company’s two skilled nursing facilities in Lutz, Florida and Wellington, Florida.

The Company began marketing the properties in 2020 and, during the three months ended June 30, 2020, the Company received multiple bids and accepted a non-binding letter of intent from a prospective buyer to purchase the completed development project in Jupiter, Florida for $ 65.0 million and the Company’s two skilled nursing facilities in Lutz, Florida and Wellington, Florida for $ 20.0 million and $ 33.0 million, respectively.

During August 2020, the Company entered into PSAs with the buyer on the terms generally set forth in the letter of intent.

The property in Lutz, Florida was sold in December 2020 (see “Dispositions” above) and the property in Jupiter, Florida and the property in Wellington, Florida were sold in May 2021.

The Company used the proceeds of the sales to repay amounts outstanding under its Revolving Credit Facility.

Held for Use Impairments — 2021

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 in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.

During the second quarter of 2021, the Company began to actively consider plans to sell a 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,

As these factors are difficult to predict and

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December 31, 2022

on an undiscounted basis over its intended holding period, did not recover the carrying value of the property.

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 second quarter of 2021, which is included in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.

The LaSalle Tenant

On July 1, 2020, the Company transitioned four triple-net leased properties in Texas (collectively, the “LaSalle Properties”) from the former triple-net leased healthcare facilities segment to the SHOP segment, and the LaSalle Properties are now leased to the Company’s TRS and operated and managed on the Company’s behalf by a third-party operator.

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 December 31, 2021 and December 2020 as the Company does not believe recovery is likely against the LaSalle Tenant.

During the third quarter of 2021, the Company began to actively market the LaSalle Properties for sale, and a non-binding letter of intent was signed in the fourth quarter for an aggregate contract sales price of $ 12.4 million.

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

The fair value measurement was determined by estimated discounted cash flows using three significant unobservable inputs, including the cash flow discount rate, terminal capitalization rate, and the estimated stabilized occupancy range.

The Company recorded an impairment charge of $ 34.0 million during the year ended December 31, 2021 which is included in the consolidated statement of operations and comprehensive income.

There can be no assurance that the sale of these properties will close on the terms contained in the purchase and sale agreement, if at all.

Held for Use Impairments — 2020

During the year ended December 31, 2020, as a result of the Company’s marketing efforts during the COVID-19 pandemic which concluded with a PSA in August 2020, the Company recorded an additional impairment charge of $ 16.9 million on its completed development project in Jupiter, Florida and its skilled nursing facility in Wellington, Florida.

The impairment charge represents the amount by which the carrying amount of the properties exceeded the Company’s estimate of the net sales price set forth in the PSA described above.

Held for Use Impairments — 2019

During the year ended December 31, 2019, the Company began to evaluate the properties in Lutz, Florida, Wellington, Florida and its completed development property in Jupiter, Florida for potential sales.

As a result of these potential changes in plans, the Company concluded these held for use assets were impaired and recognized impairment charges in the aggregate of $ 33.3 million to reduce their carrying value to estimated fair value.

The Company obtained third-party appraisals of all three properties (Lutz, Wellington, and Jupiter) which estimated fair value primarily applying an income approach using stabilized cash flows and capitalization rates of 9.0 %, 9.0 % and 7.0 %, respectively.

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.

Impairment Charges

The following table presents impairment charges by segment recorded during the years ended December 31, 2022, 2021 and 2020:

Year Ended December 31,

(In thousands) 2022 2021 2020

Illinois skilled nursing facilities (1) (7)

$ 10,644 $ — $ —

Sassafras MOB (2) (7)

Sun City MOB (3) (7)

Total MOB impairment charges 12,488 6,082 —

SHOP Segment:

Various held for use SHOPs (4) (7)

LaSalle Properties (5) (7)

Wellington, Florida skilled nursing facility (6) (7)

Michigan properties (8)

NuVista Jupiter (7) (9)

Total SHOP impairment charges 15,142 34,869 36,446

Total impairment charges $ 27,630 $ 40,951 $ 36,446

(1) These seven properties were impaired after the Company received an offer by the tenant to purchase all seven properties, which caused the Company to reassess its expected holding period for these properties.

As of December 31, 2022, these properties were not disposed nor are under contract for disposal.

(2) The Company began marketing this property for sale in the fourth quarter of 2022.

As of December 31, 2022 this property was not disposed nor under contract for disposal.

(3) This property has been actively marketed for sale since September 2021.

As of December 31, 2022 this property was not disposed nor under contract for disposal.

(4) Consists of eight properties actively marketed for sale.

Of the eight properties, six properties were impaired in year ended December 31, 2022.

As of December 31, 2022, these properties were not disposed, but five of these properties are under contract for disposal.

(5) These four properties were disposed in the year ended December 31, 2022.

(6) This property was disposed in the year ended December 31, 2021.

The Company recorded this impairment charge in the year ended December 31, 2021 to reduce the carrying value of the property to its estimated fair value as determined by an amendment to its purchase and sale agreement.

The Company had previously recorded $ 2.3 million of impairment charges on this property in the year ended December 31, 2020.

(7) These properties were impaired to reduce their carrying values to their estimated fair values, respectively, as determined by the Assets Held for Use approach described above.

(8) These properties were disposed in the first quarter of 2021 and the fourth quarter of 2020.

(9) This property was disposed in the second quarter of 2021.

HEALTHCARE TRUST, INC.

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Shiloh - Illinois

1 13,384 13,684 4.34 % 4.34 % Fixed March 2026

1 13,071 13,384 4.34 % 4.34 % Fixed Jan.

BMO CMBS 9 42,750 42,750 2.89 % 2.89 % Fixed Dec.

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(1) Calculated on a weighted average basis for all mortgages outstanding as of December 31, 2022 and December 31, 2021.

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

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

For the Capital One MOB Loan, the effective rate does not include the effect of amortizing the amount paid to terminate the previous pay-fixed swap.

See Note 7 — Derivatives and Hedging Activities for additional details.

(2) Variable rate loan, based on 30-day LIBOR, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements.

In connection with the amendment to this loan in December 2019 (see additional details below), the Company terminated the previous interest rate swap agreements and entered into new interest rate swap agreements (see Note 7 — Derivatives and Hedging Activities for additional details).

(3) The Company assumed this fixed rate mortgage when it acquired a property during the year ended December 31, 2020.

(2) Variable rate loan, based on daily SOFR as of December 31, 2022 and based on 30-day LIBOR as of December 31, 2021, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements.

The Company allocated $ 378.5 million of its “pay-fixed” interest rate swaps to this mortgage consistently as of December 31, 2022 and 2021.

(3) Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining financing.

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Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close.

As of December 31, 2021, the Company had pledged $ 925.3 million in real estate investments, at cost, as collateral for its $ 591.8 million of gross mortgage notes payable.

As of December 31, 2022, the Company had pledged $ 0.9 billion in real estate investments, at cost, as collateral for its $ 585.2 million of gross mortgage notes payable.

This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable secured by these properties.

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As of December 31, 2022, the Company was in compliance with these financial covenants.

See Note 5 — Credit Facilities for additional details - Future Principal Payment and LIBOR Transition for schedule of principal payment requirements of the Company’s Mortgage Notes and Credit Facilities and discussion of the expected cessation of LIBOR publication.

See Note 5 — Credit Facilities - Future Principal Payments and LIBOR Transition for a schedule of principal payment requirements of the Company’s Mortgage Notes and Credit Facilities and a discussion of the expected cessation of LIBOR publication.

On November 15, 2021, the Company, entered into a $ 42.8 million loan agreement (the “BMO MOB Loan”) with Bank of Montreal (“BMO”).

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The BMO MOB Loan permits BMO to securitize the entire BMO MOB Loan or any portion thereof.

HEALTHCARE TRUST, INC.

2 unchanged sentences

December 31, 2022

included as part of the borrowing base prior to the BMO MOB Loan, (ii) fund approximately $ 2.5 million in deposits required to be made at closing into reserve accounts required under the loan agreement.

The remaining $ 2.4 million net proceeds available to the Company are to be used for general corporate purposes, including future acquisitions.

Fox Ridge Refinancing

On January 29, 2021, the Company entered into interest rate reduction modifications (the “Fox Ridge Modifications”) for two of its mortgages secured by the Fox Ridge Chenal and Fox Ridge North Little Rock properties which reduced the interest rate on both mortgages.

Prior to the Fox Ridge Modifications, the mortgages bore interest at an effective rate of 3.98 % per annum which was reduced to an effective rate of 2.95 % per annum.

Capital One MOB Loan

On June 30, 2017, Capital One, National Association (“Capital One”), as administrative agent and lender, and certain other lenders (collectively, the “MOB Lenders”), made a loan in the aggregate amount of $ 250.0 million (the “MOB Loan”) to certain subsidiaries of the OP.

On December 20, 2019, the Company, through certain subsidiaries of the OP, entered into an amendment and restatement of the MOB Loan originally dated as of June 30, 2017 among the OP’s subsidiaries and Capital One, as administrative agent and lender, and certain other lenders.

As a result, the principal amount outstanding increased from approximately $ 242.0 million to $ 378.5 million the number of properties mortgaged as collateral for the loan increased from 31 properties (all medical office buildings) to 41 properties ( 29 medical office buildings that continued to serve as collateral for the loan as well as an additional ten medical office buildings and two triple net leased hospitals).

At the closing of the amendment and restatement of the MOB Loan, after payment of closing costs and swap termination fees, the Company received $ 127.7 million in net refinancing proceeds in excess of the approximately $ 242.0 million principal amount outstanding prior to the closing.

Of these excess proceeds, approximately $ 63.5 million were used to repay amounts outstanding under the Revolving Credit Facility (as defined below) in order to obtain a release of 12 of the mortgaged properties from the borrowing base thereunder, and approximately $ 61.5 million of the remaining proceeds were used to repay additional amounts outstanding under the Revolving Credit Facility.

Prior to the amendment and restatement of the MOB Loan, the MOB Loan bore interest at a variable rate equal to LIBOR plus 2.5 % per annum.

Subsequent to the amendment and restatement of the MOB Loan, the MOB Loan bears interest at a variable rate equal to LIBOR plus 2.0 % per annum.

The MOB Loan requires the Company to pay interest on a monthly basis with the principal balance due on the maturity date which was extended from June 30, 2022 to December 20, 2026 after the amendment and restatement of the MOB Loan.

In connection with the amendment and restatement of the MOB Loan, the OP terminated two interest rate swaps and executed one interest rate swap on the new amount of the MOB Loan, fixing the interest rate exposure at 3.66 %.

See Note 7 — Derivatives and Hedging Activities for additional information on the Company’s outstanding derivatives.

The Company may pre-pay the MOB Loan, in whole or in part, at any time, with payment of a prepayment premium equal to (a) 3.0 % for prepayments made prior to December 31, 2020, (b) 2.0 % for prepayments made between January 1, 2021 and December 31, 2021, and (c) 1.0 % for prepayments made between January 1, 2022 and December 31, 2022.

Thereafter, no prepayment premium is required.

In addition, mortgaged properties may be released or replaced subject to certain conditions and limitations, including prepayment of not more than 110 % of the principal amount allocated to the property together with any applicable prepayment premium and maintenance, giving effect to the release or replacement, of a minimum of either 25 mortgaged properties or $ 283.9 million principal amount outstanding, a minimum debt yield and a minimum debt service coverage ratio.

In connection with the amendment to the MOB Loan, the OP entered into an amended and restated guaranty of recourse obligations (the “Guaranty”) and an amended and restated hazardous materials indemnity agreement (the “Environmental Indemnity”) for the benefit of Capital One as administrative agent for the lenders on substantially identical terms to the guaranty and environmental indemnity entered into in connection with the original loan agreement entered into in June 2017.

Pursuant to the Guaranty, the OP has guaranteed, among other things, specified losses arising from certain actions of any of the OP’s subsidiaries, including fraud, willful misrepresentation, certain intentional acts, misapplication of funds, physical waste, and failure to pay taxes.

The Guaranty requires the Company to maintain a certain minimum of shareholders’ equity on its balance sheet.

Pursuant to the Environmental Indemnity, the OP and the Company’s subsidiaries that directly own or lease the mortgaged properties have indemnified the MOB Lenders against losses, costs or liabilities related to certain environmental matters.

The amendment and restatement of the MOB Loan was considered an extinguishment of the old loan and a new loan agreement.

Accordingly, fees and expense for the new loan have been capitalized and the unamortized fees relating to the old

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

loan of approximately $ 3.0 million were written off as a charge to interest expense in the statement of operations for the year ended December 31, 2019.

Multi-Property CMBS Loan

On April 10, 2018, the Company, entered into a $ 118.7 million loan agreement (the “Multi-Property CMBS Loan”) with KeyBank National Association (“KeyBank”).

The Multi-Property CMBS Loan requires monthly interest-only payments, with the principal balance due on the maturity date.

The Multi-Property CMBS Loan permits KeyBank to securitize the entire Multi-Property CMBS Loan or any portion thereof.

