Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-35568 | |
Entity Registrant Name | HEALTHCARE REALTY TRUST INCORPORATED | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 20-4738467 | |
Entity Address, Address Line One | 3310 West End Avenue | |
Entity Address, Address Line Two | Suite 700 | |
Entity Address, City or Town | Nashville | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37203 | |
City Area Code | 615 | |
Local Phone Number | 269-8175 | |
Title of 12(b) Security | Class A Common Stock, $0.01 par value per share | |
Trading Symbol | HR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 380,816,937 | |
Entity Central Index Key | 0001360604 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Real estate properties | ||
Land | $ 1,412,805 | $ 1,439,798 |
Buildings and improvements | 11,196,297 | 11,332,037 |
Lease intangibles | 929,008 | 959,998 |
Personal property | 11,945 | 11,907 |
Investment in financing receivable, net | 120,692 | 120,236 |
Financing lease right-of-use assets | 83,420 | 83,824 |
Construction in progress | 42,615 | 35,560 |
Land held for development | 69,575 | 74,265 |
Total real estate properties | 13,866,357 | 14,057,625 |
Less accumulated depreciation and amortization | (1,810,093) | (1,645,271) |
Total real estate properties, net | 12,056,264 | 12,412,354 |
Cash and cash equivalents | 49,941 | 60,961 |
Assets held for sale, net | 3,579 | 18,893 |
Operating lease right-of-use assets | 336,112 | 336,983 |
Investments in unconsolidated joint ventures | 327,746 | 327,248 |
Goodwill | 260,822 | 223,202 |
Other assets, net | 534,420 | 469,990 |
Total assets | 13,568,884 | 13,849,631 |
Liabilities | ||
Notes and bonds payable | 5,361,699 | 5,351,827 |
Accounts payable and accrued liabilities | 155,210 | 244,033 |
Liabilities of assets held for sale | 277 | 437 |
Operating lease liabilities | 279,637 | 279,895 |
Financing lease liabilities | 73,193 | 72,939 |
Other liabilities | 232,029 | 218,668 |
Total liabilities | 6,102,045 | 6,167,799 |
Commitments and contingencies | ||
Redeemable non-controlling interests | 2,000 | 2,014 |
Stockholders' equity | ||
Preferred stock, $.01 par value per share; 200,000 shares authorized; none issued and outstanding | 0 | 0 |
Class A Common stock, $.01 par value per share; 1,000,000 shares authorized; 380,816 and 380,590 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 3,808 | 3,806 |
Additional paid-in capital | 9,591,194 | 9,587,637 |
Accumulated other comprehensive (loss) income | (8,554) | 2,140 |
Cumulative net income attributable to common stockholders | 1,219,930 | 1,307,055 |
Cumulative dividends | (3,447,750) | (3,329,562) |
Total stockholders' equity | 7,358,628 | 7,571,076 |
Non-controlling interest | 106,211 | 108,742 |
Total equity | 7,464,839 | 7,679,818 |
Total liabilities and equity | $ 13,568,884 | $ 13,849,631 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (shares) | 200,000,000 | 200,000,000 |
Preferred stock, issued (shares) | 0 | 0 |
Preferred stock, outstanding (shares) | 0 | 0 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (shares) | 380,816,000 | 380,590,000 |
Common stock, outstanding (shares) | 380,816,000 | 380,590,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | ||
Rental income | $ 324,093 | $ 138,489 |
Interest income | 4,214 | 1,930 |
Other operating | 4,618 | 2,475 |
Revenues | 332,925 | 142,894 |
Expenses | ||
Property operating | 122,040 | 57,464 |
General and administrative | 14,935 | 11,036 |
Acquisition and pursuit costs | 287 | 1,303 |
Merger-related costs | 4,855 | 6,116 |
Depreciation and amortization | 184,479 | 54,041 |
Expenses | 326,596 | 129,960 |
Other income (expense) | ||
Gain on sales of real estate properties | 1,007 | 44,784 |
Interest expense | (63,759) | (13,661) |
Loss on extinguishment of debt | 0 | (1,429) |
Impairment of real estate properties and credit loss reserves | (31,422) | 25 |
Equity loss from unconsolidated joint ventures | (780) | (345) |
Interest and other income (expense), net | 547 | (81) |
Total other income (expense) | (94,407) | 29,293 |
Net (loss) income | (88,078) | 42,227 |
Net loss attributable to non-controlling interests | 953 | 0 |
Net (loss) income attributable to common stockholders | $ (87,125) | $ 42,227 |
Basic earnings per common share (in dollars per share) | $ (0.23) | $ 0.28 |
Diluted earnings per common share (in dollars per share) | $ (0.23) | $ 0.28 |
Weighted average common shares outstanding - basic | 378,840,420 | 148,963,030 |
Weighted average common shares outstanding - diluted | 378,840,420 | 149,051,264 |
Revenue, Product and Service [Extensible List] | Service [Member] | Service [Member] |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net (loss) income | $ (88,078) | $ 42,227 |
Interest rate swaps | ||
Reclassification adjustments for (gains) losses included in net income (interest expense) | (2,284) | 1,086 |
(Losses) gains arising during the period on interest rate swaps | (8,541) | 5,159 |
Other comprehensive income | (10,825) | 6,245 |
Comprehensive (loss) income | (98,903) | 48,472 |
Less: comprehensive loss attributable to non-controlling interests | 1,084 | 0 |
Comprehensive (loss) income attributable to common stockholders | (97,819) | 48,472 |
Interest Rate Swaps | ||
Interest rate swaps | ||
(Losses) gains arising during the period on interest rate swaps | $ (8,541) | $ 5,159 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Net Income | Cumulative Dividends | Non-controlling Interests |
Beginning balance at Dec. 31, 2021 | $ 2,185,116 | $ 2,185,116 | $ 1,505 | $ 3,972,917 | $ (9,981) | $ 1,266,158 | $ (3,045,483) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock, net of issuance costs | 22,661 | 22,661 | 7 | 22,654 | ||||
Common stock redemptions | (206) | (206) | (206) | |||||
Share-based compensation | 3,699 | 3,699 | 4 | 3,695 | ||||
Net (loss) income | 42,227 | 42,227 | 42,227 | |||||
Reclassification adjustments for (gains) losses included in net income (interest expense) | 1,086 | 1,086 | 1,086 | |||||
Gains (Losses) arising during the period on interest rate swaps | 5,159 | 5,159 | 5,159 | |||||
Dividends to common stockholders (in usd per share) | (46,860) | (46,860) | (46,860) | |||||
Ending balance at Mar. 31, 2022 | 2,212,882 | 2,212,882 | 1,516 | 3,999,060 | (3,736) | 1,308,385 | (3,092,343) | 0 |
Beginning balance at Dec. 31, 2022 | 7,679,818 | 7,571,076 | 3,806 | 9,587,637 | 2,140 | 1,307,055 | (3,329,562) | 108,742 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock, net of issuance costs | 51 | 51 | 51 | |||||
Common stock redemptions | (1,484) | (1,484) | (1) | (1,483) | ||||
Share-based compensation | 4,992 | 4,992 | 3 | 4,989 | ||||
Net (loss) income | (88,078) | (87,125) | (87,125) | (953) | ||||
Reclassification adjustments for (gains) losses included in net income (interest expense) | (2,284) | (2,256) | (2,256) | (28) | ||||
Gains (Losses) arising during the period on interest rate swaps | (8,541) | (8,438) | (8,438) | (103) | ||||
Dividends to common stockholders (in usd per share) | (119,635) | (118,188) | (118,188) | (1,447) | ||||
Ending balance at Mar. 31, 2023 | $ 7,464,839 | $ 7,358,628 | $ 3,808 | $ 9,591,194 | $ (8,554) | $ 1,219,930 | $ (3,447,750) | $ 106,211 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividend per share to common Stockholders (in dollars per share) | $ 0.31 | $ 0.31 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
OPERATING ACTIVITIES | ||
Net (loss) income | $ (88,078) | $ 42,227 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 184,479 | 54,041 |
Other amortization | 11,104 | 1,192 |
Share-based compensation | 4,992 | 3,699 |
Amortization of straight-line rent receivable (lessor) | (9,783) | (1,587) |
Amortization of straight-line rent on operating leases (lessee) | 1,537 | 378 |
Gain on sales of real estate properties | (1,007) | (44,784) |
Loss on extinguishment of debt | 0 | 1,429 |
Impairment of real estate properties and credit loss reserves | 31,422 | (25) |
Equity loss from unconsolidated joint ventures | 780 | 345 |
Distributions from unconsolidated joint ventures | 2,542 | 0 |
Non-cash interest from financing and notes receivable | (1,385) | (199) |
Changes in operating assets and liabilities: | ||
Other assets, including right-of-use-assets | (8,360) | (2,563) |
Accounts payable and accrued liabilities | (66,954) | (12,212) |
Other liabilities | 7,901 | 1,830 |
Net cash provided by operating activities | 69,190 | 43,771 |
INVESTING ACTIVITIES | ||
Acquisitions of real estate | (30,725) | (121,964) |
Development of real estate | (6,707) | (3,754) |
Additional long-lived assets | (60,159) | (23,326) |
Funding of mortgages and notes receivable | (6,230) | 0 |
Investments in unconsolidated joint ventures | (3,824) | (49,598) |
Investment in financing receivable | (302) | |
Investment in financing receivable | 492 | |
Proceeds from sales of real estate properties and additional long-lived assets | 149,171 | 84,883 |
Proceeds from notes receivable repayments | 336 | 0 |
Net cash provided by (used in) investing activities | 41,560 | (113,267) |
FINANCING ACTIVITIES | ||
Net borrowings on unsecured credit facility | 0 | 124,000 |
Repayments of notes and bonds payable | (667) | (17,573) |
Redemption of notes and bonds payable | 0 | (2,184) |
Dividends paid | (118,052) | (46,768) |
Net proceeds from issuance of common stock | 51 | 22,649 |
Common stock redemptions | (1,729) | (852) |
Distributions to non-controlling interest holders | (1,272) | 0 |
Payments made on finance leases | (101) | (257) |
Net cash (used in) provided by financing activities | (121,770) | 79,015 |
(Decrease) increase in cash and cash equivalents | (11,020) | 9,519 |
Cash and cash equivalents at beginning of period | 60,961 | 13,175 |
Cash and cash equivalents at end of period | 49,941 | 22,694 |
Supplemental Cash Flow Information | ||
Interest paid | 75,082 | 16,227 |
Mortgage note receivable taken in connection with sale of real estate | 45,000 | 0 |
Invoices accrued for construction, tenant improvements and other capitalized costs | 28,138 | 13,516 |
Capitalized interest | $ 570 | $ 38 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Business Overview Healthcare Realty Trust Incorporated is a real estate investment trust ("REIT") that owns, leases, manages, acquires, finances, develops and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of March 31, 2023, the Company had gross investments of approximately $13.9 billion in 681 real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property. The Company's 681 real estate properties are located in 35 states and total approximately 39.9 million square feet. The Company provided leasing and property management services to approximately 39.5 million square feet nationwide. As of March 31, 2023, the Company had a weighted average ownership interest of approximately 44% in 34 real estate properties held in joint ventures. See Note 3 below for more details regarding the Company's unconsolidated joint ventures. Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to the Company's Condensed Consolidated Financial Statements, are outside the scope of our independent registered public accounting firm’s review. Basis of Presentation For purposes of this Quarterly Report on Form 10-Q, references to the “Company” are to Legacy HR for periods prior to the closing of the Merger and thereafter to Legacy HR and Legacy HTA as the combined company after giving effect to the Merger. The Merger is described in more detail in Note 2 to these Condensed Consolidated Financial Statements. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein and specific disclosures incorporated as a result of the Merger, management believes there has been no material change in the information disclosed in the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. All material intercompany transactions and balances have been eliminated in consolidation. This interim financial information should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. In addition, the interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2023 for many reasons including, but not limited to, acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties. Principles of Consolidation The Company’s Condensed Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiaries, and joint ventures and partnerships where the Company controls the operating activities. GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). Accounting Standards Codification (“ASC”) Topic 810, Consolidation broadly defines a VIE as an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary, with any minority interests reflected as non-controlling interests or redeemable non-controlling interests in the accompanying Condensed Consolidated Financial Statements. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk, the disposition of all or a portion of an interest held by the primary beneficiary, or changes in facts and circumstances that impact the power to direct activities of the VIE that most significantly impacts economic performance. The Company performs this analysis on an ongoing basis. For property holding entities not determined to be VIEs, the Company consolidates such entities in which it owns 100% of the equity or has a controlling financial interest evidenced by ownership of a majority voting interest. All intercompany balances and transactions are eliminated in consolidation. For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements. Healthcare Realty Holdings, L.P. (the "OP") is 98.8% owned by the Company. Holders of operating partnership units (“OP Units”) are considered to be non-controlling interest holders in the OP and their ownership interests are reflected as equity on the accompanying Condensed Consolidated Balance Sheets. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity. As of March 31, 2023, there were approximately 4.7 million, or 1.2%, of OP Units issued and outstanding held by non-controlling interest holders. Additionally, the Company is the primary beneficiary of this VIE. Accordingly, the Company consolidates the interests in the OP. As of March 31, 2023, the Company had three consolidated VIEs in addition to the OP where it is the primary beneficiary of the VIE based on the combination of operational control and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures. Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs, excluding the OP, in the aggregate: (dollars in thousands) MARCH 31, 2023 Assets: Net real estate investments $ 48,079 Cash and cash equivalents 1,517 Receivables and other assets 2,339 Total assets $ 51,935 Liabilities: Accrued expenses and other liabilities $ 12,010 Total equity 39,925 Total liabilities and equity $ 51,935 As of March 31, 2023, the Company had three unconsolidated VIEs consisting of two notes receivables and one joint venture. The Company does not have the power or economics to direct the activities of the VIEs on a stand-alone basis, and therefore it was determined that the Company was not the primary beneficiary. As a result, the Company accounts for the two notes receivables as amortized cost and a joint venture arrangement under the equity method. See below for additional information regarding the Company's unconsolidated VIEs. (dollars in thousands) ORIGINATION DATE LOCATION SOURCE CARRYING AMOUNT MAXIMUM EXPOSURE TO LOSS 2021 Houston, TX 1 Note receivable $ 30,839 $ 31,150 2021 Charlotte, NC 1 Note receivable 5,639 6,000 2022 Texas 2 Joint venture 66,038 66,038 1 Assumed mortgage note receivable in connection with the Merger. 