falsefalse--12-31--12-31FYFY2019201900015745400001583994P1Y00.015000000001824160071899753961824160071899753960.007750.00850.0090.010.0110.01250.008250.0090.01450.01650.01100.0125850000000750000001500000003500000004000000002500000000.04240.04740.04090.04030.03950.0430.023218241600718997539618241600718997539605182784566610951827845666109P3YP1YP3YP1YP1YP3YP1YP2YP3Y 0001574540 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember 2019-01-01 2019-12-31 0001574540 2020-02-21 0001574540 2019-06-30 0001574540 2019-12-31 0001574540 2018-12-31 0001574540 2017-01-01 2017-12-31 0001574540 2018-01-01 2018-12-31 0001574540 us-gaap:ParentMember 2018-01-01 2018-12-31 0001574540 us-gaap:ParentMember 2019-01-01 0001574540 us-gaap:NoncontrollingInterestMember 2017-01-01 2017-12-31 0001574540 us-gaap:CommonStockMember 2019-01-01 2019-12-31 0001574540 us-gaap:CommonStockMember 2018-01-01 2018-12-31 0001574540 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-12-31 0001574540 us-gaap:ParentMember 2018-12-31 0001574540 us-gaap:AdditionalPaidInCapitalMember 2016-12-31 0001574540 doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2019-12-31 0001574540 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0001574540 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-12-31 0001574540 us-gaap:AdditionalPaidInCapitalMember 2017-01-01 2017-12-31 0001574540 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2017-12-31 0001574540 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2018-01-01 2018-12-31 0001574540 us-gaap:RetainedEarningsMember 2018-01-01 2018-12-31 0001574540 us-gaap:ParentMember 2017-01-01 2017-12-31 0001574540 doc:OperatingPartnershipNoncontrollingInterestMember 2017-01-01 2017-12-31 0001574540 doc:OperatingPartnershipNoncontrollingInterestMember 2019-01-01 2019-12-31 0001574540 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-12-31 0001574540 us-gaap:RetainedEarningsMember 2017-01-01 2017-12-31 0001574540 us-gaap:NoncontrollingInterestMember 2018-01-01 2018-12-31 0001574540 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 0001574540 us-gaap:ParentMember 2019-01-01 2019-12-31 0001574540 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2017-01-01 2017-12-31 0001574540 us-gaap:NoncontrollingInterestMember 2017-12-31 0001574540 us-gaap:RetainedEarningsMember 2018-12-31 0001574540 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-12-31 0001574540 us-gaap:CommonStockMember 2018-12-31 0001574540 us-gaap:RetainedEarningsMember 2016-12-31 0001574540 doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2017-12-31 0001574540 2016-12-31 0001574540 us-gaap:CommonStockMember 2017-01-01 2017-12-31 0001574540 doc:OperatingPartnershipNoncontrollingInterestMember 2018-12-31 0001574540 us-gaap:RetainedEarningsMember 2019-01-01 2019-12-31 0001574540 doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2017-01-01 2017-12-31 0001574540 us-gaap:NoncontrollingInterestMember 2019-12-31 0001574540 us-gaap:ParentMember 2016-12-31 0001574540 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001574540 us-gaap:RetainedEarningsMember 2019-12-31 0001574540 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0001574540 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001574540 doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2019-01-01 2019-12-31 0001574540 us-gaap:NoncontrollingInterestMember 2018-12-31 0001574540 us-gaap:ParentMember 2017-12-31 0001574540 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001574540 doc:OperatingPartnershipNoncontrollingInterestMember 2019-12-31 0001574540 2019-01-01 0001574540 us-gaap:CommonStockMember 2016-12-31 0001574540 doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2018-12-31 0001574540 us-gaap:CommonStockMember 2017-12-31 0001574540 us-gaap:NoncontrollingInterestMember 2016-12-31 0001574540 us-gaap:ParentMember 2019-12-31 0001574540 doc:OperatingPartnershipNoncontrollingInterestMember 2017-12-31 0001574540 doc:OperatingPartnershipNoncontrollingInterestMember 2018-01-01 2018-12-31 0001574540 us-gaap:CommonStockMember 2019-12-31 0001574540 us-gaap:RetainedEarningsMember 2017-12-31 0001574540 doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2018-01-01 2018-12-31 0001574540 doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2016-12-31 0001574540 2017-12-31 0001574540 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2016-12-31 0001574540 doc:OperatingPartnershipNoncontrollingInterestMember 2016-12-31 0001574540 2019-03-31 0001574540 doc:PhysiciansRealtyLPMember 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember 2018-01-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember 2017-01-01 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:GeneralPartnerMember 2018-01-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartnersCapitalMember 2016-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartnersCapitalMember 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:LimitedPartnerMember 2018-01-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:GeneralPartnerMember 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2016-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartnersCapitalMember 2018-01-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartnersCapitalMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:GeneralPartnerMember 2017-01-01 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:LimitedPartnerMember 2017-01-01 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2016-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:GeneralPartnerMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:GeneralPartnerMember 2016-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-01-01 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:LimitedPartnerMember 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:LimitedPartnerMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartnersCapitalMember 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2017-01-01 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartnersCapitalMember 2017-01-01 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:LimitedPartnerMember 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2018-01-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember 2019-01-01 0001574540 doc:PhysiciansRealtyLPMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:GeneralPartnerMember 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartnersCapitalMember 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember 2016-12-31 0001574540 doc:PhysiciansRealtyLPMember 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:GeneralPartnerMember 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:LimitedPartnerMember 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartnersCapitalMember 2019-01-01 0001574540 doc:PhysiciansRealtyLPMember us-gaap:GeneralPartnerMember 2019-01-01 0001574540 doc:PhysiciansRealtyLPMember us-gaap:LimitedPartnerMember 2016-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:PartiallyOwnedPropertiesNoncontrollingInterestMember 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:A2019ATMProgramMember 2019-01-01 2019-12-31 0001574540 doc:A2016ATMProgramMember srt:MaximumMember us-gaap:PrivatePlacementMember 2016-08-05 2016-08-05 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:SubsequentEventMember us-gaap:PrivatePlacementMember 2020-02-21 0001574540 doc:A2019ATMProgramMember srt:MaximumMember us-gaap:PrivatePlacementMember 2019-11-30 2019-11-30 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2018-07-01 2018-09-30 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2019-07-01 2019-09-30 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2018-01-01 2018-03-31 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2018-10-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2018-04-01 2018-06-30 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2018-01-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2019-10-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2019-04-01 2019-06-30 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember doc:A2016ATMProgramMember us-gaap:PrivatePlacementMember 2019-01-01 2019-03-31 0001574540 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001574540 doc:MedcoreRealtyEdenHillLLCMember 2019-10-31 0001574540 doc:PhysiciansRealtyTrustMember 2019-01-01 2019-12-31 0001574540 us-gaap:AccountingStandardsUpdate201602Member us-gaap:RetainedEarningsMember 2019-01-01 0001574540 doc:EarnOutInvestmentsMember 2019-06-19 0001574540 us-gaap:SeriesAPreferredStockMember 2015-02-05 2015-02-05 0001574540 doc:MezzanineLoanReceivableMember 2019-12-31 0001574540 doc:MedcoreRealtyEdenHillLLCMember 2019-10-31 2019-10-31 0001574540 doc:BaylorCancerCenterMember 2019-01-01 2019-12-31 0001574540 doc:HealthEastClinicSpecialtyCenterMember 2019-12-31 0001574540 doc:HealthEastClinicSpecialtyCenterMember 2019-01-01 2019-12-31 0001574540 doc:NCIBuyoutMNPortfolioMember 2019-05-06 2019-05-06 0001574540 doc:EarnOutInvestmentsMember 2019-08-01 2019-08-01 0001574540 doc:HazelwoodMedicalcommonsMember 2018-01-09 0001574540 doc:PMAKMOBJVREOCLLCMember 2019-11-22 2019-11-22 0001574540 doc:PMAKMOBJVREOCLLCMember 2019-11-22 0001574540 doc:HazelwoodMedicalcommonsMember 2018-01-09 2018-01-09 0001574540 us-gaap:ConstructionLoansMember 2019-12-31 0001574540 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember 2019-12-31 0001574540 doc:EarnOutInvestmentsMember 2019-08-01 0001574540 doc:AuroraHealthCareMember 2019-01-01 2019-12-31 0001574540 doc:NCIBuyoutMedicalofficeBuildingTexasMember 2019-08-23 2019-08-23 0001574540 doc:PhysiciansRealtyTrustMember 2019-01-01 2019-09-30 0001574540 doc:MedicalOfficeBuildingPortCharlotteFloridaMember 2017-01-01 2017-12-31 0001574540 doc:EarnOutInvestmentsMember 2019-06-19 2019-06-19 0001574540 doc:PhysiciansRealtyTrustMember 2018-01-01 2018-12-31 0001574540 doc:TermLoanReceivableMember 2019-12-31 0001574540 us-gaap:SeriesAPreferredStockMember 2015-02-05 0001574540 2019-07-01 2019-09-30 0001574540 2018-06-21 2018-06-21 0001574540 2017-12-21 2017-12-21 0001574540 2017-06-12 2017-06-12 0001574540 2018-12-21 2018-12-21 0001574540 2018-09-19 2018-09-19 0001574540 2019-03-22 2019-03-22 0001574540 2018-03-23 2018-03-23 0001574540 2017-09-21 2017-09-21 0001574540 2019-09-20 2019-09-20 0001574540 2017-03-17 2017-03-17 0001574540 2019-12-20 2019-12-20 0001574540 2019-07-21 2019-07-21 0001574540 doc:HealthEastClinicSpecialtyCenterMember 2018-01-01 2018-12-31 0001574540 doc:ConversionAndSatisfactionOfPreviouslyOutstandingConstructionLoanMember 2018-01-01 2018-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-12-31 0001574540 doc:LeaseStructuringArrangementAndEquityRecapitalizationMember 2018-01-01 2018-12-31 0001574540 doc:TermLoanMember 2019-12-31 0001574540 doc:TwoHealthcarePropertiesAcquiredin2019Member 2019-01-01 2019-12-31 0001574540 doc:ShellRidgePortfolioMember 2019-09-27 2019-09-27 0001574540 doc:PMAKMOBJVREOCLLCMember 2019-11-22 0001574540 doc:NoncontrollingInterestBuyoutMember 2018-01-01 2018-12-31 0001574540 doc:LoanInvestmentsMember 2019-01-01 2019-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:DispositionsSecondQuarterTwentyNineteenMember 2019-01-01 2019-12-31 0001574540 us-gaap:RealEstateLoanMember 2019-12-31 0001574540 doc:JointVentureMember 2019-01-01 2019-12-31 0001574540 doc:RockwellIIMOBMember 2019-07-26 0001574540 doc:TwoHealthcarePropertiesAcquiredin2019Member doc:AdditionWestTNASCMember 2019-01-31 2019-01-31 0001574540 doc:TotalAssetAcquisitionsMember 2019-01-01 2019-12-31 0001574540 doc:TwoHealthcarePropertiesAcquiredin2019Member 2019-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:DispositionsSecondQuarterTwentyNineteenMember 2018-01-01 2018-12-31 0001574540 doc:TotalAssetAcquisitionsMember 2018-01-01 2018-12-31 0001574540 doc:EarnOutInvestmentsMember 2019-01-01 2019-12-31 0001574540 doc:MedCoreRealtyEdenHillJointVentureMember 2019-10-31 0001574540 doc:LoanInvestmentsMember 2018-01-01 2018-12-31 0001574540 doc:NoncontrollingInterestBuyoutMinnesotaPortfolioMember 2019-03-31 0001574540 us-gaap:RealEstateLoanMember 2019-01-01 2019-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:DispositionsSecondQuarterTwentyNineteenMember 2019-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:DispositionsSecondQuarterTwentyNineteenMember 2018-12-31 0001574540 us-gaap:ConstructionLoansMember 2019-12-31 0001574540 doc:EquityBuyoutFoundationMember 2018-01-01 2018-12-31 0001574540 2019-04-04 0001574540 us-gaap:ConstructionLoansMember 2019-01-01 2019-12-31 0001574540 doc:EquityBuyoutFoundationMember 2019-01-01 2019-12-31 0001574540 doc:FortyHealthCarePropertiesAcquiredin2017Member 2018-01-01 2018-12-31 0001574540 doc:EarnOutInvestmentsMember 2019-12-31 0001574540 doc:ShellRidgePortfolioMember 2019-09-27 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2018-12-31 0001574540 doc:ConversionAndSatisfactionOfPreviouslyOutstandingConstructionLoanMember 2018-12-31 0001574540 doc:NoncontrollingInterestBuyoutMinnesotaPortfolioMember doc:MinnesotaPortfolioJointVentureMember 2019-03-31 0001574540 2019-04-04 2019-04-04 0001574540 doc:DoctorsUnitedASCMember 2019-04-04 2019-04-04 0001574540 doc:PMAKMOBJVREOCLLCMember 2019-11-22 2019-11-22 0001574540 doc:MedCoreRealtyEdenHillJointVentureMember 2019-10-31 2019-10-31 0001574540 doc:RockwellIIMOBMember 2019-07-26 2019-07-26 0001574540 doc:MurdockSurgeryCenterMember 2019-12-02 2019-12-02 0001574540 doc:AtlantaCondominiumInvestmentsMember 2019-06-28 2019-06-28 0001574540 doc:NCIBuyoutMNPortfolioMember 2019-05-06 2019-05-06 0001574540 doc:ShadelandStationPortfolioMember 2019-08-02 2019-08-02 0001574540 doc:AdditionWestTNASCMember 2019-01-31 2019-01-31 0001574540 doc:ProHealthMOBMember 2019-10-15 2019-10-15 0001574540 doc:NCIBuyoutMedicalofficeBuildingTexasMember 2019-08-23 2019-08-23 0001574540 doc:LeesHillMedicalPlazaMember 2018-01-23 2018-01-23 0001574540 doc:NorthsideMidtownMOBMember 2018-09-14 2018-09-14 0001574540 doc:ScottsdaleArizonaLandMember 2018-02-16 2018-02-16 0001574540 doc:NoncontrollingInterestBuyoutMinnesotaPortfolioMember 2018-03-01 2018-03-01 0001574540 doc:HMGMedicalPlazaMember 2018-04-03 2018-04-03 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:A2018DispositionsMember 2018-01-01 2018-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:A2018DispositionsMember 2017-01-01 2017-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:A2018DispositionsMember 2019-01-01 2019-12-31 0001574540 us-gaap:AboveMarketLeasesMember 2018-12-31 0001574540 doc:BelowMarketLeasesMember 2019-12-31 0001574540 us-gaap:LeasesAcquiredInPlaceMember 2019-12-31 0001574540 doc:AboveMarketGroundLeaseMember 2018-12-31 0001574540 us-gaap:LeasesAcquiredInPlaceMember 2018-12-31 0001574540 us-gaap:AboveMarketLeasesMember 2019-12-31 0001574540 us-gaap:SeriesAPreferredStockMember 2019-12-31 0001574540 doc:AboveMarketGroundLeaseMember 2019-12-31 0001574540 doc:BelowMarketLeasesMember 2018-12-31 0001574540 us-gaap:SeriesAPreferredStockMember 2018-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:A2019DispositionsMember 2019-01-01 2019-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:A2019DispositionsMember 2018-01-01 2018-12-31 0001574540 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember doc:A2019DispositionsMember 2017-01-01 2017-12-31 0001574540 doc:AboveMarketGroundLeaseMember 2019-01-01 2019-12-31 0001574540 doc:AboveMarketGroundLeaseMember 2017-01-01 2017-12-31 0001574540 doc:LeaseholdInterestMember 2018-01-01 2018-12-31 0001574540 doc:BelowMarketLeasesMember 2019-01-01 2019-12-31 0001574540 us-gaap:LeasesAcquiredInPlaceMember 2018-01-01 2018-12-31 0001574540 doc:AboveMarketGroundLeaseMember 2018-01-01 2018-12-31 0001574540 doc:LeaseholdInterestMember 2019-01-01 2019-12-31 0001574540 doc:BelowMarketGroundLeaseMember 2019-01-01 2019-12-31 0001574540 us-gaap:AboveMarketLeasesMember 2017-01-01 2017-12-31 0001574540 doc:BelowMarketGroundLeaseMember 2017-01-01 2017-12-31 0001574540 doc:BelowMarketGroundLeaseMember 2018-01-01 2018-12-31 0001574540 us-gaap:LeasesAcquiredInPlaceMember 2017-01-01 2017-12-31 0001574540 doc:BelowMarketLeasesMember 2018-01-01 2018-12-31 0001574540 us-gaap:AboveMarketLeasesMember 2019-01-01 2019-12-31 0001574540 us-gaap:LeasesAcquiredInPlaceMember 2019-01-01 2019-12-31 0001574540 doc:LeaseholdInterestMember 2017-01-01 2017-12-31 0001574540 us-gaap:AboveMarketLeasesMember 2018-01-01 2018-12-31 0001574540 doc:BelowMarketLeasesMember 2017-01-01 2017-12-31 0001574540 doc:OperatingLeaseRightofUseAssetsMember 2019-12-31 0001574540 doc:BelowMarketGroundLeaseMember 2019-12-31 0001574540 doc:LeaseholdInterestMember 2018-12-31 0001574540 doc:LeaseholdInterestMember 2019-12-31 0001574540 doc:BelowMarketGroundLeaseMember 2018-12-31 0001574540 doc:CreditratingatleastAorA3Member doc:BaseRateLoansMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBplusorBAA1Member doc:BaseRateLoansMember doc:TermLoanMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingbelowBBBorBAA3Member doc:BaseRateLoansMember doc:TermLoanMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastAorA3Member doc:BaseRateLoansMember doc:TermLoanMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBorBAA3Member doc:BaseRateLoansMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBorBAA2Member doc:BaseRateLoansMember doc:TermLoanMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBorBAA3Member doc:BaseRateLoansMember doc:TermLoanMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBplusorBAA1Member doc:BaseRateLoansMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBorBAA2Member doc:BaseRateLoansMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingbelowBBBorBAA3Member doc:BaseRateLoansMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2019-01-01 2019-12-31 0001574540 doc:UnsecuredNotesBearingFixedInterestDueJanuary2023to2031Member us-gaap:SeniorNotesMember 2018-12-31 0001574540 doc:UnsecuredTermLoanDueJune2023Member us-gaap:UnsecuredDebtMember 2019-12-31 0001574540 us-gaap:MortgagesMember 2018-12-31 0001574540 doc:UnsecuredTermLoanDueJune2023Member us-gaap:UnsecuredDebtMember 2018-12-31 0001574540 doc:UnsecuredNotesBearingFixedInterestDueMarch2027Member us-gaap:SeniorNotesMember 2019-12-31 0001574540 doc:UnsecuredNotesBearingFixedInterestDueJanuary2028Member us-gaap:SeniorNotesMember 2019-12-31 0001574540 doc:MortgageNotesBearingVariableInterestDue2028Member us-gaap:MortgagesMember 2018-12-31 0001574540 doc:UnsecuredNotesBearingFixedInterestDueJanuary2023to2031Member us-gaap:SeniorNotesMember 2019-12-31 0001574540 doc:MortgageNotesBearingFixedInterestRateDueIn202020212022and2024Member us-gaap:MortgagesMember 2018-12-31 0001574540 doc:SeniorUnsecuredNotesDueAugust2025to2027Member us-gaap:SeniorNotesMember 2018-12-31 0001574540 doc:SeniorUnsecuredNotesDueAugust2025to2027Member us-gaap:SeniorNotesMember 2019-12-31 0001574540 doc:UnsecuredNotesBearingFixedInterestDueJanuary2028Member us-gaap:SeniorNotesMember 2018-12-31 0001574540 doc:RevolvingCreditFacilityDueSeptember2022Member us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001574540 doc:RevolvingCreditFacilityDueSeptember2022Member us-gaap:RevolvingCreditFacilityMember 2018-12-31 0001574540 us-gaap:MortgagesMember 2019-12-31 0001574540 doc:MortgageNotesBearingVariableInterestDue2028Member us-gaap:MortgagesMember 2019-12-31 0001574540 doc:MortgageNotesBearingFixedInterestRateDueIn202020212022and2024Member us-gaap:MortgagesMember 2019-12-31 0001574540 doc:UnsecuredNotesBearingFixedInterestDueMarch2027Member us-gaap:SeniorNotesMember 2018-12-31 0001574540 us-gaap:SeniorNotesMember 2017-12-01 0001574540 doc:A2018CreditAgreementAmendmentMember us-gaap:UnsecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2016-07-07 2016-07-07 0001574540 us-gaap:SeriesAMember us-gaap:SeniorNotesMember 2016-01-07 0001574540 srt:MaximumMember doc:A2018CreditAgreementAmendmentMember us-gaap:RevolvingCreditFacilityMember 2018-08-07 0001574540 doc:A2018CreditAgreementAmendmentMember doc:TermLoanMember 2018-08-07 0001574540 doc:A2018CreditAgreementAmendmentMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:A2018CreditAgreementAmendmentMember 2018-08-07 0001574540 us-gaap:InterestRateSwapMember us-gaap:UnsecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-12-31 0001574540 us-gaap:SeniorNotesMember 2017-03-07 2017-03-07 0001574540 srt:MinimumMember doc:MortgageNotesBearingFixedInterestRateDueIn202020212022and2024Member us-gaap:MortgagesMember 2019-12-31 0001574540 us-gaap:InterestRateSwapMember us-gaap:UnsecuredDebtMember 2016-07-07 0001574540 doc:A2018CreditAgreementAmendmentMember us-gaap:UnsecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:TermLoanMember 2019-12-31 0001574540 doc:SeriesDMember 2016-01-07 0001574540 doc:SeriesCMember us-gaap:SeniorNotesMember 2016-01-07 0001574540 us-gaap:SeriesAMember 2016-08-11 0001574540 us-gaap:SeniorNotesMember 2016-01-07 0001574540 us-gaap:SeniorNotesMember 2016-08-11 0001574540 us-gaap:SeriesBMember 2016-08-11 0001574540 us-gaap:SeriesAMember 2016-01-07 0001574540 us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001574540 us-gaap:SeniorNotesMember 2017-03-07 0001574540 us-gaap:SeriesAMember us-gaap:SeniorNotesMember 2016-08-11 0001574540 doc:TermLoanMember 2016-07-07 0001574540 doc:A2018CreditAgreementAmendmentMember doc:TermLoanMember 2016-07-07 2016-07-07 0001574540 us-gaap:LetterOfCreditMember 2019-12-31 0001574540 srt:MaximumMember doc:MortgageNotesBearingVariableInterestDue2028Member us-gaap:MortgagesMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 us-gaap:SeniorNotesMember 2017-12-01 2017-12-01 0001574540 us-gaap:SeriesBMember us-gaap:SeniorNotesMember 2016-01-07 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RevolvingCreditFacilityMember 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2018-01-01 2018-12-31 0001574540 us-gaap:SeriesBMember us-gaap:SeniorNotesMember 2016-08-11 0001574540 us-gaap:InterestRateSwapMember us-gaap:UnsecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2016-07-07 