000136060412/312022Q3FALSEhttp://fasb.org/us-gaap/2022#ServiceMemberhttp://fasb.org/us-gaap/2022#ServiceMemberP3YP1Y00013606042022-01-012022-09-3000013606042022-11-04xbrli:shares00013606042022-09-30iso4217:USD00013606042021-12-31iso4217:USDxbrli:shares00013606042022-07-012022-09-3000013606042021-07-012021-09-3000013606042021-01-012021-09-300001360604us-gaap:InterestRateSwapMember2022-07-012022-09-300001360604us-gaap:InterestRateSwapMember2021-07-012021-09-300001360604us-gaap:InterestRateSwapMember2022-01-012022-09-300001360604us-gaap:InterestRateSwapMember2021-01-012021-09-300001360604us-gaap:CommonStockMember2022-06-300001360604us-gaap:AdditionalPaidInCapitalMember2022-06-300001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001360604hr:CumulativeNetIncomeMember2022-06-300001360604hr:CumulativeDividendsMember2022-06-300001360604us-gaap:ParentMember2022-06-300001360604us-gaap:NoncontrollingInterestMember2022-06-3000013606042022-06-300001360604us-gaap:CommonStockMember2022-07-012022-09-300001360604us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001360604us-gaap:ParentMember2022-07-012022-09-300001360604us-gaap:NoncontrollingInterestMember2022-07-012022-09-300001360604hr:CumulativeNetIncomeMember2022-07-012022-09-300001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001360604hr:CumulativeDividendsMember2022-07-012022-09-300001360604us-gaap:CommonStockMember2022-09-300001360604us-gaap:AdditionalPaidInCapitalMember2022-09-300001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001360604hr:CumulativeNetIncomeMember2022-09-300001360604hr:CumulativeDividendsMember2022-09-300001360604us-gaap:ParentMember2022-09-300001360604us-gaap:NoncontrollingInterestMember2022-09-300001360604us-gaap:CommonStockMember2021-06-300001360604us-gaap:AdditionalPaidInCapitalMember2021-06-300001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001360604hr:CumulativeNetIncomeMember2021-06-300001360604hr:CumulativeDividendsMember2021-06-300001360604us-gaap:ParentMember2021-06-300001360604us-gaap:NoncontrollingInterestMember2021-06-3000013606042021-06-300001360604us-gaap:CommonStockMember2021-07-012021-09-300001360604us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001360604us-gaap:ParentMember2021-07-012021-09-300001360604hr:CumulativeNetIncomeMember2021-07-012021-09-300001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001360604hr:CumulativeDividendsMember2021-07-012021-09-300001360604us-gaap:CommonStockMember2021-09-300001360604us-gaap:AdditionalPaidInCapitalMember2021-09-300001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001360604hr:CumulativeNetIncomeMember2021-09-300001360604hr:CumulativeDividendsMember2021-09-300001360604us-gaap:ParentMember2021-09-300001360604us-gaap:NoncontrollingInterestMember2021-09-3000013606042021-09-300001360604us-gaap:CommonStockMember2021-12-310001360604us-gaap:AdditionalPaidInCapitalMember2021-12-310001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001360604hr:CumulativeNetIncomeMember2021-12-310001360604hr:CumulativeDividendsMember2021-12-310001360604us-gaap:ParentMember2021-12-310001360604us-gaap:NoncontrollingInterestMember2021-12-310001360604us-gaap:CommonStockMember2022-01-012022-09-300001360604us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001360604us-gaap:ParentMember2022-01-012022-09-300001360604us-gaap:NoncontrollingInterestMember2022-01-012022-09-300001360604hr:CumulativeNetIncomeMember2022-01-012022-09-300001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001360604hr:CumulativeDividendsMember2022-01-012022-09-300001360604us-gaap:CommonStockMember2020-12-310001360604us-gaap:AdditionalPaidInCapitalMember2020-12-310001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001360604hr:CumulativeNetIncomeMember2020-12-310001360604hr:CumulativeDividendsMember2020-12-3100013606042020-12-310001360604us-gaap:NoncontrollingInterestMember2020-12-310001360604us-gaap:CommonStockMember2021-01-012021-09-300001360604us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001360604hr:CumulativeNetIncomeMember2021-01-012021-09-300001360604us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001360604hr:CumulativeDividendsMember2021-01-012021-09-30hr:propertyhr:stateutr:sqft0001360604hr:RealEstatePropertiesHeldInJointVenturesMember2022-09-30xbrli:purehr:buildinghr:variable_interest_entity0001360604hr:MedicalOfficeBuildingMemberhr:NashvilleTennesseeMember2021-12-310001360604hr:MedicalOfficeBuildingMemberhr:NashvilleTennesseeMember2022-09-30hr:financing_receivable0001360604us-gaap:NotesReceivableMember2022-07-012022-09-300001360604us-gaap:NotesReceivableMember2022-01-012022-09-300001360604hr:ParkingIncomeMember2022-07-012022-09-300001360604hr:ParkingIncomeMember2021-07-012021-09-300001360604hr:ParkingIncomeMember2022-01-012022-09-300001360604hr:ParkingIncomeMember2021-01-012021-09-300001360604hr:ManagementFeeIncomeMember2022-07-012022-09-300001360604hr:ManagementFeeIncomeMember2021-07-012021-09-300001360604hr:ManagementFeeIncomeMember2022-01-012022-09-300001360604hr:ManagementFeeIncomeMember2021-01-012021-09-300001360604hr:MiscellaneousMember2022-07-012022-09-300001360604hr:MiscellaneousMember2021-07-012021-09-300001360604hr:MiscellaneousMember2022-01-012022-09-300001360604hr:MiscellaneousMember2021-01-012021-09-300001360604hr:HealthCareRealtyTrustIncMember2022-07-200001360604hr:HealthcareTrustOfAmericaIncMember2022-07-200001360604hr:HealthcareTrustOfAmericaIncMember2022-07-202022-07-200001360604us-gaap:CommonClassAMemberhr:HealthCareRealtyTrustIncorporatedMember2022-07-2000013606042022-07-202022-07-2000013606042022-07-200001360604us-gaap:RestrictedStockMemberhr:HealthcareTrustOfAmericaIncMember2022-07-200001360604us-gaap:RestrictedStockMemberhr:HealthcareTrustOfAmericaIncMember2022-07-202022-07-2000013606042022-07-202022-09-300001360604hr:DallasTXMember2022-02-112022-02-110001360604hr:DallasTXMember2022-02-110001360604hr:SanFranciscoCAMember2022-03-072022-03-070001360604hr:SanFranciscoCAMember2022-03-070001360604hr:RealEstateAcquisitionsMember2022-01-012022-03-310001360604hr:RealEstateAcquisitionsMember2022-03-310001360604stpr:GA2022-04-072022-04-070001360604stpr:GA2022-04-070001360604hr:DenverCOMember2022-04-132022-04-130001360604hr:DenverCOMember2022-04-130001360604hr:ColoradoSpringsCOMember2022-04-132022-04-130001360604hr:ColoradoSpringsCOMember2022-04-130001360604hr:SeattleWAMember2022-04-282022-04-280001360604hr:SeattleWAMember2022-04-280001360604hr:HoustonTXMember2022-04-282022-04-280001360604hr:HoustonTXMember2022-04-280001360604hr:LosAngelesCaliforniaMember2022-04-292022-04-290001360604hr:LosAngelesCaliforniaMember2022-04-290001360604hr:OklahomaCityOKMember2022-04-292022-04-290001360604hr:OklahomaCityOKMember2022-04-290001360604hr:RaleighNCMember2022-05-312022-05-310001360604hr:RaleighNCMember2022-05-310001360604hr:TampaFLMember2022-06-092022-06-090001360604hr:TampaFLMember2022-06-090001360604hr:RealEstateAcquisitionsMember2022-04-012022-06-300001360604hr:RealEstateAcquisitionsMember2022-06-300001360604hr:SeattleWAMember2022-08-012022-08-010001360604hr:SeattleWAMember2022-08-010001360604hr:RaleighNCMember2022-08-092022-08-090001360604hr:RaleighNCMember2022-08-090001360604hr:JacksonvilleFLMember2022-08-092022-08-090001360604hr:JacksonvilleFLMember2022-08-090001360604stpr:GA2022-08-102022-08-100001360604stpr:GA2022-08-100001360604hr:DenverCOMember2022-08-112022-08-110001360604hr:DenverCOMember2022-08-110001360604hr:RaleighNCMember2022-08-182022-08-180001360604hr:RaleighNCMember2022-08-180001360604hr:NashvilleTNMember2022-09-152022-09-150001360604hr:NashvilleTNMember2022-09-150001360604hr:AustinTXMember2022-09-292022-09-290001360604hr:AustinTXMember2022-09-290001360604hr:RealEstateAcquisitionsMember2022-07-012022-09-300001360604hr:RealEstateAcquisitionsMember2022-09-300001360604hr:RealEstateAcquisitionsYearToDateMember2022-01-012022-09-300001360604hr:RealEstateAcquisitionsYearToDateMember2022-09-300001360604us-gaap:SubsequentEventMemberhr:JacksonvilleFLMember2022-10-122022-10-120001360604us-gaap:SubsequentEventMemberhr:JacksonvilleFLMember2022-10-120001360604hr:SanFranciscoCAMemberhr:MedicalOfficeBuildingMemberhr:JointVentureAcquisitionsMember2022-03-070001360604hr:SanFranciscoCAMemberhr:MedicalOfficeBuildingMemberhr:JointVentureAcquisitionsMember2022-03-072022-03-070001360604hr:MedicalOfficeBuildingMemberhr:LosAngelesCaliforniaMemberhr:JointVentureAcquisitionsMember2022-03-070001360604hr:MedicalOfficeBuildingMemberhr:LosAngelesCaliforniaMemberhr:JointVentureAcquisitionsMember2022-03-072022-03-070001360604hr:MedicalOfficeBuildingMemberhr:JointVentureAcquisitionsMember2022-09-300001360604hr:MedicalOfficeBuildingMemberhr:JointVentureAcquisitionsMember2022-01-012022-09-300001360604hr:SanFranciscoCAMemberhr:MedicalOfficeBuildingMember2022-03-072022-03-070001360604hr:MedicalOfficeBuildingMemberhr:LosAngelesCaliforniaMember2022-03-072022-03-070001360604srt:OtherPropertyMember2022-06-300001360604srt:OtherPropertyMember2021-06-300001360604srt:OtherPropertyMember2021-12-310001360604srt:OtherPropertyMember2020-12-310001360604srt:OtherPropertyMember2022-07-012022-09-300001360604srt:OtherPropertyMember2021-07-012021-09-300001360604srt:OtherPropertyMember2022-01-012022-09-300001360604srt:OtherPropertyMember2021-01-012021-09-300001360604srt:OtherPropertyMember2022-09-300001360604srt:OtherPropertyMember2021-09-300001360604hr:LosAngelesCaliforniaMembersrt:OtherPropertyMember2022-01-012022-09-300001360604hr:LosAngelesCaliforniaMemberhr:LimitedLiabilityCompanyOneMembersrt:OtherPropertyMember2022-01-012022-09-300001360604hr:LosAngelesCaliforniaMemberhr:LimitedLiabilityCompanyTwoMembersrt:OtherPropertyMember2022-01-012022-09-300001360604hr:LovelandCOMember2022-02-240001360604hr:LovelandCOMember2022-02-242022-02-240001360604hr:SanAntonioTXMember2022-04-150001360604hr:SanAntonioTXMember2022-04-152022-04-150001360604hr:GAFLPAMember2022-07-290001360604hr:GAFLPAMember2022-07-292022-07-290001360604hr:GAFLTXMember2022-08-040001360604hr:GAFLTXMember2022-08-042022-08-040001360604hr:LosAngelesCaliforniaMember2022-08-050001360604hr:LosAngelesCaliforniaMember2022-08-052022-08-050001360604hr:DallasTXMember2022-08-300001360604hr:DallasTXMember2022-08-302022-08-300001360604hr:IndianapolisINMember2022-08-310001360604hr:IndianapolisINMember2022-08-312022-08-310001360604hr:RealEstateDispositionsMember2022-09-300001360604hr:RealEstateDispositionsMember2022-01-012022-09-300001360604hr:DallasTXMember2022-08-052022-08-050001360604us-gaap:SubsequentEventMemberhr:DallasTXMember2022-10-040001360604hr:HoustonTXMemberus-gaap:SubsequentEventMember2022-10-210001360604us-gaap:SubsequentEventMemberhr:RealEstateDispositionsMember2022-11-090001360604us-gaap:SubsequentEventMemberhr:DallasTXMember2022-10-042022-10-040001360604us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2022-09-300001360604us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2021-12-310001360604stpr:TXhr:LandHeldForDevlopmentMember2022-03-30utr:acre00013606042022-03-300001360604srt:MinimumMember2022-09-300001360604srt:MaximumMember2022-09-300001360604us-gaap:SubsequentEventMember2022-10-012022-10-310001360604us-gaap:LineOfCreditMemberhr:UnsecuredCreditFacilityOneMember2022-09-300001360604us-gaap:LineOfCreditMemberhr:UnsecuredCreditFacilityOneMember2021-12-310001360604us-gaap:LineOfCreditMemberhr:UnsecuredCreditFacilityMember2022-09-300001360604us-gaap:LineOfCreditMemberhr:UnsecuredCreditFacilityMember2021-12-310001360604us-gaap:MediumTermNotesMemberhr:AssetSaleTermLoanMember2022-09-300001360604us-gaap:MediumTermNotesMemberhr:AssetSaleTermLoanMember2021-12-310001360604us-gaap:MediumTermNotesMemberhr:TermLoanDue2023Member2022-09-300001360604us-gaap:MediumTermNotesMemberhr:TermLoanDue2023Member2021-12-310001360604us-gaap:MediumTermNotesMemberhr:TermLoandue2024Member2022-09-300001360604us-gaap:MediumTermNotesMemberhr:TermLoandue2024Member2021-12-310001360604us-gaap:MediumTermNotesMemberhr:TermLoanDue2025Member2022-09-300001360604us-gaap:MediumTermNotesMemberhr:TermLoanDue2025Member2021-12-310001360604us-gaap:MediumTermNotesMemberhr:TermLoandue2026Member2022-09-300001360604us-gaap:MediumTermNotesMemberhr:TermLoandue2026Member2021-12-310001360604us-gaap:MediumTermNotesMemberhr:TermLoanDue2027Member2022-09-300001360604us-gaap:MediumTermNotesMemberhr:TermLoanDue2027Member2021-12-310001360604us-gaap:MediumTermNotesMemberhr:TermLoanDue2028Member2022-09-300001360604us-gaap:MediumTermNotesMemberhr:TermLoanDue2028Member