Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

Leases

Lease Income

The following table summarizes the Company’s lease income (in thousands):

	Year Ended December 31,
	2024		2023		2022
Fixed income from operating leases	$	1,530,493	$	1,236,502	$	1,182,463
Variable income from operating leases	556,703		395,303		359,312
Interest income from direct financing leases	—		—		1,168

Direct Financing Leases

2022 Direct Financing Lease Sale

During the first quarter of 2022, the Company sold its remaining hospital under a DFL for $68 million and recognized a gain on sale of $23 million, which is included in other income (expense), net on the Consolidated Statements of Operations. Therefore, at December 31, 2024 and 2023, the Company had no leases classified as a DFL.

Operating Leases

Future Minimum Rents

The following table summarizes future minimum lease payments to be received from tenants under non-cancelable operating leases as of December 31, 2024 (in thousands):

Year	Amount
2025	$	1,427,402
2026	1,339,275
2027	1,246,068
2028	1,138,062
2029	1,003,394
Thereafter	3,681,731
	$	9,835,932

Tenant Purchase Options

Certain leases contain purchase options whereby the tenant may elect to acquire the underlying real estate. Annualized base rent from leases subject to purchase options, summarized by the year the purchase options are exercisable are as follows (dollars in thousands):

Year	Annualized Base Rent(1)		Number of Properties
2025	$	16,109	12
2026	19,071		8
2027	8,415		4
2028	16,209		5
2029	6,053		7
Thereafter	22,364		9
	$	88,221	45

_______________________________________

(1)Represents the most recent month’s base rent including additional rent floors annualized for 12 months. Base rent does not include tenant recoveries, additional rents in excess of floors, and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).

Lease Costs

The following tables provide information regarding the Company’s leases to which it is the lessee, such as corporate offices and ground leases, excluding lease costs related to discontinued operations (dollars in thousands):

	Year Ended December 31,
Lease Expense Information:	2024		2023		2022
Total lease expense	$	22,768	$	17,010	$	16,689

Weighted Average Lease Term and Discount Rate:	December 31, 2024		December 31, 2023
Weighted average remaining lease term (years):
Operating leases(1)	48		51
Weighted average discount rate:
Operating leases	4.79	%	4.23	%

_______________________________________

(1)As of December 31, 2024 and 2023, the weighted average remaining lease term including the Company’s options to extend its operating leases was 66 years and 67 years, respectively.

The following table summarizes future minimum lease payments under non-cancelable ground and other operating leases included in the Company’s lease liability as of December 31, 2024 (in thousands):

Year	Amount
2025	$	21,514
2026	18,423
2027	18,434
2028	18,489
2029	18,687
Thereafter	738,666
Undiscounted minimum lease payments included in the lease liability	834,213
Less: imputed interest	(526,993)
Present value of lease liability	$	307,220

Depreciation Expense

While the Company leases the majority of its property, plant, and equipment to various tenants under operating leases, in certain situations, the Company owns and operates certain property, plant, and equipment for general corporate purposes. Corporate assets are recorded within other assets, net within the Company’s Consolidated Balance Sheets and depreciation expense for those assets is recorded in general and administrative expenses in the Company’s Consolidated Statements of Operations. As of December 31, 2024 and 2023, the Company had $38 million and $39 million of corporate assets, respectively. Also included within other assets, net as of December 31, 2024 and 2023 is $8 million and $10 million, respectively, of accumulated depreciation related to corporate assets. Included within general and administrative expenses for the years ended December 31, 2024, 2023, and 2022 is $2 million, $3 million, and $3 million, respectively, of depreciation expense related to corporate assets.

Denver Corporate Headquarters

During the year ended December 31, 2022, the Company recognized $7 million of charges in connection with the downsizing of the Company’s corporate headquarters in Denver, Colorado which are included in general and administrative expenses on the Consolidated Statements of Operations.

