10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended:	March 31, 2021
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

Commission File Number: 001-11852

HEALTHCARE REALTY TRUST INCORPORATED

(Exact name of Registrant as specified in its charter) 

Maryland	62-1507028
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

3310 West End Avenue, Suite 700

Nashville, Tennessee 37203

(Address of principal executive offices)

(615) 269-8175

(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, $0.01 par value per share	HR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

    Large accelerated filer ☒        Accelerated filer ☐        

    Non-accelerated filer ☐        Smaller reporting company ☐

            Emerging growth company ☐

    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

    complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of April 30, 2021, the Registrant had 141,660,077 shares of Common Stock outstanding.

HEALTHCARE REALTY TRUST INCORPORATED

FORM 10-Q

March 31, 2021

    Table of Contents

PART I - FINANCIAL INFORMATION
Item 1	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to the Condensed Consolidated Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures about Market Risk	25
Item 4	Controls and Procedures	26
PART II - OTHER INFORMATION
Item 1	Legal Proceedings	26
Item 1A	Risk Factors	26
Item 2	Unregistered Sales of Equity and Use of Proceeds	26
Item 6	Exhibits	27
SIGNATURE		28

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Healthcare Realty Trust Incorporated

Condensed Consolidated Balance Sheets

Amounts in thousands, except per share data

ASSETS
	Unaudited MARCH 31, 2021		DECEMBER 31, 2020
Real estate properties
Land	$	369,202	$	362,695
Buildings, improvements and lease intangibles	4,201,251		4,220,297
Personal property	11,370		11,195
Land held for development	27,226		27,226
Total real estate properties	4,609,049		4,621,413
Less accumulated depreciation and amortization	(1,238,044)		(1,239,224)
Total real estate properties, net	3,371,005		3,382,189
Cash and cash equivalents	12,087		15,303
Assets held for sale, net	64,578		20,646
Operating lease right-of-use assets	120,890		125,198
Financing lease right-of-use assets	19,559		19,667
Investments in unconsolidated joint ventures	83,943		73,137
Other assets, net	182,043		176,120
Total assets	$	3,854,105	$	3,812,260
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Notes and bonds payable	$	1,609,251	$	1,602,769
Accounts payable and accrued liabilities	66,407		81,174
Liabilities of assets held for sale	1,342		1,216
Operating lease liabilities	91,921		92,273
Financing lease liabilities	18,722		18,837
Other liabilities	68,353		67,615
Total liabilities	1,855,996		1,863,884
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value per share; 50,000 shares authorized; none issued and outstanding	—		—
Common stock, $.01 par value per share; 300,000 shares authorized; 141,660 and 139,487 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	1,417		1,395
Additional paid-in capital	3,699,867		3,635,341
Accumulated other comprehensive loss	(13,887)		(17,832)
Cumulative net income attributable to common stockholders	1,223,521		1,199,499
Cumulative dividends	(2,912,809)		(2,870,027)
Total stockholders' equity	1,998,109		1,948,376
Total liabilities and stockholders' equity	$	3,854,105	$	3,812,260

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, are an integral part of these financial statements.

1

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Income

For the Three Months Ended March 31, 2021 and 2020

Amounts in thousands, except per share data

Unaudited

	THREE MONTHS ENDED March 31,
	2021		2020
Revenues
Rental income	$	128,389	$	122,644
Other operating	1,950		2,163
	130,339		124,807
Expenses
Property operating	52,215		49,552
General and administrative	8,499		8,766
Acquisition and pursuit costs	744		750
Depreciation and amortization	50,079		47,497
	111,537		106,565
Other Income (Expense)
Gain (loss) on sales of real estate properties	18,890		(49)
Interest expense	(13,262)		(13,960)
Impairment of real estate properties	(834)		—
Equity loss from unconsolidated joint ventures	(74)		(11)
Interest and other income (expense), net	500		93
	5,220		(13,927)
Net Income	$	24,022	$	4,315
Basic earnings per common share	$	0.17	$	0.03
Diluted earnings per common share	$	0.17	$	0.03
Weighted average common shares outstanding - basic	138,774		133,036
Weighted average common shares outstanding - diluted	138,871		133,150

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, are an integral part of these financial statements.

2

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Comprehensive Income (Loss)

For the Three Months Ended March 31, 2021 and 2020

Amounts in thousands

Unaudited

	THREE MONTHS ENDED  March 31,
	2021		2020
Net income	$	24,022	$	4,315
Other comprehensive income (loss)
Interest rate swaps
Reclassification adjustments for losses included in net income (interest expense)	1,095		328
Gains (losses) arising during the period on interest rate swaps	2,850		(9,663)
Losses on settlement of treasury rate locks arising during the period	—		(4,267)
	3,945		(13,602)
Comprehensive income (loss)	$	27,967	$	(9,287)

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, are an integral part of these financial statements.

3

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Equity

For the Three Months Ended March 31, 2021 and 2020

Amounts in thousands, except per share data

Unaudited

	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Cumulative Net Income		Cumulative Dividends		Total Stockholders’ Equity
Balance at December 31, 2020	$	1,395	$	3,635,341	$	(17,832)	$	1,199,499	$	(2,870,027)	$	1,948,376
Issuance of common stock, net of issuance costs	21		63,064		—		—		—		63,085
Common stock redemptions	(1)		(1,555)		—		—		—		(1,556)
Share-based compensation	2		3,017		—		—		—		3,019
Net income	—		—		—		24,022		—		24,022
Reclassification adjustments for losses included in net income (interest expense)	—		—		1,095		—		—		1,095
Gains arising during the period on interest rate swaps and treasury rate locks	—		—		2,850		—		—		2,850
Dividends to common stockholders ($0.3025 per share)	—		—		—		—		(42,782)		(42,782)
Balance at March 31, 2021	$	1,417	$	3,699,867	$	(13,887)	$	1,223,521	$	(2,912,809)	$	1,998,109
	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Cumulative Net Income		Cumulative Dividends		Total Stockholders’ Equity
Balance at December 31, 2019	$	1,347	$	3,485,003	$	(6,175)	$	1,127,304	$	(2,707,470)	$	1,900,009
Issuance of common stock, net of issuance costs	2		7,319		—		—		—		7,321
Common stock redemptions	—		(798)		—		—		—		(798)
Share-based compensation	—		2,599		—		—		—		2,599
Net income	—		—		—		4,315		—		4,315
Reclassification adjustments for losses included in net income (interest expense)	—		—		328		—		—		328
Losses arising during the period on interest rate swaps	—		—		(13,930)		—		—		(13,930)
Dividends to common stockholders ($0.3000 per share)	—		—		—		—		(40,416)		(40,416)
Balance at March 31, 2020	$	1,349	$	3,494,123	$	(19,777)	$	1,131,619	$	(2,747,886)	$	1,859,428

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, are an integral part of these financial statements.

4

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2021 and 2020

Amounts in thousands

Unaudited

OPERATING ACTIVITIES
	THREE MONTHS ENDED  March 31,
	2021		2020
Net income	$	24,022	$	4,315
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	50,079		47,497
Other amortization	822		1,491
Share-based compensation	3,019		2,599
Amortization of straight-line rent receivable (lessor)	(1,461)		(1,043)
Amortization of straight-line rent on operating leases (lessee)	367		375
(Gain) loss on sales of real estate properties	(18,890)		49
Impairment of real estate properties	834		—
Equity loss from unconsolidated joint ventures	74		11
Distributions from unconsolidated joint ventures	—		118
Changes in operating assets and liabilities:
Other assets, including right-of-use-assets	(3,467)		(4,032)
Accounts payable and accrued liabilities	(17,181)		(10,005)
Other liabilities	4,278		(2,931)
Net cash provided by operating activities	42,496		38,444
INVESTING ACTIVITIES
Acquisitions of real estate	(64,275)		(83,580)
Development of real estate	(184)		(2,451)
Additional long-lived assets	(19,937)		(22,164)
Investments in unconsolidated joint ventures	(10,880)		—
Proceeds from sales of real estate properties	25,445		—
Net cash used in investing activities	(69,831)		(108,195)
FINANCING ACTIVITIES
Net borrowings (repayments) on unsecured credit facility	7,000		(78,000)
Borrowings on term loan	—		298,995
Repayments of notes and bonds payable	(946)		(7,202)
Dividends paid	(42,782)		(40,416)
Net proceeds from issuance of common stock	63,195		7,213
Common stock redemptions	(1,959)		(892)
Settlement of treasury rate locks	—		(4,267)
Debt issuance and assumption costs	(27)		(2,646)
Payments made on finance leases	(362)		(321)
Net cash provided by financing activities	24,119		172,464
Decrease (increase) in cash and cash equivalents	(3,216)		102,713
Cash and cash equivalents at beginning of period	15,303		657
Cash and cash equivalents at end of period	$	12,087	$	103,370
Supplemental Cash Flow Information
Interest paid	$	15,779	$	11,428
Invoices accrued for construction, tenant improvements and other capitalized costs	$	17,805	$	12,830
Mortgage notes payable assumed upon acquisition (adjusted to fair value)	$	—	$	19,269
Capitalized interest	$	118	$	421

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, are an integral part of these financial statements.

5

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. 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 March 31, 2021, the Company had gross investments of approximately $4.6 billion in 223 real estate properties located in 24 states totaling approximately 16.1 million square feet. The Company provided leasing and property management services to approximately 13.1 million square feet nationwide. The Company owns 50% of an unconsolidated joint venture with Teachers Insurance and Annuity Association ("TIAA Joint Venture") and earns certain fees as the managing member. As of March 31, 2021, the TIAA Joint Venture owned five buildings. See Note 2 for more details regarding the Company's unconsolidated joint ventures.

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, 2020. 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, 2020. 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, 2021 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.

Principles of Consolidation

The Company’s Condensed Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiaries, and joint ventures and partnerships where the Company controls the operating activities. GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). Accounting Standards Codification 810 broadly defines a VIE as an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary. The Company performs this analysis on an ongoing basis.

For property holding entities not determined to be VIEs, the Company consolidates such entities in which it owns 100% of the equity or has a controlling financial interest evidenced by ownership of a majority voting interest. All intercompany balances and transactions are eliminated in consolidation. For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements.

As of March 31, 2021, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company exercised significant influence over but did not control these entities. See Note 2 for more details regarding the Company's unconsolidated joint ventures.

6

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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 March 31, 2021. 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.

Revenue from Contracts with Customers (Topic 606)

The Company recognizes certain revenue under the core principle of Topic 606. This topic 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, management fee income and other miscellaneous income. Below is a detail of the amounts by category:

	THREE MONTHS ENDED March 31,
in thousands	2021		2020
Type of Revenue
Parking income	$	1,658	$	2,051
Management fee income	239		78
Miscellaneous	53		34
	$	1,950	$	2,163

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.

New Accounting Pronouncements

Accounting Standards Update No. 2020-04

On March 12, 2020, the Financial Accounting Standards Board ("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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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Note 2. Real Estate Investments

2021 Company Acquisitions

The following table details the Company's acquisitions for the three months ended March 31, 2021:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		CASH CONSIDERATION 2		REAL ESTATE		OTHER 3		SQUARE FOOTAGE
San Diego, CA	MOB	1/7/21	$	17,150	$	17,182	$	17,182	$	—	22,461
Dallas, TX 4	MOB	2/1/21	22,515		22,299		22,641		(342)		121,709
Atlanta, GA 4	MOB	2/17/21	9,800		10,027		10,073		(46)		44,567
Washington, D.C.	MOB	3/3/21	12,750		12,709		12,658		51		26,496
Total real estate acquisitions			$	62,215	$	62,217	$	62,554	$	(337)	215,233

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 two properties.

Unconsolidated Joint Venture Acquisitions

The TIAA Joint Venture is not consolidated for purposes of the Company's Condensed Consolidated Financial Statements. The following table details the TIAA Joint Venture acquisition for the three months ended March 31, 2021:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		CASH CONSIDERATION 2		REAL ESTATE		OTHER 3		SQUARE FOOTAGE	OWNERSHIP %
Denver, CO	MOB	3/30/21	$	14,375	$	14,056	$	14,550	$	(494)	59,359	50	%

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.

Subsequent to March 31, 2021, the TIAA Joint Venture acquired the following properties:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		SQUARE FOOTAGE	OWNERSHIP %
Colorado Springs, CO	MOB	4/1/21	$	7,200	27,510	50	%
Los Angeles, CA	MOB	4/8/21	31,335		57,573	50	%
San Antonio, TX	MOB	4/30/21	13,600		45,000	50	%
			$	52,135	130,083

1MOB = medical office building.

Unconsolidated Joint Ventures

The Company's investment in and loss recognized for the three months ended March 31, 2021 and 2020 related to its joint ventures accounted for under the equity method are shown in the table below:

	THREE MONTHS ENDED March 31,
Dollars in thousands	2021		2020
Investments in unconsolidated joint ventures, beginning of period 1	$	73,137	$	8,130
New investments during the period	10,880		—
Equity loss recognized during the period 1	(74)		(11)
Owner distributions	—		(119)
Investments in unconsolidated joint ventures, end of period 1	$	83,943	$	8,000

1In addition to the TIAA Joint Venture, the Company also has a 55% and 27% ownership interest in two limited liability companies that each own a parking garage in Atlanta, Georgia.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

2021 Real Estate Asset Dispositions

The following table details the Company's dispositions for the three months ended March 31, 2021:

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)
Los Angeles, CA 3	MOB	3/11/21	$	26,000	$	(555)	$	25,445	$	6,046	$	509	$	18,890	73,906

1MOB = medical office building

2Includes straight-line rent receivables, leasing commissions and lease inducements.

3Includes two properties sold to a single purchaser in two transactions which occurred on March 5 and March 11, 2021.

Subsequent Disposition

On April 12, 2021, the Company disposed of a 19,732 square foot single-tenant net leased medical office building located in Atlanta, GA. The sales price was $8.1 million and the Company's net investment in the building as of March 31, 2021 was approximately $5.7 million.

Assets Held for Sale

As of March 31, 2021 and December 31, 2020, the Company had nine and four properties, respectively, classified as assets held for sale. The following properties were reclassified to held for sale during the first quarter of 2021:

•a medical office building in Atlanta, GA with a contractual sales price of $8.1 million. The sales price is greater than the current net investment of approximately $5.7 million. The Company disposed of this property on April 12, 2021.

•three medical office buildings in Gadsden, AL with a contractual sales price of $5.5 million. An impairment charge of $0.8 million was recorded based on the contractual sales price less estimated costs to sell.

•a medical office building in Richmond, VA with a contractual sales price of $52.0 million. The contractual sales price is greater than the current net investment of approximately $29.4 million.

