Item 8. Financial Statements and Supplementary Data

Healthpeak Properties, Inc.

Index to the Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)			59
Consolidated Balance Sheets—December 31, 2022 and 2021			61
Consolidated Statements of Operations—for the years ended December 31, 2022, 2021, and 2020			62
Consolidated Statements of Comprehensive Income (Loss)—for the years ended December 31, 2022, 2021, and 2020			63
Consolidated Statements of Equity and Redeemable Noncontrolling Interests—for the years ended December 31, 2022, 2021, and 2020			64
Consolidated Statements of Cash Flows—for the years ended December 31, 2022, 2021, and 2020			66
Notes to the Consolidated Financial Statements			67

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Healthpeak Properties, Inc.

Opinion on the Financial Statements

We have audited the accompanying Consolidated Balance Sheets of Healthpeak Properties, Inc. and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related Consolidated Statements of Operations, Comprehensive Income (Loss), Equity and Redeemable Noncontrolling Interests, and Cash Flows, for each of the three years in the period ended December 31, 2022, and the related Notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 8, 2023, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairments — Real Estate — Refer to Notes 2 and 6 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of impairment of real estate involves an assessment of the carrying value of real estate assets and related intangibles (“real estate assets”) when events or changes in circumstances indicate that the carrying value may not be recoverable.

Auditing the Company’s process to evaluate real estate assets for impairment was complex due to the subjectivity in determining whether impairment indicators were present. Additionally, for real estate assets where indicators of impairment were determined to be present, the determination of the future undiscounted cash flows involved significant judgment. In particular, the undiscounted cash flows were forecasted based on significant assumptions such as lease-up periods, lease revenue rates, operating expenses, and revenue and expense growth rates, and included judgments around the intended hold period and terminal capitalization rates.

Given the Company’s evaluation of impairment indicators, forecasted cash flows and sales prices of a long lived asset requires management to make significant estimates and assumptions related to market capitalization rates, market prices per unit, and/or forecasted cash flows, performing audit procedures required a high degree of auditor judgment and an increased extent of effort.

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How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to real estate asset impairment included the following, among others:

• We tested the effectiveness of controls over impairment of real estate assets, including those over identifying impairment indicators, and the determination of forecasted undiscounted cash flows and sales prices for real estate assets.

• We performed an independent search for impairment indicators through the evaluation of several factors including an analysis of industry and market data, a comparison of real estate asset implied capitalization rates to market capitalization rates, and trends in financial performance.

• For real estate assets where indicators of impairment were determined to be present, we subjected a sample of undiscounted cash flow models to testing by (1) evaluating the source information used by management, (2) testing the mathematical accuracy of the undiscounted cash flow models, (3) evaluating management’s intended hold period, and (4) performing an independent recoverability test based on market data.

/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California

February 8, 2023

We have served as the Company’s auditor since 2010.

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Healthpeak Properties, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

			December 31,
			2022						2021
ASSETS
Real estate:
Buildings and improvements			$	12,784,078					$	12,025,271
Development costs and construction in progress			760,355						877,423
Land			2,667,188						2,603,964
Accumulated depreciation and amortization			(3,188,138)						(2,839,229)
Net real estate			13,023,483						12,667,429
Net investment in direct financing leases			—						44,706
Loans receivable, net of reserves of $8,280 and $1,813			374,832						415,811
Investments in and advances to unconsolidated joint ventures			706,677						403,634
Accounts receivable, net of allowance of $2,399 and $1,870			53,436						48,691
Cash and cash equivalents			72,032						158,287
Restricted cash			54,802						53,454
Intangible assets, net			418,061						519,760
Assets held for sale and discontinued operations, net			49,866						37,190
Right-of-use asset, net			237,318						233,942
Other assets, net			780,722						674,615
Total assets			$	15,771,229					$	15,257,519
LIABILITIES AND EQUITY
Bank line of credit and commercial paper			$	995,606					$	1,165,975
Term loans			495,957						—
Senior unsecured notes			4,659,451						4,651,933
Mortgage debt			346,599						352,081
Intangible liabilities, net			156,193						177,232
Liabilities related to assets held for sale and discontinued operations, net			4,070						15,056
Lease liability			208,515						204,547
Accounts payable, accrued liabilities, and other liabilities			772,485						755,384
Deferred revenue			844,076						789,207
Total liabilities			8,482,952						8,111,415
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests			105,679						87,344
Common stock, $1.00 par value: 750,000,000 shares authorized; 546,641,973 and 539,096,879 shares issued and outstanding			546,642						539,097
Additional paid-in capital			10,349,614						10,100,294
Cumulative dividends in excess of earnings			(4,269,689)						(4,120,774)
Accumulated other comprehensive income (loss)			28,134						(3,147)
Total stockholders’ equity			6,654,701						6,515,470
Joint venture partners			327,721						342,234
Non-managing member unitholders			200,176						201,056
Total noncontrolling interests			527,897						543,290
Total equity			7,182,598						7,058,760
Total liabilities and equity			$	15,771,229					$	15,257,519

See accompanying Notes to the Consolidated Financial Statements.

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Healthpeak Properties, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

			Year Ended December 31,
			2022						2021						2020
Revenues:
Rental and related revenues			$	1,541,775					$	1,378,384					$	1,182,108
Resident fees and services			494,935						471,325						436,494
Income from direct financing leases			1,168						8,702						9,720
Interest income			23,300						37,773						16,553
Total revenues			2,061,178						1,896,184						1,644,875
Costs and expenses:
Interest expense			172,944						157,980						218,336
Depreciation and amortization			710,569						684,286						553,949
Operating			862,991						773,279						782,541
General and administrative			131,033						98,303						93,237
Transaction costs			4,853						1,841						18,342
Impairments and loan loss reserves (recoveries), net			7,004						23,160						42,909
Total costs and expenses			1,889,394						1,738,849						1,709,314
Other income (expense):
Gain (loss) on sales of real estate, net			9,078						190,590						90,350
Gain (loss) on debt extinguishments			—						(225,824)						(42,912)
Other income (expense), net			326,268						6,266						234,684
Total other income (expense), net			335,346						(28,968)						282,122
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures			507,130						128,367						217,683
Income tax benefit (expense)			4,425						3,261						9,423
Equity income (loss) from unconsolidated joint ventures			1,985						6,100						(66,599)
Income (loss) from continuing operations			513,540						137,728						160,507
Income (loss) from discontinued operations			2,884						388,202						267,746
Net income (loss)			516,424						525,930						428,253
Noncontrolling interests’ share in continuing operations			(15,975)						(17,851)						(14,394)
Noncontrolling interests’ share in discontinued operations			—						(2,539)						(296)
Net income (loss) attributable to Healthpeak Properties, Inc.			500,449						505,540						413,563
Participating securities’ share in earnings			(2,657)						(3,269)						(2,416)
Net income (loss) applicable to common shares			$	497,792					$	502,271					$	411,147
Basic earnings (loss) per common share:
Continuing operations			$	0.92					$	0.22					$	0.27
Discontinued operations			0.00						0.71						0.50
Net income (loss) applicable to common shares			$	0.92					$	0.93					$	0.77
Diluted earnings (loss) per common share:
Continuing operations			$	0.92					$	0.22					$	0.27
Discontinued operations			0.00						0.71						0.50
Net income (loss) applicable to common shares			$	0.92					$	0.93					$	0.77
Weighted average shares outstanding:
Basic			538,809						538,930						530,555
Diluted			539,147						539,241						531,056

See accompanying Notes to the Consolidated Financial Statements.

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Healthpeak Properties, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

			Year Ended December 31,
			2022						2021						2020
Net income (loss)			$	516,424					$	525,930					$	428,253
Other comprehensive income (loss):
Net unrealized gains (losses) on derivatives			30,145						332						(583)
Change in Supplemental Executive Retirement Plan obligation and other			1,136						457						(258)
Reclassification adjustment realized in net income (loss)			—						(251)						13
Total other comprehensive income (loss)			31,281						538						(828)
Total comprehensive income (loss)			547,705						526,468						427,425
Total comprehensive (income) loss attributable to noncontrolling interests’ share in continuing operations			(15,975)						(17,851)						(14,394)
Total comprehensive (income) loss attributable to noncontrolling interests’ share in discontinued operations			—						(2,539)						(296)
Total comprehensive income (loss) attributable to Healthpeak Properties, Inc.			$	531,730					$	506,078					$	412,735

See accompanying Notes to the Consolidated Financial Statements.

Healthpeak Properties, Inc.

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

(In thousands, except per share data)

			Common Stock
			Shares						Amount						Additional Paid-In Capital						Cumulative Dividends In Excess Of Earnings						Accumulated Other Comprehensive Income (Loss)						Total Stockholders’ Equity						Total Noncontrolling Interests						Total Equity						Redeemable Noncontrolling Interests
December 31, 2019			505,222						$	505,222					$	9,175,277					$	(3,601,199)					$	(2,857)					$	6,076,443					$	582,416					$	6,658,859					$	11,106
Impact of adoption of ASU No. 2016-13(1)			—						—						—						(1,524)						—						(1,524)						—						(1,524)						—
January 1, 2020			505,222						$	505,222					$	9,175,277					$	(3,602,723)					$	(2,857)					$	6,074,919					$	582,416					$	6,657,335					$	11,106
Net income (loss)			—						—						—						413,563						—						413,563						14,690						428,253						—
Other comprehensive income (loss)			—						—						—						—						(828)						(828)						—						(828)						—
Issuance of common stock, net			33,307						33,307						1,033,764						—						—						1,067,071						—						1,067,071						—
Conversion of DownREIT units to common stock			120						120						3,957						—						—						4,077						(4,077)						—						—
Repurchase of common stock			(298)						(298)						(10,231)						—						—						(10,529)						—						(10,529)						—
Exercise of stock options			54						54						1,752						—						—						1,806						—						1,806						—
Amortization of stock-based compensation			—						—						20,534						—						—						20,534						—						20,534						—
Common dividends ($1.48 per share)			—						—						—						(787,072)						—						(787,072)						—						(787,072)						—
Distributions to noncontrolling interests			—						—						—						—						—						—						(36,994)						(36,994)						(160)
Contributions from noncontrolling interests			—						—						—						—						—						—						—						—						443
Purchase of noncontrolling interests			—						—						(3,811)						—						—						(3,811)						192						(3,619)						—
Adjustments to redemption value of redeemable noncontrolling interests			—						—						(46,007)						—						—						(46,007)						—						(46,007)						46,007
December 31, 2020			538,405						$	538,405					$	10,175,235					$	(3,976,232)					$	(3,685)					$	6,733,723					$	556,227					$	7,289,950					$	57,396
Net income (loss)			—						—						—						505,540						—						505,540						20,346						525,886						44
Other comprehensive income (loss)			—						—						—						—						538						538						—						538						—
Issuance of common stock, net			1,005						1,005						740						—						—						1,745						—						1,745						—
Conversion of DownREIT units to common stock			8						8						193						—						—						201						(201)						—						—
Repurchase of common stock			(418)						(418)						(12,423)						—						—						(12,841)						—						(12,841)						—
Exercise of stock options			97						97						3,194						—						—						3,291						—						3,291						—
Amortization of stock-based compensation			—						—						22,851						—						—						22,851						—						22,851						—
Common dividends ($1.20 per share)			—						—						—						(650,082)						—						(650,082)						—						(650,082)						—
Distributions to noncontrolling interests			—						—						—						—						—						—						(33,017)						(33,017)						(162)
Purchase of noncontrolling interests			—						—						(5)						—						—						(5)						(65)						(70)						(60,065)
Contributions from noncontrolling interests			—						—						—						—						—						—						—						—						640
Adjustments to redemption value of redeemable noncontrolling interests			—						—						(89,491)						—						—						(89,491)						—						(89,491)						89,491
December 31, 2021			539,097						$	539,097					$	10,100,294					$	(4,120,774)					$	(3,147)					$	6,515,470					$	543,290					$	7,058,760					$	87,344

Healthpeak Properties, Inc.

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS (CONTINUED)

(In thousands, except per share data)

			Common Stock
			Shares						Amount						Additional Paid-In Capital						Cumulative Dividends In Excess Of Earnings						Accumulated Other Comprehensive Income (Loss)						Total Stockholders’ Equity						Total Noncontrolling Interests						Total Equity						Redeemable Noncontrolling Interests
December 31, 2021			539,097						$	539,097					$	10,100,294					$	(4,120,774)					$	(3,147)					$	6,515,470					$	543,290					$	7,058,760					$	87,344
Net income (loss)			—						—						—						500,449						—						500,449						15,876						516,325						99
Other comprehensive income (loss)			—						—						—						—						31,281						31,281						—						31,281						—
Issuance of common stock, net			9,936						9,936						299,481						—						—						309,417						—						309,417						—
Conversion of DownREIT units to common stock			27						27						853						—						—						880						(880)						—						—
Repurchase of common stock			(2,418)						(2,418)						(65,420)						—						—						(67,838)						—						(67,838)						—
Amortization of stock-based compensation			—						—						31,412						—						—						31,412						—						31,412						—
Common dividends ($1.20 per share)			—						—						—						(649,364)						—						(649,364)						—						(649,364)						—
Distributions to noncontrolling interests			—						—						—						—						—						—						(30,389)						(30,389)						(160)
Contributions from noncontrolling interests			—						—						—						—						—						—						—						—						1,390
Adjustments to redemption value of redeemable noncontrolling interests			—						—						(17,006)						—						—						(17,006)						—						(17,006)						17,006
December 31, 2022			546,642						$	546,642					$	10,349,614					$	(4,269,689)					$	28,134					$	6,654,701					$	527,897					$	7,182,598					$	105,679

_______________________________________

(1)On January 1, 2020, the Company adopted a series of Accounting Standards Updates (“ASUs”) related to accounting for credit losses and recognized the cumulative-effect of adoption to beginning retained earnings. Refer to Note 2 for a detailed impact of adoption.

See accompanying Notes to the Consolidated Financial Statements.

Healthpeak Properties, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

			Year Ended December 31,
			2022						2021						2020
Cash flows from operating activities:
Net income (loss)			$	516,424					$	525,930					$	428,253
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of real estate, in-place lease, and other intangibles			710,569						684,286						697,143
Stock-based compensation amortization expense			26,456						18,202						17,368
Amortization of deferred financing costs			10,881						9,216						10,157
Straight-line rents			(49,183)						(31,188)						(24,532)
Amortization of nonrefundable entrance fees and above/below market lease intangibles			(102,747)						(94,362)						(81,914)
Equity loss (income) from unconsolidated joint ventures			(2,049)						(11,235)						67,787
Distributions of earnings from unconsolidated joint ventures			943						4,976						12,294
Loss (gain) on sale of real estate under direct financing leases			(22,693)						—						(41,670)
Deferred income tax expense (benefit)			(6,001)						(5,792)						(14,573)
Impairments and loan loss reserves (recoveries), net			7,004						55,896						244,253
Loss (gain) on debt extinguishments			—						225,824						42,912
Loss (gain) on sales of real estate, net			(10,422)						(605,311)						(550,494)
Loss (gain) upon change of control, net			(311,438)						(1,042)						(159,973)
Casualty-related loss (recoveries), net			7,168						1,632						469
Other non-cash items			6,489						(8,178)						2,175
Changes in:
Decrease (increase) in accounts receivable and other assets, net			(17,433)						18,626						15,281
Increase (decrease) in accounts payable, accrued liabilities, and deferred revenue			136,293						7,768						93,495
Net cash provided by (used in) operating activities			900,261						795,248						758,431
Cash flows from investing activities:
Acquisitions of real estate			(178,133)						(1,483,026)						(1,170,651)
Development, redevelopment, and other major improvements of real estate			(861,636)						(610,555)						(791,566)
Leasing costs, tenant improvements, and recurring capital expenditures			(108,510)						(111,480)						(94,121)
Proceeds from sales of real estate, net			47,885						2,399,120						1,304,375
Proceeds from the South San Francisco JVs transaction, net			125,985						—						—
Acquisition of CCRC Portfolio			—						—						(394,177)
Contributions to unconsolidated joint ventures			(21,143)						(25,260)						(39,118)
Distributions in excess of earnings from unconsolidated joint ventures			12,518						37,640						18,555
Proceeds from insurance recovery			1,450						—						1,802
Proceeds from sales/principal repayments on loans receivable and direct financing leases			115,988						342,420						202,763
Investments in loans receivable and other			(10,747)						(17,827)						(45,562)
Net cash provided by (used in) investing activities			(876,343)						531,032						(1,007,700)
Cash flows from financing activities:
Borrowings under bank line of credit and commercial paper			15,882,153						16,821,450						4,742,600
Repayments under bank line of credit and commercial paper			(16,052,522)						(15,785,065)						(4,706,010)
Issuances and borrowings of term loans, senior unsecured notes, and mortgage debt			500,000						1,088,537						594,750
Repayments and repurchases of term loans, senior unsecured notes, and mortgage debt			(5,048)						(2,425,936)						(568,343)
Payments for debt extinguishment and deferred financing costs			(4,171)						(236,942)						(47,210)
Issuance of common stock and exercise of options, net of offering costs			308,100						5,036						1,068,877
Repurchase of common stock			(67,838)						(12,841)						(10,529)
Dividends paid on common stock			(648,047)						(650,082)						(787,072)
Distributions to and purchase of noncontrolling interests			(30,549)						(93,314)						(40,613)
Contributions from and issuance of noncontrolling interests			1,390						640						—
Net cash provided by (used in) financing activities			(116,532)						(1,288,517)						246,450
Effect of foreign exchanges on cash, cash equivalents and restricted cash			—						—						(153)
Net increase (decrease) in cash, cash equivalents and restricted cash			(92,614)						37,763						(2,972)
Cash, cash equivalents and restricted cash, beginning of year			219,448						181,685						184,657
Cash, cash equivalents and restricted cash, end of year			$	126,834					$	219,448					$	181,685

See accompanying Notes to the Consolidated Financial Statements.

Healthpeak Properties, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. Business

Overview

Healthpeak Properties, Inc., a Standard & Poor’s 500 company, is a Maryland corporation that is organized to qualify as a real estate investment trust (“REIT”) that, together with its consolidated entities (collectively, “Healthpeak” or the “Company”), invests primarily in real estate serving the healthcare industry in the United States (“U.S.”). Healthpeak® acquires, develops, owns, leases, and manages healthcare real estate. The Company’s diverse portfolio is comprised of investments in the following reportable healthcare segments: (i) life science; (ii) medical office; and (iii) continuing care retirement community (“CCRC”).

The Company’s corporate headquarters are in Denver, Colorado, and it has additional offices in California, Tennessee, and Massachusetts.

UPREIT Reorganization

On February 7, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with New Healthpeak, Inc., a Maryland corporation (“New Healthpeak”) and its wholly owned subsidiary, and Healthpeak Merger Sub, Inc., a Maryland corporation (“Merger Sub”) that is a wholly owned subsidiary of New Healthpeak. The purpose of the transactions contemplated by the Merger Agreement is for the Company to implement a corporate reorganization into a new holding company structure commonly referred to as an Umbrella Partnership Real Estate Investment Trust, or UPREIT (the “Reorganization”).

Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of New Healthpeak (the “Merger”). The Merger is expected to be effective as of February 10, 2023 (the “Effective Time”). As part of the Merger, the Company’s name will change to Healthpeak Properties Interim, Inc., and, effective immediately after the Effective Time, New Healthpeak’s name will be changed to Healthpeak Properties, Inc. The Merger is expected to be conducted in accordance with Section 3-106.2 of the Maryland General Corporation Law. Accordingly, the Merger will not require the approval of the Company’s stockholders, and the Merger will not give rise to statutory dissenters’ rights.

In connection with the Reorganization and immediately following the Merger, the Company will convert from a Maryland corporation to a Maryland limited liability company named Healthpeak OP, LLC (“Healthpeak OP”).

Following the Merger, the business, management and board of directors of New Healthpeak will be identical to the business, management and board of directors of the company immediately before the Merger, except that the business of the company is expected to be conducted exclusively through Healthpeak OP. The consolidated assets and liabilities of New Healthpeak immediately following the Merger will be identical to the consolidated assets and liabilities of the Company immediately prior to the Merger. New Healthpeak will not hold any assets directly other than its ownership interest in Healthpeak OP and certain de minimis assets that may be held for certain administrative functions. None of the properties owned by the Company or its subsidiaries or any interests therein will be transferred as part of the Reorganization. All material indebtedness of the Company immediately prior to the Merger will remain the indebtedness of Healthpeak OP after the Merger.

NOTE 2. Summary of Significant Accounting Policies

Use of Estimates

Management is required to make estimates and assumptions in the preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”). These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management’s estimates.

Basis of Presentation

The consolidated financial statements include the accounts of Healthpeak Properties, Inc., its wholly-owned subsidiaries, joint ventures (“JVs”), and variable interest entities (“VIEs”) that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation.

The Company is required to continually evaluate its VIE relationships and consolidate these entities when it is determined to be the primary beneficiary of their operations. A VIE is broadly defined as an entity where either: (i) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support, (ii) substantially all of an entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights, or (iii) the equity investors as a group lack any of the following: (a) the power through voting or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of an entity, or (c) the right to receive the expected residual returns of an entity. Criterion (iii) above is generally applied to limited partnerships and similarly structured entities by assessing whether a simple majority of the limited partners hold substantive rights to participate in the significant decisions of the entity or have the ability to remove the decision maker or liquidate the entity without cause. If neither of those criteria are met, the entity is a VIE.

The designation of an entity as a VIE is reassessed upon certain events, including, but not limited to: (i) a change to the contractual arrangements of the entity or in the ability of a party to exercise its participation or kick-out rights, (ii) a change to the capitalization structure of the entity, or (iii) acquisitions or sales of interests that constitute a change in control.

A variable interest holder is considered to be the primary beneficiary of a VIE if it has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The Company qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE. Consideration of various factors include, but is not limited to, which activities most significantly impact the entity’s economic performance and the ability to direct those activities, its form of ownership interest, its representation on the VIE’s governing body, the size and seniority of its investment, its ability and the rights of other investors to participate in policy making decisions, its ability to manage its ownership interest relative to the other interest holders, and its ability to replace the VIE manager and/or liquidate the entity.

For its investments in joint ventures that are not considered to be VIEs, the Company evaluates the type of ownership rights held by the limited partner(s) that may preclude consolidation by the majority interest holder. The assessment of limited partners’ rights and their impact on the control of a joint venture should be made at inception of the joint venture and continually reassessed.

Revenue Recognition

Lease Classification

The Company classifies a lease as an operating lease if none of the following criteria are met: (i) transfer of ownership to the lessee by the end of the lease term, (ii) lessee has a purchase option during or at the end of the lease term that it is reasonably certain to exercise, (iii) the lease term is for the major part of the remaining economic life of the underlying asset, (iv) the present value of future minimum lease payments is equal to substantially all of the fair value of the underlying asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term.

Rental and Related Revenues

The Company recognizes rental revenue from its life science and medical office properties in accordance with Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”). The Company commences recognition of rental revenue for operating lease arrangements when the tenant has taken possession or controls the physical use of a leased asset. The tenant is not considered to have taken physical possession or have control of the leased asset until the Company-owned tenant improvements are substantially complete. If a lease arrangement provides for tenant improvements, the Company determines whether the tenant improvements are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, any tenant improvements funded by the tenant are treated as lease payments which are deferred and amortized into income over the lease term. When the tenant is the owner of the tenant improvements, any tenant improvement allowance that is funded by the Company is treated as a lease incentive and amortized as a reduction of revenue over the lease term.

Ownership of tenant improvements is determined based on various factors including, but not limited to, the following criteria:

• lease stipulations of how and on what a tenant improvement allowance may be spent;

• which party to the arrangement retains legal title to the tenant improvements upon lease expiration;

• whether the tenant improvements are unique to the tenant or general purpose in nature;

• if the tenant improvements are expected to have significant residual value at the end of the lease term;

• the responsible party for construction cost overruns; and

• which party constructs or directs the construction of the improvements.

Certain leases provide for additional rents that are contingent upon a percentage of the facility’s revenue in excess of specified base amounts or other thresholds. Such revenue is recognized when actual results reported by the tenant or estimates of tenant results, exceed the base amount or other thresholds, and only after any contingency has been removed (when the related thresholds are achieved). This may result in the recognition of rental revenue in periods subsequent to when such payments are received.

Tenant recoveries subject to operating leases generally relate to the reimbursement of real estate taxes, insurance, and repair and maintenance expense, and are recognized as both revenue (in rental and related revenues) and expense (in operating expenses) in the period the expense is incurred as the Company is the party paying the service provider. Rental and related revenues from other variable payments are recognized when the associated contingencies are removed. In accordance with ASC 842, the Company accounts for lease and nonlease components as a single lease component for the purpose of revenue recognition and disclosure.

For operating leases with minimum scheduled rent increases, the Company recognizes income on a straight line basis over the lease term when collectibility of future minimum lease payments is probable. Recognizing rental income on a straight line basis results in a difference in the timing of revenue amounts from what is contractually due from tenants. If the Company determines that collectibility of future minimum lease payments is not probable, the straight-line rent receivable balance is written off and recognized as a decrease in revenue in that period and future revenue recognition is limited to amounts contractually owed and paid. If it is no longer probable that substantially all future minimum lease payments under operating leases will be received, the accounts receivable and straight-line rent receivable balance is written off and recognized as a decrease in revenue in that period.

The Company’s operating leases generally contain options to extend lease terms at prevailing market rates at the time of expiration. Certain operating leases contain early termination options that require advance notice and payment of a penalty, which in most cases is substantial enough to be deemed economically disadvantageous by a tenant to exercise.

Resident Fees and Services

The Company recognizes resident fee and service revenue from its Senior Housing Operating Property (“SHOP”) portfolios and CCRC properties in accordance with ASC 606, Revenue from Contracts with Customers. Resident fee revenue is recorded when services are rendered and includes resident room and care charges, community fees, and other resident charges. Residency agreements for SHOP and CCRC facilities are generally for a term of 30 days to one year, with resident fees billed monthly, in advance. Revenue for certain care related services is recognized as services are provided and is billed monthly in arrears.

Certain of the Company’s CCRCs are operated as entrance fee communities, which typically require a resident to pay an upfront entrance fee that includes both a refundable portion and non-refundable portion. When the Company receives a nonrefundable entrance fee, it is recorded in deferred revenue in the Consolidated Balance Sheets and amortized into revenue over the estimated stay of the resident. The Company utilizes third-party actuarial experts in its determination of the estimated stay of residents.

Income from Direct Financing Leases

The Company utilizes the direct finance method of accounting to record direct financing lease (“DFL”) income. For a lease accounted for as a DFL, the net investment in the DFL represents receivables for the sum of future minimum lease payments and the estimated residual value of the leased property, less the unamortized unearned income. Unearned income is deferred and amortized to income over the lease term to provide a constant yield when collectibility of the lease payments is reasonably assured. During the first quarter of 2022, the Company sold its remaining hospital under a DFL.

Interest Income

Loans receivable are classified as held-for-investment based on management’s intent and ability to hold the loans for the foreseeable future or to maturity. Loans held-for-investment are carried at amortized cost and reduced by a valuation allowance for estimated credit losses, as necessary. When collectibility of the future payments is reasonably assured, the Company utilizes the interest method on a loan-by-loan basis to recognize interest income on its loans, which includes the amortization of discounts and premiums as well as loan fees paid and received.

Gain (loss) on sales of real estate, net

The Company recognizes a gain (loss) on sale of real estate when the criteria for an asset to be derecognized are met, which include when: (i) a contract exists, (ii) the buyer obtains control of the asset, and (iii) it is probable that the Company will receive substantially all of the consideration to which it is entitled. These criteria are generally satisfied at the time of sale.

Government Grant Income

On March 27, 2020, the federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide financial aid to individuals, businesses, and state and local governments. During the years ended December 31, 2022, 2021, and 2020, the Company received government grants under the CARES Act primarily to cover increased expenses and lost revenue during the pandemic caused by the coronavirus disease (“Covid”). Grant income is recognized to the extent that qualifying expenses and lost revenues exceed grants received and the Company will comply with all conditions attached to the grant. As of December 31, 2022, the amount of qualifying expenditures and lost revenue exceeded grant income recognized and the Company believes it has complied and will continue to comply with all grant conditions. In the event of non-compliance, all such amounts received are subject to recapture.

