Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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:	June 30, 2023
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

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

☐

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

☐

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

☒

As of August 4, 2023, the Registrant had 380,857,532 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, and 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 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. Periodic reports for periods ending following the Merger reflect financial and other information of the Company. The acquisition was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification 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 the combined company after giving effect to the Merger.

In addition, the OP has issued unsecured notes described in Note 5 to the Company's Condensed Consolidated Financial Statements included in this report. All unsecured notes are fully and unconditionally guaranteed by the Company, and the OP is 98.8% owned by the Company. Effective January 4, 2021, the Securities and Exchange Commission (the “SEC”) adopted amendments to the financial disclosure requirements which permit subsidiary issuers of obligations guaranteed by the parent to omit separate financial statements if the consolidated financial statements of the parent company have been filed, the subsidiary obligor is a consolidated subsidiary of the parent company, the guaranteed security is debt or debt-like, and the security is guaranteed fully and unconditionally by the parent. Accordingly, separate consolidated financial statements of the OP have not been presented.

Additionally, as permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, the Company has excluded the summarized financial information for the OP because the assets, liabilities, and results of operations of the OP are not materially different than the corresponding amounts in the Company's consolidated financial statements and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.

HEALTHCARE REALTY TRUST INCORPORATED

FORM 10-Q

June 30, 2023

Table of Contents


PART I - FINANCIAL INFORMATION
Item 1	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to the Condensed Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3	Quantitative and Qualitative Disclosures about Market Risk	38
Item 4	Controls and Procedures	38

PART II - OTHER INFORMATION
Item 1	Legal Proceedings	38
Item 1A	Risk Factors	38
Item 2	Unregistered Sales of Equity and Use of Proceeds	38
Item 5	Other Information	39
Item 6	Exhibits	39

SIGNATURE		40

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 JUNE 30, 2023		DECEMBER 31, 2022
Real estate properties
Land	$	1,424,453	$	1,439,798
Buildings and improvements	11,188,821		11,332,037
Lease intangibles	922,029		959,998
Personal property	12,615		11,907
Investment in financing receivable, net	121,315		120,236
Financing lease right-of-use assets	83,016		83,824
Construction in progress	53,311		35,560
Land held for development	78,411		74,265
Total real estate properties	13,883,971		14,057,625
Less accumulated depreciation and amortization	(1,983,944)		(1,645,271)
Total real estate properties, net	11,900,027		12,412,354
Cash and cash equivalents	35,904		60,961


Assets held for sale, net	151		18,893
Operating lease right-of-use assets	333,224		336,983
Investments in unconsolidated joint ventures	327,245		327,248
Goodwill	250,530		223,202
Other assets, net	547,266		469,990
Total assets	$	13,394,347	$	13,849,631

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Notes and bonds payable	$	5,340,272	$	5,351,827
Accounts payable and accrued liabilities	196,147		244,033
Liabilities of assets held for sale	222		437
Operating lease liabilities	278,479		279,895
Financing lease liabilities	73,629		72,939
Other liabilities	219,694		218,668
Total liabilities	6,108,443		6,167,799
Commitments and contingencies
Redeemable non-controlling interests	2,487		2,014
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; 380,858 and 380,590 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	3,808		3,806
Additional paid-in capital	9,595,033		9,587,637
Accumulated other comprehensive (loss) income	9,328		2,140
Cumulative net income attributable to common stockholders	1,137,171		1,307,055
Cumulative dividends	(3,565,941)		(3,329,562)
Total stockholders' equity	7,179,399		7,571,076
Non-controlling interest	104,018		108,742
Total equity	7,283,417		7,679,818
Total liabilities and equity	$	13,394,347	$	13,849,631

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, 2022, are an integral part of these financial statements.

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Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2023 and 2022

Amounts in thousands, except per share data

Unaudited


	THREE MONTHS ENDED June 30,				SIX MONTHS ENDED June 30,
	2023		2022		2023		2022
Revenues
Rental income	$	329,680	$	140,632	$	653,773	$	279,121
Interest income	4,233		1,957		8,448		3,887

Other operating	4,230		2,738		8,847		5,213
	338,143		145,327		671,068		288,221
Expenses
Property operating	125,395		57,010		247,436		114,474
General and administrative	15,464		10,540		30,399		21,576
Acquisition and pursuit costs	669		1,352		956		2,655
Merger-related costs	(15,670)		7,085		(10,815)		13,201
Depreciation and amortization	183,193		55,731		367,671		109,772


	309,051		131,718		635,647		261,678
Other income (expense)
Gain on sales of real estate properties	7,156		8,496		8,162		53,280
Interest expense	(65,334)		(15,543)		(129,092)		(29,204)
Loss on extinguishment of debt	—		—		—		(1,429)

Impairment of real estate properties and credit loss reserves	(55,215)		—		(86,637)		25
Equity loss from unconsolidated joint ventures	(17)		(307)		(797)		(652)
Interest and other income (expense), net	592		(125)		1,139		(206)
	(112,818)		(7,479)		(207,225)		21,814






Net (loss) income	$	(83,726)	$	6,130	$	(171,804)	$	48,357
Net loss attributable to non-controlling interests	967		—		1,920		—
Net (loss) income attributable to common stockholders	$	(82,759)	$	6,130	$	(169,884)	$	48,357



Basic earnings per common share	$	(0.22)	$	0.04	$	(0.45)	$	0.32


Diluted earnings per common share	$	(0.22)	$	0.04	$	(0.45)	$	0.32

Weighted average common shares outstanding - basic	378,897		149,676		378,861		149,321
Weighted average common shares outstanding - diluted	378,897		149,739		378,861		149,397

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Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Comprehensive Income

For the Three and Six Months Ended June 30, 2023 and 2022

Amounts in thousands

Unaudited


	THREE MONTHS ENDED June 30,				SIX MONTHS ENDED June 30,
	2023		2022		2023		2022
Net (loss) income	$	(83,726)	$	6,130	$	(171,804)	$	48,357
Other comprehensive income


Interest rate swaps
Reclassification adjustments for (gains) losses included in net income (interest expense)	(3,419)		823		(5,703)		1,909
Gains arising during the period on interest rate swaps	21,523		1,663		12,981		6,822

	18,104		2,486		7,278		8,731
Comprehensive (loss) income	(65,622)		8,616		(164,526)		57,088
Less: comprehensive loss attributable to non-controlling interests	745		—		1,830		—
Comprehensive (loss) income attributable to common stockholders	$	(64,877)	$	8,616	$	(162,696)	$	57,088

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Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Equity

For the Three Months Ended June 30, 2023 and 2022

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		Redeemable Non-controlling Interests
Balance at March 31, 2023	$	3,808	$	9,591,194	$	(8,554)	$	1,219,930	$	(3,447,750)	$	7,358,628	$	106,211	$	7,464,839	$	2,000
Issuance of common stock, net of issuance costs	—		27		—		—		—		27		—		27		—


Common stock redemptions	—		(112)		—		—		—		(112)		—		(112)		—
Share-based compensation	—		3,924		—		—		—		3,924		—		3,924		—

Net loss	—		—		—		(82,759)		—		(82,759)		(967)		(83,726)		—
Reclassification adjustments for gains included in net income (interest expense)	—		—		(3,377)		—		—		(3,377)		(42)		(3,419)		—
Gains arising during the period on interest rate swaps	—		—		21,259		—		—		21,259		264		21,523		—
Contributions from non-controlling interests	—		—		—		—		—		—		—		—		487
Dividends to common stockholders and distributions to non-controlling interest holders ($0.31 per share)	—		—		—		—		(118,191)		(118,191)		(1,448)		(119,639)		—
Balance at June 30, 2023	$	3,808	$	9,595,033	$	9,328	$	1,137,171	$	(3,565,941)	$	7,179,399	$	104,018	$	7,283,417	$	2,487

	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Cumulative Net Income		Cumulative Dividends		Total Stockholders’ Equity		Non-controlling Interests		Total Equity		Redeemable Non-controlling Interests
Balance at March 31, 2022	$	1,516	$	3,999,060	$	(3,736)	$	1,308,385	$	(3,092,343)	$	2,212,882	$	—	$	2,212,882	$	—
Issuance of common stock, net of issuance costs	—		110		—		—		—		110		—		110		—

Share-based compensation	—		3,356		—		—		—		3,356		—		3,356		—
Net income	—		—		—		6,130		—		6,130		—		6,130		—
Reclassification adjustments for losses included in net income (interest expense)	—		—		823		—		—		823		—		823		—
Gains arising during the period on interest rate swaps	—		—		1,663		—		—		1,663		—		1,663		—
Dividends to common stockholders ($0.31 per share)	—		—		—		—		(47,097)		(47,097)		—		(47,097)		—
Balance at June 30, 2022	$	1,516	$	4,002,526	$	(1,250)	$	1,314,515	$	(3,139,440)	$	2,177,867	$	—	$	2,177,867	$	—

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Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Equity

For the Six Months Ended June 30, 2023 and 2022

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		Redeemable Non-controlling Interests
Balance at December 31, 2022	$	3,806	$	9,587,637	$	2,140	$	1,307,055	$	(3,329,562)	$	7,571,076	$	108,742	$	7,679,818	$	2,014
Issuance of common stock, net of issuance costs	—		78		—		—		—		78		—		78		—


Common stock redemptions	(1)		(1,595)		—		—		—		(1,596)		—		(1,596)		—
Share-based compensation	3		8,913		—		—		—		8,916		—		8,916		—

Net loss	—		—		—		(169,884)		—		(169,884)		(1,920)		(171,804)		—
Reclassification adjustments for gains included in net income (interest expense)	—		—		(5,635)		—		—		(5,635)		(68)		(5,703)		—
Gains arising during the period on interest rate swaps	—		—		12,823		—		—		12,823		158		12,981		—
Contributions from non-controlling interests	—		—		—		—		—		—		—		—		473
Dividends to common stockholders and distributions to non-controlling interest holders ($0.62 per share)	—		—		—		—		(236,379)		(236,379)		(2,894)		(239,273)		—
Balance at June 30, 2023	$	3,808	$	9,595,033	$	9,328	$	1,137,171	$	(3,565,941)	$	7,179,399	$	104,018	$	7,283,417	$	2,487

	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Cumulative Net Income		Cumulative Dividends		Total Stockholders’ Equity		Non-controlling Interests		Total Equity		Redeemable Non-controlling Interests
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	7		22,764		—		—		—		22,771		—		22,771		—
Common stock redemptions	—		(206)		—		—		—		(206)		—		(206)		—
Share-based compensation	4		7,051		—		—		—		7,055		—		7,055		—
Net income	—		—		—		48,357		—		48,357		—		48,357		—
Reclassification adjustments for losses included in net income (interest expense)	—		—		1,909		—		—		1,909		—		1,909		—
Gains arising during the period on interest rate swaps	—		—		6,822		—		—		6,822		—		6,822		—
Dividends to common stockholders ($0.62 per share)	—		—		—		—		(93,957)		(93,957)		—		(93,957)		—
Balance at June 30, 2022	$	1,516	$	4,002,526	$	(1,250)	$	1,314,515	$	(3,139,440)	$	2,177,867	$	—	$	2,177,867	$	—

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Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2023 and 2022

Amounts in thousands

Unaudited


OPERATING ACTIVITIES
	SIX MONTHS ENDED June 30,
	2023		2022
Net (loss) income	$	(171,804)	$	48,357
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	367,671		109,772
Other amortization	23,405		2,680
Share-based compensation	8,916		7,055
Amortization of straight-line rent receivable (lessor)	(19,313)		(3,292)
Amortization of straight-line rent on operating leases (lessee)	3,062		756
Gain on sales of real estate properties	(8,162)		(53,280)
Loss on extinguishment of debt	—		1,429
Impairment of real estate properties and credit loss reserves	86,637		(25)
Equity loss from unconsolidated joint ventures	797		652
Distributions from unconsolidated joint ventures	3,031		108

Non-cash interest from financing and notes receivable	(488)		(388)
Changes in operating assets and liabilities:
Other assets, including right-of-use-assets	(17,502)		540
Accounts payable and accrued liabilities	(38,601)		(3,166)
Other liabilities	16,673		2,923
Net cash provided by operating activities	254,322		114,121

INVESTING ACTIVITIES
Acquisitions of real estate	(39,301)		(287,004)
Development of real estate	(17,594)		(7,475)
Additional long-lived assets	(94,013)		(45,631)
Funding of mortgages and notes receivable	(11,503)		—
Investments in unconsolidated joint ventures	(3,824)		(49,599)
Investment in financing receivable	(780)		498
Proceeds from sales of real estate properties and additional long-lived assets	160,870		108,044



Net cash used in investing activities	(6,145)		(281,167)

FINANCING ACTIVITIES
Net (repayments) borrowings on unsecured credit facility	(31,000)		280,500



Repayments of notes and bonds payable	(1,340)		(18,224)

Redemption of notes and bonds payable	—		(2,184)
Dividends paid	(236,105)		(93,774)


Net proceeds from issuance of common stock	77		22,768
Common stock redemptions	(1,842)		(852)
Distributions to non-controlling interest holders	(2,546)		—


Debt issuance and assumption costs	(438)		—
Payments made on finance leases	(40)		(51)
Net cash (used in) provided by financing activities	(273,234)		188,183

(Decrease) increase in cash and cash equivalents	(25,057)		21,137
Cash and cash equivalents at beginning of period	60,961		13,175
Cash and cash equivalents at end of period	$	35,904	$	34,312

Supplemental Cash Flow Information
Interest paid	$	106,985	$	26,641
Mortgage note receivable taken in connection with sale of real estate	$	45,000	$	—
Invoices accrued for construction, tenant improvements and other capitalized costs	$	30,956	$	18,874
Capitalized interest	$	1,282	$	145

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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 June 30, 2023, the Company had gross investments of approximately $13.9 billion in 680 wholly-owned 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 680 real estate properties are located in 35 states and total approximately 39.8 million square feet. The Company provided leasing and property management services to approximately 39.3 million square feet nationwide.

In addition, as of June 30, 2023, the Company had a weighted average ownership interest of approximately 44% in 34 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 as the combined company 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 included 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, 2022. 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, 2022. 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, 2023 for many reasons including, but not limited to, 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 the accounts of the Company, its wholly owned subsidiaries, and joint ventures and partnerships where the Company controls the operating activities. 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 (“ASC”) Topic 810, Consolidation 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, with any minority interests reflected as non-controlling interests or redeemable non-controlling interests in the accompanying Condensed Consolidated Financial Statements.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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, the disposition of all or a portion of an interest held by the primary beneficiary, or changes in facts and circumstances that impact the power to direct activities of the VIE that most significantly impacts economic performance. The Company performs this analysis on an ongoing basis.

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. For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements.

Healthcare Realty Holdings, L.P., a Delaware limited partnership (the "OP"), is 98.8% owned by the Company. 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 June 30, 2023, there were approximately 4.7 million OP Units, or 1.2% 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.

As of June 30, 2023, the Company had four consolidated VIEs in addition to the OP where it is the primary beneficiary of the VIE based on the combination of operational control and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures. Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs, excluding the OP, in the aggregate:


(dollars in thousands)	JUNE 30, 2023
Assets:
Net real estate investments	$	61,980
Cash and cash equivalents	2,107
Receivables and other assets	2,015
Total assets	$	66,102
Liabilities:
Accrued expenses and other liabilities	$	14,058
Total equity	52,044
Total liabilities and equity	$	66,102

As of June 30, 2023, the Company had three unconsolidated VIEs consisting of two notes receivables and one joint venture. The Company does not have the power or economic interests to direct the activities of the VIEs on a stand-alone basis, and therefore it was determined that the Company was not the primary beneficiary. As a result, the Company accounts for the two notes receivables as amortized cost and a joint venture arrangement under the equity method. See below for additional information regarding the Company's unconsolidated VIEs.


(dollars in thousands) ORIGINATION DATE	LOCATION	SOURCE	CARRYING AMOUNT		MAXIMUM EXPOSURE TO LOSS
2021	Houston, TX 1	Note receivable	$	30,445	$	31,150
2021	Charlotte, NC 1	Note receivable	5,691		6,000
2022	Texas 2	Joint venture	64,758		64,758

1Assumed mortgage note receivable in connection with the Merger.

2Includes investments in seven properties.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

As of June 30, 2023, 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.

Redeemable Non-Controlling Interests

The Company accounts for redeemable equity securities in accordance with ASC Topic 480: Accounting for Redeemable Equity Instruments, which requires that equity securities redeemable at the option of the holder, not solely within our control, be classified outside permanent stockholders’ equity. The Company classifies redeemable equity securities as redeemable non-controlling interests in the accompanying Condensed Consolidated Balance Sheets. Accordingly, the Company records the carrying amount at the greater of the initial carrying amount (increased or decreased for the non-controlling interest’s share of net income or loss and distributions) or the redemption value. We measure the redemption value and record an adjustment to the carrying value of the equity securities as a component of redeemable non-controlling interest. As of June 30, 2023, the Company had redeemable non-controlling interests of $2.5 million.

Asset Impairment

The Company assesses the potential for impairment of identifiable, definite-lived, intangible assets and long-lived assets, including real estate properties, whenever the occurrence of an event or a change in circumstances indicates that the carrying value might not be fully recoverable. Indicators of impairment may include significant underperformance of an asset relative to historical or expected operating results; significant changes in the Company’s use of assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in a property; or significant negative economic trends or negative industry trends for the Company or its tenants. During the three and six months ended June 30, 2023, the Company recognized real estate impairments totaling $55.2 million and $81.4 million, respectively, as a result of completed or planned disposition activity.

Investments in Leases - Financing Receivables, Net

In accordance with ASC Topic 842: Leases, 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 Topic 310: Receivables. See below for additional information regarding the Company's financing receivables.


(dollars in thousands) ORIGINATION DATE	LOCATION	INTEREST RATE	CARRYING VALUE as of JUNE 30, 2023
May 2021	Poway, CA	5.73%	$	113,967
November 2021	Columbus, OH	6.48%	7,348
			$	121,315

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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 June 30, 2023, real estate notes receivable, net, which are included in Other assets on the Company's Condensed Consolidated Balance Sheets, totaled $151.5 million.


(dollars in thousands)	ORIGINATION	MATURITY	STATED INTEREST RATE		MAXIMUM LOAN COMMITMENT		OUTSTANDING as of JUNE 30, 2023		ALLOWANCE FOR CREDIT LOSSES		FAIR VALUE DISCOUNT AND FEES		CARRYING VALUE as of JUNE 30, 2023
Mezzanine loans
Texas	6/24/2021	6/24/2024	8.00	%	$	54,119	$	54,119	$	(5,196)	$	(3,067)	$	45,856

Mortgage loans
Texas	6/30/2021	12/31/2023	7.00	%	31,150		31,150		—		(705)		30,445
North Carolina	12/22/2021	12/22/2024	8.00	%	6,000		6,000		—		(309)		5,691
Florida	5/17/2022	2/27/2026	6.00	%	65,000		24,556		—		(55)		24,501
California	3/30/2023	3/29/2026	6.00	%	45,000		45,000		—		—		45,000
					147,150		106,706		—		(1,069)		105,637

					$	201,269	$	160,825	$	(5,196)	$	(4,136)	$	151,493

Allowance for Credit Losses

Pursuant to ASC Topic 326, Financial Instruments - Credit Losses, the Company adopted a policy to evaluate current expected credit losses at the inception of loans qualifying for treatment under ASC Topic 326. The Company utilizes a probability of default method approach for estimating current expected credit losses and evaluates the liquidity and creditworthiness of its borrowers on a quarterly basis to determine whether any updates to the future expected losses recognized upon inception are necessary. The Company’s evaluation considers industry and economic conditions, credit enhancements, liquidity, and other factors.

In its assessment of current expected credit losses for real estate notes receivable, the Company utilizes past payment history of its borrowers, current economic conditions, and forecasted economic conditions through the maturity date of each note to estimate a probability of default and a resulting loss for each real estate note receivable. During the six months ended June 30, 2023, the Company determined that the risk of credit loss on its mezzanine loans was no longer remote. Consequently, the Company recorded a credit loss reserve of $5.2 million for the six months ended June 30, 2023.

The following table summarizes the Company's allowance for credit losses on real estate notes receivable:


Dollars in thousands	June 30, 2023		December 31, 2022

Allowance for credit losses, beginning of period	$	—	$	—
Credit loss reserves	5,196		—
Allowance for credit losses, end of period	$	5,196	$	—

Interest Income

Income from Lease Financing Receivables

The Company recognized the related income from two financing receivables totaling $2.1 million and $4.2 million, respectively, for the three and six months ended June 30, 2023, and $2.0 million and $3.9 million, respectively for the three and six months ended June 30, 2022, based on an imputed interest rate over the terms of the applicable lease. As a result, the interest recognized from the financing receivable in any particular period will not equal the cash payments from the lease agreement in that period.

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.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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 six months ended June 30, 2023, the Company recognized interest income of $2.2 million and $4.3 million, respectively, related to real estate notes receivable. The Company recognizes interest income on an accrual basis unless the Company has determined that collectability of contractual amounts is not reasonably assured, at which point the note is placed on non-accrual status and interest income is recognized on a cash basis. As of June 30, 2023, the Company placed two of its real estate notes receivable with principal balances of $48.9 million on non-accrual status and accordingly did not recognize any interest income for the three and six month periods ended June 30, 2023.

Revenue from Contracts with Customers (ASC 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.


	THREE MONTHS ENDED June 30,				SIX MONTHS ENDED June 30,
in thousands	2023		2022		2023		2022
Type of Revenue
Parking income	$	2,370	$	1,919	$	4,761	$	3,672

Management fee income 1	1,597		783		3,570		1,438
Miscellaneous	263		36		516		103
	$	4,230	$	2,738	$	8,847	$	5,213

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.

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”), 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.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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, and Legacy HR became a wholly-owned subsidiary of the OP. 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 under the ticker symbol “HR”.

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 following the Merger, (ii) the composition of senior management of the combined company following the Merger, 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 Company.

The acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires, among other things, the assets acquired and the liabilities assumed and non-controlling interests, if any, to be recognized at their acquisition date fair value.

The implied consideration transferred on the Closing Date is as follows:


Dollars in thousands, except for per share data
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) The number of shares of Legacy 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 Legacy HTA fractional shares that were cancelled in lieu of cash and 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 were converted to Legacy HR Common Stock, at an exchange ratio of 1.00 share of Legacy HR Common Stock per share of Legacy 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.

(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.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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	PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE		CUMULATIVE MEASUREMENT PERIOD ADJUSTMENTS		PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE (as adjusted)
ASSETS
Real estate investments
Land	$	985,926	$	18,359	$	1,004,285
Buildings and improvements	6,960,418		(119,135)		6,841,283
Lease intangible assets(a)	831,920		1,839		833,759
Financing lease right-of-use assets	9,874		3,146		13,020
Construction in progress	10,071		(6,744)		3,327
Land held for development	46,538		—		46,538
Total real estate investments	$	8,844,747	$	(102,535)	$	8,742,212
Assets held for sale, net	707,442		(7,946)		699,496
Investments in unconsolidated joint ventures	67,892		—		67,892
Cash and cash equivalents	26,034		11,403		37,437
Restricted cash	1,123,647		(1,247)		1,122,400
Operating lease right-of-use assets	198,261		16,370		214,631
Other assets, net (b) (c)	209,163		(3,840)		205,323
Total assets acquired	$	11,177,186	$	(87,795)	$	11,089,391

LIABILITIES
Notes and bonds payable	$	3,991,300	$	—	$	3,991,300
Accounts payable and accrued liabilities	1,227,570		17,374		1,244,944
Liabilities of assets held for sale	28,677		(3,939)		24,738
Operating lease liabilities	173,948		10,173		184,121
Financing lease liabilities	10,720		(855)		9,865
Other liabilities	203,210		(8,909)		194,301
Total liabilities assumed	$	5,635,425	$	13,844	$	5,649,269
Net identifiable assets acquired	$	5,541,761	$	(101,639)	$	5,440,122
Non-controlling interest	$	110,702	$	—	$	110,702
Goodwill	$	145,404	$	101,639	$	247,043
(a) The weighted average amortization period for the acquired lease intangible assets is approximately 6 years.
(b) Includes $15.9 million of contractual accounts receivable, which approximates fair value.
(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.

The cumulative measurement period adjustments recorded through June 30, 2023 primarily resulted from updated valuations related to the Company’s real estate assets and liabilities and additional information obtained by the Company related to the properties acquired in the Merger and their respective tenants, and resulted in an increase to goodwill of $101.6 million.

As of June 30, 2023, 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 to 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.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

A preliminary estimate of approximately $247.0 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 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

The Company incurred Merger-related costs of $(15.7) million and $(10.8) million, respectively, during the three and six months ended June 30, 2023, which were included within Merger-related costs in results of operations. The Merger-related costs primarily consist of legal, consulting, severance, and banking services and included a refund of $17.8 million for transfer taxes paid during the year ended December 31, 2022.

Subsequent Activity

As of the date of these financial statements, the purchase price allocation of fair value was finalized with no additional adjustments. The Company determined the final fair value of net assets acquired based on information available during the measurement period.

Note 3. Real Estate Investments

2023 Acquisition Activity

The following table details the Company's real estate acquisition activity for the six months ended June 30, 2023:


Dollars in thousands	DATE ACQUIRED	PURCHASE PRICE		CASH CONSIDERATION 1		REAL ESTATE		OTHER 2		SQUARE FOOTAGE
Tampa, FL	3/10/23	$	31,500	$	30,499	$	30,596	$	(97)	115,867

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.

In the second quarter of 2023, the Company entered into a joint venture agreement for the development of a medical office building in Scottsdale, Arizona. The Company holds a 90% interest in the joint venture and determined the arrangement meets the criteria to be consolidated. The joint venture acquired an $8.8 million land parcel to be developed with the Company contributing cash of $8.3 million.

Subsequent to June 30, 2023, the Company acquired the following property:


Dollars in thousands	DATE ACQUIRED	PURCHASE PRICE		SQUARE FOOTAGE
Colorado Springs, CO	7/28/23	$	11,450	42,770

Unconsolidated Joint Ventures

The Company's investment in and loss recognized for the three and six months ended June 30, 2023 and 2022 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below:

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.


	THREE MONTHS ENDED June 30,				SIX MONTHS ENDED June 30,
Dollars in thousands	2023		2022		2023		2022

Investments in unconsolidated joint ventures, beginning of period	$	327,746	$	211,195	$	327,248	$	161,942
New investment during the period 1	—		—		3,824		49,599
Equity loss recognized during the period	(17)		(307)		(797)		(652)

Owner distributions	(484)		(107)		(3,030)		(108)
Investments in unconsolidated joint ventures, end of period	$	327,245	$	210,781	$	327,245	$	210,781

1In 2023, this was an additional investment in an existing joint venture in which the Company owns a 40% ownership interest. The investment consisted of a sale of a property in Dallas, Texas to the joint venture. See 2023 Real Estate Asset Dispositions below for additional information.

2023 Real Estate Asset Dispositions

The following table details the Company's dispositions for the six months ended June 30, 2023:


Dollars in thousands	DATE DISPOSED	SALE PRICE		CLOSING ADJUSTMENTS		COMPANY-FINANCED MORTGAGE NOTES		NET PROCEEDS		NET REAL ESTATE INVESTMENT		OTHER (INCLUDING RECEIVABLES) 1		GAIN/(IMPAIRMENT)		SQUARE FOOTAGE
Tampa, FL & Miami, FL2	1/12/23	$	93,250	$	(5,875)	$	—	$	87,375	$	87,302	$	(888)	$	961	224,037
Dallas, TX 3	1/30/23	19,210		(141)		—		19,069		18,986		43		40		36,691
St. Louis, MO	2/10/23	350		(18)		—		332		398		—		(66)		6,500
Los Angeles, CA	3/23/23	21,000		(526)		—		20,474		20,610		52		(188)		37,165
Los Angeles, CA 4	3/30/23	75,000		(8,079)		(45,000)		21,921		88,624		(803)		(20,900)		147,078
Los Angeles, CA 5	5/12/23	3,300		(334)		—		2,966		3,268		—		(302)		—
Albany, NY	6/30/23	10,000		(1,229)		—		8,771		2,613		(1,040)		7,198		40,870

Total dispositions		$	222,110	$	(16,202)	$	(45,000)	$	160,908	$	221,801	$	(2,636)	$	(13,257)	492,341

1Includes straight-line rent receivables, leasing commissions and lease inducements.

2Includes two properties, sold in two separate transactions to the same buyer on the same date.

3The Company sold this property to a joint venture in which it retained a 40% interest. Sales price and square footage reflect the total sales price paid by the joint venture and total square footage of the property.

4The Company entered into a mortgage note agreement with the buyer for $45 million.

5The Company sold a land parcel totaling 0.34 acres.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Subsequent to June 30, 2023, the Company disposed of the following property:


Dollars in thousands	DATE DISPOSED	SALES PRICE		SQUARE FOOTAGE
Houston, TX	8/2/23	$	8,320	57,170

Assets Held for Sale

The Company had three properties classified as assets held for sale as of June 30, 2023. The net real estate assets held for sale includes $3.6 million of impairment charges for the six months ended June 30, 2023. The Company had one property classified as assets held for sale as of December 31, 2022, which was sold in the first quarter of 2023. The table below reflects the assets and liabilities classified as held for sale as of June 30, 2023 and December 31, 2022:


Dollars in thousands	June 30, 2023		December 31, 2022
Balance Sheet data:
Land	$	205	$	1,700
Building and improvements	1,736		15,164
Lease intangibles	2,242		1,986




	4,183		18,850
Accumulated depreciation	(4,183)		—
Real estate assets held for sale, net	—		18,850

Other assets, net	151		43
Assets held for sale, net	$	151	$	18,893

Accounts payable and accrued liabilities	$	222	$	282


Other liabilities	—		155
Liabilities of assets held for sale	$	222	$	437

Note 4. Leases

Lessor Accounting

The Company’s properties generally were leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2052. Some leases provide tenants with fixed rent renewal terms while others have 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 six months ended June 30, 2023 was $329.7 million and $653.8 million, respectively. Lease income for the Company's operating leases recognized for the three and six months ended June 30, 2022 was $140.6 million and $279.1 million, respectively.

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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 June 30, 2023 were as follows:


Dollars in thousands	OPERATING
2023	$	467,393
2024	861,323
2025	751,369
2026	648,352
2027	536,874
2028 and thereafter	1,950,019
	$	5,215,330

Lessee Accounting

As of June 30, 2023, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2023, the Company had 241 properties totaling 17.5 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 June 30, 2023. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.3 million and $0.1 million of the Company’s rental expense for the three months ended June 30, 2023 and 2022, respectively, and $0.7 million and $0.3 million for the six months ended June 30, 2023 and 2022, respectively.

The Company’s future lease payments (primarily for its 166 non-prepaid ground leases) as of June 30, 2023 were as follows:


Dollars in thousands	OPERATING		FINANCING
2023	$	7,315	$	992
2024	15,011		2,182
2025	14,597		2,218
2026	14,631		2,255
2027	14,701		2,294
2028 and thereafter	929,853		396,398
Total undiscounted lease payments	996,108		406,339
Discount	(717,629)		(332,710)
Lease liabilities	$	278,479	$	73,629

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 six months ended June 30, 2023 and 2022:


	THREE MONTHS ENDED June 30,						SIX MONTHS ENDED June 30,
Dollars in thousands	2023			2022			2023		2022
Operating lease cost
Operating lease expense	$	5,329		$	1,194		$	10,436	$	2,409
Variable lease expense	2,235			1,038			4,371		2,062

Finance lease cost
Amortization of right-of-use assets	387			331			774		503
Interest on lease liabilities	923			765			1,841		1,052
Total lease expense	$	8,874		$	3,328		$	17,422	$	6,026

Other information
Operating cash flows outflows related to operating leases	$	5,230		$	1,799		$	11,190	$	4,596
Operating cash flows outflows related to financing leases	$	541		$	509		$	1,094	$	767
Financing cash flows outflows related to financing leases	$	6		$	—		$	17	$	51
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	—		$	—	$	40,589


Weighted-average years remaining lease term (excluding renewal options) - operating leases	47.3			47.4
Weighted-average years remaining lease term (excluding renewal options) - finance leases	58.4			61.7
Weighted-average discount rate - operating leases	5.8		%	5.6		%
Weighted-average discount rate - finance leases	5.0		%	5.0		%

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Note 5. Notes and Bonds Payable

The table below details the Company’s notes and bonds payable as of June 30, 2023 and December 31, 2022.


	MATURITY DATES	BALANCE 1 AS OF				EFFECTIVE INTEREST RATE as of 6/30/2023
Dollars in thousands		6/30/2023		12/31/2022
$1.5 billion Unsecured Credit Facility	10/25	$	354,000	$	385,000	6.05	%


$350 million Unsecured Term Loan 2	7/24	349,499		349,114		6.21	%
$200 million Unsecured Term Loan	5/24	199,786		199,670		6.21	%
$300 million Unsecured Term Loan	10/25	299,947		299,936		6.21	%
$150 million Unsecured Term Loan	6/26	149,569		149,495		6.21	%
$200 million Unsecured Term Loan	7/27	199,432		199,362		6.21	%
$300 million Unsecured Term Loan	1/28	298,079		297,869		6.21	%
Senior Notes due 2025	5/25	249,298		249,115		4.12	%
Senior Notes due 2026	8/26	575,256		571,587		4.94	%
Senior Notes due 2027	7/27	481,615		479,553		4.76	%
Senior Notes due 2028	1/28	297,138		296,852		3.85	%
Senior Notes due 2030	2/30	570,356		565,402		5.30	%
Senior Notes due 2030	3/30	296,579		296,385		2.72	%
Senior Notes due 2031	3/31	295,795		295,547		2.25	%
Senior Notes due 2031	3/31	640,999		632,693		5.13	%
Mortgage notes payable	8/23-12/26	82,924		84,247		3.57%-4.84%
		$	5,340,272	$	5,351,827

1Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable.

2On April 26, 2023, the Company exercised its option to extend the maturity date for one year for a fee of approximately $0.4 million.

Subsequent Changes in Debt Structure

On August 1, 2023, the Company repaid in full at maturity a mortgage note payable bearing interest at a rate of 3.31% per annum with an outstanding principal of $9.8 million. The mortgage note encumbered a 66,984 square foot property in Georgia.

Note 6. 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.

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.

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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 June 30, 2023, the Company had 14 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:


EXPIRATION DATE	AMOUNT		WEIGHTED AVERAGE RATE
January 15, 2024	$	200,000	1.21	%
May 1, 2026	100,000		2.15	%
June 1, 2026	150,000		3.83	%
December 1, 2026	150,000		3.84	%
June 1, 2027	150,000		4.13	%
December 1, 2027	250,000		3.79	%
	$	1,000,000	3.17	%

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 June 30, 2023.


	BALANCE AT JUNE 30, 2023
In thousands	BALANCE SHEET LOCATION	FAIR VALUE
Derivatives designated as hedging instruments
Interest rate swaps	Other liabilities	$	(1,248)
Interest rate swaps	Other assets	$	16,046
Total derivatives designated as hedging instruments		$	14,798

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 six months ended June 30, 2023 and 2022 related to the Company's outstanding interest rate swaps.


	(GAIN)/LOSS RECOGNIZED IN AOCI ON DERIVATIVE three months ended June 30,					(GAIN)/LOSS RECLASSIFIED FROM AOCI INTO INCOME three months ended June 30,
In thousands	2023		2022			2023		2022
Interest rate swaps	$	(21,523)	$	(1,663)	Interest expense	$	(3,568)	$	674
Settled treasury hedges	—		—		Interest expense	107		107
Settled interest rate swaps	—		—		Interest expense	42		42
	$	(21,523)	$	(1,663)	Total interest expense	$	(3,419)	$	823


	(GAIN)/LOSS RECOGNIZED IN AOCI ON DERIVATIVE six months ended June 30,					(GAIN)/LOSS RECLASSIFIED FROM AOCI INTO INCOME six months ended June 30,
In thousands	2023		2022			2023		2022
Interest rate swaps	$	(12,981)	$	(6,822)	Interest expense	$	(6,000)	$	1,612
Settled treasury hedges	—		—		Interest expense	213		213
Settled interest rate swaps	—		—		Interest expense	84		84
	$	(12,981)	$	(6,822)	Total interest expense	$	(5,703)	$	1,909

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The Company estimates that an additional $14.4 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 an additional $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 June 30, 2023, 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 $15.4 million. As of June 30, 2023, the Company had not posted any collateral related to these agreements and was not in breach of any agreement.