The table below reflects the assets and liabilities of the properties classified as held for sale as of March 31, 2021 and December 31, 2020:

(Dollars in thousands)	March 31, 2021		December 31, 2020
Balance Sheet data:
Land	$	3,148	$	1,664
Building, improvements and lease intangibles	96,013		27,443
Personal property	56		39
	99,217		29,146
Accumulated depreciation	(40,381)		(10,455)
Real estate assets held for sale, net	58,836		18,691
Operating lease right-of-use assets	3,241		—
Other assets, net	2,501		1,955
Assets held for sale, net	$	64,578	$	20,646
Accounts payable and accrued liabilities	$	588	$	533
Other liabilities	754		683
Liabilities of assets held for sale	$	1,342	$	1,216

Note 3. Leases

Lessor Accounting

The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2040. 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.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The Company's leases typically have escalators that are either based on a stated percentage or an index such as consumer price index ("CPI"). 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 months ended March 31, 2021 was $128.4 million.

Future lease payments under the non-cancelable operating leases, excluding any reimbursements, as of March 31, 2021 were as follows:

In thousands	Operating
2021	$	286,175
2022	345,229
2023	298,828
2024	233,601
2025	183,405
2026 and thereafter	459,569
	$	1,806,807

Lessee Accounting

As of March 31, 2021, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of March 31, 2021, the Company had 104 properties, excluding one property classified as held for sale, totaling 8.6 million square feet that were held under ground leases. Some of the ground lease 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 CPI. The Company had 42 prepaid ground leases, excluding one property classified as held for sale, as of March 31, 2021. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.1 million and $0.2 million of the Company’s rental expense for the three months ended March 31, 2021 and 2020, respectively.

The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of March 31, 2021 were as follows:

In thousands	OPERATING		FINANCING
2021	$	3,164	$	611
2022	4,932		783
2023	4,971		793
2024	5,027		815
2025	5,068		826
2026 and thereafter	303,574		87,983
Total undiscounted lease payments	326,736		91,811
Discount	(234,815)		(73,089)
Lease liabilities	$	91,921	$	18,722

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The following table provides details of the Company's total lease expense for the three months ended March 31, 2021 and 2020:

	THREE MONTHS ENDED March 31,
In thousands	2021			2020
Operating lease cost
Operating lease expense	$	1,178		$	1,174
Variable lease expense	896			800
Finance lease cost
Amortization of right-of-use assets	88			70
Interest on lease liabilities	247			237
Total lease expense	$	2,409		$	2,281
Other information
Operating cash flows outflows related to operating leases	$	1,844		$	2,550
Financing cash flows outflows related to financing leases	$	362		$	321
Weighted-average remaining lease term (excluding renewal options) - operating leases	48.4			49.4
Weighted-average remaining lease term (excluding renewal options) -finance leases	64.2			64.9
Weighted-average discount rate - operating leases	5.7		%	5.7		%
Weighted-average discount rate - finance leases	5.4		%	5.4		%

Note 4. Notes and Bonds Payable

The table below details the Company’s notes and bonds payable. 

	MATURITY DATES	BALANCE AS OF				EFFECTIVE INTEREST RATE as of 3/31/2021
Dollars in thousands		3/31/2021		12/31/2020
$700 million Unsecured Credit Facility	5/23	$	7,000	$	—	1.01	%
$200 million Unsecured Term Loan Facility, net of issuance costs 1	5/24	199,292		199,236		1.96	%
$150 million Unsecured Term Loan due 2026 2	6/26	149,503		149,479		3.13	%
Senior Notes due 2025, net of discount and issuance costs 3	5/25	248,841		248,776		4.08	%
Senior Notes due 2028, net of discount and issuance costs	1/28	296,243		296,123		3.84	%
Senior Notes due 2030, net of discount and issuance costs 4	3/30	296,554		296,468		2.71	%
Senior Notes due 2031, net of discount and issuance costs	3/31	295,037		294,924		2.24	%
Mortgage notes payable, net of discounts and issuance costs and including premiums	11/22-4/27	116,781		117,763		4.07	%
		$	1,609,251	$	1,602,769

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 forward-starting interest rate swaps 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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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Note 5. 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.

As of March 31, 2021, the Company had eight outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

DERIVATIVE INSTRUMENT	NUMBER OF INSTRUMENTS	NOTIONAL AMOUNT in millions
Interest rate swaps	8	$175.0

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 March 31, 2021.

	BALANCE AT MARCH 31, 2021
In thousands	BALANCE SHEET LOCATION	FAIR VALUE
Derivatives designated as hedging instruments
Interest rate swaps	Other liabilities	$	9,378
Total derivatives designated as hedging instruments		$	9,378

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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 months ended March 31, 2021 and 2020 related to the Company's outstanding interest rate swaps.

	(GAIN) LOSS RECOGNIZED IN AOCI ON DERIVATIVE three months ended March 31,					LOSS RECLASSIFIED FROM AOCI INTO INCOME three months ended March 31,
In thousands	2021		2020			2021		2020
Interest rate swaps	$	(2,850)	$	9,663	Interest expense	$	946	$	271
Settled treasury hedges	—		4,267		Interest expense	107		15
Settled interest rate swaps	—		—		Interest expense	42		42
	$	(2,850)	$	13,930	Total interest expense	$	1,095	$	328

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 March 31, 2021, 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 $9.8 million. As of March 31, 2021, the Company has not posted any collateral related to these agreements and was not in breach of any agreement.

Note 6. 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 continued the redevelopment of a 217,114 square foot medical office building in Dallas, Texas. As of March 31, 2021, the Company funded approximately $0.4 million in project costs. The building continues to operate with in-place leases during construction. The first new tenant lease of the redevelopment is expected to commence in the first quarter of 2022.

The Company continued the redevelopment of a 110,883 square foot medical office building in Memphis, Tennessee. As of March 31, 2021, the Company funded approximately $27.1 million in project costs. The core and shell portion of this redevelopment was completed and the first new tenant took occupancy in the first quarter of 2021, with the construction of tenant spaces to be completed throughout the remainder of 2021.

In April 2021, the Company began the redevelopment of a medical office building in Tacoma, Washington. The redevelopment includes interior and exterior improvements to the existing building, plus the addition of 23,000 square feet. The Company expects the tenant lease to commence in the second quarter of 2022.

Note 7. Stockholders' Equity

Common Stock    

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the three months ended March 31, 2021 and the year ended December 31, 2020:

	MARCH 31, 2021	DECEMBER 31, 2020
Balance, beginning of period	139,487,375	134,706,154
Issuance of common stock	2,057,157	4,637,445
Nonvested share-based awards, net of withheld shares	115,483	143,776
Balance, end of period	141,660,015	139,487,375

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

At-The-Market Equity Offering Program

The Company has in place an at-the-market equity offering program to sell up to an aggregate of $500.0 million of the Company’s common stock from time to time. The following table details the Company's at-the-market activity, including forward transactions:

	WEIGHTED AVERAGE SALE PRICE per share		SHARES PRICED	SHARES SETTLED	SHARES REMAINING TO BE SETTLED	NET PROCEEDS in millions
Balance, beginning of period	$	—	—	—	1,823,259	$	—
1Q 2021	$	30.09	215,532	2,038,791	—	$	62.7
April 2021	$	30.81	4,133,619	—	4,133,619	$	—

The 4.1 million shares remaining are expected to be settled by April 2022, and the Company expects net proceeds ranging from $120.9 million to $125.5 million, depending on the timing of settlement. Expected net proceeds are calculated by reducing the initial price by adjustments provided in the forward equity arrangements. After accounting for these settlements, the Company has approximately $163.6 million remaining available to be sold under the current sales agreements at the date of this filing.

Common Stock Dividends

During the three months ended March 31, 2021, the Company declared and paid common stock dividends totaling $0.3025 per share. On May 4, 2021, the Company declared a quarterly common stock dividend in the amount of $0.3025 per share payable on May 28, 2021 to stockholders of record on May 17, 2021.

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 three months ended March 31, 2021, the Company did not enter into any forward sale agreements to sell 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 months ended March 31, 2021 did not include the effect from any assumed issuance of 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, adjusted for costs to borrow. For the three months ended March 31, 2021, no weighted-average incremental shares of common stock were excluded from the computation of weighted-average common shares outstanding - diluted.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2021 and 2020.

	THREE MONTHS ENDED MARCH 31,
Dollars in thousands, except per share data	2021		2020
Weighted average common shares outstanding
Weighted average common shares outstanding	140,567,352		134,758,335
Non-vested shares	(1,793,598)		(1,722,090)
Weighted average common shares outstanding - basic	138,773,754		133,036,245
Weighted average common shares outstanding - basic	138,773,754		133,036,245
Dilutive effect of forward equity shares	—		—
Dilutive effect of employee stock purchase plan	97,064		113,321
Weighted average common shares outstanding - diluted	138,870,818		133,149,566
Net Income	$	24,022	$	4,315
Dividends paid on nonvested share-based awards	(540)		(517)
Net income applicable to common stockholders	$	23,482	$	3,798
Basic earnings per common share - net income	$	0.17	$	0.03
Diluted earnings per common share - net income	$	0.17	$	0.03

Incentive Plans

During the three months ended March 31, 2021, the Company made the following stock awards:

•On January 1, 2021, the Company granted non-vested stock awards to certain officers with a grant date fair value of $0.6 million which consisted of an aggregate 21,396 shares through its salary deferral program.

•On February 10, 2021, the Company granted non-vested stock awards to its four named executive officers, five senior vice presidents, and five first vice presidents with a grant date fair value totaling $3.8 million, which consisted of an aggregate 124,648 non-vested shares, with a five-year vesting period.

•Also, on February 10, 2021, the Company granted a performance-based award to officers, excluding the four named executive officers, five senior vice presidents, and five first vice presidents, under the Long-term Incentive Program totaling $0.6 million, which consisted of an aggregate 19,679 non-vested shares.

A summary of the activity under the Company's share-based incentive plans for the three months ended March 31, 2021 and 2020 is included in the table below.

	THREE MONTHS ENDED MARCH 31,
	2021	2020
Share-based awards, beginning of period	1,766,061	1,754,066
Granted	165,723	39,344
Vested	(145,413)	(68,649)
Share-based awards, end of period	1,786,371	1,724,761

During the three months ended March 31, 2021 and 2020, the Company withheld 50,240 and 23,563 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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 months ended March 31, 2021 and 2020 is included in the table below.

	THREE MONTHS ENDED MARCH 31,
	2021	2020
Outstanding and exercisable, beginning of period	341,647	332,659
Granted	253,200	212,716
Exercised	(15,965)	(11,904)
Forfeited	(19,161)	(22,981)
Expired	(144,422)	(139,794)
Outstanding and exercisable, end of period	415,299	370,696

Note 8. 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 March 31, 2021 and December 31, 2020.

	March 31, 2021				December 31, 2020
Dollars in millions	CARRYING VALUE		FAIR VALUE		CARRYING VALUE		FAIR VALUE
Notes and bonds payable 1	$	1,609.3	$	1,581.9	$	1,602.8	$	1,645.4

1Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.

16

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

Disclosure Regarding Forward-Looking Statements

This report and other materials the Company has filed or may file with the Securities and Exchange Commission, as well as information included in oral statements or other written statements made, or to be made, by management of the Company, contain, or will contain, disclosures that are “forward-looking statements.” Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “target,” “intend,” “plan,” “estimate,” “project,” “continue,” “should,” “could," "budget" and other comparable terms. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of risks and uncertainties, including the duration and scope of the COVID-19 pandemic; the impact of the COVID-19 pandemic on occupancy rates for the Company's properties, actions governments take in response to the COVID-19 pandemic, including the introduction of public health measures and other regulations affecting the Company’s properties and the operations of the Company and its tenants; the effects of health and safety measures adopted by the Company and its tenants related to the COVID-19 pandemic; the impact of the COVID-19 pandemic on the operations, business and financial condition of the Company and its tenants; general economic uncertainty in key markets as a result of the COVID-19 pandemic and a worsening of global economic conditions or low levels of economic growth; the status of capital markets, including availability and cost of capital; and the risks described in this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, that could significantly affect the Company’s current plans and expectations and future financial condition and results.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Stockholders and investors are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in the Company’s filings and reports, including, without limitation, estimates and projections regarding the performance of development projects the Company is pursuing.

For a detailed discussion of the Company’s risk factors, please refer to the Company’s filings with the Securities and Exchange Commission, including this report and its Annual Report on Form 10-K for the year ended December 31, 2020.

Liquidity and Capital Resources

Sources and Uses of Cash

The Company’s primary sources of cash include rent receipts from its real estate portfolio based on contractual arrangements with its tenants, borrowings under the Company's Amended and Restated Credit Agreement, dated as of May 31, 2019, as amended (the "Unsecured Credit Facility") and the Amended and Restated Term Loan Agreement, dated as of May 31, 2019, as amended (the "Unsecured Term Loan due 2024" and "Unsecured Term Loan due 2026"), proceeds from the sales of real estate properties, joint ventures, and proceeds from public or private debt or equity offerings. As of March 31, 2021, the Company had $693.0 million available to be drawn on its Unsecured Credit Facility and $12.1 million in cash. In addition, the Company has entered into forward equity agreements that have expected net proceeds of up to approximately $125.5 million, depending on the timing of settlement which is at the Company's election anytime through April 2022.

The Company expects to continue to meet its liquidity needs, including funding additional investments, paying dividends, and funding debt service, through cash flows from operations and the cash flow sources described above. The Company had unencumbered real estate assets with a gross book value of approximately $4.4 billion at March 31, 2021, of which a portion could serve as collateral for secured mortgage financing. The Company believes that its liquidity and sources of capital are adequate to satisfy its cash requirements. The Company cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to the Company in sufficient amounts to meet its liquidity needs.

Dividends paid by the Company for the three months ended March 31, 2021 were funded from cash flows from operations and the Unsecured Credit Facility, as cash flows from operations were not adequate to fully fund dividends paid at the rate per quarter of $0.3025 per common share. The Company expects that additional cash flows from existing properties, acquisitions and developments will generate sufficient cash flows from operations such that dividends for the full year 2021 can be funded by cash flows from operations or other sources of liquidity described above.

17

Investing Activities

Cash flows used in investing activities for the three months ended March 31, 2021 were approximately $69.8 million. Below is a summary of significant investing activities.