The following table summarizes information related to government grant income received and recognized by the Company (in thousands):

									Year Ended December 31,
															2022						2021						2020
Government grant income recorded in other income (expense), net															$	6,765					$	1,412					$	16,198
Government grant income recorded in equity income (loss) from unconsolidated joint ventures															878						1,749						1,279
Government grant income recorded in income (loss) from discontinued operations															217						3,669						15,436
Total government grants received															$	7,860					$	6,830					$	32,913

Credit Losses

The Company evaluates the liquidity and creditworthiness of its occupants, operators, and borrowers on a monthly and quarterly basis. The Company’s evaluation considers payment history and current credit status, industry and economic conditions, individual and portfolio property performance, credit enhancements, liquidity, and other factors. The Company’s occupants, operators, and borrowers furnish property, portfolio, and guarantor/operator-level financial statements, among other information, on a monthly or quarterly basis; the Company utilizes this financial information to calculate the lease or debt service coverages that it uses as a primary credit quality indicator. Lease and debt service coverage information is evaluated together with other property, portfolio, and operator performance information, including revenue, expense, net operating income, occupancy, rental rate, reimbursement trends, capital expenditures, and EBITDA (defined as earnings before interest, tax, and depreciation and amortization), along with other liquidity measures. The Company evaluates, on a monthly basis or immediately upon a significant change in circumstance, its occupants’, operators’, and borrowers’ ability to service their obligations with the Company.

In connection with the Company’s quarterly review process or upon the occurrence of a significant event, loans receivable and DFLs (collectively, “finance receivables”), are reviewed and assigned an internal rating of Performing, Watch List, or Workout. Finance receivables that are deemed Performing meet all present contractual obligations, and collection and timing, of all amounts owed is reasonably assured. Watch List finance receivables are defined as finance receivables that do not meet the definition of Performing or Workout. Workout finance receivables are defined as finance receivables in which the Company has determined, based on current information and events, that: (i) it is probable it will be unable to collect all amounts due according to the contractual terms of the agreement, (ii) the tenant, operator, or borrower is delinquent on making payments under the contractual terms of the agreement, and (iii) the Company has commenced action or anticipates pursuing action in the near term to seek recovery of its investment.

Finance receivables are placed on nonaccrual status when management determines that the collectibility of contractual amounts is not reasonably assured (the asset will have an internal rating of either Watch List or Workout). Further, the Company performs a credit analysis to support the tenant’s, operator’s, borrower’s, and/or guarantor’s repayment capacity and the underlying collateral values. The Company uses the cash basis method of accounting for finance receivables placed on nonaccrual status unless one of the following conditions exist whereby it utilizes the cost recovery method of accounting if: (i) the Company determines that it is probable that it will only recover the recorded investment in the finance receivable, net of associated allowances or charge-offs (if any), or (ii) the Company cannot reasonably estimate the amount of an impaired finance receivable. For cash basis method of accounting, the Company applies payments received, excluding principal paydowns, to interest income so long as that amount does not exceed the amount that would have been earned under the original contractual terms. For cost recovery method of accounting, any payment received is applied to reduce the recorded investment. Generally, the Company returns a finance receivable to accrual status when all delinquent payments become current under the terms of the loan or lease agreements and collectibility of the remaining contractual loan or lease payments is reasonably assured.

At inception of a finance receivable, the Company recognizes an allowance for credit losses expected to be incurred over the life of the instrument. The model utilized by the Company to determine such losses emphasizes historical experience and future market expectations to determine a loss to be recognized at inception. However, the model is applied on an individual basis and relies on counter-party specific information to ensure the most accurate estimate is recognized. The Company also performs a quarterly review process (or upon the occurrence of a significant event) to evaluate its borrowers’ creditworthiness and liquidity to determine the amount of credit losses to recognize during the period. If a finance receivable is deemed partially or wholly uncollectible, the uncollectible balance is deducted from the allowance in the period in which such determination is made. Credit loss expenses and recoveries are recorded in impairments and loan loss reserves (recoveries), net.

Real Estate

The Company’s real estate acquisitions are generally classified as asset acquisitions for which the Company records identifiable assets acquired, liabilities assumed, and any associated noncontrolling interests at cost on a relative fair value basis. In addition, for such asset acquisitions, no goodwill is recognized, third party transaction costs are capitalized and any associated contingent consideration is generally recorded when the amount of consideration is reasonably estimable and probable of being paid.

The Company assesses fair value based on available market information, such as capitalization and discount rates, comparable sale transactions, and relevant per square foot or unit cost information. A real estate asset’s fair value may be determined utilizing cash flow projections that incorporate such market information. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, as well as market and economic conditions. The fair value of tangible assets of an acquired property is based on the value of the property as if it is vacant.

The Company recognizes acquired “above and below market” leases at their relative fair value (for asset acquisitions) using discount rates which reflect the risks associated with the leases acquired. The fair value is based on the present value of the difference between (i) the contractual amounts paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, measured over a period equal to the remaining term of the lease for above market leases and the initial term plus the extended term for any leases with renewal options that are reasonably certain to be exercised. Other intangible assets acquired include amounts for in-place lease values that are based on an evaluation of the specific characteristics of each property and the acquired tenant lease(s). Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions, and costs to execute similar leases. In estimating carrying costs, the Company includes estimates of lost rents at market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions and expected trends. In estimating costs to execute similar leases, the Company considers leasing commissions, legal, and other related costs.

Certain of the Company's acquisitions involve the assumption of contract liabilities. The Company typically estimates the fair value of contract liabilities by applying a reasonable profit margin to the total discounted estimated future costs associated with servicing the contract. A variety of market and contract-specific conditions are considered when making assumptions that impact the estimated fair value of the contract liability.

The Company capitalizes direct construction and development costs, including predevelopment costs, interest, property taxes, insurance, and other costs directly related and essential to the development or construction of a real estate asset. The Company capitalizes construction and development costs while substantive activities are ongoing to prepare an asset for its intended use. During the holding or development period, certain real estate assets generate incidental income that is not associated with the future profit or return from the intended use of the property. Such income is recognized as a reduction of the associated project costs. The Company considers a construction project as substantially complete and held available for occupancy upon the completion of Company-owned tenant improvements, but no later than one year from cessation of significant construction activity. Costs incurred after a project is substantially complete and ready for its intended use, or after development activities have ceased, are expensed as incurred. For redevelopment of existing operating properties, the Company capitalizes the cost for the construction and improvement incurred in connection with the redevelopment.

Costs previously capitalized related to abandoned developments/redevelopments are charged to earnings. Expenditures for repairs and maintenance are expensed as incurred. The Company considers costs incurred in conjunction with re-leasing properties, including tenant improvements and lease commissions, to represent the acquisition of productive assets and such costs are reflected as investing activities in the Company’s Consolidated Statements of Cash Flows.

Initial direct costs incurred in connection with successful property leasing are capitalized as deferred leasing costs and classified as investing activities in the Consolidated Statements of Cash Flows. Initial direct costs include only those costs that are incremental to the arrangement and would not have been incurred if the lease had not been obtained. Initial direct costs consist of leasing commissions paid to external third party brokers and lease incentives. Initial direct costs are included in other assets, net in the Consolidated Balance Sheets and amortized in depreciation and amortization in the Consolidated Statements of Operations using the straight-line method of accounting over the lease term.

The Company computes depreciation on properties using the straight-line method over the assets’ estimated useful lives. Depreciation is discontinued when a property is identified as held for sale. Buildings and improvements are depreciated over useful lives ranging up to 50 years. Above and below market lease intangibles are amortized to revenue over the remaining noncancellable lease terms and renewal periods that are reasonably certain to be exercised, if any. In-place lease intangibles are amortized to expense over the remaining noncancellable lease term and renewal periods that are reasonably certain to be exercised, if any.

Lessee Accounting

For leases greater than 12 months for which the Company is the lessee, such as ground leases and corporate office leases, the Company recognizes a right-of-use asset and related lease liability on the Consolidated Balance Sheets at inception of the lease. The lease liability is calculated as the sum of: (i) the present value of minimum lease payments at lease commencement (discounted using the Company's secured incremental borrowing rate) and (ii) the present value of amounts probable of being paid under any residual value guarantees. Certain of the Company’s lease agreements have options to extend or terminate the contract terms upon meeting certain criteria. The lease term utilized in the calculation of the lease liability includes these options if they are considered reasonably certain of exercise. The right-of-use asset is calculated as the lease liability, adjusted for the following: (i) any lease payments made to the lessor at or before the commencement date, minus any lease incentives received and (ii) any initial direct costs incurred by the Company. Lease expense related to corporate assets is included in general and administrative expenses and lease expense related to ground leases is included within operating expenses in the Company’s Consolidated Statements of Operations.

For leases with a noncancellable lease term of 12 months or less for which the Company is the lessee, the Company recognizes expenses on a straight-line basis and does not recognize such leases on the Consolidated Balance Sheets.

Impairment of Long-Lived Assets and Goodwill

The Company assesses the carrying value of real estate assets and related intangibles (“real estate assets”) when events or changes in circumstances indicate that the carrying value may not be recoverable. The Company tests its real estate assets for impairment by comparing the sum of the expected future undiscounted cash flows to the carrying value of the real estate assets. The expected future undiscounted cash flows reflect the expected use and eventual disposition of the asset, and are probability-weighted to reflect multiple possible cash-flow scenarios, including selling the assets at various points in the future. Further, the analysis considers the impact, if any, of master lease agreements on cash flows, which are calculated utilizing the lowest level of identifiable cash flows that are largely independent of the cash flows of other assets and liabilities. If the carrying value exceeds the expected future undiscounted cash flows, an impairment loss will be recognized to the extent that the carrying value of the real estate assets exceeds their fair value.

Determining the fair value of real estate assets, including assets classified as held-for-sale, involves significant judgment and generally utilizes market capitalization rates, comparable market transactions, estimated per unit or per square foot prices, negotiations with prospective buyers, and forecasted cash flows (primarily lease revenue rates, expense rates, and growth rates).

When testing goodwill for impairment, if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company recognizes an impairment loss for the amount by which the carrying value, including goodwill, exceeds the reporting unit’s fair value.

Assets Held for Sale and Discontinued Operations

The Company classifies a real estate property as held for sale when: (i) management has approved the disposal, (ii) the property is available for sale in its present condition, (iii) an active program to locate a buyer has been initiated, (iv) it is probable that the property will be disposed of within one year, (v) the property is being marketed at a reasonable price relative to its fair value, and (vi) it is unlikely that the disposal plan will significantly change or be withdrawn. If a real estate property is classified as held for sale, it is reported at the lower of its carrying value or fair value less costs to sell and no longer depreciated.

The Company classifies a loan receivable as held for sale when management no longer has the intent and ability to hold the loan receivable for the foreseeable future or until maturity. If a loan receivable is classified as held for sale, it is reported at the lower of amortized cost or fair value.

A discontinued operation represents: (i) a component of the Company or group of components that has been disposed of or is classified as held for sale in a single transaction and represents a strategic shift that has or will have a major effect on the Company’s operations and financial results or (ii) an acquired business that is classified as held for sale on the date of acquisition. Examples of a strategic shift may include disposing of: (i) a separate major line of business, (ii) a separate major geographic area of operations, or (iii) other major parts of the Company.

Senior Housing Triple-Net and Senior Housing Operating Portfolio Dispositions

During 2020, the Company established and began executing a plan to dispose of its senior housing triple-net and SHOP portfolios and concluded that the planned dispositions represented a strategic shift that had and will have a major effect on the Company’s operations and financial results. Therefore, senior housing triple-net and SHOP assets meeting the held for sale criteria are classified as discontinued operations in all periods presented herein. In September 2021, the Company successfully completed the disposition of the remaining senior housing triple-net and SHOP properties. See Note 5 for further information.

Investments in Unconsolidated Joint Ventures

Investments in entities the Company does not consolidate, but over which the Company has the ability to exercise significant influence over operating and financial policies, are reported under the equity method of accounting. Under the equity method of accounting, the Company’s share of the investee’s earnings or losses is included in equity income (loss) from unconsolidated joint ventures within the Company’s Consolidated Statements of Operations.

The initial carrying value of investments in unconsolidated joint ventures is based on the amount paid to purchase the joint venture interest, the fair value of assets contributed to the joint venture, or the fair value of the assets prior to the sale of interests in the joint venture. To the extent that the Company’s cost basis is different from the basis reflected at the joint venture level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in the Company’s share of equity in earnings of the joint venture. If an equity method investment shows indicators of impairment, the Company evaluates its equity method investments for impairment based on a comparison of the fair value of the equity method investment to its carrying value. When the Company determines a decline in fair value below carrying value of an investment in an unconsolidated joint venture is other-than-temporary, an impairment is recorded. The Company recognizes gains on the sale of interests in joint ventures to the extent the economic substance of the transaction is a sale.

The Company’s fair values of its equity method investments are determined based on discounted cash flow models that include all estimated cash inflows and outflows over a specified holding period and, where applicable, any estimated debt premiums or discounts. Capitalization rates, discount rates, and credit spreads utilized in these valuation models are based on assumptions that the Company believes to be within a reasonable range of current market rates for the respective investments.

Share-Based Compensation

Compensation expense for share-based awards granted to employees with graded vesting schedules is generally recognized on a straight-line basis over the vesting period. Forfeitures of share-based awards are recognized as they occur.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of cash on hand and short-term investments with original maturities of three months or less when purchased. Restricted cash primarily consists of amounts held by mortgage lenders to provide for: (i) real estate tax expenditures, (ii) tenant improvements, and (iii) capital expenditures, as well as security deposits and net proceeds from property sales that were executed as tax-deferred dispositions.

The Company maintains its cash and cash equivalents at financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per institution. As the account balances at each institution periodically exceed the FDIC insurance coverage, there is a concentration of credit risk related to amounts in excess of such coverage.

Derivatives and Hedging

During its normal course of business, the Company uses certain types of derivative instruments for the purpose of managing interest rate and foreign currency risk. To qualify for hedge accounting, derivative instruments used for risk management purposes must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transaction or transactions, must be, and are expected to remain, probable of occurring in accordance with the Company’s related assertions.

The Company recognizes all derivative instruments, including embedded derivatives that are required to be bifurcated, as assets or liabilities to the Consolidated Balance Sheets at fair value. Changes in fair value of derivative instruments that are not designated in hedging relationships or that do not meet the criteria of hedge accounting are recognized in other income (expense), net. For derivative instruments designated in qualifying cash flow hedging relationships, changes in fair value related to the effective portion of the derivative instruments are recognized in accumulated other comprehensive income (loss), whereas changes in fair value related to the ineffective portion would be recognized in earnings.

If it is determined that a derivative instrument ceases to be highly effective as a hedge, or that it is probable the underlying forecasted transaction will not occur, the Company discontinues its cash flow hedge accounting prospectively and records the appropriate adjustment to earnings based on the current fair value of the derivative instrument.

Income Taxes

Healthpeak Properties, Inc. has elected REIT status and believes it has always operated so as to continue to qualify as a REIT under Sections 856 to 860 of the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, Healthpeak Properties, Inc. will generally not be subject to U.S. federal income tax, provided that it continues to qualify as a REIT and makes distributions to stockholders equal to or in excess of its taxable income. In addition, the Company has formed several consolidated subsidiaries that have elected REIT status. Healthpeak Properties, Inc. and its consolidated REIT subsidiaries are each subject to the REIT qualification requirements under the Code. If any REIT fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates and may be ineligible to qualify as a REIT for four subsequent tax years.

Healthpeak Properties, Inc. and its consolidated REIT subsidiaries are subject to state, local, and/or foreign income taxes in some jurisdictions. In certain circumstances each REIT may also be subject to federal excise taxes on undistributed income. In addition, certain activities that the Company undertakes may be conducted by entities that have elected to be treated as taxable REIT subsidiaries (“TRSs”). TRSs are subject to federal, state, and local income taxes. The Company recognizes tax penalties relating to unrecognized tax benefits as additional income tax expense. Interest relating to unrecognized tax benefits is recognized as interest expense.

The Company is required to evaluate its deferred tax assets for realizability and recognize a valuation allowance, which is recorded against its deferred tax assets, if it is more likely than not that the deferred tax assets will not be realized. The Company considers all available evidence in its determination of whether a valuation allowance for deferred tax assets is required.

Advertising Costs

All advertising costs are expensed as incurred and reported within operating expenses on the Consolidated Statements of Operations. During the years ended December 31, 2022, 2021, and 2020, total advertising expense was $8 million, $11 million, and $18 million, respectively ($0.1 million, $3 million, and $12 million, respectively, of which is reported in income (loss) from discontinued operations on the Consolidated Statements of Operations).

Capital Raising Issuance Costs

Costs incurred in connection with the issuance of common shares are recorded as a reduction of additional paid-in capital. Debt issuance costs related to debt instruments, excluding line of credit arrangements and commercial paper, are deferred, recorded as a reduction of the related debt liability, and amortized to interest expense over the remaining term of the related debt liability utilizing the effective interest method. Debt issuance costs related to line of credit arrangements and commercial paper are deferred, included in other assets, and amortized to interest expense on a straight-line basis over the remaining term of the related line of credit arrangement. Commercial paper are unsecured short-term debt securities with varying maturities. A line of credit serves as a liquidity backstop for repayment of commercial paper borrowings.

Penalties incurred to extinguish debt and any remaining unamortized debt issuance costs, discounts, and premiums are recognized as income or expense in the Consolidated Statements of Operations at the time of extinguishment.

Segment Reporting

The Company’s reportable segments, based on how it evaluates its business and allocates resources, are as follows: (i) life science, (ii) medical office, and (iii) CCRC.

Noncontrolling Interests

Arrangements with noncontrolling interest holders are assessed for appropriate balance sheet classification based on the redemption and other rights held by the noncontrolling interest holder. Net income (loss) attributable to a noncontrolling interest is included in net income (loss) on the Consolidated Statements of Operations and, upon a gain or loss of control, the interest purchased or sold, and any interest retained, is recorded at fair value with any gain or loss recognized in earnings. The Company accounts for purchases or sales of equity interests that do not result in a change in control as equity transactions.

The Company consolidates non-managing member limited liability companies (“DownREITs”) because it exercises control, and the noncontrolling interests in these entities are carried at cost. The non-managing member limited liability company (“LLC”) units (“DownREIT units”) are exchangeable for an amount of cash approximating the then-current market value of shares of the Company’s common stock or, at the Company’s option, shares of the Company’s common stock (subject to certain adjustments, such as stock splits and reclassifications). Upon exchange of DownREIT units for the Company’s common stock, the carrying amount of the DownREIT units is reclassified to stockholders’ equity.

Redeemable Noncontrolling Interests

Certain of the Company’s noncontrolling interest holders have the ability to put their equity interests to the Company upon specified events or after the passage of a predetermined period of time. Each put option is payable in cash and subject to increases in redemption value in the event that the underlying property generates specified returns and meets certain promote thresholds pursuant to the respective agreements. Accordingly, the Company records redeemable noncontrolling interests outside of permanent equity and presents the redeemable noncontrolling interests at the greater of their carrying amount or redemption value at the end of each reporting period.

Foreign Currency Translation and Transactions

Assets and liabilities denominated in foreign currencies that are translated into U.S. dollars use exchange rates in effect at the end of the period, and revenues and expenses denominated in foreign currencies that are translated into U.S. dollars use average rates of exchange in effect during the related period. Gains or losses resulting from translation are included in accumulated other comprehensive income (loss). Gains or losses resulting from foreign currency transactions are translated into U.S. dollars at the rates of exchange prevailing at the dates of the transactions. The effects of transaction gains or losses are included in other income (expense), net in the Consolidated Statements of Operations.

Fair Value Measurement

The Company measures and discloses the fair value of nonfinancial and financial assets and liabilities utilizing a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy:

*•*Level 1—quoted prices for identical instruments in active markets;

*•*Level 2—quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

*•*Level 3—fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company measures fair value using a set of standardized procedures that are outlined herein for all assets and liabilities that are required to be measured at fair value. When available, the Company utilizes quoted market prices to determine fair value and classifies such items in Level 1. In instances where a market price is available, but the instrument is in an inactive or over-the-counter market, the Company consistently applies the dealer (market maker) pricing estimate and classifies the asset or liability in Level 2.

If quoted market prices or inputs are not available, fair value measurements are based on valuation models that utilize current market or independently sourced market inputs, such as interest rates, option volatilities, credit spreads, and/or market capitalization rates. Items valued using such internally-generated valuation techniques are classified according to the lowest level input that is significant to the fair value measurement. As a result, the asset or liability could be classified in either Level 2 or Level 3 even though there may be some significant inputs that are readily observable. Internal fair value models and techniques used by the Company include discounted cash flow models. The Company also considers its counterparty’s and own credit risk for derivative instruments and other liabilities measured at fair value. The Company has elected the mid-market pricing expedient when determining fair value.

Earnings per Share

Basic earnings per common share is computed by dividing net income (loss) applicable to common shares by the weighted average number of shares of common stock outstanding during the period. The Company accounts for unvested share-based payment awards that contain non-forfeitable dividend rights or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share pursuant to the two-class method. Diluted earnings per common share is calculated by including the effect of dilutive securities, such as the impact of forward equity sales agreements using the treasury stock method and common shares issuable from the assumed conversion of DownREIT units, stock options, certain performance restricted stock units, and unvested restricted stock units.

Recent Accounting Pronouncements

Credit Losses. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments held by financial institutions and other organizations. The amendments in ASU 2016-13 eliminate the “probable” initial threshold for recognition of credit losses in previous accounting guidance and, instead, reflect an entity’s current estimate of all expected credit losses over the life of the financial instrument. Historically, when credit losses were measured under previous accounting guidance, an entity generally only considered past events and current conditions in measuring the incurred loss. The amendments in ASU 2016-13 broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss.

As a result of adopting ASU 2016-13 on January 1, 2020 using the modified retrospective transition approach, the Company recognized a cumulative-effect adjustment to equity of $2 million. Under ASU 2016-13, the Company began using a loss model that relies on future expected credit losses, rather than incurred losses, as was required under historical GAAP. Under the new model, the Company is required to recognize future credit losses expected to be incurred over the life of its finance receivables, including loans receivable, DFLs, and certain accounts receivable, at inception of those instruments. The model emphasizes historical experience and future market expectations to determine a loss to be recognized at inception. However, the model continues to be applied on an individual basis and rely on counter-party specific information to ensure the most accurate estimate is recognized. The Company reassesses its reserves on finance receivables at each balance sheet date to determine if an adjustment to the previous reserve is necessary.

Accounting for Lease Concessions Related to Covid. In April 2020, the FASB staff issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of Covid. Under ASC 842 the Company would have to determine, on a lease-by-lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows the Company, if certain criteria have been met, to bypass the lease-by-lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. During the year ended December 31, 2020, the Company provided rent deferrals, which were required to be repaid before the end of 2020, to certain tenants in its life science and medical office segments that were impacted by Covid (discussed in further detail in Note 7). No such rent deferrals were provided to tenants during the years ended December 31, 2022 and 2021. The Company elected to not assess these rent deferrals on a lease-by-lease basis and to continue recognizing rent revenue on a straight-line basis.

Government Assistance. In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance (“ASU 2021-10”), which increases the transparency of government assistance including the disclosure of the types of assistance, an entity’s accounting for assistance, and the effect of the assistance on an entity’s financial statements. The adoption of ASU 2021-10 on January 1, 2022 did not have a material impact on the Company’s consolidated financial position, results of operations, cash flows, or disclosures.

Reference Rate Reform. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), which amends the scope of ASU 2020-04 to include derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”), which defers the sunset date of the reference rate reform guidance to December 31, 2024. The amendments in ASU 2020-04, ASU 2021-01, and ASU 2022-06 were effective immediately upon issuance. During 2022, the Company elected to apply certain hedge accounting expedients provided by ASU 2020-04 and ASU 2021-01, which preserves the hedging relationship of derivatives. The expedients provided by ASU 2020-04, ASU 2021-01, and ASU 2022-06 and the effects of reference rate reform have not had, and are not expected to have, a material impact on the Company’s consolidated financial position, results of operations, cash flows, or disclosures.

NOTE 3. Master Transactions and Cooperation Agreement with Brookdale

2019 Master Transactions and Cooperation Agreement with Brookdale

In October 2019, the Company and Brookdale Senior Living Inc. (“Brookdale”) entered into a Master Transactions and Cooperation Agreement (the “2019 MTCA”), which includes a series of transactions related to its previously jointly owned 15-campus CCRC portfolio (the “CCRC JV”) and the portfolio of senior housing properties Brookdale triple-net leased from the Company, which, at the time, included 43 properties.

In connection with the 2019 MTCA, the Company and Brookdale, and certain of their respective subsidiaries, closed the following transactions related to the CCRC JV on January 31, 2020:

• The Company, which owned a 49% interest in the CCRC JV, purchased Brookdale’s 51% interest in 13 of the 15 communities in the CCRC JV based on a valuation of $1.06 billion (the “CCRC Acquisition”);

• The management agreements related to the CCRC Acquisition communities were terminated and management transitioned (under new management agreements) from Brookdale to Life Care Services LLC (“LCS”); and

• The Company paid a $100 million management termination fee to Brookdale.

In addition, pursuant to the 2019 MTCA, the Company and Brookdale closed the following transactions related to properties Brookdale triple-net leased from the Company on January 31, 2020:

• Brookdale acquired 18 of the properties from the Company (the “Brookdale Acquisition Assets”) for cash proceeds of $385 million;

• The remaining 24 properties (excludes one property transitioned and sold to a third party, as discussed below) were restructured into a single master lease with 2.4% annual rent escalators and a maturity date of December 31, 2027 (the “2019 Amended Master Lease”);

• A portion of annual rent (amount in excess of 6.5% of sales proceeds) related to 14 of the 18 Brookdale Acquisition Assets was reallocated to the remaining properties under the 2019 Amended Master Lease; and

• Brookdale paid down $20 million of future rent under the 2019 Amended Master Lease.

As agreed to by the Company and Brookdale under the 2019 MTCA, in December 2020, the Company terminated the triple-net lease related to one property and converted it to a structure permitted by the Housing and Economic Recovery Act of 2008, which includes most of the provisions previously proposed in the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”). In August 2021, the Company sold this property.

The Company and Brookdale also agreed that the Company would provide up to $35 million of capital investment in the 2019 Amended Master Lease properties over a five-year term, which would increase rent by 7% of the amount spent, per annum. As of December 31, 2020, the Company had funded $5 million of this capital investment. Upon the Company’s sale of the 24 properties under the 2019 Amended Master Lease in January 2021 (see Note 5), the remaining capital investment obligation was transferred to the buyer.

As a result of the above transactions, on January 31, 2020, the Company began consolidating the 13 CCRCs in which it acquired Brookdale’s interest. Accordingly, the Company derecognized its investment in the CCRC JV of $323 million and recognized a gain upon change of control of $170 million, which is included in other income (expense), net. In connection with consolidating the 13 CCRCs during the first quarter of 2020, the Company recognized real estate and intangible assets of $1.8 billion, refundable entrance fee liabilities of $308 million, contractual liabilities associated with previously collected non-refundable entrance fees of $436 million, debt assumed of $215 million, other net assets of $48 million, and cash paid of $396 million.

Upon sale of the Brookdale Acquisition Assets in January 2020, the Company recognized an aggregate gain on sales of real estate of $164 million, which is recorded within income (loss) from discontinued operations.

In May 2021, the CCRC JV sold the two remaining CCRCs subject to the 2019 MTCA for $38 million, $19 million of which represents the Company’s 49% interest in the CCRC JV, resulting in an immaterial gain on sale recorded within equity income (loss) from unconsolidated joint ventures (see Note 9).

Fair Value Measurement Techniques and Quantitative Information

At January 31, 2020, the Company performed a fair value assessment of each of the 2019 MTCA components that provided measurable economic benefit or detriment to the Company. Each fair value calculation was based on an income or market approach and relied on historical and forecasted net operating income (“NOI”), actuarial assumptions about the expected resident length of stay, and market data, including, but not limited to, discount rates ranging from 10% to 12%, annual rent escalators ranging from 2% to 3%, and real estate capitalization rates ranging from 7% to 9%. All assumptions were considered to be Level 3 measurements within the fair value hierarchy.

NOTE 4. Real Estate

2022 Real Estate Investment Acquisitions

67 Smith Place

In January 2022, the Company closed a life science acquisition in Cambridge, Massachusetts for $72 million.

Vista Sorrento Phase II

In January 2022, the Company closed a life science acquisition in San Diego, California for $24 million.

Webster MOB Portfolio

In March 2022, the Company acquired a portfolio of two medical office buildings (“MOBs”) in Houston, Texas for $43 million.

Northwest Medical Plaza

In May 2022, the Company acquired one MOB in Bentonville, Arkansas for $26 million.

Concord Avenue Land Parcels

In December 2022, the Company closed a life science acquisition in Cambridge, Massachusetts for $18 million.

