UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(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, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-08895

Healthpeak Properties, Inc.

(Exact name of registrant as specified in its charter)



Maryland						33-0091377
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

~~5050~~4600 South Syracuse Street, Suite ~~800~~500

Denver, CO 80237

(Address of principal executive offices) (Zip Code)

(720) 428-5050

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	PEAK	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). 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	☐	Smaller reporting company	☐
		Emerging growth 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As ofOctober ~~31, 2022,~~27, 2023, there were ~~537,540,144~~547,074,354 shares of the registrant’s $1.00 par value common stock outstanding.

Table of Contents

HEALTHPEAK PROPERTIES, INC.

INDEX

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Healthpeak Properties, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Real estate:	Real estate:					Real estate:
Buildings and improvements	Buildings and improvements	$	12,633,935	$	12,025,271	Buildings and improvements	$	13,097,282	$	12,784,078
Development costs and construction in progress	Development costs and construction in progress	744,711		877,423		Development costs and construction in progress	863,341		760,355
Land		2,647,430		2,603,964
Land and improvements						Land and improvements	2,657,602		2,667,188
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(3,148,019)		(2,839,229)		Accumulated depreciation and amortization	(3,498,077)		(3,188,138)
Net real estate	Net real estate	12,878,057		12,667,429		Net real estate	13,120,148		13,023,483
Net investment in direct financing leases		—		44,706
Loans receivable, net of reserves of $5,115 and $1,813		383,991		415,811

Loans receivable, net of reserves of $8,023 and $8,280						Loans receivable, net of reserves of $8,023 and $8,280	225,881		374,832
Investments in and advances to unconsolidated joint ventures	Investments in and advances to unconsolidated joint ventures	698,903		403,634		Investments in and advances to unconsolidated joint ventures	745,381		706,677
Accounts receivable, net of allowance of $2,521 and $1,870		53,964		48,691
Accounts receivable, net of allowance of $2,077 and $2,399						Accounts receivable, net of allowance of $2,077 and $2,399	59,085		53,436
Cash and cash equivalents	Cash and cash equivalents	112,452		158,287		Cash and cash equivalents	63,478		72,032
Restricted cash	Restricted cash	54,500		53,454		Restricted cash	50,449		54,802
Intangible assets, net	Intangible assets, net	444,215		519,760		Intangible assets, net	339,191		418,061
Assets held for sale and discontinued operations, net		51,495		37,190
Assets held for sale, net						Assets held for sale, net	8,277		49,866
Right-of-use asset, net	Right-of-use asset, net	232,155		233,942		Right-of-use asset, net	233,480		237,318
Other assets, net	Other assets, net	752,224		674,615		Other assets, net	757,164		780,722
Total assets	Total assets	$	15,661,956	$	15,257,519	Total assets	$	15,602,534	$	15,771,229

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Bank line of credit and commercial paper	Bank line of credit and commercial paper	$	1,585,333	$	1,165,975	Bank line of credit and commercial paper	$	424,000	$	995,606

Term loans						Term loans	496,603		495,957
Senior unsecured notes	Senior unsecured notes	4,657,651		4,651,933		Senior unsecured notes	5,401,461		4,659,451
Mortgage debt	Mortgage debt	347,987		352,081		Mortgage debt	342,349		346,599
Intangible liabilities, net	Intangible liabilities, net	162,874		177,232		Intangible liabilities, net	133,668		156,193
Liabilities related to assets held for sale and discontinued operations, net		12,831		15,056
Liabilities related to assets held for sale, net						Liabilities related to assets held for sale, net	39		4,070
Lease liability	Lease liability	200,813		204,547		Lease liability	204,762		208,515
Accounts payable, accrued liabilities, and other liabilities	Accounts payable, accrued liabilities, and other liabilities	732,895		755,384		Accounts payable, accrued liabilities, and other liabilities	687,650		772,485
Deferred revenue	Deferred revenue	835,223		789,207		Deferred revenue	879,174		844,076
Total liabilities	Total liabilities	8,535,607		8,111,415		Total liabilities	8,569,706		8,482,952

Commitments and contingencies (Note 10)	Commitments and contingencies (Note 10)					Commitments and contingencies (Note 10)

Redeemable noncontrolling interests	Redeemable noncontrolling interests	127,583		87,344		Redeemable noncontrolling interests	49,016		105,679

Common stock, $1.00 par value: 750,000,000 shares authorized; 537,533,719 and 539,096,879 shares issued and outstanding		537,534		539,097
Common stock, $1.00 par value: 750,000,000 shares authorized; 547,072,311 and 546,641,973 shares issued and outstanding						Common stock, $1.00 par value: 750,000,000 shares authorized; 547,072,311 and 546,641,973 shares issued and outstanding	547,072		546,642
Additional paid-in capital	Additional paid-in capital	10,014,707		10,100,294		Additional paid-in capital	10,401,994		10,349,614
Cumulative dividends in excess of earnings	Cumulative dividends in excess of earnings	(4,114,806)		(4,120,774)		Cumulative dividends in excess of earnings	(4,528,508)		(4,269,689)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	29,526		(3,147)		Accumulated other comprehensive income (loss)	36,747		28,134
Total stockholders’ equity	Total stockholders’ equity	6,466,961		6,515,470		Total stockholders’ equity	6,457,305		6,654,701
Joint venture partners	Joint venture partners	330,749		342,234		Joint venture partners	313,402		327,721
Non-managing member unitholders	Non-managing member unitholders	201,056		201,056		Non-managing member unitholders	213,105		200,176
Total noncontrolling interests	Total noncontrolling interests	531,805		543,290		Total noncontrolling interests	526,507		527,897
Total equity	Total equity	6,998,766		7,058,760		Total equity	6,983,812		7,182,598
Total liabilities and equity	Total liabilities and equity	$	15,661,956	$	15,257,519	Total liabilities and equity	$	15,602,534	$	15,771,229

See accompanying Notes to the Unaudited Consolidated Financial Statements.

Table of Contents

Healthpeak Properties, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenues:	Revenues:									Revenues:
Rental and related revenues	Rental and related revenues	$	392,301	$	353,516	$	1,149,530	$	1,022,130	Rental and related revenues	$	417,075	$	392,301	$	1,219,473	$	1,149,530
Resident fees and services	Resident fees and services	122,142		119,022		369,062		352,458		Resident fees and services	133,808		122,142		391,076		369,062
Interest income										Interest income	5,360		5,963		16,802		16,950
Income from direct financing leases	Income from direct financing leases	—		2,179		1,168		6,522		Income from direct financing leases	—		—		—		1,168
Interest income		5,963		6,748		16,950		31,869
Total revenues	Total revenues	520,406		481,465		1,536,710		1,412,979		Total revenues	556,243		520,406		1,627,351		1,536,710
Costs and expenses:	Costs and expenses:									Costs and expenses:
Interest expense	Interest expense	44,078		35,905		123,531		121,429		Interest expense	50,510		44,078		147,547		123,531
Depreciation and amortization	Depreciation and amortization	173,190		177,175		531,412		506,172		Depreciation and amortization	184,559		173,190		561,357		531,412
Operating	Operating	220,208		202,139		642,499		574,032		Operating	232,734		220,208		677,659		642,499
General and administrative	General and administrative	24,549		23,270		73,161		72,260		General and administrative	23,093		24,549		73,576		73,161
Transaction costs	Transaction costs	728		—		1,636		1,417		Transaction costs	36		728		3,098		1,636

Impairments and loan loss reserves (recoveries), net	Impairments and loan loss reserves (recoveries), net	3,407		285		3,678		4,458		Impairments and loan loss reserves (recoveries), net	(550)		3,407		(156)		3,678
Total costs and expenses	Total costs and expenses	466,160		438,774		1,375,917		1,279,768		Total costs and expenses	490,382		466,160		1,463,081		1,375,917
Other income (expense):	Other income (expense):									Other income (expense):
Gain (loss) on sales of real estate, net	Gain (loss) on sales of real estate, net	(4,149)		14,635		10,047		189,873		Gain (loss) on sales of real estate, net	—		(4,149)		86,463		10,047
Gain (loss) on debt extinguishments		—		(667)		—		(225,824)

Other income (expense), net	Other income (expense), net	305,678		1,670		326,855		5,604		Other income (expense), net	1,481		305,678		4,208		326,855
Total other income (expense), net	Total other income (expense), net	301,529		15,638		336,902		(30,347)		Total other income (expense), net	1,481		301,529		90,671		336,902
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	355,775		58,329		497,695		102,864		Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	67,342		355,775		254,941		497,695
Income tax benefit (expense)	Income tax benefit (expense)	3,834		649		3,775		1,404		Income tax benefit (expense)	(787)		3,834		(2,225)		3,775
Equity income (loss) from unconsolidated joint ventures	Equity income (loss) from unconsolidated joint ventures	(325)		2,327		2,141		4,517		Equity income (loss) from unconsolidated joint ventures	2,101		(325)		6,646		2,141
Income (loss) from continuing operations	Income (loss) from continuing operations	359,284		61,305		503,611		108,785		Income (loss) from continuing operations	68,656		359,284		259,362		503,611
Income (loss) from discontinued operations	Income (loss) from discontinued operations	(1,298)		601		2,011		384,569		Income (loss) from discontinued operations	—		(1,298)		—		2,011
Net income (loss)	Net income (loss)	357,986		61,906		505,622		493,354		Net income (loss)	68,656		357,986		259,362		505,622
Noncontrolling interests’ share in continuing operations	Noncontrolling interests’ share in continuing operations	(4,016)		(7,195)		(11,701)		(14,036)		Noncontrolling interests’ share in continuing operations	(4,442)		(4,016)		(24,297)		(11,701)
Noncontrolling interests’ share in discontinued operations		—		—		—		(2,539)

Net income (loss) attributable to Healthpeak Properties, Inc.	Net income (loss) attributable to Healthpeak Properties, Inc.	353,970		54,711		493,921		476,779		Net income (loss) attributable to Healthpeak Properties, Inc.	64,214		353,970		235,065		493,921

Participating securities’ share in earnings	Participating securities’ share in earnings	(604)		(269)		(2,523)		(3,001)		Participating securities’ share in earnings	(166)		(604)		(1,568)		(2,523)
Net income (loss) applicable to common shares	Net income (loss) applicable to common shares	$	353,366	$	54,442	$	491,398	$	473,778	Net income (loss) applicable to common shares	$	64,048	$	353,366	$	233,497	$	491,398

Basic earnings (loss) per common share:	Basic earnings (loss) per common share:									Basic earnings (loss) per common share:
Continuing operations	Continuing operations	$	0.66	$	0.10	$	0.91	$	0.17	Continuing operations	$	0.12	$	0.66	$	0.43	$	0.91
Discontinued operations	Discontinued operations	0.00		0.00		0.00		0.71		Discontinued operations	—		0.00		—		0.00
Net income (loss) applicable to common shares	Net income (loss) applicable to common shares	$	0.66	$	0.10	$	0.91	$	0.88	Net income (loss) applicable to common shares	$	0.12	$	0.66	$	0.43	$	0.91
Diluted earnings (loss) per common share:	Diluted earnings (loss) per common share:									Diluted earnings (loss) per common share:
Continuing operations	Continuing operations	$	0.65	$	0.10	$	0.91	$	0.17	Continuing operations	$	0.12	$	0.65	$	0.43	$	0.91
Discontinued operations	Discontinued operations	0.00		0.00		0.00		0.71		Discontinued operations	—		0.00		—		0.00
Net income (loss) applicable to common shares	Net income (loss) applicable to common shares	$	0.65	$	0.10	$	0.91	$	0.88	Net income (loss) applicable to common shares	$	0.12	$	0.65	$	0.43	$	0.91

Weighted average shares outstanding:	Weighted average shares outstanding:									Weighted average shares outstanding:
Basic	Basic	538,417		539,021		539,105		538,879		Basic	547,062		538,417		546,978		539,105
Diluted	Diluted	546,015		539,388		544,852		539,159		Diluted	547,331		546,015		547,247		544,852

See accompanying Notes to the Unaudited Consolidated Financial Statements.

Table of Contents

Healthpeak Properties, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income (loss)	Net income (loss)	$	357,986	$	61,906	$	505,622	$	493,354	Net income (loss)	$	68,656	$	357,986	$	259,362	$	505,622
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Net unrealized gains (losses) on derivatives	Net unrealized gains (losses) on derivatives	30,744		—		32,373		332		Net unrealized gains (losses) on derivatives	5,230		30,744		8,421		32,373
Change in Supplemental Executive Retirement Plan obligation and other	Change in Supplemental Executive Retirement Plan obligation and other	100		108		300		323		Change in Supplemental Executive Retirement Plan obligation and other	64		100		192		300
Reclassification adjustment realized in net income (loss)		—		—		—		(251)

Total other comprehensive income (loss)	Total other comprehensive income (loss)	30,844		108		32,673		404		Total other comprehensive income (loss)	5,294		30,844		8,613		32,673
Total comprehensive income (loss)	Total comprehensive income (loss)	388,830		62,014		538,295		493,758		Total comprehensive income (loss)	73,950		388,830		267,975		538,295
Total comprehensive (income) loss attributable to noncontrolling interests’ share in continuing operations	Total comprehensive (income) loss attributable to noncontrolling interests’ share in continuing operations	(4,016)		(7,195)		(11,701)		(14,036)		Total comprehensive (income) loss attributable to noncontrolling interests’ share in continuing operations	(4,442)		(4,016)		(24,297)		(11,701)
Total comprehensive (income) loss attributable to noncontrolling interests’ share in discontinued operations		—		—		—		(2,539)

Total comprehensive income (loss) attributable to Healthpeak Properties, Inc.	Total comprehensive income (loss) attributable to Healthpeak Properties, Inc.	$	384,814	$	54,819	$	526,594	$	477,183	Total comprehensive income (loss) attributable to Healthpeak Properties, Inc.	$	69,508	$	384,814	$	243,678	$	526,594

See accompanying Notes to the Unaudited Consolidated Financial Statements.

Table of Contents

Healthpeak Properties, Inc.

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

(In thousands, except per share data)

(Unaudited)

For the three months ended September 30, 2023:


	Common Stock			Additional Paid-In Capital		Cumulative Dividends In Excess Of Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Total Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
	Shares	Amount


July 1, 2023	547,053	$	547,053	$	10,384,982	$	(4,428,423)	$	31,453	$	6,535,065	$	526,796	$	7,061,861	$	63,792
Net income (loss)	—	—		—		64,214		—		64,214		4,282		68,496		160
Other comprehensive income (loss)	—	—		—		—		5,294		5,294		—		5,294		—
Issuance of common stock, net	20	20		308		—		—		328		—		328		—

Repurchase of common stock	(1)	(1)		(13)		—		—		(14)		—		(14)		—

Stock-based compensation	—	—		1,782		—		—		1,782		2,572		4,354		—
Common dividends ($0.30 per share)	—	—		—		(164,299)		—		(164,299)		—		(164,299)		—
Distributions to noncontrolling interests	—	—		—		—		—		—		(7,316)		(7,316)		(73)
Contributions from noncontrolling interests	—	—		—		—		—		—		173		173		72
Adjustments to redemption value of redeemable noncontrolling interests	—	—		14,935		—		—		14,935		—		14,935		(14,935)



September 30, 2023	547,072	$	547,072	$	10,401,994	$	(4,528,508)	$	36,747	$	6,457,305	$	526,507	$	6,983,812	$	49,016

For the three months ended September 30, 2022:

Common Stock Additional Paid-In Capital Cumulative Dividends In Excess Of Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Total Noncontrolling Interests Total
Equity Redeemable Noncontrolling Interests
Shares Amount
July 1, 2022 539,580 $ 539,580 $ 10,073,712 $ (4,306,762) $ (1,318) $ 6,305,212 $ 535,176 $ 6,840,388 $ 115,877
Net income (loss) — — — 353,970 — 353,970 4,003 357,973 13
Other comprehensive income (loss) — — — — 30,844 30,844 — 30,844 —
Issuance of common stock, net 16 16 359 — — 375 — 375 —
Repurchase of common stock (2,062) (2,062) (53,966) — — (56,028) — (56,028) —
Amortization of stock-based compensation — — 6,030 — — 6,030 — 6,030 —
Common dividends ($0.30 per share) — — — (162,014) — (162,014) — (162,014) —
Distributions to noncontrolling interests — — — — — — (7,374) (7,374) (42)
Contributions from noncontrolling interests — — — — — — — — 307
Adjustments to redemption value of redeemable noncontrolling interests — — (11,428) — — (11,428) — (11,428) 11,428
September 30, 2022 537,534 $ 537,534 $ 10,014,707 $ (4,114,806) $ 29,526 $ 6,466,961 $ 531,805 $ 6,998,766 $ 127,583

~~For the three months ended September 30, 2021:~~

Common Stock Additional Paid-In Capital Cumulative Dividends In Excess Of Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Total Noncontrolling Interests Total
Equity Redeemable Noncontrolling Interests
Shares Amount
July 1, 2021 538,955 $ 538,955 $ 10,147,230 $ (3,880,253) $ (3,389) $ 6,802,543 $ 548,867 $ 7,351,410 $ 85,367
Net income (loss) — — — 54,711 — 54,711 7,172 61,883 23
Other comprehensive income (loss) — — — — 108 108 — 108 —
Issuance of common stock, net 20 20 358 — — 378 — 378 —
Repurchase of common stock (2) (2) (71) — — (73) — (73) —
Exercise of stock options 93 93 3,073 — — 3,166 — 3,166 —
Amortization of stock-based compensation — — 5,666 — — 5,666 — 5,666 —
Common dividends ($0.30 per share) — — — (161,995) — (161,995) — (161,995) —
Distributions to noncontrolling interests — — — — — — (7,602) (7,602) (43)
Contributions from noncontrolling interests — — — — — — — — 100
Adjustments to redemption value of redeemable noncontrolling interests — — (34,144) — — (34,144) — (34,144) 34,144
September 30, 2021 539,066 $ 539,066 $ 10,122,112 $ (3,987,537) $ (3,281) $ 6,670,360 $ 548,437 $ 7,218,797 $ 119,591


	Common Stock			Additional Paid-In Capital		Cumulative Dividends In Excess Of Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Total Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
	Shares	Amount


July 1, 2022	539,580	$	539,580	$	10,073,712	$	(4,306,762)	$	(1,318)	$	6,305,212	$	535,176	$	6,840,388	$	115,877
Net income (loss)	—	—		—		353,970		—		353,970		4,003		357,973		13
Other comprehensive income (loss)	—	—		—		—		30,844		30,844		—		30,844		—
Issuance of common stock, net	16	16		359		—		—		375		—		375		—

Repurchase of common stock	(2,062)	(2,062)		(53,966)		—		—		(56,028)		—		(56,028)		—

Stock-based compensation	—	—		6,030		—		—		6,030		—		6,030		—
Common dividends ($0.30 per share)	—	—		—		(162,014)		—		(162,014)		—		(162,014)		—
Distributions to noncontrolling interests	—	—		—		—		—		—		(7,374)		(7,374)		(42)



Contributions from noncontrolling interests	—	—		—		—		—		—		—		—		307

Adjustments to redemption value of redeemable noncontrolling interests	—	—		(11,428)		—		—		(11,428)		—		(11,428)		11,428
September 30, 2022	537,534	$	537,534	$	10,014,707	$	(4,114,806)	$	29,526	$	6,466,961	$	531,805	$	6,998,766	$	127,583

Table of Contents

For the nine months ended September 30, 2023:


	Common Stock			Additional Paid-In Capital		Cumulative Dividends In Excess Of Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Total Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
	Shares	Amount


January 1, 2023	546,642	$	546,642	$	10,349,614	$	(4,269,689)	$	28,134	$	6,654,701	$	527,897	$	7,182,598	$	105,679
Net income (loss)	—	—		—		235,065		—		235,065		23,824		258,889		473
Other comprehensive income (loss)	—	—		—		—		8,613		8,613		—		8,613		—
Issuance of common stock, net	662	662		23		—		—		685		—		685		—
Conversion of DownREIT units to common stock	7	7		216		—		—		223		(223)		—		—
Repurchase of common stock	(239)	(239)		(6,249)		—		—		(6,488)		—		(6,488)		—

Stock-based compensation	—	—		1,161		—		—		1,161		13,152		14,313		—
Common dividends ($0.90 per share)	—	—		—		(493,884)		—		(493,884)		—		(493,884)		—

Distributions to noncontrolling interests	—	—		—		—		—		—		(38,316)		(38,316)		(199)

Contributions from noncontrolling interests	—	—		—		—		—		—		173		173		292
Adjustments to redemption value of redeemable noncontrolling interests	—	—		57,229		—		—		57,229		—		57,229		(57,229)



September 30, 2023	547,072	$	547,072	$	10,401,994	$	(4,528,508)	$	36,747	$	6,457,305	$	526,507	$	6,983,812	$	49,016

For the nine months ended September 30, 2022:
Common Stock Additional Paid-In Capital Cumulative Dividends In Excess Of Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Total Noncontrolling Interests Total
Equity Redeemable Noncontrolling Interests
Shares Amount
January 1, 2022 539,097 $ 539,097 $ 10,100,294 $ (4,120,774) $ (3,147) $ 6,515,470 $ 543,290 $ 7,058,760 $ 87,344
Net income (loss) — — — 493,921 — 493,921 11,663 505,584 38
Other comprehensive income (loss) — — — — 32,673 32,673 — 32,673 —
Issuance of common stock, net 847 847 184 — — 1,031 — 1,031 —
Repurchase of common stock (2,410) (2,410) (65,232) — — (67,642) — (67,642) —
Amortization of stock-based compensation — — 18,895 — — 18,895 — 18,895 —
Common dividends ($0.90 per share) — — — (487,953) — (487,953) — (487,953) —
Distributions to noncontrolling interests — — — — — — (23,148) (23,148) (127)
Contributions from noncontrolling interests — — — — — — — — 894
Adjustments to redemption value of redeemable noncontrolling interests — — (39,434) — — (39,434) — (39,434) 39,434
September 30, 2022 537,534 $ 537,534 $ 10,014,707 $ (4,114,806) $ 29,526 $ 6,466,961 $ 531,805 $ 6,998,766 $ 127,583

~~For the nine months ended September 30, 2021:~~
Common Stock Additional Paid-In Capital Cumulative Dividends In Excess Of Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Total Noncontrolling Interests Total
Equity Redeemable Noncontrolling Interests
Shares Amount
January 1, 2021 538,405 $ 538,405 $ 10,175,235 $ (3,976,232) $ (3,685) $ 6,733,723 $ 556,227 $ 7,289,950 $ 57,396
Net income (loss) — — — 476,779 — 476,779 16,552 493,331 23
Other comprehensive income (loss) — — — — 404 404 — 404 —
Issuance of common stock, net 974 974 448 — — 1,422 — 1,422 —
Repurchase of common stock (410) (410) (12,143) — — (12,553) — (12,553) —
Exercise of stock options 97 97 3,194 — — 3,291 — 3,291 —
Amortization of stock-based compensation — — 17,224 — — 17,224 — 17,224 —
Common dividends ($0.90 per share) — — — (488,084) — (488,084) — (488,084) —
Distributions to noncontrolling interests — — — — — — (24,277) (24,277) (95)
Purchase of noncontrolling interests — — (5) — — (5) (65) (70) —
Contributions from noncontrolling interests — — — — — — — — 426
Adjustments to redemption value of redeemable noncontrolling interests — — (61,841) — — (61,841) — (61,841) 61,841
September 30, 2021 539,066 $ 539,066 $ 10,122,112 $ (3,987,537) $ (3,281) $ 6,670,360 $ 548,437 $ 7,218,797 $ 119,591
~~_______________________________________~~


	Common Stock			Additional Paid-In Capital		Cumulative Dividends In Excess Of Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Total Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
	Shares	Amount


January 1, 2022	539,097	$	539,097	$	10,100,294	$	(4,120,774)	$	(3,147)	$	6,515,470	$	543,290	$	7,058,760	$	87,344
Net income (loss)	—	—		—		493,921		—		493,921		11,663		505,584		38
Other comprehensive income (loss)	—	—		—		—		32,673		32,673		—		32,673		—
Issuance of common stock, net	847	847		184		—		—		1,031		—		1,031		—

Repurchase of common stock	(2,410)	(2,410)		(65,232)		—		—		(67,642)		—		(67,642)		—

Stock-based compensation	—	—		18,895		—		—		18,895		—		18,895		—
Common dividends ($0.90 per share)	—	—		—		(487,953)		—		(487,953)		—		(487,953)		—

Distributions to noncontrolling interests	—	—		—		—		—		—		(23,148)		(23,148)		(127)


Contributions from noncontrolling interests	—	—		—		—		—		—		—		—		894

Adjustments to redemption value of redeemable noncontrolling interests	—	—		(39,434)		—		—		(39,434)		—		(39,434)		39,434


September 30, 2022	537,534	$	537,534	$	10,014,707	$	(4,114,806)	$	29,526	$	6,466,961	$	531,805	$	6,998,766	$	127,583

See accompanying Notes to the Unaudited Consolidated Financial Statements.

Table of Contents

Healthpeak Properties, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	505,622	$	493,354	Net income (loss)	$	259,362	$	505,622
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:					Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of real estate, in-place lease, and other intangibles	Depreciation and amortization of real estate, in-place lease, and other intangibles	531,412		506,172		Depreciation and amortization of real estate, in-place lease, and other intangibles	561,357		531,412
Stock-based compensation amortization expense	Stock-based compensation amortization expense	14,635		13,895		Stock-based compensation amortization expense	10,966		14,635
Amortization of deferred financing costs	Amortization of deferred financing costs	8,069		6,677		Amortization of deferred financing costs	8,828		8,069
Straight-line rents	Straight-line rents	(36,837)		(23,627)		Straight-line rents	(12,710)		(36,837)

Amortization of nonrefundable entrance fees and above/below market lease intangibles		(75,635)		(68,854)
Amortization of nonrefundable entrance fees and above (below) market lease intangibles						Amortization of nonrefundable entrance fees and above (below) market lease intangibles	(81,359)		(75,635)
Equity loss (income) from unconsolidated joint ventures	Equity loss (income) from unconsolidated joint ventures	(2,205)		(9,508)		Equity loss (income) from unconsolidated joint ventures	(6,646)		(2,205)
Distributions of earnings from unconsolidated joint ventures	Distributions of earnings from unconsolidated joint ventures	708		4,731		Distributions of earnings from unconsolidated joint ventures	633		708

Loss (gain) on sale of real estate under direct financing leases	Loss (gain) on sale of real estate under direct financing leases	(22,693)		—		Loss (gain) on sale of real estate under direct financing leases	—		(22,693)
Deferred income tax expense (benefit)	Deferred income tax expense (benefit)	(5,199)		(3,999)		Deferred income tax expense (benefit)	(1,243)		(5,199)
Impairments and loan loss reserves (recoveries), net	Impairments and loan loss reserves (recoveries), net	3,678		37,194		Impairments and loan loss reserves (recoveries), net	(156)		3,678
Loss (gain) on debt extinguishments		—		225,824

Loss (gain) on sales of real estate, net	Loss (gain) on sales of real estate, net	(11,408)		(598,531)		Loss (gain) on sales of real estate, net	(86,463)		(11,408)
Loss (gain) upon change of control, net	Loss (gain) upon change of control, net	(311,438)		(1,042)		Loss (gain) upon change of control, net	(234)		(311,438)
Casualty-related loss (recoveries), net	Casualty-related loss (recoveries), net	6,457		1,632		Casualty-related loss (recoveries), net	(759)		6,457

Other non-cash items	Other non-cash items	(1,029)		(8,640)		Other non-cash items	4,119		(1,029)
Changes in:	Changes in:					Changes in:
Decrease (increase) in accounts receivable and other assets, net	Decrease (increase) in accounts receivable and other assets, net	(2,751)		27,576		Decrease (increase) in accounts receivable and other assets, net	(9,041)		(2,751)
Increase (decrease) in accounts payable, accrued liabilities, and deferred revenue	Increase (decrease) in accounts payable, accrued liabilities, and deferred revenue	91,920		(31,519)		Increase (decrease) in accounts payable, accrued liabilities, and deferred revenue	78,340		91,920
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	693,306		571,335		Net cash provided by (used in) operating activities	724,994		693,306
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Acquisitions of real estate	Acquisitions of real estate	(159,199)		(978,473)		Acquisitions of real estate	(15,735)		(159,199)
Development, redevelopment, and other major improvements of real estate	Development, redevelopment, and other major improvements of real estate	(616,803)		(430,510)		Development, redevelopment, and other major improvements of real estate	(582,494)		(616,803)
Leasing costs, tenant improvements, and recurring capital expenditures	Leasing costs, tenant improvements, and recurring capital expenditures	(75,103)		(72,112)		Leasing costs, tenant improvements, and recurring capital expenditures	(66,264)		(75,103)
Proceeds from sales of real estate, net	Proceeds from sales of real estate, net	47,797		2,383,017		Proceeds from sales of real estate, net	141,743		47,797
Proceeds from the South San Francisco JVs transaction, net	Proceeds from the South San Francisco JVs transaction, net	125,985		—		Proceeds from the South San Francisco JVs transaction, net	—		125,985

Contributions to unconsolidated joint ventures		(9,259)		(12,828)
Investments in unconsolidated joint ventures						Investments in unconsolidated joint ventures	(48,486)		(9,259)
Distributions in excess of earnings from unconsolidated joint ventures	Distributions in excess of earnings from unconsolidated joint ventures	8,746		37,139		Distributions in excess of earnings from unconsolidated joint ventures	14,980		8,746
Proceeds from insurance recovery						Proceeds from insurance recovery	20,929		—

Proceeds from sales/principal repayments on loans receivable and direct financing leases		105,040		291,223
Proceeds from sales/principal repayments on loans receivable, direct financing leases, and marketable debt securities						Proceeds from sales/principal repayments on loans receivable, direct financing leases, and marketable debt securities	184,299		105,040
Investments in loans receivable and other	Investments in loans receivable and other	(5,317)		(13,781)		Investments in loans receivable and other	(10,058)		(5,317)

Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(578,113)		1,203,675		Net cash provided by (used in) investing activities	(361,086)		(578,113)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Borrowings under bank line of credit and commercial paper	Borrowings under bank line of credit and commercial paper	12,220,955		12,931,450		Borrowings under bank line of credit and commercial paper	7,799,005		12,220,955
Repayments under bank line of credit and commercial paper	Repayments under bank line of credit and commercial paper	(11,801,597)		(12,037,040)		Repayments under bank line of credit and commercial paper	(8,370,611)		(11,801,597)
Issuance and borrowings of debt, excluding bank line of credit and commercial paper		—		591,546
Repayments and repurchase of debt, excluding bank line of credit and commercial paper		(3,759)		(2,421,598)
Issuances and borrowings of term loans, senior unsecured notes, and mortgage debt						Issuances and borrowings of term loans, senior unsecured notes, and mortgage debt	743,778		—
Repayments and repurchases of term loans, senior unsecured notes, and mortgage debt						Repayments and repurchases of term loans, senior unsecured notes, and mortgage debt	(3,928)		(3,759)

Payments for debt extinguishment and deferred financing costs		(4,171)		(232,306)
Payments for deferred financing costs						Payments for deferred financing costs	(7,322)		(4,171)

Issuance of common stock and exercise of options, net of offering costs	Issuance of common stock and exercise of options, net of offering costs	38		4,713		Issuance of common stock and exercise of options, net of offering costs	(262)		38
Repurchase of common stock	Repurchase of common stock	(67,642)		(12,553)		Repurchase of common stock	(6,488)		(67,642)
Dividends paid on common stock	Dividends paid on common stock	(486,960)		(488,084)		Dividends paid on common stock	(492,937)		(486,960)

Distributions to and purchase of noncontrolling interests	Distributions to and purchase of noncontrolling interests	(23,275)		(24,443)		Distributions to and purchase of noncontrolling interests	(38,515)		(23,275)
Contributions from and issuance of noncontrolling interests	Contributions from and issuance of noncontrolling interests	894		426		Contributions from and issuance of noncontrolling interests	465		894
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(165,517)		(1,687,889)		Net cash provided by (used in) financing activities	(376,815)		(165,517)

Net increase (decrease) in cash, cash equivalents and restricted cash		(50,324)		87,121
Cash, cash equivalents and restricted cash, beginning of period		219,448		181,685
Cash, cash equivalents and restricted cash, end of period		$	169,124	$	268,806
Net increase (decrease) in cash, cash equivalents, and restricted cash						Net increase (decrease) in cash, cash equivalents, and restricted cash	(12,907)		(50,324)
Cash, cash equivalents, and restricted cash, beginning of period						Cash, cash equivalents, and restricted cash, beginning of period	126,834		219,448
Cash, cash equivalents, and restricted cash, end of period						Cash, cash equivalents, and restricted cash, end of period	$	113,927	$	169,124

See accompanying Notes to the Unaudited Consolidated Financial Statements.

Table of Contents

Healthpeak Properties, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. Business

Overview

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

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

On February 10, 2023, the Company completed its corporate reorganization (the “Reorganization”) into an umbrella partnership REIT (“UPREIT”). Substantially all of the Company’s business is conducted through Healthpeak OP, LLC (“Healthpeak OP”). The Company is the managing member of Healthpeak OP and does not have material assets or liabilities, other than through its investment in Healthpeak OP. For additional information on the UPREIT reorganization, see the Company’s Current Report on Form 8-K12B filed with the U.S. Securities and Exchange Commission (“SEC”) on February 10, 2023.

NOTE 2. Summary of Significant Accounting Policies

Basis of Presentation

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

The consolidated financial statements include the accounts of Healthpeak Properties, Inc., its wholly-owned subsidiaries, joint ventures (“JVs”), and variable interest entities (“VIEs”) that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. All adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations, and cash flows have been included. Operating results for the three and nine months ended September 30, ~~2022~~2023 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2022.~~2023. The accompanying unaudited interim financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 filed with the ~~U.S. Securities and Exchange Commission (“SEC”).~~SEC.

Government Grant Income

On March 27, 2020, the federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide financial aid to individuals, businesses, and state and local governments. During the nine months ended September 30, 2023 and the three and nine months ended September 30, 2022, ~~and 2021,~~ the Company received government grants under the CARES Act primarily to cover increased expenses and lost revenue during the coronavirus pandemic. Grant income is recognized to the extent that qualifying expenses and lost revenues exceed grants received and the Company will comply with all conditions attached to the grant. As of September 30, ~~2022,~~2023, the amount of qualifying expenditures and lost revenue exceeded grant income recognized and the Company believes it has complied and will continue to comply with all grant conditions. In the event of non-compliance, all such amounts received are subject to recapture.

