UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM 10-Q
x
(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
or
For the quarterly period ended:June 30, 2023
¨OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to

For the transition period from            to            
Commission File Number: 001-35568 (Healthcare Realty Trust of America, Inc.)Incorporated)
Commission File Number: 333-190916 (Healthcare Trust of America Holdings, LP)
_________________________ 
HEALTHCARE REALTY TRUST OF AMERICA, INC.
HEALTHCARE TRUST OF AMERICA HOLDINGS, LPINCORPORATED
(Exact name of registrantRegistrant as specified in its charter)
Maryland20-4738467
Maryland (Healthcare Trust of America, Inc.)20-4738467
Delaware (Healthcare Trust of America Holdings, LP)20-4738347
(State or other jurisdiction of
incorporation Incorporation or organization)
(I.R.S. Employer
Identification No.)
16435 N. Scottsdale Road,3310 West End Avenue, Suite 320700
Scottsdale, Arizona 85254Nashville, Tennessee 37203
(Address of principal executive offices)
(480) 998-3478(615) 269-8175
(Registrant’sRegistrant's telephone number, including area code)
N/A
www.healthcarerealty.com
(Internet address)
(Former name, former address and former fiscal year, if changed since last report)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Class A Common Stock, $0.01 par value per shareHRNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

☒Yes☐No
Healthcare Trust of America, Inc.
x Yes
¨ No
Healthcare Trust of America Holdings, LP
x Yes
¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    

☒Yes☐No
Healthcare Trust of America, Inc.
x Yes
¨ No
Healthcare Trust of America Holdings, LP
x Yes
¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☒Large accelerated filer☐Accelerated filer☐Non-accelerated filer
Healthcare Trust of America, Inc.
Large-accelerated filer x
☐
Accelerated filer ¨
Non-accelerated filer ¨
Smaller reporting company¨
☐
Emerging growth company¨
(Do not check if a smaller reporting company)
Healthcare Trust of America Holdings, LP
Large-accelerated filer ¨
Accelerated filer ¨
Non-accelerated filer x
Smaller reporting company ¨
Emerging growth company ¨
(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Healthcare Trust of America, Inc.¨☐
Healthcare Trust of America Holdings, LP¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Healthcare Trust of America, Inc.
¨ Yes
☐
x No
Yes
Healthcare Trust of America Holdings, LP☒
¨ Yes
x No
As of October 23, 2017, there were 204,886,019 shares of Class A common stock of Healthcare Trust of America, Inc. outstanding.






As of August 4, 2023, the Registrant had 380,857,532 shares of Common Stock outstanding.



Explanatory Note
This Quarterly Report combines the Quarterly Reports on Form 10-Q
On July 20, 2022, pursuant to that certain Agreement and Plan of Merger dated as of February 28, 2022 (the “Merger Agreement”), by and among Healthcare Realty Trust Incorporated, a Maryland corporation (now known as HRTI, LLC, a Maryland limited liability company) (“Quarterly Report”Legacy HR”) for the quarter ended September 30, 2017 of, Healthcare Trust of America, Inc. (“HTA”), a Maryland corporation and(now known as Healthcare Realty Trust Incorporated) (“Legacy HTA”), Healthcare Trust of America Holdings, LP, (“HTALP”), a Delaware limited partnership. Unless otherwise indicated or unlesspartnership (now known as Healthcare Realty Holdings, L.P.) (the “OP”), and HR Acquisition 2, LLC, a Maryland limited liability company (“Merger Sub”), Merger Sub merged with and into Legacy HR, with Legacy HR continuing as the contextsurviving entity and a wholly-owned subsidiary of Legacy HTA (the “Merger”). Immediately following the Merger, Legacy HR converted to a Maryland limited liability company and changed its name to “HRTI, LLC” and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”. In addition, the equity interests of Legacy HR were contributed by means of a contribution and assignment agreement to the OP, and Legacy HR became a wholly-owned subsidiary of the OP. As a result, Legacy HR became a part of an umbrella partnership REIT (“UPREIT”) structure, which is intended to align the corporate structure of the combined company after giving effect to the Merger and the UPREIT reorganization and to provide a platform for the combined company to more efficiently acquire properties in a tax-deferred manner. The combined company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $0.01 par value per share, trade on the New York Stock Exchange under the ticker symbol “HR”.
For accounting purposes, the Merger was treated as a “reverse acquisition” in which Legacy HR was considered the accounting acquirer. As a result, the historical financial statements of the accounting acquirer, Legacy HR, became the historical financial statements of the Company, as defined below. Periodic reports for periods ending following the Merger reflect financial and other information of the Company. The acquisition was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”), which requires, otherwise, all references inamong other things, the assets acquired and the liabilities assumed to be recognized at their acquisition date fair value.
For purposes of this Quarterly Report to “we,” “us,” “our,” “the Company” or “our Company” refer to HTA and HTALP, collectively, and allon Form 10-Q, references to “common stock” shall referthe “Company” are to Legacy HR for periods prior to the Class A common stockclosing of HTA.the Merger and thereafter to the combined company after giving effect to the Merger.
HTA operates as a real estate investment trust (“REIT”)In addition, the OP has issued unsecured notes described in Note 5 to the Company's Condensed Consolidated Financial Statements included in this report. All unsecured notes are fully and unconditionally guaranteed by the Company, and the OP is 98.8% owned by the general partner of HTALP. As of September 30, 2017, HTA owned a 98.0% partnership interest in HTALP, and other limited partners, including some of HTA’s directors, executive officers and their affiliates, owned the remaining partnership interest (including the long-term incentive plan (“LTIP” Units) in HTALP. As the sole general partner of HTALP, HTA has the full, exclusive and complete responsibility for HTALP’s day-to-day management and control, including its compliance withCompany. Effective January 4, 2021, the Securities and Exchange Commission (“SEC”(the “SEC”) filing requirements.
We believe it is importantadopted amendments to understand the few differences between HTA and HTALP infinancial disclosure requirements which permit subsidiary issuers of obligations guaranteed by the context of how we operate as an integrated consolidated company. HTA operates as an umbrella partnership REIT structure in which HTALP and its subsidiaries hold substantially all ofparent to omit separate financial statements if the assets. HTA’s only material asset is its ownership of partnership interests of HTALP. As a result, HTA does not conduct business itself, other than acting as the sole general partner of HTALP, issuing public equity from time to time and guaranteeing certain debts of HTALP. HTALP conducts the operations of the business and issues publicly-traded debt, but has no publicly-traded equity. Except for net proceeds from public equity issuances by HTA, which are generally contributed to HTALP in exchange for partnership units of HTALP, HTALP generates the capital required for the business through its operations and by direct or indirect incurrence of indebtedness or through the issuance of its partnership units (“OP Units”).
Noncontrolling interests, stockholders’ equity and partners’ capital are the primary areas of difference between the condensed consolidated financial statements of HTAthe parent company have been filed, the subsidiary obligor is a consolidated subsidiary of the parent company, the guaranteed security is debt or debt-like, and HTALP. Limited partnership units in HTALP are accounted for as partners’ capital in HTALP’s condensed consolidated balance sheetsthe security is guaranteed fully and as noncontrolling interest reflected within equity in HTA’s condensed consolidated balance sheets. The differences between HTA’s stockholders’ equity and HTALP’s partners’ capital are due tounconditionally by the differences in the equity issued by HTA and HTALP, respectively.
We believe combining the Quarterly Reports of HTA and HTALP, including the notes to the condensedparent. Accordingly, separate consolidated financial statements into this single Quarterly Reportof the OP have not been presented.
Additionally, as permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, the Company has excluded the summarized financial information for the OP because the assets, liabilities, and results of operations of the OP are not materially different than the corresponding amounts in the following benefits:
enhances stockholders’ understanding of HTA and HTALP by enabling stockholders to view the business as a whole in the same manner that management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure in this Quarterly Report applies to both HTA and HTALP; and
creates time and cost efficiencies through the preparation of a single combined Quarterly Report instead of two separate Quarterly Reports.
In order to highlight the material differences between HTA and HTALP, this Quarterly Report includes sections that separately present and discuss areas that are materially different between HTA and HTALP, including:
the condensed consolidated financial statements;
certain accompanying notes to the condensedCompany's consolidated financial statements including Note 7 - Debt, Note 10 - Stockholders’ Equity and Partners’ Capital, Note 12 - Per Share Data of HTA and Note 13 - Per Unit Data of HTALP;
the Funds From Operations (“FFO”) and Normalized FFO in Part 1, Item 2 of this Quarterly Report;
the Controls and Procedures in Part 1, Item 4 of this Quarterly Report; and
the Certifications of the Chief Executive Officer and the Chief Financial Officer included as Exhibits 31 and 32 to this Quarterly Report.
In the sections of this Quarterly Report that combine disclosure for HTA and HTALP, this Quarterly Report refers to actions or holdings as being actions or holdings of the Company. Although HTALP (directly or indirectly through one of its subsidiaries) is generally the entity that enters into contracts, holds assets and issues or incurs debt, management believes this presentation is appropriate for the reasons set forth abovesuch summarized financial information would be repetitive and because the business of the Company is a single integrated enterprise operated through HTALP.would not provide incremental value to investors.

2


HEALTHCARE TRUST OF AMERICA, INC. AND
HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
TABLE OF CONTENTS


HEALTHCARE REALTY TRUST INCORPORATED
FORM 10-Q
June 30, 2023


    Table of Contents
Page
PART I - FINANCIAL INFORMATION
1
Item 1.
4
Healthcare Trust of America, Inc.
Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016
41
52
63
74
86
Healthcare Trust of America Holdings, LP
9
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016
10
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2017 and 2016
11
Condensed Consolidated Statements of Changes in Partners’ Capital for the Nine Months Ended September 30, 2017 and 2016
12
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016
13
Notes for Healthcare Trust of America, Inc. and Healthcare Trust of America Holdings, LP
Notes to Unauditedthe Condensed Consolidated Financial Statements
147
3026
4438
4538
PART II - OTHER INFORMATION
38
4638
46
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
4638
Item 5Other Information
39
4639
Signatures
SIGNATURE
4740







3


Table of Contents


PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
HEALTHCARE TRUST OF AMERICA, INC.Healthcare Realty Trust Incorporated
CONDENSED CONSOLIDATED BALANCE SHEETSCondensed Consolidated Balance Sheets
(InAmounts in thousands, except for share and per share data)data
(Unaudited)
  September 30, 2017 December 31, 2016
ASSETS    
Real estate investments:    
Land $480,850
 $386,526
Building and improvements 5,788,837
 3,466,516
Lease intangibles 648,591
 467,571
Construction in progress 59,573
 —
  6,977,851
 4,320,613
Accumulated depreciation and amortization (973,566) (817,593)
Real estate investments, net 6,004,285
 3,503,020
Investment in unconsolidated joint venture 68,303
 —
Cash and cash equivalents 9,410
 11,231
Restricted cash and escrow deposits 17,469
 13,814
Receivables and other assets, net 206,030
 173,461
Other intangibles, net 108,025
 46,318
Total assets $6,413,522
 $3,747,844
LIABILITIES AND EQUITY    
Liabilities:    
Debt $2,856,758
 $1,768,905
Accounts payable and accrued liabilities 159,070
 105,034
Derivative financial instruments - interest rate swaps 1,441
 1,920
Security deposits, prepaid rent and other liabilities 61,402
 49,859
Intangible liabilities, net 69,852
 37,056
Total liabilities 3,148,523
 1,962,774
Commitments and contingencies 
 
Redeemable noncontrolling interests 4,692
 4,653
Equity:    
Preferred stock, $0.01 par value; 200,000,000 shares authorized; none issued and outstanding —
 —
Class A common stock, $0.01 par value; 1,000,000,000 shares authorized; 200,686,673 and 141,719,134 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 2,007
 1,417
Additional paid-in capital 4,386,224
 2,754,818
Accumulated other comprehensive loss (615) —
Cumulative dividends in excess of earnings (1,212,051) (1,068,961)
Total stockholders’ equity 3,175,565
 1,687,274
Noncontrolling interests 84,742
 93,143
Total equity 3,260,307
 1,780,417
Total liabilities and equity $6,413,522
 $3,747,844
     
ASSETS
Unaudited
JUNE 30, 2023
DECEMBER 31, 2022
Real estate properties
Land$1,424,453 $1,439,798 
Buildings and improvements11,188,821 11,332,037 
Lease intangibles922,029 959,998 
Personal property12,615 11,907 
Investment in financing receivable, net121,315 120,236 
Financing lease right-of-use assets83,016 83,824 
Construction in progress53,311 35,560 
Land held for development78,411 74,265 
Total real estate properties13,883,971 14,057,625 
Less accumulated depreciation and amortization(1,983,944)(1,645,271)
Total real estate properties, net11,900,027 12,412,354 
Cash and cash equivalents35,904 60,961 
Assets held for sale, net151 18,893 
Operating lease right-of-use assets333,224 336,983 
Investments in unconsolidated joint ventures327,245 327,248 
Goodwill250,530 223,202 
Other assets, net547,266 469,990 
Total assets$13,394,347 $13,849,631 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Notes and bonds payable$5,340,272 $5,351,827 
Accounts payable and accrued liabilities196,147 244,033 
Liabilities of assets held for sale222 437 
Operating lease liabilities278,479 279,895 
Financing lease liabilities73,629 72,939 
Other liabilities219,694 218,668 
Total liabilities6,108,443 6,167,799 
Commitments and contingencies
Redeemable non-controlling interests2,487 2,014 
Stockholders' equity
Preferred stock, $.01 par value per share; 200,000 shares authorized; none issued and outstanding— — 
Class A Common stock, $.01 par value per share; 1,000,000 shares authorized; 380,858 and 380,590 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively3,808 3,806 
Additional paid-in capital9,595,033 9,587,637 
Accumulated other comprehensive (loss) income9,328 2,140 
Cumulative net income attributable to common stockholders1,137,171 1,307,055 
Cumulative dividends(3,565,941)(3,329,562)
Total stockholders' equity7,179,399 7,571,076 
Non-controlling interest104,018 108,742 
Total equity7,283,417 7,679,818 
Total liabilities and equity$13,394,347 $13,849,631 
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, are an integral part of these condensed consolidated financial statements.


4

1


Table of Contents


Healthcare Realty Trust Incorporated
HEALTHCARE TRUST OF AMERICA, INC.Condensed Consolidated Statements of Operations
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSFor the Three and Six Months Ended June 30, 2023 and 2022
(InAmounts in thousands, except for per share data)data
(Unaudited)Unaudited
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
2023202220232022
Revenues
Rental income$329,680 $140,632 $653,773 $279,121 
Interest income4,233 1,957 8,448 3,887 
Other operating4,230 2,738 8,847 5,213 
338,143 145,327 671,068 288,221 
Expenses
Property operating125,395 57,010 247,436 114,474 
General and administrative15,464 10,540 30,399 21,576 
Acquisition and pursuit costs669 1,352 956 2,655 
Merger-related costs(15,670)7,085 (10,815)13,201 
Depreciation and amortization183,193 55,731 367,671 109,772 
309,051 131,718 635,647 261,678 
Other income (expense)
Gain on sales of real estate properties7,156 8,496 8,162 53,280 
Interest expense(65,334)(15,543)(129,092)(29,204)
Loss on extinguishment of debt— — — (1,429)
Impairment of real estate properties and credit loss reserves(55,215)— (86,637)25 
Equity loss from unconsolidated joint ventures(17)(307)(797)(652)
Interest and other income (expense), net592 (125)1,139 (206)
(112,818)(7,479)(207,225)21,814 
Net (loss) income$(83,726)$6,130 $(171,804)$48,357 
Net loss attributable to non-controlling interests967 — 1,920 — 
Net (loss) income attributable to common stockholders$(82,759)$6,130 $(169,884)$48,357 
Basic earnings per common share$(0.22)$0.04 $(0.45)$0.32 
Diluted earnings per common share$(0.22)$0.04 $(0.45)$0.32 
Weighted average common shares outstanding - basic378,897 149,676 378,861 149,321 
Weighted average common shares outstanding - diluted378,897 149,739 378,861 149,397 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues:       
Rental income$175,431
 $118,252
 $438,949
 $338,646
Interest and other operating income563
 88
 1,271
 243
Total revenues175,994
 118,340
 440,220

338,889
Expenses:       
Rental56,331
 36,885
 138,874
 105,299
General and administrative8,283
 7,293
 25,178
 20,879
Transaction261
 1,122
 5,618
 4,997
Depreciation and amortization70,491
 47,864
 172,900
 130,430
Impairment—
 —
 5,093
 —
Total expenses135,366
 93,164
 347,663
 261,605
Income before other income (expense)40,628
 25,176
 92,557
 77,284
Interest expense:      
Interest related to derivative financial instruments(264) (552) (827) (1,856)
Gain (loss) on change in fair value of derivative financial instruments, net—
 1,306
 884
 (2,144)
Total interest related to derivative financial instruments, including net change in fair value of derivative financial instruments(264) 754
 57
 (4,000)
Interest related to debt(25,924) (16,386) (59,688) (44,503)
Gain on sale of real estate, net—
 —
 3
 4,212
Loss on extinguishment of debt, net(774) (3,000) (11,192) (3,022)
Income from unconsolidated joint venture318
 —
 381
 —
Other (expense) income(27) 95
 (13) 220
Net income$13,957
 $6,639
 $22,105
 $30,191
Net income attributable to noncontrolling interests (1) 
(194) (212) (715) (830)
Net income attributable to common stockholders$13,763
 $6,427
 $21,390
 $29,361
Earnings per common share - basic:       
Net income attributable to common stockholders$0.07
 $0.05
 $0.12
 $0.22
Earnings per common share - diluted:       
Net income attributable to common stockholders$0.07
 $0.04
 $0.12
 $0.21
Weighted average common shares outstanding:       
Basic200,674
 138,807
 173,189
 134,905
Diluted204,795
 143,138
 177,410
 138,314
Dividends declared per common share$0.305
 $0.300
 $0.905
 $0.890
        
(1) Includes amounts attributable to redeemable noncontrolling interests.

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, are an integral part of these condensed consolidated financial statements.


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Table of Contents


Healthcare Realty Trust Incorporated
HEALTHCARE TRUST OF AMERICA, INC.Condensed Consolidated Statements of Comprehensive Income
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)For the Three and Six Months Ended June 30, 2023 and 2022
(In thousands)Amounts in thousands
(Unaudited)Unaudited
THREE MONTHS ENDED
 June 30,		SIX MONTHS ENDED
June 30,
2023202220232022
Net (loss) income$(83,726)$6,130 $(171,804)$48,357 
Other comprehensive income
Interest rate swaps
Reclassification adjustments for (gains) losses included in net income (interest expense)(3,419)823 (5,703)1,909 
Gains arising during the period on interest rate swaps21,523 1,663 12,981 6,822 
18,104 2,486 7,278 8,731 
Comprehensive (loss) income(65,622)8,616 (164,526)57,088 
Less: comprehensive loss attributable to non-controlling interests745 — 1,830 — 
Comprehensive (loss) income attributable to common stockholders$(64,877)$8,616 $(162,696)$57,088 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
        
Net income$13,957
 $6,639
 $22,105
 $30,191
        
Other comprehensive gain (loss)       
Change in unrealized gains (losses) on cash flow hedges205
 —
 (631) —
Total other comprehensive gain (loss)205
 —
 (631) —
        
Total comprehensive income14,162
 6,639
 21,474
 30,191
Comprehensive income attributable to noncontrolling interests(170) (211) (619) (802)
Total comprehensive income attributable to common stockholders$13,992
 $6,428
 $20,855
 $29,389
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, are an integral part of these condensed consolidated financial statements.




63




Healthcare Realty Trust Incorporated
HEALTHCARE TRUST OF AMERICA, INC.Condensed Consolidated Statements of Equity
CONDENSED CONSOLIDATED STATEMENTS OF EQUITYFor the Three Months Ended June 30, 2023 and 2022
(In thousands)Amounts in thousands, except per share data
(Unaudited)Unaudited
Common
Stock		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Cumulative
Net Income		Cumulative
Dividends		Total
Stockholders’
Equity		Non-controlling InterestsTotal
Equity		Redeemable Non-controlling Interests
Balance at March 31, 2023$3,808 $9,591,194 $(8,554)$1,219,930 $(3,447,750)$7,358,628 $106,211 $7,464,839 $2,000 
Issuance of common stock, net of issuance costs— 27 — — — 27 — 27 — 
Common stock redemptions— (112)— — — (112)— (112)— 
Share-based compensation— 3,924 — — — 3,924 — 3,924 — 
Net loss— — — (82,759)— (82,759)(967)(83,726)— 
Reclassification adjustments for gains included in net income (interest expense)
— — (3,377)— — (3,377)(42)(3,419)— 
Gains arising during the period on
interest rate swaps
— — 21,259 — — 21,259 264 21,523 — 
Contributions from non-controlling interests— — — — — — — — 487 
Dividends to common stockholders and distributions to non-controlling interest holders ($0.31 per share)— — — — (118,191)(118,191)(1,448)(119,639)— 
Balance at June 30, 2023$3,808 $9,595,033 $9,328 $1,137,171 $(3,565,941)$7,179,399 $104,018 $7,283,417 $2,487 
Common
Stock		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Cumulative
Net Income		Cumulative
Dividends		Total
Stockholders’
Equity		Non-controlling InterestsTotal
Equity		Redeemable Non-controlling Interests
Balance at March 31, 2022$1,516 $3,999,060 $(3,736)$1,308,385 $(3,092,343)$2,212,882 $— $2,212,882 $— 
Issuance of common stock, net of issuance costs— 110 — — — 110 — 110 — 
Share-based compensation— 3,356 — — — 3,356 — 3,356 — 
Net income— — — 6,130 — 6,130 — 6,130 — 
Reclassification adjustments for losses included in net income (interest expense)
— — 823 — — 823 — 823 — 
Gains arising during the period on interest rate swaps
— — 1,663 — — 1,663 — 1,663 — 
Dividends to common stockholders ($0.31 per share)— — — — (47,097)(47,097)— (47,097)— 
Balance at June 30, 2022$1,516 $4,002,526 $(1,250)$1,314,515 $(3,139,440)$2,177,867 $— $2,177,867 $— 
 Class A Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Cumulative Dividends in Excess of Earnings Total Stockholders’ Equity Noncontrolling Interests Total Equity
 Shares Amount
Balance as of December 31, 2015127,027
 $1,270
 $2,328,806
 $—
 $(950,652) $1,379,424
 $27,534
 $1,406,958
Issuance of common stock, net14,138
 141
 417,022
 —
 —
 417,163
 —
 417,163
Issuance of operating partnership units in connection with an acquisition—
 —
 —
 —
 —
 —
 71,754
 71,754
Share-based award transactions, net393
 4
 5,132
 —
 —
 5,136
 —
 5,136
Repurchase and cancellation of common stock(87) (1) (2,424) —
 —
 (2,425) —
 (2,425)
Redemption of noncontrolling interest and other257
 3
 5,030
 —
 —
 5,033
 (5,709) (676)
Dividends declared—
 —
 —
 —
 (121,686) (121,686) (3,134) (124,820)
Net income—
 —
 —
 —
 29,361
 29,361
 802
 30,163
Balance as of September 30, 2016141,728
 $1,417
 $2,753,566
 $—
 $(1,042,977) $1,712,006
 $91,247
 $1,803,253
                
Balance as of December 31, 2016141,719
 $1,417
 $2,754,818
 $—
 $(1,068,961) $1,687,274
 $93,143
 $1,780,417
Issuance of common stock, net58,623
 586
 1,623,636
 —
 —
 1,624,222
 —
 1,624,222
Issuance of operating partnership units in connection with an acquisition—
 —
 —
 —
 —
 —
 610
 610
Share-based award transactions, net234
 3
 5,490
 —
 —
 5,493
 —
 5,493
Repurchase and cancellation of common stock(116) (1) (3,412) —
 —
 (3,413) —
 (3,413)
Redemption of noncontrolling interest and other227
 2
 5,692
 —
 —
 5,694
 (5,694) —
Dividends declared—
 —
 —
 —
 (164,480) (164,480) (3,936) (168,416)
Net income—
 —
 —
 —
 21,390
 21,390
 635
 22,025
Other comprehensive loss—
 —
 —
 (615) —
 (615) (16) (631)
Balance as of September 30, 2017200,687
 $2,007
 $4,386,224
 $(615) $(1,212,051) $3,175,565
 $84,742
 $3,260,307

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, are an integral part of these condensed consolidated financial statements.