Note 7. 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 first six months of 2023, the Company incurred $49.0 million toward the development and redevelopment of properties.

Note 8. Stockholders' Equity

Common Stock

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the six months ended June 30, 2023 and the twelve months ended December 31, 2022:


	SIX MONTHS ENDED JUNE 30, 2023	TWELVE MONTHS ENDED DECEMBER 31, 2022
Balance, beginning of period	380,589,894	150,457,433
Issuance of common stock	4,817	229,618,304
Non-vested share-based awards, net of withheld shares	262,821	514,157
Balance, end of period	380,857,532	380,589,894

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 June 30, 2023, $750.0 million remained available for issuance under our current ATM offering program.

During the six months ended June 30, 2023, the Company did not sell any shares or enter into any forward sale agreements to sell shares of common stock through its ATM offering program.

Common Stock Dividends

During the six months ended June 30, 2023, the Company declared and paid common stock dividends totaling $0.62 per share. On August 1, 2023, the Company declared a quarterly common stock dividend in the amount of $0.31 per share payable on August 30, 2023 to stockholders of record on August 15, 2023.

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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.

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022.


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
Dollars in thousands, except per share data	2023		2022		2023		2022
Weighted average common shares outstanding
Weighted average common shares outstanding	380,829,011		151,620,897		380,812,981		151,230,064
Non-vested shares	(1,932,334)		(1,945,042)		(1,952,350)		(1,908,652)
Weighted average common shares outstanding - basic	378,896,677		149,675,855		378,860,631		149,321,412

Weighted average common shares outstanding - basic	378,896,677		149,675,855		378,860,631		149,321,412


Dilutive effect of employee stock purchase plan	—		62,694		—		75,394
Weighted average common shares outstanding - diluted	378,896,677		149,738,549		378,860,631		149,396,806

Net (loss) income attributable to common stockholders	$	(82,759)	$	6,130	$	(169,884)	$	48,357
Dividends paid on nonvested share-based awards	(588)		(601)		(1,193)		(1,207)
Net (loss) income applicable to common stockholders - basic	$	(83,347)	$	5,529	$	(171,077)	$	47,150





Basic earnings per common share - net income	$	(0.22)	$	0.04	$	(0.45)	$	0.32


Diluted earnings per common share - net income	$	(0.22)	$	0.04	$	(0.45)	$	0.32

The effect of OP units totaling 4,042,993 shares, non-vested stock awards totaling 442,263 shares, and options under the Company's Employee Stock Purchase Plan (the "ESPP") to purchase the Company's common stock totaling 27,484 shares for the three months ended June 30, 2023 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

Equity Awards

During the six months ended June 30, 2023, the Company made the following equity awards:

•During the first quarter of 2023, 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 $5.4 million, which consisted of an aggregate of 270,494 non-vested shares with vesting periods ranging from three to eight years.

•During the second quarter of 2023, the Company granted to its 12 independent directors an aggregate of 42,768 shares of non-vested stock awards with a grant date fair value of $0.7 million, and an aggregate of 57,868 LTIP Series D units with a grant date fair value of $1.1 million. The Company also granted a non-vested stock award to a new employee, which consisted of 508 non-vested shares.

A summary of the activity under the Company's share-based incentive plans for the three and six months ended June 30, 2023 and 2022 is included in the table below.


	THREE MONTHS ENDED JUNE 30,		SIX MONTHS ENDED JUNE 30,
	2023	2022	2023	2022
Share-based awards, beginning of period	1,955,445	1,951,551	1,795,128	1,562,028
Granted	43,276	26,840	325,816	442,024
Vested	(62,640)	(36,682)	(164,360)	(61,047)
Forfeited	(3,860)	—	(24,363)	(1,296)
Share-based awards, end of period	1,932,221	1,941,709	1,932,221	1,941,709

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

During the six months ended June 30, 2023 and 2022, the Company withheld 38,632 and 6,727 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 4, 2023, the Company granted RSUs to members of senior management, with a grant date fair value of $3.7 million, which consisted of an aggregate 165,174 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 $24.23 for the absolute TSR component and $27.84 for the relative TSR component for the January 2023 grant using the following assumptions:


	THREE MONTHS ENDED MARCH 31,
Volatility		34.0	%
Dividend assumption		Accrued
Expected term		3 years
Risk-free rate		4.42	%
Stock price (per share)		$20.21

The remaining 57% of the RSUs vest based upon certain operating performance conditions. With respect to the operating performance conditions of the January 4, 2023 grant, the grant date fair value was $20.21 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January RSUs was $22.55 per share.

The following is a summary of the RSU activity during the three and six months ended June 30, 2023:


	THREE MONTHS ENDED JUNE 30,			SIX MONTHS ENDED JUNE 30,
	Restricted Stock Units	Weighted Average Grant Date Fair Value		Restricted Stock Units	Weighted Average Grant Date Fair Value
Non-vested, beginning of period	363,250	$	28.57	294,932	33.04
Granted	—	—		165,174	$	22.55
Vested/Forfeited	—	—		(17,606)	33.04
Probability adjustment of 2022 RSUs	—	—		(79,250)	31.68
Non-vested, end of period	363,250	$	28.57	363,250	28.57

LTIP Series C Units

In January 2023, the Company modified its incentive compensation structure to award LTIP Series C units ("LTIP-C units) in the OP to named executive officers in lieu of RSUs. The LTIP-C units are granted with three-year forward-looking performance targets, with a grant date fair value of $7.1 million, which consisted of an aggregate 448,249 LTIP-C units with a five-year vesting period.

Approximately 43% of the LTIP-C units vest based on two market performance conditions. Relative and absolute 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 $12.24 for the absolute TSR component and $13.98 for the relative TSR component for the January 2023 grant using the following assumption:

Table of Contents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.


	THREE MONTHS ENDED MARCH 31,
Volatility		34.0	%
Dividend assumption		Accrued
Expected term		3 years
Risk-free rate		4.42	%
Stock price (per share)		$20.21

The remaining 57% of the LTIP-C units vest based upon certain operating performance conditions. With respect to the operating performance conditions of the January 4, 2023 grant, the grant date fair value was $20.21 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January LTIP-C units was $15.85 per share.

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 six months ended June 30, 2023 and 2022 is included in the table below.


	THREE MONTHS ENDED JUNE 30,		SIX MONTHS ENDED JUNE 30,
	2023	2022	2023	2022
Outstanding and exercisable, beginning of period	183,426	427,802	340,976	348,514
Granted	—	—	—	255,960
Exercised	(1,687)	(1,965)	(4,817)	(12,518)
Forfeited	(2,370)	(20,303)	(23,791)	(45,789)
Expired	—	—	(132,999)	(140,633)
Outstanding and exercisable, end of period	179,369	405,534	179,369	405,534

The following table represents expected amortization of the Company's non-vested shares issued as of June 30, 2023:


Dollars in millions	FUTURE AMORTIZATION of non-vested shares
2023	$	7.7
2024	13.3
2025	10.8
2026	8.0
2027	2.4
2028 and thereafter	0.5
Total	$	42.7

Note 9. 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, level 2 inputs, that consider forward yield curves and discount rates.

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 June 30, 2023 and December 31, 2022.


	June 30, 2023				December 31, 2022
Dollars in millions	CARRYING VALUE		FAIR VALUE		CARRYING VALUE		FAIR VALUE
Notes and bonds payable 1	$	5,340.3	$	5,107.5	$	5,351.8	$	5,149.6
Real estate notes receivable 1	$	151.5	$	149.0	$	99.6	$	99.6

1Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.

Table of Contents

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 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. These forward-looking statements are based on the Company's current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties. Such risks and uncertainties include, among other things, the following: failure to realize the expected benefits of the Merger; the risk that the Company’s and 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; pandemics or other health crises, such as COVID-19; increases in interest rates; the availability and cost of capital at expected rates; competition for quality assets; negative developments in the operating results or financial condition of the Company's tenants, including, but not limited to, their ability to pay rent; the Company's ability to reposition or sell facilities with profitable results; the Company's ability to release space at similar rates as vacancies occur; the Company's ability to renew expiring leases; government regulations affecting tenants' Medicare and Medicaid reimbursement rates and operational requirements; unanticipated difficulties and/or expenditures relating to future acquisitions and developments; changes in rules or practices governing the Company's financial reporting; the Company may be required under purchase options to sell properties and may not be able to reinvest the proceeds from such sales at rates of return equal to the return received on the properties sold; uninsured or underinsured losses related to casualty or liability; the incurrence of impairment charges on its real estate properties or other assets; other legal and operational matters; 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 the Company's Annual Report on Form 10-K for the year ended December 31, 2022. 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 filings with the SEC, including this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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 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 Note 2 to the Condensed Consolidated Financial Statements.

Because Legacy HR was the accounting acquirer under GAAP in the transaction, its historical financial statements became the historical financial statements of the Company. For additional information, please refer to the Explanatory Note in this report.

Table of Contents

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. As of June 30, 2023, the Company had $1.1 billion available to be drawn on its Unsecured Credit Facility and $35.9 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 Unsecured 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.

Investing Activities

Cash flows used in investing activities for the six months ended June 30, 2023 were approximately $6.1 million. Below is a summary of significant investing activities.

Acquisitions

The following table details the Company's sole acquisition for the six months ended June 30, 2023:

Dollars in thousands

ASSOCIATED HEALTH SYSTEM/TENANCY 1

DATE ACQUIRED

PURCHASE PRICE

SQUARE FOOTAGE

MILES TO CAMPUS

Tampa, FL

BayCare Health

3/10/23

31,500

115,867

0.06

1Includes buildings located on-campus, adjacent and off-campus that are anchored by healthcare systems or located within two miles of a hospital campus.

Subsequent to June 30, 2023, the Company acquired the following property:

Dollars in thousands

ASSOCIATED HEALTH SYSTEM/TENANCY 1

DATE ACQUIRED

PURCHASE PRICE

SQUARE FOOTAGE

MILES TO CAMPUS

Colorado Springs, CO

UC Health

7/28/23

11,450

42,770

1.30

Dispositions

The Company disposed of seven properties during the six months ended June 30, 2023 for a total sales price of $222.1 million, including cash proceeds of $160.9 million. The following table details these dispositions for the six months ended June 30, 2023:


Dollars in thousands	Date Disposed	Sales Price		Square Footage
Tampa, FL & Miami, FL 1	1/12/23	$	93,250	224,037
Dallas, TX 2	1/30/23	19,210		36,691
St. Louis, MO	2/10/23	350		6,500
Los Angeles, CA	3/23/23	21,000		37,165
Los Angeles, CA3	3/30/23	75,000		147,078
Los Angeles, CA4	5/12/23	3,300		—
Albany, NY	6/30/23	10,000		40,870

Total dispositions		$	222,110	492,341

1Includes two properties, sold in two separate transactions to the same buyer on the same date.

2The Company sold this property to a joint venture in which it retained a 40% interest. Sales price and square footage reflect the total sales price paid by the joint venture and total square footage of the property.

3The Company entered into a mortgage note agreement with the buyer for $45 million.

4The Company sold a land parcel totaling 0.34 acres.

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Subsequent to June 30, 2023, the Company disposed of the following property:


Dollars in thousands	DATE DISPOSED	SALES PRICE		SQUARE FOOTAGE
Houston, TX	8/2/23	$	8,320	57,170

Capital Expenditures

During the six months ended June 30, 2023, the Company incurred capital expenditures totaling $113.2 million for the following:

•$49.0 million toward the development and redevelopment of properties;

•$21.3 million toward first generation tenant improvements and planned capital expenditures for acquisitions;

•$25.6 million toward second generation tenant improvements; and

•$17.3 million toward capital expenditures.

Financing Activities

Cash flows used in financing activities for the six months ended June 30, 2023 were approximately $273.2 million. See Notes 6 and 9 to the Condensed Consolidated Financial Statements accompanying this report for more information about capital markets and financing activities.

Common Stock Issuances

At-The-Market Equity Offering Program

The Company has equity distribution agreements with various sales agents with respect to our ATM offering program of common stock with an aggregate sales amount of up to $750.0 million. As of June 30, 2023, $750.0 million remained available for issuance under our current ATM offering program.

Debt Activity

As of June 30, 2023, the Company had outstanding interest rate derivatives totaling $1.0 billion to hedge one-month Term SOFR. The following details the amount and rate of each swap (dollars in thousands):


EXPIRATION DATE	AMOUNT		WEIGHTED AVERAGE RATE
January 15, 2024	$	200,000	1.21	%
May 1, 2026	100,000		2.15	%
June 1, 2026	150,000		3.83	%
December 1, 2026	150,000		3.84	%
June 1, 2027	150,000		4.13	%
December 1, 2027	250,000		3.79	%
	$	1,000,000	3.17	%

Subsequent Debt Activity

Operating Activities

Cash flows provided by operating activities increased from $114.1 million for the six months ended June 30, 2022 to $254.3 million for the six months ended June 30, 2023. Items impacting cash flows from operations include, but are not limited to, cash generated from property operations, interest payments and the timing related to the payment of invoices and other expenses.

The Company may, from time to time, sell properties and redeploy cash from property sales into new investments. To the extent revenues related to the properties being sold exceed income from these new investments, the Company's results of operations and cash flows could be adversely affected.

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Trends and Matters Impacting Operating Results

Management monitors factors and trends important to the Company and the REIT industry to gauge the potential impact on the operations of the Company. In addition to the matters discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, below are some of the factors and trends that management believes may impact future operations of the Company.

Economic and Market Conditions

Rising interest rates and increased volatility in the capital markets have increased the Company’s cost and availability of debt and equity capital. Limited availability and increases in the cost of capital could adversely impact the Company’s ability to finance operations and acquire and develop properties. To the extent the Company’s tenants experience increased costs or financing difficulties due to the economic and market conditions, they may be unable or unwilling to make payments or perform their obligations when due. Additionally, increased interest rates may also result in less liquid property markets, limiting the Company’s ability to sell existing assets or obtain joint venture capital.

Expiring Leases

The Company expects that approximately 15% of its leases will expire each year in the ordinary course of business. There are 857 leases totaling 2.3 million square feet that will expire during the remainder of 2023. Approximately 76% of the leases expiring during the remainder of 2023 are for space in buildings located on or adjacent to hospital campuses, are distributed throughout the portfolio, and are not concentrated with any one tenant, health system or market area. The Company typically expects to retain 75% to 90% of tenants upon expiration, and the retention ratio for the first six months of the year was within this range.

Operating Expenses

The Company historically has experienced increases in property taxes throughout its portfolio as a result of increasing assessments and tax rates levied across the country. The Company continues its efforts to appeal property tax increases and manage the impact of the increases. In addition, the Company historically has incurred variability in portfolio utilities expense based on seasonality, with the first and third quarters usually reflecting greater amounts. The effects of these operating expense increases are mitigated in leases that have provisions for operating expense reimbursement. As of June 30, 2023, leases for approximately 92% of the Company's total leased square footage allow for some recovery of operating expenses, with approximately 27% having modified gross lease structures and approximately 65% having net lease structures.

Purchase Options

Information about the Company's unexercised purchase options and the amount and basis for determination of the purchase price is detailed in the table below (dollars in thousands):


YEAR EXERCISABLE	NUMBER OF PROPERTIES	GROSS REAL ESTATE INVESTMENT AS OF JUNE 30, 2023 1
Current 2	6	$	112,669
2024	—	—
2025	7	112,689
2026	6	181,414
2027	4	110,260
2028	5	133,877
2029	3	81,784
2030	—	—
2031	4	108,818
2032	2	24,619
2033 and thereafter 3	10	340,128
Total	47	$	1,206,258

1Includes three properties totaling $45.0 million with stated purchase prices or prices based on fixed capitalization rates.

2These purchase options have been exercisable for an average of 13.4 years.

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

Non-GAAP Financial Measures and Key Performance Indicators

Management considers certain non-GAAP financial measures and key performance indicators to be useful supplemental measures of the Company's operating performance. A non-GAAP financial measure is generally defined as one that purports to measure financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable measure determined in accordance with GAAP. Set forth below are descriptions of the non-GAAP financial measures management considers relevant to the Company's business and useful to investors, as well as reconciliations of these measures to the most directly comparable GAAP financial measures.

The non-GAAP financial measures and key performance indicators presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income, as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs. Management believes that in order to facilitate a clear understanding of the Company's historical consolidated operating results, these measures should be examined in conjunction with net income and cash flows from operations as presented in the Condensed Consolidated Financial Statements and other financial data included elsewhere in this Quarterly Report on Form 10-Q.

Funds from Operations ("FFO"), Normalized FFO and Funds Available for Distribution ("FAD")

FFO and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to “net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization, impairment, and after adjustments for unconsolidated partnerships and joint ventures.”

In addition to FFO, the Company presents Normalized FFO and FAD. Normalized FFO is presented by adding to FFO acquisition-related costs, acceleration of debt issuance costs, debt extinguishment costs and other Company-defined normalizing items to evaluate operating performance. FAD is presented by adding to Normalized FFO non-real estate depreciation and amortization, non-cash financing receivable amortization, loan origination cost amortization, deferred financing fees amortization, stock-based compensation expense and rent reserves, net; and subtracting maintenance capital expenditures, including second generation tenant improvements and leasing commissions paid and straight-line rent income, net of expense. The Company's definition of these terms may not be comparable to that of other real estate companies as they may have different methodologies for computing these amounts. FFO, Normalized FFO and FAD should not be considered as an alternative to net income as an indicator of the Company's financial performance or to cash flow from operating activities as an indicator of the Company's liquidity. FFO, Normalized FFO and FAD should be reviewed in connection with GAAP financial measures.

Management believes FFO, Normalized FFO, FFO per common share, Normalized FFO per share and FAD ("Non-GAAP Measures") provide an understanding of the operating performance of the Company’s properties without giving effect to certain significant non-cash items, primarily depreciation and amortization expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. The Company believes that by excluding the effect of depreciation, amortization, impairments and gains or losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, Non-GAAP Measures can facilitate comparisons of operating performance between periods. The Company reports Non-GAAP Measures because these measures are observed by management to also be the predominant measures used by the REIT industry and by industry analysts to evaluate REITs. For these reasons, management deems it appropriate to disclose and discuss these Non-GAAP Measures. However, none of these measures represent cash generated from operating activities determined in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs. Further, these measures should not be considered as an

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alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flow from operating activities as a measure of liquidity.

The table below reconciles net income to FFO, Normalized FFO and FAD for the three and six months ended June 30, 2023 and 2022.


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
Amounts in thousands, except per share data	2023		2022		2023		2022
Net (loss) income attributable to common stockholders	$	(82,759)	$	6,130	$	(169,884)	$	48,357
Net (loss) income attributable to common stockholders per share 1	$	(0.22)	$	0.04	$	(0.45)	$	0.32

Gain on sales of real estate properties	(7,156)		(8,496)		(8,162)		(53,280)
Impairment of real estate properties	55,215		—		81,442		(25)
Real estate depreciation and amortization	185,003		57,334		371,112		112,991
Non-controlling income from operating partnership units	(1,027)		—		(2,094)		—
Proportionate share of unconsolidated joint ventures	4,412		2,807		9,253		5,176
FFO adjustments	$	236,447	$	51,645	$	451,551	$	64,862
FFO adjustments per common share - diluted 7	$	0.62	$	0.34	$	1.18	$	0.43

FFO attributable to common stockholders	$	153,688	$	57,775	$	281,667	$	113,219
FFO attributable to common stockholders per common share - diluted 7	$	0.40	$	0.38	$	0.73	$	0.75

Acquisition and pursuit costs 2	669		1,352		956		2,655
Merger-related costs 3	(15,670)		7,085		(10,815)		13,201
Merger-related fair value of debt instruments	10,554		—		21,418		—
Lease intangible amortization	240		584		386		893
Non-routine legal costs/forfeited earnest money received	275		140		275		231
Allowance for credit losses 4	—		—		8,599		—
Debt financing costs	—		—		—		1,429
Unconsolidated JV normalizing items 5	93		83		210		178
Normalized FFO adjustments	$	(3,839)	$	9,244	$	21,029	$	18,587
Normalized FFO adjustments per common share - diluted 8	$	(0.01)	$	0.06	$	0.05	$	0.12

Normalized FFO attributable to common stockholders	$	149,849	$	67,019	$	302,696	$	131,806
Normalized FFO attributable to common stockholders per common share - diluted 8	$	0.39	$	0.45	$	0.79	$	0.88

Non-real estate depreciation and amortization	802		556		1,406		1,016
Non-cash interest amortization 6	1,618		747		2,300		1,458
Rent reserves, net	(54)		16		1,317		159
Straight-line rent, net	(8,005)		(1,327)		(16,251)		(2,536)
Stock-based compensation	3,924		3,356		7,669		7,055
Unconsolidated JV non-cash items 7	(316)		(242)		(598)		(513)
Normalized FFO adjusted for non-cash items	$	147,818	$	70,125	$	298,539	$	138,445
2nd generation TI	(17,236)		(5,051)		(26,118)		(9,950)
Leasing commissions paid	(5,493)		(3,475)		(12,506)		(7,242)
Capital additions	(8,649)		(4,557)		(17,595)		(7,177)
FAD	$	116,440	$	57,042	$	242,320	$	114,076


FFO weighted average common shares outstanding - diluted 8	383,409		150,545		383,372		150,203

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

2Acquisition and pursuit costs include third-party and travel costs related to the pursuit of acquisitions and developments.

3Includes costs incurred related to the Merger. For the three and six months ended June 30, 2023, merger costs are net of a refund of $17.8 million for transfer taxes paid during the year ended December 31, 2022.

4For the six months ended June 30, 2023, includes a $5.2 million credit allowance for a mezzanine loan included in "Impairment of real estate and credit loss reserves" on the Statement of Operations and $3.4 million reserve included in “Rental Income” on the Statement of Operations for previously deferred rent and straight line rent for three skilled nursing facilities.

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5Includes the Company's proportionate share of acquisition and pursuit costs related to unconsolidated joint ventures.

6Includes the amortization of deferred financing costs, discounts and premiums, and non-cash financing receivable amortization.

7Includes the Company's proportionate share of straight-line rent, net related to unconsolidated joint ventures.

8The Company utilizes the treasury stock method which includes the dilutive effect of nonvested share-based awards outstanding of 442,263 and 806,310, respectively, for the three months ended June 30, 2023 and 2022, and the diluted impact of 4,042,993 OP units outstanding for the three and six months ended June 30, 2023.

Cash Net Operating Income ("NOI") and Merger Combined Same Store Cash NOI

Cash NOI and Merger Combined Same Store Cash NOI are key performance indicators. Management considers these to be supplemental measures that allow investors, analysts and Company management to measure unlevered property-level operating results. The Company defines Cash NOI as rental income, interest from financing receivables less property operating expenses. Cash NOI excludes non-cash items such as above and below market lease intangibles, straight-line rent, lease inducements, financing receivable amortization, tenant improvement amortization and leasing commission amortization. The Company also excludes cash lease termination fees. Cash NOI is historical and not necessarily indicative of future results.

Merger Combined Same Store Cash NOI compares Cash NOI for stabilized properties. Stabilized properties are properties that have been included in operations for the duration of the year-over-year comparison period presented. Accordingly, stabilized properties exclude properties that were recently acquired or disposed of, properties classified as held for sale or intended for sale, properties undergoing redevelopment, and newly redeveloped or developed properties.

Legacy HTA properties that met the same store criteria are included in both periods shown as if they were owned by the Company for the full analysis period. The Legacy HR same store pool represented approximately 35% of the NOI of the combined company at the time of the Merger. Management believes that continued reporting of the same store portfolio of only the pre-Merger accounting acquirer (i.e., Legacy HR) offered little value to the investor who was seeking to understand the operating performance and growth potential of the combined company. The Company was provided access to the underlying financial statements of Legacy HTA (which financial statements had been audited or, in the case of interim periods, reviewed) and other detailed information about each property, such as the acquisition date. Based on this available information, the Company was able to consistently apply its same store definition across the combined portfolio, resulting in approximately 85% of the combined portfolio being represented in the same store presentation.

The Company utilizes the redevelopment classification for properties where management has approved a change in strategic direction for such properties through the application of additional resources including an amount of capital expenditures significantly above routine maintenance and capital improvement expenditures.

Any recently acquired property will be included in the merger combined same store pool once the Company has owned the property for eight full quarters. Newly developed or redeveloped properties will be included in the merger combined same store pool eight full quarters after substantial completion.

The following table reflects the Company's Merger Combined Same Store Cash NOI for the six months ended June 30, 2023 and 2022.


	NUMBER OF PROPERTIES	GROSS INVESTMENT at June 30, 2023		MERGER COMBINED SAME STORE CASH NOI for the six months ended June 30,
Dollars in thousands				2023		2022
Merger combined same store properties	594	$	11,934,872	$	362,342	$	353,606

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The following tables reconcile net income to Merger Combined Same Store NOI and the merger combined same store property metrics to the total owned real estate portfolio for the six months ended June 30, 2023 and 2022:

Reconciliations of Legacy HR and Merger Combined Same Store Cash NOI


MERGER COMBINED SAME STORE RECONCILIATION
	SIX MONTHS ENDED JUNE 30,
Dollars in thousands	2023		2022
Net (loss) income attributable to common stockholders	$	(169,884)	$	48,357


Other income (expense)	207,225		(21,814)
General and administrative expense	30,399		21,576
Depreciation and amortization expense	367,671		109,772
Other expenses 1	(4,029)		20,963
Straight-line rent revenue, net	(16,251)		(2,536)
Joint venture properties	9,726		4,603
Other revenue 2	(7,643)		(4,005)
	417,214		176,916
Pre-Merger Legacy HTA NOI	—		255,388
Cash NOI	417,214		432,304
Cash NOI not included in same store	(54,872)		(78,698)
Merger combined same store cash NOI	$	362,342	$	353,606

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

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


LEGACY HR SAME STORE RECONCILIATION
	SIX MONTHS ENDED JUNE 30,
Dollars in thousands	2023		2022
Net (loss) income attributable to common stockholders	$	(169,884)	$	48,357


Other income (expense)	207,225		(21,814)
General and administrative expense	30,399		21,576
Depreciation and amortization expense	367,671		109,772
Other expenses 1	(4,029)		20,963
Straight-line rent revenue, net	(16,251)		(2,536)
Joint venture properties	9,726		4,603
Other revenue 2	(7,643)		(4,005)
	417,214		176,916
Cash NOI not included in same store	(261,468)		(26,048)
Legacy HR same store cash NOI 3	$	155,746	$	150,868

1Includes acquisition and pursuit costs, Merger-related costs, rent reserves, above and below market ground lease intangible amortization, leasing commission amortization and ground lease straight-line rent expense.

2Includes management fee income, interest, above and below market lease intangible amortization, lease inducement amortization, lease terminations and tenant improvement overage amortization.

3Legacy HR same store cash NOI includes 205 properties.

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Reconciliation of Merger Combined Same Store Properties


	AS OF JUNE 30, 2023
Dollars and square feet in thousands	PROPERTY COUNT	GROSS INVESTMENT 1		SQUARE FEET	OCCUPANCY
Merger combined same store properties	594	$	11,934,872	34,824	89.0	%
Acquisitions	62	1,087,583		2,878	87.3	%
Development completions	4	134,733		266	84.9	%
Redevelopments	12	325,247		1,204	55.8	%
Planned Dispositions	8	131,187		642	58.9	%
Total owned real estate properties	680	$	13,613,622	39,814	87.4	%

1Excludes assets held for sale, construction in progress, land held for development, corporate property and financing lease right-of-use assets unrelated to an imputed lease arrangement as a result of a sale leaseback transaction.

Results of Operations

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

The Company’s results of operations for the three months ended June 30, 2023 compared to the same period in 2022 were impacted by the Merger, acquisitions, developments, dispositions, gains on sale, and capital markets transactions.

Revenues

Rental income increased $189.0 million, or 134.4%, for the three months ended June 30, 2023 compared to the prior year period. This increase is primarily comprised of the following:

•Acquisitions in 2022 and 2023 contributed $5.1 million.

•Leasing activity, including contractual rent increases, contributed $5.0 million.

•Dispositions in 2022 and 2023 resulted in a decrease of $6.2 million.

•Impact from the Merger contributed $181.2 million.

Interest income increased $2.3 million, or 116.3%, for the three months ended June 30, 2023 compared to the prior year period primarily as a result of notes receivables assumed in the Merger and a note receivable entered into with a buyer upon disposition of a property in the first quarter of 2023.

Other operating income increased $1.5 million, or 54.5%, for the three months ended June 30, 2023 compared to the prior year period primarily as a result of variable parking and asset management fees assumed in the Merger.

Expenses

Property operating expenses increased $68.4 million, or 120.0%, for the three months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:

•Acquisitions in 2022 and 2023 resulted in an increase of $2.2 million.

•Increases in portfolio operating expenses as follows:

◦Maintenance and repair expense of $1.1 million;

◦Utilities expense of $0.7 million;

◦Administrative, leasing commissions, and other legal expense of $0.8 million;

◦Janitorial expense of $0.3 million; and

◦Insurance expense of $0.5 million.

•Compensation expense decreased $0.5 million.

•Property taxes decreased $0.1 million.

•Dispositions in 2022 and 2023 resulted in a decrease of $3.1 million.

•Impact from the Merger resulted in an increase of $62.6 million.

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General and administrative expenses increased approximately $4.9 million, or 46.7%, for the three months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:

•Decrease in cash compensation incentive expense of $1.1 million.

•Travel and related expenses increased $0.7 million.

•Net increases, primarily due to impacts from the Merger along with professional fees, audit services, insurance and other administrative costs, of $5.3 million.

Merger-related costs decreased $22.8 million, or 321.2%, for the three months ended June 30, 2023 compared to the prior year period primarily due to a reduction in legal and consulting services in connection with the Merger including a refund related to state transfer taxes.

Depreciation and amortization expense increased $127.5 million, or 228.7%, for the three months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:

•Acquisitions in 2022 and 2023 resulted in an increase of $2.7 million.

•Various building and tenant improvement expenditures resulted in an increase of $3.7 million.

•Dispositions in 2022 and 2023 resulted in a decrease of 1.6 million.

•Assets that became fully depreciated resulted in a decrease of $3.2 million.

•Impact from the Merger resulted in an increase of $125.9 million.

Other Income (Expense)

Gains on sale of real estate properties

In the second quarter of 2023, the Company recognized gains of approximately $7.2 million. In the second quarter of 2022, the Company recognized gains of approximately $8.5 million.

Interest expense

Interest expense increased $49.8 million, or 320.3%, for the three months ended June 30, 2023 compared to the prior year period. The components of interest expense are as follows:


	THREE MONTHS ENDED JUNE 30,				CHANGE
Dollars in thousands	2023		2022		$		%
Contractual interest	$	52,766	$	13,950	$	38,816	278.3	%
Net discount/premium accretion	9,649		79		9,570		12,113.9	%
Debt issuance costs amortization	1,562		708		854		120.6	%
Amortization of interest rate swap settlement	42		42		—		—	%
Amortization of treasury hedge settlement	107		107		—		—	%
Fair value derivative	997		—		997		—	%
Interest cost capitalization	(712)		(108)		(604)		559.3	%
Interest on lease liabilities	923		765		158		20.7	%
Total interest expense	$	65,334	$	15,543	$	49,791	320.3	%

Contractual interest expense increased $38.8 million, or 278.3%, for the three months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:

•Senior notes and unsecured term loans assumed in the Merger accounted for an increase of approximately $26.6 million.

•New unsecured term loans executed with the amended credit facility accounted for an increase of approximately $9.9 million.

•The Company's Unsecured Term Loan due 2024 and 2026 accounted for an increase of approximately $3.8 million.

•The Unsecured Credit Facility accounted for an increase of approximately $3.8 million due to an increased weighted average balance outstanding and an increase in the weighted average interest rate.

•Active interest rate derivatives accounted for a decrease of $5.2 million.

•Mortgage note repayments, net of assumptions, accounted for a decrease of approximately $0.1 million.

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Impairment of Real Estate Properties

In the second quarter of 2023, the Company recognized impairments totaling $55.2 million primarily due to four properties with changes in the expected holding periods.

Equity loss from unconsolidated joint ventures

The Company recognized its proportionate share of losses from its unconsolidated joint ventures. These losses are primarily attributable to non-cash depreciation expense. See Note 3 to the Condensed Consolidated Financial Statements accompanying this report for more details regarding the Company's unconsolidated joint ventures.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

The Company’s results of operations for the six months ended June 30, 2023 compared to the same period in 2022 were impacted by the Merger, acquisitions, developments, dispositions, gains on sale, and capital markets transactions.

Revenues

Rental income increased $374.7 million, or 134.2%, for the six months ended June 30, 2023 compared to the prior year period. This increase is primarily comprised of the following:

•Acquisitions in 2022 and 2023 contributed $19.3 million.

•Leasing activity, including contractual rent increases, contributed $3.5 million.

•Dispositions in 2022 and 2023 resulted in a decrease of $14.2 million.

•Impact from the Merger contributed $362.2 million.

Interest income increased $4.6 million, or 117.3%, from the prior year period primarily as result of notes receivables assumed in the Merger and a note receivable entered into with a buyer upon disposition of a property in the first quarter of 2023.

Other operating income increased $3.6 million, or 69.7%, from the prior year period primarily as a result of variable parking and asset management fees assumed in the Merger.

Expenses

Property operating expenses increased $133.0 million, or 116.2%, for the six months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:

•Acquisitions in 2022 and 2023 resulted in an increase of $5.8 million.

•Increases in portfolio operating expenses as follows:

◦Utilities expense of $1.0 million;

◦Administrative, leasing commissions, and other legal expense of $1.3 million;

◦Janitorial expense of $0.8 million;

◦Maintenance and repair expense of $1.2 million; and

◦Insurance expense of $0.8 million.

•Property tax expense decreased of $0.5 million.

•Compensation expense decreased $0.8 million.

•Dispositions in 2022 and 2023 resulted in a decrease of $7.3 million.

•Impact from the Merger resulted in an increase of 126.8 million.

General and administrative expenses increased approximately $8.8 million, or 40.9%, for the six months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:

•Incentive-based awards decreased $1.5 million.

•Net increases, impacts from the Merger including professional fees, audit services, insurance, travel and other administrative costs, of $10.3 million.

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Merger-related costs decreased $24.0 million, or 181.9%, for the six months ended for the six months ended June 30, 2023 primarily due to a reduction in legal and consulting services in connection with the Merger including a refund related to state transfer taxes.

Depreciation and amortization expense increased $257.9 million, or 234.9%, for the six months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:

•Acquisitions in 2022 and 2023 resulted in an increase of $7.1 million.

•Various building and tenant improvement expenditures resulted in an increase of $6.5 million.

•Dispositions in 2022 and 2023 resulted in a decrease of $3.6 million.

•Assets that became fully depreciated resulted in a decrease of $6.1 million.

•Impact from the Merger including a reset for fair value resulted in an increase of $254.0 million.

Other Income (Expense)

Gains on sale of real estate properties

Gains on the sale of real estate properties for the six months ended June 30, 2023 and 2022 totaled $8.2 million and $53.3 million, respectively.

Interest expense

Interest expense increased $99.9 million, or 342.0%, for the six months ended June 30, 2023 compared to the prior year period. The components of interest expense are as follows:


	SIX MONTHS ENDED JUNE 30,				CHANGE
Dollars in thousands	2023		2022		$		%
Contractual interest	$	103,533	$	26,452	$	77,081	291.4	%
Net discount/premium accretion	19,240		129		19,111		14,814.7	%
Debt issuance costs amortization	3,037		1,419		1,618		114.0	%
Amortization of interest rate swap settlement	84		84		—		—	%
Amortization of treasury hedge settlement	213		213		—		—	%
Fair value derivative	2,426		—		2,426		—	%
Interest cost capitalization	(1,282)		(145)		(1,137)		784.1	%
Interest on lease liabilities	1,841		1,052		789		75.0	%
Total interest expense	$	129,092	$	29,204	$	99,888	342.0	%

Contractual interest expense increased $77.1 million, or 291.4%, for the six months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:

•Senior notes and unsecured term loans assumed with the Merger accounted for an increase of approximately $52.4 million.

•New unsecured term loans executed with the amended credit facility accounted for an increase of approximately $19.0 million.