Table of Contents

The following table summarizes information related to government grant income received and recognized by the Company (in thousands):
Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Government grant income recorded in other income (expense), net $ 4 $ 15 $ 6,765 $ 1,412
Government grant income recorded in equity income (loss) from unconsolidated joint ventures 183 — 831 1,010
Government grant income recorded in income (loss) from discontinued operations 10 — 216 3,660
Total government grants received $ 197 $ 15 $ 7,812 $ 6,082

~~Table of Contents~~


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Government grant income recorded in other income (expense), net	$	—	$	4	$	184	$	6,765
Government grant income recorded in equity income (loss) from unconsolidated joint ventures	—		183		229		831
Government grant income recorded in income (loss) from discontinued operations	—		10		—		216
Total government grants received	$	—	$	197	$	413	$	7,812

Discontinued Operations

Senior Housing Triple-Net and Senior Housing Operating Portfolio Dispositions

~~During~~In 2020, the Company ~~established and began executing a plan to dispose~~concluded that the dispositions of its senior housing triple-net and Senior Housing Operating Property (“SHOP”) ~~properties and concluded that the planned dispositions~~portfolios represented a strategic shift that had ~~and will have~~ a major effect on ~~the Company’s~~its operations and financial results. Therefore, the results of senior housing triple-net and SHOP assets ~~meeting the held for sale criteria~~ are classified as discontinued operations in all periods presented herein. ~~In September 2021, the Company successfully completed the disposition of the remaining senior housing triple-net and SHOP properties.~~ See Note 4 for further information.

Recent Accounting Pronouncements

~~Adopted~~

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

~~Not Yet Adopted~~

Reference Rate Reform. InFrom March 2020 to December 2022, the FASB issued ~~ASU No. 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation~~a series of ~~the Effects of Reference Rate Reform on Financial Reporting~~ ~~(“ASU 2020-04”), which provides~~ASUs that provide optional ~~guidance for a limited period of time~~expedients that may be elected through December 31, 2024 to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. ~~In January 2021, the FASB issued ASU No. 2021-01,~~ ~~Reference Rate Reform (Topic 848): Scope~~ (“ASU 2021-01”), which amends the scope of ASU 2020-04 to include derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The amendments in ~~ASU 2020-04 and ASU 2021-01~~these ASUs were effective immediately upon issuance. During the first quarter of 2023, the Company amended certain of its variable rate mortgage debt and ~~may be applied through December 31, 2022. During 2022,~~the related interest rate swap agreements to change the interest rate benchmark from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”) and accordingly, the Company elected to apply certain ~~hedge accounting~~practical expedients provided by ~~ASU 2020-04 and ASU 2021-01, which preserves the hedging relationship of derivatives. The~~these ASUs related to cash flow hedges. These expedients ~~provided by ASU 2020-04 and ASU 2021-01~~ and the effects of reference rate reform have not had ~~and are not expected to have,~~ a material impact on the Company’s consolidated financial position, results of operations, cash flows, or disclosures.

NOTE 3. Real Estate

2023 Real Estate Investment Acquisitions

60 Loomis Land Parcel

In January 2023, the Company acquired a lab land parcel in Cambridge, Massachusetts for $9 million.

Wylie Outpatient Medical Building

In April 2023, the Company acquired the remaining 80% interest in one of the outpatient medical buildings in the Ventures IV unconsolidated joint venture for $4 million (see Note 7). Concurrent with the acquisition, the Company began consolidating the building and recognized a gain upon change of control of $0.2 million, which is recorded in other income (expense), net.

2022 Real Estate Investment Acquisitions

67 Smith Place

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

Vista Sorrento Phase II

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

Table of Contents

Webster ~~MOB~~Outpatient Medical Portfolio

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

Northwest Medical Plaza

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

~~2021 Real Estate Investment Acquisitions~~Concord Avenue Land Parcels

In ~~2021,~~December 2022, the Company closed ~~the following life science acquisitions: (i) eight acquisitions~~a lab acquisition in Cambridge, Massachusetts for ~~$498 million, (ii) one acquisition in San Diego, California for $20 million, and (iii) 12 acres of land for $128 million in South San Francisco, California.~~

~~Table of Contents~~

Also during 2021, the Company closed the following MOB acquisitions: (i) one MOB in Nashville, Tennessee for $13 million, (ii) one MOB in Denver, Colorado for $38 million, (iii) a portfolio of 14 MOBs for $371 million (the “MOB Portfolio”), (iv) one MOB in Fort Lauderdale, Florida for $16 million; (v) one MOB in Wichita, Kansas for $50 million, (vi) three MOBs in Morristown, New Jersey for $155 million, (vii) two MOBs in Dallas, Texas for $60 million, (viii) one MOB in Seattle, Washington for $43 million, (ix) one MOB in New Orleans, Louisiana for $34 million, and (x) one MOB in Cambridge, Massachusetts for $55$18 million. ~~In conjunction with the acquisition of the MOB Portfolio, the Company originated $142 million of secured mortgage debt.~~

Development Activities

The Company’s commitments, which are primarily related to development and redevelopment projects and Company-owned tenant improvements,decreased by ~~$49~~$128 million to ~~$421~~$124 million at September 30, ~~2022,~~2023, when compared to December 31, ~~2021,~~2022, primarily as a result of construction spend on and completion of existing projects in the first three quarters of ~~2022~~2023, thereby decreasing the remaining commitment.

NOTE 4. Dispositions of Real Estate and Discontinued Operations

~~2022~~2023 Dispositions of Real Estate

In January 2023, the Company sold two lab buildings in Durham, North Carolina, which were classified as held for sale as of December 31, 2022, for $113 million, resulting in total gain on sales of $60 million. Additionally, in March 2023, the Company sold two outpatient medical buildings for $32 million, resulting in total gain on sales of $21 million.

2022 Dispositions of Real Estate

During the three months ended March 31, 2022, the Company sold one ~~life science facility~~lab building in Salt Lake City, Utah for $14 million, resulting in a gain on sale of $4 million.

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

~~In July~~During the three months ended September 30, 2022, the Company sold two ~~MOBs~~outpatient medical buildings for $9 million, resulting in total gain on sales of $1 million.

~~2021 Dispositions of Real Estate~~

~~Sunrise Senior Housing Portfolio~~

In January 2021, the Company sold a portfolio of 32 SHOP assets (the “Sunrise Senior Housing Portfolio”) for $664 million, resulting in an immaterial loss on sale, which is recognized in income (loss) from discontinued operations, and provided the buyer with: (i) financing of $410 million (see Note 6) and (ii) a commitment to finance up to $92 million of additional debt for capital expenditures. The commitment to finance additional debt for capital expenditures was subsequently reduced to $56 million in June 2021, $47 million in February 2022, and $40 million in July 2022 ~~(see Note 6). As of September 30, 2022, $0.4 millionof the additional financing has been funded~~. Upon completion of the license transfer process in June 2021, the Company sold the two remaining Sunrise senior housing triple-net assets for $80 million, resulting in a gain on sale of $22 million, which is recognized in income (loss) from discontinued operations.

~~Brookdale Triple-Net Portfolio~~

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

~~Additional SHOP Portfolio~~

In January 2021, the Company sold a portfolio of 16 SHOP assets for $230 million, resulting in total gain on sale of $59 million, which is recognized in income (loss) from discontinued operations. The Company provided the buyer with financing of ~~$150 million (see Note~~ 6).

~~HRA Triple-Net Portfolio~~

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

~~Oakmont SHOP Portfolio~~

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

~~Table of Contents~~

~~Discovery SHOP Portfolio~~

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

~~Sonata SHOP Portfolio~~

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

~~SLC SHOP Portfolio~~

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

~~Hoag Hospital~~

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

~~2021 Other Dispositions~~

T~~he Company sold the following~~ ~~during the three months ended~~ ~~September 30, 2021:~~ (i) eight SHOP assets for $120 million, (ii) four senior housing triple-net assets for $12 million, and (iii) three MOBs for $36 million, resulting in total gain on sales of $42 million ($27 million of which is recognized in income (loss) from discontinued operations). In conjunction with one of the SHOP asset sales, mortgage debt held on the property with a carrying value of $36 million was assumed by the buyer.

In addition to the portfolio and individual sales discussed above, the Company sold the following during the nine months ended September 30, 2021: (i) 15 SHOP assets for $169 million, (ii) 7 senior housing triple-net assets for $24 million, and (iii) 7 MOBs for $57 million, resulting in total gain on sales of $52 million ($34 million of which is recognized in income (loss) from discontinued operations).

~~During the fourth quarter of 2021, the Company sold three MOBs and a portion of one MOB land parcel for $11 million, resulting in total gain on sales of $1 million.~~

Held for Sale and Discontinued Operations

~~During~~As of September 30, 2023, one outpatient medical building was classified as held for sale, with a carrying value of $8 million, primarily comprised of net real estate assets. As of September 30, 2023, liabilities related to the asset held for sale were de minimis. As of December 31, 2022, two lab buildings were classified as held for sale, with an aggregate carrying value of $50 million, primarily comprised of net real estate assets of $44 million. As of December 31, 2022, liabilities related to these assets held for sale were $4 million. These two lab buildings were sold in January 2023, as discussed above.

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

At each of September ~~2021,~~30, 2023 and December 31, 2022, the ~~Company successfully completed the disposition of the remaining senior housing triple-net~~total assets and ~~SHOP properties.~~

~~Table of Contents~~

~~The following summarizes the assets and~~total liabilities classified as ~~held for sale or as~~ discontinued operations at September 30, 2022 and December 31, 2021, which are included in assets held for sale and discontinued operations, net and liabilities related to assets held for sale and discontinued operations, net, respectively, on the Consolidated Balance Sheets (in thousands):

September 30,
2022 December 31,
2021
ASSETS
Accounts receivable, net of allowance of $260 and $4,138 $ 367 $ 2,446
Cash and cash equivalents 2,172 7,707
Right-of-use asset, net — 26
Other assets, net 285 3,237
Total assets of discontinued operations, net 2,824 13,416
Assets held for sale, net(1)
48,671 23,774
Assets held for sale and discontinued operations, net $ 51,495 $ 37,190
LIABILITIES
Lease liability $ — $ 26
Accounts payable, accrued liabilities, and other liabilities 8,668 14,843
Deferred revenue — 92
Total liabilities of discontinued operations, net 8,668 14,961
Liabilities related to assets held for sale, net(1)
4,163 95
Liabilities related to assets held for sale and discontinued operations, net $ 12,831 $ 15,056

~~(1)As of September 30, 2022, includedtwo life science assets primarily comprised of net real estate assets of $43 million. As ofDecember 31, 2021, included four MOBs and one life science facility primarily comprised of net real estate assets of $23 million.~~were zero.

1311

Table of Contents

The results of discontinued operations during the three and nine months ended September 30, ~~2022~~2023 and ~~2021, or through the disposal date of each asset or portfolio of assets held within discontinued operations if sold during such periods, as applicable,~~2022 are presented below (in thousands) and are included in the consolidated results of operations for the three and nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenues:	Revenues:									Revenues:
Rental and related revenues		$	—	$	694	$	—	$	7,535

Resident fees and services	Resident fees and services	1,284		8,507		6,765		111,777		Resident fees and services	$	—	$	1,284	$	—	$	6,765

Total revenues	Total revenues	1,284		9,201		6,765		119,312		Total revenues	—		1,284		—		6,765
Costs and expenses:	Costs and expenses:									Costs and expenses:
Interest expense		—		47		—		3,900

Operating	Operating	1,334		13,010		6,451		118,175		Operating	—		1,334		—		6,451
Transaction costs		—		—		—		76
Impairments and loan loss reserves (recoveries), net		—		21,740		—		32,736

Total costs and expenses	Total costs and expenses	1,334		34,797		6,451		154,887		Total costs and expenses	—		1,334		—		6,451
Other income (expense):	Other income (expense):									Other income (expense):
Gain (loss) on sales of real estate, net	Gain (loss) on sales of real estate, net	(1,131)		26,758		1,361		408,658		Gain (loss) on sales of real estate, net	—		(1,131)		—		1,361
Other income (expense), net	Other income (expense), net	(7)		(863)		12		5,150		Other income (expense), net	—		(7)		—		12
Total other income (expense), net	Total other income (expense), net	(1,138)		25,895		1,373		413,808		Total other income (expense), net	—		(1,138)		—		1,373
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	(1,188)		299		1,687		378,233		Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	—		(1,188)		—		1,687
Income tax benefit (expense)	Income tax benefit (expense)	(110)		221		260		1,345		Income tax benefit (expense)	—		(110)		—		260
Equity income (loss) from unconsolidated joint ventures	Equity income (loss) from unconsolidated joint ventures	—		81		64		4,991		Equity income (loss) from unconsolidated joint ventures	—		—		—		64

Income (loss) from discontinued operations	Income (loss) from discontinued operations	$	(1,298)	$	601	$	2,011	$	384,569	Income (loss) from discontinued operations	$	—	$	(1,298)	$	—	$	2,011

Impairments of Real Estate

~~2022~~

During the three and nine months ended September 30, 2023 and 2022, the Company did not recognize any impairment charges.

~~2021~~

During the three and nine months ended September 30, 2021, the Company recognized an aggregate impairment charge of $2 million, which is reported in impairments and loan loss reserves (recoveries), net, related to two MOBs classified as held for sale. The Company wrote down the two properties’ aggregate carrying value of $13 million to their aggregate fair value, less estimated costs to sell, of $11 million.

Additionally, during the nine months ended September 30, 2021, the Company recognized an impairment charge of $4 million related to one SHOP asset classified as held for sale, which is reported in income (loss) from discontinued operations. Following a reduction in the expected sales price of the asset occurring in the second quarter of 2021, the Company wrote down its carrying value of $20 million to its fair value, less estimated costs to sell, of $16 million.

The fair values of the impaired assets were based on the forecasted sales prices, which are considered to be a Level 3 measurement within the fair value hierarchy. The Company’s forecasted sales prices are typically determined using an income approach and/or a market approach (comparable sales model), which rely on certain assumptions by management, including: (i) market capitalization rates, (ii) comparable market transactions, (iii) estimated prices per unit, (iv) negotiations with prospective buyers, and (v) forecasted cash flow streams (lease revenue rates, expense rates, growth rates, etc.). There are inherent uncertainties in making these assumptions. For the Company’s impairment calculations during the three and nine months ended September 30, 2021, the Company’s fair value estimates primarily relied on a market approach and utilized comparable market transactions and negotiations with prospective buyers.

~~Table of Contents~~

~~Goodwill Impairment~~

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

Following the disposition of the Company’s remaining senior housing triple-net and SHOP assets in September 2021, the Company performed an impairment assessment to evaluate the fair value of its reporting units as of September 30, 2021. During the three months ended September 30, 2021, the Company recognized a $22 milliongoodwill impairment charge reported in income (loss) from discontinued operations to reduce the associated goodwill balance to zero as no assets remained in the reporting units associated with the senior housing triple-net and SHOP portfolios as of the assessment date.Other Losses

During the nine months ended September 30, 2021, the Company recognized a $29 million goodwill impairment charge reported in income (loss) from discontinued operations, $7 million of which was recognized during the second quarter of 2021, as the fair value of the remaining senior housing triple-net assets (based on forecasted sales prices) was less than the carrying value of the assets, including the related goodwill as of the assessment date.

During the three and nine months ended September 30, 2021, the fair value of the assets within each of the Company’s other reporting units was greater than the respective carrying value of the assets and related goodwill, and as a result, no impairment loss was recognized with respect to the other reporting units.

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

~~Other Losses~~

~~During the first quarter of~~ 2022, the Company recognized $14 million of expenses within other income (expense), net on the Consolidated Statements of Operations for tenant relocation and other costs associated with the demolition of an ~~MOB.These expenses are included in other income (expense), net on the Consolidated Statements of Operations for the nine months ended September 30, 2022.~~outpatient medical building.

NOTE 5. Leases

Lease Income

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


		Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021

											Three Months Ended September 30,				Nine Months Ended September 30,
											2023		2022		2023		2022
Fixed income from operating leases	Fixed income from operating leases	$	298,680	$	276,430	$	882,700	$	807,677	Fixed income from operating leases	$	317,106	$	298,680	$	923,285	$	882,700
Variable income from operating leases	Variable income from operating leases	93,621		77,086		266,830		214,453		Variable income from operating leases	99,969		93,621		296,188		266,830
Interest income from direct financing leases	Interest income from direct financing leases	—		2,179		1,168		6,522		Interest income from direct financing leases	—		—		—		1,168

Direct Financing Leases

2022 Direct Financing Lease Sale

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

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


	September 30, 2022		Therefore, at September 30, 2023 and December 31, ~~2021~~
~~Present value of minimum lease payments receivable~~	$	—	$	~~1,220~~
~~Present value of estimated residual value~~	—		~~44,706~~
~~Less deferred selling profits~~	—		~~(1,220)~~


~~Net investment in direct financing leases~~	$	—	$	~~44,706~~

~~Direct Financing Lease Internal Ratings~~

~~At September 30,~~ 2022, the Company had no ~~properties~~leases classified as a DFL. ~~At December 31, 2021, the Company had one hospital classified as a DFL with a carrying amount of $45 million and an internal rating of “performing”.~~

1512

Table of Contents

Straight-Line Rents

For operating leases with minimum scheduled rent increases, the Company recognizes income on a straight-line basis over the lease term when collectibility of future minimum lease payments is probable. If the Company determines that collectibility of future minimum lease payments is not probable, the straight-line rent receivable balance is written off and recognized as a decrease in revenue in that period and future revenue recognition is limited to amounts contractually owed and paid. The Company does not resume recognition of income on a straight-line basis unless it determines that collectibility of future payments related to these leases is probable. For the Company’s portfolio of operating leases that are deemed probable of collection but exhibit a certain level of collectibility risk, the Company may also recognize an incremental allowance as a reduction to revenue.

Tenant Updates

During the first quarter of 2023, the Company wrote off $9 million of straight-line rent receivable associated with four in-place operating leases with Sorrento Therapeutics, Inc. (“Sorrento”), which commenced voluntary reorganization proceedings (the “Filing”) under Chapter 11 of the U.S. Bankruptcy Code during the period. This write-off was recognized as a reduction in rental and related revenues on the Consolidated Statements of Operations. Subsequent to the write-off, revenue related to this tenant is recognized on a cash basis. Sorrento also had a single development lease with the Company, but had not taken occupancy at the time of the Filing. During the second quarter of 2023, the U.S. Bankruptcy Court approved Sorrento’s rejection of the development lease, resulting in termination of the lease. The Company filed a proof of claim for related damages, $2 million of which was received by the Company by drawing on Sorrento’s letter of credit during the three months ended June 30, 2023. These cash proceeds of $2 million were recognized as lease termination fee income, which is included in rental and related revenues on the Consolidated Statements of Operations for the nine months ended September 30, 2023. Given the nature of bankruptcy proceedings, the probability, timing, or amount of the additional proceeds, if any, that the Company may ultimately receive in connection with the claim is uncertain. Accordingly, the Company has not recorded any estimated recoveries associated with this claim as of September 30, 2023.

In October 2023, the Company amended its lease with Graphite Bio, Inc. (“Graphite Bio”) at one of its lab buildings in South San Francisco, California. Under the terms of the amended lease agreement, Graphite Bio’s lease expiration date was accelerated from April 2033 to December 2024 in exchange for an upfront cash payment of $37 million. This cash payment is inclusive of termination and related fees and the prepayment of Graphite Bio's contractual rent through the amended term. The $37 million will be recognized as rental and related revenues on the Consolidated Statements of Operations on a straight-line basis through the amended term of the lease.

NOTE 6. Loans Receivable

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


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Secured loans(1)	Secured loans(1)	$	360,092	$	396,281	Secured loans(1)	$	192,187	$	350,837
Mezzanine and other		30,579		25,529
Unamortized discounts, fees, and costs		(1,565)		(4,186)
CCRC resident loans						CCRC resident loans	42,215		33,083
Unamortized discounts and fees						Unamortized discounts and fees	(498)		(808)
Reserve for loan losses	Reserve for loan losses	(5,115)		(1,813)		Reserve for loan losses	(8,023)		(8,280)
Loans receivable, net	Loans receivable, net	$	383,991	$	415,811	Loans receivable, net	$	225,881	$	374,832

_______________________________________

(1)At September 30, 2023 and December 31, 2022, the Company had $4136 million ~~remaining of commitments to fund additional loans for senior housing redevelopment~~ and ~~capital expenditure projects. At December 31, 2021, the Company had $58~~$40 million, respectively, remaining of commitments to fund additional loans for senior housing redevelopment and capital expenditure projects.

~~SHOP~~Sunrise Senior Housing Portfolio Seller Financing

In conjunction with the sale of 32 SHOP facilities ~~in the Sunrise Senior Housing Portfolio~~ for $664 million in January 2021, ~~(see Note 4),~~ the Company provided the buyer with initial financing of $410 million. The remainder of the sales price was received in cash at the time of sale. Additionally, the Company agreed to provide up to $92 million of additional financing for capital expenditures (up to 65% of the estimated cost of capital expenditures). The ~~additional financing was subsequently reduced to $56 million in June 2021, $47 millionin February 2022, and $40 million in July 2022 in conjunction with the principal repayments discussed below.Through September 30, 2022, $0.4 million of the additional financing had been funded. The~~ initial and additional financing is secured by the ~~buyer's~~buyer’s equity ownership in each property. In June 2023, the interest rate on this secured loan was converted from a variable rate based on LIBOR to a variable rate based on Term SOFR (plus a 10 basis point adjustment related to SOFR transition).

Table of Contents

In June 2021,February 2022, July 2022, and December 2022, the Company received principal repayments of $246 million, on the initial financing provided in conjunction with the sale of the Sunrise Senior Housing Portfolio. In connection with the June 2021 principal repayment, the Company accelerated recognition of $7 million of the related mark-to-market discount, which is included in interest income in the Consolidated Statements of Operations. Additionally, in February 2022 and ~~July 2022, the Company received principal repayments of~~ $8 million, ~~and~~ $27 million, and $10 million, respectively, in conjunction with the disposition of the underlying collateral. AsIn connection with these principal repayments, the additional financing available was reduced to $40 million, of which $4 million had been funded as of September 30, 2023. At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, this secured loan had an outstanding principal balance of $~~130~~124 million and ~~$165~~$120 million, respectively.

Other Seller Financing

In conjunction with the sale of 16 additional SHOP facilities for $230 million in January 2021, ~~(see Note 4),~~ the Company provided the buyer with financing of $150 million. The remainder of the sales price was received in cash at the time of sale. The financing is secured by the ~~buyer's~~buyer’s equity ownership in each property.

~~During~~ Upon maturity in January 2023, the borrower did not make the required principal repayment. In February 2023, the borrower made a partial principal repayment of $102 million and the remaining balance owed was refinanced with the Company. In connection with the refinance, the maturity date of the loan was extended to January 2024 and the interest rate on the loan was increased to a variable rate based on Term SOFR (plus an 11 basis point adjustment related to SOFR transition) plus 6.0% for the first ~~quarter of 2021, the Company reduced the consideration and reported gain on sales of real estate and recognized a mark-to-market discount of~~$16 million for certain transactions with seller financing. The Company’s discount is based on the difference between the stated interest rates (ranging from 3.50% to 4.50%) and corresponding prevailing market rates of approximately 5.25% assix months of the ~~transaction dates.~~extended term, increasing to 7.0% for the last six months of the extended term. The ~~discount~~Company also received a $1 million extension fee in connection with the refinance, which is recognized asin interest income over the remaining term of the ~~discounted~~loan.

2023 Other Loans Receivable Transactions

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

In April 2023, the Company received full repayment of the outstanding balance of one $14 million secured loan.

In May 2023, the Company received full repayment of two outstanding secured loans ~~(ranging from~~ ~~one~~ ~~to three years) using~~with an aggregate balance of $12 million.

Also in May 2023, the ~~effective~~ interest rate ~~method. During the three and nine months ended September 30, 2022,~~on one secured loan with an outstanding balance of $21 million was converted from a variable rate based on LIBOR to a variable rate based on Term SOFR (plus a 10 basis point adjustment related to SOFR transition). In October 2023, the Company ~~recognized$1 million and$3 million, respectively, of non-cash interest income related to the amortization of its mark-to-market discounts. During the three and nine months ended September 30, 2021, the Company recognized$1 million~~and $12 million, respectively, of non-cash interest income related to the amortization of its mark-to-market discounts, of which $7 million was recognized during the nine months ended September 30, 2021 as a resultreceived full repayment of the ~~accelerated recognition discussed above related to the Sunrise Senior Housing Portfolio.~~outstanding balance of this $21 million secured loan.

2022 Other Loans Receivable Transactions

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

~~Table of Contents~~

~~2021 Other Loans Receivable Transactions~~

The Company classifies a loan receivable as held for sale when management no longer has the intent or ability to hold the loan receivable for the foreseeable future or until maturity. If a loan receivable is classified as held for sale, previously recorded reserves for loan losses are reversed and the loan is reported at the lower of amortized cost or fair value. During the second quarter of 2021, two loans receivable with a total amortized cost of $64 million were classified as held for sale. Upon the transfer of these two loans to held for sale, the carrying value was decreased by $11 million to an estimated fair value of $53 million, $8 million of which was previously recognized as a reserve for loan losses. As a result, a $3 million net loss was recognized in impairments and loan loss reserves (recoveries), net during the nine months ended September 30, 2021. In September 2021, the Company sold one of the loans receivable previously classified as held for sale for its carrying value of $2 million. In November ~~2021, the Company sold the other loan receivable previously classified as held for sale for its carrying value of $51 million.~~

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

~~Additionally, in April 2021, the Company sold two mezzanine loans as part of the Discovery SHOP Portfolio disposition (see Note 4),~~ ~~resulting in no gain or loss on sale of the mezzanine loans~~.

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

~~In July 2021,~~2022, the Company received full repayment of the outstanding balance of a $1 million mezzanine loan.

In December 2022, the Company extended the maturity dates of four secured loans with an $8aggregate outstanding balance of $61 million, originally scheduled to mature in December 2022, by one year to December 2023. In connection with the extensions, the interest rates on the loans were increased to a variable rate based on Term SOFR (plus an 11 basis point adjustment related to SOFR transition) with a floor of 8.5% for the first six months of the extended term, increasing to a floor of 10.5% for the last six months of the extended term. All four of these secured ~~loan.~~loans were repaid during 2023 as discussed above.

CCRC Resident Loans

For certain residents that qualify, CCRCs may offer to lend residents the necessary funds to satisfy the entrance fee requirements so that they are able to move into a community while still continuing the process of selling their previous home. The loans are due upon sale of the resident’s previous ~~residence.~~home. At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company held $2942 million and ~~$24~~$33 million, respectively, of such notes ~~receivable, which are included in mezzanine and other in the table above.~~receivable.

Loans Receivable Internal Ratings

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

1714

Table of Contents

The following table summarizes, by year of origination, the Company’s internal ratings for loans receivable, net of unamortized discounts, fees, and reserves for loan losses, as of September 30, ~~2022~~2023 (in thousands):


Investment Type	Investment Type	Year of Origination												Total		Investment Type	Year of Origination												Total
		2022		2021		2020		2019		2018		Prior					2023		2022		2021(1)		2020		2019		Prior
Secured loans	Secured loans															Secured loans
Risk rating:	Risk rating:															Risk rating:
Performing loans	Performing loans	$	—	$	275,634	$	77,794	$	—	$	—	$	—	$	353,428	Performing loans	$	—	$	—	$	167,736	$	15,930	$	—	$	—	$	183,666
Watch list loans	Watch list loans	—		—		—		—		—		—		—		Watch list loans	—		—		—		—		—		—		—
Workout loans	Workout loans	—		—		—		—		—		—		—		Workout loans	—		—		—		—		—		—		—
Total secured loans	Total secured loans	$	—	$	275,634	$	77,794	$	—	$	—	$	—	$	353,428	Total secured loans	$	—	$	—	$	167,736	$	15,930	$	—	$	—	$	183,666

Mezzanine and other
Current period gross write-offs																Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries																Current period recoveries	—		—		—		—		—		—		—
Current period net write-offs																Current period net write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—
CCRC resident loans																CCRC resident loans
Risk rating:	Risk rating:															Risk rating:
Performing loans	Performing loans	$	25,846	$	3,493	$	1,224	$	—	$	—	$	—	$	30,563	Performing loans	$	38,701	$	3,514	$	—	$	—	$	—	$	—	$	42,215
Watch list loans	Watch list loans	—		—		—		—		—		—		—		Watch list loans	—		—		—		—		—		—		—
Workout loans	Workout loans	—		—		—		—		—		—		—		Workout loans	—		—		—		—		—		—		—
Total mezzanine and other		$	25,846	$	3,493	$	1,224	$	—	$	—	$	—	$	30,563

Total CCRC resident loans																Total CCRC resident loans	$	38,701	$	3,514	$	—	$	—	$	—	$	—	$	42,215
Current period gross write-offs																Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries																Current period recoveries	—		—		—		—		—		—		—
Current period net write-offs																Current period net write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—

_______________________________________

(1)Additional financing funded on the Sunrise Senior Housing Portfolio Seller Financing (as discussed above) is included in the year of origination of the initial financing.

Reserve for Loan Losses

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

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

Table of Contents

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


		September 30, 2022						December 31, 2021							September 30, 2023						December 31, 2022
		Secured Loans		Mezzanine and Other		Total		Secured Loans		Mezzanine and Other		Total			Secured Loans		Other(1)		Total		Secured Loans		Other(1)		Total
Reserve for loan losses, beginning of period	Reserve for loan losses, beginning of period	$	1,804	$	9	$	1,813	$	3,152	$	7,128	$	10,280	Reserve for loan losses, beginning of period	$	8,280	$	—	$	8,280	$	1,804	$	9	$	1,813

Provision for expected loan losses	Provision for expected loan losses	3,346		7		3,353		793		896		1,689		Provision for expected loan losses	2,539		—		2,539		6,527		7		6,534
Expected loan losses related to loans sold or repaid(1)		(51)		—		(51)		(2,141)		(8,015)		(10,156)
Expected loan losses (recoveries) related to loans sold or repaid														Expected loan losses (recoveries) related to loans sold or repaid	(2,796)		—		(2,796)		(51)		(16)		(67)

Reserve for loan losses, end of period	Reserve for loan losses, end of period	$	5,099	$	16	$	5,115	$	1,804	$	9	$	1,813	Reserve for loan losses, end of period	$	8,023	$	—	$	8,023	$	8,280	$	—	$	8,280

(1)Includes ~~one~~CCRC resident loans and other loan ~~repaid during the nine months ended September 30, 2022 and six loans sold or repaid during the year ended December 31, 2021.~~activity.

Additionally, at September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, a liability of ~~$0.7~~$0.9 millionand ~~$0.3~~$0.8 million, respectively, related to expected credit losses for unfunded loan commitments was included in accounts payable, accrued liabilities, and other liabilities.

The change in the reserve for expected loan losses during the nine months ended September 30, 2023 is primarily due to principal repayments on seller financing, increased interest rates on variable rate loans, and macroeconomic conditions.

~~Table of Contents~~

NOTE 7. Investments in and Advances to Unconsolidated Joint Ventures

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


					Carrying Amount								Carrying Amount
					September 30,		December 31,						September 30,		December 31,
Entity(1)	Entity(1)	Segment	Property Count(2)	Ownership %(2)	2022		2021		Entity(1)	Segment	Property Count(2)	Ownership %(2)	2023		2022
South San Francisco JVs(3)									South San Francisco JVs(3)	Lab	7	70	$	357,209	$	309,969
SWF SH JV	SWF SH JV	Other	19	54	$	348,906	$	355,394	SWF SH JV	Other	19	54	333,980		345,978
South San Francisco JVs(3)		Life science	7	70	298,806		—
Life Science JV		Life science	1	49	27,009		25,605
Lab JV									Lab JV	Lab	1	49	30,483		26,601
Needham Land Parcel JV(4)	Needham Land Parcel JV(4)	Life science	—	38	15,342		13,566		Needham Land Parcel JV(4)	Lab	—	38	15,733		15,391
Medical Office JVs(5)		Medical office	3	20 - 67	8,840		9,069
Outpatient Medical JVs(5)									Outpatient Medical JVs(5)	Outpatient medical	2	20 - 67	7,976		8,738

					$	698,903	$	403,634					$	745,381	$	706,677

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

(2)Property counts and ownership percentages are as of September 30, ~~2022.~~2023.

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

(4)~~In December 2021, the Company acquired a 38% interest in a life science development joint venture in Needham, Massachusetts for $13 million.~~ Land held for development is excluded from the property count as of September 30, ~~2022.~~2023.

(5)Includes two unconsolidated outpatient medical ~~office~~ joint ventures in which the Company holds an ownership percentage as follows: (i) Ventures IV (20%) and (ii) Suburban Properties, LLC (67%). ~~During 2021,~~As of December 31, 2022, these joint ventures held a total of three properties. In April 2023, the Company ~~also held a 30%~~acquired the remaining 80% interest in one of the two properties in the Ventures ~~III, which issued its final distribution and was dissolved.~~IV unconsolidated joint venture for $4 million (see Note 3). These joint ventures have been aggregated herein due to similarity of the investments and operations.

In April 2021, the Company sold its two preferred equity investments for their carrying value as part of the Discovery SHOP Portfolio disposition (see Note 4). Prior to the sale, the Company’s ownership percentage in these two unconsolidated joint ventures was as follows: (i) Discovery Naples JV (41%) and (ii) Discovery Sarasota JV (47%).

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

South San Francisco ~~Joint Ventures~~JVs

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

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

Concurrently, the Company entered into a master equity transaction agreement with the SWF Partner that provides the Company the opportunity to sell interests of up to 30% in certain future development projects owned by the Company.

1916

Table of Contents

NOTE 8. Intangibles

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


Intangible lease assets	Intangible lease assets	September 30, 2022		December 31, 2021		Intangible lease assets	September 30, 2023		December 31, 2022(1)
Gross intangible lease assets	Gross intangible lease assets	$	802,180	$	797,675	Gross intangible lease assets	$	755,903	$	770,285
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(357,965)		(277,915)		Accumulated depreciation and amortization	(416,712)		(352,224)
Intangible assets, net~~(1)~~	Intangible assets, net~~(1)~~	$	444,215	$	519,760	Intangible assets, net~~(1)~~	$	339,191	$	418,061

Weighted average remaining amortization period in years	Weighted average remaining amortization period in years	5		6		Weighted average remaining amortization period in years	5		5

_______________________________________

(1)Excludes intangible assets reported in assets held for sale ~~and discontinued operations, net~~ of $2 ~~millionand zero as of September 30, 2022 and December 31, 2021, respectively.~~million.

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


Intangible lease liabilities	Intangible lease liabilities	September 30, 2022		December 31, 2021		Intangible lease liabilities	September 30, 2023		December 31, 2022
Gross intangible lease liabilities	Gross intangible lease liabilities	$	240,733	$	234,917	Gross intangible lease liabilities	$	230,896	$	237,464
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(77,859)		(57,685)		Accumulated depreciation and amortization	(97,228)		(81,271)
Intangible liabilities, net	Intangible liabilities, net	$	162,874	$	177,232	Intangible liabilities, net	$	133,668	$	156,193

Weighted average remaining amortization period in years	Weighted average remaining amortization period in years	8		8		Weighted average remaining amortization period in years	7		7

During the nine months ended September 30, 2023, in conjunction with the Company’s acquisition of real estate, the Company acquired $0.5 million of intangible assets with a weighted average amortization period at acquisition of 5 years.

During the year ended December 31, 2022, in conjunction with the Company’s acquisitions of real estate, the Company acquired intangible assets of$7 $7 million and intangible liabilities of~~$6 million~~. $6 million. The intangible assets and liabilities acquired had a weighted average amortization period at acquisition of7 yearsand11 years, respectively.

