UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
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, 2021
or
For the quarterly period ended:June 30, 2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to

For the transition period from            to            
Commission File Number: 001-35568 (Healthcare Realty Trust of America, Inc.)Incorporated)
Commission File Number: 333-190916 (Healthcare Trust of America Holdings, LP)
_________________________ 
HEALTHCARE REALTY TRUST OF AMERICA, INC.
HEALTHCARE TRUST OF AMERICA HOLDINGS, LPINCORPORATED

(Exact name of registrantRegistrant as specified in its charter)
Maryland(Healthcare Realty Trust of America, Inc.)Incorporated)20-4738467
Delaware(Healthcare Trust of America Holdings, LP)20-4738347
(State or other jurisdiction of incorporationIncorporation or organization)(I.R.S. Employer Identification No.)
16435 N. Scottsdale Road, Suite 320,Scottsdale,Arizona85254(480)998-3478
(Address of Principal Executive Office and Zip Code)(Registrant’s telephone number, including area code)
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.htareit.comwww.healthcarerealty.com
(Internet address)
N/AHealthcare Trust of America, Inc.
16435 N. Scottsdale Road, Suite 320
Scottsdale, Arizona 85254
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuantRegistered Pursuant to Section 12(b) of the Act:
Title of each classEach ClassTrading symbol(s)SymbolName of each exchangeEach Exchange on which registeredWhich Registered
Common stock, $0.01 par value per shareHTAHRNew 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.  

Healthcare Trust of America, Inc.
☒
Yes
¨ ☐
No
Healthcare Trust of America Holdings, LP
☒
Yes
¨ No

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

Healthcare Trust of America, Inc.
☒
Yes
¨ ☐
No
Healthcare Trust of America Holdings, LP
☒
Yes
¨ No

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

Healthcare Trust of America, Inc.
☒
Large accelerated filer☐Accelerated filer☐Non-accelerated filer
Healthcare Trust of America Holdings, LP☐Large accelerated filer☐Accelerated filer
☒
Non-accelerated filer
Healthcare Trust of America, Inc.☐Smaller reporting company☐Emerging growth company
Healthcare Trust of America Holdings, LP☐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.
☐
Healthcare Trust of America, Inc.☐
Healthcare Trust of America Holdings, LP☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Healthcare Trust of America, Inc.☐Yes
x No
Healthcare Trust of America Holdings, LP☐Yes
x No
As of July 29, 2021, there were 218,849,312 shares of Class A common stock of Healthcare Trust of America, Inc. outstanding.
☐Yes☒No


As of August 5, 2022, the Registrant had 380,549,204 shares of Common Stock outstanding.


Explanatory Note
This quarterly report combines the Quarterly Reports on Form 10-Q
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) (“Quarterly Report”Legacy HR”) for the quarter ended June 30, 2021, of, Healthcare Trust of America, Inc. (“HTA”), a Maryland corporation and(now known as Healthcare Realty Trust Incorporated) (“Legacy HTA”), Healthcare Trust of America Holdings, LP, (“HTALP”), a Delaware limited partnership. Unless otherwise indicated or unlesspartnership (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 context requires otherwise, all references in this Quarterly Reportsurviving entity and a wholly-owned subsidiary of Legacy HTA (the “Merger”). Immediately following the Merger, Legacy HR converted to “we,” “us,” “our,” “the Company” or “our Company” refera 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 HTALP, collectively, and all references to “common stock” shall referassignment agreement to the Class A common stockOP such that Legacy HR became a wholly-owned subsidiary of HTA.
HTA operates asthe OP. As a real estate investment trust (“REIT”) and is the general partnerresult, Legacy HR became a part of HTALP. As of June 30, 2021, HTA owned a 98.4% partnership interest in HTALP, and other limited partners, including some of HTA’s directors, executive officers and their affiliates, owned the remaining partnership interest (including the long-term incentive plan units (“LTIP” Units)) in HTALP. As the sole general partner of HTALP, HTA has the full, exclusive and complete responsibility for HTALP’s day-to-day management and control, including its compliance with the Securities and Exchange Commission (“SEC”) filing requirements.
We believe it is important to understand the few differences between HTA and HTALP in the context of how we operate as an integrated consolidated company. HTA operates as 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 (the “Combined Company”) 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, trades on the New York Stock Exchange (the “NYSE”) under the ticker symbol “HR”.

For accounting purposes, the Merger is treated as a “reverse acquisition” in which HTALPLegacy HTA is considered the legal acquirer and its subsidiaries hold substantially all ofLegacy HR is considered the assets. HTA’s only material asset is its ownership of partnership units of HTALP.accounting acquirer. As a result, HTA does not conduct business itself, other than acting as the sole general partner of HTALP, issuing public equity from time to time and guaranteeing certain debts of HTALP. HTALP conducts the operations of the business and issues publicly-traded debt, but has no publicly-traded equity. Except for net proceeds from public equity issuances by HTA, which are generally contributed to HTALP in exchange for partnership units of HTALP, HTALP generates the capital required for the business through its operations and by direct or indirect incurrence of indebtedness or through the issuance of its partnership units (“OP Units”).
Non-controlling interests, stockholders’ equity and partners’ capital are the primary areas of difference between the condensed consolidatedhistorical financial statements of HTA and HTALP. Limited partnership units in HTALP are accounted for as partners’ capital in HTALP’s condensed consolidated balance sheets and as a non-controlling interest reflected within equity in HTA’s condensed consolidated balance sheets. The differences between HTA’s stockholders’ equity and HTALP’s partners’ capital are due to the differences inaccounting acquiror, Legacy HR, become the equity issued by HTA and HTALP, respectively.
We believe combining the Quarterly Reports of HTA and HTALP, including the notes to the condensed consolidatedhistorical financial statements into this single Quarterly Report results in the following benefits:
•enhances stockholders’ understanding of HTA and HTALP by enabling stockholders to view the business as a whole in the same manner that management views and operates the business;
•eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure inLegacy HTA. Because this Quarterly Report applieson Form 10-Q is being filed by the Combined Company with respect to bothperiods ended prior to the Merger, this report contains the financial statements and other information of Legacy HR as of June 30, 2022. The financial statements and other information of Legacy HTA and HTALP; and
•creates time and cost efficiencies through the preparationOP as of June 30, 2022 are contained in a single combined QuarterlyCurrent Report instead of two separate Quarterly Reports.
In order to highlighton Form 8-K filed by the material differences between HTA and HTALP,Combined Company concurrently with this Quarterly Report includes sections that separately presenton Form 10-Q. Future periodic reports for periods ending following the Merger will reflect financial and discuss areas that are materially different between HTA and HTALP, including:
•the condensed consolidated financial statements;
•certain accompanying notes to the condensed consolidated financial statements, including Note 8 - Debt, Note 11 - Stockholders’ Equity and Partners’ Capital, Note 13 - Per Share Data of HTA, and Note 14 - Per Unit Data of HTALP;
•as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), the Funds From Operations (“FFO”) and Normalized FFO in Part 1, Item 2 of this Quarterly Report;
•the Controls and Procedures in Part 1, Item 4 of this Quarterly Report; and
•the Certificationsother information of the Chief Executive Officer and the Chief Financial Officer included as Exhibits 31 and 32 to this Quarterly Report.Combined Company.

In the sectionsFor purposes of this Quarterly Report that combine disclosure foron Form 10-Q, references to the “Company” are to Legacy HR and reference to the “Combined Company” are to Legacy HR, Legacy HTA and HTALP, this Quarterly Report refersthe OP after giving effect to actions or holdings as being actions or holdings of the Company. Although HTALP (directly or indirectly through one of its subsidiaries) is generally the entity that enters into contracts, holds assets and issues or incurs debt, management believes this presentation is appropriate for the reasons set forth above and because the business of the Company is a single integrated enterprise operated through HTALP.Merger.
2



HEALTHCARE REALTY TRUST OF AMERICA, INC. ANDINCORPORATED
HEALTHCARE TRUST OF AMERICA HOLDINGS, LPFORM 10-Q
TABLE OF CONTENTSJune 30, 2022


    Table of Contents
Page
PART I - FINANCIAL INFORMATION
41
Healthcare Trust of America, Inc.
1
2
3
4
5
6
7
8
Healthcare Trust of America Holdings, LP
9
10
11
12
13
Notes for Healthcare Trust of America, Inc. and Healthcare Trust of America Holdings, LP
14
2921
4333
4334
PART II - OTHER INFORMATION
4434
4434
4438
4438
SignaturesSIGNATURE
4740


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, 2022
DECEMBER 31, 2021
Real estate properties
Land$456,306 $387,918 
Buildings, improvements and lease intangibles4,673,026 4,458,119 
Personal property11,799 11,761 
Investment in financing receivable, net118,446 186,745 
Financing lease right-of-use assets71,632 31,576 
Construction in progress16,728 3,974 
Land held for development22,952 24,849 
Total real estate properties5,370,889 5,104,942 
Less accumulated depreciation and amortization(1,402,509)(1,338,743)
Total real estate properties, net3,968,380 3,766,199 
Cash and cash equivalents34,312 13,175 
Assets held for sale, net— 57 
Operating lease right-of-use assets126,204 128,386 
Investments in unconsolidated joint ventures210,781 161,942 
Other assets, net209,200 189,160 
Total assets$4,548,877 $4,258,919 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Notes and bonds payable$2,063,755 $1,801,325 
Accounts payable and accrued liabilities84,210 86,108 
Liabilities of assets held for sale— 294 
Operating lease liabilities94,748 96,138 
Financing lease liabilities62,195 22,551 
Other liabilities66,102 67,387 
Total liabilities2,371,010 2,073,803 
Commitments and contingencies00
Stockholders' equity
Preferred stock, $.01 par value per share; 50,000 shares authorized; none issued and outstanding— — 
Common stock, $.01 par value per share; 300,000 shares authorized; 151,637 and 150,457 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively1,516 1,505 
Additional paid-in capital4,002,526 3,972,917 
Accumulated other comprehensive loss(1,250)(9,981)
Cumulative net income attributable to common stockholders1,314,515 1,266,158 
Cumulative dividends(3,139,440)(3,045,483)
Total stockholders' equity2,177,867 2,185,116 
Total liabilities and stockholders' equity$4,548,877 $4,258,919 
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these financial statements.


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Table of Contents

Healthcare Realty Trust Incorporated
Condensed Consolidated Statements of Income
For the Three and Six Months Ended June 30, 2022 and 2021
Amounts in thousands, except per share data
Unaudited
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
2022202120222021
Revenues
Rental income$140,632 $128,486 $279,121 $256,874 
Interest from financing receivable, net1,957 510 3,887 510 
Other operating2,738 2,427 5,213 4,378 
145,327 131,423 288,221 261,762 
Expenses
Property operating57,010 51,509 114,474 103,724 
General and administrative10,540 8,545 21,576 17,044 
Acquisition and pursuit costs1,352 670 2,655 1,414 
Merger-related costs7,085 — 13,201 — 
Depreciation and amortization55,731 49,826 109,772 99,905 
131,718 110,550 261,678 222,087 
Other income (expense)
Gain on sales of real estate properties8,496 20,970 53,280 39,860 
Interest expense(15,543)(13,261)(29,204)(26,523)
Loss on extinguishment of debt— — (1,429)— 
Impairment of real estate properties— (5,078)25 (5,912)
Equity loss from unconsolidated joint ventures(307)(146)(652)(220)
Interest and other (expense) income, net(125)(262)(206)238 
(7,479)2,223 21,814 7,443 
Net income$6,130 $23,096 $48,357 $47,118 
Basic earnings per common share$0.04 $0.16 $0.32 $0.33 
Diluted earnings per common share$0.04 $0.16 $0.32 $0.33 
Weighted average common shares
outstanding - basic
149,676 141,917 149,321 140,354 
Weighted average common shares
outstanding - diluted
149,739 142,049 149,397 140,468 

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


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Table of Contents

Healthcare Realty Trust Incorporated
Condensed Consolidated Statements of Comprehensive Income
For the Three and Six Months Ended June 30, 2022 and 2021
Amounts in thousands
Unaudited
THREE MONTHS ENDED
 June 30,		SIX MONTHS ENDED
June 30,
2022202120222021
Net income$6,130 $23,096 $48,357 $47,118 
Other comprehensive income
Interest rate swaps
Reclassification adjustments for losses included in net income (interest expense)823 1,114 1,909 2,209 
Gains (losses) arising during the period on interest rate swaps1,663 (807)6,822 2,043 
2,486 307 8,731 4,252 
Comprehensive income$8,616 $23,403 $57,088 $51,370 
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these financial statements.


3


Table of Contents

Healthcare Realty Trust Incorporated
Condensed Consolidated Statements of Equity
For the Three Months Ended June 30, 2022 and 2021
Amounts in thousands, except per share data
Unaudited
Common
Stock		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Cumulative
Net Income		Cumulative
Dividends		Total
Stockholders’
Equity
Balance at March 31, 2022$1,516 $3,999,060 $(3,736)$1,308,385 $(3,092,343)$2,212,882 
Issuance of common stock, net of issuance costs— 110 — — — 110 
Share-based compensation— 3,356 — — — 3,356 
Net income— — — 6,130 — 6,130 
Reclassification adjustments for losses included in net income (interest expense)

— — 823 — — 823 
Gains arising during the period on
interest rate swaps
— — 1,663 — — 1,663 
Dividends to common stockholders
($0.31 per share)
— — — — (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 
Common
Stock		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Cumulative
Net Income		Cumulative
Dividends		Total
Stockholders’
Equity
Balance at March 31, 2021$1,417 $3,699,867 $(13,887)$1,223,521 $(2,912,809)$1,998,109 
Issuance of common stock, net of issuance costs38 116,153 — — — 116,191 
Common stock redemptions— (55)— — — (55)
Share-based compensation— 2,627 — — — 2,627 
Net income— — — 23,096 — 23,096 
Reclassification adjustments for losses included in net income (interest expense)
— — 1,114 — — 1,114 
Losses arising during the period on interest rate swaps
— — (807)— — (807)
Dividends to common stockholders ($0.3025 per share)— — — — (44,021)(44,021)
Balance at June 30, 2021$1,455 $3,818,592 $(13,580)$1,246,617 $(2,956,830)$2,096,254 

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










3

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Table of Contents

PART I - FINANCIAL INFORMATIONHealthcare Realty Trust Incorporated
Condensed Consolidated Statements of Equity
Item 1. Financial Statements (Unaudited)For the Six Months Ended June 30, 2022 and 2021
HEALTHCARE TRUST OF AMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(InAmounts in thousands, except for share and per share data)data
(Unaudited)
June 30, 2021December 31, 2020
ASSETS
Real estate investments:
Land$596,084 $596,269 
Building and improvements6,542,944 6,507,816 
Lease intangibles617,731 628,621 
Construction in progress88,609 80,178 
7,845,368 7,812,884 
Accumulated depreciation and amortization(1,806,165)(1,702,719)
Real estate investments, net6,039,203 6,110,165 
Investment in unconsolidated joint venture63,593 64,360 
Cash and cash equivalents19,796 115,407 
Restricted cash70,542 3,358 
Receivables and other assets, net294,550 251,728 
Right-of-use assets - operating leases, net228,870 235,223 
Other intangibles, net8,850 10,451 
Total assets$6,725,404 $6,790,692 
LIABILITIES AND EQUITY
Liabilities:
Debt$3,073,465 $3,026,999 
Accounts payable and accrued liabilities172,653 200,358 
Derivative financial instruments - interest rate swaps10,755 14,957 
Security deposits, prepaid rent and other liabilities83,474 82,553 
Lease liabilities - operating leases195,210 198,367 
Intangible liabilities, net29,959 32,539 
Total liabilities3,565,516 3,555,773 
Commitments and contingencies00
Equity:
Preferred stock, $0.01 par value; 200,000,000 shares authorized; NaN issued and outstanding0 0 
Class A common stock, $0.01 par value; 1,000,000,000 shares authorized; 218,825,737 and 218,578,012 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively2,188 2,186 
Additional paid-in capital4,919,353 4,916,784 
Accumulated other comprehensive loss(12,734)(16,979)
Cumulative dividends in excess of earnings(1,807,753)(1,727,752)
Total stockholders’ equity3,101,054 3,174,239 
Non-controlling interests58,834 60,680 
Total equity3,159,888 3,234,919 
Total liabilities and equity$6,725,404 $6,790,692 
Unaudited
Common
Stock		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Cumulative
Net Income		Cumulative
Dividends		Total
Stockholders’
Equity
Balance at December 31, 2021$1,505 $3,972,917 $(9,981)$1,266,158 $(3,045,483)$2,185,116 
Issuance of common stock, net of issuance costs7 22,764 — — — 22,771 
Common stock redemptions— (206)— — — (206)
Share-based compensation4 7,051 — — — 7,055 
Net Income— — — 48,357 — 48,357 
Reclassification adjustments for losses included in net income (interest expense)

— — 1,909 — — 1,909 
Gains arising during the period on
interest rate swaps		— — 6,822 — — 6,822 
Dividends to common stockholders
($0.62 per share)
— — — — (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 
Common
Stock		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Cumulative
Net Income		Cumulative
Dividends		Total
Stockholders’
Equity
Balance at December 31, 2020$1,395 $3,635,341 $(17,832)$1,199,499 $(2,870,027)$1,948,376 
Issuance of common stock, net of issuance costs59 179,216 — — — 179,275 
Common stock redemptions(1)(1,610)— — — (1,611)
Share-based compensation2 5,645 — — — 5,647 
Net income— — — 47,118 — 47,118 
Reclassification adjustments for losses included in net income (interest expense)
— — 2,209 — — 2,209 
Gains arising during the period on interest rate swaps
— — 2,043 — — 2,043 
Dividends to common stockholders ($0.6050 per share)— — — — (86,803)(86,803)
Balance at June 30, 2021$1,455 $3,818,592 $(13,580)$1,246,617 $(2,956,830)$2,096,254 
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these condensed consolidated financial statements.
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Table of Contents
HEALTHCARE TRUST OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share data)
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Revenues:
Rental income$188,494 $178,670 $379,844 $364,201 
Interest and other operating income121 175 264 420 
Total revenues188,615 178,845 380,108 364,621 
Expenses:
Rental57,409 56,200 116,988 113,062 
General and administrative10,929 10,160 21,489 21,678 
Transaction66 32 162 172 
Depreciation and amortization74,977 74,927 151,251 152,592 
Interest expense23,133 24,277 46,119 48,149 
Impairment16,825 0 16,825 0 
Total expenses183,339 165,596 352,834 335,653 
Gain on sale of real estate, net32,753 0 32,753 1,991 
Income from unconsolidated joint venture406 379 798 801 
Other income304 97 307 173 
Net income$38,739 $13,725 $61,132 $31,933 
Net income attributable to non-controlling interests
(728)(236)(1,091)(543)
Net income attributable to common stockholders$38,011 $13,489 $60,041 $31,390 
Earnings per common share - basic:
Net income attributable to common stockholders$0.17 $0.06 $0.27 $0.14 
Earnings per common share - diluted:
Net income attributable to common stockholders$0.17 $0.06 $0.27 $0.14 
Weighted average common shares outstanding:
Basic218,822 218,483 218,787 217,588 
Diluted222,326 222,088 222,297 221,228 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Table of Contents

HEALTHCARE TRUST OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)Healthcare
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income$38,739 $13,725 $61,132 $31,933 
Other comprehensive income (loss)
Change in unrealized gains (losses) on cash flow hedges1,523 (3,228)4,315 (25,726)
Total other comprehensive income (loss)1,523 (3,228)4,315 (25,726)
Total comprehensive income40,262 10,497 65,447 6,207 
Comprehensive income attributable to non-controlling interests(754)(184)(1,161)(131)
Total comprehensive income attributable to common stockholders$39,508 $10,313 $64,286 $6,076 
Realty Trust Incorporated
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2022 and 2021
Amounts in thousands
Unaudited
OPERATING ACTIVITIES
SIX MONTHS ENDED
June 30,
20222021
Net income$48,357 $47,118 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization109,772 99,905 
Other amortization2,680 1,728 
Share-based compensation7,055 5,647 
Amortization of straight-line rent receivable (lessor)(3,292)(3,024)
Amortization of straight-line rent on operating leases (lessee)756 735 
Gain on sales of real estate properties(53,280)(39,860)
Loss on extinguishment of debt1,429 — 
Impairment of real estate properties(25)5,912 
Equity loss from unconsolidated joint ventures652 220 
Distributions from unconsolidated joint ventures108 — 
Non-cash interest from financing receivable(388)— 
Changes in operating assets and liabilities:
Other assets, including right-of-use-assets540 (4,746)
Accounts payable and accrued liabilities(3,166)(10,418)
Other liabilities2,923 2,412 
Net cash provided by operating activities114,121 105,629 
INVESTING ACTIVITIES
Acquisitions of real estate(287,004)(100,121)
Development of real estate(7,475)(1,415)
Additional long-lived assets(45,631)(41,839)
Investments in unconsolidated joint ventures(49,599)(45,018)
Investment in financing receivable498 (104,648)
Proceeds from sales of real estate properties108,044 90,144 
Net cash used in investing activities(281,167)(202,897)
FINANCING ACTIVITIES
Net borrowings on unsecured credit facility280,500 13,000 
Repayments of notes and bonds payable(18,224)(1,925)
Redemption of notes and bonds payable(2,184)— 
Dividends paid(93,774)(86,803)
Net proceeds from issuance of common stock22,768 179,381 
Common stock redemptions(852)(2,014)
Debt issuance and assumption costs— (252)
Payments made on finance leases(51)(683)
Net cash provided by financing activities188,183 100,704 
Increase in cash and cash equivalents21,137 3,436 
Cash and cash equivalents at beginning of period13,175 15,303 
Cash and cash equivalents at end of period$34,312 $18,739 
Supplemental Cash Flow Information
Interest paid$26,641 $24,659 
Invoices accrued for construction, tenant improvements and other capitalized costs$18,874 $19,506 
Capitalized interest$145 $154 

