(Mark One) | ||||||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended: | ||||||||
OR | ||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period to For the transition period to |
(State or other jurisdiction of Incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
PART I - FINANCIAL INFORMATION | ||||||||
PART II - OTHER INFORMATION | ||||||||
SIGNATURE |
ASSETS | ||||||||
Unaudited SEPTEMBER 30, 2020 | DECEMBER 31, 2019 | |||||||
Real estate properties | ||||||||
Land | $ | $ | ||||||
Buildings, improvements and lease intangibles | ||||||||
Personal property | ||||||||
Construction in progress | ||||||||
Land held for development | ||||||||
Total real estate properties | ||||||||
Less accumulated depreciation and amortization | ( | ( | ||||||
Total real estate properties, net | ||||||||
Cash and cash equivalents | ||||||||
Restricted cash | ||||||||
Assets held for sale, net | ||||||||
Operating lease right-of-use assets | ||||||||
Financing lease right-of-use assets | ||||||||
Other assets, net | ||||||||
Total assets | $ | $ | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Liabilities | ||||||||
Notes and bonds payable | $ | $ | ||||||
Accounts payable and accrued liabilities | ||||||||
Liabilities of assets held for sale | ||||||||
Operating lease liabilities | ||||||||
Financing lease liabilities | ||||||||
Other liabilities | ||||||||
Total liabilities | ||||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock, $ | ||||||||
Common stock, $ | ||||||||
Additional paid-in capital | ||||||||
Accumulated other comprehensive loss | ( | ( | ||||||
Cumulative net income attributable to common stockholders | ||||||||
Cumulative dividends | ( | ( | ||||||
Total stockholders' equity | ||||||||
Total liabilities and stockholders' equity | $ | $ |
THREE MONTHS ENDED September 30, | NINE MONTHS ENDED September 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Revenues | ||||||||||||||
Rental income | $ | $ | $ | $ | ||||||||||
Expenses | ||||||||||||||
Property operating | ||||||||||||||
General and administrative | ||||||||||||||
Acquisition and pursuit costs | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Other Income (Expense) | ||||||||||||||
Gain on sales of real estate assets | ||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||
Impairment of real estate assets | — | — | — | ( | ||||||||||
Interest and other income (expense), net | — | ( | ||||||||||||
( | ( | ( | ||||||||||||
Net Income | $ | $ | $ | $ | ||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||
Diluted earnings per common share | $ | $ | $ | $ | ||||||||||
Weighted average common shares outstanding - basic | ||||||||||||||
Weighted average common shares outstanding - diluted | ||||||||||||||
Dividends declared, per common share, during the period | $ | $ | $ | $ |
THREE MONTHS ENDED September 30, | NINE MONTHS ENDED September 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Net income | $ | $ | $ | $ | ||||||||||
Other comprehensive income (loss) | ||||||||||||||
Interest rate swaps | ||||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | ||||||||||||||
Losses arising during the period on interest rate swaps | ( | ( | ( | ( | ||||||||||
Losses on settlement of treasury rate locks arising during the period | ( | |||||||||||||
( | ( | ( | ||||||||||||
Comprehensive income | $ | $ | $ | $ |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Net Income | Cumulative Dividends | Total Stockholders’ Equity | |||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Issuance of common stock, net of issuance costs | — | — | — | |||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | — | — | — | — | ||||||||||||||||
Losses arising during the period on interest rate swaps and treasury rate locks | — | — | ( | — | — | ( | ||||||||||||||
Dividends to common stockholders ($ | — | — | — | — | ( | ( | ||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Net Income | Cumulative Dividends | Total Stockholders’ Equity | |||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Issuance of common stock, net of issuance costs | — | — | — | |||||||||||||||||
Common stock redemptions | — | ( | — | — | — | ( | ||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | — | — | — | — | ||||||||||||||||
Losses arising during the period on interest rate swaps | — | — | ( | — | — | ( | ||||||||||||||
Dividends to common stockholders ($ | — | — | — | — | ( | ( | ||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | ( | $ | $ | ( | $ |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Net Income | Cumulative Dividends | Total Stockholders’ Equity | |||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Issuance of common stock, net of issuance costs | — | — | — | |||||||||||||||||
Common stock redemptions | — | ( | — | — | — | ( | ||||||||||||||
Share-based compensation | — | — | — | |||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | — | — | — | — | ||||||||||||||||
Losses arising during the period on interest rate swaps | — | — | ( | — | — | ( | ||||||||||||||
Dividends to common stockholders ($ | — | — | — | — | ( | ( | ||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Net Income | Cumulative Dividends | Total Stockholders’ Equity | |||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Issuance of common stock, net of issuance costs | — | — | — | |||||||||||||||||
Common stock redemptions | ( | ( | — | — | — | ( | ||||||||||||||
Share-based compensation | — | — | — | |||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | — | — | — | — | ||||||||||||||||
Losses arising during the period on interest rate swaps | — | — | ( | — | — | ( | ||||||||||||||
Dividends to common stockholders ($ | — | — | — | — | ( | ( | ||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | ( | $ | $ | ( | $ |
OPERATING ACTIVITIES | ||||||||
NINE MONTHS ENDED September 30, | ||||||||
2020 | 2019 | |||||||
Net income | $ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | ||||||||
Other amortization | ||||||||
Share-based compensation | ||||||||
Amortization of straight-line rent receivable (lessor) | ( | ( | ||||||
Amortization of straight-line rent on operating leases (lessee) | ||||||||
Gain on sales of real estate assets | ( | ( | ||||||
Impairment of real estate assets | — | |||||||
Loss from unconsolidated joint ventures | ||||||||
Distributions from unconsolidated joint ventures | ||||||||
Proceeds from disposition of sales-type lease properties | ||||||||
Changes in operating assets and liabilities: | ||||||||
Other assets, including right-of-use-assets | ( | ( | ||||||
Accounts payable and accrued liabilities | ||||||||
Other liabilities | ( | |||||||
Net cash provided by operating activities | ||||||||
INVESTING ACTIVITIES | ||||||||
Acquisitions of real estate | ( | ( | ||||||
Development of real estate | ( | ( | ||||||
Additional long-lived assets | ( | ( | ||||||
Proceeds from sales of real estate assets | ||||||||
Net cash used in investing activities | ( | ( | ||||||
FINANCING ACTIVITIES | ||||||||
Net (repayments) borrowings on unsecured credit facility | ( | |||||||
Borrowings on term loan | ||||||||
Borrowings of notes and bonds payable | — | |||||||
Repayments of notes and bonds payable | ( | ( | ||||||
Dividends paid | ( | ( | ||||||
Net proceeds from issuance of common stock | ||||||||
Common stock redemptions | ( | ( | ||||||
Settlement of treasury rate locks | ( | — | ||||||
Debt issuance and assumption costs | ( | ( | ||||||
Payments made on finance leases | ( | ( | ||||||
Net cash provided by financing activities | ||||||||
Increase in cash, cash equivalents and restricted cash | ||||||||
Cash and cash equivalents at beginning of period | ||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
Supplemental Cash Flow Information | ||||||||
Interest paid | $ | $ | ||||||
Invoices accrued for construction, tenant improvements and other capitalized costs | $ | $ | ||||||
Mortgage notes payable assumed upon acquisition (adjusted to fair value) | $ | $ | — | |||||
Capitalized interest | $ | $ | ||||||
THREE MONTHS ENDED September 30, | NINE MONTHS ENDED September 30, | |||||||||||||
in thousands | 2020 | 2019 | 2020 | 2019 | ||||||||||
Type of Revenue | ||||||||||||||
Parking income | $ | $ | $ | $ | ||||||||||
Rental lease guaranty | ||||||||||||||
Management fee income | ||||||||||||||
Miscellaneous | ||||||||||||||
$ | $ | $ | $ |
In thousands | September 30, 2020 | December 31, 2019 | ||||||
Cash and cash equivalents | $ | $ | ||||||
Restricted cash | ||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
Dollars in millions | TYPE 1 | DATE ACQUIRED | PURCHASE PRICE | MORTGAGE NOTES PAYABLE | CASH CONSIDERATION 2 | REAL ESTATE | OTHER 3 | SQUARE FOOTAGE | ||||||||||||||||||
Los Angeles, CA | MOB | 1/3/20 | $ | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Atlanta, GA | MOB | 2/13/20 | ( | |||||||||||||||||||||||
Raleigh, NC | MOB | 2/25/20 | ||||||||||||||||||||||||
Colorado Springs, CO | MOB | 3/9/20 | ( | |||||||||||||||||||||||
Denver, CO 4 | MOB | 3/13/20 | ( | |||||||||||||||||||||||
San Diego, CA | MOB | 7/1/20 | ( | |||||||||||||||||||||||
Los Angeles, CA | MOB | 7/17/20 | ||||||||||||||||||||||||
Seattle, WA | MOB | 7/23/20 | ( | |||||||||||||||||||||||
