10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO 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

(Exact Name of Registrant as Specified in its Charter)

Maryland		46-2519850
(State of Organization)		(IRS 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 pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value per share	DOC	New York Stock Exchange

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.         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 (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).              Yes ☒ 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.

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐ No ☒        

The number of Physicians Realty Trust’s common shares outstanding as of October 27, 2023 was 238,487,448.

PHYSICIANS REALTY TRUST

Quarterly Report on Form 10-Q

for the Quarter Ended September 30, 2023

Table of Contents

		Page Number
Part I	Financial Information
Item 1	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	3
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2023 and 2022	4
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022	5
	Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2023 and 2022	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	8
	Notes to Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4	Controls and Procedures	39
Part II	Other Information
Item 1	Legal Proceedings	41
Item 1A	Risk Factors	41
Item 2	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	46
Item 5	Other Information	46
Item 6	Exhibits	47
SIGNATURES		48

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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, including inflation and recession;

•changes in our business or strategy;

•risks associated with the Company Merger and the Partnership Merger (each as defined below and collectively, the “Mergers”), including our ability to consummate the Mergers on the proposed terms or on the anticipated timeline, or at all, and unanticipated difficulties or expenditures relating to the Mergers, potential difficulties in employee retention as a result of the Mergers, the occurrence of any event, change or other circumstances that could give rise to the termination of the Mergers and the outcome of legal proceedings instituted against us, our trustees and others related to the Mergers;

•our ability to operate as a public company;

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

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

•our concentration of investment in health care properties;

•the disruption of our business and the compromise of confidential information resulting from cybersecurity attacks, breaches, and other incidents;

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

•the degree and nature of our competition;

•competition for investment opportunities;

•difficulties in identifying health care properties to acquire and completing acquisitions;

•risks related to development, redevelopment, or construction projects;

•changes in health care laws or government reimbursement rates;

•decreased rental rates or increased vacancy rates;

1

•defaults on or non-renewal of leases by tenants;

•the potential impact of severe weather events and climate change;

•our failure to generate sufficient cash flows to, subject to the restrictions in the Merger Agreement (as defined below), service, pay down, or refinance our indebtedness or make distributions on our common shares;

•fluctuations and increases in interest rates and operating costs;

•the availability, terms, and issuance of debt and equity capital, including our unsecured revolving credit facility, in each case, subject to the restrictions in the Merger Agreement;

•general volatility of the market price of our common shares;

•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 impact of our investments in joint ventures we have made 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;

•changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates, taxation of real estate investment trusts (“REITs”), and similar matters;

•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;

•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; 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 health care-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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (the “Commission”) on February 24, 2023 (the “2022 Annual Report”) and Part II, Item 1A of this report.

As used in this report, unless the context otherwise requires, references to “we,” “us,” “our,” and the “Company” refer to Physicians Realty Trust (the “Trust”), a Maryland real estate investment trust, and Physicians Realty L.P. (the “Operating Partnership”), a Delaware limited partnership and the consolidated subsidiary of the Trust through which we conduct our business.

2

PART I.                         Financial Information

Item 1.                             Financial Statements

Physicians Realty Trust

Consolidated Balance Sheets

(In thousands, except share and per share data)

	September 30, 2023		December 31, 2022
	(unaudited)
ASSETS
Investment properties:
Land and improvements	$	249,468	$	241,559
Building and improvements	4,703,606		4,659,780
Construction in progress	41,722		18,497
Tenant improvements	95,447		88,640
Acquired lease intangibles	509,468		505,335
	5,599,711		5,513,811
Accumulated depreciation	(1,140,208)		(996,888)
Net real estate property	4,459,503		4,516,923
Right-of-use lease assets, net	227,967		231,225
Real estate loans receivable, net	79,883		104,973
Investments in unconsolidated entities	72,069		77,716
Net real estate investments	4,839,422		4,930,837
Cash and cash equivalents	195,772		7,730
Tenant receivables, net	11,131		11,503
Other assets	166,142		146,807
Total assets	$	5,212,467	$	5,096,877
LIABILITIES AND EQUITY
Liabilities:
Credit facility	$	393,090	$	188,328
Notes payable	1,451,536		1,465,437
Mortgage debt	127,630		164,352
Accounts payable	4,933		4,391
Dividends and distributions payable	60,928		60,148
Accrued expenses and other liabilities	95,637		87,720
Lease liabilities	104,802		105,011
Acquired lease intangibles, net	23,170		24,381
Total liabilities	2,261,726		2,099,768
Redeemable noncontrolling interests - partially owned properties	3,066		3,258
Equity:
Common shares, $0.01 par value, 500,000,000 common shares authorized, 238,482,769 and 233,292,030 common shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	2,385		2,333
Additional paid-in capital	3,817,545		3,743,876
Accumulated deficit	(1,012,869)		(881,672)
Accumulated other comprehensive income	15,216		5,183
Total shareholders’ equity	2,822,277		2,869,720
Noncontrolling interests:
Operating Partnership	116,079		123,015
Partially owned properties	9,319		1,116
Total noncontrolling interests	125,398		124,131
Total equity	2,947,675		2,993,851
Total liabilities and equity	$	5,212,467	$	5,096,877

The accompanying notes are an integral part of these consolidated financial statements.

3

Physicians Realty Trust

Consolidated Statements of Income

(In thousands, except share and per share data) (Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues:
Rental and related revenues	$	134,520	$	128,636	$	397,096	$	385,755
Interest income on real estate loans and other	4,027		2,877		10,895		8,315
Total revenues	138,547		131,513		407,991		394,070
Expenses:
Interest expense	20,050		18,299		59,837		52,356
General and administrative	9,771		10,079		31,133		30,400
Operating expenses	47,625		43,647		138,094		128,080
Depreciation and amortization	47,932		47,040		143,555		142,002
Total expenses	125,378		119,065		372,619		352,838
Income before equity in (loss) gain of unconsolidated entities and gain on sale of investment properties, net:	13,169		12,448		35,372		41,232
Equity in (loss) gain of unconsolidated entities	(278)		(62)		1,260		(452)
Gain on sale of investment properties, net	—		53,894		13		57,375
Net income	12,891		66,280		36,645		98,155
Net income attributable to noncontrolling interests:
Operating Partnership	(505)		(3,252)		(1,443)		(4,830)
Partially owned properties (1)	(51)		(70)		(121)		(384)
Net income attributable to common shareholders	$	12,335	$	62,958	$	35,081	$	92,941
Net income per share:
Basic	$	0.05	$	0.28	$	0.15	$	0.41
Diluted	$	0.05	$	0.28	$	0.15	$	0.41
Weighted average common shares:
Basic	238,480,299		226,529,041		238,124,981		225,743,856
Diluted	249,445,312		239,898,462		249,226,913		239,145,383
Dividends and distributions declared per common share	$	0.23	$	0.23	$	0.69	$	0.69

(1)Includes amounts attributable to redeemable noncontrolling interests.

The accompanying notes are an integral part of these consolidated financial statements.

4

Physicians Realty Trust

Consolidated Statements of Comprehensive Income

(In thousands) (Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	12,891	$	66,280	$	36,645	$	98,155
Other comprehensive income:
Change in fair value of interest rate swap agreements, net	7,697		1,753		11,796		6,215
Reclassification of accumulated gains on interest rate swap to earnings	(1,763)		—		(1,763)		—
Total other comprehensive income	5,934		1,753		10,033		6,215
Comprehensive income	18,825		68,033		46,678		104,370
Comprehensive income attributable to noncontrolling interests - Operating Partnership	(739)		(3,336)		(1,839)		(5,137)
Comprehensive income attributable to noncontrolling interests - partially owned properties	(51)		(70)		(121)		(384)
Comprehensive income attributable to common shareholders	$	18,035	$	64,627	$	44,718	$	98,849

The accompanying notes are an integral part of these consolidated financial statements.

5

Physicians Realty Trust

Consolidated Statements of Equity

(In thousands) (Unaudited)

	Par Value		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’  Equity		Operating Partnership Noncontrolling Interest		Partially Owned Properties  Noncontrolling Interest		Total Noncontrolling Interests		Total Equity
Balance at December 31, 2022	$	2,333	$	3,743,876	$	(881,672)	$	5,183	$	2,869,720	$	123,015	$	1,116	$	124,131	$	2,993,851
Net proceeds from sale of common shares	44		65,769		—		—		65,813		—		—		—		65,813
Restricted share award grants, net	5		(1,127)		(408)		—		(1,530)		—		—		—		(1,530)
Conversion of OP Units	2		2,417		—		—		2,419		(2,419)		—		(2,419)		—
Dividends/distributions declared	—		—		(54,912)		—		(54,912)		(2,263)		—		(2,263)		(57,175)
Contributions	—		—		—		—		—		—		7,884		7,884		7,884
Distributions	—		—		—		—		—		—		(53)		(53)		(53)
Change in fair value of interest rate swap agreements	—		—		—		(1,021)		(1,021)		—		—		—		(1,021)
Adjustment for Noncontrolling Interests ownership in Operating Partnership	—		(431)		—		—		(431)		431		—		431		—
Net income	—		—		10,202		—		10,202		423		64		487		10,689
Balance as of March 31, 2023	$	2,384	$	3,810,504	$	(926,790)	$	4,162	$	2,890,260	$	119,187	$	9,011	$	128,198	$	3,018,458
Net proceeds from sale of common shares	—		294		—		—		294		—		—		—		294
Restricted share award grants, net	1		3,459		(561)		—		2,899		—		—		—		2,899
Purchase of OP Units	—		—		—		—		—		(72)		—		(72)		(72)
Dividends/distributions declared	—		—		(54,936)		—		(54,936)		(2,257)		—		(2,257)		(57,193)
Contributions	—		—		—		—		—		—		287		287		287
Distributions	—		—		—		—		—		—		(52)		(52)		(52)
Change in fair value of interest rate swap agreements	—		—		—		5,120		5,120		—		—		—		5,120
Adjustment for Noncontrolling Interests ownership in Operating Partnership	—		(393)		—		—		(393)		393		—		393		—
Net income	—		—		12,544		—		12,544		515		59		574		13,118
Balance as of June 30, 2023	$	2,385	$	3,813,864	$	(969,743)	$	9,282	$	2,855,788	$	117,766	$	9,305	$	127,071	$	2,982,859
Restricted share award grants, net	—		3,746		(523)		—		3,223		—		—		—		3,223
Conversion of OP Units	—		350		—		—		350		(350)		—		(350)		—
Dividends/distributions declared	—		—		(54,938)		—		(54,938)		(2,257)		—		(2,257)		(57,195)
Distributions	—		—		—		—		—		—		(53)		(53)		(53)
Reclassification of accumulated gains on interest rate swap to earnings	—		—		—		(1,763)		(1,763)		—		—		—		(1,763)
Change in fair value of interest rate swap agreements	—		—		—		7,697		7,697		—		—		—		7,697
Adjustment for Noncontrolling Interests ownership in Operating Partnership	—		(415)		—		—		(415)		415		—		415		—
Net income	—		—		12,335		—		12,335		505		67		572		12,907
Balance as of September 30, 2023	$	2,385	$	3,817,545	$	(1,012,869)	$	15,216	$	2,822,277	$	116,079	$	9,319	$	125,398	$	2,947,675

The accompanying notes are an integral part of these consolidated financial statements.

6

Physicians Realty Trust

Consolidated Statements of Equity

(In thousands) (Unaudited)

	Par Value		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’  Equity		Operating Partnership Noncontrolling Interest		Partially Owned Properties  Noncontrolling Interest		Total Noncontrolling Interests		Total Equity
Balance at December 31, 2021	$	2,247	$	3,610,954	$	(776,001)	$	(892)	$	2,836,308	$	150,241	$	484	$	150,725	$	2,987,033
Net proceeds from sale of common shares	3		5,029		—		—		5,032		—		—		—		5,032
Restricted share award grants, net	3		118		(421)		—		(300)		—		—		—		(300)
Purchase of OP Units	—		—		—		—		—		(184)		—		(184)		(184)
Dividends/distributions declared	—		—		(51,879)		—		(51,879)		(2,740)		—		(2,740)		(54,619)
Contributions	—		—		—		—		—		—		569		569		569
Distributions	—		—		—		—		—		—		(55)		(55)		(55)
Change in market value of Redeemable Noncontrolling Interest in partially owned properties	—		—		717		—		717		—		—		—		717
Change in fair value of interest rate swap agreement	—		—		—		1,379		1,379		—		—		—		1,379
Adjustment for Noncontrolling Interests ownership in Operating Partnership	—		(217)		—		—		(217)		217		—		217		—
Net income	—		—		13,092		—		13,092		692		82		774		13,866
Balance as of March 31, 2022	$	2,253	$	3,615,884	$	(814,492)	$	487	$	2,804,132	$	148,226	$	1,080	$	149,306	$	2,953,438
Net proceeds from sale of common shares	9		18,475		—		—		18,484		—		—		—		18,484
Restricted share award grants, net	1		3,588		(911)		—		2,678		—		—		—		2,678
Dividends/distributions declared	—		—		(52,116)		—		(52,116)		(2,712)		—		(2,712)		(54,828)
Distributions	—		—		—		—		—		—		(61)		(61)		(61)
Change in market value of Redeemable Noncontrolling Interest in partially owned properties	—		—		527		—		527		—		—		—		527
Change in fair value of interest rate swap agreement	—		—		—		3,083		3,083		—		—		—		3,083
Adjustment for Noncontrolling Interests ownership in Operating Partnership	—		(488)		—		—		(488)		488		—		488		—
Net income	—		—		16,891		—		16,891		886		79		965		17,856
Balance as of June 30, 2022	$	2,263	$	3,637,459	$	(850,101)	$	3,570	$	2,793,191	$	146,888	$	1,098	$	147,986	$	2,941,177
Net proceeds from sale of common shares	5		7,925		—		—		7,930		—		—		—		7,930
Restricted share award grants, net	—		4,326		(536)		—		3,790		—		—		—		3,790
Purchase of OP Units	—		—		—		—		—		(2,139)		—		(2,139)		(2,139)
Dividends/distributions declared	—		—		(52,563)		—		(52,563)		(2,302)		—		(2,302)		(54,865)
Distributions	—		—		—		—		—		—		(61)		(61)		(61)
Change in market value of Redeemable Noncontrolling Interest in partially owned properties	—		—		1,513		—		1,513		—		—		—		1,513
Change in fair value of interest rate swap agreement	—		—		—		1,753		1,753		—		—		—		1,753
Adjustment for Noncontrolling Interests ownership in Operating Partnership	—		(727)		—		—		(727)		727		—		727		—
Net income	—		—		62,958		—		62,958		3,252		74		3,326		66,284
Balance as of September 30, 2022	$	2,268	$	3,648,983	$	(838,729)	$	5,323	$	2,817,845	$	146,426	$	1,111	$	147,537	$	2,965,382

The accompanying notes are an integral part of these consolidated financial statements.

7

Physicians Realty Trust

Consolidated Statements of Cash Flows

(In thousands) (Unaudited)

	Nine Months Ended September 30,
	2023		2022
Cash Flows from Operating Activities:
Net income	$	36,645	$	98,155
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	143,555		142,002
Amortization of deferred financing costs	2,028		1,739
Amortization of lease inducements and above/below-market lease intangibles	4,055		4,458
Straight-line rental revenue, net	(2,756)		(5,359)
Amortization of discount on unsecured senior notes	824		794
Amortization of above market assumed debt	—		(10)
Gain on extinguishment of debt	(1,763)		—
Gain on sale of investment properties, net	(13)		(57,375)
Equity in (gain) loss of unconsolidated entities	(1,260)		452
Distributions from unconsolidated entities	5,707		6,077
Change in fair value of derivatives	185		—
Provision for bad debts	571		269
Non-cash share compensation	12,290		12,400
Change in operating assets and liabilities:
Tenant receivables	711		(5,927)
Other assets	(3,019)		(1,455)
Accounts payable	542		(125)
Accrued expenses and other liabilities	7,610		6,258
Net cash provided by operating activities	205,912		202,353
Cash Flows from Investing Activities:
Proceeds from sale of investment properties	2,553		123,179
Acquisition of investment properties, net	(39,282)		(111,587)
Investment in unconsolidated entities, net	(3,671)		(13,349)
Returns of investment in unconsolidated entities	3,737		—
Development of real estate	(12,672)		—
Escrowed cash - acquisition deposits/earnest deposits	—		360
Capital expenditures on investment properties	(31,194)		(29,840)
Investment in real estate loans receivable	(22,272)		(29,618)
Repayment of real estate loans receivable	41,065		22,441
Leasing commissions	(2,588)		(2,766)
Lease inducements	(399)		(500)
Net cash used in investing activities	(64,723)		(41,680)
Cash Flows from Financing Activities:
Net proceeds from sale of common shares	65,914		31,446
Proceeds from credit facility borrowings	513,000		239,000
Repayment of credit facility borrowings	(306,000)		(251,000)
Repayment of senior unsecured notes	(15,000)		—
Principal payments on mortgage debt	(36,803)		(15,845)
Payment of debt issuance costs	(3,911)		(67)
Dividends paid - shareholders	(165,491)		(156,854)
Distributions to noncontrolling interests - Operating Partnership	(6,783)		(8,191)
Contributions from noncontrolling interest	8,171		569
Distributions to noncontrolling interests - partially owned properties	(281)		(517)
Payments of employee taxes for withheld stock-based compensation shares	(5,891)		(4,255)
Purchase of OP Units	(72)		(2,323)
Net cash provided by (used in) financing activities	46,853		(168,037)
Net increase (decrease) in cash and cash equivalents	188,042		(7,364)
Cash and cash equivalents, beginning of period	7,730		9,876
Cash and cash equivalents, end of period	$	195,772	$	2,512
Supplemental disclosure of cash flow information—interest paid during the period	$	66,082	$	57,977
Supplemental disclosure of noncash activity—change in fair value of interest rate swap agreements	$	11,796	$	6,215
Supplemental disclosure of noncash activity—conversion of loan receivable in connection to the acquisition of investment property	$	5,398	$	5,700

The accompanying notes are an integral part of these consolidated financial statements.

8

Physicians Realty Trust

Notes to Consolidated Financial Statements

Unless otherwise indicated or unless the context requires otherwise, the use of the words “we,” “us,” “our,” and the “Company,” refer to Physicians Realty Trust, together with its consolidated subsidiaries, including Physicians Realty L.P.

Note 1. Organization and Business

Physicians Realty Trust (the “Trust” or the “Company”) was organized in the state of Maryland on April 9, 2013. As of September 30, 2023, the Trust was authorized to issue up to 500,000,000 common shares of beneficial interest, par value $0.01 per share. The Trust filed a Registration Statement on Form S-11 with the Commission with respect to a proposed underwritten initial public offering (the “IPO”) and completed the IPO of its common shares and commenced operations on July 24, 2013.

The Trust contributed the net proceeds from the IPO to Physicians Realty L.P, a Delaware limited partnership (the “Operating Partnership”), and is the sole general partner of the Operating Partnership. The Trust’s operations are conducted through the Operating Partnership and wholly-owned and majority-owned subsidiaries of the Operating Partnership. The Trust, as the general partner of the Operating Partnership, controls the Operating Partnership and consolidates the assets, liabilities, and results of operations of the Operating Partnership.

The Trust is a self-managed REIT formed primarily to acquire, selectively develop, own, and manage health care properties that are leased to physicians, hospitals, and health care delivery systems.

ATM Program

In May 2021, the Trust and the Operating Partnership entered into an At Market Issuance Sales Agreement (the “2021 Sales Agreement”) with KeyBanc Capital Markets Inc., Credit Agricole Securities (USA) Inc., BMO Capital Markets Corp., and Raymond James & Associates, Inc. in their capacity as agents for the Company and/or forward sellers and Stifel, Nicolaus & Company, Incorporated in its capacity as sales agent for the Company (collectively, the “2021 Agents”) and Bank of Montreal, Credit Agricole Corporate and Investments Bank, KeyBanc Capital Markets Inc., and Raymond James & Associates, Inc. as forward purchasers for the Company (the “2021 Forward Purchasers”), pursuant to which the Trust may issue and sell, from time to time, its common shares having an aggregate offering price of up to $500 million through the 2021 Agents (the “2021 ATM Program”). The 2021 Sales Agreement contemplates that, in addition to the issuance and sale of the Trust’s common shares through the 2021 Agents, the Trust may also enter into one or more forward sales agreements from time to time in the future with each of the 2021 Forward Purchasers.

In August 2023, the Trust and the Operating Partnership entered into an At Market Issuance Sales Agreement (the “2023 Sales Agreement”) with BMO Capital Markets Corp., Credit Agricole Securities (USA) Inc., KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., Regions Securities LLC and Stifel, Nicolaus & Company, Incorporated as sales agents for the Company and/or forward sellers (collectively, “2023 Agents”), and Bank of Montreal, Crédit Agricole Corporate and Investment Bank, KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., Regions Securities LLC and Stifel, Nicolaus & Company, Incorporated (collectively, “2023 Forward Purchasers”), pursuant to which the Trust may issue and sell, from time to time, its common shares having an aggregate offering price of up to $600 million through the 2023 Agents (the “2023 ATM Program”). The 2023 Sales Agreement contemplates that, in addition to the issuance and sale of the Trust’s common shares through the 2023 Agents, the Trust may also enter into one or more forward sales agreements from time to time in the future with each of the 2023 Forward Purchasers. Upon entry into the 2023 Sales Agreement, we terminated the 2021 ATM Program.

During the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023, the Trust issued and sold common shares through the 2021 ATM Program as follows (net proceeds in thousands):

	Common shares sold	Weighted average price		Net proceeds
Quarter ended March 31, 2023	4,400,000	$	15.10	$	65,776
Quarter ended June 30, 2023	—	—		—
Quarter ended September 30, 2023	—	—		—
Year to date	4,400,000	$	15.10	$	65,776

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As of September 30, 2023, the Trust has $600.0 million of common shares remaining available under the 2023 ATM Program. Subsequent to September 30, 2023, in connection with the Merger Agreement, the Trust suspended the 2023 ATM Program.

Note 2. Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods ended September 30, 2023 and 2022 pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. All such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements included in the Trust’s 2022 Annual Report. The Company has consistently applied its accounting policies to all periods presented in these consolidated financial statements.

Noncontrolling Interests

The Company presents the portion of any equity it does not own in entities that it controls (and thus consolidates) as noncontrolling interests and classifies such interests as a component of consolidated equity, separate from the Company’s total shareholders’ equity, on the consolidated balance sheets.

Operating Partnership: Noncontrolling interests in the Company include partnership interests of the Operating Partnership (“OP Units”) held by other investors. Net income or loss is allocated to noncontrolling interests (limited partners) based on their respective ownership percentage of the Operating Partnership. The ownership percentage is calculated by dividing the number of OP Units held by the noncontrolling interests by the total OP Units held by the noncontrolling interests and the Trust. Issuance of additional common shares and OP Units changes the ownership interests of both the noncontrolling interests and the Trust. Such transactions and the related proceeds are treated as capital transactions. 

As of September 30, 2023, the Trust held a 96.1% interest in the Operating Partnership. As the sole general partner and the majority interest holder, the Trust consolidates the financial position and results of operations of the Operating Partnership.

Partially Owned Properties: The Trust reflects noncontrolling interests in partially owned properties on the consolidated balance sheets for the portion of consolidated properties that are not wholly owned by the Company. The earnings or losses from those properties attributable to the noncontrolling interests are reflected as noncontrolling interests in partially owned properties in the consolidated statements of income.

Redeemable Noncontrolling Interests - Partially Owned Properties

In connection with the Company’s acquisitions of the outpatient medical facility, ambulatory surgery center, and hospital located on the Great Falls Hospital campus in Great Falls, Montana, physicians affiliated with the sellers retained non-controlling interests which were, at the holders’ option, able to be redeemed at any time after May 1, 2023. Due to the redemption provision, which was outside of the control of the Trust, the Trust classified the investment in the mezzanine section of its consolidated balance sheets. On July 14, 2022, the Company disposed of these three properties and removed the related redeemable noncontrolling interests from its consolidated balance sheets.

Through a consolidated joint venture with MedProperties Realty Advisors, LLC (“MedProperties”), the Company acquired Calko Medical Center in Brooklyn, New York. As part of the joint venture, MedProperties can redeem its interest, at its option, at any time after September 9, 2025. Due to the redemption provision, which is outside of the control of the Company, the Company classifies the noncontrolling interests in the mezzanine section of its consolidated balance sheets. The Company records the carrying amount of the redeemable noncontrolling interests at the greater of the carrying value or redemption value.

Dividends and Distributions

On September 21, 2023, the Trust announced that its Board of Trustees authorized, and the Trust declared, a cash dividend of $0.23 per common share for the quarter ended September 30, 2023. The dividend was paid on October 17, 2023, to common shareholders and holders of record of OP Units as of the close of business on October 3, 2023.

10

Tax Status of Dividends and Distributions

The Company’s distributions of current and accumulated earnings and profits for U.S. federal income tax purposes generally are taxable to shareholders as ordinary income. Distributions in excess of these earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent thereof (non-dividend distributions) and thereafter as taxable gain.

Any cash distributions received by an OP Unit holder in respect of its OP Units generally will not be taxable to such OP Unit holder for U.S. federal income tax purposes, to the extent that such distribution does not exceed the OP Unit holder’s basis in its OP Units. Any such distribution will instead reduce the OP Unit holder’s basis in its OP Units (and OP Unit holders will be subject to tax on the taxable income allocated to them by the Operating Partnership in respect of their OP Units when such income is earned by the Operating Partnership, with such income allocation increasing the OP Unit holders’ basis in their OP Units).

The Company has elected taxable REIT subsidiary (“TRS”) status for certain of its corporate subsidiaries and, as a result, these entities will incur both federal and state income taxes on any taxable income of such entities after consideration of any net operating losses. To date, these income taxes have been de minimis.

Real Estate Loans Receivable, Net

Real estate loans receivable consists of nine mezzanine loans, three term loans, and two construction loans as of September 30, 2023. Generally, each mezzanine loan is collateralized by a pledge of the borrower’s ownership interest in the respective real estate owner, each term loan is secured by a mortgage on a related outpatient medical facility, and construction loans are secured by mortgages on the land and the improvements as constructed. The reserve for loan losses was $0.4 million as of September 30, 2023.

Rental and Related Revenues

Rental revenue is recognized on a straight-line basis over the terms of the related leases when collectability is probable. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue for amounts more or less than amounts currently due from tenants. Amounts recognized in excess of amounts currently due from tenants are included in other assets and were approximately $105.0 million and $101.3 million as of September 30, 2023 and December 31, 2022, respectively. If the Company determines that collectability of straight-line rents is not probable, income recognition is limited to the lesser of cash collected, or lease income reflected on a straight-line basis, plus variable rent when it becomes accruable.

In accordance with ASC 842, Leases, Topic 842, if the collectability of a lease changes after the commencement date, any difference between lease income that would have been recognized and the lease payments shall be recognized as an adjustment to lease income. Bad debt recognized as an adjustment to rental and related revenues was $0.9 million for the nine months ended September 30, 2023 and $0.2 million for the nine months ended September 30, 2022.

Rental revenue is adjusted by the amortization of lease inducements and above-market or below-market rents on certain leases. Lease inducements and above-market or below-market rents are amortized on a straight-line basis over the remaining lease term. Rental and related revenues also include expense recoveries, which relate to tenant reimbursement of real estate taxes, insurance, and other operating expenses that are recognized in the period the applicable expenses are incurred. The reimbursements are recorded gross, as these costs are incurred by the Company and reimbursed by the tenants. The Company has certain tenants with absolute net leases. Under these lease agreements, the tenant is responsible for operating and building expenses and the Company does not recognize expense recoveries.

Derivative Instruments

When the Company has derivative instruments, it records them either as an asset or a liability measured at their fair value unless they qualify for a normal purchase or normal sale exception. When specific hedge accounting criteria are not met or if the Company does not elect to apply for hedge accounting, changes in the Company’s derivative instruments’ fair value are recognized currently in earnings. If hedge accounting is applied to a derivative instrument, the entire change in the fair value of its derivatives designated and qualified as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) on the consolidated balance sheets and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings.

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To manage interest rate risk for certain of its variable-rate debt, the Company uses interest rate swaps as part of its risk management strategy. These derivatives are designed to mitigate the risk of future interest rate increases by providing a fixed interest rate for a limited, pre-determined period of time. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of September 30, 2023, the Company had three outstanding interest rate swaps designated as cash flow hedges of interest rate risk, and one interest rate swap that was de-designated as a hedging instrument during the quarter ended September 30, 2023 but remains outstanding. Further detail is provided in Note 7 (Derivatives).

Reclassifications

Certain amounts in the accompanying consolidated balance sheet for 2022 have been reclassified to conform to the 2023 consolidated financial statement presentation. The reclassifications had no impact on total assets or any balance sheet total or subtotal.

New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional relief to applying reference rate reform to changing reference rates, contracts, hedging relationships, and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”). The amendments in this update may be applied through December 31, 2024.

On March 31, 2023, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a First Amendment to the Third Amended and Restated Credit Agreement to update the benchmark provisions to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”), as the reference rate for the purpose of calculating interest under the agreement. The Company also amended its fixed interest rate swap agreement on its mortgage debt to update the reference rate from LIBOR to SOFR. As a result, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

Note 3. Investment and Disposition Activity

During the nine months ended September 30, 2023, the Company executed contractual commitments related to a $40.5 million development project, with $12.7 million spent on construction in progress thus far, completed the acquisition of three outpatient medical facilities and three medical condominium units for an investment of $38.5 million and two parcels of land adjacent to existing outpatient medical facilities for an investment of $1.7 million, and paid $2.2 million of additional purchase consideration under six earn-out agreements. The Company also closed on a $35.8 million construction loan, funding $10.7 million to date. Additionally, the Company funded an aggregate of $13.2 million on new term loans, previously announced loan commitments, and other investments, including an $1.3 million investment in IJRI Properties, LLC, which is an entity constructing and operating an outpatient medical facility in Indiana. The Company contributed $2.0 million to the joint venture with Davis Medical Investors, LLC (the “Davis Joint Venture”) to fund additional purchase consideration related to the venture’s acquisitions. Investment activity totaled approximately $81.0 million during the nine months ended September 30, 2023. As part of these investments, the Company incurred approximately $2.0 million of capitalized acquisition costs.

Investment activity for the three months ended September 30, 2023, included the acquisition of one outpatient medical facility and a parcel of land adjacent to one of our existing properties for an aggregate purchase price of $3.5 million. Additionally, the Company funded an aggregate $5.9 million under two earn-out agreements, previously announced loan commitments, and other investments, including an $1.3 million investment in IJRI Properties, LLC, which is an entity constructing and operating an outpatient medical facility in Indiana. The Company also funded construction in progress of $7.4 million, resulting in total investment activity of approximately $16.8 million as of September 30, 2023.

12

The following table summarizes the acquisition date fair values of the assets acquired and the liabilities assumed, as well as follow-on capitalized costs during the nine months ended September 30, 2023, which the Company determined using Level 2 and Level 3 inputs (in thousands):

	1st Quarter		2nd Quarter		3rd Quarter		Total
Land	$	1,356	$	6,016	$	1,345	$	8,717
Building and improvements	1,294		28,353		2,459		32,106
In-place lease intangibles	—		3,491		919		4,410
Below market in-place lease intangibles	—		—		(553)		(553)
Net assets acquired	$	2,650	$	37,860	$	4,170	$	44,680
Satisfaction of real estate loans receivable	—		(5,398)		—		(5,398)
Cash used in acquisition of investment property	$	2,650	$	32,462	$	4,170	$	39,282

Dispositions

During the nine months ended September 30, 2023, the Company sold one outpatient medical facility for approximately $2.6 million, realizing an insignificant gain.

Note 4. Intangibles

The following is a summary of the carrying amount of intangible assets and liabilities as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023						December 31, 2022
	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Assets
In-place leases	$	449,716	$	(272,643)	$	177,073	$	445,583	$	(241,643)	$	203,940
Above-market leases	$	59,752	$	(34,282)	$	25,470	$	59,752	$	(30,096)	$	29,656
Liabilities
Below-market leases	$	36,962	$	(13,792)	$	23,170	$	37,002	$	(12,621)	$	24,381

The following is a summary of acquired lease intangible amortization for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Amortization expense related to in-place leases	$	10,204	$	10,629	$	31,278	$	32,814
Decrease in rental income related to above-market leases	1,373		1,384		4,187		4,390
Increase in rental income related to below-market leases	594		556		1,764		1,522

Future aggregate net amortization of acquired lease intangibles as of September 30, 2023, is as follows (in thousands):

	Net Decrease (Increase)  in Revenue		Net Increase in  Expenses
2023	$	748	$	9,642
2024	2,887		35,184
2025	2,316		29,663
2026	1,161		23,548
2027	994		20,625
Thereafter	(5,806)		58,411
Total	$	2,300	$	177,073

13

As of September 30, 2023, the weighted average remaining amortization period is 7 years for in-place and above-market lease intangible assets and 15 years for below-market lease intangibles.

Note 5. Other Assets

Other assets consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Straight line rent receivable, net	$	104,991	$	101,306
Interest rate swaps	14,731		2,045
Leasing commissions, net	14,043		13,231
Prepaid expenses	14,013		11,009
Lease inducements, net	7,577		7,894
Escrows	1,574		1,565
Notes receivable, net	363		370
Other	8,850		9,387
Total	$	166,142	$	146,807

Note 6. Debt

The following is a summary of debt as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Fixed interest mortgage notes (1)	$	23,330	$	59,776
Variable interest mortgage notes (2)	104,797		105,153
Total mortgage debt	128,127		164,929
$1.0 billion unsecured revolving credit facility due September 2025 (3)	—		193,000
$400 million unsecured term borrowing bearing fixed interest of 4.693%, due May 2028 (4)	400,000		—
$400 million senior unsecured notes bearing fixed interest of 4.30%, due March 2027	400,000		400,000
$350 million senior unsecured notes bearing fixed interest of 3.95%, due January 2028	350,000		350,000
$500 million senior unsecured notes bearing fixed interest of 2.625%, due November 2031	500,000		500,000
$135 million senior unsecured notes bearing fixed interest of 4.43% to 4.74%, due January 2026 to 2031	135,000		150,000
$75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027	75,000		75,000
Total principal	1,988,127		1,832,929
Unamortized deferred financing costs	(9,336)		(7,453)
Unamortized discounts	(6,535)		(7,359)
Total debt	$	1,972,256	$	1,818,117

(1)As of September 30, 2023, one fixed interest mortgage note bears interest of 4.63%, due in 2024, and is collateralized by one property with a net book value of $37.2 million. As of December 31, 2022, fixed interest mortgage notes bear interest from 3.33% to 4.63%, due in 2024, with a weighted average interest rate of 3.85%. The notes are collateralized by two properties with a net book value of $94.9 million. one mortgage note bears interest at LIBOR plus 1.90% and the Trust entered into a pay-fixed receive-variable interest rate swap, fixing the variable component at 1.43% as of December 31, 2022.

(2)Variable interest mortgage notes bear variable interest of SOFR plus 1.85% and PRIME plus 2.75% for a weighted average interest rate of 7.35% as of September 30, 2023. Variable interest mortgage notes bear variable interest of SOFR plus 1.85% and LIBOR plus 2.75% for a weighted average interest rate of 6.20% as of December 31, 2022. The notes are due in 2026 and 2028 and collateralized by four properties with a net book value of $284.4 million as of September 30, 2023 and $295.5 million as of December 31, 2022.

(3)The unsecured revolving credit facility bears variable interest of SOFR plus 0.95%, inclusive of a 0.10% SOFR index adjustment, as of September 30, 2023 and LIBOR plus 0.85% as of December 31, 2022.

14

(4)The Company’s borrowings under the term loan feature of the Credit Agreement (as defined below) bear interest at a rate equal to 1.10%, inclusive of a 0.10% SOFR index adjustment, plus Daily Simple SOFR as of September 30, 2023 based on the Company’s current credit rating. The Company entered into fixed-for-floating interest rate swaps for the full borrowing amount, fixing the SOFR component of this rate at 3.59%, and a current all-in fixed rate of 4.69%.

On September 24, 2021, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a Third Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) which extended the maturity date of the revolving credit facility under the Credit Agreement to September 24, 2025 and reduced the interest rate margin applicable to borrowings. The Credit Agreement included an unsecured revolving credit facility of $1.0 billion and contained a term loan feature of $250.0 million, bringing total borrowing capacity to $1.25 billion. The Credit Agreement also included a swingline loan commitment for up to 10% of the maximum principal amount and provided an accordion feature allowing the Operating Partnership to increase borrowing capacity by up to an additional $500.0 million, subject to customary terms and conditions, resulting in a maximum borrowing capacity of $1.75 billion. The revolving credit facility under the Credit Agreement also included two six-month extension options.

On March 31, 2023, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a First Amendment to the Credit Agreement which expanded the accordion feature allowing the Operating Partnership to increase borrowing capacity by up to an additional $500.0 million, and replaced the LIBOR-based benchmark rates applicable to borrowings under the Credit Agreement with SOFR based benchmark rates plus a SOFR index adjustment of 0.10%.

On May 24, 2023, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a Second Amendment to the Credit Agreement, which added a new $400.0 million unsecured term loan with a scheduled maturity date of May 24, 2028 and expanded the accordion feature, which allows the Operating Partnership to increase borrowing capacity under the Credit Agreement by up to an additional $500.0 million, subject to customary terms and conditions, for a maximum aggregate principal amount of all revolving commitments and term loans under the Credit Agreement of $1.9 billion. On the same day, the Operating Partnership borrowed $400.0 million under the term loan feature of the Credit Agreement. Borrowings under the term loan feature of the Credit Agreement bear interest on the outstanding principal amount at a rate equal to 1.10%, inclusive of a 0.10% SOFR index adjustment, plus Daily Simple SOFR as defined in the Credit Agreement. The Company simultaneously entered into fixed-for-floating interest rate swaps for the full borrowing amount under the term loan, fixing the Daily Simple SOFR component of the borrowing rate at 3.593%, for a current all-in fixed rate of 4.693%. Both the borrowing and the fixed-for-floating interest rate swaps have a maturity date of May 24, 2028.

As of September 30, 2023, the borrower had investment grade ratings of BBB from S&P and Baa2 from Moody’s. As such, borrowings under the revolving credit facility of the Credit Agreement accrue interest on the outstanding principal at a rate of SOFR plus 0.95%, inclusive of a 0.10% SOFR index adjustment. The Credit Agreement includes a facility fee equal to 0.20% per annum, which is also determined by the borrower’s investment grade rating.

