filings.toolsItem 8. Financial Statements and Supplementary Data
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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) | 70 | ||||
| Consolidated Balance Sheets—December 31, 2023 and 2022 | 72 | ||||
| Consolidated Statements of Operations—for the years ended December 31, 2023, 2022, and 2021 | 73 | ||||
| Consolidated Statements of Comprehensive Income (Loss)—for the years ended December 31, 2023, 2022, and 2021 | 74 | ||||
| Consolidated Statements of Equity and Redeemable Noncontrolling Interests—for the years ended December 31, 2023, 2022, and 2021 | 75 | ||||
| Consolidated Statements of Cash Flows—for the years ended December 31, 2023, 2022, and 2021 | 77 | ||||
| Notes to the Consolidated Financial Statements | 78 |
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, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, 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, 2023, 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 9, 2024, 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 5 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.
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.
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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.
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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 9, 2024
We have served as the Company’s auditor since 2010.
Healthpeak Properties, Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| ASSETS | |||||||||||
| Real estate: | |||||||||||
| Buildings and improvements | $ | 13,329,464 | $ | 12,784,078 | |||||||
| Development costs and construction in progress | 643,217 | 760,355 | |||||||||
| Land and improvements | 2,647,633 | 2,667,188 | |||||||||
| Accumulated depreciation and amortization | (3,591,951) | (3,188,138) | |||||||||
| Net real estate | 13,028,363 | 13,023,483 | |||||||||
| Loans receivable, net of reserves of $2,830 and $8,280 | 218,450 | 374,832 | |||||||||
| Investments in and advances to unconsolidated joint ventures | 782,853 | 706,677 | |||||||||
| Accounts receivable, net of allowance of $2,282 and $2,399 | 55,820 | 53,436 | |||||||||
| Cash and cash equivalents | 117,635 | 72,032 | |||||||||
| Restricted cash | 51,388 | 54,802 | |||||||||
| Intangible assets, net | 314,156 | 418,061 | |||||||||
| Assets held for sale, net | 117,986 | 49,866 | |||||||||
| Right-of-use asset, net | 240,155 | 237,318 | |||||||||
| Other assets, net | 772,044 | 780,722 | |||||||||
| Total assets | $ | 15,698,850 | $ | 15,771,229 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Bank line of credit and commercial paper | $ | 720,000 | $ | 995,606 | |||||||
| Term loans | 496,824 | 495,957 | |||||||||
| Senior unsecured notes | 5,403,378 | 4,659,451 | |||||||||
| Mortgage debt | 256,097 | 346,599 | |||||||||
| Intangible liabilities, net | 127,380 | 156,193 | |||||||||
| Liabilities related to assets held for sale, net | 729 | 4,070 | |||||||||
| Lease liability | 206,743 | 208,515 | |||||||||
| Accounts payable, accrued liabilities, and other liabilities | 657,196 | 772,485 | |||||||||
| Deferred revenue | 905,633 | 844,076 | |||||||||
| Total liabilities | 8,773,980 | 8,482,952 | |||||||||
| Commitments and contingencies (Note 11) | |||||||||||
| Redeemable noncontrolling interests | 48,828 | 105,679 | |||||||||
| Common stock, $1.00 par value: 750,000,000 shares authorized; 547,156,311 and 546,641,973 shares issued and outstanding | 547,156 | 546,642 | |||||||||
| Additional paid-in capital | 10,405,780 | 10,349,614 | |||||||||
| Cumulative dividends in excess of earnings | (4,621,861) | (4,269,689) | |||||||||
| Accumulated other comprehensive income (loss) | 19,371 | 28,134 | |||||||||
| Total stockholders’ equity | 6,350,446 | 6,654,701 | |||||||||
| Joint venture partners | 310,998 | 327,721 | |||||||||
| Non-managing member unitholders | 214,598 | 200,176 | |||||||||
| Total noncontrolling interests | 525,596 | 527,897 | |||||||||
| Total equity | 6,876,042 | 7,182,598 | |||||||||
| Total liabilities and equity | $ | 15,698,850 | $ | 15,771,229 |
See accompanying Notes to the Consolidated Financial Statements.
Healthpeak Properties, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Year Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Revenues: | |||||||||||||||||
| Rental and related revenues | $ | 1,631,805 | $ | 1,541,775 | $ | 1,378,384 | |||||||||||
| Resident fees and services | 527,417 | 494,935 | 471,325 | ||||||||||||||
| Interest income | 21,781 | 23,300 | 37,773 | ||||||||||||||
| Income from direct financing leases | — | 1,168 | 8,702 | ||||||||||||||
| Total revenues | 2,181,003 | 2,061,178 | 1,896,184 | ||||||||||||||
| Costs and expenses: | |||||||||||||||||
| Interest expense | 200,331 | 172,944 | 157,980 | ||||||||||||||
| Depreciation and amortization | 749,901 | 710,569 | 684,286 | ||||||||||||||
| Operating | 902,060 | 862,991 | 773,279 | ||||||||||||||
| General and administrative | 95,132 | 131,033 | 98,303 | ||||||||||||||
| Transaction and merger-related costs | 17,515 | 4,853 | 1,841 | ||||||||||||||
| Impairments and loan loss reserves (recoveries), net | (5,601) | 7,004 | 23,160 | ||||||||||||||
| Total costs and expenses | 1,959,338 | 1,889,394 | 1,738,849 | ||||||||||||||
| Other income (expense): | |||||||||||||||||
| Gain (loss) on sales of real estate, net | 86,463 | 9,078 | 190,590 | ||||||||||||||
| Gain (loss) on debt extinguishments | — | — | (225,824) | ||||||||||||||
| Other income (expense), net | 6,808 | 326,268 | 6,266 | ||||||||||||||
| Total other income (expense), net | 93,271 | 335,346 | (28,968) | ||||||||||||||
| Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures | 314,936 | 507,130 | 128,367 | ||||||||||||||
| Income tax benefit (expense) | 9,617 | 4,425 | 3,261 | ||||||||||||||
| Equity income (loss) from unconsolidated joint ventures | 10,204 | 1,985 | 6,100 | ||||||||||||||
| Income (loss) from continuing operations | 334,757 | 513,540 | 137,728 | ||||||||||||||
| Income (loss) from discontinued operations | — | 2,884 | 388,202 | ||||||||||||||
| Net income (loss) | 334,757 | 516,424 | 525,930 | ||||||||||||||
| Noncontrolling interests’ share in continuing operations | (28,748) | (15,975) | (17,851) | ||||||||||||||
| Noncontrolling interests’ share in discontinued operations | — | — | (2,539) | ||||||||||||||
| Net income (loss) attributable to Healthpeak Properties, Inc. | 306,009 | 500,449 | 505,540 | ||||||||||||||
| Participating securities’ share in earnings | (1,725) | (2,657) | (3,269) | ||||||||||||||
| Net income (loss) applicable to common shares | $ | 304,284 | $ | 497,792 | $ | 502,271 | |||||||||||
| Basic earnings (loss) per common share: | |||||||||||||||||
| Continuing operations | $ | 0.56 | $ | 0.92 | $ | 0.22 | |||||||||||
| Discontinued operations | — | 0.00 | 0.71 | ||||||||||||||
| Net income (loss) applicable to common shares | $ | 0.56 | $ | 0.92 | $ | 0.93 | |||||||||||
| Diluted earnings (loss) per common share: | |||||||||||||||||
| Continuing operations | $ | 0.56 | $ | 0.92 | $ | 0.22 | |||||||||||
| Discontinued operations | — | 0.00 | 0.71 | ||||||||||||||
| Net income (loss) applicable to common shares | $ | 0.56 | $ | 0.92 | $ | 0.93 | |||||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 547,006 | 538,809 | 538,930 | ||||||||||||||
| Diluted | 547,275 | 539,147 | 539,241 |
See accompanying Notes to the Consolidated Financial Statements.
Healthpeak Properties, Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
| Year Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Net income (loss) | $ | 334,757 | $ | 516,424 | $ | 525,930 | |||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Net unrealized gains (losses) on derivatives | (8,900) | 30,145 | 332 | ||||||||||||||
| Change in Supplemental Executive Retirement Plan obligation and other | 137 | 1,136 | 457 | ||||||||||||||
| Reclassification adjustment realized in net income (loss) | — | — | (251) | ||||||||||||||
| Total other comprehensive income (loss) | (8,763) | 31,281 | 538 | ||||||||||||||
| Total comprehensive income (loss) | 325,994 | 547,705 | 526,468 | ||||||||||||||
| Total comprehensive (income) loss attributable to noncontrolling interests’ share in continuing operations | (28,748) | (15,975) | (17,851) | ||||||||||||||
| Total comprehensive (income) loss attributable to noncontrolling interests’ share in discontinued operations | — | — | (2,539) | ||||||||||||||
| Total comprehensive income (loss) attributable to Healthpeak Properties, Inc. | $ | 297,246 | $ | 531,730 | $ | 506,078 |
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, 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 | — | ||||||||||||||||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||||||
| 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) | — | ||||||||||||||||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||||||
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, 2022 | 546,642 | $ | 546,642 | $ | 10,349,614 | $ | (4,269,689) | $ | 28,134 | $ | 6,654,701 | $ | 527,897 | $ | 7,182,598 | $ | 105,679 | ||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | 306,009 | — | 306,009 | 28,111 | 334,120 | 637 | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | (8,763) | (8,763) | — | (8,763) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock, net | 683 | 683 | 755 | — | — | 1,438 | — | 1,438 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion of DownREIT units to common stock | 72 | 72 | 1,200 | — | — | 1,272 | (1,272) | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (241) | (241) | (6,283) | — | — | (6,524) | — | (6,524) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 2,966 | — | — | 2,966 | 15,693 | 18,659 | — | ||||||||||||||||||||||||||||||||||||||||||||
| Common dividends ($1.20 per share) | — | — | — | (658,181) | — | (658,181) | — | (658,181) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | — | — | — | — | — | — | (44,848) | (44,848) | (276) | ||||||||||||||||||||||||||||||||||||||||||||
| Purchase of noncontrolling interests | — | — | — | — | — | — | (158) | (158) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | — | — | 173 | 173 | 316 | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to redemption value of redeemable noncontrolling interests | — | — | 57,528 | — | — | 57,528 | — | 57,528 | (57,528) | ||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2023 | 547,156 | $ | 547,156 | $ | 10,405,780 | $ | (4,621,861) | $ | 19,371 | $ | 6,350,446 | $ | 525,596 | $ | 6,876,042 | $ | 48,828 |
See accompanying Notes to the Consolidated Financial Statements.
Healthpeak Properties, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Year Ended December 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | ||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net income (loss) | $ | 334,757 | $ | 516,424 | $ | 525,930 | ||||||||||||||
| 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 | 749,901 | 710,569 | 684,286 | |||||||||||||||||
| Stock-based compensation amortization expense | 14,480 | 26,456 | 18,202 | |||||||||||||||||
| Amortization of deferred financing costs | 11,916 | 10,881 | 9,216 | |||||||||||||||||
| Straight-line rents | (14,387) | (49,183) | (31,188) | |||||||||||||||||
| Amortization of nonrefundable entrance fees and above (below) market lease intangibles | (108,988) | (102,747) | (94,362) | |||||||||||||||||
| Equity loss (income) from unconsolidated joint ventures | (10,204) | (2,049) | (11,235) | |||||||||||||||||
| Distributions of earnings from unconsolidated joint ventures | 910 | 943 | 4,976 | |||||||||||||||||
| Loss (gain) on sale of real estate under direct financing leases | — | (22,693) | — | |||||||||||||||||
| Deferred income tax expense (benefit) | (14,605) | (6,001) | (5,792) | |||||||||||||||||
| Impairments and loan loss reserves (recoveries), net | (5,601) | 7,004 | 55,896 | |||||||||||||||||
| Loss (gain) on debt extinguishments | — | — | 225,824 | |||||||||||||||||
| Loss (gain) on sales of real estate, net | (86,463) | (10,422) | (605,311) | |||||||||||||||||
| Loss (gain) upon change of control, net | (234) | (311,438) | (1,042) | |||||||||||||||||
| Casualty-related loss (recoveries), net | (3,085) | 7,168 | 1,632 | |||||||||||||||||
| Other non-cash items | 4,900 | 6,489 | (8,178) | |||||||||||||||||
| Changes in: | ||||||||||||||||||||
| Decrease (increase) in accounts receivable and other assets, net | (21,566) | (17,433) | 18,626 | |||||||||||||||||
| Increase (decrease) in accounts payable, accrued liabilities, and deferred revenue | 104,511 | 136,293 | 7,768 | |||||||||||||||||
| Net cash provided by (used in) operating activities | 956,242 | 900,261 | 795,248 | |||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Acquisitions of real estate | (15,847) | (178,133) | (1,483,026) | |||||||||||||||||
| Development, redevelopment, and other major improvements of real estate | (731,206) | (861,636) | (610,555) | |||||||||||||||||
| Leasing costs, tenant improvements, and recurring capital expenditures | (113,596) | (108,510) | (111,480) | |||||||||||||||||
| Proceeds from sales of real estate, net | 141,651 | 47,885 | 2,399,120 | |||||||||||||||||
| Proceeds from the South San Francisco JVs transaction, net | — | 125,985 | — | |||||||||||||||||
| Investments in unconsolidated joint ventures | (88,391) | (21,143) | (25,260) | |||||||||||||||||
| Distributions in excess of earnings from unconsolidated joint ventures | 20,640 | 12,518 | 37,640 | |||||||||||||||||
| Proceeds from insurance recovery | 24,980 | 1,450 | — | |||||||||||||||||
| Proceeds from sales/principal repayments on loans receivable, direct financing leases, and marketable debt securities | 204,865 | 115,988 | 342,420 | |||||||||||||||||
| Investments in loans receivable and other | (19,850) | (10,747) | (17,827) | |||||||||||||||||
| Net cash provided by (used in) investing activities | (576,754) | (876,343) | 531,032 | |||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Borrowings under bank line of credit and commercial paper | 10,344,705 | 15,882,153 | 16,821,450 | |||||||||||||||||
| Repayments under bank line of credit and commercial paper | (10,620,311) | (16,052,522) | (15,785,065) | |||||||||||||||||
| Issuances and borrowings of term loans, senior unsecured notes, and mortgage debt | 743,778 | 500,000 | 1,088,537 | |||||||||||||||||
| Repayments and repurchases of term loans, senior unsecured notes, and mortgage debt | (90,089) | (5,048) | (2,425,936) | |||||||||||||||||
| Payments for debt extinguishment and deferred financing costs | (7,322) | (4,171) | (236,942) | |||||||||||||||||
| Issuance of common stock and exercise of options, net of offering costs | 278 | 308,100 | 5,036 | |||||||||||||||||
| Repurchase of common stock | (6,524) | (67,838) | (12,841) | |||||||||||||||||
| Dividends paid on common stock | (657,021) | (648,047) | (650,082) | |||||||||||||||||
| Distributions to and purchase of noncontrolling interests | (45,282) | (30,549) | (93,314) | |||||||||||||||||
| Contributions from and issuance of noncontrolling interests | 489 | 1,390 | 640 | |||||||||||||||||
| Net cash provided by (used in) financing activities | (337,299) | (116,532) | (1,288,517) | |||||||||||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 42,189 | (92,614) | 37,763 | |||||||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of year | 126,834 | 219,448 | 181,685 | |||||||||||||||||
| Cash, cash equivalents, and restricted cash, end of year | $ | 169,023 | $ | 126,834 | $ | 219,448 | ||||||||||||||
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) lab; (ii) outpatient medical; 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 10, 2023, the Company completed its corporate reorganization (the “Reorganization”) into an umbrella partnership REIT (“UPREIT”). Substantially all of the Company’s business is conducted through Healthpeak OP, LLC (“Healthpeak OP”). The Company is the managing member of Healthpeak OP and does not have material assets or liabilities, other than through its investment in Healthpeak OP. For additional information on the UPREIT reorganization, see the Company’s Current Report on Form 8-K12B filed with the U.S. Securities and Exchange Commission (“SEC”) on February 10, 2023.
The Merger Agreement
On October 29, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Physicians Realty Trust, Physicians Realty L.P. (the “Physicians Partnership”), and certain of the Company’s subsidiaries, pursuant to which, among other things, and through a series of transactions (the “Mergers”), (i) each outstanding common share of Physicians Realty Trust (other than Physicians Realty Trust common shares to be canceled in accordance with the Merger Agreement) will be converted into the right to receive 0.674 (the “Exchange Ratio”) shares of Company common stock, and (ii) each outstanding common unit of the Physicians Partnership will be converted into common units in the successor entity to the Physicians Partnership equal to the Exchange Ratio. Following the transactions contemplated in the Merger Agreement, the successor entities to Physicians Realty Trust and the Physicians Partnership will be subsidiaries of Healthpeak OP.
The Merger Agreement contains customary representations, warranties, and covenants, as well as certain termination rights for the Company and Physicians Realty Trust, in each case, as more fully described in the Merger Agreement.
During the year ended December 31, 2023, the Company incurred approximately $11 million of merger-related costs, which primarily related to advisory, legal, accounting, and other costs. These merger-related costs are included in transaction and merger-related costs on the Consolidated Statements of Operations.
In addition, the Company has engaged service providers, including investment banks and advisors, to help the Company negotiate the terms of the transactions contemplated by the Merger Agreement and to advise the Company on other merger-related matters. In connection with these services, the Company expects to be required to pay success-based fees to the extent that certain conditions, including the closing of the transactions contemplated by the Merger Agreement, are met. As of December 31, 2023, the Company expects to incur approximately $22 million of such success fees. As closing of the transactions contemplated by the Merger Agreement has not occurred, no such amounts have been paid or accrued through December 31, 2023.
In connection with the Mergers, the Company filed a Registration Statement on Form S-4 with the SEC on December 15, 2023 (the “Initial Filing”), as amended on January 9, 2024, and a definitive joint proxy statement/prospectus for the Company and Physicians Realty Trust on January 11, 2024 in connection with their respective special meetings of stockholders and shareholders, as applicable, which will be held on February 21, 2024. Consummation of the Mergers are subject to the satisfaction or waiver of customary closing conditions, including the approval of the Company’s stockholders and the shareholders of Physicians Realty Trust. The parties expect the Mergers to close on March 1, 2024. If the Mergers are not consummated by July 31, 2024 (unless extended under certain circumstances), either the Company or Physicians Realty Trust may terminate the Merger Agreement.
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 lab and outpatient medical buildings 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;
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which party to the arrangement retains legal title to the tenant improvements upon lease expiration;
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whether the tenant improvements are unique to the tenant or general purpose in nature;
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if the tenant improvements are expected to have significant residual value at the end of the lease term;
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the responsible party for construction cost overruns; and
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which party constructs or directs the construction of the improvements.
Certain leases provide for additional rents that are contingent upon a percentage of the building’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 accounts receivable and 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. The Company does not resume recognition of income on a straight-line basis unless it determines that collectibility of future payments related to these leases is probable. For the Company’s portfolio of operating leases that are deemed probable of collection but exhibit a certain level of collectibility risk, the Company may also recognize an incremental allowance as a reduction to revenue.
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.
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, 2023, 2022, and 2021, the Company received government grants under the CARES Act primarily to cover increased expenses and lost revenues during the coronavirus pandemic. 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, 2023, the amount of qualifying expenditures and lost revenues 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, | ||||||||||||||||||||||||||||||||
| 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| Government grant income recorded in other income (expense), net | $ | 184 | $ | 6,765 | $ | 1,412 | ||||||||||||||||||||||||||
| Government grant income recorded in equity income (loss) from unconsolidated joint ventures | 229 | 878 | 1,749 | |||||||||||||||||||||||||||||
| Government grant income recorded in income (loss) from discontinued operations | — | 217 | 3,669 | |||||||||||||||||||||||||||||
| Total government grants received | $ | 413 | $ | 7,860 | $ | 6,830 |
Credit Losses
The Company evaluates the liquidity and creditworthiness of its occupants, operators, and borrowers on a monthly and quarterly basis to determine whether any updates to the future expected losses recognized upon inception are necessary. The Company’s evaluation considers payment history and current credit status, industry conditions, current economic conditions, forecasted economic conditions, individual and portfolio property performance, credit enhancements, liquidity, and other factors. Future economic conditions are based primarily on near-term economic forecasts from the Federal Reserve and reasonable assumptions for long-term economic trends. 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 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 in its assessment of internal ratings 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 over the lease term.
The Company computes depreciation on properties using the straight-line method over the assets’ estimated useful lives. These useful lives are reassessed following changes in the remaining period that the asset is expected to be held and used, and depreciation is discontinued when a property meets the criteria to be classified as held for sale. Buildings and improvements are depreciated over useful lives ranging up to approximately 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 external market factors and the expected use and eventual disposition of the asset, and based on the specific facts and circumstances, may be 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
In 2020, the Company concluded that the dispositions of its senior housing triple-net and SHOP portfolios represented a strategic shift that had a major effect on its operations and financial results. Therefore, the results of senior housing triple-net and SHOP assets 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 4 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.
Stock-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 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 and local 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, 2023, 2022, and 2021, total advertising expense was $8 million, $8 million, and $11 million, respectively (zero, $0.1 million, and $3 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) lab, (ii) outpatient medical, 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.
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.
Healthpeak OP
Immediately following the Reorganization, Healthpeak Properties, Inc. was the initial sole member and 100% owner of Healthpeak OP. Subsequent to the Reorganization, certain employees of the Company (“OP Unitholders”) were issued noncontrolling, non-managing member units in Healthpeak OP (“OP Units”). When certain conditions are met, the OP Unitholders have the right to require redemption of part or all of their OP Units for cash or shares of the Company’s common stock, at the Company’s option as managing member of Healthpeak OP. The per unit redemption amount is equal to either one share of the Company’s common stock or cash equal to the fair value of a share of common stock at the time of redemption. The Company classifies the OP Units in permanent equity because it may elect, in its sole discretion, to issue shares of its common stock to OP Unitholders who choose to redeem their OP Units rather than using cash.