2021 Company Acquisitions

The following table details the Company's acquisitions for the three months ended March 31, 2021:

Dollars in thousands	ASSOCIATED HEALTH SYSTEM/TENANCY 1	DATE ACQUIRED	PURCHASE PRICE		SQUARE FOOTAGE	MILES TO CAMPUS
San Diego, CA	Scripps Health/UCSD	1/7/21	$	17,150	22,461	0.02
Dallas, TX 2	Baylor Scott & White Health	2/1/21	22,515		121,709	0.00
Atlanta, GA 2	Wellstar Health System	2/17/21	9,800		44,567	0.19
Washington, D.C.	Sentara Healthcare	3/3/21	12,750		26,496	0.09
Total real estate acquisitions			$	62,215	215,233

1Includes buildings located on-campus, adjacent and off-campus that are anchored by healthcare systems or located within two miles of a hospital campus.

2Includes two properties.

Unconsolidated Joint Venture Acquisitions

The following table details the TIAA Joint Venture's acquisition for the three months ended March 31, 2021:

Dollars in thousands	ASSOCIATED HEALTH SYSTEM/TENANCY 1	DATE ACQUIRED	PURCHASE PRICE		SQUARE FOOTAGE	MILES TO CAMPUS	OWNERSHIP %
Denver, CO	HCA	3/30/21	$	14,375	59,359	0.60	50	%

1Includes buildings located on-campus, adjacent and off-campus that are anchored by healthcare systems or located within 2 miles of a hospital campus.

Subsequent to March 31, 2021, the TIAA Joint Venture acquired the following properties:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		SQUARE FOOTAGE	OWNERSHIP %
Colorado Springs, CO	MOB	4/1/21	$	7,200	27,510	50	%
Los Angeles, CA	MOB	4/8/21	31,335		57,573	50	%
San Antonio, TX	MOB	4/30/21	13,600		45,000	50	%
			$	52,135	130,083

2021 Dispositions

The Company disposed of two properties during the three months ended March 31, 2021 for a total sales price of $26.0 million, including cash proceeds of $25.4 million. In addition, the Company sold one property subsequent to the end of the quarter. The following table details these dispositions for the three months ended March 31, 2021:

Dollars in thousands	Date Disposed	Sales Price		Square Footage	1Q 2021 NOI		Property Type 1
Los Angeles, CA 2	3/11/21	$	26,000	73,906	$	(15)	MOB

1MOB = Medical office building

2Includes two properties sold to a single purchaser in two transactions which occurred on March 5 and March 11, 2021.

Subsequent Dispositions

On April 12, 2021 the Company disposed of a 19,732 square foot medical office building located in Atlanta, GA. The purchase price was $8.1 million and the Company's net investment in the building as of March 31, 2021 was approximately $5.7 million.

18

Capital Funding

During the three months ended March 31, 2021, the Company funded the following:

•$9.3 million toward development and redevelopment of properties;

•$3.8 million toward first generation tenant improvements and planned capital expenditures for acquisitions;

•$5.2 million toward second generation tenant improvements; and

•$2.0 million toward capital expenditures.

Financing Activities

Cash flows provided by financing activities for the three months ended March 31, 2021 were approximately $24.1 million. Inflows from equity related to the Company's common stock issuances and net borrowings totaled $69.2 million, net of issuance costs incurred. Aggregate cash outflows totaled approximately $45.1 million primarily associated with dividends paid to common stockholders. See Notes 4 and 7 to the Condensed Consolidated Financial Statements for more information about capital markets and financing activities.

Common Stock Issuances

At-The-Market Equity Offering Program

The Company has in place an at-the-market equity offering program to sell up to an aggregate of $500.0 million of the Company’s common stock from time to time. The following table details the Company's at-the-market activity, including forward transactions:

	WEIGHTED AVERAGE SALE PRICE per share		SHARES PRICED	SHARES SETTLED	SHARES REMAINING TO BE SETTLED	NET PROCEEDS in millions
Balance, beginning of period	$	—	—	—	1,823,259	$	—
1Q 2021	$	30.09	215,532	2,038,791	—	$	62.7
April 2021	$	30.81	4,133,619	—	4,133,619	$	—

The 4.1 million shares remaining are expected to be settled by April 2022, and the Company expects net proceeds ranging from $120.9 million to $125.5 million, depending on the timing of settlement. Expected net proceeds are calculated by reducing the initial price by adjustments provided in the forward equity arrangements. After accounting for these settlements, the Company has approximately $163.6 million remaining available to be sold under the current sales agreements at the date of this filing.

Debt Activity

The Company has outstanding interest rate derivatives totaling $175.0 million to hedge one-month LIBOR. The following details the amount and rate of each swap (dollars in thousands):

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	%

Operating Activities

Cash flows provided by operating activities increased from $38.4 million for the three months ended March 31, 2020 to $42.5 million for the three months ended March 31, 2021. Items impacting cash flows from operations include, but are not limited to, cash generated from property operations, interest payments and the timing related to the payment of invoices and other expenses.

The Company may, from time to time, sell properties and redeploy cash from property sales into new investments. To the extent revenues related to the properties being sold exceed income from these new investments, the Company's results of operations and cash flows could be adversely affected.

19

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that are reasonably likely to have a current or future material effect on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

New Accounting Pronouncements

See Note 1 to the Company's Condensed Consolidated Financial Statements accompanying this report for information on new accounting standards.

Trends and Matters Impacting Operating Results

Management monitors factors and trends important to the Company and the REIT industry to gauge the potential impact on the operations of the Company. In addition to the matters discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, below are some of the factors and trends that management believes may impact future operations of the Company.

Expiring Leases

The Company expects that approximately 15% to 20% of the leases will expire each year in the ordinary course of business. There are 548 leases totaling 1.7 million square feet that will expire during the remainder of 2021. Approximately 92% of the leases expiring in 2021 are in buildings located on or adjacent to hospital campuses, are distributed throughout the portfolio, and are not concentrated with any one tenant, health system or market area. The Company typically expects to retain 75% to 90% of tenants upon expiration, and the retention ratio for the first three months of the year was within this range.

Operating Expenses

The Company has historically experienced increases in property taxes throughout its portfolio as a result of increasing assessments and tax rates levied across the country. The Company continues its efforts to appeal property tax increases and manage the impact of the increases. In addition, the Company has historically incurred variability in portfolio utilities expense based on seasonality, with the first and third quarters usually reflecting greater amounts. The effects of these operating expense increases are mitigated in leases that have provisions for operating expense reimbursement. As of March 31, 2021, leases for 90% of the Company's multi-tenant leased square footage allow for some recovery of operating expenses, with 33% having modified gross lease structures and 57% having net lease structures.

Purchase Options

Information about the Company's unexercised purchase options and the amount and basis for determination of the purchase price is detailed in the table below (dollars in thousands):

	NUMBER OF PROPERTIES		GROSS REAL ESTATE INVESTMENT AS OF MARCH 31, 2021
YEAR EXERCISABLE	MOB	INPATIENT	FAIR MARKET VALUE METHOD 1		NON FAIR MARKET VALUE METHOD 2		TOTAL
Current 3	2	1	$	54,284	$	—	$	54,284
2022	1	—	—		14,984		14,984
2023	—	—	—		—		—
2024	—	—	—		—		—
2025	4	—	48,175		19,459		67,634
2026	—	—	—		—		—
2027	—	—	—		—		—
2028	1	—	40,983		—		40,983
2029	1	—	26,494		—		26,494
2030	—	—	—		—		—
2031 and thereafter	4	—	101,697		—		101,697
Total	13	1	$	271,633	$	34,443	$	306,076

1The purchase option price includes a fair market value component that is determined by an appraisal process.

2Includes properties with stated purchase prices or prices based on fixed capitalization rates.

3These purchase options have been exercisable for an average of 13.6 years.

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Non-GAAP Financial Measures and Key Performance Indicators

Management considers certain non-GAAP financial measures and key performance indicators to be useful supplemental measures of the Company's operating performance. A non-GAAP financial measure is generally defined as one that purports to measure financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable measure determined in accordance with GAAP. Set forth below are descriptions of the non-GAAP financial measures management considers relevant to the Company's business and useful to investors, as well as reconciliations of these measures to the most directly comparable GAAP financial measures.

The non-GAAP financial measures and key performance indicators presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income, as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs. Management believes that in order to facilitate a clear understanding of the Company's historical consolidated operating results, these measures should be examined in conjunction with net income and cash flows from operations as presented in the Condensed Consolidated Financial Statements and other financial data included elsewhere in this Quarterly Report on Form 10-Q.

Funds from Operations ("FFO"), Normalized FFO and Funds Available for Distribution ("FAD")

FFO and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to “net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization, impairment, and after adjustments for unconsolidated partnerships and joint ventures.”

In addition to FFO, the Company presents Normalized FFO and FAD. Normalized FFO is presented by adding to FFO acquisition-related costs, acceleration of debt issuance costs, debt extinguishment costs and other Company-defined normalizing items to evaluate operating performance. FAD is presented by adding to Normalized FFO non-real estate depreciation and amortization, deferred financing fees amortization, stock-based compensation expense and provision for bad debts, net; and subtracting maintenance capital expenditures, including second generation tenant improvements and leasing commissions paid and straight-line rent income, net of expense. The Company's definition of these terms may not be comparable to that of other real estate companies as they may have different methodologies for computing these amounts. FFO, Normalized FFO and FAD should not be considered as an alternative to net income as an indicator of the Company's financial performance or to cash flow from operating activities as an indicator of the Company's liquidity. FFO, Normalized FFO and FAD should be reviewed in connection with GAAP financial measures.

Management believes FFO, Normalized FFO, FFO per share, Normalized FFO per share and FAD ("Non-GAAP Measures") provide an understanding of the operating performance of the Company’s properties without giving effect to certain significant non-cash items, primarily depreciation and amortization expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. The Company believes that by excluding the effect of depreciation, amortization, impairments and gains or losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, Non-GAAP Measures can facilitate comparisons of operating performance between periods. The Company reports Non-GAAP Measures because these measures are observed by management to also be the predominant measures used by the REIT industry and by industry analysts to evaluate REITs. For these reasons, management deems it appropriate to disclose and discuss these Non-GAAP Measures. However, none of these measures represent cash generated from operating activities determined in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs. Further, these measures should not be considered as an alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flow from operating activities as a measure of liquidity. The table below reconciles net income to FFO, Normalized FFO and FAD for the three months ended March 31, 2021 and 2020.

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	THREE MONTHS ENDED MARCH 31,
Amounts in thousands, except per share data	2021		2020
Net income	$	24,022	$	4,315
(Gain) loss on sales of real estate properties	(18,890)		49
Impairment of real estate properties	834		—
Real estate depreciation and amortization	51,311		48,531
Proportionate share of unconsolidated joint ventures	813		80
FFO attributable to common stockholders	$	58,090	$	52,975
Acquisition and pursuit costs 1	744		750
Lease intangible amortization	(72)		745
Forfeited earnest money received	(500)		—
Unconsolidated JV normalizing items 2	27		—
Normalized FFO attributable to common stockholders	$	58,289	$	54,470
Non-real estate depreciation and amortization	673		823
Non-cash interest expense amortization 3	894		746
Provision for bad debt, net	(79)		(83)
Straight-line rent, net	(1,094)		(668)
Stock-based compensation	3,019		2,599
Unconsolidated JV non-cash items 4	(357)		8
Normalized FFO adjusted for non-cash items	$	61,345	$	57,895
2nd generation TI	(5,189)		(6,040)
Leasing commissions paid	(1,193)		(2,824)
Capital additions	(2,019)		(3,470)
FAD	$	52,944	$	45,561
FFO per common share - diluted	$	0.42	$	0.40
Normalized FFO per common share - diluted	$	0.42	$	0.41
FFO weighted average common shares outstanding - diluted 5	139,714		133,980

1Acquisition and pursuit costs include third-party and travel costs related to the pursuit of acquisitions and developments.

2Includes the Company's proportionate share of acquisition and pursuit costs related to unconsolidated joint ventures.

3Includes the amortization of deferred financing costs, discounts and premiums.

4Includes the Company's proportionate share of straight-line rent, net related to unconsolidated joint ventures.

5The Company utilizes the treasury stock method which includes the dilutive effect of nonvested share-based awards outstanding of 843,173 for the three months ended March 31, 2021.

Cash Net Operating Income ("NOI") and Same Store Cash NOI

Cash NOI and Same Store Cash NOI are key performance indicators. Management considers these to be supplemental measures that allow investors, analysts and Company management to measure unlevered property-level operating results. The Company defines Cash NOI as rental income and property lease guaranty income less property operating expenses. Cash NOI excludes non-cash items such as above and below market lease intangibles, straight-line rent, lease inducements, tenant improvement amortization and leasing commission amortization. The Company also excludes cash lease termination fees. Cash NOI is historical and not necessarily indicative of future results.

Same Store Cash NOI compares Cash NOI for stabilized properties. Stabilized properties are properties that have been included in operations for the duration of the year-over-year comparison period presented and include redevelopment projects. Accordingly, stabilized properties exclude properties that were recently acquired or disposed of, properties classified as held for sale, reposition properties and newly developed properties. The Company utilizes the reposition classification for properties experiencing a shift in strategic direction. Such a shift can occur for a variety of reasons, including a substantial change in the use of the asset, a change in strategy or closure of a neighboring hospital, or significant property damage. Such properties may require enhanced management, leasing, capital needs or a disposition strategy that differs from the rest of the portfolio. To identify properties exhibiting these reposition characteristics, the Company applies the following Company-defined criteria:

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•Properties having less than 60% occupancy that is expected to last at least two quarters;

•Properties that experience a loss of occupancy over 30% in a single quarter; or

•Properties with negative NOI that is expected to last at least two quarters.

Any recently acquired property will be included in the same store pool once the Company has owned the property for eight full quarters. Newly developed properties will be included in the same store pool eight full quarters after substantial completion. Any additional square footage created by redevelopment projects at a same store property is included in the same store pool immediately upon completion. Any property included in the reposition property group will be included in the same store analysis once occupancy has increased to 60% or greater with positive NOI and has remained at that level for eight full quarters.

During the first quarter of 2021, the Company's reposition pool decreased by one property to a total of nine properties as a result of the property being reclassified from reposition to held for sale.

The following table reflects the Company's same store cash NOI for the three months ended March 31, 2021 and 2020.