7



4



Healthcare Realty Trust Incorporated
HEALTHCARE TRUST OF AMERICA, INC.Condensed Consolidated Statements of Equity
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFor the Six Months Ended June 30, 2023 and 2022
(In thousands)Amounts in thousands, except per share data
(Unaudited)Unaudited

  Nine Months Ended September 30,
  2017 2016
Cash flows from operating activities:    
Net income $22,105
 $30,191
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation, amortization and other 169,057
 128,728
Share-based compensation expense 5,493
 5,136
Bad debt expense 635
 508
Impairment 5,093
 —
Income from unconsolidated joint venture (381) —
Gain on sale of real estate, net (3) (4,212)
Loss on extinguishment of debt, net 11,192
 3,022
Change in fair value of derivative financial instruments (884) 2,144
Changes in operating assets and liabilities:    
Receivables and other assets, net (20,489) (14,051)
Accounts payable and accrued liabilities 29,566
 3,598
Prepaid rent and other liabilities 7,158
 (6,807)
Net cash provided by operating activities 228,542
 148,257
Cash flows from investing activities:    
Investments in real estate (2,357,570) (532,527)
Investment in unconsolidated joint venture (68,839) —
Development of real estate (19,163) —
Proceeds from the sale of real estate 4,746
 23,368
Capital expenditures (42,990) (34,064)
Restricted cash, escrow deposits and other assets (3,655) 2,143
Net cash used in investing activities (2,487,471) (541,080)
Cash flows from financing activities:    
Borrowings on unsecured revolving credit facility 515,000
 513,000
Payments on unsecured revolving credit facility (528,000) (704,000)
Proceeds from unsecured senior notes 900,000
 347,725
Borrowings on unsecured term loans —
 200,000
Payments on unsecured term loans —
 (155,000)
Payments on secured mortgage loans (75,444) (98,453)
Deferred financing costs (16,902) (3,039)
Debt extinguishment costs (10,391) —
Security deposits 1,932
 862
Proceeds from issuance of common stock 1,624,222
 418,891
Repurchase and cancellation of common stock (3,413) (2,425)
Dividends paid (145,877) (116,655)
Distributions paid to noncontrolling interest of limited partners (4,019) (2,724)
Redemption of redeemable noncontrolling interest —
 (491)
Net cash provided by financing activities 2,257,108
 397,691
Net change in cash and cash equivalents (1,821) 4,868
Cash and cash equivalents - beginning of period 11,231
 13,070
Cash and cash equivalents - end of period $9,410
 $17,938
Common
Stock		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Cumulative
Net Income		Cumulative
Dividends		Total
Stockholders’
Equity		Non-controlling InterestsTotal
Equity		Redeemable Non-controlling Interests
Balance at December 31, 2022$3,806 $9,587,637 $2,140 $1,307,055 $(3,329,562)$7,571,076 $108,742 $7,679,818 $2,014 
Issuance of common stock, net of issuance costs— 78 — — — 78 — 78 — 
Common stock redemptions(1)(1,595)— — — (1,596)— (1,596)— 
Share-based compensation3 8,913 — — — 8,916 — 8,916 — 
Net loss— — — (169,884)— (169,884)(1,920)(171,804)— 
Reclassification adjustments for gains included in net income (interest expense)
— — (5,635)— — (5,635)(68)(5,703)— 
Gains arising during the period on interest rate swaps
— — 12,823 — — 12,823 158 12,981 — 
Contributions from non-controlling interests— — — — — — — — 473 
Dividends to common stockholders and distributions to non-controlling interest holders ($0.62 per share)— — — — (236,379)(236,379)(2,894)(239,273)— 
Balance at June 30, 2023$3,808 $9,595,033 $9,328 $1,137,171 $(3,565,941)$7,179,399 $104,018 $7,283,417 $2,487 
Common
Stock		Additional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Cumulative
Net Income		Cumulative
Dividends		Total
Stockholders’
Equity		Non-controlling InterestsTotal
Equity		Redeemable Non-controlling Interests
Balance at December 31, 2021$1,505 $3,972,917 $(9,981)$1,266,158 $(3,045,483)$2,185,116 $— $2,185,116 $— 
Issuance of common stock, net of issuance costs7 22,764 — — — 22,771 — 22,771 — 
Common stock redemptions— (206)— — — (206)— (206)— 
Share-based compensation4 7,051 — — — 7,055 — 7,055 — 
Net income— — — 48,357 — 48,357 — 48,357 — 
Reclassification adjustments for losses included in net income (interest expense)
— — 1,909 — — 1,909 — 1,909 — 
Gains arising during the period on interest rate swaps
— — 6,822 — — 6,822 — 6,822 — 
Dividends to common stockholders ($0.62 per share)— — — — (93,957)(93,957)— (93,957)— 
Balance at June 30, 2022$1,516 $4,002,526 $(1,250)$1,314,515 $(3,139,440)$2,177,867 $— $2,177,867 $— 

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, are an integral part of these condensed consolidated financial statements.statements


8



5



HealthcareRealty Trust Incorporated
HEALTHCARE TRUST OF AMERICA HOLDINGS, LPCondensed Consolidated Statements of Cash Flows
CONDENSED CONSOLIDATED BALANCE SHEETSFor the Six Months Ended June 30, 2023 and 2022
(InAmounts in thousands except unit data)
(Unaudited)Unaudited

  September 30, 2017 December 31, 2016
ASSETS    
Real estate investments:    
Land $480,850
 $386,526
Building and improvements 5,788,837
 3,466,516
Lease intangibles 648,591
 467,571
Construction in progress 59,573
 —
  6,977,851
 4,320,613
Accumulated depreciation and amortization (973,566) (817,593)
Real estate investments, net 6,004,285
 3,503,020
Investment in unconsolidated joint venture 68,303
 —
Cash and cash equivalents 9,410
 11,231
Restricted cash and escrow deposits 17,469
 13,814
Receivables and other assets, net 206,030
 173,461
Other intangibles, net 108,025
 46,318
Total assets $6,413,522
 $3,747,844
LIABILITIES AND PARTNERS’ CAPITAL    
Liabilities:    
Debt $2,856,758
 $1,768,905
Accounts payable and accrued liabilities 159,070
 105,034
Derivative financial instruments - interest rate swaps 1,441
 1,920
Security deposits, prepaid rent and other liabilities 61,402
 49,859
Intangible liabilities, net 69,852
 37,056
Total liabilities 3,148,523
 1,962,774
Commitments and contingencies 

 

Redeemable noncontrolling interests 4,692
 4,653
Partners’ Capital:    
Limited partners’ capital, 4,116,546 and 4,323,095 units issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
 84,472
 92,873
General partners’ capital, 200,686,673 and 141,719,134 units issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 3,175,835
 1,687,544
Total partners’ capital 3,260,307
 1,780,417
Total liabilities and partners’ capital $6,413,522
 $3,747,844
OPERATING ACTIVITIES
SIX MONTHS ENDED
June 30,
20232022
Net (loss) income$(171,804)$48,357 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization367,671 109,772 
Other amortization23,405 2,680 
Share-based compensation8,916 7,055 
Amortization of straight-line rent receivable (lessor)(19,313)(3,292)
Amortization of straight-line rent on operating leases (lessee)3,062 756 
Gain on sales of real estate properties(8,162)(53,280)
Loss on extinguishment of debt— 1,429 
Impairment of real estate properties and credit loss reserves86,637 (25)
Equity loss from unconsolidated joint ventures797 652 
Distributions from unconsolidated joint ventures3,031 108 
Non-cash interest from financing and notes receivable(488)(388)
Changes in operating assets and liabilities:
Other assets, including right-of-use-assets(17,502)540 
Accounts payable and accrued liabilities(38,601)(3,166)
Other liabilities16,673 2,923 
Net cash provided by operating activities254,322 114,121 
INVESTING ACTIVITIES
Acquisitions of real estate(39,301)(287,004)
Development of real estate(17,594)(7,475)
Additional long-lived assets(94,013)(45,631)
Funding of mortgages and notes receivable(11,503)— 
Investments in unconsolidated joint ventures(3,824)(49,599)
Investment in financing receivable(780)498 
Proceeds from sales of real estate properties and additional long-lived assets160,870 108,044 
Net cash used in investing activities(6,145)(281,167)
FINANCING ACTIVITIES
Net (repayments) borrowings on unsecured credit facility(31,000)280,500 
Repayments of notes and bonds payable(1,340)(18,224)
Redemption of notes and bonds payable— (2,184)
Dividends paid(236,105)(93,774)
Net proceeds from issuance of common stock77 22,768 
Common stock redemptions(1,842)(852)
Distributions to non-controlling interest holders(2,546)— 
Debt issuance and assumption costs(438)— 
Payments made on finance leases(40)(51)
Net cash (used in) provided by financing activities(273,234)188,183 
(Decrease) increase in cash and cash equivalents(25,057)21,137 
Cash and cash equivalents at beginning of period60,961 13,175 
Cash and cash equivalents at end of period$35,904 $34,312 
Supplemental Cash Flow Information
Interest paid$106,985 $26,641 
Mortgage note receivable taken in connection with sale of real estate$45,000 $— 
Invoices accrued for construction, tenant improvements and other capitalized costs$30,956 $18,874 
Capitalized interest$1,282 $145 
The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, are an integral part of these condensed consolidated financial statements.




96



Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per unit data)
(Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues:       
Rental income$175,431
 $118,252
 $438,949
 $338,646
Interest and other operating income563
 88
 1,271
 243
Total revenues175,994
 118,340
 440,220
 338,889
Expenses:       
Rental56,331
 36,885
 138,874
 105,299
General and administrative8,283
 7,293
 25,178
 20,879
Transaction261
 1,122
 5,618
 4,997
Depreciation and amortization70,491
 47,864
 172,900
 130,430
Impairment—
 —
 5,093
 —
Total expenses135,366
 93,164
 347,663
 261,605
Income before other income (expense)40,628
 25,176
 92,557
 77,284
Interest expense:       
Interest related to derivative financial instruments(264) (552) (827) (1,856)
Gain (loss) on change in fair value of derivative financial instruments, net—
 1,306
 884
 (2,144)
Total interest related to derivative financial instruments, including net change in fair value of derivative financial instruments(264) 754
 57
 (4,000)
Interest related to debt(25,924) (16,386) (59,688) (44,503)
Gain on sale of real estate, net—
 —
 3
 4,212
Loss on extinguishment of debt, net(774) (3,000) (11,192) (3,022)
Income from unconsolidated joint venture318
 —
 381
 —
Other (expense) income(27) 95
 (13) 220
Net income$13,957
 $6,639
 $22,105
 $30,191
Net income attributable to noncontrolling interests(28) (1) (80) (28)
Net income attributable to common unitholders$13,929
 $6,638
 $22,025
 $30,163
Earnings per common unit - basic:       
Net income attributable to common unitholders$0.07
 $0.05
 $0.12
 $0.22
Earnings per common unit - diluted:       
Net income attributable to common unitholders$0.07
 $0.05
 $0.12
 $0.22
Weighted average common units outstanding:        
Basic204,795
 143,137
 177,410
 138,314
Diluted204,795
 143,137
 177,410
 138,314
Dividends declared per common unit$0.305
 $0.300
 $0.905
 $0.890
The accompanying notes are an integral part of these condensed consolidated financial statements.

10


HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
        
Net income$13,957
 $6,639
 $22,105
 $30,191
        
Other comprehensive gain (loss)       
Change in unrealized gains (losses) on cash flow hedges205
 —
 (631) —
Total other comprehensive gain (loss)205
 —
 (631) —
        
Total comprehensive income14,162
 6,639
 21,474
 30,191
Comprehensive income attributable to noncontrolling interests(28) (1) (80) (28)
Total comprehensive income attributable to common unitholders$14,134
 $6,638
 $21,394
 $30,163
The accompanying notes are an integral part of these condensed consolidated financial statements.


11


HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL
(In thousands)
(Unaudited)
 General Partners’ Capital Limited Partners’ Capital Total Partners’ Capital
 Units Amount Units Amount 
Balance as of December 31, 2015127,027
 $1,379,694
 1,930
 $27,264
 $1,406,958
Issuance of general partner units, net14,138
 417,163
 —
 —
 417,163
Issuance of limited partner units in connection with an acquisition—
 —
 2,650
 71,754
 71,754
Share-based award transactions, net393
 5,136
 —
 —
 5,136
Redemption and cancellation of general partner units(87) (2,425) —
 —
 (2,425)
Redemption of limited partner units and other257
 5,033
 (257) (5,709) (676)
Distributions declared—
 (121,686) —
 (3,134) (124,820)
Net income—
 29,361
 —
 802
 30,163
Balance as of September 30, 2016141,728
 $1,712,276
 4,323
 $90,977
 $1,803,253
          
Balance as of December 31, 2016141,719
 $1,687,544
 4,323
 $92,873
 $1,780,417
Issuance of general partner units, net58,623
 1,624,222
 —
 —
 1,624,222
Issuance of limited partner units in connection with an acquisition—
 —
 21
 610
 610
Share-based award transactions, net234
 5,493
 —
 —
 5,493
Redemption and cancellation of general partner units(116) (3,413) —
 —
 (3,413)
Redemption of limited partner units and other227
 5,694
 (227) (5,694) —
Distributions declared—
 (164,480) —
 (3,936) (168,416)
Net income—
 21,390
 —
 635
 22,025
Other comprehensive loss—
 (615) —
 (16) (631)
Balance as of September 30, 2017200,687
 $3,175,835
 4,117
 $84,472
 $3,260,307
The accompanying notes are an integral part of these condensed consolidated financial statements.


12


HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
  Nine Months Ended September 30,
  2017 2016
Cash flows from operating activities:    
Net income $22,105
 $30,191
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation, amortization and other 169,057
 128,728
Share-based compensation expense 5,493
 5,136
Bad debt expense 635
 508
Impairment 5,093
 —
Income from unconsolidated joint venture (381) —
Gain on sale of real estate, net (3) (4,212)
Loss on extinguishment of debt, net 11,192
 3,022
Change in fair value of derivative financial instruments (884) 2,144
Changes in operating assets and liabilities:    
Receivables and other assets, net (20,489) (14,051)
Accounts payable and accrued liabilities 29,566
 3,598
Prepaid rent and other liabilities 7,158
 (6,807)
Net cash provided by operating activities 228,542
 148,257
Cash flows from investing activities:    
Investments in real estate (2,357,570) (532,527)
Investment in unconsolidated joint venture (68,839) —
Development of real estate (19,163) —
Proceeds from the sale of real estate 4,746
 23,368
Capital expenditures (42,990) (34,064)
Restricted cash, escrow deposits and other assets (3,655) 2,143
Net cash used in investing activities (2,487,471) (541,080)
Cash flows from financing activities:    
Borrowings on unsecured revolving credit facility 515,000
 513,000
Payments on unsecured revolving credit facility (528,000) (704,000)
Proceeds from unsecured senior notes 900,000
 347,725
Borrowings on unsecured term loans —
 200,000
Payments on unsecured term loans —
 (155,000)
Payments on secured mortgage loans (75,444) (98,453)
Deferred financing costs (16,902) (3,039)
Debt extinguishment costs (10,391) —
Security deposits 1,932
 862
Proceeds from issuance of general partner units 1,624,222
 418,891
Repurchase and cancellation of general partner units (3,413) (2,425)
Distributions paid to general partner (145,877) (116,655)
Distributions paid to limited partners and redeemable noncontrolling interests (4,019) (2,724)
Redemption of redeemable noncontrolling interest —
 (491)
Net cash provided by financing activities 2,257,108
 397,691
Net change in cash and cash equivalents (1,821) 4,868
Cash and cash equivalents - beginning of period 11,231
 13,070
Cash and cash equivalents - end of period $9,410
 $17,938
The accompanying notes are an integral part of these condensed consolidated financial statements.

13


HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unless otherwise indicated or unless the context requires otherwise the use of the words “we,” “us” or “our” refers to Healthcare Trust of America, Inc. and Healthcare Trust of America Holdings, LP, collectively.
Note 1. Organization and Description of Business
HTA, a Maryland corporation, and HTALP, a Delaware limited partnership, were incorporated or formed, as applicable, on April 20, 2006. HTA operates as a REIT and is the general partner of HTALP, which is the operating partnership. As of September 30, 2017, HTA owned a 98.0% partnership interest and other limited partners, including some of our directors, executive officers and their affiliates, owned the remaining partnership interest (including the LTIP Units) in HTALP. As the sole general partner of HTALP, HTA has the full, exclusive and complete responsibility for HTALP’s day-to-day management and control. HTA operates in an umbrella partnership REIT structure in which HTALP and its subsidiaries hold substantially all of the assets. HTA’s only material asset is its ownership of partnership interests of HTALP. As a result, HTA does not conduct business itself, other than acting as the sole general partner of HTALP, issuing public equity from time to time and guaranteeing certain debts of HTALP. HTALP conducts the operations of the business and issues publicly-traded debt, but has no publicly-traded equity.
HTA is the largest publicly-traded REIT focused on medical office buildings (“MOBs”) in the U.S. as measured by the gross leasable area (“GLA”) of our MOBs. HTA conducts substantially all of its operations through HTALP. We invest in MOBs that we believe will serve the future of healthcare delivery, and MOBs that are primarily located on health system campuses, near university medical centers, or in core community outpatient locations. We also focus on our key markets that have certain demographic and macro-economic trends and where we can utilize our institutional property management and leasing platform to generate strong tenant relationships and operating cost efficiencies. Our primary objective is to maximize stockholder value with disciplined growth through strategic investments that provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow. In pursuing this objective, we: (i) seek internal growth through proactive asset management, leasing and property management oversight; (ii) target accretive acquisitions and developments of MOBs in markets with attractive demographics that complement our existing portfolio; and (iii) actively manage our balance sheet to maintain flexibility with conservative leverage.  Additionally, from time to time we consider, on an opportunistic basis, significant portfolio acquisitions that we believe fit our core business and could enhance our existing portfolio. HTA has qualified to be taxed as a REIT for federal income tax purposes and intends to continue to be taxed as a REIT.
Since 2006, we have invested $7.0 billion to create a portfolio of MOBs and other healthcare assets consisting of approximately 24.2 million square feet of GLA throughout the U.S. As of September 30, 2017, our portfolio included $2.24 billion of investments, net of development credits received at closing, in connection with our acquisition of the Duke MOB business (the “Duke Acquisition”), which includes a 50% ownership interest in an unconsolidated joint venture for $68.8 million as of the date of acquisition. Our only remaining obligations related to the Duke Acquisition are the potential acquisition of a land parcel in Miami, FL and a single property in Texas that are each currently excluded from our purchase obligations due to current outstanding physical condition issues.
As of September 30, 2017, approximately 96% of our portfolio, based on GLA, was located on the campuses of, or aligned with, nationally or regionally recognized healthcare systems. Our portfolio is diversified geographically across 33 states, with no state having more than 19% of our total GLA as of September 30, 2017. We are concentrated in 20 to 25 key markets that are experiencing higher economic and demographic trends than other markets, on average, that we expect will drive demand for MOBs. Approximately 92% of our portfolio, based on GLA, is located in the top 75 metropolitan statistical areas (“MSAs”) with Atlanta, Boston, Dallas, Houston and Tampa being our largest markets by investment.
Our principal executive office is located at 16435 North Scottsdale Road, Suite 320, Scottsdale, Arizona, 85254.
2. Summary of Significant Accounting Policies
Business Overview
Healthcare Realty Trust Incorporated is a real estate investment trust ("REIT") that owns, leases, manages, acquires, finances, develops and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of June 30, 2023, the Company had gross investments of approximately $13.9 billion in 680 wholly-owned real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property. The summaryCompany's 680 real estate properties are located in 35 states and total approximately 39.8 million square feet. The Company provided leasing and property management services to approximately 39.3 million square feet nationwide.
In addition, as of significant accounting policies presentedJune 30, 2023, the Company had a weighted average ownership interest of approximately 44% in 34 real estate properties held in joint ventures. See Note 3 below is designedfor more details regarding the Company's unconsolidated joint ventures.
Any references to assistsquare footage or occupancy percentage, and any amounts derived from these values in understanding our condensed consolidated financial statements. Such condensed consolidated financial statements andthese notes to the accompanying notesCompany's Condensed Consolidated Financial Statements, are outside the representationsscope of our management, who are responsible for their integrity and objectivity. Theseindependent registered public accounting policies conform to U.S. generally accepted accounting principles (“GAAP”) in all material respects and have been consistently applied in preparing our accompanying condensed consolidated financial statements.firm’s review.
Basis of Presentation
Our accompanying condensed consolidated financial statements include our accountsFor purposes of this Quarterly Report on Form 10-Q, references to the “Company” are to Legacy HR for periods prior to the closing of the Merger and those of our subsidiariesthereafter to Legacy HR and any consolidated variable interest entities (“VIEs”). All inter-company balances and transactions have been eliminatedLegacy HTA as the combined company after giving effect to the Merger. The Merger is described in the accompanying condensed consolidated financial statements.

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Interim Unauditedmore detail in Note 2 to these Condensed Consolidated Financial Data
Our accompanying condensed consolidated financial statementsStatements. The Condensed Consolidated Financial Statements have been prepared by us in accordance with GAAPaccounting principles generally accepted in conjunctionthe United States ("GAAP") for interim financial information and with the rulesinstructions to Form 10-Q and regulationsArticle 10 of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statementsRegulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments, which are,However, except as disclosed herein and specific disclosures included as a result of the Merger, management believes there has been no material change in our opinion, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flowsthe information disclosed in the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. All material intercompany transactions and balances have been eliminated in consolidation.
This interim periods. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such results may be less favorable for the full year. Our accompanying condensed consolidated financial statementsinformation should be read in conjunction with our auditedthe consolidated financial statements and the notes thereto included in our 2016the Company’s Annual Report on Form 10-K.10-K for the year ended December 31, 2022. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. In addition, the interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2023 for many reasons including, but not limited to, acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties.
Principles of Consolidation
The consolidated financial statementsCompany’s Condensed Consolidated Financial Statements include the accounts of ourthe Company, its wholly owned subsidiaries, and consolidated joint venture arrangements.ventures and partnerships where the Company controls the operating activities. GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). Accounting Standards Codification (“ASC”) Topic 810, Consolidation broadly defines a VIE as an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. The portionsCompany identifies the primary beneficiary of a VIE as the enterprise that has both of the HTALP operating partnership not owned by us are presentedfollowing characteristics: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary, with any minority interests reflected as non-controlling interests in our consolidated balance sheets and statements of operations, consolidated statements of comprehensive income or loss, consolidated statements of equity, and consolidated statements of changes in partners’ capital. The portions of other joint venture arrangements not owned by us are presented as redeemable non-controlling interests in our consolidated balance sheets. In addition,the accompanying Condensed Consolidated Financial Statements.


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
The Company may change its original assessment of a VIE upon subsequent events such as describedthe modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk, the disposition of all or a portion of an interest held by the primary beneficiary, or changes in Note 1 - Organizationfacts and Descriptioncircumstances that impact the power to direct activities of Business, certain third parties have been issued OP Unitsthe VIE that most significantly impacts economic performance. The Company performs this analysis on an ongoing basis.
For property holding entities not determined to be VIEs, the Company consolidates such entities in HTALP.which it owns 100% of the equity or has a controlling financial interest evidenced by ownership of a majority voting interest. All intercompany balances and transactions are eliminated in consolidation. For entities in which the Company owns less than 100% of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements.
Healthcare Realty Holdings, L.P., a Delaware limited partnership (the "OP"), is 98.8% owned by the Company. Holders of operating partnership units (“OP UnitsUnits”) are considered to be noncontrollingnon-controlling interest holders in HTALPthe OP and their ownership interests are reflected as equity inon the consolidated balance sheets.accompanying Condensed Consolidated Balance Sheets. Further, a portion of the earnings and losses of HTALPthe OP are allocated to noncontrollingnon-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity. As of SeptemberJune 30, 2017 and December 31, 2016,2023, there were approximately 4.14.7 million and 4.3 million, respectively,OP Units, or 1.2% of OP Unitsunits issued and outstanding.outstanding, held by non-controlling interest holders. Additionally, the Company is the primary beneficiary of this VIE. Accordingly, the Company consolidates the interests in the OP.
As of June 30, 2023, the Company had four consolidated VIEs are entitiesin addition to the OP where investors lack sufficient equity at risk forit is the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack oneprimary beneficiary of the following: (i)VIE based on the powercombination of operational control and the rights to direct the activities that most significantly impact the entity’s economic performance; (ii)receive residual returns or the obligation to absorb losses arising from the expected lossesjoint ventures. Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs, excluding the entity;OP, in the aggregate:
(dollars in thousands)JUNE 30, 2023
Assets:
Net real estate investments$61,980 
Cash and cash equivalents2,107 
Receivables and other assets2,015 
Total assets$66,102 
Liabilities:
Accrued expenses and other liabilities$14,058 
Total equity52,044 
Total liabilities and equity$66,102 
As of June 30, 2023, the Company had three unconsolidated VIEs consisting of two notes receivables and (iii) the right to receive the expected returns of the entity. We consolidate our investment in VIEs when we determine that we are the primary beneficiary. A primary beneficiary is one that has both: (i)joint venture. The Company does not have the power or economic interests to direct the activities of the VIEVIEs on a stand-alone basis, and therefore it was determined that most significantly impacts the entity’s economic performance;Company was not the primary beneficiary. As a result, the Company accounts for the two notes receivables as amortized cost and (ii)a joint venture arrangement under the obligation to absorb losses orequity method. See below for additional information regarding the right to receive benefitsCompany's unconsolidated VIEs.
(dollars in thousands) ORIGINATION DATELOCATIONSOURCECARRYING AMOUNTMAXIMUM EXPOSURE TO LOSS
2021
Houston, TX 1
Note receivable$30,445 $31,150 
2021
Charlotte, NC 1
Note receivable5,691 6,000 
2022
Texas 2
Joint venture64,758 64,758 
1Assumed mortgage note receivable in connection with the Merger.
2Includes investments in seven properties.


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
As of June 30, 2023, the VIE that could be significant to the entity. The HTALP operating partnership and our otherCompany's unconsolidated joint venture arrangements are VIEs because the limited partners in those partnerships, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights. Additionally, we determined that we are the primary beneficiary of our VIEs. Accordingly, we consolidate our interests in the HTALP operating partnership and in our other joint venture arrangements. However, because we hold what is deemed a majority voting interest in the HTALP operating partnership and our other joint venture arrangements, it qualifieswere accounted for the exemption from providing certain disclosure requirements associated with investments in VIEs. We will evaluate on an ongoing basis the need to consolidate entities based on the standards set forth in GAAP as described above.
Unconsolidated Joint Ventures
We account for our investments in unconsolidated joint ventures using the equity method of accounting because we haveas the ability to exerciseCompany exercised significant influence over but did not control overthese entities. See Note 3 below for more details regarding the financial and operational policy decisionsCompany's unconsolidated joint ventures.
Use of Estimates in the Condensed Consolidated Financial Statements
Preparation of the investments. UsingCondensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates.
Reclassifications
Certain reclassifications have been made on the Company's prior year Condensed Consolidated Balance Sheet to conform to current year presentation. Previously, the Company's Lease intangibles were included in Building, improvements and lease intangibles and Goodwill was included with Other assets, net. These amounts are now classified as separate line items on the Company's Condensed Consolidated Balance Sheets.
Redeemable Non-Controlling Interests
The Company accounts for redeemable equity methodsecurities in accordance with ASC Topic 480: Accounting for Redeemable Equity Instruments, which requires that equity securities redeemable at the option of accounting,the holder, not solely within our control, be classified outside permanent stockholders’ equity. The Company classifies redeemable equity securities as redeemable non-controlling interests in the accompanying Condensed Consolidated Balance Sheets. Accordingly, the Company records the carrying amount at the greater of the initial investment is recognized at cost and subsequently adjustedcarrying amount (increased or decreased for ourthe non-controlling interest’s share of the net income or loss and any distributions fromdistributions) or the joint venture.redemption value. We measure the redemption value and record an adjustment to the carrying value of the equity securities as a component of redeemable non-controlling interest. As of SeptemberJune 30, 2017, we2023, the Company had redeemable non-controlling interests of $2.5 million.
Asset Impairment
The Company assesses the potential for impairment of identifiable, definite-lived, intangible assets and long-lived assets, including real estate properties, whenever the occurrence of an event or a 50% interestchange in one such investment with acircumstances indicates that the carrying value maximum exposuremight not be fully recoverable. Indicators of impairment may include significant underperformance of an asset relative to risk, of $68.3 million, which is recorded in investment in unconsolidated joint venturehistorical or expected operating results; significant changes in the accompanying condensed consolidated balance sheets. We record our shareCompany’s use of net income (loss)assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in income (loss) from unconsolidated joint venture ina property; or significant negative economic trends or negative industry trends for the accompanying condensed consolidated statements of operations. ForCompany or its tenants. During the three and ninesix months ended SeptemberJune 30, 2017, we2023, the Company recognized incomereal estate impairments totaling $55.2 million and $81.4 million, respectively, as a result of $318,000 and $381,000, respectively, from our unconsolidated joint venture.completed or planned disposition activity.
Investments in Real EstateLeases - Financing Receivables, Net
Depreciation expenseIn accordance with ASC Topic 842: Leases, for transactions in which the Company enters into a contract to acquire an asset and leases it back to the seller (i.e., a sale leaseback transaction), control of buildings and improvementsthe asset is not considered to have transferred when the seller-lessee has a purchase option. As a result, the Company does not recognize the underlying real estate asset but instead recognizes a financial asset in accordance with ASC Topic 310: Receivables. See below for additional information regarding the three months ended September 30, 2017 and 2016 was $49.8 million and $31.1 million, respectively. Depreciation expense of buildings and improvements for the nine months ended September 30, 2017 and 2016 was $121.5 million and $86.6 million, respectively.Company's financing receivables.

(dollars in thousands) ORIGINATION DATELOCATIONINTEREST RATECARRYING VALUE as of JUNE 30, 2023
May 2021Poway, CA5.73%$113,967 
November 2021Columbus, OH6.48%7,348 
$121,315 




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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, – (Continued)cont.