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

NOTE 9. Debt

Subsequent to the Reorganization, Healthpeak OP, the Company’s consolidated operating subsidiary, is the borrower under, and the Company is the guarantor of, all of the unsecured debt discussed below, which includes the Revolving Facility, Term Loan Facilities, Commercial Paper Program (each as defined below), and senior unsecured notes. The Company’s guarantee of the senior unsecured notes is full and unconditional and applicable to existing and future senior unsecured notes.

Bank Line of Credit and Term ~~Loan~~Loans

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

In September 2021, the Company executed an amended and restated unsecured revolving line of credit (the “Revolving Facility”) to increase total revolving commitments from $2.5 billion to $3.0 billion and extend the maturity date to January 20, 2026. This maturity date may be further extended pursuant to two six-month extension options, subject to certain customary conditions. Borrowings under the Revolving Facility accrue interest at the ~~London Interbank Offered Rate (“LIBOR”)~~applicable interest rate benchmark plus a margin that depends on the credit ratings of the Company’s senior unsecured long-term debt. On February 10, 2023, the Company executed an amendment to the Revolving Facility to convert the interest rate benchmark from LIBOR to SOFR. The Company also pays a facility fee on the entire revolving commitment that depends on its credit ratings. Additionally, the Revolving Facility includes a sustainability-linked pricing component whereby the applicable margin may be reduced by up to 0.025% based on the Company’s achievement of specified sustainability-linked metrics, subject to certain conditions. Based on the Company’s credit ratings at September 30, ~~2022,~~2023, and inclusive of achievement of a sustainability-linked metric, ~~during the three months ended September 30, 2022,~~ the margin on the Revolving Facility was ~~0.75%~~0.85% and the facility fee was 0.15%. ~~At September 30, 2022 and December 31, 2021, the Company had no balance outstanding under the Revolving Facility.~~

The Revolving Facility includes a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to $750 million, subject to securing additional commitments. ~~Further,~~At each of September 30, 2023 and December 31, 2022, the Company had no balance outstanding under the Revolving Facility includes customary LIBOR replacement language, including, but not limited to, the use of rates based on the Secured Overnight Financing Rate (“SOFR”) administered by the Federal Reserve Bank of New York.Facility.

2017

Table of Contents

On August 22, 2022, the Company executed a term loan agreement (the “Term Loan Agreement”) that provided for two senior unsecured delayed draw term loans in an aggregate principal amount of up to $500 million (the “Term Loan Facilities”). The Term Loan Facilities were available to be drawn from time to time during a 180-day period after closing, subject to customary borrowing conditions, and the Company drew the entirety of the $500 million under the Term Loan Facilities in October 2022. $250 million of the Term Loan Facilities has an initial stated maturity of 4.5 years, which may be extended for a one-year period subject to certain customary conditions. The other $250 million of the Term Loan Facilities has a stated maturity of 5 years with no option to extend. At each of September 30, 2023 and December 31, 2022, the Company had $500 million outstanding under the Term Loan Facilities.

Loans outstanding under the Term Loan Facilities accrue interest at Term SOFR plus a margin that depends on the credit ratings of the Company’s senior unsecured long-term debt. The Term Loan Agreement also includes a sustainability-linked pricing component whereby the applicable margin under the Term Loan Facilities may be reduced by 0.01% based on the Company’s achievement of specified sustainability-linked metrics. Based on the Company’s credit ratings as of September 30, 2023, and inclusive of achievement of a sustainability-linked metric, the margin on the Term Loan Facilities was 0.94%. The Term Loan Agreement includes a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to an additional $500 million, subject to securing additional commitments.

In August 2022, the Company entered into two forward-starting interest rate swap instruments that are designated as cash flow hedges (see Note 17). The Term Loan Facilities associated with these interest rate swap instruments are reported as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instruments. Based on the Company’s credit ratings as of September 30, 2023, the Term Loan Facilities had a blended fixed effective interest rate of 3.76%, inclusive of the impact of these interest rate swap instruments and amortization of the related debt issuance costs.

The Revolving Facility ~~also contains~~and Term Loan Facilities are subject to certain financial restrictions and other customary requirements, including financial covenants and cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the applicable agreement: (i) limit the ratio of Enterprise Total Indebtedness to Enterprise Gross Asset Value to 60%; (ii) limit the ratio of Enterprise Secured Debt to Enterprise Gross Asset Value to 40%; (iii) limit the ratio of Enterprise Unsecured Debt to Enterprise Unencumbered Asset Value to 60%; (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times; and (v) require a minimum Consolidated Tangible Net Worth of $7.7 billion. The Company believes it was in compliance with each of these covenants at September 30, ~~2022.~~

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

~~Loans outstanding under the 2022 Term Loan Facilities accrue interest at adjusted~~SOFR plus a margin that depends on the credit ratings of the Company’s senior unsecured long-term debt. The 2022 Term Loan Agreement also includes a sustainability-linked pricing component whereby the applicable margin under the 2022 Term Loan Facilities may be reduced by 0.01% based on the Company’s achievement of specified sustainability-linked metrics. Based on the Company’s credit ratings as of September 30, 2022, the margin on the 2022 Term Loan Facilities was 0.85%.Commencing on October 21, 2022, 60 days after closing, the Company became obligated to pay a fee on the daily amount of undrawn commitments under the 2022 Term Loan Facilities at a rate per annum equal to 0.15%. The 2022 Term Loan Agreement includes a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to an additional $500 million, subject to securing additional commitments.

The 2022 Term Loan Agreement also contains certain financial restrictions and other customary requirements, including financial covenants and cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreement: (i) limit the ratio of Enterprise Total Indebtedness to Enterprise Gross Asset Value to 60%; (ii) limit the ratio of Enterprise Secured Debt to Enterprise Gross Asset Value to 40%; (iii) limit the ratio of Enterprise Unsecured Debt to Enterprise Unencumbered Asset Value to 60%; (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times; and (v) require a minimum Consolidated Tangible Net Worth of $7.7 billion. The Company believes it was in compliance with each of these covenants at September 30, 2022.

As of September 30, 2022, the Company had no borrowings outstanding under the 2022 Term Loan Facilities. In October 2022, the entirety of the $500 million under the 2022 Term Loan Facilities was drawn.

In August 2022, the Company entered into two forward-starting interest rate swap instruments that are designated as cash flow hedges (see Note 17). The 2022 Term Loan Facilities associated with these interest rate swap instruments will be reported as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instruments. As of October 31, 2022, the 2022 Term Loan Facilities had a fixed effective interest rate of 3.76%, inclusive of the impact of these interest rate swap instruments and amortization of the related debt issuance costs.2023.

Commercial Paper Program

In September 2019, the Company established an unsecured commercial paper program (the “Commercial Paper Program”). Under the terms of the Commercial Paper Program, the Company may issue, from time to time, short-term unsecured ~~short-term debt securities~~notes with varying maturities. Amounts available under the Commercial Paper Program may be borrowed, repaid, and re-borrowed from time to time. At each of September 30, 2023 and December 31, ~~2021, the maximum aggregate face or principal amount that could be outstanding at any one time was $1.5 billion. In July~~ 2022, ~~the Company increased~~ the maximum aggregate face or principal amount that can be outstanding at any one time towas $2.0 billion. Amounts borrowed under the Commercial Paper Program will be sold on terms that are customary for the U.S. commercial paper market and will be at least equal in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness. The Company uses its Revolving Facility as a liquidity backstop for the repayment of short-term unsecured ~~short-term debt securities~~notes issued under the Commercial Paper Program. At September 30, ~~2022,~~2023, the Company had ~~$1.59 billion~~$424 million of ~~securities~~notes outstanding under the Commercial Paper Program, with original maturities of approximately 4222 days and a weighted average interest rate of ~~3.41%~~5.62%. At December 31, ~~2021,~~2022, the Company had ~~$1.17 billion~~$996 million of ~~securities~~notes outstanding under the Commercial Paper Program, with original maturities of approximately two months and a weighted average interest rate of ~~0.32%~~4.90%.

~~Table of Contents~~

Senior Unsecured Notes

At ~~each of~~ September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had senior unsecured notes outstanding with an aggregate principal balance of~~$4.7 billion.~~ $5.5 billion and $4.7 billion, respectively. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions, and other customary terms.The Company believes it was in compliance with these covenants at September 30, ~~2022.~~2023.

Table of Contents

The following table summarizes the Company’s senior unsecured notes issuances during the nine months ended September 30, 2023 (dollars in thousands):


Issue Date	Amount		Coupon Rate		Maturity Year
January 17, 2023	$	400,000	5.25	%	2032
May 10, 2023(1)	350,000		5.25	%	2032

(1)In May 2023, the Company issued $350 million of 5.25% senior unsecured notes due 2032, which constituted an additional issuance of, and are treated as a single series with, the $400 million of senior unsecured notes due 2032 issued in January 2023.

During the three and nine months ended September 30, ~~2022, the Company did not issue, repurchase,~~2023, there were no repurchases or ~~redeem any~~redemptions of senior unsecured notes.

~~The following table summarizes the Company’s senior unsecured notes repurchases and redemptions during~~During the year ended December 31, ~~2021 (dollars in thousands):~~

Payoff Date(1)
Amount Coupon Rate Maturity Year
May 19, 2021 $ 251,806 3.40 % 2025
May 19, 2021 298,194 4.00 % 2025
February 26, 2021 188,000 4.25 % 2023
February 26, 2021 149,000 4.20 % 2024
February 26, 2021 331,000 3.88 % 2024
January 28, 2021 112,000 4.25 % 2023
January 28, 2021 201,000 4.20 % 2024
January 28, 2021 469,000 3.88 % 2024

~~(1)As a result of the~~2022, there were no issuances, repurchases, ~~and~~or redemptions of ~~these~~ senior unsecured ~~notes, the Company recognized an aggregate $225 million loss on debt extinguishment during the nine months ended September 30, 2021.~~

In 2021, the Company completed two green bond offerings. The net proceeds from both green bonds have been allocated to eligible green projects, and the Company may choose to re-allocate net proceeds from such offerings to one or more other eligible green projects. The following table summarizes these senior unsecured note issuances for the year ended December 31, 2021 (dollars in thousands):

Issue Date Amount Coupon Rate Maturity Year
November 24, 2021 $ 500,000 2.13 % 2028
July 12, 2021 450,000 1.35 % 2027
notes.

Mortgage Debt

At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had ~~$347~~$341 million and ~~$350~~$345 million, respectively, in aggregate principal of mortgage debt outstanding, which was secured by ~~18 healthcare facilities,~~15 outpatient medical buildings and 3 CCRCs, with an aggregate carrying value of ~~$796~~$770 million and ~~$811~~$793 million, respectively.

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

During each of the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company made aggregate principal repayments of mortgage debt of $1 ~~million(excluding mortgage debt on assets held for sale and discontinued operations).~~million. During each of the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company made aggregate principal repayments of mortgage debt of $4 ~~million(excluding mortgage debt on assets held for sale and discontinued operations).~~million.

~~In April 2021, in conjunction with the acquisition of the MOB Portfolio, the~~The Company ~~originated~~has $142 million of ~~secured~~ mortgage debt ~~(see Note 3)~~secured by a portfolio of 13 outpatient medical buildings that matures in May 2026. In April 2022, the Company terminated its existing interest rate cap instruments associated with this variable rate mortgage debt and entered into two interest rate swap instruments that are designated as cash flow hedges and mature in May ~~2026~~2026. In February 2023, the agreements associated with this variable rate mortgage debt were amended to change the interest rate benchmarks from LIBOR to SOFR, effective March 2023. Concurrently, the Company modified the related interest rate swap instruments to reflect the change in the interest rate benchmarks from LIBOR to SOFR (see Note 17). The variable rate mortgage debt associated with these interest rate swap instruments is reported as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instrument.

2219

Table of Contents

Debt Maturities

The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at September 30, ~~2022~~2023 (dollars in thousands):


						Senior Unsecured Notes(2)				Mortgage Debt(3)													Senior Unsecured Notes(2)				Mortgage Debt(3)
Year	Year	Bank Line of Credit		Commercial Paper(1)		Amount		Interest Rate		Amount		Interest Rate		Total		Year	Bank Line of Credit		Commercial Paper(1)		Term Loans		Amount		Interest Rate		Amount		Interest Rate		Total
2022		$	—	$	—	$	—	—	%	$	1,289	3.80	%	$	1,289
2023	2023	—		—		—		—	%	90,089		3.80	%	90,089		2023	$	—	$	—	$	—	$	—	—	%	$	86,161	3.79	%	$	86,161
2024	2024	—		—		—		—	%	7,024		5.49	%	7,024		2024	—		—		—		—		—	%	7,024		6.74	%	7,024
2025	2025	—		—		800,000		3.93	%	3,209		3.80	%	803,209		2025	—		—		—		800,000		3.92	%	3,209		3.82	%	803,209
2026	2026	—		1,585,333		650,000		3.39	%	244,523		4.48	%	2,479,856		2026	—		424,000		—		650,000		3.40	%	244,523		4.44	%	1,318,523
2027																2027	—		—		500,000		450,000		1.54	%	366		5.91	%	950,366
Thereafter	Thereafter	—		—		3,250,000		3.24	%	366		5.91	%	3,250,366		Thereafter	—		—		—		3,550,000		3.92	%	—		—	%	3,550,000
		—		1,585,333		4,700,000				346,500				6,631,833			—		424,000		500,000		5,450,000				341,283				6,715,283
(Discounts), premium and debt costs, net		—		—		(42,349)				1,487				(40,862)
Premiums, (discounts), and debt issuance costs, net																Premiums, (discounts), and debt issuance costs, net	—		—		(3,397)		(48,539)				1,066				(50,870)

		$	—	$	1,585,333	$	4,657,651			$	347,987			$	6,590,971		$	—	$	424,000	$	496,603	$	5,401,461			$	342,349			$	6,664,413

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

(2)Effective interest rates on the senior unsecured notes range from 1.54% to ~~6.91%~~6.87% with a weighted average effective interest rate of ~~3.39%~~3.66% and a weighted average maturity of 6 years.

(3)Effective interest rates on the mortgage debt range from ~~3.57%~~3.44% to ~~6.70%~~8.99% with a weighted average effective interest rate of ~~4.35%~~4.32% and a weighted average maturity of 32 years. These interest rates include the impact of designated interest rate swap instruments, which effectively fix the interest rate on certain variable rate debt.

NOTE 10. Commitments and Contingencies

Legal Proceedings

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

DownREITs and Other Partnerships

In connection with the formation of certain limited liability companies (“DownREITs”), members may contribute appreciated real estate to a DownREIT in exchange for DownREIT units. These contributions are generally tax-deferred, so that the pre-contribution gain related to the property is not taxed to the member. However, if a contributed property is later sold by the DownREIT, the unamortized pre-contribution gain that exists at the date of sale is specifically allocated and taxed to the contributing members. In many of the DownREITs, the Company has entered into indemnification agreements with those members who contributed appreciated property into the DownREIT. Under these indemnification agreements, if any of the appreciated real estate contributed by the members is sold by the DownREIT in a taxable transaction within a specified number of years, the Company will reimburse the affected members for the federal and state income taxes associated with the pre-contribution gain that is specially allocated to the affected member under the Internal Revenue Code (“make-whole payments”). These make-whole payments include a tax gross-up provision. These indemnification agreements have expirations terms that range through2039 on a total of 29 properties.

Additionally, the Company owns a 49% interest in the ~~Life Science~~Lab JV (see Note 7). If the property in the joint venture is sold in a taxable transaction, the Company is generally obligated to indemnify its joint venture partner for its federal and state income taxes associated with the gain that existed at the time of the contribution to the joint venture.

2320

Table of Contents

NOTE 11. Equity and Redeemable Noncontrolling Interests

Dividends

On October ~~27, 2022,~~29, 2023, the ~~Company announced that its~~Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share. The common stock cash dividend will be paid on November ~~18, 2022~~20, 2023 to stockholders of record as of the close of business on November 7, ~~2022.~~2023.

During each of the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company declared and paid common stock cash dividends of $0.30 per share. During each of the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company declared and paid common stock cash dividends of $0.90 per share.

At-The-Market Equity Offering Program

In February ~~2020,~~2023, in connection with the Reorganization, the Company ~~established an~~terminated the previous at-the-market equity offering program (as amended from time to time, the “2020 ATM Program”) and established a new at-the-market equity offering program (the “2023 ATM Program” and, together with the 2020 ATM Program, the “ATM ~~Program”~~Programs”)~~, which was most recently amended in May 2021 to increase~~. The ATM Programs allow for the ~~size~~sale of ~~the program from $1.25 billion to $1.5 billion, pursuant to which~~ shares of common stock having an aggregate gross sales price of up to $1.5 billion ~~may be sold~~ (i) by the Company through a consortium of banks acting as sales agents or directly to the banks acting as principals or (ii) by a consortium of banks acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement (each, an “ATM forward contract”). The use of ATM forward contracts allows the Company to lock in a share price on the sale of shares at the time the ATM forward contract isbecomes effective, but defer receiving the proceeds from the sale of shares until a later date.

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

At September 30, ~~2022,~~2023, $~~1.18~~1.5 billion of the Company’s common stock remained available for sale under the 2023 ATM Program.

ATM Forward Contracts

During the ~~three and nine months~~year ended ~~September 30,~~December 31, 2021, the Company utilized the forward provisions under the 2020 ATM Program to allow for the sale of an aggregate of 9.1 million shares of its common stock at an initial weighted average net price of $35.25 per share, after commissions. The Company did not ~~utilize the~~enter into any forward ~~provisions~~contracts under the 2020 ATM ~~program~~Program during the ~~three and nine months~~year ended ~~September 30,~~December 31, 2022. In December 2022, the Company settled all 9.1 million shares previously outstanding under ATM forward contracts at a weighted average net price of $34.01 per share, after commissions, resulting in net proceeds of $308 million. During the three and nine months ended September 30, ~~2022 and 2021,~~ ~~no shares were settled~~2023, the Company did not utilize the forward provisions under the ATM ~~forward contracts. Therefore, at~~ ~~September 30, 2022 and 2021, 9.1 million shares remained outstanding under ATM forward contracts. These ATM forward contracts mature in the first quarter of 2023.~~Programs.

ATM Direct Issuances

During each of the three and nine months ended September 30, ~~2022~~2023 and September 30, ~~2021,~~2022, there were no direct issuances of shares of common stock under the ATM ~~Program.~~Programs.

Share Repurchase Program

On August 1, 2022, the Company’s Board of Directors approved a share repurchase program under which the Company may acquire shares of its common stock in the open market up to an aggregate purchase price of $500 million (the “Share Repurchase Program”). Purchases of common stock under the Share Repurchase Program may be exercised at the Company’s discretion with the timing and number of shares repurchased depending on a variety of factors, including price, corporate and regulatory requirements, and other corporate liquidity requirements and priorities. The Share Repurchase Program expires in August 2024 and may be suspended or terminated at any time without prior notice. ~~During the three and nine months ended September 30,~~Under Maryland General Corporation Law, outstanding shares of common stock acquired by a corporation become authorized but unissued shares, which may be re-issued. In August 2022, the Company repurchased 2.1 million shares of its common stock at a weighted average price of $27.16 per share for a total of $56 million. During the three and nine months ended September 30, 2023, there were no repurchases under the Share Repurchase Program. Therefore, at September 30, ~~2022,~~2023, $444 million of the Company’s common stock remained available for repurchase under the Share Repurchase Program.

2421

Table of Contents

Accumulated Other Comprehensive Income (Loss)

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


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022

Unrealized gains (losses) on derivatives, net	Unrealized gains (losses) on derivatives, net	$	32,373	$	—	Unrealized gains (losses) on derivatives, net	$	38,566	$	30,145
Supplemental Executive Retirement Plan minimum liability	Supplemental Executive Retirement Plan minimum liability	(2,847)		(3,147)		Supplemental Executive Retirement Plan minimum liability	(1,819)		(2,011)

Total accumulated other comprehensive income (loss)	Total accumulated other comprehensive income (loss)	$	29,526	$	(3,147)	Total accumulated other comprehensive income (loss)	$	36,747	$	28,134

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

Noncontrolling Interests

Redeemable Noncontrolling Interests

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

~~During the year ended December 31, 2021, one~~As of September 30, 2023, two of the redeemable noncontrolling interests met the conditions for redemption, and the related put option was exercised during the year then ended. Accordingly, the Company made a cash payment for the redemption value of $60 million to the related noncontrolling interest holder during the year ended December 31, 2021 and acquired the redeemable noncontrolling interest associated with this entity.but were not yet exercised. The two remaining redeemable noncontrolling interests hadnot yet met the conditions for redemption as of September 30, ~~2022 or December 31, 2021. Three~~2023. The Company expects the redemption conditions for these two interests to be met in 2023 and 2024. One of the interests will become redeemable following the passage of a predetermined amount of ~~time, one of which will occur in the fourth quarter of 2022, and the remaining two in 2023 and 2024.~~time. The ~~fourth~~second interest will become redeemable at the earlier of a predetermined passage of time or stabilization of the underlying development ~~property, which is expected to occur in 2023.~~property. The ~~redemption~~ values of the redeemable noncontrolling interests are subject to change based on the assessment of redemption value at each redemption date.

Healthpeak OP

Immediately following the Reorganization, Healthpeak Properties, Inc. was the initial sole member and 100% owner of Healthpeak OP. Subsequent to the Reorganization, certain employees of the Company (“OP Unitholders”) were issued approximately 2 million noncontrolling, non-managing member units in Healthpeak OP (“OP Units”). When certain conditions are met, the OP Unitholders have the right to require redemption of part or all of their OP Units for cash or shares of the Company’s common stock, at the Company’s option as managing member of Healthpeak OP. The per unit redemption amount is equal to either one share of the Company’s common stock or cash equal to the fair value of a share of common stock at the time of redemption. The Company classifies the OP Units in permanent equity because it may elect, in its sole discretion, to issue shares of its common stock to OP Unitholders who choose to redeem their OP Units rather than using cash. None of the outstanding OP Units met the criteria for redemption as of September 30, 2023.

DownREITs

The non-managing member units of the Company’s DownREITs are exchangeable for an amount of cash approximating the then-current market value of shares of the Company’s common stock or, at the Company’s option, shares of the Company’s common stock (subject to certain adjustments, such as stock splits and reclassifications). Upon exchange of DownREIT units for the Company’s common stock, the carrying amount of the DownREIT units is reclassified to stockholders’ equity. At September 30, 2023, there were approximately 5 million DownREIT units (7 million shares of Healthpeak common stock are issuable upon conversion) outstanding in seven DownREIT LLCs, for all of which the Company acts as the managing member. At September 30, 2023, the carrying and market values of the 5 millionDownREIT units were$200 millionand$134 million, respectively. At December 31, 2022, the carrying and market values of the 5 million DownREIT units were$200 million and $183 million, respectively.

Table of Contents

NOTE 12. Earnings Per Common Share

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

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

Refer to Note 11 for a discussion of the sale of shares under and settlement of forward sales agreements during the periods presented. The Company considered the potential dilution resulting from ~~the~~ forward agreements under its ATM Programs to the calculation of earnings per share. At inception, the agreements do not have an effect on the computation of basic EPS as no shares are delivered until settlement. However, the Company uses the treasury stock method to calculate the dilution, if any, resulting from the forward sales agreements during the period of time prior to settlement. ~~The aggregate effect on the Company’s diluted weighted-average common shares for each of the three and nine months ended September 30, 2022 and 2021 waszeroweighted-average incremental shares from the forward equity sales agreements.~~

~~Table of Contents~~

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Numerator
Numerator - Basic										Numerator - Basic
Income (loss) from continuing operations	Income (loss) from continuing operations	$	359,284	$	61,305	$	503,611	$	108,785	Income (loss) from continuing operations	$	68,656	$	359,284	$	259,362	$	503,611
Noncontrolling interests' share in continuing operations		(4,016)		(7,195)		(11,701)		(14,036)
Noncontrolling interests’ share in continuing operations										Noncontrolling interests’ share in continuing operations	(4,442)		(4,016)		(24,297)		(11,701)
Income (loss) from continuing operations attributable to Healthpeak Properties, Inc.	Income (loss) from continuing operations attributable to Healthpeak Properties, Inc.	355,268		54,110		491,910		94,749		Income (loss) from continuing operations attributable to Healthpeak Properties, Inc.	64,214		355,268		235,065		491,910
Less: Participating securities' share in continuing operations		(604)		(269)		(2,523)		(3,001)
Less: Participating securities’ share in continuing operations										Less: Participating securities’ share in continuing operations	(166)		(604)		(1,568)		(2,523)
Income (loss) from continuing operations applicable to common shares	Income (loss) from continuing operations applicable to common shares	354,664		53,841		489,387		91,748		Income (loss) from continuing operations applicable to common shares	64,048		354,664		233,497		489,387
Income (loss) from discontinued operations	Income (loss) from discontinued operations	(1,298)		601		2,011		384,569		Income (loss) from discontinued operations	—		(1,298)		—		2,011
Noncontrolling interests' share in discontinued operations		—		—		—		(2,539)

Net income (loss) applicable to common shares	Net income (loss) applicable to common shares	$	353,366	$	54,442	$	491,398	$	473,778	Net income (loss) applicable to common shares	$	64,048	$	353,366	$	233,497	$	491,398
Numerator - Dilutive	Numerator - Dilutive									Numerator - Dilutive
Net income (loss) applicable to common shares	Net income (loss) applicable to common shares	$	353,366	$	54,442	$	491,398	$	473,778	Net income (loss) applicable to common shares	$	64,048	$	353,366	$	233,497	$	491,398
Add: distributions on dilutive convertible units and other	Add: distributions on dilutive convertible units and other	2,355		—		4,943		—		Add: distributions on dilutive convertible units and other	—		2,355		—		4,943
Dilutive net income (loss) available to common shares	Dilutive net income (loss) available to common shares	$	355,721	$	54,442	$	496,341	$	473,778	Dilutive net income (loss) available to common shares	$	64,048	$	355,721	$	233,497	$	496,341
Denominator	Denominator									Denominator
Basic weighted average shares outstanding	Basic weighted average shares outstanding	538,417		539,021		539,105		538,879		Basic weighted average shares outstanding	547,062		538,417		546,978		539,105
Dilutive potential common shares - equity awards(1)	Dilutive potential common shares - equity awards(1)	281		367		255		280		Dilutive potential common shares - equity awards(1)	269		281		269		255

Dilutive potential common shares - DownREIT conversions	Dilutive potential common shares - DownREIT conversions	7,317		—		5,492		—		Dilutive potential common shares - DownREIT conversions	—		7,317		—		5,492
Diluted weighted average common shares	Diluted weighted average common shares	546,015		539,388		544,852		539,159		Diluted weighted average common shares	547,331		546,015		547,247		544,852
Basic earnings (loss) per common share	Basic earnings (loss) per common share									Basic earnings (loss) per common share
Continuing operations	Continuing operations	$	0.66	$	0.10	$	0.91	$	0.17	Continuing operations	$	0.12	$	0.66	$	0.43	$	0.91
Discontinued operations	Discontinued operations	0.00		0.00		0.00		0.71		Discontinued operations	—		0.00		—		0.00
Net income (loss) applicable to common shares	Net income (loss) applicable to common shares	$	0.66	$	0.10	$	0.91	$	0.88	Net income (loss) applicable to common shares	$	0.12	$	0.66	$	0.43	$	0.91
Diluted earnings (loss) per common share	Diluted earnings (loss) per common share									Diluted earnings (loss) per common share
Continuing operations	Continuing operations	$	0.65	$	0.10	$	0.91	$	0.17	Continuing operations	$	0.12	$	0.65	$	0.43	$	0.91
Discontinued operations	Discontinued operations	0.00		0.00		0.00		0.71		Discontinued operations	—		0.00		—		0.00
Net income (loss) applicable to common shares	Net income (loss) applicable to common shares	$	0.65	$	0.10	$	0.91	$	0.88	Net income (loss) applicable to common shares	$	0.12	$	0.65	$	0.43	$	0.91

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

Table of Contents

For ~~all periods presented in~~ the ~~table above,~~three and nine months ended September 30, 2023, forward equity sales agreements had no dilutive impact as no shares were outstanding under ATM forward contracts during the period. For the three and nine months ended September 30, 2022, the 9.1 million shares under forward equity sales agreements that ~~have~~had not been settled ~~as of~~during the periods then ended were anti-dilutive.

For the three and nine months ended September 30, ~~2022 and 2021~~2023, all 7 million shares issuable upon conversion of DownREIT units were not included because they were anti-dilutive.

For the three and nine months ended September 30, 2022, 7 million and 5 million shares issuable upon conversion of DownREIT units, respectively, were dilutive and are presented as diluted potential common shares in the table above. ~~For the three and nine months ended September 30, 2021, all 7 million shares issuable upon conversion of DownREIT units were not included because they were anti-dilutive.~~

NOTE 13. Segment Disclosures

The Company’s reportable segments, based on how its chief operating decision ~~makers~~maker (“~~CODMs”~~CODM”) ~~evaluate~~evaluates the business and ~~allocate~~allocates resources, are as follows: (i) ~~life science,~~lab, (ii) outpatient medical, ~~office,~~ and (iii) CCRC. The Company has non-reportable segments that are comprised primarily of the Company’s interests in an unconsolidated JV that owns 19 senior housing assets (the “SWF SH JV”), loans receivable, and marketable debt securities. These non-reportable segments have been presented on an aggregate basis within the Notes to the Consolidated Financial Statements herein. The accounting policies of the segments are the same as those described in Note 2 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 filed with the SEC, as updated by Note 2 herein.

During the second quarter of 2023, the Company changed the name of its “life science” and “medical office” segments to “lab” and “outpatient medical,” respectively. The segment name changes did not result in any changes to the composition of the Company’s segments or information reviewed by its CODM, and therefore, had no impact on the Company’s historical results of segment operations.

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

~~Table of Contents~~

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

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

2724

Table of Contents

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

For the three months ended September 30, ~~2022:~~2023:


		Life Science		Medical Office		CCRC		Other Non-reportable		Corporate Non-segment		Total			Lab		Outpatient Medical		CCRC		Other Non-reportable		Corporate Non-segment		Total
Total revenues	Total revenues	$	207,795	$	184,506	$	122,142	$	5,963	$	—	$	520,406	Total revenues	$	226,059	$	191,016	$	133,808	$	5,360	$	—	$	556,243
Government grant income(1)		—		—		4		—		—		4

Less: Interest income	Less: Interest income	—		—		—		(5,963)		—		(5,963)		Less: Interest income	—		—		—		(5,360)		—		(5,360)
Healthpeak’s share of unconsolidated joint venture total revenues	Healthpeak’s share of unconsolidated joint venture total revenues	2,938		756		—		18,656		—		22,350		Healthpeak’s share of unconsolidated joint venture total revenues	2,425		746		—		20,572		—		23,743
Healthpeak’s share of unconsolidated joint venture government grant income		—		—		—		183		—		183

Noncontrolling interests’ share of consolidated joint venture total revenues	Noncontrolling interests’ share of consolidated joint venture total revenues	(55)		(8,968)		—		—		—		(9,023)		Noncontrolling interests’ share of consolidated joint venture total revenues	(154)		(8,735)		—		—		—		(8,889)
Operating expenses	Operating expenses	(55,162)		(64,782)		(100,264)		—		—		(220,208)		Operating expenses	(60,268)		(67,693)		(104,773)		—		—		(232,734)
Healthpeak’s share of unconsolidated joint venture operating expenses	Healthpeak’s share of unconsolidated joint venture operating expenses	(777)		(313)		—		(14,599)		—		(15,689)		Healthpeak’s share of unconsolidated joint venture operating expenses	(958)		(301)		—		(15,439)		—		(16,698)
Noncontrolling interests’ share of consolidated joint venture operating expenses	Noncontrolling interests’ share of consolidated joint venture operating expenses	21		2,558		—		—		—		2,579		Noncontrolling interests’ share of consolidated joint venture operating expenses	33		2,474		—		—		—		2,507

Adjustments to NOI~~(2)~~(1)	Adjustments to NOI~~(2)~~(1)	(15,221)		(4,079)		—		76		—		(19,224)		Adjustments to NOI~~(2)~~(1)	(9,842)		(3,547)		—		(27)		—		(13,416)
Adjusted NOI	Adjusted NOI	139,539		109,678		21,882		4,316		—		275,415		Adjusted NOI	157,295		113,960		29,035		5,106		—		305,396
Plus: Adjustments to NOI~~(2)~~(1)	Plus: Adjustments to NOI~~(2)~~(1)	15,221		4,079		—		(76)		—		19,224		Plus: Adjustments to NOI~~(2)~~(1)	9,842		3,547		—		27		—		13,416
Interest income	Interest income	—		—		—		5,963		—		5,963		Interest income	—		—		—		5,360		—		5,360
Interest expense	Interest expense	—		(1,964)		(1,887)		—		(40,227)		(44,078)		Interest expense	—		(1,947)		(1,830)		—		(46,733)		(50,510)
Depreciation and amortization	Depreciation and amortization	(70,141)		(70,917)		(32,132)		—		—		(173,190)		Depreciation and amortization	(78,646)		(72,736)		(33,177)		—		—		(184,559)
General and administrative	General and administrative	—		—		—		—		(24,549)		(24,549)		General and administrative	—		—		—		—		(23,093)		(23,093)
Transaction costs	Transaction costs	(40)		(94)		(594)		—		—		(728)		Transaction costs	(51)		(23)		85		—		(47)		(36)
Impairments and loan loss reserves		—		—		—		(3,407)		—		(3,407)
Gain (loss) on sales of real estate, net		—		554		—		(4,703)		—		(4,149)
Impairments and loan loss reserves, net														Impairments and loan loss reserves, net	—		—		—		550		—		550

Other income (expense), net	Other income (expense), net	311,912		154		(7,086)		—		698		305,678		Other income (expense), net	(1)		78		254		(53)		1,203		1,481
Less: Government grant income		—		—		(4)		—		—		(4)

Less: Healthpeak’s share of unconsolidated joint venture NOI	Less: Healthpeak’s share of unconsolidated joint venture NOI	(2,161)		(443)		—		(4,240)		—		(6,844)		Less: Healthpeak’s share of unconsolidated joint venture NOI	(1,467)		(445)		—		(5,133)		—		(7,045)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI	Plus: Noncontrolling interests’ share of consolidated joint venture NOI	34		6,410		—		—		—		6,444		Plus: Noncontrolling interests’ share of consolidated joint venture NOI	121		6,261		—		—		—		6,382
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	394,364		47,457		(19,821)		(2,147)		(64,078)		355,775		Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	87,093		48,695		(5,633)		5,857		(68,670)		67,342
Income tax benefit (expense)	Income tax benefit (expense)	—		—		—		—		3,834		3,834		Income tax benefit (expense)	—		—		—		—		(787)		(787)
Equity income (loss) from unconsolidated joint ventures	Equity income (loss) from unconsolidated joint ventures	(877)		206		—		346		—		(325)		Equity income (loss) from unconsolidated joint ventures	1,244		211		—		646		—		2,101