DownREITs
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.
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
Adopted
Government Assistance. In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance (“ASU 2021-10”), which increased 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. From March 2020 to December 2022, the FASB issued a series of ASUs that provide optional expedients that may be elected through December 31, 2024 to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. The amendments in these ASUs were effective immediately upon issuance. During the first quarter of 2023, the Company amended certain of its variable rate mortgage debt and the related interest rate swap agreements to change the interest rate benchmark from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”) and accordingly, the Company elected to apply certain practical expedients provided by these ASUs related to cash flow hedges. These expedients and the effects of reference rate reform have not had a material impact on the Company’s consolidated financial position, results of operations, cash flows, or disclosures.
Not Yet Adopted
Segment Reporting. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), to improve reportable segment disclosure requirements so that investors can better understand an entity’s overall performance and assess potential future cash flows. The amendments in ASU 2023-07 include, but are not limited to: (i) disclosure of, on an annual basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss; (ii) disclosure of, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition (the other segment items category is the difference between segment revenue less the significant expenses disclosed and each reported measure of segment profit or loss); (iii) disclosure of, on an interim basis, all currently required annual disclosures about a reportable segment’s profit (loss) and assets; (iv) clarification that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, an entity may report one or more of those additional measures of segment profit; and (v) disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is evaluating the impact ASU 2023-07 will have on its disclosures.
Income Taxes. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), to provide disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. One of the amendments in ASU 2023-09 includes disclosure of, on an annual basis, a tabular rate reconciliation (using both percentages and reporting currency amounts) of (i) the reported income tax expense (or benefit) from continuing operations, to (ii) the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal income tax rate of the jurisdiction of domicile using specific categories, including separate disclosure for any reconciling items within certain categories that are equal to or greater than a specified quantitative threshold of 5%. ASU 2023-09 also requires disclosure of, on an annual basis, the year to date amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign jurisdictions, including additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of total income taxes paid (net of refunds received). The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. The Company is evaluating the impact ASU 2023-09 will have on its disclosures.
NOTE 3. Real Estate
2023 Real Estate Investment Acquisitions
60 Loomis Land Parcel
In January 2023, the Company acquired a lab land parcel in Cambridge, Massachusetts for $9 million.
Wylie Outpatient Medical Building
In April 2023, the Company acquired the remaining 80% interest in one of the outpatient medical buildings in the Ventures IV unconsolidated joint venture for $4 million (see Note 8). Concurrent with the acquisition, the Company began consolidating the building and recognized a gain upon change of control of $0.2 million, which is recorded in other income (expense), net.
2022 Real Estate Investment Acquisitions
67 Smith Place
In January 2022, the Company closed a lab acquisition in Cambridge, Massachusetts for $72 million.
Vista Sorrento Phase II
In January 2022, the Company closed a lab acquisition in San Diego, California for $24 million.
Webster Outpatient Medical Portfolio
In March 2022, the Company acquired a portfolio of two outpatient medical buildings in Houston, Texas for $43 million.
Northwest Medical Plaza
In May 2022, the Company acquired one outpatient medical building in Bentonville, Arkansas for $26 million.
Concord Avenue Land Parcels
In December 2022, the Company closed a lab acquisition in Cambridge, Massachusetts for $18 million.
2021 Real Estate Investment Acquisitions
In 2021, the Company closed the following lab 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 outpatient medical acquisitions: (i) one outpatient medical building in Nashville, Tennessee for $13 million, (ii) one outpatient medical building in Denver, Colorado for $38 million, (iii) a portfolio of 14 outpatient medical buildings for $371 million (the “Outpatient Medical Building Portfolio”), (iv) one outpatient medical building in Fort Lauderdale, Florida for $16 million, (v) one outpatient medical building in Wichita, Kansas for $50 million, (vi) three outpatient medical buildings in Morristown, New Jersey for $155 million, (vii) two outpatient medical buildings in Dallas, Texas for $60 million, (viii) one outpatient medical building in Seattle, Washington for $43 million, (ix) one outpatient medical building in New Orleans, Louisiana for $34 million, and (x) one outpatient medical building in Cambridge, Massachusetts for $55 million. In conjunction with the acquisition of the Outpatient Medical Building Portfolio, the Company originated $142 million of secured mortgage debt (see Note 10).
Development Activities
Construction, Tenant, and Other Capital Improvements
The following table summarizes the Company’s expenditures for construction, tenant improvements, and other capital improvements for its consolidated property investments, excluding expenditures related to properties classified as discontinued operations (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| Segment | 2023 | 2022 | 2021 | |||||||||||||||||
| Lab | $ | 428,961 | $ | 658,542 | $ | 472,301 | ||||||||||||||
| Outpatient medical | 236,135 | 237,761 | 230,227 | |||||||||||||||||
| CCRC | 109,465 | 65,691 | 57,192 | |||||||||||||||||
| $ | 774,561 | $ | 961,994 | $ | 759,720 |
NOTE 4. Dispositions of Real Estate and Discontinued Operations
2023 Dispositions of Real Estate
During the three months ended March 31, 2023, the Company sold two lab buildings in Durham, North Carolina, which were classified as held for sale as of December 31, 2022, for $113 million, resulting in total gain on sales of $60 million. Also during the three months ended March 31, 2023, the Company sold two outpatient medical buildings for $32 million, resulting in total gain on sales of $21 million.
2022 Dispositions of Real Estate
During the three months ended March 31, 2022, the Company sold one lab building 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 outpatient medical buildings and one outpatient medical land parcel for $27 million, resulting in total gain on sales of $10 million.
During the three months ended September 30, 2022, the Company sold two outpatient medical buildings for $9 million, resulting in total gain on sales of $1 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 and (ii) a commitment to finance up to $92 million of additional debt for capital expenditures (see Note 7). 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 7).
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 outpatient medical buildings and a portion of 1 outpatient medical 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.
Held for Sale and Discontinued Operations
As of December 31, 2023, two lab buildings and one outpatient medical building were classified as held for sale, with a carrying value of $118 million, primarily comprised of net real estate assets. As of December 31, 2023, liabilities related to the assets held for sale were $1 million. In January 2024, we sold a 65% interest in these two lab buildings (see Note 8). As of December 31, 2022, two lab buildings were classified as held for sale, with an aggregate carrying value of $50 million, primarily comprised of net real estate assets of $44 million. As of December 31, 2022, liabilities related to these assets held for sale were $4 million. These two lab buildings were sold during the three months ended March 31, 2023, as discussed above.
In 2020, the Company concluded that the dispositions of its senior housing triple-net and SHOP portfolios represented a strategic shift that had a major effect on its operations and financial results. Therefore, the results of senior housing triple-net and SHOP assets 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.
At each of December 31, 2023 and 2022, the total assets and total liabilities classified as discontinued operations were zero.
The results of discontinued operations during the years ended December 31, 2023, 2022, and 2021 are presented below (in thousands) and are included in the consolidated results of operations for the years ended December 31, 2023, 2022, and 2021:
| Year Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Revenues: | |||||||||||||||||
| Rental and related revenues | $ | — | $ | — | $ | 7,535 | |||||||||||
| Resident fees and services | — | 7,489 | 114,936 | ||||||||||||||
| Total revenues | — | 7,489 | 122,471 | ||||||||||||||
| Costs and expenses: | |||||||||||||||||
| Interest expense | — | — | 3,900 | ||||||||||||||
| Operating | — | 6,452 | 122,571 | ||||||||||||||
| Transaction and merger-related costs | — | — | 76 | ||||||||||||||
| Impairments and loan loss reserves (recoveries), net | — | — | 32,736 | ||||||||||||||
| Total costs and expenses | — | 6,452 | 159,283 | ||||||||||||||
| Other income (expense): | |||||||||||||||||
| Gain (loss) on sales of real estate, net | — | 1,344 | 414,721 | ||||||||||||||
| Other income (expense), net | — | 169 | 4,189 | ||||||||||||||
| Total other income (expense), net | — | 1,513 | 418,910 | ||||||||||||||
| Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures | — | 2,550 | 382,098 | ||||||||||||||
| Income tax benefit (expense) | — | 270 | 969 | ||||||||||||||
| Equity income (loss) from unconsolidated joint ventures | — | 64 | 5,135 | ||||||||||||||
| Income (loss) from discontinued operations | $ | — | $ | 2,884 | $ | 388,202 |
NOTE 5. Impairments of Real Estate
2023 and 2022
During the years ended December 31, 2023 and 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 outpatient medical buildings that met the held for sale criteria during the year and (ii) one outpatient medical building held for use; the aggregate fair value of these four outpatient medical buildings was $14 million as of the related impairment assessment dates. For the three outpatient medical buildings 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 outpatient medical building held for use, the Company recognized a $17 million impairment charge in the fourth quarter of 2021 due to the demolition of the outpatient medical building 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.
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, 2023, 2022, and 2021, 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, 2023, 2022, and 2021, the Company recognized $(3) million, $6 million, and $5 million, respectively, of net casualty-related charges (recoveries). During the year ended December 31, 2023, such recoveries were primarily attributable to proceeds received for water damage at an outpatient medical building. 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. Also during the years ended December 31, 2023, 2022, and 2021, the Company collected business interruption proceeds of $4 million, $3 million, and zero, respectively, which are recognized in rental and related revenues and resident fees and services on the Consolidated Statements of Operations.
Other Losses
During the year ended December 31, 2022, the Company recognized $14 million of expenses within other income (expense), net on the Consolidated Statements of Operations for tenant relocation and other costs associated with the demolition of an outpatient medical building.
See Note 7 for information related to the Company’s reserve for loan losses.
NOTE 6. Leases
Lease Income
The following table summarizes the Company’s lease income, excluding discontinued operations (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Fixed income from operating leases | $ | 1,236,502 | $ | 1,182,463 | $ | 1,087,683 | |||||||||||
| Variable income from operating leases | 395,303 | 359,312 | 290,701 | ||||||||||||||
| Interest income from direct financing leases | — | 1,168 | 8,702 |
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. Therefore, at December 31, 2023 and 2022, the Company had no leases classified as a DFL.
Operating Leases
Future Minimum Rents
The following table summarizes future minimum lease payments to be received from tenants under non-cancelable operating leases as of December 31, 2023 (in thousands):
| Year | Amount | |||||||
| 2024 | $ | 1,135,628 | ||||||
| 2025 | 1,063,147 | |||||||
| 2026 | 975,246 | |||||||
| 2027 | 888,223 | |||||||
| 2028 | 788,742 | |||||||
| Thereafter | 2,818,655 | |||||||
| $ | 7,669,641 |
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 | ||||||||||||
| 2024 | $ | 14,199 | 12 | |||||||||||
| 2025 | 14,244 | 16 | ||||||||||||
| 2026 | 16,422 | 8 | ||||||||||||
| 2027 | 8,116 | 5 | ||||||||||||
| 2028 | 1,252 | 1 | ||||||||||||
| Thereafter | 16,212 | 5 | ||||||||||||
| $ | 70,445 | 47 |
_______________________________________
(1)Represents the most recent month’s base rent including additional rent floors annualized for 12 months. Base rent does not include tenant recoveries, additional rents in excess of floors, and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).
Lease Costs
The following tables provide information regarding the Company’s leases to which it is the lessee, such as corporate offices and ground leases, excluding lease costs related to discontinued operations (dollars in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| Lease Expense Information: | 2023 | 2022 | 2021 | |||||||||||||||||
| Total lease expense | $ | 17,010 | $ | 16,689 | $ | 14,442 |
| Weighted Average Lease Term and Discount Rate: | December 31, 2023 | December 31, 2022 | ||||||||||||
| Weighted average remaining lease term (years): | ||||||||||||||
| Operating leases(1) | 51 | 51 | ||||||||||||
| Weighted average discount rate: | ||||||||||||||
| Operating leases | 4.23 | % | 4.20 | % |
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(1)As of both December 31, 2023 and 2022, the weighted average remaining lease term including the Company’s options to extend its operating leases is 67 years.
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, 2023 (in thousands):
| Year | Amount | |||||||
| 2024 | $ | 16,950 | ||||||
| 2025 | 12,399 | |||||||
| 2026 | 12,326 | |||||||
| 2027 | 12,321 | |||||||
| 2028 | 12,351 | |||||||
| Thereafter | 475,584 | |||||||
| Undiscounted minimum lease payments included in the lease liability | 541,931 | |||||||
| Less: imputed interest | (335,188) | |||||||
| Present value of lease liability | $ | 206,743 |
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 both December 31, 2023 and 2022 is $10 million of accumulated depreciation related to corporate assets. Included within general and administrative expenses for the years ended December 31, 2023, 2022, and 2021 is $3 million, $3 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 which are included in general and administrative expenses on the Consolidated Statements of Operations.
Tenant Updates
During the first quarter of 2023, the Company wrote off $9 million of straight-line rent receivable associated with four in-place operating leases with Sorrento Therapeutics, Inc. (“Sorrento”), which commenced voluntary reorganization proceedings (the “Filing”) under Chapter 11 of the U.S. Bankruptcy Code during the period. This write-off was recognized as a reduction in rental and related revenues on the Consolidated Statements of Operations. Subsequent to the write-off, revenue related to this tenant is recognized on a cash basis. Sorrento also had a single development lease with the Company, but had not taken occupancy at the time of the Filing. Subsequent to the Filing, the U.S. Bankruptcy Court approved Sorrento’s rejection of the development lease and three of the four operating leases, resulting in termination of these four leases during the year ended December 31, 2023. The Company filed proofs of claim for related damages during the year, $4 million of which was received by the Company by drawing on Sorrento’s related letters of credit and security deposits. These cash proceeds were recognized as rental revenue and lease termination fee income, which is included in rental and related revenues on the Consolidated Statements of Operations. Given the nature of bankruptcy proceedings, the probability, timing, or amount of the additional proceeds, if any, that the Company may ultimately receive in connection with the Company’s claims related to the rejected leases is uncertain. Accordingly, the Company has not recorded any estimated recoveries associated with these claims as of December 31, 2023.
On October 26, 2023, the Company amended its lease with Graphite Bio, Inc. (“Graphite Bio”) at one of its lab buildings in South San Francisco, California. Under the terms of the amended lease agreement, Graphite Bio’s lease expiration date was accelerated from April 2033 to December 2024 in exchange for an upfront cash payment of $37 million, comprised of a $21 million termination fee and $16 million prepayment of Graphite Bio's contractual rent through the amended term. The $37 million will be recognized as rental and related revenues on the Consolidated Statements of Operations on a straight-line basis through the amended term of the lease.
NOTE 7. Loans Receivable
The following table summarizes the Company’s loans receivable (in thousands):
| December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Secured loans(1) | $ | 178,678 | $ | 350,837 | |||||||
| CCRC resident loans | 42,733 | 33,083 | |||||||||
| Unamortized discounts and fees | (131) | (808) | |||||||||
| Reserve for loan losses | (2,830) | (8,280) | |||||||||
| Loans receivable, net | $ | 218,450 | $ | 374,832 |
_______________________________________
(1)At December 31, 2023 and 2022, the Company had $29 million and $40 million, respectively, remaining of commitments to fund additional loans for senior housing redevelopment and capital expenditure projects.
During the years ended December 31, 2023, 2022, and 2021, the Company recognized $22 million, $22 million, and $36 million, respectively, of interest income related to loans secured by real estate.
Sunrise Senior Housing Portfolio Seller Financing
In conjunction with the sale of 32 SHOP facilities for $664 million in January 2021 (see Note 4), 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). The initial and additional financing is secured by the buyer’s equity ownership in each property. In June 2023, the interest rate on this secured loan was converted from a variable rate based on LIBOR to a variable rate based on Term SOFR (plus a 10 basis point adjustment related to SOFR transition).
In June 2021, February 2022, July 2022, and December 2022, the Company received principal repayments of $246 million, $8 million, $27 million, and $10 million, respectively, in conjunction with the disposition of the underlying collateral. In connection with these principal repayments, the additional financing available was reduced to $40 million, of which $11 million had been funded as of December 31, 2023. At December 31, 2023 and 2022, this secured loan had an outstanding principal balance of $131 million and $120 million, respectively.
In February 2024, the loan reached its maturity. The Company provided a short-term extension to the borrower, and the Company and the borrower are currently negotiating long-term refinance and extension terms.
Other Seller Financing
In conjunction with the sale of 16 additional SHOP facilities for $230 million in January 2021 (see Note 4), 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. Upon maturity in January 2023, the borrower did not make the required principal repayment. In February 2023, the borrower made a partial principal repayment of $102 million and the remaining balance owed was refinanced with the Company. In connection with the refinance, the maturity date of the loan was extended to January 2024 and the interest rate on the loan was increased to a variable rate based on Term SOFR (plus an 11 basis point adjustment related to SOFR transition) plus 6.0% for the first six months of the extended term, increasing to 7.0% for the last six months of the extended term. The Company also received a $1 million extension fee in connection with the refinance, which is recognized in interest income over the remaining term of the loan. At December 31, 2023 and 2022, this secured loan had an outstanding principal balance of $48 million and $150 million, respectively.
In January 2024, the loan was refinanced with the Company. In connection with the refinance, the maturity date of the loan was extended to January 2025. The interest rate on the loan will remain as Term SOFR (plus an 11 basis point adjustment related to SOFR transition) plus 7.0% but is now subject to a fixed floor of 12%. The Company also received a $1 million extension fee in connection with the refinance, which is recognized in interest income over the remaining term of the loan.
2023 Other Loans Receivable Transactions
In February 2023, the Company received full repayment of the outstanding balance of one $35 million secured loan.
In April 2023, the Company received full repayment of the outstanding balance of one $14 million secured loan.
In May 2023, the Company received full repayment of two outstanding secured loans with an aggregate balance of $12 million.
Also in May 2023, the interest rate on one secured loan with an outstanding balance of $21 million was converted from a variable rate based on LIBOR to a variable rate based on Term SOFR (plus a 10 basis point adjustment related to SOFR transition). In October 2023, the Company received full repayment of the outstanding balance of this $21 million secured loan.
2022 Other Loans Receivable Transactions
In May 2022, the Company received full repayment of the outstanding balance of one $2 million secured loan.
In November 2022, the Company received full repayment of the outstanding balance of one $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 Term SOFR (plus an 11 basis point adjustment related to SOFR transition) with a floor of 8.5% for the first six months of the extended term, increasing to a floor of 10.5% for the last six months of the extended term. All four of these secured loans were repaid during 2023 as discussed above.
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 4), 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.
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 resident’s previous home. At December 31, 2023 and 2022, the Company held $43 million and $33 million, respectively, of such notes receivable.
Loans Receivable Internal Ratings
Refer to Note 2 for a discussion of the Company’s quarterly review process over its loans receivable and the related internal ratings process. 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, 2023 (in thousands):
| Investment Type | Year of Origination | Total | ||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2022 | 2021**(1)** | 2020 | 2019 | Prior | |||||||||||||||||||||||||||||||||||||||
| Secured loans | ||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||
| Performing loans | $ | — | $ | — | $ | 175,717 | $ | — | $ | — | $ | — | $ | 175,717 | ||||||||||||||||||||||||||||||
| Watch list loans | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Workout loans | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Total secured loans | $ | — | $ | — | $ | 175,717 | $ | — | $ | — | $ | — | $ | 175,717 | ||||||||||||||||||||||||||||||
| Current period gross write-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
| Current period recoveries | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Current period net write-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
| CCRC resident loans | ||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||
| Performing loans | $ | 42,132 | $ | 601 | $ | — | $ | — | $ | — | $ | — | $ | 42,733 | ||||||||||||||||||||||||||||||
| Watch list loans | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Workout loans | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Total CCRC resident loans | $ | 42,132 | $ | 601 | $ | — | $ | — | $ | — | $ | — | $ | 42,733 | ||||||||||||||||||||||||||||||
| Current period gross write-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
| Current period recoveries | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Current period net write-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
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(1)Additional financing funded on the Sunrise Senior Housing Portfolio Seller Financing (as discussed above) is included in the year of origination of the initial financing.
Reserve for Loan Losses
Refer to Note 2 for a discussion of the Company’s assessment of current expected credit losses for loans receivable and unfunded loan commitments. The following table summarizes the Company’s reserve for loan losses (in thousands):
| December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
| Secured Loans | Other**(1)** | Total | Secured Loans | Other**(1)** | Total | ||||||||||||||||||||||||||||||
| Reserve for loan losses, beginning of period | $ | 8,280 | $ | — | $ | 8,280 | $ | 1,804 | $ | 9 | $ | 1,813 | |||||||||||||||||||||||
| Provision for expected loan losses | 2,088 | — | 2,088 | 6,527 | 7 | 6,534 | |||||||||||||||||||||||||||||
| Expected loan losses (recoveries) related to loans sold or repaid | (7,538) | — | (7,538) | (51) | (16) | (67) | |||||||||||||||||||||||||||||
| Reserve for loan losses, end of period | $ | 2,830 | $ | — | $ | 2,830 | $ | 8,280 | $ | — | $ | 8,280 |
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(1)Includes CCRC resident loans and other loan activity.
Additionally, at December 31, 2023 and 2022, a liability of $0.7 million and $0.8 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, 2023 is primarily due to: (i) principal repayments on seller financing, (ii) increased interest rates on variable rate loans, and (iii) macroeconomic conditions.