Land Parcel Acquisition Subsequent to Year-End

In January 2023, the Company closed a life science acquisition in Cambridge, Massachusetts for $9 million.

2021 Real Estate Investment Acquisitions

In 2021, the Company closed the following life science acquisitions: (i) eight acquisitions in Cambridge, Massachusetts for $498 million, (ii) one acquisition in San Diego, California for $20 million, and (iii) 12 acres of land for $128 million in South San Francisco, California.

Also during 2021, the Company closed the following MOB acquisitions: (i) one MOB in Nashville, Tennessee for $13 million, (ii) one MOB in Denver, Colorado for $38 million, (iii) a portfolio of 14 MOBs for $371 million (the “MOB Portfolio”), (iv) one MOB in Fort Lauderdale, Florida for $16 million, (v) one MOB in Wichita, Kansas for $50 million, (vi) three MOBs in Morristown, New Jersey for $155 million, (vii) two MOBs in Dallas, Texas for $60 million, (viii) one MOB in Seattle, Washington for $43 million, (ix) one MOB in New Orleans, Louisiana for $34 million, and (x) one MOB in Cambridge, Massachusetts for $55 million. In conjunction with the acquisition of the MOB Portfolio, the Company originated $142 million of secured mortgage debt.

Development Activities

Construction, Tenant, and Other Capital Improvements

The following table summarizes the Company’s expenditures for construction, tenant improvements, and other capital improvements, excluding expenditures related to properties classified as discontinued operations (in thousands):

						Year Ended December 31,
Segment						2022						2021						2020
Life science						$	658,542					$	472,301					$	573,999
Medical office						237,761						230,227						173,672
CCRC						65,691						57,192						41,224
						$	961,994					$	759,720					$	788,895

NOTE 5. Dispositions of Real Estate and Discontinued Operations

2022 Dispositions of Real Estate

In January 2022, the Company sold one life science facility in Salt Lake City, Utah for $14 million, resulting in a gain on sale of $4 million.

During the three months ended June 30, 2022, the Company sold three MOBs and one MOB land parcel for $27 million, resulting in total gain on sales of $10 million.

In July 2022, the Company sold two MOBs for $9 million, resulting in total gain on sales of $1 million.

Dispositions Subsequent to Year-End

In January 2023, the Company sold two life science facilities in Durham, North Carolina, which were classified as held for sale as of December 31, 2022, for $113 million.

2021 Dispositions of Real Estate

Sunrise Senior Housing Portfolio

In January 2021, the Company sold a portfolio of 32 SHOP assets (the “Sunrise Senior Housing Portfolio”) for $664 million, resulting in an immaterial loss on sale, which is recognized in income (loss) from discontinued operations, and provided the buyer with: (i) financing of $410 million (see Note 8) and (ii) a commitment to finance up to $92 million of additional debt for capital expenditures. As of December 31, 2022, the commitment to finance additional debt for capital expenditures was $40 million, of which $0.4 million had been funded (see Note 8). Upon completion of the license transfer process in June 2021, the Company sold the two remaining Sunrise senior housing triple-net assets for $80 million, resulting in a gain on sale of $22 million, which is recognized in income (loss) from discontinued operations.

Brookdale Triple-Net Portfolio

In January 2021, the Company sold 24 senior housing assets in a triple-net lease with Brookdale for $510 million, resulting in total gain on sale of $169 million, which is recognized in income (loss) from discontinued operations.

Additional SHOP Portfolio

In January 2021, the Company sold a portfolio of 16 SHOP assets for $230 million, resulting in total gain on sale of $59 million, which is recognized in income (loss) from discontinued operations. The Company provided the buyer with financing of $150 million (see Note 8).

HRA Triple-Net Portfolio

In February 2021, the Company sold eight senior housing assets in a triple-net lease with Harbor Retirement Associates for $132 million, resulting in total gain on sale of $33 million, which is recognized in income (loss) from discontinued operations.

Oakmont SHOP Portfolio

In April 2021, the Company sold a portfolio of 12 SHOP assets for $564 million. In conjunction with the sale, mortgage debt held on two properties with a carrying value of $64 million was repaid and the remaining mortgage debt held on four properties with a carrying value of $107 million was assumed by the buyer. The transaction resulted in total gain on sale of $80 million, which is recognized in income (loss) from discontinued operations.

Discovery SHOP Portfolio

In April 2021, the Company sold a portfolio of 10 SHOP assets for $334 million, resulting in total gain on sale of $9 million, which is recognized in income (loss) from discontinued operations. Also included in this transaction was the sale of two mezzanine loans and two preferred equity investments for $21 million, resulting in no gain or loss on sale of the investments (collectively, the “Discovery SHOP Portfolio”).

Sonata SHOP Portfolio

In April 2021, the Company sold a portfolio of five SHOP assets for $64 million, resulting in total gain on sale of $3 million, which is recognized in income (loss) from discontinued operations.

SLC SHOP Portfolio

In May 2021, the Company sold seven SHOP assets for $113 million and repaid $70 million of mortgage debt that was held on six of the assets, resulting in total gain on sale of $1 million, which is recognized in income (loss) from discontinued operations.

Hoag Hospital

In May 2021, the Company sold one hospital for $226 million through the exercise of a purchase option by a tenant, resulting in gain on sale of $172 million.

2021 Other Dispositions

In addition to the portfolio and individual sales discussed above, during the year ended December 31, 2021, the Company sold the following: (i) 15 SHOP assets for $169 million, (ii) 7 senior housing triple-net assets for $24 million, and (iii) 10 MOBs and a portion of 1 MOB land parcel for $68 million, resulting in total gain on sales of $58 million ($39 million of which is recognized in income (loss) from discontinued operations). In conjunction with one of the SHOP asset sales, mortgage debt held on the property with a carrying value of $36 million was assumed by the buyer.

2020 Dispositions of Real Estate

Aegis NNN Portfolio

In December 2020, the Company sold 10 senior housing triple-net assets for $358 million and repaid $6 million of variable rate secured mortgage debt held on one asset, resulting in total gain on sale of $228 million, which is recognized in income (loss) from discontinued operations.

Atria SHOP Portfolio

In December 2020, the Company sold 12 SHOP assets for $312 million, resulting in total gain on sale of $39 million, which is recognized in income (loss) from discontinued operations. The Company provided the buyer with financing of $61 million on four of the assets sold.

2020 Other Dispositions

In addition to the portfolio sales discussed above, during the year ended December 31, 2020, the Company sold the following: (i) 23 SHOP assets for $190 million, (ii) 21 senior housing triple-net assets for $428 million (inclusive of the 18 facilities sold to Brookdale under the 2019 MTCA - see Note 3), (iii) 11 MOBs for $136 million (inclusive of the exercise of a purchase option by a tenant to acquire 3 MOBs in San Diego, California), (iv) 2 MOB land parcels for $3 million, and (v) 1 asset from other non-reportable segments for $1 million, resulting in total gain on sales of $283 million ($193 million of which is recognized in income (loss) from discontinued operations).

Held for Sale and Discontinued Operations

During 2020, the Company established and began executing a plan to dispose of its senior housing triple-net and SHOP properties. As of December 31, 2020, the Company concluded that the planned dispositions represented a strategic shift that had and will have a major effect on the Company’s operations and financial results. Therefore, senior housing triple-net and SHOP assets meeting the held for sale criteria are classified as discontinued operations in all periods presented herein. In September 2021, the Company successfully completed the disposition of the remaining senior housing triple-net and SHOP properties.

The following summarizes the assets and liabilities classified as held for sale or as discontinued operations at December 31, 2022 and 2021, which are included in assets held for sale and discontinued operations, net and liabilities related to assets held for sale and discontinued operations, net, respectively, on the Consolidated Balance Sheets (in thousands):

			December 31,
			2022						2021
ASSETS
Accounts receivable, net of allowance of $0 and $4,138			$	—					$	2,446
Cash and cash equivalents			—						7,707
Right-of-use asset, net			—						26
Other assets, net			—						3,237
Total assets of discontinued operations, net			—						13,416
Assets held for sale, net(1)			49,866						23,774
Assets held for sale and discontinued operations, net			$	49,866					$	37,190
LIABILITIES
Lease liability			$	—					$	26
Accounts payable, accrued liabilities, and other liabilities			—						14,843
Deferred revenue			—						92
Total liabilities of discontinued operations, net			—						14,961
Liabilities related to assets held for sale, net(1)			4,070						95
Liabilities related to assets held for sale and discontinued operations, net			$	4,070					$	15,056

_______________________________________

(1)As of December 31, 2022, included two life science assets primarily comprised of net real estate assets of $44 million. As of December 31, 2021, included four MOBs and one life science facility primarily comprised of net real estate assets of $23 million.

The results of discontinued operations through December 31, 2022, or through the disposal date of each asset or portfolio of assets held within discontinued operations if sold during such periods, as applicable, are presented below (in thousands) and are included in the consolidated results of operations for the years ended December 31, 2022, 2021, and 2020:

			Year Ended December 31,
			2022						2021						2020
Revenues:
Rental and related revenues			$	—					$	7,535					$	97,877
Resident fees and services			7,489						114,936						621,253
Total revenues			7,489						122,471						719,130
Costs and expenses:
Interest expense			—						3,900						10,538
Depreciation and amortization			—						—						143,194
Operating			6,452						122,571						550,226
Transaction costs			—						76						20,426
Impairments and loan loss reserves (recoveries), net			—						32,736						201,344
Total costs and expenses			6,452						159,283						925,728
Other income (expense):
Gain (loss) on sales of real estate, net			1,344						414,721						460,144
Other income (expense), net			169						4,189						5,475
Total other income (expense), net			1,513						418,910						465,619
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures			2,550						382,098						259,021
Income tax benefit (expense)			270						969						9,913
Equity income (loss) from unconsolidated joint ventures			64						5,135						(1,188)
Income (loss) from discontinued operations			$	2,884					$	388,202					$	267,746

NOTE 6. Impairments of Real Estate

2022

During the year ended December 31, 2022, the Company did not recognize any impairment charges.

2021

During the year ended December 31, 2021, the Company recognized an aggregate impairment charge of $22 million, which is reported in impairments and loan loss reserves (recoveries), net, related to: (i) three MOBs that met the held for sale criteria during the year and (ii) one MOB held for use; the aggregate fair value of these four MOBs was $14 million as of the related impairment assessment dates. For the three MOBs that met the held for sale criteria during the year, the Company recognized an impairment charge of $5 million to write down the properties’ aggregate carrying value to their aggregate fair value, less estimated costs to sell. For the MOB held for use, the Company recognized a $17 million impairment charge in the fourth quarter of 2021 due to the demolition of the MOB for a future development project.

Additionally, during the year ended December 31, 2021, the Company recognized an impairment charge of $4 million related to one SHOP asset, which is reported in income (loss) from discontinued operations. Following a reduction in the expected sales price of the SHOP asset occurring in the second quarter of 2021, the Company wrote down its carrying value of $20 million to its fair value, less estimated costs to sell, of $16 million.

The fair values of the impaired assets were based on forecasted sales prices and market comparable data, which are considered to be Level 3 measurements within the fair value hierarchy. These fair values are typically determined using an income approach and/or a market approach (comparable sales model), which rely on certain assumptions by management, including: (i) market capitalization rates, (ii) comparable market transactions, (iii) estimated prices per unit, (iv) negotiations with prospective buyers, and (v) forecasted cash flow streams (primarily lease revenue rates, expense rates, and growth rates). There are inherent uncertainties in making these assumptions. For the Company’s impairment calculations during and as of the year ended December 31, 2021, the Company’s fair value estimates primarily relied on a market approach, which utilized comparable market transactions and negotiations with prospective buyers.

2020

During the year ended December 31, 2020, the Company recognized an impairment charge of $15 million related to one life science facility due to its intent to demolish the facility for a future development project.

Additionally, during the year ended December 31, 2020, the Company recognized an aggregate impairment charge of $210 million ($201 million of which is reported in income (loss) from discontinued operations) related to 42 SHOP assets, 5 senior housing triple-net assets, 5 MOBs, and 1 undeveloped MOB land parcel as a result of being classified as held for sale and wrote down their aggregate carrying value of $960 million to their aggregate fair value, less estimated costs to sell, of $750 million.

For the Company’s impairment calculations during and as of the year ended December 31, 2020, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $13,000 to $300,000, with a weighted average price per unit of $164,000. When utilizing the income approach, assumptions include, but are not limited to, terminal capitalization rates ranging from 5.5% to 7.5% and discount rates ranging from 8.0% to 9.5%. The fair values of the assets are considered to be Level 3 measurements within the fair value hierarchy.

Goodwill Impairment

When testing goodwill for impairment, if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company recognizes an impairment charge for the amount by which the carrying value, including goodwill, exceeds the reporting unit’s fair value.

In connection with the disposition of the Company’s remaining senior housing triple-net and SHOP assets, the Company performed impairment assessments during the year ended December 31, 2021. As a result of these assessments, the Company recognized a $29 million goodwill impairment charge reported in income (loss) from discontinued operations, comprised of the following: (i) a $7 million goodwill impairment charge recognized during the second quarter of 2021, as the fair value of the remaining senior housing triple-net assets (based on forecasted sales prices) was less than the carrying value of the assets, including the related goodwill as of the assessment date and (ii) a $22 million goodwill impairment charge recognized during the third quarter of 2021 to reduce the associated goodwill balance to zero following the sale of the remaining assets within the reporting units associated with the senior housing triple-net and SHOP portfolios.

During the years ended December 31, 2022, 2021, and 2020, the fair value of the assets within each of the Company’s other reporting units was greater than the respective carrying value of the assets and related goodwill, and as a result, no impairment charges were recognized with respect to the other reporting units.

These fair value estimates primarily relied on a market approach, utilizing comparable market transactions, forecasted sales prices, and negotiations with prospective buyers. These estimates are considered to be Level 3 measurements within the fair value hierarchy, and are subject to inherent uncertainties.

Casualty-Related Charges

During the years ended December 31, 2022, 2021, and 2020, the Company recognized $6 million, $5 million, and $0.5 million, respectively, of net casualty-related charges. During the year ended December 31, 2022, such charges were primarily attributable to damages as a result of Hurricane Ian. During the year ended December 31, 2021, such charges were primarily due to fire damage at one of the properties in the SWF SH JV and winter storm Uri. Casualty-related charges are recognized in other income (expense), net and equity income (loss) from unconsolidated joint ventures in the Consolidated Statements of Operations.

Other Losses

During the first quarter of 2022, the Company recognized $14 million of expenses for tenant relocation and other costs associated with the demolition of an MOB. These expenses are included in other income (expense), net on the Consolidated Statements of Operations for the year ended December 31, 2022.

See Note 8 for information related to the Company’s reserve for loan losses.

NOTE 7. Leases

Lease Income

The following table summarizes the Company’s lease income, excluding discontinued operations (in thousands):

			Year Ended December 31,
			2022						2021						2020
Fixed income from operating leases			$	1,182,463					$	1,087,683					$	943,638
Variable income from operating leases			359,312						290,701						238,470
Interest income from direct financing leases			1,168						8,702						9,720

Direct Financing Leases

2022 Direct Financing Lease Sale

During the first quarter of 2022, the Company sold its remaining hospital under a DFL for $68 million and recognized a gain on sale of $23 million, which is included in other income (expense), net.

2020 Direct Financing Lease Sale

During the first quarter of 2020, the Company sold a hospital under a DFL for $82 million and recognized a gain on sale of $42 million, which is included in other income (expense), net.

Net investment in DFLs consists of the following (in thousands):

			December 31,
			2022						2021
Present value of minimum lease payments receivable			$	—					$	1,220
Present value of estimated residual value			—						44,706
Less deferred selling profits			—						(1,220)
Net investment in direct financing leases			$	—					$	44,706

Direct Financing Lease Internal Ratings

At December 31, 2022, the Company had no leases classified as a DFL. At December 31, 2021, the Company had one hospital lease classified as a DFL with a carrying amount of $45 million and an internal rating of “performing”.

Operating Leases

Future Minimum Rents

The following table summarizes future minimum lease payments to be received from tenants under non-cancelable operating leases as of December 31, 2022 (in thousands):

Year						Amount
2023						$	1,132,120
2024						1,106,555
2025						1,025,557
2026						917,925
2027						828,431
Thereafter						3,100,427
						$	8,111,015

Tenant Purchase Options

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

Year						Annualized Base Rent**(1)**						Number of Properties
2023						$	5,779					7
2024						7,446						3
2025						13,772						16
2026						5,594						3
2027						7,704						5
Thereafter						14,816						4
						$	55,111					38

_______________________________________

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

Lease Costs

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

						Year Ended December 31,
Lease Expense Information:						2022						2021						2020
Total lease expense						$	16,689					$	14,442					$	13,601

Weighted Average Lease Term and Discount Rate:						December 31, 2022						December 31, 2021
Weighted average remaining lease term (years):
Operating leases(1)						51						52
Weighted average discount rate:
Operating leases						4.20		%				4.14		%

_______________________________________

(1)As of December 31, 2022 and 2021, the weighted average remaining lease term including the Company’s options to extend its operating leases is 67 years and 68 years, respectively.

The following table summarizes future minimum lease payments under non-cancelable ground and other operating leases included in the Company’s lease liability as of December 31, 2022 (in thousands):

Year						Amount
2023						$	17,146
2024						13,126
2025						11,946
2026						11,875
2027						11,941
Thereafter						484,897
Undiscounted minimum lease payments included in the lease liability						550,931
Less: imputed interest						(342,416)
Present value of lease liability						$	208,515

Depreciation Expense

While the Company leases the majority of its property, plant, and equipment to various tenants under operating leases, in certain situations, the Company owns and operates certain property, plant, and equipment for general corporate purposes. Corporate assets are recorded within other assets, net within the Company’s Consolidated Balance Sheets and depreciation expense for those assets is recorded in general and administrative expenses in the Company’s Consolidated Statements of Operations. Included within other assets, net as of December 31, 2022 and 2021 is $10 million and $7 million, respectively, of accumulated depreciation related to corporate assets. Included within general and administrative expenses for the years ended December 31, 2022, 2021, and 2020 is $3 million, $2 million, and $2 million, respectively, of depreciation expense related to corporate assets.

Denver Corporate Headquarters

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

Covid Rent Deferrals

During the second and third quarters of 2020, the Company agreed to defer rent from certain tenants in its life science and medical office segments that were impacted by Covid, with the requirement that all deferred rent be repaid by the end of 2020. Under this program, through December 31, 2020, approximately $6 million of rent was deferred for the medical office segment, all of which had been collected as of December 31, 2020. Additionally, through December 31, 2020, the Company granted approximately $1 million of rent deferrals to certain tenants in the life science segment that were impacted by Covid, all of which had been collected as of December 31, 2020.

No such deferrals were granted during the years ended December 31, 2022 and 2021.

The rent deferrals granted do not impact the pattern of revenue recognition or amount of revenue recognized (refer to Note 2 for additional information).

NOTE 8. Loans Receivable

The following table summarizes the Company’s loans receivable (in thousands):

															December 31,
															2022																		2021
Secured loans(1)															$	350,837																	$	396,281
Mezzanine and other															33,083																		25,529
Unamortized discounts, fees, and costs															(808)																		(4,186)
Reserve for loan losses															(8,280)																		(1,813)
Loans receivable, net															$	374,832																	$	415,811

_______________________________________

(1)At December 31, 2022 and 2021, the Company had $40 million and $58 million, respectively, remaining of commitments to fund additional loans for senior housing redevelopment and capital expenditure projects.

During the years ended December 31, 2022, 2021, and 2020, the Company recognized $22 million, $36 million, and $13 million, respectively, of interest income related to loans secured by real estate.

SHOP Seller Financing

Sunrise Senior Housing Portfolio Seller Financing

In conjunction with the sale of 32 SHOP facilities in the Sunrise Senior Housing Portfolio for $664 million in January 2021 (see Note 5), the Company provided the buyer with initial financing of $410 million. The remainder of the sales price was received in cash at the time of sale. Additionally, the Company agreed to provide up to $92 million of additional financing for capital expenditures (up to 65% of the estimated cost of capital expenditures). As of December 31, 2022, the additional financing was reduced to $40 million, of which $0.4 million had been funded. The initial and additional financing is secured by the buyer’s equity ownership in each property.

In June 2021, the Company received principal repayments of $246 million on the initial financing provided in conjunction with the sale of the Sunrise Senior Housing Portfolio. In connection with the June 2021 principal repayment, the Company accelerated recognition of $7 million of the related mark-to-market discount, which is included in interest income in the Consolidated Statements of Operations. Additionally, in February 2022, July 2022, and December 2022, the Company received principal repayments of $8 million, $27 million, and $10 million, respectively, in conjunction with the disposition of the underlying collateral. As of December 31, 2022 and 2021, this secured loan had an outstanding principal balance of $120 million and $165 million, respectively.

Other Seller Financing

In conjunction with the sale of 16 additional SHOP facilities for $230 million in January 2021 (see Note 5), the Company provided the buyer with financing of $150 million. The remainder of the sales price was received in cash at the time of sale. The financing is secured by the buyer’s equity ownership in each property.

During the first quarter of 2021, the Company reduced the consideration and reported gain on sales of real estate and recognized a mark-to-market discount of $16 million for certain transactions with seller financing. The Company’s discount is based on the difference between the stated interest rates (ranging from 3.50% to 4.50%) and corresponding prevailing market rates of approximately 5.25% as of the transaction dates. The discount is recognized as interest income over the term of the discounted loans (ranging from one to three years) using the effective interest rate method. During the year ended December 31, 2022, the Company recognized $3 million of non-cash interest income related to the amortization of its mark-to-market discounts. During the year ended December 31, 2021, the Company recognized $13 million of non-cash interest income related to the amortization of its mark-to-market discounts, of which $7 million was recognized during the year ended December 31, 2021 as a result of the accelerated recognition discussed above related to the Sunrise Senior Housing Portfolio. The Company recognized an immaterial amount of non-cash interest income associated with seller financing notes receivable during the year ended December 31, 2020.

2022 Other Loans Receivable Transactions

In May 2022, the Company received full repayment of the outstanding balance of a $2 million secured loan.

In November 2022, the Company received full repayment of the outstanding balance of a $1 million mezzanine loan.

In December 2022, the Company extended the maturity dates of four secured loans with an aggregate outstanding balance of $61 million, originally scheduled to mature in December 2022, by one year to December 2023. In connection with the extensions, the interest rates on the loans were increased to a variable rate based on the Secured Overnight Financing Rate (“SOFR”) administered by the Federal Reserve Bank of New York, with a floor of 8.5% for the first six months of the extended term, increasing to 10.5% for the last six months of the extended term.

Loans Receivable Transactions Subsequent to Year-End

In January 2023, one secured loan with an outstanding balance of $150 million reached maturity and the borrower did not make the required principal repayment. Accordingly, the loan is in default. The borrower is in discussions with the Company regarding repayment options and extension of the maturity date.

In February 2023, the Company received full repayment of the outstanding balance of a $35 million secured loan.

Refer to Schedule IV: Mortgage Loans on Real Estate for additional information.

2021 Other Loans Receivable Transactions

The Company classifies a loan receivable as held for sale when management no longer has the intent or ability to hold the loan receivable for the foreseeable future or until maturity. If a loan receivable is classified as held for sale, previously recorded reserves for loan losses are reversed and the loan is reported at the lower of amortized cost or fair value. During the second quarter of 2021, two loans receivable with a total amortized cost of $64 million were classified as held for sale. Upon the transfer of these two loans to held for sale, the carrying value was decreased by $11 million to an estimated fair value of $53 million, $8 million of which was previously recognized as a reserve for loan losses. As a result, a $3 million net loss was recognized in impairments and loan loss reserves (recoveries), net during the year ended December 31, 2021. In September 2021, the Company sold one of the loans receivable previously classified as held for sale for its carrying value of $2 million. In November 2021, the Company sold the other loan receivable previously classified as held for sale for its carrying value of $51 million.

These fair value estimates were made for each individual loan classified as held for sale and primarily relied on a market approach, utilizing comparable market transactions, forecasted sales prices, and negotiations with prospective buyers. These estimates are considered to be a Level 3 measurement within the fair value hierarchy, and are subject to inherent uncertainties.

Additionally, in April 2021, the Company sold two mezzanine loans as part of the Discovery SHOP Portfolio disposition (see Note 5), resulting in no gain or loss on sale of the mezzanine loans.

In May 2021, the Company received a $10 million principal repayment related to one of its secured loans. In September 2021, the Company received repayment of the remaining $15 million balance.

In July 2021, the Company received full repayment of the outstanding balance of an $8 million secured loan.

2020 Other Loans Receivable Transactions

In November 2020, the Company sold one mezzanine loan with a $10 million principal balance for $8 million, resulting in a $2 million loss recognized in impairments and loan loss reserves (recoveries), net.

In December 2020, the Company sold one secured loan with a $115 million principal balance for $109 million, resulting in a $6 million loss recognized in impairments and loan loss reserves (recoveries), net.

CCRC Resident Loans

For certain residents that qualify, CCRCs may offer to lend residents the necessary funds to satisfy the entrance fee requirements so that they are able to move into a community while still continuing the process of selling their previous home. The loans are due upon sale of the previous residence. At December 31, 2022 and 2021, the Company held $33 million and $24 million, respectively, of such notes receivable, which are included in mezzanine and other in the table above.

Loans Receivable Internal Ratings

In connection with the Company’s quarterly review process or upon the occurrence of a significant event, loans receivable are reviewed and assigned an internal rating of Performing, Watch List, or Workout. Loans that are deemed Performing meet all present contractual obligations, and collection and timing of all amounts owed is reasonably assured. Watch List Loans are defined as loans that do not meet the definition of Performing or Workout. Workout Loans are defined as loans in which the Company has determined, based on current information and events, that: (i) it is probable it will be unable to collect all amounts due according to the contractual terms of the agreement, (ii) the borrower is delinquent on making payments under the contractual terms of the agreement, and (iii) the Company has commenced action or anticipates pursuing action in the near term to seek recovery of its investment.

The following table summarizes, by year of origination, the Company’s internal ratings for loans receivable, net of unamortized discounts, fees, and reserves for loan losses, as of December 31, 2022 (in thousands):

Investment Type						Year of Origination																																				Total
			2022						2021						2020						2019						2018						Prior
Secured loans
Risk rating:
Performing loans						$	—					$	266,197					$	75,552					$	—					$	—					$	—					$	341,749
Watch list loans						—						—						—						—						—						—						—
Workout loans						—						—						—						—						—						—						—
Total secured loans						$	—					$	266,197					$	75,552					$	—					$	—					$	—					$	341,749
Mezzanine and other
Risk rating:
Performing loans						$	32,410					$	595					$	78					$	—					$	—					$	—					$	33,083
Watch list loans						—						—						—						—						—						—						—
Workout loans						—						—						—						—						—						—						—
Total mezzanine and other						$	32,410					$	595					$	78					$	—					$	—					$	—					$	33,083

Reserve for Loan Losses

The Company 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, individual and portfolio property performance, credit enhancements, liquidity, and other factors. The determination of loan losses also considers concentration of credit risk associated with the senior housing industry to which its loans receivable relate. The Company’s borrowers furnish property, portfolio, and guarantor/operator-level financial statements, among other information, on a monthly or quarterly basis, which the Company utilizes to calculate the debt service coverages used in its assessment of internal ratings, which is a primary credit quality indicator. Debt service coverage information is evaluated together with other property, portfolio, and operator performance information, including revenue, expense, NOI, occupancy, rental rates, capital expenditures, and EBITDA (defined as earnings before interest, tax, and depreciation and amortization), along with other liquidity measures.

In its assessment of current expected credit losses for loans receivable and unfunded loan commitments, the Company utilizes past payment history of its borrowers, current economic conditions, and forecasted economic conditions through the maturity date of each loan to estimate a probability of default and a resulting loss for each loan receivable. Future economic conditions are based primarily on near-term economic forecasts from the Federal Reserve and reasonable assumptions for long-term economic trends.

The following table summarizes the Company’s reserve for loan losses (in thousands):

			December 31, 2022																		December 31, 2021
			Secured Loans						Mezzanine and Other						Total						Secured Loans						Mezzanine and Other						Total
Reserve for loan losses, beginning of period			$	1,804					$	9					$	1,813					$	3,152					$	7,128					$	10,280
Provision for expected loan losses			6,527						7						6,534						793						896						1,689
Expected loan losses related to loans sold or repaid(1)			(51)						(16)						(67)						(2,141)						(8,015)						(10,156)
Reserve for loan losses, end of period			$	8,280					$	—					$	8,280					$	1,804					$	9					$	1,813

_______________________________________

(1)Includes two loans sold or repaid during the year ended December 31, 2022 and six loans sold or repaid during the year ended December 31, 2021.