•The Company's Unsecured Term Loan due 2024 and 2026, net of swaps, accounted for an increase of approximately $7.7 million.

•The Unsecured Credit Facility accounted for an increase of approximately $8.1 million due to an increased weighted average balance outstanding and an increase in the weighted average interest rate.

•Interest rate derivatives accounted for a decrease of $10.0 million.

•Mortgage note repayments, net of assumptions, accounted for a decrease of approximately $0.1 million.

Impairment of Real Estate Properties

During the six months ended June 30, 2023, the Company recognized impairments totaling $86.7 million relating to five properties that were sold, one land parcel that was sold, three properties reclassified to held for sale and four additional properties due to changes in the expected holding periods. In addition, the Company recorded $5.2 million in credit loss reserves related to notes receivables. See Note 1 to the Condensed Consolidated Financial Statements accompanying this report for more details regarding the Company's notes receivables and credit loss reserves.

Table of Contents

Equity loss from unconsolidated joint ventures

The Company recognized its proportionate share of losses from its unconsolidated joint ventures, These losses are primarily attributable to non-cash depreciation expense. See Note 3 to the Condensed Consolidated Financial Statements accompanying this report for more details regarding the Company's unconsolidated joint ventures.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to market risk in the form of changing interest rates on its debt and mortgage notes. Management uses regular monitoring of market conditions and analysis techniques to manage this risk. During the six months ended June 30, 2023, there were no material changes in the quantitative and qualitative disclosures about market risks presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports it files or submits under the Exchange Act.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

In addition to the other information set forth in this report, an investor should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which could materially affect the Company’s business, financial condition or future results. The risks, as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, are not the only risks facing the Company. Additional risks and uncertainties not currently known to management or that management currently deems immaterial also may materially, adversely affect the Company’s business, financial condition, operating results or cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the six months ended June 30, 2023, the Company withheld and canceled shares of Company common stock to satisfy employee tax withholding obligations payable upon the vesting of non-vested shares, as follows:

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PERIOD	TOTAL NUMBER OF SHARES PURCHASED	AVERAGE PRICE PAID per share		TOTAL NUMBER OF SHARES purchased as part of publicly announced plans or programs	MAXIMUM NUMBER OF SHARES that may yet be purchased under the plans or programs
January 1 - January 31	—	$	—	—	—
February 1 - February 28	38,632	21.71		—	—
March 1 - March 31	—	—		—	—
April 1 - April 30	—	—		—	—
May 1 - May 31	—	—		—	—
June 1 - June 30	—	—		—	—
Total	38,632	$	21.71

Item 5. Other Information

During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading agreement" or "non-Rule 10b5-1 trading agreement," as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits


EXHIBIT			DESCRIPTION
Exhibit 3.1			Fifth Articles of Amendment and Restatement of the Company, as amended (filed herewith).
Exhibit 3.2			Fourth Amended and Restated Bylaws of the Company.1
Exhibit 4.1			D escription of the Registrant 's securities regi stered p ursuant to Section 12 of the Securities and E x change Act of 1934 (filed herewith ).
Exhibit 22.1			Subsidiary Issuers of Guaranteed Securities. (filed herewith)
Exhibit 31.1			Certification of the Chief Executive Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 31.2			Certification of the Chief Financial Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 32			Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Exhibit 101.INS			The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCH			XBRL Taxonomy Extension Schema Document (furnished electronically herewith)
Exhibit 101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document (furnished electronically herewith)
Exhibit 101.LAB			XBRL Taxonomy Extension Labels Linkbase Document (furnished electronically herewith)
Exhibit 101.DEF			XBRL Taxonomy Extension Definition Linkbase Document (furnished electronically herewith)
Exhibit 101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document (furnished electronically herewith)

1 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on April 29, 2020 and hereby incorporated by reference.

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	HEALTHCARE REALTY TRUST INCORPORATED

	By:	/s/ J. CHRISTOPHER DOUGLAS
		J. Christopher Douglas
		Executive Vice President and Chief Financial Officer
August 8, 2023

Exhibit 3.1

ARTICLES OF AMENDMENT

HEALTHCARE TRUST OF AMERICA, INC.

(a Maryland stock corporation)

Healthcare Trust of America, Inc., a Maryland stock corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: Article I of the charter of the Corporation (the “Charter”) is hereby amended to change the name of the Corporation to:

Healthcare Realty Trust Incorporated

SECOND: The foregoing amendment to the Charter has been approved by a majority of the entire Board of Directors of the Corporation and is limited to a change expressly authorized by Section 2-605 of the Maryland General Corporation Law to be made without action by the stockholders.

THIRD: These Articles of Amendment shall become effective at 4:30 p.m. ET on July 20, 2022.

FOURTH: The undersigned President and Chief Executive Officer of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned President and Chief Executive Officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed in its name and on its behalf by its President and Chief Executive Officer and witnessed by its Chief Financial Officer on July 19, 2022.

ATTEST:

Healthcare Trust of America, Inc.

By:

/s/ Robert A. Milligan

By:

/s/ Peter N. Foss (SEAL)

Name:

Robert A. Milligan

Name:

Peter N. Foss

Title:

Chief Financial Officer

Title:

Interim President and Chief Executive

Officer

Exhibit 3.1

HEALTHCARE TRUST OF AMERICA, INC.

ARTICLES SUPPLEMENTARY

July 14, 2017

Healthcare Trust of America, Inc., a Maryland corporation (the “ Company ”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “ Department ”) that:

FIRST : Under a power contained in Section 3-802(c) of Title 3, Subtitle 8 of the Maryland General Corporation Law (the “ MGCL ”), the Board of Directors of the Company (the “ Board ”) has resolved to prohibit the Company from electing to be subject to the provisions of Section 3-803 of Title 3, Subtitle 8 of the MGCL, unless a proposal to repeal such resolution is approved by the stockholders of the Company by the affirmative vote of at least a majority of the votes cast on the matter by stockholders entitled to vote generally in the election of directors.

SECOND : The action to prohibit the Company from becoming subject to Section 3-803 of Title 3, Subtitle 8 of the MGCL without stockholder approval referenced above has been approved by the Board in the manner and by the vote required by law.

THIRD : The undersigned officer acknowledges these Articles Supplementary to be the corporate act of the Company and, as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

IN WITNESS WHEREOF, the Company has caused these Articles Supplementary to be executed in its name and on its behalf by its Chief Executive Officer and attested to by its Chief Financial Officer, Treasurer and Secretary as of the date first written above.

HEALTHCARE TRUST OF AMERICA, INC.

By: /s/ Scott D. Peters
Name: Scott D. Peters
Title: Chief Executive Officer

ATTEST:

HEALTHCARE TRUST OF AMERICA, INC.

By: /s/ Robert A Milligan
Name: Robert A. Milligan
Title: Chief Financial Officer, Treasurer
and Secretary

[SIGNATURE PAGE TO ARTICLES SUPPLEMENTARY]

Exhibit 3.1

HEALTHCARE TRUST OF AMERICA, INC.

ARTICLES OF AMENDMENT

Healthcare Trust of America, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST : The charter of the Corporation is hereby amended to decrease the par value of the shares of Class A Common Stock of the Corporation issued and outstanding immediately prior to the filing of these Articles of Amendment from $0.02 per share to $0.01 per share.

SECOND : The amendment to the charter of the Corporation as set forth above has been duly approved by a majority of the entire Board of Directors of the Corporation as required by law. The amendment set forth above is limited to a change expressly authorized by Section 2-605(a)(2) of the Maryland General Corporation Law to be made without action by the stockholders of the Corporation.

THIRD : There has been no increase in the authorized stock of the Corporation effected by the amendment to the charter of the Corporation as set forth above.

FOURTH : These Articles of Amendment shall become effective at 5:01 p.m. on December 15, 2014.

The undersigned acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed in its name and on its behalf by its Chief Executive Officer and attested to by its Secretary on this 15th day of December, 2014.


ATTEST:						HEALTHCARE TRUST OF AMERICA, INC.

By: /s/ Robert A. Milligan						By: /s/ Scott D. Peters
Robert A. Milligan						Scott D. Peters
Secretary						Chief Executive Officer

Exhibit 3.1

HEALTHCARE TRUST OF AMERICA, INC.

ARTICLES OF AMENDMENT

Healthcare Trust of America, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST : The charter of the Corporation is hereby amended to provide that every two shares of Class A Common Stock of the Corporation (the “Class A Common Stock”), $0.01 par value per share, that were issued and outstanding immediately prior to the Effective Time (as defined below) shall be combined into one issued and outstanding share of Class A Common Stock, $0.02 par value per share; provided that no fractional shares of Class A Common Stock will be or remain issued upon such amendment and each stockholder otherwise entitled to a fractional share shall be entitled to receive in lieu thereof cash in an amount determined on the basis of the average closing price of the Class A Common Stock as reported on the New York Stock Exchange for the three consecutive trading days ending on the date of the Effective Time.

SECOND : The amendment to the charter of the Corporation as set forth above has been duly approved by a majority of the Board of Directors of the Corporation as required by law. The amendment set forth above is limited to a change expressly authorized by Section 2-309(e)(2) of the Maryland General Corporation Law to be made without action by the stockholders of the Corporation.

THIRD : There has been no increase in the authorized stock of the Corporation effected by the amendment to the charter of the Corporation as set forth above.

FOURTH : These Articles of Amendment shall become effective at 5:00 p.m. on December 15, 2014 (the “Effective Time”).


ATTEST:						HEALTHCARE TRUST OF AMERICA, INC.

By: /s/ Robert A. Milligan						By: /s/ Scott D. Peters
Robert A. Milligan						Scott D. Peters
Secretary						Chief Executive Officer

Exhibit 3.1

HEALTHCARE TRUST OF AMERICA, INC.

FIFTH ARTICLES OF AMENDMENT AND RESTATEMENT

FIRST : Healthcare Trust of America, Inc., a Maryland corporation (the “Corporation”), desires to amend and restate its charter as currently in effect and as hereinafter amended.

SECOND : The following provisions are all the provisions of the charter currently in effect and as hereinafter amended:

ARTICLE I

NAME

The name of the corporation (which is hereinafter called the “Corporation”) is:

Healthcare Trust of America, Inc.

ARTICLE II

PURPOSES AND POWERS

The purposes for which the Corporation is formed are to engage in any lawful act or activity (including, without limitation or obligation, engaging in business as a real estate investment trust under the Internal Revenue Code of 1986, as amended, or any successor statute (the “Code”)) for which corporations may be organized under the general laws of the State of Maryland as now or hereafter in force.

ARTICLE III

PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT

The address of the principal office of the Corporation in the State of Maryland is c/o National Registered Agents, Inc. of MD, 836 Park Avenue, Second Floor, Baltimore, Maryland 21201. The name and address of the resident agent of the Corporation are National Registered Agents, Inc. of MD, 836 Park Avenue, Second Floor, Baltimore, Maryland 21201. The resident agent is a Maryland corporation.

ARTICLE IV

DEFINITIONS

As used in the Charter, the following terms shall have the following meanings unless the context otherwise requires:

Acquisition Expenses . The term “Acquisition Expenses” shall mean any and all expenses incurred by or on behalf of the Corporation or any of its Affiliates in connection with the selection, evaluation, and acquisition of, and investment in, any Asset, whether or not acquired, including, without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, computer use related expenses and title insurance premiums.

Acquisition Fee . The term “Acquisition Fee” shall mean any and all fees and commissions, exclusive of Acquisition Expenses, paid by any Person to any other Person (including any fees or commissions paid by or to any Affiliate of the Corporation) in connection with making or investing in Mortgages or the purchase, development or construction of a Property, including real estate commissions, selection fees, Development Fees,

Exhibit 3.1

Construction Fees, nonrecurring management fees, loan fees, points or any other fees of a similar nature. Excluded shall be Development Fees and Construction Fees paid to any Person in connection with the actual development and construction of a project.

Affiliate or Affiliated . The term “Affiliate” or “Affiliated” shall mean, with respect to any Person, (i) any Person directly or indirectly owning, controlling or holding, with the power to vote, ten percent or more of the outstanding voting securities of such other Person; (ii) any Person ten percent or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person; (iv) any executive officer, director, trustee or general partner of such other Person; and (v) any legal entity for which such Person acts as an executive officer, director, trustee or general partner.

Aggregate Share Ownership Limit . The term “Aggregate Share Ownership Limit” shall mean not more than 9.8% in value of the aggregate of the outstanding Shares.

Asset . The term “Asset” shall mean any Property, Mortgage or other investment (other than investments in bank accounts, money market funds or other current assets) owned by the Corporation, directly or indirectly through one or more of its Affiliates, and any other investment made by the Corporation, directly or indirectly through one or more of its Affiliates.

Average Invested Assets . The term “Average Invested Assets” shall mean, for a specified period, the average of the aggregate book value of the assets of the Corporation invested, directly or indirectly, in equity interests in and loans secured by real estate (including, without limitation, equity interests in REITs, mortgage pools, commercial mortgage-backed securities and residential mortgage-backed securities), before reserves for depreciation, bad debts or other non-cash reserves, computed by taking the average of such values at the end of each month during such period.

Beneficial Ownership . The term “Beneficial Ownership” shall mean ownership of Shares by a Person, whether the interest in Shares is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.

Benefit Plan Investor . The term shall have the meaning provided in Section 2510.3-101 of the Department of Labor regulations or any successor regulation thereto.

Board or Board of Directors . The term “Board” or “Board of Directors” shall mean the Board of Directors of the Corporation.

Business Day . The term “Business Day” shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.

Exhibit 3.1

Bylaws . The term “Bylaws” shall mean the Bylaws of the Corporation, as amended from time to time.

Charitable Beneficiary . The term “Charitable Beneficiary” shall mean one or more beneficiaries of the Charitable Trust as determined pursuant to Section 6.2.6 hereof, provided that each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

Charitable Trust . The term “Charitable Trust” shall mean any trust provided for in Section 6.2.1 hereof.

Charitable Trustee . The term “Charitable Trustee” shall mean the Person unaffiliated with the Corporation and a Prohibited Owner that is appointed by the Corporation to serve as Trustee of the Charitable Trust.

Charter . The term “Charter” shall mean the charter of the Corporation.

Class A Common Stock . The term “Class A Common Stock” shall have the meaning as provided in Section 5.2.5 herein.

Class B Common Stock . The term “Class B Common Stock” shall have the meaning as provided in Section 5.2.5 herein.

Class B-1 Common Stock . The term “Class B-1 Common Stock” shall have the meaning as provided in Section 5.2.5 herein.

Class B-2 Common Stock . The term “Class B-2 Common Stock” shall have the meaning as provided in Section 5.2.5 herein.

Class B-3 Common Stock . The term “Class B-3 Common Stock” shall have the meaning as provided in Section 5.2.5 herein.

Code . The term “Code” shall have the meaning as provided in Article II herein.

Common Share Ownership Limit . The term “Common Share Ownership Limit” shall mean not more than 9.8% (in value or in number of Shares, whichever is more restrictive) of the aggregate of the outstanding Common Shares.

Common Shares . The term “Common Shares” shall have the meaning as provided in Section 5.1 herein.

Construction Fee . The term “Construction Fee” shall mean a fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or to provide major repairs or rehabilitations on a Property.

Exhibit 3.1

Constructive Ownership . The term “Constructive Ownership” shall mean ownership of Shares by a Person, whether the interest in Shares is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.

Contract Purchase Price . The term “Contract Purchase Price” shall mean the amount actually paid or allocated in respect of the purchase, development, construction or improvement of a Property or the amount of funds advanced with respect to a Mortgage, or the amount actually paid or allocated in respect of the purchase of other Assets, in each case exclusive of Acquisition Fees and Acquisition Expenses.

Corporation . The term “Corporation” shall have the meaning as provided in Article I herein.

Dealer Manager . The term “Dealer Manager” shall mean Realty Capital Securities, LLC, a Delaware limited liability company, or such other Person selected by the Board to act as the dealer manager for an Offering.

Development Fee . The term “Development Fee” shall mean a fee for the packaging of a Property, including the negotiation and approval of plans, and any assistance in obtaining zoning and necessary variances and financing for a specific Property, either initially or at a later date.

Director . The term “Director” shall have the meaning as provided in Section 7.1 herein.

Distributions . The term “Distributions” shall mean any distributions of money or other property, pursuant to Section 5.5 hereof, by the Corporation to owners of Shares, including distributions that may constitute a return of capital for federal income tax purposes.

Effective Time . The term “Effective Time” shall mean immediately prior to Listing.

ERISA Investor . Any holder of Shares that is (i) an employee benefit plan subject to Title 1 of the Employee Retirement Income Security Act of 1974, as amended, (ii) a plan as defined in Section 4975(e) of the Code (any such employee benefit plan or “plan” as described in clause (i) or this clause (ii) being referred to herein as “Plan”), (iii) a trust which was established pursuant to a Plan, or a nominee for such trust or Plan, or (iv) an entity whose underlying assets include assets of a Plan by reason of such Plan’s investment in such entity.

Excepted Holder . The term “Excepted Holder” shall mean a Stockholder for whom an Excepted Holder Limit is created by Article VI hereof or by the Board of Directors pursuant to Section 6.1.7.

Excepted Holder Limit . The term “Excepted Holder Limit” shall mean, provided that the affected Excepted Holder agrees to comply with the requirements established by the Board of Directors pursuant to Section 6.1.7 and subject to adjustment pursuant to Section 6.1.8, the percentage limit established by the Board of Directors pursuant to Section 6.1.7.

Exhibit 3.1

Excess Amount . The term “Excess Amount” shall have the meaning as provided in Section 8.3 herein.

Exchange Act . The term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Gross Proceeds . The term “Gross Proceeds” shall mean the aggregate purchase price of all Shares sold for the account of the Corporation through an Offering, without deduction for Selling Commissions, volume discounts, marketing support fees and due diligence expense reimbursement or Organizational and Offering Expenses. For the purpose of computing Gross Proceeds, the purchase price of any Share for which reduced Selling Commissions are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the Corporation are not reduced) shall be deemed to be the full amount of the offering price per Share pursuant to the Prospectus for such Offering without reduction.

Indemnitee . The term “Indemnitee” shall have the meaning as provided in Section 12.2 herein.

Independent Appraiser . The term “Independent Appraiser” shall mean a Person with no material current or prior business or personal relationship with the Corporation or the Directors and who is engaged to a substantial extent in the business of rendering opinions regarding the value of Real Property and/or other Assets of the type held by the Corporation. Membership in a nationally recognized appraisal society such as the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers shall be conclusive evidence of being engaged to a substantial extent in the business of rendering opinions regarding the value of Real Property.

Independent Director . The term “Independent Director” shall mean a Director who is not on the date of determination, and within the last two years from the date of determination has not been, directly or indirectly associated with the Corporation or its Affiliates by virtue of (i) employment by the Corporation or any of its Affiliates; (ii) performance of services, other than as a Director, for the Corporation; or (iii) maintenance of a material business or professional relationship with the Corporation or any of its Affiliates. A business or professional relationship is considered “material” if the aggregate gross income derived by the Director from the Corporation and its Affiliates (excluding fees for serving as a director of the Corporation or other REIT or real estate program that is organized, advised or managed by the Corporation and its Affiliates) exceeds five percent of either the Director’s annual gross income during either of the last two years or the Director’s net worth on a fair market value basis. An indirect association with the Corporation or its Affiliates shall include circumstances in which a Director’s spouse, parent, child, sibling, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law is or has been associated with the Corporation or its Affiliates.

Initial Date . The term “Initial Date” shall mean the date on which Shares are first issued in the Corporation’s Initial Public Offering.

Initial Public Offering . The term “Initial Public Offering” shall mean the Corporation’s offering and sale of Common Shares pursuant to a registration statement filed under the Securities Act, which became effective with the SEC on September 20, 2006 (Commission File No. 333-133652) and terminated on March 19, 2010.

Exhibit 3.1

Invested Capital . The term “Invested Capital” shall mean the amount calculated by multiplying the total number of Shares purchased by Stockholders by the issue price at the time of such purchase, reduced by the portion of any Distribution that is attributable to Net Sales Proceeds and by any amounts paid by the Corporation to repurchase Shares pursuant to the Corporation’s plan for the repurchase of Shares.

Joint Ventures . The term “Joint Ventures” shall mean those joint venture or partnership arrangements in which the Corporation or any of its subsidiaries is a co-venturer or general partner established to acquire or hold Assets.

Leverage . The term “Leverage” shall mean the aggregate amount of indebtedness of the Corporation for money borrowed (including purchase money mortgage loans) outstanding at any time, both secured and unsecured.

Listing . The listing of a class of Common Shares on (i) the NYSE, the American Stock Exchange, or the Global Market or the Global Select Market of the Nasdaq Stock Market (or any successor to such entities), or (ii) a national securities exchange (or tier or segment thereof) that has listing standards that the SEC has determined by rule are substantially similar to the listing standards applicable to securities described in Section 18(b)(1)(A) of the Securities Act. Upon such Listing, such Common Shares shall be deemed Listed.

Market Price . The term “Market Price” on any date shall mean, with respect to any class or series of outstanding Shares, the Closing Price for such Shares on such date. The “Closing Price” on any date shall mean the last sale price for such Shares, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such Shares, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE or, if such Shares are not listed or admitted to trading on the NYSE, as reported on the principal consolidated transaction reporting system on which such Shares are listed or admitted to trading or, if such Shares are not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotation system that may then be in use or, if such Shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Shares selected by the Board of Directors or, in the event that no trading price is available for such Shares, the fair market value of Shares, as determined in good faith by the Board of Directors.

MGCL . The term “MGCL” shall mean the Maryland General Corporation Law, as amended from time to time.

Mortgages . The term “Mortgages” shall mean, in connection with mortgage financing provided, invested in, participated in or purchased by the Corporation, all of the notes, deeds of trust, security interests or other evidences of indebtedness or obligations, which are secured or collateralized by Real Property owned by the borrowers under such notes, deeds of trust, security interests or other evidences of indebtedness or obligations.

Exhibit 3.1

NASAA REIT Guidelines . The term “NASAA REIT Guidelines” shall mean the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association, as may be amended from time to time.

Net Assets . The term “Net Assets” shall mean the total assets of the Corporation (other than intangibles) at cost, before deducting depreciation, reserves for bad debts or other non-cash reserves, less total liabilities, calculated quarterly by the Corporation on a basis consistently applied.

Net Income . The term “Net Income” shall mean for any period, the Corporation’s total revenues applicable to such period, less the total expenses applicable to such period other than additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of the Assets.

Net Sales Proceeds . The term “Net Sales Proceeds” shall mean in the case of a transaction described in clause (i)(A) of the definition of Sale, the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Corporation, including all real estate commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(B) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Corporation, including any legal fees and expenses and other selling expenses incurred in connection with such transaction. In the case of a transaction described in clause (i)(C) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction actually distributed to the Corporation or the Operating Partnership from the Joint Venture less the amount of any selling expenses, including legal fees and expenses incurred by or on behalf of the Corporation (other than those paid by the Joint Venture). In the case of a transaction or series of transactions described in clause (i)(D) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction (including the aggregate of all payments under a Mortgage on or in satisfaction thereof other than regularly scheduled interest payments) less the amount of selling expenses incurred by or on behalf of the Corporation, including all commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(E) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Corporation, including any legal fees and expenses and other selling expenses incurred in connection with such transaction. In the case of a transaction described in clause (ii) of the definition of Sale, Net Sales Proceeds means the proceeds of such transaction or series of transactions less all amounts generated thereby which are reinvested in one or more Assets within 180 days thereafter and less the amount of any real estate commissions, closing costs, and legal fees and expenses and other selling expenses incurred by or allocated to the Corporation or the Operating Partnership in connection with such transaction or series of transactions. Net Sales Proceeds shall also include any amounts that the Corporation determines, in its discretion, to be economically equivalent to proceeds of a Sale. Net Sales Proceeds shall not include any reserves established by the Corporation in its sole discretion.

NYSE . The term “NYSE” shall mean the New York Stock Exchange.

Non-Compliant Tender Offer . The term “Non-Compliant Tender Offer” shall have the meaning as provided in Section 11.7 herein.

Offering . The term “Offering” shall mean any offering and sale of Shares.

Exhibit 3.1

Operating Partnership . The term “Operating Partnership” shall mean Healthcare Trust of America Holdings, LP, a Delaware limited partnership, through which the Corporation may own Assets.

Organizational and Offering Expenses . The term “Organizational and Offering Expenses” shall mean any and all costs and expenses incurred by and to be paid from the assets of the Corporation in connection with the formation, qualification and registration of the Corporation, and the marketing and distribution of Shares, including, without limitation, total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys), expenses for printing, engraving, amending, supplementing, mailing and distributing costs, salaries of employees while engaged in sales activity, telephone and other telecommunications costs, all advertising and marketing expenses (including the costs related to investor and broker-dealer sales meetings), charges of transfer agents, registrars, trustees, escrow holders, depositories, experts, fees, expenses and taxes related to the filing, registration and qualification of the sale of the Shares under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees.

Person . The term “Person” shall mean an individual, corporation, partnership, estate, trust (including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Exchange Act, and a group to which an Excepted Holder Limit applies.

Preferred Shares . The term “Preferred Shares” shall have the meaning as provided in Section 5.1 herein.

Prohibited Owner . The term “Prohibited Owner” shall mean, with respect to any purported Transfer, any Person who, but for the provisions of Section 6.1.1, would Beneficially Own or Constructively Own Shares, and if appropriate in the context, shall also mean any Person who would have been the record owner of Shares that the Prohibited Owner would have so owned.

Property or Properties . The term “Property” or “Properties” shall mean, as the context requires, any, or all, respectively, of the Real Property acquired by the Corporation, directly or indirectly through joint venture arrangements or other partnership or investment interests.

Prospectus . The term “Prospectus” shall mean the same as that term is defined in Section 2(10) of the Securities Act, including a preliminary prospectus, an offering circular as described in Rule 256 of the General Rules and Regulations under the Securities Act, or, in the case of an intrastate offering, any document by whatever name known, utilized for the purpose of offering and selling Securities to the public.

Real Property . The term “Real Property” shall mean land, rights in land (including leasehold interests), and any buildings, structures, improvements, furnishings, fixtures and equipment located on or used in connection with land and rights or interests in land.

Exhibit 3.1

Reinvestment Plan . The term “Reinvestment Plan” shall have the meaning as provided in Section 5.10 herein.

REIT . The term “REIT” shall mean a corporation, trust, association or other legal entity (other than a real estate syndication) that is engaged primarily in investing in equity interests in real estate (including fee ownership and leasehold interests) or in loans secured by real estate or both as defined pursuant to the REIT Provisions of the Code.

REIT Provisions of the Code . The term “REIT Provisions of the Code” shall mean Sections 856 through 860 of the Code and any successor or other provisions of the Code relating to real estate investment trusts (including provisions as to the attribution of ownership of beneficial interests therein) and the regulations promulgated thereunder.

Restriction Termination Date . The term “Restriction Termination Date” shall mean the first day after the Initial Date on which the Board of Directors determines that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as a REIT or that compliance with the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of Shares set forth herein is no longer required in order for the Corporation to qualify as a REIT.

Roll-Up Entity . The term “Roll-Up Entity” shall mean a partnership, real estate investment trust, corporation, trust or similar entity that would be created or would survive after the successful completion of a proposed Roll-Up Transaction.

Roll-Up Transaction . The term “Roll-Up Transaction” shall mean a transaction involving the acquisition, merger, conversion or consolidation either directly or indirectly of the Corporation and the issuance of securities of a Roll-Up Entity to the Stockholders. Such term does not include:

(a) a transaction involving securities of the Corporation that have been for at least twelve months listed on a national securities exchange; or

(b) a transaction involving the conversion to corporate, trust or association form of only the Corporation, if, as a consequence of the transaction, there will be no significant adverse change in any of the following:

(i) Stockholders’ voting rights;

(ii) the term of existence of the Corporation; or

(iii) the Corporation’s investment objectives.

Sale or Sales . The term “Sale” or “Sales” shall mean (i) any transaction or series of transactions whereby: (A) the Corporation or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including the lease of any Property consisting of a building only, and including any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (B) the Corporation or the Operating Partnership directly or indirectly (except as described in other subsections of this

Exhibit 3.1

definition) sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Corporation or the Operating Partnership in any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture directly or indirectly (except as described in other subsections of this definition) in which the Corporation or the Operating Partnership as a co-venturer or partner sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including any event with respect to any Property which gives rise to insurance claims or condemnation awards; (D) the Corporation or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, conveys or relinquishes its interest in any Mortgage or portion thereof (including with respect to any Mortgage, all payments thereunder or in satisfaction thereof other than regularly scheduled interest payments) of amounts owed pursuant to such Mortgage and any event which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the Corporation or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other Asset not previously described in this definition or any portion thereof, but (ii) not including any transaction or series of transactions specified in clause (i) (A) through (E) above in which the proceeds of such transaction or series of transactions are reinvested by the Corporation in one or more Assets within 180 days thereafter.

SDAT . The term “SDAT” shall mean the State Department of Assessments and Taxation of Maryland.

SEC . The term “SEC” shall mean the U.S. Securities and Exchange Commission.

Securities . The term “Securities” shall mean any of the following issued by the Corporation, as the text requires: Shares, any other stock, shares or other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.

Securities Act . The term “Securities Act” shall mean the Securities Act of 1933, as amended from time to time, or any successor statute thereto. Reference to any provision of the Securities Act shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time.

Selling Commissions . The term “Selling Commissions” shall mean any and all commissions payable to underwriters, dealer managers or other broker-dealers in connection with the sale of Shares, including, without limitation, commissions payable to the Dealer Manager.

Shares . The term “Shares” shall mean shares of stock of the Corporation of any class or series, including Common Shares or Preferred Shares.

Soliciting Dealers . The term “Soliciting Dealers” shall mean those broker-dealers that are members of the Financial Industry Regulatory Authority, Inc., or that are exempt from broker-dealer registration, and that, in either case, enter into participating broker or other agreements with the Dealer Manager to sell Shares.

Exhibit 3.1

Stockholder List . The term “Stockholder List” shall have the meaning as provided in Section 11.5 herein.

Stockholders . The term “Stockholders” shall mean the holders of record of the Shares as maintained in the books and records of the Corporation or its transfer agent.

Tendered Shares . The term “Tendered Shares” shall have the meaning as provided in Section 11.7 herein.

Total Operating Expenses . The term “Total Operating Expenses” shall mean all costs and expenses paid or incurred by the Corporation, as determined under generally accepted accounting principles, that are in any way related to the operation of the Corporation or to corporate business, including advisory fees, but excluding (i) the expenses of raising capital such as Organizational and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares; (ii) interest payments; (iii) taxes; (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves; (v) incentive fees paid in compliance with the NASAA REIT Guidelines; (vi) Acquisition Fees and Acquisition Expenses; (vii) disposition fees on the Sale of Property; and (viii) other fees and expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair, and improvement of property).

Transfer . The term “Transfer” shall mean any issuance, sale, transfer, gift, assignment, devise or other disposition, as well as any other event that causes any Person to acquire Beneficial Ownership or Constructive Ownership, or any agreement to take any such actions or cause any such events, of Shares or the right to vote or receive dividends on Shares, including (a) the granting or exercise of any option (or any disposition of any option), (b) any disposition of any securities or rights convertible into or exchangeable for Shares or any interest in Shares or any exercise of any such conversion or exchange right and (c) Transfers of interests in other entities that result in changes in Beneficial or Constructive Ownership of Shares; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms “Transferring” and “Transferred” shall have the correlative meanings.

2%/25% Guidelines . The term “2%/25% Guidelines” shall have the meaning as provided in Section 8.3 herein.

Unimproved Real Property . The term “Unimproved Real Property” shall mean Property in which the Corporation has an equity interest that was not acquired for the purpose of producing rental or other operating income, that has no development or construction in process and for which no development or construction is planned, in good faith, to commence within one year.

ARTICLE V

STOCK

Exhibit 3.1

Section 5.1 Authorized Shares . The Corporation has authority to issue 1,200,000,000 Shares, consisting of 1,000,000,000 shares of Common Stock, $0.01 par value per share (“Common Shares”), and 200,000,000 shares of Preferred Stock, $0.01 par value per share (“Preferred Shares”). The aggregate par value of all authorized Shares having par value is $12,000,000. All Shares shall be fully paid and nonassessable when issued. If Shares of one class are classified or reclassified into Shares of another class pursuant to this Article V, the number of authorized Shares of the former class shall be automatically decreased and the number of Shares of the latter class shall be automatically increased, in each case by the number of Shares so classified or reclassified, so that the aggregate number of Shares of all classes that the Corporation has authority to issue shall not be more than the total number of Shares set forth in the first sentence of this paragraph. The Board of Directors, with the approval of a majority of the entire Board and without any action by the Stockholders, may amend the Charter from time to time to increase or decrease the aggregate number of Shares or the number of Shares of any class or series that the Corporation has authority to issue.

Section 5.2 Common Shares .

Section 5.2.1. Common Shares Subject to Terms of Preferred Shares . The Common Shares shall be subject to the express terms of any series of Preferred Shares.

Section 5.2.2. Description . Subject to the provisions of Article VI and except as may otherwise be specified in the terms of any class or series of Common Shares, each Common Share shall entitle the holder thereof to one vote per share on all matters upon which Stockholders are entitled to vote pursuant to Section 11.2 hereof. Shares of a particular class of Common Shares shall have equal dividend, distribution, liquidation and other rights, and shall have no preference, cumulative, preemptive, conversion or exchange rights. The Board may classify or reclassify any unissued Common Shares from time to time in one or more classes or series of Shares; provided , however , that, until Listing, the voting rights per Share (other than any publicly held Share) sold in a private offering shall not exceed the voting rights which bear the same relationship to the voting rights of a publicly held Share as the consideration paid to the Corporation for each privately offered Share bears to the book value of each outstanding publicly held Share.

Section 5.2.3. Rights Upon Liquidation . In the event of any voluntary or involuntary liquidation, dissolution or winding up, or any distribution of the assets of the Corporation, the aggregate assets available for distribution to holders of the Common Shares shall be determined in accordance with applicable law. Each holder of Common Shares of a particular class shall be entitled to receive, ratably with each other holder of Common Shares of such class, that portion of such aggregate assets available for distribution as the number of outstanding Common Shares of such class held by such holder bears to the total number of outstanding Common Shares of such class then outstanding.

Section 5.2.4. Voting Rights . Except as may be provided otherwise in the Charter, and subject to the express terms of any series of Preferred Shares, the holders of the Common Shares shall have the exclusive right to vote on all matters (as to which a common stockholder shall be entitled to vote pursuant to applicable law) at all meetings of the Stockholders.

Exhibit 3.1

Section 5.2.5. Classification . At the Effective Time, 700,000,000 Common Shares shall be classified as Class A Common Stock (the “Class A Common Stock”), 100,000,000 Common Shares shall be classified as Class B-1 Common Stock (the “Class B-1 Common Stock”), 100,000,000 Common Shares shall be classified as Class B-2 Common Stock (the “Class B-2 Common Stock”), and 100,000,000 Common Shares shall be classified as Class B-3 Common Stock (the “Class B-3 Common Stock” and, together with the Class B-1 Common Stock and Class B-2 Common Stock, the “Class B Common Stock”). Eighteen (18) months following the date of Listing of the Class A Common Stock, all authorized but unissued shares of Class B Common Stock shall automatically be reclassified as Class A Common Stock.

Section 5.2.6. Conversion .

(a) At the Effective Time, each Common Share which was issued and outstanding immediately prior to the Effective Time shall be converted into 1/4 of a share of Class A Common Stock, 1/4 of a share of Class B-1 Common Stock, 1/4 of a share of Class B-2 Common Stock, and 1/4 of a share of Class B-3 Common Stock, the Class A Common Stock, Class B-1 Common Stock, Class B-2 Common Stock, and Class B-3 Common Stock having the respective preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions set forth herein.

(b) The Class A Common Stock is not convertible into or exchangeable for any other property or securities of the Company. Each issued and outstanding share of Class B Common Stock shall, automatically and without any action on the part of the holder thereof, convert into one (1) share of Class A Common Stock as follows: (a) six (6) months following the date of Listing of the Class A Common Stock, in the case of the Class B-1 Common Stock; (b) the earlier of (x) twelve (12) months following the date of Listing and (y) such earlier date as may be determined by the Board, but not earlier than six (6) months following the date of Listing of the Class A Common Stock, in the case of the Class B-2 Common Stock; and (c) the earlier of (x) eighteen (18) months following the date of Listing of the Class A Common Stock and (y) such earlier date as may be determined by the Board, but not earlier than six (6) months following the date of Listing of the Class A Common Stock, in the case of the Class B-3 Common Stock.