2 Includes investments in seven properties. As of March 31, 2023, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company exercised significant influence over but did not control these entities. See Note 3 below for more details regarding the Company's unconsolidated joint ventures. Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. Reclassifications Certain reclassifications have been made on the Company's prior year Condensed Consolidated Balance Sheet to conform to current year presentation. Previously, the Company's Lease intangibles were included in Building, improvements and lease intangibles and Goodwill was included with Other assets, net. These amounts are now classified as separate line items on the Company's Condensed Consolidated Balance Sheets. Redeemable Non-Controlling Interests The Company accounts for redeemable equity securities in accordance with Accounting Standards Codification Topic 480: Accounting for Redeemable Equity Instruments, which requires that equity securities redeemable at the option of the holder, not solely within our control, be classified outside permanent stockholders’ equity. The Company classifies redeemable equity securities as redeemable non-controlling interests in the accompanying Condensed Consolidated Balance Sheet. Accordingly, the Company records the carrying amount at the greater of the initial carrying amount (increased or decreased for the non-controlling interest’s share of net income or loss and distributions) or the redemption value. We measure the redemption value and record an adjustment to the carrying value of the equity securities as a component of redeemable non-controlling interest. As of March 31, 2023, the Company had redeemable non-controlling interests of $2.0 million. Investments in Leases - Financing Receivables, Net In accordance with ASC 842, for transactions in which the Company enters into a contract to acquire an asset and leases it back to the seller (i.e., a sale leaseback transaction), control of the asset is not considered to have transferred when the seller-lessee has a purchase option. As a result, the Company does not recognize the underlying real estate asset but instead recognizes a financial asset in accordance with ASC 310 “Receivables”. Real Estate Notes Receivable Real estate notes receivable consists of mezzanine and other real estate loans, which are generally collateralized by a pledge of the borrower’s ownership interest in the respective real estate owner, a mortgage or deed of trust, and/or corporate guarantees. Real estate notes receivable are intended to be held-to-maturity and are recorded at amortized cost, net of unamortized loan origination costs and fees and allowance for credit losses. As of March 31, 2023, real estate notes receivable, net, which are included in Other assets on the Company's Condensed Consolidated Balance Sheets, totaled $147.3 million. (dollars in thousands) ORIGINATION MATURITY STATED INTEREST RATE MAXIMUM LOAN COMMITMENT OUTSTANDING as of Mezzanine loan Texas 6/24/2021 6/24/2024 8.00 % 54,119 54,119 Mortgage loans Texas 6/30/2021 12/31/2023 7.00 % 31,150 31,150 North Carolina 12/22/2021 12/22/2024 8.00 % 6,000 6,000 Florida 5/17/2022 2/27/2026 6.00 % 65,000 19,367 California 3/30/2023 3/29/2026 6.00 % 45,000 45,000 $ 147,150 $ 101,517 Accrued interest 1,428 Allowance for credit losses (5,196) Fair-value discount and fees (4,542) $ 147,326 Allowance for Credit Losses Pursuant to ASC Topic 326, Financial Instruments - Credit Losses, the Company adopted a policy to evaluate current expected credit losses at the inception of loans qualifying for treatment under Topic 326. The Company utilizes a probability of default method approach for estimating current expected credit losses and evaluates the liquidity and creditworthiness of its borrowers on a quarterly basis to determine whether any updates to the future expected losses recognized upon inception are necessary. The Company’s evaluation considers industry and economic conditions, credit enhancements, liquidity, and other factors. In its assessment of current expected credit losses for real estate notes receivable, the Company utilizes past payment history of its borrowers, current economic conditions, and forecasted economic conditions through the maturity date of each note to estimate a probability of default and a resulting loss for each real estate note receivable. During the three months ended March 31, 2023, the Company determined that the risk of credit loss on its mezzanine loans was no longer remote. Consequently, the Company recorded a credit loss reserve of $5.2 million for the three months ended March 31, 2023. The following table summarizes the Company's allowance for credit losses on real estate notes receivable: Dollars in thousands March 31, 2023 December 31, 2022 Allowance for credit losses, beginning of period $ — $ — Credit loss reserves $ 5,196 — Allowance for credit losses, end of period $ 5,196 $ — Interest Income Income from Lease Financing Receivables For the three months ended March 31, 2023, the Company recognized the related income from two financing receivables totaling $1.5 million based on an imputed interest rate over the terms of the applicable lease. As a result, the interest recognized from the financing receivable will not equal the cash payments from the lease agreement. Acquisition costs incurred in connection with entering into the financing receivable are treated as loan origination fees. These costs are classified with the financing receivable and are included in the balance of the net investment. Amortization of these amounts will be recognized as a reduction to Income from financing receivable, net over the life of the lease. Income from Real Estate Notes Receivable During the three months ended March 31, 2023, the Company recognized interest income of $2.0 million related to real estate notes receivable. The Company recognizes interest income on an accrual basis unless the Company has determined that collectability of contractual amounts is not reasonably assured, at which point the note is placed on non-accrual status and interest income is recognized on a cash basis. As of March 31, 2023, the Company placed two of its real estate notes receivable with a principal balance of $54.1 million on non-accrual status and accordingly did not recognize any interest income for the quarter. Revenue from Contracts with Customers (Topic 606) The Company recognizes certain revenue under the core principle of Topic 606. This topic requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease revenue is not within the scope of Topic 606. To achieve the core principle, the Company applies the five step model specified in the guidance. Revenue that is accounted for under Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Operations 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 in thousands 2023 2022 Type of Revenue Parking income $ 2,391 $ 1,753 Management fee income 1 1,973 655 Miscellaneous 254 67 $ 4,618 $ 2,475 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. |
Merger with HTA
Merger with HTA | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Merger with HTA | Merger with HTA On July 20, 2022 (the “Closing Date”), pursuant to the Agreement and Plan of Merger dated as of February 28, 2022 (the “Merger Agreement”), by and among Healthcare Realty Trust Incorporated, a Maryland corporation (now known as HRTI, LLC, a Maryland limited liability company) (“Legacy HR”), Healthcare Trust of America, Inc., a Maryland corporation (now known as Healthcare Realty Trust Incorporated) (“Legacy HTA”), the OP, and HR Acquisition 2, LLC, a Maryland limited liability company (“Merger Sub”), Merger Sub merged with and into Legacy HR, with Legacy HR continuing as the surviving entity and a wholly-owned subsidiary of Legacy HTA (the “Merger”). On the Closing Date, each outstanding share of Legacy HR common stock, $0.01 par value per share (the “Legacy HR Common Stock”), was cancelled and converted into the right to receive one share of Legacy HTA class A common stock at a fixed ratio of 1.00 to 1.00. Per the terms of the Merger Agreement, Legacy HTA declared a special dividend of $4.82 (the “Special Dividend”) for each outstanding share of Legacy HTA class A common stock, $0.01 par value per share ( the “Legacy HTA Common Stock”), and the OP declared a corresponding distribution to the holders of its partnership units, payable to Legacy HTA stockholders and OP unitholders of record on July 19, 2022. 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. The Company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $0.01 par value per share, trade on the New York Stock Exchange (the “NYSE”) under the ticker symbol “HR”. For accounting purposes, the Merger was treated as a “reverse acquisition” in which Legacy HTA was considered the legal acquirer and Legacy HR was considered the accounting acquirer based on various factors, including, but not limited to: (i) the composition of the board of directors of the combined company following the Merger, (ii) the composition of senior management of the combined company following the Merger, and (iii) the premium transferred to the Legacy HTA stockholders. As a result, the historical financial statements of the accounting acquirer, Legacy HR, became the historical financial statements of the Company. The acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, which requires, among other things, the assets acquired and the liabilities assumed and non-controlling interests, if any, to be recognized at their acquisition date fair value. The implied consideration transferred on the Closing Date is as follows: Dollars in thousands, except for per share data Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted (a) 228,520,990 Exchange ratio 1.00 Implied shares of Legacy HR Common Stock issued 228,520,990 Adjusted closing price of Legacy HR Common Stock on July 20, 2022 (b) $ 24.37 Value of implied Legacy HR Common Stock issued $ 5,569,057 Fair value of Legacy HTA restricted stock awards attributable to pre-Merger services (c) 7,406 Consideration transferred $ 5,576,463 (a) The number of shares of Legacy HTA Common Stock presented above was based on 228,857,717 total shares of Legacy HTA Common Stock outstanding as of the Closing Date, less 192 HTA fractional shares that were cancelled in lieu of cash and less 336,535 shares of Legacy HTA restricted stock (net of 215,764 shares of Legacy HTA restricted stock withheld). For accounting purposes, these shares were converted to Legacy HR Common Stock, at an exchange ratio of 1.00 share of Legacy HR Common Stock per share of Legacy HTA Common Stock. (b) For accounting purposes, the fair value of Legacy HR Common Stock issued to former holders of Legacy HTA Common Stock was based on the per share closing price of Legacy HR Common Stock on July 20, 2022. (c) Represents the fair value of Legacy HTA restricted shares which fully vested prior to the closing of the Merger or became fully vested as a result of the closing of the Merger and which are attributable to pre-combination services. Preliminary Purchase Price Allocation The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the Closing Date: Dollars in thousands PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE MEASUREMENT PERIOD ADJUSTMENTS PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE ASSETS Real estate investments Land $ 985,926 $ 6,285 $ 992,211 Buildings and improvements 6,960,418 (121,413) 6,839,005 Lease intangible assets (a) 831,920 1,847 833,767 Financing lease right-of-use assets 9,874 3,146 13,020 Construction in progress 10,071 (6,744) 3,327 Land held for development 46,538 — 46,538 Total real estate investments $ 8,844,747 $ (116,879) $ 8,727,868 Assets held for sale, net 707,442 (7,946) 699,496 Investments in unconsolidated joint ventures 67,892 — 67,892 Cash and cash equivalents 26,034 11,403 37,437 Restricted cash 1,123,647 (1,247) 1,122,400 Operating lease right-of-use assets 198,261 17,786 216,047 Other assets, net (b) (c) 209,163 (3,840) 205,323 Total assets acquired $ 11,177,186 $ (100,723) $ 11,076,463 LIABILITIES Notes and bonds payable $ 3,991,300 $ — $ 3,991,300 Accounts payable and accrued liabilities 1,227,570 17,374 1,244,944 Liabilities of assets held for sale 28,677 (3,939) 24,738 Operating lease liabilities 173,948 10,173 184,121 Financing lease liabilities 10,720 (855) 9,865 Other liabilities 203,210 (11,544) 191,666 Total liabilities assumed $ 5,635,425 $ 11,209 $ 5,646,634 Net identifiable assets acquired $ 5,541,761 $ (111,932) $ 5,429,829 Non-controlling interest $ 110,702 $ — $ 110,702 Goodwill $ 145,404 $ 111,932 $ 257,336 (a) The weighted average amortization period for the acquired lease intangible assets is approximately 6 years. (b) Includes $15.9 million of contractual accounts receivable, which approximates fair value. (c) Includes $78.7 million of gross contractual real estate notes receivable, the fair value of which was $74.8 million, and the Company preliminarily expects to collect substantially all of the real estate notes receivable proceeds as of the Closing Date. The cumulative measurement period adjustments recorded through March 31, 2023 primarily resulted from updated valuations related to the Company’s real estate assets and liabilities and additional information obtained by the Company related to the properties acquired in the Merger and their respective tenants, and resulted in an increase to goodwill of $111.9 million. As of March 31, 2023, the Company had not finalized the determination of fair value of certain tangible and intangible assets acquired and liabilities assumed, including, but not limited to real estate assets and liabilities, notes receivables and goodwill. As such, the assessment of fair value of assets acquired and liabilities assumed is preliminary and was based on information that was available at the time the Condensed Consolidated Financial Statements were prepared. The finalization of the purchase accounting assessment could result in material changes to the Company’s determination of the fair value of assets acquired and liabilities assumed, which will be recorded as measurement period adjustments in the period in which they are identified, up to one year from the Closing Date. A preliminary estimate of approximately $257.3 million has been allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. The recognized goodwill is attributable to expected synergies and benefits arising from the Merger, including anticipated general and administrative cost savings and potential economies of scale benefits in both tenant and vendor relationships following the closing of the Merger. None of the goodwill recognized is expected to be deductible for tax purposes. Merger-related Costs |
Real Estate Investments