Base Rate Loans, Adjusted SOFR Loans, and Letters of Credit (each, as defined in the Credit Agreement) will be subject to interest rates, based upon the borrower’s investment grade rating as follows:

Credit Rating	Applicable Margin for Revolving Loans: SOFR Loans and Letter of Credit Fee	Applicable Margin for Revolving Loans: Base Rate Loans		Applicable Margin for Term Loans: SOFR Loans	Applicable Margin for Term Loans: Base Rate Loans
At Least A- or A3	SOFR + 0.725%	—	%	SOFR + 0.85%	—	%
At Least BBB+ or Baa1	SOFR + 0.775%	—	%	SOFR + 0.90%	—	%
At Least BBB or Baa2	SOFR + 0.85%	—	%	SOFR + 1.00%	—	%
At Least BBB- or Baa3	SOFR + 1.05%	0.05	%	SOFR + 1.25%	0.25	%
Below BBB- or Baa3	SOFR + 1.40%	0.40	%	SOFR + 1.65%	0.65	%

The Credit Agreement contains financial covenants that, among other things, require compliance with leverage and coverage ratios and maintenance of minimum tangible net worth, as well as covenants that may limit the Trust’s and the Operating Partnership’s ability to incur additional debt, grant liens, or make distributions. Subject to the restrictions in the Merger Agreement, the Company may voluntarily prepay any revolving or term loan under the Credit Agreement in whole or in part without premium or penalty. As of September 30, 2023, the Company was in compliance with all financial covenants related to the Credit Agreement.

15

The Credit Agreement includes customary representations and warranties by the Trust and the Operating Partnership and imposes customary covenants on the Operating Partnership and the Trust. The Credit Agreement also contains customary events of default, and if an event of default occurs and continues, the Operating Partnership is subject to certain actions by the administrative agent, including without limitation, the acceleration of repayment of all amounts outstanding under the Credit Agreement.

As of September 30, 2023, the Company did not have any borrowings outstanding under its $1.0 billion unsecured revolving credit facility feature or the $500.0 million accordion feature of the Credit Agreement and had $400.0 million of borrowings outstanding under the term loan feature of the Credit Agreement.

Notes Payable

As of September 30, 2023, the Company had $1.5 billion aggregate principal amount of senior notes issued and outstanding by the Operating Partnership, comprised of $25.0 million maturing in 2025, $70.0 million maturing in 2026, $425.0 million maturing in 2027, $395.0 million maturing in 2028, and $545.0 million maturing in 2031.

Certain properties are encumbered by mortgage loans that contain financial covenants. As of September 30, 2023, the Trust was in compliance with all mortgage debt financial covenants.

Scheduled principal payments due on consolidated debt as of September 30, 2023 are as follows (in thousands):

2023	$	255
2024	23,669
2025	25,476
2026	170,476
2027	425,476
Thereafter	1,342,775
Total Payments	$	1,988,127

As of September 30, 2023, the Company had total consolidated indebtedness of approximately $2.0 billion. The weighted average interest rate on consolidated indebtedness was 4.07% (based on the 30-day SOFR rate of 5.31% and a PRIME rate of 8.50% as of September 30, 2023). As of September 30, 2023, we had approximately 5.0% and 0.2% of our outstanding long-term debt exposed to fluctuations in SOFR and PRIME, respectively.

For the three months ended September 30, 2023 and 2022, the Company incurred interest expense on its debt, exclusive of deferred financing cost amortization, of $21.0 million and $17.7 million, respectively. For the nine month periods ending September 30, 2023 and 2022, the Company incurred interest expense on its debt, exclusive of deferred financing cost amortization, of $59.6 million and $50.6 million, respectively.

Note 7. Derivatives

In the normal course of business, a variety of financial instruments are used to manage or hedge interest rate risk. When specific hedge accounting criteria are not met, that changes in a derivative’s fair value be recognized currently in earnings. Changes in the fair market values of the Company’s derivative instruments are recorded in the consolidated statements of income if such derivatives do not qualify for, or the Company does not elect to apply for, hedge accounting. As a result of the Company’s adoption of ASU 2017-12 as of January 1, 2019, the change in the fair value of our derivatives designated and qualified as cash flow hedges are recorded in accumulated other comprehensive income on the consolidated balance sheets and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings. During the three months ended September 30, 2023, the Company de-designated an interest rate swap upon the repayment of the related debt instrument and reclassified the $1.8 million accumulated gain from other comprehensive income to earnings. This derivative instrument has a fair value of $1.6 million as of September 30, 2023, and is classified in other assets. Future changes in value on this derivative instrument, which matures on October 31, 2024, will be recorded directly in earnings.

As of September 30, 2023, the Company had three outstanding interest rate swaps designated as cash flow hedges of interest rate risk. See Note 2 (Summary of Significant Accounting Policies) for a further discussion of our derivatives. In

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addition, the Company recognizes its share of other comprehensive income related to derivative instruments held by unconsolidated entities.

The following table presents the fair value of the Company’s derivative financial instruments, as well as their classification on the Company’s consolidated balance sheets as of September 30, 2023 (in thousands):

Derivatives Instruments	Maturity Date	Number of Instruments	Total Notional Amount		Interest Rate		Balance Sheet Location	Fair Value
Cash flow hedge interest rate swaps	5/24/2028	3	$	400,000	3.59	%	Other Assets	$	13,152
Interest rate swap	10/31/2024	1	36,050		1.37	%	Other Assets	1,579
Total		4	$	436,050				$	14,731

The following tables provide a summary of the effect of interest rate swaps on the Company’s accompanying consolidated statements of income and comprehensive income for the nine months ended September 30, 2023 and 2022, respectively (amounts in thousands):

Derivative Instruments as of September 30, 2023	Maturity Date	Amount of Gain/(Loss) Recognized in OCI on Derivative		Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Cash flow hedge interest rate swaps	5/24/2028	$	13,152	Interest expense	$	—
Interest rate swap	10/31/2024	—		Interest expense	1,763
Total		$	13,152		$	1,763

Derivative Instruments as of September 30, 2022	Maturity Date	Amount of Gain/(Loss) Recognized in OCI on Derivative		Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Interest rate swap	10/31/2024	$	2,523	Interest expense	$	—

Note 8. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Real estate taxes payable	$	30,893	$	23,303
Prepaid rent	23,537		21,062
Accrued interest	11,683		18,196
Accrued expenses	7,841		7,920
Accrued incentive compensation	5,342		2,700
Security deposits	4,586		4,338
Tenant improvement allowances	1,853		1,831
Other	9,902		8,370
Total	$	95,637	$	87,720

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Note 9. Stock-based Compensation

The Company follows ASC 718, Compensation - Stock Compensation (“ASC 718”), in accounting for its share-based payments. This guidance requires measurement of the cost of employee services received in exchange for stock compensation based on the grant-date fair value of the employee stock awards. This cost is recognized as compensation expense ratably over the employee’s requisite service period. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized when incurred. Share-based payments classified as liability awards are marked to fair value at each reporting period. Any common shares issued pursuant to the Company's incentive equity compensation and employee stock purchase plans will result in the Operating Partnership issuing OP Units to the Trust on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances.

Certain of the Company’s employee stock awards vest only upon the achievement of performance targets. ASC 718 requires recognition of compensation cost only when achievement of performance conditions is considered probable. Consequently, the Company’s determination of the amount of stock compensation expense requires judgment in estimating the probability of achievement of these performance targets. Subsequent changes in actual experience are monitored and estimates are updated as information is available.

In connection with the IPO, the Trust adopted the Physicians Realty Trust 2013 Equity Incentive Plan, which made shares available for awards for participants (the “2013 Plan”). At the Company’s Annual Meeting of Shareholders held on May 3, 2023, shareholders approved the Amended and Restated Physicians Realty Trust 2013 Equity Incentive Plan (the “Amended and Restated 2013 Plan”). The Amended and Restated 2013 Plan increased the number of common shares authorized for issuance to a total of 11,000,000. The Amended and Restated 2013 Plan also extended the term of the plan from 2029 to 2033, among other changes.

Restricted Common Shares

Restricted common shares granted under the 2013 Plan are eligible for dividends as well as the right to vote. In the nine months ended September 30, 2023, the Trust granted a total of 342,939 restricted common shares with a total value of $5.0 million to its officers and certain of its employees, which have a vesting period of one to three years. In January 2023, under the 2013 Plan, the Company granted restricted common shares to certain of its officers under a salary deferral program, part of which vests after one year, with the remainder vesting after two years.

A summary of the status of the Trust’s non-vested restricted common shares as of September 30, 2023 and changes during the nine month period then ended follow:

	Common Shares	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2022	272,898	$	16.69
Granted	342,939	14.57
Vested	(239,602)	16.54
Forfeited	(364)	17.45
Non-vested at September 30, 2023	375,871	$	14.84

For all service awards, the Company records compensation expense for the entire award on a straight-line basis over the requisite service period. For the three months ended September 30, 2023 and 2022, the Company recognized non-cash share compensation of $1.2 million and $1.0 million, respectively. For the nine month periods ending September 30, 2023 and 2022, the Company recognized non-cash share compensation of $3.5 million and $2.9 million, respectively. Unrecognized compensation expense on September 30, 2023 was $2.9 million.

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Restricted Share Units

In January 2023, under the 2013 Plan, the Company granted 11,274 restricted share units to certain of its trustees in lieu of all or a portion of such trustee’s 2023 cash retainer. These units are subject to certain timing conditions and a one-year service period. Each restricted share unit contains one dividend equivalent. Each recipient will accrue dividend equivalents on awarded share units equal to the cash dividend that would have been paid on the awarded share unit had the awarded share unit been an issued and outstanding common share on the record date for the dividend. With respect to the performance and timing conditions of the January 2023 grants, the grant date fair value of $14.47 per unit was based on the share price at the date of grant.

In March 2023, under the 2013 Plan, the Company granted restricted share units at a target level of 355,388 to its officers and certain of its employees and 62,586 to its trustees. Units granted to officers and certain employees under the Company’s 2013 Plan are subject to certain performance and market conditions and a three-year service period. Units granted to trustees are subject to certain timing conditions and a two-year service period for full vesting. Each restricted share unit contains one dividend equivalent. Each recipient will accrue dividend equivalents on awarded share units equal to the cash dividend that would have been paid on the awarded share unit had the awarded share unit been an issued and outstanding common share on the record date for the dividend.

Approximately 30% of the restricted share units issued to officers and certain employees under the Company’s 2013 Plan in 2023 vest based on a certain market condition. The awards containing the market condition were valued with the assistance of independent valuation specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $18.71 per unit for the March 2023 grant using the following assumptions:

Volatility	23.4		%
Dividend assumption	reinvested
Expected term in years	2.83 years
Risk-free rate	4.70		%
Share price (per share)	$	14.70

The remaining 70% of the restricted share units issued to officers and certain employees under the Company’s 2013 Plan, and 100% of other restricted share units issued to trustees vest based upon certain performance or timing conditions. With respect to the performance and timing conditions of the March 2023 grants, the grant date fair value of $14.70 per unit was based on the share price at the date of grant. The combined weighted average grant date fair value of the March 2023 restricted share units issued to officers and certain employees was $15.90 per unit.

The following is a summary of the activity in the Trust’s restricted share units during the nine months ended September 30, 2023: 

	Executive Awards				Trustee Awards
	Restricted Share Units		Weighted Average Grant Date Fair Value		Restricted Share Units	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2022	1,046,940		$	21.41	77,992	$	16.60
Granted	355,388		15.90		73,860	14.66
Vested	(223,579)	(1)	24.36		(49,890)	16.74
Non-vested at September 30, 2023	1,178,749		$	19.19	101,962	$	15.13

(1)Restricted units vested by Company executives in 2023 resulted in the issuance of 652,851 common shares, less 290,380 common shares withheld to cover minimum withholding tax obligations.

For the three months ended September 30, 2023 and 2022, the Company recognized non-cash share compensation of $2.6 million and $3.3 million, respectively. For the nine month periods ending September 30, 2023 and 2022, the Company recognized non-cash share compensation of $8.6 million and $9.4 million, respectively. Unrecognized compensation expense on September 30, 2023 was $11.5 million.

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Note 10. Fair Value Measurements

ASC Topic 820, Fair Value Measurement (“ASC 820”), requires certain assets and liabilities be reported and/or disclosed at fair value in the financial statements and provides a framework for establishing that fair value. The framework for determining fair value is based on a hierarchy that prioritizes the valuation techniques and inputs used to measure fair value.

In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset. These Level 3 fair value measurements are based primarily on management’s own estimates using pricing models, discounted cash flow methodologies, or similar techniques taking into account the characteristics of the asset or liability. In instances where inputs used to measure fair value fall into different levels of the fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. As part of the Company’s acquisition process, Level 3 inputs are used to measure the fair value of the assets acquired and liabilities assumed.

The Company’s derivative instruments as of September 30, 2023 consist of four interest rate swaps, of which three are designated as cash flow hedges of interest rate risk, as detailed in the Derivative Instruments section of Note 7 (Derivatives) and Note 2 (Summary of Significant Accounting Policies) of this report.

The interest rate swaps are not traded on an exchange. The Company’s derivative assets and liabilities are recorded at fair value based on a variety of observable inputs including contractual terms, interest rate curves, yield curves, measure of volatility, and correlations of such inputs. The Company measures its derivatives at fair value on a recurring basis. The fair values are based on Level 2 inputs described above. The Company considers its own credit risk, as well as the credit risk of its counterparties, when evaluating the fair value of its derivatives.

The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. This generally includes assets subject to impairment. There were no such assets measured at fair value as of September 30, 2023.

The carrying amounts of cash and cash equivalents, tenant receivables, payables, and accrued interest are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for real estate loans receivable and mortgage debt are estimated based on rates currently prevailing for similar instruments of similar maturities and are based primarily on Level 2 inputs.

The following table presents the fair value of the Company’s financial instruments (in thousands):

	September 30, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Real estate loans receivable, net	$	79,884	$	76,935	$	104,973	$	102,162
Notes receivable, net	$	363	$	363	$	370	$	370
Derivative assets	$	14,731	$	14,731	$	2,045	$	2,045
Liabilities:
Credit facility	$	(400,000)	$	(400,000)	$	(193,000)	$	(193,000)
Notes payable	$	(1,460,000)	$	(1,261,390)	$	(1,475,000)	$	(1,302,767)
Mortgage debt	$	(128,127)	$	(127,628)	$	(164,929)	$	(163,129)

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Note 11. Tenant Operating Leases

The Company is a lessor of outpatient medical facilities and other health care facilities. Leases have expirations from 2023 through 2042. As of September 30, 2023, the future minimum rental payments on non-cancelable leases, exclusive of expense recoveries and minimum rental payments for assets classified as held for sale, if applicable, were as follows (in thousands):

2023	$	92,037
2024	363,106
2025	346,518
2026	289,162
2027	237,149
Thereafter	818,876
Total	$	2,146,848

For the three months ended September 30, 2023 and 2022, the Company recognized $134.5 million and $128.6 million, respectively, of rental and other lease-related income related to our operating leases, of which $39.8 million and $36.6 million, respectively, were variable lease payments. For the nine month periods ending September 30, 2023 and 2022, the Company recognized $397.1 million and $385.8 million, respectively, of rental and other leased-related income with respect to our operating leases, of which $115.2 million and $107.5 million, respectively, were variable lease payments.

Note 12. Rent Expense

The Company leases the rights to parking structures at two of its properties, the air that one property occupies, and the land upon which 97 of its properties are located from third party landowners pursuant to separate leases. In addition, the Company has nine corporate leases, primarily for office space.

The Company’s leases include both fixed and variable rental payments and may also include escalation clauses and renewal options. These leases have terms of up to 92 years remaining, excluding extension options, with a weighted average remaining term of 43 years.

At the inception of a new lease, the Company establishes an operating or finance lease asset and operating or finance lease liability calculated as the present value of future minimum lease payments. As the Company’s leases do not provide an implicit rate, the Company calculates a discount rate that approximates its incremental borrowing rate available at lease commencement in order to determine the present value of future minimum lease payments. The approximated weighted average discount rate was 4.4% as of September 30, 2023. There are no operating or finance leases that have not yet commenced that would have a significant impact on the Company’s consolidated balance sheets.

As of September 30, 2023, the future minimum lease obligations under non-cancelable parking, air, ground, and corporate leases were as follows (in thousands):

2023	$	1,261
2024	5,129
2025	5,101
2026	5,090
2027	5,092
Thereafter	248,386
Total undiscounted lease payments	$	270,059
Less: Interest	(165,257)
Present value of lease liabilities	$	104,802

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Lease costs consisted of the following for the nine months ended September 30, 2023 (in thousands):

Fixed lease cost	$	2,480
Variable lease cost	1,007
Total lease cost	$	3,487

Note 13. Credit Concentration

The Company uses annualized base rent (“ABR”) as its credit concentration metric. ABR is calculated by multiplying contractual base rent for the month ended September 30, 2023 by 12, excluding the impact of concessions and straight-line rent. The following table summarizes certain information about the Company’s top five tenant credit concentrations as of September 30, 2023 (in thousands):

Tenant	Total ABR		Percent of ABR
CommonSpirit - CHI - Nebraska	$	18,666	5.1	%
Northside Hospital	16,553		4.5	%
UofL Health - Louisville, Inc.	14,656		4.0	%
HonorHealth	11,287		3.1	%
US Oncology	11,047		3.0	%
Remaining portfolio	295,897		80.3	%
Total	$	368,106	100.0	%

ABR collected from the Company’s top five tenant relationships comprises 19.7% of its total ABR as of September 30, 2023. Total ABR from CommonSpirit-affiliated tenants totals 14.9%, including the affiliate disclosed above.

The following table summarizes certain information about the Company’s top five geographic concentrations as of September 30, 2023:

State	Total ABR		Percent of ABR
Texas	$	49,405	13.4	%
Georgia	27,099		7.4	%
Florida	25,495		6.9	%
Indiana	23,529		6.4	%
Arizona	21,817		5.9	%
Other	220,761		60.0	%
Total	$	368,106	100.0	%

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Note 14. Earnings Per Share

The following table shows the amounts used in computing the Trust’s basic and diluted earnings per share (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator for earnings per share - basic:
Net income	$	12,891	$	66,280	$	36,645	$	98,155
Net income attributable to noncontrolling interests:
Operating Partnership	(505)		(3,252)		(1,443)		(4,830)
Partially owned properties	(51)		(70)		(121)		(384)
Numerator for earnings per share - basic	$	12,335	$	62,958	$	35,081	$	92,941
Numerator for earnings per share - diluted:
Numerator for earnings per share - basic	$	12,335	$	62,958	$	35,081	$	92,941
Noncontrolling interest - Operating Partnership income	505		3,252		1,443		4,830
Numerator for earnings per share - diluted	$	12,840	$	66,210	$	36,524	$	97,771
Denominator for earnings per share - basic and diluted:
Weighted average number of shares outstanding - basic	238,480,299		226,529,041		238,124,981		225,743,856
Effect of dilutive securities:
Noncontrolling interest - Operating Partnership units	9,814,296		11,791,685		9,831,470		11,872,328
Restricted common shares	123,801		100,790		127,715		105,170
Restricted share units	1,026,916		1,476,946		1,142,747		1,424,029
Denominator for earnings per share - diluted:	249,445,312		239,898,462		249,226,913		239,145,383
Earnings per share - basic	$	0.05	$	0.28	$	0.15	$	0.41
Earnings per share - diluted	$	0.05	$	0.28	$	0.15	$	0.41

Note 15. Subsequent Events

On October 29, 2023, the Trust and the Operating Partnership entered into an Agreement and Plan of Merger (the “Merger Agreement”) among the Trust, the Operating Partnership, Healthpeak Properties, Inc. (“Healthpeak”), Alpine Sub, LLC (“Alpine Sub”) and Alpine OP Sub, LLC (“Alpine OP Sub”). The Merger Agreement provides for (a) the merger of the Trust with and into Alpine Sub (the “Company Merger”), with Alpine Sub surviving as a wholly owned subsidiary of Healthpeak (the “Company Surviving Entity”), (b) immediately following the effectiveness of the Company Merger, the contribution by Healthpeak to Healthpeak OP, LLC (“Healthpeak OP”), of all of the outstanding equity interests in the Company Surviving Entity (the “Contribution”) and (c) immediately following the Contribution, the merger of the Operating Partnership with and into Alpine OP Sub (the “Partnership Merger”), with Alpine OP Sub surviving as a subsidiary of Healthpeak OP (the “Partnership Surviving Entity”). The consummation of the Mergers is subject to the satisfaction or waiver of certain closing conditions, including the approval of both the Trust’s and Healthpeak’s shareholders.

Pursuant to the terms and subject to the conditions of the Merger Agreement, at the date and time the Company Merger becomes effective (the “Company Merger Effective Time”), each common share of the Trust (other than common shares to be canceled in accordance with the Merger Agreement), will automatically be converted into the right to receive 0.674 (the “Exchange Ratio”) validly issued, fully paid and non-assessable shares of Healthpeak common stock, par value $1.00 per share (“Healthpeak Common Stock”) (the “Merger Consideration”), without interest, but subject to any withholding required under applicable tax laws. Holders of the Trust’s common shares will receive cash in lieu of fractional shares of Healthpeak Common Stock. Pursuant to the terms and subject to the conditions of the Merger Agreement, immediately after the Contribution and at the date and time the Partnership Merger becomes effective (the “Partnership Merger Effective Time”), each OP Unit issued and outstanding immediately prior to the Partnership Merger Effective Time, subject to the terms and conditions set forth in the Merger Agreement, will automatically be converted into and become a number of units in the Partnership Surviving Entity equal to the Exchange Ratio.

The Merger Agreement contains customary representations and warranties from each of Healthpeak and the Trust. The Trust has agreed to customary pre-closing covenants, including covenants to use commercially reasonable efforts to carry on its

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business in all material respects in the ordinary course, consistent with past practice, and to refrain from taking certain actions without Healthpeak’s consent. Healthpeak has agreed to customary pre-closing covenants, including a more limited set of covenants to refrain from taking certain actions without the Trust’s consent and to use commercially reasonable efforts to carry on its business in all material respects in the ordinary course, consistent with past practice. Each party has agreed to additional covenants, including, among others, covenants relating to (i) the Trust’s obligation to call a meeting of its shareholders to approve the Company Merger, (ii) Healthpeak’s obligation to call a meeting of its stockholders to approve the Healthpeak Common Stock Issuance (as defined in the Merger Agreement) and the Parent Charter Amendment (as defined in the Merger Agreement) and (iii) each party’s non-solicitation obligations related to alternative acquisition proposals. Healthpeak’s board of directors and the Trust’s Board of Trustees each have unanimously approved the Merger Agreement. The Mergers are expected to close during the first half of 2024.

In connection with the Merger Agreement, the Trust suspended the 2023 ATM Program.

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Item 2.                                 Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited consolidated financial statements, including the notes to those statements, included in Part I, Item 1 of this report, and the Section entitled “Cautionary Statement Regarding Forward-Looking Statements” in this report. As discussed in more detail in the Section entitled “Cautionary Statement Regarding Forward-Looking Statements,” this discussion contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause those differences include those discussed in Part I, Item 1 (Business) and Part I, Item 1A (Risk Factors) of our 2022 Annual Report and Part II, Item 1A of this report.

Third Quarter Highlights:

•Reported third quarter 2023 total revenue of $138.5 million, an increase of 5.3% over the prior year period.

•Reported net income of $12.9 million for the quarter ended September 30, 2023, a decrease of 80.6% over the prior year period, and third quarter net income per share of $0.05 on a fully diluted basis. Net income in the third quarter 2022 included a $53.9 million net gain on the sale of investment properties.

•Generated third quarter Normalized Funds From Operations (“Normalized FFO”) of $0.25 per share on a fully diluted basis.

•Completed $16.8 million in investments, including the funding of previous loan commitments.

•Third quarter Outpatient Medical Same-Store Cash Net Operating Income growth was 1.5% year-over-year.

•Declared a quarterly dividend of $0.23 per share and OP Unit for the third quarter 2023, paid on October 17, 2023.

Overview

We are a self-managed health care real estate company organized in April 2013 to acquire, selectively develop, own, and manage health care properties that are leased to physicians, hospitals, and health care delivery systems. We invest in real estate that is integral to providing high quality health care services. Our properties are typically located on a campus with a hospital or other health care facilities or strategically affiliated with a hospital or other health care facilities. We believe the impact of government programs and continuing trends in the health care industry create attractive opportunities for us to invest in health care related real estate. In particular, we believe the demand for health care will continue to increase as a result of the aging population as older persons generally utilize health care services at a rate well in excess of younger people. Our management team has significant public health care REIT experience and has long-established relationships with physicians, hospitals, and health care delivery system decision makers that we believe will provide quality investment and growth opportunities. Our principal investments include outpatient medical facilities, outpatient treatment facilities, as well as other real estate integral to health care providers. In recent years, we have seen increased competition for health care properties, and we expect this trend to continue. 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.

We grew our portfolio of gross real estate investments from approximately $124 million at the time of our IPO in July 2013 to approximately $5.9 billion as of September 30, 2023. As of September 30, 2023, our consolidated portfolio consisted of 278 health care properties located in 32 states with approximately 15,644,254 net leasable square feet, which were approximately 95% leased with a weighted average remaining lease term of approximately 5.3 years. As of September 30, 2023, approximately 91% of the net leasable square footage of our portfolio was either on the campus of a hospital or strategically affiliated with a health system.

We receive a cash rental stream from the health care providers under our leases. Approximately 93% of the annualized base rent payments from our properties as of September 30, 2023 were from absolute net and triple net leases, pursuant to which the tenants are responsible for operating expenses subject to specific lease terms 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 more predictable cash flow. Approximately 6% of the ABR payments from our properties as of September 30, 2023 were from modified gross leases which allow us to pass through certain increases in future operating expenses (e.g., property tax and insurance) to tenants for reimbursement, thus protecting us from increases in such operating expenses.

We seek to structure our triple-net 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 4.0%, with an annual weighted average rent escalator of approximately 2.4%. However, certain of the Company’s leases contain annual rent escalators indexed to changes in the Consumer Price Index (“CPI”), often with a floor or ceiling. As of September 30, 2023, approximately 5.8% of the Company’s annual rent escalators had CPI provisions. Our operating results depend significantly upon the ability of our

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tenants to make required rental payments. We believe that our portfolio of outpatient medical facilities and other health care 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 September 30, 2023, leases representing approximately 1.0%, 5.6%, and 6.9% of leased square feet will expire in 2023, 2024, and 2025, respectively.

Subject to the restrictions in the Merger Agreement, we intend to grow our portfolio of high-quality outpatient medical facilities leased to physicians, hospitals, health care delivery systems, and other health care providers primarily through acquisitions of existing health care facilities that provide stable revenue growth and predictable long-term cash flows. We may also selectively finance, subject to the restrictions in the Merger Agreement, the development or redevelopment of new health care facilities through joint venture or fee arrangements with health care real estate developers or health system development professionals. 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 health care providers and health care delivery systems that offer need-based health care services in sustainable health care markets. We focus our investment activity on outpatient medical facilities and ambulatory surgery centers.

We believe that trends such as shifting consumer preferences, limited space in hospitals, the desire of patients and health care providers to limit non-essential services provided in a hospital setting, and cost considerations, continue to drive the industry towards performing more procedures in outpatient facilities versus the hospital setting. As these trends continue, we believe that demand for outpatient medical facilities and similar health care properties away from hospital settings and in convenient locations to patients will continue to rise. We intend to exploit this trend and seek outpatient 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, skilled nursing facilities, specialty hospitals, behavioral health facilities, and treatment centers. Consistent with our qualification as a REIT, we may also opportunistically invest in companies that provide health care services, and in joint venture entities with operating partners, structured to comply with the REIT Investment Diversification Act of 2007.

The Trust is a Maryland real estate investment trust and elected to be taxed as a REIT for U.S. federal income tax purposes. We conduct our business through an UPREIT structure in which our properties are owned by our Operating Partnership directly or through limited partnerships, limited liability companies, or other subsidiaries. The Trust is the sole general partner of our Operating Partnership and, as of September 30, 2023, owned approximately 96.1% of the OP Units. As of October 27, 2023, there were 238,487,448 common shares outstanding.

Key Transactions in Third Quarter 2023

Investment Activity

During the third quarter ended September 30, 2023, the Company completed the acquisition of one outpatient medical facility and a parcel of land adjacent to one of our existing properties for an aggregate purchase price of $3.5 million. Additionally, the Company funded an aggregate $5.9 million under two earn-out agreements, previously announced loan commitments, and other investments, including an $1.3 million investment in IJRI Properties, LLC, which is an entity constructing and operating an outpatient medical facility in Indiana. The Company also funded construction in progress of $7.4 million, resulting in total investment activity of approximately $16.8 million as of September 30, 2023.

Recent Developments

Quarterly Distribution

On September 21, 2023, we announced that our Board of Trustees authorized and declared a cash distribution of $0.23 per common share for the quarterly period ended September 30, 2023. The dividend was paid on October 17, 2023, to common shareholders and OP Unit holders of record as of the close of business on October 3, 2023.

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Recent Events

On October 29, 2023, the Trust and the Operating Partnership entered into the Merger Agreement among the Trust, the Operating Partnership, Healthpeak, Alpine Sub and Alpine OP Sub. The Merger Agreement provides for (a) the Company Merger, (b) immediately following the effectiveness of the Company Merger, the Contribution and (c) immediately following the Contribution, the Partnership Merger. The consummation of the Mergers is subject to the satisfaction or waiver of certain closing conditions, including the approval of both the Trust’s and Healthpeak’s shareholders.

Pursuant to the terms and subject to the conditions of the Merger Agreement, at the Company Merger Effective Time, each common share of the Trust (other than common shares to be canceled in accordance with the Merger Agreement), will automatically be converted into the right to receive the Merger Consideration, without interest, but subject to any withholding required under applicable tax laws. Holders of the Trust’s common shares will receive cash in lieu of fractional shares of Healthpeak Common Stock. Pursuant to the terms and subject to the conditions of the Merger Agreement, at the Partnership Merger Effective Time, each OP Unit issued and outstanding immediately prior to the Partnership Merger Effective Time, subject to the terms and conditions set forth in the Merger Agreement, will automatically be converted into and become a number of units in the Partnership Surviving Entity equal to the Exchange Ratio.

The Merger Agreement contains customary representations and warranties from each of Healthpeak and the Trust. The Trust has agreed to customary pre-closing covenants, including covenants to use commercially reasonable efforts to carry on its business in all material respects in the ordinary course, consistent with past practice, and to refrain from taking certain actions without Healthpeak’s consent. Healthpeak has agreed to customary pre-closing covenants, including a more limited set of covenants to refrain from taking certain actions without the Trust’s consent and to use commercially reasonable efforts to carry on its business in all material respects in the ordinary course, consistent with past practice. Each party has agreed to additional covenants, including, among others, covenants relating to (i) the Trust’s obligation to call a meeting of its shareholders to approve the Company Merger, (ii) Healthpeak’s obligation to call a meeting of its stockholders to approve the Healthpeak Common Stock Issuance and the Parent Charter Amendment and (iii) each party’s non-solicitation obligations related to alternative acquisition proposals. Healthpeak’s board of directors and the Trust’s Board of Trustees each have unanimously approved the Merger Agreement. The Mergers are expected to close during the first half of 2024.

In connection with the Merger Agreement, the Trust suspended the 2023 ATM Program.

Results of Operations

Three months ended September 30, 2023 compared to the three months ended September 30, 2022.

The following table summarizes our results of operations for the three months ended September 30, 2023 and 2022 (in thousands):

	2023		2022		Change		%
Revenues:
Rental and related revenues	$	134,520	$	128,636	$	5,884	4.6	%
Interest income on real estate loans and other	4,027		2,877		1,150		40.0	%
Total revenues	138,547		131,513		7,034		5.3	%
Expenses:
Interest expense	20,050		18,299		1,751		9.6	%
General and administrative	9,771		10,079		(308)		(3.1)	%
Operating expenses	47,625		43,647		3,978		9.1	%
Depreciation and amortization	47,932		47,040		892		1.9	%
Total expenses	125,378		119,065		6,313		5.3	%
Income before equity in loss of unconsolidated entities and gain on sale of investment properties, net:	13,169		12,448		721		5.8	%
Equity in loss of unconsolidated entities	(278)		(62)		(216)		348.4	%
Gain on sale of investment properties, net	—		53,894		(53,894)		NM
Net income	$	12,891	$	66,280	$	(53,389)	(80.6)	%

NM = Not Meaningful

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Revenues

Total revenues increased $7.0 million, or 5.3%, for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. An analysis of selected revenues follows.

Rental and related revenues. Rental and related revenues increased $5.9 million, or 4.6%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Rental and related revenues were comprised of the following based upon contractual billing terms (in thousands):

	2023		2022		Change		%
Rental revenues	$	94,744	$	92,073	$	2,671	2.9	%
Expense recoveries	39,776		36,563		3,213		8.8	%
Rental and related revenues	$	134,520	$	128,636	$	5,884	4.6	%

Rental revenues increased $2.7 million, or 2.9%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Rental revenues increased $1.9 million from properties acquired in 2023 and 2022, and $1.0 million from our existing portfolio. This increase was partially offset by a decrease of $0.3 million related to properties sold in 2023 and 2022.

Expense recoveries increased $3.2 million, or 8.8%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Expense recoveries increased $2.4 million due to higher reimbursable operating expenses on our existing portfolio and $0.8 million from properties acquired in 2023 and 2022.

Interest income on real estate loans and other. Interest income on real estate loans and other increased $1.2 million, or 40.0%, for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. Interest income on real estate loans and other increased by $2.3 million due to interest earned on the remaining proceeds of $214.0 million from our $400.0 million term loan which was entered into in the second quarter of 2023. This increase was partially offset by a decrease of $0.9 million related to lower average real estate loan balances in 2023 compared to 2022, and $0.2 million of non-cash changes in the fair value of an interest rate swap.

Expenses

Total expenses increased $6.3 million, or 5.3%, for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. An analysis of selected expenses follows.

Interest expense. Interest expense increased $1.8 million, or 9.6%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Interest expense increased $6.5 million from the $400.0 million term loan executed on May 24, 2023, and $0.6 million from increasing interest rates on our variable mortgage debt. This growth was partially offset by a $1.8 million reduction due to the derecognition of an interest rate swap, $1.7 million of proceeds from the Company’s outstanding interest rate swaps, and a decrease of $1.7 million due to lower debt balances on our credit facility.

General and administrative. General and administrative expenses decreased $0.3 million, or 3.1%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. The decrease was primarily due to lower travel costs of $0.3 million.

Operating expenses. Operating expenses increased $4.0 million, or 9.1%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Operating expenses on the existing portfolio increased by $3.1 million, or 7.1% quarter over quarter, mainly due to higher maintenance costs of $1.7 million and real estate taxes of $1.2 million. Operating expenses from properties acquired in 2023 and 2022 increased by $1.0 million.

Depreciation and amortization. Depreciation and amortization increased $0.9 million, or 1.9%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Depreciation and amortization increased $0.9 million for properties purchased in 2023 and 2022.

Equity in loss of unconsolidated entities. Equity in loss of unconsolidated entities increased $0.2 million, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 due to a decrease in revenue related to property dispositions within our unconsolidated joint venture portfolio and an increase in operating expenses.

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Gain on sale of investment properties, net. During the three months ended September 30, 2022, we sold three related facilities, which included two outpatient medical facilities and one hospital in Great Falls, Montana, representing 185,085 square feet for approximately $116.3 million, realizing an aggregate net gain of approximately $53.9 million.

Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

The following table summarizes our results of operations for the nine months ended September 30, 2023 and 2022 (in thousands):

	2023		2022		Change		%
Revenues:
Rental and related revenues	$	397,096	$	385,755	$	11,341	2.9	%
Interest income on real estate loans and other	10,895		8,315		2,580		31.0	%
Total revenues	407,991		394,070		13,921		3.5	%
Expenses:
Interest expense	59,837		52,356		7,481		14.3	%
General and administrative	31,133		30,400		733		2.4	%
Operating expenses	138,094		128,080		10,014		7.8	%
Depreciation and amortization	143,555		142,002		1,553		1.1	%
Total expenses	372,619		352,838		19,781		5.6	%
Income before equity in gain (loss) of unconsolidated entities and gain on sale of investment properties, net:	35,372		41,232		(5,860)		(14.2)	%
Equity in gain (loss) of unconsolidated entities	1,260		(452)		1,712		378.8	%
Gain on sale of investment properties, net	13		57,375		(57,362)		NM
Net income	$	36,645	$	98,155	$	(61,510)	(62.7)	%

Revenues

Total revenues increased $13.9 million, or 3.5%, for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. An analysis of selected revenues follows.

Rental and related revenues. Rental and related revenues increased $11.3 million, or 2.9%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Rental and related revenues were comprised of the following based on contractual billing terms (in thousands):

	2023		2022		Change		%
Rental revenues	$	281,901	$	278,230	$	3,671	1.3	%
Expense recoveries	115,195		107,525		7,670		7.1	%
Rental and related revenues	$	397,096	$	385,755	$	11,341	2.9	%

Rental revenues increased $3.7 million, or 1.3%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Rental revenues increased $5.2 million from properties acquired in 2023 and 2022, and $1.8 million from our existing portfolio. This increase was partially offset by a decrease of $3.2 million related to properties sold in 2022.

Expense recoveries increased $7.7 million, or 7.1%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Expense recoveries increased $5.4 million due to an increase in reimbursable operating expenses from our existing portfolio, and $2.4 million from properties acquired in 2023 and 2022.

Interest income on real estate loans and other. Interest income on real estate loans and other increased $2.6 million, or 31.0%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Interest income on real estate loans and other increased by $3.3 million due to interest earned on the remaining proceeds of $214.0 million from our new $400.0 million term loan. This was offset by a decrease $0.6 million due to lower average real estate loan balances in 2023 compared to 2022.

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Expenses

Total expenses increased by $19.8 million, or 5.6%, for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. An analysis of selected expenses follows.

Interest expense. Interest expense increased $7.5 million, or 14.3%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Interest expense increased $9.1 million from the $400.0 million term loan executed on May 24, 2023, and $3.2 million from increasing interest rates on our variable mortgage debt. These increases were partially offset by favorable effects of our interest rate swaps, including $1.8 million due to the de-designation of an interest rate swap.

General and administrative. General and administrative expenses increased $0.7 million, or 2.4%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The increase was primarily attributable to increased professional fees of $0.8 million.

Operating expenses. Operating expenses increased $10.0 million, or 7.8%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Operating expenses on the existing portfolio increased by $7.5 million, or 5.9% year over year, mainly due to additional building maintenance costs of $4.3 million, property administration costs of $1.3 million, insurance expense of $1.1 million, and utility charges of $0.6 million. Net operating expenses from properties acquired in 2023 and 2022 also increased by $2.6 million.

Depreciation and amortization. Depreciation and amortization increased $1.6 million, or 1.1%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Depreciation and amortization increased $3.3 million for properties purchased in 2023 and 2022. These increases were partially offset by $1.0 million from properties sold during 2023 and 2022, and $0.6 million from our existing portfolio primarily due to fully amortized lease intangibles.

Equity in gain (loss) of unconsolidated entities. The $1.7 million change in equity in gain (loss) of unconsolidated entities for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 is primarily due to a $1.8 million gain on our share of the sale of two assets held within our unconsolidated joint venture portfolio.