Income (loss) from continuing operations	Income (loss) from continuing operations	393,487		47,663		(19,821)		(1,801)		(60,244)		359,284		Income (loss) from continuing operations	88,337		48,906		(5,633)		6,503		(69,457)		68,656
Income (loss) from discontinued operations	Income (loss) from discontinued operations	—		—		—		—		(1,298)		(1,298)		Income (loss) from discontinued operations	—		—		—		—		—		—
Net income (loss)	Net income (loss)	$	393,487	$	47,663	$	(19,821)	$	(1,801)	$	(61,542)	$	357,986	Net income (loss)	$	88,337	$	48,906	$	(5,633)	$	6,503	$	(69,457)	$	68,656

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

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

2825

Table of Contents

For the three months ended September 30, ~~2021:~~2022:


		Life Science		Medical Office		CCRC		Other Non-reportable		Corporate Non-segment		Total			Lab		Outpatient Medical		CCRC		Other Non-reportable		Corporate Non-segment		Total
Total revenues	Total revenues	$	184,213	$	171,482	$	119,022	$	6,748	$	—	$	481,465	Total revenues	$	207,795	$	184,506	$	122,142	$	5,963	$	—	$	520,406
Government grant income(1)	Government grant income(1)	—		—		15		—		—		15		Government grant income(1)	—		—		4		—		—		4
Less: Interest income	Less: Interest income	—		—		—		(6,748)		—		(6,748)		Less: Interest income	—		—		—		(5,963)		—		(5,963)
Healthpeak’s share of unconsolidated joint venture total revenues	Healthpeak’s share of unconsolidated joint venture total revenues	1,521		737		—		17,109		—		19,367		Healthpeak’s share of unconsolidated joint venture total revenues	2,938		756		—		18,656		—		22,350

Healthpeak’s share of unconsolidated joint venture government grant income														Healthpeak’s share of unconsolidated joint venture government grant income	—		—		—		183		—		183
Noncontrolling interests’ share of consolidated joint venture total revenues	Noncontrolling interests’ share of consolidated joint venture total revenues	(82)		(8,954)		—		—		—		(9,036)		Noncontrolling interests’ share of consolidated joint venture total revenues	(55)		(8,968)		—		—		—		(9,023)
Operating expenses	Operating expenses	(44,923)		(58,430)		(98,799)		13		—		(202,139)		Operating expenses	(55,162)		(64,782)		(100,264)		—		—		(220,208)
Healthpeak’s share of unconsolidated joint venture operating expenses	Healthpeak’s share of unconsolidated joint venture operating expenses	(463)		(305)		(32)		(13,450)		—		(14,250)		Healthpeak’s share of unconsolidated joint venture operating expenses	(777)		(313)		—		(14,599)		—		(15,689)
Noncontrolling interests’ share of consolidated joint venture operating expenses	Noncontrolling interests’ share of consolidated joint venture operating expenses	25		2,659		—		—		—		2,684		Noncontrolling interests’ share of consolidated joint venture operating expenses	21		2,558		—		—		—		2,579

Adjustments to NOI(2)	Adjustments to NOI(2)	(11,021)		(3,626)		724		(100)		—		(14,023)		Adjustments to NOI(2)	(15,221)		(4,079)		—		76		—		(19,224)
Adjusted NOI	Adjusted NOI	129,270		103,563		20,930		3,572		—		257,335		Adjusted NOI	139,539		109,678		21,882		4,316		—		275,415
Plus: Adjustments to NOI(2)	Plus: Adjustments to NOI(2)	11,021		3,626		(724)		100		—		14,023		Plus: Adjustments to NOI(2)	15,221		4,079		—		(76)		—		19,224
Interest income	Interest income	—		—		—		6,748		—		6,748		Interest income	—		—		—		5,963		—		5,963
Interest expense	Interest expense	(46)		(1,104)		(1,936)		—		(32,819)		(35,905)		Interest expense	—		(1,964)		(1,887)		—		(40,227)		(44,078)
Depreciation and amortization	Depreciation and amortization	(79,570)		(66,189)		(31,416)		—		—		(177,175)		Depreciation and amortization	(70,141)		(70,917)		(32,132)		—		—		(173,190)
General and administrative	General and administrative	—		—		—		—		(23,270)		(23,270)		General and administrative	—		—		—		—		(24,549)		(24,549)
Transaction costs														Transaction costs	(40)		(94)		(594)		—		—		(728)
Impairments and loan loss reserves, net														Impairments and loan loss reserves, net	—		—		—		(3,407)		—		(3,407)
Gain (loss) on sales of real estate, net														Gain (loss) on sales of real estate, net	—		554		—		(4,703)		—		(4,149)

Impairments and loan loss reserves		—		(1,952)		—		1,667		—		(285)
Gain (loss) on sales of real estate, net		—		14,635		—		—		—		14,635
Gain (loss) on debt extinguishments		—		—		—		—		(667)		(667)
Other income (expense), net	Other income (expense), net	22		(30)		114		1		1,563		1,670		Other income (expense), net	311,912		154		(7,086)		—		698		305,678
Less: Government grant income	Less: Government grant income	—		—		(15)		—		—		(15)		Less: Government grant income	—		—		(4)		—		—		(4)
Less: Healthpeak’s share of unconsolidated joint venture NOI	Less: Healthpeak’s share of unconsolidated joint venture NOI	(1,058)		(432)		32		(3,659)		—		(5,117)		Less: Healthpeak’s share of unconsolidated joint venture NOI	(2,161)		(443)		—		(4,240)		—		(6,844)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI	Plus: Noncontrolling interests’ share of consolidated joint venture NOI	57		6,295		—		—		—		6,352		Plus: Noncontrolling interests’ share of consolidated joint venture NOI	34		6,410		—		—		—		6,444
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	59,696		58,412		(13,015)		8,429		(55,193)		58,329		Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	394,364		47,457		(19,821)		(2,147)		(64,078)		355,775
Income tax benefit (expense)	Income tax benefit (expense)	—		—		—		—		649		649		Income tax benefit (expense)	—		—		—		—		3,834		3,834
Equity income (loss) from unconsolidated joint ventures	Equity income (loss) from unconsolidated joint ventures	630		220		845		632		—		2,327		Equity income (loss) from unconsolidated joint ventures	(877)		206		—		346		—		(325)

Income (loss) from continuing operations	Income (loss) from continuing operations	60,326		58,632		(12,170)		9,061		(54,544)		61,305		Income (loss) from continuing operations	393,487		47,663		(19,821)		(1,801)		(60,244)		359,284
Income (loss) from discontinued operations	Income (loss) from discontinued operations	—		—		—		—		601		601		Income (loss) from discontinued operations	—		—		—		—		(1,298)		(1,298)
Net income (loss)	Net income (loss)	$	60,326	$	58,632	$	(12,170)	$	9,061	$	(53,943)	$	61,906	Net income (loss)	$	393,487	$	47,663	$	(19,821)	$	(1,801)	$	(61,542)	$	357,986

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

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

2926

Table of Contents

For the nine months ended September 30, ~~2022:~~2023:


		Life Science		Medical Office		CCRC		Other Non-reportable		Corporate Non-segment		Total			Lab		Outpatient Medical		CCRC		Other Non-reportable		Corporate Non-segment		Total
Total revenues	Total revenues	$	609,620	$	541,078	$	369,062	$	16,950	$	—	$	1,536,710	Total revenues	$	654,829	$	564,644	$	391,076	$	16,802	$	—	$	1,627,351
Government grant income(1)	Government grant income(1)	—		—		6,765		—		—		6,765		Government grant income(1)	—		—		184		—		—		184
Less: Interest income	Less: Interest income	—		—		—		(16,950)		—		(16,950)		Less: Interest income	—		—		—		(16,802)		—		(16,802)
Healthpeak’s share of unconsolidated joint venture total revenues	Healthpeak’s share of unconsolidated joint venture total revenues	5,637		2,249		—		54,918		—		62,804		Healthpeak’s share of unconsolidated joint venture total revenues	6,519		2,245		—		61,179		—		69,943
Healthpeak’s share of unconsolidated joint venture government grant income	Healthpeak’s share of unconsolidated joint venture government grant income	—		—		334		497		—		831		Healthpeak’s share of unconsolidated joint venture government grant income	—		—		—		229		—		229
Noncontrolling interests’ share of consolidated joint venture total revenues	Noncontrolling interests’ share of consolidated joint venture total revenues	(174)		(26,732)		—		—		—		(26,906)		Noncontrolling interests’ share of consolidated joint venture total revenues	(449)		(26,364)		—		—		—		(26,813)
Operating expenses	Operating expenses	(152,796)		(189,274)		(300,429)		—		—		(642,499)		Operating expenses	(172,666)		(197,442)		(307,551)		—		—		(677,659)
Healthpeak’s share of unconsolidated joint venture operating expenses	Healthpeak’s share of unconsolidated joint venture operating expenses	(1,744)		(912)		—		(42,804)		—		(45,460)		Healthpeak’s share of unconsolidated joint venture operating expenses	(2,987)		(895)		—		(45,062)		—		(48,944)
Noncontrolling interests’ share of consolidated joint venture operating expenses	Noncontrolling interests’ share of consolidated joint venture operating expenses	59		7,886		—		—		—		7,945		Noncontrolling interests’ share of consolidated joint venture operating expenses	108		7,477		—		—		—		7,585

Adjustments to NOI(2)	Adjustments to NOI(2)	(50,977)		(10,574)		—		120		—		(61,431)		Adjustments to NOI(2)	(25,618)		(11,373)		(679)		(59)		—		(37,729)
Adjusted NOI	Adjusted NOI	409,625		323,721		75,732		12,731		—		821,809		Adjusted NOI	459,736		338,292		83,030		16,287		—		897,345
Plus: Adjustments to NOI(2)	Plus: Adjustments to NOI(2)	50,977		10,574		—		(120)		—		61,431		Plus: Adjustments to NOI(2)	25,618		11,373		679		59		—		37,729
Interest income	Interest income	—		—		—		16,950		—		16,950		Interest income	—		—		—		16,802		—		16,802
Interest expense	Interest expense	—		(4,931)		(5,629)		—		(112,971)		(123,531)		Interest expense	—		(5,791)		(5,470)		—		(136,286)		(147,547)
Depreciation and amortization	Depreciation and amortization	(227,952)		(207,563)		(95,897)		—		—		(531,412)		Depreciation and amortization	(247,463)		(215,617)		(98,277)		—		—		(561,357)
General and administrative	General and administrative	—		—		—		—		(73,161)		(73,161)		General and administrative	—		—		—		—		(73,576)		(73,576)
Transaction costs	Transaction costs	(367)		(168)		(658)		—		(443)		(1,636)		Transaction costs	(209)		(171)		(412)		—		(2,306)		(3,098)
Impairments and loan loss reserves		—		—		—		(3,678)		—		(3,678)
Impairments and loan loss reserves, net														Impairments and loan loss reserves, net	—		—		—		156		—		156
Gain (loss) on sales of real estate, net	Gain (loss) on sales of real estate, net	3,856		10,894		—		(4,703)		—		10,047		Gain (loss) on sales of real estate, net	60,498		21,312		—		4,653		—		86,463

Other income (expense), net	Other income (expense), net	311,932		12,354		55		(13)		2,527		326,855		Other income (expense), net	1		517		260		(72)		3,502		4,208
Less: Government grant income	Less: Government grant income	—		—		(6,765)		—		—		(6,765)		Less: Government grant income	—		—		(184)		—		—		(184)
Less: Healthpeak’s share of unconsolidated joint venture NOI	Less: Healthpeak’s share of unconsolidated joint venture NOI	(3,893)		(1,337)		(334)		(12,611)		—		(18,175)		Less: Healthpeak’s share of unconsolidated joint venture NOI	(3,532)		(1,350)		—		(16,346)		—		(21,228)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI	Plus: Noncontrolling interests’ share of consolidated joint venture NOI	115		18,846		—		—		—		18,961		Plus: Noncontrolling interests’ share of consolidated joint venture NOI	341		18,887		—		—		—		19,228
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	544,293		162,390		(33,496)		8,556		(184,048)		497,695		Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	294,990		167,452		(20,374)		21,539		(208,666)		254,941
Income tax benefit (expense)	Income tax benefit (expense)	—		—		—		—		3,775		3,775		Income tax benefit (expense)	—		—		—		—		(2,225)		(2,225)
Equity income (loss) from unconsolidated joint ventures	Equity income (loss) from unconsolidated joint ventures	237		617		539		748		—		2,141		Equity income (loss) from unconsolidated joint ventures	3,155		585		—		2,906		—		6,646

Income (loss) from continuing operations	Income (loss) from continuing operations	544,530		163,007		(32,957)		9,304		(180,273)		503,611		Income (loss) from continuing operations	298,145		168,037		(20,374)		24,445		(210,891)		259,362
Income (loss) from discontinued operations	Income (loss) from discontinued operations	—		—		—		—		2,011		2,011		Income (loss) from discontinued operations	—		—		—		—		—		—
Net income (loss)	Net income (loss)	$	544,530	$	163,007	$	(32,957)	$	9,304	$	(178,262)	$	505,622	Net income (loss)	$	298,145	$	168,037	$	(20,374)	$	24,445	$	(210,891)	$	259,362

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

3027

Table of Contents

For the nine months ended September 30, ~~2021:~~2022:


		Life Science		Medical Office		CCRC		Other Non-reportable		Corporate Non-segment		Total			Lab		Outpatient Medical		CCRC		Other Non-reportable		Corporate Non-segment		Total
Total revenues	Total revenues	$	531,674	$	496,978	$	352,458	$	31,869	$	—	$	1,412,979	Total revenues	$	609,620	$	541,078	$	369,062	$	16,950	$	—	$	1,536,710
Government grant income(1)	Government grant income(1)	—		—		1,412		—		—		1,412		Government grant income(1)	—		—		6,765		—		—		6,765
Less: Interest income	Less: Interest income	—		—		—		(31,869)		—		(31,869)		Less: Interest income	—		—		—		(16,950)		—		(16,950)
Healthpeak’s share of unconsolidated joint venture total revenues	Healthpeak’s share of unconsolidated joint venture total revenues	4,270		2,162		6,903		50,602		—		63,937		Healthpeak’s share of unconsolidated joint venture total revenues	5,637		2,249		—		54,918		—		62,804
Healthpeak’s share of unconsolidated joint venture government grant income	Healthpeak’s share of unconsolidated joint venture government grant income	—		—		200		810		—		1,010		Healthpeak’s share of unconsolidated joint venture government grant income	—		—		334		497		—		831
Noncontrolling interests’ share of consolidated joint venture total revenues	Noncontrolling interests’ share of consolidated joint venture total revenues	(222)		(26,704)		—		—		—		(26,926)		Noncontrolling interests’ share of consolidated joint venture total revenues	(174)		(26,732)		—		—		—		(26,906)
Operating expenses	Operating expenses	(125,108)		(164,198)		(284,739)		13		—		(574,032)		Operating expenses	(152,796)		(189,274)		(300,429)		—		—		(642,499)
Healthpeak’s share of unconsolidated joint venture operating expenses	Healthpeak’s share of unconsolidated joint venture operating expenses	(1,316)		(915)		(6,985)		(38,496)		—		(47,712)		Healthpeak’s share of unconsolidated joint venture operating expenses	(1,744)		(912)		—		(42,804)		—		(45,460)
Noncontrolling interests’ share of consolidated joint venture operating expenses	Noncontrolling interests’ share of consolidated joint venture operating expenses	66		7,714		—		—		—		7,780		Noncontrolling interests’ share of consolidated joint venture operating expenses	59		7,886		—		—		—		7,945

Adjustments to NOI(2)	Adjustments to NOI(2)	(35,197)		(7,553)		1,971		(15)		—		(40,794)		Adjustments to NOI(2)	(50,977)		(10,574)		—		120		—		(61,431)
Adjusted NOI	Adjusted NOI	374,167		307,484		71,220		12,914		—		765,785		Adjusted NOI	409,625		323,721		75,732		12,731		—		821,809
Plus: Adjustments to NOI(2)	Plus: Adjustments to NOI(2)	35,197		7,553		(1,971)		15		—		40,794		Plus: Adjustments to NOI(2)	50,977		10,574		—		(120)		—		61,431
Interest income	Interest income	—		—		—		31,869		—		31,869		Interest income	—		—		—		16,950		—		16,950
Interest expense	Interest expense	(196)		(1,985)		(5,778)		—		(113,470)		(121,429)		Interest expense	—		(4,931)		(5,629)		—		(112,971)		(123,531)
Depreciation and amortization	Depreciation and amortization	(224,958)		(187,512)		(93,702)		—		—		(506,172)		Depreciation and amortization	(227,952)		(207,563)		(95,897)		—		—		(531,412)
General and administrative	General and administrative	—		—		—		—		(72,260)		(72,260)		General and administrative	—		—		—		—		(73,161)		(73,161)
Transaction costs	Transaction costs	(11)		(295)		(1,090)		(21)		—		(1,417)		Transaction costs	(367)		(168)		(658)		—		(443)		(1,636)
Impairments and loan loss reserves		—		(1,952)		—		(2,506)		—		(4,458)
Impairments and loan loss reserves, net														Impairments and loan loss reserves, net	—		—		—		(3,678)		—		(3,678)
Gain (loss) on sales of real estate, net	Gain (loss) on sales of real estate, net	—		189,873		—		—		—		189,873		Gain (loss) on sales of real estate, net	3,856		10,894		—		(4,703)		—		10,047
Gain (loss) on debt extinguishments		—		—		—		—		(225,824)		(225,824)

Other income (expense), net	Other income (expense), net	54		(2,483)		2,456		482		5,095		5,604		Other income (expense), net	311,932		12,354		55		(13)		2,527		326,855
Less: Government grant income	Less: Government grant income	—		—		(1,412)		—		—		(1,412)		Less: Government grant income	—		—		(6,765)		—		—		(6,765)
Less: Healthpeak’s share of unconsolidated joint venture NOI	Less: Healthpeak’s share of unconsolidated joint venture NOI	(2,954)		(1,247)		(118)		(12,916)		—		(17,235)		Less: Healthpeak’s share of unconsolidated joint venture NOI	(3,893)		(1,337)		(334)		(12,611)		—		(18,175)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI	Plus: Noncontrolling interests’ share of consolidated joint venture NOI	156		18,990		—		—		—		19,146		Plus: Noncontrolling interests’ share of consolidated joint venture NOI	115		18,846		—		—		—		18,961
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	181,455		328,426		(30,395)		29,837		(406,459)		102,864		Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	544,293		162,390		(33,496)		8,556		(184,048)		497,695
Income tax benefit (expense)	Income tax benefit (expense)	—		—		—		—		1,404		1,404		Income tax benefit (expense)	—		—		—		—		3,775		3,775
Equity income (loss) from unconsolidated joint ventures	Equity income (loss) from unconsolidated joint ventures	648		549		1,484		1,836		—		4,517		Equity income (loss) from unconsolidated joint ventures	237		617		539		748		—		2,141

Income (loss) from continuing operations	Income (loss) from continuing operations	182,103		328,975		(28,911)		31,673		(405,055)		108,785		Income (loss) from continuing operations	544,530		163,007		(32,957)		9,304		(180,273)		503,611
Income (loss) from discontinued operations	Income (loss) from discontinued operations	—		—		—		—		384,569		384,569		Income (loss) from discontinued operations	—		—		—		—		2,011		2,011
Net income (loss)	Net income (loss)	$	182,103	$	328,975	$	(28,911)	$	31,673	$	(20,486)	$	493,354	Net income (loss)	$	544,530	$	163,007	$	(32,957)	$	9,304	$	(178,262)	$	505,622

______________________________________________________________________________

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

See Notes 3, 4, 5, 6, 7, and 715 for significant transactions impacting the Company’s segment assets during the periods presented.

3128

Table of Contents

NOTE 14. Supplemental Cash Flow Information

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


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Interest paid, net of capitalized interest	Interest paid, net of capitalized interest	$	138,972	$	167,062	Interest paid, net of capitalized interest	$	151,753	$	138,972
Income taxes paid (refunded)	Income taxes paid (refunded)	(2,003)		4,258		Income taxes paid (refunded)	1,258		(2,003)
Capitalized interest	Capitalized interest	26,970		17,022		Capitalized interest	42,879		26,970
Supplemental schedule of non-cash investing and financing activities:	Supplemental schedule of non-cash investing and financing activities:					Supplemental schedule of non-cash investing and financing activities:
Retained investment in connection with South San Francisco JVs transaction		293,265		—
Increase in ROU asset in exchange for new lease liability related to operating leases	Increase in ROU asset in exchange for new lease liability related to operating leases	954		15,329		Increase in ROU asset in exchange for new lease liability related to operating leases	1,160		954
Decrease in ROU asset with corresponding change in lease liability related to operating leases		—		8,410
Seller financing provided on disposition of real estate asset		—		559,745

Accrued construction costs	Accrued construction costs	160,937		150,204		Accrued construction costs	116,931		160,937
Vesting of restricted stock units and conversion of non-managing member units into common stock		803		907

Carrying value of mortgages assumed by buyer in real estate dispositions		—		143,676
Net noncash impact from the consolidation of property previously held in an unconsolidated joint venture						Net noncash impact from the consolidation of property previously held in an unconsolidated joint venture	993		—
Retained investment in connection with South San Francisco JVs transaction						Retained investment in connection with South San Francisco JVs transaction	—		293,265

Operating, investing, and financing cash flows in the Consolidated Statements of Cash Flows are reported inclusive of both cash flows from continuing operations and cash flows from discontinued operations. The following table summarizes certain cash flow information related to ~~assets classified as~~ discontinued operations (in thousands):

Nine Months Ended September 30,
2022 2021
Leasing costs, tenant improvements, and recurring capital expenditures $ 21 $ 2,609
Development, redevelopment, and other major improvements of real estate 18 5,361
Depreciation and amortization of real estate, in-place lease, and other intangibles — —


	Nine Months Ended September 30,
	2023		2022

Leasing costs, tenant improvements, and recurring capital expenditures	$	—	$	21
Development, redevelopment, and other major improvements of real estate	—		18
Depreciation and amortization of real estate, in-place lease, and other intangibles	—		—

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


		Nine Months Ended September 30,													Nine Months Ended September 30,
		2022		2021		2022		2021		2022		2021			2023		2022		2023		2022		2023		2022
		Continuing operations				Discontinued operations				Total					Continuing operations				Discontinued operations				Total
Beginning of period:	Beginning of period:													Beginning of period:
Cash and cash equivalents	Cash and cash equivalents	$	158,287	$	44,226	$	7,707	$	53,085	$	165,994	$	97,311	Cash and cash equivalents	$	72,032	$	158,287	$	—	$	7,707	$	72,032	$	165,994
Restricted cash	Restricted cash	53,454		67,206		—		17,168		53,454		84,374		Restricted cash	54,802		53,454		—		—		54,802		53,454
Cash, cash equivalents and restricted cash		$	211,741	$	111,432	$	7,707	$	70,253	$	219,448	$	181,685
Cash, cash equivalents, and restricted cash														Cash, cash equivalents, and restricted cash	$	126,834	$	211,741	$	—	$	7,707	$	126,834	$	219,448
End of period:	End of period:													End of period:
Cash and cash equivalents	Cash and cash equivalents	$	112,452	$	201,099	$	2,172	$	14,005	$	114,624	$	215,104	Cash and cash equivalents	$	63,478	$	112,452	$	—	$	2,172	$	63,478	$	114,624
Restricted cash	Restricted cash	54,500		53,699		—		3		54,500		53,702		Restricted cash	50,449		54,500		—		—		50,449		54,500
Cash, cash equivalents and restricted cash		$	166,952	$	254,798	$	2,172	$	14,008	$	169,124	$	268,806
Cash, cash equivalents, and restricted cash														Cash, cash equivalents, and restricted cash	$	113,927	$	166,952	$	—	$	2,172	$	113,927	$	169,124

Cash and Cash Equivalents

The Company maintains its cash and cash equivalents at financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per institution. As of September 30, 2023 and December 31, 2022, the account balances at certain institutions exceeded the FDIC insurance coverage.

3229

Table of Contents

NOTE 15. Variable Interest Entities

Operating Subsidiary

Subsequent to the Reorganization, Healthpeak OP is the Company’s operating subsidiary and a limited liability company that has governing provisions that are the functional equivalent of a limited partnership. The Company holds a membership interest in Healthpeak OP, acts as the managing member of Healthpeak OP, and exercises full responsibility, discretion, and control over the day-to-day management of Healthpeak OP. Because the noncontrolling interests in Healthpeak OP do not have substantive liquidation rights, substantive kick-out rights without cause, or substantive participating rights, the Company has determined that Healthpeak OP is a VIE. The Company, as managing member, has the power to direct the core activities of Healthpeak OP that most significantly affect Healthpeak OP’s performance, and through its interest in Healthpeak OP, has both the right to receive benefits from and the obligation to absorb losses of Healthpeak OP. Accordingly, the Company is the primary beneficiary of Healthpeak OP and consolidates Healthpeak OP. As the Company conducts its business and holds its assets and liabilities through Healthpeak OP, the total consolidated assets and liabilities, income (losses), and cash flows of Healthpeak OP represent substantially all of the total consolidated assets and liabilities, income (losses), and cash flows of the Company.

Unconsolidated Variable Interest Entities

At September 30, ~~2022 and~~2023, the Company had investments intwo unconsolidated VIE joint ventures. At December 31, ~~2021,~~2022, the Company had investments in: (i) two unconsolidated VIE joint ventures and (ii) marketable debt securities of one VIE. The Company determined it is not the primary beneficiary of and therefore does not consolidate these VIEs because it does not have the ability to control the activities that most significantly impact their economic performance. Except for the Company’s equity interest in the unconsolidated joint ventures (the LLC ~~investment~~Investment and Needham Land Parcel JV discussed below), it has no formal involvement in these VIEs beyond its investments.

~~Debt Securities Investment.~~ The Company holds commercial mortgage-backed securities (“CMBS”) issued by Federal Home Loan Mortgage Corporation (commonly referred to as Freddie MAC) through a special purpose entity that has been identified as a VIE because it is “thinly capitalized.” The CMBS issued by the VIE are backed by mortgage debt obligations on real estate assets. These securities are classified as held-to-maturity because the Company has the intent and ability to hold the securities until maturity.

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

Needham Land Parcel JV. In December 2021, the Company acquired a 38% interest in a ~~life science~~lab development joint venture in Needham, Massachusetts for $13 million. Current equity at risk is not sufficient to finance the joint venture’s activities. The assets and liabilities of the entity primarily consist of real estate and debt service obligations. Any assets generated by the entity may only be used to settle its contractual obligations (primarily development costs and debt service payments). See Note 7 for additional descriptions of the nature, purpose, and operating activities of this unconsolidated VIE and interests therein.

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

The classification of the related assets and liabilities and the maximum loss exposure as a result of the Company’s involvement with these VIEs at September 30, ~~2022~~2023 was as follows (in thousands):

VIE Type

Asset Type

Maximum Loss

Exposure

and ~~Carrying~~

Carrying Amount(1)

~~CMBS and~~ LLC ~~investment~~Investment

Other assets, net

~~36,775~~14,985

Needham Land Parcel JV

Investments in and advances to unconsolidated joint ventures

~~15,342~~15,733

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

As of September 30, ~~2022,~~2023, the Company had not provided, and is not required to provide, financial support through a liquidity arrangement or otherwise, to its unconsolidated VIEs, including under circumstances in which it could be exposed to further losses (e.g., cash shortfalls).

~~See Notes 3, 4, and 7 for additional descriptions~~

Table of ~~the nature, purpose, and operating activities of the Company’s unconsolidated VIEs and interests therein.~~Contents

Consolidated Variable Interest Entities

The Company’s consolidated total assets and total liabilities at September 30, ~~2022~~2023 and December 31, ~~2021~~2022 include certain assets of VIEs that can only be used to settle the liabilities of the related VIE. The VIE creditors do not have recourse to the Company.

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

~~Table of Contents~~

~~Life Science~~Lab JVs. The Company holds a ~~99%~~98% or greater ownership interest in multiple joint venture entities that own and lease ~~life science assets~~lab buildings (the ~~“Life Science~~“Lab JVs”). The ~~Life Science~~Lab JVs are VIEs as the members share in certain decisions of the entities, but substantially all of the activities are performed on behalf of the Company. The Company consolidates the ~~Life Science~~Lab JVs as the primary beneficiary because it has the ability to control the activities that most significantly impact these VIEs’ economic performance. The assets of the ~~Life Science~~Lab JVs primarily consist of leased properties (net real estate), rents receivable, and cash and cash equivalents; their obligations primarily consist of ~~debt service payments and~~ capital expenditures for the properties. Assets generated by the ~~Life Science~~Lab JVs may only be used to settle their contractual ~~obligations (primarily from capital expenditures).~~obligations. Refer to Note 11 for a discussion of certain put options associated with the ~~Life Science~~Lab JVs.

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

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

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

~~Exchange Accommodation Titleholder~~. During the three months ended June 30, 2022, the Company acquired one MOB using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a “reverse 1031 exchange”). Additionally, during the three months ended March 31, 2022, the Company acquired two MOBs using a reverse 1031 exchange. As of September 30, 2022, the acquired properties were no longer identified as a reverse 1031 exchange and were therefore released from possession of the Exchange Accommodation Titleholder (“EAT”).

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

3431

Table of Contents

Total assets and total liabilities include VIE assets and liabilities, excluding those of Healthpeak OP, as follows (in thousands):


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Assets	Assets					Assets
Buildings and improvements	Buildings and improvements	$	2,204,074	$	2,303,920	Buildings and improvements	$	2,381,624	$	2,356,905
Development costs and construction in progress	Development costs and construction in progress	162,658		82,303		Development costs and construction in progress	43,123		58,499
Land		324,444		548,168
Land and improvements						Land and improvements	310,343		324,714
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(598,285)		(551,097)		Accumulated depreciation and amortization	(647,415)		(623,244)
Net real estate	Net real estate	2,092,891		2,383,294		Net real estate	2,087,675		2,116,874

Accounts receivable, net	Accounts receivable, net	8,211		5,455		Accounts receivable, net	5,669		6,893
Cash and cash equivalents	Cash and cash equivalents	38,152		22,295		Cash and cash equivalents	21,405		20,586
Restricted cash	Restricted cash	260		114		Restricted cash	550		354
Intangible assets, net	Intangible assets, net	78,458		117,180		Intangible assets, net	61,084		73,860
Assets held for sale and discontinued operations, net		30,398		754
Assets held for sale, net						Assets held for sale, net	—		30,355
Right-of-use asset, net	Right-of-use asset, net	99,824		107,993		Right-of-use asset, net	98,012		99,376
Other assets, net	Other assets, net	66,904		62,886		Other assets, net	78,560		73,690
Total assets	Total assets	$	2,415,098	$	2,699,971	Total assets	$	2,352,955	$	2,421,988
Liabilities	Liabilities					Liabilities
Mortgage debt	Mortgage debt	$	144,533	$	144,350	Mortgage debt	$	144,804	$	144,604

Intangible liabilities, net	Intangible liabilities, net	15,926		23,909		Intangible liabilities, net	12,673		15,066
Liabilities related to assets held for sale and discontinued operations, net		2,020		1,677
Liabilities related to assets held for sale, net						Liabilities related to assets held for sale, net	—		401
Lease liability	Lease liability	98,855		99,213		Lease liability	99,551		99,039
Accounts payable, accrued liabilities, and other liabilities	Accounts payable, accrued liabilities, and other liabilities	76,685		58,440		Accounts payable, accrued liabilities, and other liabilities	60,693		68,979
Deferred revenue	Deferred revenue	26,872		21,546		Deferred revenue	48,417		39,661
Total liabilities	Total liabilities	$	364,891	$	349,135	Total liabilities	$	366,138	$	367,750

Total assets and total liabilities related to assets held for sale ~~and discontinued operations~~ include VIE assets and liabilities, excluding those of Healthpeak OP, as follows (in thousands):

September 30,
2022 December 31,
2021
Assets
Buildings and improvements $ 39,934 $ —
Development costs and construction in progress 6 —
Land 1,920 —
Accumulated depreciation and amortization (15,612) —
Net real estate 26,248 —
Accounts receivable, net — 62
Cash and cash equivalents 82 59
Intangible assets, net 215 —
Other assets, net 3,853 633
Total assets $ 30,398 $ 754
Liabilities
Accounts payable, accrued liabilities, and other liabilities $ 1,619 $ 1,677
Deferred revenue 401 —
Total liabilities $ 2,020 $ 1,677


	September 30, 2023		December 31, 2022
Assets
Buildings and improvements	$	—	$	39,934

Land and improvements	—		1,926
Accumulated depreciation and amortization	—		(15,612)
Net real estate	—		26,248



Intangible assets, net	—		215

Other assets, net	—		3,892
Total assets	$	—	$	30,355
Liabilities




Deferred revenue	$	—	$	401
Total liabilities	$	—	$	401

3532

Table of Contents

NOTE 16. Fair Value Measurements

~~Financial assets and liabilities measured at fair value on a recurring basis in the Consolidated Balance Sheets were immaterial at September 30, 2022 and December 31, 2021.~~

The table below summarizes the carrying amounts and fair values of the Company’s financial instruments either recorded or disclosed on a recurring basis (in thousands):


		September 30, 2022(3)				December 31, 2021(3)					September 30, 2023(3)				December 31, 2022(3)
		Carrying Value		Fair Value		Carrying Value		Fair Value			Carrying Value		Fair Value		Carrying Value		Fair Value
Loans receivable, net(2)	Loans receivable, net(2)	$	383,991	$	378,525	$	415,811	$	437,607	Loans receivable, net(2)	$	225,881	$	226,379	$	374,832	$	369,425
Marketable debt securities(2)	Marketable debt securities(2)	21,522		21,522		21,003		21,003		Marketable debt securities(2)	—		—		21,702		21,702
Interest rate swap instruments(2)	Interest rate swap instruments(2)	32,487		32,487		—		—		Interest rate swap instruments(2)	38,680		38,680		30,259		30,259
Interest rate cap instruments(2)		—		—		397		397

Bank line of credit and commercial paper(2)	Bank line of credit and commercial paper(2)	1,585,333		1,585,333		1,165,975		1,165,975		Bank line of credit and commercial paper(2)	424,000		424,000		995,606		995,606

Term loans(2)										Term loans(2)	496,603		496,603		495,957		495,957
Senior unsecured notes(1)	Senior unsecured notes(1)	4,657,651		4,163,646		4,651,933		5,054,747		Senior unsecured notes(1)	5,401,461		4,882,158		4,659,451		4,238,124
Mortgage debt(2)	Mortgage debt(2)	347,987		331,832		352,081		352,800		Mortgage debt(2)	342,349		317,221		346,599		330,867

_______________________________________

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

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

(3)During the nine months ended September 30, ~~2022~~2023 and year ended December 31, ~~2021,~~2022, there were no material transfers of financial assets or liabilities within the fair value hierarchy.

NOTE 17. Derivative Financial Instruments

The Company uses derivative instruments to mitigate the effects of interest rate fluctuations on specific forecasted transactions as well as recognized financial obligations or assets. Utilizing derivative instruments allows the Company to manage the risk of fluctuations in interest rates and their related potential impact on future earnings and cash flows. The Company does not use derivative instruments for speculative or trading purposes. At September 30, ~~2022,~~2023, a one percentage point increase or decrease in the underlying interest rate curve would result in a corresponding increase or decrease in the fair value of the derivative instruments by up to approximately ~~$24 million~~.

