Healthcare Realty Trust Inc

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 June 30, 2026, the Company had gross investments of approximately $10.3 billion in 501 cons olidated real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property, excluding assets held for sale. In addition, as of June 30, 2026, the Company had a weighted average ownership interest of approximately 30% in 62 real estate properties, excluding assets held for sale, held in unconsolidated joint ventures. See Note 2 below for more details regarding the Company's unconsolidated joint ventures. The Company's consolidated real estate properties are located in 26 states and total approximately 28.9 million square feet. The Company provided leasing and property management services to 92% of its portfolio nationwide as of June 30, 2026.

The Company is structured as an umbrella partnership REIT under which substantially all of its business is conducted through the operating partnership, Healthcare Realty Holdings, L.P.(the “OP”), the day-to-day management of which is exclusively controlled by the Company. As of June 30, 2026, the Company owned 98.8% of the issued and outstanding units of the OP (“OP Units”), with other investors owning the remaining 1.2% of OP Units.

Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to the Company's Condensed Consolidated Financial Statements, are outside the scope of our independent registered public accounting firm’s review.

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. All material intercompany transactions and balances have been eliminated in consolidation.

This interim financial information should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. 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, 2026 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 (“ASC”) Topic 810, Consolidation 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, with any minority interests reflected as non-controlling interests or redeemable non-controlling interests in the accompanying Condensed Consolidated Financial Statements.

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, the disposition of all or a portion of an interest held by the primary beneficiary, or changes in facts and circumstances that impact the power to direct activities of the VIE that most significantly impacts economic performance. 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 an entity 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 entity's activities based upon the terms of the entity's ownership agreements.

The OP is 98.8%owned by the Company. Other holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interests are reflected as equity in the accompanying Condensed Consolidated Balance Sheets. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity. As of June 30, 2026, there were approximately 4.2 million OP Units, or 1.2% of OP Units issued and outstanding, held by non-controlling interest holders. Additionally, the Company is the primary beneficiary of this VIE. Accordingly, the Company consolidates its interests in the OP.

As of June 30, 2026 and December 31, 2025, the Company hadtwo consolidated VIEs, in addition to the OP, consisting of joint venture investments in which the Company is the primary beneficiary of the VIE based on the combination of operational control and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures. Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs, excluding the OP, in the aggregate as of June 30, 2026 and December 31, 2025:

As of June 30, 2026, the Company hadthree unconsolidated VIEs consisting oftwo notes receivable andone joint venture. The Company does not have the power or economic interests to direct the activities of these VIEs on a stand-alone basis, and therefore it was determined that the Company was not the primary beneficiary. As a result, the Company accounts for thetwo notes receivable as amortized cost and the joint venture arrangement under the equity method.

See below for additional information regarding the Company's unconsolidated VIEs.

1 Includes investments inseven properties.

2 The Company provided seller financing and entered into a mortgage loan and a mezzanine loan in connection with a property disposition.

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.

Reclassifications

Certain reclassifications have been made on the Company's Condensed Consolidated Statement of Cash Flows to conform to current year presentation. Previously, the Company's borrowings and repayments on the Company's unsecured credit facility ("Revolving Facility") were presented in a net line in the financing activities on the Company's Condensed Consolidated Statement of Cash Flows. These amounts are now presented as separate lines in the financing activities on the Company's Condensed Consolidated Statement of Cash Flows.

Certain reclassifications have been made on the Company's Condensed Consolidated Statement of Income to conform to current year presentation. Previously, the Company's leasing commission amortization was presented in property operating expense on the Company's Condensed Consolidated Statement of Income. These amounts are now presented in depreciation and amortization on the Company's Condensed Consolidated Statement of Income. This resulted in $5.7 million and $10.8 million being reclassified into depreciation and amortization for the three and six months ended June 30, 2025, respectively.

