Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36007 | |
Entity Registrant Name | PHYSICIANS REALTY TRUST | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-2519850 | |
Entity Address, Address Line One | 309 N. Water Street, Suite 500 | |
Entity Address, City or Town | Milwaukee | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53202 | |
City Area Code | 414 | |
Local Phone Number | 367-5600 | |
Title of 12(b) Security | Common stock, $0.01 par value per share | |
Trading Symbol | DOC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 202,559,482 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001574540 | |
Current Fiscal Year End Date | --12-31 | |
Operating Partnership | ||
Entity Information [Line Items] | ||
Entity File Number | 333-205034-01 | |
Entity Registrant Name | PHYSICIANS REALTY L.P. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0941870 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001583994 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investment properties: | ||
Land and improvements | $ 228,067 | $ 225,540 |
Building and improvements | 3,754,098 | 3,700,009 |
Tenant improvements | 55,524 | 53,931 |
Acquired lease intangibles | 397,135 | 390,450 |
Gross real estate property | 4,434,824 | 4,369,930 |
Accumulated depreciation | (578,274) | (540,928) |
Net real estate property | 3,856,550 | 3,829,002 |
Right-of-use lease assets, net | 138,864 | 127,933 |
Real estate loans receivable | 135,818 | 178,240 |
Investments in unconsolidated entities | 64,319 | 66,137 |
Net real estate investments | 4,195,551 | 4,201,312 |
Cash and cash equivalents | 2,612 | 2,355 |
Tenant receivables, net | 9,211 | 7,972 |
Other assets | 133,434 | 134,942 |
Total assets | 4,340,808 | 4,346,581 |
Liabilities: | ||
Credit facility | 404,838 | 583,323 |
Notes payable | 968,001 | 967,789 |
Mortgage debt | 59,354 | 83,341 |
Accounts payable | 2,709 | 6,348 |
Dividends and distributions payable | 49,138 | 46,272 |
Accrued expenses and other liabilities | 72,945 | 81,238 |
Lease liabilities | 74,121 | 63,290 |
Acquired lease intangibles, net | 6,402 | 6,096 |
Total liabilities | 1,637,508 | 1,837,697 |
Redeemable noncontrolling interest - Series A Preferred Units and partially owned properties | 27,875 | 27,900 |
Equity: | ||
Common shares, $0.01 par value, 500,000,000 common shares authorized, 202,555,703 and 189,975,396 common shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 2,026 | 1,900 |
Additional paid-in capital | 3,169,670 | 2,931,921 |
Accumulated deficit | (563,742) | (529,194) |
Accumulated other comprehensive (loss) income | (5,665) | 4,321 |
Total shareholders’ equity | 2,602,289 | 2,408,948 |
Noncontrolling interests: | ||
Operating Partnership | 72,771 | 71,697 |
Partially owned properties | 365 | 339 |
Total noncontrolling interests | 73,136 | 72,036 |
Total equity | 2,675,425 | 2,480,984 |
Total liabilities and equity | 4,340,808 | 4,346,581 |
Operating Partnership | ||
Investment properties: | ||
Land and improvements | 228,067 | 225,540 |
Building and improvements | 3,754,098 | 3,700,009 |
Tenant improvements | 55,524 | 53,931 |
Acquired lease intangibles | 397,135 | 390,450 |
Gross real estate property | 4,434,824 | 4,369,930 |
Accumulated depreciation | (578,274) | (540,928) |
Net real estate property | 3,856,550 | 3,829,002 |
Right-of-use lease assets, net | 138,864 | 127,933 |
Real estate loans receivable | 135,818 | 178,240 |
Investments in unconsolidated entities | 64,319 | 66,137 |
Net real estate investments | 4,195,551 | 4,201,312 |
Cash and cash equivalents | 2,612 | 2,355 |
Tenant receivables, net | 9,211 | 7,972 |
Other assets | 133,434 | 134,942 |
Total assets | 4,340,808 | 4,346,581 |
Liabilities: | ||
Credit facility | 404,838 | 583,323 |
Notes payable | 968,001 | 967,789 |
Mortgage debt | 59,354 | 83,341 |
Accounts payable | 2,709 | 6,348 |
Dividends and distributions payable | 49,138 | 46,272 |
Accrued expenses and other liabilities | 72,945 | 81,238 |
Lease liabilities | 74,121 | 63,290 |
Acquired lease intangibles, net | 6,402 | 6,096 |
Total liabilities | 1,637,508 | 1,837,697 |
Redeemable noncontrolling interest - Series A Preferred Units and partially owned properties | 27,875 | 27,900 |
Equity: | ||
General partner’s capital, 202,555,703 and 189,975,396 units issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 2,607,954 | 2,404,627 |
Limited partners’ capital, 5,663,554 and 5,666,109 units issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 72,771 | 71,697 |
Accumulated other comprehensive (loss) income | (5,665) | 4,321 |
Total partners’ capital | 2,675,060 | 2,480,645 |
Noncontrolling interests: | ||
Noncontrolling interest - partially owned properties | 365 | 339 |
Total capital | 2,675,425 | 2,480,984 |
Total liabilities and equity | $ 4,340,808 | $ 4,346,581 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 202,555,703 | 189,975,396 |
Operating Partnership | ||
Common stock, shares outstanding (in shares) | 202,555,703 | 189,975,396 |
General partners' capital account, units outstanding (in units) | 202,555,703 | 189,975,396 |
Limited partners' capital account, units issued (in units) | 5,663,554 | 5,666,109 |
Limited partners' capital account, units outstanding (in units) | 5,663,554 | 5,666,109 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Revenues: | |||
Rental revenues | $ 77,870 | $ 77,083 | |
Expense recoveries | 24,876 | 26,042 | |
Interest income on real estate loans and other | 4,682 | 2,243 | |
Total revenues | 107,428 | 105,368 | |
Expenses: | |||
Interest expense | 15,626 | 16,269 | |
General and administrative | 8,977 | 8,972 | |
Operating expenses | 30,963 | 32,208 | |
Depreciation and amortization | 36,747 | 36,449 | |
Total expenses | 92,313 | 93,898 | |
Income before equity in (loss) income of unconsolidated entities: | 15,115 | 11,470 | |
Equity in (loss) income of unconsolidated entities | (155) | 30 | |
Net income | 14,960 | 11,500 | |
Net income attributable to noncontrolling interests: | |||
Operating Partnership | (404) | (305) | |
Net income attributable to noncontrolling interests - partially owned properties | [1] | (142) | (138) |
Net income attributable to controlling interest | 14,414 | 11,057 | |
Preferred distributions | (317) | (284) | |
Net income attributable to common shareholders | $ 14,097 | $ 10,773 | |
Net income per share: | |||
Basic (in dollars per share) | $ 0.07 | $ 0.06 | |
Diluted (in dollars per share) | $ 0.07 | $ 0.06 | |
Weighted average common shares: | |||
Weighted average common shares - basic (in shares) | 196,211,728 | 182,672,863 | |
Weighted average common shares - diluted (in shares) | 202,842,340 | 188,497,308 | |
Dividends and distributions declared per common share and OP Unit (in dollars per share) | $ 0.23 | $ 0.23 | |
Operating Partnership | |||
Revenues: | |||
Rental revenues | $ 77,870 | $ 77,083 | |
Expense recoveries | 24,876 | 26,042 | |
Interest income on real estate loans and other | 4,682 | 2,243 | |
Total revenues | 107,428 | 105,368 | |
Expenses: | |||
Interest expense | 15,626 | 16,269 | |
General and administrative | 8,977 | 8,972 | |
Operating expenses | 30,963 | 32,208 | |
Depreciation and amortization | 36,747 | 36,449 | |
Total expenses | 92,313 | 93,898 | |
Income before equity in (loss) income of unconsolidated entities: | 15,115 | 11,470 | |
Equity in (loss) income of unconsolidated entities | (155) | 30 | |
Net income | 14,960 | 11,500 | |
Net income attributable to noncontrolling interests: | |||
Net income attributable to noncontrolling interests - partially owned properties | [2] | (142) | (138) |
Net income attributable to controlling interest | 14,818 | 11,362 | |
Preferred distributions | (317) | (284) | |
Net income attributable to common shareholders | $ 14,501 | $ 11,078 | |
Net income per share: | |||
Earnings per unit - basic (in dollars per share) | $ 0.07 | $ 0.06 | |
Earnings per unit - diluted (in dollars per share) | $ 0.07 | $ 0.06 | |
Weighted average common shares: | |||
Weighted average common units - basic (in shares) | 201,874,852 | 187,850,775 | |
Weighted average common units - diluted (in shares) | 202,842,340 | 188,497,308 | |
Distributions declared per common unit (dollars per share) | $ 0.23 | $ 0.23 | |
[1] | Includes amounts attributable to redeemable noncontrolling interests. | ||
[2] | Includes amounts attributable to redeemable noncontrolling interests. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net income | $ 14,960 | $ 11,500 |
Other comprehensive loss: | ||
Change in fair value of interest rate swap agreements, net | (9,986) | (3,476) |
Total other comprehensive loss | (9,986) | (3,476) |
Comprehensive income | 4,974 | 8,024 |
Comprehensive income attributable to noncontrolling interests - Operating Partnership | (132) | (210) |
Comprehensive income attributable to noncontrolling interests - partially owned properties | (142) | (138) |
Comprehensive income attributable to common shareholders | 4,700 | 7,676 |
Operating Partnership | ||
Net income | 14,960 | 11,500 |
Other comprehensive loss: | ||
Change in fair value of interest rate swap agreements, net | (9,986) | (3,476) |
Total other comprehensive loss | (9,986) | (3,476) |
Comprehensive income | 4,974 | 8,024 |
Comprehensive income attributable to noncontrolling interests - partially owned properties | (142) | (138) |
Comprehensive income attributable to common shareholders | $ 4,832 | $ 7,886 |
Consolidated Statement of Equit
Consolidated Statement of Equity - USD ($) $ in Thousands | Total | Par Value | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Shareholders’ Equity | Operating Partnership Noncontrolling Interest | Partially Owned Properties Noncontrolling Interest | Total Noncontrolling Interests |
Balance at Dec. 31, 2018 | $ 2,447,660 | $ 1,824 | $ 2,791,555 | $ (428,307) | $ 14,433 | $ 2,379,505 | $ 67,477 | $ 678 | $ 68,155 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net proceeds from sale of common shares | 31,020 | 17 | 31,003 | 31,020 | |||||
Restricted share award grants, net | 355 | 2 | 640 | (287) | 355 | ||||
Purchase of OP Units | (105) | (105) | (105) | ||||||
Dividends/distributions declared | (43,694) | (42,536) | (42,536) | (1,158) | (1,158) | ||||
Preferred distributions | (284) | (284) | (284) | ||||||
Distributions | (47) | (47) | (47) | ||||||
Change in market value of Redeemable Noncontrolling Interest | (290) | (290) | 0 | (290) | |||||
Adjustment for Noncontrolling Interests ownership in Operating Partnership | (3,476) | (3,476) | (3,476) | ||||||
Net income | 11,426 | 11,057 | 11,057 | 305 | 64 | 369 | |||
Adjustment for Noncontrolling Interests ownership in Operating Partnership | 0 | (149) | (149) | 149 | 149 | ||||
Balance at Mar. 31, 2019 | 2,442,326 | 1,843 | 2,822,520 | (460,357) | 10,957 | 2,374,963 | 66,668 | 695 | 67,363 |
Balance at Dec. 31, 2019 | 2,480,984 | 1,900 | 2,931,921 | (529,194) | 4,321 | 2,408,948 | 71,697 | 339 | 72,036 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net proceeds from sale of common shares | 239,232 | 124 | 239,108 | 239,232 | |||||
Restricted share award grants, net | (201) | 2 | 245 | (448) | (201) | ||||
Purchase of OP Units | (93) | (93) | (93) | ||||||
Dividends/distributions declared | (47,911) | (46,636) | (46,636) | (1,275) | (1,275) | ||||
Preferred distributions | (317) | (317) | (317) | ||||||
Distributions | (41) | (41) | (41) | ||||||
Change in market value of Redeemable Noncontrolling Interest | (980) | 581 | (1,561) | (980) | |||||
Adjustment for Noncontrolling Interests ownership in Operating Partnership | (9,986) | (9,986) | (9,986) | ||||||
Net income | 14,885 | 14,414 | 14,414 | 404 | 67 | 471 | |||
Adjustment for Noncontrolling Interests ownership in Operating Partnership | 0 | (2,038) | (2,038) | 2,038 | 2,038 | ||||
Balance at Mar. 31, 2020 | $ 2,675,425 | $ 2,026 | $ 3,169,670 | $ (563,742) | $ (5,665) | $ 2,602,289 | $ 72,771 | $ 365 | $ 73,136 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net income | $ 14,960 | $ 11,500 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 36,747 | 36,449 |
Amortization of deferred financing costs | 599 | 607 |
Amortization of lease inducements and above/below-market lease intangibles | 1,194 | 1,176 |
Straight-line rental revenue/expense | (3,731) | (4,762) |
Amortization of discount on unsecured senior notes | 155 | 148 |
Amortization of above market assumed debt | (16) | (16) |
Equity in loss (income) of unconsolidated entities | 155 | (30) |
Distributions from unconsolidated entities | 1,799 | 29 |
Change in fair value of derivative | (91) | 13 |
Provision for bad debts | 26 | 35 |
Non-cash share compensation | 2,996 | 2,653 |
Change in operating assets and liabilities: | ||
Tenant receivables | (1,660) | (2,076) |
Other assets | (4,644) | 647 |
Accounts payable | (3,639) | (373) |
Accrued expenses and other liabilities | (9,992) | (19,573) |
Net cash provided by operating activities | 34,858 | 26,427 |
Cash Flows from Investing Activities: | ||
Acquisition of investment properties, net | (11,881) | (4,303) |
Escrowed cash - acquisition deposits/earnest deposits | 0 | (150) |
Capital expenditures on investment properties | (4,208) | (12,953) |
Investment in real estate loans receivable | (6,591) | (20,028) |
Repayment of real estate loans receivable | 944 | 325 |
Leasing commissions | (340) | (552) |
Lease inducements | 0 | (5) |
Net cash used in investing activities | (22,076) | (37,666) |
Cash Flows from Financing Activities: | ||
Net proceeds from sale of common shares | 239,232 | 31,020 |
Proceeds from credit facility borrowings | 88,000 | 68,000 |
Repayment of credit facility borrowings | (267,000) | (47,000) |
Principal payments on mortgage debt | (23,990) | (8,908) |
Debt issuance costs | (7) | (8) |
OP Unit distributions - General Partner | (44,218) | (42,301) |
OP Unit distributions - Limited Partners | (1,275) | (1,167) |
Preferred OP Units distributions - Limited Partner | (317) | (284) |
Distributions to noncontrolling interests - partially owned properties | (144) | (148) |
Payments of employee taxes for withheld stock-based compensation shares | (2,713) | (1,973) |
Purchase of Limited Partner Units | (93) | (105) |
Net cash used in financing activities | (12,525) | (2,874) |
Net increase (decrease) in cash and cash equivalents | 257 | (14,113) |
Cash and cash equivalents, beginning of period | 2,355 | 19,161 |
Cash and cash equivalents, end of period | 2,612 | 5,048 |
Supplemental disclosure of cash flow information - interest paid during the period | 25,188 | 25,799 |
Supplemental disclosure of noncash activity - change in fair value of interest rate swap agreements | (9,986) | (3,476) |
Operating Partnership | ||
Cash Flows from Operating Activities: | ||
Net income | 14,960 | 11,500 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 36,747 | 36,449 |
Amortization of deferred financing costs | 599 | 607 |
Amortization of lease inducements and above/below-market lease intangibles | 1,194 | 1,176 |
Straight-line rental revenue/expense | (3,731) | (4,762) |
Amortization of discount on unsecured senior notes | 155 | 148 |
Amortization of above market assumed debt | (16) | (16) |
Equity in loss (income) of unconsolidated entities | 155 | (30) |
Distributions from unconsolidated entities | 1,799 | 29 |
Change in fair value of derivative | (91) | 13 |
Provision for bad debts | 26 | 35 |
Non-cash share compensation | 2,996 | 2,653 |
Change in operating assets and liabilities: | ||