Real Estate Notes Receivable
Recently IssuedReal estate notes receivable consists of mezzanine and other real estate loans, which are generally collateralized by a pledge of the borrower’s ownership interest in the respective real estate owner, a mortgage or Adopted Accounting Pronouncementsdeed of trust, and/or corporate guarantees. Real estate notes receivable are intended to be held-to-maturity and are recorded at amortized cost, net of unamortized loan origination costs and fees and allowance for credit losses. As of June 30, 2023, real estate notes receivable, net, which are included in Other assets on the Company's Condensed Consolidated Balance Sheets, totaled $151.5 million.
(dollars in thousands)ORIGINATIONMATURITYSTATED INTEREST RATEMAXIMUM LOAN COMMITMENTOUTSTANDING as of
JUNE 30, 2023		ALLOWANCE FOR CREDIT LOSSESFAIR VALUE DISCOUNT AND FEESCARRYING VALUE as of JUNE 30, 2023
Mezzanine loans
Texas6/24/20216/24/20248.00 %$54,119 $54,119 $(5,196)$(3,067)$45,856 
Mortgage loans
Texas6/30/202112/31/20237.00 %31,150 31,150 — (705)30,445 
North Carolina12/22/202112/22/20248.00 %6,000 6,000 — (309)5,691 
Florida5/17/20222/27/20266.00 %65,000 24,556 — (55)24,501 
California3/30/20233/29/20266.00 %45,000 45,000 — — 45,000 
147,150 106,706 — (1,069)105,637 
$201,269 $160,825 $(5,196)$(4,136)$151,493 
Allowance for Credit Losses
Pursuant to ASC Topic 326, Financial Instruments - Credit Losses, the Company adopted a policy to evaluate current expected credit losses at the inception of loans qualifying for treatment under ASC Topic 326. The Company utilizes a probability of default method approach for estimating current expected credit losses and evaluates the liquidity and creditworthiness of its borrowers on a quarterly basis to determine whether any updates to the future expected losses recognized upon inception are necessary. The Company’s evaluation considers industry and economic conditions, credit enhancements, liquidity, and other factors.
In its assessment of current expected credit losses for real estate notes receivable, the Company utilizes past payment history of its borrowers, current economic conditions, and forecasted economic conditions through the maturity date of each note to estimate a probability of default and a resulting loss for each real estate note receivable. During the six months ended June 30, 2023, the Company determined that the risk of credit loss on its mezzanine loans was no longer remote. Consequently, the Company recorded a credit loss reserve of $5.2 million for the six months ended June 30, 2023.
The following table provides a brief description of recently adopted accounting pronouncements:    
summarizes the Company's allowance for credit losses on real estate notes receivable:
Accounting PronouncementDollars in thousandsJune 30, 2023DescriptionDecember 31, 2022Effective DateEffect on financial statements
ASU 2017-01
Business Combinations:
Clarifying the Definition of a Business
(Issued January 2017)
ASU 2017-01 clarifies the definition of a business by adding guidance to assist entities evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting, including, but not limited to, acquisitions, disposals, goodwill and consolidation.ASU 2017-01 is effective for fiscal years beginning after December 15, 2017 with early adoption permitted.We adopted ASU 2017-01 as of January 1, 2017 on a prospective basis. We expect that the majority of our future investments in real estate will be accounted for as asset acquisitions under ASU 2017-01. The adoption of ASU 2017-01 will impact how we account for acquisition-related expenses and contingent consideration, which may result in lower acquisition-related expenses and eliminate fair value adjustments related to future contingent consideration arrangements.
The following table provides a brief description of recently issued accounting pronouncements:
Allowance for credit losses, beginning of period$— $— 
Accounting PronouncementCredit loss reserves5,196 Description— Effective DateEffect on financial statements
ASU 2014-09
Revenue from Contracts with Customers
(Issued May 2014)
Allowance for credit losses, end of period		$
ASU 2014-09 is a comprehensive new five-step model requiring a company to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (i.e., payment) to which the company expects to be entitled in exchange for those goods or services. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to ASU 2014-09. In adopting ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach.

5,196 
In August 2015, the FASB deferred the effective date of ASU 2014-09 to the first interim period within annual reporting periods beginning after December 15, 2017 along with the right of early adoption as of the original effective date.

$		— We have identified all of our revenue streams and concluded rental income from leasing arrangements represents a substantial portion of our revenue and is specifically excluded from ASU 2014-09 and will be governed and evaluated with the anticipated adoption of ASU 2016-02 as described below. Upon adoption of ASU 2016-02, ASU 2014-09 may apply to executory costs and other components of revenue due under leases that are deemed to be non-lease components (such as common area maintenance and other reimbursement revenue), even when the revenue for such activities is not separately stipulated in the lease. In that case, the revenue from these items previously recognized on a straight-line basis under the current lease guidance would be recognized under the new revenue guidance as the related services are delivered. As a result, while total revenue recognized over time would not differ under the new guidance, the recognition pattern would be different. Under ASU 2014-09, revenue recognition for real estate sales is largely based on the transfer of control versus continuing involvement under the current guidance. Upon adoption, there will not be a material impact on our consolidated financial statements since we have historically disposed of the majority of our properties with no future controls or contingencies. We will adopt ASU 2014-09 effective January 1, 2018 using the modified retrospective approach.
ASU 2016-02
Leases
(Issued February 2016)
ASU 2016-02 will supersede the existing guidance for lease accounting and states that companies will be required to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. ASU 2016-02 requires qualitative and quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand the nature of the entity’s leasing activities, including significant judgments and changes in judgments. Within ASU 2016-02 lessor accounting remained fairly unchanged. In adopting ASU 2016-02, companies will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements.
ASU 2016-02 is effective for the fiscal years beginning after December 15, 2018 with early adoption permitted.
We are still evaluating the full impact of ASU 2016-02 on our consolidated financial statements, however, we will adopt ASU 2016-02 as of January 1, 2019 and anticipate that we will elect a practical expedient offered in ASU 2016-02 that allows an entity to not reassess the following upon adoption (elected as a group): (i) whether an expired or existing contract contains a lease arrangement; (ii) lease classification related to expired or existing lease arrangements; or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs. As a result of the adoption, all new or amended leases for which we are the lessee, including corporate and ground leases, that are entered into on or after January 1, 2019, will be recorded on our consolidated financial statements as either financing leases or operating leases with a related right of use asset and lease liability. In addition, we expect that certain executory and non-lease components, such as common area maintenance, will need to be accounted for separately from the lease component of the lease. Lease components will continue to be recognized on a straight-line basis over the lease term and certain non-lease components will be accounted for under the new revenue recognition guidance in ASU 2014-09 as mentioned above.

Interest Income
Income from Lease Financing Receivables
The Company recognized the related income from two financing receivables totaling $2.1 million and $4.2 million, respectively, for the three and six months ended June 30, 2023, and $2.0 million and $3.9 million, respectively for the three and six months ended June 30, 2022, based on an imputed interest rate over the terms of the applicable lease. As a result, the interest recognized from the financing receivable in any particular period will not equal the cash payments from the lease agreement in that period.
Acquisition costs incurred in connection with entering into the financing receivable are treated as loan origination fees. These costs are classified with the financing receivable and are included in the balance of the net investment.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, – (Continued)cont.

Amortization of these amounts will be recognized as a reduction to Income from financing receivable, net over the life of the lease.
Income from Real Estate Notes Receivable
During the three and six months ended June 30, 2023, the Company recognized interest income of $2.2 million and $4.3 million, respectively, related to real estate notes receivable. The Company recognizes interest income on an accrual basis unless the Company has determined that collectability of contractual amounts is not reasonably assured, at which point the note is placed on non-accrual status and interest income is recognized on a cash basis. As of June 30, 2023, the Company placed two of its real estate notes receivable with principal balances of $48.9 million on non-accrual status and accordingly did not recognize any interest income for the three and six month periods ended June 30, 2023.
Revenue from Contracts with Customers (ASC Topic 606)
The Company recognizes certain revenue under the core principle of Topic 606. This topic requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease revenue is not within the scope of Topic 606. To achieve the core principle, the Company applies the five step model specified in the guidance.
Revenue that is accounted for under Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Operations in the Other operating line item. This line item includes parking income, management fee income and other miscellaneous income. Below is a detail of the amounts by category:
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
in thousands2023202220232022
Type of Revenue
Parking income$2,370 $1,919 $4,761 $3,672 
Management fee income 1
1,597 783 3,570 1,438 
Miscellaneous263 36 516 103 
$4,230 $2,738 $8,847 $5,213 
1 Includes the recovery of certain expenses under the financing receivable as outlined in the management agreement.

The Company’s major types of revenue that are accounted for under Topic 606 that are listed above are all accounted for as the performance obligation is satisfied. The performance obligations that are identified for each of these items are satisfied over time, and the Company recognizes revenue monthly based on this principle.

Note 2. Merger with HTA

On July 20, 2022 (the “Closing Date”), pursuant to the Agreement and Plan of Merger dated as of February 28, 2022 (the “Merger Agreement”), by and among Healthcare Realty Trust Incorporated, a Maryland corporation (now known as HRTI, LLC, a Maryland limited liability company) (“Legacy HR”), Healthcare Trust of America, Inc., a Maryland corporation (now known as Healthcare Realty Trust Incorporated) (“Legacy HTA”), the OP, and HR Acquisition 2, LLC, a Maryland limited liability company (“Merger Sub”), Merger Sub merged with and into Legacy HR, with Legacy HR continuing as the surviving entity and a wholly-owned subsidiary of Legacy HTA (the “Merger”).
On the Closing Date, each outstanding share of Legacy HR common stock, $0.01 par value per share (the “Legacy HR Common Stock”), was cancelled and converted into the right to receive one share of Legacy HTA class A common stock at a fixed ratio of 1.00 to 1.00. Per the terms of the Merger Agreement, Legacy HTA declared a special dividend of $4.82 (the “Special Dividend”) for each outstanding share of Legacy HTA class A common stock, $0.01 par value per share ( the “Legacy HTA Common Stock”), and the OP declared a corresponding distribution to the holders of its partnership units, payable to Legacy HTA stockholders and OP unitholders of record on July 19, 2022.


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Immediately following the Merger, Legacy HR converted to a Maryland limited liability company and changed its name to HRTI, LLC and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”. In addition, the equity interests of Legacy HR were contributed by Legacy HTA by means of a contribution and assignment agreement to the OP, and Legacy HR became a wholly-owned subsidiary of the OP. The Company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $0.01 par value per share, trade on the New York Stock Exchange under the ticker symbol “HR”.
For accounting purposes, the Merger was treated as a “reverse acquisition” in which Legacy HTA was considered the legal acquirer and Legacy HR was considered the accounting acquirer based on various factors, including, but not limited to: (i) the composition of the board of directors of the combined company following the Merger, (ii) the composition of senior management of the combined company following the Merger, and (iii) the premium transferred to the Legacy HTA stockholders. As a result, the historical financial statements of the accounting acquirer, Legacy HR, became the historical financial statements of the Company.
The acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires, among other things, the assets acquired and the liabilities assumed and non-controlling interests, if any, to be recognized at their acquisition date fair value.
The implied consideration transferred on the Closing Date is as follows:
Accounting PronouncementDollars in thousands, except for per share dataDescriptionEffective DateEffect on financial statements
ASU 2016-13
Financial Instruments Credit Losses: MeasurementShares of Credit Losses on Financial Instruments
(Issued June 2016)Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted(a)
228,520,990 ASU 2016-13 is intended to improve financial reporting by requiring more timely recognition
Exchange ratio1.00 
Implied shares of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis.
Legacy HR Common Stock issued		228,520,990 ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted.
We do not anticipate early adoption or there to be a material impact, however, we are evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements.
ASU 2016-15
StatementAdjusted closing price of Cash Flows: ClassificationLegacy HR Common Stock on July 20, 2022(b)
$24.37 
Value of Certain Cash Receipts and Cash Payments
(Issued August 2016)implied Legacy HR Common Stock issued		$ASU 2016-15 clarifies the guidance on the classification of certain cash receipts and payments in the statement of cash flows to reduce diversity in practice with respect to: (i) debt prepayment or debt extinguishment costs; (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (iii) contingent consideration payments made after a business combination; (iv) proceeds from the settlement of insurance claims; (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (vi) distributions received from equity method investees; (vii) beneficial interests in securitization transactions; and (viii) separately identifiable cash flows and application of the predominance principle.5,569,057 ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 with early adoption permitted.
We will adopt ASU 2016-15 during the fourth quarter of 2017 and apply the standard retrospectively for all periods presented. We will reclass cash payments related to debt prepayment and extinguishment costs from operating activities to financing activities. Based on our initial assessment the other listed provisions will not have a material impact on our consolidated financial statements and related notes resulting from the adoption of this standard.
ASU 2016-18
StatementFair value of Cash Flows: Restricted Cash
(Issued November 2016)Legacy HTA restricted stock awards attributable to pre-Merger services(c)
7,406 ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.
ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 with early adoption permitted.
We will adopt ASU 2016-18 during the fourth quarter of 2017 and apply the standard retrospectively for all periods presented. Restricted cash and escrow deposits consist primarily of cash escrowed for real estate acquisitions, real estate taxes, property insurance and capital improvements. We will provide a reconciliation of the changes in cash and cash equivalents and restricted cash and escrow deposits within our consolidated balance sheets to the consolidated statement of cash flows.
ASU 2017-05
Other Income: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets
(Issued February 2017)
Consideration transferred		$ASU 2017-05 defines an in-substance nonfinancial asset, unifies guidance related to partial sales of nonfinancial assets, eliminates rules specifically addressing the sales of real estate, removes exception to the financial asset derecognition model and clarifies the accounting for contributions of nonfinancial assets to joint ventures.5,576,463 ASU 2017-05 is effective for fiscal years beginning after December 15, 2017 with early adoption permitted.We will adopt ASU 2017-05 as of January 1, 2018. We do not anticipate there to be a material impact on our consolidated financial statements, as we currently do not have this type of income. However, going forward we will continue to monitor any future impact.
ASU 2017-09
Compensation - Stock Compensation (Topic 718): Clarifying the Scope of Modification (Issued May 2017)
ASU 2017-09 amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718.ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 with early adoption permitted.We will adopt ASU 2017-09 as of January 1, 2018. We do not anticipate there to be a material impact on our consolidated financial statements.
ASU 2017-12
Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Issued August 2017)
ASU 2017-12 expands and refines hedge accounting for both financial (e.g., interest rate) and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness.ASU 2017-12 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted.We do not anticipate early adoption, however, we are evaluating the impact of adopting ASU 2017-12 on our consolidated financial statements.

(a) The number of shares of Legacy HTA Common Stock presented above was based on 228,857,717 total shares of Legacy HTA Common Stock outstanding as of the Closing Date, less 192 Legacy HTA fractional shares that were cancelled in lieu of cash and less 336,535 shares of Legacy HTA restricted stock (net of 215,764 shares of Legacy HTA restricted stock withheld). For accounting purposes, these shares were converted to Legacy HR Common Stock, at an exchange ratio of 1.00 share of Legacy HR Common Stock per share of Legacy HTA Common Stock.
(b) For accounting purposes, the fair value of Legacy HR Common Stock issued to former holders of Legacy HTA Common Stock was based on the per share closing price of Legacy HR Common Stock on July 20, 2022.
(c) Represents the fair value of Legacy HTA restricted shares which fully vested prior to the closing of the Merger or became fully vested as a result of the closing of the Merger and which are attributable to pre-combination services.













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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, – (Continued)cont.

Preliminary Purchase Price Allocation
3. Investments in Real Estate
Our investments, including the Duke Acquisition, brings our total investments for the nine months ended September 30, 2017, to an aggregate purchase price of $2.7 billion. As part of these investments, we incurred $17.2 million of costs attributable to these investments, which were capitalized in accordance with the adoption of ASU 2017-01 during the nine months ended September 30, 2017. In addition, as part of an acquisition, we issued 20,687 OP Units with a market value at the time of issuance of $0.6 million.
The allocations for these investments, in which we own a controlling financial interest, are set forth below in the aggregate for the nine months ended September 30, 2017 and 2016, respectively (in thousands):
 Nine Months Ended September 30,
 2017 2016
Land$93,064
 $77,949
Building and improvements2,336,544
 505,138
In place leases187,890
 50,997
Below market leases(27,817) (12,790)
Above market leases11,718
 4,413
Below market leasehold interests54,252
 4,188
Above market leasehold interests(8,978) (50)
Below market debt—
 360
Interest rate swaps—
 (779)
Net assets acquired2,646,673
 629,426
Other, net (1)
60,781
 3,540
Aggregate purchase price$2,707,454
 $632,966
    
(1) For the nine months ended September 30, 2017, other, net, consisted primarily of capital expenditures and tenant improvements received as credits at the time of acquisition.
Subsequent to September 30, 2017, we completed an investment with a purchase price of $8.3 million. As part of the acquisition, we issued to the seller as a part of the acquisition consideration a total of 16,972 OP Units with a market value at the time of issuance of $0.5 million. The purchase price of this investment was subject to certain post-closing adjustments. Due to the recent timing of this investment, we have not yet completed our purchase price allocation with respect to this investment and, therefore, we cannot provide disclosures at this time similar to those set forth above in Note 3 - Investments in Real Estate to our condensed consolidated financial statements.
The acquired intangible assets and liabilities referenced above had weighted average lives of the following for the nine months ended September 30, 2017 and 2016, respectively (in years):
 Nine Months Ended September 30,
 2017 2016
Acquired intangible assets20.6 9.1
Acquired intangible liabilities19.9 8.3
4. Impairment and Dispositions
During the nine months ended September 30, 2017, we completed the disposition of an MOB located in Texas for a gross sales price of $5.0 million, representing approximately 48,000 square feet of GLA. In addition, during the nine months ended September 30, 2017, we recorded impairment charges of $5.1 million related to one MOB located in Massachusetts. During the nine months ended September 30, 2016, we completed a disposition of four senior care facilities for an aggregate gross sales price of $26.5 million. During the nine months ended September 30, 2016, we recorded no impairment charges.

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

5. Intangible Assets and Liabilities
Intangible assets and liabilities consisted of the following as of September 30, 2017 and December 31, 2016, respectively (in thousands, except weighted average remaining amortization):
 September 30, 2017 December 31, 2016
 Balance 
Weighted Average Remaining
Amortization in Years
 Balance 
Weighted Average Remaining
Amortization in Years
Assets:       
In place leases$478,052
 9.7 $294,597
 9.7
Tenant relationships170,539
 10.7 172,974
 10.6
Above market leases39,724
 6.3 28,401
 6.3
Below market leasehold interests92,362
 63.4 38,136
 60.4
 780,677
   534,108
  
Accumulated amortization(299,398)   (256,305)  
Total$481,279
 19.2 $277,803
 16.1
        
Liabilities:       
Below market leases$61,788
 14.7 $34,370
 18.6
Above market leasehold interests20,610
 50.3 11,632
 53.0
 82,398
   46,002
  
Accumulated amortization(12,546)   (8,946)  
Total$69,852
 24.9 $37,056
 28.5
The following is a summary of the net intangible amortization for the three and nine months ended September 30, 2017 and 2016, respectively (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Amortization recorded against rental income related to above and (below) market leases$(108) $(115) $(371) $202
Rental expense related to above and (below) market leasehold interests322
 118
 617
 321
Amortization expense related to in place leases and tenant relationships18,757
 15,266
 45,944
 39,483
6. Receivables and Other Assets
Receivables and other assets consisted of the following as of September 30, 2017 and December 31, 2016, respectively (in thousands):
 September 30, 2017 December 31, 2016
Tenant receivables, net$14,417
 $8,722
Other receivables, net10,161
 9,233
Deferred financing costs, net8,190
 4,198
Deferred leasing costs, net23,794
 20,811
Straight-line rent receivables, net83,133
 74,052
Prepaid expenses, deposits, equipment and other, net65,383
 55,904
Derivative financial instruments - interest rate swaps952
 541
Total$206,030
 $173,461

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following is a summary of the amortization of deferred leasing costs and financing costs for the three and nine months ended September 30, 2017 and 2016, respectively (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Amortization expense related to deferred leasing costs$1,445
 $1,224
 $4,179
 $3,368
Interest expense related to deferred financing costs398
 331
 1,061
 994
7. Debt
Debt consisted of the following as of September 30, 2017 and December 31, 2016, respectively (in thousands):
 September 30, 2017 December 31, 2016
Unsecured revolving credit facility$75,000
 $88,000
Unsecured term loans500,000
 500,000
Unsecured senior notes1,850,000
 950,000
Fixed rate mortgages loans415,853
 204,562
Variable rate mortgages loans38,169
 38,904
 2,879,022
 1,781,466
Deferred financing costs, net(16,552) (9,527)
Discount, net(5,712) (3,034)
Total$2,856,758
 $1,768,905
Unsecured Credit Agreement
Unsecured Revolving Credit Facility due 2022
On July 27, 2017, HTALP entered into an amended and restated $1.3 billion unsecured credit agreement (the “Unsecured Credit Agreement”) which increased the amount available under the unsecured revolving credit facility to $1.0 billion and extended the maturities of the unsecured revolving credit facility to June 30, 2022 and for the $300.0 million unsecured term loan referenced below until February 1, 2023. The maximum principal amount of the Unsecured Credit Agreement may be increased by up to $750.0 million, subject to certain conditions, for a total principal amount of $2.05 billion.
Borrowings under the unsecured revolving credit facility accrue interest at a rate equal to adjusted LIBOR, plus a margin ranging from 0.83% to 1.55% per annum based on our credit rating. We also pay a facility fee ranging from 0.13% to 0.30% per annum on the aggregate commitments under the unsecured revolving credit facility. As of September 30, 2017, the margin associated with our borrowings was 1.00% per annum and the facility fee was 0.20% per annum.
Unsecured Term Loan due 2023
On July 27, 2017, we entered into an amended and restated Unsecured Credit Agreement as noted above. As part of this agreement, we obtained a $300.0 million unsecured term loan that was guaranteed by us with a maturity date of February 1, 2023. Borrowings under this unsecured term loan accrue interest equal to adjusted LIBOR, plus a margin ranging from 0.90% to 1.75% per annum based on our credit rating. The margin associated with our borrowings as of September 30, 2017 was 1.10% per annum. Including the impact of the interest rate swaps associated with our unsecured term loan, the interest rate was 2.40% per annum, based on our current credit rating. As of September 30, 2017, HTALP had $300.0 million under this unsecured term loan outstanding.
Bridge Loan Facility
In connection with the Duke Acquisition, in May 2017, we entered into a senior unsecured bridge loan facility (the “Bridge Loan Facility”) which provided to us up to $2.47 billion, less the aggregate amount of net proceeds from debt or equity capital raises or a senior term loan facility. The Bridge Loan Facility was made available to us on the closing of the Duke Acquisition and was scheduled to mature 364 days from the closing. In June 2017, we terminated the Bridge Loan Facility and no proceeds were used because we elected to fund the Duke Acquisition through other equity and debt offerings. In connection with the execution and subsequent termination of the Bridge Loan Facility, we incurred $10.4 million in related fees, which we recorded in income (loss) on extinguishment of debt in the accompanying condensed consolidated statements of operations.

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

$200.0 Million Unsecured Term Loan due 2023
As of September 30, 2017, HTALP had a $200.0 million unsecured term loan outstanding, which matures on September 26, 2023. Borrowings under the unsecured term loan accrue interest at a rate equal to LIBOR, plus a margin ranging from 1.50% to 2.45% per annum based on our credit rating. The margin associated with our borrowings as of September 30, 2017 was 1.65% per annum. HTALP had interest rate swaps in place that fixed the interest rate at 2.93% per annum, based on our current credit rating.
$300.0 Million Unsecured Senior Notes due 2021
As of September 30, 2017, HTALP had $300.0 million of unsecured senior notes outstanding that are guaranteed by us. These unsecured senior notes are registered under the Securities Act of 1933, as amended (the “Securities Act”), bear interest at 3.38% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.21% of the principal amount thereof, with an effective yield to maturity of 3.50% per annum. As of September 30, 2017, HTALP had $300.0 million of these unsecured senior notes outstanding that mature on July 15, 2021.
$400.0 Million Unsecured Senior Notes due 2022
In June 2017, in connection with the Duke Acquisition and the $500.0 million unsecured senior notes due 2027 referenced below, HTALP issued $400.0 million of unsecured senior notes that are guaranteed by us. These unsecured senior notes are registered under the Securities Act, bear interest at 2.95% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.94% of the principal amount thereof, with an effective yield to maturity of 2.96% per annum. As of September 30, 2017, HTALP had $400.0 million of these unsecured senior notes outstanding that mature on July 1, 2022.
$300.0 Million Unsecured Senior Notes due 2023
As of September 30, 2017, HTALP had $300.0 million of unsecured senior notes outstanding that are guaranteed by us. These unsecured senior notes are registered under the Securities Act, bear interest at 3.70% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.19% of the principal amount thereof, with an effective yield to maturity of 3.80% per annum. As of September 30, 2017, HTALP had $300.0 million of these unsecured senior notes outstanding that mature on April 15, 2023.
$350.0 Million Unsecured Senior Notes due 2026
As of September 30, 2017, HTALP had $350.0 million of unsecured senior notes outstanding that are guaranteed by us. These unsecured senior notes are registered under the Securities Act, bear interest at 3.50% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.72% of the principal amount thereof, with an effective yield to maturity of 3.53% per annum. As of September 30, 2017, HTALP had $350.0 million of these unsecured senior notes outstanding that mature on August 1, 2026.
$500.0 Million Unsecured Senior Notes due 2027
In June 2017, in connection with the Duke Acquisition and the $400.0 million unsecured senior notes due 2022 referenced above, HTALP issued $500.0 million of unsecured senior notes that are guaranteed by us. These unsecured senior notes are registered under the Securities Act, bear interest at 3.75% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.49% of the principal amount thereof, with an effective yield to maturity of 3.81% per annum. As of September 30, 2017, HTALP had $500.0 million of these unsecured senior notes outstanding that mature on July 1, 2027.
Fixed and Variable Rate Mortgages
In June 2017, as part of the Duke Acquisition, we were required by the seller to execute as the borrower for a part of the purchase price a senior secured first lien loan, subject to customary non-recourse carve-outs, in the amount of $286.0 million (the “Promissory Note”). The Promissory Note bears interest at 4.0% per annum and is payable in three equal payments maturing on January 10, 2020 and is guaranteed by us.
As of September 30, 2017, HTALP and its subsidiaries had fixed and variable rate mortgages loans with interest rates ranging from 2.70% to 6.39% per annum and a weighted average interest rate of 4.31% per annum. Including the impact of the interest rate swap associated with our variable rate mortgages, the weighted average interest rate was 4.46% per annum.