Atlanta, GA | MOB | 7/31/20 | ||||||||||||||||||||||||
Houston, TX | MOB | 9/24/20 | ( | |||||||||||||||||||||||
Los Angeles, CA | MOB | 9/28/20 | ||||||||||||||||||||||||
Total real estate acquisitions | $ | $ | ( | $ | $ | $ | ( | |||||||||||||||||||
Land acquisition 5 | ||||||||||||||||||||||||||
Land acquisition 6 | ||||||||||||||||||||||||||
$ | $ | ( | $ | $ | $ | ( |
Dollars in millions | TYPE 1 | Date Disposed | Sale Price | Closing Adjustments | Net Proceeds | Net Real Estate Investment | Other (including receivables)2 | Gain/(Impairment) | Square Footage (Unaudited) | ||||||||||||||||||||
Springfield, MO 3 | SF | 7/30/20 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Oklahoma City, OK 3 | MOB | 7/30/20 | |||||||||||||||||||||||||||
Miami, FL | MOB | 9/30/20 | ( | ||||||||||||||||||||||||||
Total dispositions | $ | $ | ( | $ | $ | $ | $ |
(Dollars in thousands) | September 30, 2020 | December 31, 2019 | ||||||||||||
Balance Sheet data: | ||||||||||||||
Land | $ | $ | ||||||||||||
Building, improvements and lease intangibles | ||||||||||||||
Personal property | ||||||||||||||
Accumulated depreciation | ( | |||||||||||||
Real estate assets held for sale, net | ||||||||||||||
Other assets, net | ||||||||||||||
Assets held for sale, net | $ | $ | ||||||||||||
Accounts payable and accrued liabilities | $ | $ | ||||||||||||
Other liabilities | ||||||||||||||
Liabilities of assets held for sale | $ | $ |
SALES-TYPE LEASES | |||||||||||
In thousands | three months ended September 30, 2020 | nine months ended September 30, 2020 | |||||||||
Profit recognized at commencement date | $ | $ | Gain on sales of real estate assets | ||||||||
Interest income | Rental income |
In thousands | Operating | |||||||
2020 | $ | |||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 and thereafter | ||||||||
$ |
In thousands | OPERATING | FINANCING | ||||||
2020 | $ | $ | ||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 and thereafter | ||||||||
Total undiscounted lease payments | ||||||||
Discount | ( | ( | ||||||
Lease liabilities | $ | $ |
THREE MONTHS ENDED September 30, | NINE MONTHS ENDED September 30, | |||||||||||||
In thousands | 2020 | 2019 | 2020 | 2019 | ||||||||||
Operating lease cost | ||||||||||||||
Operating lease expense | $ | $ | $ | $ | ||||||||||
Variable lease expense | ||||||||||||||
Finance lease cost | ||||||||||||||
Amortization of right-of-use assets | ||||||||||||||
Interest on lease liabilities | ||||||||||||||
Total lease expense | $ | $ | $ | $ | ||||||||||
Other information | ||||||||||||||
Operating cash flows outflows related to operating leases | $ | $ | $ | $ | ||||||||||
Financing cash flows outflows related to financing leases | $ | $ | $ | $ | ||||||||||
Right-of-use assets obtained in exchange for new finance lease liabilities | $ | $ | $ | $ | ||||||||||
Weighted-average remaining lease term (excluding renewal options) - operating leases | ||||||||||||||
Weighted-average remaining lease term (excluding renewal options) -finance leases | ||||||||||||||
Weighted-average discount rate - operating leases | % | % | ||||||||||||
Weighted-average discount rate - finance leases | % | % |
MATURITY DATES | BALANCE AS OF | EFFECTIVE INTEREST RATE as of 9/30/2020 | ||||||||||||
Dollars in thousands | 9/30/2020 | 12/31/2019 | ||||||||||||
$ | 5/23 | $ | $ | N/A | ||||||||||
$ | 5/24 | % | ||||||||||||
$ | 6/26 | % | ||||||||||||
Senior Notes due 2023, net of discount and issuance costs | 4/23 | % | ||||||||||||
Senior Notes due 2025, net of discount and issuance costs 3 | 5/25 | % | ||||||||||||
Senior Notes due 2028, net of discount and issuance costs | 1/28 | % | ||||||||||||
Senior Notes due 2030, net of discount and issuance costs 4 | 3/30 | % | ||||||||||||
Mortgage notes payable, net of discounts and issuance costs and including premiums | 1/21-4/27 | % | ||||||||||||
$ | $ |
DERIVATIVE INSTRUMENT | NUMBER OF INSTRUMENTS | NOTIONAL AMOUNT in millions | ||||||
Interest rate swaps | $ |
BALANCE AT SEPTEMBER 30, 2020 | ||||||||
In thousands | BALANCE SHEET LOCATION | FAIR VALUE | ||||||
Derivatives designated as hedging instruments | ||||||||
Interest rate swaps | Other liabilities | $ | ||||||
Total derivatives designated as hedging instruments | $ |
LOSS RECOGNIZED IN AOCI ON DERIVATIVE three months ended September 30, | (GAIN) LOSS RECLASSIFIED FROM AOCI INTO INCOME three months ended September 30, | ||||||||||||||||
In thousands | 2020 | 2019 | 2020 | 2019 | |||||||||||||
Interest rate swaps | $ | $ | Interest expense | $ | $ | ||||||||||||
Settled treasury hedges | Interest expense | ||||||||||||||||
Settled interest rate swaps | Interest expense | ||||||||||||||||
$ | $ | Total interest expense | $ | $ |
LOSS RECOGNIZED IN AOCI ON DERIVATIVE nine months ended September 30, | (GAIN) LOSS RECLASSIFIED FROM AOCI INTO INCOME nine months ended September 30, | ||||||||||||||||
In thousands | 2020 | 2019 | 2020 | 2019 | |||||||||||||
Interest rate swaps | $ | $ | Interest expense | $ | $ | ( | |||||||||||
Settled treasury hedges | Interest expense | ||||||||||||||||
Settled interest rate swaps | Interest expense | ||||||||||||||||
$ | $ | Total interest expense | $ | $ |
SEPTEMBER 30, 2020 | DECEMBER 31, 2019 | |||||||
Balance, beginning of period | ||||||||
Issuance of common stock | ||||||||
Nonvested share-based awards, net of withheld shares | ||||||||
Balance, end of period |
THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||
Dollars in thousands, except per share data | 2020 | 2019 | 2020 | 2019 | ||||||||||
Weighted average common shares outstanding | ||||||||||||||
Weighted average common shares outstanding | ||||||||||||||
Non-vested shares | ( | ( | ( | ( | ||||||||||
Weighted average common shares outstanding - basic | ||||||||||||||
Weighted average common shares outstanding - basic | ||||||||||||||
Dilutive effect of forward equity shares | ||||||||||||||
Dilutive effect of employee stock purchase plan | ||||||||||||||
Weighted average common shares outstanding - diluted | ||||||||||||||
Net Income | $ | $ | $ | $ | ||||||||||
Dividends paid on nonvested share-based awards | ( | ( | ( | ( | ||||||||||
Net income applicable to common stockholders | $ | $ | $ | $ | ||||||||||
Basic earnings per common share - net income | $ | $ | $ | $ | ||||||||||
Diluted earnings per common share - net income | $ | $ | $ | $ |
THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Share-based awards, beginning of period | ||||||||||||||
Granted | ||||||||||||||
Vested 1 | ( | ( | ( | |||||||||||
Share-based awards, end of period |
THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Outstanding and exercisable, beginning of period | ||||||||||||||
Granted | ||||||||||||||
Exercised | ( | ( | ( | ( | ||||||||||
Forfeited | ( | ( | ( | ( | ||||||||||
Expired | ( | ( | ||||||||||||
Outstanding and exercisable, end of period |
September 30, 2020 | December 31, 2019 | |||||||||||||
Dollars in millions | CARRYING VALUE | FAIR VALUE | CARRYING VALUE | FAIR VALUE | ||||||||||
Notes and bonds payable 1 | $ | $ | $ | $ | ||||||||||
Dollars in millions | HEALTH SYSTEM AFFILIATION | DATE ACQUIRED | PURCHASE PRICE | SQUARE FOOTAGE | CAP RATE | MILES TO CAMPUS | ||||||||||||||
Los Angeles, CA | MemorialCare Health | 1/3/20 | $ | 42.0 | 86,986 | 5.3 | % | 0.14 | ||||||||||||
Atlanta, GA | Wellstar Health System | 2/13/20 | 12.0 | 64,624 | 5.6 | % | 0.10 | |||||||||||||
Raleigh, NC | WakeMed Health | 2/25/20 | 6.3 | 15,964 | 6.7 | % | 0.04 | |||||||||||||
Colorado Springs, CO | None | 3/9/20 | 8.2 | 34,210 | 6.5 | % | 1.60 | |||||||||||||
Denver, CO 1 | UCHealth | 3/13/20 | 33.5 | 136,994 | 6.1 | % | 0.24 | |||||||||||||
San Diego, CA | Palomar Health | 7/1/20 | 16.7 | 46,083 | 5.9 | % | 0.04 | |||||||||||||
Los Angeles, CA | Cedars-Sinai/Huntington | 7/17/20 | 35.0 | 49,785 | 5.4 | % | 0.11 | |||||||||||||
Seattle, WA | MultiCare Health System | 7/23/20 | 11.0 | 21,309 | 5.6 | % | 0.06 | |||||||||||||
Atlanta, GA | Wellstar Health System | 7/31/20 | 20.5 | 48,145 | 6.2 | % | 0.13 | |||||||||||||
Houston, TX | Memorial Hermann Health | 9/24/20 | 11.0 | 40,235 | 5.6 | % | 0.03 | |||||||||||||
Los Angeles, CA | Providence St. Joseph Health | 9/28/20 | 14.0 | 24,252 | 5.6 | % | 0.03 | |||||||||||||
Total real estate acquisitions | $ | 210.2 | 568,587 | 5.7 | % | |||||||||||||||
Land acquisition 2 | 1.6 | — | ||||||||||||||||||
Land acquisition 3 | 1.0 | — | ||||||||||||||||||
$ | 212.8 | 568,587 |
Dollars in millions | Date Disposed | Sales Price | Square Footage | 3Q 2020 NOI | Disposition Cap Rate | Property Type | |||||||||||||||||
Springfield, MO | 7/30/20 | $ | 138.0 | 186,000 | $ | 0.8 | 7.5 | % | SF | ||||||||||||||
Oklahoma City, OK | 7/30/20 | 106.5 | 200,000 | 0.6 | 7.5 | % | MOB | ||||||||||||||||
Miami, FL | 9/30/20 | 5.0 | 26,000 | — | 3.9 | % | MOB | ||||||||||||||||
Total dispositions | $ | 249.5 | 412,000 | $ | 1.4 | 7.4 | % |
EFFECTIVE DATE | AMOUNT | WEIGHTED AVERAGE RATE | EXPIRATION DATE | ||||||||
December 18, 2017 | $ | 25,000 | 2.18 | % | December 16, 2022 | ||||||
February 1, 2018 | 50,000 | 2.46 | % | December 16, 2022 | |||||||
May 1, 2019 | 50,000 | 2.33 | % | May 1, 2026 | |||||||
June 3, 2019 | 50,000 | 2.13 | % | May 1, 2026 | |||||||