Tenant receivables | (1,660) | (2,076) |
Other assets | (4,644) | 647 |
Accounts payable | (3,639) | (373) |
Accrued expenses and other liabilities | (9,992) | (19,573) |
Net cash provided by operating activities | 34,858 | 26,427 |
Cash Flows from Investing Activities: | ||
Acquisition of investment properties, net | (11,881) | (4,303) |
Escrowed cash - acquisition deposits/earnest deposits | 0 | (150) |
Capital expenditures on investment properties | (4,208) | (12,953) |
Investment in real estate loans receivable | (6,591) | (20,028) |
Repayment of real estate loans receivable | 944 | 325 |
Leasing commissions | (340) | (552) |
Lease inducements | 0 | (5) |
Net cash used in investing activities | (22,076) | (37,666) |
Cash Flows from Financing Activities: | ||
Net proceeds from sale of common shares | 239,232 | 31,020 |
Proceeds from credit facility borrowings | 88,000 | 68,000 |
Repayment of credit facility borrowings | (267,000) | (47,000) |
Principal payments on mortgage debt | (23,990) | (8,908) |
Debt issuance costs | (7) | (8) |
OP Unit distributions - General Partner | (44,218) | (42,301) |
OP Unit distributions - Limited Partners | (1,275) | (1,167) |
Preferred OP Units distributions - Limited Partner | (317) | (284) |
Distributions to noncontrolling interests - partially owned properties | (144) | (148) |
Payments of employee taxes for withheld stock-based compensation shares | (2,713) | (1,973) |
Purchase of Limited Partner Units | (93) | (105) |
Net cash used in financing activities | (12,525) | (2,874) |
Net increase (decrease) in cash and cash equivalents | 257 | (14,113) |
Cash and cash equivalents, beginning of period | 2,355 | 19,161 |
Cash and cash equivalents, end of period | 2,612 | 5,048 |
Supplemental disclosure of cash flow information - interest paid during the period | 25,188 | 25,799 |
Supplemental disclosure of noncash activity - change in fair value of interest rate swap agreements | $ (9,986) | $ (3,476) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Capital - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | Jan. 01, 2019 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Cumulative effect of changes in accounting standard | $ (147) | $ (239) | ||
Distributions | $ (41) | $ (47) | ||
Adjustment for Noncontrolling Interests ownership in Operating Partnership | (9,986) | (3,476) | ||
Net income | 14,885 | 11,426 | ||
Operating Partnership | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Beginning balance | 2,480,984 | 2,447,660 | ||
Cumulative effect of changes in accounting standard | (147) | (239) | ||
Net proceeds from sale of Trust common shares and issuance of common units | 239,232 | 31,020 | ||
Trust restricted share award grants, net | (201) | 355 | ||
Purchase of OP Units | (93) | (105) | ||
Conversion of OP Units | 0 | |||
OP Units - distributions | (47,911) | (43,694) | ||
Preferred distributions | (317) | (284) | ||
Distributions | (41) | (47) | ||
Change in market value of Redeemable Limited Partners | (980) | (290) | ||
Adjustment for Noncontrolling Interests ownership in Operating Partnership | (9,986) | (3,476) | ||
Net income | 14,885 | 11,426 | ||
Adjustments for Limited Partners ownership in Operating Partnership | 0 | 0 | ||
Ending balance | 2,675,425 | 2,442,326 | ||
Operating Partnership | Accumulated Other Comprehensive Income | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Beginning balance | 4,321 | 14,433 | ||
Adjustment for Noncontrolling Interests ownership in Operating Partnership | (9,986) | (3,476) | ||
Net income | 0 | |||
Ending balance | (5,665) | 10,957 | ||
Operating Partnership | General Partner | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Beginning balance | 2,404,627 | 2,365,072 | ||
Cumulative effect of changes in accounting standard | (147) | (239) | ||
Net proceeds from sale of Trust common shares and issuance of common units | 239,232 | 31,020 | ||
Trust restricted share award grants, net | (201) | 355 | ||
Conversion of OP Units | 0 | |||
OP Units - distributions | (46,636) | (42,536) | ||
Preferred distributions | (317) | (284) | ||
Change in market value of Redeemable Limited Partners | (980) | (290) | ||
Adjustment for Noncontrolling Interests ownership in Operating Partnership | 0 | |||
Net income | 14,414 | 11,057 | ||
Adjustments for Limited Partners ownership in Operating Partnership | (2,038) | (149) | ||
Ending balance | 2,607,954 | 2,364,006 | ||
Operating Partnership | Limited Partner | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Beginning balance | 71,697 | 67,477 | ||
Cumulative effect of changes in accounting standard | 0 | |||
Purchase of OP Units | (93) | (105) | ||
Conversion of OP Units | 0 | |||
OP Units - distributions | (1,275) | (1,158) | ||
Net income | 404 | 305 | ||
Adjustments for Limited Partners ownership in Operating Partnership | 2,038 | 149 | ||
Ending balance | 72,771 | 66,668 | ||
Operating Partnership | Total Partners’ Capital | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Beginning balance | 2,480,645 | 2,446,982 | ||
Cumulative effect of changes in accounting standard | $ (147) | $ (239) | ||
Net proceeds from sale of Trust common shares and issuance of common units | 239,232 | 31,020 | ||
Trust restricted share award grants, net | (201) | 355 | ||
Purchase of OP Units | (93) | (105) | ||
OP Units - distributions | (47,911) | (43,694) | ||
Preferred distributions | (317) | (284) | ||
Change in market value of Redeemable Limited Partners | (980) | (290) | ||
Adjustment for Noncontrolling Interests ownership in Operating Partnership | (9,986) | (3,476) | ||
Net income | 14,818 | 11,362 | ||
Adjustments for Limited Partners ownership in Operating Partnership | 0 | |||
Ending balance | 2,675,060 | 2,441,631 | ||
Partially Owned Properties Noncontrolling Interest | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Distributions | (41) | (47) | ||
Net income | 67 | 64 | ||
Partially Owned Properties Noncontrolling Interest | Operating Partnership | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Beginning balance | 339 | 678 | ||
Distributions | (41) | (47) | ||
Net income | 67 | 64 | ||
Adjustments for Limited Partners ownership in Operating Partnership | 0 | |||
Ending balance | $ 365 | $ 695 |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business The Trust was organized in the state of Maryland on April 9, 2013. As of March 31, 2020 , the Trust was authorized to issue up to 500,000,000 common shares of beneficial interest, par value $0.01 per share. The Trust filed a Registration Statement on Form S-11 with the Securities and Exchange Commission (the “Commission”) with respect to a proposed underwritten initial public offering (the “IPO”) and completed the IPO of its common shares and commenced operations on July 24, 2013. The Trust contributed the net proceeds from the IPO to the Operating Partnership. The Trust and the Operating Partnership are managed and operated as one entity, and the Trust has no significant assets other than its investment in the Operating Partnership. The Trust’s operations are conducted through the Operating Partnership and wholly-owned and majority-owned subsidiaries of the Operating Partnership. The Trust, as the general partner of the Operating Partnership, controls the Operating Partnership and consolidates the assets, liabilities, and results of operations of the Operating Partnership. Therefore, the assets and liabilities of the Trust and the Operating Partnership are the same. The Trust is a self-managed REIT formed primarily to acquire, selectively develop, own, and manage healthcare properties that are leased to physicians, hospitals, and healthcare delivery systems. ATM Program In November 2019, the Trust and the Operating Partnership entered into separate At Market Issuance Sales Agreements (the “Sales Agreements”) with each of KeyBanc Capital Markets Inc., Credit Agricole Securities (USA) Inc., BMO Capital Markets Corp., Raymond James & Associates, Inc., and Stifel, Nicolaus & Company, Incorporated, in their capacity as agents and as forward sellers (the “Agents”), pursuant to which the Trust may issue and sell, from time to time, its common shares having an aggregate offering price of up to $500.0 million , through the Agents (the “ATM Program”). The Sales Agreements contemplate that, in addition to the issuance and sale of the Trust’s common shares through the Agents, the Trust may also enter into one or more forward sales agreements from time to time in the future with each of KeyBanc Capital Markets, Inc., Credit Agricole Securities (USA) Inc., BMO Capital Markets Corp., Raymond James & Associates, Inc., and Stifel, Nicolaus & Company, Incorporated, or one of their respective affiliates. During the quarterly period ended March 31, 2020 , the Trust sold 12,352,700 common shares pursuant to the ATM Program, at a weighted average price of $19.57 per share, resulting in total net proceeds of approximately $239.3 million . As of March 31, 2020 , the Trust has $227.8 million remaining available under the ATM Program. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The accompanying unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods ended March 31, 2020 and 2019 pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. All such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements included in the Trust’s and the Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2019 , filed with the Commission on February 27, 2020. Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's consolidated financial position or results of operations. Except for the changes made as a result of the recently adopted accounting pronouncements discussed in this Note, the Company has consistently applied its accounting policies to all periods presented in these consolidated financial statements. Noncontrolling Interests As of March 31, 2020 , the Trust held a 97.3% interest in the Operating Partnership. As the sole general partner and the majority interest holder, the Trust consolidates the financial position and results of operations of the Operating Partnership. Redeemable Noncontrolling Interests - Series A Preferred Units and Partially Owned Properties In connection with the Hazelwood Medical Commons Transaction that occurred on January 9, 2018, there were 116,110 Series A Preferred Units outstanding, with an embedded derivative value of $5.3 million as of March 31, 2020 . In connection with the Company’s acquisitions of the medical office building, ambulatory surgery center, and hospital on December 29, 2015 located on the Great Falls Hospital campus in Great Falls, Montana, physicians affiliated with the sellers retained non-controlling interests which may, at the holders’ option, be redeemed at any time after May 1, 2023. Due to the redemption provision, which is outside of the control of the Trust, the Trust classifies the investment in the mezzanine section of its consolidated balance sheets. The Trust records the carrying amount of the redeemable noncontrolling interests at the greater of the carrying value or redemption value. Dividends and Distributions On March 19, 2020 , the Trust announced that its Board of Trustees authorized and the Trust declared a cash dividend of $0.23 per common share for the quarterly period ended March 31, 2020 . The dividend was paid on April 16, 2020 to common shareholders and OP Unit holders of record as of the close of business on April 2, 2020 . Tax Status of Dividends and Distributions The Company’s distributions of current and accumulated earnings and profits for U.S. federal income tax purposes generally are taxable to shareholders as ordinary income. Distributions in excess of these earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent thereof (non-dividend distributions) and thereafter as taxable gain. Any cash distributions received by an OP Unit holder in respect of its OP Units generally will not be taxable to such OP Unit holder for U.S. federal income tax purposes, to the extent that such distribution does not exceed the OP Unit holder’s basis in its OP Units. Any such distribution will instead reduce the OP Unit holder’s basis in its OP Units (and OP Unit holders will be subject to tax on the taxable income allocated to them by the Operating Partnership in respect of their OP Units when such income is earned by the Operating Partnership, with such income allocation increasing the OP Unit holders’ basis in their OP Units). Impairment of Intangible and Long-Lived Assets The Company periodically evaluates its long-lived assets, primarily consisting of investments in real estate, for impairment indicators or whenever events or changes in circumstances indicate that the recorded amount of an asset may not be fully recoverable. The Company did no t record any impairment charges in the three month periods ended March 31, 2020 or 2019 . Investments in Unconsolidated Entities On October 31, 2019 the Company contributed $8.9 million to acquire a 49% equity interest in MedCore Realty Eden Hill, LLC . This joint venture owns one medical office facility in Dover, Delaware. On November 22, 2019 the Company contributed two properties valued at $39.0 million and paid additional consideration of $17.0 million for a 12.3% equity interest in the PMAK MOB JV REOC, LLC (“ PMAK Joint Venture ”). This joint venture owns 59 medical office facilities located in 18 states. Real Estate Loans Receivable Real estate loans receivable consists of 12 mezzanine loans, two construction loans, and two term loans as of March 31, 2020 . Generally, each mezzanine loan is collateralized by an ownership interest in the respective borrower, each term loan is secured by a mortgage of a related medical office building, and the construction loans are secured by mortgages on the land and the improvements as constructed. In accordance with the adoption of ASU 2016-13 on January 1, 2020, the Company adjusted the opening balance of retained earnings by $0.1 million . The reserve for loan losses for the three months ended March 31, 2020 was not significant. Rental Revenue Rental revenue is recognized on a straight-line basis over the terms of the related leases when collectability is probable. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue for amounts more or less than amounts currently due from tenants. Amounts recognized in excess of amounts currently due from tenants are included in other assets and were approximately $77.9 million and $74.0 million as of March 31, 2020 and December 31, 2019 , respectively. If the Company determines that collectability of straight-line rents is not probable, income recognition is limited to the lesser of cash collected, or lease income reflected on a straight-line basis, plus variable rent when it becomes accruable. In accordance with ASC 842, if the collectability of a lease changes after the commencement date, any difference between lease income that would have been recognized and the lease payments shall be recognized as an adjustment to lease income. Bad debt recognized as an adjustment to rental revenues was $0.1 million and $0.4 million for the three months ended March 31, 2020 and 2019 , respectively. Rental revenue is adjusted by amortization of lease inducements and above- or below-market rents on certain leases. Lease inducements and above- or below-market rents are amortized on a straight-line basis over the remaining life of the lease. New Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which changes the impairment model for most financial instruments by requiring companies to recognize an allowance for expected losses, rather than incur losses as required currently by the other-than-temporary impairment model. ASU 2016-13 will apply to most financial assets measured at amortized cost and certain other instruments, including certain receivables, loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures (e.g., loan commitments). ASU 2016-13 requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis. ASU 2018-19 also clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of these receivables should be accounted for in accordance with ASC 842. ASU 2016-13 is effective for reporting periods beginning after December 15, 2019, with early adoption permitted, and will be applied as a cumulative adjustment to retained earnings as of January 1, 2020. The Company has adopted ASU 2016-13 as of the effective date, January 1, 2020, with a cumulative effect adjustment to the opening balance of retained earnings of $0.1 million . In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement; Changes to the Disclosure Requirements for Fair Value Measurements , which modifies the disclosure requirements on fair value measurements in Topic 820 as follows: (a) disclosure removals: (i) the amount of and reasons for transfers between Level 1 and Level 2; (ii) the policy for timing of transfers between levels; and (iii) the valuation process for Level 3 fair value measurements; (b) disclosure modifications: (i) no requirement to disclose the timing of liquidation unless the investee has communicated the timing to the reporting entity or announced the timing publicly; and (ii) for Level 3 fair value measurements, a narrative description of measurement uncertainty at the reporting date, not the sensitivity to future changes; and (c) disclosure additions: (i) for recurring Level 3 measurements, disclose the changes in unrealized gains and losses for the period included in OCI and the statement of comprehensive income; and (ii) for Level 3 fair value measurements in the table of significant input, disclose the range and weighted average of the significant unobservable inputs and the way it is calculated. The Company has adopted ASU 2018-13 as of the effective date, January 1, 2020, with no material impact to its consolidated financial statements. |
Investment Activity
Investment Activity | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Investment Activity | Investment Activity During the three months ended March 31, 2020 , the Company completed the acquisitions of two operating healthcare properties located in two states, for an aggregate investment of approximately $12.2 million . The Company also acquired one land parcel through conversion and satisfaction of a previously outstanding term loan. Additionally, the Company funded $6.6 million of previously committed construction loans resulting in total investment activity of approximately $19.0 million for the three months ended March 31, 2020 . Investment activity for the three months ended March 31, 2020 is summarized below: Investment Location Acquisition Date Investment Amount (in thousands) El Paso, Texas Land (1) (2) El Paso, TX January 17, 2020 $ 215 Westerville MOB (1) Westerville, OH February 28, 2020 10,683 TOPA Fort Worth (1) (3) Fort Worth, TX March 16, 2020 1,500 Loan Investments Various Various 6,591 $ 18,989 (1) The Company incurred an additional $0.4 million of capitalized costs on our investment activity for the three months ended March 31, 2020 . (2) This investment was funded through the conversion and satisfaction of a previously outstanding term loan of $1.3 million and additional cash consideration of $0.2 million . (3) This investment was funded through the conversion and satisfaction of a previously outstanding term loan of $47.0 million and additional cash consideration of $1.5 million . The following table summarizes the acquisition date fair values of the assets acquired and the liabilities assumed, which the Company determined using Level 2 and Level 3 inputs (in thousands): Land $ 2,527 Building and improvements 51,512 In-place lease intangibles 6,586 Above market in-place lease intangibles 118 Below market in-place lease intangibles (669 ) Right-of-use asset 444 Prepaid expenses (771 ) Receivables 316 Net assets acquired $ 60,063 Acquisition credits (1) 1,027 Aggregate purchase price $ 61,090 (1) Acquisition credits consisted primarily of tenant improvements and capital expenditures received as credits at the time of acquisition. |
Intangibles
Intangibles | 3 Months Ended |
Mar. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangibles | Intangibles The following is a summary of the carrying amount of intangible assets and liabilities as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Assets In-place leases $ 353,004 $ (149,482 ) $ 203,522 $ 346,438 $ (140,937 ) $ 205,501 Above-market leases 43,419 (17,852 ) 25,567 43,300 (16,856 ) 26,444 Leasehold interest 712 (316 ) 396 712 (302 ) 410 Right-of-use lease assets 141,428 (2,564 ) 138,864 129,976 (2,043 ) 127,933 Total $ 538,563 $ (170,214 ) $ 368,349 $ 520,426 $ (160,138 ) $ 360,288 Liabilities Below-market leases $ 14,685 $ (8,283 ) $ 6,402 $ 14,054 $ (7,958 ) $ 6,096 Lease liabilities 74,687 (566 ) 74,121 63,665 (375 ) 63,290 Total $ 89,372 $ (8,849 ) $ 80,523 $ 77,719 $ (8,333 ) $ 69,386 The following is a summary of acquired lease intangible amortization for the three month periods ended March 31, 2020 and 2019 , (in thousands): Three Months Ended 2020 2019 Amortization expense related to in-place leases $ 8,564 $ 9,247 Decrease of rental income related to above-market leases 996 1,115 Decrease of rental income related to leasehold interest 15 15 Increase of rental income related to below-market leases 363 550 Decrease of operating expense related to above-market ground leases (1) 35 35 Increase in operating expense related to below-market ground leases (1) 307 304 (1) Above- and below-market ground leases are included in the right-of-use asset as of January 1, 2019 due to the implementation of ASU 2016-02, Leases . Future aggregate net amortization of the acquired lease intangibles as of March 31, 2020 , is as follows (in thousands): Net Decrease in Revenue Net Increase in Expenses 2020 $ 1,899 $ 26,698 2021 2,473 33,239 2022 2,021 29,367 2023 1,729 26,472 2024 1,675 23,226 Thereafter 9,764 129,263 Total $ 19,561 $ 268,265 As of March 31, 2020 , the weighted average amortization period for asset lease intangibles and liability lease intangibles is 26 and 41 |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2020 | |
Other Assets, Unclassified [Abstract] | |
Other Assets | Other Assets Other assets consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, December 31, Straight line rent receivable, net $ 77,874 $ 73,992 Note receivable 22,705 22,694 Lease inducements, net 11,140 11,415 Prepaid expenses 8,293 8,000 Leasing commissions, net 8,035 7,986 Escrows 1,976 1,886 Interest rate swap — 4,933 Other 3,411 4,036 Total $ 133,434 $ 134,942 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following is a summary of debt as of March 31, 2020 and December 31, 2019 (in thousands): March 31, December 31, Fixed interest mortgage notes (1) $ 53,027 $ 76,897 Variable interest mortgage note (2) 6,462 6,581 Total mortgage debt 59,489 83,478 $850 million unsecured revolving credit facility bearing variable interest of LIBOR plus 1.10%, due September 2022 160,000 339,000 $400 million senior unsecured notes bearing fixed interest of 4.30%, due March 2027 400,000 400,000 $350 million senior unsecured notes bearing fixed interest of 3.95%, due January 2028 350,000 350,000 $250 million unsecured term borrowing bearing fixed interest of 2.32%, due June 2023 (3) 250,000 250,000 $150 million senior unsecured notes bearing fixed interest of 4.03% to 4.74%, due January 2023 to 2031 150,000 150,000 $75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027 75,000 75,000 Total principal 1,444,489 1,647,478 Unamortized deferred financing costs (7,086 ) (7,677 ) Unamortized discounts (5,329 ) (5,483 ) Unamortized fair value adjustments 119 135 Total debt $ 1,432,193 $ 1,634,453 (1) As of March 31, 2020 , fixed interest mortgage notes bear interest from 4.63% to 5.50% , due in 2021, 2022, and 2024, with a weighted average interest rate of 4.78% . As of December 31, 2019 , fixed interest mortgage notes bear interest from 3.00% to 5.50% , due in 2020, 2021, 2022, and 2024, with a weighted average interest rate of 4.43% . The notes are collateralized by four properties with a net book value of $112.1 million as of March 31, 2020 and five properties with a net book value of $170.2 million as of December 31, 2019 . (2) Variable interest mortgage note bears variable interest of LIBOR plus 2.75% , for an interest rate of 3.67% and 4.50% as of March 31, 2020 and December 31, 2019 , respectively. The note is due in 2028 and is collateralized by one property with a net book value of $8.6 million as of March 31, 2020 and December 31, 2019 . (3) The Trust’s borrowings under the term loan feature of the Credit Agreement bear interest at a rate which is determined by the Trust’s credit rating, currently equal to LIBOR + 1.25% . The Trust has entered into a pay-fixed receive-variable interest rate swap, fixing the LIBOR component of this rate at 1.07% . On August 7, 2018 , the Operating Partnership, as borrower, and the Trust, as guarantor, executed a Second Amended and Restated Credit Agreement (the “Credit Agreement”) which extended the maturity date of the revolving credit facility under the Credit Agreement to September 18, 2022 and reduced the interest rate margin applicable to borrowings. The Credit Agreement includes unsecured revolving credit facility of $850 million and contains a term loan feature of $250 million , bringing total borrowing capacity to $1.1 billion . The Credit Agreement also includes a swingline loan commitment for up to 10% of the maximum principal amount and provides an accordion feature allowing the Trust to increase borrowing capacity by up to an additional $500 million , subject to customary terms and conditions, resulting in a maximum borrowing capacity of $1.6 billion . The revolving credit facility under the Credit Agreement also includes a one -year extension option. Borrowings under the Credit Agreement bear interest on the outstanding principal amount at an adjusted LIBOR rate, which is based on the Trust’s investment grade rating under the Credit Agreement. As of March 31, 2020 , the Trust had an investment grade rating of Baa3 from Moody’s and BBB- from S&P. As such, borrowings under the revolving credit facility of the Credit Agreement accrue interest on the outstanding principal at a rate of LIBOR + 1.10% . The Credit Agreement includes a facility fee equal to 0.25% per annum, which is also determined by the Trust’s investment grade rating. On July 7, 2016, the Operating Partnership borrowed $250.0 million under the 7 -year term loan feature of the Credit Agreement. Pursuant to the Credit Agreement, borrowings under the term loan feature of the Credit Agreement bear interest on the outstanding principal amount at a rate which is determined by the Trust’s credit rating, currently equal to LIBOR + 1.25% . The Trust simultaneously entered into a pay-fixed receive-variable rate swap for the full borrowing amount, fixing the LIBOR component of the borrowing rate to 1.07% , for a current all-in fixed rate of 2.32% . Both the borrowing and pay-fixed receive-variable swap have a maturity date of June 10, 2023 . Base Rate Loans, Adjusted LIBOR Rate Loans, and Letters of Credit (each, as defined in the Credit Agreement) will be subject to interest rates, based upon the Trust’s investment grade rating as follows: Credit Rating Margin for Revolving Loans: Adjusted LIBOR Rate Loans and Letter of Credit Fee Margin for Revolving Loans: Base Rate Loans Margin for Term Loans: Adjusted LIBOR Rate Loans and Letter of Credit Fee Margin for Term Loans: Base Rate Loans At Least A- or A3 LIBOR + 0.775% — % LIBOR + 0.85% — % At Least BBB+ or Baa1 LIBOR + 0.825% — % LIBOR + 0.90% — % At Least BBB or Baa2 LIBOR + 0.90% — % LIBOR + 1.00% — % At Least BBB- or Baa3 LIBOR + 1.10% 0.10 % LIBOR + 1.25% 0.25 % Below BBB- or Baa3 LIBOR + 1.45% 0.45 % LIBOR + 1.65% 0.65 % The Credit Agreement contains financial covenants that, among other things, require compliance with leverage and coverage ratios and maintenance of minimum tangible net worth, as well as covenants that may limit the Trust’s and the Operating Partnership’s ability to incur additional debt, grant liens, or make distributions. The Company may, at any time, voluntarily prepay any revolving or term loan under the Credit Agreement in whole or in part without premium or penalty. As of March 31, 2020 , the Company was in compliance with all financial covenants related to the Credit Agreement. The Credit Agreement includes customary representations and warranties by the Trust and the Operating Partnership and imposes customary covenants on the Operating Partnership and the Trust. The Credit Agreement also contains customary events of default, and if an event of default occurs and continues, the Operating Partnership is subject to certain actions by the administrative agent, including without limitation, the acceleration of repayment of all amounts outstanding under the Credit Agreement. As of March 31, 2020 , the Company had $160.0 million of borrowings outstanding under its unsecured revolving credit facility, and $250.0 million of borrowings outstanding under the term loan feature of the Credit Agreement. As defined by the Credit Agreement, $690.0 million is available to borrow without adding additional properties to the unencumbered borrowing base of assets. Notes Payable As of March 31, 2020 , the Company had $975.0 million aggregate principal amount of senior notes issued and outstanding by the Operating Partnership, comprised of $15.0 million maturing in 2023, $25.0 million maturing in 2025, $70.0 million maturing in 2026, $425.0 million maturing in 2027, $395.0 million maturing in 2028, and $45.0 million maturing in 2031. Certain properties have mortgage debt that contains financial covenants. As of March 31, 2020 , the Trust was in compliance with all mortgage debt financial covenants. Scheduled principal payments due on consolidated debt as of March 31, 2020 , are as follows (in thousands): 2020 $ 1,489 2021 8,296 2022 180,825 2023 266,008 2024 23,669 Thereafter 964,202 Total Payments $ 1,444,489 As of March 31, 2020 , the Company had total consolidated indebtedness of approximately $1.4 billion . The weighted average interest rate on consolidated indebtedness was 3.65% (based on the 30-day LIBOR rate as of March 31, 2020 , of 0.92% ). For the three month periods ended March 31, 2020 and 2019 , the Company incurred interest expense on its debt, exclusive of deferred financing cost amortization, of $15.0 million and $15.7 million |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instrument Detail [Abstract] | |