Segment Reporting

The Company owns, leases, acquires, manages, finances, develops and redevelops outpatient and other healthcare-related properties. The Company is managed asone operating segment, rather than multiple operating segments, for internal reporting purposes and for internal decision-making and discloses its operating results in a single reportable segment. The Company's chief operating decision makers (“CODM”), represented by the Company's Chief Executive Officer, the Chief Financial Officer and the Chief Operating Officer, review financial information and assess the consolidated operations of the Company in order to make strategic decisions such as allocation of capital expenditures and other significant expenses. See Note 9 for additional information on segment reporting.

Redeemable Non-Controlling Interests

The Company accounts for redeemable equity securities in accordance with ASC Topic 480: Accounting for Redeemable Equity Instruments, which requires that equity securities redeemable at the option of the holder, not solely within our control, be classified outside permanent stockholders’ equity. The Company classifies redeemable equity securities as redeemable non-controlling interests in the accompanying Condensed Consolidated Balance Sheets. Accordingly, the Company records the carrying amount at the greater of the initial carrying amount (increased or decreased for the non-controlling interest’s share of net income or loss and distributions) or the redemption value. The Company measures the redemption value and records an adjustment to the carrying value of the equity securities as a component of redeemable non-controlling interest. As of June 30, 2026, the Company had redeemable non-controlling interests of $3.4 million.

Asset Impairment

The Company assesses the potential for impairment of identifiable, definite-lived, intangible assets and long-lived assets, including real estate properties, whenever the occurrence of an event or a change in circumstances indicates that the carrying value might not be fully recoverable. Indicators of impairment may include significant underperformance of an asset relative to historical or expected operating results; significant changes in the Company’s use of assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in a property; or significant negative economic trends or negative industry trends for the Company or its tenants. The Company recognized real estate impairments totaling $42.7 million and$42.8 million, for the three and six months ended June 30, 2026, respectively, and $140.9 million and $151.0 million, for the three and six months ended June 30, 2025, respectively, as a result of the indicators described above. These amounts were determined using level 2 and level 3 fair value techniques and are included in Impairment of real estate properties and credit loss recoveries (reserves) on the Company's Condensed Consolidated Statement of Operations.

The level 3 fair value techniques included using discounted cash flow models, brokerage estimates, letters of intent, and unexecuted purchase and sale agreements, and less estimated closing costs. The determination of fair value using the discounted cash flow model technique requires the use of estimates and assumptions related to revenue and expense growth rates, capitalization rates, discount rates, capital expenditures and working capital levels.

Investments in Leases - Financing Receivables, Net

In accordance with ASC Topic 842: Leases, for transactions in which the Company enters into a contract to acquire an asset and leases it back to the seller (i.e., a sale leaseback transaction), control of the asset is not considered to have transferred when the seller-lessee has a purchase option. As a result, the Company does not recognize the underlying real estate assets but instead recognizes a financial asset in accordance with ASC Topic 310: Receivables. See below for additional information regarding the Company's financing receivables as of June 30, 2026 and December 31, 2025.

In June 2026, the Company amended the California lease with the seller-lessee to terminate the seller-lessee's repurchase option. Upon termination of the repurchase option, the transaction qualified for sale-leaseback accounting. Accordingly, the Company reclassified the remaining carrying amount of the $116.9 million financing receivable to building and improvements on the Company's Condensed Consolidated Balance Sheets.

Real Estate Notes Receivable

Real estate notes receivable consists of mezzanine and other real estate loans, which are generally collateralized by a pledge of the borrower’s ownership interest in the respective real estate owner, a mortgage or deed of trust, and/or corporate guarantees. Real estate notes receivable are intended to be held to maturity and are recorded at amortized cost, net of unamortized loan origination costs and fees and allowance for credit losses. As of June 30, 2026, real estate notes receivable, net, which are included in Other assets on the Company's Condensed Consolidated Balance Sheets, totaled $43.5 million.

1 In June 2026, the loan was amended to mature on December 31, 2027.

2 Outstanding principal and interest due upon maturity.

Loan Activity

In April 2026, the Company entered into a mezzanine loan agreement to provide funding up to $6.3 million for a future development. As of June 30, 2026, no funding has been provided.