At the closing of the Multi-Property CMBS Loan, the net proceeds after accrued interest and closing costs were used to (i) repay approximately $ 80.0 million of indebtedness under the Revolving Credit Facility, under which 14 of the properties were included as part of the borrowing base prior to the Multi-Property CMBS Loan, (ii) fund approximately $ 3.8 million in deposits required to be made at closing into reserve accounts required under the loan agreement.

The remaining $ 33.0 million net proceeds available to the Company to be used for general corporate purposes, including future acquisitions.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

At the closing of the BMO MOB Loan, the net proceeds after accrued interest and closing costs were used to (i) repay approximately $ 37.0 million of indebtedness under the Revolving Credit Facility, under which nine of the properties were included as part of the borrowing base prior to the BMO MOB Loan, (ii) fund approximately $ 2.5 million in deposits required to be made at closing into reserve accounts required under the loan agreement.

The remaining $ 2.4 million net proceeds available to the Company were used for general corporate purposes and acquisitions.

Note 5 — Credit Facilities, Net

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$ 30,000 $ — 7.26 % — % Variable Mar.

150,000 150,000 4.11 % 4.95 % Variable (6) Mar.

150,000 150,000 5.11 % 4.11 % Fixed (6) Mar.

Deferred financing costs

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(5) Calculated on a weighted average basis for all credit facilities outstanding as of December 31, 2022 and 2021, respectively.

For the LIBOR based loans that have not been fixed, the LIBOR rate in effect at the balance sheet date was utilized.

For LIBOR based loans that have been fixed, the effective rate after consideration of the interest rate swap was utilized.

See Note 7 — Derivatives and Hedging Activities for additional details.

(6) Variable rate loan, based on LIBOR, all of which was fixed as a result of entering into “pay-fixed” interest rate swap agreements (see Note 7 — Derivatives and Hedging Activities for additional details).

(7) Variable rate loan which is capped as a result of entering into interest rate cap agreements (see Note 7 — Derivatives and Hedging Activities for additional details).

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

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

(7) The effective rates above only include the impact of designated hedging instruments.

The Company also has seven non-designated interest rate cap agreements with an aggregate notional amount of $ 354.6 million which limits 30-day LIBOR to 3.50 %.

The Company did not designate these derivatives as hedges and accordingly, the changes in value and any cash received from these derivatives are presented within gain (loss) on derivative instruments on the consolidated statements of operations and comprehensive income (see discussion below and Note 7 — Derivatives and Hedging Activities for additional details).

Inclusive of the impact of these interest rate caps on these non-designated derivatives, the economic interest rate on the Capital One Fannie Mae Facility was 5.26 %, and the economic interest rate on the KeyBank Fannie Mae Facility was 5.96 % as of December 31, 2022.

(8) During the year ended December 31, 2022, the Company exercised its option to extend the maturity one year to March 2024.

(9) Effective interest rate below for variable rate debt gives effect to any “pay-fixed” swap entered into by the Company allocated to the loan for presentation purposes.

If no “pay-fixed” swaps are allocated, the effective interest rate below represents the variable rate (or contractual floor if appropriate) and the applicable margin in effect as of December 31, 2022 and 2021.

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

(10) The Company has interest “Pay-fixed” swaps which are designated as cash flow hedges on outstanding combined borrowings.

To present average rates in the table above, the Company historically allocated the $ 50.0 million notional amount of a “Pay-fixed” swap to its Revolving Credit Facility with any remaining notional amounts applied to its Capital One Fannie Mae Facility.

As of December 31, 2021, all $ 50.0 million of the “Pay-fixed” swap was allocated to the Capital One Fannie Mae Facility because there were no outstanding borrowings under the Revolving Credit Facility.

As of December 31, 2020, all $ 50.0 million of the ‘Pay-fixed” swap was allocated to the Revolving Credit Facility.

All other “Pay-fixed” swaps were allocated to the Capital One MOB mortgage loan and the Term Loan consistently for both December 31, 2021 and 2020.

As of December 31, 2021, the carrying value of our real estate investments, at cost was $ 2.6 billion, with $ 0.9 billion of this amount pledged as collateral for mortgage notes payable, $ 0.6 billion of this amount pledged to secure advances under the Fannie Mae Master Credit Facilities and $ 1.0 billion of this amount comprising the borrowing base of the Credit Facility.

These real estate assets are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, unless, as applicable, the existing indebtedness associated with the property is satisfied or the property is removed from the borrowing base of the Credit Facility, which would impact availability thereunder.

Unencumbered real estate investments, at cost as of December 31, 2021 was $ 110.4 million, although there can be no assurance as to the amount of liquidity the Company would be able to generate from using these unencumbered assets as

Interest rate caps are not considered unless the caps, if any, are currently in effect.

(10) The Company has interest “pay-fixed” swaps which are designated as cash flow hedges on LIBOR- or SOFR-based outstanding combined borrowings.

Prior to the Fourth Amendment (as defined below) which, among other things, changed the reference rate on the Credit Facility from LIBOR to SOFR, to present average rates in the table above, the Company historically allocated the notional amount of a “pay-fixed” swap to the outstanding amounts of its Credit Facility (both the Revolving Credit Facility and the Term Loan) with any remaining notional amounts applied to its Capital One Fannie Mae Facility.

During the three months ended September 30, 2022, the Company converted $ 150.0 million of its “pay-fixed” swaps from LIBOR to SOFR.

As of December 31, 2022, the Company allocated the $ 150.0 million SOFR-based “pay-fixed” swaps to the Term Loan, which were also allocated to the

HEALTHCARE TRUST, INC.

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December 31, 2022

collateral for mortgage loans or adding them to the borrowing base of our Credit Facility.

Pursuant to the August 10, 2020 amendment to the Credit Facility, any acquired properties must be added to the borrowing base of the Credit Facility, and any net proceeds from the dispositions of any unencumbered properties must be used to repay amounts outstanding under the Revolving Credit Facility.

Term Loan as of December 31, 2021 when the Term Loan and swaps were LIBOR-based.

As of December 31, 2022 and 2021, $ 50.0 million of LIBOR-based “pay-fixed” swaps were allocated to the Capital One Fannie Mae Facility because there were no LIBOR-based amounts outstanding under the Revolving Credit Facility in either period.

The $ 50.0 million of LIBOR-based “pay-fixed” swaps were terminated subsequent to December 31, 2022.

See Note 17 — Subsequent Events for additional information.

As of December 31, 2022, the carrying value of our real estate investments, at cost was $ 2.6 billion, with $ 0.9 billion of this amount pledged as collateral for mortgage notes payable, $ 0.6 billion of this amount pledged to secure advances under the Fannie Mae Master Credit Facilities and $ 0.9 billion of this amount comprising the borrowing base of the Credit Facility.

All of the real estate assets pledged to secure debt or comprising the borrowing base of 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 December 31, 2022 was $ 0.1 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.

Currently, any properties that the Company acquires must be added to the borrowing base of the Credit Facility, and any net proceeds from the dispositions of any unencumbered properties must be used to repay amounts outstanding under the Revolving Credit Facility (as defined below).

Credit Facility

On March 13, 2019, the Company entered into an amended and restated senior secured credit facility (the “Credit Facility”), which consists of two components, a revolving credit facility (the “Revolving Credit Facility”) and a term loan (the “Term Loan”).

In both March and August 2020, the Credit Facility was further amended, and the terms of the Credit Facility giving effect to those amendments are generally described below.

The amended and restated senior secured credit facility (the “Credit Facility”), consists of two components, a revolving credit facility (the “Revolving Credit Facility”) and a term loan (the “Term Loan”).

The Revolving Credit Facility is interest-only and matures on March 13, 2023, subject to a one-year extension at the Company’s option.

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The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility have been pledged for the benefit of the lenders thereunder.

As of December 31, 2021, $ 150.0 million was outstanding under the Term Loan, and no amounts were outstanding under the Revolving Credit Facility.

The unused borrowing availability under the Revolving Credit Facility was $ 236.6 million.

As of December 31, 2022, $ 150.0 million was outstanding under the Term Loan, and $ 30.0 million was outstanding under the Revolving Credit Facility.

The unused borrowing availability under the Revolving Credit Facility was $ 203.4 million based on the borrowing base as of December 31, 2022.

On August 11, 2022, the Company, the OP, KeyBank National Association individually and as agent for the lenders and the lenders from time to time a party under the Credit Facility, among others, entered into the fourth amendment to the Credit Facility (the “Fourth Amendment”).

Without the Fourth Amendment, the Company would have been in default of the reamendment Fixed Charge Coverage Ratio covenant (defined below) for the four fiscal quarter period ended June 30, 2022.

Pursuant to the Fourth Amendment, the lenders agreed to reduce the minimum required Fixed Charge Coverage Ratio covenant to permit the Company to avoid any Default or Events of Default through the amendment date.

The Fourth Amendment also eliminated the LIBOR-based rate option, among other changes.

The terms described below represent the terms pursuant to the Fourth Amendment.

The Company is required to maintain a combination of cash, cash equivalents and availability for future borrowings under the Revolving Credit Facility totaling at least $ 50.0 million.

Pursuant to the 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 % and the Covenant Relief Period has terminated (the “Commencement Quarter”).

Certain other restrictions and conditions described below will no longer apply beginning in the 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, the Company’s ratio of consolidated total indebtedness to consolidated total asset value (expressed as a percentage) is less than 62.5 % and the Company’s Fixed Charge Coverage Ratio (as defined below) for the most recently ended four fiscal quarters is not less than 1.50 to 1.00 (the “Commencement Quarter”).

The fiscal quarter ended June 30, 2021 was the first quarter that could have been the Commencement Quarter.

The Company satisfied the conditions during the quarter ended December 31, 2021 in order to elect the quarter ending March 31, 2022 as the Commencement Quarter, but chose not 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 prepay amounts outstanding under the Revolving Credit Facility.

The Company may reborrow any amounts so repaid if all relevant conditions are met, including sufficient availability for future borrowings.

There can be no assurance these conditions will be met.

In addition, commencing on August 10, 2020 and until the Commencement Quarter, the Company has the option to have amounts outstanding under the Revolving Credit Facility bear interest at an annual rate equal to either:

(i) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.85 % to 2.60 %;

or (ii) the Base Rate (as defined in the Credit Facility), plus an applicable margin that ranges, depending on the Company’s leverage, from 0.60 % to 1.35 %.

Commencing on the first day of the Commencement Quarter, the Company will have the option to have amounts outstanding under the Revolving Credit Facility bear interest at an annual rate equal to either:

(a) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.60 % to 2.35 %;

or (b) the Base Rate, plus an applicable margin that ranges, depending on the Company’s leverage, from 0.35 % to 1.10 %.

As of December 31, 2021 the Company had elected to use the LIBOR option for all of our borrowings under the Credit Facility.

Further, commencing on August 10, 2020 and until the Commencement Quarter, the Company has the option to have amounts outstanding under the Term Loan bear interest at an annual rate equal to either:

(i) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.80 % to 2.55 %;

or (ii) the Base Rate, plus an applicable margin that ranges, depending on the Company’s leverage, from 0.55 % to 1.30 %.

Commencing on the first day of the Commencement Quarter, the Company will have the option to have amounts outstanding under the Term Loan bear interest at an annual rate equal to either:

(a) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.55 % to 2.30 %;

The Company did not satisfy the conditions during the quarter ended December 31, 2022 in order to elect the quarter ending March 31, 2023 as the Commencement Quarter.

HEALTHCARE TRUST, INC.

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December 31, 2022

or (b) the Base Rate, plus an applicable margin that ranges, depending on the Company’s leverage, from 0.30 % to 1.05 %.

Pursuant to the amendment to the Credit Facility in August 2020, the “floor” on LIBOR was increased from 0.00 % to 0.25 %.

As of December 31, 2021, the Revolving Credit Facility and the Term Loan had an effective interest rate per annum equal to 0 % and 4.11 %, respectively.

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, to the extent there are any such amounts outstanding.

The Company may borrow additional amounts if all relevant conditions are met, including sufficient availability for future borrowings.

There can be no assurance these conditions will be met at the time of any particular borrowing.

Until the Commencement Quarter, the Company may not pay distributions to holders of common stock in cash or any other cash distributions (including repurchases of shares of the Company’s common stock), subject to certain exceptions.

These exceptions include paying dividends on the 7.375 % Series A Cumulative Redeemable Perpetual Preferred Stock, $ 0.01 par value per share (“Series A Preferred Stock”), the 7.125 % Series B Cumulative Redeemable Perpetual Preferred Stock, $ 0.01 par value per share (“Series B 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 or Series B Preferred Stock) if a default or event of default exists or would result therefrom.

Beginning in the Commencement Quarter, the Company will be able to pay cash distributions to holders of common stock, subject to the restrictions described below.

The Company may pay cash distributions beginning in the Commencement Quarter and the aggregate distributions (as defined in the Credit Facility and including dividends on Series A Preferred Stock or Series B 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.