2021-12-310001360604hr:SeniorNotesdue2025Memberus-gaap:SeniorNotesMember2022-09-300001360604hr:SeniorNotesdue2025Memberus-gaap:SeniorNotesMember2021-12-310001360604hr:SeniorNotesDue2026Memberus-gaap:SeniorNotesMember2022-09-300001360604hr:SeniorNotesDue2026Memberus-gaap:SeniorNotesMember2021-12-310001360604us-gaap:SeniorNotesMemberhr:SeniorNotesDue2027Member2022-09-300001360604us-gaap:SeniorNotesMemberhr:SeniorNotesDue2027Member2021-12-310001360604us-gaap:SeniorNotesMemberhr:SeniorNotesdue2028Member2022-09-300001360604us-gaap:SeniorNotesMemberhr:SeniorNotesdue2028Member2021-12-310001360604hr:SeniorNotesDue2030NetOfDiscountAndIssuanceCostsMemberus-gaap:SeniorNotesMember2022-09-300001360604hr:SeniorNotesDue2030NetOfDiscountAndIssuanceCostsMemberus-gaap:SeniorNotesMember2021-12-310001360604hr:SeniorNotesdue2030Memberus-gaap:SeniorNotesMember2022-09-300001360604hr:SeniorNotesdue2030Memberus-gaap:SeniorNotesMember2021-12-310001360604us-gaap:SeniorNotesMemberhr:SeniorNotesDue2031Member2022-09-300001360604us-gaap:SeniorNotesMemberhr:SeniorNotesDue2031Member2021-12-310001360604us-gaap:SeniorNotesMemberhr:SeniorNotesDue2031NetOfDiscountAndIssuanceCostsMember2022-09-300001360604us-gaap:SeniorNotesMemberhr:SeniorNotesDue2031NetOfDiscountAndIssuanceCostsMember2021-12-310001360604us-gaap:MortgagesMemberhr:MortgageNotesPayableNetMember2022-09-300001360604us-gaap:MortgagesMemberhr:MortgageNotesPayableNetMember2021-12-310001360604us-gaap:LineOfCreditMemberhr:UnsecuredCreditFacilityOneMemberus-gaap:RevolvingCreditFacilityMember2022-07-200001360604us-gaap:LineOfCreditMemberhr:UnsecuredCreditFacilityMember2022-07-200001360604us-gaap:MediumTermNotesMemberhr:TermLoandue2024Memberus-gaap:InterestRateSwapMember2022-09-300001360604us-gaap:MediumTermNotesMemberhr:TermLoandue2024Memberus-gaap:InterestRateSwapMember2022-01-012022-09-300001360604us-gaap:MortgagesMember2022-02-180001360604us-gaap:MortgagesMemberstpr:CA2022-02-180001360604us-gaap:MortgagesMember2022-02-182022-02-180001360604us-gaap:MortgagesMember2022-02-240001360604us-gaap:MortgagesMemberhr:ColoradoSpringsCOMember2022-02-240001360604us-gaap:MortgagesMember2022-02-242022-02-240001360604hr:A3875SeniorNotesDue2025Memberhr:HealthcareTrustOfAmericaIncMember2022-09-300001360604hr:A3625SeniorNotesDue2028Memberhr:HealthcareTrustOfAmericaIncMember2022-09-300001360604hr:HealthcareTrustOfAmericaIncMemberhr:A2400SeniorNotesDue2030Member2022-09-300001360604hr:A2050SeniorNotesDue2031Memberhr:HealthcareTrustOfAmericaIncMember2022-09-300001360604hr:A3875SeniorNotesDue2025Memberhr:HealthcareTrustOfAmericaIncMember2022-07-220001360604hr:A3625SeniorNotesDue2028Memberhr:HealthcareTrustOfAmericaIncMember2022-07-220001360604hr:HealthcareTrustOfAmericaIncMemberhr:A2400SeniorNotesDue2030Member2022-07-220001360604hr:A2050SeniorNotesDue2031Memberhr:HealthcareTrustOfAmericaIncMember2022-07-220001360604hr:HealthcareTrustOfAmericaIncMemberhr:A350SeniorNotesDue2026Member2022-01-012022-09-300001360604hr:HealthcareTrustOfAmericaIncMemberhr:A350SeniorNotesDue2026Member2022-07-220001360604hr:HealthcareTrustOfAmericaIncMemberhr:A350SeniorNotesDue2026Member2022-09-300001360604hr:HealthcareTrustOfAmericaIncMemberhr:A350SeniorNotesDue2026Member2021-12-310001360604hr:HealthcareTrustOfAmericaIncMemberhr:A375SeniorNotesDue2027Member2022-01-012022-09-300001360604hr:HealthcareTrustOfAmericaIncMemberhr:A375SeniorNotesDue2027Member2022-07-220001360604hr:HealthcareTrustOfAmericaIncMemberhr:A375SeniorNotesDue2027Member2022-09-300001360604hr:HealthcareTrustOfAmericaIncMemberhr:A375SeniorNotesDue2027Member2021-12-310001360604hr:HealthcareTrustOfAmericaIncMemberhr:A310SeniorNotesDue2030Member2022-01-012022-09-300001360604hr:HealthcareTrustOfAmericaIncMemberhr:A310SeniorNotesDue2030Member2022-07-220001360604hr:HealthcareTrustOfAmericaIncMemberhr:A310SeniorNotesDue2030Member2022-09-300001360604hr:HealthcareTrustOfAmericaIncMemberhr:A310SeniorNotesDue2030Member2021-12-310001360604hr:HealthcareTrustOfAmericaIncMemberhr:A200SeniorNotesDue2031Member2022-01-012022-09-300001360604hr:HealthcareTrustOfAmericaIncMemberhr:A200SeniorNotesDue2031Member2022-07-220001360604hr:HealthcareTrustOfAmericaIncMemberhr:A200SeniorNotesDue2031Member2022-09-300001360604hr:HealthcareTrustOfAmericaIncMemberhr:A200SeniorNotesDue2031Member2021-12-310001360604hr:HealthcareTrustOfAmericaIncMember2022-09-300001360604hr:HealthcareTrustOfAmericaIncMember2021-12-310001360604hr:AmendedAndRestatedCreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2022-07-202022-07-200001360604hr:TermLoanFacilityDueMay2026Member2022-07-202022-07-200001360604hr:TermLoanFacilityDueJune2026Member2022-07-202022-07-200001360604hr:AmendedTermLoanFacilityDueMay2026Member2022-07-20hr:extension_option0001360604hr:AmendedTermLoanFacilityDueMay2026Member2022-07-202022-07-200001360604hr:AmendedTermLoanFacilityDueJune2026Member2022-07-200001360604hr:CreditFacilityMaturingOctober2025Memberus-gaap:RevolvingCreditFacilityMember2022-09-300001360604hr:CreditFacilityMaturingOctober2025Memberus-gaap:RevolvingCreditFacilityMember2022-07-200001360604hr:TermLoanFacilityDueOctober2025Member2022-07-200001360604hr:TermLoanFacilityDueJanuary2024July202027Member2022-07-200001360604hr:DelayedTermLoanFacilityDueJuly202023Member2022-07-200001360604hr:DelayedTermLoanFacilityDueJuly202023Member2022-07-202022-07-200001360604hr:TermLoanFacilityDueJanuary202028Member2022-07-200001360604us-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-30hr:swap_agreement0001360604us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberhr:InterestRateSwapExpiringDecember162022Member2022-09-300001360604hr:InterestRateSwapExpiringJanuary312023Memberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300001360604hr:InterestRateSwapExpiringJanuary152024Memberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300001360604hr:InterestRateSwapExpiringMay12026Memberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300001360604us-gaap:SubsequentEventMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-11-090001360604us-gaap:SubsequentEventMemberhr:InterestRateSwapExpiringThrough2027Member2022-11-090001360604hr:InterestRateSwaps20172018And2019Memberus-gaap:OtherAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300001360604us-gaap:InterestRateContractMember2022-07-012022-09-300001360604us-gaap:InterestRateContractMember2021-07-012021-09-300001360604us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2022-07-012022-09-300001360604us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2021-07-012021-09-300001360604us-gaap:TreasuryLockMember2022-07-012022-09-300001360604us-gaap:TreasuryLockMember2021-07-012021-09-300001360604us-gaap:InterestExpenseMemberus-gaap:TreasuryLockMember2022-07-012022-09-300001360604us-gaap:InterestExpenseMemberus-gaap:TreasuryLockMember2021-07-012021-09-300001360604us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-07-012022-09-300001360604us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2021-07-012021-09-300001360604us-gaap:InterestExpenseMember2022-07-012022-09-300001360604us-gaap:InterestExpenseMember2021-07-012021-09-300001360604us-gaap:InterestRateContractMember2022-01-012022-09-300001360604us-gaap:InterestRateContractMember2021-01-012021-09-300001360604us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2022-01-012022-09-300001360604us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2021-01-012021-09-300001360604us-gaap:TreasuryLockMember2022-01-012022-09-300001360604us-gaap:TreasuryLockMember2021-01-012021-09-300001360604us-gaap:InterestExpenseMemberus-gaap:TreasuryLockMember2022-01-012022-09-300001360604us-gaap:InterestExpenseMemberus-gaap:TreasuryLockMember2021-01-012021-09-300001360604us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-01-012022-09-300001360604us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2021-01-012021-09-300001360604us-gaap:InterestExpenseMember2022-01-012022-09-300001360604us-gaap:InterestExpenseMember2021-01-012021-09-300001360604hr:ActiveInterestRateSwapsMember2022-09-300001360604hr:SettledInterestRateSwapsMember2022-09-300001360604hr:MedicalOfficeBuildingMemberhr:DallasTXMember2022-09-300001360604hr:MedicalOfficeBuildingMemberhr:TacomaWAMember2022-09-300001360604hr:NashvilleTNMemberhr:MedicalOfficeBuildingMembersrt:ScenarioForecastMember2023-09-300001360604hr:NashvilleTNMemberhr:MedicalOfficeBuildingMember2022-09-300001360604hr:NashvilleTNMemberhr:MedicalOfficeBuildingMember2021-01-012021-12-310001360604stpr:FLhr:MedicalOfficeBuildingMember2022-09-300001360604stpr:FLhr:MedicalOfficeBuildingMembersrt:ScenarioForecastMember2024-06-300001360604hr:MedicalOfficeBuildingMembersrt:ScenarioForecastMemberhr:RaleighNCMember2024-12-310001360604hr:MedicalOfficeBuilding2Memberhr:RaleighNCMember2022-09-300001360604hr:MedicalOfficeBuildingMemberstpr:WA2022-09-300001360604hr:MedicalOfficeBuilding2Memberstpr:WA2022-09-300001360604us-gaap:SubsequentEventMember2022-11-022022-11-020001360604us-gaap:StockCompensationPlanMember2021-01-012021-09-300001360604us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001360604us-gaap:ForwardContractsMember2021-01-012021-09-300001360604hr:NonVestedStockAwardMemberhr:ExecutiveIncentiveProgramMember2022-01-012022-03-310001360604hr:NonVestedStockAwardMemberhr:ExecutiveIncentiveProgramMembersrt:MinimumMember2022-01-012022-03-310001360604hr:NonVestedStockAwardMemberhr:ExecutiveIncentiveProgramMembersrt:MaximumMember2022-01-012022-03-310001360604hr:StockIncentivePlanMemberus-gaap:RestrictedStockMemberhr:DirectorsMember2022-06-300001360604hr:StockIncentivePlanMemberus-gaap:RestrictedStockMemberhr:DirectorsMember2022-04-012022-06-300001360604hr:StockIncentivePlanMemberus-gaap:RestrictedStockMemberhr:DirectorsMember2022-09-300001360604hr:StockIncentivePlanMemberus-gaap:RestrictedStockMemberhr:DirectorsMember2022-07-012022-09-300001360604hr:StockIncentivePlanMemberus-gaap:RestrictedStockMemberhr:DirectorsMembersrt:MinimumMember2022-07-012022-09-300001360604hr:StockIncentivePlanMemberus-gaap:RestrictedStockMemberhr:DirectorsMembersrt:MaximumMember2022-07-012022-09-300001360604hr:StockIncentivePlanMember2022-06-300001360604hr:StockIncentivePlanMember2021-06-300001360604hr:StockIncentivePlanMember2021-12-310001360604hr:StockIncentivePlanMember2020-12-310001360604hr:StockIncentivePlanMember2022-07-012022-09-300001360604hr:StockIncentivePlanMember2021-07-012021-09-300001360604hr:StockIncentivePlanMember2022-01-012022-09-300001360604hr:StockIncentivePlanMember2021-01-012021-09-300001360604hr:StockIncentivePlanMember2022-09-300001360604hr:StockIncentivePlanMember2021-09-300001360604hr:StockIncentivePlanMemberus-gaap:RestrictedStockMember2022-01-012022-09-300001360604hr:StockIncentivePlanMemberus-gaap:RestrictedStockMember2021-01-012021-09-300001360604us-gaap:RestrictedStockMemberhr:ExecutiveIncentiveProgramMember2022-01-032022-01-030001360604us-gaap:RestrictedStockMember2022-01-032022-01-030001360604hr:AtTheMarketEquityOfferingProgramMember2022-01-012022-01-310001360604hr:MarketCondition1Member2022-01-012022-01-310001360604hr:MarketCondition2Member2022-01-012022-01-3100013606042022-01-012022-01-310001360604hr:PerformanceConditionsMember2022-01-012022-01-310001360604us-gaap:RestrictedStockMember2022-06-300001360604us-gaap:RestrictedStockMember2021-06-300001360604us-gaap:RestrictedStockMember2021-12-310001360604us-gaap:RestrictedStockMember2020-12-310001360604us-gaap:RestrictedStockMember2022-07-012022-09-300001360604us-gaap:RestrictedStockMember2021-07-012021-09-300001360604us-gaap:RestrictedStockMember2022-01-012022-09-300001360604us-gaap:RestrictedStockMember2021-01-012021-09-300001360604us-gaap:RestrictedStockMember2022-09-300001360604us-gaap:EmployeeStockMember2022-06-300001360604us-gaap:EmployeeStockMember2021-06-300001360604us-gaap:EmployeeStockMember2021-12-310001360604us-gaap:EmployeeStockMember2020-12-310001360604us-gaap:EmployeeStockMember2022-07-012022-09-300001360604us-gaap:EmployeeStockMember2021-07-012021-09-300001360604us-gaap:EmployeeStockMember2022-01-012022-09-300001360604us-gaap:EmployeeStockMember2021-01-012021-09-300001360604us-gaap:EmployeeStockMember2022-09-300001360604us-gaap:EmployeeStockMember2021-09-300001360604us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-09-300001360604us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001360604us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001360604us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to