In April 2026, the Company received $45.2 million, upon maturity of a mortgage loan.

Allowance for Credit Losses

Pursuant to ASC Topic 326: Financial Instruments - Credit Losses, the Company adopted a policy to evaluate current expected credit losses at the inception of loans qualifying for treatment under ASC Topic 326. The Company utilizes a probability of default method approach for estimating current expected credit losses and evaluates the liquidity and creditworthiness of its borrowers on a quarterly basis to determine whether any updates to the future expected losses recognized upon inception are necessary. The Company’s evaluation considers industry and economic conditions, credit enhancements, liquidity, and other factors. The determination of the credit allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments. The Company evaluates the collectability of loan receivables based on a combination of credit quality indicators, including, but not limited to, payment status, historical loan charge-offs, financial strength of the borrower and guarantors, and nature, extent, and value of the underlying collateral. A loan is considered to have deteriorated credit quality when, based on current information and events, it is probable that the Company will be unable to collect all amounts due as scheduled according to the contractual terms of the loan agreement. For those loans identified as having deteriorated credit quality, the amount of credit loss is determined on an individual basis. Placement on non-accrual status may be required. Consistent with this definition, all loans on non-accrual status are deemed to have deteriorated credit quality. To the extent circumstances improve and the risk of collectability is diminished, the loan may return to income accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance.

The Company's allowance for credit losses was $16.8 million as of December 31, 2025. In the first quarter of 2026, the Company received $1.0 million related to a mortgage loan in which the Company previously reserved the remaining outstanding balance of $16.8 million. The Company no longer has a position in the loan. As of June 30, 2026, the Company's allowance for credit losses was de minimis.

Interest Income

Income from Lease Financing Receivables

The Company recognized the related income fromtwo financing receivables totaling $2.1 million and $4.1 million for the three and six months ended June 30, 2026, respectively, and $2.0 million and $3.9 million for the three and six months ended June 30, 2025, respectively, based on an imputed interest rate over the terms of the applicable lease. As a result, the interest recognized from the financing receivable in any particular period will not equal the cash payments from the lease agreement in that period.

Acquisition costs incurred in connection with entering into the financing receivable are treated as loan origination fees. These costs are classified with the financing receivable and are included in the balance of the net investment. Amortization of these amounts will be recognized as a reduction to interest income over the life of the lease.

Income from Real Estate Notes Receivable

The Company recognized interest income related to real estate notes receivable of $1.2 million and $2.9 million for the three and six months ended June 30, 2026, respectively, and $1.5 million and $3.3 million for the three and six months ended June 30, 2025, respectively. The Company recognizes interest income on an accrual basis unless the Company has determined that collectability of contractual amounts is not reasonably assured, at which point the note is placed on non-accrual status. The Company did not have any loans on non-accrual status as of June 30, 2026.

Revenue from Contracts with Customers (ASC Topic 606)

The Company recognizes certain revenue under the core principle of ASC Topic 606: Revenue from Contracts with Customers ("ASC 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 ASC Topic 606. To achieve the core principle, the Company applies the five-step model specified in the guidance.

Revenue that is accounted for under ASC Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Operations 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:

1 Includes the recovery of certain expenses under the financing receivable as outlined in the management agreement.

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

On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expenses, which will require entities to provide more detailed information in the notes to the financial statements related to certain expense captions on the face of the income statement. The ASU aims to increase transparency and provide investors with more detailed information about the nature of expenses reported on the face of the income statement. The new standard does not change the requirements for the presentation of expenses on the face of the income statement.

Under this ASU, entities are required to disaggregate, in a tabular format, expense captions presented on the face of the income statement — excluding earnings or losses from equity method investments — if they include any of the following expense categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation or depletion. For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those expenses. The new ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the adoption of this ASU on its consolidated financial statements and compliance with these new disclosure requirements will begin with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2027.