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”), the 7.125 % Series B Cumulative Redeemable Perpetual Preferred Stock, $ 0.01 par value per share (“Series B Preferred Stock”) or any other class of preferred stock that 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 or Series B Preferred Stock or any other preferred stock) if a default or event of default exists or would result therefrom.

Beginning in the Commencement Quarter, the Company will be able to pay cash distributions to holders of common stock, subject to the restrictions described below and the aggregate distributions (as defined in the Credit Facility and including dividends on Series A Preferred Stock, Series B Preferred Stock or any other class of preferred stock that may be issued) for any period of four fiscal quarters may not exceed 95 % of Modified FFO (as defined in the Credit Facility) for the same period based only on fiscal quarters after the Commencement Quarter.

In addition, beginning in the Commencement Quarter, the Company will be permitted to repurchase up to $ 50.0 million of shares of its common stock (including amounts previously repurchased during the term of the Revolving Credit Facility) if, after giving effect to the repurchases, the Company maintains cash and cash equivalents of at least $ 30.0 million and the Company’s ratio of consolidated total indebtedness to consolidated total asset value (expressed as a percentage) is less than 55.0 %.

The Credit Facility prohibits the Company from exceeding a maximum ratio of consolidated total indebtedness to consolidated total asset value, and requires the Company to maintain a minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges and a minimum consolidated tangible net worth.

The maximum ratio of consolidated total indebtedness to consolidated total asset value was 67.5 % for the period from July 1, 2020 through June 30, 2021 and is 65 % thereafter unless and until the Commencement Quarter, following which that ratio will be 62.5 %.

The minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges (the “Fixed Charge Coverage Ratio”) was 1.50 to 1.00 for the period from July 1, 2020 through March 31, 2021, 1.55 to 1.00 for the period from April 1, 2021 through June 30, 2021, and 1.60 to 1.00 thereafter, provided that from November 12, 2021 until the earlier of December 31, 2022 and such earlier date as the Company elects to terminate this relief (such period, the “Covenant Relief Period”), the Fixed Charge Coverage Ratio that the Company must satisfy based on the four most recently ended fiscal quarters will be reduced to 1.50 to 1.00 (see below for waiver issued on November 12, 2021).

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 December 31, 2021, the Company had a minimum consolidated tangible net worth of $ 1.6 million.

The Company would have been in default of the Fixed Charge Coverage Ratio for the four fiscal quarter period ended September 30, 2021.

Pursuant to the terms of the third amendment entered into on November 12, 2021 by the Company, the agent and the requisite lenders under the Credit Facility, the lenders waived any defaults or event of defaults under the covenant requiring the Company to maintain a Fixed Charge Coverage Ratio of 1.60 to 1.00 for the quarter ended September 30, 2021 and any further defaults of Events of Default (as described in the Credit Facility) resulting from the breach of the Fixed Charge Coverage Ratio covenant.

In addition, as described above, the Fixed Charge Coverage Ratio the Company is required to maintain was amended from 1.60 to 1.00 to 1.50 to 1.00 for the Covenant Relief Period.

There can be no assurance the Company’s lenders will consent to any amendments or waivers that may become necessary to comply with the terms of the Credit Facility in the future.

Based upon the Company’s current expectations, the Company believes it will be able to comply with these covenants during the next 12 months.

As of December 31, 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 comply with these covenants.

Under the Credit Facility, the Company must comply with covenants governing the maximum ratio of consolidated total indebtedness to consolidated total asset value, and requiring the Company to maintain a minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges, a minimum consolidated tangible net worth and a minimum debt service coverage ratio.

Specifically, the maximum ratio of consolidated total indebtedness to consolidated total asset value is presently 65 % unless and until the Commencement Quarter, following which the ratio will be 62.5 %.

The minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges (the “Fixed Charge Coverage Ratio”) that the Company must satisfy based on the four most recently ended fiscal quarters is (a) 1.20 to 1.00 for the period commencing with the quarter ended June 30, 2022 through the quarter ending June 30, 2023, (b) 1.35 to 1.00 for the period commencing with the quarter ending September 30, 2023 through the quarter ending December 31, 2023 and (c) 1.45 to 1.00 for the period commencing with the quarter ending March 31, 2024 and continuing thereafter;

provided, however, that from and after the Commencement Quarter, the Company must satisfy a minimum Fixed Charge Coverage Ratio of 1.50 to 1.00.

The minimum consolidated tangible net worth is the sum of (i) $ 1.2 billion, plus (ii) 75 % of any net offering proceeds (as defined in the Credit Facility) since the Credit Facility closed in March 2019.

As of December 31, 2022, the Company had a consolidated tangible net worth of $ 1.5 billion.

The minimum debt service coverage ratio (calculated similar to the calculation of the Fixed Charge Coverage Ratio but excluding dividends on Series A Preferred Stock, Series B Preferred Stock or any other class of preferred stock that may be issued) that the Company must satisfy based on the four most recently ended fiscal quarters is (a) 1.50 :1.00 for the period commencing with the quarter ended June 30, 2022 through the quarter ending June 30, 2023, (b) 1.65 :1.00 for the period commencing with the quarter ending September 30, 2023 through the quarter ending December 31, 2023 and (c) 1.75 :1.00 for the period commencing with the quarter ending March 31, 2024 and continuing thereafter until the Company elects the Commencement Quarter, after which the debt service coverage ratio covenant will no longer apply.

Additionally, the borrowing base advance rate is 52.5 % until the Company elects the Commencement Quarter, after which the borrowing base advance rate will be 55 %.

In addition, as of December 31, 2022, the Company had the option to have amounts outstanding under the Revolving Credit Facility bear interest at an annual rate equal to either:

(i) SOFR (as defined below), plus an applicable margin that ranges, depending on the Company’s leverage, from 2.10 % to 2.85 %;

or (ii) the Base Rate (as defined in the Credit Facility), plus an applicable margin that ranges, depending on the Company’s leverage, from 0.85 % to 1.60 %.

(a) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.60 % to 2.35 %, plus an additional spread adjustment depending on the length of the interest period;

or (b) the Base Rate, plus an applicable margin that ranges, depending on the Company’s leverage, from 0.35 % to 1.10 %.

As of December 31, 2022 the Company had elected to use the SOFR option for all of its borrowings under the Revolving Credit Facility, to the extent there are any such amounts outstanding.

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December 31, 2022

Further, as of December 31, 2022, the Company has the option to have amounts outstanding under the Term Loan bear interest at an annual rate equal to either:

(i) SOFR, plus an applicable margin that ranges, depending on the Company’s leverage, from 2.05 % to 2.80 %;

or (ii) the Base Rate, plus an applicable margin that ranges, depending on the Company’s leverage, from 0.80 % to 1.55 %.

Commencing on the first day of the Commencement Quarter, the Company will have the option to have amounts outstanding under the Term Loan bear interest at an annual rate equal to either:

(a) SOFR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.55 % to 2.30 %, plus an additional spread adjustment depending on the length of the interest period;

or (b) the Base Rate, plus an applicable margin that ranges, depending on the Company’s leverage, from 0.30 % to 1.05 %.

Pursuant to the terms of the Company’s Credit Facility, the “floor” on SOFR-based rates is 0.25 %.

As of December 31, 2022, the Company had elected to use the SOFR option for all of its borrowings under the Term Loan.

As of December 31, 2022, the Company was in compliance with the financial covenants under the Credit Facility.

As discussed in N o te 2 — Summary of Significant Accounting Policies , the Company has experienced, and continues to experience, negative impacts from rising operating costs, particularly in its SHOP segment, as well as rising variable interest rates.

The Company’s Credit Facility matures in March 2024 and contains various operating covenants (described above) which the Company was in compliance with through December 31, 2022.

Prospectively, based upon the Company’s current expectations, the Company believes its operating results through June 30, 2023 will allow it to comply with these covenants.

However, the Company believes its operating results may not be sufficient to comply with the increased Fixed Charge Coverage Ratio, which increases from 1.20 :1.00 to 1.35 :1.00 commencing with the quarter ending September 30, 2023 and thereafter.

Absent a waiver or modification from the lender group, failure to comply with the Fixed Charge Coverage Ratio would constitute an Event of Default and the balance of the Credit Facility would be due and payable.

The Company has obtained such waivers and modifications from the lender group in the past, but there can be no assurance that such a waiver or modification will be granted in future periods.

Additionally, the Company is exploring long-term secured financing opportunities, utilizing some or all of the Company’s properties as collateral, the proceeds from which the Company believes will be sufficient to repay all amounts outstanding under the Credit Facility, which was $ 180.0 million as of December 31, 2022 ($ 200.0 million including the $ 20.0 million drawn subsequent to December 31, 2022, see Note 17 — Subsequent Events for details).

Fannie Mae Master Credit Facilities

On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master credit facility agreement relating to a secured credit facility with KeyBank (the “KeyBank Facility”) and a master credit facility agreement with Capital One for a secured credit facility with Capital One Multifamily Finance LLC, an affiliate of Capital One (the “Capital One Credit Facility”;

the Capital One Facility and the KeyBank Facility are referred to herein individually a “Fannie Mae Master Credit Facility” and together as the “Fannie Mae Master Credit Facilities”).

the Capital One Facility and the KeyBank Facility are referred to herein individually as “Fannie Mae Master Credit Facility” and together as the “Fannie Mae Master Credit Facilities”).

Advances made under these agreements are assigned by Capital One and KeyBank to Fannie Mae at closing for inclusion in Fannie Mae’s Multifamily MBS program.

Effective October 31, 2016, in conjunction with the execution of the Fannie Mae Master Credit Facilities, the OP entered into two interest rate cap agreements with an unrelated third party, which caps LIBOR interest paid (not giving effect to the applicable margin) on amounts outstanding under the Fannie Mae Master Credit Facilities at a maximum of 3.5 %.

On October 2019, the Company replaced two maturing interest rate cap agreements, effective November 1, 2019 for a total notional amount of $ 88.7 million.

The two interest rate caps agreements extend three existing interest rate caps set to mature on the same date and are not designated as hedges ( see Note 7 — Derivatives and Hedging Activities for additional disclosure regarding the Company’s derivatives).

In connection with the Fannie Mae Master Credit Facilities, the Company was required to enter into interest rate cap agreements.

Periodically, the Company renews these interest rate cap agreements upon their expiration.

As of December 31, 2022, the Company had seven interest rate cap agreements (of which six caps were active as of December 31, 2022 and one has a forward start date as of April 2023) with an aggregate current effective notional amount of $ 354.6 million which caps LIBOR at 3.50 % with terms through April 2024.

The Company does not apply hedge accounting to these agreements and changes in value as well as any cash received are presented within gain (loss) on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive income ( see Note 7 — Derivatives and Hedging Activities for additional disclosure regarding the Company’s derivatives).

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

The Company may request future advances under the Fannie Mae Master Credit Facilities 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.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

Future Principal Payments

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This could occur, for example, if a sufficient number of banks decline to make submissions to the LIBOR administrator.

To transition from LIBOR under the Credit Facility, the Company will either utilize

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

the Base Rate (as defined in the Credit Facility), a SOFR-based rate as a benchmark rate as determined by the Agent in accordance with the terms of the Credit Facility, or an alternative benchmark otherwise established by the agent in accordance with the terms of the Credit Facility, which will be determined with due consideration to any evolving or then prevailing market practices for determining and implementing a rate of interest for U.S.

dollar-denominated syndicated credit facilities.

The Company has mortgages, credit facilities and derivative agreements that have terms that are based on LIBOR.

Pursuant to the Fourth Amendment, the Credit Agreement was updated and provisions were added to transition the Credit Facility from using a benchmark rate of LIBOR to using a benchmark rate of SOFR, and the Company will either utilize the Base Rate (as defined in the Credit Facility) or the updated SOFR-based rates.

During the year ended December 31, 2022, the Company converted $ 150.0 million of its “pay-fixed” swaps on its Credit Facility from LIBOR to SOFR, and the Company additionally converted its $ 378.5 million Capital One MOB Loan and related “pay-fixed” swap from LIBOR to SOFR, however, the Company still has mortgages, credit facilities (namely, the Capital One Facility and the KeyBank Facility) and derivative agreements that have terms that are based on LIBOR.

Certain of those agreements have alternative rates already contained in the agreements while others do not.

The Company anticipates that it will either utilize the alternative rates contained in the agreements or negotiate a replacement reference rates for LIBOR with the lenders and derivative counterparties.

The Company anticipates that it will either utilize the alternative rates contained in the agreements or negotiate a replacement reference rate for LIBOR with the lenders and derivative counterparties.

As of December 31, 2022, the Company had $ 558.7 million of LIBOR-based borrowings ($ 352.0 million of which is variable-rate) and $ 50.0 million of LIBOR-based “pay-fixed” swaps.

The Company terminated its remaining $ 50.0 million of “pay-fixed” swaps subsequent to December 31, 2022.

See Note 17 — Subsequent Events for additional information.

Note 6 — Fair Value of Financial Instruments

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair value.