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Future Debt Maturities
The following table summarizes the debt maturitiespreliminary estimated fair values of the assets acquired and scheduled principal repaymentsliabilities assumed at the Closing Date:
Dollars in thousandsPRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE CUMULATIVE MEASUREMENT PERIOD ADJUSTMENTSPRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE
(as adjusted)
ASSETS
Real estate investments
Land$985,926 $18,359 $1,004,285 
Buildings and improvements6,960,418 (119,135)6,841,283 
Lease intangible assets(a)
831,920 1,839 833,759 
Financing lease right-of-use assets9,874 3,146 13,020 
Construction in progress10,071 (6,744)3,327 
Land held for development46,538 — 46,538 
Total real estate investments$8,844,747 $(102,535)$8,742,212 
Assets held for sale, net707,442 (7,946)699,496 
Investments in unconsolidated joint ventures67,892 — 67,892 
Cash and cash equivalents26,034 11,403 37,437 
Restricted cash1,123,647 (1,247)1,122,400 
Operating lease right-of-use assets198,261 16,370 214,631 
Other assets, net (b) (c)
209,163 (3,840)205,323 
Total assets acquired$11,177,186 $(87,795)$11,089,391 
LIABILITIES
Notes and bonds payable$3,991,300 $— $3,991,300 
Accounts payable and accrued liabilities1,227,570 17,374 1,244,944 
Liabilities of assets held for sale28,677 (3,939)24,738 
Operating lease liabilities173,948 10,173 184,121 
Financing lease liabilities10,720 (855)9,865 
Other liabilities203,210 (8,909)194,301 
Total liabilities assumed$5,635,425 $13,844 $5,649,269 
Net identifiable assets acquired$5,541,761 $(101,639)$5,440,122 
Non-controlling interest$110,702 $— $110,702 
Goodwill$145,404 $101,639 $247,043 
(a) The weighted average amortization period for the acquired lease intangible assets is approximately 6 years.
(b) Includes $15.9 million of contractual accounts receivable, which approximates fair value.
(c) Includes $78.7 million of gross contractual real estate notes receivable, the fair value of which was $74.8 million, and the Company preliminarily expects to collect substantially all of the real estate notes receivable proceeds as of the Closing Date.
The cumulative measurement period adjustments recorded through June 30, 2023 primarily resulted from updated valuations related to the Company’s real estate assets and liabilities and additional information obtained by the Company related to the properties acquired in the Merger and their respective tenants, and resulted in an increase to goodwill of our indebtedness$101.6 million.
As of June 30, 2023, the Company had not finalized the determination of fair value of certain tangible and intangible assets acquired and liabilities assumed, including, but not limited to real estate assets and liabilities, notes receivables and goodwill. As such, the assessment of fair value of assets acquired and liabilities assumed is preliminary and was based on information that was available at the time the Condensed Consolidated Financial Statements were prepared. The finalization of the purchase accounting assessment could result in material changes to the Company’s determination of the fair value of assets acquired and liabilities assumed, which will be recorded as measurement period adjustments in the period in which they are identified, up to one year from the Closing Date.


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
A preliminary estimate of approximately $247.0 million has been allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. The recognized goodwill is attributable to expected synergies and benefits arising from the Merger, including anticipated general and administrative cost savings and potential economies of scale benefits in both tenant and vendor relationships following the closing of the Merger. None of the goodwill recognized is expected to be deductible for tax purposes.
Merger-related Costs
The Company incurred Merger-related costs of $(15.7) million and $(10.8) million, respectively, during the three and six months ended June 30, 2023, which were included within Merger-related costs in results of operations. The Merger-related costs primarily consist of legal, consulting, severance, and banking services and included a refund of $17.8 million for transfer taxes paid during the year ended December 31, 2022.
Subsequent Activity
As of the date of these financial statements, the purchase price allocation of fair value was finalized with no additional adjustments. The Company determined the final fair value of net assets acquired based on information available during the measurement period.
Note 3. Real Estate Investments
2023 Acquisition Activity
The following table details the Company's real estate acquisition activity for the six months ended June 30, 2023:
Dollars in thousandsDATE ACQUIREDPURCHASE PRICE
CASH
CONSIDERATION 1
REAL
ESTATE
OTHER 2
SQUARE FOOTAGE
Tampa, FL3/10/23$31,500 $30,499 $30,596 $(97)115,867 
1Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.
2Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition.

In the second quarter of 2023, the Company entered into a joint venture agreement for the development of a medical office building in Scottsdale, Arizona. The Company holds a 90% interest in the joint venture and determined the arrangement meets the criteria to be consolidated. The joint venture acquired an $8.8 million land parcel to be developed with the Company contributing cash of $8.3 million.

Subsequent to June 30, 2023, the Company acquired the following property:
Dollars in thousandsDATE ACQUIREDPURCHASE PRICESQUARE FOOTAGE
Colorado Springs, CO7/28/23$11,450 42,770 


Unconsolidated Joint Ventures
The Company's investment in and loss recognized for the three and six months ended June 30, 2023 and 2022 related to its unconsolidated joint ventures accounted for under the equity method are shown in the table below:


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
Dollars in thousands2023202220232022
Investments in unconsolidated joint ventures, beginning of period$327,746 $211,195 $327,248 $161,942 
New investment during the period 1
— — 3,824 49,599 
Equity loss recognized during the period(17)(307)(797)(652)
Owner distributions(484)(107)(3,030)(108)
Investments in unconsolidated joint ventures, end of period$327,245 $210,781 $327,245 $210,781 

1In 2023, this was an additional investment in an existing joint venture in which the Company owns a 40% ownership interest. The investment consisted of a sale of a property in Dallas, Texas to the joint venture. See 2023 Real Estate Asset Dispositions below for additional information.
2023 Real Estate Asset Dispositions
The following table details the Company's dispositions for the six months ended June 30, 2023:
Dollars in thousandsDATE DISPOSEDSALE PRICECLOSING ADJUSTMENTSCOMPANY-FINANCED MORTGAGE NOTESNET PROCEEDSNET REAL ESTATE INVESTMENT
OTHER (INCLUDING RECEIVABLES) 1
GAIN/(IMPAIRMENT)SQUARE FOOTAGE
Tampa, FL & Miami, FL2
1/12/23$93,250 $(5,875)$— $87,375 $87,302 $(888)$961 224,037 
Dallas, TX 3
1/30/2319,210 (141)— 19,069 18,986 43 40 36,691 
St. Louis, MO2/10/23350 (18)— 332 398 — (66)6,500 
Los Angeles, CA3/23/2321,000 (526)— 20,474 20,610 52 (188)37,165 
Los Angeles, CA 4
3/30/2375,000 (8,079)(45,000)21,921 88,624 (803)(20,900)147,078 
Los Angeles, CA 5
5/12/233,300 (334)— 2,966 3,268 — (302)— 
Albany, NY6/30/2310,000 (1,229)— 8,771 2,613 (1,040)7,198 40,870 
Total dispositions$222,110 $(16,202)$(45,000)$160,908 $221,801 $(2,636)$(13,257)492,341 
1Includes straight-line rent receivables, leasing commissions and lease inducements.
2Includes two properties, sold in two separate transactions to the same buyer on the same date.
3The Company sold this property to a joint venture in which it retained a 40% interest. Sales price and square footage reflect the total sales price paid by the joint venture and total square footage of the property.
4The Company entered into a mortgage note agreement with the buyer for $45 million.
5The Company sold a land parcel totaling 0.34 acres.



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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Subsequent to June 30, 2023, the Company disposed of the following property:
Dollars in thousandsDATE DISPOSEDSALES PRICESQUARE FOOTAGE
Houston, TX8/2/23$8,320 57,170 
Assets Held for Sale
The Company had three properties classified as assets held for sale as of SeptemberJune 30, 2017 (in thousands):2023. The net real estate assets held for sale includes $3.6 million of impairment charges for the six months ended June 30, 2023. The Company had one property classified as assets held for sale as of December 31, 2022, which was sold in the first quarter of 2023. The table below reflects the assets and liabilities classified as held for sale as of June 30, 2023 and December 31, 2022:
Dollars in thousandsJune 30, 2023December 31, 2022
Balance Sheet data:
Land$205 $1,700 
Building and improvements1,736 15,164 
Lease intangibles2,242 1,986 
4,183 18,850 
Accumulated depreciation(4,183)— 
Real estate assets held for sale, net— 18,850 
Other assets, net151 43 
Assets held for sale, net$151 $18,893 
Accounts payable and accrued liabilities$222 $282 
Other liabilities— 155 
Liabilities of assets held for sale$222 $437 
Note 4. Leases
Lessor Accounting
The Company’s properties generally were leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2052. Some leases provide tenants with fixed rent renewal terms while others have market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.
The Company's leases typically have escalators that are either based on a stated percentage or an index such as the consumer price index ("CPI"). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three and six months ended June 30, 2023 was $329.7 million and $653.8 million, respectively. Lease income for the Company's operating leases recognized for the three and six months ended June 30, 2022 was $140.6 million and $279.1 million, respectively.


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Year Amount
Remainder of 2017 $1,166
2018 100,827
2019 105,940
2020 144,892
2021 303,933
Thereafter 2,222,264
Total $2,879,022
Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of June 30, 2023 were as follows:
Deferred Financing Costs
Dollars in thousandsOPERATING
2023$467,393 
2024861,323 
2025751,369 
2026648,352 
2027536,874 
2028 and thereafter1,950,019 
$5,215,330 
Lessee Accounting
As of SeptemberJune 30, 2017,2023, the futureCompany was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2023, the Company had 241 properties totaling 17.5 million square feet that were held under ground leases. Some of the ground lease renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on CPI. The Company had 75 prepaid ground leases as of June 30, 2023. The amortization of our deferred financing costs is as follows (in thousands):
Year Amount
Remainder of 2017 $618
2018 2,821
2019 2,826
2020 2,804
2021 2,610
Thereafter 4,873
Total $16,552
We are required by the terms of our applicable loan agreements to meet various affirmative and negative covenants that we believe are customary for these types of facilities, such as limitations on the incurrence of debt by us and our subsidiaries that own unencumbered assets, limitations on the nature of HTALP’s business, and limitations on distributions by HTALP and its subsidiaries that own unencumbered assets. Our loan agreements also impose various financial covenants on us, such as a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a minimum tangible net worth covenant, a maximum ratio of unsecured indebtedness to unencumbered asset value,prepaid rent, coverage ratios and a minimum ratio of unencumbered net operating income to unsecured interest expense. As of September 30, 2017, we believe that we were in compliance with all such financial covenants and reporting requirements. In addition, certain of our loan agreements include events of default provisions that we believe are customary for these types of facilities, including restricting us from making dividend distributions to our stockholdersincluded in the event we areoperating lease right-of-use asset, represented approximately $0.3 million and $0.1 million of the Company’s rental expense for the three months ended June 30, 2023 and 2022, respectively, and $0.7 million and $0.3 million for the six months ended June 30, 2023 and 2022, respectively.
The Company’s future lease payments (primarily for its 166 non-prepaid ground leases) as of June 30, 2023 were as follows:
Dollars in thousandsOPERATINGFINANCING
2023$7,315 $992 
202415,011 2,182 
202514,597 2,218 
202614,631 2,255 
202714,701 2,294 
2028 and thereafter929,853 396,398 
Total undiscounted lease payments996,108 406,339 
Discount(717,629)(332,710)
Lease liabilities$278,479 $73,629 


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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2023 and 2022:
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
Dollars in thousands2023202220232022
Operating lease cost
Operating lease expense$5,329 $1,194 $10,436 $2,409 
Variable lease expense2,235 1,038 4,371 2,062 
Finance lease cost
Amortization of right-of-use assets387 331 774 503 
Interest on lease liabilities923 765 1,841 1,052 
Total lease expense$8,874 $3,328 $17,422 $6,026 
Other information
Operating cash flows outflows related to operating leases$5,230 $1,799 $11,190 $4,596 
Operating cash flows outflows related to financing leases$541 $509 $1,094 $767 
Financing cash flows outflows related to financing leases$6 $— $17 $51 
Right-of-use assets obtained in exchange for new finance lease liabilities$— $— $— $40,589 
Weighted-average years remaining lease term (excluding renewal options) - operating leases47.347.4
Weighted-average years remaining lease term (excluding renewal options) - finance leases58.461.7
Weighted-average discount rate - operating leases5.8 %5.6 %
Weighted-average discount rate - finance leases5.0 %5.0 %



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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
Note 5. Notes and Bonds Payable
The table below details the Company’s notes and bonds payable as of June 30, 2023 and December 31, 2022. 
 MATURITY DATES
BALANCE 1 AS OF
EFFECTIVE INTEREST RATE
as of 6/30/2023
Dollars in thousands6/30/202312/31/2022
$1.5 billion Unsecured Credit Facility10/25$354,000 $385,000 6.05 %
$350 million Unsecured Term Loan 2
7/24349,499 349,114 6.21 %
$200 million Unsecured Term Loan5/24199,786 199,670 6.21 %
$300 million Unsecured Term Loan10/25299,947 299,936 6.21 %
$150 million Unsecured Term Loan
6/26149,569 149,495 6.21 %
$200 million Unsecured Term Loan7/27199,432 199,362 6.21 %
$300 million Unsecured Term Loan1/28298,079 297,869 6.21 %
Senior Notes due 20255/25249,298 249,115 4.12 %
Senior Notes due 2026
8/26575,256 571,587 4.94 %
Senior Notes due 20277/27481,615 479,553 4.76 %
Senior Notes due 20281/28297,138 296,852 3.85 %
Senior Notes due 20302/30570,356 565,402 5.30 %
Senior Notes due 20303/30296,579 296,385 2.72 %
Senior Notes due 20313/31295,795 295,547 2.25 %
Senior Notes due 20313/31640,999 632,693 5.13 %
Mortgage notes payable
8/23-12/2682,924 84,247 3.57%-4.84%
$5,340,272 $5,351,827 
.
1Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable.
2On April 26, 2023, the Company exercised its option to extend the maturity date for one year for a fee of approximately $0.4 million.


Subsequent Changes in default thereunder, except toDebt Structure
On August 1, 2023, the extent necessary for us to maintain our REIT status.Company repaid in full at maturity a mortgage note payable bearing interest at a rate of 3.31% per annum with an outstanding principal of $9.8 million. The mortgage note encumbered a 66,984 square foot property in Georgia.
8.Note 6. Derivative Financial Instruments and Hedging Activities
Risk Management Objective of Using Derivative Financial InstrumentsDerivatives
We may use derivative financial instruments,The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, swaps, caps, options, floorsliquidity, and other interest rate derivative contracts, to hedge all or a portioncredit risk, primarily by managing the amount, sources, and duration of the interest rate risk associated with our borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with our operatingits assets and financial structure as well as to hedge specific anticipated transactions. We do not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. Theliabilities and the use of derivative financial instruments carries certain risks, includinginstruments. Specifically, the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, we only enterCompany enters into derivative financial instruments with counterparties with high credit ratingsto manage exposures that arise from business activities that result in the receipt or payment of future known and with majoruncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial institutions with which weinstruments are used to manage differences in the amount, timing, and our affiliates may also have other financial relationships. We do not anticipate that anyduration of the counterparties will failCompany’s known or expected cash receipts and its known or expected cash payments principally related to meet their obligations. We record counterparty credit risk valuation adjustments on interest rate swap derivative assets in order to properly reflect the credit quality of the counterparty. In addition, our fair value of interest rate swap derivative liabilities is adjusted to reflect the impact of our credit quality.Company’s borrowings.

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)


Cash Flow Hedges of Interest Rate Risk
OurThe Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage ourits exposure to interest rate movements. To accomplish this objective, wethe Company primarily useuses interest rate swaps and treasury locks as part of ourits interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for usthe Company making fixed ratefixed-rate payments over the life of the agreements without exchange of the underlying notional amount. A treasury lock is a synthetic forward sale of a U.S. treasury note, which is settled in cash based upon the difference between an agreed upon treasury rate and the prevailing treasury rate at settlement. Such treasury locks are entered into to effectively fix the treasury component of an upcoming debt issuance.
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income in the accompanying condensed consolidated balance sheets and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three and nine months ended September 30, 2017, such derivatives were used to hedge the variable cash flows associated with variable rateexisting variable-rate debt. The ineffective portion


19


Table of the change in fair value of theContents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.
For derivatives is recognized directly in earnings. During the threedesignated, and nine months ended September 30, 2017, we recorded approximately $4,000 and $31,000, respectively, of hedge ineffectiveness in earnings. We designated our derivative financial instrumentsthat qualify, as cash flow hedges in March 2017.
Duringof interest rate risk, the nine months ended September 30, 2017, we entered into and settled two treasury locks designated as cash flow hedges with an aggregate notional amount of $250.0 million to hedge future fixed rate debt issuances, which fixedgain or loss on the 10-year swap rates at an average rate of 2.26% per annum. Upon settlement of these contracts during the nine months ended September 30, 2017, we paid and reported a loss of $0.7 million which wasderivative is recorded in accumulated other comprehensive loss in our accompanying condensed consolidated statements of comprehensive income (loss)Accumulated Other Comprehensive Income (Loss) ("AOCI") and a gain of $25,000 which was recordedsubsequently reclassified into interest expense in the change in fair value of our derivative financial instruments in our accompanying condensed consolidated statements of operations.
same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income in the accompanying condensed consolidated balance sheetsAOCI related to derivatives will be reclassified to interest expense as interest payments are made on our variable ratethe Company’s variable-rate debt. During the next twelve months, we estimate that an additional $0.4 million will be reclassified from other comprehensive income in the accompanying condensed consolidated balance sheets as an increase to interest related to derivative financial instruments in the accompanying condensed consolidated statements of operations.
As of SeptemberJune 30, 2017, we2023, the Company had the following14 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (in thousands, except numberrisk:
EXPIRATION DATEAMOUNTWEIGHTED
AVERAGE RATE
January 15, 2024$200,000 1.21 %
May 1, 2026100,000 2.15 %
June 1, 2026150,000 3.83 %
December 1, 2026150,000 3.84 %
June 1, 2027150,000 4.13 %
December 1, 2027250,000 3.79 %
$1,000,000 3.17 %

Tabular Disclosure of instruments):
Interest Rate Swaps September 30, 2017
Number of instruments 5
Notional amount $189,751
The table below presentsFair Values of Derivative Instruments on the fair value of our derivative financial instruments designated as a hedge as well as our classification in the accompanying condensed consolidated balance sheets as of September 30, 2017 (in thousands). In March 2017, we designated our derivative financial instruments as cash flow hedges. As such, prior to March 2017 we did not have derivatives designated as hedging instruments.
  Asset Derivatives Liability Derivatives
  
   Fair Value at:   Fair Value at:
Derivatives Designated as Hedging Instruments: 
Balance Sheet
Location
 September 30, 2017 December 31, 2016 
Balance Sheet
Location
 September 30, 2017 December 31, 2016
Interest rate swaps Receivables and other assets $952
 $—
 Derivative financial instruments $1,441
 $—

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The tables below present the gain or loss recognized on our derivative financial instruments designated as hedges as well as our classification in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016 (in thousands). In March 2017, we designated our derivative financial instruments as cash flow hedges. As such, prior to March 2017 we did not have derivatives designated as hedging instruments.
  
 
Gain (Loss) Recognized in OCI on Derivative
(Effective Portion):
   
Gain (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion):
   
Gain (Loss) Recognized in Income on Derivative
(Ineffective Portion and Amount Excluded from
Effectiveness Testing):
  Three Months Ended September 30,   Three Months Ended September 30,   Three Months Ended September 30,
Derivatives Cash Flow Hedging Relationships: 2017 2016 Statement of Operations Location 2017 2016 Statement of Operations Location 2017 2016
Interest rate swaps $9
 $—
 Interest related to derivative financial instruments $(196) $—
 Interest related to derivative financial instruments $(4) $—
  
Gain (Loss) Recognized in OCI on Derivative
(Effective Portion):
   
Gain (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion):
   
Gain (Loss) Recognized in Income on Derivative
(Ineffective Portion and Amount Excluded from
Effectiveness Testing):
  
Nine Months Ended
September 30,
   
Nine Months Ended
September 30,
   
Nine Months Ended
September 30,
Derivatives Cash Flow Hedging Relationships: 2017 2016 Statement of Operations Location 2017 2016 Statement of Operations Location 2017 2016
Interest rate swaps $(1,196) $—
 Interest related to derivative financial instruments $(565) —
 Interest related to derivative financial instruments $(31) $—
Non-Designated Hedges
Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks, but do not meet the strict hedge accounting requirements of ASC 815 - Derivatives and Hedging. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly to gain or loss on change in fair value of derivative financial instruments in the accompanying condensed consolidated statements of operations. For the nine months ended September 30, 2017, we recorded a gain on change in fair value of derivative financial instruments of $0.9 million. For the three months ended September 30, 2017, we did not record a gain or loss on change in fair value of derivative financial instruments as we did not have any derivative financial instruments classified as non-designated hedges.Balance Sheet
The table below presents the fair value of our derivative financial instruments not designated as hedges as well as our classification in the accompanying condensed consolidated balance sheets as of December 31, 2016 (in thousands). In March 2017, we designated ourCompany's derivative financial instruments, as well as their classification on the Condensed Consolidated Balance Sheet as of June 30, 2023.
BALANCE AT JUNE 30, 2023
In thousandsBALANCE SHEET LOCATIONFAIR VALUE
Derivatives designated as hedging instruments
Interest rate swapsOther liabilities$(1,248)
Interest rate swapsOther assets$16,046 
Total derivatives designated as hedging instruments$14,798 
Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss)
The table below presents the effect of cash flow hedges. As such, as of March 2017 we did not have derivatives not designated as hedging instruments.hedge accounting on AOCI during the three and six months ended June 30, 2023 and 2022 related to the Company's outstanding interest rate swaps.
(GAIN)/LOSS RECOGNIZED IN
AOCI ON DERIVATIVE
three months ended June 30,		(GAIN)/LOSS RECLASSIFIED FROM
AOCI INTO INCOME
three months ended June 30,
In thousands2023202220232022
Interest rate swaps$(21,523)$(1,663)Interest expense$(3,568)$674 
Settled treasury hedges— — Interest expense107 107 
Settled interest rate swaps— — Interest expense42 42 
 $(21,523)$(1,663)Total interest expense$(3,419)$823 
(GAIN)/LOSS RECOGNIZED IN
AOCI ON DERIVATIVE
six months ended June 30,		(GAIN)/LOSS RECLASSIFIED FROM
AOCI INTO INCOME
six months ended June 30,
In thousands2023202220232022
Interest rate swaps$(12,981)$(6,822)Interest expense$(6,000)$1,612 
Settled treasury hedges— — Interest expense213 213 
Settled interest rate swaps— — Interest expense84 84 
 $(12,981)$(6,822)Total interest expense$(5,703)$1,909 


  Asset Derivatives Liability Derivatives
  
   Fair Value at:   Fair Value at:
Derivatives NOT Designated as Hedging Instruments: 
Balance Sheet
Location
 September 30, 2017 December 31, 2016 
Balance Sheet
Location
 September 30, 2017 December 31, 2016
Interest rate swaps Receivables and other assets $—
 $541
 Derivative financial instruments $—
 $1,920


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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, – (Continued)cont.

The Company estimates that an additional $14.4 million related to active interest rate swaps will be reclassified from AOCI as a decrease to interest expense over the next 12 months, and that an additional $0.6 million related to settled interest rate swaps will be amortized from AOCI as an increase to interest expense over the next 12 months.
Tabular Disclosure of Offsetting Derivatives
The table below sets forth the net effects of offsetting and net presentation of our derivatives as of September 30, 2017 and December 31, 2016, respectively (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets or liabilities are presented in the consolidated balance sheets.
  Offsetting of Derivative Assets
  Gross Amounts of Recognized Assets Gross Amounts in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount
September 30, 2017 $952
 $—
 $952
 $—
 $—
 $952
December 31, 2016 541
 —
 541
 —
 —
 541
  Offsetting of Derivative Liabilities
  Gross Amounts of Recognized Liabilities Gross Amounts in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount
September 30, 2017 $1,441
 $—
 $1,441
 $—
 $—
 $1,441
December 31, 2016 1,920
 —
 1,920
 —
 —
 1,920
Credit Risk RelatedCredit-risk-related Contingent Features
We haveThe Company's agreements with each of ourits derivative counterparties that contain a cross-default provision thatunder which the Company could be declared in default of its derivative obligations if we default on any of our indebtedness, including a default where repayment of the underlying indebtedness has not beenis accelerated by the lender then we could also be declared indue to the Company's default on our derivative obligations.
We also have agreements with each of our derivative counterparties that incorporate provisions from our indebtedness with a lender affiliate of the derivative counterparty requiring it to maintain certain minimum financial covenant ratios on our indebtedness. Failure to comply with the covenant provisions would result in us being in default on any derivative instrument obligations covered by these agreements.
As of SeptemberJune 30, 2017,2023, the fair value of derivatives in a net liabilityasset position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $1.5$15.4 million. As of SeptemberJune 30, 2017, we have2023, the Company had not posted any collateral related to these agreements and we werewas not in breach of any of the provisions of these agreements. If we had breached any of these provisions of these agreements, we could have been required to settle our obligations under these agreements at an aggregate termination value of $1.5 million at September 30, 2017.agreement.
9.Note 7. Commitments and Contingencies
LitigationLegal Proceedings
We engage in litigationThe Company is, from time to time, with various parties as a routine partinvolved in litigation arising in the ordinary course of our business, including tenant defaults. However, we arebusiness. The Company is not presently subject toaware of any materialpending or threatened litigation nor, to our knowledge, is any material litigation threatenedthat, if resolved against us, which if determined unfavorably to us,the Company, would have a material adverse effect on our condensed consolidated financial position, results of operations or cash flows.
Environmental Matters
We follow the policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material effect on our condensed consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability at our properties that we believe would require additional disclosure or the recording of a loss contingency.

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Other
Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business. In our opinion, these matters are not expected to have a material effect on our condensedCompany’s consolidated financial position, results of operations or cash flows.
Development and Redevelopment Activity
10. Stockholders’During the first six months of 2023, the Company incurred $49.0 million toward the development and redevelopment of properties.
Note 8. Stockholders' Equity
Common Stock    
The following table provides a reconciliation of the beginning and Partners’ Capital
HTALP’s operating partnership agreement provides that it will distribute cash flow from operations and net sale proceeds to its partners in accordance with their overall ownership interests at such times and in such amounts as the general partner determines. Dividend distributions are made such that a holder of one OP Unit in HTALP will receive distributions from HTALP in an amount equal to the dividend distributions paid to the holder of one share of our common stock. In addition, for each shareending shares of common stock issued or redeemed by us, HTALP issues or redeems a corresponding number of OP Units.
Duringoutstanding for the ninesix months ended SeptemberJune 30, 2017, we issued $1.7 billion of equity at an average price of $28.70 per share.2023 and the twelve months ended December 31, 2022:
Common Stock Offerings
SIX MONTHS ENDED JUNE 30, 2023TWELVE MONTHS ENDED DECEMBER 31, 2022
Balance, beginning of period380,589,894 150,457,433 
Issuance of common stock4,817 229,618,304 
Non-vested share-based awards, net of withheld shares262,821 514,157 
Balance, end of period380,857,532 380,589,894 
In September 2017, we entered into newAt-The-Market Equity Offering Program
The Company has equity distribution agreements with our various sales agents with respect to ourthe at-the-market (“ATM”) offering program of common stock with an aggregate sales amount of up to $500.0$750.0 million. We contemporaneously terminated our prior ATM equity distribution agreements. During the nine months ended September 30, 2017, and under the previous ATM, we issued and sold 3,998,000 shares of our common stock for $125.7 million of gross proceeds at an average price of $31.45 per share. As of SeptemberJune 30, 2017, $500.02023, $750.0 million remained available for issuance by us under the September 2017 ATM.our current ATM offering program.
During the ninesix months ended SeptemberJune 30, 2017, we, in connection with2023, the Duke Acquisition, completed an underwritten public offering of 54,625,000Company did not sell any shares of our common stock for $1.6 billion of gross proceeds at a price of $28.50 per share.
Subsequentor enter into any forward sale agreements to September 30, 2017, we issued $200.0 millionsell shares of common stock under thethrough its ATM including $75.0 million on a forward basis which will be issued over the next six months.
Common Unit Offerings
During the nine months ended September 30, 2017, we issued 20,687 OP Units in HTALP for approximately $0.6 million in connection with an acquisition transaction.
Subsequent to September 30, 2017, as part of an acquisition, we issued to the seller as a part of the acquisition consideration 16,972 OP Units in HTALP for approximately $0.5 million.offering program.
Common Stock Dividends
See our accompanying condensed consolidated statements of operations forDuring the dividends declared during the three and ninesix months ended SeptemberJune 30, 20172023, the Company declared and 2016.paid common stock dividends totaling $0.62 per share. On October 24, 2017, our Board of Directors announcedAugust 1, 2023, the Company declared a quarterly common stock dividend in the amount of $0.305$0.31 per share of common stock. The dividends are to be paidpayable on January 9, 2018August 30, 2023 to stockholders of record of our common stock on January 2, 2018.
Incentive Plan
Our Amended and Restated 2006 Incentive Plan (the “Plan”) permits the grant of incentive awards to our employees, officers, non-employee directors and consultants as selected by our Board of Directors. The Plan authorizes us to grant awards in any of the following forms: options; stock appreciation rights; restricted stock; restricted or deferred stock units; performance awards; dividend equivalents; other stock-based awards, including units in HTALP; and cash-based awards. Subject to adjustment as provided in the Plan, the aggregate number of awards reserved and available for issuance under the Plan is 5,000,000 shares. As of September 30, 2017, there were 1,689,585 awards available for grant under the Plan.
LTIP Units
Awards under the LTIP consist of Series C units in HTALP and were subject to the achievement of certain performance and market conditions in order to vest. Once vested, the Series C units were converted into common units of HTALP, which may be converted into shares of our common stock. The LTIP awards were fully expensed or forfeited in 2015.