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


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HEALTHCARE TRUST OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
(Unaudited)
 Class A Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Cumulative Dividends in Excess of EarningsTotal Stockholders’ EquityNon-controlling InterestsTotal Equity
 SharesAmount
Balance as of December 31, 2019216,453 $2,165 $4,854,042 $4,546 $(1,502,744)$3,358,009 $72,635 $3,430,644 
Issuance of common stock, net1,675 17 50,003 — — 50,020 — 50,020 
Share-based award transactions, net236 2 3,201 — — 3,203 — 3,203 
Repurchase and cancellation of common stock(154)(2)(4,622)— — (4,624)— (4,624)
Redemption of non-controlling interest and other273 3 6,773 — — 6,776 (6,776)0 
Dividends declared ($0.315 per common share)— — — — (68,867)(68,867)(1,134)(70,001)
Net income— — — — 17,901 17,901 307 18,208 
Other comprehensive loss— — — (22,138)— (22,138)(360)(22,498)
Balance as of March 31, 2020218,483 2,185 4,909,397 (17,592)(1,553,710)3,340,280 64,672 3,404,952 
Issuance of OP Units in HTALP— — — — — — 1,378 1,378 
Share-based award transactions, net(1)— 2,100 — — 2,100 — 2,100 
Repurchase and cancellation of common stock(7)— (174)— — (174)— (174)
Redemption of non-controlling interest and other40 — 1,096 — — 1,096 (1,096)0 
Dividends declared ($0.315) per common share)— — — — (68,827)(68,827)(1,162)(69,989)
Net Income— — — — 13,489 13,489 236 13,725 
Other comprehensive loss— — — (3,176)— (3,176)(52)(3,228)
Balance as of June 30, 2020218,515 $2,185 $4,912,419 $(20,768)$(1,609,048)$3,284,788 $63,976 $3,348,764 
 Class A Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Cumulative Dividends in Excess of EarningsTotal Stockholders’ EquityNon-controlling InterestsTotal Equity
 SharesAmount
Balance as of December 31, 2020218,578 $2,186 $4,916,784 $(16,979)$(1,727,752)$3,174,239 $60,680 $3,234,919 
Share-based award transactions, net354 3 3,334 — — 3,337 — 3,337 
Repurchase and cancellation of common stock(119)(1)(3,247)— — (3,248)— (3,248)
Redemption of non-controlling interest and other11 — 255 — — 255 (255)0 
Dividends declared ($0.320) per common share)— — — — (70,023)(70,023)(1,183)(71,206)
Net income— — — — 22,030 22,030 363 22,393 
Other comprehensive income— — — 2,748 — 2,748 44 2,792 
Balance as of March 31, 2021218,824 2,188 4,917,126 (14,231)(1,775,745)3,129,338 59,649 3,188,987 
Share-based award transactions, net(6)— 2,065 — — 2,065 — 2,065 
Repurchase and cancellation of common stock(5)— (129)— — (129)— (129)
Redemption of non-controlling interest and other13 — 291 — — 291 (291)0 
Dividends declared ($0.320) per common share)— — — — (70,019)(70,019)(1,278)(71,297)
Net income— — — — 38,011 38,011 728 38,739 
Other comprehensive income— — — 1,497 — 1,497 26 1,523 
Balance as of June 30, 2021218,826 $2,188 $4,919,353 $(12,734)$(1,807,753)$3,101,054 $58,834 $3,159,888 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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HEALTHCARE TRUST OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June 30,
 20212020
Cash flows from operating activities:
Net income$61,132 $31,933 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization142,062 144,724 
Share-based compensation expense5,402 5,303 
Income from unconsolidated joint venture(798)(801)
Distributions from unconsolidated joint venture1,565 1,670 
Impairment16,825 0 
Gain on sale of real estate, net(32,753)(1,991)
Changes in operating assets and liabilities:
Receivables and other assets, net10,540 2,504 
Accounts payable and accrued liabilities(8,552)(6,337)
Security deposits, prepaid rent and other liabilities(4,496)5,178 
Net cash provided by operating activities190,927 182,183 
Cash flows from investing activities:
Investments in real estate(50,628)(41,338)
Development of real estate(33,983)(30,367)
Proceeds from the sale of real estate65,349 6,420 
Capital expenditures(53,471)(43,917)
Collection of real estate notes receivable15,405 514 
Advances on real estate notes receivable(61,020)(6,000)
Net cash used in investing activities(118,348)(114,688)
Cash flows from financing activities:
Borrowings on unsecured revolving credit facility100,000 1,314,000 
Payments on unsecured revolving credit facility(55,000)(1,150,000)
Payments on secured mortgage loans0 (96,206)
Proceeds from issuance of common stock0 50,020 
Issuance of OP Units0 1,378 
Repurchase and cancellation of common stock(3,377)(4,798)
Dividends paid(140,022)(137,050)
Distributions paid to non-controlling interest of limited partners(2,607)(2,455)
Net cash used in financing activities(101,006)(25,111)
Net change in cash, cash equivalents and restricted cash(28,427)42,384 
Cash, cash equivalents and restricted cash - beginning of period118,765 37,616 
Cash, cash equivalents and restricted cash - end of period$90,338 $80,000 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)
(Unaudited)
June 30, 2021December 31, 2020
ASSETS
Real estate investments:
Land$596,084 $596,269 
Building and improvements6,542,944 6,507,816 
Lease intangibles617,731 628,621 
Construction in progress88,609 80,178 
7,845,368 7,812,884 
Accumulated depreciation and amortization(1,806,165)(1,702,719)
Real estate investments, net6,039,203 6,110,165 
Investment in unconsolidated joint venture63,593 64,360 
Cash and cash equivalents19,796 115,407 
Restricted cash70,542 3,358 
Receivables and other assets, net294,550 251,728 
Right-of-use assets - operating leases, net228,870 235,223 
Other intangibles, net8,850 10,451 
Total assets$6,725,404 $6,790,692 
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Debt$3,073,465 $3,026,999 
Accounts payable and accrued liabilities172,653 200,358 
Derivative financial instruments - interest rate swaps10,755 14,957 
Security deposits, prepaid rent and other liabilities83,474 82,553 
Lease liabilities - operating leases195,210 198,367 
Intangible liabilities, net29,959 32,539 
Total liabilities3,565,516 3,555,773 
Commitments and contingencies00
Partners’ Capital:
Limited partners’ capital, 3,495,755 and 3,519,545 OP Units issued and outstanding as of June 30, 2021 and December 31, 2020, respectively58,564 60,410 
General partners’ capital, 218,825,737 and 218,578,012 OP Units issued and outstanding as of June 30, 2021 and December 31, 2020, respectively3,101,324 3,174,509 
Total partners’ capital3,159,888 3,234,919 
Total liabilities and partners’ capital$6,725,404 $6,790,692 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per unit data)
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Revenues:
Rental income$188,494 $178,670 $379,844 $364,201 
Interest and other operating income121 175 264 420 
Total revenues188,615 178,845 380,108 364,621 
Expenses:
Rental57,409 56,200 116,988 113,062 
General and administrative10,929 10,160 21,489 21,678 
Transaction66 32 162 172 
Depreciation and amortization74,977 74,927 151,251 152,592 
Interest expense23,133 24,277 46,119 48,149 
Impairment16,825 0 16,825 0 
Total expenses183,339 165,596 352,834 335,653 
Gain on sale of real estate, net32,753 0 32,753 1,991 
Income from unconsolidated joint venture406 379 798 801 
Other income304 97 307 173 
Net income$38,739 $13,725 $61,132 $31,933 
Net income attributable to non-controlling interests0 0 0 0 
Net income attributable to common unitholders$38,739 $13,725 $61,132 $31,933 
Earnings per common OP Unit - basic:
Net income attributable to common unitholders$0.17 $0.06 $0.28 $0.14 
Earnings per common OP Unit - diluted:
Net income attributable to common unitholders$0.17 $0.06 $0.28 $0.14 
Weighted average common OP Units outstanding: 
Basic222,326 222,088 222,297 221,228 
Diluted222,326 222,088 222,297 221,228 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income$38,739 $13,725 $61,132 $31,933 
Other comprehensive income (loss)
Change in unrealized gains (losses) on cash flow hedges1,523 (3,228)4,315 (25,726)
Total other comprehensive income (loss)1,523 (3,228)4,315 (25,726)
Total comprehensive income40,262 10,497 65,447 6,207 
Comprehensive income attributable to non-controlling interests0 0 0 0 
Total comprehensive income attributable to common unitholders$40,262 $10,497 $65,447 $6,207 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL
(In thousands)
(Unaudited)
General Partners’ CapitalLimited Partners’ CapitalTotal Partners’ Capital
 UnitsAmountUnitsAmount
Balance as of December 31, 2019216,453 $3,358,279 3,834 $72,365 $3,430,644 
Issuance of general partner OP Units1,675 50,020 — — 50,020 
Share-based award transactions, net236 3,203 — — 3,203 
Redemption and cancellation of general partner OP Units(154)(4,624)— — (4,624)
Redemption of limited partner OP Units and other273 6,776 (273)(6,776)0 
Distributions declared ($0.315 per common OP Unit)— (68,867)— (1,134)(70,001)
Net income— 17,901 — 307 18,208 
Other comprehensive loss— (22,138)— (360)(22,498)
Balance as of March 31, 2020218,483 3,340,550 3,561 64,402 3,404,952 
Issuance of limited partner OP Units47 1,378 1,378 
Share-based award transactions, net(1)2,100 — — 2,100 
Redemption and cancellation of general partner OP Units(7)(174)— — (174)
Redemption of limited partner OP Units and other40 1,096 (40)(1,096)0 
Distributions declared ($0.315 per common OP Unit)— (68,827)— (1,162)(69,989)
Net income— 13,489 — 236 13,725 
Other comprehensive loss— (3,176)— (52)(3,228)
Balance as of June 30, 2020218,515 $3,285,058 3,568 $63,706 $3,348,764 
General Partners’ CapitalLimited Partners’ CapitalTotal Partners’ Capital
 UnitsAmountUnitsAmount
Balance as of December 31, 2020218,578 $3,174,509 3,520 $60,410 $3,234,919 
Share-based award transactions, net354 3,337 — — 3,337 
Redemption and cancellation of general partner OP Units(119)(3,248)— — (3,248)
Redemption of limited partner OP Units and other11 255 (11)(255)0 
Distributions declared ($0.320 per common OP Unit)— (70,023)— (1,183)(71,206)
Net income— 22,030 — 363 22,393 
Other comprehensive income— 2,748 — 44 2,792 
Balance as of March 31, 2021218,824 3,129,608 3,509 59,379 3,188,987 
Share-based award transactions, net(6)2,065 — — 2,065 
Redemption and cancellation of general partner OP Units(5)(129)— — (129)
Redemption of limited partner OP Units and other13 291 (13)(291)0 
Distributions declared ($0.320 per common OP Unit)— (70,019)— (1,278)(71,297)
Net income— 38,011 — 728 38,739 
Other comprehensive income— 1,497 — 26 1,523 
Balance as of June 30, 2021218,826 $3,101,324 3,496 $58,564 $3,159,888 
The accompanying notes are an integral part of these condensed consolidated financial statements.


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HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June 30,
 20212020
Cash flows from operating activities:
Net income$61,132 $31,933 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization142,062 144,724 
Share-based compensation expense5,402 5,303 
Income from unconsolidated joint venture(798)(801)
Distributions from unconsolidated joint venture1,565 1,670 
Impairment16,825 0 
Gain on sale of real estate, net(32,753)(1,991)
Changes in operating assets and liabilities:
Receivables and other assets, net10,540 2,504 
Accounts payable and accrued liabilities(8,552)(6,337)
Security deposits, prepaid rent and other liabilities(4,496)5,178 
Net cash provided by operating activities190,927 182,183 
Cash flows from investing activities:
Investments in real estate(50,628)(41,338)
Development of real estate(33,983)(30,367)
Proceeds from the sale of real estate65,349 6,420 
Capital expenditures(53,471)(43,917)
Collection of real estate notes receivable15,405 514 
Advances on real estate notes receivable(61,020)(6,000)
Net cash used in investing activities(118,348)(114,688)
Cash flows from financing activities:
Borrowings on unsecured revolving credit facility100,000 1,314,000 
Payments on unsecured revolving credit facility(55,000)(1,150,000)
Payments on secured mortgage loans0 (96,206)
Proceeds from issuance of general partner units0 50,020 
Issuance of OP Units0 1,378 
Repurchase and cancellation of general partner units(3,377)(4,798)
Distributions paid to general partner(140,022)(137,050)
Distributions paid to limited partners and redeemable non-controlling interests(2,607)(2,455)
Net cash used in financing activities(101,006)(25,111)
Net change in cash, cash equivalents and restricted cash(28,427)42,384 
Cash, cash equivalents and restricted cash - beginning of period118,765 37,616 
Cash, cash equivalents and restricted cash - end of period$90,338 $80,000 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unless otherwise indicated or unless the context requires otherwise the use of the words “we,” “us,” or “our” refers to Healthcare Trust of America, Inc. and Healthcare Trust of America Holdings, LP, collectively.
Note 1. Organization and Description of Business
HTA, a Maryland corporation, and HTALP, a Delaware limited partnership, were incorporated or formed, as applicable, on April 20, 2006. HTA operates as a REIT and is the general partner of HTALP, which is the operating partnership, in an umbrella partnership, or “UPREIT” structure. HTA has qualified and intends to continue to be taxed as a REIT for federal income tax purposes under the applicable sections of the Internal Revenue Code.
We own real estate primarily consisting of medical office buildings (“MOBs”) located on or adjacent to hospital campuses or in off-campus, community core outpatient locations across 32 states within the United States, and we lease space to tenants primarily consisting of health systems, research and academic institutions, and various sized physician practices.  Through our full-service operating platform, we provide leasing, asset management, acquisitions, development and other related services for our properties.
Our primary objective is to maximize stockholder value with growth through strategic investments that provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow. In pursuing this objective, we: (i) seek internal growth through proactive asset management, leasing, building services and property management oversight; (ii) target accretive acquisitions and developments of MOBs in markets with attractive demographics that complement our existing portfolio; and (iii) actively manage our balance sheet to maintain flexibility with conservative leverage. Additionally, from time to time we consider, on an opportunistic basis, significant portfolio acquisitions that we believe fit our core business and we expect to enhance our existing portfolio.
COVID-19 Pandemic
On March 11, 2020 the novel coronavirus disease (“COVID-19”) was declared a pandemic by the World Health Organization. As the virus continued to spread throughout the United States and other countries across the world, Federal, state and local governments took various actions including the issuance of “stay-at-home” orders, social distancing guidelines and ordering the temporary closure of non-essential businesses to limit the spread of COVID-19. While many businesses have reopened and vaccinations are becoming more widely available to the general population, the economic uncertainty created by the COVID-19 pandemic continue to present risks to the Company and the future results of our operations. Should current and planned measures, including further development and delivery of vaccines and other measures intended to reduce or eliminate the spread of COVID-19, past and/or proposed economic stimulus, and other laws, acts and orders proposed or enacted by these various governmental agencies ultimately not be successful or limited in their efficacy, our business and the broader real estate industry may experience significant adverse consequences. These consequences include loss of revenues, increased expenses, increased costs of materials, difficulty in maintaining an active workforce, and constraints on our ability to secure capital or financing, among other factors.
2. 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. References to the Company in these Notes to the Condensed Consolidated Financial Statements are to Legacy HR as the "accounting acquiror" in the Merger defined and described in more detail in Note 9 to these Condensed Consolidated Financial Statements. As of June 30, 2022, the Company had gross investments of approximately $5.4 billion in 255 real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property. The summaryCompany's 255 real estate properties are located in 23 states and total approximately 17.2 million square feet. The Company provided leasing and property management services to approximately 15.4 million square feet nationwide. The Company owns 50% of significant accounting policies presented below is designedan unconsolidated joint venture with Teachers Insurance and Annuity Association (the "TIAA Joint Venture") and earns certain fees as the managing member. As of June 30, 2022, the TIAA Joint Venture owned 21 real estate properties. See Note 2 for more details regarding the Company's unconsolidated joint ventures. Any references to assistsquare footage or occupancy percentage, and any amounts derived from these values in understanding our condensed consolidated financial statements. Such condensed consolidated financial statements andthese notes to the accompanying notesCompany's Condensed Consolidated Financial Statements, are outside the representationsscope of our management, who are responsible for their integrity and objectivity. Theseindependent registered public accounting policies conform to generally accepted accounting principles in the U.S. (“GAAP”) in all material respects and have been consistently applied in preparing our accompanying condensed consolidated financial statements.firm’s review.
Basis of Presentation
Our accompanying condensed consolidated financial statements include our accounts and those of our subsidiaries and any consolidated variable interest entities (“VIEs”). All inter-company balances and transactions have been eliminated in the accompanying condensed consolidated financial statements. .
Interim UnauditedThe Condensed Consolidated Financial Data
Our accompanying condensed consolidated financial statementsStatements have been prepared by us in accordance with GAAPaccounting principles generally accepted in conjunctionthe United States ("GAAP") for interim financial information and with the rulesinstructions to Form 10-Q and regulationsArticle 10 of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statementsRegulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments, which are,However, except as disclosed herein, management believes there has been no material change in our opinion, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flowsthe information disclosed in the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. All material intercompany transactions and balances have been eliminated in consolidation.
This interim periods. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such results may be less favorable for the full year. Our accompanying condensed consolidated financial statementsinformation should be read in conjunction with our auditedthe consolidated financial statements and the notes thereto included in our 2020the Company’s Annual Report on Form 10-K.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
a normal, recurring nature considered necessary for a fair presentation have been included. In addition, the interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2022 for many reasons including, but not limited to, the Merger (as discussed in more detail in Note 9 below), acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties.
Principles of Consolidation
The condensed consolidated financial statementsCompany’s Condensed Consolidated Financial Statements include, as of June 30, 2022, the accounts of ourthe Company, its wholly owned subsidiaries, and consolidated joint venture arrangements. The portionsventures 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 810 broadly defines a VIE as an entity in which either (i) the HTALP operating partnership not owned by us are presented as non-controlling interests on the accompanying condensed consolidated balance sheets and statements of operations, condensed consolidated statements of comprehensive income, and condensed consolidated statements of equity and changes in partners’ capital. Holders of OP Units are considered to be non-controlling interest holders in HTALP and their ownership interests are reflected as equity on the accompanying condensed consolidated balance sheets. Further, a portion of the earnings and losses of HTALP 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 recordedinvestors as a componentgroup, if any, lack the power through voting or similar rights to direct the activities of equity. As of June 30, 2021 and December 31, 2020, there were approximately 3.5 million of OP Units issued and outstanding held by non-controlling interest holders.
VIEs are entities where investors lack sufficientsuch entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk for the entityis insufficient to finance itsthat entity’s activities without additional subordinated financial support or where equity investors,support. The Company identifies the primary beneficiary of a VIE as a group, lack onethe enterprise that has both of the following: (i) the power to direct the activities that most significantly impact the entity’s economic performance; (ii) the obligation to absorb the expected losses of the entity; and (iii) the right to receive the expected returns of the entity. We consolidate our investment in VIEs when we determine that we are the primary beneficiary. A primary beneficiary is one that has both:following characteristics: (i) the power to direct the activities of the VIE that most significantly impactsimpact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the entity. The HTALP operating partnershipCompany consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and our other joint venture arrangements are VIEs because the limited partners in those partnerships, although entitled to vote on certain matters, do not possess kick-out rightsdisposition of all or substantive participating rights. Additionally, we determined that we area portion of an interest held by the primary beneficiarybeneficiary. 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 our VIEs. Accordingly, we consolidate our interests in the HTALP operating partnership and in our other joint venture arrangements. However, because we hold what is deemedequity or has a controlling financial interest evidenced by ownership of a majority voting interestinterest. All intercompany balances and transactions are eliminated in the HTALP operating partnership and our other joint venture arrangements, it qualifies for the exemption from providing certain disclosure requirements associated with investmentsconsolidation. For any entity in VIEs.
In addition, from time to time,which the Company acquires properties using a like-kind exchange structure pursuant to Section 1031owns


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
less than 100% of the Internal Revenue Code (a “1031 exchange”) and, as such,equity interest, the proceeds from a property or portfolio disposition are in the possession of an Exchange Accommodation Titleholder (“EAT”) until the 1031 exchange is completed. The EAT is classified as a VIE as it is a “thinly capitalized” entity. The Company consolidates the EAT because we areentity if it has the primary beneficiary as we have thedirect or indirect ability to control the entities’ activities that most significantly impactbased upon the EAT’s economic performance and can close outterms of the 1031 exchange structure at any time. respective entities’ ownership agreements.
As of June 30, 2021,2022, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company had 1 such entity whereexercised significant influence over but did not control these entities. See Note 2 for more details regarding the 1031 exchange had not completed. We will evaluate on an ongoing basis the need to consolidate entities based on the standards set forth in GAAP as described above.Company's unconsolidated joint ventures.
Use of Estimates in the Condensed Consolidated Financial Statements
The preparationPreparation of our condensed consolidated financial statementsthe Condensed Consolidated Financial Statements in conformityaccordance with GAAP requires management to make estimates and assumptions that effectaffect amounts reported in the reported amounts of assets, liabilities, revenuesCondensed Consolidated Financial Statements and expenses, and related disclosure of contingent asset and liabilities. These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances.accompanying notes. Actual results couldmay differ from those estimates, perhapsestimates.
Investments in adverse ways, and those estimates could be different under different assumptions or conditions.Leases - Financing Receivables, Net
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of all highly liquid investmentsIn accordance with a maturity of three months or less when purchased. Restricted cash is typically comprised of: (i) reserve accountsAccounting Standards Codification ("ASC") 842, for property taxes, insurance, capital and tenant improvements; (ii) collateral accounts for debt and interest rate swaps; (iii) 1031 exchange funds; and (iv) deposits for future investments.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets to the combined amounts shown on the accompanying condensed consolidated statements of cash flows (in thousands):
June 30,
20212020
Cash and cash equivalents$19,796 $75,202 
Restricted cash70,542 4,798 
Total cash, cash equivalents and restricted cash$90,338 $80,000 
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Revenue Recognition
Minimum annual rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). Differences between rental income recognized and amounts contractually due under the lease agreements are recorded as straight-line rent receivables. Tenant reimbursements, which is comprised of additional amounts recoverable from tenants for real estate taxes, common area maintenance and other certain operating expenses are recognized as revenue on a gross basis in the periodtransactions in which the related recoverable expenses are incurred.  We accrue revenue correspondingCompany enters into a contract to these expenses onacquire an asset and leases it back to the seller (i.e., a quarterly basis to adjust recorded amounts to our best estimatesale leaseback transaction), control of the final annual amountsasset is not considered to be billed. Subsequent to year-end, onhave transferred when the seller-lessee has a calendar year basis, we perform reconciliations onpurchase option. As a lease-by-lease basis and bill or credit each tenant for any differences betweenresult, the estimated expenses we billed andCompany does not recognize the actual expensesunderlying real estate asset but instead recognizes a financial asset in accordance with ASC 310 “Receivables”.
During the first quarter of 2022, the Company reclassified the 2 medical office buildings in Nashville, Tennessee that were incurred. We recognize lease termination fees when there is a signed termination letter agreement, allacquired in separate sale-leaseback transactions in the fourth quarter of 2021. The leases with the sellers commenced in the first quarter, which resulted in the allocation of the conditionsfinancing receivable totaling $73.9 million to land and building and improvements.
Income from Lease Financing Receivables
The Company recognizes the related income from the financing receivable based on an imputed interest rate over the terms of the agreement have been met,applicable lease. As a result, the interest recognized from the financing receivable will not equal the cash payments from the lease agreement.
Acquisition costs incurred in connection with entering into the financing receivable are treated as loan origination fees. These costs are classified with the financing receivable and are included in the tenant is no longer occupyingbalance of the property. Rental income is reported net investment. Amortization of amortizationthese amounts will be recognized as a reduction to Income from financing receivable, net over the life of inducements.the lease.
Revenue from Contracts with Customers (Topic 606)
The Company recognizes certain revenue recognition process is based on a five-step model to account for revenue arising from contracts with customers as outlined inunder the core principle of Topic 606. WeThis 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. We have identified all of ourLease revenue streams and we have concluded that rental income from leasing arrangements represents a substantial portion of our revenue and is governed and evaluated withnot within the adoptionscope of Topic 842.606. To achieve the core principle, the Company applies the five step model specified in the guidance.
InvestmentsRevenue that is accounted for under Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Income in the Other operating line item. This line item includes parking income, management fee income and other miscellaneous income. Below is a detail of the amounts by category:
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
in thousands2022202120222021
Type of Revenue
Parking income$1,919 $1,880 $3,672 $3,538 
Management fee income 1
783 419 1,438 658 
Miscellaneous36 128 103 182 
$2,738 $2,427 $5,213 $4,378 
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.


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
New Accounting Pronouncements
Accounting Standards Update No. 2020-04
On March 12, 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. Management continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
Note 2. Real Estate Investments
Depreciation expense of buildings and improvements for2022 Company Acquisitions
The following table details the three months ended June 30, 2021 and 2020 was $60.7 million and $58.2 million, respectively. Depreciation expense of buildings and improvementsCompany's acquisitions for the six months ended June 30, 20212022:
Dollars in thousandsDATE ACQUIREDPURCHASE PRICE
CASH
CONSIDERATION 1
REAL
ESTATE 2
OTHER 3
SQUARE FOOTAGE
Dallas, TX2/11/22$8,175 $8,185 $8,202 $(17)18,000 
San Francisco, CA 4
3/7/22114,000 112,986 108,687 4,299 166,396 
Atlanta, GA4/7/226,912 7,054 7,178 (124)21,535 
Denver, CO4/13/226,320 5,254 5,269 (15)12,207 
Colorado Springs, CO 5
4/13/2213,680 13,686 13,701 (15)25,800 
Seattle, WA4/28/228,350 8,334 8,370 (36)13,256 
Houston, TX4/28/2236,250 36,299 36,816 (517)76,781 
Los Angeles, CA4/29/2235,000 35,242 25,400 9,842 34,282 
Oklahoma City, OK4/29/2211,100 11,259 11,334 (75)34,944 
Raleigh, NC 4
5/31/2227,500 26,710 27,127 (417)85,113 
Tampa, FL 5
6/9/2218,650 18,619 18,212 407 55,788 
Total real estate acquisitions$285,937 $283,628 $270,296 $13,332 544,102 
1Cash consideration excludes prorations of revenue and 2020 was $121.9 million and $117.1 million, respectively.
Leasesexpense due to/from seller at the time of the acquisition.
As a lessor, we lease space in our MOBs primarily to medical enterprises for terms generally ranging from 2three to seven years in length. The assets underlying these leases consistExcludes financing right of buildings and associated land which are included as real estate investments on our accompanying condensed consolidated balance sheets. All of our leases for which we are the lessor are classified as operating leases under Topic 842.use assets.
Leases, for which we are the lessee, are classified as separate components on our accompanying condensed consolidated balance sheets. Operating leases are included as right-of-use (“ROU”) assets - operating leases, net, with a corresponding lease liability. Financing lease assets are included in receivables and3Includes other assets net, with a corresponding lease liability in security deposits, prepaid rentacquired, liabilities assumed, and other liabilities. A lease liability isintangibles recognized for our obligation relatedat acquisition.
4Includes 3 properties.
5Includes 2 properties.

Subsequent to June 30, 2022 and unrelated to the lease and an ROU asset represents our right to useMerger, the underlying asset overCompany acquired the lease term. Refer to Note 7 - Leases in the accompanying notes to the condensedfollowing property:
Dollars in thousandsDATE ACQUIREDPURCHASE PRICESQUARE FOOTAGE
Seattle, WA8/1/22$4,850 10,593 





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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
2022 TIAA Joint Venture Acquisitions
The TIAA Joint Venture is not consolidated financial statements for more detail relating to our leases.
Through the durationpurposes of the coronavirus (“COVID-19”) pandemic, changes to our leases as a result of COVID-19 have been in two categories. Leases are categorized based uponCompany's Condensed Consolidated Financial Statements. The following table details the impact of the modification on its cash flows. One category is rent deferrals for which the guidance provided by the Lease Modification Q&A issued by the Financial Accounting Standards Board (“FASB”) in April 2020 was utilized, which provided relief from requiring a lease by lease analysis pursuant to Topic 842. These deferrals are generally for up to three months of rent with a payback period from three to twelve months once the deferral period has ended. Deferrals do not have an impact on cash flows over the lease term, rather, payments are made in different periods while the cash flows for the entirety of the lease term are the same. However, we have continued to recognize revenue and straight line revenue for amounts subject to deferral agreements in accordance with Topic 842. In 2020, which is the period that we believe constituted the majority of our COVID-related deferral requests, we approved deferral plans totaling approximately $11.1 million, of which approximately $10.2 million have been repaid through June 30, 2021.
The second category is early renewals, where the Company renewed lease arrangements prior to their contractual expirations, providing concessions at the commencement of the lease in exchange for additional term, which additional term averages approximately three years. This category is treated as a modification under Topic 842, with the existing balance of the cumulative difference between rental income and payment amounts (existing straight line rent receivable) being recast over the new term, factoring in any changes attributable to the new lease arrangement and for which we performed a lease by lease analysis. Cash flows are impacted over the long term as customary free rent, at an average of three months in conjunction with these agreements, and is offset by more term and/or increased rental rates. For the six months ended June 30, 2021, the Company has entered into very few new deferral arrangements or early renewal leases with substantive amounts of free rent or other forms of concessions at the onset of the lease term.
The Lease Modification Q&A had no material impact on our condensed consolidated financial statements as of andTIAA Joint Venture acquisitions for the six months ended June 30, 2021, however, its future impact to us is dependent upon the extent2022:
Dollars in thousandsDATE ACQUIREDPURCHASE PRICE
CASH
CONSIDERATION 1
REAL
ESTATE
OTHER 2
SQUARE FOOTAGECOMPANY OWNERSHIP %
San Francisco, CA 3
3/7/22$67,175 $66,789 $65,179 $1,610 110,865 50 %
Los Angeles, CA 4
3/7/2233,800 32,384 32,390 (6)103,259 50 %
Total real estate acquisitions$100,975 $99,173 $97,569 $1,604 214,124 

1Cash consideration excludes prorations of lease concessions granted to tenants as a result of the COVID-19 pandemic in future periodsrevenue and the elections made by usexpense due to/from seller at the time of entering into any such concessions.the acquisition.

2Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition.
163Includes 3 properties.

4
Table of ContentsIncludes 2 properties.

HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Real Estate Held for Sale
We consider properties held for sale once management commits to a plan to sell the property and has determined that the sale is probable and expected to occur within one year. Upon classification as held for sale, we record the property at the lower of its carrying amount or fair value, less costs to sell, and cease depreciation and amortization. The fair value is generally based on a discounted cash flow analysis, which involves management's best estimate of market participants' holding periods, market comparables, future occupancy levels, rental rates, capitalization rates, lease-up periods and capital requirements. As of June 30, 2021 and December 31, 2020, the Company had 0 properties classified as held for sale.
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 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. Pursuant to Topic 326 - Financial Instruments - Credit Losses, we adopted a policy to evaluate current expected credit losses at the inception of loans qualifying for treatment under Topic 326. Given management’s estimated probability of default at inception, we determined that the current risk of credit loss is remote. Accordingly, we have recorded 0 reserve for credit loss as of June 30, 2021.
Unconsolidated Joint Ventures
We account for our investments in unconsolidated joint ventures using the equity method of accounting because we have the ability to exercise significant influence, but not control, over the financial and operational policy decisions of the investments. Using the equity method of accounting, the initial investment is recognized at cost and subsequently adjusted for our share of the net income and any distributions from the joint venture. As of June 30, 2021 and December 31, 2020, we had a 50% interest in one such investment with a carrying value and maximum exposure to risk of $63.6 million and $64.4 million, respectively, which is recorded inThe Company's investment in unconsolidated joint venture on the accompanying condensed consolidated balance sheets. We record our share of net income in income from unconsolidated joint venture on the accompanying condensed consolidated statements of operations. For each of the three months ended June 30, 2021 and 2020, weloss recognized income of $0.4 million. For each of the six months ended June 30, 2021 and 2020, we recognized income of $0.8 million.
Recently Issued or Adopted Accounting Pronouncements
Recently Adopted Accounting Pronouncements
S-X Rule 13-01
In March 2020, the SEC adopted amendments to Rule 3-10 of Regulation S-X and created Rule 13-01 to simplify disclosure requirements related to certain registered securities. The rule became effective on January 4, 2021, at which time we adopted S-X Rule 13-01. The adoption did not have a material effect on our financial statements and related footnotes.
Recently Issued Accounting Pronouncements
ASU 2021-01, Reference Rate Reform (Topic 848)
In January 2021, the FASB issued ASU 2021-01, which amends the scope of ASU 2020-04. The amendments of ASU 2021-01 clarify that certain optional expedients and exceptions to Topic 848 for contract modification and hedge accounting apply to derivatives that are affected by the discounting transition. For information related to the Company's current cash flow hedges, refer to Note 9 - Derivative Financial Instruments and Hedging Activities. The amendments are elective and effective immediately for contract modifications made through December 31, 2022. The Company is evaluating how the transition away from LIBOR will effect the Company and if the guidance in this standard will be adopted, however, if adopted, we do not expect that this ASU will have a material impact on our financial statements.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
3. Investments in Real Estate
For the six months ended June 30, 2021, our investments had an aggregate purchase price of $53.0 million. As part of these investments, we incurred approximately $0.5 million of capitalized costs. The allocations for these investments, in which we own a controlling financial interest, are set forth below in the aggregate for the six months ended June 30, 2021 and 2020, respectively (in thousands):
Six Months Ended June 30,
20212020
Land$1,093 $2,817 
Building and improvements45,629 35,259 
In place leases5,291 3,621 
Below market leases(79)(693)
Above market leases66 334 
ROU assets(1,372)0 
Net real estate assets acquired50,628 41,338 
Other, net2,397 334 
Aggregate purchase price$53,025 $41,672 
The acquired intangible assets and liabilities referenced above had weighted average lives of the following terms for the six months ended June 30, 2021 and 2020, respectively (in years):
Six Months Ended June 30,
20212020
Acquired intangible assets4.25.4
Acquired intangible liabilities5.73.6

4. Dispositions and Impairment
Dispositions
During the six months ended June 30, 2021, we sold a 13 property portfolio with locations in Tennessee and Virginia for a gross sales price of $67.5 million, resulting in a net gain to us of approximately $32.8 million. During the six months ended June 30, 2020, we sold part of our interest in undeveloped land in Miami, Florida for a gross sales price of $7.6 million, resulting in a net gain to us of approximately $2.0 million.
Impairment
During the six months ended June 30, 2021, we recorded impairment charges of $16.8 million on 2 properties, for which the holding period was revised by the Company to be less than the previously estimated useful life. The estimated fair values were based on a purchase option and a pending sales agreement, both of which were executed subsequent to June 30, 2021. We recorded 0 impairment charges during the six months ended June 30, 2020.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
5. Intangible Assets and Liabilities
Intangible assets and liabilities consisted of the following as of June 30, 2021 and December 31, 2020, respectively (in thousands, except with respect to the weighted average remaining amortization terms):
June 30, 2021December 31, 2020
BalanceWeighted Average Remaining
Amortization in Years		BalanceWeighted Average Remaining
Amortization in Years
Assets:
In place leases$477,562 9.6$483,779 9.7
Tenant relationships140,169 10.4144,842 10.0
Above market leases37,093 6.437,876 5.8
654,824 666,497 
Accumulated amortization(436,330)(427,937)
Total$218,494 9.6$238,560 9.6
Liabilities:
Below market leases$61,951 14.8$61,896 14.6
Accumulated amortization(31,992)(29,357)
Total$29,959 14.8$32,539 14.6
The following is a summary of the net intangible amortization for the three and six months ended June 30, 2022 and 2021 related to its joint ventures accounted for under the equity method are shown in the table below:
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
Dollars in thousands2022202120222021
Investments in unconsolidated joint ventures, beginning of period 1
$211,195 $83,943 $161,942 $73,137 
New investments during the period— 34,138 49,599 45,018 
Equity loss recognized during the period 1
(307)(146)(652)(220)
Owner Distributions(107)— (108)— 
Investments in unconsolidated joint ventures, end of period 1
$210,781 $117,935 $210,781 $117,935 
1In addition to the TIAA Joint Venture, the Company also has a 55% and 2020,27% ownership interest, respectively, (in thousands):in 2 limited liability companies that each own a parking garage in Atlanta, Georgia.
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Amortization recorded against rental income related to above and (below) market leases$(641)$(751)$(1,233)$(2,719)
Amortization expense related to in place leases and tenant relationships11,340 13,438 23,227 29,373 

2022 Real Estate Asset Dispositions
6. Receivables and Other Assets
Receivables and other assets consisted ofThe following table details the following as ofCompany's dispositions for the six months ended June 30, 20212022:
Dollars in millionsDATE DISPOSEDSALE PRICECLOSING ADJUSTMENTSNET PROCEEDSNET REAL ESTATE INVESTMENT
OTHER (INCLUDING RECEIVABLES) 1
GAIN/(IMPAIRMENT)SQUARE FOOTAGE
Loveland, CO 2
2/24/22$84,950 $(45)$84,905 $40,095 $4 $44,806 150,291 
San Antonio, TX 2
4/15/2225,500 (2,272)23,228 14,381 284 8,563 201,523 
Total dispositions$110,450 $(2,317)$108,133 $54,476 $288 $53,369 351,814 
1Includes straight-line rent receivables, leasing commissions and December 31, 2020, respectively (in thousands):lease inducements.
June 30, 2021December 31, 2020
Tenant receivables, net$9,966 $17,717 
Other receivables, net5,118 6,243 
Deferred financing costs, net1,724 2,586 
Deferred leasing costs, net42,505 43,234 
Straight-line rent receivables, net134,806 128,070 
Prepaid expenses, deposits, equipment and other, net38,755 46,114 
Real estate notes receivable, net46,341 0 
Finance ROU asset, net15,335 7,764 
Total$294,550 $251,728 
2Includes 2 properties.

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, – (Continued)cont.
Assets Held for Sale
The following is a summaryCompany did not have any properties classified as assets held for sale as of June 30, 2022 and December 31, 2021. The table below reflects the assets and liabilities of the amortizationproperties classified as held for sale as of deferred leasingJune 30, 2022 and December 31, 2021:
Dollars in thousandsJune 30, 2022December 31, 2021
Other assets, net$— $57 
Assets held for sale, net$— $57 
Accounts payable and accrued liabilities$— $169 
Other liabilities— 125 
Liabilities of assets held for sale$— $294 
Note 3. Leases
Lessor Accounting
The Company’s properties generally were leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2040. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.
The Company's leases typically have escalators that are either based on a stated percentage or an index such as the consumer price index ("CPI"). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and financing costsnonlease 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, 20212022 was $140.6 million and 2020, respectively (in thousands):$279.1 million, respectively.
On March 30, 2022, the Company executed a lease as a ground lessor for a 1.9 acre parcel of land in Texas previously recorded in land held for development. The lease is classified as a sales-type lease under Topic 842 as the present value of lease payments equals or exceeds substantially all of the fair value of the underlying asset. The land value of $1.8 million was reclassified from Land held for development to Other assets.
Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of June 30, 2022 were as follows:
Dollars in thousandsOPERATING
2022$214,083 
2023398,689 
2024326,597 
2025269,308 
2026217,068 
2027 and thereafter566,038 
$1,991,783 
Lessee Accounting
As of June 30, 2022, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2022, the Company had 108 properties totaling 8.9 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 41 prepaid ground leases as of June 30, 2022. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.1

Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Amortization expense related to deferred leasing costs$2,204 $2,113 $4,427 $4,009 
Interest expense related to deferred financing costs431 431 862 862 

11
7. Leases

ForTable of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
million and $0.2 million of the Company’s rental expense for the three months ended June 30, 2022 and 2021, 1 new ground lease has commenced. Based on our analysis, we concluded that its classification was as a finance lease. Additionally, we sold a portfolio of properties resulting in the removal of 8 of our in-place operating ground leases. For more details on the disposition, refer to Note 4 - Dispositionsrespectively, and Impairment.
Lessee - Maturity of Lease Liabilities
The following table summarizes the future minimum lease obligations of our operating and finance leases as of June 30, 2021 (in thousands):
YearOperating LeasesFinance Leases
2021$5,304 $277 
202210,797 558 
202310,934 563 
202410,277 568 
20259,764 573 
20269,766 584 
Thereafter606,467 35,797 
Total undiscounted lease payments$663,309 $38,920 
Less: Interest(468,099)(23,468)
Present value of lease liabilities$195,210 $15,452 
Lessor - Lease Revenues and Maturity of Future Minimum Rents
For the three months ended June 30, 2021 and 2020, we recognized $187.4$0.3 million and $176.2 million, respectively, of rental and other lease-related income related to our operating leases, of which $42.2 million and $41.8 million, respectively, were variable lease payments. Forfor the six months ended June 30, 2022 and 2021, and 2020, we recognized $377.8 million and $360.5 million, respectively, of rental and other lease-related income related to our operating leases, of which $87.3 million and $84.6 million, respectively, were variablerespectively.
The Company’s future lease payments.
The following table summarizes the future minimum rent contractually due under operating leases, excluding tenant reimbursements of certain costs,payments (primarily for its 67 non-prepaid ground leases) as of June 30, 2021 (in thousands):
YearAmount
2021$275,454 
2022529,289 
2023475,792 
2024419,934 
2025366,142 
2026317,544 
Thereafter1,183,342 
Total$3,567,497 
2022 were as follows:
Dollars in thousandsOPERATINGFINANCING
2022$2,118 $735 
20235,071 1,654 
20245,130 1,692 
20255,174 1,723 
20265,201 1,749 
2027 and thereafter306,956 368,730 
Total undiscounted lease payments329,650 376,283 
Discount(234,902)(314,088)
Lease liabilities$94,748 $62,195 
The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2022 and 2021:
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
Dollars in thousands2022202120222021
Operating lease cost
Operating lease expense$1,194 $1,182 $2,409 $2,360 
Variable lease expense1,038 972 2,062 1,868 
Finance lease cost
Amortization of right-of-use assets331 88 503 176 
Interest on lease liabilities765 247 1,052 493 
Total lease expense$3,328 $2,489 $6,026 $4,897 
Other information
Operating cash flows outflows related to operating leases$1,799$2,587 $4,596 $4,431 
Operating cash flows outflows related to financing leases$509$— $767 $— 
Financing cash flows outflows related to financing leases$—$321 $51 $683 
Right-of-use assets obtained in exchange for new finance lease liabilities$—$— $40,589 $— 
Weighted-average remaining lease term (excluding renewal options) - operating leases47.448.1
Weighted-average remaining lease term (excluding renewal options) - finance leases61.764.5
Weighted-average discount rate - operating leases5.6 %5.7 %
Weighted-average discount rate - finance leases5.0 %5.4 %

20

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Note 4. Notes and Bonds Payable
The table below details the Company’s notes and bonds payable as of June 30, 2022 and 2021. 
 MATURITY DATESBALANCE AS OFEFFECTIVE INTEREST RATE
as of 6/30/2022
Dollars in thousands6/30/202212/31/2021
$700 million Unsecured Credit Facility5/23$490,500 $210,000 2.69 %
$200 million Unsecured Term Loan due 2024, net of issuance costs 1
5/24199,572 199,460 2.55 %
$150 million Unsecured Term Loan due 2026, net of issuance costs 2
6/26149,447 149,376 2.79 %
Senior Notes due 2025, net of discount and issuance costs 3
5/25249,176 249,040 4.08 %
Senior Notes due 2028, net of discount and issuance costs1/28296,864 296,612 3.84 %
Senior Notes due 2030, net of discount and issuance costs 4
3/30296,989 296,813 2.71 %
Senior Notes due 2031, net of discount and issuance costs3/31295,601 295,374 2.24 %
Mortgage notes payable, net of discounts and issuance costs and including premiums8/23-12/2685,606 104,650 3.97 %
$2,063,755 $1,801,325 
1The effective interest rate includes the impact of interest rate swaps on $75.0 million at a weighted average rate of 2.37% (plus the applicable margin rate, currently 100 basis points).
2The effective interest rate includes the impact of interest rate swaps on $100.0 million at a weighted average rate of 2.23% (plus the applicable margin rate, currently 95 basis points).
3The effective interest rate includes the impact of the $1.7 million settlement of forward-starting interest rate swaps that is included in Accumulated other comprehensive loss on the Company's Condensed Consolidated Balance Sheets.
4The effective interest rate includes the impact of the $4.3 million settlement of forward interest rate hedges that is included in Accumulated other comprehensive loss on the Company's Condensed Consolidated Balance Sheets.

HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Changes in Debt Structure
8. DebtMortgage payoffs
Debt consisted ofOn February 18, 2022, the following as of June 30, 2021 and December 31, 2020, respectively (in thousands):
June 30, 2021December 31, 2020
Unsecured revolving credit facility$45,000 $0 
Unsecured term loans500,000 500,000 
Unsecured senior notes2,550,000 2,550,000 
Fixed rate mortgages0 0 
$3,095,000 $3,050,000 
Deferred financing costs, net(17,661)(19,157)
Premium, net(3,874)(3,844)
Total$3,073,465 $3,026,999 
Unsecured Credit Agreement
Unsecured Revolving Credit Facility due 2022
Our amended and restated $1.3 billion unsecured credit agreement (the “Unsecured Credit Agreement”) includes an unsecured revolving credit facility of $1.0 billion maturing on June 30, 2022, and an unsecured term loan of $300.0 million maturing on February 1, 2023. The maximum principal amount of the Unsecured Credit Agreement may be increased by up to $750.0 million, subject to certain conditions, forCompany repaid in full a total principal amount of $2.05 billion if so increased.
Borrowings under the unsecured revolving credit facility accruemortgage note payable bearing interest at a rate equal to adjusted LIBOR, plusof 4.70% that encumbered a margin ranging from 0.83% to 1.55% per annum based on our credit rating. We also pay56,762 square foot property in California. The aggregate payoff price of $12.6 million consisted of outstanding principal of $11.0 million and a facility fee ranging from 0.13% to 0.30% per annum on the aggregate commitments under the unsecured revolving credit facility. As"make-whole" amount of June 30, 2021, we had $45.0approximately $1.6 million. The unamortized premium of $0.8 million outstanding under this unsecured revolving credit facility at an interest rate of 1.13% per annum.The margin associated with our borrowings was 1.00% per annum and the facility fee was 0.20% per annum.unamortized cost on this note of $0.1 million were written off upon payoff.
Unsecured Term Loan due 2023
UnderOn February 24, 2022, the Unsecured Credit Agreement as noted above, we haveCompany repaid in full a $300.0 million unsecured term loan, guaranteed by HTA, with a maturity date of February 1, 2023. Borrowings under this unsecured term loan accrue interest equal to adjusted LIBOR, plus a margin ranging from 0.90% to 1.75% per annum based on our credit rating. The margin associated with our borrowings as of June 30, 2021 was 1.10% per annum. We have interest rate swaps hedging the floating interest rate, which resulted in a fixed rate of 2.52% per annum, based on our current credit rating. As of June 30, 2021, we had $300.0 million under this unsecured term loan outstanding.
$200.0 Million Unsecured Term Loan due 2024
Borrowings under the unsecured term loan accruemortgage note payable bearing interest at a rate equal to LIBOR, plusof 6.17% that encumbered a margin ranging from 0.75% to 1.65% per annum based on our credit rating. The margin associated with our borrowings as of June 30, 2021 was 1.00% per annum. We have interest rate swaps hedging the floating index rate, which resulted80,153 square foot property in a fixed interest rate at 2.32% per annum, based on our current credit rating. As of June 30, 2021, we had $200.0 million under this unsecured term loan outstanding. This loan matures on January 15, 2024.
$600.0 Million Unsecured Senior Notes due 2026
In September 2019,Colorado, in connectionconjunction with the $650.0disposition of the property. The aggregate payoff price of $6.4 million unsecured senior notes due 2030 referenced below, HTALP issued $250.0 million as additional unsecured senior notes to the $350.0 million aggregateconsisted of outstanding principal of senior notes issued on July 12, 2016, all of which are guaranteed by HTA. These unsecured senior notes are registered under the Securities Act, and bear interest at 3.50% per annum which is payable semi-annually. Additionally, these unsecured senior notes were offered at 103.66% and 99.72%, respectively, of the principal amount thereof, with an effective yield to maturity of 2.89% and 3.53% per annum, respectively. As of June 30, 2021, we had $600.0$5.8 million of these unsecured senior notes outstanding that mature on August 1, 2026.
$500.0 Million Unsecured Senior Notes due 2027
In 2017, HTALP issued $500.0 million of unsecured senior notes that are guaranteed by HTA. These unsecured senior notes are registered under the Securities Act, and bear interest at 3.75% per annum which is payable semi-annually. Additionally, these unsecured senior notes were offered at 99.49% of the principal amount thereof, with an effective yield to maturity of 3.81% per annum. As of June 30, 2021, we had $500.0 million of these unsecured senior notes outstanding that mature on July 1, 2027.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
$650.0 million Unsecured Senior Notes due 2030
In September 2019, in connection with the $250.0 million additional unsecured senior notes due 2026 referenced above, HTALP issued $650.0 million of unsecured senior notes that are guaranteed by HTA. These unsecured senior notes are registered under the Securities Act, and bear interest at 3.10% per annum which is payable semi-annually. Additionally, these unsecured senior notes were offered at 99.66% of the principal amount thereof, with an effective yield to maturity of 3.14% per annum. As of June 30, 2021, we had $650.0 million of these unsecured senior notes outstanding that mature on February 15, 2030.
$800.0 million Unsecured Senior Notes due 2031
In September 2020, HTALP issued $800.0 million of unsecured senior notes that are guaranteed by HTA. These unsecured senior notes are registered under the Securities Act, and bear interest at 2.00% per annum which is payable semi-annually. Additionally, these unsecured senior notes were offered at 99.20% of the principal amount thereof, with an effective yield to maturity of 2.09% per annum. As of June 30, 2021, we had $800.0 million of these unsecured senior notes outstanding that mature on March 15, 2031.
Future Debt Maturities
The following table summarizes the debt maturities and scheduled principal repayments of our indebtedness as of June 30, 2021 (in thousands):
YearAmount
2021$0 
202245,000 
2023300,000 
2024200,000 
20250 
Thereafter2,550,000 
Total$3,095,000 
Deferred Financing Costs
As of June 30, 2021, the future amortization of our deferred financing costs is as follows (in thousands):
YearAmount
2021$1,496 
20222,993 
20232,497 
20242,104 
20252,092 
Thereafter6,479 
Total$17,661 

Debt Covenants
We are required by the terms of our applicable loan agreements to meet various affirmative and negative covenants that we believe are customary for these types of facilities, such as limitations on the incurrence of debt by us and our subsidiaries that own unencumbered assets, limitations on the nature of HTALP’s business, and limitations on distributions by HTALP and its subsidiaries that own unencumbered assets. Our loan agreements also impose various financial covenants on us, such as a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a minimum tangible net worth covenant, a maximum ratio of unsecured indebtedness to unencumbered asset value, rent coverage ratios and a minimum ratio"make-whole" amount of unencumbered Net Operating Income (“NOI”) to unsecured interest expense. Asapproximately $0.6 million. The unamortized premium of June 30, 2021, we believe that we were in compliance with all such financial covenants and reporting requirements. In addition, certain of our loan agreements include events of default provisions that we believe are customary for these types of facilities, including restricting us from making dividend distributions to our stockholders in the event we are in default thereunder, except to the extent necessary for us to maintain our REIT status. We have also concluded as of June 30, 2021 we were not aware of non-compliance with any financial or non-financial covenants in light of the ongoing COVID-19 pandemic.
22

$0.1 million was written off upon payoff.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
9.Note 5. Derivative Financial Instruments and Hedging Activities
Risk Management Objective of Using Derivative Financial InstrumentsDerivatives
We may use derivative financial instruments,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, swaps, caps, options, floorsliquidity, and other interest rate derivative contracts, to hedge all or a portioncredit risk, primarily by managing the amount, sources, and duration of the interest rate risk associated with our borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with our operatingits assets and financial structure as well as to hedge specific anticipated transactions. We do not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. Theliabilities and the use of derivative financial instruments carries certain risks, includinginstruments. Specifically, the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, we only enterCompany enters into derivative financial instruments with counterparties with high credit ratingsto manage exposures that arise from business activities that result in the receipt or payment of future known and with major financial institutions withuncertain cash amounts, the value of which we and our affiliates may also have other financial relationships. We do not anticipate that any of the counterparties will fail to meet their obligations. We record counterparty credit risk valuation adjustments onare determined by interest rate swap derivative assets in order to properly reflect the credit quality of the counterparty. In addition, the fair value ofrates. The Company’s derivative financial instruments designated asare used to manage differences in the amount, timing, and duration of the Company’s known or expected cash flow hedges are adjustedreceipts and its known or expected cash payments principally related to reflect the impact of our credit quality.Company’s borrowings.
Cash Flow Hedges of Interest Rate Risk
OurThe Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage ourits exposure to interest rate movements. To accomplish this objective, wethe Company primarily useuses interest rate swaps and treasury locks as part of ourits interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for usthe Company making fixed ratefixed-rate payments over the life of the agreements without an exchange of the underlying notional amount. A treasury lockSuch derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.


