filings.toolsItem 2. Properties
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Item 2. Properties
Our strategy is to own, operate, and develop high-quality real estate focused on healthcare discovery and delivery. In evaluating potential investments, we consider a multitude of factors, including:
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location, construction quality, age, condition, and design of the property;
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geographic area, proximity to other healthcare facilities, type of property, and demographic profile, including new competitive supply;
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whether the expected risk-adjusted return exceeds the incremental cost of capital;
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whether the rent or operating income provides a competitive market return to our investors;
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duration, rental rates, tenant and operator quality, and other attributes of in-place leases, including master lease structures and coverage;
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current and anticipated cash flow and its adequacy to meet our operational needs;
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availability of security such as letters of credit, security deposits, and guarantees;
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potential for capital appreciation;
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expertise and reputation of the tenant or operator;
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occupancy and demand for similar healthcare facilities in the same or nearby communities;
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availability of qualified operators or property managers and whether we can manage the property;
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potential for environmentally sustainable and/or resilient features of the property;
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potential alternative uses of the facilities;
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the regulatory and reimbursement environment in which the properties operate;
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tax laws related to REITs;
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prospects for liquidity through financing or refinancing; and
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our access to and cost of capital.
Properties
The following table summarizes our consolidated property investments as of and for the year ended December 31, 2025 (square feet and dollars in thousands):
| Facility Location | Number of Facilities | Capacity**(1)** | Gross Asset Value**(2)** | Real Estate Revenues**(3)** | Operating Expenses | |||||||||||||||||||||||||||
| Outpatient medical: | (Sq. Ft.) | |||||||||||||||||||||||||||||||
| Texas | 94 | 9,067 | $ | 2,040,402 | $ | 323,402 | $ | (111,949) | ||||||||||||||||||||||||
| Florida | 35 | 2,027 | 540,870 | 80,411 | (27,457) | |||||||||||||||||||||||||||
| Tennessee | 25 | 2,303 | 454,341 | 77,128 | (25,850) | |||||||||||||||||||||||||||
| Colorado | 23 | 1,516 | 441,756 | 61,171 | (32,851) | |||||||||||||||||||||||||||
| Georgia | 15 | 1,386 | 444,275 | 58,944 | (19,593) | |||||||||||||||||||||||||||
| Kentucky | 21 | 2,014 | 380,975 | 68,314 | (22,151) | |||||||||||||||||||||||||||
| Other (35 states) | 273 | 16,269 | 4,564,352 | 604,135 | (184,290) | |||||||||||||||||||||||||||
| Total outpatient medical | 486 | 34,582 | $ | 8,866,971 | $ | 1,273,505 | $ | (424,141) | ||||||||||||||||||||||||
| Lab: | (Sq. Ft.) | |||||||||||||||||||||||||||||||
| California | 112 | 8,532 | $ | 6,481,573 | $ | 596,098 | $ | (171,358) | ||||||||||||||||||||||||
| Massachusetts | 19 | 2,613 | 2,902,117 | 255,071 | (72,528) | |||||||||||||||||||||||||||
| Other (1 state) | 4 | — | 100 | 8,851 | (1,273) | |||||||||||||||||||||||||||
| Total lab | 135 | 11,145 | $ | 9,383,790 | $ | 860,020 | $ | (245,159) | ||||||||||||||||||||||||
| Senior housing: | (Units) | |||||||||||||||||||||||||||||||
| Florida | 9 | 4,780 | $ | 1,477,423 | $ | 388,390 | $ | (290,469) | ||||||||||||||||||||||||
| Other (5 states) | 6 | 2,287 | 674,697 | 215,599 | (157,385) | |||||||||||||||||||||||||||
| Total senior housing | 15 | 7,067 | $ | 2,152,120 | $ | 603,989 | $ | (447,854) | ||||||||||||||||||||||||
| Other non-reportable: | (Sq. Ft.) | |||||||||||||||||||||||||||||||
| Other (3 states) | 3 | 1,025 | $ | 208,657 | $ | 23,218 | $ | (11,945) | ||||||||||||||||||||||||
| Total other non-reportable segments | 3 | 1,025 | $ | 208,657 | $ | 23,218 | $ | (11,945) | ||||||||||||||||||||||||
| Total properties | 639 | $ | 20,611,538 | $ | 2,760,732 | $ | (1,129,099) |
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(1)Excludes capacity associated with developments.
(2)Represents gross real estate which includes the carrying amount of real estate after adding back accumulated depreciation. Excludes gross real estate of $158 million related to six lab buildings and two outpatient medical buildings classified as held for sale.
(3)Represents the combined amount of rental and related revenues and resident fees and services.