Gain on sale of investment properties, net. During the nine months ended September 30, 2023, we sold one property in Pennsylvania containing 30,000 square feet for approximately $2.6 million, realizing an insignificant gain. During the nine months ended September 30, 2022, we sold five properties with 212,295 net leasable square feet in three states for approximately $124.7 million, recognizing a net gain of $57.4 million.

Cash Flows

Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 (in thousands).

	2023		2022
Cash provided by operating activities	$	205,912	$	202,353
Cash used in investing activities	(64,723)		(41,680)
Cash provided by (used in) financing activities	46,853		(168,037)
Increase (decrease) in cash and cash equivalents	$	188,042	$	(7,364)

Cash flows from operating activities. Cash flows provided by operating activities were $205.9 million during the nine months ended September 30, 2023 compared to $202.4 million during the nine months ended September 30, 2022, representing an increase of $3.6 million. The increase in cash provided by operating activities is primarily due to the timing of payment on our tenant receivables and accrued expenses and other liabilities.

Cash flows from investing activities. Cash flows used in investing activities was $64.7 million during the nine months ended September 30, 2023 compared to $41.7 million during the nine months ended September 30, 2022, representing an increase of $23.0 million. The change in cash used in investing activities was primarily due to the decrease in proceeds from the sale of investment properties of $120.6 million and an increase of net cash spent on the development of real estate and capital expenditures of $14.0 million. This was partially offset by less cash spent on the acquisition of investments of $81.6 million, additional returns on our investment in unconsolidated entities of $3.7 million, and net real estate loan payoffs which provided an increase in cash of $26.0 million.

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Cash flows from financing activities. Cash flows provided by financing activities was $46.9 million during the nine months ended September 30, 2023 compared to cash flows used in financing activities of $168.0 million during the nine months ended September 30, 2022, representing a change of $214.9 million. The change in cash provided by financing activities was primarily due to an increase in proceeds from credit facility borrowings of $274.0 million, an increase in the sale of common shares pursuant to the ATM Program of $34.5 million, an increase in contributions from noncontrolling interests of $7.6 million, a decrease of distributions to noncontrolling interests of $1.4 million, and a decrease in the purchase of OP Units of $2.3 million. These sources of cash were partially offset by an increase in paydowns under the credit facility of $55.0 million, the repayment of senior unsecured notes and mortgage debt of $36.0 million, an increase of dividends paid to shareholders of $8.6 million, an increase in debt issuance costs of $3.8 million, and an increase of $1.6 million for payments of employee taxes withheld for stock-based compensation.

Non-GAAP Financial Measures

This report includes Funds From Operations (“FFO”), Normalized FFO, Normalized Funds Available For Distribution (“FAD”), Net Operating Income (“NOI”), Cash NOI, Outpatient Medical Same-Store Cash NOI, Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) and Adjusted EBITDAre, which are non-GAAP financial measures. For purposes of Item 10(e) of Regulation S-K promulgated under the Securities Act, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable financial measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows (or equivalent statements) of the company, or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable financial measure so calculated and presented. As used in this report, GAAP refers to generally accepted accounting principles in the United States of America. Pursuant to the requirements of Item 10(e) of Regulation S-K promulgated under the Securities Act of 1933, as amended (the Securities Act”), we have provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

FFO and Normalized FFO

We believe that information regarding FFO is helpful to shareholders and potential investors because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes ratably over time. We calculate FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”). Nareit defines FFO as net income or loss (computed in accordance with GAAP) before noncontrolling interests of holders of OP units, excluding preferred distributions, gains (or losses) on sales of depreciable operating property, impairment write-downs on depreciable assets, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs). Our FFO computation includes our share of required adjustments from our unconsolidated joint ventures and may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the Nareit definition or that interpret the Nareit definition differently than we do. The GAAP measure that we believe to be most directly comparable to FFO, net income, includes depreciation and amortization expenses, gains or losses on property sales, impairments, and noncontrolling interests. In computing FFO, we eliminate these items because, in our view, they are not indicative of the results from the operations of our properties. To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in our financial statements. FFO does not represent cash generated from operating activities in accordance with GAAP, should not be considered to be an alternative to net income or loss (determined in accordance with GAAP) as a measure of our liquidity and is not indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.

We use Normalized FFO, which excludes from FFO net change in fair value of derivative financial instruments, acceleration of deferred financing costs, net change in fair value of contingent consideration, gain on extinguishment of debt, and other normalizing items. Our Normalized FFO computation includes our share of required adjustments from our unconsolidated joint ventures and our use of the term Normalized FFO may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount. Normalized FFO should not be considered as an alternative to net income or loss (computed in accordance with GAAP), as an indicator of our financial performance or of cash flow from operating activities (computed in accordance with GAAP), or as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions. Normalized FFO should be reviewed in connection with other GAAP measurements.

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The following is a reconciliation from net income, the most direct financial measure calculated and presented in accordance with GAAP, to FFO and Normalized FFO (in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	12,891	$	66,280	$	36,645	$	98,155
Earnings per share - diluted	$	0.05	$	0.28	$	0.15	$	0.41
Net income	$	12,891	$	66,280	$	36,645	$	98,155
Net income attributable to noncontrolling interests - partially owned properties	(51)		(70)		(121)		(384)
Depreciation and amortization expense	47,843		46,939		143,237		141,677
Depreciation and amortization expense - partially owned properties	(132)		(101)		(410)		(241)
Gain on sale of investment properties, net	—		(53,894)		(13)		(57,375)
Proportionate share of unconsolidated joint venture adjustments	2,271		2,298		4,999		7,031
FFO applicable to common shares	$	62,822	$	61,452	$	184,337	$	188,863
Net change in fair value of derivative	185		—		185		—
Gain on extinguishment of debt	(1,763)		—		(1,763)		—
Proportionate share of unconsolidated joint venture adjustments	—		(82)		—		(360)
Normalized FFO applicable to common shares	$	61,244	$	61,370	$	182,759	$	188,503
FFO per common share - diluted	$	0.25	$	0.26	$	0.74	$	0.79
Normalized FFO per common share - diluted	$	0.25	$	0.26	$	0.73	$	0.79
Weighted average common shares outstanding - diluted	249,445,312		239,898,462		249,226,913		239,145,383

Normalized FAD

We define Normalized FAD, a non-GAAP measure, which excludes from Normalized FFO non-cash share compensation expense, straight-line rent adjustments, amortization of acquired above-market or below-market leases and assumed debt, amortization of lease inducements, amortization of deferred financing costs, and loan reserve adjustments, including our share of all required adjustments from unconsolidated joint ventures. We also adjust for recurring capital expenditures related to building, site, and tenant improvements, leasing commissions, cash payments from seller master leases, and rent abatement payments, including our share of all required adjustments for unconsolidated joint ventures. Other REITs or real estate companies may use different methodologies for calculating Normalized FAD, and accordingly, our computation may not be comparable to those reported by other REITs. Although our computation of Normalized FAD may not be comparable to that of other REITs, we believe Normalized FAD provides a meaningful supplemental measure of our performance due to its frequency of use by analysts, investors, and other interested parties in the evaluation of our performance as a REIT. Normalized FAD should not be considered as an alternative to net income or loss attributable to controlling interest (computed in accordance with GAAP) or as an indicator of our financial performance. Normalized FAD should be reviewed in connection with other GAAP measurements.

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The following is a reconciliation from net income, the most direct financial measure calculated and presented in accordance with GAAP, to Normalized FAD (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	12,891	$	66,280	$	36,645	$	98,155
Normalized FFO applicable to common shares	$	61,244	$	61,370	$	182,759	$	188,503
Normalized FFO applicable to common shares	$	61,244	$	61,370	$	182,759	$	188,503
Non-cash share compensation expense	3,968		4,349		12,290		12,400
Straight-line rent adjustments	(820)		(1,478)		(2,756)		(5,359)
Amortization of acquired above/below-market leases/assumed debt	1,084		1,133		3,338		3,773
Amortization of lease inducements	246		225		717		675
Amortization of deferred financing costs	763		581		2,028		1,739
Recurring capital expenditures and lease commissions	(5,745)		(4,129)		(17,321)		(16,660)
Loan reserve adjustments	265		152		275		159
Proportionate share of unconsolidated joint venture adjustments	(939)		(403)		(1,384)		(900)
Normalized FAD applicable to common shares	$	60,066	$	61,800	$	179,946	$	184,330

NOI, Cash NOI, and Outpatient Medical Same-Store Cash NOI

NOI is a non-GAAP financial measure that is defined as net income or loss, computed in accordance with GAAP, generated from our total portfolio of properties and other investments before general and administrative expenses, depreciation and amortization expense, interest expense, corporate high yield interest income, swap income, net change in the fair value of derivative financial instruments, gain or loss on the sale of investment properties, and impairment losses, including our share of all required adjustments from our unconsolidated joint ventures. We believe that NOI provides an accurate measure of operating performance of our operating assets because NOI excludes certain items that are not associated with management of the properties. Our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.

Cash NOI is a non-GAAP financial measure which excludes from NOI straight-line rent adjustments, amortization of acquired above and below market leases, and other non-cash and normalizing items, including our share of all required adjustments from unconsolidated joint ventures. Other non-cash and normalizing items include items such as the amortization of lease inducements, loan reserve adjustments, payments received from seller master leases and rent abatements, and changes in fair value of contingent consideration. We believe that Cash NOI provides an accurate measure of the operating performance of our operating assets because it excludes certain items that are not associated with management of the properties. Additionally, we believe that Cash NOI is a widely accepted measure of comparative operating performance in the real estate community. Our use of the term Cash NOI may not be comparable to that of other real estate companies as such other companies may have different methodologies for computing this amount.

Outpatient Medical Same-Store Cash NOI is a non-GAAP financial measure which excludes from Cash NOI assets not held for the entire preceding five quarters, non-outpatient medical facility assets, and other normalizing items not specifically related to the same-store property portfolio. Management considers Outpatient Medical Same-Store Cash NOI a supplemental measure because it allows investors, analysts, and Company management to measure unlevered property-level operating results. Our use of the term Outpatient Medical Same-Store Cash NOI may not be comparable to that of other real estate companies, as such other companies may have different methodologies for computing this amount.

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The following is a reconciliation from the Trust’s net income, the most direct financial measure calculated and presented in accordance with GAAP, to NOI, Cash NOI, and Outpatient Medical Same-Store Cash NOI (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	12,891	$	66,280	$	36,645	$	98,155
General and administrative	9,771		10,079		31,133		30,400
Depreciation and amortization expense	47,932		47,040		143,555		142,002
Interest expense	20,050		18,299		59,837		52,356
Corporate high yield interest income	(2,307)		—		(3,284)		—
Swap income	(244)		—		(244)		—
Net change in the fair value of derivative	185		—		185		—
Gain on sale of investment properties, net	—		(53,894)		(13)		(57,375)
Proportionate share of unconsolidated joint venture adjustments	3,542		3,463		8,944		10,289
NOI	$	91,820	$	91,267	$	276,758	$	275,827
NOI	$	91,820	$	91,267	$	276,758	$	275,827
Straight-line rent adjustments	(820)		(1,478)		(2,756)		(5,359)
Amortization of acquired above/below-market leases	1,084		1,133		3,338		3,783
Amortization of lease inducements	246		225		717		675
Loan reserve adjustments	265		152		275		159
Proportionate share of unconsolidated joint venture adjustments	(101)		(176)		(293)		(346)
Cash NOI	$	92,494	$	91,123	$	278,039	$	274,739
Cash NOI	$	92,494	$	91,123
Assets not held for all periods	(1,516)		(478)
Non-outpatient medical facilities	(2,816)		(2,775)
Lease termination fees	—		13
Interest income on real estate loans	(1,572)		(2,517)
Joint venture and other income	(3,581)		(3,618)
Outpatient Medical Same-Store Cash NOI	$	83,009	$	81,748

EBITDAre and Adjusted EBITDAre

We calculate EBITDAre in accordance with standards established by Nareit and define EBITDAre as net income or loss computed in accordance with GAAP plus depreciation and amortization, interest expense, corporate high yield interest income, swap income, gain or loss on the sale of investment properties, and impairment loss, including our share of all required adjustments from unconsolidated joint ventures. We define Adjusted EBITDAre, which excludes from EBITDAre non-cash share compensation expense, non-cash changes in fair value, pursuit costs, non-cash intangible amortization, corporate high yield interest income, the pro forma impact of investment activity, and other normalizing items. We consider EBITDAre and Adjusted EBITDAre important measures because they provide additional information to allow management, investors, and our current and potential creditors to evaluate and compare our core operating results and our ability to service debt.

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The following is a reconciliation from the Trust’s net income, the most direct financial measure calculated and presented in accordance with GAAP, to EBITDAre and Adjusted EBITDAre (in thousands):

	Three Months Ended September 30,
	2023		2022
Net income	$	12,891	$	66,280
Depreciation and amortization expense	47,932		47,040
Interest expense	20,050		18,299
Corporate high yield interest income	(2,307)		—
Swap income	(244)		—
Gain on sale of investment properties, net	—		(53,894)
Proportionate share of unconsolidated joint venture adjustments	3,526		3,545
EBITDAre	$	81,848	$	81,270
Non-cash share compensation expense	3,968		4,349
Non-cash changes in fair value	185		—
Pursuit costs	241		149
Non-cash intangible amortization	1,330		1,358
Proportionate share of unconsolidated joint venture adjustments	—		(82)
Pro forma adjustments for investment activity	45		871
Adjusted EBITDAre	$	87,617	$	87,915

Liquidity and Capital Resources

Our short-term liquidity requirements consist primarily of operating and interest expenses and other expenditures directly associated with our properties, including:

•property expenses;

•interest expense and scheduled principal payments on outstanding indebtedness;

•general and administrative expenses; and

•capital expenditures for tenant improvements and leasing commissions.

In addition, we will require funds for future distributions expected to be paid to our common shareholders and OP Unit holders in our Operating Partnership.

As of September 30, 2023, we had a total of $195.8 million of cash and cash equivalents and $1.0 billion of near-term availability on our unsecured revolving credit facility. Our primary sources of cash include rent we collect from our tenants, borrowings under our unsecured credit facility, and financing of debt and equity securities. We believe that our existing cash and cash equivalents, cash flow from operating activities, and borrowings available under our unsecured revolving credit facility will be adequate to fund any existing contractual obligations to purchase properties and other obligations through the next year. However, because of the 90% distribution requirement under the REIT tax rules under the Internal Revenue Code, we may not be able to fund all of our future capital needs from cash retained from operations, including capital needed to make investments and to satisfy or refinance maturing obligations. As a result, we expect to rely upon external sources of capital, including debt and equity financing, to fund future capital needs. If we are unable to obtain needed capital on satisfactory terms or at all, we may not be able to make the investments needed to expand our business or to meet our obligations and commitments as they mature. We will rely upon external sources of capital to fund future capital needs, and, if we encounter difficulty in obtaining such capital, we may not be able to make future acquisitions necessary to grow our business or meet maturing obligations.

Our long-term liquidity needs consist primarily of funds necessary to pay for acquisitions, recurring and non-recurring capital expenditures, and scheduled debt maturities. We expect to satisfy our long-term liquidity needs through cash flow from operations, unsecured borrowings, issuances of equity and debt securities, proceeds from select property dispositions and joint venture transactions, and, in connection with acquisitions of additional properties, the issuance of OP Units of our Operating Partnership.

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Our ability to access capital in a timely and cost-effective manner is essential to the success of our business strategy as it affects our ability to satisfy existing obligations, including repayment of maturing indebtedness, and to make future investments and acquisitions. Factors such as general market conditions, interest rates, credit ratings on our debt and equity securities, expectations of our potential future earnings and cash distributions, and the market price of our common shares, each of which are beyond our control and vary or fluctuate over time, all impact our access to and cost of capital. In particular, to the extent interest rates continue to rise, we may continue to experience a decline in the trading price of our common shares, which may impact our decision to conduct equity offerings for capital raising purposes. We have experienced and will likely continue to experience higher borrowing costs as interest rates rise, which may also impact our decisions to incur additional indebtedness, or to engage in transactions that we may need to fund through borrowing. We expect to continue to utilize equity and debt financing to support our future growth and investment activity.

We also continuously evaluate opportunities to finance future investments. New investments are generally funded from temporary borrowings under our primary unsecured credit facility and the proceeds from financing transactions such as those discussed above. Our investments generate cash from net operating income and principal payments on loans receivable. Permanent financing for future investments, which generally replaces funds drawn under our primary unsecured credit facility, has historically been provided through a combination of the issuance of debt and equity securities and the incurrence or assumption of secured debt.

We intend to invest in additional properties as suitable opportunities arise and adequate sources of financing are available. We are currently evaluating additional potential investments consistent with the normal course of our business. There can be no assurance as to whether or when any portion of these investments will be completed. Our ability to complete investments is subject to a number of risks and variables, including our ability to negotiate mutually agreeable terms with sellers and our ability to finance the investment. We may not be successful in identifying and consummating suitable acquisitions or investment opportunities, which may impede our growth and negatively affect our results of operations and may result in the use of a significant amount of management’s resources. We expect that future investments in properties will depend on and will be financed by, in whole or in part, our existing cash, borrowings, including under our unsecured revolving credit facility, or the proceeds from additional issuances of equity or debt securities.

We currently do not expect to sell any of our properties to meet our liquidity needs, although we may do so in the future. 

We currently are in compliance with all debt covenants on our outstanding indebtedness.

The foregoing discussion regarding the Company’s liquidity and capital resources is subject to applicable restrictions in the Merger Agreement.

Credit Facility

On September 24, 2021, the Operating Partnership, as borrower, and the Trust, as guarantor, executed the Credit Agreement which extended the maturity date of the revolving credit facility under the Credit Agreement to September 24, 2025 and reduced the interest rate margin applicable to borrowings. The Credit Agreement includes an unsecured revolving credit facility of $1.0 billion and contains a term loan feature of $250.0 million, which the Company borrowed on, bringing total borrowing capacity to $1.25 billion. The Credit Agreement also includes a swingline loan commitment for up to 10% of the maximum principal amount and provides an accordion feature allowing the Trust to increase borrowing capacity by up to an additional $500 million, subject to customary terms and conditions, resulting in a maximum borrowing capacity of $1.75 billion. On October 13, 2021, the Company paid off the $250.0 million term loan feature of the Credit Agreement and the term loan feature is no longer available to the Company. The revolving credit facility under the Credit Agreement also includes two six-month extension options.

On March 31, 2023, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a First Amendment to the Credit Agreement which expanded the accordion feature allowing the Operating Partnership to increase borrowing capacity by up to an additional $500.0 million, resulting in a maximum borrowing capacity of $2.25 billion, and replaced the LIBOR-based benchmark rates applicable to borrowings under the Amended Credit Agreement with SOFR based benchmark rates.

On May 24, 2023, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a Second Amendment to the Credit Agreement, which added a new $400.0 million unsecured term loan with a scheduled maturity date of May 24, 2028, expanded the accordion feature, and allows the Operating Partnership to increase borrowing capacity under the Credit Agreement by up to an additional $500.0 million, subject to customary terms and conditions, for a maximum aggregate

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principal amount of all revolving commitments and term loans under the Credit Agreement of $1.9 billion. On the same day, the Operating Partnership borrowed $400.0 million under the five-year term loan feature of the Credit Agreement. Borrowings under the term loan feature of the Credit Agreement bear interest on the outstanding principal amount at a rate which is determined by the Trust’s credit rating, currently equal to 1.10%, inclusive of a 0.10% SOFR index adjustment, plus Daily Simple SOFR. The Company simultaneously entered into fixed-for-floating interest rate swaps for the full borrowing amount under the term loan, fixing the Daily Simple SOFR (as defined in the Credit Agreement) component of the borrowing rate to 3.593%, for an all-in fixed rate of 4.693%. Both the borrowing and the fixed-for-floating rate swaps have a maturity date of May 24, 2028. A portion of the proceeds from the term loan were used to repay all amounts outstanding on the unsecured revolving credit facility.

As of September 30, 2023, the Company did not have any borrowings outstanding under its $1.0 billion unsecured revolving credit facility or the $500.0 million accordion feature, as defined by the Credit Agreement. Of the aggregate $1.9 billion available under the Credit Agreement, the Company had $400.0 million of borrowings outstanding under the term loan feature as of September 30, 2023. See Note 6 (Debt) to our accompanying consolidated financial statements for a further discussion of our credit facility.

Senior Notes

As of September 30, 2023, we had $1.5 billion aggregate principal amount of senior notes issued and outstanding by the Operating Partnership, comprised of $25.0 million maturing in 2025, $70.0 million maturing in 2026, $425.0 million maturing in 2027, $395.0 million maturing in 2028, and $545.0 million maturing in 2031. See Note 6 (Debt) to our accompanying consolidated financial statements for a further discussion of our senior notes.

ATM Program

In May 2021, the Company entered into the 2021 Sales Agreement, pursuant to which the Trust may issue and sell, from time to time, its common shares having an aggregate offering price of up to $500 million. In accordance with the 2021 Sales Agreement, the Trust may offer and sell its common shares through the 2021 Agents, from time to time, by any method deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act, which includes sales made directly on the New York Stock Exchange or other existing trading market, or sales made to or through a market maker.

In August 2023, the Company entered into the 2023 Sales Agreement, pursuant to which the Trust may issue and sell, from time to time, its common shares having an aggregate offering price of up to $600 million. In accordance with the 2023 Sales Agreement, the Trust may offer and sell its common shares through the 2023 Agents, from time to time, by any method deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended, which includes sales made directly on the New York Stock Exchange or other existing trading market, or sales made to or through a market maker. Upon entry into the 2023 Sales Agreement, the Company terminated the 2021 ATM Program. As of September 30, 2023, the Trust has $600.0 million remaining available under the 2023 ATM Program. Subsequent to September 30, 2023, in connection with the Merger Agreement, the Trust suspended the 2023 ATM Program.

Dividend Reinvestment and Share Purchase Plan

In December 2014, the Company adopted a Dividend Reinvestment and Share Purchase Plan (“DRIP”). Under the DRIP:

•existing shareholders may purchase additional common shares by reinvesting all or a portion of the dividends paid on their common shares and by making optional cash payments of not less than $50 and up to a maximum of $10,000 per month;

•new investors may join the DRIP by making an initial investment of not less than $1,000 and up to a maximum of $10,000; and

•once enrolled in the DRIP, participants may authorize electronic deductions from their bank account for optional cash payments to purchase additional shares.

The DRIP is administered by our transfer agent, Computershare Trust Company, N.A. Our common shares sold under the DRIP are newly issued or purchased in the open market, as further described in the DRIP. As of September 30, 2023, the Company had issued 231,183 common shares under the DRIP since its inception.

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Critical Accounting Policies

Our consolidated financial statements included in Part I, Item 1 of this report are prepared in conformity with GAAP for interim financial information set forth in the ASC, as published by the FASB, which require us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements. We periodically reevaluate our estimates and assumptions, and in the event they prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Please refer to our 2022 Annual Report for further information regarding the critical accounting policies that affect our more significant estimates and judgments used in the preparation of our consolidated financial statements included in Part I, Item 1 of this report.

REIT Qualification Requirements

We are subject to a number of operational and organizational requirements necessary to qualify and maintain our qualification as a REIT. If we fail to qualify as a REIT or fail to remain qualified as a REIT in any taxable year, our income would be subject to federal income tax at regular corporate rates and potentially increased state and local taxes and we could incur substantial tax liabilities which could have an adverse impact upon our results of operations, liquidity, and distributions to our shareholders.

Off-Balance Sheet Arrangements

As of September 30, 2023, we have investments in two unconsolidated joint ventures with ownership interests of 46.5% and 12.3%, respectively. The aggregate carrying amount of debt, including both our and our partners’ share, incurred by these ventures was approximately $766.2 million (of which our proportionate share is approximately $141.5 million). See Note 2 (Summary of Significant Accounting Policies) of Part II, Item 8 (Financial Statements and Supplementary Data) of our 2022 Annual Report for the fiscal year ended December 31, 2022 for additional information. We have no other off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.

Item 3.                                 Quantitative and Qualitative Disclosures about Market Risk

Our future income, cash flows, and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We use certain derivative financial instruments to manage, or hedge, interest rate risks related to our borrowings. We do not use derivatives for trading or speculative purposes and only enter into contracts with major financial institutions based upon their credit rating and other factors. Our derivative instruments consist of four interest rate swaps of which three are designated as cash flow hedges of interest rate risk. See Note 7 (Derivatives) and Note 2 (Summary of Significant Accounting Policies) in Part I, Item 1 of this report for further detail on our interest rate swaps.

Interest rate risk amounts are our management’s estimates and were determined by considering the effect of hypothetical interest rates on our consolidated financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur in that environment. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.

Fixed Interest Rate Debt

As of September 30, 2023, our consolidated fixed interest rate debt totaled $1.5 billion, which represented 74.6% of our total consolidated debt, excluding the impact of interest rate swaps. We entered into fixed-for-floating interest rate swaps for the full borrowing amount of our $400.0 million term loan, fixing the Daily Simple SOFR (as defined in the Credit Agreement) component of the borrowing rate to 3.593%, for an all-in fixed rate as of September 30, 2023 of 4.693%. Both the borrowing and the fixed-for-floating rate swaps have a maturity date of May 24, 2028.

Assuming the effects of our interest rate swap agreements, our fixed interest rate debt would represent 94.7% of our total consolidated debt. Interest rate fluctuations on our fixed interest rate debt will generally not affect our future earnings or

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cash flows unless such instruments mature or are otherwise terminated. However, interest rate changes could affect the fair value of our fixed interest rate debt.

As of September 30, 2023, the fair value and the carrying value of our consolidated fixed interest rate debt were approximately $1.3 billion and $1.5 billion, respectively. The fair value estimate of our fixed interest rate debt was estimated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loans were originated on September 30, 2023. As we expect to hold our fixed interest rate debt instruments to maturity, based on the underlying structure of the debt instrument, and the amounts due under such instruments are limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that market fluctuations in interest rates, and the resulting change in fair value of our fixed interest rate debt instruments, would have a significant impact on our operating cash flows.

Variable Interest Rate Debt

As of September 30, 2023, our consolidated variable interest rate debt totaled $504.8 million, which represented 25.4% of our total consolidated debt. Assuming the effects of our interest rate swap agreements, our variable interest rate debt would represent 5.3% of our total consolidated debt. Interest rate changes on our variable rate debt could impact our future earnings and cash flows but would not significantly affect the fair value of such debt. As of September 30, 2023, we were exposed to market risks related to fluctuations in interest rates on $104.8 million of consolidated borrowings. Assuming no increase in the amount of our variable rate debt, if PRIME and SOFR were to change by 100 basis points, total interest expense on our variable rate debt as of September 30, 2023 would change by approximately $1.0 million annually.

Derivative Instruments

As of September 30, 2023, we had four outstanding interest rate swaps of which three are designated as cash flow hedges of interest rate risk, with a total notional amount of $436.1 million. See Note 7 (Derivatives) within our consolidated financial statements for further detail on our interest rate swaps. We are exposed to credit risk of the counterparty to our interest rate swap agreements in the event of non-performance under the terms of the agreements. If we were not able to replace the swaps in the event of non-performance by the counterparty, we would be subject to variability of the interest rate on the amount outstanding under our debt that is fixed through the use of the swap.

Indebtedness

As of September 30, 2023, we had total consolidated indebtedness of approximately $2.0 billion. The weighted average interest rate on our consolidated indebtedness was 4.07% (based on the 30-day SOFR rate of 5.31% and a PRIME rate of 8.50% as of September 30, 2023). As of September 30, 2023, we had approximately $104.8 million, or approximately 5.3%, of our outstanding long-term debt exposed to fluctuations in short-term interest rates. See Note 6 (Debt) to our consolidated financial statements included in Part I, Item 1 to this report for a summary of our indebtedness as of September 30, 2023.

Item 4.                                 Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Trust’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Trust’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based on such evaluation, the Trust’s Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2023, the Trust’s disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information it is required to disclose in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to the Trust’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in the Trust’s system of internal control over financial reporting during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Trust’s internal control over financial reporting.

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Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and the Trust’s internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and the Trust’s internal control over financial reporting must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II.       Other Information

Item 1.                                 Legal Proceedings

From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently a party, as plaintiff or defendant, to any legal proceedings which, individually or in the aggregate, would be expected to have a material effect on our business, financial condition, or results of operations if determined adversely to us.

Item 1A.                       Risk Factors

Information on risk factors can be found in Part I, Item 1A (Risk Factors) of our 2022 Annual Report. There have been no material changes from the risk factors previously disclosed in our 2022 Annual Report, other than risks related to the Mergers and the Merger Agreement set forth below.

Risks Related to the Mergers

The Exchange Ratio is fixed and will not be adjusted in the event of any change in the stock prices of either Healthpeak or the Trust.

Upon the closing of the Company Merger, each outstanding common share of the Trust (other than common shares to be canceled in accordance with the Merger Agreement) will be converted into the right to receive 0.674 shares of Healthpeak common stock, without interest, but subject to any withholding required under applicable tax law, with cash paid in lieu of any fractional shares. The Exchange Ratio was fixed in the Merger Agreement and, except for certain adjustments on account of changes in the capitalization of Healthpeak or the Trust, will not be adjusted for changes in the market prices of shares of Healthpeak common stock or the Trust common shares. Changes in the market price of shares of Healthpeak common stock prior to the closing of the Company Merger will affect the market value of the Merger Consideration that the Trust shareholders will be entitled to receive upon completion of the Company Merger. Stock price changes may result from a variety of factors (many of which are beyond the control of either Healthpeak or the Trust), including the following factors:

•market reaction to the announcement of the Mergers and the prospects of the combined company;

•changes in the respective businesses, operations, assets, liabilities and prospects of Healthpeak, the Trust or the combined company;

•changes in market assessments of the business, operations, financial position and prospects of Healthpeak, the Trust or the combined company;

•market assessments of the likelihood that the Mergers will close;

•interest rates (including changes or anticipated changes in interest rates), general market and economic conditions and other factors generally affecting the market prices of Healthpeak common stock and the Trust common shares;

•federal, state and local legislation, governmental regulation and legal developments in the businesses in which Healthpeak or the Trust operate; and

•other factors beyond the control of either Healthpeak or the Trust, including those described or referred to elsewhere in this “Risk Factors” section.

The market price of shares of Healthpeak common stock at the closing of the Mergers may vary from its price on the date the Merger Agreement was executed, on the date of the joint proxy statement/prospectus, on the date of the Healthpeak special meeting and on the date of the Trust special meeting.

If the market price of shares of Healthpeak common stock increases between the date the Merger Agreement was signed, the date of the joint proxy statement/prospectus, the date of the Healthpeak special meeting or the date of the Trust special meeting and the date of the closing of the Mergers, the Trust shareholders could receive shares of Healthpeak common stock that have a market value upon completion of the Mergers that is greater than the market value of such shares calculated pursuant to the Exchange Ratio on the date the Merger Agreement was signed, the date of the joint proxy statement/prospectus, the date of the Healthpeak special meeting or the date of the Trust special meeting, respectively. Conversely, if the market price of shares of Healthpeak common stock declines between the date the Merger Agreement was signed, the date of the joint proxy statement/prospectus, the date of the Healthpeak special meeting or the date of the Trust special meeting and the closing of the Mergers, the Trust shareholders could receive shares of Healthpeak common stock that have a market value upon the closing of the Mergers that is less than the market value of such shares calculated pursuant to the Exchange Ratio on the date the Merger Agreement was signed, the date of the joint proxy statement/prospectus, the date of the Healthpeak special meeting or the date of the Trust special meeting, respectively. Furthermore, at the time of the Healthpeak special meeting and the Trust special meeting, Healthpeak stockholders and the Trust shareholders will not know with certainty the value of the Healthpeak common stock that the Trust shareholders will receive upon completion of the Mergers.

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Therefore, while the number of shares of Healthpeak common stock to be issued per the Trust common share is fixed, Healthpeak stockholders and the Trust shareholders cannot be sure of the market value of the Merger Consideration the Trust shareholders will receive upon the closing of the Mergers.

Completion of the Mergers is subject to many conditions, and if these conditions are not satisfied or waived, the Mergers will not be completed, which could result in a requirement that the Trust pay certain termination fees.

The consummation of the Mergers is subject to certain conditions, including (i) the receipt of approval from the Trust’s shareholders; (ii) the receipt of approval from Healthpeak’s stockholders; (iii) the effectiveness of the registration statement on Form S-4 to be filed with the Commission by the parties in connection with the transactions contemplated by the Merger Agreement; (iv) approval for listing on the New York Stock Exchange of the shares of Healthpeak Common Stock to be issued in the Mergers or reserved for issuance in connection therewith; (v) no temporary restraining order, preliminary or permanent injunction or other order, decree or judgment being in effect enjoining, preventing, restraining, making illegal or otherwise prohibiting the consummation of the Mergers; (vi) no law having been enacted, issued, entered, promulgated or enforced by any governmental authority being in effect which would have the effect of enjoining, preventing, restraining, making illegal or otherwise prohibiting the consummation of the Mergers; (vii) accuracy of each party’s representations, subject in most cases to materiality or Material Adverse Effect (as defined in the Merger Agreement) qualifications; (viii) material compliance with each party’s covenants; (ix) absence of a Material Adverse Effect on either Healthpeak or the Trust; (x) receipt by each of Healthpeak and the Trust of an opinion to the effect that the Company Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code and (xi) receipt by Healthpeak of an opinion that the Trust qualifies as a REIT under the Code and receipt by the Trust of an opinion that Healthpeak qualifies as a REIT under the Internal Revenue Code.

There can be no assurance that the conditions to the closing of the Mergers will be satisfied or waived or that the Mergers will be completed. Failure to consummate the Mergers may adversely affect the Company’s results of operations and business prospects for the following reasons, among others: (i) the Company has incurred and will incur certain transaction costs, regardless of whether the proposed Mergers close, which could adversely affect our financial condition, results of operations and ability to make distributions to our shareholders; and (ii) the proposed Mergers, whether or not they close, will divert the attention of certain of the Company’s management and other key employees from ongoing business activities, including the pursuit of other opportunities that could be beneficial to the Company. In addition, the Trust or Healthpeak may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the Mergers are not completed by July 31, 2024.

If the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, the Trust may be required to pay Healthpeak a termination fee of $111 million, or the maximum amount that can be paid to Healthpeak without causing it to fail to meet its REIT requirement for such year, and/or reimburse Healthpeak’s transaction expenses up to an amount equal to $20 million, or Healthpeak may be required to pay the Trust a termination fee of $365 million, or the maximum amount that can be paid to Healthpeak without causing it to fail to meet its REIT requirement for such year, and/or reimburse the Trust’s transaction expenses up to an amount equal to $20 million. If the Mergers are not consummated, the price of the Trust common shares might decline.

Failure to complete the Mergers could negatively impact the stock prices and the future business and financial results of the Trust.

If the Mergers are not completed, the ongoing business of the Trust could be materially adversely affected and without realizing any of the benefits of having completed the Mergers, the Trust will be subject to a variety of risks associated with the failure to complete the Mergers, including the following:

•the market price of the Trust common shares could decline;

•the Trust being required, under certain circumstances, to pay to Healthpeak a termination fee of $111 million depending on the circumstances and/or reimburse Healthpeak’s reasonable expenses up to $20 million, as applicable;

•if the Merger Agreement is terminated and the Board of Trustees seeks another business combination, the Trust shareholders cannot be certain that the Trust will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms that Healthpeak and the Trust have agreed to in the Merger Agreement;

•the Trust may experience negative reactions from the financial markets or its tenants, property managers or employees;

•the Trust having to pay certain costs relating to the Mergers, such as legal, accounting, financial advisor, filing, printing and mailing fees whether or not the Mergers are completed; and

•diversion of the Company’s management focus and resources from operational matters and other strategic opportunities while working to implement the Mergers.

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If the Mergers are not completed, these risks could materially affect the business, financial results and price of the common shares of the Trust. In addition, if the Mergers are not completed, the Trust could be subject to litigation related to any failure to complete the Mergers or related to any enforcement proceeding commenced against the Trust to perform its obligations under the Merger Agreement. The materialization of any of these risks could adversely impact the Company’s ongoing business.

The pendency of the Mergers could adversely affect the business and operations of the Company.

Prior to the effective time of the Mergers, some tenants, prospective tenants or property managers of the Company may delay or defer decisions, which could negatively affect the revenues, earnings, cash flows and expenses of the Company, regardless of whether the Mergers are completed. In addition, under our ground leases, certain hospitals or health systems could exercise purchase rights and rights of first offer and first refusal with respect to sales of the property subject to the ground lease. Similarly, current and prospective employees of the Company may experience uncertainty about their future roles with the combined company following the Mergers, which may materially adversely affect the ability of the Company to attract and retain key personnel during the pendency of the Mergers. Further, due to operating restrictions in the Merger Agreement, the Company may be unable, during the pendency of the Mergers, to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions, even if such actions would prove beneficial.

The Merger Agreement contains provisions that could make it difficult for a third party to acquire all or a significant portion of the Trust prior to the Mergers.

Pursuant to the Merger Agreement, the Trust has agreed not to (i) solicit proposals relating to certain alternative transactions, (ii) engage in discussions or negotiations or provide non-public information in connection with any proposal for an alternative transaction from a third party or (iii) approve or enter into any agreements providing for any such alternative transaction, in each case, subject to certain exceptions, including to permit members of the Board of Trustees to comply with their duties under applicable law. Notwithstanding these “no-shop” restrictions, prior to obtaining the Trust shareholder approval, under specified circumstances the Board of Trustees may change its recommendation of the transaction, and the Trust may also terminate the Merger Agreement to accept a superior proposal upon payment of the termination fee described below.

The Merger Agreement provides that, in connection with the termination of the Merger Agreement under specified circumstances, the Trust may be required to pay to Healthpeak a termination fee of $111 million and/or reimburse Healthpeak’s transaction expenses up to an amount equal to $20 million. These provisions could discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of the Trust from considering or proposing such an acquisition, even if the potential competing acquirer was prepared to pay consideration with a higher per share value than the value proposed to be received or realized in the Mergers, or might result in a potential competing acquirer proposing to pay a lower per share value than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances under the Merger Agreement.

If the Merger Agreement is terminated and the Trust determines to seek another business combination, the Trust may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Mergers contemplated by the Merger Agreement.

If the Mergers are not consummated by July 31, 2024, either Healthpeak or the Trust may terminate the Merger Agreement.

Either Healthpeak or the Trust may terminate the Merger Agreement if the Mergers have not been consummated by July 31, 2024. However, this termination right will not be available to a party whose material breach of any provision of the Merger Agreement was the primary cause of, or resulted in, the failure of the Mergers to occur on or before July 31, 2024.

If the Company Merger does not qualify as a reorganization, there may be adverse tax consequences.

