Acquisitions and Dispositions (Tables)

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

Schedule of acquisitions and aggregate purchase price

Investment activity for the three months ended March 31, 2017 is summarized below:

Property (1)			Location	Acquisition Date	Purchase Price (in thousands)
Tinseltown - Loan Draw	(2)		Jacksonville, FL		$	516
Hazelwood Mezzanine Loan - Amendment	(3)		Minnetonka, MN		1,763
Orthopedic Associates	(4)		Flower Mound, TX	January 5, 2017	18,750
Medical Arts Center at Hartford	(4)		Plainville, CT	January 11, 2017	30,250
Noncontrolling Interest Buyout - New Albany	(5)		New Albany, OH	January 31, 2017	2,824
CareMount - Lake Katrine MOB	(4)	(6)	Lake Katrine, NY	February 14, 2017	41,791
CareMount - Rhinebeck MOB	(4)		Rhinebeck, NY	February 14, 2017	18,639
Syracuse Condos	(4)		Fayetteville & Liverpool, NY	February 27, 2017	2,659
Monterey Medical Center MOB	(4)		Stuart, FL	March 7, 2017	18,979
Creighton University Medical Center	(7)	(8)	Omaha, NE	March 28, 2017	33,529
Strictly Pediatrics Specialty Center	(4)	(9)	Austin, TX	March 31, 2017	78,628
					$	248,328

(1) “MOB” means medical office building.

(2) This investment represents the final Tinseltown draw, resulting in a total loan balance of $12.6 million.

(3) The existing Hazelwood Mezzanine Loan was amended, resulting in a total outstanding principal balance of $5.1 million.

(4) The Company accounted for these acquisitions as business combinations pursuant to the acquisition method. Acquisition costs expensed during the period total $5.4 million.

(5) The Company acquired the previously outstanding interest in the New Albany MOB from the predecessor owner. As consideration, the Operating Partnership paid approximately $2.1 million in cash and issued 38,641 OP Units, representing an aggregate $2.8 million.

(6) The Company partially funded this acquisition through the assumption of an existing mortgage valued at approximately $26.4 million.

(7) The Company accounted for this acquisition as an asset acquisition and capitalized total acquisition costs of $0.1 million.

(8)

This acquisition is part of the CHI portfolio.

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	$	14,190
Building and improvements	187,239
In-place lease intangible	27,670
Above market in-place lease intangible	13,406
Below market in-place lease intangible	(757		)
Below market in-place ground lease	1,042
Receivables	480
Debt assumed	(26,379		)
Issuance of OP Units	(44,978		)
Net assets acquired	$	171,913

Schedule of disposition

In accordance with this classification, the following assets are classified as held for sale in the accompanying consolidated balance sheets at March 31, 2017 (in thousands):

Land and improvements	$	2,578
Building and improvements	13,404
Tenant improvements	469
Acquired lease intangibles	2,137
Real estate held for sale before accumulated depreciation	18,588
Accumulated depreciation	(6,662		)
Real estate held for sale	$	11,926

Schedule of pro forma combined revenue, net income, and earnings per share-basic and diluted

The following table illustrates the pro forma consolidated revenue, net income, and earnings per share as if the Company had acquired the 2017 acquisitions detailed above as of January 1, 2016 (in thousands, except share and per share amounts):

	Three Months Ended March 31,
	2017		2016
Revenue	$	79,922	$	49,155
Net income	7,426		5,994
Net income available to common shareholders	6,903		4,937
Earnings per share - basic	$	0.05	$	0.04
Earnings per share - diluted	$	0.05	$	0.04
Weighted average number of shares outstanding - basic	138,986,629		138,986,629
Weighted average number of shares outstanding - diluted	142,605,930		142,605,930

Physicians Realty L.P.

The following table illustrates the pro forma consolidated revenue, net income, and earnings per share as if the Company had acquired the 2017 acquisitions detailed above as of January 1, 2016 (in thousands, except unit and per unit amounts):

	Three Months Ended March 31,
	2017		2016
Revenue	$	79,922	$	49,155
Net income	7,426		5,994
Net income available to common unitholders	7,048		5,129
Earnings per unit - basic	$	0.05	$	0.04
Earnings per unit - diluted	$	0.05	$	0.04
Weighted average number of units outstanding - basic	142,172,746		142,172,746
Weighted average number of units outstanding - diluted	142,605,930		142,605,930