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring asset and liabilities at fair value.

GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs.

The three levels of the hierarchy are described below:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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.

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The following table presents information about the Company’s assets and liabilities measured at fair value as of December 31, 2022 and 2021, aggregated by the level in the fair value hierarchy within which those instruments fall.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

(In thousands) Quoted Prices in Active Markets

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December 31, 2022

Derivative assets, at fair value $ — $ 174 $ — $ 174

Derivative assets, at fair value (non-designated) $ — $ 3,737 $ — $ 3,737

Derivative assets, at fair value (designated) — 36,910 — 36,910

Derivative liabilities, at fair value — — — —

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December 31, 2021

Derivative assets, at fair value $ — $ 13 $ — $ 13

Derivative liabilities, at fair value ( 38,389 ) ( 38,389 )

Derivative assets, at fair value (non-designated) $ — $ 174 $ — $ 174

Derivative liabilities, at fair value (designated) ( 13,903 ) ( 13,903 )

Total $ — $ ( 13,729 ) $ — $ ( 13,729 )

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There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31, 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

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The Company also had impaired real estate investments held for use, which were carried at fair value on a non-recurring basis on the consolidated balance sheet as of December 31, 2022 and 2021.

As of December 31, 2021, the Company owned four held for use properties in Texas for which the Company had reconsidered its expected holding period and which are marketed for sale.

As of December 31, 2022, the Company owned 17 held for use properties ( nine MOBs and eight SHOPs) for which the Company had reconsidered its expected holding period, of which 10 properties ( two MOBs and eight SHOPs) are being marketed for sale.

As a result, the Company evaluated the impact on its ability to recover the carrying value of the properties and recorded impairment charges to write these properties down to their estimated fair values.

The Company had also previously written down other held for use properties which have subsequently been sold.

During the year ended December 31, 2021, the Company evaluated four of its properties in Texas formerly leased to the LaSalle tenant and a property located in Sun City, Arizona and concluded, based on expected undiscounted cash flows, that the carrying value on these properties was not recoverable and the properties were impaired.

Accordingly, the Company recorded impairment charges to reduce the carrying value of these properties to their estimated fair values based on estimated sales prices.

Subsequent to December 31, 2021, the Company has entered into a purchase and sale agreement to dispose of the four LaSalle properties.

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

As of December 31, 2021, the Company owned five held for use properties ( one MOB and four SHOPs) for which the Company had reconsidered their expected holding periods and which were being marketed for sale.

As a result, the Company evaluated the impact on its ability to recover the carrying values of the respective properties and recorded impairment charges to write these properties down to their estimated fair values during 2021.

The four SHOPs were sold in the first quarter of 2022.

See Note 3 — Real Estate investments, Net - “Assets Held for Use and Related Impairments” for additional details.

Real Estate Investments — Held for Sale

The Company has impaired real estate investments held for sale, which are carried at net realizable value on a non-recurring basis on the consolidated balance sheets as of December 31, 2020.

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

See Note 3 — Real Estate investments, Net - “Assets Held for Sale and Related Impairments” for additional details.

Real estate investments held for sale are carried at net realizable value on a non-recurring basis and are generally classified in Level 3 of the fair value hierarchy.

The Company did not have any real estate investments classified as held for sale as of December 31, 2022 and 2021.

Financial Instruments Not Measured at Fair Value

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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:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

December 31, 2022 December 31, 2021

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The fair value of the mortgage notes payable is estimated using a discounted cash flow analysis, based on the Advisor’s experience with similar types of borrowing arrangements, excluding the value of derivatives.

At December 31, 2021 and 2020, respectively, the carrying values of the Credit Facility and Fannie Mae Master Credit Facilities do not approximate their fair values due to the widening of credit spreads since the loans were originated.

Note 7 — Derivatives and Hedging Activities

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2022 and 2021:

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Derivatives designated as hedging instruments:

Interest rate “pay-fixed” swaps Derivative assets, at fair value $ 36,910 $ —

Interest rate “pay-fixed” swaps Derivative liabilities, at fair value $ — $ 13,903

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Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

During 2021 and 2020, such derivatives were used to hedge the variable cash flows associated with variable-rate debt.

During the years ended December 31, 2022 and 2021, such derivatives were used to hedge the variable cash flows associated with variable-rate debt.

The interest rate “pay-fixed” swaps have base interest rates between 1.39 % and 2.32 % with expirations varying through December 2026.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive (loss) income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

In connection with the refinancing of the MOB Loan during the fourth quarter of 2019, the Company terminated two interest rate swaps with an aggregate notional amount of $ 250.0 million for a payment of approximately $ 2.2 million.

Following these terminations, $ 2.2 million was recorded in AOCI and is being recorded as an adjustment to interest expense over the term of the two terminated swaps and the MOB Loan prior to its refinancing.

Of the amount recorded in AOCI following these terminations, $ 0.9 million and $ 0.9 million was recorded as an increase to interest expense for the years ended December 31, 2021 and 2020, respectively, and approximately $ 0.4 million remained in AOCI as of December 31, 2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

In connection with the refinancing of the $ 250.0 million loan made by Capital One, National Association and certain other lenders to certain subsidiaries of the OP on June 30, 2017 (the “MOB Loan”), during the fourth quarter of 2019, the Company terminated two interest rate swaps with an aggregate notional amount of $ 250.0 million for a payment of approximately $ 2.2 million.

Following these terminations, $ 2.2 million was recorded in AOCI and was being recorded as an adjustment to interest expense over the original term of the two terminated swaps and the MOB Loan prior to its refinancing.

For the years ended December 31, 2022, 2021 and 2020, the Company reclassified $ 0.4 million, $ 0.9 million and $ 0.9 million, respectively, from AOCI as increases to interest expense.

No amounts remained in AOCI related to these previously terminated swaps as of December 31, 2022.

During the year ended December 31, 2022, the Company converted $ 150.0 million of the “pay-fixed” swaps on its Credit Facility and $ 378.5 million of the “pay-fixed” swaps on its mortgages from LIBOR to SOFR.

Amounts reported in accumulated other comprehensive (loss) income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

During the next 12 months, from January 1, 2022 through December 31, 2022, the Company estimates that $ 8.4 million will be reclassified from other comprehensive loss as an increase to interest expense.

During the next 12 months, from January 1, 2023 through December 31, 2023, the Company estimates that $ 17.4 million will be reclassified from other comprehensive income as a decrease to interest expense relating to the “pay-fixed” swaps designated as derivatives.

As of December 31, 2022 and 2021, the Company had the following derivatives that were designated as cash flow hedges of interest rate risk:

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(In thousands) (In thousands)

Interest rate “pay-fixed” swaps 9 $ 578,500 9 $ 578,500

SOFR-based interest rate “pay-fixed” swaps 7 $ 528,500 — $ —

LIBOR-based interest rate “pay-fixed” swaps 2 50,000 9 578,500

Total interest rate “pay-fixed” swaps 9 $ 578,500 9 $ 578,500

The table below details the location in the financial statements of the loss recognized on interest rate derivatives designated as cash flow hedges for the periods ended December 31, 2022 and 2021:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

Year Ended December 31,

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Non-Designated Derivatives

These derivatives are used to manage the Company’s exposure to interest rate movements, but do not meet the strict hedge accounting requirements to be classified as hedging instruments.

Changes in the fair value of derivatives not designated as hedges under a qualifying hedging relationship are recorded directly to net income (loss) and were a gain of $ 37,000 , a loss of $ 0.1 million and a loss of $ 0.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

These derivatives are used to manage the Company’s exposure to interest rate movements, but the Company has not elected to apply hedge accounting.

As of December 31, 2022, we have entered into seven LIBOR interest rate caps with a notional amount of $ 354.6 million (of which six caps were active as of December 31, 2022 and one has a forward start date as of April 2023) which limit 30-day LIBOR borrowings to 3.50 % and have varying expiration dates through April 2024.

Beginning in the fourth quarter of 2022, LIBOR exceeded 3.50 % and the Company began receiving payments under these interest rate caps.

While the Company does not apply hedge accounting for these interest rate caps, they are economically hedging the Capital One Facility and KeyBank Facility.

Changes in the fair value of, and any cash received from, derivatives not designated as hedges under a qualifying hedging relationship are recorded directly to net income (loss) and are presented within gain (loss) on non-designated derivatives in our consolidated statements of operations and comprehensive loss.

For the years ended December 31, 2022, 2021 and 2020, gain (loss) on non-designated derivatives were a gain of $ 3.8 million (including cash received of $ 0.3 million), a gain of $ 37,000 and a loss of $ 0.1 million, respectively.

The Company had the following outstanding interest rate derivatives that were not designated as a hedges in qualifying hedging relationships as of as of December 31, 2022 and 2021:

December 31, 2022 December 31, 2021

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

Interest Rate Derivatives Number of Instruments Notional Amount (1)

Number of Instruments Notional Amount (1)

(In thousands) (In thousands)

Interest rate caps (2)

7 $ 354,624 9 $ 355,175

(1) Notional amount represents the currently active interest cap contract and excludes one and three inactive cap agreements (included in the instrument count) with aggregate notional amounts of $ 52.6 million and $ 140.8 million as of December 31, 2022 and 2021, respectively, which take effect upon the expiration of similar caps included above and effectively extend the term for the same notional amount.

(2) All of the Company’s interest rate cap agreements limit 30-day LIBOR to 3.50 % with terms through April 2024.

The actual 30-day LIBOR rates during the fourth quarter of 2022 exceeded the strike price rate of 3.50 % and the Company is currently receiving payments under these agreements.

Changes in the fair market value of these non-designated derivatives, as well as any cash received, are presented within gain (loss) on non-designated derivatives in the Company’s consolidated statements of operations and comprehensive income.

Offsetting Derivatives

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

The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheet.

The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets.

HEALTHCARE TRUST, INC.

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$ — ( 13,903 ) — $ ( 13,903 ) — — $ ( 13,903 )

December 31, 2020

$ — ( 38,389 ) — $ ( 38,389 ) — — $ ( 38,389 )

Credit-risk-related Contingent Features

The Company has agreements in place with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

As of December 31, 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 $ 13.9 million.

As of December 31, 2021, the Company has not posted 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 $ 13.9 million at December 31, 2021.

As of December 31, 2022 there were no derivatives in a net liability position.

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 December 31, 2021 and 2020, the Company had 99,281,754 and 93,775,746 shares of common stock outstanding, respectively, including restricted shares and shares issued pursuant to the Company’s distribution reinvestment plan (“DRIP”), net of share repurchases.

These include shares issued as Stock Dividends during 2020 and 2021.

References made to weighted-average shares and per-share amounts in the consolidated statements of operations and comprehensive income have been retroactively adjusted to reflect the increase of 0.08871 shares for every outstanding share outstanding due to the Stock Dividends (including the January 2022 Stock Dividend), and are noted as such throughout the accompanying financial statements and notes.

As of December 31, 2022 and 2021, the Company had 105,080,531 and 99,281,754 shares of common stock outstanding, respectively, including unvested restricted shares, shares issued pursuant to the Company’s distribution reinvestment plan (“DRIP”), net of share repurchases, and shares issued as stock dividends since October 2020.

Since October 2020, the Company has issued an aggregate of approximately 12.6 million shares in respect to the stock dividends.

No other additional shares of common stock were issued during the years ended December 31, 2022 or 2021.

References made to weighted-average shares and per-share amounts in the consolidated statements of operations and comprehensive income have been retroactively adjusted to reflect the cumulative increase in shares outstanding due to the stock dividends (including the January 2023 stock dividend), and are noted as such throughout the accompanying financial statements and notes.

Any future issuances of stock dividends will also result in retroactive adjustments.

See Note 1 — Organization for additional information.

On April 1, 2022, the Company published a new estimate of per-share net asset value (“Estimated Per-Share NAV”) as of December 31, 2021, which was approved by the Board on March 28, 2022.

The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Board, provided that such estimates will be made at least once annually.

Tender Offers

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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.

On October 30, 2019 the Company repurchased 446,830 shares of common stock for approximately $ 7.8 million, at an average price per share of $ 17.50 pursuant to the SRP.

The repurchases reflect all repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing January 1, 2019 up to and including June 30, 2019.

On February 26, 2020, the Company repurchased 505,101 shares of common stock for approximately $ 8.8 million, at an average price per share of $ 17.50 pursuant to the SRP.

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Pursuant to the SRP, repurchases were to be ma de in respect of requests made during the periods when the SRP was active during the active periods under the SRP during the six months ending June 30, 2020 - the period from January 1, 2020 to January 8, 2020 and the period from February 26, 2020 up to and including June 30, 2020 - no later than July 31, 2020.

On August 13, 2020, in order to strategically maintain the Company’s liquidity in light of the continued impact of COVID-19 pandemic and to comply with an amendment to the Credit Facility described in Note 5, which restricts the Company from repurchasing shares until no earlier than the quarter ending June 30, 2021, on August 6, 2020, the Board determined that, effective on August 12, 2020, repurchases under the SRP would be suspended.