Commission File Number: 001-35568 (Healthcare Realty Trust Incorporated)

HEALTHCARE REALTY TRUST INCORPORATED
(Exact name of Registrant as specified in its charter) 
Maryland 20-4738467
(State or other jurisdiction of Incorporation or organization) (I.R.S. Employer Identification No.)
3310 West End Avenue, Suite 700
Nashville, Tennessee 37203
(Address of principal executive offices)
(615) 269-8175
(Registrant's telephone number, including area code)
www.healthcarerealty.com
(Internet address)

Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol Name of Each Exchange on Which Registered
Class A Common Stock, $0.01 par value per share HR New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    

Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer Accelerated filer Non-accelerated filer
Smaller reporting company Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No






As of November 4, 2022, the Registrant had 380,572,290 shares of Common Stock outstanding.



Explanatory Note

On July 20, 2022, pursuant to that certain Agreement and Plan of Merger dated as of February 28, 2022 (the “Merger Agreement”), by and among Healthcare Realty Trust Incorporated, a Maryland corporation (now known as HRTI, LLC, a Maryland limited liability company) (“Legacy HR”), Healthcare Trust of America, Inc., a Maryland corporation (now known as Healthcare Realty Trust Incorporated) (“Legacy HTA”), Healthcare Trust of America Holdings, LP, a Delaware limited partnership (now known as Healthcare Realty Holdings, L.P.) (the “OP”), and HR Acquisition 2, LLC, a Maryland limited liability company (“Merger Sub”), Merger Sub merged with and into Legacy HR, with Legacy HR continuing as the surviving entity and a wholly-owned subsidiary of Legacy HTA (the “Merger”). Immediately following the Merger, Legacy HR converted to a Maryland limited liability company and changed its name to “HRTI, LLC” and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”. In addition, the equity interests of Legacy HR were contributed by means of a contribution and assignment agreement to the OP such that Legacy HR became a wholly-owned subsidiary of the OP. As a result, Legacy HR became a part of an umbrella partnership REIT (“UPREIT”) structure, which is intended to align the corporate structure of the combined company after giving effect to the Merger and the UPREIT reorganization and to provide a platform for the combined company to more efficiently acquire properties in a tax-deferred manner. The combined company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $0.01 par value per share, trade on the New York Stock Exchange (the “NYSE”) under the ticker symbol “HR”.
For accounting purposes, the Merger was treated as a “reverse acquisition” in which Legacy HR was considered the accounting acquirer. As a result, the historical financial statements of the accounting acquirer, Legacy HR, became the historical financial statements of the Company, as defined below. Future periodic reports for periods ending following the Merger will reflect financial and other information of the Company. The acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”), which requires, among other things, the assets acquired and the liabilities assumed to be recognized at their acquisition date fair value.
For purposes of this Quarterly Report on Form 10-Q, references to the “Company” are to Legacy HR for periods prior to the closing of the Merger and thereafter to Legacy HR and Legacy HTA after giving effect to the Merger.
In addition, the OP has issued unsecured notes described in Note 6 to our Condensed Consolidated Financial Statements included in this report. All unsecured notes are fully and unconditionally guaranteed by the Company, and the OP is 98.9% owned by the Company. Effective January 4, 2021, the SEC adopted amendments to the financial disclosure requirements which permit subsidiary issuers of obligations guaranteed by the parent to omit separate financial statements if the consolidated financial statements of the parent company have been filed, the subsidiary obligor is a consolidated subsidiary of the parent company, the guaranteed security is debt or debt-like, and the security is guaranteed fully and unconditionally by the parent. Accordingly, separate consolidated financial statements of the OP have not been presented.



HEALTHCARE REALTY TRUST INCORPORATED
FORM 10-Q
September 30, 2022


    Table of Contents
     


PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Healthcare Realty Trust Incorporated
Condensed Consolidated Balance Sheets
Amounts in thousands, except per share data
ASSETS
Unaudited
SEPTEMBER 30, 2022
DECEMBER 31, 2021
Real estate properties
Land $ 1,449,550  $ 387,918 
Buildings and improvements 11,439,797  4,337,641 
Lease intangibles 968,914  120,478 
Personal property 11,680  11,761 
Investment in financing receivable, net 118,919  186,745 
Financing lease right-of-use assets 79,950  31,576 
Construction in progress 43,148  3,974 
Land held for development 73,321  24,849 
Total real estate properties 14,185,279  5,104,942 
Less accumulated depreciation and amortization (1,468,736) (1,338,743)
Total real estate properties, net 12,716,543  3,766,199 
Cash and cash equivalents 57,583  13,175 
Assets held for sale, net 185,074  57 
Operating lease right-of-use assets 321,365  128,386 
Investments in unconsolidated joint ventures 327,752  161,942 
Goodwill 148,891  3,487 
Other assets, net 438,235  185,673 
Total assets $ 14,195,443  $ 4,258,919 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Notes and bonds payable $ 5,570,139  $ 1,801,325 
Accounts payable and accrued liabilities 231,018  86,108 
Liabilities of assets held for sale 10,644  294 
Operating lease liabilities 268,840  96,138 
Financing lease liabilities 72,378  22,551 
Other liabilities 203,398  67,387 
Total liabilities 6,356,417  2,073,803 
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value per share; 200,000 shares authorized; none issued and outstanding
—  — 
Class A Common stock, $.01 par value per share; 1,000,000 shares authorized; 380,572 and 150,457 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
3,806  1,505 
Additional paid-in capital 9,586,556  3,972,917 
Accumulated other comprehensive income (loss) 5,524  (9,981)
Cumulative net income attributable to common stockholders 1,342,819  1,266,158 
Cumulative dividends (3,211,492) (3,045,483)
Total stockholders' equity 7,727,213  2,185,116 
Non-controlling interest 111,813  — 
Total equity 7,839,026  2,185,116 
Total liabilities and equity $ 14,195,443  $ 4,258,919 
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these financial statements.


1


Healthcare Realty Trust Incorporated
Condensed Consolidated Statements of Income
For the Three and Nine Months Ended September 30, 2022 and 2021
Amounts in thousands, except per share data
Unaudited
THREE MONTHS ENDED
September 30,
NINE MONTHS ENDED
September 30,
2022 2021 2022 2021
Revenues
Rental income $ 298,931  $ 131,746  $ 578,052  $ 388,620 
Interest income 3,366  1,917  7,253  2,426 
Other operating 4,057  2,969  9,270  7,347 
306,354  136,632  594,575  398,393 
Expenses
Property operating 112,473  55,518  226,947  159,241 
General and administrative 16,741  8,207  38,317  25,251 
Acquisition and pursuit costs 482  974  3,137  2,388 
Merger-related costs 79,402  —  92,603  — 
Depreciation and amortization 158,117  50,999  267,889  150,904 
367,215  115,698  628,893  337,784 
Other income (expense)
Gain on sales of real estate properties 143,908  1,186  197,188  41,046 
Interest expense (53,044) (13,334) (82,248) (39,857)
Loss on extinguishment of debt (1,091) —  (2,520) — 
Impairment of real estate properties —  (10,669) 25  (16,581)
Equity loss from unconsolidated joint ventures (124) (183) (776) (404)
Interest and other (expense) income, net (172) —  (378) 239 
89,477  (23,000) 111,291  (15,557)
Net income (loss) $ 28,616  $ (2,066) $ 76,973  $ 45,052 
Net income attributable to non-controlling interests (312) —  (312) — 
Net income (loss) attributable to common stockholders $ 28,304  $ (2,066) $ 76,661  $ 45,052 
Basic earnings per common share $ 0.08  $ (0.02) $ 0.36  $ 0.31 
Diluted earnings per common share $ 0.08  $ (0.02) $ 0.35  $ 0.31 
Weighted average common shares outstanding - basic 328,805  143,818  209,807  141,521 
Weighted average common shares outstanding - diluted 332,031  143,818  210,944  141,613 

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these financial statements.


2


Healthcare Realty Trust Incorporated
Condensed Consolidated Statements of Comprehensive Income
For the Three and Nine Months Ended September 30, 2022 and 2021
Amounts in thousands
Unaudited
THREE MONTHS ENDED
 September 30,
NINE MONTHS ENDED
September 30,
2022 2021 2022 2021
Net income (loss) $ 28,616  $ (2,066) $ 76,973  $ 45,052 
Other comprehensive income
Interest rate swaps
Reclassification adjustments for losses included in net income (interest expense) 763  1,131  2,672  3,340 
Gains arising during the period on interest rate swaps 6,083  36  12,905  2,079 
6,846  1,167  15,577  5,419 
Comprehensive income (loss) 35,462  (899) 92,550  50,471 
Less: comprehensive income attributable to non-controlling interests (384) —  (384) — 
Comprehensive income (loss) attributable to common stockholders $ 35,078  $ (899) $ 92,166  $ 50,471 
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these financial statements.


