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Acquisitions and Dispositions
 6 Months Ended
Jun. 30, 2017
Business Combinations [Abstract]  
Acquisitions and Dispositions Acquisitions and Dispositions
 
During the six months ended June 30, 2017, the Company completed acquisitions of 20 operating healthcare properties, 2 condominium units, and one parking deck located in 13 states for an aggregate purchase price of approximately $825.1 million. In addition, the Company completed $8.6 million of loan transactions and $2.8 million of noncontrolling interest buyouts, resulting in total investment activity of approximately $836.5 million.

Investment activity for the three months ended June 30, 2017 is summarized below:
Property (1)
 
 
 
Location
 
Acquisition
Date
 
Purchase
Price
(in thousands)
MedStar Stephen's Crossing
(2)
 
 
Brandywine, MD
 
June 16, 2017
 
$
20,900

St. Vincent Portfolio (2 MOBs)
(2)
 
 
Carmel & Fishers, IN
 
June 29, 2017
 
93,880

2017 CHI Portfolio - Tranche 1 (8 MOBs)
(2)
 
 
NE, ND, MN, TN, AR, TX
 
June 29, 2017
 
124,181

Baylor Charles A. Sammons Cancer Center
(2)
 
 
Dallas, TX
 
June 30, 2017
 
290,000

Orthopedic & Sports Institute of the Fox Valley
(2)
 
 
Appleton, WI
 
June 30, 2017
 
27,900

Peachtree Dunwoody MOB - Parking Deck
(2)
 
 
Atlanta, GA
 
June 30, 2017
 
25,000

Loan Investments
 
 
 
Various
 
Various
 
6,315

 
 
 
 
 
 
 
 
$
588,176

(1)
“MOB” means medical office building.
(2)
The Company accounted for six of these facilities as asset acquisitions and capitalized total acquisition costs of $0.2 million. The remaining eight facilities were accounted for as business combinations pursuant to the acquisition method, with acquisition expense totaling $5.2 million, which includes costs related to properties pursued but not acquired.

For the three months ended June 30, 2017, the Company recorded revenues and net income from its 2017 acquisitions of $5.5 million and $1.1 million, respectively. For the six months ended June 30, 2017, the Company recorded revenues from its 2017 acquisitions of $7.3 million. Net loss attributable to acquisitions completed during the six months ended June 30, 2017 was $1.7 million primarily as a result of related closing expenses totaling $4.4 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):
 
1st Quarter
 
2nd Quarter
 
Total
Land
$
14,190

 
$
5,662

 
$
19,852

Building and improvements
187,239

 
537,952

 
725,191

In-place lease intangible
27,670

 
38,766

 
66,436

Above market in-place lease intangible
13,406

 
2,815

 
16,221

Below market in-place lease intangible
(757
)
 
(2,097
)
 
(2,854
)
Above market in-place ground lease
—

 
(4,172
)
 
(4,172
)
Below market in-place ground lease
1,042

 
3,245

 
4,287

Receivables
480

 
(46
)
 
434

Debt assumed
(26,379
)
 
—

 
(26,379
)
Issuance of OP Units
(44,978
)
 
—

 
(44,978
)
Net assets acquired
$
171,913


$
582,125

 
$
754,038


These preliminary allocations are subject to revision within the measurement period, not to exceed one year from the date of the acquisitions.

Disposition

On February 23, 2017, the Company executed an agreement to sell a portfolio of four medical office buildings located in Georgia (the “Georgia Portfolio”), representing an aggregate 80,292 square feet, for approximately $18.2 million. On April 7, 2017, the Company closed on the sale of the Georgia Portfolio for a gain of $5.3 million.

The following table summarizes revenues and net income related to the Georgia Portfolio for the periods presented (in thousands):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2017
 
2016
 
2017
 
2016
Revenues
19

 
417

 
438

 
833

Income before gain on sale of investment properties:
(53
)
 
109

 
87

 
196

Gain on sale of investment properties
5,303

 
—

 
5,303

 
—

Net income (loss)
5,250

 
109

 
5,390

 
196



Unaudited Pro Forma Financial Information

Physicians Realty Trust

The following table illustrates the pro forma consolidated revenue, net income, and earnings per share as if the Company had acquired the 2017 acquisitions as of January 1, 2016 (in thousands, except share and per share amounts):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2017
 
2016
 
2017
 
2016
Revenue
$
87,755

 
$
69,579

 
$
179,092

 
$
130,423

Net income
11,251

 
7,933

 
19,409

 
12,286

Net income available to common shareholders
10,559

 
7,210

 
18,146

 
10,560

Earnings per share - basic
$
0.07

 
$
0.05

 
$
0.12

 
$
0.07

Earnings per share - diluted
$
0.07

 
$
0.05

 
$
0.12

 
$
0.07

Weighted average number of shares outstanding - basic
155,366,080

 
155,366,080

 
147,221,602

 
147,221,602

Weighted average number of shares outstanding - diluted
161,012,360

 
161,012,360

 
151,912,432

 
151,912,432



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 as of January 1, 2016 (in thousands, except unit and per unit amounts):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2017
 
2016
 
2017
 
2016
Revenue
$
87,755

 
$
69,579

 
$
179,092

 
$
130,423

Net income
11,251

 
7,933

 
19,409

 
12,286

Net income available to common unitholders
10,904

 
7,436

 
18,684

 
10,924

Earnings per unit - basic
$
0.07

 
$
0.05

 
$
0.12

 
$
0.07

Earnings per unit - diluted
$
0.07

 
$
0.05

 
$
0.12

 
$
0.07

Weighted average number of units outstanding - basic
160,765,345

 
160,765,345

 
151,520,407

 
151,520,407

Weighted average number of units outstanding - diluted
161,012,360

 
161,012,360

 
151,912,432

 
151,912,432