August 15, 2023.
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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, – (Continued)cont.


Earnings Per Common Share
Restricted Common StockThe Company uses the two-class method of computing net earnings per common shares. The Company's non-vested share-based awards are considered participating securities pursuant to the two-class method.
ForThe following table sets forth the threecomputation of basic and nine months ended September 30, 2017, we recognized compensation expense of $1.7 million and $5.5 million, respectively. For the three and nine months ended September 30, 2016, we recognized compensation expense of $2.1 million and $5.1 million, respectively. Compensation expensediluted earnings per common share for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022.
THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
Dollars in thousands, except per share data2023202220232022
Weighted average common shares outstanding
Weighted average common shares outstanding380,829,011 151,620,897 380,812,981 151,230,064 
Non-vested shares(1,932,334)(1,945,042)(1,952,350)(1,908,652)
Weighted average common shares outstanding - basic378,896,677 149,675,855 378,860,631 149,321,412 
Weighted average common shares outstanding - basic378,896,677 149,675,855 378,860,631 149,321,412 
Dilutive effect of employee stock purchase plan— 62,694 — 75,394 
Weighted average common shares outstanding - diluted378,896,677 149,738,549 378,860,631 149,396,806 
Net (loss) income attributable to common stockholders$(82,759)$6,130 $(169,884)$48,357 
Dividends paid on nonvested share-based awards(588)(601)(1,193)(1,207)
Net (loss) income applicable to common stockholders - basic$(83,347)$5,529 $(171,077)$47,150 
Basic earnings per common share - net income$(0.22)$0.04 $(0.45)$0.32 
Diluted earnings per common share - net income$(0.22)$0.04 $(0.45)$0.32 
The effect of OP units totaling 4,042,993 shares, non-vested stock awards totaling 442,263 shares, and options under the Company's Employee Stock Purchase Plan (the "ESPP") to purchase the Company's common stock totaling 27,484 shares for the three months ended June 30, 2023 were recorded in generalexcluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during that period.
Incentive Plans
Equity Awards
During the six months ended June 30, 2023, the Company made the following equity awards:
•During the first quarter of 2023, the Company granted non-vested stock awards to its named executive officers and administrative expensesother members of senior management and employees with a grant date fair value of $5.4 million, which consisted of an aggregate of 270,494 non-vested shares with vesting periods ranging from three to eight years.
•During the second quarter of 2023, the Company granted to its 12 independent directors an aggregate of 42,768 shares of non-vested stock awards with a grant date fair value of $0.7 million, and an aggregate of 57,868 LTIP Series D units with a grant date fair value of $1.1 million. The Company also granted a non-vested stock award to a new employee, which consisted of 508 non-vested shares.
A summary of the activity under the Company's share-based incentive plans for the three and six months ended June 30, 2023 and 2022 is included in the accompanying condensed consolidated statementstable below.
THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
 2023202220232022
Share-based awards, beginning of period1,955,445 1,951,551 1,795,128 1,562,028 
Granted43,276 26,840 325,816 442,024 
Vested(62,640)(36,682)(164,360)(61,047)
Forfeited(3,860)— (24,363)(1,296)
Share-based awards, end of period1,932,221 1,941,709 1,932,221 1,941,709 



22


Table of operations.Contents
AsNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

During the six months ended June 30, 2023 and 2022, the Company withheld 38,632 and 6,727 shares of September 30, 2017, we had $9.1common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested.
Restricted Stock Units
Prior to 2022, the Company granted long-term incentive awards, comprised of restricted stock, based on backward-looking performance measured at the end of the calendar year. The Company adopted a new incentive compensation structure effective January 2022, comprised of restricted stock and restricted stock units ("RSUs"). The RSUs are granted at the beginning of the year with three-year forward-looking performance targets.
On January 4, 2023, the Company granted RSUs to members of senior management, with a grant date fair value of $3.7 million, which consisted of unrecognized compensation expense, netan aggregate 165,174 RSUs with a five-year vesting period.
Approximately 43% of estimated forfeitures, which we will recognize overthe RSUs vest based on two market performance conditions. Relative and absolute total shareholder return ("TSR") awards containing these market performance conditions were valued using independent specialists. The Company utilized a remainingMonte Carlo simulation to calculate the weighted average periodgrant date fair values of 1.8 years.$24.23 for the absolute TSR component and $27.84 for the relative TSR component for the January 2023 grant using the following assumptions:
THREE MONTHS ENDED MARCH 31,
Volatility34.0 %
Dividend assumptionAccrued
Expected term3 years
Risk-free rate4.42 %
Stock price (per share)$20.21
The remaining 57% of the RSUs vest based upon certain operating performance conditions. With respect to the operating performance conditions of the January 4, 2023 grant, the grant date fair value was $20.21 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January RSUs was $22.55 per share.
The following is a summary of our restrictedthe RSU activity during the three and six months ended June 30, 2023:
THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
 Restricted Stock UnitsWeighted Average Grant Date Fair ValueRestricted Stock UnitsWeighted Average Grant Date Fair Value
Non-vested, beginning of period363,250 $28.57 294,932 33.04 
Granted— — 165,174 $22.55 
Vested/Forfeited— — (17,606)33.04 
Probability adjustment of 2022 RSUs— — (79,250)31.68 
Non-vested, end of period363,250 $28.57 363,250 28.57 
LTIP Series C Units
In January 2023, the Company modified its incentive compensation structure to award LTIP Series C units ("LTIP-C units) in the OP to named executive officers in lieu of RSUs. The LTIP-C units are granted with three-year forward-looking performance targets, with a grant date fair value of $7.1 million, which consisted of an aggregate 448,249 LTIP-C units with a five-year vesting period.
Approximately 43% of the LTIP-C units vest based on two market performance conditions. Relative and absolute TSR awards containing these market performance conditions were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $12.24 for the absolute TSR component and $13.98 for the relative TSR component for the January 2023 grant using the following assumption:


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Table of Contents
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

THREE MONTHS ENDED MARCH 31,
Volatility34.0 %
Dividend assumptionAccrued
Expected term3 years
Risk-free rate4.42 %
Stock price (per share)$20.21
The remaining 57% of the LTIP-C units vest based upon certain operating performance conditions. With respect to the operating performance conditions of the January 4, 2023 grant, the grant date fair value was $20.21 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January LTIP-C units was $15.85 per share.
Employee Stock Purchase Plan
Legacy HR maintained an ESPP prior to the completion of the Merger. The outstanding options to purchase shares of the common stock of Legacy HR became options to purchase class A common stock of the Company upon completion of the Merger. No new options will be granted under the ESPP. A summary of the activity under the ESPP for the three and six months ended June 30, 2023 and 2022 is included in the table below.
THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
 2023202220232022
Outstanding and exercisable, beginning of period183,426 427,802 340,976 348,514 
Granted— — — 255,960 
Exercised(1,687)(1,965)(4,817)(12,518)
Forfeited(2,370)(20,303)(23,791)(45,789)
Expired— — (132,999)(140,633)
Outstanding and exercisable, end of period179,369 405,534 179,369 405,534 

The following table represents expected amortization of the Company's non-vested shares issued as of SeptemberJune 30, 2017 and 2016, respectively:2023:
Dollars in millionsFUTURE AMORTIZATION
of non-vested shares
2023$7.7 
202413.3 
202510.8 
20268.0 
20272.4 
2028 and thereafter0.5 
Total$42.7 
 September 30, 2017 September 30, 2016
 Restricted Common Stock 
Weighted
Average Grant
Date Fair Value
 Restricted Common Stock 
Weighted
Average Grant
Date Fair Value
Beginning balance640,870
 $27.36
 487,850
 $23.13
Granted292,109
 29.75
 417,110
 29.82
Vested(278,821) 25.31
 (236,749) 23.27
Forfeited(58,384) 28.86
 (24,391) 25.93
Ending balance595,774
 $29.39
 643,820
 $27.35
11.Note 9. Fair Value of Financial Instruments
Financial Instruments Reported at Fair Value - Recurring
The table below presents our assetsfollowing methods and liabilities measured at fair value on a recurring basis as of September 30, 2017, aggregated by the applicable level inassumptions were used to estimate the fair value hierarchy (in thousands):of each class of financial instrument for which it is practical to estimate that value.
•Cash and cash equivalents - The carrying amount approximates fair value due to the short term maturity of these investments.
  Level 1 Level 2 Level 3 Total
Assets:        
Derivative financial instruments $—
 $952
 $—
 $952
Liabilities:        
Derivative financial instruments $—
 $1,441
 $—
 $1,441
•Real estate notes receivable - Real estate notes receivable are recorded in other assets on the Company's Condensed Consolidated Balance Sheets. Fair value is estimated using cash flow analyses, based on current interest rates for similar types of arrangements.
•Borrowings under the Unsecured Credit Facility and the Term Loans Due 2024 and 2026 - The table below presents our assetscarrying amount approximates fair value because the borrowings are based on variable market interest rates.
•Senior Notes and Mortgage Notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements.
•Interest rate swap agreements - Interest rate swap agreements are recorded in other liabilities measuredon the Company's Condensed Consolidated Balance Sheets at fair value. Fair value on a recurring basis as of December 31, 2016, aggregatedis estimated by the applicableutilizing pricing models, level in the fair value hierarchy (in thousands):2 inputs, that consider forward yield curves and discount rates.

  Level 1 Level 2 Level 3 Total
Assets:        
Derivative financial instruments $—

$541

$—
 $541
Liabilities:        
Derivative financial instruments $—
 $1,920
 $—
 $1,920

Financial Instruments Reported at Fair Value - Non-Recurring24
The table below presents our assets measured at fair value on a non-recurring basis as of September 30, 2017, aggregated by the applicable level in the fair value hierarchy (in thousands):

  Level 1 Level 2 Level 3 Total
Assets:        
MOB (1)
 $—
 $1,423
 $—
 $1,423
         
(1) During the nine months ended September 30, 2017, we recognized a $5.1 million impairment charge to one MOB. The estimated fair value as of September 30, 2017 for this MOB was based upon real estate market comparables.

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITEDTHE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, – (Continued)
cont.


The table below presents our assets measureddetails the fair values and carrying values for notes and bonds payable and real estate notes receivable at fair value on a non-recurring basis as ofJune 30, 2023 and December 31, 2016, aggregated by the applicable level in the fair value hierarchy (in thousands):2022.
 June 30, 2023December 31, 2022
Dollars in millionsCARRYING VALUEFAIR VALUECARRYING VALUEFAIR VALUE
Notes and bonds payable 1
$5,340.3 $5,107.5 $5,351.8 $5,149.6 
Real estate notes receivable 1
$151.5 $149.0 $99.6 $99.6 
  Level 1 Level 2 Level 3 Total
Assets:        
MOB (1)
 $—
 $8,191
 $—
 $8,191
         
(1) During the year ended December 31, 2016, we recognized impairment charges of $1.3 million and $1.8 million to the carrying value of two MOBs. The estimated fair value as of December 31, 2016 for these two MOBs was based upon a pending sales agreement and real estate market comparables.
There have been no transfers of assets or liabilities between levels. We will record any such transfers at the end of the reporting period1Level 2 – model-derived valuations in which a change of event occurs that resultssignificant inputs and significant value drivers are observable in a transfer. Although we have determined that the majority of the inputs used to value our interest rate swap derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our interest rate swap derivative positions and have determined that the credit valuation adjustments are not significant to their overall valuation. As a result, we have determined that our interest rate swap derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.active markets.
Financial Instruments Disclosed at Fair Value
We consider the carrying values of cash and cash equivalents, tenant and other receivables, restricted cash and escrow deposits and accounts payable, and accrued liabilities, to approximate fair value for these financial instruments because of the short period of time between origination of the instruments and their expected realization. All of these financial instruments are considered Level 2.
The fair value of debt is estimated using borrowing rates available to us with similar terms and maturities, which is considered a Level 2 input. As of September 30, 2017, the fair value of the debt was $2,913.3 million compared to the carrying value of $2,856.8 million. As of December 31, 2016, the fair value of the debt was $1,784.0 million compared to the carrying value of $1,768.9 million.
12. Per Share Data of HTA
We include unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents as “participating securities” pursuant to the two-class method. The resulting classes are our common stock and restricted stock. For the three and nine months ended September 30, 2017 and 2016, all of our earnings were distributed and the calculated earnings per share amount would be the same for all classes.
The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per share of HTA for the three and nine months ended September 30, 2017 and 2016, respectively (in thousands, except per share data):


25

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Numerator:       
Net income$13,957
 $6,639
 $22,105
 $30,191
Net income attributable to noncontrolling interests(194) (212) (715) (830)
Net income attributable to common stockholders$13,763
 $6,427
 $21,390
 $29,361
Denominator:       
Weighted average shares outstanding - basic200,674
 138,807
 173,189
 134,905
Dilutive shares4,121
 4,331
 4,221
 3,409
Weighted average shares outstanding - diluted204,795
 143,138
 177,410
 138,314
Earnings per common share - basic       
Net income attributable to common stockholders$0.07
 $0.05
 $0.12
 $0.22
Earnings per common share - diluted       
Net income attributable to common stockholders$0.07
 $0.04
 $0.12
 $0.21

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Table of Contents
HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

13. Per Unit Data of HTALP
The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per unit of HTALP for the three and nine months ended September 30, 2017 and 2016, respectively (in thousands, except per unit data):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Numerator:       
Net income$13,957
 $6,639
 $22,105
 $30,191
Net income attributable to noncontrolling interests(28) (1) (80) (28)
Net income attributable to common unitholders$13,929
 $6,638
 $22,025
 $30,163
Denominator: 
       
Weighted average units outstanding - basic204,795
 143,137
 177,410
 138,314
Dilutive units—
 —
 —
 —
Weighted average units outstanding - diluted204,795
 143,137
 177,410
 138,314
Earnings per common unit - basic:       
Net income attributable to common unitholders$0.07
 $0.05
 $0.12
 $0.22
Earnings per common unit - diluted:       
Net income attributable to common unitholders$0.07
 $0.05
 $0.12
 $0.22
14. Supplemental Cash Flow Information
The following is the supplemental cash flow information for the nine months ended September 30, 2017 and 2016, respectively (in thousands):
 Nine Months Ended September 30,
 2017 2016
Supplemental Disclosure of Cash Flow Information:   
Interest paid$51,066
 $39,321
Income taxes paid997
 934
    
Supplemental Disclosure of Noncash Investing and Financing Activities:   
Accrued capital expenditures$4,185
 $2,868
Debt and interest rate swaps assumed and entered into in connection with an acquisition286,000
 21,156
Dividend distributions declared, but not paid62,494
 43,530
Issuance of operating partnership units in connection with an acquisition610
 71,754
Note receivable included in the consideration of a disposition—
 3,000
Note receivable retired in connection with an acquisition2,494
 —
Redeemable noncontrolling interest assumed in connection with an acquisition—
 5,449
Redemption of noncontrolling interest5,694
 5,709

29


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The use of
Disclosure Regarding Forward-Looking Statements
This report and other materials the words “we,” “us”Company has filed or “our” refers to HTA and HTALP, collectively.
The following discussion should be read in conjunctionmay file with our condensed consolidated financial statements and notes appearing elsewhere in this Quarterly Report,the SEC, as well as information included in oral statements or other written statements made, or to be made, by management of the Company, contain, or will contain, disclosures that are “forward-looking statements.” Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “target,” “intend,” “plan,” “estimate,” “project,” “continue,” “should,” “could," "budget" and other comparable terms. These forward-looking statements are based on the Company's current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties. Such risks and uncertainties include, among other things, the following: failure to realize the expected benefits of the Merger; the risk that the Company’s and HTA’s respective businesses will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; risks related to future opportunities and plans for the Company, including the uncertainty of expected future financial performance and results of the Company; the possibility that, if the Company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Company’s common stock could decline; pandemics or other health crises, such as COVID-19; increases in interest rates; the availability and cost of capital at expected rates; competition for quality assets; negative developments in the operating results or financial condition of the Company's tenants, including, but not limited to, their ability to pay rent; the Company's ability to reposition or sell facilities with profitable results; the Company's ability to release space at similar rates as vacancies occur; the Company's ability to renew expiring leases; government regulations affecting tenants' Medicare and Medicaid reimbursement rates and operational requirements; unanticipated difficulties and/or expenditures relating to future acquisitions and developments; changes in rules or practices governing the Company's financial reporting; the Company may be required under purchase options to sell properties and may not be able to reinvest the proceeds from such sales at rates of return equal to the return received on the properties sold; uninsured or underinsured losses related to casualty or liability; the incurrence of impairment charges on its real estate properties or other assets; other legal and operational matters; and other risks and uncertainties affecting the Company, including those described from time to time under the caption “Risk Factors” and elsewhere in the Company’s filings and reports with the audited consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2016SEC, including the Company's Annual Report on Form 10-K. Such condensed consolidated financial statements and information have been prepared to reflect HTA and HTALP’s financial position as of September 30, 2017 and10-K for the year ended December 31, 2016, together with results of operations and cash flows for the three and nine months ended September 30, 2017 and 2016.
The information set forth below is intended to provide readers with an understanding of our financial condition, changes in financial condition and results of operations.
Forward-Looking Statements;
Executive Summary;
Company Highlights;
Critical Accounting Policies;
Recently Issued or Adopted Accounting Pronouncements;
Factors Which May Influence Results of Operations;
Results of Operations;
Non-GAAP Financial Measures;
Liquidity and Capital Resources;
Commitments and Contingencies;
Debt Service Requirements;
Off-Balance Sheet Arrangements; and
Inflation.
Forward-Looking Statements
Certain statements contained in this Quarterly Report constitute forward-looking statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”)). Such statements include, in particular, statements about our plans, strategies, prospects and estimates regarding future MOB market performance. Additionally, such statements are subject to certain2022. Moreover, other risks and uncertainties as well as knownof which the Company is not currently aware may also affect the Company's forward-looking statements and unknown risks, which couldmay cause actual results and the timing of events to differ materially and in adverse ways from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Forward-looking statements are generally identifiable by the use of such terms as “expect,” “project,” “may,” “should,” “could,” “would,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “opinion,” “predict,” “potential,” “pro forma” or the negative of such terms and other comparable terminology. Readers are cautioned not to place undue reliance on theseThe forward-looking statements which speakmade in this communication are made only as of the date this Quarterly Report is filed withhereof or as of the SEC. We cannot guaranteedates indicated in the accuracy of any such forward-looking statements, contained in this Quarterly Report, and we do not intendeven if they are subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to publicly update or revisesupplement any forward-looking statements whether as a result ofto reflect actual results, new information, future events, changes in its expectations or otherwise,other circumstances that exist after the date as of which the forward-looking statements were made, except as required by law.
AnyStockholders and investors are cautioned not to unduly rely on such forward-looking statements reflect our current views about future events, are subject to unknown risks, uncertainties,when evaluating the information presented in the Company’s filings and other factors, and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements,reports, including, our ability to generate positive cash flow from operations, provide dividends to stockholders and maintain the value of our real estate properties, may be significantly hindered. Factors that might impair our ability to meet such forward-looking statements include, without limitation, those discussed in Part I, Item 1A - Risk Factors in our 2016estimates and projections regarding the performance of development projects the Company is pursuing.
For a detailed discussion of the Company’s risk factors, please refer to the Company's filings with the SEC, including this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Merger with Healthcare Trust of America
Completed Merger    
On July 20, 2022, Legacy HR, Legacy HTA, the OP and Merger Sub completed the Merger in accordance with the terms of the Merger Agreement. Immediately following the Merger, Legacy HR converted to a Maryland limited liability company and changed its name to “HRTI, LLC” and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”. In addition, the equity interests of Legacy HR were contributed by Legacy HTA by means of a contribution and assignment agreement to the OP such that Legacy HR became a wholly-owned subsidiary of the OP. As a result, Legacy HR became a part of an UPREIT structure, which is incorporated herein.

30


Forward-looking statements express expectations of future events. All forward-looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subjectintended to numerous known and unknown risks and uncertainties that could cause actual events or results to differ materially from those projected. Due to these inherent uncertainties, our stockholders are urged not to place undue reliance on forward-looking statements. Forward-looking statements speak only asalign the corporate structure of the date made. In addition, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required by law.
These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Executive Summary
HTA is the largest publicly-traded REIT focused on MOBs in the U.S. as measured by the GLA of its MOBs. HTA conducts substantially all of its operations through HTALP. We invest in MOBs that we believe will serve the future of healthcare delivery and MOBs that are primarily located on health system campuses, near university medical centers, or in core community outpatient locations. We also focus on our key markets that have certain demographic and macro-economic trends and where we can utilize our institutional property management and leasing platform to generate strong tenant relationships and operating cost efficiencies. Our primary objective is to maximize stockholder value with disciplined growth through strategic investments that provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow. In pursuing this objective, we: (i) seek internal growth through proactive asset management, leasing and property management oversight; (ii) target accretive acquisitions and developments of MOBs in markets with attractive demographics that complement our existing portfolio; and (iii) actively manage our balance sheet to maintain flexibility with conservative leverage.  Additionally, from time to time we consider, on an opportunistic basis, significant portfolio acquisitions that we believe fit our core business and could enhance our existing portfolio.
Since 2006, we have invested $7.0 billion to create a portfolio of MOBs and other healthcare assets consisting of approximately 24.2 million square feet of GLA throughout the U.S. As of September 30, 2017, our portfolio included $2.24 billion of investments, net of development credits received at closing in connection with our Duke Acquisition, which includes a 50% ownership interest in an unconsolidated joint venture for $68.8 million as of the date of acquisition. Our only remaining obligations relatedcombined company after giving effect to the Duke Acquisition areMerger and the potential acquisitionUPREIT reorganization and to provide a platform for the combined company to more efficiently acquire properties in a tax-deferred manner. The Company operates under the name “Healthcare Realty Trust Incorporated” and its shares of a land parcel in Miami, FL and a single property in Texas that are each currently excluded from our purchase obligations due to current outstanding physical condition issues.
As of September 30, 2017, approximately 96% of our portfolio, based on GLA, was locatedclass A common stock, $0.01 par value per share, trade on the campuses of, or aligned with, nationally or regionally recognized healthcare systems. Our portfolio is diversified geographically across 33 states, with no state having more than 19% of our total GLA as of September 30, 2017. We are concentrated in 20 to 25 key markets that are experiencing higher economic and demographic trends than other markets, on average, that we expect will drive demand for MOBs. Approximately 92% of our portfolio, based on GLA, is located inNew York Stock Exchange (the “NYSE”) under the top 75 MSAs with Atlanta, Boston, Dallas, Houston and Tampa being our largest markets by investment.
Company Highlights
Portfolio Operating Performance
For the three months ended September 30, 2017, our total revenue increased 48.7%, or $57.7 million, to $176.0 million compared to the three months ended September 30, 2016. For the nine months ended September 30, 2017, our total revenue increased 29.9%, or $101.3 million, to $440.2 million, compared to the nine months ended September 30, 2016.
For the three months ended September 30, 2017, net income attributable to common stockholders was $0.07 per diluted share, or $13.8 million, compared to $0.04 per diluted share, or $6.4 million, for the three months ended September 30, 2016. For the nine months ended September 30, 2017, net income attributable to common stockholders was $0.12 per diluted share, or $21.4 million, compared to $0.21 per diluted share, or $29.4 million, for the nine months ended September 30, 2016.
For the three months ended September 30, 2017, HTA’s FFO was $0.41 per diluted share, or $84.2 million, an increase of $0.03 per diluted share, or 7.9%, compared to the three months ended September 30, 2016. For the nine months ended September 30, 2017, HTA’s FFO was $198.7 million, or $1.12 per diluted share, consistent with the per diluted share for the nine months ended September 30, 2016.