Real Estate Investments | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Real Estate Investments | Real Estate Investments 2023 Acquisition Activity The following table details the Company's real estate acquisition activity for the three months ended March 31, 2023: Dollars in thousands DATE ACQUIRED PURCHASE PRICE CASH 1 REAL OTHER 2 SQUARE FOOTAGE Tampa, FL 3/10/23 $ 31,500 $ 30,499 $ 30,596 $ (97) 115,867 1 Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition. 2 Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition. Unconsolidated Joint Ventures The Company's investment in and loss recognized for the three months ended March 31, 2023 and 2022 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below: THREE MONTHS ENDED Dollars in thousands 2023 2022 Investments in unconsolidated joint ventures, beginning of period $ 327,248 $ 161,942 New investment during the period 1 3,824 49,598 Equity loss recognized during the period (780) (345) Owner distributions (2,546) — Investments in unconsolidated joint ventures, end of period $ 327,746 $ 211,195 1 This was an additional investment in an existing joint venture representing a 40% ownership interest in a property in Dallas, Texas. Also, see 2023 Real Estate Asset Dispositions below for additional information. 2023 Real Estate Asset Dispositions The following table details the Company's dispositions for the three months ended March 31, 2023: Dollars in thousands DATE DISPOSED SALE PRICE CLOSING ADJUSTMENTS COMPANY-FINANCED MORTGAGE NOTES NET PROCEEDS NET REAL ESTATE INVESTMENT OTHER (INCLUDING RECEIVABLES) 1 GAIN/(IMPAIRMENT) SQUARE FOOTAGE Tampa, FL & Miami, FL 2 1/12/23 $ 93,250 $ (5,875) $ — $ 87,375 $ 87,302 $ (888) $ 961 224,037 Dallas, TX 3 1/30/23 19,210 (141) — 19,069 18,986 43 40 36,691 St. Louis, MO 2/10/23 350 (18) — 332 398 — (66) 6,500 Los Angeles, CA 3/23/23 21,000 (526) — 20,474 20,610 52 (188) 37,165 Los Angeles, CA 4 3/30/23 75,000 (8,079) (45,000) 21,921 88,624 (803) (20,900) 147,078 Total dispositions $ 208,810 $ (14,639) $ (45,000) $ 149,171 $ 215,920 $ (1,596) $ (20,153) 451,471 1 Includes straight-line rent receivables, leasing commissions and lease inducements. 2 Includes two properties, sold in two separate transactions to the same buyer on the same date. 3 The Company sold this property to a joint venture in which it retained a 40% interest. Sales price and square footage reflect the total sales price paid by the joint venture and total square footage of the property. 4 The Company entered into a mortgage note agreement with the buyer for $45 million. Assets Held for Sale The Company had three properties and one land parcel classified as assets held for sale as of March 31, 2023. The net real estate assets held for sale includes $5.1 million of impairment charges. As of December 31, 2022, the Company had one property classified as assets held for sale as of December 31, 2022, which was sold in the first quarter of 2023. The table below reflects the assets and liabilities classified as held for sale as of March 31, 2023 and December 31, 2022: Dollars in thousands March 31, 2023 December 31, 2022 Balance Sheet data: Land $ 205 $ 1,700 Building and improvements 1,736 15,164 Lease intangibles 2,242 1,986 Land held for development 3,251 — 7,434 18,850 Accumulated depreciation (4,183) — Real estate assets held for sale, net 3,251 18,850 Other assets, net 328 43 Assets held for sale, net $ 3,579 $ 18,893 Accounts payable and accrued liabilities $ 277 $ 282 Other liabilities — 155 Liabilities of assets held for sale $ 277 $ 437 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases Lessor Accounting The Company’s properties generally were leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2052. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property. The Company's leases typically have escalators that are either based on a stated percentage or an index such as the consumer price index ("CPI"). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three months ended March 31, 2023 was $324.1 million. Lease income for the Company's operating leases recognized for the three months ended March 31, 2022 was $138.5 million. Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of March 31, 2023 were as follows: Dollars in thousands OPERATING 2023 $ 695,787 2024 833,006 2025 720,985 2026 620,118 2027 539,486 2028 and thereafter 1,854,402 $ 5,263,784 Lessee Accounting As of March 31, 2023, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of March 31, 2023, the Company had 242 properties totaling 17.8 million square feet that were held under ground leases. Some of the ground lease renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on CPI. The Company had 75 prepaid ground leases as of March 31, 2023. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.3 million and $0.1 million of the Company’s rental expense for the three months ended March 31, 2023 and 2022, respectively. The Company’s future lease payments (primarily for its 167 non-prepaid ground leases) as of March 31, 2023 were as follows: Dollars in thousands OPERATING FINANCING 2023 $ 11,188 $ 1,491 2024 15,239 2,182 2025 14,827 2,218 2026 14,863 2,255 2027 14,933 2,294 2028 and thereafter 939,392 396,398 Total undiscounted lease payments 1,010,442 406,838 Discount (730,805) (333,645) Lease liabilities $ 279,637 $ 73,193 The following table provides details of the Company's total lease expense for the three months ended March 31, 2023 and 2022: THREE MONTHS ENDED Dollars in thousands 2023 2022 Operating lease cost Operating lease expense $ 5,107 $ 1,215 Variable lease expense 2,136 1,024 Finance lease cost Amortization of right-of-use assets 388 172 Interest on lease liabilities 918 287 Total lease expense $ 8,549 $ 2,698 Other information Operating cash flows outflows related to operating leases $ 5,960 $ 2,797 Operating cash flows outflows related to financing leases $ 553 $ 258 Financing cash flows outflows related to financing leases $ 101 $ 257 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 40,589 Weighted-average years remaining lease term (excluding renewal options) - operating leases 47.4 47.6 Weighted-average years remaining lease term (excluding renewal options) - finance leases 58.7 61.9 Weighted-average discount rate - operating leases 5.8 % 5.6 % Weighted-average discount rate - finance leases 5.0 % 5.0 % |
Leases | Leases Lessor Accounting The Company’s properties generally were leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2052. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property. The Company's leases typically have escalators that are either based on a stated percentage or an index such as the consumer price index ("CPI"). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three months ended March 31, 2023 was $324.1 million. Lease income for the Company's operating leases recognized for the three months ended March 31, 2022 was $138.5 million. Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of March 31, 2023 were as follows: Dollars in thousands OPERATING 2023 $ 695,787 2024 833,006 2025 720,985 2026 620,118 2027 539,486 2028 and thereafter 1,854,402 $ 5,263,784 Lessee Accounting As of March 31, 2023, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of March 31, 2023, the Company had 242 properties totaling 17.8 million square feet that were held under ground leases. Some of the ground lease renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on CPI. The Company had 75 prepaid ground leases as of March 31, 2023. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.3 million and $0.1 million of the Company’s rental expense for the three months ended March 31, 2023 and 2022, respectively. The Company’s future lease payments (primarily for its 167 non-prepaid ground leases) as of March 31, 2023 were as follows: Dollars in thousands OPERATING FINANCING 2023 $ 11,188 $ 1,491 2024 15,239 2,182 2025 14,827 2,218 2026 14,863 2,255 2027 14,933 2,294 2028 and thereafter 939,392 396,398 Total undiscounted lease payments 1,010,442 406,838 Discount (730,805) (333,645) Lease liabilities $ 279,637 $ 73,193 The following table provides details of the Company's total lease expense for the three months ended March 31, 2023 and 2022: THREE MONTHS ENDED Dollars in thousands 2023 2022 Operating lease cost Operating lease expense $ 5,107 $ 1,215 Variable lease expense 2,136 1,024 Finance lease cost Amortization of right-of-use assets 388 172 Interest on lease liabilities 918 287 Total lease expense $ 8,549 $ 2,698 Other information Operating cash flows outflows related to operating leases $ 5,960 $ 2,797 Operating cash flows outflows related to financing leases $ 553 $ 258 Financing cash flows outflows related to financing leases $ 101 $ 257 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 40,589 Weighted-average years remaining lease term (excluding renewal options) - operating leases 47.4 47.6 Weighted-average years remaining lease term (excluding renewal options) - finance leases 58.7 61.9 Weighted-average discount rate - operating leases 5.8 % 5.6 % Weighted-average discount rate - finance leases 5.0 % 5.0 % |
Other Assets and Liabilities
Other Assets and Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Assets and Liabilities | Other Assets and Liabilities Other Assets Other assets consist primarily of intangible assets, prepaid assets, real estate notes receivable, straight-line rent receivables, accounts receivable, additional long-lived assets and interest rate swaps. Items included in "Other assets, net" on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are detailed in the table below: Dollars in thousands March 31, 2023 December 31, 2022 Real estate notes receivable, net 1 $ 147,326 $ 99,643 Straight-line rent receivables 98,923 88,868 Prepaid assets 88,694 81,900 Above-market intangible assets, net 85,100 80,720 Accounts receivable, net 48,676 47,498 Additional long-lived assets, net 22,173 21,446 Interest rate swap assets 9,767 14,512 Investment in securities 2 6,011 6,011 Other receivables, net 5,962 7,169 Debt issuance costs, net 5,449 5,977 Project costs 4,900 4,337 Net investment in lease 1,828 1,828 Customer relationship intangible assets, net 1,106 1,120 Other 8,505 8,961 $ 534,420 $ 469,990 1 This amount includes an allowance for credit losses. See Note 1 for additional information. 2 This amount represents the value of the Company's preferred stock investment in a data analytics platform. Accounts Payable and Accrued Liabilities The following table provides details of the items included in "Accounts payable and accrued liabilities" on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022: Dollars in thousands March 31, 2023 December 31, 2022 Accrued property taxes $ 48,629 $ 78,185 Accounts payable and capital expenditures 35,128 57,352 Accrued interest 28,483 50,037 Other operating accruals 42,970 58,459 $ 155,210 $ 244,033 Other Liabilities The following table provides details of the items included in "Other liabilities" on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022: Dollars in thousands March 31, 2023 December 31, 2022 Below-market intangible liabilities, net $ 96,214 $ 97,935 Deferred revenue 90,979 87,325 Security deposits 29,020 28,521 Interest rate swap liability 11,927 4,269 Other 3,889 618 $ 232,029 $ 218,668 |
Notes and Bonds Payable
Notes and Bonds Payable | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Notes and Bonds Payable | Notes and Bonds Payable The table below details the Company’s notes and bonds payable as of March 31, 2023 and December 31, 2022. MATURITY DATES BALANCE 1 AS OF EFFECTIVE INTEREST RATE Dollars in thousands 3/31/2023 12/31/2022 $1.5 billion Unsecured Credit Facility 10/25 $ 385,000 $ 385,000 5.76 % $350 million Unsecured Term Loan 2 7/23 349,494 349,114 5.72 % $200 million Unsecured Term Loan 5/24 199,728 199,670 5.72 % $300 million Unsecured Term Loan 10/25 299,941 299,936 5.72 % $150 million Unsecured Term Loan 6/26 149,532 149,495 5.72 % $200 million Unsecured Term Loan 7/27 199,397 199,362 5.72 % $300 million Unsecured Term Loan 1/28 297,974 297,869 5.72 % Senior Notes due 2025 5/25 249,206 249,115 4.12 % Senior Notes due 2026 8/26 573,410 571,587 4.94 % Senior Notes due 2027 7/27 480,578 479,553 4.76 % Senior Notes due 2028 1/28 296,995 296,852 3.85 % Senior Notes due 2030 2/30 567,863 565,402 5.30 % Senior Notes due 2030 3/30 296,479 296,385 2.72 % Senior Notes due 2031 3/31 295,671 295,547 2.25 % Senior Notes due 2031 3/31 636,819 632,693 5.13 % Mortgage notes payable 8/23-12/26 83,612 84,247 3.57%-4.84% $ 5,361,699 $ 5,351,827 . 1 Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. For derivatives designated, and that qualify, as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of March 31, 2023, the Company had 14 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: EXPIRATION DATE AMOUNT WEIGHTED January 15, 2024 $ 200,000 1.21 % May 1, 2026 100,000 2.15 % June 1, 2026 150,000 3.83 % December 1, 2026 150,000 3.84 % June 1, 2027 150,000 4.13 % December 1, 2027 250,000 3.79 % $ 1,000,000 3.17 % Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet The table below presents the fair value of the Company's derivative financial instruments, as well as their classification on the Condensed Consolidated Balance Sheet as of March 31, 2023. BALANCE AT MARCH 31, 2023 In thousands BALANCE SHEET LOCATION FAIR VALUE Derivatives designated as hedging instruments Interest rate swaps Other liabilities $ (11,927) Interest rate swaps Other assets $ 9,767 Total derivatives designated as hedging instruments $ (2,160) Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) The table below presents the effect of cash flow hedge accounting on AOCI during the three months ended March 31, 2023 and 2022 related to the Company's outstanding interest rate swaps. (GAIN)/LOSS RECOGNIZED IN (GAIN)/LOSS RECLASSIFIED FROM In thousands 2023 2022 2023 2022 Interest rate swaps $ 8,541 $ (5,159) Interest expense $ (2,433) $ 937 Settled treasury hedges — — Interest expense 107 107 Settled interest rate swaps — — Interest expense 42 42 $ 8,541 $ (5,159) Total interest expense $ (2,284) $ 1,086 The Company estimates that an additional $9.5 million related to active interest rate swaps will be reclassified from AOCI as a decrease to interest expense over the next 12 months, and that an additional $0.6 million related to settled interest rate swaps will be amortized from AOCI as an increase to interest expense over the next 12 months. Credit-risk-related Contingent Features The Company's agreements with each of its derivative counterparties contain a cross-default provision under which the Company could be declared in default of its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness. As of March 31, 2023, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $7.0 million. As of March 31, 2023, the Company has not posted any collateral related to these agreements and was not in breach of any agreement. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The Company is, from time to time, involved in litigation arising in the ordinary course of business. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Development and Redevelopment Activity During the first quarter of 2023, the Company funded $16.9 million toward the development and redevelopment of properties. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the three months ended March 31, 2023 and the twelve months ended December 31, 2022: THREE MONTHS ENDED MARCH 31, 2023 TWELVE MONTHS ENDED DECEMBER 31, 2022 Balance, beginning of period 380,589,894 150,457,433 Issuance of common stock 3,130 229,618,304 Non-vested share-based awards, net of withheld shares 223,405 514,157 Balance, end of period 380,816,429 380,589,894 At-The-Market Equity Offering Program The Company has equity distribution agreements with various sales agents with respect to the at-the-market (“ATM”) offering program of common stock with an aggregate sales amount of up to $750.0 million. As of March 31, 2023, $750.0 million remained available for issuance under our current ATM offering program. During the three months ended March 31, 2023, the Company did not sell any shares or enter into any forward sale agreements to sell shares of common stock through its ATM offering program. Common Stock Dividends During the three months ended March 31, 2023, the Company declared and paid common stock dividends totaling $0.31 per share. On May 2, 2023, the Company declared a quarterly common stock dividend in the amount of $0.31 per share payable on June 2, 2023 to stockholders of record on May 16, 2023. Earnings Per Common Share The Company uses the two-class method of computing net earnings per common shares. The Company's non-vested share-based awards are considered participating securities pursuant to the two-class method. The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2023 and 2022. THREE MONTHS ENDED MARCH 31, Dollars in thousands, except per share data 2023 2022 Weighted average common shares outstanding Weighted average common shares outstanding 380,796,773 150,834,888 Non-vested shares (1,956,353) (1,871,858) Weighted average common shares outstanding - basic 378,840,420 148,963,030 Weighted average common shares outstanding - basic 378,840,420 148,963,030 Dilutive effect of employee stock purchase plan — 88,234 Weighted average common shares outstanding - diluted 378,840,420 149,051,264 Net (loss) income attributable to common stockholders $ (87,125) $ 42,227 Dividends paid on nonvested share-based awards (605) (605) Net (loss) income applicable to common stockholders - basic $ (87,730) $ 41,622 Basic earnings per common share - net income $ (0.23) $ 0.28 Diluted earnings per common share - net income $ (0.23) $ 0.28 The effect of OP units totaling 4,042,993 shares, non-vested stock awards totaling 401,937 shares, and options under the Company's Employee Stock Purchase Plan (the "ESPP") to purchase the Company's common stock totaling 49,322 shares for the three months ended March 31, 2023 were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during that period. Incentive Plans Restricted Common Shares During the three months ended March 31, 2023, the Company granted non-vested stock awards to its named executive officers and other members of senior management and employees with a grant date fair value of $5.4 million, which consisted of an aggregate of 270,494 non-vested shares with vesting periods ranging from three A summary of the activity under the Company's share-based incentive plans for the three months ended March 31, 2023 and 2022 is included in the table below. THREE MONTHS ENDED MARCH 31, 2023 2022 Share-based awards, beginning of period 1,795,128 1,562,028 Granted 282,540 415,184 Vested (101,720) (24,365) Forfeited (20,503) (1,296) Share-based awards, end of period 1,955,445 1,951,551 During the three months ended March 31, 2023 and 2022, the Company withheld 38,632 and 6,727 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested. Restricted Stock Units Prior to 2022, the Company granted long-term incentive awards, comprised of restricted stock, based on backward-looking performance measured at the end of the calendar year. The Company adopted a new incentive compensation structure effective January 2022, comprised of restricted stock and restricted stock units ("RSUs"). The RSUs are granted at the beginning of the year with three-year forward-looking performance targets. On January 4, 2023, the Company granted RSUs to members of senior management, with a grant date fair value of $3.7 million, which consisted of an aggregate 165,174 RSUs with a five-year vesting period. Approximately 43% of the RSUs vest based on two market performance conditions. Relative and absolute total shareholder return ("TSR") awards containing these market performance conditions were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $24.23 for the absolute TSR component and $27.84 for the relative TSR component for the January 2023 grant using the following assumptions: THREE MONTHS ENDED MARCH 31, Volatility 34.0 % Dividend assumption Accrued Expected term 3 years Risk-free rate 4.42 % Stock price (per share) $20.21 The remaining 57% of the RSUs vest based upon certain operating performance conditions. With respect to the operating performance conditions of the January 4, 2023 grant, the grant date fair value was $20.21 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January RSUs was $22.55 per share. The following is a summary of the RSU activity during the three months ended March 31, 2023: Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested, beginning of period 294,932 $ 33.04 Granted 165,174 22.55 Vested/Forfeited (17,606) 33.04 Probability adjustment of 2022 RSUs (79,250) 31.68 Non-vested, end of period 363,250 $ 28.57 LTIP Series C Units In January 2023, the Company modified its incentive compensation structure to award LTIP Series C units ("LTIP-C units) in the OP to named executive officers in lieu of RSUs. The LTIP-C units are granted with three-year forward-looking performance targets, with a grant date fair value of $7.1 million, which consisted of an aggregate 448,249 LTIP-C units with a five-year vesting period. Approximately 43% of the LTIP-C units vest based on two market performance conditions. Relative and absolute TSR awards containing these market performance conditions were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $12.24 for the absolute TSR component and $13.98 for the relative TSR component for the January 2023 grant using the following assumptions: THREE MONTHS ENDED MARCH 31, Volatility 34.0 % Dividend assumption Accrued Expected term 3 years Risk-free rate 4.42 % Stock price (per share) $20.21 The remaining 57% of the LTIP-C units vest based upon certain operating performance conditions. With respect to the operating performance conditions of the January 4, 2023 grant, the grant date fair value was $20.21 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January LTIP-C units was $15.85 per share. Employee Stock Purchase Plan Legacy HR maintained an ESPP prior to the completion of the Merger. The outstanding options to purchase shares of the common stock of Legacy HR became options to purchase class A common stock of the Company upon completion of the Merger. No new options will be granted under the ESPP. A summary of the activity under the ESPP for the three months ended March 31, 2023 and 2022 is included in the table below. THREE MONTHS ENDED MARCH 31, 2023 2022 Outstanding and exercisable, beginning of period 340,976 348,514 Granted — 255,960 Exercised (3,130) (10,553) Forfeited (21,421) (25,486) Expired (132,999) (140,633) Outstanding and exercisable, end of period 183,426 427,802 The following table represents expected amortization of the Company's non-vested shares issued as of March 31, 2023: Dollars in millions FUTURE AMORTIZATION 2023 $ 10.5 2024 12.5 2025 10.8 2026 8.1 2027 2.4 2028 and thereafter 0.5 Total $ 44.8 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practical to estimate that value. • Cash and cash equivalents - The carrying amount approximates fair value due to the short term maturity of these investments. • Real estate notes receivabl e - Real estate notes receivable are recorded in other assets on the Company's Condensed Consolidated Balance Sheets. Fair value is estimated using cash flow analyses, based on current interest rates for similar types of arrangements. • Borrowings under the Unsecured Credit Facility and the Term Loans Due 2024 and 2026 - The carrying amount approximates fair value because the borrowings are based on variable market interest rates. • Senior Notes and Mortgage Notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements. • Interest rate swap agreements - Interest rate swap agreements are recorded in other liabilities on the Company's Condensed Consolidated Balance Sheets at fair value. Fair value is estimated by utilizing pricing models, level 2 inputs, that consider forward yield curves and discount rates. The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable at March 31, 2023 and December 31, 2022. March 31, 2023 December 31, 2022 Dollars in millions CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE Notes and bonds payable 1 $ 5,361.7 $ 5,185.0 $ 5,351.8 $ 5,149.6 Real estate notes receivable 1 $ 147.3 $ 146.4 $ 99.6 $ 99.6 1 Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Business overview | Business OverviewHealthcare Realty Trust Incorporated is a real estate investment trust ("REIT") that owns, leases, manages, acquires, finances, develops and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of March 31, 2023, the Company had gross investments of approximately $13.9 billion in 681 real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property. The Company's 681 real estate properties are located in 35 states and total approximately 39.9 million square feet. The Company provided leasing and property management services to approximately 39.5 million square feet nationwide. As of March 31, 2023, the Company had a weighted average ownership interest of approximately 44% in 34 real estate properties held in joint ventures. See Note 3 below for more details regarding the Company's unconsolidated joint ventures. Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to the Company's Condensed Consolidated Financial Statements, are outside the scope of our independent registered public accounting firm’s review. |
Basis of presentation | Basis of Presentation For purposes of this Quarterly Report on Form 10-Q, references to the “Company” are to Legacy HR for periods prior to the closing of the Merger and thereafter to Legacy HR and Legacy HTA as the combined company after giving effect to the Merger. The Merger is described in more detail in Note 2 to these Condensed Consolidated Financial Statements. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein and specific disclosures incorporated as a result of the Merger, management believes there has been no material change in the information disclosed in the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. All material intercompany transactions and balances have been eliminated in consolidation. This interim financial information should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. In addition, the interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2023 for many reasons including, but not limited to, acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties. |
Principles of consolidation | Principles of Consolidation The Company’s Condensed Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiaries, and joint ventures and partnerships where the Company controls the operating activities. GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). Accounting Standards Codification (“ASC”) Topic 810, Consolidation broadly defines a VIE as an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary, with any minority interests reflected as non-controlling interests or redeemable non-controlling interests in the accompanying Condensed Consolidated Financial Statements. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk, the disposition of all or a portion of an interest held by the primary beneficiary, or changes in facts and circumstances that impact the power to direct activities of the VIE that most significantly impacts economic performance. The Company performs this analysis on an ongoing basis. For property holding entities not determined to be VIEs, the Company consolidates such entities in which it owns 100% of the equity or has a controlling financial interest evidenced by ownership of a majority voting interest. All intercompany balances and transactions are eliminated in consolidation. For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements. Healthcare Realty Holdings, L.P. (the "OP") is 98.8% owned by the Company. Holders of operating partnership units (“OP Units”) are considered to be non-controlling interest holders in the OP and their ownership interests are reflected as equity on the accompanying Condensed Consolidated Balance Sheets. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity. As of March 31, 2023, there were approximately 4.7 million, or 1.2%, of OP Units issued and outstanding held by non-controlling interest holders. Additionally, the Company is the primary beneficiary of this VIE. Accordingly, the Company consolidates the interests in the OP. As of March 31, 2023, the Company had three consolidated VIEs in addition to the OP where it is the primary beneficiary of the VIE based on the combination of operational control and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures. Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs, excluding the OP, in the aggregate: (dollars in thousands) MARCH 31, 2023 Assets: Net real estate investments $ 48,079 Cash and cash equivalents 1,517 Receivables and other assets 2,339 Total assets $ 51,935 Liabilities: Accrued expenses and other liabilities $ 12,010 Total equity 39,925 Total liabilities and equity $ 51,935 As of March 31, 2023, the Company had three unconsolidated VIEs consisting of two notes receivables and one joint venture. The Company does not have the power or economics to direct the activities of the VIEs on a stand-alone basis, and therefore it was determined that the Company was not the primary beneficiary. As a result, the Company accounts for the two notes receivables as amortized cost and a joint venture arrangement under the equity method. See below for additional information regarding the Company's unconsolidated VIEs. (dollars in thousands) ORIGINATION DATE LOCATION SOURCE CARRYING AMOUNT MAXIMUM EXPOSURE TO LOSS 2021 Houston, TX 1 Note receivable $ 30,839 $ 31,150 2021 Charlotte, NC 1 Note receivable 5,639 6,000 2022 Texas 2 Joint venture 66,038 66,038 1 Assumed mortgage note receivable in connection with the Merger. 2 Includes investments in seven properties. |
Variable Interest Entities | As of March 31, 2023, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company exercised significant influence over but did not control these entities. |
Use of estimates in the condensed consolidated financial statements | Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made on the Company's prior year Condensed Consolidated Balance Sheet to conform to current year presentation. Previously, the Company's Lease intangibles were included in Building, improvements and lease intangibles and Goodwill was included with Other assets, net. These amounts are now classified as separate line items on the Company's Condensed Consolidated Balance Sheets. |
Redeemable non-controlling interests | Redeemable Non-Controlling InterestsThe Company accounts for redeemable equity securities in accordance with Accounting Standards Codification Topic 480: Accounting for Redeemable Equity Instruments, which requires that equity securities redeemable at the option of the holder, not solely within our control, be classified outside permanent stockholders’ equity. The Company classifies redeemable equity securities as redeemable non-controlling interests in the accompanying Condensed Consolidated Balance Sheet. Accordingly, the Company records the carrying amount at the greater of the initial carrying amount (increased or decreased for the non-controlling interest’s share of net income or loss and distributions) or the redemption value. We measure the redemption value and record an adjustment to the carrying value of the equity securities as a component of redeemable non-controlling interest. |