The Company Merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Code. It is a condition to the completion of the Mergers that Healthpeak and the Trust receive written opinions from their respective counsel to the effect that the Company Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. The foregoing opinions, however, are limited to the factual representations provided by Healthpeak and the Trust to counsel and the assumptions set forth therein, and are not a guarantee that the Company Merger will, in fact, qualify as a reorganization. Furthermore, such opinions are not binding on the IRS. Neither the Trust nor Healthpeak has requested or plans to request a ruling from the IRS that the Company Merger qualifies as a reorganization. If the Company Merger were to fail to qualify as a reorganization, then each United States holder of the Trust common shares generally would recognize gain or loss, as applicable, equal to the difference between (i) the sum of the fair market value of the shares of Healthpeak common stock and cash in lieu of any fractional share of Healthpeak common stock received by such holder in the Company Merger; and (ii) such holder’s adjusted tax basis in its Trust common shares.

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An adverse outcome in any litigation or other legal proceedings relating to the Merger Agreement, or the transactions contemplated thereby, could have a material adverse impact on the business of the Company or its ability to consummate the transactions contemplated by the Merger Agreement.

Transactions like the Mergers are frequently the subject of litigation, shareholder demands, or other legal proceedings, including actions alleging that either party’s board of directors breached their respective duties to their shareholders or other equity holders by entering into the Merger Agreement, by failing to obtain a greater value in the transaction for their stockholders or other equity holders or otherwise, or any other claims (contractual or otherwise) arising out of the Mergers or the transactions related thereto. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on the parties’ ability to consummate the Mergers in a timely manner, or at all, or their respective business, results of operation or financial position, including through the possible diversion of either company’s resources or distraction of key personnel.

Risks Related to the Combined Company Following the Mergers

The combined company expects to incur substantial expenses related to the Mergers.

The combined company expects to incur substantial expenses in connection with completing the Mergers and integrating the operations and systems of the Trust with those of Healthpeak. There are a number of factors that could affect the total amount or the timing of the combined company’s expenses relating to the completion of the Mergers and the combined company’s operations. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. As a result, the expenses associated with the Mergers could, particularly in the near term, reduce the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the operations of the Trust following the completion of the Mergers.

Following the Mergers, the combined company may be unable to integrate the operations of Healthpeak and the Company successfully and realize the anticipated synergies and other benefits of the Mergers or do so within the anticipated time frame.

The Mergers involve the combination of two companies that currently operate as independent public companies and their respective operating partnerships. The combined company is expected to benefit from the elimination of duplicative costs associated with supporting a public company platform. However, the combined company will be required to devote significant management attention and resources to integrating the operations of Healthpeak and the Trust. Potential difficulties the combined company may encounter in the integration process include the following:

•the inability to successfully combine the operations of Healthpeak and the Trust, including, among other things, the integration of employees, customer and tenant records in a manner that permits the combined company to achieve the synergies anticipated to result from the Mergers, which would result in the anticipated benefits of the Mergers not being realized in the time frame currently anticipated or at all;

•the inability to dispose of former Company assets or operations that the combined company desires to dispose of;

•the complexities associated with managing the combined businesses out of different locations and integrating personnel from the two companies;

•the failure to retain key employees of either of the two companies;

•potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Mergers; and

•performance shortfalls as a result of the diversion of management’s attention caused by completing the Mergers and integrating the companies’ operations.

For all these reasons, it is possible that the integration process could result in the distraction of the combined company’s management, the disruption of the combined company’s ongoing business or inconsistencies in the combined company’s operations, services, standards, controls, procedures and policies, any of which could adversely affect the ability of the combined company to maintain relationships with tenants, property managers and employees or to achieve the anticipated benefits of the Mergers, or could otherwise adversely affect the business and financial results of the combined company.

The market price and trading volume of the combined company common stock may be volatile or may decline as a result of the Mergers.

The combined company’s common stock may experience significant price and volume fluctuations, and investors in shares of the combined company common stock may experience a decrease in the value of their shares, including decreases unrelated to the combined company’s operating performance or prospects. We cannot assure you that the market price of the combined company common stock will not fluctuate or decline significantly in the future.

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In addition, upon consummation of the Mergers, Healthpeak stockholders and the Trust shareholders will own interests in a combined company operating an expanded business with a different mix of properties, risks and liabilities. Current Healthpeak stockholders and the Trust shareholders may not wish to continue to invest in the combined company, or for other reasons may wish to dispose of some or all of their shares of the combined company common stock. If, following the Company Merger Effective Time, large amounts of the combined company common stock are sold, the price of the combined company common stock could decline.

The combined company may incur adverse tax consequences if Healthpeak or the Trust has failed or fails to qualify as a REIT for United States federal income tax purposes.

The Trust has operated in a manner that it believes has allowed it to qualify as a REIT for United States federal income tax purposes under the Code and intends to continue to do so through the closing date or the Company Merger Effective Time, respectively. The combined company intends to continue operating in such a manner following the Mergers. The closing of the Mergers is conditioned on the receipt by Healthpeak of an opinion of the Trust’s counsel to the effect that, commencing with the Trust’s taxable year ended December 31, 2015 and through the Company Merger Effective Time, the Trust has been organized and has operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and on the receipt by the Trust of an opinion of Healthpeak’s counsel to the effect that, commencing with Healthpeak’s taxable year ended December 31, 2015, Healthpeak has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and Healthpeak’s proposed method of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year that includes the Company Merger Effective Time and future taxable years. The foregoing REIT opinions, however, are limited to the factual representations provided by Healthpeak and the Trust to counsel and the assumptions set forth therein, and are not a guarantee that Healthpeak or the Trust has, in fact, qualified, or that the combined company will continue to qualify, as a REIT. Moreover, such opinions are not binding on the IRS, and neither Healthpeak nor the Trust has requested or plans to request a ruling from the IRS that it or the combined company qualifies as a REIT. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The complexity of these provisions and of the applicable regulations (as in effect from time to time) of the United States Department of the Treasury under the Code is greater in the case of a REIT, like Healthpeak and the Trust, that holds assets through a partnership. The determination of various factual matters and circumstances not entirely within Healthpeak’s and the Trust’s control may affect their ability to qualify as REITs.

In order to qualify as a REIT, each of Healthpeak and the Trust must satisfy a number of requirements, including requirements regarding the ownership of its stock and the composition of its gross income and assets. Also, a REIT must make distributions to stockholders annually equal, in the aggregate, to at least 90% of its net taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.

If Healthpeak or the Trust (or, following the Mergers, the combined company) loses its REIT status, or is determined to have lost its REIT status in a prior year, it will face material tax consequences that would substantially reduce its cash available for distribution, including cash available to pay dividends to its stockholders, because:

•it would be subject to United States federal income tax on its net income at regular corporate rates for the years it did not qualify for taxation as a REIT (and, for such years, would not be allowed a deduction for dividends paid to stockholders in computing its taxable income);

•it could be subject to a federal alternative minimum tax and possibly increased state and local taxes for such periods;

•unless it is entitled to relief under applicable statutory provisions, neither it nor any “successor” company (including, potentially, the combined company) could elect to be taxed as a REIT until the fifth taxable year following the year during which it was disqualified; and

•for five years following re-election of REIT status, upon a taxable disposition of an asset owned as of such re-election, it could be subject to corporate level tax with respect to any built-in gain inherent in such asset at the time of re-election.

Even if Healthpeak (or, following the Mergers, the combined company) retains its REIT status, if the Trust is determined to have lost its REIT status for a taxable year ending on or before the Company Merger, the Trust would be subject to adverse tax consequences similar to those described above. This could substantially reduce the combined company’s cash available for distribution, including cash available to pay dividends to its stockholders, because, assuming that the combined company otherwise maintains its REIT qualification:

•the combined company generally would be subject to corporate level tax with respect to the built-in gain on each asset of the Trust existing at the time of the Company Merger if the combined company were to dispose of the Trust asset during the five-year period following the Company Merger;

•the combined company would succeed to any earnings and profits accumulated by the Trust for taxable periods that it did not qualify as a REIT, and the combined company would have to pay a special dividend and/or employ applicable

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deficiency dividend procedures (including interest payments to the IRS) to eliminate such earnings and profits (or if the combined company does not timely distribute those earnings and profits, the combined company could fail to qualify as a REIT); and

•if the Trust incurred any unpaid tax liabilities prior to the Company Merger, those tax liabilities would be transferred to the combined company as a result of the Company Merger.

If there is an adjustment to the Trust’s taxable income or dividends paid deductions, the combined company could elect to use the deficiency dividend procedure in order to maintain the Trust’s REIT status. That deficiency dividend procedure could require the combined company to make significant distributions to its stockholders and to pay significant interest to the IRS.

As a result of all these factors, Healthpeak’s or the Trust’s (or, following the Mergers, the combined company’s) failure to qualify as a REIT could impair the combined company’s ability to expand its business and raise capital, and would materially adversely affect the value of its capital stock.

Item 2.                       Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

Recent Sales of Unregistered Securities

From time to time the Operating Partnership issues OP Units to the Trust, as required by the Second Amended and Restated Agreement of Limited Partnership, to reflect additional issuances of common shares by the Trust and to preserve equitable ownership ratios.

On July 3, 2023, we issued 25,000 common shares upon the redemption of OP Units held by an OP Unit holder in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table sets forth information relating to repurchases of our common shares of beneficial interest and OP Units during the three months ended September 30, 2023:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1, 2023 - July 31, 2023	25,000	(1)	$	13.99	N/A	N/A
August 1, 2023 - August 31, 2023	—		—		N/A	N/A
September 1, 2023 - September 30, 2023	—		—		N/A	N/A
Total	25,000		$	13.99	—	—

(1)Represents OP Units redeemed by holders in exchange for common shares of the Company.

Item 5.                       Other Information

Rule 10b5-1 Trading Arrangements

On August 14, 2023, John T. Thomas, President and Chief Executive Officer of the Trust entered into a prearranged trading plan (the “10b5-1 Plan”) that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 50,000 shares of common stock, subject to price and trading thresholds set under the plan. The 10b5-1 Plan begins on November 13, 2023, and expires when all of the shares are sold or on August 14, 2024, whichever occurs first.

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Item 6.                                 Exhibits

Exhibit No.		Description
2.1	(1)	Agreement and Plan of Merger dated as of October 29, 2023 among Healthpeak Properties, Inc., Alpine Sub, LLC, Alpine OP Sub, LLC, Physicians Realty Trust and Physicians Realty L.P.
3.1	(1)	Bylaws of Physicians Realty Trust, as amended through October 28, 2023
10.1	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and John T. Thomas
10.2	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and Jeffrey N. Theiler
10.3	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and D. Deeni Taylor
10.4	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and Mark D. Theine
10.5	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and John W. Lucey
10.6	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and Bradley D. Page
10.7	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and Daniel M. Klein
10.8	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and Laurie P. Becker
10.9	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and Amy M. Hall
10.10	(2)	Employment Agreement dated as of October 20, 2023, between the Trust and Mark Dukes
10.11		Form of Restricted Share Unit Award Agreement (Performance Units)**
10.12		Form of Restricted Share Award Agreement - Executives (Time Vesting)**
10.13		Form of Restricted Share Unit Award Agreement - Trustee (Time Vesting)**
10.14		Form of Restricted Share Unit Award Agreement - Trustee (In Lieu of Cash Retainer)**
10.15		Form of Restricted Share Award Agreement - Executives (Deferral)**
22.1		List of Subsidiary Issuers and Guaranteed Securities**
31.1		Certification of John T. Thomas, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Physicians Realty Trust**
31.2		Certification of Jeffrey N. Theiler, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Physicians Realty Trust**
32.1		Certification of John T. Thomas and Jeffrey N. Theiler, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) for Physicians Realty Trust**
101.INS		This instance document does not appear in the interactive data file because of XBRL tags are embedded within the inline XBRL document.
101.SCH		Inline XBRL Extension Schema Document (+)
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document (+)
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document (+)
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document (+)
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document (+)
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

**    Filed herewith

(+) Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement for purposes of Section 11 or 12 of the Securities Act, is deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

(1)Incorporated by reference to the Trust’s Current Report on Form 8-K filed with the SEC on October 30, 2023 (File No. 001-36007)

(2)Incorporated by reference to the Trust’s Current Report on Form 8-K filed with the SEC on October 20, 2023 (File No. 001-36007)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PHYSICIANS REALTY TRUST
Date: October 30, 2023	/s/ John T. Thomas
	John T. Thomas
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: October 30, 2023	/s/ Jeffrey N. Theiler
	Jeffrey N. Theiler
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

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EX-10.11

Exhibit 10.11

PERFORMANCE-BASED RESTRICTED SHARE UNIT AWARD AGREEMENT

PHYSICIANS REALTY TRUST
AMENDED AND RESTATED 2013 EQUITY INCENTIVE PLAN

1.Grant of Award. Pursuant to the Physicians Realty Trust Amended and Restated 2013 Equity Incentive Plan (the “Plan”) for Employees, Consultants, and Outside Trustees of Physicians Realty Trust, a Maryland real estate investment trust (the “Company”), the Company grants to

__________________
(the “Participant”)

an Award of Restricted Share Units in accordance with Section 6.5 of the Plan. The number of Restricted Share Units awarded under this Restricted Share Unit Award Agreement (the “Agreement”) is _____ units (the “Awarded Units”). Each Restricted Share Unit represents the right to receive one Common Share if the Restricted Share Unit becomes vested and nonforfeitable in accordance with Sections 3 and 4 of this Agreement. The “Date of Grant” of this Award is __________________. The Participant shall have no rights as a shareholder of the Company, no dividend rights and no voting rights with respect to the Restricted Share Units or the Common Shares underlying the Restricted Share Units unless and until the Restricted Share Units become vested and nonforfeitable and such Common Shares are delivered to the Participant in accordance with Section 6 of this Agreement. The Participant is not required to pay any cash consideration for the grant of the Restricted Share Units.

2.Subject to Plan. This Agreement is subject to the terms and conditions of the Plan, and the terms of the Plan shall control; provided that, in the event of any conflict among this Agreement, the Plan and an Employment Agreement in effect between the Company and the Participant (the “Employment Agreement”), the terms of the Employment Agreement shall control to the extent that it results in accelerated vesting of the Restricted Share Units, and it shall not result in a delay of any vesting or in any non-vesting of any Restricted Share Units that otherwise would occur under the terms of the standard vesting provisions contained in Sections 3 and 4(b) and (c) of this Agreement. The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. This Agreement is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

3.Vesting. The Participant’s rights and interest in the Awarded Units shall vest as set forth in Exhibit A.

4.Forfeiture of Awarded Units.

a.In General. Except as otherwise provided in this Section 4, or the Employment Agreement (if applicable), Awarded Units (and related dividend equivalents) that are not vested in accordance with Section 3 shall be forfeited on the date of the Participant’s Termination of Service. Upon forfeiture, all of the Participant’s rights and interest with respect to the forfeited Awarded Units (and related dividend equivalents) shall cease and terminate, without any further obligations on the part of the Company.

b.Death or Total and Permanent Disability. In the event that the Participant’s Termination of Service is due to death or Total and Permanent Disability at a time that the Participant’s Awarded Units have not yet vested, all such Awarded Units shall vest in full at the target level of achievement.

c.Retirement. In the event that the Participant’s Termination of Service is due to Retirement and the Participant has provided the Company with at least twelve months’ advance written notice of the Participant’s Retirement date (unless the notice period is waived by the Committee in its sole discretion) and has remained in employment in good standing until the Participant’s Retirement date, then a pro-rata portion of the Participant’s Awarded Units shall not be forfeited but shall remain unvested until such time as such Awarded Units would otherwise have become vested in accordance with Section 3 (disregarding, for purposes of this Section 4(c), the requirement of continued service as specified in Sections 3 and 4(a)) based on the actual level of the performance goal achieved. Such pro-rata portion of the Awarded Units will be calculated by multiplying the total number of Awarded Units by a fraction, the numerator of which is the number of months from the Date of Grant through the date of Termination of Service (rounding any partial month to the next whole month) and the denominator of which is 36. No fractional Common Shares shall be issued, and subject to the preceding limitations on the number of related Common Shares available under this Agreement (that is, 300% of the related Common Shares), any fractional Common Share that would have resulted from the foregoing calculations shall be rounded up to the next whole Common Share. Any Awarded Units (and related dividend equivalents) that were unvested at the date of Termination of Service and that exceed the pro-rata portion of the Awarded Units calculated under this Section 4(c) shall be forfeited.

5.Restrictions on Transfer of Awarded Units. Subject to the provisions of the Plan and the terms of this Agreement, the Participant shall not be permitted to sell, transfer, pledge, hypothecate, margin, assign or otherwise encumber any of the Awarded Units, related rights to dividend equivalents or any other rights relating thereto, and the Awarded Units, related rights to dividend equivalents and other rights relating thereto, shall not be subject to execution, attachment, lien, or similar process; provided, however, the Participant will be entitled to designate a beneficiary or beneficiaries to receive any settlement in respect of the Awarded Units upon the death of the Participant, in the manner and to the extent permitted by the Committee. Any purported transfer or other transaction not permitted under this Section 5 shall be deemed null and void.

6.Timing and Manner of Settlement of Awarded Units.

a.Settlement Timing. The timing of settlement of Awarded Units is set forth in Exhibit B.

b.Manner of Settlement. The Company may make delivery of Common Shares in settlement of Awarded Units by either delivering certificates representing such Common Shares to the Participant (if requested by the Participant in accordance with Section 6.3(a) of the Plan and the Company has elected, in its sole discretion, to issue certificates (as opposed to electronic book entry form with respect to its Common Shares)) or by registering the

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Common Shares in the Participant’s name. In no event will the Company issue fractional Common Shares.

c.Effect of Settlement. Neither the Participant nor any of the Participant’s successors, heirs, assigns or personal representatives shall have any further rights or interests in any Awarded Units that have been paid and settled. Although a settlement date or range of dates for settlement are specified above, the Company retains discretion to determine the settlement date, and no Participant or beneficiary of a Participant shall have any claim for damages or loss by virtue of the fact that the market price of Common Shares was higher on a given date upon which settlement could have been made as compared to the market price on or after the actual settlement date (any claim relating to settlement will be limited to a claim for delivery of Common Shares and related dividend equivalents).

7.Legend. The following legend shall be inserted on a certificate, if issued, evidencing Common Shares issued under the Plan if the Common Shares were not issued in a transaction registered under the applicable federal and state securities laws:

“Common Shares represented by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company.”

8.Dividend Equivalents. During the period beginning on the Date of Grant and ending on the date that Common Shares are issued in settlement of Awarded Units, the Participant will accrue dividend equivalents equal to the cash dividend or distributions during that period that would have been paid had the Awarded Unit been an issued and outstanding Common Share. Such accrued dividend equivalents (i) will vest and become payable upon the same terms and at the same time of settlement as the Awarded Units to which they relate; (ii) will be payable with respect to the total number of Awarded Units that become vested and nonforfeitable; and (iii) will be denominated and payable solely in cash. Dividend equivalent payments, at settlement, will be net of applicable federal, state, local and social insurance withholding taxes (subject to Section 22 of this Agreement).

9.Adjustment to Number of Awarded Units. The number of Awarded Units shall be subject to adjustment in accordance with Articles 11 through 13 of the Plan. Any such adjustment shall be made taking into account any crediting of cash dividend equivalents to the Participant under Section 8 in connection with such transaction or event. Restricted Share Units credited to the Participant as a result of an adjustment shall be subject to the same forfeiture and settlement terms as applied to the related Awarded Units prior to the adjustment.

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10.Specific Performance. The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

11.Participant’s Acknowledgments. The Participant acknowledges that a copy of the Plan has been made available for the Participant’s review by the Company and represents that the Participant is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement. The Participant acknowledges and agrees that (i) sales of Common Shares delivered in settlement of the Awarded Units will be subject to the Company’s policies regulating trading by Employees, Consultants and Outside Trustees, including any applicable “blackout” or other designated periods in which sales of Common Shares are not permitted, and (ii) Common Shares delivered in settlement will be subject to any recoupment or “clawback” policy applied with prospective or retroactive effect.

12.Law Governing. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Maryland (excluding any conflict of laws rule or principle of Maryland law that might refer the governance, construction, or interpretation of this agreement to the laws of another state).

13.No Right to Continue Service or Employment. Nothing herein shall be construed to confer upon the Participant the right to continue in the employ or to provide services to the Company or any Subsidiary, whether as an Employee or as a Consultant or as an Outside Trustee, or interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee, Consultant, or Outside Trustee at any time.

14.Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

15.Covenants and Agreements as Independent Agreements. Each covenant and agreement that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

16.Entire Agreement. This Agreement, together with the Plan and the Employment Agreement (if applicable), supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this

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Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan or the Employment Agreement (if applicable) and that any agreement, statement or promise that is not contained in this Agreement or the Plan or the Employment Agreement (if applicable) shall not be valid or binding or of any force or effect.

17.Parties Bound. The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.

18.Modification. No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties. Notwithstanding the preceding sentence, the Company may amend the Plan or this Agreement to the extent permitted by the Plan.

19.Headings. The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

20.Gender and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

21.Notice. Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a.Notice to the Company shall be addressed and delivered as follows:

Physicians Realty Trust

309 N. Water Street, Suite 500

Milwaukee, Wisconsin, 53202

Attn: Corporate Secretary

Fax: (414) 249-4720

Notice to the Participant shall be addressed and delivered as set forth on the signature page.

22.Tax Requirements. The Participant is hereby advised to consult immediately with the Participant’s own tax advisor regarding the tax consequences of this Agreement. The Company or, if applicable, any Subsidiary (for purposes of this Section 22, the term “Company” shall be deemed to include any applicable Subsidiary) shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any federal, state, local, or other taxes required by law to be withheld in connection with this Award. The Company may, in its sole discretion, also require the Participant receiving Common Shares in settlement of Awarded Units pay the Company the amount of any taxes that

5

the Company is required to withhold in connection with the Participant’s income arising with respect to this Award. Such payments shall be required to be made when requested by the Company and may be required to be made prior to the delivery of any certificate representing Common Shares, if such certificate is requested by the Participant in accordance with Section 6.3(a) of the Plan. Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the Participant to the Company of Common Shares, other than (A) Restricted Shares, or (B) Common Shares that the Participant has acquired from the Company within six (6) months prior thereto, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the vesting of this Award, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (iv) any combination of (i), (ii), or (iii); provided, however, if the Participant is a Reporting Person, then the Company will withhold in shares as provided in (iii) hereof, unless otherwise approved in advance by the Committee. The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.

23.REIT Status. This Agreement shall be interpreted and construed in a manner consistent with the Company’s status as a real estate investment trust.

24.Unfunded Plan. The Participant acknowledges and agrees that any rights of the Participant to the Participant’s Awarded Units and related dividend equivalents and any other related rights shall constitute bookkeeping entries on the books of the Company and shall not create in the Participant any right to or claim against any specific assets of the Company or any Subsidiary, nor result in the creation of any trust or escrow account for the Participant. With respect to the Participant’s entitlement to any payment hereunder, the Participant shall be a general creditor of the Company.

25.Code Section 409A. Payments made pursuant to this Agreement are intended to be exempt from, or to otherwise comply with, Section 409A of the Code and the Treasury regulations and guidance issued thereunder (collectively, “Code Section 409A”). Accordingly, other provisions of the Plan or this Agreement notwithstanding, the provisions of this Section 25 will apply in order that the Awarded Units, and related dividend equivalents and any other related rights, will be exempt from or otherwise comply with Code Section 409A. In addition, the Company and the Committee reserve the right, to the extent the Company or the Committee deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this Agreement to ensure that all Awarded Units, and related dividend equivalents and any other related rights, are exempt from or otherwise comply, and in operation comply, with Code Section 409A (including, without limitation, the avoidance of penalties thereunder). Other provisions of the Plan and this Agreement notwithstanding, the Company makes no representations that the Awarded Units, and related dividend equivalents and any other related rights, will be exempt from or avoid any penalties that may apply under Code Section 409A, makes no undertaking to preclude Code Section 409A from applying to the Awarded Units and related dividend equivalents and any other related rights, and will not indemnify or provide a gross up payment to a Participant (or the Participant’s beneficiary) for any

6

taxes, interest or penalties imposed under Code Section 409A. The settlement of Awarded Units that constitute nonqualified deferred compensation within the meaning of Code Section 409A (“409A Awarded Units”) may not be accelerated by the Company except to the extent permitted under Code Section 409A. The Company may, however, accelerate the vesting of 409A Awarded Units, without changing the settlement terms of such 409A Awarded Units. In the case of any settlement of 409A Awarded Units during a specified period following any date triggering a right to settlement, the Participant shall have no influence on any determination as to the tax year in which the settlement will be made. Notwithstanding any other provision in this Agreement, if the Participant is a “specified employee” for purposes of Code Section 409A as of the date of the Participant’s Termination of Service, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Code Section 409A, (ii) is payable upon the Participant’s Termination of Service for a reason other than death, and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of the Participant’s Termination of Service, such payment shall be delayed and paid to the Participant on the day that is six months and one day following the Participant’s Termination of Service or, if earlier, within ninety (90) days following the Participant’s death.

7

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence the Participant’s consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.

COMPANY:

PHYSICIANS REALTY TRUST

By:

Name:

Title:

PARTICIPANT

Signature

Name:

Address:

8

Exhibit A

[For the period from __________ to _________(the “Performance Period”), [insert the relevant performance goals and any specific definitions related to such goals here]]1

1 Performance award and other awards (whether relating to cash or Common Shares) under the Plan may be made subject to the attainment of performance goals relating to one or more business criteria that may consist of one or more or any combination or any component or ratio or other metric of the following criteria: cash flow; net income; cost; revenues; sales; earnings; margins; ratio of debt to debt plus equity, debt to equity or debt to assets; net borrowing, credit quality or debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; gross margin; earnings per share (whether on a pre-tax, after-tax, operational or other basis); operating earnings; capital expenditures; expenses or expense levels; economic value added; ratio of operating earnings to capital spending or any other operating ratios; free cash flow; net profit; net sales; net asset value per share; the accomplishment of mergers, acquisitions, dispositions, restructurings, public offerings or similar extraordinary business transactions; sales growth; price of the Company’s Common Shares; return on assets, equity or shareholders’ equity; market share; inventory levels, inventory turn or shrinkage; total return to shareholders; establishment and/or implementation of Company policies; regulatory and/or compliance goals; management of expenses; external performance, tenant, customer or supplier satisfaction, operational goals or other awards or surveys; environmental, social and governance goals or sustainability goals or such other business criteria as the Committee considers appropriate or desirable in light of the business goals of the Company (“Performance Criteria”). Any Performance Criteria may be used to measure the performance of the Company as a whole or any business unit of the Company and may be measured relative to a peer group or index. Any Performance Criteria may include or exclude (i) extraordinary, unusual and/or non-recurring items of gain or loss, (ii) gains or losses on the disposition of a business, (iii) changes in tax or accounting regulations or laws, (iv) the effect of a merger or acquisition, as identified in the Company’s quarterly and annual earnings releases, or (v) other similar occurrences.

9

EX-10.12

Exhibit 10.12

RESTRICTED SHARE AWARD AGREEMENT

PHYSICIANS REALTY TRUST

AMENDED AND RESTATED 2013 EQUITY INCENTIVE PLAN

1.Grant of Award. Pursuant to the Physicians Realty Trust Amended and Restated 2013 Equity Incentive Plan (the “Plan”) for Employees, Consultants, and Outside Trustees of Physicians Realty Trust, a Maryland real estate investment trust (the “Company”), the Company grants to

__________________

(the “Participant”)

an Award of Restricted Shares in accordance with Section 6.3 of the Plan. The number of Common Shares awarded under this Restricted Share Award Agreement (the “Agreement”) is ______ shares (the “Awarded Shares”). The “Date of Grant” of this Award is __________________

2.Subject to Plan. This Agreement is subject to the terms and conditions of the Plan, and the terms of the Plan shall control; provided that, in the event of any conflict among this Agreement, the Plan and the governing Employment Agreement between the Company and the Participant as of the Date of Grant (the “Employment Agreement”), to the extent that the Participant and the Company have entered into such an agreement, the terms of the Employment Agreement shall control. The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. This Agreement is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

3.Vesting. Except as specifically provided in this Agreement and subject to certain restrictions and conditions set forth in the Plan, the Awarded Shares shall vest on the first anniversary of the Date of Grant, provided that the Participant is employed by (or if the Participant is a Consultant or an Outside Trustee, is providing services to) the Company or a Subsidiary on such anniversary.

All Awarded Shares not previously vested shall immediately become fully vested upon (i) the Participant’s death; (ii) the Participant’s Termination of Service as a result of the Participant’s Total and Permanent Disability; (iii) the occurrence of a Change in Control, if and to the extent that this Award is not continued, assumed or converted into a replacement award or awards in connection with such Change in Control or (iv) as specifically provided in the Employment Agreement.

In the event that the Participant’s Termination of Service is due to Retirement and the Participant has provided the Company with at least twelve months’ advance written notice of the Participant’s Retirement date (unless the notice period is waived by the Committee in its sole discretion) and has remained in employment in good standing until the Participant’s Retirement date, then on the Participant’s Retirement date, a pro-rata portion of the Awarded Shares shall vest and become nonforfeitable, calculated by multiplying the number of Awarded Shares by a fraction, the numerator of which is the number of months from the Date of Grant through the date of Termination of Service (rounding any partial month to the next whole month) and the denominator of which is twelve. Any Awarded Shares (and related dividends) that were unvested at the date of Termination of Service and that exceed the pro-rata portion of the Awarded Shares that become vested and nonforfeitable under this paragraph shall be forfeited.

4.Forfeiture of Awarded Shares. Awarded Shares that are not vested in accordance with Section 3 shall be forfeited on the date of the Participant’s Termination of Service. Upon forfeiture, all of the Participant’s rights with respect to the forfeited Awarded Shares shall cease and terminate, without any further obligations on the part of the Company.

5.Restrictions on Awarded Shares. Subject to the provisions of the Plan and the terms of this Agreement, from the Date of Grant until the date the Awarded Shares are vested in accordance with

Section 3 and are no longer subject to forfeiture in accordance with Section 4 (the “Restriction Period”), the Participant shall not be permitted to sell, transfer, pledge, hypothecate, margin, assign or otherwise encumber any of the Awarded Shares, provided that the Participant may designate a beneficiary of all or any portion of the Award on a form reasonably acceptable to the Company or may transfer all or any portion of the Participant’s Award on a form reasonably acceptable to the Company to (i) the spouse (or former spouse), children or grandchildren of the Participant (“Immediate Family Members”), (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, (iii) a partnership in which the only partners are (1) such Immediate Family Members and/or (2) entities which are controlled by Immediate Family Members, (iv) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) or any successor provision, or (v) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided further that (x) there shall be no consideration for any such transfer, and (y) subsequent transfers of transferred Awards shall be prohibited except those by will or the laws of descent and distribution. Except for these limitations, the Committee may, in its sole discretion, remove any or all of the restrictions on such Awarded Shares whenever it may determine that, by reason of changes in applicable laws or changes in circumstances after the date of this Agreement, such action is appropriate.

6.Legend. Awarded Shares electronically registered in a Participant’s name shall note that such shares are Restricted Shares. If certificates for Awarded Shares are issued, the following legend shall be placed on all such certificates:

On the face of the certificate:

“Transfer of these Common Shares is restricted in accordance with conditions printed on the reverse of this certificate.”

On the reverse:

“The Common Shares are subject to and transferable only in accordance with that certain Physicians Realty Trust 2013 Equity Incentive Plan, a copy of which is on file at the principal office of the Company in Milwaukee, Wisconsin. No transfer or pledge of the shares evidenced hereby may be made except in accordance with and subject to the provisions of said Plan and Award Agreement. By acceptance of these Common Shares, any holder, transferee or pledgee hereof agrees to be bound by all of the provisions of said Plan and Award Agreement.”

The following legend shall be inserted on a certificate, if issued, evidencing Common Shares issued under the Plan if the shares were not issued in a transaction registered under the applicable federal and state securities laws:

“Common Shares represented by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company.”

All Awarded Shares owned by the Participant shall be subject to the terms of this Agreement and shall be represented by a certificate or certificates bearing the foregoing legend, as applicable.

    - 2 -

7.Delivery of Certificates; Registration of Shares. The Company shall deliver certificates for the Awarded Shares to the Participant (if requested by the Participant in accordance with Section 6.3(a) of the Plan and the Company has elected, in its sole discretion, to issue certificates (as opposed to electronic book entry form with respect to its Common Shares)) or shall register the Awarded Shares in the Participant’s name, free of restriction under this Agreement, promptly after, and only after, the Restriction Period has expired without forfeiture pursuant to Section 4.

8.Rights of a Shareholder. Except as provided in Section 4 and Section 5 above, the Participant shall have, with respect to the Participant’s Awarded Shares, all of the rights of a shareholder of the Company, including the right to vote the shares, and the right to receive any dividends thereon. Any share dividends paid with respect to Awarded Shares shall at all times be treated as Awarded Shares and shall be subject to all restrictions placed on Awarded Shares; any such share dividends paid with respect to Awarded Shares shall vest as the Awarded Shares become vested.

9.Voting. The Participant, as record holder of the Awarded Shares, has the exclusive right to vote, or consent with respect to, such Awarded Shares until such time as the Awarded Shares are transferred in accordance with this Agreement or are forfeited pursuant to Section 4; provided, however, that this Section 9 shall not create any voting right where the holders of such Awarded Shares otherwise have no such right.

10.Adjustment to Number of Awarded Shares. The number of Awarded Shares shall be subject to adjustment in accordance with Articles 11-13 of the Plan.

11.Specific Performance. The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

12.Participant’s Representations. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the Participant will not acquire any Awarded Shares, and that the Company will not be obligated to issue any Awarded Shares to the Participant hereunder, if the issuance or holding of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. In such case, any determination by the Company shall be final, binding, and conclusive. The rights and obligations of the Company and the rights and obligations of the Participant are subject to all Applicable Laws, rules, and regulations.

13.Investment Representation. Unless the Awarded Shares are issued in a transaction registered under applicable federal and state securities laws, by the Participant’s execution hereof, the Participant represents and warrants to the Company that all Common Shares which may be purchased and or received hereunder will be acquired by the Participant for investment purposes for the Participant’s own account and not with any intent for resale or distribution in violation of federal or state securities laws. Unless the Common Shares are issued to the Participant in a transaction registered under the applicable federal and state securities laws, all certificates issued with respect to the Common Shares shall bear an appropriate restrictive investment legend and shall be held indefinitely, unless they are subsequently registered under the applicable federal and state securities laws or the Participant obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required.

14.Participant’s Acknowledgments. The Participant acknowledges that a copy of the Plan has been made available for the Participant’s review by the Company, and represents that the Participant is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement. The Participant acknowledges and agrees that (i) sales of Common Shares will be subject to the Company's policies regulating trading by Employees, Consultants and Outside Trustees, including any applicable “blackout” or other designated periods in which sales of Common Shares are not permitted, and (ii) Common Shares received hereunder will be subject to any recoupment or “clawback” policy applied with prospective or retroactive effect.

    - 3 -

15.Law Governing. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State ofMaryland (excluding any conflict of laws rule or principle of Maryland law that might refer the governance, construction, or interpretation of this agreement to the laws of another state).

16.No Right to Continue Service or Employment. Nothing herein shall be construed to confer upon the Participant the right to continue in the employ or to provide services to the Company or any Subsidiary, whether as an Employee or as a Consultant or as an Outside Trustee, or interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee, Consultant, or Outside Trustee at any time.

17.Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

18.Covenants and Agreements as Independent Agreements. Each covenant and agreement that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

19.Entire Agreement. This Agreement together with the Plan and the Employment Agreement supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement, the Plan or the Employment Agreement and that any agreement, statement or promise that is not contained in this Agreement, or the Plan or the Employment Agreement shall not be valid or binding or of any force or effect.

20.Parties Bound. The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein. No person shall be permitted to acquire any Awarded Shares without first executing and delivering an agreement in the form satisfactory to the Company making such person or entity subject to the restrictions on transfer contained herein.

21.Modification. No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties. Notwithstanding the preceding sentence, the Company may amend the Plan or this Agreement to the extent permitted by the Plan.

22.Headings. The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

23.Gender and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

24.Notice. Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the

    - 4 -

addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a.Notice to the Company shall be addressed and delivered as follows:

Physicians Realty Trust

309 N. Water Street, Suite 500

Milwaukee, Wisconsin 53202

Attn: Corporate Secretary

Fax: (414) 249-4720

Notice to the Participant shall be addressed and delivered as set forth on the signature page.

25.Tax Requirements. The Participant is hereby advised to consult immediately with the Participant’s own tax advisor regarding the tax consequences of this Agreement, the method and timing for filing an election to include this Agreement in income under Section 83(b) of the Code, and the tax consequences of such election. By execution of this Agreement, the Participant agrees that if the Participant makes such an election, the Participant shall provide the Company with written notice of such election in accordance with the regulations promulgated under Section 83(b) of the Code. Prior to the vesting of the Awarded Shares, the Participant shall have the right to instruct the Company to deduct from all amounts paid in cash or other form in connection with the Plan, any Federal, state, local, or other taxes required by law to be withheld in connection with this Award. If the Participant exercises the Participant’s withholding right pursuant to this Section 25, then the Company may, in its sole discretion, also require the Participant receiving Common Shares issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Award. Such payments shall be required to be made when requested by the Company and may be required to be made prior to the delivery of any certificate representing Common Shares, if such certificate is requested by the Participant in accordance with Section 6.3(a) of the Plan. Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) the actual delivery by the Participant to the Company of Common Shares, other than (A) Restricted Shares, or (B) Common Shares that the Participant has acquired from the Company within six (6) months prior thereto, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) the Company’s withholding of a number of shares to be delivered upon the vesting of this Award, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (iv) any combination of (i), (ii), or (iii); provided, however, if the Participant is a Reporting Person, then the Company will withhold in shares as provided in (iii) hereof, unless otherwise approved in advance by the Committee. If the Participant exercises the Participant’s withholding right pursuant to this Section 25, then the Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.

26.REIT Status. This Agreement shall be interpreted and construed in a manner consistent with the Company’s status as a real estate investment trust.

    - 5 -

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence the Participant’s consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.

COMPANY:

PHYSICIANS REALTY TRUST

By:__________________________________________

Name:________________________________________

Title:_________________________________________

PARTICIPANT

_____________________________________________

Signature

Name:________________________________________

Address:    ________________________________

________________________________

    - 6 -

EX-10.13

Exhibit 10.13

RESTRICTED SHARE UNIT AWARD AGREEMENT

PHYSICIANS REALTY TRUST

2013 EQUITY INCENTIVE PLAN

1.Grant of Award. Pursuant to the Physicians Realty Trust 2013 Equity Incentive Plan (the “Plan”) for Employees, Consultants, and Outside Trustees of Physicians Realty Trust, a Maryland real estate investment trust (the “Company”), the Company grants to

_________________________________

(the “Participant”)

an Award of Restricted Share Units in accordance with Section 6.5 of the Plan. The number of Restricted Share Units awarded under this Restricted Share Unit Award Agreement (the “Agreement”) is _____________________ (__________) units (the “Awarded Units”). Each Restricted Share Unit represents the right to receive one Common Share if the Restricted Share Unit becomes vested and nonforfeitable in accordance with this Agreement. The “Date of Grant” of this Award is _____________. The Participant shall have no rights as a shareholder of the Company, no dividend rights and no voting rights with respect to the Restricted Share Units or the Common Shares underlying the Restricted Share Units unless and until the Restricted Share Units become vested and nonforfeitable and such Common Shares are delivered to the Participant in accordance with Section 8 of this Agreement. The Participant is not required to pay any cash consideration for the grant of the Restricted Share Units.