$ | 175,000 | 2.29 | % |
NUMBER OF PROPERTIES | GROSS REAL ESTATE INVESTMENT AS OF SEPTEMBER 30, 2020 | ||||||||||||||||
YEAR EXERCISABLE | MOB | INPATIENT | FAIR MARKET VALUE METHOD 1 | NON FAIR MARKET VALUE METHOD 2 | TOTAL | ||||||||||||
Current 3 | 3 | 1 | $ | 96,865 | $ | — | $ | 96,865 | |||||||||
2021 | 1 | — | — | 14,984 | 14,984 | ||||||||||||
2022 | — | — | — | — | — | ||||||||||||
2023 | — | — | — | — | — | ||||||||||||
2024 | — | — | — | — | — | ||||||||||||
2025 | 4 | — | 48,165 | 19,459 | 67,624 | ||||||||||||
2026 | — | — | — | — | — | ||||||||||||
2027 | — | — | — | — | — | ||||||||||||
2028 | 1 | — | 43,961 | — | 43,961 | ||||||||||||
2029 | 1 | — | 26,494 | — | 26,494 | ||||||||||||
2030 and thereafter | 4 | — | 101,118 | — | 101,118 | ||||||||||||
Total | 14 | 1 | $ | 316,603 | $ | 34,443 | $ | 351,046 |
THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||
Amounts in thousands, except per share data | 2020 | 2019 | 2020 | 2019 | ||||||||||
Net income | $ | 8,230 | $ | 2,601 | $ | 88,058 | $ | 11,975 | ||||||
(Gain) on sales of real estate assets | (2,177) | (200) | (70,395) | (5,065) | ||||||||||
Impairment of real estate assets | — | — | — | 5,610 | ||||||||||
Real estate depreciation and amortization | 48,295 | 45,926 | 145,564 | 133,993 | ||||||||||
FFO attributable to common stockholders | $ | 54,348 | $ | 48,327 | $ | 163,227 | $ | 146,513 | ||||||
Acquisition and pursuit costs 1 | 440 | 501 | 1,621 | 1,227 | ||||||||||
Lease intangible amortization | (35) | 5 | 694 | 143 | ||||||||||
Accelerated Stock Awards | — | 2,854 | — | 2,854 | ||||||||||
Debt financing costs | — | — | — | 760 | ||||||||||
Normalized FFO attributable to common stockholders | $ | 54,753 | $ | 51,687 | $ | 165,542 | $ | 151,497 | ||||||
Non-real estate depreciation and amortization | 785 | 838 | 2,430 | 2,430 | ||||||||||
Non-cash interest expense amortization 2 | 934 | 727 | 2,715 | 2,136 | ||||||||||
Provision for bad debt, net | (144) | (32) | 718 | 43 | ||||||||||
Straight-line rent, net | (535) | (379) | (1,577) | (650) | ||||||||||
Stock-based compensation 3 | 2,445 | 2,375 | 7,449 | 7,386 | ||||||||||
Normalized FFO adjusted for non-cash items | $ | 58,238 | $ | 55,216 | $ | 177,277 | $ | 162,842 | ||||||
2nd generation TI | (5,323) | (6,114) | (17,368) | (16,564) | ||||||||||
Leasing commissions paid | (1,999) | (2,697) | (7,081) | (6,359) | ||||||||||
Capital additions | (4,580) | (3,543) | (12,827) | (11,998) | ||||||||||
FAD | $ | 46,336 | $ | 42,862 | $ | 140,001 | $ | 127,921 | ||||||
FFO per common share - diluted | $ | 0.40 | $ | 0.37 | $ | 1.21 | $ | 1.15 | ||||||
Normalized FFO per common share - diluted | $ | 0.41 | $ | 0.40 | $ | 1.23 | $ | 1.19 | ||||||
FFO weighted average common shares outstanding - diluted 4 | 135,159 | 129,015 | 134,537 | 127,424 |
NUMBER OF PROPERTIES | GROSS INVESTMENT at September 30, 2020 | SAME STORE CASH NOI for the three months ended September 30, | ||||||||||||
Dollars in thousands | 2020 | 2019 | ||||||||||||
Multi-tenant properties | 156 | $ | 3,237,143 | $ | 57,663 | $ | 56,317 | |||||||
Single-tenant net lease properties | 12 | 257,229 | 6,033 | 5,870 | ||||||||||
Total | 168 | $ | 3,494,372 | $ | 63,696 | $ | 62,187 |
THREE MONTHS ENDED SEPTEMBER 30, | ||||||||
Dollars in thousands | 2020 | 2019 | ||||||
Net income | $ | 8,230 | $ | 2,601 | ||||
Other income (expense) | 11,969 | 13,981 | ||||||
General and administrative expense | 7,299 | 10,802 | ||||||
Depreciation and amortization expense | 47,143 | 45,137 | ||||||
Other expenses 1 | 2,737 | 2,462 | ||||||
Straight-line rent revenue | (915) | (770) | ||||||
Other revenue 2 | (3,062) | (1,726) | ||||||
Cash NOI | 73,401 | 72,487 | ||||||
Cash NOI not included in same store | (9,705) | (10,300) | ||||||
Same store cash NOI | 63,696 | 62,187 | ||||||
Reposition NOI | 1,358 | 1,660 | ||||||
Same store and reposition cash NOI | $ | 65,054 | $ | 63,847 |
AS OF SEPTEMBER 30, 2020 | ||||||||||||||
PROPERTY COUNT | GROSS INVESTMENT | SQUARE FEET | OCCUPANCY | |||||||||||
Same store properties | 168 | $ | 3,494,372 | 12,795,403 | 88.4 | % | ||||||||
Acquisitions | 31 | 647,974 | 1,667,990 | 91.4 | % | |||||||||
Development completions | 1 | 51,889 | 151,031 | 60.5 | % | |||||||||
Reposition | 11 | 142,381 | 859,004 | 62.1 | % | |||||||||
Total owned real estate properties | 211 | $ | 4,336,616 | 15,473,428 | 87.0 | % |
THREE MONTHS ENDED SEPTEMBER 30, | CHANGE | |||||||||||||
Dollars in thousands | 2020 | 2019 | $ | % | ||||||||||
Property operating | $ | 114,921 | $ | 105,805 | $ | 9,116 | 8.6 | % | ||||||
Single-tenant net lease | 7,548 | 11,165 | (3,617) | (32.4) | % | |||||||||
Straight-line rent | 915 | 770 | 145 | 18.8 | % | |||||||||
Rental income | 123,384 | 117,740 | 5,644 | 4.8 | % | |||||||||
Other operating | 1,868 | 2,059 | (191) | (9.3) | % | |||||||||
Total revenues | $ | 125,252 | $ | 119,799 | $ | 5,453 | 4.6 | % |
THREE MONTHS ENDED SEPTEMBER 30, | CHANGE | |||||||||||||
Dollars in thousands | 2020 | 2019 | $ | % | ||||||||||
Contractual interest | $ | 13,182 | $ | 13,605 | $ | (423) | (3.1) | % | ||||||
Net discount/premium accretion | 102 | 72 | 30 | 41.7 | % | |||||||||
Deferred financing costs amortization | 683 | 613 | 70 | 11.4 | % | |||||||||
Interest rate swap amortization | 42 | 42 | — | — | % | |||||||||
Treasury hedge amortization | 107 | — | 107 | — | % | |||||||||
Interest cost capitalization | (207) | (347) | 140 | (40.3) | % | |||||||||
Right-of-use assets financing amortization | 245 | 196 | 49 | 25.0 | % | |||||||||
Total interest expense | $ | 14,154 | $ | 14,181 | $ | (27) | (0.2) | % |
NINE MONTHS ENDED SEPTEMBER 30, | CHANGE | |||||||||||||
Dollars in thousands | 2020 | 2019 | $ | % | ||||||||||
Property operating | $ | 337,144 | $ | 307,606 | $ | 29,538 | 9.6 | % | ||||||
Single-tenant net lease | 28,519 | 33,348 | (4,829) | (14.5) | % | |||||||||
Straight-line rent | 2,722 | 1,833 | 889 | 48.5 | % | |||||||||
Rental income | 368,385 | 342,787 | 25,598 | 7.5 | % | |||||||||
Other operating | 5,364 | 5,987 | (623) | (10.4) | % | |||||||||
Total revenues | $ | 373,749 | $ | 348,774 | $ | 24,975 | 7.2 | % |
NINE MONTHS ENDED SEPTEMBER 30, | CHANGE | |||||||||||||
Dollars in thousands | 2020 | 2019 | $ | % | ||||||||||
Contractual interest | $ | 40,031 | $ | 40,091 | $ | (60) | (0.1) | % | ||||||
Net discount/premium accretion | 358 | 174 | 184 | 105.7 | % | |||||||||
Deferred financing costs amortization | 2,003 | 1,835 | 168 | 9.2 | % | |||||||||
Interest rate swap amortization | 126 | 126 | — | — | % | |||||||||
Treasury hedge amortization | 229 | — | 229 | — | % | |||||||||
Interest cost capitalization | (913) | (999) | 86 | (8.6) | % | |||||||||
Right-of-use assets financing amortization | 722 | 392 | 330 | 84.2 | % | |||||||||
Total interest expense | $ | 42,556 | $ | 41,619 | $ | 937 | 2.3 | % |
EXHIBIT | DESCRIPTION | ||||
Exhibit 4.1 | Specimen Stock Certificate 2 | ||||
Exhibit 4.9 | |||||
Exhibit 4.10 | |||||
Exhibit 4.11 | |||||
Exhibit 4.12 | |||||
Exhibit 101.INS | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | ||||
Exhibit 101.SCH | XBRL Taxonomy Extension Schema Document (furnished electronically herewith) | ||||
Exhibit 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (furnished electronically herewith) | ||||
Exhibit 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document (furnished electronically herewith) | ||||
Exhibit 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (furnished electronically herewith) | ||||
Exhibit 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (furnished electronically herewith) |
HEALTHCARE REALTY TRUST INCORPORATED | ||||||||
By: | /s/ J. CHRISTOPHER DOUGLAS | |||||||
J. Christopher Douglas | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
November 4, 2020 |
Date: | November 4, 2020 | |||||||
/s/ TODD J. MEREDITH | ||||||||
Todd J. Meredith | ||||||||
President and Chief Executive Officer |
Date: | November 4, 2020 | |||||||
/s/ J. CHRISTOPHER DOUGLAS | ||||||||
J. Christopher Douglas | ||||||||
Executive Vice President and Chief Financial Officer |
Date: | November 4, 2020 | |||||||
/s/ TODD J. MEREDITH | ||||||||
Todd J. Meredith | ||||||||
President and Chief Executive Officer | ||||||||
/s/ J. CHRISTOPHER DOUGLAS | ||||||||
J. Christopher Douglas | ||||||||
Executive Vice President and Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (shares) | 0 | 0 |
Preferred stock, outstanding (shares) | 0 | 0 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 300,000,000 | 300,000,000 |
Common stock, issued (shares) | 136,054,000 | 134,706,000 |
Common stock, outstanding (shares) | 136,054,000 | 134,706,000 |
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Revenues | ||||
Rental income | $ 123,384 | $ 117,740 | $ 368,385 | $ 342,787 |
Other operating | 1,868 | 2,059 | 5,364 | 5,987 |
Revenues | 125,252 | 119,799 | 373,749 | 348,774 |
Expenses | ||||
Property operating | 50,171 | 46,777 | 146,305 | 133,790 |
General and administrative | 7,299 | 10,802 | 23,498 | 27,157 |
Acquisition and pursuit costs | 440 | 501 | 1,621 | 1,227 |
Depreciation and amortization | 47,143 | 45,137 | 142,331 | 131,725 |
Expenses | 105,053 | 103,217 | 313,755 | 293,899 |