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:SeriesDMember us-gaap:SeniorNotesMember 2016-01-07 0001574540 doc:SeriesCMember us-gaap:SeniorNotesMember 2016-08-11 0001574540 doc:A2018CreditAgreementAmendmentMember 2019-01-01 2019-12-31 0001574540 doc:SeriesCMember 2016-01-07 0001574540 srt:MaximumMember doc:MortgageNotesBearingFixedInterestRateDueIn202020212022and2024Member us-gaap:MortgagesMember 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001574540 us-gaap:SeriesBMember 2016-01-07 0001574540 doc:UnsecuredTermLoanDueJune2023Member us-gaap:UnsecuredDebtMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 us-gaap:RevolvingCreditFacilityMember 2018-08-07 2018-08-07 0001574540 doc:RevolvingCreditFacilityDueSeptember2022Member us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 srt:MaximumMember doc:UnsecuredNotesBearingFixedInterestDueJanuary2023to2031Member us-gaap:SeniorNotesMember 2019-12-31 0001574540 srt:MinimumMember doc:UnsecuredNotesBearingFixedInterestDueJanuary2023to2031Member us-gaap:SeniorNotesMember 2019-12-31 0001574540 srt:MinimumMember doc:SeniorUnsecuredNotesDueAugust2025to2027Member us-gaap:SeniorNotesMember 2019-12-31 0001574540 srt:MaximumMember doc:SeniorUnsecuredNotesDueAugust2025to2027Member us-gaap:SeniorNotesMember 2019-12-31 0001574540 doc:CreditratingatleastAorA3Member doc:AdjustedLIBORRateRevolverLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBorBAA3Member doc:AdjustedLIBORRateTermLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastAorA3Member doc:AdjustedLIBORRateTermLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBplusorBAA1Member doc:AdjustedLIBORRateTermLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBorBAA3Member doc:AdjustedLIBORRateRevolverLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBorBAA2Member doc:AdjustedLIBORRateRevolverLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingbelowBBBorBAA3Member doc:AdjustedLIBORRateTermLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBorBAA2Member doc:AdjustedLIBORRateTermLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingatleastBBBplusorBAA1Member doc:AdjustedLIBORRateRevolverLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 doc:CreditratingbelowBBBorBAA3Member doc:AdjustedLIBORRateRevolverLoansAndLetterOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001574540 us-gaap:InterestRateSwapMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0001574540 us-gaap:InterestRateSwapMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0001574540 us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 doc:MarketBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 doc:MarketBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2017-01-01 2017-12-31 0001574540 srt:OfficerMember us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2017-03-01 2017-03-31 0001574540 doc:TrusteesMember doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2018-03-01 2018-03-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2017-01-01 2017-12-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 srt:OfficerMember doc:MarketBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 srt:OfficerMember doc:PerformanceBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 doc:PerformanceBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-03-01 2019-03-31 0001574540 doc:PerformanceBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2018-03-01 2018-03-31 0001574540 doc:ExecutiveAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2017-01-01 2017-12-31 0001574540 doc:OfficersandCertainEmployeesMember us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2019-12-31 0001574540 doc:ExecutiveAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 srt:DirectorMember us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2019-03-31 0001574540 doc:OfficersandCertainEmployeesMember doc:PerformanceBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-03-01 2019-03-31 0001574540 srt:OfficerMember doc:PerformanceBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2017-12-31 0001574540 srt:OfficerMember doc:MarketBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 doc:ExecutiveAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 doc:OfficersandCertainEmployeesMember us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2019-03-01 2019-03-31 0001574540 doc:TrusteesMember doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-03-01 2019-03-31 0001574540 doc:TrusteesMember doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2017-03-01 2017-03-31 0001574540 doc:PerformanceBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2017-03-01 2017-03-31 0001574540 doc:ExecutiveAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-12-31 0001574540 doc:ExecutiveAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2018-12-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2018-12-31 0001574540 doc:OfficersandCertainEmployeesMember doc:MarketBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-03-01 2019-03-31 0001574540 us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2019-04-30 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2019-12-31 0001574540 us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2018-12-31 0001574540 doc:ExecutiveAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2017-12-31 0001574540 srt:OfficerMember us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2018-03-01 2018-03-31 0001574540 doc:MarketBasedRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2017-01-01 2017-12-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2017-12-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2019-03-01 2019-03-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2017-03-01 2017-03-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2017-03-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2018-03-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2018-03-01 2018-03-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2019-03-31 0001574540 doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2017-01-01 2017-12-31 0001574540 doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2016-12-31 0001574540 doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2017-12-31 0001574540 doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2019-12-31 0001574540 doc:ExecutiveAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2016-12-31 0001574540 doc:TrusteeAwardsRestrictedStockUnitsRSUsMember doc:EquityIncentivePlan2013PlanMember 2018-12-31 0001574540 us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2016-12-31 0001574540 srt:MaximumMember us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 srt:MaximumMember us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2017-01-01 2017-12-31 0001574540 srt:MaximumMember us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 srt:MinimumMember us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2018-01-01 2018-12-31 0001574540 srt:OfficerMember us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 srt:MinimumMember us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-09-30 0001574540 srt:MinimumMember us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2017-01-01 2017-12-31 0001574540 doc:TrusteesMember us-gaap:RestrictedStockUnitsRSUMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 srt:MinimumMember us-gaap:RestrictedStockMember doc:EquityIncentivePlan2013PlanMember 2019-01-01 2019-12-31 0001574540 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001574540 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0001574540 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0001574540 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001574540 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0001574540 us-gaap:InterestRateSwapMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0001574540 us-gaap:InterestRateSwapMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001574540 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0001574540 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0001574540 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0001574540 us-gaap:FairValueMeasurementsNonrecurringMember 2019-12-31 0001574540 doc:NorthsideHospitalMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-12-31 0001574540 doc:RemainingPortfolioMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-12-31 0001574540 us-gaap:SalesRevenueNetMember 2019-01-01 2019-12-31 0001574540 doc:CHINebraskaMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-12-31 0001574540 doc:USOncologyMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-12-31 0001574540 doc:UofLHealthLouisvilleIncMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-12-31 0001574540 doc:BaylorScottandWhiteHealthMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-12-31 0001574540 us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember stpr:NE 2019-01-01 2019-12-31 0001574540 us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember stpr:GA 2019-01-01 2019-12-31 0001574540 us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember stpr:MN 2019-01-01 2019-12-31 0001574540 us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember stpr:TX 2019-01-01 2019-12-31 0001574540 us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember stpr:IN 2019-01-01 2019-12-31 0001574540 us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember doc:AllotherstatesMember 2019-01-01 2019-12-31 0001574540 doc:CHIPortfolioMember us-gaap:SalesRevenueNetMember 2019-01-01 2019-12-31 0001574540 doc:TopfivetenantrelationshipsMember us-gaap:SalesRevenueNetMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RestrictedStockMember 2018-01-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RestrictedStockMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RestrictedStockUnitsRSUMember 2017-01-01 2017-12-31 0001574540 doc:PhysiciansRealtyLPMember us-gaap:RestrictedStockMember 2017-01-01 2017-12-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember 2017-01-01 2017-12-31 0001574540 us-gaap:RestrictedStockMember 2018-01-01 2018-12-31 0001574540 us-gaap:RestrictedStockMember 2019-01-01 2019-12-31 0001574540 us-gaap:RestrictedStockMember 2017-01-01 2017-12-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-12-31 0001574540 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-12-31 0001574540 us-gaap:MortgagesMember us-gaap:SubsequentEventMember 2020-01-01 2020-02-27 0001574540 doc:PhysiciansRealtyLPMember doc:A2019ATMProgramMember us-gaap:SubsequentEventMember 2020-01-01 2020-02-27 0001574540 doc:PhysiciansRealtyLPMember 2018-01-01 2018-03-31 0001574540 doc:PhysiciansRealtyLPMember 2018-07-01 2018-09-30 0001574540 doc:PhysiciansRealtyLPMember 2018-04-01 2018-06-30 0001574540 doc:PhysiciansRealtyLPMember 2018-10-01 2018-12-31 0001574540 doc:PhysiciansRealtyLPMember 2019-04-01 2019-06-30 0001574540 2019-04-01 2019-06-30 0001574540 doc:PhysiciansRealtyLPMember 2019-07-01 2019-09-30 0001574540 doc:PhysiciansRealtyLPMember 2019-10-01 2019-12-31 0001574540 doc:PhysiciansRealtyLPMember 2019-01-01 2019-03-31 0001574540 2019-10-01 2019-12-31 0001574540 2019-01-01 2019-03-31 0001574540 2018-07-01 2018-09-30 0001574540 2018-10-01 2018-12-31 0001574540 2018-01-01 2018-03-31 0001574540 2018-04-01 2018-06-30 0001574540 doc:MiddletownMedical111MalteseWallkillNyMember 2019-12-31 0001574540 doc:PinnacleHealthMedicalOfficeBuildingCarlislePaMember 2019-12-31 0001574540 doc:EdinaMedicalOfficeBuildingEdinaMNMember 2019-12-31 0001574540 doc:MedStarStephensCrossingMember 2019-12-31 0001574540 doc:CHIHealthClinicBuildingMember 2019-12-31 0001574540 doc:St.JosephOfficeParkMember 2019-12-31 0001574540 doc:OrthopedicSportsInstituteoftheFoxValleyMember 2019-12-31 0001574540 doc:SouthpointeMember 2019-12-31 0001574540 doc:ShellRidgePlazaBldg114Member 2019-12-31 0001574540 doc:Pinnacle240GrandviewCampHillPaMember 2019-12-31 0001574540 doc:BridgeportMedicalCenterMember 2019-12-31 0001574540 doc:OhioHealthSWHealthCenterMOBMember 2019-12-31 0001574540 doc:SurgicalInstituteOfMonroeMonroeMiMember 2019-12-31 0001574540 doc:FESCMOBMember 2019-12-31 0001574540 doc:UniversityofMichiganNorthvilleMOBMember 2019-12-31 0001574540 doc:IMSPalmValleyMOBMember 2019-12-31 0001574540 doc:TriStateOrthopaedicsMOBMember 2019-12-31 0001574540 doc:FoleyMOBMember 2019-12-31 0001574540 doc:RenaissanceAmbulatorySurgeryCenterOshkoshWiMember 2019-12-31 0001574540 doc:MemorialHermannPhaseIIMember 2019-12-31 0001574540 doc:CHISt.VincentMercyHeartVascularCenterMember 2019-12-31 0001574540 doc:St.VincentBuildingMember 2019-12-31 0001574540 doc:MauryRegionalHealthcareMOBMember 2019-12-31 0001574540 doc:DoctorsCommunityHospitalPOBMember 2019-12-31 0001574540 doc:HealthparkMedicalCenterMember 2019-12-31 0001574540 doc:FoxValleyHematologyOncologyMember 2019-12-31 0001574540 doc:St.VincentPOB1BirminghamALMember 2019-12-31 0001574540 doc:NorthsideMOBCenterPointeMember 2019-01-01 2019-12-31 0001574540 doc:PeakOneASCDomain 2019-12-31 0001574540 doc:DellRoadMOBMember 2019-01-01 2019-12-31 0001574540 doc:ChattanoogaHeartInstituteMember 2019-12-31 0001574540 doc:MemorialOutpatientCenterMember 2019-01-01 2019-12-31 0001574540 doc:AreteSurgicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:IMSParadiseValleyMOBMember 2019-12-31 0001574540 doc:NorthernVisionEyeCenterMember 2019-12-31 0001574540 doc:NorthOkaloosaMOBMember 2019-01-01 2019-12-31 0001574540 doc:EyeAssociateofNMAlbuquerqueAlbuquerqueNMMember 2019-12-31 0001574540 doc:St.AlexiusOrthopaedicCenterMember 2019-01-01 2019-12-31 0001574540 doc:HonorHealthScottsdaleMOBMember 2019-12-31 0001574540 doc:FoundationHealthPlexOfSanAntonioTxMember 2019-12-31 0001574540 doc:St.VincentWomensCenterMember 2019-12-31 0001574540 doc:MississippiOrthoMedicalOfficeBuildingJacksonMsMember 2019-01-01 2019-12-31 0001574540 doc:LittleFallsOrthopedicsMember 2019-12-31 0001574540 doc:WoodlandsMedicalArtsCenterMember 2019-12-31 0001574540 doc:GoodSamaritanNorthAnnexBuildingMember 2019-12-31 0001574540 doc:PinnacleMarketPlaceWayHarrisburgPaMember 2019-12-31 0001574540 doc:VadnaisHeightsMOBMember 2019-12-31 0001574540 doc:GreatFallsAmbulatorySurgeryCenterGreatFallsMTMember 2019-12-31 0001574540 doc:RenaissanceOfficeBuildingMember 2019-12-31 0001574540 doc:ElPasoKenworthyElPasoTxMember 2019-12-31 0001574540 doc:DellRoadMOBMember 2019-12-31 0001574540 doc:MansfieldAscMansfieldTxMember 2019-12-31 0001574540 doc:LittleFallsDialysisCenterMember 2019-12-31 0001574540 doc:MidCoastHospitalOfficeBuildingPortlandMEMember 2019-12-31 0001574540 doc:PanamaCityBeachMember 2019-12-31 0001574540 doc:HonorHealth44thStreetMOBMember 2019-12-31 0001574540 doc:Ft.WaltonBeachMember 2019-12-31 0001574540 doc:TwentyFirstCenturyRadiationOncologyEnglewoodFlMember 2019-01-01 2019-12-31 0001574540 doc:CrescentCitySurgicalCentreNewOrleansLAMember 2019-12-31 0001574540 doc:HudgensProfessionalBuildingMember 2019-12-31 0001574540 doc:NorthMedicalCenterMember 2019-12-31 0001574540 doc:TwentyFirstCenturyRadiationOncologyEnglewoodFlMember 2019-12-31 0001574540 doc:CommunityHealth7330Member 2019-12-31 0001574540 doc:SummitUrologyBloomingtonInMember 2019-12-31 0001574540 doc:CaremountLakeKatrineMOBMember 2019-12-31 0001574540 doc:PinnacleHealthMedicalOfficeBuildingHarrisburgPaMember 2019-12-31 0001574540 doc:IndianaAmericanIVMember 2019-12-31 0001574540 doc:CarmelMedicalPavilionCarmelInMember 2019-12-31 0001574540 doc:CHIHealthClinicBuildingMember 2019-01-01 2019-12-31 0001574540 doc:ChildrensHospitalMOBMember 2019-12-31 0001574540 doc:FESCMOBMember 2019-01-01 2019-12-31 0001574540 doc:St.VincentFishersMedicalCenterMember 2019-12-31 0001574540 doc:MinnetonkaMOBMember 2019-01-01 2019-12-31 0001574540 doc:HMGMedicalPlazaMember 2019-12-31 0001574540 doc:ColumbiaMOBHudsonNYMember 2019-12-31 0001574540 doc:Calkins300Member 2019-12-31 0001574540 doc:Calkins400Member 2019-12-31 0001574540 doc:JamestownMOBMember 2019-12-31 0001574540 doc:Calkins125Member 2019-12-31 0001574540 doc:LakesideWellnessCenterMember 2019-12-31 0001574540 doc:St.AlexiusRehabCenterMember 2019-12-31 0001574540 doc:IMSAvondaleMOBMember 2019-12-31 0001574540 doc:PalmBeachASCMember 2019-12-31 0001574540 doc:BatonRougeMOBMember 2019-12-31 0001574540 doc:CreightonUniversityMedicalCenterMember 2019-12-31 0001574540 doc:NorthOkaloosaMOBMember 2019-12-31 0001574540 doc:St.VincentCarmelWomensCenterMember 2019-12-31 0001574540 doc:OrthoOneWestervilleOhMember 2019-12-31 0001574540 doc:DoctorsUnitedASCMember 2019-12-31 0001574540 doc:BaylorCharlesA.SammonsCancerCenterMember 2019-12-31 0001574540 doc:PensacolaCatalystMember 2019-12-31 0001574540 doc:GreatFallsHospitalGreatFallsMTMember 2019-12-31 0001574540 doc:ImmanuelOneProfessionalCenterMember 2019-12-31 0001574540 doc:SouthCampusMOBMember 2019-12-31 0001574540 doc:LeesHillMedicalPlazaMember 2019-01-01 2019-12-31 0001574540 doc:FiveHundredLandmarkBloomingtonInMember 2019-12-31 0001574540 doc:TriosHealthMOBMember 2019-12-31 0001574540 doc:ZangmesiterColumbusOhMember 2019-12-31 0001574540 doc:JewishMedicalCenterSouthMOB2Member 2019-12-31 0001574540 doc:RiverviewMedicalCenterLancasterOHMember 2019-12-31 0001574540 doc:OrthopedicAssociatesMember 2019-12-31 0001574540 doc:WestTnBoneJointPhysiciansDriveJacksonTnMember 2019-01-01 2019-12-31 0001574540 doc:FirehouseSquareMilwaukeeWIMember 2019-12-31 0001574540 doc:HillsideMedicalCenterMOBMember 2019-12-31 0001574540 doc:St.AlexiusMedicalArtsPavilionMember 2019-12-31 0001574540 doc:SorrentoRoadMember 2019-12-31 0001574540 doc:OaksAtLadylakeLadyLakeFlMember 2019-12-31 0001574540 doc:UnityMedicalPavilionMember 2019-12-31 0001574540 doc:UnityFaithHopeLoveMember 2019-12-31 0001574540 doc:MidlandsOneProfessionalCenterMember 2019-12-31 0001574540 doc:AreteSurgicalCenterMember 2019-12-31 0001574540 doc:St.AlexiusMandanClinicMember 2019-12-31 0001574540 doc:LegendsParkMOBASCMember 2019-01-01 2019-12-31 0001574540 doc:Gwinnett500BuildingMember 2019-12-31 0001574540 doc:CHISt.VincentMercyCancerCenterMember 2019-12-31 0001574540 doc:HackleyMedicalCenterGrandRapidsMIMember 2019-12-31 0001574540 doc:RemingtonMedicalCommonsChicagoILMember 2019-12-31 0001574540 doc:St.AlexiusTechEdMember 2019-12-31 0001574540 doc:HealthEastCurveCrestMember 2019-01-01 2019-12-31 0001574540 doc:WestgateMOBMember 2019-12-31 0001574540 doc:MercyMedicalCenterMOBMember 2019-12-31 0001574540 doc:EmersonMedicalBuildingCreveCoeurMOMember 2019-12-31 0001574540 doc:Calkins500Member 2019-12-31 0001574540 doc:ThorntonNeighborhoodHealthMember 2019-12-31 0001574540 doc:JewishMedicalCenterEastMember 2019-12-31 0001574540 doc:IMSNorthMountainMOBMember 2019-01-01 2019-12-31 0001574540 doc:MiddletownMedical2EdgewaterWallkillNyMember 2019-12-31 0001574540 doc:LifecareLtachPittsburghPaMember 2019-12-31 0001574540 doc:SpringRidgeMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:MansfieldAscMansfieldTxMember 2019-01-01 2019-12-31 0001574540 doc:CambridgeProfessionalCenterMOBMember 2019-12-31 0001574540 doc:BatonRougeMOBMember 2019-01-01 2019-12-31 0001574540 doc:ElPasoLeeTrevinoElPasoTxMember 2019-12-31 0001574540 doc:LeesHillMedicalPlazaMember 2019-12-31 0001574540 doc:JacksonvilleMedPlexBuildingBMember 2019-12-31 0001574540 doc:SouthBendOrthopaedicsMedicalOfficeBuildingSouthBendInMember 2019-12-31 0001574540 doc:GrenadaMedicalComplexGrenadaMsMember 2019-12-31 0001574540 doc:ValleyWestHospitalMedicalOfficeBuildingChicagoILMember 2019-12-31 0001574540 doc:HonorHealthGlendaleGlendaleAZMember 2019-12-31 0001574540 doc:LifeCarePlanoLTACHPlanoTXMember 2019-12-31 0001574540 doc:PeachtreeDunwoodyMedicalOfficeBuildingCenterAtlantaGaMember 2019-12-31 0001574540 doc:NewAlbanyMedicalCenterMOBMember 2019-12-31 0001574540 doc:St.VincentFishersMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:SavageMedicalOfficeBuildingSavageMNMember 2019-12-31 0001574540 doc:IndianaAmericanIIMember 2019-01-01 2019-12-31 0001574540 doc:CincinnatiEyeInstituteMember 2019-12-31 0001574540 doc:MemorialOutpatientCenterMember 2019-12-31 0001574540 doc:HonorHealthIRFMember 2019-12-31 0001574540 doc:EyeCenterOfSouthernIndianaBloomingtonInMember 2019-12-31 0001574540 doc:SouthBendOrthopaedicsMedicalOfficeBuildingSouthBendInMember 2019-01-01 2019-12-31 0001574540 doc:St.AlexiusMinotMedicalPlazaMember 2019-01-01 2019-12-31 0001574540 doc:MidlandsTwoProfessionalCenterMember 2019-12-31 0001574540 doc:OrthoOneColumbusOhMember 2019-12-31 0001574540 doc:MontereyMedicalCenterASCStuartFLMember 2019-12-31 0001574540 doc:RiverviewMedicalCenterLancasterOHMember 2019-01-01 2019-12-31 0001574540 doc:NorthernOhioMedicalCenterMember 2019-12-31 0001574540 doc:SouthCampusMOBMember 2019-01-01 2019-12-31 0001574540 doc:CrystalMedicalOfficeBuildingCrystalMNMember 2019-12-31 0001574540 doc:CarrolltonMOBMember 2019-12-31 0001574540 doc:GreatFallsClinicMOBMember 2019-12-31 0001574540 doc:TwentyFirstCenturyRadiationOncologySarasotaFlMember 2019-12-31 0001574540 doc:Pinnacle4520UnionDepositHarrisburgPaMember 2019-12-31 0001574540 doc:BergerMedicalCenterColumbusOhMember 2019-12-31 0001574540 doc:GoodSamaritanMOBMember 2019-12-31 0001574540 doc:St.AlexiusOrthopaedicCenterMember 2019-12-31 0001574540 doc:CarlisleIiMobCarlislePaMember 2019-12-31 0001574540 doc:PremierSurgeryCenterofLouisvilleMember 2019-01-01 2019-12-31 0001574540 doc:HonorHealthMesaMOBMember 2019-01-01 2019-12-31 0001574540 doc:NOMSClydeMember 2019-12-31 0001574540 doc:ShellRidgePlazaBldg106Member 2019-12-31 0001574540 doc:St.JosephProfessionalOfficeBuildingMember 2019-12-31 0001574540 doc:MedicalSpecialistsofPalmBeachMOBMember 2019-12-31 0001574540 doc:FiveHundredFiftyLandmarkBloomingonInMember 2019-01-01 2019-12-31 0001574540 doc:St.JosephMedicalPavilionMember 2019-12-31 0001574540 doc:St.LukesCornwallMOBCornwallNYMember 2019-12-31 0001574540 doc:CareMountRhinebeckMOBMember 2019-12-31 0001574540 doc:N.W.MichiganSurgeryCenterUnits124Member 2019-12-31 0001574540 doc:SJRHCCancerCenterMember 2019-12-31 0001574540 doc:ProHealthMOBMember 2019-12-31 0001574540 