31


For the three months ended September 30, 2017, HTALP’s FFO was $0.41 per diluted unit, or $84.4 million, an increase of $0.03 per diluted unit, or 7.9%, compared to the three months ended September 30, 2016. For the nine months ended September 30, 2017, HTALP’s FFO was $199.3 million, or $1.12 per diluted unit, consistent with the per diluted unit for the nine months ended September 30, 2016.
For the three months ended September 30, 2017, HTA’s and HTALP’s Normalized FFO was $0.42 per diluted share and unit, or $85.4 million, an increase of $0.02 per diluted share and unit, or 5.0%, compared to the three months ended September 30, 2016. For the nine months ended September 30, 2017, HTA’s and HTALP’s Normalized FFO was $1.21 per diluted share and unit, or $215.2 million, an increase of $0.01 per diluted share and unit, or 0.8%, compared to the nine months ended September 30, 2016.
ticker symbol “HR��. For additional information on FFO and Normalized FFO,the Merger, see “FFO and Normalized FFO” below, which includes a reconciliation to net income attributable to common stockholders/unitholders and an explanation of why we present this non-GAAP financial measure.
For the three months ended September 30, 2017, our Net Operating Income (“NOI”) increased 46.9%, or $38.2 million, to $119.7 million, comparedNote 2 to the three months ended September 30, 2016. ForCondensed Consolidated Financial Statements.
Because Legacy HR was the nine months ended September 30, 2017, our NOI increased 29.0%, or $67.8 million, to $301.3 million, compared toaccounting acquirer under GAAP in the nine months ended September 30, 2016.
Fortransaction, its historical financial statements became the three months ended September 30, 2017, our Same-Property Cash NOI increased 2.9%, or $2.2 million, to $80.3 million, compared tohistorical financial statements of the three months ended September 30, 2016. For the nine months ended September 30, 2017, our Same-Property Cash NOI increased 3.1%, or $6.6 million, to $217.8 million, compared to the nine months ended September 30, 2016.
Company. For additional information, on NOI and Same-Property Cash NOI, see “NOI, Cash NOI and Same-Property Cash NOI” below, which includes a reconciliation from net income and an explanation of why we present these non-GAAP financial measures.
Internal Growth through Proactive Asset Management Leasing and Property Management
We believe we haveplease refer to the largest operating platformExplanatory Note in the medical office space that consists of asset management, leasing and in-house property management which allows us to better manage and service our existing portfolio.
As of September 30, 2017, our in-house property management and leasing platform operated approximately 22.2 million square feet of GLA, or 92%, of our total portfolio.
As of September 30, 2017, our leased rate (includes leases which have been executed, but which have not yet commenced) was 91.7% by GLA and our occupancy rate was 90.6% by GLA.
We entered into new and renewal leases on approximately 745,000 square feet of GLA and 2.0 million square feet of GLA, or 3.1% and 8.4%, respectively, of our portfolio, during the three and nine months ended September 30, 2017, respectively.
Tenant retention for the Same-Property portfolio was 75% and 78%, which included approximately 289,000 square feet of GLA and 1.3 million square feet of GLA of expiring leases, for the quarter and year-to-date, respectively, which we believe is indicative of our commitment to maintaining buildings in desirable locations and fostering strong tenant relationships. Tenant retention is defined as the sum of the total leased GLA of tenants that renewed a lease during the period over the total GLA of leases that renewed or expired during the period.
Key Market Focused Strategy and Investments
We believe we have been one of the most active investors in the medical office sector over the last decade and have developed a presence across 20 to 25 key markets. In each of these markets, we have established a strong asset management and leasing platform that has allowed us to develop valuable relationships with health systems, physician practices, universities, and regional development firms that have led to investment and leasing opportunities. Our local platforms have also enabled us to focus on generating cost efficiencies as we gain scale across individual markets and regions.
As of September 30, 2017, we had an average of 1.1 million square feet of GLA in each of our top ten markets. We expect to establish this scale across 20 to 25 key markets as our portfolio expands.
Our key markets represent top MSAs with strong growth metrics in jobs, household income and population, as well as low unemployment and mature healthcare infrastructures. Many of our key markets are also supported by strong university systems.
Our investment strategy includes alignment with key healthcare systems, hospitals and leading academic medical universities.

report.
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Liquidity and Capital Resources
OverSources and Uses of Cash
The Company’s primary sources of cash include rent receipts from its real estate portfolio based on contractual arrangements with its tenants, proceeds from the last several years, oursales of real estate properties, joint ventures, and proceeds from public or private debt or equity offerings. As of June 30, 2023, the Company had $1.1 billion available to be drawn on its Unsecured Credit Facility and $35.9 million in cash.
The Company expects to continue to meet its liquidity needs, including funding additional investments, have been focusedpaying dividends, and funding debt service, through cash flows from operations and liquidity sources, including the Unsecured Credit Facility. Management believes that the Company's liquidity and sources of capital are adequate to satisfy its cash requirements. The Company cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to the Company in our key markets,sufficient amounts to meet its liquidity needs.
Investing Activities
Cash flows used in investing activities for the six months ended June 30, 2023 were approximately $6.1 million. Below is a summary of significant investing activities.
Acquisitions
The following table details the Company's sole acquisition for the six months ended June 30, 2023:
Dollars in thousands
ASSOCIATED HEALTH SYSTEM/TENANCY 1
DATE ACQUIREDPURCHASE PRICESQUARE FOOTAGEMILES TO CAMPUS
Tampa, FLBayCare Health3/10/23$31,500 115,8670.06
1Includes buildings located on-campus, adjacent and off-campus that are anchored by healthcare systems or located within two miles of a hospital campus.

Subsequent to June 30, 2023, the Company acquired the following property:
Dollars in thousands
ASSOCIATED HEALTH SYSTEM/TENANCY 1
DATE ACQUIREDPURCHASE PRICESQUARE FOOTAGEMILES TO CAMPUS
Colorado Springs, COUC Health7/28/23$11,450 42,7701.30

Dispositions
The Company disposed of seven properties during the six months ended June 30, 2023 for a total sales price of $222.1 million, including cash proceeds of $160.9 million. The following table details these dispositions for the six months ended June 30, 2023:
Dollars in thousandsDate DisposedSales PriceSquare Footage
Tampa, FL & Miami, FL 1
1/12/23$93,250 224,037
Dallas, TX 2
1/30/2319,210 36,691
St. Louis, MO2/10/23350 6,500
Los Angeles, CA3/23/2321,000 37,165
Los Angeles, CA3
3/30/2375,000 147,078
Los Angeles, CA4
5/12/233,300 —
Albany, NY6/30/2310,000 40,870
Total dispositions$222,110 492,341 
1Includes two properties, sold in two separate transactions to the same buyer on the same date.
2The Company sold this property to a joint venture in which it retained a 40% interest. Sales price and square footage reflect the total sales price paid by the joint venture and total square footage of the property.
3The Company entered into a mortgage note agreement with the majoritybuyer for $45 million.
4The Company sold a land parcel totaling 0.34 acres.


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Table of our investments also being located either onContents


Subsequent to June 30, 2023, the campusesCompany disposed of or aligned with, nationally and regionally recognized healthcare systems.the following property:
Dollars in thousandsDATE DISPOSEDSALES PRICESQUARE FOOTAGE
Houston, TX8/2/23$8,320 57,170 

Capital Expenditures
During the ninesix months ended SeptemberJune 30, 2017, we acquired investments2023, the Company incurred capital expenditures totaling $2.7 billion, including$113.2 million for the Duke Acquisitionfollowing:
•$49.0 million toward the development and redevelopment of $2.24 billion, net of development credits we received at closing, which were located substantiallyproperties;
•$21.3 million toward first generation tenant improvements and planned capital expenditures for acquisitions;
•$25.6 million toward second generation tenant improvements; and
•$17.3 million toward capital expenditures.
Financing Activities
Cash flows used in certain of our 20 to 25 key markets.
Duringfinancing activities for the ninesix months ended SeptemberJune 30, 2017, we completed2023 were approximately $273.2 million. See Notes 6 and 9 to the disposition of an MOB located in TexasCondensed Consolidated Financial Statements accompanying this report for a gross sales price of $5.0 million.more information about capital markets and financing activities.
Financial Strategy and Balance Sheet FlexibilityCommon Stock Issuances
As of September 30, 2017, we had total leverage, measured by debt to total capitalization, of 31.9%. Total liquidity was $928.9 million, including cash and cash equivalents of $9.4 million and $919.5 million available on our unsecured revolving credit facility (includes the impact of $5.5 million of outstanding letters of credit) as of September 30, 2017.At-The-Market Equity Offering Program
During the nine months ended September 30, 2017, we issued and sold $1.7 billion of equity at an average price of $28.70 per share. This consisted of $1.6 billion from the sale of common stock in an underwritten public offering at an average price of $28.50 per share, $125.7 million from the sale of common stock under our previous ATM at an average price of $31.45 per share, and $0.6 million from the issuance of OP Units in connection with an acquisition transaction.
In September 2017, we entered into newThe Company has equity distribution agreements with our various sales agents with respect to our ATM offering program of common stock with an aggregate sales amount of up to $500.0$750.0 million. As of June 30, 2023, $750.0 million remained available for issuance under our current ATM offering program.
InDebt Activity
As of June 2017, we issued30, 2023, the Company had outstanding interest rate derivatives totaling $1.0 billion to hedge one-month Term SOFR. The following details the amount and rate of each swap (dollars in thousands):
EXPIRATION DATEAMOUNTWEIGHTED
AVERAGE RATE
January 15, 2024$200,000 1.21 %
May 1, 2026100,000 2.15 %
June 1, 2026150,000 3.83 %
December 1, 2026150,000 3.84 %
June 1, 2027150,000 4.13 %
December 1, 2027250,000 3.79 %
$1,000,000 3.17 %
Subsequent Debt Activity
On August 1, 2023, the Company repaid in full at maturity a public offering (i) $400.0 millionmortgage note payable bearing interest at a rate of 5-year unsecured senior notes, with a coupon of 2.95%3.31% per annum and (ii) $500.0 million of 10-year unsecured senior notes, with a coupon of 3.75% per annum.
In addition, as part of the Duke Acquisition, we were required by the seller to execute as the borrower a $286.0 million Promissory Note with an interest rateoutstanding principal of 4.0% per annum, maturing$9.8 million. The mortgage note encumbered a 66,984 square foot property in 2020.Georgia.
On July 27, 2017, we entered into an amended and restated $1.3 billion Unsecured Credit Agreement whichOperating Activities
Cash flows provided by operating activities increased from $114.1 million for the amount available under the unsecured revolving credit facility to $1.0 billion and extended the maturities of the unsecured revolving credit facility tosix months ended June 30, 2022 andto $254.3 million for the $300.0 million unsecured term loan until February 1,six months ended June 30, 2023. Items impacting cash flows from operations include, but are not limited to, cash generated from property operations, interest payments and the timing related to the payment of invoices and other expenses.
The interest rateCompany may, from time to time, sell properties and redeploy cash from property sales into new investments. To the extent revenues related to the properties being sold exceed income from these new investments, the Company's results of operations and cash flows could be adversely affected.


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Trends and Matters Impacting Operating Results
Management monitors factors and trends important to the Company and the REIT industry to gauge the potential impact on the unsecured revolving credit facility is adjusted LIBOR plus a margin ranging from 0.83%operations of the Company. In addition to 1.55% per annum based on HTA’s credit rating.
On October 24, 2017, our Board of Directors announced a quarterly dividend of $0.305 per share of common stock.
Critical Accounting Policies
The complete list of our critical accounting policies was disclosedthe matters discussed in our 2016 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies as disclosed therein.
Recently Issued or Adopted Accounting Pronouncements
See Note 2 - Summary of Significant Accounting Policies to our accompanying condensed consolidated financial statements for a discussion of recently issued or adopted accounting pronouncements.
Factors Which May Influence Results of Operations
We are not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally and the risk factors previously listed in Part I, Item 1A - Risk Factors, in our 2016Company’s Annual Report on Form 10-K for the year ended December 31, 2022, below are some of the factors and trends that management believes may reasonablyimpact future operations of the Company.
Economic and Market Conditions
Rising interest rates and increased volatility in the capital markets have increased the Company’s cost and availability of debt and equity capital. Limited availability and increases in the cost of capital could adversely impact the Company’s ability to finance operations and acquire and develop properties. To the extent the Company’s tenants experience increased costs or financing difficulties due to the economic and market conditions, they may be expectedunable or unwilling to have a material impact, favorablemake payments or unfavorable, on revenuesperform their obligations when due. Additionally, increased interest rates may also result in less liquid property markets, limiting the Company’s ability to sell existing assets or income from the investment, management and operation of our properties.obtain joint venture capital.
Rental IncomeExpiring Leases
The amountCompany expects that approximately 15% of rental income generated by our properties depends principally on our ability to maintainits leases will expire each year in the occupancy ratesordinary course of currently leased space and to lease currently available space and space that will become available from unscheduled lease terminations at the then applicable rental rates. Negative trends in one or more of these factors could adversely affect our rental income in future periods.

33


Investment Activity
Including the Duke Acquisition, during the nine months ended September 30, 2017, we had investments with an aggregate purchase price of $2.7 billion, which included a 50% ownership in an unconsolidated joint venture as of the date of the acquisition, and a disposition with a gross sales price of $5.0 million. During the nine months ended September 30, 2016, we had investments with an aggregate gross purchase price of $633.0 million and a disposition with a gross sales price of $26.5 million. The amount of any future acquisitions or dispositions could have a significant impact on our results of operations in future periods.
Results of Operations
Comparison of the three months ended September 30, 2017 and 2016, respectively, is set forth below:
 Three Months Ended September 30,
 2017 2016 Change % Change
Revenues:       
Rental income$175,431
 $118,252
 $57,179
 48.4 %
Interest and other operating income563
 88
 475
 NM
Total revenues175,994
 118,340
 57,654
 48.7
Expenses:       
Rental56,331
 36,885
 19,446
 52.7
General and administrative8,283
 7,293
 990
 13.6
Transaction261
 1,122
 (861) (76.7)
Depreciation and amortization70,491
 47,864
 22,627
 47.3
Total expenses135,366
 93,164
 42,202
 45.3
Income before other income (expense)40,628
 25,176
 15,452
 61.4
Interest expense:       
Interest related to derivative financial instruments(264) (552) 288
 52.2
Gain (loss) on change in fair value of derivative financial instruments, net—
 1,306
 (1,306) (100.0)
Total interest related to derivative financial instruments, including net change in fair value of derivative financial instruments(264) 754
 (1,018) (135.0)
Interest related to debt(25,924) (16,386) (9,538) (58.2)
Loss on extinguishment of debt, net(774) (3,000) 2,226
 74.2
Income from unconsolidated joint venture318
 —
 318
 NM
Other (expense) income(27) 95
 (122) NM
Net income$13,957
 $6,639
 $7,318
 110.2 %
        
NOI$119,663
 $81,455
 $38,208
 46.9 %
Same-Property Cash NOI$80,285
 $78,043
 $2,242
 2.9 %

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Comparison of the nine months ended September 30, 2017 and 2016, respectively, is set forth below:
 Nine Months Ended September 30,
 2017 2016 Change % Change
Revenues:       
Rental income$438,949
 $338,646
 $100,303
 29.6 %
Interest and other operating income1,271
 243
 1,028
 NM
Total revenues440,220
 338,889
 101,331
 29.9
Expenses:       
Rental138,874
 105,299
 33,575
 31.9
General and administrative25,178
 20,879
 4,299
 20.6
Transaction5,618
 4,997
 621
 12.4
Depreciation and amortization172,900
 130,430
 42,470
 32.6
Impairment5,093
 —
 5,093
 NM
Total expenses347,663
 261,605
 86,058
 32.9
Income before other income (expense)92,557
 77,284
 15,273
 19.8
Interest expense:       
Interest related to derivative financial instruments(827) (1,856) 1,029
 55.4
Gain (loss) on change in fair value of derivative financial instruments, net884
 (2,144) 3,028
 141.2
Total interest related to derivative financial instruments, including net change in fair value of derivative financial instruments57
 (4,000) 4,057
 101.4
Interest related to debt(59,688) (44,503) (15,185) (34.1)
Gain on sale of real estate, net3
 4,212
 (4,209) (99.9)
Loss on extinguishment of debt, net(11,192) (3,022) (8,170) NM
Income from unconsolidated joint venture381
 —
 381
 NM
Other (expense) income(13) 220
 (233) (105.9)
Net income$22,105
 $30,191
 $(8,086) (26.8)%
        
NOI$301,346
 $233,590
 $67,756
 29.0 %
Same-Property Cash NOI$217,758
 $211,128
 $6,630
 3.1 %
As of September 30, 2017 and 2016, we owned and operated approximately 24.2 million and 17.6business. There are 857 leases totaling 2.3 million square feet that will expire during the remainder of GLA, respectively, with a leased rate of 91.7% and 91.8%, respectively (includes leases which have been executed, but which have not yet commenced), and an occupancy rate of 90.6% and 91.3%, respectively. All explanations are applicable to both HTA and HTALP unless otherwise noted.
Rental Income
For the three and nine months ended September 30, 2017 and 2016, respectively, rental income was comprised2023. Approximately 76% of the following (in thousands):
 Three Months Ended September 30,
 2017 2016 Change % Change
Contractual rental income$169,099
 $114,202
 $54,897
 48.1%
Straight-line rent and amortization of above and (below) market leases4,269
 2,299
 1,970
 85.7
Other operating revenue2,063
 1,751
 312
 17.8
Total rental income$175,431
 $118,252
 $57,179
 48.4%
 Nine Months Ended September 30,
 2017 2016 Change % Change
Contractual rental income$423,696
 $327,779
 $95,917
 29.3%
Straight-line rent and amortization of above and (below) market leases9,475
 6,503
 2,972
 45.7
Other operating revenue5,778
 4,364
 1,414
 32.4
Total rental income$438,949
 $338,646
 $100,303
 29.6%

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Contractual rental income, which includes expense reimbursements, increased $54.9 million2023 are for space in buildings located on or adjacent to hospital campuses, are distributed throughout the portfolio, and $95.9 millionare not concentrated with any one tenant, health system or market area. The Company typically expects to retain 75% to 90% of tenants upon expiration, and the retention ratio for the three and ninefirst six months ended September 30, 2017, respectively, compared toof the three and nine months ended September 30, 2016. year was within this range.
Operating Expenses
The Company historically has experienced increases were primarily due to $53.2 million and $94.6 million of additional contractual rental income from our 2016 and 2017 acquisitions (including properties owned during both periods) for the three and nine months ended September 30, 2017, respectively, and contractual rent increases, partially offset by a decrease in contractual rentproperty taxes throughout its portfolio as a result of buildings we sold during 2016increasing assessments and 2017.
Average startingtax rates levied across the country. The Company continues its efforts to appeal property tax increases and ending annual base rents for GLA entered into for new and renewal leases consisted of the following for the three and nine months ended September 30, 2017 and 2016, respectively (in square feet and per square foot of GLA):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
New and renewal leases:       
Average starting annual base rents$22.34
 $25.17
 $22.46
 $22.67
Average ending annual base rents21.94
 24.60
 22.47
 22.54
        
Square feet of GLA745,000
 339,000
 2,040,000
 1,125,000
Lease rates can vary across markets, and lease rates that are considered above or below current market rent may change over time. Leases that expired in 2017 had rents that we believed were at market rates. In general, leasing concessions vary depending on lease type and term.
Tenant improvements, leasing commissions and tenant concessions for new and renewal leases consisted of the following for the three and nine months ended September 30, 2017 and 2016, respectively (in per square foot of GLA):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
New leases:       
Tenant improvements$17.18
 $20.28
 $18.18
 $21.10
Leasing commissions1.92
 4.91
 2.01
 4.29
Tenant concessions1.93
 3.81
 2.68
 3.92
Renewal leases:       
Tenant improvements$8.58
 $9.46
 $7.50
 $6.19
Leasing commissions1.02
 2.32
 1.09
 1.57
Tenant concessions0.80
 1.71
 1.45
 1.06
The average term for new and renewal leases executed consisted of the following for three and nine months ended September 30, 2017 and 2016, respectively (in years):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
New leases6.2 5.4 5.8 5.4
Renewal leases5.5 4.5 5.0 4.8
Rental Expenses
For the three months ended September 30, 2017 and 2016, rental expenses attributable to our properties were $56.3 million and $36.9 million, respectively. For the nine months ended September 30, 2017 and 2016, rental expenses attributable to our properties were $138.9 million and $105.3 million, respectively. The increases in rental expenses were primarily due to $20.9 million and $34.8 million of additional rental expenses associated with our 2016 and 2017 acquisitions for the three and nine months ended September 30, 2017, respectively, partially offset by improved operating efficiencies and a decrease in rental expenses as a result of the buildings we sold during 2016 and 2017.
General and Administrative Expenses
For the three months ended September 30, 2017 and 2016, general and administrative expenses were $8.3 million and $7.3 million, respectively. For the nine months ended September 30, 2017 and 2016, general and administrative expenses were $25.2 million and $20.9 million, respectively. General and administrative expenses include such costs as salaries, corporate overhead and professional fees, among other items.

36


Transaction Expenses
For the three months ended September 30, 2017 and 2016, transaction expenses were $0.3 million and $1.1 million, respectively. For the nine months ended September 30, 2017 and 2016, transaction expenses were $5.6 million and $5.0 million, respectively. The increase in transaction expenses, which have been adjusted to reflect the prospective presentation of the early adoption of ASU 2017-01 as of January 1, 2017, include $4.6 million of compensation and severance payments to Duke employees pursuant to the Duke Purchase Agreements in connection with the Duke Acquisition. As a result of the adoption, a significant portion of these expenses are now capitalized as part of our investment allocations.
Depreciation and Amortization Expense
For the three months ended September 30, 2017 and 2016, depreciation and amortization expense was $70.5 million and $47.9 million, respectively. For the nine months ended September 30, 2017 and 2016, depreciation and amortization expense was $172.9 million and $130.4 million, respectively. The increases in depreciation and amortization expense were primarily due to the increase in the size of our portfolio.
Impairment
During the nine months ended September 30, 2017, we recorded an impairment charge of $5.1 million that related to an MOB in our portfolio located in Massachusetts. We did not record any impairment charges for the three months ended September 30, 2017 or the three and nine months ended September 30, 2016.
Interest Expense and Net Change in Fair Value of Derivative Financial Instruments
Interest expense, excludingmanage the impact of the increases. In addition, the Company historically has incurred variability in portfolio utilities expense based on seasonality, with the first and third quarters usually reflecting greater amounts. The effects of these operating expense increases are mitigated in leases that have provisions for operating expense reimbursement. As of June 30, 2023, leases for approximately 92% of the Company's total leased square footage allow for some recovery of operating expenses, with approximately 27% having modified gross lease structures and approximately 65% having net changelease structures.
Purchase Options
Information about the Company's unexercised purchase options and the amount and basis for determination of the purchase price is detailed in fair valuethe table below (dollars in thousands):
YEAR EXERCISABLENUMBER OF PROPERTIES
GROSS REAL ESTATE INVESTMENT AS OF
JUNE 30, 2023 1
Current 2
6 $112,669 
2024— — 
20257 112,689 
20266 181,414 
20274 110,260 
20285 133,877 
20293 81,784 
2030— — 
20314 108,818 
20322 24,619 
2033 and thereafter 3
10 340,128 
Total47 $1,206,258 
1Includes three properties totaling $45.0 million with stated purchase prices or prices based on fixed capitalization rates.
2These purchase options have been exercisable for an average of derivative13.4 years.


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3Includes two medical office buildings that are recorded in the line item Investment in financing receivable, net on the Company's Condensed Consolidated Balance Sheet.

Non-GAAP Financial Measures and Key Performance Indicators
Management considers certain non-GAAP financial instruments, increased by $9.3 millionmeasures and $14.2 million, duringkey performance indicators to be useful supplemental measures of the three and nine months ended September 30, 2017, respectively, comparedCompany's operating performance. A non-GAAP financial measure is generally defined as one that purports to measure financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable measure determined in accordance with GAAP. Set forth below are descriptions of the non-GAAP financial measures management considers relevant to the threeCompany's business and nine months ended September 30, 2016. useful to investors, as well as reconciliations of these measures to the most directly comparable GAAP financial measures.
The increases were primarilynon-GAAP financial measures and key performance indicators presented herein are not necessarily identical to those presented by other real estate companies due to the resultfact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income, as indicators of higher average debt outstanding during the three and nine months ended September 30, 2017,Company's financial performance, or as a resultalternatives to cash flow from operating activities as measures of partially funding our investments over the last 12 months with debt and a change inCompany's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the composition of debt, driven by an increase in long-term senior unsecured notes, including the $350.0 million 10-year senior unsecured notes issued in July 2016 at a coupon rate of 3.50% per annum, the $400.0 million and $500.0 million 5-year and 10-year senior unsecured notes issued in June 2017 at a coupon rate of 2.95% per annum and 3.75% per annum, respectively.
During the three months ended September 30, 2017, no gain or loss on change in fair value was recorded as we did not have any derivative financial instruments classified as non-designated hedges. During the three months ended September 30, 2016, the fair market value of our derivatives had a net increase of $1.3 million. During the nine months ended September 30, 2017, the fair market value of our derivatives increased $0.9 million, compared to a net decrease of $2.1 million during the nine months ended September 30, 2016.
To achieve our objectives, we borrow at both fixed and variable rates. From time to time, we also enter into derivative financial instruments, such as interest rate swaps,Company's needs. Management believes that in order to mitigate our interest rate risk onfacilitate a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes. Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements.
Gain or Loss on Extinguishment of Debt
For the three months ended September 30, 2017 and 2016, we realized a net loss on extinguishment of debt of $0.8 million and $3.0 million, respectively. For the nine months ended September 30, 2017 and 2016, we realized a net loss on extinguishment of debt of $11.2 million and $3.0 million, respectively. The increase was primarily due to fees we incurred in connection with the execution and our terminationclear understanding of the Bridge Loan FacilityCompany's historical consolidated operating results, these measures should be examined in conjunction with net income and cash flows from operations as part ofpresented in the Duke Acquisition.Condensed Consolidated Financial Statements and other financial data included elsewhere in this Quarterly Report on Form 10-Q.
NOIFunds from Operations ("FFO"), Normalized FFO and Same-Property Cash NOI
NOI increased $38.2 million to $119.7 millionFunds Available for the three months ended September 30, 2017, compared to the three months ended September 30, 2016. NOI increased $67.8 million to $301.3 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016. These increases were primarily due to $35.5 million and $66.3 million of additional NOI from our 2016 and 2017 acquisitions for the three and nine months ended September 30, 2017, respectively, partially offset by a decrease in NOI as a result of the buildings we sold during 2016 and 2017, and a reduction in straight-line rent from properties we owned more than a year.
Same-Property Cash NOI increased $2.2 million to $80.3 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016. Same-Property Cash NOI increased $6.6 million to $217.8 million for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016. These increases were primarily the result of rent escalations, an increase in average occupancy and improved operating efficiencies.

37


Non-GAAP Financial MeasuresDistribution ("FAD")
FFO and Normalized FFO
We compute FFO in accordance with the current standards establishedper share are operating performance measures adopted by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as netthe most commonly accepted and reported measure of a REIT’s operating performance equal to “net income or loss attributable to common stockholders/unitholders (computed in accordance with GAAP), excluding gains or losses(or losses) from sales of real estate property, and impairment write-downs of depreciable assets, plus depreciation and amortization, related to investments in real estate,impairment, and after adjustments for unconsolidated partnerships and joint ventures. We present this non-GAAP financial measure because we consider it an important supplemental measure”
In addition to FFO, the Company presents Normalized FFO and FAD. Normalized FFO is presented by adding to FFO acquisition-related costs, acceleration of our operating performance and believe it is frequently used by securities analysts, investorsdebt issuance costs, debt extinguishment costs and other interested parties in the evaluation of REITs. Historical cost accounting assumes that the value of realCompany-defined normalizing items to evaluate operating performance. FAD is presented by adding to Normalized FFO non-real estate assets diminishes ratably over time. Since real estate values have historically risen or fallen based on market conditions, many industry investors have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Because FFO excludes depreciation and amortization, unique to real estate, among other items, it provides a perspective not immediately apparent fromnon-cash financing receivable amortization, loan origination cost amortization, deferred financing fees amortization, stock-based compensation expense and rent reserves, net; and subtracting maintenance capital expenditures, including second generation tenant improvements and leasing commissions paid and straight-line rent income, net income or loss attributable to common stockholders/unitholders.
We also compute Normalized FFO, which excludes from FFO: (i) transaction expenses; (ii) gain or loss on change in fair value of derivative financial instruments; (iii) gain or loss on extinguishmentexpense. The Company's definition of debt; (iv) noncontrolling income or loss from OP Units included in diluted shares (only applicable to the Company); and (v) other normalizing items, which include items that are unusual and infrequent in nature. We present this non-GAAP financial measure because it allows for the comparison of our operating performance to other REITs and between periods on a consistent basis. Our methodology for calculating Normalized FFO may be different from the methods utilized by other REITs and, accordingly,these terms may not be comparable to that of other REITs.real estate companies as they may have different methodologies for computing these amounts. FFO, Normalized FFO and FAD should not be considered as an alternative to net income or loss attributable to common stockholders/unitholders (computed in accordance with GAAP) as an indicator of ourthe Company's financial performance nor isor to cash flow from operating activities as an indicator of the Company's liquidity. FFO, Normalized FFO and FAD should be reviewed in connection with GAAP financial measures.
Management believes FFO, Normalized FFO, FFO per common share, Normalized FFO per share and FAD ("Non-GAAP Measures") provide an understanding of the operating performance of the Company’s properties without giving effect to certain significant non-cash items, primarily depreciation and amortization expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. The Company believes that by excluding the effect of depreciation, amortization, impairments and gains or losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, Non-GAAP Measures can facilitate comparisons of operating performance between periods. The Company reports Non-GAAP Measures because these measures are observed by management to also be the predominant measures used by the REIT industry and by industry analysts to evaluate REITs. For these reasons, management deems it appropriate to disclose and discuss these Non-GAAP Measures. However, none of these measures represent cash generated from operating activities determined in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs. Normalized FFO should be reviewed in connection with other GAAP measurements.
The amounts included in the calculation of FFO and Normalized FFO are generally the same for HTALP and HTA, except for net income or loss attributable to common stockholders/unitholders, noncontrolling income or loss from OP Units included in diluted shares (only applicable to the Company) and the weighted average shares of our common stock or HTALP OP Units outstanding.