Additionally, at December 31, 2022 and 2021, a liability of $0.8 million and $0.3 million, respectively, related to expected credit losses for unfunded loan commitments was included in accounts payable, accrued liabilities, and other liabilities.

The change in the reserve for expected loan losses during the year ended December 31, 2022 is primarily due to the following: (i) macroeconomic conditions and (ii) increased interest rates on our variable rate loans.

NOTE 9. Investments in and Advances to Unconsolidated Joint Ventures

The Company owns interests in the following entities that are accounted for under the equity method, excluding investments classified as discontinued operations (dollars in thousands):

																					Carrying Amount
																					December 31,
Entity**(1)**						Segment						Property Count**(2)**			Ownership %****(2)						2022						2021
SWF SH JV						Other						19			54						$	345,978					$	355,394
South San Francisco JVs(3)						Life science						7			70						309,969						—
Life Science JV						Life science						1			49						26,601						25,605
Needham Land Parcel JV(4)						Life science						—			38						15,391						13,566
Medical Office JVs(5)						Medical office						3			20 - 67						8,738						9,069
																					$	706,677					$	403,634

_______________________________________

(1)These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures.

(2)Property counts and ownership percentages are as of December 31, 2022.

(3)Includes seven unconsolidated life science joint ventures in South San Francisco, California in which the Company holds a 70% ownership percentage in each joint venture. These joint ventures have been aggregated herein due to similarity of the investments and operations. See “South San Francisco Joint Ventures” below for further information.

(4)In December 2021, the Company acquired a 38% interest in a life science development joint venture in Needham, Massachusetts for $13 million. Land held for development is excluded from the property count as of December 31, 2022.

(5)Includes two unconsolidated medical office joint ventures in which the Company holds an ownership percentage as follows: (i) Ventures IV (20%) and (ii) Suburban Properties, LLC (67%). During 2021, the Company also held a 30% interest in Ventures III, which issued its final distribution and was dissolved. These joint ventures have been aggregated herein due to similarity of the investments and operations.

At December 31, 2022 and 2021, the aggregate unamortized basis difference of the Company’s investments in unconsolidated joint ventures of $41 million and $42 million, respectively, is primarily attributable to the difference between the amount for which the Company purchased its interest in the entity and the historical carrying value of the net assets of the entity. The difference is being amortized over the remaining useful life of the related assets and is included in equity income (loss) from unconsolidated joint ventures.

Other JVs. In April 2021, the Company sold its two preferred equity investments for their carrying value as part of the Discovery SHOP Portfolio disposition (see Note 5). Prior to the sale, the Company’s ownership percentage in these two unconsolidated joint ventures was as follows: (i) Discovery Naples JV (41%) and (ii) Discovery Sarasota JV (47%).

CCRC JV. In May 2021, the two remaining CCRCs in the CCRC joint venture were sold for $38 million, $19 million of which represents the Company’s 49% interest, resulting in an immaterial gain on sale recorded within equity income (loss) from unconsolidated joint ventures during the year ended December 31, 2021.

South San Francisco JVs. On August 1, 2022, the Company sold a 30% interest in seven life science assets in South San Francisco, California to a sovereign wealth fund (“SWF Partner”) for cash of $126 million. Following this transaction, the Company and the SWF Partner (collectively, the “Members”) share in key decisions of the assets through their voting rights, resulting in the Company deconsolidating the assets, recognizing its retained 70% investment in the South San Francisco joint ventures (the “South San Francisco JVs”) at fair value, and accounting for its investment using the equity method. The fair values of the Company’s retained investment were based on a market approach, utilizing an agreed-upon contractual sales price, which is considered to be a Level 3 measurement within the fair value hierarchy. During the year ended December 31, 2022, the Company recognized a gain upon change of control of $311 million, which is recorded in other income (expense), net.

The Company is entitled to a preferred return, a promote, and certain fees in exchange for development and asset management services provided to the South San Francisco JVs when certain conditions are met.

Concurrently, the Company entered into a master equity transaction agreement with the SWF Partner that provided the Members with an opportunity to participate in a future joint venture in certain development projects currently owned by the Company. In January 2023, the Company and the SWF Partner mutually agreed not to proceed with the joint venture related to these development projects.

NOTE 10. Intangibles

Intangible assets primarily consist of lease-up intangibles and above market tenant lease intangibles. The following table summarizes the Company’s intangible lease assets (dollars in thousands):

						December 31,
Intangible lease assets						2022						2021
Gross intangible lease assets						$	770,285					$	797,675
Accumulated depreciation and amortization						(352,224)						(277,915)
Intangible assets, net(1)						$	418,061					$	519,760
Weighted average remaining amortization period in years						5						6

_______________________________________

(1)Excludes intangible assets reported in assets held for sale of $2 million and zero as of December 31, 2022 and 2021, respectively.

Intangible liabilities consist of below market lease intangibles. The following table summarizes the Company’s intangible lease liabilities (dollars in thousands):

						December 31,
Intangible lease liabilities						2022						2021
Gross intangible lease liabilities						$	237,464					$	234,917
Accumulated depreciation and amortization						(81,271)						(57,685)
Intangible liabilities, net						$	156,193					$	177,232
Weighted average remaining amortization period in years						7						8

The following table sets forth amortization related to intangible assets, net and intangible liabilities, net (in thousands):

						Year Ended December 31,
						2022						2021						2020
Depreciation and amortization expense related to amortization of lease-up intangibles(1)						$	104,885					$	106,106					$	89,301
Rental and related revenues related to amortization of net below market lease liabilities(1)						24,640						20,597						11,717

_______________________________________

(1)Excludes amortization related to assets classified as discontinued operations.

During the year ended December 31, 2022, in conjunction with the Company’s acquisitions of real estate, the Company acquired intangible assets of $7 million and intangible liabilities of $6 million. The intangible assets and liabilities acquired had a weighted average amortization period at acquisition of 7 years and 11 years, respectively.

During the year ended December 31, 2021, in conjunction with the Company’s acquisitions of real estate, the Company acquired intangible assets of $109 million and intangible liabilities of $57 million. The intangible assets and intangible liabilities acquired each had a weighted average amortization period at acquisition of 9 years.

The following table summarizes the estimated annual amortization for each of the five succeeding fiscal years and thereafter (in thousands):

			Rental and Related Revenues						Depreciation and Amortization
2023			$	24,036					$	99,784
2024			22,913						95,570
2025			21,891						83,984
2026			19,397						51,948
2027			15,393						26,349
Thereafter			43,356						51,219
			$	146,986					$	408,854

Goodwill

At each of December 31, 2022 and 2021, the Company’s goodwill balance was $18 million and is recognized in other assets, net on the Consolidated Balance Sheets. See Note 16 for goodwill attributable to the Company’s reportable segments. During the year ended December 31, 2021, the Company recognized a $29 million goodwill impairment charge, recognized within income (loss) from discontinued operations (see Note 6).

NOTE 11. Debt

Bank Line of Credit and Term Loans

On May 23, 2019, the Company executed a $2.5 billion unsecured revolving line of credit facility, with a maturity date of May 23, 2023 and two six-month extension options, subject to certain customary conditions. Also in May 2019, the Company entered into a $250 million unsecured term loan facility, with a maturity date of May 23, 2024 (the “2019 Term Loan”). In July 2021, the Company repaid the $250 million 2019 Term Loan.

In September 2021, the Company executed an amended and restated unsecured revolving line of credit (the “Revolving Facility”), to increase total revolving commitments from $2.5 billion to $3.0 billion and extend the maturity date to January 20, 2026. This maturity date may be further extended pursuant to two six-month extension options, subject to certain customary conditions. Borrowings under the Revolving Facility accrue interest at the London Interbank Offered Rate (“LIBOR”) plus a margin that depends on the credit ratings of the Company’s senior unsecured long-term debt. The Company also pays a facility fee on the entire revolving commitment that depends on its credit ratings. Additionally, the Revolving Facility includes a sustainability-linked pricing component whereby the applicable margin may be reduced by up to 0.025% based on the Company’s achievement of specified sustainability-linked metrics, subject to certain conditions. Based on the Company’s credit ratings at December 31, 2022, and inclusive of achievement of a sustainability-linked metric during the year ended December 31, 2021, the margin on the Revolving Facility was 0.75% and the facility fee was 0.15%. At December 31, 2022 and 2021, the Company had no balance outstanding under the Revolving Facility.

The Revolving Facility includes a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to $750 million, subject to securing additional commitments. Further, the Revolving Facility includes customary LIBOR replacement language, including, but not limited to, the use of rates based on SOFR.

The Revolving Facility also contains certain financial restrictions and other customary requirements, including financial covenants and cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreement: (i) limit the ratio of Enterprise Total Indebtedness to Enterprise Gross Asset Value to 60%; (ii) limit the ratio of Enterprise Secured Debt to Enterprise Gross Asset Value to 40%; (iii) limit the ratio of Enterprise Unsecured Debt to Enterprise Unencumbered Asset Value to 60%; (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times; and (v) require a minimum Consolidated Tangible Net Worth of $7.7 billion. The Company believes it was in compliance with each of these covenants at December 31, 2022.

On August 22, 2022, the Company executed a term loan agreement (the “2022 Term Loan Agreement”) that provided for two senior unsecured delayed draw term loans in an aggregate principal amount of up to $500 million (the “2022 Term Loan Facilities”). The 2022 Term Loan Facilities were available to be drawn from time to time during a 180-day period after closing, subject to customary borrowing conditions. $250 million of the 2022 Term Loan Facilities has an initial stated maturity of 4.5 years, which may be extended for a one-year period subject to certain customary conditions. The other $250 million of the 2022 Term Loan Facilities has a stated maturity of 5 years with no option to extend. In October 2022, the entirety of the $500 million under the 2022 Term Loan Facilities was drawn. Therefore, at December 31, 2022, the Company had $500 million outstanding under the 2022 Term Loan Facilities.

Loans outstanding under the 2022 Term Loan Facilities accrue interest at adjusted SOFR plus a margin that depends on the credit ratings of the Company’s senior unsecured long-term debt. The 2022 Term Loan Agreement also includes a sustainability-linked pricing component whereby the applicable margin under the 2022 Term Loan Facilities may be reduced by 0.01% based on the Company’s achievement of specified sustainability-linked metrics. Based on the Company’s credit ratings as of December 31, 2022, the margin on the 2022 Term Loan Facilities was 0.85%. The 2022 Term Loan Agreement includes a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to an additional $500 million, subject to securing additional commitments.

The 2022 Term Loan Agreement also contains certain financial restrictions and other customary requirements, including financial covenants and cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreement: (i) limit the ratio of Enterprise Total Indebtedness to Enterprise Gross Asset Value to 60%; (ii) limit the ratio of Enterprise Secured Debt to Enterprise Gross Asset Value to 40%; (iii) limit the ratio of Enterprise Unsecured Debt to Enterprise Unencumbered Asset Value to 60%; (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times; and (v) require a minimum Consolidated Tangible Net Worth of $7.7 billion. The Company believes it was in compliance with each of these covenants at December 31, 2022.

In August 2022, the Company entered into two forward-starting interest rate swap instruments that are designated as cash flow hedges (see Note 22). The 2022 Term Loan Facilities associated with these interest rate swap instruments are reported as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instruments. Based on the Company’s credit ratings as of December 31, 2022, the 2022 Term Loan Facilities had a blended fixed effective interest rate of 3.77%, inclusive of the impact of these interest rate swap instruments and amortization of the related debt issuance costs.

Commercial Paper Program

In September 2019, the Company established an unsecured commercial paper program (the “Commercial Paper Program”). Under the terms of the Commercial Paper Program, the Company may issue, from time to time, unsecured short-term debt securities with varying maturities. Amounts available under the Commercial Paper Program may be borrowed, repaid, and re-borrowed from time to time. At December 31, 2021, the maximum aggregate face or principal amount that could be outstanding at any one time was $1.5 billion. In July 2022, the Company increased the maximum aggregate face or principal amount that can be outstanding at any one time to $2.0 billion. Amounts borrowed under the Commercial Paper Program will be sold on terms that are customary for the U.S. commercial paper market and will be at least equal in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness. The Company uses its Revolving Facility as a liquidity backstop for the repayment of unsecured short-term debt securities issued under the Commercial Paper Program. At December 31, 2022, the Company had $996 million of securities outstanding under the Commercial Paper Program, with original maturities of approximately two months and a weighted average interest rate of 4.90%. At December 31, 2021, the Company had $1.17 billion of securities outstanding under the Commercial Paper Program, with original maturities of approximately two months and a weighted average interest rate of 0.32%.

Senior Unsecured Notes

At each of December 31, 2022 and 2021, the Company had senior unsecured notes outstanding with an aggregate principal balance of $4.7 billion. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions, and other customary terms. The Company believes it was in compliance with these covenants at December 31, 2022.

During the year ended December 31, 2022, the Company did not issue, repurchase, or redeem any senior unsecured notes.

In 2021, the Company completed two green bond offerings. The net proceeds from both green bonds have been allocated to eligible green projects, and the Company may choose to re-allocate net proceeds from such offerings to one or more other eligible green projects.

The following table summarizes the Company’s senior unsecured notes issuances, including the green bond offerings discussed above, for the periods presented (dollars in thousands):

Issue Date						Amount						Coupon Rate						Maturity Date
Year ended December 31, 2021:
November 24, 2021						$	500,000					2.13		%				2028
July 12, 2021						450,000						1.35		%				2027
Year ended December 31, 2020:
June 23, 2020						600,000						2.88		%				2031

In January 2023, the Company completed a senior unsecured note issuance as summarized in the following table (dollars in thousands):

Issue Date						Amount						Coupon Rate						Maturity Date
January 17, 2023						$	400,000					5.25		%				2032

The following table summarizes the Company’s senior unsecured notes repurchases and redemptions for the periods presented (dollars in thousands):

Payoff Date						Amount						Coupon Rate						Maturity Date
Year ended December 31, 2021*(1)**:*
May 19, 2021						$	251,806					3.40		%				2025
May 19, 2021						298,194						4.00		%				2025
February 26, 2021						188,000						4.25		%				2023
February 26, 2021						149,000						4.20		%				2024
February 26, 2021						331,000						3.88		%				2024
January 28, 2021						112,000						4.25		%				2023
January 28, 2021						201,000						4.20		%				2024
January 28, 2021						469,000						3.88		%				2024
Year ended December 31, 2020*(2)**:*
July 9, 2020						300,000						3.15		%				2022
June 24, 2020						250,000						4.25		%				2023

_______________________________________

(1)As a result of the repurchases and redemptions of these senior unsecured notes, the Company recognized an aggregate $225 million loss on debt extinguishment during the year ended December 31, 2021.

(2)As a result of the repurchases and redemptions of these senior unsecured notes, the Company recognized an aggregate $44 million loss on debt extinguishment during the year ended December 31, 2020.

Mortgage Debt

At December 31, 2022 and 2021, the Company had $345 million and $350 million, respectively, in aggregate principal of mortgage debt outstanding, which was secured by 18 healthcare facilities, with an aggregate carrying value of $793 million and $811 million, respectively.

Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets, and is non-recourse. Mortgage debt typically restricts transfer of the encumbered assets, prohibits additional liens, restricts prepayment, requires payment of real estate taxes, requires maintenance of the assets in good condition, requires insurance on the assets, and includes conditions to obtain lender consent to enter into or terminate material leases. Some of the mortgage debt may require tenants or operators to maintain compliance with the applicable leases or operating agreements of such real estate assets.

During the years ended December 31, 2022, 2021, and 2020 the Company made aggregate principal repayments of mortgage debt of $5 million, $9 million, and $5 million, respectively (excluding mortgage debt on assets held for sale and discontinued operations).

In April 2021, in conjunction with the acquisition of the MOB Portfolio, the Company originated $142 million of secured mortgage debt (see Note 4) that matures in May 2026. In April 2022, the Company terminated its existing interest rate cap instruments associated with this variable rate mortgage debt and entered into two interest rate swap instruments that are designated as cash flow hedges and mature in May 2026 (see Note 22). The variable rate mortgage debt associated with these interest rate swap instruments is reported as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instrument.

Debt Maturities

The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at December 31, 2022 (dollars in thousands):

																								Senior Unsecured Notes**(2)**												Mortgage Debt**(3)**
Year						Bank Line of Credit						Commercial Paper**(1)**						Term Loans						Amount						Interest Rate						Amount						Interest Rate						Total
2023						$	—					$	—					$	—					$	—					—		%				$	90,089					3.80		%				$	90,089
2024						—						—						—						—						—		%				7,024						6.14		%				7,024
2025						—						—						—						800,000						3.92		%				3,209						3.82		%				803,209
2026						—						995,606						—						650,000						3.40		%				244,523						4.48		%				1,890,129
2027						—						—						500,000						450,000						1.54		%				366						5.91		%				950,366
Thereafter						—						—						—						2,800,000						3.50		%				—						—		%				2,800,000
						—						995,606						500,000						4,700,000												345,211												6,540,817
Premiums, (discounts), and debt issuance costs, net						—						—						(4,043)						(40,549)												1,388												(43,204)
						$	—					$	995,606					$	495,957					$	4,659,451											$	346,599											$	6,497,613

_______________________________________

(1)Commercial Paper Program borrowings are backstopped by the Revolving Facility. As such, the Company calculates the weighted average remaining term of its Commercial Paper Program borrowings using the maturity date of the Revolving Facility.

(2)Effective interest rates on the senior unsecured notes range from 1.54% to 6.87% with a weighted average effective interest rate of 3.37% and a weighted average maturity of 6 years.

(3)Effective interest rates on the mortgage debt range from 3.44% to 7.93% with a weighted average effective interest rate of 4.33% and a weighted average maturity of 3 years. These interest rates include the impact of designated interest rate swap instruments, which effectively fix the interest rate on certain variable rate debt.

NOTE 12. Commitments and Contingencies

Legal Proceedings

From time to time, the Company is a party to legal proceedings, lawsuits and other claims that arise in the ordinary course of the Company’s business. The Company is not aware of any legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company’s financial condition, results of operations, or cash flows. The Company’s policy is to expense legal costs as they are incurred.

DownREITs and Other Partnerships

In connection with the formation of DownREITs, members may contribute appreciated real estate to a DownREIT in exchange for DownREIT units. These contributions are generally tax-deferred, so that the pre-contribution gain related to the property is not taxed to the member. However, if a contributed property is later sold by the DownREIT, the unamortized pre-contribution gain that exists at the date of sale is specifically allocated and taxed to the contributing members. In many of the DownREITs, the Company has entered into indemnification agreements with those members who contributed appreciated property into the DownREIT. Under these indemnification agreements, if any of the appreciated real estate contributed by the members is sold by the DownREIT in a taxable transaction within a specified number of years, the Company will reimburse the affected members for the federal and state income taxes associated with the pre-contribution gain that is specially allocated to the affected member under the Internal Revenue Code (“make-whole payments”). These make-whole payments include a tax gross-up provision. These indemnification agreements have expirations terms that range through 2039 on a total of 29 properties.

Additionally, the Company owns a 49% interest in the Life Science JV (see Note 9). If the property in the joint venture is sold in a taxable transaction, the Company is generally obligated to indemnify its joint venture partner for its federal and state income taxes associated with the gain that existed at the time of the contribution to the joint venture.

Commitments

The following table summarizes the Company’s material commitments, excluding debt service obligations (see Note 11), obligations as the lessee under operating leases (see Note 7), and potential future obligations related to redeemable noncontrolling interests (see Note 13) at December 31, 2022 (in thousands):

			Amount
Development and redevelopment commitments(1)			$	219,059
Lease and other contractual commitments(2)			33,164
Construction loan commitments(3)			39,965
			$	292,188

_______________________________________

(1)Represents construction and other commitments as of December 31, 2022 for developments and redevelopments in progress and includes allowances for tenant improvements that the Company has provided as a lessor.

(2)Represents the Company’s commitments, as lessor, under signed leases and contracts for operating properties as of December 31, 2022 and includes allowances for tenant improvements and leasing commissions. Excludes allowances for tenant improvements related to developments and redevelopments in progress for which the Company has executed an agreement with a general contractor to complete the tenant improvements (recognized in the “Development and redevelopment commitments” line).

(3)Represents loan commitments as of December 31, 2022 to fund additional loans for senior housing redevelopment and capital expenditure projects.

Credit Enhancement Guarantee

Prior to December 31, 2020, certain of the Company’s senior housing facilities served as collateral for debt that was owed by a previous owner of the facilities. This indebtedness was guaranteed by the previous owner who has an investment grade credit rating. In conjunction with certain of the Company’s planned dispositions of SHOP assets, during October 2020, the debt to which the Company’s assets served as collateral was defeased. As part of that defeasance, the Company paid approximately $11 million of the defeasance premium during the year ended December 31, 2020, which was recognized as a transaction cost expense and reported in income (loss) from discontinued operations.

Environmental Costs

Various environmental laws govern certain aspects of the ongoing management and operation of our facilities, including those related to presence of asbestos-containing materials. The presence of, or the failure to manage and/or remediate, such materials may adversely affect the occupancy and performance of the Company’s facilities. The Company monitors its properties for the presence of such hazardous or toxic substances and is not aware of any environmental liability with respect to the properties that would have a material adverse effect on the Company’s business, financial condition, or results of operations. The Company carries environmental insurance and believes that the policy terms, conditions, limitations, and deductibles are adequate and appropriate under the circumstances, given the relative risk of loss, the cost of such coverage, and current industry practice.

General Uninsured Losses

The Company obtains various types of insurance to mitigate the impact of property, business interruption, liability, workers’ compensation, flood, windstorm, earthquake, environmental, cyber, and terrorism related losses. The Company attempts to obtain appropriate policy terms, conditions, limits, and deductibles considering the relative risk of loss, the cost of such coverage, and current industry practice. There are, however, certain types of extraordinary losses, such as those due to acts of war or other events that may be either uninsurable or not economically insurable. In addition, the Company has a large number of properties that are exposed to earthquake, flood, and windstorm occurrences for which the related insurances carry high deductibles and have limits.

NOTE 13. Equity and Redeemable Noncontrolling Interests

Dividends

On February 1, 2023, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.30 per share. The common stock cash dividend will be paid on February 23, 2023 to stockholders of record as of the close of business on February 9, 2023.

During the years ended December 31, 2022, 2021, and 2020, the Company declared and paid common stock cash dividends of $1.20, $1.20, and $1.48 per share, respectively.

At-The-Market Equity Offering Program

In February 2020, the Company established an at-the-market equity offering program (as amended from time to time, the “ATM Program”), which was most recently amended in May 2021 to increase the size of the program from $1.25 billion to $1.5 billion, pursuant to which shares of common stock having an aggregate gross sales price of up to $1.5 billion may be sold (i) by the Company through a consortium of banks acting as sales agents or directly to the banks acting as principals or (ii) by a consortium of banks acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement (each, an “ATM forward contract”). The use of ATM forward contracts allows the Company to lock in a share price on the sale of shares at the time the ATM forward contract is effective, but defer receiving the proceeds from the sale of shares until a later date.

ATM forward contracts generally have a one to two year term. At any time during the term, the Company may settle a forward sale by delivery of physical shares of common stock to the forward seller or, at the Company’s election, in cash or net shares. The forward sale price the Company expects to receive upon settlement of outstanding ATM forward contracts will be the initial forward price established upon the effective date, subject to adjustments for: (i) accrued interest, (ii) the forward purchasers’ stock borrowing costs, and (iii) certain fixed price reductions during the term of the ATM forward contract.

At December 31, 2022, $1.18 billion of the Company’s common stock remained available for sale under the ATM Program.

ATM Forward Contracts

During the year ended December 31, 2020, the Company utilized the forward provisions under a previous ATM program established in 2019 (the “2019 ATM Program”) to allow for the sale of an aggregate of 2.0 million shares of its common stock at an initial weighted average net price of $35.23 per share, after commissions. Additionally, during the year ended December 31, 2020, the Company settled 16.8 million shares previously outstanding under the 2019 ATM Program at a weighted average net price of $31.38 per share, after commissions, resulting in net proceeds of $528 million. At December 31, 2020, no shares remained outstanding under the 2019 ATM Program.

During the year ended December 31, 2021, the Company utilized the forward provisions under the ATM Program to allow for the sale of an aggregate of 9.1 million shares of its common stock at an initial weighted average net price of $35.25 per share, after commissions. None of these shares were settled during the year and therefore, all 9.1 million shares remained outstanding at December 31, 2021.

During the year ended December 31, 2022, the Company settled all 9.1 million shares previously outstanding under ATM forward contracts at a weighted average net price of $34.01 per share, after commissions, resulting in net proceeds of $308 million. Therefore, at December 31, 2022, no shares remained outstanding under ATM forward contracts.

ATM Direct Issuances

During the years ended December 31, 2022, 2021, and 2020, there were no direct issuances of shares of common stock under the ATM program.

Forward Equity Offerings

November 2019 Offering. In November 2019, the Company entered into a forward equity sales agreement (the “2019 forward equity sales agreement”) to sell an aggregate of 15.6 million shares of its common stock (including shares sold through the exercise of underwriters’ options) at an initial net price of $34.46 per share, after underwriting discounts and commissions, which was subject to adjustments for: (i) accrued interest, (ii) the forward purchasers’ stock borrowing costs, and (iii) certain fixed price reductions during the term of the agreement. During the year ended December 31, 2020, the Company settled all 15.6 million shares under the 2019 forward equity sales agreement at a weighted average net price of $34.18 per share, resulting in net proceeds of $534 million (total net proceeds of $1.06 billion, when aggregated with the net proceeds from settling ATM forward contracts under the 2019 ATM Program, as discussed above). Therefore, at December 31, 2022, 2021, and 2020, no shares remained outstanding under the 2019 forward equity sales agreement.

Share Repurchase Program

On August 1, 2022, the Company’s Board of Directors approved a share repurchase program under which the Company may acquire shares of its common stock in the open market up to an aggregate purchase price of $500 million (the “Share Repurchase Program”). Purchases of common stock under the Share Repurchase Program may be exercised at the Company’s discretion with the timing and number of shares repurchased depending on a variety of factors, including price, corporate and regulatory requirements, and other corporate liquidity requirements and priorities. The Share Repurchase Program expires in August 2024 and may be suspended or terminated at any time without prior notice. Under 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 year ended December 31, 2022, the Company repurchased 2.1 million shares of its common stock at a weighted average price of $27.16 per share for a total of $56 million. Therefore, at December 31, 2022, $444 million of the Company’s common stock remained available for repurchase under the Share Repurchase Program.

Other Common Stock Activities

The following table summarizes the Company’s other common stock activities (in thousands):

			Year Ended December 31,
			2022						2021						2020
Dividend Reinvestment and Stock Purchase Plan			$	59					$	81					$	181
Conversion of DownREIT units			27						8						120
Exercise of stock options			—						97						54
Vesting of restricted stock units			820						924						668
Repurchase of common stock			2,418						418						298

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the Company’s accumulated other comprehensive income (loss) (in thousands):

			December 31,
			2022						2021
Unrealized gains (losses) on derivatives, net			$	30,145					$	—
Supplemental Executive Retirement Plan minimum liability			(2,011)						(3,147)
Total accumulated other comprehensive income (loss)			$	28,134					$	(3,147)

The Company has a defined benefit pension plan, known as the Supplemental Executive Retirement Plan, with one plan participant, the former Chief Executive Officer (“CEO”) of the Company who departed in 2003. Changes to the Supplemental Executive Retirement Plan minimum liability are reflected in other comprehensive income (loss).

Redeemable Noncontrolling Interests

Arrangements with noncontrolling interest holders are assessed for appropriate balance sheet classification based on the redemption and other rights held by the noncontrolling interest holder. Certain of the Company’s noncontrolling interest holders have the ability to put their equity interests to the Company upon specified events or after the passage of a predetermined period of time. Each put option is payable in cash and subject to increases in redemption value in the event that the underlying property generates specified returns for the Company and meets certain promote thresholds pursuant to the respective agreements. Accordingly, the Company records redeemable noncontrolling interests outside of permanent equity and presents the redeemable noncontrolling interests at the greater of their carrying amount or redemption value at the end of each reporting period.