Derivatives | Derivatives In the normal course of business, a variety of financial instruments are used to manage or hedge interest rate risk. The Company has implemented ASC 815, Derivatives and Hedging (“ASC 815”), which establishes accounting and reporting standards requiring that all derivatives, including certain derivative instruments embedded in other contracts, be recorded as either an asset or a liability measured at their fair value unless they qualify for a normal purchase or normal sales exception. When specific hedge accounting criteria are not met, ASC 815 requires that changes in a derivative’s fair value be recognized currently in earnings. Changes in the fair market values of the Company’s derivative instruments are recorded in the consolidated statements of income if such derivatives do not qualify for, or the Company does not elect to apply for, hedge accounting. As a result of the Company’s adoption of ASU 2017-12 as of January 1, 2019, the entire change in the fair value of its derivatives designated and qualified as cash flow hedges are recorded in AOCI on the consolidated balance sheets and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings. Additionally, as a result of the adoption ASU 2017-12, the Company no longer discloses the ineffective portion of the change in fair value of its derivatives financial instruments designated as hedges. To manage interest rate risk for certain of its variable-rate debt, the Company uses interest rate swaps as part of its risk management strategy. These derivatives are designed to mitigate the risk of future interest rate increases by providing a fixed interest rate for a limited, pre-determined period of time. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of March 31, 2020 , the Company had five outstanding interest rate swap contracts that are designated as cash flow hedges of interest rate risk. For presentational purposes, they are shown as one derivative due to the identical nature of their economic terms. The following table summarizes the location and aggregate fair value of the interest rate swaps on the Company’s consolidated balance sheets (in thousands): Total notional amount $ 250,000 Effective fixed interest rate (1) 2.32 % Effective date 7/7/2016 Maturity date 6/10/2023 Liability balance at March 31, 2020 (included in Other liabilities) $ (5,071 ) Asset balance at December 31, 2019 (included in Other assets) $ 4,933 (1) 1.07% effective swap rate plus 1.25% |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, December 31, Prepaid rent $ 20,555 $ 21,037 Real estate taxes payable 15,724 21,483 Accrued interest 5,777 16,038 Embedded derivative 5,269 4,290 Interest rate swap 5,071 — Accrued expenses 4,495 4,882 Security deposits 3,789 3,472 Tenant improvement allowance 2,173 2,155 Accrued incentive compensation 1,587 2,248 Contingent consideration 715 715 Other 7,790 4,918 Total $ 72,945 $ 81,238 |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation The Company follows ASC 718, Compensation - Stock Compensation (“ASC 718”), in accounting for its share-based payments. This guidance requires measurement of the cost of employee services received in exchange for stock compensation based on the grant-date fair value of the employee stock awards. This cost is recognized as compensation expense ratably over the employee’s requisite service period. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized when incurred. Share-based payments classified as liability awards are marked to fair value at each reporting period. Any common shares issued pursuant to the Company's incentive equity compensation and employee stock purchase plans will result in the Operating Partnership issuing OP Units to the Trust on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances. Certain of the Company’s employee stock awards vest only upon the achievement of performance targets. ASC 718 requires recognition of compensation cost only when achievement of performance conditions is considered probable. Consequently, the Company’s determination of the amount of stock compensation expense requires judgment in estimating the probability of achievement of these performance targets. Subsequent changes in actual experience are monitored and estimates are updated as information is available. In connection with the IPO, the Trust adopted the 2013 Equity Incentive Plan (“2013 Plan”), which made shares available for awards for participants. On April 30, 2019 , at the Annual Meeting of Shareholders of Physicians Realty Trust, the Trust’s shareholders approved the Amended and Restated Physicians Realty Trust 2013 Equity Incentive Plan. The amendment increased the number of common shares authorized for issuance under the 2013 Plan to a total of 7,000,000 common shares authorized for issuance. The 2013 Plan term was also extended to 2029. Restricted Common Shares Restricted common shares granted under the 2013 Plan are eligible for dividends as well as the right to vote. In the three month period ended March 31, 2020 , the Trust granted a total of 158,675 restricted common shares with a total value of $3.1 million to its officers and certain of its employees, which have a vesting period of one year . A summary of the status of the Trust’s non-vested restricted common shares as of March 31, 2020 and changes during the three month period then ended follow: Common Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2019 216,877 $ 17.67 Granted 158,675 19.30 Vested (168,757 ) 17.91 Forfeited (405 ) 17.29 Non-vested at March 31, 2020 206,390 $ 18.73 For all service awards, the Company records compensation expense for the entire award on a straight-line basis over the requisite service period. For the three month periods ending March 31, 2020 and 2019 , the Company recognized non-cash share compensation of $0.8 million . Unrecognized compensation expense at March 31, 2020 was $3.3 million . Restricted Share Units In March 2020 , under the 2013 Plan, the Trust granted restricted share units at a target level of 482,646 to its officers and certain of its employees and 38,858 to its trustees. Units granted to officers and certain employees under the Company’s long term incentive plan are subject to certain performance and market conditions and a three -year service period. Units were also granted to a certain officer subject to certain timing conditions and a five -year service period. Units granted to trustees are subject to certain timing conditions and a two -year service period. Each restricted share unit contains one dividend equivalent. Each recipient will accrue dividend equivalents on awarded share units equal to the cash dividend that would have been paid on the awarded share unit had the awarded share unit been an issued and outstanding common share on the record date for the dividend. Approximately 40% of the restricted share units issued to officers and certain employees under the Company’s long term incentive plan in 2020 vest based on two certain market conditions. The market conditions were valued with the assistance of independent valuation specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $26.80 and $37.09 per unit for the March 2020 grant using the following assumptions: Volatility 20.1 % Dividend assumption reinvested Expected term in years 2.83 years Risk-free rate 0.84 % Share price (per share) $ 19.30 The remaining 60% of the restricted share units issued to officers and certain employees under the Company’s long term incentive plan, and 100% of other restricted share units issued to a certain officer and trustees vest based upon certain performance or timing conditions. With respect to the performance conditions of the March 2020 grants, the grant date fair value of $19.30 per unit was based on the share price at the date of grant. The combined weighted average grant date fair value of the March 2020 restricted share units issued to officers and certain employees is $24.36 per unit. The following is a summary of the activity in the Trust’s restricted share units during the three months ended March 31, 2020 : Executive Awards Trustee Awards Restricted Share Units Weighted Average Grant Date Fair Value Restricted Share Weighted Non-vested at December 31, 2019 654,752 $ 22.99 67,297 $ 16.72 Granted 482,646 21.64 38,858 19.30 Vested (173,259 ) (1) 29.34 (46,335 ) 16.19 Non-vested at March 31, 2020 964,139 $ 21.17 59,820 $ 18.81 (1) Restricted units vested by Company executives in 2020 resulted in the issuance of 147,765 common shares, less 65,513 common shares withheld to cover minimum withholding tax obligations, for multiple employees. For the three month periods ending March 31, 2020 and 2019 , the Company recognized non-cash share compensation of $2.1 million and $1.8 million , respectively. Unrecognized compensation expense at March 31, 2020 was $15.3 million . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurement (“ASC 820”), requires certain assets and liabilities be reported and/or disclosed at fair value in the financial statements and provides a framework for establishing that fair value. The framework for determining fair value is based on a hierarchy that prioritizes the valuation techniques and inputs used to measure fair value. In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset. These Level 3 fair value measurements are based primarily on management’s own estimates using pricing models, discounted cash flow methodologies, or similar techniques taking into account the characteristics of the asset or liability. In instances where inputs used to measure fair value fall into different levels of the fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. As part of the Company’s acquisition process, Level 3 inputs are used to measure the fair value of the assets acquired and liabilities assumed. The Company’s derivative instruments as of March 31, 2020 consist of one embedded derivative as detailed in the Redeemable Noncontrolling Interests - Series A Preferred Units and Partially Owned Properties section of Note 2 (Summary of Significant Accounting Policies) and five interest rate swaps. For presentational purposes, the Company’s interest rate swaps are shown as a single derivative due to the identical nature of their economic terms, as detailed in the Derivative Instruments section of Note 7 (Derivatives) of this report and Note 2 (Summary of Significant Accounting Policies) of Part II, Item 8 (Financial Statements and Supplementary Data) of our Annual Report. Neither the embedded derivative nor the interest rate swaps are traded on an exchange. The Company’s derivative assets and liabilities are recorded at fair value based on a variety of observable inputs including contractual terms, interest rate curves, yield curves, measure of volatility, and correlations of such inputs. The Company measures its derivatives at fair value on a recurring basis. The fair values are based on Level 2 inputs described above. The Company considers its own credit risk, as well as the credit risk of its counterparties, when evaluating the fair value of its derivatives. The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. This generally includes assets subject to impairment. There were no assets measured at fair value as of March 31, 2020 . The carrying amounts of cash and cash equivalents, tenant receivables, payables, and accrued interest are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for real estate loans receivable and mortgage debt are estimated based on rates currently prevailing for similar instruments of similar maturities and are based primarily on Level 2 inputs. The following table presents the fair value of the Company’s financial instruments (in thousands): March 31, December 31, Carrying Amount Fair Value Carrying Amount Fair Value Assets: Real estate loans receivable $ 135,818 $ 138,320 $ 178,240 $ 178,095 Notes receivable $ 22,705 $ 22,705 $ 22,694 $ 22,694 Derivative assets $ — $ — $ 4,933 $ 4,933 Liabilities: Credit facility $ (410,000 ) $ (410,000 ) $ (589,000 ) $ (589,000 ) Notes payable $ (975,000 ) $ (1,082,468 ) $ (975,000 ) $ (1,003,385 ) Mortgage debt $ (59,608 ) $ (58,733 ) $ (83,613 ) $ (85,110 ) Derivative liabilities $ (10,340 ) $ (10,340 ) $ (4,290 ) $ (4,290 ) |
Tenant Operating Leases
Tenant Operating Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Tenant Operating Leases | Tenant Operating Leases The Company is a lessor of medical office buildings and other healthcare facilities. Leases have expirations from 2020 through 2039 . As of March 31, 2020 , the future minimum rental payments on non-cancelable leases, exclusive of expense recoveries, were as follows (in thousands): 2020 $ 224,645 2021 296,531 2022 289,574 2023 281,441 2024 269,574 Thereafter 1,082,993 Total $ 2,444,758 |
Rent Expense
Rent Expense | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Rent Expense | Rent Expense The Company leases the rights to parking structures at three of its properties, the air space above one property, and the land upon which 81 of its properties are located from third party land owners pursuant to separate leases. In addition, the Company has 11 corporate leases, primarily for office space. The Company’s leases include both fixed and variable rental payments and may also include escalation clauses and renewal options. These leases have terms of up to 87 years remaining, excluding extension options, with a weighted average remaining term of 44 years. Because the rate implicit in each lease is not readily determinable, the Company uses a rate based on its incremental borrowing rate to determine the present value of the lease payments. The weighted average discount rate was 4.4% as of March 31, 2020 . There are no operating leases that have not yet commenced that would have a significant impact on its consolidated balance sheets. As of March 31, 2020 , the future minimum lease obligations under non-cancelable parking, air, ground, and corporate leases, were as follows (in thousands): 2020 $ 2,530 2021 3,486 2022 3,456 2023 3,448 2024 3,431 Thereafter 172,624 Total undiscounted lease payments $ 188,975 Less: Interest (114,854 ) Present value of lease liabilities $ 74,121 Lease costs consisted of the following for the three months ended March 31, 2020 (in thousands): Three Months Ended March 31, 2020 Operating lease cost $ 509 Variable lease cost 250 Total lease cost $ 759 |
Credit Concentration
Credit Concentration | 3 Months Ended |
Mar. 31, 2020 | |
Concentration Risks, Types, No Concentration Percentage [Abstract] | |
Credit Concentration | Credit Concentration The Company uses annualized base rent (“ABR”) as its credit concentration metric. ABR is calculated by multiplying contractual base rent for the month ended March 31, 2020 by 12, excluding the impact of concessions and straight-line rent. The following table summarizes certain information about the Company’s top five tenant credit concentrations as of March 31, 2020 (in thousands): Tenant Total ABR Percent of ABR CommonSpirit - CHI - Nebraska $ 16,865 5.6 % Northside Hospital 14,176 4.7 % UofL Health - Louisville, Inc. 11,862 4.0 % US Oncology 9,520 3.2 % Baylor Scott and White Health 7,960 2.7 % Remaining portfolio 238,672 79.8 % Total $ 299,055 100.0 % ABR collected from the Company’s top five tenant relationships comprises 20.2% of its total ABR for the period ending March 31, 2020 . Total ABR from CommonSpirit Health affiliated tenants totals 16.6% , including the affiliates disclosed above. The following table summarizes certain information about the Company’s top five geographic concentrations as of March 31, 2020 (in thousands): State Total ABR Percent of ABR Texas $ 48,862 16.3 % Georgia 26,078 8.7 % Indiana 21,933 7.3 % Nebraska 18,175 6.1 % Minnesota 17,695 5.9 % Other 166,312 55.7 % Total $ 299,055 100.0 % |