Other Income (Expense) | ||||
Gain on sales of real estate assets | 2,177 | 200 | 70,395 | 5,065 |
Interest expense | (14,154) | (14,181) | (42,556) | (41,619) |
Impairment of real estate assets | (5,610) | |||
Interest and other income (expense), net | 8 | 225 | (736) | |
Total other income (expense) | (11,969) | (13,981) | 28,064 | (42,900) |
Net Income | $ 8,230 | $ 2,601 | $ 88,058 | $ 11,975 |
Basic earnings per common share (in dollars per share) | $ 0.06 | $ 0.02 | $ 0.65 | $ 0.08 |
Diluted earnings per common share (in dollars per share) | $ 0.06 | $ 0.02 | $ 0.65 | $ 0.08 |
Weighted average common shares outstanding - basic | 134,309,417 | 128,090,074 | 133,662,140 | 126,570,895 |
Weighted average common shares outstanding - diluted | 134,357,227 | 128,168,684 | 133,736,169 | 126,656,585 |
Dividends declared, per common share, during the period (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.90 | $ 0.90 |
Revenue, Product and Service [Extensible List] | us-gaap:ServiceMember | us-gaap:ServiceMember | us-gaap:ServiceMember | us-gaap:ServiceMember |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Net income | $ 8,230 | $ 2,601 | $ 88,058 | $ 11,975 |
Interest rate swaps | ||||
Reclassification adjustments for losses included in net income (interest expense) | 1,101 | 60 | 2,367 | 74 |
Losses arising during the period on interest rate swaps | 74 | 2,341 | 15,459 | 7,642 |
Other comprehensive income (loss) | 1,027 | (2,281) | (13,092) | (7,568) |
Comprehensive income | 9,257 | 320 | 74,966 | 4,407 |
Interest Rate Swaps | ||||
Interest rate swaps | ||||
Losses arising during the period on interest rate swaps | (74) | (2,341) | (11,192) | (7,642) |
Treasury Rate Locks | ||||
Interest rate swaps | ||||
Losses arising during the period on interest rate swaps | $ 0 | $ 0 | $ (4,267) | $ 0 |
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Dividend per share to common Stockholders (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.90 | $ 0.90 |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of significant accounting policies | Business Overview Healthcare Realty Trust Incorporated (the "Company") is a real estate investment trust ("REIT") that owns, leases, manages, acquires, finances, develops and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of September 30, 2020, the Company had gross investments of approximately $4.3 billion in 211 real estate properties located in 24 states totaling approximately 15.5 million square feet. The Company provided leasing and property management services to approximately 11.9 million square feet nationwide. Square footage and property count disclosures in these Notes to the Company's Condensed Consolidated Financial Statements are unaudited. Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein, management believes there has been no material change in the information disclosed in the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2019. All material intercompany transactions and balances have been eliminated in consolidation. This interim financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. In addition, the interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2020 for many reasons including, but not limited to, acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties, such as the impact of the COVID-19 pandemic. Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. The Company considered the impact of COVID-19 on these assumptions and estimates used and determined that there were no material adverse impacts on the Company's results of operations and financial position at September 30, 2020. There can be no assurance that COVID-19 will not have a future material adverse impact on the financial results and business operations of the Company. COVID-19 Update Since being reported in December 2019, COVID-19 has spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. In response to the COVID-19 pandemic, all of the states and cities in which the Company owns properties, manages properties, and/or has development or redevelopment projects instituted quarantines, restrictions on travel, “shelter in place” rules, restrictions on types of businesses that may continue to operate, and/or restrictions on the types of construction projects that may continue. As a result, a number of the Company's tenants temporarily closed their offices or clinical space or operated on a reduced basis in response to government requirements or recommendations. Many of these restrictions have been lifted, but could be reimposed. In response to these disruptions, the Company provided some of its tenants with deferred rent arrangements. Such arrangements were made primarily in the second quarter of 2020, and less than $0.1 million of deferred rent arrangements originated in the third quarter. Through November 2, 2020, the Company has collected more than 99% of second and third quarter 2020 aggregate tenant billings. The Company has collected 96% of total scheduled deferral payments due in the third quarter of 2020. In addition, the Company has remaining various forms of rent deferrals outstanding representing approximately $1.2 million, or less than 1% of second and third quarter 2020 aggregate tenant billings. The tenant deferral agreements generally require the deferred amounts to be repaid by the fourth quarter of 2020. For accounting purposes, in accordance with ASC 842: Leases, normally a company would be required to assess a lease modification to determine if the modification should be treated as a separate lease and if not, modification accounting would be applied which would require a company to reassess the classification of the lease. However, in light of the COVID-19 pandemic in which many leases are being modified, the Financial Accounting Standards Board (the "FASB") and U.S. Securities and Exchange Commission (the "SEC") have provided relief that will allow companies to make a policy election as to whether they treat COVID-19 related lease amendments as a provision included in the pre-concession arrangement, and therefore, not a lease modification, or to treat the lease amendment as a modification. The Company has elected to use this relief where applicable and therefore will have no change in the current classification of its leases in connection with many of the leases impacted by negotiations with its tenants. In order to be considered COVID-19 related, cash flows must be substantially the same or less than those prior to the concession. If the cash flows are substantially the same or less, there are two methods to potentially account for such rent deferrals under the relief. The first would be as if no changes to the lease contract were made. Under that accounting, a lessor would increase its lease receivable and a lessee would increase its accounts payable as receivables/payments accrue. In its income statement, a lessor would continue to recognize revenue during the deferral period. The second method would be to treat the deferred payments as variable lease payments (i.e., revenue recognized when cash received). The Company has elected the first method described above, which results in the revenue being recognized on an accrual basis. If tenants are unable to timely repay deferred rent, or repay at all, request additional rent deferrals or abatements, decide not to renew leases, or renew leases at lower cash leasing spreads, the impact on the Company’s results of operations and financial condition could be material. In the second quarter of 2020, the Company recognized approximately $0.7 million general reserve against the deferred rent balance. Following positive collection trends in the third quarter of 2020, the Company released approximately $0.3 million of the general reserve. As of September 30, 2020, the Company had a remaining general reserve of $0.4 million against an approximate $1.7 million deferred rent balance. Given the daily evolution of the COVID-19 pandemic and the global response to curb its spread, the Company is not able to estimate the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity for the fiscal year 2020. The Company continues to evaluate the impact of various forms of governmental assistance that may be or become available to the Company or its tenants. Revenue from Contracts with Customers (Topic 606) The Company recognizes certain revenue under the core principle of Topic 606. This requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease revenue is not within the scope of Topic 606. To achieve the core principle, the Company applies the five step model specified in the guidance. Revenue that is accounted for under Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Income in the Other operating line item. This line item includes parking income, rental lease guaranty income, management fee income and other miscellaneous income. Below is a detail of the amounts by category:
The Company’s major types of revenue that are accounted for under Topic 606 that are listed above are all accounted for as the performance obligation is satisfied. The performance obligations that are identified for each of these items are satisfied over time, and the Company recognizes revenue monthly based on this principle. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. Restricted cash includes cash held in escrow from the sale of a property in Oklahoma. These proceeds have been or will be disbursed as the Company acquires real estate investments in like-kind exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company's Condensed Consolidated Balance Sheets to the combined amounts shown on the Company's Condensed Consolidated Statements of Cash Flows:
New Accounting Pronouncements Accounting Standards Update No. 2016-13 In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments." This update is intended to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. This update requires that financial statement assets measured at an amortized cost and certain other financial instruments be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. This standard is effective for annual and interim periods beginning after December 15, 2019 with early adoption permitted. Operating lease receivables, representing the majority of the Company's receivables, are not within the scope of the new standard. The Company adopted this standard as of January 1, 2020. There was not a material impact to the Condensed Consolidated Financial Statements resulting from the adoption of this standard. Accounting Standards Update No. 2017-04 In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." This update eliminates Step 2 of the goodwill impairment test. As such, an entity will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value. This standard is effective for the Company for annual and interim periods beginning after December 15, 2019. The Company adopted this standard as of January 1, 2020. There was not a material impact to the Condensed Consolidated Financial Statements resulting from the adoption of this standard. Accounting Standards Update No. 2020-04 On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has 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 preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
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Real Estate Investments |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investments | Real Estate Investments 2020 Acquisitions The following table details the Company's acquisitions for the nine months ended September 30, 2020:
1MOB = medical office building. 2Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition. 3Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition. 4Includes three properties. 5The Company acquired land parcels under four existing buildings (previously ground leased). 6The Company acquired a land parcel under an existing building (previously ground leased). The building and land were sold on September 30, 2020. Subsequent Acquisition On October 7, 2020 the Company acquired a 36,720 square foot medical office building in Colorado Springs, CO for a purchase price of $8.9 million. 2020 Real Estate Asset Dispositions The following table details the Company's dispositions for the nine months ended September 30, 2020:
1.MOB = medical office building; SF = surgical facility 2.Includes straight-line rent receivables, leasing commissions and lease inducements. 3.In the second quarter of 2020, the Company entered into agreements to sell two single-tenant net leased properties, resulting in a lease modification and classification change from operating to sales-type. Assets Held for Sale In September 2020, the Company reclassified four medical office buildings and a land parcel to assets held for sale upon acceptance of an offer from a third party to purchase the properties under a single sales agreement. The contractual sales price of $23.0 million is greater than the current net investment of approximately $18.1 million. As of September 30, 2020 and December 31, 2019, the Company had four and zero properties, respectively, classified as assets held for sale. The table below reflects the assets and liabilities of the properties classified as held for sale as of September 30, 2020 and December 31, 2019:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Lessor Accounting The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2035. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property. The Company's leases typically have escalators that are either based on a stated percentage or an index such as CPI (consumer price index). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three and nine months ended September 30, 2020 was $123.4 million and $368.4 million, respectively. In May 2020, the Company and Mercy Health negotiated the sale of two single-tenant net leased properties, a medical office building in Oklahoma and an orthopedic specialty hospital in Missouri, for $244.5 million. The sale was structured through amendments to the leases to allow for the early exercise of existing purchase options. The amendments resulted in the application of lease modification accounting under ASC Topic 842, which resulted in lease classification changes from operating to sales-type. During the second quarter, the Company derecognized the real estate assets on the Condensed Consolidated Balance Sheets and recognized the net investment in sales-type leases, resulting in a gain of $68.3 million. The Company disposed of these properties on July 30, 2020. Tabular Disclosure of the Components of Sales-Type Leases The table below presents the components of sale-type leases for the three and nine months ended September 30, 2020:
Future lease payments under the non-cancelable operating leases, excluding any reimbursements, as of September 30, 2020 were as follows:
Lessee Accounting As of September 30, 2020, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of September 30, 2020, the Company had 103 properties totaling 8.7 million square feet that were held under ground leases. Some of the ground leases' renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on the CPI. The Company had 42 prepaid ground leases as of September 30, 2020. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.2 million of the Company’s rental expense for the three months ended September 30, 2020 and 2019, respectively and $0.5 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively. The Company’s future lease payments (primarily for its 61 non-prepaid ground leases) as of September 30, 2020 were as follows:
The following table provides details of the Company's total lease expense for the three and nine months ended September 30, 2020 and 2019:
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Leases | Leases Lessor Accounting The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2035. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property. The Company's leases typically have escalators that are either based on a stated percentage or an index such as CPI (consumer price index). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three and nine months ended September 30, 2020 was $123.4 million and $368.4 million, respectively. In May 2020, the Company and Mercy Health negotiated the sale of two single-tenant net leased properties, a medical office building in Oklahoma and an orthopedic specialty hospital in Missouri, for $244.5 million. The sale was structured through amendments to the leases to allow for the early exercise of existing purchase options. The amendments resulted in the application of lease modification accounting under ASC Topic 842, which resulted in lease classification changes from operating to sales-type. During the second quarter, the Company derecognized the real estate assets on the Condensed Consolidated Balance Sheets and recognized the net investment in sales-type leases, resulting in a gain of $68.3 million. The Company disposed of these properties on July 30, 2020. Tabular Disclosure of the Components of Sales-Type Leases The table below presents the components of sale-type leases for the three and nine months ended September 30, 2020:
Future lease payments under the non-cancelable operating leases, excluding any reimbursements, as of September 30, 2020 were as follows:
Lessee Accounting As of September 30, 2020, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of September 30, 2020, the Company had 103 properties totaling 8.7 million square feet that were held under ground leases. Some of the ground leases' renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on the CPI. The Company had 42 prepaid ground leases as of September 30, 2020. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.2 million of the Company’s rental expense for the three months ended September 30, 2020 and 2019, respectively and $0.5 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively. The Company’s future lease payments (primarily for its 61 non-prepaid ground leases) as of September 30, 2020 were as follows:
The following table provides details of the Company's total lease expense for the three and nine months ended September 30, 2020 and 2019:
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Notes and Bonds Payable |
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Notes and bonds payable | Notes and Bonds Payable The table below details the Company’s notes and bonds payable.
