Item 1A. Risk Factors

We have described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and updated in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, the primary risk factors that could materially affect our business, financial condition, or future results. Such risk factors (as updated) continue to apply to our business, financial condition, and future results and are supplemented with the following risk factors:

Risks Related to the Mergers

The announcement and pendency of the Merger Agreement could have an adverse effect on our business.

On October 29, 2023, the Company and Physicians Realty Trust (“Physicians Realty”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Alpine Sub, LLC, a Maryland limited liability company and a wholly owned subsidiary of the Company (“Alpine Sub”), Alpine OP Sub, LLC, a Maryland limited liability company and a wholly owned subsidiary of Healthpeak OP (“Alpine OP Sub”), and Physicians Realty L.P., a Delaware limited partnership (the “Physicians Partnership”). The Merger Agreement provides for (a) the merger of Physicians Realty with and into Alpine Sub (the “Company Merger”), with Alpine Sub surviving as a wholly owned subsidiary of the Company (the “Company Surviving Entity”), (b) immediately following the effectiveness of the Company Merger, the contribution by the Company to Healthpeak OP, a Maryland limited liability company, of all of the outstanding equity interests in the Company Surviving Entity (the “Contribution”), and (c) immediately following the Contribution, the merger of the Physicians Partnership with and into Alpine OP Sub (the “Partnership Merger” and, together with the Company Merger, the “Mergers”), with Alpine OP Sub surviving as a wholly owned subsidiary of Healthpeak OP (the “Partnership Surviving Entity”).

The announcement and pendency of the Mergers could cause disruption in our business, including the potential loss or disruption of current and prospective commercial relationships due to the uncertainties about the Mergers. For example, some of our tenants, prospective tenants, or vendors may delay or defer decisions, which could negatively affect our revenues, earnings, cash flows, and expenses, regardless of whether the Mergers are completed. Similarly, our current and prospective employees may experience uncertainty about their future roles with the combined company following the Mergers, which may adversely affect our ability to attract, retain, and motivate current, prospective, and key personnel during the pendency of the Mergers.

The Merger Agreement generally requires us to use commercially reasonable efforts to operate our business in the ordinary course of business pending consummation of the Mergers, but includes certain contractual restrictions on the conduct of our business prior to completion of the Mergers, which may adversely affect our ability to raise capital or pursue other strategic actions, even if such actions would prove beneficial.

In addition, matters relating to the Mergers (including integration planning) will require substantial commitments of time and resources by our management, which could divert their time, resources, and attention that could otherwise have been devoted to other opportunities that may have been beneficial to us. Furthermore, there are certain inherent risks, costs, and uncertainties associated with integrating the businesses successfully, and as a result, the Company may not achieve all or any of the anticipated benefits of the Mergers. We have also incurred, and will continue to incur, significant non-recurring costs, expenses, and fees, and could in the future be exposed to unexpected costs, liabilities, and delays, in connection with the Mergers that we may be unable to recover.

The aforementioned risks, and adverse effects, of any disruption could be exacerbated by a delay in completion of the Mergers or termination of the Merger Agreement.

Completion of the Mergers is subject to the satisfaction or waiver of certain conditions.

Completion of the Mergers is subject to the satisfaction or waiver of certain conditions, including: (1) approval by the Company’s stockholders of the Parent Common Stock Issuance (as defined in the Merger Agreement) and the Parent Charter Amendment (as defined in the Merger Agreement) and approval by Physicians Realty’s shareholders of the Mergers; (2) the effectiveness of the registration statement on Form S-4 to be filed with the SEC by the Company and Physicians Realty in connection with the transactions contemplated by the Merger Agreement; (3) approval for listing on the New York Stock Exchange of the shares of Company common stock to be issued in the Mergers or reserved for issuance in connection therewith; (4) no temporary restraining order, preliminary or permanent injunction or other order, decree or judgment being in effect enjoining, preventing, restraining, making illegal, or otherwise prohibiting the consummation of the Mergers; (5) no law having been enacted, issued, entered, promulgated, or enforced by any governmental authority and is in effect which would have the effect of enjoining, preventing, restraining, making illegal, or otherwise prohibiting the consummation of the Mergers; (6) accuracy of each party’s representations, subject in most cases to materiality or Material Adverse Effect (as defined in the Merger Agreement) qualifications; (7) compliance in all material respects with each party’s covenants; (8) absence of a Material Adverse Effect on either the Company or Physicians Realty; (9) receipt by each of the Company and Physicians Realty of an opinion to the effect that the Company Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”); (10) receipt by the Company of an opinion that Physicians Realty qualifies as a real estate investment trust (“REIT”) under the Code and receipt by Physicians Realty of an opinion that the Company qualifies as a REIT under the Code; and (11) receipt by each party of customary officer’s certificates certifying the satisfaction of Physicians Realty and the Company’s respective closing conditions.