	NUMBER OF PROPERTIES	GROSS INVESTMENT at March 31, 2021		SAME STORE CASH NOI for the three months ended March 31,
Dollars in thousands				2021		2020
Same store properties	167	$	3,587,129	$	65,009	$	63,696

The following tables reconcile net income to same store NOI and the same store property metrics to the total owned real estate portfolio for the three months ended March 31, 2021 and 2020:

Reconciliation of Same Store Cash NOI

	THREE MONTHS ENDED MARCH 31,
Dollars in thousands	2021		2020
Net income	$	24,022	$	4,315
Other income (expense)	(5,220)		13,927
General and administrative expense	8,499		8,766
Depreciation and amortization expense	50,079		47,497
Other expenses 1	3,150		3,740
Straight-line rent revenue	(1,461)		(1,043)
Joint venture properties	465		78
Other revenue 2	(1,865)		(2,004)
Cash NOI	77,669		75,276
Cash NOI not included in same store	(12,660)		(11,580)
Same store cash NOI	65,009		63,696
Reposition NOI	881		1,330
Same store and reposition cash NOI	$	65,890	$	65,026

1Includes acquisition and pursuit costs, bad debt, above and below market ground lease intangible amortization, leasing commission amortization and ground lease straight-line rent expense.

2Includes management fee income, interest, above and below market lease intangible amortization, lease inducement amortization, lease terminations and tenant improvement overage amortization.

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Reconciliation of Same Store Properties

	AS OF MARCH 31, 2021
Dollars in thousands	PROPERTY COUNT	GROSS INVESTMENT		SQUARE FEET	OCCUPANCY
Same store properties	167	$	3,587,129	12,981,334	88.6	%
Acquisitions	45	788,875		2,091,663	89.8	%
Development completions	2	81,940		261,914	64.5	%
Reposition	9	118,362		741,798	59.7	%
Total owned real estate properties	223	$	4,576,306	16,076,709	87.1	%

Results of Operations

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

The Company’s results of operations for the three months ended March 31, 2021 compared to the same period in 2020 were impacted by acquisitions, developments, dispositions, gains on sale, and capital markets transactions.

Revenues

Rental income increased $5.7 million, or 4.7%, for the three months ended March 31, 2021 compared to the prior year period. This increase is comprised of the following:

•Acquisitions in 2020 and 2021 contributed $8.6 million.

•A development completed in 2020 contributed $0.7 million.

•Leasing activity, including contractual rent increases, contributed $1.2 million.

•Dispositions in 2020 and 2021 resulted in a decrease of $4.8 million.

Other operating income decreased $0.2 million, or 9.8%, from the prior year period primarily due to a reduction in variable parking revenue.

Expenses

Property operating expenses increased $2.7 million, or 5.4%, for the three months ended March 31, 2021 compared to the prior year period primarily as a result of the following activity:

•Acquisitions in 2020 and 2021 resulted in an increase of $3.2 million.

•A development completed in 2020 resulted in an increase of $0.1 million.

•Increases in portfolio operating expenses as follows:

•Portfolio property tax expense of $0.2 million; and

•Compensation increase of $0.2 million.

•Decreases in portfolio operating expenses as follows:

•Legal and other administrative costs of $0.3 million; and

•Intangible amortization write-off in the first quarter of 2020 due the acquisition of previously ground leased land totaling $0.7 million.

General and administrative expenses decreased approximately $0.3 million, or 3.0%, for the three months ended March 31, 2021 compared to the prior year period primarily as a result of a decrease in travel expense.

Depreciation and amortization expense increased $2.6 million, or 5.4%, for the three months ended March 31, 2021 compared to the prior year period primarily as a result of the following activity:

•Acquisitions in 2020 and 2021 and a development in 2020 resulted in an increase of $5.0 million.

•Various building and tenant improvement expenditures resulted in an increase of $2.4 million.

•Dispositions in 2020 and 2021 resulted in a decrease of $1.9 million, including $0.3 million related to properties that were reclassified to held for sale.

•Assets that became fully depreciated resulted in a decrease of $2.9 million.

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Other Income (Expense)

Gains on sale of real estate properties

In the first quarter of 2021, the Company recognized a gain of approximately $18.9 million on the sale of two properties.

Interest expense

Interest expense decreased $0.7 million or 5.0%, for the three months ended March 31, 2021 compared to the prior year period. The components of interest expense are as follows:

	THREE MONTHS ENDED MARCH 31,				CHANGE
Dollars in thousands	2021		2020		$		%
Contractual interest	$	12,239	$	13,398	$	(1,159)	(8.7)	%
Net discount/premium accretion	47		52		(5)		(9.6)	%
Deferred financing costs amortization	698		637		61		9.6	%
Interest rate swap amortization	42		42		—		—	%
Treasury hedge amortization	107		15		92		613.3	%
Interest cost capitalization	(118)		(421)		303		(72.0)	%
Right-of-use assets financing amortization	247		237		10		4.2	%
Total interest expense	$	13,262	$	13,960	$	(698)	(5.0)	%

Contractual interest expense decreased $1.2 million, or 8.7%, primarily due to the following activity:

•The unsecured senior notes due 2031 and the Senior Notes due 2030 accounted for an increase of approximately $3.0 million.

•The redemption of the unsecured senior notes due 2023 accounted for a decrease of $2.3 million.

•The Unsecured Term Loan due 2024 and the Unsecured Term Loan due 2026, net of swaps, accounted for an increase of approximately $0.5 million.

•The Unsecured Credit Facility accounted for a decrease of approximately $1.9 million.

•Mortgage note repayments, net of assumptions, accounted for a decrease of approximately $0.5 million.

Impairment of Real Estate Properties

Impairment of real estate properties totaling approximately $0.8 million was associated with the fair value impairment of in relation to a contract to sell three real estate properties.

Equity loss from unconsolidated joint ventures

The Company recognized its proportionate share of losses from the TIAA Joint Venture and its parking garage joint ventures. These losses are primarily attributable to non-cash depreciation expense. See Note 2 for more details regarding the Company's unconsolidated joint ventures.

Interest and other income (expense), net

In the first quarter of 2021, the Company recorded approximately $0.5 million from a forfeited earnest money deposit.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to market risk in the form of changing interest rates on its debt and mortgage notes. Management uses regular monitoring of market conditions and analysis techniques to manage this risk. During the three months ended March 31, 2021, there were no material changes in the quantitative and qualitative disclosures about market risks presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports it files or submits under the Exchange Act.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. 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.

Item 1A. Risk Factors

In addition to the other information set forth in this report, an investor should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which could materially affect the Company’s business, financial condition or future results. The risks, as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, are not the only risks facing the Company. Additional risks and uncertainties not currently known to management or that management currently deems immaterial also may materially, adversely affect the Company’s business, financial condition, operating results or cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three ended March 31, 2021, the Company withheld and canceled shares of Company common stock to satisfy employee tax withholding obligations payable upon the vesting of non-vested shares, as follows:

PERIOD	TOTAL NUMBER OF SHARES PURCHASED	AVERAGE PRICE PAID per share		TOTAL NUMBER OF SHARES purchased as part of publicly announced plans or programs	MAXIMUM NUMBER OF SHARES that may yet be purchased under the plans or programs
January 1 - January 31	—	$	—	—	—
February 1 - February 28	50,240	30.95		—	—
March 1 - March 31	—	—		—	—
Total	50,240

On May 4, 2021, the Company’s Board of Directors authorized the repurchase of up to $50.0 million of outstanding shares of the Company’s common stock either in the open market or through privately negotiated transactions, subject to market conditions, regulatory constraints, and other customary conditions. The Company is not obligated under this authorization to repurchase any specific number of shares. This authorization supersedes all previous stock repurchase authorizations. As of the date of this report, the Company has not repurchased any shares of its common stock under this authorization.

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Item 6. Exhibits

EXHIBIT	DESCRIPTION
Exhibit 3.1	Second Articles of Amendment and Restatement of the Company, as amended 1
Exhibit 3.2	Amended and Restated Bylaws of the Company, as amended 1
Exhibit 4.1	Specimen Stock Certificate 2
Exhibit 4.2	Indenture, dated as of May 15, 2001, by and between the Company and Truist Bank, formally known as Branch Banking and Trust Company, as trustee (as successor to the trustee named therein) 3
Exhibit 4.3	Fifth Supplemental Indenture, dated March 26, 2013, by and between the Company and Truist Bank, formally known as Branch Banking and Trust Company, as Trustee (as successor to the trustee named therein)4
Exhibit 4.4	Form of 3.75% Senior Note due 2023 (set forth in Exhibit B to the Fifth Supplemental Indenture filed as Exhibit 4.3 thereto) 4
Exhibit 4.5	Sixth Supplemental Indenture, dated April 24, 2015, by and between the Company and Truist Bank, formally known as Branch Banking and Trust Company, as Trustee (as successor to the trustee named therein) 5
Exhibit 4.6	Form of 3.875% Senior Note due 2025 (set forth in Exhibit B to the Sixth Supplemental Indenture filed as Exhibit 4.5 thereto) 5
Exhibit 4.7	Seventh Supplemental Indenture, dated December 11, 2017, by and between the Company and Truist Bank, formally known as Branch Banking and Trust Company, as Trustee. 6
Exhibit 4.8	Form of 3.625% Senior Note due 2028 (set forth in Exhibit B to the Seventh Supplemental Indenture filed as Exhibit 4.7 hereto). 6
Exhibit 4.9	Eighth Supplemental Indenture, dated March 18, 2020, by and between the Company and Truist Bank, formally known as Branch Banking and Trust Company, as Trustee.7
Exhibit 4.10	Form of 2.400% Senior Note due 2030 (set forth in Exhibit B to the Eighth Supplemental Indenture filed as Exhibit 4.9 hereto). 7
Exhibit 4.11	Ninth Supplemental Indenture, dated October 2, 2020, by and between the Company and Truist Bank, formally known as Branch Banking and Trust Company, as Trustee. 8
Exhibit 4.12	Form of 2.050% Senior Note due 2031 (set forth in Exhibit B to the Ninth Supplemental Indenture filed as Exhibit 4.11 hereto). 8
Exhibit 31.1	Certification of the Chief Executive Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 31.2	Certification of the Chief Financial Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 32	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
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)

1Filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2018 filed February 13, 2019 and hereby incorporated by reference.

2Filed as an exhibit to the Company’s Registration Statement on Form S-11 (Registration No. 33-60506) filed April 2, 1993 and hereby incorporated by reference.

3Filed as an exhibit to the Company's Current Report on Form 8-K filed May 17, 2001 and hereby incorporated by reference.

4Filed as an exhibit to the Company's Current Report on Form 8-K filed March 26, 2013 and hereby incorporated by reference.

5Filed as an exhibit to the Company's Current Report on Form 8-K filed April 24, 2015 and hereby incorporated by reference.

6Filed as an exhibit to the Company’s Current Report on Form 8-K filed December 11, 2017 and hereby incorporated by reference.

7Filed as an exhibit to the Company's Current Report on Form 8-K filed March 18, 2020 and hereby incorporated by reference.

8Filed as an exhibit to the Company's Current Report on Form 8-K filed October 2, 2020 and hereby incorporated by reference.

27

SIGNATURE

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

	HEALTHCARE REALTY TRUST INCORPORATED
	By:	/s/ J. CHRISTOPHER DOUGLAS
		J. Christopher Douglas
		Executive Vice President and Chief Financial Officer
May 5, 2021

28

EX-31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302

Exhibit 31.1

Healthcare Realty Trust Incorporated

Quarterly Certification

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

I, Todd J. Meredith, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Healthcare Realty Trust Incorporated;

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

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

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

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

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

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

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

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

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

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

Date:	May 5, 2021
		/s/ TODD J. MEREDITH
		Todd J. Meredith
		President and Chief Executive Officer

EX-31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302

Exhibit 31.2

Healthcare Realty Trust Incorporated

Quarterly Certification

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

I, J. Christopher Douglas, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Healthcare Realty Trust Incorporated;

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

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

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

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

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

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

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

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

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

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

Date:	May 5, 2021
		/s/ J. CHRISTOPHER DOUGLAS
		J. Christopher Douglas
		Executive Vice President and Chief Financial Officer

EX-32

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350 SECTION 906

Exhibit 32

Healthcare Realty Trust Incorporated

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

    In connection with the Quarterly Report of Healthcare Realty Trust Incorporated (the “Company”) on Form 10-Q for the quarter ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Todd J. Meredith, President and Chief Executive Officer of the Company, and I, J. Christopher Douglas, Executive Vice President and Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date:	May 5, 2021
		/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

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Cover Page - shares	3 Months Ended
	Mar. 31, 2021	Apr. 30, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	001-11852
Entity Registrant Name	HEALTHCARE REALTY TRUST INCORPORATED
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	62-1507028
Entity Address, Address Line One	3310 West End Avenue, Suite 700
Entity Address, City or Town	Nashville
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37203
City Area Code	615
Local Phone Number	269-8175
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	HR
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		141,660,077
Entity Central Index Key	0000899749
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Real estate properties
Land	$ 369,202	$ 362,695
Buildings, improvements and lease intangibles	4,201,251	4,220,297
Personal property	11,370	11,195
Land held for development	27,226	27,226
Total real estate properties	4,609,049	4,621,413
Less accumulated depreciation and amortization	(1,238,044)	(1,239,224)
Total real estate properties, net	3,371,005	3,382,189
Cash and cash equivalents	12,087	15,303
Assets held for sale, net	64,578	20,646
Operating lease right-of-use assets	120,890	125,198
Financing lease right-of-use assets	19,559	19,667
Investments in unconsolidated joint ventures	83,943	73,137
Other assets, net	182,043	176,120
Total assets	3,854,105	3,812,260
Liabilities
Notes and bonds payable	1,609,251	1,602,769
Accounts payable and accrued liabilities	66,407	81,174
Liabilities of assets held for sale	1,342	1,216
Operating lease liabilities	91,921	92,273
Financing lease liabilities	18,722	18,837
Other liabilities	68,353	67,615
Total liabilities	1,855,996	1,863,884
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value per share; 50,000 shares authorized; none issued and outstanding	0	0
Common stock, $.01 par value per share; 300,000 shares authorized; 141,660 and 139,487 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	1,417	1,395
Additional paid-in capital	3,699,867	3,635,341
Accumulated other comprehensive loss	(13,887)	(17,832)
Cumulative net income attributable to common stockholders	1,223,521	1,199,499
Cumulative dividends	(2,912,809)	(2,870,027)
Total stockholders' equity	1,998,109	1,948,376
Total liabilities and stockholders' equity	$ 3,854,105	$ 3,812,260

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
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)	141,660,000	139,487,000
Common stock, outstanding (shares)	141,660,000	139,487,000