On November 25, 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which amends certain aspects of the hedge accounting guidance in ASC 815. The update improves the application of hedge accounting in the following areas; (i) similar risk assessment for cash flow hedges, (ii) hedging interest payments on choose-your-rate debt, (iii) cash flow hedges on non-financial forecasted transactions, (iv) net written options as hedging instruments and (v) provide for additional flexibility in measuring hedge effectiveness.

The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted and applied prospectively. The Company is currently evaluating the impact of the adoption of this ASU may have on its consolidated financial statements.

On December 8, 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, to provide clarity on the current interim reporting requirements and the applicability of ASC 270. The new guidance creates a comprehensive list of interim disclosures required under GAAP and incorporates a disclosure principle that requires disclosures at interim periods when an event or change that has a material effect on an entity has occurred since the last annual reporting period. Some examples that may require disclosure under this new principle include changes in (i) accounting principles or estimates, (ii) status of long-term contracts, (iii) capitalization, such as new borrowings or financing modifications, and (iv) reporting entity resulting from business combinations or disposals.

The amendments are effective for interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the impact of the adoption of this ASU may have on its interim consolidated financial statements.

Note 2. Real Estate Investments

Unconsolidated Joint Ventures

The Company's investment in and income (losses) recognized for the three and six months ended June 30, 2026 and 2025 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below:

1 In the first quarter 2026, the Company contributed $17.7 million towards the acquisition of a property in an existing joint venture.

2 Includes a gain on sale of real estate of $2.5 million in April 2026.

Joint Venture Disposition Activity

On April 27, 2026, an unconsolidated joint venture where the Company owns 50%, sold a property for a total purchase price of $18.7 million.

Subsequent Joint Venture Acquisition Activity

In July 2026, an unconsolidated joint venture where the Company owns 20%, acquiredtwo properties for a total purchase price of $86.1 million.

2026 Acquisition Activity

The following table details the Company's acquisitions for the six months ended June 30, 2026.

1 Represents a condominium unit fully leased by Novant Health under a long-term lease in an existing building, bringing the Company's ownership to 93%.

2026 Disposition Activity

The following table details the Company's dispositions for the six months ended June 30, 2026.

1 Includestwo medical outpatient properties.

Subsequent Disposition Activity

On July 2, 2026, the Company soldtwo land parcels in Dallas, TX for a total purchase price of $5.5 million.

Assets Held for Sale

The Company had 14 properties andthree land parcels classified as assets held for sale as of June 30, 2026, and 18 properties andone land parcel classified as assets held for sale as of December 31, 2025.

The table below reflects the assets and liabilities classified as held for sale as of June 30, 2026 and December 31, 2025:

1 Net real estate assets held for sale include the impact of $41.4 million of impairment charges for the six months ended June 30, 2026.

Note 3. Leases

Lessor Accounting

The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2054. Some leases provide tenants with fixed rent renewal terms while others have 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 have escalators that are predominately based on a stated percentage, while others are based on an index such as the Consumer Price Index ("CPI"). In addition, most of the Company's leases include non-lease 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 non-lease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases, recognized for the three and six months ended June 30, 2026 was $270.6 million and $538.1 million, respectively. Lease income for the Company's operating leases, recognized for the three and six months ended June 30, 2025 was $287.1 million and $575.9 million, respectively.

Future lease payments under the non-cancelable operating leases, excluding any reimbursements andone sales-type lease, as of June 30, 2026, were as follows:

Lessee Accounting

The Company has obligations, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2026, the Company had 169 ground leases associated with properties covering 12.6 million square feet. Some of the Company's 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 stated in the lease or based on CPI. The Company had 61 prepaid ground leases as of June 30, 2026. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.3 million and $0.3 million of the Company's rental expense for each of the three months ended June 30, 2026 and 2025, respectively, and $0.6 million and $0.7 million for each of the six months ended June 30, 2026 and 2025, respectively.

The Company’s future lease payments (primarily for its 108 non-prepaid ground leases), excluding amounts due for assets held for sale, as of June 30, 2026, were as follows:

The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2026 and 2025:

Note 4. Notes and Bonds Payable

The table below details the Company’s notes and bonds payable as of June 30, 2026 and December 31, 2025.