We cannot provide assurance that these conditions to completing the Mergers will be satisfied or waived, and accordingly, that the proposed Mergers will be completed on the timeline that we anticipate or at all. Failure to complete the Mergers could negatively affect our stock price and our future business and financial results.

Further, the Merger Agreement also contains certain customary termination rights for both parties, and we would be required to pay a Termination Fee (as defined in the Merger Agreement) to Physicians Realty in certain circumstances or if our stockholders do not approve the transaction.

Failure to complete the Mergers could negatively impact the stock prices and the future business and financial results of the Company.

If the Mergers are not completed, the ongoing business of the Company could be materially adversely affected and without realizing any of the benefits of having completed the Mergers, the Company will be subject to a variety of risks associated with the failure to complete the Mergers, including the following:

• the market price of the Company common stock could decline;

• the Company being required, under certain circumstances, to pay to Physicians Realty a termination fee depending on the circumstances and/or reimburse Physicians Realty’s reasonable expenses, as applicable;

• if the Merger Agreement is terminated and our Board of Directors seeks another business combination, the Company’s stockholders cannot be certain that the Company will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms that the Company and Physicians Realty have agreed to in the Merger Agreement;

• the Company may experience negative reactions from the financial markets or its tenants, property managers, or employees;

• the Company having to pay certain costs relating to the Mergers, such as legal, accounting, financial advisor, filing, printing, and mailing fees whether or not the Mergers are completed; and

• diversion of the Company’s management focus and resources from operational matters and other strategic opportunities while working to implement the Mergers.

If the Mergers are not completed, these risks could materially affect the business, financial results, and price of the common shares of the Company. In addition, if the Mergers are not completed, the Company could be subject to litigation related to any failure to complete the Mergers or related to any enforcement proceeding commenced against the Company to perform its obligations under the Merger Agreement. The materialization of any of these risks could adversely impact the Company’s ongoing business.

An adverse outcome in any litigation or other legal proceedings relating to the Merger Agreement could have a material adverse impact on our business and our ability to consummate the transactions contemplated by the Merger Agreement.

Transactions like the Mergers are frequently the subject of litigation or other legal proceedings, including actions alleging that either board of directors breached their respective duties to their stockholders by entering into the Merger Agreement, by failing to obtain a greater value in the transaction for their stockholders or otherwise. We believe that any such litigation or proceedings would be without merit, but there can be no assurance that they will not be brought. If litigation or other legal proceedings are brought against us or against our board in connection with the Merger Agreement, we will defend against it, but we might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on our business, results of operation, or financial position, including through the possible diversion of either company’s resources or distraction of key personnel.

The exchange ratio will not be adjusted in the event of any change in the share prices of either us or Physicians Realty.

As a result of the Mergers, and through a series of transactions, (i) each outstanding common share of Physicians Realty (other than Physicians Realty 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 (the “Merger Consideration”), without interest, plus cash in lieu of consideration for fractional shares, but subject to any withholding required under applicable tax laws, and (ii) each Partnership OP Unit (as defined in the Merger Agreement) will be converted into common units in the Partnership Surviving Entity equal to the Exchange Ratio. The Exchange Ratio will not be adjusted for changes in the market prices of either shares of our common stock or Physicians Realty’s common shares. Changes in the market price of Physicians Realty common shares prior to the effective time of the Mergers will affect the market value of the Merger Consideration that Physicians Realty shareholders will receive on the closing date of the Mergers. Share price changes may result from a variety of factors (many of which are beyond our or Physicians Realty’s control), including the following factors:

• market reaction to the announcement of the Mergers and the prospects of the combined company;

• changes in the respective businesses, operations, assets, liabilities, and prospects of us and Physicians Realty;

• changes in market assessments of the business, operations, financial position, and prospects of either company or the combined company;

• market assessments of the likelihood that the Mergers will be completed;

• interest rates, general market and economic conditions, and other factors generally affecting the market prices of our common stock and Physicians Realty’s common shares;

• federal, state and local legislation, governmental regulation, and legal developments in the businesses in which we and Physicians Realty operate; and

• other factors beyond the control of us and Physicians Realty, including those described or referred to in this “Risk Factors” section.

The market price of Physicians Realty common shares at the closing of the Mergers may vary from its price on the date the Merger Agreement was executed, on the date of the joint proxy statement/prospectus, and on the date of our special meeting. As a result, the market value of the Merger Consideration represented by the Exchange Ratio will also vary.

If the market price of shares of Company common stock increases between the date the Merger Agreement was signed, the date of the joint proxy statement/prospectus, or the date of our special meeting and the closing of the Mergers, Physicians Realty’s shareholders could receive shares of Company common stock that have a market value upon completion of the Mergers that is greater than the market value of such shares calculated pursuant to the Exchange Ratio on the date the Merger Agreement was signed, the date of the joint proxy statement/prospectus, or on the date of the special meeting, respectively. Alternatively, if the market price of shares of Company common stock declines between the date the Merger Agreement was signed, the date of the joint proxy statement/prospectus or the date of our special meeting and the closing of the Mergers, Physicians Realty’s shareholders could receive shares of Company common stock that have a market value upon completion of the Mergers that is less than the market value of such shares calculated pursuant to the Exchange Ratio on the date the Merger Agreement was signed, the date of the joint proxy statement/prospectus, or on the date of the special meeting, respectively.

If the Company Merger does not qualify as a reorganization, there may be adverse tax consequences.

The Company Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. It is a condition to the completion of the Mergers that the Company and Physicians Realty receive written opinions from their respective counsel to the effect that the Company Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. The foregoing opinions, however, are limited to the factual representations provided by the Company and Physicians Realty to counsel and the assumptions set forth therein and are not a guarantee that the Company Merger will, in fact, qualify as a reorganization. Furthermore, such opinions are not binding on the IRS. Neither the Company nor Physicians Realty has requested or plans to request a ruling from the IRS that the Company Merger qualifies as a reorganization. If the Company Merger were to fail to qualify as a reorganization, then each U.S. holder of Physicians Realty common shares generally would recognize gain or loss, as applicable, equal to the difference between (i) the sum of the fair market value of the shares of the Company common stock and cash in lieu of any fractional share of the Company common stock received by such holder in the Company Merger; and (ii) such holder’s adjusted tax basis in its Physicians Realty common shares. In addition, failure of the Company Merger to qualify as a reorganization may damage the Company’s reputation and have other adverse impacts on the Company.

Risks Related to the Combined Company Following the Mergers

The combined company expects to incur substantial expenses related to the Mergers.

The combined company expects to incur substantial expenses in connection with completing the Mergers and integrating the operations and systems of the Company with those of Physicians Realty. While the Company has assumed that a certain level of expenses would be incurred, there are a number of factors beyond its control that could affect the total amount or the timing of the combined company’s expenses relating to the completion of the Mergers and the combined company’s operations. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. As a result, the expenses associated with the Mergers could, particularly in the near term, reduce the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the operations of Physicians Realty following the completion of the Mergers.

Following the Mergers, the combined company may be unable to integrate the operations of the Company and Physicians Realty successfully and realize the anticipated synergies and other benefits of the Mergers or do so within the anticipated time frame.