Tenant Updates

During the first quarter of 2023, the Company wrote off $9 million of straight-line rent receivable associated with four in-place operating leases with Sorrento Therapeutics, Inc. (“Sorrento”), which commenced voluntary reorganization proceedings (the “Filing”) under Chapter 11 of the U.S. Bankruptcy Code during the period. This write-off was recognized as a reduction in rental and related revenues on the Consolidated Statements of Operations. Subsequent to the write-off, revenue related to this tenant is recognized on a cash basis. Sorrento also had a single development lease with the Company, but had not taken occupancy at the time of the Filing. The Company has filed proofs of claims for damages related to its rejected leases, which include the development lease and three of the four operating leases. The Company filed proofs of claim for related damages during the year ended December 31, 2023, $4 million of which was received by the Company by drawing on Sorrento’s letters of credit and security deposits. These cash proceeds were recognized as lease termination fee income, which is included in rental and related revenues on the Consolidated Statements of Operations. In April 2024, the U.S. Bankruptcy Court approved the assignment and assumption of the remaining operating lease by the buyer of Sorrento’s assets. Given the nature of bankruptcy proceedings, the probability, timing, and amount of the additional proceeds, if any, that the Company may ultimately receive in connection with the claims are uncertain. Accordingly, the Company has not recorded any estimated recoveries associated with these claims as of December 31, 2024 or December 31, 2023.

On October 26, 2023, the Company amended its lease with Graphite Bio, Inc., which later merged with LENZ Therapeutics, Inc. in March 2024 (“Graphite Bio”), at one of its lab buildings in South San Francisco, California. Under the terms of the amended lease agreement, Graphite Bio’s lease expiration date was accelerated from April 2033 to December 2024 in exchange for an upfront cash payment of $37 million, comprised of a $21 million termination fee and $16 million prepayment of Graphite Bio’s contractual rent through the amended term. The $37 million was recognized as rental and related revenues on the Consolidated Statements of Operations on a straight-line basis through the amended term of the lease.

In July 2024, the Company executed an early lease renewal for approximately 2 million square feet leased by CommonSpirit Health (“CommonSpirit”). The renewal, which is subject to a master agreement, extended the weighted average lease term of existing leases from July 2027 to December 2035, amended the contractual rents to current market rates, and increased the annual contractual lease escalations from 2.5% to 3.0%. In connection with this extension, CommonSpirit was provided the right to reduce the amount of space leased by up to approximately 200,000 square feet at any time after the original lease maturity dates. These termination rights were evaluated for likelihood of exercise in accordance with ASC 842 in the determination of the lease term. During the year ended December 31, 2024, CommonSpirit represented 6% of revenues for the outpatient medical segment and 3% of total revenues.

Leases

Leases

Lease Income

The following table summarizes the Company’s lease income (in thousands):

	Year Ended December 31,
	2024		2023		2022
Fixed income from operating leases	$	1,530,493	$	1,236,502	$	1,182,463
Variable income from operating leases	556,703		395,303		359,312
Interest income from direct financing leases	—		—		1,168

Direct Financing Leases

2022 Direct Financing Lease Sale

During the first quarter of 2022, the Company sold its remaining hospital under a DFL for $68 million and recognized a gain on sale of $23 million, which is included in other income (expense), net on the Consolidated Statements of Operations. Therefore, at December 31, 2024 and 2023, the Company had no leases classified as a DFL.

Operating Leases

Future Minimum Rents

The following table summarizes future minimum lease payments to be received from tenants under non-cancelable operating leases as of December 31, 2024 (in thousands):

Year	Amount
2025	$	1,427,402
2026	1,339,275
2027	1,246,068
2028	1,138,062
2029	1,003,394
Thereafter	3,681,731
	$	9,835,932

Tenant Purchase Options

Certain leases contain purchase options whereby the tenant may elect to acquire the underlying real estate. Annualized base rent from leases subject to purchase options, summarized by the year the purchase options are exercisable are as follows (dollars in thousands):

Year	Annualized Base Rent(1)		Number of Properties
2025	$	16,109	12
2026	19,071		8
2027	8,415		4
2028	16,209		5
2029	6,053		7
Thereafter	22,364		9
	$	88,221	45

_______________________________________

(1)Represents the most recent month’s base rent including additional rent floors annualized for 12 months. Base rent does not include tenant recoveries, additional rents in excess of floors, and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).