1 Maturity date does not include extension options.

2 Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable.

3 As of June 30, 2026, the Company had $1.2 billion available to be drawn on its $1.5 billion Revolving Facility after Commercial Paper Program borrowings.

4 Commercial Paper Program borrowings are backstopped by the availability under the Revolving Facility. As such, the Company uses the maturity date of the Revolving Facility. As of June 30, 2026, the weighted average remaining maturity of Commercial Paper Program borrowings was approximately 7 days.

5 Company repaid Senior Notes due 2026 in full in May 2026.

6 In March 2026, the Company repaid a mortgage note payable in full totaling $5.2 million. A mortgage note payable with a maturity date of April 2026 was extended to July 2026.

2032 Exchangeable Senior Notes

In May 2026, the OP issued $700 million aggregate principal amount of the 2032 Exchangeable Senior Notes in a private placement, including the initial purchasers’ exercise in full of their option to purchase an additional $100 million aggregate principal amounts of the 2032 Exchangeable Senior Notes. The total proceeds from the issuance of the 2032 Exchangeable Senior Notes, net of initial purchaser discounts and commissions and debt issuance costs, were approximately $680.9 million. The 2032 Exchangeable Senior Notes were issued pursuant to, and are governed by, an indenture (the "Indenture"), dated as of May 7, 2026, between the OP, the Company, as guarantor, and U.S. Bank Trust Company, National Association, as trustee.

The 2032 Exchangeable Senior Notes are senior, unsecured obligations of the OP, guaranteed by the Company, and will mature on January 15, 2032, unless earlier redeemed, repurchased, or exchanged. The 2032 Exchangeable Senior Notes bear interest at a rate of 3.00% per annum, payable semiannually in arrears on January 15 th and July 15 thof each year, commencing January 15 th, 2027.

The 2032 Exchangeable Senior Notes are exchangeable into shares of the Company’s Class A common stock at an initial exchange rate of 43.4660 shares per $1,000 principal amount of the 2032 Exchangeable Senior Notes, which represents an initial exchange price of approximately $23.01 per share, subject to standard anti-dilution adjustments, including distributions in excess of a regular quarterly distribution of $0.24 per share. As of June 30, 2026, there have been no adjustments to the exchange rate. From and after October 15, 2031, the 2032 Exchangeable Senior Notes may be exchanged at any time until the close of business on the second scheduled trading day immediately before the maturity date. Prior to October 15, 2031, the 2032 Exchangeable Senior Notes may only be exchanged under certain circumstances pursuant to the Indenture. None of these circumstances were met as of June 30, 2026. In addition, if the 2032 Exchangeable Senior Notes are exchanged in connection with certain corporate events or because the OP elects to redeem the 2032 Exchangeable Senior Notes as described above, the exchange rate associated with such exchanges may be increased.

On or after January 22, 2030, the OP may redeem for cash all or any portion (subject to certain limitations) of the outstanding 2032 Exchangeable Senior Notes, at its option, if the last reported sale price of the Company’s Class A common stock has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period at a redemption price equal to 100% of the principal amount of the 2032 Exchangeable Senior Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. If the Company or the OP undergoes a fundamental change (as defined in the Indenture), holders of the 2032 Exchangeable Senior Notes may require the OP to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2032 Exchangeable Senior Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

The 2032 Exchangeable Senior Notes include customary covenants and certain events of default after which the notes may be declared immediately due and payable and set forth certain types of bankruptcy or insolvency events of default after which the notes become automatically due and payable.

Upon exchange, the OP will pay cash up to the aggregate principal amount of the 2032 Exchangeable Senior Notes to be exchanged and may, at the OP's election, settle any exchange premium in cash, shares of our Class A common stock, or a combination thereof, based on the applicable exchange rate.