The Mergers involve the combination of two companies that currently operate as independent public companies and their respective operating partnerships. The combined company is expected to benefit from the elimination of duplicative costs associated with supporting a public company platform and the leveraging of state-of-the-art technology and systems. However, the combined company will be required to devote significant management attention and resources to integrating the operations of the Company and Physicians Realty. Potential difficulties the combined company may encounter in the integration process include the following:

• the inability to successfully combine the operations of the Company and Physicians Realty, including the integration of employees, customer records and maintaining cybersecurity protections, in a manner that permits the combined company to achieve the cost savings anticipated to result from the Mergers, which would result in the anticipated benefits of the Mergers not being realized in the time frame currently anticipated or at all;

• the inability to dispose of assets or operations that the combined company desires to dispose of;

• the complexities associated with managing the combined businesses out of different locations and integrating personnel from the two companies;

• the failure to retain key employees of either of the two companies;

• potential unknown liabilities and unforeseen increased expenses, delays, or regulatory conditions associated with the Mergers; and

• performance shortfalls as a result of the diversion of management’s attention caused by completing the Mergers and integrating the companies’ operations.

For all these reasons, it is possible that the integration process could result in the distraction of the combined company’s management, the disruption of the combined company’s ongoing business, or inconsistencies in the combined company’s operations, services, standards, controls, procedures, and policies, any of which could adversely affect the ability of the combined company to maintain relationships with tenants, property managers, and employees or to achieve the anticipated benefits of the Mergers, or could otherwise adversely affect the business and financial results of the combined company.

The market price and trading volume of shares of the combined company common stock may be volatile.

Shares of the combined company’s common stock may experience significant price and volume fluctuations, and investors in shares of the combined company common stock may experience a decrease in the value of their shares, including decreases unrelated to the combined company’s operating performance or prospects. The Company and Physicians Realty cannot assure you that the market price of shares of the combined company common stock will not fluctuate or decline significantly in the future.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in the share price of their common stock. This type of litigation could result in substantial costs and divert the combined company’s management’s attention and resources, which could have a material adverse effect on the combined company’s cash flows, its ability to execute its business strategy and the combined company’s ability to make distributions to its stockholders.

The market price of shares of the combined company common stock may decline as a result of the Mergers.

The market price of shares of the combined company common stock may decline as a result of the Mergers if the combined company does not achieve the perceived benefits of the Mergers as rapidly or to the extent anticipated by financial or industry analysts, or the effect of the Mergers on the combined company’s financial results is not consistent with the expectations of financial or industry analysts.

In addition, upon consummation of the Mergers, the Company stockholders and Physicians Realty shareholders will own interests in a combined company operating an expanded business with a different mix of properties, risks, and liabilities. Current Company stockholders and Physicians Realty shareholders may not wish to continue to invest in the combined company, or for other reasons may wish to dispose of some or all of their shares of the combined company common stock. If, following the time the Company Merger becomes effective (“Company Merger Effective Time”), large amounts of the combined company common stock are sold, the price of the combined company common stock could decline.

The combined company may incur adverse tax consequences if the Company or Physicians Realty has failed or fails to qualify as a REIT for U.S. federal income tax purposes.

The combined company intends to continue operating in a manner that it believes will allow it to qualify as a REIT for U.S. federal income tax purposes under the Code following the Mergers. The closing of the Mergers is conditioned on the receipt by the Company of an opinion of Physicians Realty’s counsel to the effect that, commencing with Physicians Realty’s taxable year ended December 31, 2015 and through the Company Merger Effective Time, Physicians Realty has been organized and has operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and on the receipt by Physicians Realty of an opinion of the Company’s counsel to the effect that, commencing with the Company’s taxable year ended December 31, 2015, the Company has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and the Company’s proposed method of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year that includes the Company Merger Effective Time and future taxable years. The foregoing REIT opinions, however, are limited to the factual representations provided by the Company and Physicians Realty to counsel and the assumptions set forth therein, and are not a guarantee that the Company or Physicians Realty has, in fact, qualified, or that the combined company will continue to qualify, as a REIT. Moreover, such opinions are not binding on the IRS, and neither the Company nor Physicians Realty has requested or plans to request a ruling from the IRS that it or the combined company qualifies as a REIT. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The complexity of these provisions and of the applicable regulations (as in effect from time to time) of the U.S. Department of the Treasury under the Code is greater in the case of a REIT, like the Company and Physicians Realty, that holds assets through a partnership. The determination of various factual matters and circumstances not entirely within the Company’s and Physicians Realty’s control may affect their ability to qualify as REITs.