doc:PalmBeachASCMember 2019-01-01 2019-12-31 0001574540 doc:ParkNicolletClinicChanhassenMNMember 2019-12-31 0001574540 doc:SurgicalInstituteOfMonroeMonroeMiMember 2019-01-01 2019-12-31 0001574540 doc:StGabrielsCentracareMember 2019-12-31 0001574540 doc:MedStarStephensCrossingMember 2019-01-01 2019-12-31 0001574540 doc:NorthernVisionEyeCenterMember 2019-01-01 2019-12-31 0001574540 doc:HotSpringsMOBMember 2019-12-31 0001574540 doc:FoleyVentureMember 2019-12-31 0001574540 doc:ParkviewMOBMember 2019-12-31 0001574540 doc:MemorialHermannPhaseIMember 2019-12-31 0001574540 doc:EyeAssociateofNMSantaFeSantaFeNMMember 2019-12-31 0001574540 doc:MissionaryRidgeMOBMember 2019-01-01 2019-12-31 0001574540 doc:JacksonvilleMedPlexBuildingCMember 2019-12-31 0001574540 doc:MinnesotaEyeMOBMember 2019-12-31 0001574540 doc:FairhopeMOBMember 2019-12-31 0001574540 doc:DaconoNeighborhoodHealthMember 2019-12-31 0001574540 doc:LegendsParkMOBASCMember 2019-12-31 0001574540 doc:AppleValleyMedicalCenterMember 2019-12-31 0001574540 doc:SpringwoodsMOBMember 2019-12-31 0001574540 doc:CoonRapidsMedicalCenterMOBMember 2019-01-01 2019-12-31 0001574540 doc:JewishMedicalPlazaIMember 2019-12-31 0001574540 doc:NorthsideCherokeeTowneLakeMOBMember 2019-12-31 0001574540 doc:GrandIslandSpecialtyClinicMember 2019-12-31 0001574540 doc:NewAlbanyProfessionalBuildingColumbusOHMember 2019-12-31 0001574540 doc:AuroraMedicalOfficeBuildingGreenBayWIMember 2019-12-31 0001574540 doc:NortheastMedicalCenterMember 2019-12-31 0001574540 doc:EastwindSurgicalCenterMember 2019-12-31 0001574540 doc:PerdidoMedicalParkMember 2019-12-31 0001574540 doc:PremierLandmarkMOBMember 2019-12-31 0001574540 doc:FoundationSurgicalAffiliatesMOBOklahomaCityOKMember 2019-12-31 0001574540 doc:St.AlexiusMinotMedicalPlazaMember 2019-12-31 0001574540 doc:StrictlyPediatricsSpecialtyCenterMember 2019-12-31 0001574540 doc:NewAlbanyProfessionalBuildingColumbusOHMember 2019-01-01 2019-12-31 0001574540 doc:IndianaAmericanIIMember 2019-12-31 0001574540 doc:CardwellMOBMember 2019-12-31 0001574540 doc:St.VincentWestMOBMember 2019-12-31 0001574540 doc:CoonRapidsMedicalCenterMOBMember 2019-12-31 0001574540 doc:MinnetonkaMOBMember 2019-12-31 0001574540 doc:McAuleyCenterMember 2019-01-01 2019-12-31 0001574540 doc:PanamaCityMember 2019-12-31 0001574540 doc:St.FrancisMOBMember 2019-01-01 2019-12-31 0001574540 doc:GwinnettPhysiciansCenterMember 2019-12-31 0001574540 doc:Pinnacle32NortheastHersheyPaMember 2019-12-31 0001574540 doc:CarlisleIiMobCarlislePaMember 2019-01-01 2019-12-31 0001574540 doc:GreatFallsHospitalGreatFallsMTMember 2019-01-01 2019-12-31 0001574540 doc:IndianaAmericanIVMember 2019-01-01 2019-12-31 0001574540 doc:ShellRidgePlazaBldg108Member 2019-12-31 0001574540 doc:BrookstonePhysicianCenterMOBMember 2019-12-31 0001574540 doc:NapoleonMobNewOrleansLaMember 2019-12-31 0001574540 doc:TwentyFirstCenturyRadiationOncologyVeniceFlMember 2019-12-31 0001574540 doc:ZangmesiterColumbusOhMember 2019-01-01 2019-12-31 0001574540 doc:CravenHaganClinicMember 2019-12-31 0001574540 doc:HackleyMedicalCenterGrandRapidsMIMember 2019-01-01 2019-12-31 0001574540 doc:LifecareLtachFtWorthTxMember 2019-12-31 0001574540 doc:St.MaryCaritasMedicalIIIMember 2019-12-31 0001574540 doc:EdinaEastMOBMember 2019-01-01 2019-12-31 0001574540 doc:IMSParadiseValleyMOBMember 2019-01-01 2019-12-31 0001574540 doc:MeadowViewProfessionalCenterKingsportTNMember 2019-12-31 0001574540 doc:WestTnBoneJointPhysiciansDriveJacksonTnMember 2019-12-31 0001574540 doc:MethodistSportsMOBMember 2019-12-31 0001574540 doc:St.LukesCornwallMOBCornwallNYMember 2019-01-01 2019-12-31 0001574540 doc:BaylorCancerCenterMember 2019-12-31 0001574540 doc:MemorialHealthCenterMember 2019-12-31 0001574540 doc:NashvilleMOBMember 2019-12-31 0001574540 doc:MissionaryRidgeMOBMember 2019-12-31 0001574540 doc:AtlantaCondominiumInvestmentsMember 2019-12-31 0001574540 doc:St.JosephMedicalClinicMember 2019-12-31 0001574540 doc:FiveHundredFiftyLandmarkBloomingonInMember 2019-12-31 0001574540 doc:St.FrancisMOBMember 2019-12-31 0001574540 doc:GrandIslandSpecialtyClinicMember 2019-01-01 2019-12-31 0001574540 doc:GoodSamaritanNorthAnnexBuildingMember 2019-01-01 2019-12-31 0001574540 doc:EyeAssociateofNMSantaFeSantaFeNMMember 2019-01-01 2019-12-31 0001574540 doc:UnityImmediateCareOCCMember 2019-12-31 0001574540 doc:DelSolMedicalCenterMOBElPasoTXMember 2019-12-31 0001574540 doc:EastElPasoMOBElPasoTXMember 2019-12-31 0001574540 doc:ParkviewMOBMember 2019-01-01 2019-12-31 0001574540 doc:LakesideTwoProfessionalBuildingMember 2019-12-31 0001574540 doc:FlowerMoundMOBMember 2019-12-31 0001574540 doc:FountainHillsMedicalCampusMOBMember 2019-12-31 0001574540 doc:ArrowheadCommonsPhoenixAZMember 2019-12-31 0001574540 doc:HealthEastCurveCrestMember 2019-12-31 0001574540 doc:CarmelMedicalPavilionCarmelInMember 2019-01-01 2019-12-31 0001574540 doc:JewishMedicalCenterSouthMOB1Member 2019-12-31 0001574540 doc:GreatFallsAmbulatorySurgeryCenterGreatFallsMTMember 2019-01-01 2019-12-31 0001574540 doc:CommonsonNorthDavisMember 2019-01-01 2019-12-31 0001574540 doc:FountainHillsMedicalCampusMOBMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansMedicalCenterMember 2019-12-31 0001574540 doc:MedicalVillageatMaitlandMember 2019-12-31 0001574540 doc:HEBCancerCenterBedfordTXMember 2019-01-01 2019-12-31 0001574540 doc:GardendaleSurgeryCenterGardendaleALMember 2019-12-31 0001574540 doc:ShellRidgePlazaBldg112Member 2019-12-31 0001574540 doc:IndianaAmericanIIIMember 2019-12-31 0001574540 doc:RandallRoadMOBMember 2019-12-31 0001574540 doc:EmersonMedicalBuildingCreveCoeurMOMember 2019-01-01 2019-12-31 0001574540 doc:CaremountLakeKatrineMOBMember 2019-01-01 2019-12-31 0001574540 doc:RockwellIIMOBMember 2019-12-31 0001574540 doc:ImmanuelOneProfessionalCenterMember 2019-01-01 2019-12-31 0001574540 doc:BaylorCancerCenterMember 2019-01-01 2019-12-31 0001574540 doc:MontereyMedicalcenterMOBMember 2019-12-31 0001574540 doc:NEHeartInstituteMedicalBuildingMember 2019-12-31 0001574540 doc:MeridanMOBMember 2019-12-31 0001574540 doc:DesertCoveMOBLLCMember 2019-01-01 2019-12-31 0001574540 doc:HudgensProfessionalBuildingMember 2019-01-01 2019-12-31 0001574540 doc:PeachtreeDunwoodyMedicalOfficeBuildingCenterAtlantaGaMember 2019-01-01 2019-12-31 0001574540 doc:ClearviewCancerInstituteMember 2019-12-31 0001574540 doc:St.MaryCaritasMedicalIIMember 2019-12-31 0001574540 doc:St.AlexiusMedicalArtsPavilionMember 2019-01-01 2019-12-31 0001574540 doc:McAuleyCenterMember 2019-12-31 0001574540 doc:CommonsonNorthDavisMember 2019-12-31 0001574540 doc:ColumbiaMOBHudsonNYMember 2019-01-01 2019-12-31 0001574540 doc:EdinaMedicalOfficeBuildingEdinaMNMember 2019-01-01 2019-12-31 0001574540 doc:Pinnacle32NortheastHersheyPaMember 2019-01-01 2019-12-31 0001574540 doc:CHISt.VincentMercyHeartVascularCenterMember 2019-01-01 2019-12-31 0001574540 doc:PilotMedicalCenterMember 2019-12-31 0001574540 doc:ChildrensHospitalMOBMember 2019-01-01 2019-12-31 0001574540 doc:PrairieCareMOBMember 2019-12-31 0001574540 doc:Pinnacle4518UnionDepositHarrisburgPaMember 2019-12-31 0001574540 doc:NorthsideMidtownMOBMember 2019-12-31 0001574540 doc:MurdockSurgeryCenterMember 2019-12-31 0001574540 doc:MontereyMedicalCenterASCStuartFLMember 2019-01-01 2019-12-31 0001574540 doc:FoundationHealthPlexOfSanAntonioTxMember 2019-01-01 2019-12-31 0001574540 doc:PanamaCityBeachMember 2019-01-01 2019-12-31 0001574540 doc:GigHarborMedicalPavilionMember 2019-12-31 0001574540 doc:LexingtonSurgeryCenterMember 2019-12-31 0001574540 doc:HazelwoodMedicalcommonsMember 2019-12-31 0001574540 doc:EdinaEastMOBMember 2019-12-31 0001574540 doc:JamestownMOBMember 2019-01-01 2019-12-31 0001574540 doc:ElPasoMurchisonElPasoTxMember 2019-12-31 0001574540 doc:St.JosephOfficeParkMember 2019-01-01 2019-12-31 0001574540 doc:MedicalArtsCenteratHarfordMember 2019-12-31 0001574540 doc:LittleFallsOrthopedicsMember 2019-01-01 2019-12-31 0001574540 doc:St.AlexiusRehabCenterMember 2019-01-01 2019-12-31 0001574540 doc:OrthoOneWestervilleOhMember 2019-01-01 2019-12-31 0001574540 doc:JewishOCCMember 2019-12-31 0001574540 doc:St.AlexiusMandanClinicMember 2019-01-01 2019-12-31 0001574540 doc:NOMSClydeMember 2019-01-01 2019-12-31 0001574540 doc:SpringRidgeMedicalCenterMember 2019-12-31 0001574540 doc:TwentyFirstCenturyRadiationOncologyVeniceFlMember 2019-01-01 2019-12-31 0001574540 doc:SavageMedicalOfficeBuildingSavageMNMember 2019-01-01 2019-12-31 0001574540 doc:MethodistSportsMOBMember 2019-01-01 2019-12-31 0001574540 doc:FoundationSurgicalHospitalOfSanAntonioTxMember 2019-12-31 0001574540 doc:Ft.WaltonBeachMember 2019-01-01 2019-12-31 0001574540 doc:St.MaryCaritasMedicalIMember 2019-12-31 0001574540 doc:MurdockSurgeryCenterMember 2019-01-01 2019-12-31 0001574540 doc:St.AlexiusTechEdMember 2019-01-01 2019-12-31 0001574540 doc:NortheastMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:PremierSurgeryCenterofLouisvilleMember 2019-12-31 0001574540 doc:ShellRidgePlazaBldg110Member 2019-12-31 0001574540 doc:FranklinMOBASCMember 2019-12-31 0001574540 doc:MemorialHermannPhaseIIMember 2019-01-01 2019-12-31 0001574540 doc:IMSNorthMountainMOBMember 2019-12-31 0001574540 doc:AppleValleyMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:JewishMedicalPlazaIIMember 2019-12-31 0001574540 doc:MedicalArtsPavilionMember 2019-12-31 0001574540 doc:EyeCenterOfSouthernIndianaBloomingtonInMember 2019-01-01 2019-12-31 0001574540 doc:HonorHealthMesaMOBMember 2019-12-31 0001574540 doc:GardendaleSurgeryCenterGardendaleALMember 2019-01-01 2019-12-31 0001574540 doc:ParkNicolletClinicChanhassenMNMember 2019-01-01 2019-12-31 0001574540 doc:RandallRoadMOBMember 2019-01-01 2019-12-31 0001574540 doc:Calkins200Member 2019-12-31 0001574540 doc:SpringwoodsMOBMember 2019-01-01 2019-12-31 0001574540 doc:Calkins500Member 2019-01-01 2019-12-31 0001574540 doc:HealthEastVictorGardensMember 2019-12-31 0001574540 doc:Pinnacle4520UnionDepositHarrisburgPaMember 2019-01-01 2019-12-31 0001574540 doc:SJRHCCancerCenterMember 2019-01-01 2019-12-31 0001574540 doc:Pinnacle240GrandviewCampHillPaMember 2019-01-01 2019-12-31 0001574540 doc:PerdidoMedicalParkMember 2019-01-01 2019-12-31 0001574540 doc:DesertCoveMOBLLCMember 2019-12-31 0001574540 doc:FoxValleyHematologyOncologyMember 2019-01-01 2019-12-31 0001574540 doc:UnityASCImagingMOBMember 2019-12-31 0001574540 doc:PensacolaCatalystMember 2019-01-01 2019-12-31 0001574540 doc:MississippiOrthoMedicalOfficeBuildingJacksonMsMember 2019-12-31 0001574540 doc:CommunityHealth7240Member 2019-12-31 0001574540 doc:St.VincentWomensCenterMember 2019-01-01 2019-12-31 0001574540 doc:BridgeportMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:DoctorsCommunityHospitalPOBMember 2019-01-01 2019-12-31 0001574540 doc:OaksAtLadylakeLadyLakeFlMember 2019-01-01 2019-12-31 0001574540 doc:SouthpointeMember 2019-01-01 2019-12-31 0001574540 doc:ThorntonNeighborhoodHealthMember 2019-01-01 2019-12-31 0001574540 doc:ShellRidgePlazaBldg112Member 2019-01-01 2019-12-31 0001574540 doc:DelSolMedicalCenterMOBElPasoTXMember 2019-01-01 2019-12-31 0001574540 doc:ProHealthMOBMember 2019-01-01 2019-12-31 0001574540 doc:UnityMedicalPavilionMember 2019-01-01 2019-12-31 0001574540 doc:NorthsideMOBCenterPointeMember 2019-12-31 0001574540 doc:FranklinMOBASCMember 2019-01-01 2019-12-31 0001574540 doc:St.ClareMedicalPavilionMember 2019-12-31 0001574540 doc:UnityASCImagingMOBMember 2019-01-01 2019-12-31 0001574540 doc:WoodlandsMedicalArtsCenterMember 2019-01-01 2019-12-31 0001574540 doc:TriosHealthMOBMember 2019-01-01 2019-12-31 0001574540 doc:EastwindSurgicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:BaylorCharlesA.SammonsCancerCenterMember 2019-01-01 2019-12-31 0001574540 doc:BrookstonePhysicianCenterMOBMember 2019-01-01 2019-12-31 0001574540 doc:OhioHealthSWHealthCenterMOBMember 2019-01-01 2019-12-31 0001574540 doc:FiveHundredSeventyFourLandmarkBloomingtonInMember 2019-12-31 0001574540 doc:HealthparkMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:CrystalMedicalOfficeBuildingCrystalMNMember 2019-01-01 2019-12-31 0001574540 doc:AuroraMedicalOfficeBuildingGreenBayWIMember 2019-01-01 2019-12-31 0001574540 doc:EaglePointMOBMember 2019-12-31 0001574540 doc:GrenadaMedicalComplexGrenadaMsMember 2019-01-01 2019-12-31 0001574540 doc:FairhopeMOBMember 2019-01-01 2019-12-31 0001574540 doc:ShellRidgePlazaBldg108Member 2019-01-01 2019-12-31 0001574540 doc:HotSpringsMOBMember 2019-01-01 2019-12-31 0001574540 doc:ElPasoKenworthyElPasoTxMember 2019-01-01 2019-12-31 0001574540 doc:HonorHealthIRFMember 2019-01-01 2019-12-31 0001574540 doc:DaconoNeighborhoodHealthMember 2019-01-01 2019-12-31 0001574540 doc:HMGMedicalPlazaMember 2019-01-01 2019-12-31 0001574540 doc:EastElPasoMOBElPasoTXMember 2019-01-01 2019-12-31 0001574540 doc:LakesideWellnessCenterMember 2019-01-01 2019-12-31 0001574540 doc:JewishMedicalCenterSouthMOB1Member 2019-01-01 2019-12-31 0001574540 doc:UniversityofMichiganNorthvilleMOBMember 2019-01-01 2019-12-31 0001574540 doc:FirehouseSquareMilwaukeeWIMember 2019-01-01 2019-12-31 0001574540 doc:JewishMedicalPlazaIMember 2019-01-01 2019-12-31 0001574540 doc:PremierLandmarkMOBMember 2019-01-01 2019-12-31 0001574540 doc:Calkins125Member 2019-01-01 2019-12-31 0001574540 doc:St.MaryCaritasMedicalIIIMember 2019-01-01 2019-12-31 0001574540 doc:GreatFallsClinicMOBMember 2019-01-01 2019-12-31 0001574540 doc:TwentyFirstCenturyRadiationOncologySarasotaFlMember 2019-01-01 2019-12-31 0001574540 doc:JewishMedicalCenterSouthMOB2Member 2019-01-01 2019-12-31 0001574540 doc:CommunityHealth7330Member 2019-01-01 2019-12-31 0001574540 doc:JacksonvilleMedPlexBuildingBMember 2019-01-01 2019-12-31 0001574540 doc:St.VincentBuildingMember 2019-01-01 2019-12-31 0001574540 doc:LifecareLtachPittsburghPaMember 2019-01-01 2019-12-31 0001574540 doc:LittleFallsDialysisCenterMember 2019-01-01 2019-12-31 0001574540 doc:CardwellMOBMember 2019-01-01 2019-12-31 0001574540 doc:Calkins200Member 2019-01-01 2019-12-31 0001574540 doc:StrictlyPediatricsSpecialtyCenterMember 2019-01-01 2019-12-31 0001574540 doc:IMSAvondaleMOBMember 2019-01-01 2019-12-31 0001574540 doc:LexingtonSurgeryCenterMember 2019-01-01 2019-12-31 0001574540 doc:FiveHundredLandmarkBloomingtonInMember 2019-01-01 2019-12-31 0001574540 doc:MauryRegionalHealthcareMOBMember 2019-01-01 2019-12-31 0001574540 doc:OrthoOneColumbusOhMember 2019-01-01 2019-12-31 0001574540 doc:CincinnatiEyeInstituteMember 2019-01-01 2019-12-31 0001574540 doc:ElPasoMurchisonElPasoTxMember 2019-01-01 2019-12-31 0001574540 doc:MedicalSpecialistsofPalmBeachMOBMember 2019-01-01 2019-12-31 0001574540 doc:HealthEastVictorGardensMember 2019-01-01 2019-12-31 0001574540 doc:IndianaAmericanIIIMember 2019-01-01 2019-12-31 0001574540 doc:IMSPalmValleyMOBMember 2019-01-01 2019-12-31 0001574540 doc:PanamaCityMember 2019-01-01 2019-12-31 0001574540 doc:HEBCancerCenterBedfordTXMember 2019-12-31 0001574540 doc:RockwellIIMOBMember 2019-01-01 2019-12-31 0001574540 doc:ShellRidgePlazaBldg110Member 2019-01-01 2019-12-31 0001574540 doc:FoundationSurgicalHospitalOfSanAntonioTxMember 2019-01-01 2019-12-31 0001574540 doc:HazelwoodMedicalcommonsMember 2019-01-01 2019-12-31 0001574540 doc:GoodSamaritanMOBMember 2019-01-01 2019-12-31 0001574540 doc:St.VincentCarmelWomensCenterMember 2019-01-01 2019-12-31 0001574540 doc:PrairieCareMOBMember 2019-01-01 2019-12-31 0001574540 doc:St.MaryCaritasMedicalIMember 2019-01-01 2019-12-31 0001574540 doc:GwinnettPhysiciansCenterMember 2019-01-01 2019-12-31 0001574540 doc:MiddletownMedical2EdgewaterWallkillNyMember 2019-01-01 2019-12-31 0001574540 doc:CreightonUniversityMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:NorthsideMidtownMOBMember 2019-01-01 2019-12-31 0001574540 doc:FoleyVentureMember 2019-01-01 2019-12-31 0001574540 doc:StGabrielsCentracareMember 2019-01-01 2019-12-31 0001574540 doc:Calkins300Member 2019-01-01 2019-12-31 0001574540 doc:RemingtonMedicalCommonsChicagoILMember 2019-01-01 2019-12-31 0001574540 doc:CommunityHealth7240Member 2019-01-01 2019-12-31 0001574540 doc:JewishMedicalCenterEastMember 2019-01-01 2019-12-31 0001574540 doc:FiveHundredSeventyFourLandmarkBloomingtonInMember 2019-01-01 2019-12-31 0001574540 doc:OrthopedicSportsInstituteoftheFoxValleyMember 2019-01-01 2019-12-31 0001574540 doc:DoctorsUnitedASCMember 2019-01-01 2019-12-31 0001574540 doc:NEHeartInstituteMedicalBuildingMember 2019-01-01 2019-12-31 0001574540 doc:MontereyMedicalcenterMOBMember 2019-01-01 2019-12-31 0001574540 doc:ValleyWestHospitalMedicalOfficeBuildingChicagoILMember 2019-01-01 2019-12-31 0001574540 doc:PinnacleMarketPlaceWayHarrisburgPaMember 2019-01-01 2019-12-31 0001574540 doc:SorrentoRoadMember 2019-01-01 2019-12-31 0001574540 doc:ElPasoLeeTrevinoElPasoTxMember 2019-01-01 2019-12-31 0001574540 doc:SummitUrologyBloomingtonInMember 2019-01-01 2019-12-31 0001574540 doc:St.ClareMedicalPavilionMember 2019-01-01 2019-12-31 0001574540 doc:JewishOCCMember 2019-01-01 2019-12-31 0001574540 doc:MercyMedicalCenterMOBMember 2019-01-01 2019-12-31 0001574540 doc:NorthernOhioMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:ShellRidgePlazaBldg114Member 2019-01-01 2019-12-31 0001574540 doc:WestgateMOBMember 2019-01-01 2019-12-31 0001574540 doc:LifeCarePlanoLTACHPlanoTXMember 2019-01-01 2019-12-31 0001574540 doc:UnityImmediateCareOCCMember 2019-01-01 2019-12-31 0001574540 doc:FoundationSurgicalAffiliatesMOBOklahomaCityOKMember 2019-01-01 2019-12-31 0001574540 doc:PhysiciansMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:JacksonvilleMedPlexBuildingCMember 2019-01-01 2019-12-31 0001574540 doc:HonorHealth44thStreetMOBMember 2019-01-01 2019-12-31 0001574540 doc:MedicalVillageatMaitlandMember 2019-01-01 2019-12-31 0001574540 doc:RenaissanceAmbulatorySurgeryCenterOshkoshWiMember 2019-01-01 2019-12-31 0001574540 doc:PinnacleHealthMedicalOfficeBuildingCarlislePaMember 2019-01-01 2019-12-31 0001574540 doc:CHISt.VincentMercyCancerCenterMember 2019-01-01 2019-12-31 0001574540 doc:GigHarborMedicalPavilionMember 2019-01-01 2019-12-31 0001574540 doc:Gwinnett500BuildingMember 2019-01-01 2019-12-31 0001574540 doc:MidlandsOneProfessionalCenterMember 2019-01-01 2019-12-31 0001574540 doc:PinnacleHealthMedicalOfficeBuildingHarrisburgPaMember 2019-01-01 2019-12-31 0001574540 doc:JewishMedicalPlazaIIMember 2019-01-01 2019-12-31 0001574540 doc:CrescentCitySurgicalCentreNewOrleansLAMember 2019-01-01 2019-12-31 0001574540 doc:MedicalArtsCenteratHarfordMember 2019-01-01 2019-12-31 0001574540 doc:OrthopedicAssociatesMember 2019-01-01 2019-12-31 0001574540 doc:St.JosephProfessionalOfficeBuildingMember 2019-01-01 2019-12-31 0001574540 doc:St.JosephMedicalClinicMember 2019-01-01 2019-12-31 0001574540 doc:HillsideMedicalCenterMOBMember 2019-01-01 2019-12-31 0001574540 doc:MeridanMOBMember 2019-01-01 2019-12-31 0001574540 doc:NorthMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:CareMountRhinebeckMOBMember 2019-01-01 2019-12-31 0001574540 doc:CambridgeProfessionalCenterMOBMember 2019-01-01 2019-12-31 0001574540 doc:RenaissanceOfficeBuildingMember 2019-01-01 2019-12-31 0001574540 doc:NapoleonMobNewOrleansLaMember 2019-01-01 2019-12-31 0001574540 doc:ClearviewCancerInstituteMember 2019-01-01 2019-12-31 0001574540 doc:HonorHealthScottsdaleMOBMember 2019-01-01 2019-12-31 0001574540 doc:MidCoastHospitalOfficeBuildingPortlandMEMember 2019-01-01 2019-12-31 0001574540 doc:PeakOneASCDomain 2019-01-01 2019-12-31 0001574540 doc:MedicalArtsPavilionMember 2019-01-01 2019-12-31 0001574540 doc:BergerMedicalCenterColumbusOhMember 2019-01-01 2019-12-31 0001574540 doc:FlowerMoundMOBMember 2019-01-01 2019-12-31 0001574540 doc:MidlandsTwoProfessionalCenterMember 2019-01-01 2019-12-31 0001574540 doc:ArrowheadCommonsPhoenixAZMember 2019-01-01 2019-12-31 0001574540 doc:Pinnacle4518UnionDepositHarrisburgPaMember 2019-01-01 2019-12-31 0001574540 doc:FoleyMOBMember 2019-01-01 2019-12-31 0001574540 doc:UnityFaithHopeLoveMember 2019-01-01 2019-12-31 0001574540 doc:Calkins400Member 2019-01-01 2019-12-31 0001574540 doc:MinnesotaEyeMOBMember 2019-01-01 2019-12-31 0001574540 doc:MiddletownMedical111MalteseWallkillNyMember 2019-01-01 2019-12-31 0001574540 doc:ChattanoogaHeartInstituteMember 2019-01-01 2019-12-31 0001574540 doc:MemorialHealthCenterMember 2019-01-01 2019-12-31 0001574540 doc:EaglePointMOBMember 2019-01-01 2019-12-31 0001574540 doc:NashvilleMOBMember 2019-01-01 2019-12-31 0001574540 doc:CarrolltonMOBMember 2019-01-01 2019-12-31 0001574540 doc:TriStateOrthopaedicsMOBMember 2019-01-01 2019-12-31 0001574540 doc:St.JosephMedicalPavilionMember 2019-01-01 2019-12-31 0001574540 doc:St.MaryCaritasMedicalIIMember 2019-01-01 2019-12-31 0001574540 doc:St.VincentPOB1BirminghamALMember 2019-01-01 2019-12-31 0001574540 doc:LifecareLtachFtWorthTxMember 2019-01-01 2019-12-31 0001574540 doc:CravenHaganClinicMember 2019-01-01 2019-12-31 0001574540 doc:NewAlbanyMedicalCenterMOBMember 2019-01-01 2019-12-31 0001574540 doc:LakesideTwoProfessionalBuildingMember 2019-01-01 2019-12-31 0001574540 doc:MeadowViewProfessionalCenterKingsportTNMember 2019-01-01 2019-12-31 0001574540 doc:NorthsideCherokeeTowneLakeMOBMember 2019-01-01 2019-12-31 0001574540 doc:HonorHealthGlendaleGlendaleAZMember 2019-01-01 2019-12-31 0001574540 doc:AtlantaCondominiumInvestmentsMember 2019-01-01 2019-12-31 0001574540 doc:EyeAssociateofNMAlbuquerqueAlbuquerqueNMMember 2019-01-01 2019-12-31 0001574540 doc:N.W.MichiganSurgeryCenterUnits124Member 2019-01-01 2019-12-31 0001574540 doc:VadnaisHeightsMOBMember 2019-01-01 2019-12-31 0001574540 doc:PilotMedicalCenterMember 2019-01-01 2019-12-31 0001574540 doc:MemorialHermannPhaseIMember 2019-01-01 2019-12-31 0001574540 doc:ShellRidgePlazaBldg106Member 2019-01-01 2019-12-31 0001574540 doc:St.VincentWestMOBMember 2019-01-01 2019-12-31 xbrli:shares iso4217:USD iso4217:USD xbrli:shares doc:instruments doc:construction_loan doc:transaction doc:joint_venture doc:properties doc:states doc:healthcareproperty xbrli:pure doc:buyout doc:land doc:segment doc:mezzanine_loan doc:buildings doc:mortgage
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-K
 