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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 a synthetic forward sale of a U.S. treasury note,recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") and subsequently reclassified into interest expense in the same period(s) during which is settled in cash based upon the difference between an agreed upon treasury rate and the prevailing treasury rate at settlement. Such treasury locks are entered into to effectively fix the treasury component of an upcoming debt issuance.
hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income in the accompanying condensed consolidated balance sheetsAOCI related to derivatives will be reclassified to interest expense as interest payments are made on our variable ratethe Company’s variable-rate debt. During the next twelve months, we estimate that an additional $6.6 million will be reclassified from other comprehensive income in the accompanying condensed consolidated balance sheets as an increase to interest related to derivative financial instruments in the accompanying condensed consolidated statements of operations.
As of June 30, 2021, we2022, the Company had the following8 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (in thousands, except numberrisk:
DERIVATIVE INSTRUMENTNUMBER OF INSTRUMENTSNOTIONAL AMOUNT
in millions
Interest rate swaps8 $175.0

Tabular Disclosure of instruments):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, 2022.
Interest Rate SwapsJuneBALANCE AT JUNE 30, 20212022
Number ofIn thousandsBALANCE SHEET LOCATIONFAIR VALUE
Derivatives designated as hedging instruments
7Interest rate swaps 2017, 2018, and 2019Other assets$2,516 
Notional amount$500,000 

Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss)
The table below presents the fair valueeffect of our derivative financial instruments designated as cash flow hedges as well as the classification in the accompanying condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020, respectively (in thousands):
 Asset DerivativesLiability Derivatives
  Fair Value at:Fair Value at:
Derivatives Designated as Hedging Instruments:Balance Sheet
Location		June 30, 2021December 31, 2020Balance Sheet
Location		June 30, 2021December 31, 2020
Interest rate swapsReceivables and other assets$0 $0 Derivative financial instruments$10,755 $14,957 
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The table below presents the gain or loss recognizedhedge accounting on our derivative financial instruments designated as cash flow hedges as well as the classification in the accompanying condensed consolidated statements of operations forAOCI during the three and six months ended June 30, 2022 and 2021 and 2020, respectively (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
Effect of Derivative InstrumentsLocation in Statement of Operations and Comprehensive Income (Loss)2021202020212020
Gain (loss) recognized in OCIChange in unrealized losses on cash flow hedges$(150)$(4,300)$1,013 $(26,453)
Gain (loss) reclassified from accumulated OCI into incomeInterest expense(1,673)(1,072)(3,302)(727)
related to the Company's outstanding interest rate swaps.
(GAIN) LOSS RECOGNIZED IN
AOCI ON DERIVATIVE
three months ended June 30,		LOSS RECLASSIFIED FROM
AOCI INTO INCOME
three months ended June 30,
In thousands2022202120222021
Interest rate swaps$(1,663)$807 Interest expense$674 $965 
Settled treasury hedges— — Interest expense107 107 
Settled interest rate swaps— — Interest expense42 42 
 $(1,663)$807 Total interest expense$823 $1,114 

Credit Risk Related
GAIN RECOGNIZED IN
AOCI ON DERIVATIVE
six months ended June 30,		LOSS RECLASSIFIED FROM
AOCI INTO INCOME
six months ended June 30,
In thousands2022202120222021
Interest rate swaps$(6,822)$(2,043)Interest expense$1,612 $1,912 
Settled treasury hedges— — Interest expense213 213 
Settled interest rate swaps— — Interest expense84 84 
 $(6,822)$(2,043)Total interest expense$1,909 $2,209 
The Company estimates that $1.0 million related to active interest rate swaps will be reclassified from AOCI as a decrease to interest expense over the next 12 months, and that $0.6 million related to settled interest rate swaps will be amortized from AOCI as an increase to interest expense over the next 12 months.
Credit-risk-related Contingent Features
We haveThe Company's agreements with each of ourits derivative counterparties that contain a cross-default provision thatunder which the Company could be declared in default of its derivative obligations if we default on any of our indebtedness, including a default where repayment of the underlying indebtedness has not beenis accelerated by the lender then we could also be declared indue to the Company's default on our derivative obligations.
We also have agreements with each of our derivative counterparties that incorporate provisions from our indebtedness with a lender affiliate of the derivative counterparty requiring it to maintain certain minimum financial covenant ratios on our indebtedness. Failure to comply with the covenant provisions would result in us being in default on any derivative instrument obligations covered by these agreements.
As of June 30, 2021,2022, the fair value of derivatives in a net liabilityasset position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $11.0$2.4 million. As of June 30, 2021, we have2022, the Company has not posted any collateral related to these agreements and we werewas not in breach of any of the provisions of these agreements. If we had breached any of the provisions of these agreements, we could have been required to settle our obligations under these agreements.agreement.


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Note 6. Commitments and Contingencies
LitigationLegal Proceedings
We engage in litigationThe Company is, from time to time, with various parties as a routine partinvolved in litigation arising in the ordinary course of our business, including tenant defaults. However, we arebusiness. The Company is not presently subject toaware of any materialpending or threatened litigation nor, to our knowledge, is any material litigation threatenedthat, if resolved against us, which if determined unfavorably to us,the Company, would have a material adverse effect on our condensed consolidated financial position, results of operations or cash flows.
Environmental Matters
We follow the policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material effect on our condensed consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability at our properties that we believe would require additional disclosure or the recording of a loss contingency.
Unfunded Loan Commitments
Unfunded loan commitments include amounts undrawn on mezzanine loans. As of June 30, 2021, unfunded loan commitments totaled $20.6 million.
Other
Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business. In our opinion, these matters are not expected to have a material adverse effect on our condensedCompany’s consolidated financial position, results of operations or cash flows.
Redevelopment Activity
11. Stockholders’ EquityDuring the second quarter of 2022, the Company continued the redevelopment of a 217,114 square foot medical office building in Dallas, Texas. As of June 30, 2022, the Company had funded approximately $10.2 million in project costs. The building continues to operate with in-place leases during construction. The first new tenant lease of the redevelopment commenced in the first quarter of 2022.
During the second quarter of 2022, the Company continued the redevelopment of a medical office building in Tacoma, Washington. As of June 30, 2022, the Company had funded approximately $9.5 million in project costs. The redevelopment includes interior and Partners’ Capital
HTALP’s operating partnership agreement provides that it will distribute cash flow from operations and net sale proceeds to its partners in accordance with their overall ownership interests at such times and in such amounts as the general partner thereof determines. Dividend distributions are made such that a holder of 1 OP Unit in HTALP will receive distributions from HTALP in an amount equalexterior improvements to the dividend distributions paidexisting building, plus the addition of 23,000 square feet. The Company expects the 23,000 square foot tenant lease for the expansion space to commence in the fourth quarter of 2022.
During the second quarter of 2022, the Company continued the development of a medical office building in Nashville, Tennessee. The Company began construction of a 106,194 square foot medical office building with the initial tenant lease expected to commence in the third quarter of 2023. As of June 30, 2022, the Company had funded approximately $7.4 million in project costs. The redevelopment includes the demolition of an existing 81,000 square foot medical office building. The Company recognized an impairment charge of $5.0 million related to the holderexisting building in 2021.
During the second quarter of one share2022, the Company continued redevelopment projects related to the following:
•NaN medical office buildings totaling 158,338 square feet in Washington, DC. The Company has approved a leasing plan with a capital outlay that is expected to be completed in the first quarter of our common stock. In addition, for each share2024. As of June 30, 2022, the Company has funded $0.1 million in project costs.
•A medical office building totaling 145,365 square feet in Dallas, Texas. The Company has approved a capital and leasing plan that is expected to be completed in the first quarter of 2024. As of June 30, 2022, the Company has funded $0.6 million in project costs.
•A medical office building totaling 93,992 square feet in Denver, Colorado that is expected to be a part of a larger redevelopment plan that was initiated in the first quarter of 2022.
Note 7. Stockholders' Equity
Common Stock    
The following table provides a reconciliation of the beginning and ending shares of common stock issued or redeemed by HTA, HTALP issues or redeems a corresponding number of OP Units.outstanding for the six months ended June 30, 2022 and the twelve months ended December 31, 2021:
SIX MONTHS ENDED JUNE 30, 2022TWELVE MONTHS ENDED DECEMBER 31, 2021
Balance, beginning of period150,457,433 139,487,375 
Issuance of common stock745,483 10,899,301 
Non-vested share-based awards, net of withheld shares434,001 70,757 
Balance, end of period151,636,917 150,457,433 
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, – (Continued)cont.

Common Stock OfferingsAt-The-Market Equity Offering Program
In MarchOn August 6, 2021 weand November 5, 2021, the Company entered into equity distribution agreements with various sales agents with respect12 investment banks to ourallow for issuance and sale under its at-the-market (“ATM”)equity offering program of common stock withup to an aggregate sales amount of up to $750.0 million which replaces our prior ATM offering program that expiredof common stock. These agreements are no longer in February 2021. As of June 30, 2021, $750.0 million remained available for issuance by us under our current ATM.
Currently, we have 4 outstanding forward sale arrangements pursuant to forward equity agreements under our prior ATM program, with total anticipated net proceeds of $277.5 million based on an average initial forward price of $29.46, subject to adjustments as provided ineffect following the forward equity agreements. All 4closing of the arrangements have been extended and matureMerger on or about December 31, 2021. Refer to Note 13 - Per Share Data of HTA to these condensed consolidated financial statements for a more detailed discussion related to ourJuly 20, 2022. The following table details the Company's forward equity agreements.at-the-market activity:
Stock Repurchase Plan
In September 2020, our Board of Directors approved the reactivation of a stock repurchase plan authorizing us to purchase up to $300.0 million of our common stock from time to time prior to the expiration thereof on September 22, 2023. As of June 30, 2021, the remaining amount of common stock available for repurchase under our stock repurchase plan was $300.0 million.
WEIGHTED AVERAGE SALE PRICE
per share		FORWARD SHARE CONTRACTSSHARES SETTLEDSHARES REMAINING TO BE SETTLEDNET PROCEEDS
in millions
Balance at December 31, 2021$— — — 727,400 $— 
1Q 2022$31.73 — 727,400 — $22.3 
2Q 2022$— — — — $— 
Common Stock Dividends
See our accompanying condensed consolidated statementsDuring the six months ended June 30, 2022, the Company declared and paid common stock dividends totaling $0.62 per share. On July 1, 2022, the Company declared a prorated quarterly common stock dividend in the amount of equity$0.2010 per share payable on July 19, 2022 to stockholders of record onJuly 14, 2022. The remaining quarterly common stock dividend portion of $0.1090 per share was declared August 2, 2022 and condensed statementsis payable on August 30, 2022 to stockholders of changes in partners’ capital forrecord on August 15, 2022.
Earnings Per Common Share
The Company uses the dividends declared duringtwo-class method of computing net earnings per common shares. The Company's non-vested share-based awards are considered participating securities pursuant to the two-class method.
During the three and six months ended June 30, 2021 and 2020. As of June 30, 2021, declared, but unpaid, dividends totaling $71.3 million were included in accounts payable and accrued liabilities. On August 3, 2021 our Board of Directors announced an increased quarterly cash dividend of $0.325 per share of common stock and per OP Unit to be paid on October 11, 2021 to stockholders and unitholders of record on October 4, 2021.
Incentive Plan
On April 29, 2021, our Board of Directors approved and adopted the Amended and Restated 2006 Incentive Plan (the “Plan”), which was approved by our Stockholders on July 7, 2021 at our Annual Meeting of Stockholders. The Plan permits the grant of incentive awards to our employees, officers, non-employee directors and consultants as selected by our Board of Directors and authorizes us to grant awards in any of the following forms: options; stock appreciation rights; restricted stock; restricted or deferred stock units; performance awards; dividend equivalents; and other stock-based and cash-based awards. The aggregate number of awards reserved and available for issuance under the Plan is 10,000,000 shares. There were 0 issuances of stock under the Plan, as amended, as of June 30, 2021.
Restricted Common Stock
For the three and six months ended June 30, 2021, we recognized compensation expense of $2.1 million and $5.4 million, respectively. For the three and six months ended June 30, 2020, we recognized compensation expense of $2.1 million and $5.3 million, respectively. Substantially all compensation expense was recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations.
As of June 30, 2021, we had $7.9 million of unrecognized compensation expense, net of estimated forfeitures, which we will recognize over a remaining weighted average period of 1.9 years.
The following is a summary of our restricted common stock activity as of June 30, 2021 and 2020, respectively:
June 30, 2021June 30, 2020
Restricted Common StockWeighted
Average Grant
Date Fair Value		Restricted Common StockWeighted
Average Grant
Date Fair Value
Beginning balance436,399 $28.27 600,987 $28.04 
Granted354,288 26.62 244,531 30.20 
Vested(270,099)27.48 (361,150)28.89 
Forfeited(6,767)28.87 (10,197)28.78 
Ending balance513,821 $27.54 474,171 $28.49 

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
12. Fair Value of Financial Instruments
Financial Instruments Reported at Fair Value - Recurring
The table below presents the carrying amounts and fair values of our financial instruments on a recurring basis as of June 30, 2021 and December 31, 2020, respectively (in thousands):
June 30, 2021December 31, 2020
Carrying AmountFair ValueCarrying AmountFair Value
Level 2 - Assets:
Real estate notes receivable, net$46,341 $46,341 $0 $0 
Derivative financial instruments0 0 0 0 
Level 2 - Liabilities:
Derivative financial instruments$10,755 $10,755 $14,957 $14,957 
Debt3,073,465 3,227,343 3,026,999 3,258,573 
The carrying amounts of cash and cash equivalents, tenant and other receivables, restricted cash, accounts payable, and accrued liabilities approximate fair value. Fair values for real estate notes receivable are estimated based on rates currently prevailing for similar instruments of similar maturities and are based primarily on Level 2 inputs. Although we have determined that the majority of the inputs used to value our cash flow hedges fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our cash flow hedge positions and have determined that the credit valuation adjustments are not significant to their overall valuation. As a result, we have determined that our cash flow hedge valuations in their entirety are classified in Level 2 of the fair value hierarchy.For further discussion of the assumptions considered, refer to Note 2 - Summary of Significant Accounting Policies.
Financial Instruments Reported at Fair Value - Non-Recurring
We also have assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. This category generally includes assets subject to impairment.
The table below presents our assets measured at fair value on a non-recurring basis as of June 30, 2021 and December 31, 2020 (in thousands):
June 30, 2021December 31, 2020
Fair ValueFair Value
Level 2 - Assets:
MOB (1)
$27,318 $0 
(1) The hold period was revised by2022, the Company to be less than the previously estimated useful life for 2 MOBs. Consequently, at June 30, 2021, MOBs with a carrying amount of $44.1 million were written down to their fair value $27.3 million, resulting in impairment charges of $16.8 million for the six months ended June 30, 2021. The estimated fair values for these MOBs as of June 30, 2021 were based on a purchase option and a pending sales agreement, both of which were executed subsequent to June 30, 2021.
13. Per Share Data of HTA
Currently, we have 4 outstandingdid not enter into any forward sale arrangements pursuantagreements to forward equity agreements, with total anticipated net proceeds of $277.5 million, based on an average initial forward price of $29.46, subject to adjustments as provided in the forward equity agreements. All 4 of the arrangements have been extended and mature on or about December 31, 2021.
To account for the forward equity agreements, we considered the accounting guidance governing financial instruments and derivatives and concluded that our forward equity agreements were not liabilities as they did not embody obligations to repurchase oursell shares of common stock nor did they embody obligations to issue a variable numberthrough the Company's at-the market equity offering program.
The following table sets forth the computation of shares for which the monetary value was predominately fixed, varying with something other than the fair value of the shares, or varying inversely in relation to the fair value of our shares. We also evaluated whether the agreements met the derivativesbasic and hedging guidance scope exception to be accounted for as equity instruments and concluded that the agreements can be classified as an equity contract based on the following assessment: (i) none of the agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to our own common stock.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
In addition, we considered the potential dilution resulting from the forward equity agreements mentioned above on ourdiluted earnings per common share calculations. We use the treasury method to determine the dilution resulting from the forward equity agreements during the period of time prior to settlement. The impact to our weighted-average shares - diluted was anti-dilutive in nature and, thus, approximately 389,000 and 445,000 shares were excluded from the calculation for the three and six months ended June 30, 2022 and 2021. For
THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
Dollars in thousands, except per share data2022202120222021
Weighted average common shares outstanding
Weighted average common shares outstanding151,620,897 143,700,491 151,230,064 142,142,577 
Non-vested shares(1,945,042)(1,783,278)(1,908,652)(1,788,410)
Weighted average common shares outstanding - basic149,675,855 141,917,213 149,321,412 140,354,167 
Weighted average common shares outstanding - basic149,675,855 141,917,213 149,321,412 140,354,167 
Dilutive effect of forward equity shares— 61,064 — 27,896 
Dilutive effect of employee stock purchase plan62,694 70,711 75,394 85,714 
Weighted average common shares outstanding - diluted149,738,549 142,048,988 149,396,806 140,467,777 
Net Income$6,130 $23,096 $48,357 $47,118 
Dividends paid on nonvested share-based awards(601)(539)(1,207)(1,080)
Net income applicable to common stockholders$5,529 $22,557 $47,150 $46,038 
Basic earnings per common share - net income$0.04 $0.16 $0.32 $0.33 
Diluted earnings per common share - net income$0.04 $0.16 $0.32 $0.33 

Incentive Plans
Restricted Common Shares
During the three and six months ended June 30, 2020,2022, the impactCompany made the following stock awards:
•During the first quarter of 2022, the Company granted non-vested stock awards to our weighted-averageits named executive officers and other members of senior management and employees with a grant date fair value of


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

$13.0 million, which consisted of an aggregate of 415,184 non-vested shares - diluted was anti-dilutive in nature and, thus, approximately 1.4with vesting periods ranging from three to eight years.
•During the second quarter of 2022, the Company granted non-vested stock awards to its 8 directors with a grant date fair value of $0.8 million, and 0.5 millionwhich consisted of an aggregate of 26,840 non-vested shares, respectively, were excluded from the calculation.with a one-year vesting period.
We include unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents as “participating securities” pursuant to the two-class method. The resulting classes are our common stock and restricted stock. Our forward equity agreements are not considered a participating security and, therefore, are not included in the computation of earnings per share using the two-class method. For the three and six months ended June 30, 2021 and 2020, all of our earnings were distributed and the calculated earnings per share amount would be the same for all classes.
The following is the reconciliationA summary of the numerator and denominator used in basic and diluted earnings per share of HTAactivity under the Company's share-based incentive plans for the three and six months ended June 30, 2022 and 2021 and 2020, respectively (in thousands, except per share data):
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Numerator:
Net income$38,739 $13,725 $61,132 $31,933 
Net income attributable to non-controlling interests(728)(236)(1,091)(543)
Net income attributable to common stockholders$38,011 $13,489 $60,041 $31,390 
Denominator:
Weighted average shares outstanding - basic218,822 218,483 218,787 217,588 
Dilutive shares - OP Units convertible into common stock3,504 3,605 3,510 3,640 
Adjusted weighted average shares outstanding - diluted222,326 222,088 222,297 221,228 
Earnings per common share - basic
Net income attributable to common stockholders$0.17 $0.06 $0.27 $0.14 
Earnings per common share - diluted
Net income attributable to common stockholders$0.17 $0.06 $0.27 $0.14 
is included in the table below.
THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
 2022202120222021
Share-based awards, beginning of period1,951,551 1,786,371 1,562,028 1,766,061 
Granted26,840 37,978 442,024 203,701 
Vested(36,682)(46,041)(61,047)(191,454)
Forfeited— — (1,296)— 
Share-based awards, end of period1,941,709 1,778,308 1,941,709 1,778,308 

During the six months ended June 30, 2022 and 2021, the Company withheld 6,727 and 51,972 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested.
14. Per Unit DataRestricted Stock Units
Prior to 2022, the Company granted long-term incentive awards, comprised of HTALP
Currently, we have 4 outstanding forward sale arrangements pursuant to forward equity agreements, with total anticipated net proceeds of $277.5 million, subject to adjustments as provided inrestricted stock, based on backward-looking performance measured at the forward equity agreements. All 4end of the arrangements have been extendedcalendar year. The Company adopted a new incentive compensation structure effective January 2022, comprised of restricted stock and maturerestricted stock units ("RSUs"). The RSUs are granted at the beginning of the year with three-year forward-looking performance targets.
On January 3, 2022, the Company granted restricted stock units to its named executive officers and certain other members of senior management and officers, with a grant date fair value of $9.7 million, which consisted of an aggregate 294,932 RSUs with a five-year vesting period.
Approximately 43% of the RSUs vest based on or about December 31, 2021. Refertwo 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 Note 13 - Per Share Datacalculate the weighted average grant date fair values of HTA$30.56 for the absolute TSR component and $41.30 for the relative TSR component for the January 2022 grant using the following assumptions:
THREE MONTHS ENDED MARCH 31,
Volatility30.0 %
Dividend assumptionAccrued
Expected term in years3 years
Risk-free rate1.02 %
Stock price (per share)$31.68
The remaining 57% of the restricted stock units vest upon certain operating performance conditions. With respect to these condensed consolidated financial statements for a more detailed discussion related to our forward equity agreements executed in 2019 and March 2020.the operating performance conditions of the January grant, the grant date fair value was $31.68 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January restricted stock units was $33.04 per share.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, – (Continued)cont.

The following is the reconciliationa summary of the numeratorRSU activity during the three and denominator used in basic and diluted earnings per unitsix months ended June 30, 2022:
THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
 Restricted Stock UnitsWeighted Average Grant Date Fair ValueRestricted Stock UnitsWeighted Average Grant Date Fair Value
Non-vested, beginning of period294,932 — — — 
Granted— — 294,932 $33.04 
Vested— — — — 
Non-vested as of June 30, 2022294,932 — 294,932 
Employee Stock Purchase Plan
In addition to the share-based incentive plans, the Company maintains the Employee Stock Purchase Plan. A summary of HTALPthe activity under the Purchase Plan for the three and six months ended June 30, 2022 and 2021 is included in the table below.
THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
 2022202120222021
Outstanding and exercisable, beginning of period427,802 415,299 348,514 341,647 
Granted— — 255,960 253,200 
Exercised(1,965)(3,012)(12,518)(18,977)
Forfeited(20,303)(22,873)(45,789)(42,034)
Expired— — (140,633)(144,422)
Outstanding and exercisable, end of period405,534 389,414 405,534 389,414 
Note 8. Fair Value of Financial Instruments
The following methods and 2020, respectively (in thousands, except per unit data):assumptions were used to estimate the fair value of each class of financial instrument for which it is practical to estimate that value.
•
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Numerator:
Net income$38,739 $13,725 $61,132 $31,933 
Net income attributable to non-controlling interests0 0 0 0 
Net income attributable to common unitholders$38,739 $13,725 $61,132 $31,933 
Denominator:
Weighted average OP Units outstanding - basic222,326 222,088 222,297 221,228 
Dilutive units - OP Units convertible into common units0 0 0 0 
Adjusted weighted average units outstanding - diluted222,326 222,088 222,297 221,228 
Earnings per common unit - basic:
Net income attributable to common unitholders$0.17 $0.06 $0.28 $0.14 
Earnings per common unit - diluted:
Net income attributable to common unitholders$0.17 $0.06 $0.28 $0.14 
Cash and cash equivalents - The carrying amount approximates fair value due to the short term maturity of these investments.
•Borrowings under the Unsecured Credit Facility and the Term Loans Due 2024 and 2026 - The carrying amount approximates fair value because the borrowings are based on variable market interest rates.
•Senior Notes and Mortgage Notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements.
•Interest rate swap agreements - Interest rate swap agreements are recorded in other liabilities on the Company's Condensed Consolidated Balance Sheets at fair value. Fair value is estimated by utilizing pricing models that consider forward yield curves and discount rates.
The table below details the fair values and carrying values for notes and bonds payable at June 30, 2022 and December 31, 2021.
 June 30, 2022December 31, 2021
Dollars in millionsCARRYING VALUEFAIR VALUECARRYING VALUEFAIR VALUE
Notes and bonds payable 1
$2,063.8 $1,955.6 $1,801.3 $1,797.4 
1Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.
Note 9. Subsequent Events
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” or the "Company"), 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”). Pursuant to the Merger Agreement, on the Closing Date, 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,


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Legacy HR converted to a Maryland limited liability company and changed its name to “HRTI, LLC” and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”. In addition, the equity interests of Legacy HR were contributed by Legacy HTA by means of a contribution and assignment agreement to the OP such that Legacy HR became a wholly-owned subsidiary of the OP. As a result, Legacy HR became a part of an umbrella partnership REIT (“UPREIT”) structure, which is intended to align the corporate structure of the combined company after giving effect to the Merger and the UPREIT reorganization (the “Combined Company”) and to provide a platform for the Combined Company to more efficiently acquire properties in a tax-deferred manner. The Combined Company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $0.01 par value per share, trade on the New York Stock Exchange (the “NYSE”) under the ticker symbol “HR”.
Executive Officers and Directors
The executive officers of the Company immediately preceding the Merger serve as the executive officers of the Combined Company. The board of directors of the Combined Company is comprised of all 9 directors from the Company's board and 4 directors from HTA’s board.
Exchange Offer
In connection with the Merger, the OP offered to exchange all validly tendered and accepted notes of each series previously issued by Legacy HR (the “Old HR Notes”) for (i) up to $250,000,000 of 3.875% Senior Notes due 2025 (the “2025 Notes”), (ii) up to $300,000,000 of 3.625% Senior Notes due 2028 (the “2028 Notes”), (iii) up to $300,000,000 of 2.400% Senior Notes due 2030 (the “2030 Notes”) and (iv) up to $300,000,000 of 2.050% Senior Notes due 2031 to be issued by the OP (the “2031 Notes” and, collectively, the “New HR Notes”) and solicited consents from holders of the Old HR Notes to amend the indenture governing the Old HR Notes to eliminate substantially all of the restrictive covenants in such indenture (the “Exchange Offers”). The New HR Notes were issued pursuant to an indenture dated July 22, 2022, among the OP, Legacy HTA and U.S. Bank Trust Company, National Association, as trustee, as supplemented by the first supplemental indenture, dated as of July 22, 2022, the second supplemental indenture, dated as of July 22, 2022, the third supplemental indenture, dated as of July 22, 2022 and the fourth supplemental indenture, dated as of July 22, 2022. Legacy HTA guaranteed the New HR Notes pursuant to (i) a guarantee of the 2025 Notes, (ii) a guarantee of the 2028 Notes, (iii) a guarantee of the 2030 Notes, and (iv) a guarantee of the 2031 Notes, each dated July 22, 2022. Legacy HTA and the OP filed a registration statement on Form S-4 (File No. 333-265593) relating to the issuance of the New HR Notes with the Securities and Exchange Commission (the “SEC”) on June 14, 2022, which was declared effective by the SEC on June 28, 2022. The following sets forth the results of the Exchange Offers:
Series of Old HR NotesTenders and Consents Received as of the Expiration DatePercentage of Total Outstanding Principal Amount of Such Series of Old HR Notes
3.875 %Senior Notes due 2025$235,016,00094.01 %
3.625 %Senior Notes due 2028$290,246,00096.75 %
2.400 %Senior Notes due 2030$297,507,00099.17 %
2.050 %Senior Notes due 2031$298,858,00099.62 %
Credit Facilities
In connection with the effectiveness of the Merger, Legacy HR (in a limited capacity), Legacy HTA and the OP entered into the Fourth Amended and Restated Credit and Term Loan Agreement (the “Credit Facility”) with Wells Fargo Bank, National Association, as Administrative Agent; Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., and Citibank, N.A., as Joint Book Runners; Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., U.S. Bank National Association, Citibank, N.A., The Bank of Nova Scotia, Capital One, National Association, U.S. Bank National Association, and PNC Capital Markets LLC, as Joint Lead Arrangers; and the other lenders named therein. The Credit Facility restructures the parties’ existing bank facilities and adds additional borrowing capacities for the Combined Company following the Merger. The OP is the supplemental cash flow information forborrower under the six months ended June 30, 2021Credit Facility (in such capacity, the “Borrower”).
•Legacy HR’s existing $700.0 million revolving credit facility under the Amended and 2020, respectively (in thousands):Restated Credit Agreement, dated as of May 31, 2019 (as amended, restated, replaced, supplemented, or otherwise modified
Six Months Ended June 30,
20212020
Supplemental Disclosure of Cash Flow Information:
Interest paid, net of capitalized interest$39,827 $44,230 
Cash paid for operating leases7,942 6,340 
Supplemental Disclosure of Noncash Investing and Financing Activities:
Accrued capital expenditures$13,065 $8,536 
Dividend distributions declared, but not paid71,302 69,956 
Redemption of non-controlling interest546 7,872 
ROU assets obtained in exchange for lease obligations7,683 0 