Section 5.2.7. General . Except as set forth in Section 5.2.6, the Class A Common Stock and Class B Common Stock shall have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption.

Section 5.3 Preferred Shares . The Board may classify any unissued Preferred Shares and reclassify any previously classified but unissued Preferred Shares of any series from time to time, in one or more classes or series of Shares; provided ; however , that, until Listing, the voting rights per Share (other than any publicly held Share) sold in a private offering shall not exceed the voting rights which bear the same relationship to the voting rights of a publicly held Share as the consideration paid to the Corporation for each privately offered Share bears to the book value of each outstanding publicly held Share.

Section 5.4 Classified or Reclassified Shares . Prior to issuance of classified or reclassified Shares of any class or series, the Board by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of Shares; (b) specify the number of Shares to be included in the class or series; (c) set or

Exhibit 3.1

change, subject to the provisions of Article VI and subject to the express terms of any class or series of Shares outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class, or series; and (d) cause the Corporation to file articles supplementary with the SDAT. Any of the terms of any class or series of Shares set or changed pursuant to clause (c) of this Section 5.4 may be made dependent upon facts or events ascertainable outside the Charter (including determinations by the Board or other facts or events within the control of the Corporation) and may vary among holders thereof, provided that the manner in which such facts, events or variations shall operate upon the terms of such class or series of Shares is clearly and expressly set forth in the articles supplementary or other charter document.

Section 5.5 Dividends and Distributions . The Board of Directors may from time to time authorize the Corporation to declare and pay to Stockholders such dividends or Distributions, in cash or other assets of the Corporation or in securities of the Corporation or from any other source as the Board of Directors in its discretion shall determine. The Board of Directors shall endeavor to authorize the Corporation to declare and pay such dividends and Distributions as shall be necessary for the Corporation to qualify as a REIT under the Code; provided , however , Stockholders shall have no right to any dividend or Distribution unless and until authorized by the Board and declared by the Corporation. The exercise of the powers and rights of the Board of Directors pursuant to this Section 5.5 shall be subject to the provisions of any class or series of Shares at the time outstanding. The receipt by any Person in whose name any Shares are registered on the records of the Corporation or by his or her duly authorized agent shall be a sufficient discharge for all dividends or Distributions payable or deliverable in respect of such Shares and from all liability to see to the application thereof. Until Listing, distributions in kind shall not be permitted, except for distributions of readily marketable securities, distributions of beneficial interests in a liquidating trust established for the dissolution of the Corporation and the liquidation of its assets in accordance with the terms of the Charter or distributions in which (i) the Board advises each Stockholder of the risks associated with direct ownership of the property, (ii) the Board offers each Stockholder the election of receiving such in-kind distributions, and (iii) in-kind distributions are made only to those Stockholders that accept such offer.

Section 5.6 Charter and Bylaws . The rights of all Stockholders and the terms of all Shares are subject to the provisions of the Charter and the Bylaws.

Section 5.7 No Issuance of Share Certificates . Until Listing, the Corporation shall not issue share certificates. A Stockholder’s investment shall be recorded on the books of the Corporation. To transfer his or her Shares, a Stockholder shall submit an executed form to the Corporation, which form shall be provided by the Corporation upon request. Such transfer will also be recorded on the books of the Corporation. Upon issuance or transfer of Shares, the Corporation will provide the Stockholder with information concerning his or her rights with regard to such Shares, as required by the Bylaws and the MGCL or other applicable law.

Section 5.8 Suitability of Stockholders . Until Listing, the following provisions shall apply:

Section 5.8.1. Investor Suitability Standards . Subject to suitability standards established by individual states, to become a Stockholder in the Corporation, if such prospective Stockholder is an individual (including an individual beneficiary, of a purchasing Individual Retirement Account), or if the

Exhibit 3.1

prospective Stockholder is a fiduciary (such as a trustee of a trust or corporate pension or profit sharing plan, or other tax-exempt organization, or a custodian under a Uniform Gifts to Minors Act), such individual or fiduciary, as the case may be, must represent to the Corporation, among other requirements as the Corporation may require from time to time:

(a) that such individual (or, in the case of a fiduciary, that the fiduciary account or the donor who directly or indirectly supplies the funds to purchase the Shares) has a minimum annual gross income of $70,000 and a net worth (excluding home, furnishings and automobiles) of not less than $70,000; or

(b) that such individual (or, in the case of a fiduciary, that the fiduciary account or the donor who directly or indirectly supplies the funds to purchase the Shares) has a net worth (excluding home, furnishings and automobiles) of not less than $250,000.

Section 5.8.2. Determination of Suitability of Sale . The Corporation and each Person selling Shares on behalf of the Corporation shall make every reasonable effort to determine that the purchase of Shares by Stockholders is a suitable and appropriate investment for such Stockholder. In making this determination, the Corporation or each Person selling Shares on behalf of the Corporation shall ascertain that the prospective Stockholder: (a) meets the minimum income and net worth standards established for the Corporation; (b) can reasonably benefit from the Corporation based on the prospective Stockholder’s overall investment objectives and portfolio structure; (c) is able to bear the economic risk of the investment based on the prospective Stockholder’s overall financial situation; and (d) has apparent understanding of (1) the fundamental risks of the investment; (2) the risk that the Stockholder may lose the entire investment; (3) the lack of liquidity of the Shares; (4) the restrictions on transferability of the Shares; and (5) the tax consequences of the investment.

The Corporation or each Person selling Shares on behalf of the Corporation shall make this determination on the basis of information it has obtained from a prospective Stockholder. Relevant information for this purpose will include at least the age, investment objectives, investment experience, income, net worth, financial situation, and other investments of the prospective Stockholder, as well as any other pertinent factors.

The Corporation or each Person selling Shares on behalf of the Corporation shall maintain records of the information used to determine that an investment in Shares is suitable and appropriate for a Stockholder. Each Person selling Shares on behalf of the Corporation shall maintain these records for at least six years.

Section 5.8.3. Minimum Initial Investment . Until a Listing, subject to certain individual state requirements, the minimum initial investment shall be 100 Shares.

Section 5.9 Repurchase of Shares . The Board may establish, from time to time, a program or programs by which the Corporation voluntarily repurchases Shares from its Stockholders; provided , however , that such repurchase does not impair the capital or operations of the Corporation. The members of the Board or any Affiliates thereof may not receive any fees arising out of the repurchase of Shares by the Corporation.

Exhibit 3.1

Section 5.10 Distribution Reinvestment Plans . The Board may establish, from time to time, a Distribution reinvestment plan or plans (each, a “Reinvestment Plan”). Under any such Reinvestment Plan, (i) all material information regarding Distributions to the Stockholders and the effect of reinvesting such Distributions, including the tax consequences thereof, shall be provided to the Stockholders not less often than annually, and (ii) each Stockholder participating in such Reinvestment Plan shall have a reasonable opportunity to withdraw from the Reinvestment Plan not less often than annually after receipt of the information required in clause (i) above.

ARTICLE VI

RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES

Section 6.1 Shares .

Section 6.1.1. Ownership Limitations . During the period commencing on the Initial Date and prior to the Restriction Termination Date, but subject to Section 6.3:

(a) Basic Restrictions .

(i) (1) No Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own Shares in excess of the Aggregate Share Ownership Limit, (2) no Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own Common Shares in excess of the Common Share Ownership Limit and (3) no Excepted Holder shall Beneficially Own or Constructively Own Shares in excess of the Excepted Holder Limit for such Excepted Holder.

(ii) No Person shall Beneficially or Constructively Own Shares to the extent that such Beneficial or Constructive Ownership of Shares would result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise failing to qualify as a REIT (including, but not limited to, Beneficial or Constructive Ownership that would result in the Corporation owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code).

(iii) Any Transfer of Shares that, if effective, would result in Shares being beneficially owned by less than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio , and the intended transferee shall acquire no rights in such Shares.

(b) Transfer in Trust . If any Transfer of Shares occurs which, if effective, would result in any Person Beneficially Owning or Constructively Owning Shares in violation of Section 6.1.1(a)(i) or (ii),

(i) then that number of Shares the Beneficial or Constructive Ownership of which otherwise would cause such Person to violate Section 6.1.1(a)(i) or (ii) (rounded up to the nearest whole share) shall be automatically transferred to a Charitable Trust for the benefit of a Charitable Beneficiary, as described in Section 6.2, effective as of the close of business on the Business Day prior to the date of such Transfer, and such Person shall acquire no rights in such Shares; or

Exhibit 3.1

(ii) if the transfer to the Charitable Trust described in clause (i) of this sentence would not be effective for any reason to prevent the violation of Section 6.1.1(a)(i) or (ii), then the Transfer of that number of Shares that otherwise would cause any Person to violate Section 6.1.1(a)(i) or (ii) shall be void ab initio , and the intended transferee shall acquire no rights in such Shares.

Section 6.1.2. Remedies for Breach . If the Board of Directors or its designee (including any duly authorized committee of the Board) shall at any time determine in good faith that a Transfer or other event has taken place that results in a violation of Section 6.1.1 or that a Person intends to acquire or has attempted to acquire Beneficial or Constructive Ownership of any Shares in violation of Section 6.1.1 (whether or not such violation is intended), the Board of Directors or its designee shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or other event, including, without limitation, causing the Corporation to redeem Shares, refusing to give effect to such Transfer on the books of the Corporation or instituting proceedings to enjoin such Transfer or other event; provided , however , that any Transfers or attempted Transfers or other events in violation of Section 6.1.1 shall automatically result in the transfer to the Charitable Trust described above, and, where applicable, such Transfer (or other event) shall be void ab initio as provided above irrespective of any action (or non-action) by the Board of Directors or its designee.

Section 6.1.3. Notice of Restricted Transfer . Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of Shares that will or may violate Section 6.1.1(a), or any Person who would have owned Shares that resulted in a transfer to the Charitable Trust pursuant to the provisions of Section 6.1.1(b), shall immediately give written notice to the Corporation of such event, or in the case of such a proposed or attempted transaction, give at least 15 days prior written notice, and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer on the Corporation’s status as a REIT.

Section 6.1.4. Owners Required To Provide Information . From the Initial Date and prior to the Restriction Termination Date:

(a) every owner of more than five percent (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding Shares, within 30 days after the end of each taxable year, shall give written notice to the Corporation stating the name and address of such owner, the number of Shares and other Shares Beneficially Owned and a description of the manner in which such Shares are held. Each such owner shall provide to the Corporation such additional information as the Corporation may request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation’s status as a REIT and to ensure compliance with the Aggregate Share Ownership Limit, the Common Share Ownership Limit and the other restrictions set forth herein; and

(b) each Person who is a Beneficial or Constructive Owner of Shares and each Person (including the stockholder of record) who is holding Shares for a Beneficial or Constructive Owner shall provide to the Corporation such information as the Corporation may request, in good faith, in order to determine the Corporation’s status as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance.

Exhibit 3.1

Section 6.1.5. Remedies Not Limited . Subject to Section 7.10 hereof, nothing contained in this Section 6.1 shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its Stockholders in preserving the Corporation’s status as a REIT.

Section 6.1.6. Ambiguity . In the case of an ambiguity in the application of any of the provisions of this Section 6.1, Section 6.2 or any definition contained in Article IV, the Board of Directors shall have the power to determine the application of the provisions of this Section 6.1 or Section 6.2 with respect to any situation based on the facts known to it. In the event Section 6.1 or 6.2 requires an action by the Board of Directors and the Charter fails to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Article IV or Sections 6.1 or 6.2. Absent a decision to the contrary by the Board of Directors (which the Board may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in Section 6.1.2) acquired Beneficial or Constructive Ownership of Shares in violation of Section 6.1.1, such remedies (as applicable) shall apply first to the Shares which, but for such remedies, would have been Beneficially Owned or Constructively Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such Shares based upon the relative number of the Shares held by each such Person.

Section 6.1.7. Exceptions .

(a) Subject to Section 6.1.1(a)(ii), the Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a Person from the Aggregate Share Ownership Limit and the Common Share Ownership Limit, as the case may be, and may establish or increase an Excepted Holder Limit for such Person if:

(i) the Board of Directors obtains such representations and undertakings from such Person as are reasonably necessary to ascertain that no individual’s Beneficial or Constructive Ownership of such Shares will violate Section 6.1.1(a)(ii);

(ii) such Person does not and represents that it will not own, actually or Constructively, an interest in a tenant of the Corporation (or a tenant of any entity owned or controlled by the Corporation) that would cause the Corporation to own, actually or Constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant and the Board of Directors obtains such representations and undertakings from such Person as are reasonably necessary to ascertain this fact (for this purpose, a tenant from whom the Corporation (or an entity owned or controlled by the Corporation) derives (and is expected to continue to derive) a sufficiently small amount of revenue such that, in the opinion of the Board of Directors, rent from such tenant would not adversely affect the Corporation’s ability to qualify as a REIT, shall not be treated as a tenant of the Corporation); and

(iii) such Person agrees that any violation or attempted violation of such representations or undertakings (or other action which is contrary to the restrictions contained in Sections 6.1.1 through 6.1.6) will result in such Shares being automatically transferred to a Charitable Trust in accordance with Sections 6.1.1(b) and 6.2.

(b) Prior to granting any exception pursuant to Section 6.1.7(a), the Board of Directors may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form

Exhibit 3.1

and substance satisfactory to the Board of Directors in its sole discretion, as it may deem necessary or advisable in order to determine or ensure the Corporation’s status as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board of Directors may impose such conditions or restrictions as it deems appropriate in connection with granting such exception.

(c) Subject to Section 6.1.1(a)(ii), an underwriter which participates in a public offering or a private placement of Shares (or securities convertible into or exchangeable for Shares) may Beneficially Own or Constructively Own Shares (or securities convertible into or exchangeable for Shares) in excess of the Aggregate Share Ownership Limit, the Common Share Ownership Limit or both such limits, but only to the extent necessary to facilitate such public offering or private placement.

(d) The Board of Directors may only reduce the Excepted Holder Limit for an Excepted Holder: (1) with the written consent of such Excepted Holder at any time, or (2) pursuant to the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted Holder Limit shall be reduced to a percentage that is less than the Common Share Ownership Limit.

Section 6.1.8. Increase in Aggregate Share Ownership and Common Share Ownership Limits . Subject to Section 6.1.2(a)(ii), the Board of Directors may from time to time increase the Common Share Ownership Limit and the Aggregate Share Ownership Limit for one or more Persons and decrease the Common Share Ownership Limit and the Aggregate Share Ownership Limit for all other Persons; provided , however , that the decreased Common Share Ownership Limit and/or Aggregate Share Ownership Limit will not be effective for any Person whose percentage ownership in Shares is in excess of such decreased Common Share Ownership Limit and/or Aggregate Share Ownership Limit until such time as such Person’s percentage of Share equals or falls below the decreased Common Share Ownership Limit and/or Aggregate Share Ownership Limit, but any further acquisition of Shares in excess of such percentage ownership of Shares will be in violation of the Common Share Ownership Limit and/or Aggregate Share Ownership Limit and, provided further , that the new Common Share Ownership Limit and/or Aggregate Share Ownership Limit would not allow five or fewer Persons to Beneficially Own more than 49.9% in value of the outstanding Shares.

Section 6.1.9. Legend . Any certificate representing Shares shall bear substantially the following legend:

The Shares represented by this certificate are subject to restrictions on Beneficial and Constructive Ownership and Transfer for the purpose, among others, of the Corporation’s maintenance of its status as a Real Estate Investment Trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), and for certain other purposes under the Code and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Subject to certain further restrictions and except as expressly provided in the Corporation’s Charter, (i) no Person may Beneficially or Constructively Own Common Shares of the Corporation in excess of 9.8% (in value or number of Shares) of the outstanding Common Shares of the Corporation unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (ii) no Person may Beneficially or Constructively Own Shares of the Corporation in excess of 9.8% of the value of the total outstanding Shares of the Corporation, unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (iii) no Person may Beneficially or Constructively Own Shares that would result in the Corporation being “closely held” under Section 856(h) of the Code or otherwise cause the Corporation to fail to qualify as a REIT; (iv) no Person may

Exhibit 3.1

Transfer Shares if such Transfer would result in Shares of the Corporation being owned by fewer than 100 Persons; and (v) Beneficially Own Shares of the Corporation that would result in 25% or more of any class of Shares of the Corporation being Beneficially Owned by one or more ERISA Investors. Any Person who Beneficially or Constructively Owns or attempts to Beneficially or Constructively Own Shares which cause or will cause a Person to Beneficially or Constructively Own Shares in excess or in violation of the above limitations must immediately notify the Corporation. If any of the restrictions on transfer or ownership are violated, the Shares represented hereby will be automatically transferred to a Charitable Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Corporation may redeem Shares upon the terms and conditions specified by the Board of Directors in its sole discretion if the Board of Directors determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may be void ab initio . All capitalized terms in this legend have the meanings defined in the Corporation’s Charter, as the same may be amended from time to time, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Shares of the Corporation on request and without charge. Requests for such a copy may be directed to the Secretary of the Corporation at its principal office.

Instead of the foregoing legend, the certificate may state that the Corporation will furnish a full statement about certain restrictions on transferability to a stockholder on request and without charge. In the case of uncertificated Shares, the Corporation will send the holder of such Shares a written statement of the information otherwise required on certificates upon request.

Section 6.2 Transfer of Shares in Trust .

Section 6.2.1. Ownership in Trust . Upon any purported Transfer or other event described in Section 6.1.1(b) that would result in a transfer of Shares to a Charitable Trust, such Shares shall be deemed to have been transferred to the Charitable Trustee as trustee of a Charitable Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Charitable Trustee shall be deemed to be effective as of the close of business on the Business Day prior to the purported Transfer or other event that results in the transfer to the Charitable Trust pursuant to Section 6.1.1(b). The Charitable Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporation and any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Corporation as provided in Section 6.2.6.

Section 6.2.2. Status of Shares Held by the Charitable Trustee . Shares held by the Charitable Trustee shall continue to be issued and outstanding Shares of the Corporation. The Prohibited Owner shall have no rights in the Shares held by the Charitable Trustee. The Prohibited Owner shall not benefit economically from ownership of any Shares held in trust by the Charitable Trustee, shall have no rights to dividends or other Distributions and shall not possess any rights to vote or other rights attributable to the Shares held in the Charitable Trust.

Section 6.2.3. Dividend and Voting Rights . The Charitable Trustee shall have all voting rights and rights to dividends or other Distributions with respect to Shares held in the Charitable Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other Distribution paid prior to the discovery by the Corporation that Shares have been transferred to the Charitable Trustee shall be paid with respect to such Shares to the Charitable Trustee upon demand and any dividend or other Distribution

Exhibit 3.1

authorized but unpaid shall be paid when due to the Charitable Trustee. Any dividends or Distributions so paid over to the Charitable Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to Shares held in the Charitable Trust and, subject to Maryland law, effective as of the date that Shares have been transferred to the Charitable Trustee, the Charitable Trustee shall have the authority (at the Charitable Trustee’s sole discretion) (i) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Corporation that Shares have been transferred to the Charitable Trustee and (ii) to recast such vote in accordance with the desires of the Charitable Trustee acting for the benefit of the Charitable Beneficiary; provided , however , that if the Corporation has already taken irreversible corporate action, then the Charitable Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article VI, until the Corporation has received notification that Shares have been transferred into a Charitable Trust, the Corporation shall be entitled to rely on its share transfer and other stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of stockholders.

Section 6.2.4. Sale of Shares by Charitable Trustee . Within 20 days of receiving notice from the Corporation that Shares have been transferred to the Charitable Trust, the Charitable Trustee shall sell the Shares held in the Charitable Trust to a Person, designated by the Charitable Trustee, whose ownership of the Shares will not violate the ownership limitations set forth in Section 6.1.1(a). Upon such sale, the interest of the Charitable Beneficiary in the Shares sold shall terminate and the Charitable Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 6.2.4. The Prohibited Owner shall receive the lesser of (1) the price paid by the Prohibited Owner for the Shares or, if the Prohibited Owner did not give value for the Shares in connection with the event causing the Shares to be held in the Charitable Trust ( e.g. , in the case of a gift, devise or other such transaction), the Market Price of the Shares on the day of the event causing the Shares to be held in the Charitable Trust and (2) the price per share received by the Charitable Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the Shares held in the Charitable Trust. The Charitable Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and Distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Charitable Trustee pursuant to Section 6.2.3 of this Article VI. Any net sales proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. lf, prior to the discovery by the Corporation that Shares have been transferred to the Charitable Trustee, such Shares are sold by a Prohibited Owner, then (i) such Shares shall be deemed to have been sold on behalf of the Charitable Trust and (ii) to the extent that the Prohibited Owner received an amount for such Shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 6.2.4, such excess shall be paid to the Charitable Trustee upon demand.

Section 6.2.5. Purchase Right in Shares Transferred to the Charitable Trustee . Shares transferred to the Charitable Trustee shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in such transfer to the Charitable Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) and (ii) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation may reduce the amount payable to the Prohibited Owner by the amount of dividends and distributions which has been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Charitable Trustee pursuant to Section 6.2.3 of this Article VI. The Corporation may pay the amount of such reduction to the Charitable Trustee for

Exhibit 3.1

the benefit of the Charitable Beneficiary. The Corporation shall have the right to accept such offer until the Charitable Trustee has sold the Shares held in the Charitable Trust pursuant to Section 6.2.4. Upon such a sale to the Corporation, the interest of the Charitable Beneficiary in the Shares sold shall terminate and the Charitable Trustee shall distribute the net proceeds of the sale to the Prohibited Owner.

Section 6.2.6. Designation of Charitable Beneficiaries . By written notice to the Charitable Trustee, the Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Charitable Trust such that (i) Shares held in the Charitable Trust would not violate the restrictions set forth in Section 6.1.1(a) in the hands of such Charitable Beneficiary and (ii) each such organization must be described in Section 501(C)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

Section 6.3 Restrictions on Ownership and Transfer of Shares by Benefit Plans .

Section 6.3.1. Ownership Limitations . Notwithstanding any other provisions in the Charter, if and to the extent that any class or series of Shares do not constitute “publicly offered securities” (as defined in Section 2510.3-101 of the Department of Labor regulations, or any successor regulation thereto), then Benefit Plan Investors may not, on any date, hold, individually or in the aggregate, 25% or more of the value of such class or series of Shares. For purposes of determining whether Benefit Plan Investors hold, individually or in the aggregate, 25% or more of the value of such class or series of Shares, the value of Shares of such class held by any director or officer of the Corporation, or any other Person who has discretionary authority or control with respect to the assets of the Corporation, as defined in the Plan Asset Regulations, shall be disregarded.

Section 6.3.2. Remedies for Violations by Benefit Plan Investors . If the Board or its designee (including any duly authorized committee of the Board) shall at any time determine in good faith that (a) a Transfer or other event has taken place that results in a violation of Section 6.3.1 or will otherwise result in the underlying assets and property of the Corporation becoming assets of any ERISA Investor or (b) that a Person intends to acquire or has attempted to acquire or hold Shares in a manner that will result in a violation of Section 6.3.1 or will otherwise result in the underlying assets and property of the Corporation becoming assets of any ERISA Investor, the Board of directors or its designee shall take such action as it deems advisable to mitigate, prevent or cure the consequences that might result to the Corporation from such Transfer or other event, including, without limitation, refusing to give effect to or preventing such Transfer or event through redemption of such Shares or refusal to give effect to the Transfer or event on the books of the Corporation or instituting proceedings to enjoin such Transfer or other event.

Section 6.3.3. Information on Benefit Plan Status . Any Person who acquires or attempts or intends to acquire or hold Shares shall provide to the Corporation such information as the Corporation may request in order to determine whether such acquisition or holding has resulted or will result in a violation of Section 6.3.1 or otherwise has resulted or will result in the underlying assets and property of the Corporation becoming assets of any ERISA Investor, including the name and address of any Person for whom a nominee holds Shares and whether the underlying assets of such Person include assets of any Benefit Plan Investor.

Section 6.4 Settlement . Nothing in this Article VI shall preclude the settlement of any transaction entered into through the facilities of the NYSE or any other national securities exchange or automated

Exhibit 3.1

inter-dealer quotation system. The fact that the settlement of any transaction occurs shall not negate the effect of any other provision of this Article VI and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article VI.

Section 6.5 Enforcement . The Corporation is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of this Article VI.

Section 6.6 Non-Waiver . No delay or failure on the part of the Corporation or the Board of Directors in exercising any right hereunder shall operate as a waiver of any right of the Corporation or the Board of Directors, as the case may be, except to the extent specifically waived in writing.

ARTICLE VII

PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS

Section 7.1 Number of Directors . The business and affairs of the Corporation shall be managed under the direction of the Board of Directors. The number of Directors of the Corporation (the “Directors”) shall be six, which number may be increased or decreased from time to time pursuant to the Bylaws; provided , however , that the total number of Directors shall not be fewer than three nor more than 15. A majority of the Board will be Independent Directors except for a period of up to 60 days after the death, removal or resignation of an Independent Director pending the election of such Independent Director’s successor.

The Corporation elects that, except as may be provided by the Board of Directors in setting the terms of any class or series of Shares, any and all vacancies on the Board of Directors may be filled only by the affirmative vote of a majority of the remaining Directors in office, even if the remaining Directors do not constitute a quorum, and any Director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred. Notwithstanding the foregoing sentence, Independent Directors shall nominate replacements for vacancies among the Independent Directors’ positions.

Section 7.2 Experience . Until Listing, each Director shall have at least three years of relevant experience demonstrating the knowledge and experience required to successfully acquire and manage the type of assets being acquired by the Corporation and at least one of the Independent Directors shall have three years of relevant real estate experience.

Section 7.3 Committees . The Board may establish such committees as it deems appropriate, in its discretion, provided that the majority of the members of each committee are Independent Directors.

Section 7.4 Term: Current Board . Except as may otherwise be provided in the terms of any Preferred Shares issued by the Corporation, each Director shall hold office for one year, until the next annual meeting of Stockholders and until his or her successor is duly elected and qualifies. Directors may be elected to an unlimited number of successive terms. The names of the current Directors who shall serve until the next annual meeting of Stockholders and until their successors are duly elected and qualify are as follows:

Exhibit 3.1

Scott D. Peters
W. Bradley Blair, II
Maurice J. DeWald
Warren D. Fix
Larry L. Mathis
Gary T. Wescombe

Section 7.5 Fiduciary Obligations . The Directors and officers serve in a fiduciary capacity to the Corporation and have a fiduciary duty to the Stockholders of the Corporation.

Section 7.6 Extraordinary Actions . Notwithstanding any provision of law permitting or requiring any action to be taken or approved by the affirmative vote of the holders of Shares entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable by the Board of Directors and taken or approved by the affirmative vote of holders of Shares entitled to cast a majority of all the votes entitled to be cast on the matter.

Section 7.7 Authorization by Board of Stock Issuance . The Board of Directors may authorize the issuance from time to time of Shares of any class or series, whether now or hereafter authorized, or securities or rights convertible into Shares of any class or series, whether now or hereafter authorized, for such consideration as the Board of Directors may deem advisable (or without consideration in the case of a stock split or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in the Charter or the Bylaws.

Section 7.8 Preemptive Rights and Appraisal Rights . Except as may be provided by the Board of Directors in setting the terms of classified or reclassified Shares pursuant to Section 5.4 or as may otherwise be provided by contract approved by the Board of Directors, no holder of Shares shall, as such holder, have any preemptive right to purchase or subscribe for any additional Shares or any other security of the Corporation which it may issue or sell. Holders of Shares shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board of Directors, upon the affirmative vote of a majority of the Board of Directors, shall determine that such rights apply, with respect to all or any classes or series of stock, to one or more transactions occurring after the date of such determination in connection with which holders of such Shares would otherwise be entitled to exercise such rights.

Section 7.9 Determinations by Board . The determination as to any of the following matters, made in good faith by or pursuant to the direction of the Board of Directors consistent with the Charter, shall be final and conclusive and shall be binding upon the Corporation and every holder of Shares: the amount of the net income of the Corporation for any period and the amount of assets at any time legally available for the payment of dividends, redemption of Shares or the payment of other Distributions on Shares; the amount of paid-in surplus, net assets, other surplus, annual or other cash flow, funds from operations, net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); any interpretation of the terms, preferences, conversion or other rights, voting powers or rights, restrictions,

Exhibit 3.1

limitations as to dividends or Distributions, qualifications or terms or conditions of redemption of any class or series of Shares; the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Corporation or any Shares; the number of Shares of any class of the Corporation; any matter relating to the acquisition, holding and disposition of any assets by the Corporation; or any other matter relating to the business and affairs of the Corporation or required or permitted by applicable law, the Charter or Bylaws or otherwise to be determined by the Board of Directors.

Section 7.10 REIT Qualification . The Board of Directors shall use its reasonable best efforts to take such actions as are necessary or appropriate to preserve the status of the Corporation as a REIT; provided , however , if the Board of Directors determines that it is no longer in the best interests of the Corporation to continue to be qualified as a REIT, the Board of Directors may revoke or otherwise terminate the Corporation’s REIT election pursuant to Section 856(g) of the Code. The Board of Directors also may determine that compliance with any restriction or limitation on stock ownership and transfers set forth in Article VII is no longer required for REIT qualification. No Director, officer, employee or agent of the Corporation shall be liable for any act or omission resulting, in the loss of tax benefits under the Code, except to the extent provided in Section 12.2 hereof.

Section 7.11 Resignation: Removal of Directors . Any Director may resign by delivering notice to the Board of Directors, effective upon delivery to the Board of Directors of such notice or upon any future date specified in the notice. Subject to the rights of holders of one or more classes or series of Preferred Shares to elect or remove one or more Directors, any Director, or the entire Board of Directors, may be removed from office at any time, but only by the affirmative vote of at least a majority of the votes entitled to be cast generally in the election of Directors.

Section 7.12 Ratification of Fifth Articles of Amendment and Restatement by the Independent Directors . These Fifth Articles of Amendment and Restatement have been reviewed and ratified by a majority of the Independent Directors at a meeting of the Board of Directors consisting of a majority of Independent Directors.

ARTICLE VIII

FEES; EXPENSES

Section 8.1 Incentive Fees . The Corporation may pay any Person an interest in the gain from the Sale of Assets, for which full consideration is not paid in cash or property of equivalent value, provided the amount or percentage of such interest is reasonable. Such an interest in gain from the Sale of Assets shall be considered presumptively reasonable prior to Listing if it does not exceed 15% of the balance of such net proceeds remaining after payment to Stockholders, in the aggregate, of an amount equal to 100% of the Invested Capital, plus an amount equal to at least six percent (6%) of the Invested Capital per annum cumulative. The payment of Incentive Fees to multiple Persons shall be allowed provided that such fees are distributed by a proportional method reasonably designed to reflect the value added to the Corporation’s assets by each respective Person.

Section 8.2 Organizational and Offering Expenses Limitation . The total amount of all Organizational and Offering Expenses shall be reasonable and shall in no event prior to Listing exceed 15% of the Gross Proceeds of each Offering.

Exhibit 3.1

Section 8.3 Total Operating Expenses . Prior to Listing, the Corporation’s Total Operating Expenses during any four consecutive fiscal quarters shall not exceed the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such year. The Independent Directors shall have the responsibility of limiting Total Operating Expenses to amounts that do not exceed the 2%/25% Guidelines unless they have made a finding that, based on such unusual and non-recurring factors that they deem sufficient; a higher level of expenses (an “Excess Amount”) is justified. Within 60 days after the end of any fiscal quarter of the Corporation for which there is an Excess Amount which the Independent Directors conclude was justified, there shall be sent to the Stockholders a written disclosure of such fact, together with an explanation of the factors the Independent Directors considered in determining that such Excess Amount was justified. Any such finding and the reasons in support thereof shall be reflected in the minutes of the meetings of the Board.

Section 8.4 Acquisition Fees and Expenses . The total of all Acquisition Fees and Acquisition Expenses shall be reasonable, and prior to Listing shall not exceed an amount equal to 6% of the Contract Purchase Price, or, in the case of a Mortgage, 6% of the funds advanced; provided , further , that a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in the transaction may approve fees and expenses in excess of this limit if they determine the transaction to be commercially competitive, fair and reasonable to the Corporation.

Section 8.5 Total Fees and Expenses . The Independent Directors are responsible for reviewing the fees and expenses of the Corporation at least annually or with sufficient frequency to determine that the expenses incurred are reasonable in light of the investment performance of the Corporation, its Net Assets, its Net Income and the fees and expenses of other comparable unaffiliated REITs. Each such determination shall be reflected in the minutes of the meetings of the Board.

ARTICLE IX

INVESTMENT POLICIES AND LIMITATIONS

Section 9.1 Review of Investment Policies . The Independent Directors shall review the investment policies of the Corporation with sufficient frequency (not less often than annually) to determine that the policies being followed by the Corporation are in the best interests of its Stockholders. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of the Board.

Section 9.2 Certain Permitted Investments . Until Listing, the following investment limitations shall apply:

(a) The Corporation may invest in Assets, as defined in Article IV hereof.

(b) The Corporation may invest in Joint Ventures with one or more Directors or any Affiliate, only if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction, approve such investment as being fair and reasonable to the Corporation and on substantially the same terms and conditions as those received by the other joint venturers.

Exhibit 3.1

(c) Subject to any limitations in Section 9.3, the Corporation may invest in equity securities only if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction approve such investment as being fair, competitive and commercially reasonable.

Section 9.3 Investment Limitations . Until Listing, the following investment limitations shall apply. In addition to other investment restrictions imposed by the Board from time to time, consistent with the Corporation’s objective of qualifying as a REIT, the following shall apply to the Corporation’s investments:

(a) Not more than ten percent of the Corporation’s total assets shall be invested in Unimproved Real Property or mortgage loans on Unimproved Real Property.

(b) The Corporation shall not invest in commodities or commodity future contracts. This limitation is not intended to apply to futures contracts, when used solely for hedging purposes in connection with the Corporation’s ordinary business of investing in real estate assets and mortgages.

(c) The Corporation shall not invest in or make any Mortgage unless an appraisal is obtained concerning the underlying property except for those loans insured or guaranteed by a government or government agency. In cases in which a majority of Independent Directors so determine, and in all cases in which the transaction is with the officers, Directors or any Affiliates thereof, such appraisal of the underlying property must be obtained from an Independent Appraiser. Such appraisal shall be maintained in the Corporation’s records for at least five years and shall be available for inspection and duplication by any Stockholder for a reasonable charge. In addition to the appraisal, a mortgagee’s or owner’s title insurance policy or commitment as to the priority of the mortgage or condition of the title must be obtained.

(d) The Corporation shall not make or invest in any Mortgage, including a construction loan, on any one property if the aggregate amount of all mortgage loans outstanding on the property, including the loans of the Corporation, would exceed an amount equal to 85% of the appraised value of the property as determined by appraisal unless substantial justification exists because of the presence of other underwriting criteria. For purposes of this subsection, the “aggregate amount of all mortgage loans outstanding on the property, including the loans of the Corporation” shall include all interest (excluding contingent participation in income and/or appreciation in value of the mortgaged property), the current payment of which may be deferred pursuant to the terms of such loans, to the extent that deferred interest on each loan exceeds five percent per annum of the principal balance of the loan.

(e) The Corporation shall not invest in indebtedness secured by a mortgage on real property which is subordinate to the lien or other indebtedness of any officer, Director or Affiliate of the Corporation.

(f) The Corporation shall not issue (A) equity Securities redeemable solely at the option of the holder (except that Stockholders may offer their Common Shares to the Corporation pursuant to any repurchase plan adopted by the Board on terms outlined in the Prospectus relating to any Offering, as such plan is thereafter amended in accordance with its terms); (B) debt Securities unless the historical debt service coverage (in

Exhibit 3.1

the most recently completed fiscal year) as adjusted for known changes is sufficient to properly service that higher level of debt; (C) equity Securities on a deferred payment basis or under similar arrangements; or (D) options or warrants to the officers, the Directors or any Affiliate thereof except on the same terms as such options or warrants are sold to the general public. Options or warrants may be issued to Persons other than the officers, the Directors or any Affiliate thereof, but not at exercise prices less than the fair market value of the underlying Securities on the date of grant and not for consideration (which may include services) that in the judgment of the Independent Directors has a market value less than the value of such option or warrant on the date of grant. Options or warrants issuable to the officers, the Directors or any Affiliate thereof shall not exceed ten percent of the outstanding Shares on the date of grant. The voting rights per Share (other than any publicly held Share) sold in a private offering shall not exceed the voting rights which bear the same relationship to the voting rights of a publicly held Share as the consideration paid to the Corporation for each privately offered Share bears to the book value of each outstanding publicly held Share.