In order to qualify as a REIT, each of the Company and Physicians Realty must satisfy a number of requirements, including requirements regarding the ownership of its stock and the composition of its gross income and assets. Also, a REIT must make distributions to stockholders annually equal, in the aggregate, to at least 90% of its net taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.

If the Company or Physicians Realty (or, following the Mergers, the combined company) loses its REIT status, or is determined to have lost its REIT status in a prior year, it will face material tax consequences that would substantially reduce its cash available for distribution, including cash available to pay dividends to its stockholders, because:

• it would be subject to U.S. federal income tax on its net income at regular corporate rates for the years it did not qualify for taxation as a REIT (and, for such years, would not be allowed a deduction for dividends paid to stockholders in computing its taxable income);

• it could be subject to a federal alternative minimum tax and increased state and local taxes for such periods;

• unless it is entitled to relief under applicable statutory provisions, neither it nor any “successor” company (including, potentially, the combined company) could elect to be taxed as a REIT until the fifth taxable year following the year during which it was disqualified; and

• for five years following re-election of REIT status, upon a taxable disposition of an asset owned as of such re-election, it could be subject to corporate level tax with respect to any built-in gain inherent in such asset at the time of reelection.

Even if the Company (or, following the Mergers, the combined company) retains its REIT status, if Physicians Realty is determined to have lost its REIT status for a taxable year ending on or before the Company Merger, Physicians Realty would be subject to adverse tax consequences similar to those described above. This could substantially reduce the combined company’s cash available for distribution, including cash available to pay dividends to its stockholders, because, assuming that the combined company otherwise maintains its REIT qualification:

• the combined company generally would be subject to corporate level tax with respect to the built-in gain on each asset of Physicians Realty existing at the time of the Company Merger if the combined company were to dispose of Physicians Realty assets during the five-year period following the Company Merger;

• the combined company would succeed to any earnings and profits accumulated by Physicians Realty for taxable periods that it did not qualify as a REIT, and the combined company would have to pay a special dividend and/or employ applicable deficiency dividend procedures (including interest payments to the IRS) to eliminate such earnings and profits (or if the combined company does not timely distribute those earnings and profits, the combined company could fail to qualify as a REIT); and

• if Physicians Realty incurred any unpaid tax liabilities prior to the Company Merger, those tax liabilities would be transferred to the combined company as a result of the Company Merger.

If there is an adjustment to Physicians Realty’s taxable income or dividends paid deductions, the combined company could elect to use the deficiency dividend procedure in order to maintain Physicians Realty’s REIT status. That deficiency dividend procedure could require the combined company to make significant distributions to its stockholders and to pay significant interest to the IRS.

As a result of all these factors, the Company’s or Physicians Realty’s (or, following the Mergers, the combined company’s) failure to qualify as a REIT could impair the combined company’s ability to expand its business and raise capital, and would materially adversely affect the value of its capital stock.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

(a)

None.

(b)

None.

(c)

The following table sets forth information with respect to purchases of our common stock made by us or on our behalf during the three months ended September 30, 2023.

Period Covered						Total Number of Shares Purchased**(1)**						Average Price Paid per Share						Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs**(2)**						Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs**(2)**
July 1-31, 2023						290						$	20.94					—						$	444,018,701
August 1-31, 2023						181						20.47						—						444,018,701
September 1-30, 2023						199						19.74						—						444,018,701
						670						$	20.46					—						$	444,018,701

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(1)Represents shares of our common stock withheld under our equity incentive plans to offset tax withholding obligations that occur upon vesting of restricted stock units. The value of the shares withheld is based on the closing price of our common stock on the last trading day prior to the date the relevant transaction occurred.

(2)On August 1, 2022, our Board of Directors approved the Share Repurchase Program under which we may acquire shares of our common stock in the open market up to an aggregate purchase price of $500 million. Purchases of common stock under the Share Repurchase Program may be exercised at our 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. During the year ended December 31, 2022, we repurchased 2.1 million shares of our common stock at a weighted average price of $27.16 per share. During the three and nine months ended September 30, 2023, there were no repurchases, therefore, at September 30, 2023, $444 million of our common stock remained available for repurchase under the Share Repurchase Program. Amounts do not include the shares of our common stock withheld under our equity incentive plans to offset tax withholding obligations as discussed in footnote 1.