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

from time to time prior to July 20, 2022, the “Existing HR Revolving Credit Agreement”), by and among Legacy HR, the lenders party thereto from time to time and their assignees, as lenders, and Wells Fargo Bank, National Association, as the administrative agent (the “WF Administrative Agent”), was terminated, all outstanding obligations in respect thereof were deemed paid in full and all commitments thereunder were permanently reduced to zero and terminated.
•Legacy HR’s existing $200.0 million term loan facility and existing $150.0 million term loan facility under the Amended and Restated Term Loan Agreement, dated as of May 31, 2019 (as amended, restated, replaced, supplemented, or otherwise modified from time to time prior to July 20, 2022, the “Existing HR Term Loan Agreement”), by and among Legacy HR, the lenders party thereto from time to time and their assignees, as lenders, and the WF Administrative Agent, in each, case, were deemed continued and assumed by the Borrower under the Credit Facility, and the Existing HR Term Loan Agreement was terminated.
◦The existing $200.0 million term loan facility was amended to: (a) conform to the terms of the Borrower’s other term loan facilities under the Credit Facility; (b) include 2 one-year extension options, resulting in a latest final maturity in May 2026; and (c) reprice to align with the pricing for the Borrower’s other term loan facilities under the Credit Facility; and
◦The existing $150.0 million term loan facility was amended to conform to the terms of the Borrower’s other term loan facilities under the Credit Facility, and the existing maturity in June 2026 remains unchanged under the Credit Facility.
•Legacy HTA’s and the OP’s existing $1.0 billion revolving credit facility was upsized to $1.5 billion (the “Revolver”) pursuant to the Credit Facility. The Revolver currently matures in October 2025, and the Credit Facility adds an additional one-year extension option for the Revolver, for a total of 2 one-year extension options.
•Legacy HTA’s and the OP’s existing $300.0 million term loan facility was deemed continued pursuant to the Credit Facility and was amended to conform to the terms of the Borrower’s other term loan facilities under the Credit Facility. The existing maturity in October 2025 remains unchanged under the Credit Facility.
•Legacy HTA’s and the OP’s existing $200.0 million term loan facility was deemed continued pursuant to the Credit Facility and was amended to (a) conform to the terms of the Borrower’s other term loan facilities under the Credit Facility; (b) extend the maturity from January 2024 to July 20, 2027; and (c) reprice to align with the pricing for the Borrower’s other term loan facilities under the Credit Facility.
•The Credit Facility provides for a new $350.0 million delayed-draw term loan facility that is available to be drawn for 12 months after July 20, 2022 and has an initial maturity date of July 20, 2023, with 2 one-year extension options. The terms of any delayed draw term loans funded thereunder conform to the terms of the Borrower’s other term loan facilities under the Credit Facility, and the pricing for such delayed draw term loans aligns with the pricing for the Borrower’s other term loan facilities under the Credit Facility.
•The Credit Facility provides for a new $300.0 million term loan facility that was funded on July 20, 2022 and has a maturity of January 20, 2028, with no extension options. The terms of such term loan facility conform to the terms of the Borrower’s other term loan facilities under the Credit Facility, and the pricing for such term loan facility aligns with the pricing for the Borrower’s other term loan facilities under the Credit Facility.
Special Dividend
On May 13, 2022, Legacy HTA entered into a new $1.125 billion term loan agreement to fund the special dividend pursuant to the terms of the Merger Agreement. Prior to the Merger, Legacy HTA drew against the term loan to fund the special dividend of $4.82 that was declared on July 6, 2022 for shareholders of record on July 19, 2022. The special dividend was paid to all Legacy HTA shareholders on July 27, 2022. The Company plans to repay the term loan with proceeds from asset sales and joint ventures. As of the date of this report, the Company has closed on $433 million in joint ventures and asset sales. The remainder is expected to close in the third quarter of 2022.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The use of
Disclosure Regarding Forward-Looking Statements
This report and other materials the words “we,” “us,”Company has filed or “our” refers to HTAmay file with the Securities and HTALP, collectively.
The following discussion should be read in conjunction with our condensed consolidated financial statements and notes appearing elsewhere in this Quarterly Report,Exchange Commission (the "SEC"), as well as information included in oral statements or other written statements made, or to be made, by management of the Company, contain, or will contain, disclosures that are “forward-looking statements.” Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “target,” “intend,” “plan,” “estimate,” “project,” “continue,” “should,” “could," "budget" and other comparable terms, and include, but are not limited to, statements related to the anticipated timing, financing benefits and financial and operational impact of the Merger. These forward-looking statements are based on the Company's, and with respect to the Merger, include HTA's, current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with: risks related to diverting the attention the Company's management from ongoing business operations; failure to realize the expected benefits of the Merger; significant transaction costs and/or unknown or inestimable liabilities of the Merger; the risk of shareholder litigation in connection with the audited consolidatedMerger, including resulting expense or delay; 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 Combined Company, including the uncertainty of expected future financial statements, accompanying notesperformance and Management’s Discussionresults of the Combined Company following completion of the transaction; the possibility that, if the Combined 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 Combined Company’s common stock could decline; general adverse economic and Analysislocal real estate conditions; the inability of Financial Conditionsignificant tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business; increases in interest rates; increases in operating expenses and Results of Operations includedreal estate taxes; changes in our 2020the dividend policy for the Combined Company’s common stock or its ability to pay dividends; impairment charges; pandemics or other health crises, such as COVID-19; and other risks and uncertainties affecting the Combined Company, including those described from time to time under the caption “Risk Factors” and elsewhere in the Combined Company’s filings and reports with the SEC, including the Company’s Annual Report on Form 10-K.10-K for the year ended December 31, 2021. Moreover, other risks and uncertainties of which the Combined Company is not currently aware may also affect the Combined 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 Combined Company on its website or otherwise. The Combined 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.
TheStockholders and investors are cautioned not to unduly rely on such forward-looking statements when evaluating the information set forth belowpresented in the Combined Company’s filings and reports, including, without limitation, estimates and projections regarding the performance of development projects the Combined Company is pursuing.
For a detailed discussion of the Combined Company’s risk factors, please refer to Legacy HR's and Legacy HTA's filings with the SEC, including this report and Item 1A. Risk Factors herein and Legacy HR's and Legacy HTA's Annual Report on Form 10-K for the year ended December 31, 2021.
Merger with Healthcare Trust of America
Completed Merger    
On July 20, 2022, Legacy HR, Legacy HTA, the OP and Merger Sub completed the Merger in accordance with the terms of the Merger Agreement. Immediately following the Merger, Legacy HR converted to a Maryland limited liability company and changed its name to “HRTI, LLC” and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”. In addition, the equity interests of Legacy HR were contributed by Legacy HTA by means of a contribution and assignment agreement to the OP such that Legacy HR became a wholly-owned subsidiary of the OP. As a result, Legacy HR became a part of an umbrella partnership REIT (“UPREIT”) structure, which is intended to align the corporate structure of the combined company after giving effect to the Merger and the UPREIT reorganization (the “Combined Company”) and to provide readers with an understandinga 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 our financial condition, changesclass A common stock, $0.01 par value per share, trade on the New York Stock Exchange (the “NYSE”) under the ticker symbol “HR”.


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Unless expressly stated otherwise, the discussion in this Item 2 refers to Legacy HR's financial condition and results of operations.
•Forward-Looking Statements;
•Executive Summary;
•Company Highlights;
•Critical Accounting Policies;
•Recently Issued or Adopted Accounting Pronouncements;
•Factors Which May Influence Results of Operations;
•Results of Operations;
•Non-GAAP Financial Measures;
•Liquidity and Capital Resources;
•Commitments and Contingencies;
•Debt Service Requirements;
•Off-Balance Sheet Arrangements; and
•Inflation.
Forward-Looking Statements
Certain statements contained in this Quarterly Report constitute forward-looking statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”)). Such statements include, in particular, statements about our plans, strategies, prospects and estimates regarding future MOB market performance. Additionally, such statements are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially and in adverse ways from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Forward-looking statements are generally identifiable by the use of such terms as “expect,” “project,” “may,” “should,” “could,” “would,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “opinion,” “predict,” “potential,” “pro forma” or the negative of such terms and other comparable terminology. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Quarterly Report is filed with the SEC. We cannot guarantee the accuracy of any such forward-looking statements contained in this Quarterly Report, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Any such forward-looking statements reflect our current views about future events, are subject to unknown risks, uncertainties, and other factors, and are basedoperations on a number of assumptions involving judgments with respectstand-alone basis prior to among other things, future economic, competitive and market conditions, all of which are difficult or impossiblegiving effect to predict accurately. To the extent that our assumptions differ from actual results, our abilityMerger. Because Legacy HR was the accounting acquirer under GAAP in the transaction, its historical financial statements become the historical financial statements for the Company. For additional information, please refer to meet such forward-looking statements, including our ability to generate positive cash flow from operations, provide dividends to stockholders and maintain the value of our real estate properties, may be significantly hindered. Factors that might impair our ability to meet such forward-looking statements include, without limitation, those discussed in Part I, Item 1A - Risk Factors in our 2020 Annual Report on Form 10-K, which is incorporated herein and those discussed in Part II, Item 1A. Risk FactorsExplanatory Note in this Quarterly Report on Form 10-Q.
Forward-looking statements express expectationsLiquidity and Capital Resources
Sources and Uses of future events. All forward-looking statements are inherently uncertain as they areCash
The Company’s primary sources of cash include rent receipts from its real estate portfolio based on various expectationscontractual arrangements with its tenants, proceeds from the sales of real estate properties, joint ventures, and assumptions concerning future events and they are subjectproceeds from public or private debt or equity offerings. Prior to numerous known and unknown risks and uncertainties that could cause actual events or results to differ materially from those projected. Due to these inherent uncertainties, our stockholders are urged not to place undue reliance on forward-looking statements. Forward-looking statements speak only asthe refinancing of the date made. In addition, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required by law.
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These risks and uncertainties should be consideredits bank facilities in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filingsconnection with the SEC.
Executive Summary
We are the largest publicly-traded REIT focused on MOBs in the U.S. as measured by the gross leasable area ("GLA") of our MOBs. We conduct substantially all of our operations through HTALP. We invest in MOBs that we believe will serve the future of healthcare delivery and MOBs that are primarily located on health system campuses, near university medical centers, or in core community outpatient locations. We also focus on key markets that have certain demographic and macro-economic trends and where we can utilize our institutional full-service operating platform to generate strong tenant and health system relationships and operating cost efficiencies. Our primary objective is to maximize stockholder value with disciplined growth through strategic investments that provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow. In pursuing this objective, we: (i) seek internal growth through proactive asset management, leasing, building services and property management oversight; (ii) target accretive acquisitions and developments of MOBs in markets with attractive demographics that complement our existing portfolio; and (iii) actively manage our balance sheet to maintain flexibility with conservative leverage.  Additionally, from time to time we consider, on an opportunistic basis, significant portfolio acquisitions that we believe fit our core business and could enhance our existing portfolio.
Since 2006, we have invested $7.5 billion primarily in MOBs, development projects, land and other healthcare real estate assets consisting of approximately 25.3 million square feet of GLA throughout the U.S. Approximately 67% of our portfolio is located on the campuses of, or adjacent to, nationally and regionally recognized healthcare systems. Our portfolio is diversified geographically across 32 states, with no state having more than 20% of our total GLAMerger, as of June 30, 2021. We2022, the Company had $209.5 million available to be drawn on its unsecured credit facility under the Amended and Restated Credit Agreement, dated as of May 31, 2019 (the "Unsecured Credit Facility") and $34.3 million in cash.
The Combined 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 described in Note 9 to the Condensed Consolidated Financial Statements included in this report. The Combined Company believes that its liquidity and sources of capital are concentratedadequate to satisfy its cash requirements. The Combined Company cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to the Combined Company in 20sufficient amounts to 25 key markets that are generally experiencing higher economicmeet its liquidity needs.
Financings in Connection with the Merger
Credit Facilities
In connection with the effectiveness of the Merger, Legacy HR (in a limited capacity), Legacy HTA and demographic trends thanthe OP entered into the Fourth Amended and Restated Credit and Term Loan Agreement (the “Credit Facility”) with Wells Fargo Bank, National Association, as Administrative Agent; Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., and Citibank, N.A., as Joint Book Runners; Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., U.S. Bank National Association, Citibank, N.A., The Bank of Nova Scotia, Capital One, National Association, U.S. Bank National Association, and PNC Capital Markets LLC, as Joint Lead Arrangers; and the other markets that we expect will drive demand for MOBs. As of June 30, 2021, we had approximately 1 million square feet of GLA in ten of our top 20 marketslenders named therein. The Credit Facility restructures the parties’ existing bank facilities and approximately 95% of our portfolio, based on GLA, is located in the top 75 Metropolitan Statistical Area ("MSAs"), with Dallas, Boston, Houston, Miami and Indianapolis being our largest markets by annualized base rent.
Company Highlights
Portfolio Operating Performance
•For the three months ended June 30, 2021, our total revenue was $188.6 million, compared to $178.8 millionadds additional borrowing capacities for the three months ended June 30, 2020. ForCombined Company following the six months ended June 30, 2021, our total revenue was $380.1 million, comparedMerger. See Note 9 to $364.6 millionthe Condensed Consolidated Financial Statements for additional information.
Investing Activities
Cash flows used in investing activities for the six months ended June 30, 2020.2022 were approximately $281.2 million. Below is a summary of significant investing activities.

•
22
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Company Acquisitions
The following table details the three months ended June 30, 2021, our net income was $38.7 million, compared to $13.7 million, for the three months ended June 30, 2020. For the six months ended June 30, 2021, our net income was $61.1 million, compared to $31.9 millionCompany's acquisitions for the six months ended June 30, 2020.2022:
Dollars in thousands
ASSOCIATED HEALTH SYSTEM/TENANCY 1
DATE ACQUIREDPURCHASE PRICESQUARE FOOTAGEMILES TO CAMPUS
Dallas, TXTexas Health Resources2/11/22$8,175 18,0000.19
San Francisco, CA 2
Kaiser/Sutter Health3/7/22114,000 166,396 0.90 to 3.30
Atlanta, GAWellstar Health4/7/226,912 21,535 0.00
Denver, COCentura Health4/13/226,320 12,207 2.40
Colorado Springs, CO 3
Centura Health4/13/2213,680 25,800 0.80 to 1.70
Seattle, WAUW Medicine4/28/228,350 13,256 0.05
Houston, TXCommonSpirit4/28/2236,250 76,781 1.70
Los Angeles, CACedars-Sinai Health Systems4/29/2235,000 34,282 0.11
Oklahoma City, OKMercy Health4/29/2211,100 34,944 0.18
Raleigh, NC 2
WakeMed/None5/31/2227,500 85,113 0.25 to 12.30
Tampa, FL 3
BayCare Health6/9/2218,650 55,788 0.23
Total real estate acquisitions$285,937 544,102 
1Includes buildings located on-campus, adjacent and off-campus that are anchored by healthcare systems or located within two miles of a hospital campus.
•2For theIncludes three months endedproperties.
3Includes two properties.

Subsequent to June 30, 2021, our net income attributable2022 and unrelated to common stockholders was $0.17 per diluted share, or $38.0 million, compared to $0.06 per diluted share, or $13.5 million, for the three months ended June 30, 2020. ForMerger, the six months ended June 30, 2021, our net income attributable to common stockholders was $0.27 per diluted share, or $60.0 million, compared to $0.14 per diluted share, or $31.4 million,Company acquired the following property:
Dollars in thousands
ASSOCIATED HEALTH SYSTEM/TENANCY 1
DATE ACQUIREDPURCHASE PRICESQUARE FOOTAGEMILES TO CAMPUS
Seattle, WAEvergreenHealth8/1/22$4,850 10,5930.24

TIAA Joint Venture Acquisitions
The following table details the TIAA Joint Venture's acquisitions for the six months ended June 30, 2020.2022:
Dollars in thousands
ASSOCIATED HEALTH SYSTEM/TENANCY 1
DATE ACQUIREDPURCHASE PRICESQUARE FOOTAGEMILES TO CAMPUSCOMPANY OWNERSHIP %
San Francisco, CA 2
MarinHealth/Kaiser3/7/22$67,175 110,8650.00 to 3.3050 %
Los Angeles, CA 3
Valley Presbyterian Health3/7/2233,800 103,259 1.3050 %
Total TIAA Joint Venture acquisitions$100,975 214,124 
1Includes buildings located on-campus, adjacent and off-campus that are anchored by healthcare systems or located within two miles of a hospital campus.
•2For theIncludes three months ended June 30, 2021, HTA’s FFO, as defined by NAREIT, was $96.8 million, or $0.44 per diluted share, compared to $0.40 per diluted share, or $87.8 million, for the three months ended June 30, 2020. Forproperties.
3Includes two properties.

Dispositions
The Company disposed of four properties during the six months ended June 30, 2021, HTA’s FFO was $194.62022 for a total sales price of $110.5 million, or $0.88 per diluted share, compared to $0.82 per diluted share, or $180.9 million,including cash proceeds of $108.1 million. The following table details these dispositions for the six months ended June 30, 2020.2022:
Dollars in thousandsDate DisposedSales PriceSquare Footage
Loveland, CO 1
2/24/22$84,950 150,291
San Antonio, TX 1
4/15/2225,500 201,523
Total dispositions$110,450 351,814 
•1For the three months ended June 30, 2021, HTALP’s FFO was $97.5 million, or $0.44 per diluted OP Unit, compared to $0.40 per diluted OP Unit, or $88.0 million, for the three months ended June 30, 2020. For the six months ended June 30, 2021, HTALP’s FFO was $195.7 million, or $0.88 per diluted OP Unit, compared to $0.82 per diluted OP Unit, or $181.4 million, for the six months ended June 30, 2020.
•For the three months ended June 30, 2021, HTA’s and HTALP’s Normalized FFO was $0.44 per diluted share and OP Unit, or $97.6 million, compared to $0.42 per diluted share and OP Unit, or $93.0 million for the three months ended June 30, 2020. For the six months ended June 30, 2021, HTA’s and HTALP’s Normalized FFO was $0.88 per diluted share and OP Unit, or $195.9 million, compared to $0.84 per diluted share and OP Unit, or $186.6 million for the six months ended June 30, 2020.
•For additional information on FFO and Normalized FFO, see “FFO and Normalized FFO” below, which includes a reconciliation to net income attributable to common stockholders/unitholders and an explanation of why we present this non-GAAP financial measure.Includes two properties.
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•For the three months ended June 30, 2021, our NOI was $131.2 million, compared to $122.6 million for the three months ended June 30, 2020. For the six months ended June 30, 2021, our NOI was $263.1 million, compared to $251.6 million for the six months ended June 30, 2020.
•For the three months ended June 30, 2021, our Same-Property Cash NOI increased 2.1%, or $2.5 million, to $122.5 million, compared to $120.1 million for the three months ended June 30, 2020. For the six months ended June 30, 2021, our Same-Property Cash NOI increased 2.0%, or $4.7 million, to $244.4 million, compared to $239.7 million for the six months ended June 30, 2020.
•For additional information on our NOI and Same-Property Cash NOI, see “NOI, Cash NOI and Same-Property Cash NOI” below, which includes a reconciliation from net income and an explanation of why we present these non-GAAP financial measures.
Key Market Focused Strategy and Investments
Over the last decade, we have been an active investor in the medical office sector. This has enabled us to create a high quality portfolio focused on MOBs serving the future of healthcare with scale and significance in 20 to 25 key markets.
•Our investment strategy includes alignment with key healthcare systems, hospitals, and leading academic medical universities. We are the largest owner of on-campus or adjacent MOBs in the country, with approximately 17.1 million square feet of GLA, or 67%, of our portfolio located in these locations. The remaining 33% of our portfolio is located in core community outpatient locations where healthcare is increasingly being delivered.
•Over the past decade, our investments have been focused in our 20 to 25 key markets which we believe will outperform the broader U.S. markets from an economic and demographic perspective. As of June 30, 2021, approximately 95% of our portfolio’s GLA is located in the top 75 MSAs. Our key markets represent top MSAs with strong growth metrics in jobs, household income and population, as well as low unemployment and mature healthcare infrastructures. Many of our key markets are also supported by strong university systems.
•Our key market focus has enabled us to establish scale across 20 to 25 key markets and effectively utilize our asset management and leasing platform to deliver consistent same store growth and additional yield on investments, as well as cost effective service to tenants. As of June 30, 2021, we had approximately 1 million square feet of GLA in ten of our top 20 markets and approximately 0.5 million square feet of GLA in 17 of our top 20 markets.
•During the six months ended June 30, 2021, we closed on $52.5 million worth of medical office investments totaling approximately 157,000 square feet of GLA. In addition, we funded $48.5 million of investments in real estate notes receivable.
Internal Growth through Proactive In-House Property Management and Leasing
We believe we have one of the largest full-service operating platforms in the medical office sector that consists of our in-house asset management and leasing platform which allows us to better manage and service our existing portfolio. In each of these markets, we have established a strong in-house asset management and leasing platform that has allowed us to develop valuable relationships with health systems, physician practices, universities, and regional development firms that have led to investment and leasing opportunities for us. Our full-service operating platform has also enabled us to focus on generating cost efficiencies as we gain scale across individual markets and regions.
•As of June 30, 2021, our in-house asset management and leasing platform operated approximately 24.5 million square feet of GLA, or 97% of our total portfolio.
•As of June 30, 2021, our leased rate (which includes leases which have been executed, but which have not yet commenced) was 89.3% by GLA and our occupancy rate was 87.9% by GLA.
•We entered into new and renewal leases on approximately 0.6 million and 1.4 million square feet of GLA, or approximately 2.6% and 5.3% of the GLA of our total portfolio, during the three and six months ended June 30, 2021, respectively.
•During the three and six months ended June 30, 2021, tenant retention for the Same-Property portfolio was 80% and 73%, respectively. Tenant retention is defined as the sum of the total leased GLA of tenants that renewed a lease during the period over the total GLA of leases that renewed or expired during the period.
Financial Strategy and Balance Sheet Flexibility
•As of June 30, 2021, we had total leverage, measured by debt less cash and cash equivalents to total capitalization, of 33.5%. Total liquidity was approximately $1.3 billion, inclusive of $955.0 million available on our unsecured revolving credit facility, $277.5 million of forward equity agreements, $65.0 million of restricted cash for funds held in a 1031 exchange account, and cash and cash equivalents of $19.8 million as of June 30, 2021.
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•As of June 30, 2021, the weighted average remaining term of our debt portfolio was 6.6 years.
Critical Accounting Policies
The complete list of our critical accounting policies was disclosed in our 2020 Annual Report on Form 10-K. Additionally, in light of the COVID-19 pandemic, we believe we have included all relevant information when determining our management estimates and that these estimates are in line with our established policies. For further information on other significant accounting policies that impact us, see Note 2 - Summary of Significant Accounting Policies in the accompanying condensed consolidated financial statements.
Recently Issued or Adopted Accounting Pronouncements
For detail on recently issued accounting pronouncements see Note 2 - Summary of Significant Accounting Policies in the accompanying condensed consolidated financial statements.
Factors Which May Influence Results of Operations
The novel coronavirus, or COVID-19 pandemic, continues to impact economies and markets worldwide. All our buildings have remained in operation throughout the course of the pandemic. However, we addressed periodic requests from a number of our tenants about their ability to defer payment of a portion of their rents for a limited duration. We evaluated each such request on a case by case basis. In 2020, which is the period that we believe constituted the majority of our COVID-related deferral requests, we approved deferral plans totaling approximately $11.1 million, of which approximately $10.2 million of these deferrals have been repaid through June 30, 2021. There are no substantial outstanding requests for assistance from tenants. Payments of rent deferrals are generally expected to be repaid within the next 3 to 6 months. As of June 30, 2021, we have not granted unilateral rent forgiveness in connection with our deferral program, however, we may do so in the future if conditions and the specific economics warrant the use of such measures.
In addition, in 2020 we entered into certain lease modifications in the form of early renewals where we provide concessions in the form of free rent, which averaged three months at the inception of the lease, in exchange for additional term, which, averaged approximately three years. During the six months ended June 30, 2021, we have not entered into any material deferral arrangements or early renewal leases with substantive amounts of free rent or other forms of concession at the onset of the lease as a result of COVID-19. Although we did not experience significant disruptions from the COVID-19 pandemic during the six months ended June 30, 2021, should current and planned measures, including further development and delivery of vaccines and other measures intended to reduce or eliminate the spread of COVID-19, past and/or proposed economic stimulus, and other laws, acts and orders proposed or enacted by federal, state and local agencies or foreign governments, ultimately not be successful or limited in their efficacy, our business and the broader real estate industry may experience significant adverse consequences. These consequences include loss of revenues, increased expenses, increased costs of materials, difficulty in maintaining an active workforce, and constraints on our ability to secure capital or financing, among other factors.
Other than the above, we are not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally and the risk factors previously discussed in Part I, Item 1A - Risk Factors, in our 2020 Annual Report on Form 10-K, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the investment, management and operation of our properties.
Rental Income
The amount of rental income generated by our properties depends principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space and space that will become available from unscheduled lease terminations at the then applicable rental rates. Negative trends in one or more of these factors, including the ultimate collections of such rents, could adversely affect our rental income in future periods.
Investment ActivityCapital Funding
During the six months ended June 30, 2021, we had investments with an aggregate gross purchase price2022, capital funding included the following:
•$17.2 million toward the following development and redevelopment of $53.0properties:
◦Memphis, Tennessee redevelopment totaled $2.1 million;
◦Dallas, Texas redevelopments totaled $3.3 million;
◦Tacoma, Washington redevelopment totaled $5.4 million;
◦Nashville, Tennessee development totaled $5.6 million;
◦reposition properties capital and tenant improvements totaled $0.1 million; and
◦tenant improvement funding for previously completed projects totaled $0.7 million. During
•$14.6 million toward first generation tenant improvements and planned capital expenditures for acquisitions;
•$9.9 million toward second generation tenant improvements; and
•$7.2 million toward capital expenditures.
Financing Activities
Cash flows provided by financing activities for the six months ended June 30, 2020, we had investments2022 were approximately $188.2 million. Inflows from equity proceeds related to the Company's common stock issuances totaled $22.8 million, net of issuance costs incurred, and net borrowing totaled $262.3 million. Aggregate cash outflows totaled approximately $96.9 million primarily associated with dividends paid to common stockholders. See Notes 4 and 7 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
On August 6, 2021 and November 5, 2021, the Company entered into equity distribution agreements with 12 investment banks to allow for issuance and sale under its at-the-market equity offering program of up to an aggregate gross purchaseof $750.0 million of common stock. These agreements are no longer in effect following the closing of the Merger on July 20, 2022. The following table details the Company's forward at-the-market activity:
WEIGHTED AVERAGE SALE PRICE
per share		FORWARD SHARE CONTRACTSSHARES SETTLEDSHARES REMAINING TO BE SETTLEDNET PROCEEDS
in millions
Balance at December 31, 2021$— — — 727,400 $— 
1Q 2022$31.73 — 727,400 — $22.3 
2Q 2022$— — — — $— 
Debt Activity
On February 18, 2022, the Company repaid in full a mortgage note payable bearing interest at a rate of 4.70% that encumbered a 56,762 square foot property in California. The aggregate payoff price of $41.7$12.6 million consisted of outstanding principal of $11.0 million and a "make-whole" amount of approximately $1.6 million. The unamortized premium of $0.8 million and the unamortized cost on this note of $0.1 million were written off upon payoff.
On February 24, 2022, the Company repaid in full a mortgage note payable bearing interest at a rate of 6.17% that encumbered a 80,153 square foot property in Colorado, in conjunction with the disposition of the property. The aggregate payoff price of $6.4 million consisted of outstanding principal of $5.8 million and a "make-whole" amount of any future acquisitions or dispositions could have a significant impact on our resultsapproximately $0.6 million. The unamortized premium of operations in future periods.$0.1 million was written off upon payoff.