In connection with the issuance of the 2032 Exchangeable Senior Notes, the Company and the OP entered into a registration rights agreement (the “Registration Rights Agreement”) with the representatives of the initial purchasers of the 2032 Exchangeable Senior Notes, pursuant to which the Company and the OP agreed to register the resale of the shares of Class A Common Stock, if any, deliverable upon exchange of the 2032 Exchangeable Senior Notes. If specified conditions under the registration rights agreement are not satisfied, the OP may be required to pay additional interest on the 2032 Exchangeable Senior Notes.

The 2032 Exchangeable Senior Notes are being accounted for as a single liability and the exchange feature was determined to qualify for the derivative scope exception for contracts indexed to and settled in the Company’s own stock. The issuance costs are capitalized as a deduction to the carrying value of the liability and amortized over the contractual life of the 2032 Exchangeable Senior Notes using the effective interest method. As of June 30, 2026, the net carrying amount of the exchangeable debt instrument was approximately $681.4 million, with unamortized debt discount and issuance costs of approximately $18.6 million. For the three and six months ended June 30, 2026, the total interest expense was approximately $3.7 million with coupon interest expense of approximately $3.2 million and the amortization of debt discount and issuance costs of approximately $0.5 million.

2032 Capped Calls

In connection with the issuance of the 2032 Exchangeable Senior Notes, the Company and the OP, entered into privately-negotiated capped call transactions (the "2032 Capped Calls") with certain financial institution counterparties. The 2032 Capped Calls each have an initial strike price of approximately $23.01 per share of the Company's Class A common stock, subject to certain adjustments, which corresponds to the initial exchange price of the 2032 Exchangeable Senior Notes. The 2032 Capped Calls each have an initial cap price of approximately $27.41 per share, subject to certain adjustments under the terms of the 2032 Capped Calls. The 2032 Capped Calls initially cover, subject to anti-dilution adjustments, the number of shares of the Company's Class A common stock initially underlying the 2032 Exchangeable Senior Notes. The 2032 Capped Calls are expected generally to reduce the potential dilution to the Company's Class A common stock upon any exchange of the 2032 Exchangeable Senior Notes and/or offset any potential cash payments that the Company is required to make in excess of the principal amount of the 2032 Exchangeable Senior Notes, as the case may be, with such reduction and/or offset subject to a cap. The 2032 Capped Calls will expire in connection with the maturity of the 2032 Exchangeable Senior Notes, if not earlier exercised or terminated.

A portion of the proceeds from the 2032 Exchangeable Senior Notes was used to pay the premiums of the 2032 Capped Calls of approximately $28.9 million, which was recorded as reduction to stockholders' equity for the Company.

Earnings per Share

The Company applies the if converted method to assess the dilutive impact of the 2032 Exchangeable Senior Notes on earnings per share, reflecting the obligation to settle the principal amount of the 2032 Exchangeable Senior Notes in cash upon exchange. For the three and six months ended June 30, 2026, the average stock price did not exceed the exchange price of the 2032 Exchangeable Senior Notes, so the 2032 Exchangeable Senior Notes did not have an impact on the calculations of diluted EPS.

Delayed Draw Term Loan Facility

On May 15, 2026, the Company and the OP (as borrower) entered into a term loan agreement (“The Term Loan Agreement”) which provides for a $400.0 million senior unsecured delayed draw term loan facility (the “Delayed Draw Term Loan”). The Term Loan Agreement has an accordion feature to increase the Delayed Draw Term Loan or add one or more new tranches of term loans up to an additional aggregate amount not to exceed $100.0 million, subject to the satisfaction of certain conditions and the receipt of additional commitments from existing or new lenders. The scheduled maturity date of the Delayed Draw Term Loan is May 15, 2029. Term loans outstanding under the Delayed Draw Term Loan will accrue interest at an annual rate equal to (a) the applicable margin, plus (b) at the OP’s option, (x) the base rate, (y) a forward-looking term rate based on the secured overnight financing rate (“SOFR”) as administered by the Federal Reserve Bank of New York (“Term SOFR”) or (z) a daily rate determined by reference to SOFR (“Daily Simple SOFR”), subject to a floor of, in the case of base rate,1.00% and in the case of Term SOFR and Daily Simple SOFR,—%. The applicable margin under the Term Loan Facility ranges from—% to 0.550% for base rate loans and 0.675% to 1.550% for Term SOFR or Daily Simple SOFR loans, in each case, based on the non-credit enhanced, senior unsecured long-term debt ratings of the OP. Deferred financing costs incurred as a result of the transaction totaled approximately$4.1 million and are recorded as an other asset on the condensed consolidated balance sheet. As of June 30, 2026, no borrowings were outstanding under the Delayed Draw Term Loan.