NOTE 8. Investments in and Advances to Unconsolidated Joint Ventures
The Company owns interests in the following entities that are accounted for under the equity method (dollars in thousands):
| Carrying Amount | ||||||||||||||||||||||||||||||||
| December 31, | ||||||||||||||||||||||||||||||||
| Entity**(1)** | Segment | Property Count**(2)** | Ownership %****(2) | 2023 | 2022 | |||||||||||||||||||||||||||
| South San Francisco JVs(3) | Lab | 7 | 70 | $ | 393,374 | $ | 309,969 | |||||||||||||||||||||||||
| SWF SH JV | Other | 19 | 54 | 332,693 | 345,978 | |||||||||||||||||||||||||||
| Lab JV | Lab | 1 | 49 | 31,761 | 26,601 | |||||||||||||||||||||||||||
| Needham Land Parcel JV(4) | Lab | — | 38 | 17,084 | 15,391 | |||||||||||||||||||||||||||
| Outpatient Medical JVs(5) | Outpatient medical | 2 | 20 - 67 | 7,941 | 8,738 | |||||||||||||||||||||||||||
| $ | 782,853 | $ | 706,677 |
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(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, 2023.
(3)Includes seven unconsolidated lab 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 JVs” below for further information.
(4)Land held for development is excluded from the property count as of December 31, 2023.
(5)Includes two unconsolidated outpatient medical joint ventures in which the Company holds an ownership percentage as follows: (i) Ventures IV (20%) and (ii) Suburban Properties, LLC (67%). As of December 31, 2022, these joint ventures held a total of three properties. In April 2023, the Company acquired the remaining 80% interest in one of the two properties in the Ventures IV unconsolidated joint venture for $4 million (see Note 3). These joint ventures have been aggregated herein due to similarity of the investments and operations.
At December 31, 2023 and 2022, the aggregate unamortized basis difference of the Company’s investments in unconsolidated joint ventures of $49 million and $41 million, respectively, is primarily attributable to the difference between the amount for which the Company purchased its interest in the Lab JV and the historical carrying value of the net assets of the Lab JV and capitalized interest related to the redevelopment activities at the South San Francisco JVs. The differences are amortized over the remaining useful lives of the related assets and are included in equity income (loss) from unconsolidated joint ventures.
South San Francisco JVs
On August 1, 2022, the Company sold a 30% interest in seven lab buildings 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 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.
Callan Ridge JV
In December 2023, the Company entered into definitive agreements with a third party to sell a 65% interest in two lab buildings in San Diego, California. The Company received an $8 million nonrefundable deposit upon completion of due diligence in December 2023. As of December 31, 2023, these two lab buildings had a carrying value of $110 million and were classified as held for sale (see Note 4). In January 2024, the transaction closed and the Company received net proceeds of $128 million in connection with the sale of the 65% interest.
NOTE 9. Intangibles
Intangible assets primarily consist of lease-up intangibles and above market lease intangibles. The following table summarizes the Company’s intangible lease assets (dollars in thousands):
| December 31, | ||||||||||||||
| Intangible lease assets | 2023 | 2022**(1)** | ||||||||||||
| Gross intangible lease assets | $ | 739,228 | $ | 770,285 | ||||||||||
| Accumulated depreciation and amortization | (425,072) | (352,224) | ||||||||||||
| Intangible assets, net | $ | 314,156 | $ | 418,061 | ||||||||||
| Weighted average remaining amortization period in years | 5 | 5 |
_______________________________________
(1)Excludes intangible assets reported in assets held for sale of $2 million.
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 | 2023 | 2022 | ||||||||||||
| Gross intangible lease liabilities | $ | 228,105 | $ | 237,464 | ||||||||||
| Accumulated depreciation and amortization | (100,725) | (81,271) | ||||||||||||
| Intangible liabilities, net | $ | 127,380 | $ | 156,193 | ||||||||||
| Weighted average remaining amortization period in years | 7 | 7 |
The following table sets forth amortization related to intangible assets, net and intangible liabilities, net (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | ||||||||||||||||||
| Depreciation and amortization expense related to amortization of lease-up intangibles(1) | $ | 102,249 | $ | 104,885 | $ | 106,106 | ||||||||||||||
| Rental and related revenues related to amortization of net below market lease liabilities(1) | 27,012 | 24,640 | 20,597 | |||||||||||||||||
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(1)Excludes amortization related to assets classified as discontinued operations.
During the year ended December 31, 2023, in conjunction with the Company’s acquisition of real estate, the Company acquired $0.5 million of intangible assets with a weighted average amortization period at acquisition of 5 years.
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.
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 | ||||||||||
| 2024 | $ | 22,577 | $ | 95,208 | |||||||
| 2025 | 21,560 | 83,629 | |||||||||
| 2026 | 19,071 | 51,580 | |||||||||
| 2027 | 15,064 | 25,981 | |||||||||
| 2028 | 11,945 | 16,216 | |||||||||
| Thereafter | 29,909 | 34,288 | |||||||||
| $ | 120,126 | $ | 306,902 |
Goodwill
At each of December 31, 2023 and 2022, the Company’s goodwill balance was $18 million and is recognized in other assets, net on the Consolidated Balance Sheets. See Note 15 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 5).
NOTE 10. Debt
Subsequent to the Reorganization, Healthpeak OP, the Company’s consolidated operating subsidiary, is the borrower under, and the Company is the guarantor of, all of the unsecured debt discussed below, which includes the Revolving Facility, Term Loan Facilities, Commercial Paper Program (each as defined below), and senior unsecured notes. The Company’s guarantee of the senior unsecured notes is full and unconditional and applicable to existing and future senior unsecured notes.
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. 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 applicable interest rate benchmark plus a margin that depends on the credit ratings of the Company’s senior unsecured long-term debt. On February 10, 2023, the Company executed an amendment to the Revolving Facility to convert the interest rate benchmark from LIBOR to SOFR. 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, 2023, and inclusive of achievement of a sustainability-linked metric, the margin on the Revolving Facility was 0.85% and the facility fee was 0.15%. 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. At each of December 31, 2023 and 2022, the Company had no balance outstanding under the Revolving Facility.
On August 22, 2022, the Company executed a term loan agreement (the “Term Loan Agreement”) that provided for two senior unsecured delayed draw term loans in an aggregate principal amount of up to $500 million (the “Term Loan Facilities”). The Term Loan Facilities were available to be drawn from time to time during a 180-day period after closing, subject to customary borrowing conditions, and the Company drew the entirety of the $500 million under the Term Loan Facilities in October 2022. $250 million of the 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 Term Loan Facilities has a stated maturity of 5 years with no option to extend. At each of December 31, 2023 and 2022, the Company had $500 million outstanding under the Term Loan Facilities.
Loans outstanding under the Term Loan Facilities accrue interest at Term SOFR plus a margin that depends on the credit ratings of the Company’s senior unsecured long-term debt. The Term Loan Agreement also includes a sustainability-linked pricing component whereby the applicable margin under the 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, 2023, and inclusive of achievement of a sustainability-linked metric, the margin on the Term Loan Facilities was 0.94%. The 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.
In August 2022, the Company entered into two forward-starting interest rate swap instruments that are designated as cash flow hedges (see Note 21). The 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, 2023, the Term Loan Facilities had a blended fixed effective interest rate of 3.76%, inclusive of the impact of these interest rate swap instruments and amortization of the related debt issuance costs.
The Revolving Facility and Term Loan Facilities are subject to 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 applicable 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, 2023.
The Company has secured commitments for a $750 million five-year unsecured term loan (the “2024 Term Loan”), to be incurred as an incremental facility under the Term Loan Agreement. In January 2024, the Company entered into forward-starting interest rate swap instruments that are designated as cash flow hedges (see Note 21) that will effectively establish a fixed interest rate for the 2024 Term Loan at a blended contractual rate of 4.5%.
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, short-term unsecured notes with varying maturities. Amounts available under the Commercial Paper Program may be borrowed, repaid, and re-borrowed from time to time. At each of December 31, 2023 and 2022, the maximum aggregate face or principal amount that could be outstanding at any one time was $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 short-term unsecured notes issued under the Commercial Paper Program. At December 31, 2023, the Company had $720 million of notes outstanding under the Commercial Paper Program, with original maturities of approximately 37 days and a weighted average interest rate of 5.70%. At December 31, 2022, the Company had $996 million of notes outstanding under the Commercial Paper Program, with original maturities of approximately two months and a weighted average interest rate of 4.90%.
Senior Unsecured Notes
At December 31, 2023 and 2022, the Company had senior unsecured notes outstanding with an aggregate principal balance of $5.5 billion and $4.7 billion, respectively. 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, 2023.
The following table summarizes the Company’s senior unsecured notes issuances for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands):
| Issue Date | Amount | Coupon Rate | Maturity Year | |||||||||||||||||
| Year ended December 31, 2023: | ||||||||||||||||||||
| January 17, 2023 | $ | 400,000 | 5.25 | % | 2032 | |||||||||||||||
| May 10, 2023(1) | 350,000 | 5.25 | % | 2032 | ||||||||||||||||
| Year ended December 31, 2021: | ||||||||||||||||||||
| November 24, 2021(2) | 500,000 | 2.13 | % | 2028 | ||||||||||||||||
| July 12, 2021(2) | 450,000 | 1.35 | % | 2027 | ||||||||||||||||
_______________________________________
(1)In May 2023, the Company issued $350 million of 5.25% senior unsecured notes due 2032, which constituted an additional issuance of, and are treated as a single series with, the $400 million of senior unsecured notes due 2032 issued in January 2023.
(2)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.
During the years ended December 31, 2023 and 2022, there were no repurchases or redemptions of senior unsecured notes.
The following table summarizes the Company’s senior unsecured notes repurchases and redemptions for the year ended December 31, 2021 (dollars in thousands):
| Payoff Date**(1)** | Amount | Coupon Rate | Maturity Year | |||||||||||||||||
| 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 | ||||||||||||||||
_______________________________________
(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.
Mortgage Debt
At December 31, 2023 and 2022, the Company had $255 million and $345 million, respectively, in aggregate principal of mortgage debt outstanding. At December 31, 2023, this mortgage debt was secured by 15 outpatient medical buildings and 2 CCRCs, with an aggregate carrying value of $587 million. At December 31, 2022, this mortgage debt was secured by 15 outpatient medical buildings and 3 CCRCs, with an aggregate carrying value of $793 million.
Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets, and is non-recourse. Mortgage debt typically requires maintenance of the assets in good condition, includes conditions to obtain lender consent to enter into or terminate material leases, requires insurance on the assets, requires payment of real estate taxes, restricts transfer of the encumbered assets and repayment of the loan, and prohibits additional liens. 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, 2023, 2022, and 2021, the Company made aggregate principal repayments of mortgage debt of $90 million, $5 million, and $9 million, respectively (excluding mortgage debt on assets held for sale and discontinued operations). Included in the $90 million of aggregate principal repayments of mortgage debt for the year ended December 31, 2023 was an $85 million full principal repayment of mortgage debt secured by one CCRC that matured in December 2023.
The Company has $142 million of mortgage debt secured by a portfolio of 13 outpatient medical buildings that matures in May 2026 (see Note 3). 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. In February 2023, the agreements associated with this variable rate mortgage debt were amended to change the interest rate benchmarks from LIBOR to SOFR, effective March 2023. Concurrently, the Company modified the related interest rate swap instruments to reflect the change in the interest rate benchmarks from LIBOR to SOFR (see Note 21). 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, 2023 (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 | ||||||||||||||||||||||||||||||||||||||||||
| 2024 | $ | — | $ | — | $ | — | $ | — | — | % | $ | 7,024 | 6.90 | % | $ | 7,024 | ||||||||||||||||||||||||||||||||||
| 2025 | — | — | — | 800,000 | 3.92 | % | 3,209 | 3.82 | % | 803,209 | ||||||||||||||||||||||||||||||||||||||||
| 2026 | — | 720,000 | — | 650,000 | 3.40 | % | 244,523 | 4.44 | % | 1,614,523 | ||||||||||||||||||||||||||||||||||||||||
| 2027 | — | — | 500,000 | 450,000 | 1.54 | % | 366 | 5.91 | % | 950,366 | ||||||||||||||||||||||||||||||||||||||||
| 2028 | — | — | — | 500,000 | 2.35 | % | — | — | % | 500,000 | ||||||||||||||||||||||||||||||||||||||||
| Thereafter | — | — | — | 3,050,000 | 4.18 | % | — | — | % | 3,050,000 | ||||||||||||||||||||||||||||||||||||||||
| — | 720,000 | 500,000 | 5,450,000 | 255,122 | 6,925,122 | |||||||||||||||||||||||||||||||||||||||||||||
| Premiums, (discounts), and debt issuance costs, net | — | — | (3,176) | (46,622) | 975 | (48,823) | ||||||||||||||||||||||||||||||||||||||||||||
| $ | — | $ | 720,000 | $ | 496,824 | $ | 5,403,378 | $ | 256,097 | $ | 6,876,299 |
_______________________________________
(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 3.66% and a weighted average maturity of 6 years.
(3)Effective interest rates on the mortgage debt range from 3.44% to 9.26% with a weighted average effective interest rate of 4.50% 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 11. 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.
Subsequent to December 31, 2023, in connection with the Mergers, three lawsuits have been filed by purported stockholders of the Company against the Company, members of the Company’s Board of Directors, and, with respect to one of such lawsuits, Physicians Realty Trust, challenging the disclosures made in the Initial Filing. No loss contingency has been recorded for these matters as of December 31, 2023. The Company believes that the lawsuits and demands are without merit, but cannot predict the outcome of these proceedings or reasonably estimate any potential loss at this time.
Additionally, four lawsuits have been filed by purported shareholders of Physicians Realty Trust against Physicians Realty Trust and the members of the Physicians Realty Trust board of trustees challenging the disclosures made in the Initial Filing. The plaintiffs in each action seek, among other things, to enjoin the Mergers and the transactions contemplated by the Merger Agreement and an award of costs and attorneys’ fees. In addition to such lawsuits, Physicians Realty Trust has received correspondence from multiple purported shareholders of Physicians Realty Trust alleging deficiencies regarding the disclosures made in the Initial Filing. Additional demands and lawsuits arising out of the Mergers may be made or filed in the future.
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 Lab JV (see Note 8). 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 potential success-based fees as a result of the Mergers (see Note 1), obligations as the lessee under operating leases (see Note 6), commitments to fund additional loans for senior housing redevelopment and capital expenditure projects (see Note 7), debt service obligations (see Note 10), and potential future obligations related to redeemable noncontrolling interests (see Note 12) at December 31, 2023 (in thousands):
| Amount | |||||
| Development and redevelopment commitments(1) | $ | 151,996 | |||
| Lease and other contractual commitments(2) | 27,655 | ||||
| $ | 179,651 |
_______________________________________
(1)Represents construction and other commitments as of December 31, 2023 for developments and redevelopments in progress and includes allowances for Company-owned 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, 2023 and includes allowances for Company-owned tenant improvements and leasing commissions. Excludes allowances for Company-owned 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).
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 12. Equity and Redeemable Noncontrolling Interests
Dividends
On January 31, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share. The common stock cash dividend will be paid on February 26, 2024 to stockholders of record as of the close of business on February 14, 2024.
During each of the years ended December 31, 2023, 2022, and 2021, the Company declared and paid common stock cash dividends of $1.20.
At-The-Market Equity Offering Program
In February 2023, in connection with the Reorganization, the Company terminated the previous at-the-market equity offering program (as amended from time to time, the “2020 ATM Program”) and established a new at-the-market equity offering program (the “2023 ATM Program” and, together with the 2020 ATM Program, the “ATM Programs”). The ATM Programs allow for the sale of shares of common stock having an aggregate gross sales price of up to $1.5 billion (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 becomes 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, 2023, $1.5 billion of the Company’s common stock remained available for sale under the 2023 ATM Program.
ATM Forward Contracts
During the year ended December 31, 2021, the Company utilized the forward provisions under the 2020 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. The Company did not enter into any forward contracts under the 2020 ATM Program during the year ended December 31, 2022. In December 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. During the year ended December 31, 2023, the Company did not utilize the forward provisions under the ATM Programs.
ATM Direct Issuances
During each of the years ended December 31, 2023, 2022, and 2021, there were no direct issuances of shares of common stock under the ATM Programs.
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. In August 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. During the year ended December 31, 2023, there were no repurchases under the Share Repurchase Program. Therefore, at December 31, 2023, $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, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Dividend Reinvestment and Stock Purchase Plan | $ | 70 | $ | 59 | $ | 81 | |||||||||||
| Conversion of DownREIT units | 72 | 27 | 8 | ||||||||||||||
| Exercise of stock options | — | — | 97 | ||||||||||||||
| Vesting of restricted stock units | 613 | 820 | 924 | ||||||||||||||
| Repurchase of common stock | 241 | 2,418 | 418 |
Accumulated Other Comprehensive Income (Loss)
The following table summarizes the Company’s accumulated other comprehensive income (loss) (in thousands):
| December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Unrealized gains (losses) on derivatives, net | $ | 21,245 | $ | 30,145 | |||||||
| Supplemental Executive Retirement Plan minimum liability | (1,874) | (2,011) | |||||||||
| Total accumulated other comprehensive income (loss) | $ | 19,371 | $ | 28,134 |
The Company has a defined benefit pension plan, known as the Supplemental Executive Retirement Plan, with one plan participant, a 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).
Noncontrolling Interests
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 (the “Option Requirements”). Each put option is payable in cash and subject to changes 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. In addition to the rights of the redeemable noncontrolling interest holders, once the Option Requirements have been met, the Company has the ability to buy out the interests of the noncontrolling interest holders.
As of December 31, 2023, three of the redeemable noncontrolling interests met the conditions for redemption, but were not yet exercised. The one remaining redeemable noncontrolling interest met the redemption conditions in January 2024. The values of the redeemable noncontrolling interests are subject to change based on the assessment of redemption value at each redemption date.
Healthpeak OP
Immediately following the Reorganization, Healthpeak Properties, Inc. was the initial sole member and 100% owner of Healthpeak OP. Subsequent to the Reorganization, OP Unitholders were issued approximately 2 million OP Units during the year ended December 31, 2023, all of which were LTIP Units (as defined below, see also Note 14). When certain conditions are met, the OP Unitholders have the right to require redemption of part or all of their OP Units for cash or shares of the Company’s common stock, at the Company’s option as managing member of Healthpeak OP. The per unit redemption amount is equal to either one share of the Company’s common stock or cash equal to the fair value of a share of common stock at the time of redemption. The Company classifies the OP Units in permanent equity because it may elect, in its sole discretion, to issue shares of its common stock to OP Unitholders who choose to redeem their OP Units rather than using cash. None of the outstanding OP Units met the criteria for redemption as of December 31, 2023.
DownREITs
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, 2023, there were approximately 5 million DownREIT units (7 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, 2023, the carrying and market values of the 5 million DownREIT units were $199 million and $143 million, respectively. At December 31, 2022, the carrying and market values of the 5 million DownREIT units were $200 million and $183 million, respectively.
NOTE 13. 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, 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.
Certain 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 12 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 forward agreements under its ATM Programs 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 following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts):
| Year Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Numerator | |||||||||||||||||
| Income (loss) from continuing operations | $ | 334,757 | $ | 513,540 | $ | 137,728 | |||||||||||
| Noncontrolling interests’ share in continuing operations | (28,748) | (15,975) | (17,851) | ||||||||||||||
| Income (loss) from continuing operations attributable to Healthpeak Properties, Inc. | 306,009 | 497,565 | 119,877 | ||||||||||||||
| Less: Participating securities’ share in continuing operations | (1,725) | (2,657) | (3,269) | ||||||||||||||
| Income (loss) from continuing operations applicable to common shares | 304,284 | 494,908 | 116,608 | ||||||||||||||
| Income (loss) from discontinued operations | — | 2,884 | 388,202 | ||||||||||||||
| Noncontrolling interests’ share in discontinued operations | — | — | (2,539) | ||||||||||||||
| Net income (loss) applicable to common shares - basic and diluted | $ | 304,284 | $ | 497,792 | $ | 502,271 | |||||||||||
| Denominator | |||||||||||||||||
| Basic weighted average shares outstanding | 547,006 | 538,809 | 538,930 | ||||||||||||||
| Dilutive potential common shares - equity awards(1) | 269 | 338 | 310 | ||||||||||||||
| Dilutive potential common shares - forward equity agreements(2) | — | — | 1 | ||||||||||||||
| Diluted weighted average common shares | 547,275 | 539,147 | 539,241 | ||||||||||||||
| Basic earnings (loss) per common share | |||||||||||||||||
| Continuing operations | $ | 0.56 | $ | 0.92 | $ | 0.22 | |||||||||||
| Discontinued operations | — | 0.00 | 0.71 | ||||||||||||||
| Net income (loss) applicable to common shares | $ | 0.56 | $ | 0.92 | $ | 0.93 | |||||||||||
| Diluted earnings (loss) per common share | |||||||||||||||||
| Continuing operations | $ | 0.56 | $ | 0.92 | $ | 0.22 | |||||||||||
| Discontinued operations | — | 0.00 | 0.71 | ||||||||||||||
| Net income (loss) applicable to common shares | $ | 0.56 | $ | 0.92 | $ | 0.93 |
_______________________________________
(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, 2023, forward equity sales agreements had no dilutive impact as no shares were outstanding under ATM forward contracts during the year. 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, represents the dilutive impact of 9.1 million shares that were not settled during the year then ended.
For each of the years ended December 31, 2023, 2022, and 2021, all 7 million shares issuable upon conversion of DownREIT units were not included because they were anti-dilutive.
NOTE 14. 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, which was amended and restated in 2019 and further amended in 2023 (the “2014 Plan”). Following the adoption of the 2014 Plan, no new awards were issued under the 2006 Plan. On April 27, 2023, the Company’s stockholders approved the 2023 Performance Plan (the “2023 Plan” and collectively with the 2006 Plan and the 2014 Plan, the “Plans”). Following the adoption of the 2023 Plan, no new awards may be issued under the 2014 Plan. The Plans provide for the granting of stock-based compensation to officers, employees, and directors, including stock options, restricted stock, restricted stock units, and with respect to the 2014 and 2023 Plans, profits interests in Healthpeak OP (“LTIP Units”). The maximum number of shares reserved for awards under the 2023 Plan is 31 million shares, and, as of December 31, 2023, 31 million of the reserved shares under the 2023 Plan are available for future awards, of which 21 million shares may be issued as restricted stock, restricted stock units, or LTIP Units.