(g) A majority of the Directors or of the members of a duly authorized committee of the Board of Directors shall authorize the consideration to be paid for each Asset, ordinarily based on the fair market value of the Asset. If a majority of the Independent Directors on the Board of Directors or such duly authorized committee determine, or if the Asset is acquired from an officer, a Director or their Affiliates, such fair market value shall be determined by a qualified Independent Appraiser selected by such Independent Directors.

(h) The aggregate Leverage shall be reasonable in relation to the Net Assets and shall be reviewed by the Board at least quarterly. The maximum amount of such Leverage in relation to Net Assets shall not exceed 300%. Notwithstanding the foregoing, Leverage may exceed such limit if any excess in borrowing over such level is approved by a majority of the Independent Directors. Any such excess borrowing shall be disclosed to Stockholders in the next quarterly report of the Corporation following such borrowing, along with justification for such excess.

(i) The Corporation will continually review its investment activity to attempt to ensure that it is not classified as an “investment company” under the Investment Company Act of 1940, as amended.

(j) The Corporation will not make any investment that the Corporation believes will be inconsistent with its objective of remaining qualified as a REIT unless and until the Board determines, in its sole discretion, that REIT qualification is not in the best interests of the Corporation.

(k) The Corporation shall not invest in real estate contracts of sale unless such contracts of sale are in recordable form and appropriately recorded in the chain of title.

(l) The Corporation shall not engage in the business of underwriting or the agency distribution of securities issued by other Persons.

ARTICLE X

CONFLICTS OF INTEREST

Section 10.1 Sales and Leases to Corporation . The Corporation may purchase or lease an Asset or Assets from an officer, a Director or any Affiliate thereof upon a finding by a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction that such transaction is fair and

Exhibit 3.1

reasonable to the Corporation and at a price to the Corporation no greater than the cost of the Asset to such officer, Director or Affiliate, or, if the price to the Corporation is in excess of such cost, that substantial justification for such excess exists and such excess is reasonable. In no event shall the purchase price of any Property to the Corporation exceed its current appraised value.

Section 10.2 Sales and Leases to Officers, Directors or Affiliates . An officer, Director or Affiliate thereof may purchase or lease Assets from the Corporation if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction determine that the transaction is fair and reasonable to the Corporation. In no event shall the purchase price of any Property purchased from the Corporation by an officer, Director or Affiliate thereof be less than its current appraised value.

Section 10.3 Other Transactions .

(a) The Corporation shall not engage in any other transaction with an officer, a Director or any Affiliates thereof unless a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in such transaction approve such transaction as fair and reasonable to the Corporation and on terms and conditions not less favorable to the Corporation than those available from unaffiliated third parties.

(b) The Corporation shall not make loans to an officer, a Director or any Affiliates thereof except Mortgages pursuant to Section 9.3(c) hereof or loans to wholly owned subsidiaries of the Corporation. The officers, the Directors and any Affiliates thereof shall not make loans to the Corporation, or to joint ventures in which the Corporation is a co-venturer, unless approved by a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in such transaction as fair, competitive, and commercially reasonable, and no less favorable to the Corporation than comparable loans between unaffiliated parties.

ARTICLE XI

STOCKHOLDERS

Section 11.1 Meetings . There shall be an annual meeting of the Stockholders, to be held on such date and at such time and place as shall be determined by or in the manner prescribed in the Bylaws, at which the Directors shall be elected and any other proper business may be conducted; provided that such annual meeting will be held upon reasonable notice and within a reasonable period (not less than 30 days) following delivery of the annual report. A quorum shall be 50% of the then outstanding Shares entitled to vote. Special meetings of Stockholders may be called in the manner provided in the Bylaws, including by the president or by a majority of the Directors or a majority of the Independent Directors, and prior to Listing shall be called by an officer of the Corporation upon written request of Stockholders holding in the aggregate not less than ten percent of the outstanding Shares entitled to be voted on any issue proposed to be considered at any such special meeting. Notice of any special meeting of Stockholders shall be given as provided in the Bylaws, and the special meeting shall be held not less than 15 days nor more than 60 days after the delivery of such notice. If the meeting is called by written request of Stockholders as described in this Section 11.1, the special meeting shall be held at the time and place specified in the Stockholder request; provided , however , that if none is so specified, at such time and place convenient to the Stockholders. If there are no Directors, the officers of the Corporation shall promptly call a special

Exhibit 3.1

meeting of the Stockholders entitled to vote for the election of successor Directors. Any meeting may be adjourned and reconvened as the Board may determine or as otherwise provided in the Bylaws.

Section 11.2 Voting Rights of Stockholders . Subject to the provisions of any class or series of Shares then outstanding and the mandatory provisions of any applicable laws or regulations, the Stockholders shall be entitled to vote only on the following matters: (a) election or removal of Directors, without the necessity for concurrence by the Board, as provided in Sections 11.1, 7.4 and 7.11 hereof; (b) amendment of the Charter as provided in Article XIII hereof, without the necessity for the concurrence by the Board; (c) liquidation or dissolution of the Corporation, without the necessity for the concurrence by the Board; (d) merger or consolidation of the Corporation, or the sale or other disposition of all or substantially all of the Corporation’s assets; and (e) such other matters with respect to which the Board of Directors has adopted a resolution declaring that a proposed action is advisable and directing that the matter be submitted to the Stockholders for approval or ratification. Except with respect to the foregoing matters, no action taken by the Stockholders at any meeting shall in any way bind the Board. Without the approval of a majority of the Shares entitled to vote on the matter, the Board may not prior to Listing (i) amend the Charter to materially and adversely affect the rights, preferences and privileges of the Stockholders; (ii) amend provisions of the Charter relating to director qualifications, fiduciary duties, liability and indemnification, conflicts of interest, investment policies or investment restrictions; (iii) liquidate or dissolve the Corporation other than before the initial investment in property; (iv) sell all or substantially all of the Corporation’s assets other than in the ordinary course of business; or (v) cause the merger or reorganization of the Corporation.

Section 11.3 Voting Limitations on Shares Held by Directors and Affiliates . With respect to Shares owned by any Director or any of their Affiliates, neither such Director(s) nor any of their Affiliates may prior to Listing vote or consent, on matters submitted to the Stockholders regarding the removal of such Director(s) or any of their Affiliates or any transaction between the Corporation and any of them. In determining the requisite percentage in interest of Shares necessary to approve a matter on which such Director(s) and any of their Affiliates may not vote or consent, any Shares owned by any of them shall not be included.

Section 11.4 11.4 Right of Inspection . Any Stockholder and any designated representative thereof shall be permitted access to the records of the Corporation to which it is entitled under applicable law at all reasonable times, and may inspect and copy any of them for a reasonable charge. Inspection of the Corporation’s books and records by the office or agency administering the securities laws of a jurisdiction shall be provided upon reasonable notice and during normal business hours.

Section 11.5 Access to Stockholder List . An alphabetical list of the names, addresses and telephone numbers of the Stockholders, along with the number of Shares held by each of them (the “Stockholder List”), shall be maintained as part of the books and records of the Corporation and prior to Listing shall be available for inspection by any Stockholder or the Stockholder’s designated agent at the home office of the Corporation upon the request of the Stockholder. The Stockholder List shall be updated at least quarterly to reflect changes in the information contained therein. A copy of such list shall be mailed to any Stockholder so requesting within ten days of receipt by the Corporation of the request. The copy of the Stockholder List shall be printed in alphabetical order, on white paper, and in a readily readable type size (in no event smaller than ten-point type). The Corporation may impose a reasonable charge for expenses incurred in reproduction pursuant to the Stockholder request. A

Exhibit 3.1

Stockholder may request a copy of the Stockholder List in connection with matters relating to Stockholders’ voting rights, and the exercise of Stockholder rights under federal proxy laws.

If an officer or the Board neglects or refuses to exhibit, produce or mail a copy of the Stockholder List as requested, the officer and/or the Board, as the case may be, shall be liable to any Stockholder requesting the list for the costs, including reasonable attorneys’ fees, incurred by that Stockholder for compelling the production of the Stockholder List, and for actual damages suffered by any Stockholder by reason of such refusal or neglect. It shall be a defense that the actual purpose and reason for the requests for inspection or for a copy of the Stockholder List is to secure such list of Stockholders or other information for the purpose of selling such list or copies thereof, or of using the same for a commercial purpose other than in the interest of the applicant as a Stockholder relative to the affairs of the Corporation. The Corporation may require the Stockholder requesting the Stockholder List to represent that the list is not requested for a commercial purpose unrelated to the Stockholder’s interest in the Corporation. The remedies provided hereunder to Stockholders requesting copies of the Stockholder List are in addition, to and shall not in any way limit, other remedies available to Stockholders under federal law, or the laws of any state.

Section 11.6 Reports . Prior to Listing, the Directors, including the Independent Directors, shall take reasonable steps to ensure that the Corporation shall cause to be prepared and mailed or delivered to each Stockholder as of a record date after the end of the fiscal year and each holder of other publicly held Securities within 120 days after the end of the fiscal year to which it relates an annual report for each fiscal year that shall include: (i) financial statements prepared in accordance with generally accepted accounting principles which are audited and reported on by independent certified public accountants; (ii) the ratio of the costs of raising capital during the period to the capital raised; (iii) the Total Operating Expenses of the Corporation, stated as a percentage of Average Invested Assets and as a percentage of its Net Income; (iv) a report from the Independent Directors that the policies being followed by the Corporation are in the best interests of its Stockholders and the basis for such determination; and (v) separately stated, full disclosure of all material tunas, factors and circumstances surrounding any and all transactions involving the Corporation, Directors, officers and any Affiliate thereof occurring in the year for which the annual report is made, and the Independent Directors shall be specifically charged with a duty to examine and comment in the report on the fairness of such transactions.

Section 11.7 Tender Offers . If any Person makes a tender offer, including, without limitation, a “mini-tender” offer, such Person must comply with all of the provisions set forth in Regulation 14D of the Exchange Act, including, without limitation, disclosure and notice requirements, that would be applicable if the tender offer was for more than five percent of the outstanding Shares; provided , however , that, unless otherwise required by the Exchange Act, such documents are not required to be filed with the SEC. In addition, any such Person must provide notice to the Corporation at least ten business days prior to initiating any such tender offer. If any Person initiates a tender offer without complying with the provisions set forth above (a “Non-Compliant Tender Offer”), the Corporation, in its sole discretion, shall have the right to redeem such non-compliant Person’s Shares and any Shares acquired in such tender offer (collectively, the “Tendered Shares”) at the lesser of (i) the price then being paid per Share of Common Stock purchased in the Corporation’s latest Offering at full purchase price (not discounted for commission reductions or for reductions in sale price permitted pursuant to the Reinvestment Plan), (ii) the fair market value of the Shares as determined by an independent valuation obtained by the Corporation or (iii) the lowest tender offer price offered in such Non-Compliant Tender Offer. The Corporation may purchase such Tendered

Exhibit 3.1

Shares upon delivery of the purchase price to the Person initiating such Non-Compliant Tender Offer and, upon such delivery, the Corporation may instruct any transfer agent to transfer such purchased Shares to the Corporation. In addition, any Person who makes a Non-Compliant Tender Offer shall be responsible for all expenses incurred by the Corporation in connection with the enforcement of the provisions of this Section 11.7, including, without limitation, expenses incurred in connection with the review of all documents related to such tender offer and expenses incurred in connection with any purchase of Tendered Shares by the Corporation. The Corporation maintains the right to offset any such expenses against the dollar amount to be paid by the Corporation for the purchase of Tendered Shares pursuant to this Section 11.7. In addition to the remedies provided herein, the Corporation may seek injunctive relief, including, without limitation, a temporary or permanent restraining order, in connection with any Non-Compliant Tender Offer. This Section 11.7 shall be of no force or effect with respect to any Shares that are then Listed.

ARTICLE XII

LIABILITY LIMITATION AND INDEMNIFICATION

Section 12.1 Limitation of Stockholder Liability . No Stockholder shall be liable for any debt, claim, demand, judgment or obligation of any kind of, against or with respect to the Corporation by reason of his being a Stockholder, nor shall any Stockholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to any Person in connection with the Corporation’s assets or the affairs of the Corporation by reason of his being a Stockholder.

Section 12.2 Limitation of Director and Officer Liability; Indemnification.

(a) Subject to the conditions set forth under Maryland law or in paragraph (c) or (d) below, no Director or officer of the Corporation shall be liable to the Corporation or its Stockholders for money damages. Neither the amendment nor repeal of this Section 12.2(a), nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this Section 12.2(a), shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

(b) Subject to the conditions set forth under Maryland law or in paragraph (c) or (d) below, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any individual who is a present or former Director or officer of the Corporation and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (ii) any individual who, while a Director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner or trustee of such corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity. The Corporation may, with the approval of the Board of Directors or any duly authorized committee thereof, provide such indemnification and advance for expenses to a Person who served a predecessor of the Corporation in any of the capacities described in (i) or (ii) above and to any employee or agent of the Corporation or a predecessor of the Corporation. The Board may take such action as is necessary to carry out this

Exhibit 3.1

Section 12.2(b). No amendment of the Charter or repeal of any of its provisions shall limit or eliminate the right of indemnification provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal.

(c) Prior to Listing, notwithstanding anything to the contrary contained in paragraph (a) or (b) above, the Corporation shall not provide for indemnification of a Director (the “Indemnitee”) for any liability or loss suffered by him or her and the Corporation shall not provide that an Indemnitee be held harmless for any loss or liability suffered by the Corporation, unless all of the following conditions are met:

(i) The Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Corporation;

(ii) The Indemnitee was acting on behalf of or performing services for the Corporation;

(iii) Such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnitee is a Director (other than an Independent Director) or (B) gross negligence or willful misconduct, in the case that the Indemnitee is an Independent Director; and

(iv) Such indemnification or agreement to hold harmless is recoverable only out of Net Assets and not from the Stockholders.

(d) Prior to Listing, notwithstanding anything to the contrary contained in paragraph (a) or (b) above, the Corporation shall not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnitee, (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which Securities were offered or sold as to indemnification for violations of securities laws.

Section 12.3 Payment of Expenses . Prior to Listing, the Corporation shall pay or reimburse reasonable legal expenses and other costs incurred by an Indemnitee in advance of final disposition of a proceeding only if all of the following are satisfied: (i) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Corporation, (ii) the Indemnitee provides the Corporation with written affirmation of the Indemnitee’s good faith belief that the Indemnitee has met the standard of conduct necessary for indemnification by the Corporation as authorized by Section 12.2 hereof, (iii) the legal proceeding was initiated by a third party who is not a Stockholder or, if by a Stockholder of the Corporation acting in his or her capacity as such, a court of competent jurisdiction approves such advancement, and (iv) the Indemnitee provides the Corporation with a written agreement to repay the amount paid or reimbursed by the Corporation, together with the applicable legal rate of interest thereon, if it is ultimately determined that the Indemnitee did not comply with the requisite standard of conduct and is not entitled to indemnification.

Exhibit 3.1

Section 12.4 Express Exculpatory Clauses in Instruments . Neither the Stockholders nor the Directors, officers, employees or agents of the Corporation shall be liable under any written instrument creating an obligation of the Corporation by reason of their being Stockholders, Directors, officers, employees or agents of the Corporation, and all Persons shall look solely to the Corporation’s assets for the payment of any claim under or for the performance of that instrument. The omission of the foregoing exculpatory language from any instrument shall not affect the validity or enforceability of such instrument and shall not render any Stockholder, Director, officer, employee or agent liable thereunder to any third party, nor shall the Directors or any officer, employee or agent of the Corporation be liable to anyone as a result of such omission.

ARTICLE XIII

AMENDMENTS

The Corporation reserves the right from time to time to make any amendment to the Charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the Charter, of any Shares. All rights and powers conferred by the Charter on Stockholders, Directors and officers are granted subject to this reservation. Except for those amendments permitted to be made without Stockholder approval under Maryland law or by specific provision in the Charter, any amendment to the Charter shall be valid only if approved by the affirmative vote of a majority of all votes entitled to be cast on the matter, including without limitation, (1) any amendment which would adversely affect the rights, preferences and privileges of the Stockholders and (2) any amendment to Sections 7.2, 7.5 and 7.11 of Article VII, Article IX, Article X, Article XII and Article XIV hereof and this Article XIII (or any other amendment of the Charter that would have the effect of amending such sections).

ARTICLE XIV

ROLL-UP TRANSACTIONS

In connection with any proposed Roll-Up Transaction prior to Listing, an appraisal of all of the Corporation’s assets shall be obtained from a competent Independent Appraiser. The Corporation’s assets shall be appraised on a consistent basis, and the appraisal shall be based on the evaluation of all relevant information and shall indicate the value of the assets as of a date immediately prior to the announcement of the proposed Roll-Up Transaction. The appraisal shall assume an orderly liquidation of the assets over a twelve-month period. The terms of the engagement of the Independent Appraiser shall clearly state that the engagement is for the benefit of the Corporation and the Stockholders. A summary of the appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to Stockholders in connection with a proposed Roll-Up Transaction. If the appraisal will be included in a Prospectus used to offer securities of the Roll-Up Entity, the appraisal shall be filed with the SEC and the states as an exhibit to the registration statement. In connection with a proposed Roll-Up Transaction prior to Listing, the Person sponsoring the Roll-Up Transaction shall offer to Stockholders who vote against the proposed Roll-Up Transaction the choice of:

(a) accepting the securities of a Roll-Up Entity offered in the proposed Roll-Up Transaction; or

(b) one of the following:

Exhibit 3.1

(i) remaining as Stockholders and preserving their interests therein on the same terms and conditions as existed previously; or

(ii) receiving cash in an amount equal to the Stockholder’s pro rata share of the appraised value of the net assets of the Corporation.

The Corporation is prohibited from participating in any proposed Roll-Up Transaction prior to Listing:

(a) that would result in the Stockholders having voting rights in a Roll-Up Entity that are less than the rights provided for in Sections 11.1 and 11.2 hereof;

(b) that includes provisions that would operate as a material impediment to, or frustration of, the accumulation of Shares by any purchaser of the securities of the Roll-Up Entity (except to the minimum extent necessary to preserve the tax status of the Roll-Up Entity), or which would limit the ability of an investor to exercise the voting rights of its securities of the Roll-Up Entity on the basis of the number of Shares held by that investor;

(c) in which investor’s rights to access of records of the Roll-Up Entity will be less than those described in Sections 11.4 and 11.5 hereof; or

(d) in which any of the costs of the Roll-Up Transaction would be borne by the Corporation if the Roll-Up Transaction is not approved by the Stockholders.

THIRD : The amendment to and restatement of the charter of the Corporation as hereinabove set forth has been duly advised by the Board of Directors and approved by the Stockholders of the Corporation as required by law.

FOURTH : The current address of the principal office of the Corporation is as set forth in Article III of the foregoing amendment and restatement of the charter.

FIFTH : The name and address of the Corporation’s current resident agent is as set forth in Article III of the foregoing amendment and restatement of the charter.

SIXTH : The number of directors of the Corporation and the names of those currently in office are as set forth in Article VII of the foregoing amendment and restatement of the charter.

SEVENTH : The total number of shares of stock which the Corporation had authority to issue immediately prior to the foregoing amendment and restatement of the charter of the Corporation was 1,200,000,000, consisting of 1,000,000,000 shares of Common Stock, $0.01 par value per share, all of which were classified as Class A Common Stock, and 200,000,000 shares of Preferred Stock, $0.01 par value per share. The aggregate par value of all authorized shares of stock having par value was $12,000,000.

EIGHTH : The total number of shares of stock which the Corporation has authority to issue pursuant to the foregoing amendment and restatement of the charter of the Corporation is 1,200,000,000, consisting

Exhibit 3.1

of 1,000,000,000 shares of Common Stock, $0.01 par value per share, all of which are classified as Class A Common Stock, and 200,000,000 shares of Preferred Stock, $0.01 par value per share. The aggregate par value of all shares of stock having par value is $12,000,000.

NINTH : The undersigned Chief Executive Officer acknowledges these Fifth Articles of Amendment and Restatement to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned Chief Executive Officer acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

IN WITNESS WHEREOF, the Corporation has caused these Fifth Articles of Amendment and Restatement to be signed in its name and on its behalf by its Chief Executive Officer and attested to by its Secretary on this 10th day of March, 2014.




ATTEST:	HEALTHCARE TRUST OF AMERICA, INC.
/S/ Kelli/s/ Kellie S. Pruitt	/S/ Sco/s/ Scott D. Peters	(SEAL)
Name: Kellie S. Pruitt	Name: Scott D. Peters
Title: Secretary	Title: Chief Executive Officer

Exhibit 4.1

DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

The following is a summary of the general terms of the securities of Healthcare Realty Trust Incorporated, a Maryland corporation (“HR,” “we,” “our,” “us” and “our company”), registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This description does not purport to be complete and is subject to, and qualified in its entirety by, reference to the Maryland General Corporation Law (the ”MGCL”) and HR’s Fifth Articles of Amendment and Restatement, as amended, supplemented and corrected from time to time (the “Charter”), and Fourth Amended and Restated Bylaws, as amended, supplemented and corrected from time to time (the “Bylaws”). Copies of our Charter and Bylaws are filed as exhibits to our most recent Annual Report on Form 10-K with the United States Securities and Exchange Commission (the “SEC”), and are incorporated herein by reference.

General

Under the Charter, HR has authority to issue an aggregate of 1,200,000,000 shares of capital stock. Of the total shares authorized, 1,000,000,000 shares are classified as common stock with a par value of $0.01 per share, all of which are classified as Class A common stock, and 200,000,000 shares are classified as preferred stock with a par value of $0.01 per share.

Under Maryland law, HR’s stockholders are generally not personally liable for HR’s debts and obligations solely as a result of their status as stockholders.

Listing

The Class A common stock is listed on the NYSE under the symbol “HR.”

Transfer Agent and Registrar

The transfer agent and registrar for the common stock is Computershare Investor Services.

Common Stock

All shares of HR’s common stock have equal rights as to earnings, assets, dividends and voting. Subject to the Charter restrictions on the transfer and ownership of HR’s stock and the preferential rights of holders of any other class or series of HR’s stock, distributions may be made to the holders of the common stock if, as and when authorized by the board of directors out of funds legally available therefor. Shares of common stock generally have no preemptive, preferential exchange, conversion, sinking fund or redemption rights and are freely transferable, except where their transfer is restricted by federal and state securities laws, by contract or by the restrictions in the Charter. Holders of shares of common stock have no appraisal rights unless the board of directors determines that appraisal rights apply, with respect to all or any classes or series of stock, to one or more transactions occurring after the date of such determination in connection with which stockholders would otherwise be entitled to exercise appraisal rights. In the event of HR’s liquidation, dissolution or winding up, each share of common stock would be entitled to share ratably in all of HR’s assets that are legally available for distribution after payment of or adequate provision for all of HR’s known debts and other liabilities and subject to any preferential rights of holders of HR’s preferred stock (the “preferred stock”), if any preferred stock is outstanding at such time, and the Charter restrictions on the transfer and ownership of HR’s stock. Subject to the Charter restrictions on the transfer and ownership of HR’s stock and

except as may otherwise be specified in the terms of any class or series of common stock, each share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as may be provided with respect to any other class or series of stock, the holders of common stock will possess exclusive voting power. Holders of all classes of common stock will vote together as a single class.

Under Maryland law, a Maryland corporation generally cannot amend its charter, consolidate or merge with, or convert to, another entity, sell all or substantially all of its assets, engage in a share exchange or dissolve unless the action is advised by the board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast with respect to such matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast with respect to such matter. As permitted by Maryland law, the Charter provides that any of these actions may be approved by the affirmative vote of stockholders entitled to cast a majority of all the votes entitled to be cast with respect to such matter. In addition, all other matters to be voted on by stockholders, other than a contested election of directors (in which case directors shall be elected by the vote of a plurality of the votes cast by the stockholders entitled to vote on the election of directors present in person or by proxy at a meeting of stockholders duly called and at which a quorum is present) and amendment of the Bylaws by stockholders (which requires approval by a majority of all the votes entitled to be cast on the matter), must be approved by a majority of the votes cast by stockholders, voting together as a single class, at a meeting at which a quorum is present, subject to any voting rights granted to holders of any then outstanding preferred stock. There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock can elect all of HR’s directors.

Preferred Stock

The Charter authorizes the board of directors to designate and issue one or more classes or series of preferred stock without stockholder approval, and to establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption of each class or series of preferred stock so issued. Because the board of directors has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any class or series of preferred stock preferences, powers and rights senior to the rights of holders of common stock. If HR ever created and issued preferred stock with a distribution preference over common stock, payment of any distribution preferences of outstanding preferred stock would reduce the amount of funds available for the payment of distributions on the common stock. Further, holders of preferred stock are normally entitled to receive a liquidation preference in the event HR liquidates, dissolves or winds up before any payment is made to the common stockholders, likely reducing the amount common stockholders would otherwise receive upon such an occurrence. In addition, under certain circumstances, the issuance of preferred stock may render more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of HR’s securities, or the removal of incumbent management.

Power to Reclassify Unissued Shares of Stock

The Charter authorizes the board of directors to classify and reclassify any unissued shares of common or preferred stock into other classes or series of shares of stock, so long as the aggregate number of all shares of all classes or series of stock that the board of directors has authority to issue does not exceed the total number of authorized shares of common and preferred stock as provided in the Charter. Prior to the issuance of shares of each class or series, the board of directors is required by Maryland law and by the Charter to set, subject to the Charter restrictions on transfer and ownership of shares of stock, the terms, preferences, conversion or other rights,

voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series. Therefore, the board of directors could authorize the issuance of shares of common or preferred stock with terms and conditions that could have the effect of delaying, deferring or preventing a change in control or other transaction that might involve a premium price for HR’s shares of common stock or otherwise be in the best interests of HR’s stockholders. No shares of preferred stock are presently outstanding, and we have no present plans to issue any shares of preferred stock.

Power to Increase or Decrease Authorized Shares of Common Stock and Issue Additional Shares of Common and Preferred Stock

We believe that the power of the board of directors to amend the Charter from time to time to increase or decrease the number of authorized shares of stock or the number of authorized shares of stock of any class or series, to issue additional authorized but unissued shares of common or preferred stock and to classify or reclassify unissued shares of common or preferred stock and thereafter to issue such classified or reclassified shares of stock will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. The additional classes or series, as well as the shares of common stock, will be available for issuance without further action by HR’s stockholders, unless such action is required by applicable law or the rules of any stock exchange or market system on which HR’s securities may be listed or traded. Therefore, the board of directors could authorize HR to issue a class or series that could, depending upon the terms of the particular class or series, delay, defer or prevent a change in control or other transaction that might involve a premium price for HR’s shares of common stock or otherwise be in the best interests of HR’s stockholders.

Restrictions on Ownership and Transfer of Shares

In order for us to continue to qualify as a real estate investment trust (“REIT”), not more than 50% of HR’s outstanding shares may be owned by any five or fewer individuals during the last half of any taxable year. In addition, the outstanding shares must be owned by 100 or more persons during at least 335 days of a 12-month taxable year or during a proportionate part of a shorter taxable year. We may prohibit certain acquisitions and transfers of shares so as to ensure our continued qualification as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). However, we cannot assure you that this prohibition will be effective.

The Charter contains a limitation on ownership that prohibits any individual, entity or group from directly or indirectly acquiring beneficial ownership of more than 9.8% of the value of HR’s then aggregate outstanding shares of stock of any class or series (which includes common stock and any preferred stock HR may issue) or more than 9.8% of the value or number of shares, whichever is more restrictive, of HR’s then outstanding common stock.

Any attempted transfer of HR’s stock which, if effective, would result in HR’s stock being beneficially owned by fewer than 100 persons will be null and void. Any attempted transfer of HR’s stock which, if effective, would result in violation of the ownership limits discussed above or in HR being “closely held” under Section 856(h) of the Code or otherwise failing to qualify as a REIT will cause the number of shares causing the violation (rounded up to the nearest whole share) to be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries, and the proposed transferee will not acquire any rights in the shares. The automatic transfer will be deemed to be effective as of the close of business on the business day prior to the date of the transfer. We will designate a trustee of the share trust that will not be affiliated with us. We will also name one or more charitable organizations as a beneficiary of the share trust. Shares-in-trust will remain issued and outstanding shares and will be entitled to the same rights and privileges as all other shares of the same class or series. The trustee will receive all distributions on the shares-in-trust and will hold such distributions in trust for the benefit of the

beneficiary. The trustee will vote all shares-in-trust during the period they are held in trust and, subject to Maryland law, will have the authority to rescind as void any vote cast by the proposed transferee prior to our discovery that the shares have been transferred to the share trust and to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary.

The trustee of the trust will be empowered to sell the shares-in-trust to a qualified person selected by the trustee and to distribute to the applicable prohibited owner an amount equal to the lesser of (1) the sales proceeds received by the trust for such shares-in-trust or (2) (A) if the prohibited owner was a transferee for value, the price paid by the prohibited owner for such shares-in-trust or (B) if the prohibited owner was not a transferee or was a transferee but did not give value for the shares-in-trust, the market price on the day of the event causing the shares to be held in trust. In addition, all shares-in-trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price per share in the transaction that created such shares-in-trust (or, in the case of a devise or gift, the market price of such shares at the time of such devise or gift) and (2) the market price on the date we, or our designee, accept such offer. The trustee or we may reduce the amount payable to the prohibited owner by the amount of dividends and other distributions that have been paid to the prohibited owner and are owed by the prohibited owner to the trustee. Any amount received by the trustee in excess of the amount to be paid to the prohibited owner will be distributed to the beneficiary of the trust.

Any person who acquires shares in violation of the foregoing restrictions or who would have owned shares that resulted in a transfer to any such trust is required to give immediate written notice to us of such event. Any person who proposes or attempts such a transaction must give us at least 15 days prior written notice. Such person shall provide to us such other information as we may request in order to determine the effect, if any, of such transfer on our qualification as a REIT.

The foregoing restrictions continue to apply until the board of directors determines it is no longer in our best interests to attempt to, or to continue to, qualify as a REIT or that compliance is no longer required for REIT qualification.

The board of directors, in its sole discretion, may exempt (prospectively or retroactively) a person from the limitation on ownership of more than 9.8% of the value of HR’s then aggregate outstanding shares of stock of any class or series (which includes common stock and any preferred stock HR may issue) or more than 9.8% of the value or number of shares, whichever is more restrictive, of HR’s then outstanding common stock. However, the board of directors may not exempt any person whose ownership of HR’s outstanding stock would result in HR being “closely held” within the meaning of Section 856(h) of the Code or otherwise would result in our failing to qualify as a REIT. In order to be considered by the board of directors for exemption, a person also must not own, directly or indirectly, an interest in any of our tenants (or a tenant of any entity which we own or control) that would cause us to own, directly or indirectly, more than a 9.9% interest in the tenant. The person seeking an exemption must represent to the satisfaction of the board of directors that it will not violate these two restrictions. The person also must agree that any violation or attempted violation of these restrictions will result in the automatic transfer of the shares of stock causing the violation to the share trust.

Any stockholder of record who owns more than 5.0% (or such lower level as required by the Code and the regulations thereunder) of the outstanding shares during any taxable year will be asked to deliver a statement or affidavit setting forth the name and address of such record owner, the number of shares beneficially owned by such stockholder, a description of the manner in which such shares are held and such additional information regarding the beneficial ownership of the shares as we may request in order to determine the effect, if any, of such actual or beneficial ownership on our qualification as a REIT and to ensure compliance with the ownership limits. In

addition, any person who is a beneficial owner or constructive owner of shares of our stock and any person (including the stockholder of record) who is holding shares of our stock for a beneficial owner or constructive owner must, on request, disclose to us in writing such information as we may request in order to determine our status as a REIT or to comply, or determine our compliance, with the requirements of any taxing or governmental authority.

Number of Directors; Vacancies

The Charter provides that the number of directors will not be fewer than three, nor more than 15. The Bylaws provide that a majority of HR’s entire board of directors may at any time increase or decrease the number of directors, provided that the total number of directors will not be fewer than the minimum number required by the MGCL or the Charter, nor more than 15. Currently there are 13 directors serving on the board of directors.

The Charter and Bylaws provide that, except as may be provided by the board of directors in setting the terms of any class or series of stock, any and all vacancies on the board of directors may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any individual elected to fill such vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is duly elected and qualifies. Notwithstanding the foregoing, the Charter provides that independent directors will nominate replacements for vacancies among the independent directors’ positions.

Annual Elections

Each of HR’s directors is elected by HR’s stockholders to serve for a one-year term and until his or her successor is duly elected and qualifies. Directors in uncontested elections are elected by the affirmative vote of a majority of the total votes cast for and against such nominee at a duly called meeting of stockholders at which a quorum is present, and directors in contested elections are elected by a plurality of all votes cast.

Removal of Directors

The Charter provides that, subject to the rights, if any, of holders of any class or series of preferred stock to elect or remove one or more directors, a director may be removed by the affirmative vote of stockholders entitled to cast at least a majority of the votes entitled to be cast generally in the election of directors.

Calling of Special Meetings of Stockholders

The Charter and Bylaws provide that special meetings of stockholders may be called by the board of directors, the independent directors, the chairman of the board of directors or HR’s president or chief executive officer and must be called by HR’s secretary to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast a majority of all the votes entitled to be cast on such matter at such meeting (subject to the stockholders’ compliance with certain procedures set forth in the Bylaws).

Action by Stockholders

According to the Bylaws, the affirmative vote of a majority of the total votes cast for and against such nominee at a meeting of stockholders duly called at which a quorum is present shall be required to elect a director in uncontested elections, and a majority of the votes cast at a meeting of stockholders duly called at which a quorum is present shall be sufficient to approve any other

matter which may properly come before a meeting, unless more than a majority of votes cast is required by the MGCL, the Charter or the Bylaws. These provisions, combined with the requirements of the Bylaws regarding advance notice of nominations and other business to be considered at a meeting of stockholders discussed below and the calling of a stockholder-requested special meeting of stockholders discussed above, may have the effect of delaying consideration of a stockholder proposal. Common stockholders may take action without a meeting only if a unanimous consent setting forth the action is given in writing or by electronic transmission by each common stockholder entitled to vote on the matter.

Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals

The Bylaws provide that, with respect to an annual meeting of stockholders, nominations of individuals for election to the board of directors and the proposal of other business to be considered by stockholders may be made only (i) pursuant to our notice of meeting, (ii) by or at the direction of the board of directors or (iii) by a stockholder who was a stockholder of record both at the time of giving of notice by such stockholder as provided for in the Bylaws and at the time of the annual meeting and who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with the advance notice procedures and provided the information required by the Bylaws. With respect to special meetings of stockholders, only the business specified in the notice of the meeting may be brought before the meeting. Nominations of individuals for election to the board of directors at a special meeting may be made only (i) by or at the direction of the board of directors or (ii) provided that the special meeting has been called in accordance with the Bylaws for the purpose of electing directors, by a stockholder who was a stockholder of record both at the time of giving of notice by such stockholder as provided for in the Bylaws and at the time of the special meeting and who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice provisions and provided the information required by the Bylaws.

The purpose of requiring stockholders to give HR advance notice of nominations and other business is to afford the board of directors a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by the board of directors, to inform stockholders and make recommendations about such nominees or business. Although the Bylaws do not give the board of directors any power to disapprove stockholder nominations for the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to HR and its stockholders.

Approval of Extraordinary Corporate Actions, Amendment of Charter

Proxy Access

The Bylaws include provisions permitting, subject to certain eligibility, procedural and disclosure requirements, qualifying stockholders, or a qualifying group of no more than 20 stockholders, who have maintained continuous ownership of at least three percent of our outstanding shares of Class A common stock for at least three years to require us to include in our proxy materials for an annual meeting of stockholders a number of director nominees not to exceed the greater of two nominees or 20 percent of the number of directors up for election.