     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2019

     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from              to              
 
Commission file number: 001-36007 (Physicians Realty Trust)
Commission file number: 333-205034-01 (Physicians Realty L.P.)
 
PHYSICIANS REALTY TRUST
PHYSICIANS REALTY L.P.
(Exact Name of Registrant as Specified in Its Charter)
Maryland
Physicians Realty Trust
 
46-2519850
Delaware
(Physicians Realty L.P.)
 
80-0941870
(State of Organization)
 
(I.R.S. Employer Identification No.)
 
 
 
 
309 N. Water Street, Suite 500
 
53202
Milwaukee,
Wisconsin
 
(Address of Principal Executive Offices)
 
(Zip Code)
 
(414) 367-5600
(Registrant’s telephone number, including area code)
 
Securities registered under Section 12(b) of the Act:
Registrant
 
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
Physicians Realty Trust
 
Common Shares, $0.01 par value
 
DOC
 
New York Stock Exchange
 
Securities registered under Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 
Physicians Realty Trust        Yes No             Physicians Realty L.P.        Yes No     
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. 
Physicians Realty Trust        Yes No             Physicians Realty L.P.        Yes No
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Physicians Realty Trust        Yes No             Physicians Realty L.P.        Yes No     
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 
Physicians Realty Trust        Yes No             Physicians Realty L.P.        Yes ý No     
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Physicians Realty Trust
Large accelerated filer      Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company

Physicians Realty L.P.
Large accelerated filer      Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Physicians Realty Trust          Physicians Realty L.P.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). 
Physicians Realty Trust        Yes No             Physicians Realty L.P.        Yes No
 
The aggregate market value of Physicians Realty Trust’s common shares held by non-affiliates as of June 30, 2019 was approximately $3,211,607,603 based upon the closing price reported for such date on the New York Stock Exchange. There is no established trading market for units of Physicians Realty L.P.
 
As of February 21, 2020, there were 197,038,668 shares of Physicians Realty Trust’s common shares outstanding.
 
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Part III of this Annual Report on Form 10-K, to the extent not set forth in this Form 10-K, is incorporated herein by reference from Physicians Realty Trust’s definitive proxy statement relating to the annual meeting of shareholders to be held on May 6, 2020, to be filed with the Securities and Exchange Commission within 120 days after the end of the Registrant’s fiscal year ended December 31, 2019.




EXPLANATORY NOTE

This Annual Report on Form 10-K combines the Annual Reports on Form 10-K for the year ended December 31, 2019 of Physicians Realty Trust (the “Trust”), a Maryland real estate investment trust, and Physicians Realty L.P. (the “Operating Partnership”), a Delaware limited partnership. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” the “Company,” and “Physicians Realty” refer to the Trust, together with its consolidated subsidiaries, including the Operating Partnership. References to the “Operating Partnership” mean collectively the Operating Partnership together with its consolidated subsidiaries. In this report, all references to “common shares” refer to the common shares of the Trust and references to “our shareholders” refer to shareholders of the common shares of the Trust, the term “OP Units” refers to partnership interests of the Operating Partnership and the term “Series A Preferred Units” refers to Series A Participating Redeemable Preferred Units of the Operating Partnership. As of February 21, 2020, 116,110 Series A Preferred Units were outstanding.

The Trust is a self-managed real estate investment trust (“REIT”) formed primarily to acquire, selectively develop, own, and manage healthcare properties that are leased to physicians, hospitals, and healthcare delivery systems. The Trust operates in an umbrella partnership REIT structure (“UPREIT”) in which the Operating Partnership and its subsidiaries hold substantially all of the assets. 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.

The Trust conducts substantially all of its operations through the Operating Partnership. As of December 31, 2019, the Trust held a 97.1% interest in the Operating Partnership and owns no Series A Preferred Units. Apart from this ownership interest, the Trust has no independent operations.

Noncontrolling interests in the Operating Partnership, and shareholders’ equity of the Trust and partners’ capital of the Operating Partnership are the primary areas of difference between the consolidated financial statements of the Trust and those of the Operating Partnership. OP Units not owned by the Trust are accounted for as limited partners’ capital in the Operating Partnership’s consolidated financial statements and as noncontrolling interests in the Trust’s consolidated financial statements. The differences between the Trust’s shareholders’ equity and the Operating Partnership’s partners’ capital are due to the differences in the equity issued by the Trust and the Operating Partnership, respectively.

The Company believes combining the Annual Reports of the Trust and the Operating Partnership, including the notes to the consolidated financial statements, into this single report results in the following benefits:

a combined report enhances investors’ understanding of the Trust and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
a combined report eliminates duplicative disclosure and provides a more streamlined and readable presentation, as a substantial portion of the Company’s disclosure applies to both the Trust and the Operating Partnership; and
a combined report creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

To help investors understand the significant differences between the Trust and the Operating Partnership, this report presents the following separate sections for each of the Trust and the Operating Partnership:

the market for registrant’s common equity, related stockholder matters and issuer purchases of equity securities in Item 5 of this report;
selected financial data in Item 6 of this report;
the consolidated financial statements in Item 8 and Item 15 of this report;
certain accompanying notes to the consolidated financial statements, including Note 14 (Earnings Per Share and Earnings Per Unit) and Note 16 (Quarterly Data);
controls and procedures in Item 9A of this report; and
the certifications of the Chief Executive Officer and the Chief Financial Officer included as Exhibits 31 and 32 to this report.




PHYSICIANS REALTY TRUST AND PHYSICIANS REALTY L.P.
 
Annual Report on Form 10-K for the Year Ended December 31, 2019

 Table of Contents
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Forward-Looking Statements

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
This Annual Report on Form 10-K contains forward-looking statements made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts may be forward-looking statements within the meaning of the federal securities laws. In particular, statements pertaining to our capital resources, property performance and results of operations contain forward-looking statements. Likewise, all of our statements regarding anticipated growth in our funds from operations and anticipated market conditions, demographics and results of operations are forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology such as “believe,” “expect,” “outlook,” “continue,” “project,” “may,” “will,” “should,” “seek,” “approximately,” “intend,” “plan,” “pro forma,” “estimate,” or “anticipate” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, expectations, or intentions.
 
These forward-looking statements reflect the views of our management regarding current expectations and projections about future events and are based on currently available information. These forward-looking statements are not guarantees of future performance and involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data, or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

general economic conditions;

adverse economic or real estate developments, either nationally or in the markets where our properties are located;

our failure to generate sufficient cash flows to service our outstanding indebtedness, or our ability to pay down or refinance our indebtedness;

fluctuations in interest rates and increased operating costs;

the availability, terms and deployment of debt and equity capital, including our unsecured revolving credit facility;

our ability to make distributions on our common shares;

general volatility of the market price of our common shares;

our increased vulnerability economically due to the concentration of our investments in healthcare properties;

our geographic concentration in Texas causes us to be particularly exposed to downturns in the Texas economy or other changes in Texas market conditions;

changes in our business or strategy;

our dependence upon key personnel whose continued service is not guaranteed;

our ability to identify, hire, and retain highly qualified personnel in the future;

the degree and nature of our competition;

changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates, taxation of REITs, and similar matters;

defaults under or non-renewal of leases by tenants;

decreased rental rates or increased vacancy rates;
 
difficulties in identifying healthcare properties to acquire and completing acquisitions;

2



competition for investment opportunities;

any adverse effects to the business, financial position or results of operations of CommonSpirit Health, or one or more of the CommonSpirit Health-affiliated tenants, that impact the ability of CommonSpirit Health-affiliated tenants to pay us rent;

the impact of our investments in joint ventures we have and may make in the future;

the financial condition and liquidity of, or disputes with, any joint venture and development partners with whom we may make co-investments in the future;

cybersecurity incidents could disrupt our business and result in the compromise of confidential information;

our ability to operate as a public company;

changes in healthcare laws or government reimbursement rates;

changes in accounting principles generally accepted in the United States (GAAP);
 
lack of or insufficient amounts of insurance;
 
other factors affecting the real estate industry generally;

our failure to maintain our qualification as a REIT for U.S. federal income tax purposes;
 
limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes; and
 
other factors that may materially adversely affect us, or the per share trading price of our common shares, including:
 
the number of our common shares available for future issuance or sale;
our issuance of equity securities or the perception that such issuance might occur;
future debt;
failure of securities analysts to publish research or reports about us or our industry; and
securities analysts’ downgrade of our common shares or the healthcare-related real estate sector.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this report, except as required by applicable law. You should not place undue reliance on any forward-looking statements that are based on information currently available to us or the third parties making the forward-looking statements. For a further discussion of these and other factors that could impact our future results, performance or transactions, see Part I, Item 1A “Risk Factors” of this report.