Restricted Stock Units
Under the Plans, time-based restricted stock units and market-based restricted stock units (collectively, “Restricted 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 Units is expensed over the period of vesting. Time-based restricted stock units, which vest based solely upon passage of time, generally vest on a graded schedule over a period of three to five years. The fair value of time-based restricted stock units is determined based on the closing market price of the Company’s shares on the grant date. Market-based restricted stock units, which vest dependent upon attainment of total shareholder return (“TSR”) performance that equal or exceed threshold levels as measured against certain peer and industry benchmarks, generally vest in their entirety at the end of a three-year performance period. The number of shares that ultimately vest based on performance can vary from 0% to 200% of target depending on the level of achievement of the performance criteria. The fair value of market-based restricted 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, 2023, 2022, and 2021, 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 33.0%, 38.9%, and 39.1%, (iii) dividend yield of 4.4%, 3.5%, and 4.0%, (iv) risk-free rate of 4.4%, 1.8%, and 0.2%, and (v) post-vesting restrictions discount of 10.0%, 5.8%, and 12.9%. The total grant date fair value of time-based restricted stock units and market-based restricted stock units granted during the years ended December 31, 2023, 2022, and 2021 was $9 million, $27 million, and $23 million, respectively. The total fair value (at vesting) of time-based restricted stock units and market-based restricted stock units that vested during the years ended December 31, 2023, 2022, and 2021 was $16 million, $27 million, and $29 million, respectively.
Upon vesting of Restricted Stock Units, the participant is required to pay the related tax withholding obligation, as applicable. 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, 2023, 2022, and 2021, the Company withheld 241,000, 356,000, and 418,000 shares, respectively, to offset tax withholding obligations with respect to the vesting of the Restricted Stock Units.
LTIP Units
During the year ended December 31, 2023, approximately 2 million LTIP Units were issued to officers of the Company. These awards are designed to qualify as “profits interests” in Healthpeak OP for federal income tax purposes. Such interests are initially not economically equivalent in value to a share of common stock until reaching one-for-one parity with the Company’s common stock, subject to any vesting conditions applicable to the award. When certain conditions are met, LTIP Units are converted to common units, which may then be redeemed for cash or shares of the Company’s common stock, at the Company’s option as managing member of Healthpeak OP (see also Note 12).
Under the Plans, time-based LTIP Units and market-based LTIP Units (collectively, “LTIP Units”), are granted subject to certain restrictions. Time-based LTIP Units, which vest solely upon passage of time, generally vest over a period of three to six years. The fair value of the time-based LTIP Units is determined based on the closing market price of the Company’s shares on the grant date less a discount for post-vesting restrictions, liquidity risk, and uncertainty of the time-based LTIP Units reaching parity. The market-based LTIP Units are granted at the maximum potential payout, inclusive of expected distributions during the performance period. Market-based LTIP Units, which vest dependent upon attainment of various levels of TSR performance that equal or exceed threshold levels as measured against certain peer and industry benchmarks, generally vest in their entirety at the end of a three-year performance period. The number of market-based LTIP Units that ultimately vest can vary from 0% to 200% of target depending on the level of achievement of the performance criteria, and any difference from the original grant are forfeited. The fair value of market-based LTIP Units granted during the year ended December 31, 2023 is determined based on the Monte Carlo valuation model using the same assumptions as market-based restricted stock units described above less a discount for post-vesting restrictions, liquidity risk, and uncertainty of the market-based LTIP Units reaching parity with the value of the Company’s common stock and the vesting terms of the awards. The total grant date fair value of LTIP Units granted during the year ended December 31, 2023 was $29 million. The total fair value (at vesting) of LTIP Units that vested during the year ended December 31, 2023 was $2 million.
Dividends and Distributions
Holders of time-based restricted stock units and time-based LTIP Units are generally entitled to receive dividends and distributions, respectively, equal to the amount that would be paid on an equivalent number of shares of common stock. Market-based restricted stock units receive cumulative cash dividends upon vesting for the entirety of the performance period based on the level of achievement of the performance criteria. The market-based LTIP Units receive cash distributions equal to 10% of the quarterly dividends paid on the Company’s common stock during the performance period. Based on the level of achievement of the performance criteria at the end of the performance period, the market-based LTIP Units receive distributions in the form of additional LTIP Units for amounts ultimately vested during the performance period, less cash distributions already paid.
Stock Options
There have been no grants of stock options since 2014. Stock options outstanding and exercisable were 0.2 million at December 31, 2023 and 0.3 million at December 31, 2022. There were no stock options exercised under the Plans for the years ended December 31, 2023 and 2022. For the year ended December 31, 2021, proceeds received from stock options exercised under the Plans was $3 million. No compensation cost related to stock options was incurred during the years ended December 31, 2023, 2022, and 2021.
The following table summarizes Restricted Stock Unit and LTIP Unit activity for the year ended December 31, 2023 (units in thousands):
| Restricted Stock Units | LTIP Units | ||||||||||||||||||||||
| Number of Units | Weighted Average Grant Date Fair Value | Number of Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||
| Unvested at January 1, 2023 | 1,709 | $ | 33.66 | — | $ | — | |||||||||||||||||
| Granted | 393 | 28.12 | 1,970 | 14.66 | |||||||||||||||||||
| Vested | (613) | 37.97 | (76) | 24.56 | |||||||||||||||||||
| Forfeited | (610) | 31.16 | — | — | |||||||||||||||||||
| Unvested at December 31, 2023 | 879 | $ | 29.91 | 1,894 | $ | 14.26 |
Total stock-based compensation cost was $19 million, $32 million, and $23 million for the years ended December 31, 2023, 2022, and 2021, respectively, which was recognized in general and administrative expenses. The year ended December 31, 2022 included $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. Of the total stock-based compensation cost, $4 million, $4 million, and $3 million was capitalized as part of real estate for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, there was $20 million of future expenses related to unvested stock-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. Compensation cost recognized for all Restricted Stock Units and LTIP Units is net of actual forfeitures.
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 continue to vest in accordance with the original terms of the grants. As of December 31, 2023, and 2022, $8 million and $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.
NOTE 15. Segment Disclosures
The Company’s reportable segments, based on how its CODM evaluates the business and allocates resources, are as follows: (i) lab, (ii) outpatient medical, 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. These marketable debt securities matured on December 31, 2022, and the Company received the related proceeds in January 2023. Non-reportable segments have been presented on an aggregate basis within the Notes to the Consolidated Financial Statements herein. The accounting policies of the segments are the same as those described in the Company’s Summary of Significant Accounting Policies (see Note 2).
During the second quarter of 2023, the Company changed the name of its “life science” and “medical office” segments to “lab” and “outpatient medical,” respectively. The segment name changes did not result in any changes to the composition of the Company’s segments or information reviewed by its CODM, and therefore, had no impact on the Company’s historical results of segment operations.
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, loans receivable, marketable debt securities, other assets, real estate assets held for sale, 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, 2023:
| Lab | Outpatient Medical | CCRC | Other Non-reportable | Corporate Non-segment | Total | |||||||||||||||||||||||||||||||||
| Total revenues | $ | 878,326 | $ | 753,479 | $ | 527,417 | $ | 21,781 | $ | — | $ | 2,181,003 | ||||||||||||||||||||||||||
| Government grant income(1) | — | — | 184 | — | — | 184 | ||||||||||||||||||||||||||||||||
| Less: Interest income | — | — | — | (21,781) | — | (21,781) | ||||||||||||||||||||||||||||||||
| Healthpeak’s share of unconsolidated joint venture total revenues | 9,924 | 3,033 | — | 82,426 | — | 95,383 | ||||||||||||||||||||||||||||||||
| Healthpeak’s share of unconsolidated joint venture government grant income | — | — | — | 229 | — | 229 | ||||||||||||||||||||||||||||||||
| Noncontrolling interests’ share of consolidated joint venture total revenues | (619) | (35,073) | — | — | — | (35,692) | ||||||||||||||||||||||||||||||||
| Operating expenses | (229,630) | (263,132) | (413,472) | — | 4,174 | (902,060) | ||||||||||||||||||||||||||||||||
| Healthpeak’s share of unconsolidated joint venture operating expenses | (4,092) | (1,189) | — | (60,811) | — | (66,092) | ||||||||||||||||||||||||||||||||
| Noncontrolling interests’ share of consolidated joint venture operating expenses | 156 | 9,921 | — | — | — | 10,077 | ||||||||||||||||||||||||||||||||
| Adjustments to NOI(2) | (36,524) | (14,314) | (1,618) | 366 | (4,174) | (56,264) | ||||||||||||||||||||||||||||||||
| Adjusted NOI | 617,541 | 452,725 | 112,511 | 22,210 | — | 1,204,987 | ||||||||||||||||||||||||||||||||
| Plus: Adjustments to NOI(2) | 36,524 | 14,314 | 1,618 | (366) | 4,174 | 56,264 | ||||||||||||||||||||||||||||||||
| Interest income | — | — | — | 21,781 | — | 21,781 | ||||||||||||||||||||||||||||||||
| Interest expense | — | (7,770) | (7,010) | — | (185,551) | (200,331) | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | (328,349) | (289,683) | (131,869) | — | — | (749,901) | ||||||||||||||||||||||||||||||||
| General and administrative | — | — | — | — | (95,132) | (95,132) | ||||||||||||||||||||||||||||||||
| Transaction and merger-related costs | (333) | (1,120) | (1,881) | — | (14,181) | (17,515) | ||||||||||||||||||||||||||||||||
| Impairments and loan loss reserves, net | — | — | — | 5,601 | — | 5,601 | ||||||||||||||||||||||||||||||||
| Gain (loss) on sales of real estate, net | 60,498 | 21,312 | — | 4,653 | — | 86,463 | ||||||||||||||||||||||||||||||||
| Other income (expense), net | 7 | 2,697 | 228 | (81) | 3,957 | 6,808 | ||||||||||||||||||||||||||||||||
| Less: Government grant income | — | — | (184) | — | — | (184) | ||||||||||||||||||||||||||||||||
| Less: Healthpeak’s share of unconsolidated joint venture NOI | (5,832) | (1,844) | — | (21,844) | — | (29,520) | ||||||||||||||||||||||||||||||||
| Plus: Noncontrolling interests’ share of consolidated joint venture NOI | 463 | 25,152 | — | — | — | 25,615 | ||||||||||||||||||||||||||||||||
| Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures | 380,519 | 215,783 | (26,587) | 31,954 | (286,733) | 314,936 | ||||||||||||||||||||||||||||||||
| Income tax benefit (expense) | — | — | — | — | 9,617 | 9,617 | ||||||||||||||||||||||||||||||||
| Equity income (loss) from unconsolidated joint ventures | 4,540 | 835 | — | 4,829 | — | 10,204 | ||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | 385,059 | 216,618 | (26,587) | 36,783 | (277,116) | 334,757 | ||||||||||||||||||||||||||||||||
| Income (loss) from discontinued operations | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 385,059 | $ | 216,618 | $ | (26,587) | $ | 36,783 | $ | (277,116) | $ | 334,757 |
_______________________________________
(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, 2022:
| Lab | Outpatient Medical | 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 and merger-related 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:
| Lab | Outpatient Medical | 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 and merger-related 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.
The following table summarizes the Company’s total assets by segment (in thousands):
| December 31, | ||||||||||||||
| Segment | 2023 | 2022 | ||||||||||||
| Lab | $ | 9,313,395 | $ | 9,019,271 | ||||||||||
| Outpatient medical | 6,376,191 | 6,291,986 | ||||||||||||
| CCRC | 2,369,883 | 2,276,898 | ||||||||||||
| Reportable segment assets | 18,059,469 | 17,588,155 | ||||||||||||
| Accumulated depreciation and amortization | (4,017,023) | (3,540,362) | ||||||||||||
| Net reportable segment assets | 14,042,446 | 14,047,793 | ||||||||||||
| Other non-reportable segment assets | 553,031 | 744,550 | ||||||||||||
| Assets held for sale, net | 117,986 | 49,866 | ||||||||||||
| Other non-segment assets | 985,387 | 929,020 | ||||||||||||
| Total assets | $ | 15,698,850 | $ | 15,771,229 |
See Notes 3, 4, 5, 6, 7, 8, and 18 for significant transactions impacting the Company’s segment assets during the periods presented.
At each of December 31, 2023 and 2022, goodwill of $18 million was allocated to the Company’s segment assets as follows: (i) $14 million for outpatient medical, (ii) $2 million for CCRC, and (iii) $2 million for other non-reportable.
NOTE 16. 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 16. 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, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Ordinary dividends(1) | $ | 0.909692 | $ | 0.872948 | $ | 0.152336 | |||||||||||
| Capital gains(2)(3) | 0.116992 | 0.183208 | 0.379960 | ||||||||||||||
| Nondividend distributions | 0.173316 | 0.143844 | 0.667704 | ||||||||||||||
| $ | 1.200000 | $ | 1.200000 | $ | 1.200000 |
_______________________________________
(1)For the year ended December 31, 2023, the amount includes $0.882312 of ordinary dividends qualified as business income for purposes of Code Section 199A and $0.027380 of qualified dividend income for purposes of Code Section 1(h)(11). 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).
(2)For the years ended December 31, 2023, 2022, and 2021, the amount includes $0.036256, $0.017760, and $0.379960, respectively, of unrecaptured Code 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, 2023, the “One Year Amounts” and “Three Year Amounts” are each zero, since all capital gains relate to Code Section 1231 gains. For the year ended December 31, 2022, the “One Year Amounts” and “Three Year Amounts” are each 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 year ended December 31, 2021, 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, 2023, 2022, and 2021, 100%, 10.3292%, 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, 2023, 2022, and 2021 was $325 million, $509 million, and $134 million, respectively, of which $318 million, $527 million, and $150 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 $7 million, $(18) million, and $(16) million for the years ended December 31, 2023, 2022, and 2021, respectively.
The total income tax benefit (expense) from continuing operations consists of the following components (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | (1,663) | $ | (632) | $ | (126) | |||||||||||
| State | (3,325) | (689) | (1,003) | ||||||||||||||
| Total current | $ | (4,988) | $ | (1,321) | $ | (1,129) | |||||||||||
| Deferred | |||||||||||||||||
| Federal | $ | 11,682 | $ | 3,157 | $ | 3,469 | |||||||||||
| State | 2,923 | 2,589 | 921 | ||||||||||||||
| Total deferred | $ | 14,605 | $ | 5,746 | $ | 4,390 | |||||||||||
| Total income tax benefit (expense) from continuing operations | $ | 9,617 | $ | 4,425 | $ | 3,261 |
The Company’s income tax benefit from discontinued operations was zero, $0.3 million, and $1 million for the years ended December 31, 2023, 2022, and 2021, respectively (see Note 4).
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, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Tax benefit (expense) at U.S. federal statutory income tax rate on income or loss subject to tax | $ | (1,404) | $ | 3,698 | $ | 3,345 | |||||||||||
| State income tax benefit (expense), net of federal tax | (1,035) | 911 | 706 | ||||||||||||||
| Gross receipts and margin taxes | (1,647) | (956) | (989) | ||||||||||||||
| Return to provision adjustments | (90) | 1,260 | (4) | ||||||||||||||
| Change in valuation allowance for deferred tax assets | 13,797 | 194 | 203 | ||||||||||||||
| Change in tax status of TRS | (4) | (682) | — | ||||||||||||||
| Total income tax benefit (expense) from continuing operations | $ | 9,617 | $ | 4,425 | $ | 3,261 |
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, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Deferred tax assets: | |||||||||||||||||
| Deferred revenue | $ | 103,530 | $ | 102,504 | $ | 104,397 | |||||||||||
| Net operating loss carryforward | 54,136 | 62,280 | 71,744 | ||||||||||||||
| Expense accruals | 12,324 | 12,399 | 14,229 | ||||||||||||||
| Real estate | 850 | 150 | 129 | ||||||||||||||
| Other | 58 | 689 | — | ||||||||||||||
| Total deferred tax assets | 170,898 | 178,022 | 190,499 | ||||||||||||||
| Valuation allowance | (13,004) | (26,098) | (35,772) | ||||||||||||||
| Deferred tax assets, net of valuation allowance | $ | 157,894 | $ | 151,924 | $ | 154,727 | |||||||||||
| Deferred tax liabilities: | |||||||||||||||||
| Real estate | $ | 43,488 | $ | 52,266 | $ | 61,097 | |||||||||||
| Other | 818 | 674 | 648 | ||||||||||||||
| Deferred tax liabilities | $ | 44,306 | $ | 52,940 | $ | 61,745 | |||||||||||
| Net deferred tax assets | $ | 113,588 | $ | 98,984 | $ | 92,982 |
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.
As of December 31, 2021 and 2022, the Company recorded a valuation allowance against certain SHOP deferred tax assets generated by net operating losses of its TRS entities. During the year ended December 31, 2023, the Company concluded that it was more likely than not that certain deferred tax assets (primarily net operating loss carryforwards) would be realized. This conclusion was based on recent revisions to estimates of future taxable income for certain TRS entities in connection with the Callan Ridge JV transaction (see also Notes 4 and 8). Accordingly, the Company reversed its deferred tax asset valuation allowance and recognized an income tax benefit of $14 million during the year ended December 31, 2023. As of December 31, 2023, 2022, and 2021, the Company had a deferred tax asset valuation allowance of $13 million, $26 million, and $36 million, respectively.
At December 31, 2023, the Company had a net operating loss (“NOL”) carryforward of $216 million related to the TRS entities. If unused, $15 million will begin to expire in 2035. The remainder, totaling $201 million, may be carried forward indefinitely.
The following table summarizes the Company’s unrecognized tax benefits (in thousands):
| December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Total unrecognized tax benefits at January 1 | $ | — | $ | 469 | $ | 469 | |||||||||||
| Gross amount of decreases for prior years’ tax positions | — | (469) | — | ||||||||||||||
| Total unrecognized tax benefits at December 31 | $ | — | $ | — | $ | 469 |
For the years ended December 31, 2023 and 2022, the Company had no unrecognized tax benefits. For the year ended December 31, 2021, 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 2020.
NOTE 17. Supplemental Cash Flow Information
The following table provides supplemental cash flow information (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Supplemental cash flow information: | |||||||||||||||||
| Interest paid, net of capitalized interest | $ | 188,213 | $ | 162,115 | $ | 173,044 | |||||||||||
| Income taxes paid (refunded) | 1,923 | (1,903) | 4,521 | ||||||||||||||
| Capitalized interest | 56,849 | 41,046 | 24,084 | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liability for operating leases | 21,488 | 12,594 | 10,620 | ||||||||||||||
| Supplemental schedule of non-cash investing and financing activities: | |||||||||||||||||
| Increase in ROU asset in exchange for new lease liability related to operating leases | 3,951 | 9,454 | 28,866 | ||||||||||||||
| Decrease in ROU asset with corresponding change in lease liability related to operating leases | — | — | 8,410 | ||||||||||||||
| Accrued construction costs | 105,572 | 178,626 | 179,995 | ||||||||||||||
| Net noncash impact from the consolidation of property previously held in an unconsolidated joint venture | 993 | — | — | ||||||||||||||
| Retained investment in connection with South San Francisco JVs transaction | — | 293,265 | — | ||||||||||||||
| Seller financing provided on disposition of real estate asset | — | — | 559,745 | ||||||||||||||
| Carrying value of mortgages assumed by buyer in real estate dispositions | — | — | 143,676 | ||||||||||||||
See Note 8 for discussion of the South San Francisco JVs transaction.
Operating, investing, and financing cash flows in the Consolidated Statements of Cash Flows are reported inclusive of both cash flows from continuing operations and cash flows from discontinued operations. The following table summarizes certain cash flow information related to discontinued operations (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Leasing costs, tenant improvements, and recurring capital expenditures | $ | — | $ | 21 | $ | 2,636 | |||||||||||
| Development, redevelopment, and other major improvements of real estate | — | 18 | 5,780 | ||||||||||||||
| Depreciation and amortization of real estate, in-place lease, and other intangibles | — | — | — | ||||||||||||||
The following table summarizes cash, cash equivalents, and restricted cash (in thousands):
| Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Continuing operations | Discontinued operations | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beginning 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 | ||||||||||||||||||||||||||||||||||||||
| End of year: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 117,635 | $ | 72,032 | $ | 158,287 | $ | — | $ | — | $ | 7,707 | $ | 117,635 | $ | 72,032 | $ | 165,994 | ||||||||||||||||||||||||||||||||||||||
| Restricted cash | 51,388 | 54,802 | 53,454 | — | — | — | 51,388 | 54,802 | 53,454 | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash | $ | 169,023 | $ | 126,834 | $ | 211,741 | $ | — | $ | — | $ | 7,707 | $ | 169,023 | $ | 126,834 | $ | 219,448 |
NOTE 18. Variable Interest Entities
Operating Subsidiary
Subsequent to the Reorganization, Healthpeak OP is the Company’s operating subsidiary and a limited liability company that has governing provisions that are the functional equivalent of a limited partnership. The Company holds a membership interest in Healthpeak OP, acts as the managing member of Healthpeak OP, and exercises full responsibility, discretion, and control over the day-to-day management of Healthpeak OP. Because the noncontrolling interests in Healthpeak OP do not have substantive liquidation rights, substantive kick-out rights without cause, or substantive participating rights, the Company has determined that Healthpeak OP is a VIE. The Company, as managing member, has the power to direct the core activities of Healthpeak OP that most significantly affect Healthpeak OP’s performance, and through its interest in Healthpeak OP, has both the right to receive benefits from and the obligation to absorb losses of Healthpeak OP. Accordingly, the Company is the primary beneficiary of Healthpeak OP and consolidates Healthpeak OP. As the Company conducts its business and holds its assets and liabilities through Healthpeak OP, the total consolidated assets and liabilities, income (losses), and cash flows of Healthpeak OP represent substantially all of the total consolidated assets and liabilities, income (losses), and cash flows of the Company.