1The effective interest rate includes the impact of interest rate swaps on $75.0 million at a weighted average rate of 2.37% (plus the applicable margin rate, currently 100 basis points). 2The effective interest rate includes the impact of interest rate swaps on $100.0 million at a weighted average rate of 2.23% (plus the applicable margin rate, currently 160 basis points). 3The effective interest rate includes the impact of the $1.7 million settlement of a forward-starting interest rate swap that is included in Accumulated other comprehensive loss on the Company's Condensed Consolidated Balance Sheets. 4The effective interest rate includes the impact of the $4.3 million settlement of forward interest rate hedges that is included in Accumulated other comprehensive loss on the Company's Condensed Consolidated Balance Sheets. Changes in Debt Structure On February 3, 2020, the Company repaid in full a mortgage note payable bearing interest at a rate of 6.10% per annum with an outstanding principal of $5.9 million. The mortgage note encumbered a 68,860 square foot property in Oklahoma. On March 4, 2020, the Company issued $300.0 million of unsecured senior notes due 2030 (the "Senior Notes due 2030") in a registered public offering. The Senior Notes due 2030 bear interest at 2.40%, payable semi-annually on March 15 and September 15, beginning September 15, 2020, and are due on March 15, 2030, unless redeemed earlier by the Company. The notes were issued at a discount of approximately $1.0 million and the Company incurred approximately $2.8 million in debt issuance costs. Concurrent with this transaction, the Company settled two treasury rate locks for $4.3 million. Inclusive of the discount, debt issuance costs and settlement of the treasury rate locks, the effective interest rate was 2.71%. The Senior Notes due 2030 have various financial covenants that are required to be met on a quarterly and annual basis. On May 4, 2020, the Company repaid in full a mortgage note payable bearing interest at a rate of 5.74% per annum with an outstanding principal of $0.3 million. The mortgage note encumbered an 83,318 square foot property in Iowa. On May 29, 2020, the Company borrowed $150.0 million pursuant to its unsecured term loan due 2026. On June 2, 2020, the Company repaid in full a mortgage note payable bearing interest at a rate of 6.44% per annum with an outstanding principal of $12.6 million. The mortgage note encumbered a 67,510 square foot property in Washington. On June 25, 2020, the Company repaid in full three mortgage notes bearing interest at rates of 5.63%, 6.63% and 6.88% per annum with outstanding principal of $0.5 million, $2.8 million, and $7.0 million, respectively. The mortgage notes encumbered a 60,476 square foot property in Minnesota. Subsequent Changes in Debt Structure On October 1, 2020, the Company repaid in full a mortgage note payable bearing interest at a rate of 5.47% per annum with an outstanding principal of $4.2 million. The mortgage note encumbered a 40,171 square foot property in Georgia. On October 2, 2020, the Company issued $300.0 million of unsecured senior notes due 2031 (the "Senior Notes due 2031") in a registered public offering. The Senior Notes due 2031 bear interest at 2.05%, payable semi-annually on March 15 and September 15, beginning March 15, 2021, and are due on March 15, 2031, unless redeemed earlier by the Company. The notes were issued at a discount of approximately $2.4 million and the Company incurred approximately $2.8 million in debt issuance costs. Inclusive of the discount and debt issuance costs, the effective interest rate was 2.24%. The Senior Notes due 2031 have various financial covenants that are required to be met on a quarterly and annual basis.On October 19, 2020, the Company redeemed its unsecured senior notes due 2023 (the "Senior Notes due 2023"). The aggregate redemption price of $270.5 million consisted of outstanding principal of $250.0 million, accrued interest of $0.1 million, and a "make-whole" amount of approximately $20.4 million for the early extinguishment of debt. The unaccreted discount and unamortized costs on these notes of $1.1 million was written off upon redemption. In October 2020, the Company recognized a loss on early extinguishment of debt of approximately $21.5 million related to this redemption.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments | Derivative Financial Instruments Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable 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. Such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. On February 24 and 25, 2020, the Company entered into two treasury rate locks totaling $75.0 million and $40.0 million, respectively. The treasury rate locks were settled for an aggregate amount of $4.3 million on March 4, 2020 concurrent with the Company's issuance of its Senior Notes due 2030. The settlement will be amortized over the 10-year term of the notes. As of September 30, 2020, the Company had eight outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet The table below presents the fair value of the Company's derivative financial instruments, as well as their classification on the Condensed Consolidated Balance Sheet as of September 30, 2020.
Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) The table below presents the effect of cash flow hedge accounting on AOCI during the three and nine months ended September 30, 2020 and 2019 related to the Company's outstanding interest rate swaps.
The Company estimates that $4.4 million will be reclassified from AOCI to interest expense over the next 12 months. Credit-risk-related Contingent Features The Company's agreements with each of its derivative counterparties contain a cross-default provision under which the Company could be declared in default of its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness. As of September 30, 2020, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $15.1 million. As of September 30, 2020, the Company has not posted any collateral related to these agreements and was not in breach of any agreement.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and Contingencies Legal Proceedings The Company is, from time to time, involved in litigation arising in the ordinary course of business. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Redevelopment Activity The Company initiated the redevelopment of a 110,883 square foot medical office building in Memphis, Tennessee ("Memphis Redevelopment") in December 2019. As of September 30, 2020, the Company funded approximately $5.7 million in project costs, excluding the purchase price of $8.7 million for the land and building. The building will continue to operate with in-place leases during construction. The core and shell portion of the Memphis Redevelopment is expected to be completed in the first quarter of 2021, with construction of tenant spaces to be completed throughout the remainder of 2021. Development Activity In the first quarter of 2020, the Company completed the construction of the core and shell of a 151,031 square foot medical office building in Seattle, Washington. As of September 30, 2020, the Company had funded approximately $59.1 million towards the development and additional tenant improvements. The Company expects to fund an additional amount of approximately $5.0 million for additional tenant improvements associated with this project. The first tenant commenced rent payment in the first quarter of 2020.
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Stockholders' Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' equity | Stockholders' Equity Common Stock The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the nine months ended September 30, 2020 and the year ended December 31, 2019:
At-The-Market Equity Offering Program On February 14, 2020, the Company entered into sales agreements with six investment banks to allow sales under its at-the-market equity offering program of up to an aggregate of $500.0 million of common stock. The Company sold 1,268,237 shares under the Company's at-the market equity offering program during the nine months ended September 30, 2020. The sales generated $39.9 million in net proceeds at prices to the public ranging from $30.50 to $36.15 per share (weighted average of $31.86 per share). The sales occurred during the following time periods: •During the first quarter of 2020, the Company sold 196,250 shares generating approximately $7.0 million in net proceeds at prices to the public ranging from $33.00 to $36.15 per share (weighted average of $36.09 per share). •During the second quarter of 2020, the Company sold 1,071,987 shares generating approximately $32.9 million in net proceeds at prices to the public ranging from $30.50 to $31.29 per share (weighted average of $31.08 per share). In addition, the Company has entered into three forward equity agreements totaling 3.6 million shares at a weighted average price of $31.30 per share: •In the second quarter of 2020, the Company entered into a forward equity agreement for a total of 1,579,371 shares at a weighted average price of $31.66 per share, subject to adjustments as provided in the forward equity agreements. This agreement matures in June 2021. •In the third quarter of 2020, the Company entered into a forward equity agreement for a total of 764,472 shares at a weighted average price of $31.84 per share, subject to adjustments as provided in the forward equity agreements. This agreement matures in July 2021. •In the fourth quarter of 2020, the Company entered into a forward equity agreement for a total of 1,235,129 shares at a weighted average price of $30.52 per share, subject to adjustments as provided in the forward equity agreements. This agreement matures in October 2021. After taking into account the forward equity contracts discussed above, the Company has approximately $347.6 million remaining available to be sold under the current sales agreements at the date of this filing. Common Stock Dividends During the nine months ended September 30, 2020, the Company declared and paid common stock dividends totaling $0.90 per share. On November 3, 2020, the Company declared a quarterly common stock dividend in the amount of $0.30 per share payable on December 1, 2020 to stockholders of record on November 16, 2020. Earnings Per Common Share The Company uses the two-class method of computing net earnings per common shares. The Company's nonvested share-based awards are considered participating securities pursuant to the two-class method. During the nine months ended September 30, 2020, the Company entered into forward sale agreements to sell approximately 2.3 million shares of common stock through the Company's at-the-market equity offering program. The Company considered the accounting guidance governing financial instruments and derivatives to account for these agreements and concluded that it was not a liability as it did not embody obligations to repurchase our shares of common stock nor did it embody obligations to issue a variable number of shares for which the monetary value was predominately fixed, varying with something other than the fair value of the shares, or varying inversely in relation to the shares. In addition, the Company evaluated whether the agreements met the derivative and hedging guidance scope exception to be accounted for as an equity instrument and concluded that the agreements can be classified as equity. The Company used the treasury method to determine the dilution from the forward equity agreements during the period of time prior to settlement. The number of weighted-average shares outstanding used in the computation of earnings per common share for the three and nine months ended September 30, 2020 included the effect from the assumed issuance of 2.3 million shares of common stock pursuant to the settlement of the forward equity agreements at the contractual price, less the assumed repurchase of the common stock at the average market price using the proceeds of approximately $72.7 million, adjusted for costs to borrow. For the three and nine months ended September 30, 2020, 137,757 and 51,133 weighted-average incremental shares of common stock were excluded from the computation of weighted-average common shares outstanding - diluted, as the impact was anti-dilutive. The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2020 and 2019.
Incentive Plans A summary of the activity under the Company's share-based incentive plans for the three and nine months ended September 30, 2020 and 2019 is included in the table below.
1The Company's former Executive Chairman, David R. Emery, died on September 30, 2019 resulting in the accelerated vesting of 204,548 outstanding nonvested share-based awards. During the nine months ended September 30, 2020 and 2019, the Company withheld 23,563 and 100,036 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested. In addition to the share-based incentive plans, the Company maintains the 2000 Employee Stock Purchase Plan (the "Purchase Plan"). A summary of the activity under the Purchase Plan for the three and nine months ended September 30, 2020 and 2019 is included in the table below.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments | Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practical to estimate that value. •Cash and cash equivalents - The carrying amount approximates fair value due to the short term maturity of these investments. •Borrowings under the Unsecured Credit Facility and the Term Loans Due 2024 and 2026 - The carrying amount approximates fair value because the borrowings are based on variable market interest rates. •Senior Notes and Mortgage Notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements. •Interest rate swap agreements - Interest rate swap agreements are recorded in other liabilities on the Company's Consolidated Balance Sheets at fair value. Fair value is estimated by utilizing pricing models that consider forward yield curves and discount rates. The table below details the fair values and carrying values for notes and bonds payable at September 30, 2020 and December 31, 2019.
1Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business overview | Business OverviewHealthcare Realty Trust Incorporated (the "Company") is a real estate investment trust ("REIT") that owns, leases, manages, acquires, finances, develops and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of September 30, 2020, the Company had gross investments of approximately $4.3 billion in 211 real estate properties located in 24 states totaling approximately 15.5 million square feet. The Company provided leasing and property management services to approximately 11.9 million square feet nationwide. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation | Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein, management believes there has been no material change in the information disclosed in the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2019. All material intercompany transactions and balances have been eliminated in consolidation. This interim financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. In addition, the interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2020 for many reasons including, but not limited to, acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties, such as the impact of the COVID-19 pandemic.
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Use of estimates in the condensed consolidated financial statements | Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. The Company considered the impact of COVID-19 on these assumptions and estimates used and determined that there were no material adverse impacts on the Company's results of operations and financial position at September 30, 2020. There can be no assurance that COVID-19 will not have a future material adverse impact on the financial results and business operations of the Company. COVID-19 Update Since being reported in December 2019, COVID-19 has spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. In response to the COVID-19 pandemic, all of the states and cities in which the Company owns properties, manages properties, and/or has development or redevelopment projects instituted quarantines, restrictions on travel, “shelter in place” rules, restrictions on types of businesses that may continue to operate, and/or restrictions on the types of construction projects that may continue. As a result, a number of the Company's tenants temporarily closed their offices or clinical space or operated on a reduced basis in response to government requirements or recommendations. Many of these restrictions have been lifted, but could be reimposed. In response to these disruptions, the Company provided some of its tenants with deferred rent arrangements. Such arrangements were made primarily in the second quarter of 2020, and less than $0.1 million of deferred rent arrangements originated in the third quarter. Through November 2, 2020, the Company has collected more than 99% of second and third quarter 2020 aggregate tenant billings. The Company has collected 96% of total scheduled deferral payments due in the third quarter of 2020. In addition, the Company has remaining various forms of rent deferrals outstanding representing approximately $1.2 million, or less than 1% of second and third quarter 2020 aggregate tenant billings. The tenant deferral agreements generally require the deferred amounts to be repaid by the fourth quarter of 2020. For accounting purposes, in accordance with ASC 842: Leases, normally a company would be required to assess a lease modification to determine if the modification should be treated as a separate lease and if not, modification accounting would be applied which would require a company to reassess the classification of the lease. However, in light of the COVID-19 pandemic in which many leases are being modified, the Financial Accounting Standards Board (the "FASB") and U.S. Securities and Exchange Commission (the "SEC") have provided relief that will allow companies to make a policy election as to whether they treat COVID-19 related lease amendments as a provision included in the pre-concession arrangement, and therefore, not a lease modification, or to treat the lease amendment as a modification. The Company has elected to use this relief where applicable and therefore will have no change in the current classification of its leases in connection with many of the leases impacted by negotiations with its tenants. In order to be considered COVID-19 related, cash flows must be substantially the same or less than those prior to the concession. If the cash flows are substantially the same or less, there are two methods to potentially account for such rent deferrals under the relief. The first would be as if no changes to the lease contract were made. Under that accounting, a lessor would increase its lease receivable and a lessee would increase its accounts payable as receivables/payments accrue. In its income statement, a lessor would continue to recognize revenue during the deferral period. The second method would be to treat the deferred payments as variable lease payments (i.e., revenue recognized when cash received). The Company has elected the first method described above, which results in the revenue being recognized on an accrual basis. If tenants are unable to timely repay deferred rent, or repay at all, request additional rent deferrals or abatements, decide not to renew leases, or renew leases at lower cash leasing spreads, the impact on the Company’s results of operations and financial condition could be material. In the second quarter of 2020, the Company recognized approximately $0.7 million general reserve against the deferred rent balance. Following positive collection trends in the third quarter of 2020, the Company released approximately $0.3 million of the general reserve. As of September 30, 2020, the Company had a remaining general reserve of $0.4 million against an approximate $1.7 million deferred rent balance. Given the daily evolution of the COVID-19 pandemic and the global response to curb its spread, the Company is not able to estimate the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity for the fiscal year 2020. The Company continues to evaluate the impact of various forms of governmental assistance that may be or become available to the Company or its tenants.
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Revenue from contract with customers (topic 606) | Revenue from Contracts with Customers (Topic 606) The Company recognizes certain revenue under the core principle of Topic 606. This requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease revenue is not within the scope of Topic 606. To achieve the core principle, the Company applies the five step model specified in the guidance. Revenue that is accounted for under Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Income in the Other operating line item. This line item includes parking income, rental lease guaranty income, management fee income and other miscellaneous income. Below is a detail of the amounts by category:
The Company’s major types of revenue that are accounted for under Topic 606 that are listed above are all accounted for as the performance obligation is satisfied. The performance obligations that are identified for each of these items are satisfied over time, and the Company recognizes revenue monthly based on this principle.
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Cash, cash equivalents and restricted cash | Cash, Cash Equivalents and Restricted CashCash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. Restricted cash includes cash held in escrow from the sale of a property in Oklahoma. These proceeds have been or will be disbursed as the Company acquires real estate investments in like-kind exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New accounting pronouncements | New Accounting Pronouncements Accounting Standards Update No. 2016-13 In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments." This update is intended to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. This update requires that financial statement assets measured at an amortized cost and certain other financial instruments be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. This standard is effective for annual and interim periods beginning after December 15, 2019 with early adoption permitted. Operating lease receivables, representing the majority of the Company's receivables, are not within the scope of the new standard. The Company adopted this standard as of January 1, 2020. There was not a material impact to the Condensed Consolidated Financial Statements resulting from the adoption of this standard. Accounting Standards Update No. 2017-04 In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." This update eliminates Step 2 of the goodwill impairment test. As such, an entity will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value. This standard is effective for the Company for annual and interim periods beginning after December 15, 2019. The Company adopted this standard as of January 1, 2020. There was not a material impact to the Condensed Consolidated Financial Statements resulting from the adoption of this standard. Accounting Standards Update No. 2020-04 On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has 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 preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
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Summary of Significant Accounting Policies (Tables) |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggreation of revenue | Below is a detail of the amounts by category:
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Cash, cash equivalents and restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company's Condensed Consolidated Balance Sheets to the combined amounts shown on the Company's Condensed Consolidated Statements of Cash Flows:
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Real Estate Investments (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of acquisitions | The following table details the Company's acquisitions for the nine months ended September 30, 2020:
1MOB = medical office building. 2Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition. 3Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition. 4Includes three properties. 5The Company acquired land parcels under four existing buildings (previously ground leased). 6The Company acquired a land parcel under an existing building (previously ground leased). The building and land were sold on September 30, 2020. Subsequent Acquisition On October 7, 2020 the Company acquired a 36,720 square foot medical office building in Colorado Springs, CO for a purchase price of $8.9 million.
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Real estate dispositions | The following table details the Company's dispositions for the nine months ended September 30, 2020:
1.MOB = medical office building; SF = surgical facility 2.Includes straight-line rent receivables, leasing commissions and lease inducements. 3.In the second quarter of 2020, the Company entered into agreements to sell two single-tenant net leased properties, resulting in a lease modification and classification change from operating to sales-type.
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Schedule of assets and liabilities held for sale | The table below reflects the assets and liabilities of the properties classified as held for sale as of September 30, 2020 and December 31, 2019:
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Leases (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Sales-type Leases | The table below presents the components of sale-type leases for the three and nine months ended September 30, 2020:
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Future Minimum Operating Lease Payments Receivable | Future lease payments under the non-cancelable operating leases, excluding any reimbursements, as of September 30, 2020 were as follows:
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Future Minimum Operating Lease Payments | The Company’s future lease payments (primarily for its 61 non-prepaid ground leases) as of September 30, 2020 were as follows:
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Future Minimum Financing Lease Payments | The Company’s future lease payments (primarily for its 61 non-prepaid ground leases) as of September 30, 2020 were as follows:
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Lease Cost | The following table provides details of the Company's total lease expense for the three and nine months ended September 30, 2020 and 2019:
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Notes and Bonds Payable (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | The table below details the Company’s notes and bonds payable.
1The effective interest rate includes the impact of interest rate swaps on $75.0 million at a weighted average rate of 2.37% (plus the applicable margin rate, currently 100 basis points). 2The effective interest rate includes the impact of interest rate swaps on $100.0 million at a weighted average rate of 2.23% (plus the applicable margin rate, currently 160 basis points). 3The effective interest rate includes the impact of the $1.7 million settlement of a forward-starting interest rate swap that is included in Accumulated other comprehensive loss on the Company's Condensed Consolidated Balance Sheets. 4The effective interest rate includes the impact of the $4.3 million settlement of forward interest rate hedges that is included in Accumulated other comprehensive loss on the Company's Condensed Consolidated Balance Sheets.
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Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash flow hedges included in accumulated other comprehensive income (loss) | As of September 30, 2020, the Company had eight outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
The table below presents the effect of cash flow hedge accounting on AOCI during the three and nine months ended September 30, 2020 and 2019 related to the Company's outstanding interest rate swaps.