The Board has also rejected all repurchase requests made during the period from January 1, 2020 until the effectiveness of the suspension of the SRP.

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 — Credit Facilities, Net , which restricts the Company from repurchasing shares until no earlier than the Commencement Quarter (which has not yet occurred), the Board determined that, effective on August 14, 2020, repurchases under the SRP would be suspended.

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.

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4,896,620 20.60

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Distribution Reinvestment Plan

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

During the year ended December 31, 2021, the Company did not issue any shares of common stock pursuant to the DRIP.

During the years ended December 31, 2020 and 2019, the Company issued 0.9 million and 1.5 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $ 14.6 million and $ 27.2 million, respectively.

During the years ended December 31, 2022 and 2021, the Company did no t issue any shares of common stock pursuant to the DRIP.

During the year ended December 31, 2020, the Company issued 0.9 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $ 14.6 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.

Stockholder Rights Plan

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

In May 2020, the Company announced that the Board had approved a stockholder rights plan.

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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 3,977,144 and 1,610,000 shares of Series A Preferred Stock issued and outstanding, as of December 31, 2021 and 2020, respectively.

The Company had 3,977,144 shares of Series A Preferred Stock issued and outstanding, as of December 31, 2022 and 2021.

In connection with an underwritten offering in October 2021, the Company classified and designated 3,680,000 shares of its authorized preferred stock on October 4, 2021 as authorized shares of its 7.125 % Series B Cumulative Redeemable Perpetual Preferred Stock, $ 0.01 par value per share (“Series B Preferred Stock”).

As a result of an underwritten offering in October 2021, the Company had 3,630,000 shares issued and outstanding as of December 31, 2021.

As a result of an underwritten offering in October 2021, the Company had 3,630,000 shares of Series B Preferred Stock issued and outstanding as of December 31, 2022 and 2021.

Series A Preferred Stock

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Following the cure of such Delisting Event, the dividend rate will revert to the rate of 7.375 % of the $ 25.00 liquidation preference per share per annum.

The necessary conditions to convert the Series A Preferred Stock into

HEALTHCARE TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

common stock have not been met as of December 31, 2021.

Therefore, Series A Preferred Stock did not impact Company’s earnings per share calculations for the year ended December 31, 2021.

The necessary conditions to convert the Series A Preferred Stock into common stock have not been met as of December 31, 2022.

Therefore, Series A Preferred Stock did not impact Company’s earnings per share calculations for the year ended December 31, 2022, 2021 and 2020.

The Series A Preferred Stock ranks senior to common stock, with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up.

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Series A Preferred Stock Add-On Offering

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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 $ 56.0 million after deducting the underwriters’ discount, structuring fee and other offering costs aggregating to $ 2.9 million.

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As a result, the Company expensed the remaining balance of prepaid costs, which totaled $ 1.2 million, within acquisition and transaction related costs on the consolidated statement of operations and comprehensive income during the year ended December 31, 2021.

The Company did not sell any Series A Preferred Stock under the Preferred Stock Equity Line during the year ended December 31, 2020.

The Company did not sell any Series A Preferred Stock under the Preferred Stock Equity Line during the year ended December 31, 2020 or through its termination in the year ended December 31, 2021.

Series B Preferred Stock

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The Series B Preferred Stock has no stated maturity and will remain outstanding indefinitely unless redeemed, converted or otherwise repurchased.

On and after October 6, 2026, at any time and from time to time, the Series B Preferred Stock will be redeemable in whole or in part, at the Company’s option, at a cash redemption price of $ 25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date.

In addition, upon the occurrence of a Delisting Event or a Change of Control (each as defined in the articles supplementary governing the terms of the Series B Preferred Stock (the “Series B Articles Supplementary”)), the Company may, subject to certain conditions, at its option, redeem the Series B Preferred Stock, in whole or in part, after the first date on which the Delisting Event occurred or within 120 days after the first date on which the Change of Control occurred, as applicable, by paying the liquidation preference of $ 25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date.

Upon the occurrence of a Change of Control during a continuing Delisting Event, unless the Company has elected to exercise its redemption right, holders of the Series B Preferred Stock will have certain rights to convert Series B Preferred Stock into shares of Company’s common stock.

In addition, upon the occurrence of a Delisting Event, the dividend rate will be increased on the day after the occurrence of the Delisting Event by 2.00 % per annum to the rate of 9.125 % of the $ 25.00 liquidation preference per share per annum (equivalent to $ 2.28125 per share each year) from and after

HEALTHCARE TRUST, INC.

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December 31, 2022

and after October 6, 2026, at any time and from time to time, the Series B Preferred Stock will be redeemable in whole or in part, at the Company’s option, at a cash redemption price of $ 25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date.

the date of the Delisting Event.

Following the cure of such Delisting Event, the dividend rate will revert to the rate of 7.125 % of the $ 25.00 liquidation preference per share per annum.

The necessary conditions to convert the Series B Preferred Stock into common stock have not been met as of December 31, 2022.

Therefore, Series B Preferred Stock did not impact Company’s earnings per share calculations for the year ended December 31, 2021.

Therefore, Series B Preferred Stock did not impact Company’s earnings per share calculations for the year ended December 31, 2022 and 2021.

The Series B Preferred Stock ranks on parity with the Company’s Series A Preferred Stock, and senior to its common stock, with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up.

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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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

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.

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 (see Note 5 — Credit Facility, Net for additional information) which restricts the Company from paying distributions on common stock until no earlier than the quarter ending June 30, 2021.

Under the new policy, distributions authorized by the Board on the Company’s shares of common stock, if and when declared, are now paid on a quarterly basis in arrears in shares of the Company’s common stock valued at the Company’s estimated per share net asset value of common stock in effect on the applicable date, based on a single record date to be specified at the beginning of each quarter.

The Company declared the Stock Dividends of 0.01349 shares of the Company’s common stock on each share of the Company’s outstanding common stock on October 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, July, October 2021 and January 2022.

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.

The Board may further change the Company’s common stock distribution policy at any time, further reduce the amount of distributions paid or suspend distribution payments at any time, and therefore distribution payments are not assured.

The following table details from a tax perspective the portion of distributions classified as a return of capital, capital gain dividend income and ordinary dividend income, per share per annum, for the years ended December 31, 2020 and 2019.

All common dividends in the year ended December 31, 2021, and a portion of common dividends issued in the year ended December 31, 2020, were issued as stock dividends, which do not represent taxable dividends to our shareholders for U.S.

federal income tax purposes.

All dividends paid on the Series A Preferred Stock were considered 100% return of capital for tax purposes for the years ended December 31, 2021 and 2020.

There were no dividends paid on the Series B Preferred Stock, as the first dividend payment was made in January, 2022.

Year Ended December 31,

Return of capital (1)

100 % $ 0.42 100 % $ 0.83

Capital gain dividend income — % — — % —

Ordinary dividend income — % — — % —

Total 100.0 % $ 0.42 100.0 % $ 0.83

(1) Amount for December 31, 2020 represents actual cash distributions paid to common shareholders during the year ended 2020, but excludes the stock dividends which do not represent taxable dividends to the Company’s shareholders for U.S.

federal income tax purposes.

Series A Preferred Stock

Dividends on the Company’s Series A Preferred Stock accrue in an amount equal to $ 1.84375 per share each year ($ 0.460938 per share per quarter) to Series A Preferred Stock holders, which is equivalent to 7.375 % per annum on the $ 25.00 liquidation preference per share of Series A Preferred Stock.

Dividends on the Series A Preferred Stock are cumulative and payable quarterly in arrears on the 15th day of January, April, July and October of each year or, if not a business day, the next succeeding business day to holders of record on the close of business on the record date set by the Company’s board of directors and declared by the Company.

Any accrued and unpaid dividends payable with respect to the Series A Preferred Stock become part of the liquidation preference thereof.

Series B Preferred Stock

Dividends on the Company’s Series B Preferred Stock accrue in an amount equal to $ 1.78125 per share each year ($ 0.445313 per share per quarter) to Series B Preferred Stock holders, which is equivalent to 7.125 % per annum on the $ 25.00 liquidation preference per share of Series B Preferred Stock.

Dividends on the Series B Preferred Stock are cumulative and payable quarterly in arrears on the 15th day of January, April, July and October of each year or, if not a business day, the next succeeding business day to holders of record on the close of business on the record date set by the Company’s board of directors and declared by the Company.

The first quarterly dividend for the Series B Preferred Stock sold in this offering was paid on January 15, 2022 and represented an accrual for less than a full quarter, covering the period from October 6, 2021 to December 31, 2021.

Any accrued and unpaid dividends payable with respect to the Series B Preferred Stock become part of the liquidation preference thereof.

The following table details these stock dividends:

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Stock Dividend Declaration Date Stock Dividend Issue Date Quarterly Stock Dividend Rate (per share)

October 1, 2020 October 15, 2020 0.013492

January 4, 2021 January 15, 2021 0.013492

April 2, 2021 April 15, 2021 0.014655

July 1, 2021 July 15, 2021 0.014655

October 1, 2021 October 15, 2021 0.014655

January 3, 2022 January 15, 2022 0.014655

April 1, 2022 April 18, 2022 0.014167

July 1, 2022 July 15, 2022 0.014167

October 3, 2022 October 17, 2022 0.014167

January 3, 2023 January 18, 2023 0.014167

Tax Characteristics of Dividends

All common dividends in the years ended December 31, 2022 and 2021, and a portion of common dividends issued in the year ended December 31, 2020, were issued as stock dividends, which do not represent taxable dividends to shareholders for U.S.

federal income tax purposes.

The cash distributions paid to holders of common stock in the first half of the year ended December 31, 2020 were considered 100% return of capital.

All dividends paid on the Series A Preferred Stock and Series B Preferred Stock were considered 100% return of capital for tax purposes for the years ended December 31, 2022, 2021 and 2020.

Note 9 — Related Party Transactions and Arrangements

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The Advisor and its affiliates may incur and pay costs and fees on behalf of the Company.

As of December 31, 2021 and 2020, the Advisor held 90 partnership units in the OP designated as “OP Units” (“OP Units”).

As of December 31, 2022 and 2021, the Advisor held 90 partnership units in the OP designated as “Common 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.

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Fees Incurred in Connection with the Operations of the Company

The Second A&R Advisory Agreement by and among the Company, the OP and the Advisor (as amended, the “Second A&R Advisory Agreement”) took effect on February 17, 2017, and is automatically renewable for another ten-year term upon each ten-year anniversary unless the Second A&R Advisory Agreement is terminated (i) with notice of an election not to renew at least 365 days prior to the applicable tenth anniversary, (ii) in accordance with a change of control (as defined in the Second A&R Advisory Agreement) or a transition to self-management, (iii) by 67 % of the independent directors of the Board for cause, without penalty, with 45 days’ notice or (iv) with 60 days prior written notice by the Advisor for (a) a failure to obtain a satisfactory agreement for any successor to the Company to assume and agree to perform obligations under the Second A&R Advisory Agreement or (b) any material breach of the Second A&R Advisory Agreement of any nature whatsoever by the Company.

The Second Amended and Restated Advisory Agreement by and among the Company, the OP and the Advisor (as amended, the “Second A&R Advisory Agreement”) took effect on February 17, 2017, and is automatically renewable for another ten-year term upon each ten-year anniversary unless the Second A&R Advisory Agreement is terminated (i) with notice of an election not to renew at least 365 days prior to the applicable tenth anniversary, (ii) in accordance with a change of control (as defined in the Second A&R Advisory Agreement) or a transition to self-management, (iii) by 67 % of the independent directors of the Board for cause, without penalty, with 45 days’ notice or (iv) with 60 days prior written notice by the Advisor for (a) a failure to obtain a satisfactory agreement for any successor to the Company to assume and agree to perform obligations under the Second A&R Advisory Agreement or (b) any material breach of the Second A&R Advisory Agreement of any nature whatsoever by the Company.

On July 25, 2019, the Company entered into Amendment No.

1 to the Second Amended and Restated Advisory Agreement (the “Advisory Agreement Amendment”) among the Company, the OP, and the Advisor.

1 to the Second A&R Advisory Agreement (the “Advisory Agreement Amendment”) among the Company, the OP, and the Advisor.

The Advisory Agreement Amendment was unanimously approved by the Company’s independent directors.

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The amount reimbursed for insourced expenses may not exceed 0.5 % of the contract purchase price of each acquired property or 0.5 % of the amount advanced for a loan or other investment.

Additionally, the Company reimburses the Advisor for third party acquisition expenses.

Additionally, the Company reimburses the Advisor for

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third party acquisition expenses.

Under the Second A&R Advisory Agreement, total acquisition expenses may not exceed 4.5 % of the contract purchase price of the Company’s portfolio or 4.5 % of the amount advanced for all loans or other investments.

