Acquisitions and Dispositions (Tables)

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Schedule of acquisitions and aggregate purchase price

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.

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):

	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

Revenues and net income related to disposition

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

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 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