In March 2021, the Company repaid $39 million of variable rate secured debt on two SHOP assets and terminated the two associated interest rate swap instruments. Therefore, at December 31, 2021, the Company had no interest rate swap instruments.$19 million.

In April 2021, the Company executed two interest rate cap instruments on ~~its~~ $142 million of variable rate mortgage debt ~~issued~~secured by a portfolio of outpatient medical buildings (see Note 9). During the three and nine months ended September 30, 2022, the Company recognized a zero and $2 million increase, respectively, in ~~conjunction with~~ the ~~acquisition~~fair value of the ~~MOB Portfolio (see Note 3).~~

interest rate cap instruments within other income (expense), net. In April 2022, the Company terminated these interest rate cap instruments and entered into two interest rate swap instruments that are designated as cash flow hedges and mature in May 2026. In February 2023, the Company modified these two interest rate swap instruments to reflect the change in the related variable rate mortgage debt’s interest rate benchmarks from LIBOR to SOFR (see Note 9). The Company applied certain practical expedients provided by the reference rate reform ASUs in connection with the modifications to these cash flow hedges (see Note 2).

In August 2022, the Company entered into two forward-starting interest rate swap instruments on the $500 million aggregate principal amount of the ~~2022~~ Term Loan Facilities (see Note 9). The ~~forward-starting~~ interest rate swap instruments are designated as cash flow hedges.

3633

Table of Contents

The following table summarizes the Company’s interest rate swap instruments ~~as of September 30, 2022~~ (in thousands):


								Fair Value(1)											Fair Value(2)
Date Entered	Date Entered	Maturity Date	Hedge Designation	Notional Amount		Pay Rate	Receive Rate	September 30, 2022		December 31, 2021		Date Entered	Maturity Date	Hedge Designation	Notional Amount		Pay Rate(1)	Receive Rate(1)	September 30, 2023		December 31, 2022

April 2022(3)												April 2022(3)	May 2026	Cash flow	$	51,100	4.99 %	USD-SOFR w/ -5 Day Lookback + 2.50%	$	2,706	$	2,300
April 2022~~(2)~~(3)	April 2022~~(2)~~(3)	May 2026	Cash flow	$	51,100	5.08 %	1 mo. USD-LIBOR-BBA + 2.50%	$	2,444	$	—	April 2022~~(2)~~(3)	May 2026	Cash flow	91,000		4.54 %	USD-SOFR w/ -5 Day Lookback + 2.05%	4,819		4,096
April 2022(2)		May 2026	Cash flow	91,000		4.63 %	1 mo. USD-LIBOR-BBA + 2.05%	4,352		—
August 2022(3)												August 2022(3)	February 2027	Cash flow	250,000		2.60 %	1 mo. USD-SOFR CME Term	14,651		11,299
August 2022~~(2)~~(3)	August 2022~~(2)~~(3)	February 2027	Cash flow	250,000		2.60 %	1 mo. USD-SOFR CME Term	12,173		—		August 2022~~(2)~~(3)	August 2027	Cash flow	250,000		2.54 %	1 mo. USD-SOFR CME Term	16,504		12,564
August 2022(2)		August 2027	Cash flow	250,000		2.54 %	1 mo. USD-SOFR CME Term	13,518		—

_____________________________

(1)AtPay rates and receive rates are as of September 30, 2023. As of December 31, 2022, the interest rate swap instrument with a $51 million notional amount had a pay rate of 5.08% and a receive rate of 1 mo. USD-LIBOR-BBA + 2.50%. As of December 31, 2022, the interest rate swap instrument with a $91 million notional amount had a pay rate of 4.63% and a receive rate of 1 mo. USD-LIBOR-BBA + 2.05%.

(2)At each of September 30, 2023 and December 31, 2022, the interest rate swap instruments were in an asset position. Derivative assets are recorded at fair value in other assets, net on the Consolidated Balance Sheets.

~~(2)~~(3)Represents interest rate swap instruments that hedge fluctuations in interest payments on variable rate debt by converting the interest rates to fixed interest rates. The changes in fair value of designated derivatives that qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

~~The following table summarizes the Company’s interest rate cap instruments as of September 30, 2022 (in thousands):~~

Fair Value(1)
Date Entered Maturity Date Hedge Designation Notional Amount Strike Rate Index September 30,
2022 December 31,
2021
April 2021(2)
May 2024 Non-designated $ 142,100 2.00 % 1 mo. USD-LIBOR-BBA $ — $ 397

~~_____________________________~~

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

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

During the three and nine months ended September 30, 2022, the Company recognized a zero and $2 million increase, respectively, in the fair value of the interest rate cap instruments within other income (expense), net.

NOTE 18. Accounts Payable, Accrued Liabilities, and Other Liabilities

The following table summarizes the Company’s accounts payable, accrued liabilities, and other liabilities (in thousands):


	September 30, 2023		December 31, 2022
Refundable entrance fees	$	254,986	$	268,972
Accrued construction costs	116,931		178,626
Accrued interest	46,256		59,291
Other accounts payable and accrued liabilities(1)	269,477		265,596
Accounts payable, accrued liabilities, and other liabilities	$	687,650	$	772,485

(1)As of September 30, 2023 and December 31, 2022, includes $9 million and $15 million, respectively,of severance-related obligations associated with the departure of a former CEO in October 2022 that had not yet been paid.

NOTE 19. Deferred Revenue

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

September 30,
2022 December 31,
2021
Refundable entrance fees(1)
$ 271,675 $ 288,409
Accrued construction costs 160,937 179,995
Accrued interest 35,832 59,342
Other accounts payable and accrued liabilities 264,451 227,638
Accounts payable, accrued liabilities, and other liabilities $ 732,895 $ 755,384


	September 30, 2023		December 31, 2022
Nonrefundable entrance fees(1)	$	553,114	$	518,573
Other deferred revenue(2)	326,060		325,503
Deferred revenue	$	879,174	$	844,076

(1)AtDuring the three and nine months ended September 30, ~~2022 and December 31, 2021, unamortized~~2023, the Company collected nonrefundable entrance ~~fee liabilities were $512~~fees of $36 million and ~~$496~~$96 million, respectively, ~~which are recorded within deferred revenue on the Consolidated Balance Sheets.~~and recognized amortization of $21 million and $61 million, respectively. During the three and nine months ended September 30, 2022, the Company collected nonrefundable entrance fees of $24 million and $74 million, respectively, and recognized amortization of $20 million and$58 million, respectively. During the three and nine months ended September 30, 2021, the Company collected nonrefundable entrance fees of $25 million and $63 million, respectively, and recognized amortization of $19 million and $57 $58 million, respectively. The amortization of nonrefundable entrance fees is included within resident fees and services on the Consolidated Statements of Operations.

(2)

~~Departure~~Other deferred revenue is primarily comprised of ~~Executives~~

~~On October 6,~~prepaid rent, deferred rent, and tenant-funded tenant improvements owned by the Company. During the three and nine months ended September 30, 2023, the Company recognized amortization related to other deferred revenue of $19 million and $50 million, respectively. During the three and nine months ended September 30, 2022, the Company recognized amortization related to other deferred revenue of $12 million and ~~Thomas M. Herzog mutually agreed that Mr. Herzog would step down from his position as Chief Executive Officer~~$32 million, respectively. The amortization of other deferred revenue is included in rental and ~~from~~related revenues on the ~~board~~Consolidated Statements of directors of the Company, effective immediately. On November 1, 2022, the Company and Troy E. McHenry mutually agreed that Mr. McHenry would step down from his position as Chief Legal Officer and General Counsel, effective immediately. In connection with these departures and the related release agreements, the Company expects to recognize total severance-related charges of approximately $30 million in the fourth quarter of 2022.Operations.

3734

Table of Contents

NOTE 20. Subsequent Event

On October 29, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Alpine Sub, LLC, a wholly owned subsidiary of the Company, Alpine OP Sub, LLC, a wholly owned subsidiary of Healthpeak OP, Physicians Realty Trust (“Physicians Realty”), and Physicians Realty L.P. (the “Physicians Partnership”), pursuant to which, among other things, and through a series of transactions, (i) each outstanding common share of Physicians Realty (other than Physicians Realty common shares to be canceled in accordance with the Merger Agreement), will be converted into the right to receive0.674shares of Company common stock, and (ii) each outstanding common unit of the Physicians Partnership will be converted into common units in the successor entity to the Physicians Partnership equal to the same exchange ratio. Following the transactions contemplated in the Merger Agreement, the successor entities to Physicians Realty and the Physicians Partnership will be direct and indirect subsidiaries ofHealthpeak OP, respectively. Consummation of the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of customary closing conditions, including the approval of the stockholders of the Company and the shareholders of Physicians Realty.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

On February 10, 2023, we completed our corporate reorganization (the “Reorganization”) into an umbrella partnership REIT (“UPREIT”). Substantially all of our business is conducted through Healthpeak OP, LLC (“Healthpeak OP”). We are the managing member of Healthpeak OP and do not have material assets or liabilities, other than through our investment in Healthpeak OP.

All references in this report to “Healthpeak,” the “Company,” “we,” ~~“us”~~“us,” or “our” mean Healthpeak Properties, Inc., together with its consolidated subsidiaries. Unless the context suggests otherwise, references to “Healthpeak Properties, Inc.” mean the parent company without its subsidiaries.

Cautionary Language Regarding Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q that are not historical factual statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, among other things, statements regarding our and our officers’ intent, belief or expectation as identified by the use of words such as “may,” “will,” “project,” “expect,” “believe,” “intend,” “anticipate,” “seek,” “target,” “forecast,” “plan,” “potential,” “estimate,” “could,” “would,” “should” and other comparable and derivative terms or the negatives thereof. Forward-looking statements reflect our current expectations and views about future events and are subject to risks and uncertainties that could cause actual results, including our future financial condition and results of operations, to differ materially from those expressed or implied by any forward-looking statements. You are urged to carefully review the disclosures we make concerning risks and uncertainties that may affect our business and future financial performance.

Forward-looking statements are based on certain assumptions and analysis made in light of our experience and perception of historical trends, current conditions and expected future developments as well as other factors that we believe are appropriate under the circumstances. While forward-looking statements reflect our good faith belief and assumptions we believe to be reasonable based upon current information, we can give no assurance that our expectations or forecasts will be attained. Further, we cannot guarantee the accuracy of any such forward-looking statement contained in this Quarterly Report on Form 10-Q.

As more fully set forth under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, in Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q, risks and uncertainties that may cause our actual results to differ materially from the expectations contained in the forward-looking statements include, among other things:

•~~epidemics, pandemics~~macroeconomic trends, including inflation, interest rates, labor costs, and unemployment;

•risks associated with the Mergers (as defined below), including our ability to consummate the Mergers on the proposed terms or on the anticipated timeline, or at all,potential loss or disruption of current and prospective commercial relationships due to the uncertainties about the Mergers, potential uncertainty experienced by our current and prospective employees about their future roles with the combined company following the Mergers, the occurrence of any event, change or other ~~infectious diseases, including~~circumstances that could give rise to the ~~coronavirus disease~~termination of the Mergers, any unanticipated expenditures or difficulties related to the Mergers, and the outcome of legal proceedings instituted against us, our Board of Directors, and others related to the Mergers;

•our ability to integrate the operations of the Company and Physicians Realty Trust (“~~Covid”~~Physicians Realty”), successfully and ~~health~~realize the anticipated synergies and ~~safety measures intended to reduce their spread, and how quickly and to what extent normal economic and operating conditions can resume~~other benefits of the Mergers or do so within the ~~markets in which we operate;~~anticipated time frame;

•the ability of our existing and future tenants, operators, and borrowers to conduct their respective businesses in a manner ~~sufficient to maintain or increase their revenues and manage their expenses in order to generate~~that generates sufficient income to make rent and loan payments to ~~us and our ability to recover investments made, if applicable, in their operations;~~

•~~increased competition, operating costs, and market changes affecting our tenants, operators, and borrowers;~~us;

•the financial condition of our tenants, operators, and borrowers, including potential bankruptcies and downturns in their businesses, and their legal and regulatory proceedings;

•our concentration of real estate investments in the healthcare property sector, which makes us more vulnerable to a downturn in a specific sector than if we invested inacross multiple ~~industries and exposes us to~~ sectors;

•the ~~risks inherent in illiquid~~illiquidity of real estate investments;

•our ability to identify and secure new or replacement tenants and ~~operators and the potential renovation costs and regulatory approvals associated therewith;~~operators;

•our property development, redevelopment, and tenant improvement activity risks, including project abandonments, project delays, and lower profits than expected;

•changes within the ~~life science industry;~~industries in which we operate;

•~~high levels of~~significant regulation, funding requirements, ~~expense~~ and uncertainty faced by our ~~life science~~lab tenants;

•the ability of the hospitals on whose campuses our outpatient medical ~~office~~ buildings ~~(“MOBs”)~~ are located and their affiliated healthcare systems to remain competitive or financially viable;

Table of Contents

•our ability to develop, maintain, or expand ~~our~~ hospital and health system client relationships;

•operational risks associated with third party management contracts, including the additional regulation and liabilities of our properties operated through structures permitted by the Housing and Economic Recovery Act of 2008, which includes most of the provisions previously proposed in the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”);

~~Table of Contents~~

•economic conditions, natural disasters, weather, and other conditions that negatively affect geographic areas ~~from which~~where we ~~recognize a greater percentage of our revenue;~~have concentrated investments;

•uninsured or underinsured losses, which could result in significant losses and/or performance declines by us or our tenants and operators;

•our investments in joint ventures and unconsolidated entities, including our lack of sole decision making authority and our reliance on our partners’ financial condition and continued cooperation;

•our use of fixed rent escalators, contingent rent provisions, and/or rent escalators based on the Consumer Price Index;

•competition for suitable healthcare properties to grow our investment portfolio;

•our ability to foreclose or exercise rights on collateral securing our real estate-related loans;

•investment of substantial resources and time in transactions that are not consummated;

•our ability to ~~make material acquisitions and~~ successfully integrate ~~them;~~or operate acquisitions;

•the potential impact on us and our tenants, operators, and borrowers from litigation matters, including rising liability and insurance costs;

•~~an increase in~~environmental compliance costs and liabilities associated with our real estate investments;

•epidemics, pandemics, or other infectious diseases, including the coronavirus disease (“Covid”), and health and safety measures intended to reduce their spread;

•the loss or limited availability of our key personnel;

•our reliance on information technology systems and the potential impact of system failures, disruptions, or breaches;

•increased borrowing costs, including due to ~~higher~~rising interest rates;

•cash available for distribution to stockholders and our ability to make dividend distributions at expected levels;

•the availability of external capital on acceptable terms or at all, including due to rising interest rates, changes in our credit ratings and the value of our common stock, volatility or uncertainty in the capital markets, and other factors;

•~~cash available for distribution to stockholders and our ability to make dividend distributions at expected levels;~~

•our ability to manage our indebtedness level and covenants in and changes to the terms of such indebtedness;

•~~changes in global, national and local economic and~~bank failures or other ~~conditions;~~

•~~laws or regulations prohibiting eviction of our tenants;~~events affecting financial institutions;

•the failure of our tenants, operators, and borrowers to comply with federal, state, and local laws and regulations, including resident health and safety requirements, as well as licensure, certification, and inspection requirements;

•required regulatory approvals to transfer our senior housing properties;

•compliance with the Americans with Disabilities Act and fire, safety, and other regulations;

•laws or regulations prohibiting eviction of our tenants;

•the requirements of, or changes to, governmental reimbursement programs such as Medicare or Medicaid;

•legislation to address federal government operations and ~~administration~~administrative decisions affecting the Centers for Medicare and Medicaid Services;

•our participation in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) Provider Relief Fund and other Covid-related stimulus and relief programs;

•~~provisions of Maryland law and our charter that could prevent a transaction that may otherwise be in the interest of our stockholders;~~

•~~environmental compliance costs and liabilities associated with our real estate investments;~~

•our ability to maintain our qualification as a real estate investment trust (“REIT”);

•changes to U.S. federal income tax laws, and potential deferred and contingent tax liabilities from corporate acquisitions;

•calculating non-REIT tax earnings and profits distributions;

•ownership limits in our charter that restrict ownership in our stock;

•~~the loss or limited availability of our key personnel;~~ and

•provisions of Maryland law and our ~~reliance on information technology systems and~~charter that could prevent a transaction that may otherwise be in the ~~potential impact~~interest of ~~system failures, disruptions or breaches.~~our stockholders.

Except as required by law, we do not undertake, and hereby disclaim, any obligation to update any forward-looking statements, which speak only as of the date on which they are made.

3937

Table of Contents

Overview

The information set forth in this Item 2 is intended to provide readers with an understanding of our financial condition, changes in financial condition and results of operations. We will discuss and provide our analysis in the following order:

•Executive Summary

•Market Trends and Uncertainties

•Overview of Transactions

•Dividends

•Results of Operations

•Liquidity and Capital Resources

•Non-GAAP Financial Measures Reconciliations

•Critical Accounting Estimates ~~and Recent Accounting Pronouncements~~

Executive Summary

Healthpeak Properties, Inc. is a Standard & Poor’s (“S&P”) 500 company that acquires, develops, owns, leases, and manages healthcare real estate across the United States (“U.S.”). Our company was originally founded in 1985. As noted above, we completed our Reorganization on February 10, 2023, and following that date, we hold substantially all of our assets and conduct our operations through the operating subsidiary, Healthpeak OP, LLC, a consolidated subsidiary of which we are the managing member. We are a Maryland corporation and qualify as a self-administered REIT. Our corporate headquarters are located in Denver, Colorado, and we have additional offices in California, Tennessee, and Massachusetts.

During 2020, we began the process of disposing of our senior housing triple-net and senior housing operating property (“SHOP”) portfolios. As of December 31, 2020, we concluded that the planned dispositions represented a strategic shift that had and will have a major effect on our operations and financial results and, therefore, the assets are classified as discontinued operations in all periods presented herein. In September 2021, we successfully completed the disposition of both portfolios. See Note 4Our strategy is to ~~the Consolidated Financial Statements for further information regarding discontinued operations.~~

~~In conjunction with the disposal of our senior housing triple-net and SHOP portfolios, we focused our strategy on investing~~invest in a diversified portfolio of high-quality healthcare properties across our three core asset classes of ~~life science,~~lab, outpatient medical, ~~office,~~ and continuing care retirement community (“CCRC”) real estate. Under the ~~life science~~lab and outpatient medical ~~office~~ segments, we invest through the acquisition, development, and management of ~~life science facilities, MOBs,~~lab buildings, outpatient medical buildings, and hospitals. Under the CCRC segment, our properties are operated through RIDEA structures. We have other non-reportable segments that are comprised primarily of loans receivable, ~~marketable debt securities, and~~ an interest in an unconsolidated joint venture that owns 19 senior housing assets (our “SWF SH JV”)., and marketable debt securities. These non-reportable segments have been presented on an aggregate basis herein.

At September 30, ~~2022,~~2023, our portfolio of investments, including properties in our unconsolidated joint ventures, consisted of interests in ~~480~~475 properties. The following table summarizes information for our reportable and other non-reportable segments ~~excluding discontinued operations,~~ for the three months ended September 30, ~~2022~~2023 (dollars in thousands):


Segment	Segment	Total Portfolio Adjusted NOI(1)		Percentage of Total Portfolio Adjusted NOI		Number of Properties	Segment	Total Portfolio Adjusted NOI(1)		Percentage of Total Portfolio Adjusted NOI		Number of Properties
Life science		$	139,539	51	%	149
Medical office		109,678		40	%	297
Lab							Lab	$	157,295	51.5	%	146
Outpatient medical							Outpatient medical	113,960		37.3	%	295
CCRC	CCRC	21,882		8	%	15	CCRC	29,035		9.5	%	15
Other non-reportable	Other non-reportable	4,316		1	%	19	Other non-reportable	5,106		1.7	%	19
Totals		$	275,415	100	%	480
								$	305,396	100	%	475

(1)~~Total Portfolio metrics include results of operations from disposed properties through the disposition date.~~ See “Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for additional information regarding Adjusted NOI and see Note 13 to the Consolidated Financial Statements for a reconciliation of Adjusted NOI by segment to net income (loss).

For a description of our significant activities during ~~2022,~~2023, see “Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview of Transactions” in this report.

In 2020, we concluded that the dispositions of our senior housing triple-net and senior housing operating property (“SHOP”) portfolios represented a strategic shift that had a major effect on our operations and financial results. Therefore, the results of senior housing triple-net and SHOP assets are classified as discontinued operations in all periods presented herein. See Note 4 to the Consolidated Financial Statements for further information regarding discontinued operations.

Table of Contents

Business Strategy

We invest in and manage our real estate portfolio for the long-term to maximize benefit to our stockholders and support the growth of our dividends. Our strategy consists of four core elements:

(i)Our real estate: Our portfolio is grounded in high-quality properties in desirable locations. We focus on three purposely selected private pay asset classes—~~life science,~~lab, outpatient medical, ~~office,~~ and continuing care retirement community—to provide stability through inevitable market cycles.

(ii)Our financials: We maintain a strong investment-grade balance sheet with ample liquidity as well as long-term fixed-rate debt financing with staggered maturities to reduce our exposure to interest rate volatility and refinancing risk.

(iii)Our partnerships: We work with leading pharmaceutical and biotechnology companies, healthcare companies, operators, and service providers and are responsive to their space and capital needs. We provide high-quality property management services to encourage tenants to renew, expand, and relocate into our properties, which drives increased occupancy, rental rates, and property values.

(iv)Our platform: We have a people-first culture that we believe attracts, develops, and retains top talent. We continually strive to create and maintain an industry-leading platform, with systems and tools that allow us to effectively and efficiently manage our assets and investment activity.

Market Trends and Uncertainties

Our operating results have been and will continue to be impacted by global and national economic and market conditions generally and by the local economic conditions where our properties are ~~located, as well as by the Covid pandemic.~~located.

Rising interest rates, high inflation, supply chain disruptions, ongoing geopolitical tensions, and increased volatility in public and private equity and fixed income markets have led to increased costs and limited the availability of capital. ~~To the extent our~~Our tenants orand operators ~~experience~~have also experienced increased costs, orliquidity constraints, and financing difficulties due to the foregoing macroeconomic and market conditions, ~~they may~~which could cause them to be unable or unwilling to make payments or perform their obligations when due. In addition, increased interest rates ~~could affect~~have affected our borrowing costs and the fair value of our fixed rate instruments.

We have also ~~seen~~been affected by significant inflation in construction costs over the past ~~15-21 months,~~couple of years, which, ~~may,~~ together with rising costs of capital, have negatively ~~affect~~affected the expected yields on our development and redevelopment projects. In addition, labor shortages and global supply chain disruptions, including procurement delays and long lead times on certain materials, have adversely impacted and could continue to adversely impact the scheduled completion and/or costs of these projects.

Further, the full, long-term economic impact of the Covid pandemic on the operations of our CCRC communities and the senior housing facilities owned by our SWF SH JV remains uncertain. Many factors cannot be predicted and will remain unpredictable, including the impact, duration, and severity of new variants and outbreaks. In addition, our tenants, operators, and borrowers have experienced significant cost increases as a result of increased health and safety measures, staffing shortages, increased governmental regulation and compliance, vaccine mandates, and other operational changes necessitated either directly or indirectly by the Covid pandemic, as well as due to current inflationary pressures. Labor costs in particular have increased as a result of higher staffing hours, increased hourly wages and bonuses, greater overtime, and increased usage of contract labor. We anticipate that many of these expenses will remain at these higher levels even after the pandemic passes, and are likely to reduce margins in the business.

We continuously monitor the effects of domestic and global events, including but not limited to inflation, labor shortages, supply chain matters, rising interest rates, and ~~other current and expected impacts of~~distress in the ~~Covid pandemic~~financial markets on our operations and financial position, as well as on the operations and financial position of our tenants, operators, and borrowers, to ensure that we remain responsive and adaptable to the dynamic changes in our operating environment.

A discussion of potential long-term changes in the industry are more fully set forth under Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Covid Update” in our Annual Report on Form 10-K for the year ended December 31, 2021.

See Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 and Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 for additional discussion of the risks posed by macroeconomic conditions, ~~and the Covid pandemic,~~ as well as the uncertainties we and our tenants, operators, and borrowers may face as a result.

4139

Table of Contents

Overview of Transactions

~~South San Francisco Joint Ventures~~As of February 10, 2023, we are structured as an UPREIT. This structure provides prospective sellers an alternative for disposing of property that has appreciated in value in a tax-deferred manner to Healthpeak OP and aligns our corporate structure with other publicly traded U.S. real estate investment trusts. Following the Reorganization, Healthpeak OP is the borrower under, and we are the guarantor of, all of the unsecured debt, which includes the Revolving Facility, Term Loan Facilities (each as defined below), commercial paper program, and senior unsecured notes. Our guarantee of the senior unsecured notes is full and unconditional and applicable to existing and future senior unsecured notes. The Reorganization did not have a material impact on our financial position, consolidated financial statements, outstanding debt securities, material debt facilities, or business operations.

On August 1, 2022, we sold a 30% interest in seven life science assets in South San Francisco, California (the “South San Francisco JVs”) to a sovereign wealth fund (“SWF Partner”) for cash of $126 million.

~~Concurrently,~~October 29, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Alpine Sub, LLC, one of our wholly owned subsidiaries, Alpine OP Sub, LLC, a ~~master equity transaction agreement~~wholly owned subsidiary of Healthpeak OP, Physicians Realty, and Physicians Realty L.P. (the “Physicians Partnership”), pursuant to which, among other things, and through a series of transactions, (i) each outstanding common share of Physicians Realty (other than Physicians Realty common shares to be canceled in accordance with the ~~SWF Partner that provides us~~Merger Agreement), will be converted into the ~~opportunity~~right to ~~sell interests~~receive0.674shares of upour common stock, and (ii) each outstanding common unit of the Physicians Partnership will be converted into common units in the successor entity to ~~30%~~the Physicians Partnership equal to the same exchange ratio. Following the transactions contemplated in ~~certain future development projects we own.~~the Merger Agreement, the successor entities to Physicians Realty and the Physicians Partnership will be direct and indirect subsidiaries ofHealthpeak OP, respectively. Consummation of the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of customary closing conditions, including the approval of our stockholders and the shareholders of Physicians Realty.

~~67 Smith Place~~Real Estate Transactions

•In January ~~2022,~~ 2023, we ~~closed~~sold two lab buildings in Durham, North Carolina for $113 million.

•In January 2023, we acquired a ~~life science acquisition~~lab land parcel in Cambridge, Massachusetts for ~~$72~~$9 million.

~~Vista Sorrento Phase II~~

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

~~Webster MOB Portfolio~~

•In March ~~2022,~~2023, we sold two outpatient medical buildings for $32 million.

•In April 2023, we acquired ~~a portfolio~~the remaining 80% interest in one of ~~two MOBs~~the outpatient medical buildings in ~~Houston, Texas~~the Ventures IV unconsolidated joint venture for ~~$43~~$4 million.

~~Northwest Medical Plaza~~

~~In May 2022, we acquired one MOB in Bentonville, Arkansas for $26 million.~~

~~Other Real Estate Transactions~~Development Activities

•During the nine months ended September 30, ~~2022, we sold~~2023, the following projects were placed in service:(i) one ~~life science facility~~lab development project with total costs of $171 million, (ii) a portion of one lab redevelopment project with total costs of $43 million, (iii) a portion of one lab development project with total costs of $32 million, (iv) three outpatient medical redevelopment projects with aggregate costs of$25 million, (v) one lab redevelopment building held in ~~Utah for~~one of our unconsolidated South San Francisco JVs of which our share of total project costs was $15 million, (vi) one lab redevelopment project with total costs of $14 ~~million.~~

•~~During the nine months ended September 30, 2022, we sold our remaining hospital classified as a direct financing lease (“DFL”) for $68 million.~~

•~~During the nine months ended September 30, 2022, we sold five MOBs~~million, and (vii) one ~~MOB land parcel for $36~~CCRC redevelopment project with total costs of $7 million.

Financing Activities

•In ~~April 2022,~~January 2023, we ~~terminated our existing interest rate cap instruments associated with $142~~completed a public offering of $400 million aggregate principal amount of ~~variable rate mortgage debt and entered into two interest rate swap instruments that are designated as cash flow hedges and mature in May 2026.~~5.25% senior unsecured notes due 2032.

•In ~~July 2022,~~May 2023, we ~~increased the maximum~~completed a public offering of $350 million aggregate ~~face or~~ principal amount ~~that can be~~of 5.25% senior unsecured notes due 2032, which constituted an additional issuance of, and are treated as a single series with, the $400 million of senior unsecured notes due 2032 issued in January 2023.

Other Activities

•In February 2023, we received a partial principal repayment of $102 million on one secured loan with an original maturity of January 2023. The remaining $48 million outstanding ~~at any one time under~~was refinanced with us, extending the ~~commercial paper program from $1.5 billion~~maturity date to ~~$2.0 billion.~~January 2024 and converting the fixed interest rate on the loan to a variable rate based on SOFR (as defined below) plus a margin.

•In ~~August 2022,~~February 2023, we executed a term loan agreement that provides for two senior unsecured delayed draw term loans in an aggregate principal amount of up to $500 million (the “2022 Term Loan Facilities”). As of September 30, 2022, we had no borrowings outstanding under the 2022 Term Loan Facilities. In October 2022, the entiretyreceived full repayment of the ~~$500~~outstanding balance of one $35 million ~~under the 2022 Term Loan Facilities was drawn.~~secured loan.

•In ~~August 2022,~~April 2023, we ~~entered into two forward-starting interest rate swap instruments that are designated as cash flow hedges that effectively establish a fixed interest rate for~~received full repayment of the ~~underlying 2022 Term Loan Facilities.~~outstanding balance of one $14 million secured loan.

•In ~~August 2022, our Board~~May 2023, we received full repayment of Directors approved a share repurchase program under which we may acquire shares of our common stock in the open market up to an aggregate purchase price of $500 million (the “Share Repurchase Program”). During the three and nine months ended September 30, 2022, we repurchased 2.1 million shares of our common stock under our Share Repurchase Program at a weighted average price of $27.16 per share for a total of $56 million.

~~Development Activities~~

•~~At September 30, 2022, we had five life science development projects in process~~two outstanding secured loans with an aggregate ~~total estimated cost~~balance of ~~approximately$1.03 billion and one MOB development project in process with a total estimated cost of approximately $33~~$12 million.

•~~During~~In October 2023, we received full repayment of the nine months ended September 30, 2022, the following projects were placed in service: (i) three MOB development projects with total costs incurred of $58 million, (ii) two MOB redevelopment projects with total costs incurred of $19 million, (iii) four life science development projects with total costs incurred of $317 million, (iv) one life science redevelopment project with total costs incurred of $60 million, and (v) a portionoutstanding balance of one ~~life science development project with total costs incurred of $40 million.~~$21 million secured loan.

4240

Table of Contents

Dividends

The following table summarizes our common stock cash dividends declared in ~~2022:~~2023:

Declaration Date

Record Date

Amount
Per Share

Dividend
Payment Date

~~January 27~~February 1

February 119

0.30

February 2223

April 2827

May 98

0.30

May 2019

July 2827

August 87

0.30

August 1918

October 2729

November 7

0.30

November 1820

Results of Operations

We evaluate our business and allocate resources among our reportable business segments: (i) ~~life science,~~lab, (ii) outpatient medical, ~~office,~~ and (iii) CCRC. Under the ~~life science~~lab and outpatient medical ~~office~~ segments, we invest through the acquisition, development, and management of ~~life science facilities, MOBs,~~lab buildings, outpatient medical buildings, and ~~hospitals, which generally requires a greater level of property management.~~hospitals. Our CCRCs are operated through RIDEA structures. We have other non-reportable segments that are comprised primarily of: (i) an interest in our unconsolidated SWF SH JV, (ii) loans receivable, and (iii) marketable debt securities. These non-reportable segments have been presented on an aggregate basis herein. We evaluate performance based upon property adjusted net operating income (“Adjusted NOI” or “Cash NOI”) in each segment. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 filed with the U.S. Securities and Exchange Commission (“SEC”), as updated by Note 2 to the Consolidated Financial Statements herein.

Non-GAAP Financial Measures

Net Operating Income

NOI and Adjusted NOI are non-U.S. generally accepted accounting principles (“GAAP”) supplemental financial measures used to evaluate the operating performance of real estate. NOI is defined as real estate revenues (inclusive of rental and related revenues, resident fees and services, income from direct financing leases, and government grant income and exclusive of interest income), less property level operating expenses; NOI excludes all other financial statement amounts included in net income (loss) as presented in Note 13 to the Consolidated Financial Statements. Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, termination fees, actuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee income and expense. NOI and Adjusted NOI are calculated as NOI and Adjusted NOI from consolidated properties, plus our share of NOI and Adjusted NOI from unconsolidated joint ventures (calculated by applying our actual ownership percentage for the period), less noncontrolling interests’ share of NOI and Adjusted NOI from consolidated joint ventures (calculated by applying our actual ownership percentage for the period). Management utilizes its share of NOI and Adjusted NOI in assessing its performance as we have various joint ventures that contribute to its performance. We do not control our unconsolidated joint ventures, and our share of amounts from unconsolidated joint ventures do not represent our legal claim to such items. Our share of NOI and Adjusted NOI should not be considered a substitute for, and should only be considered together with and as a supplement to, our financial information presented in accordance with GAAP.

Adjusted NOI is oftentimes referred to as “Cash NOI.” Management believes NOI and Adjusted NOI are important supplemental measures because they provide relevant and useful information by reflecting only income and operating expense items that are incurred at the property level and present them on an unlevered basis. We use NOI and Adjusted NOI to make decisions about resource allocations, to assess and compare property level performance, and to evaluate our Same-Store (“SS”) performance, as described below. We believe that net income (loss) is the most directly comparable GAAP measure to NOI and Adjusted NOI. NOI and Adjusted NOI should not be viewed as alternative measures of operating performance to net income (loss) as defined by GAAP since they do not reflect various excluded items. Further, our definitions of NOI and Adjusted NOI may not be comparable to the definitions used by other REITs or real estate companies, as they may use different methodologies for calculating NOI and Adjusted NOI. For a reconciliation of NOI and Adjusted NOI to net income (loss) by segment, refer to Note 13 to the Consolidated Financial Statements.

Operating expenses generally relate to leased outpatient medical ~~office~~ and ~~life science properties,~~lab buildings, as well as CCRC facilities. We generally recover all or a portion of our leased outpatient medical ~~office~~ and ~~life science~~lab property expenses through tenant recoveries. We present expenses as operating or general and administrative based on the underlying nature of the expense.

4341

Table of Contents

Same-Store

Same-Store NOI and Adjusted (Cash) NOI information allows us to evaluate the performance of our property portfolio under a consistent population by eliminating changes in the composition of our portfolio of properties, excluding properties within the other non-reportable segments. We include properties from our consolidated portfolio, as well as properties owned by our unconsolidated joint ventures in Same-Store NOI and Adjusted NOI (see NOI definition above for further discussion regarding our use of ~~properties.~~pro-rata share information and its limitations). Same-Store NOI and Adjusted NOI exclude government grant income under the CARES Act. Same-Store Adjusted NOI also excludes amortization of deferred revenue from tenant-funded improvements and certain non-property specific operating expenses that are allocated to each operating segment on a consolidated basis.