Earnings Per Share and Earnings
Earnings Per Share and Earnings Per Unit | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share and Earnings Per Unit | Earnings Per Share and Earnings Per Unit The following table shows the amounts used in computing the Trust’s basic and diluted earnings per share (in thousands, except share and per share data): Three Months Ended 2020 2019 Numerator for earnings per share - basic: Net income $ 14,960 $ 11,500 Net income attributable to noncontrolling interests: Operating Partnership (404 ) (305 ) Partially owned properties (142 ) (138 ) Preferred distributions (317 ) (284 ) Numerator for earnings per share - basic $ 14,097 $ 10,773 Numerator for earnings per share - diluted: Numerator for earnings per share - basic $ 14,097 $ 10,773 Operating Partnership net income 404 305 Numerator for earnings per share - diluted $ 14,501 $ 11,078 Denominator for earnings per share - basic and diluted: Weighted average number of shares outstanding - basic 196,211,728 182,672,863 Effect of dilutive securities: Noncontrolling interest - Operating Partnership units 5,663,124 5,177,912 Restricted common shares 87,322 104,784 Restricted share units 880,166 541,749 Denominator for earnings per share - diluted: 202,842,340 188,497,308 Earnings per share - basic $ 0.07 $ 0.06 Earnings per share - diluted $ 0.07 $ 0.06 The following table shows the amounts used in computing the Operating Partnership’s basic and diluted earnings per unit (in thousands, except unit and per unit data): Three Months Ended 2020 2019 Numerator for earnings per unit - basic and diluted: Net income $ 14,960 $ 11,500 Net income attributable to noncontrolling interests - partially owned properties (142 ) (138 ) Preferred distributions (317 ) (284 ) Numerator for earnings per unit - basic and diluted $ 14,501 $ 11,078 Denominator for earnings per unit - basic and diluted: Weighted average number of units outstanding - basic 201,874,852 187,850,775 Effect of dilutive securities: Restricted common shares 87,322 104,784 Restricted share units 880,166 541,749 Denominator for earnings per unit - diluted 202,842,340 188,497,308 Earnings per unit - basic $ 0.07 $ 0.06 Earnings per unit - diluted $ 0.07 $ 0.06 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 15, 2020 , the Company funded a $13.0 million mezzanine loan on a new construction of a healthcare company building in Columbus, Ohio. The loan bears interest at a rate of 8.5% and matures in 2024. Since March 31, 2020 , we provided the final funding of $4.6 million and substantial completion has taken place on our Denton construction loan. This 30,000 square foot cancer center in Denton, Texas is 100% leased to Physician Reliance, LLC (McKesson Corporation - Moody’s: Baa2) for 10 -years. The loan includes a fixed purchase option of $15.5 million which matches the loan amount and is exercisable in May 2021. As of April 30, 2020, a Certificate of Occupancy has been received with rent commencing in May 2020. With construction substantially complete, the interest rate on the loan increases from 5.5% to 6.25% . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests As of March 31, 2020 , the Trust held a 97.3% interest in the Operating Partnership. As the sole general partner and the majority interest holder, the Trust consolidates the financial position and results of operations of the Operating Partnership. Redeemable Noncontrolling Interests - Series A Preferred Units and Partially Owned Properties |
Dividends and Distributions | The Company’s distributions of current and accumulated earnings and profits for U.S. federal income tax purposes generally are taxable to shareholders as ordinary income. Distributions in excess of these earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent thereof (non-dividend distributions) and thereafter as taxable gain. Any cash distributions received by an OP Unit holder in respect of its OP Units generally will not be taxable to such OP Unit holder for U.S. federal income tax purposes, to the extent that such distribution does not exceed the OP Unit holder’s basis in its OP Units. Any such distribution will instead reduce the OP Unit holder’s basis in its OP Units (and OP Unit holders will be subject to tax on the taxable income allocated to them by the Operating Partnership in respect of their OP Units when such income is earned by the Operating Partnership, with such income allocation increasing the OP Unit holders’ basis in their OP Units). |
Impairment of Intangible and Long-Lived Assets | Impairment of Intangible and Long-Lived Assets |
Real Estate Loans Receivable | Real Estate Loans Receivable Real estate loans receivable consists of 12 mezzanine loans, two construction loans, and two term loans as of March 31, 2020 |
Rental Revenue | Rental Revenue Rental revenue is recognized on a straight-line basis over the terms of the related leases when collectability is probable. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue for amounts more or less than amounts currently due from tenants. Amounts recognized in excess of amounts currently due from tenants are included in other assets and were approximately $77.9 million and $74.0 million as of March 31, 2020 and December 31, 2019 , respectively. If the Company determines that collectability of straight-line rents is not probable, income recognition is limited to the lesser of cash collected, or lease income reflected on a straight-line basis, plus variable rent when it becomes accruable. In accordance with ASC 842, if the collectability of a lease changes after the commencement date, any difference between lease income that would have been recognized and the lease payments shall be recognized as an adjustment to lease income. Bad debt recognized as an adjustment to rental revenues was $0.1 million and $0.4 million for the three months ended March 31, 2020 and 2019 , respectively. Rental revenue is adjusted by amortization of lease inducements and above- or below-market rents on certain leases. Lease inducements and above- or below-market rents are amortized on a straight-line basis over the remaining life of the lease. |
New Accounting Pronouncements | New Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which changes the impairment model for most financial instruments by requiring companies to recognize an allowance for expected losses, rather than incur losses as required currently by the other-than-temporary impairment model. ASU 2016-13 will apply to most financial assets measured at amortized cost and certain other instruments, including certain receivables, loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures (e.g., loan commitments). ASU 2016-13 requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis. ASU 2018-19 also clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of these receivables should be accounted for in accordance with ASC 842. ASU 2016-13 is effective for reporting periods beginning after December 15, 2019, with early adoption permitted, and will be applied as a cumulative adjustment to retained earnings as of January 1, 2020. The Company has adopted ASU 2016-13 as of the effective date, January 1, 2020, with a cumulative effect adjustment to the opening balance of retained earnings of $0.1 million . In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement; Changes to the Disclosure Requirements for Fair Value Measurements , which modifies the disclosure requirements on fair value measurements in Topic 820 as follows: (a) disclosure removals: (i) the amount of and reasons for transfers between Level 1 and Level 2; (ii) the policy for timing of transfers between levels; and (iii) the valuation process for Level 3 fair value measurements; (b) disclosure modifications: (i) no requirement to disclose the timing of liquidation unless the investee has communicated the timing to the reporting entity or announced the timing publicly; and (ii) for Level 3 fair value measurements, a narrative description of measurement uncertainty at the reporting date, not the sensitivity to future changes; and (c) disclosure additions: (i) for recurring Level 3 measurements, disclose the changes in unrealized gains and losses for the period included in OCI and the statement of comprehensive income; and (ii) for Level 3 fair value measurements in the table of significant input, disclose the range and weighted average of the significant unobservable inputs and the way it is calculated. The Company has adopted ASU 2018-13 as of the effective date, January 1, 2020, with no material impact to its consolidated financial statements. |
Investment Activity (Tables)
Investment Activity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Real estate held for sale | Investment activity for the three months ended March 31, 2020 is summarized below: Investment Location Acquisition Date Investment Amount (in thousands) El Paso, Texas Land (1) (2) El Paso, TX January 17, 2020 $ 215 Westerville MOB (1) Westerville, OH February 28, 2020 10,683 TOPA Fort Worth (1) (3) Fort Worth, TX March 16, 2020 1,500 Loan Investments Various Various 6,591 $ 18,989 (1) The Company incurred an additional $0.4 million of capitalized costs on our investment activity for the three months ended March 31, 2020 . (2) This investment was funded through the conversion and satisfaction of a previously outstanding term loan of $1.3 million and additional cash consideration of $0.2 million . (3) This investment was funded through the conversion and satisfaction of a previously outstanding term loan of $47.0 million and additional cash consideration of $1.5 million . |
Schedule of preliminary purchase price allocations of assets acquired and liabilities assumed | The following table summarizes the acquisition date fair values of the assets acquired and the liabilities assumed, which the Company determined using Level 2 and Level 3 inputs (in thousands): Land $ 2,527 Building and improvements 51,512 In-place lease intangibles 6,586 Above market in-place lease intangibles 118 Below market in-place lease intangibles (669 ) Right-of-use asset 444 Prepaid expenses (771 ) Receivables 316 Net assets acquired $ 60,063 Acquisition credits (1) 1,027 Aggregate purchase price $ 61,090 (1) Acquisition credits consisted primarily of tenant improvements and capital expenditures received as credits at the time of acquisition. |
Intangibles (Tables)
Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Summary of the carrying amount of intangible assets and liabilities | The following is a summary of the carrying amount of intangible assets and liabilities as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Assets In-place leases $ 353,004 $ (149,482 ) $ 203,522 $ 346,438 $ (140,937 ) $ 205,501 Above-market leases 43,419 (17,852 ) 25,567 43,300 (16,856 ) 26,444 Leasehold interest 712 (316 ) 396 712 (302 ) 410 Right-of-use lease assets 141,428 (2,564 ) 138,864 129,976 (2,043 ) 127,933 Total $ 538,563 $ (170,214 ) $ 368,349 $ 520,426 $ (160,138 ) $ 360,288 Liabilities Below-market leases $ 14,685 $ (8,283 ) $ 6,402 $ 14,054 $ (7,958 ) $ 6,096 Lease liabilities 74,687 (566 ) 74,121 63,665 (375 ) 63,290 Total $ 89,372 $ (8,849 ) $ 80,523 $ 77,719 $ (8,333 ) $ 69,386 |
Summary of the carrying amount of acquired lease intangibles | The following is a summary of acquired lease intangible amortization for the three month periods ended March 31, 2020 and 2019 , (in thousands): Three Months Ended 2020 2019 Amortization expense related to in-place leases $ 8,564 $ 9,247 Decrease of rental income related to above-market leases 996 1,115 Decrease of rental income related to leasehold interest 15 15 Increase of rental income related to below-market leases 363 550 Decrease of operating expense related to above-market ground leases (1) 35 35 Increase in operating expense related to below-market ground leases (1) 307 304 (1) Above- and below-market ground leases are included in the right-of-use asset as of January 1, 2019 due to the implementation of ASU 2016-02, Leases . |
Schedule of future amortization of the acquired lease intangibles | Future aggregate net amortization of the acquired lease intangibles as of March 31, 2020 , is as follows (in thousands): Net Decrease in Revenue Net Increase in Expenses 2020 $ 1,899 $ 26,698 2021 2,473 33,239 2022 2,021 29,367 2023 1,729 26,472 2024 1,675 23,226 Thereafter 9,764 129,263 Total $ 19,561 $ 268,265 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Assets, Unclassified [Abstract] | |
Schedule of other assets | Other assets consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, December 31, Straight line rent receivable, net $ 77,874 $ 73,992 Note receivable 22,705 22,694 Lease inducements, net 11,140 11,415 Prepaid expenses 8,293 8,000 Leasing commissions, net 8,035 7,986 Escrows 1,976 1,886 Interest rate swap — 4,933 Other 3,411 4,036 Total $ 133,434 $ 134,942 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The following is a summary of debt as of March 31, 2020 and December 31, 2019 (in thousands): March 31, December 31, Fixed interest mortgage notes (1) $ 53,027 $ 76,897 Variable interest mortgage note (2) 6,462 6,581 Total mortgage debt 59,489 83,478 $850 million unsecured revolving credit facility bearing variable interest of LIBOR plus 1.10%, due September 2022 160,000 339,000 $400 million senior unsecured notes bearing fixed interest of 4.30%, due March 2027 400,000 400,000 $350 million senior unsecured notes bearing fixed interest of 3.95%, due January 2028 350,000 350,000 $250 million unsecured term borrowing bearing fixed interest of 2.32%, due June 2023 (3) 250,000 250,000 $150 million senior unsecured notes bearing fixed interest of 4.03% to 4.74%, due January 2023 to 2031 150,000 150,000 $75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027 75,000 75,000 Total principal 1,444,489 1,647,478 Unamortized deferred financing costs (7,086 ) (7,677 ) Unamortized discounts (5,329 ) (5,483 ) Unamortized fair value adjustments 119 135 Total debt $ 1,432,193 $ 1,634,453 (1) As of March 31, 2020 , fixed interest mortgage notes bear interest from 4.63% to 5.50% , due in 2021, 2022, and 2024, with a weighted average interest rate of 4.78% . As of December 31, 2019 , fixed interest mortgage notes bear interest from 3.00% to 5.50% , due in 2020, 2021, 2022, and 2024, with a weighted average interest rate of 4.43% . The notes are collateralized by four properties with a net book value of $112.1 million as of March 31, 2020 and five properties with a net book value of $170.2 million as of December 31, 2019 . (2) Variable interest mortgage note bears variable interest of LIBOR plus 2.75% , for an interest rate of 3.67% and 4.50% as of March 31, 2020 and December 31, 2019 , respectively. The note is due in 2028 and is collateralized by one property with a net book value of $8.6 million as of March 31, 2020 and December 31, 2019 . (3) The Trust’s borrowings under the term loan feature of the Credit Agreement bear interest at a rate which is determined by the Trust’s credit rating, currently equal to LIBOR + 1.25% . The Trust has entered into a pay-fixed receive-variable interest rate swap, fixing the LIBOR component of this rate at 1.07% . |