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Results of Operations
Comparison of the Three and Six Months Ended June 30, 2021 and 2020
As of June 30, 2021 and 2020, we owned and operated approximately 25.3 million and 24.9 million square feet of GLA, respectively, with a leased rate of 89.3% and 90.4%, respectively (including leases which have been executed, but which have not yet commenced), and an occupancy rate of 87.9% and 89.7%, respectively. All explanations are applicable to both HTA and HTALP unless otherwise noted.
Comparison of the three months ended June 30, 2021 and 2020, respectively, is set forth below (in thousands):
Three Months Ended June 30,
20212020Change% Change
Revenues:
Rental income$188,494 $178,670 $9,824 5.5 %
Interest and other operating income121 175 (54)(30.9)
Total revenues188,615 178,845 9,770 5.5 
Expenses:
Rental57,409 56,200 1,209 2.2 
General and administrative10,929 10,160 769 7.6 
Transaction66 32 34 106.3 
Depreciation and amortization74,977 74,927 50 0.1 
Interest expense23,133 24,277 (1,144)(4.7)
Impairment16,825 — 16,825 NM
Total expenses183,339 165,596 17,743 10.7 
Gain on sale of real estate, net32,753 — 32,753 NM
Income from unconsolidated joint venture406 379 27 7.1 
Other income304 97 207 NM
Net income$38,739 $13,725 $25,014 NM
NOI$131,206 $122,645 $8,561 7.0 %
Same-Property Cash NOI$122,529 $120,065 $2,464 2.1 %

Comparison of the six months ended June 30, 2021 and 2020, respectively, is set forth below (in thousands):
Six Months Ended June 30,
20212020Change% Change
Revenues:
Rental income$379,844 $364,201 $15,643 4.3 %
Interest and other operating income264 420 (156)(37.1)
Total revenues380,108 364,621 15,487 4.2 
Expenses:
Rental116,988 113,062 3,926 3.5 
General and administrative21,489 21,678 (189)(0.9)
Transaction162 172 (10)(5.8)
Depreciation and amortization151,251 152,592 (1,341)(0.9)
Interest expense46,119 48,149 (2,030)(4.2)
Impairment16,825 — 16,825 NM
Total expenses352,834 335,653 17,181 5.1 
Gain on sale of real estate, net32,753 1,991 30,762 NM
Income from unconsolidated joint venture798 801 (3)(0.4)
Other income307 173 134 77.5 
Net income$61,132 $31,933 $29,199 91.4 %
NOI$263,120 $251,559 $11,561 4.6 %
Same-Property Cash NOI$244,394 $239,685 $4,709 2.0 %
*NM- not meaningful.

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Rental Income
For the three and six months ended June 30, 2021 and 2020, respectively, rental income was comprised of the following (in thousands):
 Three Months Ended June 30,
 20212020Change% Change
Contractual rental income$179,781 $168,627 $11,154 6.6 %
Straight-line rent and amortization of above and (below) market leases5,127 6,019 (892)(14.8)
Other rental revenue3,586 4,024 (438)(10.9)
Total rental income$188,494 $178,670 $9,824 5.5 %
Six Months Ended June 30,
20212020Change% Change
Contractual rental income$362,293 $344,467 $17,826 5.2 %
Straight-line rent and amortization of above and (below) market leases10,374 12,112 (1,738)(14.3)
Other rental revenue7,177 7,622 (445)(5.8)
Total rental income$379,844 $364,201 $15,643 4.3 %
Contractual rental income, which includes expense reimbursements, increased $11.2 million and $17.8 million for the three and six months ended June 30, 2021, compared to the three and six months ended June 30, 2020. The increases were primarily due to additional contractual rental income of $4.8 million and $9.0 million from our 2020 and 2021 acquisitions, and contractual rent increases for the three and six months ended June 30, 2021, partially offset by $1.3 million and $1.7 million of reduced NOI as a result of the buildings we sold during 2020 and 2021 for the three and six months ended June 30, 2021, respectively. In addition, during the three and six months ended June 30, 2020, we recorded a non-recurring charge of $4.7 million of bad debt as a reduction in revenue.
Average starting and expiring base rents for new and renewal leases consisted of the following for the three and six months ended June 30, 2021 and 2020, respectively (in thousands, except in average base rents per square foot of GLA):
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
New and renewal leases:
Average starting base rents$24.86 $28.54 $24.80 $27.36 
Average expiring base rents21.86 27.30 22.45 26.44 
Square feet of GLA647 1,301 1,352 2,186 
Lease rates can vary across markets, and lease rates that are considered above or below current market rent may change over time. Leases that expired in 2021 had rents that we believed were at market rates. In general, leasing concessions vary depending on lease type, term, geography, and supply/demand dynamics.
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Tenant improvements, leasing commissions and tenant concessions for new and renewal leases consisted of the following for the three and six months ended June 30, 2021 and 2020, respectively (in per square foot of GLA):
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
New leases:
Tenant improvements$36.63 $60.95 $28.40 $45.64 
Leasing commissions4.31 4.33 3.91 3.21 
Tenant concessions7.00 2.71 6.85 4.20 
Renewal leases:
Tenant improvements$5.26 $6.19 $5.15 $6.21 
Leasing commissions2.06 3.10 2.13 3.31 
Tenant concessions0.16 3.64 0.16 1.74 
The average term for new and renewal leases executed consisted of2022, the following for the three and six months ended June 30, 2021 and 2020, respectively (in years):
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
New leases7.38.85.69.5
Renewal leases3.63.93.94.1
Rental Expenses
For the three months ended June 30, 2021 and 2020, rental expenses attributable to our properties were $57.4 million and $56.2 million, respectively. For the six months ended June 30, 2021 and 2020, rental expenses attributable to our properties were $117.0 million and $113.1 million, respectively. These increases in rental expenses were primarily due to $1.3 million and $2.7 million of additional rental expenses associated with our 2020 and 2021 acquisitions for the three and six months ended June 30, 2021, respectively.
General and Administrative Expenses
For the three months ended June 30, 2021 and 2020, general and administrative expenses were $10.9 million and $10.2 million, respectively. For the six months ended June 30, 2021 and 2020, general and administrative expenses were $21.5 million and $21.7 million, respectively. The increase in general and administrative expenses for the three months ended June 30, 2021 was primarily a result of increased costs for general corporate matters. For the six months ended June 30, 2021, general and administrative expenses were relatively consistent.
Depreciation and Amortization Expense
For the three months ended June 30, 2021 and 2020, depreciation and amortization expense was $75.0 million and $74.9 million, respectively. For the six months ended June 30, 2021 and 2020, depreciation and amortization expense was $151.3 million and $152.6 million, respectively. These increases were associated with our 2020 and 2021 acquisitions, partially offset by buildings we disposed of during 2020 and 2021.
Interest Expense
For the three months ended June 30, 2021 and 2020, interest expense was $23.1 million and $24.3 million, respectively. For the six months ended June 30, 2021 and 2020, interest expense was $46.1 million and $48.1 million, respectively. The decreases in interest expense is primarily due to lower average interest rates as compared to the same period in 2020.
To achieve our objectives, we borrow at both fixed and variable rates. From time to time, we also enter into derivative financial instruments, such asCompany has outstanding interest rate swaps,derivatives from Legacy HR totaling $175.0 million to hedge one-month LIBOR. The following details the amount and rate of each swap (dollars in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes.thousands):
Impairment
EFFECTIVE DATEAMOUNTWEIGHTED
AVERAGE RATE		EXPIRATION DATE
December 18, 2017$25,000 2.18 %December 16, 2022
February 1, 201850,000 2.46 %December 16, 2022
May 1, 201950,000 2.33 %May 1, 2026
June 3, 201950,000 2.13 %May 1, 2026
$175,000 2.29 %
For the six months ended June 30, 2021, we recorded impairment charges of $16.8 million on two properties related to: (i) a purchase option included in a lease agreement that was exercised subsequent to June 30, 2021 for a contractual sale price less than its carrying value; and (ii) a pending sales agreement executed subsequent to June 30, 2021 for a sale price less than its carrying value. We recorded no impairment charges during the six months ended June 30, 2020.Operating Activities
Gain on Sale of Real Estate, net
For the six months ended June 30, 2021, we realized a net gain of approximately $32.8 million on the sale of a 13 property portfolio with locations in Tennessee and Virginia. For the six months ended June 30, 2020, we realized a net gain of approximately $2.0 million on the sale of part of our interest in undeveloped land in Miami, Florida.
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Table of Contents
Net Income
For the three months ended June 30, 2021 and 2020, net income was $38.7 million and $13.7 million, respectively. For the six months ended June 30, 2021 and 2020, net income was $61.1 million and $31.9 million, respectively. The increases are primarily the result of gains associated with disposition of assets in non-key markets, as well as continued growth in our operations due to accretive acquisitions and improvedCash flows provided by operating efficiencies.
NOI and Same-Property Cash NOI
For the three months ended June 30, 2021 and 2020, NOI was $131.2 million and $122.6 million, respectively. For the six months ended June 30, 2021 and 2020, NOI was $263.1 million and $251.6 million, respectively. The increases in NOI was primarily due to additional NOIactivities increased from our 2020 and 2021 acquisitions of $4.1 million and $7.4 million for the three and six months ended June 30, 2021, respectively, partially offset by $0.7 million and $1.1 million of reduced NOI as a result of the buildings we sold during 2020 and 2021 for the three and six months ended June 30, 2021, respectively, and a reduction in straight-line rent from properties we owned for more than a year.
Same-Property Cash NOI increased 2.1% to $122.5 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Same-Property Cash NOI increased 2.0% to $244.4$105.6 million for the six months ended June 30, 2021 compared to $114.1 million for the six months ended June 30, 2020. 2022. 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.
New Accounting Pronouncements
See Note 1 to the Condensed Consolidated Financial Statements accompanying this report for information on new accounting standards.
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, 2021, below are some of the factors and trends that management believes may impact future operations of the Company.
Expiring Leases
The Company expects that approximately 15% to 20% of the leases will expire each year in the ordinary course of business. There are 540 leases totaling 1.9 million square feet that will expire during the remainder of 2022. Approximately 87% of the leases expiring in 2022 are 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 were primarily thein property taxes throughout its portfolio as a result of rent escalationsincreasing assessments and improvedtax 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 efficiencies, offsetexpense increases are mitigated in leases that have provisions for operating expense reimbursement. As of June 30, 2022, leases for 90% of the Company's multi-tenant leased square footage allow for some recovery of operating expenses, with 30% having modified gross lease structures and 60% having net lease structures.
General and Administrative Expense
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 RSUs. RSUs are granted at the beginning of the year with three-year forward-looking performance targets. With this change in the timing and structure of incentive awards, the expense associated with the 2021 backward-looking awards will overlap the expense associated with the January 2022 forward-looking awards. The new plan is expected to increase total general and administrative expense by $3.5 million in 2022.


25



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):
NUMBER OF PROPERTIESGROSS REAL ESTATE INVESTMENT AS OF JUNE 30, 2022
YEAR EXERCISABLEMOBINPATIENT
FAIR MARKET
VALUE METHOD 1
NON FAIR MARKET
VALUE METHOD 2
TOTAL
Current 3
2 1 $55,146 $— $55,146 
2023— — — — — 
2024— — — — — 
20254 — 48,298 19,459 67,757 
20261 — 21,109 — 21,109 
2027— — — — — 
20281 — 41,101 — 41,101 
20292 — 51,437 — 51,437 
2030— — — — — 
20313 — 84,570 — 84,570 
2032 and thereafter 4
7 — 255,071 — 255,071 
Total20 1 $556,732 $19,459 $576,191 
1The purchase option price includes a slight decreasefair market value component that is determined by an appraisal process.
2Includes properties with stated purchase prices or prices based on fixed capitalization rates.
3These purchase options have been exercisable for an average of 14.9 years.
4Includes the medical office building that is recorded in average occupancy.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 Normalized FFO
We compute FFO in accordance withper share are operating performance measures adopted by the current standards established by NAREIT.National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as netthe most commonly accepted and reported measure of a REIT’s operating performance equal to “net income or loss attributable to common stockholders/unitholders (computed in accordance with GAAP), excluding gains or losses(or losses) from sales of real estate property, and impairment write-downs of depreciable assets, plus depreciation and amortization, related to investments in real estate,impairment, and after adjustments for unconsolidated partnerships and joint ventures. Since FFO excludes depreciation and amortization unique to real estate, among other items, it provides a perspective not immediately apparent from net income or loss attributable to common stockholders/unitholders.
We also compute Normalized FFO, which excludes from FFO: (i) transaction expenses; (ii) gain or loss on extinguishment of debt; (iii) non-controlling income or loss from OP Units included in diluted shares (only applicable to the Company); and (iv) other normalizing adjustments, which include items that are unusual and infrequent in nature. Our methodology for calculating Normalized FFO may be different from the methods utilized by other REITs and, accordingly, may not be comparable to other REITs.
We present FFO and Normalized FFO because we consider them important supplemental measures of our operating performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. Historical cost accounting assumes that the value of real estate assets diminishes ratably over time. Since real estate values have historically risen or fallen based on market conditions, many industry investors have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. FFO and Normalized FFO should not be considered as alternatives to net income or loss attributable to common stockholders/unitholders (computed in accordance with GAAP) as indicators of our financial performance, nor are they indicative of cash available to fund cash needs. FFO and Normalized FFO should be reviewed in connection with other GAAP measurements.”
In addition to FFO, the amounts included in the calculation ofCompany presents Normalized FFO and FAD. Normalized FFO are generally the same for HTALPis presented by adding to FFO acquisition-related costs, acceleration of debt issuance costs, debt extinguishment costs and HTA, except for net income or loss attributableother Company-defined normalizing items to common stockholders/unitholders, non-controlling income or loss from OP Units included in diluted shares (only applicableevaluate operating performance. FAD is presented by adding to the Company) and the weighted average shares of our common stock or HTALP OP Units outstanding.Normalized FFO non-
36

26

The following is the reconciliation of HTA’s FFO and Normalized FFO to net income attributable to common stockholders for the three and six months ended June 30, 2021 and 2020, respectively (in thousands, except per share data):
 Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income attributable to common stockholders$38,011 $13,489 $60,041 $31,390 
Depreciation and amortization expense related to investments in real estate74,219 73,769 149,550 150,506 
Gain on sale of real estate, net(32,753)— (32,753)(1,991)
Impairment16,825 — 16,825 — 
Proportionate share of joint venture depreciation and amortization487 508 975 975 
FFO attributable to common stockholders$96,789 $87,766 $194,638 $180,880 
Transaction expenses66 32 162 172 
Non-controlling income from OP Units included in diluted shares728 236 1,091 543 
Other normalizing adjustments (1)
— 4,959 — 5,031 
Normalized FFO attributable to common stockholders$97,583 $92,993 $195,891 $186,626 
Net income attributable to common stockholders per diluted share$0.17 $0.06 $0.27 $0.14 
FFO adjustments per diluted share, net0.27 0.34 0.61 0.68 
FFO attributable to common stockholders per diluted share$0.44 $0.40 $0.88 $0.82 
Normalized FFO adjustments per diluted share, net0.00 0.02 0.00 0.02 
Normalized FFO attributable to common stockholders per diluted share$0.44 $0.42 $0.88 $0.84 
Weighted average diluted common shares outstanding222,326 222,088 222,297 221,228 
(1) For the three months ended June 30, 2020, other normalizing adjustments includes the following: non-recurring bad debt of $4,672 thousand; incremental hazard pay to facilities employees of $242 thousand; and incremental personal protective equipment of $45 thousand. For the six months ended June 30, 2020, other normalizing adjustments includes the following: non-recurring bad debt of $4,672 thousand; incremental hazard pay to facilities employees of $314 thousand; and incremental personal protective equipment of $45 thousand.
The following is the reconciliation of HTALP’s FFO and Normalized FFO to net income attributable to common unitholders for the three and six months ended June 30, 2021 and 2020, respectively (in thousands, except per unit data):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income attributable to common unitholders$38,739 $13,725 $61,132 $31,933 
Depreciation and amortization expense related to investments in real estate74,219 73,769 149,550 150,506 
Gain on sale of real estate, net(32,753)— (32,753)(1,991)
Impairment16,825 — 16,825 — 
Proportionate share of joint venture depreciation and amortization487 508 975 975 
FFO attributable to common unitholders$97,517 $88,002 $195,729 $181,423 
Transaction expenses66 32 162 172 
Other normalizing adjustments (1)
— 4,959 — 5,031 
Normalized FFO attributable to common unitholders$97,583 $92,993 $195,891 $186,626 
Net income attributable to common unitholders per diluted share$0.17 $0.06 $0.28 $0.14 
FFO adjustments per diluted OP Unit, net0.27 0.34 0.60 0.68 
FFO attributable to common unitholders per diluted OP Unit$0.44 $0.40 $0.88 $0.82 
Normalized FFO adjustments per diluted OP Unit, net0.00 0.02 0.00 0.02 
Normalized FFO attributable to common unitholders per diluted OP Unit$0.44 $0.42 $0.88 $0.84 
Weighted average diluted common OP Units outstanding222,326 222,088 222,297 221,228 
37


(1) For the three months ended June 30, 2020, other normalizing adjustments includes the following: non-recurring bad debt of $4,672 thousand; incremental hazard pay to facilities employees of $242 thousand; and incremental personal protective equipment of $45 thousand. For the six months ended June 30, 2020, other normalizing adjustments includes the following: non-recurring bad debt of $4,672 thousand; incremental hazard pay to facilities employees of $314 thousand; and incremental personal protective equipment of $45 thousand.
NOI, Cash NOI and Same-Property Cash NOI
NOI is a non-GAAP financial measure that is defined as net income or loss (computed in accordance with GAAP) before: (i) general and administrative expenses; (ii) transaction expenses; (iii)real estate depreciation and amortization, expense; (iv) impairment; (v) interest expense; (vi) gain or loss on salesnon-cash financing receivable amortization, loan origination cost amortization, deferred financing fees amortization, stock-based compensation expense and provision for bad debts, net; and subtracting maintenance capital expenditures, including second generation tenant improvements and leasing commissions paid and straight-line rent income, net of real estate; (vii) gain or loss on extinguishmentexpense. The Company's definition of debt; (viii) income or loss from unconsolidated joint venture; and (ix) other income or expense. We believe that NOI provides an accurate measure of the operating performance of our operating assets because NOI excludes certain items that are not associated with the management of our properties. Additionally, we believe that NOI is a widely accepted measure of comparative operating performance of REITs. However, our use of the term NOIthese terms may not be comparable to that of other REITsreal estate companies as they may have different methodologies for computing this amount. NOIthese amounts. FFO, Normalized FFO and FAD should not be considered as an alternative to net income or loss (computed in accordance with GAAP) as an indicator of ourthe Company's financial performance. NOIperformance 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 other GAAP measurements.financial measures.
Cash NOI is a non-GAAP financial measure which excludes from NOI: (i) straight-line rent adjustments; (ii) amortization of belowManagement believes FFO, Normalized FFO, FFO per common share, Normalized FFO per share and above market leases/leasehold interests and other GAAP adjustments; (iii) notes receivable interest income; and (iv) other normalizing adjustments. Contractual base rent, contractual rent increases, contractual rent concessions and changes in occupancy or lease rates upon commencement and expiration of leases are a primary driver of our revenue performance. We believe that Cash NOI, which removes the impact of straight-line rent adjustments, provides another measurementFAD ("Non-GAAP Measures") provide an understanding of the operating performance of our operating assets. Additionally, we believethe 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 Cash NOI is a widely accepted measurethe value of comparativereal 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 REITs. However, our usethese measures represent cash generated from operating activities determined in accordance with GAAP and are not necessarily indicative of the term Cash NOI may not be comparablecash available to that of other REITs as they may have different methodologies for computing this amount. Cash NOIfund cash needs. Further, these measures should not be considered as an alternative to net income or loss (computed in accordance with GAAP) as an indicator of our financial performance. Cash NOI should be reviewed in connection with other GAAP measurements.
To facilitate the comparison of Cash NOI between periods, we calculate comparable amounts for a subset of our owned and operational properties referred to as “Same-Property”. Same-Property Cash NOI excludes (i) properties which have not been owned and operated by us during the entire span of all periods presented and disposed properties, (ii) our share of unconsolidated joint ventures, (iii) development, redevelopment and land parcels, (iv) properties intended for disposition in the near term which have (a) been approved by the Board of Directors, (b) is actively marketed for sale, and (c) an offer has been received at prices we would transact and the sales process is ongoing, and (v) certain non-routine items. Same-Property Cash NOI should not be consideredCompany’s operating performance or as an alternative to cash flow from operating activities as a measure of liquidity. The table below reconciles net income or loss (computed in accordance with GAAP) as an indicator of our financial performance. Same-Property Cash NOI should be reviewed in connection with other GAAP measurements.
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Table of Contents
The following is the reconciliation of HTA’sto FFO, Normalized FFO and HTALP’s NOI, Cash NOI and Same-Property Cash NOI to net incomeFAD for the three and six months ended June 30, 20212022 and 2020, respectively (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Net income$38,739 $13,725 $61,132 $31,933 
General and administrative expenses10,929 10,160 21,489 21,678 
Transaction expenses66 32 162 172 
Depreciation and amortization expense74,977 74,927 151,251 152,592 
Impairment16,825 — 16,825 — 
Interest expense23,133 24,277 46,119 48,149 
Gain on sale of real estate, net(32,753)— (32,753)(1,991)
Income from unconsolidated joint venture(406)(379)(798)(801)
Other income(304)(97)(307)(173)
NOI$131,206 $122,645 $263,120 $251,559 
Straight-line rent adjustments, net(3,622)(3,717)(7,396)(6,962)
Amortization of (below) and above market leases/leasehold interests, net and other GAAP adjustments(400)(344)(875)(2,043)
Notes receivable interest income(3)(3)(9)(141)
Other normalizing adjustments (1)
— 4,959 — 5,031 
Cash NOI$127,181 $123,540 $254,840 $247,444 
Acquisitions not owned/operated for all periods presented and disposed properties Cash NOI(4,477)(2,176)(9,652)(4,906)
Redevelopment Cash NOI(282)(1,334)(1,066)(2,936)
Intended for sale Cash NOI107 35 272 83 
Same-Property Cash NOI (2)
$122,529 $120,065 $244,394 $239,685 
2021.
(1) For