Amendment of Bylaws

The board of directors has the power to adopt, alter or repeal any provision of the Bylaws and to make new Bylaws. In addition, stockholders may alter or repeal any provision of the Bylaws and adopt new Bylaws, in each case to the extent permitted by and consistent with the Charter, the Bylaws and applicable law, with the approval of a majority of all the votes entitled to be cast on the matter.

No Stockholder Rights Plan

HR has no stockholder rights plan. In the future, HR does not intend to adopt a stockholder rights plan unless HR’s stockholders approve in advance the adoption of a plan or, if adopted by the board of directors, HR submits the stockholder rights plan to HR’s stockholders for a ratification vote within 12 months of adoption or the plan will terminate.

Business Combinations

Under the MGCL, certain “business combinations” (including a merger, consolidation, share exchange or, in certain circumstances, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and an interested stockholder (defined as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock or an affiliate or associate of the corporation who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then-outstanding stock of the corporation), or an affiliate of an interested stockholder, in either case after the date on which the corporation had 100 or more beneficial owners of stock, are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. The board of directors may provide that its approval is subject to compliance with any terms and conditions determined by it.

Any such business combination entered into after the five-year prohibition must be recommended by the board of directors of such corporation and approved by the affirmative vote of at least (i) 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation and (ii) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected, unless, among other conditions, the corporation’s common stockholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares.

These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a board of directors prior to the time that the interested stockholder becomes an interested stockholder. The board of directors has adopted a resolution exempting

any business combination between HR and any other person or entity from the business combination provisions of the MGCL, provided that such business combination is first approved by the board of directors.

As a result, any person may be able to enter into business combinations with HR that may not be in the best interests of our stockholders without compliance by HR with the supermajority vote requirements and other provisions of the statute. This resolution, however, may be altered or repealed in whole or in part at any time. If this resolution is repealed, or the board of directors does not otherwise approve a business combination, the statute may discourage others from trying to acquire control of HR and increase the difficulty of consummating any offer.

Control Share Acquisitions

The MGCL provides that holders of “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved at a special meeting by the affirmative vote of stockholders entitled to cast two-thirds of the votes entitled to be cast on the matter, excluding shares of stock of a corporation in respect of which any of the following persons is entitled to exercise or direct the exercise of the voting power of shares of stock of the corporation in the election of directors: (i) a person who makes or proposes to make a control share acquisition, (ii) an officer of the corporation or (iii) an employee of the corporation who is also a director of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such shares of stock previously acquired by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power: (i) one-tenth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more of all voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition of issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses), may compel the board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or, if a meeting of stockholders is held at which the voting rights of such shares are considered and not approved, as of the date of the meeting. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.

The control share acquisition statute does not apply to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transactions or to acquisitions approved or exempted by the charter or bylaws of the corporation.

The Bylaws exempt any and all acquisitions of shares of HR’s stock from the control share acquisition statute. According to the Bylaws, this exemption may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided in any successor bylaw, apply to any prior or subsequent share acquisition.

Certain Elective Provisions of Maryland Law

Title 3, Subtitle 8 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Securities Exchange Act of 1934, as amended, and at least three independent directors who are not officers or employees of the corporation or affiliated with an acquiring person, to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any of (i) a classified board, (ii) a two-thirds vote requirement for removing a director, (iii) a requirement that the number of directors be fixed only by vote of the directors, (iv) a requirement that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred, or (v) a majority requirement for the calling of a stockholder-requested special meeting of stockholders. Pursuant to Subtitle 8, HR has elected that, except as may be provided by the board of directors in setting the terms of any class or series of stock, any and all vacancies on the board of directors may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any individual elected to fill such vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is duly elected and qualifies. Through provisions in the Charter and Bylaws unrelated to Subtitle 8, HR requires, unless called by the board of directors, HR’s independent directors, the chairman of the board of directors or HR’s president or chief executive officer, the written request of stockholders entitled to cast a majority of the votes entitled to be cast on any matter that may properly be considered at a meeting of stockholders to call a special meeting to act on such matter. Pursuant to a resolution adopted by the board of directors, HR is prohibited from classifying the board under Subtitle 8 unless stockholders entitled to vote generally in the election of directors approve a proposal to repeal such resolution by the affirmative vote of a majority of the votes cast on the matter. However, the board of directors could elect to provide for any of the remaining provisions.

Anti-Takeover Effect of Certain Provisions of Maryland Law and of The Charter and Bylaws

The provisions of the MGCL, the Charter and the Bylaws described above could delay, defer or prevent a transaction or a change in control of HR that might involve a premium price for holders of the common stock or otherwise be in the best interests of HR’s stockholders. Likewise, if the board of directors were to opt in to the business combination provisions of the MGCL or certain of the provisions of Subtitle 8 of Title 3 of the MGCL or if the provision in the Bylaws opting out of the control share acquisition provisions of the MGCL were amended or rescinded, these provisions of the MGCL could have similar anti-takeover effects.

Interested Director and Officer Transactions

Pursuant to the MGCL, a contract or other transaction between HR and a director or between HR and any other corporation or other entity in which any of HR’s directors is a director or has a material financial interest is not void or voidable solely on the grounds of such common directorship or interest, the presence of such director at the meeting at which the contract or transaction is authorized, approved or ratified or the counting of the director’s vote in favor thereof, if:

• the fact of the common directorship or interest is disclosed or known to the board of directors or a committee of the board of directors, and the board of directors or such committee authorizes, approves or ratifies the transaction or contract by the affirmative vote of a majority of disinterested directors, even if the disinterested directors constitute less than a quorum;

• the fact of the common directorship or interest is disclosed or known to HR’s stockholders entitled to vote thereon, and the transaction or contract is authorized, approved or ratified by a majority of the votes cast by the stockholders entitled to vote, excluding votes cast by the interested director or corporation or other entity; or

• the transaction or contract is fair and reasonable to HR.

Purchase and Lease of Assets. The Charter provides that HR may purchase or lease assets from an officer or director or affiliate thereof upon a finding by a majority of directors, including a majority of independent directors, not otherwise interested in the transaction that such transaction is fair and reasonable to HR and at a price no greater than the cost of the asset to such officer, director or affiliate thereof or, if the price to HR is in excess of such cost, that substantial justification for such excess exists and such excess is reasonable. In no event shall the purchase price of any property to HR exceed its current appraised value. In addition, the Charter provides that an officer, director or affiliate thereof may purchase or lease assets from HR only upon a finding by a majority of directors, including a majority of independent directors, not otherwise interested in the transaction that such transaction is fair and reasonable to HR and at a price no less than its current appraised value.

Other Transactions. The Charter also provides that we will not engage in any other transaction with an officer, director or affiliate thereof unless a majority of directors, including a majority of independent directors, not otherwise interested in such transaction approve such transaction as fair and reasonable to HR and on terms and conditions not less favorable to HR than those available from unaffiliated third parties. The Charter prohibits HR from making loans to an officer, director or affiliate thereof except certain mortgages or loans to HR’s wholly owned subsidiaries. In addition, HR’s officers and directors and any affiliates thereof may not make loans to HR, or to joint ventures in which HR is a co-venturer, unless approved by a majority of directors, including a majority of independent directors, not otherwise interested in such transaction as fair, competitive, and commercially reasonable, and no less favorable to HR than comparable loans between unaffiliated parties.

Related Party Transactions Policy. HR’s related party transactions policy is included as part of HR’s code of ethics. Under HR’s code of ethics, all transactions involving directors, officers and employees involving a conflict of interest must be approved by a majority of the board of directors (including a majority of the disinterested independent directors) as fair and reasonable to HR and on terms not less favorable to HR than those available from third parties, even if less than a quorum. Where appropriate in the judgment of the disinterested directors, the board of directors may obtain a fairness opinion or engage independent counsel to represent the interests of non-affiliated security holders, although the board of directors will have no obligation to do so.

Indemnification and Limitation of Directors’ and Officers’ Liability

Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages, except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty that is established by a final judgment

and is material to the cause of action. The Charter contains a provision that eliminates such liability to the maximum extent permitted by Maryland law.

The Charter and Bylaws provide that, to the maximum extent permitted by Maryland law in effect from time to time, HR is obligated to indemnify any present or former director or officer or any individual who, while a director or officer of HR and at our request, serves or has served another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner, member, manager or trustee, from and against any claim or liability to which that individual may become subject or which that individual may incur by reason of his or her service in any such capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding, without requiring a preliminary determination of the ultimate entitlement to indemnification.

The Charter and Bylaws also permit HR to indemnify and advance expenses to any person who served a predecessor of HR in any of the capacities described above and to any employee or agent of our company or a predecessor of our company.

The MGCL requires a corporation (unless its charter provides otherwise, which the Charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or are threatened to be made a party by reason of their service in those or other capacities unless it is established that:

• the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty;

• the director or officer actually received an improper personal benefit in money, property or services; or

• in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

However, under the MGCL, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by or in the right of the corporation, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses.

In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of:

• a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation; and

• a written undertaking by the director or officer or on the director’s or officer’s behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director or officer did not meet the standard of conduct.

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling HR for liability arising under the Securities Act of 1933, as amended (the “Securities Act”), HR has been informed that in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

HR has entered into indemnification agreements with each of HR’s directors and executive officers whereby HR indemnifies such directors and executive officers against all expenses and liabilities, and agrees to pay or reimburse reasonable expenses in advance of final disposition of a proceeding if such director or executive officer is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity to the fullest extent permitted by Maryland law, subject to limited exceptions. These indemnification agreements also provide that upon an application for indemnity by a director or executive officer to a court of appropriate jurisdiction, such court may order HR to indemnify such director or executive officer.

REIT Qualification

The Charter provides that the board of directors may revoke or otherwise terminate HR’s REIT election, without approval of HR’s stockholders, if it determines that it is no longer in HR’s best interests to continue to qualify as a REIT.

Exhibit 22.1

LIST OF SUBSIDIARY ISSUERS OF GUARANTEED SECURITIES

As of June 30, 2023, Healthcare Realty Trust Incorporated is the guarantor of the outstanding debt securities of its subsidiaries, as listed below.


Debt Instrument			Issuer
3.88% Senior Notes due 2025			Healthcare Realty Holdings, L.P.
3.50% Senior Notes due 2026			Healthcare Realty Holdings, L.P.
3.75% Senior Notes due 2027			Healthcare Realty Holdings, L.P.
3.63% Senior Notes due 2028			Healthcare Realty Holdings, L.P.
3.10% Senior Notes due 2030			Healthcare Realty Holdings, L.P.
2.40% Senior Notes due 2030			Healthcare Realty Holdings, L.P.
2.05% Senior Notes due 2031			Healthcare Realty Holdings, L.P.
2.00% Senior Notes due 2031			Healthcare Realty Holdings, L.P.

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302

Exhibit 31.1

Healthcare Realty Trust Incorporated

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Todd J. Meredith, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Healthcare Realty Trust Incorporated;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	August 8, 2023
		/s/ TODD J. MEREDITH
		Todd J. Meredith
		President and Chief Executive Officer

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302

Exhibit 31.2

Healthcare Realty Trust Incorporated

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, J. Christopher Douglas, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Healthcare Realty Trust Incorporated;

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	August 8, 2023
		/s/ J. CHRISTOPHER DOUGLAS
		J. Christopher Douglas
		Executive Vice President and Chief Financial Officer

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350 SECTION 906

Exhibit 32

Healthcare Realty Trust Incorporated

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Healthcare Realty Trust Incorporated (the “Company”) on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Todd J. Meredith, President and Chief Executive Officer of the Company, and I, J. Christopher Douglas, Executive Vice President and Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date:	August 8, 2023
		/s/ TODD J. MEREDITH
		Todd J. Meredith
		President and Chief Executive Officer

		/s/ J. CHRISTOPHER DOUGLAS
		J. Christopher Douglas
		Executive Vice President and Chief Financial Officer

Cover Page - shares	6 Months Ended
Cover Page - shares	Jun. 30, 2023	Aug. 04, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-35568
Entity Registrant Name	HEALTHCARE REALTY TRUST INCORPORATED
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	20-4738467
Entity Address, Address Line One	3310 West End Avenue
Entity Address, Address Line Two	Suite 700
Entity Address, City or Town	Nashville
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37203
City Area Code	615
Local Phone Number	269-8175
Title of 12(b) Security	Class A Common Stock, $0.01 par value per share
Trading Symbol	HR
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		380,857,532
Entity Central Index Key	0001360604
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Real estate properties
Land	$ 1,424,453	$ 1,439,798
Buildings and improvements	11,188,821	11,332,037
Lease intangibles	922,029	959,998
Personal property	12,615	11,907
Investment in financing receivable, net	121,315	120,236
Financing lease right-of-use assets	83,016	83,824
Construction in progress	53,311	35,560
Land held for development	78,411	74,265
Total real estate properties	13,883,971	14,057,625
Less accumulated depreciation and amortization	(1,983,944)	(1,645,271)
Total real estate properties, net	11,900,027	12,412,354
Cash and cash equivalents	35,904	60,961
Assets held for sale, net	151	18,893
Operating lease right-of-use assets	333,224	336,983
Investments in unconsolidated joint ventures	327,245	327,248
Goodwill	250,530	223,202
Other assets, net	547,266	469,990
Total assets	13,394,347	13,849,631
Liabilities
Notes and bonds payable	5,340,272	5,351,827
Accounts payable and accrued liabilities	196,147	244,033
Liabilities of assets held for sale	222	437
Operating lease liabilities	278,479	279,895
Financing lease liabilities	73,629	72,939
Other liabilities	219,694	218,668
Total liabilities	6,108,443	6,167,799
Commitments and contingencies
Redeemable non-controlling interests	2,487	2,014
Stockholders' equity
Preferred stock, $.01 par value per share; 200,000 shares authorized; none issued and outstanding	0	0
Class A Common stock, $.01 par value per share; 1,000,000 shares authorized; 380,858 and 380,590 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	3,808	3,806
Additional paid-in capital	9,595,033	9,587,637
Accumulated other comprehensive (loss) income	9,328	2,140
Cumulative net income attributable to common stockholders	1,137,171	1,307,055
Cumulative dividends	(3,565,941)	(3,329,562)
Total stockholders' equity	7,179,399	7,571,076
Non-controlling interest	104,018	108,742
Total equity	7,283,417	7,679,818
Total liabilities and equity	$ 13,394,347	$ 13,849,631

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	200,000,000	200,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, issued (in shares)	380,858,000	380,590,000
Common stock, outstanding (in shares)	380,858,000	380,590,000

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues
Rental income	$ 329,680	$ 140,632	$ 653,773	$ 279,121
Interest income	4,233	1,957	8,448	3,887
Other operating	4,230	2,738	8,847	5,213
Revenues	338,143	145,327	671,068	288,221
Expenses
Property operating	125,395	57,010	247,436	114,474
General and administrative	15,464	10,540	30,399	21,576
Acquisition and pursuit costs	669	1,352	956	2,655
Merger-related costs	(15,670)	7,085	(10,815)	13,201
Depreciation and amortization	183,193	55,731	367,671	109,772
Expenses	309,051	131,718	635,647	261,678
Other income (expense)
Gain on sales of real estate properties	7,156	8,496	8,162	53,280
Interest expense	(65,334)	(15,543)	(129,092)	(29,204)
Loss on extinguishment of debt	0	0	0	(1,429)
Impairment of real estate properties and credit loss reserves	(55,215)	0	(86,637)	25
Equity loss from unconsolidated joint ventures	(17)	(307)	(797)	(652)
Interest and other income (expense), net	592	(125)	1,139	(206)
Total other income (expense)	(112,818)	(7,479)	(207,225)	21,814
Net (loss) income	(83,726)	6,130	(171,804)	48,357
Net loss attributable to non-controlling interests	967	0	1,920	0
Net (loss) income attributable to common stockholders	$ (82,759)	$ 6,130	$ (169,884)	$ 48,357
Basic earnings per common share (in dollars per share)	$ (0.22)	$ 0.04	$ (0.45)	$ 0.32
Diluted earnings per common share (in dollars per share)	$ (0.22)	$ 0.04	$ (0.45)	$ 0.32
Weighted average common shares outstanding - basic (in shares)	378,896,677	149,675,855	378,860,631	149,321,412
Weighted average common shares outstanding - diluted (in shares)	378,896,677	149,738,549	378,860,631	149,396,806
Revenue, Product and Service [Extensible List]	Service [Member]	Service [Member]	Service [Member]	Service [Member]

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Net (loss) income	$ (83,726)	$ 6,130	$ (171,804)	$ 48,357
Interest rate swaps
Reclassification adjustments for (gains) losses included in net income (interest expense)	(3,419)	823	(5,703)	1,909
Gains arising during the period on interest rate swaps	21,523	1,663	12,981	6,822
Other comprehensive income	18,104	2,486	7,278	8,731
Comprehensive (loss) income	(65,622)	8,616	(164,526)	57,088
Less: comprehensive loss attributable to non-controlling interests	745	0	1,830	0
Comprehensive (loss) income attributable to common stockholders	(64,877)	8,616	(162,696)	57,088
Interest Rate Swaps
Interest rate swaps
Gains arising during the period on interest rate swaps	$ 21,523	$ 1,663	$ 12,981	$ 6,822

Condensed Consolidated Statements of Equity - USD ($) $ in Thousands	Total	Total Stockholders’ Equity	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Cumulative Net Income	Cumulative Dividends	Non-controlling Interests
Beginning balance at Dec. 31, 2021	$ 2,185,116	$ 2,185,116	$ 1,505	$ 3,972,917	$ (9,981)	$ 1,266,158	$ (3,045,483)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs	22,771	22,771	7	22,764
Common stock redemptions	(206)	(206)		(206)
Share-based compensation	7,055	7,055	4	7,051
Net (loss) income	48,357	48,357				48,357
Reclassification adjustments for gains included in net income (interest expense)	1,909	1,909			1,909
Gains arising during the period on interest rate swaps	6,822	6,822			6,822
Dividends to common stockholders and distributions to non-controlling interest holders	(93,957)	(93,957)					(93,957)
Ending balance at Jun. 30, 2022	2,177,867	2,177,867	1,516	4,002,526	(1,250)	1,314,515	(3,139,440)	0
Redeemable Non-controlling Interests, beginning balance at Dec. 31, 2021	0
Redeemable Non-controlling Interests, ending balance at Jun. 30, 2022	0
Beginning balance at Mar. 31, 2022	2,212,882	2,212,882	1,516	3,999,060	(3,736)	1,308,385	(3,092,343)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs	110	110		110
Share-based compensation	3,356	3,356		3,356
Net (loss) income	6,130	6,130				6,130
Reclassification adjustments for gains included in net income (interest expense)	823	823			823
Gains arising during the period on interest rate swaps	1,663	1,663			1,663
Dividends to common stockholders and distributions to non-controlling interest holders	(47,097)	(47,097)					(47,097)
Ending balance at Jun. 30, 2022	2,177,867	2,177,867	1,516	4,002,526	(1,250)	1,314,515	(3,139,440)	0
Redeemable Non-controlling Interests, beginning balance at Mar. 31, 2022	0
Redeemable Non-controlling Interests, ending balance at Jun. 30, 2022	0
Beginning balance at Dec. 31, 2022	7,679,818	7,571,076	3,806	9,587,637	2,140	1,307,055	(3,329,562)	108,742
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs	78	78		78
Common stock redemptions	(1,596)	(1,596)	(1)	(1,595)
Share-based compensation	8,916	8,916	3	8,913
Net (loss) income	(171,804)	(169,884)				(169,884)		(1,920)
Reclassification adjustments for gains included in net income (interest expense)	(5,703)	(5,635)			(5,635)			(68)
Gains arising during the period on interest rate swaps	12,981	12,823			12,823			158
Dividends to common stockholders and distributions to non-controlling interest holders	(239,273)	(236,379)					(236,379)	(2,894)
Ending balance at Jun. 30, 2023	7,283,417	7,179,399	3,808	9,595,033	9,328	1,137,171	(3,565,941)	104,018
Redeemable Non-controlling Interests, beginning balance at Dec. 31, 2022	2,014
Redeemable Non-controlling Interests
Contributions from non-controlling interests	473
Redeemable Non-controlling Interests, ending balance at Jun. 30, 2023	2,487
Beginning balance at Mar. 31, 2023	7,464,839	7,358,628	3,808	9,591,194	(8,554)	1,219,930	(3,447,750)	106,211
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs	27	27		27
Common stock redemptions	(112)	(112)		(112)
Share-based compensation	3,924	3,924		3,924
Net (loss) income	(83,726)	(82,759)				(82,759)		(967)
Reclassification adjustments for gains included in net income (interest expense)	(3,419)	(3,377)			(3,377)			(42)
Gains arising during the period on interest rate swaps	21,523	21,259			21,259			264
Dividends to common stockholders and distributions to non-controlling interest holders	(119,639)	(118,191)					(118,191)	(1,448)
Ending balance at Jun. 30, 2023	7,283,417	$ 7,179,399	$ 3,808	$ 9,595,033	$ 9,328	$ 1,137,171	$ (3,565,941)	$ 104,018
Redeemable Non-controlling Interests, beginning balance at Mar. 31, 2023	2,000
Redeemable Non-controlling Interests
Contributions from non-controlling interests	487
Redeemable Non-controlling Interests, ending balance at Jun. 30, 2023	$ 2,487

Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Stockholders' Equity [Abstract]
Dividends to common stockholders (in dollars per share)	$ 0.31	$ 0.31	$ 0.62	$ 0.62

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
OPERATING ACTIVITIES
Net (loss) income	$ (171,804)	$ 48,357
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	367,671	109,772
Other amortization	23,405	2,680
Share-based compensation	8,916	7,055
Amortization of straight-line rent receivable (lessor)	(19,313)	(3,292)
Amortization of straight-line rent on operating leases (lessee)	3,062	756
Gain on sales of real estate properties	(8,162)	(53,280)
Loss on extinguishment of debt	0	1,429
Impairment of real estate properties and credit loss reserves	86,637	(25)
Equity loss from unconsolidated joint ventures	797	652
Distributions from unconsolidated joint ventures	3,031	108
Non-cash interest from financing and notes receivable	(488)	(388)
Changes in operating assets and liabilities:
Other assets, including right-of-use-assets	(17,502)	540
Accounts payable and accrued liabilities	(38,601)	(3,166)
Other liabilities	16,673	2,923
Net cash provided by operating activities	254,322	114,121
INVESTING ACTIVITIES
Acquisitions of real estate	(39,301)	(287,004)
Development of real estate	(17,594)	(7,475)
Additional long-lived assets	(94,013)	(45,631)
Funding of mortgages and notes receivable	(11,503)	0
Investments in unconsolidated joint ventures	(3,824)	(49,599)
Investment in financing receivable	(780)
Investment in financing receivable		498
Proceeds from sales of real estate properties and additional long-lived assets	160,870	108,044
Net cash used in investing activities	(6,145)	(281,167)
FINANCING ACTIVITIES
Net (repayments) borrowings on unsecured credit facility	(31,000)	280,500
Repayments of notes and bonds payable	(1,340)	(18,224)
Redemption of notes and bonds payable	0	(2,184)
Dividends paid	(236,105)	(93,774)
Net proceeds from issuance of common stock	77	22,768
Common stock redemptions	(1,842)	(852)
Distributions to non-controlling interest holders	(2,546)	0
Debt issuance and assumption costs	(438)	0
Payments made on finance leases	(40)	(51)
Net cash (used in) provided by financing activities	(273,234)	188,183
(Decrease) increase in cash and cash equivalents	(25,057)	21,137
Cash and cash equivalents at beginning of period	60,961	13,175
Cash and cash equivalents at end of period	35,904	34,312
Supplemental Cash Flow Information
Interest paid	106,985	26,641
Mortgage note receivable taken in connection with sale of real estate	45,000	0
Invoices accrued for construction, tenant improvements and other capitalized costs	30,956	18,874
Capitalized interest	$ 1,282	$ 145

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Business Overview

Basis of Presentation

Principles of Consolidation


(dollars in thousands)	JUNE 30, 2023
Assets:
Net real estate investments	$	61,980
Cash and cash equivalents	2,107
Receivables and other assets	2,015
Total assets	$	66,102
Liabilities:
Accrued expenses and other liabilities	$	14,058
Total equity	52,044
Total liabilities and equity	$	66,102


(dollars in thousands) ORIGINATION DATE	LOCATION	SOURCE	CARRYING AMOUNT		MAXIMUM EXPOSURE TO LOSS
2021	Houston, TX 1	Note receivable	$	30,445	$	31,150
2021	Charlotte, NC 1	Note receivable	5,691		6,000
2022	Texas 2	Joint venture	64,758		64,758

1Assumed mortgage note receivable in connection with the Merger.

2Includes investments in seven properties.

Use of Estimates in the Condensed Consolidated Financial Statements

Reclassifications

Redeemable Non-Controlling Interests

Asset Impairment

Investments in Leases - Financing Receivables, Net


(dollars in thousands) ORIGINATION DATE	LOCATION	INTEREST RATE	CARRYING VALUE as of JUNE 30, 2023
May 2021	Poway, CA	5.73%	$	113,967
November 2021	Columbus, OH	6.48%	7,348
			$	121,315

Real Estate Notes Receivable


(dollars in thousands)	ORIGINATION	MATURITY	STATED INTEREST RATE		MAXIMUM LOAN COMMITMENT		OUTSTANDING as of JUNE 30, 2023		ALLOWANCE FOR CREDIT LOSSES		FAIR VALUE DISCOUNT AND FEES		CARRYING VALUE as of JUNE 30, 2023
Mezzanine loans
Texas	6/24/2021	6/24/2024	8.00	%	$	54,119	$	54,119	$	(5,196)	$	(3,067)	$	45,856

Mortgage loans
Texas	6/30/2021	12/31/2023	7.00	%	31,150		31,150		—		(705)		30,445
North Carolina	12/22/2021	12/22/2024	8.00	%	6,000		6,000		—		(309)		5,691
Florida	5/17/2022	2/27/2026	6.00	%	65,000		24,556		—		(55)		24,501
California	3/30/2023	3/29/2026	6.00	%	45,000		45,000		—		—		45,000
					147,150		106,706		—		(1,069)		105,637

					$	201,269	$	160,825	$	(5,196)	$	(4,136)	$	151,493

Allowance for Credit Losses

The following table summarizes the Company's allowance for credit losses on real estate notes receivable:


Dollars in thousands	June 30, 2023		December 31, 2022

Allowance for credit losses, beginning of period	$	—	$	—
Credit loss reserves	5,196		—
Allowance for credit losses, end of period	$	5,196	$	—

Interest Income

Income from Lease Financing Receivables

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

Revenue from Contracts with Customers (ASC Topic 606)


	THREE MONTHS ENDED June 30,				SIX MONTHS ENDED June 30,
in thousands	2023		2022		2023		2022
Type of Revenue
Parking income	$	2,370	$	1,919	$	4,761	$	3,672

Management fee income 1	1,597		783		3,570		1,438
Miscellaneous	263		36		516		103
	$	4,230	$	2,738	$	8,847	$	5,213

1 Includes the recovery of certain expenses under the financing receivable as outlined in the management agreement.

Merger with HTA

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Merger with HTA

The implied consideration transferred on the Closing Date is as follows:


Dollars in thousands, except for per share data
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

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	PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE		CUMULATIVE MEASUREMENT PERIOD ADJUSTMENTS		PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE (as adjusted)
ASSETS
Real estate investments
Land	$	985,926	$	18,359	$	1,004,285
Buildings and improvements	6,960,418		(119,135)		6,841,283
Lease intangible assets(a)	831,920		1,839		833,759
Financing lease right-of-use assets	9,874		3,146		13,020
Construction in progress	10,071		(6,744)		3,327
Land held for development	46,538		—		46,538
Total real estate investments	$	8,844,747	$	(102,535)	$	8,742,212
Assets held for sale, net	707,442		(7,946)		699,496
Investments in unconsolidated joint ventures	67,892		—		67,892
Cash and cash equivalents	26,034		11,403		37,437
Restricted cash	1,123,647		(1,247)		1,122,400
Operating lease right-of-use assets	198,261		16,370		214,631
Other assets, net (b) (c)	209,163		(3,840)		205,323
Total assets acquired	$	11,177,186	$	(87,795)	$	11,089,391

LIABILITIES
Notes and bonds payable	$	3,991,300	$	—	$	3,991,300
Accounts payable and accrued liabilities	1,227,570		17,374		1,244,944
Liabilities of assets held for sale	28,677		(3,939)		24,738
Operating lease liabilities	173,948		10,173		184,121
Financing lease liabilities	10,720		(855)		9,865
Other liabilities	203,210		(8,909)		194,301
Total liabilities assumed	$	5,635,425	$	13,844	$	5,649,269
Net identifiable assets acquired	$	5,541,761	$	(101,639)	$	5,440,122
Non-controlling interest	$	110,702	$	—	$	110,702
Goodwill	$	145,404	$	101,639	$	247,043
(a) The weighted average amortization period for the acquired lease intangible assets is approximately 6 years.
(b) Includes $15.9 million of contractual accounts receivable, which approximates fair value.
(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.

Merger-related Costs

Subsequent Activity

Real Estate Investments

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Real Estate Investments

2023 Acquisition Activity

The following table details the Company's real estate acquisition activity for the six months ended June 30, 2023:


Dollars in thousands	DATE ACQUIRED	PURCHASE PRICE		CASH CONSIDERATION 1		REAL ESTATE		OTHER 2		SQUARE FOOTAGE
Tampa, FL	3/10/23	$	31,500	$	30,499	$	30,596	$	(97)	115,867

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.

Subsequent to June 30, 2023, the Company acquired the following property:


Dollars in thousands	DATE ACQUIRED	PURCHASE PRICE		SQUARE FOOTAGE
Colorado Springs, CO	7/28/23	$	11,450	42,770

Unconsolidated Joint Ventures


	THREE MONTHS ENDED June 30,				SIX MONTHS ENDED June 30,
Dollars in thousands	2023		2022		2023		2022

Investments in unconsolidated joint ventures, beginning of period	$	327,746	$	211,195	$	327,248	$	161,942
New investment during the period 1	—		—		3,824		49,599
Equity loss recognized during the period	(17)		(307)		(797)		(652)

Owner distributions	(484)		(107)		(3,030)		(108)
Investments in unconsolidated joint ventures, end of period	$	327,245	$	210,781	$	327,245	$	210,781

2023 Real Estate Asset Dispositions

The following table details the Company's dispositions for the six months ended June 30, 2023:


Dollars in thousands	DATE DISPOSED	SALE PRICE		CLOSING ADJUSTMENTS		COMPANY-FINANCED MORTGAGE NOTES		NET PROCEEDS		NET REAL ESTATE INVESTMENT		OTHER (INCLUDING RECEIVABLES) 1		GAIN/(IMPAIRMENT)		SQUARE FOOTAGE
Tampa, FL & Miami, FL2	1/12/23	$	93,250	$	(5,875)	$	—	$	87,375	$	87,302	$	(888)	$	961	224,037
Dallas, TX 3	1/30/23	19,210		(141)		—		19,069		18,986		43		40		36,691
St. Louis, MO	2/10/23	350		(18)		—		332		398		—		(66)		6,500
Los Angeles, CA	3/23/23	21,000		(526)		—		20,474		20,610		52		(188)		37,165
Los Angeles, CA 4	3/30/23	75,000		(8,079)		(45,000)		21,921		88,624		(803)		(20,900)		147,078
Los Angeles, CA 5	5/12/23	3,300		(334)		—		2,966		3,268		—		(302)		—
Albany, NY	6/30/23	10,000		(1,229)		—		8,771		2,613		(1,040)		7,198		40,870

Total dispositions		$	222,110	$	(16,202)	$	(45,000)	$	160,908	$	221,801	$	(2,636)	$	(13,257)	492,341

1Includes straight-line rent receivables, leasing commissions and lease inducements.

2Includes two properties, sold in two separate transactions to the same buyer on the same date.

4The Company entered into a mortgage note agreement with the buyer for $45 million.

5The Company sold a land parcel totaling 0.34 acres.

Subsequent to June 30, 2023, the Company disposed of the following property:


Dollars in thousands	DATE DISPOSED	SALES PRICE		SQUARE FOOTAGE
Houston, TX	8/2/23	$	8,320	57,170

Assets Held for Sale


Dollars in thousands	June 30, 2023		December 31, 2022
Balance Sheet data:
Land	$	205	$	1,700
Building and improvements	1,736		15,164
Lease intangibles	2,242		1,986




	4,183		18,850
Accumulated depreciation	(4,183)		—
Real estate assets held for sale, net	—		18,850

Other assets, net	151		43
Assets held for sale, net	$	151	$	18,893

Accounts payable and accrued liabilities	$	222	$	282


Other liabilities	—		155
Liabilities of assets held for sale	$	222	$	437

Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

Lessor Accounting

Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of June 30, 2023 were as follows:


Dollars in thousands	OPERATING
2023	$	467,393
2024	861,323
2025	751,369
2026	648,352
2027	536,874
2028 and thereafter	1,950,019
	$	5,215,330

Lessee Accounting

The Company’s future lease payments (primarily for its 166 non-prepaid ground leases) as of June 30, 2023 were as follows:


Dollars in thousands	OPERATING		FINANCING
2023	$	7,315	$	992
2024	15,011		2,182
2025	14,597		2,218
2026	14,631		2,255
2027	14,701		2,294
2028 and thereafter	929,853		396,398
Total undiscounted lease payments	996,108		406,339
Discount	(717,629)		(332,710)
Lease liabilities	$	278,479	$	73,629

The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2023 and 2022:


	THREE MONTHS ENDED June 30,						SIX MONTHS ENDED June 30,
Dollars in thousands	2023			2022			2023		2022
Operating lease cost
Operating lease expense	$	5,329		$	1,194		$	10,436	$	2,409
Variable lease expense	2,235			1,038			4,371		2,062

Finance lease cost
Amortization of right-of-use assets	387			331			774		503
Interest on lease liabilities	923			765			1,841		1,052
Total lease expense	$	8,874		$	3,328		$	17,422	$	6,026

Other information
Operating cash flows outflows related to operating leases	$	5,230		$	1,799		$	11,190	$	4,596
Operating cash flows outflows related to financing leases	$	541		$	509		$	1,094	$	767
Financing cash flows outflows related to financing leases	$	6		$	—		$	17	$	51
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	—		$	—	$	40,589


Weighted-average years remaining lease term (excluding renewal options) - operating leases	47.3			47.4
Weighted-average years remaining lease term (excluding renewal options) - finance leases	58.4			61.7
Weighted-average discount rate - operating leases	5.8		%	5.6		%
Weighted-average discount rate - finance leases	5.0		%	5.0		%

Leases

Lessor Accounting

Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of June 30, 2023 were as follows:


Dollars in thousands	OPERATING
2023	$	467,393
2024	861,323
2025	751,369
2026	648,352
2027	536,874
2028 and thereafter	1,950,019
	$	5,215,330

Lessee Accounting

The Company’s future lease payments (primarily for its 166 non-prepaid ground leases) as of June 30, 2023 were as follows:


Dollars in thousands	OPERATING		FINANCING
2023	$	7,315	$	992
2024	15,011		2,182
2025	14,597		2,218
2026	14,631		2,255
2027	14,701		2,294
2028 and thereafter	929,853		396,398
Total undiscounted lease payments	996,108		406,339
Discount	(717,629)		(332,710)
Lease liabilities	$	278,479	$	73,629

The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2023 and 2022:


	THREE MONTHS ENDED June 30,						SIX MONTHS ENDED June 30,
Dollars in thousands	2023			2022			2023		2022
Operating lease cost
Operating lease expense	$	5,329		$	1,194		$	10,436	$	2,409
Variable lease expense	2,235			1,038			4,371		2,062

Finance lease cost
Amortization of right-of-use assets	387			331			774		503
Interest on lease liabilities	923			765			1,841		1,052
Total lease expense	$	8,874		$	3,328		$	17,422	$	6,026

Other information
Operating cash flows outflows related to operating leases	$	5,230		$	1,799		$	11,190	$	4,596
Operating cash flows outflows related to financing leases	$	541		$	509		$	1,094	$	767
Financing cash flows outflows related to financing leases	$	6		$	—		$	17	$	51
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	—		$	—	$	40,589


Weighted-average years remaining lease term (excluding renewal options) - operating leases	47.3			47.4
Weighted-average years remaining lease term (excluding renewal options) - finance leases	58.4			61.7
Weighted-average discount rate - operating leases	5.8		%	5.6		%
Weighted-average discount rate - finance leases	5.0		%	5.0		%

Notes and Bonds Payable

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Notes and Bonds Payable

The table below details the Company’s notes and bonds payable as of June 30, 2023 and December 31, 2022.