3


Healthcare Realty Trust Incorporated
Condensed Consolidated Statements of Equity
For the Three Months Ended September 30, 2022 and 2021
Amounts in thousands, except per share data
Unaudited
Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Cumulative
Net Income
Cumulative
Dividends
Total
Stockholders’
Equity
Non-controlling Interests Total
Equity
Balance at June 30, 2022 $ 1,516  $ 4,002,525  $ (1,250) $ 1,314,515  $ (3,139,440) $ 2,177,866  $ —  $ 2,177,866 
Issuance of common stock, net of issuance costs —  84  —  —  —  84  —  84 
Merger consideration transferred 2,289  5,574,174  —  —  —  5,576,463  110,702  5,687,165 
Non-controlling interests acquired —  —  —  —  —  —  1,266  1,266 
Common stock redemptions —  (41) —  —  —  (41) —  (41)
Share-based compensation 9,716  —  —  —  9,717  —  9,717 
Redemption of non-controlling interest —  98  —  —  —  98  (97)
Net income —  —  —  28,304  —  28,304  312  28,616 
Reclassification adjustments for losses included in net income (interest expense)
—  —  755  —  —  755  763 
Gains arising during the period on
interest rate swaps
—  —  6,019  —  —  6,019  64  6,083 
Dividends to common stockholders
($0.31 per share)
—  —  —  —  (72,052) (72,052) (442) (72,494)
Balance at September 30, 2022 $ 3,806  $ 9,586,556  $ 5,524  $ 1,342,819  $ (3,211,492) $ 7,727,213  $ 111,813  $ 7,839,026 
Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Cumulative
Net Income
Cumulative
Dividends
Total
Stockholders’
Equity
Non-controlling Interests Total
Equity
Balance at June 30, 2021 $ 1,455  $ 3,818,592  $ (13,580) $ 1,246,617  $ (2,956,830) $ 2,096,254  $ —  $ 2,096,254 
Issuance of common stock, net of issuance costs 20  61,442  —  —  —  61,462  —  61,462 
Common stock redemptions —  —  —  —  —  —  —  — 
Share-based compensation —  2,538  —  —  —  2,538  —  2,538 
Net loss —  —  —  (2,066) —  (2,066) —  (2,066)
Reclassification adjustments for losses included in net income (interest expense)
—  —  1,131  —  —  1,131  —  1,131 
Losses arising during the period on interest rate swaps
—  —  36  —  —  36  —  36 
Dividends to common stockholders ($0.3025 per share)
—  —  —  —  (44,022) (44,022) —  (44,022)
Balance at September 30, 2021 $ 1,475  $ 3,882,572  $ (12,413) $ 1,244,551  $ (3,000,852) $ 2,115,333  $ —  $ 2,115,333 

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these financial statements.







4


Healthcare Realty Trust Incorporated
Condensed Consolidated Statements of Equity
For the Nine Months Ended September 30, 2022 and 2021
Amounts in thousands, except per share data
Unaudited
Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Cumulative
Net Income
Cumulative
Dividends
Total
Stockholders’
Equity
Non-controlling Interest Total Equity
Balance at December 31, 2021 $ 1,505  $ 3,972,917  $ (9,981) $ 1,266,158  $ (3,045,483) $ 2,185,116  $ —  $ 2,185,116 
Issuance of common stock, net of issuance costs 22,847  —  —  —  22,855  —  22,855 
Merger consideration transferred 2,289  5,574,174  —  —  —  5,576,463  110,702  5,687,165 
Non-controlling interests acquired —  —  —  —  —  —  1,266  1,266 
Common stock redemptions —  (248) —  —  —  (248) —  (248)
Share-based compensation 16,768  —  —  —  16,772  —  16,772 
Redemption of non-controlling interest —  98  —  —  —  98  (97)
Net Income —  —  —  76,661  —  76,661  312  76,973 
Reclassification adjustments for losses included in net income (interest expense)

—  —  2,664  —  —  2,664  2,672 
Gains arising during the period on
interest rate swaps
—  —  12,841  —  —  12,841  64  12,905 
Dividends to common stockholders
($0.93 per share)
—  —  —  —  (166,009) (166,009) (442) (166,451)
Balance at September 30, 2022 $ 3,806  $ 9,586,556  $ 5,524  $ 1,342,819  $ (3,211,492) $ 7,727,213  $ 111,813  $ 7,839,026 
Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Cumulative
Net Income
Cumulative
Dividends
Total
Stockholders’
Equity
Non-controlling Interest Total Equity
Balance at December 31, 2020 $ 1,395  $ 3,635,341  $ (17,832) $ 1,199,499  $ (2,870,027) $ 1,948,376  $ —  $ 1,948,376 
Issuance of common stock, net of issuance costs 78  240,660  —  —  —  240,738  —  240,738 
Common stock redemptions —  (1,610) —  —  —  (1,610) —  (1,610)
Share-based compensation 8,181  —  —  —  8,183  —  8,183 
Net income —  —  —  45,052  —  45,052  —  45,052 
Reclassification adjustments for losses included in net income (interest expense)
—  —  3,340  —  —  3,340  —  3,340 
Gains arising during the period on interest rate swaps
—  —  2,079  —  —  2,079  —  2,079 
Dividends to common stockholders ($0.9075 per share)
—  —  —  —  (130,825) (130,825) —  (130,825)
Balance at September 30, 2021 $ 1,475  $ 3,882,572  $ (12,413) $ 1,244,551  $ (3,000,852) $ 2,115,333  $ —  $ 2,115,333 
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these financial statements.







5




Healthcare Realty Trust Incorporated
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2022 and 2021
Amounts in thousands
Unaudited

OPERATING ACTIVITIES
NINE MONTHS ENDED
September 30,
2022 2021
Net income $ 76,973  $ 45,052 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 267,889  150,904 
Other amortization 11,875  2,721 
Share-based compensation 16,772  8,183 
Amortization of straight-line rent receivable (lessor) (12,267) (4,574)
Amortization of straight-line rent on operating leases (lessee) 2,016  1,115 
Gain on sales of real estate properties (197,188) (41,046)
Loss on extinguishment of debt 2,520  — 
Impairment of real estate properties (25) 16,581 
Equity loss from unconsolidated joint ventures 776  404 
Distributions from unconsolidated joint ventures 893  — 
Non-cash interest from financing and notes receivable (1,901) (196)
Changes in operating assets and liabilities:
Other assets, including right-of-use-assets (19,230) (9,947)
Accounts payable and accrued liabilities 35,769  215 
Other liabilities (58,213) 843 
Net cash provided by operating activities 126,659  170,255 
INVESTING ACTIVITIES
Acquisitions of real estate (376,924) (250,766)
Development of real estate (17,572) (2,020)
Additional long-lived assets (97,797) (69,647)
Funding of mortgages and notes receivable (3,441) — 
Investments in unconsolidated joint ventures (99,586) (49,612)
Investment in financing receivable 167  (104,654)
Proceeds from sales of real estate properties and additional long-lived assets 870,806  112,029 
Proceeds from notes receivable repayments 500  — 
Cash assumed in Merger, including restricted cash for special dividend payment 1,149,681  — 
Net cash provided by (used in) investing activities 1,425,834  (364,670)
FINANCING ACTIVITIES
Net (repayments)/borrowings on unsecured credit facility (154,400) 90,500 
Borrowings on term loans 666,500  — 
Repayment on term loan (718,500) — 
Repayments of notes and bonds payable (18,880) (2,914)
Redemption of notes and bonds payable (2,184) — 
Dividends paid (165,735) (130,825)
Special dividend paid in relation to the Merger (1,123,648) — 
Net proceeds from issuance of common stock 22,851  240,779 
Common stock redemptions (894) (2,014)
Distributions to non-controlling interest holders (442) — 
Debt issuance and assumption costs (12,753) (252)
Payments made on finance leases —  (162)
Net cash (used in) provided by financing activities (1,508,085) 195,112 
Increase in cash and cash equivalents 44,408  697 
Cash and cash equivalents at beginning of period 13,175  15,303 
Cash and cash equivalents at end of period $ 57,583  $ 16,000 


6



Supplemental Cash Flow Information
NINE MONTHS ENDED
September 30,
2022 2021
Interest paid $ 83,382  $ 40,653 
Invoices accrued for construction, tenant improvements and other capitalized costs $ 52,840  $ 11,663 
Capitalized interest $ 848  $ 187 






















The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these financial statements.


7



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies
Business Overview
Healthcare Realty Trust Incorporated is a real estate investment trust ("REIT") that owns, leases, manages, acquires, finances, develops and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of September 30, 2022, the Company had gross investments of approximately $14.2 billion in 695 real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property. The Company's 695 real estate properties are located in 35 states and total approximately 40.7 million square feet. The Company provided leasing and property management services to approximately 38.9 million square feet nationwide. As of September 30, 2022, the Company had a weighted average ownership interest of approximately 49% in 33 real estate properties held in joint ventures. See Note 3 below for more details regarding the Company's unconsolidated joint ventures. Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to the Company's Condensed Consolidated Financial Statements, are outside the scope of our independent registered public accounting firm’s review.
Basis of Presentation
For purposes of this Quarterly Report on Form 10-Q, references to the “Company” are to Legacy HR for periods prior to the closing of the Merger and thereafter to Legacy HR and Legacy HTA after giving effect to the Merger. The Merger is described in more detail in Note 2 to these Condensed Consolidated Financial Statements. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein and specific disclosures incorporated as a result of the Merger, management believes there has been no material change in the information disclosed in the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. All material intercompany transactions and balances have been eliminated in consolidation.
This interim financial information should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. In addition, the interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2022 for many reasons including, but not limited to, the Merger (as discussed in more detail in Note 2 below), acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties.
Principles of Consolidation
The Company’s Condensed Consolidated Financial Statements include, as of September 30, 2022, the accounts of the Company, its wholly owned subsidiaries, and joint ventures and partnerships where the Company controls the operating activities. The interests not owned by the Company are presented as non-controlling interests on the accompanying Condensed Consolidated Balance Sheets and Statements of Operations, Condensed Consolidated Statements of Comprehensive Income, and Condensed Consolidated Statements of Equity. GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). Accounting Standards Codification 810 broadly defines a VIE as an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary. The Company performs this analysis on an ongoing basis. As of September 30, 2022, the Company


8



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
identified three entities that qualified as VIE's because the limited partners in these partnerships, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights. Two of the entities are consolidated and one is unconsolidated.
Holders of operating partnership units (“OP Units”) are considered to be non-controlling interest holders in the OP and their ownership interests are reflected as equity on the accompanying Condensed Consolidated Balance Sheets. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity. As of September 30, 2022, there were approximately 4.0 million, or 1.1%, of OP Units issued and outstanding held by non-controlling interest holders. Additionally, the Company is the primary beneficiary of this VIE. Accordingly, the Company consolidates the interests in the OP. However, because the Company holds what is deemed to be significantly all of the OP, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs.
For property holding entities not determined to be VIEs, the Company consolidates such entities in which it owns 100% of the equity or has a controlling financial interest evidenced by ownership of a majority voting interest. All intercompany balances and transactions are eliminated in consolidation.
As of September 30, 2022, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company exercised significant influence over but did not control these entities. See Note 3 below for more details regarding the Company's unconsolidated joint ventures.
Use of Estimates in the Condensed Consolidated Financial Statements
Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates.
Reclassifications
Certain reclassifications have been made on the Company's prior year Condensed Consolidated Balance Sheet to conform to current year presentation. Previously, the Company's Lease intangibles were included in Building, improvements and lease intangibles and Goodwill was included with Other assets, net. These amounts are now classified as separate line items on the Company's Condensed Consolidated Balance Sheets.                                                     
Investments in Leases - Financing Receivables, Net
In accordance with Accounting Standards Codification ("ASC") 842, for transactions in which the Company enters into a contract to acquire an asset and leases it back to the seller (i.e., a sale leaseback transaction), control of the asset is not considered to have transferred when the seller-lessee has a purchase option. As a result, the Company does not recognize the underlying real estate asset but instead recognizes a financial asset in accordance with ASC 310 “Receivables”.
During the first quarter of 2022, the Company reclassified the two medical office buildings in Nashville, Tennessee that were acquired in separate sale-leaseback transactions in the fourth quarter of 2021. The leases with the sellers commenced in the first quarter, which resulted in the allocation of the financing receivable totaling $73.9 million to land and building and improvements.
Real Estate Notes Receivable
Real estate notes receivable consists of mezzanine and other real estate loans, which are generally collateralized by a pledge of the borrower’s ownership interest in the respective real estate owner, a mortgage or deed of trust, and/or corporate guarantees. Real estate notes receivable are intended to be held-to-maturity and are recorded at amortized cost, net of unamortized loan origination costs and fees and allowance for credit losses. As of September 30, 2022, real estate notes receivable, net totaled $79.0 million.
Interest Income
Income from Lease Financing Receivables
For the three and nine months ended September 30, 2022, the Company recognized the related income from two financing receivables totaling $2.0 million and $5.9 million, respectively, based on an imputed interest rate over the


9



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
terms of the applicable lease. As a result, the interest recognized from the financing receivable will not equal the cash payments from the lease agreement.
Acquisition costs incurred in connection with entering into the financing receivable are treated as loan origination fees. These costs are classified with the financing receivable and are included in the balance of the net investment. Amortization of these amounts will be recognized as a reduction to Income from financing receivable, net over the life of the lease.
Income from Real Estate Notes Receivable
During the three and nine months ended September 30, 2022, the Company recognized interest income of $1.3 million related to real estate notes receivable. Unpaid interest is capitalized, with principal and any unpaid interest due on the maturity date.
Revenue from Contracts with Customers (Topic 606)
The Company recognizes certain revenue under the core principle of Topic 606. This topic requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease revenue is not within the scope of Topic 606. To achieve the core principle, the Company applies the five step model specified in the guidance.
Revenue that is accounted for under Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Income in the Other operating line item. This line item includes parking income, management fee income and other miscellaneous income. Below is a detail of the amounts by category:
THREE MONTHS ENDED
September 30,
NINE MONTHS ENDED
September 30,
in thousands 2022 2021 2022 2021
Type of Revenue
Parking income $ 2,428  $ 2,187  $ 6,100  $ 5,725 
Management fee income 1
1,426  723  2,864  1,381 
Miscellaneous 203  59  306  241 
$ 4,057  $ 2,969  $ 9,270  $ 7,347 
1 Includes the recovery of certain expenses under the financing receivable as outlined in the management agreement.