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues
Rental income	$ 128,389	$ 122,644
Other operating	1,950	2,163
Revenues	130,339	124,807
Expenses
Property operating	52,215	49,552
General and administrative	8,499	8,766
Acquisition and pursuit costs	744	750
Depreciation and amortization	50,079	47,497
Expenses	111,537	106,565
Other Income (Expense)
Gain (loss) on sales of real estate properties	18,890	(49)
Interest expense	(13,262)	(13,960)
Impairment of real estate properties	(834)
Equity loss from unconsolidated joint ventures	(74)	(11)
Interest and other income (expense), net	500	93
Total other income (expense)	5,220	(13,927)
Net Income	$ 24,022	$ 4,315
Basic earnings per common share (in dollars per share)	$ 0.17	$ 0.03
Diluted earnings per common share (in dollars per share)	$ 0.17	$ 0.03
Weighted average common shares outstanding - basic	138,773,754	133,036,245
Weighted average common shares outstanding - diluted	138,870,818	133,149,566
Revenue, Product and Service [Extensible List]	us-gaap:ServiceMember	us-gaap:ServiceMember

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net income	$ 24,022	$ 4,315
Interest rate swaps
Reclassification adjustments for losses included in net income (interest expense)	1,095	328
Gains (losses) arising during the period on interest rate swaps and treasury rate locks	2,850	(13,930)
Other comprehensive income (loss)	3,945	(13,602)
Comprehensive income (loss)	27,967	(9,287)
Interest Rate Swaps
Interest rate swaps
Gains (losses) arising during the period on interest rate swaps and treasury rate locks	2,850	(9,663)
Treasury Rate Locks
Interest rate swaps
Gains (losses) arising during the period on interest rate swaps and treasury rate locks	$ 0	$ (4,267)

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Condensed Consolidated Statements of Equity (Unaudited) Statement - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Cumulative Net Income	Cumulative Dividends
Beginning balance at Dec. 31, 2019	$ 1,900,009	$ 1,347	$ 3,485,003	$ (6,175)	$ 1,127,304	$ (2,707,470)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs	7,321	2	7,319
Common stock redemptions	(798)		(798)
Share-based compensation	2,599		2,599
Net income	4,315				4,315
Reclassification adjustments for losses included in net income (interest expense)	328			328
Gains (losses) arising during the period on interest rate swaps and treasury rate locks	(13,930)			(13,930)
Dividends to common stockholders (in usd per share)	(40,416)					(40,416)
Ending balance at Mar. 31, 2020	1,859,428	1,349	3,494,123	(19,777)	1,131,619	(2,747,886)
Beginning balance at Dec. 31, 2020	1,948,376	1,395	3,635,341	(17,832)	1,199,499	(2,870,027)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of issuance costs	63,085	21	63,064
Common stock redemptions	(1,556)	(1)	(1,555)
Share-based compensation	3,019	2	3,017
Net income	24,022				24,022
Reclassification adjustments for losses included in net income (interest expense)	1,095			1,095
Gains (losses) arising during the period on interest rate swaps and treasury rate locks	2,850			2,850
Dividends to common stockholders (in usd per share)	(42,782)					(42,782)
Ending balance at Mar. 31, 2021	$ 1,998,109	$ 1,417	$ 3,699,867	$ (13,887)	$ 1,223,521	$ (2,912,809)

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Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Stockholders' Equity [Abstract]
Dividend per share to common Stockholders (in dollars per share)	$ 0.3025	$ 0.3000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
OPERATING ACTIVITIES
Net income	$ 24,022	$ 4,315
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	50,079	47,497
Other amortization	822	1,491
Share-based compensation	3,019	2,599
Amortization of straight-line rent receivable (lessor)	(1,461)	(1,043)
Amortization of straight-line rent on operating leases (lessee)	367	375
(Gain) loss on sales of real estate properties	(18,890)	49
Impairment of real estate properties	834	0
Equity loss from unconsolidated joint ventures	74	11
Distributions from unconsolidated joint ventures	0	118
Changes in operating assets and liabilities:
Other assets, including right-of-use-assets	(3,467)	(4,032)
Accounts payable and accrued liabilities	(17,181)	(10,005)
Other liabilities	4,278	(2,931)
Net cash provided by operating activities	42,496	38,444
INVESTING ACTIVITIES
Acquisitions of real estate	(64,275)	(83,580)
Development of real estate	(184)	(2,451)
Additional long-lived assets	(19,937)	(22,164)
Investments in unconsolidated joint ventures	(10,880)	0
Proceeds from sales of real estate properties	25,445	0
Net cash used in investing activities	(69,831)	(108,195)
FINANCING ACTIVITIES
Net borrowings (repayments) on unsecured credit facility	7,000	(78,000)
Borrowings on term loan	0	298,995
Repayments on notes and bonds payable	(946)	(7,202)
Dividends paid	(42,782)	(40,416)
Net proceeds from issuance of common stock	63,195	7,213
Common stock redemptions	(1,959)	(892)
Settlement of treasury rate locks	0	(4,267)
Debt issuance and assumption costs	(27)	(2,646)
Payments made on finance leases	(362)	(321)
Net cash provided by financing activities	24,119	172,464
Decrease (increase) in cash and cash equivalents	(3,216)	102,713
Cash and cash equivalents at beginning of period	15,303	657	$ 657
Cash and cash equivalents at end of period	12,087	103,370	$ 15,303
Supplemental Cash Flow Information
Interest paid	15,779	11,428
Invoices accrued for construction, tenant improvements and other capitalized costs	17,805	12,830
Mortgage notes payable assumed upon acquisition (adjusted to fair value)	0	19,269
Capitalized interest	$ 118	$ 421

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

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 March 31, 2021, the Company had gross investments of approximately $4.6 billion in 223 real estate properties located in 24 states totaling approximately 16.1 million square feet. The Company provided leasing and property management services to approximately 13.1 million square feet nationwide. The Company owns 50% of an unconsolidated joint venture with Teachers Insurance and Annuity Association ("TIAA Joint Venture") and earns certain fees as the managing member. As of March 31, 2021, the TIAA Joint Venture owned five buildings. See Note 2 for more details regarding the Company's unconsolidated joint ventures.

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, 2020. 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, 2020. 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, 2021 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.

Principles of Consolidation

The Company’s Condensed Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiaries, and joint ventures and partnerships where the Company controls the operating activities. GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). Accounting Standards Codification 810 broadly defines a VIE as an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary. The Company performs this analysis on an ongoing basis.

For property holding entities not determined to be VIEs, the Company consolidates such entities in which it owns 100% of the equity or has a controlling financial interest evidenced by ownership of a majority voting interest. All intercompany balances and transactions are eliminated in consolidation. For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements.

As of March 31, 2021, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company exercised significant influence over but did not control these entities. See Note 2 for more details regarding the Company's unconsolidated joint ventures.

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 March 31, 2021. 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.

Revenue from Contracts with Customers (Topic 606)

The Company recognizes certain revenue under the core principle of Topic 606. This topic 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, management fee income and other miscellaneous income. Below is a detail of the amounts by category:

	THREE MONTHS ENDED March 31,
in thousands	2021		2020
Type of Revenue
Parking income	$	1,658	$	2,051
Management fee income	239		78
Miscellaneous	53		34
	$	1,950	$	2,163

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.

New Accounting Pronouncements

Accounting Standards Update No. 2020-04

On March 12, 2020, the Financial Accounting Standards Board ("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

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Real Estate Investments

Real Estate Investments

2021 Company Acquisitions

The following table details the Company's acquisitions for the three months ended March 31, 2021:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		CASH CONSIDERATION 2		REAL ESTATE		OTHER 3		SQUARE FOOTAGE
San Diego, CA	MOB	1/7/21	$	17,150	$	17,182	$	17,182	$	—	22,461
Dallas, TX 4	MOB	2/1/21	22,515		22,299		22,641		(342)		121,709
Atlanta, GA 4	MOB	2/17/21	9,800		10,027		10,073		(46)		44,567
Washington, D.C.	MOB	3/3/21	12,750		12,709		12,658		51		26,496
Total real estate acquisitions			$	62,215	$	62,217	$	62,554	$	(337)	215,233

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 two properties.

Unconsolidated Joint Venture Acquisitions

The TIAA Joint Venture is not consolidated for purposes of the Company's Condensed Consolidated Financial Statements. The following table details the TIAA Joint Venture acquisition for the three months ended March 31, 2021:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		CASH CONSIDERATION 2		REAL ESTATE		OTHER 3		SQUARE FOOTAGE	OWNERSHIP %
Denver, CO	MOB	3/30/21	$	14,375	$	14,056	$	14,550	$	(494)	59,359	50	%

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.

Subsequent to March 31, 2021, the TIAA Joint Venture acquired the following properties:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		SQUARE FOOTAGE	OWNERSHIP %
Colorado Springs, CO	MOB	4/1/21	$	7,200	27,510	50	%
Los Angeles, CA	MOB	4/8/21	31,335		57,573	50	%
San Antonio, TX	MOB	4/30/21	13,600		45,000	50	%
			$	52,135	130,083

1MOB = medical office building.

Unconsolidated Joint Ventures

The Company's investment in and loss recognized for the three months ended March 31, 2021 and 2020 related to its joint ventures accounted for under the equity method are shown in the table below:

	THREE MONTHS ENDED March 31,
Dollars in thousands	2021		2020
Investments in unconsolidated joint ventures, beginning of period 1	$	73,137	$	8,130
New investments during the period	10,880		—
Equity loss recognized during the period 1	(74)		(11)
Owner distributions	—		(119)
Investments in unconsolidated joint ventures, end of period 1	$	83,943	$	8,000

1In addition to the TIAA Joint Venture, the Company also has a 55% and 27% ownership interest in two limited liability companies that each own a parking garage in Atlanta, Georgia.

2021 Real Estate Asset Dispositions

The following table details the Company's dispositions for the three months ended March 31, 2021:

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)
Los Angeles, CA 3	MOB	3/11/21	$	26,000	$	(555)	$	25,445	$	6,046	$	509	$	18,890	73,906

1MOB = medical office building

2Includes straight-line rent receivables, leasing commissions and lease inducements.

3Includes two properties sold to a single purchaser in two transactions which occurred on March 5 and March 11, 2021.

Subsequent Disposition

On April 12, 2021, the Company disposed of a 19,732 square foot single-tenant net leased medical office building located in Atlanta, GA. The sales price was $8.1 million and the Company's net investment in the building as of March 31, 2021 was approximately $5.7 million.

Assets Held for Sale

As of March 31, 2021 and December 31, 2020, the Company had nine and four properties, respectively, classified as assets held for sale. The following properties were reclassified to held for sale during the first quarter of 2021:

•a medical office building in Atlanta, GA with a contractual sales price of $8.1 million. The sales price is greater than the current net investment of approximately $5.7 million. The Company disposed of this property on April 12, 2021.

•three medical office buildings in Gadsden, AL with a contractual sales price of $5.5 million. An impairment charge of $0.8 million was recorded based on the contractual sales price less estimated costs to sell.

•a medical office building in Richmond, VA with a contractual sales price of $52.0 million. The contractual sales price is greater than the current net investment of approximately $29.4 million.

The table below reflects the assets and liabilities of the properties classified as held for sale as of March 31, 2021 and December 31, 2020:

(Dollars in thousands)	March 31, 2021		December 31, 2020
Balance Sheet data:
Land	$	3,148	$	1,664
Building, improvements and lease intangibles	96,013		27,443
Personal property	56		39
	99,217		29,146
Accumulated depreciation	(40,381)		(10,455)
Real estate assets held for sale, net	58,836		18,691
Operating lease right-of-use assets	3,241		—
Other assets, net	2,501		1,955
Assets held for sale, net	$	64,578	$	20,646
Accounts payable and accrued liabilities	$	588	$	533
Other liabilities	754		683
Liabilities of assets held for sale	$	1,342	$	1,216

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Leases

3 Months Ended

Mar. 31, 2021

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 2040. 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 consumer price index ("CPI"). 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 months ended March 31, 2021 was $128.4 million.

Future lease payments under the non-cancelable operating leases, excluding any reimbursements, as of March 31, 2021 were as follows:

In thousands	Operating
2021	$	286,175
2022	345,229
2023	298,828
2024	233,601
2025	183,405
2026 and thereafter	459,569
	$	1,806,807

Lessee Accounting

As of March 31, 2021, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of March 31, 2021, the Company had 104 properties, excluding one property classified as held for sale, totaling 8.6 million square feet that were held under ground leases. Some of the ground lease 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 CPI. The Company had 42 prepaid ground leases, excluding one property classified as held for sale, as of March 31, 2021. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.1 million and $0.2 million of the Company’s rental expense for the three months ended March 31, 2021 and 2020, respectively.

The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of March 31, 2021 were as follows:

In thousands	OPERATING		FINANCING
2021	$	3,164	$	611
2022	4,932		783
2023	4,971		793
2024	5,027		815
2025	5,068		826
2026 and thereafter	303,574		87,983
Total undiscounted lease payments	326,736		91,811
Discount	(234,815)		(73,089)
Lease liabilities	$	91,921	$	18,722

The following table provides details of the Company's total lease expense for the three months ended March 31, 2021 and 2020:

	THREE MONTHS ENDED March 31,
In thousands	2021			2020
Operating lease cost
Operating lease expense	$	1,178		$	1,174
Variable lease expense	896			800
Finance lease cost
Amortization of right-of-use assets	88			70
Interest on lease liabilities	247			237
Total lease expense	$	2,409		$	2,281
Other information
Operating cash flows outflows related to operating leases	$	1,844		$	2,550
Financing cash flows outflows related to financing leases	$	362		$	321
Weighted-average remaining lease term (excluding renewal options) - operating leases	48.4			49.4
Weighted-average remaining lease term (excluding renewal options) -finance leases	64.2			64.9
Weighted-average discount rate - operating leases	5.7		%	5.7		%
Weighted-average discount rate - finance leases	5.4		%	5.4		%

Leases

Leases

Lessor Accounting

The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2040. 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 consumer price index ("CPI"). 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 months ended March 31, 2021 was $128.4 million.

Future lease payments under the non-cancelable operating leases, excluding any reimbursements, as of March 31, 2021 were as follows:

In thousands	Operating
2021	$	286,175
2022	345,229
2023	298,828
2024	233,601
2025	183,405
2026 and thereafter	459,569
	$	1,806,807

Lessee Accounting

As of March 31, 2021, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of March 31, 2021, the Company had 104 properties, excluding one property classified as held for sale, totaling 8.6 million square feet that were held under ground leases. Some of the ground lease 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 CPI. The Company had 42 prepaid ground leases, excluding one property classified as held for sale, as of March 31, 2021. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.1 million and $0.2 million of the Company’s rental expense for the three months ended March 31, 2021 and 2020, respectively.