During the year ended December 31, 2021, one of the redeemable noncontrolling interests met the conditions for redemption and the related put option was exercised during the year then ended. Accordingly, the Company made a cash payment for the redemption value of $60 million to the related noncontrolling interest holder during the year ended December 31, 2021 and acquired the redeemable noncontrolling interest associated with this entity. During the year ended December 31, 2022, one of the redeemable noncontrolling interests met the conditions for redemption, but was not yet exercised. The three remaining redeemable noncontrolling interests had not yet met the conditions for redemption as of December 31, 2022. Two of the interests will become redeemable following the passage of a predetermined amount of time, which will occur in 2023 and 2024. The fourth interest will become redeemable at the earlier of a predetermined passage of time or stabilization of the underlying development property, which is expected to occur in 2023. The redemption values are subject to change based on the assessment of redemption value at each redemption date.

Noncontrolling Interests

The non-managing member units of the Company’s DownREITs are exchangeable for an amount of cash approximating the then-current market value of shares of the Company’s common stock or, at the Company’s option, shares of the Company’s common stock (subject to certain adjustments, such as stock splits and reclassifications). Upon exchange of DownREIT units for the Company’s common stock, the carrying amount of the DownREIT units is reclassified to stockholders’ equity. At December 31, 2022, there were five million DownREIT units (seven million shares of Healthpeak common stock are issuable upon conversion) outstanding in seven DownREIT LLCs, for all of which the Company acts as the managing member. At December 31, 2022, the carrying and market values of the five million DownREIT units were $200 million and $183 million, respectively. At December 31, 2021, the carrying and market values of the five million DownREIT units were $201 million and $264 million, respectively.

NOTE 14. Earnings Per Common Share

Basic income (loss) per common share (“EPS”) is computed based on the weighted average number of common shares outstanding. Diluted income (loss) per common share is computed based on the weighted average number of common shares outstanding plus the impact of forward equity sales agreements using the treasury stock method and common shares issuable from the assumed conversion of DownREIT units, stock options, certain performance restricted stock units, and unvested restricted stock units. Only those instruments having a dilutive impact on the Company’s basic income (loss) per share are included in diluted income (loss) per share during the periods presented.

Restricted stock and certain performance restricted stock units are considered participating securities, because dividend payments are not forfeited even if the underlying award does not vest, and require use of the two-class method when computing basic and diluted earnings per share.

Refer to Note 13 for a discussion of the sale of shares under and settlement of forward sales agreements during the periods presented. The Company considered the potential dilution resulting from the forward agreements to the calculation of earnings per share. At inception, the agreements do not have an effect on the computation of basic EPS as no shares are delivered until settlement. However, the Company uses the treasury stock method to calculate the dilution, if any, resulting from the forward sales agreements during the period of time prior to settlement. The aggregate effect on the Company’s diluted weighted-average common shares for the years ended December 31, 2022, 2021, and 2020 was zero, 1 thousand, and 201 thousand weighted-average incremental shares, respectively, from the forward equity sales agreements.

The following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts):

			Year Ended December 31,
			2022						2021						2020
Numerator
Income (loss) from continuing operations			$	513,540					$	137,728					$	160,507
Noncontrolling interests’ share in continuing operations			(15,975)						(17,851)						(14,394)
Income (loss) from continuing operations attributable to Healthpeak Properties, Inc.			497,565						119,877						146,113
Less: Participating securities’ share in continuing operations			(2,657)						(3,269)						(2,416)
Income (loss) from continuing operations applicable to common shares			494,908						116,608						143,697
Income (loss) from discontinued operations			2,884						388,202						267,746
Noncontrolling interests’ share in discontinued operations			—						(2,539)						(296)
Net income (loss) applicable to common shares - basic and diluted			$	497,792					$	502,271					$	411,147
Denominator
Basic weighted average shares outstanding			538,809						538,930						530,555
Dilutive potential common shares - equity awards(1)			338						310						300
Dilutive potential common shares - forward equity agreements(2)			—						1						201
Diluted weighted average common shares			539,147						539,241						531,056
Basic earnings (loss) per common share
Continuing operations			$	0.92					$	0.22					$	0.27
Discontinued operations			0.00						0.71						0.50
Net income (loss) applicable to common shares			$	0.92					$	0.93					$	0.77
Diluted earnings (loss) per common share:
Continuing operations			$	0.92					$	0.22					$	0.27
Discontinued operations			0.00						0.71						0.50
Net income (loss) applicable to common shares			$	0.92					$	0.93					$	0.77

_______________________________________

(1)For all periods presented, represents the dilutive impact of 1 million outstanding equity awards (restricted stock units and stock options).

(2)For the year ended December 31, 2022, all 9.1 million shares that were settled during the year then ended were anti-dilutive. For the year ended December 31, 2021, all 9.1 million shares that were not settled during the year then ended were anti-dilutive. For the year ended December 31, 2020, represents the dilutive impact of 32 million shares that were settled during the year then ended.

For the years ended December 31, 2022, 2021, and 2020, all 7 million shares issuable upon conversion of DownREIT units were not included because they were anti-dilutive.

NOTE 15. Compensation Plans

Stock Based Compensation

On May 11, 2006, the Company’s stockholders approved the 2006 Performance Incentive Plan, which was amended and restated in 2009 (“the 2006 Plan”). On May 1, 2014, the Company’s stockholders approved the 2014 Performance Incentive Plan (“the 2014 Plan”) (collectively, the “Plans”). Following the adoption of the 2014 Plan, no new awards will be issued under the 2006 Plan. The Plans provide for the granting of stock-based compensation, including stock options, restricted stock, and restricted stock units to officers, employees, and directors in connection with their employment with or services provided to the Company. The maximum number of shares reserved for awards under the 2014 Plan is 33 million shares, and, as of December 31, 2022, 25 million of the reserved shares under the 2014 Plan are available for future awards, of which 16 million shares may be issued as restricted stock or restricted stock units.

Total share-based compensation cost was $32 million, $23 million, and $21 million for the years ended December 31, 2022, 2021, and 2020, respectively, which was recognized in general and administrative expenses. Of the total share-based compensation cost, $4 million, $3 million, and $2 million was capitalized as part of real estate for the years ended December 31, 2022, 2021, and 2020, respectively. The year ended December 31, 2022 includes $10 million of severance-related charges resulting from a decrease in the requisite service period of restricted stock units associated with the Company's former CEO, as further described below. As of December 31, 2022, there was $19 million of future expense related to unvested share-based compensation arrangements granted under the Company’s incentive plans, which is expected to be recognized over a weighted average period of 1.5 years associated with future employee service.

Departure of Executives

On October 6, 2022, the Company and Thomas M. Herzog mutually agreed that Mr. Herzog would step down from his position as CEO and from the board of directors of the Company, effective immediately. On November 1, 2022, the Company and Troy E. McHenry mutually agreed that Mr. McHenry would step down from his position as Chief Legal Officer and General Counsel, effective immediately. During the fourth quarter of 2022, the Company recognized total severance-related charges of $33 million in general and administrative expenses on the Consolidated Statements of Operations, $10 million of which related to a decrease in the requisite service period of restricted stock units as discussed above. These restricted stock units will continue to vest in accordance with the original terms of the grants. As of December 31, 2022, $15 million of these severance-related charges have not yet been paid and were included in accounts payable, accrued liabilities, and other liabilities on the Consolidated Balance Sheets.

Stock Options

There have been no grants of stock options since 2014. Stock options outstanding and exercisable were 0.3 million at December 31, 2022 and 0.4 million at December 31, 2021. There were no stock options exercised under the Plans for the year ended December 31, 2022. For the years ended December 31, 2021 and 2020, proceeds received from stock options exercised under the Plans were $3 million, and $2 million, respectively. No compensation cost related to stock options was incurred during the years ended December 31, 2022, 2021, and 2020.

Restricted Stock Awards

Under the Plans, restricted stock awards, including restricted stock units and performance stock units are granted subject to certain restrictions. Conditions of vesting are determined at the time of grant. Restrictions on certain awards generally lapse, as provided in the Plans or in the applicable award agreement, upon retirement, a change in control or other specified events. The fair market value of restricted stock awards, both time vesting and those subject to specific performance criteria, are expensed over the period of vesting. Restricted stock units, which vest based solely upon passage of time generally vest over a period of three to six years. The fair value of restricted stock units is determined based on the closing market price of the Company’s shares on the grant date. Performance stock units, which are restricted stock awards that vest dependent upon attainment of various levels of performance that equal or exceed threshold levels, generally vest in their entirety at the end of a three year performance period. The number of shares that ultimately vest can vary from 0% to 200% of target depending on the level of achievement of the performance criteria. The fair value of performance stock units is determined based on the Monte Carlo valuation model primarily using the following assumptions for awards granted during the years ended December 31, 2022, 2021, and 2020, respectively: (i) expected term of 3 years, 3 years, and 3 years (equal to the remaining performance period at the grant date), (ii) historical volatility of 38.9%, 39.1%, and 20.0%, (iii) dividend yield of 3.5%, 4.0%, and 4.2%, (iv) risk-free rate of 1.8%, 0.2%, and 1.4%, and (v) post-vesting restrictions discount of 5.8%, 12.9%, and 0.0%. The total grant date fair value of restricted stock and performance based units for the years ended December 31, 2022, 2021, and 2020 was $27 million, $23 million, and $24 million, respectively. The total fair value (at vesting) of restricted stock and performance based units for the years ended December 31, 2022, 2021, and 2020 was $27 million, $29 million, and $20 million, respectively. The compensation cost recognized for all restricted stock awards is net of actual forfeitures.

Upon vesting of restricted stock awards, the participant is required to pay the related tax withholding obligation. The Company reduces the number of common stock shares delivered to pay the employee tax withholding obligation. The value of the shares withheld is dependent on the closing market price of the Company’s common stock on the trading date prior to the relevant transaction occurring. During the years ended December 31, 2022, 2021, and 2020, the Company withheld 356,000, 418,000, and 298,000 shares, respectively, to offset tax withholding obligations with respect to the vesting of the restricted stock and performance restricted stock unit awards.

Holders of restricted stock awards, including restricted stock units and performance stock units, are generally entitled to receive dividends equal to the amount that would be paid on an equivalent number of shares of common stock.

The following table summarizes restricted stock award activity, including performance stock units, for the year ended December 31, 2022 (units in thousands):

			Restricted Stock Units						Weighted Average Grant Date Fair Value
Unvested at January 1, 2022			1,692						$	33.72
Granted			983						32.94
Vested			(820)						32.87
Forfeited			(146)						34.02
Unvested at December 31, 2022			1,709						$	33.66

NOTE 16. Segment Disclosures

The Company’s reportable segments, based on how its chief operating decision maker (“CODM”) evaluates the business and allocates resources, are as follows: (i) life science, (ii) medical office, and (iii) CCRC. The Company has non-reportable segments that are comprised primarily of the Company’s interests in an unconsolidated JV that owns 19 senior housing assets (the “SWF SH JV”), loans receivable, and marketable debt securities. The accounting policies of the segments are the same as those described in the Company’s Summary of Significant Accounting Policies (see Note 2).

The Company evaluates performance based on property Adjusted NOI. NOI is defined as real estate revenues (inclusive of rental and related revenues, resident fees and services, income from direct financing leases, and government grant income and exclusive of interest income), less property level operating expenses; NOI excludes all other financial statement amounts included in net income (loss). Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, termination fees, actuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee income and expense.

NOI and Adjusted NOI are non-GAAP supplemental measures that are calculated as NOI and Adjusted NOI from consolidated properties, plus the Company’s share of NOI and Adjusted NOI from unconsolidated joint ventures (calculated by applying the Company’s actual ownership percentage for the period), less noncontrolling interests’ share of NOI and Adjusted NOI from consolidated joint ventures (calculated by applying the Company’s actual ownership percentage for the period). Management utilizes its share of NOI and Adjusted NOI in assessing its performance as the Company has various joint ventures that contribute to its performance. The Company does not control its unconsolidated joint ventures, and the Company’s share of amounts from unconsolidated joint ventures do not represent the Company’s legal claim to such items. The Company’s share of NOI and Adjusted NOI should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP. Management believes that Adjusted NOI is an important supplemental measure because it provides relevant and useful information by reflecting only income and operating expense items that are incurred at the property level and presenting it on an unlevered basis. Additionally, management believes that net income (loss) is the most directly comparable GAAP measure to NOI and Adjusted NOI. NOI and Adjusted NOI should not be viewed as alternative measures of operating performance to net income (loss) as defined by GAAP since they do not reflect various excluded items.

Non-segment assets consist of assets in the Company’s other non-reportable segments and corporate non-segment assets. Corporate non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, accounts receivable, net, loans receivable, marketable debt securities, other assets, real estate assets held for sale and discontinued operations, and liabilities related to assets held for sale.

The following tables summarize information for the reportable segments (in thousands):

For the year ended December 31, 2022:

						Life Science						Medical Office						CCRC						Other Non-reportable						Corporate Non-segment						Total
Total revenues						$	817,573					$	725,370					$	494,935					$	23,300					$	—					$	2,061,178
Government grant income(1)						—						—						6,765						—						—						6,765
Less: Interest income						—						—						—						(23,300)						—						(23,300)
Healthpeak’s share of unconsolidated joint venture total revenues						9,921						2,999						—						73,885						—						86,805
Healthpeak’s share of unconsolidated joint venture government grant income						—						—						380						498						—						878
Noncontrolling interests’ share of consolidated joint venture total revenues						(268)						(35,717)						—						—						—						(35,985)
Operating expenses						(209,143)						(253,309)						(400,539)						—						—						(862,991)
Healthpeak’s share of unconsolidated joint venture operating expenses						(2,883)						(1,178)						—						(57,632)						—						(61,693)
Noncontrolling interests’ share of consolidated joint venture operating expenses						87						10,317						—						—						—						10,404
Adjustments to NOI(2)						(62,754)						(15,513)						2,300						169						—						(75,798)
Adjusted NOI						552,533						432,969						103,841						16,920						—						1,106,263
Plus: Adjustments to NOI(2)						62,754						15,513						(2,300)						(169)						—						75,798
Interest income						—						—						—						23,300						—						23,300
Interest expense						—						(6,900)						(7,509)						—						(158,535)						(172,944)
Depreciation and amortization						(302,649)						(279,546)						(128,374)						—						—						(710,569)
General and administrative						—						—						—						—						(131,033)						(131,033)
Transaction costs						(387)						(1,255)						(725)						—						(2,486)						(4,853)
Impairments and loan loss reserves, net						—						—						—						(7,004)						—						(7,004)
Gain (loss) on sales of real estate, net						3,744						10,659						—						(5,325)						—						9,078
Other income (expense), net						311,939						12,709						(1,380)						(13)						3,013						326,268
Less: Government grant income						—						—						(6,765)						—						—						(6,765)
Less: Healthpeak’s share of unconsolidated joint venture NOI						(7,038)						(1,821)						(380)						(16,751)						—						(25,990)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI						181						25,400						—						—						—						25,581
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures						621,077						207,728						(43,592)						10,958						(289,041)						507,130
Income tax benefit (expense)						—						—						—						—						4,425						4,425
Equity income (loss) from unconsolidated joint ventures						(972)						852						539						1,566						—						1,985
Income (loss) from continuing operations						620,105						208,580						(43,053)						12,524						(284,616)						513,540
Income (loss) from discontinued operations						—						—						—						—						2,884						2,884
Net income (loss)						$	620,105					$	208,580					$	(43,053)					$	12,524					$	(281,732)					$	516,424

_______________________________________

(1)Represents government grant income received under the CARES Act, which is recorded in other income (expense), net in the Consolidated Statements of Operations (see Note 2).

(2)Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, and termination fees. Includes the Company’s share of income (loss) generated by unconsolidated joint ventures and excludes noncontrolling interests’ share of income (loss) generated by consolidated joint ventures.

For the year ended December 31, 2021:

						Life Science						Medical Office						CCRC						Other Non-reportable						Corporate Non-segment						Total
Total revenues						$	715,844					$	671,242					$	471,325					$	37,773					$	—					$	1,896,184
Government grant income(1)						—						—						1,412						—						—						1,412
Less: Interest income						—						—						—						(37,773)						—						(37,773)
Healthpeak’s share of unconsolidated joint venture total revenues						5,757						2,882						6,903						67,835						—						83,377
Healthpeak’s share of unconsolidated joint venture government grant income						—						—						200						1,549						—						1,749
Noncontrolling interests’ share of consolidated joint venture total revenues						(292)						(35,363)						—						—						—						(35,655)
Operating expenses						(169,044)						(223,383)						(380,865)						13						—						(773,279)
Healthpeak’s share of unconsolidated joint venture operating expenses						(1,836)						(1,174)						(6,639)						(51,866)						—						(61,515)
Noncontrolling interests’ share of consolidated joint venture operating expenses						87						10,071						—						—						—						10,158
Adjustments to NOI(2)						(46,589)						(11,118)						3,241						(47)						—						(54,513)
Adjusted NOI						503,927						413,157						95,577						17,484						—						1,030,145
Plus: Adjustments to NOI(2)						46,589						11,118						(3,241)						47						—						54,513
Interest income						—						—						—						37,773						—						37,773
Interest expense						(232)						(2,837)						(7,701)						—						(147,210)						(157,980)
Depreciation and amortization						(303,196)						(255,746)						(125,344)						—						—						(684,286)
General and administrative						—						—						—						—						(98,303)						(98,303)
Transaction costs						(24)						(323)						(1,445)						(49)						—						(1,841)
Impairments and loan loss reserves, net						—						(21,577)						—						(1,583)						—						(23,160)
Gain (loss) on sales of real estate, net						—						190,590						—						—						—						190,590
Gain (loss) on debt extinguishments						—						—						—						—						(225,824)						(225,824)
Other income (expense), net						55						(2,725)						2,141						486						6,309						6,266
Less: Government grant income						—						—						(1,412)						—						—						(1,412)
Less: Healthpeak’s share of unconsolidated joint venture NOI						(3,921)						(1,708)						(464)						(17,518)						—						(23,611)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI						205						25,292						—						—						—						25,497
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures						243,403						355,241						(41,889)						36,640						(465,028)						128,367
Income tax benefit (expense)						—						—						—						—						3,261						3,261
Equity income (loss) from unconsolidated joint ventures						1,118						794						1,484						2,704						—						6,100
Income (loss) from continuing operations						244,521						356,035						(40,405)						39,344						(461,767)						137,728
Income (loss) from discontinued operations						—						—						—						—						388,202						388,202
Net income (loss)						$	244,521					$	356,035					$	(40,405)					$	39,344					$	(73,565)					$	525,930

_______________________________________

(1)Represents government grant income received under the CARES Act, which is recorded in other income (expense), net in the Consolidated Statements of Operations (see Note 2).

(2)Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, and termination fees. Includes the Company’s share of income (loss) generated by unconsolidated joint ventures and excludes noncontrolling interests’ share of income (loss) generated by consolidated joint ventures.

For the year ended December 31, 2020:

						Life Science						Medical Office						CCRC						Other Non-reportable						Corporate Non-segment						Total
Total revenues						$	569,296					$	622,398					$	436,494					$	16,687					$	—					$	1,644,875
Government grant income(1)						—						—						16,198						—						—						16,198
Less: Interest income						—						—						—						(16,553)						—						(16,553)
Healthpeak’s share of unconsolidated joint venture total revenues						448						2,772						35,392						74,023						—						112,635
Healthpeak’s share of unconsolidated joint venture government grant income						—						—						920						359						—						1,279
Noncontrolling interests’ share of consolidated joint venture total revenues						(239)						(34,597)						—						—						—						(34,836)
Operating expenses						(138,005)						(204,008)						(440,528)						—						—						(782,541)
Healthpeak’s share of unconsolidated joint venture operating expenses						(137)						(1,129)						(32,125)						(53,779)						—						(87,170)
Noncontrolling interests’ share of consolidated joint venture operating expenses						72						10,282						—						—						—						10,354
Adjustments to NOI(2)						(20,133)						(5,544)						97,072						433						—						71,828
Adjusted NOI						411,302						390,174						113,423						21,170						—						936,069
Plus: Adjustments to NOI(2)						20,133						5,544						(97,072)						(433)						—						(71,828)
Interest income						—						—						—						16,553						—						16,553
Interest expense						(234)						(400)						(7,227)						—						(210,475)						(218,336)
Depreciation and amortization						(217,921)						(222,165)						(113,851)						(12)						—						(553,949)
General and administrative						—						—						—						—						(93,237)						(93,237)
Transaction costs						(236)						—						(17,994)						(112)						—						(18,342)
Impairments and loan loss reserves, net						(14,671)						(10,208)						—						(18,030)						—						(42,909)
Gain (loss) on sales of real estate, net						—						90,390						—						(40)						—						90,350
Gain (loss) on debt extinguishments						—						—						—						—						(42,912)						(42,912)
Other income (expense), net						—						—						187,844						41,707						5,133						234,684
Less: Government grant income						—						—						(16,198)						—						—						(16,198)
Less: Healthpeak’s share of unconsolidated joint venture NOI						(311)						(1,643)						(4,187)						(20,603)						—						(26,744)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI						167						24,315						—						—						—						24,482
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures						198,229						276,007						44,738						40,200						(341,491)						217,683
Income tax benefit (expense)(3)						—						—						—						—						9,423						9,423
Equity income (loss) from unconsolidated joint ventures						(40)						798						(1,547)						(65,810)						—						(66,599)
Income (loss) from continuing operations						198,189						276,805						43,191						(25,610)						(332,068)						160,507
Income (loss) from discontinued operations						—						—						—						—						267,746						267,746
Net income (loss)						$	198,189					$	276,805					$	43,191					$	(25,610)					$	(64,322)					$	428,253

_______________________________________

(1)Represents government grant income received under the CARES Act, which is recorded in other income (expense), net in the Consolidated Statements of Operations (see Note 2).

(2)Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, and termination fees. Includes the Company’s share of income (loss) generated by unconsolidated joint ventures and excludes noncontrolling interests’ share of income (loss) generated by consolidated joint ventures.

(3)Income tax benefit (expense) for the year ended December 31, 2020 includes: (i) a $51 million tax benefit recognized in conjunction with internal restructuring activities, which resulted in the transfer of assets subject to certain deferred tax liabilities from taxable REIT subsidiaries to the REIT in connection with the 2019 MTCA (see Note 3), (ii) a $33 million income tax expense related to the valuation allowance on deferred tax assets that are no longer expected to be realized (see Note 17), and (iii) a $3.7 million net tax benefit recognized due to changes under the CARES Act, which resulted in net operating losses being utilized at a higher income tax rate than previously available.

The following table summarizes the Company’s total assets by segment (in thousands):

						December 31,
Segment						2022						2021
Life science						$	9,019,271					$	8,257,990
Medical office						6,291,986						6,152,512
CCRC						2,276,898						2,233,377
Reportable segment assets						17,588,155						16,643,879
Accumulated depreciation and amortization						(3,540,362)						(3,125,416)
Net reportable segment assets						14,047,793						13,518,463
Other non-reportable segment assets						744,550						794,172
Assets held for sale and discontinued operations, net						49,866						37,190
Other non-segment assets						929,020						907,694
Total assets						$	15,771,229					$	15,257,519

See Notes 4, 5, 6, 7, 8, and 9 for significant transactions impacting the Company’s segment assets during the periods presented.

At each of December 31, 2022 and 2021, goodwill of $18 million was allocated to the Company’s segment assets as follows: (i) $14 million for medical office, (ii) $2 million for CCRC, and (iii) $2 million for other non-reportable.

NOTE 17. Income Taxes

The Company has elected to be taxed as a REIT under the applicable provisions of the Code beginning with the year ended December 31, 1985. The Company has also elected for certain of its subsidiaries to be treated as TRSs (the “TRS entities”), which are subject to federal and state income taxes. All entities other than the TRS entities are collectively referred to as the “REIT” within this Note 17. Certain REIT entities are also subject to state and local income taxes.

Distributions with respect to the Company’s common stock can be characterized for federal income tax purposes as ordinary dividends, capital gains, nondividend distributions, or a combination thereof.

The following table shows the characterization of the Company’s annual common stock distributions per share:

			Year Ended December 31,
			2022						2021						2020
Ordinary dividends(1)			$	0.872948					$	0.152336					$	0.713864
Capital gains(2)(3)			0.183208						0.379960						0.529796
Nondividend distributions			0.143844						0.667704						0.236340
			$	1.200000					$	1.200000					$	1.480000

_______________________________________

(1)For the year ended December 31, 2022, all $0.872948 of ordinary dividends qualified as business income for purposes of Code Section 199A. For the year ended December 31, 2021, the amount includes $0.137064 of ordinary dividends qualified as business income for purposes of Code Section 199A and $0.015272 of qualified dividend income for purposes of Code Section 1(h)(11). For the year ended December 31, 2020, all $0.713864 of ordinary dividends qualified as business income for purposes of Code Section 199A.

(2)For the years ended December 31, 2022, 2021, and 2020, the amount includes $0.017760, $0.379960, and $0.221420, respectively, of Unrecaptured Section 1250 gain. Pursuant to Treasury Regulation Section 1.1061-6(c), the Company is disclosing additional information related to the capital gain dividends for purposes of Section 1061 of the Code. Code Section 1061 is generally applicable to direct and indirect holders of “applicable partnership interests.” For the year ended December 31, 2022, the “One Year Amounts” and “Three Year Amounts” are 89.6708% of the total capital gain distributions and the remaining capital gain distributions are attributable to Code Section 1231 gains, which are not subject to Code Section 1061. For the years ended December 31, 2021 and 2020, the “One Year Amounts” and “Three Year Amounts” are each zero, since all capital gains relate to Code Section 1231 gains.

(3)For the years ended December 31, 2022, 2021, and 2020, 10.3292%, 100%, and 100%, respectively, of the capital gain distributions represent gains from dispositions of U.S. real property interests pursuant to Code Section 897 for foreign shareholders.

The Company’s pretax income (loss) from continuing operations for the years ended December 31, 2022, 2021, and 2020 was $509 million, $134 million, and $151 million, respectively, of which $527 million, $150 million, and $80 million was attributable to the REIT entities for the years then ended. The TRS entities subject to tax reported income (losses) before income taxes from continuing operations of $(18) million, $(16) million, and $71 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The total income tax benefit (expense) from continuing operations consists of the following components (in thousands):

			Year Ended December 31,
			2022						2021						2020
Current
Federal			$	(632)					$	(126)					$	9,164
State			(689)						(1,003)						(1,431)
Total current			$	(1,321)					$	(1,129)					$	7,733
Deferred
Federal			$	3,157					$	3,469					$	2,849
State			2,589						921						(1,159)
Total deferred			$	5,746					$	4,390					$	1,690
Total income tax benefit (expense) from continuing operations			$	4,425					$	3,261					$	9,423

The Company’s income tax benefit from discontinued operations was $0.3 million, $1 million, and $10 million for the years ended December 31, 2022, 2021, and 2020, respectively (see Note 5).

The following table reconciles income tax benefit (expense) from continuing operations at statutory rates to actual income tax benefit (expense) recorded (in thousands):

			Year Ended December 31,
			2022						2021						2020
Tax benefit (expense) at U.S. federal statutory income tax rate on income or loss subject to tax			$	3,698					$	3,345					$	(15,016)
State income tax benefit (expense), net of federal tax			911						706						(4,211)
Gross receipts and margin taxes			(956)						(989)						(980)
Return to provision adjustments			1,260						(4)						(707)
Valuation allowance for deferred tax assets			194						203						(24,051)
Tax rate differential ─ NOL carryback under the CARES Act			—						—						3,732
Change in tax status of TRS			(682)						—						50,656
Total income tax benefit (expense) from continuing operations			$	4,425					$	3,261					$	9,423

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table summarizes the significant components of the Company’s deferred tax assets and liabilities from continuing operations (in thousands):

			December 31,
			2022						2021						2020
Deferred tax assets:
Deferred revenue			$	102,504					$	104,397					$	103,713
Net operating loss carryforward			62,280						71,744						68,444
Expense accruals			12,399						14,229						15,478
Real estate			150						129						3,895
Investment in unconsolidated joint ventures			—						—						2,333
Other			689						—						—
Total deferred tax assets			178,022						190,499						193,863
Valuation allowance			(26,098)						(35,772)						(33,519)
Deferred tax assets, net of valuation allowance			$	151,924					$	154,727					$	160,344
Deferred tax liabilities:
Real estate			$	52,266					$	61,097					$	72,059
Other			674						648						1,094
Deferred tax liabilities			$	52,940					$	61,745					$	73,153
Net deferred tax assets			$	98,984					$	92,982					$	87,191

Net deferred tax assets are included in other assets, net on the Consolidated Balance Sheets.

The Company records a valuation allowance against deferred tax assets in certain jurisdictions when it is not more likely than not that it can realize the related deferred tax assets. The deferred tax asset valuation allowance is adequate to reduce the total deferred tax assets to an amount that the Company estimates will “more-likely-than-not” be realized.