Properties are included in Same-Store once they are stabilized for the full period in both comparison periods. Newly acquired operating assets are generally considered stabilized at the earlier of lease-up (typically when the tenant(s) control(s) the physical use of at least 80% of the space and rental payments have commenced) or 12 months from the acquisition date. Newly completed developments and redevelopments are considered stabilized at the earlier of lease-up or 24 months from the date the property is placed in service. Properties that experience a change in reporting structure are considered stabilized after 12 months in operations under a consistent reporting structure. A property is removed from Same-Store when it is classified as held for sale, sold, placed into redevelopment, experiences a casualty event that significantly impacts operations, a change in reporting structure or operator transition has been agreed to, or a significant tenant relocates from a Same-Store property to a non Same-Store property and that change results in a corresponding increase in revenue. We do not report Same-Store metrics for our other non-reportable segments. For a reconciliation of Same-Store to total portfolio Adjusted NOI and other relevant disclosures by segment, refer to our Segment Analysis below.

Funds From Operations (“FFO”)

FFO encompasses Nareit FFO and FFO as Adjusted, each of which is described in detail below. We believe FFO applicable to common shares, diluted FFO applicable to common shares, and diluted FFO per common share are important supplemental non-GAAP measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets utilizes straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. The term FFO was designed by the REIT industry to address this issue.

Nareit FFO. FFO, as defined by the National Association of Real Estate Investment Trusts (“Nareit”), is net income (loss) applicable to common shares (computed in accordance with GAAP), excluding gains or losses from sales of depreciable property, including any current and deferred taxes directly associated with sales of depreciable property, impairments of, or related to, depreciable real estate, plus real estate and other real estate-related depreciation and amortization, and adjustments to compute our share of Nareit FFO and FFO as Adjusted (see below) from joint ventures. Adjustments for joint ventures are calculated to reflect our pro rata share of both our consolidated and unconsolidated joint ventures. We reflect our share of Nareit FFO for unconsolidated joint ventures by applying our actual ownership percentage for the period to the applicable reconciling items on an entity by entity basis. For consolidated joint ventures in which we do not own 100%, we reflect our share of the equity by adjusting our Nareit FFO to remove the third party ownership share of the applicable reconciling items based on actual ownership percentage for the applicable periods. Our pro rata share information is prepared on a basis consistent with the comparable consolidated amounts, is intended to reflect our proportionate economic interest in the operating results of properties in our portfolio and is calculated by applying our actual ownership percentage for the period. We do not control the unconsolidated joint ventures, and the pro rata presentations of reconciling items included in Nareit FFO do not represent our legal claim to such items. The joint venture members or partners are entitled to profit or loss allocations and distributions of cash flows according to the joint venture agreements, which provide for such allocations generally according to their invested capital.

The presentation of pro rata information has limitations, which include, but are not limited to, the following: (i) the amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage determined when applying the equity method of accounting and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses and (ii) other companies in our industry may calculate their pro rata interest differently, limiting the usefulness as a comparative measure. Because of these limitations, the pro rata financial information should not be considered independently or as a substitute for our financial statements as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP financial statements, using the pro rata financial information as a supplement.

Nareit FFO does not represent cash generated from operating activities in accordance with GAAP, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income (loss). We compute Nareit FFO in accordance with the current Nareit definition; however, other REITs may report Nareit FFO differently or have a different interpretation of the current Nareit definition from ours.

4442

Table of Contents

FFO as Adjusted. In addition, we present Nareit FFO on an adjusted basis before the impact of non-comparable items including, but not limited to, transaction-related items, other impairments (recoveries) and other losses (gains), restructuring and ~~severance related~~severance-related charges, prepayment costs (benefits) associated with early retirement or payment of debt, litigation costs (recoveries), casualty-related charges (recoveries)~~, foreign currency remeasurement losses (gains)~~, deferred tax asset valuation allowances, and changes in tax legislation (“FFO as Adjusted”). These adjustments are net of tax, when applicable. Transaction-related items include transaction expenses and gains/charges incurred as a result of mergers and acquisitions and lease amendment or termination activities. Prepayment costs (benefits) associated with early retirement of debt include the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of debt. Other impairments (recoveries) and other losses (gains) include interest income associated with early and partial repayments of loans receivable and other losses or gains associated with non-depreciable assets including goodwill, DFLs, undeveloped land parcels, and loans receivable. Management believes that FFO as Adjusted provides a meaningful supplemental measurement of our FFO run-rate and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT. At the same time that Nareit created and defined its FFO measure for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” We believe stockholders, potential investors, and financial analysts who review our operating performance are best served by an FFO run-rate earnings measure that includes certain other adjustments to net income (loss), in addition to adjustments made to arrive at the Nareit defined measure of FFO. FFO as Adjusted is used by management in analyzing our business and the performance of our properties and we believe it is important that stockholders, potential investors, and financial analysts understand this measure used by management. We use FFO as Adjusted to: (i) evaluate our performance in comparison with expected results and results of previous periods, relative to resource allocation decisions, (ii) evaluate the performance of our management, (iii) budget and forecast future results to assist in the allocation of resources, (iv) assess our performance as compared with similar real estate companies and the industry in general, and (v) evaluate how a specific potential investment will impact our future results. Other REITs or real estate companies may use different methodologies for calculating an adjusted FFO measure, and accordingly, our FFO as Adjusted may not be comparable to those reported by other REITs. For a reconciliation of net income (loss) to Nareit FFO and FFO as Adjusted and other relevant disclosure, refer to “Non-GAAP Financial Measures Reconciliations” below.

Adjusted FFO (“AFFO”). AFFO is defined as FFO as Adjusted after excluding the impact of the following: (i) ~~amortization of~~ stock-based compensation amortization expense, (ii) amortization of deferred financing costs, net, (iii) straight-line rents, (iv) deferred income taxes, (v) amortization of above (below) market lease intangibles, net, and ~~(v)~~(vi) other AFFO adjustments, which include: (a) ~~amortization of acquired market lease intangibles, net, (b)~~ non-cash interest related to DFLs and lease incentive amortization (reduction of straight-line rents), ~~(c)~~(b) actuarial reserves for insurance claims that have been incurred but not reported, and ~~(d)~~(c) amortization of deferred revenues, excluding amounts amortized into rental income that are associated with tenant funded improvements owned/recognized by us and up-front cash payments made by tenants to reduce their contractual rents. Also, AFFO is computed after deducting recurring capital expenditures, including second generation leasing costs and second generation tenant and capital improvements, and includes adjustments to compute our share of AFFO from our unconsolidated joint ventures.More specifically, recurring capital expenditures, including second generation leasing costs and second generation tenant and capital improvements ("(“AFFO capital ~~expenditures"~~expenditures”) excludes our share from unconsolidated joint ventures (reported in “other AFFO adjustments”). Adjustments for joint ventures are calculated to reflect our pro rata share of both our consolidated and unconsolidated joint ventures. We reflect our share of AFFO for unconsolidated joint ventures by applying our actual ownership percentage for the period to the applicable reconciling items on an entity by entity basis. We reflect our share for consolidated joint ventures in which we do not own 100% of the equity by adjusting our AFFO to remove the third party ownership share of the applicable reconciling items based on actual ownership percentage for the applicable periods (reported in “other AFFO adjustments”). See FFO for further disclosure regarding our use of pro rata share information and its limitations. We believe AFFO is an alternative run-rate earnings measure that improves the understanding of our operating results among investors and makes comparisons with: (i) expected results, (ii) results of previous periods, and (iii) results among REITs more meaningful. AFFO does not represent cash generated from operating activities determined in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs as it excludes the following items which generally flow through our cash flows from operating activities: (i) adjustments for changes in working capital or the actual timing of the payment of income or expense items that are accrued in the period, (ii) transaction-related costs, (iii) litigation settlement expenses, and (iv) restructuring and severance-related charges. Furthermore, AFFO is adjusted for recurring capital expenditures, which are generally not considered when determining cash flows from operations or liquidity. Other REITs or real estate companies may use different methodologies for calculating AFFO, and accordingly, our AFFO may not be comparable to those reported by other REITs. Management believes AFFO provides a meaningful supplemental measure of our performance and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT, and by presenting AFFO, we are assisting these parties in their evaluation. AFFO is a non-GAAP supplemental financial measure and should not be considered as an alternative to net income (loss) determined in accordance with GAAP and should only be considered together with and as a supplement to ~~the Company’s~~our financial information prepared in accordance with GAAP. For a reconciliation of net income (loss) to AFFO and other relevant ~~disclosure,~~disclosures, refer to “Non-GAAP Financial Measures Reconciliations” below.

4543

Table of Contents

Comparison of the Three and Nine Months Ended September 30, ~~2022~~2023 to the Three and Nine Months Ended September 30, ~~2021~~2022

Overview

Three Months Ended September 30, ~~2022~~2023 and ~~2021~~2022(1)

The following table summarizes results for the three months ended September 30, ~~2022~~2023 and ~~2021~~2022 (in thousands):


		Three Months Ended September 30,				Three Months Ended September 30,
		2022		2021			Change			2023		2022		Change

Net income (loss) applicable to common shares	Net income (loss) applicable to common shares	$	353,366	$	54,442		$	298,924	Net income (loss) applicable to common shares	$	64,048	$	353,366	$	(289,318)
Nareit FFO	Nareit FFO	225,074		194,914			30,160		Nareit FFO	250,226		225,074		25,152
FFO as Adjusted	FFO as Adjusted	233,166		217,471			15,695		FFO as Adjusted	249,306		233,166		16,140
AFFO	AFFO	193,314		179,739			13,575		AFFO	217,305		193,314		23,991

(1)For the reconciliation of non-GAAP financial measures, see “Non-GAAP Financial Measures Reconciliations” below.

Net income (loss) applicable to common shares ~~increased~~decreased primarily as a result of the following:

•a gain upon change of control related to the sale of a 30% interest and deconsolidation of seven previously consolidated ~~life science assets~~lab buildings in South San Francisco, ~~California; and~~California during the third quarter of 2022;

•an increase in ~~NOI generated from our life science and medical office segments related to: (i) 2021 and 2022 acquisitions~~depreciation, primarily as a result of ~~real estate, (ii)~~ development and redevelopment projects placed in service during ~~2021~~2022 and 2023;

•an increase in interest expense, primarily as a result of: (i) senior unsecured notes issued during the first half of 2023, (ii) borrowings under the Term Loan Facilities, which were drawn during the fourth quarter of 2022, and (iii) ~~new leasing activity during 2021~~higher interest rates on the commercial paper program, partially offset by lower borrowings on the commercial paper program; and ~~2022 (including the impact to straight-line rents).~~

•an increase in income tax expense primarily as a result of an increase in operating income associated with our CCRCs.

The ~~increase~~decrease in net income (loss) applicable to common shares was partially offset by:

•an increase in NOI generated from our lab and outpatient medical segments related to: (i) development and redevelopment projects placed in service during 2022 and 2023, (ii) new leasing activity during 2022 and 2023 (including the impact to straight-line rents), and (iii) 2022 acquisitions of real estate;

•a decrease in ~~gains on sale of depreciable real estate related to lower gains recognized on MOB asset sales~~casualty-related charges from a hurricane during the third quarter of 2022;

•a decrease in loan loss reserves primarily as a result of principal repayments on seller financing; and

•an increase in equity income from unconsolidated joint ventures.

Nareit FFO increased primarily as a result of the aforementioned events impacting net income (loss) applicable to common shares, except for the following, which are excluded from Nareit FFO:

•gain upon change of control; and

•depreciation and amortization expense.

FFO as Adjusted increased primarily as a result of the aforementioned events impacting Nareit FFO, except for the following, which are excluded from FFO as Adjusted:

•casualty-related charges; and

•loan loss reserves.

AFFO increased primarily as a result of the aforementioned events impacting FFO as Adjusted, except for the impact of straight-line rents, which is excluded from AFFO.

Table of Contents

Nine Months Ended September 30, 2023 and 2022(1)

The following table summarizes results for the nine months ended September 30, 2023 and 2022 (in thousands):


	Nine Months Ended September 30,
	2023		2022		Change

Net income (loss) applicable to common shares	$	233,497	$	491,398	$	(257,901)
Nareit FFO	723,737		704,658		19,079
FFO as Adjusted	728,045		704,460		23,585
AFFO	645,813		590,938		54,875

(1)For the reconciliation of non-GAAP financial measures, see “Non-GAAP Financial Measures Reconciliations” below.

Net income (loss) applicable to common shares decreased primarily as ~~compared~~a result of the following:

•a gain upon change of control related to ~~2021;~~the sale of a 30% interest and deconsolidation of seven previously consolidated lab buildings in South San Francisco, California during the third quarter of 2022;

•an increase in depreciation, primarily as a result of development and redevelopment projects placed in service during 2022 and 2023;

•an increase in interest expense, primarily as a result of: (i) senior unsecured notes issued during the first half of ~~higher~~2023, (ii) borrowings under the Term Loan Facilities, which were drawn during the fourth quarter of 2022, and (iii) higher interest rates ~~under~~on the commercial paper program, partially offset by lower borrowings on the commercial paper program;

•a gain on sale associated with the disposition of a hospital under a direct financing lease (“DFL”) during the first quarter of 2022;

•a decrease in government grant income received under the CARES Act in 2023;

•an increase in income tax expense primarily as a result of an increase in operating income associated with our CCRCs; and

•an increase in transaction costs, primarily as a result of expenses incurred in connection with our reorganization to an UPREIT structure in 2023.

The decrease in net income (loss) applicable to common shares was partially offset by:

•an increase in gains on sale of depreciable real estate related to lab and outpatient medical building sales during 2023 as compared to 2022;

•a decrease in depreciation related to the deconsolidation of seven previously consolidated lab buildings in South San Francisco, California during the third quarter of 2022;

•a decrease in other expenses for tenant relocation and other costs associated with the demolition of an outpatient medical building, which were incurred in the first quarter of 2022;

•a decrease in casualty-related charges from a hurricane during the third quarter of 2022;

•an increase in ~~loan loss reserves in 2022 primarily due to macroeconomic conditions;~~equity income from unconsolidated joint ventures; and

•a decrease in ~~income from discontinued operations,~~loan loss reserves primarily as a result of ~~a decrease in gain~~principal repayments on ~~sales of real estate from dispositions of our senior housing portfolios, partially offset by lower impairments of depreciable real estate and goodwill.~~seller financing.

Nareit FFO increased primarily as a result of the aforementioned events impacting net income (loss) applicable to common shares, except for the following, which are excluded from Nareit FFO:

•gain upon change of control;

•gain on sales of depreciable real estate; and

•depreciation and amortization ~~expense; and~~

•~~impairment charges related to depreciable real estate.~~

~~FFO as Adjusted increased primarily as a result of the aforementioned events impacting Nareit FFO, except for the following, which are excluded from FFO as Adjusted:~~

•~~casualty-related charges;~~

•~~loan loss reserves; and~~

•~~goodwill impairment charges related to the disposition of our senior housing portfolios.~~

~~AFFO increased primarily as a result of the aforementioned events impacting FFO as Adjusted, except for the impact of straight-line rents, which is excluded from AFFO.~~

~~Table of Contents~~

~~Nine Months Ended September 30, 2022 and 2021~~

~~The following table summarizes results for the nine months ended September 30, 2022 and 2021 (in thousands):~~

Nine Months Ended September 30,
2022 2021 Change
Net income (loss) applicable to common shares $ 491,398 $ 473,778 $ 17,620
Nareit FFO 704,658 384,877 319,781
FFO as Adjusted 704,460 650,166 54,294
AFFO 590,938 553,578 37,360

~~Net income (loss) applicable to common shares increased primarily as a result of the following:~~

•~~a gain upon change of control related to the sale of a 30% interest and deconsolidation of seven previously consolidated life science assets in South San Francisco, California;~~

•~~a decrease in loss on debt extinguishments related to our repurchase and redemption of certain outstanding senior notes in the first and second quarters of 2021;~~

•an increase in NOI generated from our life science and medical office segments related to: (i) 2021 and 2022 acquisitions of real estate, (ii) development and redevelopment projects placed in service during 2021 and 2022, and (iii) new leasing activity during 2021 and 2022 (including the impact to straight-line rents);

•~~a gain on sale of a hospital that was classified as a DFL that was sold in the first quarter of 2022; and~~

•~~fewer impairment charges on depreciable real estate.~~

~~The increase in net income (loss) applicable to common shares was partially offset by:~~

•a decrease in income from discontinued operations, primarily as a result of a decrease in gain on sales of real estate from dispositions of our senior housing portfolios, partially offset by lower impairments of depreciable real estate and goodwill;

•~~a decrease in gains on sale of depreciable real estate primarily related to the Hoag Hospital sale in May 2021;~~

•~~an increase in depreciation, primarily as a result of: (i) 2021 and 2022 acquisitions of real estate and (ii) development and redevelopment projects placed in service during 2021 and 2022;~~

•~~a decrease in interest income primarily as a result of principal repayments on and sales of loans receivable in 2021 and 2022;~~

•~~expenses incurred for tenant relocation and other costs associated with the demolition of an MOB;~~

•~~casualty-related charges from a hurricane during the third quarter of 2022;~~

•~~an increase in interest expense, primarily as a result of higher borrowings and higher interest rates under the commercial paper program; and~~

•~~an increase in loan loss reserves in 2022 primarily due to macroeconomic conditions.~~

~~Nareit FFO increased primarily as a result of the aforementioned events impacting net income (loss) applicable to common shares, except for the following, which are excluded from Nareit FFO:~~

•~~gain upon change of control;~~

•~~gain on sales of depreciable real estate;~~

•~~depreciation and amortization expense; and~~

•~~impairment charges related to depreciable real estate.~~expense.

4745

Table of Contents

FFO as Adjusted increased primarily as a result of the aforementioned events impacting Nareit FFO, except for the following, which are excluded from FFO as Adjusted:

•~~loss on debt extinguishment;~~

•~~the~~ gain on sale of a hospital ~~that was classified as~~under a DFL;

•~~the~~ expenses for tenant relocation and other costs associated with the demolition of an ~~MOB;~~

•~~goodwill impairment charges related to the disposition of our senior housing portfolios;~~outpatient medical building;

•casualty-related charges; ~~and~~

•loan loss ~~reserves.~~reserves; and

•transaction costs.

AFFO increased primarily as a result of the aforementioned events impacting FFO as Adjusted, except for the impact of straight-line rents, which is excluded from AFFO. The increase in AFFO was partially offset by ~~higher~~lower AFFO capital expenditures during the period.

Segment Analysis

The following tables provide selected operating information for our Same-Store and total property portfolio for each of our reportable segments. For the three months ended September 30, ~~2022,~~2023, our Same-Store consists of~~395~~ 416 properties representing properties acquired or placed in service and stabilized on or prior to July 1, ~~2021~~2022 and that remained in operations under a consistent reporting structure through September 30, ~~2022.~~2023. For the nine months ended September 30, ~~2022,~~2023, our Same-Store consists of~~375~~ 406 properties representing properties acquired or placed in service and stabilized on or prior to January 1, ~~2021~~2022 and that remained in operations under a consistent reporting structure through September 30, ~~2022.~~2023. Our total property portfolio consisted of 475 and 480 properties at September 30, 2023 and 2022, respectively. Included in our total property portfolio at each of September 30, 2023 and 2022 ~~and 2021, respectively.~~are 19 senior housing assets in our SWF SH JV.

4846

Table of Contents

~~Life Science~~Lab

The following table summarizes results at and for the three months ended September 30, ~~2022~~2023 and ~~2021~~2022 (dollars and square feet in thousands, except per square foot data):


		SS									Total Portfolio									SS									Total Portfolio
		Three Months Ended September 30,									Three Months Ended September 30,									Three Months Ended September 30,									Three Months Ended September 30,
		2022			2021			Change			2022			2021			Change			2023			2022			Change			2023			2022			Change
Rental and related revenues	Rental and related revenues	$	167,084		$	153,324		$	13,760		$	207,795		$	184,213		$	23,582	Rental and related revenues	$	177,974		$	178,587		$	(613)		$	226,059		$	207,795		$	18,264
Healthpeak’s share of unconsolidated joint venture total revenues	Healthpeak’s share of unconsolidated joint venture total revenues	2,628			3,228			(600)			2,938			1,521			1,417		Healthpeak’s share of unconsolidated joint venture total revenues	1,623			1,429			194			2,425			2,938			(513)
Noncontrolling interests’ share of consolidated joint venture total revenues	Noncontrolling interests’ share of consolidated joint venture total revenues	(33)			(31)			(2)			(55)			(82)			27		Noncontrolling interests’ share of consolidated joint venture total revenues	(33)			(33)			—			(154)			(55)			(99)
Operating expenses	Operating expenses	(44,286)			(38,228)			(6,058)			(55,162)			(44,923)			(10,239)		Operating expenses	(50,298)			(47,041)			(3,257)			(60,268)			(55,162)			(5,106)
Healthpeak’s share of unconsolidated joint venture operating expenses	Healthpeak’s share of unconsolidated joint venture operating expenses	(668)			(705)			37			(777)			(463)			(314)		Healthpeak’s share of unconsolidated joint venture operating expenses	(573)			(495)			(78)			(958)			(777)			(181)
Noncontrolling interests’ share of consolidated joint venture operating expenses	Noncontrolling interests’ share of consolidated joint venture operating expenses	10			9			1			21			25			(4)		Noncontrolling interests’ share of consolidated joint venture operating expenses	11			10			1			33			21			12

Adjustments to NOI(1)	Adjustments to NOI(1)	(10,469)			(9,141)			(1,328)			(15,221)			(11,021)			(4,200)		Adjustments to NOI(1)	(5,231)			(12,947)			7,716			(9,842)			(15,221)			5,379
Adjusted NOI	Adjusted NOI	$	114,266		$	108,456		$	5,810		139,539			129,270			10,269		Adjusted NOI	$	123,473		$	119,510		$	3,963		157,295			139,539			17,756
Less: non-SS Adjusted NOI	Less: non-SS Adjusted NOI										(25,273)			(20,814)			(4,459)		Less: non-SS Adjusted NOI										(33,822)			(20,029)			(13,793)
SS Adjusted NOI	SS Adjusted NOI										$	114,266		$	108,456		$	5,810	SS Adjusted NOI										$	123,473		$	119,510		$	3,963
Adjusted NOI % change	Adjusted NOI % change							5.4		%									Adjusted NOI % change							3.3		%
Property count(2)	Property count(2)	118			118						149			146					Property count(2)	122			122						146			149
End of period occupancy(3)	End of period occupancy(3)	98.8		%	97.5		%				99.0		%	97.1		%			End of period occupancy(3)	97.2		%	98.8		%				97.5		%	99.0		%
Average occupancy(3)	Average occupancy(3)	98.7		%	97.5		%				98.8		%	97.1		%			Average occupancy(3)	97.3		%	98.6		%				97.5		%	98.8		%
Average occupied square feet	Average occupied square feet	8,910			8,651						10,708			10,021					Average occupied square feet	9,283			9,381						10,574			10,708
Average annual total revenues per occupied square foot~~(3)~~(4)	Average annual total revenues per occupied square foot~~(3)~~(4)	$	72		$	68					$	74		$	69				Average annual total revenues per occupied square foot~~(3)~~(4)	$	76		$	71					$	83		$	74
Average annual base rent per occupied square foot~~(4)~~(5)	Average annual base rent per occupied square foot~~(4)~~(5)	$	54		$	52					$	56		$	54				Average annual base rent per occupied square foot~~(4)~~(5)	$	57		$	54					$	64		$	56

_______________________________________

(1)Represents adjustments to NOI in accordance with our definition of Adjusted NOI. Refer to “Non-GAAP Financial Measures” above for the definitions of NOI and Adjusted NOI. See Note 13 to the Consolidated Financial Statements for a reconciliation of Adjusted NOI by segment to net income (loss).

(2)From our third quarter ~~2021~~2022 presentation of Same-Store, we added: (i) ~~six stabilized developments placed in service, (ii)~~ five stabilized acquisitions, ~~(iii)~~(ii) three stabilized redevelopments placed in service, and ~~(iv)~~(iii) two stabilized ~~properties that previously experienced a significant tenant relocation,~~developments placed in service, and we removed: (i) ~~seven life science facilities~~four buildings that were placed into redevelopment, ~~and~~ (ii) ~~two life science facilities~~one asset that ~~were classified as~~was placed into land held for ~~sale.~~development, and (iii) one building that experienced a significant tenant relocation.

(3)~~Average annual total revenues does not include non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).~~

~~(4)~~Base rent does not include tenant recoveries, additional rents in excess of floors and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).

~~Same-Store Adjusted NOI increased primarily as a result of the following:~~

•~~annual rent escalations;~~

•~~higher occupancy; and~~

•~~new leasing activity.~~

~~Total Portfolio Adjusted NOI increased primarily as a result of the aforementioned impacts to Same-Store and the following Non-Same-Store impacts:~~

•~~an increase in NOI from (i) increased occupancy in developments and redevelopments placed in service in 2021 and 2022 and (ii) acquisitions in 2021 and 2022.~~

~~Table of Contents~~

~~The following table summarizes results at and for the nine months ended September 30, 2022 and 2021 (dollars and square feet in thousands, except per square foot data):~~

SS
Total Portfolio(1)
Nine Months Ended September 30, Nine Months Ended September 30,
2022 2021 Change 2022 2021 Change
Rental and related revenues $ 447,719 $ 418,597 $ 29,122 $ 609,620 $ 531,674 $ 77,946
Healthpeak’s share of unconsolidated joint venture total revenues 10,175 9,359 816 5,637 4,270 1,367
Noncontrolling interests’ share of consolidated joint venture total revenues (76) (73) (3) (174) (222) 48
Operating expenses (110,244) (96,696) (13,548) (152,796) (125,108) (27,688)
Healthpeak’s share of unconsolidated joint venture operating expenses (2,151) (2,019) (132) (1,744) (1,316) (428)
Noncontrolling interests’ share of consolidated joint venture operating expenses 24 21 3 59 66 (7)
Adjustments to NOI(2)
(28,747) (26,961) (1,786) (50,977) (35,197) (15,780)
Adjusted NOI $ 316,700 $ 302,228 $ 14,472 409,625 374,167 35,458
Less: non-SS Adjusted NOI (92,925) (71,939) (20,986)
SS Adjusted NOI $ 316,700 $ 302,228 $ 14,472
Adjusted NOI % change 4.8 %
Property count(3)
114 114 149 146
End of period occupancy 98.8 % 97.4 % 99.0 % 97.1 %
Average occupancy 98.7 % 97.7 % 98.6 % 96.9 %
Average occupied square feet 8,455 8,221 10,666 10,119
Average annual total revenues per occupied square foot(4)
$ 68 $ 65 $ 71 $ 66
Average annual base rent per occupied square foot(5)
$ 53 $ 51 $ 55 $ 52

~~(1)Total Portfolio includes results of operations from disposed properties through the disposition date.~~

~~(2)Represents adjustments to NOI in accordance with our definition of Adjusted NOI.~~ Refer to “Non-GAAP Financial Measures” above for ~~definitions~~the definition of ~~NOI~~Same-Store. Total Portfolio occupancy excludes any of the following: (i) developments, (ii) significant redevelopments, (iii) newly completed properties under lease-up, and ~~Adjusted NOI. See Note 13 to the Consolidated Financial Statements for a reconciliation of Adjusted NOI by segment to net income (loss).~~

~~(3)~~From our third quarter 2021 presentation of Same-Store, we added: (i) six stabilized developments placed in service, (ii) five stabilized acquisitions, and (iii) four stabilized redevelopments placed in service, and we removed: (i) seven life science facilities that were placed into redevelopment and (ii) one life science facility that was classified as(iv) properties held for sale.

(4)Average annual total revenues does not include non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).

(5)Base rent does not include tenant recoveries, additional rents in excess of floors, and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).

Same-Store Adjusted NOI increased primarily as a result of the following:

•annual rent escalations;

•~~higher occupancy;~~ and

•new leasing ~~activity.~~activity; partially offset by

•higher operating expenses.

Total Portfolio Adjusted NOI increased primarily as a result of the aforementioned impacts to Same-Store and the following Non-Same-Store impacts:

•~~an increase in~~increased NOI from ~~(i) increased occupancy in~~ developments and redevelopments placed in service in ~~2021 and~~ 2022 and ~~(ii) acquisitions in 2021~~2023; partially offset by

•decreased NOI from our 2022 and ~~2022.~~2023 dispositions.

5047

Table of Contents

~~Medical Office~~

The following table summarizes results at and for the ~~three~~nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (dollars and square feet in thousands, except per square foot data):


		SS									Total Portfolio(1)									SS									Total Portfolio(1)
		Three Months Ended September 30,									Three Months Ended September 30,									Nine Months Ended September 30,									Nine Months Ended September 30,
		2022			2021			Change			2022			2021			Change			2023			2022			Change			2023			2022			Change
Rental and related revenues	Rental and related revenues	$	156,966		$	149,864		$	7,102		$	184,506		$	169,303		$	15,203	Rental and related revenues	$	506,415		$	494,606		$	11,809		$	654,829		$	609,620		$	45,209
Income from direct financing leases		—			—			—			—			2,179			(2,179)
Healthpeak’s share of unconsolidated joint venture total revenues	Healthpeak’s share of unconsolidated joint venture total revenues	733			714			19			756			737			19		Healthpeak’s share of unconsolidated joint venture total revenues	5,066			7,003			(1,937)			6,519			5,637			882
Noncontrolling interests’ share of consolidated joint venture total revenues	Noncontrolling interests’ share of consolidated joint venture total revenues	(8,812)			(8,659)			(153)			(8,968)			(8,954)			(14)		Noncontrolling interests’ share of consolidated joint venture total revenues	(99)			(97)			(2)			(449)			(174)			(275)
Operating expenses	Operating expenses	(52,972)			(50,120)			(2,852)			(64,782)			(58,430)			(6,352)		Operating expenses	(139,864)			(124,274)			(15,590)			(172,666)			(152,796)			(19,870)
Healthpeak’s share of unconsolidated joint venture operating expenses	Healthpeak’s share of unconsolidated joint venture operating expenses	(313)			(304)			(9)			(313)			(305)			(8)		Healthpeak’s share of unconsolidated joint venture operating expenses	(2,025)			(1,621)			(404)			(2,987)			(1,744)			(1,243)
Noncontrolling interests’ share of consolidated joint venture operating expenses	Noncontrolling interests’ share of consolidated joint venture operating expenses	2,558			2,592			(34)			2,558			2,659			(101)		Noncontrolling interests’ share of consolidated joint venture operating expenses	34			31			3			108			59			49

Adjustments to NOI(2)	Adjustments to NOI(2)	(2,300)			(2,717)			417			(4,079)			(3,626)			(453)		Adjustments to NOI(2)	(15,813)			(36,641)			20,828			(25,618)			(50,977)			25,359
Adjusted NOI	Adjusted NOI	$	95,860		$	91,370		$	4,490		109,678			103,563			6,115		Adjusted NOI	$	353,714		$	339,007		$	14,707		459,736			409,625			50,111
Less: non-SS Adjusted NOI	Less: non-SS Adjusted NOI										(13,818)			(12,193)			(1,625)		Less: non-SS Adjusted NOI										(106,022)			(70,618)			(35,404)
SS Adjusted NOI	SS Adjusted NOI										$	95,860		$	91,370		$	4,490	SS Adjusted NOI										$	353,714		$	339,007		$	14,707
Adjusted NOI % change	Adjusted NOI % change							4.9		%									Adjusted NOI % change							4.3		%
Property count(3)	Property count(3)	262			262						297			300					Property count(3)	119			119						146			149
End of period occupancy		91.2		%	91.2		%				90.0		%	90.1		%
Average occupancy		91.2		%	91.1		%				89.9		%	89.9		%
End of period occupancy(4)																			End of period occupancy(4)	97.1		%	98.8		%				97.5		%	99.0		%
Average occupancy(4)																			Average occupancy(4)	97.8		%	98.5		%				98.1		%	98.6		%
Average occupied square feet	Average occupied square feet	19,157			19,123						21,624			21,337					Average occupied square feet	9,015			9,037						10,538			10,666
Average annual total revenues per occupied square foot(4)		$	33		$	32					$	34		$	31
Average annual base rent per occupied square foot(5)		$	27		$	26					$	27		$	27
Average annual total revenues per occupied square foot(5)																			Average annual total revenues per occupied square foot(5)	$	74		$	69					$	81		$	71
Average annual base rent per occupied square foot(6)																			Average annual base rent per occupied square foot(6)	$	56		$	52					$	62		$	55

(1)Total Portfolio includes results of operations from disposed properties through the disposition date.

(2)Represents adjustments to NOI in accordance with our definition of Adjusted NOI. Refer to “Non-GAAP Financial Measures” above for the definitions of NOI and Adjusted NOI. See Note 13 to the Consolidated Financial Statements for a reconciliation of Adjusted NOI by segment to net income (loss).

(3)From our third quarter ~~2021~~2022 presentation of Same-Store, we added: (i) 25five stabilized acquisitions, ~~and~~ (ii) 2two stabilized buildings that previously experienced a significant tenant relocation, (iii) two stabilized redevelopments placed in service, and (iv) one stabilized development placed in service, and we removed: (i) ~~5 MOBs~~four buildings that were placed into redevelopment and (ii) one building that experienced a significant tenant relocation.

(4)Refer to “Non-GAAP Financial Measures” above for the definition of Same-Store. Total Portfolio occupancy excludes any of the following: (i) developments, (ii) significant redevelopments, (iii) newly completed properties under lease-up, and (iv) properties held for sale.

(5)Average annual total revenues does not include non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).

(6)Base rent does not include tenant recoveries, additional rents in excess of floors, and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, and deferred revenues).

Same-Store Adjusted NOI increased primarily as a result of the following:

•annual rent escalations; and

•new leasing activity; partially offset by

•higher operating expenses.

Total Portfolio Adjusted NOI increased primarily as a result of the aforementioned impacts to Same-Store and the following Non-Same-Store impacts:

•increased NOI from developments and redevelopments placed in service in 2022 and 2023; partially offset by

•decreased NOI from our 2022 and 2023 dispositions.

Table of Contents

Outpatient Medical

The following table summarizes results at and for the three months ended September 30, 2023 and 2022 (dollars and square feet in thousands, except per square foot data):


	SS									Total Portfolio(1)
	Three Months Ended September 30,									Three Months Ended September 30,
	2023			2022			Change			2023			2022			Change
Rental and related revenues	$	175,559		$	169,696		$	5,863		$	191,016		$	184,506		$	6,510

Healthpeak’s share of unconsolidated joint venture total revenues	720			703			17			746			756			(10)
Noncontrolling interests’ share of consolidated joint venture total revenues	(8,565)			(8,401)			(164)			(8,735)			(8,968)			233
Operating expenses	(60,028)			(57,146)			(2,882)			(67,693)			(64,782)			(2,911)
Healthpeak’s share of unconsolidated joint venture operating expenses	(301)			(305)			4			(301)			(313)			12
Noncontrolling interests’ share of consolidated joint venture operating expenses	2,469			2,355			114			2,474			2,558			(84)

Adjustments to NOI(2)	(3,244)			(3,772)			528			(3,547)			(4,079)			532
Adjusted NOI	$	106,610		$	103,130		$	3,480		113,960			109,678			4,282
Less: non-SS Adjusted NOI										(7,350)			(6,548)			(802)
SS Adjusted NOI										$	106,610		$	103,130		$	3,480
Adjusted NOI % change							3.4		%
Property count(3)	279			279						295			297
End of period occupancy(4)	91.3		%	91.4		%				90.1		%	90.0		%
Average occupancy(4)	91.3		%	91.3		%				90.1		%	89.9		%
Average occupied square feet	20,510			20,493						21,507			21,624
Average annual total revenues per occupied square foot(5)	$	35		$	33					$	36		$	34
Average annual base rent per occupied square foot(6)	$	28		$	27					$	29		$	27

(1)Total Portfolio includes results of operations from disposed properties through the disposition date.