Investments in Leases - Financing Receivables, Net | Investments in Leases - Financing Receivables, Net In accordance with ASC 842, for transactions in which the Company enters into a contract to acquire an asset and leases it back to the seller (i.e., a sale leaseback transaction), control of the asset is not considered to have transferred when the seller-lessee has a purchase option. As a result, the Company does not recognize the underlying real estate asset but instead recognizes a financial asset in accordance with ASC 310 “Receivables”. Real Estate Notes Receivable Real estate notes receivable consists of mezzanine and other real estate loans, which are generally collateralized by a pledge of the borrower’s ownership interest in the respective real estate owner, a mortgage or deed of trust, and/or corporate guarantees. Real estate notes receivable are intended to be held-to-maturity and are recorded at amortized cost, net of unamortized loan origination costs and fees and allowance for credit losses. As of March 31, 2023, real estate notes receivable, net, which are included in Other assets on the Company's Condensed Consolidated Balance Sheets, totaled $147.3 million. (dollars in thousands) ORIGINATION MATURITY STATED INTEREST RATE MAXIMUM LOAN COMMITMENT OUTSTANDING as of Mezzanine loan Texas 6/24/2021 6/24/2024 8.00 % 54,119 54,119 Mortgage loans Texas 6/30/2021 12/31/2023 7.00 % 31,150 31,150 North Carolina 12/22/2021 12/22/2024 8.00 % 6,000 6,000 Florida 5/17/2022 2/27/2026 6.00 % 65,000 19,367 California 3/30/2023 3/29/2026 6.00 % 45,000 45,000 $ 147,150 $ 101,517 Accrued interest 1,428 Allowance for credit losses (5,196) Fair-value discount and fees (4,542) $ 147,326 Allowance for Credit Losses Pursuant to ASC Topic 326, Financial Instruments - Credit Losses, the Company adopted a policy to evaluate current expected credit losses at the inception of loans qualifying for treatment under Topic 326. The Company utilizes a probability of default method approach for estimating current expected credit losses and evaluates the liquidity and creditworthiness of its borrowers on a quarterly basis to determine whether any updates to the future expected losses recognized upon inception are necessary. The Company’s evaluation considers industry and economic conditions, credit enhancements, liquidity, and other factors. In its assessment of current expected credit losses for real estate notes receivable, the Company utilizes past payment history of its borrowers, current economic conditions, and forecasted economic conditions through the maturity date of each note to estimate a probability of default and a resulting loss for each real estate note receivable. During the three months ended March 31, 2023, the Company determined that the risk of credit loss on its mezzanine loans was no longer remote. Consequently, the Company recorded a credit loss reserve of $5.2 million for the three months ended March 31, 2023. The following table summarizes the Company's allowance for credit losses on real estate notes receivable: Dollars in thousands March 31, 2023 December 31, 2022 Allowance for credit losses, beginning of period $ — $ — Credit loss reserves $ 5,196 — Allowance for credit losses, end of period $ 5,196 $ — Interest Income Income from Lease Financing Receivables For the three months ended March 31, 2023, the Company recognized the related income from two financing receivables totaling $1.5 million based on an imputed interest rate over the terms of the applicable lease. As a result, the interest recognized from the financing receivable will not equal the cash payments from the lease agreement. Acquisition costs incurred in connection with entering into the financing receivable are treated as loan origination fees. These costs are classified with the financing receivable and are included in the balance of the net investment. Amortization of these amounts will be recognized as a reduction to Income from financing receivable, net over the life of the lease. Income from Real Estate Notes Receivable |
Revenue from contract with customers (topic 606) | Revenue from Contracts with Customers (Topic 606) The Company recognizes certain revenue under the core principle of Topic 606. This topic requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease revenue is not within the scope of Topic 606. To achieve the core principle, the Company applies the five step model specified in the guidance. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Condensed Balance Sheet | Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs, excluding the OP, in the aggregate: (dollars in thousands) MARCH 31, 2023 Assets: Net real estate investments $ 48,079 Cash and cash equivalents 1,517 Receivables and other assets 2,339 Total assets $ 51,935 Liabilities: Accrued expenses and other liabilities $ 12,010 Total equity 39,925 Total liabilities and equity $ 51,935 |
Schedule of Variable Interest Entities | , the Company accounts for the two notes receivables as amortized cost and a joint venture arrangement under the equity method. See below for additional information regarding the Company's unconsolidated VIEs. (dollars in thousands) ORIGINATION DATE LOCATION SOURCE CARRYING AMOUNT MAXIMUM EXPOSURE TO LOSS 2021 Houston, TX 1 Note receivable $ 30,839 $ 31,150 2021 Charlotte, NC 1 Note receivable 5,639 6,000 2022 Texas 2 Joint venture 66,038 66,038 1 Assumed mortgage note receivable in connection with the Merger. 2 Includes investments in seven properties. |
Schedule of Accounts, Notes, Loans and Financing Receivable | (dollars in thousands) ORIGINATION MATURITY STATED INTEREST RATE MAXIMUM LOAN COMMITMENT OUTSTANDING as of Mezzanine loan Texas 6/24/2021 6/24/2024 8.00 % 54,119 54,119 Mortgage loans Texas 6/30/2021 12/31/2023 7.00 % 31,150 31,150 North Carolina 12/22/2021 12/22/2024 8.00 % 6,000 6,000 Florida 5/17/2022 2/27/2026 6.00 % 65,000 19,367 California 3/30/2023 3/29/2026 6.00 % 45,000 45,000 $ 147,150 $ 101,517 Accrued interest 1,428 Allowance for credit losses (5,196) Fair-value discount and fees (4,542) $ 147,326 |
Schedule of Company's Allowance For Credit Losses | The following table summarizes the Company's allowance for credit losses on real estate notes receivable: Dollars in thousands March 31, 2023 December 31, 2022 Allowance for credit losses, beginning of period $ — $ — Credit loss reserves $ 5,196 — Allowance for credit losses, end of period $ 5,196 $ — |
Schedule of Disaggregation of revenue | Below is a detail of the amounts by category: THREE MONTHS ENDED in thousands 2023 2022 Type of Revenue Parking income $ 2,391 $ 1,753 Management fee income 1 1,973 655 Miscellaneous 254 67 $ 4,618 $ 2,475 |
Merger with HTA (Tables)
Merger with HTA (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consideration Transferred | The implied consideration transferred on the Closing Date is as follows: Dollars in thousands, except for per share data Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted (a) 228,520,990 Exchange ratio 1.00 Implied shares of Legacy HR Common Stock issued 228,520,990 Adjusted closing price of Legacy HR Common Stock on July 20, 2022 (b) $ 24.37 Value of implied Legacy HR Common Stock issued $ 5,569,057 Fair value of Legacy HTA restricted stock awards attributable to pre-Merger services (c) 7,406 Consideration transferred $ 5,576,463 (a) The number of shares of Legacy HTA Common Stock presented above was based on 228,857,717 total shares of Legacy HTA Common Stock outstanding as of the Closing Date, less 192 HTA fractional shares that were cancelled in lieu of cash and less 336,535 shares of Legacy HTA restricted stock (net of 215,764 shares of Legacy HTA restricted stock withheld). For accounting purposes, these shares were converted to Legacy HR Common Stock, at an exchange ratio of 1.00 share of Legacy HR Common Stock per share of Legacy HTA Common Stock. (b) For accounting purposes, the fair value of Legacy HR Common Stock issued to former holders of Legacy HTA Common Stock was based on the per share closing price of Legacy HR Common Stock on July 20, 2022. |
Schedule of Fair Values of the Assets Acquired And Liabilities Assumed | The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the Closing Date: Dollars in thousands PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE MEASUREMENT PERIOD ADJUSTMENTS PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE ASSETS Real estate investments Land $ 985,926 $ 6,285 $ 992,211 Buildings and improvements 6,960,418 (121,413) 6,839,005 Lease intangible assets (a) 831,920 1,847 833,767 Financing lease right-of-use assets 9,874 3,146 13,020 Construction in progress 10,071 (6,744) 3,327 Land held for development 46,538 — 46,538 Total real estate investments $ 8,844,747 $ (116,879) $ 8,727,868 Assets held for sale, net 707,442 (7,946) 699,496 Investments in unconsolidated joint ventures 67,892 — 67,892 Cash and cash equivalents 26,034 11,403 37,437 Restricted cash 1,123,647 (1,247) 1,122,400 Operating lease right-of-use assets 198,261 17,786 216,047 Other assets, net (b) (c) 209,163 (3,840) 205,323 Total assets acquired $ 11,177,186 $ (100,723) $ 11,076,463 LIABILITIES Notes and bonds payable $ 3,991,300 $ — $ 3,991,300 Accounts payable and accrued liabilities 1,227,570 17,374 1,244,944 Liabilities of assets held for sale 28,677 (3,939) 24,738 Operating lease liabilities 173,948 10,173 184,121 Financing lease liabilities 10,720 (855) 9,865 Other liabilities 203,210 (11,544) 191,666 Total liabilities assumed $ 5,635,425 $ 11,209 $ 5,646,634 Net identifiable assets acquired $ 5,541,761 $ (111,932) $ 5,429,829 Non-controlling interest $ 110,702 $ — $ 110,702 Goodwill $ 145,404 $ 111,932 $ 257,336 (a) The weighted average amortization period for the acquired lease intangible assets is approximately 6 years. (b) Includes $15.9 million of contractual accounts receivable, which approximates fair value. (c) Includes $78.7 million of gross contractual real estate notes receivable, the fair value of which was $74.8 million, and the Company preliminarily expects to collect substantially all of the real estate notes receivable proceeds as of the Closing Date. The cumulative measurement period adjustments recorded through March 31, 2023 primarily resulted from updated valuations related to the Company’s real estate assets and liabilities and additional information obtained by the Company related to the properties acquired in the Merger and their respective tenants, and resulted in an increase to goodwill of $111.9 million. |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Acquisitions | The following table details the Company's real estate acquisition activity for the three months ended March 31, 2023: Dollars in thousands DATE ACQUIRED PURCHASE PRICE CASH 1 REAL OTHER 2 SQUARE FOOTAGE Tampa, FL 3/10/23 $ 31,500 $ 30,499 $ 30,596 $ (97) 115,867 1 Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition. 2 Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition. |
Schedule of equity method investments | The Company's investment in and loss recognized for the three months ended March 31, 2023 and 2022 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below: THREE MONTHS ENDED Dollars in thousands 2023 2022 Investments in unconsolidated joint ventures, beginning of period $ 327,248 $ 161,942 New investment during the period 1 3,824 49,598 Equity loss recognized during the period (780) (345) Owner distributions (2,546) — Investments in unconsolidated joint ventures, end of period $ 327,746 $ 211,195 1 This was an additional investment in an existing joint venture representing a 40% ownership interest in a property in Dallas, Texas. Also, see 2023 Real Estate Asset Dispositions below for additional information. |
Schedule of real estate dispositions | The following table details the Company's dispositions for the three months ended March 31, 2023: Dollars in thousands DATE DISPOSED SALE PRICE CLOSING ADJUSTMENTS COMPANY-FINANCED MORTGAGE NOTES NET PROCEEDS NET REAL ESTATE INVESTMENT OTHER (INCLUDING RECEIVABLES) 1 GAIN/(IMPAIRMENT) SQUARE FOOTAGE Tampa, FL & Miami, FL 2 1/12/23 $ 93,250 $ (5,875) $ — $ 87,375 $ 87,302 $ (888) $ 961 224,037 Dallas, TX 3 1/30/23 19,210 (141) — 19,069 18,986 43 40 36,691 St. Louis, MO 2/10/23 350 (18) — 332 398 — (66) 6,500 Los Angeles, CA 3/23/23 21,000 (526) — 20,474 20,610 52 (188) 37,165 Los Angeles, CA 4 3/30/23 75,000 (8,079) (45,000) 21,921 88,624 (803) (20,900) 147,078 Total dispositions $ 208,810 $ (14,639) $ (45,000) $ 149,171 $ 215,920 $ (1,596) $ (20,153) 451,471 1 Includes straight-line rent receivables, leasing commissions and lease inducements. 2 Includes two properties, sold in two separate transactions to the same buyer on the same date. 3 The Company sold this property to a joint venture in which it retained a 40% interest. Sales price and square footage reflect the total sales price paid by the joint venture and total square footage of the property. 4 The Company entered into a mortgage note agreement with the buyer for $45 million. |
Schedule of assets and liabilities held for sale | The table below reflects the assets and liabilities classified as held for sale as of March 31, 2023 and December 31, 2022: Dollars in thousands March 31, 2023 December 31, 2022 Balance Sheet data: Land $ 205 $ 1,700 Building and improvements 1,736 15,164 Lease intangibles 2,242 1,986 Land held for development 3,251 — 7,434 18,850 Accumulated depreciation (4,183) — Real estate assets held for sale, net 3,251 18,850 Other assets, net 328 43 Assets held for sale, net $ 3,579 $ 18,893 Accounts payable and accrued liabilities $ 277 $ 282 Other liabilities — 155 Liabilities of assets held for sale $ 277 $ 437 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Future Minimum Operating Lease Payments Receivable | Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of March 31, 2023 were as follows: Dollars in thousands OPERATING 2023 $ 695,787 2024 833,006 2025 720,985 2026 620,118 2027 539,486 2028 and thereafter 1,854,402 $ 5,263,784 |
Future Minimum Operating Lease Payments | The Company’s future lease payments (primarily for its 167 non-prepaid ground leases) as of March 31, 2023 were as follows: Dollars in thousands OPERATING FINANCING 2023 $ 11,188 $ 1,491 2024 15,239 2,182 2025 14,827 2,218 2026 14,863 2,255 2027 14,933 2,294 2028 and thereafter 939,392 396,398 Total undiscounted lease payments 1,010,442 406,838 Discount (730,805) (333,645) Lease liabilities $ 279,637 $ 73,193 |
Future Minimum Financing Lease Payments | The Company’s future lease payments (primarily for its 167 non-prepaid ground leases) as of March 31, 2023 were as follows: Dollars in thousands OPERATING FINANCING 2023 $ 11,188 $ 1,491 2024 15,239 2,182 2025 14,827 2,218 2026 14,863 2,255 2027 14,933 2,294 2028 and thereafter 939,392 396,398 Total undiscounted lease payments 1,010,442 406,838 Discount (730,805) (333,645) Lease liabilities $ 279,637 $ 73,193 |
Lease Cost | The following table provides details of the Company's total lease expense for the three months ended March 31, 2023 and 2022: THREE MONTHS ENDED Dollars in thousands 2023 2022 Operating lease cost Operating lease expense $ 5,107 $ 1,215 Variable lease expense 2,136 1,024 Finance lease cost Amortization of right-of-use assets 388 172 Interest on lease liabilities 918 287 Total lease expense $ 8,549 $ 2,698 Other information Operating cash flows outflows related to operating leases $ 5,960 $ 2,797 Operating cash flows outflows related to financing leases $ 553 $ 258 Financing cash flows outflows related to financing leases $ 101 $ 257 Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 40,589 Weighted-average years remaining lease term (excluding renewal options) - operating leases 47.4 47.6 Weighted-average years remaining lease term (excluding renewal options) - finance leases 58.7 61.9 Weighted-average discount rate - operating leases 5.8 % 5.6 % Weighted-average discount rate - finance leases 5.0 % 5.0 % |
Other Assets and Liabilities (T