2.Subject to Plan. This Agreement is subject to the terms and conditions of the Plan, and the terms of the Plan shall control. The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. This Agreement is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

3.Vesting. Subject to the terms and conditions of this Agreement, the Awarded Units shall vest in two annual installments, on the first two anniversaries of the Date of Grant, provided that the Participant is providing services to the Company or a Subsidiary on the relevant anniversary, or at such earlier time as Awarded Units may vest pursuant to Sections 5 or 6 of this Agreement. In the absence of accelerated vesting under Sections 5 or 6, the Awarded Units granted under this Agreement shall vest with respect to one-half of the number of Awarded Units on each of the first and second anniversary of the Date of Grant

4.Termination of Service on the Board.

a.Except as provided in Sections 4(b), 5 or 6 below, if the Participant resigns from service as a member of the Board, decides not to stand for reelection at the expiration of the Participant’s term of office as a member of the Board, is not nominated by the Board to stand for election at the Annual Shareholders’ Meeting at which the Participant’s term of office as a member of the Board expires, or, if nominated, is not reelected, then any Awarded Units held by the Participant which have not yet vested shall not be forfeited but shall remain unvested until such time as such Awarded Units would otherwise have become vested as provided in Section 3 (disregarding, for purposes of this Section 4(a), the requirement of continued service on the Board as specified in Section 3) and shall be issued pursuant to Section 8.

b.Notwithstanding the foregoing, if the Participant is removed from the Board by the shareholders of the Company for cause, or the Participant resigns or decides not to stand for reelection as a member of the Board following delivery of notice to the shareholders of a proposal to remove the Participant for cause (for these purposes, “cause” shall mean, with respect to any particular Participant, conviction of a felony or a final judgment of a court of competent jurisdiction holding that such Participant caused demonstrable, material harm to the Company through bad faith or active and deliberate dishonesty), then all Awarded Units which have not

previously become vested shall immediately be forfeited. Upon forfeiture, all of the Participant’s rights and interest with respect to the forfeited Awarded Units (and related dividend equivalents) shall cease and terminate, without any further obligations on the part of the Company.

5.Effect of Death or Total and Permanent Disability.

a.If the Participant ceases to serve as a member of the Board as a result of the Participant’s death before the Awarded Units granted under this Agreement have become vested, vesting of any unvested Awarded Units granted to the Participant under this Agreement shall be accelerated.

b.If the Participant ceases to serve as a member of the Board as a result of the Participant’s Total and Permanent Disability before the Awarded Units granted under this Agreement have become vested, vesting of any unvested Awarded Units granted to the Participant under this Agreement shall be accelerated.

6.Effect of Change in Control. In the event of a Change in Control, the surviving or successor entity (or its parent corporation) may continue or assume this Award or may convert this Award into a replacement award, which award will remain outstanding and be governed by its terms. If and to the extent that this Award is not continued, assumed or converted into a replacement award or awards in connection with such Change in Control, the vesting of the Awarded Units granted under this Agreement shall be accelerated, any previously unvested Awarded Units shall vest immediately, and the Participant shall become entitled to receive a number of shares of Common Stock equal to the number of previously unvested Awarded Units.

7.Restrictions on Transfer of Awarded Units. Subject to the provisions of the Plan and the terms of this Agreement, the Participant shall not be permitted to sell, transfer, pledge, hypothecate, margin, assign or otherwise encumber any of the Awarded Units, related rights to dividend equivalents or any other rights relating thereto, and the Awarded Units, related rights to dividend equivalents or any other rights relating thereto, shall not be subject to execution, attachment, lien, or similar process; provided, however, the Participant may designate a beneficiary to receive any settlement in respect of the Awarded Units upon the death of the Participant, in the manner and to the extent permitted by the Committee. Any purported transfer or other transaction not permitted under this Section 7 shall be deemed null and void.

8.Timing and Manner of Settlement of Awarded Units.

a.Settlement Timing. Unless and until the Awarded Units become vested and nonforfeitable in accordance with Section 3, 5 or 6 of this Agreement, the Participant will have no right to settlement of any such Awarded Units. Awarded Units will be settled under this Section 8 by the Company delivering to the Participant (or his beneficiary in the event of death) a number of Common Shares equal to the number of Awarded Units that have become vested and nonforfeitable in accordance with Section 3, 5 or 6 of this Agreement and are to be settled at the applicable settlement date. In the case of Awarded Units that become vested and nonforfeitable in accordance with Section 3, 5 or 6 of this Agreement such Awarded Units will be settled at a date that is as prompt as practicable after the vesting date but in no event later than sixty (60) days after the applicable vesting date.

b.Manner of Settlement. The Company may make delivery of Common Shares in settlement of Awarded Units by either delivering certificates representing such Common Shares to the Participant (if requested by the Participant in accordance with Section 6.3(a) of the Plan and the Company has elected, in its sole discretion, to issue certificates (as opposed to electronic book entry form with respect to its Common Shares)) or by registering the Common Shares in the Participant’s name. In no event will the Company issue fractional Common Shares.

c.Effect of Settlement. Neither the Participant nor any of the Participant’s successors, heirs, assigns or personal representatives shall have any further rights or interests in any Awarded Units that have been paid and settled. Although a settlement date or range of dates

    - 2 -

for settlement are specified above, the Company retains discretion to determine the settlement date, and no Participant or beneficiary of a Participant shall have any claim for damages or loss by virtue of the fact that the market price of Common Shares was higher on a given date upon which settlement could have been made as compared to the market price on or after the actual settlement date (any claim relating to settlement will be limited to a claim for delivery of Common Shares and related dividend equivalents).

9.Legend. The following legend shall be inserted on a certificate, if issued, evidencing Common Shares issued under the Plan if the Common Shares were not issued in a transaction registered under the applicable federal and state securities laws:

“Common Shares represented by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company.”

10.Dividend Equivalents. During the period beginning on the Date of Grant and ending on the date that Common Shares are issued in settlement of Awarded Units, the Participant will accrue dividend equivalents equal to the cash dividend or distribution that would have been paid had the Awarded Unit been an issued and outstanding Common Share on the record date for the dividend or distribution. Such accrued dividend equivalents (i) will vest and become payable upon the same terms and at the same time of settlement as the Awarded Units to which they relate; (ii) will be payable with respect to the total number of Awarded Units that become vested and nonforfeitable; and (ii) will be denominated and payable solely in cash.

11.Adjustment to Number of Awarded Units. The number of Awarded Units shall be subject to adjustment in accordance with Articles 11 through 13 of the Plan. Any such adjustment shall be made taking into account any crediting of cash dividend equivalents to the Participant under Section 10 in connection with such transaction or event. Restricted Share Units credited to the Participant as a result of an adjustment shall be subject to the same forfeiture and settlement terms as applied to the related Awarded Units prior to the adjustment.

12.Specific Performance. The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

13.Participant’s Acknowledgments. The Participant acknowledges that a copy of the Plan has been made available for his review by the Company, and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement. The Participant acknowledges and agrees that (i) sales of Common Shares delivered in settlement of Awarded Units will be subject to the Company’s policies regulating trading by Outside Trustees, including any applicable “blackout” or other designated periods in which sales of Common Shares are not permitted, and (ii) Common Shares delivered in settlement of Awarded Units will be subject to any recoupment or “clawback” policy applied with prospective or retroactive effect.

14.Law Governing. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State ofMaryland (excluding any conflict of laws rule or principle of Maryland law that might refer the governance, construction, or interpretation of this agreement to the laws of another state).

    - 3 -

15.No Right to Continue Service. Nothing herein shall be construed to confer upon the Participant the right to continue to provide services to the Company or any Subsidiary as an Outside Trustee, or interfere with or restrict in any way the right of the Company to remove the Participant as an Outside Trustee at any time.

16.Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

17.Covenants and Agreements as Independent Agreements. Each covenant and agreement that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

18.Entire Agreement. This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

19.Parties Bound. The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.

20.Modification. No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties. Notwithstanding the preceding sentence, the Company may amend the Plan or this Agreement to the extent permitted by the Plan.

21.Headings. The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

22.Gender and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

23.Notice. Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a.Notice to the Company shall be addressed and delivered as follows:

Physicians Realty Trust

309 N. Water Street, Suite 500

Milwaukee, Wisconsin 53202

Attn: Corporate Secretary

Fax: (414) 249-4720

    - 4 -

b.Notice to the Participant shall be addressed and delivered as set forth on the signature page.

24.Tax Requirements. The Participant is hereby advised to consult immediately with his or her own tax advisor regarding the tax consequences of this Agreement. The Company shall issue to the Internal Revenue Service and to the Participant a Form 1099 and any other reporting form that may be required to report the amount of tax which the Participant has incurred under applicable federal, state and local tax laws. The Company will not withhold such taxes, and the Participant acknowledges that the Participant may need to adjust his or her estimated tax payments to take the additional taxable income into account.

25.REIT Status. This Agreement shall be interpreted and construed in a manner consistent with the Company’s status as a real estate investment trust.

26.Unfunded Plan. The Participant acknowledges and agrees that any rights of the Participant to the Participant’s Awarded Units and related dividend equivalents and any other related rights shall constitute bookkeeping entries on the books of the Company and shall not create in the Participant any right to or claim against any specific assets of the Company or any Subsidiary, nor result in the creation of any trust or escrow account for the Participant. With respect to the Participant’s entitlement to any payment hereunder, the Participant shall be a general creditor of the Company.

27.Code Section 409A. Payments made pursuant to this Agreement are intended to be exempt from, or to otherwise comply with, Section 409A of the Code and the Treasury regulations and guidance issued thereunder (collectively, “Code Section 409A”). Accordingly, other provisions of the Plan or this Agreement notwithstanding, the provisions of this Section 27 will apply in order that the Awarded Units, and related dividend equivalents and any other related rights, will be exempt from or otherwise comply with Code Section 409A. In addition, the Company and the Committee reserve the right, to the extent the Company or the Committee deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this Agreement to ensure that all Awarded Units, and related dividend equivalents and any other related rights, are exempt from or otherwise comply, and in operation comply, with Code Section 409A (including, without limitation, the avoidance of penalties thereunder). Other provisions of the Plan and this Agreement notwithstanding, the Company makes no representations that the Awarded Units, and related dividend equivalents and any other related rights, will be exempt from or avoid any penalties that may apply under Code Section 409A, makes no undertaking to preclude Code Section 409A from applying to the Awarded Units and related dividend equivalents and any other related rights, and will not indemnify or provide a gross up payment to a Participant (or his beneficiary) for any taxes, interest or penalties imposed under Code Section 409A. The settlement of Awarded Units that constitute nonqualified deferred compensation within the meaning of Code Section 409A (“409A Awarded Units”) may not be accelerated by the Company except to the extent permitted under Code Section 409A. The Company may, however, accelerate the vesting of 409A Awarded Units, without changing the settlement terms of such 409A Awarded Units. In the case of any settlement of 409A Awarded Units during a specified period following any date triggering a right to settlement, the Participant shall have no influence on any determination as to the tax year in which the settlement will be made. Notwithstanding any other provision in this Agreement, if the Participant is a “specified employee” for purposes of Code Section 409A as of the date of the Participant’s Termination of Service, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Code Section 409A, (ii) is payable upon the Participant’s Termination of Service for a reason other than death, and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of the Participant’s Termination of Service, such payment shall be delayed and paid to the Participant on the day that is six months and one day following the Participant’s Termination of Service or, if earlier, within ninety (90) days following the Participant’s death.

    - 5 -

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his or her consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.

COMPANY:

PHYSICIANS REALTY TRUST

By:__________________________________________

Name:________________________________________

Title:_________________________________________

PARTICIPANT

_____________________________________________

Signature

Name:________________________________________

Address:    ________________________________

________________________________

    - 6 -

EX-10.14

Exhibit 10.14

RESTRICTED SHARE UNIT AWARD AGREEMENT

PHYSICIANS REALTY TRUST

2013 EQUITY INCENTIVE PLAN

1.Grant of Award. Pursuant to the Physicians Realty Trust 2013 Equity Incentive Plan, as amended and restated (the “Plan”) for Employees, Consultants, and Outside Trustees of Physicians Realty Trust, a Maryland real estate investment trust (the “Company”), the Company grants to

_________________________________

(the “Participant”)

an Award of Restricted Share Units in accordance with Section 6.5 of the Plan. The number of Restricted Share Units awarded under this Restricted Share Unit Award Agreement (the “Agreement”) is _____________________ (__________) units (the “Awarded Units”). Each Restricted Share Unit represents the right to receive one Common Share if the Restricted Share Unit becomes vested and nonforfeitable in accordance with this Agreement. The “Date of Grant” of this Award is __________________. The Participant shall have no rights as a shareholder of the Company, no dividend rights and no voting rights with respect to the Restricted Share Units or the Common Shares underlying the Restricted Share Units unless and until the Restricted Share Units become vested and nonforfeitable and such Common Shares are delivered to the Participant in accordance with Section 8 of this Agreement. The Participant is not required to pay any cash consideration for the grant of the Restricted Share Units.

2.Subject to Plan. This Agreement is subject to the terms and conditions of the Plan, and the terms of the Plan shall control. The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. This Agreement is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

3.Vesting. Subject to the terms and conditions of this Agreement, the Awarded Units shall vest in full on __________________ (the “Scheduled Vesting Date”), provided that the Participant continues to provide services to the Company or a Subsidiary from the Date of Grant until the Scheduled Vesting Date, or at such earlier time as Awarded Units may vest pursuant to Sections 4(a), 5 or 6 of this Agreement.

4.Termination of Service on the Board.

a.Except as provided in Sections 4(b), 5 or 6 below, if prior to the Scheduled Vesting Date, the Participant resigns from service as a member of the Board, decides not to stand for reelection at the expiration of the Participant’s term of office as a member of the Board, is not nominated by the Board to stand for election at the Annual Shareholders’ Meeting at which the Participant’s term of office as a member of the Board expires, or, if nominated, is not reelected, then any Awarded Units held by the Participant which have not yet vested shall not be forfeited but shall remain unvested until the Scheduled Vesting Date, and the Participant shall vest, on the Scheduled Vesting Date, in that number of units equal to the Awarded Units multiplied by a fraction, the numerator of which is the number of full months from __________________ to the date of the Participant’s Termination of Service (rounding any partial month to the next whole month) and the denominator of which is 12. Any Restricted Stock Units that are unvested at the Scheduled Vesting Date and that exceed the pro rata portion of the Awarded Units that become vested under this Section 4(a) shall be forfeited. Upon forfeiture, all of the Participant’s rights and interest with respect to the forfeited Awarded Units (and related dividend equivalents) shall cease and terminate, without any further obligations on the part of the Company.

b.Notwithstanding the foregoing, if prior to the Scheduled Vesting Date, the Participant is removed from the Board by the shareholders of the Company for cause, or the

Participant resigns or decides not to stand for reelection as a member of the Board following delivery of notice to the shareholders of a proposal to remove the Participant for cause (for these purposes, “cause” shall mean, with respect to any particular Participant, conviction of a felony or a final judgment of a court of competent jurisdiction holding that such Participant caused demonstrable, material harm to the Company through bad faith or active and deliberate dishonesty), then all Awarded Units shall immediately be forfeited. Upon forfeiture, all of the Participant’s rights and interest with respect to the forfeited Awarded Units (and related dividend equivalents) shall cease and terminate, without any further obligations on the part of the Company.

5.Effect of Death or Total and Permanent Disability.

a.If the Participant ceases to serve as a member of the Board as a result of the Participant’s death before the Scheduled Vesting Date, vesting of any unvested Awarded Units granted to the Participant under this Agreement shall be accelerated.

b.If the Participant ceases to serve as a member of the Board as a result of the Participant’s Total and Permanent Disability before the Scheduled Vesting Date, vesting of any unvested Awarded Units granted to the Participant under this Agreement shall be accelerated.

6.Effect of Change in Control. In the event of a Change in Control, the surviving or successor entity (or its parent corporation) may continue or assume this Award or may convert this Award into a replacement award, which award will remain outstanding and be governed by its terms. If and to the extent that this Award is not continued, assumed or converted into a replacement award or awards in connection with such Change in Control, the vesting of the Awarded Units granted under this Agreement shall be accelerated, and the Participant shall become entitled to receive a number of shares of Common Stock equal to the number of previously unvested Awarded Units.

7.Restrictions on Transfer of Awarded Units. Subject to the provisions of the Plan and the terms of this Agreement, the Participant shall not be permitted to sell, transfer, pledge, hypothecate, margin, assign or otherwise encumber any of the Awarded Units, related rights to dividend equivalents or any other rights relating thereto, and the Awarded Units, related rights to dividend equivalents or any other rights relating thereto, shall not be subject to execution, attachment, lien, or similar process; provided, however, the Participant may designate a beneficiary to receive any settlement in respect of the Awarded Units upon the death of the Participant, in the manner and to the extent permitted by the Committee. Any purported transfer or other transaction not permitted under this Section 7 shall be deemed null and void.

8.Timing and Manner of Settlement of Awarded Units.

a.Settlement Timing. Unless and until the Awarded Units become vested and nonforfeitable in accordance with Section 3, 4, 5 or 6 of this Agreement, the Participant will have no right to settlement of any such Awarded Units. Awarded Units will be settled under this Section 8 by the Company delivering to the Participant (or his beneficiary in the event of death) a number of Common Shares equal to the number of Awarded Units that have become vested and nonforfeitable in accordance with Section 3, 4, 5 or 6 of this Agreement and are to be settled at the applicable settlement date. In the case of Awarded Units that become vested and nonforfeitable in accordance with Section 3, 4, 5 or 6 of this Agreement such Awarded Units will be settled at a date that is as prompt as practicable after the vesting date but in no event later than sixty (60) days after the applicable vesting date.

b.Manner of Settlement. The Company may make delivery of Common Shares in settlement of Awarded Units by either delivering certificates representing such Common Shares to the Participant (if requested by the Participant in accordance with Section 6.3(a) of the Plan and the Company has elected, in its sole discretion, to issue certificates (as opposed to electronic book entry form with respect to its Common Shares)) or by registering the Common Shares in the Participant’s name. In no event will the Company issue fractional Common Shares.

    - 2 -

c.Effect of Settlement. Neither the Participant nor any of the Participant’s successors, heirs, assigns or personal representatives shall have any further rights or interests in any Awarded Units that have been paid and settled. Although a settlement date or range of dates for settlement are specified above, the Company retains discretion to determine the settlement date, and no Participant or beneficiary of a Participant shall have any claim for damages or loss by virtue of the fact that the market price of Common Shares was higher on a given date upon which settlement could have been made as compared to the market price on or after the actual settlement date (any claim relating to settlement will be limited to a claim for delivery of Common Shares and related dividend equivalents).

9.Legend. The following legend shall be inserted on a certificate, if issued, evidencing Common Shares issued under the Plan if the Common Shares were not issued in a transaction registered under the applicable federal and state securities laws:

“Common Shares represented by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company.”

10.Dividend Equivalents. During the period beginning on the Date of Grant and ending on the date that Common Shares are issued in settlement of Awarded Units, the Participant will accrue dividend equivalents equal to the cash dividend or distribution that would have been paid had the Awarded Unit been an issued and outstanding Common Share on the record date for the dividend or distribution. Such accrued dividend equivalents (i) will vest and become payable upon the same terms and at the same time of settlement as the Awarded Units to which they relate; (ii) will be payable with respect to the total number of Awarded Units that become vested and nonforfeitable; and (ii) will be denominated and payable solely in cash.

11.Adjustment to Number of Awarded Units. The number of Awarded Units shall be subject to adjustment in accordance with Articles 11 through 13 of the Plan. Any such adjustment shall be made taking into account any crediting of cash dividend equivalents to the Participant under Section 10 in connection with such transaction or event. Restricted Share Units credited to the Participant as a result of an adjustment shall be subject to the same forfeiture and settlement terms as applied to the related Awarded Units prior to the adjustment.

12.Specific Performance. The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

13.Participant’s Acknowledgments. The Participant acknowledges that a copy of the Plan has been made available for his review by the Company, and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement. The Participant acknowledges and agrees that (i) sales of Common Shares delivered in settlement of Awarded Units will be subject to the Company’s policies regulating trading by Outside Trustees, including any applicable “blackout” or other designated periods in which sales of Common Shares are not permitted, and (ii) Common Shares delivered in settlement of Awarded Units will be subject to any recoupment or “clawback” policy applied with prospective or retroactive effect.

14.Law Governing. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State ofMaryland (excluding any conflict of laws rule or principle of

    - 3 -

Maryland law that might refer the governance, construction, or interpretation of this agreement to the laws of another state).

15.No Right to Continue Service. Nothing herein shall be construed to confer upon the Participant the right to continue to provide services to the Company or any Subsidiary as an Outside Trustee, or interfere with or restrict in any way the right of the Company to remove the Participant as an Outside Trustee at any time.

16.Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

17.Covenants and Agreements as Independent Agreements. Each covenant and agreement that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

18.Entire Agreement. This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

19.Parties Bound. The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.

20.Modification. No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties. Notwithstanding the preceding sentence, the Company may amend the Plan or this Agreement to the extent permitted by the Plan.

21.Headings. The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

22.Gender and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

23.Notice. Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a.Notice to the Company shall be addressed and delivered as follows:

Physicians Realty Trust

309 N. Water Street, Suite 500

    - 4 -

Milwaukee, Wisconsin 53202

Attn: Corporate Secretary

Fax: (414) 249-4720

b.Notice to the Participant shall be addressed and delivered as set forth on the signature page.

24.Tax Requirements. The Participant is hereby advised to consult immediately with his or her own tax advisor regarding the tax consequences of this Agreement. The Company shall issue to the Internal Revenue Service and to the Participant a Form 1099 and any other reporting form that may be required to report the amount of tax which the Participant has incurred under applicable federal, state and local tax laws. The Company will not withhold such taxes, and the Participant acknowledges that the Participant may need to adjust his or her estimated tax payments to take the additional taxable income into account.

25.REIT Status. This Agreement shall be interpreted and construed in a manner consistent with the Company’s status as a real estate investment trust.

26.Unfunded Plan. The Participant acknowledges and agrees that any rights of the Participant to the Participant’s Awarded Units and related dividend equivalents and any other related rights shall constitute bookkeeping entries on the books of the Company and shall not create in the Participant any right to or claim against any specific assets of the Company or any Subsidiary, nor result in the creation of any trust or escrow account for the Participant. With respect to the Participant’s entitlement to any payment hereunder, the Participant shall be a general creditor of the Company.

27.Code Section 409A. Payments made pursuant to this Agreement are intended to be exempt from, or to otherwise comply with, Section 409A of the Code and the Treasury regulations and guidance issued thereunder (collectively, “Code Section 409A”). Accordingly, other provisions of the Plan or this Agreement notwithstanding, the provisions of this Section 27 will apply in order that the Awarded Units, and related dividend equivalents and any other related rights, will be exempt from or otherwise comply with Code Section 409A. In addition, the Company and the Committee reserve the right, to the extent the Company or the Committee deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this Agreement to ensure that all Awarded Units, and related dividend equivalents and any other related rights, are exempt from or otherwise comply, and in operation comply, with Code Section 409A (including, without limitation, the avoidance of penalties thereunder). Other provisions of the Plan and this Agreement notwithstanding, the Company makes no representations that the Awarded Units, and related dividend equivalents and any other related rights, will be exempt from or avoid any penalties that may apply under Code Section 409A, makes no undertaking to preclude Code Section 409A from applying to the Awarded Units and related dividend equivalents and any other related rights, and will not indemnify or provide a gross up payment to a Participant (or his beneficiary) for any taxes, interest or penalties imposed under Code Section 409A. The settlement of Awarded Units that constitute nonqualified deferred compensation within the meaning of Code Section 409A (“409A Awarded Units”) may not be accelerated by the Company except to the extent permitted under Code Section 409A. The Company may, however, accelerate the vesting of 409A Awarded Units, without changing the settlement terms of such 409A Awarded Units. In the case of any settlement of 409A Awarded Units during a specified period following any date triggering a right to settlement, the Participant shall have no influence on any determination as to the tax year in which the settlement will be made. Notwithstanding any other provision in this Agreement, if the Participant is a “specified employee” for purposes of Code Section 409A as of the date of the Participant’s Termination of Service, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Code Section 409A, (ii) is payable upon the Participant’s Termination of Service for a reason other than death, and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of the Participant’s Termination of Service, such payment shall be delayed and paid to the Participant on the day that is six months and one day following the Participant’s Termination of Service or, if earlier, within ninety (90) days following the Participant’s death.

    - 5 -

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his or her consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.

COMPANY:

PHYSICIANS REALTY TRUST

By:__________________________________________

Name:________________________________________

Title:_________________________________________

PARTICIPANT

_____________________________________________

Signature

Name:________________________________________

Address:    ________________________________

________________________________

    - 6 -

EX-10.15

Exhibit 10.15

RESTRICTED SHARE AWARD AGREEMENT

PHYSICIANS REALTY TRUST

AMENDED AND RESTATED 2013 EQUITY INCENTIVE PLAN

1. Grant of Award. Pursuant to the Physicians Realty Trust Amended and Restated 2013 Equity Incentive Plan, as amended (the “Plan”) for Employees, Consultants, and Outside Trustees of Physicians Realty Trust, a Maryland real estate investment trust (the “Company”), the Company grants to

__________________

(the “Participant”)

an Award of Restricted Shares in accordance with Section 6.3 of the Plan. The number of Common Shares awarded under this Restricted Share Award Agreement (the “Agreement”) in lieu of the portion of the Participant’s base salary the Participant has elected to receive in stock pursuant to the election deferral form provided by the Participant to the Company (the “Election Deferral Form”) is ___ shares (the “Awarded Shares”), of which ___ of the Awarded Shares are referred to herein as the “Premium Shares.” The “Date of Grant” of this Award is January 1, ___.

2. Subject to Plan. This Agreement is subject to the terms and conditions of the Plan, and the terms of the Plan shall control; provided that in the event of any conflict between this Agreement, the Plan and an Employment Agreement in effect between the Company and the Participant (the “Employment Agreement”), the terms of the Employment Agreement shall control to the extent that it results in accelerated vesting of the Awarded Shares (including the Premium Shares), and it shall not result in a delay of any vesting or any non-vesting of any Awarded Shares (including any Premium Shares) that otherwise would occur under the terms of the vesting provisions contained in Sections 3 and 4 of this Agreement. The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. This Agreement is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

3. Vesting. Except as specifically provided in this Agreement and subject to certain restrictions and conditions set forth in the Plan, the Awarded Shares shall vest as follows:

•The Awarded Shares (other than the Premium Shares) shall cliff vest on January 1, ___, provided that the Participant is an Employee of the Company or a Subsidiary on that date; and

•The Premium Shares shall cliff vest on January 1, ___, provided that the Participant is an Employee of the Company or a Subsidiary on that date.

All Awarded Shares (including the Premium Shares) not previously vested shall immediately become fully vested upon (i) the Participant’s death; (ii) the Participant’s Termination of Service due to Total and Permanent Disability; (iii) involuntary Termination of Service by the Company without “Cause” (as such term is defined in the Participant’s Employment Agreement); (iv) voluntary Termination of Service by the Participant for “Good Reason” (as such term is defined in the Participant’s Employment Agreement); (v) the occurrence of a Change in Control, if and to the extent that this Award is not continued, assumed or converted into a replacement award or awards in connection with such Change in Control; or (vi) as specifically provided in the Participant’s Employment Agreement.

In the event that the Participant’s Termination of Service is due to Retirement and the Participant has provided the Company with at least twelve months’ advance written notice of the Participant’s Retirement date (unless the notice period is waived by the Committee in its sole discretion) and has remained in employment in good standing until the Participant’s Retirement date, then on the Participant’s Retirement date, a pro-rata portion of the Awarded Shares (including the Premium Shares) shall vest and become nonforfeitable, calculated by (A) multiplying the number of Awarded Shares by a fraction, the numerator of which is the number of pay periods from the Date of Grant through the date of Termination of Service (rounding any partial pay period to the next whole pay period) and the denominator of which is 24, and (B) multiplying the number of Premium Shares by a fraction, the numerator of which is the number of pay periods from the Date of Grant through the date of Termination

of Service (rounding any partial pay period to the next whole pay period) and the denominator of which is 48. Any Awarded Shares that were unvested at the date of Termination of Service and that exceed the pro-rata portion of the Awarded Shares that become vested and nonforfeitable under this paragraph shall be forfeited.

The Participant shall be fully vested in any dividends or distributions with respect to the Participant’s Awarded Shares (including the Premium Shares).

4. Forfeiture of Awarded Shares. Except as otherwise provided in the Employment Agreement (if applicable), Awarded Shares that are not vested in accordance with Section 3 shall be forfeited on the date of the Participant’s Termination of Service. Upon forfeiture, all of the Participant’s rights with respect to the forfeited Awarded Shares shall cease and terminate, without any further obligations on the part of the Company.

5. Restrictions on Awarded Shares. Subject to the provisions of the Plan and the terms of this Agreement, from the Date of Grant until the date the Awarded Shares are vested in accordance with Section 3 and are no longer subject to forfeiture in accordance with Section 4 (the “Restriction Period”), the Participant shall not be permitted to sell, transfer, pledge, hypothecate, margin, assign or otherwise encumber any of the Awarded Shares. Except for these limitations, the Committee may, in its sole discretion, remove any or all of the restrictions on such Awarded Shares whenever it may determine that, by reason of changes in applicable laws or changes in circumstances after the date of this Agreement, such action is appropriate.

6. Legend. Awarded Shares electronically registered in a Participant’s name shall note that such shares are Restricted Shares. If certificates for Awarded Shares are issued, the following legend shall be placed on all such certificates:

On the face of the certificate:

“Transfer of these Common Shares is restricted in accordance with conditions printed on the reverse of this certificate.”

On the reverse:

“The Common Shares are subject to and transferable only in accordance with that certain Physicians Realty Trust 2013 Equity Incentive Plan, as amended, a copy of which is on file at the principal office of the Company in Milwaukee, Wisconsin. No transfer or pledge of the shares evidenced hereby may be made except in accordance with and subject to the provisions of said Plan and Award Agreement. By acceptance of these Common Shares, any holder, transferee or pledgee hereof agrees to be bound by all of the provisions of said Plan and Award Agreement.”

The following legend shall be inserted on a certificate, if issued, evidencing Common Shares issued under the Plan if the shares were not issued in a transaction registered under the applicable federal and state securities laws:

“Common Shares represented by this certificate have been acquired by the holder for investment and not for resale, transfer or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company.”

All Awarded Shares (including the Premium Shares) owned by the Participant shall be subject to the terms of this Agreement and shall be represented by a certificate or certificates bearing the foregoing legend, as applicable.

7. Delivery of Certificates; Registration of Shares. The Company shall deliver certificates for the Awarded Shares to the Participant (if requested by the Participant in accordance with Section 6.3(a) of the

Plan and the Company has elected, in its sole discretion, to issue certificates (as opposed to electronic book entry form with respect to its Common Shares)) or shall register the Awarded Shares in the Participant’s name, free of restriction under this Agreement, promptly after, and only after, the Restriction Period has expired without forfeiture pursuant to Section 4.

8. Rights of a Shareholder. Except as provided in Section 4 and Section 5 above, the Participant shall have, with respect to the Participant’s Awarded Shares, all of the rights of a shareholder of the Company, including the right to vote the shares, and the right to receive any dividends thereon. Any share dividends paid with respect to Awarded Shares shall at all times be treated as Awarded Shares and shall be subject to all restrictions placed on the applicable Awarded Shares; any such share dividends paid with respect to Awarded Shares shall vest as the applicable Awarded Shares become vested.

9. Voting. The Participant, as record holder of the Awarded Shares, has the exclusive right to vote, or consent with respect to, such Awarded Shares until such time as the Awarded Shares are transferred in accordance with this Agreement or are forfeited pursuant to Section 4; provided, however, that this Section 9 shall not create any voting right where the holders of such Awarded Shares otherwise have no such right.

10. Adjustment to Number of Awarded Shares. The number of Awarded Shares shall be subject to adjustment in accordance with Articles 11-13 of the Plan.

11. Specific Performance. The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

12. Participant’s Representations. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the Participant will not acquire any Awarded Shares, and that the Company will not be obligated to issue any Awarded Shares to the Participant hereunder, if the issuance or holding of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. In such case, any determination by the Company shall be final, binding, and conclusive. The rights and obligations of the Company and the rights and obligations of the Participant are subject to all Applicable Laws, rules, and regulations.

13. Investment Representation. Unless the Awarded Shares are issued in a transaction registered under applicable federal and state securities laws, by the Participant’s execution hereof, the Participant represents and warrants to the Company that all Common Shares which may be purchased and or received hereunder will be acquired by the Participant for investment purposes for the Participant’s own account and not with any intent for resale or distribution in violation of federal or state securities laws. Unless the Common Shares are issued to the Participant or her in a transaction registered under the applicable federal and state securities laws, all certificates issued with respect to the Common Shares shall bear an appropriate restrictive investment legend and shall be held indefinitely, unless they are subsequently registered under the applicable federal and state securities laws or the Participant obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required.

14. Participant’s Acknowledgments. The Participant acknowledges that a copy of the Plan has been made available for the Participant’s review by the Company, and represents that the Participant is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement. The Participant acknowledges and agrees that (i) sales of Common Shares will be subject to the Company’s policies regulating trading by Employees, Consultants and Outside Trustees, including any applicable “blackout” or other designated periods in which sales of Common Shares are not permitted, and (ii) Common Shares received hereunder will be subject to any recoupment or “clawback” policy applied with prospective or retroactive effect.

15. Law Governing. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Maryland (excluding any conflict of laws rule or principle of Maryland law

that might refer the governance, construction, or interpretation of this agreement to the laws of another state).

16. No Right to Continue Service or Employment. Nothing herein shall be construed to confer upon the Participant the right to continue in the employ of the Company or any Subsidiary, or interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee at any time.

17. Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

18. Covenants and Agreements as Independent Agreements. Each covenant and agreement that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

19. Entire Agreement. This Agreement, together with the Plan and the Employment Agreement (if applicable), supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement, the Participant’s Employment Agreement (if applicable) and the Plan. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement, the Participant’s Employment Agreement (if applicable), or the Plan and that any agreement, statement or promise that is not contained in this Agreement, the Participant’s Employment Agreement (if applicable) or the Plan shall not be valid or binding or of any force or effect.

20. Parties Bound. The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein. No person shall be permitted to acquire any Awarded Shares without first executing and delivering an agreement in the form satisfactory to the Company making such person or entity subject to the restrictions on transfer contained herein.

21. Modification. No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties. Notwithstanding the preceding sentence, the Company may amend the Plan or this Agreement to the extent permitted by the Plan.

22. Headings. The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

23. Gender and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

24. Notice. Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

a. Notice to the Company shall be addressed and delivered as follows:

Physicians Realty Trust

309 North Water Street, Suite 500

Milwaukee, Wisconsin 53202

Attn: Corporate Secretary

Fax: (414) 978-6550

Notice to the Participant shall be addressed and delivered as set forth on the signature page.

25. Tax Requirements. The Participant is hereby advised to consult immediately with the Participant’s own tax advisor regarding the tax consequences of this Agreement, the method and timing for filing an election to include this Agreement in income under Section 83(b) of the Code, and the tax consequences of such election. By execution of this Agreement, the Participant agrees that if the Participant makes such an election, the Participant shall provide the Company with written notice of such election in accordance with the regulations promulgated under Section 83(b) of the Code. The Company or, if applicable, any Subsidiary (for purposes of this Section 25, the term “Company” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any Federal, state, local, or other taxes required by law to be withheld in connection with this Award. The Company may, in its sole discretion, also require the Participant receiving Common Shares issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Award. Such payments shall be required to be made when requested by the Company and may be required to be made prior to the delivery of any certificate representing Common Shares, if such certificate is requested by the Participant in accordance with Section 6.3(a) of the Plan. Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the Participant to the Company of Common Shares, other than (A) Restricted Shares, or (B) Common Shares that the Participant has acquired from the Company within six (6) months prior thereto, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the vesting of this Award, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (iv) any combination of (i), (ii), or (iii); provided, however, if the Participant is a Reporting Person, then the Company will withhold in shares as provided in (iii) hereof, unless otherwise approved in advance by the Committee. The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.

26. Release. The Participant acknowledges and agrees that the Participant has willingly and voluntarily executed the Participant’s Election Deferral Form and this Agreement in exchange for the Awarded Shares. Subject to compliance with the terms of the Participant’s Election Deferral Form and this Agreement, the Participant agrees to release, discharge and hold the Company and its Subsidiaries and affiliates harmless from any claim by or on behalf of the Participant in connection with the Election Deferral Form and this Agreement.

27. REIT Status. This Agreement shall be interpreted and construed in a manner consistent with the Company’s status as a real estate investment trust.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence the Participant’s consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.

	COMPANY:
	PHYSICIANS REALTY TRUST
By:
Name:
Title:
	PARTICIPANT:
		Signature
Name:
Address:

EX-22.1

Exhibit 22.1

LIST OF SUBSIDIARY ISSUERS OF GUARANTEED SECURITIES

As of September 30, 2023, Physicians Realty Trust is the guarantor of the outstanding guaranteed debt securities of its subsidiaries, as listed below.

Debt Instrument	Issuer
4.300% Senior Notes due 2027	Physicians Realty L.P.
3.950% Senior Notes due 2028	Physicians Realty L.P.
2.625% Senior Notes due 2031	Physicians Realty L.P.