3


PART I
 
ITEM 1. BUSINESS
 
Overview
 
Physicians Realty Trust, a Maryland real estate investment trust, and Physicians Realty L.P., a Delaware limited partnership, were organized in April 2013 to acquire, selectively develop, own and manage healthcare properties that are leased to physicians, hospitals, and healthcare delivery systems. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” the “Company,” and “Physicians Realty” refer to the Trust, together with its consolidated subsidiaries, including the Operating Partnership. References to the “Operating Partnership” mean collectively the Operating Partnership together with its consolidated subsidiaries. We completed our initial public offering (“IPO”) in July 2013. The Trust’s common shares are listed on the New York Stock Exchange (“NYSE”) and it is included in the MSCI US REIT Index.

We have grown our consolidated portfolio of gross real estate investments from approximately $124 million at the time of our IPO to approximately $4.7 billion as of December 31, 2019. As of December 31, 2019, our consolidated portfolio consisted of 258 healthcare properties located in 31 states with approximately 13,695,255 net leasable square feet, which were approximately 96% leased with a weighted average remaining lease term of approximately 7.4 years. As of December 31, 2019, approximately 90% of the net leasable square footage of our consolidated portfolio was either on campus with a hospital or other healthcare facility or strategically affiliated with a hospital or other healthcare provider organization.

We receive a cash rental stream from healthcare providers under our leases. Approximately 94% of the annualized base rent payments from our properties as of December 31, 2019 are from absolute and triple-net leases, pursuant to which the tenants are responsible for all operating expenses relating to the property, including but not limited to real estate taxes, utilities, property insurance, routine maintenance and repairs, and property management. This structure helps insulate us from increases in certain operating expenses and provides relatively predictable cash flow. We seek to structure our leases to generate attractive returns on a long-term basis. Our leases typically have initial terms of 5 to 15 years and include annual rent escalators of approximately 1.5% to 3.0%. Our operating results depend significantly upon the ability of our tenants to make required rental payments. We believe that our portfolio of medical office buildings and other healthcare facilities will enable us to generate stable cash flows over time because of the diversity of our tenants, staggered lease expiration schedule, long-term leases, and low historical occurrence of tenants defaulting under their leases. As of December 31, 2019, leases representing a percentage of our consolidated portfolio on the basis of leased square feet will expire as follows: 
Year
 
Portfolio Lease Expirations
MTM (1)
 
0.6%
2020
 
2.5%
2021
 
4.3%
2022
 
4.7%
2023
 
4.5%
2024
 
6.3%
2025
 
7.9%
2026
 
26.0%
2027
 
9.5%
2028
 
9.9%
2029
 
4.4%
Thereafter
 
19.4%
Total
 
100.0%
(1)
“MTM” means month-to-month. This line also includes 9 leases which expired on December 31, 2019, representing 0.2% of leased square feet.

We invest in real estate that is integral to providing high quality healthcare services. Our properties are typically located on a campus with a hospital or other healthcare facilities or strategically affiliated with a hospital or other healthcare system. We believe the impact of government programs and continuing trends in the healthcare industry create attractive opportunities for us to invest in healthcare-related real estate. Our management team has significant public healthcare REIT experience and has long established relationships with physicians, hospitals, and healthcare delivery system decision makers who we believe will provide quality investment and growth opportunities. Our principal investments include medical office

4



buildings, outpatient treatment facilities, and other real estate integral to health care providers. We seek to generate attractive risk-adjusted returns for our shareholders through a combination of stable and increasing dividends and potential long-term appreciation in the value of our properties and our common shares.
 
The Trust is a Maryland real estate investment trust and has elected to be taxed as a REIT for U.S. federal income tax purposes. We conduct our business through an umbrella partnership REIT structure in which our properties are owned by the Operating Partnership directly or through limited partnerships, limited liability companies, or other subsidiaries. The Trust is the sole general partner of the Operating Partnership and, as of February 21, 2020, owned approximately 97.2% of the OP Units.

Our Objectives and Growth Strategy

Overview

Our principal business objective is to provide attractive risk-adjusted returns to our shareholders through a combination of (i) sustainable and increasing rental revenue and cash flow that generate reliable, increasing dividends, and (ii) potential long-term appreciation in the value of our properties and common shares.

Our primary strategy to achieve our business objective is to utilize our physician and hospital relationships nationwide to identify off-market opportunities to invest in, own, and manage a diversified portfolio of high quality healthcare properties, and to understand our tenants’ real estate strategies, which we believe will drive high retention, high occupancy, and reliable, increasing rental revenue cash flow and growth.

We intend to grow our portfolio of high-quality healthcare properties leased to physicians, hospitals, healthcare delivery systems, and other healthcare providers primarily through acquisitions of existing healthcare facilities that provide stable revenue growth and predictable long-term cash flows. We may also selectively finance the development of new healthcare facilities through joint venture or fee arrangements with premier healthcare real estate developers. Generally, we expect to make investments in new development properties when approximately 80% or more of the development property has been pre-leased before construction commences. We seek to invest in properties where we can develop strategic alliances with financially sound healthcare providers and healthcare delivery systems that offer need-based healthcare services in sustainable healthcare markets. We focus our investment activity on the following types of healthcare properties:

medical office buildings (“MOB”);
outpatient treatment and diagnostic facilities;
physician group practice clinics;
ambulatory surgery centers; and
specialty hospitals and treatment centers.
 
We believe that trends such as shifting consumer preferences, limited space in hospitals, the desire of patients and healthcare providers to limit non-essential services provided in a hospital setting, and cost considerations continue to drive the industry towards performing more procedures in off-campus outpatient facilities versus the hospital setting. As these trends continue, we believe that demand for medical office buildings and similar healthcare properties away from hospital settings and in convenient locations to patients will continue to rise. We intend to exploit this trend and favor off-campus properties consistent with our investment philosophy and strategies.

While not our focus, we may choose to invest opportunistically in life science facilities, senior housing properties, and skilled nursing facilities. Consistent with the Trust’s qualification as a REIT, we may also opportunistically invest in companies that provide healthcare services, and in joint venture entities with operating partners structured to comply with the REIT Investment Diversification Act of 2007 (“RIDEA”).

In connection with our review and consideration of healthcare real estate investment opportunities, generally we take into account a variety of market considerations, including:

creditworthiness of the tenants, especially whether the property is anchored by a financially-sound healthcare delivery system or whether tenants have strong affiliation to a healthcare delivery system;
the performance of the local healthcare delivery system and its future prospects;
property location;
demand for medical office buildings and healthcare related facilities, current and future supply of competing properties, and occupancy and rental rates in the market;

5



population density and growth potential;
ability to achieve economies of scale with our existing medical office buildings and healthcare related facilities or anticipated investment opportunities; and
existing and potential competition from other healthcare real estate owners and operators.

We have maintained a conservative balance sheet while investing over $4.5 billion as of December 31, 2019 in real estate assets since our IPO in July 2013. For short-term funding purposes, we may borrow on our primary unsecured credit facility. From time to time, we replace these borrowings with long-term capital such as senior unsecured notes and equity, or alternative securities (i.e. debt convertible to equity). We may selectively utilize capital market transactions in furtherance of our investment strategy.

Business Strategy

We are focused on building and maintaining a portfolio of high-quality healthcare properties leased to physicians, hospitals, healthcare delivery systems, and other healthcare providers. Our investment strategy includes a focus on investments with the following key attributes:

We seek to invest in properties occupied by healthcare systems with dominant market share, high credit quality and those who are investing capital into their campuses. In particular, we seek to acquire off-market or selectively marketed assets with attractive demographics, economic growth, and high barriers to entry. We seek to own well occupied properties that we believe are critical to the delivery of healthcare and which are off-campus from a hospital.
We emphasize ensuring an appropriate and balanced mix of tenants to provide synergies within both individual buildings and the broader health system campus. Our primary tenants are healthcare systems, academic medical centers, and leading physician groups. These groups typically have strong and stable financial performance. We believe this helps ensure stability in our rental income and tenant retention over time.
We seek to maintain a core, critical portfolio of properties and to build our reputation as a dedicated leading MOB owner and operator.
We seek to maintain or increase our average rental rates, focus on actively leasing our vacant space, and reduce leasing concessions.

We seek to invest in properties where we can develop strategic alliances with financially sound healthcare providers and healthcare delivery systems that offer need-based healthcare services in sustainable healthcare markets and consider the potential for long-term relationships and repeat business when assessing acquisition potential.

We actively manage our balance sheet to maintain our investment grade credit rating, to maintain an appropriate level of leverage, and to preserve financing flexibility for funding of future acquisitions. In particular, we:

Seek to maintain a high level of liquidity, including borrowing availability under our unsecured revolving credit facility.
Maintain access to multiple sources of capital, including private debt issuances, public bond offerings, public equity offerings, unsecured bank loans, and equity from joint venture partners.
Periodically review our portfolio to consider the potential dispositions of lower quality properties to reinvest the proceeds into higher quality properties.
Closely monitor our existing debt maturities, average interest rates, and look for refinancing opportunities.
 

6


2019 Highlights and Other Recent Developments

Investment Activity

For the full year 2019, we completed acquisitions of 12 operating healthcare properties located in 6 states for an aggregate purchase price of approximately $128.2 million. In addition, the Company purchased a newly-constructed addition to an existing building owned by the Company in Tennessee for $4.3 million and funded $132.7 million of other investments, including real estate and construction loans, earn-out agreements, and buyouts of noncontrolling interests in existing properties owned by the Company. The Company also acquired membership interests in 2 joint ventures for approximately $64.9 million resulting in total consolidated investments of $330.1 million.

During 2019, we sold 6 medical office buildings located in 5 states for approximately $86.3 million and recognized a net gain of approximately $31.3 million.

Capital Markets and Dividends

During the fiscal year-ended December 31, 2019, we issued and sold pursuant to the 2016 ATM Program (as defined herein) 5,673,639 common shares at a weighted average price of $17.98 per share, resulting in net proceeds to us of approximately $101.0 million. During the fiscal year ended December 31, 2019, we issued and sold pursuant to the 2019 ATM Program (as defined herein) 1,617,500 common shares at a weighted average price of $18.84 per share, resulting in net proceeds to us of approximately $30.2 million. See to Note 1 (Organization and Business) to our accompanying consolidated financial statements for further detail.

Our Industry and Market Opportunity

The nature of healthcare delivery continues to evolve due to the impact of government programs, regulatory changes and consumer preferences. We believe these changes have increased the need for capital among healthcare providers and increased pressure on these providers to integrate more efficient real estate solutions in order enhance the delivery of quality healthcare. In particular, we believe the following factors and trends are creating an attractive environment in which to invest in healthcare properties.

$3.3 Trillion Healthcare Industry Projected to Grow to $6.0 Trillion (and 19.4% of U.S. GDP) by 2027

According to the U.S. Centers for Medicare & Medicaid Services (“CMS”), healthcare spending accounted for 17.7% of U.S. gross domestic product (“GDP”) in 2018. The general aging of the population, driven by the Baby Boomer generation and advances in medical technology and services which increase life expectancy, are key drivers of the growth in healthcare expenditures. The anticipated continuing increase in demand for healthcare services, together with an evolving complex and costly regulatory environment, changes in medical technology and reductions in government reimbursements are expected to pressure capital-constrained healthcare providers to find cost effective solutions for their real estate needs.


7



We believe the demand by healthcare providers for healthcare real estate will increase as healthcare spending in the United States continues to increase. According to the Centers for Medicare & Medicaid Services’ National Health Expenditure Projections 2018-2027, national healthcare expenditures continue to rise and are projected to grow from an estimated $3.6 trillion in 2018 to $6.0 trillion by 2027, representing an average annual rate of growth of 5.5%, reaching a projected 19.4% of GDP in 2027.

a2019healthexpendituresofgdp.jpg
Source: Centers for Medicare & Medicaid Services, Office of the Actuary

Aging Population

The aging of the U.S. population has a direct effect on the demand for healthcare as older persons generally utilize healthcare services at a rate well in excess of younger people. According to the U.S. Census Bureau, the U.S. population over 65 years of age is projected to more than double from 49.2 million to nearly 94.7 million, and the 85 and older population is expected to almost triple, from 6.4 million to 19.0 million, between 2016 and 2060. Also, according to the U.S. Census Bureau, the number of older Americans is growing as a percentage of the total U.S. population with the number of persons older than 65 estimated to comprise 15.2% of the total U.S. population in 2016 and projected to grow to 23.5% by 2060.

We believe that healthcare expenditures for the population over 65 years of age will continue to rise as a disproportionate share of healthcare dollars is spent on older Americans. To illustrate, in 2012 the elderly (65+ years old) represented only 14% of the population while accounting for 34% of all healthcare-related spending. We believe the older population group increasingly will require treatment and management of chronic and acute health ailments and that this increased demand for healthcare services will create a substantial need for additional medical office buildings and other facilities that serve the healthcare industry in many regions of the United States. Additionally, we believe there will likely be a focus on lowering the cost of outpatient care for the aging U.S. population, which will continue to support medical office and outpatient facility property demand in the long term. For example, beginning in 2019, CMS expanded the list of procedures that can be performed and reimbursed in outpatient surgery centers to include 12 cardiac catheterization diagnostic procedures and 5 ancillary procedures. CMS expanded this list to include an additional 20 procedures for 2020. We believe these trends will result in a substantial increase in the demand for healthcare space in our facilities and the number of properties meeting our investment criteria.


8



We believe advances in medical technology will continue to enable healthcare providers to identify and treat once fatal illnesses and improve the survival rate of critically ill and injured patients who will require continuing medical care in outpatient medical office buildings.

projecteduspopulationa63.jpg
Source: U.S. Census Bureau

Affordable Care Act

The Affordable Care Act (as hereinafter defined) constituted a significant overhaul of many aspects of healthcare regulations and health insurance and created the framework for healthcare services over the near term. It required every American to have health insurance or be subjected to a tax. Those who cannot afford health insurance are offered insurance subsidies or Medicaid coverage. On December 14, 2018, a federal district court in Texas ruled that the Affordable Care Act’s individual mandate was unconstitutional. That ruling was appealed and on December 18, 2019, a panel of the United States Court of Appeals for the Fifth Circuit in New Orleans struck down a central provision of the Affordable Care Act, ruling that the requirement that people have health insurance was unconstitutional. The appeals panel did not invalidate the rest of the law but sent the case back to a federal district judge in Texas to assess which of the law’s other parts should remain in force without the mandate. On January 21, 2020, the Supreme Court of the United States denied a motion to fast-track a review of the Fifth Circuit’s ruling, leaving the Affordable Care Act in place as appeals continue.

The U.S. Census Bureau estimated that approximately 50 million Americans did not have healthcare insurance in 2009, before the Affordable Care Act was enacted. The Department of Health and Human Services (“HHS”) reported that approximately 28.1 million Americans did not have health insurance in 2016. The Affordable Care Act and subsequent legislation, executive orders and events, as well as their potential impact on our business, are discussed more fully under Item 1, “Business,” under the caption “Certain Government Regulations.”

We believe an increase in the number of Americans with access to health insurance would result in an increase in physician office visits and an overall rise in healthcare utilization which in turn will drive a need for expansion of medical, outpatient, and smaller specialty hospital facilities. We also believe the increased dissemination of health research through media outlets, marketing of healthcare products, and availability of advanced screening techniques and medical procedures have contributed to a more engaged population of healthcare users and has created increased demand for customized facilities providing specialized, preventive and integrative healthcare services.

We further believe the provisions of the Affordable Care Act that are designed to lower certain reimbursement amounts under Medicare and tie reimbursement levels to the quality of services provided will increase the pressure on healthcare providers to become more efficient in their business models, invest capital in their businesses, lower costs and improve the quality of care, which in turn will drive healthcare systems to monetize their real estate assets and create demand for new, modern and specialized facilities.


9



Clinical Care Continues to Shift to Outpatient Care

According to the American Hospital Association, many procedures traditionally performed in hospitals, such as certain types of surgery, are increasingly moving to outpatient facilities driven by advances in clinical science, shifting consumer preferences, limited or inefficient space in existing hospitals, and lower costs in the outpatient environment. This continuing shift toward delivering healthcare services in an outpatient environment rather than a traditional hospital environment increases the need for additional outpatient facilities and smaller, more specialized and efficient hospitals. Studies by the Medicare Payment Advisory Commission and others have shown that healthcare is delivered more cost effectively and with higher patient satisfaction when it is provided on an outpatient basis. Increasingly, hospital admissions are reserved for the critically ill, and less critical patients are treated on an outpatient basis with recuperation in their own homes. We believe healthcare market trends toward outpatient care will continue to push healthcare services out of larger, older, inefficient hospitals and into newer, more efficient and conveniently located outpatient facilities and smaller specialized hospitals. We believe that increased specialization within the medical field is also driving demand for medical facilities designed specifically for particular specialties and that physicians want to locate their practices in medical office space that is in or adjacent to these facilities.

Impact of BBA on Outpatient Care   

Section 603 Assets: Section 603 of the Bipartisan Budget Act of 2015 (the “2015 BBA”) generally prohibits hospital outpatient departments (“HOPDs”) from charging preferential hospital outpatient department rates for Medicare patients treated in “off-campus” locations on or after January 1, 2017, potentially impacting their profitability. These preferential Medicare rates are only permitted if the hospital provides HOPD services in a building within 250 yards of the hospital’s main inpatient location. A hospital HOPD can be grandfathered by the 2015 BBA even if the location is outside the 250 yard distance. Under the statutory authority, an off-campus HOPD facility in existence as of November 2, 2015 can be “grandfathered” and can continue to be paid at the preferential HOPD rates, if, among other things, the hospital was billing HOPD services in that location on a HOPD basis as of November 2, 2015 and continues to provide those services in that location. On November 21, 2018, the Secretary issued a final rule, effective January 1, 2019, that eliminates the higher, Outpatient Prospective Payment System reimbursement rate for evaluation and management services provided by Grandfathered HOPD locations (the “Final Rule”). The Secretary, instead, will only reimburse for evaluation and management services at the lower, Medicare Physician Fee Schedule rate that new non-grandfathered off-campus HOPD locations receive. The American Hospital Association (the “AHA”) and a number of hospitals have sued the Secretary in federal court to enforce the plain meaning of Section 603 of the 2015 BBA and restore the right to Grandfathered HOPD reimbursement rates. On September 17, 2019, a federal district judge ruled in favor of the AHA. The court stated that CMS did not have the authority to lower payments for off-campus hospital-based departments that were grandfathered under the 2015 BBA. CMS challenged this ruling and requested a stay in the decision, which the court denied on October 21, 2019. “Grandfathered” hospitals providing HOPD services in our portfolio are referred to as 603 assets in our SEC reports and other public disclosures.

We own a number of assets that will continue to be reimbursed at hospital outpatient department rates, which we refer to as “603 assets” after the applicable section of the 2015 BBA. Rent derived from these 603 assets accounts for approximately 17% of our total consolidated portfolio annualized base rent as of December 31, 2019. Depending upon the implementation of the regulations, the 2015 BBA may enhance the value of these 603 assets because existing HOPDs may lose their higher reimbursements rates should they choose to change locations, thus enhancing lease renewal probabilities and rent growth.

Portfolio Summary
 
Please see “Item 2. Properties” for a table that summarizes our consolidated portfolio as of December 31, 2019.
 
Geographic Concentration
 
As of December 31, 2019, approximately 13.8% of our consolidated gross leasable area was derived from properties located in Texas

As a result of this geographic concentration, we are particularly exposed to downturns in the Texas economy or other changes in local real estate market conditions. Any material change in the current payment programs or regulatory, economic, environmental, or competitive conditions in Texas could have a disproportionate effect on our overall business results. In the event of negative economic or other changes in the Texas market, our business, financial condition, and results of operations, our ability to make distributions to our shareholders and the market price of our common shares may be adversely affected. See the discussion under Item 1A, “Risk Factors,” under the caption, “Economic and other conditions that negatively affect geographic areas in which we conduct business, and in particular Texas, and other areas to which a greater percentage of our revenue is attributed could materially adversely affect our business, results of operations, and financial condition.”