Commercial Paper Program

In February 2026, the Company entered into a commercial paper dealer agreement to issue short-term commercial paper notes of up to $600.0 million, with maturities up to 364 days. The program is backstopped by the Revolving Facility. The notes will be issued at par less a discount representing an interest factor, or if interest bearing, at par. As of June 30, 2026, the Company had a principal balance of$276.0 million outstanding.

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 swaps are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, 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.

In February 2026, the Company terminated three interest rate swaps with a total notional value of $400.0 million that were set to mature in 2026 and 2027. The Company entered intotwo new interest rate swaps with a total notional value of $400.0 million, at a strike price of 3.32%, that mature in January 2029. In May 2026, the Company hadfour interest rate swaps with a total notional value of $100.0 million mature.

As of June 30, 2026, the Company hadtwo outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk for a total notional value of $400 million at a rate of 3.32%.

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 and their classification on the Condensed Consolidated Balance Sheet as of June 30, 2026 and December 31, 2025.

Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss)

The table below presents the effect of cash flow hedge accounting on AOCI during the three and six months ended June 30, 2026 and 2025 related to the Company's outstanding interest rate swaps.

The Company estimates that an additional $0.1 million will be reclassified from accumulated other comprehensive loss as a net increase to interest expense over the next 12 months.

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties providing that if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

As of June 30, 2026, the Company did not have any derivatives in a net liability position including accrued interest. As of June 30, 2026, the Company had not posted any collateral related to these agreements and was not in breach of any agreement provisions.

Note 6. Commitments and Contingencies

Legal Proceedings

From time to time, the Company is 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.

Note 7. Stockholders' Equity

Common Stock

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the six months ended June 30, 2026, and the twelve months ended December 31, 2025:

Common Stock Dividends

During the six months ended June 30, 2026, the Company declared and paid common stock dividends totaling$0.48 per share. On July 30, 2026, the Company declared a quarterly common stock dividend in the amount of $0.24 per share payable on August 26, 2026 to stockholders of record on August 11, 2026.

Common Stock Repurchases

On October 28, 2025, the Company's Board of Directors authorized the repurchase of up to $500.0 million of outstanding shares of the Company's common stock, superseding the previous $300.0 million stock repurchase authorization. The stock repurchase authorization expires on October 27, 2026, and the Company may suspend or terminate repurchases at any time without prior notice. Under the Maryland General Corporation Law, outstanding shares of common stock acquired by a corporation become authorized but unissued shares, which may be re-issued.

During the three months ended March 31, 2026, the Company repurchased 5.7 million shares of its common stock at an average price of$17.38 per share for a total of $99.9 million.

During the three months ended June 30, 2026, the Company repurchased 3.8 million shares of its common stock at an average priceof $19.58 per share for a total of $75.0 million. These share repurchases were approved in connection with the 2032 Exchangeable Senior Notes issuance and were not purchased pursuant to any other publicly announced plan or program.

As of June 30, 2026, the Company had $400.1 million remaining under its current share repurchase authorization.

Earnings Per Common Share

The Company uses the two-class method of computing net earnings per common share. The Company's non-vested share-based awards are considered participating securities pursuant to the two-class method.

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2026 and 2025.

The effect of OP Units redeemable for 4,247,299 shares and 4,262,579 sharesof common stock for the three and six months ended June 30, 2026, respectively, were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during those periods.