The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of March 31, 2021 were as follows:

In thousands	OPERATING		FINANCING
2021	$	3,164	$	611
2022	4,932		783
2023	4,971		793
2024	5,027		815
2025	5,068		826
2026 and thereafter	303,574		87,983
Total undiscounted lease payments	326,736		91,811
Discount	(234,815)		(73,089)
Lease liabilities	$	91,921	$	18,722

The following table provides details of the Company's total lease expense for the three months ended March 31, 2021 and 2020:

	THREE MONTHS ENDED March 31,
In thousands	2021			2020
Operating lease cost
Operating lease expense	$	1,178		$	1,174
Variable lease expense	896			800
Finance lease cost
Amortization of right-of-use assets	88			70
Interest on lease liabilities	247			237
Total lease expense	$	2,409		$	2,281
Other information
Operating cash flows outflows related to operating leases	$	1,844		$	2,550
Financing cash flows outflows related to financing leases	$	362		$	321
Weighted-average remaining lease term (excluding renewal options) - operating leases	48.4			49.4
Weighted-average remaining lease term (excluding renewal options) -finance leases	64.2			64.9
Weighted-average discount rate - operating leases	5.7		%	5.7		%
Weighted-average discount rate - finance leases	5.4		%	5.4		%

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Notes and Bonds Payable

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Notes and bonds payable

Notes and Bonds Payable

The table below details the Company’s notes and bonds payable. 

	MATURITY DATES	BALANCE AS OF				EFFECTIVE INTEREST RATE as of 3/31/2021
Dollars in thousands		3/31/2021		12/31/2020
$700 million Unsecured Credit Facility	5/23	$	7,000	$	—	1.01	%
$200 million Unsecured Term Loan Facility, net of issuance costs 1	5/24	199,292		199,236		1.96	%
$150 million Unsecured Term Loan due 2026 2	6/26	149,503		149,479		3.13	%
Senior Notes due 2025, net of discount and issuance costs 3	5/25	248,841		248,776		4.08	%
Senior Notes due 2028, net of discount and issuance costs	1/28	296,243		296,123		3.84	%
Senior Notes due 2030, net of discount and issuance costs 4	3/30	296,554		296,468		2.71	%
Senior Notes due 2031, net of discount and issuance costs	3/31	295,037		294,924		2.24	%
Mortgage notes payable, net of discounts and issuance costs and including premiums	11/22-4/27	116,781		117,763		4.07	%
		$	1,609,251	$	1,602,769

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 forward-starting interest rate swaps 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

3 Months Ended

Mar. 31, 2021

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.

As of March 31, 2021, the Company had eight outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

DERIVATIVE INSTRUMENT	NUMBER OF INSTRUMENTS	NOTIONAL AMOUNT in millions
Interest rate swaps	8	$175.0

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 March 31, 2021.

	BALANCE AT MARCH 31, 2021
In thousands	BALANCE SHEET LOCATION	FAIR VALUE
Derivatives designated as hedging instruments
Interest rate swaps	Other liabilities	$	9,378
Total derivatives designated as hedging instruments		$	9,378

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 months ended March 31, 2021 and 2020 related to the Company's outstanding interest rate swaps.

	(GAIN) LOSS RECOGNIZED IN AOCI ON DERIVATIVE three months ended March 31,					LOSS RECLASSIFIED FROM AOCI INTO INCOME three months ended March 31,
In thousands	2021		2020			2021		2020
Interest rate swaps	$	(2,850)	$	9,663	Interest expense	$	946	$	271
Settled treasury hedges	—		4,267		Interest expense	107		15
Settled interest rate swaps	—		—		Interest expense	42		42
	$	(2,850)	$	13,930	Total interest expense	$	1,095	$	328

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 March 31, 2021, 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 $9.8 million. As of March 31, 2021, 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

3 Months Ended

Mar. 31, 2021

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 continued the redevelopment of a 217,114 square foot medical office building in Dallas, Texas. As of March 31, 2021, the Company funded approximately $0.4 million in project costs. The building continues to operate with in-place leases during construction. The first new tenant lease of the redevelopment is expected to commence in the first quarter of 2022.

The Company continued the redevelopment of a 110,883 square foot medical office building in Memphis, Tennessee. As of March 31, 2021, the Company funded approximately $27.1 million in project costs. The core and shell portion of this redevelopment was completed and the first new tenant took occupancy in the first quarter of 2021, with the construction of tenant spaces to be completed throughout the remainder of 2021.

In April 2021, the Company began the redevelopment of a medical office building in Tacoma, Washington. The redevelopment includes interior and exterior improvements to the existing building, plus the addition of 23,000 square feet. The Company expects the tenant lease to commence in the second quarter of 2022.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2021

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 three months ended March 31, 2021 and the year ended December 31, 2020:

	MARCH 31, 2021	DECEMBER 31, 2020
Balance, beginning of period	139,487,375	134,706,154
Issuance of common stock	2,057,157	4,637,445
Nonvested share-based awards, net of withheld shares	115,483	143,776
Balance, end of period	141,660,015	139,487,375

At-The-Market Equity Offering Program

The Company has in place an at-the-market equity offering program to sell up to an aggregate of $500.0 million of the Company’s common stock from time to time. The following table details the Company's at-the-market activity, including forward transactions:

	WEIGHTED AVERAGE SALE PRICE per share		SHARES PRICED	SHARES SETTLED	SHARES REMAINING TO BE SETTLED	NET PROCEEDS in millions
Balance, beginning of period	$	—	—	—	1,823,259	$	—
1Q 2021	$	30.09	215,532	2,038,791	—	$	62.7
April 2021	$	30.81	4,133,619	—	4,133,619	$	—

The 4.1 million shares remaining are expected to be settled by April 2022, and the Company expects net proceeds ranging from $120.9 million to $125.5 million, depending on the timing of settlement. Expected net proceeds are calculated by reducing the initial price by adjustments provided in the forward equity arrangements. After accounting for these settlements, the Company has approximately $163.6 million remaining available to be sold under the current sales agreements at the date of this filing.

Common Stock Dividends

During the three months ended March 31, 2021, the Company declared and paid common stock dividends totaling $0.3025 per share. On May 4, 2021, the Company declared a quarterly common stock dividend in the amount of $0.3025 per share payable on May 28, 2021 to stockholders of record on May 17, 2021.

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 three months ended March 31, 2021, the Company did not enter into any forward sale agreements to sell 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 months ended March 31, 2021 did not include the effect from any assumed issuance of 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, adjusted for costs to borrow. For the three months ended March 31, 2021, no weighted-average incremental shares of common stock were excluded from the computation of weighted-average common shares outstanding - diluted.

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2021 and 2020.

	THREE MONTHS ENDED MARCH 31,
Dollars in thousands, except per share data	2021		2020
Weighted average common shares outstanding
Weighted average common shares outstanding	140,567,352		134,758,335
Non-vested shares	(1,793,598)		(1,722,090)
Weighted average common shares outstanding - basic	138,773,754		133,036,245
Weighted average common shares outstanding - basic	138,773,754		133,036,245
Dilutive effect of forward equity shares	—		—
Dilutive effect of employee stock purchase plan	97,064		113,321
Weighted average common shares outstanding - diluted	138,870,818		133,149,566
Net Income	$	24,022	$	4,315
Dividends paid on nonvested share-based awards	(540)		(517)
Net income applicable to common stockholders	$	23,482	$	3,798
Basic earnings per common share - net income	$	0.17	$	0.03
Diluted earnings per common share - net income	$	0.17	$	0.03

Incentive Plans

During the three months ended March 31, 2021, the Company made the following stock awards:

•On January 1, 2021, the Company granted non-vested stock awards to certain officers with a grant date fair value of $0.6 million which consisted of an aggregate 21,396 shares through its salary deferral program.

•On February 10, 2021, the Company granted non-vested stock awards to its four named executive officers, five senior vice presidents, and five first vice presidents with a grant date fair value totaling $3.8 million, which consisted of an aggregate 124,648 non-vested shares, with a five-year vesting period.

•Also, on February 10, 2021, the Company granted a performance-based award to officers, excluding the four named executive officers, five senior vice presidents, and five first vice presidents, under the Long-term Incentive Program totaling $0.6 million, which consisted of an aggregate 19,679 non-vested shares.

A summary of the activity under the Company's share-based incentive plans for the three months ended March 31, 2021 and 2020 is included in the table below.

	THREE MONTHS ENDED MARCH 31,
	2021	2020
Share-based awards, beginning of period	1,766,061	1,754,066
Granted	165,723	39,344
Vested	(145,413)	(68,649)
Share-based awards, end of period	1,786,371	1,724,761

During the three months ended March 31, 2021 and 2020, the Company withheld 50,240 and 23,563 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 months ended March 31, 2021 and 2020 is included in the table below.

	THREE MONTHS ENDED MARCH 31,
	2021	2020
Outstanding and exercisable, beginning of period	341,647	332,659
Granted	253,200	212,716
Exercised	(15,965)	(11,904)
Forfeited	(19,161)	(22,981)
Expired	(144,422)	(139,794)
Outstanding and exercisable, end of period	415,299	370,696

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2021

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 March 31, 2021 and December 31, 2020.

	March 31, 2021				December 31, 2020
Dollars in millions	CARRYING VALUE		FAIR VALUE		CARRYING VALUE		FAIR VALUE
Notes and bonds payable 1	$	1,609.3	$	1,581.9	$	1,602.8	$	1,645.4

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)

3 Months Ended

Mar. 31, 2021

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 March 31, 2021, the Company had gross investments of approximately $4.6 billion in 223 real estate properties located in 24 states totaling approximately 16.1 million square feet. The Company provided leasing and property management services to approximately 13.1 million square feet nationwide. The Company owns 50% of an unconsolidated joint venture with Teachers Insurance and Annuity Association ("TIAA Joint Venture") and earns certain fees as the managing member. As of March 31, 2021, the TIAA Joint Venture owned five buildings.

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, 2020. 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, 2020. 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, 2021 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.

Principals of consolidation

Principles of Consolidation

The Company’s Condensed Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiaries, and joint ventures and partnerships where the Company controls the operating activities. GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). Accounting Standards Codification 810 broadly defines a VIE as an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary. The Company performs this analysis on an ongoing basis.

For property holding entities not determined to be VIEs, the Company consolidates such entities in which it owns 100% of the equity or has a controlling financial interest evidenced by ownership of a majority voting interest. All intercompany balances and transactions are eliminated in consolidation. For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements.

As of March 31, 2021, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company exercised significant influence over but did not control these entities.

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 March 31, 2021. 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.

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 topic 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, management fee income and other miscellaneous income. Below is a detail of the amounts by category:

	THREE MONTHS ENDED March 31,
in thousands	2021		2020
Type of Revenue
Parking income	$	1,658	$	2,051
Management fee income	239		78
Miscellaneous	53		34
	$	1,950	$	2,163

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.

New accounting pronouncements

New Accounting Pronouncements

Accounting Standards Update No. 2020-04

On March 12, 2020, the Financial Accounting Standards Board ("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)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Disaggreation of revenue

Below is a detail of the amounts by category:

	THREE MONTHS ENDED March 31,
in thousands	2021		2020
Type of Revenue
Parking income	$	1,658	$	2,051
Management fee income	239		78
Miscellaneous	53		34
	$	1,950	$	2,163

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Real Estate Investments (Tables)

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Summary of acquisitions

The following table details the Company's acquisitions for the three months ended March 31, 2021:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		CASH CONSIDERATION 2		REAL ESTATE		OTHER 3		SQUARE FOOTAGE
San Diego, CA	MOB	1/7/21	$	17,150	$	17,182	$	17,182	$	—	22,461
Dallas, TX 4	MOB	2/1/21	22,515		22,299		22,641		(342)		121,709
Atlanta, GA 4	MOB	2/17/21	9,800		10,027		10,073		(46)		44,567
Washington, D.C.	MOB	3/3/21	12,750		12,709		12,658		51		26,496
Total real estate acquisitions			$	62,215	$	62,217	$	62,554	$	(337)	215,233

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 two properties.

Schedule of joint venture transactions

The following table details the TIAA Joint Venture acquisition for the three months ended March 31, 2021:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		CASH CONSIDERATION 2		REAL ESTATE		OTHER 3		SQUARE FOOTAGE	OWNERSHIP %
Denver, CO	MOB	3/30/21	$	14,375	$	14,056	$	14,550	$	(494)	59,359	50	%

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.

Subsequent to March 31, 2021, the TIAA Joint Venture acquired the following properties:

Dollars in thousands	TYPE 1	DATE ACQUIRED	PURCHASE PRICE		SQUARE FOOTAGE	OWNERSHIP %
Colorado Springs, CO	MOB	4/1/21	$	7,200	27,510	50	%
Los Angeles, CA	MOB	4/8/21	31,335		57,573	50	%
San Antonio, TX	MOB	4/30/21	13,600		45,000	50	%
			$	52,135	130,083

1MOB = medical office building.

Schedule of equity method investments

The Company's investment in and loss recognized for the three months ended March 31, 2021 and 2020 related to its joint ventures accounted for under the equity method are shown in the table below:

	THREE MONTHS ENDED March 31,
Dollars in thousands	2021		2020
Investments in unconsolidated joint ventures, beginning of period 1	$	73,137	$	8,130
New investments during the period	10,880		—
Equity loss recognized during the period 1	(74)		(11)
Owner distributions	—		(119)
Investments in unconsolidated joint ventures, end of period 1	$	83,943	$	8,000

1In addition to the TIAA Joint Venture, the Company also has a 55% and 27% ownership interest in two limited liability companies that each own a parking garage in Atlanta, Georgia.

Real estate dispositions

The following table details the Company's dispositions for the three months ended March 31, 2021:

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)
Los Angeles, CA 3	MOB	3/11/21	$	26,000	$	(555)	$	25,445	$	6,046	$	509	$	18,890	73,906

1MOB = medical office building

2Includes straight-line rent receivables, leasing commissions and lease inducements.

3Includes two properties sold to a single purchaser in two transactions which occurred on March 5 and March 11, 2021.