Schedule of adjusted LIBOR rate loans and interest rates based on credit rating | Base Rate Loans, Adjusted LIBOR Rate Loans, and Letters of Credit (each, as defined in the Credit Agreement) will be subject to interest rates, based upon the Trust’s investment grade rating as follows: Credit Rating Margin for Revolving Loans: Adjusted LIBOR Rate Loans and Letter of Credit Fee Margin for Revolving Loans: Base Rate Loans Margin for Term Loans: Adjusted LIBOR Rate Loans and Letter of Credit Fee Margin for Term Loans: Base Rate Loans At Least A- or A3 LIBOR + 0.775% — % LIBOR + 0.85% — % At Least BBB+ or Baa1 LIBOR + 0.825% — % LIBOR + 0.90% — % At Least BBB or Baa2 LIBOR + 0.90% — % LIBOR + 1.00% — % At Least BBB- or Baa3 LIBOR + 1.10% 0.10 % LIBOR + 1.25% 0.25 % Below BBB- or Baa3 LIBOR + 1.45% 0.45 % LIBOR + 1.65% 0.65 % |
Schedule of principal payments due on debt | Scheduled principal payments due on consolidated debt as of March 31, 2020 , are as follows (in thousands): 2020 $ 1,489 2021 8,296 2022 180,825 2023 266,008 2024 23,669 Thereafter 964,202 Total Payments $ 1,444,489 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instrument Detail [Abstract] | |
Schedule of interest rate derivatives | The following table summarizes the location and aggregate fair value of the interest rate swaps on the Company’s consolidated balance sheets (in thousands): Total notional amount $ 250,000 Effective fixed interest rate (1) 2.32 % Effective date 7/7/2016 Maturity date 6/10/2023 Liability balance at March 31, 2020 (included in Other liabilities) $ (5,071 ) Asset balance at December 31, 2019 (included in Other assets) $ 4,933 (1) 1.07% effective swap rate plus 1.25% spread per Credit Agreement. |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of accrued expenses and other liabilities | Accrued expenses and other liabilities consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, December 31, Prepaid rent $ 20,555 $ 21,037 Real estate taxes payable 15,724 21,483 Accrued interest 5,777 16,038 Embedded derivative 5,269 4,290 Interest rate swap 5,071 — Accrued expenses 4,495 4,882 Security deposits 3,789 3,472 Tenant improvement allowance 2,173 2,155 Accrued incentive compensation 1,587 2,248 Contingent consideration 715 715 Other 7,790 4,918 Total $ 72,945 $ 81,238 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of non-vested restricted common shares | A summary of the status of the Trust’s non-vested restricted common shares as of March 31, 2020 and changes during the three month period then ended follow: Common Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2019 216,877 $ 17.67 Granted 158,675 19.30 Vested (168,757 ) 17.91 Forfeited (405 ) 17.29 Non-vested at March 31, 2020 206,390 $ 18.73 |
Schedule of weighted average grant date fair value assumptions | The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $26.80 and $37.09 per unit for the March 2020 grant using the following assumptions: Volatility 20.1 % Dividend assumption reinvested Expected term in years 2.83 years Risk-free rate 0.84 % Share price (per share) $ 19.30 |
Summary of the activity in the restricted share units | The following is a summary of the activity in the Trust’s restricted share units during the three months ended March 31, 2020 : Executive Awards Trustee Awards Restricted Share Units Weighted Average Grant Date Fair Value Restricted Share Weighted Non-vested at December 31, 2019 654,752 $ 22.99 67,297 $ 16.72 Granted 482,646 21.64 38,858 19.30 Vested (173,259 ) (1) 29.34 (46,335 ) 16.19 Non-vested at March 31, 2020 964,139 $ 21.17 59,820 $ 18.81 (1) Restricted units vested by Company executives in 2020 resulted in the issuance of 147,765 common shares, less 65,513 common shares withheld to cover minimum withholding tax obligations, for multiple employees. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of other financial instruments | The following table presents the fair value of the Company’s financial instruments (in thousands): March 31, December 31, Carrying Amount Fair Value Carrying Amount Fair Value Assets: Real estate loans receivable $ 135,818 $ 138,320 $ 178,240 $ 178,095 Notes receivable $ 22,705 $ 22,705 $ 22,694 $ 22,694 Derivative assets $ — $ — $ 4,933 $ 4,933 Liabilities: Credit facility $ (410,000 ) $ (410,000 ) $ (589,000 ) $ (589,000 ) Notes payable $ (975,000 ) $ (1,082,468 ) $ (975,000 ) $ (1,003,385 ) Mortgage debt $ (59,608 ) $ (58,733 ) $ (83,613 ) $ (85,110 ) Derivative liabilities $ (10,340 ) $ (10,340 ) $ (4,290 ) $ (4,290 ) |
Tenant Operating Leases (Tables
Tenant Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lessor, operating lease, payments to be received, maturity | As of March 31, 2020 , the future minimum rental payments on non-cancelable leases, exclusive of expense recoveries, were as follows (in thousands): 2020 $ 224,645 2021 296,531 2022 289,574 2023 281,441 2024 269,574 Thereafter 1,082,993 Total $ 2,444,758 |
Rent Expense (Tables)
Rent Expense (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of future minimum lease obligations under non-cancelable ground leases | As of March 31, 2020 , the future minimum lease obligations under non-cancelable parking, air, ground, and corporate leases, were as follows (in thousands): 2020 $ 2,530 2021 3,486 2022 3,456 2023 3,448 2024 3,431 Thereafter 172,624 Total undiscounted lease payments $ 188,975 Less: Interest (114,854 ) Present value of lease liabilities $ 74,121 |
Lease cost | Lease costs consisted of the following for the three months ended March 31, 2020 (in thousands): Three Months Ended March 31, 2020 Operating lease cost $ 509 Variable lease cost 250 Total lease cost $ 759 |
Credit Concentration (Tables)
Credit Concentration (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Concentration Risks, Types, No Concentration Percentage [Abstract] | |
Schedules of concentration of risk, by risk factor | The following table summarizes certain information about the Company’s top five tenant credit concentrations as of March 31, 2020 (in thousands): Tenant Total ABR Percent of ABR CommonSpirit - CHI - Nebraska $ 16,865 5.6 % Northside Hospital 14,176 4.7 % UofL Health - Louisville, Inc. 11,862 4.0 % US Oncology 9,520 3.2 % Baylor Scott and White Health 7,960 2.7 % Remaining portfolio 238,672 79.8 % Total $ 299,055 100.0 % The following table summarizes certain information about the Company’s top five geographic concentrations as of March 31, 2020 (in thousands): State Total ABR Percent of ABR Texas $ 48,862 16.3 % Georgia 26,078 8.7 % Indiana 21,933 7.3 % Nebraska 18,175 6.1 % Minnesota 17,695 5.9 % Other 166,312 55.7 % Total $ 299,055 100.0 % |
Earnings Per Share and Earnin_2
Earnings Per Share and Earnings Per Unit (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of amounts used in computing basic and diluted earnings per share | The following table shows the amounts used in computing the Trust’s basic and diluted earnings per share (in thousands, except share and per share data): Three Months Ended 2020 2019 Numerator for earnings per share - basic: Net income $ 14,960 $ 11,500 Net income attributable to noncontrolling interests: Operating Partnership (404 ) (305 ) Partially owned properties (142 ) (138 ) Preferred distributions (317 ) (284 ) Numerator for earnings per share - basic $ 14,097 $ 10,773 Numerator for earnings per share - diluted: Numerator for earnings per share - basic $ 14,097 $ 10,773 Operating Partnership net income 404 305 Numerator for earnings per share - diluted $ 14,501 $ 11,078 Denominator for earnings per share - basic and diluted: Weighted average number of shares outstanding - basic 196,211,728 182,672,863 Effect of dilutive securities: Noncontrolling interest - Operating Partnership units 5,663,124 5,177,912 Restricted common shares 87,322 104,784 Restricted share units 880,166 541,749 Denominator for earnings per share - diluted: 202,842,340 188,497,308 Earnings per share - basic $ 0.07 $ 0.06 Earnings per share - diluted $ 0.07 $ 0.06 The following table shows the amounts used in computing the Operating Partnership’s basic and diluted earnings per unit (in thousands, except unit and per unit data): Three Months Ended 2020 2019 Numerator for earnings per unit - basic and diluted: Net income $ 14,960 $ 11,500 Net income attributable to noncontrolling interests - partially owned properties (142 ) (138 ) Preferred distributions (317 ) (284 ) Numerator for earnings per unit - basic and diluted $ 14,501 $ 11,078 Denominator for earnings per unit - basic and diluted: Weighted average number of units outstanding - basic 201,874,852 187,850,775 Effect of dilutive securities: Restricted common shares 87,322 104,784 Restricted share units 880,166 541,749 Denominator for earnings per unit - diluted 202,842,340 188,497,308 Earnings per unit - basic $ 0.07 $ 0.06 Earnings per unit - diluted $ 0.07 $ 0.06 |
Organization and Business - Add
Organization and Business - Additional Information (Details) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Organization and Business - ATM
Organization and Business - ATM Program (Details) - ATM Program - USD ($) | 1 Months Ended | 3 Months Ended |
Nov. 30, 2019 | Mar. 31, 2020 | |
Maximum | Private Placement | ||
Class of Stock [Line Items] | ||
Aggregate offering price of common stock | $ 500,000,000 | |
Operating Partnership | ||
Class of Stock [Line Items] | ||
Common shares sold (in shares) | 12,352,700 | |
Weighted average price (in dollars per share) | $ 19.57 | |
Net proceeds | $ 239,300,000 | |
Operating Partnership | Private Placement | ||
Class of Stock [Line Items] | ||
Sale of stock, remaining authorized amount | $ 227,800,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||
Embedded derivative | $ 5,269 | $ 4,290 |
Physicians Realty Trust | ||
Business Acquisition [Line Items] | ||
Percentage of interest held | 97.30% | |
Hazelwood Medical commons | ||
Business Acquisition [Line Items] | ||
Number of units issued for funding purchase price (in shares) | 116,110 | |
Embedded derivative | $ 5,300 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Dividends and Distributions (Details) - $ / shares | Mar. 19, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Accounting Policies [Abstract] | |||
Dividends and distributions declared per common share and OP Unit (in dollars per share) | $ 0.23 | $ 0.23 | $ 0.23 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Impairment of Intangible and Long-Lived Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Impairment loss | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Investments in Unconsolidated Entities (Details) $ in Millions | Nov. 22, 2019USD ($)propertiesstateshealthcareproperty | Oct. 31, 2019USD ($)healthcareproperty |
Medcore Realty Eden Hill, LLC | ||
Business Acquisition [Line Items] | ||
Consideration transferred | $ 8.9 | |
Equity method investment, ownership percentage | 49.00% | |
Number of medical office buildings | healthcareproperty | 1 | |
PMAK MOB JV REOC, LLC | ||
Business Acquisition [Line Items] | ||
Equity method investment, ownership percentage | 12.30% | |
Number of medical office buildings | healthcareproperty | 59 | |
Number of contributed properties | properties | 2 | |
Contribution of property | $ 39 | |
Payments to acquire equity method investments | $ 17 | |
Number of states in which operating healthcare properties and land parcel located | states | 18 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Real Estate Loans Receivable (Details) $ in Thousands | Mar. 31, 2020mezzanine_loan | Jan. 01, 2020USD ($) | Jan. 01, 2019USD ($) |
Property, Plant and Equipment [Line Items] | |||
Cumulative effect of changes in accounting standards | $ | $ (147) | $ (239) | |
Mezzanine Loan Receivable | |||
Property, Plant and Equipment [Line Items] | |||
Number of mezzanine loans collateralized | 12 | ||
Construction Loans | |||
Property, Plant and Equipment [Line Items] | |||
Number of mezzanine loans collateralized | 2 | ||
Term Loan Receivable | |||
Property, Plant and Equipment [Line Items] | |||
Number of mezzanine loans collateralized | 2 | ||
Accounting Standards Update 2016-13 | Retained Earnings | |||
Property, Plant and Equipment [Line Items] | |||
Cumulative effect of changes in accounting standards | $ | $ (100) |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Rental Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Straight line rent receivable, net | $ 77,874 | $ 73,992 | |
Allowance for loan and lease loss, recovery of bad debts | $ 100 | $ 400 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of changes in accounting standard | $ (147) | $ (239) |
Retained Earnings | Accounting Standards Update 2016-13 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of changes in accounting standard | $ (100) |
Investment Activity - Narrative
Investment Activity - Narrative (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($)stateshealthcareproperty | |
Noncash or Part Noncash Acquisitions [Line Items] | |
Asset acquisition, consideration transferred | $ 18,989 |
Payments for loans receivable and payments to acquire real estate | $ 19,000 |
Two Healthcare Properties Acquired in 2020 | |
Noncash or Part Noncash Acquisitions [Line Items] | |
Number of operating healthcare properties | healthcareproperty | 2 |
Number of states in which operating healthcare properties and land parcel located | states | 2 |
Asset acquisition, consideration transferred | $ 12,200 |
Loan Investments | |
Noncash or Part Noncash Acquisitions [Line Items] | |
Asset acquisition, consideration transferred | $ 6,600 |
Investment Activity - Summary o
Investment Activity - Summary of Investment Activity (Details) - USD ($) $ in Thousands | Mar. 16, 2020 | Feb. 28, 2020 | Jan. 17, 2020 | Mar. 31, 2020 |
Business Acquisition [Line Items] | ||||
Asset acquisition, consideration transferred | $ 18,989 | |||
Business acquisition, capitalized costs | 400 | |||
Payments to acquire businesses, gross | $ 200 | |||
El Paso, Texas Land | ||||
Business Acquisition [Line Items] | ||||
Asset acquisition, consideration transferred | 1,300 | $ 215 | ||
Westerville MOB | ||||
Business Acquisition [Line Items] | ||||
Asset acquisition, consideration transferred | $ 10,683 | |||
TOPA Fort Worth | ||||
Business Acquisition [Line Items] | ||||
Asset acquisition, consideration transferred | $ 1,500 | 47,000 | ||
Payments to acquire businesses, gross | $ 1,500 | |||
Loan Investments | ||||
Business Acquisition [Line Items] | ||||
Asset acquisition, consideration transferred | $ 6,591 |
Investment Activity - Summary_2
Investment Activity - Summary of Acquisition Date Fair Values (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Business Acquisition [Line Items] | |
Land | $ 2,527 |
Building and improvements | 51,512 |
Right-of-use asset | 444 |
Prepaid expenses | (771) |
Receivables | 316 |
Asset Acquisition, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 60,063 |
Acquisition credits | 1,027 |
Aggregate purchase price | 61,090 |
In-place lease intangibles | |
Business Acquisition [Line Items] | |
Asset Acquisition, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 6,586 |
Above-market leases | |
Business Acquisition [Line Items] | |
Asset Acquisition, Recognized Identifiable Assets Acquired And Liabilities Assumed, Finite-Lived Intangible Assets, Excluding Assets Held For Sale | 118 |
Below market in-place lease intangibles | |
Business Acquisition [Line Items] | |
Below market in-place lease intangibles | $ (669) |
Intangibles - Summary of Carryi
Intangibles - Summary of Carrying Amount of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cost | $ 538,563 | $ 520,426 |