Other Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Assets | Other assets consist primarily of intangible assets, prepaid assets, real estate notes receivable, straight-line rent receivables, accounts receivable, additional long-lived assets and interest rate swaps. Items included in "Other assets, net" on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are detailed in the table below: Dollars in thousands March 31, 2023 December 31, 2022 Real estate notes receivable, net 1 $ 147,326 $ 99,643 Straight-line rent receivables 98,923 88,868 Prepaid assets 88,694 81,900 Above-market intangible assets, net 85,100 80,720 Accounts receivable, net 48,676 47,498 Additional long-lived assets, net 22,173 21,446 Interest rate swap assets 9,767 14,512 Investment in securities 2 6,011 6,011 Other receivables, net 5,962 7,169 Debt issuance costs, net 5,449 5,977 Project costs 4,900 4,337 Net investment in lease 1,828 1,828 Customer relationship intangible assets, net 1,106 1,120 Other 8,505 8,961 $ 534,420 $ 469,990 1 This amount includes an allowance for credit losses. See Note 1 for additional information. 2 This amount represents the value of the Company's preferred stock investment in a data analytics platform. |
Schedule of Accounts Payable and Accrued Liabilities | The following table provides details of the items included in "Accounts payable and accrued liabilities" on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022: Dollars in thousands March 31, 2023 December 31, 2022 Accrued property taxes $ 48,629 $ 78,185 Accounts payable and capital expenditures 35,128 57,352 Accrued interest 28,483 50,037 Other operating accruals 42,970 58,459 $ 155,210 $ 244,033 |
Schedule of Other Liabilities | The following table provides details of the items included in "Other liabilities" on the Company's Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022: Dollars in thousands March 31, 2023 December 31, 2022 Below-market intangible liabilities, net $ 96,214 $ 97,935 Deferred revenue 90,979 87,325 Security deposits 29,020 28,521 Interest rate swap liability 11,927 4,269 Other 3,889 618 $ 232,029 $ 218,668 |
Notes and Bonds Payable (Tables
Notes and Bonds Payable (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The table below details the Company’s notes and bonds payable as of March 31, 2023 and December 31, 2022. MATURITY DATES BALANCE 1 AS OF EFFECTIVE INTEREST RATE Dollars in thousands 3/31/2023 12/31/2022 $1.5 billion Unsecured Credit Facility 10/25 $ 385,000 $ 385,000 5.76 % $350 million Unsecured Term Loan 2 7/23 349,494 349,114 5.72 % $200 million Unsecured Term Loan 5/24 199,728 199,670 5.72 % $300 million Unsecured Term Loan 10/25 299,941 299,936 5.72 % $150 million Unsecured Term Loan 6/26 149,532 149,495 5.72 % $200 million Unsecured Term Loan 7/27 199,397 199,362 5.72 % $300 million Unsecured Term Loan 1/28 297,974 297,869 5.72 % Senior Notes due 2025 5/25 249,206 249,115 4.12 % Senior Notes due 2026 8/26 573,410 571,587 4.94 % Senior Notes due 2027 7/27 480,578 479,553 4.76 % Senior Notes due 2028 1/28 296,995 296,852 3.85 % Senior Notes due 2030 2/30 567,863 565,402 5.30 % Senior Notes due 2030 3/30 296,479 296,385 2.72 % Senior Notes due 2031 3/31 295,671 295,547 2.25 % Senior Notes due 2031 3/31 636,819 632,693 5.13 % Mortgage notes payable 8/23-12/26 83,612 84,247 3.57%-4.84% $ 5,361,699 $ 5,351,827 . 1 Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of cash flow hedges included in accumulated other comprehensive income (loss) | As of March 31, 2023, the Company had 14 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: EXPIRATION DATE AMOUNT WEIGHTED January 15, 2024 $ 200,000 1.21 % May 1, 2026 100,000 2.15 % June 1, 2026 150,000 3.83 % December 1, 2026 150,000 3.84 % June 1, 2027 150,000 4.13 % December 1, 2027 250,000 3.79 % $ 1,000,000 3.17 % (GAIN)/LOSS RECOGNIZED IN (GAIN)/LOSS RECLASSIFIED FROM In thousands 2023 2022 2023 2022 Interest rate swaps $ 8,541 $ (5,159) Interest expense $ (2,433) $ 937 Settled treasury hedges — — Interest expense 107 107 Settled interest rate swaps — — Interest expense 42 42 $ 8,541 $ (5,159) Total interest expense $ (2,284) $ 1,086 |
Schedule of derivative instruments in statement of financial position, fair value | The table below presents the fair value of the Company's derivative financial instruments, as well as their classification on the Condensed Consolidated Balance Sheet as of March 31, 2023. BALANCE AT MARCH 31, 2023 In thousands BALANCE SHEET LOCATION FAIR VALUE Derivatives designated as hedging instruments Interest rate swaps Other liabilities $ (11,927) Interest rate swaps Other assets $ 9,767 Total derivatives designated as hedging instruments $ (2,160) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Reconciliation of common stock outstanding | The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the three months ended March 31, 2023 and the twelve months ended December 31, 2022: THREE MONTHS ENDED MARCH 31, 2023 TWELVE MONTHS ENDED DECEMBER 31, 2022 Balance, beginning of period 380,589,894 150,457,433 Issuance of common stock 3,130 229,618,304 Non-vested share-based awards, net of withheld shares 223,405 514,157 Balance, end of period 380,816,429 380,589,894 |
Earnings (loss) per share | The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2023 and 2022. THREE MONTHS ENDED MARCH 31, Dollars in thousands, except per share data 2023 2022 Weighted average common shares outstanding Weighted average common shares outstanding 380,796,773 150,834,888 Non-vested shares (1,956,353) (1,871,858) Weighted average common shares outstanding - basic 378,840,420 148,963,030 Weighted average common shares outstanding - basic 378,840,420 148,963,030 Dilutive effect of employee stock purchase plan — 88,234 Weighted average common shares outstanding - diluted 378,840,420 149,051,264 Net (loss) income attributable to common stockholders $ (87,125) $ 42,227 Dividends paid on nonvested share-based awards (605) (605) Net (loss) income applicable to common stockholders - basic $ (87,730) $ 41,622 Basic earnings per common share - net income $ (0.23) $ 0.28 Diluted earnings per common share - net income $ (0.23) $ 0.28 |
Summary of the activity under the incentive plan and restricted stock unit | A summary of the activity under the Company's share-based incentive plans for the three months ended March 31, 2023 and 2022 is included in the table below. THREE MONTHS ENDED MARCH 31, 2023 2022 Share-based awards, beginning of period 1,795,128 1,562,028 Granted 282,540 415,184 Vested (101,720) (24,365) Forfeited (20,503) (1,296) Share-based awards, end of period 1,955,445 1,951,551 The following is a summary of the RSU activity during the three months ended March 31, 2023: Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested, beginning of period 294,932 $ 33.04 Granted 165,174 22.55 Vested/Forfeited (17,606) 33.04 Probability adjustment of 2022 RSUs (79,250) 31.68 Non-vested, end of period 363,250 $ 28.57 |
Schedule of stock options, valuation assumptions | THREE MONTHS ENDED MARCH 31, Volatility 34.0 % Dividend assumption Accrued Expected term 3 years Risk-free rate 4.42 % Stock price (per share) $20.21 THREE MONTHS ENDED MARCH 31, Volatility 34.0 % Dividend assumption Accrued Expected term 3 years Risk-free rate 4.42 % Stock price (per share) $20.21 |
Summary of employee stock purchase plan activity | A summary of the activity under the ESPP for the three months ended March 31, 2023 and 2022 is included in the table below. THREE MONTHS ENDED MARCH 31, 2023 2022 Outstanding and exercisable, beginning of period 340,976 348,514 Granted — 255,960 Exercised (3,130) (10,553) Forfeited (21,421) (25,486) Expired (132,999) (140,633) Outstanding and exercisable, end of period 183,426 427,802 |
Schedule of unrecognized compensation cost, nonvested awards | The following table represents expected amortization of the Company's non-vested shares issued as of March 31, 2023: Dollars in millions FUTURE AMORTIZATION 2023 $ 10.5 2024 12.5 2025 10.8 2026 8.1 2027 2.4 2028 and thereafter 0.5 Total $ 44.8 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value And Carrying Values For Notes And Bonds Payable, Real Estate Notes Receivable, And Notes Receivable | The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable at March 31, 2023 and December 31, 2022. March 31, 2023 December 31, 2022 Dollars in millions CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE Notes and bonds payable 1 $ 5,361.7 $ 5,185.0 $ 5,351.8 $ 5,149.6 Real estate notes receivable 1 $ 147.3 $ 146.4 $ 99.6 $ 99.6 1 Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ in Thousands, shares in Millions, ft² in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 USD ($) ft² financing_receivable state variable_interest_entity joint_venture property building note_receivable shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Business Overview: | |||
Gross investment amount, total | $ 13,900,000 | ||
Number of real estate properties | property | 681 | ||
Number of owned real estate properties | property | 681 | ||
Number of states that the company owns real estate in, whole units | state | 35 | ||
Approximate square feet invested in by company | ft² | 39.9 | ||
Approximate square feet for which Nationwide property management services provided by company | ft² | 39.5 | ||
Number of buildings owned by joint venture with TIAA | building | 34 | ||
Number of variable interest entities | variable_interest_entity | 3 | ||
Equity ownership for consolidation (percent) | 100% | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of variable interest entities | variable_interest_entity | 3 | ||
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests [Abstract] | |||
Redeemable non-controlling interests | $ 2,000 | $ 2,014 | |
Leases [Abstract] | |||
Credit loss reserves | $ 5,196 | $ 0 | |
Number of recognized lease financial receivables | financing_receivable | 2 | ||
Income from financing receivables | $ 1,500 | ||
Number of real estate notes receivable | financing_receivable | 2 | ||
Financing receivable, nonaccrual | $ 54,100 | ||
Variable Interest Entity | |||
Business Overview: | |||
Number of variable interest entities | variable_interest_entity | 3 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of variable interest entities | variable_interest_entity | 3 | ||
Number of notes receivable | note_receivable | 2 | ||
Number of joint ventures | joint_venture | 1 | ||
Non-Controlling Interest Holders | Healthcare Trustof America Holdings L P | |||
Business Overview: | |||
Limited partner's capital, units outstanding (in shares) | shares | 4.7 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Limited partner's capital, units outstanding (in shares) | shares | 4.7 | ||
Limited partners ownership interest (in percent) | 1.20% | ||
Property Entities Not Determined to be VIEs | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Equity interest owned (percent) | 100% | ||
Healthcare Trustof America Holdings L P | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Equity interest owned (percent) | 98.80% | ||
Real Estate Properties Held in Joint Ventures | |||
Business Overview: | |||
Joint venture ownership (percent) | 44% | ||
Notes Receivable | |||
Leases [Abstract] | |||
Interest income | $ 2,000 | $ 2,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Consolidated balance sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Real estate assets held for sale, net | $ 12,056,264 | $ 12,412,354 |
Cash and cash equivalents | 49,941 | 60,961 |
Total assets | 13,568,884 | 13,849,631 |
Liabilities: | ||
Total equity | 7,358,628 | 7,571,076 |
Total liabilities and equity | 13,568,884 | $ 13,849,631 |
Variable interest entity | ||
Assets: | ||
Real estate assets held for sale, net | 48,079 | |
Cash and cash equivalents | 1,517 | |
Receivables and other assets | 2,339 | |
Total assets | 51,935 | |
Liabilities: | ||
Accrued expenses and other liabilities | 12,010 | |
Total equity | 39,925 | |
Total liabilities and equity | $ 51,935 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Variable interest entity (Details) $ in Thousands | Mar. 31, 2023 USD ($) property |
Variable Interest Entity [Line Items] | |
Number of owned real estate properties | property | 681 |
Houston, TX | Variable Interest Entity, Not Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Notes receivable, carrying amount | $ 30,839 |
Maximum exposure to loss | 31,150 |
Charlotte, NC | Variable Interest Entity, Not Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Notes receivable, carrying amount | 5,639 |
Maximum exposure to loss | 6,000 |
Texas | Variable Interest Entity, Not Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Joint venture, carrying amount | 66,038 |
Maximum exposure to loss | $ 66,038 |
Number of owned real estate properties | property | 7 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Notes Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accrued interest | $ 1,428 | ||
Allowance for credit loss | (5,196) | $ 0 | $ 0 |
Fair-value discount and fees | (4,542) | ||
Investment in financing receivable, net | 120,692 | $ 120,236 | |
Other Assets | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Investment in financing receivable, net | $ 147,326 | ||
Mezzanine Loans Texas | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
STATED INTEREST RATE | 8% | ||
MAXIMUM LOAN COMMITMENT | $ 54,119 | ||
REAL ESTATE NOTES RECEIVABLE, GROSS | $ 54,119 | ||
Mortgage Loan Texas | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
STATED INTEREST RATE | 7% | ||
MAXIMUM LOAN COMMITMENT | $ 31,150 | ||
REAL ESTATE NOTES RECEIVABLE, GROSS | $ 31,150 | ||
Mortgage Loan - North Carolina | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
STATED INTEREST RATE | 8% | ||
MAXIMUM LOAN COMMITMENT | $ 6,000 | ||
REAL ESTATE NOTES RECEIVABLE, GROSS | $ 6,000 | ||
Mortgage Loan Florida | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
STATED INTEREST RATE | 6% | ||
MAXIMUM LOAN COMMITMENT | $ 65,000 | ||
REAL ESTATE NOTES RECEIVABLE, GROSS | $ 19,367 | ||
Mortgage Loan California | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
STATED INTEREST RATE | 6% | ||
MAXIMUM LOAN COMMITMENT | $ 45,000 | ||
REAL ESTATE NOTES RECEIVABLE, GROSS | 45,000 | ||
Mortgage Loan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
MAXIMUM LOAN COMMITMENT | 147,150 | ||
REAL ESTATE NOTES RECEIVABLE, GROSS | $ 101,517 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Company's Allowance For Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 0 | $ 0 |
Credit loss reserves | 5,196 | 0 |
Ending balance | $ 5,196 | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Type of Revenue | $ 4,618 | $ 2,475 |
Parking income | ||
Disaggregation of Revenue [Line Items] | ||
Type of Revenue | 2,391 | 1,753 |
Management fee income | ||
Disaggregation of Revenue [Line Items] | ||
Type of Revenue | 1,973 | 655 |
Miscellaneous | ||
Disaggregation of Revenue [Line Items] | ||
Type of Revenue | $ 254 | $ 67 |
Merger with HTA - Narrative (De
Merger with HTA - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Nov. 02, 2022 | Jul. 20, 2022 | May 09, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||||
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 | ||||
Dividends declared per common share, during the period (in dollars per share) | $ 0.31 | |||||
Goodwill | $ 257,336,000 | $ 260,822,000 | $ 223,202,000 | |||
Goodwill expected to be tax deductible | $ 0 | |||||
Merger-related costs | $ 4,855,000 | $ 6,116,000 | ||||
Subsequent event | ||||||
Business Acquisition [Line Items] | ||||||
Refund of transfer taxes paid | $ 17,800,000 | |||||
HealthCare Realty Trust Incorporated | Common Class A | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (dollars per share) | $ 0.01 | |||||
HealthCare Realty Trust, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (dollars per share) | 0.01 | |||||
Healthcare Trust Of America, Inc | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (dollars per share) | $ 0.01 | |||||
Conversion Ratio | 1 | |||||