In conjunction with the Company establishing a plan during the year ended December 31, 2020 to dispose of all of its SHOP assets and classifying such assets as discontinued operations (see Note 5), the Company concluded it was more likely than not that it would no longer realize the future value of certain deferred tax assets generated by the net operating losses of its TRS entities. Accordingly, the Company recognized a deferred tax asset valuation allowance and corresponding income tax expense of $33 million during the year ended December 31, 2020. As of December 31, 2022 and 2021, the Company had a deferred tax asset valuation allowance of $26 million and $36 million, respectively.

At December 31, 2022, the Company had a net operating loss (“NOL”) carryforward of $249 million related to the TRS entities. If unused, $15 million will begin to expire in 2035. The remainder, totaling $234 million, may be carried forward indefinitely.

The following table summarizes the Company’s unrecognized tax benefits (in thousands):

			December 31,
			2022						2021						2020
Total unrecognized tax benefits at January 1			$	469					$	469					$	469
Gross amount of decreases for prior years’ tax positions			(469)						—						—
Total unrecognized tax benefits at December 31			$	—					$	469					$	469

For the year ended December 31, 2022, the Company had no unrecognized tax benefits. For the years ended December 31, 2021 and 2020, the Company had unrecognized tax benefits of $0.5 million, that, if recognized, would reduce the annual effective tax rate.

The Company files numerous U.S. federal, state, and local income and franchise tax returns. With a few exceptions, the Company is no longer subject to U.S. federal, state, or local tax examinations by taxing authorities for years prior to 2019.

NOTE 18. Supplemental Cash Flow Information

The following table provides supplemental cash flow information (in thousands):

			Year Ended December 31,
			2022						2021						2020
Supplemental cash flow information:
Interest paid, net of capitalized interest			$	162,115					$	173,044					$	209,843
Income taxes paid (refunded)			(1,903)						4,521						(786)
Capitalized interest			41,046						24,084						27,041
Cash paid for amounts included in the measurement of lease liability for operating leases			12,594						10,620						9,940
Supplemental schedule of non-cash investing and financing activities:
Increase in ROU asset in exchange for new lease liability related to operating leases			9,454						28,866						32,208
Decrease in ROU asset with corresponding change in lease liability related to operating leases			—						8,410						—
Retained investment in connection with South San Francisco JVs transaction			293,265						—						—
Accrued construction costs			178,626						179,995						95,293
Net noncash impact from the consolidation of previously unconsolidated joint ventures			—						—						369,223
Refundable entrance fees assumed with real estate acquisitions			—						—						307,954
Seller financing provided on disposition of real estate asset			—						559,745						73,498
Mortgages assumed with real estate acquisitions			—						—						251,280
Carrying value of mortgages assumed by buyer in real estate dispositions			—						143,676						—

See Note 3 for discussion of the 2019 MTCA with Brookdale and Note 9 for discussion of the South San Francisco JVs transaction.

The following table summarizes certain cash flow information related to assets classified as discontinued operations (in thousands):

			Year Ended December 31,
			2022						2021						2020
Leasing costs, tenant improvements, and recurring capital expenditures			$	21					$	2,636					$	12,695
Development, redevelopment, and other major improvements of real estate			18						5,780						30,769
Depreciation and amortization of real estate, in-place lease, and other intangibles			—						—						143,194

The following table summarizes cash, cash equivalents and restricted cash (in thousands):

						Year Ended December 31,
						2022						2021						2020						2022						2021						2020						2022						2021						2020
						Continuing operations																		Discontinued operations																		Total
Beginning of year:
Cash and cash equivalents						$	158,287					$	44,226					$	80,398					$	7,707					$	53,085					$	63,834					$	165,994					$	97,311					$	144,232
Restricted cash						53,454						67,206						13,385						—						17,168						27,040						53,454						84,374						40,425
Cash, cash equivalents and restricted cash						$	211,741					$	111,432					$	93,783					$	7,707					$	70,253					$	90,874					$	219,448					$	181,685					$	184,657
End of year:
Cash and cash equivalents						$	72,032					$	158,287					$	44,226					$	—					$	7,707					$	53,085					$	72,032					$	165,994					$	97,311
Restricted cash						54,802						53,454						67,206						—						—						17,168						54,802						53,454						84,374
Cash, cash equivalents and restricted cash						$	126,834					$	211,741					$	111,432					$	—					$	7,707					$	70,253					$	126,834					$	219,448					$	181,685

NOTE 19. Variable Interest Entities

Unconsolidated Variable Interest Entities

At each of December 31, 2022 and 2021, the Company had investments in: (i) two unconsolidated VIE joint ventures and (ii) marketable debt securities of one VIE. The Company determined it is not the primary beneficiary of and therefore does not consolidate these VIEs because it does not have the ability to control the activities that most significantly impact their economic performance. Except for the Company’s equity interest in the unconsolidated joint ventures (the LLC investment and Needham Land Parcel JV discussed below), it has no formal involvement in these VIEs beyond its investments.

Debt Securities Investment. At December 31, 2022, the Company held $22 million of commercial mortgage-backed securities (“CMBS”) issued by Federal Home Loan Mortgage Corporation (commonly referred to as Freddie Mac) through a special purpose entity that has been identified as a VIE because it is “thinly capitalized.” The CMBS issued by the VIE are backed by mortgage debt obligations on real estate assets. These securities are classified as held-to-maturity because the Company has the intent and ability to hold the securities until maturity. These securities matured on December 31, 2022, and the Company received the related proceeds in January 2023.

LLC Investment. The Company holds a limited partner ownership interest in an unconsolidated LLC that has been identified as a VIE. The Company’s involvement in the entity is limited to its equity investment as a limited partner and it does not have any substantive participating rights or kick-out rights over the general partner. The assets and liabilities of the entity primarily consist of three hospitals and senior housing real estate. Any assets generated by the entity may only be used to settle its contractual obligations (primarily capital expenditures and debt service payments).

Needham Land Parcel JV. In December 2021, the Company acquired a 38% interest in a life science development joint venture in Needham, Massachusetts for $13 million. Current equity at risk is not sufficient to finance the joint venture’s activities. The assets and liabilities of the entity primarily consist of real estate and debt service obligations. Any assets generated by the entity may only be used to settle its contractual obligations (primarily development costs and debt service payments).

The classification of the related assets and liabilities and the maximum loss exposure as a result of the Company’s involvement with these VIEs at December 31, 2022 was as follows (in thousands):

VIE Type						Asset Type						Maximum Loss Exposure and Carrying Amount**(1)**
CMBS and LLC investment						Other assets, net						$	36,874
Needham Land Parcel JV						Investments in and advances to unconsolidated joint ventures						15,391

_______________________________________

(1)The Company’s maximum loss exposure represents the aggregate carrying amount of such investments (including accrued interest).

As of December 31, 2022, the Company had not provided, and is not required to provide, financial support through a liquidity arrangement or otherwise, to its unconsolidated VIEs, including under circumstances in which it could be exposed to further losses (e.g., cash shortfalls).

See Note 9 for additional descriptions of the nature, purpose, and operating activities of the Company’s unconsolidated VIEs and interests therein.

Consolidated Variable Interest Entities

The Company’s consolidated total assets and total liabilities at December 31, 2022 and 2021 include certain assets of VIEs that can only be used to settle the liabilities of the related VIE. The VIE creditors do not have recourse to the Company.

Ventures V, LLC. The Company holds a 51% ownership interest in and is the managing member of a joint venture entity formed in October 2015 that owns and leases MOBs (“Ventures V”). The Company classifies Ventures V as a VIE due to the non-managing member lacking substantive participation rights in the management of Ventures V or kick-out rights over the managing member. The Company consolidates Ventures V as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIE’s economic performance. The assets of Ventures V primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of capital expenditures for the properties. Assets generated by Ventures V may only be used to settle its contractual obligations.

Life Science JVs. The Company holds a 99% ownership interest in multiple joint venture entities that own and lease life science assets (the “Life Science JVs”). The Life Science JVs are VIEs as the members share in certain decisions of the entities, but substantially all of the activities are performed on behalf of the Company. The Company consolidates the Life Science JVs as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the Life Science JVs primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of capital expenditures for the properties. Assets generated by the Life Science JVs may only be used to settle their contractual obligations. Refer to Note 13 for a discussion of certain put options associated with the Life Science JVs.

MSREI MOB JV. The Company holds a 51% ownership interest in, and is the managing member of, a joint venture entity formed in August 2018 that owns and leases MOBs (the “MSREI JV”). The MSREI JV is a VIE due to the non-managing member lacking substantive participation rights in the management of the joint venture or kick-out rights over the managing member. The Company consolidates the MSREI JV as the primary beneficiary because it has the ability to control the activities that most significantly impact the VIE’s economic performance. The assets of the MSREI JV primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; its obligations primarily consist of capital expenditures for the properties. Assets generated by the MSREI JV may only be used to settle its contractual obligations.

DownREITs. The Company holds a controlling ownership interest in and is the managing member of seven DownREITs. The Company classifies the DownREITs as VIEs due to the non-managing members lacking substantive participation rights in the management of the DownREITs or kick-out rights over the managing member. The Company consolidates the DownREITs as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the DownREITs primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of debt service payments and capital expenditures for the properties. Assets generated by the DownREITs (primarily from resident rents) may only be used to settle their contractual obligations (primarily from debt service and capital expenditures).

Other Consolidated Real Estate Partnerships. The Company holds a controlling ownership interest in and is the general partner (or managing member) of multiple partnerships that own and lease real estate assets (the “Partnerships”). The Company classifies the Partnerships as VIEs due to the limited partners (non-managing members) lacking substantive participation rights in the management of the Partnerships or kick-out rights over the general partner (managing member). The Company consolidates the Partnerships as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the Partnerships primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of debt service payments and capital expenditures for the properties. Assets generated by the Partnerships (primarily from resident rents) may only be used to settle their contractual obligations (primarily from debt service and capital expenditures).

Exchange Accommodation Titleholder. During the year ended December 31, 2021, the Company acquired two MOBs using a reverse like-kind exchange structure pursuant to Section 1031 of the Code (a “reverse 1031 exchange”). As of December 31, 2021, the Company had not completed the reverse 1031 exchanges and as such, the acquired properties remained in the possession of the Exchange Accommodation Titleholder (“EAT”). The EAT was classified as a VIE as it was a “thinly capitalized” entity. The Company consolidated the EAT because it had the ability to control the activities that most significantly impacted the economic performance of the EAT and was, therefore, the primary beneficiary of the EAT. These properties held by the EAT had a carrying value of $77 million as of December 31, 2021. The assets of the EAT primarily consisted of leased properties (net real estate, including intangibles), and rents receivable; their obligations primarily consisted of capital expenditures for the properties. Assets generated by the EAT may only be used to settle its contractual obligations (primarily from capital expenditures). These reverse 1031 exchanges were completed in February 2022.

Total assets and total liabilities include VIE assets and liabilities as follows (in thousands):

						December 31,
						2022						2021
Assets
Buildings and improvements						$	2,356,905					$	2,303,920
Development costs and construction in progress						58,499						82,303
Land						324,714						548,168
Accumulated depreciation and amortization						(623,244)						(551,097)
Net real estate						2,116,874						2,383,294
Accounts receivable, net						6,893						5,455
Cash and cash equivalents						20,586						22,295
Restricted cash						354						114
Intangible assets, net						73,860						117,180
Assets held for sale and discontinued operations, net						30,355						754
Right-of-use asset, net						99,376						107,993
Other assets, net						73,690						62,886
Total assets						$	2,421,988					$	2,699,971
Liabilities
Mortgage debt						$	144,604					$	144,350
Intangible liabilities, net						15,066						23,909
Liabilities related to assets held for sale and discontinued operations, net						401						1,677
Lease liability						99,039						99,213
Accounts payable, accrued liabilities, and other liabilities						68,979						58,440
Deferred revenue						39,661						21,546
Total liabilities						$	367,750					$	349,135

Total assets and total liabilities related to assets held for sale and discontinued operations include VIE assets and liabilities as follows (in thousands):

						December 31,
						2022						2021
Assets
Buildings and improvements						$	39,934					$	—
Development costs and construction in progress						—						—
Land						1,926						—
Accumulated depreciation and amortization						(15,612)						—
Net real estate						26,248						—
Accounts receivable, net						—						62
Cash and cash equivalents						—						59
Intangible assets, net						215						—
Other assets, net						3,892						633
Total assets						$	30,355					$	754
Liabilities
Accounts payable, accrued liabilities, and other liabilities						$	—					$	1,677
Deferred revenue						401						—
Total liabilities						$	401					$	1,677

NOTE 20. Concentration of Credit Risk

Concentrations of credit risk arise when one or more tenants, operators, or obligors related to the Company’s investments are engaged in similar business activities or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. The Company regularly monitors various segments of its portfolio to assess potential concentrations of credit risks.

The following table provides information regarding the Company’s concentrations with respect to certain states; the information provided is presented for the gross assets and revenues that are associated with certain real estate assets as percentages of the Company’s total assets and revenues, excluding assets classified as discontinued operations:

						Percentage of Total Company Assets												Percentage of Total Company Revenues
						December 31,												Year Ended December 31,
State						2022						2021						2022						2021						2020
California						37						34						31						28						21
Florida						10						11						18						17						14
Texas						10						10						11						11						9
Massachusetts						17						16						10						9						4

The Company’s rental revenue is generated from multiple tenants across its diverse portfolio. As of December 31, 2022, the Company’s largest tenant in its life science and medical office segments accounted for 2% and 8%, respectively, of the Company’s total revenues.

NOTE 21. Fair Value Measurements

Financial assets and liabilities measured at fair value on a recurring basis in the Consolidated Balance Sheets were immaterial at December 31, 2022 and 2021.

The table below summarizes the carrying amounts and fair values of the Company’s financial instruments (in thousands):

			December 31,
			2022**(3)**												2021**(3)**
			Carrying Value						Fair Value						Carrying Value						Fair Value
Loans receivable, net(2)			$	374,832					$	369,425					$	415,811					$	437,607
Marketable debt securities(2)			21,702						21,702						21,003						21,003
Interest rate swap instruments(2)			30,259						30,259						—						—
Interest rate cap instruments(2)			—						—						397						397
Bank line of credit and commercial paper(2)			995,606						995,606						1,165,975						1,165,975
Term loans(2)			495,957						495,957						—						—
Senior unsecured notes(1)			4,659,451						4,238,124						4,651,933						5,054,747
Mortgage debt(2)			346,599						330,867						352,081						352,800

_______________________________________

(1)Level 1: Fair value calculated based on quoted prices in active markets.

(2)Level 2: Fair value based on (i) for marketable debt securities, quoted prices for similar or identical instruments in active or inactive markets, respectively, or (ii) for loans receivable, net, mortgage debt, interest rate swap instruments, and interest rate cap instruments, standardized pricing models in which significant inputs or value drivers are observable in active markets. For bank line of credit, commercial paper, and term loans, the carrying values are a reasonable estimate of fair value because the borrowings are primarily based on market interest rates and the Company’s credit rating.

(3)During the years ended December 31, 2022 and 2021, there were no material transfers of financial assets or liabilities within the fair value hierarchy.

NOTE 22. Derivative Financial Instruments

The Company uses derivative instruments to mitigate the effects of interest rate fluctuations on specific forecasted transactions as well as recognized financial obligations or assets. Utilizing derivative instruments allows the Company to manage the risk of fluctuations in interest rates and their related potential impact on future earnings and cash flows. The Company does not use derivative instruments for speculative or trading purposes. At December 31, 2022, a one percentage point increase or decrease in the underlying interest rate curve would result in a corresponding increase or decrease in the fair value of the derivative instruments by approximately $23 million.

In March 2021, the Company repaid $39 million of variable rate secured debt on two SHOP assets and terminated the two associated interest rate swap instruments. Therefore, at December 31, 2021, the Company had no interest rate swap instruments.

In April 2021, the Company executed two interest rate cap instruments on its $142 million of variable rate mortgage debt issued in conjunction with the acquisition of the MOB Portfolio (see Note 4). In April 2022, the Company terminated these interest rate cap instruments and entered into two interest rate swap instruments that are designated as cash flow hedges and mature in May 2026.

In August 2022, the Company entered into two forward-starting interest rate swap instruments on the $500 million aggregate principal amount of the 2022 Term Loan Facilities (see Note 11). The forward-starting interest rate swap instruments are designated as cash flow hedges.

The following table summarizes the Company’s interest rate swap instruments (in thousands):

																		Fair Value**(1)**
Date Entered			Maturity Date			Hedge Designation			Notional Amount			Pay Rate			Receive Rate			December 31, 2022						December 31, 2021
April 2022(2)			May 2026			Cash flow			$	51,100		5.08 %			1 mo. USD-LIBOR-BBA + 2.50%			$	2,300					$	—
April 2022(2)			May 2026			Cash flow			91,000			4.63 %			1 mo. USD-LIBOR-BBA + 2.05%			4,096						—
August 2022(2)			February 2027			Cash flow			250,000			2.60 %			1 mo. USD-SOFR CME Term			11,299						—
August 2022(2)			August 2027			Cash flow			250,000			2.54 %			1 mo. USD-SOFR CME Term			12,564						—

---

(1)At December 31, 2022, the interest rate swap instruments were in an asset position. Derivative assets are recorded in other assets, net on the Consolidated Balance Sheets.

(2)Represents interest rate swap instruments that hedge fluctuations in interest payments on variable rate debt by converting the interest rates to fixed interest rates. The changes in fair value of designated derivatives that qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

The following table summarizes the Company’s interest rate cap instruments (in thousands):

																																	Fair Value**(1)**
Date Entered						Maturity Date						Hedge Designation						Notional Amount						Strike Rate						Index			December 31, 2022						December 31, 2021
April 2021(2)						May 2024						Non-designated						$	142,100					2.00 %						1 mo. USD-LIBOR-BBA			$	—					$	397

---

(1)At December 31, 2021, the interest rate cap instruments were in an asset position. Derivative assets are recorded in other assets, net on the Consolidated Balance Sheets.

(2)Represents two interest rate cap instruments that manage the Company’s exposure to variable cash flows on certain mortgage debt borrowings by limiting interest rates. These interest rate cap instruments were terminated in April 2022.

During the year ended December 31, 2022, the Company recognized a $2 million increase in the fair value of the interest rate cap instruments within other income (expense), net.

NOTE 23. Accounts Payable, Accrued Liabilities, and Other Liabilities

The following table summarizes the Company’s accounts payable, accrued liabilities, and other liabilities, excluding accounts payable, accrued liabilities, and other liabilities related to assets classified as discontinued operations (in thousands):

			December 31,
			2022						2021
Refundable entrance fees			$	268,972					$	288,409
Accrued construction costs			178,626						179,995
Accrued interest			59,291						59,342
Other accounts payable and accrued liabilities			265,596						227,638
Accounts payable, accrued liabilities, and other liabilities			$	772,485					$	755,384

NOTE 24. Deferred Revenue

The following table summarizes the Company’s deferred revenue, excluding deferred revenue related to assets classified as held for sale and discontinued operations (in thousands):

			December 31,
			2022						2021
Nonrefundable entrance fees(1)			$	518,573					$	496,478
Other deferred revenue(2)			325,503						292,729
Deferred revenue			$	844,076					$	789,207

_______________________________________

(1)During the years ended December 31, 2022 and 2021, the Company collected nonrefundable entrance fees of $101 million and $89 million, respectively. During the years ended December 31, 2022, 2021, and 2020, the Company recognized amortization of $79 million, $76 million, and $72 million, respectively, which is included within resident fees and services on the Consolidated Statements of Operations.

(2)Other deferred revenue is primarily comprised of prepaid rent, deferred rent, and tenant-funded tenant improvements owned by the Company. During the years ended December 31, 2022, 2021, and 2020, the Company recognized amortization related to other deferred revenue of $44 million, $39 million, and $33 million, respectively, which is included in rental and related revenues on the Consolidated Statements of Operations.

NOTE 25. Selected Quarterly Financial Data (Unaudited)

The following tables summarize selected quarterly information for the years ended December 31, 2022 and 2021 (in thousands, except per share amounts):

			Three Months Ended 2022
			March 31						June 30						September 30						December 31
Total revenues			$	498,372					$	517,932					$	520,406					$	524,468
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures			73,719						68,201						355,775						9,435
Income (loss) from continuing operations			75,026						69,301						359,284						9,929
Income (loss) from discontinued operations			317						2,992						(1,298)						873
Net income (loss)			75,343						72,293						357,986						10,802
Net income (loss) applicable to Healthpeak Properties, Inc.			71,613						68,338						353,970						6,528
Dividends paid per common share			0.30						0.30						0.30						0.30
Basic earnings (loss) per common share:
Continuing operations			0.13						0.12						0.66						0.01
Discontinued operations			0.00						0.01						0.00						0.00
Diluted earnings (loss) per common share:
Continuing operations			0.13						0.12						0.65						0.01
Discontinued operations			0.00						0.01						0.00						0.00

			Three Months Ended 2021
			March 31						June 30						September 30						December 31
Total revenues			$	455,276					$	476,238					$	481,465					$	483,205
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures			(121,900)						166,435						58,329						25,503
Income (loss) from continuing operations			(120,585)						168,065						61,305						28,943
Income (loss) from discontinued operations			270,008						113,960						601						3,633
Net income (loss)			149,423						282,025						61,906						32,576
Net income (loss) applicable to Healthpeak Properties, Inc.			145,788						276,280						54,711						28,761
Dividends paid per common share			0.30						0.30						0.30						0.30
Basic earnings (loss) per common share:
Continuing operations			(0.23)						0.30						0.10						0.05
Discontinued operations			0.50						0.21						0.00						0.00
Diluted earnings (loss) per common share:
Continuing operations			(0.23)						0.30						0.10						0.05
Discontinued operations			0.50						0.21						0.00						0.00

Schedule II: Valuation and Qualifying Accounts

(In thousands)

Allowance Accounts**(1)**												Additions
Year Ended December 31,						Balance at Beginning of Year						Amounts Charged Against Operations, net						Acquired Properties												Deductions**(2)**						Balance at End of Year
Continuing operations:
2022						$	1,870					$	529					$	—											$	—					$	2,399
2021						3,994						—						—												(2,124)						1,870
2020						387						76						3,531												—						3,994
Discontinued operations:
2022						$	4,138					$	—					$	—											$	(4,138)					$	—
2021						5,873						46						—												(1,781)						4,138
2020						4,178						1,026						175												494						5,873

_______________________________________

(1)Includes allowance for doubtful accounts. Excludes reserves for loan losses which are disclosed in Note 8 to the Consolidated Financial Statements.

(2)Primarily includes the write-off of uncollectible accounts, dispositions, and other net reductions in the reserves.

Schedule III: Real Estate and Accumulated Depreciation

(in thousands)

																		Encumbrances at December 31, 2022						Initial Cost to Company												Costs Capitalized Subsequent to Acquisition						Gross Amount at Which Carried As of December 31, 2022																		Accumulated Depreciation**(4)**						Year Constructed**(5)**						Year Acquired
						City						State									Land**(1)**						Buildings and Improvements**(2)**									Land						Buildings and Improvements						Total**(3)**
Life science
1483						Brisbane						CA						$	—					$	8,498					$	500					$	79,187					$	8,498					$	79,687					$	88,185					$	(2,999)					2022						2007
1484						Brisbane						CA						—						11,331						689						164,388						11,331						165,077						176,408						(4,493)						2022						2007
1485						Brisbane						CA						—						11,331						600						154,403						11,331						155,003						166,334						(5,015)						2022						2007
1486						Brisbane						CA						—						11,331						—						135,429						11,331						135,429						146,760						(16,899)						2020						2007
1487						Brisbane						CA						—						8,498						—						76,375						8,498						76,375						84,873						(4,497)						2020						2007
2874						Brisbane						CA						—						26,895						62,318						54,909						26,895						115,580						142,475						(8,023)						1989						2019
2875						Brisbane						CA						—						24,092						56,623						7,910						24,092						63,177						87,269						(8,006)						2000						2019
3139						Brisbane						CA						—						35,805						—						3,899						35,805						3,899						39,704						—						—						2019
3140						Brisbane						CA						—						35,805						—						1,202						35,805						1,202						37,007						—						—						2019
3142						Brisbane						CA						—						—						—						31						—						31						31						—						—						2007
1401						Hayward						CA						—						900						7,100						13,215						1,338						19,023						20,361						(4,187)						1996						2007
1402						Hayward						CA						—						1,500						6,400						4,605						1,719						7,111						8,830						(2,531)						1999						2007
1403						Hayward						CA						—						1,900						7,100						11,768						1,900						15,011						16,911						(4,783)						1998						2007
1404						Hayward						CA						—						2,200						17,200						8,244						2,200						25,444						27,644						(8,642)						1999						2007
1405						Hayward						CA						—						1,000						3,200						8,110						1,000						3,837						4,837						(1,448)						1999						2007
1549						Hayward						CA						—						1,006						4,259						6,919						1,055						8,699						9,754						(3,999)						1996						2007
1550						Hayward						CA						—						677						2,761						5,837						710						3,057						3,767						(2,006)						1996						2007
1551						Hayward						CA						—						661						1,995						7,358						693						5,134						5,827						(1,622)						1996						2007
1552						Hayward						CA						—						1,187						7,139						2,543						1,222						8,539						9,761						(5,059)						1996						2007
1553						Hayward						CA						—						1,189						9,465						7,361						1,225						16,230						17,455						(11,160)						1996						2007
1554						Hayward						CA						—						1,246						5,179						13,699						1,283						17,080						18,363						(4,905)						1996						2007
1555						Hayward						CA						—						1,521						13,546						7,541						1,566						20,982						22,548						(13,061)						1996						2007
1556						Hayward						CA						—						1,212						5,120						4,726						1,249						6,856						8,105						(4,254)						1996						2007
1424						La Jolla						CA						—						11,175						25,283						43,545						11,437						63,093						74,530						(12,454)						1982						2007
1425						La Jolla						CA						—						7,217						19,883						1,661						7,293						19,868						27,161						(7,690)						1981						2007
1426						La Jolla						CA						—						8,381						12,412						14,403						8,467						23,364						31,831						(13,475)						1984						2007
1427						La Jolla						CA						—						10,127						16,983						11,292						10,194						23,732						33,926						(10,055)						1982						2007
1949						La Jolla						CA						—						2,686						11,045						18,084						2,686						28,594						31,280						(6,677)						2021						2011
2229						La Jolla						CA						—						8,753						32,528						11,785						8,777						42,931						51,708						(12,222)						1986/2009						2014
1470						Poway						CA						—						5,826						12,200						6,048						5,826						12,541						18,367						(4,778)						2005						2007
1471						Poway						CA						—						5,978						14,200						4,253						5,978						14,200						20,178						(5,473)						2005						2007
1472						Poway						CA						—						8,654						—						11,895						8,654						11,895						20,549						(3,317)						2014						2007
1473						Poway						CA						—						11,024						2,405						26,187						11,024						27,857						38,881						(9,213)						2019						2007
1474						Poway						CA						—						5,051						—						19,939						5,051						19,939						24,990						(5,082)						2019						2007
1475						Poway						CA						—						5,655						—						10,302						5,655						10,302						15,957						(579)						2020						2007
1478						Poway						CA						—						6,700						14,400						6,145						6,700						14,400						21,100						(5,550)						2002						2007
1499						Redwood City						CA						—						3,400						5,500						3,333						3,462						7,152						10,614						(3,330)						1989						2007
1500						Redwood City						CA						—						2,500						4,100						1,703						2,506						5,041						7,547						(2,282)						1989						2007
1501						Redwood City						CA						—						3,600						4,600						2,328						3,607						6,485						10,092						(2,880)						1989						2007
1502						Redwood City						CA						—						3,100						5,100						1,471						3,107						6,200						9,307						(2,975)						1989						2007
1503						Redwood City						CA						—						4,800						17,300						10,044						4,818						25,558						30,376						(8,153)						1989						2007
1504						Redwood City						CA						—						5,400						15,500						11,996						5,418						27,461						32,879						(10,558)						1989						2007
1505						Redwood City						CA						—						3,000						3,500						5,773						3,006						8,798						11,804						(2,733)						1988						2007
1506						Redwood City						CA						—						6,000						14,300						14,929						6,018						28,586						34,604						(14,015)						1988						2007
1507						Redwood City						CA						—						1,900						12,800						17,383						1,912						23,468						25,380						(7,016)						1988/2011						2007
1508						Redwood City						CA						—						2,700						11,300						22,756						2,712						28,481						31,193						(7,902)						1988/2011						2007
1509						Redwood City						CA						—						2,700						10,900						10,493						2,712						14,012						16,724						(6,191)						1988						2007
1510						Redwood City						CA						—						2,200						12,000						11,009						2,212						18,794						21,006						(7,038)						1988						2007
1511						Redwood City						CA						—						2,600						9,300						21,497						2,612						30,166						32,778						(8,789)						1988						2007
1512						Redwood City						CA						—						3,300						18,000						19,100						3,300						37,072						40,372						(16,498)						2000						2007
1513						Redwood City						CA						—						3,300						17,900						15,954						3,326						29,933						33,259						(15,150)						2000						2007
678						San Diego						CA						—						2,603						11,051						3,514						2,766						14,402						17,168						(6,496)						1997						2004
679						San Diego						CA						—						5,269						23,566						31,885						5,669						51,751						57,420						(20,933)						1997						2004
837						San Diego						CA						—						4,630						2,028						9,262						4,630						5,330						9,960						(2,204)						1988/2012						2006
838						San Diego						CA						—						2,040						903						5,266						2,040						4,215						6,255						(1,210)						1988/2012						2006
839						San Diego						CA						—						3,940						3,184						7,320						4,046						5,951						9,997						(2,162)						1987						2006
840						San Diego						CA						—						5,690						4,579						1,114						5,830						5,126						10,956						(2,420)						1987						2006
1418						San Diego						CA						—						11,700						31,243						65,364						11,700						90,225						101,925						(12,855)						2022						2007
1419						San Diego						CA						—						2,324						—						33,097						2,324						33,097						35,421						(1,052)						2022						2007
1420						San Diego						CA						—						4,200						—						41,041						4,200						41,041						45,241						(839)						2022						2007
1421						San Diego						CA						—						7,000						33,779						1,209						7,000						33,779						40,779						(13,019)						2000						2007
1422						San Diego						CA						—						7,179						3,687						6,004						7,336						9,491						16,827						(5,542)						1984						2007
1423						San Diego						CA						—						8,400						33,144						32,248						8,400						65,384						73,784						(17,763)						2002/2020						2007
1558						San Diego						CA						—						7,740						22,654						79,394						7,888						98,330						106,218						(22,683)						—						2007
1947						San Diego						CA						—						2,581						10,534						4,484						2,581						15,019						17,600						(7,054)						2000						2011
1948						San Diego						CA						—						5,879						25,305						10,121						5,879						33,121						39,000						(11,270)						2001						2011
2197						San Diego						CA						—						7,621						3,913						8,763						7,626						11,375						19,001						(6,034)						1984						2007
2476						San Diego						CA						—						7,661						9,918						13,892						7,661						23,811						31,472						(2,551)						2000/2002						2016
2477						San Diego						CA						—						9,207						14,613						6,762						9,207						21,374						30,581						(6,135)						2000/2001						2016
2478						San Diego						CA						—						6,000						—						76,774						6,000						76,774						82,774						—						—						2016
2617						San Diego						CA						—						2,734						5,195						16,713						2,734						21,908						24,642						(8,204)						1991/2020						2017
2618						San Diego						CA						—						4,100						12,395						22,843						4,100						35,238						39,338						(8,884)						1991/2020						2017
2622						San Diego						CA						—						—						—						17,147						—						17,147						17,147						(1,225)						2020						2004
2872						San Diego						CA						—						10,120						38,351						1,044						10,120						39,996						50,116						(6,958)						1995						2018
2873						San Diego						CA						—						6,052						14,122						2,060						6,052						16,319						22,371						(2,853)						1997						2018