27



THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
Amounts in thousands, except per share data2022202120222021
Net income$6,130 $23,096 $48,357 $47,118 
Gain on sales of real estate properties(8,496)(20,970)(53,280)(39,860)
Impairment of real estate properties— 5,078 (25)5,912 
Real estate depreciation and amortization57,334 51,199 112,991 102,510 
Proportionate share of unconsolidated joint ventures2,807 1,354 5,176 2,168 
FFO attributable to common stockholders$57,775 $59,757 $113,219 $117,848 
Acquisition and pursuit costs 1
1,352 670 2,655 1,414 
Merger-related costs 2
7,085 — 13,201 — 
Lease intangible amortization584 (6)893 (78)
Non-routine legal costs/forfeited earnest money received 3
140 — 231 (500)
Debt financing costs— 283 1,429 283 
Unconsolidated JV normalizing items 4
83 55 178 82 
Normalized FFO attributable to common stockholders$67,019 $60,759 $131,806 $119,049 
Non-real estate depreciation and amortization556 641 1,016 1,314 
Non-cash interest amortization 5
747 897 1,458 1,791 
Provision for bad debt, net16 57 159 (22)
Straight-line rent, net(1,327)(1,194)(2,536)(2,289)
Stock-based compensation3,356 2,627 7,055 5,647 
Unconsolidated JV non-cash items 6
(242)(354)(513)(711)
Normalized FFO adjusted for non-cash items$70,125 $63,433 $138,445 $124,779 
2nd generation TI(5,051)(4,748)(9,950)(9,937)
Leasing commissions paid(3,475)(3,804)(7,242)(4,997)
Capital additions(4,557)(6,077)(7,177)(8,096)
FAD$57,042 $48,804 $114,076 $101,749 
FFO per common share - diluted$0.38 $0.42 $0.75 $0.83 
Normalized FFO per common share - diluted$0.45 $0.43 $0.88 $0.84 
FFO weighted average common shares outstanding - diluted 7
150,545 142,914 150,203 141,323 
1Acquisition and pursuit costs include third-party and travel costs related to the three months ended June 30, 2020, other normalizing adjustmentspursuit of acquisitions and developments.
2Includes costs incurred related to the Merger.
3Non-routine legal costs include expenses related to two separate disputes; one with a contractor on a $59 million completed construction project and another with a tenant on a violation of use restrictions. Forfeited earnest money received related to a disposition that did not materialize.
4Includes the Company's proportionate share of acquisition and pursuit costs related to unconsolidated joint ventures.
5Includes the amortization of deferred financing costs, discounts and premiums, and non-cash financing receivable amortization.
6Includes the Company's proportionate share of straight-line rent, net related to unconsolidated joint ventures.
7The Company utilizes the treasury stock method which includes the following: non-recurring bad debtdilutive effect of $4,672 thousand, incremental hazard pay to facilities employeesnonvested share-based awards outstanding of $242 thousand,806,310 and incremental personal protective equipment of $45 thousand. For the six months ended June 30, 2020, other normalizing adjustments includes the following: non-recurring bad debt of $4,672 thousand, incremental hazard pay to facilities employees of $314 thousand, and incremental personal protective equipment of $45 thousand.
(2) Same-Property includes 432 and 425 buildings806,487, respectively for the three and six months ended June 30, 20212022.

Cash Net Operating Income ("NOI") and 2020, respectively.Same Store Cash NOI
LiquidityCash NOI and Capital ResourcesSame 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 and property lease guaranty income 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.
Our primary sources of cash include: (i) cash flow from operations; (ii) borrowings under our unsecured revolving credit facility; (iii) net proceeds from the issuances of debt and equity securities; and (iv) proceeds from our dispositions. During the next 12 months our primary uses of cashSame Store Cash NOI compares Cash NOI for stabilized properties. Stabilized properties are expected to include: (a) the funding of acquisitions of MOBs, development properties and other facilities that serve the healthcare industry; (b) capital expenditures; (c) the payment of operating expenses; (d) debt service payments, including principal payments; and (e) the payment of dividends to our stockholders. We anticipate cash flow from operations, restricted cash and reserve accounts and our unsecured revolving credit facility, if needed, will be sufficient to fund our operating expenses, capital expenditures and dividends to stockholders. Investments and maturing indebtedness may require funds from borrowings under our unsecured revolving credit facility, the issuance of debt and/or equity securities or proceeds from sales of real estate.
As of June 30, 2021, we had total liquidity of $1.3 billion, inclusive of $955.0 million available on our unsecured revolving credit facility, $277.5 million of unsettled forward equity agreements, $65.0 million of restricted cash for funds heldhave been included in a 1031 exchange account, and cash and cash equivalents of $19.8 million. We believe that we have sufficient liquidity and opportunities to obtain additional liquidity at our disposal to sustain operations for the foreseeable future.
Asduration of June 30, 2021, we had unencumbered assets with a gross book valuethe year-over-year comparison period presented. Accordingly, stabilized properties exclude properties that were recently acquired or disposed of, $8.0 billion. The unencumbered properties may be usedclassified as collateral to secure additional financings in future periodsheld for sale, properties undergoing redevelopment, and newly redeveloped or refinance our current debt as it becomes due. Our ability to raise funds from future debt and equity issuances is dependent on our investment grade credit ratings, general economic and market conditions, and our operating performance.developed properties.
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When we acquireThe Company utilizes the redevelopment classification for properties where management has approved a property, we prepare achange in strategic direction for such properties through the application of additional resources including an amount of capital plan that contemplatesexpenditures significantly above routine maintenance and capital improvement expenditures. These properties are described in additional detail in Note 6 to the estimated capital needs of that investment. In addition to operating expenses, capital needs may also include costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan for each investmentCondensed Consolidated Financial Statements included elsewhere in this report.
Any recently acquired property will be adjusted through ongoing, regular reviews of our portfolioincluded in the same store pool once the Company has owned the property for eight full quarters. Newly developed or as necessary to respond to unanticipated additional capital needs. Capital expendituresredeveloped properties will be included in the same store pool eight full quarters after substantial completion.
The following table reflects the Company's same store cash NOI for the remainderthree months ended June 30, 2022 and 2021.
NUMBER OF PROPERTIESGROSS INVESTMENT
at June 30, 2022		SAME STORE CASH NOI for the three months ended June 30,
Dollars in thousands20222021
Same store properties181 $3,891,809 $70,808 $68,574 

The following tables reconcile net income to same store NOI and the same store property metrics to the total owned real estate portfolio for the three months ended June 30, 2022 and 2021:

Reconciliation of the year will be primarily targeted towards planned maintenance activitiesSame Store Cash NOI
THREE MONTHS ENDED JUNE 30,
Dollars in thousands20222021
Net income$6,130 $23,096 
Other income (expense)7,479 (2,223)
General and administrative expense10,540 8,545 
Depreciation and amortization expense55,731 49,826 
Other expenses 1
11,034 2,840 
Straight-line rent revenue(1,327)(1,194)
Joint venture properties2,551 1,035 
Other revenue 2
(1,961)(2,075)
Cash NOI90,177 79,850 
Cash NOI not included in same store(19,369)(11,276)
Same store cash NOI$70,808 $68,574 
1Includes acquisition and other capital improvements that are eitherpursuit costs, merger-related costs, bad debt, 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.

Reconciliation of Same Store Properties
AS OF JUNE 30, 2022
Dollars in thousandsPROPERTY COUNT
GROSS INVESTMENT 1
SQUARE
FEET		OCCUPANCY
Same store properties181 $3,891,809 13,506,008 89.3 %
Acquisitions67 1,188,042 2,947,903 91.1 %
Development completions1 37,360 110,883 98.9 %
Redevelopments6 145,676 647,978 64.6 %
Total owned real estate properties255 $5,262,887 17,212,772 88.7 %
1Excludes construction in progress, land held for development, corporate property and financing lease right-of-use assets unrelated to an immediate need to preserve liquidity, or strategically necessary for revenue generation purposes. Currently these expenditures are estimated at approximately $20 million to $25 million per quarter. Although we cannot provide assurance that we will not exceed these estimated expenditure levels, we believe our liquidity of $1.3 billion allows us the flexibility to fund such capital expenditures as may be necessary or advisable.
If we experience lower occupancy levels, reduced rental rates, reduced revenuesimputed lease arrangement as a result of asset sales, or increased capital expenditures and leasing costsa sale leaseback transaction.


29



Results of Operations
Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021
The Company’s results of operations for the three months ended June 30, 2022 compared to historical levelsthe same period in 2021 were impacted by acquisitions, developments, dispositions, gains on sale, and capital markets transactions.
Revenues
Rental income increased $12.1 million, or 9.5%, for the three months ended June 30, 2022 compared to the prior year period. This increase is comprised of the following:
•Acquisitions in 2021 and 2022 contributed $13.8 million.
•Leasing activity, including contractual rent increases, contributed $3.1 million.
•Dispositions in 2021 and 2022 resulted in a decrease of $4.8 million.
Interest from financing receivables, net increased $1.4 million, or 283.7%, from the prior year period as a result of two financing receivables acquired during 2021.
Other operating income increased $0.3 million, or 12.8%, from the prior year period primarily as a result of variable parking and asset management fees.
Expenses
Property operating expenses increased $5.5 million, or 10.7%, for the three months ended June 30, 2022 compared to the prior year period primarily as a result of the following activity:
•Acquisitions in 2021 and 2022 resulted in an increase of $5.7 million.
•Increases in portfolio operating expenses as follows:
◦Utilities expense of $0.7 million;
◦Administrative, leasing commissions, and other legal expense of $0.5 million;
◦Janitorial expense of $0.3 million;
◦Compensation expense of $0.3 million;
◦Security expense of $0.1 million; and
◦Insurance expense of $0.1 million.
•Dispositions in 2021 and 2022 resulted in a decrease of $2.2 million.
General and administrative expenses increased approximately $2.0 million, or 23.3%, for the three months ended June 30, 2022 compared to the prior year period primarily as a result of the following activity:
•Incentive-based awards increases of $0.7 million.
•Compensation expense increases of $1.2 million, including $0.7 million of non-cash expense.
•Net increases, including professional fees and other administrative costs, of $0.1 million.
Merger-related costs totaled $7.1 million for the three months ended June 30, 2022. These costs, consisting primarily of legal, consulting, and banking services, were incurred in connection with the Merger with HTA.
Depreciation and amortization expense increased $5.9 million, or 11.9%, for the three months ended June 30, 2022 compared to the prior year period primarily as a result of the following activity:
•Acquisitions in 2021 and 2022 resulted in an increase of $7.1 million.
•Various building and tenant improvement expenditures resulted in an increase of $2.7 million.
•Dispositions in 2021 and 2022 resulted in a decrease of $1.5 million.
•Assets that became fully depreciated resulted in a decrease of $2.4 million.


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Other Income (Expense)
Gains on sale of real estate properties
In the second quarter of 2022, the Company recognized gains of approximately $8.5 million on the sale of two properties.
In the second quarter of 2021, the Company recognized gains of approximately $21.0 million primarily related to the sale of two properties.
Interest expense
Interest expense increased $2.3 million, or 17.2%, for the three months ended June 30, 2022 compared to the prior year period. The components of interest expense are as follows:
THREE MONTHS ENDED JUNE 30,CHANGE
Dollars in thousands20222021$%
Contractual interest$13,950 $12,148 $1,802 14.8 %
Net discount/premium accretion79 49 30 61.2 %
Deferred financing costs amortization708 704 4 0.6 %
Interest rate swap amortization42 42 — — %
Treasury hedge amortization107 107 — — %
Interest cost capitalization(108)(36)(72)200.0 %
Right-of-use assets financing amortization765 247 518 209.7 %
Total interest expense$15,543 $13,261 $2,282 17.2 %
Contractual interest expense increased $1.8 million, or 14.8%, for the three months ended June 30, 2022 compared to the prior year period primarily as a result of the following activity:
•The Company's Unsecured Term Loan due 2026, net of swaps, accounted for a decrease of approximately $0.1 million.
•The Company's Unsecured Term Loan due 2024, net of swaps, accounted for an increase of approximately $0.2 million.
•The Unsecured Credit Facility accounted for an increase of approximately $2.0 million due to competitive market conditionsan increased weighted average balance outstanding and an increase in the weighted average interest rate.
•Mortgage note repayments, net of assumptions, accounted for new and renewal leases, the effect would be a reductiondecrease of net cash provided by operating activities. If suchapproximately $0.3 million.
Impairment of Real Estate Properties
Impairment of real estate properties in 2021 totaling approximately $5.1 million was associated with a reductionredevelopment project in Nashville, Tennessee.
Equity loss from unconsolidated joint ventures
The Company recognized its proportionate share of net cash provided by operating activities is realized, we may have a cash flow deficit in subsequent periods. Our estimate of net cash available is based on various assumptions which are difficult to predict,losses from its unconsolidated joint ventures, including the levelsTIAA Joint Venture during the second quarter of our leasing activity and related leasing costs. Any changes in these assumptions could impact our financial2022. These losses are primarily attributable to non-cash depreciation expense. See Note 2 to the Condensed Consolidated Financial Statements accompanying this report for more details regarding the Company's unconsolidated joint ventures.
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
The Company’s results and our ability to fund working capital and unanticipated cash needs.
Cash Flows
The following is a summary of our cash flowsoperations for the six months ended June 30, 2021 and 2020, respectively (in thousands):
Six Months Ended June 30,
20212020Change
Cash, cash equivalents and restricted cash - beginning of period$118,765 $37,616 $81,149 
Net cash provided by operating activities190,927 182,183 8,744 
Net cash used in investing activities(118,348)(114,688)(3,660)
Net cash used in financing activities(101,006)(25,111)(75,895)
Cash, cash equivalents and restricted cash - end of period$90,338 $80,000 $10,338 
Net cash provided by operating activities increased2022 compared to the same period in 2021 primarily due to the impact of our 2020were impacted by acquisitions, developments, dispositions, gains on sale, and 2021 acquisitions and contractual rent increases, partially offset by our 2020 and 2021 dispositions. We anticipate cash flows from operating activities to increase as a result of the growth in our portfolio through new acquisitions and continued leasing activity in our existing portfolio.capital markets transactions.
ForRevenues
Rental income increased $22.2 million, or 8.7%, for the six months ended June 30, 2022 compared to the prior year period. This increase is comprised of the following:
•Acquisitions in 2021 and 2022 contributed $24.1 million.
•Leasing activity, including contractual rent increases, contributed $7.4 million.
•Dispositions in 2021 and 2022 resulted in a decrease of $9.3 million.


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Interest from financing receivables, net cash used in investing activities primarily related to advances on real estate notes receivable of $61.0increased $3.4 million, capital expenditures of $53.5 million, investments in real estate of $50.6 million, and development of real estate of $34.0 million, partially offset by proceedsor 662.2%, from the saleprior year period as the result of real estatetwo financing receivables acquired during 2021.
Other operating income increased $0.8 million, or 19.1%, from the prior year period primarily as a result of $65.3variable parking and asset management fees.
Expenses
Property operating expenses increased $10.8 million, and collection of real estate notes receivable of $15.4 million. Foror 10.4%, for the six months ended June 30, 2020, net cash used2022 compared to the prior year period primarily as a result of the following activity:
•Acquisitions in investing activities primarily related to capital expenditures2021 and 2022 resulted in an increase of $43.9$10.3 million.
•Increases in portfolio operating expenses as follows:
◦Utilities expense of $1.6 million;
◦Administrative, leasing commissions, and other legal expense of $1.1 million;
◦Janitorial expense of $0.6 million;
◦Property tax expense increase of $0.5 million;
◦Compensation expense of $0.4 million;
◦Maintenance and repair expense of $0.3 million;
◦Security expense of $0.3 million; and
◦Insurance expense of $0.2 million.
•Dispositions in 2021 and 2022 resulted in a decrease of $4.5 million.
General and administrative expenses increased approximately $4.5 million, investments in real estate of $41.3 million, development of real estate of $30.4 million, and funding of a real estate loan of $6.0 million, partially offset by proceeds from the sale of real estate of $6.4 million.
Foror 26.6%, for the six months ended June 30, 2021, net cash used in financing activities2022 compared to the prior year period primarily related to dividends paid to holdersas a result of our common stockthe following activity:
•Incentive-based awards increases of $140.0$1.5 million.
•Compensation expense increases of $2.6 million, including $1.4 million of non-cash expense.
•Net increases, including professional fees and the repurchase and cancellationother administrative costs, of common stock of $3.4$0.4 million.
Merger-related costs totaled $13.2 million partially offset by net borrowings under our revolving credit facility of $45.0 million. Forfor the six months ended June 30, 2020, net cash used2022. These costs consisted primarily of legal, consulting, and banking services incurred in financing activitiesconnection with the Merger with HTA.
Depreciation and amortization expense increased $9.9 million, or 9.9%, for the six months ended June 30, 2022 compared to the prior year period primarily related to dividends paid to holdersas a result of our common stockthe following activity:
•Acquisitions in 2021 and 2022 resulted in an increase of $137.1 million,$12.6 million.
•Various building and payments on our secured mortgage loanstenant improvement expenditures resulted in an increase of $96.2 million, partially offset by net borrowings on our unsecured credit facility$5.5 million.
•Dispositions in 2021 and 2022 resulted in a decrease of $164.0 million and proceeds from issuance$3.2 million.
•Assets that became fully depreciated resulted in a decrease of common stock of $50.0$5.0 million.
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DividendsOther Income (Expense)
The amountGains on sale of dividends we pay to our stockholders is determined by our Boardreal estate properties
Gains on the sale of Directors,real estate properties in their sole discretion, and is dependent on a number of factors, including funds available, our financial condition, capital expenditure requirements and annual dividend distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended. We have paid monthly or quarterly dividends since February 2007, and if our investments produce sufficient cash flow, we expect to continue to pay dividends to our stockholders. Because our cash available for dividend distributions in any year may be less than 90% of our taxable income for the year, we may obtain the necessary funds through borrowings, issuing new securities or selling assets to pay out enough of our taxable income to satisfy our dividend distribution requirement. Our organizational documents do not establish a limit on dividends that may constitute a return of capital for federal income tax purposes. The dividend we pay to our stockholders is equal2022 totaling approximately $53.3 million primarily related to the distributions received from HTALPsale of four real estate properties.
Gains on the sale of real estate properties in accordance with2021 totaling approximately $39.9 million primarily related to the termssale of the HTALP partnership agreement. It is our intention to continue to pay dividends. However, our Board of Directors may reduce our dividend rate and we cannot guarantee the timing and amount of dividends that we may pay in the future, if any.four real estate properties.
ForInterest expense
Interest expense increased $2.7 million, or 10.1%, for the six months ended June 30, 2021, we paid cash dividends2022 compared to the prior year period. The components of $140.0interest expense are as follows:
SIX MONTHS ENDED JUNE 30,CHANGE
Dollars in thousands20222021$%
Contractual interest$26,452 $24,389 $2,063 8.5 %
Net discount/premium accretion129 96 33 34.4 %
Deferred financing costs amortization1,419 1,402 17 1.2 %
Interest rate swap amortization84 84 — — %
Treasury hedge amortization213 213 — — %
Interest cost capitalization(145)(154)9 (5.8)%
Right-of-use assets financing amortization1,052 493 559 113.4 %
Total interest expense$29,204 $26,523 $2,681 10.1 %
Contractual interest expense increased $2.1 million, on our common stock. In July 2021or 8.5%, for the quarter ended June 30, 2021, we paid cash dividends on our common stock of $70.0 million.
Financing
We have historically maintained a low leveraged balance sheet and intend to continue to maintain this structure in the long term. However, our total leverage may fluctuate on a short-term basis as we execute our business strategy. As of June 30, 2021, our leverage ratio, measured by debt less cash and cash equivalents to total capitalization, was 33.5%.
As of June 30, 2021, we had debt outstanding of $3.1 billion and the weighted average interest rate therein was 2.86% per annum, inclusive of the impact of our cash flow hedges. The following is a summary of our unsecured and secured debt. See Note 8 - Debt in the accompanying condensed consolidated financial statements for a further discussion of our debt.
Unsecured Revolving Credit Facility
As of June 30, 2021, $955.0 million was available on our $1.0 billion unsecured revolving credit facility. Our unsecured revolving credit facility matures in June 2022.
Unsecured Term Loans
As of June 30, 2021, we had $500.0 million of unsecured term loans outstanding, comprised of $300.0 million under our Unsecured Credit Agreement maturing in 2023, and $200.0 million under our unsecured term loan maturing in 2024.
Unsecured Senior Notes
As of June 30, 2021, we had $2.55 billion of unsecured senior notes outstanding, comprised of $600.0 million of senior notes maturing in 2026, $500.0 million of senior notes maturing in 2027, $650.0 million of senior notes maturing in 2030 and $800.0 million of senior notes maturing in 2031.
Commitments and Contingencies
As of June 30, 2021, we had unfunded loan commitments totaling $20.6 million. See Note 10 - Commitments and Contingencies in the accompanying condensed consolidated financial statements for a further discussion of our commitments and contingencies.
Debt Service Requirements
We are required by the terms of our applicable loan agreements to meet certain financial covenants, such as minimum net worth and liquidity, and reporting requirements, among others. As of June 30, 2021, we believe that we were in compliance with all such covenants and we are not aware of any covenants that it is reasonably likely that we would not be able to meet in accordance with our loan agreements.
Off-Balance Sheet Arrangements
As of and during the six months ended June 30, 2021, we had no material off-balance sheet arrangements that have had or are reasonably likely2022 compared to havethe prior year period primarily as a current or future effect on our financial condition, revenues or expenses, resultsresult of operations, liquidity, capital expenditures or capital resources.the following activity:
Inflation•The Company's Unsecured Term Loan due 2026, net of swaps, accounted for a decrease of approximately $0.3 million.
We are exposed•The Company's Unsecured Term Loan due 2024, net of swaps, accounted for an increase of approximately $0.2 million.
•The Unsecured Credit Facility accounted for an increase of approximately $2.7 million due to inflation risk as income from future long-term leases is the primary source of our cash flows from operations. There are provisionsan increased weighted average balance outstanding and an increase in the majorityweighted average interest rate.
•Mortgage note repayments, net of our tenant leases that protect us from the impactassumptions, accounted for a decrease of normal inflation. These provisions include rent escalations, reimbursement billings for operating expense pass-through charges andapproximately $0.5 million.
Impairment of Real Estate Properties
Impairment of real estate taxproperties in 2021 totaling approximately $5.9 million was associated with the disposal of one property totaling $0.8 million and insurance reimbursements on$5.1 million associated with a per square foot allowance. However, due to the long-term nature of our leases, among other factors, the leases may not reset frequently enough to cover inflation.redevelopment project in Nashville, Tennessee.
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Table of Contents
Subsequent Events
The Board of Directors of the Company named Peter N. Foss as Interim President and Chief Executive Officer of the Company, effective as of August 2, 2021. Scott D. Peters resigned on July 29, 2021, effective August 2, 2021, as a director and Chairman of the Board, President and Chief Executive Officer of the Company. Effective August 2, 2021, the Lead Independent Director of the Board, W. Bradley Blair, II, was elected to be Chairman of the Board.Equity loss from unconsolidated joint ventures
The Company withrecognized its proportionate share of losses from its unconsolidated joint ventures, including the assistanceTIAA Joint Venture during the first quarter of outside legal counsel, and the Audit Committee, with the assistance of independent legal counsel, recently began an internal investigation into circumstances relating2022. These losses are primarily attributable to reports pursuantnon-cash depreciation expense. See Note 2 to the Company’s whistleblower policy. The investigation is in its early stages, no conclusions have been reached,Condensed Consolidated Financial Statements accompanying this report for more details regarding the Company's unconsolidated joint ventures.
Interest and other income (expense), net
In the first quarter of 2021, the Company cannot predict its duration or outcome. At this time, the Company does not believe that the matters that are the subject of the ongoing investigation will haverecorded approximately $0.5 million from a material adverse impact on the Company’s financial condition or results of operations.forfeited earnest money deposit.

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Item 3. Quantitative and Qualitative Disclosures Aboutabout Market Risk
There have beenThe 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, 2022, there were no material changes fromin the quantitative and qualitative disclosures about market risk previously disclosedrisks presented in our 2020the Company’s Annual Report on Form 10-K. On March 5, 2021,10-K for the United Kingdom Financial Conduct Authority (“FCA”), a regulatoryear ended December 31, 2021.