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Asset Management Fees and Variable Management/Incentive Fees

Under the LPA and the advisory agreement that was superseded by the Original A&R Advisory Agreement and until March 31, 2015, for its asset management services, the Company issued the Advisor an asset management subordinated participation by causing the OP to issue (subject to periodic approval by the Board) to the Advisor partnership units of the OP designated as “Class B Units” (“Class B Units”).

Under the LPA and the advisory agreement that was superseded by the 0riginal amended and restated advisory agreement and until March 31, 2015, for its asset management services, the Company issued the Advisor an asset management subordinated participation by causing the OP to issue (subject to periodic approval by the Board) to the Advisor partnership units of the OP designated as “Class B Units” (“Class B Units”).

The Class B Units were intended to be profit interests and vest, and no longer are subject to forfeiture, at such time as:

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The value of issued Class B Units will be determined and expensed when the Company deems the achievement of the Performance Condition to be probable.

As of December 31, 2021, the Company cannot determine the probability of

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achieving the Performance Condition.

As of December 31, 2022, the Company determined that achieving the Performance Condition was not yet considered probable for accounting purposes.

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.

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Effective February 17, 2017, the Second A&R Advisory Agreement requires the Company to pay the Advisor a base management fee, which is payable on the first business day of each month.

The fixed portion of the base management fee is equal to $ 1.625 million per month.

The variable portion of the base management fee is equal to one-twelfth of 1.25 % of the cumulative net proceeds of any equity (including convertible equity and certain convertible debt but excluding proceeds from the DRIP) issued by the Company and its subsidiaries subsequent to February 17, 2017 per month.

The base management fee is payable to the Advisor or its assignees in cash, OP Units or shares, or a combination thereof, the form of payment to be determined at the discretion of the Advisor and the value of any OP Unit or share to be determined by the Advisor acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate.

In addition, the Second A&R Advisory Agreement requires the Company to pay the Advisor a variable management/incentive fee quarterly in arrears equal to (1) the product of fully diluted number of shares of common stock outstanding multiplied by (2) (x) 15.0 % of the applicable prior quarter’s Core Earnings (as defined below) per share in excess of $ 0.375 per share plus (y) 10.0 % of the applicable prior quarter’s Core Earnings per share in excess of $ 0.47 per share.

Core Earnings is defined as, for the applicable period, net income or loss, computed in accordance with GAAP, excluding non-cash equity compensation expense, the variable management/incentive fee, acquisition and transaction related fees and expenses, financing related fees and expenses, depreciation and amortization, realized gains and losses on the sale of assets, any unrealized gains or losses or other non-cash items recorded in net income or loss for the applicable period, regardless of whether such items are included in other comprehensive income or loss, or in net income, one-time events pursuant to changes in GAAP and certain non-cash charges, impairment losses on real estate related investments and other than temporary impairments of securities, amortization of deferred financing costs, amortization of tenant inducements, amortization of straight-line rent and any associated bad debt reserves, amortization of market lease intangibles, provision for loss loans, and other non-recurring revenue and expenses (in each case after discussions between the Advisor and the independent directors and approved by a majority of the independent directors).

The fixed portion of the base management fee is equal to $ 1.625 million per month, while the variable portion of the base management fee is equal to one-twelfth of 1.25 % of the cumulative net proceeds of any equity (including convertible equity and certain convertible debt but excluding proceeds from the DRIP) issued by the Company and its subsidiaries subsequent to February 17, 2017 per month.

There are no variable management fees earned from the issuance of common stock dividends.

The base management fee is payable to the Advisor or its assignees in cash, Common OP Units or shares, or a combination thereof, the form of payment to be determined at the discretion of the Advisor and the value of any Common OP Unit or share to be determined by the Advisor acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate.

In addition, the Second A&R Advisory Agreement requires the Company to pay the Advisor a variable management/incentive fee quarterly in arrears equal to (1) the product of fully diluted shares common stock outstanding multiplied by (2) (x) 15.0 % of the applicable prior quarter’s Core Earnings (as defined below) per share in excess of $ 0.375 per share plus (y) 10.0 % of the applicable prior quarter’s Core Earnings per share in excess of $ 0.47 per share.

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December 31, 2022

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.

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The Company also reimburses the Property Manager for property level expenses incurred by the Property Manager.

The Property Manager may charge a separate fee for the one-time initial rent-up or leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties, and the Property Manager is allowed to receive a higher property management fee in certain cases if approved by our Board of Directors (including a majority of the independent directors).

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December 31, 2021

The Property Manager may charge a separate fee for the one-time initial rent-up or leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties, and the Property Manager is allowed to receive a higher property management fee in certain cases if approved by the Company’s Board of Directors (including a majority of the independent directors).

If the Company contracts directly with third parties for such services, the Company will pay the third party customary market fees and will pay the Property Manager an oversight fee of 1.0 % of the gross revenues of the property managed by the third party.

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The A&R Property Management Agreement automatically renews for successive one-year terms unless any party provides written notice of its intention to terminate the A&R Property Management Agreement at least 90 days prior to the end of the term.

Neither party provided notice of intent to terminate.

Neither party has provided notice of intent to terminate.

The current term of the A&R Property Management Agreement expires February 17, 2023.

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On April 10, 2018, in connection with the Multi-Property CMBS Loan, the Company and the OP entered into a further amendment to the A&R Property Management Agreement confirming, consistent with the intent of the parties, that the borrowers under the Multi-Property CMBS Loan and other subsidiaries of the OP that own or lease the Company’s properties are the direct obligors under the arrangements pursuant to which the Company’s properties are managed by either the Property Manager or a third party overseen by the Property Manager pursuant to the A&R Property Management Agreement.

See the Mortgage Notes Payable table included in Note 4 — Mortgage Notes Payable, Net for additional information on the Multi- Property CMBS Loan.

Professional Fees and Other Reimbursements

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

In September 2022, the Advisor terminated certain of its employees who provided services to the Company and for which the Company reimbursed the

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Advisor for salaries and benefits.

In connection with the termination, the Company recognized a compensation charge, net of adjustments for previously accrued bonuses, of $ 0.3 million in the third quarter of 2022.

On July 25, 2019, the Company entered into the Advisory Agreement Amendment.

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The Advisory Agreement Amendment clarifies that, with respect to executive officers of the Advisor, the Company is required to reimburse the Advisor or its affiliates for the reasonable salaries and wages, benefits and overhead of the Company’s executive officers, other than for any executive officer that is also a partner, member or equity owner of AR Global, an affiliate of the Advisor.

Further, under the Advisory Agreement Amendment, the aggregate amount of expenses relating to salaries, wages and benefits, including for executive officers and all other employees of the Advisor or its affiliates (the “Capped Reimbursement Amount”), for each fiscal year is subject to a limit that is equal to the greater of:

(a) a fixed component (the “Fixed Component”) and (b) a variable component (the “Variable Component”).

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(a) the Fixed Component was equal to $ 6.8 million and (b) the Variable Component was equal to (i) the sum of the total real estate investments, at cost as recorded on the balance sheet dated as of the last day of each fiscal quarter (the “Real Estate Cost”) in the year divided by four , which amount is then (ii) multiplied by 0.29 %.

If the Company sells real estate investments aggregating an amount equal to or more than 25.0 % of Real Estate Cost, in one or a series of related dispositions in which the proceeds of the disposition(s) are not reinvested in Investments (as defined in the Advisory Agreement Amendment), then within 12 months following the disposition(s), the advisory agreement requires the Advisor and the Company to negotiate in good faith to reset the Fixed Component;

provided that if the proceeds of the disposition(s) are paid to shareholders of the Company as a special distribution or used to repay loans with no intent of

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December 31, 2021

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.

If the Company sells real estate investments aggregating an amount equal to or more than 25.0 % of Real Estate Cost, in one or a series of related dispositions in which the proceeds of the disposition(s) are not reinvested in Investments (as defined in the Advisory Agreement Amendment), then within 12 months following the disposition(s), the Advisory Agreement Amendment requires the Advisor and the Company to negotiate in good faith to reset the Fixed Component;

provided that if the proceeds of the disposition(s) are paid to shareholders of the Company as a special distribution or used to repay loans with no intent of subsequently re-financing and re-investing the proceeds thereof in Investments, the Advisory Agreement amendment 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.

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.

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The Advisor formally awarded 2019 bonuses to employees of the Advisor or its affiliates in September 2020 (the “2019 Bonus Awards”).

The original $ 2.5 million estimate for bonuses recorded and paid to the Advisor in 2019 exceeded the cash portion of the 2019 Bonus Awards to be paid to employees of the Advisor or its affiliates and to be reimbursed by the Company by $ 1.2 million.

The original estimate for bonuses recorded and paid to the Advisor in 2019 exceeded the cash portion of the 2019 Bonus Awards to be paid to employees of the Advisor or its affiliates and to be reimbursed by the Company by $ 1.2 million.

As a result, during the three months ended September 30, 2020, the Company recorded a receivable from the Advisor of $ 1.2 million in prepaid expenses and other assets on the consolidated balance sheet and a corresponding reduction in general and administrative expenses.

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As a result, during the second quarter of 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 required to be repaid to the Company on a pro rata basis over a six-month period from November 2021 through April 2022.

As of December 31, 2021, $ 0.2 million has been repaid by the Advisor.

Pursuant to authorization by the independent members of the Company’s board of directors, the $ 1.0 million receivable is required to be repaid to the Company

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on a pro rata basis over a six-month period from November 2021 through April 2022.

As of December 31, 2022, the entire amount has been repaid by the Advisor.

Reimbursements for the cash portion of 2021 bonuses paid by the Advisor to employees of the Advisor or its affiliates were expensed and reimbursed on a monthly basis during 2021, and 2022 bonuses were expensed and reimbursed on a monthly basis during 2022 in accordance with estimates provided by the Advisor.

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The Company recorded approximately $ 2.2 million of expenses for the reimbursement which is included in general and administrative expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020.

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December 31, 2021

Summary of fees, expenses and related payables

The following table details amounts incurred, forgiven and payable in connection with the Company’s operations-related services described above as of and for the periods presented:

The following table details amounts incurred and payable in connection with the Company’s operations-related services described above as of and for the periods presented:

Year Ended December 31, Payable (Receivable) as of

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Distributions on Class B Units — — 178 — —

— 178 305 — —

Total related party operation fees and reimbursements $ 34,874 $ 32,905 $ 35,328 $ 47 $ ( 882 )

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

Includes $ 6.2 million and $ 5.6 million subject to the Capped Reimbursement Amount for the years ended December 31, 2021 and 2020, respectively.

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

As of December 31, 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 the OP no longer issues any Class B Units.

(3) Balance as of December 31, 2021 includes a receivable of $ 0.9 million from 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 required to be repaid to the Company on a pro rata basis over a six-month period from November 2021 through April 2022.

Balance as of December 31, 2020 includes a $ 1.2 million from the Advisor related to the overpayment of 2019 Bonus Awards, which was fully repaid as of December 31, 2021.

(4) During the year ended December 31, 2019, the Company recorded a reduction of general and administrative expenses in the amount of $ 0.5 million related to the reversal of a payable balance due to RCS Capital Corporation.

Includes $ 6.0 million, $ 6.2 million and $ 5.6 million subject to the Capped Reimbursement Amount for the years ended December 31, 2022, 2021 and 2020, respectively.

(2) Balance as of December 31, 2021 includes a receivable of $ 0.9 million from 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, was required to be repaid to the Company on a pro rata basis over a six-month period from November 2021 through April 2022.

(3) During the year ended December 31, 2020 the Company recorded approximately $ 2.2 million of expense reimbursements to the Advisor for severance payments and related legal costs relating to the termination of its former Chief Executive Officer.

(5) Inclusive of $ 0.3 million of leasing commissions which are included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2021 and 2020.

(4) Inclusive of $ 0.7 million and $ 0.3 million of leasing commissions which are included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2022 and 2021.

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

Fees Incurred in Connection with a Listing

If the common stock of the Company is listed on a national exchange, the Special Limited Partner will be entitled to receive a promissory note as evidence of its right to receive a subordinated incentive listing distribution from the OP equal to 15.0 % of the amount by which the market value of all issued and outstanding shares of common stock plus distributions exceeds the aggregate capital contributed plus an amount equal to a 6.0 % cumulative, pre-tax non-compounded annual return to investors in the Company’s initial public offering of common stock.

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exceeds the aggregate capital contributed plus an amount equal to a 6.0 % cumulative, pre-tax non-compounded annual return to investors in the Company’s initial public offering of common stock.

No such distribution was incurred during the years ended December 31, 2022, 2021 and 2020.

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No such participation in net sales proceeds became due and payable during the years ended December 31, 2022, 2021 and 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

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December 31, 2021

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.

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

Under the operating partnership agreement of the OP, upon termination or non-renewal of the advisory agreement with the Advisor, wi th or without cause, the Special Limited Partner will be entitled to receive a promissory note as evidence of its right to receive subordinated termination dist ributions from the OP equal to 15.0 % of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed plus an amount equal to an annual 6.0 % cumulative, pre-tax, non-compounded annual return to investors in the Company’s initial public offering of common stock.