Accumulated Amortization | (170,214) | (160,138) |
Net | 368,349 | 360,288 |
Liabilities | ||
Below-market leases, net | 6,402 | 6,096 |
Lease liability, cost | 74,687 | 63,665 |
Lease liability, accumulated amortization | (566) | (375) |
Lease liability | 74,121 | 63,290 |
Cost | 89,372 | 77,719 |
Accumulated Amortization | (8,849) | (8,333) |
Net | 80,523 | 69,386 |
In-place leases | ||
Assets | ||
Cost | 353,004 | 346,438 |
Accumulated Amortization | (149,482) | (140,937) |
Net | 203,522 | 205,501 |
Above-market leases | ||
Assets | ||
Cost | 43,419 | 43,300 |
Accumulated Amortization | (17,852) | (16,856) |
Net | 25,567 | 26,444 |
Leasehold interest | ||
Assets | ||
Cost | 712 | 712 |
Accumulated Amortization | (316) | (302) |
Net | 396 | 410 |
Right-of-use lease assets | ||
Assets | ||
Cost | 141,428 | 129,976 |
Accumulated Amortization | (2,564) | (2,043) |
Net | 138,864 | 127,933 |
Below-market leases | ||
Liabilities | ||
Below-market leases, cost | 14,685 | 14,054 |
Below-market leases, accumulated amortization | (8,283) | (7,958) |
Below-market leases, net | $ 6,402 | $ 6,096 |
Intangibles - Summary of Acquir
Intangibles - Summary of Acquired Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Amortization expense related to in-place leases | ||
Intangibles | ||
Amortization expense related to in-place leases | $ 8,564 | $ 9,247 |
Decrease of rental income related to above-market leases | ||
Intangibles | ||
Decrease of rental income | 996 | 1,115 |
Decrease of rental income related to leasehold interest | ||
Intangibles | ||
Decrease of rental income | 15 | 15 |
Increase of rental income related to below-market leases | ||
Intangibles | ||
Increase of rental income related to below-market leases | 363 | 550 |
Decrease of operating expense related to above-market ground leases | ||
Intangibles | ||
Decrease (increase) of operating expense | 35 | 35 |
Increase in operating expense related to below-market ground leases | ||
Intangibles | ||
Decrease (increase) of operating expense | $ 307 | $ 304 |
Intangibles - Additional Inform
Intangibles - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Intangibles | |
Weighted average amortization period for lease intangibles | 26 years |
Weighted average amortization period for lease intangible liability | 41 years |
Intangibles - Future Aggregate
Intangibles - Future Aggregate Net Amortization of Acquired Lease Intangibles (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Net Decrease in Revenue | |
2020 | $ 1,899 |
2021 | 2,473 |
2022 | 2,021 |
2023 | 1,729 |
2024 | 1,675 |
Thereafter | 9,764 |
Total | 19,561 |
Net Increase in Expenses | |
2020 | 26,698 |
2021 | 33,239 |
2022 | 29,367 |
2023 | 26,472 |
2024 | 23,226 |
Thereafter | 129,263 |
Total | $ 268,265 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other Assets, Unclassified [Abstract] | ||
Straight line rent receivable, net | $ 77,874 | $ 73,992 |
Note receivable | 22,705 | 22,694 |
Lease inducements, net | 11,140 | 11,415 |
Prepaid expenses | 8,293 | 8,000 |
Leasing commissions, net | 8,035 | 7,986 |
Escrows | 1,976 | 1,886 |
Interest rate swap | 0 | 4,933 |
Other | 3,411 | 4,036 |
Total | $ 133,434 | $ 134,942 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) | Jul. 07, 2016 | Mar. 31, 2020USD ($)healthcareproperty | Dec. 31, 2019USD ($)healthcareproperty |
Debt | |||
Long-term debt, gross | $ 1,444,489,000 | $ 1,647,478,000 | |
Unamortized deferred financing costs | (7,086,000) | (7,677,000) | |
Unamortized discounts | (5,329,000) | (5,483,000) | |
Unamortized fair value adjustments | 119,000 | 135,000 | |
Total debt | $ 1,432,193,000 | 1,634,453,000 | |
2018 Credit Agreement Amendment | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Reference rate (as a percent) | 1.10% | ||
Mortgages | |||
Debt | |||
Long-term debt, gross | $ 59,489,000 | 83,478,000 | |
Mortgages | Fixed interest rate mortgage notes | |||
Debt | |||
Long-term debt, gross | $ 53,027,000 | $ 76,897,000 | |
Weighted average interest rate | 4.78% | 4.43% | |
Pledged assets separately reported real estate pledged as collateral number | healthcareproperty | 4 | 5 | |
Pledged assets, not separately reported, real estate | $ 112,100,000 | $ 170,200,000 | |
Mortgages | Fixed interest rate mortgage notes | Minimum | |||
Debt | |||
Interest rate (as a percent) | 4.63% | 3.00% | |
Mortgages | Fixed interest rate mortgage notes | Maximum | |||
Debt | |||
Interest rate (as a percent) | 5.50% | 5.50% | |
Mortgages | Variable interest mortgage note | |||
Debt | |||
Long-term debt, gross | $ 6,462,000 | $ 6,581,000 | |
Weighted average interest rate | 3.67% | 4.50% | |
Pledged assets separately reported real estate pledged as collateral number | healthcareproperty | 1 | ||
Pledged assets, not separately reported, real estate | $ 8,600,000 | ||
Mortgages | Variable interest mortgage note | London Interbank Offered Rate (LIBOR) | Maximum | |||
Debt | |||
Reference rate (as a percent) | 2.75% | ||
Revolving credit facility | $850 million unsecured revolving credit facility bearing variable interest of LIBOR plus 1.10%, due September 2022 | |||
Debt | |||
Long-term debt, gross | $ 160,000,000 | 339,000,000 | |
Debt instrument, face amount | $ 850,000,000 | ||
Reference rate (as a percent) | 1.10% | ||
Senior notes | |||
Debt | |||
Total debt | $ 975,000,000 | ||
Senior notes | $400 million senior unsecured notes bearing fixed interest of 4.30%, due March 2027 | |||
Debt | |||
Long-term debt, gross | 400,000,000 | 400,000,000 | |
Debt instrument, face amount | $ 400,000,000 | ||
Interest rate (as a percent) | 4.30% | ||
Senior notes | $350 million senior unsecured notes bearing fixed interest of 3.95%, due January 2028 | |||
Debt | |||
Long-term debt, gross | $ 350,000,000 | 350,000,000 | |
Debt instrument, face amount | $ 350,000,000 | ||
Interest rate (as a percent) | 3.95% | ||
Senior notes | $150 million senior unsecured notes bearing fixed interest of 4.03% to 4.74%, due January 2023 to 2031 | |||
Debt | |||
Long-term debt, gross | $ 150,000,000 | 150,000,000 | |
Debt instrument, face amount | $ 150,000,000 | ||
Senior notes | $150 million senior unsecured notes bearing fixed interest of 4.03% to 4.74%, due January 2023 to 2031 | Minimum | |||
Debt | |||
Interest rate (as a percent) | 4.03% | ||
Senior notes | $150 million senior unsecured notes bearing fixed interest of 4.03% to 4.74%, due January 2023 to 2031 | Maximum | |||
Debt | |||
Interest rate (as a percent) | 4.74% | ||
Senior notes | $75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027 | |||
Debt | |||
Long-term debt, gross | $ 75,000,000 | 75,000,000 | |
Debt instrument, face amount | $ 75,000,000 | ||
Senior notes | $75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027 | Minimum | |||
Debt | |||
Interest rate (as a percent) | 4.09% | ||
Senior notes | $75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027 | Maximum | |||
Debt | |||
Interest rate (as a percent) | 4.24% | ||
Unsecured Debt | $850 million unsecured revolving credit facility bearing variable interest of LIBOR plus 1.10%, due September 2022 | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Reference rate (as a percent) | 1.10% | ||
Unsecured Debt | $250 million unsecured term borrowing bearing fixed interest of 2.32%, due June 2023 | |||
Debt | |||
Long-term debt, gross | $ 250,000,000 | $ 250,000,000 | |
Debt instrument, face amount | $ 250,000,000 | ||
Interest rate (as a percent) | 2.32% | ||
Unsecured Debt | $250 million unsecured term borrowing bearing fixed interest of 2.32%, due June 2023 | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Reference rate (as a percent) | 1.25% | ||
Unsecured Debt | 2018 Credit Agreement Amendment | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Reference rate (as a percent) | 1.25% | 1.25% |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Jul. 07, 2016 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 07, 2018 |
Debt | |||||||
Long-term debt | $ 1,432,193,000 | $ 1,634,453,000 | |||||
Long-term debt, gross | 1,444,489,000 | $ 1,647,478,000 | |||||
Interest expense, debt | $ 15,000,000 | $ 15,700,000 | |||||
2018 Credit Agreement Amendment | |||||||
Debt | |||||||
Current borrowing capacity | $ 1,100,000,000 | ||||||
Maximum borrowing capacity as a percentage of maximum principal amount | 10.00% | ||||||
Accordion feature, increase limit | $ 500,000,000 | ||||||
Maximum borrowing capacity under accordion feature | 1,600,000,000 | ||||||
Unused fee (as a percent) | 0.25% | ||||||
2018 Credit Agreement Amendment | London Interbank Offered Rate (LIBOR) | |||||||
Debt | |||||||
Reference rate (as a percent) | 1.10% | ||||||
Revolving credit facility | |||||||
Debt | |||||||
Current borrowing capacity | 690,000,000 | ||||||
Term of extension option | 1 year | ||||||
Amount outstanding | 160,000,000 | ||||||
Term Loan | |||||||
Debt | |||||||
Amount outstanding | $ 250,000,000 | 250,000,000 | |||||
Term Loan | 2018 Credit Agreement Amendment | |||||||
Debt | |||||||
Current borrowing capacity | 250,000,000 | ||||||
Debt instrument, term | 7 years | ||||||
Unsecured Debt | 2018 Credit Agreement Amendment | London Interbank Offered Rate (LIBOR) | |||||||
Debt | |||||||
Reference rate (as a percent) | 1.25% | 1.25% | |||||
Senior notes | |||||||
Debt | |||||||
Long-term debt | 975,000,000 | ||||||
Senior notes | Senior Notes Due 2023 | |||||||
Debt | |||||||
Long-term debt | 15,000,000 | ||||||
Senior notes | Senior Notes Due 2025 | |||||||
Debt | |||||||
Long-term debt | 25,000,000 | ||||||
Senior notes | Senior Notes Due 2026 | |||||||
Debt | |||||||
Long-term debt | 70,000,000 | ||||||
Senior notes | Senior Notes Due 2027 | |||||||
Debt | |||||||
Long-term debt | 425,000,000 | ||||||
Senior notes | Senior Notes Due 2028 | |||||||
Debt | |||||||
Long-term debt | 395,000,000 | ||||||
Senior notes | Senor Notes Due 2031 | |||||||
Debt | |||||||
Long-term debt | $ 45,000,000 | ||||||
Interest Rate Swap | Unsecured Debt | |||||||
Debt | |||||||
Effective fixed interest rate (as a percent) | 2.32% | ||||||
Interest Rate Swap | Unsecured Debt | London Interbank Offered Rate (LIBOR) | |||||||
Debt | |||||||
Effective fixed interest rate (as a percent) | 1.07% | 1.07% | 2.32% | ||||
Maximum | Revolving credit facility | 2018 Credit Agreement Amendment | |||||||
Debt | |||||||
Current borrowing capacity | $ 850,000,000 | ||||||
Operating Partnership | Revolving credit facility | |||||||
Debt | |||||||
Interest rate at end of period (as a percent) | 3.65% | ||||||
Operating Partnership | Revolving credit facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt | |||||||
Reference rate (as a percent) | 0.92% |
Debt - Trust Investment Grade R
Debt - Trust Investment Grade Rating (Details) | 3 Months Ended |
Mar. 31, 2020 | |
At Least A- or A3 | Adjusted LIBOR rate loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 0.775% |
At Least A- or A3 | Adjusted LIBOR rate term loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 0.85% |
At Least BBB or Baa1 | Adjusted LIBOR rate loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 0.825% |
At Least BBB or Baa1 | Adjusted LIBOR rate term loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 0.90% |
At Least BBB or Baa2 | Adjusted LIBOR rate loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 0.90% |
At Least BBB or Baa2 | Adjusted LIBOR rate term loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 1.00% |
At Least BBB- or Baa3 | Adjusted LIBOR rate loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 1.10% |
At Least BBB- or Baa3 | Adjusted LIBOR rate term loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 1.25% |
Below BBB- or Baa3 | Adjusted LIBOR rate loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 1.45% |
Below BBB- or Baa3 | Adjusted LIBOR rate term loans and letter of credit | London Interbank Offered Rate (LIBOR) | |
Debt | |
Reference rate (as a percent) | 1.65% |
Margin for Revolving Loans: Base Rate Loans | At Least A- or A3 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.00% |
Margin for Revolving Loans: Base Rate Loans | At Least BBB or Baa1 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.00% |
Margin for Revolving Loans: Base Rate Loans | At Least BBB or Baa2 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.00% |
Margin for Revolving Loans: Base Rate Loans | At Least BBB- or Baa3 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.10% |
Margin for Revolving Loans: Base Rate Loans | Below BBB- or Baa3 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.45% |
Margin for Term Loans: Base Rate Loans | At Least A- or A3 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.00% |
Margin for Term Loans: Base Rate Loans | At Least BBB or Baa1 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.00% |
Margin for Term Loans: Base Rate Loans | At Least BBB or Baa2 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.00% |
Margin for Term Loans: Base Rate Loans | At Least BBB- or Baa3 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.25% |
Margin for Term Loans: Base Rate Loans | Below BBB- or Baa3 | Base rate loans | Base rate | |
Debt | |
Reference rate (as a percent) | 0.65% |
Debt - Scheduled Principal Paym
Debt - Scheduled Principal Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2020 | $ 1,489 | |
2021 | 8,296 | |
2022 | 180,825 | |
2023 | 266,008 | |
2024 | 23,669 | |
Thereafter | 964,202 | |
Total Payments | $ 1,444,489 | $ 1,647,478 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) | Mar. 31, 2020instruments |
Derivative [Line Items] | |
Outstanding interest rate swap contracts designated as cash flow hedges | 1 |
Cash Flow Hedging | Interest Rate Swap | |
Derivative [Line Items] | |
Outstanding interest rate swap contracts designated as cash flow hedges | 5,000 |
Derivatives - Location and Aggr
Derivatives - Location and Aggregate Fair Value of Interest Rate Swaps (Details) - USD ($) | Jul. 07, 2016 | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | |||||
Total notional amount | $ 250,000,000 | ||||
Effective date | Jul. 7, 2016 | ||||
Maturity date | Jun. 10, 2023 | ||||
Interest Rate Swap | Carrying Amount | |||||
Derivative [Line Items] | |||||
Liability balance at March 31, 2020 (included in Other liabilities) | (5,071,000) | ||||
Asset balance at December 31, 2019 (included in Other assets) | $ 0 | $ 4,933,000 | |||
London Interbank Offered Rate (LIBOR) | 2018 Credit Agreement Amendment | |||||
Derivative [Line Items] | |||||
Reference rate (as a percent) | 1.10% | ||||
Unsecured Debt | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Effective fixed interest rate (as a percent) | 2.32% | ||||
Unsecured Debt | London Interbank Offered Rate (LIBOR) | 2018 Credit Agreement Amendment | |||||
Derivative [Line Items] | |||||
Reference rate (as a percent) | 1.25% | 1.25% | |||
Unsecured Debt | London Interbank Offered Rate (LIBOR) | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Effective fixed interest rate (as a percent) | 1.07% | 1.07% | 2.32% |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Schedule of Accrued Expense and Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Prepaid rent | $ 20,555 | $ 21,037 |
Real estate taxes payable | 15,724 | 21,483 |
Accrued interest | 5,777 | 16,038 |
Embedded derivative | 5,269 | 4,290 |
Interest rate swap | 5,071 | 0 |
Accrued expenses | 4,495 | 4,882 |
Security deposits | 3,789 | 3,472 |
Tenant improvement allowance | 2,173 | 2,155 |
Accrued incentive compensation | 1,587 | 2,248 |