33


Table of financial services firms and financial markets in the United Kingdom, formally announced the cessation of LIBOR as of June 30, 2023. The Alternative Reference Rates Committee, a group of private-market participant convened by the U.S. Federal Reserve Board and the New York Federal Reserve, has recommended Secured Overnight Financing Rate (“SOFR”) as a more robust reference rate alternative to U.S. dollar LIBOR. Concurrent with the FCA’s announcement, the International Swaps and Derivatives Association (“ISDA”) determined that the announcement constituted an index cessation event and consequently the fallback spread adjustments were fixed and published, with the spread adjustment between U.S. dollar 1-Month LIBOR and SOFR at 0.11%. Borrowings under our Unsecured Credit Agreement and our $200 million unsecured term loan accrue interest at a rate equal to LIBOR, plus a margin, as specified in Note 8 - Debt. The unsecured revolving credit facility and the corresponding $300 million unsecured term loan under the Unsecured Credit Agreement mature on June 30, 2022 and February 1, 2023, respectively, and, thus, we do not believe the cessation of LIBOR will have an impact to these instruments. The $200 million unsecured term loan matures on January 15, 2024, however, the loan agreement includes provisions for an alternative rate of interest in the event LIBOR is no longer a widely recognized benchmark rate. As of June 30, 2021, the fallback rate under SOFR was 0.16%. Comparatively, the U.S. dollar 1-Month LIBOR rate as of June 30, 2021 was 0.10%. Consequently, we do not anticipate the transition from LIBOR will have a material impact on our financial statements or results of operations.Contents


Item 4. Controls and Procedures
Healthcare Trust of America, Inc.Disclosure Controls and Procedures
HTA’sThe Company’s management, is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including HTA’s Chief Executive Officer (as the principal executive officer) and Chief Financial Officer (as the principal financial officer and principal accounting officer), to allow timely decisions regarding required disclosures.
As of June 30, 2021, an evaluation was conducted by HTA under the supervision and with the participation of its management, including HTA’sthe Company’s Chief Executive Officer and Chief Financial Officer, ofhas evaluated the effectiveness of itsthe 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).Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based on this evaluation, HTA’sthe Company’s Chief Executive Officer and Chief Financial Officer eachhave concluded that, HTA’sas of the end of such period, the Company’s disclosure controls and procedures were effective as of June 30, 2021.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 were nohave not been any changes in ourthe Company’s internal control over financial reporting that occurred(as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2021to which this report relates that have materially affected, or are reasonably believed to be likely to materially affect, ourthe Company’s internal control over financial reporting. This determination was reached after careful evaluation of the effects COVID-19 has had on our operations.
August 5, 2021

Healthcare Trust of America Holdings, LP
HTALP’s management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including HTA’s Chief Executive Officer (as the principal executive officer) and Chief Financial Officer (as the principal financial officer and principal accounting officer), to allow timely decisions regarding required disclosures.
As of June 30, 2021, an evaluation was conducted by HTALP under the supervision and with the participation of its management, including HTA’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, HTA’s Chief Executive Officer and Chief Financial Officer, on behalf of HTA in its capacity as general partner of HTALP, each concluded that HTALP’s disclosure controls and procedures were effective as of June 30, 2021.
There were no changes in HTALP’s internal control over financial reporting that occurred during the quarter ended June 30, 2021 that have materially affected, or are reasonably believed to be likely to materially affect, HTALP’s internal control over financial reporting. This determination was reached after careful evaluation of the effects COVID-19 has had on our operations.
August 5, 2021
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are subjectThe Combined Company is, from time to claims andtime, involved in litigation arising in the ordinary course of business. We doThe Combined Company is not believeaware of any liability from any reasonably foreseeable disposition of such claims andpending or threatened litigation individually or inthat, if resolved against the aggregate,Combined Company, would have a material adverse effect on our accompanying condensedthe Combined Company’s consolidated financial statements.position, results of operations or cash flows.
Item 1A. Risk Factors
There have been no material changes fromIn addition to the other information set forth in this report and the risk factors previously discloseddiscussed below, an investor should carefully consider the factors discussed below and those discussed in Part I, “Item 1A. Risk Factors” in the Company's 2020Company’s Annual Report on Form 10-K filedfor the year ended December 31, 2021 and Legacy HTA's Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect the Combined Company’s business, financial condition or future results. The risks, as described below and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and Legacy HTA's Annual Report on Form 10-K for the year ended December 31, 2021, are not the only risks facing the Combined Company. Additional risks and uncertainties not currently known to management or that management currently deems immaterial also may materially, adversely affect the Combined Company’s business, financial condition, operating results or cash flows.
Risk Factors Relating to the Combined Company
Operational Risks
The Combined Company has incurred substantial expenses related to the Merger.
The Combined Company has incurred substantial expenses in connection with completing the Merger and and expects to incur substantial expenses integrating the business, operations, networks, systems, technologies, policies and procedures of the two companies, including severance costs. In addition, there are a large number of systems that must be integrated, including billing, management information, asset management, accounting and finance, payroll and benefits, lease administration and regulatory compliance. Although the Combined Company has assumed that a certain level of transaction and integration expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their integration expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and integration expenses associated with the SECMerger could, particularly in the near term, exceed the savings that the Combined Company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the businesses. As a result, the Legacy HR incurred expenses against its earnings before the completion of the Merger, and the Combined Company expects to incur additional expenses and charges following the Merger.


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The Combined Company may be unable to integrate the businesses of Legacy HR and Legacy HTA successfully and realize the anticipated synergies and related benefits of the Merger or do so within the anticipated timeframe.
The Merger involves the combination of two companies that operated as independent public companies. The Combined Company will be required to devote significant management attention and resources to integrating the business practices and operations of Legacy HR and Legacy HTA. Potential difficulties the Combined Company may encounter in the integration process include the following:
1.the inability to successfully combine the businesses of Legacy HR and Legacy HTA in a manner that permits the Combined Company to achieve the cost savings anticipated to result from the Merger, which would result in the anticipated benefits of the Merger not being realized in the timeframe currently anticipated or at all;
2.the complexities associated with managing the combined businesses out of different locations and integrating personnel from the two companies;
3.the additional complexities of combining two companies with different histories, cultures, markets and tenant bases;
4.the failure to retain key employees of the Combined Company;
5.potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Merger; and
6.performance shortfalls at one or both of the two companies as a result of the diversion of management's attention caused by completing the Merger and integrating the companies' operations.
For all these reasons, you should be aware that it is possible that the integration process could result in the distraction of the Combined Company's management, the disruption of the Combined Company's ongoing business or inconsistencies in the Combined Company's services, standards, controls, procedures and policies, any of which could adversely affect the ability of the Combined Company to maintain relationships with customers, vendors and employees or to achieve the anticipated benefits of the Merger, or could otherwise adversely affect the business and financial results of the Combined Company.
The Combined Company may be unable to retain key employees.
The success of the Combined Company after the Merger will depend in part upon its ability to retain key employees. Key employees may depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the Combined Company following the Merger. Accordingly, no assurance can be given that the Combined Company will be able to retain key employees.
The future results of the Combined Company will suffer if the Combined Company does not effectively manage its expanded operations following the Merger.
Following the Merger, the Combined Company may continue to expand its operations through additional acquisitions and other strategic transactions, some of which involve complex challenges. The future success of the Combined Company will depend, in part, upon the ability of the Combined Company to manage its expansion opportunities, which pose substantial challenges for the Combined Company to integrate new operations into its existing business in an efficient and timely manner, and upon its ability to successfully monitor its operations, costs, regulatory compliance and service quality, and to maintain other necessary internal controls. The Combined Company cannot assure you that its expansion or acquisition opportunities will be successful, or that the Combined Company will realize its expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.
The trading price of shares of common stock of the Combined Company may be affected by factors different from those that affected the price of shares of Legacy HR's common stock or Legacy HTA’s common stock before the Merger.
The results of operations of the Combined Company, as well as the trading price of the shares of common stock of the Combined Company after the Merger, may be affected by factors different from those that affected Legacy HR's or Legacy HTA's results of operations and the trading prices of their respective shares of common stock. These factors include:
1.a greater number of shares of common stock of the Combined Company outstanding;
2.different stockholders;


35



3.different businesses; and
4.different assets and capitalizations.
In addition, the Combined Company may take actions in the future—such as a share split, reverse share split, stock repurchases, or reclassification—that could affect the trading price of its shares of common stock.
Accordingly, the historical trading prices and financial results of Legacy HR and Legacy HTA may not be indicative of these matters for the Combined Company after the Merger.
The Combined Company cannot assure you that it will be able to continue paying dividends at or above the rates paid by Legacy HR and Legacy HTA.
The stockholders of the Combined Company may not receive dividends at the same rate they received dividends as stockholders of the Combined Company and stockholders of HTA following the Merger for various reasons, including the following:
1.the Combined Company may not have enough cash to pay such dividends due to changes in the Combined Company's cash requirements, capital spending plans, cash flow or financial position;
2.decisions on February 24, 2021.whether, when and in which amounts to make any future distributions will remain at all times entirely at the discretion of the board of directors of the Combined Company, which reserves the right to change the Combined Company's current dividend practices at any time and for any reason;
3.the Combined Company may desire to retain cash to maintain or improve its credit ratings; and
4.the amount of dividends that the Combined Company's subsidiaries may distribute to the Combined Company may be subject to restrictions imposed by state law, restrictions that may be imposed by state regulators, and restrictions imposed by the terms of any current or future indebtedness that these subsidiaries may incur.
Stockholders of the Combined Company will have no contractual or other legal right to dividends that have not been authorized by the board of directors of the Combined Company.
Regulatory and Legal Risks
Counterparties to certain agreements with Legacy HR or Legacy HTA may exercise contractual rights under such agreements in connection with the Merger.
Legacy HR and Legacy HTA are each party to certain agreements that give the counterparties certain rights in connection with a qualifying change in control, including in some cases the right to terminate the agreement. The Merger may constitute a change in control under some of these agreements, and therefore the counterparties could exercise any rights they may have regarding termination, repurchase, recourse against the Combined Company for obligations of its subsidiaries, acceleration of payment obligations or otherwise. In addition, counterparties may seek modifications of the terms of agreements as a condition to granting a waiver or consent. If such counterparties exercise any such contractual rights, this may adversely impact the Combined Company.
Joint venture investments, including those resulting from the anticipated contribution of certain of Legacy HTA properties into one or more joint ventures, could be adversely affected by the Combined Company's lack of sole decision-making authority, its reliance on its joint venture partners' financial condition or disputes between any joint venture partner and the Combined Company.
The Combined Company has joint venture investments that constitute a portion of the Combined Company’s assets. In addition, it is anticipated that certain assets of Legacy HTA will be contributed to one or more joint ventures to be formed in the near future. The Combined Company is expected to continue to have such arrangements, and may enter into additional joint ventures, following the completion of the Merger. The Combined Company will not be in a position to exercise sole decision-making authority regarding the partnership, joint venture or other entity. Investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third-party not involved. For example, joint venture partners may have economic or other business interests or goals that are inconsistent with the business interests or goals of the Combined Company, they could be in a position to take actions contrary to the policies or objectives of the Combined Company, and they may have competing interests that could create conflict of interest issues. Such investments may also have the potential risk of impasses on decisions, because neither the Combined Company nor the joint venture partner would have full control over the partnership or joint venture. In addition, joint venture partners of the Combined Company may have consent


36



rights, rights to buy or sell joint venture interests, or other rights under certain agreements, which may have been implicated as a result of the Merger. Disputes between the Combined Company and joint venture partners may result in litigation or arbitration. In addition, if joint venture partners fail to fund their share of required capital contributions due to insolvency or for other reasons, the joint venture investments, including properties owned by the joint ventures, could be subject to additional risk.
REIT Risks
The Combined Company succeeds to, and may incur, adverse tax consequences if Legacy HR or Legacy HTA failed to qualify as a REIT.
Each of Legacy HR and Legacy HTA believes that it has been organized and has operated in a manner that enabled it to qualify as a REIT through the closing date of the Merger, and in the case of the Combined Company, following the closing date of the Merger. The Combined Company has not requested, and has no plans to request, a ruling from the Internal Revenue Service that it qualifies as a REIT. If the Combined Company has failed or fails to qualify as a REIT, it may incur significant tax liabilities.
Other Risks

The Combined Company has a substantial amount of indebtedness and may need to incur more in the future.
The Combined Company has substantial indebtedness, and in connection with executing the Combined Company's business strategies following the Merger, the Combined Company expects to continue to evaluate the possibility of acquiring additional properties and making strategic investments, and the Combined Company may elect to finance these endeavors by incurring additional indebtedness. Its substantial indebtedness could have material adverse consequences for the Combined Company, including (a) reducing the Combined Company's credit ratings and thereby raising its borrowing costs, (b) hindering the Combined Company's ability to adjust to changing market, industry or economic conditions, (c) limiting the Combined Company's ability to access the capital markets to refinance maturing debt or to fund acquisitions or emerging businesses, (d) limiting the amount of free cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses, (e) making the Combined Company more vulnerable to economic or industry downturns, including interest rate increases, and (f) placing the Combined Company at a competitive disadvantage compared to less leveraged competitors.
Additionally, the agreements that govern the terms of its indebtedness contain a number of restrictive covenants (including, without limitation, financial maintenance covenants) that impose significant operating and financial restrictions on the Combined Company and may limit its ability to engage in acts that may be in its long-term best interest. Moreover, the Combined Company's ability to satisfy any financial maintenance covenants may be affected by events beyond its control and, as a result, it cannot provide assurance that it will be able to satisfy any such covenants.
A breach of the covenants under the agreements that govern the terms of any of the Combined Company's indebtedness could result in an event of default under the applicable indebtedness. Such a default may allow the applicable creditors to accelerate the related debt and/or terminate any related commitments to extend further credit and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In the event debtholders accelerate the repayment of the Combined Company's indebtedness, the Combined Company may not have sufficient resources to repay such indebtedness.
Moreover, to respond to competitive challenges, the Combined Company may be required to raise substantial additional capital to execute its business strategy. The Combined Company's ability to arrange additional financing will depend on, among other factors, the Combined Company's financial position and performance, as well as prevailing market conditions and other factors beyond the Combined Company's control. If the Combined Company is able to obtain additional financing, the Combined Company's credit ratings could be further adversely affected, which could further raise the Combined Company's borrowing costs and further limit its future access to capital and its ability to satisfy its obligations under its indebtedness.
Pandemics and other health concerns, including the ongoing COVID-19 pandemic, and the measures intended to prevent their spread, could have a material adverse effect on the Combined Company’s business, results of operations, cash flows and financial condition.
Pandemics, including the ongoing COVID-19 pandemic and those caused by possible new strains or mutations of the SARS-CoV-2 virus, as well as both future widespread and localized outbreaks of infectious diseases and other health


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concerns, and the measures taken to prevent the spread or lessen the impact, could cause a material disruption to the Combined Company’s industry or deteriorate the economy as a whole. The impacts of such events could be severe and far-reaching, and may impact the Combined Company’s operations in several ways. Such operational impacts include, but are not limited to, the following: (a) tenants could experience deteriorating financial conditions and be unable or unwilling to pay rent on time and in full; (b) the Combined Company may have to restructure tenants' obligations and may not be able to do so on terms that are favorable to it; (c) inquiries and tours at the Combined Company’s properties could decrease; (d) move-ins and new tenanting efforts, and re-letting efforts could slow or stop altogether; (e) move-outs and potential early termination of leases thereunder could increase; (f) operating expenses, including the costs of certain essential services or supplies, including payments to third-party contractors, service providers, and employees essential to ensure continuity in the Combined Company’s building operations may increase; and (g) costs of development, including expenditures for materials utilized in construction and labor essential to complete existing developments in progress may increase substantially.
Further, disruption in the real estate markets may restrict the Combined Company’s ability to deploy capital for new investments, or limit its ability to make new investments on terms that are favorable to the Combined Company.
Additionally, these types of events could cause severe economic, market and other disruptions worldwide which could stretch to bank lending, capital and other financial markets. If these markets are affected, future access to capital and other sources of funding could be constrained which could adversely affect the availability and terms of the Combined Company’s future borrowings, its ability to refinance existing debt, its ability to draw on its revolving credit facility, and its ability to raise equity financing on terms that are favorable to the Combined Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
PurchasesAuthorized Repurchases of Equity Securities by the Issuer and Affiliated Purchasers
DuringOn August 2, 2022, the three months ended June 30, 2021, we repurchasedCombined Company’s Board of Directors authorized the repurchase of up to $500.0 million of outstanding shares of ourthe Combined Company’s common stock as follows:
Period
Total Number of
Shares Purchased (1) (2)
Average Price
Paid per Share (1) (2)
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plan or Program		Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
April 1, 2021 to April 30, 20213,969 $28.12 — — 
May 1, 2021 to May 31, 2021465 27.41 — — 
June 1, 2021 to June 30, 2021148 27.78 — — 
(1) Purchases represent shares of common stock withheld by us to satisfy withholding obligations on the vesting of restricted shares. The price paid per share was the then closing price of our common stock on the NYSE.
(2) For each share of common stock redeemed by HTA, HTALP redeems a corresponding number of OP Units in the HTALP operating partnership. Therefore, the OP Units in the HTALP operating partnership repurchased by HTALP are the same as the shares of common stock repurchased by HTA as shown above.

either in the open market or through privately negotiated transactions, subject to market conditions, regulatory constraints, and other customary conditions. The Combined Company is not obligated under this authorization to repurchase any specific number of shares. This authorization supersedes all previous stock repurchase authorizations. As of the date of this report, the Combined Company has not repurchased any shares of its common stock under this authorization.
Item 6. Exhibits
The exhibits listed on the Exhibit Index are included, and incorporated by reference, in this Quarterly Report.

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Table of Contents
EXHIBIT INDEX
Pursuant to Item 601(a)(2) of Regulation S-K, this Exhibit Index immediately precedes the exhibits.
The following exhibits are included, or incorporated by reference, in this Quarterly Report for the quarter ended June 30, 2021 (and are numbered in accordance with Item 601 of Regulation S-K).
1.1EXHIBITDESCRIPTION
Exhibit 2.1
Equity Distribution Agreement and Plan of Merger, dated March 5, 2021,as of February 28, 2022, by and among Healthcare Realty Trust Incorporated (now known as HRTI, LLC), Healthcare Trust of America, Inc. (now known as Healthcare Realty Trust Incorporated), Healthcare Trust of America Holdings, LP, on the one hand,L.P. (now known as Healthcare Realty Holdings, L.P.), and J.P. Morgan Securities LLC and JPMorgan Chase Bank, National Association, on the other hand (included as Exhibit 1.1 to our Current Report on Form 8-K filed on March 8, 2021 and incorporated herein by reference).HR Acquisition 2, LLC.1
1.2Exhibit 3.1
Equity Distribution Agreement, dated March 5, 2021, byFifth Articles of Amendment and among Healthcare TrustRestatement of America, Inc., Healthcare Trust of America Holdings, LP, on the one hand, and BMO Capital Markets Corp. and Bank of Montreal, on the other hand (included as Exhibit 1.2 to our Current Report on Form 8-K filed on March 8, 2021 and incorporated herein by reference).
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12Exhibit 3.2
Master Forward Confirmation, dated March 5, 2021, betweenArticles of Amendment of Healthcare Trust of America, Inc. and Bank of Montreal (included(now known as Exhibit 1.12 to our Current Report on Form 8-K filed on March 8, 2021 and incorporated herein by reference)Healthcare Realty Trust Incorporated), effective December 15, 2014.4
1.13Exhibit 3.3
Master Forward Confirmation, dated March 5, 2021, betweenArticles of Amendment of Healthcare Trust of America, Inc. and MUFG Securities EMEA plc. (included(now known as Exhibit 1.13 to our Current Report on Form 8-K filed on March 8, 2021 and incorporated herein by reference)Healthcare Realty Trust Incorporated).2
1.14Exhibit 3.4
Master Forward Confirmation, dated March 5, 2021, between Fourth Amended and Restated Bylaws of Healthcare Trust of America, Inc. and Wells Fargo Bank, National Association (included(now known as Exhibit 1.14 to our Current Report on Form 8-K filed on March 8, 2021 and incorporated herein by reference)Healthcare Realty Trust Incorporated), as amended.5
1.15Exhibit 4.1
Master Forward Confirmation,Indenture, dated March 5, 2021, between as of July 22, 2022, by and amongHealthcare Realty Holdings, L.P., Healthcare Realty Trust of America, Inc.Incorporated and U.S.Bank of America, N.A. (included as Exhibit 1.15 to our Current Report on Form 8-K filed on March 8, 2021 and incorporated herein by reference) Trust Company, National Association.2
1.16Exhibit 4.2
Master Forward Confirmation,Supplemental Indenture No. 1, dated March 5, 2021, betweenas of July 22, 2022, by and among Healthcare Realty Holdings, L.P., Healthcare Realty Trust Incorporated, and U.S. Bank Trust Company, National Association.2
Exhibit 4.3
Supplemental Indenture No. 2, dated as of America, Inc.July 22, 2022, by and Jefferies LLC (includedamong Healthcare Realty Holdings, L.P., Healthcare Realty Trust Incorporated, and U.S. Bank Trust Company, National Association.2
Exhibit 4.4
Supplemental Indenture No. 3, dated as of July 22, 2022, by and among Healthcare Realty Holdings, L.P., Healthcare Realty Trust Incorporated, and U.S. Bank Trust Company, National Association.2
Exhibit 1.16 to our Current Report on Form 8-K filed on March 8, 20214.5
Supplemental Indenture No. 4, dated as of July 22, 2022, by and incorporated herein by reference)among Healthcare Realty Holdings, L.P., Healthcare Realty Trust Incorporated, and U.S. Bank Trust Company, National Association.2
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Table of Contents

1.17Exhibit 4.6
Master Forward Confirmation,Tenth Supplemental Indenture, dated March 5, 2021,as of July 22, 2022, by and between HRTI, LLC and Truist Bank.2
Exhibit 4.7
3.875% Senior Notes due 2025.2
Exhibit 4.8
3.625% Senior Notes due 2028 (No. 2028-1).2
Exhibit 4.9
3.625% Senior Notes due 2028 (No. 2028-2).2
Exhibit 4.10
2.400% Senior Notes due 2030 (No. 2030-1).2
Exhibit 4.11
2.400% Senior Notes due 2030 (No. 2030-2).2
Exhibit 4.12
2.050% Senior Notes due 2031.2
Exhibit 4.13
Guarantee of 2025 Note.2
Exhibit 4.15
Guarantee of 2028 Note.2
Exhibit 4.16
Guarantee of 2030 Note.2
Exhibit 4.17
Guarantee of 2031 Note.2
Exhibit 10.1
Exhibit 10.2
Fourth Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 20, 2022, by and among Healthcare Trust of America Holdings, LP (now known as Healthcare Realty Holdings, L.P.), Healthcare Trust of America, Inc. (now known as Healthcare Realty Trust Incorporated), the lenders named therein, and Morgan Stanley & Co. LLC (included as Exhibit 1.17 to our Current Report on Form 8-K filed on March 8, 2021 and incorporated herein by reference)Wells Fargo Bank, National Association.2
1.18
Master Forward Confirmation, dated March 5, 2021, between Healthcare Trust of America, Inc. and The Bank of Nova Scotia (included as Exhibit 1.18 to our Current Report on Form 8-K filed on March 8, 2021 and incorporated herein by reference).31.1
5.1
10.1†
23.1
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 for Healthcare Trust of America, Inc.(filed herewith)
31.2*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 for Healthcare Trust of America, Inc.(filed herewith)
31.3*Exhibit 32
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
31.4*
32.1**
32.2**
32.3**
32.4**
101.INS*Exhibit 101.INSThe instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL Instance Document.document.
101.SCH*Exhibit 101.SCHInline XBRL Taxonomy Extension Schema Document.Document (furnished electronically herewith)
101.CAL*Exhibit 101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.Document (furnished electronically herewith)
101.DEF*Exhibit 101.LABInline XBRL Taxonomy Extension Labels Linkbase Document (furnished electronically herewith)
Exhibit 101.DEFXBRL Taxonomy Extension Definition Linkbase Document.Document (furnished electronically herewith)
101.LAB*Exhibit 101.PREInline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*Filed herewith.
**Furnished herewith.
†Compensatory plan or arrangement.Document (furnished electronically herewith)

1Filed as an exhibit to the Company's Current Report on Form 8-K filed February 28, 2022 and hereby incorporated by reference.
2Filed as an exhibit to the Company's Current Report on Form 8-K filed July 26, 2022 and hereby incorporated by reference.
3Filed as an exhibit to the Company's Current Report on Form 8-K filed March 11, 2014 and hereby incorporated by reference.
4Filed as an exhibit to the Company's Current Report on Form 8-K filed December 16, 2014 and hereby incorporated by reference.
5Filed as an exhibit to the Company's Current Report on Form 8-K filed April 29, 2020 and hereby incorporated by reference.
6Filed as an exhibit to the Company's Current Report on Form 8-K filed May 16, 2022 and hereby incorporated by reference.
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SIGNATURESSIGNATURE
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 Trust of America, Inc.HEALTHCARE REALTY TRUST INCORPORATED
By:/s/ Peter N. FossInterim President and Chief Executive Officer
Peter N. Foss(Principal Executive Officer)
Date:August 5, 2021
By:/s/ Robert A. MilliganChief Financial Officer
 Robert A. Milligan(Principal Financial Officer and Principal Accounting Officer)
Date:August 5, 2021
Healthcare Trust of America Holdings, LPBy:/s/ J. CHRISTOPHER DOUGLAS
By:J. Christopher DouglasHealthcare Trust of America, Inc.,
its General Partner
By:/s/ Peter N. FossInterimExecutive Vice President and Chief Executive Officer
Peter N. Foss(Principal Executive Officer)
Date:August 5, 2021
By:/s/ Robert A. MilliganChief Financial Officer
 Robert A. Milligan(Principal Financial Officer and Principal Accounting Officer)
Date:August 5, 20219, 2022


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