10


Customer Concentration
 
We receive substantially all of our revenue as rent payments from tenants under leases of space in our healthcare properties, with our five largest tenants based upon rental revenue representing approximately $57.6 million, or 19.5%, of the annualized base rent from our consolidated properties as of December 31, 2019. No one tenant represents more than 5.7% of our total consolidated annualized base rent; however, 16.7% of our total consolidated annualized base rent as of December 31, 2019 is from tenants affiliated with CommonSpirit Health. We have no control over the success or failure of our tenants’ businesses and, at any time, any of our tenants may experience a downturn in its business that may weaken its financial condition. Our business, financial position, or results of operation could be materially adversely affected if CommonSpirit Health were to experience a material adverse effect on its business, financial position, or results of operations.
 
Competition
 
We compete with many other entities engaged in real estate investment activities for acquisitions of healthcare properties, including national, regional and local operators, acquirers, and developers of healthcare-related real estate properties and other investors such as private equity firms, some of whom may have greater financial resources and lower costs of capital than we do. The competition for healthcare-related real estate properties may significantly increase the price that we must pay for healthcare properties or other assets that we seek to acquire, and our competitors may succeed in acquiring those properties or assets themselves. In addition, our potential acquisition targets may find our competitors to be more attractive because they may have greater resources, may be willing to pay more for the properties or may have a more compatible operating philosophy. In particular, larger REITs that target healthcare properties may enjoy significant competitive advantages that result from, among other things, a lower cost of capital, enhanced operating efficiencies, more personnel, and market penetration and familiarity with markets. In addition, the number of entities and the amount of funds competing for suitable investment properties may increase. Increased competition would result in increased demand for the same assets and therefore increase prices paid for them. Those higher prices for healthcare properties or other assets may adversely affect our returns from our investments.

We also face competition in leasing available MOBs and other facilities that serve the healthcare industry to prospective tenants. As a result, we may have to provide rent concessions, incur charges for tenant improvements, offer other inducements, or we may be unable to timely lease vacant space in our properties, all of which may have a material adverse impact on our results of operations.
 
Seasonality
 
Our business has not been, and we do not expect it to become, subject to material seasonal fluctuations.
 
Employees
 
At December 31, 2019, we had 77 full-time employees, none of whom are subject to a collective bargaining agreement. We believe that relations with our employees are positive.

Environmental Matters
 
As an owner of real estate, we are subject to various federal, state, and local environmental laws, regulations, and ordinances and also could be liable to third parties as a result of environmental contamination or noncompliance at our properties even if we no longer own such properties. See the discussion under Item 1A, “Risk Factors,” under the caption “Environmental compliance costs and liabilities associated with owning, leasing, developing and operating our properties may affect our results of operations.”


11


Certain Government Regulations

Overview
 
Our tenants and operators are typically subject to extensive and complex federal, state, and local healthcare laws and regulations relating to fraud and abuse practices, government reimbursement, licensure, protection of patient health information, and certificate of need and similar laws governing the operation of healthcare facilities, and we expect that the healthcare industry, in general, will continue to face increased regulation and pressure in the areas of fraud, waste and abuse, cost control, healthcare management, and provision of services, among others. These regulations are wide-ranging and can subject our tenants and operators to civil, criminal and administrative sanctions. Affected tenants and operators may find it increasingly difficult to comply with this complex and evolving regulatory environment because of a relative lack of guidance in many areas as certain of our healthcare properties are subject to oversight from several government agencies and the laws may vary from one jurisdiction to another. Changes in laws and regulations, reimbursement enforcement activity and regulatory non-compliance by our tenants and operators can all have a significant effect on their operations and financial condition, which in turn may adversely impact us, as detailed below and set forth under Item 1A, “Risk Factors,” under the caption “The healthcare industry is heavily regulated, and new laws or regulations, changes to existing laws or regulations, loss of licensure, or failure to obtain licensure could adversely impact our company and result in the inability of our tenants to make rent payments to us.”

In 2017, Congress came within a single vote of repealing of the Affordable Care Act and substantially reducing funding to the Medicaid program. New legislation may be introduced in the future, proposing changes, if not full repeal of the Affordable Care Act. Beyond this, significant changes to commercial health insurance and government-sponsored insurance (i.e., Medicare and Medicaid) remain possible. Commercial and government payors are likely to continue imposing larger discounts and tighter cost controls upon operators, through reductions in reimbursement rates and changes in payment methodologies, discounted fee structures, the assumption by healthcare providers of all or a portion of the financial risk or otherwise. A shift toward less comprehensive health insurance coverage and increased consumer cost-sharing on health expenditures could have a material adverse effect on certain of our operators’ liquidity, financial condition, and results of operations and, in turn, their ability to satisfy their contractual obligations, including making rental payments under and otherwise complying with the terms of our leases.
The following is a discussion of certain laws and regulations generally applicable to our operators, and in certain cases, to us.
 
Healthcare Legislation

Health Reform Laws. On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act”) and the Health Care and Education Reconciliation Act of 2010, which amends the Affordable Care Act (collectively with other subsequently enacted federal health care laws and regulations, the “Health Reform Laws”). The Health Reform Laws contain various provisions that may directly impact us or the operators and tenants of our properties. Some provisions of the Health Reform Laws may have a positive impact on our operators’ or tenants’ revenues, by, for example, increasing coverage of uninsured individuals, while others may have a negative impact on the reimbursement of our operators or tenants by, for example, altering the market basket adjustments for certain types of health care facilities. The Health Reform Laws also enhance certain fraud and abuse penalty provisions that could apply to our operators and tenants, in the event of one or more violations of the federal health care regulatory laws. In addition, there are provisions that impact the health coverage that we and our operators and tenants provide to our respective employees. The Health Reform Laws also provide additional Medicaid funding to allow states to carry out the expansion of Medicaid coverage to certain financially-eligible individuals beginning in 2014, and have also permitted states to expand their Medicaid coverage to these individuals since April 1, 2010, if certain conditions are met. On June 28, 2012, the United States Supreme Court upheld the individual mandate of the Health Reform Laws but partially invalidated the expansion of Medicaid. The ruling on Medicaid expansion allows states not to participate in the expansion-and to forego funding for the Medicaid expansion-without losing their existing Medicaid funding. As of December 1, 2019, 14 states have pursued this option not to adopt the Medicaid expansion. Thirty-six states and the District of Columbia have adopted the expansion. The participation by states in the Medicaid expansion could have the dual effect of increasing our tenants’ revenues, through new patients, but could also further strain state budgets. While the federal government paid for approximately 100% of those additional costs from 2014 to 2016, states now are expected to pay for part of those additional costs. 

Challenges to the Health Reform Laws and Potential Repeal and/or Further Reforms under Trump Administration. Since the enactment of the Health Care Laws, there have been multiple attempts through legislative action and legal challenge to repeal or amend the Health Reform Laws, including the case that was before the U.S. Supreme Court, King v. Burwell.

12


Although the Supreme Court in Burwell upheld the use of subsidies to individuals in federally-facilitated health care exchanges on June 25, 2015, which ultimately did not disrupt significantly the implementation of the Health Reform Laws, we cannot predict whether other current or future efforts to repeal, amend or challenge the validity of all or part of the Health Reform Laws will be successful, nor can we predict the impact that such a repeal, amendment or challenge would have on our operators or tenants and their ability to meet their obligations to us.

In 2017, President Trump and Congress unsuccessfully sought to repeal and replace the Affordable Care Act. On January 20, 2017, President Trump issued an Executive Order stating that it is the administration’s official policy to repeal the Affordable Care Act and instructing the Secretary of Health and Human Services and the heads of all other executive departments and agencies with authority and responsibility under the Affordable Care Act to, among other matters, delay implementation of or grant an exemption from any provision of the Affordable Care Act that would impose a fiscal burden on any state or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, and others. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law. The Tax Act, among other things, reduces the Affordable Care Act’s individual mandate penalty to zero beginning in 2019. The elimination of the penalties does not remove the requirement to obtain healthcare coverage; however, without penalties there effectively will be no enforcement. On December 14, 2018, a federal district court in Texas ruled that the Affordable Care Act’s individual mandate was unconstitutional. The court also ruled that the provisions of the individual mandate were not severable from the remainder of the Affordable Care Act, rendering the remainder of the Affordable Care Act invalid as well. That ruling was appealed and on December 18, 2019, a panel of the United States Court of Appeals for the Fifth Circuit in New Orleans struck down a central provision of the Affordable Care Act, ruling that the requirement that people have health insurance was unconstitutional. The appeals panel did not invalidate the rest of the law but sent the case back to a federal district judge in Texas to assess which of the law’s other parts should remain in force without the mandate. On January 21, 2020, the Supreme Court of the United States denied a motion to fast-track a review of the Fifth Circuit’s ruling, leaving the Affordable Care Act in place as appeals continue.

It is possible that Congress will continue to consider other legislation to repeal the Affordable Care Act or repeal and replace some or all elements of the Affordable Care Act.

The US Department of Labor (“DOL”) issued a final rule on June 21, 2018 authorizing the creation of Association Health Plans (“AHP”). This rule was one of three components of a 2017 Executive Order to increase consumer health insurance options and also created short-term limited duration health insurance and health reimbursement arrangements. On March 28, 2019, the US District Court for the District of Columbia vacated the AHP. On April 26, 2019, the DOJ appealed that decision.
On June 24, 2019, the President signed an Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First. The Order was intended to increase the availability of meaningful price and quality information for patients. CMS included in its final rule for Medicare hospital outpatient payment, the requirement that hospitals make public their standard charges, along with payer-specific negotiated rates, in a consumer-friendly format. This requirement was to be effective January 1, 2020. On November 19, 2019, the AHP and other hospital groups announced their intention to sue DHHS/CMS to prevent implementation of this price transparency rule. The availability of hospital charges may give patients information to select physician office-based care rather than in the hospital.
We cannot predict the effect of the Executive Orders, the Tax Act’s 2019 repeal of the individual mandate penalty on the Affordable Care Act, or the Texas court’s decision or any appeal thereof, the decision on the AHP rule or any appeal thereof, other state-based litigation, or whether Congress’ attempt to repeal or repeal and replace the law will be successful. Further, we cannot predict how the Affordable Care Act might be amended or modified, either through the legislative or judicial process, and how any such modification might impact our tenants’ operations or the net effect of this law on us. If the operations, cash flows or financial condition of our operators and tenants are materially adversely impacted by any repeal or modification of the law, our revenue and operations may be materially adversely affected as well.

Fraud and Abuse Enforcement
 
There are various extremely complex federal and state laws and regulations governing healthcare providers’ relationships and arrangements and prohibiting fraudulent and abusive practices by such providers. These laws include (i) federal and state false claims acts, which, among other things, prohibit providers from filing false claims or making false statements to receive payment from Medicare, Medicaid or other federal or state healthcare programs, (ii) federal and state anti-kickback and fee-splitting statutes, including the Medicare and Medicaid anti-kickback statute, which prohibit the payment or receipt of remuneration to induce referrals or recommendations of healthcare items or services, (iii) federal and state physician self-referral laws (commonly referred to as the “Stark Law”), which generally prohibit referrals by physicians to entities with which the physician or an immediate family member has a financial relationship, (iv) the federal Civil Monetary Penalties Law,

13


which prohibits, among other things, the knowing presentation of a false or fraudulent claim for certain healthcare services and (v) federal and state privacy laws, including the privacy and security rules contained in the Health Insurance Portability and Accountability Act of 1996, which provide for the privacy and security of personal health information. Violations of healthcare fraud and abuse laws carry civil, criminal and administrative sanctions, including punitive sanctions, monetary penalties, imprisonment, denial of Medicare and Medicaid reimbursement, and potential exclusion from Medicare, Medicaid, or other federal or state healthcare programs. These laws are enforced by a variety of federal, state, and local agencies and can also be enforced by private litigants through, among other things, federal and state false claims acts, which allow private litigants to bring qui tam or “whistleblower” actions. Many of our operators and tenants are subject to these laws, and some of them may in the future become the subject of governmental enforcement actions if they fail to comply with applicable laws.
 
Reimbursement
 
Sources of revenue for many of our tenants and operators include, among other sources, governmental healthcare programs, such as the federal Medicare program, state Medicaid programs, and non-governmental payors, such as insurance payors, managed care organizations (MCOs), health maintenance organizations (HMOs), and Accountable Care Organizations (ACOs). As federal and state governments focus on healthcare reform initiatives, and as the federal government and many states face significant budget deficits, efforts to reduce costs by these payors will likely continue, which may result in reduced or slower growth in reimbursement for certain services provided by some of our tenants and operators.

We cannot predict whether future Congressional proposals will seek to reduce physician reimbursements. Efforts by other payors to reduce healthcare costs are likely to continue, which may result in reductions or slower growth in reimbursement for certain services provided by some of our tenants. Further, revenue realizable under third-party payor agreements can change after examination and retroactive adjustment by payors during the claims settlement process or as a result of post-payment audits. For example, payors may disallow requests for reimbursement based on determinations that certain costs are not reimbursable or reasonable, because additional documentation is necessary or because certain services were not covered or were not medically necessary. The Healthcare Reform Laws and regulatory changes could impose further limitations on government and private payments to healthcare providers. In some cases, states have enacted or are considering enacting measures designed to reduce their Medicaid expenditures and to make changes to private healthcare insurance. In addition, the failure of any of our tenants to comply with various laws and regulations could jeopardize their ability to continue participating in Medicare, Medicaid, and other government sponsored payment programs. The financial impact on our tenants’ failure to comply with such laws and regulations could restrict their ability to make rent payments to us.
 
Healthcare Licensure and Certificate of Need
 
Certain healthcare facilities in our portfolio are subject to extensive federal, state and local licensure, certification and inspection laws, and regulations. In addition, various licenses and permits are required to dispense narcotics, operate pharmacies and laboratories, handle radioactive materials, and operate equipment. Many states require certain healthcare providers to obtain a certificate of need, which requires prior approval for the construction, expansion, and closure of certain healthcare facilities. The approval process related to state certificate of need laws may impact some of our tenants’ and operators’ abilities to expand or change their businesses.

Available Information
 
Our website address is www.docreit.com. We make available, free of charge through the Investor Relations portion of the website, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC” or the “Commission”). Reports of beneficial ownership filed pursuant to Section 16(a) of the Exchange Act are also available on our website. These reports and other information are also available, free of charge, at www.sec.gov.
 
In addition, the Trust’s Board of Trustees has established a Code of Business Conduct and Ethics that applies to our officers, including our President and Chief Executive Officer, Chief Financial Officer, trustees, and employees. The Code of Business Conduct and Ethics provides a statement of the Company’s policies and procedures for conducting business legally and ethically. A copy of the Code of Business Conduct and Ethics is available in the Investor Relations section of our website (www.docreit.com) under the tab “Corporate Information - Governance Documents.” Any amendments to or waivers from the Code of Business Conduct and Ethics will be disclosed on our website. Information contained on our website is not part of this report.


14


ITEM 1A. RISK FACTORS
 
The following summarizes the material risks of purchasing or owning our securities. Additional unknown risks may also impair our financial performance and business operations. Our business, financial condition, and/or results of operation may be materially adversely affected by the nature and impact of these risks. In such case, the market value of our securities could be detrimentally affected, and investors may lose part or all of the value of their investment. You should carefully consider the risks and uncertainties described below.

 We have grouped these risk factors into the following general categories:

Risks related to our business;
Risks related to the healthcare industry; 
Risks related to the real estate industry; 
Risks related to financings;
Risks related to our portfolio and structure; and 
Risks related to our qualification and operation as a REIT.
 
Risks Related To Our Business

Our real estate investments are concentrated in healthcare properties, and any downturn in the healthcare industry could materially affect our business.

We acquire, own, manage, operate, and selectively develop properties for lease primarily to physicians, hospitals, and healthcare delivery systems. We are subject to risks inherent in concentrating investments in real estate, and further from the concentration of our investments in the healthcare sector. Any adverse effects that result from these risks could be more pronounced than if we diversified our investments outside of healthcare properties. Given our concentration in this sector, our tenant base is especially concentrated and dependent upon the healthcare industry generally, and any industry downturn could adversely affect the ability of our tenants to make lease payments and our ability to maintain current rental and occupancy rates. Our tenant mix could become even more concentrated if a significant portion of our tenants practice in a particular medical field or are reliant upon a particular healthcare delivery system. Accordingly, a downturn in the healthcare industry generally, or in the healthcare-related facility specifically, could adversely affect our business, financial condition, and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares.
 
Economic and other conditions that negatively affect geographic areas in which we conduct business, and in particular Texas, and other areas to which a greater percentage of our revenue is attributed could materially adversely affect our business, results of operations, and financial condition.

Our operating results depend upon our ability to maintain and increase occupancy levels and rental rates at our properties. Adverse economic or other conditions in the geographic markets in which we operate, including periods of economic slowdown or recession, industry slowdowns, periods of deflation, relocation of businesses, changing demographics, hurricanes, tornadoes, floods, the effects of climate change, earthquakes and other natural disasters, fires, terrorist acts, civil disturbances or acts of war, and other man-made disasters which may result in uninsured or underinsured losses, and changes in tax, real estate, zoning, and other laws and regulations, may lower our occupancy levels and limit our ability to increase rents or require us to offer rental concessions. 
 
As of December 31, 2019, approximately 1.9 million square feet of our gross leasable area and $45.6 million of our total consolidated annualized base rent was derived from properties located in Texas (13.8% of our gross leasable area and 15.5% of our total consolidated annualized base rent). As a result of these geographic concentrations, we are particularly exposed to downturns in the Texas economy or other changes in local real estate market conditions. Any material change in the current payment programs or regulatory, economic, environmental, or competitive conditions in Texas could have a disproportionate effect on our overall business results. In the event of negative economic or other changes in any of the markets in which we conduct business, our business, financial condition, and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares may be adversely affected.


15


We have and may in the future make investments in joint ventures, which could be adversely affected by our lack of decision-making authority, our reliance upon our joint venture partners’ financial condition, any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint venture partners.

We have and may in the future make co-investments with third parties through partnerships, joint ventures, or other entities, acquiring noncontrolling interests in or sharing responsibility for the management of the affairs of a property, partnership, joint venture or other entity. Joint ventures generally involve risks not present with respect to our wholly-owned properties, including the following:

our joint venture partners may make decisions with which we disagree or that are not in our best interest;

we may be prevented from taking actions that are opposed by our joint venture partners;

our ability to transfer our interest in a joint venture to a third party may be restricted;

our joint venture partners might become bankrupt or fail to fund their share of required capital contributions which may delay construction or development of a healthcare related facility or increase our financial commitment to the joint venture;

our joint venture partners may have economic or business interests or goals with respect to the healthcare related facility or the joint venture that conflict with our business interests and goals which could increase the likelihood of disputes regarding the ownership, management or disposition of the healthcare related facility or the joint venture may compete with us for property acquisitions;

disputes may develop with our joint venture partners over decisions affecting the healthcare related facility or the joint venture which may result in litigation or arbitration that would increase our expenses and distract our officers and/or trustees from focusing their time and effort on our business and possibly disrupt the daily operations of the healthcare related facility; and

we may suffer losses as a result of the actions of our joint venture partners with respect to our joint venture investments.

Joint venture investments involve risks that may not be present with other methods of ownership. In addition to those risks identified above, our partners may be in a position to take action or withhold consent contrary to our instructions or requests. In the future, in certain instances, we or our partners may have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partners’ interest, at a time when we otherwise would not have initiated such a transaction. Our ability to acquire our partners’ interest may be limited if we do not have sufficient cash, available borrowing capacity, or other capital resources. In such event, we may be forced to sell our interest in the joint venture when we would otherwise prefer to retain it. Joint ventures may require us to share decision-making authority with our partners, which could limit our ability to control the properties in the joint ventures. Even when we have a controlling interest, certain major decisions may require partner approval, such as the sale, acquisition or financing of a property.

Our healthcare properties and tenants face competition from nearby hospitals and other healthcare properties, and we may not realize the benefits that we anticipate from focusing on healthcare properties that are strategically aligned with a healthcare delivery system and from the relationships established through such strategic alignments. Further, we may not be able to maintain or expand our relationships with our existing and future hospital and healthcare delivery system clients.
 
As part of our business strategy, we focus on healthcare properties that are strategically aligned with a healthcare delivery system by (i) seeking to acquire, own, manage, and develop healthcare properties that are located on medical campuses where the underlying land is owned by a healthcare delivery system or by us, or (ii) seeking to acquire, own, manage, and develop healthcare properties located in close proximity to a healthcare delivery system or strategically aligned with a healthcare delivery system through leasing or other arrangements. We may not realize the benefits that we anticipate as a result of these strategic relationships, such as increased rents and reduced tenant turnover rates as compared to healthcare properties that are not strategically aligned. Moreover, building a portfolio of healthcare properties that are strategically aligned does not assure the success of any given property. The associated healthcare delivery system may not be successful and the strategic alignment that we seek for our healthcare properties could dissolve, and we may not succeed in replacing them. In addition, our healthcare properties, the associated healthcare delivery systems with which our healthcare properties are strategically aligned, and our tenants may be unable to compete successfully with nearby hospitals, medical practices, other healthcare properties that

16


provide comparable services, pharmacies and other retailers that may initiate or expand healthcare clinic operations and services to compete with our tenants. Any of our properties may be materially and adversely affected if the healthcare delivery system with which it is strategically aligned is unable to compete successfully. If we do not realize the benefits that we anticipate from our business strategy and our strategic alignments dissolve and we are not successful in replacing them, our reputation, business, financial results, and prospects may be adversely affected.