Lease Costs

The following tables provide information regarding the Company’s leases to which it is the lessee, such as corporate offices and ground leases, excluding lease costs related to discontinued operations (dollars in thousands):

	Year Ended December 31,
Lease Expense Information:	2024		2023		2022
Total lease expense	$	22,768	$	17,010	$	16,689

Weighted Average Lease Term and Discount Rate:	December 31, 2024		December 31, 2023
Weighted average remaining lease term (years):
Operating leases(1)	48		51
Weighted average discount rate:
Operating leases	4.79	%	4.23	%

_______________________________________

(1)As of December 31, 2024 and 2023, the weighted average remaining lease term including the Company’s options to extend its operating leases was 66 years and 67 years, respectively.

The following table summarizes future minimum lease payments under non-cancelable ground and other operating leases included in the Company’s lease liability as of December 31, 2024 (in thousands):

Year	Amount
2025	$	21,514
2026	18,423
2027	18,434
2028	18,489
2029	18,687
Thereafter	738,666
Undiscounted minimum lease payments included in the lease liability	834,213
Less: imputed interest	(526,993)
Present value of lease liability	$	307,220

Depreciation Expense

While the Company leases the majority of its property, plant, and equipment to various tenants under operating leases, in certain situations, the Company owns and operates certain property, plant, and equipment for general corporate purposes. Corporate assets are recorded within other assets, net within the Company’s Consolidated Balance Sheets and depreciation expense for those assets is recorded in general and administrative expenses in the Company’s Consolidated Statements of Operations. As of December 31, 2024 and 2023, the Company had $38 million and $39 million of corporate assets, respectively. Also included within other assets, net as of December 31, 2024 and 2023 is $8 million and $10 million, respectively, of accumulated depreciation related to corporate assets. Included within general and administrative expenses for the years ended December 31, 2024, 2023, and 2022 is $2 million, $3 million, and $3 million, respectively, of depreciation expense related to corporate assets.

Denver Corporate Headquarters

During the year ended December 31, 2022, the Company recognized $7 million of charges in connection with the downsizing of the Company’s corporate headquarters in Denver, Colorado which are included in general and administrative expenses on the Consolidated Statements of Operations.

Tenant Updates

During the first quarter of 2023, the Company wrote off $9 million of straight-line rent receivable associated with four in-place operating leases with Sorrento Therapeutics, Inc. (“Sorrento”), which commenced voluntary reorganization proceedings (the “Filing”) under Chapter 11 of the U.S. Bankruptcy Code during the period. This write-off was recognized as a reduction in rental and related revenues on the Consolidated Statements of Operations. Subsequent to the write-off, revenue related to this tenant is recognized on a cash basis. Sorrento also had a single development lease with the Company, but had not taken occupancy at the time of the Filing. The Company has filed proofs of claims for damages related to its rejected leases, which include the development lease and three of the four operating leases. The Company filed proofs of claim for related damages during the year ended December 31, 2023, $4 million of which was received by the Company by drawing on Sorrento’s letters of credit and security deposits. These cash proceeds were recognized as lease termination fee income, which is included in rental and related revenues on the Consolidated Statements of Operations. In April 2024, the U.S. Bankruptcy Court approved the assignment and assumption of the remaining operating lease by the buyer of Sorrento’s assets. Given the nature of bankruptcy proceedings, the probability, timing, and amount of the additional proceeds, if any, that the Company may ultimately receive in connection with the claims are uncertain. Accordingly, the Company has not recorded any estimated recoveries associated with these claims as of December 31, 2024 or December 31, 2023.