Unconsolidated Variable Interest Entities
At December 31, 2023, the Company had investments in two unconsolidated VIE joint ventures. At December 31, 2022, 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.
LLC Investment. The Company holds a limited partner ownership interest in an unconsolidated LLC (“LLC Investment”) 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 as well as 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 lab 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). See Note 8 for additional descriptions of the nature, purpose, and operating activities of this unconsolidated VIE and interests therein.
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 had been identified as a VIE because it was “thinly capitalized.” The CMBS issued by the VIE were backed by mortgage debt obligations on real estate assets. These securities were classified as held-to-maturity because the Company had 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.
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, 2023 was as follows (in thousands):
| VIE Type | Asset Type | Maximum Loss Exposure and Carrying Amount**(1)** | ||||||||||||
| LLC Investment | Other assets, net | $ | 14,985 | |||||||||||
| Needham Land Parcel JV | Investments in and advances to unconsolidated joint ventures | 17,084 |
_______________________________________
(1)The Company’s maximum loss exposure represents the aggregate carrying amount of such investments.
As of December 31, 2023, 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).
Consolidated Variable Interest Entities
The Company’s consolidated total assets and total liabilities at December 31, 2023 and 2022 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 outpatient medical buildings (“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.
Lab JVs. The Company holds a 98% or greater ownership interest in multiple joint venture entities that own and lease lab buildings (the “Lab JVs”). The Lab 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 Lab 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 Lab 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 Lab JVs may only be used to settle their contractual obligations. Refer to Note 12 for a discussion of certain put options associated with the Lab JVs.
MSREI 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 outpatient medical buildings (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 tenant 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 tenant rents) may only be used to settle their contractual obligations (primarily from debt service and capital expenditures).
Total assets and total liabilities include VIE assets and liabilities, excluding those of Healthpeak OP, as follows (in thousands):
| December 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Assets | ||||||||||||||
| Buildings and improvements | $ | 2,392,375 | $ | 2,356,905 | ||||||||||
| Development costs and construction in progress | 47,481 | 58,499 | ||||||||||||
| Land and improvements | 307,166 | 324,714 | ||||||||||||
| Accumulated depreciation and amortization | (665,791) | (623,244) | ||||||||||||
| Net real estate | 2,081,231 | 2,116,874 | ||||||||||||
| Accounts receivable, net | 5,906 | 6,893 | ||||||||||||
| Cash and cash equivalents | 18,410 | 20,586 | ||||||||||||
| Restricted cash | 613 | 354 | ||||||||||||
| Intangible assets, net | 56,975 | 73,860 | ||||||||||||
| Assets held for sale, net | — | 30,355 | ||||||||||||
| Right-of-use asset, net | 97,575 | 99,376 | ||||||||||||
| Other assets, net | 79,248 | 73,690 | ||||||||||||
| Total assets | $ | 2,339,958 | $ | 2,421,988 | ||||||||||
| Liabilities | ||||||||||||||
| Mortgage debt | $ | 144,874 | $ | 144,604 | ||||||||||
| Intangible liabilities, net | 11,884 | 15,066 | ||||||||||||
| Liabilities related to assets held for sale, net | — | 401 | ||||||||||||
| Lease liability | 99,725 | 99,039 | ||||||||||||
| Accounts payable, accrued liabilities, and other liabilities | 54,975 | 68,979 | ||||||||||||
| Deferred revenue | 48,316 | 39,661 | ||||||||||||
| Total liabilities | $ | 359,774 | $ | 367,750 |
Total assets and total liabilities related to assets held for sale include VIE assets and liabilities, excluding those of Healthpeak OP, as follows (in thousands):
| December 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Assets | ||||||||||||||
| Buildings and improvements | $ | — | $ | 39,934 | ||||||||||
| Land and improvements | — | 1,926 | ||||||||||||
| Accumulated depreciation and amortization | — | (15,612) | ||||||||||||
| Net real estate | — | 26,248 | ||||||||||||
| Intangible assets, net | — | 215 | ||||||||||||
| Other assets, net | — | 3,892 | ||||||||||||
| Total assets | $ | — | $ | 30,355 | ||||||||||
| Liabilities | ||||||||||||||
| Deferred revenue | — | 401 | ||||||||||||
| Total liabilities | $ | — | $ | 401 |
NOTE 19. 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 discontinued operations:
| Percentage of Total Company Assets | Percentage of Total Company Revenues | |||||||||||||||||||||||||||||||
| December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
| State | 2023 | 2022 | 2023 | 2022 | 2021 | |||||||||||||||||||||||||||
| California | 38 | 37 | 31 | 31 | 28 | |||||||||||||||||||||||||||
| Florida | 10 | 10 | 18 | 18 | 17 | |||||||||||||||||||||||||||
| Texas | 10 | 10 | 11 | 11 | 11 | |||||||||||||||||||||||||||
| Massachusetts | 17 | 17 | 11 | 10 | 9 | |||||||||||||||||||||||||||
The Company’s rental revenue is generated from multiple tenants across its diverse portfolio. As of December 31, 2023, the Company’s largest tenant in its outpatient medical and lab segments accounted for 8% and 2%, respectively, of the Company’s total revenues.
NOTE 20. Fair Value Measurements
The table below summarizes the carrying amounts and fair values of the Company’s financial instruments either recorded or disclosed on a recurring basis (in thousands):
| December 31, | |||||||||||||||||||||||
| 2023**(3)** | 2022**(3)** | ||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
| Loans receivable, net(2) | $ | 218,450 | $ | 218,450 | $ | 374,832 | $ | 369,425 | |||||||||||||||
| Marketable debt securities(2) | — | — | 21,702 | 21,702 | |||||||||||||||||||
| Interest rate swap instruments(2) | 21,359 | 21,359 | 30,259 | 30,259 | |||||||||||||||||||
| Bank line of credit and commercial paper(2) | 720,000 | 720,000 | 995,606 | 995,606 | |||||||||||||||||||
| Term loans(2) | 496,824 | 496,824 | 495,957 | 495,957 | |||||||||||||||||||
| Senior unsecured notes(1) | 5,403,378 | 5,144,667 | 4,659,451 | 4,238,124 | |||||||||||||||||||
| Mortgage debt(2) | 256,097 | 244,135 | 346,599 | 330,867 | |||||||||||||||||||
_______________________________________
(1)Level 1: Fair value is calculated based on quoted prices in active markets.
(2)Level 2: Fair value is based on (i) for loans receivable, net, interest rate swap instruments, and mortgage debt, standardized pricing models in which significant inputs or value drivers are observable in active markets, respectively, or (ii) for marketable debt securities, quoted prices for similar or identical instruments in active or inactive 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, 2023 and 2022, there were no material transfers of financial assets or liabilities within the fair value hierarchy.
NOTE 21. 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, 2023, 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 up to $18 million.
In April 2021, the Company executed two interest rate cap instruments on $142 million of variable rate mortgage debt secured by a portfolio of outpatient medical buildings (see Note 10). 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. 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 February 2023, the Company modified these two interest rate swap instruments to reflect the change in the related variable rate mortgage debt’s interest rate benchmarks from LIBOR to SOFR (see Note 10). The Company applied certain practical expedients provided by the reference rate reform ASUs in connection with the modifications to these cash flow hedges (see Note 2).
In August 2022, the Company entered into two forward-starting interest rate swap instruments on the $500 million aggregate principal amount of the Term Loan Facilities (see Note 10). The 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**(2)** | ||||||||||||||||||||||||||
| Date Entered | Maturity Date | Hedge Designation | Notional Amount | Pay Rate**(1)** | Receive Rate**(1)** | December 31, 2023 | December 31, 2022 | |||||||||||||||||||
| April 2022(3) | May 2026 | Cash flow | $ | 51,100 | 4.99 % | USD-SOFR w/ -5 Day Lookback + 2.50% | $ | 1,602 | $ | 2,300 | ||||||||||||||||
| April 2022(3) | May 2026 | Cash flow | 91,000 | 4.54 % | USD-SOFR w/ -5 Day Lookback + 2.05% | 2,851 | 4,096 | |||||||||||||||||||
| August 2022(3) | February 2027 | Cash flow | 250,000 | 2.60 % | 1 mo. USD-SOFR CME Term | 7,933 | 11,299 | |||||||||||||||||||
| August 2022(3) | August 2027 | Cash flow | 250,000 | 2.54 % | 1 mo. USD-SOFR CME Term | 8,973 | 12,564 | |||||||||||||||||||
(1)Pay rates and receive rates are as of December 31, 2023. As of December 31, 2022, the interest rate swap instrument with a $51 million notional amount had a pay rate of 5.08% and a receive rate of 1 mo. USD-LIBOR-BBA + 2.50%. As of December 31, 2022, the interest rate swap instrument with a $91 million notional amount had a pay rate of 4.63% and a receive rate of 1 mo. USD-LIBOR-BBA + 2.05%.
(2)At each of December 31, 2023 and 2022, the interest rate swap instruments were in an asset position. Derivative assets are recorded at fair value in other assets, net on the Consolidated Balance Sheets.
(3)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.
In January 2024, the Company entered into forward-starting interest rate swap instruments that will effectively establish a fixed interest rate on the $750 million aggregate principal amount of the 2024 Term Loan at a blended contractual rate of 4.5% (see Note 10). The interest rate swap instruments are designated as cash flow hedges.
NOTE 22. Accounts Payable, Accrued Liabilities, and Other Liabilities
The following table summarizes the Company’s accounts payable, accrued liabilities, and other liabilities (in thousands):
| December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Refundable entrance fees | $ | 251,874 | $ | 268,972 | |||||||
| Accrued construction costs | 105,572 | 178,626 | |||||||||
| Accrued interest | 59,492 | 59,291 | |||||||||
| Other accounts payable and accrued liabilities | 240,258 | 265,596 | |||||||||
| Accounts payable, accrued liabilities, and other liabilities | $ | 657,196 | $ | 772,485 |
NOTE 23. Deferred Revenue
The following table summarizes the Company’s deferred revenue, excluding deferred revenue related to assets classified as held for sale (in thousands):
| December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Nonrefundable entrance fees(1) | $ | 562,026 | $ | 518,573 | |||||||
| Other deferred revenue(2) | 343,607 | 325,503 | |||||||||
| Deferred revenue | $ | 905,633 | $ | 844,076 |
_______________________________________
(1)During the years ended December 31, 2023 and 2022, the Company collected nonrefundable entrance fees of $127 million and $101 million, respectively. During the years ended December 31, 2023, 2022, and 2021, the Company recognized amortization of $83 million, $79 million, and $76 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, 2023, 2022, and 2021, the Company recognized amortization related to other deferred revenue of $68 million, $44 million, and $39 million, respectively, which is included in rental and related revenues on the Consolidated Statements of Operations.
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: | ||||||||||||||||||||||||||||||||||||||
| 2023 | $ | 2,399 | $ | — | $ | — | $ | (117) | $ | 2,282 | ||||||||||||||||||||||||||||
| 2022 | 1,870 | 529 | — | — | 2,399 | |||||||||||||||||||||||||||||||||
| 2021 | 3,994 | — | — | (2,124) | 1,870 | |||||||||||||||||||||||||||||||||
| Discontinued operations: | ||||||||||||||||||||||||||||||||||||||
| 2023 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||
| 2022 | 4,138 | — | — | (4,138) | — | |||||||||||||||||||||||||||||||||
| 2021 | 5,873 | 46 | — | (1,781) | 4,138 |
_______________________________________
(1)Includes allowance for doubtful accounts. Excludes reserves for loan losses which are disclosed in Note 7 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, 2023 | Initial Cost to Company | Costs Capitalized Subsequent to Acquisition**(3)** | Gross Amount at Which Carried As of December 31, 2023 | Accumulated Depreciation**(5)** | Year Constructed**(6)** | Year Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | State | Land and improvements**(1)** | Buildings and Improvements**(2)** | Land and improvements | Buildings and Improvements | Total**(4)** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lab | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1483 | Brisbane | CA | $ | — | $ | 8,498 | $ | 500 | $ | 82,955 | $ | 8,498 | $ | 83,455 | $ | 91,953 | $ | (6,065) | 2022 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1484 | Brisbane | CA | — | 11,331 | 689 | 159,209 | 11,331 | 159,898 | 171,229 | (10,321) | 2022 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1485 | Brisbane | CA | — | 11,331 | 600 | 151,954 | 11,331 | 152,554 | 163,885 | (11,224) | 2022 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1486 | Brisbane | CA | — | 11,331 | — | 135,416 | 11,331 | 135,416 | 146,747 | (22,767) | 2020 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1487 | Brisbane | CA | — | 8,498 | — | 76,398 | 8,498 | 76,398 | 84,896 | (7,089) | 2020 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2874 | Brisbane | CA | — | 26,895 | 62,318 | 75,811 | 26,295 | 138,729 | 165,024 | (13,636) | 1989 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2875 | Brisbane | CA | — | 24,092 | 56,623 | 7,302 | 24,092 | 63,925 | 88,017 | (10,162) | 2000 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3139 | Brisbane | CA | — | 35,805 | — | 5,505 | 35,805 | 5,505 | 41,310 | — | — | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3140 | Brisbane | CA | — | 35,805 | — | 2,668 | 35,805 | 2,668 | 38,473 | — | — | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3142 | Brisbane | CA | — | — | — | 3,724 | — | 3,724 | 3,724 | — | — | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1401 | Hayward | CA | — | 900 | 7,100 | 12,450 | 1,338 | 19,112 | 20,450 | (5,630) | 1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1402 | Hayward | CA | — | 1,500 | 6,400 | 6,837 | 1,500 | 13,237 | 14,737 | (2,971) | 1999 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1403 | Hayward | CA | — | 1,900 | 7,100 | 7,873 | 1,900 | 14,973 | 16,873 | (5,801) | 1998 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1404 | Hayward | CA | — | 2,200 | 17,200 | 8,948 | 2,200 | 26,148 | 28,348 | (10,059) | 1999 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1405 | Hayward | CA | — | 1,000 | 3,200 | 646 | 1,000 | 3,846 | 4,846 | (1,625) | 1999 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1549 | Hayward | CA | — | 1,006 | 4,259 | 4,208 | 1,006 | 8,467 | 9,473 | (4,388) | 1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1550 | Hayward | CA | — | 677 | 2,761 | 876 | 677 | 3,637 | 4,314 | (2,027) | 1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1551 | Hayward | CA | — | 661 | 1,995 | 2,899 | 661 | 4,894 | 5,555 | (1,675) | 1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1552 | Hayward | CA | — | 1,187 | 7,139 | 1,435 | 1,187 | 8,574 | 9,761 | (5,601) | 1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1553 | Hayward | CA | — | 1,189 | 9,465 | 6,555 | 1,189 | 16,020 | 17,209 | (12,099) | 1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1554 | Hayward | CA | — | 1,246 | 5,179 | 11,951 | 1,246 | 17,130 | 18,376 | (6,357) | 1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1555 | Hayward | CA | — | 1,521 | 13,546 | 7,482 | 1,521 | 21,028 | 22,549 | (14,370) | 1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1556 | Hayward | CA | — | 1,212 | 5,120 | 1,127 | 1,212 | 6,247 | 7,459 | (3,853) | 1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1424 | La Jolla | CA | — | 11,175 | 25,283 | 44,107 | 11,389 | 69,176 | 80,565 | (16,131) | 1982 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1425 | La Jolla | CA | — | 7,217 | 19,883 | 61 | 7,217 | 19,944 | 27,161 | (8,193) | 1981 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1426 | La Jolla | CA | — | 8,381 | 12,412 | 11,260 | 8,381 | 23,672 | 32,053 | (15,449) | 1984 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1427 | La Jolla | CA | — | 10,127 | 16,983 | 7,965 | 10,148 | 24,927 | 35,075 | (11,048) | 1982 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1949 | La Jolla | CA | — | 2,686 | 11,045 | 17,501 | 2,686 | 28,546 | 31,232 | (8,278) | 2021 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2229 | La Jolla | CA | — | 8,753 | 32,528 | 16,498 | 8,777 | 49,002 | 57,779 | (13,320) | 1986/2009 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1470 | Poway | CA | — | 5,826 | 12,200 | 341 | 5,826 | 12,541 | 18,367 | (5,094) | 2005 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1471 | Poway | CA | — | 5,978 | 14,200 | — | 5,978 | 14,200 | 20,178 | (5,828) | 2005 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1472 | Poway | CA | — | 8,654 | — | 11,895 | 8,654 | 11,895 | 20,549 | (3,723) | 2014 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1473 | Poway | CA | — | 11,024 | 2,405 | 25,455 | 11,024 | 27,860 | 38,884 | (11,513) | 2019 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1474 | Poway | CA | — | 5,051 | — | 19,939 | 5,051 | 19,939 | 24,990 | (7,191) | 2019 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1475 | Poway | CA | — | 5,655 | — | 10,299 | 5,655 | 10,299 | 15,954 | (837) | 2020 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1478 | Poway | CA | — | 6,700 | 14,400 | — | 6,700 | 14,400 | 21,100 | (5,910) | 2002 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1499 | Redwood City | CA | — | 3,400 | 5,500 | 1,501 | 3,455 | 6,946 | 10,401 | (3,391) | 1989 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1500 | Redwood City | CA | — | 2,500 | 4,100 | 988 | 2,500 | 5,088 | 7,588 | (2,478) | 1989 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1501 | Redwood City | CA | — | 3,600 | 4,600 | 1,892 | 3,600 | 6,492 | 10,092 | (3,293) | 1989 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1502 | Redwood City | CA | — | 3,100 | 5,100 | 1,647 | 3,100 | 6,747 | 9,847 | (3,253) | 1989 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1503 | Redwood City | CA | — | 4,800 | 17,300 | 8,276 | 4,800 | 25,576 | 30,376 | (9,310) | 1989 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1504 | Redwood City | CA | — | 5,400 | 15,500 | 10,956 | 5,400 | 26,456 | 31,856 | (11,249) | 1989 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1505 | Redwood City | CA | — | 3,000 | 3,500 | 5,316 | 3,000 | 8,816 | 11,816 | (3,374) | 1988 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1506 | Redwood City | CA | — | 6,000 | 14,300 | 14,300 | 6,000 | 28,600 | 34,600 | (15,991) | 1988 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1507 | Redwood City | CA | — | 1,900 | 12,800 | 10,680 | 1,900 | 23,480 | 25,380 | (7,910) | 1988/2011 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1508 | Redwood City | CA | — | 2,700 | 11,300 | 17,193 | 2,700 | 28,493 | 31,193 | (9,485) | 1988/2011 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1509 | Redwood City | CA | — | 2,700 | 10,900 | 1,565 | 2,700 | 12,465 | 15,165 | (5,042) | 1988 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1510 | Redwood City | CA | — | 2,200 | 12,000 | 6,243 | 2,200 | 18,243 | 20,443 | (7,367) | 1988 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1511 | Redwood City | CA | — | 2,600 | 9,300 | 19,676 | 2,600 | 28,976 | 31,576 | (15,352) | 1988 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1512 | Redwood City | CA | — | 3,300 | 18,000 | 19,072 | 3,300 | 37,072 | 40,372 | (18,557) | 2000 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1513 | Redwood City | CA | — | 3,300 | 17,900 | 12,092 | 3,326 | 29,966 | 33,292 | (16,766) | 2000 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 678 | San Diego | CA | — | 2,603 | 11,051 | 3,514 | 2,766 | 14,402 | 17,168 | (6,897) | 1997 | 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 679 | San Diego | CA | — | 5,269 | 23,566 | 23,961 | 5,669 | 47,127 | 52,796 | (18,457) | 1997 | 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 837 | San Diego | CA | — | 4,630 | 2,028 | 3,302 | 4,630 | 5,330 | 9,960 | (2,426) | 1988/2012 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 838 | San Diego | CA | — | 2,040 | 903 | 3,354 | 2,040 | 4,257 | 6,297 | (1,325) | 1988/2012 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 839 | San Diego | CA | — | 3,940 | 3,184 | 2,863 | 4,036 | 5,951 | 9,987 | (2,499) | 1987 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 840 | San Diego | CA | — | 5,690 | 4,579 | 1,289 | 5,830 | 5,728 | 11,558 | (2,587) | 1987 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1418 | San Diego | CA | — | 11,700 | 31,243 | 59,282 | 11,700 | 90,525 | 102,225 | (16,917) | 2022 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1419 | San Diego | CA | — | 2,324 | — | 33,144 | 2,324 | 33,144 | 35,468 | (2,735) | 2022 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1420 | San Diego | CA | — | 4,200 | — | 41,121 | 4,200 | 41,121 | 45,321 | (2,293) | 2022 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1421 | San Diego | CA | — | 7,000 | 33,779 | — | 7,000 | 33,779 | 40,779 | (13,863) | 2000 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1422 | San Diego | CA | — | 7,179 | 3,687 | 1,171 | 7,179 | 4,858 | 12,037 | (3,687) | 1984 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1423 | San Diego | CA | — | 8,400 | 33,144 | 33,504 | 8,400 | 66,648 | 75,048 | (21,043) | 2002/2020 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1558 | San Diego | CA | — | 7,740 | — | 61,285 | 7,740 | 61,285 | 69,025 | — | — | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1947 | San Diego | CA | — | 2,581 | 10,534 | 4,485 | 2,581 | 15,019 | 17,600 | (7,859) | 2000 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1948 | San Diego | CA | — | 5,879 | 25,305 | 7,951 | 5,879 | 33,256 | 39,135 | (13,014) | 2001 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2197 | San Diego | CA | — | 7,621 | 3,913 | 7,541 | 7,621 | 11,454 | 19,075 | (6,884) | 1984 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2476 | San Diego | CA | — | 7,661 | 9,918 | 13,883 | 7,661 | 23,801 | 31,462 | (3,731) | 2000/2002 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2477 | San Diego | CA | — | 9,207 | 14,613 | 5,993 | 9,207 | 20,606 | 29,813 | (6,371) | 2000/2001 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2478 | San Diego | CA | — | 6,000 | — | 112,511 | 6,000 | 112,511 | 118,511 | — | — | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2617 | San Diego | CA | — | 2,734 | 5,195 | 9,364 | 2,734 | 14,559 | 17,293 | (3,269) | 1991/2020 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2618 | San Diego | CA | — | 4,100 | 12,395 | 22,843 | 4,100 | 35,238 | 39,338 | (11,689) | 1991/2020 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2622 | San Diego | CA | — | — | — | 17,231 | — | 17,231 | 17,231 | (1,658) | 2020 | 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2872 | San Diego | CA | — | 10,120 | 38,351 | 1,044 | 10,120 | 39,395 | 49,515 | (7,919) | 1995 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2873 | San Diego | CA | — | 6,052 | 14,122 | 1,846 | 6,052 | 15,968 | 22,020 | (3,117) | 1997 | 2018 |