Contingent consideration | 715 | 715 |
Other | 7,790 | 4,918 |
Total | $ 72,945 | $ 81,238 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) | Apr. 30, 2019shares |
Restricted common shares | 2013 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares authorized (in shares) | 7,000,000 |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Common Shares (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-cash share compensation | $ 2,996 | $ 2,653 |
2013 Plan | Restricted common shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 158,675 | |
Vesting period | 1 year | |
Non-cash share compensation | $ 800 | $ 800 |
Unrecognized compensation expense | $ 3,300 | |
Officers and Certain Employees | 2013 Plan | Restricted common shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 158,675 | |
Grant date value | $ 3,100 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of the Status of the Trust's Non-Vested Restricted Common Shares (Details) - 2013 Plan - Restricted common shares | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Common Shares | |
Non-vested at the beginning of the period (in shares) | shares | 216,877 |
Granted (in shares) | shares | 158,675 |
Vested (in shares) | shares | (168,757) |
Forfeited (in shares) | shares | (405) |
Non-vested at the end of the period (in shares) | shares | 206,390 |
Weighted Average Grant Date Fair Value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 17.67 |
Granted (in dollars per share) | $ / shares | 19.30 |
Vested (in dollars per share) | $ / shares | 17.91 |
Forfeited (in dollars per share) | $ / shares | 17.29 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 18.73 |
Stock-based Compensation - Re_2
Stock-based Compensation - Restricted Share Units (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Non-cash share compensation | $ 2,996 | $ 2,653 | |||
2013 Plan | Restricted share units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Non-cash share compensation | 2,100 | $ 1,800 | |||
Unrecognized compensation expense | $ 15,300 | $ 15,300 | |||
2013 Plan | Trustee Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 38,858 | ||||
Granted (in dollars per share) | $ 19.30 | ||||
2013 Plan | Performance based restricted stock units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in dollars per share) | $ 24.36 | ||||
Performance conditions grant date fair value (in dollars per share) | $ 19.30 | ||||
Officers and Certain Employees | 2013 Plan | Restricted share units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 482,646 | ||||
Vesting period | 3 years | ||||
Officers and Certain Employees | 2013 Plan | Market Based Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 40.00% | ||||
Officers and Certain Employees | 2013 Plan | Performance based restricted stock units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 60.00% | ||||
Percentage of restricted share units issued to trustees | 100.00% | ||||
Officer | 2013 Plan | Restricted share units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
Trustees | 2013 Plan | Restricted share units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 2 years | ||||
Trustees | 2013 Plan | Trustee Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 38,858 | ||||
Director | 2013 Plan | Restricted share units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of dividend equivalent included in each award (in shares) | 1 | 1 | |||
Minimum | 2013 Plan | Market Based Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in dollars per share) | $ 26.80 | ||||
Maximum | 2013 Plan | Market Based Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in dollars per share) | $ 37.09 |
Stock-based Compensation - Re_3
Stock-based Compensation - Restricted Share Assumptions (Details) - 2013 Plan - Restricted share units (RSUs) | 1 Months Ended |
Mar. 31, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility | 20.10% |
Expected term in years | 2 years 9 months 29 days |
Risk-free rate | 0.84% |
Share price (per share) | $ 19.30 |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of Activity in the Trust's Restricted Share Units (Details) | 3 Months Ended | |
Mar. 31, 2020$ / sharesshares | Dec. 31, 2019shares | |
Weighted Average Grant Date Fair Value | ||
Common stock, shares issued (in shares) | 202,555,703 | 189,975,396 |
Share-based payment arrangement, shares withheld for tax withholding obligation (in shares) | 65,513 | |
2013 Plan | Executive Awards | ||
Restricted Share Units | ||
Non-vested at the beginning of the period (in shares) | 654,752 | |
Granted (in shares) | 482,646 | |
Vested (in shares) | (173,259) | |
Non-vested at the end of the period (in shares) | 964,139 | |
Weighted Average Grant Date Fair Value | ||
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 22.99 | |
Granted (in dollars per share) | $ / shares | 21.64 | |
Vested (in dollars per share) | $ / shares | 29.34 | |
Non-vested at end of period (in dollars per share) | $ / shares | $ 21.17 | |
Common stock, shares issued (in shares) | 147,765 | |
2013 Plan | Trustee Awards | ||
Restricted Share Units | ||
Non-vested at the beginning of the period (in shares) | 67,297 | |
Granted (in shares) | 38,858 | |
Vested (in shares) | (46,335) | |
Non-vested at the end of the period (in shares) | 59,820 | |
Weighted Average Grant Date Fair Value | ||
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 16.72 | |
Granted (in dollars per share) | $ / shares | 19.30 | |
Vested (in dollars per share) | $ / shares | 16.19 | |
Non-vested at end of period (in dollars per share) | $ / shares | $ 18.81 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | Mar. 31, 2020USD ($)instruments |
Fair value of other financial instruments | |
Outstanding interest rate swap contracts designated as cash flow hedges | 1 |
Fair value, measurements, nonrecurring | |
Fair value of other financial instruments | |
Assets subject to impairment fair value disclosure | $ | $ 0 |
Cash Flow Hedging | Interest Rate Swap | |
Fair value of other financial instruments | |
Outstanding interest rate swap contracts designated as cash flow hedges | 5,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Company's Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Note receivable | $ 22,705 | $ 22,694 |
Liabilities: | ||
Credit facility | (404,838) | (583,323) |
Notes payable | (968,001) | (967,789) |
Mortgage debt | (59,354) | (83,341) |
Carrying Amount | ||
Assets: | ||
Real estate loans receivable | 135,818 | 178,240 |
Note receivable | 22,705 | 22,694 |
Liabilities: | ||
Credit facility | (410,000) | (589,000) |
Notes payable | (975,000) | (975,000) |
Mortgage debt | (59,608) | (83,613) |
Carrying Amount | Interest Rate Swap | ||
Assets: | ||
Derivative assets | 0 | 4,933 |
Liabilities: | ||
Derivative liabilities | (5,071) | |
Carrying Amount | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liabilities | (10,340) | (4,290) |
Fair Value | ||
Assets: | ||
Real estate loans receivable | 138,320 | 178,095 |
Note receivable | 22,705 | 22,694 |
Liabilities: | ||
Credit facility | (410,000) | (589,000) |
Notes payable | (1,082,468) | (1,003,385) |
Mortgage debt | (58,733) | (85,110) |
Fair Value | Interest Rate Swap | ||
Assets: | ||
Derivative assets | 0 | 4,933 |
Fair Value | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liabilities | $ (10,340) | $ (4,290) |
Tenant Operating Leases - Sched
Tenant Operating Leases - Schedule of Future Minimum Rental Payments (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Future minimum rental payments on non-cancelable leases | |
2020 | $ 224,645 |
2021 | 296,531 |
2022 | 289,574 |
2023 | 281,441 |
2024 | 269,574 |
Thereafter | 1,082,993 |
Total | $ 2,444,758 |
Rent Expense - Additional Infor
Rent Expense - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020properties | |
Leases [Abstract] | |
Number of properties subject to parking lease | 3 |
Number of properties subject to air space lease | 1 |
Number of properties subject to ground leases | 81 |
Number of office space leases | 11 |
Maximum lease terms | 87 years |
Operating lease, weighted average remaining lease term | 44 years |
Operating lease, weighted average discount rate, percent | 4.40% |
Rent Expense - Schedule of Futu
Rent Expense - Schedule of Future Minimum Lease Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Future minimum lease obligations under non-cancelable parking, air, and ground leases | ||
2020 | $ 2,530 | |
2021 | 3,486 | |
2022 | 3,456 | |
2023 | 3,448 | |
2024 | 3,431 | |
Thereafter | 172,624 | |
Total undiscounted lease payments | 188,975 | |
Less: Interest | (114,854) | |
Present value of lease liabilities | $ 74,121 | $ 63,290 |
Rent Expense - Lease Cost (Deta
Rent Expense - Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 509 |
Variable lease cost | 250 |
Total lease cost | $ 759 |
Credit Concentration - Schedule
Credit Concentration - Schedule of ABR (Annualized Base Rent) (Details) - Sales Revenue, Services, Net $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($)Rate | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 299,055 |
Percent of ABR (annualized base rent) | Rate | 100.00% |
Customer Concentration Risk | CommonSpirit - CHI - Nebraska | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 16,865 |
Percent of ABR (annualized base rent) | 5.60% |
Customer Concentration Risk | Northside Hospital | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 14,176 |
Percent of ABR (annualized base rent) | 4.70% |
Customer Concentration Risk | UofL Health - Louisville, Inc. | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 11,862 |
Percent of ABR (annualized base rent) | 4.00% |
Customer Concentration Risk | US Oncology | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 9,520 |
Percent of ABR (annualized base rent) | 3.20% |
Customer Concentration Risk | Baylor Scott and White Health | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 7,960 |
Percent of ABR (annualized base rent) | 2.70% |
Customer Concentration Risk | Remaining portfolio | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 238,672 |
Percent of ABR (annualized base rent) | Rate | 79.80% |
Geographic Concentration Risk | Texas | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 48,862 |
Percent of ABR (annualized base rent) | 16.30% |
Geographic Concentration Risk | Georgia | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 26,078 |
Percent of ABR (annualized base rent) | 8.70% |
Geographic Concentration Risk | Indiana | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 21,933 |
Percent of ABR (annualized base rent) | 7.30% |
Geographic Concentration Risk | Nebraska | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 18,175 |
Percent of ABR (annualized base rent) | 6.10% |
Geographic Concentration Risk | Minnesota | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 17,695 |
Percent of ABR (annualized base rent) | 5.90% |
Geographic Concentration Risk | Other | |
Concentration Risk [Line Items] | |
Total ABR (annualized base rent) | $ 166,312 |
Percent of ABR (annualized base rent) | 55.70% |
Credit Concentration - Addition
Credit Concentration - Additional Information (Details) - Sales Revenue, Services, Net | 3 Months Ended |
Mar. 31, 2020Rate | |
Concentration Risk [Line Items] | |
Percent of ABR (annualized base rent) | 100.00% |
Top five tenant relationships | |
Concentration Risk [Line Items] | |
Percent of ABR (annualized base rent) | 20.20% |
CHI Portfolio | |
Concentration Risk [Line Items] | |
Percent of ABR (annualized base rent) | 16.60% |
Earnings Per Share and Earnin_3
Earnings Per Share and Earnings Per Unit - Schedule of Earnings Per Share and Earnings Per Unit (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Numerator for earnings per share - basic: | |||
Net income | $ 14,960 | $ 11,500 | |
Net income attributable to noncontrolling interests: | |||
Operating Partnership | (404) | (305) | |
Partially owned properties | [1] | (142) | (138) |
Preferred distributions | (317) | (284) | |
Net income attributable to common shareholders | 14,097 | 10,773 | |
Numerator for earnings per share - diluted: | |||
Numerator for earnings per share - basic | 14,097 | 10,773 | |
Operating Partnership net income | 404 | 305 | |
Numerator for earnings per share - diluted | $ 14,501 | $ 11,078 | |
Denominator for earnings per share - basic and diluted: | |||
Weighted average number of shares outstanding - basic (in shares) | 196,211,728 | 182,672,863 | |
Effect of dilutive securities: | |||
Noncontrolling interest - Operating Partnership units (in shares) | 5,663,124 | 5,177,912 | |
Denominator for earnings per share - diluted (in shares) | 202,842,340 | 188,497,308 | |
Earnings per share - basic (in dollars per share) | $ 0.07 | $ 0.06 | |
Earnings per share - diluted (in dollars per share) | $ 0.07 | $ 0.06 | |
Restricted common shares | |||
Effect of dilutive securities: | |||
Effect of dilutive securities, restricted shares and RSUs (in shares) | 87,322 | 104,784 | |
Restricted share units | |||
Effect of dilutive securities: | |||
Effect of dilutive securities, restricted shares and RSUs (in shares) | 880,166 | 541,749 | |
Operating Partnership | |||
Numerator for earnings per share - basic: | |||
Net income | $ 14,960 | $ 11,500 | |
Net income attributable to noncontrolling interests: | |||
Partially owned properties | [2] | (142) | (138) |
Preferred distributions | (317) | (284) | |
Net income attributable to common shareholders | 14,501 | 11,078 | |
Numerator for earnings per share - diluted: | |||
Numerator for earnings per share - basic | $ 14,501 | $ 11,078 | |
Denominator for earnings per unit - basic and diluted: | |||
Weighted average number of units outstanding - basic (in shares) | 201,874,852 | 187,850,775 | |
Effect of dilutive securities: | |||
Denominator for earnings per unit - diluted (in shares) | 202,842,340 | 188,497,308 | |
Earnings per unit - basic (in dollars per share) | $ 0.07 | $ 0.06 | |
Earnings per unit - diluted (in dollars per share) | $ 0.07 | $ 0.06 | |
Operating Partnership | Restricted common shares | |||
Effect of dilutive securities: | |||
Effect of dilutive securities, restricted shares and RSUs (in shares) | 87,322 | 104,784 | |
Operating Partnership | Restricted share units | |||
Effect of dilutive securities: | |||
Effect of dilutive securities, restricted shares and RSUs (in shares) | 880,166 | 541,749 | |
[1] | Includes amounts attributable to redeemable noncontrolling interests. | ||
[2] | Includes amounts attributable to redeemable noncontrolling interests. |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Subsequent Event ft² in Thousands | May 08, 2020USD ($)ft² | May 07, 2020 | Apr. 15, 2020USD ($) |
Mezzanine Loan | |||
Subsequent Event [Line Items] | |||
Debt instrument, face amount | $ 13,000,000 | ||
Interest rate (as a percent) | 8.50% | ||
Construction Loans | |||
Subsequent Event [Line Items] | |||
Debt instrument, face amount | $ 4,600,000 | ||
Interest rate (as a percent) | 6.25% | 5.50% | |
Square feet of building (in square feet) | ft² | 30 | ||
Leased percentage | 100.00% | ||
Term of contract | 10 years | ||
Fixed price purchase option | $ 15,500,000 |
Uncategorized Items - a10q2020q
Label | Element | Value |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (239,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (147,000) |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (239,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (147,000) |