The Company’s major types of revenue that are accounted for under Topic 606 that are listed above are all accounted for as the performance obligation is satisfied. The performance obligations that are identified for each of these items are satisfied over time, and the Company recognizes revenue monthly based on this principle.
New Accounting Pronouncements
Accounting Standards Update No. 2020-04
On March 12, 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR and Term SOFR-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 derivatives consistent with past presentation. Management continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.


10



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Note 2. Merger with HTA

On July 20, 2022 (the “Closing Date”), pursuant to the Agreement and Plan of Merger dated as of February 28, 2022 (the “Merger Agreement”), by and among Healthcare Realty Trust Incorporated, a Maryland corporation (now known as HRTI, LLC, a Maryland limited liability company) (“Legacy HR”), Healthcare Trust of America, Inc., a Maryland corporation (now known as Healthcare Realty Trust Incorporated) (“Legacy HTA”), Healthcare Trust of America Holdings, LP, a Delaware limited partnership (now known as Healthcare Realty Holdings, L.P.) (the “OP”), and HR Acquisition 2, LLC, a Maryland limited liability company (“Merger Sub”), Merger Sub merged with and into Legacy HR, with Legacy HR continuing as the surviving entity and a wholly-owned subsidiary of Legacy HTA (the “Merger”).
On the Closing Date, each outstanding share of Legacy HR common stock, $0.01 par value per share (the “Legacy HR Common Stock”), was cancelled and converted into the right to receive one share of Legacy HTA class A common stock at a fixed ratio of 1.00 to 1.00. Per the terms of the Merger Agreement, Legacy HTA declared a special dividend of $4.82 (the “Special Dividend”) for each outstanding share of Legacy HTA class A common stock, $0.01 par value per share ( the “Legacy HTA Common Stock”), and the OP declared a corresponding distribution to the holders of its partnership units, payable to Legacy HTA stockholders and OP unitholders of record on July 19, 2022.
Immediately following the Merger, Legacy HR converted to a Maryland limited liability company and changed its name to HRTI, LLC and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”. In addition, the equity interests of Legacy HR were contributed by Legacy HTA by means of a contribution and assignment agreement to the OP such that Legacy HR became a wholly-owned subsidiary of the OP. As a result, Legacy HR became a part of an umbrella partnership REIT (“UPREIT”) structure, which is intended to align the corporate structure of the combined company after giving effect to the Merger and UPREIT reorganization (the “Combined Company”). The combined company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $0.01 par value per share, trade on the New York Stock Exchange (the “NYSE”) under the ticker symbol “HR”.
The primary reason for the Merger was to expand the Company’s size, scale, diversification, liquidity and access to capital, in order to further enhance its competitive advantages and accelerate its investment activities.
For accounting purposes, the Merger was treated as a “reverse acquisition” in which Legacy HTA was considered the legal acquirer and Legacy HR was considered the accounting acquirer based on various factors, including, but not limited to: (i) the composition of the board of directors of the Combined Company, (ii) the composition of senior management of the Combined Company, and (iii) the premium transferred to the Legacy HTA stockholders. As a result, the historical financial statements of the accounting acquirer, Legacy HR, became the historical financial statements of the Combined Company.
The acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, which requires, among other things, the assets acquired and the liabilities assumed to be recognized at their acquisition date fair value.
The consideration transferred on the Closing Date is as follows:
Dollars in thousands
Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted(a)
228,520,990 
Exchange ratio 1.00 
Implied shares of Legacy HR Common Stock issued 228,520,990 
Adjusted closing price of Legacy HR Common Stock on July 20, 2022(b)
$ 24.37 
Value of implied Legacy HR Common Stock issued $ 5,569,057 
Fair value of Legacy HTA restricted stock awards attributable to pre-Merger services(c)
7,406 
Consideration transferred $ 5,576,463 
(a) Includes 228,520,990 shares of Legacy HTA Common Stock as of July 20, 2022. The number of shares of HTA Common Stock presented above was based on 228,857,717 total shares of Legacy HTA Common Stock outstanding as of the Closing Date, less 192 HTA fractional shares that were paid in cash less 336,535 shares of Legacy HTA restricted stock (net of 215,764 shares of Legacy HTA restricted stock withheld). For accounting purposes, these shares and units were converted to Legacy HR Common Stock, at an exchange ratio of 1.00 per share of HTA Common Stock.
(b) For accounting purposes, the fair value of Legacy HR Common Stock issued to former holders of Legacy HTA Common Stock was based on the per share closing price of Legacy HR Common Stock on July 20, 2022.


11



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
(c) Represents the fair value of Legacy HTA restricted shares which fully vested prior to the closing of the Merger or became fully vested as a result of the closing of the Merger and which are attributable to pre-combination services.

Preliminary Purchase Price Allocation
The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the Closing Date:
Dollars in thousands
ASSETS
Real estate investments
Land $ 985,926 
Buildings and improvements 6,960,418 
Lease intangible assets(a)
831,920 
Financing lease right-of-use assets 9,874 
Construction in progress 10,071 
Land held for development 46,538 
Total real estate investments $ 8,844,747 
Assets held for sale, net 707,442 
Investments in unconsolidated joint ventures 67,892 
Cash and cash equivalents 26,034 
Restricted cash 1,123,647 
Operating lease right-of-use assets 198,261 
Other assets, net (b) (c)
209,163 
Total assets acquired $ 11,177,186 
LIABILITIES
Notes and bonds payable $ 3,991,300 
Accounts payable and accrued liabilities 1,227,570 
Liabilities of assets held for sale 28,677 
Operating lease liabilities 173,948 
Financing lease liabilities 10,720 
Other liabilities 203,210 
Total liabilities assumed $ 5,635,425 
Net identifiable assets acquired $ 5,541,761 
Non-controlling interest $ 110,702 
Goodwill $ 145,404 
(a) The weighted average amortization period for the acquired lease intangible assets is 5.5 years.
(b) Includes $34.6 million of gross contractual accounts receivable, which approximates fair value, of which the Company preliminarily did not expect $12.3 million to be collected as of Closing Date.
(c) Includes $78.7 million of gross contractual real estate notes receivable, the fair value of which was $74.8 million, and the Company preliminarily expects to collect substantially all of the real estate notes receivable proceeds as of the Closing Date.
As of September 30, 2022, the Company had not finalized the determination of fair value of certain tangible and intangible assets acquired and liabilities assumed including, but not limited to real estate assets and liabilities, notes receivables and goodwill. As such, the assessment of fair value of assets acquired and liabilities assumed is preliminary and was based on information that was available at the time the Condensed Consolidated Financial Statements were prepared. The finalization of the purchase accounting assessment could result in material changes in the Company’s determination of the fair value of assets acquired and liabilities assumed, which will be recorded as measurement period adjustments in the period in which they are identified, up to one year from the Closing Date.
A preliminary estimate of approximately $145.4 million has been allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. The recognized goodwill is attributable to expected synergies and benefits arising from the Merger, including anticipated general and administrative cost savings and potential economies of scale benefits in both tenant


12



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
and vendor relationships following the closing of the Merger. None of the goodwill recognized is expected to be deductible for tax purposes.
Merger related Costs
In conjunction with the Merger, the Company incurred Merger-related costs of $79.4 million during the three months ended September 30, 2022 and $92.6 million during the nine months ended September 30, 2022, which were included within Merger-related costs in results of operations. The Merger-related costs primarily consist of legal, consulting, banking services, and other Merger-related costs.
Unaudited Pro Forma Financial Information
The Condensed Consolidated Statements of Income for the three months ended September 30, 2022 include $157.4 million of revenues and $20.6 million of net loss and for the nine months ended September 30, 2022 include $157.4 million of revenues and $20.6 million of net loss associated with the results of operations of Legacy HTA from the Merger closing date to September 30, 2022.
The following unaudited pro forma information presents a summary of our Condensed Consolidated Statements of Income for the three months and nine months ended September 30, 2022 and 2021, as if the Merger had occurred on January 1, 2021. Adjustments in the pro forma financial information include but are not limited to the following:
(i) additional depreciation and amortization expense related to the acquired tangible and intangible assets,
(ii) additional interest expense on transaction-related borrowings, including assumed debt in connection with the Merger,
(iii) additional rental income related to the assumed above and below-market leases, and straight-line rent and
(iv) Merger-related costs and other one-time, non-recurring costs.
The pro forma financial information excludes adjustments for estimated cost synergies or other effects of the integration of the Merger.
The following pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses.
THREE MONTHS ENDED
September 30,
NINE MONTHS ENDED
September 30,
Dollars in thousands 2022 2021 2022 2021
Total revenues $ 352,744  $ 332,465  $ 1,054,809  $ 982,192 
Net income $ 115,496  $ (14,930) $ 160,120  $ (79,754)




13



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Note 3. Real Estate Investments
2022 Company Acquisitions
The following table details the Company's acquisitions for the nine months ended September 30, 2022:
Dollars in thousands DATE ACQUIRED PURCHASE PRICE
CASH
CONSIDERATION
1
REAL
ESTATE 2
OTHER 3
SQUARE FOOTAGE
Dallas, TX 2/11/22 $ 8,175  $ 8,185  $ 8,202  $ (17) 18,000 
San Francisco, CA 4
3/7/22 114,000  112,986  108,687  4,299  166,396 
Q1 2022 subtotal 122,175  121,171  116,889  4,282  184,396 
Atlanta, GA 4/7/22 6,912  7,054  7,178  (124) 21,535 
Denver, CO 4/13/22 6,320  5,254  5,269  (15) 12,207 
Colorado Springs, CO 5
4/13/22 13,680  13,686  13,701  (15) 25,800 
Seattle, WA 4/28/22 8,350  8,334  8,370  (36) 13,256 
Houston, TX 4/28/22 36,250  36,299  36,816  (517) 76,781 
Los Angeles, CA 4/29/22 35,000  35,242  25,400  9,842  34,282 
Oklahoma City, OK 4/29/22 11,100  11,259  11,334  (75) 34,944 
Raleigh, NC 4
5/31/22 27,500  26,710  27,127  (417) 85,113 
Tampa, FL 5
6/9/22 18,650  18,619  18,212  407  55,788 
Q2 2022 subtotal 163,762  162,457  153,407  9,050  359,706 
Seattle, WA 8/1/22 4,850  4,806  4,882  (76) 10,593 
Raleigh, NC 8/9/22 3,783  3,878  3,932  (54) 11,345 
Jacksonville, FL 8/9/22 18,195  18,508  18,583  (75) 34,133 
Atlanta, GA 8/10/22 11,800  11,525  12,038  (513) 43,496 
Denver, CO 8/11/22 14,800  13,902  13,918  (16) 34,785 
Raleigh, NC 8/18/22 11,375  10,670  10,547  123  31,318 
Nashville, TN 9/15/22 21,000  20,764  20,572  192  61,932 
Austin, TX 9/29/22 5,450  5,449  5,572  (123) 15,000 
Q3 2022 subtotal 91,253  89,502  90,044  (542) 242,602 
Total real estate acquisitions $ 377,190  $ 373,130  $ 360,340  $ 12,790  786,704 
1Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.
2Excludes financing right of use assets.
3Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition.
4Includes three properties.
5Includes two properties.

Subsequent to September 30, 2022, the Company acquired the following property:
Dollars in thousands DATE ACQUIRED PURCHASE PRICE SQUARE FOOTAGE
Jacksonville, FL 10/12/22 $ 3,600  6,200 
2022 Joint Venture Acquisitions
The following table details the joint venture acquisitions for the nine months ended September 30, 2022. These joint venture acquisitions are not consolidated for purposes of the Company's Condensed Consolidated Financial Statements.
Dollars in thousands DATE ACQUIRED PURCHASE PRICE
CASH
CONSIDERATION
1
REAL
ESTATE
OTHER 2
SQUARE FOOTAGE COMPANY OWNERSHIP %
San Francisco, CA 3
3/7/22 $ 67,175  $ 66,789  $ 65,179  $ 1,610  110,865  50  %
Los Angeles, CA 4
3/7/22 33,800  32,384  32,390  (6) 103,259  50  %
Total joint venture acquisitions $ 100,975  $ 99,173  $ 97,569  $ 1,604  214,124 

1Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.
2Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition.
3Includes three properties.


14



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
4Includes two properties.