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The following is the reconciliation of HTA’s FFO and Normalized FFO to net income attributable to common stockholders for the three and nine months ended September 30, 2017 and 2016, respectively (in thousands, except per share data):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income attributable to common stockholders$13,763
 $6,427
 $21,390
 $29,361
Depreciation and amortization expense related to investments in real estate70,021
 47,545
 171,678
 129,477
Gain on sale of real estate, net—
 —
 (3) (4,212)
Impairment—
 —
 5,093
 —
Proportionate share of joint venture depreciation, amortization and other adjustments464
 —
 506
 —
FFO attributable to common stockholders$84,248
 $53,972
 $198,664
 $154,626
Transaction expenses (1)
261
 1,122
 975
 4,997
(Gain) loss on change in fair value of derivative financial instruments, net—
 (1,306) (884) 2,144
Loss on extinguishment of debt, net774
 3,000
 11,192
 3,022
Noncontrolling income from partnership units included in diluted shares166
 211
 635
 802
Other normalizing items, net (2)
—
 133
 4,643
 117
Normalized FFO attributable to common stockholders$85,449
 $57,132
 $215,225
 $165,708
        
Net income attributable to common stockholders per diluted share$0.07
 $0.04
 $0.12
 $0.21
FFO adjustments per diluted share, net0.34
 0.34
 1.00
 0.91
FFO attributable to common stockholders per diluted share$0.41
 $0.38
 $1.12
 $1.12
Normalized FFO adjustments per diluted share, net0.01
 0.02
 0.09
 0.08
Normalized FFO attributable to common stockholders per diluted share$0.42
 $0.40
 $1.21
 $1.20
        
Weighted average diluted common shares outstanding204,795
 143,138
 177,410
 138,314
        
(1) For the three and nine months ended September 30, 2017, amounts have been adjusted to reflect the prospective presentation of the early adoption of ASU 2017-01 as of January 1, 2017.
(2) For the nine months ended September 30, 2017, other normalizing items include $4.6 million of compensation and severance payments to Duke employees pursuant to the Duke purchase agreements in connection with the Duke Acquisition that were included in transaction expenses on HTA’s condensed consolidated statements of operations. In addition, other normalizing items excludes lease termination fees as they are deemed to be generated in the ordinary course of business.

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The following is the reconciliation of HTALP’s FFO and Normalized FFO to net income attributable to common unitholders for the three and nine months ended September 30, 2017 and 2016, respectively (in thousands, except per unit data):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income attributable to common unitholders$13,929
 $6,638
 $22,025
 $30,163
Depreciation and amortization expense related to investments in real estate70,021
 47,545
 171,678
 129,477
Gain on sale of real estate, net—
 —
 (3) (4,212)
Impairment—
 —
 5,093
 —
Proportionate share of joint venture depreciation, amortization and other adjustments464
 —
 506
 —
FFO attributable to common unitholders$84,414
 $54,183
 $199,299
 $155,428
Transaction expenses (1)
261
 1,122
 975
 4,997
(Gain) loss on change in fair value of derivative financial instruments, net—
 (1,306) (884) 2,144
Loss on extinguishment of debt, net774
 3,000
 11,192
 3,022
Other normalizing items, net (2)
—
 133
 4,643
 117
Normalized FFO attributable to common unitholders85,449
 57,132
 215,225
 165,708
        
Net income attributable to common unitholders per diluted unit$0.07
 $0.05
 $0.12
 $0.22
FFO adjustments per diluted unit, net0.34
 0.33
 1.00
 0.90
FFO attributable to common unitholders per diluted unit0.41
 0.38
 1.12
 1.12
Normalized FFO adjustments per diluted unit, net0.01
 0.02
 0.09
 0.08
Normalized FFO attributable to common unitholders per diluted unit$0.42
 $0.40
 $1.21
 $1.20
        
Weighted average diluted common units outstanding204,795
 143,137
 177,410
 138,314
        
(1) For the three and nine months ended September 30, 2017, amounts have been adjusted to reflect the prospective presentation of the early adoption of ASU 2017-01 as of January 1, 2017.
(2) For the nine months ended September 30, 2017, other normalizing items include $4.6 million of compensation and severance payments to Duke employees pursuant to the Duke purchase agreements in connection with the Duke Acquisition that were included in transaction expenses on HTA’s condensed consolidated statements of operations. In addition, other normalizing items excludes lease termination fees as they are deemed to be generated in the ordinary course of business.
NOI, Cash NOI and Same-Property Cash NOI
NOI is a non-GAAP financial measure that is defined as net income or loss (computed in accordance with GAAP) before: (i) general and administrative expenses; (ii) transaction expenses; (iii) depreciation and amortization expense; (iv) impairment; (v) interest expense and net change in fair value of derivative financial instruments; (vi) gain or loss on sales of real estate; (vii) gain or loss on extinguishment of debt; (viii) income or loss from unconsolidated joint venture; and (ix) other income or expense. We believe that NOI provides an accurate measure of the operating performance of our operating assets because NOI excludes certain items that are not associated with the management of our properties. Additionally, we believe that NOI is a widely accepted measure of comparative operating performance of REITs. However, our use of the term NOI may not be comparable to that of other REITs as they may have different methodologies for computing this amount. NOIFurther, these measures should not be considered as an


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alternative to net income or loss (computed in accordance with GAAP) as an indicator of our financial performance. NOI should be reviewed in connection with other GAAP measurements.

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Cash NOI is a non-GAAP financial measure which excludes from NOI: (i) straight-line rent adjustments and (ii) amortization of below and above market leases/leasehold interests and lease termination fees. Contractual base rent, contractual rent increases, contractual rent concessions and changes in occupancy or lease rates upon commencement and expiration of leases are a primary driver of our revenue performance. We believe that Cash NOI, which removes the impact of straight-line rent adjustments, provides another measurement of theCompany’s operating performance of our operating assets. Additionally, we believe that Cash NOI is a widely accepted measure of comparative operating performance of REITs. However, our use of the term Cash NOI may not be comparable to that of other REITs as they may have different methodologies for computing this amount. Cash NOI should not be consideredor as an alternative to cash flow from operating activities as a measure of liquidity.
The table below reconciles net income or loss (computed in accordance with GAAP) as an indicator of our financial performance. Cash NOI should be reviewed in connection with other GAAP measurements.
To facilitate the comparison of Cash NOI between periods, we calculate comparable amounts for a subset of our owned properties referred to as “Same-Property”. Same-Property Cash NOI excludes properties which have not been ownedFFO, Normalized FFO and operated by us during the entire span of all periods presented, excluding properties intended for disposition in the near term, notes receivable interest income and certain non-routine items. Same-Property Cash NOI should not be considered as an alternative to net income or loss (computed in accordance with GAAP) as an indicator of our financial performance. Same-Property Cash NOI should be reviewed in connection with other GAAP measurements.
The following is the reconciliation of HTA’s and HTALP’s NOI, Cash NOI and Same-Property Cash NOI to net incomeFAD for the three and ninesix months ended SeptemberJune 30, 20172023 and 2016, respectively (in thousands):2022.
THREE MONTHS ENDED JUNE 30,SIX MONTHS ENDED JUNE 30,
Amounts in thousands, except per share data2023202220232022
Net (loss) income attributable to common stockholders$(82,759)$6,130 $(169,884)$48,357 
Net (loss) income attributable to common stockholders per share 1
$(0.22)$0.04 $(0.45)$0.32 
Gain on sales of real estate properties(7,156)(8,496)(8,162)(53,280)
Impairment of real estate properties55,215 — 81,442 (25)
Real estate depreciation and amortization185,003 57,334 371,112 112,991 
Non-controlling income from operating partnership units(1,027)— (2,094)— 
Proportionate share of unconsolidated joint ventures4,412 2,807 9,253 5,176 
FFO adjustments$236,447 $51,645 $451,551 $64,862 
FFO adjustments per common share - diluted 7
$0.62 $0.34 $1.18 $0.43 
FFO attributable to common stockholders$153,688 $57,775 $281,667 $113,219 
FFO attributable to common stockholders per common share - diluted 7
$0.40 $0.38 $0.73 $0.75 
Acquisition and pursuit costs 2
669 1,352 956 2,655 
Merger-related costs 3
(15,670)7,085 (10,815)13,201 
Merger-related fair value of debt instruments10,554 — 21,418 — 
Lease intangible amortization240 584 386 893 
Non-routine legal costs/forfeited earnest money received275 140 275 231 
Allowance for credit losses 4
— — 8,599 — 
Debt financing costs— — — 1,429 
Unconsolidated JV normalizing items 5
93 83 210 178 
Normalized FFO adjustments$(3,839)$9,244 $21,029 $18,587 
Normalized FFO adjustments per common share - diluted 8
$(0.01)$0.06 $0.05 $0.12 
Normalized FFO attributable to common stockholders$149,849 $67,019 $302,696 $131,806 
Normalized FFO attributable to common stockholders per common share - diluted 8
$0.39 $0.45 $0.79 $0.88 
Non-real estate depreciation and amortization802 556 1,406 1,016 
Non-cash interest amortization 6
1,618 747 2,300 1,458 
Rent reserves, net(54)16 1,317 159 
Straight-line rent, net(8,005)(1,327)(16,251)(2,536)
Stock-based compensation3,924 3,356 7,669 7,055 
Unconsolidated JV non-cash items 7
(316)(242)(598)(513)
Normalized FFO adjusted for non-cash items$147,818 $70,125 $298,539 $138,445 
2nd generation TI(17,236)(5,051)(26,118)(9,950)
Leasing commissions paid(5,493)(3,475)(12,506)(7,242)
Capital additions(8,649)(4,557)(17,595)(7,177)
FAD$116,440 $57,042 $242,320 $114,076 
FFO weighted average common shares outstanding - diluted 8
383,409 150,545 383,372 150,203 
1Potential common shares are not included in the computation of diluted earnings per share when a loss exists as the effect would be an antidilutive per share amount.
2Acquisition and pursuit costs include third-party and travel costs related to the pursuit of acquisitions and developments.
3Includes costs incurred related to the Merger. For the three and six months ended June 30, 2023, merger costs are net of a refund of $17.8 million for transfer taxes paid during the year ended December 31, 2022.
4For the six months ended June 30, 2023, includes a $5.2 million credit allowance for a mezzanine loan included in "Impairment of real estate and credit loss reserves" on the Statement of Operations and $3.4 million reserve included in “Rental Income” on the Statement of Operations for previously deferred rent and straight line rent for three skilled nursing facilities.

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income$13,957
 $6,639
 $22,105
 $30,191
General and administrative expenses8,283
 7,293
 25,178
 20,879
Transaction expenses (1)
261
 1,122
 5,618
 4,997
Depreciation and amortization expense70,491
 47,864
 172,900
 130,430
Impairment—
 —
 5,093
 —
Interest expense and net change in fair value of derivative financial instruments26,188
 15,632
 59,631
 48,503
Gain on sale of real estate, net—
 —
 (3) (4,212)
Loss on extinguishment of debt, net774
 3,000
 11,192
 3,022
Income from unconsolidated joint venture(318) —
 (381) —
Other expense (income)27
 (95) 13
 (220)
NOI$119,663
 $81,455
 $301,346
 $233,590
Straight-line rent adjustments, net(3,009) (1,161) (5,834) (3,636)
Amortization of (below) and above market leases/leasehold interests, net and lease termination fees214
 3
 246
 497
Cash NOI$116,868
 $80,297
 $295,758
 $230,451
Notes receivable interest income(503) (68) (1,089) (68)
Non Same-Property Cash NOI(36,080) (2,186) (76,911) (19,255)
Same-Property Cash NOI (2)
$80,285
 $78,043
 $217,758
 $211,128
        
(1) For the three and nine months ended September 30, 2017, transaction costs have been adjusted to reflect the prospective presentation of the early adoption of ASU 2017-01 as of January 1, 2017. For the nine months ended September 30, 2017, transactions costs included $4.6 million of compensation and severance payments to Duke employees pursuant to the Duke purchase agreements in connection with the Duke Acquisition.
(2) Same-Property includes 338 and 296 buildings for the three and nine months ended September 30, 2017 and 2016, respectively.


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41




5Includes the Company's proportionate share of acquisition and pursuit costs related to unconsolidated joint ventures.
Liquidity6Includes the amortization of deferred financing costs, discounts and Capital Resourcespremiums, and non-cash financing receivable amortization.
Our primary sources7Includes the Company's proportionate share of straight-line rent, net related to unconsolidated joint ventures.
8The Company utilizes the treasury stock method which includes the dilutive effect of nonvested share-based awards outstanding of 442,263 and 806,310, respectively, for the three months ended June 30, 2023 and 2022, and the diluted impact of 4,042,993 OP units outstanding for the three and six months ended June 30, 2023.

Cash Net Operating Income ("NOI") and Merger Combined Same Store Cash NOI
Cash NOI and Merger Combined Same Store Cash NOI are key performance indicators. Management considers these to be supplemental measures that allow investors, analysts and Company management to measure unlevered property-level operating results. The Company defines Cash NOI as rental income, interest from financing receivables less property operating expenses. Cash NOI excludes non-cash items such as above and below market lease intangibles, straight-line rent, lease inducements, financing receivable amortization, tenant improvement amortization and leasing commission amortization. The Company also excludes cash include: (i) cash flow from operations; (ii) borrowings under our unsecured revolving credit facility; (iii) net proceeds fromlease termination fees. Cash NOI is historical and not necessarily indicative of future results.
Merger Combined Same Store Cash NOI compares Cash NOI for stabilized properties. Stabilized properties are properties that have been included in operations for the issuancesduration of debtthe year-over-year comparison period presented. Accordingly, stabilized properties exclude properties that were recently acquired or disposed of, properties classified as held for sale or intended for sale, properties undergoing redevelopment, and equity securities;newly redeveloped or developed properties.
Legacy HTA properties that met the same store criteria are included in both periods shown as if they were owned by the Company for the full analysis period. The Legacy HR same store pool represented approximately 35% of the NOI of the combined company at the time of the Merger. Management believes that continued reporting of the same store portfolio of only the pre-Merger accounting acquirer (i.e., Legacy HR) offered little value to the investor who was seeking to understand the operating performance and (iv) proceeds from our dispositions. Duringgrowth potential of the next 12 months our primary usescombined company. The Company was provided access to the underlying financial statements of cash are expected to include: (a)Legacy HTA (which financial statements had been audited or, in the fundingcase of acquisitions of MOBsinterim periods, reviewed) and other facilities that servedetailed information about each property, such as the healthcare industry; (b)acquisition date. Based on this available information, the Company was able to consistently apply its same store definition across the combined portfolio, resulting in approximately 85% of the combined portfolio being represented in the same store presentation.
The Company utilizes the redevelopment classification for properties where management has approved a change in strategic direction for such properties through the application of additional resources including an amount of capital expenditures; (c) the payment of operating expenses; (d) debt service payments, including principal payments;expenditures significantly above routine maintenance and (e) the payment of dividends to our stockholders. We anticipate cash flow from operations, restricted cash and reserve accounts and our unsecured revolving credit facility, if needed,capital improvement expenditures.
Any recently acquired property will be sufficient to fund our operating expenses, capital expenditures and dividends to stockholders. Investments and maturing indebtedness may require funds fromincluded in the issuance of debt and/merger combined same store pool once the Company has owned the property for eight full quarters. Newly developed or equity securities or proceeds from sales of real estate.
As of September 30, 2017, we had liquidity of $928.9 million, including $919.5 million available under our unsecured revolving credit facility (which includes the impact of $5.5 million of outstanding letters of credit) and $9.4 million of cash and cash equivalents.
In addition, we had unencumbered assets with a gross book value of $6.2 billion. The unencumberedredeveloped properties may be used as collateral to secure additional financings in future periods or refinance our current debt as it becomes due. Our ability to raise funds from future debt and equity issuances is dependent on our investment grade credit ratings, general economic and market conditions and our operating performance.
When we acquire a property, we prepare a capital plan that contemplates the estimated capital needs of that investment. In addition to operating expenses, capital needs may also include costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan for each investment will be adjusted through ongoing, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs. As of September 30, 2017, we estimate that our expenditures for capital improvementsincluded in the merger combined same store pool eight full quarters after substantial completion.
The following table reflects the Company's Merger Combined Same Store Cash NOI for the remaindersix months ended June 30, 2023 and 2022.
NUMBER OF PROPERTIESGROSS INVESTMENT
at June 30, 2023		MERGER COMBINED SAME STORE CASH NOI for the six months ended June 30,
Dollars in thousands20232022
Merger combined same store properties594 $11,934,872 $362,342 $353,606 






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The following tables reconcile net income to $15.0 million depending onMerger Combined Same Store NOI and the merger combined same store property metrics to the total owned real estate portfolio for the six months ended June 30, 2023 and 2022:
Reconciliations of Legacy HR and Merger Combined Same Store Cash NOI
MERGER COMBINED SAME STORE RECONCILIATION
SIX MONTHS ENDED JUNE 30,
Dollars in thousands20232022
Net (loss) income attributable to common stockholders$(169,884)$48,357 
Other income (expense)207,225 (21,814)
General and administrative expense30,399 21,576 
Depreciation and amortization expense367,671 109,772 
Other expenses 1
(4,029)20,963 
Straight-line rent revenue, net(16,251)(2,536)
Joint venture properties9,726 4,603 
Other revenue 2
(7,643)(4,005)
417,214 176,916 
Pre-Merger Legacy HTA NOI— 255,388 
Cash NOI417,214 432,304 
Cash NOI not included in same store(54,872)(78,698)
Merger combined same store cash NOI$362,342 $353,606 
1.Includes acquisition and pursuit costs, Merger-related costs, rent reserves, above and below market ground lease intangible amortization, leasing activity. Ascommission amortization and ground lease straight-line rent expense.
2.Includes management fee income, interest, above and below market lease intangible amortization, lease inducement amortization, lease terminations and tenant improvement overage amortization.

LEGACY HR SAME STORE RECONCILIATION
SIX MONTHS ENDED JUNE 30,
Dollars in thousands20232022
Net (loss) income attributable to common stockholders$(169,884)$48,357 
Other income (expense)207,225 (21,814)
General and administrative expense30,399 21,576 
Depreciation and amortization expense367,671 109,772 
Other expenses 1
(4,029)20,963 
Straight-line rent revenue, net(16,251)(2,536)
Joint venture properties9,726 4,603 
Other revenue 2
(7,643)(4,005)
417,214 176,916 
Cash NOI not included in same store(261,468)(26,048)
Legacy HR same store cash NOI 3
$155,746 $150,868 
1Includes acquisition and pursuit costs, Merger-related costs, rent reserves, above and below market ground lease intangible amortization, leasing commission amortization and ground lease straight-line rent expense.
2Includes management fee income, interest, above and below market lease intangible amortization, lease inducement amortization, lease terminations and tenant improvement overage amortization.
3Legacy HR same store cash NOI includes 205 properties.


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Reconciliation of restricted cashMerger Combined Same Store Properties
AS OF JUNE 30, 2023
Dollars and square feet in thousandsPROPERTY COUNT
GROSS INVESTMENT 1
SQUARE
FEET		OCCUPANCY
Merger combined same store properties594 $11,934,872 34,824 89.0 %
Acquisitions62 1,087,583 2,878 87.3 %
Development completions4 134,733 266 84.9 %
Redevelopments12 325,247 1,204 55.8 %
Planned Dispositions8 131,187 642 58.9 %
Total owned real estate properties680 $13,613,622 39,814 87.4 %
1Excludes assets held for sale, construction in progress, land held for development, corporate property and reserve accounts for such capital expenditures. We cannot provide assurance, however, that we will not exceed these estimated expenditure levels.
If we experience lower occupancy levels, reduced rental rates, reduced revenuesfinancing lease right-of-use assets unrelated to an imputed lease arrangement as a result of asset sales, or increased capital expenditures and leasing costsa sale leaseback transaction.
Results of Operations
Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022
The Company’s results of operations for the three months ended June 30, 2023 compared to historical levels due to competitive market conditions for newthe same period in 2022 were impacted by the Merger, acquisitions, developments, dispositions, gains on sale, and renewal leases, the effect would be a reduction of net cash provided by operating activities. If such a reduction of net cash provided by operating activities is realized, we may have a cash flow deficit in subsequent periods. Our estimate of net cash available is based on various assumptions which are difficult to predict, including the levels of our leasing activity and related leasing costs. Any changes in these assumptions could impact our financial results and our ability to fund working capital and unanticipated cash needs.markets transactions.
Cash FlowsRevenues
The following is a summary of our cash flowsRental income increased $189.0 million, or 134.4%, for the ninethree months ended SeptemberJune 30, 2017 and 2016, respectively (in thousands):
 Nine Months Ended September 30,  
 2017 2016 Change
Cash and cash equivalents - beginning of period$11,231
 $13,070
 $(1,839)
Net cash provided by operating activities228,542
 148,257
 80,285
Net cash used in investing activities(2,487,471) (541,080) (1,946,391)
Net cash provided by financing activities2,257,108
 397,691
 1,859,417
Cash and cash equivalents - end of period$9,410
 $17,938
 $(8,528)
Net cash provided by operating activities increased in 2017 primarily due2023 compared to the impactprior year period. This increase is primarily comprised of our 2016the following:
•Acquisitions in 2022 and 2017 acquisitions,2023 contributed $5.1 million.
•Leasing activity, including contractual rent increases, contributed $5.0 million.
•Dispositions in 2022 and improved2023 resulted in a decrease of $6.2 million.
•Impact from the Merger contributed $181.2 million.
Interest income increased $2.3 million, or 116.3%, for the three months ended June 30, 2023 compared to the prior year period primarily as a result of notes receivables assumed in the Merger and a note receivable entered into with a buyer upon disposition of a property in the first quarter of 2023.
Other operating efficiencies, partially offset by our 2016income increased $1.5 million, or 54.5%, for the three months ended June 30, 2023 compared to the prior year period primarily as a result of variable parking and 2017 dispositions. We anticipate cash flows fromasset management fees assumed in the Merger.
Expenses
Property operating activitiesexpenses increased $68.4 million, or 120.0%, for the three months ended June 30, 2023 compared to increasethe prior year period primarily as a result of the above itemsfollowing activity:
•Acquisitions in 2022 and continued2023 resulted in an increase of $2.2 million.
•Increases in portfolio operating expenses as follows:
◦Maintenance and repair expense of $1.1 million;
◦Utilities expense of $0.7 million;
◦Administrative, leasing activitycommissions, and other legal expense of $0.8 million;
◦Janitorial expense of $0.3 million; and
◦Insurance expense of $0.5 million.
•Compensation expense decreased $0.5 million.
•Property taxes decreased $0.1 million.
•Dispositions in our existing portfolio.2022 and 2023 resulted in a decrease of $3.1 million.
For•Impact from the nineMerger resulted in an increase of $62.6 million.


34



General and administrative expenses increased approximately $4.9 million, or 46.7%, for the three months ended SeptemberJune 30, 2017, net2023 compared to the prior year period primarily as a result of the following activity:
•Decrease in cash usedcompensation incentive expense of $1.1 million.
•Travel and related expenses increased $0.7 million.
•Net increases, primarily due to impacts from the Merger along with professional fees, audit services, insurance and other administrative costs, of $5.3 million.
Merger-related costs decreased $22.8 million, or 321.2%, for the three months ended June 30, 2023 compared to the prior year period primarily due to a reduction in investing activities primarilylegal and consulting services in connection with the Merger including a refund related to state transfer taxes.
Depreciation and amortization expense increased $127.5 million, or 228.7%, for the investmentthree months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:
•Acquisitions in 2022 and 2023 resulted in an increase of $2.7 million.
•Various building and tenant improvement expenditures resulted in an increase of $3.7 million.
•Dispositions in 2022 and 2023 resulted in a decrease of 1.6 million.
•Assets that became fully depreciated resulted in a decrease of $3.2 million.
•Impact from the Merger resulted in an increase of $125.9 million.
Other Income (Expense)
Gains on sale of real estate was $2.4 billion, investmentproperties
In the second quarter of 2023, the Company recognized gains of approximately $7.2 million. In the second quarter of 2022, the Company recognized gains of approximately $8.5 million.
Interest expense
Interest expense increased $49.8 million, or 320.3%, for the three months ended June 30, 2023 compared to the prior year period. The components of interest expense are as follows:
THREE MONTHS ENDED JUNE 30,CHANGE
Dollars in thousands20232022$%
Contractual interest$52,766 $13,950 $38,816 278.3 %
Net discount/premium accretion9,649 79 9,570 12,113.9 %
Debt issuance costs amortization1,562 708 854 120.6 %
Amortization of interest rate swap settlement42 42 — — %
Amortization of treasury hedge settlement107 107 — — %
Fair value derivative997 — 997 — %
Interest cost capitalization(712)(108)(604)559.3 %
Interest on lease liabilities923 765 158 20.7 %
Total interest expense$65,334 $15,543 $49,791 320.3 %
Contractual interest expense increased $38.8 million, or 278.3%, for the three months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:
•Senior notes and unsecured term loans assumed in the Merger accounted for an increase of approximately $26.6 million.
•New unsecured term loans executed with the amended credit facility accounted for an increase of approximately $9.9 million.
•The Company's Unsecured Term Loan due 2024 and 2026 accounted for an increase of approximately $3.8 million.
•The Unsecured Credit Facility accounted for an increase of approximately $3.8 million due to an increased weighted average balance outstanding and an increase in the weighted average interest rate.
•Active interest rate derivatives accounted for a decrease of $5.2 million.
•Mortgage note repayments, net of assumptions, accounted for a decrease of approximately $0.1 million.


35



Impairment of Real Estate Properties
In the second quarter of 2023, the Company recognized impairments totaling $55.2 million primarily due to four properties with changes in the expected holding periods.
Equity loss from unconsolidated joint venture was $68.8 million,ventures
The Company recognized its proportionate share of losses from its unconsolidated joint ventures. These losses are primarily attributable to non-cash depreciation expense. See Note 3 to the Condensed Consolidated Financial Statements accompanying this report for more details regarding the Company's unconsolidated joint ventures.
Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022
The Company’s results of operations for the six months ended June 30, 2023 compared to the same period in 2022 were impacted by the Merger, acquisitions, developments, dispositions, gains on sale, and capital markets transactions.
Revenues
Rental income increased $374.7 million, or 134.2%, for the six months ended June 30, 2023 compared to the prior year period. This increase is primarily comprised of the following:
•Acquisitions in 2022 and 2023 contributed $19.3 million.
•Leasing activity, including contractual rent increases, contributed $3.5 million.
•Dispositions in 2022 and 2023 resulted in a decrease of $14.2 million.
•Impact from the Merger contributed $362.2 million.
Interest income increased $4.6 million, or 117.3%, from the prior year period primarily as result of notes receivables assumed in the Merger and a note receivable entered into with a buyer upon disposition of a property in the first quarter of 2023.
Other operating income increased $3.6 million, or 69.7%, from the prior year period primarily as a result of variable parking and asset management fees assumed in the Merger.
Expenses
Property operating expenses increased $133.0 million, or 116.2%, for the six months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:
•Acquisitions in 2022 and 2023 resulted in an increase of $5.8 million.
•Increases in portfolio operating expenses as follows:
◦Utilities expense of $1.0 million;
◦Administrative, leasing commissions, and other legal expense of $1.3 million;
◦Janitorial expense of $0.8 million;
◦Maintenance and repair expense of $1.2 million; and
◦Insurance expense of $0.8 million.
•Property tax expense decreased of $0.5 million.
•Compensation expense decreased $0.8 million.
•Dispositions in 2022 and 2023 resulted in a decrease of $7.3 million.
•Impact from the Merger resulted in an increase of 126.8 million.
General and administrative expenses increased approximately $8.8 million, or 40.9%, for the six months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:
•Incentive-based awards decreased $1.5 million.
•Net increases, impacts from the Merger including professional fees, audit services, insurance, travel and other administrative costs, of $10.3 million.