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John T. Thomas, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Physicians Realty Trust for the three month period ended September 30, 2023;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2023	/s/ John T. Thomas
	John T. Thomas
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey N. Theiler, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Physicians Realty Trust for the three month period ended September 30, 2023;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2023	/s/ Jeffrey N. Theiler
	Jeffrey N. Theiler
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, for the purposes of 18 U.S.C. Section 1350, in his capacity as an officer of Physicians Realty Trust (the “Company”), that, to such person’s knowledge:

a.    the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

b.    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 30, 2023

/s/ John T. Thomas

John T. Thomas

President and Chief Executive Officer

/s/ Jeffrey N. Theiler

Jeffrey N. Theiler

Executive Vice President and Chief Financial Officer

This certification is not deemed to be “filed” for purposes of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability under the Exchange Act. This certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Oct. 27, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-36007
Entity Registrant Name	PHYSICIANS REALTY TRUST
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	46-2519850
Entity Address, Address Line One	309 N. Water Street, Suite 500
Entity Address, City or Town	Milwaukee,
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53202
City Area Code	414
Local Phone Number	367-5600
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	DOC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		238,487,448
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001574540
Current Fiscal Year End Date	--12-31

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Investment properties:
Land and improvements	$ 249,468	$ 241,559
Building and improvements	4,703,606	4,659,780
Construction in progress	41,722	18,497
Tenant improvements	95,447	88,640
Acquired lease intangibles	509,468	505,335
Gross real estate property	5,599,711	5,513,811
Accumulated depreciation	(1,140,208)	(996,888)
Net real estate property	4,459,503	4,516,923
Right-of-use lease assets, net	227,967	231,225
Real estate loans receivable, net	79,883	104,973
Investments in unconsolidated entities	72,069	77,716
Net real estate investments	4,839,422	4,930,837
Cash and cash equivalents	195,772	7,730
Tenant receivables, net	11,131	11,503
Other assets	166,142	146,807
Total assets	5,212,467	5,096,877
Liabilities:
Credit facility	393,090	188,328
Notes payable	1,451,536	1,465,437
Mortgage debt	127,630	164,352
Accounts payable	4,933	4,391
Dividends and distributions payable	60,928	60,148
Accrued expenses and other liabilities	95,637	87,720
Lease liabilities	104,802	105,011
Acquired lease intangibles, net	23,170	24,381
Total liabilities	2,261,726	2,099,768
Redeemable noncontrolling interest - Series A Preferred Units and partially owned properties	3,066	3,258
Equity:
Common shares, $0.01 par value, 500,000,000 common shares authorized, 238,482,769 and 233,292,030 common shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	2,385	2,333
Additional paid-in capital	3,817,545	3,743,876
Accumulated deficit	(1,012,869)	(881,672)
Accumulated other comprehensive income	15,216	5,183
Total shareholders’ equity	2,822,277	2,869,720
Noncontrolling interests:
Operating Partnership	116,079	123,015
Partially owned properties	9,319	1,116
Total noncontrolling interests	125,398	124,131
Total equity	2,947,675	2,993,851
Total liabilities and equity	$ 5,212,467	$ 5,096,877

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares outstanding (in shares)	238,482,769	233,292,030
Common stock, shares issued (in shares)	238,482,769	233,292,030

XML

Consolidated Statements of Income - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Rental and related revenues		$ 134,520	$ 128,636	$ 397,096	$ 385,755
Interest income on real estate loans and other		4,027	2,877	10,895	8,315
Total revenues		138,547	131,513	407,991	394,070
Expenses:
Interest expense		20,050	18,299	59,837	52,356
General and administrative		9,771	10,079	31,133	30,400
Operating expenses		47,625	43,647	138,094	128,080
Depreciation and amortization		47,932	47,040	143,555	142,002
Total expenses		125,378	119,065	372,619	352,838
Income before equity in (loss) gain of unconsolidated entities and gain on sale of investment properties, net:		13,169	12,448	35,372	41,232
Equity in (loss) gain of unconsolidated entities		(278)	(62)	1,260	(452)
Gain on sale of investment properties, net		0	53,894	13	57,375
Net income		12,891	66,280	36,645	98,155
Net income attributable to noncontrolling interests:
Operating Partnership		(505)	(3,252)	(1,443)	(4,830)
Partially owned properties	[1]	(51)	(70)	(121)	(384)
Net income attributable to common shareholders		$ 12,335	$ 62,958	$ 35,081	$ 92,941
Net income per share:
Basic (in dollars per share)		$ 0.05	$ 0.28	$ 0.15	$ 0.41
Diluted (in dollars per share)		$ 0.05	$ 0.28	$ 0.15	$ 0.41
Weighted average common shares:
Weighted average common shares - basic (in shares)		238,480,299	226,529,041	238,124,981	225,743,856
Weighted average common shares - diluted (in shares)		249,445,312	239,898,462	249,226,913	239,145,383
Dividends and distributions declared per common share (in usd per share)		$ 0.23	$ 0.23	$ 0.69	$ 0.69

[1] Includes amounts attributable to redeemable noncontrolling interests.

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 12,891	$ 66,280	$ 36,645	$ 98,155
Other comprehensive income:
Change in fair value of interest rate swap agreements, net	7,697	1,753	11,796	6,215
Reclassification of accumulated gains on interest rate swap to earnings	(1,763)	0	(1,763)	0
Total other comprehensive income	5,934	1,753	10,033	6,215
Comprehensive income	18,825	68,033	46,678	104,370
Comprehensive income attributable to noncontrolling interests - Operating Partnership	(739)	(3,336)	(1,839)	(5,137)
Comprehensive income attributable to noncontrolling interests - partially owned properties	(51)	(70)	(121)	(384)
Comprehensive income attributable to common shareholders	$ 18,035	$ 64,627	$ 44,718	$ 98,849

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Consolidated Statement of Equity - USD ($) $ in Thousands	Total	Total Shareholders’  Equity	Par Value	Additional Paid in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total Noncontrolling Interests	Operating Partnership Noncontrolling Interest	Partially Owned Properties Noncontrolling Interest
Balance at beginning of period at Dec. 31, 2021	$ 2,987,033	$ 2,836,308	$ 2,247	$ 3,610,954	$ (776,001)	$ (892)	$ 150,725	$ 150,241	$ 484
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net proceeds from sale of common shares	5,032	5,032	3	5,029
Restricted share award grants, net	(300)	(300)	3	118	(421)
Purchase of OP Units	(184)						(184)	(184)
Dividends/distributions declared	(54,619)	(51,879)			(51,879)		(2,740)	(2,740)
Contributions	569						569		569
Distributions	(55)						(55)		(55)
Change in fair value of interest rate swap agreements, net	1,379	1,379				1,379
Change in market value of Redeemable Noncontrolling Interest in partially owned properties	717	717			717
Adjustment for Noncontrolling Interests ownership in Operating Partnership	0	(217)		(217)			217	217
Net income	13,866	13,092			13,092		774	692	82
Balance at end of period at Mar. 31, 2022	2,953,438	2,804,132	2,253	3,615,884	(814,492)	487	149,306	148,226	1,080
Balance at beginning of period at Dec. 31, 2021	2,987,033	2,836,308	2,247	3,610,954	(776,001)	(892)	150,725	150,241	484
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reclassification of accumulated gains on interest rate swap to earnings	0
Change in fair value of interest rate swap agreements, net	6,215
Balance at end of period at Sep. 30, 2022	2,965,382	2,817,845	2,268	3,648,983	(838,729)	5,323	147,537	146,426	1,111
Balance at beginning of period at Mar. 31, 2022	2,953,438	2,804,132	2,253	3,615,884	(814,492)	487	149,306	148,226	1,080
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net proceeds from sale of common shares	18,484	18,484	9	18,475
Restricted share award grants, net	2,678	2,678	1	3,588	(911)
Dividends/distributions declared	(54,828)	(52,116)			(52,116)		(2,712)	(2,712)
Distributions	(61)						(61)		(61)
Change in fair value of interest rate swap agreements, net	3,083	3,083				3,083
Change in market value of Redeemable Noncontrolling Interest in partially owned properties	527	527			527
Adjustment for Noncontrolling Interests ownership in Operating Partnership	0	(488)		(488)			488	488
Net income	17,856	16,891			16,891		965	886	79
Balance at end of period at Jun. 30, 2022	2,941,177	2,793,191	2,263	3,637,459	(850,101)	3,570	147,986	146,888	1,098
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net proceeds from sale of common shares	7,930	7,930	5	7,925
Restricted share award grants, net	3,790	3,790		4,326	(536)
Purchase of OP Units	(2,139)						(2,139)	(2,139)
Dividends/distributions declared	(54,865)	(52,563)			(52,563)		(2,302)	(2,302)
Distributions	(61)						(61)		(61)
Reclassification of accumulated gains on interest rate swap to earnings	0
Change in fair value of interest rate swap agreements, net	1,753	1,753				1,753
Change in market value of Redeemable Noncontrolling Interest in partially owned properties	1,513	1,513			1,513
Adjustment for Noncontrolling Interests ownership in Operating Partnership	0	(727)		(727)			727	727
Net income	66,284	62,958			62,958		3,326	3,252	74
Balance at end of period at Sep. 30, 2022	2,965,382	2,817,845	2,268	3,648,983	(838,729)	5,323	147,537	146,426	1,111
Balance at beginning of period at Dec. 31, 2022	2,993,851	2,869,720	2,333	3,743,876	(881,672)	5,183	124,131	123,015	1,116
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net proceeds from sale of common shares	65,813	65,813	44	65,769
Restricted share award grants, net	(1,530)	(1,530)	5	(1,127)	(408)
Conversion of OP Units	0	2,419	2	2,417			(2,419)	(2,419)
Dividends/distributions declared	(57,175)	(54,912)			(54,912)		(2,263)	(2,263)
Contributions	7,884						7,884		7,884
Distributions	(53)						(53)		(53)
Change in fair value of interest rate swap agreements, net	(1,021)	(1,021)				(1,021)
Adjustment for Noncontrolling Interests ownership in Operating Partnership	0	(431)		(431)			431	431
Net income	10,689	10,202			10,202		487	423	64
Balance at end of period at Mar. 31, 2023	3,018,458	2,890,260	2,384	3,810,504	(926,790)	4,162	128,198	119,187	9,011
Balance at beginning of period at Dec. 31, 2022	2,993,851	2,869,720	2,333	3,743,876	(881,672)	5,183	124,131	123,015	1,116
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reclassification of accumulated gains on interest rate swap to earnings	(1,763)
Change in fair value of interest rate swap agreements, net	11,796
Balance at end of period at Sep. 30, 2023	2,947,675	2,822,277	2,385	3,817,545	(1,012,869)	15,216	125,398	116,079	9,319
Balance at beginning of period at Mar. 31, 2023	3,018,458	2,890,260	2,384	3,810,504	(926,790)	4,162	128,198	119,187	9,011
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net proceeds from sale of common shares	294	294		294
Restricted share award grants, net	2,899	2,899	1	3,459	(561)
Purchase of OP Units	(72)						(72)	(72)
Dividends/distributions declared	(57,193)	(54,936)			(54,936)		(2,257)	(2,257)
Contributions	287						287		287
Distributions	(52)						(52)		(52)
Change in fair value of interest rate swap agreements, net	5,120	5,120				5,120
Adjustment for Noncontrolling Interests ownership in Operating Partnership	0	(393)		(393)			393	393
Net income	13,118	12,544			12,544		574	515	59
Balance at end of period at Jun. 30, 2023	2,982,859	2,855,788	2,385	3,813,864	(969,743)	9,282	127,071	117,766	9,305
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted share award grants, net	3,223	3,223		3,746	(523)
Conversion of OP Units	0	350		350			(350)	(350)
Dividends/distributions declared	(57,195)	(54,938)			(54,938)		(2,257)	(2,257)
Distributions	(53)						(53)		(53)
Reclassification of accumulated gains on interest rate swap to earnings	(1,763)	(1,763)				(1,763)
Change in fair value of interest rate swap agreements, net	7,697	7,697				7,697
Adjustment for Noncontrolling Interests ownership in Operating Partnership	0	(415)		(415)			415	415
Net income	12,907	12,335			12,335		572	505	67
Balance at end of period at Sep. 30, 2023	$ 2,947,675	$ 2,822,277	$ 2,385	$ 3,817,545	$ (1,012,869)	$ 15,216	$ 125,398	$ 116,079	$ 9,319

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash Flows from Operating Activities:
Net income	$ 36,645	$ 98,155
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	143,555	142,002
Amortization of deferred financing costs	2,028	1,739
Amortization of lease inducements and above/below-market lease intangibles	4,055	4,458
Straight-line rental revenue, net	(2,756)	(5,359)
Amortization of discount on unsecured senior notes	824	794
Amortization of above market assumed debt	0	(10)
Gain on extinguishment of debt	(1,763)	0
Gain on sale of investment properties, net	(13)	(57,375)
Equity in (gain) loss of unconsolidated entities	(1,260)	452
Distributions from unconsolidated entities	5,707	6,077
Change in fair value of derivatives	185	0
Provision for bad debts	571	269
Non-cash share compensation	12,290	12,400
Change in operating assets and liabilities:
Tenant receivables	711	(5,927)
Other assets	(3,019)	(1,455)
Accounts payable	542	(125)
Accrued expenses and other liabilities	7,610	6,258
Net cash provided by operating activities	205,912	202,353
Cash Flows from Investing Activities:
Proceeds from sale of investment properties	2,553	123,179
Acquisition of investment properties, net	(39,282)	(111,587)
Investment in unconsolidated entities, net	(3,671)	(13,349)
Returns of investment in unconsolidated entities	3,737	0
Development of real estate	(12,672)	0
Escrowed cash - acquisition deposits/earnest deposits	0	360
Capital expenditures on investment properties	(31,194)	(29,840)
Investment in real estate loans receivable	(22,272)	(29,618)
Repayment of real estate loans receivable	41,065	22,441
Leasing commissions	(2,588)	(2,766)
Lease inducements	(399)	(500)
Net cash used in investing activities	(64,723)	(41,680)
Cash Flows from Financing Activities:
Net proceeds from sale of common shares	65,914	31,446
Proceeds from credit facility borrowings	513,000	239,000
Repayment of credit facility borrowings	(306,000)	(251,000)
Repayment of senior unsecured notes	(15,000)	0
Principal payments on mortgage debt	(36,803)	(15,845)
Payment of debt issuance costs	(3,911)	(67)
Dividends paid - shareholders	(165,491)	(156,854)
Distributions to noncontrolling interests - Operating Partnership	(6,783)	(8,191)
Contributions from noncontrolling interest	8,171	569
Distributions to noncontrolling interests - partially owned properties	(281)	(517)
Payments of employee taxes for withheld stock-based compensation shares	(5,891)	(4,255)
Purchase of OP Units	(72)	(2,323)
Net cash provided by (used in) financing activities	46,853	(168,037)
Net increase (decrease) in cash and cash equivalents	188,042	(7,364)
Cash and cash equivalents, beginning of period	7,730	9,876
Cash and cash equivalents, end of period	195,772	2,512
Supplemental Cash Flow Information [Abstract]
Supplemental disclosure of cash flow information - interest paid during the period	66,082	57,977
Supplemental disclosure of noncash activity—change in fair value of interest rate swap agreements	11,796	6,215
Supplemental disclosure of noncash activity—conversion of loan receivable in connection to the acquisition of investment property	$ 5,398	$ 5,700

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Organization and Business

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business

Organization and Business

Physicians Realty Trust (the “Trust” or the “Company”) was organized in the state of Maryland on April 9, 2013. As of September 30, 2023, the Trust was authorized to issue up to 500,000,000 common shares of beneficial interest, par value $0.01 per share. The Trust filed a Registration Statement on Form S-11 with the Commission with respect to a proposed underwritten initial public offering (the “IPO”) and completed the IPO of its common shares and commenced operations on July 24, 2013.

The Trust contributed the net proceeds from the IPO to Physicians Realty L.P, a Delaware limited partnership (the “Operating Partnership”), and is the sole general partner of the Operating Partnership. The Trust’s operations are conducted through the Operating Partnership and wholly-owned and majority-owned subsidiaries of the Operating Partnership. The Trust, as the general partner of the Operating Partnership, controls the Operating Partnership and consolidates the assets, liabilities, and results of operations of the Operating Partnership.

The Trust is a self-managed REIT formed primarily to acquire, selectively develop, own, and manage health care properties that are leased to physicians, hospitals, and health care delivery systems.

ATM Program

In May 2021, the Trust and the Operating Partnership entered into an At Market Issuance Sales Agreement (the “2021 Sales Agreement”) with KeyBanc Capital Markets Inc., Credit Agricole Securities (USA) Inc., BMO Capital Markets Corp., and Raymond James & Associates, Inc. in their capacity as agents for the Company and/or forward sellers and Stifel, Nicolaus & Company, Incorporated in its capacity as sales agent for the Company (collectively, the “2021 Agents”) and Bank of Montreal, Credit Agricole Corporate and Investments Bank, KeyBanc Capital Markets Inc., and Raymond James & Associates, Inc. as forward purchasers for the Company (the “2021 Forward Purchasers”), pursuant to which the Trust may issue and sell, from time to time, its common shares having an aggregate offering price of up to $500 million through the 2021 Agents (the “2021 ATM Program”). The 2021 Sales Agreement contemplates that, in addition to the issuance and sale of the Trust’s common shares through the 2021 Agents, the Trust may also enter into one or more forward sales agreements from time to time in the future with each of the 2021 Forward Purchasers.

In August 2023, the Trust and the Operating Partnership entered into an At Market Issuance Sales Agreement (the “2023 Sales Agreement”) with BMO Capital Markets Corp., Credit Agricole Securities (USA) Inc., KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., Regions Securities LLC and Stifel, Nicolaus & Company, Incorporated as sales agents for the Company and/or forward sellers (collectively, “2023 Agents”), and Bank of Montreal, Crédit Agricole Corporate and Investment Bank, KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., Regions Securities LLC and Stifel, Nicolaus & Company, Incorporated (collectively, “2023 Forward Purchasers”), pursuant to which the Trust may issue and sell, from time to time, its common shares having an aggregate offering price of up to $600 million through the 2023 Agents (the “2023 ATM Program”). The 2023 Sales Agreement contemplates that, in addition to the issuance and sale of the Trust’s common shares through the 2023 Agents, the Trust may also enter into one or more forward sales agreements from time to time in the future with each of the 2023 Forward Purchasers. Upon entry into the 2023 Sales Agreement, we terminated the 2021 ATM Program.

During the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023, the Trust issued and sold common shares through the 2021 ATM Program as follows (net proceeds in thousands):

	Common shares sold	Weighted average price		Net proceeds
Quarter ended March 31, 2023	4,400,000	$	15.10	$	65,776
Quarter ended June 30, 2023	—	—		—
Quarter ended September 30, 2023	—	—		—
Year to date	4,400,000	$	15.10	$	65,776

As of September 30, 2023, the Trust has $600.0 million of common shares remaining available under the 2023 ATM Program. Subsequent to September 30, 2023, in connection with the Merger Agreement, the Trust suspended the 2023 ATM Program.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods ended September 30, 2023 and 2022 pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. All such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements included in the Trust’s 2022 Annual Report. The Company has consistently applied its accounting policies to all periods presented in these consolidated financial statements.

Noncontrolling Interests

The Company presents the portion of any equity it does not own in entities that it controls (and thus consolidates) as noncontrolling interests and classifies such interests as a component of consolidated equity, separate from the Company’s total shareholders’ equity, on the consolidated balance sheets.

Operating Partnership: Noncontrolling interests in the Company include partnership interests of the Operating Partnership (“OP Units”) held by other investors. Net income or loss is allocated to noncontrolling interests (limited partners) based on their respective ownership percentage of the Operating Partnership. The ownership percentage is calculated by dividing the number of OP Units held by the noncontrolling interests by the total OP Units held by the noncontrolling interests and the Trust. Issuance of additional common shares and OP Units changes the ownership interests of both the noncontrolling interests and the Trust. Such transactions and the related proceeds are treated as capital transactions. 

As of September 30, 2023, the Trust held a 96.1% interest in the Operating Partnership. As the sole general partner and the majority interest holder, the Trust consolidates the financial position and results of operations of the Operating Partnership.

Partially Owned Properties: The Trust reflects noncontrolling interests in partially owned properties on the consolidated balance sheets for the portion of consolidated properties that are not wholly owned by the Company. The earnings or losses from those properties attributable to the noncontrolling interests are reflected as noncontrolling interests in partially owned properties in the consolidated statements of income.

Redeemable Noncontrolling Interests - Partially Owned Properties

In connection with the Company’s acquisitions of the outpatient medical facility, ambulatory surgery center, and hospital located on the Great Falls Hospital campus in Great Falls, Montana, physicians affiliated with the sellers retained non-controlling interests which were, at the holders’ option, able to be redeemed at any time after May 1, 2023. Due to the redemption provision, which was outside of the control of the Trust, the Trust classified the investment in the mezzanine section of its consolidated balance sheets. On July 14, 2022, the Company disposed of these three properties and removed the related redeemable noncontrolling interests from its consolidated balance sheets.

Through a consolidated joint venture with MedProperties Realty Advisors, LLC (“MedProperties”), the Company acquired Calko Medical Center in Brooklyn, New York. As part of the joint venture, MedProperties can redeem its interest, at its option, at any time after September 9, 2025. Due to the redemption provision, which is outside of the control of the Company, the Company classifies the noncontrolling interests in the mezzanine section of its consolidated balance sheets. The Company records the carrying amount of the redeemable noncontrolling interests at the greater of the carrying value or redemption value.

Dividends and Distributions

On September 21, 2023, the Trust announced that its Board of Trustees authorized, and the Trust declared, a cash dividend of $0.23 per common share for the quarter ended September 30, 2023. The dividend was paid on October 17, 2023, to common shareholders and holders of record of OP Units as of the close of business on October 3, 2023.

Tax Status of Dividends and Distributions

The Company’s distributions of current and accumulated earnings and profits for U.S. federal income tax purposes generally are taxable to shareholders as ordinary income. Distributions in excess of these earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent thereof (non-dividend distributions) and thereafter as taxable gain.

Any cash distributions received by an OP Unit holder in respect of its OP Units generally will not be taxable to such OP Unit holder for U.S. federal income tax purposes, to the extent that such distribution does not exceed the OP Unit holder’s basis in its OP Units. Any such distribution will instead reduce the OP Unit holder’s basis in its OP Units (and OP Unit holders will be subject to tax on the taxable income allocated to them by the Operating Partnership in respect of their OP Units when such income is earned by the Operating Partnership, with such income allocation increasing the OP Unit holders’ basis in their OP Units).

The Company has elected taxable REIT subsidiary (“TRS”) status for certain of its corporate subsidiaries and, as a result, these entities will incur both federal and state income taxes on any taxable income of such entities after consideration of any net operating losses. To date, these income taxes have been de minimis.

Real Estate Loans Receivable, Net

Real estate loans receivable consists of nine mezzanine loans, three term loans, and two construction loans as of September 30, 2023. Generally, each mezzanine loan is collateralized by a pledge of the borrower’s ownership interest in the respective real estate owner, each term loan is secured by a mortgage on a related outpatient medical facility, and construction loans are secured by mortgages on the land and the improvements as constructed. The reserve for loan losses was $0.4 million as of September 30, 2023.

Rental and Related Revenues

Rental revenue is recognized on a straight-line basis over the terms of the related leases when collectability is probable. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue for amounts more or less than amounts currently due from tenants. Amounts recognized in excess of amounts currently due from tenants are included in other assets and were approximately $105.0 million and $101.3 million as of September 30, 2023 and December 31, 2022, respectively. If the Company determines that collectability of straight-line rents is not probable, income recognition is limited to the lesser of cash collected, or lease income reflected on a straight-line basis, plus variable rent when it becomes accruable.

In accordance with ASC 842, Leases, Topic 842, if the collectability of a lease changes after the commencement date, any difference between lease income that would have been recognized and the lease payments shall be recognized as an adjustment to lease income. Bad debt recognized as an adjustment to rental and related revenues was $0.9 million for the nine months ended September 30, 2023 and $0.2 million for the nine months ended September 30, 2022.

Rental revenue is adjusted by the amortization of lease inducements and above-market or below-market rents on certain leases. Lease inducements and above-market or below-market rents are amortized on a straight-line basis over the remaining lease term. Rental and related revenues also include expense recoveries, which relate to tenant reimbursement of real estate taxes, insurance, and other operating expenses that are recognized in the period the applicable expenses are incurred. The reimbursements are recorded gross, as these costs are incurred by the Company and reimbursed by the tenants. The Company has certain tenants with absolute net leases. Under these lease agreements, the tenant is responsible for operating and building expenses and the Company does not recognize expense recoveries.

Derivative Instruments

When the Company has derivative instruments, it records them either as an asset or a liability measured at their fair value unless they qualify for a normal purchase or normal sale exception. When specific hedge accounting criteria are not met or if the Company does not elect to apply for hedge accounting, changes in the Company’s derivative instruments’ fair value are recognized currently in earnings. If hedge accounting is applied to a derivative instrument, the entire change in the fair value of its derivatives designated and qualified as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) on the consolidated balance sheets and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings.

To manage interest rate risk for certain of its variable-rate debt, the Company uses interest rate swaps as part of its risk management strategy. These derivatives are designed to mitigate the risk of future interest rate increases by providing a fixed interest rate for a limited, pre-determined period of time. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of September 30, 2023, the Company had three outstanding interest rate swaps designated as cash flow hedges of interest rate risk, and one interest rate swap that was de-designated as a hedging instrument during the quarter ended September 30, 2023 but remains outstanding. Further detail is provided in Note 7 (Derivatives).

Reclassifications

Certain amounts in the accompanying consolidated balance sheet for 2022 have been reclassified to conform to the 2023 consolidated financial statement presentation. The reclassifications had no impact on total assets or any balance sheet total or subtotal.

New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional relief to applying reference rate reform to changing reference rates, contracts, hedging relationships, and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”). The amendments in this update may be applied through December 31, 2024.

On March 31, 2023, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a First Amendment to the Third Amended and Restated Credit Agreement to update the benchmark provisions to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”), as the reference rate for the purpose of calculating interest under the agreement. The Company also amended its fixed interest rate swap agreement on its mortgage debt to update the reference rate from LIBOR to SOFR. As a result, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

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Investment and Disposition Activity

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Investment and Disposition Activity

Investment and Disposition Activity

During the nine months ended September 30, 2023, the Company executed contractual commitments related to a $40.5 million development project, with $12.7 million spent on construction in progress thus far, completed the acquisition of three outpatient medical facilities and three medical condominium units for an investment of $38.5 million and two parcels of land adjacent to existing outpatient medical facilities for an investment of $1.7 million, and paid $2.2 million of additional purchase consideration under six earn-out agreements. The Company also closed on a $35.8 million construction loan, funding $10.7 million to date. Additionally, the Company funded an aggregate of $13.2 million on new term loans, previously announced loan commitments, and other investments, including an $1.3 million investment in IJRI Properties, LLC, which is an entity constructing and operating an outpatient medical facility in Indiana. The Company contributed $2.0 million to the joint venture with Davis Medical Investors, LLC (the “Davis Joint Venture”) to fund additional purchase consideration related to the venture’s acquisitions. Investment activity totaled approximately $81.0 million during the nine months ended September 30, 2023. As part of these investments, the Company incurred approximately $2.0 million of capitalized acquisition costs.

Investment activity for the three months ended September 30, 2023, included the acquisition of one outpatient medical facility and a parcel of land adjacent to one of our existing properties for an aggregate purchase price of $3.5 million. Additionally, the Company funded an aggregate $5.9 million under two earn-out agreements, previously announced loan commitments, and other investments, including an $1.3 million investment in IJRI Properties, LLC, which is an entity constructing and operating an outpatient medical facility in Indiana. The Company also funded construction in progress of $7.4 million, resulting in total investment activity of approximately $16.8 million as of September 30, 2023.

The following table summarizes the acquisition date fair values of the assets acquired and the liabilities assumed, as well as follow-on capitalized costs during the nine months ended September 30, 2023, which the Company determined using Level 2 and Level 3 inputs (in thousands):

	1st Quarter		2nd Quarter		3rd Quarter		Total
Land	$	1,356	$	6,016	$	1,345	$	8,717
Building and improvements	1,294		28,353		2,459		32,106
In-place lease intangibles	—		3,491		919		4,410
Below market in-place lease intangibles	—		—		(553)		(553)
Net assets acquired	$	2,650	$	37,860	$	4,170	$	44,680
Satisfaction of real estate loans receivable	—		(5,398)		—		(5,398)
Cash used in acquisition of investment property	$	2,650	$	32,462	$	4,170	$	39,282

Dispositions

During the nine months ended September 30, 2023, the Company sold one outpatient medical facility for approximately $2.6 million, realizing an insignificant gain.

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Intangibles

9 Months Ended

Sep. 30, 2023

Finite-Lived Intangible Assets, Net [Abstract]

Intangibles

Intangibles

The following is a summary of the carrying amount of intangible assets and liabilities as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023						December 31, 2022
	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Assets
In-place leases	$	449,716	$	(272,643)	$	177,073	$	445,583	$	(241,643)	$	203,940
Above-market leases	$	59,752	$	(34,282)	$	25,470	$	59,752	$	(30,096)	$	29,656
Liabilities
Below-market leases	$	36,962	$	(13,792)	$	23,170	$	37,002	$	(12,621)	$	24,381

The following is a summary of acquired lease intangible amortization for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Amortization expense related to in-place leases	$	10,204	$	10,629	$	31,278	$	32,814
Decrease in rental income related to above-market leases	1,373		1,384		4,187		4,390
Increase in rental income related to below-market leases	594		556		1,764		1,522

Future aggregate net amortization of acquired lease intangibles as of September 30, 2023, is as follows (in thousands):

	Net Decrease (Increase)  in Revenue		Net Increase in  Expenses
2023	$	748	$	9,642
2024	2,887		35,184
2025	2,316		29,663
2026	1,161		23,548
2027	994		20,625
Thereafter	(5,806)		58,411
Total	$	2,300	$	177,073

As of September 30, 2023, the weighted average remaining amortization period is 7 years for in-place and above-market lease intangible assets and 15 years for below-market lease intangibles.

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Other Assets

9 Months Ended

Sep. 30, 2023

Other Assets, Unclassified [Abstract]

Other Assets

Other Assets

Other assets consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Straight line rent receivable, net	$	104,991	$	101,306
Interest rate swaps	14,731		2,045
Leasing commissions, net	14,043		13,231
Prepaid expenses	14,013		11,009
Lease inducements, net	7,577		7,894
Escrows	1,574		1,565
Notes receivable, net	363		370
Other	8,850		9,387
Total	$	166,142	$	146,807

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Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

Debt

The following is a summary of debt as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Fixed interest mortgage notes (1)	$	23,330	$	59,776
Variable interest mortgage notes (2)	104,797		105,153
Total mortgage debt	128,127		164,929
$1.0 billion unsecured revolving credit facility due September 2025 (3)	—		193,000
$400 million unsecured term borrowing bearing fixed interest of 4.693%, due May 2028 (4)	400,000		—
$400 million senior unsecured notes bearing fixed interest of 4.30%, due March 2027	400,000		400,000
$350 million senior unsecured notes bearing fixed interest of 3.95%, due January 2028	350,000		350,000
$500 million senior unsecured notes bearing fixed interest of 2.625%, due November 2031	500,000		500,000
$135 million senior unsecured notes bearing fixed interest of 4.43% to 4.74%, due January 2026 to 2031	135,000		150,000
$75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027	75,000		75,000
Total principal	1,988,127		1,832,929
Unamortized deferred financing costs	(9,336)		(7,453)
Unamortized discounts	(6,535)		(7,359)
Total debt	$	1,972,256	$	1,818,117

(1)As of September 30, 2023, one fixed interest mortgage note bears interest of 4.63%, due in 2024, and is collateralized by one property with a net book value of $37.2 million. As of December 31, 2022, fixed interest mortgage notes bear interest from 3.33% to 4.63%, due in 2024, with a weighted average interest rate of 3.85%. The notes are collateralized by two properties with a net book value of $94.9 million. one mortgage note bears interest at LIBOR plus 1.90% and the Trust entered into a pay-fixed receive-variable interest rate swap, fixing the variable component at 1.43% as of December 31, 2022.

(2)Variable interest mortgage notes bear variable interest of SOFR plus 1.85% and PRIME plus 2.75% for a weighted average interest rate of 7.35% as of September 30, 2023. Variable interest mortgage notes bear variable interest of SOFR plus 1.85% and LIBOR plus 2.75% for a weighted average interest rate of 6.20% as of December 31, 2022. The notes are due in 2026 and 2028 and collateralized by four properties with a net book value of $284.4 million as of September 30, 2023 and $295.5 million as of December 31, 2022.

(3)The unsecured revolving credit facility bears variable interest of SOFR plus 0.95%, inclusive of a 0.10% SOFR index adjustment, as of September 30, 2023 and LIBOR plus 0.85% as of December 31, 2022.

(4)The Company’s borrowings under the term loan feature of the Credit Agreement (as defined below) bear interest at a rate equal to 1.10%, inclusive of a 0.10% SOFR index adjustment, plus Daily Simple SOFR as of September 30, 2023 based on the Company’s current credit rating. The Company entered into fixed-for-floating interest rate swaps for the full borrowing amount, fixing the SOFR component of this rate at 3.59%, and a current all-in fixed rate of 4.69%.

On September 24, 2021, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a Third Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) which extended the maturity date of the revolving credit facility under the Credit Agreement to September 24, 2025 and reduced the interest rate margin applicable to borrowings. The Credit Agreement included an unsecured revolving credit facility of $1.0 billion and contained a term loan feature of $250.0 million, bringing total borrowing capacity to $1.25 billion. The Credit Agreement also included a swingline loan commitment for up to 10% of the maximum principal amount and provided an accordion feature allowing the Operating Partnership to increase borrowing capacity by up to an additional $500.0 million, subject to customary terms and conditions, resulting in a maximum borrowing capacity of $1.75 billion. The revolving credit facility under the Credit Agreement also included two six-month extension options.

On March 31, 2023, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a First Amendment to the Credit Agreement which expanded the accordion feature allowing the Operating Partnership to increase borrowing capacity by up to an additional $500.0 million, and replaced the LIBOR-based benchmark rates applicable to borrowings under the Credit Agreement with SOFR based benchmark rates plus a SOFR index adjustment of 0.10%.

On May 24, 2023, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a Second Amendment to the Credit Agreement, which added a new $400.0 million unsecured term loan with a scheduled maturity date of May 24, 2028 and expanded the accordion feature, which allows the Operating Partnership to increase borrowing capacity under the Credit Agreement by up to an additional $500.0 million, subject to customary terms and conditions, for a maximum aggregate principal amount of all revolving commitments and term loans under the Credit Agreement of $1.9 billion. On the same day, the Operating Partnership borrowed $400.0 million under the term loan feature of the Credit Agreement. Borrowings under the term loan feature of the Credit Agreement bear interest on the outstanding principal amount at a rate equal to 1.10%, inclusive of a 0.10% SOFR index adjustment, plus Daily Simple SOFR as defined in the Credit Agreement. The Company simultaneously entered into fixed-for-floating interest rate swaps for the full borrowing amount under the term loan, fixing the Daily Simple SOFR component of the borrowing rate at 3.593%, for a current all-in fixed rate of 4.693%. Both the borrowing and the fixed-for-floating interest rate swaps have a maturity date of May 24, 2028.

As of September 30, 2023, the borrower had investment grade ratings of BBB from S&P and Baa2 from Moody’s. As such, borrowings under the revolving credit facility of the Credit Agreement accrue interest on the outstanding principal at a rate of SOFR plus 0.95%, inclusive of a 0.10% SOFR index adjustment. The Credit Agreement includes a facility fee equal to 0.20% per annum, which is also determined by the borrower’s investment grade rating.

Base Rate Loans, Adjusted SOFR Loans, and Letters of Credit (each, as defined in the Credit Agreement) will be subject to interest rates, based upon the borrower’s investment grade rating as follows:

Credit Rating	Applicable Margin for Revolving Loans: SOFR Loans and Letter of Credit Fee	Applicable Margin for Revolving Loans: Base Rate Loans		Applicable Margin for Term Loans: SOFR Loans	Applicable Margin for Term Loans: Base Rate Loans
At Least A- or A3	SOFR + 0.725%	—	%	SOFR + 0.85%	—	%
At Least BBB+ or Baa1	SOFR + 0.775%	—	%	SOFR + 0.90%	—	%
At Least BBB or Baa2	SOFR + 0.85%	—	%	SOFR + 1.00%	—	%
At Least BBB- or Baa3	SOFR + 1.05%	0.05	%	SOFR + 1.25%	0.25	%
Below BBB- or Baa3	SOFR + 1.40%	0.40	%	SOFR + 1.65%	0.65	%

The Credit Agreement contains financial covenants that, among other things, require compliance with leverage and coverage ratios and maintenance of minimum tangible net worth, as well as covenants that may limit the Trust’s and the Operating Partnership’s ability to incur additional debt, grant liens, or make distributions. Subject to the restrictions in the Merger Agreement, the Company may voluntarily prepay any revolving or term loan under the Credit Agreement in whole or in part without premium or penalty. As of September 30, 2023, the Company was in compliance with all financial covenants related to the Credit Agreement.

The Credit Agreement includes customary representations and warranties by the Trust and the Operating Partnership and imposes customary covenants on the Operating Partnership and the Trust. The Credit Agreement also contains customary events of default, and if an event of default occurs and continues, the Operating Partnership is subject to certain actions by the administrative agent, including without limitation, the acceleration of repayment of all amounts outstanding under the Credit Agreement.

As of September 30, 2023, the Company did not have any borrowings outstanding under its $1.0 billion unsecured revolving credit facility feature or the $500.0 million accordion feature of the Credit Agreement and had $400.0 million of borrowings outstanding under the term loan feature of the Credit Agreement.

Notes Payable

As of September 30, 2023, the Company had $1.5 billion aggregate principal amount of senior notes issued and outstanding by the Operating Partnership, comprised of $25.0 million maturing in 2025, $70.0 million maturing in 2026, $425.0 million maturing in 2027, $395.0 million maturing in 2028, and $545.0 million maturing in 2031.

Certain properties are encumbered by mortgage loans that contain financial covenants. As of September 30, 2023, the Trust was in compliance with all mortgage debt financial covenants.

Scheduled principal payments due on consolidated debt as of September 30, 2023 are as follows (in thousands):

2023	$	255
2024	23,669
2025	25,476
2026	170,476
2027	425,476
Thereafter	1,342,775
Total Payments	$	1,988,127

As of September 30, 2023, the Company had total consolidated indebtedness of approximately $2.0 billion. The weighted average interest rate on consolidated indebtedness was 4.07% (based on the 30-day SOFR rate of 5.31% and a PRIME rate of 8.50% as of September 30, 2023). As of September 30, 2023, we had approximately 5.0% and 0.2% of our outstanding long-term debt exposed to fluctuations in SOFR and PRIME, respectively.

For the three months ended September 30, 2023 and 2022, the Company incurred interest expense on its debt, exclusive of deferred financing cost amortization, of $21.0 million and $17.7 million, respectively. For the nine month periods ending September 30, 2023 and 2022, the Company incurred interest expense on its debt, exclusive of deferred financing cost amortization, of $59.6 million and $50.6 million, respectively.

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Derivatives

9 Months Ended

Sep. 30, 2023

Derivative Instrument Detail [Abstract]

Derivatives

Derivatives

In the normal course of business, a variety of financial instruments are used to manage or hedge interest rate risk. When specific hedge accounting criteria are not met, that changes in a derivative’s fair value be recognized currently in earnings. Changes in the fair market values of the Company’s derivative instruments are recorded in the consolidated statements of income if such derivatives do not qualify for, or the Company does not elect to apply for, hedge accounting. As a result of the Company’s adoption of ASU 2017-12 as of January 1, 2019, the change in the fair value of our derivatives designated and qualified as cash flow hedges are recorded in accumulated other comprehensive income on the consolidated balance sheets and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings. During the three months ended September 30, 2023, the Company de-designated an interest rate swap upon the repayment of the related debt instrument and reclassified the $1.8 million accumulated gain from other comprehensive income to earnings. This derivative instrument has a fair value of $1.6 million as of September 30, 2023, and is classified in other assets. Future changes in value on this derivative instrument, which matures on October 31, 2024, will be recorded directly in earnings.