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 March 31, 2021 and December 31, 2020:

(Dollars in thousands)	March 31, 2021		December 31, 2020
Balance Sheet data:
Land	$	3,148	$	1,664
Building, improvements and lease intangibles	96,013		27,443
Personal property	56		39
	99,217		29,146
Accumulated depreciation	(40,381)		(10,455)
Real estate assets held for sale, net	58,836		18,691
Operating lease right-of-use assets	3,241		—
Other assets, net	2,501		1,955
Assets held for sale, net	$	64,578	$	20,646
Accounts payable and accrued liabilities	$	588	$	533
Other liabilities	754		683
Liabilities of assets held for sale	$	1,342	$	1,216

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Leases (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Future Minimum Operating Lease Payments Receivable

Future lease payments under the non-cancelable operating leases, excluding any reimbursements, as of March 31, 2021 were as follows:

In thousands	Operating
2021	$	286,175
2022	345,229
2023	298,828
2024	233,601
2025	183,405
2026 and thereafter	459,569
	$	1,806,807

Future Minimum Operating Lease Payments

The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of March 31, 2021 were as follows:

In thousands	OPERATING		FINANCING
2021	$	3,164	$	611
2022	4,932		783
2023	4,971		793
2024	5,027		815
2025	5,068		826
2026 and thereafter	303,574		87,983
Total undiscounted lease payments	326,736		91,811
Discount	(234,815)		(73,089)
Lease liabilities	$	91,921	$	18,722

Future Minimum Financing Lease Payments

The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of March 31, 2021 were as follows:

In thousands	OPERATING		FINANCING
2021	$	3,164	$	611
2022	4,932		783
2023	4,971		793
2024	5,027		815
2025	5,068		826
2026 and thereafter	303,574		87,983
Total undiscounted lease payments	326,736		91,811
Discount	(234,815)		(73,089)
Lease liabilities	$	91,921	$	18,722

Lease Cost

The following table provides details of the Company's total lease expense for the three months ended March 31, 2021 and 2020:

	THREE MONTHS ENDED March 31,
In thousands	2021			2020
Operating lease cost
Operating lease expense	$	1,178		$	1,174
Variable lease expense	896			800
Finance lease cost
Amortization of right-of-use assets	88			70
Interest on lease liabilities	247			237
Total lease expense	$	2,409		$	2,281
Other information
Operating cash flows outflows related to operating leases	$	1,844		$	2,550
Financing cash flows outflows related to financing leases	$	362		$	321
Weighted-average remaining lease term (excluding renewal options) - operating leases	48.4			49.4
Weighted-average remaining lease term (excluding renewal options) -finance leases	64.2			64.9
Weighted-average discount rate - operating leases	5.7		%	5.7		%
Weighted-average discount rate - finance leases	5.4		%	5.4		%

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Notes and Bonds Payable (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of debt

The table below details the Company’s notes and bonds payable. 

	MATURITY DATES	BALANCE AS OF				EFFECTIVE INTEREST RATE as of 3/31/2021
Dollars in thousands		3/31/2021		12/31/2020
$700 million Unsecured Credit Facility	5/23	$	7,000	$	—	1.01	%
$200 million Unsecured Term Loan Facility, net of issuance costs 1	5/24	199,292		199,236		1.96	%
$150 million Unsecured Term Loan due 2026 2	6/26	149,503		149,479		3.13	%
Senior Notes due 2025, net of discount and issuance costs 3	5/25	248,841		248,776		4.08	%
Senior Notes due 2028, net of discount and issuance costs	1/28	296,243		296,123		3.84	%
Senior Notes due 2030, net of discount and issuance costs 4	3/30	296,554		296,468		2.71	%
Senior Notes due 2031, net of discount and issuance costs	3/31	295,037		294,924		2.24	%
Mortgage notes payable, net of discounts and issuance costs and including premiums	11/22-4/27	116,781		117,763		4.07	%
		$	1,609,251	$	1,602,769

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 forward-starting interest rate swaps 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)

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of cash flow hedges included in accumulated other comprehensive income (loss)

As of March 31, 2021, the Company had eight outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

DERIVATIVE INSTRUMENT	NUMBER OF INSTRUMENTS	NOTIONAL AMOUNT in millions
Interest rate swaps	8	$175.0

The table below presents the effect of cash flow hedge accounting on AOCI during the three months ended March 31, 2021 and 2020 related to the Company's outstanding interest rate swaps.

	(GAIN) LOSS RECOGNIZED IN AOCI ON DERIVATIVE three months ended March 31,					LOSS RECLASSIFIED FROM AOCI INTO INCOME three months ended March 31,
In thousands	2021		2020			2021		2020
Interest rate swaps	$	(2,850)	$	9,663	Interest expense	$	946	$	271
Settled treasury hedges	—		4,267		Interest expense	107		15
Settled interest rate swaps	—		—		Interest expense	42		42
	$	(2,850)	$	13,930	Total interest expense	$	1,095	$	328

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 March 31, 2021.

	BALANCE AT MARCH 31, 2021
In thousands	BALANCE SHEET LOCATION	FAIR VALUE
Derivatives designated as hedging instruments
Interest rate swaps	Other liabilities	$	9,378
Total derivatives designated as hedging instruments		$	9,378

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Reconciliation of Common Stock Outstanding

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the three months ended March 31, 2021 and the year ended December 31, 2020:

	MARCH 31, 2021	DECEMBER 31, 2020
Balance, beginning of period	139,487,375	134,706,154
Issuance of common stock	2,057,157	4,637,445
Nonvested share-based awards, net of withheld shares	115,483	143,776
Balance, end of period	141,660,015	139,487,375

At-the-market activity

The following table details the Company's at-the-market activity, including forward transactions:

	WEIGHTED AVERAGE SALE PRICE per share		SHARES PRICED	SHARES SETTLED	SHARES REMAINING TO BE SETTLED	NET PROCEEDS in millions
Balance, beginning of period	$	—	—	—	1,823,259	$	—
1Q 2021	$	30.09	215,532	2,038,791	—	$	62.7
April 2021	$	30.81	4,133,619	—	4,133,619	$	—

Earnings (loss) per share

The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2021 and 2020.

	THREE MONTHS ENDED MARCH 31,
Dollars in thousands, except per share data	2021		2020
Weighted average common shares outstanding
Weighted average common shares outstanding	140,567,352		134,758,335
Non-vested shares	(1,793,598)		(1,722,090)
Weighted average common shares outstanding - basic	138,773,754		133,036,245
Weighted average common shares outstanding - basic	138,773,754		133,036,245
Dilutive effect of forward equity shares	—		—
Dilutive effect of employee stock purchase plan	97,064		113,321
Weighted average common shares outstanding - diluted	138,870,818		133,149,566
Net Income	$	24,022	$	4,315
Dividends paid on nonvested share-based awards	(540)		(517)
Net income applicable to common stockholders	$	23,482	$	3,798
Basic earnings per common share - net income	$	0.17	$	0.03
Diluted earnings per common share - net income	$	0.17	$	0.03

Summary of the activity under the incentive plan

A summary of the activity under the Company's share-based incentive plans for the three months ended March 31, 2021 and 2020 is included in the table below.

	THREE MONTHS ENDED MARCH 31,
	2021	2020
Share-based awards, beginning of period	1,766,061	1,754,066
Granted	165,723	39,344
Vested	(145,413)	(68,649)
Share-based awards, end of period	1,786,371	1,724,761

Summary of employee stock purchase plan activity

A summary of the activity under the Purchase Plan for the three months ended March 31, 2021 and 2020 is included in the table below.

	THREE MONTHS ENDED MARCH 31,
	2021	2020
Outstanding and exercisable, beginning of period	341,647	332,659
Granted	253,200	212,716
Exercised	(15,965)	(11,904)
Forfeited	(19,161)	(22,981)
Expired	(144,422)	(139,794)
Outstanding and exercisable, end of period	415,299	370,696

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2021

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 March 31, 2021 and December 31, 2020.

	March 31, 2021				December 31, 2020
Dollars in millions	CARRYING VALUE		FAIR VALUE		CARRYING VALUE		FAIR VALUE
Notes and bonds payable 1	$	1,609.3	$	1,581.9	$	1,602.8	$	1,645.4

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 (Details) ft² in Millions, $ in Billions	Mar. 31, 2021 USD ($) ft² state building property
Business Overview:
Gross investment amount, total | $	$ 4.6
Number of real estate properties | property	223
Number of states that the company owns real estate in, whole units | state	24
Square footage of owned real estate properties	16.1
Approximate square feet for which Nationwide property management services provided by company	13.1
Joint venture ownership (percent)	50.00%
Number of buildings owned by joint venture with TIAA | building	5

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Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Type of Revenue	$ 1,950	$ 2,163
Parking income
Disaggregation of Revenue [Line Items]
Type of Revenue	1,658	2,051
Management fee income
Disaggregation of Revenue [Line Items]
Type of Revenue	239	78
Miscellaneous
Disaggregation of Revenue [Line Items]
Type of Revenue	$ 53	$ 34

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Real Estate Investments - Acquisitions (Details) - Total real estate acquisitions $ in Thousands					3 Months Ended
	Mar. 03, 2021 USD ($) ft²	Feb. 17, 2021 USD ($) ft²	Feb. 01, 2021 USD ($) ft²	Jan. 17, 2021 USD ($) ft²	Mar. 31, 2021 USD ($) ft² property
Business Acquisition [Line Items]
Purchase price					$ 62,215
Cash consideration					62,217
Real estate					62,554
Other					$ (337)
Square footage | ft²					215,233
Medical office building
Business Acquisition [Line Items]
Number of properties acquired | property					2
Medical office building | San Diego, CA
Business Acquisition [Line Items]
Purchase price				$ 17,150
Cash consideration				17,182
Real estate				17,182
Other				$ 0
Square footage | ft²				22,461
Medical office building | Dallas, TX
Business Acquisition [Line Items]
Purchase price			$ 22,515
Cash consideration			22,299
Real estate			22,641
Other			$ (342)
Square footage | ft²			121,709
Medical office building | Atlanta, GA
Business Acquisition [Line Items]
Purchase price		$ 9,800
Cash consideration		10,027
Real estate		10,073
Other		$ (46)
Square footage | ft²		44,567
Medical office building | Washington, D.C.
Business Acquisition [Line Items]
Purchase price	$ 12,750
Cash consideration	12,709
Real estate	12,658
Other	$ 51
Square footage | ft²	26,496

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Real Estate Investments - Unconsolidated Joint Venture Acquisitions (Details) $ in Thousands		3 Months Ended
	Mar. 30, 2021 USD ($) ft²	Mar. 31, 2021 USD ($) property	Mar. 31, 2020 USD ($)	Apr. 30, 2021 USD ($) ft²	Apr. 29, 2021 USD ($) ft²	Apr. 21, 2021 USD ($) ft²	Apr. 08, 2021 USD ($) ft²
Real Estate [Line Items]
Joint venture ownership (percent)		50.00%
Equity Method Investments [Roll Forward]
Investments in unconsolidated joint ventures, beginning of period 1		$ 73,137
Equity loss recognized during the period 1		(74)	$ (11)
Owner distributions		0	119
Net LLC investments at the end of the period		83,943
Medical office building | Subsequent event
Real Estate [Line Items]
Purchase Price					$ 52,135
Square Footage | ft²					130,083
Medical office building | Denver, CO
Real Estate [Line Items]
Purchase Price	$ 14,375
Cash Consideration	14,056
Real Estate	14,550
Other	$ (494)
Square Footage | ft²	59,359
Joint venture ownership (percent)	50.00%
Medical office building | Colorado Springs, CO | Subsequent event
Real Estate [Line Items]
Purchase Price						$ 7,200
Square Footage | ft²						27,510
Joint venture ownership (percent)						50.00%
Medical office building | Los Angeles, CA | Subsequent event
Real Estate [Line Items]
Purchase Price							$ 31,335
Square Footage | ft²							57,573
Joint venture ownership (percent)							50.00%
Medical office building | San Antonio, TX | Subsequent event
Real Estate [Line Items]
Purchase Price				$ 13,600
Square Footage | ft²				45,000
Joint venture ownership (percent)				50.00%
Parking Garages
Equity Method Investments [Roll Forward]
Investments in unconsolidated joint ventures, beginning of period 1		73,137	8,130
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures in Period		10,880	0
Equity loss recognized during the period 1		(74)	(11)
Net LLC investments at the end of the period		$ 83,943	$ 8,000
Parking Garages | Atlanta, GA
Real Estate [Line Items]
Number of limited liability companies | property		2
Parking Garages | Atlanta, GA | Limited Liability Company One
Real Estate [Line Items]
Ownership interest in LLC (percent)		55.00%
Parking Garages | Atlanta, GA | Limited Liability Company Two
Real Estate [Line Items]
Ownership interest in LLC (percent)		27.00%

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Real Estate Investments - Dispositions (Details) - Real Estate Dispositions $ in Thousands	Mar. 11, 2021 USD ($) ft² property	Mar. 11, 2021 USD ($) ft² transaction	Apr. 12, 2021 USD ($) ft²	Mar. 31, 2021 USD ($)
Los Angeles, CA
Real Estate Dispositions [Line Items]
Sales price	$ 26,000	$ 26,000
Closing adjustments	(555)	(555)
Net proceeds	25,445
Net Real Estate Investment	6,046	6,046
Other (including receivables)	509	$ 509
Gain/(impairment)	$ 18,890
Square footage | ft²	73,906	73,906
Number of properties sold | property	2
Number of transactions | transaction		2
Atlanta, GA
Real Estate Dispositions [Line Items]
Net Real Estate Investment				$ 5,700
Atlanta, GA | Subsequent event
Real Estate Dispositions [Line Items]
Sales price			$ 8,100
Square footage | ft²			19,732

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Real Estate Investments - Assets Held for Sale (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) property	Dec. 31, 2020 USD ($) property
Long Lived Assets Held-for-sale [Line Items]
Number of properties held for sale | property	1
Impairment of real estate assets	$ 834
Balance Sheet Related Disclosures [Abstract]
Land	369,202	$ 362,695
Building, improvements and lease intangibles	4,201,251	4,220,297
Personal property	11,370	11,195
Total real estate properties	4,609,049	4,621,413
Accumulated depreciation	(1,238,044)	(1,239,224)
Total real estate properties, net	3,371,005	3,382,189
Operating lease right-of-use assets	120,890	125,198
Assets held for sale, net	64,578	20,646
Liabilities of assets held for sale	1,342	$ 1,216
Atlanta, GA
Long Lived Assets Held-for-sale [Line Items]
Expected purchase price	8,100
Net investment in property held for sale	5,700
Gadsden, AL
Long Lived Assets Held-for-sale [Line Items]
Expected purchase price	$ 5,500
Number of properties reclassified to held for sale | property	3
Impairment of real estate assets	$ 800
Richmond, VA
Long Lived Assets Held-for-sale [Line Items]
Expected purchase price	52,000
Net investment in property held for sale	$ 29,400
Asset Held-for-sale
Long Lived Assets Held-for-sale [Line Items]
Number of properties held for sale | property	9	4
Disposal Group, Held-for-sale, Not Discontinued Operations
Balance Sheet Related Disclosures [Abstract]
Land	$ 3,148	$ 1,664
Building, improvements and lease intangibles	96,013	27,443
Personal property	56	39
Total real estate properties	99,217	29,146
Accumulated depreciation	(40,381)	(10,455)
Total real estate properties, net	58,836	18,691
Operating lease right-of-use assets	3,241	0
Other assets, net	2,501	1,955
Assets held for sale, net	64,578	20,646
Accounts payable and accrued liabilities	588	533
Other liabilities	754	683
Liabilities of assets held for sale	$ 1,342	$ 1,216