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Schedule of derivative instruments in statement of financial position, fair value | The table below presents the fair value of the Company's derivative financial instruments, as well as their classification on the Condensed Consolidated Balance Sheet as of September 30, 2020.
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Stockholders' Equity (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of beginning and ending common stock outstanding | The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the nine months ended September 30, 2020 and the year ended December 31, 2019:
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Earnings (loss) per share | The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2020 and 2019.
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Summary of the activity under the incentive plan | A summary of the activity under the Company's share-based incentive plans for the three and nine months ended September 30, 2020 and 2019 is included in the table below.
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Summary of employee stock purchase plan activity | A summary of the activity under the Purchase Plan for the three and nine months ended September 30, 2020 and 2019 is included in the table below.
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Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value and carrying values for notes and bonds payable, mortgage notes receivable, and notes receivable | The table below details the fair values and carrying values for notes and bonds payable at September 30, 2020 and December 31, 2019.
1Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.
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Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Disaggregation of Revenue [Line Items] | ||||
Type of Revenue | $ 1,868 | $ 2,059 | $ 5,364 | $ 5,987 |
Parking income | ||||
Disaggregation of Revenue [Line Items] | ||||
Type of Revenue | 1,764 | 1,935 | 5,042 | 5,538 |
Rental lease guaranty | ||||
Disaggregation of Revenue [Line Items] | ||||
Type of Revenue | 0 | 0 | 0 | 128 |
Management fee income | ||||
Disaggregation of Revenue [Line Items] | ||||
Type of Revenue | 62 | 69 | 209 | 201 |
Miscellaneous | ||||
Disaggregation of Revenue [Line Items] | ||||
Type of Revenue | $ 42 | $ 55 | $ 113 | $ 120 |
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 121,992 | $ 657 | ||
Restricted cash | 60,644 | 0 | ||
Total cash, cash equivalents and restricted cash | $ 182,636 | $ 657 | $ 11,809 | $ 8,381 |
Leases - Lease Income (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||
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May 31, 2020
USD ($)
property
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Sep. 30, 2020
USD ($)
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Jun. 30, 2020
USD ($)
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Sep. 30, 2019
USD ($)
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Sep. 30, 2020
USD ($)
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Sep. 30, 2019
USD ($)
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Leases [Abstract] | ||||||
Rental income | $ 123,384 | $ 117,740 | $ 368,385 | $ 342,787 | ||
Number of properties sold | property | 2 | |||||
Sales price | $ 244,500 | |||||
Gains on sales of investment real estate | $ 68,300 | 70,395 | $ 5,065 | |||
Profit recognized at commencement date | 0 | 68,267 | ||||
Interest income | $ 1,454 | $ 3,007 |
Leases - Lessor Accounting (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Future Operating Lease Payments Receivable [Abstract] | |
2020 | $ 93,722 |
2021 | 352,341 |
2022 | 307,166 |
2023 | 261,187 |
2024 | 200,578 |
2025 and thereafter | 555,264 |
Total | $ 1,770,258 |
Leases - Ground Leases (Details) ft² in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020
USD ($)
Lease
property
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
ft²
Lease
property
|
Sep. 30, 2019
USD ($)
|
|
Lessee, Lease, Description [Line Items] | ||||
Number of properties subject to ground leases | property | 103 | 103 | ||
Square feet subject to ground leases | ft² | 8.7 | |||
Number of prepaid ground leases | 42 | |||
Amortization of prepaid rent | $ | $ 0.2 | $ 0.2 | $ 0.5 | $ 0.4 |
Number of non-prepaid ground leases | 61 | 61 | ||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Ground lease, initial term | 40 years | 40 years | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Ground lease, initial term | 99 years | 99 years |
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
OPERATING | ||
2020 | $ 1,008 | |
2021 | 4,844 | |
2022 | 4,875 | |
2023 | 4,913 | |
2024 | 4,969 | |
2025 and thereafter | 307,665 | |
Total undiscounted lease payments | 328,274 | |
Discount | (236,808) | |
Lease liabilities | 91,466 | $ 91,574 |
FINANCING | ||
2020 | 143 | |
2021 | 930 | |
2022 | 783 | |
2023 | 793 | |
2024 | 815 | |
2025 and thereafter | 88,808 | |
Total undiscounted lease payments | 92,272 | |
Discount | (73,575) | |
Lease liabilities | $ 18,697 | $ 18,037 |
Derivative Financial Instruments - Fair Value of Derivative Instruments on the Balance Sheet (Details) - Designated as hedging instrument - Settled interest rate swaps $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Derivative [Line Items] | |
Liability derivatives | $ 14,460 |
Other liabilities | |
Derivative [Line Items] | |
Liability derivatives | $ 14,460 |
Commitments and Contingencies - Construction Activity (Details) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020
USD ($)
ft²
|
Mar. 31, 2020
ft²
|
|
Other Commitments [Line Items] | ||
Approximate square feet | ft² | 15,500,000 | |
Medical office building expansion | Memphis, Tennessee | ||
Other Commitments [Line Items] | ||
Approximate square feet | ft² | 110,883 | |
Construction activity, total funding during the period, excluding purchase of land and building | $ 5,700 | |
Medical office building | Washington | ||
Other Commitments [Line Items] | ||
Approximate square feet | ft² | 151,031 | |
Total amount funded | 59,100 | |
Estimated amount to complete project | 5,000 | |
Land and building | Medical office building | Memphis, Tennessee | ||
Other Commitments [Line Items] | ||
Construction activity, total funding during the period | $ 8,700 |
Stockholders' Equity - Reconciliation of beginning and ending common stock outstanding (Details) - shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Reconciliation of the beginning and ending common stock outstanding | ||
Balance, beginning of period | 134,706,000 | |
Balance, end of period | 136,054,000 | 134,706,000 |
Common Stock | ||
Reconciliation of the beginning and ending common stock outstanding | ||
Balance, beginning of period | 134,706,154 | 125,279,455 |
Issuance of common stock | 1,292,324 | 9,251,440 |
Nonvested share-based awards, net of withheld shares | 55,462 | 175,259 |
Balance, end of period | 136,053,940 | 134,706,154 |
Stockholders' Equity - Computation of basic and diluted earnings (loss) per common share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Weighted average Common Shares outstanding | ||||
Weighted average common shares outstanding (in shares) | 136,048,781 | 129,865,985 | 135,393,798 | 128,348,638 |
Non-vested shares | (1,739,364) | (1,775,911) | (1,731,658) | (1,777,743) |
Weighted average common shares outstanding - basic (in shares) | 134,309,417 | 128,090,074 | 133,662,140 | 126,570,895 |
Dilutive effect of forward equity shares (in shares) | 0 | 0 | 0 | 0 |
Dilutive effect of employee stock purchase plan (in shares) | 47,810 | 78,610 | 74,029 | 85,690 |
Weighted average common shares outstanding - diluted (in shares) | 134,357,227 | 128,168,684 | 133,736,169 | 126,656,585 |
Net Income | $ 8,230 | $ 2,601 | $ 88,058 | $ 11,975 |
Dividends paid on nonvested share-based awards | (522) | (534) | (1,561) | (1,603) |
Net income applicable to common stockholders | $ 7,708 | $ 2,067 | $ 86,497 | $ 10,372 |
Basic earnings per common share (in dollars per share) | $ 0.06 | $ 0.02 | $ 0.65 | $ 0.08 |
Diluted earnings per common share (in dollars per share) | $ 0.06 | $ 0.02 | $ 0.65 | $ 0.08 |
Stockholders' Equity - Summary of activity under stock-based incentive plans (Details) - Stock incentive plan - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Summary of the activity under the incentive plans | ||||
Share-based awards, beginning of period | 1,739,258 | 1,778,134 | 1,754,066 | 1,769,863 |
Granted (shares) | 188 | 0 | 79,025 | 89,767 |
Vested (shares) | 0 | 204,548 | 93,645 | 286,044 |
Share-based awards, end of period | 1,739,446 | 1,573,586 | 1,739,446 | 1,573,586 |
Executive Chairman | ||||
Summary of the activity under the incentive plans | ||||
Vested (shares) | 204,548 | |||
Restricted stock | ||||
Summary of the activity under the incentive plans | ||||
Shares withheld to pay estimated withholding taxes | 23,563 | 100,036 |
Stockholders' Equity - Summary of activity under Employee Stock Purchase Plan (Details) - Employee stock purchase plan - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Summary of the Employee Stock Purchase Plan activity | ||||
Outstanding and exercisable, beginning of period (in shares) | 361,719 | 363,218 | 332,659 | 328,533 |
Granted (in shares) | 0 | 0 | 212,716 | 235,572 |
Exercised (in shares) | (3,504) | (9,927) | (17,871) | (28,943) |
Forfeited (in shares) | (6,659) | (11,762) | (36,154) | (51,559) |
Expired (in shares) | 0 | 0 | (139,794) | (142,074) |
Outstanding and exercisable, end of period (in shares) | 351,556 | 341,529 | 351,556 | 341,529 |
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
CARRYING VALUE | ||
Derivative [Line Items] | ||
Notes and bonds payable | $ 1,554.4 | $ 1,414.1 |
FAIR VALUE | ||
Derivative [Line Items] | ||
Notes and bonds payable | $ 1,621.7 | $ 1,425.8 |
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