As of September 30, 2023, the Company had three outstanding interest rate swaps designated as cash flow hedges of interest rate risk. See Note 2 (Summary of Significant Accounting Policies) for a further discussion of our derivatives. In

addition, the Company recognizes its share of other comprehensive income related to derivative instruments held by unconsolidated entities.

The following table presents the fair value of the Company’s derivative financial instruments, as well as their classification on the Company’s consolidated balance sheets as of September 30, 2023 (in thousands):

Derivatives Instruments	Maturity Date	Number of Instruments	Total Notional Amount		Interest Rate		Balance Sheet Location	Fair Value
Cash flow hedge interest rate swaps	5/24/2028	3	$	400,000	3.59	%	Other Assets	$	13,152
Interest rate swap	10/31/2024	1	36,050		1.37	%	Other Assets	1,579
Total		4	$	436,050				$	14,731

The following tables provide a summary of the effect of interest rate swaps on the Company’s accompanying consolidated statements of income and comprehensive income for the nine months ended September 30, 2023 and 2022, respectively (amounts in thousands):

Derivative Instruments as of September 30, 2023	Maturity Date	Amount of Gain/(Loss) Recognized in OCI on Derivative		Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Cash flow hedge interest rate swaps	5/24/2028	$	13,152	Interest expense	$	—
Interest rate swap	10/31/2024	—		Interest expense	1,763
Total		$	13,152		$	1,763

Derivative Instruments as of September 30, 2022	Maturity Date	Amount of Gain/(Loss) Recognized in OCI on Derivative		Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Interest rate swap	10/31/2024	$	2,523	Interest expense	$	—

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Accrued Expenses and Other Liabilities

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

Accrued Expenses and Other Liabilities

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Real estate taxes payable	$	30,893	$	23,303
Prepaid rent	23,537		21,062
Accrued interest	11,683		18,196
Accrued expenses	7,841		7,920
Accrued incentive compensation	5,342		2,700
Security deposits	4,586		4,338
Tenant improvement allowances	1,853		1,831
Other	9,902		8,370
Total	$	95,637	$	87,720

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Stock-based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

Stock-based Compensation

The Company follows ASC 718, Compensation - Stock Compensation (“ASC 718”), in accounting for its share-based payments. This guidance requires measurement of the cost of employee services received in exchange for stock compensation based on the grant-date fair value of the employee stock awards. This cost is recognized as compensation expense ratably over the employee’s requisite service period. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized when incurred. Share-based payments classified as liability awards are marked to fair value at each reporting period. Any common shares issued pursuant to the Company's incentive equity compensation and employee stock purchase plans will result in the Operating Partnership issuing OP Units to the Trust on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances.

Certain of the Company’s employee stock awards vest only upon the achievement of performance targets. ASC 718 requires recognition of compensation cost only when achievement of performance conditions is considered probable. Consequently, the Company’s determination of the amount of stock compensation expense requires judgment in estimating the probability of achievement of these performance targets. Subsequent changes in actual experience are monitored and estimates are updated as information is available.

In connection with the IPO, the Trust adopted the Physicians Realty Trust 2013 Equity Incentive Plan, which made shares available for awards for participants (the “2013 Plan”). At the Company’s Annual Meeting of Shareholders held on May 3, 2023, shareholders approved the Amended and Restated Physicians Realty Trust 2013 Equity Incentive Plan (the “Amended and Restated 2013 Plan”). The Amended and Restated 2013 Plan increased the number of common shares authorized for issuance to a total of 11,000,000. The Amended and Restated 2013 Plan also extended the term of the plan from 2029 to 2033, among other changes.

Restricted Common Shares

Restricted common shares granted under the 2013 Plan are eligible for dividends as well as the right to vote. In the nine months ended September 30, 2023, the Trust granted a total of 342,939 restricted common shares with a total value of $5.0 million to its officers and certain of its employees, which have a vesting period of one to three years. In January 2023, under the 2013 Plan, the Company granted restricted common shares to certain of its officers under a salary deferral program, part of which vests after one year, with the remainder vesting after two years.

A summary of the status of the Trust’s non-vested restricted common shares as of September 30, 2023 and changes during the nine month period then ended follow:

	Common Shares	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2022	272,898	$	16.69
Granted	342,939	14.57
Vested	(239,602)	16.54
Forfeited	(364)	17.45
Non-vested at September 30, 2023	375,871	$	14.84

For all service awards, the Company records compensation expense for the entire award on a straight-line basis over the requisite service period. For the three months ended September 30, 2023 and 2022, the Company recognized non-cash share compensation of $1.2 million and $1.0 million, respectively. For the nine month periods ending September 30, 2023 and 2022, the Company recognized non-cash share compensation of $3.5 million and $2.9 million, respectively. Unrecognized compensation expense on September 30, 2023 was $2.9 million.

Restricted Share Units

In January 2023, under the 2013 Plan, the Company granted 11,274 restricted share units to certain of its trustees in lieu of all or a portion of such trustee’s 2023 cash retainer. These units are subject to certain timing conditions and a one-year service period. Each restricted share unit contains one dividend equivalent. Each recipient will accrue dividend equivalents on awarded share units equal to the cash dividend that would have been paid on the awarded share unit had the awarded share unit been an issued and outstanding common share on the record date for the dividend. With respect to the performance and timing conditions of the January 2023 grants, the grant date fair value of $14.47 per unit was based on the share price at the date of grant.

In March 2023, under the 2013 Plan, the Company granted restricted share units at a target level of 355,388 to its officers and certain of its employees and 62,586 to its trustees. Units granted to officers and certain employees under the Company’s 2013 Plan are subject to certain performance and market conditions and a three-year service period. Units granted to trustees are subject to certain timing conditions and a two-year service period for full vesting. Each restricted share unit contains one dividend equivalent. Each recipient will accrue dividend equivalents on awarded share units equal to the cash dividend that would have been paid on the awarded share unit had the awarded share unit been an issued and outstanding common share on the record date for the dividend.

Approximately 30% of the restricted share units issued to officers and certain employees under the Company’s 2013 Plan in 2023 vest based on a certain market condition. The awards containing the market condition were valued with the assistance of independent valuation specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $18.71 per unit for the March 2023 grant using the following assumptions:

Volatility	23.4		%
Dividend assumption	reinvested
Expected term in years	2.83 years
Risk-free rate	4.70		%
Share price (per share)	$	14.70

The remaining 70% of the restricted share units issued to officers and certain employees under the Company’s 2013 Plan, and 100% of other restricted share units issued to trustees vest based upon certain performance or timing conditions. With respect to the performance and timing conditions of the March 2023 grants, the grant date fair value of $14.70 per unit was based on the share price at the date of grant. The combined weighted average grant date fair value of the March 2023 restricted share units issued to officers and certain employees was $15.90 per unit.

The following is a summary of the activity in the Trust’s restricted share units during the nine months ended September 30, 2023: 

	Executive Awards				Trustee Awards
	Restricted Share Units		Weighted Average Grant Date Fair Value		Restricted Share Units	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2022	1,046,940		$	21.41	77,992	$	16.60
Granted	355,388		15.90		73,860	14.66
Vested	(223,579)	(1)	24.36		(49,890)	16.74
Non-vested at September 30, 2023	1,178,749		$	19.19	101,962	$	15.13

(1)Restricted units vested by Company executives in 2023 resulted in the issuance of 652,851 common shares, less 290,380 common shares withheld to cover minimum withholding tax obligations.

For the three months ended September 30, 2023 and 2022, the Company recognized non-cash share compensation of $2.6 million and $3.3 million, respectively. For the nine month periods ending September 30, 2023 and 2022, the Company recognized non-cash share compensation of $8.6 million and $9.4 million, respectively. Unrecognized compensation expense on September 30, 2023 was $11.5 million.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

ASC Topic 820, Fair Value Measurement (“ASC 820”), requires certain assets and liabilities be reported and/or disclosed at fair value in the financial statements and provides a framework for establishing that fair value. The framework for determining fair value is based on a hierarchy that prioritizes the valuation techniques and inputs used to measure fair value.

In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset. These Level 3 fair value measurements are based primarily on management’s own estimates using pricing models, discounted cash flow methodologies, or similar techniques taking into account the characteristics of the asset or liability. In instances where inputs used to measure fair value fall into different levels of the fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. As part of the Company’s acquisition process, Level 3 inputs are used to measure the fair value of the assets acquired and liabilities assumed.

The Company’s derivative instruments as of September 30, 2023 consist of four interest rate swaps, of which three are designated as cash flow hedges of interest rate risk, as detailed in the Derivative Instruments section of Note 7 (Derivatives) and Note 2 (Summary of Significant Accounting Policies) of this report.

The interest rate swaps are not traded on an exchange. The Company’s derivative assets and liabilities are recorded at fair value based on a variety of observable inputs including contractual terms, interest rate curves, yield curves, measure of volatility, and correlations of such inputs. The Company measures its derivatives at fair value on a recurring basis. The fair values are based on Level 2 inputs described above. The Company considers its own credit risk, as well as the credit risk of its counterparties, when evaluating the fair value of its derivatives.

The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. This generally includes assets subject to impairment. There were no such assets measured at fair value as of September 30, 2023.

The carrying amounts of cash and cash equivalents, tenant receivables, payables, and accrued interest are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for real estate loans receivable and mortgage debt are estimated based on rates currently prevailing for similar instruments of similar maturities and are based primarily on Level 2 inputs.

The following table presents the fair value of the Company’s financial instruments (in thousands):

	September 30, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Real estate loans receivable, net	$	79,884	$	76,935	$	104,973	$	102,162
Notes receivable, net	$	363	$	363	$	370	$	370
Derivative assets	$	14,731	$	14,731	$	2,045	$	2,045
Liabilities:
Credit facility	$	(400,000)	$	(400,000)	$	(193,000)	$	(193,000)
Notes payable	$	(1,460,000)	$	(1,261,390)	$	(1,475,000)	$	(1,302,767)
Mortgage debt	$	(128,127)	$	(127,628)	$	(164,929)	$	(163,129)

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Tenant Operating Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Tenant Operating Leases

Tenant Operating Leases

The Company is a lessor of outpatient medical facilities and other health care facilities. Leases have expirations from 2023 through 2042. As of September 30, 2023, the future minimum rental payments on non-cancelable leases, exclusive of expense recoveries and minimum rental payments for assets classified as held for sale, if applicable, were as follows (in thousands):

2023	$	92,037
2024	363,106
2025	346,518
2026	289,162
2027	237,149
Thereafter	818,876
Total	$	2,146,848

For the three months ended September 30, 2023 and 2022, the Company recognized $134.5 million and $128.6 million, respectively, of rental and other lease-related income related to our operating leases, of which $39.8 million and $36.6 million, respectively, were variable lease payments. For the nine month periods ending September 30, 2023 and 2022, the Company recognized $397.1 million and $385.8 million, respectively, of rental and other leased-related income with respect to our operating leases, of which $115.2 million and $107.5 million, respectively, were variable lease payments.

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Rent Expense

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Rent Expense

Rent Expense

The Company leases the rights to parking structures at two of its properties, the air that one property occupies, and the land upon which 97 of its properties are located from third party landowners pursuant to separate leases. In addition, the Company has nine corporate leases, primarily for office space.

The Company’s leases include both fixed and variable rental payments and may also include escalation clauses and renewal options. These leases have terms of up to 92 years remaining, excluding extension options, with a weighted average remaining term of 43 years.

At the inception of a new lease, the Company establishes an operating or finance lease asset and operating or finance lease liability calculated as the present value of future minimum lease payments. As the Company’s leases do not provide an implicit rate, the Company calculates a discount rate that approximates its incremental borrowing rate available at lease commencement in order to determine the present value of future minimum lease payments. The approximated weighted average discount rate was 4.4% as of September 30, 2023. There are no operating or finance leases that have not yet commenced that would have a significant impact on the Company’s consolidated balance sheets.

As of September 30, 2023, the future minimum lease obligations under non-cancelable parking, air, ground, and corporate leases were as follows (in thousands):

2023	$	1,261
2024	5,129
2025	5,101
2026	5,090
2027	5,092
Thereafter	248,386
Total undiscounted lease payments	$	270,059
Less: Interest	(165,257)
Present value of lease liabilities	$	104,802

Lease costs consisted of the following for the nine months ended September 30, 2023 (in thousands):

Fixed lease cost	$	2,480
Variable lease cost	1,007
Total lease cost	$	3,487

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Credit Concentration

9 Months Ended

Sep. 30, 2023

Concentration Risks, Types, No Concentration Percentage [Abstract]

Credit Concentration

Credit Concentration

The Company uses annualized base rent (“ABR”) as its credit concentration metric. ABR is calculated by multiplying contractual base rent for the month ended September 30, 2023 by 12, excluding the impact of concessions and straight-line rent. The following table summarizes certain information about the Company’s top five tenant credit concentrations as of September 30, 2023 (in thousands):

Tenant	Total ABR		Percent of ABR
CommonSpirit - CHI - Nebraska	$	18,666	5.1	%
Northside Hospital	16,553		4.5	%
UofL Health - Louisville, Inc.	14,656		4.0	%
HonorHealth	11,287		3.1	%
US Oncology	11,047		3.0	%
Remaining portfolio	295,897		80.3	%
Total	$	368,106	100.0	%

ABR collected from the Company’s top five tenant relationships comprises 19.7% of its total ABR as of September 30, 2023. Total ABR from CommonSpirit-affiliated tenants totals 14.9%, including the affiliate disclosed above.

The following table summarizes certain information about the Company’s top five geographic concentrations as of September 30, 2023:

State	Total ABR		Percent of ABR
Texas	$	49,405	13.4	%
Georgia	27,099		7.4	%
Florida	25,495		6.9	%
Indiana	23,529		6.4	%
Arizona	21,817		5.9	%
Other	220,761		60.0	%
Total	$	368,106	100.0	%

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Earnings Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following table shows the amounts used in computing the Trust’s basic and diluted earnings per share (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator for earnings per share - basic:
Net income	$	12,891	$	66,280	$	36,645	$	98,155
Net income attributable to noncontrolling interests:
Operating Partnership	(505)		(3,252)		(1,443)		(4,830)
Partially owned properties	(51)		(70)		(121)		(384)
Numerator for earnings per share - basic	$	12,335	$	62,958	$	35,081	$	92,941
Numerator for earnings per share - diluted:
Numerator for earnings per share - basic	$	12,335	$	62,958	$	35,081	$	92,941
Noncontrolling interest - Operating Partnership income	505		3,252		1,443		4,830
Numerator for earnings per share - diluted	$	12,840	$	66,210	$	36,524	$	97,771
Denominator for earnings per share - basic and diluted:
Weighted average number of shares outstanding - basic	238,480,299		226,529,041		238,124,981		225,743,856
Effect of dilutive securities:
Noncontrolling interest - Operating Partnership units	9,814,296		11,791,685		9,831,470		11,872,328
Restricted common shares	123,801		100,790		127,715		105,170
Restricted share units	1,026,916		1,476,946		1,142,747		1,424,029
Denominator for earnings per share - diluted:	249,445,312		239,898,462		249,226,913		239,145,383
Earnings per share - basic	$	0.05	$	0.28	$	0.15	$	0.41
Earnings per share - diluted	$	0.05	$	0.28	$	0.15	$	0.41

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Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On October 29, 2023, the Trust and the Operating Partnership entered into an Agreement and Plan of Merger (the “Merger Agreement”) among the Trust, the Operating Partnership, Healthpeak Properties, Inc. (“Healthpeak”), Alpine Sub, LLC (“Alpine Sub”) and Alpine OP Sub, LLC (“Alpine OP Sub”). The Merger Agreement provides for (a) the merger of the Trust with and into Alpine Sub (the “Company Merger”), with Alpine Sub surviving as a wholly owned subsidiary of Healthpeak (the “Company Surviving Entity”), (b) immediately following the effectiveness of the Company Merger, the contribution by Healthpeak to Healthpeak OP, LLC (“Healthpeak OP”), of all of the outstanding equity interests in the Company Surviving Entity (the “Contribution”) and (c) immediately following the Contribution, the merger of the Operating Partnership with and into Alpine OP Sub (the “Partnership Merger”), with Alpine OP Sub surviving as a subsidiary of Healthpeak OP (the “Partnership Surviving Entity”). The consummation of the Mergers is subject to the satisfaction or waiver of certain closing conditions, including the approval of both the Trust’s and Healthpeak’s shareholders.

Pursuant to the terms and subject to the conditions of the Merger Agreement, at the date and time the Company Merger becomes effective (the “Company Merger Effective Time”), each common share of the Trust (other than common shares to be canceled in accordance with the Merger Agreement), will automatically be converted into the right to receive 0.674 (the “Exchange Ratio”) validly issued, fully paid and non-assessable shares of Healthpeak common stock, par value $1.00 per share (“Healthpeak Common Stock”) (the “Merger Consideration”), without interest, but subject to any withholding required under applicable tax laws. Holders of the Trust’s common shares will receive cash in lieu of fractional shares of Healthpeak Common Stock. Pursuant to the terms and subject to the conditions of the Merger Agreement, immediately after the Contribution and at the date and time the Partnership Merger becomes effective (the “Partnership Merger Effective Time”), each OP Unit issued and outstanding immediately prior to the Partnership Merger Effective Time, subject to the terms and conditions set forth in the Merger Agreement, will automatically be converted into and become a number of units in the Partnership Surviving Entity equal to the Exchange Ratio.

The Merger Agreement contains customary representations and warranties from each of Healthpeak and the Trust. The Trust has agreed to customary pre-closing covenants, including covenants to use commercially reasonable efforts to carry on its

business in all material respects in the ordinary course, consistent with past practice, and to refrain from taking certain actions without Healthpeak’s consent. Healthpeak has agreed to customary pre-closing covenants, including a more limited set of covenants to refrain from taking certain actions without the Trust’s consent and to use commercially reasonable efforts to carry on its business in all material respects in the ordinary course, consistent with past practice. Each party has agreed to additional covenants, including, among others, covenants relating to (i) the Trust’s obligation to call a meeting of its shareholders to approve the Company Merger, (ii) Healthpeak’s obligation to call a meeting of its stockholders to approve the Healthpeak Common Stock Issuance (as defined in the Merger Agreement) and the Parent Charter Amendment (as defined in the Merger Agreement) and (iii) each party’s non-solicitation obligations related to alternative acquisition proposals. Healthpeak’s board of directors and the Trust’s Board of Trustees each have unanimously approved the Merger Agreement. The Mergers are expected to close during the first half of 2024. In connection with the Merger Agreement, the Trust suspended the 2023 ATM Program.

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Insider Trading Arrangements	3 Months Ended	9 Months Ended
	Sep. 30, 2023 shares	Sep. 30, 2023 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
John T Thomas [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On August 14, 2023, John T. Thomas, President and Chief Executive Officer of the Trust entered into a prearranged trading plan (the “10b5-1 Plan”) that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 50,000 shares of common stock, subject to price and trading thresholds set under the plan. The 10b5-1 Plan begins on November 13, 2023, and expires when all of the shares are sold or on August 14, 2024, whichever occurs first.
Name	John T. Thomas
Title	President and Chief Executive Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	August 14, 2023
Arrangement Duration	275 days
Aggregate Available	50,000	50,000

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Noncontrolling Interests

Noncontrolling Interests

The Company presents the portion of any equity it does not own in entities that it controls (and thus consolidates) as noncontrolling interests and classifies such interests as a component of consolidated equity, separate from the Company’s total shareholders’ equity, on the consolidated balance sheets.

Operating Partnership: Noncontrolling interests in the Company include partnership interests of the Operating Partnership (“OP Units”) held by other investors. Net income or loss is allocated to noncontrolling interests (limited partners) based on their respective ownership percentage of the Operating Partnership. The ownership percentage is calculated by dividing the number of OP Units held by the noncontrolling interests by the total OP Units held by the noncontrolling interests and the Trust. Issuance of additional common shares and OP Units changes the ownership interests of both the noncontrolling interests and the Trust. Such transactions and the related proceeds are treated as capital transactions. 

As of September 30, 2023, the Trust held a 96.1% interest in the Operating Partnership. As the sole general partner and the majority interest holder, the Trust consolidates the financial position and results of operations of the Operating Partnership.

Partially Owned Properties: The Trust reflects noncontrolling interests in partially owned properties on the consolidated balance sheets for the portion of consolidated properties that are not wholly owned by the Company. The earnings or losses from those properties attributable to the noncontrolling interests are reflected as noncontrolling interests in partially owned properties in the consolidated statements of income.

Tax Status of Dividends and Distributions

Tax Status of Dividends and Distributions

The Company’s distributions of current and accumulated earnings and profits for U.S. federal income tax purposes generally are taxable to shareholders as ordinary income. Distributions in excess of these earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent thereof (non-dividend distributions) and thereafter as taxable gain.

Any cash distributions received by an OP Unit holder in respect of its OP Units generally will not be taxable to such OP Unit holder for U.S. federal income tax purposes, to the extent that such distribution does not exceed the OP Unit holder’s basis in its OP Units. Any such distribution will instead reduce the OP Unit holder’s basis in its OP Units (and OP Unit holders will be subject to tax on the taxable income allocated to them by the Operating Partnership in respect of their OP Units when such income is earned by the Operating Partnership, with such income allocation increasing the OP Unit holders’ basis in their OP Units).

The Company has elected taxable REIT subsidiary (“TRS”) status for certain of its corporate subsidiaries and, as a result, these entities will incur both federal and state income taxes on any taxable income of such entities after consideration of any net operating losses. To date, these income taxes have been de minimis.

Real Estate Loans Receivable, Net

Real Estate Loans Receivable, Net

Real estate loans receivable consists of nine mezzanine loans, three term loans, and two construction loans as of September 30, 2023. Generally, each mezzanine loan is collateralized by a pledge of the borrower’s ownership interest in the respective real estate owner, each term loan is secured by a mortgage on a related outpatient medical facility, and construction loans are secured by mortgages on the land and the improvements as constructed.

Rental and Related Revenues

Rental and Related Revenues

Rental revenue is recognized on a straight-line basis over the terms of the related leases when collectability is probable. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue for amounts more or less than amounts currently due from tenants. Amounts recognized in excess of amounts currently due from tenants are included in other assets and were approximately $105.0 million and $101.3 million as of September 30, 2023 and December 31, 2022, respectively. If the Company determines that collectability of straight-line rents is not probable, income recognition is limited to the lesser of cash collected, or lease income reflected on a straight-line basis, plus variable rent when it becomes accruable.

In accordance with ASC 842, Leases, Topic 842, if the collectability of a lease changes after the commencement date, any difference between lease income that would have been recognized and the lease payments shall be recognized as an adjustment to lease income. Bad debt recognized as an adjustment to rental and related revenues was $0.9 million for the nine months ended September 30, 2023 and $0.2 million for the nine months ended September 30, 2022.

Rental revenue is adjusted by the amortization of lease inducements and above-market or below-market rents on certain leases. Lease inducements and above-market or below-market rents are amortized on a straight-line basis over the remaining lease term. Rental and related revenues also include expense recoveries, which relate to tenant reimbursement of real estate taxes, insurance, and other operating expenses that are recognized in the period the applicable expenses are incurred. The reimbursements are recorded gross, as these costs are incurred by the Company and reimbursed by the tenants. The Company has certain tenants with absolute net leases. Under these lease agreements, the tenant is responsible for operating and building expenses and the Company does not recognize expense recoveries.

Derivative Instruments

Derivative Instruments

When the Company has derivative instruments, it records them either as an asset or a liability measured at their fair value unless they qualify for a normal purchase or normal sale exception. When specific hedge accounting criteria are not met or if the Company does not elect to apply for hedge accounting, changes in the Company’s derivative instruments’ fair value are recognized currently in earnings. If hedge accounting is applied to a derivative instrument, the entire change in the fair value of its derivatives designated and qualified as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) on the consolidated balance sheets and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings.

To manage interest rate risk for certain of its variable-rate debt, the Company uses interest rate swaps as part of its risk management strategy. These derivatives are designed to mitigate the risk of future interest rate increases by providing a fixed interest rate for a limited, pre-determined period of time. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

In the normal course of business, a variety of financial instruments are used to manage or hedge interest rate risk. When specific hedge accounting criteria are not met, that changes in a derivative’s fair value be recognized currently in earnings. Changes in the fair market values of the Company’s derivative instruments are recorded in the consolidated statements of income if such derivatives do not qualify for, or the Company does not elect to apply for, hedge accounting. As a result of the Company’s adoption of ASU 2017-12 as of January 1, 2019, the change in the fair value of our derivatives designated and qualified as cash flow hedges are recorded in accumulated other comprehensive income on the consolidated balance sheets and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings. During the three months ended September 30, 2023, the Company de-designated an interest rate swap upon the repayment of the related debt instrument and reclassified the $1.8 million accumulated gain from other comprehensive income to earnings. This derivative instrument has a fair value of $1.6 million as of September 30, 2023, and is classified in other assets. Future changes in value on this derivative instrument, which matures on October 31, 2024, will be recorded directly in earnings.

As of September 30, 2023, the Company had three outstanding interest rate swaps designated as cash flow hedges of interest rate risk. See Note 2 (Summary of Significant Accounting Policies) for a further discussion of our derivatives. In

addition, the Company recognizes its share of other comprehensive income related to derivative instruments held by unconsolidated entities.

Reclassifications

Reclassifications

Certain amounts in the accompanying consolidated balance sheet for 2022 have been reclassified to conform to the 2023 consolidated financial statement presentation. The reclassifications had no impact on total assets or any balance sheet total or subtotal.

New Accounting Pronouncements

New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional relief to applying reference rate reform to changing reference rates, contracts, hedging relationships, and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”). The amendments in this update may be applied through December 31, 2024.

On March 31, 2023, the Operating Partnership, as borrower, and the Trust, as guarantor, executed a First Amendment to the Third Amended and Restated Credit Agreement to update the benchmark provisions to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”), as the reference rate for the purpose of calculating interest under the agreement. The Company also amended its fixed interest rate swap agreement on its mortgage debt to update the reference rate from LIBOR to SOFR. As a result, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

Fair Value Measurements

The Company’s derivative instruments as of September 30, 2023 consist of four interest rate swaps, of which three are designated as cash flow hedges of interest rate risk, as detailed in the Derivative Instruments section of Note 7 (Derivatives) and Note 2 (Summary of Significant Accounting Policies) of this report.

The interest rate swaps are not traded on an exchange. The Company’s derivative assets and liabilities are recorded at fair value based on a variety of observable inputs including contractual terms, interest rate curves, yield curves, measure of volatility, and correlations of such inputs. The Company measures its derivatives at fair value on a recurring basis. The fair values are based on Level 2 inputs described above. The Company considers its own credit risk, as well as the credit risk of its counterparties, when evaluating the fair value of its derivatives.

The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. This generally includes assets subject to impairment. There were no such assets measured at fair value as of September 30, 2023.

The carrying amounts of cash and cash equivalents, tenant receivables, payables, and accrued interest are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for real estate loans receivable and mortgage debt are estimated based on rates currently prevailing for similar instruments of similar maturities and are based primarily on Level 2 inputs.

Stock-based Compensation

The Company follows ASC 718, Compensation - Stock Compensation (“ASC 718”), in accounting for its share-based payments. This guidance requires measurement of the cost of employee services received in exchange for stock compensation based on the grant-date fair value of the employee stock awards. This cost is recognized as compensation expense ratably over the employee’s requisite service period. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized when incurred. Share-based payments classified as liability awards are marked to fair value at each reporting period. Any common shares issued pursuant to the Company's incentive equity compensation and employee stock purchase plans will result in the Operating Partnership issuing OP Units to the Trust on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances.

Certain of the Company’s employee stock awards vest only upon the achievement of performance targets. ASC 718 requires recognition of compensation cost only when achievement of performance conditions is considered probable. Consequently, the Company’s determination of the amount of stock compensation expense requires judgment in estimating the probability of achievement of these performance targets. Subsequent changes in actual experience are monitored and estimates are updated as information is available.

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Organization and Business (Tables)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule Of Sale Or Issuance Of Common Stock

During the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023, the Trust issued and sold common shares through the 2021 ATM Program as follows (net proceeds in thousands):

	Common shares sold	Weighted average price		Net proceeds
Quarter ended March 31, 2023	4,400,000	$	15.10	$	65,776
Quarter ended June 30, 2023	—	—		—
Quarter ended September 30, 2023	—	—		—
Year to date	4,400,000	$	15.10	$	65,776

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Investment and Disposition Activity (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the acquisition date fair values of the assets acquired and the liabilities assumed, as well as follow-on capitalized costs during the nine months ended September 30, 2023, which the Company determined using Level 2 and Level 3 inputs (in thousands):

	1st Quarter		2nd Quarter		3rd Quarter		Total
Land	$	1,356	$	6,016	$	1,345	$	8,717
Building and improvements	1,294		28,353		2,459		32,106
In-place lease intangibles	—		3,491		919		4,410
Below market in-place lease intangibles	—		—		(553)		(553)
Net assets acquired	$	2,650	$	37,860	$	4,170	$	44,680
Satisfaction of real estate loans receivable	—		(5,398)		—		(5,398)
Cash used in acquisition of investment property	$	2,650	$	32,462	$	4,170	$	39,282

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Intangibles (Tables)

9 Months Ended

Sep. 30, 2023

Finite-Lived Intangible Assets, Net [Abstract]

Summary of the carrying amount of intangible assets and liabilities

The following is a summary of the carrying amount of intangible assets and liabilities as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023						December 31, 2022
	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Assets
In-place leases	$	449,716	$	(272,643)	$	177,073	$	445,583	$	(241,643)	$	203,940
Above-market leases	$	59,752	$	(34,282)	$	25,470	$	59,752	$	(30,096)	$	29,656
Liabilities
Below-market leases	$	36,962	$	(13,792)	$	23,170	$	37,002	$	(12,621)	$	24,381

Summary of the carrying amount of acquired lease intangibles

The following is a summary of acquired lease intangible amortization for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Amortization expense related to in-place leases	$	10,204	$	10,629	$	31,278	$	32,814
Decrease in rental income related to above-market leases	1,373		1,384		4,187		4,390
Increase in rental income related to below-market leases	594		556		1,764		1,522

Schedule of future amortization of the acquired lease intangibles

Future aggregate net amortization of acquired lease intangibles as of September 30, 2023, is as follows (in thousands):

	Net Decrease (Increase)  in Revenue		Net Increase in  Expenses
2023	$	748	$	9,642
2024	2,887		35,184
2025	2,316		29,663
2026	1,161		23,548
2027	994		20,625
Thereafter	(5,806)		58,411
Total	$	2,300	$	177,073

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2023

Other Assets, Unclassified [Abstract]

Schedule of other assets

Other assets consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Straight line rent receivable, net	$	104,991	$	101,306
Interest rate swaps	14,731		2,045
Leasing commissions, net	14,043		13,231
Prepaid expenses	14,013		11,009
Lease inducements, net	7,577		7,894
Escrows	1,574		1,565
Notes receivable, net	363		370
Other	8,850		9,387
Total	$	166,142	$	146,807

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Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of debt

The following is a summary of debt as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Fixed interest mortgage notes (1)	$	23,330	$	59,776
Variable interest mortgage notes (2)	104,797		105,153
Total mortgage debt	128,127		164,929
$1.0 billion unsecured revolving credit facility due September 2025 (3)	—		193,000
$400 million unsecured term borrowing bearing fixed interest of 4.693%, due May 2028 (4)	400,000		—
$400 million senior unsecured notes bearing fixed interest of 4.30%, due March 2027	400,000		400,000
$350 million senior unsecured notes bearing fixed interest of 3.95%, due January 2028	350,000		350,000
$500 million senior unsecured notes bearing fixed interest of 2.625%, due November 2031	500,000		500,000
$135 million senior unsecured notes bearing fixed interest of 4.43% to 4.74%, due January 2026 to 2031	135,000		150,000
$75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027	75,000		75,000
Total principal	1,988,127		1,832,929
Unamortized deferred financing costs	(9,336)		(7,453)
Unamortized discounts	(6,535)		(7,359)
Total debt	$	1,972,256	$	1,818,117

(1)As of September 30, 2023, one fixed interest mortgage note bears interest of 4.63%, due in 2024, and is collateralized by one property with a net book value of $37.2 million. As of December 31, 2022, fixed interest mortgage notes bear interest from 3.33% to 4.63%, due in 2024, with a weighted average interest rate of 3.85%. The notes are collateralized by two properties with a net book value of $94.9 million. one mortgage note bears interest at LIBOR plus 1.90% and the Trust entered into a pay-fixed receive-variable interest rate swap, fixing the variable component at 1.43% as of December 31, 2022.

(2)Variable interest mortgage notes bear variable interest of SOFR plus 1.85% and PRIME plus 2.75% for a weighted average interest rate of 7.35% as of September 30, 2023. Variable interest mortgage notes bear variable interest of SOFR plus 1.85% and LIBOR plus 2.75% for a weighted average interest rate of 6.20% as of December 31, 2022. The notes are due in 2026 and 2028 and collateralized by four properties with a net book value of $284.4 million as of September 30, 2023 and $295.5 million as of December 31, 2022.

(3)The unsecured revolving credit facility bears variable interest of SOFR plus 0.95%, inclusive of a 0.10% SOFR index adjustment, as of September 30, 2023 and LIBOR plus 0.85% as of December 31, 2022.

(4)The Company’s borrowings under the term loan feature of the Credit Agreement (as defined below) bear interest at a rate equal to 1.10%, inclusive of a 0.10% SOFR index adjustment, plus Daily Simple SOFR as of September 30, 2023 based on the Company’s current credit rating. The Company entered into fixed-for-floating interest rate swaps for the full borrowing amount, fixing the SOFR component of this rate at 3.59%, and a current all-in fixed rate of 4.69%.