	MATURITY DATES	BALANCE 1 AS OF				EFFECTIVE INTEREST RATE as of 6/30/2023
Dollars in thousands		6/30/2023		12/31/2022
$1.5 billion Unsecured Credit Facility	10/25	$	354,000	$	385,000	6.05	%


$350 million Unsecured Term Loan 2	7/24	349,499		349,114		6.21	%
$200 million Unsecured Term Loan	5/24	199,786		199,670		6.21	%
$300 million Unsecured Term Loan	10/25	299,947		299,936		6.21	%
$150 million Unsecured Term Loan	6/26	149,569		149,495		6.21	%
$200 million Unsecured Term Loan	7/27	199,432		199,362		6.21	%
$300 million Unsecured Term Loan	1/28	298,079		297,869		6.21	%
Senior Notes due 2025	5/25	249,298		249,115		4.12	%
Senior Notes due 2026	8/26	575,256		571,587		4.94	%
Senior Notes due 2027	7/27	481,615		479,553		4.76	%
Senior Notes due 2028	1/28	297,138		296,852		3.85	%
Senior Notes due 2030	2/30	570,356		565,402		5.30	%
Senior Notes due 2030	3/30	296,579		296,385		2.72	%
Senior Notes due 2031	3/31	295,795		295,547		2.25	%
Senior Notes due 2031	3/31	640,999		632,693		5.13	%
Mortgage notes payable	8/23-12/26	82,924		84,247		3.57%-4.84%
		$	5,340,272	$	5,351,827

1Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable.

2On April 26, 2023, the Company exercised its option to extend the maturity date for one year for a fee of approximately $0.4 million.

Subsequent Changes in Debt Structure

Derivative Financial Instruments

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Risk Management Objective of Using Derivatives

Cash Flow Hedges of Interest Rate Risk

As of June 30, 2023, the Company had 14 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:


EXPIRATION DATE	AMOUNT		WEIGHTED AVERAGE RATE
January 15, 2024	$	200,000	1.21	%
May 1, 2026	100,000		2.15	%
June 1, 2026	150,000		3.83	%
December 1, 2026	150,000		3.84	%
June 1, 2027	150,000		4.13	%
December 1, 2027	250,000		3.79	%
	$	1,000,000	3.17	%

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 June 30, 2023.


	BALANCE AT JUNE 30, 2023
In thousands	BALANCE SHEET LOCATION	FAIR VALUE
Derivatives designated as hedging instruments
Interest rate swaps	Other liabilities	$	(1,248)
Interest rate swaps	Other assets	$	16,046
Total derivatives designated as hedging instruments		$	14,798

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 six months ended June 30, 2023 and 2022 related to the Company's outstanding interest rate swaps.


	(GAIN)/LOSS RECOGNIZED IN AOCI ON DERIVATIVE three months ended June 30,					(GAIN)/LOSS RECLASSIFIED FROM AOCI INTO INCOME three months ended June 30,
In thousands	2023		2022			2023		2022
Interest rate swaps	$	(21,523)	$	(1,663)	Interest expense	$	(3,568)	$	674
Settled treasury hedges	—		—		Interest expense	107		107
Settled interest rate swaps	—		—		Interest expense	42		42
	$	(21,523)	$	(1,663)	Total interest expense	$	(3,419)	$	823


	(GAIN)/LOSS RECOGNIZED IN AOCI ON DERIVATIVE six months ended June 30,					(GAIN)/LOSS RECLASSIFIED FROM AOCI INTO INCOME six months ended June 30,
In thousands	2023		2022			2023		2022
Interest rate swaps	$	(12,981)	$	(6,822)	Interest expense	$	(6,000)	$	1,612
Settled treasury hedges	—		—		Interest expense	213		213
Settled interest rate swaps	—		—		Interest expense	84		84
	$	(12,981)	$	(6,822)	Total interest expense	$	(5,703)	$	1,909

Credit-risk-related Contingent Features

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	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 first six months of 2023, the Company incurred $49.0 million toward the development and redevelopment of properties.

Stockholders' Equity

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Stockholders' Equity

Common Stock

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the six months ended June 30, 2023 and the twelve months ended December 31, 2022:


	SIX MONTHS ENDED JUNE 30, 2023	TWELVE MONTHS ENDED DECEMBER 31, 2022
Balance, beginning of period	380,589,894	150,457,433
Issuance of common stock	4,817	229,618,304
Non-vested share-based awards, net of withheld shares	262,821	514,157
Balance, end of period	380,857,532	380,589,894

At-The-Market Equity Offering Program

During the six months ended June 30, 2023, the Company did not sell any shares or enter into any forward sale agreements to sell shares of common stock through its ATM offering program.

Common Stock Dividends

Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022.


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
Dollars in thousands, except per share data	2023		2022		2023		2022
Weighted average common shares outstanding
Weighted average common shares outstanding	380,829,011		151,620,897		380,812,981		151,230,064
Non-vested shares	(1,932,334)		(1,945,042)		(1,952,350)		(1,908,652)
Weighted average common shares outstanding - basic	378,896,677		149,675,855		378,860,631		149,321,412

Weighted average common shares outstanding - basic	378,896,677		149,675,855		378,860,631		149,321,412


Dilutive effect of employee stock purchase plan	—		62,694		—		75,394
Weighted average common shares outstanding - diluted	378,896,677		149,738,549		378,860,631		149,396,806

Net (loss) income attributable to common stockholders	$	(82,759)	$	6,130	$	(169,884)	$	48,357
Dividends paid on nonvested share-based awards	(588)		(601)		(1,193)		(1,207)
Net (loss) income applicable to common stockholders - basic	$	(83,347)	$	5,529	$	(171,077)	$	47,150





Basic earnings per common share - net income	$	(0.22)	$	0.04	$	(0.45)	$	0.32


Diluted earnings per common share - net income	$	(0.22)	$	0.04	$	(0.45)	$	0.32

Incentive Plans

Equity Awards

During the six months ended June 30, 2023, the Company made the following equity awards:

A summary of the activity under the Company's share-based incentive plans for the three and six months ended June 30, 2023 and 2022 is included in the table below.


	THREE MONTHS ENDED JUNE 30,		SIX MONTHS ENDED JUNE 30,
	2023	2022	2023	2022
Share-based awards, beginning of period	1,955,445	1,951,551	1,795,128	1,562,028
Granted	43,276	26,840	325,816	442,024
Vested	(62,640)	(36,682)	(164,360)	(61,047)
Forfeited	(3,860)	—	(24,363)	(1,296)
Share-based awards, end of period	1,932,221	1,941,709	1,932,221	1,941,709

Restricted Stock Units


	THREE MONTHS ENDED MARCH 31,
Volatility		34.0	%
Dividend assumption		Accrued
Expected term		3 years
Risk-free rate		4.42	%
Stock price (per share)		$20.21

The following is a summary of the RSU activity during the three and six months ended June 30, 2023:


	THREE MONTHS ENDED JUNE 30,			SIX MONTHS ENDED JUNE 30,
	Restricted Stock Units	Weighted Average Grant Date Fair Value		Restricted Stock Units	Weighted Average Grant Date Fair Value
Non-vested, beginning of period	363,250	$	28.57	294,932	33.04
Granted	—	—		165,174	$	22.55
Vested/Forfeited	—	—		(17,606)	33.04
Probability adjustment of 2022 RSUs	—	—		(79,250)	31.68
Non-vested, end of period	363,250	$	28.57	363,250	28.57

LTIP Series C Units


	THREE MONTHS ENDED MARCH 31,
Volatility		34.0	%
Dividend assumption		Accrued
Expected term		3 years
Risk-free rate		4.42	%
Stock price (per share)		$20.21

Employee Stock Purchase Plan


	THREE MONTHS ENDED JUNE 30,		SIX MONTHS ENDED JUNE 30,
	2023	2022	2023	2022
Outstanding and exercisable, beginning of period	183,426	427,802	340,976	348,514
Granted	—	—	—	255,960
Exercised	(1,687)	(1,965)	(4,817)	(12,518)
Forfeited	(2,370)	(20,303)	(23,791)	(45,789)
Expired	—	—	(132,999)	(140,633)
Outstanding and exercisable, end of period	179,369	405,534	179,369	405,534

The following table represents expected amortization of the Company's non-vested shares issued as of June 30, 2023:


Dollars in millions	FUTURE AMORTIZATION of non-vested shares
2023	$	7.7
2024	13.3
2025	10.8
2026	8.0
2027	2.4
2028 and thereafter	0.5
Total	$	42.7

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

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.

The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable at June 30, 2023 and December 31, 2022.


	June 30, 2023				December 31, 2022
Dollars in millions	CARRYING VALUE		FAIR VALUE		CARRYING VALUE		FAIR VALUE
Notes and bonds payable 1	$	5,340.3	$	5,107.5	$	5,351.8	$	5,149.6
Real estate notes receivable 1	$	151.5	$	149.0	$	99.6	$	99.6

1Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net income (loss)	$ (82,759)	$ 6,130	$ (169,884)	$ 48,357

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Business Overview

Basis of Presentation

Principles of Consolidation


(dollars in thousands)	JUNE 30, 2023
Assets:
Net real estate investments	$	61,980
Cash and cash equivalents	2,107
Receivables and other assets	2,015
Total assets	$	66,102
Liabilities:
Accrued expenses and other liabilities	$	14,058
Total equity	52,044
Total liabilities and equity	$	66,102


(dollars in thousands) ORIGINATION DATE	LOCATION	SOURCE	CARRYING AMOUNT		MAXIMUM EXPOSURE TO LOSS
2021	Houston, TX 1	Note receivable	$	30,445	$	31,150
2021	Charlotte, NC 1	Note receivable	5,691		6,000
2022	Texas 2	Joint venture	64,758		64,758

1Assumed mortgage note receivable in connection with the Merger.

2Includes investments in seven properties.

Variable Interest Entities

Use of Estimates in the Condensed Consolidated Financial Statements

Reclassifications

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.

Redeemable Non-Controlling Interests

Redeemable Non-Controlling InterestsThe Company accounts for redeemable equity securities in accordance with ASC Topic 480: Accounting for Redeemable Equity Instruments, which requires that equity securities redeemable at the option of the holder, not solely within our control, be classified outside permanent stockholders’ equity. The Company classifies redeemable equity securities as redeemable non-controlling interests in the accompanying Condensed Consolidated Balance Sheets. Accordingly, the Company records the carrying amount at the greater of the initial carrying amount (increased or decreased for the non-controlling interest’s share of net income or loss and distributions) or the redemption value. We measure the redemption value and record an adjustment to the carrying value of the equity securities as a component of redeemable non-controlling interest.

Asset Impairment

Asset ImpairmentThe Company assesses the potential for impairment of identifiable, definite-lived, intangible assets and long-lived assets, including real estate properties, whenever the occurrence of an event or a change in circumstances indicates that the carrying value might not be fully recoverable. Indicators of impairment may include significant underperformance of an asset relative to historical or expected operating results; significant changes in the Company’s use of assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in a property; or significant negative economic trends or negative industry trends for the Company or its tenants.

Investments in Leases - Financing Receivables, Net and Real Estate Notes Receivable and Interest Income

Investments in Leases - Financing Receivables, Net


(dollars in thousands) ORIGINATION DATE	LOCATION	INTEREST RATE	CARRYING VALUE as of JUNE 30, 2023
May 2021	Poway, CA	5.73%	$	113,967
November 2021	Columbus, OH	6.48%	7,348
			$	121,315

Real Estate Notes Receivable


(dollars in thousands)	ORIGINATION	MATURITY	STATED INTEREST RATE		MAXIMUM LOAN COMMITMENT		OUTSTANDING as of JUNE 30, 2023		ALLOWANCE FOR CREDIT LOSSES		FAIR VALUE DISCOUNT AND FEES		CARRYING VALUE as of JUNE 30, 2023
Mezzanine loans
Texas	6/24/2021	6/24/2024	8.00	%	$	54,119	$	54,119	$	(5,196)	$	(3,067)	$	45,856

Mortgage loans
Texas	6/30/2021	12/31/2023	7.00	%	31,150		31,150		—		(705)		30,445
North Carolina	12/22/2021	12/22/2024	8.00	%	6,000		6,000		—		(309)		5,691
Florida	5/17/2022	2/27/2026	6.00	%	65,000		24,556		—		(55)		24,501
California	3/30/2023	3/29/2026	6.00	%	45,000		45,000		—		—		45,000
					147,150		106,706		—		(1,069)		105,637

					$	201,269	$	160,825	$	(5,196)	$	(4,136)	$	151,493

Allowance for Credit Losses

The following table summarizes the Company's allowance for credit losses on real estate notes receivable:


Dollars in thousands	June 30, 2023		December 31, 2022

Allowance for credit losses, beginning of period	$	—	$	—
Credit loss reserves	5,196		—
Allowance for credit losses, end of period	$	5,196	$	—

Interest Income

Income from Lease Financing Receivables

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

Revenue from Contracts with Customers (ASC Topic 606)

Revenue that is accounted for under Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Operations in the Other operating line item. This line item includes parking income, management fee income and other miscellaneous income.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.

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of Condensed Balance Sheet

Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs, excluding the OP, in the aggregate:


(dollars in thousands)	JUNE 30, 2023
Assets:
Net real estate investments	$	61,980
Cash and cash equivalents	2,107
Receivables and other assets	2,015
Total assets	$	66,102
Liabilities:
Accrued expenses and other liabilities	$	14,058
Total equity	52,044
Total liabilities and equity	$	66,102

Schedule of Variable Interest Entities

As a result, the Company accounts for the two notes receivables as amortized cost and a joint venture arrangement under the equity method. See below for additional information regarding the Company's unconsolidated VIEs.


(dollars in thousands) ORIGINATION DATE	LOCATION	SOURCE	CARRYING AMOUNT		MAXIMUM EXPOSURE TO LOSS
2021	Houston, TX 1	Note receivable	$	30,445	$	31,150
2021	Charlotte, NC 1	Note receivable	5,691		6,000
2022	Texas 2	Joint venture	64,758		64,758

1Assumed mortgage note receivable in connection with the Merger.

2Includes investments in seven properties.

Schedule of Accounts, Notes, Loans and Financing Receivable

See below for additional information regarding the Company's financing receivables.


(dollars in thousands) ORIGINATION DATE	LOCATION	INTEREST RATE	CARRYING VALUE as of JUNE 30, 2023
May 2021	Poway, CA	5.73%	$	113,967
November 2021	Columbus, OH	6.48%	7,348
			$	121,315


(dollars in thousands)	ORIGINATION	MATURITY	STATED INTEREST RATE		MAXIMUM LOAN COMMITMENT		OUTSTANDING as of JUNE 30, 2023		ALLOWANCE FOR CREDIT LOSSES		FAIR VALUE DISCOUNT AND FEES		CARRYING VALUE as of JUNE 30, 2023
Mezzanine loans
Texas	6/24/2021	6/24/2024	8.00	%	$	54,119	$	54,119	$	(5,196)	$	(3,067)	$	45,856

Mortgage loans
Texas	6/30/2021	12/31/2023	7.00	%	31,150		31,150		—		(705)		30,445
North Carolina	12/22/2021	12/22/2024	8.00	%	6,000		6,000		—		(309)		5,691
Florida	5/17/2022	2/27/2026	6.00	%	65,000		24,556		—		(55)		24,501
California	3/30/2023	3/29/2026	6.00	%	45,000		45,000		—		—		45,000
					147,150		106,706		—		(1,069)		105,637

					$	201,269	$	160,825	$	(5,196)	$	(4,136)	$	151,493

Schedule of Company's Allowance For Credit Losses

The following table summarizes the Company's allowance for credit losses on real estate notes receivable:


Dollars in thousands	June 30, 2023		December 31, 2022

Allowance for credit losses, beginning of period	$	—	$	—
Credit loss reserves	5,196		—
Allowance for credit losses, end of period	$	5,196	$	—

Schedule of Disaggregation of revenue

Below is a detail of the amounts by category:


	THREE MONTHS ENDED June 30,				SIX MONTHS ENDED June 30,
in thousands	2023		2022		2023		2022
Type of Revenue
Parking income	$	2,370	$	1,919	$	4,761	$	3,672

Management fee income 1	1,597		783		3,570		1,438
Miscellaneous	263		36		516		103
	$	4,230	$	2,738	$	8,847	$	5,213

1 Includes the recovery of certain expenses under the financing receivable as outlined in the management agreement.

Merger with HTA (Tables)

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Consideration Transferred

The implied consideration transferred on the Closing Date is as follows:


Dollars in thousands, except for per share data
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

Schedule of Fair Values of the Assets Acquired And Liabilities Assumed

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the Closing Date:


Dollars in thousands	PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE		CUMULATIVE MEASUREMENT PERIOD ADJUSTMENTS		PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE (as adjusted)
ASSETS
Real estate investments
Land	$	985,926	$	18,359	$	1,004,285
Buildings and improvements	6,960,418		(119,135)		6,841,283
Lease intangible assets(a)	831,920		1,839		833,759
Financing lease right-of-use assets	9,874		3,146		13,020
Construction in progress	10,071		(6,744)		3,327
Land held for development	46,538		—		46,538
Total real estate investments	$	8,844,747	$	(102,535)	$	8,742,212
Assets held for sale, net	707,442		(7,946)		699,496
Investments in unconsolidated joint ventures	67,892		—		67,892
Cash and cash equivalents	26,034		11,403		37,437
Restricted cash	1,123,647		(1,247)		1,122,400
Operating lease right-of-use assets	198,261		16,370		214,631
Other assets, net (b) (c)	209,163		(3,840)		205,323
Total assets acquired	$	11,177,186	$	(87,795)	$	11,089,391

LIABILITIES
Notes and bonds payable	$	3,991,300	$	—	$	3,991,300
Accounts payable and accrued liabilities	1,227,570		17,374		1,244,944
Liabilities of assets held for sale	28,677		(3,939)		24,738
Operating lease liabilities	173,948		10,173		184,121
Financing lease liabilities	10,720		(855)		9,865
Other liabilities	203,210		(8,909)		194,301
Total liabilities assumed	$	5,635,425	$	13,844	$	5,649,269
Net identifiable assets acquired	$	5,541,761	$	(101,639)	$	5,440,122
Non-controlling interest	$	110,702	$	—	$	110,702
Goodwill	$	145,404	$	101,639	$	247,043
(a) The weighted average amortization period for the acquired lease intangible assets is approximately 6 years.
(b) Includes $15.9 million of contractual accounts receivable, which approximates fair value.
(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.

Real Estate Investments (Tables)

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Real Estate Acquisitions

The following table details the Company's real estate acquisition activity for the six months ended June 30, 2023:


Dollars in thousands	DATE ACQUIRED	PURCHASE PRICE		CASH CONSIDERATION 1		REAL ESTATE		OTHER 2		SQUARE FOOTAGE
Tampa, FL	3/10/23	$	31,500	$	30,499	$	30,596	$	(97)	115,867

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.

Subsequent to June 30, 2023, the Company acquired the following property:


Dollars in thousands	DATE ACQUIRED	PURCHASE PRICE		SQUARE FOOTAGE
Colorado Springs, CO	7/28/23	$	11,450	42,770

Schedule of Equity Method Investments


	THREE MONTHS ENDED June 30,				SIX MONTHS ENDED June 30,
Dollars in thousands	2023		2022		2023		2022

Investments in unconsolidated joint ventures, beginning of period	$	327,746	$	211,195	$	327,248	$	161,942
New investment during the period 1	—		—		3,824		49,599
Equity loss recognized during the period	(17)		(307)		(797)		(652)

Owner distributions	(484)		(107)		(3,030)		(108)
Investments in unconsolidated joint ventures, end of period	$	327,245	$	210,781	$	327,245	$	210,781

Schedule of Real Estate Dispositions

The following table details the Company's dispositions for the six months ended June 30, 2023:


Dollars in thousands	DATE DISPOSED	SALE PRICE		CLOSING ADJUSTMENTS		COMPANY-FINANCED MORTGAGE NOTES		NET PROCEEDS		NET REAL ESTATE INVESTMENT		OTHER (INCLUDING RECEIVABLES) 1		GAIN/(IMPAIRMENT)		SQUARE FOOTAGE
Tampa, FL & Miami, FL2	1/12/23	$	93,250	$	(5,875)	$	—	$	87,375	$	87,302	$	(888)	$	961	224,037
Dallas, TX 3	1/30/23	19,210		(141)		—		19,069		18,986		43		40		36,691
St. Louis, MO	2/10/23	350		(18)		—		332		398		—		(66)		6,500
Los Angeles, CA	3/23/23	21,000		(526)		—		20,474		20,610		52		(188)		37,165
Los Angeles, CA 4	3/30/23	75,000		(8,079)		(45,000)		21,921		88,624		(803)		(20,900)		147,078
Los Angeles, CA 5	5/12/23	3,300		(334)		—		2,966		3,268		—		(302)		—
Albany, NY	6/30/23	10,000		(1,229)		—		8,771		2,613		(1,040)		7,198		40,870

Total dispositions		$	222,110	$	(16,202)	$	(45,000)	$	160,908	$	221,801	$	(2,636)	$	(13,257)	492,341

1Includes straight-line rent receivables, leasing commissions and lease inducements.

2Includes two properties, sold in two separate transactions to the same buyer on the same date.

4The Company entered into a mortgage note agreement with the buyer for $45 million.

5The Company sold a land parcel totaling 0.34 acres.

Subsequent to June 30, 2023, the Company disposed of the following property:


Dollars in thousands	DATE DISPOSED	SALES PRICE		SQUARE FOOTAGE
Houston, TX	8/2/23	$	8,320	57,170

Schedule of Assets and Liabilities Held for Sale

The table below reflects the assets and liabilities classified as held for sale as of June 30, 2023 and December 31, 2022:


Dollars in thousands	June 30, 2023		December 31, 2022
Balance Sheet data:
Land	$	205	$	1,700
Building and improvements	1,736		15,164
Lease intangibles	2,242		1,986




	4,183		18,850
Accumulated depreciation	(4,183)		—
Real estate assets held for sale, net	—		18,850

Other assets, net	151		43
Assets held for sale, net	$	151	$	18,893

Accounts payable and accrued liabilities	$	222	$	282


Other liabilities	—		155
Liabilities of assets held for sale	$	222	$	437

Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Schedule of Future Minimum Operating Lease Payments Receivable

Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of June 30, 2023 were as follows:


Dollars in thousands	OPERATING
2023	$	467,393
2024	861,323
2025	751,369
2026	648,352
2027	536,874
2028 and thereafter	1,950,019
	$	5,215,330

Schedule of Future Minimum Operating Lease Payments

The Company’s future lease payments (primarily for its 166 non-prepaid ground leases) as of June 30, 2023 were as follows:


Dollars in thousands	OPERATING		FINANCING
2023	$	7,315	$	992
2024	15,011		2,182
2025	14,597		2,218
2026	14,631		2,255
2027	14,701		2,294
2028 and thereafter	929,853		396,398
Total undiscounted lease payments	996,108		406,339
Discount	(717,629)		(332,710)
Lease liabilities	$	278,479	$	73,629

Schedule of Future Minimum Financing Lease Payments

The Company’s future lease payments (primarily for its 166 non-prepaid ground leases) as of June 30, 2023 were as follows:


Dollars in thousands	OPERATING		FINANCING
2023	$	7,315	$	992
2024	15,011		2,182
2025	14,597		2,218
2026	14,631		2,255
2027	14,701		2,294
2028 and thereafter	929,853		396,398
Total undiscounted lease payments	996,108		406,339
Discount	(717,629)		(332,710)
Lease liabilities	$	278,479	$	73,629

Schedule of Lease Cost

The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2023 and 2022:


	THREE MONTHS ENDED June 30,						SIX MONTHS ENDED June 30,
Dollars in thousands	2023			2022			2023		2022
Operating lease cost
Operating lease expense	$	5,329		$	1,194		$	10,436	$	2,409
Variable lease expense	2,235			1,038			4,371		2,062

Finance lease cost
Amortization of right-of-use assets	387			331			774		503
Interest on lease liabilities	923			765			1,841		1,052
Total lease expense	$	8,874		$	3,328		$	17,422	$	6,026

Other information
Operating cash flows outflows related to operating leases	$	5,230		$	1,799		$	11,190	$	4,596
Operating cash flows outflows related to financing leases	$	541		$	509		$	1,094	$	767
Financing cash flows outflows related to financing leases	$	6		$	—		$	17	$	51
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	—		$	—	$	40,589


Weighted-average years remaining lease term (excluding renewal options) - operating leases	47.3			47.4
Weighted-average years remaining lease term (excluding renewal options) - finance leases	58.4			61.7
Weighted-average discount rate - operating leases	5.8		%	5.6		%
Weighted-average discount rate - finance leases	5.0		%	5.0		%

Notes and Bonds Payable (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The table below details the Company’s notes and bonds payable as of June 30, 2023 and December 31, 2022.


	MATURITY DATES	BALANCE 1 AS OF				EFFECTIVE INTEREST RATE as of 6/30/2023
Dollars in thousands		6/30/2023		12/31/2022
$1.5 billion Unsecured Credit Facility	10/25	$	354,000	$	385,000	6.05	%


$350 million Unsecured Term Loan 2	7/24	349,499		349,114		6.21	%
$200 million Unsecured Term Loan	5/24	199,786		199,670		6.21	%
$300 million Unsecured Term Loan	10/25	299,947		299,936		6.21	%
$150 million Unsecured Term Loan	6/26	149,569		149,495		6.21	%
$200 million Unsecured Term Loan	7/27	199,432		199,362		6.21	%
$300 million Unsecured Term Loan	1/28	298,079		297,869		6.21	%
Senior Notes due 2025	5/25	249,298		249,115		4.12	%
Senior Notes due 2026	8/26	575,256		571,587		4.94	%
Senior Notes due 2027	7/27	481,615		479,553		4.76	%
Senior Notes due 2028	1/28	297,138		296,852		3.85	%
Senior Notes due 2030	2/30	570,356		565,402		5.30	%
Senior Notes due 2030	3/30	296,579		296,385		2.72	%
Senior Notes due 2031	3/31	295,795		295,547		2.25	%
Senior Notes due 2031	3/31	640,999		632,693		5.13	%
Mortgage notes payable	8/23-12/26	82,924		84,247		3.57%-4.84%
		$	5,340,272	$	5,351,827

1Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable.

2On April 26, 2023, the Company exercised its option to extend the maturity date for one year for a fee of approximately $0.4 million.

Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

As of June 30, 2023, the Company had 14 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:


EXPIRATION DATE	AMOUNT		WEIGHTED AVERAGE RATE
January 15, 2024	$	200,000	1.21	%
May 1, 2026	100,000		2.15	%
June 1, 2026	150,000		3.83	%
December 1, 2026	150,000		3.84	%
June 1, 2027	150,000		4.13	%
December 1, 2027	250,000		3.79	%
	$	1,000,000	3.17	%

The table below presents the effect of cash flow hedge accounting on AOCI during the three and six months ended June 30, 2023 and 2022 related to the Company's outstanding interest rate swaps.


	(GAIN)/LOSS RECOGNIZED IN AOCI ON DERIVATIVE three months ended June 30,					(GAIN)/LOSS RECLASSIFIED FROM AOCI INTO INCOME three months ended June 30,
In thousands	2023		2022			2023		2022
Interest rate swaps	$	(21,523)	$	(1,663)	Interest expense	$	(3,568)	$	674
Settled treasury hedges	—		—		Interest expense	107		107
Settled interest rate swaps	—		—		Interest expense	42		42
	$	(21,523)	$	(1,663)	Total interest expense	$	(3,419)	$	823


	(GAIN)/LOSS RECOGNIZED IN AOCI ON DERIVATIVE six months ended June 30,					(GAIN)/LOSS RECLASSIFIED FROM AOCI INTO INCOME six months ended June 30,
In thousands	2023		2022			2023		2022
Interest rate swaps	$	(12,981)	$	(6,822)	Interest expense	$	(6,000)	$	1,612
Settled treasury hedges	—		—		Interest expense	213		213
Settled interest rate swaps	—		—		Interest expense	84		84
	$	(12,981)	$	(6,822)	Total interest expense	$	(5,703)	$	1,909

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

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 June 30, 2023.


	BALANCE AT JUNE 30, 2023
In thousands	BALANCE SHEET LOCATION	FAIR VALUE
Derivatives designated as hedging instruments
Interest rate swaps	Other liabilities	$	(1,248)
Interest rate swaps	Other assets	$	16,046
Total derivatives designated as hedging instruments		$	14,798

Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Reconciliation of Common Stock Outstanding

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the six months ended June 30, 2023 and the twelve months ended December 31, 2022:


	SIX MONTHS ENDED JUNE 30, 2023	TWELVE MONTHS ENDED DECEMBER 31, 2022
Balance, beginning of period	380,589,894	150,457,433
Issuance of common stock	4,817	229,618,304
Non-vested share-based awards, net of withheld shares	262,821	514,157
Balance, end of period	380,857,532	380,589,894

Schedule of Earnings (Loss) per Share

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022.


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
Dollars in thousands, except per share data	2023		2022		2023		2022
Weighted average common shares outstanding
Weighted average common shares outstanding	380,829,011		151,620,897		380,812,981		151,230,064
Non-vested shares	(1,932,334)		(1,945,042)		(1,952,350)		(1,908,652)
Weighted average common shares outstanding - basic	378,896,677		149,675,855		378,860,631		149,321,412

Weighted average common shares outstanding - basic	378,896,677		149,675,855		378,860,631		149,321,412


Dilutive effect of employee stock purchase plan	—		62,694		—		75,394
Weighted average common shares outstanding - diluted	378,896,677		149,738,549		378,860,631		149,396,806

Net (loss) income attributable to common stockholders	$	(82,759)	$	6,130	$	(169,884)	$	48,357
Dividends paid on nonvested share-based awards	(588)		(601)		(1,193)		(1,207)
Net (loss) income applicable to common stockholders - basic	$	(83,347)	$	5,529	$	(171,077)	$	47,150





Basic earnings per common share - net income	$	(0.22)	$	0.04	$	(0.45)	$	0.32


Diluted earnings per common share - net income	$	(0.22)	$	0.04	$	(0.45)	$	0.32

Summary of the Activity Under the Incentive Plan and Restricted Stock Unit

A summary of the activity under the Company's share-based incentive plans for the three and six months ended June 30, 2023 and 2022 is included in the table below.


	THREE MONTHS ENDED JUNE 30,		SIX MONTHS ENDED JUNE 30,
	2023	2022	2023	2022
Share-based awards, beginning of period	1,955,445	1,951,551	1,795,128	1,562,028
Granted	43,276	26,840	325,816	442,024
Vested	(62,640)	(36,682)	(164,360)	(61,047)
Forfeited	(3,860)	—	(24,363)	(1,296)
Share-based awards, end of period	1,932,221	1,941,709	1,932,221	1,941,709

The following is a summary of the RSU activity during the three and six months ended June 30, 2023:


	THREE MONTHS ENDED JUNE 30,			SIX MONTHS ENDED JUNE 30,
	Restricted Stock Units	Weighted Average Grant Date Fair Value		Restricted Stock Units	Weighted Average Grant Date Fair Value
Non-vested, beginning of period	363,250	$	28.57	294,932	33.04
Granted	—	—		165,174	$	22.55
Vested/Forfeited	—	—		(17,606)	33.04
Probability adjustment of 2022 RSUs	—	—		(79,250)	31.68
Non-vested, end of period	363,250	$	28.57	363,250	28.57

Schedule of Stock Options, Valuation Assumptions


	THREE MONTHS ENDED MARCH 31,
Volatility		34.0	%
Dividend assumption		Accrued
Expected term		3 years
Risk-free rate		4.42	%
Stock price (per share)		$20.21


	THREE MONTHS ENDED MARCH 31,
Volatility		34.0	%
Dividend assumption		Accrued
Expected term		3 years
Risk-free rate		4.42	%
Stock price (per share)		$20.21

Summary of Employee Stock Purchase Plan Activity

A summary of the activity under the ESPP for the three and six months ended June 30, 2023 and 2022 is included in the table below.


	THREE MONTHS ENDED JUNE 30,		SIX MONTHS ENDED JUNE 30,
	2023	2022	2023	2022
Outstanding and exercisable, beginning of period	183,426	427,802	340,976	348,514
Granted	—	—	—	255,960
Exercised	(1,687)	(1,965)	(4,817)	(12,518)
Forfeited	(2,370)	(20,303)	(23,791)	(45,789)
Expired	—	—	(132,999)	(140,633)
Outstanding and exercisable, end of period	179,369	405,534	179,369	405,534

Schedule of Unrecognized Compensation Cost, Nonvested Awards

The following table represents expected amortization of the Company's non-vested shares issued as of June 30, 2023:


Dollars in millions	FUTURE AMORTIZATION of non-vested shares
2023	$	7.7
2024	13.3
2025	10.8
2026	8.0
2027	2.4
2028 and thereafter	0.5
Total	$	42.7

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value And Carrying Values For Notes And Bonds Payable, Real Estate Notes Receivable, And Notes Receivable

The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable at June 30, 2023 and December 31, 2022.


	June 30, 2023				December 31, 2022
Dollars in millions	CARRYING VALUE		FAIR VALUE		CARRYING VALUE		FAIR VALUE
Notes and bonds payable 1	$	5,340.3	$	5,107.5	$	5,351.8	$	5,149.6
Real estate notes receivable 1	$	151.5	$	149.0	$	99.6	$	99.6

1Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.