Dividends declared per common share, during the period (in dollars per share) | $ 4.82 |
Merger with HTA (Details)
Merger with HTA (Details) | 3 Months Ended | ||
Jul. 20, 2022 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) shares | Dec. 31, 2022 shares | |
Business Acquisition [Line Items] | |||
Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted (in shares) | 228,857,717 | 380,816,000 | 380,590,000 |
Implied shares of Legacy HR Common Stock issued (in shares) | 228,520,990 | ||
Adjusted closing price of Legacy HR Common Stock on July 20, 2022 (in dollars per share) | $ / shares | $ 24.37 | ||
Value of implied Legacy HR Common Stock issued | $ | $ 5,569,057,000 | ||
Fair value of Legacy HTA restricted stock awards attributable to pre-Merger services | $ | $ 7,406,000 | ||
Consideration transferred | $ | $ 5,576,463,000 | ||
Healthcare Trust Of America, Inc | |||
Business Acquisition [Line Items] | |||
Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted (in shares) | 228,520,990 | ||
Exchange ratio | 1 | ||
Common Stock, fractional (in shares) | 192 | ||
Healthcare Trust Of America, Inc | Restricted stock | |||
Business Acquisition [Line Items] | |||
Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted (in shares) | 336,535 | ||
Common Stock, withheld (in shares) | 215,764 |
Merger with HTA - Schedule of F
Merger with HTA - Schedule of Fair Values of the Assets Acquired And Liabilities Assumed (Details) - USD ($) $ in Thousands | Jul. 20, 2022 | Mar. 31, 2023 | Dec. 31, 2022 |
Real estate investments | |||
Land | $ 992,211 | ||
Buildings and improvements | 6,839,005 | ||
Lease intangible assets | 833,767 | ||
Financing lease right-of-use assets | 13,020 | ||
Construction in progress | 3,327 | ||
Land held for development | 46,538 | ||
Total real estate investments | 8,727,868 | ||
Assets held for sale, net | 699,496 | ||
Investments in unconsolidated joint ventures | 67,892 | ||
Cash and cash equivalents | 37,437 | ||
Restricted cash | 1,122,400 | ||
Operating lease right-of-use assets | 216,047 | ||
Other assets, net | 205,323 | ||
Total assets acquired | 11,076,463 | ||
LIABILITIES | |||
Notes and bonds payable | 3,991,300 | ||
Accounts payable and accrued liabilities | 1,244,944 | ||
Liabilities of assets held for sale | 24,738 | ||
Operating lease liabilities | 184,121 | ||
Financing lease liabilities | 9,865 | ||
Other liabilities | 191,666 | ||
Total liabilities assumed | 5,646,634 | ||
Net identifiable assets acquired | 5,429,829 | ||
Non-controlling interest | 110,702 | ||
Goodwill | $ 257,336 | $ 260,822 | $ 223,202 |
Weighted average amortization period for the acquired lease intangible assets | 6 years | ||
Gross contractual accounts receivable | $ 15,900 | ||
Gross contractual real estate notes receivable | 78,700 | ||
Gross contractual real estate notes receivable at fair value | 74,800 | ||
MEASUREMENT PERIOD ADJUSTMENTS | |||
Land | 6,285 | ||
Buildings and improvements | (121,413) | ||
Lease intangible assets | 1,847 | ||
Financing lease right-of-use assets | 3,146 | ||
Construction in progress | (6,744) | ||
Total real estate investments | (116,879) | ||
Assets held for sale, net | (7,946) | ||
Cash and cash equivalents | 11,403 | ||
Restricted cash | (1,247) | ||
Operating lease right-of-use assets | 17,786 | ||
Other assets, net | (3,840) | ||
Total assets acquired | (100,723) | ||
Accounts payable and accrued liabilities | 17,374 | ||
Liabilities of assets held for sale | (3,939) | ||
Operating lease liabilities | 10,173 | ||
Financing lease liabilities | (855) | ||
Other liabilities | (11,544) | ||
Total liabilities assumed | 11,209 | ||
Net identifiable assets acquired | (111,932) | ||
Goodwill | 111,932 | ||
Previously Reported | |||
Real estate investments | |||
Land | 985,926 | ||
Buildings and improvements | 6,960,418 | ||
Lease intangible assets | 831,920 | ||
Financing lease right-of-use assets | 9,874 | ||
Construction in progress | 10,071 | ||
Land held for development | 46,538 | ||
Total real estate investments | 8,844,747 | ||
Assets held for sale, net | 707,442 | ||
Investments in unconsolidated joint ventures | 67,892 | ||
Cash and cash equivalents | 26,034 | ||
Restricted cash | 1,123,647 | ||
Operating lease right-of-use assets | 198,261 | ||
Other assets, net | 209,163 | ||
Total assets acquired | 11,177,186 | ||
LIABILITIES | |||
Notes and bonds payable | 3,991,300 | ||
Accounts payable and accrued liabilities | 1,227,570 | ||
Liabilities of assets held for sale | 28,677 | ||
Operating lease liabilities | 173,948 | ||
Financing lease liabilities | 10,720 | ||
Other liabilities | 203,210 | ||
Total liabilities assumed | 5,635,425 | ||
Net identifiable assets acquired | 5,541,761 | ||
Non-controlling interest | 110,702 | ||
Goodwill | 145,404 | ||
Revision of Prior Period, Adjustment | |||
LIABILITIES | |||
Goodwill adjustment incomplete | $ 111,900 |
Real Estate Investments - Acqui
Real Estate Investments - Acquisitions (Details) $ in Thousands | 3 Months Ended | |
Mar. 10, 2023 USD ($) ft² | Mar. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | ||
Purchase price | $ 5,576,463 | |
Tampa, FL | Medical office building | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 31,500 | |
Cash consideration | 30,499 | |
Real estate | 30,596 | |
Other | $ (97) | |
Square footage | ft² | 115,867 |
Real Estate Investments - Uncon
Real Estate Investments - Unconsolidated Joint Venture Acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Equity Method Investments [Roll Forward] | ||
Investments in unconsolidated joint ventures, beginning of period | $ 327,248 | |
Equity loss recognized during the period | (780) | $ (345) |
Net LLC investments at the end of the period | 327,746 | |
Parking Garages | ||
Equity Method Investments [Roll Forward] | ||
Investments in unconsolidated joint ventures, beginning of period | 327,248,000 | 161,942 |
New investments during the period | 3,824,000 | 49,598 |
Equity loss recognized during the period | (780,000) | (345) |
Owner distributions | (2,546,000) | 0 |
Net LLC investments at the end of the period | $ 327,746,000 | $ 211,195 |
Parking Garages | Los Angeles, CA | Limited Liability Company One | ||
Equity Method Investments [Roll Forward] | ||
Joint venture, ownership (in percentage) | 40% |
Real Estate Investments - Dispo
Real Estate Investments - Dispositions (Details) $ in Thousands | 3 Months Ended | ||||||
Mar. 30, 2023 USD ($) ft² | Mar. 23, 2023 USD ($) ft² | Jan. 30, 2023 USD ($) ft² | Jan. 12, 2023 USD ($) ft² disposition_transaction property | Jul. 29, 2022 USD ($) | Mar. 31, 2023 USD ($) ft² property | Feb. 10, 2023 USD ($) ft² | |
Real Estate Dispositions [Line Items] | |||||||
COMPANY-FINANCED MORTGAGE NOTES | $ (45,000) | ||||||
Number of owned real estate properties | property | 681 | ||||||
Mortgage note | $ 45,000 | ||||||
Real Estate Dispositions | |||||||
Real Estate Dispositions [Line Items] | |||||||
SALE PRICE | $ 208,810 | ||||||
CLOSING ADJUSTMENTS | (14,639) | ||||||
NET PROCEEDS | 149,171 | ||||||
NET REAL ESTATE INVESTMENT | 215,920 | ||||||
Other (including receivables) | (1,596) | ||||||
GAIN/(IMPAIRMENT) | $ (20,153) | ||||||
SQUARE FOOTAGE | ft² | 451,471 | ||||||
Tampa Fl & Miami FL | |||||||
Real Estate Dispositions [Line Items] | |||||||
SALE PRICE | $ 93,250 | ||||||
CLOSING ADJUSTMENTS | (5,875) | ||||||
COMPANY-FINANCED MORTGAGE NOTES | 0 | ||||||
NET PROCEEDS | 87,375 | ||||||
NET REAL ESTATE INVESTMENT | 87,302 | ||||||
Other (including receivables) | (888) | ||||||
GAIN/(IMPAIRMENT) | $ 961 | ||||||
SQUARE FOOTAGE | ft² | 224,037 | ||||||
Number of owned real estate properties | property | 2 | ||||||
Number of property dispositions | disposition_transaction | 2 | ||||||
Dallas, TX | |||||||
Real Estate Dispositions [Line Items] | |||||||
SALE PRICE | $ 19,210 | ||||||
CLOSING ADJUSTMENTS | (141) | ||||||
COMPANY-FINANCED MORTGAGE NOTES | 0 | ||||||
NET PROCEEDS | 19,069 | ||||||
NET REAL ESTATE INVESTMENT | 18,986 | ||||||
Other (including receivables) | 43 | ||||||
GAIN/(IMPAIRMENT) | $ 40 | ||||||
SQUARE FOOTAGE | ft² | 36,691 | ||||||
Joint venture, ownership (in percentage) | 40% | ||||||
St. Louis, MO | |||||||
Real Estate Dispositions [Line Items] | |||||||
SALE PRICE | $ 350 | ||||||
CLOSING ADJUSTMENTS | (18) | ||||||
COMPANY-FINANCED MORTGAGE NOTES | 0 | ||||||
NET PROCEEDS | $ 332 | ||||||
NET REAL ESTATE INVESTMENT | 398 | ||||||
Other (including receivables) | $ 0 | ||||||
GAIN/(IMPAIRMENT) | $ (66) | ||||||
SQUARE FOOTAGE | ft² | 6,500 | ||||||
Los Angeles, CA | |||||||
Real Estate Dispositions [Line Items] | |||||||
SALE PRICE | 75,000 | $ 21,000 | |||||
CLOSING ADJUSTMENTS | (8,079) | (526) | |||||
COMPANY-FINANCED MORTGAGE NOTES | (45,000) | 0 | |||||
NET PROCEEDS | 21,921 | 20,474 | |||||
NET REAL ESTATE INVESTMENT | 88,624 | 20,610 | |||||
Other (including receivables) | (803) | 52 | |||||
GAIN/(IMPAIRMENT) | $ (20,900) | $ (188) | |||||
SQUARE FOOTAGE | ft² | 147,078 | 37,165 |
Real Estate Investments - Asset
Real Estate Investments - Assets Held for Sale (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 USD ($) property land_parcel | Dec. 31, 2022 USD ($) property | |
Long Lived Assets Held-for-sale [Line Items] | ||
Number of properties classified as held for sale | property | 3 | 1 |
Number of land parcels classified as held for sale | land_parcel | 1 | |
Impairment charges on net real estate assets held for sale | $ 5,100 | |
Land | 1,412,805 | $ 1,439,798 |
Building and improvements | 11,196,297 | 11,332,037 |
Land held for development | 69,575 | 74,265 |
Real estate investment property, at cost | 13,866,357 | 14,057,625 |
Accumulated depreciation | (1,810,093) | (1,645,271) |
Real estate assets held for sale, net | 12,056,264 | 12,412,354 |
Assets held for sale, net | 3,579 | 18,893 |
Liabilities of assets held for sale | 277 | 437 |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Land | 205 | 1,700 |
Building and improvements | 1,736 | 15,164 |
Lease intangibles | 2,242 | 1,986 |
Land held for development | 3,251 | 0 |
Real estate investment property, at cost | 7,434 | 18,850 |
Accumulated depreciation | (4,183) | 0 |
Real estate assets held for sale, net | 3,251 | 18,850 |
Other assets, net | 328 | 43 |
Assets held for sale, net | 3,579 | 18,893 |
Accounts payable and accrued liabilities | 277 | 282 |
Other liabilities | 0 | 155 |
Liabilities of assets held for sale | $ 277 | $ 437 |
Leases - Lease Income (Details)
Leases - Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Rental income | $ 324,093 | $ 138,489 |
Leases - Lessor Accounting (Det
Leases - Lessor Accounting (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Future Operating Lease Payments Receivable [Abstract] | |
2023 | $ 695,787 |
2024 | 833,006 |
2025 | 720,985 |
2026 | 620,118 |
2027 | 539,486 |
2028 and thereafter | 1,854,402 |
Total | $ 5,263,784 |
Leases - Ground Leases (Details
Leases - Ground Leases (Details) ft² in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) ft² property lease | Mar. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Number of properties subject to ground leases | 242 | |
Square feet subject to ground leases | ft² | 17.8 | |
Number of prepaid ground leases | lease | 75 | |
Amortization of prepaid rent | $ | $ 0.3 | $ 0.1 |
Number of non-prepaid ground leases | 167 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Ground lease, initial term | 40 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Ground lease, initial term | 99 years |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
OPERATING | ||
2023 | $ 11,188 | |
2024 | 15,239 | |
2025 | 14,827 | |
2026 | 14,863 | |
2027 | 14,933 | |
2028 and thereafter | 939,392 | |
Total undiscounted lease payments | 1,010,442 | |
Discount | (730,805) | |
Lease liabilities | 279,637 | $ 279,895 |
FINANCING | ||
2023 | 1,491 | |
2024 | 2,182 | |
2025 | 2,218 | |
2026 | 2,255 | |
2027 | 2,294 | |
2028 and thereafter | 396,398 | |
Total undiscounted lease payments | 406,838 | |
Discount | (333,645) | |
Lease liabilities | $ 73,193 | $ 72,939 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating lease cost | ||
Operating lease expense | $ 5,107 | $ 1,215 |
Variable lease expense | 2,136 | 1,024 |
Finance lease cost | ||
Amortization of right-of-use assets | 388 | 172 |
Interest on lease liabilities | 918 | 287 |
Total lease expense | 8,549 | 2,698 |
Other information | ||
Operating cash flows outflows related to operating leases | 5,960 | 2,797 |
Operating cash flows outflows related to financing leases | 553 | 258 |
Financing cash flows outflows related to financing leases | 101 | 257 |
Right-of-use assets obtained in exchange for new finance lease liabilities | $ 0 | $ 40,589 |
Weighted-average years remaining lease term (excluding renewal options) - operating leases | 47 years 4 months 24 days | 47 years 7 months 6 days |
Weighted-average years remaining lease term (excluding renewal options) - finance leases | 58 years 8 months 12 days | 61 years 10 months 24 days |
Weighted-average discount rate - operating leases | 5.80% | 5.60% |
Weighted-average discount rate - finance leases | 5% | 5% |
Other Assets and Liabilities -
Other Assets and Liabilities - Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Real estate notes receivable, net | $ 147,326 | $ 99,643 |
Straight-line rent receivables | 98,923 | 88,868 |
Prepaid assets | 88,694 | 81,900 |
Above-market intangible assets, net | 85,100 | 80,720 |
Accounts receivable, net | 48,676 | 47,498 |
Additional long-lived assets, net | 22,173 | 21,446 |
Interest rate swap assets | 9,767 | 14,512 |
Investment in securities | 6,011 | 6,011 |
Other receivables, net | 5,962 | 7,169 |
Debt issuance costs, net | 5,449 | 5,977 |
Project costs | 4,900 | 4,337 |
Net investment in lease | 1,828 | 1,828 |
Customer relationship intangible assets, net | 1,106 | 1,120 |
Other | 8,505 | 8,961 |
Other Assets | $ 534,420 | $ 469,990 |
Other Assets and Liabilities _2
Other Assets and Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued property taxes | $ 48,629 | $ 78,185 |
Accounts payable and capital expenditures | 35,128 | 57,352 |
Accrued interest | 28,483 | 50,037 |
Other operating accruals | 42,970 | 58,459 |
Accounts payable and accrued liabilities | $ 155,210 | $ 244,033 |
Other Assets and Liabilities _3
Other Assets and Liabilities - Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Below-market intangible liabilities, net | $ 96,214 | $ 97,935 |
Deferred revenue | 90,979 | 87,325 |
Security deposits | 29,020 | 28,521 |
Interest rate swap liability | 11,927 | 4,269 |
Other | 3,889 | 618 |
Other liabilities | $ 232,029 | $ 218,668 |
Notes and Bonds Payable (Detail
Notes and Bonds Payable (Details) - USD ($) | 1 Months Ended | ||
May 09, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 5,361,699,000 | $ 5,351,827,000 | |
Subsequent event | |||
Debt Instrument [Line Items] | |||
Extension period for maturity date | 1 year | ||
Debt fees | $ 400,000 | ||
Mortgage Notes Payable | Minimum | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 3.57% | ||
Mortgage Notes Payable | Maximum | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 4.84% | ||
Line of credit | $1.5 billion Unsecured Credit Facility | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 385,000,000 | 385,000,000 | |
Effective interest rate | 5.76% | ||
Credit facility | $ 1,500,000,000 | ||
Medium-term notes | $350 million Unsecured Term Loan due 2023, net of issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 349,494,000 | 349,114,000 | |
Effective interest rate | 5.72% | ||
Face amount | $ 350,000,000 | ||
Medium-term notes | $200 million Unsecured Term Loan due 2024, net of issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 199,728,000 | 199,670,000 | |