Occupancy and Annual Rent Trends
The following table summarizes occupancy and average annual rent trends for our consolidated properties for the years ended December 31 (average occupied square feet in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Outpatient medical: | |||||||||||||||||||||||||||||
| Average occupancy percentage(1) | 92 | % | 92 | % | 90 | % | |||||||||||||||||||||||
| Average annual rent per square foot(2) | $ | 38 | $ | 36 | $ | 34 | |||||||||||||||||||||||
| Average occupied square feet | 32,396 | 31,767 | 20,772 | ||||||||||||||||||||||||||
| Lab: | |||||||||||||||||||||||||||||
| Average occupancy percentage(1) | 95 | % | 96 | % | 98 | % | |||||||||||||||||||||||
| Average annual rent per square foot(2) | $ | 90 | $ | 87 | $ | 82 | |||||||||||||||||||||||
| Average occupied square feet | 8,860 | 9,404 | 10,334 | ||||||||||||||||||||||||||
| Senior housing: | |||||||||||||||||||||||||||||
| Average occupancy percentage(1) | 87 | % | 85 | % | 84 | % | |||||||||||||||||||||||
| Average annual rent per occupied unit(3) | $ | 98,776 | $ | 94,103 | $ | 88,524 | |||||||||||||||||||||||
| Average occupied units | 6,115 | 6,041 | 5,960 | ||||||||||||||||||||||||||
| Other non-reportable: | |||||||||||||||||||||||||||||
| Average occupancy percentage(1) | 81 | % | 85 | % | 81 | % | |||||||||||||||||||||||
| Average annual rent per square foot(2) | $ | 34 | $ | 31 | $ | 38 | |||||||||||||||||||||||
| Average occupied square feet | 667 | 664 | 565 |
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(1)Average occupancy excludes any of the following: (i) developments, (ii) significant redevelopments, (iii) newly completed properties under lease-up, and (iv) properties held for sale.
(2)Presented as a ratio of revenues comprised of rental and related revenues divided by average occupied square feet and annualized for acquisitions for the year in which they occurred. Average annual rent excludes termination fees and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).
(3)Presented as a ratio of revenues comprised of resident fees and services and government grant income divided by average occupied units of the facilities.
Tenant Lease Expirations
The following table shows tenant lease expirations for the next 10 years and thereafter at our consolidated properties, assuming that none of the tenants exercise any of their renewal or purchase options, and excludes properties in our senior housing segment and assets held for sale as of December 31, 2025 (dollars and square feet in thousands):
| Expiration Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment | Total | 2026**(1)** | 2027 | 2028 | 2029 | 2030 | 2031 | 3032 | 2033 | 2034 | 2035 | Thereafter | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient medical: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Square feet | 31,619 | 3,531 | 3,017 | 3,956 | 3,104 | 2,966 | 2,952 | 2,805 | 1,545 | 1,530 | 1,745 | 4,468 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Base rent(2) | $ | 845,505 | $ | 104,318 | $ | 86,880 | $ | 99,113 | $ | 91,240 | $ | 83,284 | $ | 75,200 | $ | 68,311 | $ | 45,331 | $ | 40,124 | $ | 34,624 | $ | 117,080 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| % of segment base rent | 100 | 12 | 10 | 12 | 11 | 10 | 9 | 8 | 5 | 5 | 4 | 14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lab: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Square feet | 9,289 | 552 | 764 | 578 | 835 | 1,195 | 1,228 | 817 | 539 | 984 | 688 | 1,109 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Base rent(2) | $ | 605,552 | $ | 36,221 | $ | 48,486 | $ | 32,982 | $ | 53,749 | $ | 85,643 | $ | 82,416 | $ | 58,776 | $ | 42,304 | $ | 72,830 | $ | 39,209 | $ | 52,936 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| % of segment base rent | 100 | 6 | 8 | 5 | 9 | 14 | 14 | 10 | 7 | 12 | 6 | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-reportable: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Square feet | 763 | 164 | 57 | 47 | 91 | 106 | 4 | 85 | — | 66 | 11 | 132 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Base rent(2) | $ | 24,375 | $ | 7,076 | $ | 2,190 | $ | 1,205 | $ | 2,669 | $ | 3,371 | $ | 95 | $ | 3,652 | $ | — | $ | 1,617 | $ | 271 | $ | 2,229 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| % of segment base rent | 100 | 29 | 9 | 5 | 11 | 14 | — | 15 | — | 7 | 1 | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Base rent(2) | $ | 1,475,432 | $ | 147,615 | $ | 137,556 | $ | 133,300 | $ | 147,658 | $ | 172,298 | $ | 157,711 | $ | 130,739 | $ | 87,635 | $ | 114,571 | $ | 74,104 | $ | 172,245 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| % of total base rent | 100 | 9 | 9 | 9 | 10 | 12 | 11 | 9 | 6 | 8 | 5 | 12 |
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(1)Includes month-to-month leases.
(2)The most recent month’s (or subsequent month’s, if acquired in the most recent month) 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).
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