Under the operating partnership agreement of the OP, upon termination or non-renewal of the advisory agreement with the Advisor, wi th or without cause, the Special Limited Partner will be entitled to receive a promissory note as evidence of its right to receive subordinated termination dist ributions from the OP equal to 15.0 % of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed plus an amount equal to a 6.0 % cumulative, pre-tax, non-compounded annual return to investors in the Company’s initial public offering of common stock.

The Special Limited Partner is able to elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs.

2 unchanged sentences

All fees will be due within 30 days after the effective date of the termination of the Advisory Agreement Amendment.

Upon a termination by either party in connection with a change of control (as defined in the Advisory Agreement Amendment), the Company is required to pay the Advisor a change of control fee equal to the product of four (4) and the “Subject Fees.”

Upon a termination by the Company in connection with a transition to self-management, the Company is required to pay the Advisor a transition fee equal to (i) $ 15.0 million plus (ii) the product of four multiplied by the Subject Fees, provided that the transition fee shall not exceed an amount equal to 4.5 multiplied by the Subject Fees.

Upon a termination by either party in connection with a change of control (as defined in the Advisory Agreement Amendment), the Company would be required to pay the Advisor a change of control fee equal to the product of four and the “Subject Fees” described below.

Upon a termination by the Company in connection with a transition to self-management, the Company would be required to pay the Advisor a transition fee equal to (i) $ 15.0 million plus (ii) the product of four multiplied by the Subject Fees, provided that the transition fee shall not exceed an amount equal to 4.5 multiplied by the Subject Fees.

The Subject Fees are equal to (i) the product of four multiplied by the actual base management fee plus (ii) the product of four multiplied by the actual variable management/incentive fee, in each of clauses (i) and (ii), payable for the fiscal quarter immediately prior to the fiscal quarter in which the change of control occurs or the transition to self-management, as applicable, is consummated, plus (iii) without duplication, the annual increase in the base management fee resulting from the cumulative net proceeds of any equity raised (but excluding proceeds from the DRIP) in respect to the fiscal quarter immediately prior to the fiscal quarter in which the change of control occurs or the transition to self-management, as applicable, is consummated.

3 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.

Note 11 — Equity-Based Compensation

Restricted Share Plan

The Company has adopted an employee and director incentive restricted share plan (as amended from time to time, the “RSP”), which provides the Company with the ability to grant awards of restricted shares of common stock (“restricted shares”) to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company.

The total number of shares of common stock that may be subject to awards granted under the RSP may not exceed 5.0 % of the Company’s outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 3.6 million shares (as such number may be further adjusted for stock splits, stock dividends, combinations and similar events).

HEALTHCARE TRUST, INC.

2 unchanged sentences

December 31, 2022

Prior to August 2017, the RSP provided for an automatic grant of 1,333 restricted shares to each of the independent directors, without any further approval by the Board or the stockholders, on the date of his or her initial election to the Board and thereafter on the date of each annual stockholder meeting.

The restricted shares granted as annual automatic awards prior to August 2017 were subject to vesting over a five-year period following the date of grant.

In August 2017, the Board amended the RSP to provide that the number of restricted shares comprising the automatic annual award to each of the independent directors would be equal to the quotient of $ 30,000 divided by the then-current Estimated Per-Share NAV and subsequently amended and restated the RSP to eliminate the automatic annual awards and to make other revisions related to the implementation of a new independent director equity compensation program.

As part of this independent director equity compensation program, the Board approved a one-time grant of restricted share awards to the independent directors as follows:

(i) 300,000 restricted shares to the chairman, with one-seventh of the shares vesting annually in equal increments over a seven-year period with initial vesting on August 4, 2018;

and (ii) 25,000 restricted shares to each of the three other independent directors, with one-fifth of the shares vesting annually in equal increments over a five-year period with initial vesting on August 4, 2018.

In connection with these one-time grants, the restricted shares granted as automatic annual awards in connection with the Company’s 2017 annual meeting of stockholders on July 21, 2017 were forfeited.

On July 29, 2019, the Board elected B.J.

Penn as a member of the Board to serve as a director effective immediately.

Penn, like the Company’s other independent directors, participates in the Company’s independent director compensation program.

During the year ended December 31, 2019, the Company paid to Mr.

Penn an annual cash retainer effective as of July 29, 2019 pro-rated for the remaining portion of the current annual period, and he was awarded 15,000 restricted shares vesting annually in equal increments over a three-year period with initial vesting on August 4, 2020.

Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested.

Note 11 — Equity-Based Compensation

Restricted Share Plan

Restricted shares vest on a straight-line basis over periods of three to five years and may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested.

Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed.

3 unchanged sentences

Unvested, December 31, 2019 277,241 $ 21.18

Granted 15,000 17.50

Stock dividend 2,878 15.75

Vested ( 64,735 ) 21.18

11 unchanged sentences

Unvested, December 31, 2022

159,427 21.21

As of December 31, 2022, the Company had $ 1.5 million of unrecognized compensation cost related to unvested restricted share awards granted under the RSP.

1 unchanged sentence

Compensation expense related to restricted shares was $ 1.2 million, $ 1.3 million and $ 1.3 million during the years ended December 31, 2022, 2021 and 2020, respectively.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Other Share-Based Compensation

2 unchanged sentences

No such shares were issued during the years ended December 31, 2022, 2021 and 2020.

Note 12 — Accumulated Other Comprehensive (Loss) Income

The following table illustrates the changes in accumulated other comprehensive (loss) income as of and for the periods presented:

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

Note 12 — Accumulated Other Comprehensive Income (Loss)

The following table illustrates the changes in accumulated other comprehensive income (loss) as of and for the periods presented:

(In thousands) Unrealized Gains (Losses) on Designated Derivative

Balance, December 31, 2019 $ ( 7,043 )

Other comprehensive income, before reclassifications ( 10,753 )

Amounts reclassified from accumulated other comprehensive (loss) income ( 872 )

Balance, December 31, 2019

Other comprehensive loss, before reclassifications ( 40,614 )

Amounts reclassified from accumulated other comprehensive (loss) income 7,999

Amount of loss reclassified from accumulated other comprehensive income (loss) 7,999

Rebalancing of ownership percentage ( 15 )

Balance, December 31, 2020

Other comprehensive loss, before reclassifications 14,322

Amounts reclassified from accumulated other comprehensive (loss) income 11,010

Other comprehensive income, before reclassifications 14,322

Amount of loss reclassified from accumulated other comprehensive income (loss) 11,010

Balance, December 31, 2021

Accumulated other comprehensive (loss) income predominately relates to the unrealized gains (losses) on designated derivatives, however, as previously discussed in Note 7 — Derivatives and Hedging , a previously designated hedge was terminated and the termination costs are being amortized over the term of the hedged item.

The unamortized portion of the terminated swap still remaining in accumulated other comprehensive (loss) income is $ 0.4 million as of December 31, 2021.

The terminated swap will be fully amortized within the year ending December 31, 2022.

Other comprehensive income, before reclassifications 50,098

Amount of loss reclassified from accumulated other comprehensive income (loss) 1,153

Balance, December 31, 2022

Accumulated other comprehensive income (loss) predominately relates to the unrealized gains (losses) on designated derivatives, however, as previously discussed in Note 7 — Derivatives and Hedging , a previously designated hedge was terminated and the termination costs are being amortized over the term of the hedged item.

The unamortized portion of the terminated swap still remaining in accumulated other comprehensive (loss) income was $ 0.4 million as of December 31, 2021.

The terminated swap was fully amortized within the year ending December 31, 2022.

Note 13 — Non-Controlling Interests

2 unchanged sentences

(In thousands) 2022 2021

Common OP Units held by third parties $ 3,758 $ 4,016

Series A Preferred Units held by third parties $ 2,578 $ 2,578

Total Non-controlling Interests in the Operating Partnership 6,336 4,016

Common OP Units held by third parties 3,584 3,758

Total Non-controlling Interests in the OP 6,162 6,336

Non-controlling interests in property owning subsidiaries 389 368

1 unchanged sentence

Non-Controlling Interests in the Operating Partnership

For preferred and common shares issued by the Company, the Company typically issued mirror securities with substantially equivalent economic rights between the Company and the Operating Partnership.

For preferred and common shares issued by the Company, the Company typically issues mirror securities with substantially equivalent economic rights between the Company and the OP.

The securities held by the Company are eliminated in consolidation.

Common OP Units

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

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

Series A Preferred OP Units

The Company is the sole general partner and holds substantially all of the Series A Preferred Units.

In September 2021, the Company partially funded the purchase of a MOB from an unaffiliated third party by causing the OP to issue 100,000 Series A Preferred Units, with a face value of $ 25.00 per unit, which were recorded at issuance at a then fair value of $ 2.6 million, or $ 25.78 per unit, to the unaffiliated third party.

A holder of Series A Preferred Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s Series A Preferred Stock.

After holding the Series A Preferred Units for a period of one year , a holder of Series A Preferred Units has the right to redeem Series A Preferred Units for, at the option of the OP, the corresponding number of shares of the Company’s Series A Preferred Stock, or the cash equivalent.

The remaining rights of the limited partners in the

HEALTHCARE TRUST, INC.

2 unchanged sentences

December 31, 2022

In November 2014, the Company partially funded the purchase of an MOB from an unaffiliated third party by causing the OP to issue 405,908 OP Units, with a value of $ 10.1 million, or $ 25.00 per unit, to the unaffiliated third party.

A holder of OP Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s common stock in an amount retroactively adjusted to reflect the Stock Dividends, other stock dividends and other similar events.

After holding the OP Units for a period of one year , a holder of OP Units has the right to redeem OP Units for, at the option of the OP, the corresponding number of shares of the Company’s common stock as retroactively adjusted for the Stock Dividends, other stock dividends and other similar events, or the cash equivalent.

OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets.

During the year ended December 31, 2022 and 2021, Series A Preferred Unit holders were paid distributions of $ 0.2 million and $ 46,000 , respectively.

Common OP Units

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

As of December 31, 2022 and 2021, the Advisor held 90 Common OP Units, which represents a nominal percentage of the aggregate ownership in the OP.

In November 2014, the Company partially funded the purchase of an MOB from an unaffiliated third party by causing the OP to issue 405,908 Common OP Units, with an initial value of $ 10.1 million, or $ 25.00 per unit, to the unaffiliated third party.

A holder of Common OP Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s common stock in an amount retroactively adjusted to reflect the Stock Dividends, other stock dividends and other similar events.

After holding the Common OP Units for a period of one year , a holder of Common OP Units has the right to redeem Common OP Units for, at the option of the OP, the corresponding number of shares of the Company’s common stock, as retroactively adjusted for the Stock Dividends, other stock dividends and other similar events, or the cash equivalent.

The remaining rights of the limited partners in the OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets.

During the years ended December 31, 2021, 2020 and 2019, OP Unit non-controlling interest holders were paid distributions of $ 0.0 million , $ 0.2 million, and $ 0.3 million respectively.

During the years ended December 31, 2022 and 2021, Common OP Unit non-controlling interest holders were no t paid any cash distributions.

During the year ended December 31, 2020, Common OP Unit non-controlling interest holders were paid distributions of $ 0.2 million.

Stock Dividends do not cause the OP to issue additional Common OP Units, rather, the redemption ratio to common stock is adjusted.

The 405,908 Common OP Units outstanding held by unaffiliated third parties as of December 31, 2021 would be redeemable for 442,014 shares of common stock, giving effect to adjustments for the impact of the Stock Dividends through January 2022.

Series A Preferred OP Units

The Company is the sole general partner and holds substantially all of the Series A Preferred Units.

In September 2021, the Company partially funded the purchase of a MOB from an unaffiliated third party by causing the OP to issue 100,000 Series A Preferred Units, with a face value of $ 25.00 per unit, which were recorded at a fair value of $ 2.6 million, or $ 25.78 per unit, to the unaffiliated third party.

A holder of Series A Preferred Units has the right to receive cash distributions equivalent to the cash distributions, if any, on the Company’s Series A Preferred Stock.

During the year ended December 31, 2021, Series A Preferred Unit holders were paid distributions of $ 46,000 .

The 405,908 Common OP Units outstanding as of December 31, 2022 would be redeemable for 467,498 shares of common stock, giving effect to adjustments for the impact of the Stock Dividends through January 2023.

Non-Controlling Interests in Property Owning Subsidiaries

6 unchanged sentences

Following this transaction, the properties were wholly owned by the Company and added to the borrowing base under the Credit Facility.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

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

Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement Distributions

As of December 31, As of December 31, As of December 31, Year Ended December 31,

Property Name

Property Name As of December 31, As of December 31, As of December 31, Year Ended December 31,

(Dollar amounts in thousands)

5 unchanged sentences

See Note 4 - Mortgage Notes Payable for additional information.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

Note 14 — Net Loss Per Share

The following is a summary of the basic and diluted net loss per share computation for the years ended December 31, 2021, 2020 and 2019 and has been retroactively adjusted to reflect the Stock Dividend (see Note 1 — Organization for additional details):

The following is a summary of the basic and diluted net loss per share computation for the years ended December 31, 2022, 2021 and 2020 and has been retroactively adjusted to reflect the stock dividends (see Note 1 — Organization for additional details):

Year Ended December 31,

6 unchanged sentences

$ ( 0.88 ) $ ( 0.87 ) $ ( 0.74 )

(1) Retroactively adjusted for the effects of the Stock Dividends (see Note 1 — Organization for additional details).