| Encumbrances at December 31, 2023 | Initial Cost to Company | Costs Capitalized Subsequent to Acquisition**(3)** | Gross Amount at Which Carried As of December 31, 2023 | Accumulated Depreciation**(5)** | Year Constructed**(6)** | Year Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | State | Land and improvements**(1)** | Buildings and Improvements**(2)** | Land and improvements | Buildings and Improvements | Total**(4)** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3069 | San Diego | CA | — | 7,054 | 7,794 | 19,748 | 6,954 | 27,642 | 34,596 | (3,467) | 2007/2021 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3104 | San Diego | CA | — | — | — | 40,755 | — | 40,755 | 40,755 | — | — | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3110 | San Diego | CA | — | 19,120 | — | 7,212 | 20,587 | 5,745 | 26,332 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3111 | San Diego | CA | — | 24,729 | — | 1,261 | 24,830 | 1,160 | 25,990 | — | — | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3153 | San Diego | CA | — | 1,215 | — | 30 | 1,216 | 29 | 1,245 | — | — | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1410 | South San Francisco | CA | — | 4,900 | 18,100 | 12,159 | 4,900 | 30,259 | 35,159 | (14,389) | 2000/2019 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1411 | South San Francisco | CA | — | 8,000 | 27,700 | 33,159 | 8,000 | 60,859 | 68,859 | (18,496) | 2003/2019 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1412 | South San Francisco | CA | — | 10,100 | 22,521 | 10,207 | 10,100 | 32,728 | 42,828 | (12,170) | 1999 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1413 | South San Francisco | CA | — | 8,000 | 28,299 | 8,489 | 8,000 | 36,788 | 44,788 | (17,427) | 2000 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1430 | South San Francisco | CA | — | 10,700 | 23,621 | 27,632 | 10,700 | 51,253 | 61,953 | (14,113) | 1998/2019 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1431 | South San Francisco | CA | — | 7,000 | 15,500 | 9,493 | 7,000 | 24,993 | 31,993 | (10,242) | 2001 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1435 | South San Francisco | CA | — | 13,800 | 42,500 | 26,975 | 13,800 | 69,475 | 83,275 | (25,159) | 2008/2010 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1436 | South San Francisco | CA | — | 14,500 | 45,300 | 25,437 | 14,500 | 70,737 | 85,237 | (24,676) | 2008/2010 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1437 | South San Francisco | CA | — | 9,400 | 24,800 | 36,758 | 9,400 | 61,558 | 70,958 | (21,946) | 2008/2010 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1439 | South San Francisco | CA | — | 11,900 | 68,848 | 929 | 11,900 | 69,777 | 81,677 | (28,268) | 2003 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1440 | South San Francisco | CA | — | 10,000 | 57,954 | 471 | 10,000 | 58,425 | 68,425 | (23,883) | 2003 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1441 | South San Francisco | CA | — | 9,300 | 43,549 | 3,004 | 9,300 | 46,553 | 55,853 | (16,875) | 2003 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1442 | South San Francisco | CA | — | 11,000 | 47,289 | 42,670 | 11,000 | 89,959 | 100,959 | (21,784) | 2023 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1443 | South San Francisco | CA | — | 13,200 | 60,932 | 3,259 | 13,200 | 64,191 | 77,391 | (24,832) | 2007 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1444 | South San Francisco | CA | — | 10,500 | 33,776 | 9,449 | 10,500 | 43,225 | 53,725 | (13,088) | 2003 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1445 | South San Francisco | CA | — | 10,600 | 34,083 | 11 | 10,600 | 34,094 | 44,694 | (13,995) | 2003 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1458 | South San Francisco | CA | — | 10,900 | 20,900 | 6,560 | 10,900 | 27,460 | 38,360 | (9,607) | 2005 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1459 | South San Francisco | CA | — | 9,800 | 400 | 157,931 | 9,800 | 158,331 | 168,131 | (4,460) | 2023 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1462 | South San Francisco | CA | — | 7,117 | 600 | 4,112 | 7,117 | 4,712 | 11,829 | (1,785) | 1984/2012 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1463 | South San Francisco | CA | — | 10,381 | 2,300 | 19,648 | 10,381 | 21,948 | 32,329 | (8,511) | 1979/2012 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1464 | South San Francisco | CA | — | 7,403 | 700 | 8,819 | 7,403 | 9,519 | 16,922 | (2,723) | 1965/2012 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1468 | South San Francisco | CA | — | 10,100 | 24,013 | 12,188 | 10,100 | 36,201 | 46,301 | (15,058) | 2006 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1480 | South San Francisco | CA | — | 32,210 | 3,110 | 161,341 | 32,210 | 164,451 | 196,661 | (472) | 2023 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1528 | South San Francisco | CA | — | — | — | 165,770 | — | 165,770 | 165,770 | — | — | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1559 | South San Francisco | CA | — | 5,666 | 5,773 | 161 | 5,666 | 5,934 | 11,600 | (5,919) | 1968 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1560 | South San Francisco | CA | — | 1,204 | 1,293 | 2,683 | 1,204 | 3,976 | 5,180 | (2,917) | 1966 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1983 | South San Francisco | CA | — | 8,648 | — | 97,280 | 8,648 | 97,280 | 105,928 | (34,710) | 2016 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1984 | South San Francisco | CA | — | 7,845 | — | 90,818 | 7,844 | 90,819 | 98,663 | (29,712) | 2017 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1985 | South San Francisco | CA | — | 6,708 | — | 122,646 | 6,708 | 122,646 | 129,354 | (37,274) | 2017 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1986 | South San Francisco | CA | — | 6,708 | — | 120,613 | 6,708 | 120,613 | 127,321 | (31,623) | 2018 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1987 | South San Francisco | CA | — | 8,544 | — | 100,777 | 8,544 | 100,777 | 109,321 | (23,837) | 2019 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1988 | South San Francisco | CA | — | 10,120 | — | 118,498 | 10,120 | 118,498 | 128,618 | (29,452) | 2019 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1989 | South San Francisco | CA | — | 9,169 | — | 100,338 | 9,169 | 100,338 | 109,507 | (18,597) | 2020 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2553 | South San Francisco | CA | — | 2,897 | 8,691 | 4,478 | 2,897 | 13,169 | 16,066 | (4,340) | 1988 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2554 | South San Francisco | CA | — | 995 | 2,754 | 2,332 | 995 | 5,086 | 6,081 | (1,393) | 1988 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2555 | South San Francisco | CA | — | 2,202 | 10,776 | 2,497 | 2,202 | 13,273 | 15,475 | (3,326) | 1988 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2556 | South San Francisco | CA | — | 2,962 | 15,108 | 1,557 | 2,962 | 16,665 | 19,627 | (4,087) | 1988 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2557 | South San Francisco | CA | — | 2,453 | 13,063 | 3,616 | 2,453 | 16,679 | 19,132 | (5,840) | 1988 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2558 | South San Francisco | CA | — | 1,163 | 5,925 | 315 | 1,163 | 6,240 | 7,403 | (1,438) | 1988 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2624 | South San Francisco | CA | — | 25,502 | 42,910 | 14,017 | 25,502 | 56,927 | 82,429 | (13,911) | 2001 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2870 | South San Francisco | CA | — | 23,297 | 41,797 | 28,777 | 23,297 | 70,574 | 93,871 | (17,071) | 1996/2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2871 | South San Francisco | CA | — | 20,293 | 41,262 | 22,089 | 20,293 | 63,351 | 83,644 | (19,258) | 1999/2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3100 | South San Francisco | CA | — | 24,059 | — | 3,733 | 24,059 | 3,733 | 27,792 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3101 | South San Francisco | CA | — | 61,208 | — | 22,276 | 61,208 | 22,276 | 83,484 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3102 | South San Francisco | CA | — | 43,885 | — | 3,806 | 43,885 | 3,806 | 47,691 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3123 | South San Francisco | CA | — | — | — | 6,455 | — | 6,455 | 6,455 | — | — | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2705 | Cambridge | MA | — | 24,371 | 128,498 | 83 | 24,371 | 128,581 | 152,952 | (13,274) | 2011 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2706 | Cambridge | MA | — | 15,473 | 149,051 | 797 | 15,473 | 149,848 | 165,321 | (16,851) | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2707 | Cambridge | MA | — | 25,549 | 229,547 | 8,597 | 25,549 | 238,144 | 263,693 | (24,757) | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2708 | Cambridge | MA | — | — | 17,751 | 513 | — | 18,264 | 18,264 | (1,419) | 2010 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2709 | Cambridge | MA | — | — | 15,451 | 29 | — | 15,480 | 15,480 | (1,192) | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2928 | Cambridge | MA | — | 44,215 | 24,120 | 3,076 | 44,215 | 27,196 | 71,411 | (3,966) | 1984 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2929 | Cambridge | MA | — | 20,517 | — | 158,992 | 20,517 | 158,992 | 179,509 | (8,248) | 2022 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3074 | Cambridge | MA | — | 78,762 | 252,153 | 11,380 | 78,762 | 263,533 | 342,295 | (32,549) | 2018 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3106 | Cambridge | MA | — | 20,644 | 2,982 | 570 | 20,644 | 3,552 | 24,196 | (238) | 1950 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3107 | Cambridge | MA | — | 19,009 | 12,327 | — | 19,009 | 12,327 | 31,336 | (841) | 1973 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3108 | Cambridge | MA | — | 123,074 | 7,513 | — | 123,074 | 7,513 | 130,587 | (678) | 1965 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3109 | Cambridge | MA | — | 5,903 | — | 362 | 5,903 | 362 | 6,265 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3112 | Cambridge | MA | — | 23,402 | 47,623 | 69 | 23,402 | 47,692 | 71,094 | (3,950) | 1985 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3113 | Cambridge | MA | — | 32,244 | — | 6,730 | 36,119 | 2,855 | 38,974 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3114 | Cambridge | MA | — | 22,969 | — | (2,306) | 22,969 | (2,306) | 20,663 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3115 | Cambridge | MA | — | 66,786 | — | 1,418 | 66,786 | 1,418 | 68,204 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3116 | Cambridge | MA | — | — | — | 9,680 | — | 9,680 | 9,680 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3119 | Cambridge | MA | — | — | 29,667 | — | — | 29,667 | 29,667 | (2,041) | 2021 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3120 | Cambridge | MA | — | 18,063 | — | 670 | 18,063 | 670 | 18,733 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3122 | Cambridge | MA | — | 25,247 | — | 2,081 | 25,247 | 2,081 | 27,328 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3136 | Cambridge | MA | — | 4,118 | — | (219) | 4,119 | (220) | 3,899 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3137 | Cambridge | MA | — | 41,327 | — | 2,767 | 41,327 | 2,767 | 44,094 | — | — | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3141 | Cambridge | MA | — | 72,466 | — | 5,757 | 72,768 | 5,455 | 78,223 | — | — | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3148 | Cambridge | MA | — | 2,277 | — | 704 | 2,290 | 691 | 2,981 | — | — | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3149 | Cambridge | MA | — | 5,690 | — | 314 | 5,734 | 270 | 6,004 | — | — | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3150 | Cambridge | MA | — | 1,651 | — | 206 | 1,659 | 198 | 1,857 | — | — | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3151 | Cambridge | MA | — | 8,532 | — | 457 | 8,583 | 406 | 8,989 | — | — | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3152 | Cambridge | MA | — | 9,892 | — | 1,035 | 10,507 | 420 | 10,927 | — | — | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2630 | Lexington | MA | — | 16,411 | 49,681 | (2,292) | 12,967 | 50,833 | 63,800 | (10,653) | 1999 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2631 | Lexington | MA | — | 7,759 | 142,081 | 30,228 | 6,978 | 173,090 | 180,068 | (27,404) | 2010/2023 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2632 | Lexington | MA | — | — | 21,390 | 125,076 | — | 146,466 | 146,466 | (18,615) | 2021 | 2018 |
| Encumbrances at December 31, 2023 | Initial Cost to Company | Costs Capitalized Subsequent to Acquisition**(3)** | Gross Amount at Which Carried As of December 31, 2023 | Accumulated Depreciation**(5)** | Year Constructed**(6)** | Year Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | State | Land and improvements**(1)** | Buildings and Improvements**(2)** | Land and improvements | Buildings and Improvements | Total**(4)** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3070 | Lexington | MA | — | 14,013 | 17,083 | (269) | 14,013 | 16,814 | 30,827 | (2,534) | 1974/2012 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3071 | Lexington | MA | — | 14,930 | 16,677 | (359) | 14,930 | 16,318 | 31,248 | (2,236) | 1970/2012 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3072 | Lexington | MA | — | 34,598 | 43,032 | (288) | 34,598 | 42,744 | 77,342 | (7,547) | 1967/2013 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3073 | Lexington | MA | — | 37,050 | 44,647 | 144 | 37,050 | 44,791 | 81,841 | (8,051) | 2017 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3093 | Waltham | MA | — | 47,792 | 275,556 | 18,351 | 47,792 | 293,907 | 341,699 | (38,172) | 2018 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9999 | Denton | TX | — | 100 | — | — | 100 | — | 100 | — | — | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 464 | Salt Lake City | UT | — | 630 | 6,921 | 2,563 | 630 | 9,484 | 10,114 | (5,812) | 1996 | 2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 465 | Salt Lake City | UT | — | 125 | 6,368 | 68 | 125 | 6,436 | 6,561 | (3,267) | 1999 | 2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 466 | Salt Lake City | UT | — | — | 14,614 | (1,401) | — | 13,213 | 13,213 | (5,371) | 2002 | 2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1593 | Salt Lake City | UT | — | — | 23,998 | 250 | — | 24,248 | 24,248 | (9,774) | 2010 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | — | $ | 1,936,228 | $ | 3,238,815 | $ | 3,654,501 | $ | 1,939,357 | $ | 6,890,187 | $ | 8,829,544 | $ | (1,444,864) |
| Encumbrances at December 31, 2023 | Initial Cost to Company | Costs Capitalized Subsequent to Acquisition**(3)** | Gross Amount at Which Carried As of December 31, 2023 | Accumulated Depreciation**(5)** | Year Constructed**(6)** | Year Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | State | Land and improvements**(1)** | Buildings and Improvements**(2)** | Land and improvements | Buildings and Improvements | Total**(4)** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient medical | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 638 | Anchorage | AK | $ | — | $ | 1,456 | $ | 10,650 | $ | 10,727 | $ | 1,456 | $ | 21,377 | $ | 22,833 | $ | (9,272) | 1993/2014 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3026 | Bentonville | AR | — | 912 | 21,724 | 658 | 912 | 22,382 | 23,294 | (1,712) | 2003 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 126 | Sherwood | AR | — | 709 | 9,604 | 208 | 709 | 9,812 | 10,521 | (7,007) | 1990 | 1989 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2572 | Springdale | AR | — | — | 27,714 | — | — | 27,714 | 27,714 | (6,413) | 1995 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 520 | Chandler | AZ | — | 3,669 | 13,503 | 6,374 | 4,013 | 19,533 | 23,546 | (9,353) | 2005 | 2002 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 113 | Glendale | AZ | — | 1,565 | 7,050 | 175 | 1,565 | 7,225 | 8,790 | (5,317) | 1989 | 1988 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2040 | Mesa | AZ | — | — | 17,314 | 3,047 | — | 20,361 | 20,361 | (4,856) | 2007 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1066 | Scottsdale | AZ | — | 5,115 | 14,064 | 5,912 | 4,888 | 20,203 | 25,091 | (8,153) | 1999 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | Scottsdale | AZ | — | — | 12,312 | 4,763 | — | 17,075 | 17,075 | (7,205) | 1984 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | Scottsdale | AZ | — | — | 9,179 | 3,033 | — | 12,212 | 12,212 | (4,579) | 1996 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | Scottsdale | AZ | — | — | 6,398 | 1,818 | — | 8,216 | 8,216 | (3,614) | 2000 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | Scottsdale | AZ | — | — | 9,522 | 1,163 | 32 | 10,653 | 10,685 | (4,712) | 2007 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | Scottsdale | AZ | — | — | 4,102 | 2,451 | — | 6,553 | 6,553 | (2,764) | 1981 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | Scottsdale | AZ | — | — | 3,655 | 2,031 | — | 5,686 | 5,686 | (2,734) | 1992 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2027 | Scottsdale | AZ | — | — | 7,168 | 2,119 | — | 9,287 | 9,287 | (4,289) | 1995 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2028 | Scottsdale | AZ | — | — | 6,659 | 5,065 | — | 11,724 | 11,724 | (5,306) | 1998 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2696 | Scottsdale | AZ | — | 10,151 | 14,925 | 3,195 | 10,211 | 18,060 | 28,271 | (5,217) | 1998 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1041 | Brentwood | CA | — | — | 30,864 | 9,237 | 183 | 39,918 | 40,101 | (14,995) | 2004 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1200 | Encino | CA | — | 6,151 | 10,438 | 6,043 | 6,388 | 16,244 | 22,632 | (8,073) | 1973 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1038 | Fresno | CA | — | 3,652 | 29,113 | 21,935 | 3,652 | 51,048 | 54,700 | (23,741) | 1984 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 436 | Murrieta | CA | — | 400 | 9,266 | 2,855 | 608 | 11,913 | 12,521 | (7,909) | 1991 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 239 | Poway | CA | — | 2,700 | 10,839 | 3,172 | 2,944 | 13,767 | 16,711 | (8,922) | 1990 | 1997 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2654 | Riverside | CA | — | 2,758 | 9,908 | 529 | 2,266 | 10,929 | 13,195 | (2,233) | 2008 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 318 | Sacramento | CA | — | 2,860 | 37,566 | 24,613 | 2,911 | 62,128 | 65,039 | (26,629) | 1989/2016 | 1998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2404 | Sacramento | CA | — | 1,268 | 5,109 | 1,652 | 1,299 | 6,730 | 8,029 | (2,581) | 1999 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 421 | San Diego | CA | — | 2,910 | 19,984 | 15,146 | 2,964 | 35,076 | 38,040 | (17,632) | 1986/2013 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 564 | San Jose | CA | — | 1,935 | 1,728 | 2,213 | 1,935 | 3,941 | 5,876 | (1,596) | 1968 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 565 | San Jose | CA | — | 1,460 | 7,672 | 2,175 | 1,492 | 9,815 | 11,307 | (4,641) | 1995 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 659 | Los Gatos | CA | — | 1,718 | 3,124 | 1,515 | 1,796 | 4,561 | 6,357 | (2,028) | 1995 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 439 | Valencia | CA | — | 2,300 | 6,967 | 3,080 | 2,314 | 10,033 | 12,347 | (6,726) | 1990 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 440 | West Hills | CA | — | 2,100 | 11,595 | 11,851 | 2,203 | 23,343 | 25,546 | (8,502) | 1992/2023 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3008 | West Hills | CA | 12,093 | 5,795 | 13,933 | 2,897 | 5,823 | 16,802 | 22,625 | (1,645) | 1965 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 728 | Aurora | CO | — | — | 8,764 | 1,620 | — | 10,384 | 10,384 | (3,927) | 2005 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1196 | Aurora | CO | — | 210 | 12,362 | 6,172 | 210 | 18,534 | 18,744 | (7,855) | 1981/2018 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1197 | Aurora | CO | — | 200 | 8,414 | 5,673 | 285 | 14,002 | 14,287 | (6,527) | 1994/2018 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 127 | Colorado Springs | CO | — | 690 | 8,338 | 367 | 690 | 8,705 | 9,395 | (6,071) | 1990 | 1989 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 882 | Colorado Springs | CO | — | — | 12,933 | 9,106 | — | 22,039 | 22,039 | (10,586) | 2007 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1199 | Denver | CO | — | 493 | 7,897 | 1,789 | 604 | 9,575 | 10,179 | (5,226) | 1993 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 808 | Englewood | CO | — | — | 8,616 | 8,886 | — | 17,502 | 17,502 | (9,595) | 1981 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 809 | Englewood | CO | — | — | 8,449 | 19,042 | — | 27,491 | 27,491 | (6,442) | 1990 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 810 | Englewood | CO | — | — | 8,040 | 15,564 | — | 23,604 | 23,604 | (9,606) | 1989 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 811 | Englewood | CO | — | — | 8,472 | 11,904 | — | 20,376 | 20,376 | (7,895) | 1993/2020 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2658 | Highlands Ranch | CO | — | 1,637 | 10,063 | 95 | 1,732 | 10,063 | 11,795 | (2,334) | 2015 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 812 | Littleton | CO | — | — | 4,562 | 2,775 | 177 | 7,160 | 7,337 | (3,465) | 1987 