Effective interest rate | 5.72% | ||
Face amount | $ 200,000,000 | ||
Medium-term notes | $300 million Unsecured Term Loan due 2025, net of issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 299,941,000 | 299,936,000 | |
Effective interest rate | 5.72% | ||
Face amount | $ 300,000,000 | ||
Medium-term notes | $150 million Unsecured Term Loan due 2026, net of issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 149,532,000 | 149,495,000 | |
Effective interest rate | 5.72% | ||
Face amount | $ 150,000,000 | ||
Medium-term notes | $200 million Unsecured Term Loan due 2027, net of issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 199,397,000 | 199,362,000 | |
Effective interest rate | 5.72% | ||
Face amount | $ 200,000,000 | ||
Medium-term notes | $300 million Unsecured Term Loan due 2028, net of issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 297,974,000 | 297,869,000 | |
Effective interest rate | 5.72% | ||
Face amount | $ 300,000,000 | ||
Senior notes | Senior Notes due 2025, net of discount and issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 249,206,000 | 249,115,000 | |
Effective interest rate | 4.12% | ||
Senior notes | Senior Notes due 2026, net of discount and issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 573,410,000 | 571,587,000 | |
Effective interest rate | 4.94% | ||
Senior notes | Senior Notes due 2027, net of discount and issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 480,578,000 | 479,553,000 | |
Effective interest rate | 4.76% | ||
Senior notes | Senior Notes due 2028 | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 296,995,000 | 296,852,000 | |
Effective interest rate | 3.85% | ||
Senior notes | Senior notes due 2030, net of discount and issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 567,863,000 | 565,402,000 | |
Effective interest rate | 5.30% | ||
Senior notes | Senior notes due 2030, net of discount and issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 296,479,000 | 296,385,000 | |
Effective interest rate | 2.72% | ||
Senior notes | Senior Notes due 2031, net of discount and issuance costs | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 295,671,000 | 295,547,000 | |
Effective interest rate | 2.25% | ||
Senior notes | Senior Notes due 2031 | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 636,819,000 | 632,693,000 | |
Effective interest rate | 5.13% | ||
Mortgages | Mortgage Notes Payable | |||
Debt Instrument [Line Items] | |||
Notes and bonds payable | $ 83,612,000 | $ 84,247,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Cash Flow Hedges of Interest Rate Risk (Details) $ in Thousands | Mar. 31, 2023 USD ($) derivative |
Derivative [Line Items] | |
Number of instruments | derivative | 14 |
Interest Rate Swaps | Cash flow hedging | Designated as hedging instrument | |
Derivative [Line Items] | |
AMOUNT | $ 1,000,000 |
Weighted average interest rate (percent) | 3.17% |
Interest Rate Swap, Expiring January 15, 2024 | Cash flow hedging | Designated as hedging instrument | |
Derivative [Line Items] | |
AMOUNT | $ 200,000 |
Weighted average interest rate (percent) | 1.21% |
Interest Rate Swap, Expiring May 1, 2026 | Cash flow hedging | Designated as hedging instrument | |
Derivative [Line Items] | |
AMOUNT | $ 100,000 |
Weighted average interest rate (percent) | 2.15% |
Interest Rate Swap, Expiring June 1, 2026 | Cash flow hedging | Designated as hedging instrument | |
Derivative [Line Items] | |
AMOUNT | $ 150,000 |
Weighted average interest rate (percent) | 3.83% |
Interest Rate Swap, Expiring December 1, 2026 | Cash flow hedging | Designated as hedging instrument | |
Derivative [Line Items] | |
AMOUNT | $ 150,000 |
Weighted average interest rate (percent) | 3.84% |
Interest Rate Swap, Expiring June 1, 2027 | Cash flow hedging | Designated as hedging instrument | |
Derivative [Line Items] | |
AMOUNT | $ 150,000 |
Weighted average interest rate (percent) | 4.13% |
Interest Rate Swap, Expiring December 1, 2027 | Cash flow hedging | Designated as hedging instrument | |
Derivative [Line Items] | |
AMOUNT | $ 250,000 |
Weighted average interest rate (percent) | 3.79% |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value of Derivative Instruments on the Balance Sheet (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Designated as hedging instrument | Settled interest rate swaps | |
Derivative [Line Items] | |
Liability derivatives | $ (2,160) |
Other liabilities | Interest rate swaps | |
Derivative [Line Items] | |
Liability derivatives | (11,927) |
Other assets | Designated as hedging instrument | Interest rate swaps | |
Derivative [Line Items] | |
Liability derivatives | $ 9,767 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Effect of Cash Flow Hedging on AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative [Line Items] | ||
(Gain)/loss recognized in AOCI on Derivative | $ 8,541 | $ (5,159) |
(Gain) loss reclassified from AOCI into income | 2,284 | (1,086) |
Interest expense | ||
Derivative [Line Items] | ||
(Gain) loss reclassified from AOCI into income | (2,284) | 1,086 |
Interest rate swaps | ||
Derivative [Line Items] | ||
(Gain)/loss recognized in AOCI on Derivative | 8,541 | (5,159) |
Interest rate swaps | Interest expense | ||
Derivative [Line Items] | ||
(Gain) loss reclassified from AOCI into income | (2,433) | 937 |
Settled treasury hedges | ||
Derivative [Line Items] | ||
(Gain)/loss recognized in AOCI on Derivative | 0 | 0 |
Settled treasury hedges | Interest expense | ||
Derivative [Line Items] | ||
(Gain) loss reclassified from AOCI into income | 107 | 107 |
Settled interest rate swaps | ||
Derivative [Line Items] | ||
(Gain)/loss recognized in AOCI on Derivative | 0 | 0 |
Settled interest rate swaps | Interest expense | ||
Derivative [Line Items] | ||
(Gain) loss reclassified from AOCI into income | $ 42 | $ 42 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Derivative Instruments Designated as Cash Flow Hedges (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Derivative [Line Items] | |
Derivatives in net asset position | $ 7 |
Active Interest Rate Swap | |
Derivative [Line Items] | |
Interest rate cash flow hedge gain (loss) to be reclassified to interest expense during the next 12 months | 9.5 |
Settled Interest Rate Swaps | |
Derivative [Line Items] | |
Interest rate cash flow hedge gain (loss) to be reclassified to interest expense during the next 12 months | $ 0.6 |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Construction activity and development properties | $ 16.9 |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Beginning and Ending Common Stock Outstanding (Details) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of the beginning and ending common stock outstanding | ||
Balance, beginning of period (in shares) | 380,590,000 | |
Balance, end of period (in shares) | 380,816,000 | 380,590,000 |
Common Stock | ||
Reconciliation of the beginning and ending common stock outstanding | ||
Balance, beginning of period (in shares) | 380,589,894 | 150,457,433 |
Issuance of common stock (in shares) | 3,130 | 229,618,304 |
Nonvested share-based awards, net of withheld shares (in shares) | 223,405 | 514,157 |
Balance, end of period (in shares) | 380,816,429 | 380,589,894 |
Stockholders' Equity (Stock Tra
Stockholders' Equity (Stock Transactions - Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Jan. 04, 2023 | Nov. 02, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Class of Stock [Line Items] | ||||||
Dividends paid per common share, during the period (in dollars per share) | $ 0.31 | $ 0.31 | ||||
Dividends declared per common share, during the period (in dollars per share) | $ 0.31 | |||||
Award vesting period | 3 years | |||||
Operating Partnership Performance Units | ||||||
Class of Stock [Line Items] | ||||||
Percentage of restricted stock units | 43% | |||||
Weighted average grant date fair value (in dollars per share) | $ 15.85 | |||||
Award performance period | 3 years | |||||
Operating Partnership Performance Units | Performance conditions | ||||||
Class of Stock [Line Items] | ||||||
Percentage of restricted stock units | 57% | |||||
Weighted average grant date fair value (in dollars per share) | $ 20.21 | |||||
Operating Partnership Performance Units | Absolute TSR Component | ||||||
Class of Stock [Line Items] | ||||||
Weighted average grant date fair value (in dollars per share) | $ 12.24 | |||||
Operating Partnership Performance Units | Relative TSR Component | ||||||
Class of Stock [Line Items] | ||||||
Weighted average grant date fair value (in dollars per share) | 13.98 | |||||
Restricted stock | ||||||
Class of Stock [Line Items] | ||||||
Granted (in shares) | 165,174 | |||||
Restricted Stock Units (RSUs) | ||||||
Class of Stock [Line Items] | ||||||
Award vesting period | 5 years | |||||
Percentage of restricted stock units | 43% | |||||
Weighted average grant date fair value (in dollars per share) | $ 22.55 | |||||
Restricted Stock Units (RSUs) | Performance conditions | ||||||
Class of Stock [Line Items] | ||||||
Percentage of restricted stock units | 57% | |||||
Weighted average grant date fair value (in dollars per share) | $ 20.21 | |||||
Restricted Stock Units (RSUs) | Absolute TSR Component | ||||||
Class of Stock [Line Items] | ||||||
Weighted average grant date fair value (in dollars per share) | 24.23 | |||||
Restricted Stock Units (RSUs) | Relative TSR Component | ||||||
Class of Stock [Line Items] | ||||||
Weighted average grant date fair value (in dollars per share) | $ 27.84 | |||||
Executive Incentive Program | Operating Partnership Performance Units | Share-Based Payment Arrangement, Nonemployee | ||||||
Class of Stock [Line Items] | ||||||
Granted (in shares) | 448,249 | |||||
Award vesting period | 5 years | |||||
Executive Incentive Program | Non-vested Stock Award | ||||||
Class of Stock [Line Items] | ||||||
Granted (in dollars per share) | $ 5,400,000 | |||||
Granted (in shares) | 270,494 | |||||
Executive Incentive Program | Restricted Stock Units (RSUs) | ||||||
Class of Stock [Line Items] | ||||||
Granted (in dollars per share) | $ 3,700,000 | |||||
Granted (in shares) | 165,174 | |||||
Executive Incentive Program | Directors | Share-Based Payment Arrangement, Nonemployee | ||||||
Class of Stock [Line Items] | ||||||
Grant date fair value | $ 7,100,000 | |||||
Executive Incentive Program | Minimum | Non-vested Stock Award | ||||||
Class of Stock [Line Items] | ||||||
Award vesting period | 3 years | |||||
Executive Incentive Program | Maximum | Non-vested Stock Award | ||||||
Class of Stock [Line Items] | ||||||
Award vesting period | 8 years | |||||
Stock incentive plan | ||||||
Class of Stock [Line Items] | ||||||
Granted (in shares) | 282,540 | 415,184 | ||||
Stock incentive plan | Restricted stock | ||||||
Class of Stock [Line Items] | ||||||
Shares withheld to pay estimated withholding taxes (in shares) | 38,632 | 6,727 | ||||
Options under the Employee Stock Option Plan | ||||||
Class of Stock [Line Items] | ||||||
Weighted-average incremental shares of common stock excluded from the computation (in shares) | 49,322 | |||||
Options under the Employee Stock Option Plan | Operating Partnership Performance Units | ||||||
Class of Stock [Line Items] | ||||||
Nonvested shares (in shares) | 4,042,993 | |||||
Options under the Employee Stock Option Plan | Non-vested Stock Award | ||||||
Class of Stock [Line Items] | ||||||
Nonvested shares (in shares) | 401,937 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Amount remaining available for issuance under the new ATM | $ 750,000,000 |
Stockholders' Equity - Computat
Stockholders' Equity - Computation of Basic and Diluted Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Weighted average Common Shares outstanding | ||
Weighted average common shares outstanding (in shares) | 380,796,773 | 150,834,888 |
Non-vested shares (in shares) | (1,956,353) | (1,871,858) |
Weighted average common shares outstanding - basic (in shares) | 378,840,420 | 148,963,030 |
Dilutive effect of employee stock purchase plan (in shares) | 0 | 88,234 |
Weighted average common shares outstanding - diluted (in shares) | 378,840,420 | 149,051,264 |
Net income (loss) | $ (87,125) | $ 42,227 |
Dividends paid on nonvested share-based awards | (605) | (605) |
Net (loss) income applicable to common stockholders - basic | $ (87,730) | $ 41,622 |
Basic earnings per common share - net income (in dollars per share) | $ (0.23) | $ 0.28 |
Diluted earnings per common share- net income (in dollars per share) | $ (0.23) | $ 0.28 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Options, Valuation Assumptions (Details) | Jan. 04, 2023 $ / shares |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Volatility | 34% |
Expected term | 3 years |
Risk-free rate | 4.42% |
Stock price (in dollar per share) | $ 20.21 |
Operating Partnership Performance Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Volatility | 34% |
Expected term | 3 years |
Risk-free rate | 4.42% |
Stock price (in dollar per share) | $ 20.21 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Activity under Stock-Based Incentive Plans and Restricted Stock Unit (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restricted stock | ||
Summary of the activity under the incentive plans | ||
Share-based awards, beginning of period (in shares) | 294,932 | |
Granted (in shares) | 165,174 | |
Vested (in shares) | (17,606) | |
Revaluation of 2022 RSUs (net change) (in shares) | (79,250) | |
Share-based awards, ending of period (in shares) | 363,250 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Share-based awards, beginning of period, Weighted average grant date fair value | $ 33.04 | |
Granted, Weighted average grant date fair value (in dollar per share) | 22.55 | |
Vested, Weighted average grant date fair value (in dollar per share) | 33.04 | |
Probability adjustment, Weighted average grant date fair value (in dollar per share) | 31.68 | |
Share-based awards, ending of period, Weighted average grant date fair value | $ 28.57 | |
Stock incentive plan | ||
Summary of the activity under the incentive plans | ||
Share-based awards, beginning of period (in shares) | 1,795,128 | 1,562,028 |
Granted (in shares) | 282,540 | 415,184 |
Vested (in shares) | (101,720) | (24,365) |
Forfeited (net change) (in shares) | (20,503) | (1,296) |
Share-based awards, ending of period (in shares) | 1,955,445 | 1,951,551 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Activity under Employee Stock Purchase Plan (Details) - Employee stock purchase plan - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Summary of the Employee Stock Purchase Plan activity | ||
Outstanding and exercisable, beginning of period (in shares) | 340,976 | 348,514 |
Granted (in shares) | 0 | 255,960 |
Exercised (in shares) | (3,130) | (10,553) |
Forfeited (in shares) | (21,421) | (25,486) |
Expired (in shares) | (132,999) | (140,633) |
Outstanding and exercisable, end of period (in shares) | 183,426 | 427,802 |
Stockholders' Equity - Amortiza
Stockholders' Equity - Amortization of Compensation for Nonvested Shares (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Share-Based Payment Arrangement [Abstract] | |
2023 | $ 10.5 |
2024 | 12.5 |
2025 | 10.8 |
2026 | 8.1 |
2027 | 2.4 |
2028 and thereafter | 0.5 |
Total | $ 44.8 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
CARRYING VALUE | ||
Derivative [Line Items] | ||
Notes and bonds payable | $ 5,361.7 | $ 5,351.8 |
Real estate notes receivable | 147.3 | 99.6 |
FAIR VALUE | ||
Derivative [Line Items] | ||
Notes and bonds payable | 5,185 | 5,149.6 |
Real estate notes receivable | $ 146.4 | $ 99.6 |