Schedule of adjusted LIBOR rate loans and interest rates based on credit rating

Base Rate Loans, Adjusted SOFR Loans, and Letters of Credit (each, as defined in the Credit Agreement) will be subject to interest rates, based upon the borrower’s investment grade rating as follows:

Credit Rating	Applicable Margin for Revolving Loans: SOFR Loans and Letter of Credit Fee	Applicable Margin for Revolving Loans: Base Rate Loans		Applicable Margin for Term Loans: SOFR Loans	Applicable Margin for Term Loans: Base Rate Loans
At Least A- or A3	SOFR + 0.725%	—	%	SOFR + 0.85%	—	%
At Least BBB+ or Baa1	SOFR + 0.775%	—	%	SOFR + 0.90%	—	%
At Least BBB or Baa2	SOFR + 0.85%	—	%	SOFR + 1.00%	—	%
At Least BBB- or Baa3	SOFR + 1.05%	0.05	%	SOFR + 1.25%	0.25	%
Below BBB- or Baa3	SOFR + 1.40%	0.40	%	SOFR + 1.65%	0.65	%

Schedule of principal payments due on debt

Scheduled principal payments due on consolidated debt as of September 30, 2023 are as follows (in thousands):

2023	$	255
2024	23,669
2025	25,476
2026	170,476
2027	425,476
Thereafter	1,342,775
Total Payments	$	1,988,127

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Derivatives (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instrument Detail [Abstract]

Schedule of interest rate derivatives

The following table presents the fair value of the Company’s derivative financial instruments, as well as their classification on the Company’s consolidated balance sheets as of September 30, 2023 (in thousands):

Derivatives Instruments	Maturity Date	Number of Instruments	Total Notional Amount		Interest Rate		Balance Sheet Location	Fair Value
Cash flow hedge interest rate swaps	5/24/2028	3	$	400,000	3.59	%	Other Assets	$	13,152
Interest rate swap	10/31/2024	1	36,050		1.37	%	Other Assets	1,579
Total		4	$	436,050				$	14,731

The following tables provide a summary of the effect of interest rate swaps on the Company’s accompanying consolidated statements of income and comprehensive income for the nine months ended September 30, 2023 and 2022, respectively (amounts in thousands):

Derivative Instruments as of September 30, 2023	Maturity Date	Amount of Gain/(Loss) Recognized in OCI on Derivative		Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Cash flow hedge interest rate swaps	5/24/2028	$	13,152	Interest expense	$	—
Interest rate swap	10/31/2024	—		Interest expense	1,763
Total		$	13,152		$	1,763

Derivative Instruments as of September 30, 2022	Maturity Date	Amount of Gain/(Loss) Recognized in OCI on Derivative		Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Interest rate swap	10/31/2024	$	2,523	Interest expense	$	—

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Accrued Expenses and Other Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

Schedule of accrued expenses and other liabilities

Accrued expenses and other liabilities consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Real estate taxes payable	$	30,893	$	23,303
Prepaid rent	23,537		21,062
Accrued interest	11,683		18,196
Accrued expenses	7,841		7,920
Accrued incentive compensation	5,342		2,700
Security deposits	4,586		4,338
Tenant improvement allowances	1,853		1,831
Other	9,902		8,370
Total	$	95,637	$	87,720

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Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of non-vested restricted common shares

A summary of the status of the Trust’s non-vested restricted common shares as of September 30, 2023 and changes during the nine month period then ended follow:

	Common Shares	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2022	272,898	$	16.69
Granted	342,939	14.57
Vested	(239,602)	16.54
Forfeited	(364)	17.45
Non-vested at September 30, 2023	375,871	$	14.84

Schedule of weighted average grant date fair value assumptions

The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $18.71 per unit for the March 2023 grant using the following assumptions:

Volatility	23.4		%
Dividend assumption	reinvested
Expected term in years	2.83 years
Risk-free rate	4.70		%
Share price (per share)	$	14.70

Summary of the activity in the restricted share units

The following is a summary of the activity in the Trust’s restricted share units during the nine months ended September 30, 2023: 

	Executive Awards				Trustee Awards
	Restricted Share Units		Weighted Average Grant Date Fair Value		Restricted Share Units	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2022	1,046,940		$	21.41	77,992	$	16.60
Granted	355,388		15.90		73,860	14.66
Vested	(223,579)	(1)	24.36		(49,890)	16.74
Non-vested at September 30, 2023	1,178,749		$	19.19	101,962	$	15.13

(1)Restricted units vested by Company executives in 2023 resulted in the issuance of 652,851 common shares, less 290,380 common shares withheld to cover minimum withholding tax obligations.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of fair value of other financial instruments

The following table presents the fair value of the Company’s financial instruments (in thousands):

	September 30, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Real estate loans receivable, net	$	79,884	$	76,935	$	104,973	$	102,162
Notes receivable, net	$	363	$	363	$	370	$	370
Derivative assets	$	14,731	$	14,731	$	2,045	$	2,045
Liabilities:
Credit facility	$	(400,000)	$	(400,000)	$	(193,000)	$	(193,000)
Notes payable	$	(1,460,000)	$	(1,261,390)	$	(1,475,000)	$	(1,302,767)
Mortgage debt	$	(128,127)	$	(127,628)	$	(164,929)	$	(163,129)

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Tenant Operating Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Lessor, operating lease, payments to be received, maturity

As of September 30, 2023, the future minimum rental payments on non-cancelable leases, exclusive of expense recoveries and minimum rental payments for assets classified as held for sale, if applicable, were as follows (in thousands):

2023	$	92,037
2024	363,106
2025	346,518
2026	289,162
2027	237,149
Thereafter	818,876
Total	$	2,146,848

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Rent Expense (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of future minimum lease obligations under non-cancelable ground leases

As of September 30, 2023, the future minimum lease obligations under non-cancelable parking, air, ground, and corporate leases were as follows (in thousands):

2023	$	1,261
2024	5,129
2025	5,101
2026	5,090
2027	5,092
Thereafter	248,386
Total undiscounted lease payments	$	270,059
Less: Interest	(165,257)
Present value of lease liabilities	$	104,802

Lease cost

Lease costs consisted of the following for the nine months ended September 30, 2023 (in thousands):

Fixed lease cost	$	2,480
Variable lease cost	1,007
Total lease cost	$	3,487

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Credit Concentration (Tables)

9 Months Ended

Sep. 30, 2023

Concentration Risks, Types, No Concentration Percentage [Abstract]

Schedules of concentration of risk, by risk factor

The following table summarizes certain information about the Company’s top five tenant credit concentrations as of September 30, 2023 (in thousands):

Tenant	Total ABR		Percent of ABR
CommonSpirit - CHI - Nebraska	$	18,666	5.1	%
Northside Hospital	16,553		4.5	%
UofL Health - Louisville, Inc.	14,656		4.0	%
HonorHealth	11,287		3.1	%
US Oncology	11,047		3.0	%
Remaining portfolio	295,897		80.3	%
Total	$	368,106	100.0	%

The following table summarizes certain information about the Company’s top five geographic concentrations as of September 30, 2023:

State	Total ABR		Percent of ABR
Texas	$	49,405	13.4	%
Georgia	27,099		7.4	%
Florida	25,495		6.9	%
Indiana	23,529		6.4	%
Arizona	21,817		5.9	%
Other	220,761		60.0	%
Total	$	368,106	100.0	%

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of amounts used in computing basic and diluted earnings per share

The following table shows the amounts used in computing the Trust’s basic and diluted earnings per share (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator for earnings per share - basic:
Net income	$	12,891	$	66,280	$	36,645	$	98,155
Net income attributable to noncontrolling interests:
Operating Partnership	(505)		(3,252)		(1,443)		(4,830)
Partially owned properties	(51)		(70)		(121)		(384)
Numerator for earnings per share - basic	$	12,335	$	62,958	$	35,081	$	92,941
Numerator for earnings per share - diluted:
Numerator for earnings per share - basic	$	12,335	$	62,958	$	35,081	$	92,941
Noncontrolling interest - Operating Partnership income	505		3,252		1,443		4,830
Numerator for earnings per share - diluted	$	12,840	$	66,210	$	36,524	$	97,771
Denominator for earnings per share - basic and diluted:
Weighted average number of shares outstanding - basic	238,480,299		226,529,041		238,124,981		225,743,856
Effect of dilutive securities:
Noncontrolling interest - Operating Partnership units	9,814,296		11,791,685		9,831,470		11,872,328
Restricted common shares	123,801		100,790		127,715		105,170
Restricted share units	1,026,916		1,476,946		1,142,747		1,424,029
Denominator for earnings per share - diluted:	249,445,312		239,898,462		249,226,913		239,145,383
Earnings per share - basic	$	0.05	$	0.28	$	0.15	$	0.41
Earnings per share - diluted	$	0.05	$	0.28	$	0.15	$	0.41

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Organization and Business - Additional Information (Details) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01

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Organization and Business - ATM Program (Details) - Private Placement - USD ($)	1 Months Ended		3 Months Ended			9 Months Ended
	Aug. 31, 2023	May 31, 2021	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2023
Maximum | 2021 ATM Program
Class of Stock [Line Items]
Aggregate offering price of common stock		$ 500,000,000
Maximum | 2023 ATM Program
Class of Stock [Line Items]
Aggregate offering price of common stock	$ 600,000,000
Operating Partnership | 2021 ATM Program
Class of Stock [Line Items]
Common shares sold (in shares)			0	0	4,400,000	4,400,000
Weighted average price (in dollars per share)			$ 0	$ 0	$ 15.10	$ 15.10
Proceeds from issuance of common stock			$ 0	$ 0	$ 65,776,000	$ 65,776,000
Operating Partnership | 2023 ATM Program
Class of Stock [Line Items]
Sale of stock, remaining authorized amount			$ 600,000,000			$ 600,000,000

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Summary of Significant Accounting Policies - Noncontrolling Interests and Redeemable Noncontrolling Interests (Details)	9 Months Ended
	Sep. 30, 2023
Physicians Realty Trust
Business Acquisition [Line Items]
Percentage of interest held	96.10%

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Summary of Significant Accounting Policies - Dividends and Distributions (Details) - $ / shares		3 Months Ended		9 Months Ended
	Sep. 21, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accounting Policies [Abstract]
Dividends and distributions declared per common share and OP Unit (in dollars per share)	$ 0.23	$ 0.23	$ 0.23	$ 0.69	$ 0.69

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Summary of Significant Accounting Policies - Real Estate Loans Receivable, Net (Details) $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($) loan
Property, Plant and Equipment [Line Items]
Financing receivable, allowance for credit loss | $	$ 0.4
Mezzanine Loan Receivable
Property, Plant and Equipment [Line Items]
Number of mezzanine loans collateralized	9
Term Loan Receivable
Property, Plant and Equipment [Line Items]
Number of mezzanine loans collateralized	3
Construction Loans
Property, Plant and Equipment [Line Items]
Number of mezzanine loans collateralized	2

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Summary of Significant Accounting Policies - Rental and Related Revenues (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Accounting Policies [Abstract]
Straight line rent receivable, net	$ 104,991		$ 101,306
Operating lease, bad debt expense	$ 900	$ 200

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Summary of Significant Accounting Policies - Derivative Instruments (Details)	Sep. 30, 2023 instrument
Derivative [Line Items]
Number of Instruments	4
Cash flow hedge interest rate swaps
Derivative [Line Items]
Number of Instruments	3
Cash flow hedge interest rate swaps | Designated as Hedging Instrument
Derivative [Line Items]
Number of Instruments	3
Interest rate swap
Derivative [Line Items]
Number of Instruments	1

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Investment and Disposition Activity - Narrative (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($) earn-outAgreement medicalFacility	Sep. 30, 2023 USD ($) land medicalFacility earn-outAgreement condominiumUnit	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Asset Acquisition [Line Items]
Contractual obligation	$ 40,500	$ 40,500
Construction in progress	7,400	12,700
Real estate loans receivable, net	79,883	79,883		$ 104,973
Investment in unconsolidated entities, net		3,671	$ 13,349
Payments to acquire real estate, payments for loans receivable and payments for real estate investments	16,800	81,000
Asset acquisition, capitalized costs		2,000
InterMed MOB - Davis Joint Venture
Asset Acquisition [Line Items]
Investment in unconsolidated entities, net		2,000
IJFI Properties, LLC
Asset Acquisition [Line Items]
Payments to acquire investments	$ 1,300	1,300
Disposal Group, Held-for-sale, Not Discontinued Operations
Asset Acquisition [Line Items]
Proceeds from divestiture of businesses		$ 2,600
Number of real estate properties sold | medicalFacility	1	1
Health Care Properties And Medical Condominiums
Asset Acquisition [Line Items]
Asset acquisition, consideration transferred		$ 38,500
Outpatient Medical Facilities
Asset Acquisition [Line Items]
Number of outpatient medical facilities | medicalFacility	1	3
Medical Condominium Units
Asset Acquisition [Line Items]
Number of medical condominium units | condominiumUnit		3
Parcels Of Land
Asset Acquisition [Line Items]
Asset acquisition, consideration transferred		$ 1,700
Number of land parcels acquired | land		2
Earn-Out Investments
Asset Acquisition [Line Items]
Asset acquisition, consideration transferred		$ 2,200
Number of earn-out agreements | earn-outAgreement	2	6
Outpatient Medical Facility And Land Parcel
Asset Acquisition [Line Items]
Asset acquisition, consideration transferred	$ 3,500
Construction Loans
Asset Acquisition [Line Items]
Real estate loans receivable, net	35,800	$ 35,800
Payments for (proceeds from) loans receivable		10,700
Term Loan
Asset Acquisition [Line Items]
Payments for (proceeds from) loans receivable	$ 5,900	$ 13,200

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Investment and Disposition Activity - Summary of Acquisition Date Fair Values (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023
Asset Acquisition [Line Items]
Land	$ 8,717
Building and improvements	32,106
Net assets acquired	44,680
Satisfaction of real estate loans receivable	(5,398)
Cash used in acquisition of investment property	39,282
1st Quarter
Asset Acquisition [Line Items]
Land			$ 1,356
Building and improvements			1,294
Net assets acquired			2,650
Satisfaction of real estate loans receivable			0
Cash used in acquisition of investment property			2,650
2nd Quarter
Asset Acquisition [Line Items]
Land		$ 6,016
Building and improvements		28,353
Net assets acquired		37,860
Satisfaction of real estate loans receivable		(5,398)
Cash used in acquisition of investment property		32,462
3rd Quarter
Asset Acquisition [Line Items]
Land	1,345
Building and improvements	2,459
Net assets acquired	4,170
Satisfaction of real estate loans receivable	0
Cash used in acquisition of investment property	4,170
In-place lease intangibles
Asset Acquisition [Line Items]
In-place lease intangibles	4,410
In-place lease intangibles | 1st Quarter
Asset Acquisition [Line Items]
In-place lease intangibles			0
In-place lease intangibles | 2nd Quarter
Asset Acquisition [Line Items]
In-place lease intangibles		3,491
In-place lease intangibles | 3rd Quarter
Asset Acquisition [Line Items]
In-place lease intangibles	919
Below market in-place lease intangibles
Asset Acquisition [Line Items]
Below market in-place lease intangibles	(553)
Below market in-place lease intangibles | 1st Quarter
Asset Acquisition [Line Items]
Below market in-place lease intangibles			$ 0
Below market in-place lease intangibles | 2nd Quarter
Asset Acquisition [Line Items]
Below market in-place lease intangibles		$ 0
Below market in-place lease intangibles | 3rd Quarter
Asset Acquisition [Line Items]
Below market in-place lease intangibles	$ (553)

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Intangibles - Summary of Carrying Amount of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Liabilities
Below-market leases, net	$ 23,170	$ 24,381
In-place leases
Assets:
Cost	449,716	445,583
Accumulated Amortization	(272,643)	(241,643)
Net	177,073	203,940
Above-market leases
Assets:
Cost	59,752	59,752
Accumulated Amortization	(34,282)	(30,096)
Net	25,470	29,656
Below-market leases
Liabilities
Below-market leases, cost	36,962	37,002
Below-market leases, accumulated amortization	(13,792)	(12,621)
Below-market leases, net	$ 23,170	$ 24,381

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Intangibles - Summary of Acquired Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Amortization expense related to in-place leases
Intangibles
Amortization expense related to in-place leases	$ 10,204	$ 10,629	$ 31,278	$ 32,814
Decrease in rental income related to above-market leases
Intangibles
Decrease of rental income	1,373	1,384	4,187	4,390
Below market in-place lease intangibles
Intangibles
Increase in rental income related to below-market leases	$ 594	$ 556	$ 1,764	$ 1,522

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Intangibles - Additional Information (Details)	Sep. 30, 2023
In-place lease intangibles
Intangibles
Weighted average amortization period for lease intangibles	7 years
Above-market leases
Intangibles
Weighted average amortization period for lease intangibles	7 years
Below market in-place lease intangibles
Intangibles
Weighted average amortization period for lease intangibles	15 years

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Intangibles - Future Aggregate Net Amortization of Acquired Lease Intangibles (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Net Decrease (Increase)  in Revenue
2023	$ 748
2024	2,887
2025	2,316
2026	1,161
2027	994
Thereafter	(5,806)
Total	2,300
Net Increase in  Expenses
2023	9,642
2024	35,184
2025	29,663
2026	23,548
2027	20,625
Thereafter	58,411
Total	$ 177,073

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Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Other Assets, Unclassified [Abstract]
Straight line rent receivable, net	$ 104,991	$ 101,306
Interest rate swaps	14,731	2,045
Leasing commissions, net	14,043	13,231
Prepaid expenses	14,013	11,009
Lease inducements, net	7,577	7,894
Escrows	1,574	1,565
Notes receivable, net	363	370
Other	8,850	9,387
Total	$ 166,142	$ 146,807

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Debt - Summary of Debt (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) healthcareproperty debtInstrument	Dec. 31, 2022 USD ($) healthcareproperty debtInstrument	May 24, 2023 USD ($)	Sep. 24, 2021 USD ($)
Debt
Long-term debt, gross	$ 1,988,127,000	$ 1,832,929,000
Unamortized deferred financing costs	(9,336,000)	(7,453,000)
Unamortized discounts	(6,535,000)	(7,359,000)
Total debt	$ 1,972,256,000	1,818,117,000
Cash flow hedge interest rate swaps
Debt
Interest Rate	3.59%
$1.0 billion unsecured revolving credit facility due September 2025
Debt
Current borrowing capacity				$ 1,250,000,000
Mortgages
Debt
Long-term debt, gross	$ 128,127,000	$ 164,929,000
Mortgages | Cash flow hedge interest rate swaps
Debt
Interest Rate		1.43%
Mortgages | Mortgage Notes Bearing Fixed Interest Rate Due In 2024
Debt
Long-term debt, gross	$ 23,330,000	$ 59,776,000
Interest rate (as a percent)	4.63%
Number of long-term debt instruments | debtInstrument	1
Weighted average interest rate		3.85%
Mortgages | Mortgage Notes Bearing Fixed Interest Rate Due In 2024 | Asset Pledged as Collateral
Debt
Pledged assets separately reported real estate pledged as collateral number | healthcareproperty	1	2
Financial instruments, owned, at fair value	$ 37,200,000	$ 94,900,000
Mortgages | Mortgage Notes Bearing Fixed Interest Rate Due In 2024 | Minimum
Debt
Interest rate (as a percent)		3.33%
Mortgages | Mortgage Notes Bearing Fixed Interest Rate Due In 2024 | Maximum
Debt
Interest rate (as a percent)		4.63%
Mortgages | Mortgage Notes Bearing Fixed Interest Rate Due In 2024 | London Interbank Offered Rate
Debt
Number of long-term debt instruments | debtInstrument		1
Reference rate (as a percent)		1.90%
Mortgages | Variable interest mortgage note
Debt
Long-term debt, gross	$ 104,797,000	$ 105,153,000
Weighted average interest rate	7.35%	6.20%
Mortgages | Variable interest mortgage note | Asset Pledged as Collateral
Debt
Pledged assets separately reported real estate pledged as collateral number | healthcareproperty	4
Financial instruments, owned, at fair value	$ 284,400,000	$ 295,500,000
Mortgages | Variable interest mortgage note | London Interbank Offered Rate
Debt
Reference rate (as a percent)		2.75%
Mortgages | Variable interest mortgage note | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum
Debt
Reference rate (as a percent)	1.85%	1.85%
Mortgages | Variable interest mortgage note | Prime Rate
Debt
Reference rate (as a percent)	2.75%
Revolving credit facility | $1.0 billion unsecured revolving credit facility due September 2025
Debt
Long-term debt, gross	$ 0	$ 193,000,000
Current borrowing capacity	$ 1,000,000,000			1,000,000,000
Revolving credit facility | $1.0 billion unsecured revolving credit facility due September 2025 | London Interbank Offered Rate
Debt
Reference rate (as a percent)		0.85%
Revolving credit facility | $1.0 billion unsecured revolving credit facility due September 2025 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	0.95%
Debt instrument, variable rate, index adjustment	0.10%
Term Loan | $1.0 billion unsecured revolving credit facility due September 2025
Debt
Current borrowing capacity				$ 250,000,000
Term Loan | $400 million unsecured term borrowing bearing fixed interest of 4.693%, due May 2028
Debt
Long-term debt, gross	$ 400,000,000	$ 0	$ 400,000,000
Debt instrument, face amount	$ 400,000,000		$ 400,000,000
Interest rate (as a percent)	4.693%
Interest rate, before index rate adjustment	1.10%
Term Loan | $400 million unsecured term borrowing bearing fixed interest of 4.693%, due May 2028 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Interest Rate	3.59%		3.593%
Debt instrument, variable rate, index adjustment	0.10%
Senior notes
Debt
Total debt	$ 1,500,000,000
Senior notes | $400 million senior unsecured notes bearing fixed interest of 4.30%, due March 2027
Debt
Long-term debt, gross	400,000,000	400,000,000
Debt instrument, face amount	$ 400,000,000
Interest rate (as a percent)	4.30%
Senior notes | $350 million senior unsecured notes bearing fixed interest of 3.95%, due January 2028
Debt
Long-term debt, gross	$ 350,000,000	350,000,000
Debt instrument, face amount	$ 350,000,000
Interest rate (as a percent)	3.95%
Senior notes | $500 million senior unsecured notes bearing fixed interest of 2.625%, due November 2031
Debt
Long-term debt, gross	$ 500,000,000	500,000,000
Debt instrument, face amount	$ 500,000,000
Interest rate (as a percent)	2.625%
Senior notes | $135 million senior unsecured notes bearing fixed interest of 4.43% to 4.74%, due January 2026 to 2031
Debt
Long-term debt, gross	$ 135,000,000	150,000,000
Debt instrument, face amount	$ 135,000,000
Senior notes | $135 million senior unsecured notes bearing fixed interest of 4.43% to 4.74%, due January 2026 to 2031 | Minimum
Debt
Interest rate (as a percent)	4.43%
Senior notes | $135 million senior unsecured notes bearing fixed interest of 4.43% to 4.74%, due January 2026 to 2031 | Maximum
Debt
Interest rate (as a percent)	4.74%
Senior notes | $75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027
Debt
Long-term debt, gross	$ 75,000,000	$ 75,000,000
Debt instrument, face amount	$ 75,000,000
Senior notes | $75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027 | Minimum
Debt
Interest rate (as a percent)	4.09%
Senior notes | $75 million senior unsecured notes bearing fixed interest of 4.09% to 4.24%, due August 2025 to 2027 | Maximum
Debt
Interest rate (as a percent)	4.24%

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Debt - Additional Information (Details)		3 Months Ended		9 Months Ended
	Mar. 31, 2023 USD ($)	Sep. 30, 2023 USD ($) extensionOption	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) extensionOption	Sep. 30, 2022 USD ($)	May 24, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 24, 2021 USD ($)
Debt
Total Notional Amount		$ 436,050,000		$ 436,050,000
Long-term debt		1,972,256,000		1,972,256,000			$ 1,818,117,000
Long-term debt, gross		1,988,127,000		1,988,127,000			1,832,929,000
Interest expense, debt		21,000,000	$ 17,700,000	59,600,000	$ 50,600,000
Interest Rate Swap, May 24, 2028
Debt
Total Notional Amount		$ 400,000,000		$ 400,000,000
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Long-term debt exposed to variable rates, percentage		5.00%		5.00%
Prime Rate
Debt
Long-term debt exposed to variable rates, percentage		0.20%		0.20%
2021 Third Amended and Restated Credit Agreement
Debt
Current borrowing capacity								$ 1,250,000,000
Maximum borrowing capacity as a percentage of maximum principal amount								10.00%
Accordion feature, increase limit								$ 500,000,000
Maximum borrowing capacity under accordion feature								1,750,000,000
2023 First Amendment To The Third Amended And Restated Credit Agreement
Debt
Accordion feature, increase limit	$ 500,000,000
Unused fee (as a percent)				0.20%
2023 First Amendment To The Third Amended And Restated Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Debt instrument, variable rate, index adjustment	0.10%			0.10%
Reference rate (as a percent)				0.95%
Second Amendment To The Credit Agreement
Debt
Accordion feature, increase limit						$ 500,000,000
Line of credit facility, accordion feature, high borrowing capacity option						1,900,000,000
Revolving credit facility
Debt
Number of extension options | extensionOption		2		2
Term of extension option				6 months
Revolving credit facility | 2021 Third Amended and Restated Credit Agreement
Debt
Current borrowing capacity		$ 1,000,000,000		$ 1,000,000,000				1,000,000,000
Long-term debt, gross		0		$ 0			193,000,000
Revolving credit facility | 2021 Third Amended and Restated Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Debt instrument, variable rate, index adjustment				0.10%
Reference rate (as a percent)				0.95%
Term Loan | 2021 Third Amended and Restated Credit Agreement
Debt
Current borrowing capacity								$ 250,000,000
Term Loan | $400 million unsecured term borrowing bearing fixed interest of 4.693%, due May 2028
Debt
Debt instrument, face amount		$ 400,000,000		$ 400,000,000		400,000,000
Interest rate, before index rate adjustment		1.10%		1.10%
Interest rate (as a percent)		4.693%		4.693%
Long-term debt, gross		$ 400,000,000		$ 400,000,000		$ 400,000,000	$ 0
Term Loan | $400 million unsecured term borrowing bearing fixed interest of 4.693%, due May 2028 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Debt instrument, variable rate, index adjustment				0.10%
Derivative, fixed interest rate		3.59%		3.59%		3.593%
Senior notes
Debt
Long-term debt		$ 1,500,000,000		$ 1,500,000,000
Senior notes | Senior Notes Due 2025
Debt
Long-term debt		25,000,000		25,000,000
Senior notes | Senior Notes Due 2026
Debt
Long-term debt		70,000,000		70,000,000
Senior notes | Senior Notes Due 2027
Debt
Long-term debt		425,000,000		425,000,000
Senior notes | Senior Notes Due 2028
Debt
Long-term debt		395,000,000		395,000,000
Senior notes | Senior Notes Due 2031
Debt
Long-term debt		$ 545,000,000		$ 545,000,000
Operating Partnership | Revolving credit facility
Debt
Interest rate at end of period (as a percent)		4.07%		4.07%
Operating Partnership | Revolving credit facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)				5.31%
Operating Partnership | Revolving credit facility | Prime Rate
Debt
Reference rate (as a percent)				8.50%

XML

Debt - Trust Investment Grade Rating (Details)	9 Months Ended
	Sep. 30, 2023
At Least A- or A3 | Adjusted SOFR rate loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	0.725%
At Least A- or A3 | Adjusted SOFR rate term loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	0.85%
At Least BBB+ or Baa1 | Adjusted SOFR rate loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	0.775%
At Least BBB+ or Baa1 | Adjusted SOFR rate term loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	0.90%
At Least BBB or Baa2 | Adjusted SOFR rate loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	0.85%
At Least BBB or Baa2 | Adjusted SOFR rate term loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	1.00%
At Least BBB- or Baa3 | Adjusted SOFR rate loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	1.05%
At Least BBB- or Baa3 | Adjusted SOFR rate term loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	1.25%
Below BBB- or Baa3 | Adjusted SOFR rate loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	1.40%
Below BBB- or Baa3 | Adjusted SOFR rate term loans and letter of credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt
Reference rate (as a percent)	1.65%
Applicable Margin for Revolving Loans: Base Rate Loans | At Least A- or A3 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.00%
Applicable Margin for Revolving Loans: Base Rate Loans | At Least BBB+ or Baa1 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.00%
Applicable Margin for Revolving Loans: Base Rate Loans | At Least BBB or Baa2 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.00%
Applicable Margin for Revolving Loans: Base Rate Loans | At Least BBB- or Baa3 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.05%
Applicable Margin for Revolving Loans: Base Rate Loans | Below BBB- or Baa3 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.40%
Term Loan | At Least A- or A3 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.00%
Term Loan | At Least BBB+ or Baa1 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.00%
Term Loan | At Least BBB or Baa2 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.00%
Term Loan | At Least BBB- or Baa3 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.25%
Term Loan | Below BBB- or Baa3 | Base rate loans | Base rate
Debt
Reference rate (as a percent)	0.65%

XML

Debt - Scheduled Principal Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
2023	$ 255
2024	23,669
2025	25,476
2026	170,476
2027	425,476
Thereafter	1,342,775
Total Payments	$ 1,988,127	$ 1,832,929

XML

Derivatives - Additional Information (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($) instrument	Sep. 30, 2023 USD ($) instrument	Sep. 30, 2022 USD ($)
Derivative [Line Items]
Amount of gain reclassified from AOCI to earnings		$ 1,763
Derivative asset	$ 14,731	$ 14,731
Number of Instruments | instrument	4	4
Interest rate swap
Derivative [Line Items]
Derivative asset	$ 1,579	$ 1,579
Number of Instruments | instrument	1	1
Interest rate swap | Interest expense
Derivative [Line Items]
Amount of gain reclassified from AOCI to earnings	$ 1,800	$ 1,763	$ 0

XML

Derivatives - Location and Aggregate Fair Value of Interest Rate Swaps (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($) instrument	Sep. 30, 2023 USD ($) instrument	Sep. 30, 2022 USD ($)
Derivative [Line Items]
Number of Instruments | instrument	4	4
Total Notional Amount	$ 436,050	$ 436,050
Fair Value	$ 14,731	14,731
Change in fair value of interest rate swap agreements		13,152
Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income		$ 1,763
Cash flow hedge interest rate swaps
Derivative [Line Items]
Number of Instruments | instrument	3	3
Total Notional Amount	$ 400,000	$ 400,000
Interest Rate	3.59%	3.59%
Fair Value	$ 13,152	$ 13,152
Change in fair value of interest rate swap agreements		$ 13,152
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets	Other Assets
Cash flow hedge interest rate swaps | Interest expense
Derivative [Line Items]
Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income		$ 0
Interest rate swap
Derivative [Line Items]
Number of Instruments | instrument	1	1
Total Notional Amount	$ 36,050	$ 36,050
Interest Rate	1.37%	1.37%
Fair Value	$ 1,579	$ 1,579
Change in fair value of interest rate swap agreements		$ 0	$ 2,523
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets	Other Assets
Interest rate swap | Interest expense
Derivative [Line Items]
Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income	$ 1,800	$ 1,763	$ 0

XML

Accrued Expenses and Other Liabilities - Schedule of Accrued Expense and Other Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Real estate taxes payable	$ 30,893	$ 23,303
Prepaid rent	23,537	21,062
Accrued interest	11,683	18,196
Accrued expenses	7,841	7,920
Accrued incentive compensation	5,342	2,700
Security deposits	4,586	4,338
Tenant improvement allowances	1,853	1,831
Other	9,902	8,370
Total	$ 95,637	$ 87,720

XML

Stock-based Compensation - Additional Information (Details)	May 03, 2023 shares
2013 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares authorized (in shares)	11,000,000

XML

Stock-based Compensation - Restricted Common Shares (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jan. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-cash share compensation				$ 12,290	$ 12,400
2013 Plan | Restricted common shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)				342,939
Non-cash share compensation		$ 1,200	$ 1,000	$ 3,500	$ 2,900
Unrecognized compensation expense		$ 2,900		$ 2,900
2013 Plan | Restricted common shares | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period				1 year
2013 Plan | Restricted common shares | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period				3 years
2013 Plan, Salary Deferral Program | Restricted common shares | Share-based Payment Arrangement, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
2013 Plan, Salary Deferral Program | Restricted common shares | Share-based Payment Arrangement, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
Officers and Certain Employees | 2013 Plan | Restricted common shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)				342,939
Grant date value				$ 5,000

XML

Stock-based Compensation - Summary of the Status of the Trust's Non-Vested Restricted Common Shares (Details) - 2013 Plan - Restricted common shares	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Common Shares
Non-vested at the beginning of the period (in shares) | shares	272,898
Granted (in shares) | shares	342,939
Vested (in shares) | shares	(239,602)
Forfeited (in shares) | shares	(364)
Non-vested at the end of the period (in shares) | shares	375,871
Weighted Average Grant Date Fair Value
Non-vested at beginning of period (in dollars per share) | $ / shares	$ 16.69
Granted (in dollars per share) | $ / shares	14.57
Vested (in dollars per share) | $ / shares	16.54
Forfeited (in dollars per share) | $ / shares	17.45
Non-vested at end of period (in dollars per share) | $ / shares	$ 14.84

XML

Stock-based Compensation - Restricted Share Units (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended			9 Months Ended
	Mar. 31, 2023	Jan. 31, 2023	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-cash share compensation						$ 12,290	$ 12,400
2013 Plan | Restricted share units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of dividend equivalent included in each award (in shares)	1			1
Non-cash share compensation			$ 2,600		$ 3,300	8,600	$ 9,400
Unrecognized compensation expense			$ 11,500			$ 11,500
2013 Plan | Performance based restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance conditions grant date fair value (in dollars per share)				$ 14.70
Granted (in dollars per share)				15.90
2013 Plan | Market Based Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)				$ 18.71
Officers and Certain Employees | 2013 Plan | Restricted share units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	355,388
Vesting period	3 years	1 year
Officers and Certain Employees | 2013 Plan | Performance based restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				70.00%
Officers and Certain Employees | 2013 Plan | Market Based Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				30.00%
Trustees | 2013 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		11,274
Trustees | 2013 Plan | Restricted share units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	62,586
Vesting period	2 years
Number of dividend equivalent included in each award (in shares)		1
Trustees | 2013 Plan | Performance based restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance conditions grant date fair value (in dollars per share)		$ 14.47
Percentage of restricted share units issued to trustees				100.00%

XML

Stock-based Compensation - Restricted Share Assumptions (Details) - 2013 Plan - Restricted share units (RSUs)	1 Months Ended
	Mar. 31, 2023 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	23.40%
Expected term in years	2 years 9 months 29 days
Risk-free rate	4.70%
Share price (per share)	$ 14.70

XML

Stock-based Compensation - Summary of Activity in the Trust's Restricted Share Units (Details) - $ / shares	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Weighted Average Grant Date Fair Value
Common stock, shares issued (in shares)	238,482,769	233,292,030
2013 Plan | Executive Awards
Restricted Share Units
Non-vested at the beginning of the period (in shares)	1,046,940
Granted (in shares)	355,388
Vested (in shares)	(223,579)
Non-vested at the end of the period (in shares)	1,178,749
Weighted Average Grant Date Fair Value
Non-vested at beginning of period (in dollars per share)	$ 21.41
Granted (in dollars per share)	15.90
Vested (in dollars per share)	24.36
Non-vested at end of period (in dollars per share)	$ 19.19
Common stock, shares issued (in shares)	652,851
Restricted stock, shares issued net of shares for tax withholdings (in shares)	290,380
2013 Plan | Trustee Awards
Restricted Share Units
Non-vested at the beginning of the period (in shares)	77,992
Granted (in shares)	73,860
Vested (in shares)	(49,890)
Non-vested at the end of the period (in shares)	101,962
Weighted Average Grant Date Fair Value
Non-vested at beginning of period (in dollars per share)	$ 16.60
Granted (in dollars per share)	14.66
Vested (in dollars per share)	16.74
Non-vested at end of period (in dollars per share)	$ 15.13

XML

Fair Value Measurements - Additional Information (Details)	Sep. 30, 2023 instrument asset
Fair value of other financial instruments
Number of Instruments	4
Fair value, measurements, nonrecurring
Fair value of other financial instruments
Number of assets measured at fair value | asset	0
Cash flow hedge interest rate swaps
Fair value of other financial instruments
Number of Instruments	3

XML

Fair Value Measurements - Fair Value of Company's Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets:
Notes receivable, net	$ 363	$ 370
Fair Value	14,731
Liabilities:
Credit facility	(393,090)	(188,328)
Notes payable	(1,451,536)	(1,465,437)
Mortgage debt	(127,630)	(164,352)
Cash flow hedge interest rate swaps
Assets:
Fair Value	13,152
Carrying Amount
Assets:
Real estate loans receivable, net	79,884	104,973
Notes receivable, net	363	370
Liabilities:
Credit facility	(400,000)	(193,000)
Notes payable	(1,460,000)	(1,475,000)
Mortgage debt	(128,127)	(164,929)
Carrying Amount | Cash flow hedge interest rate swaps
Assets:
Fair Value	14,731	2,045
Fair Value
Assets:
Real estate loans receivable, net	76,935	102,162
Notes receivable, net	363	370
Liabilities:
Credit facility	(400,000)	(193,000)
Notes payable	(1,261,390)	(1,302,767)
Mortgage debt	(127,628)	(163,129)
Fair Value | Cash flow hedge interest rate swaps
Assets:
Fair Value	$ 14,731	$ 2,045

XML

Tenant Operating Leases - Schedule of Future Minimum Rental Payments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
2023	$ 92,037		$ 92,037
2024	363,106		363,106
2025	346,518		346,518
2026	289,162		289,162
2027	237,149		237,149
Thereafter	818,876		818,876
Total	2,146,848		2,146,848
Operating lease, lease income	134,500	$ 128,600	397,100	$ 385,800
Operating lease, variable lease income	$ 39,800	$ 36,600	$ 115,200	$ 107,500

XML

Rent Expense - Additional Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) property lease
Leases [Abstract]
Number of properties subject to parking lease	2
Number of properties subject to air space lease	1
Number of properties subject to ground leases	97
Number of office space leases | lease	9
Maximum lease terms	92 years
Operating lease, weighted average remaining lease term	43 years
Operating lease, weighted average discount rate, percent	4.40%
Fixed lease cost | $	$ 2,480

XML

Rent Expense - Schedule of Future Minimum Lease Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
2023	$ 1,261
2024	5,129
2025	5,101
2026	5,090
2027	5,092
Thereafter	248,386
Total undiscounted lease payments	270,059
Less: Interest	(165,257)
Present value of lease liabilities	$ 104,802	$ 105,011

XML

Rent Expense - Lease Cost (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Leases [Abstract]
Fixed lease cost	$ 2,480
Variable lease cost	1,007
Total lease cost	$ 3,487

XML

Credit Concentration - Schedule of ABR (Annualized Base Rent) (Details) - Sales Revenue, Services, Net	9 Months Ended
	Sep. 30, 2023 USD ($) Rate
Customer Concentration Risk
Concentration Risk [Line Items]
Total ABR	$ 368,106,000
Percent of ABR | Rate	100.00%
Customer Concentration Risk | CommonSpirit - CHI - Nebraska
Concentration Risk [Line Items]
Total ABR	$ 18,666,000
Percent of ABR | Rate	5.10%
Customer Concentration Risk | Northside Hospital
Concentration Risk [Line Items]
Total ABR	$ 16,553,000
Percent of ABR | Rate	4.50%
Customer Concentration Risk | UofL Health - Louisville, Inc.
Concentration Risk [Line Items]
Total ABR	$ 14,656,000
Percent of ABR | Rate	4.00%
Customer Concentration Risk | HonorHealth
Concentration Risk [Line Items]
Total ABR	$ 11,287,000
Percent of ABR | Rate	3.10%
Customer Concentration Risk | US Oncology
Concentration Risk [Line Items]
Total ABR	$ 11,047,000
Percent of ABR | Rate	3.00%
Customer Concentration Risk | Remaining portfolio
Concentration Risk [Line Items]
Total ABR	$ 295,897,000
Percent of ABR | Rate	80.30%
Geographic Concentration Risk
Concentration Risk [Line Items]
Total ABR	$ 368,106,000
Percent of ABR | Rate	100.00%
Geographic Concentration Risk | Texas
Concentration Risk [Line Items]
Total ABR	$ 49,405,000
Percent of ABR	13.40%
Geographic Concentration Risk | Georgia
Concentration Risk [Line Items]
Total ABR	$ 27,099,000
Percent of ABR	7.40%
Geographic Concentration Risk | Florida
Concentration Risk [Line Items]
Total ABR	$ 25,495,000
Percent of ABR	6.90%
Geographic Concentration Risk | Indiana
Concentration Risk [Line Items]
Total ABR	$ 23,529,000
Percent of ABR	6.40%
Geographic Concentration Risk | Arizona
Concentration Risk [Line Items]
Total ABR	$ 21,817,000
Percent of ABR	5.90%
Geographic Concentration Risk | Other
Concentration Risk [Line Items]
Total ABR	$ 220,761,000
Percent of ABR	60.00%

XML

Credit Concentration - Additional Information (Details) - Sales Revenue, Services, Net - Customer Concentration Risk	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023 Rate
Concentration Risk [Line Items]
Percent of ABR		100.00%
Top five tenant relationships
Concentration Risk [Line Items]
Percent of ABR	19.70%
CHI Portfolio
Concentration Risk [Line Items]
Percent of ABR	14.90%

XML

Earnings Per Share - Schedule of Earnings Per Share and Earnings Per Unit (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator for earnings per share - basic:
Net income		$ 12,891	$ 66,280	$ 36,645	$ 98,155
Net income attributable to noncontrolling interests:
Operating Partnership		(505)	(3,252)	(1,443)	(4,830)
Partially owned properties	[1]	(51)	(70)	(121)	(384)
Net income attributable to common shareholders		12,335	62,958	35,081	92,941
Numerator for earnings per share - diluted:
Numerator for earnings per share - basic		12,335	62,958	35,081	92,941
Noncontrolling interest - Operating Partnership income		505	3,252	1,443	4,830
Numerator for earnings per share - diluted		$ 12,840	$ 66,210	$ 36,524	$ 97,771
Denominator for earnings per share - basic and diluted:
Weighted average number of shares outstanding - basic (in shares)		238,480,299	226,529,041	238,124,981	225,743,856
Effect of dilutive securities:
Noncontrolling interest - Operating Partnership units (in shares)		9,814,296	11,791,685	9,831,470	11,872,328
Denominator for earnings per share - diluted (in shares)		249,445,312	239,898,462	249,226,913	239,145,383
Earnings per share - basic (in dollars per share)		$ 0.05	$ 0.28	$ 0.15	$ 0.41
Earnings per share - diluted (in dollars per share)		$ 0.05	$ 0.28	$ 0.15	$ 0.41
Restricted common shares
Effect of dilutive securities:
Restricted common shares/units (in shares)		123,801	100,790	127,715	105,170
Restricted share units
Effect of dilutive securities:
Restricted common shares/units (in shares)		1,026,916	1,476,946	1,142,747	1,424,029

[1] Includes amounts attributable to redeemable noncontrolling interests.

XML

Subsequent Events - Narrative (Details)	Jun. 30, 2024	Oct. 29, 2023 $ / shares	Sep. 30, 2023 $ / shares	Dec. 31, 2022 $ / shares
Subsequent Event [Line Items]
Common stock, par value (in dollars per share)			$ 0.01	$ 0.01
Subsequent Event | Healthpeak Properties, Inc
Subsequent Event [Line Items]
Common stock, par value (in dollars per share)		$ 1.00
Subsequent Event | Healthpeak Properties, Inc | Forecast
Subsequent Event [Line Items]
Exchange ratio	0.674