Unconsolidated Joint Ventures
The Company's investment in and loss recognized for the three and nine months ended September 30, 2022 and 2021 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below:
THREE MONTHS ENDED
September 30,
NINE MONTHS ENDED
September 30,
Dollars in thousands 2022 2021 2022 2021
Investments in unconsolidated joint ventures, beginning of period $ 210,781  $ 117,935  $ 161,942  $ 73,137 
New investments during the period 1
117,880  4,593  167,479  49,612 
Equity loss recognized during the period (124) (183) (776) (404)
Owner distributions (785) —  (893) — 
Investments in unconsolidated joint ventures, end of period 1
$ 327,752  $ 122,345  $ 327,752  $ 122,345 

1Includes unconsolidated joint ventures acquired as part of the Merger, as well as investments in two joint ventures representing a 20% and 40% ownership interest in portfolios in Los Angeles, California and Dallas, Texas, respectively. Also, see 2022 Real Estate Asset Dispositions below for additional information.
2022 Real Estate Asset Dispositions
The following table details the Company's dispositions for the nine months ended September 30, 2022:
Dollars in thousands DATE DISPOSED SALE PRICE CLOSING ADJUSTMENTS NET PROCEEDS NET REAL ESTATE INVESTMENT
OTHER (INCLUDING RECEIVABLES) 1
GAIN/(IMPAIRMENT) SQUARE FOOTAGE
Loveland, CO 2
2/24/22 $ 84,950  $ (45) $ 84,905  $ 40,095  $ $ 44,806  150,291 
San Antonio, TX 2
4/15/22 25,500  (2,272) 23,228  14,381  284  8,563  201,523 
GA, FL, PA 3, 8
7/29/22 133,100  (8,109) 124,991  124,991  —  —  316,739 
GA, FL, TX 5, 8
8/4/22 160,917  (5,893) 155,024  151,819  3,205  —  343,545 
Los Angeles, CA 3, 6, 8
8/5/22 134,845  (3,102) 131,743  131,332  411  —  283,780 
Dallas, TX 5, 7, 8
8/30/22 114,290  (682) 113,608  113,608  —  —  189,385 
Indianapolis, IN 4, 9
8/31/22 238,845  (5,846) 232,999  84,767  4,324  143,908  506,406 
Total dispositions $ 892,447  $ (25,949) $ 866,498  $ 660,993  $ 8,228  $ 197,277  1,991,669 
1Includes straight-line rent receivables, leasing commissions and lease inducements.
2Includes two properties.
3Includes four properties.
4Includes five properties.
5Includes six properties.
6Values and square feet are represented at 100%. The Company retained a 20% ownership interest in the joint venture that purchased these properties.
7Values and square feet are represented at 100%. The Company retained a 40% ownership interest in the joint venture that purchased these properties.
8These properties were acquired as part of the Merger and were included as assets held for sale in the purchase price allocation.
9Two of the five properties included in this portfolio were acquired in the Merger and were included as assets held for sale in the purchase price allocation.


Subsequent to September 30, 2022, the Company disposed of the following properties:
Dollars in thousands DATE DISPOSED SALE PRICE SQUARE FOOTAGE
Dallas, TX 1, 2
10/4/22 $ 104,025  291,328 
Houston, TX 2
10/21/22 32,000  134,910 
Total dispositions $ 136,025  426,238 
1Includes two properties.
2These properties were classified as assets held for sale as of September 30, 2022.


15



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Assets Held for Sale
The Company had six properties classified as assets held for sale as of September 30, 2022 and no properties classified as assets held for sale as of December 31, 2021. The table below reflects the assets and liabilities of the properties classified as held for sale as of September 30, 2022 and December 31, 2021:
Dollars in thousands September 30, 2022 December 31, 2021
Balance Sheet data:
Land $ 10,594  $ — 
Building and improvements 199,821  — 
Lease intangibles 11,389  — 
Personal property 211  — 
Financing lease right-of-use assets 307  — 
222,322  — 
Accumulated depreciation (47,051) — 
Real estate assets held for sale, net 175,271  — 
Operating lease right-of-use assets 1,193  — 
Other assets, net 8,610  57 
Assets held for sale, net $ 185,074  $ 57 
Accounts payable and accrued liabilities $ 3,768  $ 169 
Operating lease liabilities $ 864  $ — 
Financing lease liabilities $ 2,427  $ — 
Other liabilities 3,585  125 
Liabilities of assets held for sale $ 10,644  $ 294 
Note 4. Leases
Lessor Accounting
The Company’s properties generally were leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2040. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.
The Company's leases typically have escalators that are either based on a stated percentage or an index such as the consumer price index ("CPI"). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three and nine months ended September 30, 2022 was $298.9 million and $578.1 million, respectively. Lease income for the Company's operating leases recognized for the three and nine months ended September 30, 2021 was $131.7 million and $388.6 million, respectively.
On March 30, 2022, the Company executed a lease as a ground lessor for a 1.9 acre parcel of land in Texas previously recorded in land held for development. The lease is classified as a sales-type lease under Topic 842 as the present value of lease payments equals or exceeds substantially all of the fair value of the underlying asset. The land value of $1.8 million was reclassified from Land held for development to Other assets.


16



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of September 30, 2022 were as follows:
Dollars in thousands OPERATING
2022 $ 243,946 
2023 937,733 
2024 816,000 
2025 702,251 
2026 605,417 
2027 and thereafter 2,242,792 
$ 5,548,139 
Lessee Accounting
As of September 30, 2022, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of September 30, 2022, the Company had 243 properties totaling 17.8 million square feet that were held under ground leases. Some of the ground lease renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on CPI. The Company had 75 prepaid ground leases as of September 30, 2022. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.5 million and $0.1 million of the Company’s rental expense for the three months ended September 30, 2022 and 2021, respectively, and $0.8 million and $0.4 million for the nine months ended September 30, 2022 and 2021, respectively.
The Company’s future lease payments (primarily for its 168 non-prepaid ground leases) as of September 30, 2022 were as follows:
Dollars in thousands OPERATING FINANCING
2022 $ 3,665  $ 503 
2023 15,606  2,139 
2024 15,193  2,182 
2025 14,715  2,218 
2026 14,735  2,255 
2027 and thereafter 894,018  398,092 
Total undiscounted lease payments 957,932  407,389 
Discount (689,092) (335,011)
Lease liabilities $ 268,840  $ 72,378 


17



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
The following table provides details of the Company's total lease expense for the three and nine months ended September 30, 2022 and 2021:
THREE MONTHS ENDED
September 30,
NINE MONTHS ENDED
September 30,
Dollars in thousands 2022 2021 2022 2021
Operating lease cost
Operating lease expense $ 4,204  $ 1,196  $ 6,613  $ 3,555 
Variable lease expense 1,061  1,016  3,123  2,883 
Finance lease cost
Amortization of right-of-use assets 381  90  884  267 
Interest on lease liabilities 861  255  1,913  748 
Total lease expense $ 6,507  $ 2,557  $ 12,533  $ 7,453 
Other information
Operating cash flows outflows related to operating leases $ 3,847 $ 1,424  $ 8,443  $ 5,855 
Operating cash flows outflows related to financing leases $ 476 $ 151  $ 1,262  $ 678 
Financing cash flows outflows related to financing leases $ 3 $ $ $ 162 
Right-of-use assets obtained in exchange for new finance lease liabilities $ 9,874 $ 1,420  $ 50,463  $ 1,420 
Right-of-use assets obtained in exchange for new operating lease liabilities $ 198,261 $ 8,298  $ 198,261  $ 8,298 
Weighted-average years remaining lease term (excluding renewal options) - operating leases 50.2 47.8
Weighted-average years remaining lease term (excluding renewal options) - finance leases 60.1 63.2
Weighted-average discount rate - operating leases 5.7  % 5.6  %
Weighted-average discount rate - finance leases 5.0  % 5.4  %



18



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Note 5. Other Assets and Liabilities
Other Assets
Other assets consist primarily of intangible assets, prepaid assets, real estate notes receivable, straight-line rent receivables, accounts receivable, additional long-lived assets and interest rate swaps. Items included in "Other assets, net" on the Company's Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 are detailed in the table below:
Dollars in thousands September 30, 2022 December 31, 2021
Above-market intangible assets, net $ 86,410  $ 4,966 
Prepaid assets 85,053  58,618 
Real estate notes receivable, net 1
79,036  — 
Straight-line rent receivables 78,038  70,784 
Accounts receivable, net 36,103  14,072 
Additional long-lived assets, net 21,722  20,048 
Interest rate swap assets 16,136  — 
Ground lease modification, net 8,170  8,511 
Other receivables, net 7,258  — 
Debt issuance costs, net 6,504  1,813 
Project costs 4,001  5,129 
Net investment in lease 1,828  — 
Customer relationship intangible assets, net 1,134  1,174 
Other 6,842  558 
$ 438,235  $ 185,673 
         1 In October 2022, an additional amount of $15.0 million was funded for a real estate loan transaction.
Accounts Payable and Accrued Liabilities
The following table provides details of the items included in "Accounts payable and accrued liabilities" on the Company's Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021:
Dollars in thousands September 30, 2022 December 31, 2021
Accrued property taxes $ 86,192  $ 35,295 
Accounts payable and capital expenditures 61,461  17,036 
Accrued interest 24,959  12,060 
Accrued income and franchise taxes 2,685  983 
Retainage accrued on construction invoices 1,304  2,215 
Other operating accruals 54,417  18,519 
$ 231,018  $ 86,108 
Other Liabilities
The following table provides details of the items included in "Other liabilities" on the Company's Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021:
Dollars in thousands September 30, 2022 December 31, 2021
Below-market intangible liabilities, net $ 113,118  $ 4,931 
Deferred revenue 60,675  45,130 
Security deposits 28,299  11,116 
Interest rate swap liability —  5,917 
Other 1,306  293 
$ 203,398  $ 67,387 


19



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Note 6. Notes and Bonds Payable
The table below details the Company’s notes and bonds payable as of September 30, 2022 and December 31, 2021. 
 
MATURITY DATES 1
BALANCE 2 AS OF
EFFECTIVE INTEREST RATE
as of 9/30/2022
Dollars in thousands 9/30/2022 12/31/2021
$1.5 billion Unsecured Credit Facility 3
10/27 $ 190,600  $ —  3.99  %
$700 million Unsecured Credit Facility 3
5/23 —  210,000  —  %
$1.125 billion Asset Sale Term Loan 4
7/24 421,919  —  4.07  %
$350 million Unsecured Term Loan 3
7/25 348,735  —  4.10  %
$200 million Unsecured Term Loan 4
5/26 199,611  199,460  3.51  %
$300 million Unsecured Term Loan 4 5
10/26 299,930  —  2.47  %
$150 million Unsecured Term Loan 5
5/26 149,458  149,376  3.32  %
$200 million Unsecured Term Loan 4 5
7/27 199,328  —  2.27  %
$300 million Unsecured Term Loan 3
1/28 297,764  —  3.56  %
Senior Notes due 2025 5/25 249,025  249,040  4.12  %
Senior Notes due 2026 4
8/26 569,786  —  4.94  %
Senior Notes due 2027 4
7/27 478,541  —  4.76  %
Senior Notes due 2028 1/28 296,711  296,612  3.85  %
Senior Notes due 2030 4
2/30 562,974  —  5.30  %
Senior Notes due 2030 3/30 296,787  296,813  2.72  %
Senior Notes due 2031 4
3/31 628,617  —  5.13  %
Senior Notes due 2031 3/31 295,424  295,374  2.25  %
Mortgage notes payable 8/23-12/26 84,929  104,650  3.97  %
$ 5,570,139  $ 1,801,325 
1Includes extension options.
2Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable.
3On July 20, 2022, the Company entered into an amended and restated credit facility which included a $1.5 billion revolving credit facility, replacing Legacy HR's $700 million credit facility.
4Debt instruments assumed as part of the Merger with Legacy HTA on July 20, 2022. Amounts shown represent fair value adjustments.
5The effective interest rate includes the impact of interest rate swaps on $675.0 million at a weighted average rate of 1.57% (plus the applicable margin rate, currently 105 basis points).