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 813 | Littleton | CO | — | — | 4,926 | 2,072 | 246 | 6,752 | 6,998 | (3,092) | 1990 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 570 | Lone Tree | CO | — | — | — | 22,171 | — | 22,171 | 22,171 | (10,271) | 2004 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 666 | Lone Tree | CO | — | — | 23,274 | 3,843 | 17 | 27,100 | 27,117 | (12,486) | 2003 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2233 | Lone Tree | CO | — | — | 6,734 | 34,696 | — | 41,430 | 41,430 | (11,074) | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2965 | Aurora | CO | — | — | — | 2,251 | — | 2,251 | 2,251 | — | — | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3000 | Lone Tree | CO | — | 4,393 | 31,643 | 9,516 | 4,552 | 41,000 | 45,552 | (3,772) | 2020 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 510 | Thornton | CO | — | 236 | 10,206 | 13,728 | 455 | 23,715 | 24,170 | (8,016) | 2001/2021 | 2002 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 434 | Atlantis | FL | — | — | 2,027 | 171 | — | 2,198 | 2,198 | (1,493) | 1997 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 435 | Atlantis | FL | — | — | 2,000 | 608 | — | 2,608 | 2,608 | (1,568) | 1997 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 602 | Atlantis | FL | — | 455 | 2,231 | 744 | 455 | 2,975 | 3,430 | (1,357) | 1984 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2963 | Brooksville | FL | — | — | — | 11,558 | — | 11,558 | 11,558 | (1,526) | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 604 | Englewood | FL | — | 170 | 1,134 | 1,021 | 197 | 2,128 | 2,325 | (823) | 1986 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2962 | Orange Park | FL | — | — | — | 17,657 | — | 17,657 | 17,657 | (1,571) | 2022 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 609 | Kissimmee | FL | — | 788 | 174 | 1,135 | 788 | 1,309 | 2,097 | (655) | 1978 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 610 | Kissimmee | FL | — | 481 | 347 | 258 | 488 | 598 | 1,086 | (336) | 1978 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 671 | Kissimmee | FL | — | — | 7,574 | 818 | — | 8,392 | 8,392 | (3,727) | 1998 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 603 | Lake Worth | FL | — | 1,507 | 2,894 | 534 | 1,507 | 3,428 | 4,935 | (1,459) | 1997 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 612 | Margate | FL | — | 1,553 | 6,898 | 2,984 | 1,553 | 9,882 | 11,435 | (4,880) | 1994 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 613 | Miami | FL | — | 4,392 | 11,841 | 11,366 | 4,454 | 23,145 | 27,599 | (8,513) | 1995/2020 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2202 | Miami | FL | — | — | 13,123 | 10,907 | — | 24,030 | 24,030 | (10,231) | 1973 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2203 | Miami | FL | — | — | 8,877 | 4,890 | — | 13,767 | 13,767 | (5,359) | 1986 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1067 | Milton | FL | — | — | 8,566 | 1,662 | — | 10,228 | 10,228 | (4,057) | 2003 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2577 | Naples | FL | — | — | 29,186 | 1,805 | — | 30,991 | 30,991 | (6,953) | 1999 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2578 | Naples | FL | — | — | 18,819 | 667 | — | 19,486 | 19,486 | (3,709) | 2007 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2964 | Okeechobee | FL | — | — | — | 16,951 | — | 16,951 | 16,951 | (1,266) | 2022 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 563 | Orlando | FL | — | 2,144 | 5,136 | 13,507 | 12,022 | 8,765 | 20,787 | (6,599) | 1985 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 833 | Pace | FL | — | — | 10,309 | 1,628 | 28 | 11,909 | 11,937 | (4,541) | 2005 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 834 | Pensacola | FL | — | — | 11,166 | 428 | — | 11,594 | 11,594 | (4,506) | 2005 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 673 | Plantation | FL | — | 1,091 | 7,176 | 2,623 | 1,091 | 9,799 | 10,890 | (4,461) | 2001 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 674 | Plantation | FL | — | — | 8,273 | 1,560 | — | 9,833 | 9,833 | (1,042) | 2015 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2579 | Punta Gorda | FL | — | — | 9,379 | — | — | 9,379 | 9,379 | (1,957) | 2006 | 2016 |
| Encumbrances at December 31, 2023 | Initial Cost to Company | Costs Capitalized Subsequent to Acquisition**(3)** | Gross Amount at Which Carried As of December 31, 2023 | Accumulated Depreciation**(5)** | Year Constructed**(6)** | Year Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | State | Land and improvements**(1)** | Buildings and Improvements**(2)** | Land and improvements | Buildings and Improvements | Total**(4)** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2833 | St. Petersburg | FL | — | — | 13,754 | 10,299 | — | 24,053 | 24,053 | (9,609) | 1995/2019 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 887 | Atlanta | GA | — | 4,300 | 13,690 | (1,800) | 4,300 | 11,890 | 16,190 | (10,007) | 1966/1996 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3214 | Savannah | GA | — | — | — | 10,178 | — | 10,178 | 10,178 | — | — | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2576 | Statesboro | GA | — | — | 10,234 | 1,430 | — | 11,664 | 11,664 | (2,973) | 1999 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3006 | Arlington Heights | IL | 4,861 | 3,011 | 9,651 | 1,857 | 3,187 | 11,332 | 14,519 | (1,299) | 1975/2013 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2702 | Bolingbrook | IL | — | — | 21,237 | 3,884 | — | 25,121 | 25,121 | (3,025) | 2008 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3004 | Highland Park | IL | 5,853 | 2,767 | 11,495 | 572 | 2,767 | 12,067 | 14,834 | (1,226) | 2008 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3005 | Lockport | IL | 11,011 | 3,106 | 22,645 | — | 3,106 | 22,645 | 25,751 | (2,256) | 2010 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1065 | Marion | IL | — | 99 | 11,538 | 2,005 | 100 | 13,542 | 13,642 | (5,978) | 2002 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2719 | Marion | IL | — | — | — | 5,098 | — | 5,098 | 5,098 | (452) | 2021 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2697 | Indianapolis | IN | — | — | 59,746 | 954 | — | 60,700 | 60,700 | (5,797) | 2002 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2699 | Indianapolis | IN | — | — | 23,211 | 737 | — | 23,948 | 23,948 | (2,364) | 2002 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2698 | Mooresville | IN | — | — | 20,646 | 922 | — | 21,568 | 21,568 | (2,080) | 2004 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1057 | Newburgh | IN | — | — | 14,019 | 4,149 | — | 18,168 | 18,168 | (8,511) | 2005 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2700 | Zionsville | IN | — | 2,969 | 7,281 | 804 | 3,040 | 8,014 | 11,054 | (1,204) | 2005 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2039 | Kansas City | KS | — | 440 | 2,173 | 390 | 440 | 2,563 | 3,003 | (740) | 2006 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 112 | Overland Park | KS | — | 2,316 | 10,681 | 116 | 2,316 | 10,797 | 13,113 | (8,176) | 1989 | 1988 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2043 | Overland Park | KS | — | — | 7,668 | 2,000 | — | 9,668 | 9,668 | (2,732) | 2009 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3062 | Overland Park | KS | — | 872 | 11,813 | 59 | 992 | 11,752 | 12,744 | (2,570) | 2007 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 483 | Wichita | KS | — | 530 | 3,341 | 437 | 605 | 3,703 | 4,308 | (1,738) | 2000 | 2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3018 | Wichita | KS | — | 3,946 | 39,795 | — | 3,946 | 39,795 | 43,741 | (3,933) | 1973/2017 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1064 | Lexington | KY | — | — | 12,726 | 2,213 | — | 14,939 | 14,939 | (6,642) | 2003 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 735 | Louisville | KY | — | 936 | 8,426 | 13,840 | 661 | 22,541 | 23,202 | (12,657) | 1971/2019 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 737 | Louisville | KY | — | 835 | 27,627 | 7,477 | 560 | 35,379 | 35,939 | (16,906) | 2002 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 738 | Louisville | KY | — | 780 | 8,582 | 4,544 | 585 | 13,321 | 13,906 | (10,521) | 1978 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 739 | Louisville | KY | — | 826 | 13,814 | 3,542 | 602 | 17,580 | 18,182 | (7,444) | 2003 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2834 | Louisville | KY | — | 2,983 | 13,171 | 5,433 | 2,983 | 18,604 | 21,587 | (10,498) | 1990 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1945 | Louisville | KY | — | 3,255 | 28,644 | 2,678 | 3,365 | 31,212 | 34,577 | (13,208) | 2009 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1946 | Louisville | KY | — | 430 | 6,125 | 230 | 430 | 6,355 | 6,785 | (2,769) | 2002 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2237 | Louisville | KY | — | 1,519 | 15,386 | 7,130 | 1,672 | 22,363 | 24,035 | (8,330) | 1991 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2238 | Louisville | KY | — | 1,334 | 12,172 | 3,049 | 1,558 | 14,997 | 16,555 | (5,429) | 1996 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2239 | Louisville | KY | — | 1,644 | 10,832 | 9,879 | 2,043 | 20,312 | 22,355 | (7,588) | 1988 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3023 | Covington | LA | — | 9,490 | 21,918 | 128 | 9,507 | 22,029 | 31,536 | (2,254) | 2014 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3121 | Cambridge | MA | — | 40,663 | 23,102 | — | 40,663 | 23,102 | 63,765 | (1,776) | 1983 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1213 | Ellicott City | MD | — | 1,115 | 3,206 | 3,013 | 1,357 | 5,977 | 7,334 | (2,657) | 1988 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1052 | Towson | MD | — | — | 14,233 | 1,231 | — | 15,464 | 15,464 | (6,004) | 2005 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2650 | Biddeford | ME | — | 1,341 | 17,376 | 388 | 1,341 | 17,764 | 19,105 | (4,251) | 2007 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3002 | Burnsville | MN | 7,737 | 2,801 | 17,779 | 1,151 | 2,861 | 18,870 | 21,731 | (3,424) | 1988 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3003 | Burnsville | MN | 5,158 | 516 | 13,200 | 462 | 533 | 13,645 | 14,178 | (2,225) | 1992 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3009 | Burnsville | MN | 19,046 | 4,640 | 38,064 | 333 | 4,664 | 38,373 | 43,037 | (3,990) | 2007 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 240 | Minneapolis | MN | — | 117 | 13,213 | 5,337 | 117 | 18,550 | 18,667 | (11,776) | 1986 | 1997 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 300 | Minneapolis | MN | — | 160 | 10,131 | 5,086 | 214 | 15,163 | 15,377 | (9,547) | 1987 | 1998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2703 | Columbia | MO | — | 4,141 | 20,364 | — | 4,141 | 20,364 | 24,505 | (2,696) | 1997 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2032 | Independence | MO | — | — | 48,025 | 1,872 | — | 49,897 | 49,897 | (12,858) | 2006 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2863 | Lee's Summit | MO | — | — | — | 16,470 | — | 16,470 | 16,470 | (2,633) | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1078 | Flowood | MS | — | — | 8,413 | 1,472 | — | 9,885 | 9,885 | (4,097) | 2003 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1059 | Jackson | MS | — | — | 8,868 | 668 | — | 9,536 | 9,536 | (4,090) | 2002 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1060 | Jackson | MS | — | — | 7,187 | 2,038 | — | 9,225 | 9,225 | (3,797) | 2005 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1068 | Omaha | NE | — | — | 16,243 | 2,667 | 24 | 18,886 | 18,910 | (8,250) | 2005 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2651 | Charlotte | NC | — | 1,032 | 6,196 | 253 | 1,032 | 6,449 | 7,481 | (1,252) | 2007 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2695 | Charlotte | NC | — | 844 | 5,021 | 266 | 844 | 5,287 | 6,131 | (960) | 2007 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2655 | Wilmington | NC | — | 1,949 | 12,244 | — | 1,949 | 12,244 | 14,193 | (2,749) | 2003 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2656 | Wilmington | NC | — | 2,071 | 11,592 | — | 2,071 | 11,592 | 13,663 | (2,575) | 2006 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2657 | Shallotte | NC | — | 918 | 3,609 | — | 918 | 3,609 | 4,527 | (1,106) | 2017 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2647 | Concord | NH | — | 1,961 | 23,516 | (614) | 1,032 | 23,831 | 24,863 | (3,577) | 2004 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2648 | Concord | NH | — | 815 | 8,902 | 172 | 408 | 9,481 | 9,889 | (2,073) | 2008 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2649 | Epsom | NH | — | 919 | 5,868 | (513) | 304 | 5,970 | 6,274 | (1,174) | 2010 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3011 | Cherry Hill | NJ | — | 5,235 | 21,731 | — | 5,235 | 21,731 | 26,966 | (2,695) | 2014 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3012 | Morristown | NJ | — | 21,703 | 32,517 | 5,472 | 21,703 | 37,989 | 59,692 | (4,413) | 1983/2013 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3013 | Morristown | NJ | — | 14,567 | 20,548 | 8,647 | 14,567 | 29,195 | 43,762 | (2,439) | 1990 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3014 | Morristown | NJ | — | 20,563 | 31,849 | 1,721 | 20,563 | 33,570 | 54,133 | (2,591) | 1981 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 729 | Albuquerque | NM | — | — | 5,380 | 1,944 | — | 7,324 | 7,324 | (2,828) | 2006 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 571 | Las Vegas | NV | — | — | — | 23,267 | — | 23,267 | 23,267 | (9,353) | 2004 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 660 | Las Vegas | NV | — | 1,121 | 4,363 | 9,560 | 1,147 | 13,897 | 15,044 | (4,967) | 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 | 12,799 | 1,724 | 16,389 | 18,113 | (6,718) | 1974/2018 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 664 | Las Vegas | NV | — | 1,172 | — | 633 | 1,805 | — | 1,805 | (433) | — | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 691 | Las Vegas | NV | — | 3,073 | 18,339 | 8,001 | 3,116 | 26,297 | 29,413 | (16,290) | 1989/2015 | 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2037 | Mesquite | NV | — | — | 5,559 | 988 | 34 | 6,513 | 6,547 | (2,148) | 2004 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 400 | Harrison | OH | — | — | 4,561 | 366 | — | 4,927 | 4,927 | (3,149) | 1995 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1054 | Durant | OK | — | 619 | 9,256 | 3,111 | 666 | 12,320 | 12,986 | (5,294) | 1998 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 817 | Owasso | OK | — | — | 6,582 | (443) | — | 6,139 | 6,139 | (2,789) | 2006 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 404 | Roseburg | OR | — | — | 5,707 | 895 | — | 6,602 | 6,602 | (3,892) | 1999 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3010 | Springfield | OR | 20,732 | — | 51,998 | 416 | — | 52,414 | 52,414 | (5,426) | 2011 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2570 | Limerick | PA | — | 925 | 20,072 | (119) | 755 | 20,123 | 20,878 | (5,075) | 1999 | 2016 |
| Encumbrances at December 31, 2023 | Initial Cost to Company | Costs Capitalized Subsequent to Acquisition**(3)** | Gross Amount at Which Carried As of December 31, 2023 | Accumulated Depreciation**(5)** | Year Constructed**(6)** | Year Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | State | Land and improvements**(1)** | Buildings and Improvements**(2)** | Land and improvements | Buildings and Improvements | Total**(4)** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2234 | Philadelphia | PA | — | 24,264 | 99,904 | 50,137 | 24,288 | 150,017 | 174,305 | (43,316) | 1973/2019 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2403 | Philadelphia | PA | — | 26,063 | 97,646 | 39,404 | 26,134 | 136,979 | 163,113 | (49,725) | 2000 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2571 | Wilkes-Barre | PA | — | — | 9,138 | — | — | 9,138 | 9,138 | (2,550) | 2001 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2694 | Anderson | SC | — | 405 | 1,211 | — | 405 | 1,211 | 1,616 | (352) | 2012 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2573 | Florence | SC | — | — | 12,090 | 90 | — | 12,180 | 12,180 | (2,712) | 1998 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2574 | Florence | SC | — | — | 12,190 | 87 | — | 12,277 | 12,277 | (2,729) | 1998 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2575 | Florence | SC | — | — | 11,243 | 56 | — | 11,299 | 11,299 | (3,076) | 1995 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2841 | Greenville | SC | — | 634 | 38,386 | 1,277 | 13 | 40,284 | 40,297 | (9,241) | 1991 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2842 | Greenville | SC | — | 794 | 41,293 | 211 | — | 42,298 | 42,298 | (9,320) | 1999 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2843 | Greenville | SC | — | 626 | 22,210 | (368) | — | 22,468 | 22,468 | (5,258) | 1996 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2844 | Greenville | SC | — | 806 | 18,889 | 259 | — | 19,954 | 19,954 | (4,349) | 1998 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2845 | Greenville | SC | — | 932 | 40,879 | (3,557) | — | 38,254 | 38,254 | (5,148) | 2005 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2846 | Greenville | SC | — | 896 | 38,486 | 205 | — | 39,587 | 39,587 | (8,339) | 2007 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2847 | Greenville | SC | — | 600 | 26,472 | 4,750 | — | 31,822 | 31,822 | (8,164) | 1996 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2850 | Greenville | SC | — | 211 | 6,503 | 153 | 211 | 6,656 | 6,867 | (1,920) | 2008 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2853 | Greenville | SC | — | 534 | 6,430 | (1,388) | — | 5,576 | 5,576 | (1,038) | 1998 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2854 | Greenville | SC | — | 824 | 13,645 | (512) | — | 13,957 | 13,957 | (3,785) | 1992 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2848 | Greer | SC | — | 318 | 5,816 | 97 | 318 | 5,913 | 6,231 | (1,512) | 2008 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2849 | Greer | SC | — | 319 | 5,836 | (777) | — | 5,378 | 5,378 | (734) | 2008 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2851 | Travelers Rest | SC | — | 498 | 1,015 | 3 | 299 | 1,217 | 1,516 | (611) | 1998 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2862 | Myrtle Beach | SC | — | — | — | 28,496 | — | 28,496 | 28,496 | (6,051) | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2865 | Brentwood | TN | — | — | — | 35,219 | 52 | 35,167 | 35,219 | (3,870) | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 624 | Hendersonville | TN | — | 256 | 1,530 | 2,383 | 256 | 3,913 | 4,169 | (1,991) | 1985 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 559 | Hermitage | TN | — | 830 | 5,036 | 13,157 | 837 | 18,186 | 19,023 | (6,882) | 1999/2019 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 561 | Hermitage | TN | — | 596 | 9,698 | 4,262 | 596 | 13,960 | 14,556 | (7,331) | 1993 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 562 | Hermitage | TN | — | 317 | 6,528 | 2,979 | 317 | 9,507 | 9,824 | (4,491) | 1994 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 625 | Nashville | TN | — | 955 | 14,289 | 7,675 | 955 | 21,964 | 22,919 | (9,756) | 2000 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 626 | Nashville | TN | — | 2,050 | 5,211 | 5,198 | 2,050 | 10,409 | 12,459 | (3,987) | 1987 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 627 | Nashville | TN | — | 1,007 | 181 | 986 | 1,113 | 1,061 | 2,174 | (555) | 1975 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 628 | Nashville | TN | — | 2,980 | 7,164 | 3,046 | 2,980 | 10,210 | 13,190 | (4,235) | 1988 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 630 | Nashville | TN | — | 515 | 848 | 339 | 515 | 1,187 | 1,702 | (536) | 1975 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 631 | Nashville | TN | — | 266 | 1,305 | 1,266 | 266 | 2,571 | 2,837 | (1,450) | 1980 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 632 | Nashville | TN | — | 827 | 7,642 | 3,034 | 827 | 10,676 | 11,503 | (5,283) | 1988 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 633 | Nashville | TN | — | 5,425 | 12,577 | 5,720 | 5,425 | 18,297 | 23,722 | (8,059) | 1971 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 634 | Nashville | TN | — | 3,818 | 15,185 | 12,266 | 3,818 | 27,451 | 31,269 | (11,240) | 1992 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 636 | Nashville | TN | — | 583 | 450 | 424 | 604 | 853 | 1,457 | (372) | 1974 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2967 | Nashville | TN | — | — | — | 52,503 | — | 52,503 | 52,503 | (4,519) | 2021 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2720 | Nashville | TN | — | 102 | 10,925 | 1,058 | 102 | 11,983 | 12,085 | (2,038) | 1986 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2611 | Allen | TX | — | 1,330 | 5,960 | 1,245 | 1,374 | 7,161 | 8,535 | (1,868) | 2004 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2612 | Allen | TX | — | 1,310 | 4,165 | 1,516 | 1,310 | 5,681 | 6,991 | (1,540) | 2005 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 573 | Arlington | TX | — | 769 | 12,355 | 26,097 | 769 | 38,452 | 39,221 | (8,657) | 1995 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2621 | Cedar Park | TX | — | 1,617 | 11,640 | 950 | 1,617 | 12,590 | 14,207 | (2,144) | 2007 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 576 | Conroe | TX | — | 324 | 4,842 | 4,171 | 324 | 9,013 | 9,337 | (3,998) | 1983 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 577 | Conroe | TX | — | 397 | 7,966 | 2,981 | 397 | 10,947 | 11,344 | (4,740) | 1995 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 578 | Conroe | TX | — | 388 | 7,975 | 2,576 | 388 | 10,551 | 10,939 | (4,587) | 1997/2012 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 579 | Conroe | TX | — | 188 | 3,618 | 1,045 | 188 | 4,663 | 4,851 | (2,423) | 1995 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 581 | Corpus Christi | TX | — | 717 | 8,181 | 4,253 | 717 | 12,434 | 13,151 | (5,699) | 1995 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 600 | Corpus Christi | TX | — | 328 | 3,210 | 1,913 | 328 | 5,123 | 5,451 | (2,851) | 1995 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 601 | Corpus Christi | TX | — | 313 | 1,771 | 2,014 | 325 | 3,773 | 4,098 | (1,886) | 1985 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2839 | Cypress | TX | — | — | — | 37,639 | 11 | 37,628 | 37,639 | (12,404) | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 582 | Dallas | TX | — | 1,664 | 6,785 | 4,342 | 1,718 | 11,073 | 12,791 | (5,040) | 1979 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1314 | Dallas | TX | — | 15,230 | 162,970 | 29,075 | 23,630 | 183,645 | 207,275 | (88,337) | 1974 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1315 | Dallas | TX | — | — | — | 4,083 | 17 | 4,066 | 4,083 | (1,663) | 1978 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1316 | Dallas | TX | — | — | — | 9,691 | 64 | 9,627 | 9,691 | (1,720) | 1985 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1317 | Dallas | TX | — | — | — | 12,061 | 166 | 11,895 | 12,061 | (2,256) | 1995 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1319 | Dallas | TX | — | 18,840 | 155,659 | 6,539 | 18,840 | 162,198 | 181,038 | (76,716) | 1974 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2721 | Dallas | TX | — | 31,707 | 2,000 | 347 | 31,707 | 2,347 | 34,054 | (1,998) | 1983 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3007 | Denton | TX | 5,654 | 2,298 | 9,502 | 97 | 2,338 | 9,559 | 11,897 | (1,298) | 2014 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3020 | Frisco | TX | — | — | 27,201 | 1,214 | — | 28,415 | 28,415 | (2,394) | 2004 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3021 | Frisco | TX | — | — | 26,181 | 2,186 | — | 28,367 | 28,367 | (2,700) | 2004 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 583 | Fort Worth | TX | — | 898 | 4,866 | 4,115 | 898 | 8,981 | 9,879 | (4,168) | 1995 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 805 | Fort Worth | TX | — | — | 2,481 | 1,316 | 45 | 3,752 | 3,797 | (2,458) | 1985 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 806 | Fort Worth | TX | — | — | 6,070 | 1,206 | 5 | 7,271 | 7,276 | (3,310) | 1985 | 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2619 | Fort Worth | TX | — | 1,180 | 13,432 | 1,910 | 1,180 | 15,342 | 16,522 | (2,149) | 2006 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2620 | Fort Worth | TX | — | 1,961 | 14,155 | 1,521 | 2,000 | 15,637 | 17,637 | (2,272) | 2005 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2982 | Fort Worth | TX | — | 2,720 | 6,225 | 5,959 | 2,719 | 12,185 | 14,904 | (3,194) | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1061 | Granbury | TX | — | — | 6,863 | 1,321 | — | 8,184 | 8,184 | (3,667) | 2001 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 430 | Houston | TX | — | 1,927 | 33,140 | 20,350 | 2,388 | 53,029 | 55,417 | (31,358) | 1985/2018 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 446 | Houston | TX | — | 2,200 | 19,585 | 13,593 | 2,936 | 32,442 | 35,378 | (23,431) | 1976/2018 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 589 | Houston | TX | — | 1,676 | 12,602 | 15,520 | 1,676 | 28,122 | 29,798 | (8,121) | 1985/2022 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 702 | Houston | TX | — | — | 7,414 | 2,570 | — | 9,984 | 9,984 | (4,628) | 2006 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1044 | Houston | TX | — | — | 4,838 | 6,971 | 1,321 | 10,488 | 11,809 | (3,602) | 2006 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2542 | Houston | TX | — | 304 | 17,764 | (304) | — | 17,764 | 17,764 | (4,314) | 1990 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2543 | Houston | TX | — | 116 | 6,555 | (116) | — | 6,555 | 6,555 | (1,857) | 1970 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2544 | Houston | TX | — | 312 | 12,094 | (312) | — | 12,094 | 12,094 | (3,427) | 1987 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2545 | Houston | TX | — | 316 | 13,931 | (300) | — | 13,947 | 13,947 | (2,960) | 2005 | 2015 |
| Encumbrances at December 31, 2023 | Initial Cost to Company | Costs Capitalized Subsequent to Acquisition**(3)** | Gross Amount at Which Carried As of December 31, 2023 | Accumulated Depreciation**(5)** | Year Constructed**(6)** | Year Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | State | Land and improvements**(1)** | Buildings and Improvements**(2)** | Land and improvements | Buildings and Improvements | Total**(4)** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2546 | Houston | TX | — | 408 | 18,332 | 740 | — | 19,480 | 19,480 | (6,233) | 1977 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2547 | Houston | TX | — | 470 | 18,197 | (250) | — | 18,417 | 18,417 | (5,156) | 1985 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2548 | Houston | TX | — | 313 | 7,036 | (140) | — | 7,209 | 7,209 | (2,392) | 1979 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2549 | Houston | TX | — | 530 | 22,711 | 68 | 530 | 22,779 | 23,309 | (4,740) | 2006 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2966 | Houston | TX | — | — | — | 39,448 | — | 39,448 | 39,448 | (2,576) | 2022 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 590 | Irving | TX | — | 828 | 6,160 | 5,455 | 828 | 11,615 | 12,443 | (4,835) | 1997 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 700 | Irving | TX | — | — | 8,550 | 3,091 | 8 | 11,633 | 11,641 | (5,109) | 2004 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1207 | Irving | TX | — | 1,955 | 12,793 | 4,699 | 2,032 | 17,415 | 19,447 | (6,471) | 2001 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2840 | Kingwood | TX | — | 3,035 | 28,373 | 464 | 3,422 | 28,450 | 31,872 | (6,005) | 2003 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 591 | Lewisville | TX | — | 561 | 8,043 | 1,102 | 561 | 9,145 | 9,706 | (4,487) | 1976 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 144 | Longview | TX | — | 102 | 7,998 | 988 | 102 | 8,986 | 9,088 | (5,735) | 1993 | 1992 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 143 | Lufkin | TX | — | 338 | 2,383 | 219 | 338 | 2,602 | 2,940 | (1,648) | 1993 | 1992 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 568 | McKinney | TX | — | 541 | 6,217 | 3,371 | 541 | 9,588 | 10,129 | (4,892) | 1999 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 569 | McKinney | TX | — | — | 636 | 8,319 | — | 8,955 | 8,955 | (4,506) | 2004 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3216 | McKinney | TX | — | — | — | 1,415 | — | 1,415 | 1,415 | — | — | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 596 | North Richland Hills | TX | — | 812 | 8,883 | 4,524 | 812 | 13,407 | 14,219 | (5,619) | 1999 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2048 | North Richland Hills | TX | — | 1,385 | 10,213 | 1,849 | 1,400 | 12,047 | 13,447 | (5,367) | 2007 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2835 | Pearland | TX | — | — | 4,014 | 4,238 | 29 | 8,223 | 8,252 | (3,217) | 2006 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2838 | Pearland | TX | — | — | — | 18,363 | — | 18,363 | 18,363 | (5,422) | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 597 | Plano | TX | — | 1,210 | 9,588 | 7,506 | 1,225 | 17,079 | 18,304 | (6,930) | 1997 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 672 | Plano | TX | — | 1,389 | 12,768 | 3,922 | 1,389 | 16,690 | 18,079 | (6,958) | 2004 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1384 | Plano | TX | — | 6,290 | 22,686 | 7,966 | 6,290 | 30,652 | 36,942 | (24,603) | 1997 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2653 | Rockwall | TX | — | 788 | 9,020 | 2 | 788 | 9,022 | 9,810 | (1,847) | 2015 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 815 | San Antonio | TX | — | — | 9,193 | 3,285 | 75 | 12,403 | 12,478 | (5,948) | 1997 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 816 | San Antonio | TX | 1,552 | — | 8,699 | 13,192 | 175 | 21,716 | 21,891 | (6,649) | 1992/2022 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2837 | San Antonio | TX | — | — | 26,191 | 4,115 | — | 30,306 | 30,306 | (12,352) | 2006 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2852 | Shenandoah | TX | — | — | — | 29,980 | — | 29,980 | 29,980 | (8,235) | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 598 | Sugar Land | TX | — | 1,078 | 5,158 | 3,261 | 1,164 | 8,333 | 9,497 | (3,579) | 1982 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 599 | Texas City | TX | — | — | 9,519 | 1,971 | — | 11,490 | 11,490 | (4,972) | 2003 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 152 | Victoria | TX | — | 125 | 8,977 | 535 | 125 | 9,512 | 9,637 | (5,842) | 1994 | 1992 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2198 | Webster | TX | — | 2,220 | 9,602 | 142 | 2,220 | 9,744 | 11,964 | (3,920) | 1991 | 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3024 | Webster | TX | — | 3,196 | 12,911 | (28) | 3,212 | 12,867 | 16,079 | (892) | 2007 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3025 | Webster | TX | — | 3,209 | 23,782 | 114 | 3,225 | 23,880 | 27,105 | (1,571) | 2007 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2550 | The Woodlands | TX | — | 115 | 5,141 | (115) | — | 5,141 | 5,141 | (1,249) | 1984 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2551 | The Woodlands | TX | — | 296 | 18,282 | (296) | — | 18,282 | 18,282 | (3,885) | 1997 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2552 | The Woodlands | TX | — | 374 | 25,125 | (374) | — | 25,125 | 25,125 | (4,746) | 2004 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3215 | Wylie | TX | — | 874 | 4,122 | (64) | 874 | 4,058 | 4,932 | (180) | 2005 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1592 | Bountiful | UT | — | 999 | 7,426 | 1,963 | 1,019 | 9,369 | 10,388 | (3,953) | 2005 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 169 | Bountiful | UT | — | 276 | 5,237 | 4,602 | 599 | 9,516 | 10,115 | (4,262) | 1995 | 1994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2035 | Draper | UT | 3,952 | — | 10,803 | 561 | — | 11,364 | 11,364 | (2,826) | 2010 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 469 | Kaysville | UT | — | 530 | 4,493 | 426 | 530 | 4,919 | 5,449 | (2,245) | 2001 | 2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 456 | Layton | UT | — | 371 | 7,073 | 2,191 | 401 | 9,234 | 9,635 | (5,132) | 1998 | 2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2042 | Layton | UT | — | — | 10,975 | 1,831 | 44 | 12,762 | 12,806 | (3,379) | 2006 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2864 | Washington Terrace | UT | — | — | — | 19,898 | — | 19,898 | 19,898 | (3,091) | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 357 | Orem | UT | — | 337 | 8,744 | 1,177 | 306 | 9,952 | 10,258 | (6,286) | 1998 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 353 | Salt Lake City | UT | — | 190 | 779 | 238 | 273 | 934 | 1,207 | (628) | 1991 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 354 | Salt Lake City | UT | — | 220 | 10,732 | 4,186 | 220 | 14,918 | 15,138 | (8,926) | 1999 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 355 | Salt Lake City | UT | — | 180 | 14,792 | 5,141 | 180 | 19,933 | 20,113 | (11,708) | 1993 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 467 | Salt Lake City | UT | — | 3,000 | 7,541 | 2,459 | 3,019 | 9,981 | 13,000 | (5,598) | 1998 | 2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 566 | Salt Lake City | UT | — | 509 | 4,044 | 3,763 | 509 | 7,807 | 8,316 | (3,555) | 1974 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2041 | Salt Lake City | UT | — | — | 12,326 | 877 | — | 13,203 | 13,203 | (3,406) | 2007 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2033 | Sandy | UT | — | 867 | 3,513 | 2,919 | 1,356 | 5,943 | 7,299 | (3,380) | 1989 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 351 | Washington Terrace | UT | — | — | 4,573 | 1,317 | 17 | 5,873 | 5,890 | (3,724) | 1989 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 352 | Washington Terrace | UT | — | — | 2,692 | 641 | 15 | 3,318 | 3,333 | (2,231) | 1990 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2034 | West Jordan | UT | — | — | 12,021 | (177) | — | 11,844 | 11,844 | (3,016) | 2006 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2036 | West Jordan | UT | — | — | 1,383 | 1,328 | — | 2,711 | 2,711 | (1,655) | 1982 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1208 | Fairfax | VA | — | 8,396 | 16,710 | 12,121 | 8,781 | 28,446 | 37,227 | (15,291) | 1974/2018 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2230 | Fredericksburg | VA | — | 1,101 | 8,570 | 156 | 1,113 | 8,714 | 9,827 | (2,308) | 2008 | 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3001 | Leesburg | VA | 10,217 | 3,549 | 24,059 | 4,826 | 3,549 | 28,885 | 32,434 | (3,912) | 2010 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3015 | Midlothian | VA | 12,688 | — | 21,442 | 10 | 59 | 21,393 | 21,452 | (1,653) | 2012 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3016 | Midlothian | VA | 11,994 | — | 20,610 | (137) | 32 | 20,441 | 20,473 | (1,766) | 2013 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3017 | Midlothian | VA | 13,878 | — | 22,531 | 176 | — | 22,707 | 22,707 | (2,846) | 2014 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 572 | Reston | VA | — | — | 11,902 | (864) | — | 11,038 | 11,038 | (5,515) | 2004 | 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 448 | Renton | WA | — | — | 18,724 | 3,750 | — | 22,474 | 22,474 | (13,933) | 1993 | 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 781 | Seattle | WA | — | — | 52,703 | 10,129 | — | 62,832 | 62,832 | (31,470) | 1994 | 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 782 | Seattle | WA | — | — | 24,382 | 22,413 | 104 | 46,691 | 46,795 | (16,953) | 1990/2022 | 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 783 | Seattle | WA | — | — | 5,625 | 1,607 | 211 | 7,021 | 7,232 | (6,247) | 1984 | 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 785 | Seattle | WA | — | — | 7,293 | 1,475 | — | 8,768 | 8,768 | (5,205) | 1982 | 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1385 | Seattle | WA | — | — | 45,027 | 17,489 | — | 62,516 | 62,516 | (26,972) | 1986/2019 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3022 | Seattle | WA | — | 35,624 | 4,176 | 1 | 35,625 | 4,176 | 39,801 | (1,898) | 1963/2012 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2038 | Evanston | WY | — | — | 4,601 | 1,204 | — | 5,805 | 5,805 | (1,953) | 2002 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 146,426 | $ | 529,287 | $ | 3,887,576 | $ | 1,467,286 | $ | 546,448 | $ | 5,337,701 | $ | 5,884,149 | $ | (1,796,189) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Encumbrances at December 31, 2023 | Initial Cost to Company | Costs Capitalized Subsequent to Acquisition**(3)** | Gross Amount at Which Carried As of December 31, 2023 | Accumulated Depreciation**(5)** | Year Constructed**(6)** | Year Acquired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | State | Land and improvements**(1)** | Buildings and Improvements**(2)** | Land and improvements | Buildings and Improvements | Total**(4)** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Continuing care retirement community | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3089 | Birmingham | AL | $ | — | $ | 6,193 | $ | 32,146 | $ | 6,411 | $ | 6,670 | $ | 38,080 | $ | 44,750 | $ | (7,612) | 1991 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3090 | Bradenton | FL | — | 5,496 | 95,671 | 27,694 | 6,228 | 122,633 | 128,861 | (21,444) | 1985 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2997 | Clearwater | FL | 66,436 | 6,680 | 132,521 | 20,619 | 7,195 | 152,625 | 159,820 | (21,252) | 1991 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3086 | Jacksonville | FL | — | 19,660 | 167,860 | 22,367 | 21,042 | 188,845 | 209,887 | (29,940) | 1989 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2996 | Leesburg | FL | — | 8,941 | 65,698 | 16,620 | 9,779 | 81,480 | 91,259 | (14,936) | 1990 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2995 | Port Charlotte | FL | — | 5,344 | 159,612 | 16,205 | 6,008 | 175,153 | 181,161 | (23,576) | 1987 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2998 | Seminole | FL | 43,235 | 14,080 | 77,485 | 13,228 | 15,030 | 89,763 | 104,793 | (11,367) | 1990 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3085 | Seminole | FL | — | 13,915 | 125,796 | 16,519 | 14,698 | 141,532 | 156,230 | (23,135) | 1982 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3092 | Sun City Center | FL | — | 25,254 | 175,535 | 21,862 | 26,460 | 196,191 | 222,651 | (36,004) | 1992 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3087 | The Villages | FL | — | 7,091 | 120,493 | 16,363 | 7,331 | 136,616 | 143,947 | (21,450) | 2009 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3084 | Holland | MI | — | 1,572 | 88,960 | 10,401 | 1,898 | 99,035 | 100,933 | (15,129) | 1991 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2991 | Coatesville | PA | — | 16,443 | 126,243 | 17,270 | 17,064 | 142,892 | 159,956 | (20,601) | 1998 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3080 | Haverford | PA | — | 16,461 | 108,816 | 24,097 | 16,461 | 132,913 | 149,374 | (52,714) | 1989 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3088 | Spring | TX | — | 3,210 | 30,085 | 11,821 | 3,524 | 41,592 | 45,116 | (5,695) | 2008 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3081 | Fort Belvoir | VA | — | 11,594 | 99,528 | 19,948 | 11,594 | 119,476 | 131,070 | (51,408) | 1990 | 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 109,671 | $ | 161,934 | $ | 1,606,449 | $ | 261,425 | $ | 170,982 | $ | 1,858,826 | $ | 2,029,808 | $ | (356,263) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total real estate assets held for sale | — | (9,125) | (10,213) | (103,849) | (9,154) | (114,033) | (123,187) | 5,365 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total, excluding held for sale | $ | 256,097 | $ | 2,618,324 | $ | 8,722,627 | $ | 5,279,363 | $ | 2,647,633 | $ | 13,972,681 | $ | 16,620,314 | $ | (3,591,951) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
_______________________________________
(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)Includes adjustments for disposals, casualty events, and costs capitalized subsequent to acquisition, net of incidental income, if applicable.
(4)At December 31, 2023, the tax basis of the Company’s net real estate assets is less than the reported amounts by $900 million.
(5)Buildings and improvements are depreciated over useful lives ranging up to approximately 50 years.
(6)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, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Real estate: | |||||||||||||||||
| Balances at beginning of year | $ | 16,211,621 | $ | 15,506,658 | $ | 13,528,893 | |||||||||||
| Acquisition of real estate and development and improvements | 754,225 | 1,102,593 | 2,157,539 | ||||||||||||||
| Sales and/or transfers to assets held for sale | (137,731) | (82,350) | (72,819) | ||||||||||||||
| Deconsolidation of real estate | — | (189,605) | — | ||||||||||||||
| Impairments | — | — | (21,294) | ||||||||||||||
| Other(1) | (207,801) | (125,675) | (85,661) | ||||||||||||||
| Balances at end of year | $ | 16,620,314 | $ | 16,211,621 | $ | 15,506,658 | |||||||||||
| Accumulated depreciation: | |||||||||||||||||
| Balances at beginning of year | $ | 3,188,138 | $ | 2,839,229 | $ | 2,409,135 | |||||||||||
| Depreciation expense | 609,461 | 575,125 | 548,063 | ||||||||||||||
| Sales and/or transfers to assets held for sale | (12,711) | (30,428) | (32,692) | ||||||||||||||
| Deconsolidation of real estate | — | (89,766) | — | ||||||||||||||
| Other(1) | (192,937) | (106,022) | (85,277) | ||||||||||||||
| Balances at end of year | $ | 3,591,951 | $ | 3,188,138 | $ | 2,839,229 |
_______________________________________
(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, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Real estate: | |||||||||||||||||
| Balances at beginning of year | $ | — | $ | — | $ | 2,930,566 | |||||||||||
| Acquisition of real estate and development and improvements | — | — | 8,238 | ||||||||||||||
| Sales and/or transfers to assets classified as discontinued operations | — | — | (2,929,713) | ||||||||||||||
| Impairments | — | — | (5,315) | ||||||||||||||
| Other | — | — | (3,776) | ||||||||||||||
| Balances at end of year | $ | — | $ | — | $ | — | |||||||||||
| Accumulated depreciation: | |||||||||||||||||
| Balances at beginning of year | $ | — | $ | — | $ | 615,708 | |||||||||||
| Sales and/or transfers to assets classified as discontinued operations | — | — | (615,708) | ||||||||||||||
| Balances at end of year | $ | — | $ | — | $ | — |
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 10 properties: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Multiple | Other | 4.0% + (SOFR + 10 bps) | Variable | 2/1/2024(1) | Interest only | $ | — | $ | 130,678 | $ | 128,027 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| First mortgages relating to 10 properties: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Multiple | Other | 7.0% + (SOFR + 11 bps) | Variable | 1/21/2024(2) | Interest only | — | 48,000 | 47,690 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | — | $ | 178,678 | $ | 175,717 | $ | — |
_______________________________________
(1)In February 2024, the loan reached its maturity. The Company provided a short-term extension to the borrower, and the Company and the borrower are currently negotiating long-term refinance and extension terms (see Note 7 to the Consolidated Financial Statements for additional information).
(2)In January 2024, this loan was refinanced with the Company. In connection with the refinance, the maturity date of the loan was extended to January 2025 (see Note 7 to the Consolidated Financial Statements for additional information).
| Year Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Reconciliation of mortgage loans | |||||||||||||||||
| Balance at beginning of year | $ | 341,749 | $ | 390,291 | $ | 157,572 | |||||||||||
| Additions: | |||||||||||||||||
| New mortgage loans | — | — | 310,338 | ||||||||||||||
| Draws and additions to existing mortgage loans | 11,602 | 5,525 | 9,370 | ||||||||||||||
| Total additions | 11,602 | 5,525 | 319,708 | ||||||||||||||
| Deductions: | |||||||||||||||||
| Principal repayments | (183,084) | (47,591) | (84,486) | ||||||||||||||
| Recoveries (reserves) for loan losses(1) | 5,450 | (6,476) | (2,503) | ||||||||||||||
| Total deductions | (177,634) | (54,067) | (86,989) | ||||||||||||||
| Balance at end of year | $ | 175,717 | $ | 341,749 | $ | 390,291 |
_______________________________________
(1)Excludes reserves and recoveries for expected loan losses associated with unfunded loan commitments which are included in accounts payable, accrued liabilities, and other liabilities on the Consolidated Balance Sheets.
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