Summary of Significant Accounting Policies (Details) $ in Thousands, shares in Millions, ft² in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($) ft² financing_receivable variable_interest_entity property note_receivable state shares	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) ft² financing_receivable property variable_interest_entity note_receivable state joint_venture shares	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Business Overview:
Gross investment amount, total	$ 13,900,000		$ 13,900,000
Number of real estate properties \| property	680		680
Number of owned real estate properties \| property	680		680
Number of states that the company owns real estate in, whole units \| state	35		35
Approximate square feet invested in by company \| ft²	39.8		39.8
Approximate square feet for which Nationwide property management services provided by company \| ft²	39.3		39.3
Number of buildings owned by joint venture with TIAA \| property	34		34
Principles of Consolidation:
Equity ownership for consolidation (percent)	100.00%		100.00%
Number of variable interest entities \| variable_interest_entity	4		4
Redeemable Non-Controlling Interests:
Redeemable non-controlling interests	$ 2,487	$ 0	$ 2,487	$ 0	$ 2,014	$ 2,000	$ 0	$ 0
Asset Impairment:
Impairment of real estate assets	55,200		81,400
Real Estate Notes Receivable:
Investment in financing receivable, net	$ 151,500		151,500
Allowance for Credit Losses, Interest Income, Income from Real Estate Notes Receivable:
Credit loss reserves			$ 5,196		$ 0
Number of recognized lease financial receivables \| financing_receivable	2		2
Income from financing receivables	$ 2,100	$ 2,000	$ 4,200	$ 3,900
Number of real estate notes receivable \| financing_receivable	2		2
Financing receivable, nonaccrual	$ 48,900		$ 48,900
Notes Receivable
Allowance for Credit Losses, Interest Income, Income from Real Estate Notes Receivable:
Interest income	$ 2,200		$ 4,300
Variable Interest Entity
Principles of Consolidation:
Number of variable interest entities \| variable_interest_entity	3		3
Number of notes receivable \| note_receivable	2		2
Number of joint ventures \| joint_venture			1
Non-Controlling Interest Holders \| Healthcare Trustof America Holdings L P
Principles of Consolidation:
Limited partner's capital, units outstanding (in shares) \| shares	4.7		4.7
Limited partners ownership interest (in percent)			1.20%
Property Entities Not Determined to be VIEs
Principles of Consolidation:
Equity interest owned (percent)	100.00%		100.00%
Healthcare Trustof America Holdings L P
Principles of Consolidation:
Equity interest owned (percent)	98.80%		98.80%
Real Estate Properties Held in Joint Ventures
Business Overview:
Joint venture ownership (percent)	44.00%		44.00%

Summary of Significant Accounting Policies - Consolidated balance sheets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets:
Net real estate investments	$ 11,900,027	$ 12,412,354
Cash and cash equivalents	35,904	60,961
Total assets	13,394,347	13,849,631
Liabilities:
Total equity	7,179,399	7,571,076
Total liabilities and equity	13,394,347	$ 13,849,631
Variable interest entity
Assets:
Net real estate investments	61,980
Cash and cash equivalents	2,107
Receivables and other assets	2,015
Total assets	66,102
Liabilities:
Accrued expenses and other liabilities	14,058
Total equity	52,044
Total liabilities and equity	$ 66,102

Summary of Significant Accounting Policies - Variable interest entity (Details) $ in Thousands	Jun. 30, 2023 USD ($) property note_receivable
Variable Interest Entity [Line Items]
Number of owned real estate properties \| property	680
Variable Interest Entity
Variable Interest Entity [Line Items]
Number of notes receivable \| note_receivable	2
Houston, TX \| Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Notes receivable, carrying amount	$ 30,445
MAXIMUM EXPOSURE TO LOSS	31,150
North Carolina \| Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Notes receivable, carrying amount	5,691
MAXIMUM EXPOSURE TO LOSS	6,000
Texas \| Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Joint venture, carrying amount	64,758
MAXIMUM EXPOSURE TO LOSS	$ 64,758
Number of owned real estate properties \| property	7

Summary of Significant Accounting Policies - Schedule of Notes Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing receivable, carrying value	$ 121,315
MAXIMUM LOAN COMMITMENT	201,269
REAL ESTATE NOTES RECEIVABLE, GROSS	160,825
ALLOWANCE FOR CREDIT LOSSES	(5,196)	$ 0	$ 0
FAIR VALUE DISCOUNT AND FEES	(4,136)
CARRYING VALUE	151,493
Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
MAXIMUM LOAN COMMITMENT	147,150
REAL ESTATE NOTES RECEIVABLE, GROSS	106,706
ALLOWANCE FOR CREDIT LOSSES	0
FAIR VALUE DISCOUNT AND FEES	(1,069)
CARRYING VALUE	105,637
Poway, CA
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing receivable, carrying value	$ 113,967
STATED INTEREST RATE	5.73%
Columbus, OH
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing receivable, carrying value	$ 7,348
STATED INTEREST RATE	6.48%
Texas \| Mezzanine loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
STATED INTEREST RATE	8.00%
MAXIMUM LOAN COMMITMENT	$ 54,119
REAL ESTATE NOTES RECEIVABLE, GROSS	54,119
ALLOWANCE FOR CREDIT LOSSES	(5,196)
FAIR VALUE DISCOUNT AND FEES	(3,067)
CARRYING VALUE	$ 45,856
Texas \| Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
STATED INTEREST RATE	7.00%
MAXIMUM LOAN COMMITMENT	$ 31,150
REAL ESTATE NOTES RECEIVABLE, GROSS	31,150
ALLOWANCE FOR CREDIT LOSSES	0
FAIR VALUE DISCOUNT AND FEES	(705)
CARRYING VALUE	$ 30,445
North Carolina \| Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
STATED INTEREST RATE	8.00%
MAXIMUM LOAN COMMITMENT	$ 6,000
REAL ESTATE NOTES RECEIVABLE, GROSS	6,000
ALLOWANCE FOR CREDIT LOSSES	0
FAIR VALUE DISCOUNT AND FEES	(309)
CARRYING VALUE	$ 5,691
Florida \| Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
STATED INTEREST RATE	6.00%
MAXIMUM LOAN COMMITMENT	$ 65,000
REAL ESTATE NOTES RECEIVABLE, GROSS	24,556
ALLOWANCE FOR CREDIT LOSSES	0
FAIR VALUE DISCOUNT AND FEES	(55)
CARRYING VALUE	$ 24,501
California \| Mortgage loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
STATED INTEREST RATE	6.00%
MAXIMUM LOAN COMMITMENT	$ 45,000
REAL ESTATE NOTES RECEIVABLE, GROSS	45,000
ALLOWANCE FOR CREDIT LOSSES	0
FAIR VALUE DISCOUNT AND FEES	0
CARRYING VALUE	$ 45,000

Summary of Significant Accounting Policies - Schedule of Company's Allowance For Credit Losses (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for credit losses, beginning of period	$ 0	$ 0
Credit loss reserves	5,196	0
Allowance for credit losses, end of period	$ 5,196	$ 0

Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Type of Revenue	$ 4,230	$ 2,738	$ 8,847	$ 5,213
Parking income
Disaggregation of Revenue [Line Items]
Type of Revenue	2,370	1,919	4,761	3,672
Management fee income
Disaggregation of Revenue [Line Items]
Type of Revenue	1,597	783	3,570	1,438
Miscellaneous
Disaggregation of Revenue [Line Items]
Type of Revenue	$ 263	$ 36	$ 516	$ 103

Merger with HTA - Narrative (Details) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
Merger with HTA - Narrative (Details) - USD ($)	Jul. 20, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Business Acquisition [Line Items]
Common stock, par value (in dollars per share)		$ 0.01		$ 0.01		$ 0.01
Goodwill	$ 247,043,000	$ 250,530,000		$ 250,530,000		$ 223,202,000
Goodwill expected to be tax deductible	0
Merger-related costs		$ (15,670,000)	$ 7,085,000	$ (10,815,000)	$ 13,201,000
Refund of transfer taxes paid						$ 17,800,000
Revision of Prior Period, Adjustment
Business Acquisition [Line Items]
Goodwill adjustment incomplete	$ 101,600,000
HealthCare Realty Trust Incorporated \| Common Class A
Business Acquisition [Line Items]
Common stock, par value (in dollars per share)	$ 0.01
HealthCare Realty Trust, Inc.
Business Acquisition [Line Items]
Common stock, par value (in dollars per share)	0.01
Healthcare Trust Of America, Inc
Business Acquisition [Line Items]
Common stock, par value (in dollars per share)	$ 0.01
Conversion ratio	1.00
Dividends declared per common share, during the period (in dollars per share)	$ 4.82

Merger with HTA (Details)		6 Months Ended
Merger with HTA (Details)	Jul. 20, 2022 USD ($) $ / shares shares	Jun. 30, 2023 USD ($) shares	Dec. 31, 2022 shares
Business Acquisition [Line Items]
Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted (in shares)	228,857,717	380,858,000	380,590,000
Implied shares of Legacy HR Common Stock issued (in shares)	228,520,990
Adjusted closing price of Legacy HR Common Stock on July 20, 2022 (in dollars per share) \| $ / shares	$ 24.37
Value of implied Legacy HR Common Stock issued \| $	$ 5,569,057,000
Fair value of Legacy HTA restricted stock awards attributable to pre-Merger services \| $		$ 7,406,000
Consideration transferred \| $		$ 5,576,463,000
Healthcare Trust Of America, Inc
Business Acquisition [Line Items]
Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted (in shares)	228,520,990
Exchange ratio	1.00
Common Stock, fractional (in shares)	192
Healthcare Trust Of America, Inc \| Restricted stock
Business Acquisition [Line Items]
Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted (in shares)	336,535
Common Stock, withheld (in shares)	215,764

Merger with HTA - Schedule of Fair Values of the Assets Acquired And Liabilities Assumed (Details) - USD ($) $ in Thousands	Jul. 20, 2022	Jun. 30, 2023	Dec. 31, 2022
Real estate investments
Land	$ 1,004,285
Buildings and improvements	6,841,283
Lease intangible assets	833,759
Financing lease right-of-use assets	13,020
Construction in progress	3,327
Land held for development	46,538
Total real estate investments	8,742,212
Assets held for sale, net	699,496
Investments in unconsolidated joint ventures	67,892
Cash and cash equivalents	37,437
Restricted cash	1,122,400
Operating lease right-of-use assets	214,631
Other assets, net	205,323
Total assets acquired	11,089,391
LIABILITIES
Notes and bonds payable	3,991,300
Accounts payable and accrued liabilities	1,244,944
Liabilities of assets held for sale	24,738
Operating lease liabilities	184,121
Financing lease liabilities	9,865
Other liabilities	194,301
Total liabilities assumed	5,649,269
Net identifiable assets acquired	5,440,122
Non-controlling interest	110,702
Goodwill	$ 247,043	$ 250,530	$ 223,202
Weighted average amortization period for the acquired lease intangible assets	6 years
Gross contractual accounts receivable	$ 15,900
Gross contractual real estate notes receivable	78,700
Gross contractual real estate notes receivable at fair value	74,800
CUMULATIVE MEASUREMENT PERIOD ADJUSTMENTS
Land	18,359
Buildings and improvements	(119,135)
Lease intangible assets	1,839
Financing lease right-of-use assets	3,146
Construction in progress	(6,744)
Total real estate investments	(102,535)
Assets held for sale, net	(7,946)
Cash and cash equivalents	11,403
Restricted cash	(1,247)
Operating lease right-of-use assets	16,370
Other assets, net	(3,840)
Total assets acquired	(87,795)
Accounts payable and accrued liabilities	17,374
Liabilities of assets held for sale	(3,939)
Operating lease liabilities	10,173
Financing lease liabilities	(855)
Other liabilities	(8,909)
Total liabilities assumed	13,844
Net identifiable assets acquired	(101,639)
Goodwill	101,639
Previously Reported
Real estate investments
Land	985,926
Buildings and improvements	6,960,418
Lease intangible assets	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	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

Real Estate Investments -Real Estate Acquisitions (Details) $ in Thousands			6 Months Ended
	Jul. 28, 2023 USD ($) ft²	Mar. 10, 2023 USD ($) ft²	Jun. 30, 2023 USD ($)
Business Acquisition [Line Items]
PURCHASE PRICE			$ 5,576,463
Tampa, FL \| Medical office building
Business Acquisition [Line Items]
PURCHASE PRICE		$ 31,500
CASH CONSIDERATION		30,499
REAL ESTATE		30,596
OTHER		$ (97)
SQUARE FOOTAGE \| ft²		115,867
Colorado Springs, CO \| Medical office building \| Subsequent event
Business Acquisition [Line Items]
PURCHASE PRICE	$ 11,450
SQUARE FOOTAGE \| ft²	42,770

Real Estate Investments - Narrative (Details) - Medical office building - Scottsdale, Arizona $ in Millions	3 Months Ended
	Jun. 30, 2023 USD ($)
Business Acquisition [Line Items]
Joint venture, ownership (in percentage)	90.00%
Joint venture acquired	$ 8.8
Cash consideration	$ 8.3

Real Estate Investments - Unconsolidated Joint Venture Acquisitions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Equity Method Investments [Roll Forward]
Investments in unconsolidated joint ventures, beginning of period			$ 327,248
Equity loss recognized during the period	$ (17)	$ (307)	(797)	$ (652)
Investments in unconsolidated joint ventures, end of period	327,245		327,245
Parking Garages
Equity Method Investments [Roll Forward]
Investments in unconsolidated joint ventures, beginning of period	327,746	211,195	327,248	161,942
New investments during the period	0	0	3,824	49,599
Equity loss recognized during the period	(17)	(307)	(797)	(652)
Owner distributions	(484)	(107)	(3,030)	(108)
Investments in unconsolidated joint ventures, end of period	$ 327,245	$ 210,781	$ 327,245	$ 210,781
Parking Garages \| Los Angeles, CA \| Limited Liability Company One
Equity Method Investments [Roll Forward]
Joint venture, ownership (in percentage)			40.00%

Real Estate Investments - Dispositions (Details) $ in Thousands								6 Months Ended
	Jun. 30, 2023 USD ($) ft² property	May 12, 2023 USD ($) ft² a	Mar. 30, 2023 USD ($) ft²	Mar. 23, 2023 USD ($) ft²	Feb. 10, 2023 USD ($) ft²	Jan. 30, 2023 USD ($) ft²	Jan. 12, 2023 USD ($) ft² property disposition_transaction	Jun. 30, 2023 USD ($) ft² property	Aug. 02, 2023 USD ($) ft²
Real Estate Dispositions [Line Items]
Number of owned real estate properties \| property	680							680
Real Estate Dispositions
Real Estate Dispositions [Line Items]
SALE PRICE	$ 222,110							$ 222,110
CLOSING ADJUSTMENTS	(16,202)							(16,202)
COMPANY-FINANCED MORTGAGE NOTES	(45,000)							(45,000)
NET PROCEEDS								160,908
NET REAL ESTATE INVESTMENT	221,801							221,801
OTHER (INCLUDING RECEIVABLES)	$ (2,636)							(2,636)
GAIN/(IMPAIRMENT)								$ (13,257)
SQUARE FOOTAGE \| ft²	492,341							492,341
Tampa Fl & Miami FL
Real Estate Dispositions [Line Items]
SALE PRICE							$ 93,250
CLOSING ADJUSTMENTS							(5,875)
COMPANY-FINANCED MORTGAGE NOTES							0
NET PROCEEDS							87,375
NET REAL ESTATE INVESTMENT							87,302
OTHER (INCLUDING RECEIVABLES)							(888)
GAIN/(IMPAIRMENT)							$ 961
SQUARE FOOTAGE \| ft²							224,037
Number of owned real estate properties \| property							2
Number of property dispositions \| disposition_transaction							2
Dallas, TX
Real Estate Dispositions [Line Items]
SALE PRICE						$ 19,210
CLOSING ADJUSTMENTS						(141)
COMPANY-FINANCED MORTGAGE NOTES						0
NET PROCEEDS						19,069
NET REAL ESTATE INVESTMENT						18,986
OTHER (INCLUDING RECEIVABLES)						43
GAIN/(IMPAIRMENT)						$ 40
SQUARE FOOTAGE \| ft²						36,691
Joint venture, ownership (in percentage)						40.00%
St. Louis, MO
Real Estate Dispositions [Line Items]
SALE PRICE					$ 350
CLOSING ADJUSTMENTS					(18)
COMPANY-FINANCED MORTGAGE NOTES					0
NET PROCEEDS					332
NET REAL ESTATE INVESTMENT					398
OTHER (INCLUDING RECEIVABLES)					0
GAIN/(IMPAIRMENT)					$ (66)
SQUARE FOOTAGE \| ft²					6,500
Los Angeles, CA
Real Estate Dispositions [Line Items]
SALE PRICE		$ 3,300	$ 75,000	$ 21,000
CLOSING ADJUSTMENTS		(334)	(8,079)	(526)
COMPANY-FINANCED MORTGAGE NOTES		0	(45,000)	0
NET PROCEEDS		2,966	21,921	20,474
NET REAL ESTATE INVESTMENT		3,268	88,624	20,610
OTHER (INCLUDING RECEIVABLES)		0	(803)	52
GAIN/(IMPAIRMENT)		$ (302)	$ (20,900)	$ (188)
SQUARE FOOTAGE \| ft²		0	147,078	37,165
Mortgage note			$ 45,000
Albany, NY
Real Estate Dispositions [Line Items]
SALE PRICE	$ 10,000							$ 10,000
CLOSING ADJUSTMENTS	(1,229)							(1,229)
COMPANY-FINANCED MORTGAGE NOTES	0							0
NET PROCEEDS	8,771
NET REAL ESTATE INVESTMENT	2,613							2,613
OTHER (INCLUDING RECEIVABLES)	(1,040)							$ (1,040)
GAIN/(IMPAIRMENT)	$ 7,198
SQUARE FOOTAGE \| ft²	40,870							40,870
Area of land \| a		0.34
Houston, TX \| Subsequent event
Real Estate Dispositions [Line Items]
SALE PRICE									$ 8,320
SQUARE FOOTAGE \| ft²									57,170

Real Estate Investments - Assets Held for Sale (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($) property	Dec. 31, 2022 USD ($) property
Long Lived Assets Held-for-sale [Line Items]
Number of properties classified as held for sale \| property	3	1
Impairment charges on net real estate assets held for sale	$ 3,600
Land	1,424,453	$ 1,439,798
Building and improvements	11,188,821	11,332,037
Real estate investment property, at cost	13,883,971	14,057,625
Accumulated depreciation	(1,983,944)	(1,645,271)
Real estate assets held for sale, net	11,900,027	12,412,354
Assets held for sale, net	151	18,893
Liabilities of assets held for sale	222	437
Disposal Group, Held-for-sale, Not Discontinued Operations
Long Lived Assets Held-for-sale [Line Items]
Land	205	1,700
Building and improvements	1,736	15,164
Lease intangibles	2,242	1,986
Real estate investment property, at cost	4,183	18,850
Accumulated depreciation	(4,183)	0
Real estate assets held for sale, net	0	18,850
Other assets, net	151	43
Assets held for sale, net	151	18,893
Accounts payable and accrued liabilities	222	282
Other liabilities	0	155
Liabilities of assets held for sale	$ 222	$ 437

Leases - Lease Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Leases - Lease Income (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Rental income	$ 329,680	$ 140,632	$ 653,773	$ 279,121

Leases - Lessor Accounting (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Future Operating Lease Payments Receivable [Abstract]
2023	$ 467,393
2024	861,323
2025	751,369
2026	648,352
2027	536,874
2028 and thereafter	1,950,019
Total	$ 5,215,330

Leases - Ground Leases (Details) ft² in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) lease property	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) ft² lease property	Jun. 30, 2022 USD ($)
Lessee, Lease, Description [Line Items]
Number of properties subject to ground leases \| property	241		241
Square feet subject to ground leases \| ft²			17.5
Number of prepaid ground leases			75
Amortization of prepaid rent \| $	$ 0.3	$ 0.1	$ 0.7	$ 0.3
Number of non-prepaid ground leases	166		166
Minimum
Lessee, Lease, Description [Line Items]
Ground lease, initial term	40 years		40 years
Maximum
Lessee, Lease, Description [Line Items]
Ground lease, initial term	99 years		99 years

Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
OPERATING
2023	$ 7,315
2024	15,011
2025	14,597
2026	14,631
2027	14,701
2028 and thereafter	929,853
Total undiscounted lease payments	996,108
Discount	(717,629)
Lease liabilities	278,479	$ 279,895
FINANCING
2023	992
2024	2,182
2025	2,218
2026	2,255
2027	2,294
2028 and thereafter	396,398
Total undiscounted lease payments	406,339
Discount	(332,710)
Lease liabilities	$ 73,629	$ 72,939

Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Leases - Lease Cost (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Operating lease cost
Operating lease expense	$ 5,329	$ 1,194	$ 10,436	$ 2,409
Variable lease expense	2,235	1,038	4,371	2,062
Finance lease cost
Amortization of right-of-use assets	387	331	774	503
Interest on lease liabilities	923	765	1,841	1,052
Total lease expense	8,874	3,328	17,422	6,026
Other information
Operating cash flows outflows related to operating leases	5,230	1,799	11,190	4,596
Operating cash flows outflows related to financing leases	541	509	1,094	767
Financing cash flows outflows related to financing leases	6	0	17	51
Right-of-use assets obtained in exchange for new finance lease liabilities	$ 0	$ 0	$ 0	$ 40,589
Weighted-average years remaining lease term (excluding renewal options) - operating leases	47 years 3 months 18 days	47 years 4 months 24 days	47 years 3 months 18 days	47 years 4 months 24 days
Weighted-average years remaining lease term (excluding renewal options) - finance leases	58 years 4 months 24 days	61 years 8 months 12 days	58 years 4 months 24 days	61 years 8 months 12 days
Weighted-average discount rate - operating leases	5.80%	5.60%	5.80%	5.60%
Weighted-average discount rate - finance leases	5.00%	5.00%	5.00%	5.00%

Notes and Bonds Payable (Details) - USD ($)	Apr. 26, 2023	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Notes and bonds payable		$ 5,340,272,000	$ 5,351,827,000
Extension period for maturity date	1 year
Debt fees	$ 400,000
Mortgage notes payable \| Minimum
Debt Instrument [Line Items]
Effective interest rate		3.57%
Mortgage notes payable \| Maximum
Debt Instrument [Line Items]
Effective interest rate		4.84%
Line of credit \| $1.5 billion Unsecured Credit Facility
Debt Instrument [Line Items]
Notes and bonds payable		$ 354,000,000	385,000,000
Effective interest rate		6.05%
Credit facility		$ 1,500,000,000
Medium-term notes \| $350 million Unsecured Term Loan due 2023, net of issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 349,499,000	349,114,000
Effective interest rate		6.21%
Face amount		$ 350,000,000
Medium-term notes \| $200 million Unsecured Term Loan due 2024, net of issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 199,786,000	199,670,000
Effective interest rate		6.21%
Face amount		$ 200,000,000
Medium-term notes \| $300 million Unsecured Term Loan due 2025, net of issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 299,947,000	299,936,000
Effective interest rate		6.21%
Face amount		$ 300,000,000
Medium-term notes \| $150 million Unsecured Term Loan due 2026, net of issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 149,569,000	149,495,000
Effective interest rate		6.21%
Face amount		$ 150,000,000
Medium-term notes \| $200 million Unsecured Term Loan due 2027, net of issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 199,432,000	199,362,000
Effective interest rate		6.21%
Face amount		$ 200,000,000
Medium-term notes \| $300 million Unsecured Term Loan due 2028, net of issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 298,079,000	297,869,000
Effective interest rate		6.21%
Face amount		$ 300,000,000
Senior notes \| Senior Notes due 2025, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 249,298,000	249,115,000
Effective interest rate		4.12%
Senior notes \| Senior Notes due 2026, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 575,256,000	571,587,000
Effective interest rate		4.94%
Senior notes \| Senior Notes due 2027, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 481,615,000	479,553,000
Effective interest rate		4.76%
Senior notes \| Senior Notes due 2028
Debt Instrument [Line Items]
Notes and bonds payable		$ 297,138,000	296,852,000
Effective interest rate		3.85%
Senior notes \| Senior notes due 2030, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 570,356,000	565,402,000
Effective interest rate		5.30%
Senior notes \| Senior notes due 2030, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 296,579,000	296,385,000
Effective interest rate		2.72%
Senior notes \| Senior Notes due 2031, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable		$ 295,795,000	295,547,000
Effective interest rate		2.25%
Senior notes \| Senior Notes due 2031
Debt Instrument [Line Items]
Notes and bonds payable		$ 640,999,000	632,693,000
Effective interest rate		5.13%
Mortgages \| Mortgage notes payable
Debt Instrument [Line Items]
Notes and bonds payable		$ 82,924,000	$ 84,247,000

Notes and Bonds Payable - Narrative (Details) - Mortgages - Subsequent event $ in Millions	Aug. 01, 2023 USD ($) ft²
Debt Instrument [Line Items]
Effective interest rate	3.31%
Outstanding principal repaid \| $	$ 9.8
GEORGIA
Debt Instrument [Line Items]
Encumbered square footage \| ft²	66,984

Derivative Financial Instruments - Cash Flow Hedges of Interest Rate Risk (Details) $ in Thousands	Jun. 30, 2023 USD ($) derivative
Derivative [Line Items]
Number of instruments \| derivative	14
Interest Rate Swaps \| Cash flow hedging \| Designated as hedging instrument
Derivative [Line Items]
AMOUNT	$ 1,000,000
Weighted average interest rate (percent)	3.17%
Interest Rate Swap, Expiring January 15, 2024 \| Cash flow hedging \| Designated as hedging instrument
Derivative [Line Items]
AMOUNT	$ 200,000
Weighted average interest rate (percent)	1.21%
Interest Rate Swap, Expiring May 1, 2026 \| Cash flow hedging \| Designated as hedging instrument
Derivative [Line Items]
AMOUNT	$ 100,000
Weighted average interest rate (percent)	2.15%
Interest Rate Swap, Expiring June 1, 2026 \| Cash flow hedging \| Designated as hedging instrument
Derivative [Line Items]
AMOUNT	$ 150,000
Weighted average interest rate (percent)	3.83%
Interest Rate Swap, Expiring December 1, 2026 \| Cash flow hedging \| Designated as hedging instrument
Derivative [Line Items]
AMOUNT	$ 150,000
Weighted average interest rate (percent)	3.84%
Interest Rate Swap, Expiring June 1, 2027 \| Cash flow hedging \| Designated as hedging instrument
Derivative [Line Items]
AMOUNT	$ 150,000
Weighted average interest rate (percent)	4.13%
Interest Rate Swap, Expiring December 1, 2027 \| Cash flow hedging \| Designated as hedging instrument
Derivative [Line Items]
AMOUNT	$ 250,000
Weighted average interest rate (percent)	3.79%

Derivative Financial Instruments - Fair Value of Derivative Instruments on the Balance Sheet (Details) - Designated as hedging instrument $ in Thousands	Jun. 30, 2023 USD ($)
Settled interest rate swaps
Derivative [Line Items]
Liability derivatives	$ 14,798
Other liabilities \| Interest rate swaps
Derivative [Line Items]
Liability derivatives	(1,248)
Other assets \| Interest rate swaps
Derivative [Line Items]
Liability derivatives	$ 16,046

Derivative Financial Instruments - Effect of Cash Flow Hedging on AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Derivative [Line Items]
(Gain)/loss recognized in AOCI on derivative	$ (21,523)	$ (1,663)	$ (12,981)	$ (6,822)
Gain (Loss), Reclassified from AOCI into income	(3,419)	823	(5,703)	1,909
Interest expense
Derivative [Line Items]
Gain (Loss), Reclassified from AOCI into income	(3,419)	823	(5,703)	1,909
Interest rate swaps
Derivative [Line Items]
(Gain)/loss recognized in AOCI on derivative	(21,523)	(1,663)	(12,981)	(6,822)
Interest rate swaps \| Interest expense
Derivative [Line Items]
Gain (Loss), Reclassified from AOCI into income	(3,568)	674	(6,000)	1,612
Settled treasury hedges
Derivative [Line Items]
(Gain)/loss recognized in AOCI on derivative	0	0	0	0
Settled treasury hedges \| Interest expense
Derivative [Line Items]
Gain (Loss), Reclassified from AOCI into income	107	107	213	213
Settled interest rate swaps
Derivative [Line Items]
(Gain)/loss recognized in AOCI on derivative	0	0	0	0
Settled interest rate swaps \| Interest expense
Derivative [Line Items]
Gain (Loss), Reclassified from AOCI into income	$ 42	$ 42	$ 84	$ 84

Derivative Financial Instruments - Derivative Instruments Designated as Cash Flow Hedges (Details) $ in Millions	Jun. 30, 2023 USD ($)
Derivative [Line Items]
Derivatives in net asset position	$ 15.4
Active Interest Rate Swap
Derivative [Line Items]
Interest rate cash flow hedge gain (loss) to be reclassified to interest expense during the next 12 months	14.4
Settled Interest Rate Swaps
Derivative [Line Items]
Interest rate cash flow hedge gain (loss) to be reclassified to interest expense during the next 12 months	$ 0.6

Commitment and Contingencies - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Construction activity and development properties	$ 49.0

Stockholders' Equity - Reconciliation of Beginning and Ending Common Stock Outstanding (Details) - shares	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Reconciliation of the beginning and ending common stock outstanding
Balance, beginning of period (in shares)	380,590,000
Balance, end of period (in shares)	380,858,000	380,590,000
Common Stock
Reconciliation of the beginning and ending common stock outstanding
Balance, beginning of period (in shares)	380,589,894	150,457,433
Issuance of common stock (in shares)	4,817	229,618,304
Non-vested share-based awards, net of withheld shares (in shares)	262,821	514,157
Balance, end of period (in shares)	380,857,532	380,589,894

Stockholders' Equity (Stock Transactions - Narrative) (Details)			1 Months Ended		3 Months Ended			6 Months Ended
	Aug. 01, 2023 $ / shares	Jan. 04, 2023 USD ($) $ / shares shares	Jan. 31, 2023	Jan. 31, 2022 $ / shares	Jun. 30, 2023 USD ($) director $ / shares shares	Mar. 31, 2023 USD ($) shares	Jun. 30, 2022 $ / shares shares	Jun. 30, 2023 USD ($) director $ / shares shares	Jun. 30, 2022 $ / shares shares
Class of Stock [Line Items]
Dividends paid per common share, during the period (in dollars per share) \| $ / shares					$ 0.31		$ 0.31	$ 0.62	$ 0.62
Award vesting period								3 years
Subsequent event
Class of Stock [Line Items]
Dividends declared per common share, during the period (in dollars per share) \| $ / shares	$ 0.31
Executive Incentive Program \| Directors \| Share-Based Payment Arrangement, Nonemployee
Class of Stock [Line Items]
Grant date fair value \| $		$ 7,100,000
Stock incentive plan
Class of Stock [Line Items]
Granted (in shares)					43,276		26,840	325,816	442,024
Operating Partnership Performance Units
Class of Stock [Line Items]
Percentage of restricted stock units		43.00%
Weighted average grant date fair value (in dollars per share) \| $ / shares		$ 15.85
Award performance period			3 years
Operating Partnership Performance Units \| Performance conditions
Class of Stock [Line Items]
Percentage of restricted stock units		57.00%
Weighted average grant date fair value (in dollars per share) \| $ / shares		$ 20.21
Operating Partnership Performance Units \| Absolute TSR Component
Class of Stock [Line Items]
Weighted average grant date fair value (in dollars per share) \| $ / shares				$ 12.24
Operating Partnership Performance Units \| Relative TSR Component
Class of Stock [Line Items]
Weighted average grant date fair value (in dollars per share) \| $ / shares				13.98
Operating Partnership Performance Units \| Executive Incentive Program \| Share-Based Payment Arrangement, Nonemployee
Class of Stock [Line Items]
Granted (in shares)		448,249
Award vesting period		5 years
Non-vested Stock Award \| Executive Incentive Program
Class of Stock [Line Items]
Grant date fair value \| $						$ 5,400,000
Granted (in shares)						270,494
Non-vested Stock Award \| Executive Incentive Program \| Directors
Class of Stock [Line Items]
Grant date fair value \| $					$ 700,000
Granted (in shares)					42,768
Non-vested Stock Award \| Executive Incentive Program \| Minimum
Class of Stock [Line Items]
Award vesting period						3 years
Non-vested Stock Award \| Executive Incentive Program \| Maximum
Class of Stock [Line Items]
Award vesting period						8 years
Non-vested Stock Award \| LTIP-D \| Directors
Class of Stock [Line Items]
Grant date fair value \| $					$ 1,100,000
Granted (in shares)					57,868
Number of directors \| director					12			12
Non-vested Stock Award \| LTIP-D \| New Employee
Class of Stock [Line Items]
Granted (in shares)					508
Restricted stock \| Stock incentive plan
Class of Stock [Line Items]
Shares withheld to pay estimated withholding taxes (in shares)								38,632	6,727
Restricted Stock Units (RSUs)
Class of Stock [Line Items]
Granted (in shares)					0			165,174
Award vesting period		5 years
Percentage of restricted stock units		43.00%
Weighted average grant date fair value (in dollars per share) \| $ / shares		$ 22.55
Restricted Stock Units (RSUs) \| Performance conditions
Class of Stock [Line Items]
Percentage of restricted stock units		57.00%
Weighted average grant date fair value (in dollars per share) \| $ / shares		$ 20.21
Restricted Stock Units (RSUs) \| Absolute TSR Component
Class of Stock [Line Items]
Weighted average grant date fair value (in dollars per share) \| $ / shares				24.23
Restricted Stock Units (RSUs) \| Relative TSR Component
Class of Stock [Line Items]
Weighted average grant date fair value (in dollars per share) \| $ / shares				$ 27.84
Restricted Stock Units (RSUs) \| Executive Incentive Program
Class of Stock [Line Items]
Grant date fair value \| $		$ 3,700,000
Granted (in shares)		165,174
Options under the Employee Stock Option Plan
Class of Stock [Line Items]
Weighted-average incremental shares of common stock excluded from the computation (in shares)					27,484
Options under the Employee Stock Option Plan \| Operating Partnership Performance Units
Class of Stock [Line Items]
Nonvested shares (in shares)					4,042,993			4,042,993
Options under the Employee Stock Option Plan \| Non-vested Stock Award
Class of Stock [Line Items]
Nonvested shares (in shares)					442,263			442,263
Common Stock
Class of Stock [Line Items]
Amount remaining available for issuance under the new ATM \| $					$ 750,000,000			$ 750,000,000

Stockholders' Equity - Computation of Basic and Diluted Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Weighted average common shares outstanding
Weighted average common shares outstanding (in shares)	380,829,011	151,620,897	380,812,981	151,230,064
Non-vested shares (in shares)	(1,932,334)	(1,945,042)	(1,952,350)	(1,908,652)
Weighted average common shares outstanding - basic (in shares)	378,896,677	149,675,855	378,860,631	149,321,412
Dilutive effect of employee stock purchase plan (in shares)	0	62,694	0	75,394
Weighted average common shares outstanding - diluted (in shares)	378,896,677	149,738,549	378,860,631	149,396,806
Net (loss) income attributable to common stockholders	$ (82,759)	$ 6,130	$ (169,884)	$ 48,357
Dividends paid on nonvested share-based awards	(588)	(601)	(1,193)	(1,207)
Net (loss) income applicable to common stockholders - basic	$ (83,347)	$ 5,529	$ (171,077)	$ 47,150
Basic earnings per common share - net income (in dollars per share)	$ (0.22)	$ 0.04	$ (0.45)	$ 0.32
Diluted earnings per common share- net income (in dollars per share)	$ (0.22)	$ 0.04	$ (0.45)	$ 0.32

Stockholders' Equity - Summary of Activity under Stock-Based Incentive Plans and Restricted Stock Unit (Details) - $ / shares	3 Months Ended			6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Restricted Stock Units (RSUs)
Summary of the activity under the incentive plans
Share-based awards, beginning of period (in shares)	363,250	294,932		294,932
Granted (in shares)	0			165,174
Vested/Forfeited (in shares)	0			(17,606)
Probability adjustment of 2022 RSUs (in shares)	0			(79,250)
Share-based awards, ending of period (in shares)	363,250	363,250		363,250
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based awards, beginning of period, Weighted average grant date fair value (in dollar per share)	$ 28.57	$ 33.04		$ 33.04
Granted, Weighted average grant date fair value (in dollar per share)	0			22.55
Vested/Forfeited, Weighted average grant date fair value (in dollar per share)	0			33.04
Probability adjustment, Weighted average grant date fair value (in dollar per share)	0			31.68
Share-based awards, ending of period, Weighted average grant date fair value (in dollar per share)	$ 28.57	$ 28.57		$ 28.57
Stock incentive plan
Summary of the activity under the incentive plans
Share-based awards, beginning of period (in shares)	1,955,445	1,795,128	1,951,551	1,795,128	1,562,028
Granted (in shares)	43,276		26,840	325,816	442,024
Vested/Forfeited (in shares)	(62,640)		(36,682)	(164,360)	(61,047)
Forfeited (net change) (in shares)	(3,860)		0	(24,363)	(1,296)
Share-based awards, ending of period (in shares)	1,932,221	1,955,445	1,941,709	1,932,221	1,941,709

Stockholders' Equity - Schedule of Stock Options, Valuation Assumptions (Details)	Jan. 04, 2023 $ / shares
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Volatility	34.00%
Expected term	3 years
Risk-free rate	4.42%
Stock price (in dollar per share)	$ 20.21
Operating Partnership Performance Units
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Volatility	34.00%
Expected term	3 years
Risk-free rate	4.42%
Stock price (in dollar per share)	$ 20.21

Stockholders' Equity - Summary of Activity under Employee Stock Purchase Plan (Details) - Employee stock purchase plan - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Summary of the Employee Stock Purchase Plan activity
Outstanding and exercisable, beginning of period (in shares)	183,426	427,802	340,976	348,514
Granted (in shares)	0	0	0	255,960
Exercised (in shares)	(1,687)	(1,965)	(4,817)	(12,518)
Forfeited (in shares)	(2,370)	(20,303)	(23,791)	(45,789)
Expired (in shares)	0	0	(132,999)	(140,633)
Outstanding and exercisable, end of period (in shares)	179,369	405,534	179,369	405,534

Stockholders' Equity - Amortization of Compensation for Nonvested Shares (Details) $ in Millions	Jun. 30, 2023 USD ($)
Equity [Abstract]
2023	$ 7.7
2024	13.3
2025	10.8
2026	8.0
2027	2.4
2028 and thereafter	0.5
Total	$ 42.7

Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
CARRYING VALUE
Derivative [Line Items]
Notes and bonds payable	$ 5,340.3	$ 5,351.8
Real estate notes receivable	151.5	99.6
FAIR VALUE
Derivative [Line Items]
Notes and bonds payable	5,107.5	5,149.6
Real estate notes receivable	$ 149.0	$ 99.6

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