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Leases - Lease Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Leases [Abstract]
Rental income	$ 128,389	$ 122,644

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Leases - Lessor Accounting (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Future Operating Lease Payments Receivable [Abstract]
2021	$ 286,175
2022	345,229
2023	298,828
2024	233,601
2025	183,405
2026 and thereafter	459,569
Total	$ 1,806,807

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Leases - Ground Leases (Details) ft² in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) ft² property lease	Mar. 31, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Number of properties subject to ground leases | property	104
Number of properties held for sale | property	1
Square feet subject to ground leases | ft²	8.6
Number of prepaid ground leases | lease	42
Amortization of prepaid rent | $	$ 0.1	$ 0.2
Number of non-prepaid ground leases | lease	62
Minimum
Lessee, Lease, Description [Line Items]
Ground lease, initial term	40 years
Maximum
Lessee, Lease, Description [Line Items]
Ground lease, initial term	99 years

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Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
OPERATING
2021	$ 3,164
2022	4,932
2023	4,971
2024	5,027
2025	5,068
2026 and thereafter	303,574
Total undiscounted lease payments	326,736
Discount	(234,815)
Lease liabilities	91,921	$ 92,273
FINANCING
2021	611
2022	783
2023	793
2024	815
2025	826
2026 and thereafter	87,983
Total undiscounted lease payments	91,811
Discount	(73,089)
Lease liabilities	$ 18,722	$ 18,837

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Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating lease cost
Operating lease expense	$ 1,178	$ 1,174
Variable lease expense	896	800
Finance lease cost
Amortization of right-of-use assets	88	70
Interest on lease liabilities	247	237
Total lease expense	2,409	2,281
Other information
Operating cash flows outflows related to operating leases	1,844	2,550
Financing cash flows outflows related to financing leases	$ 362	$ 321
Weighted-average remaining lease term (excluding renewal options) - operating leases	48 years 4 months 24 days	49 years 4 months 24 days
Weighted-average remaining lease term (excluding renewal options) -finance leases	64 years 2 months 12 days	64 years 10 months 24 days
Weighted-average discount rate - operating leases	5.70%	5.70%
Weighted-average discount rate - finance leases	5.40%	5.40%

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Notes and Bonds Payable (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Debt Instrument [Line Items]
Notes and bonds payable	$ 1,609,251,000		$ 1,602,769,000
Impact of settlement of forward-starting interest rate swap	(2,850,000)	$ 13,930,000
Line of credit | $700 million Unsecured Credit Facility
Debt Instrument [Line Items]
Notes and bonds payable	$ 7,000,000		0
Effective interest rate	1.01%
Credit facility	$ 700,000,000
Medium-term notes | $200 million unsecured term loan facility, net of issuance costs
Debt Instrument [Line Items]
Notes and bonds payable	$ 199,292,000		199,236,000
Effective interest rate	1.96%
Term-loan facility	$ 200,000,000
Medium-term notes | $150 million unsecured term loan due 2026
Debt Instrument [Line Items]
Notes and bonds payable	$ 149,503,000		149,479,000
Effective interest rate	3.13%
Term-loan facility	$ 150,000,000
Senior notes | Senior notes due 2025, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable	$ 248,841,000		248,776,000
Effective interest rate	4.08%
Senior notes | Senior Notes due 2028, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable	$ 296,243,000		296,123,000
Effective interest rate	3.84%
Senior notes | Senior notes due 2030, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable	$ 296,554,000		296,468,000
Effective interest rate	2.71%
Senior notes | Senior notes due 2031, net of discount and issuance costs
Debt Instrument [Line Items]
Notes and bonds payable	$ 295,037,000		294,924,000
Effective interest rate	2.24%
Mortgages | Mortgage notes payable, net of discounts and issuance costs and including premiums
Debt Instrument [Line Items]
Notes and bonds payable	$ 116,781,000		$ 117,763,000
Effective interest rate	4.07%
Interest rate swaps
Debt Instrument [Line Items]
Impact of settlement of forward-starting interest rate swap	$ (2,850,000)	9,663,000
Interest rate swaps | Medium-term notes | $200 million unsecured term loan facility, net of issuance costs
Debt Instrument [Line Items]
Notional amount	$ 75,000,000.0
Weighted average interest rate (percent)	2.37%
Basis spread on variable rate	100.00%
Interest rate swaps | Medium-term notes | $150 million unsecured term loan due 2026
Debt Instrument [Line Items]
Notional amount	$ 100,000,000.0
Weighted average interest rate (percent)	2.23%
Basis spread on variable rate	160.00%
Interest rate swaps | Senior notes | Senior notes due 2025, net of discount and issuance costs
Debt Instrument [Line Items]
Impact of settlement of forward-starting interest rate swap	$ 1,700,000
Treasury lock
Debt Instrument [Line Items]
Impact of settlement of forward-starting interest rate swap	0	$ 4,267,000
Treasury lock | Senior notes | Senior notes due 2025, net of discount and issuance costs
Debt Instrument [Line Items]
Impact of settlement of forward-starting interest rate swap	$ 4,300,000

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Derivative Financial Instruments - Derivative Instruments Designated as Cash Flow Hedges (Details) $ in Millions	Mar. 31, 2021 USD ($) swapAgreement
Derivative [Line Items]
Derivatives in net liability position	$ 9.8
Active Interest Rate Swap
Derivative [Line Items]
Interest rate cash flow hedge gain (loss) to be reclassified to interest expense during the next 12 months	$ 4.4
Cash flow hedging | Designated as hedging instrument | Interest rate swaps
Derivative [Line Items]
Number of instruments | swapAgreement	8
Notional amount	$ 175.0

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Derivative Financial Instruments - Fair Value of Derivative Instruments on the Balance Sheet (Details) - Designated as hedging instrument - Interest rate swaps $ in Thousands	Mar. 31, 2021 USD ($)
Derivative [Line Items]
Liability derivatives	$ 9,378
Other liabilities
Derivative [Line Items]
Liability derivatives	$ 9,378

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Derivative Financial Instruments - Effect of Cash Flow Hedging on AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Derivative [Line Items]
Loss recognized in AOCI on derivative	$ (2,850)	$ 13,930
(Gain) loss reclassified from AOCI into income	(1,095)	(328)
Interest rate swaps
Derivative [Line Items]
Loss recognized in AOCI on derivative	(2,850)	9,663
Settled treasury hedges
Derivative [Line Items]
Loss recognized in AOCI on derivative	0	4,267
Interest rate swaps
Derivative [Line Items]
Loss recognized in AOCI on derivative	0	0
Total interest expense
Derivative [Line Items]
(Gain) loss reclassified from AOCI into income	1,095	328
Total interest expense | Interest rate swaps
Derivative [Line Items]
(Gain) loss reclassified from AOCI into income	946	271
Total interest expense | Settled treasury hedges
Derivative [Line Items]
(Gain) loss reclassified from AOCI into income	107	15
Total interest expense | Interest rate swaps
Derivative [Line Items]
(Gain) loss reclassified from AOCI into income	$ 42	$ 42

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Commitments and Contingencies - Construction Activity (Details) $ in Thousands	Apr. 30, 2021 ft²	Mar. 31, 2021 USD ($) ft²
Other Commitments [Line Items]
Approximate square feet		16,100,000
Medical office building expansion | Dallas, Texas
Other Commitments [Line Items]
Approximate square feet		217,114
Construction activity, total funding to date | $		$ 400
Medical office building | Memphis, Tennessee
Other Commitments [Line Items]
Approximate square feet		110,883
Construction activity, total funding to date | $		$ 27,100
Medical office building | Seattle, WA | Subsequent event
Other Commitments [Line Items]
Approximate square feet	23,000

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Stockholders' Equity - Reconciliation of beginning and ending common stock outstanding (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Reconciliation of the beginning and ending common stock outstanding
Balance, beginning of period (in shares)	139,487,000
Balance, end of period (in shares)	141,660,000	139,487,000
Common Stock
Reconciliation of the beginning and ending common stock outstanding
Balance, beginning of period (in shares)	139,487,375	134,706,154
Issuance of common stock (in shares)	2,057,157	4,637,445
Nonvested share-based awards, net of withheld shares (in shares)	115,483	143,776
Balance, end of period (in shares)	141,660,015	139,487,375

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Stockholders' Equity - Equity Offering ProgramsEarnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Apr. 30, 2021	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Class of Stock [Line Items]
Net proceeds from issuance of common stock		$ 63,195	$ 7,213
At the market equity offering program
Class of Stock [Line Items]
Shares issued during period, price per share (in dollars per share)		$ 30.09		$ 0
Priced shares sold on a forward basis (in shares)		215,532		0
Settlement of shares sold on a forward basis (in shares)		2,038,791		0
Shares sold on a forward basis remaining to be settled (in shares)		0		1,823,259
Net proceeds from issuance of common stock		$ 62,700		$ 0
Subsequent event | At the market equity offering program
Class of Stock [Line Items]
Shares issued during period, price per share (in dollars per share)	$ 30.81
Priced shares sold on a forward basis (in shares)	4,133,619
Settlement of shares sold on a forward basis (in shares)	0
Shares sold on a forward basis remaining to be settled (in shares)	4,133,619
Net proceeds from issuance of common stock	$ 0

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Stockholders' Equity (Stock Transactions - Narrative) (Details)			3 Months Ended
	May 04, 2021 $ / shares	Feb. 10, 2021 USD ($) executiveOfficer shares	Mar. 31, 2021 $ / shares shares	Mar. 31, 2020 shares	Apr. 30, 2022 USD ($) shares	May 05, 2021 USD ($)	Apr. 30, 2021 shares	Jan. 01, 2021 USD ($)	Dec. 31, 2020 shares	Feb. 14, 2020 USD ($)
Class of Stock [Line Items]
Dividends declared per common share, during the period (in dollars per share) | $ / shares			$ 0.3025
Salary Deferral Plan
Class of Stock [Line Items]
Shares issued though the salary deferral program during period, grant-date fair value | $								$ 600,000
Shares issued during the period (in shares) | shares			21,396
Executive Incentive Program | Non-vested Stock Award
Class of Stock [Line Items]
Granted (in dollars per share) | $		$ 3,800,000
Granted (in shares) | shares		124,648
Award vesting period		5 years
Executive Incentive Program | Executive Officer | Non-vested Stock Award
Class of Stock [Line Items]
Number of executive officers granted awards | executiveOfficer		4
Executive Incentive Program | Senior Vice President | Non-vested Stock Award
Class of Stock [Line Items]
Number of executive officers granted awards | executiveOfficer		5
Executive Incentive Program | First Vice President | Non-vested Stock Award
Class of Stock [Line Items]
Number of executive officers granted awards | executiveOfficer		5
Stock incentive plan
Class of Stock [Line Items]
Granted (in shares) | shares			165,723	39,344
Stock incentive plan | Performance Shares
Class of Stock [Line Items]
Shares issued during the period (in shares) | shares		19,679
Value of performance based awards released | $		$ 600,000
Stock incentive plan | Executive Officer | Performance Shares
Class of Stock [Line Items]
Number of executive officers excluded from award grant | executiveOfficer		4
Stock incentive plan | Senior Vice President | Performance Shares
Class of Stock [Line Items]
Number of executive officers excluded from award grant | executiveOfficer		5
Stock incentive plan | First Vice President | Performance Shares
Class of Stock [Line Items]
Number of executive officers excluded from award grant | executiveOfficer		5
At the market equity offering program
Class of Stock [Line Items]
At-the-market equity offering program, authorized amount | $										$ 500,000,000.0
Shares sold on a forward basis remaining to be settled (in shares) | shares			0						1,823,259
Forecast | At the market equity offering program
Class of Stock [Line Items]
Shares sold on a forward basis remaining to be settled (in shares) | shares					4,100,000
Subsequent event
Class of Stock [Line Items]
At-the-market equity offering program, remaining authorized amount, assuming forward equity contracts settle | $						$ 163,600,000
Dividends declared per common share, during the period (in dollars per share) | $ / shares	$ 0.3025
Subsequent event | At the market equity offering program
Class of Stock [Line Items]
Shares sold on a forward basis remaining to be settled (in shares) | shares							4,133,619
Minimum | Forecast
Class of Stock [Line Items]
Shares sold of a forward basis, remaining expected proceeds | $					$ 120,900,000
Maximum | Forecast
Class of Stock [Line Items]
Shares sold of a forward basis, remaining expected proceeds | $					$ 125,500,000

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Stockholders' Equity - Computation of basic and diluted earnings (loss) per common share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Weighted average Common Shares outstanding
Weighted average common shares outstanding (in shares)	140,567,352	134,758,335
Non-vested shares (in shares)	(1,793,598)	(1,722,090)
Weighted average common shares outstanding - basic (in shares)	138,773,754	133,036,245
Dilutive effect of forward equity shares (in shares)	0	0
Dilutive effect of employee stock purchase plan (in shares)	97,064	113,321
Weighted average common shares outstanding - diluted (in shares)	138,870,818	133,149,566
Net Income	$ 24,022	$ 4,315
Dividends paid on nonvested share-based awards	(540)	(517)
Net income applicable to common stockholders	$ 23,482	$ 3,798
Basic earnings per common share (in dollars per share)	$ 0.17	$ 0.03
Diluted earnings per common share (in dollars per share)	$ 0.17	$ 0.03

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Stockholders' Equity - Summary of activity under stock-based incentive plans (Details) - Stock incentive plan - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Summary of the activity under the incentive plans
Share-based awards, beginning of period (in shares)	1,766,061	1,754,066
Granted (in shares)	165,723	39,344
Vested (in shares)	(145,413)	(68,649)
Share-based awards, end of period (in shares)	1,786,371	1,724,761
Restricted stock
Summary of the activity under the incentive plans
Shares withheld to pay estimated withholding taxes (in shares)	50,240	23,563

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Stockholders' Equity - Summary of activity under Employee Stock Purchase Plan (Details) - Employee stock purchase plan - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Summary of the Employee Stock Purchase Plan activity
Outstanding and exercisable, beginning of period (in shares)	341,647	332,659
Granted (in shares)	253,200	212,716
Exercised (in shares)	(15,965)	(11,904)
Forfeited (in shares)	(19,161)	(22,981)
Expired (in shares)	(144,422)	(139,794)
Outstanding and exercisable, end of period (in shares)	415,299	370,696

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Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
CARRYING VALUE
Derivative [Line Items]
Notes and bonds payable	$ 1,609.3	$ 1,602.8
FAIR VALUE
Derivative [Line Items]
Notes and bonds payable	$ 1,581.9	$ 1,645.4