The success of our business depends, to a large extent, on our current and future relationships with hospital and healthcare delivery system clients. We invest a significant amount of time to develop, maintain, and be responsive to these relationships, and our relationships have helped us to secure acquisition and development opportunities, as well as other advisory, property management, and projects, with both new and existing clients. If our relationships with hospital or health system clients deteriorate, if a conflict of interest or non-compete arrangement prevents us from expanding these relationships, or if a hospital on or near whose campus one of our properties is located fails or becomes unable to meet its financial obligations, the business of our tenants could be adversely affected or our ability to secure new acquisition and development opportunities or other advisory, property management, and hospital project management projects could be adversely impacted and our professional reputation within the industry could be damaged.

Any failure, inability, or unwillingness by our tenants to pay rent or other amounts under leases could materially adversely affect our financial results; we may have difficulty finding suitable replacement tenants in the event of a tenant default or non-renewal of our leases, especially for our properties located in smaller markets.

Our portfolio of healthcare properties is leased to physicians, hospitals, healthcare delivery systems, and other healthcare providers and our revenues are subject to the financial strength of our tenants. We cannot provide assurance that our tenants will have sufficient assets, income, and access to financing to enable them to satisfy their respective obligations to us, and any failure, inability or unwillingness by our tenants to do so could adversely affect our financial results. We have had tenants pay us rent late or fail to pay rent, which has adversely affected our financial results.

We cannot predict whether our tenants will renew or extend existing leases beyond their current terms. Nearly all of our properties are subject to leases which have multi-year terms. As of December 31, 2019, leases representing 2.5% and 4.3% of leased square feet at our consolidated properties will expire in 2020 and 2021, respectively, and leases representing 0.2% of leased square feet had expired as of December 31, 2019. If any of our leases are not renewed or extended, or if a tenant defaults under the terms of its lease or becomes insolvent, we would attempt to relet those spaces or properties to other tenants or new tenants. In case of non-renewal, we generally have advance notice before expiration of the lease term to arrange for reletting or repositioning of the spaces or the properties and our tenants are required to continue to perform all of their obligations (including the payment of all rental amounts) under the non-renewed leases until such expiration. However, following expiration of a lease term or if we exercise our right to replace a tenant in default, rental payments on the related properties could decline or cease altogether while we relet or reposition the spaces or the properties with suitable replacement tenants. We also might not be successful in identifying suitable replacement tenants or entering into leases with new tenants on a timely basis or on terms as favorable to us as our current leases, or at all, and we may be required to fund certain expenses and obligations (e.g., real estate taxes, debt costs, and maintenance expenses) to preserve the value of, and avoid the imposition of liens on, our properties while they are being relet or repositioned. Our ability to relet or reposition our properties, or spaces within our properties, with suitable tenants could be significantly delayed or limited by state licensing, receivership, certificate of need or other laws, as well as by the Medicare and Medicaid change-of-ownership rules. We could also incur substantial additional expenses in connection with any licensing, receivership, or change-of-ownership proceedings. In addition, our ability to locate suitable replacement tenants could be impaired by the specialized healthcare uses or contractual restrictions on use of the properties, and we may be required to spend substantial amounts to adapt the properties to other uses. Any such delays, limitations and expenses could adversely impact our ability to collect rent, obtain possession of leased properties, or otherwise exercise remedies for tenant default and could have a material adverse effect on us or cause us to take an impairment charge on a property.
 
All of these risks may be greater in smaller markets, where there may be fewer potential replacement tenants, making it more difficult to replace tenants, especially for specialized spaces, like hospital or outpatient treatment facilities located in our properties, and could have a material adverse effect on us.

If the business, financial position or results of operations of CommonSpirit Health or one or more of our CommonSpirit Health-affiliated tenants suffer or are adversely affected, it could have a material adverse effect on our business, financial position, or results of operations.

As of December 31, 2019, tenants affiliated with CommonSpirit Health (“CommonSpirit”), represented approximately 16.7% of our total consolidated annualized base rent. Although CommonSpirit is not a party to nor a guarantor of the related

17


lease agreements, it controls each of the subsidiaries and affiliates that are parties to a master lease agreement we have with the CommonSpirit tenants. Given this control, if CommonSpirit’s business, financial position or results of operations suffer or are adversely affected, it could adversely affect its ability to provide any financial or operational support for the subsidiaries and affiliates it controls, which could adversely affect one or more of the CommonSpirit-affiliated tenants’ ability to pay rent to us. Additionally, if CommonSpirit’s business, financial position or results of operations were to suffer or its credit ratings were to be downgraded, it could cause investors to lose confidence in our ability to collect rent from the CommonSpirit-affiliated tenants and could cause our stock price to decline. Moreover, there can be no assurance that CommonSpirit’s subsidiaries and affiliates will have sufficient assets, income, and access to financing to enable them to satisfy their payment obligations under their lease agreements. The inability of any of these subsidiaries and affiliates to meet their rent obligations could materially adversely affect our business, financial position, or results of operations including our ability to pay dividends to our stockholders as required to maintain our status as a REIT. The inability of CommonSpirit’s subsidiaries and affiliates to satisfy their other obligations under their lease agreements such as the payment of taxes, insurance, and utilities could have a material adverse effect on the condition of the leased properties as well as on our business, financial position, and results of operations. For these reasons, if CommonSpirit were to experience a material adverse effect on its business, financial position, or results of operations, our business, financial position, or results of operations could also be materially adversely affected.

CommonSpirit, which resulted from the merger of Dignity Health and Catholic Health Initiatives (“CHI”), may have different plans or objectives than CHI with respect to the services its physicians provide or the locations in which those services are provided. If CommonSpirit were to cause its subsidiaries or affiliates to terminate any of their leases, vacate the leased premises, or consolidate, downsize or relocate their operations from any of our premises, or if the subsidiaries and affiliates do not comply with the healthcare regulations to which the leased properties and operations are subject, we may be required to find other lessees for any affected leased properties and there could be a decrease or cessation of rental payments by CommonSpirit’s subsidiaries and affiliates. In such event, we may be unable to locate suitable replacement lessees willing to pay similar rental rates or at all, which would have the effect of reducing our rental revenues and could materially adversely affect our business, financial position, or results of operations.

We may not be successful in identifying and completing off-market acquisitions and other suitable acquisitions or investment opportunities, which may impede our growth and adversely affect our business, financial condition, and results of operations.
 
An important component of our growth strategy is to acquire “off-market” properties before they are widely marketed by the owners. Facilities that are acquired off-market are typically more attractive to us as a purchaser because of the absence of a formal marketing process, which could lead to higher prices or other unattractive terms. If we cannot obtain off-market deal flow in the future, our ability to locate and acquire facilities at attractive prices could be adversely affected. We expect to compete with many other entities engaged in real estate investment activities for acquisitions of healthcare properties, including national, regional, and local operators, acquirers and developers of healthcare-related real estate properties, and other investors such as private equity firms, some of whom may have greater financial resources and lower costs of capital than we do. The competition for healthcare-related real estate properties may significantly increase the price that we must pay for healthcare properties or other assets that we seek to acquire, and our competitors may succeed in acquiring those properties or assets themselves. In addition, our potential acquisition targets may find our competitors to be more attractive because they may have greater resources, may be willing to pay more for the properties, or may have a more compatible operating philosophy. In particular, larger REITs that target healthcare properties may enjoy significant competitive advantages that result from, among other things, a lower cost of capital, enhanced operating efficiencies, more personnel and market penetration, and familiarity with markets. In addition, the number of entities and the amount of funds competing for suitable investment properties may increase. Increased competition would result in increased demand for these assets and therefore likely would increase prices paid for them. Those higher prices for healthcare properties or other assets may adversely affect our returns from our investments.

We have and may in the future make investments in development projects, which may not yield anticipated returns which could directly affect our operating results and reduce the amount of funds available for distributions.

A component of our growth strategy is exploring development opportunities, some of which may arise through strategic joint ventures. In deciding whether to make an investment in a particular development, we make certain assumptions regarding the expected future performance of that property. To the extent that we consummate development opportunities, our investment in these projects will be subject to the following risks:

we may not be able to obtain financing for development projects on favorable terms or at all;


18


we may not complete development projects on schedule or within budgeted amounts;

we may encounter delays in obtaining or fail to obtain all necessary zoning, land use, building, occupancy, environmental and other governmental permits and authorizations, or underestimate the costs necessary to develop the property to market standards;

development or construction delays may provide tenants the right to terminate preconstruction leases or cause us to incur additional costs;

volatility in the price of construction materials or labor may increase our development costs;

hospitals or health systems may maintain significant decision-making authority with respect to the development schedule;

we may incorrectly forecast risks associated with development in new geographic regions;

tenants may not lease space at the quantity or rental rate levels projected;

demand for our development project may decrease prior to completion, including due to competition from other developments; and

lease rates and rents at newly developed properties may fluctuate based on factors beyond our control, including market and economic conditions.

If our investments in development projects do not yield anticipated returns for any reason, including those set forth above, our business, financial condition and results of operations, our ability to make distributions to our shareholders and the trading price of our common shares may be adversely affected.

Some of our existing properties and properties we acquire in the future are and may be subject to ground lease or other restrictions on the use of the space. If we are required to undertake significant capital expenditures to procure new tenants, then our business and results of operations may suffer.

Eighty of our consolidated properties, representing approximately 44.7% of our total leasable square feet and 43.0% of our annualized revenue based on rental payments for the month ended December 31, 2019, are subject to ground leases that contain certain restrictions. These restrictions include limits on our ability to re-lease our initial properties to tenants not affiliated with the healthcare delivery system that owns the underlying property, rights of purchase and rights of first offer and refusal with respect to sales of the property, and limits on the types of medical procedures that may be performed. In addition, lower than expected rental rates, including annual rent escalators, upon re-leasing could impede our growth. We may not be able to re-lease space on terms that are favorable to us or at all. Further, we may be required to undertake significant capital expenditures to renovate or reconfigure space to attract new tenants. If we are unable to promptly re-lease our initial properties, if the rates upon such re-leasing are significantly lower than expected, or if we are required to undertake significant capital expenditures in connection with re-leasing, our business, financial condition, and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares may be adversely affected.

Uninsured losses or losses in excess of our insurance coverage could adversely affect our financial condition and our cash flows.
 
We maintain comprehensive liability, fire, flood, earthquake, wind (as deemed necessary or as required by our lenders), extended coverage, and rental loss insurance with respect to our properties. Certain types of losses, however, may be either uninsurable or not economically insurable, such as losses due to riots, acts of war, or terrorism. Should an uninsured loss occur, we could lose both our investment in and anticipated profits and cash flows from a healthcare-related facility. If any such loss is insured, we may be required to pay a significant deductible on any claim for recovery of such a loss prior to our insurer being obligated to reimburse us for the loss, or the amount of the loss may exceed our coverage for the loss. In addition, future lenders may require such insurance, and our failure to obtain such insurance could constitute a default under loan agreements. We may determine not to insure some or all of our properties at levels considered customary in our industry, which would expose us to an increased risk of loss. As a result, our business, financial condition, and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares may be adversely affected.


19


Environmental compliance costs and liabilities associated with owning, leasing, developing, and operating our properties may affect our results of operations.

Under various U.S. federal, state, and local laws, ordinances, and regulations, current and prior owners and tenants of real estate may be jointly and severally liable for the costs of investigating, remediating, and monitoring certain hazardous substances or other regulated materials on or in such property. In addition to these costs, the past or present owner or tenant of a property from which a release emanates could be liable for any personal injury or property damage that results from such releases, including for the unauthorized release of asbestos-containing materials and other hazardous substances into the air, as well as any damages to natural resources or the environment that arise from such releases. These environmental laws often impose such liability without regard to whether the current or prior owner or tenant knew of, or was responsible for, the presence or release of such substances or materials. Moreover, the release of hazardous substances or materials, or the failure to properly remediate such substances or materials, may adversely affect the owner’s or tenant’s ability to lease, sell, develop, or rent such property or to borrow by using such property as collateral. Persons who transport or arrange for the disposal or treatment of hazardous substances or other regulated materials may be liable for the costs of removal or remediation of such substances at a disposal or treatment facility, regardless of whether or not such facility is owned or operated by such person.
 
Certain environmental laws impose compliance obligations on owners and tenants of real property with respect to the management of hazardous substances and other regulated materials. For example, environmental laws govern the management and removal of asbestos-containing materials and lead-based paint. Failure to comply with these laws can result in penalties or other sanctions. If we incur substantial costs to comply with these environmental laws or we are held liable under these laws, our business, financial condition, and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares may be adversely affected.
 
We may be unable to make distributions which could result in a decrease in the market price of our common shares.

Substantially all of our assets are held through the Operating Partnership, which holds substantially all of its properties and assets through subsidiaries. Our Operating Partnership’s cash flow is dependent upon cash distributions to it by its subsidiaries, and in turn, substantially all of the Trust’s cash flow is dependent upon cash distributions to it by the Operating Partnership. The creditors of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligation to them, as and when due and payable, before distributions may be made by that subsidiary to its equity holders. Therefore, our Operating Partnership’s ability to make distributions to holders of OP Units depends on its subsidiaries’ ability first to satisfy their obligations to their creditors and then to make distributions to the Operating Partnership. Furthermore, holders of Series A Preferred Units are entitled to receive preferred distributions before payment of distributions to OP Unit holders, including the Trust. Finally, the Trust’s ability to pay dividends to holders of common shares depends upon our Operating Partnership’s ability to first satisfy its obligations to its creditors and then to make distributions to the Trust.
    
While we expect to make regular quarterly distributions to the holders of our common shares, if sufficient cash is not available for distribution from our operations, we may have to fund distributions from working capital, borrow to provide funds for such distributions, or reduce the amount of such distributions. To the extent we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distributions from what they otherwise would have been. If cash available for distribution generated by our assets is less than expected, or if such cash available for distribution decreases in future periods from expected levels, our inability to make distributions could result in a decrease in the market price of our common shares. All distributions are made at the discretion of our board of trustees. Any inability to make distributions, or to make distributions at expected levels in the future, could result in a decrease in the market price of our common shares.

Cybersecurity incidents could disrupt our business and result in the compromise of confidential information.
 
Our business is at risk from and may be impacted by cybersecurity attacks, or other significant disruptions to the Company’s information technology systems involving us or any third party property managers, including attempts to gain unauthorized access to our confidential data, and other electronic security breaches. Such cyber attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. In the past, we have experienced cybersecurity breaches, which to date have not had a material impact on our operations, but there can be no assurance that any future breach or disruption will not have a material adverse effect on our business, financial condition or operations. While we employ a number of measures to prevent, detect and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber attack. In addition, we rely on third party property managers to manage certain of our properties and real estate assets. We face risks associated with cybersecurity attacks or breaches affecting such third party property managers. A cybersecurity attack or a security breach at any such third party could be perceived as a cybersecurity attack or a breach of our system. Cybersecurity incidents or other disruptions could disrupt our business,

20


compromise confidential information of ours and third parties, including our tenants, damage to our reputation, subject us to liability claims or regulatory penalties and could have an adverse effect on our business, financial condition and results of operations.

A failure to meet market expectations with respect to our business could negatively affect the market price of our common shares and thereby limit our ability to raise capital.
 
The availability of equity capital to us will depend, in part, upon the market price of our common shares which, in turn, will depend upon various market conditions and other factors that may change from time to time. Our failure to meet the market’s expectation with regard to future earnings and cash distributions may adversely affect the market price of our common shares and, as a result, the cost and availability of equity capital to us.
 
In addition, the vesting of any restricted shares granted to trustees, executive officers, and other employees under our 2013 Equity Incentive Plan, the issuance of our common shares or OP Units in connection with future property, portfolio or business acquisitions, and other issuances of our common shares, including pursuant to our 2019 ATM program, may cause dilution to our shareholders and could have an adverse effect on the per share market price of our common shares and may adversely affect the terms upon which we may be able to obtain additional capital through the sale of equity securities.

Increases in interest rates may increase our interest expense and adversely affect our cash flows, our ability to service our indebtedness and our ability to make distributions to our shareholders, and could cause our stock price to decline. Failure to hedge effectively against interest rate changes may adversely affect our results of operations.

One of the factors that influences the market price of our common shares is the dividend yield on common shares (as a percentage of the price of our common shares) relative to market interest rates. In response to the global financial crisis, the U.S. Federal Reserve took actions which resulted in low interest rates prevailing in the marketplace for a historically long period of time. From 2015 to 2018, the U.S. Federal Reserve raised its benchmark interest rate. While the U.S. Federal Reserve decreased its benchmark interest rate in 2019, it may raise its benchmark interest rate in the future. Further increases in market interest rates may lead prospective purchasers of our common shares to expect a higher dividend yield (with a resulting decline in the market price of our common shares) and higher interest rates would likely increase our borrowing costs for both our existing and future indebtedness and potentially decrease funds available for distribution. Thus, higher market interest rates could cause the market price of our common shares to decrease.
 
Additionally, as of December 31, 2019, we had approximately $345.6 million of variable-rate indebtedness outstanding that has not been swapped for a fixed interest rate. Certain indebtedness in the future, including borrowings under our unsecured revolving credit facility since December 31, 2019 and thereafter, will be subject to variable interest rates. Increases in interest rates on any variable rate indebtedness will increase our interest expense, which could adversely affect our cash flow and our ability to pay distributions to our shareholders.
 
In certain cases, we may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements. Hedging involves risks, such as the risk that the counterparty may fail to honor its obligations under an arrangement, that the arrangements may not be effective in reducing our exposure to interest rate changes, and that a court could rule that such an agreement is not legally enforceable. In addition, we may be limited in the type and amount of hedging transactions that we may use in the future by our need to satisfy the REIT income tests under the Code. Failure to hedge effectively against interest rate changes may have an adverse effect on our business, financial condition, results of operations, our ability to make distributions to our shareholders, and the market price of our common shares.

The income from certain of our properties is dependent on the ability of our property managers to successfully manage those properties.

We depend upon the performance of our property managers to effectively manage certain of our properties and real estate assets. Approximately 57.7% of our total portfolio gross leasable area is managed by internal property managers, which includes single tenant properties, LTACHs, and hospitals managed by the Company. We do not control these third party property managers, and are accordingly subject to various risks generally associated with outsourcing of management of day-to-day activities. The income we recognize from any properties managed by third party property managers is dependent on the ability of the property manager of such property to successfully manage the property, which such property management is not within our control. Property managers generally compete with other companies in the management of properties, with respect to the quality of care provided, reputation, physical appearance of the property, and price and location, among other attributes. A property manager’s inability to successfully compete with other companies on one or more of the foregoing aspects could adversely impact our business and results of operations. Additionally, because we do not control third party property managers,

21


any adverse events such as issues related to insufficient internal controls, cybersecurity incidents, or other adverse events may impact the income we recognize from properties managed by such third party property managers. We may be unable to anticipate such events or properly assess the magnitude of any such events because we do not control third party property managers who provide property management services to us.

Risks Related to the Healthcare Industry
 
The healthcare industry is heavily regulated, and new laws or regulations, changes to existing laws or regulations, loss of licensure, or failure to obtain licensure could adversely impact our company and result in the inability of our tenants to make rent payments to us.
 
The healthcare industry is heavily regulated by U.S. federal, state and local governmental authorities. Our tenants generally are subject to laws and regulations covering, among other things, licensure, certification for participation in government programs, billing for services, privacy and security of health information, and relationships with physicians and other referral sources. In addition, new laws and regulations, changes in existing laws and regulations or changes in the interpretation of such laws or regulations could negatively affect our financial condition and the financial condition of our tenants. These changes, in some cases, could apply retroactively. The enactment, timing, or effect of legislative or regulatory changes cannot be predicted.

The Affordable Care Act is changing how healthcare services are covered, delivered, and reimbursed through expanded coverage of uninsured individuals and reduced Medicare program spending. In addition, it reforms certain aspects of health insurance, expands existing efforts to tie Medicare and Medicaid payments to performance and quality, and contains provisions intended to strengthen fraud and abuse enforcement. The complexities and ramifications of the Affordable Care Act are significant and are being implemented in a phased approach which began in 2010. It remains difficult to predict the full effects of the Affordable Care Act and its impact on our business, our revenues, and financial condition and those of our tenants due to the law’s complexity, lack of implementing regulations or interpretive guidance, gradual implementation, partial repeal, and possible full repeal. Further, we are unable to foresee how individuals and businesses will respond to the choices afforded them by the Affordable Care Act, or the effect of any potential changes made to the Affordable Care Act or other healthcare laws and programs. The Affordable Care Act could adversely affect the reimbursement rates received by our tenants, the financial success of our tenants and strategic partners and consequently us.