(1) Retroactively adjusted for the effects of the stock dividends.

See Note 1 — Organization and Note 8 — Stockholder’s Equity for additional information.

Diluted net loss per share assumes the conversion of all common stock equivalents into an equivalent number of shares of common stock, unless the effect is antidilutive.

The Company considers unvested restricted shares, OP Units and Class B Units to be common share equivalents.

The Company considers unvested restricted shares, Common OP Units and Class B Units to be common share equivalents.

The Company had the following common stock equivalents on a weighted-average basis that were excluded from the calculation of diluted net loss per share attributable to stockholders as their effect would have been antidilutive.

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

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

2022 2021 2020

1 unchanged sentence

141,364 214,520 288,965

Common OP Units (2)

467,602 467,602 467,602

4 unchanged sentences

There were 97,343 , 159,427 and 215,384 unvested restricted shares outstanding as of December 31, 2022, 2021 and 2020, respectively.

(2) Weighted average number of antidilutive OP Units held by unaffiliated third parties presented as shares outstanding for the periods presented, at the current conversion rate as retroactively adjusted for the effect of the Stock Dividends.

There were 405,998 OP Units outstanding as of December 31, 2021, 2020 and 2019.

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

(2) Weighted average number of antidilutive Common OP Units presented as shares outstanding for the periods presented, at the current conversion rate as retroactively adjusted for the effects of the stock dividends.

There were 405,998 Common OP Units outstanding as of December 31, 2022, 2021 and 2020.

There were 359,250 Class B Units outstanding as of December 31, 2022, 2021 and 2020.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Note 15 — Segment Reporting

1 unchanged sentence

MOBs and SHOPs.

Prior to December 31, 2021, the Company had three reportable segments 1) medical office and outpatient buildings (“Former MOBs”), 2) triple-net lease healthcare properties (“Former NNN”) and 3) SHOPs.

Prior to December 31, 2021, the Company had three reportable segments 1) medical office and outpatient buildings (“Former MOBs”), 2) triple net-leased healthcare properties (“Former NNN”) and 3) SHOPs.

Culminating in the year ended December 31, 2021, the Company has completed several strategic property divestitures from the Company’s Former NNN segment and transitioned certain properties previously reported in the Company’s Former NNN segment into the Company’s SHOP segment.

3 unchanged sentences

All prior periods presented in the tables below have been conformed to the presentation of the Company’s new reportable segment structure.

The Company will restate other quarterly prior periods when they are subsequently reported in later quarterly filings for comparative purposes.

The Company evaluates performance and makes resource allocations based on its two business segments.

1 unchanged sentence

The SHOP segment consists of direct investments in seniors housing properties, primarily providing assisted living, independent living and memory care services, which are operated through engaging independent third-party operators.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

Net Operating Income

11 unchanged sentences

The following tables reconcile the segment activity to consolidated net loss for the years ended December 31, 2022, 2021 and 2020:

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Year Ended December 31, 2022

8 unchanged sentences

Depreciation and amortization ( 82,064 )

Gain on sale of real estate investments 3,648

Loss on sale of real estate investments ( 125 )

Interest expense ( 51,740 )

Interest and other income 27

Loss on non designated derivatives 37

Gain on non designated derivatives 3,834

Income tax expense ( 201 )

Net income attributable to non-controlling interests 260

Net loss attributable to non-controlling interests 135

Allocation for preferred stock ( 13,799 )

Net loss attributable to common stockholders $ ( 93,285 )

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

Year Ended December 31, 2021

8 unchanged sentences

Depreciation and amortization ( 79,926 )

Gain on sale of real estate investments 3,648

Interest expense ( 47,900 )

Interest and other income 61

Gain on sale of real estate investments 5,230

Loss on sale of non-designated derivatives ( 102 )

Gain on non-designated derivatives 37

Income tax expense ( 203 )

2 unchanged sentences

Net loss attributable to common stockholders $ ( 92,942 )

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Year Ended December 31, 2020

13 unchanged sentences

Income tax expense ( 4,061 )

Net loss attributable to non-controlling interests 393

Net income attributable to non-controlling interests ( 303 )

Allocation for preferred stock ( 2,968 )

Net loss attributable to common stockholders $ ( 78,781 )

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

7 unchanged sentences

Restricted cash 22,884 25,644

Assets held for sale — 90

Derivative assets, at fair value 40,647 174

4 unchanged sentences

Total assets $ 2,180,349 $ 2,214,400

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

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

7 unchanged sentences

The seven operating leases have durations, including assumed renewals, ranging from 19.9 to 84.7 years, excluding an adjacent parking lot lease with a term of 1.8 years as of December 31, 2022.

On January 1, 2019, the Company adopted ASU 2016- 02 and recorded ROU assets and lease liabilities related to these ground operating leases (see Note 2 — Summary of Significant Accounting Policies for additional information).

The Company did not enter into any additional ground leases during the year ended December 31, 2022.

As of December 31, 2021, the Company’s balance sheet includes ROU assets and operating lease liabilities of $ 7.9 million and $ 8.1 million, respectively, which are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the Company’s consolidated balance sheet.

In determining operating ROU assets and lease liabilities for the Company’s existing operating leases upon the adoption of the new lease guidance as well as for new operating leases in the current period, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases.

The classification of these leases were grandfathered in adoption of ASU 842, whereby they will continue to be classified as operating leases unless modified.

As of December 31, 2022, the Company’s balance sheet included ROU assets and liabilities of $ 7.8 million and $ 8.1 million, respectively, which are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the Company’s consolidated balance sheet.

In determining operating ROU assets and lease liabilities for the Company’s existing operating leases upon the adoption of the lease guidance issued in 2019, as well as for new operating leases since adoption, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases.

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.

2 unchanged sentences

The Company’s ground operating leases have a weighted-average remaining lease term, including assumed renewals, of 34.1 years and a weighted-average discount rate of 7.36 % as of December 31, 2022.

For the years ended December 31, 2021 and 2019, the Company paid cash of $ 0.8 million and $ 0.8 million for amounts included in the measurement of lease liabilities and recorded total rental expense from operating leases of $ 0.9 million, $ 0.9 million and $ 1.0 million, on a straight-line basis in accordance with the standard, during the years ended December 31, 2021, 2020 and 2019, respectively.

For the years ended December 31, 2022, 2021 and 2020, the Company paid cash of $ 0.7 million, $ 0.8 million and $ 0.8 million for amounts included in the measurement of lease liabilities and recorded total rental expense from operating leases of $ 0.9 million, $ 0.9 million and $ 0.9 million, on a straight-line basis in accordance with the standard, during the years ended December 31, 2022, 2021 and 2020, respectively.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

11 unchanged sentences

There are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties.

HEALTHCARE TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Environmental Matters

6 unchanged sentences

The stock dividend was payable on January 18, 2023 to holders of record of the Company’s common stock at the close of business on January 13, 2023.

Swap Terminations

Subsequent to December 31, 2022, the Company terminated two LIBOR-based interest rate swap agreements with an aggregate notional amount of $ 50.0 million.

The swaps were terminated in an asset position with a fair value of $ 2.0 million.

The funds were received in February 2023.

This amount will remain in AOCI and will amortize into net loss as a reduction to interest expense through March 2024.

Credit Facility Borrowings

Subsequent to December 31, 2022, the Company drew $ 20.0 million on its Revolving Credit Facility.

Subsequent to December 31, 2022, the Company acquired four single-tenant MOB properties for a contract purchase price of $ 20.0 million, which was funded with borrowings from the Revolving Credit Facility.

Healthcare Trust, Inc.

175 unchanged sentences

Fox Ridge North Little Rock - North Little Rock, AR (9) AR 12/29/2015 9,704 — 19,265 — 263 19,528 4,211

Autumn Leaves of Cy-Fair - Houston, TX (11) TX 12/31/2015 — 1,225 11,335 ( 895 ) ( 8,940 ) 2,725 —

Autumn Leaves of Meyerland - Houston, TX (11) TX 12/31/2015 — 2,033 13,411 ( 1,486 ) ( 10,559 ) 3,399 —

Autumn Leaves of Clear Lake, Houston, TX (11) TX 12/31/2015 — 1,599 13,194 ( 1,169 ) ( 10,388 ) 3,236 —

Autumn Leaves of The Woodlands - The Woodlands, TX (11) TX 12/31/2015 — 2,413 9,141 ( 1,763 ) ( 7,252 ) 2,539 —

High Desert Medical Group Medical Office Building - Lancaster, CA CA 4/7/2017 7,480 1,459 9,300 — — 10,759 1,749

5 unchanged sentences

Beaumont Medical Center - Warren, MI (5), (8) MI 12/22/2017 — 1,078 9,525 — 19 10,622 1,328

DaVita Dialysis - Hudson, FL (5), (8) FL 12/22/2017 — 226 1,979 — 121 2,326 273

DaVita Bay Breeze Dialysis Center - Largo, FL (5), (8) FL 12/22/2017 — 399 896 — 48 1,343 150

Greenfield Medical Plaza - Gilbert, AZ (5), (8) AZ 12/22/2017 — 1,476 4,144 — 277 5,897 633

RAI Care Center - Clearwater, FL (5), (8) FL 12/22/2017 — 624 3,156 — — 3,780 420

Healthcare Trust, Inc.

11 unchanged sentences

Depreciation (3) (4)

DaVita Dialysis - Hudson, FL (5), (8) FL 12/22/2017 — 226 1,979 — 88 2,293 214

DaVita Bay Breeze Dialysis Center - Largo, FL (5), (8) FL 12/22/2017 — 399 896 — 48 1,343 117

Greenfield Medical Plaza - Gilbert, AZ (5), (8) AZ 12/22/2017 — 1,476 4,144 — 195 5,815 489

RAI Care Center - Clearwater, FL (5), (8) FL 12/22/2017 — 624 3,156 — — 3,780 336

Illinois CancerCare - Galesburg, IL (8) IL 12/22/2017 2,323 290 2,457 — — 2,747 368

44 unchanged sentences

WI 1/17/2019 9,088 865 11,355 — 251 12,471 1,353

Lancaster Medical Arts MOB - Lancaster, PA

(5) PA 6/20/2019 — 85 4,417 — — 4,502 569

Women’s Healthcare Group MOB - York, PA

(5) PA 6/21/2019 — 624 2,161 — — 2,785 403

Pioneer Spine Sports - Northampton, MA

(5) MA 7/22/2019 — 435 1,858 — — 2,293 192

Healthcare Trust, Inc.

11 unchanged sentences

Depreciation (3) (4)

Lancaster Medical Arts MOB - Lancaster, PA

(5) PA 6/20/2019 — 85 4,417 — — 4,502 458

Women’s Healthcare Group MOB - York, PA

(5) PA 6/21/2019 — 624 2,161 — — 2,785 342

Pioneer Spine Sports - Northampton, MA

(5) MA 7/22/2019 — 435 1,858 — — 2,293 133

Pioneer Spine Sport - Springfield, MA

30 unchanged sentences

Florida Medical Clinic - Tampa, FL (5) FL 12/1/2021 — 1,104 1,137 — 124 2,365 44

Pensacola Nephrology MOB - Pensacola, FL (5) FL 12/29/2021 — 1,578 5,123 — — 6,701 135

Millennium Eye Care - Freehold, NJ (5) NJ 5/26/2022 — 635 6,014 — — 6,649 125

Atlanta Gastroenterology Associates - Lawrenceville, GA (5) GA 6/29/2022 — 2,639 2,263 — — 4,902 24

Bone and Joint Specialists - Merrillville, IN (5) IN 6/29/2022 — 1,014 2,499 — — 3,513 29

Healthcare Trust, Inc.

11 unchanged sentences

Depreciation (3) (4)

Pensacola Nephrology MOB - Pensacola, FL (5) FL 12/29/2021 — 1,578 5,123 — — 6,701 —

Eastern Carolina ENT - Greenville, NC (5) NC 12/21/2022 — 664 5,826 — — 6,490 —

Fannie Mae Master Credit Facilities (6)(7)

27 unchanged sentences

Balance at beginning of year $ 2,345,708 $ 2,211,451 $ 2,296,627

Additions-Acquisitions 147,161 98,364 80,980

Additions-acquisitions and capital expenditures 44,926 98,364 80,980

Disposals, impairments and reclasses (2)

11 unchanged sentences

For additional information on this reclassification during the year ended December 31, 2020, see Note 3 — Real Estate Investments .

See accompanying report of independent registered public accounting firm.

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

What changed 10-K

Item 9A. Controls and Procedures