(3)From our third quarter 2022 presentation of Same-Store, we added: (i) 13 stabilized acquisitions, (ii) 4 ~~MOBs~~stabilized developments placed in service, (iii) 1 stabilized redevelopment placed in service, and (iv) 3 redevelopments that were ~~sold.~~placed on hold, and we removed: (i) 2 assets that were sold, (ii) 1 asset that was classified as held for sale, and (iii) 1 asset that was placed into redevelopment.

(5)Average annual total revenues does not include non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues).

Same-Store Adjusted NOI increased primarily as a result of the following:

•mark-to-market lease renewals; and

•annual rent escalations; partially offset by

•higher operating expenses.

Total Portfolio Adjusted NOI increased primarily as a result of the aforementioned increases to Same-Store and the following Non-Same-Store impacts:

•increased occupancy in former redevelopment and development properties that have been placed in service; partially offset by

•decreased NOI from our 2022 and 2023 dispositions.

Table of Contents

The following table summarizes results at and for the nine months ended September 30, 2023 and 2022 (dollars and square feet in thousands, except per square foot data):


	SS									Total Portfolio(1)
	Nine Months Ended September 30,									Nine Months Ended September 30,
	2023			2022			Change			2023			2022			Change
Rental and related revenues	$	508,594		$	490,527		$	18,067		$	564,644		$	539,910		$	24,734
Income from direct financing leases	—			—			—			—			1,168			(1,168)
Healthpeak’s share of unconsolidated joint venture total revenues	2,133			2,110			23			2,245			2,249			(4)
Noncontrolling interests’ share of consolidated joint venture total revenues	(25,524)			(25,040)			(484)			(26,364)			(26,732)			368
Operating expenses	(172,052)			(163,588)			(8,464)			(197,442)			(189,274)			(8,168)
Healthpeak’s share of unconsolidated joint venture operating expenses	(888)			(891)			3			(895)			(912)			17
Noncontrolling interests’ share of consolidated joint venture operating expenses	7,294			7,294			—			7,477			7,886			(409)

Adjustments to NOI(2)	(9,244)			(9,678)			434			(11,373)			(10,574)			(799)
Adjusted NOI	$	310,313		$	300,734		$	9,579		338,292			323,721			14,571
Less: non-SS Adjusted NOI										(27,979)			(22,987)			(4,992)
SS Adjusted NOI										$	310,313		$	300,734		$	9,579
Adjusted NOI % change							3.2		%
Property count(3)	272			272						295			297
End of period occupancy(4)	91.5		%	91.6		%				90.1		%	90.0		%
Average occupancy(4)	91.5		%	91.6		%				90.0		%	89.9		%
Average occupied square feet	20,203			20,231						21,519			21,686
Average annual total revenues per occupied square foot(5)	$	34		$	33					$	35		$	34
Average annual base rent per occupied square foot(6)	$	27		$	27					$	28		$	27

(1)Total Portfolio includes results of operations from disposed properties through the disposition date.

(3)From our third quarter 2022 presentation of Same-Store, we added: (i) 25 stabilized acquisitions, (ii) 3 redevelopments that were placed on hold, and (iii) 2 stabilized developments placed in service, and we removed: (i) 2 assets that were sold, (ii) 1 asset that was classified as held for sale, and (iii) 1 asset that was placed into redevelopment.

(5)Average annual total revenues does not include non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues).

Same-Store Adjusted NOI increased primarily as a result of the following:

•mark-to-market lease renewals;

•annual rent escalations; and

•higher parking income and percentage-based ~~rents.~~rents; partially offset by

•higher operating expenses.

Total Portfolio Adjusted NOI increased primarily as a result of the aforementioned increases to Same-Store and the following Non-Same-Store impacts:

•increased NOI from our ~~2021 and~~ 2022 acquisitions;

•business interruption proceeds related to a demolished asset; and

•increased occupancy in former redevelopment and development properties that have been placed in service; partially offset by

•decreased NOI from our ~~2021~~2022 and ~~2022~~2023 dispositions.

~~Table of Contents~~

~~The following table summarizes results at and for the nine months ended September 30, 2022 and 2021 (dollars and square feet in thousands, except per square foot data):~~

SS
Total Portfolio(1)
Nine Months Ended September 30, Nine Months Ended September 30,
2022 2021 Change 2022 2021 Change
Rental and related revenues $ 436,724 $ 416,998 $ 19,726 $ 539,910 $ 490,456 $ 49,454
Income from direct financing leases — — — 1,168 6,522 (5,354)
Healthpeak’s share of unconsolidated joint venture total revenues 2,180 2,095 85 2,249 2,162 87
Noncontrolling interests’ share of consolidated joint venture total revenues (26,265) (25,728) (537) (26,732) (26,704) (28)
Operating expenses (145,379) (135,663) (9,716) (189,274) (164,198) (25,076)
Healthpeak’s share of unconsolidated joint venture operating expenses (913) (915) 2 (912) (915) 3
Noncontrolling interests’ share of consolidated joint venture operating expenses 7,886 7,500 386 7,886 7,714 172
Adjustments to NOI(2)
(5,318) (6,554) 1,236 (10,574) (7,553) (3,021)
Adjusted NOI $ 268,915 $ 257,733 $ 11,182 323,721 307,484 16,237
Less: non-SS Adjusted NOI (54,806) (49,751) (5,055)
SS Adjusted NOI $ 268,915 $ 257,733 $ 11,182
Adjusted NOI % change 4.3 %
Property count(3)
246 246 297 300
End of period occupancy 91.3 % 91.3 % 90.0 % 90.1 %
Average occupancy 91.5 % 91.4 % 89.9 % 90.1 %
Average occupied square feet 18,368 18,333 21,686 20,827
Average annual total revenues per occupied square foot(4)
$ 32 $ 31 $ 34 $ 31
Average annual base rent per occupied square foot(5)
$ 27 $ 26 $ 27 $ 27

~~(1)Total Portfolio includes results of operations from disposed properties through the disposition date.~~

~~(2)~~Represents adjustments to NOI in accordance with our definition of Adjusted NOI. Refer to “Non-GAAP Financial Measures” above for definitions of NOI and Adjusted NOI. See Note 13 to the Consolidated Financial Statements for a reconciliation of Adjusted NOI by segment to net income (loss).

~~(3)~~From our third quarter 2021 presentation of Same-Store, we added: (i) 10 stabilized acquisitions and (ii) 3 stabilized redevelopments placed in service, and we removed: (i) 5 MOBs that were placed into redevelopment and (ii) 4 MOBs that were sold.

~~(4)Average annual total revenues does not include non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues).~~

~~(5)~~Base rent does not include tenant recoveries, additional rents in excess of floors and non-cash revenue adjustments (i.e., straight-line rents, amortization of market lease intangibles, DFL non-cash interest, and deferred revenues).

~~Same-Store Adjusted NOI increased primarily as a result of the following:~~

•~~mark-to-market lease renewals;~~

•~~annual rent escalations; and~~

•~~higher parking income and percentage-based rents.~~

~~Total Portfolio Adjusted NOI increased primarily as a result of the aforementioned increases to Same-Store and the following Non-Same-Store impacts:~~

•~~increased NOI from our 2021 and 2022 acquisitions;~~

•~~increased occupancy in former redevelopment and development properties that have been placed in service; partially offset by~~

•~~decreased NOI from our 2021 and 2022 dispositions.~~

5250

Table of Contents

Continuing Care Retirement Community

The following table summarizes results at and for the three months ended September 30, ~~2022~~2023 and ~~2021~~2022 (dollars in thousands, except per unit data):


		SS									Total Portfolio									SS									Total Portfolio
		Three Months Ended September 30,									Three Months Ended September 30,									Three Months Ended September 30,									Three Months Ended September 30,
		2022			2021			Change			2022			2021			Change			2023			2022			Change			2023			2022			Change
Resident fees and services	Resident fees and services	$	122,142		$	119,022		$	3,120		$	122,142		$	119,022		$	3,120	Resident fees and services	$	133,603		$	122,142		$	11,461		$	133,808		$	122,142		$	11,666
Government grant income(1)	Government grant income(1)	4			15			(11)			4			15			(11)		Government grant income(1)	—			—			—			—			4			(4)

Operating expenses	Operating expenses	(99,914)			(98,405)			(1,509)			(100,264)			(98,799)			(1,465)		Operating expenses	(104,236)			(99,914)			(4,322)			(104,773)			(100,264)			(4,509)
Healthpeak’s share of unconsolidated joint venture operating expenses		—			—			—			—			(32)			32

Adjustments to NOI(2)	Adjustments to NOI(2)	—			724			(724)			—			724			(724)		Adjustments to NOI(2)	—			—			—			—			—			—
Adjusted NOI	Adjusted NOI	$	22,232		$	21,356		$	876		21,882			20,930			952		Adjusted NOI	$	29,367		$	22,228		$	7,139		29,035			21,882			7,153
Plus: non-SS adjustments											350			426			(76)
Plus (less): non-SS adjustments																			Plus (less): non-SS adjustments										332			346			(14)
SS Adjusted NOI	SS Adjusted NOI										$	22,232		$	21,356		$	876	SS Adjusted NOI										$	29,367		$	22,228		$	7,139
Adjusted NOI % change	Adjusted NOI % change							4.1		%									Adjusted NOI % change							32.1		%
Property count(3)	Property count(3)	15			15						15			15					Property count(3)	15			15						15			15
Average occupancy(4)	Average occupancy(4)	82.0		%	79.5		%				82.0		%	79.5		%			Average occupancy(4)	83.9		%	82.0		%				83.9		%	82.0		%
Average occupied units~~(4)~~(5)	Average occupied units~~(4)~~(5)	5,894			5,910						5,894			5,910					Average occupied units~~(4)~~(5)	5,956			5,894						5,965			5,894
Average annual rent per occupied unit	Average annual rent per occupied unit	$	82,895		$	80,566					$	82,895		$	80,566				Average annual rent per occupied unit	$	89,726		$	82,893					$	89,729		$	82,895

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

(3)From our third quarter ~~2021~~2022 presentation of Same-Store, no properties were added or removed.

(5)Represents average occupied units as reported by the operators for the three-month period. ~~The decrease in average occupied units for the period is primarily a result of decommissioned senior nursing facility beds.~~

Same-Store Adjusted NOI and Total Portfolio Adjusted NOI increased primarily as a result of the following:

•increased rates for resident fees;

•higher occupancy;

•higher business interruption insurance proceeds; partially offset by

•higher costs of labor ~~utilities,~~ and ~~repairs and maintenance.~~management fees.

5351

Table of Contents

The following table summarizes results at and for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (dollars in thousands, except per unit data):


		SS									Total Portfolio									SS									Total Portfolio
		Nine Months Ended September 30,									Nine Months Ended September 30,									Nine Months Ended September 30,									Nine Months Ended September 30,
		2022			2021			Change			2022			2021			Change			2023			2022			Change			2023			2022			Change
Resident fees and services	Resident fees and services	$	369,062		$	352,458		$	16,604		$	369,062		$	352,458		$	16,604	Resident fees and services	$	390,686		$	369,062		$	21,624		$	391,076		$	369,062		$	22,014
Government grant income(1)	Government grant income(1)	6,765			1,412			5,353			6,765			1,412			5,353		Government grant income(1)	—			—			—			184			6,765			(6,581)
Healthpeak’s share of unconsolidated joint venture total revenues		—			—			—			—			6,903			(6,903)

Healthpeak’s share of unconsolidated joint venture government grant income	Healthpeak’s share of unconsolidated joint venture government grant income	—			—			—			334			200			134		Healthpeak’s share of unconsolidated joint venture government grant income	—			—			—			—			334			(334)

Operating expenses	Operating expenses	(299,146)			(283,200)			(15,946)			(300,429)			(284,739)			(15,690)		Operating expenses	(306,123)			(299,146)			(6,977)			(307,551)			(300,429)			(7,122)
Healthpeak’s share of unconsolidated joint venture operating expenses		—			—			—			—			(6,985)			6,985

Adjustments to NOI(2)	Adjustments to NOI(2)	—			1,933			(1,933)			—			1,971			(1,971)		Adjustments to NOI(2)	(678)			—			(678)			(679)			—			(679)
Adjusted NOI	Adjusted NOI	$	76,681		$	72,603		$	4,078		75,732			71,220			4,512		Adjusted NOI	$	83,885		$	69,916		$	13,969		83,030			75,732			7,298
Plus: non-SS adjustments											949			1,383			(434)
Plus (less): non-SS adjustments																			Plus (less): non-SS adjustments										855			(5,816)			6,671
SS Adjusted NOI	SS Adjusted NOI										$	76,681		$	72,603		$	4,078	SS Adjusted NOI										$	83,885		$	69,916		$	13,969
Adjusted NOI % change	Adjusted NOI % change							5.6		%									Adjusted NOI % change							20.0		%
Property count(3)	Property count(3)	15			15						15			15					Property count(3)	15			15						15			15
Average occupancy(4)	Average occupancy(4)	81.3		%	79.2		%				81.3		%	79.2		%			Average occupancy(4)	83.5		%	81.3		%				83.5		%	81.3		%
Average occupied units~~(4)~~(5)	Average occupied units~~(4)~~(5)	5,928			5,890						5,928			6,052					Average occupied units~~(4)~~(5)	5,929			5,928						5,936			5,928
Average annual rent per occupied unit	Average annual rent per occupied unit	$	84,532		$	80,107					$	84,606		$	79,533				Average annual rent per occupied unit	$	87,859		$	83,010					$	87,883		$	84,606

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

(3)From our third quarter ~~2021~~2022 presentation of Same-Store, weno properties were added ~~13 properties that previously experienced an operator transition.~~or removed.

(5)Represents average occupied units as reported by the ~~respective tenants or~~ operators for the nine-month period. ~~The decrease in average occupied units for the period is primarily a result of decommissioned senior nursing facility beds.~~

~~Same‐Store Adjusted NOI and Total Portfolio~~Same-Store Adjusted NOI increased primarily as a result of the following:

•increased rates for resident fees;

•~~increased government grant income received under the CARES Act;~~ and

•~~lower Covid-related expenses;~~higher occupancy; partially offset by

•higher costs of ~~labor~~insurance, management fees, utilities, and ~~repairs~~food; and ~~maintenance.~~

•lower business interruption insurance proceeds.

Total Portfolio Adjusted NOI increased primarily as a result of the aforementioned increases to Same-Store, partially offset by decreased government grant income received under the CARES Act.

5452

Table of Contents

Other Income and Expense Items

The following table summarizes the results of our other income and expense items for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (in thousands):


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		Change		2022		2021		Change			2023		2022		Change		2023		2022		Change
Interest income	Interest income	$	5,963	$	6,748	$	(785)	$	16,950	$	31,869	$	(14,919)	Interest income	$	5,360	$	5,963	$	(603)	$	16,802	$	16,950	$	(148)
Interest expense	Interest expense	44,078		35,905		8,173		123,531		121,429		2,102		Interest expense	50,510		44,078		6,432		147,547		123,531		24,016
Depreciation and amortization	Depreciation and amortization	173,190		177,175		(3,985)		531,412		506,172		25,240		Depreciation and amortization	184,559		173,190		11,369		561,357		531,412		29,945
General and administrative	General and administrative	24,549		23,270		1,279		73,161		72,260		901		General and administrative	23,093		24,549		(1,456)		73,576		73,161		415
Transaction costs	Transaction costs	728		—		728		1,636		1,417		219		Transaction costs	36		728		(692)		3,098		1,636		1,462
Impairments and loan loss reserves (recoveries), net	Impairments and loan loss reserves (recoveries), net	3,407		285		3,122		3,678		4,458		(780)		Impairments and loan loss reserves (recoveries), net	(550)		3,407		(3,957)		(156)		3,678		(3,834)
Gain (loss) on sales of real estate, net	Gain (loss) on sales of real estate, net	(4,149)		14,635		(18,784)		10,047		189,873		(179,826)		Gain (loss) on sales of real estate, net	—		(4,149)		4,149		86,463		10,047		76,416
Gain (loss) on debt extinguishments		—		(667)		667		—		(225,824)		225,824

Other income (expense), net	Other income (expense), net	305,678		1,670		304,008		326,855		5,604		321,251		Other income (expense), net	1,481		305,678		(304,197)		4,208		326,855		(322,647)
Income tax benefit (expense)	Income tax benefit (expense)	3,834		649		3,185		3,775		1,404		2,371		Income tax benefit (expense)	(787)		3,834		(4,621)		(2,225)		3,775		(6,000)
Equity income (loss) from unconsolidated joint ventures	Equity income (loss) from unconsolidated joint ventures	(325)		2,327		(2,652)		2,141		4,517		(2,376)		Equity income (loss) from unconsolidated joint ventures	2,101		(325)		2,426		6,646		2,141		4,505
Income (loss) from discontinued operations	Income (loss) from discontinued operations	(1,298)		601		(1,899)		2,011		384,569		(382,558)		Income (loss) from discontinued operations	—		(1,298)		1,298		—		2,011		(2,011)
Noncontrolling interests’ share in continuing operations	Noncontrolling interests’ share in continuing operations	(4,016)		(7,195)		3,179		(11,701)		(14,036)		2,335		Noncontrolling interests’ share in continuing operations	(4,442)		(4,016)		(426)		(24,297)		(11,701)		(12,596)
Noncontrolling interests’ share in discontinued operations		—		—		—		—		(2,539)		2,539

Interest income

Interest income decreased for the three and nine months ended September 30, ~~2022~~2023 primarily as a result of principal repayments on ~~and sales of~~ loans receivable in ~~2021~~2022 and ~~2022.~~2023, partially offset by higher interest rates.

Interest expense

Interest expense increased for the three and nine months ended September 30, ~~2022~~2023 primarily as a result of: (i) senior unsecured notes issued during the first half of ~~higher~~2023, (ii) borrowings under the Term Loan Facilities, which were drawn during the fourth quarter of 2022, and (iii) higher interest rates ~~under~~on the commercial paper program,. ~~The increase in interest expense for the nine months ended September 30, 2022 was~~ partially offset by ~~senior unsecured notes repurchases and redemptions in~~lower borrowings on the ~~first and second quarters of 2021 and repayment of a term loan in the third quarter of 2021.~~commercial paper program.

Depreciation and amortization expense

Depreciation and amortization expense decreased for the three months ended September 30, 2022 primarily as a result of a decrease in depreciation related to the deconsolidation of seven previously consolidated life science assets in South San Francisco, California. Depreciation and amortization expense increased for the nine months ended September 30, 2022 primarily as a result of: (i) assets acquired during 2021 and 2022 and (ii) development and redevelopment projects placed in service during 2021 and 2022, partially offset by dispositions of real estate in 2021 and 2022.

~~General and administrative~~

~~General and administrative expenses~~ increased for the three and nine months ended September 30, 2023 primarily as a result of development and redevelopment projects placed in service during 2022 ~~primarily due to higher travel costs~~ and ~~professional fees. We expect to recognize total severance-related charges~~2023, partially offset by: (i) assets placed into redevelopment in 2023 and (ii) dispositions of ~~approximately $30 million~~real estate in 2022 and 2023. The increase during the ~~fourth quarter of 2022~~nine months ended September 30, 2023 was also partially offset by lower depreciation related to the deconsolidation of seven previously consolidated lab buildings in South San Francisco, California during the third quarter of 2022.

General and administrative expense

General and administrative expenses decreased for the three months ended September 30, 2023 primarily as a result of lower stock-based compensation. General and administrative expenses increased for the nine months ended September 30, 2023 primarily as a result of severance-related charges associated with certain employee departures during 2023, offset by lower stock-based compensation expense.

Transaction costs

Transaction costs increased for the nine months ended September 30, 2023 primarily as a result of expenses incurred in connection with our ~~former Chief Executive Officer and our former Chief Legal Officer and General Counsel.~~reorganization to an UPREIT structure in 2023.

Impairments and loan loss reserves (recoveries), net

Impairments and loan loss reserves (recoveries), net ~~increased~~decreased for the three and nine months ended September 30, ~~2022~~2023 as a result of ~~an increase~~a decrease in loan loss reserves under the current expected credit losses model. The ~~increase~~decrease in loan loss reserves for the three ~~months ended September 30, 2022 is primarily due to macroeconomic conditions. Impairments~~ and ~~loan loss reserves (recoveries), net decreased for the~~ nine months ended September 30, ~~2022~~2023 is primarily as a result of ~~fewer impairment charges~~principal repayments on ~~depreciable real estate, partially offset by the aforementioned increase in loan loss reserves.~~seller financing, increased interest rates on variable rate loans, and macroeconomic conditions.

5553

Table of Contents

Gain (loss) on sales of real estate, net

Gain (loss) on sales of real estate, net ~~decreased~~increased during the ~~three and~~ nine months ended September 30, ~~2022~~2023 primarily as a result ofof: (i) the ~~$172~~$60 million gain on sale of ~~Hoag Hospital~~two lab buildings in ~~May 2021~~Durham, North Carolina, which were sold in January 2023 and (ii) the ~~gains~~$21 million gain on sales of two outpatient medical buildings, which were sold in March 2023, partially offset by: (i) the $4 million gain on sale of ~~other MOB dispositions~~one lab building, which was sold during the ~~third quarter~~three months ended March 31, 2022, (ii) the $10 million gain on sales of ~~2021.~~three outpatient medical buildings and one outpatient medical land parcel, which were sold during the three months ended June 30, 2022, and (iii) the $1 million gain on sales of two outpatient medical buildings, which were sold during the three months ended September 30, 2022. Refer to Note 4 to the Consolidated Financial Statements for additional information regarding dispositions of real estate and the associated gain (loss) on sales recognized.

~~Gain (loss) on debt extinguishments~~

Loss on debt extinguishments decreased for the nine months ended September 30, 2022 as a result of the repurchase and redemption of certain outstanding senior notes in the first and second quarters of 2021 with no repurchases or redemptions during the comparable periods of 2022.

Other income (expense), net

Other income ~~increased~~decreased for the three and nine months ended September 30, ~~2022~~2023 primarily due to a gain upon change of control related to the sale of a 30% interest and deconsolidation of seven previously consolidated ~~life science assets~~lab buildings in South San Francisco, California during the third quarter of 2022, partially offset by casualty losses from a hurricane induring the third quarter of 2022. ~~Other income further increased during~~For the nine months ended September 30, ~~2022 as a result of:~~2023, other income was further decreased by: (i) a gain on sale associated with the disposition of a hospital ~~that was classified as~~under a DFL during the first quarter of 2022 and (ii) ~~an increase~~a decrease in government grant income received under the CARES Act in ~~2022,~~2023. The decrease in other income during the nine months ended September 30, 2023 was partially offset by other expenses ~~incurred~~ for tenant relocation and other costs associated with the demolition of an ~~MOB.~~outpatient medical building, which were incurred in the first quarter of 2022.

Income tax benefit (expense)

Income tax ~~benefit~~expense increased for the three and nine months ended September 30, ~~2022~~2023 primarily as a result ~~of: (i) the tax impact~~ of ~~casualty losses from a hurricane~~an increase in ~~the third quarter of 2022 and (ii) the tax impact of~~ operating ~~losses on~~income associated with our ~~CCRC portfolio.~~CCRCs.

Equity income (loss) from unconsolidated joint ventures

Equity income from unconsolidated joint ventures ~~decreased~~increased for the three and nine months ended September 30, ~~2022~~2023 primarily as a result ~~of: (i) operating losses on certain~~ of ~~our unconsolidated joint ventures~~increased income from the South San Francisco JVs and ~~(ii) casualty-related losses on certain properties within~~ the SWF SH JV.

Income (loss) from discontinued operations

~~Income~~The change in income (loss) from discontinued operations ~~decreased~~ for the three and nine months ended September 30, ~~2022 primarily as~~2023 is a result of ~~decreased gain on sales of real estate from~~ the completion of dispositions of our senior housing portfolios. Income from discontinued operations further decreased for the nine months ended September 30, 2022 due to a decline in government grant income received under the CARES Act for the senior housing portfolio. The decrease in income from discontinued operations during the three and nine months ended September 30, 2022 was partially offset by decreased impairment charges on depreciable real estate and goodwill.

Noncontrolling interests’ share in continuing operations

Noncontrolling interests’ share in continuing operations ~~decreased~~increased for the ~~three and~~ nine months ended September 30, ~~2022~~2023 primarily as a result of a gain on sale of an ~~MOB~~outpatient medical building in a consolidated ~~partnership~~joint venture that was sold during the ~~third~~second quarter of ~~2021.~~

~~Noncontrolling interests’ share in discontinued operations~~

Noncontrolling interests’ share in discontinued operations decreased for the three and nine months ended September 30, 2022 as a result of the completion of our dispositions of our senior housing portfolios.2023.

Liquidity and Capital Resources

We anticipate that our cash flow from operations, available cash balances, and cash from our various financing activities will be adequate for the next 12 months and for the foreseeable future for purposes of: (i) funding recurring operating expenses; (ii) meeting debt service requirements; and (iii) satisfying funding of distributions to our stockholders and non-controlling interest members. Distributions are made using a combination of cash flows from operations, funds available under our bank line of credit (the “Revolving Facility”) and commercial paper program, ~~term loans,~~ proceeds from the sale of properties, and other sources of cash available to us.

In addition to funding the activities above, our principal liquidity needs for the next 12 months are to:

•fund capital expenditures, including tenant improvements and leasing costs; and

•fund future acquisition, transactional, and development and redevelopment activities.

Our longer term liquidity needs include the items listed above as well as meeting debt service requirements.

5654

Table of Contents

We anticipate satisfying these future needs using one or more of the following:

•cash flow from operations;

•sale of, or exchange of ownership interests in, properties or other investments;

•borrowings under our Revolving Facility and commercial paper program;

•issuance of additional debt, including unsecured notes, term loans, and mortgage debt; and/or

•issuance of common or preferred stock or its equivalent, including ~~the settlement of forward contracts or other~~ sales of common stock under the ATM Program (as defined below).

Our ability to access the capital markets impacts our cost of capital and ability to refinance maturing indebtedness, as well as our ability to fund future acquisitions and development through the issuance of additional securities or secured debt. Credit ratings impact our ability to access capital and directly impact our cost of capital as well. ~~For example,~~Our two senior unsecured delayed draw term loans with an aggregate principal amount of $500 million (the “Term Loan Facilities”) and our Revolving Facility ~~accrues~~accrue interest at ~~a rate per annum equal to LIBOR~~the Secured Overnight Financing Rate (“SOFR”) plus a margin that depends ~~upon our~~on the credit ratings ~~for~~of our senior unsecured long-term debt. Our Revolving Facility includes customary LIBOR replacement language, including, but not limited to, the use of rates based on the secured overnight financing rate administered by the Federal Reserve Bank of New York. We also pay a facility fee on the entire ~~revolving~~ commitment under our Revolving Facility that depends upon our credit ratings.As of October ~~31, 2022,~~27, 2023, we had long-term credit ratings of Baa1 from Moody’s and BBB+ from S&P Global, and ~~Fitch, and~~ short-term credit ratings of P-2 ~~A-2, and F2~~ from Moody’s and A-2 from S&P ~~Global, and Fitch, respectively.~~Global.

A downgrade in credit ratings by Moody’s and S&P Global ~~and Fitch~~ may have a negative impact on the interest rates and facility fees for our Revolving Facility and ~~2022~~ Term Loan Facilities and may negatively impact the pricing of notes issued under our commercial paper program and senior unsecured notes. While a downgrade in our credit ratings would adversely impact our cost of borrowing, we believe we would continue to have access to the unsecured debt markets, and we could also seek to enter into one or more secured debt financings, issue additional securities, including under our ATM Program, or dispose of certain assets to fund future operating costs, capital expenditures, or acquisitions, although no assurances can be made in this regard. Refer to “Market Trends and Uncertainties” above for a more comprehensive discussion of the potential impact of ~~Covid as well as~~ economic and market conditions on our business.

Changes in Material Cash Requirements and Off-Balance Sheet Arrangements

Debt.Our material cash requirements related to debt increased by ~~$421~~$167 million to ~~$6.6~~$6.7 billion at September 30, ~~2022,~~2023, when compared to December 31, ~~2021,~~2022, primarily as a result of the January 2023 and May 2023 issuances of $750 million aggregate principal amount of 5.25% senior unsecured notes due 2032, partially offset by a $572 million decrease in notes outstanding under our commercial paper program. In addition, in October 2022, we elected to draw the $500 million aggregate principal amount under the 2022 Term Loan Facilities, and utilized the proceeds to repay amounts outstanding under our commercial paper program.As of September 30, ~~2022,~~2023, we had ~~$1.59~~$5.4 billion of senior unsecured notes and $424 million outstanding under our commercial paper program. See Note 9 to the Consolidated Financial Statements for additional information about our debt commitments.

Development and redevelopment commitments. Our material cash requirements related to development and redevelopment projects and Company-owned tenant improvements decreased by ~~$49~~$128 million to ~~$421~~$124 million at September 30, ~~2022,~~2023, when compared to December 31, ~~2021,~~2022, primarily as a result of construction spend on and completion of existing projects in the first three quarters of ~~2022~~2023, thereby decreasing the remaining commitment.

Construction loan commitments.Due to the terms of our SHOP seller financing notes receivable, as of September 30, 2023, we are obligated to provide additional loans up to ~~$41 million.~~$36 million to fund senior housing redevelopment capital expenditure projects. Our material cash requirements to provide ~~this~~these additional ~~funding for senior housing redevelopment and capital expenditure projects~~loans decreased by ~~$17~~$4 million to ~~$41~~$36 million at September 30, ~~2022,~~2023, when compared to December 31, ~~2021, primarily as a~~2022. This decrease was the result of ~~reduced commitments from current year principal repayments on our seller financing.~~funding provided during the third quarter of 2023, thereby decreasing the remaining commitment. See Note 6 to the Consolidated Financial Statements for additional information.

Redeemable noncontrolling interests. Our material cash requirements related to redeemable noncontrolling interests decreased by $57 million to$49 million at September 30, 2023, when compared to December 31, 2022. Certain of our noncontrolling interest holders have the ability to put their equity interests to us upon specified events or after the passage of a predetermined period of time. Each put option is subject to changes in redemption value in the event that the underlying property generates specified returns for us and meets certain promote thresholds pursuant to the respective agreements. As of September 30, ~~2022, we had $128 million~~2023, two of the redeemable noncontrolling interests ~~none of which~~have met the conditions for redemption, ~~as of the balance sheet date.~~but were not yet exercised. See Note 11 to the Consolidated Financial Statements for additional information.

Distribution and Dividend Requirements.There have been no changes to our distribution and dividend requirements during the nine months ended September 30, ~~2022.~~2023.

Off-Balance Sheet Arrangements. We own interests in certain unconsolidated joint ventures as described in Note 7 to the Consolidated Financial Statements. Two of these joint ventures have mortgage debt of ~~$87~~$88 million, of which our share is $40 million. Except in limited circumstances, our risk of loss is limited to our investment in the joint ventures.

5755

Table of Contents

There have been no other material changes, outside of the ordinary course of business, during the nine months ended September 30, ~~2022~~2023 to the material cash requirements or material off-balance sheet arrangements disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 under “Material Cash Requirements” and “Off-Balance Sheet Arrangements” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Cash Flow Summary

The following summary discussion of our cash flows is based on the Consolidated Statements of Cash Flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.

The following table sets forth changes in cash flows (in thousands):


		Nine Months Ended September 30,							Nine Months Ended September 30,
		2022		2021		Change			2023		2022		Change
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	$	693,306	$	571,335	$	121,971	Net cash provided by (used in) operating activities	$	724,994	$	693,306	$	31,688
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(578,113)		1,203,675		(1,781,788)		Net cash provided by (used in) investing activities	(361,086)		(578,113)		217,027
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(165,517)		(1,687,889)		1,522,372		Net cash provided by (used in) financing activities	(376,815)		(165,517)		(211,298)

Operating Cash Flows

The increase in operating cash flow is primarily the result of an increase in income related to: (i) 2021 and 2022 acquisitions, (ii) annual rent increases, (iii) new leasing and renewal activity, and (iv) developments and redevelopments placed in service during 2021 and 2022. The increase in operating cash flow is partially offset by a decrease in income related to assets sold during 2021 and 2022. Our cash ~~flow~~flows from operations isare dependent upon the occupancy levels of our buildings, rental rates on leases, our tenants’ performance on their lease obligations, the level of operating expenses, and other factors.

~~Investing Cash Flows~~

~~The following are significant investing~~ Our net cash provided by operating activities increased $32 million for the nine months ended September 30, ~~2022:~~

•~~made investments of $866 million primarily related~~2023 compared to the ~~acquisition,~~nine months ended September 30, 2022 primarily as a result of: (i) developments and redevelopments placed in service during 2022 and 2023, (ii) annual rent increases, (iii) higher nonrefundable entrance fee collections, and (iv) new leasing and renewal activity. The increase in net cash provided by operating activities was partially offset by: (i) an increase in interest expense and (ii) an increase in property operating expenses.

Investing Cash Flows

Our cash flows from investing activities are generally used to fund acquisitions, developments, and redevelopments of real estate, net of proceeds received from sales of real estate, sales of DFLs, and repayments on loans receivable. Our net cash used in investing activities decreased $217 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily as a result of the following: (i) a reduction in acquisitions of real estate, (ii) an increase in proceeds from the sales of real estate, (iii) an increase in proceeds from principal repayments on loans receivable and marketable debt securities, (iv) a reduction in development and redevelopment of real ~~estate;~~estate, and

• (v) an increase in proceeds from insurance recoveries. The decrease in cash used by investing activities was partially offset by: (i) proceeds received ~~net proceeds of $288 million primarily~~in 2022 from the sale of a 30% interest in seven previously consolidated ~~life science assets~~lab buildings in South San Francisco, California ~~sales of real estate assets,~~ and ~~repayments on loans receivable and direct financing leases.~~

~~The following are significant investing activities for the nine months ended September 30, 2021:~~

•~~made~~(ii) higher investments ~~of $1.5 billion primarily~~in unconsolidated joint ventures related to the ~~acquisition, development, and redevelopment of real estate and~~ funding of ~~new and existing loans; and~~

•~~received net proceeds of $2.7 billion primarily from sales of real estate assets and repayments on loans receivable.~~redevelopment projects.