Changes in Debt Structure
Mortgage payoffs
On February 18, 2022, the Company repaid in full a mortgage note payable bearing interest at a rate of 4.70% that encumbered a 56,762 square foot property in California. The aggregate payoff price of $12.6 million consisted of outstanding principal of $11.0 million and a "make-whole" amount of approximately $1.6 million. The unamortized premium of $0.8 million and the unamortized cost on this note of $0.1 million were written off upon payoff.
On February 24, 2022, the Company repaid in full a mortgage note payable bearing interest at a rate of 6.17% that encumbered a 80,153 square foot property in Colorado, in conjunction with the disposition of the property. The aggregate payoff price of $6.4 million consisted of outstanding principal of $5.8 million and a "make-whole" amount of approximately $0.6 million. The unamortized premium of $0.1 million was written off upon payoff.
Exchange Offer
In connection with the Merger, the OP offered to exchange all validly tendered and accepted notes of each series previously issued by Legacy HR (the “Old HR Notes”) for (i) up to $250,000,000 of 3.875% Senior Notes due 2025 (the “2025 Notes”), (ii) up to $300,000,000 of 3.625% Senior Notes due 2028 (the “2028 Notes”), (iii) up to $300,000,000 of 2.400% Senior Notes due 2030 (the “2030 Notes”) and (iv) up to $300,000,000 of 2.050% Senior Notes due 2031 to be issued by the OP (the “2031 Notes” and, collectively, the “New HR Notes”) and solicited consents from holders of the Old HR Notes to amend the indenture governing the Old HR Notes to eliminate substantially all of the restrictive covenants in such indenture (the “Exchange Offers”). The New HR Notes were issued pursuant to an indenture dated July 22, 2022, among the OP, Legacy HTA and U.S. Bank Trust Company, National Association, as trustee, as


20



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
supplemented by the first supplemental indenture, dated as of July 22, 2022, the second supplemental indenture, dated as of July 22, 2022, the third supplemental indenture, dated as of July 22, 2022 and the fourth supplemental indenture, dated as of July 22, 2022. Legacy HTA guaranteed the New HR Notes pursuant to (i) a guarantee of the 2025 Notes, (ii) a guarantee of the 2028 Notes, (iii) a guarantee of the 2030 Notes, and (iv) a guarantee of the 2031 Notes, each dated July 22, 2022. Legacy HTA and the OP filed a registration statement on Form S-4 (File No. 333-265593) relating to the issuance of the New HR Notes with the Securities and Exchange Commission (the “SEC”) on June 14, 2022, which was declared effective by the SEC on June 28, 2022. The following sets forth the results of the Exchange Offers:
Series of Old HR Notes Tenders and Consents Received as of the Expiration Date Percentage of Total Outstanding Principal Amount of Such Series of Old HR Notes
3.875  %
Senior Notes due 2025
$235,016,000 94.01  %
3.625  %
Senior Notes due 2028
$290,246,000 96.75  %
2.400  %
Senior Notes due 2030
$297,507,000 99.17  %
2.050  %
Senior Notes due 2031
$298,858,000 99.62  %

Senior Notes Assumed with the Merger
In connection with the Merger, the Company assumed senior notes ("Legacy Senior Notes") that were originated on various dates prior to the date of the Merger by the OP (formerly, Healthcare Trust of America Holdings, LP). These notes are all fully and unconditionally guaranteed by the Company and have semi-annual payment requirements. In addition, the Legacy Senior Notes carry customary restrictive financial covenants, including limitations on our ability to incur additional indebtedness and requirements to maintain a pool of unencumbered assets. In addition, the corresponding indentures provide for the ability to redeem the Legacy Senior Notes, subject to certain "make whole" call provisions. The Legacy Senior Notes assumed by the Company consist of the following:
  COUPON PRINCIPAL OUTSTANDING AS OF
Dollars in thousands FACE VALUE 9/30/2022 12/31/2021
Senior Notes due 2026 3.50% $ 600,000  $ 600,000  $ — 
Senior Notes due 2027 3.75% 500,000  500,000  — 
Senior Notes due 2030 3.10% 650,000  650,000  — 
Senior Notes due 2031 2.00% 800,000  800,000  — 
$ 2,550,000  $ 2,550,000  $ — 
Credit Facilities
In connection with the effectiveness of the Merger, Legacy HR (in a limited capacity), Legacy HTA and the OP entered into the Fourth Amended and Restated Credit and Term Loan Agreement (the “Credit Facility”) with Wells Fargo Bank, National Association, as Administrative Agent; Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., and Citibank, N.A., as Joint Book Runners; Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., U.S. Bank National Association, Citibank, N.A., The Bank of Nova Scotia, Capital One, National Association, U.S. Bank National Association, and PNC Capital Markets LLC, as Joint Lead Arrangers; and the other lenders named therein. The Credit Facility restructured the parties’ existing bank facilities and added additional borrowing capacities for the Company following the Merger. The OP is the borrower under the Credit Facility (in such capacity, the “Borrower”).
Legacy HR’s existing $700.0 million revolving credit facility under the Amended and Restated Credit Agreement, dated as of May 31, 2019 (as amended, restated, replaced, supplemented, or otherwise modified from time to time prior to July 20, 2022, the “Existing HR Revolving Credit Agreement”), by and among Legacy HR, the lenders party thereto from time to time and their assignees, as lenders, and Wells Fargo Bank, National Association, as the administrative agent (the “WF Administrative Agent”), was terminated, all outstanding obligations in respect thereof were deemed paid in full and all commitments thereunder were permanently reduced to zero and terminated.


21



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Legacy HR’s existing $200.0 million term loan facility and existing $150.0 million term loan facility under the Amended and Restated Term Loan Agreement, dated as of May 31, 2019 (as amended, restated, replaced, supplemented, or otherwise modified from time to time prior to July 20, 2022, the “Existing HR Term Loan Agreement”), by and among Legacy HR, the lenders party thereto from time to time and their assignees, as lenders, and the WF Administrative Agent, in each, case, were deemed continued and assumed by the Borrower under the Credit Facility, and the Existing HR Term Loan Agreement was terminated.
The existing $200.0 million term loan facility was amended to: (a) conform to the terms of the Borrower’s other term loan facilities under the Credit Facility; (b) include two one-year extension options, resulting in a latest final maturity in May 2026; and (c) reprice to align with the pricing for the Borrower’s other term loan facilities under the Credit Facility; and
The existing $150.0 million term loan facility was amended to conform to the terms of the Borrower’s other term loan facilities under the Credit Facility, and the existing maturity in June 2026 remains unchanged under the Credit Facility.
Legacy HTA’s and the OP’s existing $1.0 billion revolving credit facility was upsized to $1.5 billion (the “Revolver”) pursuant to the Credit Facility. The Revolver currently matures in October 2025, and the Credit Facility adds an additional one-year extension option for the Revolver, for a total of two one-year extension options.
Legacy HTA’s and the OP’s existing $300.0 million term loan facility was deemed continued pursuant to the Credit Facility and was amended to conform to the terms of the Borrower’s other term loan facilities under the Credit Facility. The existing maturity in October 2025 remains unchanged under the Credit Facility.
Legacy HTA’s and the OP’s existing $200.0 million term loan facility was deemed continued pursuant to the Credit Facility and was amended to (a) conform to the terms of the Borrower’s other term loan facilities under the Credit Facility; (b) extend the maturity from January 2024 to July 20, 2027; and (c) reprice to align with the pricing for the Borrower’s other term loan facilities under the Credit Facility.
The Credit Facility provides for a new $350.0 million delayed-draw term loan facility that is available to be drawn for 12 months after July 20, 2022 and has an initial maturity date of July 20, 2023, with two one-year extension options. As of September 30, 2022, the $350.0 million Credit Facility was drawn in full. The terms of any delayed draw term loans funded thereunder conform to the terms of the Borrower’s other term loan facilities under the Credit Facility, and the pricing for such delayed draw term loans aligns with the pricing for the Borrower’s other term loan facilities under the Credit Facility.
The Credit Facility provides for a new $300.0 million term loan facility that was funded on July 20, 2022 and has a maturity date of January 20, 2028, with no extension options. The terms of such term loan facility conform to the terms of the Borrower’s other term loan facilities under the Credit Facility, and the pricing for such term loan facility aligns with the pricing for the Borrower’s other term loan facilities under the Credit Facility.
Note 7. Derivative Financial Instruments
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings.



22



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable 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. Such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.
For derivatives designated, and that qualify, as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.
As of September 30, 2022, the Company had 15 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
EXPIRATION DATE AMOUNT WEIGHTED
AVERAGE RATE
December 16, 2022 75,000  2.37  %
January 31, 2023 $ 300,000  1.42  %
January 15, 2024 1
200,000  1.21  %
May 1, 2026 1
100,000  2.15  %
$ 675,000  1.57  %
1 Derivatives hedge one-month term SOFR.

Subsequent to September 30, 2022, the Company entered into two additional interest rate swaps totaling $250.0 million with multiple counterparties, with both expiring in 2027. The Company designated these interest rate swaps as cash flow hedges of interest rate risk in the fourth quarter of 2022.
Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet
The table below presents the fair value of the Company's derivative financial instruments, as well as their classification on the Condensed Consolidated Balance Sheet as of September 30, 2022.
BALANCE AT SEPTEMBER 30, 2022
In thousands BALANCE SHEET LOCATION FAIR VALUE
Derivatives designated as hedging instruments
Interest rate swaps Other assets $ 16,136 
Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss)
The table below presents the effect of cash flow hedge accounting on AOCI during the three and nine months ended September 30, 2022 and 2021 related to the Company's outstanding interest rate swaps.
GAIN RECOGNIZED IN
AOCI ON DERIVATIVE
three months ended September 30,
LOSS RECLASSIFIED FROM
AOCI INTO INCOME
three months ended September 30,
In thousands 2022 2021 2022 2021
Interest rate swaps $ (6,083) $ (36) Interest expense $ 614  $ 982 
Settled treasury hedges —  —  Interest expense 107  107 
Settled interest rate swaps —  —  Interest expense 42  42 
  $ (6,083) $ (36) Total interest expense $ 763  $ 1,131 



23



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
GAIN RECOGNIZED IN
AOCI ON DERIVATIVE
nine months ended September 30,
LOSS RECLASSIFIED FROM
AOCI INTO INCOME
nine months ended September 30,
In thousands 2022 2021 2022 2021
Interest rate swaps $ (12,905) $ (2,079) Interest expense $ 2,226  $ 2,894 
Settled treasury hedges —  —  Interest expense 320  320 
Settled interest rate swaps —  —  Interest expense 126  126 
  $ (12,905) $ (2,079) Total interest expense $ 2,672  $ 3,340 
The Company estimates that $4.8 million related to active interest rate swaps will be reclassified from AOCI as a decrease to interest expense over the next 12 months, and that $0.6 million related to settled interest rate swaps will be amortized from AOCI as an increase to interest expense over the next 12 months.
Credit-risk-related Contingent Features
The Company's agreements with each of its derivative counterparties contain a cross-default provision under which the Company could be declared in default of its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness.
As of September 30, 2022, the fair value of derivatives in a net asset position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $16.5 million. As of September 30, 2022, the Company has not posted any collateral related to these agreements and was not in breach of any agreement.
Note 8. Commitments and Contingencies
Legal Proceedings
The Company is, from time to time, involved in litigation arising in the ordinary course of business. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
Development and Redevelopment Activity
During the third quarter of 2022, the Company continued the redevelopment of a 217,114 square foot medical office building in Dallas, Texas. As of September 30, 2022, the Company had funded approximately $11.1 million in project costs. The building continues to operate with in-place leases during construction. The first new tenant lease of the redevelopment commenced in the first quarter of 2022.
During the third quarter of 2022, the Company continued the redevelopment of a medical office building in Tacoma, Washington. As of September 30, 2022, the Company had funded approximately $10.3 million in project costs. The redevelopment includes interior and exterior improvements to the existing building, plus the addition of 23,000 square feet. The Company expects the 23,000 square foot tenant lease for the expansion space to commence in the fourth quarter of 2022.
The Company continued the development of a medical office building in Nashville, Tennessee. The Company is constructing a new 106,194 square foot medical office building with the initial tenant lease expected to commence in the third quarter of 2023. As of September 30, 2022, the Company had funded approximately $15.3 million in project costs. The redevelopment includes the demolition of an existing 81,000 square foot medical office building. The Company recognized an impairment charge of $5.0 million related to the existing building in 2021.
The Company is financing the construction of a two building medical office complex in Orlando, Florida. The 156,566 square foot development is expected to be complete in the second quarter of 2024. As of September 30, 2022, the Company had funded approximately $10.6 million towards the project costs.
The Company, through a joint venture partnership, continued the development of a medical office building in Raleigh, North Carolina. This joint venture expects to construct a new 120,694 square foot medical office building that is projected to be complete in the fourth quarter of 2024. As of September 30, 2022, the joint venture had funded approximately $15.3 million towards the project costs.
The Company is redeveloping three medical office buildings totaling 259,290 square feet in Washington, DC. The Company has approved a leasing plan with a capital outlay that is expected to be completed in the second quarter of