																		Encumbrances at December 31, 2022						Initial Cost to Company												Costs Capitalized Subsequent to Acquisition						Gross Amount at Which Carried As of December 31, 2022																		Accumulated Depreciation**(4)**						Year Constructed**(5)**						Year Acquired
						City						State									Land**(1)**						Buildings and Improvements**(2)**									Land						Buildings and Improvements						Total**(3)**
3069						San Diego						CA						—						7,054						7,794						19,627						7,054						27,083						34,137						(2,174)						2007/2021						2019
3110						San Diego						CA						—						20,584						—						2,765						20,584						2,765						23,349						—						—						2021
3111						San Diego						CA						—						24,830						—						729						24,830						729						25,559						(2)						—						2022
1410						South San Francisco						CA						—						4,900						18,100						13,022						4,900						30,312						35,212						(12,654)						2000/2019						2007
1411						South San Francisco						CA						—						8,000						27,700						38,753						8,000						60,871						68,871						(15,218)						2003/2019						2007
1412						South San Francisco						CA						—						10,100						22,521						11,660						10,100						32,039						42,139						(10,276)						1999						2007
1413						South San Francisco						CA						—						8,000						28,299						8,862						8,000						36,694						44,694						(15,735)						2000						2007
1430						South San Francisco						CA						—						10,700						23,621						29,985						10,700						51,141						61,841						(11,846)						1998/2019						2007
1431						South San Francisco						CA						—						7,000						15,500						9,733						7,000						25,172						32,172						(9,179)						2001						2007
1435						South San Francisco						CA						—						13,800						42,500						37,106						13,800						79,606						93,406						(33,867)						2008/2010						2007
1436						South San Francisco						CA						—						14,500						45,300						36,935						14,500						82,235						96,735						(34,174)						2008/2010						2007
1437						South San Francisco						CA						—						9,400						24,800						51,679						9,400						65,208						74,608						(24,038)						2008/2010						2007
1439						South San Francisco						CA						—						11,900						68,848						600						11,900						69,417						81,317						(26,546)						2003						2007
1440						South San Francisco						CA						—						10,000						57,954						400						10,000						58,355						68,355						(22,413)						2003						2007
1441						South San Francisco						CA						—						9,300						43,549						8						9,300						43,557						52,857						(16,790)						2003						2007
1442						South San Francisco						CA						—						11,000						47,289						41,919						11,000						89,119						100,119						(17,042)						2023						2007
1443						South San Francisco						CA						—						13,200						60,932						5,039						13,200						64,716						77,916						(23,882)						2007						2007
1444						South San Francisco						CA						—						10,500						33,776						1,260						10,500						34,698						45,198						(13,182)						2003						2007
1445						South San Francisco						CA						—						10,600						34,083						9						10,600						34,092						44,692						(13,142)						2003						2007
1458						South San Francisco						CA						—						10,900						20,900						13,870						10,909						26,479						37,388						(8,628)						2005						2007
1459						South San Francisco						CA						—						9,800						400						112,695						9,800						112,701						122,501						—						—						2007
1462						South San Francisco						CA						—						7,117						600						5,887						7,117						4,701						11,818						(1,617)						1984/2012						2007
1463						South San Francisco						CA						—						10,381						2,300						21,954						10,381						21,706						32,087						(7,573)						1979/2012						2007
1464						South San Francisco						CA						—						7,403						700						11,638						7,403						7,987						15,390						(2,436)						1965/2012						2007
1468						South San Francisco						CA						—						10,100						24,013						15,981						10,100						36,238						46,338						(13,306)						2006						2007
1480						South San Francisco						CA						—						32,210						3,110						159,459						32,210						162,569						194,779						—						—						2007
1559						South San Francisco						CA						—						5,666						5,773						12,970						5,695						5,904						11,599						(5,915)						1968						2007
1560						South San Francisco						CA						—						1,204						1,293						2,888						1,210						3,970						5,180						(2,567)						1966						2007
1983						South San Francisco						CA						—						8,648						—						97,191						8,648						97,191						105,839						(29,837)						2016						2011
1984						South San Francisco						CA						—						7,845						—						93,647						7,844						93,223						101,067						(26,859)						2017						2011
1985						South San Francisco						CA						—						6,708						—						122,646						6,708						122,646						129,354						(31,230)						2017						2011
1986						South San Francisco						CA						—						6,708						—						120,349						6,708						120,306						127,014						(25,127)						2018						2011
1987						South San Francisco						CA						—						8,544						—						100,777						8,544						100,777						109,321						(18,788)						2019						2011
1988						South San Francisco						CA						—						10,120						—						120,282						10,120						120,282						130,402						(23,861)						2019						2011
1989						South San Francisco						CA						—						9,169						—						100,232						9,169						100,232						109,401						(13,686)						2020						2011
2553						South San Francisco						CA						—						2,897						8,691						4,951						2,897						13,642						16,539						(3,983)						1988						2015
2554						South San Francisco						CA						—						995						2,754						3,076						995						5,110						6,105						(1,047)						1988						2015
2555						South San Francisco						CA						—						2,202						10,776						2,200						2,202						12,909						15,111						(2,746)						1988						2015
2556						South San Francisco						CA						—						2,962						15,108						1,500						2,962						16,607						19,569						(3,475)						1988						2015
2557						South San Francisco						CA						—						2,453						13,063						3,616						2,453						16,679						19,132						(4,956)						1988						2015
2558						South San Francisco						CA						—						1,163						5,925						315						1,163						6,240						7,403						(1,250)						1988						2015
2624						South San Francisco						CA						—						25,502						42,910						13,847						25,502						55,604						81,106						(11,129)						2001						2017
2870						South San Francisco						CA						—						23,297						41,797						28,766						23,297						70,563						93,860						(12,994)						1996/2019						2018
2871						South San Francisco						CA						—						20,293						41,262						22,011						20,293						63,273						83,566						(15,166)						1999/2019						2018
3100						South San Francisco						CA						—						24,059						—						1,867						24,059						1,867						25,926						—						—						2021
3101						South San Francisco						CA						—						61,208						—						6,548						61,208						6,548						67,756						—						—						2021
3102						South San Francisco						CA						—						43,885						—						1,343						43,885						1,343						45,228						—						—						2021
3123						South San Francisco						CA						—						—						—						6,412						—						6,412						6,412						—						—						2007
2705						Cambridge						MA						—						24,371						128,498						78						24,371						128,577						152,948						(8,966)						2011						2020
2706						Cambridge						MA						—						15,473						149,051						8						15,473						149,059						164,532						(11,386)						2019						2020
2707						Cambridge						MA						—						25,549						229,547						8,698						25,549						238,245						263,794						(16,198)						2019						2020
2708						Cambridge						MA						—						—						17,751						398						—						18,149						18,149						(946)						2010						2020
2709						Cambridge						MA						—						—						15,451						17						—						15,468						15,468						(805)						2019						2020
2928						Cambridge						MA						—						44,215						24,120						4,099						44,215						26,989						71,204						(2,845)						1984						2019
2929						Cambridge						MA						—						20,517						—						153,005						20,517						153,005						173,522						(936)						2022						2019
3074						Cambridge						MA						—						78,762						252,153						8,946						78,762						261,099						339,861						(24,413)						2018						2019
3106						Cambridge						MA						—						20,644						2,982						432						20,644						3,415						24,059						(136)						1950						2021
3107						Cambridge						MA						—						19,009						12,327						—						19,009						12,327						31,336						(481)						1973						2021
3108						Cambridge						MA						—						123,074						7,513						—						123,074						7,513						130,587						(388)						1965						2021
3109						Cambridge						MA						—						5,903						—						110						5,903						110						6,013						—						—						2021
3112						Cambridge						MA						—						23,402						47,623						96						23,402						47,719						71,121						(2,194)						1985						2021
3113						Cambridge						MA						—						36,093						—						1,453						36,093						1,453						37,546						—						—						2021
3114						Cambridge						MA						—						22,969						—						(2,115)						22,969						(2,115)						20,854						—						—						2021
3115						Cambridge						MA						—						66,786						—						545						66,786						545						67,331						—						—						2021
3116						Cambridge						MA						—						—						—						3,642						—						3,642						3,642						—						—						2021
3119						Cambridge						MA						—						—						29,667						—						—						29,667						29,667						(1,099)						2021						2021
3120						Cambridge						MA						—						18,063						—						224						18,063						224						18,287						—						—						2021
3122						Cambridge						MA						—						25,247						—						1,000						25,247						1,000						26,247						—						—						2021
3136						Cambridge						MA						—						4,119						—						(164)						4,119						(164)						3,955						—						—						2021
3137						Cambridge						MA						—						41,327						—						1,212						41,327						1,212						42,539						—						—						2021
3141						Cambridge						MA						—						72,768						—						2,499						72,768						2,499						75,267						—						—						2022
3151						Cambridge						MA						—						8,555						—						3						8,555						3						8,558						—						—						2022
3148						Cambridge						MA						—						2,283						—						1						2,283						1						2,284						—						—						2022
3149						Cambridge						MA						—						5,705						—						2						5,705						2						5,707						—						—						2022
3150						Cambridge						MA						—						1,655						—						—						1,655						—						1,655						—						—						2022
2630						Lexington						MA						—						16,411						49,681						670						16,411						50,351						66,762						(11,807)						1999						2017
2631						Lexington						MA						—						7,759						142,081						25,479						7,759						162,079						169,838						(21,202)						2010						2017
2632						Lexington						MA						—						—						21,390						125,363						—						146,246						146,246						(11,999)						2021						2018
3070						Lexington						MA						—						14,013						17,083						37						14,013						16,814						30,827						(1,958)						1974/2012						2019
3071						Lexington						MA						—						14,930						16,677						229						14,930						16,151						31,081						(1,705)						1970/2012						2019
3072						Lexington						MA						—						34,598						43,032						—						34,598						42,744						77,342						(5,838)						1967/2013						2019
3073						Lexington						MA						—						37,050						44,647						94						37,050						44,741						81,791						(6,223)						2017						2019

																		Encumbrances at December 31, 2022						Initial Cost to Company												Costs Capitalized Subsequent to Acquisition						Gross Amount at Which Carried As of December 31, 2022																		Accumulated Depreciation**(4)**						Year Constructed**(5)**						Year Acquired
						City						State									Land**(1)**						Buildings and Improvements**(2)**									Land						Buildings and Improvements						Total**(3)**
3093						Waltham						MA						—						47,792						275,556						18,648						47,792						292,545						340,337						(26,840)						2018						2020
2011						Durham						NC						—						448						6,152						23,847						448						24,341						24,789						(7,054)						1955/2014						2011
2030						Durham						NC						—						1,920						5,661						34,811						1,926						40,465						42,391						(15,772)						1926/2013						2012
9999						Denton						TX						—						100						—						72						100						—						100						—						—						2016
464						Salt Lake City						UT						—						630						6,921						2,562						630						9,484						10,114						(5,364)						1996						2001
465						Salt Lake City						UT						—						125						6,368						68						125						6,436						6,561						(3,119)						1999						2001
466						Salt Lake City						UT						—						—						14,614						73						—						13,213						13,213						(5,041)						2002						2001
1593						Salt Lake City						UT						—						—						23,998						250						—						24,248						24,248						(9,033)						2010						2010
																		$	—					$	1,933,254					$	3,273,282					$	3,567,689					$	1,936,126					$	6,623,610					$	8,559,736					$	(1,274,094)

																		Encumbrances at December 31, 2022						Initial Cost to Company												Costs Capitalized Subsequent to Acquisition						Gross Amount at Which Carried As of December 31, 2022																		Accumulated Depreciation**(4)**						Year Constructed**(5)**						Year Acquired
						City						State									Land**(1)**						Buildings and Improvements**(2)**									Land						Buildings and Improvements						Total**(3)**
Medical office
638						Anchorage						AK						$	—					$	1,456					$	10,650					$	13,956					$	1,456					$	21,328					$	22,784					$	(8,842)					1993/2014						2006
3026						Bentonville						AR						—						912						21,724						789						912						22,513						23,425						(721)						2003						2022
126						Sherwood						AR						—						709						9,604						—						709						9,599						10,308						(6,679)						1990						1989
2572						Springdale						AR						—						—						27,714						—						—						27,714						27,714						(5,497)						1995						2016
520						Chandler						AZ						—						3,669						13,503						7,742						3,799						19,368						23,167						(8,497)						2005						2002
113						Glendale						AZ						—						1,565						7,050						20						1,565						7,225						8,790						(5,143)						1989						1988
2040						Mesa						AZ						—						—						17,314						2,213						—						18,542						18,542						(4,785)						2007						2012
1066						Scottsdale						AZ						—						5,115						14,064						8,648						4,839						20,196						25,035						(7,540)						1999						2006
2021						Scottsdale						AZ						—						—						12,312						7,551						—						16,283						16,283						(6,312)						1984						2012
2022						Scottsdale						AZ						—						—						9,179						4,439						—						10,543						10,543						(3,868)						1996						2012
2023						Scottsdale						AZ						—						—						6,398						2,515						—						7,733						7,733						(3,561)						2000						2012
2024						Scottsdale						AZ						—						—						9,522						2,015						32						10,747						10,779						(4,251)						2007						2012
2025						Scottsdale						AZ						—						—						4,102						3,398						—						6,025						6,025						(2,625)						1981						2012
2026						Scottsdale						AZ						—						—						3,655						2,336						—						5,565						5,565						(2,535)						1992						2012
2027						Scottsdale						AZ						—						—						7,168						3,478						—						9,548						9,548						(4,336)						1995						2012
2028						Scottsdale						AZ						—						—						6,659						5,595						—						11,497						11,497						(4,607)						1998						2012
2696						Scottsdale						AZ						—						10,151						14,925						3,286						10,211						18,143						28,354						(3,515)						1998						2020
1041						Brentwood						CA						—						—						30,864						10,983						309						39,668						39,977						(13,503)						2004						2006
1200						Encino						CA						—						6,151						10,438						8,821						6,756						15,764						22,520						(7,208)						1973						2006
1038						Fresno						CA						—						3,652						29,113						21,935						3,652						51,048						54,700						(22,480)						1984						2006
436						Murrieta						CA						—						400						9,266						5,940						749						12,380						13,129						(8,054)						1991						1999
239						Poway						CA						—						2,700						10,839						6,467						3,104						13,511						16,615						(8,750)						1990						1997
2654						Riverside						CA						—						2,758						9,908						1,127						2,758						10,801						13,559						(2,230)						2008						2017
318						Sacramento						CA						—						2,860						37,566						28,181						2,911						63,560						66,471						(25,031)						1989/2016						1998
2404						Sacramento						CA						—						1,268						5,109						1,363						1,299						6,123						7,422						(2,229)						1999						2015
421						San Diego						CA						—						2,910						19,984						16,469						2,964						35,070						38,034						(16,109)						1986/2013						1999
564						San Jose						CA						—						1,935						1,728						4,000						1,935						3,686						5,621						(1,625)						1968						2003
565						San Jose						CA						—						1,460						7,672						2,654						1,460						9,770						11,230						(4,238)						1995						2003
659						Los Gatos						CA						—						1,718						3,124						1,660						1,796						4,255						6,051						(1,779)						1995						2006
439						Valencia						CA						—						2,300						6,967						5,392						2,404						10,017						12,421						(6,125)						1990						1999
440						West Hills						CA						—						2,100						11,595						13,695						2,259						20,297						22,556						(7,779)						1992						1999
3008						West Hills						CA						12,052						5,795						13,933						2,496						5,823						16,150						21,973						(1,003)						1965						2021
728						Aurora						CO						—						—						8,764						5,727						—						10,715						10,715						(4,438)						2005						2005
1196						Aurora						CO						—						210						12,362						8,005						210						18,842						19,052						(7,645)						1981/2018						2006
1197						Aurora						CO						—						200						8,414						7,401						285						14,358						14,643						(6,212)						1994/2018						2006
127						Colorado Springs						CO						—						690						8,338						—						690						8,415						9,105						(5,875)						1990						1989
882						Colorado Springs						CO						—						—						12,933						12,891						—						21,513						21,513						(9,563)						2007						2006
1199						Denver						CO						—						493						7,897						2,793						668						9,510						10,178						(4,793)						1993						2006
808						Englewood						CO						—						—						8,616						13,388						11						18,442						18,453						(9,524)						1981						2005
809						Englewood						CO						—						—						8,449						16,776						—						22,237						22,237						(6,059)						1990						2005
810						Englewood						CO						—						—						8,040						14,877						—						18,697						18,697						(8,707)						1989						2005
811						Englewood						CO						—						—						8,472						15,163						—						20,604						20,604						(8,681)						1993/2020						2005
2658						Highlands Ranch						CO						—						1,637						10,063						94						1,732						10,063						11,795						(1,937)						2015						2017
812						Littleton						CO						—						—						4,562						3,997						257						6,482						6,739						(3,095)						1987						2005
813						Littleton						CO						—						—						4,926						3,286						251						6,324						6,575						(2,737)						1990						2005
570						Lone Tree						CO						—						—						—						23,999						—						21,884						21,884						(9,404)						2004						2003
666						Lone Tree						CO						—						—						23,274						5,888						17						26,446						26,463						(11,638)						2003						2006
2233						Lone Tree						CO						—						—						6,734						33,848						—						39,973						39,973						(13,804)						2015						2014
3000						Lone Tree						CO						—						4,393						31,643						6,135						4,393						37,778						42,171						(2,007)						2020						2021
510						Thornton						CO						—						236						10,206						15,580						463						22,963						23,426						(6,726)						2001/2021						2002
434						Atlantis						FL						—						—						2,027						552						5						2,324						2,329						(1,518)						1997						1999
435						Atlantis						FL						—						—						2,000						1,332						—						2,659						2,659						(1,733)						1997						1999
602						Atlantis						FL						—						455						2,231						1,561						455						3,225						3,680						(1,431)						1984						2006
2963						Brooksville						FL						—						—						—						11,490						—						11,490						11,490						(913)						2020						2019
604						Englewood						FL						—						170						1,134						1,194						226						1,868						2,094						(734)						1986						2006
2962						Orange Park						FL						—						—						—						16,983						—						16,983						16,983						(601)						2022						2019
609						Kissimmee						FL						—						788						174						1,246						788						1,239						2,027						(556)						1978						2006
610						Kissimmee						FL						—						481						347						904						494						628						1,122						(344)						1978						2006
671						Kissimmee						FL						—						—						7,574						2,904						—						8,247						8,247						(3,755)						1998						2006
603						Lake Worth						FL						—						1,507						2,894						1,807						1,507						2,868						4,375						(1,374)						1997						2006
612						Margate						FL						—						1,553						6,898						3,585						1,553						9,421						10,974						(4,219)						1994						2006
613						Miami						FL						—						4,392						11,841						15,281						4,454						22,922						27,376						(7,410)						1995/2020						2006
2202						Miami						FL						—						—						13,123						11,991						—						24,034						24,034						(8,801)						1973						2014
2203						Miami						FL						—						—						8,877						5,205						—						13,597						13,597						(4,813)						1986						2014
1067						Milton						FL						—						—						8,566						1,361						—						9,813						9,813						(3,687)						2003						2006
2577						Naples						FL						—						—						29,186						1,805						—						30,991						30,991						(5,884)						1999						2016
2578						Naples						FL						—						—						18,819						667						—						19,486						19,486						(3,147)						2007						2016
2964						Okeechobee						FL						—						—						—						16,751						—						16,751						16,751						(455)						2022						2019
563						Orlando						FL						—						2,144						5,136						16,761						12,033						7,591						19,624						(6,377)						1985						2003
833						Pace						FL						—						—						10,309						4,179						54						11,533						11,587						(4,306)						2005						2006
834						Pensacola						FL						—						—						11,166						669						—						11,358						11,358						(4,237)						2005						2006
673						Plantation						FL						—						1,091						7,176						3,269						1,091						9,368						10,459						(4,023)						2001						2006
674						Plantation						FL						—						—						8,273						572						—						8,845						8,845						(570)						2015						2021
2579						Punta Gorda						FL						—						—						9,379						—						—						9,379						9,379						(1,678)						2006						2016
2833						St. Petersburg						FL						—						—						13,754						15,843						—						23,467						23,467						(8,651)						1995/2019						2006
2836						Tampa						FL						—						1,967						6,618						9,533						2,700						10,719						13,419						(6,475)						1984						2006
887						Atlanta						GA						—						4,300						13,690						—						4,300						11,890						16,190						(9,413)						1966/1996						2007
3214						Savannah						GA						—						—						—						867						—						867						867						—						—						2022
2576						Statesboro						GA						—						—						10,234						439						—						10,673						10,673						(2,542)						1999						2016
3006						Arlington Heights						IL						4,845						3,011						9,651						591						3,187						10,021						13,208						(759)						1975/2013						2021
2702						Bolingbrook						IL						—						—						21,237						1,910						—						23,055						23,055						(1,855)						2008						2020