Stock Incentive Plan

The Company's stock incentive plan (the "Incentive Plan") permits the grant of incentive awards to its employees and directors in any of the following forms: options, stock appreciation rights, restricted stock, restricted or deferred stock units, performance awards, dividend equivalents, or other stock-based awards, including units in the OP.

Equity Incentive Plans

During the six months ended June 30, 2026, the Company made the following equity awards under the Incentive Plan:

Restricted Stock

During the first quarter of 2026, the Company granted non-vested stock awards to its named executive officers and other members of senior management with an aggregate grant date fair value of $13.2 million, which consisted of an aggregate of 771,426 non-vested shares of common stock with vesting periods ranging from three toeight years.

During the second quarter of 2026, the Company granted non-vested stock awards to its independent directors and other members of senior management with an aggregate grant date fair value of $1.1 million, which consisted of an aggregate of 57,474 non-vested shares of common stock with a vesting periods ranging fromone tothree years.

Restricted Stock Units ("RSUs")

In February 2026, the Company granted an aggregate of 45,009 RSUs to named executive officers, subject to athree-year performance period, with an aggregate grant date fair value of $1.1 million.

The RSUs vest based on relative total shareholder return ("TSR") performance and were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of$24.27 for the RSU grants using the following assumptions:

LTIP Series C Units ("LTIP-C units")

In February 2026, the Company granted an aggregate of 940,051 LTIP-C units in the OP to its named executive officers subject to athree-year performance period with an aggregate grant date fair value of $7.5 million.

The LTIP-C units in the OP vest based on relative TSR performance and were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $8.74 for the LTIP-C grant using the following assumptions:

The Company records amortization expense based on the Monte Carlo simulation throughout the performance period.

The following table represents the summary of non-vested share-based awards under the Incentive Plan for the three and six months ended June 30, 2026 and 2025:

1 LTIP-C units in the OP are issued at the maximum number of units of the award and are reflected as such in this table until the performance conditions have been satisfied, and the exact number of awards are determinable.

During the three months ended June 30, 2026 and 2025, the Company withheld 40,823 and 72,853 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested.

The following table represents expected amortization of the Company's non-vested awards issued as of June 30, 2026:

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 (level 1 inputs) due to the short-term maturity of these investments.

•Real estate notes receivable - Real estate notes receivable are recorded in other assets on the Company's Condensed Consolidated Balance Sheets. Fair value is estimated using cash flow analyses, based on current interest rates for similar types of arrangements using level 2 inputs in the hierarchy.

•Borrowings under the revolving facility, commercial paper program, and the term loans - 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 assets/liabilities on the Company's Condensed Consolidated Balance Sheets at fair value. Fair value is estimated by utilizing pricing models, level 2 inputs, which consider forward yield curves and discount rates. See Note 5 for additional information.

The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable as of June 30, 2026, and December 31, 2025:

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

2 Fair value for senior notes includes accrued interest as of June 30, 2026 and December 31, 2025.

3 Does not include values related to the 2032 Exchangeable Senior Notes, which are separately disclosed.

Note 9. Segment Reporting

The Company is a REIT that owns, leases, acquires, invests in joint ventures, manages, finances, develops and redevelops its medical outpatient properties and reports the operating results in the accompanying Condensed Consolidated Financial Statements asone reportable segment. The CODM assesses performance and allocates resources based on consolidated net income (loss) as reported on the Company's Condensed Consolidated Statements of Operations. The Company uses net income (loss) to monitor expected versus actual results to assess the segment's performance. The measure of the Company's reportable segment assets is reported on the Company's Condensed Consolidated Balance Sheets as total assets.

Pursuant to ASU 2023-07, Segment Reporting (Topic 280), public entities are required to disclose more detailed information about significant reportable segment expenses that are regularly provided to the CODM.

The table below details the significant expenses for the three and six months ended June 30, 2026 and 2025.

The following schedule reconciles netloss to segment expenses for the three and six months ended June 30, 2026 and 2025.

1 Other segment expenses are primarily related to administrative costs, travel, legal, technology, and insurance.