24



NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
2024. As of September 30, 2022, the Company had funded $2.0 million in project costs.
Note 9. Stockholders' Equity
Common Stock    
The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the nine months ended September 30, 2022 and the twelve months ended December 31, 2021:
NINE MONTHS ENDED SEPTEMBER 30, 2022 TWELVE MONTHS ENDED DECEMBER 31, 2021
Balance, beginning of period 150,457,433  139,487,375 
Issuance of common stock 229,615,152  10,899,301 
Non-vested share-based awards, net of withheld shares 499,705  70,757 
Balance, end of period 380,572,290  150,457,433 
At-The-Market Equity Offering Program
The Company has equity distribution agreements with various sales agents with respect to the at-the-market (“ATM”) offering program of common stock with an aggregate sales amount of up to $750.0 million. As of September 30, 2022, $750.0 million remained available for issuance under our current ATM offering program.
Common Stock Dividends
During the nine months ended September 30, 2022, the Company declared and paid common stock dividends totaling $0.93 per share. On November 2, 2022, the Company declared a quarterly common stock dividend in the amount of $0.31 per share payable on November 30, 2022 to stockholders of record on November 15, 2022.
Earnings Per Common Share
The Company uses the two-class method of computing net earnings per common shares. The Company's non-vested share-based awards are considered participating securities pursuant to the two-class method.
During the three and nine months ended September 30, 2022, the Company did not enter into any forward sale agreements to sell shares of common stock through the Company's ATM offering program.
The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2022 and 2021.
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
Dollars in thousands, except per share data 2022 2021 2022 2021
Weighted average common shares outstanding
Weighted average common shares outstanding 330,788,997  145,594,127  211,740,767  143,305,737 
Non-vested shares (1,983,742) (1,776,508) (1,933,957) (1,784,544)
Weighted average common shares outstanding - basic 328,805,255  143,817,619  209,806,810  141,521,193 
Weighted average common shares outstanding - basic 328,805,255  143,817,619  209,806,810  141,521,193 
Dilutive effect of forward equity shares —  —  —  14,036 
Dilutive effect of OP Units 3,167,668  —  1,067,493  — 
Dilutive effect of employee stock purchase plan 58,461  —  69,687  78,200 
Weighted average common shares outstanding - diluted 332,031,384  143,817,619  210,943,990  141,613,429 
Net Income (loss) attributable to common stockholders $ 28,304  $ (2,066) $ 76,661  $ 45,052 
Dividends paid on nonvested share-based awards (610) (537) (1,817) (1,617)
Net income (loss) applicable to common stockholders- basic $ 27,694  $ (2,603) $ 74,844  $ 43,435 
Net income attributable to OP units 312  —  312  — 
Net income (loss) applicable to common stockholders - diluted $ 28,006  $ (2,603) $ 75,156  $ 43,435 
Basic earnings per common share - net income $ 0.08  $ (0.02) $ 0.36  $ 0.31 
Diluted earnings per common share - net income $ 0.08  $ (0.02) $ 0.35  $ 0.31 


25



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The effect of non-vested stock awards totaling 911,594 shares, options under the Company's Employee Stock Purchase Plan (the "ESPP") to purchase the Company's stock totaling 63,383 shares, and the dilutive impact of forward-equity contracts outstanding for 14,734 shares of common stock for the three months ended September 30, 2021 were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during that period.
Incentive Plans
Restricted Common Shares
During the nine months ended September 30, 2022, the Company made the following stock awards:
During the first quarter of 2022, the Company granted non-vested stock awards to its named executive officers and other members of senior management and employees with a grant date fair value of $13.0 million, which consisted of an aggregate of 415,184 non-vested shares with vesting periods ranging from three to eight years.
During the second quarter of 2022, the Company granted non-vested stock awards to eight of its directors with a grant date fair value of $0.8 million, which consisted of an aggregate of 26,840 non-vested shares, with a one-year vesting period.
During the third quarter of 2022, the Company granted non-vested stock awards to its 12 non-employee directors with a grant date fair value of $1.8 million, which consisted of an aggregate of 70,816 non-vested shares, with vesting periods ranging from one to three years. The Company also granted non-vested stock awards to an employee, which consisted of 1,036 non-vested shares as a discretionary grant.
A summary of the activity under the Company's share-based incentive plans for the three and nine months ended September 30, 2022 and 2021 is included in the table below.
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
  2022 2021 2022 2021
Share-based awards, beginning of period 1,941,709  1,778,308  1,562,028  1,766,061 
Granted 71,852  —  513,876  203,701 
Vested (7,434) —  (68,481) (191,454)
Forfeited (4,130) (2,957) (5,426) (2,957)
Share-based awards, end of period 2,001,997  1,775,351  2,001,997  1,775,351 

During the nine months ended September 30, 2022 and 2021, the Company withheld 8,745 and 51,972 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested.
Restricted Stock Units
Prior to 2022, the Company granted long-term incentive awards, comprised of restricted stock, based on backward-looking performance measured at the end of the calendar year. The Company adopted a new incentive compensation structure effective January 2022, comprised of restricted stock and restricted stock units ("RSUs"). The RSUs are granted at the beginning of the year with three-year forward-looking performance targets.
On January 3, 2022, the Company granted RSUs to its named executive officers and certain other officers, with a grant date fair value of $9.7 million, which consisted of an aggregate 294,932 RSUs with a five-year vesting period.
Approximately 43% of the RSUs vest based on two market performance conditions. Relative and absolute total shareholder return ("TSR") awards containing these market performance conditions were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $30.56 for the absolute TSR component and $41.30 for the relative TSR component for the January 2022 grant using the following assumptions:


26



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

THREE MONTHS ENDED MARCH 31,
Volatility 30.0  %
Dividend assumption Accrued
Expected term 3 years
Risk-free rate 1.02  %
Stock price (per share) $31.68
The remaining 57% of the restricted stock units vest upon certain operating performance conditions. With respect to the operating performance conditions of the January grant, the grant date fair value was $31.68 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January restricted stock units was $33.04 per share.
The following is a summary of the RSU activity during the three and nine months ended September 30, 2022:
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
  Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Weighted Average Grant Date Fair Value
Non-vested, beginning of period 294,932  —  —  — 
Granted —  —  294,932  $ 33.04 
Vested —  —  —  — 
Non-vested as of September 30, 2022 294,932  294,932 

Employee Stock Purchase Plan
Legacy HR maintained an ESPP prior to the completion of the Merger. The outstanding options to purchase shares of the common stock of Legacy HR became options to purchase Class A Common Stock of the Company upon completion of the Merger. No new options will be granted under the ESPP. A summary of the activity under the ESPP for the three and nine months ended September 30, 2022 and 2021 is included in the table below.
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
  2022 2021 2022 2021
Outstanding and exercisable, beginning of period 405,534  389,414  348,514  341,647 
Granted —  —  255,960  253,200 
Exercised (4,576) (5,323) (17,094) (24,300)
Forfeited (37,628) (18,961) (83,417) (60,995)
Expired —  —  (140,633) (144,422)
Outstanding and exercisable, end of period 363,330  365,130  363,330  365,130 
Note 10. Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practical to estimate that value.
Cash and cash equivalents - The carrying amount approximates fair value due to the short term maturity of these investments.
Real estate notes receivable - Real estate notes receivable are recorded in other assets on the Company's Condensed Consolidated Balance Sheets. Fair value is estimated using cash flow analyses, based on current interest rates for similar types of arrangements.
Borrowings under the Unsecured Credit Facility and the Term Loans Due 2024 and 2026 - The carrying amount approximates fair value because the borrowings are based on variable market interest rates.
Senior Notes and Mortgage Notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements.
Interest rate swap agreements - Interest rate swap agreements are recorded in other liabilities on the Company's Condensed Consolidated Balance Sheets at fair value. Fair value is estimated by utilizing pricing models that consider forward yield curves and discount rates.


27



Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable at September 30, 2022 and December 31, 2021.
  September 30, 2022 December 31, 2021
Dollars in millions CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE
Notes and bonds payable 1
$ 5,570.1  $ 5,321.0  $ 1,801.3  $ 1,797.4 
Real estate notes receivable 1
$ 79.0  $ 79.0  $ —  $ — 
1Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.



28


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Disclosure Regarding Forward-Looking Statements
This report and other materials the Company has filed or may file with the Securities and Exchange Commission (the "SEC"), as well as information included in oral statements or other written statements made, or to be made, by management of the Company, contain, or will contain, disclosures that are “forward-looking statements.” Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “target,” “intend,” “plan,” “estimate,” “project,” “continue,” “should,” “could," "budget" and other comparable terms, and include, but are not limited to, statements related to the anticipated timing, financing benefits and financial and operational impact of the Merger. These forward-looking statements are based on the Company's current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with: diverting the attention the Company's management from ongoing business operations; failure to realize the expected benefits of the Merger; significant transaction costs and/or unknown or inestimable liabilities of the Merger; the risk that Legacy HR's and Legacy HTA’s respective businesses will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; risks related to future opportunities and plans for the Company, including the uncertainty of expected future financial performance and results of the Company; the possibility that, if the Company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Company’s common stock could decline; general adverse economic and local real estate conditions; the inability of significant tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business; increases in interest rates; increases in operating expenses and real estate taxes; changes in the dividend policy for the Company’s common stock or its ability to pay dividends; impairment charges; pandemics or other health crises, such as COVID-19; and other risks and uncertainties affecting the Company, including those described from time to time under the caption “Risk Factors” and elsewhere in the Company’s filings and reports with the SEC, including Legacy HR’s and Legacy HTA's Annual Reports on Form 10-K for the year ended December 31, 2021. Moreover, other risks and uncertainties of which the Company is not currently aware may also affect the Company's forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated. The forward-looking statements made in this communication are made only as of the date hereof or as of the dates indicated in the forward-looking statements, even if they are subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made, except as required by law.
Stockholders and investors are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in the Company’s filings and reports, including, without limitation, estimates and projections regarding the performance of development projects the Company is pursuing.
For a detailed discussion of the Company’s risk factors, please refer to the Company's, Legacy HR's and Legacy HTA's filings with the SEC, including this report and Item 1A. Risk Factors herein and Legacy HR's and Legacy HTA's Annual Report on Form 10-K for the year ended December 31, 2021.
Merger with Healthcare Trust of America
Completed Merger    
On July 20, 2022, Legacy HR, Legacy HTA, the OP and Merger Sub completed the Merger in accordance with the terms of the Merger Agreement. Immediately following the Merger, Legacy HR converted to a Maryland limited liability company and changed its name to “HRTI, LLC” and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”. In addition, the equity interests of Legacy HR were contributed by Legacy HTA by means of a contribution and assignment agreement to the OP such that Legacy HR became a wholly-owned subsidiary of the OP. As a result, Legacy HR became a part of an umbrella partnership REIT (“UPREIT”) structure, which is intended to align the corporate structure of the combined company after giving effect to the Merger and the UPREIT reorganization and to provide a platform for the combined company to more efficiently acquire properties in a tax-deferred manner. The Company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $0.01 par value per share, trade on the New York Stock Exchange (the “NYSE”) under the ticker symbol “HR”. For additional information on the Merger, see Notes 2 and 6 to the Condensed Consolidated Financial Statements.
Unless expressly stated otherwise, the discussion in this Item 2 refers to Legacy HR's financial condition and results of operations on a stand-alone basis prior to giving effect to the Merger. Because Legacy HR was the accounting acquirer under GAAP in the transaction, its historical financial statements became the historical financial


29


statements of the Company. For additional information, please refer to the Explanatory Note in this Quarterly Report on Form 10-Q.
Liquidity and Capital Resources
Sources and Uses of Cash
The Company’s primary sources of cash include rent receipts from its real estate portfolio based on contractual arrangements with its tenants, proceeds from the sales of real estate properties, joint ventures, and proceeds from public or private debt or equity offerings. After the refinancing of its bank facilities in connection with the Merger, as of September 30, 2022, the Company had $1.3 billion available to be drawn on its Credit Facility and $57.6 million in cash.
The Company expects to continue to meet its liquidity needs, including funding additional investments, paying dividends, and funding debt service, through cash flows from operations and liquidity sources, including the Credit Facility. Management believes that the Company's liquidity and sources of capital are adequate to satisfy its cash requirements. The Company cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to the Company in sufficient amounts to meet its liquidity needs.
Financings in Connection with the Merger
In connection with the effectiveness of the Merger, Legacy HR (in a limited capacity), Legacy HTA and the OP entered into the Credit Facility, which restructures the parties’ existing bank facilities and adds additional borrowing capacities for the Company following the Merger.

Investing Activities
Cash flows provided by investing activities for the nine months ended September 30, 2022 were approximately $1.4 billion. Below is a summary of significant investing activities.
Acquisitions
The following table details the Company's acquisitions for the nine months ended September 30, 2022:
Dollars in thousands
ASSOCIATED HEALTH SYSTEM/TENANCY 1
DATE ACQUIRED PURCHASE PRICE SQUARE FOOTAGE MILES TO CAMPUS
Dallas, TX Texas Health Resources 2/11/22 $ 8,175  18,000 0.19
San Francisco, CA 2
Kaiser/Sutter Health 3/7/22 114,000  166,396  0.90 to 3.30
Q1 2022 subtotal 122,175  184,396 
Atlanta, GA Wellstar Health 4/7/22 6,912  21,535  0.00
Denver, CO Centura Health 4/13/22 6,320  12,207  2.40
Colorado Springs, CO 3
Centura Health 4/13/22 13,680  25,800  0.80 to 1.70
Seattle, WA UW Medicine 4/28/22 8,350  13,256  0.05
Houston, TX CommonSpirit 4/28/22 36,250  76,781  1.70
Los Angeles, CA Cedars-Sinai Health Systems 4/29/22 35,000  34,282  0.11
Oklahoma City, OK Mercy Health 4/29/22 11,100  34,944  0.18
Raleigh, NC 2
WakeMed/None 5/31/22 27,500  85,113  0.25 to 12.30
Tampa, FL 3
BayCare Health 6/9/22 18,650  55,788  0.23
Q2 2022 subtotal 163,762  359,706 
Seattle, WA EvergreenHealth 8/1/22 4,850  10,593  0.24
Raleigh, NC WakeMed 8/9/22 3,783  11,345  0.24
Jacksonville, FL Ascension 8/9/22 18,195