Financing Cash Flows

~~The following are significant~~Our cash flows from financing activities ~~for the nine months ended September 30, 2022:~~

•~~made net~~are generally impacted by issuances of equity, borrowings ~~of $419 million~~and repayments under our bank line of credit and commercial paper ~~program;~~

•program, senior unsecured notes, term loans, and mortgage debt, net of dividends paid to common shareholders. Our net cash ~~dividends on common stock of $487 million; and~~

•~~repurchased $68 million of common stock, including $56 million under the share repurchase program.~~

~~The following are significant~~used in financing activities increased $211 million for the nine months ended September 30, ~~2021:~~

•~~made net borrowings of $894 million under our bank line of credit and commercial paper program;~~

•~~made net repayments of $2.1 billion under our senior unsecured notes (including debt extinguishment costs) and mortgage debt; and~~

•~~paid cash dividends on common stock of $488 million.~~

~~Table of Contents~~

~~Discontinued Operations~~

Operating, investing, and financing cash flows in our Consolidated Statements of Cash Flows are reported inclusive of both cash flows from continuing operations and cash flows from discontinued operations. Certain significant cash flows from discontinued operations are disclosed in Note 142023 compared to the ~~Consolidated Financial Statements. The absence of future cash flows from discontinued operations is not expected to significantly impact our liquidity,~~nine months ended September 30, 2022 primarily as the proceeds from senior housing triple-net and SHOP dispositions were used to pay down debt and invest in additional real estate in our other business lines. Additionally, we have multiple other sources of liquidity that can be utilized in the future, as needed. Refer to the beginninga result of the ~~Liquidity and Capital Resources section above for additional information regarding our liquidity.~~

~~Debt~~

~~In July 2022, we increased the maximum aggregate face or principal amount that can be outstanding at any one time~~following: (i) net repayments under the commercial paper program and (ii) increased distributions to noncontrolling interests. The increase in net cash used in financing activities was partially offset by: (i) proceeds received from ~~$1.5 billion to $2.0 billion.~~the senior unsecured notes issuances in January 2023 and May 2023 and (ii) a reduction in repurchases of common stock.

Debt

In ~~August 2022,~~January 2023 and May 2023, we ~~executed the 2022 Term Loan Agreement that provides for two senior unsecured delayed draw term loans in an~~completed public offerings of $750 million aggregate principal amount of up5.25% senior unsecured notes due 2032.

In February 2023, the Revolving Facility was amended to ~~$500 million. As~~change the interest rate benchmark from LIBOR to SOFR.

Also in February 2023, the agreements associated with $142 million of ~~September 30, 2022,~~variable rate mortgage debt were amended to change the interest rate benchmarks from LIBOR to SOFR, effective March 2023. Concurrently, we ~~had no borrowings outstanding under~~modified the ~~2022 Term Loan Facilities. In October 2022,~~related interest rate swap instruments to reflect the ~~entirety of~~change in the ~~$500 million under the 2022 Term Loan Facilities was drawn.~~interest rate benchmarks from LIBOR to SOFR.

See Note 9 to the Consolidated Financial Statements for additional information about our outstanding debt.

Table of Contents

Approximately ~~76%~~ 94% and ~~79%~~76% of our consolidated debt ~~excluding debt classified as liabilities related to assets held for sale and discontinued operations, net,~~ was fixed rate debt as of September 30, 2023 and 2022, respectively. At September 30, 2023, our fixed rate debt and ~~2021,~~variable rate debt had weighted average interest rates of 3.70% and 5.65%, respectively. At September 30, 2022, our fixed rate debt and variable rate debt had weighted average interest rates of 3.45%and 3.42%~~, respectively. At September 30, 2021, our fixed rate debt and variable rate debt had weighted average interest rates of 3.52% and 0.52%~~, respectively. As of September 30, ~~2022,~~2023, we had $142 million of variable rate mortgage debt and the $500 million Term Loan Facilities swapped to fixed rates through interest rate swap instruments. These interest rate swap instruments are designated as cash flow ~~hedges, and as of September 30, 2021, we had $142 million of variable rate debt subject to interest rate cap instruments.~~hedges. For purposes of classification of the amounts above, variable rate debt with a derivative financial instrument designated as a cash flow hedge is reported as fixed rate debt due to us having effectively established a fixed interest rate for the underlying debt instrument. For a more detailed discussion of our interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 3 below.

Supplemental Guarantor Information

Healthpeak OP has issued the senior unsecured notes described in Note 9 to the Consolidated Financial Statements. The obligations of Healthpeak OP to pay principal, premiums, if any, and interest on such senior unsecured notes are guaranteed on a full and unconditional basis by the Company.

Subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that the parent guarantee is “full and unconditional”, the subsidiary obligor is a consolidated subsidiary of the parent company, the guaranteed security is debt or debt-like, and consolidated financial statements of the parent company have been filed. Accordingly, separate consolidated financial statements of Healthpeak OP have not been presented.

As permitted under Rule 13-01 of Regulation S-X, we have excluded the summarized financial information for the operating subsidiary because the Company and Healthpeak OP have no material assets, liabilities, or operations other than debt financing activities and their investments in non-guarantor subsidiaries, and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.

Equity

At September 30, ~~2022,~~2023, we had ~~538~~547 millionshares of common stock outstanding, equity totaled~~$7.0~~ $7.0 billion, and our equity securities had a market value of $~~12.5~~10.2 billion.

At-The-Market Program

In February 2023, in connection with the Reorganization, we terminated our previous at-the-market equity offering program and established a new at-the-market equity offering program (the “ATM Program”) that allows for the sale of shares of common stock having an aggregate gross sales price of up to $1.5 billion. In addition to the issuance and sale of shares of our common stock, we may also enter into one or more forward sales agreements (each, an “ATM forward contract”) with sales agents for the sale of our shares of common stock under our ATM Program.

During the three and nine months ended September 30, 2023, we did not issue any shares of our common stock under any ATM program.

At September 30, ~~2022,~~2023, $1.5 billion of our common stock remained available for sale under the ATM Program. Actual future sales of our common stock will depend upon a variety of factors, including but not limited to market conditions, the trading price of our common stock, and our capital needs. We have no obligation to sell any shares under our ATM Program.

See Note 11 to the Consolidated Financial Statements for additional information about our ATM Program.

Noncontrolling Interests

Healthpeak OP. Immediately following the Reorganization, Healthpeak Properties, Inc. was the initial sole member and 100% owner of Healthpeak OP. Subsequent to the Reorganization, certain of our employees (“OP Unitholders”) were issued approximately 2 million noncontrolling, non-managing member units in Healthpeak OP (“OP Units”). When certain conditions are met, the OP Unitholders have the right to require redemption of part or all of their OP Units for cash or shares of our common stock, at our option as managing member of Healthpeak OP. The per unit redemption amount is equal to either one share of our common stock or cash equal to the fair value of a share of common stock at the time of redemption. We classify the OP Units in permanent equity because we may elect, in our sole discretion, to issue shares of our common stock to OP Unitholders who choose to redeem their OP Units rather than using cash. None of the outstanding OP Units met the criteria for redemption as of September 30, 2023.

DownREITs. At September 30, 2023, non-managing members held an aggregate of ~~five~~approximately 5 millionunits in sevenlimited liability companies (“DownREITs”) for which we are the managing member. The DownREIT units are exchangeable for an amount of cash approximating the then-current market value of shares of our common stock or, at our option, shares of our common stock (subject to certain adjustments, such as stock splits and reclassifications). At September 30, ~~2022,~~2023, the outstanding DownREIT units were convertible into approximately ~~seven~~7 million shares of our common stock.

~~At-The-Market Program~~

Our at-the-market equity offering program (as amended from time to time, the “ATM Program”) has a capacity of $1.5 billion. In addition to the issuance and sale of shares of our common stock, we may also enter into one or more forward sales agreements (each, an “ATM forward contract”) with sales agents for the sale of our shares of common stock under our ATM Program.

During the three and nine months ended September 30, 2021, we utilized the forward provisions under the ATM Program to allow for the sale of an aggregate of 9.1 million shares of our common stock at an initial weighted average net price of $35.25 per share, after commissions. We did not utilize the forward provisions under the ATM program during the three and nine months ended September 30, 2022. Through September 30, 2022, no shares were settled under ATM forward contracts. Therefore, at September 30, 2022, 9.1 million shares remained outstanding under ATM forward contracts. These ATM forward contracts mature in the first quarter of 2023.

~~During the three and nine months ended September 30, 2022, we did not~~ ~~issue any shares of our common stock under the ATM Program.~~

5957

Table of Contents

At September 30, 2022, $1.18 billion of our common stock remained available for sale under the ATM Program. Actual future sales of our common stock will depend upon a variety of factors, including but not limited to market conditions, the trading price of our common stock, and our capital needs. We have no obligation to sell any of the remaining shares under our ATM Program.

~~See Note 11 to the Consolidated Financial Statements for additional information about our ATM Program.~~

Share Repurchase Program

On August 1, 2022, our Board of Directors approved the Share Repurchase Program under which we may acquire shares of our common stock in the open market up to an aggregate purchase price of $500 million. Purchases of common stock under the Share Repurchase Program may be exercised at our discretion with the timing and number of shares repurchased depending on a variety of factors, including price, corporate and regulatory requirements, and other corporate liquidity requirements and priorities. The Share Repurchase Program expires in August 2024 and may be suspended or terminated at any time without prior notice. During the ~~three and nine months~~year ended ~~September 30,~~December 31, 2022, we repurchased 2.1 million shares of our common stock at a weighted average price of $27.16 per share for a total of $56 million. During the three and nine months ended September 30, 2023, there were no repurchases under the Share Repurchase Program. Therefore, at September 30, ~~2022,~~2023, $444 million of our common stock remained available for repurchase under the Share Repurchase Program.

Shelf Registration

In ~~May 2021, we~~February 2023, the Company and Healthpeak OP jointly filed a prospectus with the SEC as part of a registration statement on Form S-3, using an automatic shelf registration process. This shelf registration statement expires on ~~May~~February 13, ~~2024~~2026 and at or prior to such time, we expect to file a new shelf registration statement. Under the “shelf” process, we may sell any combination of the securities described in the prospectus through one or more offerings. The securities described in the prospectus include future offerings of the Company’s common stock, preferred stock, depositary shares, warrants, debt securities, and ~~warrants.~~guarantees of debt securities issued by Healthpeak OP, and Healthpeak OP’s debt securities and guarantees of debt securities issued by the Company.

6058

Table of Contents

Non-GAAP Financial Measures Reconciliations

The following is a reconciliation from net income (loss) applicable to common shares, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Nareit FFO, FFO as Adjusted, and AFFO (in ~~thousands, except per share data)~~thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income (loss) applicable to common shares	Net income (loss) applicable to common shares	$	353,366	$	54,442	$	491,398	$	473,778	Net income (loss) applicable to common shares	$	64,048	$	353,366	$	233,497	$	491,398
Real estate related depreciation and amortization	Real estate related depreciation and amortization	173,190		177,175		531,412		506,172		Real estate related depreciation and amortization	184,559		173,190		561,357		531,412
Healthpeak’s share of real estate related depreciation and amortization from unconsolidated joint ventures	Healthpeak’s share of real estate related depreciation and amortization from unconsolidated joint ventures	8,704		4,722		19,049		12,044		Healthpeak’s share of real estate related depreciation and amortization from unconsolidated joint ventures	6,190		8,704		18,076		19,049
Noncontrolling interests’ share of real estate related depreciation and amortization	Noncontrolling interests’ share of real estate related depreciation and amortization	(4,464)		(4,849)		(14,487)		(14,599)		Noncontrolling interests’ share of real estate related depreciation and amortization	(4,571)		(4,464)		(14,042)		(14,487)

Loss (gain) on sales of depreciable real estate, net~~(1)~~	Loss (gain) on sales of depreciable real estate, net~~(1)~~	5,280		(41,393)		(11,408)		(598,531)		Loss (gain) on sales of depreciable real estate, net~~(1)~~	—		5,280		(86,463)		(11,408)
Healthpeak’s share of loss (gain) on sales of depreciable real estate, net, from unconsolidated joint ventures	Healthpeak’s share of loss (gain) on sales of depreciable real estate, net, from unconsolidated joint ventures	239		(1,068)		89		(6,934)		Healthpeak’s share of loss (gain) on sales of depreciable real estate, net, from unconsolidated joint ventures	—		239		—		89
Noncontrolling interests’ share of gain (loss) on sales of depreciable real estate, net	Noncontrolling interests’ share of gain (loss) on sales of depreciable real estate, net	—		3,450		12		5,628		Noncontrolling interests’ share of gain (loss) on sales of depreciable real estate, net	—		—		11,546		12
Loss (gain) upon change of control, net~~(2)~~(1)	Loss (gain) upon change of control, net~~(2)~~(1)	(311,438)		—		(311,438)		(1,042)		Loss (gain) upon change of control, net~~(2)~~(1)	—		(311,438)		(234)		(311,438)
Taxes associated with real estate dispositions	Taxes associated with real estate dispositions	197		483		31		2,666		Taxes associated with real estate dispositions	—		197		—		31
Impairments (recoveries) of depreciable real estate, net		—		1,952		—		5,695

Nareit FFO applicable to common shares	Nareit FFO applicable to common shares	225,074		194,914		704,658		384,877		Nareit FFO applicable to common shares	250,226		225,074		723,737		704,658
Distributions on dilutive convertible units and other	Distributions on dilutive convertible units and other	2,352		1,651		7,055		—		Distributions on dilutive convertible units and other	2,340		2,352		7,027		7,055
Diluted Nareit FFO applicable to common shares	Diluted Nareit FFO applicable to common shares	$	227,426	$	196,565	$	711,713	$	384,877	Diluted Nareit FFO applicable to common shares	$	252,566	$	227,426	$	730,764	$	711,713

Weighted average shares outstanding - diluted Nareit FFO	Weighted average shares outstanding - diluted Nareit FFO	546,015		544,889		546,677		539,159		Weighted average shares outstanding - diluted Nareit FFO	554,614		546,015		554,535		546,677

Impact of adjustments to Nareit FFO:	Impact of adjustments to Nareit FFO:									Impact of adjustments to Nareit FFO:
Transaction-related items	Transaction-related items	$	681	$	1,259	$	1,573	$	6,638	Transaction-related items	$	49	$	681	$	2,993	$	1,573
Other impairments (recoveries) and other losses (gains), net~~(3)~~(2)	Other impairments (recoveries) and other losses (gains), net~~(3)~~(2)	2,897		20,073		(5,874)		25,161		Other impairments (recoveries) and other losses (gains), net~~(3)~~(2)	(602)		2,897		557		(5,874)
Restructuring and severance related charges		—		—		—		2,463
Loss (gain) on debt extinguishments		—		667		—		225,824
Restructuring and severance-related charges										Restructuring and severance-related charges	—		—		1,368		—

Casualty-related charges (recoveries), net~~(4)~~(3)	Casualty-related charges (recoveries), net~~(4)~~(3)	4,514		558		4,103		5,203		Casualty-related charges (recoveries), net~~(4)~~(3)	(367)		4,514		(610)		4,103

Total adjustments	Total adjustments	$	8,092	$	22,557	$	(198)	$	265,289	Total adjustments	$	(920)	$	8,092	$	4,308	$	(198)

FFO as Adjusted applicable to common shares	FFO as Adjusted applicable to common shares	$	233,166	$	217,471	$	704,460	$	650,166	FFO as Adjusted applicable to common shares	$	249,306	$	233,166	$	728,045	$	704,460
Distributions on dilutive convertible units and other	Distributions on dilutive convertible units and other	2,338		2,313		7,055		6,323		Distributions on dilutive convertible units and other	2,341		2,338		7,022		7,055
Diluted FFO as Adjusted applicable to common shares	Diluted FFO as Adjusted applicable to common shares	$	235,504	$	219,784	$	711,515	$	656,489	Diluted FFO as Adjusted applicable to common shares	$	251,647	$	235,504	$	735,067	$	711,515

Weighted average shares outstanding - diluted FFO as Adjusted	Weighted average shares outstanding - diluted FFO as Adjusted	546,015		546,714		546,677		546,485		Weighted average shares outstanding - diluted FFO as Adjusted	554,614		546,015		554,535		546,677

FFO as Adjusted applicable to common shares										FFO as Adjusted applicable to common shares	$	249,306	$	233,166	$	728,045	$	704,460
Stock-based compensation amortization expense										Stock-based compensation amortization expense	3,434		4,614		10,966		14,635
Amortization of deferred financing costs										Amortization of deferred financing costs	3,054		2,691		8,828		8,069
Straight-line rents(4)										Straight-line rents(4)	(7,279)		(12,965)		(12,710)		(36,837)
AFFO capital expenditures										AFFO capital expenditures	(24,031)		(24,358)		(66,264)		(75,103)

Deferred income taxes										Deferred income taxes	(430)		(2,814)		(933)		(3,741)
Amortization of above (below) market lease intangibles, net										Amortization of above (below) market lease intangibles, net	(5,626)		(5,876)		(20,267)		(17,528)
Other AFFO adjustments										Other AFFO adjustments	(1,123)		(1,144)		(1,852)		(3,017)
AFFO applicable to common shares										AFFO applicable to common shares	217,305		193,314		645,813		590,938
Distributions on dilutive convertible units and other										Distributions on dilutive convertible units and other	2,340		1,649		7,026		4,945
Diluted AFFO applicable to common shares										Diluted AFFO applicable to common shares	$	219,645	$	194,963	$	652,839	$	595,883

Weighted average shares outstanding - diluted AFFO										Weighted average shares outstanding - diluted AFFO	554,614		544,190		554,535		544,852

Refer to footnotes on the next page.

6159

Table of Contents

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
FFO as Adjusted applicable to common shares $ 233,166 $ 217,471 $ 704,460 $ 650,166
Stock-based compensation amortization expense 4,614 4,436 14,635 13,895
Amortization of deferred financing costs 2,691 2,343 8,069 6,677
Straight-line rents (12,965) (8,290) (36,837) (23,627)
AFFO capital expenditures (24,358) (28,980) (75,103) (72,112)
Deferred income taxes (2,814) (1,747) (3,741) (6,240)
Other AFFO adjustments (7,020) (5,494) (20,545) (15,181)
AFFO applicable to common shares 193,314 179,739 590,938 553,578
Distributions on dilutive convertible units and other 1,649 1,650 4,945 4,512
Diluted AFFO applicable to common shares $ 194,963 $ 181,389 $ 595,883 $ 558,090
Weighted average shares outstanding - diluted AFFO 544,190 544,889 544,852 544,660

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Diluted earnings per common share $ 0.65 $ 0.10 $ 0.91 $ 0.88
Depreciation and amortization 0.33 0.33 0.98 0.93
Loss (gain) on sales of depreciable real estate, net 0.01 (0.07) (0.02) (1.11)
Loss (gain) upon change of control, net(2)
(0.57) — (0.57) 0.00
Taxes associated with real estate dispositions 0.00 0.00 0.00 0.00
Impairments (recoveries) of depreciable real estate, net — 0.00 — 0.01
Diluted Nareit FFO per common share $ 0.42 $ 0.36 $ 1.30 $ 0.71
Transaction-related items 0.00 0.00 0.00 0.01
Other impairments (recoveries) and other losses (gains), net(3)
0.00 0.04 (0.01) 0.05
Restructuring and severance related charges — — — 0.00
Loss (gain) on debt extinguishments — 0.00 — 0.42
Casualty-related charges (recoveries), net(4)
0.01 0.00 0.01 0.01
Diluted FFO as Adjusted per common share $ 0.43 $ 0.40 $ 1.30 $ 1.20

(1)This amount can be reconciled by combining the balances from the corresponding line of the Consolidated Statements of Operations and the detailed financial information for discontinued operations in Note 4 to the Consolidated Financial Statements.

~~(2)~~The three and nine months ended September 30, 2022 ~~includes~~include a gain upon change of control related to the sale of a 30% interest to a sovereign wealth fund and deconsolidation of seven previously consolidated ~~life science assets~~lab buildings in South San Francisco, California. The gain upon change of control is included in other income (expense), net in the Consolidated Statements of Operations.

~~(3)~~(2)~~The three months ended September 30, 2022 includes reserves for loan losses recognized in impairments and loan loss reserves (recoveries), net in the Consolidated Statements of Operations.~~ The nine months ended September 30, 2022 ~~also~~ includes the following, which are included in other income (expense), net in the Consolidated Statements of Operations: (i) a $23 million gain on sale of a hospital ~~that was in~~under a direct financing lease and (ii) $14 million of expenses incurred for tenant relocation and other costs associated with the demolition of an ~~MOB.~~outpatient medical building. The three and nine months ended September 30, ~~2021 includes the following: (i) a $22 million goodwill impairment charge in connection with our senior housing triple-net~~2023 and ~~SHOP asset sales which is reported in income (loss) from discontinued operations in the Consolidated Statements of Operations~~2022 include reserves and ~~(ii) recoveries of~~(recoveries) for expected loan ~~loss reserves~~losses recognized in impairments and loan loss reserves (recoveries), net in the Consolidated Statements of Operations. The nine months ended September 30, 2021 also includes the following: (i) $6 million of accelerated recognition of a mark-to-market discount, less loan fees, resulting from prepayments on loans receivable which is included in interest income in the Consolidated Statements of Operations and (ii) an additional $7 million goodwill impairment charge in connection with our senior housing triple-net and SHOP asset sales.

~~(4)~~(3)Casualty-related charges (recoveries), net are recognized in other income (expense), net and equity income (loss) from unconsolidated joint ventures in the Consolidated Statements of Operations.

(4)The ~~amounts are reported net~~nine months ended September 30, 2023 includes a $9 million write-off of straight-line rent receivable associated with Sorrento Therapeutics, Inc., which commenced voluntary reorganization proceedings under Chapter 11 of the ~~associated income tax impact.~~U.S. Bankruptcy Code. This activity is reflected as a reduction of rental and related revenues in the Consolidated Statements of Operations.

~~Table of Contents~~

Critical Accounting Estimates ~~and Recent Accounting Pronouncements~~

The preparation of financial statements in conformity with U.S. GAAP requires our management to use judgment in the application of critical accounting estimates and assumptions. We base estimates on the best information available to us at the time, our experience and on various other assumptions believed to be reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our consolidated financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A discussion of accounting estimates that we consider critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain is included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations” and Note 2 to the Consolidated Financial Statements.~~Operations.” There have been no significant changes to our critical accounting estimates during the three and nine months ended September 30, ~~2022.~~2023.

Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates. We use derivative and other financial instruments in the normal course of business to mitigate interest rate risk. We do not use derivative financial instruments for speculative or trading purposes. Derivatives are recorded on the Consolidated Balance Sheets at fair value (see Note 17 to the Consolidated Financial Statements).

To illustrate the effect of movements in the interest rate markets, we performed a market sensitivity analysis on our hedging instruments. We applied various basis point spreads to the underlying interest rate curves of our derivative portfolio in order to determine the change in fair value. At September 30, ~~2022,~~2023, a one percentage point increase or decrease in the underlying interest rate curve would result in a corresponding increase or decrease in the fair value of the derivative instruments by up to approximately ~~$24~~$19 million.

Interest Rate Risk. At September 30, ~~2022,~~2023, our exposure to interest rate risk was primarily on our variable rate debt. At September 30, ~~2022,~~2023, $142 million of our variable rate mortgage debt ~~was~~and our $500 million Term Loan Facilities were swapped to fixed byrates through interest rate swap instruments. Additionally, in August 2022, we entered into two forward-starting interest rate swap instruments that are designated as cash flow hedges that effectively establish a fixed interest rate for the $500 million 2022 Term Loan Facilities. The interest rate swap instruments are designated as cash flow hedges, with the objective of managing the exposure to interest rate risk by converting the interest rates on our variable rate debt to fixed interest rates. At September 30, ~~2022,~~2023, both the fair value and carrying value of the interest rate swap instruments were ~~$32~~$39 million.

Our remaining variable rate debt at September 30, ~~2022~~2023 was comprised of borrowings under our commercial paper program and certain of our mortgage debt. Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt and assets until their maturity or earlier prepayment and refinancing. If interest rates have risen at the time we seek to refinance our fixed rate debt, whether at maturity or otherwise, our future earnings and cash flows could be adversely affected by additional borrowing costs. Conversely, lower interest rates at the time of refinancing may reduce our overall borrowing costs. ~~However, interest~~Interest rate changes will affect the fair value of our fixed rate instruments. At September 30, ~~2022,~~2023, a one percentage point increase in interest rates would decrease the fair value of our fixed rate debt by approximately ~~$218~~$231 millionand a one percentage point decrease in interest rates would increase the fair value of our fixed rate debt by approximately ~~$234~~$247 million. These changes would not materially impact earnings or cash flows. Conversely, changes in interest rates on variable rate debt ~~and investments~~ would change our future earnings and cash flows, but not materially impact the fair value of those instruments. Assuming a one percentage point increase in the interest ~~rate~~rates related to our variable rate debt, ~~and investments,~~ and assuming no other changes in the outstanding balance at September 30, ~~2022,~~2023, our annual interest expense would increase by approximately~~$16~~ $4 million.

~~Market Risk.~~ We have investments in marketable debt securities classified as held-to-maturity because we have the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded at amortized cost and adjusted for the amortization of premiums and discounts through maturity. We consider Lastly, assuming a variety of factors in evaluating an other-than-temporary decline in value, such as: the length of time and the extent to which the market value has been less than our current adjusted carrying value; the issuer’s financial condition, capital strength, and near-term prospects; any recent events specific to that issuer and economic conditions of its industry; and our investment horizon in relationship to an anticipated near-term recoveryone percentage point decrease in the ~~market value, if any. At~~interest rates related to our variable rate loans receivable, and assuming no other changes in the outstanding balance at September 30, ~~2022, both the fair value and carrying value of marketable debt securities was$22~~2023, our annual interest income would decrease by approximately $2 million. ~~These marketable debt securities mature in December 2022.~~

6361

Table of Contents

Item 4. Controls and Procedures

Disclosure Controls and Procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our ~~Principal Executive Officer~~principal executive officer and ~~Principal Financial Officer,~~principal financial officer, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our ~~Principal Executive Officer~~principal executive officer and ~~Principal Financial Officer,~~principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, ~~2022.~~2023. Based upon that evaluation, our ~~Principal Executive Officer~~principal executive officer and ~~Principal Financial Officer~~principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, ~~2022.~~2023.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

6462

Table of Contents

PART II. OTHER INFORMATION

Item 1A. Risk Factors

~~There are no material changes to the risk factors previously disclosed~~We have described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022 and updated in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, the primary risk factors that could materially affect our business, financial condition, or future results. Such risk factors (as updated) continue to apply to our business, financial condition, and future results and are supplemented with the following risk factors:

Risks Related to the Mergers

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

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

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

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

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

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

Table of Contents

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

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

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

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

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

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

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

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

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

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

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

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

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

Table of Contents

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

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

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

As a result of the Mergers, and through a series of transactions, (i) each outstanding common share of Physicians Realty (other than Physicians Realty common shares to be canceled in accordance with the Merger Agreement), will be converted into the right to receive 0.674 (the “Exchange Ratio”) shares of Company common stock (the “Merger Consideration”), without interest, plus cash in lieu of consideration for fractional shares, but subject to any withholding required under applicable tax laws, and (ii) each Partnership OP Unit (as defined in the Merger Agreement) will be converted into common units in the Partnership Surviving Entity equal to the Exchange Ratio. The Exchange Ratio will not be adjusted for changes in the market prices of either shares of our common stock or Physicians Realty’s common shares. Changes in the market price of Physicians Realty common shares prior to the effective time of the Mergers will affect the market value of the Merger Consideration that Physicians Realty shareholders will receive on the closing date of the Mergers. Share price changes may result from a variety of factors (many of which are beyond our or Physicians Realty’s control), including the following factors:

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

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

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

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

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

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

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

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

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

Table of Contents

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

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

Risks Related to the Combined Company Following the Mergers

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

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

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

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

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

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

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

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

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

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

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

Table of Contents

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

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

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

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

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

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

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

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

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

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

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

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

Table of Contents

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

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

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

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

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

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

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

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

Table of Contents

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

(a)

None.

(b)

None.

(c)

The following table sets forth information with respect to purchases of our common stock made by us or on our behalf during the three months ended September 30, ~~2022.~~2023.

Period Covered Total Number
Of Shares
Purchased Average
Price
Paid Per
Share
Total Number Of Shares
Purchased As
Part Of Publicly
Announced Plans Or
Programs(2)
Maximum Number (Or
Approximate Dollar Value)
Of Shares That
May Yet Be Purchased
Under The Plans Or
Programs(2)
July 1-31, 2022 142 (1) $ 25.91 — $ —
August 1-31, 2022 2,061,332 27.16 2,061,332 444,018,701
September 1-30, 2022 30 (1) 24.28 — —
Total 2,061,504 $ 27.16 2,061,332 $ 444,018,701


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

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

(2)On August 1, 2022, our Board of Directors approved the Share Repurchase Program under which we may acquire shares of our common stock in the open market up to an aggregate purchase price of $500 million. Purchases of common stock under the Share Repurchase Program may be exercised at our discretion with the timing and number of shares repurchased depending on a variety of factors, including price, corporate and regulatory requirements, and other corporate liquidity requirements and priorities. The Share Repurchase Program expires in August 2024 and may be suspended or terminated at any time without prior notice. During the ~~three months~~year ended ~~September 30,~~December 31, 2022, we repurchased 2.1 million shares of our common stock at a weighted average price of $27.16 per share. ~~Therefore,~~During the three and nine months ended September 30, 2023, there were no repurchases, therefore, at September 30, ~~2022,~~2023, $444 million of our common stock remained available for repurchase under the Share Repurchase Program. Amounts do not include the shares of our common stock withheld under our equity incentive plans to offset tax withholding obligations as discussed in footnote 1.

Item 5. Other Information

During the three months ended September 30, 2023, none of our directors or Section 16 officers adopted, modified, or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement.

6569

Table of Contents

Item 6. Exhibits


2.1+						Agreement and Plan of Merger, dated February 7, 2023, by and among Healthpeak Properties, Inc., New Healthpeak, Inc. and Healthpeak Merger Sub, Inc. (incorporated herein by reference to Exhibit 2.1 to Healthpeak’s Current Report on Form 8-K12B filed February 10, 2023).

3.1						Articles of Amendment and Restatement of Healthpeak Properties, Inc. (formerly ~~HCP,~~New Healthpeak, Inc.) ~~dated June 1, 2012, as supplemented by the Articles Supplementary, dated July 31, 2017, and as amended by the Articles of Amendment, dated October 30, 2019~~effective February 10, 2023 (incorporated herein by reference to Exhibit 3.1 to Healthpeak’s ~~Annual~~Current Report on Form ~~10-K~~8-K12B filed February ~~13, 2020)~~10, 2023).

3.2						Articles of Amendment ~~to Articles of Restatement~~ of Healthpeak Properties, Inc. (formerly ~~HCP,~~New Healthpeak, Inc.)~~, dated October 30, 2019~~ effective February 10, 2023 (incorporated herein by reference to Exhibit ~~3.1~~3.2 to Healthpeak’s Current Report on Form ~~8-K~~8-K12B filed ~~October 30, 2019)~~February 10, 2023).

3.3						~~Sixth~~ Amended and Restated Bylaws of Healthpeak Properties, Inc. (formerly New Healthpeak, Inc.), dated ~~October 30, 2019~~February 10, 2023 (incorporated herein by reference to Exhibit ~~3.2~~3.4 to Healthpeak’s Current Report on Form ~~8-K~~8-K12B filed ~~October 30, 2019)~~February 10, 2023).

~~10.1~~22.1*						~~Term Loan Agreement, dated as~~List of ~~August 22, 2022, by and among the Company, as borrower, the lenders referred to therein, and Bank~~Issuers of ~~America, N.A., as administrative agent (incorporated herein by reference to Exhibit 10.1 to Healthpeak’s Current Report on Form 8-K filed August 22, 2022).~~

~~10.2†~~						~~Release Agreement for Thomas M. Herzog, dated October 6, 2022 (incorporated herein by reference to Exhibit 10.1 to Healthpeak’s Current Report on Form 8-K filed October 6, 2022).~~

~~10.3†~~						~~Release Agreement for Troy E. McHenry, dated November 1, 2022 (incorporated herein by reference to Exhibit 10.1 to Healthpeak’s Current Report on Form 8-K filed November 1, 2022).~~Guaranteed Securities.

31.1*						Certification by Scott M. Brinker, Healthpeak’s Principal Executive Officer, pursuant to Securities Exchange Act Rule 13a-14(a).

31.2*						Certification by Peter A. Scott, Healthpeak’s Principal Financial Officer, pursuant to Securities Exchange Act Rule 13a-14(a).

32.1**						Certification by Scott M. Brinker, Healthpeak’s Principal Executive Officer, pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350.

32.2**						Certification by Peter A. Scott, Healthpeak’s Principal Financial Officer, pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350.

101.INS*						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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 Labels Linkbase Document.

101.PRE*						XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

+ Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2).

* Filed herewith.

** Furnished herewith.

† ~~Management Contract or Compensatory Plan or Arrangement.~~

6670

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: ~~November 2, 2022~~October 30, 2023			Healthpeak Properties, Inc.

			~~(Registrant)~~

			/s/ SCOTT M. BRINKER
			Scott M. Brinker
			President and Chief Executive Officer
			(Principal Executive Officer)

			/s/ PETER A. SCOTT
			Peter A. Scott
			Chief Financial Officer
			(Principal Financial Officer)

			/s/ SHAWN G. JOHNSTON
			Shawn G. Johnston
			Executive Vice President and
			Chief Accounting Officer
			(Principal Accounting Officer)

6771


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):	3

	Consolidated Balance Sheets	3

	Consolidated Statements of Operations	4

	Consolidated Statements of Comprehensive Income (Loss)	5

	Consolidated Statements of Equity and Redeemable Noncontrolling Interests	6

	Consolidated Statements of Cash Flows	8

	Notes to the Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3836

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6361

Item 4.	Controls and Procedures	6462

PART II. OTHER INFORMATION



Item 1A.	Risk Factors	6563

Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	6569

Item 5.	Other Information	69

Item 6.	Exhibits	6670

Signatures		6771


Payoff Date(1)	Amount		Coupon Rate		Maturity Year
May 19, 2021	$	251,806	3.40	%	2025
May 19, 2021	298,194		4.00	%	2025
February 26, 2021	188,000		4.25	%	2023
February 26, 2021	149,000		4.20	%	2024
February 26, 2021	331,000		3.88	%	2024
January 28, 2021	112,000		4.25	%	2023
January 28, 2021	201,000		4.20	%	2024
January 28, 2021	469,000		3.88	%	2024


	September 30, 2022		December 31, 2021
Refundable entrance fees(1)	$	271,675	$	288,409
Accrued construction costs	160,937		179,995
Accrued interest	35,832		59,342
Other accounts payable and accrued liabilities	264,451		227,638
Accounts payable, accrued liabilities, and other liabilities	$	732,895	$	755,384


Period Covered	Total Number Of Shares Purchased		Average Price Paid Per Share		Total Number Of Shares Purchased As Part Of Publicly Announced Plans Or Programs(2)	Maximum Number (Or Approximate Dollar Value) Of Shares That May Yet Be Purchased Under The Plans Or Programs(2)
July 1-31, 2022	142	(1)	$	25.91	—	$	—
August 1-31, 2022	2,061,332		27.16		2,061,332	444,018,701
September 1-30, 2022	30	(1)	24.28		—	—
Total	2,061,504		$	27.16	2,061,332	$	444,018,701