36



Merger-related costs decreased $24.0 million, or 181.9%, for the six months ended for the six months ended June 30, 2023 primarily due to a reduction in legal and consulting services in connection with the Merger including a refund related to state transfer taxes.
Depreciation and amortization expense increased $257.9 million, or 234.9%, for the six months ended June 30, 2023 compared to the prior year period primarily as a result of the following activity:
•Acquisitions in 2022 and 2023 resulted in an increase of $7.1 million.
•Various building and tenant improvement expenditures was $43.0 million, partially offset by proceedsresulted in an increase of $6.5 million.
•Dispositions in 2022 and 2023 resulted in a decrease of $3.6 million.
•Assets that became fully depreciated resulted in a decrease of $6.1 million.
•Impact from the Merger including a reset for fair value resulted in an increase of $254.0 million.
Other Income (Expense)
Gains on sale of real estate properties
Gains on the sale of real estate of $4.7 million. Forproperties for the ninesix months ended SeptemberJune 30, 2016, net cash used in investing activities primarily related2023 and 2022 totaled $8.2 million and $53.3 million, respectively.
Interest expense
Interest expense increased $99.9 million, or 342.0%, for the six months ended June 30, 2023 compared to the investment in real estate was $532.5prior year period. The components of interest expense are as follows:
SIX MONTHS ENDED JUNE 30,CHANGE
Dollars in thousands20232022$%
Contractual interest$103,533 $26,452 $77,081 291.4 %
Net discount/premium accretion19,240 129 19,111 14,814.7 %
Debt issuance costs amortization3,037 1,419 1,618 114.0 %
Amortization of interest rate swap settlement84 84 — — %
Amortization of treasury hedge settlement213 213 — — %
Fair value derivative2,426 — 2,426 — %
Interest cost capitalization(1,282)(145)(1,137)784.1 %
Interest on lease liabilities1,841 1,052 789 75.0 %
Total interest expense$129,092 $29,204 $99,888 342.0 %
Contractual interest expense increased $77.1 million, and capital expenditures was $34.1 million, partially offset by proceeds fromor 291.4%, for the sale of real estate of $23.4 million. We anticipate cash flows used in investing activities to increase as we continue to acquire more properties.

42


For the ninesix months ended SeptemberJune 30, 2017, net cash provided by financing activities primarily related2023 compared to the net proceedsprior year period primarily as a result of sharesthe following activity:
•Senior notes and unsecured term loans assumed with the Merger accounted for an increase of common stock issued was $1.6 billion and net proceeds onapproximately $52.4 million.
•New unsecured term loans executed with the issuance of senior notes was $900.0 million, partially offset by dividends paid to holders of our common stock of $145.9 million and payments on our secured mortgage loans of $75.4 million. For the nine months ended September 30, 2016, net cash provided by financing activities primarily related to the net proceeds of shares of common stock issued of $418.9 million and proceeds from unsecured senior notes of $347.7 million, partially offset by net payments on our unsecured revolvingamended credit facility accounted for an increase of $191.0approximately $19.0 million.
•The Company's Unsecured Term Loan due 2024 and 2026, net of swaps, accounted for an increase of approximately $7.7 million.
•The Unsecured Credit Facility accounted for an increase of approximately $8.1 million dividends paiddue to holders of our common stock of $116.7 millionan increased weighted average balance outstanding and payments on our secured mortgage loans of $98.5 million.
Dividends
The amount of dividends we pay to our stockholders is determined by our Board of Directors,an increase in their sole discretion, and is dependent on a number of factors, including funds available, our financial condition, capital expenditure requirements and annual dividend distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended. We have paid monthly or quarterly dividends since February 2007, and if our investments produce sufficient cash flow, we expect to continue to pay dividends to our stockholders. Because our cash available for dividend distributions in any year may be less than 90% of our taxable income for the year, we may obtain the necessary funds through borrowings, issuing new securities or selling assets to pay out enough of our taxable income to satisfy our dividend distribution requirement. Our organizational documents do not establish a limit on dividends that may constitute a return of capital for federal income tax purposes. The dividend we pay to our stockholders is equal to the distributions received from HTALP in accordance with the terms of HTALP’s partnership agreement. It is our intention to continue to pay dividends. However, our Board of Directors may reduce our dividend rate and we cannot guarantee the timing and amount of dividends that it may pay in the future, if any.
For the nine months ended September 30, 2017, we paid cash dividends of $145.9 million. In October 2017, we paid cash dividends of $61.2 million for the quarter ended September 30, 2017. On October 24, 2017, our Board of Directors announced a dividend of $0.305 per share of common stock. The dividends are to be paid on January 9, 2018 to stockholders of record of our common stock on January 2, 2018.
Financing
We have historically maintained a low leveraged balance sheet and intend to continue to maintain this structure in the long term. However, our total leverage may fluctuate on a short-term basis as we execute our business strategy. As of September 30, 2017, our leverage ratio, measured by debt to total capitalization, was 31.9%.
As of September 30, 2017, we had debt outstanding of $2.9 billion and the weighted average interest rate.
•Interest rate thereinderivatives accounted for a decrease of $10.0 million.
•Mortgage note repayments, net of assumptions, accounted for a decrease of approximately $0.1 million.
Impairment of Real Estate Properties
During the six months ended June 30, 2023, the Company recognized impairments totaling $86.7 million relating to five properties that were sold, one land parcel that was 3.44% per annum, inclusive ofsold, three properties reclassified to held for sale and four additional properties due to changes in the impact of our interest rate swaps. The following is a summary of our unsecured and secured debt.expected holding periods. In addition, the Company recorded $5.2 million in credit loss reserves related to notes receivables. See Note 7 - Debt1 to ourthe Condensed Consolidated Financial Statements accompanying condensed consolidated financial statementsthis report for a further discussion of our debt.
Unsecured Revolving Credit Facility
As of September 30, 2017, $919.5 million was available on our $1.0 billion unsecured revolvingmore details regarding the Company's notes receivables and credit facility. Our unsecured revolving credit facility matures in June 2022.
Unsecured Term Loans
As of September 30, 2017, we had $500.0 million of unsecured term loans outstanding, comprised of $300.0 million under our Unsecured Credit Agreement maturing in 2023, and $200.0 million also maturing in 2023.
Unsecured Senior Notes
As of September 30, 2017, we had $1.85 billion of unsecured senior notes outstanding, comprised of $300.0 million maturing in 2021, $400.0 million maturing in 2022, $300.0 million maturing in 2023, $350.0 million maturing in 2026, and $500.0 million maturing in 2027.
Mortgage Loans
In June 2017, as a part of the Duke Acquisition pursuant to a requirement of the seller, we entered as the borrower a $286.0 million Promissory Note which matures in 2020. During the nine months ended September 30, 2017, we made payments of $75.4 million on our mortgage loans and have $1.2 million of principal payments due during the remainder of 2017.
Commitments and Contingencies
There have been no material changes from the commitments and contingencies disclosed in our 2016 Annual Report on Form 10-K.

loss reserves.
43



37




Equity loss from unconsolidated joint ventures
Debt Service Requirements
WeThe Company recognized its proportionate share of losses from its unconsolidated joint ventures, These losses are required by the terms of our applicable loan agreementsprimarily attributable to meet certain financial covenants, such as minimum net worth and liquidity, and reporting requirements, among others. As of September 30, 2017, we believe that we were in compliance with all such covenants and we are not aware of any covenants that it is reasonably likely that we would not be able to meet in accordance with our loan agreements.
Off-Balance Sheet Arrangements
As of September 30, 2017, we have no material off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Inflation
We are exposed to inflation risk as income from future long-term leases is the primary source of our cash flows from operations. There are provisions in the majority of our tenant leases that protect us from the impact of normal inflation. These provisions include rent escalations, reimbursement billings for operating expense pass-through charges and real estate tax and insurance reimbursements on a per square foot allowance. However, duenon-cash depreciation expense. See Note 3 to the long-term nature of our leases, among other factors,Condensed Consolidated Financial Statements accompanying this report for more details regarding the leases may not reset frequently enough to cover inflation.Company's unconsolidated joint ventures.

Item 3. Quantitative and Qualitative Disclosures Aboutabout Market Risk
ThereThe Company is exposed to market risk in the form of changing interest rates on its debt and mortgage notes. Management uses regular monitoring of market conditions and analysis techniques to manage this risk. During the six months ended June 30, 2023, there were no material changes in the information regardingquantitative and qualitative disclosures about market risk that was providedrisks presented in our 2016the Company’s Annual Report on Form 10-K. The table below presents, as of September 30, 2017,10-K for the principal amounts of our fixed and variable debt and the weighted average interest rates, excluding the impact of interest rate swaps, by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes (in thousands, except interest rates):ended December 31, 2022.
 Expected Maturity Date
 2017 2018 2019 2020 2021 Thereafter Total
Fixed rate debt $915
 $99,777
 $104,821
 $117,769
 $303,424
 $1,639,147
 $2,265,853
Weighted average interest rate on fixed rate debt (per annum)5.43% 4.05% 4.19% 4.41% 3.40% 3.57% 3.64%
Variable rate debt$251
 $1,050
 $1,119
 $27,123
 $509
 $583,117
 $613,169
Weighted average interest rate on variable rate debt based on forward rates in effect as of September 30, 2017 (per annum)3.14% 3.27% 3.65% 3.40% 4.58% 3.64% 2.58%

As of September 30, 2017, we had $2.9 billion of fixed and variable rate debt with interest rates ranging from 2.30% to 6.39% per annum and a weighted average interest rate of 3.41% per annum, excluding the impact of interest rate swaps. We had $2.3 billion (excluding net premium/discount and deferred financing costs) of fixed rate debt with a weighted average interest rate of 3.64% per annum and $613.2 million (excluding net premium/discount and deferred financing costs) of variable rate debt with a weighted average interest rate of 2.58% per annum as of September 30, 2017, excluding the impact of interest rate swaps.
As of September 30, 2017, the fair value of our fixed rate debt was $2.3 billion and the fair value of our variable rate debt was $615.1 million based upon prevailing market rates as of September 30, 2017.
As of September 30, 2017, we had interest rate swaps outstanding that effectively fix $189.8 million of our variable rate debt. Including the impact of these interest rate swaps, the effective rate on our variable rate and total debt is 2.70% and 3.44% per annum, respectively.
In addition to changes in interest rates, the value of our future properties is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants, which may affect our ability to refinance our debt if necessary.

44


Item 4. Controls and Procedures
Healthcare Trust of America, Inc.Disclosure Controls and Procedures
HTA’sThe Company’s management, is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including HTA’s Chief Executive Officer (as the principal executive officer) and Chief Financial Officer (as the principal financial officer and principal accounting officer), to allow timely decisions regarding required disclosures.
As of September 30, 2017, an evaluation was conducted by HTA under the supervision and with the participation of its management, including HTA’sthe Company’s Chief Executive Officer and Chief Financial Officer, ofhas evaluated the effectiveness of itsthe Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act).Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based on this evaluation, HTA’sthe Company’s Chief Executive Officer and Chief Financial Officer eachhave concluded that, HTA’sas of the end of such period, the Company’s disclosure controls and procedures were effective as of September 30, 2017.in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports it files or submits under the Exchange Act.
We acquired the Duke assets during the nine months ended September 30, 2017 andChanges in Internal Control over Financial Reporting
There have integrated the assets and development platform on to our existing internal controls over financial reporting. Except fornot been any changes in internal controls related to the integration of the Duke assets, there were no changes in ourCompany’s internal control over financial reporting that occurred(as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended September 30, 2017to which this report relates that have materially affected, or are reasonably believed to be likely to materially affect, ourthe Company’s internal control over financial reporting.
October��25, 2017

Healthcare Trust of America Holdings, LP
HTALP’s management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including HTA’s Chief Executive Officer (as the principal executive officer) and Chief Financial Officer (as the principal financial officer and principal accounting officer), to allow timely decisions regarding required disclosures.
As of September 30, 2017, an evaluation was conducted by HTALP under the supervision and with the participation of its management, including HTA’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, HTA’s Chief Executive Officer and Chief Financial Officer, on behalf of HTA in its capacity as general partner of HTALP, each concluded that HTALP’s disclosure controls and procedures were effective as of September 30, 2017.
We acquired the Duke assets during the nine months ended September 30, 2017 and have integrated the assets and development platform on to our existing internal controls over financial reporting. Except for any changes in internal controls related to the integration of the Duke assets, there were no changes in HTALP’s internal control over financial reporting that occurred during the quarter ended September 30, 2017 that have materially affected, or are reasonably believed to be likely to materially affect, HTALP’s internal control over financial reporting.
October 25, 2017


45


PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are subjectThe Company is, from time to claims andtime, involved in litigation arising in the ordinary course of business. We doThe Company is not believeaware of any liability from any reasonably foreseeable disposition of such claims andpending or threatened litigation individually or inthat, if resolved against the aggregate,Company, would have a material adverse effect on our accompanying condensedthe Company’s consolidated financial statements.position, results of operations or cash flows.
Item 1A. Risk Factors
There have been no material changes fromIn addition to the riskother information set forth in this report, an investor should carefully consider the factors previously discloseddiscussed in our 2016Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K.10-K for the year ended December 31, 2022, which could materially affect the Company’s business, financial condition or future results. The risks, as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, are not the only risks facing the Company. Additional risks and uncertainties not currently known to management or that management currently deems immaterial also may materially, adversely affect the Company’s business, financial condition, operating results or cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
PurchasesDuring the six months ended June 30, 2023, the Company withheld and canceled shares of Equity Securities byCompany common stock to satisfy employee tax withholding obligations payable upon the Issuer and Affiliated Purchasersvesting of non-vested shares, as follows:


38



PERIODTOTAL NUMBER OF SHARES PURCHASEDAVERAGE PRICE PAID per shareTOTAL NUMBER OF SHARES purchased as part of publicly announced plans or programsMAXIMUM NUMBER OF SHARES that may yet be purchased under the plans or programs
January 1 - January 31— $— — — 
February 1 - February 2838,632 21.71 — — 
March 1 - March 31— — — — 
April 1 - April 30— — — — 
May 1 - May 31— — — — 
June 1 - June 30— — — — 
Total38,632 $21.71 
Item 5. Other Information
During the three months ended SeptemberJune 30, 2017, we repurchased shares2023, no director or officer of our common stockthe Company adopted or terminated a "Rule 10b5-1 trading agreement" or "non-Rule 10b5-1 trading agreement," as follows:each term is defined in Item 408(a) of Regulation S-K.
Period 
Total Number of
Shares Purchased (1) (2)
 
Average Price
Paid per Share (1) (2)
 
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plan or Program
 Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
July 1, 2017 to July 31, 2017 —
 $—
 —
 —
August 1, 2017 to August 31, 2017 2,466
 30.64
 —
 —
September 1, 2017 to September 30, 2017 —
 —
 —
 —
         
(1) Purchases mainly represent shares withheld to satisfy withholding obligations on the vesting of restricted shares. The price paid per share was the then closing price of our common stock on the NYSE.
(2) For each share of common stock redeemed by HTA, HTALP redeems a corresponding number of OP Units in the HTALP operating partnership. Therefore, the OP Units in the HTALP operating partnership repurchased by HTALP are the same as the shares of common stock repurchased by HTA as shown above.
Item 6. Exhibits
EXHIBITDESCRIPTION
Exhibit 3.1
Fifth Articles of Amendment and Restatement of the Company, as amended (filed herewith).
Exhibit 3.2
Fourth Amended and Restated Bylaws of the Company.1
Exhibit 4.1
Description of the Registrant's securities registered pursuant to Section 12 of the Securities and Exchange Act of 1934 (filed herewith).
Exhibit 22.1
Subsidiary Issuers of Guaranteed Securities. (filed herewith)
Exhibit 31.1
Certification of the Chief Executive Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 31.2
Certification of the Chief Financial Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 32
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Exhibit 101.INSThe instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCHXBRL Taxonomy Extension Schema Document (furnished electronically herewith)
Exhibit 101.CALXBRL Taxonomy Extension Calculation Linkbase Document (furnished electronically herewith)
Exhibit 101.LABXBRL Taxonomy Extension Labels Linkbase Document (furnished electronically herewith)
Exhibit 101.DEFXBRL Taxonomy Extension Definition Linkbase Document (furnished electronically herewith)
Exhibit 101.PREXBRL Taxonomy Extension Presentation Linkbase Document (furnished electronically herewith)
The exhibits listed1 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on the Exhibit Index (following the signatures section of this Quarterly Report) are included,April 29, 2020 and hereby incorporated by reference, in this Quarterly Report.reference.



46



39



SIGNATURESSIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants haveregistrant has duly caused this report to be signed on theirits behalf by the undersigned thereunto duly authorized.
Healthcare Trust of America, Inc.
By:/s/ Scott D. PetersChief Executive Officer, President and Chairman
 Scott D. Peters(Principal Executive Officer)
Date:October 25, 2017
By:/s/ Robert A. MilliganChief Financial Officer
 Robert A. Milligan(Principal Financial Officer and Principal Accounting Officer)
Date:October 25, 2017

HEALTHCARE REALTY TRUST INCORPORATED
Healthcare Trust of America Holdings, LP
By:
By:Healthcare Trust of America, Inc.,
our General Partner
By:/s/ Scott D. PetersChief Executive Officer, President and Chairman
 Scott D. Peters(Principal Executive Officer)
Date:October 25, 2017
By:/s/ Robert A. MilliganChief Financial Officer
 Robert A. Milligan(Principal Financial Officer and Principal Accounting Officer)
Date:October 25, 2017



47


EXHIBIT INDEX
The following exhibits are included, or incorporated by reference, in this Quarterly Report for the quarter ended September 30, 2017 (and are numbered in accordance with Item 601 of Regulation S-K).
J. CHRISTOPHER DOUGLAS
1.1
Underwriting Agreement, dated May 2, 2017, by and among Healthcare Trust of America, Inc., Healthcare Trust of America Holdings, LP, on the one hand, and Wells Fargo Securities, LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC, as representatives of the several underwriters named therein, on the other hand (included as Exhibit 1.1 to our Current Report on Form 8-K filed on May 8, 2017 and incorporated herein by reference).
1.2
Underwriting Agreement, dated June 1, 2017, among Healthcare Trust of America Holdings, LP, Healthcare Trust of America, Inc., and Wells Fargo Securities, LLC, J.P. Morgan Securities LLC and U.S. Bancorp Investments, Inc., as representatives of the several underwriters named therein (included as Exhibit 1.1 to our Current Report on Form 8-K filed on June 7, 2017 and incorporated herein by reference).
1.3
Form of Equity Distribution Agreement (included as Exhibit 1.1 to our Current Report on Form 8-K filed on September 18, 2017 and incorporated herein by reference).
1.4
Form of Master Forward Confirmation (included as Exhibit 1.2 to our Current Report on Form 8-K filed on September 18, 2017 and incorporated herein by reference).
2.1
Agreement of Purchase and Sale (Pool II), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.1 to our Form 10-Q filed on August 1, 2017).
2.2
Agreement of Purchase and Sale (Pool III), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.2 to our Form 10-Q filed on August 1, 2017).
2.3
Agreement of Purchase and Sale (Pool IV), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.3 to our Form 10-Q filed on August 1, 2017).
2.4
Agreement of Purchase and Sale (Pool V), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.4 to our Form 10-Q filed on August 1, 2017).
2.5
Agreement of Purchase and Sale (Pool VI), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.5 to our Form 10-Q filed on August 1, 2017).
2.6
Agreement of Purchase and Sale (Pool VII), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.6 to our Form 10-Q filed on August 1, 2017).
2.7
Agreement of Purchase and Sale (Pool VIII), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.7 to our Form 10-Q filed on August 1, 2017).
2.8
Agreement of Purchase and Sale (Pool IX), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.8 to our Form 10-Q filed on August 1, 2017).
2.9
Agreement of Purchase and Sale (Pool X), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.9 to our Form 10-Q filed on August 1, 2017).
2.10
Agreement of Purchase and Sale (Pool XI), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.10 to our Form 10-Q filed on August 1, 2017).
2.11
Agreement of Purchase and Sale (Pool XII), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.11 to our Form 10-Q filed on August 1, 2017).
2.12
Agreement of Purchase and Sale (Pool XIII), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.12 to our Form 10-Q filed on August 1, 2017).
2.13
Agreement of Purchase and Sale (Pool XIV), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.13 to our Form 10-Q filed on August 1, 2017).
2.14
Agreement of Purchase and Sale (Pool XV), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.14 to our Form 10-Q filed on August 1, 2017).
2.15
Agreement of Purchase and Sale (Pool XVI), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.15 to our Form 10-Q filed on August 1, 2017).

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J. Christopher Douglas
2.16
Agreement of PurchaseExecutive Vice President and Sale (Pool I), dated April 29, 2017, by and among HTA Acquisition Sub, LLC and Duke Realty Limited Partnership, Duke Construction Limited Partnership and certain of their subsidiaries and affiliated entities (included as Exhibit 2.1 to our Current Report on Form 8-K filed on May 1, 2017 and incorporated herein by reference).
Chief Financial Officer
3.1August 8, 2023
Articles Supplementary of Healthcare Trust of America, Inc., dated July 14, 2017 (included as Exhibit 3.1 to our Current Report on Form 8-K filed on July 14, 2017 and incorporated herein by reference).
4.1
2022 Notes Indenture, dated as of June 8, 2017, among Healthcare Trust of America Holdings, LP, Healthcare Trust of America, Inc. and U.S. Bank National Association, as trustee, including the form of 2.950% Senior Notes due 2022 and the guarantee thereof (included as Exhibit 4.1 to our Current Report on Form 8-K filed on June 13, 2017 and incorporated herein by reference).
4.2
2027 Notes Indenture, dated as of June 8, 2017, among Healthcare Trust of America Holdings, LP, Healthcare Trust of America, Inc. and U.S. Bank National Association, as trustee, including the form of 3.750% Senior Notes due 2027 and the guarantee thereof (included as Exhibit 4.2 to our Current Report on Form 8-K filed on June 13, 2017 and incorporated herein by reference).
5.1
Opinion of Venable LLP (included as Exhibit 5.1 to our Current Report on Form 8-K filed on May 8, 2017 and incorporated herein by reference).
5.2
Opinion of Venable LLP (included as Exhibit 5.1 to our Current Report on Form 8-K filed on June 13, 2017 and incorporated herein by reference).
5.3
Opinion of O’Melveny & Myers LLP (included as Exhibit 5.2 to our Current Report on Form 8-K filed on June 13, 2017 and incorporated herein by reference).
5.4
Opinion of Venable LLP (included as Exhibit 5.1 to our Current Report on Form 8-K filed on September 18, 2017 and incorporated herein by reference).
8.1
Opinion of O’Melveny & Myers LLP as to certain tax matters (included as Exhibit 8.1 to our Current Report on Form 8-K filed on May 8, 2017 and incorporated herein by reference).
8.2
Opinion of O’Melveny & Myers LLP as to certain tax matters (included as Exhibit 8.1 to our Current Report on Form 8-K filed on June 13, 2017 and incorporated herein by reference).
10.1
Letter Agreement between Healthcare Trust of America, Inc. and Scott D. Peters dated July 14, 2017 (included as Exhibit 10.1 to our Current Report on Form 8-K filed on July 14, 2017 and incorporated herein by reference).
10.2
Letter Agreement between Healthcare Trust of America, Inc. and Robert A. Milligan dated July 14, 2017 (included as Exhibit 10.2 to our Current Report on Form 8-K filed on July 14, 2017 and incorporated herein by reference).
10.3
Letter Agreement between Healthcare Trust of America, Inc. and Amanda L. Houghton dated July 14, 2017 (included as Exhibit 10.3 to our Current Report on Form 8-K filed on July 14, 2017 and incorporated herein by reference).
10.4
Credit Agreement by and among Healthcare Trust of America Holdings, LP, Healthcare Trust of America, Inc., JPMorgan Chase Bank, N.A., as administrative agent, Wells Fargo Bank, National Association, U.S. Bank National Association, Capital One, N.A., PNC Bank, National Association and Bank of America, N.A., as syndication agents, Bank of Montreal, The Bank of Nova Scotia, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Comaps Bank, Fifth Third Bank and Morgan Stanley Senior Funding, Inc., as documentation agents, Regions Bank, as managing agent, and the lenders named therein, dated July 27, 2017 (included as Exhibit 10.1 to our Current Report on Form 8-K filed on July 31, 2017 and incorporated herein by reference).
10.5
Guaranty dated July 27, 2017, by Healthcare Trust of America, Inc. for the benefit of JPMorgan Chase Bank, N.A., as administrative agent, the Lenders, the Issuing Bank and the Swingline Lender (included as Exhibit 10.2 to our Current Report on Form 8-K filed on July 31, 2017 and incorporated herein by reference).
23.1
Consent of KPMG LLP (included as Exhibit 23.1 to our Current Report on Form 8-K filed on May 1, 2017 and incorporated herein by reference).
23.2
Consent of Venable LLP (included as Exhibit 23.1 to our Current Report on Form 8-K filed on May 8, 2017 and incorporated herein by reference).
23.3
Consent of O’Melveny & Myers LLP as to certain tax matters (included as Exhibit 23.2 to our Current Report on Form 8-K filed on May 8, 2017 and incorporated herein by reference).
23.4
Consent of Venable LLP (included as Exhibit 23.1 to our Current Report on Form 8-K filed on June 13, 2017 and incorporated herein by reference).
23.5
Consent of O’Melveny & Myers LLP (included as Exhibit 5.2 and 8.1 to our Current Report on Form 8-K filed on June 13, 2017 and incorporated herein by reference).
23.6
Consent of KPMG LLP (included as Exhibit 23.1 to our Current Report on Form 8-K/A filed on August 21, 2017 and incorporated herein by reference).
23.7
Consent of Katz, Sapper & Miller, LLP (included as Exhibit 23.2 to our Current Report on Form 8-K/A filed on August 21,2017 and incorporated herein by reference).
23.8
Consent of Venable LLP (included as Exhibit 5.1 to our Current Report on Form 8-K filed on September 18, 2017 and incorporated herein by reference).


49

40


31.1*
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.
31.2*
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.
31.3*
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
31.4*
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
32.1**
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Inc.
32.2**
Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.
32.3**
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
32.4**
Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
101.INS*XBRL Instance Document.
101.SCH*XBRL Taxonomy Extension Schema Document.
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document.
*Filed herewith.
**Furnished herewith.


50