In 2012, the United States Supreme Court upheld the individual mandate of the Affordable Care Act but partially invalidated the expansion of Medicaid. The ruling on Medicaid expansion allow states not to participate in the expansion (and to forego funding for the Medicaid expansion) without losing their existing Medicaid funding. While the U.S. federal government paid for approximately 100% of those additional costs from 2014 to 2016, states now are expected to pay a small percentage of those additional costs. Because the U.S. federal government substantially funds the Medicaid expansion, it is unclear how many states ultimately will elect this option. As of December 1, 2019, 14 states have pursued this option not to adopt the Medicaid expansion. Thirty-six states and the District of Columbia have adopted the expansion. The participation by states in the Medicaid expansion could have the effect of increasing some of our tenants’ revenues but also could be a strain on U.S. federal government and state budgets.

In 2017, President Trump and Congress unsuccessfully sought to repeal and replace the Affordable Care Act. On January 20, 2017, President Trump issued an Executive Order stating that it is the administration’s official policy to repeal the Affordable Care Act and instructing the Secretary of Health and Human Services and the heads of all other executive departments and agencies with authority and responsibility under the Affordable Care Act to, among other matters, delay implementation of or grant an exemption from any provision of the Affordable Care Act that would impose a fiscal burden on any state or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, and others. On December 22, 2017, the Tax Act was signed into law. The Tax Act, amongst other things, repeals the Affordable Care Act’s individual mandate penalty beginning in 2019. The elimination of the penalties does not remove the requirement to obtain healthcare coverage; however, without penalties there effectively will be no enforcement. On December 14, 2018, a federal district court in Texas ruled that the Affordable Care Act’s individual mandate was unconstitutional. The court also ruled that the provisions of the individual mandate were not severable from the remainder of the Affordable Care Act, rendering the remainder of the Affordable Care Act invalid as well. That ruling was appealed and on December 18, 2019, a panel of the United States Court of Appeals for the Fifth Circuit in New Orleans struck down a central provision of the Affordable Care Act, ruling that the requirement that people have health insurance was unconstitutional. The appeals panel did not invalidate the rest of the law but sent the case back to a federal district judge in Texas to assess which of the law’s other parts should remain in force without the mandate. On January 21, 2020, the Supreme Court of the United States denied a motion to fast-track a review of the Fifth Circuit’s ruling, leaving the Affordable Care Act in place as appeals continue.


22


It is possible that Congress will continue to consider other legislation to repeal the Affordable Care Act or repeal and replace some or all elements of the Affordable Care Act.

We cannot predict the effect of the Executive Order, the Tax Act’s 2019 repeal of the individual mandate penalty on the Affordable Care Act, or the Texas court’s decision or any appeal thereof, other state-based litigation, or whether Congress’ attempt to repeal or repeal and replace the law will be successful. Further, we cannot predict how the Affordable Care Act might be amended or modified, either through the legislative or judicial process, and how any such modification might impact our tenants’ operations or the net effect of this law on us. If the operations, cash flows, or financial condition of our operators and tenants are materially adversely impacted by any repeal or modification of the law, our revenue and operations may be materially adversely affected as well.

Recent changes to healthcare laws and regulations, including to government reimbursement programs such as Medicare and reimbursement rates applicable to our current and future tenants, could have a material adverse effect on the financial condition of our tenants and, consequently, their ability to meet obligations to us.
Statutory and regulatory policy changes and decisions may impact one or more specific providers that lease space in any of our facilities. In particular, the following recent changes to healthcare laws and regulations may apply to our tenants:
The Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) reforms Medicare payment policy for services paid under the Medicare physician fee schedule and adopts a series of policy changes affecting a wide range of providers and suppliers. MACRA repeals the sustainable growth rate formula effective January 1, 2015, and establishes a new payment framework which may impact payment rates for our tenants, including long-term care hospitals (“LTCH”).
The Bipartisan Budget Act of 2013 establishes new payment limits for Medicare patients discharged from an LTCH who do not meet specified criteria. For any Medicare patient who does not meet the new criteria, the LTCH will be paid a lower “site-neutral” payment rate, which may impact the financial condition of tenants affected by the lower payment rate. Additionally, new rules may cause all discharges from LTCHs to be paid at the site-neutral rate if the number of discharges for which payment is made under the site-neutral payment rate is greater than 50% of the total number of discharges from the LTCH.
The 2015 BBA provides changes to the requirements for providers who seek HOPD reimbursement under Medicare. The 2015 BBA generally requires providers who seek to qualify for HOPD to be located on the campus of the hospital that seeks such HOPD, which generally is higher than reimbursement for providers that do not qualify as HOPD providers. The 2015 BBA specifically grandfathers HOPD providers in existence as of November 2, 2015 and does not change such HOPD providers’ eligibility for HOPD reimbursement.
We have a number of existing tenants that may be reimbursed as HOPD providers and but for the grandfathering protection of the 2015 BBA, may not be eligible for HOPD reimbursement in the future. Any provider who establishes a new HOPD location after November 2, 2015 will be subject to the 2015 BBA requirements and if any such provider does not satisfy the new requirements, then such provider will be reimbursed for claims billed on or after January 1, 2017 at generally lower reimbursement levels. Failure to comply with the 2015 BBA requirements could adversely affect the ability of certain of our tenants to make rent payments to us, which may have an adverse effect on our business, financial condition, and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares.
The Affordable Care Act instituted a market basket payment adjustment to LTCHs. In fiscal years 2017 through 2019, the market basket update will be reduced by 0.75%. The Affordable Care Act specifically allows these market basket reductions to result in a less than 0% payment update and payment rates that are less than the prior year. MACRA sets the annual update for fiscal year 2018 at 1% after taking into account the market basket payment reduction of 0.75% mandated by the Affordable Care Act.
The Bipartisan Budget Act of 2018 (Pub. L. 115-123) makes numerous changes to Medicare payment to physicians under the Medicare Part B program. These changes include, for example, the removal of certain restrictions on payment for telehealth services associated with clinical assessments for end-stage renal dialysis patients and acute stroke patients. This legislation also repealed the payment caps for certain physical therapy and speech language therapy services, while reducing payment for these services if provided by therapy assistants. The Bipartisan Budget Act of 2018 amended policies related to the Merit-based Incentive Payment System (MIPS) which, as part of the CMS Quality Payment Program, is intended to tie payments to quality and cost-efficient care, drive improvement in care processes and health outcomes, increase the use of healthcare information, and reduce the cost of care.

23


Every year, the CMS adjusts payment levels and policies for physician services through rulemaking, in compliance with statutory requirements, and other budget decisions by the Executive Branch. On November 15, 2019, CMS issued a final rule for the Medicare physician fee schedule effective for 2020. Among other things, the final rule increases payment levels during 2020 for many physician services, although payment for some procedures may be reduced based on recalculations of the practice expense component of the physician relative value units. Medicare payment for certain drugs may be reduced from 6% to 3% of the wholesale acquisition cost, if an average sales price is not available. Among other things, the final physician fee schedule rule recognizes a broader scope of Medicare coverage for opioid addiction treatment services.
On November 21, 2018, the Secretary issued a final rule, effective January 1, 2019, that eliminated the higher, Outpatient Prospective Payment System reimbursement rate for evaluation and management services provided by Grandfathered HOPD locations. The Secretary, instead, would only reimburse for evaluation and management services at the lower, Medicare Physician Fee Schedule rate that new non-grandfathered off-campus HOPD locations receive. The AHA and a number of hospitals sued the Secretary in federal court to enforce the plain meaning of Section 603 of the BBA and restore the right to Grandfathered HOPD reimbursement rates. On September 17, 2019, a federal district judge ruled in favor of the AHA. The court stated that CMS did not have the authority to lower payments for off-campus hospital-based departments that were grandfathered under the BBA.CMS challenged this ruling, asking for a stay, which the court denied on October 21, 2019. On November 12, 2019, CMS issued its final rule updating the hospital outpatient prospective payment system, effective 2020. In that final rule, CMS required prior authorizations for five services, intending to slow the performance of these services in the hospital outpatient setting.
These reimbursement and regulatory changes may have an adverse financial impact on the net operating revenues and profitability of many LTCHs for cost reporting periods beginning on or after July 1, 2016, which could have an impact on their ability to pay rent due to us. Similarly, these payment changes for physicians under Medicare Part B may have an adverse financial impact on the revenues and profitability of many physician practices in future years, which could adversely affect their ability to pay rent.
Many states also regulate the establishment and construction of healthcare facilities and services, and the expansion of existing healthcare facilities and services through certificate of need, or CON, laws, which may include regulation of certain types of beds, medical equipment, and capital expenditures. Under such laws, the applicable state regulatory body must determine a need exists for a project before the project can be undertaken. If any of our tenants seeks to undertake a CON-regulated project, but are not authorized by the applicable regulatory body to proceed with the project, these tenants could be prevented from operating in their intended manner and could be materially adversely affected.
The application of lower reimbursement rates to our tenants or failure to qualify for existing rates under certain exceptions, the failure to comply with these laws and regulations, or the failure to secure CON approval to undertake a desired project could adversely affect our tenants’ ability to make rent payments to us which may have an adverse effect on our business, financial condition, and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares.
Adverse trends in healthcare provider operations may negatively affect our lease revenues and our ability to make distributions to our shareholders.
The healthcare industry is currently experiencing, among other things:
changes in the demand for and methods of delivering healthcare services; 
changes in third party reimbursement methods and policies;
consolidation and pressure to integrate within the healthcare industry through acquisitions, joint ventures, and managed service organizations;
increased scrutiny of billing, pricing, referral, and other practices by U.S. federal and state authorities;
competition among healthcare providers; and
increased scrutiny of control over release of confidential patient medical information.

These factors may adversely affect the economic performance of some or all of our tenants and, in turn, our lease revenues, which may have a material adverse effect on our business, financial condition, and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares.


24


Reductions in reimbursement from third party payors, including Medicare and Medicaid, could adversely affect the profitability of our tenants and hinder their ability to make rent payments to us or renew their leases.
 
Sources of revenue for our tenants typically include private insurance payors, the U.S. federal Medicare program, state Medicaid programs, MCOs, HMOs, and ACOs. Healthcare providers continue to face government and private payor pressure to control or reduce healthcare costs and significant reductions in healthcare reimbursement, including reduced reimbursements and changes to payment methodologies under the Affordable Care Act. In some cases, private insurers rely upon all or portions of the Medicare payment systems to determine payment rates which may result in decreased reimbursement from private insurers.
 
The slowdown in the United States economy has negatively affected state budgets, thereby putting pressure on states to decrease spending on state programs including Medicaid. The need to control Medicaid expenditures may be exacerbated by the potential for increased enrollment in state Medicaid programs due to unemployment and declines in family incomes. Historically, states have often attempted to reduce Medicaid spending by limiting benefits and tightening Medicaid eligibility requirements. Many states have adopted, or are considering the adoption of, legislation designed to enroll Medicaid recipients in managed care programs and/or impose additional taxes on hospitals to help finance or expand the states’ Medicaid systems. Potential reductions to Medicaid program spending in response to state budgetary pressures could negatively impact the ability of our tenants to successfully operate their businesses.
 
Efforts by payors to reduce healthcare costs will likely continue which may result in reductions or slower growth in reimbursement for certain services provided by some of our tenants. A reduction in reimbursements to our tenants from third party payors for any reason could adversely affect our tenants’ ability to make rent payments to us which may have a material adverse effect on our businesses, financial condition and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares. 

Our tenants and our company are subject to fraud and abuse laws, the violation of which by a tenant may jeopardize the tenant’s ability to make rent payments to us.
 
There are various federal and state laws prohibiting fraudulent and abusive business practices by healthcare providers who participate in, receive payments from, or are in a position to make referrals in connection with government-sponsored healthcare programs, including the Medicare and Medicaid programs. Our lease arrangements with certain tenants may also be subject to these fraud and abuse laws.

Violations of these laws may result in criminal and/or civil penalties that range from punitive sanctions, damage assessments, penalties, imprisonment, denial of Medicare and Medicaid payments, and/or exclusion from the Medicare and Medicaid programs. In addition, the Affordable Care Act clarifies that the submission of claims for items or services generated in violation of the Anti-Kickback Statute constitutes a false or fraudulent claim under the False Claims Act. The federal government has taken the position, and some courts have held, that violations of other laws, such as the Stark Law, can also be a violation of the False Claims Act. Additionally, certain laws, such as the False Claims Act, allow for individuals to bring whistleblower actions on behalf of the government for violations thereof. Imposition of any of these penalties upon one of our tenants or strategic partners could jeopardize that tenant’s ability to operate or to make rent payments or affect the level of occupancy in our healthcare properties, which may have a material adverse effect on our business, financial condition, and results of operations, our ability to make distributions to our shareholders, and the market price of our common shares. Further, we enter into leases and other financial relationships with healthcare delivery systems that are subject to or impacted by these laws. We also have other investors who are healthcare providers in certain of our subsidiaries that own our healthcare properties. If any of our relationships, including those related to the other investors in our subsidiaries, are found not to comply with these laws, we and our healthcare provider investors may be subject to civil and/or criminal penalties.
 
Our healthcare-related tenants may be subject to significant legal actions that could subject them to increased operating costs and substantial uninsured liabilities, which may affect their ability to pay their rent payments to us, and we could be subject to healthcare industry violations.
 
As is typical in the healthcare industry, our tenants may become subject to claims that their services have resulted in patient injury or other adverse effects. Many of these tenants may have experienced an increasing trend in the frequency and severity of professional liability and general liability insurance claims and litigation asserted against them. The insurance coverage maintained by these tenants may not cover all claims made against them nor continue to be available at a reasonable cost, if at all. In some states, insurance coverage for the risk of punitive damages arising from professional liability and general liability claims and/or litigation may not, in certain cases, be available to these tenants due to state law prohibitions or limitations of availability. As a result, these types of tenants of our healthcare properties and healthcare-related facilities

25


operating in these states may be liable for punitive damage awards that are either not covered or are in excess of their insurance policy limits.
 
We also believe that there has been, and will continue to be, an increase in governmental investigations of certain healthcare providers, particularly in the area of Medicare/Medicaid false claims, as well as an increase in enforcement actions resulting from these investigations. Insurance is not available to cover such losses. Any adverse determination in a legal proceeding or governmental investigation, any settlements of such proceedings, or investigations in excess of insurance coverage, whether currently asserted or arising in the future, could have a material adverse effect on a tenant’s financial condition. If a tenant is unable to obtain or maintain insurance coverage, if judgments are obtained or settlements reached in excess of the insurance coverage, if a tenant is required to pay uninsured punitive damages, or if a tenant is subject to an uninsurable government enforcement action or investigation, the tenant could be exposed to substantial additional liabilities, which may affect the tenant’s ability to pay rent, which in turn could have a material adverse effect on our business, financial condition, and results of operations, our ability to pay distributions to our shareholders, and the market price of our common shares. We could also be subject to costly government investigations or other enforcement actions which could have a material adverse effect on our business, financial condition, and results of operations, our ability to pay distributions to our shareholders, and the market price of our common shares.

The Health Insurance Portability and Accountability Act, commonly referred to as HIPAA, was established in 1996 to set national standards for the confidentiality, security, and transmission of personal health information (PHI). Healthcare providers are required, under HIPAA and its implementing regulations, to protect and keep confidential any PHI. HIPAA also sets limits and conditions on use and disclosure of PHI without patient authorization. The law gives patients specific rights to their health information, including rights to obtain a copy of or request corrections to their medical records. The physician or the medical practice can be liable if there are improper disclosures of PHI, including from employee mishandling of PHI, medical records security breaches, lost or stolen electronic devices, hacking, social media breaches or failure to get patient authorizations. Violations could result in multi-million dollar penalties. Actual or potential violations of HIPAA could subject our tenants to government investigations, litigation or other enforcement actions which could adversely affect our tenants’ ability to pay rent and could have a material adverse effect on our business, financial condition, and results of operations, our ability to pay distributions to our shareholders, and the market price of our common shares.
 
Risks Related to the Real Estate Industry
 
Our operating performance is subject to risks associated with the real estate industry.
 
Real estate investments are subject to various risks and fluctuations and cycles in value and demand, many of which are beyond our control. Certain events may decrease cash available for distributions as well as the value of our properties. These events include, but are not limited to:

vacancies or our inability to rent space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights, or tenant-favorable renewal options;
inability to collect rent from tenants;
competition from other real estate investors with significant capital, including other real estate operating companies, REITs, and institutional private equity or other investment funds;
reductions in the level of demand for healthcare properties and changes in the demand for certain healthcare-related properties;
increases in the supply of medical office space;
increases in expenses associated with our real estate operations, including, but not limited to, insurance costs, third party management fees, energy prices, real estate assessments, and other taxes and costs of compliance with laws, regulations and governmental policies, and restrictions on our ability to pass such expenses on to our tenants; and
changes in, and changes in interpretation or enforcement of, laws, regulations, and governmental policies associated with real estate, including, without limitation, health, safety, environmental, real estate and zoning and tax laws, increases in real property tax rates and taxation of REITs, governmental fiscal policies, and the ADA. 
In addition, periods of economic slowdown or recession, such as the recent U.S. economic downturn, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in rents or an increased incidence of defaults under existing leases. If we cannot operate our properties to meet our financial expectations, our business, financial condition, results of operations, cash flow, per share market price of our common

26


shares, and ability to satisfy our debt service obligations and to make distributions to our shareholders could be adversely affected.

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of any of our properties.
 
Because real estate investments are relatively illiquid, our ability to promptly sell one or more of our properties in response to changing economic, financial, and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates, and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any of our properties for the price or on the terms set by us or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of any of our properties. We may be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot assure that we will have funds available to correct those defects or to make those improvements.
 
In acquiring a property, we may agree to transfer restrictions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed on that property. These transfer restrictions would impede our ability to sell a property even if we deem it necessary or appropriate. These facts and any others that would impede our ability to respond to adverse changes in the performance of our properties may have an adverse effect on our business, financial condition, results of operations, or ability to make distributions to our shareholders and the market price of our common shares.
 
Uncertain market conditions could cause us to sell our healthcare properties at a loss in the future.
 
We intend to hold our various real estate investments until such time as we determine that a sale or other disposition appears to be advantageous to achieve our investment objectives. Our senior management team and the Trust’s board of trustees may exercise their discretion as to whether and when to sell a healthcare related facility, and we will have no obligation to sell our buildings at any particular time. We generally intend to hold our healthcare properties for an extended period of time, and we cannot predict with any certainty the various market conditions affecting real estate investments that will exist at any particular time in the future. Because of the uncertainty of market conditions that may affect the future disposition of our healthcare properties, we may not be able to sell our properties at a profit in the future or at all. In addition, if we are unable to access the capital markets for financing in the future, we may need to sell some of our properties to raise capital. We may incur prepayment penalties in the event that we sell a property subject to a mortgage earlier than we otherwise had planned. Additionally, we could be forced to sell healthcare properties at inopportune times which could result in us selling the affected property at a substantial loss. Accordingly, the extent to which we will pay cash distributions and realize potential appreciation on our real estate investments will, among other things, be dependent upon fluctuating market conditions. Any inability to sell a healthcare property could adversely impact our ability to make debt payments and distributions to our shareholders.
 
Our assets may be subject to impairment charges.
 
We will periodically evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the existence of impairment indicators is based upon factors such as market conditions, tenant performance, and legal structure. For example, the termination of a lease by a major tenant may lead to an impairment charge. If we determine that an impairment has occurred, we would be required to make an adjustment to the net carrying value of the asset, which could have an adverse effect on our results of operations in the period in which the impairment charge is recorded. We have had tenant defaults that have caused us to record impairment charges in the past, and it is possible we may have tenant defaults in the future, which could lead to impairment charges.

Our investments in, or originations of, mezzanine and term loans will be subject to specific risks relating to the particular property or entity obligated to repay the loan, and our loan assets will involve greater risks of loss than senior loans secured by income-producing properties.
 
As of December 31, 2019, we have 13 mezzanine loans, four term loans, and two construction loans outstanding, and in the future, we may originate further loans. These investments involve special risks relating to the particular borrower, including its financial condition, liquidity, results of operations, business, and prospects. We may also originate other real estate-related investments which take the form of subordinated loans secured by second mortgages on the underlying property or loans secured by a pledge of the ownership interests of either the entity owning the property or a pledge of the ownership interests of the entity that owns the interest in the entity owning the property or other properties. These types of assets involve a higher degree of risk than long-term senior mortgage lending secured by income producing real property because the loan may

27


become unsecured as a result of foreclosure by the senior lender and because it is in a subordinated position and there may not be adequate equity in the property. In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be sufficient to satisfy such loan. If a borrower defaults on a loan or debt senior to our loan, or in the event of a borrower bankruptcy, such loan will be satisfied only after the senior debt. We may be unable to enforce guaranties of payment and/or performance given as security for some loans. As a result, we may not recover some or all of our initial expenditure. Mezzanine and term loans may partially finance the construction of real estate projects and so involve additional risks inherent in the construction process, such as adherence to budgets and construction schedules. In addition, mezzanine and term loans may have higher loan-to-value ratios than conventional mortgage loans, resulting in less equity in the property and increasing the risk of loss of principal. Significant los