																		Encumbrances at December 31, 2022						Initial Cost to Company												Costs Capitalized Subsequent to Acquisition						Gross Amount at Which Carried As of December 31, 2022																		Accumulated Depreciation**(4)**						Year Constructed**(5)**						Year Acquired
						City						State									Land**(1)**						Buildings and Improvements**(2)**									Land						Buildings and Improvements						Total**(3)**
3004						Highland Park						IL						5,834						2,767						11,495						217						2,767						11,674						14,441						(742)						2008						2021
3005						Lockport						IL						10,976						3,106						22,645						—						3,106						22,645						25,751						(1,410)						2010						2021
1065						Marion						IL						—						99						11,538						2,322						100						13,375						13,475						(5,541)						2002						2006
2719						Marion						IL						—						—						—						5,098						—						5,098						5,098						(221)						2021						2021
2697						Indianapolis						IN						—						—						59,746						697						—						60,364						60,364						(3,979)						2002						2020
2699						Indianapolis						IN						—						—						23,211						711						—						23,921						23,921						(1,586)						2002						2020
2701						Indianapolis						IN						—						478						1,637						136						478						1,749						2,227						(501)						1984						2020
2698						Mooresville						IN						—						—						20,646						653						—						21,292						21,292						(1,407)						2004						2020
1057						Newburgh						IN						—						—						14,019						5,381						—						19,250						19,250						(9,128)						2005						2006
2700						Zionsville						IN						—						2,969						7,281						809						3,040						7,998						11,038						(757)						2005						2020
2039						Kansas City						KS						—						440						2,173						316						448						2,436						2,884						(658)						2006						2012
112						Overland Park						KS						—						2,316						10,681						24						2,316						10,797						13,113						(7,924)						1989						1988
2043						Overland Park						KS						—						—						7,668						2,354						—						9,290						9,290						(2,692)						2009						2012
3062						Overland Park						KS						—						872						11,813						526						978						11,811						12,789						(2,053)						2007						2019
483						Wichita						KS						—						530						3,341						788						605						3,510						4,115						(1,645)						2000						2001
3018						Wichita						KS						—						3,946						39,795						—						3,946						39,795						43,741						(2,305)						1973/2017						2021
1064						Lexington						KY						—						—						12,726						2,837						—						14,648						14,648						(6,224)						2003						2006
735						Louisville						KY						—						936						8,426						18,960						936						23,542						24,478						(13,083)						1971/2019						2005
737						Louisville						KY						—						835						27,627						11,636						878						35,899						36,777						(16,797)						2002						2005
738						Louisville						KY						—						780						8,582						8,694						851						13,331						14,182						(10,083)						1978						2005
739						Louisville						KY						—						826						13,814						4,003						832						16,046						16,878						(6,911)						2003						2005
2834						Louisville						KY						—						2,983						13,171						8,866						2,991						18,816						21,807						(10,006)						1990						2005
1945						Louisville						KY						—						3,255						28,644						3,092						3,365						30,902						34,267						(12,422)						2009						2010
1946						Louisville						KY						—						430						6,125						276						430						6,401						6,831						(2,587)						2002						2010
2237						Louisville						KY						—						1,519						15,386						5,450						1,672						20,351						22,023						(7,139)						1991						2014
2238						Louisville						KY						—						1,334						12,172						3,627						1,558						14,624						16,182						(4,921)						1996						2014
2239						Louisville						KY						—						1,644						10,832						6,912						2,091						16,272						18,363						(6,510)						1988						2014
3023						Covington						LA						—						9,490						21,918						94						9,490						22,012						31,502						(1,204)						2014						2021
3121						Cambridge						MA						—						40,663						23,102						—						40,663						23,102						63,765						(956)						1983						2021
1213						Ellicott City						MD						—						1,115						3,206						4,960						1,463						6,257						7,720						(2,884)						1988						2006
1052						Towson						MD						—						—						14,233						5,579						—						14,435						14,435						(5,538)						2005						2006
2650						Biddeford						ME						—						1,341						17,376						107						1,341						17,483						18,824						(3,524)						2007						2017
3002						Burnsville						MN						7,713						2,801						17,779						892						2,861						18,611						21,472						(2,148)						1988						2021
3003						Burnsville						MN						5,142						516						13,200						452						533						13,382						13,915						(1,374)						1992						2021
3009						Burnsville						MN						18,985						4,640						38,064						40						4,664						38,080						42,744						(2,488)						2007						2021
240						Minneapolis						MN						—						117						13,213						7,285						117						18,442						18,559						(11,143)						1986						1997
300						Minneapolis						MN						—						160						10,131						6,920						214						14,342						14,556						(8,692)						1987						1998
2703						Columbia						MO						—						4,141						20,364						—						4,141						20,364						24,505						(1,845)						1997						2020
2032						Independence						MO						—						—						48,025						3,539						—						50,173						50,173						(12,403)						2006						2012
2863						Lee's Summit						MO						—						—						—						16,454						—						16,454						16,454						(1,822)						2020						2019
1078						Flowood						MS						—						—						8,413						2,177						—						9,902						9,902						(3,723)						2003						2006
1059						Jackson						MS						—						—						8,868						692						—						9,523						9,523						(3,776)						2002						2006
1060						Jackson						MS						—						—						7,187						3,022						—						9,131						9,131						(3,500)						2005						2006
1068						Omaha						NE						—						—						16,243						3,023						41						18,491						18,532						(7,563)						2005						2006
2651						Charlotte						NC						—						1,032						6,196						204						1,032						6,295						7,327						(992)						2007						2017
2695						Charlotte						NC						—						844						5,021						76						844						5,060						5,904						(781)						2007						2017
2655						Wilmington						NC						—						1,949						12,244						—						1,949						12,244						14,193						(2,291)						2003						2017
2656						Wilmington						NC						—						2,071						11,592						—						2,071						11,592						13,663						(2,146)						2006						2017
2657						Shallotte						NC						—						918						3,609						—						918						3,609						4,527						(921)						2017						2017
2647						Concord						NH						—						1,961						23,516						556						1,961						22,721						24,682						(2,953)						2004						2017
2648						Concord						NH						—						815						8,902						464						815						9,366						10,181						(2,106)						2008						2017
2649						Epsom						NH						—						919						5,868						59						919						5,303						6,222						(976)						2010						2017
3011						Cherry Hill						NJ						—						5,235						21,731						—						5,235						21,731						26,966						(1,685)						2014						2021
3012						Morristown						NJ						—						21,703						32,517						3,119						21,703						35,636						57,339						(2,476)						1983/2013						2021
3013						Morristown						NJ						—						14,567						20,548						6,480						14,567						27,028						41,595						(1,118)						1990						2021
3014						Morristown						NJ						—						20,563						31,849						1,007						20,563						32,857						53,420						(1,466)						1981						2021
729						Albuquerque						NM						—						—						5,380						2,466						—						7,308						7,308						(2,623)						2006						2005
571						Las Vegas						NV						—						—						—						22,137						—						19,359						19,359						(8,720)						2004						2003
660						Las Vegas						NV						—						1,121						4,363						12,784						1,328						12,540						13,868						(4,437)						1973						2006
661						Las Vegas						NV						—						2,305						—						1,371						3,676						—						3,676						—						—						2006
662						Las Vegas						NV						—						1,000						—						—						1,000						—						1,000						—						—						2006
663						Las Vegas						NV						—						1,717						3,597						15,366						1,724						15,511						17,235						(6,094)						1974/2018						2006
664						Las Vegas						NV						—						1,172						—						633						1,805						—						1,805						(369)						—						2006
691						Las Vegas						NV						—						3,073						18,339						8,915						3,167						25,521						28,688						(15,113)						1989/2015						2004
2037						Mesquite						NV						—						—						5,559						1,030						34						6,430						6,464						(1,898)						2004						2012
400						Harrison						OH						—						—						4,561						666						—						4,927						4,927						(3,019)						1995						1999
1054						Durant						OK						—						619						9,256						3,301						659						12,364						13,023						(4,905)						1998						2006
817						Owasso						OK						—						—						6,582						2,090						—						6,113						6,113						(2,535)						2006						2005
404						Roseburg						OR						—						—						5,707						1,147						—						6,154						6,154						(3,726)						1999						1999
3010						Springfield						OR						20,666						—						51,998						386						—						51,982						51,982						(3,493)						2011						2021
2570						Limerick						PA						—						925						20,072						51						925						19,953						20,878						(4,350)						1999						2016
2234						Philadelphia						PA						—						24,264						99,904						49,324						24,288						149,067						173,355						(36,719)						1973/2019						2014
2403						Philadelphia						PA						—						26,063						97,646						38,382						26,134						135,309						161,443						(41,809)						2000						2015
2571						Wilkes-Barre						PA						—						—						9,138						11						—						9,149						9,149						(2,186)						2001						2016
2694						Anderson						SC						—						405						1,211						—						405						1,211						1,616						(251)						2012						2020
2573						Florence						SC						—						—						12,090						91						—						12,180						12,180						(2,323)						1998						2016
2574						Florence						SC						—						—						12,190						88						—						12,277						12,277						(2,338)						1998						2016
2575						Florence						SC						—						—						11,243						56						—						11,299						11,299						(2,635)						1995						2016
2841						Greenville						SC						—						634						38,386						2,006						647						39,635						40,282						(7,332)						1991						2018
2842						Greenville						SC						—						794						41,293						560						794						41,058						41,852						(7,587)						1999						2018
2843						Greenville						SC						—						626						22,210						13						626						22,223						22,849						(4,825)						1996						2018
2844						Greenville						SC						—						806						18,889						948						806						19,031						19,837						(3,507)						1998						2018

																		Encumbrances at December 31, 2022						Initial Cost to Company												Costs Capitalized Subsequent to Acquisition						Gross Amount at Which Carried As of December 31, 2022																		Accumulated Depreciation**(4)**						Year Constructed**(5)**						Year Acquired
						City						State									Land**(1)**						Buildings and Improvements**(2)**									Land						Buildings and Improvements						Total**(3)**
2845						Greenville						SC						—						932						40,879						224						932						41,103						42,035						(7,874)						2005						2018
2846						Greenville						SC						—						896						38,486						632						896						39,118						40,014						(7,522)						2007						2018
2847						Greenville						SC						—						600						26,472						5,083						600						30,954						31,554						(6,219)						1996						2018
2850						Greenville						SC						—						211						6,503						154						211						6,656						6,867						(1,553)						2008						2018
2853						Greenville						SC						—						534						6,430						229						534						5,576						6,110						(1,310)						1998						2018
2854						Greenville						SC						—						824						13,645						109						824						13,755						14,579						(3,808)						1992						2018
2848						Greer						SC						—						318						5,816						—						318						5,816						6,134						(1,233)						2008						2018
2849						Greer						SC						—						319						5,836						98						319						5,935						6,254						(1,383)						2008						2018
2851						Travelers Rest						SC						—						498						1,015						202						498						1,018						1,516						(483)						1998						2018
2862						Myrtle Beach						SC						—						—						—						27,660						—						27,660						27,660						(4,213)						2019						2018
2865						Brentwood						TN						—						—						—						34,201						—						34,201						34,201						(2,397)						2020						2019
624						Hendersonville						TN						—						256						1,530						3,480						256						3,619						3,875						(1,738)						1985						2006
559						Hermitage						TN						—						830						5,036						14,514						945						17,211						18,156						(6,645)						1999/2019						2003
561						Hermitage						TN						—						596						9,698						9,110						596						15,414						16,010						(8,217)						1993						2003
562						Hermitage						TN						—						317						6,528						5,427						317						9,761						10,078						(4,751)						1994						2003
625						Nashville						TN						—						955						14,289						9,976						955						20,959						21,914						(8,572)						2000						2006
626						Nashville						TN						—						2,050						5,211						7,211						2,055						9,238						11,293						(3,819)						1987						2006
627						Nashville						TN						—						1,007						181						1,491						1,113						1,073						2,186						(479)						1975						2006
628						Nashville						TN						—						2,980						7,164						6,377						2,980						11,339						14,319						(5,081)						1988						2006
630						Nashville						TN						—						515						848						520						528						1,057						1,585						(508)						1975						2006
631						Nashville						TN						—						266						1,305						2,222						266						2,552						2,818						(1,332)						1980						2006
632						Nashville						TN						—						827						7,642						6,300						827						10,796						11,623						(5,441)						1988						2006
633						Nashville						TN						—						5,425						12,577						10,755						5,425						19,406						24,831						(9,067)						1971						2006
634						Nashville						TN						—						3,818						15,185						17,341						3,818						26,738						30,556						(12,093)						1992						2006
636						Nashville						TN						—						583						450						522						604						793						1,397						(360)						1974						2006
2967						Nashville						TN						—						—						—						47,823						—						47,823						47,823						(1,989)						2021						2019
2720						Nashville						TN						—						102						10,925						886						102						11,804						11,906						(1,299)						1986						2021
2611						Allen						TX						—						1,330						5,960						838						1,374						6,740						8,114						(1,579)						2004						2016
2612						Allen						TX						—						1,310						4,165						1,438						1,310						5,581						6,891						(1,469)						2005						2016
573						Arlington						TX						—						769						12,355						12,450						769						21,615						22,384						(7,448)						1995						2006
2621						Cedar Park						TX						—						1,617						11,640						809						1,617						12,450						14,067						(1,726)						2007						2017
576						Conroe						TX						—						324						4,842						5,202						324						8,161						8,485						(3,540)						1983						2006
577						Conroe						TX						—						397						7,966						4,643						397						11,334						11,731						(5,268)						1995						2006
578						Conroe						TX						—						388						7,975						5,687						388						10,267						10,655						(4,158)						1997/2012						2006
579						Conroe						TX						—						188						3,618						1,697						188						4,622						4,810						(2,231)						1995						2006
581						Corpus Christi						TX						—						717						8,181						8,130						717						12,331						13,048						(5,875)						1995						2006
600						Corpus Christi						TX						—						328						3,210						5,094						328						5,999						6,327						(3,431)						1995						2006
601						Corpus Christi						TX						—						313						1,771						2,463						325						3,235						3,560						(1,755)						1985						2006
2839						Cypress						TX						—						—						—						38,362						11						37,120						37,131						(11,016)						2016						2015
582						Dallas						TX						—						1,664						6,785						7,505						1,747						11,387						13,134						(5,185)						1979						2006
1314						Dallas						TX						—						15,230						162,970						30,642						24,093						183,326						207,419						(82,918)						1974						2007
1315						Dallas						TX						—						—						—						4,458						26						3,246						3,272						(1,367)						1978						2007
1316						Dallas						TX						—						—						—						11,943						—						7,925						7,925						(1,393)						1985						2007
1317						Dallas						TX						—						—						—						11,510						—						10,984						10,984						(1,645)						1995						2007
1319						Dallas						TX						—						18,840						155,659						7,097						18,840						162,198						181,038						(71,767)						1974						2007
2721						Dallas						TX						—						31,707						2,000						(2)						31,707						1,998						33,705						(1,498)						1983						2020
3007						Denton						TX						5,636						2,298						9,502						97						2,338						9,559						11,897						(810)						2014						2021
3020						Frisco						TX						—						—						27,201						704						—						27,869						27,869						(1,296)						2004						2021
3021						Frisco						TX						—						—						26,181						1,536						—						27,698						27,698						(1,420)						2004						2021
583						Fort Worth						TX						—						898						4,866						5,802						898						9,131						10,029						(3,953)						1995						2006
805						Fort Worth						TX						—						—						2,481						2,335						45						3,866						3,911						(2,364)						1985						2005
806						Fort Worth						TX						—						—						6,070						2,454						5						7,973						7,978						(3,567)						1985						2005
2619						Fort Worth						TX						—						1,180						13,432						1,437						1,180						14,869						16,049						(1,703)						2006						2017
2620						Fort Worth						TX						—						1,961						14,155						366						2,000						14,482						16,482						(1,900)						2005						2017
2982						Fort Worth						TX						—						2,720						6,225						5,880						2,720						12,022						14,742						(2,236)						2020						2019
1061						Granbury						TX						—						—						6,863						1,331						—						8,054						8,054						(3,406)						2001						2006
430						Houston						TX						—						1,927						33,140						24,348						2,479						52,033						54,512						(29,418)						1985/2018						1999
446						Houston						TX						—						2,200						19,585						25,280						2,945						32,869						35,814						(23,130)						1976/2018						1999
589						Houston						TX						—						1,676						12,602						20,000						1,706						27,359						29,065						(7,835)						1985/2022						2006
702						Houston						TX						—						—						7,414						4,119						7						9,504						9,511						(4,449)						2006						2006
1044						Houston						TX						—						—						4,838						7,140						1,321						8,737						10,058						(3,053)						2006						2006
2542						Houston						TX						—						304						17,764						—						304						17,764						18,068						(4,091)						1990						2015
2543						Houston						TX						—						116						6,555						—						116						6,439						6,555						(1,639)						1970						2015
2544						Houston						TX						—						312						12,094						—						312						12,094						12,406						(3,316)						1987						2015
2545						Houston						TX						—						316						13,931						—						316						13,931						14,247						(2,909)						2005						2015
2546						Houston						TX						—						408						18,332						—						408						17,925						18,333						(5,500)						1977						2015
2547						Houston						TX						—						470						18,197						—						470						17,727						18,197						(4,549)						1985						2015
2548						Houston						TX						—						313						7,036						—						313						6,724						7,037						(2,111)						1979						2015
2549						Houston						TX						—						530						22,711						—						530						22,711						23,241						(4,182)						2006						2015
2966						Houston						TX						—						—						—						32,920						—						32,920						32,920						(845)						2022						2020
590						Irving						TX						—						828						6,160						6,147						828						10,035						10,863						(4,146)						1997						2006
700						Irving						TX						—						—						8,550						6,390						8						11,256						11,264						(4,562)						2004						2006
1207						Irving						TX						—						1,955						12,793						4,684						2,063						16,131						18,194						(6,119)						2001						2006
2840						Kingwood						TX						—						3,035						28,373						2,128						3,422						28,718						32,140						(5,586)						2003						2016
591						Lewisville						TX						—						561						8,043						3,043						561						9,513						10,074						(4,688)						1976						2006
144						Longview						TX						—						102						7,998						1,438						102						8,986						9,088						(5,450)						1993						1992
143						Lufkin						TX						—						338						2,383						299						338						2,602						2,940						(1,573)						1993						1992
568						McKinney						TX						—						541						6,217						5,260						541						9,910						10,451						(4,928)						1999						2003
569						McKinney						TX						—						—						636						9,509						—						9,045						9,045						(4,251)						2004						2003
596						North Richland Hills						TX						—						812						8,883						6,238						812						12,644						13,456						(4,720)						1999						2006
2048						North Richland Hills						TX						—						1,385						10,213						2,364						1,400						12,034						13,434						(5,092)						2007						2012
2835						Pearland						TX						—						—						4,014						5,707						29						7,866						7,895						(3,010)						2006						2006

																		Encumbrances at December 31, 2022						Initial Cost to Company												Costs Capitalized Subsequent to Acquisition						Gross Amount at Which Carried As of December 31, 2022																		Accumulated Depreciation**(4)**						Year Constructed**(5)**						Year Acquired
						City						State									Land**(1)**						Buildings and Improvements**(2)**									Land						Buildings and Improvements						Total**(3)**
2838						Pearland						TX						—						—						—						19,978						—						18,768						18,768						(4,996)						2015						2014
597						Plano						TX						—						1,210						9,588						10,042						1,225						17,340						18,565						(7,412)						1997						2006
672						Plano						TX						—						1,389						12,768						5,783						1,389						15,701						17,090						(6,542)						2004						2006
1384						Plano						TX						—						6,290						22,686						6,702						6,290						29,197						35,487						(22,652)						1997						2007
2653						Rockwall						TX						—						788						9,020						39						788						9,026						9,814						(1,533)						2015						2017
815						San Antonio						TX						—						—						9,193						4,303						87						12,038						12,125						(5,744)						1997						2006
816						San Antonio						TX						1,902						—						8,699						14,749						175						21,625						21,800						(5,880)						1992/2022						2006
2837						San Antonio						TX						—						—						26,191						4,030						—						28,781						28,781						(11,500)						2006						2011
2852						Shenandoah						TX						—						—						—						29,980						—						29,980						29,980						(6,808)						2017						2016
598						Sugar Land						TX						—						1,078						5,158						4,245						1,170						6,912						8,082						(3,313)						1982						2006
599						Texas City						TX						—						—						9,519						2,326						—						11,649						11,649						(4,913)						2003						2006
152						Victoria						TX						—						125						8,977						711						125						9,294						9,419						(5,628)						1994						1992
2198						Webster						TX						—						2,220						9,602						462						2,220						9,744						11,964						(3,516)						1991						2013
3024						Webster						TX						—						3,196						12,911						36						3,212						12,931						16,143						(449)						2007						2022
3025						Webster						TX						—						3,209						23,782						16						3,225						23,782						27,007						(671)						2007						2022
2550						The Woodlands						TX						—						115						5,141						—						115						5,141						5,256						(1,210)						1984						2015
2551						The Woodlands						TX						—						296						18,282						—						296						18,282						18,578						(3,706)						1997						2015
2552						The Woodlands						TX						—						374						25,125						—						374						25,125						25,499						(4,538)						2004						2015
1592						Bountiful						UT						—						999						7,426						2,222						1,019						9,393						10,412						(3,813)						2005						2010
169						Bountiful						UT						—						276						5,237						4,466						653						8,252						8,905						(3,906)						1995						1994
2035						Draper						UT						4,146						—						10,803						1,244						—						11,543						11,543						(2,859)						2010						2012
469						Kaysville						UT						—						530						4,493						441						530						4,708						5,238						(2,130)						2001						2001
456						Layton						UT						—						371						7,073						3,201						389						9,237						9,626						(4,801)						1998						2001
2042						Layton						UT						—						—						10,975						1,906						44						12,481						12,525						(3,090)						2006						2012
2864						Washington Terrace						UT						—						—						—						19,898						—						19,898						19,898						(2,086)						2020						2019
357						Orem						UT						—						337						8,744						4,751						306						10,201						10,507						(5,970)						1998						1999
353						Salt Lake City						UT						—						190						779						280						273						830						1,103						(576)						1991						1999
354						Salt Lake City						UT						—						220						10,732						4,517						220						13,444						13,664						(8,332)						1999						1999
355						Salt Lake City						UT						—						180						14,792						6,257						180						19,145						19,325						(11,119)						1993						1999
467						Salt Lake City						UT						—						3,000						7,541						3,340						3,145						9,878						13,023						(5,572)						1998						2001
566						Salt Lake City						UT						—						509						4,044						4,993						509						7,717						8,226						(3,679)						1974						2003
2041						Salt Lake City						UT						—						—						12,326						1,347						—						13,185						13,185						(3,272)						2007						2012
2033						Sandy						UT						—						867						3,513						2,697						1,356						5,525						6,881						(2,884)						1989						2012
351						Washington Terrace						UT						—						—						4,573						3,629						17						5,762						5,779						(3,429)						1989						1999
352						Washington Terrace						UT						—						—						2,692						1,801						15						3,665						3,680						(2,555)						1990						1999
2034						West Jordan						UT						—						—						12,021						323						—						11,844						11,844						(2,751)						2006						2012
2036						West Jordan						UT						—						—						1,383						1,671						—						2,714						2,714						(1,472)						1982						2012
1208						Fairfax						VA						—						8,396						16,710						15,381						8,845						27,935						36,780						(14,268)						1974/2018						2006
2230						Fredericksburg						VA						—						1,101						8,570						12						1,113						8,570						9,683						(2,062)						2008						2014
3001						Leesburg						VA						10,185						3,549						24,059						3,701						3,549						27,699						31,248						(2,419)						2010						2021
3015						Midlothian						VA						12,643						—						21,442						179						45						21,354						21,399						(1,024)						2012						2021
3016						Midlothian						VA						11,952						—						20,610						177						32						20,416						20,448						(1,097)						2013						2021
3017						Midlothian						VA						13,829						—						22,531						89						—						22,619						22,619						(1,771)						2014						2021
572						Reston						VA						—						—						11,902						1,353						—						11,712						11,712						(5,938)						2004						2003
448						Renton						WA						—						—						18,724						5,301						—						21,729						21,729						(14,259)						1993						1999
781						Seattle						WA						—						—						52,703						22,499						—						67,881						67,881						(34,648)						1994						2004
782						Seattle						WA						—						—						24,382						31,717						126						50,563						50,689						(19,720)						1990/2022						2004
783						Seattle						WA						—						—						5,625						2,329						211						6,949						7,160						(6,373)						1984						2004
785						Seattle						WA						—						—						7,293						6,153						—						11,351						11,351						(7,886)						1982						2004
1385						Seattle						WA						—						—						45,027						19,908						—						63,018						63,018						(25,124)						1986/2019						2007
3022						Seattle						WA						—						35,624						4,176						—						35,624						4,176						39,800						(1,054)						1963/2012						2021
2038						Evanston						WY						—						—						4,601						1,225						—						5,751						5,751						(1,715)						2002						2012
																		$	146,506					$	530,858					$	3,891,709					$	1,709,551					$	564,526					$	5,218,646					$	5,783,172					$	(1,656,210)

																		Encumbrances at December 31, 2022						Initial Cost to Company												Costs Capitalized Subsequent to Acquisition						Gross Amount at Which Carried As of December 31, 2022																		Accumulated Depreciation**(4)**						Year Constructed**(5)**						Year Acquired
						City						State									Land**(1)**						Buildings and Improvements**(2)**									Land						Buildings and Improvements						Total**(3)**
Continuing care retirement community
3089						Birmingham						AL						$	—					$	6,193					$	32,146					$	3,803					$	6,543					$	35,599					$	42,142					$	(5,502)					1991						2020
3090						Bradenton						FL						—						5,496						95,671						16,038						5,991						103,501						109,492						(15,560)						1985						2020
2997						Clearwater						FL						68,405						6,680						132,521						17,406						6,819						146,467						153,286						(15,324)						1991						2020
3086						Jacksonville						FL						—						19,660						167,860						15,791						20,412						182,496						202,908						(21,706)						1989						2020
2996						Leesburg						FL						—						8,941						65,698						13,662						9,766						78,534						88,300						(10,744)						1990						2020
2995						Port Charlotte						FL						—						5,344						159,612						12,089						5,672						162,232						167,904						(17,301)						1987						2020
2998						Seminole						FL						44,582						14,080						77,485						9,202						15,001						85,766						100,767						(8,074)						1990						2020
3085						Seminole						FL						—						13,915						125,796						11,656						14,613						136,755						151,368						(16,932)						1982						2020
3092						Sun City Center						FL						87,106						25,254						175,535						15,374						26,382						189,781						216,163						(26,301)						1992						2020
3087						The Villages						FL						—						7,091						120,493						12,553						7,312						132,825						140,137						(15,586)						2009						2020
3084						Holland						MI						—						1,572						88,960						6,766						1,804						95,493						97,297						(11,057)						1991						2020
2991						Coatesville						PA						—						16,443						126,243						11,838						17,064						137,463						154,527						(14,965)						1998						2020
3080						Haverford						PA						—						16,461						108,816						29,925						16,461						126,165						142,626						(50,068)						1989						2006
3088						Spring						TX						—						3,210						30,085						6,821						3,475						36,640						40,115						(3,992)						2008						2020
3081						Fort Belvoir						VA						—						11,594						99,528						25,908						11,594						117,897						129,491						(48,177)						1990						2006
																		$	200,093					$	161,934					$	1,606,449					$	208,832					$	168,909					$	1,767,614					$	1,936,523					$	(281,289)
Total real estate assets held for sale																		—						(2,367)						(11,813)						(58,658)						(2,373)						(65,437)						(67,810)						23,455
Total continuing operations, excluding held for sale																		$	346,599					$	2,623,679					$	8,759,627					$	5,427,414					$	2,667,188					$	13,544,433					$	16,211,621					$	(3,188,138)

_______________________________________

(1)Assets with no initial land costs to the Company represent land that the Company leases from a third party (i.e., ground leases).

(2)Assets with no initial buildings and improvements costs to the Company represent development projects in process or completed.

(3)At December 31, 2022, the tax basis of the Company’s net real estate assets is less than the reported amounts by $1.1 billion.

(4)Buildings and improvements are depreciated over useful lives ranging up to 50 years.

(5)Year of original construction/year of last major renovation, if applicable.

A summary of activity for real estate and accumulated depreciation, excluding assets classified as discontinued operations, is as follows (in thousands):

			Year ended December 31,
			2022						2021						2020
Real estate:
Balances at beginning of year			$	15,506,658					$	13,528,893					$	10,372,584
Acquisition of real estate and development and improvements			1,102,593						2,157,539						3,460,556
Sales and/or transfers to assets held for sale			(82,350)						(72,819)						(203,687)
Deconsolidation of real estate			(189,605)						—						—
Impairments			—						(21,294)						(23,991)
Other(1)			(125,675)						(85,661)						(76,569)
Balances at end of year			$	16,211,621					$	15,506,658					$	13,528,893
Accumulated depreciation:
Balances at beginning of year			$	2,839,229					$	2,409,135					$	2,141,960
Depreciation expense			575,125						548,063						438,735
Sales and/or transfers to assets held for sale			(30,428)						(32,692)						(93,220)
Deconsolidation of real estate			(89,766)						—						—
Other(1)			(106,022)						(85,277)						(78,340)
Balances at end of year			$	3,188,138					$	2,839,229					$	2,409,135

_______________________________________

(1)Primarily represents real estate and accumulated depreciation related to fully depreciated assets and reductions to net real estate due to casualty events.

A summary of activity for real estate and accumulated depreciation for assets classified as discontinued operations is as follows (in thousands):

			Year ended December 31,
			2022						2021						2020
Real estate:
Balances at beginning of year			$	—					$	2,930,566					$	4,133,349
Acquisition of real estate and development and improvements			—						8,238						119,333
Sales and/or transfers to assets classified as discontinued operations			—						(2,929,713)						(1,114,792)
Impairments			—						(5,315)						(198,048)
Other(1)			—						(3,776)						(9,276)
Balances at end of year			$	—					$	—					$	2,930,566
Accumulated depreciation:
Balances at beginning of year			$	—					$	615,708					$	861,557
Depreciation expense			—						—						91,726
Sales and/or transfers to assets classified as discontinued operations			—						(615,708)						(333,654)
Other(1)			—						—						(3,921)
Balances at end of year			$	—					$	—					$	615,708

_______________________________________

(1)Primarily represents real estate and accumulated depreciation related to fully depreciated assets.

Schedule IV: Mortgage Loans on Real Estate

(in thousands)

Location						Segment						Interest Rate						Fixed / Variable						Maturity Date						Periodic Payment Terms						Prior Liens												Face Amount of Mortgages						Carrying Amount of Mortgages						Principal Amount Subject to Delinquent Principal or Interest
First mortgages relating to 1 property located in:
California						Other						4.25% + greater of 2% or LIBOR						Variable						05/07/2026						Interest only						$	—											$	20,566					$	17,652					$	—
Florida						Other						greater of 8.5% or SOFR + 5.5%						Variable						12/17/2023						Interest only						—												7,798						6,882						—
Florida						Other						greater of 8.5% or SOFR + 5.5%						Variable						12/17/2023						Interest only						—												3,912						3,769						—
Florida						Other						greater of 8.5% or SOFR + 5.5%						Variable						12/17/2023						Interest only						—												14,207						14,106						—
California						Other						greater of 8.5% or SOFR + 5.5%						Variable						12/16/2023						Interest only						—												35,100						33,143						—
First mortgages relating to 10 properties located in:
Multiple						Other						3.75% + greater of 0.5% or LIBOR						Variable						02/01/2024						Interest only						—												119,754						116,920						—
First mortgages relating to 16 properties located in:
Multiple						Other						4.25%						Fixed						01/21/2023(1)						Interest only						—												149,500						149,277						—
																																				$	—											$	350,837					$	341,749					$	—

			Year Ended December 31,
			2022						2021						2020
Reconciliation of mortgage loans
Balance at beginning of year			$	390,291					$	157,572					$	161,964
Additions:
New mortgage loans			—						310,338						98,469
Draws and additions to existing mortgage loans			5,525						9,370						19,182
Total additions			5,525						319,708						117,651
Deductions:
Principal repayments			(47,591)						(84,486)						(113,200)
Reserve for loan losses(2)			(6,476)						(2,503)						(8,843)
Total deductions			(54,067)						(86,989)						(122,043)
Balance at end of year			$	341,749					$	390,291					$	157,572

_______________________________________

(1)In January 2023, this secured loan reached maturity and the borrower did not make the required principal repayment. Accordingly, the loan is in default. The borrower is in discussions with the Company regarding repayment options and extension of the maturity date.

(2)The years ended December 31, 2022, 2021, and 2020 include current expected credit loss reserves recognized under ASU 2016-13, which was adopted on January 1, 2020 (see Note 2 to the Consolidated Financial Statements). The year ended December 31, 2020 also includes an immaterial amount related to the cumulative-effect of adoption of ASU 2016-13. Refer to Note 8 for additional information on the Company’s reserve for loan losses.