On October 26, 2023, the Company amended its lease with Graphite Bio, Inc., which later merged with LENZ Therapeutics, Inc. in March 2024 (“Graphite Bio”), at one of its lab buildings in South San Francisco, California. Under the terms of the amended lease agreement, Graphite Bio’s lease expiration date was accelerated from April 2033 to December 2024 in exchange for an upfront cash payment of $37 million, comprised of a $21 million termination fee and $16 million prepayment of Graphite Bio’s contractual rent through the amended term. The $37 million was recognized as rental and related revenues on the Consolidated Statements of Operations on a straight-line basis through the amended term of the lease.

In July 2024, the Company executed an early lease renewal for approximately 2 million square feet leased by CommonSpirit Health (“CommonSpirit”). The renewal, which is subject to a master agreement, extended the weighted average lease term of existing leases from July 2027 to December 2035, amended the contractual rents to current market rates, and increased the annual contractual lease escalations from 2.5% to 3.0%. In connection with this extension, CommonSpirit was provided the right to reduce the amount of space leased by up to approximately 200,000 square feet at any time after the original lease maturity dates. These termination rights were evaluated for likelihood of exercise in accordance with ASC 842 in the determination of the lease term. During the year ended December 31, 2024, CommonSpirit represented 6% of revenues for the outpatient medical segment and 3% of total revenues.

Leases

Leases

Lease Income

The following table summarizes the Company’s lease income (in thousands):

	Year Ended December 31,
	2024		2023		2022
Fixed income from operating leases	$	1,530,493	$	1,236,502	$	1,182,463
Variable income from operating leases	556,703		395,303		359,312
Interest income from direct financing leases	—		—		1,168

Direct Financing Leases

2022 Direct Financing Lease Sale

During the first quarter of 2022, the Company sold its remaining hospital under a DFL for $68 million and recognized a gain on sale of $23 million, which is included in other income (expense), net on the Consolidated Statements of Operations. Therefore, at December 31, 2024 and 2023, the Company had no leases classified as a DFL.

Operating Leases

Future Minimum Rents

The following table summarizes future minimum lease payments to be received from tenants under non-cancelable operating leases as of December 31, 2024 (in thousands):

Year	Amount
2025	$	1,427,402
2026	1,339,275
2027	1,246,068
2028	1,138,062
2029	1,003,394
Thereafter	3,681,731
	$	9,835,932

Tenant Purchase Options

Certain leases contain purchase options whereby the tenant may elect to acquire the underlying real estate. Annualized base rent from leases subject to purchase options, summarized by the year the purchase options are exercisable are as follows (dollars in thousands):

Year	Annualized Base Rent(1)		Number of Properties
2025	$	16,109	12
2026	19,071		8
2027	8,415		4
2028	16,209		5
2029	6,053		7
Thereafter	22,364		9
	$	88,221	45

_______________________________________

(1)Represents the most recent month’s base rent including additional rent floors annualized for 12 months. Base rent does not include tenant recoveries, additional rents in excess of floors, and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).

Lease Costs

The following tables provide information regarding the Company’s leases to which it is the lessee, such as corporate offices and ground leases, excluding lease costs related to discontinued operations (dollars in thousands):

	Year Ended December 31,
Lease Expense Information:	2024		2023		2022
Total lease expense	$	22,768	$	17,010	$	16,689

Weighted Average Lease Term and Discount Rate:	December 31, 2024		December 31, 2023
Weighted average remaining lease term (years):
Operating leases(1)	48		51
Weighted average discount rate:
Operating leases	4.79	%	4.23	%

_______________________________________

(1)As of December 31, 2024 and 2023, the weighted average remaining lease term including the Company’s options to extend its operating leases was 66 years and 67 years, respectively.

The following table summarizes future minimum lease payments under non-cancelable ground and other operating leases included in the Company’s lease liability as of December 31, 2024 (in thousands):

Year	Amount
2025	$	21,514
2026	18,423
2027	18,434
2028	18,489
2029	18,687
Thereafter	738,666
Undiscounted minimum lease payments included in the lease liability	834,213
Less: imputed interest	(526,993)
Present value of lease liability	$	307,220

Depreciation Expense

While the Company leases the majority of its property, plant, and equipment to various tenants under operating leases, in certain situations, the Company owns and operates certain property, plant, and equipment for general corporate purposes. Corporate assets are recorded within other assets, net within the Company’s Consolidated Balance Sheets and depreciation expense for those assets is recorded in general and administrative expenses in the Company’s Consolidated Statements of Operations. As of December 31, 2024 and 2023, the Company had $38 million and $39 million of corporate assets, respectively. Also included within other assets, net as of December 31, 2024 and 2023 is $8 million and $10 million, respectively, of accumulated depreciation related to corporate assets. Included within general and administrative expenses for the years ended December 31, 2024, 2023, and 2022 is $2 million, $3 million, and $3 million, respectively, of depreciation expense related to corporate assets.

Denver Corporate Headquarters

During the year ended December 31, 2022, the Company recognized $7 million of charges in connection with the downsizing of the Company’s corporate headquarters in Denver, Colorado which are included in general and administrative expenses on the Consolidated Statements of Operations.

Tenant Updates

During the first quarter of 2023, the Company wrote off $9 million of straight-line rent receivable associated with four in-place operating leases with Sorrento Therapeutics, Inc. (“Sorrento”), which commenced voluntary reorganization proceedings (the “Filing”) under Chapter 11 of the U.S. Bankruptcy Code during the period. This write-off was recognized as a reduction in rental and related revenues on the Consolidated Statements of Operations. Subsequent to the write-off, revenue related to this tenant is recognized on a cash basis. Sorrento also had a single development lease with the Company, but had not taken occupancy at the time of the Filing. The Company has filed proofs of claims for damages related to its rejected leases, which include the development lease and three of the four operating leases. The Company filed proofs of claim for related damages during the year ended December 31, 2023, $4 million of which was received by the Company by drawing on Sorrento’s letters of credit and security deposits. These cash proceeds were recognized as lease termination fee income, which is included in rental and related revenues on the Consolidated Statements of Operations. In April 2024, the U.S. Bankruptcy Court approved the assignment and assumption of the remaining operating lease by the buyer of Sorrento’s assets. Given the nature of bankruptcy proceedings, the probability, timing, and amount of the additional proceeds, if any, that the Company may ultimately receive in connection with the claims are uncertain. Accordingly, the Company has not recorded any estimated recoveries associated with these claims as of December 31, 2024 or December 31, 2023.

On October 26, 2023, the Company amended its lease with Graphite Bio, Inc., which later merged with LENZ Therapeutics, Inc. in March 2024 (“Graphite Bio”), at one of its lab buildings in South San Francisco, California. Under the terms of the amended lease agreement, Graphite Bio’s lease expiration date was accelerated from April 2033 to December 2024 in exchange for an upfront cash payment of $37 million, comprised of a $21 million termination fee and $16 million prepayment of Graphite Bio’s contractual rent through the amended term. The $37 million was recognized as rental and related revenues on the Consolidated Statements of Operations on a straight-line basis through the amended term of the lease.

In July 2024, the Company executed an early lease renewal for approximately 2 million square feet leased by CommonSpirit Health (“CommonSpirit”). The renewal, which is subject to a master agreement, extended the weighted average lease term of existing leases from July 2027 to December 2035, amended the contractual rents to current market rates, and increased the annual contractual lease escalations from 2.5% to 3.0%. In connection with this extension, CommonSpirit was provided the right to reduce the amount of space leased by up to approximately 200,000 square feet at any time after the original lease maturity dates. These termination rights were evaluated for likelihood of exercise in accordance with ASC 842 in the determination of the lease term. During the year ended December 31, 2024, CommonSpirit represented 6% of revenues for the outpatient medical segment and 3% of total revenues.